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capital_land.rarcapital land/CAPITALAND A-R 2008B.pdf
CAPITALAND LIMITED ANNUAL REPORT 2008
For three years running, we chalked up profi ts exceeding
S$1 billion. Some call it
strong per for mance. We call it
disciplined aggression.
Corporate Profile
CapitaLand is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the multinational company’s core businesses in real estate, hospitality and real estate fi nancial services are focused in growth cities in Asia Pacifi c, Europe and the Gulf Cooperation Council (GCC) countries.
The company’s real estate and hospitality portfolio spans about 120 cities in over 20 countries. CapitaLand also leverages on its signifi cant asset base, real estate domain knowledge, fi nancial skills and extensive market network to develop real estate fi nancial products and services in Singapore and the region.
The listed subsidiaries and associates of CapitaLand include Australand, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust and CapitaRetail China Trust.
Contents
Global Presence ......................................................... 2 Letter to Shareholders ................................................ 4 Financial Highlights & 8-Year Share Price Performance .................................12 Financial Calendar .................................................... 13 Board of Directors .................................................... 14 Corporate Directory .................................................. 20 International Advisory Panel ..................................... 21 Council of CEOs ....................................................... 22 Corporate Offi ce ....................................................... 27 Corporate Governance ............................................. 28 Group Businesses .................................................... 37 Risk Assessment and Management ......................... 38 Stakeholder Communications .................................. 39 Corporate Social Responsibility ............................... 40 Human Resource...................................................... 42 Year in Brief .............................................................. 43 Awards & Accolades 2008 ....................................... 49 CapitaLand Residential Singapore ........................... 54
CapitaLand China ...................................................... 56 CapitaLand Commercial .......................................... 58 CapitaLand Retail ..................................................... 60 CapitaLand Serviced Residences ............................ 62 CapitaLand Integrated Developments ..................... 64 CapitaLand Financial Services ................................. 66 Australand ................................................................ 72 Performance Review ................................................ 74 Economic Value Added Statements ......................... 84 Value Added Statements .......................................... 85 Portfolio Details ........................................................ 86 Portfolio Analysis .................................................... 106 5-Year Financial Summary ..................................... 107 Statutory Accounts ................................................ 109 Other Information ................................................... 211 Shareholding Statistics ......................................... 214 Notice of Annual General Meeting ......................... 215 Proxy Form ............................................................. 219 Notes to Proxy Form .............................................. 220
1
CREDO Building for People to Build People Building People to Build for People
MISSION To build a world-class real estate company with international presence that:
• Creates sustainable shareholder value
• Delivers quality products and services
• Attracts and develops quality human capital
VISION A world-class entrepreneurial, prosperous and lasting real estate company led and managed by people with core values respected by the business and social community.
Ranked among the top fi ve real estate companies in Asia, reputed for its innovative and quality real estate products and services.
A company with a strong global network of long-term investors and blue-chip partners.
A company which attracts, develops and retains a diversity of talents; and which is committed to developing local talents to lead its overseas operations.
A company which delivers consistently above-market total shareholder returns.
2
Global Presence
Australia
Adelaide
Brisbane
Hobart
Melbourne
Perth
Sydney
China
Anyang
Beijing
Changsha
Chengdu
Chongqing
Dalian
Deyang
Dongguan
Foshan
Guangzhou
Hangzhou
Harbin
Hengyang
Hong Kong
Huhhot
Huizhou
Jiangmen
Kunshan
Laiwu
Ma’anshan
Macau
Maoming
Mianyang
Nanchang
Ningbo
Quanzhou
Rizhao
Shanghai
Shenyang
Shenzhen
Suzhou
Tai’an
Tianjin
Weifang
Wuhan
Wuhu
Xi’an
Xinxiang
Yangzhou
Yibin
Yiyang
Zhangzhou
Zhanjiang
Zhaoqing
Zhengzhou
Zhuzhou
Zibo
Georgia
Tbilisi
India
Ahmedabad
Bangalore
Chennai
Cochin
Hyderabad
Jalandhar
Mangalore
Mumbai
Mysore
Nagpur
Udaipur
Indonesia
Jakarta
Surabaya
Japan
Chitose
Eniwa
Fukuoka
Funabashi
Hiroshima
Kobe
Kyoto
Nagoya
Osaka
Saga
Sapporo
Sendai
Tokyo
Presence in about 120 cities in over 20 countries
ASIA PACIFIC
3
Kazakhstan
Aktau
Almaty
Astana
Malaysia
Johor
Kuala Lumpur
Kuching
Penang
Selangor
Philippines
Manila
Russia
Moscow
Singapore
South Korea
Seoul
Thailand
Bangkok
Krabi
Pattaya
Vietnam
Hanoi
Ho Chi Minh City
Belgium
Brussels
France
Aix-en-Provence
Bordeaux
Cannes
Ferney-Voltaire
Fontainebleau
Grenoble
Lille
Lyon
Marseille
Montpellier
Nice
Paris
Strasbourg
Toulouse
Germany
Berlin
Munich
Spain
Barcelona
United
Kingdom
London
Bahrain
Manama
Qatar
Doha
United Arab
Emirates
Abu Dhabi
Dubai
EUROPE
GULF COOPERATION COUNCIL COUNTRIES
Residential
Commercial
Retail
Serviced Residences
Integrated Developments
Financial Services
Raffl es City Developments
Multi Sector
Liew Mun Leong President & CEO
Dr Hu Tsu Tau Chairman
5
Letter to Shareholders
Dear Shareholders,
2008 was a year of dramatic global fi nancial turbulence. Wall Street stalwarts like Bear Stearns and Lehman Brothers fell while governments in Asia, Europe and the US bailed out major fi rms or took drastic steps to stimulate their economies. Global economic conditions deteriorated rapidly, and Singapore entered into a technical recession in the second half of 2008.
Amidst these unprecedented turbulent times, the Group achieved a healthy profi t after tax and minority interests (PATMI) of S$1,260.1 million in fi nancial year 2008. Excluding unrealised fair value changes, PATMI was still above the S$1 billion mark at S$1,039.6 million. This is the second highest net profi t on record and the third consecutive year that CapitaLand has achieved net profi t above S$1 billion. PATMI in 2006 was S$1,012.7 million and PATMI in 2007 was an exceptional S$2,759.3 million. The healthy profi t is a result of the consistent implementation of the Group’s strategy: Focus, Balance and Scale. We focused on capital productivity in real estate development and investment activities, whilst growing a balanced and solid base of sustainable fee and rental income.
Group statutory revenue for 2008 was S$2,752.3 million compared to the S$3,792.7 million in 2007. The Group manages over S$45 billion worth of assets which generate revenue under management of
S$5.9 billion. A signifi cant 70% of CapitaLand’s revenue is generated outside Singapore, a result of the Group’s ongoing multi-geography, multi-sector strategy to diversify its balanced revenue streams.
Group Earnings before Interest and Tax (EBIT) for 2008 was S$2,213.5 million against the exceptional S$3,824.0 million achieved in 2007. China and Singapore were the two key contributors, recording EBIT of S$987.0 million and S$890.8 million respectively. Earnings benefi tted from gains from divestments in Singapore and China, mainly the outright sales of Capital Tower Beijing and Hitachi Tower, the divestment of One George Street to CapitaCommercial Trust, and the sale of the Raffl es City portfolio in China to CapitaLand’s 50%-owned Raffl es City China Fund.
The Directors are pleased to propose a fi rst and fi nal dividend of 5.5 cents per share for fi nancial year 2008. In view of the good performance, the Directors have also decided to propose a special dividend of 1.5 cents per share for the fi nancial year 2008.
FOCUSED ON KEY SECTORS IN CORE MARKETS CapitaLand’s focus is on Asia Pacifi c, a region with
better economic and demand-driven fundamentals. In 2008, the Group’s businesses were navigating in the midst of an unprecedented global economic crisis.
Amidst these unprecedented turbulent times, the Group achieved a healthy
profi t after tax and minority interests (PATMI) of S$1,260.1 million in fi nancial
year 2008. Excluding unrealised fair value changes, PATMI was still above the
S$1 billion mark at S$1,039.6 million. This is the second highest net profi t on
record and the third consecutive year that CapitaLand has achieved net profi t
above S$1 billion.
6
Residential We continued to build on our reputation as a
developer of premier, award-winning homes across Asia Pacifi c. The Group’s fi nancial strength and the progressive revenue recognition of strong sales achieved in 2006 and 2007 allowed us fl exibility to pace residential launches in 2008.
In Singapore, CapitaLand released selected apartments at Latitude for preview sales and launched the fi rst phase of The Wharf Residence. CapitaLand unveiled the design of its distinctive high-rise condominium along Farrer Road by internationally-renowned architect Zaha Hadid. The Group has also engaged acclaimed architects Rem Koolhaas and Ole Scheeren from the Offi ce of Metropolitan Architecture to design its future condominium at Gillman Heights. Three developments – Citylights, RiverEdge and Varsity Park Condominium – obtained Temporary Occupation Permit.
In China, CapitaLand has developed depth and breadth of operations over the last 15 years. It has well-established operations in Beijing, Shanghai and Guangzhou and footholds in other cities like Chengdu and cities within the Henan province. During the year, the Group launched three residential projects – two in Beijing and one in Hangzhou – and released new units from existing projects in Chengdu, Ningbo and Shanghai for sale. Given CapitaLand’s strong balance sheet and relatively low level of land in its pipeline, the Group is in a strong position to replenish land supply
and seek further growth opportunities in China, where it remains a long-term investor.
In Australia, stimulus measures introduced by the government in late 2008, such as interest rate cuts and increased incentives for fi rst-time home buyers, have improved housing affordability. Australand, CapitaLand’s listed subsidiary in Australia, took proactive steps to strengthen its balance sheet by successfully raising approximately A$461 million (S$598 million) through a one-for-one renounceable accelerated priority issue of stapled securities.
In the Group’s new markets, Vietnam, Thailand and India have started to provide the Group a platform for future growth. In Vietnam, CapitaLand has a total of four projects with a pipeline of 3,600 residential units under construction. TCC Capital Land, CapitaLand’s joint venture in Thailand, has sold over 2,500 homes since it was formed in 2003.
In the GCC region, Raffl es City Bahrain and Arzanah achieved total residential sales bookings worth S$1 billion within three months of their respective launches. About 90 Raffl es City Bahrain apartments were sold at average prices above other high-quality apartments in Bahrain. For Rihan Heights, the fi rst phase of Arzanah, 575 out of 868 units were sold. Arzanah, a 49%/51% joint venture project between CapitaLand and Mubadala Development Company in Abu Dhabi, will comprise about 9,000 homes and will be completed in phases.
Citylights, Singapore – Winner of the 2008 URA Architectural Heritage Award
7
CapitaLand has a proven track record of proactively managing debt and liquidity long before the present downturn. As at 31 December 2008, average debt maturity was extended to 4.4 years while a sizeable 75% of total debt was locked in at fi xed rates. This was achieved through the successful and timely issuance of a S$1.3 billion 10-year convertible bond issue in February 2008, the largest such transaction ever done in Singapore. CapitaLand also secured S$1.996 billion syndicated transferable secured fi nancing facilities for the construction and development of a new condominium along Farrer Road. This was the largest syndicated residential property development loan ever arranged in Singapore and was supported by 10 local and international banks.
We have maintained a disciplined investment management strategy since inception, buying and selling at the right time and when target returns are met. Despite the global fi nancial downturn, CapitaLand was able to successfully realise asset values through timely divestments at the peak of the cycle. In line with the Group’s consistent and disciplined strategy of recycling capital, CapitaLand monetised S$3.3 billion worth of assets in 2008 with a gain of S$607 million. Since 2007, CapitaLand has monetised about S$7 billion of assets while reinvesting about S$3 billion.
Our prudent capital management approach has enabled us to build a robust balance sheet over the years, supported with steady cash fl ows from our sponsored real estate investment trusts (REITs) and fee-income business. This has strengthened the Group’s fi nancial standing as we head into the global fi nancial storm. CapitaLand ended 2008 with a cash position of S$4.2 billion and comfortable net debt of S$5.6 billion. Accordingly, CapitaLand’s net debt-to-equity ratio has improved to 0.47 from 0.92 just after formation in November 2000.
On 9 February 2009, the Group announced a renounceable, fully-underwritten rights issue to raise S$1.84 billion. This pre-emptive, tactical move from a position of business and fi nancial strength will signifi cantly enhance CapitaLand’s fi nancial fl exibility and allow it to build on its successful long-term strategy. A strong balance sheet will further differentiate the Group from our competitors. It will also enable us to extend our leadership position in our core businesses of residential, commercial, retail, serviced residences, integrated developments and fi nancial services. CapitaLand’s major shareholder Temasek Holdings has committed to subscribe for all rights shares that it is entitled to.
PRUDENT CAPITAL MANAGEMENT, DISCIPLINED AGGRESSION Pre-emptively increased fi nancial strength through rights issue
Commercial CapitaLand is one of the largest owners/managers
of commercial properties in Singapore’s Downtown Core. The Group’s overseas commercial footprint spans gateway cities in China, Australia, Japan, Malaysia, India and the United Kingdom.
In Singapore, CapitaLand’s portfolio of Grade A offi ce space remained resilient despite downward pressures due to economic uncertainties and an increase in supply. Moreover, there are opportunities for higher rental reversions in 2009 as the average monthly offi ce passing rent of the Group’s portfolio is low compared to the current market rentals.
CapitaLand actively managed its property portfolio, realising the asset values of mature commercial properties. The Group successfully sold One George Street and its 50%
We have maintained a disciplined
investment management strategy
since inception, buying and selling
at the right time and when target
returns are met. Despite the global
fi nancial downturn, CapitaLand was
able to successfully realise asset
values through timely divestments
at the peak of the cycle.
8
stake in Hitachi Tower in Singapore, generating cash fl ow of S$1.6 billion and realising a gain of S$149.2 million. Wilkie Edge, a mixed-use development comprising offi ce, retail and a serviced residence component, received its Temporary Occupation Permit in late 2008.
In China, the divestment of Capital Tower Beijing generated proceeds of S$505.0 million and a gain of S$187.0 million. The Group also divested 50% interests of two wholly-owned properties in Beijing and Shanghai to CITIC Trust. These properties are now equally owned and managed by CapitaLand and CITIC Trust as part of the CITIC CapitaLand Business Park Fund. The cash fl ow from these deals will be reinvested to undertake more quality developments in China.
In Australia, Australand successfully completed the new 34,000 square metre Twenty8 project at Freshwater Place in Melbourne’s Southbank with leasing commitments of 77% at completion.
Retail Our retail mall operations in Singapore remained
resilient due to a portfolio of well-located malls with strong captive markets catering largely to necessity shopping. ION Orchard, the latest retail landmark in Singapore, is targeted to open in mid-2009 with strong lease commitments. Many of ION Orchard’s tenants are retailers new to the Singapore market and will offer new retail products.
China’s retail market continues to possess potential for further growth, supported by the country’s vast internal market and growing domestic consumption. CapitaLand’s malls in China continued to perform well in 2008. The Group’s retail mall portfolio in China now comprises 28 completed malls. Another 30 malls are under construction and 10 are expected to complete and open in 2009.
CapitaLand made further inroads in India by entering into separate joint ventures with prominent Indian property groups Advance India Projects Limited and the Prestige Group. Purchase agreements for nine retail projects have since been signed. CapitaLand’s fi rst mall in India – The Forum Value Mall Whitefi eld in Bangalore – is targeted to open in 2009.
Serviced Residences Ascott, CapitaLand’s serviced residence unit,
continued to affi rm its position as the world’s largest international serviced residence owner-operator. It currently operates over 18,000 serviced residence units in Asia Pacifi c, Europe and the GCC region. Another 7,000 units will begin operations over the next two to three years to further add to operating income, including management fees from third party management contracts. This makes a portfolio of over 25,000 serviced residence units in 190 properties spanning 66 cities and 22 countries.
Citadines Paris Louvre, France – One of Ascott’s serviced residence properties in the heart of Paris
9
In April, Ascott was privatised, allowing it to tap on CapitaLand’s more established network, real estate development and fi nancial services capabilities. This will strengthen its leadership position and accelerate its growth.
During the year, Ascott reconstituted its asset portfolio through divestments and selective investments. It monetised assets and generated divestment proceeds of S$243 million and gains of S$119 million. Investment commitments of S$428 million were made for new projects across Australia, France, India, Japan and the United Kingdom.
In order to give greater focus to growing revenues and profi ts from both hospitality management services and real estate development, Ascott set up two separate arms in October – Ascott Hospitality and Ascott Real Estate.
Integrated Developments CapitaLand currently has seven integrated developments
in Singapore, Bahrain, China and the United Arab Emirates (Abu Dhabi).
In China, CapitaLand has four Raffl es City integrated developments in Shanghai, Beijing, Chengdu and Hangzhou. An inauguration ceremony was held for Raffl es City Beijing in October 2008. Construction has begun for Raffl es City Chengdu while planning and design works have commenced for Raffl es City Hangzhou.
The Group is developing two integrated developments in the oil-rich GCC region. Raffl es City Bahrain sits in a prime waterfront location within Bahrain Bay, while Arzanah is a 1.4 million square metre integrated development in Abu Dhabi. Although Abu Dhabi and Bahrain have not been insulated from the effects of the global fi nancial downturn, property demand fundamentals remain sound with continued affl uence and proactive government measures to support local economies.
Financial Services/Real Estate Investment Trusts REITs and private equity real estate funds are central
to CapitaLand’s overall business model. The management fees and yields of these REITs and funds provide recurrent income as well as a platform for capital recycling, a cornerstone of the Group’s capital-effi cient strategy. During the year, CapitaLand raised about S$2 billion with three new private equity funds in China, namely Raffl es City China Fund, CITIC CapitaLand Business Park Fund and CapitaLand China Development Fund II. CapitaLand’s
50%-owned US$1 billion (about S$1.4 billion) Raffl es City China Fund is the Group’s fi rst integrated development private equity fund in China and the largest to date.
As at 31 December 2008, the Group manages fi ve REITs listed in Singapore and Malaysia and 17 private equity real estate funds with assets under management (AUM) of more than S$25 billion, a year-on-year increase of about S$8 billion. This makes the Group one of Asia’s largest REIT and real estate fund managers. Our fund and property management fees totalled S$413.0 million in 2008, a 35% increase over 2007. The Group will continue to strengthen its fund management and fi nancial services business in Asia as part of the process to further grow our fee-income business.
MANAGING TALENT DURING TURBULENT TIMES CapitaLand’s credo is “Building people to build for
people”. We recognise that our most important asset is people, not just brick-and-mortar buildings. While conventional wisdom is that real estate is about “Location, Location, Location”, the Group believes it is more about “People, People, People”.
During good and bad times, CapitaLand adopts an integrated human capital strategy to recruiting, developing and motivating human capital. During diffi cult times, our corporate strategy is to recruit and retain talented people to help manage the vicissitude of the current turbulent times and seek out the right opportunities when the market recovers. We make a deliberate effort to recruit people at different points in their careers – young talents, mid-career professionals and experienced “silver hairs” – as collectively they are able to adopt a balanced approach for turbulent times.
During these bad times, we have proactively implemented scaled salary reductions instead of headcount reductions and re-emphasised employee training. CapitaLand continues to leverage on its in-house training institutes to train and develop employees. In 2008, we launched a new programme called RE100, a 100-hour in-house accelerated real estate course customised for newly-recruited mid-career executives within CapitaLand. The Group also regularly conducts the CapitaLand Leadership Development Programme to develop senior management.
The Group strongly believes in building up a strong pipeline of in-house business leaders. It has a rigorous succession planning process to identify talented employees for leadership succession and build management bench
10
strength. Over the years, CapitaLand has cultivated these future leaders through job exposure and leadership courses, and groomed them to take on greater and broader responsibilities when the opportunity arises.
CORPORATE SOCIAL RESPONSIBILITY CapitaLand is committed to be a socially-responsible
corporate citizen. We will contribute to the societies within which we operate, and promote sustainable growth for future generations.
In 2008, we launched the Building a Greener Future programme at CapitaLand’s malls, offi ces and serviced residences, and the Green for Hope recycling project in Singapore primary schools.
Through its philanthropic arm CapitaLand Hope Foundation, CapitaLand supported programmes dedicated to the education, healthcare and shelter needs of underprivileged children. Benefi ciaries included The Straits Times School Pocket Money Fund, Life Community Services Society (Friends of Children programme) and children in China affected by the May 2008 Sichuan earthquake.
The Group’s environmental and corporate social responsibility efforts have not gone unnoticed. In 2008, CapitaLand won the prestigious Singapore Environmental Achievement Award 2007/08 at the Singapore Green Summit and the coveted “Outstanding Corporate Citizen of China” award.
We will continue to promote environmentally- sustainable practices throughout the Group and aim to be an industry leader in terms of green buildings and environmental awareness.
SOUND CORPORATE GOVERNANCE AND RISK MANAGEMENT
Sound risk management and corporate governance policies and practices are vital to drive our long-term sustainable growth and shareholder value. We will continue to maintain a prudent risk profi le by counterchecking business initiatives with an independent risk management team, and by investing in a mix of stable assets and development properties. We believe that our unique risk management models developed in-house, which have served us well over several past crises, will continue to assist us as part of a “disciplined aggression” in our investment strategy.
Besides regular board meetings and special strategic planning meetings, the Board has seven Board committees to provide independent supervision and assist on corporate governance matters. These include the Investment Committee, Audit Committee, Risk Committee, and Executive Resource and Compensation Committee.
In 2008, the Group’s high standards of corporate conduct were recognised with a number of prominent corporate governance awards. CapitaLand won the Most Transparent Company (Property) award from the Securities Investors Association (Singapore) (SIAS) for the eighth consecutive year. The Group also clinched a Merit for SIAS’ overall Singapore Corporate Governance award, which recognises companies that practise good corporate governance. In addition, CapitaLand was named “Best Company in Singapore” by fi nance magazine The Asset in its Corporate Governance Awards 2008.
Over the years, CapitaLand has weathered several crises. Each time, we
emerged a stronger company and further extended our market leadership
position to become one of the largest real estate companies in Asia. We are
riding into this latest storm with a much stronger ship, a more experienced
crew and a talent pipeline of young, future leaders, all ready to take the Group
into the next decade.
11
LOOKING AHEAD Over the years, CapitaLand has weathered several
crises. Each time, we emerged a stronger company and further extended our market leadership position to become one of the largest real estate companies in Asia. We are riding into this latest storm with a much stronger ship, a more experienced crew and a talent pipeline of young, future leaders, all ready to take the Group into the next decade. We believe that investment in people is the best investment we can make in today’s turbulent market.
In these times of uncertainties and asset volatility, we believe the best approach is our corporate strategy of Focus, Balance and Scale and to stick to the market and demand fundamentals. CapitaLand will continue to focus capital and human resources into our established sectors of residential, commercial, retail, serviced residences, integrated developments and fi nancial services, particularly in our core markets and the new growth markets of the GCC region (Abu Dhabi and Bahrain), India and Vietnam.
Financially, we have consistently maintained a conservative and proactive approach to capital management. CapitaLand has signifi cant fi nancial strength to ride out a prolonged downturn given our strong balance sheet and high cash position.
The successful rights issue to raise S$1.84 billion, launched from a position of business and fi nancial strength, will increase the Group’s fi nancial capacity to pursue acquisitions and investment opportunities that arise in the recovery of our key markets. This will enable us to extend our leading position as a Pan-Asian real
estate developer, Asia’s largest retail mall owner/ manager, the largest international serviced residence owner-operator and a leading Asia-based REIT and real estate fund manager.
We wish to express our deep appreciation to our Board members for their invaluable contributions. In particular, we wish to thank Mr Hsuan Owyang, who retired from the Board and as Deputy Chairman on 1 January 2009. He has guided the Group since inception in 2000 and will be missed greatly. We would also like to welcome Mr Peter Seah as the new Deputy Chairman. Peter brings with him extensive fi nancial experience, including over 30 years as a banker.
We wish to thank all staff, shareholders, business partners and associates for their continued commitment and support of the CapitaLand Group. We are convinced that together, we can ride out the current global fi nancial downturn and prepare the ground for the next growth cycle.
Dr Hu Tsu Tau Liew Mun Leong Chairman President & CEO
25 February 2009
CapitaLand’s corporate social responsibility initiative: Beijing primary school students were invited to draw pictures of encouragement for children affected by the Sichuan earthquake.
12
Financial Highlights
HEALTHY PROFITS AND RETURNS
Profi t attributable to Shareholders
S$1.26 billion Return on Shareholders’ Funds
12.2% Assets Under Management
S$25.9 billion
Earnings Before Interest and Tax
S$2.2 billion Return on Total Assets
7.9% Revenue Under Management
S$5.9 billion
8-Year Share Price Performance Benchmark Index
350
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150
100
50
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D e c 0
0
Ju n 0
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• CapitaLand Share Price • MSCI AC Asia Pacifi c ex-Japan Industrials Index • Straits Times Index Source: Bloomberg
13
Financial Calendar
Financial year ended 31 December 2008
Announcement of First Quarter Results 30 April 2008
Announcement of Second Quarter Results 1 August 2008
Announcement of Third Quarter Results 31 October 2008
Announcement of Full Year Results 9 February 2009
Annual General Meeting 23 April 2009
Books Closing (Record Date) 5.00 p.m. on 8 May 2009
Books Closure 11 May 2009
Proposed Payment of 2008 Final Dividend 22 May 2009 and Special Dividend
Financial year ending 31 December 2009
Proposed Announcement of First Quarter Results April 2009
Proposed Announcement of Second Quarter Results July 2009
Proposed Announcement of Third Quarter Results October 2009
Proposed Announcement of Full Year Results February 2010
Board of Directors
Standing, left to right Professor Kenneth Stuart Courtis Director James Koh Cher Siang Director
Seated, left to right Arfat Pannir Selvam Director Peter Seah Lim Huat Deputy Chairman
Standing, left to right Lim Chin Beng Director Richard Edward Hale Director Jackson Peter Tai Director
Seated, left to right Dr Hu Tsu Tau Chairman Liew Mun Leong President & CEO
Not in the picture Dr Victor Fung Kwok King Director
16
Board of Directors
Dr Hu Tsu Tau Chairman
Dr Hu Tsu Tau, a Non-Executive Independent Director,
joined the CapitaLand Board on 13 April 2004 and was elected
Chairman on the same day. He was last re-appointed as Director
at CapitaLand’s Annual General Meeting on 29 April 2008. He is
also Chairman of CapitaLand’s Investment Committee.
Dr Hu is presently Chairman of GIC Real Estate Pte Ltd and
Fullerton Financial Holdings Pte Ltd. He is also a Member of the
Board of the Government of Singapore Investment Corporation
Pte Ltd (GIC).
From 1985 to 2001, he was a Cabinet Minister whose
portfolio included the Trade and Industry, Health and Finance
ministries. Prior to his ministerial appointment, Dr Hu was
Managing Director of the Monetary Authority of Singapore (MAS)
and GIC from 1983 to 1984. Before his appointments in MAS and
GIC, he was with the Shell Group of companies from 1960, and
his last position in this global company was as Chairman and
Chief Executive of the Shell Group of companies in Singapore.
Dr Hu is a graduate of the University of California, USA
with a Bachelor of Science in Chemistry. He also holds a
Postgraduate Diploma (Chemical Engineering) and a Doctorate
in Chemical Engineering, both from the University of
Birmingham, UK.
Peter Seah Lim Huat Deputy Chairman
Mr Peter Seah, a Non-Executive Director, joined the
CapitaLand Board on 18 December 2001 and was appointed
as Deputy Chairman on 1 January 2009. Mr Seah was last
re-elected as Director at CapitaLand’s Annual General Meeting
on 27 April 2007. He is also Chairman of CapitaLand’s Finance
and Budget Committee and a Member of CapitaLand’s
Executive Resource and Compensation Committee and
Nominating Committee.
Mr Seah is presently the Chairman of SembCorp Industries
Ltd and Singapore Technologies Engineering Ltd (both listed
on the SGX-ST). He is also Deputy Chairman of Singapore
Technologies Telemedia Pte Ltd and Global Crossing Limited;
and Chairman of LaSalle Foundation Limited. Mr Seah is a
Director of Chartered Semiconductor Manufacturing Ltd, STATS
ChipPAC Ltd, StarHub Ltd (all listed on the SGX-ST), as well as
Siam Commercial Bank Public Company Limited (listed on the
Stock Exchange of Thailand) and Bank of China.
Mr Seah also sits on the Board of the Government of
Singapore Investment Corporation Pte Ltd and is a Member of
Defence Science and Technology Agency and S Rajaratnam
School of International Studies.
Mr Seah was President & CEO of Singapore Technologies
Pte Ltd. Prior to the above appointment, Mr Seah was with
Overseas Union Bank (OUB) from 1977 and became its
President & CEO in 1991. Mr Seah retired as Vice Chairman
and CEO from OUB on 30 September 2001. Mr Seah was also
the Chairman of Singapore Computer Systems Limited (listed
on the SGX-ST) and President Commissioner of PT Indosat Tbk
(listed on the Stock Exchange of Indonesia).
Mr Seah is a graduate of the University of Singapore with
an Honours Degree in Business Administration.
Liew Mun Leong President & CEO
Mr Liew Mun Leong is President and CEO of CapitaLand
Group. He joined the Board of Pidemco Land as Director on
1 January 1997. Pidemco Land merged with DBS Land to form
CapitaLand in November 2000. Mr Liew continued to serve on
the CapitaLand Board and was last re-elected as Director at
CapitaLand’s Annual General Meeting on 27 April 2007. He also
serves as Member of CapitaLand’s Investment Committee,
Nominating Committee, Corporate Disclosure Committee and
Finance and Budget Committee.
Mr Liew is Chairman of CapitaLand Residential Singapore
Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand
Commercial Limited, CapitaLand Retail Limited, CapitaLand
Financial Limited and CapitaLand ILEC Pte. Ltd. He is Deputy
Chairman of The Ascott Group Limited as well as the Deputy
Chairman of CapitaMall Trust Management Limited (the
manager of CapitaMall Trust listed on the SGX-ST),
CapitaCommercial Trust Management Limited (the manager of
CapitaCommercial Trust listed on the SGX-ST), CapitaRetail
China Trust Management Limited (the manager of CapitaRetail
China Trust listed on the SGX-ST) and Ascott Residence Trust
Management Limited (the manager of Ascott Residence Trust
listed on the SGX-ST). He is a Director of CapitaLand Hope
Foundation, the Group’s philanthropic arm. Mr Liew also chairs
the Civil Aviation Authority of Singapore.
In 2006, Mr Liew was named Outstanding CEO of the Year
in the Singapore Business Awards. In 2007, he was conferred
the CEO of the Year award (for fi rms with market value of
S$500 million or more) in The Business Times’ Singapore
Corporate Awards. In 2008, Mr Liew was named Asia’s Best
Executive of 2008 (Singapore) by Asiamoney and Best CEO
in Asia (Property) by Institutional Investor.
17
Mr Liew graduated from the University of Singapore with
a Civil Engineering degree and is a registered professional civil
engineer.
Lim Chin Beng Director
Mr Lim Chin Beng, a Non-Executive Independent Director,
joined the Board of Pidemco Land as Director on 23 February
1998. Pidemco Land merged with DBS Land to form
CapitaLand in November 2000. Mr Lim continued to serve on
the CapitaLand Board and was last re-appointed as Director at
CapitaLand’s Annual General Meeting on 29 April 2008. He is
also Chairman of CapitaLand’s Executive Resource and
Compensation Committee and Nominating Committee.
Mr Lim is presently Chairman of The Ascott Group Limited
and CapitaLand Hope Foundation. He is also Chairman of
Singapore Airshow & Events Pte Ltd, Changi Airport
International Pte Ltd and Singapore Changi Airport Enterprise
Pte Ltd. Mr Lim sits on the Boards of StarHub Ltd (listed on
the SGX-ST) and Pontiac Land Pte Ltd. He is also Chairman
of Pontiac Land’s Audit Committee.
Mr Lim has 30 years of experience in the aviation industry
beginning with the Malaysian Airlines in the 1960s. In the
1970s, he helped start up Singapore Airlines and was its
Managing Director from 1972 to 1982. Mr Lim retired as Deputy
Chairman of Singapore Airlines in 1996. He was Chairman of
the Singapore Tourist Promotion Board from 1985 to 1989.
Between 1991 and 1997, Mr Lim was Singapore’s Ambassador
to Japan. In 2003, Mr Lim started Valuair, Singapore’s fi rst low
cost airline, which subsequently merged with Jetstar Asia in
2005. Mr Lim retired as a Member of the Public Service
Commission in December 2008, after serving for 11 years in
the Commission.
In recognition of his signifi cant contribution to the airline and
tourism industries, Mr Lim was awarded the Businessman of the
Year Award in 1986 and the Outstanding Contribution to Tourism
Award in 1990. In 1998, Mr Lim was inducted as a Legend into
the Aviation Week & Space Technology Laureates Hall of Fame.
In 2004, Mr Lim was conferred the Grand Gordon of the
Order of the Rising Sun (Kyokujitu Daijusho) by the Emperor
of Japan and in 2007, he was awarded the Public Service
Star by the Government of Singapore.
Mr Lim is a graduate of the University of Malaya with a
Bachelor of Arts (Honours) in Economics. He also attended
an Advanced Management Program at the Harvard Business
School, USA in 1973.
Jackson Peter Tai Director
Mr Jackson Tai, a Non-Executive Independent Director,
joined the CapitaLand Board on 20 November 2000 and was
last re-elected as Director at CapitaLand’s Annual General
Meeting on 29 April 2008. He is a Member of CapitaLand’s
Investment Committee and Finance and Budget Committee.
Mr Tai is a Supervisory Board Member of ING Groep NV in
the Netherlands and Director of MasterCard Incorporated and
Brookstone, Inc. in the USA. He is also a Member of the
Bloomberg L.P. Asia-Pacifi c Advisory Board.
Mr Tai was formerly the Vice Chairman and Chief Executive
Offi cer of DBS Group Holdings (listed on the SGX-ST) and DBS
Bank. Prior to joining DBS Bank, Mr Tai was a senior regional
manager for J.P. Morgan & Co. Incorporated in New York,
Tokyo, and San Francisco, and a Managing Director of the
Investment Banking Division.
Mr Tai is a graduate of Rensselaer Polytechnic Institute, USA,
with a Bachelor of Science in Management. He also holds a
Master of Business Administration from Harvard University, USA.
Richard Edward Hale Director
Mr Richard Hale, a Non-Executive Independent Director,
joined the CapitaLand Board on 10 February 2003 and was last
re-appointed as Director at CapitaLand’s Annual General Meeting
on 29 April 2008. He is also Chairman of CapitaLand’s Audit
Committee and a Member of CapitaLand’s Risk Committee.
Mr Hale is Chairman of CapitaCommercial Trust
Management Limited (the manager of CapitaCommercial Trust
listed on the SGX-ST) and sits on the Boards of Sembcorp
Industries Ltd, Sembcorp Marine Ltd and Wheelock Properties
(Singapore) Limited (all listed on the SGX-ST). He is a Fellow of
the Singapore Institute of Directors.
Mr Hale started his career with The Hongkong and Shanghai
Banking Corporation Ltd in October 1958 and served in London,
Paris, Hong Kong, Germany, Malaysia, Japan and Singapore
before retiring from the Bank as CEO Singapore and Director in
March 1995. From July 1995 to September 1997, he acted as
advisor on environmental matters for HSBC Holdings plc London,
based in Singapore. Mr Hale was Executive Chairman of SNP
Corporation Ltd from 1 April 1999 to April 2000, and also served
as Chairman of the Singapore International Chamber of
Commerce for 1993 and 1994. He was formerly a Governor of
United World College of South East Asia, Singapore and a Director
of The Ascott Group Limited and BW Trust Management Pte Ltd.
18
Board of Directors
Mr Hale was educated at Radley College, Abingdon, UK.
He is a Fellow of the Chartered Institute of Bankers, London.
Dr Victor Fung Kwok King Director
Dr Victor Fung, a Non-Executive Independent Director,
joined the CapitaLand Board on 5 May 2005 and was last
re-elected as Director at CapitaLand’s Annual General Meeting
on 29 April 2008. He was a Member of the CapitaLand’s
International Advisory Panel.
Dr Fung is presently the Group Chairman of the Li & Fung
Group of companies. He is Chairman of the International
Chamber of Commerce since July 2008. He is also Chairman
of the Greater Pearl River Delta Business Council, Hong Kong
University Council and the Hong Kong - Japan Business
Co-operation Committee. Dr Fung is a member of the Chinese
People’s Political Consultative Conference and a member of
the Executive Committee of the Commission on Strategic
Development of the Hong Kong Government. Dr Fung is an
independent non-executive Director of Bank of China (Hong
Kong) Limited and Orient Overseas (International) Ltd in Hong
Kong, and the Baosteel Group Corporation in the People’s
Republic of China. In 2003, the Hong Kong Government
awarded Dr Fung the Gold Bauhinia Star for distinguished
service to the community.
Dr Fung holds Bachelor and Master Degrees in Electrical
Engineering from the Massachusetts Institute of Technology, and
a Doctorate in Business Economics from Harvard University, USA.
James Koh Cher Siang Director
Mr James Koh, a Non-Executive Independent Director,
joined the CapitaLand Board on 1 July 2005 and was last
re-elected as Director at CapitaLand’s Annual General Meeting
on 28 April 2006. He is Chairman of CapitaLand’s Risk
Committee and Corporate Disclosure Committee; and a
Member of CapitaLand’s Audit Committee.
Mr Koh is Chairman of CapitaMall Trust Management Limited
(the manager of CapitaMall Trust listed on the SGX-ST) and
Chairman of its Audit Committee and Corporate Disclosure
Committee. He is also a Director of CapitaLand Hope Foundation.
Mr Koh is presently Chairman of Housing & Development
Board and Singapore Deposit Insurance Corporation Limited.
He sits on the Boards of Singapore Airlines Limited, UOL Group
Limited and Hotel Plaza Limited (all listed on the SGX-ST). He is
also a Director of Singapore Co-operation Enterprise.
From 1997 to 2005, Mr Koh served as Chief Executive
Offi cer of the Inland Revenue Authority of Singapore. In that
capacity, he was both Commissioner of Inland Revenue and
Commissioner of Charities. Prior to these appointments,
Mr Koh was the Permanent Secretary in the Ministries of
National Development, Community Development and
Education. Mr Koh has substantial experience in public
administration having served in the Ministries of Finance,
National Development, Community Development, Education
and the Prime Minister’s Offi ce. He was awarded the Public
Administration Medal (Gold) in 1983 and the Meritorious
Service Medal in 2002.
Mr Koh is a graduate of Oxford University, UK with a
Bachelor of Arts (Honours) and a Master of Arts in Philosophy,
Political Science and Economics. He also holds a Master in
Public Administration from Harvard University, USA.
Arfat Pannir Selvam Director
Mrs Arfat Selvam, a Non-Executive Independent Director,
joined CapitaLand Board on 2 January 2006 and was last
re-elected as Director at CapitaLand’s Annual General Meeting
on 28 April 2006. She is a Member of CapitaLand’s Audit
Committee, Corporate Disclosure Committee, Nominating
Committee and Risk Committee.
Mrs Selvam is presently the Managing Director of Arfat
Selvam Alliance LLC, a corporate fi nance law practice. With
over 35 years in legal practice as a corporate fi nance lawyer,
Mrs Selvam has been involved in some landmark Singapore
acquisition transactions.
Mrs Selvam is a graduate of the University of Singapore with
a law degree and was admitted to practise as an Advocate &
Solicitor of the Supreme Court of Singapore in 1969. Mrs Selvam
was the President of the Law Society of Singapore in 2003.
19
Professor Kenneth Stuart Courtis Director
Professor Kenneth Courtis, a Non-Executive Independent
Director, joined the CapitaLand Board on 14 February 2007
and was re-elected as Director at CapitaLand’s Annual General
Meeting on 27 April 2007. He is a Member of CapitaLand’s
Finance and Budget Committee and Investment Committee.
Professor Courtis is CapitaLand’s Economics Adviser and a
Member of CapitaLand’s International Advisory Panel.
Professor Courtis is Founding Chairman of Next Capital
Partners. He was formerly Managing Director and Vice
Chairman of Goldman Sachs Asia, Managing Director, Chief
Economist and Strategist of Deutsche Bank Group Asia, and
a Director of CNOOC Ltd, Hong Kong. He is presently a Director
of Noble Group Limited, a company listed on the SGX-ST.
Professor Courtis is one of the world’s leading investment
bankers and analysts of Asian economies. He has led a number
of large, international corporate transactions centred on Asia,
and pioneered a number of investment banking areas across
the region. Widely sought after for his knowledge of how global
market forces, fi nancial and political developments, and
corporate strategy interact, Professor Courtis advises major
clients throughout the Asia Pacifi c region, as well as in Europe
and North America.
Professor Courtis also works closely with central banks,
ministries of fi nance, and heads of government throughout Asia,
and has been called on several occasions to advise the
President of the USA, and the heads of government of several
countries in Europe, North America, Asia, and the Middle East.
Professor Courtis has lectured at Keio and Tokyo
Universities, Japan’s two most prestigious educational
institutions; l’Institut d’Etudes Politiques, Paris; and in
universities in North America. He is a member of the boards,
advisory councils, and trustee of a number of international
fi rms, universities, and research institutes in Asia, Europe and
North America.
Professor Courtis received his Bachelor degree from Glendon
College in Toronto and a Master in International Relations from
Sussex University in the UK. He received a Master of Business
Administration from INSEAD (the European Institute of Business
Administration), and a Doctorate with honours and high
distinction, from l’Institut d’Etudes Politiques, Paris.
20
Corporate Directory
Board of Directors
Dr Hu Tsu Tau
Chairman
Peter Seah Lim Huat
Deputy Chairman
Liew Mun Leong
President & CEO
In order of date of appointment:
Lim Chin Beng
Jackson Peter Tai
Richard Edward Hale
Dr Victor Fung Kwok King
James Koh Cher Siang
Arfat Pannir Selvam
Professor Kenneth Stuart Courtis
Company Secretary
Low Sai Choy
Assistant Company Secretary
Ng Chooi Peng
Audit Committee
Richard Edward Hale (Chairman)
James Koh Cher Siang
Arfat Pannir Selvam
Investment Committee
Dr Hu Tsu Tau (Chairman)
Liew Mun Leong
Jackson Peter Tai
Professor Kenneth Stuart Courtis
Olivier Lim Tse Ghow
Executive Resource and
Compensation Committee
Lim Chin Beng (Chairman)
Peter Seah Lim Huat
Nominating Committee
Lim Chin Beng (Chairman)
Peter Seah Lim Huat
Liew Mun Leong
Arfat Pannir Selvam
Finance and Budget Committee
Peter Seah Lim Huat (Chairman)
Liew Mun Leong
Jackson Peter Tai
Professor Kenneth Stuart Courtis
Olivier Lim Tse Ghow
Corporate Disclosure Committee
James Koh Cher Siang (Chairman)
Liew Mun Leong
Arfat Pannir Selvam
Risk Committee
James Koh Cher Siang (Chairman)
Richard Edward Hale
Arfat Pannir Selvam
Registered Address
168 Robinson Road
#30-01 Capital Tower
Singapore 068912
Telephone: +65 6823 3200
Facsimile: +65 6820 2202
Share Registrar
M & C Services Private Limited
138 Robinson Road
#17-00 The Corporate Offi ce
Singapore 068906
Telephone: +65 6227 6660
Facsimile: +65 6225 1452
Auditors
KPMG LLP
16 Raffl es Quay
#22-00 Hong Leong Building
Singapore 048581
Telephone: +65 6213 3388
Facsimile: +65 6225 6157
(Engagement Partner since fi nancial
year ended 31 December 2005:
Eng Chin Chin)
Principal Bankers
• Australia and New Zealand
Banking Group Limited
• Bank of China
• BNP Paribas
• Calyon
• China Merchants Bank Co., Ltd
• Commonwealth Bank of Australia
• DBS Bank Ltd
• Fortis Bank S. A./N. V.
• Industrial and Commercial Bank
of China
• Malayan Banking Berhad
• Mizuho Corporate Bank, Ltd
• National Australia Bank Limited
• Oversea-Chinese Banking
Corporation Limited
• Standard Chartered Bank
• Sumitomo Mitsui Banking Corporation
• The Bank of Tokyo-Mitsubishi UFJ, Ltd
• The Hongkong and Shanghai Banking
Corporation Limited
• The Royal Bank of Scotland plc
• United Overseas Bank Limited
• Westpac Banking Corporation
21
International Advisory Panel
The CapitaLand International Advisory Panel (IAP) taps on the experience and
expertise of corporate leaders of regional and global companies. The Panel meets at
least once a year to advise, and exchange views with, CapitaLand management on
global trends and regional developments, and to provide inputs on the Group’s
strategies and businesses.
The IAP is chaired by Mr Philip Yeo and currently has eight members, comprising
industry leaders and chief executives of global corporations from Asia and the
United States.
During the year, Sir Alan Cockshaw and Mr Aman Mehta retired from the IAP.
CapitaLand would like to record its deep appreciation for their unstinting contributions.
CapitaLand IAP members in 2008: Philip Yeo
Special Advisor for Economic Development
Prime Minister’s Offi ce, Singapore
and
Chairman
SPRING Singapore
Professor Kenneth Stuart Courtis
Former Vice Chairman and Managing Director
Goldman Sachs Asia
Tan Sri Dr Ahmad Tajuddin Bin Ali
Chairman
UEM Group Berhad
Dr Fu Yu Ning
Director & President
China Merchants Group Limited
Professor Shawn Xu Xiaonian
Professor of Economics and Finance
China Europe International Business School
Gail D. Fosler
President
The Conference Board, Inc.
Thomas J. Barrack, Jr
Chairman and Chief Executive Offi cer
Colony Capital, LLC
Hiroshi Toda
Vice Chairman
Nomura Securities Co., Ltd.
CapitaLand IAP members who retired in 2008: Sir Alan Cockshaw
Chairman
Cibitas Investments Limited
HPR Holdings Limited
Aman Mehta
Chief Executive Offi cer (Retired)
The Hongkong and Shanghai Banking Corporation
Standing, left to right
Wee Hui Kan CEO, CapitaRetail China Trust
Management Limited
Chan Say Yeong CEO, Quill Capita Management Sdn Bhd
Gerald Lee CEO, Ascott Hospitality, The Ascott Group Limited
Chen Lian Pang CEO (Southeast Asia),
CapitaLand Commercial Limited
Lui Chong Chee CEO, CapitaLand Financial Limited
Wen Khai Meng CEO, CapitaLand Commercial Limited;
Co-CEO, CapitaLand Financial Limited
Olivier Lim Group Chief Financial Offi cer, CapitaLand Limited
Lim Ming Yan CEO, CapitaLand China Holdings Pte Ltd;
CEO, CapitaLand Financial Limited (China Development)
Bob Johnston Managing Director & CEO, Australand
Holdings Limited
Wong Heang Fine CEO, CapitaLand ILEC Pte. Ltd.
Lim Beng Chee CEO, CapitaLand Retail Limited;
CEO, CapitaMall Trust Management Limited
Chong Kee Hiong CEO, Ascott Real Estate, The Ascott Group
Limited; CEO, Ascott Residence Trust Management Limited
Seated, left to right
Lynette Leong CEO, CapitaCommercial
Trust Management Limited
Jennie Chua President & CEO, The Ascott Group Limited
Liew Mun Leong President & CEO, CapitaLand Group
Patricia Chia CEO, CapitaLand Residential Singapore Pte Ltd
Kee Teck Koon Chief Investment Offi cer, CapitaLand Limited
23
Council of CEOs
CORPORATE OFFICE
Liew Mun Leong President & CEO, CapitaLand Group
Mr Liew Mun Leong is President and CEO of CapitaLand
Group. Mr Liew is Chairman of CapitaLand Residential
Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd,
CapitaLand Commercial Limited, CapitaLand Retail Limited,
CapitaLand Financial Limited and CapitaLand ILEC Pte. Ltd.
He is Deputy Chairman of The Ascott Group Limited,
CapitaMall Trust Management Limited, CapitaCommercial Trust
Management Limited, CapitaRetail China Trust Management
Limited and Ascott Residence Trust Management Limited.
He is a Director of CapitaLand Hope Foundation, the Group’s
philanthropic arm. Mr Liew also chairs the Civil Aviation
Authority of Singapore.
In 2006, Mr Liew was named Outstanding CEO of the Year
in the Singapore Business Awards. In 2007, he was conferred
the CEO of the Year award (for fi rms with market value of
S$500 million or more) in The Business Times’ Singapore
Corporate Awards. In 2008, Mr Liew was named Asia’s Best
Executive of 2008 (Singapore) by Asiamoney and Best CEO
in Asia (Property) by Institutional Investor.
Mr Liew graduated from the University of Singapore with
a Civil Engineering degree and is a registered professional
civil engineer.
Kee Teck Koon Chief Investment Offi cer, CapitaLand Limited
Mr Kee Teck Koon is the Chief Investment Offi cer of
CapitaLand Limited. He is also a Non-Executive Director of
CapitaMall Trust Management Limited, CapitaCommercial Trust
Management Limited and CapitaRetail China Trust Management
Limited. Between April 2003 and February 2007, he was
responsible for overseeing the Group’s Financial, Commercial
and Retail businesses. Prior to that, he was the Managing
Director and CEO of The Ascott Group Limited from November
2000 to April 2003. Mr Kee has held senior management
appointments with several other organisations. He started his
career in 1979 with the Singapore Armed Forces and the
Ministry of Defence where he remained until 1991.
Mr Kee holds a Master of Arts in Engineering Science from
the University of Oxford, United Kingdom.
Olivier Lim Group Chief Financial Offi cer, CapitaLand Limited
Mr Olivier Lim is the Group Chief Financial Offi cer of
CapitaLand Limited. He is also a Non-Executive Director of
CapitaMall Trust Management Limited, CapitaCommercial Trust
Management Limited, CapitaRetail China Trust Management
Limited and Australand Holdings Limited, and a Director of The
Ascott Group Limited.
Prior to joining CapitaLand Limited, he was Director and
Head of the Real Estate Unit, Corporate Banking in Citibank
Singapore. He has more than 19 years of work experience in
diverse areas including corporate banking, investment banking,
corporate fi nance and real estate fi nancial products.
In 2007, Mr Lim was named Chief Financial Offi cer of the
Year (for fi rms with market value of S$500 million or more) in
The Business Times’ Singapore Corporate Awards.
Mr Lim holds a First Class Honours degree in Civil
Engineering from the Imperial College of Science, Technology
and Medicine, United Kingdom.
24
RESIDENTIAL
Patricia Chia CEO, CapitaLand Residential Singapore Pte Ltd
Ms Patricia Chia is the CEO of CapitaLand Residential
Singapore Pte Ltd. She also sits on the Boards of a number
of subsidiaries and joint venture companies. She has over 25
years of experience in project development and management,
general management, and human resource and development.
Ms Chia holds a Master in Construction Management from
the National University of Singapore and graduated with First
Class Honours in Civil Engineering from the University of
Auckland, New Zealand.
Bob Johnston Managing Director & CEO, Australand Holdings Limited
Mr Bob Johnston is the Managing Director and CEO of
Australand Holdings Limited, one of Australia’s major diversifi ed
property groups.
He has 20 years of experience in the property industry.
Prior to joining Australand, Mr Johnston held senior positions
within the Lend Lease Group, including Global CEO of Bovis
Lend Lease, Chief Operating Offi cer of Lend Lease’s Real
Estate Investment Management Business in the United States
and CEO of Bovis Lend Lease in the Asia Pacifi c region.
Mr Johnston holds a Bachelor of Engineering (First Class
Honours) from James Cook University, Australia.
Lim Ming Yan CEO, CapitaLand China Holdings Pte Ltd
CEO, CapitaLand Financial Limited (China Development)
Mr Lim Ming Yan is the CEO of CapitaLand China Holdings
Pte Ltd and CEO of CapitaLand Financial Limited (China
Development), responsible for the Group’s real estate
development and fi nancial operations in China. He was
awarded the Magnolia Award by the Shanghai Municipal
Government in 2003 and 2005. In 2007, Mr Lim was also
named Outstanding Chief Executive (Overseas) in the
Singapore Business Awards.
Mr Lim graduated from the University of Birmingham,
United Kingdom with a Bachelor of Science (First Class
Honours) in Mechanical Engineering and Economics.
COMMERCIAL/RETAIL/ FINANCIAL SERVICES
Wen Khai Meng CEO, CapitaLand Commercial Limited
Co-CEO, CapitaLand Financial Limited
Mr Wen Khai Meng is the CEO of CapitaLand Commercial
Limited and Co-CEO of CapitaLand Financial Limited. He is
also a Director of CapitaCommercial Trust Management Limited
and Quill Capita Management Sdn Bhd.
Mr Wen holds a Master of Business Administration and a
Master of Science in Construction Engineering from the
National University of Singapore, as well as a Bachelor of
Engineering (First Class Honours) from the University of
Auckland, New Zealand.
Chen Lian Pang CEO (Southeast Asia), CapitaLand Commercial Limited
Mr Chen Lian Pang is the CEO of Southeast Asia for
CapitaLand Commercial Limited. He was the CEO and
Managing Director of TCC Capital Land Limited, CapitaLand’s
joint venture company with TCC Land in Thailand, from its
inception in 2003 before stepping down on 31 December 2008.
He has more than 20 years of construction and real estate
experience in both Singapore and overseas.
Mr Chen holds a Master of Science in Civil Engineering from
the National University of Singapore and a Bachelor of Science
in Civil Engineering (First Class Honours) from the University
of Cardiff, United Kingdom. He is a registered professional
engineer.
Council of CEOs
25
Lim Beng Chee CEO, CapitaLand Retail Limited
CEO, CapitaMall Trust Management Limited
Mr Lim Beng Chee is the CEO of CapitaLand Retail Limited
(CRTL). Concurrently, he is the CEO and Executive Director of
CapitaMall Trust Management Limited (CMTML). Mr Lim is also
a member of CMTML’s Executive Committee.
Mr Lim has more than nine years of real estate investment
and asset management experience. Mr Lim previously held
positions within the CapitaLand Group, including CEO of
CapitaRetail China Trust Management Limited, Deputy CEO of
CRTL and Deputy CEO of CMTML.
Earlier, he was part of the team sponsored by CapitaLand
Limited to create and operate property funds such as
CapitaLand China Residential Fund, CapitaRetail Japan Fund,
CapitaRetail China Incubator Fund and CapitaRetail China
Development Funds. Mr Lim also played an instrumental role in
the creation and listing of CapitaRetail China Trust, Singapore
fi rst pure-play China retail real estate investment trust (REIT).
Mr Lim holds a Master of Business Administration
(Accountancy) from the Nanyang Technological University of
Singapore and a Bachelor of Arts in Physics (Honours) from
the University of Oxford, United Kingdom.
Lui Chong Chee CEO, CapitaLand Financial Limited
Mr Lui Chong Chee is the CEO of CapitaLand Financial
Limited. He is also Chairman of Australand Holdings Limited
and a Non-Executive Director of CapitaMall Trust Management
Limited, CapitaCommercial Trust Management Limited,
CapitaRetail China Trust Management Limited and Ascott
Residence Trust Management Limited.
Mr Lui previously held various positions within the Group,
including Chief Financial Offi cer of CapitaLand Limited and CEO
of CapitaLand Residential Limited. Prior to joining CapitaLand,
Mr Lui was the Managing Director of Citigroup Investment Bank
(Singapore) Limited.
Mr Lui holds a Master of Business Administration in Finance
and International Economics as well as a Bachelor of Science in
Business Administration (Magna Cum Laude) from New York
University, United States.
Lynette Leong CEO, CapitaCommercial Trust Management Limited
Ms Lynette Leong is the CEO and Executive Director of
CapitaCommercial Trust Management Limited.
Ms Leong has more than 20 years of international experience
based in several key cities in the world with major real estate fund
management, banking and fi nancial institutions. Prior to joining
CapitaCommercial Trust Management Limited, Ms Leong was the
CEO of Ascendas’ South Korea offi ce where she spearheaded
Ascendas’ strong foothold in South Korea’s real estate market.
Ms Leong holds a Master of Science in Real Estate and a
Bachelor of Science in Estate Management from the National
University of Singapore.
Wee Hui Kan CEO, CapitaRetail China Trust Management Limited
Mr Wee Hui Kan is the CEO and Executive Director of
CapitaRetail China Trust Management Limited (CRCTML).
Mr Wee is also a member of CRCTML’s Executive Committee.
Concurrently, Mr Wee is the Managing Director for the fund
manager of CapitaLand China Residential Fund.
Mr Wee has more than 14 years of real estate investment
and asset management experience. Previously, he was the
Deputy CEO of CRCTML and General Manager for CapitaLand
China Holdings Pte Ltd.
Mr Wee holds a Master of Business Administration
(Accountancy) from Nanyang Technological University of
Singapore and a Bachelor of Engineering (Honours) from
National University of Singapore.
Chan Say Yeong CEO, Quill Capita Management Sdn Bhd
Mr Chan Say Yeong is the CEO and Executive Director of
Quill Capita Management Sdn Bhd, the manager of Quill Capita
Trust, which is listed on Bursa Malaysia Securities Berhad,
CapitaLand’s fi rst overseas-listed REIT. Prior to this, he held the
position of Managing Director of CapitaLand Financial Limited,
based in Malaysia.
Mr Chan holds a Bachelor of Accountancy from the National
University of Singapore. He has completed the Executive
Development Program by The Wharton School of the University
of Pennsylvania, United States.
26
SERVICED RESIDENCES
Jennie Chua President & CEO, The Ascott Group Limited
Ms Jennie Chua is the President & CEO of The Ascott
Group Limited. She also sits on the Boards of CapitaLand
ILEC Pte. Ltd. and CapitaLand Financial Limited.
Ms Chua was previously the President and CEO of Raffl es
Holdings Limited. She currently chairs or serves on government,
community service and private sector boards and committees,
both locally and internationally.
Ms Chua is on the Board of Trustees of Nanyang
Technological University, Singapore and a member of Cornell
Nanyang Institute Advisory Board and NYU Tisch School of the
Arts – Asia Board. She serves on the Temasek Advisory Panel of
Temasek Holdings (Pte) Ltd and is a member of Singapore’s
Pro-Enterprise Panel.
She has been honoured with accolades and awards
including three Singapore National Day awards, Person of the
Year – Asia Pacifi c (Hotel) 2002, Hotelier of the Year 1999,
Woman of the Year 1999, Champion of the Arts 1999 and
Independent Hotelier of the World 1997.
Ms Chua graduated from the School of Hotel Administration,
Cornell University, United States with a Bachelor of Science.
Chong Kee Hiong CEO, Ascott Real Estate, The Ascott Group Limited
CEO, Ascott Residence Trust Management Limited
Mr Chong Kee Hiong is the CEO of Ascott Real Estate at
The Ascott Group Limited. Concurrently, he is the CEO of
Ascott Residence Trust Management Limited.
Prior to joining Ascott, Mr Chong was the Chief Financial
Offi cer of Raffl es Holdings Ltd. He is a member of the
Government Parliamentary Committee for Finance and Trade
and Industry Resource Panel, Audit Committee member of
Sentosa Development Corporation and Treasurer of Orchid
Country Club.
Mr Chong holds a Bachelor of Accountancy from the
National University of Singapore. He is a member of the Institute
of Certifi ed Public Accountants of Singapore.
Gerald Lee CEO, Ascott Hospitality, The Ascott Group Limited
Mr Gerald Lee is the CEO of Ascott Hospitality at The Ascott
Group Limited. Prior to this, he has held senior management
positions within Ascott, including Deputy CEO (Operations),
CEO (Europe) and Chief Brand & Marketing Offi cer.
Prior to joining Ascott, Mr Lee was the Senior Vice
President of Corporate Marketing at CapitaLand. Earlier, he was
Singapore Tourism Board’s Assistant Chief Executive (Leisure).
Mr Lee has also worked with Sentosa Development Corporation
and the Ministry of Trade and Industry in Singapore.
Mr Lee holds a Bachelor of Science with distinction from
Cornell University, United States.
INTEGRATED DEVELOPMENTS
Wong Heang Fine CEO, CapitaLand ILEC Pte. Ltd.
Mr Wong Heang Fine is the CEO of CapitaLand ILEC
Pte. Ltd. He is also the Country CEO in charge of developing
CapitaLand’s business in the Gulf Cooperation Council region
and Kazakhstan.
Prior to this, Mr Wong was President and CEO of Sembcorp
Engineers and Constructors, the largest engineering and
construction company in Southeast Asia. He also has varied
experience in the leisure and entertainment industries.
Mr Wong holds a Master of Science in Engineering
Production & Management from the University of Birmingham,
United Kingdom and a Bachelor of Science in Mechanical
Engineering (First Class Honours) from the University of Leeds,
United Kingdom.
Council of CEOs
27
Corporate Office
Standing, left to right
Low Sai Choy
Senior Vice President
Legal/Company Secretary
Rita Lau
Senior Vice President
Corporate Planning
Hubert Ladstatter
Senior Vice President
Risk Management
Basskaran Nair
Senior Vice President
Corporate Marketing & Communications
Lai Choon Hung
Deputy Chief Corporate Offi cer
Liew Mun Leong
President & CEO
Harold Woo
Senior Vice President
Investor Relations
Kee Teck Koon
Chief Investment Offi cer
Olivier Lim
Group Chief Financial Offi cer
Leong Soon Peng
Senior Vice President
Information Technology
Tan Seng Chai
Senior Vice President
Human Resource
Belinda Gan
Group Financial Controller
Not in picture
(in alphabetical order according to family name)
Boaz Boon
Senior Vice President
Research
Monica Chia
Senior Vice President
Internal Audit
Anna Choo
Senior Vice President
Treasury
Chye Moi June
Head
Group Tax
Ee Chee Hong
Managing Director
Strategic Corporate Development
Leow Siew Beng
Senior Vice President
Human Resource
(Organisational Development)
Lim Soo Gee
Vice President
Security Management
Ng Kok Siong
Senior Vice President
Strategic Finance
Lynda Wee
Senior Vice President & Principal
CapitaLand Institute of Management
and Business
28
Corporate Governance Report for the period from 1 January 2008 to 31 December 2008
CapitaLand observes high standards
of corporate conduct in line with the
Principles of the Code of Corporate
Governance 2005 (the “Code”). We
believe that each company needs to
develop and maintain sound and
transparent policies and practices to meet
its specifi c business needs and to provide
a solid foundation for a trusted and
respected business enterprise. We remain
focused on the substance and spirit of the
Principles of the Code while achieving
operational excellence and delivering the
Group’s long-term strategic objectives.
This Report on our corporate
governance practices for fi nancial year
2008 (“Report”) describes our application
of good governance principles in building
a company committed to integrity,
excellence and its people. The application
is underpinned by sound systems of
internal controls and accountability, which
helps to promote and drive long-term
sustainable growth and shareholder value.
The following sections covering
each of the Principles outline our policies
and practices.
(A) BOARD MATTERS
Principle 1: Board’s Conduct of Affairs
CapitaLand is led by an effective Board
comprising a majority of non-executive
directors independent of Management.
Each director brings to the Board his
skills, experience, insights and sound
judgment, which together with strategic
networking relationships, serves to further
the interests of the Group. At all times, the
directors are collectively and individually
obliged to act in good faith and consider
the best interests of the Company.
The key roles of our Board are to:
• Guide the corporate strategy and
directions of the Group;
• Ensure that Senior Management
discharges business leadership and
the highest quality of management
skills with integrity and enterprise; and
• Oversee the proper conduct of the
Group’s business.
As at 31 December 2008, the Board
comprised 11 directors, of whom 10
were non-executive directors. With the
resignation of Mr Hsuan Owyang on
1 January 2009, the Board currently
comprises 10 directors, of whom nine
are non-executive directors. They are
business leaders and professionals with
governmental, fi nancial, banking, tax,
trading, real estate, transport and legal
backgrounds. Profi les of the directors are
found on page 16 of this Report.
To maintain effective supervision and
accountability at each of the Board and
Management levels, the positions of
Chairman and Chief Executive Offi cer
(“CEO”) are held by two persons.
The Chairman is Dr Hu Tsu Tau who
brings with him a wealth of experience
both in the Singapore Government (as a
former Cabinet Minister) and in a major
global company (as previous Chairman
and Chief Executive of the Shell Group
of companies in Singapore). The sole
executive director is Mr Liew Mun Leong,
who is also the President and CEO.
The Board meets regularly to review
the key activities and business strategies
of the Group, at least once every quarter,
and as required by business imperatives.
The Board deliberates strategic policies
of the Group, including signifi cant
acquisitions and divestments, approving
the annual budget, reviewing the
performance of the Group’s businesses,
and approving the release of the
quarterly and full-year results. The Audit
Committee is delegated the authority by
the Board to review such results. A total
of four Board meetings was held in 2008.
A table of the Board members’
participation in the various Board
committees is set out on page 35 of this
Report. This refl ects each Board member’s
additional responsibilities and special
focus in the respective Board committees.
A table showing the attendance record
of directors at Board meetings and Board
committee meetings during the year is set
out on page 36 of this Report. We believe
in the manifest contribution of our
directors beyond attendance at formal
Board and Board committee meetings.
CapitaLand’s directors who are all
professionals with diverse experience are
able to provide effective guidance on the
strategic direction of the Group’s
businesses. To judge a director’s
contribution based on his attendance at
formal meetings alone would not do
justice to his overall contribution, which
includes being accessible to Management
for guidance or exchange of views outside
the formal environment of Board meetings.
The Board has adopted a set of
internal controls which sets out approval
limits for capital expenditure, investments
and divestments, bank borrowings and
signature of cheques at Board level.
Approval sublimits are also provided at
Management levels to facilitate
operational effi ciency.
Changes to regulations and
accounting standards are monitored
closely by Management. Where regulatory
changes have an important bearing on
the Company’s or directors’ disclosure
obligations, directors are briefed during
Board meetings or at specially-convened
sessions conducted by professionals.
Newly appointed directors are given
briefi ngs by Management on the business
activities of the Group and its strategic
directions. Upon appointment, each
director is briefed and provided with a
29
formal letter setting out the director’s
duties and obligations. Directors are also
briefed and provided with relevant
information on the Company’s policies
and procedures relating to corporate
conduct and governance including
disclosure of interests in securities,
prohibitions on dealings in the Company’s
securities, restrictions on disclosure of
price sensitive information and the
disclosure of interests relating to certain
property transactions.
Principle 2: Board Composition and Guidance
As at 31 December 2008, the Board
comprised 11 directors, with 10
non-executive directors independent of
Management. Of the 10 non-executive
directors, nine were independent of the
substantial shareholder. With the
resignation of Mr Hsuan Owyang on
1 January 2009, the Board currently
comprises 10 directors, with nine
non-executive directors independent
of Management and the substantial
shareholder.
This composition of the Board
enables Management to benefi t from
their external, diverse and objective
perspective on issues brought before
the Board. It also enables the Board to
interact and work with Management
through a robust exchange of ideas and
views to help shape the strategic
process. This, together with a clear
separation of the role of the Chairman
and the CEO, provides a healthy
professional relationship between the
Board and Management with clarity of
roles and facilitates robust deliberation
on the business activities of the Group.
The Board has established a
Nominating Committee (“NC”) which
makes recommendations to the Board on
all Board appointments and determines a
director’s independence. Professor
Kenneth Stuart Courtis received payment
of an amount of US$68,000 in fi nancial
year 2008 for services rendered to the
Company as Economics Adviser and
for his position as a Member of the
Company’s International Advisory Panel.
The NC considers Professor Courtis as an
independent director notwithstanding his
relationship with the Company in respect
of Guidance Note 2.1(c) of the Code as
the amount is not signifi cant and he is
able to exercise strong independent
judgement in his deliberations in the
interests of the Company.
The Board is supported by Board
committees to provide independent
supervision of Management. Besides the
NC, the other Board committees are the
Audit Committee (“AC”), Executive
Resource and Compensation Committee
(“ERCC”), Finance and Budget Committee
(“FBC”), Investment Committee (“IC”),
Corporate Disclosure Committee (“CDC”)
and Risk Committee (“RC”). The AC,
ERCC and RC are made up of
independent or non-executive directors.
Other Board committees may be formed
as dictated by business imperatives.
Membership of the various
committees is carefully managed to
ensure an equitable distribution of
responsibility among Board members,
to maximise the effectiveness of the
Board and foster active participation
and contribution from Board members.
Diversity of experience and appropriate
skills are considered. The Company has
also taken steps to ensure that there are
appropriate checks and balances
between the different Board committees.
Hence, membership of the FBC and IC
with more involvement in key businesses
or executive decisions, and membership
of the AC with its supervisory role, are
mutually exclusive.
Principle 3: Chairman and Chief Executive Offi cer
The roles and responsibilities between
the Chairman and the President and CEO
are held by separate individuals. The
non-executive Chairman, Dr Hu Tsu Tau,
is responsible for the Board and acts
independently in the best interests of the
Company and shareholders, while the
President and CEO, Mr Liew Mun Leong,
is responsible for the running of the
Group’s businesses.
The Chairman ensures that the
members of the Board and Management
work together with integrity, competency
and moral authority, and that the Board
constructively engages Management on
strategy, business operations, enterprise
risk and other plans.
The President and CEO is a Board
member and has full executive
responsibilities over the business
directions and operational decisions of
the Group. The President and CEO, in
consultation with the Chairman,
schedules Board meetings and fi nalises
the preparation of the Board meeting
agenda. He ensures the quality and
timeliness of the fl ow of information
between Management and the Board.
He is also responsible for ensuring that
the Company complies with corporate
governance guidelines.
Principle 4: Board Membership Board renewal is a continual process,
for good governance and to maintain
relevance to the changing needs of the
Group’s businesses. The President and
CEO, as a Board member, is also subject
to retirement and re-election by
shareholders as part of Board renewal.
Election of Board members is the
prerogative and right of shareholders.
The NC comprises Mr Lim Chin Beng
as the Chairman, Mr Hsuan Owyang (up
30
Corporate Governance Report for the period from 1 January 2008 to 31 December 2008
to 31 December 2008), Mr Liew Mun
Leong, Mr Peter Seah Lim Huat and
Mrs Arfat Selvam.
The majority of the NC members,
including the Chairman, are independent
non-executive directors.
The NC ensures that the Board and
Board committees in the Group comprise
individuals who are best able to
discharge their responsibilities as
directors having regard to the law and
the highest standards of corporate
governance. In performing its role, the
NC is guided by its Terms of Reference
which sets out its responsibilities. In
particular, the NC reviews and
recommends:
• Candidates to be CapitaLand’s
nominees on the Board and Board
committees of listed companies within
the Group; and
• Candidates to the Board and Board
committees of holding companies of
the strategic business units (“SBU”).
The NC sources for candidates who
would be able to value add to
Management through their contributions
in the relevant strategic business areas
and in the constitution of strong and
diverse boards.
The Company’s Articles of Association
require one-third of its directors to retire
and subject themselves to re-election
(“one-third rotation rule”) by shareholders
at every Annual General Meeting (“AGM”).
In other words, no director stays in offi ce
for more than three years without being
re-elected by shareholders.
The President and CEO, as a Board
member, is also subject to the one-third
rotation rule. This separates his role as
President and CEO from his position as a
Board member, and enables
shareholders to exercise their right to
select all Board members.
In addition, a newly-appointed
director will submit himself for retirement
and re-election at the AGM immediately
following his appointment. Thereafter, he
is subject to the one-third rotation rule.
Directors who are above the age of
70 are also statutorily required to seek
re-appointment at each AGM.
Principle 5: Board Performance We believe that Board performance
is ultimately refl ected in the long-term
performance of the Group.
The fi nancial indicators, set out in
the Code as guides for the evaluation
of the Board and its directors, are in our
opinion more of a measurement of
Management’s performance and
therefore less applicable to directors.
In any case, such fi nancial indicators
provide a snapshot of a company’s
performance, and do not fully measure
the sustainable long-term wealth and
value creation of the Company.
A more important consideration is
that the Board, through the NC, had
ensured from the outset the requisite
blend of background, experience and
knowledge in technology, business,
fi nance and management skills critical to
the Group’s businesses. It has from the
outset ensured that each director with
his special contribution brings to the
Board an independent and objective
perspective to enable balanced and
well-considered decisions to be made.
Reviews of Board performance as
appropriate are informal. Renewal or
replacement of Board members do not
necessarily refl ect their contributions to
date, but may be driven by the need to
position and shape the Board in line with
the medium term needs of the Company
and its business.
Principle 6: Access to Information We believe that the Board should be
provided with timely and complete
information prior to Board meetings, and
as and when the need arises. New Board
members are fully briefed on the
businesses of the Group.
Management provides adequate and
timely information to the Board on Board
affairs and issues requiring the Board’s
decision. It also provides ongoing
reports relating to operational and
fi nancial performance of the Company,
such as monthly management fi nancial
reports. The Articles of Association of
the Company provide for directors to
convene meetings by teleconferencing
or videoconferencing. Where a physical
Board meeting is not possible, timely
communication with members of the
Board is effected through electronic
means which include electronic mail,
teleconferencing and videoconferencing.
Alternatively, Management will brief
directors in advance before seeking
the Board’s approval.
The Board has access to Senior
Management and the Company
Secretary at all times. The Company
Secretary attends to corporate
secretarial administration matters and
is the corporate governance advisor on
corporate matters to the board directors
and Senior Management. The Company
Secretary attends Board meetings. The
Board also has access to independent
professional advice where appropriate.
Board meetings for each year are
scheduled in advance in the preceding
year to facilitate directors’ individual
administrative arrangements in respect
of competing commitments.
The AC must also meet the external
and internal auditors separately at least
once a year, without the presence of
the President and CEO and the Senior
31
Management, in order to have unfettered
access to information that it may require.
(B) REMUNERATION MATTERS
Principle 7: Procedures for Developing Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure on Remuneration
We believe that a framework of
remuneration for the Board and key
executives should not be taken in
isolation. It should be linked to the
development of management bench
strength and key executives to ensure
continual development of talent and
renewal of strong and sound leadership
for the continued success of the
business and the Company. CapitaLand’s
ERCC plays a crucial role in helping to
ensure that we are able to recruit and
retain the best talents to drive the
Group’s businesses forward.
The ERCC members comprise Mr Lim
Chin Beng as the Chairman, Mr Hsuan
Owyang (up to 31 December 2008) and
Mr Peter Seah Lim Huat.
All the members of the ERCC are
non-executive directors; the majority
of whom, including the Chairman, are
independent. Outside members may be
co-opted into the ERCC to provide a
global perspective of talent management
and remuneration practices.
The ERCC oversees executive
compensation and development in the
Company. The ERCC is guided by its
Terms of Reference. Specifi cally, the
ERCC will:
• Approve the remuneration framework
for non-executive directors;
• Establish compensation policies for
key executives;
• Approve salary reviews, bonus and
incentives for key executives;
• Approve share incentives and share
ownership for executives;
• Approve key appointments and review
succession plans for key positions; and
• Oversee the development of key
executives and younger talented
executives.
The aim of the ERCC is to build
capable and committed management
teams, through competitive
compensation, focused management,
and progressive policies which can
attract, motivate and retain a pool of
talented executives to meet the current
and future growth of the Company.
The ERCC conducts, on an annual
basis, a succession planning review of
the President and CEO and selected key
positions in the Company. Potential internal
and external candidates for succession
are reviewed in the light of immediate,
medium term and longer term needs.
The ERCC has access to expert
professional advice on human resource
matters whenever there is a need to
consult externally. In its deliberations,
the ERCC takes into consideration
industry practices and norms in
compensation. The President and CEO
is not present during the discussions
relating to his own compensation and
terms and conditions of service, and
the review of his performance. The
President and CEO will be in attendance
when the ERCC discusses policies and
compensation of his senior team and
key staff, as well as major compensation
and incentive policies such as the
performance share plan and restricted
stock plan framework for bonus, staff
salary and other incentive schemes. Four
meetings of the ERCC were held in 2008.
The President and CEO as executive
director does not receive director’s fees.
He is the lead member of Management.
His compensation consists of his salary,
allowances, bonuses and share awards.
The latter is conditional upon him meeting
certain performance targets. The details
of his compensation package are found
in the Other Information section of this
Report (“Other Information”).
Non-executive directors have
remuneration packages consisting of
directors’ fees, attendance fees and
share awards pursuant to the Company’s
Restricted Stock Plan. The directors’ fee
policy is based on a scale of fees divided
into basic retainer fees as director and
additional fees for attendance and
serving on Board committees. Details of
the breakdown are found in the Other
Information. Directors’ fees for
non-executive directors are subject to
the approval of shareholders at the AGM.
The basis of allocation of the number
of share awards takes into account a
director’s additional responsibilities at
Board committees.
We have shown a Group-wide
cross-section of executives’
remuneration by number of employees
from S$500,000 upwards in bands of
S$250,000 in the Other Information,
in lieu of naming the top fi ve key
executives who are not also directors
of the Company. This gives a macro
perspective of the remuneration pattern
in the Group, while maintaining
confi dentiality of staff remuneration
matters. In view of the numbers involved,
it is not practicable to give a breakdown
of each individual’s remuneration.
A signifi cant proportion of executives’
remuneration is linked to company and
32
Corporate Governance Report for the period from 1 January 2008 to 31 December 2008
individual performance in the form of
share based and Economic Value Added
based compensation.
A separate Remuneration Report is
not prepared as most of the information
is found in the Other Information.
Details of the employee share
schemes are given in the Directors’
Report on page 114.
(C) ACCOUNTABILITY AND AUDIT
Principle 10: Accountability CapitaLand believes in conducting
itself in ways that deliver maximum
sustainable value to our shareholders.
CapitaLand promotes best practices as
a means to build an excellent business
for our shareholders and is accountable
to shareholders for its performance.
At CapitaLand, the separation of the
roles of the Chairman and the President
and CEO, and the holding of such
appointments by separate individuals,
ensures effective supervision of
Management and maintenance of
accountability of the Board to the
shareholders, and of Management to
the Board.
Prompt fulfi lment of statutory
reporting requirements is but one way
to maintain shareholders’ confi dence
and trust in the capability and integrity
of the Company.
CapitaLand was the fi rst listed real
estate group in Singapore to implement
quarterly reporting in the third quarter of
2001, before it became a requirement by
the Singapore Exchange Securities
Trading Limited (“SGX-ST”). This shows
CapitaLand’s corporate intent to
discharge its continuing obligation of
prompt and thorough disclosures as
practised by international standards, in
view of the global reach of its businesses
and shareholder base.
Principle 11: Audit Committee CapitaLand’s internal policy requires
the AC to have at least three members,
all of whom are non-executive and the
majority must be independent.
The AC consists of three directors.
Mr Richard Edward Hale, Chairman of the
AC, is an independent director. The other
members of the AC are independent
directors, Mr James Koh Cher Siang and
Mrs Arfat Selvam. The members bring
with them invaluable managerial and
professional expertise in the fi nancial,
tax and legal domains.
The AC is guided by Terms of
Reference which defi nes its scope of
authority. These Terms include review of
the annual audit plan, adequacy of the
internal audit process, results of audit
fi ndings and Management’s response,
adequacy and effectiveness of internal
controls, and also Interested Person
Transactions.
The AC reviews quarterly and
full-year results and the appointment
and re-appointment of auditors before
recommending them to the Board for
approval. The AC also approves the
compensation of the external auditors,
as well as considers the nature and
extent of non-audit services and their
potential impact on the independence
and objectivity of the external auditors.
The AC also reviews arrangements
by which employees of the Company
may, in confi dence, raise concerns
about possible improprieties in matters
of fi nancial reporting or other matters.
Pursuant to this, the AC has introduced
a Whistle Blowing Policy where staff may
raise improprieties to the AC Chairman
in good faith, with the confi dence that
employees making such reports will be
treated fairly and be protected from
reprisal. The AC confi rms that no reports
have been received under the Whistle
Blowing Policy thus far.
The AC meets with the external and
internal auditors, without the presence
of Management, at least once a year to
discuss the reasonableness of the
fi nancial reporting process, the system
of internal control, and the signifi cant
comments and recommendations by
the auditors.
A total of four AC meetings was held in
2008. The AC also held one meeting with
the external auditors and internal auditors,
without Management’s presence.
Principle 12: Internal Controls
Principle 13: Internal Audit CapitaLand believes that it has in
place a system of internal controls to
safeguard shareholders’ interests and
the Group’s assets, and also to manage
risks. Apart from the AC and RC, other
Board committees may be set up from
time to time to address specifi c issues
or risks.
The AC’s responsibilities in the
Group’s internal controls are
complemented by the work of the FBC,
which inter alia reviews the Group
Finance Manual and the Group’s annual
budget, and the RC, which oversees
various aspects of controls and risk
management of the Group. The activities
of these Board committees are set out on
page 34 of this Report. Based on the
review of these Board committees, the
Board, through the AC, is satisfi ed that
there are adequate internal controls in
place within the Group.
33
The Group has an Internal Audit
Department (“CL IA”) which reports
directly to the Chairman of the AC and
administratively to the Group Chief
Financial Offi cer (“Group CFO”). CL IA
plans its internal audit schedules in
consultation with, but independently of,
Management and its plan is submitted to
the AC for approval at the beginning of
each year. The AC must also meet with
CL IA at least once a year without the
presence of Management.
CL IA is a corporate member of the
Singapore branch of the Institute of
Internal Auditors Inc. (“IIA”), which has its
headquarters in the USA. CL IA
subscribes to, and is guided by, the
Standards for the Professional Practice of
Internal Auditing (“Standards”) developed
by the IIA and has incorporated these
Standards into its audit practices.
The Standards set by the IIA cover
requirements on:
• Independence;
• Professional Profi ciency;
• Scope of Work;
• Performance of Audit Work; and
• Management of the Internal Auditing
Department.
CL IA staff involved in Information
Technology (“IT”) audits are Certifi ed
Information System Auditors and
members of the Information System Audit
and Control Association (“ISACA”) in the
USA. The ISACA Information System
Auditing Standards provide guidance on
the standards and procedures to be
applied in IT audits.
To ensure that the internal audits are
performed by competent professionals,
CL IA recruits and employs suitably
qualifi ed staff. In order that their technical
knowledge remains current and relevant,
CL IA identifi es and provides training and
development opportunities to these staff.
(D) COMMUNICATION WITH SHAREHOLDERS
Principle 14: Communication with Shareholders
Principle 15: Greater Shareholder Participation
CapitaLand’s Investor Relations and
Corporate Communications Departments
facilitate effective communications with
the Company’s shareholders, analysts,
fund managers and the media.
CapitaLand’s results for the fi rst
three quarters and full year for fi nancial
year 2008 were all released on a timely
basis, within 35 days of the end of the
relevant quarter and 55 days of the end
of the full year.
CapitaLand continues to keep
stakeholders and analysts informed of
its corporate activities in Singapore and
around the world on a timely and
consistent basis. CapitaLand makes
disclosures on an immediate basis as
required under the Listing Manual of the
SGX-ST, or as soon as possible where
immediate disclosure is not practicable.
Regular briefi ngs and meetings for
analysts and the media are held, generally
coinciding with the release of the Group’s
second quarter and full-year results.
During these briefi ngs, Senior
Management reviews the Group’s most
recent performance and discusses the
Company’s outlook. In the interest of
transparency and broad dissemination,
these briefi ngs are webcast live and
accessible to the public on the Group’s
website at www.capitaland.com.
Materials used in the briefi ngs are also
disseminated via SGXNET. Recordings of
the briefi ngs are archived on the website.
In 2008, Senior Management
conducted over 777 meetings with
institutional investors. Management also
participated in investor conferences in
London, New York, Boston, Chicago, San
Francisco, Hong Kong, Beijing, Shanghai
besides Singapore. In addition,
CapitaLand pursues opportunities to
keep its retail shareholders informed
through the business media, website
postings and other publicity channels.
CapitaLand supports the Code’s
principle to encourage shareholder
participation. Shareholders receive the
summary fi nancial report and notice of
the AGM. Notice of the AGM is also
advertised in the press and issued via
SGXNET. At the AGM and reception
thereafter, shareholders have the
opportunity to communicate their views
and discuss with the Board and
Management matters affecting the
Company. The respective Chairpersons of
the AC, NC and ERCC, and the external
auditors, would usually be present at the
AGM. Voting in absentia and by email
may only be possible following careful
study to ensure that the integrity of the
information and authentication of the
identity of shareholders through the web
are not compromised and legislative
changes are effected to recognise
electronic voting.
CapitaLand was the winner of the
Most Transparent Company (Property
Category) in the Securities Investors
Association (Singapore) Investors’ Choice
Awards. In the same Awards, CapitaLand
also clinched Merit in the Singapore
Corporate Governance Award, which
recognises companies practising good
corporate governance. In addition,
34
Corporate Governance Report for the period from 1 January 2008 to 31 December 2008
CapitaLand was named “Best Company
in Singapore” by Hong Kong-based
fi nance magazine The Asset in its
Corporate Governance Awards 2008.
BOARD COMMITTEES In addition to the NC, ERCC and AC
described under Principles 4, 7 and 11,
the Board of CapitaLand has set up four
other Board committees as follows:
Investment Committee The IC is chaired by Dr Hu Tsu Tau
and comprises Mr Hsuan Owyang (up to
31 December 2008), Mr Liew Mun Leong,
Mr Jackson Peter Tai, Professor Kenneth
Stuart Courtis (appointed on 1 January
2009) and Mr Olivier Lim Tse Ghow, the
Group CFO. The IC approves the
CapitaLand Group’s investments and
divestments, participation in tenders and
bids and acceptance of credit facilities
from fi nancial institutions and banks.
Since 2000, the Board had approved
the delegation of some of its authority to
the various SBU Boards and
management committees within strict
limits. Apart from convening two formal
meetings of the IC in 2008, the views of
the IC and Board were actively sought by
the SBUs, and the approval of the IC
obtained where required.
Finance and Budget Committee The FBC is chaired by Mr Hsuan
Owyang (up to 31 December 2008),
Mr Peter Seah Lim Huat (appointed on
1 January 2009) and comprises Mr Liew
Mun Leong, Mr Jackson Peter Tai,
Professor Kenneth Stuart Courtis
(appointed on 1 January 2009) and
Mr Olivier Lim Tse Ghow, the Group CFO.
The FBC reviews the annual budget and
fi nancial policies of the CapitaLand Group.
In 2008, the FBC met three times to
review the fi nancial forecasts and the
annual fi nancial plan of the Group. Major
business events, initiatives, strategies
and areas of concern were also
discussed at the meetings. In addition,
the FBC reviews and approves updates
to the CapitaLand Group Finance Manual.
Risk Committee The RC was formed in September
2002 as part of CapitaLand’s efforts to
strengthen its risk management
processes and framework.
The RC comprises Mr James Koh
Cher Siang as the Chairman, with
Mr Richard Edward Hale and Mrs Arfat
Selvam as members. There were four
meetings of the RC held in 2008.
The RC’s role is to:
• Review the adequacy of CapitaLand’s
risk management process;
• Review and approve in broad terms,
the risk guidelines and limits. These
include country concentration limits
and risk-adjusted country hurdle rates
for the Group and the SBUs, which
are reviewed annually; and
• Review CapitaLand’s risk portfolio and
risk levels, as assisted by the
CapitaLand Corporate Risk
Assessment Group, which scrutinises
the risk profi le of every major project
which is proposed and is responsible
for compiling the Group Quarterly Risk
Report. Included in the report is a
monitoring of the utilisation rates of
approved country and treasury limits
of the Group.
Corporate Disclosure Committee The CDC is chaired by Mr James Koh
Cher Siang and comprises Mr Liew Mun
Leong and Mrs Arfat Selvam.
The CDC reviews the promptness and
comprehensiveness of corporate
disclosure issues and announcements
made to the SGX-ST, and ensures the
adoption of good corporate governance
and best practices in terms of
transparency to shareholders and the
investing community. The views and
approvals of the CDC were sought
throughout the year on various
announcements and news releases
issued by the Company.
DEALINGS IN SECURITIES Taking into consideration the SGX-ST
Best Practices Guide, the Company has
issued guidelines to directors and
employees in the Group, prohibiting
dealings in the Company’s securities,
while in possession of material
unpublished price-sensitive information
and during two weeks before the release
of the Company’s results for the fi rst three
quarters and one month before the
release of the Company’s full year results.
Directors and employees are also
prohibited from dealing in securities of
other listed companies in the Group while
in possession of unpublished price-
sensitive information by virtue of their
status as directors and/or employees.
They are also made aware of the
applicability of the insider trading laws
at all times.
35
COMPOSITION OF BOARD AND BOARD COMMITTEES
Executive Resource and Finance Corporate Audit Investment Compensation Nominating and Budget Disclosure Risk Board Members Committee Committee Committee Committee Committee Committee Committee
Dr Hu Tsu Tau C
Hsuan Owyang1 DC M M C
Peter Seah Lim Huat 2 M M C
Liew Mun Leong M M M M
Lim Chin Beng C C
Jackson Peter Tai M M
Richard Edward Hale C M
Dr Victor Fung Kwok King
James Koh Cher Siang M C C
Arfat Pannir Selvam M M M M
Professor Kenneth M M Stuart Courtis3
Non-Board Member
Olivier Lim Tse Ghow M M
Denotes: C – Chairman DC – Deputy Chairman M – Member
Notes: 1 Resigned as Deputy Chairman and Director of the Company, Chairman of Finance and Budget Committee, Deputy Chairman of Investment Committee and Member of
Executive Resource and Compensation Committee and Nominating Committee on 1 January 2009. 2 Appointed as Deputy Chairman of the Company and Chairman of Finance and Budget Committee on 1 January 2009. 3 Appointed as Member of Finance and Budget Committee and Investment Committee on 1 January 2009.
36
Corporate Governance Report for the period from 1 January 2008 to 31 December 2008
ATTENDANCE RECORD OF BOARD AND BOARD COMMITTEE MEETINGS
Executive Resource and Finance Audit Investment Compensation and Budget Risk Board Committee Committee Committee Committee Committee
No. of Meetings Held 4 4 2 4 3 4
Board Members
Dr Hu Tsu Tau 4 2
Peter Seah Lim Huat 4 4
Liew Mun Leong 4 2 3
Lim Chin Beng 3 4
Jackson Peter Tai 3 2 3
Richard Edward Hale 4 4 4
Dr Victor Fung Kwok King 1
James Koh Cher Siang 4 4 4
Arfat Pannir Selvam 4 4 4
Professor Kenneth Stuart Courtis 4
Hsuan Owyang 4 2 4 3 (resigned as Deputy Chairman and Director on 1 January 2009)
Professor Robert Henry Edelstein 1 (resigned as Director on 29 April 2008)
Non-Board Member
Olivier Lim Tse Ghow 2 3
37
HOSPITALITY
FINANCIAL SERVICES
Financial Services
Serviced Residences
Retail
Australia
Commercial
China
Residential Singapore
Integrated Developments
REITs
17 Private Equity
Real Estate Funds
29.7%
59.3%
31.3%
47.0%
26.6%
9.4%
REAL ESTATE
97.9%
Group Businesses
The total market capitalisation of the 7* public listed entities in the Group, net of common holdings, is S$11.4 billion** as at 27 February 2009.
The Group manages more than S$45 billion of assets, including over S$25 billion in fi ve real estate investment trusts (REITs) and 17 private equity real estate funds.
Figures denote the effective interest of CapitaLand in these entities, held directly by CapitaLand and/or indirectly through its Group companies.
Listed Entities
* include listed entities managed by the Group
** adjusted for the rights issue
38
ENTERPRISE RISK MANAGEMENT IN CAPITALAND
Intensity of Risk Management Process
General Oversight
Detailed
Very Detailed
Strategic and
System Risks
Corporate Governance
and Compliance
Operational and Financial Risks
Risk Assessment and Management
CapitaLand has in place a
comprehensive risk management
framework which applies across the
entire Group.
A Risk Committee comprising three
non-executive independent board
directors supervises CapitaLand’s risk
management processes and framework.
The committee, which was established in
2002, currently comprises Mr James Koh
Cher Siang (Chairman), Mr Richard
Edward Hale and Mrs Arfat Pannir
Selvam. The Group’s President and CEO
Mr Liew Mun Leong and other senior
management regularly attend Risk
Committee meetings.
The Risk Committee is supported by
CapitaLand’s Risk Assessment Group
(RAG), an independent risk management
team which evaluates and measures a
spectrum of risks and keeps the Board
and management apprised of the
necessary risk profi les in respect of
activities in different countries.
Every quarter, RAG prepares and
presents to the Risk Committee a
comprehensive group-wide portfolio risk
report that measures and highlights
relevant risks and exposures vis-à-vis
the Group’s fi nancial risk capacity (as
determined by the Risk Committee) and
prevailing market conditions. One key
reporting tool used is a generic
Value-at-Risk (VaR) model, which is
adapted from the banking industry and
tailored for the real estate industry. This
measures the relative riskiness of the
Group’s exposures using a historical
simulation method.
Additionally, contingent obligations
of all forms are reviewed, re-priced and
highlighted quarterly using an up-to-date
contingent obligation risk registry. These
contingent obligations are objectively
priced using established risk pricing
models like Monte Carlo simulation,
Binominal Tree techniques and
independent expert opinions.
To effectively manage country transfer
risk and avoid concentration risk, RAG
establishes country limits based on a
multi-faceted and risk-adjusted
methodology based on the Group’s
investment strategy, sovereign risk ratings
by internationally-renowned rating
agencies and macroeconomic consensus
views from the Group’s in-house
Economic Unit.
RAG carries out an independent risk
evaluation of all individual investment
proposals above a stipulated investment
value threshold. RAG calculates the
risk-adjusted weighted average cost of
capital and target returns of individual
countries and business units according to
their respective risk profi les and uses
them as benchmarks for the projected
returns of individual investment proposals.
Where applicable, RAG provides
recommendations to improve the structure
of investment proposals in order to
mitigate the risks identifi ed and/or
optimise the risk-return profi le.
RAG gains a better understanding of local
markets and their risks through site visits
to several project sites (including
competitors’ projects) and meetings with
local business development teams and
consultants based in the different
countries that CapitaLand operates in.
The global fi nancial crisis has
reinforced the importance of
comprehensive risk management,
in particular, the management of key
risk factors such as liquidity risk and
counterparty credit risk. RAG has also
reviewed the risk-adjusted weighted
average cost of capital and adjusted this
to refl ect higher business risk and costs
of investments.
Going forward, CapitaLand will
continue to review and adjust its risk
management systems and methodologies
so as to manage risks proactively,
preserve capital and grow returns to
shareholders.
39
Stakeholder Communications
CapitaLand proactively keeps
stakeholders informed and updated of its
activities by communicating regularly with
shareholders, investors, analysts and the
media. This aims to raise their
understanding of the business,
strengthen the Group’s reputation and
maintain good media relations.
The Group communicates with local
and foreign institutional investors through
face-to-face meetings, teleconferences,
investor conferences, roadshows and site
visits. In 2008, CapitaLand met with
about 800 investors globally and
participated in 15 investor conferences
and roadshows in Singapore, Beijing,
Hong Kong, Shanghai, London and New
York. Analysts and existing/potential
investors also gained a better
understanding of the Group’s
multi-geography, multi-sector portfolio
through site visits in various countries.
CapitaLand engages the media and
the investment community through
briefi ngs, press releases, familiarisation
trips and management interviews. At the
half-year and full-year fi nancial results
briefi ngs, top management briefed the
media and analysts on the Group’s
performance. These briefi ngs were also
webcast live on the corporate website
www.capitaland.com to reach a global
audience.
In 2008, CapitaLand invited key
media from Foshan and Guangzhou in
China, and Kuala Lumpur in Malaysia, to
visit its Singapore projects and gain
insight into the Group’s operations.
CapitaLand also invited the media and
analysts to witness key events in
Singapore and overseas, such as the
inauguration ceremony of Raffl es City
Beijing in China.
The Group regularly engages the
media in Australia, China, the Gulf
Cooperation Council (GCC) region,
Malaysia, Singapore, Thailand and
Vietnam. For example, CapitaLand met
with key GCC media in Abu Dhabi and
Dubai to launch the Arzanah masterplan
and the sale of Raffl es City Bahrain
apartments respectively. Ascott also
met the media during property openings
in China and Thailand.
Key Singapore and international
media have interviewed top management
on a range of issues, such as managing
during the global downturn, investment
strategy and talent management.
In line with good corporate
governance and disclosure best practice
standards, all announcements are
uploaded on CapitaLand’s corporate
website and the Singapore Exchange
website. The Group’s stakeholder
communications efforts have been
recognised by corporate governance
awards from the investment community.
CapitaLand won the Securities
Investors Association (Singapore)
“Most Transparent Company (Property)”
award for the eighth consecutive year
and was named “Best Company in
Singapore” by fi nance magazine The
Asset in its 2008 corporate governance
rankings. The Group was also one of
three fi nalists for the “Grand Prix for
Overall Investor Relations among
Large-cap Companies” award at the 2008
IR Magazine South East Asia Awards.
In 2008, CapitaLand launched a more
user-friendly corporate website and
added search engines and interactive
Web 2.0 social media tools such as
vodcasts. Visitors can keep up-to-date
with latest announcements through
Really Simple Syndication (RSS) feeds
and email alerts.
2008 INVESTOR RELATIONS CALENDAR
1st Quarter
• FY2007 fi nancial results briefi ng to media and analysts and live webcast
• Release of 2007 Annual Report • UBS Greater China Conference (China) • Deutsche Access China Conference
(China) • Macquarie non-deal roadshow (UK
and US)
3rd Quarter
• DBS Vickers Pulse of Asia (Singapore) • Morgan Stanley 2nd Regional Property
Corporate Day (Singapore) • 1H2008 fi nancial results briefi ng to media
and analysts and live webcast • Goldman Sachs non-deal roadshow (HK) • BNP Paribas ASEAN Corporate Day
(Singapore) • UBS Property Day (HK) • CLSA Investors’ Forum (HK)
2nd Quarter
• Annual General Meeting • Credit Suisse Asian Investment
Conference (HK) • Release of 1Q2008 fi nancial results • Merrill Lynch Asia Rising Stars
Conference (Singapore) • CLSA Corporate Access Forum
(Singapore) • Daiwa Real Estate Conference
(Singapore)
4th Quarter
• Macquarie International Real Estate Conference (UK and US)
• Hosted site visits to China for analysts • Release of 3Q2008 fi nancial results • Morgan Stanley Asia Pacifi c Summit
(Singapore)
40
Corporate Social Responsibility
CapitaLand is committed to be a
good corporate citizen. The Group’s
corporate social responsibility efforts
focus on the environment, philanthropy
and the community.
Environment CapitaLand believes in building for
the future by protecting the environment
for future generations.
In recognition of its strong and
effective commitment to the environment,
CapitaLand was awarded the prestigious
Singapore Environmental Achievement
Award 2007/08 by the Singapore
Environment Council at the Singapore
Green Summit. The Group was the only
Top Achiever of the award in 2008. In
addition, Raffl es City Chengdu, an
integrated development under
construction in China, has obtained Gold
Level Leadership in Energy and
Environmental Design Core & Shell
(LEED-CS) Precertifi cation from the U.S.
Green Building Council, a rating agency
for sustainable building design and
construction.
In 2008, CapitaLand extended ISO
14000 certifi cation for its Environmental
Management System (EMS) to the
Group’s operations overseas. The EMS
was fi rst established in Singapore and
ensures that environmental practices are
implemented consistently across the
Group for the development and
management of properties. ISO 14000
certifi cation was obtained for Singapore
in 2007, and for China and Vietnam in
2008. This makes the certifi cation one
of the most comprehensive for any
Singapore real estate company.
CapitaLand uses an Environmental
Tracking System (ETS) to monitor the
electricity and water usage, and waste
generation of over 150 CapitaLand
properties worldwide. In 2008, the Group
reduced electricity and water
consumption in Singapore by 4.3% and
6.6% respectively (after adjustments for
human traffi c and occupancy rates),
exceeding the EMS targets of a 2%
reduction compared to 2007. This is
equivalent to avoiding about S$1.9 million
in utility costs based on end-2008 utility
rates. The electricity saved can power
15,800 fi ve-room Housing and
Development Board fl ats for one month,
CapitaLand’s corporate social responsibility initiative: Staff volunteers and CapitaFrog visited primary schools as part of the Green For Hope roadshows.
41
while the water saved can fi ll 41
Olympic-sized swimming pools. The
Group also reduced paper consumption
in its Singapore offi ces by 22% (after
adjustments for headcounts).
In 2008, CapitaLand launched a series
of green initiatives under the Building a
Greener Future programme to encourage
tenants, shoppers, residents and the
public to play a role in protecting the
environment. CapitaLand distributed
reusable shopping bags at its malls and
placed customised recycling bins in its
malls, offi ces and serviced residences.
The Group also launched CapitaFrog,
a specially-designed mascot, to reinforce
the green message.
The Group actively involved children
in its environmental education efforts.
One key initiative launched in 2008 was
the Green for Hope project, which
encourages primary school children to
help their less fortunate peers through
recycling. CapitaLand Hope Foundation
will donate S$2 to the respective schools’
welfare funds for every kilogramme of
recyclable waste collected.
CapitaLand’s efforts to engage the
community extend to its operations
overseas. In China, CapitaLand held its
annual Building for Tomorrow campaign,
a series of green and philanthropic
initiatives targeted at the Chinese public.
The Group organised the CapitaLand
Green Hope School Design Competition,
tapping on the talents of architectural
students from top Chinese universities to
design the CapitaLand Muchuan Green
Hope School in Sichuan Province. The
school, which caters to underprivileged
children, will be the fi rst green Hope
School in China. CapitaLand staff also
held roadshows and exhibitions in
universities in Beijing, Shanghai,
Guangzhou, Tianjin, Hangzhou and
Ningbo to promote environmentally-
friendly practices to the Chinese public.
In recognition of its corporate social
responsibility efforts in China,
CapitaLand was conferred “Outstanding
Corporate Citizen of China”, a coveted
award given by the China Committee of
Corporate Citizenship (part of the
Ministry of Civil Affairs) and China Central
Television (CCTV).
Philanthropy Established in 2005, CapitaLand
Hope Foundation (CHF), the Group’s
philanthropic arm, is one of the fi rst
foundations created by a Singapore real
estate company. CapitaLand commits up
to 0.5% of its net profi t to the foundation
every year to support programmes for the
education, healthcare and shelter needs
of underprivileged children.
CHF’s benefi ciaries include The
Straits Times School Pocket Money
Fund, Life Community Services Society
(Friends of Children programme), Yellow
Ribbon Fund (Programmes for Children
of Ex-offenders), Singapore Children’s
Society and Child at Street 11, among
others. It supports over 800 children in
Singapore, Thailand and Vietnam through
the CapitaLand Kids Programme, which
provides direct fi nancial support for
needy children.
In China, CHF made a donation to
help children affected by the May 2008
earthquake in Sichuan Province. The bulk
of the donation will go towards building
fi ve CapitaLand Hope Schools in Sichuan
Province over the next two to three years.
This will bring the total number of
CapitaLand Hope Schools in the country
to nine. In addition, CapitaLand also built
a temporary classroom block in Sichuan
Province to provide for the immediate
education needs of affected children.
CapitaLand also organises
group-wide voluntary projects to engage
staff. PEEK (Providing Educational
Exposure for Kids), a voluntary
programme for children of CapitaLand
staff and underprivileged children
supported by CapitaLand Hope
Foundation, was launched in 2007.
PEEK was held at One George Street,
Somerset Bencoolen, Bugis Junction,
and Ascott Singapore Raffl es Place in
Singapore in 2008, with staff volunteers
teaching children about the features of
CapitaLand properties through a fun and
informal educational platform. For the
fi rst time, PEEK was extended to
CapitaLand’s China properties during the
year – Xizhimen Mall in Beijing, Guicheng
Mall in Nanhai and Raffl es City Shanghai
in Shanghai.
During the year, CHF organised 12
volunteer expeditions to China, Indonesia,
Thailand and Vietnam, reaching out to
underprivileged children through building
homes, improving their living and
educational facilities or engaging them in
educational activities.
Community CapitaLand believes in promoting an
understanding of the cultures between its
home base of Singapore and overseas
communities. It was one of the major
sponsors for Spotlight Singapore in
Moscow, a cultural-business
extravaganza organised by The Arts
House of Singapore in collaboration with
the Singapore Embassy in Moscow.
CapitaLand was also the main sponsor
of “A Tale of Shaolin”, a martial arts
dance pantomime held at the Esplanade
Theatre in Singapore.
42
Human Resource
CapitaLand’s credo is “Building people
to build for people”. It adopts an integrated
human capital strategy to recruit, develop
and motivate employees. The Group offers
a comprehensive talent management
strategy, competitive total compensation
packages and a positive work environment.
Talent Management CapitaLand identifi es talents both
internally and externally to build its talent
pipeline and bench strength for succession
planning. A deliberate effort is made to
recruit people at different points in their
careers, including undergraduates, fresh
graduates, young and mid-career
professionals as well as industry veterans.
CapitaLand recruits global talents
through its network with Singapore and
overseas universities. It also develops
future leaders through scholarship
programmes such as the CapitaLand–BCA
Scholarship and CapitaLand International
Scholarship. As a multinational company,
the Group implements human resource
management programmes and deploys
resources across countries and business
units. CapitaLand enables talent
cross-fertilisation by posting Singaporean
employees to countries such as China and
Vietnam and vice versa.
To reach out to the wider business
community, CapitaLand’s management
communicates with global talents during
leadership forums and discussion panels.
In 2008, Group President & CEO Liew
Mun Leong addressed over 600 business
and human resource leaders at the
inaugural Singapore Human Capital
Summit, a premier people management
and leadership conference.
CapitaLand leverages on in-house
training institutes to train and develop
employees. The CapitaLand Institute of
Management and Business (CLIMB) has
made signifi cant progress, training over
2,600 employees from various countries
since its launch in 2006. In 2008, Ascott
Centre for Excellence (ACE), Ascott’s
global hospitality training centre in
Singapore, was offi cially opened. CLIMB
and ACE demonstrate CapitaLand’s
commitment to staff development and
continuous learning.
The ICE (Innovation, Creativity,
Entrepreneurship) programme was
created in 2006 to tap on the innovative
spirit, creative energies and enterprising
mindsets of all employees. To date, 550
employees from Australia, China, Japan,
Malaysia, Philippines, Singapore and
Thailand have shared ideas at 17 ICE
camps in seven cities. Some ideas on
green initiatives and product design have
been implemented.
Competitive Compensation and Benefi ts
CapitaLand motivates and rewards
employees with comprehensive and
competitive compensation and benefi ts
programmes. Incentives include
short-term cash bonuses and long-term
equity-based reward plans. The
performance-based Restricted Stock Plan
is an attractive long-term incentive to
employees and gives them a personal
stake in the company, contingent on
achieving performance targets. This better
aligns employee and shareholder interests
to deliver business results. Regular
benchmarking against different markets
and innovation in compensation strategies
ensure CapitaLand remains competitive
and continues to attract and retain talent.
Positive Work Environment A total employee well-being programme
promotes personal development, health
and work-life harmony. For example, a
fl exible benefi ts plan enables employees
to tailor benefi ts to their needs while
fl exible work arrangements are available
for those needing to better balance work
and family commitments. The Holiday
Accommodation Programme Provided for
You (HAPPY) offers employees subsidised
rates at Ascott’s serviced residences.
Regular talks on topics ranging from
retirement and fi nancial planning to eating
right are also held.
CapitaLand recognises that the
most important asset is people and
will continue to manage and develop
human capital.
Leadership development: CapitaLand President & CEO Liew Mun Leong shared with staff at RE100, a 100-hour in-house accelerated real estate course.
43
JANUARY CapitaLand, through Somerset Capital
Pte Ltd, a wholly-owned subsidiary,
launched a voluntary unconditional
cash offer for the remaining shares in
Ascott. The privatisation will strengthen
Ascott’s leadership position in the
market, maximise CapitaLand’s
competitive advantage and increase
cost savings.
CapitaLand entered into separate joint
ventures with Advance India Projects
Limited and the Prestige Group to invest,
develop and manage retail/predominantly
retail projects in India.
CapitaLand launched a 580-unit residential
development in Gongshu District, called
I-World, in Hangzhou, China.
CapitaLand launched Building for
Tomorrow, its annual corporate social
responsibility campaign in China.
Ascott expanded its presence in Australia
with Citadines Melbourne on Bourke, a
398-unit serviced residence in
Melbourne’s Central Business District,
and its fi rst Citadines-branded property
in the country.
FEBRUARY CapitaLand successfully divested its
entire 50% stake in Savu Investments
Pte. Ltd. which owns Hitachi Tower,
a Grade A offi ce building located in
Singapore’s prime Raffl es Place,
at an agreed value of S$811 million.
CapitaLand recorded a gain of
S$111.4 million from the sale.
CapitaLand signed a Statement of
Strategic Intent with local Vietnamese
partner, Nam Thang Long Investment
Joint-Stock Company, to seek further
real estate opportunities in Vietnam.
MARCH CapitaLand raised S$1.3 billion through
a 10-year convertible bond issue, the
largest 10-year convertible bond
transaction ever done in Singapore. The
bonds have a high conversion premium
of 46% and will bear a coupon rate of
3.125% per annum. The bond issue
extended CapitaLand’s debt maturity
profi le and will provide the Group ample
fi nancial capacity to take advantage of
future business opportunities.
Year in Brief
Singapore’s President S R Nathan witnessed the strategic alliance between CapitaLand and its Vietnamese partner.
44
Year in Brief
CapitaLand closed its voluntary
unconditional cash offer for Ascott. The
aggregate holding of Somerset Capital,
its wholly-owned subsidiary, and its
concert parties was 98.37% at the close
of the offer. Somerset Capital acquired
the remaining Ascott shares that it did
not own.
CapitaLand signed a conditional
agreement with Thien Duc Co., Ltd to
jointly develop a 6.7-hectare prime site
in District 2, Ho Chi Minh City. The
development will comprise approximately
950 apartments as well as commercial
and retail space. CapitaLand will take
a 60% stake in the proposed joint
venture while Thien Duc will hold the
remaining stake.
CapitaLand and SPRING Singapore
launched the inaugural SPRING-
CapitaLand Retail Overseas Mission to
China for Singapore’s small and medium
enterprise retailers to facilitate Singapore
retailers’ understanding of the retail market
in Shenzhen, Shanghai and Beijing.
APRIL CapitaLand made key organisational
changes to fl atten the Group’s
organisational structure so as to support
business growth. The new business units
are CapitaLand Residential Singapore
and CapitaLand China Holdings. In
addition, the CapitaLand Commercial
business unit now includes overseas
businesses in India, Vietnam, Malaysia
and Thailand.
Morganite Pte Ltd, a CapitaLand-led
consortium, secured S$1.996 billion
syndicated transferable secured fi nancing
facilities for the construction and
development of a new distinctive
high-rise condominium along Farrer Road
in Singapore. This was the largest
syndicated residential property
development loan ever arranged in
Singapore and involved 10 local and
international banks.
Mubadala Development Company and
CapitaLand launched Capitala, a joint
venture real estate company based in
Abu Dhabi, to focus on designing,
building, managing, operating and
maintaining mixed-use, predominantly
residential developments in the city.
CapitaLand partnered leading
Bahrain-based bank Arcapita to develop
its fi rst IT Park/Grade A offi ce complex on
an approximately 30-acre site in India’s
Navi Mumbai.
CapitaLand completed the compulsory
acquisition of Ascott, which was delisted
from the Singapore Exchange Securities
Trading Limited on 29 April 2008.
Ascott entered Ahmedabad in India with
the acquisition of a 40% stake in
Citadines Ahmedabad Parimal Garden.
The investment is a joint venture with
The Rattha Group.
MAY Ascott acquired Citadines London
Holborn-Covent Garden, a 192-unit
serviced residence in London’s High
Holborn. Ascott had already been leasing
and operating the property.
Capitala unveiled Arzanah, its fl agship
project in Abu Dhabi. Strategically
located on a 1.4 million square metre site
surrounding the Zayed Stadium, Arzanah
is a fully integrated development near Abu
Dhabi’s city centre. The integrated
development offers a unique blend of
quality residential properties with leisure,
sports and retail amenities that focuses on
promoting an active urban lifestyle for its
residents and the community.
CapitaLand made a donation through
CapitaLand Hope Foundation, its
philanthropic arm, to help children
affected by the earthquake in Sichuan
Province, China.
CapitaLand launched its Building a
Greener Future programme, a series of
green initiatives aimed at getting
stakeholders to play a role in protecting
the environment. Initiatives included
placing customised recycling bins in
CapitaLand malls, offi ces and Ascott
serviced residences, as well as the launch
of CapitaFrog, a mascot to create greater
awareness of the green message.
JUNE Central China Real Estate Limited (CCRE),
a Henan-based residential property group
and an indirect associated company of
CapitaLand, announced the completion
of its fully-subscribed global offering.
Post CCRE’s listing on the Hong Kong
Stock Exchange, CapitaLand’s effective
interest in CCRE stood at 27.11%.
CapitaLand was awarded the
prestigious Singapore Environmental
Achievement Award (SEAA) 2007/08 at
the Singapore Green Summit. The real
estate developer was the only Top
Achiever of the award in 2008.
Ascott opened four new serviced
residence properties in Australia, Qatar,
Thailand and Vietnam, adding to the two
which the company opened in China in
early 2008.
45
Ascott offi cially opened the Ascott
Centre for Excellence (ACE), its new
global hospitality training centre in
Singapore. Besides running Ascott’s
proprietary programmes, ACE is a
Continuing Education and Training
(CET) centre approved by Singapore
Workforce Development Agency to
specialise in training for the hotel and
accommodation services sector. These
programmes are open to the public.
CapitaLand and CITIC Trust, China’s
largest trust services company,
established the RMB500 million (about
S$98 million) CITIC CapitaLand Business
Park Fund, the fi rst RMB-denominated
real estate private equity fund in China.
CapitaLand acquired approximately
61.9% of the total retail strata area, or
510,418 square feet, as well as the car
parks of prime freehold Sungei Wang
Plaza in Kuala Lumpur, Malaysia.
JULY CapitaLand offi cially launched its Green
for Hope project in primary schools in
Singapore. The project encourages
primary school students to help their
less fortunate peers through recycling
as CapitaLand Hope Foundation will
donate to the schools’ welfare funds
based on the amount of recyclable
waste collected.
CapitaLand China launched The Pines,
a 157-unit condominium located in the
prime Chaoyang District in Beijing, China.
CapitaLand completed the sale of
One George Street, a Grade A offi ce
building located in the heart of
Singapore’s Central Business District,
to CapitaCommercial Trust for a total
consideration of S$1.165 billion, with a
fi ve-year yield protection of 4.25% per
annum on the purchase price.
CapitaLand established the US$1 billion
(about S$1.4 billion) Raffl es City China
Fund to invest in prime mixed-use
commercial properties in key gateway
cities in China. The fund is CapitaLand’s
fi rst integrated development private
equity fund for China and also the largest
fund the Group has originated and
managed to date. CapitaLand holds a
50% sponsor stake in the fund while
the remaining interests were taken up
by leading fi nancial institutions and
pension funds from Asia, Europe and
North America.
CapitaLand unveiled the design for its
new high-rise condominium along Farrer
Road in Singapore by Pritzker
Architecture Prize winner Zaha Hadid.
The prestigious development will refl ect
the internationally-renowned architect’s
signature style of fl owing lines and
sensuous architectural silhouettes.
Ascott Centre for Excellence, Singapore – Ascott’s new global hospitality training centre
46
CapitaLand started phase one sales for
The Wharf Residence, a 999-year
leasehold condominium in Singapore’s
River Valley Conservation Area. The
development features a seamless
integration of 173 contemporary
apartments and 13 townhouses with
conserved facades.
CapitaLand held preview sales for the
fi rst phase of Latitude, a 127-unit
freehold condominium in Singapore
on Jalan Mutiara, near Grange Road.
Australand announced a one-for-one
renounceable accelerated priority issue
of stapled securities to strengthen its
balance sheet, as well as to provide it
with the fi nancial fl exibility to fund future
development activities and take
advantage of selective growth
opportunities. CapitaLand subscribed for
its pro-rata entitlement of the issue.
CapitaLand successfully closed
CapitaLand China Development Fund II at
US$239.8 million (about S$327.0 million).
The fund will invest in residential real
estate development projects in China.
AUGUST Ascott’s fl agship development in
Singapore – Ascott Singapore Raffl es
Place – opened following a S$60.0 million
conservation and restoration effort.
Ascott transformed the national heritage
building into a premium 146-unit serviced
residence with impressive facilities and
modern comforts.
SEPTEMBER Ascott sold Somerset Orchard, an
88-unit serviced residence located at
Singapore’s prime shopping district, for
a cash consideration of S$100.0 million.
CapitaLand recognised a gross gain of
about S$43.0 million from the
transaction. After the divestment, Ascott
will continue to manage the property for
15 years, with an option to renew the
contract for another 10 years.
Australand completed its one-for-one
renounceable accelerated priority issue of
stapled securities, raising approximately
A$461 million (S$598 million). CapitaLand
paid a total subscription price of
A$302.0 million (about S$392.0 million)
and increased its interest in Australand
from 54.2% to approximately 59.3%.
Year in Brief
The Wharf Residence, Singapore
47
CapitaLand divested Hua Lei Holdings
Pte Ltd, which indirectly owns 100% of
Capital Tower Beijing, an offi ce building in
China, for S$505.0 million. The divestment
translated into a gain of S$187.0 million.
CapitaLand divested its Raffl es City-
branded integrated developments
portfolio in China to Raffl es City China
Fund for a total consideration of
approximately US$841 million
(S$1.1 billion) and a total portfolio gain
of S$313.0 million from the transaction.
The acquisition of Raffl es City Shanghai,
Raffl es City Beijing and Raffl es City
Chengdu by the fund was completed in
2008, while the acquisition of Raffl es City
Hangzhou is expected to be completed
by 2009.
Capitala launched the private sale of
residential units at Rihan Heights, the fi rst
phase of Arzanah. Rihan Heights
comprises 14 exclusive villas and fi ve
residential towers with over 800 beautiful
homes. Capitala also awarded the main
construction contract for Rihan Heights to
a joint venture between Sunway
Construction Sdn Bhd and Silver Coast
Construction & Boring Est.
CapitaLand and Rock Productions Pte Ltd
awarded the contract for the construction
of the Integrated Civic, Cultural, Retail
and Entertainment Hub at Vista Xchange,
one-north, to Hexacon Construction Pte
Ltd. CapitaLand owns and manages the
Integrated Hub’s Retail and Entertainment
Zone as well as approximately 900 car
park lots at the development. CapitaLand
will also project manage the entire
development which is expected to be
completed by 2012.
CapitaLand’s retail businesses made
management changes. Lim Beng Chee
was appointed CEO of CapitaLand Retail
Limited and CapitaMall Trust Management
Limited, while Wee Hui Kan was appointed
CEO of CapitaRetail China Trust
Management Limited.
CapitaLand launched La Capitale, a
high-end residential development of 313
units located in Dongcheng District, near
Beijing’s central business districts.
OCTOBER Ascott was awarded a contract by Raffl es
City Bahrain Fund to manage the 200-unit
Ascott Bahrain, its fi rst fl agship serviced
residence property in the Gulf Cooperation
Council (GCC) region to be operated
under the premier Ascott brand. Scheduled
to open in 2011, Ascott Bahrain will be
Ascott’s second serviced residence
property in Bahrain and its fourth in the
GCC region.
Ascott acquired Citadines Paris Louvre
for a cash consideration of €21.5 million (about S$45.5 million). Ascott had been
leasing and operating the 51-unit serviced
residence prior to the acquisition.
The property is a historical building in
Paris located opposite the Grande
Louvre Museum.
CapitaLand’s residential apartments in
Raffl es City Bahrain and Rihan Heights
received overwhelming demand with
about S$1 billion worth of sales achieved
since June 2008.
Ascott was awarded a contract to manage
Ascott Raffl es City Beijing, a 175-unit
premier serviced residence in Beijing
which is part of the Raffl es City Beijing
integrated development.
Ascott opened another three new
Citadines serviced residence properties
in Bangkok’s Sukhumvit Soi 8, 11 and
23, joining Ascott’s fi rst Citadines in
Bangkok at Soi 16.
CapitaLand and Rock Productions Pte
Ltd jointly hosted the offi cial
groundbreaking ceremony for the
Integrated Civic, Cultural, Retail and
Entertainment Hub at Vista Exchange,
one-north.
CapitaLand held the inauguration
ceremony for Raffl es City Beijing, an
integrated development in China
comprising prime retail and offi ce space
as well as Ascott Raffl es City Beijing. The
event was graced by Singapore’s
Minister Mentor Lee Kuan Yew.
CapitaLand held the groundbreaking
ceremony for Raffl es City Chengdu in
Sichuan Province. The ceremony was
offi ciated by Associate Professor Koo
Tsai Kee, Singapore’s Minister of State for
Defence, and Mr Wang Zhonglin, Vice
Mayor of Chengdu, China.
NOVEMBER CapitaLand sold its 50% stake in Beijing
Red Diamond Science & Technology
Development Co., Ltd, owner of the Red
Diamond Plaza offi ce building in
Beijing, for a cash consideration of
RMB62.3 million (about S$13.4 million)
to CITIC Trust as part of the CITIC
CapitaLand Business Park Fund.
Ascott entered into a conditional sale and
purchase agreement to divest its 70%
interest in Somerset West Lake, a 90-unit
serviced residence in Hanoi, Vietnam, to
Ascott Residence Trust.
48
DECEMBER CapitaLand divested Innov Tower
(formerly known as RND Tower), a
23-storey offi ce building in Shanghai’s
Caohejing High-Tech Park, to CITIC
CapitaLand Business Park Fund for a
cash consideration of RMB173.1 million
(about S$38.2 million).
CapitaLand sold its 33.4% stake in
Morimoto Asset Management Co., Ltd,
the manager of BLife REIT, for a cash
consideration of JPY200.4 million (about
S$3 million). CapitaLand’s interest in
BLife REIT, which is listed on the main
board of Tokyo Stock Exchange,
remained the same at 13%.
CapitaLand’s indirect wholly-owned
subsidiary (CapitaLand LF (Cayman)
Holdings Co., Ltd) and its indirect
associated company (CapitaLand AIF
Limited), together with a third party,
collectively subscribed for 730 new
preferred shares representing a 73%
stake in Peace Base Investments Limited.
Peace Base’s sole asset is a site slated
for mixed development in Shenzhen’s
Nanshan District, China. CapitaLand’s
effective stake in Peace Base is 58.3%.
Ascott brought its Citadines brand to
Indonesia as part of its plan to expand
Citadines in Asia Pacifi c. It secured a
contract to manage the 120-unit
Citadines Jakarta, its fi rst Citadines-
branded property in Indonesia, which
is slated to open in 2010.
CapitaLand announced the retirement of
Mr Hsuan Owyang from the Board and
as Deputy Chairman with effect from
1 January 2009. Mr Peter Seah was
appointed to replace Mr Owyang as
Deputy Chairman.
Year in Brief
Singapore’s Minister Mentor Lee Kuan Yew graced the inauguration ceremony of Raffl es City Beijing.
49
Awards & Accolades 2008
CORPORATE AWARDS
CapitaLand • Top Achiever
Singapore Environmental
Achievement Award (SEAA) 2007/08
Singapore Green Summit 2008
• Asia’s Best Executives of 2008,
Singapore (Liew Mun Leong)
Asia’s Best Executives Awards 2008
Asiamoney
• Best CEO in Asia (Property)
(Liew Mun Leong)
Asia’s Best CEOs 2008
Institutional Investor
• Best Managed Regional Company
(Real Estate Category) (1st)
Asia’s Best Companies Poll 2008
FinanceAsia
• Best CFO (Singapore Category) (2nd)
Asia’s Best Companies Poll 2008
FinanceAsia
• Best Managed Company (Singapore
Category) (6th)
Asia’s Best Companies Poll 2008
FinanceAsia
• Best Corporate Governance
(Singapore Category) (7th)
Asia’s Best Companies Poll 2008
FinanceAsia
• Merit
Singapore Corporate Governance
Award
SIAS Investors’ Choice Awards
Securities Investors Association
(Singapore)
• Most Transparent Company Award
(Property Category) (Winner)
SIAS Investors’ Choice Awards
Securities Investors Association
(Singapore)
• Best Company in Singapore
Triple A Corporate Governance
Awards 2008
The Asset
• Asia’s 200 Most-Admired Companies
(Singapore) (Long-Term Vision
Category) (3rd)
The Wall Street Journal (Asia)
• Asia’s 200 Most-Admired Companies
(Singapore) (Overall Category) (6th)
The Wall Street Journal (Asia)
• Top 10 Companies Ranked by Market,
Oceania (2nd)
The Singapore International 100
Ranking
International Enterprise Singapore
• Top 10 Companies Ranked by Market,
China (9th)
The Singapore International 100
Ranking
International Enterprise Singapore
• Highest by Overseas Revenue (17th)
The Singapore International 100
Ranking
International Enterprise Singapore
• 1st Runner-up (Overall Development
in Asia)
Euromoney Liquid Real Estate Awards
• Best Developer (Overall in Singapore)
Euromoney Liquid Real Estate Awards
• Best Investment Manager in Singapore
Euromoney Liquid Real Estate Awards
• Best Retail/Shopping Developer in
Singapore
Euromoney Liquid Real Estate Awards
• Best Retail/Shopping Developer in
China
Euromoney Liquid Real Estate Awards
• Best Mixed-Use Developer in Thailand
Euromoney Liquid Real Estate Awards
• Best Residential Developer in Vietnam
Euromoney Liquid Real Estate Awards
• Best Leisure/Hotel Developer in
Vietnam
Euromoney Liquid Real Estate Awards
CapitaLand China Holdings • Top 500 Real Estate Developers in
China 2008
China Real Estate Survey Center
• Outstanding Corporate Citizen of China
4th Chinese Corporate Citizen Selection
China Committee of Corporate
Citizenship and CCTV2
• 2007 Outstanding Foreign Invested
Company of Huangpu District
Huangpu Foreign Economic
Committee Shanghai
50
• Building for Tomorrow 2007 Campaign
- Honourable Mention, Corporate
Social Responsibility Campaign
of the Year
Asia Pacifi c PR Awards 2007
- Merit, Outstanding Overall
Corporate Reputation Campaign
(International)
PRISM Awards 2008
Institute of Public Relations of
Singapore
CapitaLand Commercial Management Pte Ltd • Singapore Service Class
SPRING Singapore
TCC Capital Land • World Quality Commitment Award
(Gold Category)
World Quality Commitment
Awards 2008
Business Initiative Directions
Ascott • Best Serviced Residence Brand
in China (1st) – Ascott The Residence
Business Traveller China Awards 2008
Business Traveller China
• Best Serviced Residence Brand in
China (3rd) – Citadines Apart’hotel
Business Traveller China Awards 2008
Business Traveller China
• Best Serviced Residence (Group)
in China
TravelWeekly China Industry
Awards 2008
TravelWeekly China
• Best Serviced Residence Operator
TTG Travel Awards 2008
TTG Asia Media
• Best Serviced Residence Company
(1st) – The Ascott Group
Business Traveller Awards 2008
Business Traveller UK
• Best Serviced Residence Company
(3rd) – Citadines Apart’hotel
Business Traveller Awards 2008
Business Traveller UK
• Best Serviced Residence Brand in
Asia Pacifi c – Ascott The Residence
Business Traveller Awards 2008
Business Traveller Asia Pacifi c
• Outstanding Website – Somerset
Serviced Residence
2008 WebAwards
Web Marketing Association
• Standard of Excellence – Ascott
The Residence
2008 WebAwards
Web Marketing Association
• Best Serviced Residence (Group)
TravelWeekly (Asia) Industry
Awards 2008
TravelWeekly (Asia)
• Guide Award for Excellent
Performance for 2007 & 2008
(Somerset Serviced Residence
Vietnam)
Vietnam Economic Times’
The Guide Magazine
• China’s Most Favourite Serviced
Residence Brand – Ascott International
5th Golden-Pillow Awards of
China Hotels
21st Century Business Herald and
Business Travel
• Best Serviced Residence Operator
in China – Ascott International
Management
TTG China Travel Awards 2008
TTG Asia Media
• Best Investor Relations (Merit Award)
PRISM Awards 2008
Institute of Public Relations of
Singapore
• Best International Hotel Management
Group of China – Ascott International
China Hotel Starlight Awards 2007
The Centre of Asia Hotel Forum
• Best Serviced Apartment/Residence
Operator
Readers’ Choice Awards 2008
DestinAsian
• Best Annual Report, Companies with
Market Capitalisation of S$500 Million
or More (Silver)
Singapore Corporate Awards 2008
The Business Times
• Best Serviced Residence – Ascott
International Management Vietnam
Golden Dragon Awards 2007
Vietnam Economic Times and Ministry
of Planning & Investment (Vietnam)
• Serviced Apartment Vendor of the Year
(Runner-up)
HR Vendors of the Year 2008
Human Resources Magazine
Awards & Accolades 2008
51
CapitaMall Trust • Most Transparent Company Award
(REITs Category) (Winner)
SIAS Investors’ Choice Awards
Securities Investors Association
(Singapore)
• Most Committed To A Strong Dividend
Policy (Singapore Category) (5th)
Asia’s Best Managed Companies
FinanceAsia
• Best Corporate Governance
(Singapore Category) (5th)
Asia’s Best Managed Companies
FinanceAsia
• Best Managed Company (Singapore
Category) (8th)
Asia’s Best Managed Companies
FinanceAsia
• Best Investor Relations (Singapore
Category) (10th)
Asia’s Best Managed Companies
FinanceAsia
• Best Investor Relations by a CEO
(Winner)
IR Magazine South East Asia
Awards 2008
CapitaCommercial Trust • Most Transparent Company Award
(REITs Category) (Runner-up)
SIAS Investors’ Choice Awards
Securities Investors Association
(Singapore)
• Best Investor Relations Offi cer (Small/
mid-cap Category) (Winner)
IR Magazine South East Asia
Awards 2008
RESIDENTIAL DEVELOPMENTS
AUSTRALIA Discovery Point • Marketing Award, New South Wales
Housing Industry Association, New
South Wales
Greenway Views • Award for Excellence
Residential Development Award
Urban Development Institute of
Australia, New South Wales
CHINA La Cité • Best Developer Residential (Future)
2008 Cityscape China Real Estate
Awards
Oasis Riviera • 2008 Shanghai Outstanding Project
for Energy Saving and Land Utilisation
Housing & Land Resource
Management Bureau, Shanghai
Parc Trésor • 2007 Shanghai Outstanding Project
for Energy Saving and Land Utilisation
Housing & Land Resource
Management Bureau, Shanghai
Westwood Green • (East & West Zone)
2008 Shanghai Outstanding Project
for Energy Saving and Land Utilisation
Housing & Land Resource
Management Bureau, Shanghai
• (West Zone)
2007 Shanghai Outstanding Project
for Energy Saving and Land Utilisation
Housing & Land Resource
Management Bureau, Shanghai
SINGAPORE Citylights • 2008 URA Architectural Heritage
Award
Urban Redevelopment Authority
Latitude • Green Mark Gold
Green Mark Awards 2008
Building and Construction Authority
The Botanic on Lloyd • Construction Excellence Award 2008
Building and Construction Authority
Urban Resort Condominium • Green Mark Gold
Green Mark Awards 2008
Building and Construction Authority
THAILAND The Royal Residence • Best Villa Development, Bangkok
Thailand Property Awards 2008
Property Report Thailand
North Park Place • Best Golf Development, Thailand
CNBC International Property
Awards 2008
CNBC
The Empire Place • Best Property Marketing, Thailand
CNBC International Property
Awards 2008
CNBC
• Best High-rise Development, Thailand
CNBC International Property
Awards 2008
CNBC
52
The Emporio Place • Best High-rise Development, Thailand
CNBC International Property
Awards 2008
CNBC
COMMERCIAL DEVELOPMENTS
SINGAPORE Capital Tower • Green Mark Gold
Green Mark Awards 2008
Building and Construction Authority
One George Street • Green Mark Gold
Green Mark Awards 2008
Building and Construction Authority
• Winner
SIA-NParks Skyrise Greenery
Awards 2008
Singapore Institute of Architects and
National Parks Board
Robinson Point • Green Mark
Green Mark Awards 2008
Building and Construction Authority
Six Battery Road • Green Mark Gold
Green Mark Awards 2008
Building and Construction Authority
Starhub Centre • Green Mark
Green Mark Awards 2008
Building and Construction Authority
Wilkie Edge • Green Mark
Green Mark Awards 2008
Building and Construction Authority
RETAIL DEVELOPMENTS
SINGAPORE Bugis Junction • Water Effi cient Building Award 2008
Public Utilities Board
Clarke Quay • Gold Award (Development and
Design: Renovation or Expansion
of an Existing Project Category)
2008 ICSC Asia Shopping
Centre Awards
International Council of Shopping
Centers
IMM • Bronze Award
Universal Design Awards 2008
Building and Construction Authority
• Water Effi cient Building Award 2008
Public Utilities Board
ION Orchard • Gold Award (Business-to-Business
Marketing Category)
2008 ICSC Asia Shopping
Centre Awards
International Council of Shopping
Centers
Junction 8 • Water Effi cient Building Award 2008
Public Utilities Board
Lot One Shoppers’ Mall • Winner
3rd South West District Public Health
Awards 2008
Clean, Dry & Sparkling Public Toilets
South West Community Development
Council & National Environment
Agency
Plaza Singapura • Bronze Award
Universal Design Awards 2008
Building and Construction Authority
Rivervale Mall • Water Effi cient Building Award 2008
Public Utilities Board
SERVICED RESIDENCES
AUSTRALIA Somerset Gordon Heights, Melbourne • New Tourism Development
Accommodation
HMAA Awards for Excellence 2008
Hotel, Motel & Accommodation
Association (HMAA) of Victoria
• Outstanding Contribution to Back of
House – Tak Lo, Maintenance
Supervisor, Somerset Gordon Place/
Somerset Gordon Heights
HMAA Awards for Excellence 2008
Hotel, Motel & Accommodation
Association (HMAA) of Victoria
Awards & Accolades 2008
53
• Outstanding Contribution by an
Industry Newcomer – Virginia Le,
Guest Service Offi cer, Somerset
Gordon Place/Somerset Gordon
Heights
HMAA Awards for Excellence 2008
Hotel, Motel & Accommodation
Association (HMAA) of Victoria
CHINA Ascott Beijing • Best International Apartment Type
Hotel of China
China Hotel Starlight Awards 2007
The Centre of Asia Hotel Forum
Ascott Guangzhou • Best International Serviced Residence
Brand
2008 Asia Hotel Leaders Summit
• Top 10 Outstanding Hotel Industry
Personalities in Guangzhou – Mae Ng,
Residence Manager, Ascott
Guangzhou
2008 Asia Hotel Leaders Summit
Ascott Shanghai Pudong • Best Serviced Residence in Asia
Pacifi c (2nd)
Business Traveller Asia Pacifi c Awards
2008
Business Traveller Asia Pacifi c
• Best International Apartment Type
Hotel of China
China Hotel Starlight Awards 2007
The Centre of Asia Hotel Forum
Somerset Grand Fortune Garden, Beijing • Best Apartment Hotel Brand
2008 Asia Hotel Leaders Summit
• Best Foreign Hotel Manager –
Mike Yan, Residence Manager,
Somerset Grand Fortune Garden,
Beijing
2008 Asia Hotel Leaders Summit
SOUTH KOREA Somerset Palace Seoul • Luxury Premier Serviced Residence
The Korea Times
THAILAND Ascott Bangkok Sathorn • Best Serviced Residence in Asia
Pacifi c (1st)
Business Traveller Asia Pacifi c Awards
2008
Business Traveller Asia Pacifi c
VIETNAM Somerset Chancellor Court • The Saigon Times Top 40 FDI Award
2008
The Saigon Times
INTEGRATED DEVELOPMENTS
BAHRAIN Raffl es City Bahrain • Best Property, Bahrain
CNBC Arabian Property Awards 2008
CNBC
CHINA Capital Plaza Ningbo • Best Developer Mixed Use (Future)
2008 Cityscape China Real Estate
Awards
Raffl es City Beijing • Best Developer Mixed Use (Future)
2008 Cityscape Asia Real Estate
Awards
Raffl es City Chengdu • Best Green Building in China
2008 China Retail & Commercial Real
Estate Annual Conference
Soufun.com
• TOP 100 China Innovative City
Landmark
2008 China Retail & Commercial Real
Estate Annual Conference
Soufun.com
• Gold Level LEED-CS Pre-certifi cation
Leadership in Energy and
Environmental Design Core & Shell
(LEED-CS)
U.S. Green Building Council
Leading developer in Singapore with more than 30 years of homebuilding experience.
Varsity Park Condominium, Singapore
55
CapitaLand Residential Singapore
from left to right Colin Wong SVP, Marketing & Sales, CapitaLand Residential Singapore Pte Ltd Ong Sim Lian SVP, Design Management, CapitaLand Residential Singapore Pte Ltd Patricia Chia CEO, CapitaLand Residential Singapore Pte Ltd Lee Yew Kwung SVP, Project Development & Management, CapitaLand Residential Singapore Pte Ltd Anson Lim VP, Investment, CapitaLand Residential Singapore Pte Ltd
For more than three decades,
CapitaLand has built a portfolio of
premier homes for Singapore residents
and savvy property investors globally.
The Singapore residential operations are
part of the Group’s broader strategy to
build distinctive homes for local residents
across Asia Pacifi c. In Singapore,
CapitaLand enjoys an average annual
market share of between 8% and 10%
based on home sales volume.
During the year, homebuying
sentiments were affected by the global
economic and fi nancial uncertainties.
Nevertheless, for 2008, CapitaLand
continued to benefi t from the progressive
profi t recognition of strong sales achieved
in 2006 and 2007 when it took the
opportunity to accelerate property
launches amidst the buoyant market
environment then.
Developing Premier, Distinctive Homes
During the year, CapitaLand’s
beautifully designed and well-located
homes continued to attract buyer interest.
The Group released selected apartments
of its Latitude condominium for preview
sales. Latitude is a boutique freehold
development with 127 elegant
apartments, and is located at Jalan
Mutiara near Grange Road. CapitaLand
also launched the fi rst phase of The
Wharf Residence, a 999-year leasehold
condominium. The development is
located at Tong Watt Road in the River
Valley Conservation Area and has an
interesting mix of 173 contemporary
apartments and 13 townhouses with
conserved facades.
CapitaLand unveiled the design for
a new distinctive high-rise development
along Farrer Road. The 99-year leasehold
condominium with about 1,500 homes is
designed by internationally-renowned
architect Zaha Hadid. This project will be
Ms Hadid’s fi rst large-scale residential
development in Singapore. The project’s
S$1.996 billion syndicated loan facility is
the largest syndicated residential property
development loan ever arranged in
Singapore. CapitaLand’s continued ability
to access the capital markets is an
endorsement of the Group’s strong
reputation and good fi nancial standing.
Three developments – Citylights,
RiverEdge and Varsity Park Condominium
– obtained Temporary Occupation Permit.
CapitaLand handed the keys of close to
1,280 apartments at these developments
to their owners.
CapitaLand’s residential
developments in Singapore garnered
several accolades during the year.
Singapore’s Building and Construction
Authority conferred Green Mark Gold
awards on Latitude and Urban Resort
Condominium, and a Construction
Excellence Award for The Botanic on
Lloyd. The Citylights condominium also
secured the Urban Redevelopment
Authority of Singapore’s 2008 URA
Architectural Heritage Award for its
innovative integration of a row of
conserved shophouses within a
contemporary high-rise development.
In February 2009, the land title issue
for the former Gillman Heights
Condominium site was resolved.
CapitaLand has engaged internationally
renowned architects Rem Koolhaas and
Ole Scheeren from the Offi ce of
Metropolitan Architecture to develop the
large-scale site in the lush Southern
Ridge area into an innovative lifestyle
destination.
Looking Ahead Going forward, CapitaLand expects
buying sentiments in Singapore to
continue to remain cautious in view of the
prevailing global fi nancial and economic
uncertainties.
The Group’s fi nancial strength and the
progressive profi t recognition of strong
sales achieved in the past years will
enable CapitaLand to be more fl exible
with the pace of its residential launches
in Singapore in 2009.
Leading foreign developer in China with a balanced presence across regions and property sectors.
Raffl es City Beijing, China
57
CapitaLand China from left to right Mao Daqing Regional GM, Bohai Economic Rim, CapitaLand China Holdings Pte Ltd Lucas Loh Regional GM, Pearl River Delta, CapitaLand China Holdings Pte Ltd Jason Leow Deputy CEO, CapitaLand China Holdings Pte Ltd Lim Ming Yan CEO, CapitaLand China Holdings Pte Ltd Steve Gong GM, Finance and Treasury, CapitaLand China Holdings Pte Ltd Hoon Teck Ming Regional GM, Chengdu, CapitaLand China Holdings Pte Ltd Chan Boon Seng Regional GM, Yangtze River Delta, CapitaLand China Holdings Pte Ltd
Since entering the China real estate
market in 1994, the Group’s operations
have grown steadily. Today, CapitaLand
China is one of the top foreign developers
in the country, with a presence in the
residential, commercial, integrated
development and fi nancial services sectors.
Together with CapitaLand’s other
business units covering the retail and
serviced residence sectors, the Group’s
multi-region, multi-sector business
model in China provides a balanced,
well-diversifi ed earnings base that
continues to serve it well even during
recent cautious market conditions.
Sustained Demand for Homes In the residential sector, buying
sentiments were cautious in view of the
global fi nancial downturn. The strong
sales achieved in prior years underpinned
CapitaLand’s performance in 2008. To
cater to demand for quality homes by
genuine homebuyers, CapitaLand
launched three new projects: La Capitale
and The Pines, two condominiums in
Beijing; and I-World, its maiden
residential project in Hangzhou. New
units from existing projects, namely Luff
Egret in Chengdu, Summit Residences
in Ningbo and Westwood Green in
Shanghai, were also released for sale.
Strengthening the Raffl es City Brand CapitaLand has a portfolio of Raffl es
City-branded integrated developments
in China, located in Shanghai, Beijing,
Chengdu and Hangzhou. An inauguration
ceremony was held for Raffl es City
Beijing, graced by Singapore’s Minister
Mentor Lee Kuan Yew. Construction
began during the year for Raffl es City
Chengdu while planning and design works
commenced for Raffl es City Hangzhou.
Unlocking Value, Recycling Capital CapitaLand successfully established
its 50%-owned Raffl es City China Fund.
The US$1 billion (about S$1.4 billion) real
estate private equity fund is the Group’s
largest to date and its fi rst integrated
development private equity fund in China.
The fund has acquired CapitaLand’s
effective 55.9% stake in Raffl es City
Shanghai and 100% stakes in Raffl es City
Beijing and Raffl es City Chengdu. The
acquisition of Raffl es City Hangzhou by
the fund is targeted to be completed by
2009. Two other funds were established
in 2008: CITIC CapitaLand Business Park
Fund, China’s fi rst RMB-denominated
real estate private equity fund; and
CapitaLand China Development Fund II.
During the year, CapitaLand
divested Hua Lei Holdings, which
indirectly owns Capital Tower Beijing,
at S$505.0 million, which translated to
a gain of S$187.0 million. The cash fl ow
generated from the timely divestment
further strengthened the company’s
balance sheet and will be reinvested in
quality developments in China.
Central China Real Estate Limited
(CCRE), an indirect associated company
of CapitaLand, was listed on the Hong
Kong Stock Exchange in June. The listing
proceeds will be used to extend CCRE’s
leadership position in Henan, one of
China’s most populous provinces.
Looking Ahead China remains a core market for
the Group. As a long-term real estate
investor in China, CapitaLand is
confi dent of the country’s economic
growth and development of its real estate
market. The Chinese government has
been pro-business and recent property-
related stimulus measures are expected
to boost the industry.
Given CapitaLand’s strong balance
sheet and low level of land in its pipeline,
the company is in a good position to take
advantage of the current market to
replenish land supply and continue
building its franchise in China.
One of the largest owners/ managers of office properties in the Singapore Downtown Core.
One George Street, Singapore
59
CapitaLand Commercial
CapitaLand is one of the largest
owners/managers of offi ce properties in
the Singapore Downtown Core, owning/
managing commercial space directly,
through joint ventures or through
CapitaCommercial Trust (CCT), a real
estate investment trust (REIT) which it
also manages. The Group also owns four
industrial properties in Singapore.
Overseas, CapitaLand has commercial/
residential projects in China, Japan,
Malaysia and the United Kingdom as well
as the growth markets of India, Thailand
and Vietnam.
In 2008, CapitaLand’s commercial
property management arm was awarded
the Singapore Service Class (S-Class)
certifi cation by SPRING Singapore for
service excellence to its customers.
CapitaLand’s offi ce properties have also
been conferred numerous green awards
in recognition of their environmentally-
friendly features.
The Group continued to actively
manage its property portfolio in 2008 and
make timely divestments to unlock value
for shareholders despite the volatile
fi nancial markets.
Active Portfolio Management CapitaLand divested two offi ce
properties in Singapore – One George
Street to CCT and its 50% stake in
Hitachi Tower to a third party. This was in
line with its strategy to monetise selected
properties for gains and to retain
recurring income from a core offi ce
portfolio in CCT, its sponsored REIT.
In China, CapitaLand made the
well-timed divestment of Capital Tower
Beijing to a third party, and sold its 50%
interests in two wholly-owned properties
– Red Diamond Plaza in Beijing and Innov
Tower (formerly known as RND Tower) in
Shanghai – to CITIC Trust as part of the
CITIC CapitaLand Business Park Fund.
Demand in Malaysia’s commercial
sector continued to remain fi rm for quality
assets in good locations. CapitaLand
strengthened its presence in the country
by acquiring properties through Quill
Capita Trust and Malaysia Commercial
Development Fund.
The Group continued to invest
selectively in key development projects.
CapitaLand partnered Arcapita to
develop its fi rst IT park and offi ce
complex in India’s Navi Mumbai. In
Japan, construction started on an
offi ce-cum-residential development in
Tokyo’s prime Shinjuku district,
developed jointly by CapitaLand and
leading real estate developers Mitsubishi
Estate Co., Ltd and Heiwa Real Estate
Co., Ltd.
In the United Kingdom, CapitaLand
successfully converted the interest of its
offi ce building in London’s Derry Street
from leasehold to freehold. In mid-2008,
Sony BMG opened its 100,000 square
foot European headquarters at
CapitaLand’s mixed-use Derry and Toms
Building in Central London.
High-Growth Markets in Asia The Group built on its residential
presence in the high-growth Asian
markets of India, Thailand and Vietnam
through local partnerships.
The 810-unit S&S Sukhumvit
eco-friendly condominium in Bangkok
and the 590-unit The Orchard Residency
in Ghatkopar, Mumbai received positive
buyer response when launched in 2008.
In Vietnam, CapitaLand has a total of
four projects and a pipeline of 3,600
apartments under development. The fi rst
residential project, The Vista, which saw
sales of 551 units out of a total of 850
residential/serviced apartment units, is
under construction. CapitaLand and local
partner Nam Thang Long Investment
Joint-Stock Company have agreed to
seek further investment opportunities in
the country.
Looking Ahead CapitaLand will continue to maintain
its position as a leading owner/manager
of prime commercial space in Singapore.
The Group also remains committed to be
a long-term investor in Asian growth
markets such as Vietnam and India.
from left to right Jessie Yong SVP, Marketing & Leasing, CapitaLand Commercial Limited Hazel Chew SVP, Finance & Corporate Services, CapitaLand Commercial Limited Ee Chee Hong Deputy CEO (Commercial), CapitaLand Commercial Limited Wen Khai Meng CEO, CapitaLand Commercial Limited Chen Lian Pang CEO (Southeast Asia), CapitaLand Commercial Limited Wong Jen Lai SVP, Investment & Asset Management, CapitaLand Commercial Limited Poon Hin Kong SVP, Design & Development, CapitaLand Commercial Limited
Asia’s leading mall owner/manager with more than 90 malls occupying over 63 million square feet of retail space.
The Orchard Residences and ION Orchard, Singapore
61
CapitaLand Retail
from left to right Loh Wai Keong SVP, Investments, CapitaLand Retail Limited Simon Ho Deputy CEO, CapitaLand Retail Limited Lim Beng Chee CEO, CapitaLand Retail Limited Goh Soon Yong Deputy CEO, CapitaLand Retail China Pte Ltd Simon Yong SVP, Project Development and Management, CapitaLand Retail Limited
CapitaLand made signifi cant progress
in 2008, strengthening its presence in the
fi ve Asian countries where it operates.
Delivering the Retail Pipeline In Singapore, ION Orchard
successfully secured six global
superbrands, widely acknowledged as
among the top and most well-known
fashion and lifestyle brands – Cartier,
Christian Dior, Dolce & Gabbana, Giorgio
Armani, Louis Vuitton and Prada – to
establish their fi rst duplex fl agship stores
in Singapore. Located side-by-side on
the ground fl oor of ION Orchard, the six
luxury brands will have free rein to create
interiors and shop fronts that refl ect their
distinctive brand identities, a move which
reinforces ION Orchard’s status as the
defi nitive retail landmark in Singapore.
The mall is expected to open in
mid-2009. Construction for another
landmark project in Singapore, the
Integrated Civic, Cultural, Retail and
Entertainment Hub at Vista Xchange,
one-north began in October 2008.
ION Orchard, as well as Clarke Quay
in Singapore, bagged ‘Gold’ awards at
the inaugural International Council of
Shopping Centers (ICSC) 2008 Asia
Shopping Centre Awards. ION Orchard
was honoured for its interactive, cutting-
edge multimedia show suite that took
prospective retailers on a multi-sensory
“journey” inside the upcoming mall.
Clarke Quay was hailed for the
environmentally-friendly restoration and
refurbishment of the area’s historical
go-downs into a vibrant lifestyle and
entertainment waterfront precinct.
In Malaysia, CapitaLand expanded
its footprint with the acquisition of
approximately 61.9% of the total retail
strata area, or 510,418 square feet, as
well as the car parks of Sungei Wang
Plaza in Kuala Lumpur for about
RM595 million (about S$250 million).
Sungei Wang Plaza, a prime freehold
asset strategically located at Kuala
Lumpur’s Bukit Bintang precinct, is
one of the most popular retail malls in
Malaysia’s capital city. Separately,
asset enhancement initiatives at MINES
Shopping Fair in Selangor are progressing
on schedule with over half of the works
completed. The Group’s three malls in
Malaysia, which also include Gurney
Plaza in Penang, have a total asset size
of approximately RM2 billion (about
S$840 million).
In China, CapitaLand has an extensive
portfolio of 58 malls in 40 cities. At
end-2008, 28 malls were operational,
including four new malls in Chongqing,
Tianjin, Zhanjiang and Zibo which
opened in 2008. The remaining 30 malls
are under construction and 10 of these
are expected to open in 2009. In 2008,
CapitaLand also collaborated with
SPRING Singapore, Singapore’s
government agency for enterprise
development, to organise the fi rst
overseas mission to China for Singapore’s
small and medium enterprise retailers to
gain fi rst-hand knowledge of the market
opportunities in China.
Our retail real estate business
platform in India and Japan continued to
progress. In India, CapitaLand entered
into separate joint ventures with Advance
India Projects Limited and the Prestige
Group during the year. Purchase
agreements for nine retail projects have
since been signed. The Forum Value Mall
Whitefi eld in Bangalore, the Group’s fi rst
mall in India and a joint venture project
with Prestige Group, is targeted to open
in 2009.
Looking Ahead CapitaLand will continue to build on
its established retail franchise to further
strengthen its leadership position as the
leading retail real estate player in Asia.
Ascott – world’s largest international serviced
residence owner-operator with over 25,000 serviced
residence units in 66 cities and 22 countries.
Ascott Singapore Raffl es Place
63
CapitaLand Serviced Residences
CapitaLand’s serviced residence unit,
Ascott, continued to entrench its position
as the world’s largest international
serviced residence owner-operator. In
2008, Ascott expanded its portfolio of
serviced residences under its three
brands – Ascott, Somerset and Citadines.
Ascott ended the year with over
25,000 serviced residence units in 190
properties, surpassing its target of
25,000 units by 2010. Ascott currently
operates over 18,000 serviced residence
units. Another 7,000 units will begin
operations over the next two to three
years to further add to operating income,
including management fees from third
party management contracts. Ascott’s
portfolio spans 66 cities and 22
countries across Asia Pacifi c, Europe
and the Gulf region.
Expanding Globally Ascott reinforced its leadership
position in markets where it has presence
and expanded into more cities. In 2008,
39 properties with over 5,000 units were
added through acquisitions and
management contracts. Ascott entered
12 more cities including Perth in Australia,
Shenyang and Wuhan in China,
Ahmedabad in India and Osaka in Japan.
During the year, Ascott opened 10
more properties in Australia, China,
Malaysia, Qatar, Singapore, Thailand and
Vietnam. In Singapore, Ascott opened its
fl agship Ascott Singapore Raffl es Place
and completed the acquisition of
Citadines Singapore Mount Sophia,
its fi rst Citadines property in Singapore,
which opened in January 2009.
2008 also saw the Citadines brand
expanding in Asia Pacifi c. Three more
Citadines opened in Bangkok, bringing
the total in the city to four. The fi rst
Citadines-branded properties in
Australia, Indonesia and Ahmedabad in
India were announced while two more
Citadines in Wuhan and Xi’an were
added in China.
Ascott continued to actively
manage its portfolio of assets. A total
of S$428 million was committed in
investments in Australia, France, India,
Japan and the United Kingdom. Proceeds
from the divestment of properties totalled
S$243 million and estimated total net
divestment gain was S$119 million.
Enhanced Competitive Advantage, Greater Focus
In April 2008, CapitaLand completed
the compulsory acquisition of Ascott.
Ascott became an indirect wholly-owned
subsidiary of CapitaLand and was
delisted from the Singapore Exchange
Securities Trading Limited. The
privatisation will strengthen Ascott’s
leadership position and accelerate its
growth in key markets by tapping on
CapitaLand’s more established network,
real estate development and fi nancial
services capabilities.
Later in the year, Ascott reorganised
its business into two units – Ascott
Hospitality and Ascott Real Estate – to
give greater focus to growing revenues
and profi ts from both hospitality
management services and real estate
development.
Ascott continued to be lauded
internationally, garnering 32 regional
and international accolades for its strong
brand reputation, management
excellence, outstanding service and
corporate transparency.
Looking Ahead The current global economic
slowdown has affected the worldwide
hospitality industry. However, Ascott’s
business is expected to remain resilient
as it caters mainly to extended stay
travellers. Ascott’s geographical
diversifi cation also helps mitigate impact
of the downturn in any one market.
Ascott continues to be disciplined and
selective in its investments while scouting
for suitable growth opportunities. It will
also focus on securing more management
contracts in existing and new markets.
In 2009, Ascott plans to open more
than 10 new properties with over 2,200
units in China, Georgia, Germany, India,
Japan, Singapore and Thailand.
from left to right Tony Soh Chief Strategy & Planning Officer, The Ascott Group Limited Deputy CEO, Ascott Hospitality, The Ascott Group Limited Chong Kee Hiong CEO, Ascott Real Estate, The Ascott Group Limited CEO, Ascott Residence Trust Management Limited Jennie Chua President & CEO, The Ascott Group Limited Ng Lai Leng Chief Corporate Officer, The Ascott Group Limited Deputy CEO, Ascott Residence Trust Management Limited Gerald Lee CEO, Ascott Hospitality, The Ascott Group Limited
Rihan Heights, Arzanah (Phase 1), Abu Dhabi, United Arab EmiratesDeveloper of landmark integrated developments.
65
CapitaLand Integrated Developments
from left to right Ku Wei Siong SVP, CapitaLand GCC Holdings Pte. Ltd. Yip Hoong Mun Deputy CEO, CapitaLand ILEC Pte. Ltd. Wong Heang Fine CEO, CapitaLand ILEC Pte. Ltd. and CapitaLand GCC Holdings Pte. Ltd. Ng Kok Siong SVP, CapitaLand ILEC Pte. Ltd.
CapitaLand pursues integrated
developments with leisure, entertainment
and conventions as their key themes. The
Group’s competitive edge is its ability to
integrate these themes with real estate
sectors like residential, retail and serviced
residences. CapitaLand currently has
seven integrated developments in
Singapore, Bahrain, China and the United
Arab Emirates.
Gulf Cooperation Council (GCC) Region
CapitaLand’s landmark integrated
developments in the oil-rich GCC region
are Raffl es City Bahrain, its fi rst Raffl es
City-branded development outside Asia,
and Arzanah, a unique development
surrounding the iconic Zayed Stadium
in Abu Dhabi.
Raffl es City Bahrain is part of Bahrain
Bay, a multi-billion dollar waterfront
project in Bahrain’s capital of Manama.
Designed by renowned international
architect Rafael Viñoly, the development
comprises three premium residential
towers, landscaped sky villas, serviced
residences and a high-end retail
component. Its architectural concept was
presented to HE Shaikh Salman bin
Hamad bin Isa Al-Khalifa, Crown Prince
and Chairman of the Economic
Development Board of Bahrain, and his
support has greatly enhanced the
development’s profi le. Raffl es City Bahrain
won “Best Property, Bahrain” at the
2008 CNBC Arabian Property Awards.
In April 2008, CapitaLand and
Mubadala Development Company
launched Capitala, a joint venture which
will develop Arzanah on a 1.4 million
square metre site. The fl agship
US$5 – 6 billion project offers quality
residences with leisure, sports and retail
amenities and a concept focusing on an
active urban lifestyle for its residents and
the community at large. Its master plan
was designed by award-winning fi rms
Sasaki Associates and SMC Alsop.
CapitaLand launched residential sales
in these two developments in June 2008,
achieving S$1 billion worth of sales
bookings within three months. About 90
Raffl es City Bahrain apartments were sold
at average prices above other high-quality
apartments in Bahrain. For Rihan Heights,
the fi rst phase of Arzanah, 575 out of 868
units were sold. In January 2009, Capitala
partnered Abu Dhabi Finance to provide
buyers with up to 85% fi nancing for their
new homes in Arzanah, offering fl exible
and long-term repayment schemes.
Asia Raffl es City in Singapore is an iconic
landmark with retail, offi ce, convention
and hotel components. In China,
there are currently four Raffl es City
developments in Shanghai, Beijing,
Chengdu and Hangzhou.
In Macau, CapitaLand owns a 20%
strategic interest in Macao Studio City,
Asia’s fi rst integrated leisure resort
combining studios, retail, entertainment
and hotels. The development is strategically
located in Cotai, next to the Lotus Bridge
immigration checkpoint and linked directly
to mainland China. Foundation works for
Macao Studio City were completed in
2008. Prestigious brands there will include
Ritz-Carlton, W Hotels, Marriott, Asian style
icon David Tang and Playboy Enterprises.
Leading international retail player Taubman
Asia, which acquired 25% of the
development’s retail component, will lead
the development, management and leasing
services for The Mall at Studio City.
CapitaLand has a 70% stake in a
well-located freehold site in Almaty, a
major city in oil-rich Kazakhstan. The
Group plans to develop a 170-unit
residential and serviced residence
complex against the backdrop of the
breathtaking Alatau Mountains. Design
and development work is underway.
Looking Ahead The growing affl uence of the oil-rich
GCC region and Asia has generated
sustainable demand for lifestyles with an
emphasis on leisure and recreation.
CapitaLand will continue to grow its
presence in the existing markets while
selectively looking out for new
opportunities for integrated developments.
One of Asia’s largest REIT and real estate fund managers with five REITs and 17 real estate private equity funds.
Raffl es City Chengdu, China
67
CapitaLand Financial Services from left to right Wee Hui Kan CEO, CapitaRetail China Trust Management Limited Lim Beng Chee CEO, CapitaMall Trust Management Limited Lim Ming Yan CEO, CapitaLand Financial Limited (China Development) Lui Chong Chee CEO, CapitaLand Financial Limited Wen Khai Meng Co-CEO, CapitaLand Financial Limited Lynette Leong CEO, CapitaCommercial Trust Management Limited Chan Say Yeong CEO, Quill Capita Management Sdn Bhd Chong Kee Hiong CEO, Ascott Residence Trust Management Limited
CapitaLand has established a strong
track record in real estate fi nancial
services, and offers a unique and
complete real estate value chain model
which includes being a developer,
manager, operator, fi nancial advisor,
fund manager and investor. The in-house
capabilities of CapitaLand Financial, the
Group’s real estate fund management
and fi nancial advisory services arm,
include real estate capital management,
structured fi nancing, property fund
management and advisory services.
Furthering Capital-Effi cient Strategy
Capital recycling is the cornerstone
of the Group’s capital-effi cient strategy.
To further this strategy, CapitaLand
established and managed real estate
funds as part of its business model. To
date, this has enabled the Group to
develop, warehouse and incubate retail,
offi ce and integrated developments in
Asia, Europe and the Gulf Cooperation
Council (GCC) countries. Together with its
listed real estate investment trusts
(REITs), these funds provided fee-based
management income as well as an
avenue to facilitate capital recycling.
As at end-2008, CapitaLand managed
fi ve REITs and 17 real estate private equity
funds with properties spanning 11
countries. During the year, CapitaLand
strengthened its lead as one of Asia’s
largest REIT and real estate fund managers,
with assets under management (AUM) of
more than S$25 billion. This has surpassed
the Group’s AUM target of S$25 billion
and is a year-on-year increase of about
S$8 billion (46%). CapitaLand’s fi ve
sponsored REITs performed well during
the year, contributing distributions of
S$131 million to the Group in 2008, an
increase of 18% compared to 2007.
CapitaLand also steadily built up its
fee-based revenue to S$182 million in
2008, a 38% increase compared to 2007.
Growth in Fund Management During the year, CapitaLand raised
S$2 billion after closing three new private
equity funds. These funds, all with China
assets, have enhanced the Group’s
presence in the country.
The US$1 billion (about S$1.4 billion)
Raffl es City China Fund is the Group’s fi rst
integrated development private equity fund
in China. CapitaLand holds a 50% stake in
the fund whose mandate is to invest in
prime Raffl es City-branded integrated
developments in key gateway cities in
China. It is the largest real estate private
equity fund the Group has originated and
managed to date. The acquisition of
Raffl es City Shanghai, Raffl es City Beijing
and Raffl es City Chengdu by the fund was
completed in 2008, while the acquisition of
Raffl es City Hangzhou is expected to be
completed by 2009.
The CapitaLand China Development
Fund II was closed with a fund size of
US$239.8 million (about S$327.0 million).
CapitaLand and CITIC Trust, China’s
largest trust services company,
established the RMB500 million (about
S$98 million) CITIC CapitaLand Business
Park Fund, the fi rst RMB-denominated
real estate private equity fund in China.
The fund owns Red Diamond Plaza in
Beijing’s Zhongguancun Software Park
and Innov Tower (formerly known as
RND Tower) in Shanghai’s Caohejing
High-Tech Park.
CapitaMall Trust CapitaMall Trust (CMT) is Singapore’s
fi rst and largest REIT by asset size and
market capitalisation. As at end-2008,
CMT’s total asset size was S$7.5 billion,
comprising a portfolio of 14 retail
properties in Singapore and investments
in China malls through an approximately
20% stake in CapitaRetail China Trust.
CapitaLand owns a 29.6% interest in CMT.
CMT registered a distributable income
of S$238.4 million in 2008, a year-on-year
increase of 12.9%. Correspondingly, CMT’s
Distribution Per Unit (DPU) of 14.29 cents
for 2008 was 7.1% higher than for 2007.
In Singapore, most of CMT’s retail
properties are strategically located at or
near MRT/LRT stations and bus
interchanges with captive population
catchments, and register a high monthly
The Atrium@Orchard, Singapore
Wilkie Edge, Singapore
69
shopper traffi c of between two million
to three million. The largely suburban
portfolio is well-spread in Singapore
and enjoys close to 100% occupancy.
In August 2008, CMT completed
the S$850.0 million acquisition of The
Atrium@Orchard (Atrium). A mixed-use
development comprising two Grade A
offi ce towers and a small retail
component, Atrium is adjacent to Plaza
Singapura, another quality asset owned
by CMT. Both properties are strategically
sited along the Orchard Road retail belt
and above the Dhoby Ghaut MRT
interchange station. Over time, Atrium is
expected to provide signifi cant value
creation opportunities as the future
planned integration of Atrium and Plaza
Singapura will create a combined prime
frontage of approximately 170 metres and
a combined retail net lettable area of over
600,000 square feet (sq ft), making it one
of the largest retail developments along
Orchard Road.
Retail space at Lot One Shoppers’
Mall increased with a new four-storey
retail extension. At Sembawang Shopping
Centre, the layout was enhanced with
over 42,000 sq ft of prime retail gross
fl oor area (GFA) decanted from residential
GFA. The completion of these two major
enhancement projects in December 2008
will increase the annual net property
income by approximately S$8.4 million.
CMT has an ‘A2’ corporate rating from
Moody’s Investor Services, the highest
amongst Singapore-listed REITs. On
9 February 2009, CMT announced the
fully underwritten renounceable 9-for-10
rights issue to raise gross proceeds of
approximately S$1.23 billion. This will be
used principally to repay borrowings due
in 2009. The proposed rights issue is
expected to reduce gearing to 29.1%,
strengthen the balance sheet and
enhance fi nancial fl exibility to capitalise on
opportunities. Trading of the rights units is
expected to start in early April 2009.
CapitaCommercial Trust CapitaCommercial Trust (CCT)
is Singapore’s fi rst and largest listed
commercial REIT by asset size. As at
end-2008, CCT’s total asset size was
S$6.9 billion, comprising 11 prime
commercial properties in Singapore,
as well as investments in Malaysian
commercial properties through a 30%
interest in Quill Capita Trust and a 7.4%
stake in Malaysia Commercial
Development Fund. CapitaLand owns a
31.1% interest in CCT.
CCT achieved a distributable income
of S$153.0 million in 2008. This yielded
a full-year DPU of 11 cents in 2008,
a 26.4% increase compared to 2007.
CCT’s portfolio enjoyed a high
committed occupancy rate of 96% in
December 2008.
In July 2008, CCT acquired One
George Street to strengthen its portfolio
of prime offi ce buildings in Singapore’s
Central Business District. In addition,
Somerset Olympic Tower, Tianjin, China
70
Saihan Mall, Huhhot, Inner Mongolia, China
CCT also completed its acquisition of
Wilkie Edge, a mixed-use development,
in December 2008.
Despite the challenging market
conditions in 2008, CCT was able to raise
S$1.4 billion to fi nance the acquisition of
One George Street and the progressive
payments for Wilkie Edge.
In January 2009, CCT announced the
successful refi nancing of the borrowings
under its S$580 million commercial
mortgage-backed securities, ahead of its
March 2009 maturity. Only one asset,
Capital Tower, was required as security
for the three-year secured term loan,
affi rming the banks’ confi dence in the
quality and value of CCT’s management,
its portfolio and blue-chip tenant base.
CCT now has eight unencumbered
properties worth S$2.7 billion, providing
CCT the fi nancial fl exibility to manage its
capital and balance sheet.
Ascott Residence Trust Ascott Residence Trust (Ascott Reit)
is the world’s fi rst Pan-Asian serviced
residence REIT. As at end-2008, Ascott
Reit’s total asset size was S$1.5 billion,
comprising 37 properties with 3,552 units
in 11 cities across seven countries.
CapitaLand has a 47.0% interest in
Ascott Reit.
Ascott Reit delivered a strong
performance in 2008 with a DPU of
8.78 cents, which was 14% higher than
2007. Unitholders’ distribution was
S$53.7 million in 2008, a 19.1% increase
over 2007. The improved performance
was due to organic growth across the
portfolio and contributions from newly
acquired properties.
In 2008, Ascott Reit acquired a new
property, Somerset St Georges Terrace in
Perth. The acquisition added a new city,
Perth, to Ascott Reit’s overseas footprint.
In addition, Ascott Reit announced the
acquisition of Somerset West Lake, a
90-unit serviced residence in Hanoi,
Vietnam, in November 2008.
CapitaRetail China Trust CapitaRetail China Trust (CRCT) is
Singapore’s fi rst pure-play China retail
REIT. As at end-2008, CRCT’s total asset
size was S$1.3 billion, comprising eight
malls in fi ve cities in China. CapitaLand
owns a 26.6% interest in CRCT.
CRCT reported a distributable income
of S$45.9 million and DPU of 7.53 cents
for 2008, 43.4% and 12.1% higher than
2007, respectively.
The acquisition of Xizhimen Mall in
Beijing, CRCT’s fi rst since its listing, was
successfully completed in February 2008.
In September 2008, CRCT also exercised
its rights to purchase Xizhimen Mall
Phase 2, an extension of the mall’s
Basement 1 level which is directly
connected to the adjacent mass rapid
71
transit interchange hub and future railway
station. Xizhimen Mall Phase 2 will
enhance the mall’s transport connectivity
and grow shopper traffi c. In addition, the
enlarged space will provide for a wider
array of retail offerings, further
strengthening the mall’s positioning as a
one-stop shopping, dining and
entertainment destination in Beijing.
Phase 2 is expected to be ready for
operations by end-2009.
Asset enhancement works at Saihan
Mall in Huhhot, the provincial capital of
Inner Mongolia, began in end-2007.
Asset enhancement works on Levels
1 to 3 were completed and they
re-opened in September 2008. Works
are currently in progress on Level 4 and
expected to be completed by end-2009.
Quill Capita Trust Quill Capita Trust (QCT), CapitaLand’s
fi rst overseas listed REIT, was listed on
the Main Board of Bursa Malaysia in
January 2007. As at end-2008, QCT had
an asset base of RM816.0 million (about
S$340.5 million), comprising 10 quality
commercial properties in Malaysia.
CapitaLand has a 9.3% interest in QCT.
During the year, QCT reported a
distributable income of RM29.42 million
(about S$12.3 million). This represented a
DPU of 7.51 sen, a 16.3% increase over
2007. The growth was largely attributed
to full recognition of rental income from
Wisma Technip and the commercial units
of Plaza Mont’ Kiara which were acquired
in September 2007, as well as the rental
income contribution from three
commercial properties acquired in March
2008.
In 2008, QCT completed four
acquisitions, namely Quill Building 5 – IBM,
Quill Building 8 – DHL (XPJ), Quill Building
10 – HSBC (Section 13) and TESCO
Building. These had a total purchase
consideration of RM226.54 million (about
S$94.5 million) and increased QCT’s total
property value by 43% to RM783.7 million
(about S$327 million).
Looking Ahead Going forward, CapitaLand will
continue to strengthen its fund
management business. The Group will
grow AUM and fee-based income
through selective asset enhancement
programmes and active portfolio
management for its REITs and private
equity funds.
CapitaLand will leverage on its track
record, domain knowledge and fi nancial
services expertise to originate and
structure real estate fi nancial products to
take advantage of distressed asset sales
as well as the market dislocation. The
Group remains optimistic that in this
environment, there will be opportunities
to acquire quality assets at good value.
Quill Building 5 – IBM, Cyberjaya, Malaysia
One of Australia’s major diversified property groups with over 80 years of property development experience.
Twenty8, Melbourne, Australia
73
Australand
from left to right Rob Wallace Property Trust Manager, Australand Holdings Limited Bob Johnston Managing Director & CEO, Australand Holdings Limited Sean McMahon Executive General Manager (Commercial & Industrial), Australand Holdings Limited Vincent Wee Chief Operating Officer (Residential), Australand Holdings Limited
CapitaLand’s subsidiary Australand
is one of Australia’s major diversifi ed
property groups. Its activities cover the
development of residential land, housing
and apartments; development of and
investment in income-producing
commercial and industrial properties;
and property management.
Australand has been involved in
property development for more than
80 years. Today, it has four listed entities
(namely Australand Holdings Limited,
Australand Property Trust, Australand
Property Trust No. 4 and Australand
Property Trust No. 5). These trade as
a single stapled security on the Australia
and Singapore stock exchanges.
Solid Operating Result In 2008, Australand delivered a
healthy operating profi t (excluding
unrealised losses arising from property
revaluations and signifi cant one-off items)
of A$174.8 million (S$173.9 million), a
year-on-year increase of 7%. Despite the
diffi cult market conditions, Australand’s
three key operating divisions achieved
solid contributions.
As at end-2008, the Investment
Property division had a total portfolio
value of A$2.3 billion (S$2.3 billion) with
76 properties and a total lettable area of
1.18 million square metres (sqm). The
strong performance refl ected Australand’s
robust portfolio, with assets in prime
locations and rental growth embedded
in the portfolio’s long-term leases.
The Commercial & Industrial division
is one of the market leaders with
development activities in Adelaide,
Brisbane, Melbourne, Perth and Sydney.
Several major projects contributed
signifi cantly to operating profi t, such as
the 34,000 sqm Twenty8 project at
Freshwater Place in Melbourne’s
Southbank, which had leasing
commitments of 77% at completion.
The Residential division recorded
slower sales volumes. However, this was
offset by robust land sales. In light of the
subdued state of the market, Australand
wrote down the carrying value of some
residential projects, reviewed and
prioritised development activities, and
addressed operational effi ciencies.
Focused Capital Management Australand remains focused on capital
management and embarked on a number
of initiatives to strengthen its balance sheet
and position the business for the current
market volatility.
Australand successfully completed a
one-for-one renounceable accelerated
priority issue of stapled securities, raising
approximately A$461 million (S$598 million).
This recapitalised its balance sheet,
reduced its gearing and provided fi nancial
fl exibility to fund its future developments.
Australand also extended the
maturity of its Multi-Option Facility to
June 2010 and increased the facility
from A$600.0 million (S$597.1 million)
to A$950.0 million (S$945.4 million).
During the year, Australand explored
a partnership with CapitaLand to invest in,
develop and manage industrial and
logistics properties in Asia. However, given
the prevailing market uncertainties, both
companies have put the plans on hold
to focus on existing businesses.
Looking Ahead 2009 will be a challenging year for
the entire property industry in Australia.
Australand will not be immune as it
responds to the general economic
slowdown, a constrained capital market
and a corresponding contraction in
development activities. Australand’s
investment portfolio will continue to
deliver reliable recurrent income although
development activities will be curtailed.
The sectors in which Australand operates
remain sound with strong long-term
fundamentals.
Australand will continue to focus on
capital and risk management. This will
position the business with the fi nancial
capacity to face the continued market
uncertainties and to potentially take
advantage of strategic opportunities.
74
Performance Review
Performance Overview For FY2008, CapitaLand Group
achieved a healthy profi t after tax and
minority interests (PATMI) of S$1.26 billion,
the second highest net profi t on record and
the third consecutive year that the Group
has achieved a net profi t of above
S$1 billion. Excluding unrealised fair value
changes on investment properties, PATMI
was still signifi cant at S$1.04 billion. This
was a result of the consistent
implementation of the Group’s strategy:
Focus, Balance and Scale. We focused on
capital productivity in real estate
development and investment activities,
whilst growing a balanced and solid base
of sustainable fee and rental income.
Compared to FY2007, PATMI was
lower mainly attributable to lower
revaluation gains from investment
properties as the global economic
slowdown which became evident in the
later part of 2008 caused property prices
to ease. 2007’s PATMI of S$2.76 billion
was boosted by revaluation gains of
S$1.05 billion.
Revenue Revenue for FY2008 was
S$2.8 billion, a decrease of 27.4% from
last year, mainly attributable to lower
sales from the Group’s development
projects but partially mitigated by higher
rental income and fee based income.
The higher rental income came mainly
from the newly acquired retail malls in
Malaysia while the higher fee based
income was from the Group’s fund
management services which has been
enjoying healthy growth year-on-year.
The Group’s Assets under Management
(AUM) was more than S$25 billion as at
December 2008, an increase of about
S$8 billion from 2007. In 2008, the Group
successfully closed three funds, namely
the Raffl es City China Fund, CapitaLand
China Development Fund II and CITIC
CapitaLand Business Park Fund.
In terms of geographic spread,
revenue from our overseas operations
remained a signifi cant contributor to
overall Group revenue at 69.7%. This was
a result of the Group’s ongoing
multi-geography, multi-sector strategy to
diversify its balanced revenue streams.
Revenue from the CapitaLand
Residential Singapore (CRS) Strategic
Business Unit (SBU) accounted for 14.5%
or S$400.2 million of the Group’s total
revenue. This was comparatively lower
than last year as two large-scale projects,
Citylights and Varsity Park Condominium,
were completed in December 2007 and
February 2008 respectively.
Revenue from CapitaLand China
Holdings (CCH) SBU also decreased by
66.5% as fewer residential projects were
released for sale in 2008.
CapitaLand Commercial (CCL) SBU
registered a 37.6% increase in revenue.
The increase came mainly from higher
progressive recognition of revenue for the
sale of Wilkie Edge and the consolidation
of One George Street and The Adelphi
strata units which became subsidiaries in
September 2007.
Contribution from CapitaLand Retail
(CRTL) SBU also increased by a
signifi cant 66.3%, mainly contributed by
the three newly acquired retail malls in
Malaysia and higher property
management fees from China as more
malls commenced operations in 2008.
Revenue from Ascott SBU was
slightly lower than previous year as
2007 included the consolidation of three
months revenue of Ascott Residence
Trust (Ascott Reit) before it became an
associated company in April 2007.
Excluding this, revenue for FY2008 was
higher than FY2007 due to better
performance from operations in Europe
and Singapore as well as newly-opened
properties in Singapore, China and
Vietnam.
CapitaLand Financial (CFL) SBU
revenue grew by 52.9% as compared to
last year due to acquisition fees and
higher fund management fees from the
enlarged AUM of over S$25 billion.
Revenue from Australand for FY2008
was 30.0% lower than 2007 mainly due
to a reduction in the number of units sold
for development projects and the weaker
Australian dollar exchange rate against
the Singapore dollar.
75
2008 Revenue by SBU Total: S$2.8 billion
2008 Revenue by Geographical Location Total: S$2.8 billion
2007 Revenue by SBU Total: S$3.8 billion
2007 Revenue by Geographical Location Total: S$3.8 billion
• CapitaLand Residential Singapore • CapitaLand China Holdings • CapitaLand Commercial • CapitaLand Retail • Ascott • CapitaLand Financial • Australand
• Singapore • China (including Hong Kong & Macau) • Australia & New Zealand • Europe • Asia/Gulf Cooperation Council countries (excluding Singapore & China)
• Others
14.4% 14.4%
23.6%30.3%
8.2%
4.3%
38.1%36.9%
11.9%
25.9%
28.9%17.1%
7.5%
3.3%
7.4%
10.5%
15.9% 12.1%
1.8%3.9%
35.5% 36.9%
6.6% 3.1%
0.2%1.3%
2008
2008
2007
2007
76
Performance Review
Earnings Analysis The Group’s earnings before
interest and tax (EBIT) for FY2008 was
S$2.21 billion or 42.1% lower than last
year as 2007 EBIT had benefi tted from
exceptional large fair value gains from
the Group’s investment properties
portfolio as well as write back of previous
provisions. In addition, EBIT contributions
from development projects in 2008 were
also lower as a result of the lower sales.
In terms of geographic spread,
contributions from Singapore, China and
Australia remained signifi cant at 40.2%,
44.6% and 9.8% of the Group’s total
EBIT respectively.
FY2008 EBIT from CRS of
S$175.0 million was 43.3% lower than
last year due mainly to an absence of
write back of previous provisions.
CCH posted an EBIT of
S$883.4 million which was its highest
on record. The strong EBIT was achieved
through gains from the sale of Capital
Tower Beijing and the Raffl es City
portfolio in China, namely Raffl es City
Shanghai, Raffl es City Beijing and Raffl es
City Chengdu.
CCL’s EBIT for FY2008 was lower at
S$395.6 million, a decrease of 78.9%
from 2007. This was largely due to the
lower fair value gains from the revaluation
of investment properties as well as lower
gains from the divestment of One George
Street and Hitachi Tower as compared to
the divestment of the former Temasek
Tower, Chevron House and AIG Tower
in 2007.
EBIT from CRTL for FY2008 at
S$298.6 million was slightly higher than
2007 mainly attributable to contributions
from the newly acquired Malaysian malls,
realisation of a deferred gain for Wangjing
Mall and a gain from the divestment of
Link REIT units. These were partially
offset by lower fair value gains from the
revaluation of investment properties in
Singapore, Japan and China.
EBIT from Ascott of S$132.2 million
was 60.8% lower than the previous year.
The lower EBIT was primarily due to fair
value losses from the revaluation of
investment properties in 2008 as
compared to fair value gains in 2007,
lower portfolio gains and the
deconsolidation of Ascott Reit’s results.
These were partly mitigated by better
operating performance.
CFL’s EBIT for FY2008 of
S$90.4 million was an increase of 29.6%
over that of 2007. This increase was
largely a result of higher fund management
revenue and lower operating expenses,
partially offset by higher impairment
losses made on certain investments and
lower share of profi ts from associates.
EBIT from Australand for FY2008 at
S$169.6 million was 63.9% lower than
2007. The lower EBIT was largely
attributable to fair value losses from the
revaluation of investment properties as
compared to fair value gains in 2007 and
provision for foreseeable losses made in
2008. Excluding the fair value changes
and the provision, operating profi t for
Australand increased by 7% over 2007.
77
2008 EBIT by SBU Total: S$2,213.5 million
2008 EBIT by Geographical Location Total: S$2,213.5 million
2007 EBIT by SBU Total: S$3,824.0 million
2007 EBIT by Geographical Location Total: S$3,824.0 million
• CapitaLand Residential Singapore • CapitaLand China Holdings • CapitaLand Commercial • CapitaLand Retail • Ascott • CapitaLand Financial • Australand • Others
• Singapore • China (including Hong Kong & Macau) • Australia & New Zealand • Europe • Asia/Gulf Cooperation Council countries (excluding Singapore & China)
• Others
175
891
309
2,331
883
987
403
879
396
218
1,877
450
299
68
298
162
132
44
337
-1
90
5
70
3
170 470
68 60
1,000
800
600
400
200
0
1,000
800
600
400
200
0
2,000
1,600
1,200
800
400
0
2,500
2,000
1,500
1,000
500
0
S$ million
S$ million
S$ million
S$ million
78
Performance Review
Dividends CapitaLand’s Board of Directors
has proposed a fi rst and fi nal dividend
of 5.5 cents per share and a special
dividend of 1.5 cents per share in
respect of FY2008. This amounts to a
payout of approximately S$296.7 million
based on the number of issued shares
as at 31 December 2008, taking into
consideration the enlarged share base
following the rights issue. The dividends
are subject to the shareholders’ approval
at the forthcoming Annual General
Meeting of the Company.
For the fi nancial year 2007, a fi rst and
fi nal dividend of 8.0 cents per share and
a special dividend of 7.0 cents per share
were approved and paid. The said
dividends of S$423.4 million were paid in
May 2008.
Assets The Group’s total assets as at 31
December 2008 were S$25.1 billion
compared to S$25.8 billion in 2007. The
decrease of about S$0.7 billion was
mainly attributed to the sale of
One George Street, Capital Tower
Beijing, Hitachi Tower and the injection of
Raffl es City portfolio in China into Raffl es
City China Fund, as well as the
weakening of Australian dollar against
the Singapore dollar. The decrease in
total assets was partially mitigated by
new investments during the year and fair
value gains of investment properties.
Borrowings The Group’s gross debts as at 31
December 2008 were S$9.8 billion. At the
same time, the Group also has a cash
balance of S$4.2 billion. After netting off
the cash, the Group’s net debt as at 31
December 2008 stood at S$5.6 billion
which is comparable to that as at 31
December 2007.
The Group net debt-to-equity ratio
remained healthy at 0.47 (2007: 0.47).
Shareholders’ Equity As at 31 December 2008, issued and
paid-up ordinary share capital of the
Company comprised 2.8 billion shares at
S$4.4 billion. This was a slight increase of
S$46.1 million from end-2007 due to the
issue of shares arising from the release of
awards under the Performance Share
Plan and Restricted Stock Plan as well as
the exercise of options under the Share
Option Plan. The Group’s revenue
reserves and other reserves at end-2008
were S$6.3 billion, an increase of
S$0.7 billion from S$5.6 billion in the
previous year. The increase largely came
from the S$1.26 billion net profi t for the
year, partially offset by the payment of
2007 dividends. The Group’s shareholders’
funds as at end-2008 were S$10.7 billion
compared to S$9.9 billion in 2007. As a
result of the higher equity, the Group’s net
tangible assets rose 1.9% to S$3.57 per
share as at 31 December 2008.
79
2008 Total Assets by Geographical Location Total: S$25.1 billion
2008 Total Assets by Category Total: S$25.1 billion
• Singapore • China (including Hong Kong & Macau) • Australia & New Zealand • Europe • Asia/Gulf Cooperation Council countries (excluding Singapore & China)
• Others
• Investment Properties & Properties Under Development • Interest in Associates and Jointly-Controlled Entities • Development Properties for Sale • Properties, Plant & Equipment • Cash and Cash Equivalents • Other Non-Current Assets • Other Current Assets
19.1%
43.4%
13.1%
16.3%
31.5%
25.9%
6.4%
4.8%
16.7%
9.2%8.4%
4.8%
0.4%
2008 2008
80
Performance Review
Treasury Highlights 2008 2007
Bank Facilities And Available Funds Bank facilities available (S$m) 6,338 7,406 Amount utilised for loans (S$m) 4,685 5,712 Available and unutilised (S$m) 1,653 1,694 Cash and fi xed deposit balances (S$m) 4,228 4,356 Unutilised facilities and funds available for use (S$m) 5,881 6,050
Debt Securities Capacity Debt securities capacity (S$m) 8,150 7,438 Debt securities issued (net of debt securities purchased) (S$m) 5,144 4,204 Unused debt securities capacity (S$m) 3,006 3,234
Interest Cover Ratio Earnings before net interest, tax, depreciation and amortisation (S$m) 2,257 3,807 Net interest expense (S$m) 410 279 Interest cover ratio (times) 5.50 13.64
Interest Service Ratio Operating cash surplus before interest and tax (S$m) 1,806 2,338 Net interest paid (S$m) 468 378 Interest service ratio (times) 3.86 6.19
Secured Debt Ratio Secured debt (S$m) 2,413 3,315 Percentage of secured debt 25% 33%
Debt Equity Ratio Gross debt (S$m) 9,829 9,916 Cash and fi xed deposit balances (S$m) 4,228 4,356 Net debt (S$m) 5,601 5,560 Equity (S$m) 11,988 11,865 Debt equity ratio (net of cash and fi xed deposit balances) (times) 0.47 0.47
81
Sources of Funding
30% 29% 33% 42% 53%
70% 71% 67% 58% 47%
S$ billion
10
8
6
4
2
0
$7.2b $6.7b
$8.1b
$9.9b $9.8b
Bank & Other Loans Debt Securities
Management And Sources Of Funding
The Group strives to maintain a
prudent fi nancial structure. Its main
sources of operating cashfl ows are
derived from residential sales, fee and
rental income. On an ongoing basis, the
Group actively reviews its cashfl ow,
debt maturity profi le and overall liquidity
position. As part of its liquidity
management to support its funding
requirements, investment needs and its
growth plans, suffi cient undrawn
banking facilities and capital market
programmes are set up so as to
facilitate fund raising at opportunistic
windows.
The Group has signifi cant fi nancial
strength to weather the global
economic uncertainties, with a total
book equity of S$11.99 billion, a low net
debt-to-equity ratio of 0.47 and a strong
liquidity position with S$4.23 billion of
cash reserves on the balance sheet.
This puts the Group in a strong position
in the current capital and liquidity
constrained global environment. The
Group is well positioned to support its
refi nancing needs for at least the next
two years. Part of the cash reserves will
be utilised to repay some of the debts
that are maturing in 2009 and to fund its
committed investments.
The overall net debt increased
marginally by about 0.7% from
S$5.56 billion in 2007 to S$5.60 billion
as at end-2008.
Finance cost for the Group was
S$516.3 million for fi nancial year ended
2008. This was about 28% higher
compared to S$403.5 million in 2007 as
a result of higher average gross debt.
Notwithstanding this, the Group’s gross
debt was reduced from S$9.92 billion in
2007 to S$9.83 billion as at end-2008.
Sources Of Funding As at end-2008, 53% of the Group’s
total debt was raised through a
diversifi ed mix of the capital market
bond issuance and the balance 47%
was from bank borrowings. The higher
percentage of debt raised from capital
markets was mainly due to the issuance
of S$1.3 billion ten-year convertible
bond in March 2008 which provided the
Group greater fi nancial fl exibility. During
the year, bank loans declined by about
S$1.0 billion mainly as a result of
repayment of bank borrowings from
divestment proceeds.
2004 2005 2006 2007 2008
82
Performance Review
Commitment Of Funding As at end-2008, the Group is able to
achieve 97% of its funding from committed
facilities. The balance 3% was funded by a
portfolio of relatively cheaper and fl exible
uncommitted short term facilities.
The Group also monitors its asset
versus liability match and ensures that an
appropriate portion of committed funding
is put in place to match the planned
investments holding periods. Taking into
account the Group’s investment strategy
and the current capital and liquidity
constrained global environment,
committed fi nancing was secured
whenever possible to support its ongoing
investments. This was carefully balanced
with short term lines which allowed the
Group to optimise the overall cost of
funding, facilitate repayment of its debts
from divestments or sales proceeds and
yet assured the Group with suffi cient
fi nancial capacity to support its
operations, pursue acquisitions and
investment opportunities.
Maturity Profi le
% of S$ billion Debt
Due within 1 year* 1.88 19
Between 1 & 2 years 2.06 21
Between 2 & 3 years 1.78 18
Between 3 & 4 years 1.05 10
Between 4 & 5 years 0.05 1
After 5 years 3.01 31
* Includes long-term debt with remaining
loan life of less than a year to maturity.
The Group has proactively built up
suffi cient cash reserves and credit lines
to enable it to meet its short term debt
obligations, support its refi nancing needs
and pursue opportunistic investments.
The fi nancial resources have also
provided the Group fl exibility in planning
its refi nancing which is critical in the
current decline in general lending activity
in the market. Additionally, the Group
reviews its loan profi le closely so as to
diversify the refi nancing risks and spread
out the loan maturity. In reviewing the
maturity profi le of its loan portfolio, the
Group also took into account any
divestment or investment plans and the
prevailing credit market conditions.
Available Lines By Nationality Of Banks As At 31 December 2008
The Group continues to maintain and
build an extensive and active relationship
with a network of more than 30 banks of
various nationalities. With this varied
spectrum of network, the Group was able
to tap on the strengths and support from
the fi nancial institutions in pursuing its
strategic growth and presence, thus
enhancing its competitiveness in core
markets and develop other markets
where appropriate.
Interest Rate Profi le The Group manages its fi nance cost
by maintaining a prudent mix of fi xed
and fl oating rate borrowings. As at
31 December 2008, the fi xed rate
borrowings constituted 75% of the
portfolio and the balance 25% were on
fl oating rate basis. As fi nance cost
formed an integral component of the
Group’s operating costs, a higher
percentage in fi xed rate funding would
offer protection against unexpected rise
in interest rates. On balance, to capitalise
on the low interest rate environment
which is likely to sustain for a while in this
current global fi nancial environment, a
certain portion of the loan portfolio was
maintained on fl oating rate basis. The
Group was able to maintain a fl exible
profi le and whenever there were
divestment proceeds or sales proceeds
from fast track residential sales, it could
promptly utilise the proceeds to repay its
fl oating rate loans. In managing the
interest rate profi le, the Group takes into
account the interest rate outlook on
various currencies of loans, holding
periods of its investment portfolio, timing
of planned divestments and operating
cashfl ow generated from progress
payment collections from its residential
receivables.
Interest Cover Ratio (“ICR”) and Interest Service Ratio (“ISR”)
The ICR and ISR was 5.50 and 3.86
respectively. ICR of 5.50 was lower than
13.64 last year mainly due to lower fair
value gains from investment properties,
lower development profi ts and the
absence of write back of previous
provisions. Net interest expense was
higher due to higher average gross debt
in 2008. ISR of 3.86 was lower than 6.19
last year due to higher net interest paid
and lower cashfl ow generated from
operations.
83
Commitment of Funding
Profi le of Fixed and Floating Rate Loans Interest Cover Ratio and Interest Service Ratio
Committed Uncommitted
Fixed Floating
13%
26%
13%
40%
10%
26%
6%
25%
3%
25%
87%
74%
87%
60%
90%
74%
94%
75%
97%
75%
10
8
6
4
2
0
10
8
6
4
2
0
S$ million Times
S$ billion
$7.2b $6.7b
$8.1b
$9.9b $9.8b
S$ billion
$7.2b $6.7b
$8.1b
$9.9b $9.8b
Available Lines By Nationality of Banks as at 31 December 2008
• Singapore • Europe • Japan • Australia • Others
28%
20% 21%
18%
13%
2008
Net Interest Expense Interest Cover Ratio Net Interest Paid Interest Service Ratio
2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
$188m
$172m
$182m
$279m
$410m
$249m
$226m $230m
$468m 500
400
300
200
100
0
15
12
9
6
3
0
5.27
9.19
9.73
13.64
5.50
4.59
8.53 8.97
6.19
3.86
2004 2005 2006 2007 2008
$378m
84
Economic Value Added Statements
2008 2007 Note S$ million S$ million
Net Operating Profi t Before Tax 1,322.1 1,908.4
Adjust for:
Share of results of associates and jointly-controlled entities 375.1 1,512.1
Interest expense 535.7 419.1
Others 15.1 53.9
Adjusted Profi t Before Interest and Tax 2,248.0 3,893.5
Cash operating taxes 1 (199.8) (278.2)
Net Operating Profi t After Tax (NOPAT) 2,048.2 3,615.3
Average capital employed 2 21,314.5 17,748.3
Weighted average cost of capital (%) 3 6.15 5.80
Capital Charge (CC) 1,310.8 1,029.4
Economic Value Added (EVA) [NOPAT - CC] 737.4 2,585.9
Minority interests (76.8) (250.8)
Group EVA attributable to Equity Holders of the Company 660.6 2,335.1
Note 1: The reported current tax is adjusted for the statutory tax impact of interest expense.
Note 2: Monthly average capital employed included equity, interest-bearing liabilities, timing provision, cumulative goodwill and present value of operating leases.
Major Capital Components: S$ million
Borrowings 10,969.4 Equity 9,976.0 Others 369.1
Total 21,314.5
Note 3: The weighted average cost of capital is calculated as follows:
i) Cost of Equity using Capital Asset Pricing Model with market risk premium at 5.0% (2007: 5.0%) per annum;
ii) Risk-free rate of 2.93% (2007: 3.05%) per annum based on yield-to-maturity of Singapore Government 10-year Bonds;
iii) Ungeared beta ranging from 0.50 to 0.85 (2007: 0.50 to 0.68) based on the risk categorisation of CapitaLand’s strategic business units; and
iv) Cost of Debt rate at 4.26% (2007: 3.97%) per annum using 5-year Singapore Dollar Swap Offer rate plus 131 basis points (2007: 60 basis points).
85
Value Added Statements
2008 2007 S$ million S$ million
Value Added From:
Revenue earned 2,752.3 3,792.7
Less bought in materials and services (1,514.0) (2,209.1)
Gross Value Added 1,238.3 1,583.6
Share of results of associates and jointly-controlled entities 375.1 1,512.1
Exchange gains (net) 51.8 22.2
Other operating income (net) 1,075.0 1,396.2
1,501.9 2,930.5
Total Value Added 2,740.2 4,514.1
Distribution:
To employees in wages, salaries and benefi ts 478.1 588.7
To government in taxes and levies 284.2 364.1
To providers of capital in:
– Net interest on borrowings 462.0 365.7
– Dividends to shareholders 423.4 317.1
1,647.7 1,635.6
Balance Retained in the Business:
Depreciation and amortisation 57.2 41.6
Retained profi ts net of dividends to equity holders of the Company 836.7 2,442.2
Minority interests 201.3 393.1
1,095.2 2,876.9
Non-Production Costs and Income:
(Write back of)/Allowance for doubtful receivables (2.7) 1.6
Total Distribution 2,740.2 4,514.1
Productivity Analysis:
Value added per employee (S$’000)# 199 293
Value added per dollar of employment cost (S$) 2.59 2.69
Value added per dollar sales (S$) 0.45 0.42
# Based on average 2008 headcount of 6,223 (2007: 5,403).
86
Portfolio Details As at 31 December 2008
RESIDENTIAL
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
SINGAPORE Botannia West Coast Park 2006 S Leonie Court Pte Ltd 50.0 493 956
Citylights Jellicoe Road 2007 C CRL Realty Pte Ltd 100.0 600 99
Latitude near Grange Road 2007 S CRL Realty Pte Ltd 100.0 127 Freehold
RiverEdge Sampan Place 2008 C Riveredge Development Pte Ltd 45.0 135 99
RiverGate Martin Road 2005 S Riverwalk Promenade Pte Ltd 50.0 545 Freehold
Scotts HighPark Scotts Road 2006 S Leonie Court Pte Ltd 100.0 73 Freehold
The Metropolitan near Tanglin Road 2006 S Tanglin Residential Pte Ltd 50.0 382 99 Condominium
The Orchard Orchard Turn 2006 S Orchard Turn Residential 50.0 175 99 Residences Development Pte Ltd
The Seafront on Meyer Meyer Road 2007 S CRL Realty Pte Ltd 100.0 327 Freehold
The Wharf Residence Tong Watt Road 2000 A Leonie Court Pte Ltd 100.0 186 999
Urban Resort Cairnhill Road 2006 A CRL Realty Pte Ltd 100.0 64 Freehold Condominium
Varsity Park West Coast Road 2008 C CRL Realty Pte Ltd 100.0 530 99 Condominium
Visioncrest Penang Road 2007 C Winpeak Investment Pte Ltd 25.0 265 Freehold
Effective Gross Floor Tenure Name Location Year * Holding Company Stake (%) Area (sqm) (Years)
SINGAPORE Future Projects Site at Cairnhill Road near Orchard Road 2007 A Augite Pte Ltd 50.0 24,263 Freehold
Site at Farrer Road Farrer Road 2007 A Morganite Pte Ltd 35.0 218,380 99
Site at Nassim Hill near Orchard Road 1999 A CRL Realty Pte Ltd 100.0 15,942 Freehold
Site at Yio Chu Kang Road 2000 A CRL Realty Pte Ltd 100.0 19,330 Freehold Yio Chu Kang Road
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
87
RESIDENTIAL
Effective Gross Floor Total No. Tenure Name Location Year * Holding Company Stake (%) Area (sqm) of Units (Years)
CHINA Beau Monde Tianhe District, 2007 C Guangzhou Hai Yi Property 86.7 78,945 386 70 Guangzhou Development Co., Ltd
Beau Residences Chancheng District, 2007 S Foshan Xin De Real Estate 100.0 46,454 648 70 Foshan Development Co., Ltd
I-World Gongshu District, 2007 S CapitaLand Xinyun 50.0 53,642 580 70 Hangzhou (Hangzhou) Real Estate Development Co., Ltd
La Capitale Dongcheng District, 2007 S Beijing Xin Xu Real Estate 100.0 68,000 313 50 Beijing Development Co., Ltd
La Cité Foshan Chancheng District, 2008 S Foshan Xin Kai Real Estate 100.0 79,996 706 70 Foshan Development Co., Ltd
(estimated) (estimated)
La Forêt Chaoyang District, 2008 C Beijing Xinkai Real Estate 86.7 352,100 1,808 70 Beijing Development Co., Ltd
Luff Egret Wenjiang District, 2007 S Sichuan Zhixin CapitaLand 50.0 190,161 701 70 Chengdu Co., Ltd
(estimated) (estimated)
Oasis Riviera Changning District, 2008 C Shanghai Ning Xin Real Estate 73.0 275,203 1,964 70 Shanghai Development Co., Ltd
Orchid Garden Chaoyang District, 2006 C Beijing Orchid Garden Real 80.1 63,906 247 70 Beijing Estate Development Co., Ltd
Parc Trésor Baoshan District, 2008 C Shanghai Xinshu Property 100.0 84,680 705 70 Shanghai Development Co., Ltd
Riviera Ville Chancheng District, 2007 S Foshan Xin Fo Chen Real 100.0 109,672 758 70 Foshan Estate Development Co., Ltd
Summit Residences Jiangbei District, 2007 S Ningbo Xin Yao/Xin Feng 50.0 144,409 868 70 Ningbo Ningbo Property Development Co., Ltd
The Loft Chengdu Qingyang District, 2008 S Chengdu Xin Kai Co., Ltd 56.3 464,120 4,410 70 Chengdu
The Pines Chaoyang District, 2008 S Beijing CapitaLand Pin Yuan 100.0 38,000 157 70 Beijing Real Estate Development Co., Ltd
The Riviera Chancheng District, 2007 S Foshan Xin Fo Chen Real 100.0 54,178 208 70 Foshan Estate Development Co., Ltd
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
88
Portfolio Details As at 31 December 2008
RESIDENTIAL
Effective Gross Floor Total No. Tenure Name Location Year * Holding Company Stake (%) Area (sqm) of Units (Years)
CHINA (cont’d) Westwood Green Minhang District, 2005 S Shanghai Aoshun Property 86.7 103,968 426 70 Shanghai Co., Ltd
Future Projects Beaufort Chaoyang District, 2006 A Beijing Heng Shi Tong Fang 30.0 169,406 989 70 Beijing Real Estate Development Co., Ltd
FloraLand II Wenjiang District, 2007 A Sichuan Zhixin 50.0 1,309,830 6,828 70 Chengdu CapitaLand Co., Ltd
(estimated) (estimated)
Guangnan Project Qingpu District, 2007 A Shanghai Guang Nan Real 95.0 62,887 220 70 Shanghai Estate Development Co., Ltd
I-World (Plot 19) Gongshu District, 2006 A CapitaLand Xinyun (Hangzhou) 50.0 70,000 400 70 Hangzhou Real Estate Development
(estimated) (estimated)
Co., Ltd
Royal Residences Dongcheng District, 2007 A Beijing CapitaLand Xin Ming 100.0 15,130 15 70 Beijing Beijing Real Estate Development Co., Ltd.
Site at Jin Sha Zhou Baiyun District, 2005 A Guangzhou Beautiwin Real 50.0 368,900 3,408 70 Guangzhou Estate Development Co., Ltd
Site at Wenjiang – 301 Wenjiang District, 2007 A Chengdu CapitaLand Zhixin 50.0 269,883 1,973 70 Chengdu Wenjiang Co., Ltd
(estimated) (estimated)
Chengdu Zhi Kai Industrial
Co., Ltd
Site at Wenjiang – 345 Wenjiang District, 2006/ A Sichuan Zhixin CapitaLand 50.0 101,820 448 70 Chengdu 2007 Co., Ltd
(estimated) (estimated)
Vermont Hills Changping District, 2007 A Beijing Rising Harmony Real 90.0 458,381 713 70 Beijing Estate Development Co., Ltd
INDIA The Orchard Residency Ghatkopar, Mumbai 2007 S Lonsvale Pte Ltd 49.0 64,000 590 Freehold
THAILAND Athenee Residence Bangkok 2007 C TCC Capital Land Limited 40.0 81,842 219 Freehold
North Park Place Bangkok 2007 S TCC Capital Land Limited 40.0 33,337 128 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
89
RESIDENTIAL
Effective Gross Floor Total No. Tenure Name Location Year * Holding Company Stake (%) Area (sqm) of Units (Years)
THAILAND (cont’d) S&S Sukhumvit Bangkok 2008 S TCC Capital Land Limited 40.0 55,540 810 Freehold
Site at Jomtien Pattaya 2006 A TCC Capital Land Limited 40.0 47,924 166 Freehold
Site at Tup Kaek Krabi 2006 A TCC Capital Land Limited 40.0 10,076 47 Freehold
(estimated)
The Empire Place Bangkok 2008 C TCC Capital Land Limited 40.0 87,634 493 Freehold
The Emporio Place Bangkok 2006 S TCC Capital Land Limited 40.0 70,125 361 Freehold
The Royal Residence Bangkok 2005 S TCC Capital Land Limited 40.0 44,121 73 Freehold
Villa Rachakhru Bangkok 2006 C TCC Capital Land Limited 40.0 6,959 69 Freehold
Villa Rachatewi Bangkok 2006 S TCC Capital Land Limited 40.0 76,240 744 Freehold
Villa Sathorn Bangkok 2007 S TCC Capital Land Limited 40.0 54,291 636 Freehold
VIETNAM Le Chalet District 7, 2006 A CapitaLand (Vietnam) 70.0 90,000 600 Freehold Ho Chi Minh City Holdings Pte Ltd
(estimated)
Satin Residence Hanoi 2008 A CapitaLand (Vietnam) 70.0 221,806 1,200 Freehold Holdings Pte Ltd
(estimated)
Site at District 2 Ho Chi Minh City 2008 A CapitaLand (Vietnam) 60.0 234,361 950 Freehold Holdings Pte Ltd
(estimated)
The Vista District 2, 2007 S CapitaLand (Vietnam) 80.0 189,966 850 Freehold Ho Chi Minh City Holdings Pte Ltd (residential and serviced
residences)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
90
Portfolio Details As at 31 December 2008
COMMERCIAL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
SINGAPORE Offi ce Bugis Village Queen Street/Rochor 1989 A CapitaCommercial Trust 31.1 11,258 99 # Road/Victoria Street
Capital Tower Robinson Road 2000 C CapitaCommercial Trust 31.1 68,836 99 #
HSBC Building Collyer Quay 2005 A CapitaCommercial Trust 31.1 18,624 999 #
One George Street George Street 2004 C CapitaCommercial Trust 31.1 41,621 99 #
PWC Building Cross Street 2000 C DBS China Square Limited 30.0 33,080 99 #
Robinson Point Robinson Road 1997 C CapitaCommercial Trust 31.1 12,369 Freehold #
Six Battery Road Battery Road 1989 A CapitaCommercial Trust 31.1 46,166 999 #
Starhub Centre Cuppage Road 1998 C CapitaCommercial Trust 31.1 26,019 99 #
The Adelphi – Coleman Street 1988 A Adelphi Property Pte Ltd 100.0 16,543 999 235,500 163 strata-titled units (offi ce and retail)
Wilkie Edge Wilkie Road 2008 C CapitaCommercial Trust 31.1 13,561 99 # (excludes serviced
residences)
Carpark Golden Shoe Car Park Market Street 1989 A CapitaCommercial Trust 31.1 4,117 99 #
Market Street Car Park Market Street 1989 A CapitaCommercial Trust 31.1 1,970 99 #
Industrial Corporation Place Corporation Road 1993 C Corporation Place Ltd 75.0 57,667 60 #
Kallang Avenue Kallang Avenue 1989 A KAIC Pte Ltd 100.0 10,271 99 20,200 Industrial Centre
Kallang Bahru Kallang Avenue 1989 A KBC Pte Ltd 100.0 15,784 99 30,600 Complex
Technopark@Chai Chai Chee Road 1982 A Wan Tien Realty (Pte) Ltd 100.0 105,871 60 210,000 Chee
Integrated Development Raffl es City Singapore North Bridge Road/ 2006 A RCS Trust 30.5 72,590 99 # Stamford Road/ (retail,offi ce Bras Basah Road
and 2,028
hotel rooms)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction # Total book value of non-wholly owned Singapore commercial properties: S$8.44 billion
91
COMMERCIAL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
BAHRAIN Integrated Development Raffl es City Bahrain Bahrain Bay, 2007 S Bahrain Bay 37.1 171,500 Freehold ## Manama Integrated Development
(residential GFA)
Limited 24,000 (serviced residences GFA)
92,500 (retail GFA)
CHINA Offi ce Innov Tower (formerly Xuhui District, 2008 S Caike Property (Shanghai) 50.0 40,445 45 ## known as RND Tower) Shanghai Co., Ltd
(GFA)
Red Diamond Plaza Haidian District, 2006 A Beijing Red Diamond 50.0 22,667 50 ## Beijing Science & Technology
(GFA)
Development Co., Ltd
Integrated Development Capital Plaza Ningbo Jiangbei District, 2008 S Ningbo Xin Yin Property 50.0 97,898 50 ## Ningbo Development Co., Ltd
Daning Project Zhabei District, 2007 A Shanghai CapitaLand Xin 100.0 71,086 50 137,334 Shanghai Chuang Real Estate
(offi ce)
Development Co., Ltd 40
(retail and
serviced
residences)
Macao Studio City Cotai, Macau 2007 S East Asia Televisao Por 20.0 340,000 25 ## Satalite Limitada (proposed GFA (with effect from for Phase 1) 17 Oct 2001
renewable until
19 Dec 2049)
Raffl es City Beijing Dongcheng District, 2008 C Beijing Xin Jie Real Estate 50.0 97,665 50 ## Beijing Development Co., Ltd
(GFA)
(general)
40
(retail)
Raffl es City Chengdu Wuhou District, 2007 S Chengdu Raffl es Industry 50.0 195,446 40 ## Chengdu Co., Ltd
(GFA)
Raffl es City Hangzhou Qianjiang New Town, 2007 A Raffl es City (Hangzhou) Real 100.0 283,568 40 209,671 Hangzhou Estate Development Co., Ltd
(GFA)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ## Total book value of non-wholly owned overseas commercial properties: S$4.05 billion
92
Portfolio Details As at 31 December 2008
COMMERCIAL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
CHINA (cont’d) Raffl es City Shanghai Huangpu District, 2003 C Shanghai Hua Qing Real 27.9 133,816 50 ## Shanghai Estate Development Co., Ltd
(GFA)
Site at Wenjiang – 110 Wenjiang District, 2006 A Sichuan Zhixin CapitaLand 50.0 80,762 40 n/a Chengdu Co., Ltd
(estimated)
INDIA IT Park & Offi ce Site at Trans Thana District, 2007 A LOMA IT Park 49.0 273,250 58 ## Thana Creek Navi Mumbai Developers Private Limited
(GFA)
JAPAN Offi ce & Residential Site at Kita-Shinjuku Shinjuku Ward, 2008 S Mitsubishi Estate Co., Ltd. 20.0 14,400 Freehold ## Tokyo
(land area)
KAZAKHSTAN Integrated Development Site at Almaty Almaty 2008 A CapitaLand Express LLP 70.0 34,030 Freehold ## (residential and serviced
residences GFA)
MALAYSIA Offi ce Menara Citibank Jalan Ampang, 1994 A Inverfi n Sdn Bhd 30.0 68,150 Freehold ## Kuala Lumpur
UNITED ARAB EMIRATES Integrated Development Rihan Heights Abu Dhabi 2008 S Mubadala CapitaLand 49.0 142,120 Freehold ## (Arzanah Phase 1) Real Estate LLC (residential GFA)
UNITED KINGDOM Integrated Development 99-121 Kensington Central London 2006 A 818 Pte Ltd 33.3 34,450 Freehold ## High Street
Offi ce 1 Derry Street Central London 2006 A 828 Pte Ltd 33.3 2,992 Freehold ##
Residential 25 Kensington Square Central London 2006 A 838 Pte Ltd 33.3 239 Freehold ##
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ## Total book value of non-wholly owned overseas commercial properties: S$4.05 billion
93
RETAIL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
SINGAPORE Bugis Junction Victoria Street 2005 A CapitaMall Trust 29.6 39,088 99 ^
Bukit Panjang Plaza Jelebu Road 2003 A CapitaRetail BPP Trust 29.6 13,790 99 ^
Clarke Quay River Valley Road 1993 C Clarke Quay Pte Ltd 100.0 24,293 99 268,500
Funan DigitaLife Mall North Bridge Road 1984 C CapitaMall Trust 29.6 27,661 99 ^
Hougang Plaza Upper 2005 A CapitaMall Trust 29.6 6,512 99 ^ Serangoon Road
IMM Building Jurong East 2003 A CapitaMall Trust 29.6 87,368 30 + 30 ^
ION Orchard Orchard Road 2005 A Orchard Turn Retail 50.0 87,486 99 ^ Investment Pte Ltd
(GFA)
Junction 8 Bishan 1993 C CapitaMall Trust 29.6 22,921 99 ^
Jurong Jurong East 2005 A CapitaMall Trust 29.6 10,290 99 ^ Entertainment Centre
Lot One Choa Chu Kang 2003 A CapitaRetail Lot One Trust 29.6 20,158 99 ^ Shoppers’ Mall
Plaza Singapura Orchard Road 1974 C CapitaMall Trust 29.6 46,213 Freehold ^
Retail and Vista Xchange, 2007 A One Trust 100.0 24,000 60 172,568 Entertainment Hub one-north
(GFA)
Rivervale Mall Rivervale Crescent 2003 A CapitaRetail Rivervale Trust 29.6 7,577 99 ^
Sembawang Sembawang Road 2005 A CapitaMall Trust 29.6 11,955 999 ^ Shopping Centre
Tampines Mall Tampines Central 1995 C CapitaMall Trust 29.6 30,478 99 ^
The Atrium@Orchard Orchard Road 2008 A CapitaMall Trust 29.6 34,709 99 ^
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ^ Total book value of non-wholly owned Singapore retail properties: S$7.56 billion
94
Portfolio Details As at 31 December 2008
RETAIL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
CHINA Anyang Mall Beiguan District, 2006 A Anyang SZITIC Commercial 29.3 36,303 40 ^^ (under construction)
Anyang Property Co., Ltd (GFA)
Anzhen Mall Section 5 No.4 of 1994 C CapitaRetail Beijing Anzhen 26.6 43,442 29 – 37 ^^ Anzhen Xi Li, Real Estate Co., Ltd
(GFA)
Chaoyang District, Beijing
Chancheng Mall Chancheng District, 2006 A Foshan City SZITIC 29.3 91,044 30 ^^ Foshan Commercial Property Co., Ltd
(GFA) (commercial)
40
(offi ce, carpark)
Chengnanyuan Mall Donghu District, 2006 C Nanchang SZITIC 29.3 45,607 40 ^^ Nanchang Commercial Property Co., Ltd
(GFA)
Chikan Mall Chikan District, 2006 A Zhanjiang City SZITIC 29.3 47,266 40 ^^ Zhanjiang Commercial Property Co., Ltd
(GFA)
Dalian Peace Plaza Shahekou District, 2008 A Dalian Kaijin Infrastructure 30.0 166,232 40 ^^ Dalian Management Co., Ltd
(GFA)
Danshui Mall Huiyang District, 2006 A Huizhou City SZITIC 29.3 39,283 40 ^^ Huizhou Commercial Property Co., Ltd
(GFA)
Duanzhou Mall Duanzhou District, 2006 A Zhaoqing City SZITIC 29.3 44,529 40 ^^ (under construction)
Zhaoqing Commercial Property Co., Ltd (GFA)
Fucheng Mall Fucheng District, 2005 A Mianyang SZITIC Commercial 29.3 56,538 40 ^^ Mianyang Property Co., Ltd
(GFA)
Gaoxin Mall Gaoxin District, 2005 C Weifang SZITIC Commercial 29.3 48,946 40 ^^ Weifang Property Co., Ltd
(GFA)
Guangxinlian Mall Junction of Wusheng 2007 A Wuhan Guangxinlian Real 45.0 139,866 40 ^^ (under construction)
Road and Zhongshan Estate Development Co., Ltd (GFA)
Street, Wuhan
Guicheng Mall Nanhai District, 2006 C Foshan City Nanhai SZITIC 51.0 65,413 40 ^^ Foshan Commercial Property
(GFA)
Development Co., Ltd
Harbin Daoli District, 2007 A Beijing Hualian Haerbin Real 45.0 49,093 40 ^^ Aidemondun Harbin Estate Development Co., Ltd
(GFA)
(under construction)
Hengyang Mall Gaoxin District, 2007 A Hengyang SZITIC Commercial 29.3 62,231 40 ^^ (under construction)
Hengyang Property Co., Ltd (GFA)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ^^ Total book value of non-wholly owned overseas retail properties: S$4.72 billion
95
RETAIL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
CHINA (cont’d) Jiangbin Mall Licheng District, 2006 C Quanzhou SZITIC 29.3 43,096 40 ^^ Quanzhou Commercial Property Co., Ltd
(GFA)
Jingdong Mall Beijing East Road, 2008 A Jiangxi SZITIC Jingdong 29.3 25,517 40 ^^ (under construction)
Nanchang Commercial Property Co., Ltd (GFA)
Jingyang Mall Junction of East 2006 A Deyang SZITIC Commercial 29.3 44,903 40 ^^ (under construction)
Changjiang Road and Property Co., Ltd (GFA)
North Tianshan Road, Deyang
Jinniu Mall Jinniu District, 2006 C SZITIC (Chengdu) Commercial 29.3 78,483 40 ^^ Chengdu Property Co., Ltd
(GFA)
Jiulong Mall No. 31 Guangqu 2003 C CapitaRetail Beijing 26.6 49,526 40 ^^ Road Chaoyang Shuangjing Real Estate Co., Ltd
(GFA)
District, Beijing
Jiulongpo Mall Jiulongpo District, 2005 C Chongqing Zhongshan 51.0 53,302 40 ^^ Chongqing Huihua Investment Co., Ltd
(GFA)
Laiwu Mall Wenyuan Dong Dajie, 2008 A Laiwu SZITIC Commercial 29.3 47,940 40 ^^ (under construction)
Laiwu Property Co., Ltd (GFA)
Liuquan Mall Zhangdian District, 2006 A Zibo SZITIC Commercial 29.3 41,994 40 ^^ Zibo Property Co., Ltd
(GFA)
Ma’anshan Mall Junction of Yushan 2007 A MaAnShan SZITIC 29.3 40,460 40 ^^ (under construction)
Road and Kangle Commercial Property Co., Ltd (GFA)
Road, Ma’anshan
Maoming Mall Xiyue South Road, 2006 C Maoming City SZITIC 51.0 37,882 40 ^^ Maoming Commercial Property
(GFA)
Development Co., Ltd
Nanan Mall Cuiping District, 2006 A Yibin SZITIC Commercial 29.3 39,414 40 ^^ Yibin Property Co., Ltd
(GFA)
Nancheng Mall Nancheng District, 2006 A Dongguan City SZITIC 29.3 43,766 50 ^^ Dongguan Commercial Property Co., Ltd
(GFA)
People’s Parade No. 704, Zhongshan 1994 A Wuhan New Minzhong 70.0 23,283 50 ^^ Avenue, Jianghan Leyuan Co., Ltd District, Hankou, Wuhan City
Qibao Mall No. 3655, Qi Xin 2003 C CapitaRetail Dragon Mall 26.6 83,986 39 ^^ Road, Minhang (Shanghai) Co., Ltd
(GFA)
District, Shanghai
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ^^ Total book value of non-wholly owned overseas retail properties: S$4.72 billion
96
Portfolio Details As at 31 December 2008
RETAIL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
CHINA (cont’d) Rizhao Xintiandi Mall Junction of Haiqu 2007 A CapitaRetail Rizhao Haiqu 30.0 99,039 40 ^^ (under construction)
East Road and Infrastructure Management Limited (GFA)
Qingdao Road, Rizhao
Saihan Mall No. 32 E’ Er Duo 2002 C Huaxin Saihan Huhhot 26.6 41,938 35 ^^ Si Street, Saihan Real Estate Co., Ltd
(GFA)
District, Huhhot, Inner Mongolia Autonomous Region
Shangdu Mall Nangang District, 2008 A CapitaRetail Harbin Shangdu 45.0 114,870 40 ^^ (under construction)
Harbin Real Estate Co., Ltd. (GFA)
Shawan Mall Jinniu District, 2007 A CapitaRetail ChengDu 30.0 50,740 40 ^^ (under construction)
Chengdu FuQin Real Estate Co., Ltd (GFA)
Shunde Mall Shunde District, 2006 A Foshan City Shunde 29.3 72,093 40 ^^ (under construction)
Foshan SZITIC Commercial Property (GFA)
Co., Ltd
Tai’an Mall Dongyue Dajie, 2008 A Tai’an SZITIC Commercial 29.3 51,490 40 ^^ (under construction)
Tai’an Property Co., Ltd (GFA)
Taohualun Mall Heshan District, 2006 A Yiyang SZITIC Commercial 29.3 35,241 40 ^^ (under construction)
Yiyang Property Co., Ltd (GFA)
Tianfu Mall Gaoxin District, 2008 A Chengdu Huayun Jiangnan 45.0 245,000 40 ^^ (under construction)
Chengdu Real Estate Development (GFA)
Co., Ltd
Tianjinwan Mall Hexi District, Tianjin 2007 A CapitaRetail TianJin 30.0 59,305 50 ^^ ZhongHuan Infrastructure
(GFA)
Developments Limited
Wal-Mart China Futian District, 2006 A CapitaRetail Qiaoxiang 22.5 140,879 40 ^^ Headquarters Shenzhen (Shenzhen) Co., Ltd
(GFA)
Wangjing Mall No. 33 Guangshun 2006 C CapitaRetail Beijing Wangjing 26.6 82,634 38 – 48 ^^ North Street, Real Estate Co., Ltd
(GFA)
Blk 213 & 215, Chaoyang District, Beijing
Weiyang Mall Junction of 2006 A Yangzhou SZITIC Commercial 29.3 52,329 40 ^^ (under construction)
Yangzijiang North Property Co., Ltd (GFA)
Road and Siwangting Road, Yangzhou
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ^^ Total book value of non-wholly owned overseas retail properties: S$4.72 billion
97
RETAIL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
CHINA (cont’d) Xi’an Mall Junction of Nan 2008 A ShanXi Hualian Real Estate 22.1 131,300 40 ^^ (under construction)
Er Huan and Han Development Co., Ltd (GFA)
Guang Lu, Xi’an
Xiangcheng Mall Xiangcheng District, 2006 C Zhangzhou SZITIC 51.0 49,006 40 ^^ Zhangzhou Commercial Property Co., Ltd
(GFA)
Xinwu Mall No. 79 Zhongshan 2005 C Wuhu SZITIC Commercial 13.5 59,624 40 ^^ North Road, Xinwu Property Co., Ltd
(GFA)
District, Wuhu, Anhui
Xinxiang Mall Hongqi District, 2006 A Xinxiang SZITIC Commercial 29.3 38,147 40 ^^ (under construction)
Xinxiang Property Co., Ltd (GFA)
Xizhimen Mall No. 1 Xizhimenwai 2006 A CapitaRetail Beijing Xizhimen 26.6 83,074 40 – 50 ^^ Avenue, Xicheng Real Estate Co., Ltd
(GFA)
District, Beijing
Yuhuating Mall Shaoshan Road 2005 C Hunan SZITIC Commercial 51.0 75,431 40 ^^ Central, Changsha Property Development Co., Ltd
(GFA)
Yushan Mall Yushan Town, 2006 A Kunshan SZITIC Commercial 29.3 45,717 40 ^^ (under construction)
Kunshan Property Co., Ltd (GFA)
Zhengzhou Mall No. 3 Minzhu Road, 1992 C CapitaRetail Henan Zhongzhou 26.6 92,356 38 ^^ Erqi District, Real Estate Co., Ltd
(GFA)
Zhengzhou, Henan (formerly known as Beijing Hualian Plaza (Henan) Co., Ltd
Zhuzhou Mall Hetang District, 2007 A Zhuzhou SZITIC Commercial 29.3 60,268 40 ^^ (under construction)
Zhuzhou Property Co., Ltd (GFA)
INDIA Graphite India, Bangalore 2008 A Prestige Whitefi eld Investment 22.3 97,732 Freehold ^^ Bangalore & Developers Private Limited
(Super
Built-up
Area)
Mangalore Mall Mangalore 2008 A Prestige Mangalore Retail 22.3 45,916 Freehold ^^ Ventures Private Limited
(SBA)
Mysore Mall Mysore 2008 A Prestige Mysore Retail 22.3 33,417 Freehold ^^ Ventures Private Limited
(SBA)
Nagpur Mall Nagpur 2008 A Nunlet Projects Private Limited 29.5 124,611 Freehold ^^
(SBA)
Udaipur Udaipur 2007 A Flicker Projects Private Limited 31.8 35,720 99 ^^ Celebration Mall
(SBA)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ^^ Total book value of non-wholly owned overseas retail properties: S$4.72 billion
98
Portfolio Details As at 31 December 2008
RETAIL Total Book Total Net Value as at Effective Lettable Tenure 31 Dec 08 Name Location Year * Holding Company Stake (%) Area (sqm) (Years) S$’000
JAPAN COOP Kobe Nishinomiya-shi, 2007 A CapitaRetail CK Tokutei 26.3 7,355 Freehold ^^ Nishinomiya Higashi Hyogo Mokuteki Kaisha
Ito-Yokado Chitose Chitose, Hokkaido 2005 A CapitaRetail IYC Tokutei 26.3 26,338 Freehold ^^ Mokuteki Kaisha
Ito-Yokado Eniwa Eniwa, Hokkaido 2006 A CapitaRetail IYE Tokutei 26.3 12,469 Freehold ^^ Mokuteki Kaisha
Izumiya Hirakata Hirakata-shi, Osaka 2005 A CapitaRetail IH Tokutei 26.3 24,097 Freehold ^^ Mokuteki Kaisha
(GFA)
La Park Mizue Mizue, Edogawa-ku, 2003 A CapitaRetail LPM Tokutei 26.3 18,380 Freehold ^^ Tokyo Mokuteki Kaisha
Narashino SC Funabashi-shi, Chiba 2007 A CapitaRetail NS Tokutei 26.3 10,648 Freehold ^^ Mokuteki Kaisha
ViVit SQUARE Funabashi-shi, Chiba 2005 A CapitaRetail VS Tokutei 26.3 48,952 Freehold ^^ Mokuteki Kaisha
MALAYSIA Gurney Plaza Persiaran Gurney, 2007 A CapitaRetail Gurney Sdn Bhd 100.0 65,511 Freehold 335,862 Penang
Mines Shopping Fair Jalan Dulang, 2007 A Mutual Streams Sdn Bhd 100.0 66,280 99 212,989 Kuala Lumpur
Sungei Wang Plaza Jalan Sultan Ismail, 2008 A Vast Winners Sdn Bhd 100.0 42,077 Freehold 271,193 Strata Parcels@ Kuala Lumpur
* A: Year of Acquisition S: Start of Construction C: Completion of Construction ^^ Total book value of non-wholly owned overseas retail properties: S$4.72 billion @ Sungei Wang Plaza Strata Parcels comprise the identifi ed strata parcels within Sungei Wang Plaza, and consist of retail space of
approximately 61.9% of the aggregate surveyed retail fl oor area of Sungei Wang Plaza and 1,298 car parking bays
99
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
SINGAPORE Serviced Residence Ascott Singapore Finlayson Green 2008 C Ascott Singapore Raffl es 100.0 146 999 Raffl es Place Place Pte Ltd
Somerset Cairnhill Road 2006 A Ascott Residence Trust 47.0 146 99 Grand Cairnhill, Singapore
Somerset Liang Court, River Valley Road 2006 A Ascott Residence Trust 47.0 195 97 years Singapore & 30 days
Citadines Singapore Wilkie Road 2007 A Citadines Singapore 100.0 154 99 Mount Sophia Mount Sophia Pte Ltd
AUSTRALIA Serviced Residence Somerset Little Bourke Street, 2007 A Ascott Residence Trust 47.0 43 Freehold Gordon Heights, Melbourne Melbourne
Somerset St Georges Terrace, 2008 A Ascott Residence Trust 47.0 84 Freehold St Georges Terrace, Perth Perth
Citadines Melbourne Bourke Street, 2008 A Citadines Melbourne on 100.0 398 Freehold on Bourke Melbourne Bourke Pty Ltd (under construction)
BAHRAIN Serviced Residence Ascott Bahrain Bahrain Bay, 2007 S Bahrain Bay Integrated 37.1 200 Freehold (under construction)
Manama Development Limited
BELGIUM Serviced Residence Citadines Bruxelles Quai au Bois à Brûler, 2002 A FBM Belgique 100.0 169 Freehold Sainte-Catherine Brussels
Citadines Bruxelles Avenue de la 2002 A Immobiliere Toisor - Belgium 65.0 153 Freehold Toison d’Or Toison d’Or, Brussels
CHINA Serviced Residence Ascott Beijing Chaoyang District, 2006 A Ascott Residence Trust 47.0 310 70 Beijing
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
100
Portfolio Details As at 31 December 2008
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
CHINA (cont’d) Ascott Guangzhou Tianhe District, 2008 C Guangzhou Hai Yi Property 100.0 208 70 Guangzhou Development Co Ltd
Ascott Dongcheng District, 2008 C Beijing Xin Jie Real Estate 50.0 175 50 Raffl es City Beijing Beijing Development Co., Ltd
Ascott Pudong Avenue, 2001 C Hua Xin Residences 100.0% 248 70 Shanghai Pudong Shanghai Pte Ltd of 124 units
Somerset Garden City, Nanshan District, 2008 A Ascott Serviced Residence 33.0 147 70 Shenzhen Shenzhen (China) Fund (under construction)
Somerset Grand Chaoyang District, 2006 A Ascott Residence Trust 47.0% 221 70 Fortune Garden, Beijing of 81 units Beijing
Somerset Heping, Taiyuan Street 2008 A Ascott Serviced Residence 33.0 333 30 Shenyang Commercial Zone, (China) Fund (under construction)
Shenyang
Somerset JieFangBei, Yuzhong District, 2008 A Ascott Serviced Residence 33.0 157 40 Chongqing Chongqing (China) Fund (under construction)
Somerset Heping District, Tianjin 2006 A Ascott Residence Trust 47.0 185 70 Olympic Tower, Tianjin
Somerset Xu Hui, Xu Hui District, 2006 A Ascott Residence Trust 47.0 167 70 Shanghai Shanghai
Somerset Youyi, Hexi District, Tianjin 2007 A Ascott Serviced Residence 33.0 250 50 Tianjin (China) Fund (under construction)
Somerset Haidian District, Beijing 2006 C Somerset Xin Ya (Beijing) 100.0 154 70 ZhongGuanCun, Property Leasing Co Ltd
(General)
Beijing 40
(Third fl oor)
50
(Clubhouse)
Citadines Tsim Sha Tsui District, 2006 C Citadines Ashley TST 100.0 36 150 Hongkong Ashley Hong Kong Management (HK) Ltd
Citadines Jinqiao Export 2007 A Ascott Serviced Residence 33.0 196 70 Shanghai Biyun Processing Zone, (China) Fund Shanghai
Citadines Suzhou Lejia Suzhou Industrial 2006 A Suzhou Jiale Real 30.0 250 70 (under construction)
Park, Suzhou Estate Co Ltd
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
101
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
CHINA (cont’d) Citadines Suzhou Industrial 2007 C Suzhou Chongrui Xin Shi Ji 100.0 167 70 Suzhou Xinghai Park, Suzhou Real Estate Co Ltd
Citadines Zhuankou District, 2008 A Ascott Serviced Residence 33.0 287 40 Wuhan Zhuankou Wuhan (China) Fund (under construction)
Citadines Xi’an Central Beilin District, Xi’an 2007 C Citadines Xi’an Central 100.0 162 70 Hotel Co., Ltd
(Residential)
50
(Commercial)
Citadines Xi’an Gaoxin Hi-Tech Development 2008 A Ascott Serviced Residence 33.0 270 50 (under construction)
Zone, Xi’an (China) Fund
FRANCE Serviced Residence Citadines Rue le Poussin, Cannes 2002 A SCI Cannes Carnot 100.0 58 Freehold Cannes Carnot
(Finance Lease)
Citadines Grenoble Rue de Strasbourg, 2002 A SA Place de Metz-Greno 100.0% 107 Freehold Grenoble of 106 units
Citadines Lille Centre Avenue Willy Brant- 2002 A SA Residence des 2 100.0 101 Freehold Euralille, Lille
Citadines Rue Thomassin, Lyon 2002 A SCI Residence Lyon 100.0 116 Freehold Lyon Presqu’île
Citadines Rue de Rouet, 2002 A SCI Sodi 100.0 97 Freehold Marseille Castellane Marseille
(Finance Lease)
Citadines Marseille Boulevard de Louvain, 2002 A SCI Marseille 100.0 77 Freehold Prado Chanot Marseille
(Finance Lease)
Citadines Boulevard d’Antigone, 2002 A SCI Montpellier 100.0 125 Freehold Montpellier Antigone Montpellier
(Finance Lease)
Citadines Rue Esquirol, 2002 A SCI Austerlitz 100.0 49 Freehold Paris Austerlitz Paris
(Finance Lease)
Citadines Paris Rue Didot, Paris 2002 A ORIVILLE SAS 100.0 80 Freehold Didot Alésia
(Finance Lease)
Citadines Rue des Innocents, 2002 A ORIVILLE SAS 100.0 189 Freehold Paris Les Halles Paris
Citadines Paris Louvre Rue de Richelieu, Paris 2008 A ORIVILLE SAS 100.0 51 Freehold
Citadines Paris Avenue du Maine, Paris 2002 A SCI Montparnasse 100.0 67 Freehold Maine-Montparnasse
(Finance Lease)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
102
Portfolio Details As at 31 December 2008
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
FRANCE (cont’d) Citadines Avenue Rachel, Paris 2002 A SNC Rachel 100.0% 113 Freehold Paris Montmartre of 111 units
Citadines Paris Place d’Italie, Paris 2002 A SCI Italie 100.0 169 Freehold Place d’Italie
Citadines Paris Boulevard de Grenelle, 2002 A SCI Residence Grenelle 100.0 104 Freehold Tour Eiffel Paris
Citadines Rue Saint-Didier, Paris 2002 A SARL REO St Didier 100.0 97 Freehold Paris Trocadéro
Citadines Paris Avenue Parmentier, 2002 A SCI Republique 100.0 76 Freehold Voltaire République Paris
(Finance Lease)
GERMANY Serviced Residence Citadines Berlin Olivaer Platz, Berlin 2002 A Citador Olivaer Platz GmbH 100.0 118 Freehold Olivaer Platz & Co KG
Citadines Arnulfstrasse, 2007 A Citadines Arnulfpark Munich 100.0 146 Freehold Munich Arnulfpark Munich (Netherlands) BV (under construction)
INDIA Serviced Residence Somerset Greenways, Sathyadev Avenue, 2006 A Rattha Somerset Greenways 40.0 210 Freehold Chennai Chennai (Chennai) Pte Ltd (under construction)
Somerset Whitefi eld Whitefi eld, Bangalore 2006 A Rattha Somerset Whitefi eld 40.0 230 Freehold Bangalore (Bangalore) Pte Ltd (under construction)
Citadines Ahmedabad Central Business 2008 A Rattha Citadines Ahmedabad 40.0 220 Freehold Parimal Garden District, Ahmedabad ApartHotel Pte Ltd (under construction)
Citadines Mount Poonamelle 2006 A Rattha Citadines Boulevard 40.0 220 Freehold Chennai Boulevard Road, Chennai (Chennai) Pte Ltd (under construction)
Citadines Chennai Old Mahabalipuram 2007 A Rattha Citadines (OMR) 40.0 300 Freehold OMR Gateway Road, Chennai ApartHotel Pte Ltd (under construction)
Citadines Hyderabad Hitec City, Hyderabad 2007 A Rattha Citadines (Hitec City) 49.0 218 Freehold Hitec City ApartHotel Pte Ltd (under construction)
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
103
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
INDONESIA Serviced Residence Ascott Jakarta Jalan Kebon Kacang 2006 A Ascott Residence Trust 46.5 198 20 Raya, Jakarta
Somerset Grand Citra, Jalan Prof Dr Satrio 2006 A Ascott Residence Trust 26.8 203 30 Jakarta Kav 1, Jakarta
Corporate Leasing Country Woods, Jalan WR Supratman, 2006 A Ascott Residence Trust 47.0 251 20 Jakarta Jakarta
JAPAN Serviced Residence Somerset Azabu East, Minato-ku, Tokyo 2007 A Ascott Residence Trust 47.0 79 Freehold Tokyo
Somerset Roppongi, Minato-ku, Tokyo 2007 A Ascott Residence Trust 47.0 64 Freehold Tokyo
Citadines Kyoto Gojo-ku, Kyoto 2007 A Citadines Kyoto Gojo TMK 40.0 126 Freehold Karasuma-Gojo (under construction)
Citadines Shinjuku-ku, Tokyo 2007 A Citadines Shinjuku TMK 40.0 160 Freehold Tokyo Shinjuku
Corporate Leasing Asyl Court Nakano-ku, Tokyo 2007 A Ascott Residence Trust 47.0 62 Freehold Nakano Sakaue
Gala Hachimanyama I Suginami-ku, Tokyo 2007 A Ascott Residence Trust 47.0 76 Freehold
Gala Hachimanyama II Suginami-ku, Tokyo 2007 A Ascott Residence Trust 47.0 16 Freehold
Infi ni Garden Hamao District, Fukuoka 2008 C Infi ni Garden TMK 30.0 395 Freehold
Joy City Koishikawa Bunkyo-ku, Tokyo 2007 A Ascott Residence Trust 47.0 36 Freehold
Joy City Kuramae Taito-ku, Tokyo 2007 A Ascott Residence Trust 47.0 60 Freehold
Zesty Akebonobashi Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust 47.0 12 Freehold
Zesty Gotokuji Setagaya-ku, Tokyo 2007 A Ascott Residence Trust 47.0 15 Freehold
Zesty Higashi Shinjuku Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust 47.0 19 Freehold
Zesty Kagurazaka I Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust 47.0 20 Freehold
Zesty Kagurazaka II Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust 47.0 20 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
104
Portfolio Details As at 31 December 2008
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
JAPAN (cont’d) Zesty Kasugacho Nerima-ku, Tokyo 2007 A Ascott Residence Trust 47.0 32 Freehold
Zesty Koishikawa Bunkyo-ku, Tokyo 2007 A Ascott Residence Trust 47.0 15 Freehold
Zesty Komazawa Meguro-ku, Tokyo 2007 A Ascott Residence Trust 47.0 29 Freehold University II
Zesty Nishi Shinjuku III Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust 47.0 29 Freehold
Zesty Sakura Setagaya-ku, Tokyo 2007 A Ascott Residence Trust 47.0 17 Freehold Shinmachi
Zesty Shin Ekoda Nerima-ku, Tokyo 2007 A Ascott Residence Trust 47.0 18 Freehold
Zesty Shoin Jinja Setagaya-ku, Tokyo 2007 A Ascott Residence Trust 47.0 16 Freehold
Zesty Shoin Jinja II Setagaya-ku, Tokyo 2007 A Ascott Residence Trust 47.0 17 Freehold
MALAYSIA Serviced Residence Ascott Kuala Lumpur Jalan Pinang, 1999 C Amanah Scotts Properties 50.0 221 Freehold Kuala Lumpur (KL) Sdn Bhd
Somerset Ampang, Ampang District, 2007 A Somerset Ampang 100.0 208 Freehold Kuala Lumpur Kuala Lumpur (Malaysia) Sdn Bhd (under construction)
Somerset Seri Lorong Ceylon, 2006 C Liang Court (Malaysia) 100.0% 96 Freehold Bukit Ceylon, Kuala Lumpur Sdn Bhd of 48 units Kuala Lumpur
PHILIPPINES Serviced Residence Ascott Makati Ayala Center, Manila 2006 A Ascott Residence Trust 47.0 306 Lease expiring 6 January 2044, renewable for another 25 years subject to the mutual agreement of both parties
Somerset Millennium, Legaspi Village, Manila 2006 A Ascott Residence Trust 47.0% 138 Freehold Makati of 69 units
Somerset Salcedo, Salcedo Village, Manila 2006 A Ascott Residence Trust 47.0% 150 Freehold Makati of 71 units
SPAIN Serviced Residence Citadines Ramblas District, 2002 A Eurimeg Espana SA - Spain 65.0 131 Freehold Barcelona Ramblas Barcelona
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
105
SERVICED RESIDENCES
Effective Total No. Tenure Name Location Year * Holding Company Stake (%) of Units (Years)
THAILAND Serviced Residence Ascott South Sathorn Road, 2004 C Sathorn Supsin Co Ltd 40.0 177 50 + 10 Bangkok Sathorn Bangkok
Citadines Bangkok Sukhumvit 8, 2008 C Boutique Boulevard Ltd 49.0 130 Freehold Sukhumvit 8 Bangkok
Citadines Bangkok Sukhumvit 11, 2008 C Boutique Realty Ltd 49.0 127 Freehold Sukhumvit 11 Bangkok
Citadines Bangkok Sukhumvit 16, 2007 C Boutique Land Ltd 49.0 79 Freehold Sukhumvit 16 Bangkok
Citadines Bangkok Sukhumvit 23, 2008 C Boutique Assets Ltd 49.0 138 Freehold Sukhumvit 23 Bangkok
UNITED KINGDOM Serviced Residence Citadines Goswell Road, London 2002 A FBM London Ltd 100.0 129 Freehold London Barbican
Citadines London High Holborn, London 2008 A Citadines Holborn CI Limited 100.0 192 Freehold Holborn-Covent Garden
Citadines London Gloucester Road, 2002 A Citagrep Ltd 65.0 92 Freehold South Kensington London
Citadines London Northumberland Avenue, 2002 A FBM London Ltd 100.0 187 Freehold Trafalgar Square London
VIETNAM Serviced Residence Somerset Nguyen Thi Minh 2007 A Ascott Residence Trust 31.5 172 48 Chancellor Court, Khai Street, Ho Chi Minh City Ho Chi Minh City
Somerset Grand Hanoi Hai Ba Trung 2006 A Ascott Residence Trust 35.7 185 45 Street, Hanoi
Somerset Nguyen Binh Khiem 2006 A Ascott Residence Trust 32.4 165 45 Ho Chi Minh City Street, Ho Chi Minh City
Somerset Hoa Binh, Hoang Quoc Viet 2008 C Somerset Hoa Binh JV Co Ltd 90.0 206 40 Hanoi Street, Hanoi
Somerset West Lake, Thuy Khue Road, Hanoi 1994 C Westlake Development Co Ltd 32.9 90 49 Hanoi
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
106
Portfolio Analysis
Property Value by Region (S$m) Property Value by Strategic Business Unit (S$m)
• CapitaLand Retail • CapitaLand Commercial • CapitaLand China • Ascott & Ascott Residence Trust • CapitaLand Residential Singapore • Australand • Integrated Leisure, Entertainment & Conventions
As at 31 December 2008, the
Group’s property portfolio had a total
attributable value of S$20.2 billion
and comprised development
properties, investment properties
and serviced residences owned by
subsidiaries, associates and jointly
controlled entities.
In the following analysis, the values
attributable to the CapitaLand Group
are used. Investment properties are
stated at their market values while
development properties are stated at
book costs (net of any provisions
made). Properties treated as fi xed
assets are stated at book cost.
9,237 5,698
5,237
3,237
3,662
2,565
2,630
2,534
1,012 490
2,043 1,973
2008
Property Value by Sector (S$m)
• Residential • Mixed Development • Retail • Serviced Residence • Offi ce • Industrial • Others
4,588
4,133
4,341
2,505
2,499
769 1,324
2008
2008
• Singapore • China (including Hong Kong & Macau) • Asia/Gulf Cooperation Council countries (excluding Singapore & China)
• Australia & New Zealand • Europe
107
5-Year Financial Summary
2004 2005 2006 2007 2008
(A) INCOME STATEMENTS (S$ million) Revenue by SBUs
CapitaLand Residential Limited (1) 2,407.4 3,036.8 2,356.0 CapitaLand Residential Singapore 548.7 400.2 CapitaLand China Holdings 985.3 330.3 CapitaLand Commercial 259.5 122.2 139.2 165.7 227.9 CapitaLand Retail 84.3 50.3 94.6 124.2 206.7 Ascott 238.9 444.1 478.1 459.5 441.8 CapitaLand Financial 42.3 70.6 101.2 119.2 182.2 Australand 1,406.7 984.3 Others 146.7 121.6 (21.4) (16.6) (21.1)
Total 3,179.1 3,845.6 3,147.7 3,792.7 2,752.3
Earnings Before Interest and Tax (EBIT) by SBUs CapitaLand Residential Limited (1) 567.8 492.4 692.2 CapitaLand Residential Singapore 308.6 175.0 CapitaLand China Holdings 403.4 883.4 CapitaLand Commercial 45.2 24.7 372.4 1,876.7 395.6 CapitaLand Retail 55.4 138.4 221.1 297.9 298.6 Ascott 66.0 121.4 202.5 337.2 132.2 CapitaLand Financial 29.5 53.3 61.6 69.7 90.4 Australand 470.0 169.6 Others 48.5 30.1 264.3 60.5 68.7
Total 812.4 860.3 1,814.1 3,824.0 2,213.5
Profi t attributable to Shareholders 305.7 750.5 1,012.7 2,759.3 1,260.1
(B) BALANCE SHEETS (S$ million) Investment Properties and Properties Under Development 4,401.6 6,548.9 5,668.3 6,777.4 4,848.9 Development Properties for Sale 4,283.0 3,542.5 3,622.7 3,540.8 3,347.2 Associates, Jointly-Controlled Entities and Partnership 3,755.9 3,928.7 4,749.9 6,450.7 7,864.6 Cash and Cash Equivalents 1,917.7 2,111.3 2,684.9 4,356.0 4,228.4 Other Assets 2,877.6 2,051.7 3,866.4 4,716.4 4,794.5
Total Assets 17,235.8 18,183.1 20,592.2 25,841.3 25,083.6
Equity attributable to equity holders of the Company 5,355.8 6,657.7 7,367.7 9,940.9 10,681.7 Total Borrowings 7,196.8 6,611.9 8,129.8 9,916.1 9,829.3 Minority Interests and Other Liabilities 4,683.2 4,913.5 5,094.7 5,984.3 4,572.6
Total Equities & Liabilities 17,235.8 18,183.1 20,592.2 25,841.3 25,083.6
(C) FINANCIAL RATIOS Earnings per share (cents) 12.1 28.3 36.6 98.6 44.7
Return on Shareholders Funds (%) 5.4 12.5 14.5 31.9 12.2
Return on Total Assets (%) 4.2 8.2 8.7 15.7 7.9
Dividend First & fi nal dividend per share (cents) 5.0 6.0 7.0 8.0 5.5 Special dividend per share (cents) 1.0 12.0 5.0 7.0 1.5
Total dividend per share (cents) 6.0 18.0 12.0 15.0 7.0
Dividend cover (times) 2.6 1.9 3.2 6.5 4.2
Net Tangible Assets per share (S$) 2.10 2.41 2.64 3.53 3.57
Debt Equity Ratio (net of cash) (times) 0.71 0.50 0.58 0.47 0.47
Interest Cover (times) 4.59 9.19 9.73 13.64 5.50
Note: For changes in accounting policies, adoption of new and/or revised accounting standards, as well as changes in the presentation of fi nancial statements for the respective fi nancial year under
review, only the comparative fi gures for the previous year were restated to conform with the requirements arising from the said changes or adoption.
(1) On 1 April 2008, CapitaLand Residential Limited SBU was reorganised into 3 main components, namely, CapitaLand Residential Singapore, CapitaLand China Holdings and CapitaLand’s holding in Australand. Accordingly, the segment reporting was based on the new organisation structure with effect from FY2008 and the comparative for previous year was restated.
108
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109
Statutory Accounts
Contents
Directors’ Report ........................................................ 110 Statement by Directors .............................................. 123 Independent Auditors’ Report to the Members of CapitaLand Limited ........................................... 124 Balance Sheets .......................................................... 126 Income Statements .................................................... 127 Statements of Changes in Equity ............................... 128 Consolidated Statement of Cash Flows ..................... 131 Notes to the Financial Statements ............................. 133
110
Directors’ Report
We are pleased to submit this annual report to the members of the Company, together with the audited fi nancial statements for the
fi nancial year ended 31 December 2008.
DIRECTORS
The directors in offi ce at the date of this report are as follows:
Dr Hu Tsu Tau
Peter Seah Lim Huat
Liew Mun Leong
Lim Chin Beng
Jackson Peter Tai
Richard Edward Hale
Dr Victor Fung Kwok King
James Koh Cher Siang
Arfat Pannir Selvam
Professor Kenneth Stuart Courtis
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES
Except as disclosed under the “Directors’ Interests in Shares or Debentures” and “Share Plans” sections of this report, neither at the
end of nor at any time during the fi nancial year was the Company a party to any arrangement whose objects are, or one of whose
objects is, to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the
Company or any other body corporate.
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES
Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares, debentures or
options of the Company or of related corporations either at the beginning or at the end of the fi nancial year.
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50, particulars of
interests of directors who held offi ce at the end of the fi nancial year in shares, debentures, options and contingent awards in the
Company and its related corporation are as follows: Holdings in the name of the director, spouse and/or infant children
At beginning At end of the year of the year
The Company
Ordinary shares
Dr Hu Tsu Tau – 18,108
Hsuan Owyang* 10,000 113,907
Peter Seah Lim Huat 96,800 107,363
Liew Mun Leong 1,073,680 1,032,026
Lim Chin Beng 357,000 410,581
Jackson Peter Tai 150,000 369,363
Richard Edward Hale 468,170 434,769
James Koh Cher Siang 6,250 24,340
Arfat Pannir Selvam – 33,581
Professor Kenneth Stuart Courtis 80,000 87,545
111
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d) Holdings in the name of the director, spouse and/or infant children
At beginning At end of the year of the year
The Company (cont’d) Options to subscribe for ordinary shares exercisable from 01/03/2004 to 28/02/2008 at an exercise price of $0.82 per share Jackson Peter Tai 118,800 –
Options to subscribe for ordinary shares exercisable from 28/02/2005 to 27/02/2009 at an exercise price of $1.15 per share Jackson Peter Tai 90,000 –
Options to subscribe for ordinary shares exercisable from 28/02/2005 to 27/02/2014 at an exercise price of $1.02 per share Liew Mun Leong 200,000 –
Options to subscribe for ordinary shares exercisable from 26/02/2006 to 25/02/2010 at an exercise price of $2.26 per share Jackson Peter Tai 90,000 90,000
Options to subscribe for ordinary shares exercisable from 26/02/2006 to 25/02/2015 at an exercise price of $2.25 per share Liew Mun Leong 400,000 200,000
Options to subscribe for ordinary shares exercisable from 25/02/2007 to 24/02/2011 at an exercise price of $3.75 per share Dr Hu Tsu Tau 120,000 120,000 Hsuan Owyang* 77,500 – Peter Seah Lim Huat 45,000 45,000 Lim Chin Beng 40,000 – Jackson Peter Tai 70,000 70,000 Richard Edward Hale 95,000 95,000 James Koh Cher Siang 100,000 100,000 Arfat Pannir Selvam 80,000 60,000
Options to subscribe for ordinary shares exercisable from 25/02/2007 to 24/02/2016 at an exercise price of $3.73 per share Liew Mun Leong 600,000 400,000
Contingent award of Performance shares1 to be delivered after 2007 Liew Mun Leong (417,933 shares) 0 to 835,8663 –¶
¶ During the fi nancial year, 835,866 shares were released under the 2005 award to Liew Mun Leong.
Contingent award of Performance shares1 to be delivered after 2008 Liew Mun Leong (414,754 shares) 0 to 829,5083 0 to 829,5083
Contingent award of Performance shares1 to be delivered after 2009 Liew Mun Leong (301,800 shares) 0 to 603,6003 0 to 603,6003
112
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d) Holdings in the name of the director, spouse and/or infant children
At beginning At end of the year of the year
The Company (cont’d)
Contingent award of Performance shares1 to be delivered after 2010
Liew Mun Leong (300,000 shares) – 0 to 600,0003
Contingent award of Restricted shares2 to be delivered after 2007
Dr Hu Tsu Tau (24,144 shares) 0 to 36,2164 18,1085
Hsuan Owyang* (35,210 shares) 0 to 52,8154 26,4085
Peter Seah Lim Huat (14,084 shares) 0 to 21,1264 10,5635
Liew Mun Leong (160,960 shares) 0 to 241,4404 160,9606
Lim Chin Beng (18,108 shares) 0 to 27,1624 13,5815
Jackson Peter Tai (14,084 shares) 0 to 21,1264 10,5635
Richard Edward Hale (22,132 shares) 0 to 33,1984 16,5995
James Koh Cher Siang (20,120 shares) 0 to 30,1804 15,0905
Arfat Pannir Selvam (18,108 shares) 0 to 27,1624 13,5815
Professor Kenneth Stuart Courtis (10,060 shares) 0 to 15,0904 7,5455
Contingent award of Restricted shares2 to be delivered after 2008
Dr Hu Tsu Tau (24,000 shares) – 0 to 36,0004
Hsuan Owyang* (35,000 shares) – 0 to 52,5004
Peter Seah Lim Huat (14,000 shares) – 0 to 21,0004
Liew Mun Leong (160,000 shares) – 0 to 240,0004
Lim Chin Beng (20,557 shares) – 0 to 30,8364
Jackson Peter Tai (14,000 shares) – 0 to 21,0004
Richard Edward Hale (22,000 shares) – 0 to 33,0004
James Koh Cher Siang (20,000 shares) – 0 to 30,0004
Arfat Pannir Selvam (18,000 shares) – 0 to 27,0004
Professor Kenneth Stuart Courtis (10,000 shares) – 0 to 15,0004
Related Corporation
The Ascott Group Limited
Ordinary shares7
Peter Seah Lim Huat 74,000 –
Liew Mun Leong 452,500 –
Lim Chin Beng 925,000 –
Richard Edward Hale 830,000 –
Options to subscribe for ordinary shares exercisable
from 05/05/2003 to 04/05/2012 at an exercise price of $0.176 per share7
Liew Mun Leong 30,000 –
Options to subscribe for ordinary shares exercisable
from 10/05/2004 to 09/05/2013 at an exercise price of $0.144 per share7
Liew Mun Leong 60,000 –
Directors’ Report
113
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d) Holdings in the name of the director, spouse and/or infant children
At beginning At end of the year of the year
Related Corporation (cont’d)
The Ascott Group Limited (cont’d)
Options to subscribe for ordinary shares exercisable
from 01/03/2005 to 28/02/2014 at an exercise price of $0.236 per share7
Liew Mun Leong 97,500 –
Options to subscribe for ordinary shares exercisable
from 05/03/2006 to 04/03/2015 at an exercise price of $0.300 per share7
Liew Mun Leong 130,000 –
Options to subscribe for ordinary shares exercisable
from 25/02/2007 to 24/02/2011 at an exercise price of $0.631 per share7
Richard Edward Hale 80,000 –
Lim Chin Beng 75,000 –
Options to subscribe for ordinary shares exercisable
from 25/02/2007 to 24/02/2016 at an exercise price of $0.627 per share7
Liew Mun Leong 200,000 –
Contingent award of Restricted shares2 to be delivered after 2007 7
Liew Mun Leong (24,660 shares) 0 to 36,9904 –
Lim Chin Beng (20,550 shares) 0 to 30,8254 –
Richard Edward Hale (20,550 shares) 0 to 30,8254 –
Footnotes:
1 Performance shares are shares under contingent awards pursuant to the CapitaLand Performance Share Plan.
2 Restricted shares are shares under contingent awards pursuant to the CapitaLand Restricted Stock Plan and the Ascott Restricted Share Plan.
3 The fi nal number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
4 The fi nal number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of two to three years. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award.
5 Being the unvested half of the award.
6 Being the unvested two-thirds of the award.
7 The Ascott Group Limited (“Ascott”) was delisted from the Offi cial List of the Singapore Exchange Securities Trading Limited on 29 April 2008 following the voluntary unconditional cash offer announced on 8 January 2008 (the “Offer”) and subsequent compulsory acquisition of shares in Ascott (“Ascott Shares”) by Somerset Capital Pte Ltd (the “Offeror”), a wholly-owned subsidiary of the Company.
All outstanding options to subscribe for Ascott Shares under the Ascott Share Option Plan were cancelled pursuant to acceptances by holders of such options of the proposal made by the Offeror to them in connection with the Offer.
Pursuant to Rule 7.5 of the Ascott Restricted Share Plan (“RSP”), outstanding awards under the RSP were released in the form of cash. Outstanding RSP awards of Ascott directors were settled in cash pursuant to Rule 6.2 of the RSP after the re-constitution of the Ascott board following the delisting of Ascott.
* Mr Hsuan Owyang resigned as a director of the Company on 1 January 2009.
There was no change in any of the above-mentioned directors’ interests in the Company and its related corporation between the end
of the fi nancial year and 21 January 2009.
114
DIRECTORS’ INTERESTS IN CONTRACTS
During the fi nancial year, the directors’ interests in contracts relate to:
(i) subscription by Mr Liew Mun Leong of $2.0 million 3-year fi xed rate notes with coupon rate of 3.1% to 4.7% per annum issued
by an indirect subsidiary of the Company under a multicurrency medium term notes programme;
(ii) grant of pro-rata share of shareholder’s loan of $1.8 million to LF Industrial Ltd, an investee company of the Group in which Dr
Victor Fung Kwok King has an interest; and
(iii) professional advisory fees of $136,800 paid or payable to Professor Kenneth Stuart Courtis.
Save as disclosed above, since the end of the last fi nancial year, no other director has received or become entitled to receive a benefi t
by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which he is a member or with
a company in which he has a substantial fi nancial interest.
Directors’ emoluments are disclosed in “Other Information”.
SHARE PLANS
(a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan
The CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan
(collectively referred to as the “Share Plans”) were approved and adopted by the members of the Company at an Extraordinary
General Meeting held on 16 November 2000.
The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee
responsible for the administration of the Share Plans. The ERCC comprises the following members:
Mr Lim Chin Beng (Chairman)
Mr Hsuan Owyang (resigned on 1 January 2009)
Mr Peter Seah Lim Huat
The Share Option Plan has been the basic share incentive scheme that was widely applied across the Group. In 2007, the Share
Option Plan was replaced by the Restricted Stock Plan as the long term incentive scheme for employees across the Group,
though the Share Option Plan remains an approved Share Incentive Scheme. The Performance Share Plan continues to apply
only to key executives. The contingent awards granted under the Performance Share Plan and the Restricted Stock Plan are
only released or vested after achievement of pre-determined targets and/or after the satisfactory completion of time-based
service conditions.
Under the Share Option Plan, options are granted to eligible participants exercisable during a certain period and at a certain
price set out below.
Under the Performance Share Plan, awards are granted to eligible participants. Awards represent the right of a participant to
receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the Company achieving
prescribed performance target(s). Awards are released once the ERCC is satisfi ed that the prescribed target(s) have been
achieved. There are no vesting periods beyond the performance achievement periods.
Under the Restricted Stock Plan, awards granted to eligible participants vest only after the satisfactory completion of time-
based service conditions or where the award is performance-related, after a further period of service beyond the performance
target completion date (performance-based restricted awards). No minimum vesting periods are prescribed under the Restricted
Stock Plan. Performance-based restricted awards differ from awards granted under the Performance Share Plan in that an
extended vesting period is imposed beyond the performance target completion date.
Directors’ Report
115
SHARE PLANS (cont’d)
(a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan (cont’d)
The principal terms of the Share Plans are:
• Plans Size and Duration
The aggregate number of new shares over which the ERCC may grant pursuant to the Share Option Plan, when aggregated
with the number of new shares to be issued pursuant to the exercise of options and/or such number of fully paid shares in
the Company as may be required to be issued pursuant to the vesting of awards under the Performance Share Plan and
the Restricted Stock Plan, shall not exceed 15% of the total number of issued shares in the capital of the Company on the
day preceding the relevant date of grant.
The Share Plans shall continue to be in force at the discretion of the ERCC, subject to a maximum period of 10 years
commencing on 16 November 2000, provided always that the Share Plans may continue beyond the above stipulated
period with the approval of shareholders in general meeting and of any relevant authorities which may then be required.
Notwithstanding the expiry or termination of the Share Plans, any outstanding options held by and/or contingent awards
made to participants prior to such expiry or termination will continue to remain valid.
• Participants of the Share Plans
In respect of the Share Option Plan, the following persons shall be eligible to participate:
– Group Executives who have attained the age of 21 years and hold such rank as may be designated by the ERCC
from time to time;
– Non-Executive Directors who, in the opinion of the ERCC, have contributed or will contribute to the success of the
Group; and
– Executives of Parent Group and Executives of Associated Company (over which the Company has operational
control) who have attained the age of 21 years and hold such rank as may be designated by the ERCC from time to
time and who, in the opinion of the ERCC, have contributed or will contribute to the success of the Group.
In respect of the Performance Share Plan and Restricted Stock Plan, the following persons shall be eligible to participate:
– Group Executives who have attained the age of 21 years and hold such rank as may be designated by the ERCC
from time to time;
– Non-Executive Directors (other than Non-Executive Directors of Parent Group) who, in the opinion of the ERCC, have
contributed or will contribute to the success of the Group; and
– Executives of Associated Company who have attained the age of 21 years and hold such rank as may be designated
by the ERCC from time to time and who, in the opinion of the ERCC, have contributed or will contribute to the
success of the Group.
Persons who are the Company’s controlling shareholders or their associates as defi ned in the Listing Manual of the
Singapore Exchange Securities Trading Limited (“SGX-ST”) are not eligible to participate in all the Share Plans.
• Maximum Entitlements
The Share Plans provide that the number of options or contingent awards to be granted be discretionary. However, under
the Share Option Plan, the aggregate number of shares which may be offered by way of grant of options to Parent Group
Executives and Non-Executive Directors of Parent Group shall not exceed 20% of the total number of shares available
under the Share Option Plan.
116
SHARE PLANS (cont’d)
(a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan (cont’d)
• Exercise Period
Under the Share Option Plan, options with acquisition prices which are equal to, or higher than, a price equal to the
volume-weighted average price for the Company shares on the SGX-ST over the three consecutive Trading Days
immediately preceding the date of grant of that option (the “Market Price”) may be exercised one year after the date of
grant, and in accordance with a vesting schedule and the conditions (if any) to be determined by the ERCC on the date of
grant of the respective options.
Options with acquisition prices which represent a discount to the market price may be exercised two years after the date
of grant, and in accordance with a vesting schedule and the conditions (if any) to be determined by the ERCC on the date
of grant of the respective options.
• Acquisition Price
The acquisition price for each share in respect of which an option is exercisable shall be determined by the ERCC, in its
absolute discretion, to be either:
– a price equals to the Market Price or such higher price as may be determined by the ERCC in its absolute discretion; or
– a price which is set at a discount to the Market Price, the quantum of such discount to be determined by the ERCC
in its absolute discretion, provided that the maximum discount which may be given in respect of any option shall not
exceed 20% of the Market Price in respect of that option.
• Grant of Options
Options under the Share Option Plan may be granted at any time during the period when the said plan is in force, except
that no options shall be granted during the period of 30 days immediately preceding the date of announcement of the
Company’s fi nancial results. In the event that an announcement on any matter of an exceptional nature involving
unpublished price sensitive information is made, options may be granted on or after the fourth Market Day after the day
on which such announcement is released.
(b) Options Granted
With effect from 2007, the Company has ceased granting options under the CapitaLand Share Option Plan and has granted
contingent awards of shares under the CapitaLand Restricted Stock Plan in place of options.
For Australand, a listed subsidiary of the Group, the Australand Employees Securities Ownership Plan (“Australand ESOP”)
offers a fi ve-year, interest-free loan to enable employees to purchase a specifi ed number of Australand stapled securities
allocated by Australand’s Remuneration Committee. The loan has limited recourse and the employers’ obligations to repay the
loan are limited to the market value of the securities at any time. The loan will be partly repaid by distributions on the securities
held and must be fully repaid on cessation of employment with Australand or by the 5th anniversary of the origination date of
the loan, whichever is earlier. The last offer under Australand ESOP was made on 30 June 2006 and hence Australand ESOP will
cease to exist on 30 June 2011.
In addition to the above Australand ESOP, options over unissued Australand stapled securities have previously been issued to
employees under the terms of the Australand Share Option Scheme. No options have been issued under this scheme since
March 2002. No future options will be issued under this scheme.
Directors’ Report
117
SHARE PLANS (cont’d)
(c) Options Exercised
During the fi nancial year, there were new ordinary shares issued for cash fully paid in the capital of the Company and its
subsidiary pursuant to the exercise of options granted:
Exercise Price Number of Name of Company (per share) Shares Issued
CapitaLand Limited $0.82 to $4.67 9,990,336
Australand A$1.57 139,250
Save as disclosed above, there were no shares issued during the fi nancial year by virtue of the exercise of options to take up
unissued shares of the Company and its subsidiary.
(d) Unissued Shares under Options
At the end of the fi nancial year, there were the following unissued ordinary shares of the Company under options:
Exercise Price Number of Number of (per share) Unissued Shares Holders Expiry Date $ under Options
Non-Executive Directors 4 25/02/2010 2.26 230,000
(including non-executive directors
of subsidiaries and former directors) 15 24/02/2011 3.75 760,000
990,000
Group Executives 1 15/01/2009# 1.01 1,757
1 15/01/2009# 3.73 25,000
1 15/04/2009@ 2.27 300
1 12/04/2010 1.61 28,000
22 11/06/2010 1.73 97,738
9 03/08/2010 1.70 30,090
21 18/06/2011 1.67 119,610
24 10/05/2012 1.01 174,405
52 28/02/2013 0.82 363,560
7 29/08/2013 0.82 8,870
127 27/02/2014 1.02 1,506,711
25 27/08/2014 1.37 121,500
1 24/01/2015 1.95 20,000
483 25/02/2015 2.25 4,921,082
46 26/08/2015 2.68 237,750
675 24/02/2016 3.73 10,423,641
1 19/06/2016 4.21 150,000
75 01/09/2016 4.66 823,500
19,053,514
Total 20,043,514
# Employees of Raffl es Holdings Limited (“RHL”), being designated as subsidiary employees, were granted options under the CapitaLand Share Option Plan (“Share Option Plan”) to subscribe for ordinary shares in the capital of the Company. Following the cessation of RHL operations on 16 January 2007, these employees were retrenched. Pursuant to the rules of the Share Option Plan, the ERCC had approved the options held by those former employees of RHL to be fully vested as at 16 January 2007 and be exercisable for a period of two years up to 15 January 2009.
@ Arising from the divestment of Temasek Tower on 16 April 2007, the employees of Temasek Tower Limited were retrenched. Pursuant to the rules of the Share Option Plan, the ERCC of the Company had approved the options held by the former employees to be fully vested as at 16 April 2007 and be exercisable for a period of two years up to 15 April 2009.
118
SHARE PLANS (cont’d)
(d) Unissued Shares under Options (cont’d)
There were no new grant of options since 2007. The aggregate number of options granted since the commencement of the
CapitaLand Share Option Plan to the end of the fi nancial year is as follows:
Aggregate options granted Aggregate Aggregate Aggregate since the commencement options options outstanding Participants of the Share Option Plan exercised lapsed/cancelled options
Directors of the Company
Dr Hu Tsu Tau 240,000 (120,000) – 120,000
Hsuan Owyang* 1,143,000 (1,143,000) – –
Liew Mun Leong 6,135,000 (5,535,000) – 600,000
Lim Chin Beng 798,410 (798,410) – –
Jackson Peter Tai 688,800 (308,800) (220,000) 160,000
Peter Seah Lim Huat 478,800 (433,800) – 45,000
Richard Edward Hale 575,170 (480,170) – 95,000
James Koh Cher Siang 100,000 – – 100,000
Arfat Pannir Selvam 80,000 (20,000) – 60,000
10,239,180 (8,839,180) (220,000) 1,180,000
Non-Executive Directors of subsidiaries
(including former directors of the Company) 7,982,860 (7,043,410) (529,450) 410,000
Group Executives
(excluding Liew Mun Leong) 134,883,673 (83,308,353) (33,121,806) 18,453,514
Parent Group Executives and others 2,662,482 (2,232,834) (429,648) –
Total 155,768,195 (101,423,777) (34,300,904) 20,043,514
* Mr Hsuan Owyang resigned as a director of the Company on 1 January 2009.
At the end of the fi nancial year, there were also unissued ordinary shares of a subsidiary under options as follows:
Exercise Price* Number of Number of (per share) Unissued Shares Holders Expiry Date A$ under Options
Australand
Directors 1 13/03/2011 0.605 37,500
Employees 20 13/03/2011 0.605 323,750
Total 361,250
* Australand completed its one for one rights issue offer at A$0.60 per security in September 2008, raising gross proceeds of A$461 million. Accordingly, the exercise prices of the outstanding options granted under its Share Option Plan were adjusted to compensate for the decline in values of the said options.
Save as disclosed above, there were no unissued shares of the Company or its subsidiary under options as at the end of the
fi nancial year.
Directors’ Report
119
SHARE PLANS (cont’d)
(e) Awards under the CapitaLand Performance Share Plan
During the fi nancial year, the ERCC of the Company has granted awards conditional on targets set for a performance period,
currently prescribed to be a three-year performance period. A specifi ed number of shares will only be released by the ERCC to
the recipient at the end of the qualifying performance period, provided the threshold targets are achieved.
The fi nal number of shares released will depend on the achievement of pre-determined targets over a three-year performance
period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand,
if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline
award.
The maximum number of shares which could be released, when aggregated with the number of new shares issued pursuant to
the vesting of awards under the Restricted Stock Plan as well as the exercise of options under the Share Option Plan, is within
the 15% limit of the total number of issued shares in the capital of the Company on the day preceding the relevant date of grant.
Details of the movement in the awards of the Company during the year were as follows:
Movements during the year Balance as at Granted/ Lapsed/ Balance as at 1 January 2008 adjusted Released cancelled 31 December 2008
Year of No. of No. of No. of No. of No. of No. of No. of Contingent Award holders shares shares shares shares holders shares
2004 1 103,900 – (83,120) (20,780) – –
2005 44 2,938,599 2,730,634 (5,461,268) (207,965) – –
2006 55 3,222,129 146,700 – (375,928) 59 2,992,901
2007 64 2,543,930 302,700 – (299,870) 68 2,546,760
2008 – – 3,088,161 – (202,984) 83 2,885,177
8,808,558 6,268,195 (5,544,388) (1,107,527) 8,424,838
(f) Awards under the CapitaLand Restricted Stock Plan
During the fi nancial year, the ERCC of the Company has granted awards conditional on targets set for a performance period,
currently prescribed to be a one-year performance period. A specifi ed number of shares will only be released by the ERCC to
the recipient at the end of the qualifying performance period, provided the threshold targets are achieved.
The fi nal number of shares released will depend on the achievement of pre-determined targets at the end of a one-year
performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the
other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of
the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid shares, their
equivalent cash value or combinations thereof, at no cost.
With effect from 2008, the ERCC of the Company has instituted a set of share ownership guidelines for senior management who
received shares under the Restricted Stock Plan. Under these guidelines, members of the senior management team are required
to retain a portion of the total number of CapitaLand shares acquired through the Restricted Stock Plan which will vary according
to their job grades and base salaries.
120
SHARE PLANS (cont’d)
(f) Awards under the CapitaLand Restricted Stock Plan (cont’d)
The maximum number of shares which could be released, when aggregated with the number of new shares issued pursuant to
the vesting of awards under the Performance Share Plan and the exercise of options under the Share Option Plan is within the
15% limit of the total number of issued shares in the capital of the Company on the day preceding the relevant date of grant.
Details of the movement in the awards of the Company during the year were as follows:
Movements during the year Balance as at Granted/ Lapsed/ Balance as at 1 January 2008 adjusted Released cancelled 31 December 2008
Year of No. of No. of No. of No. of No. of No. of No. of Contingent Award holders shares shares shares shares holders shares
2007 1,052 4,552,277 2,258,080 (2,309,409) (509,434) 949 3,991,514
2008 – – 6,271,003 – (379,058) 1,362 5,891,945
4,552,277 8,529,083 (2,309,409)+ (888,492) 9,883,459++
+ The number of shares released during the year was 2,309,409, of which 307,326 were cash settled.
++ Of the 9,883,459 shares awarded, 1,358,003 were to be cash settled.
(g) Awards under the Australand Performance Rights Plan and Australand Tax Exempt Employee Security Plan
(i) Australand Performance Rights Plan (“PRP”)
The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders at the 2007
Annual General Meeting (“AGM”).
The number of securities outstanding under the Australand Performance Rights Plan as at the end of the year is summarised
below: Movements during the year Year of Balance as at Forfeited/ Balance as at Contingent Award 1 January 2008 Granted Exercised cancelled 31 December 2008
2007 3,911,500 591,0001 (87,883) (375,917) 4,038,700
2008 – 2,357,500 – (22,400) 2,335,100
3,911,500 2,948,500 (87,883) (398,317) 6,373,800
1 These performance rights were issued to the Managing Director in 2008 as they were subject to security holder approval at the 2008 AGM.
(ii) Australand Tax Exempt Employee Security Plan (“TEP”)
The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be issued by the company
to employees for no cash consideration was approved by Australand shareholders at the 2007 AGM. All Australian resident
permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights
Plan) who have been continuously employed by the Group for a period of at least nine months as at the invitation date and
are still employees as at the acquisition date are eligible to participate in the plan. Employees may elect not to participate
in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually in the third
quarter of each calendar year for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee
leaves Australand. Under the plan, employees will receive the same benefi ts as all other security holders.
Directors’ Report
121
SHARE PLANS (cont’d)
(g) Awards under the Australand Performance Rights Plan and Australand Tax Exempt Employee Security Plan (cont’d)
(ii) Australand Tax Exempt Employee Security Plan (“TEP”) (cont’d)
The number of securities issued to participants in the plan is the offer amount divided by the weighted average price at
which Australand’s stapled securities are traded on the Australian Stock Exchange during the week up to and including
the acquisition date (rounded down to the nearest whole number of stapled securities).
Number of securities issued under the Australand TEP is as follows: Weighted average Number of market price securities issued A$ (’000)
29 June 2007 2.15 177
1 September 2007 2.37 170
31 October 2008 0.33 1,214
1,561
AUDIT COMMITTEE
The Audit Committee members at the date of this report are Mr Richard Edward Hale (Chairman), Mr James Koh Cher Siang and Mrs
Arfat Pannir Selvam.
The Audit Committee performs the functions specifi ed by Section 201B of the Companies Act, Chapter 50 (the “Act”), the Listing
Manual of the SGX-ST, and the Code of Corporate Governance.
The principal responsibility of the Audit Committee is to assist the Board of Directors in fulfi lling its oversight responsibilities. Areas of
review by the Audit Committee include:
– the reliability and integrity of fi nancial statements;
– the impact of new, revised or proposed changes in accounting policies or regulatory requirements on the fi nancial statements;
– the compliance with laws and regulations, particularly those of the Act and the Listing Manual of the SGX-ST;
– the appropriateness of quarterly and full year announcements and reports;
– the adequacy of internal controls and evaluation of adherence to such controls;
– the effectiveness and effi ciency of internal and external audits;
– the appointment and re-appointment of external auditors and the level of auditors’ remuneration;
– the nature and extent of non-audit services and their impact on independence and objectivity of the external auditors;
– interested person transactions; and
– the fi ndings of internal investigation, if any.
The Audit Committee also reviews arrangements by which employees of the Company may, in confi dence, raise concerns about
possible improprieties in matters of fi nancial reporting or other matters. Pursuant to this, the Audit Committee has introduced a
Whistle Blowing Policy where employees may raise improprieties to the Audit Committee Chairman in good faith, with the confi dence
that employees making such reports will be treated fairly and be protected from reprisal.
The Audit Committee met four times in 2008. Specifi c functions performed during the year included reviewing the scope of work and
strategies of both the internal and external auditors, and the results arising therefrom, including their evaluation of the system of
internal controls. The Audit Committee also reviewed the assistance given by the Company’s offi cers to the auditors. The fi nancial
statements of the Group and the Company were reviewed by the Audit Committee prior to the submission to the Board of Directors
of the Company for adoption. The Audit Committee also met with the external and internal auditors, without the presence of
management, to discuss issues of concern to them.
122
AUDIT COMMITTEE (cont’d)
The Audit Committee has, in accordance with Chapter 9 of the Listing Manual of the SGX-ST, reviewed the requirements for approval
and disclosure of interested person transactions, reviewed the procedures set by the Group and the Company to identify and report
and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed
interested person transactions.
The Audit Committee also undertook quarterly reviews of all non-audit services provided by KPMG LLP and its member fi rms and was
satisfi ed that they did not affect their independence as external auditors of the Company.
The Audit Committee has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as
auditors at the forthcoming Annual General Meeting of the Company.
AUDITORS
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Dr Hu Tsu Tau Liew Mun Leong
Director Director
Singapore
25 February 2009
Directors’ Report
123
Statement by Directors
In our opinion:
(a) the fi nancial statements set out on pages 126 to 210 are drawn up so as to give a true and fair view of the state of affairs of the
Group and of the Company as at 31 December 2008, and of the results and changes in equity of the Group and of the Company,
and of the cash fl ows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies
Act, Chapter 50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they fall due.
The Board of Directors has, on the date of this statement, authorised these fi nancial statements for issue.
On behalf of the Board of Directors
Dr Hu Tsu Tau Liew Mun Leong
Director Director
Singapore
25 February 2009
124
Independent Auditors’ Report To the Members of CapitaLand Limited
We have audited the accompanying fi nancial statements of CapitaLand Limited (the “Company”) and its subsidiaries (the “Group”),
which comprise the balance sheets of the Group and the Company as at 31 December 2008, the income statements and statements
of changes in equity of the Group and the Company and the statement of cash fl ows of the Group for the year then ended, and a
summary of signifi cant accounting policies and other explanatory notes, as set out on pages 126 to 210.
Management’s responsibility for the fi nancial statements
Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions
of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes:
(a) devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are
safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are
recorded as necessary to permit the preparation of true and fair profi t and loss accounts and balance sheets and to maintain
accountability of assets;
(b) selecting and applying appropriate accounting policies; and
(c) making accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance
with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
125
Opinion
In our opinion:
(a) the consolidated fi nancial statements of the Group and the balance sheet, income statement and statement of changes in equity
of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards
to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2008 and the results and
changes in equity of the Group and of the Company and cash fl ows of the Group for the year ended on that date; and
(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in
Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMG LLP
Public Accountants and
Certifi ed Public Accountants
Singapore
25 February 2009
126
Balance Sheets As at 31 December 2008
The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Non-Current Assets
Property, Plant and Equipment 3 1,633,378 1,588,618 8,814 8,906
Intangible Assets 4 588,936 37,910 – –
Investment Properties 5 4,254,839 6,208,211 – –
Properties Under Development 6 593,945 569,205 – –
Interests in Subsidiaries 7 – – 6,828,287 3,864,998
Interests in Associates 8(a) 6,777,813 5,228,875 – –
Interests in Jointly-Controlled Entities 9(a) 1,086,780 1,221,858 – –
Financial Assets 10(a) 506,051 603,776 – –
Deferred Tax Assets 29 78,092 38,928 9,854 9,854
Other Non-Current Assets 11 19,199 81,089 147 147
15,539,033 15,578,470 6,847,102 3,883,905
Current Assets
Development Properties for Sale 12 3,347,168 3,540,778 – –
Consumable Stock 23 188 – –
Trade and Other Receivables 13 1,715,099 2,064,350 1,423,695 1,681,342
Financial Assets 10(b) 253,885 301,540 – –
Cash and Cash Equivalents 16 4,228,405 4,355,986 757,801 1,532,225
9,544,580 10,262,842 2,181,496 3,213,567
Less: Current Liabilities
Trade and Other Payables 17 2,357,161 2,889,508 133,946 212,259
Short Term Bank Borrowings 20 1,005,902 1,208,505 – 67,213
Current Portion of Debt Securities 21 865,113 594,300 – 91,000
Current Portion of Finance Leases 22 4,212 3,954 – –
Current Tax Payable 460,384 446,059 3,968 16,961
4,692,772 5,142,326 137,914 387,433
Net Current Assets 4,851,808 5,120,516 2,043,582 2,826,134
Less: Non-Current Liabilities
Long Term Bank Borrowings 20 3,639,590 4,456,736 – –
Debt Securities 21 4,279,257 3,609,819 2,518,579 1,293,439
Finance Leases 22 35,260 42,835 – –
Deferred Tax Liabilities 29 130,639 238,057 39,995 25,570
Deferred Income 23 754 53,938 – –
Other Non-Current Liabilities 18 317,539 432,262 63,869 32,134
8,403,039 8,833,647 2,622,443 1,351,143
Net Assets 11,987,802 11,865,339 6,268,241 5,358,896
Representing:
Share Capital 25 4,396,144 4,350,058 4,396,144 4,350,058
Revenue Reserves 5,423,671 4,011,179 1,617,293 854,944
Other Reserves 26 861,874 1,579,655 254,804 153,894
Equity attributable to Equity Holders of the Company 10,681,689 9,940,892 6,268,241 5,358,896
Minority Interests 1,306,113 1,924,447 – –
Total Equity 11,987,802 11,865,339 6,268,241 5,358,896
The accompanying notes form an integral part of these fi nancial statements.
127
The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Revenue 27 2,752,321 3,792,703 694,416 834,608
Cost of sales (1,680,164) (2,465,657) – –
Gross profi t 1,072,157 1,327,046 694,416 834,608
Other operating income 28(a) 1,330,657 1,553,424 93,163 157,343
Administrative expenses (466,844) (561,010) (72,767) (123,951)
Other operating expenses (97,574) (7,540) (72) 2,147
Profi t from operations 1,838,396 2,311,920 714,740 870,147
Finance costs (516,331) (403,549) (116,686) (50,726)
Share of results of:
– associates 318,275 907,740 – –
– jointly-controlled entities 56,819 604,382 – –
375,094 1,512,122 – –
Profi t before taxation 28 1,697,159 3,420,493 598,054 819,421
Taxation 29(b) (235,776) (268,047) 3,693 (10,765)
Profi t for the year 1,461,383 3,152,446 601,747 808,656
Attributable to:
Equity holders of the Company 1,260,113 2,759,313 601,747 808,656
Minority interests 201,270 393,133 – –
Profi t for the year 1,461,383 3,152,446 601,747 808,656
Basic earnings per share (cents) 30 44.7 98.6
Fully diluted earnings per share (cents) 30 43.3 95.0
Income Statements Year ended 31 December 2008
The accompanying notes form an integral part of these fi nancial statements.
128
Statements of Changes in Equity Year ended 31 December 2008
Share Revenue Other Minority Total Capital Reserves Reserves Total Interests Equity The Group $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2008 4,350,058 4,011,179 1,579,655 9,940,892 1,924,447 11,865,339
Exchange differences arising from
consolidation of foreign operations
and translation of foreign currency loans – – 63,591 63,591 (232,344) (168,753)
Change in fair value of
available-for-sale investments – – (39,339) (39,339) – (39,339)
Effective portion of change in fair value
of cash fl ow hedges – – (145,627) (145,627) (48,707) (194,334)
Realisation of foreign exchange reserve
transferred to income statement – – (93,433) (93,433) – (93,433)
Realisation of available-for-sale reserve
transferred to income statement – – (17,343) (17,343) – (17,343)
Realisation of hedging reserve
transferred to income statement – – (5,526) (5,526) – (5,526)
Realisation of other capital reserve
transferred to income statement – – (136) (136) – (136)
Net losses recognised directly in equity – – (237,813) (237,813) (281,051) (518,864)
Profi t for the year – 1,260,113 – 1,260,113 201,270 1,461,383
Total recognised gains/(losses) for the year – 1,260,113 (237,813) 1,022,300 (79,781) 942,519
Dividends paid – (423,398) – (423,398) – (423,398)
Issue of shares 46,086 – (25,665) 20,421 2,535 22,956
Transfer between reserves – 584,000 (584,000) – – –
Equity portion of convertible bonds – – 82,940 82,940 – 82,940
Cost of share-based payments – – 54,198 54,198 1,281 55,479
Transfer of equity compensation reserve
to liability by a subsidiary – 2,007 (14,178) (12,171) – (12,171)
Minority interests contributions (net) – – – – 169,093 169,093
Effects of acquisitions and disposals
of subsidiaries – – – – (635,413) (635,413)
Dividends paid/payable to minority interests – – – – (73,386) (73,386)
Others – (10,230) 6,737 (3,493) (2,663) (6,156)
At 31 December 2008 4,396,144 5,423,671 861,874 10,681,689 1,306,113 11,987,802
The accompanying notes form an integral part of these fi nancial statements.
129
Share Revenue Other Minority Total Capital Reserves Reserves Total Interests Equity The Group $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2007 4,304,907 1,575,167 1,458,040 7,338,114 2,095,273 9,433,387
Exchange differences arising from
consolidation of foreign operations
and translation of foreign currency loans – – 18,895 18,895 62,173 81,068
Change in fair value of
available-for-sale investments – – (14,953) (14,953) – (14,953)
Transfer of available-for-sale reserve
to income statement – – 9,849 9,849 – 9,849
Effective portion of change in fair value
of cash fl ow hedges – – 4,608 4,608 10,586 15,194
Realisation of foreign exchange reserve
transferred to income statement – – (7,705) (7,705) 4,771 (2,934)
Realisation of available-for-sale reserve
transferred to income statement – – (6,752) (6,752) – (6,752)
Realisation of hedging reserve
transferred to income statement – – (5) (5) – (5)
Realisation of other capital reserve
transferred to income statement – – (1,126) (1,126) – (1,126)
Net gains recognised directly in equity – – 2,811 2,811 77,530 80,341
Profi t for the year – 2,759,313 – 2,759,313 393,133 3,152,446
Total recognised gains for the year – 2,759,313 2,811 2,762,124 470,663 3,232,787
Dividends paid – (317,065) – (317,065) – (317,065)
Issue of shares 45,151 – (556) 44,595 123 44,718
Equity portion of convertible bonds – – 65,441 65,441 – 65,441
Cost of share-based payments – – 46,928 46,928 3,487 50,415
Minority interests contributions (net) – – – – 119,837 119,837
Effects of acquisitions/disposals and
liquidation of subsidiaries – – – – (444,796) (444,796)
Dividends paid/payable to minority interests – – – – (319,155) (319,155)
Others – (6,236) 6,991 755 (985) (230)
At 31 December 2007 4,350,058 4,011,179 1,579,655 9,940,892 1,924,447 11,865,339
The accompanying notes form an integral part of these fi nancial statements.
130
Equity Share Capital Revenue Compensation Total Capital Reserve Reserves Reserve Equity The Company $’000 $’000 $’000 $’000 $’000
At 1 January 2008 4,350,058 117,272 854,944 36,622 5,358,896
Profi t for the year – – 601,747 – 601,747
Total recognised gains for the year – – 601,747 – 601,747
Dividends paid – – (423,398) – (423,398)
Issue of shares 46,086 – – (10,767) 35,319
Equity portion of convertible bonds – 95,940 – – 95,940
Cost of share-based payments – – – 15,737 15,737
Capital return by a subsidiary – – 584,000 – 584,000
At 31 December 2008 4,396,144 213,212 1,617,293 41,592 6,268,241
At 1 January 2007 4,304,907 41,831 363,353 24,330 4,734,421
Profi t for the year – – 808,656 – 808,656
Total recognised gains for the year – – 808,656 – 808,656
Dividends paid – – (317,065) – (317,065)
Issue of shares 45,151 – – (298) 44,853
Equity portion of convertible bonds – 75,441 – – 75,441
Cost of share-based payments – – – 12,590 12,590
At 31 December 2007 4,350,058 117,272 854,944 36,622 5,358,896
Statements of Changes in Equity Year ended 31 December 2008
The accompanying notes form an integral part of these fi nancial statements.
131
Consolidated Statement of Cash Flows Year ended 31 December 2008
2008 2007 $’000 $’000
Operating activities
Profi t after taxation 1,461,383 3,152,446
Adjustments for:
Amortisation and impairment of intangible assets 2,003 4,973
Negative goodwill on acquisition (55,195) –
Allowance/(Write back) for:
– foreseeable losses on development properties for sale 52,803 (223,179)
– loans to associates and jointly-controlled entities (5,585) 749
– loans to investee companies and other external parties (1,410) –
– non-current portion of fi nancial assets 39,877 17,614
– impairment loss on investment in an associate 3,490 –
Provision for income support 35,654 –
Share-based expenses 57,644 53,653
Changes in fair value of fi nancial instruments and assets (41,677) 3,675
Depreciation of property, plant and equipment 55,227 39,579
(Gain on disposal)/Write off of property, plant and equipment (33,829) (138,862)
Gain on disposal of investment properties and properties under development (76,600) (74,769)
Fair value gain on investment properties (300,682) (778,831)
Gain on disposal of non-current fi nancial assets (22,982) (8,300)
Gain on disposal/dilution of subsidiaries, associates and jointly-controlled entities (531,919) (322,959)
Share of results of associates and jointly-controlled entities (375,094) (1,512,122)
Accretion of deferred income – (3,819)
Interest expense 516,331 403,549
Interest income (106,211) (124,559)
Tax expense 235,776 268,047
(552,379) (2,395,561)
Operating profi t before working capital changes 909,004 756,885
Decrease/(Increase) in working capital:
Trade and other receivables 458,226 (573,222)
Development properties for sale (65,413) 409,929
Trade and other payables (12,268) 324,328
Financial assets 47,996 (272,939)
Changes in working capital 428,541 (111,904)
Cash generated from operations 1,337,545 644,981
Income tax paid (192,136) (102,990)
Customer deposits and other non-current payables received 24,636 13,185
Net cash generated from operating activities carried down 1,170,045 555,176
The accompanying notes form an integral part of these fi nancial statements.
132
Consolidated Statement of Cash Flows Year ended 31 December 2008
2008 2007 Note $’000 $’000
Net cash generated from operating activities brought forward 1,170,045 555,176
Investing activities
Proceeds from disposal of property, plant and equipment 101,821 236,214
Purchase of property, plant and equipment (358,230) (210,047)
Increase in associates and jointly-controlled entities (1,346,566) (127,459)
Increase in amounts owing by investee companies and other receivables (16,644) (10,975)
Deposits for new investments (21,131) (83,586)
Acquisition of investment properties and properties under development (1,366,782) (1,386,435)
Proceeds from disposal of investment properties and properties under development 1,169,478 1,586,615
Disposal/(Acquisition) of non-current fi nancial assets 60,930 (310,258)
Dividends received from associates and jointly-controlled entities 265,792 376,209
Acquisition of remaining interest in a subsidiary (959,970) –
Disposal/(Acquisition) of subsidiaries 32 1,447,461 (135,806)
Interest income received 87,462 103,049
Net cash (used in)/generated from investing activities (936,379) 37,521
Financing activities
Proceeds from issue of shares under share option plan 22,956 44,718
Proceeds from/(Repayment of) amounts owing to minority interests 16,678 (23,088)
Contribution from minority interests 162,554 119,837
(Repayment of)/Proceeds from sales of future receivables (457,092) 264,106
Proceeds from bank borrowings 3,455,464 4,279,166
Repayment of bank borrowings (3,583,191) (4,127,790)
Proceeds from issue of debt securities 1,503,367 1,923,790
Repayment of debt securities (443,431) (280,250)
Repayment of fi nance lease payables (8,006) (3,936)
Dividends paid to minority interests (76,895) (319,155)
Dividends paid to shareholders (423,398) (317,065)
Interest expense paid (556,541) (478,032)
Net cash (used in)/generated from fi nancing activities (387,535) 1,082,301
Net (decrease)/increase in cash and cash equivalents (153,869) 1,674,998
Cash and cash equivalents at beginning of the year 4,355,986 2,684,851
Effect of exchange rate changes on cash balances held in foreign currencies 26,288 (3,863)
Cash and cash equivalents at end of the year 16 4,228,405 4,355,986
The accompanying notes form an integral part of these fi nancial statements.
133
These notes form an integral part of the fi nancial statements.
The fi nancial statements were authorised for issue by the Board of Directors on 25 February 2009.
1. DOMICILE AND ACTIVITIES
CapitaLand Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered offi ce at 168 Robinson
Road, #30-01, Capital Tower, Singapore 068912.
The principal activities of the Company during the fi nancial year are those relating to investment holding and consultancy
services as well as the corporate headquarters which gives direction, provides management support services and integrates the
activities of its subsidiaries.
The principal activities of the signifi cant subsidiaries are set out in note 37 to the accompanying fi nancial statements.
The consolidated fi nancial statements relate to the Company and its subsidiaries (the “Group”) and the Group’s interests in
associates and jointly-controlled entities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).
The fi nancial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.
The fi nancial statements are presented in Singapore Dollars which is the Company’s functional currency. All fi nancial
information presented in Singapore Dollars has been rounded to the nearest thousand, unless otherwise stated.
The preparation of fi nancial statements in conformity with FRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
In particular, information about signifi cant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most signifi cant effect on the amount recognised in the fi nancial statements are described in the
following notes:
Note 2(m) – classifi cation of leases
Note 2(n) – estimation of the percentage of completion of the projects, attributable profi ts and foreseeable losses
Note 3 – measurement of recoverable amounts of property, plant and equipment
Note 4 – assumptions of recoverable amounts relating to goodwill impairment
Note 5 – valuation of investment properties
Note 24 – measurement of share-based payments
Note 32(b) – valuation of assets, liabilities and contingent liabilities acquired in business combinations
Note 33 – valuation of fi nancial instruments
In 2008, the Group elected to early adopt FRS 108 Operating Segments which is effective for annual periods beginning on
or after 1 January 2009. This standard does not have any impact on the recognition and measurement of the Group’s
fi nancial statements.
Notes to the Financial Statements
134
Notes to the Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(a) Basis of preparation (cont’d)
FRS 108 requires disclosure of information about the Group’s operating segments that is consistent with internal reporting
provided to the chief operating decision-maker. The Group’s reportable operating segments are its strategic business units
(“SBU”), namely CapitaLand Residential Singapore, CapitaLand China Holdings, CapitaLand Commercial, CapitaLand
Retail, Ascott, CapitaLand Financial and Australand. Additional disclosure about each of these segments are shown in
Note 40, including restated comparative information.
Except for the above changes, the accounting policies set out below have been applied consistently by the Group to all
periods presented in this fi nancial statements.
(b) Consolidation
Business combinations
Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition.
Any excess or defi ciency of the purchase consideration over the net fair value of the identifi able assets, liabilities and
contingent liabilities is accounted for as goodwill or negative goodwill (see note 2(e)(i)).
For acquisition of subsidiaries prior to 1 January 2004 which previously met the criteria for merger of businesses such that
the assets and liabilities and results were accounted for under the pooling of interests method, the classifi cation and
accounting treatment of these business combinations have not been reconsidered or restated in preparing the Group’s
fi nancial statements.
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the fi nancial and
operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that
presently are exercisable are taken into account.
The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control
commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary
to align them with the policies adopted by the Group.
Associates and jointly-controlled entities
Associates are those entities in which the Group has signifi cant infl uence, but not control, over their fi nancial and operating
policies. Signifi cant infl uence is presumed to exist when the Group holds between 20% and 50% of the voting power of
another entity. Jointly-controlled entities are those entities over whose activities the Group has joint control, established
by contractual agreement and requiring unanimous consent for strategic fi nancial and operating decisions. Associates and
jointly-controlled entities (collectively referred to as “equity accounted investees”) are accounted for using the equity
method. The consolidated fi nancial statements include the Group’s share of the income, expenses and equity movements
of associates and jointly-controlled entities, after adjustments to align the accounting policies with those of the Group,
from the date that signifi cant infl uence or joint control commences until the date that signifi cant infl uence or joint control
ceases. When the Group’s share of losses exceeds its interest in an associate or a jointly-controlled entity, the carrying
amount of that interest is reduced to zero and the recognition of further losses is discontinued except to the extent that
the Group has an obligation or has made payments on behalf of the investee.
135
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(b) Consolidation (cont’d)
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income or expenses arising from intra-group transactions, are eliminated in
preparing the consolidated fi nancial statements. Unrealised gains arising from transactions with associates and jointly-
controlled entities are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Accounting for subsidiaries, associates and jointly-controlled entities by the Company
Investments in subsidiaries, associates and jointly-controlled entities are stated in the Company’s balance sheet at cost
less accumulated impairment losses.
(c) Foreign currencies
Foreign currency transactions
Items included in the fi nancial statements of each entity in the Group are measured using the currency that best refl ects
the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”).
Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at the
exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
reporting date are retranslated to the functional currency at the exchange rate prevailing at the reporting date. Non-
monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date on which the fair value was determined.
Foreign currency differences arising from retranslation are recognised in the income statement, except for differences
arising from the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign
operation (see below), available-for-sale equity instruments and fi nancial liabilities designated as hedges of net investment
in a foreign operation (see note 2(g)).
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore Dollars at exchange rates prevailing at the
reporting date. The income and expenses of foreign operations are translated to Singapore Dollars at exchange rates
prevailing at the dates of the transactions. Goodwill and fair value adjustments arising from the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
Foreign currency differences are recognised in the foreign currency translation reserve. When a foreign operation is disposed
off, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to the income statement.
Net investment in a foreign operation
Exchange differences arising from monetary items that in substance form part of the Company’s net investment in a
foreign operation are recognised in the Company’s income statement. Such exchange differences are reclassifi ed to equity
in the consolidated fi nancial statements. When the foreign operation is disposed off, the cumulative amount in equity is
transferred to the income statement as an adjustment to the profi t or loss arising from disposal.
136
Notes to the Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(d) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the asset.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the
carrying amount of the asset when it is probable that future economic benefi ts, in excess of the originally assessed
standard of performance of the existing asset, will fl ow to the Group. All other subsequent expenditure is recognised as
an expense in the period in which it is incurred.
Freehold land and assets under construction are not depreciated. Depreciation on other property, plant and equipment is
provided on a straight-line basis over the estimated useful lives of each component of an item of property, plant and
equipment as follows:
Leasehold land and buildings (excluding serviced residence properties) Remaining lease period
ranging from 20 to 35 years
Hospitality plant, machinery, improvements, furniture, fi ttings and equipment 1 to 15 years
Other plant, machinery and improvements 3 to 10 years
Other furniture, fi ttings and equipment 2 to 5 years
Motor vehicles 5 years
For serviced residence properties where the residual value at the end of the intended holding period is lower than the
carrying amount, the difference in value is depreciated over the Group’s intended holding period. No depreciation is
recognised where the residual value is higher than the carrying amount. Based on historical trends and past experience,
the intended holding period (the period from the date of commencement of serviced residence operations to the date of
expected strategic divestment of the properties) ranges from 3 to 5 years.
Residual values of the properties at the end of the intended holding period are determined based on annual independent
professional valuation. Residual value is the estimated amount that the Group would obtain from the disposal of a property
if the property is already of the age and in the condition expected at the date when the Group has the intention to dispose
of that property.
Assets under construction are stated at cost. Expenditure relating to assets under construction (including borrowing costs)
are capitalised when incurred. Depreciation will commence when the development is completed.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
(e) Intangible assets
(i) Goodwill
Goodwill and negative goodwill arise on the acquisition of subsidiaries, associates and jointly-controlled entities.
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the
identifi able assets, liabilities and contingent liabilities of the acquiree. Negative goodwill represents the excess of the
Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of
acquisition.
Goodwill arising from the acquisition of subsidiaries is presented in intangible assets. Goodwill arising from the
acquisition of associates and jointly-controlled entities is presented together with investments in associates and
jointly-controlled entities.
137
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(e) Intangible assets (cont’d)
(i) Goodwill (cont’d)
Acquisition prior to 1 January 2004
Prior to 1 January 2001, goodwill and negative goodwill on acquisitions were written off against accumulated profi ts
in the year of acquisition.
From 1 January 2001 to 31 December 2003, goodwill was stated at cost from the date of initial recognition and
amortised over its estimated useful life of 20 years. On 1 January 2004, the Group discontinued the amortisation of
goodwill. The remaining goodwill balance is subject to testing for impairment (see note 2(j)). Negative goodwill was
derecognised by crediting accumulated profi ts on 1 January 2004.
Acquisition on or after 1 January 2004
Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment as described
in note 2(j). Negative goodwill is credited to the income statement in the period of the acquisition.
Acquisition of minority interest
Goodwill arising from the acquisition of a minority interest in a subsidiary represents the excess of the cost of the
additional investment over the carrying amount of the net assets acquired at the date of exchange.
(ii) Other intangible assets
Other intangible assets with fi nite useful lives are measured at cost less accumulated amortisation and impairment
losses. They are amortised in the income statement on a straight-line basis over their estimated useful lives of 1 to
10 years, from the date on which they are available for use.
Other intangible assets with indefi nite useful lives are not amortised and are measured at cost less impairment
losses.
(f) Investment properties and properties under development
(i) Investment properties
Investment properties are properties held either to earn rental or for capital appreciation or both. Investment
properties are initially recognised at cost, including transaction costs, and subsequently at fair value with any change
therein recognised in the income statement. The fair value is performed once every six months based on internal
valuation or independent professional valuation. Independent professional valuation is obtained at least once every
three years.
When an investment property is disposed off, the resulting gain or loss recognised in the income statement is the
difference between the net disposal proceed and the carrying amount of the property.
(ii) Properties under development
Properties under development are properties being constructed or developed for future rental. They are carried at
cost less accumulated impairment losses until construction or development is completed, at which time they are
transferred and accounted for as investment properties.
138
Notes to the Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g) Financial instruments
(i) Non-derivative fi nancial instruments
Non-derivative fi nancial instruments comprise investments in equity and debt securities, trade and other receivables,
cash and cash equivalents, fi nancial liabilities and trade and other payables.
Non-derivative fi nancial instruments are recognised initially at fair value plus, for instruments not at fair value through
profi t or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative fi nancial
instruments are measured as described below.
A fi nancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from the fi nancial assets expire
or if the Group transfers the fi nancial asset to another party without retaining control or transfers substantially all the
risks and rewards of the asset. Regular way purchases and sales of fi nancial assets are accounted for at trade date,
i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the
Group’s obligations specifi ed in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash fl ows.
Instruments at fair value through profi t or loss
An instrument is classifi ed as fair value through profi t or loss if it is held for trading or is designated as such upon
initial recognition. Financial instruments are designated as fair value through profi t or loss if the Group manages such
investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable
transaction costs are recognised in the income statement when incurred. Financial instruments classifi ed as fair
value through profi t or loss are measured at fair value, and changes therein are recognised in the income statement.
Available-for-sale fi nancial assets
The Group’s investments in equity securities and certain debt securities are classifi ed as available-for-sale fi nancial
assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for
impairment losses and foreign exchange gains and losses on available-for-sale monetary items (see note 2(c)), are
recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred
to the income statement.
Others
Other non-derivative fi nancial instruments are categorised as loans and receivables or fi nancial liabilities, which are
measured at amortised cost using the effective interest method, less any impairment losses.
139
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g) Financial instruments (cont’d)
(ii) Derivative fi nancial instruments and hedging activities
The Group holds derivative fi nancial instruments to hedge its foreign currency and interest rate risk exposures.
Embedded derivatives are separated from the host contract and accounted for separately if the economic
characteristics and risks of the host contract and the embedded derivative are not closely related, a separate
instrument with the same terms as the embedded derivative would meet the defi nition of a derivative, and the
combined instrument is not measured at fair value through profi t or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the income statement
when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are
accounted for as described below.
Cash fl ow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash fl ow hedge are recognised
directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair
value are recognised in the income statement. If the hedging instrument no longer meets the criteria for hedge
accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively. The
cumulative gain or loss previously recognised in equity remains there until the forecast transaction occurs. When the
hedged item is a non-fi nancial asset, the amount recognised in equity is transferred to the carrying amount of the
asset when it is recognised. In other cases, the amount recognised in equity is transferred to the income statement
in the same period that the hedged item affects income statement.
Fair value hedges
Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the
income statement. The hedged item is stated at fair value in respect of the risk being hedged, with any gain or loss
being recognised in the income statement.
Hedge of net investment in a foreign operation
Foreign currency differences arising from the retranslation of a fi nancial liability designated as a hedge of a net
investment in a foreign operation are recognised in the Company’s income statement. On consolidation, such
differences are recognised directly in equity, in the foreign currency translation reserve, to the extent that the hedge
is effective. To the extent that the hedge is ineffective, such differences are recognised in the income statement.
When the hedged net investment is disposed off, the cumulative amount in equity is transferred to the income
statement as an adjustment to the profi t or loss on disposal.
Economic hedges
Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities
denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in the income
statement as part of foreign currency gains and losses.
Separable embedded derivatives
Changes in the fair value of separable embedded derivatives are recognised immediately in the income statement.
140
Notes to the Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g) Financial instruments (cont’d)
(iii) Convertible bonds
Convertible bonds that can be converted into share capital where the number of shares issued does not vary with
changes in the fair value of the bonds are accounted for as compound fi nancial instruments. The gross proceeds are
allocated to the equity and liability components, with the equity component being assigned the residual amount after
deducting the fair value of the liability component from the fair value of the compound fi nancial instrument.
Subsequent to initial recognition, the liability component of convertible bonds is measured at amortised cost using
the effective interest method. The equity component of convertible bonds is not remeasured. When the conversion
option is exercised, its carrying amount will be transferred to the share capital. When the conversion option lapses,
its carrying amount will be transferred to revenue reserve.
When a convertible bond is repurchased before its original maturity date, the purchase consideration (including
directly attributable costs, net of tax effects) are allocated to the liability and equity components of the instrument at
the date of transaction. Any resulting gain or loss relating to the liability component is recognised in income statement;
and the amount of the consideration relating to the equity component is recognised in equity.
(iv) Financial guarantees
Financial guarantee contracts are classifi ed as fi nancial liabilities unless the Group or the Company has previously
asserted explicitly that it regards such contracts as insurance contracts and accounted for them as such.
Financial guarantees classifi ed as fi nancial liabilities
Such fi nancial guarantees are recognised initially at fair value. Subsequent to initial measurement, the fi nancial
guarantees are stated at the higher of (i) the amount determined in accordance with accounting policy 2(l) on
provisions; and (ii) the initial fair value less cumulative amortisation. When fi nancial guarantees are terminated before
their original expiry date, the carrying amount of the fi nancial guarantees is transferred to the income statement.
Financial guarantees classifi ed as insurance contracts
These fi nancial guarantees are accounted for as insurance contracts. Provision is recognised based on the Group’s
or the Company’s estimate of the ultimate cost of settling all claims incurred but unpaid at the balance sheet date.
The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount
recognised and the amount that would be required to settle the guarantee contract.
(v) Impairment of fi nancial assets
A fi nancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is
impaired. A fi nancial asset is considered to be impaired if objective evidence indicates that one or more events have
had a negative effect on the estimated future cash fl ows of that asset.
An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the difference between
its carrying amount, and the present value of the estimated future cash fl ows discounted at the original effective
interest rate. An impairment loss in respect of an available-for-sale fi nancial asset is calculated by reference to its
current fair value.
141
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g) Financial instruments (cont’d)
(v) Impairment of fi nancial assets (cont’d)
Individually signifi cant fi nancial assets are tested for impairment on an individual basis. The remaining fi nancial
assets are assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale
fi nancial asset recognised previously in equity is transferred to the income statement.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. For fi nancial assets measured at amortised cost and available-for-sale fi nancial assets that are
debt securities, the reversal is recognised in the income statement. For available-for-sale fi nancial assets that are
equity securities, any subsequent increase in fair value is recognised directly in equity.
(h) Share capital
Ordinary shares are classifi ed as equity.
Incremental costs directly attributable to the issue of ordinary shares and options are recognised as a deduction from equity.
Where share capital recognised as equity is repurchased (“treasury shares”), the amount of the consideration paid,
including directly attributable costs, net of any tax effects, is presented as a deduction from equity. Where such shares are
subsequently reissued, sold or cancelled, the consideration received is recognised as a change in equity. No gain or loss
is recognised in the income statement.
(i) Development properties for sale
Development properties for sale are stated at the lower of cost plus, where appropriate, a portion of the attributable profi t,
and estimated net realisable value, net of progress billings. Net realisable value represents the estimated selling price less
costs to be incurred in selling the property.
The cost of properties under development comprises specifi cally identifi ed costs, including acquisition costs, development
expenditure, borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development
property are also capitalised, on a specifi c identifi cation basis, as part of the cost of the development property until the
completion of development.
(j) Impairment – non-fi nancial assets
The carrying amounts of the Group’s non-fi nancial assets, other than investment properties, inventories and deferred tax
assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at
each reporting date, and as and when indicators of impairment are identifi ed.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifi able asset group that generates cash fl ows that largely are
independent from other assets and groups. Impairment losses are recognised in the income statement unless it reverses
a previous revaluation credited to equity, in which case it is charged to equity. Impairment losses recognised in respect of
cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to the units and then to
reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis.
142
Notes to the Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(j) Impairment – non-fi nancial assets (cont’d)
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax
discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset or
cash-generating unit.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(k) Employee benefi ts
Short term employee benefi ts
All short term employee benefi ts, including accumulated compensated absences, are recognised in the income statement
in the period in which the employees render their services.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Defi ned contribution plans
Contributions to post-employment benefi ts under defi ned contribution plans are recognised as an expense in the income
statement as incurred.
Long service leave
Liabilities for other employee entitlements which are not expected to be paid or settled within twelve months of the
balance sheet date are accrued in respect of all employees at the present value of the future amounts expected to be paid
based on a projected weighted average increase in wage and salary rates. Expected future payments are discounted using
interest rates on relevant government securities with terms to maturity that match, as closely as possible, the estimated
future cash outfl ows.
Share-based payments
The Group operates the following share-based payment plans: Share Option Plan, Performance Share Plan and Restricted
Stock Plan. Equity-settled share-based payments are measured at fair value at the date of grant, whereas cash-settled
share-based payments are measured at current fair value at each balance sheet date. In estimating the fair value of the
compensation cost, market-based performance conditions are taken into account. The cost is charged to the income
statement on a basis that fairly refl ects the manner in which the benefi ts will accrue to the employees under the respective
plans over the vesting period.
At each reporting date, the Group revises its estimates of the number of options that are expected to become exercisable
on the vesting date and recognises the impact of the revision of the estimate in the income statement, with a corresponding
adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital
when the options are exercised.
143
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(k) Employee benefi ts (cont’d)
Share-based payments (cont’d)
The compensation cost for performance share plan and restricted stock plan are remeasured based on the latest estimate
of the number of shares that will be awarded based on non-market vesting conditions at each reporting date. Any increase
or decrease in compensation cost over the previous estimate is recognised in the income statement, with a corresponding
adjustment to equity or liability. The fi nal measure of compensation cost for restricted stock plan is based on the number
of shares ultimately awarded at the completion of the performance period. For performance share plan with market-based
condition, the compensation cost is recognised irrespective of whether the performance condition is satisfi ed.
(l) Provision
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation.
A provision for onerous contract is recognised when the expected benefi ts to be derived by the Group from a contract are
lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present
value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
(m) Leases
When entities within the Group are lessees of a fi nance lease
Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance
leases. Upon initial recognition, property, plant and equipment acquired through fi nance leases are capitalised at the lower
of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is
accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the
shorter of the lease term and their useful lives. Lease payments are apportioned between fi nance expense and reduction
of the lease liability. The fi nance expense is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising
the minimum lease payments over the remaining term of the lease when the lease adjustment is confi rmed.
At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even
though the arrangement is not in the legal form of a lease.
When entities within the Group are lessees of an operating lease
Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the
income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the
income statement as an integral part of the total lease payments made. Contingent rentals are charged to the income
statement in the accounting period in which they are incurred.
When entities within the Group are lessors of an operating lease
Assets subject to operating leases are included in either investment properties (see note 2(f)) or property, plant and
equipment (see note 2(d)).
144
Notes to the Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(n) Revenue recognition
Rental income
Rental income receivable under operating leases is recognised in the income statement on a straight-line basis over the
term of the lease, except where an alternative basis is more representative of the pattern of benefi ts to be derived from the
leased asset. Lease incentives granted are recognised as an integral part of the total rental income to be received.
Contingent rentals are recognised as income in the accounting period in which they are earned.
Development properties for sale
The Group recognises income on property development projects when the signifi cant risks and rewards of ownership have
been transferred to the buyer. In cases where the Group is obliged to perform any signifi cant acts after the transfer of legal
title or equitable interest, revenue is recognised as the acts are performed based on the percentage of completion method,
which is an allowed alternative method under Recommended Accounting Practice 11 Pre-completion Contracts for the
Sale of Development Property (“RAP 11”) issued by the Institute of Certifi ed Public Accountants of Singapore in October
2005. Under the percentage of completion method, profi t is brought into the income statements only in respect of sales
procured and to the extent that such profi t relates to the progress of construction work. The progress of construction work
is measured by the proportion of the construction costs incurred to date to the estimated total construction costs for each
project. Depending on the selling conditions associated with each development project, revenue is generally not recognised
if the Group provides various guarantees and other fi nancial support to the buyers (“continuing involvement”) during the
period of property development. Such continuing involvement by the Group would then require revenue to be deferred
until the Group’s continuing involvement ceases.
Financial advisory and management fee
Financial advisory and management fee is recognised in the income statement as and when services are rendered.
Dividends
Dividend income is recognised on the date that the Group’s right to receive payment is established.
Interest Income
Interest income is recognised as it accrues, using the effective interest method.
(o) Finance costs
Borrowing costs are recognised in the income statement using the effective interest method, except to the extent that they
are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily
takes a substantial period of time to be prepared for its intended use or sale.
145
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(p) Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t, and
differences relating to investments in subsidiaries and jointly-controlled entities to the extent that it is probable that they
will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the
reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which
temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefi t will be realised.
(q) Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker has been identifi ed as the Council of Chief Executive Offi cers (“CEOs”)
that makes strategic resources allocation decisions. The Council of CEOs comprises the President & CEO, key management
offi cers of the corporate offi ce and CEOs of the strategic business units.
146
Notes to the Financial Statements
3. PROPERTY, PLANT AND EQUIPMENT Plant, Furniture, Serviced Other Assets machinery fi ttings residence Freehold Freehold Leasehold leasehold under and Motor and properties land buildings land buildings construction improvements vehicles equipment Total The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
At 1 January 2008 1,151,105 – 4,385 841 14,242 325,475 73,727 3,095 231,781 1,804,651
Additions 169,575 – – – 1,879 125,340 5,315 571 42,803 345,483
Disposal of subsidiaries (21,573) – – – – (88,218) (2,208) (840) (7,699) (120,538)
Disposals/Written off (52,350) – – – (388) (856) (1,065) (279) (11,626) (66,564)
Reclassifi cation 198,505 – (4,385) – 7,581 (213,749) (497) – 12,545 –
Translation differences (83,484) – – – 197 12,950 (4,741) 490 (18,489) (93,077)
At 31 December 2008 1,361,778 – – 841 23,511 160,942 70,531 3,037 249,315 1,869,955
Accumulated depreciation
At 1 January 2008 31,058 – 139 7 6,347 – 46,088 2,932 129,462 216,033
Depreciation charge
for the year 8,467 – – 17 2,244 – 8,774 548 35,177 55,227
Impairment loss 8,053 – – – 292 – – – – 8,345
Disposal of subsidiaries – – – – – – (1,645) (186) (4,471) (6,302)
Disposals/Written off – – – – (61) – (861) (182) (8,146) (9,250)
Reclassifi cation – – (139) – 139 – (102) – 102 –
Translation differences (9,993) – – – 28 – (4,826) (1,203) (11,482) (27,476)
At 31 December 2008 37,585 – – 24 8,989 – 47,428 1,909 140,642 236,577
Carrying amount
At 1 January 2008 1,120,047 – 4,246 834 7,895 325,475 27,639 163 102,319 1,588,618
At 31 December 2008 1,324,193 – – 817 14,522 160,942 23,103 1,128 108,673 1,633,378
(a) As at 31 December 2008, certain property, plant and equipment with carrying value totalling approximately $868.8 million
(2007: $856.3 million) were mortgaged to banks to secure credit facilities for the Group (note 20).
(b) The value of property, plant and equipment of the Group held under fi nance leases at 31 December 2008 was $56.2 million
(2007: $61.0 million).
(c) During the year, the Group recognised an impairment loss of $8.3 million relating to a serviced residence property in Hong
Kong and a leasehold building in Malaysia. The impairment loss was determined based on independent valuations done
in December 2008, and was recognised in “other operating expenses”.
(d) During the fi nancial year, interest capitalised as cost of property, plant and equipment amounted to approximately $1.7
million (2007: $3.1 million).
147
3. PROPERTY, PLANT AND EQUIPMENT (cont’d) Plant, Furniture, Serviced Other Assets machinery fi ttings residence Freehold Freehold Leasehold leasehold under and Motor and properties land buildings land buildings construction improvements vehicles equipment Total The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
At 1 January 2007 1,167,800 10,255 44,307 21,321 30,337 180,308 63,308 6,843 250,164 1,774,643
Additions 66 – – 841 4,338 132,898 17,668 609 53,417 209,837
Acquisition of subsidiaries 52,373 – – – – – 1,648 167 22,061 76,249
Disposal of subsidiaries (106,234) (5,688) (3,103) – – (12,220) (3,052) (2,111) (93,215) (225,623)
Disposals/Written off – (4,866) (42,516) (21,321) (18,797) (5,495) (8,708) (679) (19,675) (122,057)
Reclassifi cation from other
category of assets 24,741 – – – – 34,882 – – – 59,623
Reclassifi cation – – – – – (7,664) 1,590 – 6,074 –
Translation differences 12,359 299 5,697 – (1,636) 2,766 1,273 (1,734) 12,955 31,979
At 31 December 2007 1,151,105 – 4,385 841 14,242 325,475 73,727 3,095 231,781 1,804,651
Accumulated depreciation
At 1 January 2007 26,405 – 5,504 – 30,078 – 46,116 3,616 173,001 284,720
Depreciation charge
for the year 4,313 – 909 7 663 – 6,353 390 26,944 39,579
Acquisition of subsidiaries – – – – – – 66 142 15,856 16,064
Disposal of subsidiaries – – – – – – (584) (1,873) (65,838) (68,295)
Disposals/Written off – – (6,791) – (27,677) – (7,647) (685) (23,340) (66,140)
Reclassifi cation – – – – – – 11 – (11) –
Translation differences 340 – 517 – 3,283 – 1,773 1,342 2,850 10,105
At 31 December 2007 31,058 – 139 7 6,347 – 46,088 2,932 129,462 216,033
Carrying amount
At 1 January 2007 1,141,395 10,255 38,803 21,321 259 180,308 17,192 3,227 77,163 1,489,923
At 31 December 2007 1,120,047 – 4,246 834 7,895 325,475 27,639 163 102,319 1,588,618
148
Notes to the Financial Statements
3. PROPERTY, PLANT AND EQUIPMENT (cont’d) Plant, machinery Furniture, fi ttings and improvements and equipment Motor vehicles Total The Company $’000 $’000 $’000 $’000
Cost
At 1 January 2008 8,840 8,454 431 17,725
Additions 1,442 3,376 – 4,818
Disposals/Written off (32) (1,166) – (1,198)
At 31 December 2008 10,250 10,664 431 21,345
Accumulated depreciation
At 1 January 2008 3,470 4,985 364 8,819
Depreciation charge for the year 2,202 1,624 54 3,880
Disposals/Written off (28) (140) – (168)
At 31 December 2008 5,644 6,469 418 12,531
Carrying amount
At 1 January 2008 5,370 3,469 67 8,906
At 31 December 2008 4,606 4,195 13 8,814
Cost
At 1 January 2007 3,402 5,770 794 9,966
Additions 5,656 2,926 – 8,582
Disposals/Written off (218) (242) (363) (823)
At 31 December 2007 8,840 8,454 431 17,725
Accumulated depreciation
At 1 January 2007 3,290 4,242 673 8,205
Depreciation charge for the year 389 961 54 1,404
Disposals/Written off (209) (218) (363) (790)
At 31 December 2007 3,470 4,985 364 8,819
Carrying amount
At 1 January 2007 112 1,528 121 1,761
At 31 December 2007 5,370 3,469 67 8,906
149
4. INTANGIBLE ASSETS Goodwill on consolidation Others^ Total The Group $’000 $’000 $’000
Cost
At 1 January 2008 34,711 17,608 52,319
Additions 557,306 640 557,946
Reclassifi cation from other category of assets – 5,344 5,344
Written off/Charged to income statement (4,950) (339) (5,289)
Translation differences (1,942) (388) (2,330)
At 31 December 2008 585,125 22,865 607,990
Accumulated amortisation and impairment loss
At 1 January 2008 9,942 4,467 14,409
Amortisation charge for the year – 2,003 2,003
Reclassifi cation from other category of assets – 3,655 3,655
Written off – (339) (339)
Translation differences – (674) (674)
At 31 December 2008 9,942 9,112 19,054
Carrying amount
At 1 January 2008 24,769 13,141 37,910
At 31 December 2008 575,183 13,753 588,936
Cost
At 1 January 2007 32,130 18,368 50,498
Additions 2,953 211 3,164
Written off (2,953) (1,200) (4,153)
Translation differences 2,581 229 2,810
At 31 December 2007 34,711 17,608 52,319
Accumulated amortisation and impairment loss
At 1 January 2007 8,464 3,277 11,741
Amortisation charge for the year – 1,188 1,188
Written off – (368) (368)
Translation differences 1,478 370 1,848
At 31 December 2007 9,942 4,467 14,409
Carrying amount
At 1 January 2007 23,666 15,091 38,757
At 31 December 2007 24,769 13,141 37,910
^ Others comprised trademarks, franchises, patents and licences.
150
Notes to the Financial Statements
4. INTANGIBLE ASSETS (cont’d)
The aggregate carrying amounts of goodwill allocated to each cash-generating unit (“CGU”) as at 31 December are as follows:
The Group
2008 2007 Note $’000 $’000
The Ascott Group Limited (a) 552,356 –
Serviced residences in Europe (b) 22,827 24,769
At 31 December 575,183 24,769
(a) Acquisition of 33.5% interest in The Ascott Group Limited
In January 2008, the Company, through its wholly owned subsidiary, Somerset Capital Pte Ltd, announced its intention to
make a voluntary unconditional cash offer to acquire all the issued ordinary shares in the capital of The Ascott Group
Limited other than those already held by the Group. The total cash consideration for this acquisition amounted to $960.0
million. The acquisition was completed on 28 April 2008 and following that, The Ascott Group Limited became an indirect
wholly owned subsidiary of the Company.
The recoverable amounts are determined based on the value-in-use calculation using discounted cash fl ow projections for
the next 3 years and using a discount rate of 6.8% per annum. The key assumptions used related to expected changes in
average room rates and occupancy and direct costs.
The Group believes that any reasonably possible changes in the above key assumptions applied are not likely to materially
cause the recoverable amount to be lower than its carrying amount.
(b) Serviced Residence Business in Europe
For the purposes of goodwill impairment testing, the recoverable amount of the serviced residences in Europe is determined
using 10-year cash fl ow projections. The cash fl ow projections represent the rental income less related costs which the
Group will earn and are based on past experience and expectations for these serviced residences in general.
Cash fl ows are projected using the estimated growth rate of 2.5% (2007: 3%) per annum. The growth rate used is based
on historical growth and past experience and does not exceed the currently estimated long-term average growth rate for
the business in which the CGU operates. A pre-tax discount rate of 9.9% (2007: 7.75%) has been applied to the cash fl ow
projections.
The Group believes that any reasonably possible changes in the above key assumptions applied are not likely to materially
cause the recoverable amount to be lower than its carrying amount.
5. INVESTMENT PROPERTIES The Group
2008 2007 $’000 $’000
At 1 January 6,208,211 5,372,184
Acquisition of subsidiaries 8,072 1,281,869
Disposal of subsidiaries (1,460,043) (1,114,502)
Additions/Transfer from Properties Under Development 953,141 974,943
Disposals (1,243,098) (1,189,786)
Revaluation gains 300,682 778,831
Translation differences (512,126) 104,672
At 31 December 4,254,839 6,208,211
151
5. INVESTMENT PROPERTIES (cont’d)
(a) Investment properties are stated at fair value based on internal valuations or independent professional valuation. In
determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions
used to determine the fair value of investment properties include market-corroborated capitalisation yield, terminal yield
and discount rate. In relying on the valuation reports, management has exercised its judgement and is satisfi ed that the
valuation methods and estimates are refl ective of current market conditions.
The fair values are based on open market values, being the estimated amount for which a property could be exchanged
on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties
had each acted knowledgeably and without compulsion.
The valuers have considered valuation techniques including the direct comparison method, capitalisation approach and/
or discounted cash fl ows in arriving at the open market value as at the balance sheet date.
The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices
to that refl ective of the investment properties. The capitalisation approach capitalises an income stream into a present
value using revenue multipliers or single-year capitalisation rates. The discounted cash fl ow method involves the estimation
and projection of an income stream over a period and discounting the income stream with an internal rate of return to
arrive at the market value.
Independent professional valuations were carried out in December 2008 by the following valuers:
CB Richard Ellis
Colliers International
Colliers, Jordan Lee & Jaafar Sdn Bhd
DTZ Debenham Tie Leung
Henry Butcher Malaysia (Sarawak) Sdn Bhd
Jones Lang Lasalle
Knight Frank Pte Ltd
M3 Property
PPC International Sdn Bhd
Savills Valuation and Professional Services Limited
(b) As at 31 December 2008, certain investment properties with carrying value of approximately $2,919.2 million (2007: $3,776.9
million) were mortgaged to banks to secure credit facilities for the Group (notes 20 and 21).
(c) Investment properties of the Group are held mainly for use by tenants under operating leases. Certain leases contain an
initial non-cancellable period of up to 15 (2007: 15) years, with an option to renew at renegotiated terms.
152
Notes to the Financial Statements
6. PROPERTIES UNDER DEVELOPMENT The Group
2008 2007 $’000 $’000
Cost
At 1 January 578,297 304,563
Translation differences 40,550 (4,291)
Additions 1,077,848 388,790
Disposals/Transfer to Investment Properties (466,617) (110,765)
Disposal of subsidiaries (628,339) –
At 31 December 601,739 578,297
Accumulated impairment losses
At 1 January 9,092 8,447
Translation differences (399) 117
Allowance (written back)/made (899) 528
At 31 December 7,794 9,092
Carrying amount
At 1 January 569,205 296,116
At 31 December 593,945 569,205
During the fi nancial year, interest capitalised as cost of properties under development amounted to approximately $6.2 million
(2007: $1.2 million).
7. INTERESTS IN SUBSIDIARIES The Company
2008 2007 $’000 $’000
(a) Unquoted shares, at cost 3,259,325 2,306,257
Less:
Allowance for impairment loss (47,764) (47,764)
3,211,561 2,258,493
Amounts owing by subsidiaries:
Loan accounts
– interest bearing 2,730,000 1,606,505
– interest free 886,726 –
3,616,726 1,606,505
6,828,287 3,864,998
(b) The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(c) Details of the subsidiaries are set out in note 37.
153
8. ASSOCIATES The Group
2008 2007 $’000 $’000
(a) Interests in associates
Investment in associates 6,306,667 5,018,246
Less:
Allowance for impairment loss (3,490) –
6,303,177 5,018,246
Amounts owing by associates:
Loan accounts
– interest free 150,746 149,190
– interest bearing 323,890 61,439
474,636 210,629
6,777,813 5,228,875
(i) During the year, an allowance for impairment loss amounting to $3.5 million was made to reduce the carrying value
of an investment in an associate to its recoverable amount. A signifi cant part of the recoverable amount is represented
by the fair value of a property under development in which valuation was performed by an independent professional
valuer on market value basis at the fi nancial year end.
(ii) The loans to associates form part of the Group’s net investment in associates. These loans are unsecured and
settlement is neither planned nor likely to occur in the foreseeable future.
(iii) Loan accounts include an amount of approximately $322.0 million (2007: $154.9 million) which is subordinated to the
repayment of borrowings of certain associates.
(iv) The Group’s share of the contingent liabilities of the associates is $44.3 million (2007: Nil).
The Group
2008 2007 Note $’000 $’000
(b) Amounts owing by/(to) associates:
Current accounts (unsecured)
– interest free (trade) 68,458 31,087
– interest free (non-trade) 279,800 205,402
– interest bearing (non-trade) 194,627 291,231
542,885 527,720
Less:
Allowance for doubtful receivables (4,384) (30,588)
13 538,501 497,132
Current accounts (mainly non-trade and unsecured)
– interest free (289,316) (322,875)
– interest bearing (111,904) (108,784)
17 (401,220) (431,659)
(c) Details of the associates are set out in note 38.
(d) The movement in allowance for doubtful receivables relates mainly to amounts written back and utilised during the year.
154
Notes to the Financial Statements
8. ASSOCIATES (cont’d)
(e) The fi nancial information of the associates is as follows: The Group
2008 2007 $’000 $’000
Balance sheet
Total assets 35,419,789 27,184,243
Total liabilities 16,460,710 10,966,777
Income statement
Revenue 2,215,625 2,404,972
Profi t after taxation 976,857 2,800,496
9. JOINTLY-CONTROLLED ENTITIES The Group
2008 2007 $’000 $’000
(a) Interests in jointly-controlled entities
Investment in jointly-controlled entities 616,507 762,743
Amounts owing by jointly-controlled entities:
Loan accounts
– interest free 49,102 40,608
– interest bearing 421,171 418,507
470,273 459,115
1,086,780 1,221,858
(i) The loans to jointly-controlled entities form part of the Group’s net investment in jointly-controlled entities. These
loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(ii) Loan accounts include an amount of approximately $399.3 million (2007: $310.6 million) which is subordinated to the
repayment of borrowings of certain jointly-controlled entities. The Group
2008 2007 Note $’000 $’000
(b) Amounts owing by/(to) jointly-controlled entities:
Current accounts (unsecured)
– interest free (trade) 22,623 14,297
– interest free (non-trade) 361,040 273,254
– interest bearing (non-trade) 42,231 25,423
425,894 312,974
Less:
Allowance for doubtful receivables (8,811) (19)
13 417,083 312,955
Current accounts (unsecured)
– interest free (mainly non-trade) (11,477) (43,361)
– interest bearing (non-trade) (31,789) –
17 (43,266) (43,361)
155
9. JOINTLY-CONTROLLED ENTITIES (cont’d)
(c) Details of the jointly-controlled entities are set out in note 39.
(d) The movement in allowance for doubtful receivables relates mainly to provision made during the year.
(e) The Group’s share of the jointly-controlled entities’ results, assets and liabilities is as follows:
The Group
2008 2007 $’000 $’000
Balance sheet
Investment properties 166,967 464,292
Properties under development 908,902 1,317,308
Other non-current assets 515,551 105,233
1,591,420 1,886,833
Current assets 1,919,183 1,766,128
Less:
Current liabilities (1,144,141) (765,655)
Net current assets 775,042 1,000,473
2,366,462 2,887,306
Less:
Non-current liabilities (1,711,700) (1,412,201)
Net assets 654,762 1,475,105
Income statement
Revenue 688,688 483,554
Expenses (596,304) (98,591)
Fair value (losses)/gains on investment properties (10,772) 253,694
Profi t before taxation 81,612 638,657
Taxation (24,793) (34,275)
Profi t after taxation 56,819 604,382
(f) The Group’s share of the capital commitments of the jointly-controlled entities is $279.6 million (2007: $1,499.7 million).
(g) The Group’s share of the contingent liabilities of the jointly-controlled entities is $7.1 million (2007: Nil).
(h) In 2007, a jointly-controlled entity of the Group entered into a sale and purchase agreement for the en-bloc purchase of
Gillman Heights Condominium. The acquisition was approved by the Strata Titles Board (“STB”) on 21 December 2007,
but certain groups of owners had, on 16 January 2008 and 11 February 2008 respectively, fi led appeals to the Singapore
High Court (the “Court”) against the approval order granted by the STB. The Court, had on 25 June 2008, delivered
judgment in favour of the en-bloc transaction but some of the minority owners had again fi led an appeal to the Court of
Appeal to object the en-bloc transaction. On 9 February 2009, the Court of Appeal dismissed the appeal by the group of
minority owners.
156
Notes to the Financial Statements
10. FINANCIAL ASSETS The Group
2008 2007 $’000 $’000
(a) Non-current fi nancial assets
Fair value through profi t or loss convertible bonds 181,750 161,560
Available-for-sale equity securities 324,301 442,216
506,051 603,776
(b) Current fi nancial assets
Available-for-sale money market investment 195,000 301,540
Available-for-sale debt securities 58,885 –
253,885 301,540
11. OTHER NON-CURRENT ASSETS The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Club memberships 675 744 147 147
Derivative assets 2,955 63,095 – –
Loans to staff (interest free) 143 143 – –
Other receivables 15,426 17,107 – –
19,199 81,089 147 147
As at 31 December 2008, other receivables include: (i) an amount of $6.3 million interest receivable from an associate which
bears interest at 3.39% per annum and repayable on 13 January 2012; and (ii) an amount of $2.0 million interest receivable from
a jointly-controlled entity which bears interest at 3.10% per annum and repayable on 30 November 2011.
As at 31 December 2007, other receivables included an amount of $13.9 million due from a third party which bears interest at
10.7% per annum, is unsecured and repayable in October 2009, or such earlier date as mutually agreed. The amount has been
reclassifi ed to current assets (note 15).
12. DEVELOPMENT PROPERTIES FOR SALE The Group
2008 2007 $’000 $’000
(a) Properties in the course of development, at cost 3,524,603 4,252,616
Less:
Allowance for foreseeable losses (17,190) (17,190)
3,507,413 4,235,426
Add:
Attributable profi t 156,301 372,875
3,663,714 4,608,301
Less:
Progress billings (645,741) (1,348,057)
3,017,973 3,260,244
(b) Completed units, at cost 329,195 280,534
3,347,168 3,540,778
157
12. DEVELOPMENT PROPERTIES FOR SALE (cont’d)
(c) During the fi nancial year, the following interest and securitisation costs were capitalised as cost of development properties
for sale: The Group
2008 2007 Note $’000 $’000
Interest and securitisation costs paid and payable 28(e) 69,292 99,221
Less:
Interest received and receivable from fi xed deposit project accounts 28(a) (879) (2,000)
68,413 97,221
(d) As at 31 December 2008, certain development properties for sale amounting to approximately $1,274.6 million (2007: $1,434.7
million) were mortgaged to banks to secure credit facilities of the Group (notes 20 and 21).
(e) As at 31 December 2008, certain properties in Australia amounting to approximately A$73.6 million (2007: A$65.4 million),
equivalent to $73.2 million (2007: $83.7 million), were acquired through unconditional exchange contracts with various
land vendors. The related amount owing to land vendors is secured over the title of the properties being purchased (notes
17 and 18).
(f) As at 31 December 2008, there was a development property for sale amounting to $246.0 million (2007: $420.3 million)
whose future receivables were sold to third parties. As part of the arrangement of the sale, the relevant subsidiary of the
Group has provided a fi xed and fl oating charge over assets relating to the project (including the land on which the project
is being built and the unsold units) to the third parties (note 18).
(g) If the Group had adopted the completion of construction method, the effects on the fi nancial statements for the fi nancial
year ended 31 December 2008 would have been as follows: The Group Increased/(Decreased) by
2008 2007 $’000 $’000
Revenue 472,212 (275,139)
Profi t attributable to the equity holders of the Company 26,660 (138,954)
Accumulated profi ts as at 1 January (223,566) (84,556)
Development properties for sale as at 1 January 239,979 238,912
Development properties for sale as at 31 December (72,754) 239,979
Interests in associates 12,035 (11,489)
Interests in jointly-controlled entities (94,049) (48,021)
158
Notes to the Financial Statements
13. TRADE AND OTHER RECEIVABLES The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Accrued receivables (b) 52,410 62,929 – –
Trade receivables 14 251,516 618,370 7 59
Derivative assets 5,490 8,188 – –
Deposits, prepayments and other receivables 15 351,304 486,049 639 2,200
Amounts owing by:
– associates 8(b) 538,501 497,132 – –
– jointly-controlled entities 9(b) 417,083 312,955 – –
– investees:
– interest free 34,078 7,180 – –
– interest bearing 2,268 89 – –
– related corporations 19 – – 1,423,049 1,679,083
– minority interests
(unsecured and interest free) 62,449 71,458 – –
1,715,099 2,064,350 1,423,695 1,681,342
(a) As at 31 December 2008, certain trade and other receivables amounting to approximately $357.3 million (2007: $546.4
million) were mortgaged to banks to secure credit facilities of the Group (notes 20 and 21).
(b) In accordance with the Group’s accounting policy, income is recognised based on the progress of construction work for
development properties for sale. Upon receipt of Temporary Occupation Permit, the balance of sales consideration to be
billed is included as accrued receivables.
14. TRADE RECEIVABLES The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Trade receivables 261,155 626,531 7 59
Less:
Allowance for doubtful receivables (9,639) (8,161) – –
251,516 618,370 7 59
(a) The maximum exposure to credit risk for trade receivables at the reporting date (by Strategic Business Units) is:
The Group
2008 2007 $’000 $’000
CapitaLand Residential Singapore 9,102 240,579
CapitaLand China Holdings 2,154 14,854
CapitaLand Commercial 38,916 21,509
CapitaLand Retail 15,084 14,310
Ascott 39,359 41,712
CapitaLand Financial 28,285 25,361
Australand 114,420 259,324
Others 4,196 721
251,516 618,370
159
14. TRADE RECEIVABLES (cont’d)
(b) The ageing of trade receivables at the reporting date is: Allowance for Allowance for doubtful doubtful Gross Amount receivables Gross Amount receivables 2008 2008 2007 2007 The Group $’000 $’000 $’000 $’000
Not past due 170,853 – 315,769 –
Past due 1 – 30 days 9,292 (55) 31,054 (106)
Past due 31 – 90 days 23,971 (3,207) 187,801 (373)
More than 90 days 57,039 (6,377) 91,907 (7,682)
261,155 (9,639) 626,531 (8,161)
(c) The movement in allowances for doubtful receivables in respect of trade receivables during the year is as follows:
The Group
2008 2007 $’000 $’000
At 1 January (8,161) (7,490)
Provision utilised 676 88
Provision during the year (2,086) (816)
Acquisition/disposal of subsidiaries (net) 6 178
Translation differences (74) (121)
At 31 December (9,639) (8,161)
Based on historical default rates, the Group believes that no allowance for doubtful receivables is necessary in respect of
the receivables not past due.
15. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Deposits 29,635 52,933 150 111
Prepayments 108,078 74,848 344 92
Other receivables 215,536 321,480 145 2,055
Less:
Allowance for doubtful receivables (19,076) (18,732) – (58)
196,460 302,748 145 1,997
Tax recoverable 17,131 55,520 – –
351,304 486,049 639 2,200
Other receivables include staff loans, interest receivables, deferred sales consideration and other recoverable. As at 31 December
2008, other receivables include an amount of $33.3 million due from a third party which bears interest ranging from 6% to 11%
per annum, is unsecured and repayable in October 2009, or such earlier date as mutually agreed. In 2007, the amount of this
receivable was $13.9 million and it was included under Other Non-Current Assets (note 11).
160
Notes to the Financial Statements
16. CASH AND CASH EQUIVALENTS The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Fixed deposits 3,452,899 3,303,997 756,994 1,530,721
Cash at banks and in hand 701,482 894,859 807 1,504
Amounts held under “Project Account Rules – 1997 Ed” 74,024 157,130 – –
4,228,405 4,355,986 757,801 1,532,225
(a) The withdrawal from amounts held under “Project Account Rules – 1997 Ed” are restricted to payments for expenditure
incurred on development projects.
(b) As at 31 December 2008, there was a charge over all monies from time to time standing to the credit of the project
accounts amounting to $25.3 million (2007: $85.5 million) in respect of certain development properties for sale whose
future receivables were sold (note 18).
17. TRADE AND OTHER PAYABLES The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Trade payables 111,444 159,350 1,123 883
Accruals (a) 589,292 541,750 28,222 20,190
Accrued development expenditure 327,053 469,930 – –
Accrued capital expenditure (b) 24,333 55,339 – –
Other payables (c) 339,133 495,615 2,909 5,056
Rental and other deposits 33,957 44,231 2 3
Derivative liabilities 37,231 602 – –
Provisions (d) 35,654 – – –
Liability for employee benefi ts 24 56,006 72,029 38,296 50,833
Amounts owing to:
– associates 8(b) 401,220 431,659 – –
– jointly-controlled entities 9(b) 43,266 43,361 – –
– related corporations 19 – – 63,394 135,294
Minority interests (unsecured):
– interest free 67,966 74,619 – –
– interest bearing 63,488 56,692 – –
Proceeds from sale of future receivables 18(c) 227,118 444,331 – –
2,357,161 2,889,508 133,946 212,259
(a) Accruals included accrued interest payable, accrued property, plant and equipment purchases and accrued administrative
expenses.
(b) Accrued capital expenditure relates to amounts owing by a subsidiary of the Group to land vendors under certain
unconditional contracts entered into to purchase properties for future developments. The total acquisition cost of the
properties has been included in development properties for sale and the amount payable is secured over the relevant
development properties.
(c) Other payables included retention sums and amounts payable in connection with capital expenditure incurred.
161
17. TRADE AND OTHER PAYABLES (cont’d)
(d) Movements in provisions relate to provision for income support as follows:
The Group
2008 2007 $’000 $’000
At 1 January – 9,545
Provision made/(written-back) during the year 35,654 (9,545)
At 31 December 35,654 –
The provision for income support was made in conjunction with the sale of a property in 2008. Under the sale and
purchase agreement, a subsidiary of the Group is obligated to provide income support to the buyer to ensure a minimum
annual net property income equivalent to 4.25% per annum of the sales consideration for a period of 5 years from the date
of sale.
In 2007, the provision for income support relating to 2 other investment properties was written back as the provision was
no longer required.
18. OTHER NON-CURRENT LIABILITIES The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Amounts owing to minority interests (unsecured) (a)
– interest free 1,415 61,324 – –
– interest bearing 16,400 32,686 – –
Liability for employee benefi ts 24 71,838 33,331 63,869 32,134
Derivative liabilities 145,398 11,446 – –
Customer deposits and other non-current payables (b) 82,488 62,572 – –
Proceeds from sale of future receivables (c) – 230,903 – –
317,539 432,262 63,869 32,134
(a) The amounts owing to minority interests are not expected to be repaid in the next 12 months.
(b) The other non-current payables include an amount of A$49.1 million (2007: A$22.1 million) equivalent to $48.9 million
(2007: $28.4 million), owing to land vendors on terms similar to those described in note 17(b).
(c) Proceeds from sale of future receivables The Group
2008 2007 Note $’000 $’000
Current 17 227,118 444,331
Non-current – 230,903
227,118 675,234
162
Notes to the Financial Statements
18. OTHER NON-CURRENT LIABILITIES (cont’d)
(c) Proceeds from sale of future receivables (cont’d)
These relate to the sale of future receivables in respect of a residential project in Singapore. The terms of the arrangement
for the sale of future receivables included:
(i) a fi xed and fl oating charge over the assets of the subsidiary undertaking the project (note 12);
(ii) a fl oating charge over all monies (note 16);
(iii) an assignment of all the subsidiary’s present and future rights, title and interest in, and all benefi ts accrued and to
accrue to the subsidiary under the contract for sale entered into with each buyer of a unit of the project; and
(iv) an assignment of all the subsidiary’s present and future rights, title to and interest in:
(a) all contracts and agreements entered into by the subsidiary with the consultants and contractors and all
construction guarantees issued in favour of the subsidiary; and
(b) all the policies and contracts of insurance taken out by the subsidiary.
19. AMOUNTS OWING BY/(TO) RELATED CORPORATIONS The Company
2008 2007 Note $’000 $’000
Current
Amounts owing by subsidiaries:
– current accounts, mainly non-trade and interest bearing 30,891 22,681
– current loan:
– interest free 676,154 512,984
– interest bearing 743,803 1,170,452
1,419,957 1,683,436
Less:
Allowance for doubtful receivables (27,799) (27,034)
1,392,158 1,656,402
13 1,423,049 1,679,083
Amounts owing (to) subsidiaries:
– current accounts, mainly non-trade and interest bearing (16) (15)
– current loan (interest free) (63,378) (135,279)
17 (63,394) (135,294)
All balances with related corporations are unsecured and repayable on demand.
163
20. BANK BORROWINGS The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Bank borrowings
– secured 1,331,508 1,986,840 – –
– unsecured 3,313,984 3,678,401 – 67,213
4,645,492 5,665,241 – 67,213
Repayable:
– not later than 1 year 1,005,902 1,208,505 – 67,213
– after 1 year 3,639,590 4,456,736 – –
4,645,492 5,665,241 – 67,213
(a) As at 31 December 2008, the effective interest rates for bank borrowings ranged from 1.04% to 9.64% (2007: 2.96% to
8.24%) per annum.
(b) Secured bank borrowings The Group
2008 2007 $’000 $’000
Repayable:
Not later than 1 year 245,875 387,681
Between 1 and 2 years 638,014 743,770
Between 2 and 5 years 347,325 756,912
After 5 years 100,294 98,477
After 1 year 1,085,633 1,599,159
1,331,508 1,986,840
Bank borrowings are secured by the following, details of which are disclosed in the respective notes to the fi nancial
statements:
(i) mortgages on the borrowing subsidiaries’ property, plant and equipment, investment properties, properties under
development, development properties for sale and trade receivables; and
(ii) assignment of all rights, titles and benefi ts with respect to the properties mortgaged.
(c) Unsecured bank borrowings
The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Repayable:
Not later than 1 year 760,027 820,824 – 67,213
Between 1 and 2 years 1,014,167 315,568 – –
Between 2 and 5 years 1,539,790 2,542,009 – –
After 1 year 2,553,957 2,857,577 – –
3,313,984 3,678,401 – 67,213
164
Notes to the Financial Statements
21. DEBT SECURITIES
Debt securities comprise fi xed rate notes, fl oating rate notes, hybrid rate notes and bonds issued by the Group and the Company.
The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Convertible bonds (unsecured) 2,513,056 1,293,439 2,518,579 1,293,439
Notes issued 2,663,064 3,287,930 – 436,500
Less:
Notes purchased (but not cancelled) (31,750) (377,250) – (345,500)
Notes outstanding 2,631,314 2,910,680 – 91,000
5,144,370 4,204,119 2,518,579 1,384,439
Secured notes 1,042,251 1,281,859 – –
Unsecured notes/bonds 4,102,119 2,922,260 2,518,579 1,384,439
5,144,370 4,204,119 2,518,579 1,384,439
Repayable:
Not later than 1 year 865,113 594,300 – 91,000
Between 1 and 2 years 402,139 821,941 – –
Between 2 and 5 years 985,571 1,116,110 – –
After 5 years 2,891,547 1,671,768 2,518,579 1,293,439
After 1 year 4,279,257 3,609,819 2,518,579 1,293,439
5,144,370 4,204,119 2,518,579 1,384,439
(a) As at 31 December 2008, the effective interest rates for debt securities ranged from 2.03% to 8.87% (2007: 3.20% to
8.10%) per annum.
(b) Convertible bonds (unsecured) The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Convertible bonds 2,724,477 1,430,000 2,730,000 1,430,000
Less:
Bond discounts
At 1 January (136,561) (57,858) (136,561) (57,858)
Additions (117,000) (92,000) (117,000) (92,000)
Amortisation 28(e) 31,405 13,297 31,405 13,297
At 31 December (222,156) (136,561) (222,156) (136,561)
Add:
Bond premium
At 1 January – – – –
Additions 28(e) 10,735 – 10,735 –
At 31 December 10,735 – 10,735 –
2,513,056 1,293,439 2,518,579 1,293,439
165
21. DEBT SECURITIES (cont’d)
(b) Convertible bonds (unsecured) (cont’d)
(i) In November 2006, the Company issued $430.0 million principal amount of Convertible Bonds (the “2006 Bonds”)
due 2016 which carry interest rate at 2.10% per annum. The 2006 Bonds are convertible by holders into new ordinary
shares in the capital of the Company at the conversion price of $7.17 at any time on or after 26 December 2006 and
prior to the close of business on 5 November 2016. The 2006 Bonds may be redeemed, in whole or in part, at the
option of the Company at any time on or after 15 November 2011 and not less than seven business days prior to 15
November 2016 (subject to the satisfaction of certain conditions). Unless previously redeemed by the holder on 15
November 2013 or by the Company at any time on or after 15 November 2013, the fi nal redemption date of the 2006
Bonds is 15 November 2016. The redemption price upon maturity is equal to the principal amount of the 2006 Bonds
being redeemed.
(ii) In June 2007, the Company issued $1.0 billion principal amount of Convertible Bonds (the “2007 Bonds”) due 2022
which carry interest rate at 2.95% per annum. The 2007 Bonds are convertible by holders into new ordinary shares
in the capital of the Company at the conversion price of $13.7255 at any time on or after 20 June 2008 and prior to
the close of business on 10 June 2022. The 2007 Bonds may be redeemed, in whole or in part, at the option of the
Company at any time on or after 20 June 2014 and not less than seven business days prior to 20 June 2022 (subject
to satisfaction of certain conditions). Unless previously redeemed by the holder on 20 June 2017 or 20 June 2019 or
by the Company at any time on or after 20 June 2014, the fi nal redemption date of the 2007 Bonds is 20 June 2022.
The redemption price upon maturity is equal to the principal amount of the 2007 Bonds being redeemed.
(iii) In March 2008, the Company issued $1.3 billion principal amount of Convertible Bonds (the “2008 Bonds”) due 2018
which carry interest rate at 3.125% per annum. The 2008 Bonds are convertible by holders into new ordinary shares
in the capital of the Company at the conversion price of $8.5137 at any time on or after 15 April 2008 and prior to the
close of business on 23 February 2018. The 2008 Bonds may be redeemed, in whole or in part, at the option of the
Company at any time on or after 5 March 2013 and not less than seven business days prior to 5 March 2018 (subject
to satisfaction of certain conditions). Unless previously redeemed by the holder on 5 March 2015 or by the Company
at any time on or after 5 March 2013, the fi nal redemption date of the 2008 Bonds is 5 March 2018. The redemption
price upon maturity is equal to 109.998% of the principal amount of the 2008 Bonds being redeemed.
(c) Secured debt securities
(i) A stapled entity of the Group, Australand, issued Commercial Mortgage-backed Securities amounting to A$680.5
million (2007: A$680.5 million), equivalent to $677.2 million (2007: $872.1 million), maturing on 25 June 2009 and 10
March 2011.
(ii) Australand has also issued Unrated Floating Rate Notes amounting to A$261.8 million (2007: A$261.8 million),
equivalent to $260.5 million (2007: $335.2 million), maturing on 25 June 2009, 20 October 2010 and 10 March 2011.
(iii) These notes are fully secured by a fi rst ranking real property mortgage over specifi c investment properties and by a
fi xed and fl oating charge over some of the assets of Australand. Details on assets pledged are disclosed in respective
notes to the fi nancial statements.
166
Notes to the Financial Statements
21. DEBT SECURITIES (cont’d)
(d) Unsecured debt securities
A subsidiary, The Ascott Group Limited (“Ascott”) established a $1.0 billion multicurrency medium term note programme
(“MTN Programme”) during the year. Under the MTN Programme, Ascott may from time to time issue notes in tranches of
one or more series in Singapore Dollars, US Dollars or any other currency and in such denominations as may be agreed
between the relevant dealer of the MTN Programme and Ascott. Each series or tranche of notes may bear fi xed, fl oating
or variable rates of interest.
During the year, Ascott issued $300.0 million Fixed Rate Notes, which are due from 2009 to 2011. The interest rates of
these notes ranged from 2.725% to 4.70% per annum. In 2007, Ascott issued $310.0 million of the notes, which are due
from 2010 to 2012. The notes comprise $245.0 million Fixed Rate Notes and $65.0 million Floating Rate Notes, and the
interest rates ranged from 2.97% to 3.58% per annum.
22. FINANCE LEASES
The Group had obligations under fi nance leases that are repayable as follows:
Principal Interest Lease Payments 2008 $’000 $’000 $’000
Repayable:
Not later than 1 year 4,212 2,350 6,562
Between 2 and 5 years 15,476 6,873 22,349
After 5 years 19,784 2,994 22,778
After 1 year 35,260 9,867 45,127
39,472 12,217 51,689
2007
Repayable:
Not later than 1 year 3,954 2,734 6,688
Between 2 and 5 years 16,873 8,250 25,123
After 5 years 25,962 4,541 30,503
After 1 year 42,835 12,791 55,626
46,789 15,525 62,314
23. DEFERRED INCOME
Deferred income represents mainly unrealised profi ts on project management services.
167
24. EMPLOYEE BENEFITS The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Liability for short term accumulating
compensated absences 2,432 1,662 204 171
Liability for long service leave entitlement 3,028 3,904 – –
Liability for cash-settled share-based payments 14,667 3,230 460 594
Liability for staff incentive 107,717 96,564 101,501 82,202
127,844 105,360 102,165 82,967
Current 17 56,006 72,029 38,296 50,833
Non-current 18 71,838 33,331 63,869 32,134
127,844 105,360 102,165 82,967
(a) Long service leave
This liability relates principally to provision made by a foreign subsidiary in relation to employees’ leave entitlement granted
after certain qualifying periods based on duration of employees’ services rendered.
(b) Staff incentive
This relates to staff incentive payable which is connected with the Group’s fi nancial performance achieved over a period
of time.
(c) Equity compensation benefi ts
Share Plans of the Company
The Share Option Plan, the Performance Share Plan and the Restricted Stock Plan (collectively referred to as the “Share
Plans”) of the Company were approved and adopted by its members at an Extraordinary General Meeting held on 16
November 2000. The Share Plans are administered by the Company’s Executive Resource and Compensation Committee
(“ERCC”) comprising Mr Lim Chin Beng, Mr Hsuan Owyang and Mr Peter Seah Lim Huat. On 1 January 2009, Mr Hsuan
Owyang resigned as a member of ERCC.
Share Option Plan
The Company ceased to grant options under the Share Option Plan with effect from 2007. Statutory information regarding
the Share Option Plan are set out below:
(i) The exercise price of the options is set either at:
– A price equals to the volume-weighted average price on the SGX-ST over the three consecutive trading days
immediately preceding the grant of the option (“Market Price”), or such higher price as may be determined by
the ERCC in its absolute discretion; or
– A discount not exceeding 20% of the Market Price in respect of that option.
(ii) The options vest between 1 year to 4 years from the grant date.
(iii) The options granted expire after 5 or 10 years from the dates of the grant.
168
Notes to the Financial Statements
24. EMPLOYEE BENEFITS (cont’d)
(c) Equity compensation benefi ts (cont’d)
Share Option Plan (cont’d)
Movements in the number of outstanding options and their related weighted average exercise prices are as follows:
Weighted average No. of Weighted average No. of exercise price options exercise price options 2008 2008 2007 2007 $ (’000) $ (’000)
At 1 January 2.83 31,127 2.44 57,755
Forfeited/Expired 3.57 (1,093) 3.27 (1,924)
Exercised 2.30 (9,990) 1.81 (24,704)
At 31 December 3.05 20,044 2.83 31,127
Exercisable on 31 December 2.61 8,261 2.14 6,914
Options exercised in 2008 resulted in 9,990,336 (2007: 24,703,638) shares being issued at a weighted average market
price of $6.25 (2007: $7.62) each. Options were exercised on a regular basis throughout the year. The weighted average
share price during the year was $4.66 (2007: $7.46).
Options outstanding at the end of the year are summarised below:
Options Weighted Options Weighted outstanding average outstanding average 2008 contractual life 2007 contractual life Range of Exercise Price (’000) (years) (’000) (years)
$0.82 to $0.96 372 4.18 900 3.91
$0.97 to $1.02 1,683 4.97 4,216 5.75
$1.03 to $1.61 150 4.84 498 3.05
$1.62 to $1.95 268 2.26 650 2.83
$1.96 to $2.69 5,389 5.96 8,673 6.90
$2.70 to $4.67 12,182 6.87 16,190 7.84
20,044 31,127
Of the outstanding options as at 31 December 2008, there were 1,180,000 (2007: 2,176,300) options held by the directors
of the Company. This included 600,000 (2007: 1,200,000) options held by Mr Liew Mun Leong, the President and Chief
Executive Offi cer of the Company.
The fair value of services received in return for options granted is measured by reference to the fair value of options
granted. The estimate of the fair value of the options granted is measured based on Enhanced Trinomial (Hull and White)
valuation model.
The share price is based on volume-weighted average share price for 3 consecutive trading days prior to the grant date.
The expected volatility is based on the historic volatility and calculated based on 36 months prior to the date of grant. The
Company uses 10 (or 5) years risk-free rate for options with a 10 (or 5) years contractual term. Expected dividend yield is
based on expected dividend payout over the 1-year volume-weighted average share price prior to the grant date. Pre-
vesting forfeiture rates and post-vesting forfeiture rates are based on historical option forfeiture and employee turnover
rates. Exercise multiple is estimated based on historical employee exercise behaviour.
169
24. EMPLOYEE BENEFITS (cont’d)
(c) Equity compensation benefi ts (cont’d)
Performance Share Plan
This relates to compensation costs of the Company’s Performance Share Plan refl ecting the benefi ts accruing to the
employees over the service period to which the performance criteria relate.
The number of shares outstanding under the Performance Share Plan at the end of the year is summarised below:
2008 2007 Year of Award (’000) (’000)
At 1 January 8,809 9,004
Granted 6,268 2,711
Forfeited/Cancelled (1,108) (1,081)
Additional shares granted arising from modifi cation – 55
Released (5,544) (1,880)
At 31 December 8,425 8,809
The fi nal number of shares released will depend on the achievement of pre-determined targets over a three-year
performance period. No shares will be released if the threshold targets are not met at the end of the performance period.
On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum
of 200% of the baseline award.
The fair values of the shares are determined using Monte Carlo simulation method at the measurement date which projects
future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and
assumptions are set out below:
Year of Award 2008 2007
Weighted average fair value of shares and assumptions
Weighted average fair value at measurement date $7.18 $6.07
Expected volatility based on 36 months closing share price prior to grant date 29.22% 26.50%
MSCI AC Asia Pacifi c Free ex-Japan Real Estate Index
(2007: MSCI AC Asia Pacifi c Free ex-Japan Industrials Index)
annualised volatility based on 36 months prior to grant date 16.15% 14.05%
Share price at grant date $6.97 $7.00
Risk-free interest rate equals to the implied yield on zero-coupon Singapore
Government bond with a term equal to the length of vesting period 1.23% 2.95%
Expected dividend yield over 12 months volume-weighted share price prior to
the grant date 1.42% 1.29%
Correlation of return between MSCI AC Asia Pacifi c Free ex-Japan Real Estate Index
(2007: MSCI AC Asia Pacifi c Free ex-Japan Industrials Index)
and the Company’s share price measured over 36 months prior to the grant date 47.88% 48.10%
170
Notes to the Financial Statements
24. EMPLOYEE BENEFITS (cont’d)
(c) Equity compensation benefi ts (cont’d)
Restricted Stock Plan – Equity-settled/Cash-settled
This relates to compensation costs of the Company’s Restricted Stock Plan refl ecting the benefi ts accruing to the
employees over the service period to which the performance criteria relate. The Company granted awards of shares under
the Restricted Stock Plan in place of options with effect from 2007.
With effect from 2008, the ERCC of the Company has instituted a set of share ownership guidelines for senior management
who received shares under the Restricted Stock Plan. Under these guidelines, members of the senior management team
are required to retain a portion of the total number of CapitaLand shares acquired through the Restricted Stock Plan which
will vary according to their job grades and base salaries.
The number of shares outstanding under the Restricted Stock Plan at the end of the year is summarised below:
2008 2007 Year of Award (’000) (’000)
At 1 January 4,552 –
Granted 8,529 4,838
Forfeited/Cancelled (889) (314)
Additional shares granted arising from modifi cation – 28
Released* (2,309) –
At 31 December** 9,883 4,552
* The number of shares released during the year was 2,309,409, of which 307,326 were cash settled.
** As at 31 December 2008, the number of shares awarded and outstanding was 9,883,459 (2007: 4,552,277), of which 1,358,003 (2007: 625,404) were to be cash settled.
The fi nal number of shares released will depend on the achievement of pre-determined targets at the end of a one-year
performance period. No shares will be released if the threshold targets are not met at the end of the performance period.
On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum
of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid
shares, their equivalent cash value or combinations thereof, at no cost.
Cash-settled contingent awards of shares are measured at their current fair value at each balance sheet date.
The fair values of the equity-settled contingent award of shares are determined using Monte Carlo simulation method at
the measurement date which projects future share price assuming log normal distribution based on Geometric Brownian
Motion Theory. The fair value and assumptions are set out below: Year of Award 2008 2007
Weighted average fair value of shares and assumptions
Weighted average fair value at measurement date $6.78 $6.78
Expected volatility based on 36 months closing share price prior to grant date 29.22% 26.50%
Share price at grant date $6.97 $7.00
Risk-free interest rate equals to the implied yield on zero-coupon Singapore
Government bond with a term equal to the length of vesting period 0.83% to 1.23% 2.78% to 2.95%
Expected dividend yield over 12 months volume-weighted share price prior to
the grant date 1.42% 1.29%
171
24. EMPLOYEE BENEFITS (cont’d)
(c) Equity compensation benefi ts (cont’d)
Share Plans of Subsidiaries
(i) Australand
Australand Employee Securities Ownership Plan
For Australand, a listed subsidiary of the Group, the Australand Employees Securities Ownership Plan (“Australand
ESOP”) offers a fi ve-year, interest-free loan to enable employees to purchase a specifi ed number of Australand
stapled securities allocated by Australand’s Remuneration Committee. The loan has limited recourse and the
employers’ obligations to repay the loan are limited to the market value of the securities at any time. The loan will be
partly repaid by distributions on the securities held and must be fully repaid on cessation of employment with
Australand or by the 5th anniversary of the origination date of the loan, whichever is earlier. The last offer under
Australand ESOP was made on 30 June 2006 and hence Australand ESOP will cease to exist on 30 June 2011.
In addition to the above Australand ESOP, options over unissued Australand stapled securities have previously been
issued to employees under the terms of the Australand Share Option Scheme. No options have been issued under
this scheme since March 2002. No future options will be issued under this scheme.
Australand Performance Rights Plan (“PRP”)
The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders at the
2007 Annual General Meeting (“AGM”).
The number of securities outstanding under the Australand Performance Rights Plan as at the end of the year is
summarised below:
2008 2007 Year of Award (’000) (’000)
At 1 January 3,912 –
Granted 2,9481 4,487
Exercised (88) –
Forfeited/Cancelled (398) (575)
At 31 December 6,374 3,912
1 2,948,500 performance rights were granted during the year, of which 591,000 performance rights were 2007 performance rights issued to the Managing Director in 2008 as they were subject to security holder approval at the 2008 AGM.
Fair value of performance rights
The assessed fair value of performance rights granted during the year is A$0.11 (2007: A$1.085) per share.
The fair value is independently determined at grant date using the Monte Carlo Simulation technique. This technique
involves stock prices being randomly simulated under risk neutral conditions and parameters in order to calculate
the value of the performance rights at expiry. The simulation is repeated numerous times to produce distribution
payoff amounts. The performance rights value is taken as the average of the payoff amounts calculated and
discounted back to the valuation date.
The following assumptions were used in valuing the performance rights:
(i) share price at grant date: A$0.28 (2007: A$2.00);
(ii) expected price volatility of the company’s stapled securities: 45% (2007: 21%);
(iii) expected dividend yield: 8.5% (2007: 8.5%);
(iv) risk-free discount rate: 4.5% (2007: 6.2%) per annum;
(v) expected franking rate: 50% (2007: 55%); and
(vi) imputation credits valuation factor: 65% (2007: 65%).
172
Notes to the Financial Statements
24. EMPLOYEE BENEFITS (cont’d)
(c) Equity compensation benefi ts (cont’d)
(i) Australand (cont’d)
Australand Tax Exempt Employee Security Plan (“TEP”)
The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be issued by the
company to employees for no cash consideration was approved by Australand shareholders at the 2007 AGM. All
Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the
Australand Performance Rights Plan) who have been continuously employed by the Group for a period of at least
nine months as at the invitation date and are still employees as at the acquisition date are eligible to participate in
the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually in the third
quarter of each calendar year for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the
employee leaves Australand. Under the plan, employees will receive the same benefi ts as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the weighted average price
at which Australand’s stapled securities are traded on the Australian Stock Exchange during the week up to and
including the acquisition date (rounded down to the nearest whole number of stapled securities).
Number of securities issued under the Australand TEP is as follows: Weighted average Number of market price securities issued A$ (’000)
29 June 2007 2.15 177
1 September 2007 2.37 170
31 October 2008 0.33 1,214
1,561
(ii) The Ascott Group Limited (“Ascott”)
Ascott was delisted from the Offi cial List of the Singapore Exchange Securities Trading Limited on 29 April 2008
following the completion of the voluntary unconditional cash offer announced on 8 January 2008 (the “Offer”) for, and
subsequent compulsory acquisition of, shares in Ascott (“Ascott Shares”) by Somerset Capital Pte Ltd (the “Offeror”),
a wholly-owned subsidiary of the Company. Following the delisting,
(i) all outstanding options to subscribe for Ascott Shares under the Ascott Share Option Plan were cancelled
pursuant to acceptances by holders of such options of the proposal made by the Offeror to them in connection
with the Offer;
(ii) outstanding awards of 2,541,415 under the Ascott Performance Share Plan will be released in the form of cash
in accordance with the rules of the Ascott Performance Share Plan while the balance outstanding awards of
4,894,914 will be substituted by CapitaLand Performance Share Plan; and
(iii) outstanding awards of 1,160,343 under the Ascott Restricted Share Plan will be released in the form of cash in
accordance with the rules of the Ascott Restricted Share Plan.
173
25. SHARE CAPITAL The Company
2008 2007 No. of shares No. of shares Issued and fully paid (’000) (’000)
At 1 January 2,805,969 2,779,346
Issue of shares pursuant to the:
– Exercise of options 9,990 24,703
– Performance Share and Restricted Stock Plans 7,547 1,920
At 31 December 2,823,506 2,805,969
(a) The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company. All shares rank equally with regards to the Company’s residual assets.
(b) At the end of the fi nancial year, there were 20,043,514 (2007: 31,126,830) options under the Share Option Plan, a maximum
of 16,849,676 (2007: 17,617,116) shares under the Performance Share Plan and 11,070,581 (2007: 5,890,309) shares
under the Restricted Stock Plan, details of which are disclosed in note 24(c).
(c) As at December 2008, the convertible bonds issued by the Company which remained outstanding are as follows:
Principal Amount Maturity Date Conversion Price $ million Year S$
430 2016 7.17 Convertible into 59,972,105 new ordinary shares
1,000 2022 13.7255 Convertible into 72,857,090 new ordinary shares
1,300 2018 8.5137 Convertible into 152,695,067 new ordinary shares
There has been no redemption or conversion of any of the above convertible bonds during the year.
(d) The Company did not hold any treasury shares as at 31 December 2008 and 31 December 2007.
Capital Management
The Group’s policy is to build a strong capital base so as to maintain investor, creditor and market confi dence and to
sustain future development of the business. The Group monitors the return on capital, which the Group defi nes as total
shareholders’ equity, excluding minority interests, and the level of dividends to ordinary shareholders.
The Group also monitors capital using a net debt to equity ratio, which is defi ned as net borrowings divided by total equity
(including minority interests).
The Group
2008 2007 $’000 $’000
Gross borrowings 9,829,334 9,916,148
Cash and cash equivalents (4,228,405) (4,355,986)
Net debt 5,600,929 5,560,162
Total Equity 11,987,802 11,865,339
Net debt to equity ratio 0.47 0.47
174
Notes to the Financial Statements
25. SHARE CAPITAL (cont’d)
Capital Management (cont’d)
The Group seeks to strike a balance between the higher returns that might be possible with higher levels of borrowings and the
liquidity and security afforded by a sound capital position.
In addition, the Company has a share purchase mandate as approved by its shareholders which allows the Company greater
fl exibility over its share capital structure with a view to improving, inter alia, its return on equity. The shares which are purchased
may be held as treasury shares which the Company may transfer for the purposes of or pursuant to its employee share-based
incentive schemes so as to enable the Company to take advantage of tax deductions under the current taxation regime. The use
of treasury shares in lieu of issuing new shares would also mitigate the dilution impact on existing shareholders. No share
purchase was made during the year.
There were no changes in the Group’s approach to capital management during the year.
26. OTHER RESERVES The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Capital reserve 950,762 1,443,500 213,212 117,271
Equity compensation reserve 105,364 92,613 41,592 36,623
Hedging reserve (117,658) 10,733 – –
Available-for-sale reserve 20,028 99,472 – –
Foreign currency translation reserve (96,622) (66,663) – –
861,874 1,579,655 254,804 153,894
The capital reserve comprises mainly capital gains on disposal of properties, share of associates’ capital reserve and the value
of the option granted to bondholders to convert their convertible bonds into ordinary shares of the Company.
The equity compensation reserve comprises the cumulative value of employee services received for the issue of the options and
shares under the Share Option Plan, Performance Share Plan and Restricted Stock Plan.
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments related
to hedged transactions that have not yet occurred.
The available-for-sale reserve comprises the cumulative net change in the fair value of available-for-sale investment until the
investment is derecognised.
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the fi nancial
statements of foreign entities, as well as from the translation of foreign currency loans used to hedge the Group’s net investments
in foreign entities.
175
27. REVENUE
Revenue of the Group and of the Company is analysed as follows: The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Trading of properties 1,464,311 2,663,323 – –
Rental and related income 493,724 405,438 – –
Fee income 413,161 305,036 57,292 60,991
Serviced residence rental and related income 368,045 389,851 – –
Dividend income from subsidiaries – – 637,124 773,617
Others 13,080 29,055 – –
2,752,321 3,792,703 694,416 834,608
28. PROFIT BEFORE TAXATION
Profi t before taxation includes the following: The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
(a) Other operating income
Interest income:
– fi xed deposits 74,849 86,121 8,817 24,532
– subsidiaries – – 82,605 71,926
– associates and jointly-controlled entities 28,565 30,753 – –
– investee companies and others 3,676 9,685 – 1,372
– interest capitalised in development
properties for sale 12(c) (879) (2,000) – –
106,211 124,559 91,422 97,830
Dividend income/capital distribution 21,560 19,702 – 20,384
Mark-to-market gain on fair value
through profi t or loss fi nancial assets 10,854 1,914 – –
Mark-to-market gain on derivative instruments 30,823 – – –
Gain on disposal of available-for-sale
fi nancial assets 22,982 8,300 – –
Gain on disposal/dilution/liquidation of
subsidiaries, associates and
jointly-controlled entities 531,919 322,959 – 37,193
Foreign exchange gain 51,827 22,209 – 1
Gain on disposal of investment properties 76,600 47,005 – –
Gain on disposal of properties
under development – 27,764 – –
Gain on disposal of property, plant
and equipment 43,679 139,810 1 102
Net fair value gains from investment properties 300,682 778,831 – –
Negative goodwill recognised from
an increased stake in a subsidiary 55,195 – – –
Others 78,325 60,371 1,740 1,833
1,330,657 1,553,424 93,163 157,343
176
Notes to the Financial Statements
28. PROFIT BEFORE TAXATION (cont’d) The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
(b) Staff costs
Wages and salaries 366,352 490,429 30,095 58,862
Contributions to defi ned contribution plans 50,194 46,509 1,182 1,327
Share-based expenses:
– equity-settled 53,908 50,423 15,737 12,589
– cash-settled 3,736 3,230 125 594
Increase in liability for short term
accumulating compensated absences 774 565 33 17
Staff benefi ts, training/development
costs and others 68,568 54,295 2,490 2,968
543,532 645,451 49,662 76,357
Less:
Staff costs capitalised in development
properties for sale (59,950) (50,958) – –
483,582 594,493 49,662 76,357
(c) (i) Cost of sales include:
Write down of/(Write back of
foreseeable losses on) development
properties for sale (net) 52,803 (223,179) – –
Operating lease expenses 62,003 68,916 – –
Operating expenses arising from
investment properties that
generated rental income 133,098 105,382 – –
Amortisation of intangible assets 4 484 – – –
(ii) Administrative expenses include:
(Write back of)/Allowance for
doubtful receivables (2,728) 1,588 765 26,483
Amortisation of intangible assets 4 1,519 1,188 – –
Auditors’ remuneration:
– auditors of the Company 1,682 1,870 165 147
– other auditors 4,218 3,812 – –
Non-audit fees:
– auditors of the Company 319 441 47 18
– other auditors 549 820 – –
Depreciation of property, plant
and equipment 3 55,227 39,579 3,880 1,404
Write off/impairment loss made
on intangible assets 4 – 3,785 – –
Operating lease expenses 28,655 17,587 2,628 1,889
177
28. PROFIT BEFORE TAXATION (cont’d) The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
(c) (iii) Other operating expenses include:
Impairment in available-for-sale
fi nancial assets 39,877 16,980 – –
Mark-to-market loss on
derivative instruments – 5,589 – –
Impairment and write off of
property, plant and equipment 9,850 948 45 18
Provision/(Write back of provision)
for income support 17(d) 35,654 (9,545) – –
Write back of impairment
of subsidiaries – – – (2,165)
Impairment loss on investment
in an associate 3,490 – – –
(d) Professional fees
Fees paid and payable to certain directors and/or fi rms in which certain directors of the Company are members:
The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Charged to income statement 99 51 99 –
(e) Finance costs The Group The Company
2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Interest and securitisation costs
paid and payable to:
– subsidiaries – – 9 267
– bank loans and overdrafts 393,005 392,545 552 5,445
– debt securities 68,832 52,855 1,778 6,712
Convertible bonds:
– interest expense 72,191 24,806 72,191 24,806
– amortisation of bond discount 21(b) 31,405 13,297 31,405 13,297
– accretion of bond premium 21(b) 10,735 – 10,735 –
Derivative fi nancial instruments 1,517 4,256 – –
Minority interests 5,063 5,615 – –
Others 10,831 13,697 16 199
Total borrowing costs 593,579 507,071 116,686 50,726
Less:
Borrowing costs capitalised in:
– property, plant and equipment 3 (1,738) (3,149) – –
– properties under development 6 (6,218) (1,152) – –
– development properties for sale 12(c) (69,292) (99,221) – –
(77,248) (103,522) – –
516,331 403,549 116,686 50,726
178
Notes to the Financial Statements
29. TAXATION
(a) Deferred Taxation Acquisition/ Income Disposal of Translation At 1/1/2008 statement Equity subsidiaries differences At 31/12/2008 The Group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities
Accelerated tax depreciation 33,537 4,865 – (16,687) (1,203) 20,512
Discounts on compound
fi nancial instruments 25,570 (6,635) 21,060 – – 39,995
Accrued income and interest receivable 4,140 5,700 – – (3) 9,837
Capital allowances of assets in
investment properties 9,434 1,130 (837) – – 9,727
Profi ts recognised on
percentage of completion 65,009 (5,052) (25,508) – (2,554) 31,895
Fair value changes of
investment properties 89,848 68,520 314 (108,291) (11,118) 39,273
Unremitted earnings/Deferred income 29,619 3,547 – – (6,586) 26,580
Derivative fi nancial instruments 18,784 – (14,598) – (4,186) –
Others 5,312 13,084 1,018 (8,087) (1,977) 9,350
Total 281,253 85,159 (18,551) (133,065) (27,627) 187,169
Deferred tax assets
Unutilised tax losses (22,956) (5,525) (521) 7,253 2,204 (19,545)
Provisions and expenses (42,391) (9,870) – – 5,666 (46,595)
Deferred income (11,170) (27,950) 22,905 – 3,074 (13,141)
Derivative fi nancial instruments – – (34,905) – – (34,905)
Others (5,607) (14,978) – – 149 (20,436)
Total (82,124) (58,323) (12,521) 7,253 11,093 (134,622)
179
29. TAXATION (cont’d)
(a) Deferred Taxation (cont’d) Acquisition/ Income Disposal of Translation At 1/1/2007 statement Equity subsidiaries differences At 31/12/2007 The Group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities
Accelerated tax depreciation 13,116 21,166 – (681) (64) 33,537
Discounts on compound
fi nancial instruments 11,572 (2,562) 16,560 – – 25,570
Accrued income and
interest receivable 4,342 190 – (402) 10 4,140
Capital allowances of assets in
investment properties 9,280 154 – – – 9,434
Profi ts recognised on
percentage of completion 10,591 53,317 – – 1,101 65,009
Fair value changes of
investment properties 95,654 (12,129) – 3,145 3,178 89,848
Unremitted earnings 49,321 (22,468) – – 2,766 29,619
Derivative fi nancial instruments 8,262 – 10,522 – – 18,784
Others 1,017 3,271 (396) 2,075 (655) 5,312
Total 203,155 40,939 26,686 4,137 6,336 281,253
Deferred tax assets
Unutilised tax losses (26,093) 2,377 – 1,424 (664) (22,956)
Unutilised capital allowances (191) 191 – – – –
Provisions and expenses (19,427) (21,729) – 37 (1,272) (42,391)
Deferred income (4,834) (5,913) – – (423) (11,170)
Others (938) (4,520) – – (149) (5,607)
Total (51,483) (29,594) – 1,461 (2,508) (82,124)
Income At 1/1/2008 statement Equity At 31/12/2008 The Company $’000 $’000 $’000 $’000
Deferred tax liabilities
Discounts on compound fi nancial instruments 25,570 (6,635) 21,060 39,995
Deferred tax assets
Provisions (9,854) – – (9,854)
Income At 1/1/2007 statement Equity At 31/12/2007 The Company $’000 $’000 $’000 $’000
Deferred tax liabilities
Discounts on compound fi nancial instruments 11,572 (2,562) 16,560 25,570
Deferred tax assets
Provisions – (9,854) – (9,854)
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when the deferred taxes relate to the same taxation authority.
180
Notes to the Financial Statements
29. TAXATION (cont’d)
(a) Deferred Taxation (cont’d) The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Deferred tax liabilities 130,639 238,057 39,995 25,570
Deferred tax assets (78,092) (38,928) (9,854) (9,854)
52,547 199,129 30,141 15,716
Deferred tax assets have not been recognised in respect of the following: The Group
2008 2007 $’000 $’000
Deductible temporary differences 175,953 258,790
Tax losses 184,064 148,467
Unutilised capital allowances 1,581 1,564
361,598 408,821
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable
profi ts will be available against which the subsidiaries of the Group can utilise the benefi ts. The tax losses are subject to
agreement by the tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries
operate. The deductible temporary differences do not expire under current tax legislation.
(b) Tax Charge The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Current tax expense
– Based on current year’s results 258,402 282,363 1,612 23,181
– (Over)/Under provision in respect
of prior years (49,462) (25,661) 238 –
– Group relief – – 1,091 –
208,940 256,702 2,941 23,181
Deferred tax expense
– Origination and reversal of
temporary differences 19,411 22,555 (6,634) (12,416)
– Under/(Over) provision in respect
of prior years 7,425 (11,210) – –
26,836 11,345 (6,634) (12,416)
Total 235,776 268,047 (3,693) 10,765
181
29. TAXATION (cont’d)
(b) Tax Charge (cont’d)
Reconciliation of effective tax rate The Group
2008 2007 $’000 $’000
Profi t before taxation 1,697,159 3,420,493
Less: Share of results of associates and jointly-controlled entities (375,094) (1,512,122)
Profi t before share of results of associates, jointly-controlled entities and taxation 1,322,065 1,908,371
Income tax using Singapore tax rate of 18% (2007: 18%) 237,972 343,507
Adjustments:
Expenses not deductible for tax purposes 133,562 71,180
Income not subject to tax (140,761) (241,893)
Effect of unrecognised tax losses and other deductible temporary differences 7,722 13,379
Effect of different tax rates in foreign jurisdictions 50,997 109,523
(Over)/Under provision in respect of prior years (42,037) (36,871)
Others (11,679) 9,222
235,776 268,047
The Company
2008 2007 $’000 $’000
Profi t before taxation 598,054 819,421
Income tax using Singapore tax rate of 18% (2007: 18%) 107,650 147,496
Adjustments:
Expenses not deductible for tax purposes 18,308 4,554
Income not subject to tax (127,849) (138,626)
Effect of other deductible temporary differences (1,059) (2,517)
Under provision in respect of prior year 238 –
Consideration paid for losses transferred 1,091 –
Tax benefi t received on losses arising from group relief (1,091) –
Others (981) (142)
(3,693) 10,765
182
Notes to the Financial Statements
30. EARNINGS PER SHARE
(a) Basic earnings per share The Group
2008 2007 $’000 $’000
Basic earnings per share is based on:
Net profi t attributable to equity holders of the Company 1,260,113 2,759,313
Number of shares (’000)
Weighted average number of ordinary shares in issue during the year 2,819,371 2,799,067
(b) Fully diluted earnings per share
In calculating diluted earnings per share, the net profi t attributable to equity holders of the Company and weighted average
number of ordinary shares in issue during the year are adjusted for the effects of all dilutive potential ordinary shares:
The Group
2008 2007 $’000 $’000
Net profi t attributable to equity holders of the Company 1,260,113 2,759,313
Profi t impact of conversion of the dilutive potential ordinary shares 57,145 33,637
Adjusted net profi t attributable to equity holders of the Company 1,317,258 2,792,950
Number of shares (’000)
Weighted average number of ordinary shares used in calculation
of basic earnings per share 2,819,371 2,799,067
Weighted average number of unissued ordinary shares from:
– options under Share Option Plan 19,220 31,127
– shares under Performance Share Plan 16,850 17,617
– shares under Restricted Stock Plan 11,071 5,890
– convertible bonds 185,966 97,493
Number of ordinary shares that would have been issued at fair value (12,635) (12,583)
220,472 139,544
Weighted average number of ordinary shares in issue (diluted) 3,039,843 2,938,611
31. DIVIDENDS
The Board of Directors of the Company has proposed a fi rst and fi nal dividend of 5.5 cents per share and a special dividend of
1.5 cents per share in respect of the fi nancial year ended 31 December 2008. This would amount to a payout of approximately
$296.7 million based on the enlarged share capital after the rights issue (disclosed in Note 41). The dividends are subject to the
shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For the fi nancial year 2007, a fi rst and fi nal one-tier dividend of 8.0 cents per share and a special one-tier dividend of 7.0 cents
per share were approved and paid. The said dividends of $423.4 million were paid in May 2008.
183
32. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Acquisition of subsidiaries
(i) There was no acquisition of signifi cant subsidiary during the year.
The total acquisition cost for subsidiaries acquired, which individually was not signifi cant, in aggregate amounted to
$16.9 million. There were no signifi cant contribution by the above subsidiaries to the net profi t of the Group from the
respective acquisition dates to 31 December 2008; nor to the revenue and the net profi t of the Group had the
acquisition occurred on 1 January 2008, before accounting for fi nancing costs attributable to the acquisitions.
(ii) The signifi cant subsidiaries acquired in 2007 were as follows: Effective Interest Name of Subsidiary Date Acquired Acquired
Eureka Offi ce Fund Pte Ltd August 2007 50.0%
Makati Property Ventures Inc (“Ascott Makati”) March 2007 61.3%
The total related acquisition costs for the above-mentioned subsidiaries and other subsidiaries acquired, which
individually was not signifi cant, in aggregate amounted to $763.0 million. From the dates of acquisitions to 31
December 2007, the above-mentioned acquisitions contributed net profi t of $46.1 million to the Group’s results for
the year, before accounting for fi nancing costs attributable to the acquisitions. If the acquisitions had occurred on 1
January 2007, the Group’s revenue for the year ended 31 December 2007 would have increased by $75.7 million and
net profi t would have increased by $63.6 million, before accounting for fi nancing costs attributable to the acquisitions.
(b) Effects of acquisitions
The cash fl ow and the net assets of subsidiaries acquired are provided below:
Carrying Fair value Recognised amounts adjustments values The Group $’000 $’000 $’000
2008
Investment properties 8,072 – 8,072
Current assets 26,273 – 26,273
Current liabilities (9,654) – (9,654)
Non-current liabilities (256) – (256)
Minority interests (7,514) – (7,514)
16,921 – 16,921
Amounts previously accounted for as associates
and jointly-controlled entities 18
Net assets acquired/Purchase consideration 16,939
Cash outfl ow on acquisition of subsidiaries 16,939
184
Notes to the Financial Statements
32. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d)
(b) Effects of acquisitions (cont’d) Carrying Fair value Recognised amounts adjustments values The Group $’000 $’000 $’000
2007
Property, plant and equipment 60,185 – 60,185
Investment properties 1,339,199 (57,330) 1,281,869
Other non-current assets 92 – 92
Current assets 115,266 29,238 144,504
Current liabilities (40,280) – (40,280)
Interest bearing liabilities (367,216) – (367,216)
Non-current liabilities (9,526) – (9,526)
Minority interests (7,635) 28,092 20,457
1,090,085 – 1,090,085
Amounts previously accounted for as associates
and jointly-controlled entities (330,000)
Net assets acquired 760,085
Goodwill arising from acquisition 2,953
Purchase consideration 763,038
Less:
Deposit paid in 2006 (11,683)
Cash of subsidiaries acquired (93,085)
Cash outfl ow on acquisition of subsidiaries 658,270
(c) Disposals of subsidiaries
(i) During the year, the Group disposed off the following signifi cant subsidiaries for a total consideration of $885.4 million:
Effective Interest Name of Subsidiary Date Disposed Disposed
Calderdale Pte Ltd September 2008 100.0%
Floral Land Pte Ltd September 2008 80.0%
Hua Qing Holdings Pte Ltd September 2008 58.8%
Hua Lei Holdings Pte Ltd September 2008 100.0%
The disposed subsidiaries previously contributed net profi t of $36.7 million for the year ended 31 December 2007
and $149.8 million from 1 January 2008 to the respective dates of disposal.
(ii) In 2007, the Group disposed off the following signifi cant subsidiaries for a total consideration of $285.9 million:
Effective Interest Name of Subsidiary Date Disposed Disposed
Ascott Residence Trust* March 2007 16.5%
Somerset Youyi (BVI) Limited September 2007 66.5%
Citadines Biyun (BVI) Limited September 2007 66.5%
* Ascott Residence Trust (“ART”) ceased to be a subsidiary of the Group and is equity accounted as an associate following the Group’s disposal of 16.5% interest in ART in March 2007.
The disposed subsidiaries previously contributed net profi t of $3.4 million for the year ended 31 December 2006 and
$3.6 million from 1 January 2007 to the respective dates of disposal.
185
32. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d)
(d) Effects of disposals
The cash fl ow and the net assets of subsidiaries disposed are provided below: The Group
2008 2007 $’000 $’000
Property, plant and equipment 114,236 157,328
Investment properties and properties under development 2,088,382 1,114,502
Other non-current assets 3,194 4,368
Current assets 208,172 220,958
Current liabilities (1,033,886) (92,779)
Interest bearing liabilities (547,510) (337,420)
Non-current liabilities (137,003) (64,285)
Minority interests (185,072) (401,085)
Net assets 510,513 601,587
Less:
Equity interest retained as associates and jointly-controlled entities (55,340) (387,707)
Net assets disposed 455,173 213,880
Realisation of reserves (93,436) (19,110)
Deferred income 108,863 (3,851)
Gain on disposal of subsidiaries 414,767 94,936
Sale consideration 885,367 285,855
Repayment of shareholders’ loan 779,745 9,979
Deferred payment (66,083) (940)
Deferred sale consideration received in relation to prior year’s disposal of subsidiaries – 346,864
Cash of subsidiaries disposed (134,629) (119,294)
Cash infl ow on disposal of subsidiaries 1,464,400 522,464
(e) Net effects on acquisition and disposal of subsidiaries The Group
2008 2007 $’000 $’000
Net cash infl ow/(outfl ow) on acquisition and disposal of subsidiaries 1,447,461 (135,806)
33. FINANCIAL RISK MANAGEMENT
(a) Financial risk management objectives and policies
The Group and the Company are exposed to market risk (including interest rate, foreign currency and price risks), credit
risk and liquidity risk arising from its diversifi ed portfolio of business. The Group’s risk management approach seeks to
minimise the potential material adverse effects from these exposures. The Group uses fi nancial instruments such as
currency forwards, interest rate swaps and caps as well as foreign currency borrowings to hedge certain fi nancial risk
exposures.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Board has established the Risk Committee to strengthen its risk management processes and framework.
The Risk Committee is assisted by an independent unit called the Risk Assessment Group (“RAG”). RAG generates a
comprehensive portfolio risk report to assist the committee. This quarterly report measures a spectrum of risks, including
property market risks, construction risks, interest rate risks, refi nancing and currency risks.
186
Notes to the Financial Statements
33. FINANCIAL RISK MANAGEMENT (cont’d)
(b) Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will
have on the Group’s income or the value of its holdings of fi nancial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
(i) Interest rate risk
The Group’s exposure to market risk for changes in interest rate environment relates mainly to its investment in
fi nancial products and debt obligations.
The investments in fi nancial products are short term in nature and they are not held for trading or speculative
purposes. The fi nancial products comprise fi xed deposits or short term commercial papers which yield better returns
than cash at bank.
The Group manages its interest rate exposure by maintaining a prudent mix of fi xed and fl oating rate borrowings. The
Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets.
This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve certain level of
protection against rate hikes. The Group also uses hedging instruments such as interest rate swaps and caps to
minimise its exposure to interest rate volatility. The Group classifi es these interest rate swaps and caps as cash fl ow
hedges.
The fair value loss of swaps as at 31 December 2008 was $148.6 million (2007: fair value gain of $60.4 million).
Sensitivity analysis
For interest rate swaps accounted for as cash fl ow hedges and other variable rate fi nancial liabilities, it is estimated
that an increase of 100bp in interest rate at the reporting date would lead to a reduction in the Group’s profi t before
tax (and accumulated profi ts) by approximately $25.0 million (2007: $29.8 million). A decrease in 100bp in interest
rate would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant, and has not taken into account the effects of qualifying borrowing costs allowed for
capitalisation, the associated tax effects and share of minority interests.
(ii) Foreign currency risk
The Group operates internationally and is exposed to various currencies, mainly Australia Dollars, Chinese Renminbi,
Euros, Hong Kong Dollars, Japanese Yen, Sterling Pounds and US Dollars.
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which its
property or investment is located or by borrowing in currencies that match the future revenue stream to be generated
from its investments.
The Group also uses forward exchange contracts to hedge its foreign currency risk, where feasible. It generally
enters into forward exchange contracts with maturities ranging between 3 months and 5 years which are rolled over
at market rates at maturity.
The net fair value loss of the above forward exchange contracts as at 31 December 2008 was $8.9 million (2007: fair
value loss of $3.4 million).
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are
kept to an acceptable level.
In relation to its investments in foreign subsidiaries whose net assets are exposed to currency translation risks and
which are held for long term investment purposes, the differences arising from such translation are recorded under
the foreign currency translation reserve. These translation differences are reviewed and monitored on a regular basis.
187
33. FINANCIAL RISK MANAGEMENT (cont’d)
(b) Market risk (cont’d)
(ii) Foreign currency risk (cont’d)
The Group’s and the Company’s exposure to foreign currencies as at 31 December 2008 and 31 December 2007 are
as follows: Total US Australian Chinese Hong Kong Japanese Sterling Foreign Dollars Dollars Renminbi Dollars Yen Euros Pounds Others* Currencies The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2008
Financial assets 284,787 – – 120,903 165,675 33 – 19 571,417
Trade and other receivables 231,738 367,497 541,978 131,409 19,444 29,972 40,902 42,167 1,405,107
Cash and cash equivalents 480,027 132,717 464,000 68,765 14,604 57,041 12,890 80,165 1,310,209
Borrowings and fi nance leases (1,599,137) (2,073,313) (312,638) (656,267) (422,740) (423,159) (69,725) (175,590) (5,732,569)
Trade and other payables (154,645) (249,297) (806,235) (30,087) (16,142) (54,807) (7,579) (69,771) (1,388,563)
Gross currency exposure (757,230) (1,822,396) (112,895) (365,277) (239,159) (390,920) (23,512) (123,010) (3,834,399)
Less:
Net fi nancial liabilities
denominated in the respective
entities’ functional currencies 774,103 1,823,874 209,791 500,566 181,975 390,967 48,755 134,155 4,064,186
Foreign exchange
forward contracts (39,508) – – – – – (36,879) – (76,387)
Less:
Available-for-sale fi nancial assets (71,460) – – (113,071) (10,875) – – – (195,406)
Net currency exposure (94,095) 1,478 96,896 22,218 (68,059) 47 (11,636) 11,145 (42,006)
* Others include mainly Malaysian Ringgit, Thai Baht and Vietnamese Dong.
Total US Australian Chinese Hong Kong Japanese Sterling Foreign Dollars Dollars Renminbi Dollars Yen Euros Pounds Others* Currencies The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2007
Financial assets 616 – – 404,572 161,300 35 – – 566,523
Trade and other receivables 175,429 568,955 318,547 96,051 13,199 36,002 (12,098) 77,010 1,273,095
Cash and cash equivalents 245,198 83,428 380,021 29,700 20,666 62,346 57,725 35,197 914,281
Borrowings and fi nance leases (1,885,521) (2,738,222) (469,661) (630,860) (267,009) (462,178) (8,959) (152,243) (6,614,653)
Trade and other payables (326,705) (369,337) (861,682) (28,832) (16,988) (59,789) (6,909) (36,621) (1,706,863)
Gross currency exposure (1,790,983) (2,455,176) (632,775) (129,369) (88,832) (423,584) 29,759 (76,657) (5,567,617)
Less:
Net fi nancial liabilities/(assets)
denominated in the respective
entities’ functional currencies 804,502 2,456,640 633,266 226,028 (17,187) 423,649 (38,227) 76,980 4,565,651
Foreign exchange
forward contracts (81,145) – – – – – (42,192) – (123,337)
Less:
Available-for-sale fi nancial assets – – – (111,119) (161,300) – – – (272,419)
Net currency exposure (1,067,626) 1,464 491 (14,460) (267,319) 65 (50,660) 323 (1,397,722)
* Others include mainly Malaysian Ringgit and Thai Baht.
188
Notes to the Financial Statements
33. FINANCIAL RISK MANAGEMENT (cont’d)
(b) Market risk (cont’d)
(ii) Foreign currency risk (cont’d) Total US Australian Sterling Japanese Foreign Dollars Dollars Pounds Yen Others* Currencies The Company $’000 $’000 $’000 $’000 $’000 $’000
2008
Cash and cash equivalents 53 6 16 – 2 77
Trade and other payables (9) – – – – (9)
Currency exposure 44 6 16 – 2 68
2007
Trade and other receivables 67,453 – – – – 67,453
Cash and cash equivalents 804 8 19 – 2 833
Borrowings (67,213) – – – – (67,213)
Trade and other payables (358) – – (10) – (368)
Currency exposure 686 8 19 (10) 2 705
* Others include Hong Kong Dollars and Thai Baht.
Sensitivity analysis
In view of the current market conditions, the Group has re-examined and revised the sensitivity analysis for foreign
exchange risk from one percentage point in 2007 to fi ve percentage points in 2008. It is estimated that a fi ve (2007:
one) percentage point strengthening in foreign currencies against the Singapore Dollar would decrease the Group’s
profi t before tax (and accumulated profi ts) by approximately $2.1 million (2007: $14.0 million) and increase the
Group’s other components of equity by approximately $9.8 million (2007: $2.7 million) respectively. A fi ve (2007: one)
percentage point weakening in foreign currencies against the Singapore Dollar would have an equal but opposite
effect. The Group’s outstanding forward exchange contracts have been included in this calculation. The analysis
assumed that all other variables, in particular interest rates, remain constant and does not take into account the
associated tax effects and share of minority interests.
It is estimated that a fi ve (2007: one) percentage point strengthening/weakening in foreign currencies against the
Singapore Dollar would not have any material impact on the profi t before tax or equity of the Company. The analysis
assumed that all other variables, in particular interest rates, remain constant.
(iii) Equity price risk
The Group has available-for-sale investments in equity securities and is exposed to price risk. These securities are
listed in Japan and Hong Kong. The Group is not exposed to commodity price risk.
Sensitivity analysis
If prices for equity securities listed in Japan and Hong Kong change by 5% with all other variables including tax rate
being held constant, the impact on profi t after tax and available-for-sale reserve will be as follows:
2008 2007
5% increase 5% decrease 5% increase 5% decrease $’000 $’000 $’000 $’000
Profi t after tax – (1,065) – –
Available-for-sale reserve 6,719 (5,654) 13,497 (13,497)
189
33. FINANCIAL RISK MANAGEMENT (cont’d)
(c) Credit risk
Credit risk is the risk of fi nancial loss to the Group if a customer or counterparty to a fi nancial instruments fails to meet its
contractual obligations. For trade receivables, the Group has guidelines governing the process of granting credit as a
service or product provider in its respective segments of business. Trade and other receivables relate mainly to the Group’s
customers who bought its residential units and tenants from its commercial buildings and retail malls. Investments and
fi nancial transactions are restricted to counterparties that meet the appropriate credit criteria and are of high credit
standing.
The principal risk to which the Group and the Company is exposed in respect of fi nancial guarantee contracts is credit risk
in connection with the guarantee contracts it has issued. To mitigate the risks, management continually monitors the risks
and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf
of. Guarantees are only given for its subsidiaries and related parties. The maximum exposure to credit risk in respect of
these fi nancial guarantees at the balance sheet date is disclosed in note 35.
The Group has a diversifi ed portfolio of businesses and as at balance sheet date, there were no signifi cant concentration
of credit risk with any entity. The maximum exposure to credit risk is represented by the carrying amount of each fi nancial
asset in the balance sheet, including derivative fi nancial instruments as well as any irrevocable loan undertaking to
associates and jointly-controlled entities. There were no changes in the fair value of the Group’s investment in convertible
bonds classifi ed as fair value through profi t or loss, which were attributable to changes in credit risks.
(d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due. The Group actively
manages its debt maturity profi le, operating cash fl ows and the availability of funding so as to ensure that all refi nancing,
repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains suffi cient
level of cash or cash convertible investments to meet its working capital requirement. In addition, the Group strives to
maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group will
constantly raise committed funding from both capital markets and fi nancial institutions and prudently balance its portfolio
with some short term funding so as to achieve overall cost effectiveness.
The following are the expected contractual undiscounted cash fl ows of fi nancial liabilities, including interest payments and
excluding the impact of netting agreements: Contractual cash fl ows (including interest payments)
Not later than Between After Carrying amount Total 1 year 2 and 5 years 5 years The Group $’000 $’000 $’000 $’000 $’000
2008
Non-derivative fi nancial liabilities
Bank borrowings 4,645,492 4,930,388 1,095,666 3,714,051 120,671
Debt securities 5,144,370 7,931,180 986,497 1,868,601 5,076,082
Finance leases 39,472 51,690 6,573 22,338 22,779
Trade and other payables* 2,228,907 2,246,848 2,152,292 85,279 9,277
12,058,241 15,160,106 4,241,028 5,690,269 5,228,809
Derivative fi nancial liabilities 182,629 196,356 66,039 100,040 30,277
12,240,870 15,356,462 4,307,067 5,790,309 5,259,086
* Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefi ts and provisions.
190
Notes to the Financial Statements
33. FINANCIAL RISK MANAGEMENT (cont’d)
(d) Liquidity risk (cont’d) Contractual cash fl ows (including interest payments)
Not later than Between After Carrying amount Total 1 year 2 and 5 years 5 years The Group $’000 $’000 $’000 $’000 $’000
2007
Non-derivative fi nancial liabilities
Bank borrowings 5,665,241 6,170,494 1,382,965 4,703,333 84,196
Debt securities 4,204,119 5,275,972 677,377 2,381,060 2,217,535
Finance leases 46,789 62,314 6,688 25,123 30,503
Trade and other payables* 3,138,465 3,254,014 2,934,470 308,045 11,499
13,054,614 14,762,794 5,001,500 7,417,561 2,343,733
Derivative fi nancial liabilities 12,048 13,606 2,920 10,686 –
13,066,662 14,776,400 5,004,420 7,428,247 2,343,733
* Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefi ts and provisions.
The following table indicates the periods in which the cash fl ows associated with derivatives that are cash fl ow hedges are
expected to occur and affect the income statement: Contractual cash fl ows
Not later than Between After Carrying amount Total 1 year 2 and 5 years 5 years The Group $’000 $’000 $’000 $’000 $’000
2008
Interest rate swaps
– liabilities 148,589 166,207 52,463 86,628 27,116
Forward start interest rate swaps
– liabilities 19,657 20,666 4,092 13,413 3,161
168,246 186,873 56,555 100,041 30,277
2007
Interest rate swaps
– assets 41,567 45,051 19,141 26,996 (1,086)
– liabilities (5,312) (6,870) (2,919) (3,951) –
Forward start interest rate swaps
– assets 24,184 25,990 14 21,070 4,906
Interest rate caps
– assets 1,814 2,187 1,242 945 –
62,253 66,358 17,478 45,060 3,820
191
33. FINANCIAL RISK MANAGEMENT (cont’d)
(e) Fair values
The following methods and assumptions are used to estimate the fair values of the following signifi cant classes of fi nancial
instruments:
(i) Floating Interest Bearing Loans
No fair value is calculated for fl oating interest bearing loans as the Group believes that the carrying amounts which
are all re-priced within 6 months from the balance sheet date refl ect the corresponding fair values.
(ii) Trade and Other Receivables and Trade and Other Payables
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their
fair values due to their short term nature.
(iii) Financial Assets/Financial Instruments
The fair value of quoted securities is their quoted bid price at the balance sheet date. For other fi nancial instruments,
fair value has been determined by discounting the relevant cash fl ows using current or applicable interest rates for
similar instruments at the balance sheet date.
(iv) Non-Current Loans Due from/to Subsidiaries, Associates, Jointly-Controlled Entities, Investee Companies, Third Parties
and Minority Interests
Fair value is estimated as the present value of future cash fl ows discounted at current interest rates for similar
instruments at the balance sheet date.
(v) Derivatives
The fair value of fi nancial derivatives instruments are based on their market prices or brokers’ quotes.
The aggregate net fair values of fi nancial assets and liabilities which are not carried at fair value in the balance sheet as at
31 December are represented in the following table: 2008 2007
Carrying Carrying amount Fair value amount Fair value $’000 $’000 $’000 $’000
The Group
Fixed rate long term liabilities
– secured debt securities 62,139 62,540 184,405 180,512
– unsecured debt securities 3,716,310 2,833,716 2,297,520 2,387,099
3,778,449 2,896,256 2,481,925 2,567,611
The Company
Fixed rate long term unsecured debt securities 2,518,579 1,727,899 1,293,439 1,391,488
192
Notes to the Financial Statements
34. COMMITMENTS
As at the balance sheet date, the Group and the Company had the following commitments:
(a) Operating lease
The Group leases a number of offi ces under operating leases. The leases typically have tenure of three years, with an option
to renew the lease after that date. Lease payments are usually revised at each renewal date to refl ect the market rate.
Future minimum lease payments for the Group and the Company on non-cancellable operating leases are as follows:
The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Lease payments payable:
Not later than 1 year 66,486 75,961 1,455 2,039
Between 2 and 5 years 154,764 196,210 768 1,573
After 5 years 64,277 67,227 133 300
285,527 339,398 2,356 3,912
The Group leases out its investment properties. Non-cancellable operating lease rentals are receivable as follows:
The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Lease rentals receivable:
Not later than 1 year 286,760 379,969 – –
Between 2 and 5 years 715,693 886,235 – –
After 5 years 449,367 372,458 – –
1,451,820 1,638,662 – –
(b) Commitments The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Commitments in respect of:
– capital expenditure contracted but not
provided for in the fi nancial statements 17,531 35,936 250 –
– development expenditure contracted but not
provided for in the fi nancial statements 1,044,685 1,392,426 – –
– capital contribution/acquisition of
associates, jointly-controlled entities
and investee companies 1,557,585 1,472,304 – –
– purchase of land contracted but not
provided for in the fi nancial statements 690,007 245,279 – –
– shareholders’ loan committed to
associates, jointly-controlled entities
and investee companies 7,360 12,967 – –
3,317,168 3,158,912 250 –
193
34. COMMITMENTS (cont’d)
(c) As at the balance sheet date, the notional principal values of fi nancial instruments are as follows:
The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Interest rate caps 160,309 177,435 – –
Interest rate swaps 2,822,369 2,807,231 – –
Forward start interest rate swaps 875,803 1,190,949 – –
Forward foreign exchange contracts 319,586 404,524 – –
Non delivery forward contracts 202,000 202,000 – –
4,380,067 4,782,139 – –
The maturity dates of these fi nancial instruments are: The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Not later than 1 year 1,590,109 948,172 – –
Between 2 and 5 years 2,255,209 3,237,858 – –
After 5 years 534,749 596,109 – –
4,380,067 4,782,139 – –
35. FINANCIAL GUARANTEE CONTRACTS
There are no terms and conditions attached to the fi nancial guarantee contracts that would have a material effect on the amount,
timing and uncertainty of the Group and the Company’s future cash fl ows. The Group and the Company only issue guarantees
for their subsidiaries and related parties. The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
(a) Guarantees and undertaking issued on behalf of:
– subsidiaries – – 3,632,769 3,777,250
– associates 177,778 318,984 – –
– jointly-controlled entities 32,182 26,028 4,419 3,621
209,960 345,012 3,637,188 3,780,871
(b) Undertakings by the Group and the Company:
(i) The Company has provided several undertakings on cost overrun, interest shortfall, completion and annualised
gross rental, on a joint or several basis, in respect of term loan and revolving credit facilities amounting to $1,560.0
million, granted to a jointly-controlled entity. As at 31 December 2008, $1,275.4 million (2007: $1,097.8 million) of the
facilities has been drawn.
(ii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and
an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a
joint and several basis, in respect of a term loan facility amounting to $1,862.1 million and bankers’ guarantee facility
amounting to $133.9 million granted to an associate. As at 31 December 2008, $870.1 million of the term loan facility
has been drawn.
194
Notes to the Financial Statements
35. FINANCIAL GUARANTEE CONTRACTS (cont’d)
(b) Undertakings by the Group and the Company (cont’d):
(iii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and
an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a
joint and several basis, in respect of a term loan facility amounting to $393.0 million and bankers’ guarantee facility
amounting to $42.0 million granted to a jointly-controlled entity. As at 31 December 2008, $355.0 million of the term
loan facility has been drawn.
(iv) A subsidiary of the Group has provided a cost overrun undertaking up to $26.9 million (2007: $40.8 million) in respect
of the sale of its subsidiaries’ and jointly-controlled entities’ future receivables for residential projects.
(v) Certain of the Group’s subsidiaries in China, whose principal activities are in the trading of development properties,
would in the ordinary course of business act as guarantors for the bank loans taken by the buyers used to fi nance
the purchase of residential properties developed by these subsidiaries. As at 31 December 2008, the outstanding
notional amount of the guarantees amounted to $152.1 million (2007: $387.6 million).
(vi) In 2007, a subsidiary of the Group has provided undertakings on cost overrun and interest shortfall on a several basis
as well as project completion undertaking on a joint and several basis, in respect of term loans amounting to $56.0
million, granted to an associate. These bank loans have been repaid in 2008.
(c) Options entered into by the Group:
(i) A subsidiary of the Group has granted to Front Winners Sdn Bhd (the “Vendor”), a party unrelated to the Company,
a put option to require the subsidiary to purchase the Gurney Plaza Extension and the Car Park Lot within 5 years
from 15 August 2007 at the put option price to be determined on an agreed basis. In return, the Vendor has granted
this subsidiary an option to purchase the same property at the same agreed terms within 1 year of the expiry of the
put option in the event the Vendor does not exercise the put option.
(ii) In 2007, a subsidiary of the Group entered into a put option agreement with the Trustee of CapitaRetail China Trust,
an associate of the Group, in relation to the sale of Wangjing Mall, whereby the Trustee was granted the right to put
the property back at the put option price to be determined based on an agreed basis, in the event the legal title of
the Wangjing Mall was not obtained by 4 June 2008. The put option agreement ceased in 2008 as the legal title of
Wangjing Mall was obtained in May 2008.
36. SIGNIFICANT RELATED PARTY TRANSACTIONS
For the purposes of these fi nancial statements, parties are considered to be related to the Group if the Group has the ability,
directly or indirectly, to control the party or exercise signifi cant infl uence over the party in making fi nancial and operating
decisions, or vice versa, or where the Group and the party are subject to common control or common signifi cant infl uence.
Related parties may be individuals or other entities.
195
36. SIGNIFICANT RELATED PARTY TRANSACTIONS (cont’d)
In addition to the related party information disclosed elsewhere in the fi nancial statements, there were signifi cant related party
transactions which were carried out in the normal course of business on terms agreed between the parties during the fi nancial
year as follows: The Group The Company
2008 2007 2008 2007 $’000 $’000 $’000 $’000
Subsidiaries
Management fee income – – 57,292 60,991
Rental income – – 70 70
IT and administrative support services – – 811 1,463
Rental expense – – (76) (202)
Associates and Jointly-Controlled Entities
Management fee income 335,857 189,951 – –
Rental expense (7,602) (4,295) (1,389) (1,350)
Accounting service fee, acquisition fee,
marketing income and others 22,230 24,410 – –
Proceeds from sale of properties and investments* 2,078,738 149,300 – –
Construction and project management income 32,576 25,798 – –
Others (289) (182) (289) (182)
* The Group has deferred a portion of the profi t from the sale of these properties and investments based on its retaining stakes in the associates and jointly- controlled entities.
Directors and Their Associates
Sale of residential properties – 2,678 – –
Interest paid/payable in relation to the subscription
of 3-year fi xed rate notes issued by
an indirect subsidiary of the Company under
a multicurrency medium term notes programme 33 – – –
Shareholder’s loan to an investee company of the Group
in which a director has an interest 1,782 – – –
Remuneration of key management personnel
Salary, bonus and other benefi ts 24,121 82,621 10,051 36,667
Employer’s contributions to defi ned contribution plans 105 73 31 24
Equity compensation benefi ts 16,461 10,493 9,016 4,280
40,687 93,187 19,098 40,971
196
Notes to the Financial Statements
37. SUBSIDIARIES
(a) The signifi cant subsidiaries directly held by the Company which are incorporated and conducting business in the Republic
of Singapore are as set out below: Percentage held by the Company
2008 2007 Subsidiaries Principal Activities % %
Areca Investment Pte Ltd Property development and investment holding 100 100
CapitaLand Asia Pte Ltd Investment holding 100 100
CapitaLand Commercial Limited Investment holding and provision of management services 100 100
CapitaLand Financial Limited Investment holding 100 100
CapitaLand GCC Holdings Pte Ltd Investment holding 100 100
CapitaLand ILEC Pte Ltd Investment holding 100 100
CapitaLand Residential Limited Investment holding and provision of management services 100 100
CapitaLand Retail Limited Investment holding 100 100
CapitaLand Treasury Limited Provision of fi nancial and treasury services to related corporations 100 100
Pidemco Land Singapore Pte Ltd Investment holding 100 100
Somerset Capital Pte Ltd Investment holding 100 100
Somerset Land Pte Ltd Investment holding and investment trading 100 100
197
37. SUBSIDIARIES (cont’d)
(b) Other signifi cant subsidiaries in the Group are: Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Name of Company Principal Activities Business % %
(i) Jointly held by Areca Investment Pte Ltd, Somerset Capital Pte Ltd and Somerset Land Pte Ltd:
The Ascott Group Limited Investment holding, property investment Singapore 100 66.5 and the management of commercial, residential and serviced apartments
(ii) Directly or indirectly held by CapitaLand Residential Limited:
Ausprop Holdings Limited Investment holding Singapore 100 100
Australand Property investment, development Australia 59.3 54.2 and investment holding
Austvale Holdings Ltd Investment holding Singapore 100 100
CapitaLand China Investment holding Singapore 100 100 Holdings Pte Ltd
CapitaLand Residential Project management Singapore 100 100 Singapore Pte Ltd and consultancy services
CRL Realty Pte Ltd Property development Singapore 100 100 and investment holding
Loft Condominium Pte Ltd Property development Singapore 100 100
Leonie Court Pte Ltd Property development Singapore 100 100 and investment holding
Prime Equities Pte Ltd Investment holding Singapore 100 100
Clementi Complex Pte Ltd Property development Singapore 100 100
Imperial Realty Limited Property development Singapore 100 100
Woodsvale Land Pte Ltd Property development Singapore 100 100
198
Notes to the Financial Statements
37. SUBSIDIARIES (cont’d)
(b) Other signifi cant subsidiaries in the Group are (cont’d): Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Name of Company Principal Activities Business % %
(iii) Directly or indirectly held by CapitaLand China Holdings Pte Ltd: 1 Beijing Xin Xu Real Estate Project development The People’s 100 99 Development Co., Ltd Republic of China
1 CapitaLand (China) Investment holding The People’s 100 100 Investment Co., Ltd Republic of China
CapitaLand China Investment in real estate assets Singapore 100 100 Income Fund
1 CapitaLand (Tianjin) Investment holding The People’s 80 100 Investment Co., Ltd Republic of China
Croydon Pte Ltd Investment holding Singapore 100 100
Heatley Pte Ltd Investment holding Singapore 100 100
Hua Yuan Holdings Pte Ltd Investment holding Singapore 70 70
1 Shanghai CapitaLand Project development The People’s 100 100 Xin Chuang Real Estate Republic of China Development Co., Ltd
(iv) Directly or indirectly held by CapitaLand Commercial Limited:
Adelphi Property Pte Ltd Property investment Singapore 100 100
CapitaLand China Holdings Investment holding Singapore 100 100 (Commercial) Pte Ltd
CapitaLand China Investment holding British Virgin 100 100 Commercial Investment Islands Limited
CapitaLand (Offi ce) Investment holding Singapore 100 100 Investments Pte Ltd
CapitaLand Selegie Property development Singapore 100 100 Private Limited
Eureka Offi ce Fund Pte Ltd Investment holding Singapore 100 100
George Street Pte Ltd Property investment Singapore 100 100
Malachite Land Pte Ltd Investment holding Singapore 100 100
199
37. SUBSIDIARIES (cont’d)
(b) Other signifi cant subsidiaries in the Group are (cont’d): Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Name of Company Principal Activities Business % %
(v) Directly or indirectly held by CapitaLand Retail Limited: 1 CapitaRetail Gurney Sdn Bhd Property investment Malaysia 100 100
CapitaLand Retail China Investment holding Singapore 100 100 Investment Pte Ltd
CapitaLand Retail Investment holding British Virgin 100 100 Hong Kong Investments Islands Two (BV) Pte Ltd
CapitaLand Retail (SI) Investment holding Singapore 100 100 Investments Pte Ltd
Clarke Quay Pte Ltd Property investment Singapore 100 100
Plaza Singapura (Private) Ltd Property investment Singapore 100 100
Pronto Investment One Investment holding Singapore 100 100 Pte Ltd
Pyramex Investments Pte Ltd Investment holding Singapore 100 100
1 Vast Winners Sdn Bhd Property investment Malaysia 100 100
(vi) Directly or indirectly held by The Ascott Group Limited:
Ascott Holding (China) Investment holding British Virgin 100 66.5 Limited Islands
Ascott Serviced Residence Fund management and Singapore 100 66.5 (China) Fund investment manangement Management Pte Ltd
1 Casablanca Villa (M) Sdn Bhd Property development Malaysia 100 66.5
1 EuroResidence 1 SARL Investment holding France 100 66.5
1 Guangzhou Slamet Property Development and operation of The People’s 100 46.5 Co., Ltd (Formerly known a golf and country club Republic of China as Guangzhou F.C. Golf & Country Club Co Ltd)
Orchard Point (1999) Limited Property investment Singapore 100 66.5
1 Oriville SAS Investment holding France 100 66.5
SH Malls Investments Property rental Singapore 100 66.5 Pte Ltd and investment holding
200
Notes to the Financial Statements
37. SUBSIDIARIES (cont’d)
(b) Other signifi cant subsidiaries in the Group are (cont’d): Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Name of Company Principal Activities Business % %
(vi) Directly or indirectly held by The Ascott Group Limited (cont’d):
Somerset (Australia) Pte Ltd Investment holding Singapore 100 66.5
Somerset Investments Property investment Singapore 100 66.5 Pte Ltd and investment holding
Somerset Retail Holdings Investment holding Singapore 100 66.5 Pte Ltd
Somerset (Wuhan) Investment holding Singapore 70 46.5 Investments Pte Ltd
The Ascott Capital Pte Ltd Trading securities Singapore 100 66.5 and fi nancial instruments and the provision of fi nancing services
The Ascott Group Investment holding Singapore 100 66.5 (Europe) Pte Ltd
The Ascott Holdings Limited Investment holding Singapore 100 66.5
1 Wuhan New Minzhong Property development and investment The People’s 70 46.5 Leyuan Co Ltd Republic of China
(vii) Directly or indirectly held by CapitaLand Financial Limited:
CapitaLand China Investment holding, fund management Singapore 100 100 Development Fund and investment management Management Private Limited
CapitaCommerical Trust Property fund management, investment Singapore 100 100 Management Limited and related services
CapitaMall Trust Property fund management, investment Singapore 100 100 Management Limited and related services
CapitaRetail China Fund Property fund management Singapore 100 100 Management Pte Ltd
CapitaLand India Property fund management Singapore 100 100 Management Pte Ltd
CapitaLand Japan Fund Property fund management Singapore 100 100 Management Pte Ltd
CapitaLand RECM Pte Ltd Investment holding Singapore 100 100
201
37. SUBSIDIARIES (cont’d)
(b) Other signifi cant subsidiaries in the Group are (cont’d): Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Name of Company Principal Activities Business % %
(vii) Directly or indirectly held by CapitaLand Financial Limited (cont’d):
Hampshire Residence Investment holding Singapore 100 100 Pte Ltd
RCCF Management Pte Ltd Investment holding, fund management Singapore 100 100 and investment management
(viii) Directly or indirectly held by Australand: 2 Australand ASSETS Trust Lend funds at interest Australia 59.3 54.2 to Australand Property Trust
2 Australand Finance Limited Providing fi nance facilitations Australia 59.3 54.2 for Australand Holdings Limited
2 Australand Funds Trustee and Responsible Entity Australia 59.3 54.2 Management Limited of Australand Wholesale Property Trust No.6 and Australand Wholesale Property Trust No. 6A
2 Australand HK Promotion and marketing of Australia 59.3 54.2 Company Limited Australand Group’s property development in Asia
2 Australand Acting as Trustee and Responsible Australia 59.3 54.2 Investments Limited Entity of Australand Property Trust No. 4, Australand Property Trust No. 5 and Trustee of APG Portfolio No. 1 Holding Trust
2 Australand Property Investment in income producing Australia 59.3 54.2 Trust No. 4 commercial and industrial properties within Australia
2 Australand Property Limited Acting as the Responsible Entity Australia 59.3 54.2 of Australand Property Trust and Australand ASSETS Trust
2 Australand Property Investment in income producing Australia 59.3 54.2 Trust No. 5 commercial and industrial properties within Australia
2 Australand Wholesale Custodian of the assets of Australia 59.3 54.2 Holdings Limited Australand Property Trust No. 4 and Austrland Property Trust No. 5
202
Notes to the Financial Statements
37. SUBSIDIARIES (cont’d)
(b) Other signifi cant subsidiaries in the Group are (cont’d): Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Name of Company Principal Activities Business % %
(viii) Directly or indirectly held by Australand (cont’d): 2 Australand Wholesale Custodian of the assets of Australia 59.3 54.2 Investments (Custodian) Australand Wholesale Property Limited Trust No. 3
2 Rylehall Pty Limited Land and Residential housing Australia 59.3 54.2 development and provision of administrative services
2 Freshwater Residential Property development Australia 59.3 54.2 Unit Trust
2 Port Catherine Development Property development Australia 59.3 54.2 Pty Ltd
2 Australand Property Trust Investment in income producing Australia 59.3 54.2 commercial and industrial properties within Australia
(ix) Directly or indirectly held by CapitaLand ILEC Pte Ltd: 1 CapitaLand Bahrain Bay Management consultancy services Bahrain 100 100 Business Services WLL
CapitaLand GCC Investment holding Singapore 100 100 (Abu Dhabi) Pte Ltd
CapitaLand GCC Investment holding Singapore 100 100 (Bahrain) Pte Ltd
CapitaLand Integrated Investment holding Singapore 100 100 Resort Pte Ltd
Kestrel Pte Ltd Investment holding Singapore 100 –
Tinline Limited (HK) Provision for consultancy Hong Kong 100 100 and asset management services
Notes: All subsidiaries are audited by KPMG LLP Singapore except for the following:
1 Audited by other member fi rms of KPMG International.
2 Audited by PricewaterhouseCoopers and its associated fi rms.
203
38. ASSOCIATES
Details of signifi cant associates are as follows: Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Associates Principal Activities Business % %
(i) Jointly held by Somerset Capital Pte Ltd and The Ascott Group Limited:
Ascott Residence Trust Property trust Singapore 47.0 37.3
(ii) Indirectly held by CapitaLand China Holdings Pte Ltd:
CapitaLand China Property investment & development Singapore 37.5 37.5 Development Fund Pte Ltd
CapitaLand China Residential Investment holding Singapore 33.6 33.6 Fund Ltd
1 Central China Real Estate Ltd Investment holding Cayman Islands 27.1 36.1
2 Lai Fung Holdings Limited Investment holding Cayman Islands 20.0 20.0
1 Raffl es City China Fund Ltd Investment holding Cayman Islands 50.0 –
(iii) Indirectly held by CapitaLand Commercial Limited:
CapitaCommercial Trust Property investment Singapore 31.1# 30.5#
# Includes 1.6% & 0.7% indirectly held by CapitaLand Financial Limited for 2008 & 2007 respectively.
(iv) Indirectly held by CapitaLand Retail Limited:
CapitaMall Trust Property investment Singapore 29.6^ 29.4^
CapitaRetail Japan Fund Investment holding Singapore 26.3 26.3 Private Limited
CapitaRetail China Trust Property investment Singapore 26.6@ 26.0@
CapitaRetail China Property investment Singapore 45.0 45.0 Development Fund
CapitaRetail China Property investment Singapore 45.0 45.0 Development Fund II
CapitaRetail China Property investment Singapore 30.0 30.0 Incubator Fund
CapitaRetail India Property investment Singapore 45.5 45.5 Development Fund
^ Includes 0.8% and 0.5% indirectly held by CapitaLand Financial Limited for 2008 and 2007 respectively.
@ Includes 0.8% and 0.1% indirectly held by CapitaLand Financial Limited for 2008 and 2007 respectively.
204
Notes to the Financial Statements
38. ASSOCIATES (cont’d)
Details of signifi cant associates are as follows (cont’d): Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Associates Principal Activities Business % %
(v) Indirectly held by CapitaLand Financial Limited: 1 CapitaLand AIF Ltd Investment holding Cayman Islands 44.4 44.4
2 I. P. Property Fund Asia Limited Investment in real estate Guernsey 20.0 20.0
(vi) Indirectly held by CapitaLand ILEC Pte Ltd 1 Raffl es City Bahrain Fund Ltd Property investment Cayman Islands 37.1 37.1
2 East Asia Satellite Television Investment holding British Virgin 33.3 33.3 (Holdings) Limited Islands
Notes: All associates are audited by KPMG LLP Singapore except for the following:
1 Audited by other member fi rms of KPMG International.
2 Audited by Ernst & Young and its associated fi rms.
39. JOINTLY-CONTROLLED ENTITIES
Details of signifi cant jointly-controlled entities are as follows: Effective Interest held by the Group
Place of Incorporation/ 2008 2007 Jointly-Controlled Entities Principal Activities Business % %
(i) Directly held by CapitaLand Asia Pte Ltd: 1 T.C.C. Capital Land Limited Property development and investment Thailand 40 40
(ii) Indirectly held by CapitaLand Residential Limited:
Waterfront Properties Pte Ltd Property development and investment Singapore 50 50
Riverwalk Promenade Pte Ltd Property development Singapore 50 50
Tanglin Residential Pte Ltd Property development Singapore 50 50
(iii) Indirectly held by CapitaLand Retail Limited:
CapitaLand Hualian Property management The People’s 50 50 Management & Consulting and consulting services Republic of China (Shenzhen) Co., Ltd
Orchard Turn Holding Pte Ltd Investment holding Singapore 50 50
(iv) Directly held by CapitaLand ILEC Pte Ltd: 1 Mubadala CapitaLand Development and management of United Arab 49 49 Real Estate LLC an integrated real estate development Emirates
Notes: All jointly-controlled entities are audited by KPMG LLP Singapore except for the following:
1 Audited by other member fi rms of KPMG International.
205
40. OPERATING SEGMENTS (THE GROUP)
Management determines the operating segments based on the reports reviewed and used by the Council of Chief Executive
Offi cers (“CEOs”) for strategic decisions making and resources allocation. For management purposes, the Group is organised
into strategic business units based on their products, services and geography.
On 31 March 2008, the Group announced key organisational changes in line with its efforts to fl atten the organisational structure
to support its business growth. CapitaLand Residential SBU was fl attened into its 3 main components being CapitaLand
Residential Singapore, CapitaLand China Holdings, and CapitaLand’s holdings in Australand. In addition, CapitaLand Commercial
business took on the responsibility of the overseas business in Vietnam, Malaysia, India and Thailand (including residential
projects). The changes took effect from 1 April 2008.
The Group’s reportable operating segments are as follows:
(i) CapitaLand Residential Singapore – develops residential properties in Singapore for sale and covers a wide spectrum of
the residential market in Singapore.
(ii) CapitaLand China Holdings – involves in residential, commercial and integrated property developments in China.
(iii) CapitaLand Commercial – owner/manager of offi ce and industrial properties in Singapore, Malaysia and United Kingdom.
It also develops residential projects in Vietnam, Malaysia, India and Thailand.
(iv) CapitaLand Retail – retail mall owner/manager with portfolio in Singapore, China, India, Japan and Malaysia.
(v) Ascott – an international serviced residence owner-operator with operations in key cities of Asia Pacifi c, Europe and the
Gulf region. It operates three brands, namely Ascott, Somerset and Citadines. The Group’s holding in Ascott Residence
Trust is also presented in this segment.
(vi) CapitaLand Financial – involves in real estate fund management and fi nancial advisory services.
(vii) Australand – a major diversifi ed property group with activities in residential, commercial & industrial developments and
investment properties across Australia.
(viii) Others – includes Corporate Offi ce, Group Treasury, the Group’s new businesses and consolidation adjustments.
Information regarding the operations of each reportable segment is included below. Management monitors the operating results
of each of its business unit for the purpose of making decisions on resource allocation and performance assessment. Performance
is measured based on segment earnings before interest and tax (“EBIT”). EBIT is used to measure performance as management
believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that
operate within these industries. Group fi nancing (including fi nance costs) and income taxes are managed on a group basis and
are not allocated to operating segments. Segment assets and liabilities are presented net of inter segment balances. Inter-
segment pricing is determined on arm’s length basis.
Geographically, management reviews the performance of the businesses in Singapore, China, Asia/Gulf Cooperation Council
(“GCC”) countries, Australia and Europe. In presenting information on the basis of geographical segments, segment revenue is
based on the geographical location of customers. Non-current assets and total assets are based on the geographical location
of the assets.
206
Notes to the Financial Statements
40. OPERATING SEGMENTS (THE GROUP) (cont’d)
Operating Segments – 31 December 2008
CapitaLand CapitaLand Residential China CapitaLand CapitaLand CapitaLand Singapore Holdings Commercial Retail Ascott Financial Australand Others Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue
External revenue 400,193 325,444 210,692 200,937 438,596 179,509 984,301 12,649 2,752,321
Inter-segment revenue – 4,884 17,186 5,745 3,163 2,724 – (33,702) –
Total Revenue 400,193 330,328 227,878 206,682 441,759 182,233 984,301 (21,053) 2,752,321
Segmental Results
Company and subsidiaries 140,790 849,444 229,827 157,365 141,655 85,300 141,847 92,168 1,838,396
Associates (8,739) 33,621 172,463 143,890 (4,090) 5,023 (368) (23,525) 318,275
Jointly-controlled entities 42,938 369 (6,703) (2,630) (5,367) 57 28,155 – 56,819
Earnings Before Interest and Taxation 174,989 883,434 395,587 298,625 132,198 90,380 169,634 68,643 2,213,490
Finance costs (516,331)
Taxation (235,776)
Profi t for the year 1,461,383
Segment Assets 2,001,736 3,602,172 2,902,222 5,108,275 3,454,785 308,771 4,079,499 3,626,153 25,083,613
Segment Liabilities 527,421 958,823 795,555 781,066 1,586,169 65,229 2,035,250 6,346,298 13,095,811
Other segment items:
Interest income 17,678 23,300 7,066 10,976 11,010 526 7,044 28,611 106,211
Depreciation and amortisation (775) (2,517) (5,232) (5,238) (32,310) (734) (4,354) (6,070) (57,230)
Impairment losses for assets – (5,591) (69) – (2,881) (31,336) – – (39,877)
Fair value gains/(losses) on
investment properties 20 299,475 18,147 50,196 938 – (68,094) – 300,682
Share-based expenses (3,247) (5,169) (6,411) (5,530) (8,365) (7,679) (2,772) (18,471) (57,644)
Gains on disposal of investments 30 378,475 189,858 33,173 69,173 780 472 3,219 675,180
Interests in Associates 279,739 1,249,467 1,476,785 2,779,708 538,685 208,902 34,476 210,051 6,777,813
Interests in Jointly-controlled Entities 268,247 127,933 239,673 187,459 75,873 – 185,856 1,739 1,086,780
Capital expenditure* 849 363,093 113,586 313,706 342,363 540 587,341 562,338 2,283,816
* Capital expenditure consists of additions of property, plant and equipment, investment properties, properties under development and intangible assets.
207
40. OPERATING SEGMENTS (THE GROUP) (cont’d)
Operating Segments – 31 December 2007
CapitaLand CapitaLand Residential China CapitaLand CapitaLand CapitaLand Singapore Holdings Commercial Retail Ascott Financial Australand Others Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue
External revenue 548,673 980,997 152,942 119,847 459,475 116,460 1,406,677 7,632 3,792,703
Inter-segment revenue – 4,282 12,714 4,400 – 2,712 – (24,108) –
Total Revenue 548,673 985,279 165,656 124,247 459,475 119,172 1,406,677 (16,476) 3,792,703
Segmental Results
Company and subsidiaries 239,930 367,637 822,459 121,825 251,119 20,768 426,015 62,167 2,311,920
Associates 34,263 35,088 532,082 185,471 73,448 48,870 – (1,482) 907,740
Jointly-controlled entities 34,358 653 522,133 (9,432) 12,620 86 43,964 – 604,382
Earnings Before Interest and Taxation 308,551 403,378 1,876,674 297,864 337,187 69,724 469,979 60,685 3,824,042
Finance costs (403,549)
Taxation (268,047)
Profi t for the year 3,152,446
Segment Assets 2,155,304 3,757,532 4,630,798 4,453,073 2,763,600 295,767 4,852,325 2,932,913 25,841,312
Segment Liabilities 1,001,169 1,329,099 1,117,816 776,650 1,378,428 55,991 2,550,535 5,766,285 13,975,973
Other segment items:
Interest income 5,423 19,716 21,816 15,343 11,318 1,113 5,553 44,277 124,559
Depreciation and amortisation (534) (1,338) (4,205) (2,500) (24,912) (603) (3,165) (3,510) (40,767)
Impairment losses for assets – – 96 – 278 (17,354) – – (16,980)
Fair value gains/(losses) on
investment properties – 34,387 572,355 13,186 2,786 – 148,325 7,792 778,831
Share-based expenses (2,878) (4,325) (4,718) (7,385) (7,882) (6,881) (1,887) (17,697) (53,653)
Gains on disposal of investments 283 18,692 227,386 50,747 179,111 26 13,631 55,962 545,838
Interests in Associates 137,054 528,494 1,389,839 2,249,086 514,703 157,889 53,917 197,893 5,228,875
Interests in Jointly-controlled Entities 159,488 106,990 400,559 196,198 83,798 1,098 271,771 1,956 1,221,858
Capital expenditure* 876 230,321 40,159 692,746 167,020 875 428,986 15,752 1,576,735
* Capital expenditure consists of additions of property, plant and equipment, investment properties, properties under development and intangible assets.
208
Notes to the Financial Statements
40. OPERATING SEGMENTS (THE GROUP) (cont’d)
Geographic Information Australia and Singapore New Zealand China* Asia/GCC# Europe Others@ Group $’000 $’000 $’000 $’000 $’000 $’000 $’000
2008
External Revenue 834,938 1,014,765 469,477 108,325 288,383 36,433 2,752,321
Non-current Assets^ 5,915,136 2,443,386 3,769,480 1,829,349 978,340 – 14,935,691
Total Assets 10,904,953 4,139,978 6,469,898 2,295,915 1,166,313 106,556 25,083,613
2007
External Revenue 895,244 1,446,306 1,094,201 68,221 280,181 8,550 3,792,703
Non-current Assets^ 6,030,102 2,758,144 3,830,779 1,242,023 993,629 – 14,854,677
Total Assets 11,461,784 4,899,826 6,556,788 1,596,340 1,265,139 61,435 25,841,312
* China includes Hong Kong and Macau.
# Asia/GCC includes Indonesia, Japan, Malaysia, Philippines, Thailand, Korea, India, Vietnam and Gulf Cooperation Council countries.
@ Others includes the Cayman Islands.
^ Non-current assets comprised property, plant and equipment, intangible assets, investment properties, properties under development and interest in associates and jointly-controlled entities.
41. SUBSEQUENT EVENTS
On 9 February 2009, the Company announced a fully underwritten rights issue to raise gross proceeds of approximately $1.84
billion. Pursuant to the rights issue, up to 1.42 billion rights shares were offered at the issue price of $1.30 per rights share on
the basis of one (1) rights share for every two (2) existing shares held by shareholders as at 23 February 2009.
A listed associate of the Group, CapitaMall Trust (“CMT”), also announced a $1.23 billion rights issue. The Company has agreed
to procure that its relevant subsidiaries subscribe for their respective pro-rata entitlements under the CMT rights issue. In
addition, the Company has also agreed to subscribe or procure the subscription of such number of additional units under the
CMT rights issue which would, together with the pro-rata entitlements of its relevant subsidiaries, amount to up to 60% of the
new units to be issued under the CMT rights issue.
209
42. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The Group has not applied the following accounting standards (including its consequential amendments) and interpretations
that have been issued but are not yet effective:
– FRS 1 (revised 2008) Presentation of Financial Statements
– FRS 23 (revised 2007) Borrowing Costs
– Amendments to FRS 32 Financial Instruments: Presentation and FRS 1 Presentation of Financial Statements
– Puttable Financial Instruments and Obligations Arising on Liquidation
– Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items
– Amendments to FRS 101 First-time Adoption of Financial Reporting Standards and FRS 27 Consolidated and Separate
Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
– Amendment to FRS 102 Share-based Payment – Vesting Conditions and Cancellations
– Improvements to FRSs 2008
– INT FRS 113 Customer Loyalty Programmes
– INT FRS 116 Hedges of a Net Investment in a Foreign Operation
– INT FRS 117 Distribution of Non-cash Assets to Owners
FRS 1 (revised 2008) will become effective for the Group’s fi nancial statements for the year ending 31 December 2009. The
revised standard requires an entity to present, in a statement of changes in equity, all owner changes in equity. All non-owner
changes in equity (i.e. comprehensive income) are required to be presented in one statement of comprehensive income or in two
statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income
are not permitted to be presented in the statement of changes in equity. In addition, a statement of fi nancial position is required
at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the
reclassifi cation of items in the fi nancial statements. FRS 1 (revised 2008) does not have any impact on the Group’s fi nancial
position or results.
FRS 23 will become effective for fi nancial statements for the year ending 31 December 2009. FRS 23 removes the option to
expense borrowing costs and requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction
or production of a qualifying asset as part of the cost of that asset. The Group’s current policy is consistent with the FRS 23
requirement to capitalise borrowing costs.
The amendments to FRS 32 and FRS 1 on puttable fi nancial instruments will become effective for the Group’s fi nancial
statements for the year ending 31 December 2009. The amendments allow certain instruments that would normally be classifi ed
as liabilities to be classifi ed as equity if and only if they meet certain conditions. The Group does not issue such puttable fi nancial
instruments and thus the application of these amendments is not expected to have any signifi cant impact on the Group’s
fi nancial statements.
The amendments to FRS 39 on eligible hedged items will become effective for the Group’s fi nancial statements for the year
ending 31 December 2010. The amendments clarify how the principles that determine whether a hedged risk or portion of cash
fl ows is eligible for designation should be applied in two particular situations: (i) the designation of a one-sided risk in a hedged
item; and (ii) the designation of infl ation in particular situations. The application of these amendments is not expected to have
any signifi cant impact on the Group’s fi nancial statements.
The amendments to FRS 101 and FRS 27 on the cost of an investment in a subsidiary, jointly controlled entity or associate will
become effective for the Company’s fi nancial statements for the year ending 31 December 2009. The amendments remove the
defi nition of “cost method” currently set out in FRS 27, and instead require an entity to recognise all dividend from a subsidiary,
jointly controlled entity or associate as income in its separate fi nancial statements when its right to receive the dividend is
established. The application of these amendments is not expected to have any signifi cant impact on the Company’s fi nancial
statements.
210
Notes to the Financial Statements
42. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (cont’d)
The amendments to FRS 102 on vesting conditions and cancellations will become effective for the Group’s fi nancial statements
for the year ending 31 December 2009. The amendments clarify the defi nition of vesting conditions and provide the accounting
treatment for non-vesting conditions and cancellations. The application of these amendments is not expected to have any
signifi cant impact on the Group’s fi nancial statements.
Improvements to FRSs 2008 will become effective for the Group’s fi nancial statements for the year ending 31 December 2009,
except for the amendment to FRS 105 Non-current Assets Held for Sale and Discontinued Operations which will become
effective for the year ending 31 December 2010. Improvements to FRSs 2008 contain amendments to numerous accounting
standards that result in accounting changes for presentation, recognition or measurement purposes and terminology or editorial
amendments. The Group is in the process of assessing the impact of these amendments.
INT FRS 113 will become effective for the Group’s fi nancial statements for the year ending 31 December 2009. INT FRS 113
concludes that where entities grant award credits as incentives to customers to buy their goods or services (e.g. loyalty points
or free products), such customer loyalty programmes should be accounted for by taking a multiple sales approach, i.e. by
deferring some of the revenue received from the initial sales transaction, to be recognised as revenue as and when the entity
provides the goods or services promised under the customer loyalty programmes. The Group is in the process of assessing the
impact of this Interpretation.
INT FRS 116 will become effective for the Group’s fi nancial statements for the year ending 31 December 2009. INT FRS 116
provides guidance on identifying foreign currency risks and hedging instruments that qualify for hedge accounting in the hedge
of a net investment in a foreign operation. It also explains how an entity should determine the amounts to be reclassifi ed from
equity to profi t or loss for both the hedging instrument and the hedged item. The application of this Interpretation is not expected
to have any signifi cant impact on the Group’s fi nancial statements.
INT FRS 117 will become effective for the Group’s fi nancial statements for the year ending 31 December 2010. INT FRS 117
provides guidance on when to recognise a dividend payable, and clarifi es that an entity should measure the dividend payable at
the fair value of the net assets to be distributed. It also clarifi es that an entity should recognise the difference between the
dividend paid and the carrying amount of the net assets distributed in profi t or loss. INT FRS 117 will be applied prospectively
and therefore there will be no impact on prior periods in the Group’s fi nancial statements for the year ending 31 December 2010.
211
1. DIRECTORS’ REMUNERATION
(a) Directors’ Compensation Table for the Financial Year Ended 31 December 2008:
Salary inclusive of Bonus and other Directors’ fees AWS and benefi ts inclusive inclusive of employer’s CPF of employer’s CPF(1)(2) attendance fees(3) Total Directors of the Company $ $ $ $
Payable by Company:
Dr Hu Tsu Tau – – 122,130 122,130
Hsuan Owyang(4) – – 172,800 172,800
Liew Mun Leong 1,198,872 2,979,118 – 4,177,990
Lim Chin Beng – – 97,200 97,200
Jackson Peter Tai – – 120,060 120,060
Peter Seah Lim Huat – – 93,600 93,600
Richard Edward Hale – – 122,400 122,400
Professor Robert Henry Edelstein(5) – – 22,365 22,365
Dr Victor Fung Kwok King – – 54,900 54,900
James Koh Cher Siang – – 124,200 124,200
Arfat Pannir Selvam – – 134,100 134,100
Professor Kenneth Stuart Courtis – – 73,800 73,800
Sub-Total 1 1,198,872 2,979,118 1,137,555 5,315,545
Payable by Subsidiaries:
Hsuan Owyang – – 193,000 193,000
Liew Mun Leong – 31,996 14,066 46,062
Lim Chin Beng – 26,663 133,025 159,688
Richard Edward Hale – 26,663 151,573 178,236
Sub-Total 2 – 85,322 491,664 576,986
Total for Directors of the Company 1,198,872 3,064,440 1,629,219 5,892,531
During the year 2008, contingent awards of shares were also granted. For details, please refer to the Directors’ Report.
1 With effect from this fi nancial year ended 31 December 2008, the bonus fi gures disclosed are based on an accrual basis and are accrued for the performance of the same year. Previously, bonuses were disclosed based on payments made in the fi nancial year and these payments were for bonuses awarded for the performance of past years, and not for that fi nancial year. The bonus fi gure, as set out in section 1(b) – Directors’ Compensation Table for the Financial Year Ended 31 December 2007, is on the same accrual basis.
2 The bonus plan for the Group Chief Executive Offi cer and key management is an Economic Value Added (EVA) incentive plan. This pay-for-performance plan was adopted in year 2000 when the company was formed. EVA is a well-established fi nancial performance measure that captures the true economic profi t of an enterprise, refl ecting the wealth created by the enterprise and taking into consideration the cost of capital employed. Essentially, EVA measures the net operating profi t after tax of the Group minus the cost of all capital employed. The EVA incentive plan was adopted by the Group because it established clear, accountable links between strategic management, capital planning, daily operating decisions and shareholder value. The objective of the EVA incentive plan is to incentivise senior management to adopt strategies and decisions that will result in long-term growth and sustained profi tability of the Group. It directly aligns management bonus with the profi tability and value creation for the Group. Each participant of the EVA incentive plan has an individual bonus account (“bonus account”). The EVA bonus awarded in a particular year will be credited into the bonus account and 1/3 of the balance in the bonus account will be paid out to the participant annually, provided the account balance is positive. The EVA incentive plan has a ‘clawback’ feature. If the Group performs poorly in EVA in a particular year, the EVA bonus attributable for that year will be negative and such negative amount will be subtracted from the balance in the bonus account. This ‘clawback’ of bonus will ensure that any poor fi nancial performance of the Group in subsequent years will be accounted for. In line with the long term orientation of the EVA incentive plan, participants who resign from the Group with less than 12 years of service will lose a portion of the amount in his or her bonus account.
3 The directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
4 Mr Hsuan Owyang resigned as a director of the Company on 1 January 2009.
5 Professor Robert Henry Edelstein resigned as a director of the Company on 29 April 2008.
Other Information
212
Other Information
1. DIRECTORS’ REMUNERATION (cont’d)
(b) Directors’ Compensation Table for the Financial Year Ended 31 December 2007:
Salary inclusive of Bonus and other Directors’ fees AWS and benefi ts inclusive inclusive of employer’s CPF of employer’s CPF(1)(2) attendance fees(3) Total Directors of the Company $ $ $ $
Payable by Company:
Dr Hu Tsu Tau – – 152,000 152,000
Hsuan Owyang – – 200,000 200,000
Liew Mun Leong 1,147,264 20,522,686 – 21,669,950
Lim Chin Beng – – 106,000 106,000
Jackson Peter Tai – – 113,100 113,100
Peter Seah Lim Huat – – 99,700 99,700
Richard Edward Hale – – 136,000 136,000
Professor Robert Henry Edelstein – – 82,000 82,000
Dr Victor Fung Kwok King – – 71,400 71,400
James Koh Cher Siang – – 138,000 138,000
Arfat Pannir Selvam – – 149,000 149,000
Professor Kenneth Stuart Courtis – – 62,950 62,950
Andrew Robert Fowell Buxton(4) – – 13,750 13,750
Sub-Total 1 1,147,264 20,522,686 1,323,900 22,993,850
Payable by Subsidiaries:
Hsuan Owyang – – 193,000 193,000
Lim Chin Beng – – 77,000 77,000
Richard Edward Hale – – 160,000 160,000
Andrew Robert Fowell Buxton(4) – – 7,200 7,200
Sub-Total 2 – – 437,200 437,200
Total for Directors of the Company 1,147,264 20,522,686 1,761,100 23,431,050
During the year 2007, contingent awards of shares were also granted. For details, please refer to the Directors’ Report.
1 The bonus fi gures disclosed above are on an accrual basis and were awarded for the performance of the same year. Previously, bonuses were disclosed based on payment made in the fi nancial year and these payments were for bonuses awarded for the performance of past years. For the Group Chief Executive Offi cer’s 2007 bonus, this was previously stated as S$5.35 million which was the actual amount paid to him in 2007 based on the Group’s performance in 2006. On an accrual basis, the bonus accrued to the Group Chief Executive Offi cer for the Group’s performance in 2007 was S$20.52 million. The Group had achieved a record performance that year with profi t after tax and minority interests of S$2.8 billion. Under the bonus plan for the Group Chief Executive Offi cer and key management, bonuses awarded are paid out progressively during their service with the Group. The CapitaLand Group’s bonus plan is reviewed regularly to ensure that the measures remain relevant and the targets are in line with market expectations. The fi nal formula and the computed bonus amounts based on the formula are approved by the Executive Resource and Compensation Committee comprising three non- executive directors, the majority of whom are independent. The EVA computations, based on the approved EVA policies, are also verifi ed by the Group’s external auditors.
2 Please see footnote (2) in the previous page on the features and working of the bonus plan for the Group Chief Executive Offi cer and key management.
3 The directors’ fees were approved by the shareholders and had since been paid.
4 Mr Andrew Robert Fowell Buxton resigned as a director of the Company on 14 February 2007.
(c) Number of Directors of CapitaLand Limited in Remuneration Bands:
Remuneration Bands 2008 2007
$500,000 and above 1 1
$250,000 to $499,999 0 0
Below $250,000 11 12
Total 12 13
213
2. INTERESTED PERSON TRANSACTIONS
Interested person transactions carried out during the fi nancial year which fall under Chapter 9 of the Listing Manual of the
Singapore Exchange Securities Trading Limited are as follows:
2008 The Group $’000
Transactions for the Sale of Goods and Services:
Associates of Temasek Holdings (Private) Limited 717
Singapore Airlines Limited and its associates 6,804
Transactions for the Purchase of Goods and Services:
Associates of Temasek Holdings (Private) Limited 894
Associates of SembCorp Industries Ltd 104
Shareholder’s Loan to an Investee Company:
Associate of Dr Victor Fung Kwok King 1,782
Interest payable in relation to the subscription of 3-year fi xed rate notes
issued by an indirect subsidiary of the Company under a
multicurrency medium term notes programme:
Liew Mun Leong 141
Professional advisory fees:
Professor Kenneth Stuart Courtis 137
3. EXECUTIVES’ REMUNERATION
Remuneration Data (for employees earning $500,000 and above) for fi nancial year ended 31 December 2008:
Total Compensation Bands Total No. of Employees
$500,000 to $749,999 15
$750,000 to $999,999 3
$1,000,000 to $1,249,999 5
$1,250,000 to $1,499,999 3
$1,500,000 to $1,749,999 1
$1,750,000 to $1,999,999 3
$2,000,000 to $2,249,999 2
$2,250,000 to $2,499,999 2
$2,500,000 to $2,749,999 –
$2,750,000 to $2,999,999 –
≥ $3,000,000 1
Total 35
Note 1: The above executives’ remuneration data pertains only to the Group’s employees in Singapore and those who are posted overseas. It does not include the remuneration data of the employees of listed subsidiaries and overseas subsidiaries.
Note 2: Total compensation comprises salary, annual wage supplement, bonus and other benefi ts in kind.
214
Shareholding Statistics As at 25 February 2009
SHARE CAPITAL FULLY PAID
S$4,396,766,063.0105 (comprising 2,823,889,613 fully paid Ordinary Shares; voting rights: one vote per share)
TWENTY LARGEST SHAREHOLDERS
As shown in the Register of Members and Depository Register
Name No. of Shares %
1 Temasek Holdings (Private) Limited 1,120,469,427 39.68 2 DBS Nominees (Private) Limited 643,251,579 22.78 3 Citibank Nominees Singapore Pte Ltd 234,710,469 8.31 4 DBSN Services Pte. Ltd. 144,791,819 5.13 5 HSBC (Singapore) Nominees Pte Ltd 112,105,671 3.97 6 United Overseas Bank Nominees (Private) Limited 73,852,626 2.62 7 Raffl es Nominees (Pte.) Limited 64,653,268 2.29 8 DB Nominees (Singapore) Pte Ltd 43,522,185 1.54 9 Lee Pineapple Company (Pte) Limited 10,000,000 0.35 10 Paramount Assets Investments Pte. Ltd. 10,000,000 0.35 11 Merrill Lynch (Singapore) Pte. Ltd. 9,787,842 0.35 12 Pei Hwa Foundation Limited 8,013,557 0.28 13 OCBC Nominees Singapore Private Limited 7,954,865 0.28 14 Macquarie Capital Securities (Singapore) Pte. Limited 7,245,780 0.26 15 TM Asia Life Singapore Ltd – PAR Fund 5,773,000 0.20 16 OCBC Securities Private Limited 5,636,296 0.20 17 BNP Paribas Nominees Singapore Pte Ltd 5,011,787 0.18 18 Phillip Securities Pte Ltd 5,001,227 0.18 19 UOB Kay Hian Private Limited 3,679,491 0.13 20 Morgan Stanley Asia (Singapore) Securities Pte Ltd 3,569,927 0.13
Total 2,519,030,816 89.20
SUBSTANTIAL SHAREHOLDERS
As shown in the Register of Substantial Shareholders as at 25 February 2009 No. of ordinary shares No. of ordinary shares in which substantial shareholder in which substantial shareholder Substantial Shareholders has a direct interest is deemed to have an interest
Temasek Holdings (Private) Limited 1,120,469,427 47,811,3841
Janus Capital Management LLC 178,065,100 –
Note:
1 By virtue of Section 7 of the Companies Act, Cap. 50 of Singapore, Temasek Holdings (Private) Limited (“Temasek”) is deemed to have an interest in 47,811,384 ordinary shares in which Temasek’s subsidiaries and associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance (Incorporated).
SIZE OF HOLDINGS No. of % of No. of % of Size of Shareholdings shareholders shareholders shares shares
1– 999 3,097 6.86 607,102 0.02 1,000 –10,000 37,333 82.72 125,449,219 4.44 10,001–1,000,000 4,673 10.36 162,160,206 5.74 1,000,001 and above 28 0.06 2,535,673,086 89.80
Total 45,131 100.00 2,823,889,613 100.00
Approximately 52.23% of the issued ordinary shares are held in the hands of the public. Rule 723 of the Listing Manual of the
Singapore Exchange Securities Trading Limited is complied with.
215
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the STI Auditorium, 168 Robinson Road,
Level 9, Capital Tower, Singapore 068912, on Thursday, 23 April 2009 at 10.00 a.m. to transact the following business:
AS ORDINARY BUSINESS
1 To receive and adopt the Directors’ Report and Audited Financial Statements for the year ended 31 December 2008 and the
Auditors’ Report thereon.
2 To declare a fi rst and fi nal 1-tier dividend of S$0.055 per share and a special 1-tier dividend of S$0.015 per share for the year
ended 31 December 2008.
3 To approve Directors’ fees of S$1,137,555 for the year ended 31 December 2008. (2007: S$1,323,900)
4 To re-appoint the following Directors, who are retiring under Section 153(6) of the Companies Act, Cap. 50 of Singapore, to hold
offi ce from the date of this Annual General Meeting until the next Annual General Meeting:
(i) Dr Hu Tsu Tau
(ii) Mr Lim Chin Beng
(iii) Mr Richard Edward Hale
5 To re-elect the following Directors, who are retiring by rotation pursuant to Article 95 of the Articles of Association of the
Company and who, being eligible, offer themselves for re-election:
(i) Mr James Koh Cher Siang
(ii) Mrs Arfat Pannir Selvam
(iii) Professor Kenneth Stuart Courtis
6 To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fi x their remuneration.
7 To transact such other ordinary business as may be transacted at an Annual General Meeting of the Company.
216
Notice of Annual General Meeting
AS SPECIAL BUSINESS
8 To consider and, if thought fi t, to pass with or without any modifi cation, the following resolutions as Ordinary Resolutions:
8A That pursuant to Section 161 of the Companies Act, Cap. 50 of Singapore, authority be and is hereby given to the Directors of
the Company to:
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be
issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other
instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their
absolute discretion deem fi t; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of
any Instrument made or granted by the Directors while this Resolution was in force,
provided that:
(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of
Instruments made or granted pursuant to this Resolution) does not exceed fi fty per cent. (50%) of the total number of
issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph
(2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the
Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does
not exceed ten per cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the
Company (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited (“SGX-
ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above,
the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding
treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share
awards which are outstanding or subsisting at the time this Resolution is passed; and
(ii) any subsequent bonus issue, consolidation or subdivision of shares;
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing
Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the
Articles of Association for the time being of the Company; and
(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in
force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is the earlier.
217
AS SPECIAL BUSINESS (cont’d)
8B That the Directors be and are hereby authorised to:
(a) grant awards in accordance with the provisions of the CapitaLand Performance Share Plan (“Performance Share Plan”)
and/or the CapitaLand Restricted Stock Plan (“Restricted Stock Plan”); and
(b) allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the
exercise of options under the CapitaLand Share Option Plan and/or such number of fully paid shares in the Company as
may be required to be issued pursuant to the vesting of awards under the Performance Share Plan and/or the Restricted
Stock Plan,
provided that:
(i) the aggregate number of shares to be issued pursuant to options granted under the CapitaLand Share Option Plan and
the vesting of awards granted or to be granted under the Performance Share Plan and the Restricted Stock Plan shall not
exceed fi fteen per cent. (15%) of the total number of issued shares (excluding treasury shares) in the capital of the
Company from time to time; and
(ii) the aggregate number of new shares under awards which may be granted pursuant to the Performance Share Plan and
the Restricted Stock Plan during the period commencing from the date of this Annual General Meeting and ending on the
date of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the
Company is required by law to be held, whichever is the earlier, shall not exceed two per cent. (2%) of the total number of
issued shares (excluding treasury shares) in the capital of the Company from time to time.
By Order of the Board
Low Sai Choy
Company Secretary
Singapore
23 March 2009
218
Notice of Annual General Meeting
Notes:
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and
vote instead of him. Where a member appoints more than one proxy, he shall specify the proportion of his shareholdings to be
represented by each proxy. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be
deposited at the offi ce of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate
Offi ce, Singapore 068906 not less than 48 hours before the time appointed for holding the Meeting.
Additional information relating to the Notice of Annual General Meeting:
1 In relation to items 4(i), (ii) and (iii) under the heading “As Ordinary Business”, Dr Hu Tsu Tau will, upon re-appointment, continue
to serve as Chairman of the Investment Committee; Mr Lim Chin Beng will, upon re-appointment, continue to serve as Chairman
of the Executive Resource and Compensation Committee and the Nominating Committee respectively; and Mr Richard Edward
Hale will, upon re-appointment, continue to serve as Chairman of the Audit Committee and a Member of the Risk Committee.
Dr Hu, Mr Lim and Mr Hale are considered as independent Directors.
2 In relation to items 5(i), (ii) and (iii) under the heading “As Ordinary Business”, Mr James Koh Cher Siang will, upon re-election,
continue to serve as Chairman of the Corporate Disclosure Committee and the Risk Committee and a Member of the Audit
Committee respectively; Mrs Arfat Pannir Selvam will, upon re-election, continue to serve as a Member of the Audit Committee,
the Corporate Disclosure Committee, the Nominating Committee, and the Risk Committee respectively; and Professsor Kenneth
Stuart Courtis will, upon re-election, continue to serve as a Member of the Finance and Budget Committee and the Investment
Committee respectively. Mr Koh, Mrs Selvam and Professor Courtis are considered as independent Directors.
3 Ordinary Resolution No. 8A under the heading “As Special Business”, if passed, will empower the Directors to issue shares in
the Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in
pursuance of such instruments from the date of the Annual General Meeting until the date of the next Annual General Meeting.
The aggregate number of shares which the Directors may issue (including shares to be issued pursuant to convertibles) under
this Resolution must not exceed fi fty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the
capital of the Company with a sub-limit of ten per cent. (10%) for issues other than on a pro rata basis. For the purpose of
determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares)
will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the
time that Ordinary Resolution No. 8A is passed, after adjusting for (a) new shares arising from the conversion or exercise of any
convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary
Resolution No. 8A is passed and (b) any subsequent bonus issue, consolidation or subdivision of shares. The sub-limit of 10%
for issues other than on a pro rata basis is below the 20% sub-limit permitted by the Listing Manual of the Singapore Exchange
Securities Trading Limited. The Directors believe that the lower sub-limit of 10% would suffi ciently address the Company’s
present need to maintain fl exibility while taking into account shareholders’ concerns against dilution.
4 Ordinary Resolution No. 8B under the heading “As Special Business”, if passed, will empower the Directors to grant awards
under the CapitaLand Performance Share Plan (“Performance Share Plan”) and the CapitaLand Restricted Stock Plan (“Restricted
Stock Plan”), and to allot and issue shares pursuant to the exercise of options outstanding under the CapitaLand Share Option
Plan and/or the vesting of awards granted pursuant to the Performance Share Plan and the Restricted Stock Plan, provided that
(a) the aggregate number of shares to be issued pursuant to the CapitaLand Share Option Plan, the Performance Share Plan and
the Restricted Stock Plan does not exceed fi fteen per cent. (15%) of the total number of shares (excluding treasury shares) in
the capital of the Company from time to time, and (b) the aggregate number of new shares under awards which may be granted
pursuant to the Performance Share Plan and the Restricted Stock Plan from the date of the Annual General Meeting until the
date of the next Annual General Meeting shall not exceed two per cent. (2%) of the total number of issued shares (excluding
treasury shares) in the capital of the Company from time to time.
219
CAPITALAND LIMITED (Regn. No.: 198900036N) (Incorporated in the Republic of Singapore)
Proxy Form Annual General Meeting
IMPORTANT:
1. For investors who have used their CPF monies to buy the Company’s shares, this Summary Report/Annual Report is forwarded to them at the request of their CPF Approved Nominee and is sent solely FOR THEIR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.
I/We, _________________________________________________________________________________________________________ (Name)
of _________________________________________________________________________________________________________ (Address)
being a member/members of CAPITALAND LIMITED hereby appoint:
Name Address NRIC/Passport No.
Proportion of shareholdings
No. of Shares %
and/or (delete as appropriate)
Name Address NRIC/Passport No.
Proportion of shareholdings
No. of Shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary, to demand a poll, at the Annual General Meeting of the Company, to be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912 on Thursday, 23 April 2009 at 10.00 a.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Annual General Meeting as indicated hereunder. If no specifi c direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Annual General Meeting.
No. Resolutions Relating To: For* Against*
ORDINARY BUSINESS
1 Adoption of Directors’ Report, Audited Financial Statements and Auditors’ Report
2 Declaration of a First and Final Dividend and a Special Dividend
3 Approval of Directors’ Fees
4(i) Re-appointment of Dr Hu Tsu Tau as Director
4(ii) Re-appointment of Mr Lim Chin Beng as Director
4(iii) Re-appointment of Mr Richard Edward Hale as Director
5(i) Re-election of Mr James Koh Cher Siang as Director
5(ii) Re-election of Mrs Arfat Pannir Selvam as Director
5(iii) Re-election of Professor Kenneth Stuart Courtis as Director
6 Re-appointment of Auditors
7 Any Other Business
SPECIAL BUSINESS
8A Authority for Directors to issue shares and to make or grant instruments pursuant to Section 161 of the Companies Act, Cap. 50
8B Authority for Directors to grant awards, and to allot and issue shares, pursuant to the CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan
* Please indicate your vote “For” or “Against” with a “√ ” within the box provided.
Dated this _______________________ day of __________________________ 2009.
Total number of shares held
_____________________________________________________________________
Signature(s) of Member(s) / Common Seal
IMPORTANT: PLEASE READ NOTES TO PROXY FORM ON REVERSE PAGE
220
NOTES TO PROXY FORM:
1 A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company.
2 Where a member appoints more than one proxy, the appointments shall be invalid unless he specifi es the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3 Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy or proxies, to the Meeting.
4 A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defi ned in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register as well as shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, the instrument of proxy will be deemed to relate to all the shares held by the member.
5 The instrument appointing a proxy or proxies must be deposited at the offi ce of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Offi ce, Singapore 068906, not less than 48 hours before the time appointed for holding the Meeting.
6 The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised offi cer.
7 Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certifi ed copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8 A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Cap. 50 of Singapore.
General
The Company shall be entitled to reject the instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at least 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.
1st fold here
2nd fold here
3rd fold here, glue along the dotted line and fold fl ap
CAPITALAND LIMITED c/o M & C Services Private Limited
138 Robinson Road #17-00 The Corporate Offi ce
Singapore 068906
Affi x postage stamp
CapitaLand Limited
168 Robinson Road
#30-01 Capital Tower
Singapore 068912
Tel +65 6823 3200
Fax +65 6820 2202
www.capitaland.com
(Reg. No. 198900036N)
CapitaLand Residential
Singapore Pte Ltd
8 Shenton Way
#21-01
Singapore 068811
Tel +65 6820 2188
Marketing Hotline +65 6826 6800
Fax +65 6820 2208
www.capitalandresidential.com
(Reg. No. 200102075W)
CapitaLand China Holdings
Pte Ltd
268 Xizang Road (Middle)
#19-01 Raffl es City Shanghai
200001 Shanghai
People’s Republic of China
Tel +86 21 3311 4633
Fax +86 21 6340 3733
www.capitaland.com.cn
(Reg. No. 199302460C)
CapitaLand Commercial
Limited
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Tel +65 6536 1188
Fax +65 6536 3788
www.capitalandcommercial.com
(Reg. No. 197801869H)
CapitaLand Retail Limited
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Tel +65 6536 1188
Fax +65 6536 3788
www.capitalandretail.com
(Reg. No. 200413169H)
The Ascott Group Limited
8 Shenton Way
#13-01
Singapore 068811
Tel +65 6220 8222
Fax +65 6227 2220
www.theascottgroup.com
(Reg. No. 197900881N)
CapitaLand ILEC Pte. Ltd.
8 Shenton Way
#49-01
Singapore 068811
Tel +65 6622 6000
Fax +65 6822 6038
www.capitalandilec.com
(Reg. No. 199701358Z)
CapitaLand Financial Limited
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Tel +65 6536 1188
Fax +65 6533 5182
www.capitalandfi nancial.com
ask-us@capitalandfi nancial.com
(Reg. No. 200308451M)
Australand Holdings Limited
Level 3, Building C
Rhodes Corporate Park
1 Homebush Bay Drive
Rhodes NSW 2138
Australia
Tel +61 (02) 9767 2000
Fax +61 (02) 9767 2900
www.australand.com.au
(Reg. No. ABN 12008443696)
CapitaMall Trust
Management Limited
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Tel +65 6536 1188
Fax +65 6536 3884
www.capitamall.com
(Reg. No. 200106159R)
CapitaCommercial Trust
Management Limited
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Tel +65 6536 1188
Fax +65 6533 6133
www.cct.com.sg
(Reg. No. 200309059W)
Ascott Residence Trust
Management Limited
8 Shenton Way
#13-01
Singapore 068811
Tel +65 6389 9388
Fax +65 6389 9399
www.ascottreit.com
(Reg. No. 200516209Z)
CapitaRetail China Trust
Management Limited
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Tel +65 6536 1188
Fax +65 6536 3884
www.capitaretailchina.com
(Reg. No. 200611176D)
Quill Capita Management
Sdn Bhd
Suite 11.01A, Level 11
Menara Citibank
No. 165 Jalan Ampang
50450 Kuala Lumpur
Malaysia
Tel +603 2380 6288
Fax +603 2380 6289
www.qct.com.my
(Reg. No. 737252-X)
Registrar
M & C Services Private Limited
138 Robinson Road
#17-00 The Corporate Offi ce
Singapore 068906
Tel +65 6227 6660
Fax +65 6225 1452
(Reg. No. 19701676D)
Auditors
KPMG LLP
16 Raffl es Quay
#22-00 Hong Leong Building
Singapore 048581
Tel +65 6213 3388
Fax +65 6225 6157
Engagement Partner since
fi nancial year ended
31 December 2005:
Eng Chin Chin
This Annual Report to Shareholders may contain forward looking statements that involve risks and uncertainties. Actual future performance, outcome and results may differ materially from those expressed in forward looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, availability of real estate properties, competition from other companies and venues for the sale/distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefi ts and training, governmental and public policy changes and the continued availability of fi nancing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of management of future events.
Main Contacts
CAPITALAND LIMITED 168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel: +65 6823 3200 Fax: +65 6820 2202 Company Reg. No. 198900036N www.capitaland.com
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capital land/CapitaLand Annual Report 2009.pdf
Epigram M YC K While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 11.03.2010 175# 1bmc P280cCapitaland A/R_CoverSize:426x297mm_260gsm Art Card_175#_Back_Front
CAPITALAND LIMITED ANNUAL REPORT 2009
AHEAD OF THE CURVE GROWTH DURING GLOBAL CRISIS
S$1.05 BILLION PROFIT
GROUP RAISED S$5 BILLION
THROUGH FOUR RIGHTS ISSUES
GROUP MANAGES S$47.7 BILLION
OF REAL ESTATE ASSETS
LISTED CAPITAMALLS ASIA,
LARGEST IPO IN 16 YEARS
MORE THAN 110 CITIES
IN OVER 20 COUNTRIES
OVER 100 AWARDS AND ACCOLADES
CAPITALAND LIMITED
168 Robinson Road, #30-01 Capital Tower, Singapore 068912
Tel +65 6823 3200 Fax +65 6820 2202 (Reg. No. 198900036N)
www.capitaland.com
C A
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A N
D L
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A N
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A L
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P O
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2 0
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Epigram While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 11.03.2010 175# 1bmc P280cCapitaland A/R_Size:426x297mm_260gsm Art Card_175#_Inside Front&Back
MAIN CONTACTS CapitaLand Limited
168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 www.capitaland.com [email protected] (Reg. No. 198900036N)
CapitaLand Residential
Singapore Pte Ltd
8 Shenton Way #21-01 Singapore 068811 Tel +65 6820 2188 Marketing Hotline +65 6826 6800 Fax +65 6820 2208 www.capitalandresidential.com [email protected] (Reg. No. 200102075W)
CapitaLand China
Holdings Pte Ltd
268 Xizang Road (Middle) #19-01 Raffl es City Shanghai 200001 Shanghai People’s Republic of China Tel +86 21 3311 4633 Fax +86 21 6340 3733 www.capitaland.com.cn [email protected] (Reg. No. 199302460C)
CapitaLand
Commercial Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3788 www.capitalandcommercial.com [email protected] (Reg. No. 197801869H)
CapitaMalls
Asia Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitamallsasia.com [email protected] (Reg. No. 200413169H)
The Ascott Limited
8 Shenton Way #13-01 Singapore 068811 Tel +65 6220 8222 Fax +65 6227 2220 www.the-ascott.com [email protected] (Reg. No. 197900881N)
CapitaLand
ILEC Pte. Ltd.
39 Robinson Road #16-01 Robinson Point Singapore 068911 Tel +65 6622 6000 Fax +65 6720 8608 www.capitalandilec.com [email protected] (Reg. No. 199701358Z)
CapitaLand
Financial Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6533 5182 www.capitalandfi nancial.com ask-us@capitalandfi nancial.com (Reg. No. 200308451M)
Australand
Holdings Limited
Level 3, Building C Rhodes Corporate Park 1 Homebush Bay Drive Rhodes NSW 2138 Australia Tel +61 (02) 9767 2000 Fax +61 (02) 9767 2900 www.australand.com.au [email protected] (Reg. No. ABN 12008443696)
CapitaMall Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitamall.com [email protected] (Reg. No. 200106159R)
CapitaCommercial Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6533 6133 www.cct.com.sg [email protected] (Reg. No. 200309059W)
Ascott Residence Trust
Management Limited
8 Shenton Way #13-01 Singapore 068811 Tel +65 6389 9388 Fax +65 6389 9399 www.ascottreit.com [email protected] (Reg. No. 200516209Z)
CapitaRetail China Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitaretailchina.com [email protected] (Reg. No. 200611176D)
Quill Capita
Management Sdn Bhd
Suite 11.01A, Level 11 Menara Citibank No. 165 Jalan Ampang 50450 Kuala Lumpur Malaysia Tel +603 2380 6288 Fax +603 2380 6289 www.qct.com.my [email protected] (Reg. No. 737252-X)
Registrar
M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Offi ce Singapore 068906 Tel +65 6227 6660 Fax +65 6225 1452 (Reg. No. 19701676D)
Auditors
KPMG LLP 16 Raffl es Quay #22-00 Hong Leong Building Singapore 048581 Tel +65 6213 3388 Fax +65 6225 6157 Engagement Partner since fi nancial year ended 31 December 2005: Eng Chin Chin
This Annual Report to Shareholders may contain forward looking statements that involve risks and uncertainties. Actual future performance, outcome and results may differ materially from those expressed in forward looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, availability of real estate properties, competition from other companies and venues for the sale/ distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefi ts and training, governmental and public policy changes and the continued availability of fi nancing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of management of future events.
This Annual Report is printed on recycled paper, except for the cover.
CONTENTS Financial Highlights & 5-Year Share Price Performance ................................ 1 Global Presence............................................................ 8 Letter to Shareholders ................................................ 10 Board of Directors ...................................................... 18 Council of CEOs ..........................................................24 Corporate Offi ce ......................................................... 29 Corporate Directory .................................................... 30 Corporate Governance................................................. 31 Group Businesses ...................................................... 40 Financial Calendar ........................................................ 41 Risk Assessment and Management ...........................42 Human Resource ........................................................ 43 Corporate Social Responsibility ...................................44 Stakeholder Communications..................................... 46 Year in Brief..................................................................47 CapitaLand Residential Singapore ...............................52 CapitaLand China ........................................................54 CapitaLand Commercial.............................................. 56
CapitaLand Retail ........................................................ 58 CapitaLand Serviced Residences ............................... 60 CapitaLand Integrated Developments .........................62 CapitaLand Financial Services .....................................64 Australand Property Group ......................................... 66 Awards and Accolades ............................................... 68 Performance Review ................................................... 71 Economic Value Added Statements ........................... 80 Value Added Statements ............................................. 81 Portfolio Analysis .........................................................82 Portfolio Details .......................................................... 83 5-Year Financial Summary .........................................104 Statutory Accounts ...................................................105 Other Information ..................................................... 206 Shareholding Statistics ............................................ 209 Notice of Annual General Meeting ............................ 211 Proxy Form ................................................................215
CORPORATE PROFILE CapitaLand Limited is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the multi-local company’s core businesses in real estate, hospitality and real estate fi nancial services are focused in growth cities in Asia Pacifi c and Europe.
The company’s real estate and hospitality portfolio, which includes homes, offi ces, shopping malls, serviced residences and mixed developments, spans more than 110 cities in over 20 countries. CapitaLand also leverages on its signifi cant asset base, real estate domain knowledge, fi nancial skills and extensive market network to develop real estate fi nancial products and services in Singapore and the region.
The listed subsidiaries and associates of CapitaLand include Australand, CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust and CapitaRetail China Trust.
CREDO Building for People to Build People Building People to Build for People
MISSION To build a world-class real estate company with international presence that:
• Creates sustainable shareholder value • Delivers quality products and services • Attracts and develops quality human capital
VISION A world-class entrepreneurial, prosperous and lasting real estate company led and managed by people with core values respected by the business and social community.
A leading real estate company in Asia, reputed for its innovative and quality real estate products and services.
A company with a strong global network of long-term investors and blue-chip partners.
A company which attracts, develops and retains a diversity of talents regardless of nationality, race or age.
A company which consistently creates value for shareholders.
1
FINANCIAL HIGHLIGHTS Above S$1 Billion Net Profi t for Fourth Consecutive Year
Profi t attributable to Shareholders
S$1.05 billion Return on Shareholders’ Funds
8.7% Group Managed Real Estate Assets
S$47.7 billion
Earnings Before Interest and Tax
S$1.55 billion Return on Total Assets
5.5% Revenue Under Management
S$6.3 billion
5-YEAR SHARE PRICE PERFORMANCE
Benchmark
Index
400
350
300
250
200
100
150
50
0
D e c
0 4
D e c
0 9
Ju n 0
9
D e c
0 8
Ju n 0
8
D e c
0 7
Ju n 0
7
D e c
0 6
Ju n 0
6
D e c
0 5
Ju n 0
5
• CapitaLand Share Price • MSCI AC Asia Pacifi c ex-Japan Industrials Index • Straits Times Index Source: Bloomberg
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PRIMING FOR NEW GROWTH Over the decade, CapitaLand has developed deep roots and a strong foundation. We have strengthened our balance sheet. We are ready for our next phase of growth.
Citylights, Singapore
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SHARPENING OUR GEOGRAPHIC FOCUS We continue to focus on markets with the greatest growth potential. We stayed on course with our corporate strategy of Focus, Balance, Scale.
Raffl es City Beijing, China
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DEVELOPING OUR PEOPLE During the decade, CapitaLand has developed its strong management bench strength. We prepared them through several crises, including the recent global crisis. They are empowered to deliver for the next phase of growth.
Capital Tower, Singapore
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8 9
PRESENCE IN MORE THAN 110 CITIES IN OVER 20 COUNTRIES
GLOBAL PRESENCE
AUSTRALIA
Adelaide Brisbane Hobart Melbourne Perth Sydney
CHINA
Anyang Beijing Changsha Chengdu Chongqing Dalian Deyang Dongguan Foshan Guangzhou Harbin Hangzhou Hong Kong Huhhot Kunshan Macau Maoming Mianyang Nanchang Ningbo Quanzhou
Rizhao Shanghai Shenyang Shenzhen Suzhou Tianjin Weifang Wuhan Wuhu Xi’an Xinxiang Yangzhou Yibin Yiyang Zhangzhou Zhanjiang Zhaoqing Zhengzhou Zibo
GEORGIA
Tbilisi
INDIA
Ahmedabad Bangalore Chennai Cochin Hyderabad Jalandhar
Mangalore Mumbai Mysore Nagpur Udaipur
INDONESIA
Jakarta Surabaya
JAPAN
Chitose Eniwa Fukuoka Funabashi Hiroshima Kobe Kyoto Nagoya Osaka Saga Sapporo Sendai Tokyo
KAZAKHSTAN
Aktau Almaty Astana
MALAYSIA
Johor Kuala Lumpur Kuching Penang Selangor
PHILIPPINES
Manila
RUSSIA
Moscow
SINGAPORE
SOUTH KOREA
Seoul
THAILAND
Bangkok Krabi Pattaya
VIETNAM
Hai Phong Hanoi Ho Chi Minh City
BELGIUM
Brussels
FRANCE
Aix-en-Provence Bordeaux Cannes Ferney-Voltaire Fontainebleau
Grenoble Lille Lyon Marseille Montpellier Nice Paris Strasbourg Toulouse
GERMANY
Berlin Munich
SPAIN
Barcelona
UNITED
KINGDOM
London
ASIA PACIFIC
EUROPE
GULF COOPERATION COUNCIL (GCC) COUNTRIES
BAHRAIN
Manama QATAR
Doha UNITED ARAB
EMIRATES
Abu Dhabi Dubai
Homes
Offi ces
Shopping Malls
Serviced Residences
Mixed Developments
Financial Services
Raffl es City Developments
Multi-sector
Schools/Facilities
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Japan
Philippines
Singapore
Australia
South Korea
Vietnam
Russia
Georgia
Bahrain
India
Kazakhstan
China
Thailand
Malaysia
Indonesia
Qatar
UAE
Germany
Spain
France
Belgium
United Kingdom
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10
DR HU TSU TAU Chairman
LIEW MUN LEONG President & CEO
11
We entered 2009 with an extremely pessimistic outlook for the world economy. Despite it being one of the worst crises the world has faced, we were able to pull through having learnt from past crises. Fortunately, the economy stabilised by mid-2009 on the back of internationally synchronised government interventions.
We prepared ourselves not to waste this crisis. We assessed that a strong balance sheet would be key to a company’s survival if the worst case scenario arose and that there would be a “fl ight to quality” by investors and other stakeholders. We also recognised that it was an opportunity to increase the depth and breadth of the management bench team and maintain our record of delivering results.
We emerged ahead of the curve, having taken proactive steps to strengthen our balance sheet and enhance our fi nancial fl exibility. In February, CapitaLand pre-emptively launched a rights issue which raised S$1.8 billion and was 1.22 times subscribed. This was followed by rights issues during the year by CapitaMall Trust, CapitaCommercial Trust and Australand. In July, we extended our debt maturity through a successful S$1.2 billion, seven-year convertible bond issue, the largest convertible bond issue for an Asian-listed issuer in 2009. In November, we raised S$2.8 billion from the listing of CapitaMalls Asia (CMA), our integrated shopping mall business. We retained a 65.5% stake in CMA post-listing. Despite the tightening of global liquidity, CapitaLand was able to lower its
net debt-to-equity ratio from 0.47 in end-2008 to 0.09 by end-2009.
With the funds raised, we are ready and well-prepared to focus on our next phase of growth. We deployed the proceeds of our S$1.8 billion rights issue to our businesses in China and Vietnam, and the serviced residence and integrated shopping mall businesses. When the unique opportunity arose in the course of the year, we successfully acquired Orient Overseas Developments Limited in 2010. The US$2.2 billion (approximately S$3.1 billion) acquisition doubled our property portfolio in China to 2.8 million square metres (sqm), or approximately 36% of total assets. This marked a key milestone in our next phase of growth in China.
During the year, despite the diffi cult operating environment, we did not retrench any staff. Younger senior offi cers were given greater leadership responsibilities during the crisis. These offi cers had been nurtured through wide work exposure, job rotation and leadership development to take on greater and broader responsibilities within the Group.
In 2009, the Group achieved a profi t after tax and minority interests (PATMI) of S$1,053.0 million, despite the severe global economic downturn. This is the fourth consecutive year that CapitaLand has recorded net profi t exceeding S$1 billion. Excluding the impact of revaluations and impairments taken in FY2009, PATMI in FY2009 was S$1,631.5 million, up 66% compared to FY2008 on the same basis.
LETTER TO SHAREHOLDERS
We emerged ahead of the curve, having taken proactive steps to strengthen our balance sheet and enhance our fi nancial fl exibility.
Dear Shareholders,
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12
LARGEST SINGAPORE IPO IN 16 YEARS
The initial public offering (IPO) of CapitaMalls Asia (CMA) created one of Asia’s largest shopping mall developers, owners and managers by total property value and geographic reach. As at end-2009, CMA has a portfolio of 86 retail properties across 48 cities in Singapore, China, Malaysia, Japan and India, with a total property value of approximately S$20.4 billion.
Despite the volatile economic landscape, the public offer and placement tranche were positively received by investors. The strong demand demonstrated a fl ow of funds ready and keen to invest in businesses that are unique, have a proven track record and provide exposure to the growing Asian consumer sector. With the listing, we were able to unlock value
for our shareholders while continuing to participate in the strong growth of the integrated shopping mall business by retaining a majority stake in CMA. CMA currently has a net cash position and low debt-to- equity ratio, providing the fi nancial capacity to fund future growth and expansion.
The S$2.8 billion IPO was Singapore’s largest in 16 years and received FinanceAsia’s “Best Singapore Deal” Achievement Award in 2009. As at end-2009, CMA’s market capitalisation was approximately S$9.9 billion, making it one of the 20 largest companies listed on the Singapore Exchange.
LETTER TO SHAREHOLDERS
Revenue in FY2009 was S$2,957.4 million, 7% higher than that achieved in FY2008. This was mainly due to higher revenue recognition for residential development projects in Singapore, China and Vietnam. Our overseas operations contributed 67% of total revenue. China and Australia continued to be the main contributors while the contribution from Vietnam has increased. Group Earnings before Interest and Tax (EBIT) for FY2009 was S$1,549.0 million against the S$2,213.5 million achieved in FY2008. The strong performance was driven by higher portfolio gains from CMA’s listing, the sale of Raffl es City Hangzhou to the Raffl es City China Fund, and the divestment of two properties in the industrial sector in Singapore.
The Directors are pleased to propose a fi rst and fi nal dividend of 5.5 cents per share for FY2009. In view of CMA’s successful listing, the Directors have decided to propose a special dividend of 5 cents per share for FY2009.
DELIVERING RESULTS ACROSS SECTORS
During the year, we sold about 5,000 residential units in our core markets, divested two properties in the industrial sector in Singapore with gains, reconstituted our Asian shopping mall portfolio for a listing, extended our dominant serviced residence presence internationally, and controlled our exposure to the uncertain Gulf region.
Residential
In Singapore, CapitaLand sold close to 600 units with total sales value of approximately S$1.2 billion. We had
three very successful launches during the year – The Wharf Residence, The Interlace and Urban Suites. The Wharf Residence is about 93% sold to date. The Interlace, designed by renowned architectural fi rm Offi ce for Metropolitan Architecture, saw strong response for the 360 units released under the fi rst phase, with about 80% sold to date. We launched Urban Suites in December and about 90% of the project have been sold. To date, we have also sold 86% of the 175 apartments in The Orchard Residences – the residential component above ION Orchard. We obtained Temporary Occupation Permit for three developments with a total of 1,000 units, namely RiverGate, Scotts HighPark and The Metropolitan Condominium. Going forward, we would have a healthy pipeline of over 2,600 residential units.
In China, our key markets saw an increase in transaction volumes in response to an improvement in buyer confi dence. Close to 2,400 units were sold in Beijing, Shanghai, Hangzhou, Ningbo, Foshan and Chengdu, triple the 782 units sold in 2008. The Group launched four residential projects – three in Foshan and one in Chengdu – and released new units from existing projects in Shanghai, Ningbo and Chengdu for sale. In June, we signed strategic co-operation agreements with two established Chinese banks namely Bank of China and Industrial and Commercial Bank of China for a credit limit allocation of up to RMB25 billion (S$5 billion), which will help support the Group’s growth plans across China. With a pipeline of approximately 20,000 residential units in China to develop, we plan to launch an average
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13
of 3,000 units annually. We deployed an additional S$500 million to CapitaLand China Holdings to grow our residential business in China.
In Australia, the government’s fi rst-home owner grant stimulated housing demand, while buying interest recovered on the back of improved consumer sentiment and a positive economic outlook. For Australand, CapitaLand’s listed subsidiary in Australia, 1,557 residential contracts with sales revenue of A$588 million (S$739 million) were booked in 2009. Australand has a residential development pipeline comprising 23,200 lots under management across land communities, housing and apartment developments.
In Vietnam, the Group’s new growth market, the residential market is supported by a healthy demand for quality housing. We launched preview sales of the approximately 1,500-unit Mulberry Lane, our fi rst residential project in Hanoi, and 451 units, or 82% of the units released, have been sold. Sales of The Vista in Ho Chi Minh City, our maiden residential project in Vietnam, are progressing well and construction is on schedule. We now have a development portfolio of over 4,000 residential units in Ho Chi Minh City and Hanoi. We have deployed S$299 million to the Vietnam business to capitalise on further growth opportunities there.
In 2009, the Group achieved a profi t after tax and minority interests of S$1.05 billion, the fourth consecutive year of net profi t exceeding S$1 billion.
The Interlace, a 1,040-unit condominium, redefi ned the typography of residential developments in Singapore.
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14
Mr Hsieh Fu Hua, then-CEO of the Singapore Exchange, with Dr Hu Tsu Tau, Chairman of CapitaLand Group, and Mr Liew Mun Leong, President & CEO of CapitaLand Group, at the listing of CapitaMalls Asia.
Commercial
In Singapore, the Group is one of the largest owners/ managers of offi ce properties in the Downtown Core area. We had successfully made timely divestments at the peak of the cycle two years ago, yielding attractive gains. We have since refrained from bidding aggressively for commercial sites. In 2009, despite challenging market conditions, CapitaLand’s portfolio of Grade A offi ces in Singapore, held through CapitaCommercial Trust, delivered a resilient performance. Net property income increased 29% and committed occupancy rates surpassed the industry average.
As part of our active portfolio management strategy, we divested two properties in the industrial sector in Singapore and an offi ce investment in Malaysia. The sales proceeds from these divestments will be recycled to reconstitute our commercial property portfolio.
Retail
Listed in November 2009, CMA is one of Asia’s largest shopping mall developers, owners and managers with 86 retail properties across 48 cities in Singapore, China, Malaysia, Japan and India as at end-2009.
The successful opening of ION Orchard, with its spectacular frontage and cutting-edge designs and concepts, is an outstanding achievement which has
fi rmly entrenched CMA’s leadership position in the Asian retail scene. Strategically located in the heart of Singapore’s premier Orchard Road, ION Orchard, a 640,000-square-foot mall, is more than 97% occupied and 70% of its tenants are new-to-market brands. Since opening in July, ION Orchard has become the hottest, “must-visit” retail destination in Singapore, and over 4.5 million people visit the mall every month.
In China, CMA is one of the largest shopping mall players, with a gross fl oor area (GFA) of approximately 43.4 million sq ft across 33 cities as at end-2009. We opened nine malls in 2009, bringing the total number of operational malls in China to 33, with another 17 malls slated to open over the next few years as at end-2009. Our extensive geographical footprint positions us to ride on the sustained growth in the respective cities where there is an increasing urban population and growing middle income segment.
In India, CMA’s joint ventures with Advance India Projects Limited and the Prestige Group progressed well. Forum Value Mall, our fi rst mall there, opened in Bangalore in June, and has about 94% committed leases. Another eight malls are being developed and will tap on the strong growth for organised retail.
LETTER TO SHAREHOLDERS
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15
CELEBRATING 15 YEARS IN CHINA
In 2009, CapitaLand celebrated the 15th anniversary of the Group’s entry into China. CapitaLand fi rst invested in China in 1994, the same year that China started its housing reforms, and has since grown into one of its top foreign developers. CapitaLand focused on Shanghai when it fi rst entered China. As at end- 2009, our portfolio is worth over S$20 billion (on a when-completed basis), comprising over 100 projects in 40 cities across the country, in both key gateway cities such as Beijing, Shanghai and Guangzhou, as well as other key Chinese cities including Chengdu, Hangzhou, Ningbo and Shenzhen.
Since 1994, CapitaLand has built more than 11,000 residential units in the coastal cities of China like Shanghai, Beijing and Guangzhou. It currently has another 20,000 more units in the pipeline in cities such as Hangzhou, Ningbo, Foshan and Chengdu. CapitaLand’s residential strategy is to build mass to high-end residential units tailored for the lifestyles of the local residents.
From seven shopping malls in seven Chinese cities in 2005, CapitaLand’s integrated shopping mall business, CapitaMalls Asia (CMA), is now one of China’s largest shopping mall players. As at end-2009, CMA has 50 malls in operation or under development
across 33 cities with a total GFA of approximately 43.4 million sq ft.
CapitaLand is a developer of quality commercial and integrated developments in China. CapitaLand introduced its highly successful Raffl es City concept to China in 2003 with the opening of Raffl es City Shanghai. CapitaLand has since introduced the Raffl es City brand to Beijing, Chengdu, Hangzhou and Ningbo, and more are being planned.
CapitaLand fi rst entered the serviced residence market in China over 10 years ago. Since then, it has established its leadership position as the largest international serviced residence owner-operator in China with about 5,000 units in 26 properties across 12 cities, including Beijing, Guangzhou, Shanghai and Tianjin.
CapitaLand has originated and managed a portfolio of China-focused funds covering the residential, retail, business park and serviced residence sectors. The Group has also listed CapitaRetail China Trust, Singapore’s fi rst China shopping mall REIT.
As a long-term investor in China, CapitaLand plans to continue growing its business in the country.
Serviced Residences
During the year, The Ascott Limited, our wholly-owned serviced residence business unit, continued to strengthen its global leadership. It opened 10 properties in China, Japan, Singapore, France, Georgia and Germany, and secured seven management contracts in China, Malaysia, Vietnam and France.
CapitaLand has deployed additional funds to expand Ascott’s business. In addition to more management contracts and investment opportunities as part of its next phase of growth, Ascott will also upgrade its hospitality capabilities and properties. It expects to open about 6,000 apartment units in 29 new properties worldwide by 2013.
Integrated Developments
In China, we launched Raffl es City Ningbo, our fi fth Raffl es City development in the country after Shanghai, Beijing, Chengdu and Hangzhou. Raffl es City Beijing,
which comprises a shopping mall, Grade A offi ce tower and Ascott Raffl es City Beijing, opened in 2009. Construction is in progress for Raffl es City Chengdu and Raffl es City Ningbo. We target to grow the number of Raffl es City developments in China to 10 in the next fi ve years.
In Abu Dhabi, construction for the 868-unit Rihan Heights is on schedule with about 21% work completed as at end-2009. The residential project is on track for completion by 1H2011. Rihan Heights is phase one of the 1.4 million-sqm Arzanah integrated development, which offers an active urban lifestyle for its residents and the community at large. In Bahrain, we took a cautious position early in the year. We will maintain fl exibility in moving forward our integrated development project in Bahrain, reviewing the various options in accordance with market conditions.
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16
Financial Services/ Real Estate Investment Trusts
CapitaLand is one of Asia’s largest real estate investment trust (REIT) and real estate fund managers, managing fi ve REITs and 15 private equity funds with assets under management of more than S$25 billion. In 2009, our sponsored REITs achieved solid distribution growth, contributing distributions of S$167.8 million to the Group in 2009, an increase of 28%.
Two private equity funds – CapitaLand China Residential Fund and Mezzo Capital – successfully matured in 2009 with returns that outperformed their respective targets. The sale of Raffl es City Hangzhou to the US$1 billion (about S$1.4 billion) Raffl es City China Fund was completed in October 2009, bringing the total number of assets in the fund to four. We will continue to explore value-adding transactions for our REITs and private equity real estate funds, with a continued focus in the Asia-Pacifi c region.
CORPORATE SOCIAL RESPONSIBILITY
CapitaLand is committed to be a good corporate citizen. We strive to be an environmentally-sustainable real estate developer and aim to be at the forefront of the industry in terms of green buildings and environmental awareness.
In 2009, CapitaLand was recognised as a corporate sustainability leader. We are a component of the Dow Jones Sustainability Asia Pacifi c Index, and the only Singapore company in the Sustainability Yearbook 2009. CapitaCommercial Trust, our commercial REIT, was included in the FTSE4Good Index Series in recognition of its proactive efforts towards corporate and environmental responsibility and sustainability.
The Group has actively contributed to the communities which we operate in. Through our Green for Hope creative recycling campaign in Singapore, CapitaLand Hope Foundation, our philanthropic arm, donated over S$1 million to the welfare funds of 154 Singapore primary schools. In China, CapitaLand pledged to build
six CapitaLand Hope Schools in Guangdong Province, Zhejiang Province and Inner Mongolia, bringing the total in the country to 15 schools. To date, seven schools have opened in the Guangdong, Sichuan and Yunnan provinces.
CapitaLand is also honoured to pledge a conservation donation to support the panda cubs Singapore will receive from China. The 10-year collaborative programme will raise cultural exchange and understanding between Singapore and China and further strengthen the strong relationship between the two countries.
LOOKING AHEAD
CapitaLand is known to the market as being “ahead of the curve”. We have an even stronger balance sheet and have increased the depth and breadth of our leadership position in all sectors. Our strategy will ensure that we are a leading foreign real estate developer in China and that we continue to be one of Asia’s largest developers, owners and managers of shopping malls through CMA. Ascott will strengthen its position as the world’s largest international serviced residence owner-operator, and our fi nancial services business will remain a leading Asia-based REIT and real estate fund manager.
“Building People” is the cornerstone of our success. We stepped up our training when business slowed down and prepared our staff for the next phase of growth. At the start of the year, in light of the deteriorating global fi nancial and economic conditions, staff had taken a salary reduction so that there was no retrenchment. In December, CapitaLand was one of the fi rst few companies to fully restore executive and management salaries.
CapitaLand Group won over 100 awards and accolades in 2009. We were recognised for our good corporate governance, disclosure and transparency, investor relations and corporate sustainability. We are honoured to be voted ‘Best Overall Managed Property Company in Asia’ in Euromoney’s Asia Poll 2010. As good corporate governance principles are fundamental to building a prosperous and lasting company, we set up
Over the last 10 years, CapitaLand has grown from a Singapore-centric company into an international real estate company with group managed real estate assets of S$47.7 billion.
LETTER TO SHAREHOLDERS
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Construction is in progress for Raffl es City Chengdu, one of CapitaLand’s fi ve Raffl es City developments in China.
the Operations Compliance Unit. The unit formulates standards and ensures the right business ethics and conduct throughout the Group.
While the economy has recovered in recent months, uncertainty remains in the economic outlook. On the other hand, opportunities will arise in our key markets in the course of the year. We intend to grow our China business to 45% of our total business in the next three to fi ve years. Similarly for Vietnam, we plan to grow from the current 1% to 10% of our total business. We have formed the CapitaLand China Executive Committee and CapitaLand Vietnam Executive Committee to better coordinate and align our investments, operations, branding and resources in these two countries.
CapitaLand celebrates its tenth anniversary in November 2010. Over the last 10 years, CapitaLand has grown from a Singapore-centric company into an international real estate company. From a market capitalisation of S$8.9 billion in November 2000, the CapitaLand Group now comprises eight listed companies with a total market capitalisation of S$40.3 billion as at end-2009. The Group manages S$47.7 billion of real estate assets, fi rmly establishing our position as one of Asia’s largest real estate companies. We will continue to focus on growing assets under management while maintaining a conservative and proactive approach to capital management.
Since inception, we have distributed S$2.6 billion to our loyal shareholders. Going forward, we will continue to create sustainable shareholder value and deliver quality products and services, so as to build a world-class and lasting real estate company.
We welcome Dr Fu Yuning and Mr John Powell Morschel to our Board and look forward to their counsel and contribution in the years ahead. We want to acknowledge the invaluable contributions from outgoing directors Mr Lim Chin Beng and Dr Victor Fung Kwok King who will not be seeking re-appointment and re-election respectively at the forthcoming annual general meeting. On behalf of management and the Board of Directors, we wish to thank all staff, shareholders, business partners and associates for their continued commitment and support of the CapitaLand Group.
DR HU TSU TAU LIEW MUN LEONG
Chairman President & CEO
26 February 2010
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RichaRd EdwaRd halE Director
Jackson PEtER tai Director
PRofEssoR kEnnEth stuaRt couRtis Director
dR fu Yuning Director
John PowEll MoRschEl Director
dR VictoR fung kwok king Director
JaMEs koh chER siang Director
liM chin BEng Director
aRfat PanniR sElVaM Director
PEtER sEah liM huat Deputy Chairman
dR hu tsu tau Chairman
liEw Mun lEong President & CEO
Standing from left to right
Seated from left to right Not in picture
BoaRd of diREctoRs
20
DR HU TSU TAU, Chairman
Dr Hu Tsu Tau, an Independent Non-Executive Director, joined the CapitaLand Board on 13 April 2004 and was elected Chairman on the same day. He was last re-appointed as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is also Chairman of CapitaLand’s Investment Committee.
Dr Hu is presently a Member of the Board of the Government of Singapore Investment Corporation Pte Ltd (GIC) and Chairman of Fullerton Financial Holdings Pte Ltd. He was Chairman of GIC Real Estate Pte Ltd.
From 1985 to 2001, he was a Cabinet Minister whose portfolio included the Trade and Industry, Health and Finance ministries. Prior to his ministerial appointment, Dr Hu was Managing Director of the Monetary Authority of Singapore (MAS) and GIC from 1983 to 1984. Before his appointments in MAS and GIC, he was with the Shell Group of companies from 1960, and his last position in this global company was as Chairman and Chief Executive of the Shell Group of companies in Singapore.
Dr Hu is a graduate of the University of California, USA with a Bachelor of Science in Chemistry. He also holds a Postgraduate Diploma (Chemical Engineering) and a Doctorate in Chemical Engineering, both from the University of Birmingham, UK.
PETER SEAH LIM HUAT, Deputy Chairman
Mr Peter Seah, an Independent Non-Executive Director, joined the CapitaLand Board on 18 December 2001 and was appointed as Deputy Chairman on 1 January 2009. Mr Seah was last re-elected as Director at CapitaLand’s Annual General Meeting on 27 April 2007. He is also Chairman of CapitaLand’s Finance and Budget Committee and a Member of CapitaLand’s Executive Resource and Compensation Committee and Nominating Committee.
Mr Seah is presently the Chairman of SembCorp Industries Ltd, Singapore Technologies Engineering Ltd (both listed on the SGX-ST) and LaSalle Foundation Limited. He is also Deputy Chairman of Singapore Technologies Telemedia Pte Ltd and Global Crossing Limited. Mr Seah is a Director of STATS ChipPAC Ltd, StarHub Ltd, DBS Group Holdings Ltd (all listed on the SGX-ST), as well as DBS Bank Ltd.
Mr Seah also sits on the Board of the Government of Singapore Investment Corporation Pte Ltd and is a Member of S Rajaratnam School of International Studies.
Mr Seah was President & CEO of Singapore Technologies Pte Ltd. Prior to the above appointment, Mr Seah was with Overseas Union Bank (OUB) from 1977 and became
its President & CEO in 1991. Mr Seah retired as Vice Chairman and CEO from OUB on 30 September 2001. Mr Seah was also the Chairman of Singapore Computer Systems Limited (listed on the SGX-ST), President Commissioner of PT Indosat Tbk (listed on the Stock Exchange of Indonesia), and Director of Chartered Semiconductor Manufacturing Ltd (listed on the SGX-ST) and Siam Commercial Bank Public Company Limited (listed on the Stock Exchange of Thailand).
Mr Seah is a graduate of the University of Singapore with an Honours Degree in Business Administration.
LIEW MUN LEONG, President & CEO
Mr Liew Mun Leong is President and CEO of CapitaLand Group. He joined the Board of Pidemco Land as Director on 1 January 1997. Pidemco Land merged with DBS Land to form CapitaLand in November 2000. Mr Liew continued to serve on the CapitaLand Board and was last re-elected as Director at CapitaLand’s Annual General Meeting on 27 April 2007. He also serves as Member of CapitaLand’s Investment Committee, Nominating Committee, Corporate Disclosure Committee and Finance and Budget Committee.
Mr Liew is Chairman of CapitaMalls Asia Limited (listed on the SGX-ST), CapitaLand Residential Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand Commercial Limited, CapitaLand Financial Limited and CapitaLand ILEC Pte. Ltd. He is Deputy Chairman of The Ascott Limited as well as the Deputy Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST), CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX-ST), CapitaRetail China Trust Management Limited (the manager of CapitaRetail China Trust listed on the SGX-ST) and Ascott Residence Trust Management Limited (the manager of Ascott Residence Trust listed on the SGX-ST). Mr Liew is also Chairman of CapitaLand China Executive Committee and CapitaLand Vietnam Executive Committee. The committees co-ordinate and align CapitaLand’s investments, operations, branding and resources in China and Vietnam respectively. He is also a Director of CapitaLand Hope Foundation, the Group’s philanthropic arm.
Mr Liew is presently Chairman of Changi Airport Group (Singapore) Pte Ltd and a Director of Singapore Exchange Limited (listed on the SGX-ST).
In 2006, Mr Liew was named Outstanding CEO of the Year in the Singapore Business Awards. In 2007, he was conferred the CEO of the Year award (for fi rms with market
BOARD OF DIRECTORS
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value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2008, Mr Liew was named Asia’s Best Executive of 2008 (Singapore) by Asiamoney and Best CEO in Asia (Property) by Institutional Investor.
Mr Liew graduated from the University of Singapore with a Civil Engineering degree and is a registered professional civil engineer.
LIM CHIN BENG, Director
Mr Lim Chin Beng, an Independent Non-Executive Director, joined the Board of Pidemco Land as Director on 23 February 1998. Pidemco Land merged with DBS Land to form CapitaLand in November 2000. Mr Lim continued to serve on the CapitaLand Board and was last re-appointed as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is also Chairman of CapitaLand’s Executive Resource and Compensation Committee and Nominating Committee.
Mr Lim is presently Chairman of The Ascott Limited and CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm. He is also Chairman of Changi Airport International Pte Ltd and a Director of StarHub Ltd (listed on the SGX-ST).
Mr Lim has 30 years of experience in the aviation industry beginning with the Malaysian Airlines in the 1960s. In the 1970s, he helped start up Singapore Airlines and was its Managing Director from 1972 to 1982. Mr Lim retired as Deputy Chairman of Singapore Airlines in 1996. He was Chairman of the Singapore Tourist Promotion Board from 1985 to 1989. Between 1991 and 1997, Mr Lim was Singapore’s Ambassador to Japan. In 2003, Mr Lim started Valuair, Singapore’s fi rst low cost airline, which subsequently merged with Jetstar Asia in 2005. Mr Lim retired as a Member of the Public Service Commission in December 2008, after serving for 11 years in the Commission. Mr Lim was formerly Chairman of Singapore Airshow & Events Pte Ltd and Singapore Changi Airport Enterprise Pte Ltd, and a Director of Pontiac Land Pte Ltd.
In recognition of his signifi cant contribution to the airline and tourism industries, Mr Lim was awarded the Businessman of the Year Award in 1986 and the Outstanding Contribution to Tourism Award in 1990. In 1998, Mr Lim was inducted as a Legend into the Aviation Week & Space Technology Laureates Hall of Fame.
In 2004, Mr Lim was conferred the Grand Gordon of the Order of the Rising Sun (Kyokujitu Daijusho) by the Emperor of Japan and in 2007, he was awarded the Public Service Star by the Government of Singapore.
Mr Lim is a graduate of the University of Malaya with a Bachelor of Arts (Honours) in Economics. He also attended an Advanced Management Program at the Harvard Business School, USA in 1973.
JACKSON PETER TAI, Director
Mr Jackson Tai, an Independent Non-Executive Director, joined the CapitaLand Board on 20 November 2000 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 29 April 2008. He is a Member of CapitaLand’s Investment Committee and Finance and Budget Committee.
Mr Tai is a Supervisory Board Member of ING Groep NV in the Netherlands and Director of MasterCard Incorporated and Brookstone, Inc. in the USA. Mr Tai is a Director of Cassis Worldwide Private Limited. He is also a Member of the Bloomberg L.P. Asia-Pacifi c Advisory Board.
Mr Tai was formerly the Vice Chairman and CEO of DBS Group Holdings Ltd (listed on the SGX-ST) and DBS Bank Ltd. Prior to joining DBS Bank Ltd, Mr Tai was a senior regional manager for J.P. Morgan & Co. Incorporated in New York, Tokyo, and San Francisco, and a Managing Director of the Investment Banking Division.
Mr Tai is a graduate of Rensselaer Polytechnic Institute, USA, with a Bachelor of Science in Management. He also holds a Master of Business Administration from Harvard University, USA.
RICHARD EDWARD HALE, Director
Mr Richard Hale, an Independent Non-Executive Director, joined the CapitaLand Board on 10 February 2003 and was last re-appointed as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is also Chairman of CapitaLand’s Audit Committee and a Member of CapitaLand’s Risk Committee.
Mr Hale is presently Chairman of CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX-ST). He is also Deputy Chairman of Sembcorp Marine Ltd and a Director of Sembcorp Industries Ltd (both listed on the SGX-ST). He is a Fellow of the Singapore Institute of Directors.
Mr Hale started his career with The Hongkong and Shanghai Banking Corporation Ltd in October 1958 and served in London, Paris, Hong Kong, Germany, Malaysia, Japan and Singapore before retiring from the Bank as CEO Singapore and Director in March 1995. From July 1995 to September 1997, he acted as advisor on environmental matters for HSBC Holdings plc London, based in Singapore. Mr Hale was Executive Chairman of SNP Corporation Ltd
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While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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from April 1999 to April 2000, and also served as Chairman of the Singapore International Chamber of Commerce for 1993 and 1994. He was formerly a Governor of United World College of South East Asia, Singapore and a Director of The Ascott Group Limited (formerly listed on the SGX-ST and now known as The Ascott Limited), Wheelock Properties (Singapore) Limited (listed on the SGX-ST) and BW Trust Management Pte Ltd.
Mr Hale was educated at Radley College, Abingdon, UK. He is a Fellow of the Chartered Institute of Bankers, London.
DR VICTOR FUNG KWOK KING, Director
Dr Victor Fung, an Independent Non-Executive Director, joined the CapitaLand Board on 5 May 2005 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 29 April 2008.
Dr Fung is presently the Group Chairman of the Li & Fung Group of companies. He is Chairman of the International Chamber of Commerce and the Greater Pearl River Delta Business Council and the Hong Kong – Japan Business Co-operation Committee. Dr Fung is a member of the Chinese People’s Political Consultative Conference and became a vice chairman of China Centre for International Economic Exchanges since March 2009. He is also a member of the Commission on Strategic Development of the Hong Kong Government. Dr Fung is an Independent Non-Executive Director of Bank of China (Hong Kong) Limited in Hong Kong and Baosteel Group Corporation in the People’s Republic of China. In 2003, the Hong Kong Government awarded Dr Fung the Gold Bauhinia Star for distinguished service to the community.
Dr Fung holds Bachelor and Master Degrees in Electrical Engineering from the Massachusetts Institute of Technology, and a Doctorate in Business Economics from Harvard University, USA.
JAMES KOH CHER SIANG, Director
Mr James Koh, an Independent Non-Executive Director, joined the CapitaLand Board on 1 July 2005 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is Chairman of CapitaLand’s Risk Committee and Corporate Disclosure Committee; and a Member of CapitaLand’s Audit Committee.
Mr Koh is Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST) and Chairman of its Audit Committee and Corporate Disclosure Committee. He is also a Director of CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm.
Mr Koh is presently Chairman of Housing & Development Board, Singapore Deposit Insurance Corporation Limited, Governing Board for the Mechanobiology Research Centre of Excellence and Singapore Island Country Club. He sits on the Boards of Singapore Airlines Limited, UOL Group Limited and Pan Pacifi c Hotels Group Limited (all listed on the SGX-ST). He is also a Director of Singapore Cooperation Enterprise.
From 1997 to 2005, Mr Koh served as CEO of the Inland Revenue Authority of Singapore. In that capacity, he was both Commissioner of Inland Revenue and Commissioner of Charities. Prior to these appointments, Mr Koh was the Permanent Secretary in the Ministries of National Development, Community Development and Education. Mr Koh has substantial experience in public administration having served in the Ministries of Finance, National Development, Community Development, Education and the Prime Minister’s Offi ce. He was awarded the Public Administration Medal (Gold) in 1983 and the Meritorious Service Medal in 2002.
Mr Koh is a graduate of Oxford University, UK with a Bachelor of Arts (Honours) and a Master of Arts in Philosophy, Political Science and Economics. He also holds a Master in Public Administration from Harvard University, USA.
ARFAT PANNIR SELVAM, Director
Mrs Arfat Selvam, an Independent Non-Executive Director, joined the CapitaLand Board on 2 January 2006 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 23 April 2009. She is a Member of CapitaLand’s Audit Committee, Corporate Disclosure Committee, Nominating Committee and Risk Committee.
Mrs Selvam is presently the Managing Director of Arfat Selvam Alliance LLC, a corporate fi nance law practice. With over 40 years in legal practice as a corporate fi nance lawyer, Mrs Selvam has been involved in some landmark Singapore acquisition transactions.
Mrs Selvam is also a Director of CapitaMalls Asia Limited, which is listed on SGX-ST. She was the President of the Law Society of Singapore in 2003.
Mrs Selvam is a graduate of the University of Singapore and was admitted to practise as an Advocate & Solicitor of the Supreme Court of Singapore in 1969.
PROFESSOR KENNETH STUART COURTIS, Director
Professor Kenneth Courtis, an Independent Non-Executive Director, joined the CapitaLand Board on 14 February 2007 and was re-elected as Director at CapitaLand’s Annual
BOARD OF DIRECTORS
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General Meeting on 23 April 2009. He is a Member of CapitaLand’s Finance and Budget Committee and Investment Committee.
Professor Courtis is Founding Chairman of Next Capital Partners. He was formerly Managing Director and Vice Chairman of Goldman Sachs Asia, Managing Director, Chief Economist and Strategist of Deutsche Bank Group Asia, and a Director of CNOOC Ltd, Hong Kong. He is presently a Director of Noble Group Limited (listed on the SGX-ST).
Professor Courtis is one of the world’s leading investment bankers and analysts of Asian economies. He has led a number of large, international corporate transactions centred on Asia, and pioneered a number of investment banking areas across the region. Widely sought after for his knowledge of how global market forces, fi nancial and political developments, and corporate strategy interact, Professor Courtis advises major clients throughout the Asia Pacifi c region, as well as in Europe and North America.
Professor Courtis also works closely with central banks, ministries of fi nance, and heads of government throughout Asia, and has been called on several occasions to advise the President of the USA, and the heads of government of several countries in Europe, North America, Asia, and the Middle East.
Professor Courtis has lectured at Keio and Tokyo Universities, Japan’s two most prestigious educational institutions; l’Institut d’Etudes Politiques, Paris; and in universities in North America. He is a member of the boards, advisory councils, and trustee of a number of international fi rms, universities, and research institutes in Asia, Europe and North America.
Professor Courtis received his Bachelor degree from Glendon College in Toronto and a Master in International Relations from Sussex University in the UK. He received a Master of Business Administration from INSEAD (the European Institute of Business Administration), and a Doctorate with honours and high distinction, from l’Institut d’Etudes Politiques, Paris.
DR FU YUNING, Director
Dr Fu Yuning, an Independent Non-Executive Director, joined the CapitaLand Board on 27 July 2009. Dr Fu is also a Director of CapitaMalls Asia Limited (listed on the SGX-ST).
Dr Fu is presently a Director and President of China Merchants Group Limited, a position he has held since April 2000. He is concurrently Chairman of China Merchants Holdings (International) Company Limited (listed on the Hong Kong Stock Exchange),
China International Marine Containers (Group) Limited (listed on the Shenzhen Stock Exchange) and China Merchants Energy Shipping Company Limited (listed on the Shanghai Stock Exchange). Dr Fu is also an Independent Non-Executive Director of Integrated Distribution Services Group Limited and Sino Land Company Limited (both listed on the Hong Kong Stock Exchange) and a Director of China Merchants Bank Co., Ltd. (listed on the Shanghai Stock Exchange).
Dr Fu holds directorships in some public associations such as General Committee Member of the Hong Kong General Chamber of Commerce, Director of Hong Kong Port Development Council, Member of the Advisory Committee of the Securities and Futures Commission (SFC), HKSAR and Member of Textron’s International Advisory Council in USA. He is also Chairman of China Chapter of the Global Logistics Institute.
Dr Fu was President and Managing Director of China Nanshan Development (Group) Incorporation. From February 1999 to July 2000, he was Chairman of Union Bank of Hong Kong Limited. From 2001 to 2003, he was an Independent Director of Jurong Port Pte. Limited in Singapore.
Dr Fu graduated from Dalian Institute of Technology in China with a degree in Port and Waterway Engineering and obtained his Ph.D. Degree in Mechanical Engineering from Brunel University in the UK, where he also worked as a Post-Doctorate research fellow briefl y afterwards.
JOHN POWELL MORSCHEL, Director
Mr John Morschel, an Independent Non-Executive Director, joined the CapitaLand Board on 1 February 2010.
Mr Morschel is presently Chairman of Australia and New Zealand Banking Group Limited (listed on the Australian Securities Exchange and New Zealand Stock Exchange) and a Director of Singapore Telecommunications Limited (listed on the SGX-ST) and Tenix Group Pty. Ltd. Prior to his present appointment, he was an Executive Director and then Managing Director and CEO of Lend Lease Group LLC (listed on the Australian Securities Exchange). Mr Morschel was Chairman of Comalco Ltd, CSR Limited, Leighton Holdings Limited and Rinker Group Limited. He was also a Director of Westpac Banking Corporation, Cable & Wireless Optus Ltd, Gifford Communications Ltd, Rio Tinto plc and Rio Tinto Limited.
Mr Morschel holds a Diploma in Quantity Surveying from The University of New South Wales. He is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Institute of Management.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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chong kEE hiong CEO, Ascott Residence Trust Management Limited
liM BEng chEE CEO, CapitaMalls Asia Limited
liM Ming Yan CEO, The Ascott Limited
lui chong chEE CEO, CapitaLand Financial Limited
wong hEang finE CEO, CapitaLand ILEC Pte. Ltd.
Jason lEow CEO, CapitaLand China Holdings Pte Ltd
chEn lian Pang CEO (Southeast Asia), CapitaLand Commercial Limited
lYnEttE lEong CEO, CapitaCommercial Trust Management Limited
BoB Johnston Managing Director & CEO, Australand Property Group
wEE hui kan CEO, CapitaRetail China Trust Management Limited
with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2008, Mr Liew was named Asia’s Best Executive of 2008 (Singapore) by Asiamoney and Best CEO in Asia (Property) by Institutional Investor.
Mr Liew graduated from the University of Singapore with a Civil Engineering degree and is a registered professional civil engineer.
wEn khai MEng chief investment officer Mr Wen Khai Meng is the Chief Investment Officer of CapitaLand Limited. He is also a Non-Executive Director of CapitaCommercial Trust Management Limited,
Ascott Residence Trust Management Limited and Quill Capita Management Sdn Bhd.
Prior to this, Mr Wen has held several senior appointments within the Group including CEO of CapitaLand Commercial Limited, CEO of CapitaLand Financial Limited and Deputy Chief Financial Officer of CapitaLand Limited. Before joining the Group, Mr Wen was with the Ministry of National Development.
Mr Wen holds a Master of Business Administration and a Master of Science in Construction Engineering from the National University of Singapore, as well as a Bachelor of Engineering (First Class Honours) from the University of Auckland, New Zealand.
Not in picture
council of cEos
oliViER liM Group Chief Financial Officer, CapitaLand Limited
JEnniE chua Chief Corporate Officer, CapitaLand Limited
liEw Mun lEong President & CEO, CapitaLand Group
PatRicia chia CEO, CapitaLand Residential Singapore Pte Ltd
wEn khai MEng Chief Investment Officer, CapitaLand Limited
siMon ho CEO, CapitaMall Trust Management Limited
chan saY YEong CEO, Quill Capita Management Sdn Bhd
EE chEE hong CEO, CapitaLand Commercial Limited
coRPoRatE officE
liEw Mun lEong President & cEo Mr Liew Mun Leong is President and CEO of CapitaLand Group. Mr Liew is Chairman of CapitaMalls Asia Limited, CapitaLand Residential Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand Commercial Limited, CapitaLand Financial Limited and CapitaLand ILEC Pte. Ltd. He is Deputy Chairman of The Ascott Limited as well as the Deputy Chairman of CapitaMall Trust Management Limited, CapitaCommercial Trust Management Limited, CapitaRetail China Trust Management Limited and Ascott Residence Trust Management Limited.
Mr Liew is also Chairman of CapitaLand China Executive Committee and CapitaLand Vietnam Executive Committee. The committees co-ordinate and align CapitaLand’s investments, operations, branding and resources in China and Vietnam respectively. He is also a Director of CapitaLand Hope Foundation, the Group’s philanthropic arm.
Mr Liew is presently Chairman of Changi Airport Group (Singapore) Pte Ltd and a Director of Singapore Exchange Limited.
In 2006, Mr Liew was named Outstanding CEO of the Year in the Singapore Business Awards. In 2007, he was conferred the CEO of the Year award (for firms
Seated from left to right Standing from left to right
26
COUNCIL OF CEOS
OLIVIER LIM
Group Chief Financial Offi cer
Mr Olivier Lim is the Group Chief Financial Offi cer of CapitaLand Limited. He is also a Non-Executive Director of CapitaMalls Asia Limited, CapitaMall Trust Management Limited, CapitaCommercial Trust Management Limited, Australand Holdings Limited, Raffl es Medical Group Ltd, and a member of the Board of both Sentosa Development Corporation and Accounting and Corporate Regulatory Authority.
Prior to joining CapitaLand Limited, he was Director and Head of the Real Estate Unit, Corporate Banking in Citibank Singapore. He has more than 20 years of work experience in diverse areas including corporate banking, investment banking, corporate fi nance and real estate fi nancial products.
In 2007, Mr Lim was named Chief Financial Offi cer of the Year (for fi rms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2009, he was awarded Best Investor Relations by a CFO by IR Magazine in its South East Asia Awards.
Mr Lim holds a First Class Honours degree in Civil Engineering from the Imperial College of Science, Technology and Medicine, UK.
JENNIE CHUA
Chief Corporate Offi cer
Ms Jennie Chua is the Chief Corporate Offi cer of CapitaLand Limited. She is a board member of CapitaMalls Asia Limited, CapitaLand ILEC Pte. Ltd., The Ascott Limited and Ascott Residence Trust Management Limited.
She is Chairman of Singapore International Chamber of Commerce, Alexandra Health/Khoo Teck Puat Hospital, Sentosa Cove, Singapore Film Commission and The Arts House as well as Deputy Chairman of Temasek Foundation. She also serves on Singapore’s Pro-Enterprise Panel and the Board of Trustees of Nanyang Technological University, Singapore.
Awards and accolades which she has received include three Singapore National Day Awards, Outstanding Contribution to Tourism Award 2006, Women’s World Excellence Awards 2006, Travel Personality of the Year Award 2005, NTUC Medal of Commendation 2005, 25 Stars of Asia Award 2003, Person of the Year – Asia Pacifi c (Hotel) 2002, National Productivity 2002, Pacifi c Area Travel Writers Association Hall of Fame 2000, Hotelier of the Year 1999, Woman of the Year 1999, Champion of the Arts 1999 and Independent Hotelier of the World 1997.
RESIDENTIAL
PATRICIA CHIA
CEO, CapitaLand Residential Singapore Pte Ltd
Ms Patricia Chia is the CEO of CapitaLand Residential Singapore Pte Ltd. She also sits on the Boards of a number of subsidiaries and joint venture companies. She has over 30 years of experience in project development and management, general management, and human resource and development.
Ms Chia has a Master degree in Construction Management from the National University of Singapore and graduated with First Class Honours in Civil Engineering from the University of Auckland, New Zealand. She attended the General Management Program at Harvard Business School in 2002.
BOB JOHNSTON
Managing Director & CEO, Australand Property Group
Mr Bob Johnston is the Managing Director and CEO of Australand Property Group. He joined Australand in August 2007 and has 20 years of experience in the property industry. Prior to joining Australand, Mr Johnston held senior positions within the Lend Lease Group, including Global CEO of Bovis Lend Lease, Chief Operating Offi cer of Lend Lease’s Real Estate Investment Management Business in the US and CEO of Bovis Lend Lease in the Asia Pacifi c region.
Mr Johnston holds a First Class Honours degree in Electrical Engineering from James Cook University, Australia.
JASON LEOW
CEO, CapitaLand China Holdings Limited
Mr Jason Leow is the CEO of CapitaLand China Holdings Pte Ltd. Mr Leow has been with the CapitaLand Group from 1994 and has over 15 years of experience in China. He has held several appointments within the CapitaLand Group, including Deputy CEO of CapitaLand China Holdings, based in Beijing.
Prior to joining the CapitaLand Group, he was a senior fi nancial analyst at ST Aerospace Ltd and also spent three years at DBS Finance Ltd.
Mr Leow is a Certifi ed Public Accountant and a member of the Institute of Certifi ed Public Accountants of Singapore. He obtained an Executive Master in Business Administration degree from Fudan University and also attended the Advanced Management Program at Harvard Business School in 2007.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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COMMERCIAL/ RETAIL/ FINANCIAL SERVICES
EE CHEE HONG
CEO, CapitaLand Commercial Limited
Mr Ee Chee Hong is the CEO of CapitaLand Commercial Limited. He is concurrently the Managing Director of Strategic Corporate Development of CapitaLand Limited and a board member of Australand Holdings Limited. He is also a Non-Executive Director of CapitaCommercial Trust Management Limited and an Alternate Director of Quill Capita Management Sdn Bhd.
Mr Ee has held several appointments within the Group including Managing Director of Financial Structuring Support for CapitaLand Financial Limited, CEO (China) for The Ascott Limited and CEO of Ascott Serviced Residence (China) Fund Management Limited. Before this, he held senior positions at the Singapore Embassy in Japan and Singapore’s Economic Development Board.
Mr Ee holds a Master degree in Engineering from the Graduate School of Tokyo Institute of Technology. He attended the Advanced Management Program at Harvard Business School in 2007.
CHEN LIAN PANG
CEO (Southeast Asia), CapitaLand Commercial Limited
Mr Chen Lian Pang is the CEO of Southeast Asia for CapitaLand Commercial Limited, responsible for the company’s operations in Vietnam and Thailand. He is concurrently a Director of TCC Capital Land Limited, CapitaLand’s joint venture company with TCC Land in Thailand. Mr Chen has more than 20 years of construction and real estate experience in both Singapore and overseas.
Mr Chen holds a Master of Science in Civil Engineering from the National University of Singapore and a Bachelor of Science in Civil Engineering (First Class Honours) from the University of Cardiff, UK. He is also a registered professional engineer.
LIM BENG CHEE
CEO, CapitaMalls Asia Limited
Mr Lim Beng Chee is the CEO and Executive Director of CapitaMalls Asia Limited (CMA). He has more than 10 years of real estate investment and asset management experience.
Mr Lim previously held various positions within the CapitaLand Group of companies, including CEO of CapitaMall Trust Management Limited and CapitaRetail
China Trust Management Limited and Deputy CEO of CMA. He played an instrumental role in the creation of CMA’s retail real estate funds and the creation and listing of CapitaRetail China Trust.
Mr Lim holds a Master of Business Administration (Accountancy) from the Nanyang Technological University of Singapore and a Bachelor of Arts in Physics (Honours) from the University of Oxford, UK.
LUI CHONG CHEE
CEO, CapitaLand Financial Limited
Mr Lui Chong Chee is the CEO of CapitaLand Financial Limited. He is also Chairman of Australand Holdings Limited and a Non-Executive Director of CapitaMall Trust Management Limited, CapitaCommercial Trust Management Limited, CapitaRetail China Trust Management Limited and Ascott Residence Trust Management Limited.
Mr Lui previously held various positions within the Group, including Chief Financial Offi cer of CapitaLand Limited and CEO of CapitaLand Residential Limited. Prior to joining CapitaLand, he was the Managing Director of Citigroup Investment Bank (Singapore) Limited.
Mr Lui holds a Master of Business Administration in Finance and International Economics, as well as a Bachelor of Science in Business Administration (Magna Cum Laude) from New York University, USA. He attended the Advanced Management Program at Harvard Business School in 2005.
SIMON HO
CEO, CapitaMall Trust Management Limited
Mr Simon Ho is the CEO and Executive Director of CapitaMall Trust Management Limited. He was previously the Deputy CEO of CapitaMalls Asia Limited (CMA).
Mr Ho has more than 20 years of experience in real estate investment and management and was responsible for managing the operations of 17 retail properties in Singapore as well as the operations of CMA’s regional retail portfolio in China, Malaysia, Japan and India.
Mr Ho holds a Master of Science in Real Estate and a Bachelor of Science in Estate Management (Honours) from the National University of Singapore.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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COUNCIL OF CEOS
LYNETTE LEONG
CEO, CapitaCommercial Trust Management Limited
Ms Lynette Leong is the CEO and Executive Director of CapitaCommercial Trust Management Limited (CCTML).
Ms Leong has more than 20 years of banking, fi nance, real estate investment and fund management experience and was previously based in Asia, London, New York and Chicago. Prior to joining CCTML, Ms Leong was the CEO of Ascendas’ South Korea offi ce where she spearheaded Ascendas’ foothold in South Korea’s real estate market, including the acquisition of offi ce and logistics properties.
Ms Leong holds a Master of Science in Real Estate and a Bachelor of Science in Estate Management from the National University of Singapore.
WEE HUI KAN
CEO, CapitaRetail China Trust Management Limited
Mr Wee Hui Kan is the CEO and Executive Director of CapitaRetail China Trust Management Limited (CRCTML), the manager for CapitaRetail China Trust, the fi rst China shopping mall REIT listed in Singapore.
Mr Wee has more than 15 years of real estate investment and asset management experience and was based in China the last 12 years. He previously held positions within the CapitaLand Group, including Deputy CEO of CRCTML, Managing Director of the fund manager of CapitaLand China Residential Fund and CITIC CapitaLand China Business Park Fund, and General Manager of CapitaLand China Holdings Pte Ltd.
Mr Wee holds a Master of Business Administration (Accountancy) from the Nanyang Technological University of Singapore and a Bachelor of Engineering (Honours) from the National University of Singapore.
CHAN SAY YEONG
CEO, Quill Capita Management Sdn Bhd
Mr Chan Say Yeong is the CEO and Executive Director of Quill Capita Management Sdn Bhd, the manager of Quill Capita Trust, CapitaLand’s fi rst overseas REIT which is listed on Bursa Malaysia Securities Berhad.
Prior to this, Mr Chan held the position of Managing Director of CapitaLand Financial Limited based in Malaysia.
Mr Chan holds a Bachelor of Accountancy from the National University of Singapore. He has completed the Executive Development Program by The Wharton School of the University of Pennsylvania, US.
SERVICED RESIDENCES
LIM MING YAN
CEO, The Ascott Limited
Mr Lim Ming Yan is the CEO of The Ascott Limited. He is concurrently Deputy Chairman of CapitaLand China Executive Committee. Prior to joining Ascott, Mr Lim was CEO of CapitaLand China Holdings Pte Ltd, responsible for growing CapitaLand into a leading foreign real estate developer in China.
Mr Lim was conferred the prestigious Magnolia Award by the Shanghai Municipal Government in 2003 and 2005 for his signifi cant contributions to Shanghai. He was named Outstanding Chief Executive (Overseas) at the Singapore Business Awards in 2006.
Mr Lim graduated from the University of Birmingham, UK, with a Bachelor of Science (First Class Honours) in Mechanical Engineering and Economics.
CHONG KEE HIONG
CEO, Ascott Residence Trust Management Limited
Mr Chong Kee Hiong is the CEO of Ascott Residence Trust Management Limited. Mr Chong was a key driver in the successful listing of Ascott REIT in March 2006. He was the Deputy CEO, Finance & Investment for The Ascott Limited from 2004 to March 2010. Before joining Ascott, Mr Chong was the Chief Financial Offi cer of Raffl es Holdings Ltd.
He is a member of Institute of Certifi ed Public Accountants of Singapore and a member of the Audit Committee of Sentosa Development Corporation. He is also the Treasurer and General Committee member of The Orchid Country Club.
Mr Chong holds a Bachelor of Accountancy degree from the National University of Singapore.
INTEGRATED DEVELOPMENTS
WONG HEANG FINE
CEO, CapitaLand ILEC Pte. Ltd.
Mr Wong Heang Fine is the CEO of CapitaLand ILEC Pte. Ltd. He is also the Country CEO in charge of developing CapitaLand’s business in the Gulf Cooperation Council region.
Prior to this, Mr Wong was President and CEO of Sembcorp Engineers and Constructors, the largest engineering and construction company in Southeast Asia. He also has varied experience in the leisure and entertainment industries.
Mr Wong holds a Master of Science in Engineering Production & Management from the University of Birmingham, UK and a Bachelor of Science in Mechanical Engineering (First Class Honours) from the University of Leeds, UK.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
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CORPORATE OFFICE
LEONG SOON PENG Senior Vice President, Information Technology
JENNIE CHUA Chief Corporate Officer
LIEW MUN LEONG President & CEO
RITA LAU Senior Vice President, Corporate Planning
BELINDA GAN Group Financial Controller
TAN SENG CHAI Senior Vice President, Human Resource
BASSKARAN NAIR Senior Vice President, Corporate Marketing & Communications
WEN KHAI MENG Chief Investment Officer
OLIVIER LIM Group Chief Financial Officer
HAROLD WOO Senior Vice President, Investor Relations
HUBERT LADSTATTER Senior Vice President, Risk Management
LOW SAI CHOY Senior Vice President, Legal/Company Secretary
BOAZ BOON Senior Vice President, Research
MONICA CHIA Senior Vice President, Internal Audit
ANNA CHOO Senior Vice President, Treasury
CHYE MOI JUNE Head, Group Tax
EE CHEE HONG Managing Director, Strategic Corporate Development
LEE TIONG PENG Senior Vice President, CapitaLand Institute of Management and Business
LEOW SIEW BENG Senior Vice President, Human Resource (Organisational Development)
LIM SOO GEE Vice President, Security Management
TING TONG KOI Senior Vice President, Operations Compliance Unit
Seated from left to right Standing from left to right Not in picture (in alphabetical order according to family name)
30
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Dr Hu Tsu Tau Chairman
Peter Seah Lim Huat Deputy Chairman
Liew Mun Leong President & CEO
in order of date of appointment:
Lim Chin Beng Jackson Peter Tai Richard Edward Hale Dr Victor Fung Kwok King James Koh Cher Siang Arfat Pannir Selvam Professor Kenneth Stuart Courtis Dr Fu Yuning John Powell Morschel
COMPANY SECRETARY
Low Sai Choy
ASSISTANT COMPANY
SECRETARY
Ng Chooi Peng
AUDIT COMMITTEE
Richard Edward Hale (Chairman) James Koh Cher Siang Arfat Pannir Selvam
INVESTMENT COMMITTEE
Dr Hu Tsu Tau (Chairman) Liew Mun Leong Jackson Peter Tai Professor Kenneth Stuart Courtis Olivier Lim Tse Ghow
EXECUTIVE RESOURCE AND
COMPENSATION COMMITTEE
Lim Chin Beng (Chairman) Peter Seah Lim Huat
NOMINATING COMMITTEE
Lim Chin Beng (Chairman) Peter Seah Lim Huat Liew Mun Leong Arfat Pannir Selvam
FINANCE AND BUDGET
COMMITTEE
Peter Seah Lim Huat (Chairman) Liew Mun Leong Jackson Peter Tai Professor Kenneth Stuart Courtis Olivier Lim Tse Ghow
CORPORATE DISCLOSURE
COMMITTEE
James Koh Cher Siang (Chairman) Liew Mun Leong Arfat Pannir Selvam
RISK COMMITTEE
James Koh Cher Siang (Chairman) Richard Edward Hale Arfat Pannir Selvam
REGISTERED ADDRESS
168 Robinson Road #30-01 Capital Tower Singapore 068912 Telephone: +65 6823 3200 Facsimile: +65 6820 2202
SHARE REGISTRAR
M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Offi ce Singapore 068906 Telephone: +65 6227 6660 Facsimile: +65 6225 1452
AUDITORS
KPMG LLP 16 Raffl es Quay #22-00 Hong Leong Building Singapore 048581 Telephone: +65 6213 3388 Facsimile: +65 6225 6157 (Engagement Partner since fi nancial year ended 31 December 2005: Eng Chin Chin)
PRINCIPAL BANKERS
• Australia and New Zealand Banking Group Limited
• Bank of China • BNP Paribas • China Merchants Bank Co., Ltd • Commonwealth Bank
of Australia • Credit Agricole Corporate
and Investment Bank • DBS Bank Ltd • Fortis Bank S.A. / N.V. • Malayan Banking Berhad • National Australia Bank Limited • Oversea-Chinese Banking
Corporation Limited • Public Bank Berhad • Standard Chartered Bank • Sumitomo Mitsui Banking
Corporation • The Bank of East Asia, Limited • The Bank of Tokyo-Mitsubishi
Ltd UFJ, Ltd • The Hongkong and Shanghai
Banking Corporation Limited • The Royal Bank of Scotland plc • United Overseas Bank Limited • Westpac Banking Corporation
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 30Cap AR Corp 0312_FN_OK.indd 30 12/03/2010 9:26 PM12/03/2010 9:26 PM
31
CORPORATE GOVERNANCE Report for the period from 1 January 2009 to 31 December 2009
CapitaLand observes high standards of corporate conduct in line with the Principles of the Code of Corporate Governance 2005 (the “Code”). We believe that each company needs to develop and maintain sound and transparent policies and practices to meet its specifi c business needs and to provide a solid foundation for a trusted and respected business enterprise. We remain focused on the substance and spirit of the Principles of the Code while achieving operational excellence and delivering the Group’s long term strategic objectives.
This Report on our corporate governance practices for fi nancial year 2009 (“Report”) describes our application of good governance principles in building a company committed to integrity, excellence and its people. The application is underpinned by sound systems of internal controls and accountability, which help to promote and drive long term sustainable growth and shareholder value.
The following sections covering each of the Principles outline our policies and practices.
(A) BOARD MATTERS
PRINCIPLE 1: Board’s Conduct of Affairs
CapitaLand is led by an effective Board comprising a majority of independent non-executive directors. Each director brings to the Board his skills, experience, insights and sound judgement, which together with strategic networking relationships, serves to further the interests of the Group. At all times, the directors are collectively and individually obliged to act in good faith and consider the best interests of CapitaLand.
The key roles of our Board are to: • Guide the corporate strategy and directions of
the Group; • Ensure that Senior Management discharges business
leadership and the highest quality of management skills with integrity and enterprise; and
• Oversee the proper conduct of the Group’s business.
To assist the Board in the discharge of its oversight functions, various Board Committees, namely the Audit Committee (“AC”), Corporate Disclosure Committee (“CDC”), Executive Resource and Compensation Committee (“ERCC”), Finance and Budget Committee (“FBC”), Investment Committee (“IC”), Nominating Committee (“NC”) and Risk Committee (“RC”) have been constituted with clear written Terms of Reference. Other Board Committees may be formed as dictated by business imperatives.
Membership of the various Board Committees is carefully managed to ensure an equitable distribution of
responsibility among Board members, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are considered. CapitaLand has also taken steps to ensure that there are appropriate checks and balances between the different Board Committees. Hence, membership of the FBC and IC being Board Committees which are more involved in key businesses or executive decisions, and membership of the AC with its supervisory role, are mutually exclusive.
The Board meets regularly to review the key activities and business strategies of the Group, at least once every quarter, and as required by business imperatives. The Board deliberates strategic policies of the Group, including signifi cant acquisitions and divestments, approving the annual budget, reviewing the performance of the Group’s businesses, and approving the release of the quarterly and full-year results. The AC is delegated the authority by the Board to review such results.
A total of eight Board meetings was held in 2009. A Project Committee meeting attended by the Board was held in 2009 in relation to the Rights Issue of CapitaLand. Two Project Verifi cation meetings attended by the Board were held in 2009 in relation to the initial public offering of CapitaMalls Asia Limited, the integrated shopping mall business of CapitaLand.
A table of the Board members’ participation in the various Board Committees is set out on page 38 of this Report. This refl ects each Board member’s additional responsibilities and special focus in the respective Board Committees.
A table showing the attendance record of directors at Board meetings, Board Committee meetings, Project Committee meeting and Project Verifi cation meetings during the year is set out on page 39 of this Report. We believe in the manifest contribution of our directors beyond attendance at formal Board and Board Committee meetings. CapitaLand’s directors are all professionals with diverse experience and able to provide effective guidance on the strategic direction of the Group’s businesses. To judge a director’s contribution based on his attendance at formal meetings alone would not do justice to his overall contribution, which includes being accessible to Management for guidance or exchange of views outside the formal environment of Board meetings.
The Board has adopted a set of internal controls which sets out approval limits for capital expenditure, investments and divestments, bank borrowings and signature of cheques at Board level. Approval sublimits are also provided at Management levels to facilitate operational effi ciency.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmcLLL
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CORPORATE GOVERNANCE Report for the period from 1 January 2009 to 31 December 2009
The IC is chaired by Dr Hu Tsu Tau and comprises Mr Liew Mun Leong, Mr Jackson Peter Tai, Professor Kenneth Stuart Courtis and Mr Olivier Lim Tse Ghow, the Group Chief Financial Offi cer (“Group CFO”). The IC has been delegated the authority by the Board to approve the Group’s investments and divestments not requiring shareholders’ approval, participation in tenders and bids and acceptance of credit facilities from fi nancial institutions and banks. Since 2000, the Board had approved the delegation of some of its authority to the various strategic business unit (“SBU”) Boards and Management committees within strict limits. Apart from convening two formal meetings of the IC in 2009, the views of the IC and Board were actively sought by the SBUs, and the approval of the IC obtained where required.
Changes to regulations and accounting standards are monitored closely by Management. Where regulatory changes have an important bearing on CapitaLand’s or directors’ disclosure obligations, directors are briefed during Board meetings or at specially-convened sessions conducted by professionals.
Newly appointed directors are given briefi ngs by Management on the business activities of the Group and its strategic directions. Upon appointment, each director is briefed and provided with a formal letter setting out the director’s duties and obligations. Directors are expected to exercise independent judgement in the best interests of CapitaLand. Directors are also briefed and provided with relevant information on CapitaLand’s policies and procedures relating to corporate conduct and governance including disclosure of interests in securities, prohibitions on dealings in CapitaLand’s securities, restrictions on disclosure of price sensitive information and the disclosure of interests relating to certain property transactions.
The directors are provided with opportunities for continuing education in areas such as directors’ duties and responsibilities, corporate governance, changes in fi nancial reporting standards, insider trading, changes in the Companies Act and industry-related matters, so as to update them on matters that affect or may enhance their performance as Board or Board Committee members.
PRINCIPLE 2: Board Composition and Guidance
As at 31 December 2009, the Board comprised 11 directors, of whom 10 were independent non-executive directors. With the appointment of Mr John Powell Morschel on 1 February 2010, the Board currently comprises 12 directors, of whom 11 are independent non-executive directors.
The non-executive Chairman Dr Hu Tsu Tau brings with him a wealth of experience both in the Singapore Government (as a former Cabinet Minister) and in a major global company (as previous Chairman and Chief Executive of the Shell Group of companies in Singapore). The sole executive director is Mr Liew Mun Leong, who is also the President and Chief Executive Offi cer (“CEO”).
The directors are business leaders and professionals with governmental, fi nancial, banking, tax, trading, real estate, transport and legal backgrounds. Profi les of the directors are provided on pages 18 to 23 of this Report.
This composition of the Board enables Management to benefi t from their external, diverse and objective perspective on issues brought before the Board. It also enables the Board to interact and work with Management through a robust exchange of ideas and views to help shape the strategic process. This, together with a clear separation of the role of the Chairman and the CEO, provides a healthy professional relationship between the Board and Management with clarity of roles and facilitates robust deliberation on the business activities of the Group.
The Board has established the NC which makes recommendations to the Board on all Board appointments and determines a director’s independence. The NC has determined that the 10 non-executive directors on the Board were independent in fi nancial year 2009. Although Professor Kenneth Stuart Courtis received payment of an amount of US$60,000 for services rendered to CapitaLand as Economics Advisor and Mrs Arfat Pannir Selvam received payment of an amount of S$89,925 for consultancy services rendered to subsidiaries of CapitaLand in fi nancial year 2009, the NC considers both Professor Courtis and Mrs Selvam as independent directors notwithstanding their relationships with CapitaLand in respect of Guidance Note 2.1(c) of the Code as the amounts paid are not signifi cant and they are able to exercise strong independent judgement in their deliberations in the interests of CapitaLand.
PRINCIPLE 3: Chairman and Chief Executive Offi cer
To maintain effective supervision and accountability of each of the Board and Management levels, the positions of Chairman and CEO are held by separate individuals.
The non-executive Chairman, Dr Hu Tsu Tau, is responsible for the Board and acts independently in the best interests of CapitaLand and its shareholders, while the President and CEO, Mr Liew Mun Leong, is responsible for the running of the Group’s businesses.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmcLLL
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The Chairman ensures that the members of the Board and Management work together with integrity, competency and moral authority, and that the Board constructively engages Management on strategy, business operations, enterprise risk and other plans.
The President and CEO is a Board member and has full executive responsibilities over the business directions and operational decisions of the Group. The President and CEO, in consultation with the Chairman, schedules Board meetings and fi nalises the preparation of the Board meeting agenda. He ensures the quality and timeliness of the fl ow of information between Management and the Board. He is also responsible for ensuring that CapitaLand complies with corporate governance guidelines.
PRINCIPLE 4: Board Membership
Board renewal is a continual process, for good governance and to maintain relevance to the changing needs of the Group’s businesses. The President and CEO, as a Board member, is also subject to retirement and re-election by shareholders as part of Board renewal. Election of Board members is the prerogative and right of shareholders.
The NC is chaired by Mr Lim Chin Beng and comprises Mr Peter Seah Lim Huat, Mr Liew Mun Leong and Mrs Arfat Pannir Selvam.
The majority of the NC members, including the Chairman, are independent non-executive directors.
The NC ensures that the Board and Board Committees in the Group comprise individuals who are best able to discharge their responsibilities as directors having regard to the law and the highest standards of corporate governance. In performing its role, the NC is guided by its Terms of Reference which sets out its responsibilities. In particular, the NC reviews and recommends: • Candidates to be CapitaLand’s nominees on the
Board and Board Committees of listed companies within the Group; and
• Candidates to the Board and Board Committees of holding companies of the SBUs.
The NC sources for candidates who would be able to value add to Management through their contributions in the relevant strategic business areas and in the constitution of strong and diverse boards.
CapitaLand’s Articles of Association require one-third of its directors to retire and subject themselves to re-election (“one-third rotation rule”) by shareholders
at every Annual General Meeting (“AGM”). In other words, no director stays in offi ce for more than three years without being re-elected by shareholders.
The President and CEO, as a Board member, is also subject to the one-third rotation rule. This separates his role as President and CEO from his position as a Board member, and enables shareholders to exercise their right to select all Board members.
In addition, a newly-appointed director will submit himself for retirement and re-election at the AGM immediately following his appointment. Thereafter, he is subject to the one-third rotation rule.
Directors who are above the age of 70 are also statutorily required to seek re-appointment at each AGM.
Although some of our directors sit on the boards of various companies, they devote suffi cient time and attention to the affairs of CapitaLand.
PRINCIPLE 5: Board Performance
We believe that Board performance is ultimately refl ected in the long term performance of the Group.
The fi nancial indicators, set out in the Code as guides for the evaluation of the Board and its directors, are in our opinion more of a measurement of Management’s performance and therefore less applicable to directors. In any case, such fi nancial indicators provide a snapshot of a company’s performance, and do not fully measure the sustainable long term wealth and value creation of CapitaLand.
A more important consideration is that the Board, through the NC, had ensured from the outset the requisite blend of background, experience and knowledge in technology, business, fi nance and management skills critical to the Group’s businesses. It has from the outset ensured that each director with his special contribution brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.
Reviews of Board performance as appropriate are informal. Renewal or replacement of Board members do not necessarily refl ect their contributions to date, but may be driven by the need to position and shape the Board in line with the medium term needs of CapitaLand and its business.
PRINCIPLE 6: Access to Information
We believe that the Board should be provided with timely and complete information prior to Board meetings, and
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmcLLL
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34
as and when the need arises. As a general rule, Board papers are sent to Board members at least seven days before the Board meeting so that the members may better understand the matters prior to the Board meeting and discussion may be focused on questions that the members may have. However, sensitive matters may be tabled at the meeting itself or discussed without any papers being distributed. New Board members are fully briefed on the businesses of the Group.
Management provides adequate and timely information to the Board on Board affairs and issues requiring the Board’s decision. It also provides ongoing reports relating to operational and fi nancial performance of CapitaLand, such as monthly management fi nancial reports. The Articles of Association of CapitaLand provide for directors to convene meetings by teleconferencing or videoconferencing. Where a physical Board meeting is not possible, timely communication with members of the Board is effected through electronic means which include electronic mail, teleconferencing and videoconferencing. Alternatively, Management will brief directors in advance before seeking the Board’s approval.
The Board has access to Senior Management and the Company Secretary at all times. The Company Secretary attends to corporate secretarial administration matters and is the corporate governance advisor on corporate matters to the Board and Senior Management. The Company Secretary attends Board meetings. The appointment and removal of the Company Secretary are subject to the approval of the Board. The Board also has access to independent professional advice where appropriate.
Board meetings for each year are scheduled in advance in the preceding year to facilitate directors’ individual administrative arrangements in respect of competing commitments.
The AC also meets the external and internal auditors separately at least once a year, without the presence of the President and CEO and the Senior Management, in order to have unfettered access to information that it may require.
(B) REMUNERATION MATTERS
PRINCIPLE 7: Procedures for Developing
Remuneration Policies
PRINCIPLE 8: Level and Mix of Remuneration
PRINCIPLE 9: Disclosure on Remuneration
We believe that a framework of remuneration for the Board and key executives should not be taken in isolation. It should be linked to the building of management bench strength and the development of key executives.
This is to ensure continual development of talent and renewal of strong and sound leadership for a sustainable business and a lasting Company. CapitaLand’s ERCC plays a crucial role in helping to ensure that we are able to attract, recruit and retain the best talents to drive the Group’s businesses forward.
The ERCC is chaired by Mr Lim Chin Beng and comprises Mr Peter Seah Lim Huat.
All the members of the ERCC including the Chairman are independent non-executive directors. Outside members may be co-opted into the ERCC to provide a global perspective of talent management and remuneration practices.
The ERCC oversees executive compensation and development in CapitaLand. The ERCC is guided by its Terms of Reference. Specifi cally, the ERCC will: • Approve the remuneration framework for
non-executive directors; • Establish compensation policies for key executives; • Approve salary reviews, bonus and incentives for
key executives; • Approve share incentives and share ownership
for executives; • Approve key appointments and review succession
plans for key positions; and • Oversee the development of key executives and
younger talented executives.
The aim of the ERCC is to build capable and committed management teams, through competitive compensation, focused management, and progressive policies which can attract, motivate and retain a pool of talented executives to meet the current and future growth of CapitaLand.
The ERCC conducts, on an annual basis, a succession planning review of the President and CEO and selected key positions in CapitaLand. Potential internal and external candidates for succession are reviewed in the light of immediate, medium term and longer term needs and readiness.
The ERCC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the ERCC takes into consideration industry practices and norms in compensation. The President and CEO is not present during the discussions relating to his own compensation and terms and conditions of service, and the review of his performance. The President and CEO will be in attendance when the ERCC discusses policies and
CORPORATE GOVERNANCE Report for the period from 1 January 2009 to 31 December 2009
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 34Cap AR Corp 0312_FN_OK.indd 34 12/03/2010 9:29 PM12/03/2010 9:29 PM
35
compensation of his senior team and key staff. This include major compensation and incentive policies such as the performance share plan and restricted stock plan framework for bonus, staff salary review and other incentive schemes. A total of two ERCC meetings was held in 2009.
Non-executive directors have remuneration packages consisting of directors’ fees, attendance fees and contingent share awards pursuant to CapitaLand’s Restricted Stock Plan. The directors’ fee policy is based on a scale of fees divided into basic retainer fees as director and additional fees for attendance and serving on Board Committees. Details of the breakdown are provided in the Other Information section of this Report (“Other Information”) on page 206. Directors’ fees for non-executive directors are subject to the approval of shareholders at the AGM.
The basis of allocation of the number of contingent share awards takes into account a director’s additional responsibilities at Board Committees.
The President and CEO as executive director does not receive director’s fees. He is the lead member of Management. His compensation consists of his salary, allowances, bonuses and contingent share awards. The latter is conditional upon him and CapitaLand meeting certain performance targets. The details of his compensation package are provided in the Other Information on page 206.
Key executives’ compensations consist of salary, allowances, bonuses and contingent share awards. The latter is conditional upon meeting certain performance targets. A signifi cant proportion of executives’ remuneration is linked to company and individual performance in the form of share based and Economic Value Added based compensation. Although the Code requires a company to disclose the names of at least the top fi ve key executives of CapitaLand, CapitaLand considers members of the Offi ce of the President as its key executives. Currently, apart from the President and CEO who is the executive director, there are only four other members namely CapitaLand Chief Corporate Offi cer Ms Jennie Chua Kheng Yeng, CapitaLand Chief Investment Offi cer Mr Wen Khai Meng, CapitaLand Group CFO Mr Olivier Lim Tse Ghow and The Ascott Limited CEO Mr Lim Ming Yan. Their remuneration in bands of S$250,000 are provided in the Other Information on page 206.
No employee of CapitaLand and its subsidiaries was an immediate family member of a director or the
President and CEO and whose remuneration exceeded S$150,000 during the fi nancial year 2009. “Immediate family member” means the spouse, child, adopted child, step-child, sibling and parent.
A separate remuneration report is not prepared as most of the information is found in the Other Information on page 206.
Details of the employee share schemes are given in the Directors’ Report on page 110.
(C) ACCOUNTABILITY AND AUDIT
PRINCIPLE 10: Accountability
CapitaLand believes in conducting itself in ways that deliver maximum sustainable value to our shareholders. CapitaLand promotes best practices as a means to build an excellent business for our shareholders and is accountable to shareholders for its performance.
At CapitaLand, the separation of the roles of the Chairman and the President and CEO, and the holding of such appointments by separate individuals, ensure effective supervision of Management and maintenance of accountability of the Board to the shareholders, and of Management to the Board.
Prompt fulfi lment of statutory reporting requirements is but one way to maintain shareholders’ confi dence and trust in the capability and integrity of CapitaLand.
CapitaLand was the fi rst listed real estate group in Singapore to implement quarterly reporting in the third quarter of 2001, before it became a requirement by the Singapore Exchange Securities Trading Limited (“SGX-ST”). This shows CapitaLand’s corporate intent to discharge its continuing obligation of prompt and thorough disclosures as practised by international standards, in view of the global reach of its businesses and shareholder base.
PRINCIPLE 11: Audit Committee
CapitaLand’s internal policy requires the AC to have at least three members, all of whom are non-executive and the majority must be independent.
The AC is chaired by Mr Richard Edward Hale and comprises Mr James Koh Cher Siang and Mrs Arfat Pannir Selvam. All the members of the AC including the Chairman are independent non-executive directors. The members bring with them invaluable managerial and professional expertise in the fi nancial, tax and legal domains.
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The AC is guided by Terms of Reference which defi nes its scope of authority. These Terms include review of the annual audit plan, adequacy of the internal audit process, results of audit fi ndings and Management’s response, adequacy and effectiveness of internal controls, Interested Person Transactions, framework and processes established for the implementation of the terms of the collaboration agreement between CapitaLand and CapitaMalls Asia Limited, the processes for the management of material confl icts of interest within the Group and also the resolution of all confl icts of interest matters referred to the AC.
The AC reviews quarterly and full-year results and the appointment and re-appointment of auditors before recommending them to the Board for approval. The AC also approves the compensation of the external auditors, as well as considers the nature and extent of non-audit services and their potential impact on the independence and objectivity of the external auditors.
The AC also reviews arrangements by which employees of CapitaLand may, in confi dence, raise concerns about possible improprieties in matters of fi nancial reporting or other matters. Pursuant to this, the AC has introduced a Whistle Blowing Policy where staff may raise improprieties to the Chairman in good faith, with the confi dence that employees making such reports will be treated fairly and be protected from reprisal. The AC confi rms that no reports have been received under the Whistle Blowing Policy thus far.
A total of four AC meetings was held in 2009. The AC also held one meeting with the external auditors and internal auditors, without Management’s presence, to discuss the reasonableness of the fi nancial reporting process, the system of internal control, and the signifi cant comments and recommendations by the auditors.
PRINCIPLE 12: Internal Controls
PRINCIPLE 13: Internal Audit
CapitaLand believes that it has in place a system of internal controls to safeguard shareholders’ interests and the Group’s assets, and also to manage risks.
The AC’s responsibilities in the Group’s internal controls are complemented by the work of the FBC and the RC.
The FBC is chaired by Mr Peter Seah Lim Huat and comprises Mr Liew Mun Leong, Mr Jackson Peter Tai, Professor Kenneth Stuart Courtis and Mr Olivier Lim Tse Ghow, the Group CFO. The FBC reviews the annual budget and fi nancial policies of the Group.
In 2009, the FBC met two times to review the fi nancial forecasts and the annual fi nancial plan of the Group. Major business events, initiatives, strategies and areas of concern were also discussed at the meetings. In addition, the FBC reviews and approves updates to the CapitaLand Group Finance Manual.
The RC was formed in September 2002 as part of CapitaLand’s efforts to strengthen its risk management processes and framework. The RC comprises Mr James Koh Cher Siang as the Chairman, with Mr Richard Edward Hale and Mrs Arfat Pannir Selvam as members. There were four meetings of the RC held in 2009.
The RC’s role is to: • Review the adequacy of CapitaLand’s risk
management process; • Review and approve in broad terms, the risk guidelines
and limits. These include country concentration limits and risk-adjusted country hurdle rates for the Group and the SBUs, which are reviewed annually; and
• Review CapitaLand’s risk portfolio and risk levels, as assisted by the CapitaLand Corporate Risk Assessment Group, which scrutinises the risk profi le of every major project which is proposed and is responsible for compiling the Group Quarterly Risk Report. Included in the report is a monitoring of the utilisation of approved country and treasury limits of the Group.
Based on the review of these Board Committees, the Board, through the AC, is satisfi ed that there are adequate internal controls in place within the Group.
The Group has an Internal Audit Department (“CL IA”) which reports directly to the Chairman of the AC and administratively to the Group CFO. CL IA plans its internal audit schedules in consultation with, but independently of, Management and its plan is submitted to the AC for approval at the beginning of each year. The AC also meets with CL IA at least once a year without the presence of Management.
CL IA is a corporate member of the Singapore branch of the Institute of Internal Auditors Inc. (“IIA”), which has its headquarters in the USA. CL IA subscribes to, and is guided by, the Standards for the Professional Practice of Internal Auditing (“Standards”) developed by the IIA and has incorporated these Standards into its audit practices.
The Standards set by the IIA cover requirements on: • Independence; • Professional Profi ciency; • Scope of Work;
CORPORATE GOVERNANCE Report for the period from 1 January 2009 to 31 December 2009
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• Performance of Audit Work; and • Management of the Internal Auditing Department.
CL IA staff involved in Information Technology (“IT”) audits are Certifi ed Information System Auditors and members of the Information System Audit and Control Association (“ISACA”) in the USA. The ISACA Information System Auditing Standards provide guidance on the standards and procedures to be applied in IT audits.
To ensure that the internal audits are performed by competent professionals, CL IA recruits and employs suitably qualifi ed staff. In order that their technical knowledge remains current and relevant, CL IA identifi es and provides training and development opportunities to these staff.
(D) COMMUNICATION WITH SHAREHOLDERS
PRINCIPLE 14: Communication with Shareholders
PRINCIPLE 15: Greater Shareholder Participation
CapitaLand’s Investor Relations and Corporate Communications departments facilitate effective communications with CapitaLand's shareholders, analysts, fund managers and the media.
CapitaLand's results for the fi rst three quarters and full year for fi nancial year 2009 were all released on a timely basis, within 35 days of the end of the relevant quarter and 55 days of the end of the full year.
CapitaLand has also formed the CDC chaired by Mr James Koh Cher Siang and comprising Mr Liew Mun Leong and Mrs Arfat Pannir Selvam. The CDC reviews the promptness and comprehensiveness of corporate disclosure issues and announcements made to the SGX-ST, and ensures the adoption of good corporate governance and best practices in terms of transparency to shareholders and the investing community. The views and approvals of the CDC were sought throughout the year on various announcements and news releases issued by CapitaLand.
CapitaLand continues to keep stakeholders and analysts informed of its corporate activities in Singapore and around the world on a timely and consistent basis. CapitaLand makes disclosures on an immediate basis as required under the Listing Manual of the SGX-ST, or as soon as possible where immediate disclosure is not practicable. Regular briefi ngs and meetings for analysts and the media are held, generally coinciding with the release of the Group's second quarter and full-year results. During these briefi ngs, Senior Management reviews the Group's most recent performance and discusses CapitaLand's outlook. In the interest of transparency and broad dissemination, these briefi ngs are webcast live and accessible to the public on
the Group's website at www.capitaland.com. Materials used in the briefi ngs are also disseminated via SGXNET. Recordings of the briefi ngs are archived on the website.
In 2009, Senior Management conducted about 700 meetings with institutional investors. Management also participated in investor conferences in London, New York, Boston, Denver, San Francisco, Frankfurt, Hong Kong, and Beijing besides Singapore. In addition, CapitaLand pursues opportunities to keep its retail shareholders informed through the business media, website postings and other publicity channels.
CapitaLand supports the Code's principle to encourage shareholder participation. Shareholders receive the summary fi nancial report and notice of the AGM. Notice of the AGM is also advertised in the press and issued via SGXNET. At the AGM and immediately thereafter, shareholders have the opportunity to communicate their views and discuss with the Board and Management matters affecting CapitaLand. The respective Chairpersons of the AC, NC and ERCC, and the external auditors, would usually be present at the AGM. Voting in absentia and by email may only be possible following careful study to ensure that the integrity of the information and authentication of the identity of shareholders through the web are not compromised and legislative changes are effected to recognise electronic voting.
In 2009, CapitaLand was the winner of the Most Transparent Company (Property Category) in the Securities Investors Association (Singapore) (SIAS) Investors’ Choice Awards for the ninth consecutive year. In addition, CapitaLand was named “Overall Best Company in Singapore” and “Best for Disclosure and Transparency in Singapore” in Asiamoney’s Corporate Governance Poll 2009.
DEALINGS IN SECURITIES
Taking into consideration the SGX-ST Best Practices Guide, CapitaLand has issued guidelines to directors and employees in the Group, prohibiting dealings in CapitaLand’s securities, while in possession of material unpublished price-sensitive information and during two weeks before the release of CapitaLand’s results for the fi rst three quarters and one month before the release of CapitaLand’s full year results.
Directors and employees are also prohibited from dealing in securities of other listed companies in the Group while in possession of unpublished price-sensitive information by virtue of their status as directors and/or employees. They are also made aware of the applicability of the insider trading laws at all times.
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COMPOSITION OF BOARD AND BOARD COMMITTEES
Executive Resource and Finance and Corporate Audit Investment Compensation Nominating Budget Disclosure Risk Board Members Committee Committee Committee Committee Committee Committee Committee
Dr Hu Tsu Tau C
Peter Seah Lim Huat M M C
Liew Mun Leong M M M M
Lim Chin Beng C C
Jackson Peter Tai M M
Richard Edward Hale C M
Dr Victor Fung Kwok King
James Koh Cher Siang M C C
Arfat Pannir Selvam M M M M
Professor Kenneth Stuart Courtis M M
Dr Fu Yuning (appointed on 27 July 2009)
John Powell Morschel (appointed on 1 February 2010)
Non-Board Member
Olivier Lim Tse Ghow M M
Denotes: C: Chairman M: Member
CORPORATE GOVERNANCE Report for the period from 1 January 2009 to 31 December 2009
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ATTENDANCE RECORD OF BOARD, BOARD COMMITTEE, PROJECT COMMITTEE
AND PROJECT VERIFICATION MEETINGS
Executive Resource and Finance and Audit Investment Compensation Budget Risk Project Project Board Committee Committee Committee Committee Committee Committee Verifi cation
No. of Meetings Held 8 4 2 2 2 4 1 2
Board Members
Dr Hu Tsu Tau 7 2 2
Peter Seah Lim Huat 6 2 2 1
Liew Mun Leong 8 2 2 1 2
Lim Chin Beng 8 2 2
Jackson Peter Tai 8 1 2 2
Richard Edward Hale 7 4 4 1 1
Dr Victor Fung Kwok King 4
James Koh Cher Siang 7 4 4 1 1
Arfat Pannir Selvam 7 4 4 1 1
Professor Kenneth Stuart Courtis 8 2 2 2
Dr Fu Yuning (appointed on 27 July 2009) 4 2
John Powell Morschel (appointed on 1 February 2010) –
Non-Board Member
Olivier Lim Tse Ghow 2 2
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The total market capitalisation of the eight* public listed entities in the Group, net of common holdings, is S$30.1 billion as at 31 December 2009.
The Group manages S$47.7 billion of real estate assets.
65.5%
59.3%
17.7%
GROUP BUSINESSES
* Includes listed entities managed by the Group
Listed entity
Figures denote effective interest of CapitaLand in the listed entity, held directly by CapitaLand and/or indirectly through its Group companies.
19.6%
31.6%
47.5%
9.5%
15 Private Equity
Real Estate Funds
REAL ESTATE
HOSPITALITY
FINANCIAL SERVICES
REITS
Residential Singapore
China
Commercial
Retail
Integrated Developments
Australia
Serviced Residences
Financial Services
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FINANCIAL CALENDAR
FINANCIAL YEAR ENDED 31 DECEMBER 2009
Announcement of First Quarter Results 24 April 2009
Announcement of Second Quarter Results 30 July 2009
Announcement of Third Quarter Results 27 October 2009
Announcement of Full Year Results 11 February 2010
Annual General Meeting 16 April 2010
Books Closing (Record Date) 5.00 p.m. on 28 April 2010
Books Closure 29 April 2010
Proposed Payment of 2009 Final Dividend and Special Dividend 13 May 2010
FINANCIAL YEAR ENDING 31 DECEMBER 2010
Proposed Announcement of First Quarter Results April 2010
Proposed Announcement of Second Quarter Results July 2010
Proposed Announcement of Third Quarter Results October 2010
Proposed Announcement of Full Year Results February 2011
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RISK ASSESSMENT AND MANAGEMENT
Risk assessment and management is an integral part of the strategic and operational decision-making process at all levels of the CapitaLand Group.
Since its inception in 2000, a comprehensive risk management framework has been formalised across the Group. In 2002, a Risk Committee comprising independent board directors was formed as part of CapitaLand’s efforts to strengthen its risk management processes and framework.
In 2009, the Risk Committee comprised Mr James Koh Cher Siang (Chairman), Mr Richard Edward Hale and Mrs Arfat Pannir Selvam. The Group’s President and CEO Mr Liew Mun Leong and other senior management regularly attend Risk Committee meetings. The Risk Committee is assisted by the Risk Assessment Group (RAG), an independent in-house unit with members having vast experience in fi nancial and operational risk management.
CapitaLand maintains a prudent risk profi le by counterchecking business initiatives with RAG and by investing in a mix of stable assets and development properties. Unique risk management models, developed in-house, enable the Group to engage in a “disciplined aggression” investment strategy. A key reporting tool used is a Value-at-Risk (VaR) model adapted from the banking industry and tailored for real estate-specifi c risks. This model measures the relative and absolute riskiness of the Group’s exposures using a historical simulation method.
Every quarter, RAG generates a comprehensive portfolio risk report that identifi es, measures and mitigates relevant risks and exposures where possible. Potential risks include:
Property market risk – Real estate markets are cyclical and signifi cantly affected by global and local conditions, such as government regulations, competition, consumer confi dence, and demand and supply. Existing and new exposures are evaluated with the VaR model, stress testing and scenario analyses are performed, and all fi nancial assumptions of project cash fl ows are benchmarked to ensure forecasts are objective.
Credit risk – Financial loss could occur if fund investors or joint venture partners fail to meet contractual obligations or unexpected capital calls. Processes are established to mitigate such risks, including performing counterparty credit evaluations, and monitoring and quantifying potential contingent obligations that may occur.
Development risk – Depending on size and complexity, new projects typically take a few years to complete depending on size and complexity. The risks of potential delays and cost overruns of ongoing development projects are regularly monitored and quantifi ed with the VaR model, and reported to the Risk Committee.
Foreign currency risk – CapitaLand operates internationally and is exposed to various currencies. It maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property or investment is located or by borrowing in currencies that match future revenue streams generated by investments.
Interest rate risk – CapitaLand’s interest rate risk exposure relates mainly to funding of its property investments. This is managed with a prudent mix of fi xed and fl oating rate borrowings. This allows the Group to capitalise on cheaper funding in a low interest rate environment and protect against potential rate hikes.
Liquidity risk – To mitigate liquidity risk of not meeting fi nancial obligations as they fall due, CapitaLand actively manages its debt maturity profi le, operating cash fl ows and the availability of funding so as to ensure that all refi nancing, repayment and funding needs are met.
RAG has established a risk-based country asset allocation system to manage country transfer risk effectively and avoid concentration risk. This uses a multi-faceted and risk-adjusted methodology based on CapitaLand’s investment strategy, sovereign risk ratings by international rating agencies and macroeconomic consensus views from the Group’s in-house Economics Unit.
RAG performs independent risk evaluations of investment proposals by the Group’s business units above a stipulated investment value threshold. RAG calculates the risk-adjusted weighted average cost of capital and project-specifi c target returns of individual countries and business units according to their respective risk profi les, using these as benchmarks for the projected returns of individual investment proposals. Where applicable, RAG makes recommendations to improve the structure of investment proposals to mitigate risks and optimise the risk-return profi le.
Going forward, CapitaLand will continue to review and adjust its risk management systems and methodologies so as to manage risks proactively, preserve capital and enhance shareholders’ value. The Group’s key risk management principle remains its endeavour to optimise risk.
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HUMAN RESOURCE
CapitaLand recognises the importance of managing and developing human capital. Its credo of “Building People to Build for People” means training them to achieve at an optimal level, aligning their personal goals with the company’s performance and creating a work environment for them to contribute positively. This is the Group’s integrated human capital strategy to recruit, develop and motivate employees.
TALENT MANAGEMENT
CapitaLand identifi es talents both internally and externally to build its talent pipeline for succession planning and bench strength. These include undergraduates, fresh graduates, young and mid-career professionals as well as industry veterans.
Despite a diffi cult year, CapitaLand remained committed to invest in its talent pipeline. A Talent Incubation Programme was launched in 2009 to place young and promising talents on short attachments in the Group. CapitaLand recruited talents through its network with Singapore and overseas universities. CapitaLand also attracted future leaders through scholarships such as the CapitaLand–BCA Scholarship, CapitaLand-NUS-USP Scholarship and CapitaLand International Scholarship.
During the year, CapitaLand intensifi ed staff training and development to equip employees for the changing business environment. Launched in 2006, the CapitaLand Institute of Management and Business (CLIMB) has provided over 4,500 training places for employees from various countries. Ascott Centre for Excellence (ACE), Ascott’s global hospitality training centre in Singapore, has trained 2,750 people for the hotel and accommodation services sector.
CapitaLand’s successful ICE (Innovation, Creativity, Entrepreneurship) programme continued to inspire
employees. To date, 1,000 employees have shared ideas at 24 ICE camps and related activities held in various countries.
COMPETITIVE COMPENSATION/ BENEFITS
CapitaLand motivates and rewards employees with comprehensive and competitive compensation and benefi ts programmes. Incentives include short-term cash bonuses and long-term equity-based reward plans.
The performance-based Restricted Stock Plan is an attractive long-term incentive to employees which gives them a personal stake in the company, contingent on achieving performance targets. This better aligns employee and shareholder interests to deliver business results. Regular benchmarking against different markets and innovation in compensation strategies ensure CapitaLand remains competitive and continues to attract and retain talent.
In December 2009, in light of the continued business recovery, CapitaLand fully restored salary reductions that were implemented in January 2009 as part of cost management measures done in context of the gloomy business environment, a move that was welcomed by unions. In recognition of its consultative and collaborative approach with the unions, CapitaLand was awarded the May Day Model Partnership Award in 2009.
POSITIVE WORK ENVIRONMENT
CapitaLand recognises that a positive work environment will better attract, motivate and retain talent. A total employee well-being programme is in place to promote personal development, health and work-life harmony. Initiatives include a fl exible benefi ts plan, fl exible work arrangements and subsidised rates at The Ascott’s serviced residences.
Leadership training by CapitaLand Group President & CEO Liew Mun Leong.
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CORPORATE SOCIAL RESPONSIBILITY
CapitaLand is committed to be a good corporate citizen. The Group aims to contribute to the societies within which it operates and promote sustainable growth for future generations. Its corporate social responsibility efforts focus on philanthropy, the environment and the community.
In 2009, CapitaLand was recognised as a corporate sustainability leader by two international sustainability benchmarks. The Group is the only Singapore company in the Sustainability Yearbook 2009 and one of only two Singapore companies in the Dow Jones Sustainability Asia Pacifi c Index. CapitaCommercial Trust, our commercial REIT, was included in the FTSE4Good Index Series (FTSE4Good), a series of benchmark and tradable indices for responsible investors.
CapitaLand staff play an active role in all the Group’s programmes, participating in community outreach programmes and volunteer expeditions. Staff volunteerism is encouraged through supportive human resource policies such as three days of paid volunteer service leave annually, volunteer no-pay leave or a volunteer part-time work arrangement.
PHILANTHROPY
Every year, CapitaLand allocates up to 0.5% of its net profi t to CapitaLand Hope Foundation (CHF),
Students of the CapitaLand Muchuan Green Hope School in Sichuan Province, China.
its philanthropic arm, to support programmes for the shelter, education and healthcare needs of underprivileged children. In 2009, CHF maintained its corporate giving strategy despite the global economic slowdown.
CapitaLand’s Green for Hope 2008 project received overwhelming response. About 260,000 schoolchildren from 154 Singapore primary schools collected over 644,000 kilogrammes of recyclable waste during the year-long campaign which concluded in June 2009. CHF donated more than S$1 million in total, its largest donation for a single project. The project was extended for six months due to the strong community support. Between July to December 2009, CHF awarded a S$280 CapitaLand Green for Hope Bursary for every 100 kg of recyclable waste collected. A total of 3,206 bursaries were awarded to 154 participating primary schools for collecting about 380,000 kg of recyclable waste.
In June, CapitaLand launched the Back to School project at Sembawang Shopping Centre. Guided by 140 CapitaLand staff volunteers, 200 underprivileged children from Care Corner Singapore bought school necessities with S$25,000 worth of vouchers donated by CHF.
In 2009, the National Volunteer & Philanthropy Centre presented CapitaLand the Corporate Citizen Award for Philanthropy in recognition of its active corporate citizenship.
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In China, CapitaLand pledged to build six CapitaLand Hope Schools in Inner Mongolia, Zhejiang Province and Guangdong Province, bringing the total in the country to 15. Launched in 2004, the project aims to provide improved school and living facilities for children in China’s rural areas. To date, seven schools have opened to students.
CapitaLand won the Cityscape Best Developer (Corporate Social Responsibility) Award for showing outstanding social responsibility for the design and construction of the CapitaLand Muchuan Green Hope School in Sichuan Province. In November, CapitaLand organised a volunteer expedition to the school for members of the public and CapitaLand staff.
CapitaLand also worked with local and international non- profi t organisations such as World Vision and Gentle Fund Organisation to organise overseas volunteer expeditions to effect positive, sustainable changes to local communities in China, Vietnam and Thailand.
ENVIRONMENT
CapitaLand believes in building for the future by protecting the environment for future generations.
CapitaLand monitors and tracks the electricity and water usage of over 180 properties worldwide with an Environmental Tracking System (ETS). In 2009, the Group outperformed its targets for reduction of electricity and water usage of its properties worldwide (set at 3% reduction of 2008 usage). Actual reductions achieved were 7.2% and 4.0% respectively, resulting in savings of approximately S$8.8 million (based on average country utility rates).
Occupational health and safety is of paramount importance to CapitaLand. In 2009, it obtained OHSAS 18000 certifi cation (Standards for Occupational Health and Safety Management Systems) in Singapore, in addition to ISO 14000 certifi cation for environmental management obtained previously for Singapore, China and Vietnam.
For demonstrating excellence and leadership in the built environment in Singapore, CapitaLand won the Built Environment Leadership Gold Class (Developer Category) Award conferred by the Building and Construction Authority (BCA).
Through its Building a Greener Future programme, CapitaLand encourages staff, tenants and the community to play a role in protecting the environment and leave a “green legacy” for future generations. In August,
CapitaLand launched the CapitaLand Green Army initiative, mobilising staff to spread the green message. CapitaLand staff will be “armed” with Green Rations (fun bite-sized green tips) and undergo training to fi ght climate change.
In 2009, over 130 CapitaLand offi ces, retail malls and serviced residences in 13 countries including Singapore, Australia, China, France and the United Arab Emirates participated in Earth Hour 2009, a global climate change initiative organised by WWF.
In conjunction with World Water Day, CapitaLand adopted Marina Reservoir (Marina Bay and the Singapore River) and sponsored an electric boat under PUB’s Our Waters programme. Staff volunteers also participated in a Singapore River clean-up in conjunction with Earth Day. In 2009, CapitaLand won PUB’s Watermark Award in recognition of its strong management commitment to the water cause, active water management and conservation efforts, and its community outreach programmes.
In China, the Group set up temporary CapitaLand Green Shops in its Shanghai, Beijing, Chengdu and Foshan shopping malls to mark World Environment Day. The initiative successfully increased public awareness about environmental conservation.
COMMUNITY
CapitaLand believes in promoting an understanding of the cultures between its home base of Singapore and overseas communities.
CapitaLand pledged a conservation donation to support the pair of giant panda cubs Singapore will receive from China. This marked a signifi cant milestone for CapitaLand and is another testament of its long-term commitment to China. The 10-year collaborative programme will raise cultural exchange and understanding between Singapore and China and further strengthen the strong relationship between the two countries.
CapitaLand was the main sponsor for “Journey to the West”, a highly-acclaimed acrobatic drama performed by the renowned Guangzhou Acrobatic Troupe of China in Singapore. The Group also sponsored a two-day performance by Singapore Symphony Orchestra at the prestigious National Centre for the Performing Arts in Beijing.
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1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
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46
STAKEHOLDER COMMUNICATIONS
CapitaLand communicates regularly with shareholders, investors, analysts and the media to ensure all stakeholders are informed of its activities on a timely and consistent basis.
The Group consistently maintains a high level of investor access through face-to-face meetings, teleconferences, investor conferences, roadshows and site visits. In 2009, CapitaLand met with about 700 investors globally and participated in investor conferences and roadshows in Singapore, Beijing, Hong Kong, Shanghai, London and New York. Investors and analysts were able to engage senior management through formal and informal events. Over the last 18 months, CapitaLand organised two CEO forums where the Group’s President and CEO, chief fi nancial offi cer, and business unit CEOs presented their strategies to institutional investors.
CapitaLand has been committing more time and resources to cater to the growing pool of retail investors. In 2009, the Group participated in the Asian Investment Conference & Exhibition organised by the Securities Investors Association (Singapore) (SIAS).
CapitaLand engages the media and the investment community through news releases, media and analyst briefi ngs, and familiarisation trips. The Group’s Investor Relations website provides comprehensive company information such as news releases, legal announcements, fi nancial results and annual reports and includes features like push mail and RSS feeds to provide real-
time updates to stakeholders. All news releases and legal announcements are also available on the Singapore Exchange website.
At the half-year and full-year fi nancial results briefi ngs, top management briefed the media and analysts on CapitaLand’s performance. During the year, top management were interviewed by key Singapore and international media on issues including the listing of CapitaMalls Asia, the Group’s growth strategy and talent development.
CapitaLand regularly engages the media in the various countries it operates in. In 2009, Singapore-based media and analysts visited its projects in Beijing and Tianjin in China to gain insight into the Group’s operations there. Key Singapore and Chinese media were also invited to attend the launch ceremony for Raffl es City Ningbo.
The Group’s stakeholder communications efforts have been recognised by the investment community. In 2009, CapitaLand won the SIAS “Most Transparent Company (Property)” award for the ninth consecutive year and was the top Singapore company in Asiamoney’s Corporate Governance Poll 2009. CapitaLand also won four awards in the 2009 Thomson Reuters Extel IR Survey: for Singapore, most progress in investor relations, best investor relations by a chief fi nancial offi cer, and best investor relations professional (large cap); and for Asia Pacifi c, best investor relations professional.
2009 INVESTOR RELATIONS CALENDAR 1st Quarter
• DBS Vickers Pulse of Asia (Singapore)
• FY2008 fi nancial results briefi ng to media and analysts and live webcast
• Briefi ng to media and analysts on CapitaLand rights issue
• Roadshow on CapitaLand rights issue (Singapore, US, Europe, Hong Kong)
• Release of 2008 Annual Report
• Credit Suisse Asian Investment Conference (Hong Kong)
2nd Quarter
• Annual General Meeting
• Release of 1Q2009 fi nancial results
• Merrill Lynch Asian Stars Conference (Singapore)
• CLSA Corporate Access Forum (Singapore)
• JP Morgan Annual China Conference (China)
3rd Quarter
• 1H2009 fi nancial results briefi ng to media and analysts and live webcast
• CLSA Investors Forum (Hong Kong)
• Exane Derivatives Asian Convertible Bonds Conference (Singapore)
4th Quarter
• Briefi ng to media and analysts on listing of CapitaMalls Asia
• Roadshow on listing of CapitaMalls Asia (US, London, Hong Kong)
• Release of 3Q2009 fi nancial results
• Extraordinary General Meeting
• Media and Analysts Familiarisation Trip to China
• Morgan Stanley Asia Pacifi c Summit (Singapore)
• BNY Mellon Annual Depositary Receipt Issuers’ Conference (Indonesia)
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 46Cap AR Corp 0312_FN_OK.indd 46 12/03/2010 9:31 PM12/03/2010 9:31 PM
47
YEAR IN BRIEF
JANUARY
Ascott opened its fi rst Citadines-branded serviced residence in Singapore, the 154-unit Citadines Singapore Mount Sophia. Ascott also entered Fontainebleau in France through management contracts for the 92-unit Residence l’Ermitage and the 66-unit Residence Clos St Merry.
Capitala, a joint venture between CapitaLand and Mubadala Development Company, signed a cooperation agreement with Abu Dhabi Finance to provide buyers with fi nancing for new apartments in Rihan Heights.
MARCH
Ascott opened its fi rst Citadines-branded serviced residence in Japan. Jointly owned by Ascott and Mitsubishi Estate Co Ltd, the 160-unit Citadines Tokyo Shinjuku is Ascott’s 11th Citadines property to open in Asia.
CapitaLand raised S$1.8 billion through a one-for-two rights issue of new shares at S$1.30 each. The rights issue, which was 1.22 times subscribed, enhanced the Group’s fi nancial fl exibility and competitive position. Trading of the rights shares began on 20 March 2009.
Over 130 CapitaLand offi ces, shopping malls and serviced residences in 13 countries participated in Earth Hour 2009, a global climate change initiative organised by WWF.
CapitaLand obtained Temporary Occupation Permit for the 545-unit RiverGate and for the 73-unit Scotts HighPark, both residential developments in Singapore.
APRIL
CapitaLand was recognised as a corporate sustainability leader by two international sustainability benchmarks. The Group is the only Singapore real estate company in the Dow Jones Sustainability Asia Pacifi c Index and the only Singapore company in the Sustainability Yearbook 2009.
Ascott celebrated 25 successful years as the top international serviced residence owner-operator. To mark the milestone, Ascott launched over 25 community initiatives worldwide and promotions including a grand prize of free stays for the next 25 years.
Australand established three Bilateral Debt Facilities with domestic banks, totalling A$350 million (S$361.8 million), as part of its capital management strategy. It also secured new lending covenants for the A$950 million (S$982 million) Multi-Option Facility.
MAY
CapitaLand released new units of The Wharf Residence, a 999-year leasehold condominium within Singapore’s River Valley Conservation Area, to strong buyer response.
The Wharf Residence comprises 173 apartments and 13 beautifully conserved shophouses.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmcLLL
Cap AR Corp 0312_FN_OK.indd 47Cap AR Corp 0312_FN_OK.indd 47 16/03/2010 9:30 PM16/03/2010 9:30 PM
48
YEAR IN BRIEF
Ascott clinched a contract to manage the premier 282-unit Ascott Huai Hai Road Shanghai in China. The property is part of Hong Kong Plaza, a prestigious integrated lifestyle development. Ascott also opened the 250-unit Somerset Youyi, its second property in Tianjin.
CapitaLand increased its stake in Ankerite Pte Ltd, the CapitaLand-led consortium developing The Interlace condominium in Singapore, from 50% to 60%.
CapitaLand won the Cityscape Best Developer (Corporate Social Responsibility) Award for its CapitaLand Muchuan Green Hope School project in China’s Sichuan Province. CapitaLand was recognised for showing outstanding social responsibility towards the community and environment.
CapitaLand won eight awards at the Building and Construction Authority (BCA) Awards 2009, including the Built Environment Leadership Gold Class (Developer Category) Award for demonstrating excellence and leadership in the built environment in Singapore.
JUNE
CapitaLand opened Raffl es City Beijing’s retail mall with strong lease commitments of nearly 90%.
CapitaLand launched the ‘Raffl es City’ brand in Ningbo. Raffl es City Ningbo is CapitaLand’s fi fth integrated development in China after Shanghai, Beijing, Chengdu and Hangzhou.
CapitaLand signed strategic co-operation agreements with Bank of China and Industrial and Commercial Bank of China to provide a credit limit allocation of up to RMB25 billion (S$5 billion) to fund CapitaLand’s growth plans across China.
Australand and its joint venture partner announced plans for a A$300 million (S$340.5 million) urban renewal project in Australia. To be completed by 2017, the 7.5-hectare project is the largest and most environmentally sustainable public housing redevelopment in Victoria.
Australand announced the full repayment of A$563 million (S$639 million) commercial mortgage- backed securities (CMBS) notes.
CapitaMalls Asia opened its fi rst shopping mall in India – Forum Value Mall, Bangalore.
CapitaLand fully redeemed US$477 million (S$731 million) of Floating Rate Notes backed by receivables from RiverGate, a residential development in Singapore.
CapitaLand obtained Temporary Occupation Permit for The Metropolitan Condominium, a 382-unit condominium located on Alexandra Road in Singapore.
Somerset Garden City, Shenzhen is a 147-unit serviced residence located near Shenzhen’s Shekou business district.
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmcLLL
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49
JULY
Ascott opened its fi rst property in Chongqing and Shenzhen in China. They are the 157-unit Somerset JieFangBei, Chongqing and the 147-unit Somerset Garden City, Shenzhen.
CapitaLand formed the CapitaLand China Executive Committee (CCEC) to better co-ordinate and align its investments, operations, branding and resources in China.
CapitaLand strengthened its management bench with more of its younger senior offi cers, who had been groomed over the last several years, taking over leadership roles. The changes will bring CapitaLand to the next levels of growth and development.
Orchard Turn Developments, a joint venture between CapitaLand and Sun Hung Kai Properties, opened ION Orchard on 21 July. The 640,000-sq ft mall is strategically located in the heart of Orchard Road, Singapore’s prime retail belt.
Australand announced a seven-for-10 non-renounceable pro-rata entitlement offer of new stapled securities at an offer price of A$0.40 per new security to raise approximately A$475 million (S$556.7 million).
Dr Fu Yuning joined the CapitaLand Board as a non-executive independent director.
AUGUST
CapitaLand deployed about S$1 billion from its rights issue proceeds to its China, Vietnam and serviced residence businesses, sharpening the Group’s focus for the next phase of growth.
SEPTEMBER
CapitaLand’s fi rst private equity fund in China, the US$61 million (S$87.8 million) CapitaLand China Residential Fund, successfully matured, outperforming its target return.
Australand successfully completed its entitlement offer, raising approximately A$475 million (S$556.7 million). CapitaLand subscribed for its full entitlement and maintained its interest in Australand at approximately 59.3%.
CapitaLand China launched a campaign to recruit volunteer teachers for its CapitaLand Muchuan Green Hope School in Sichuan Province. Over 10,000 interested applicants signed up, and 26 were selected as volunteer teachers.
CapitaLand, together with its partners, unveiled the design for The Interlace. Designed by Ole Scheeren of the Offi ce for Metropolitan Architecture, the condominium redefi ned the typography of residential developments in Singapore.
CapitaLand raised S$1.2 billion through a seven-year convertible bond issue, the largest convertible bond issue for an Asian-listed issuer in 2009. This provided CapitaLand with one of the longest debt maturity profi les of any real estate company in Asia.
Phase one of The Interlace, comprising 360 units, was launched to strong response. The development has a total of 1,040 homes.
Following an asset swap arrangement with SZITIC Commercial Property Co., Ltd, CapitaLand took full ownership interest and management control of 22 Wal-Mart anchored malls, ensuring a better integration of CapitaLand’s retail operations and investments in China.
CapitaLand was awarded the Watermark Award by PUB, Singapore’s national water agency, in recognition of its strong management commitment to the water cause, active water management and conservation, and its community outreach programmes.
Ascott expanded its Vietnam presence through a management contract for its fi rst serviced residence in Hai Phong, the country’s third largest city. The 132- unit Somerset Central TD is Ascott’s seventh property in Vietnam.
OCTOBER
CapitaLand announced plans to list its integrated shopping mall business to accelerate the growth of the business. The listing of CapitaMalls Asia would also increase the Group’s overall fi nancial capacity and fl exibility to accelerate the growth of its other strategic business units.
CapitaLand completed the divestment of Raffl es City Hangzhou to the Raffl es City China Fund. The private equity fund’s portfolio now comprises Raffl es City Shanghai, Raffl es City Beijing, Raffl es City Chengdu and Raffl es City Hangzhou.
CapitaLand divested its 30% stake in Inverfi n Sdn Bhd, owner of the Menara Citibank offi ce building in Kuala Lumpur, Malaysia, for RM147 million (S$59.9 million), valuing the property at RM607.5 million (S$247.4 million).
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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50
YEAR IN BRIEF
Orchard Turn Developments, CapitaLand’s joint venture company with Sun Hung Kai Properties, held the grand opening ceremony of ION Orchard. The iconic shopping destination in Singapore is well-committed with more than 97% of the mall leased, and 70% of its tenants are new-to-market brands.
CapitaLand fully redeemed US$346 million (S$490.4 million) of Floating Rate Notes backed by receivables from The Metropolitan Condominium and Scotts HighPark in Singapore.
CapitaLand formed the CapitaLand Vietnam Executive Committee to provide a platform to set strategic directions and foster synergies among business units operating in Vietnam.
CapitaLand received shareholder approval to proceed with the listing of CapitaMalls Asia.
NOVEMBER
Ascott opened its fi rst serviced residence in Munich, Germany’s third largest city. The 146-unit Citadines Munich Arnulfpark is Ascott’s second property in the country. The company’s other property in Germany is in Berlin.
CapitaLand started preview sales of the approximately 1,500-unit Mulberry Lane, its fi rst residential development in Hanoi, Vietnam. Buyer response was strong and 82% (451 units) of the 549 units released have been sold.
Ascott clinched a contract to manage a serviced residence in Kuala Lumpur Sentral, the largest commercial and lifestyle development in Malaysia’s capital. The 143-unit Ascott Sentral Kuala Lumpur is the second Ascott-branded property in Kuala Lumpur.
CapitaLand pledged a conservation donation to support the pair of giant panda cubs Singapore will receive from China. This conservation donation is yet another testament of CapitaLand’s long-term commitment to China.
CapitaLand celebrated the 15th anniversary of the Group’s entry into China with the launch of its “15 Years in China” exhibition at Raffl es City Shopping Centre in Singapore.
CapitaLand pledged to build six more CapitaLand Hope Schools in China, bringing the total in the country to 15. The six new schools are located in Guangdong Province, Zhejiang Province and Inner Mongolia.
CapitaLand deployed the remaining S$800,000 of its rights issue proceeds to CapitaMalls Asia.
CapitaLand was conferred the Corporate Citizen Award for Philanthropy by the National Volunteer & Philanthropy Centre. The award honours those who have set excellence benchmarks in encouraging the spirit of giving in Singapore.
The approximately 1,500-unit Mulberry Lane is CapitaLand’s fi rst residential development in Hanoi, Vietnam.
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51
The public offer of CapitaMalls Asia was 4.9 times subscribed while the placement tranche received aggregate demand of approximately 2.5 times. Trading of CMA shares on the Singapore Exchange commenced on 25 November. Post-listing, CapitaLand’s effective interest in CMA stands at 65.5%.
DECEMBER
Ascott opened its fi rst property in Georgia’s capital, the 65-unit Citadines Tbilisi Freedom Square. The 162-unit Ascott Raffl es City Beijing also opened in China, marking the fi rst time an Ascott serviced residence has partnered with a Raffl es City integrated lifestyle development.
CapitaLand unveiled a new master brand for its China operations at a gala dinner in Shanghai to celebrate the Group’s 15th anniversary in China. The event was graced by Mr Sha Hailin, Deputy General Secretary of Shanghai Municipal Government, and Ms Ho Ching, Executive Director and CEO of Temasek Holdings.
Ascott launched its Citadines brand in Malaysia through a management contract for the 215-unit Citadines Kuching Uplands. It also secured a contract in China to manage the 160-unit Citadines Xi’an Xingqing Palace, its third property in Xi’an.
CapitaLand’s fi rst private equity fund in Malaysia, the US$30.5 million (S$42.3 million) Mezzo Capital, successfully matured, outperforming its target return.
CapitaLand started preview sales for Urban Suites, a 165-unit condominium in the Cairnhill area in Singapore’s Orchard Road shopping district. Phase one units were fully sold to buyers who were prepared to purchase more than one unit.
Australand Property Trust exchanged unconditional contracts for the sale of the Australand-developed Coles Regional Distribution Centre at Goulburn, New South Wales for A$64 million (S$80.5 million).
CapitaLand sold two leasehold industrial properties – Kallang Avenue Industrial Centre and Kallang Bahru Complex – for a total consideration of S$68 million. CapitaLand recognised a gain of approximately S$19.1 million from the divestment.
CapitaLand Group President & CEO Liew Mun Leong unveiling the new master brand for CapitaLand’s China operations during the Group’s “15 Years in China” celebration in Shanghai.
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HEALTHY PIPELINE OF
OVER 2,600 HOMES IN
PRIME LOCATIONS
RiverGate, Singapore
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53
Singapore real estate market sentiments were extremely bearish in early 2009 as global economies strived to recover from the unprecedented global financial crisis. Market sentiments improved sharply in the second and third quarters of the year as the global financial situation stabilised and economies worldwide showed signs of recovery.
Against this backdrop, CapitaLand’s financial strength and low level of completed stock enabled its Singapore residential business to maintain a high degree of operational flexibility. In 2009, it achieved a positive set of earnings underpinned by contributions from strong sales achieved in previous years.
TIMING LAUNCHES AND REDEFINING RESIDENTIAL DESIGN In 2009, CapitaLand turned in a strong sales performance, selling close to 600 homes with a total sales value of approximately S$1.2 billion. The average value achieved for each home sold is approximately S$2 million.
CapitaLand released new units for sale at The Wharf Residence during the year. The 999-year leasehold development, comprising 173 contemporary apartments and 13 conserved Vintage Collection homes, is about 93% sold. The overwhelming response was due to the project’s excellent location in the River Valley Conservation Area.
During the year, The Interlace condominium, located on the former Gillman Heights Condominium site at Alexandra Road, was launched. About 80% of the phase one launch of 360 homes have been sold. Designed by
the Office for Metropolitan Architecture, the condominium will have 1,040 homes. Its unconventional design, comprising interlocking blocks stacked in a hexagonal arrangement, redefined the standard typography of residential developments in Singapore.
In mid-December, CapitaLand started preview sales for Urban Suites, a 165-unit condominium located within the Cairnhill area, in Singapore’s prime Orchard Road shopping district. Phase one units were sold to buyers who were prepared to purchase more than one unit. To date, CapitaLand has sold about 90% of the project.
In 2009, CapitaLand handed the keys for over 1,000 homes at three developments – RiverGate, Scotts HighPark and The Metropolitan Condominium – to their owners. It also fully redeemed two Floating Rate Notes issues, worth a total of US$823 million (S$1.2 billion), backed by the receivables of these three residential developments.
CapitaLand garnered a number of accolades for its developments during the year. At the Building and Construction Authority (BCA) Awards, The Wharf Residence and Urban Suites were conferred Green Mark Gold awards while Citylights clinched a Construction Excellence Award. Citylights was also awarded the Silver Award (Residential Projects Implementation) by the Landscape Industry Association of Singapore.
LOOKING AHEAD Going forward, Singapore’s economic prospects are expected to improve, coupled with rising business and consumer confidence. The opening of the two integrated resorts in 2010 is widely anticipated to benefit the Singapore residential market, with prime projects attracting strong interest from both local and foreign buyers.
CapitaLand’s strategy is to focus on well-located projects in the mid to high-end segments of the market and to time launches according to market conditions. It will continue to benefit from progressive profit recognition of strong sales achieved in previous years.
CAPITALAND RESIDENTIAL SINGAPORE
TAN SEO LING VP, Finance, CapitaLand Residential Singapore Pte Ltd
COLIN WONG SVP, Marketing & Sales, CapitaLand Residential Singapore Pte Ltd
ONG SIM LIAN SVP, Design Management, CapitaLand Residential Singapore Pte Ltd
PATRICIA CHIA CEO, CapitaLand Residential Singapore Pte Ltd
LEE YEW KWUNG SVP, Project Development & Management, CapitaLand Residential Singapore Pte Ltd
ANSON LIM VP, Investment, CapitaLand Residential Singapore Pte Ltd
from left to right
2.8 MILLION-SQUARE-METRE
PROPERTY PORTFOLIO IN
KEY CITIES
The Pines, Beijing, China
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55
In 2009, CapitaLand celebrated the 15th anniversary of its entry into China. Today, CapitaLand China is a successful model of CapitaLand Group’s efforts to transfer its real estate knowledge internationally.
One of the top foreign developers in China, CapitaLand’s presence spans the residential, commercial, integrated development, financial, retail and serviced residence sectors. Its multi-region and multi-sector business model continued to provide a diversified earnings base despite the global financial crisis.
STRONG OPERATIONAL PERFORMANCE Transaction volumes for home sales picked up significantly in the second half of the year. Home prices rose in tandem, supported by strong fundamentals, improvement in buyer confidence, and a low level of supply in China’s key cities. In 2009, CapitaLand China sold close to 2,400 homes in Beijing, Shanghai, Hangzhou, Ningbo, Foshan and Chengdu, with total sales value of approximately RMB5 billion (S$1 billion). New launches included The Loft in Chengdu and three projects in Foshan, namely Beau Residences, Riverside Ville and The Riviera.
During the year, CapitaLand opened Raffles City Beijing, which comprises a Grade A office tower, retail mall and Ascott Raffles City Beijing. It also extended the ‘Raffles City’ brand to Ningbo. Raffles City Ningbo will be an office, dining, shopping and lifestyle destination. Construction has started on Raffles City Ningbo, and planning and design is underway for Raffles City Hangzhou.
POSITIONING FOR THE NExT PHASE OF GROWTH Paving the way for the Group’s next phase of growth in China, CapitaLand formed the CapitaLand China Executive Committee to better manage and synchronise
its investments, operations, branding and resources there. To support its expansion plans in China, CapitaLand signed strategic co-operation agreements with Bank of China and Industrial and Commercial Bank of China for a credit limit allocation of up to RMB25 billion (S$5 billion) and deployed an additional S$500 million to grow the residential business.
In conjunction with its 15th anniversary celebrations in China, CapitaLand unveiled a new master brand for its operations in the country. It also pledged to build another six CapitaLand Hope Schools, bringing the total in China to 15.
DOUBLING THE DEVELOPMENT PIPELINE In early 2010, CapitaLand signed an agreement to acquire Orient Overseas Developments Limited for a purchase consideration of US$2.2 billion (approximately S$3.1 billion). With this, CapitaLand China acquired a real estate business with a portfolio of seven prime sites located in Shanghai, Kunshan and Tianjin. The acquisition doubled CapitaLand’s China property portfolio from 1.4 million sqm to 2.8 million sqm and increased the Group’s assets in China to approximately 36% of total assets. With the newly acquired sites, there will be opportunities to build homes, offices, shopping malls and serviced residences.
LOOKING AHEAD CapitaLand remains confident of China’s long-term growth potential and the country continues to be one of its key markets for growth. The Group plans to launch an average of 3,000 homes annually.
Over the last 15 years, CapitaLand has steadily built a long-term business in China by re-investing its profits and developing a talent base that is more than 95% local. This places the company in a strong position to further strengthen its presence in China.
CAPITALAND CHINA
HOON TECK MING Regional GM, Southwest China, CapitaLand China Holdings Pte Ltd
LUCAS LOH Chief Investment Officer and Regional GM, South China, CapitaLand China Holdings Pte Ltd
CHAN BOON SENG Chief Development Officer and Regional GM, East China, CapitaLand China Holdings Pte Ltd
JASON LEOW CEO, CapitaLand China Holdings Pte Ltd
STEVE GONG Chief Financial Officer, CapitaLand China Holdings Pte Ltd
HAN WEI Regional Deputy GM, North China, CapitaLand China Holdings Pte Ltd
from left to right
OWN/MANAGE OVER
5.7 MILLION SQUARE FEET
OF COMMERCIAL AND
INDUSTRIAL SPACE
IN SINGAPORE
Capital Tower, Singapore
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57
from left to centre
JESSIE YONG SVP, Marketing & Leasing, CapitaLand Commercial Limited
WONG JEN LAI SVP, Investment & Asset Management, CapitaLand Commercial Limited
CHEN LIAN PANG CEO (Southeast Asia), CapitaLand Commercial Limited
CapitaLand is one of the largest owners/managers of office properties in the Singapore Downtown Core. It owns/manages commercial space directly, through joint ventures or through CapitaCommercial Trust (CCT). It also owns several industrial properties.
Overseas, it owns/manages commercial and residential projects in the key growth market of Vietnam as well as in Thailand, Malaysia, India, Japan and the United Kingdom.
RESILIENT PORTFOLIO CapitaLand’s office portfolio in Singapore, mainly through CCT, remained resilient despite challenging market conditions. CCT’s overall portfolio and Grade A office properties achieved above-market committed occupancy rates of 94.8% and 98.7% respectively, as at end-2009.
In 2009, CapitaLand successfully divested three non-core assets despite the downturn, gaining a total of about S$22 million. Two industrial properties in Singapore – Kallang Avenue Industrial Centre and Kallang Bahru Complex – were sold for S$68 million. In Malaysia, it divested its 30% stake in Menara Citibank, a 50-storey office building, for RM147 million (S$59.9 million). The sales proceeds will be recycled to reconstitute its commercial portfolio.
FOCUS ON VIETNAM HIGH-GROWTH MARKET For Vietnam, CapitaLand deployed S$299 million to strengthen its presence in the real estate sector in the Group’s fourth and newest core market.
It currently has a development pipeline of four residential projects with over 4,000 quality apartments in Ho Chi Minh City and Hanoi. CapitaLand will continue to leverage on the country’s strong economic growth, rapid urbanisation and the increasing affluence of its
growing population. It targets to grow its business in Vietnam from the current 1% to 10% of total assets over the next three to five years.
In Hanoi, CapitaLand received positive buyer response during the preview sales of Mulberry Lane, located in Ha Dong District in the Mo Lao New Urban Area. About 82% of 549 units released were sold. CapitaLand holds a 70% stake in the approximately 1,500-unit project while its Vietnamese partner, Hoang Thanh, holds the remaining 30%. Following the success of Mulberry Lane, the partners have agreed to jointly develop a second residential project on a 14,000-square metre site in Hanoi.
OTHER MARKETS CapitaLand’s 40%-owned joint venture company in Thailand, TCC Capital Land, successfully launched Villa Asoke, a 525-unit condominium located in the heart of Bangkok City. About 60% has been booked. It also completed construction of The Emporio Place condominium in Bangkok.
In Malaysia, CapitaLand’s commercial investments are made mainly through the Malaysia Commercial Development Fund and Quill Capita Trust, a commercial real estate investment trust which owns 10 quality properties. In India, construction at its maiden residential project, The Orchard Residency, is over 50% completed while planning for an IT park/office complex in Navi Mumbai is underway. In Japan, construction is ongoing for an office-cum-condominium project located in Tokyo’s prime Shinjuku district.
LOOKING AHEAD In Singapore, business confidence has started to improve with office rentals showing signs of stabilising. The steady recovery of the economy will drive continual growth in office demand. CapitaLand will continue efforts to enhance its portfolio and redeploy capital to its core office business in Asia. It will also focus on Vietnam, which is a new, high-growth market for the Group.
CAPITALAND COMMERCIAL
from centre to right
EE CHEE HONG CEO, CapitaLand Commercial Limited
CHAN SAY YEONG MD (Malaysia), CapitaLand Commercial Limited
HAZEL CHEW SVP, Finance & Corporate Services, CapitaLand Commercial Limited
POON HIN KONG SVP, Design & Development, CapitaLand Commercial Limited
86 PROPERTIES ACROSS
48 CITIES WITH 66.6 MILLION
SQUARE FEET OF RETAIL SPACE
ION Orchard, Singapore
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from left to centre
GOH SOON YONG CEO, China, CapitaMalls Asia Limited
TOH KIM SAI Deputy Chief Development Officer, CapitaMalls Asia Limited
KEVIN CHEE Country Head, India, CapitaMalls Asia Limited
SHARON LIM Country Head, Malaysia, CapitaMalls Asia Limited
SIMON HO CEO, CapitaMall Trust Management Limited, Singapore
In 2009, CapitaLand’s integrated shopping mall business, CapitaMalls Asia (CMA) continued to strengthen its position as a leading shopping mall developer, owner and manager in Asia. As at end-2009, CMA had 86 properties across 48 cities in Singapore, China, Malaysia, Japan and India, with a total property value of approximately S$20.4 billion and gross floor area (GFA) of about 66.6 million square feet (sq ft). As at end-2009, 60 malls are operational while another 26 will open over the next few years.
ASIA’S LEADING SHOPPING MALL DEVELOPER, OWNER AND MANAGER In 2009, CMA successfully opened ION Orchard in Singapore. The 640,000 sq ft landmark retail development in the heart of Orchard Road has become the “must visit” shopping destination. It is more than 97% leased, and receives over 4.5 million visitors monthly. About 86% of the 175 apartments in The Orchard Residences – the residential component above ION Orchard – have also been sold for more than S$1.2 billion to-date.
In China, CMA was named one of the country’s Top 10 Most Influential Retail Real Estate Companies. As at end-2009, CMA had 50 malls across 33 cities, with a total GFA of 43.4 million sq ft. Of these, 33 malls were operational, including nine which opened in 2009.
In India, CMA opened its first shopping mall, Forum Value Mall in Bangalore, with about 94% committed leases. In Malaysia, CMA enhanced Mines Shopping Fair in Selangor and raised its occupancy from about 83% at acquisition to about 98% as at end-2009. For Japan, the reconfiguration of Chitose Mall in Hokkaido was completed during the year.
CMA was listed in November to accelerate the growth of the business. The S$2.8 billion initial public offering (IPO) was Singapore’s largest in 16 years. As at end- 2009, CMA’s market capitalisation was approximately S$9.9 billion, making it one of the 20 largest companies listed on the Singapore Exchange.
With the corporate reorganisation in November 2009 for the IPO, CMA acquired interests in the managers of CapitaMall Trust (CMT) and CapitaRetail China Trust (CRCT), as well as the managers of the six private real estate funds.
CMT is Singapore’s first and largest real estate investment trust (REIT) by asset size and market capitalisation. As at end-2009, CMT’s total asset size was S$7.4 billion, comprising 14 retail properties strategically located in Singapore’s suburban areas and downtown core. CMT’s operational malls maintain close to full occupancy and enjoy high monthly shopper traffic. CMA has an effective 29.9% interest in CMT.
CRCT is Singapore’s first China shopping mall REIT. As at end-2009, CRCT’s total asset size was S$1.2 billion, comprising eight quality shopping malls in Beijing, Shanghai, Anhui Province, Henan Province and Inner Mongolia. CMA has an effective 27.1% interest in CRCT.
LOOKING AHEAD Going forward, CMA will capitalise on Asia’s high consumption growth. It will actively strengthen its presence in the key markets of Singapore, China and Malaysia, where there are opportunities for reconstituting and redevelopment of properties, and acquisitions.
CAPITALAND RETAIL
from centre to right
LIM BENG CHEE CEO, CapitaMalls Asia Limited
NG KOK SIONG Chief Financial Officer, CapitaMalls Asia Limited
JESLINE GOH Deputy Country Head, Singapore, CapitaMalls Asia Limited
TONY TAN Deputy Chief Financial Officer, CapitaMalls Asia Limited
SIMON YONG Chief Development Officer, CapitaMalls Asia Limited
KEK CHEE HOW Country Head, Japan, CapitaMalls Asia Limited
OVER 25,000 APARTMENT
UNITS IN 67 CITIES AND
22 COUNTRIES
Ascott Raffl es City Beijing, China
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In 2009, CapitaLand’s serviced residence business unit, The Ascott Limited (Ascott), celebrated 25 successful years in the business. In 1984, Ascott pioneered Asia Pacific’s first international-class serviced residence while its Citadines brand started operations in Europe. Since then, Ascott has grown to become the world’s largest international serviced residence owner-operator with over 25,000 apartment units in 67 cities and 22 countries across the Asia Pacific, Europe and the Gulf region.
CONTINUED GLOBAL ExPANSION During the year, Ascott continued to strengthen its leadership by expanding globally with its three brands – Ascott, Somerset and Citadines – both in the cities where it currently operates and in other cities.
With its excellent international branding and strong hospitality capabilities, Ascott clinched seven contracts to manage over 1,000 apartment units across six cities in the Asia Pacific and Europe. Through these management contracts, Ascott expanded its presence in several Asian cities. Ascott strengthened its lead in China with new properties in Shanghai and Xi’an; entered Vietnam’s third largest city, Hai Phong; and boosted its presence in Malaysia with properties in Kuala Lumpur and in Kuching. In Europe, Ascott entered Fontainebleau in France through management contracts for two residences owned by INSEAD, a leading graduate business school.
2009 also saw Ascott opening 10 new serviced residences with 1,400 apartment units across nine cities in the Asia Pacific and Europe. These included Ascott’s first
property in five new cities – Chongqing and Shenzhen in China, Fontainebleau in France, Tbilisi in Georgia and Munich in Germany – and its first Citadines-branded property in Japan and Singapore. Ascott also opened its second and fifth serviced residence in China’s Tianjin and Beijing respectively.
ENHANCED COMPETITIVE ADVANTAGE Ascott continued to enhance its hospitality management systems and embarked on a refurbishment programme for its properties in Australia, Indonesia, Malaysia, Singapore, Vietnam, France and the United Kingdom to ride on the expected increase in demand as the economy recovers in 2010. This will strengthen Ascott’s leadership position and set it further apart from its competitors. Ascott also continued to actively manage its portfolio of assets. It monetised assets in countries including China and Vietnam with total proceeds of S$160 million for reinvestment in higher-yielding assets.
As Ascott expanded globally and enhanced its competitive edge, it garnered over 20 prestigious awards for its strong brand reputation, outstanding service and management excellence in 2009. These included “Best Serviced Residence Brand” at the Business Traveller Asia-Pacific Awards 2009 and “Best Serviced Residence Operator” at the TTG Travel Awards 2009.
LOOKING AHEAD CapitaLand has deployed additional funds to expand Ascott’s business. As part of Ascott’s next phase of growth, it will actively secure more management contracts, source for investment opportunities and upgrade its hospitality capabilities and properties. Ascott expects to open about 6,000 apartment units in 29 new properties worldwide by 2013. These include over 2,700 apartment units in 13 new properties which will open in 2010.
CAPITALAND SERVICED RESIDENCES
from left to centre
from centre to right
ALFRED ONG Managing Director, Southeast Asia & Australia, The Ascott Limited
WONG HOOE WAI Chief Development Officer, The Ascott Limited
TAN CHOON KWANG Managing Director, Europe, The Ascott Limited
CHONG KEE HIONG Deputy CEO, Finance & Investment, The Ascott Limited; CEO, Ascott Residence Trust Management Limited
LIM MING YAN CEO, The Ascott Limited; Deputy Chairman, CapitaLand China Executive Committee
TONY SOH Chief Corporate Officer, The Ascott Limited
YEONG LAI MENG Senior Vice President, Finance, The Ascott Limited
LEE CHEE KOON Managing Director, North Asia, The Ascott Limited
RONALD TAY Chief Investment Officer, The Ascott Limited
RIHAN HEIGHTS, PHASE 1 OF
ARZANAH – 868 RESIDENTIAL UNITS
UNDER CONSTRUCTION
Rihan Heights, Phase 1 of Arzanah, Abu Dhabi, United Arab Emirates
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CapitaLand pursues integrated developments with leisure, entertainment and conventions as their key themes. The Group’s competitive edge is its ability to integrate these themes with real estate sectors like residential, retail and serviced residences. CapitaLand currently has eight integrated developments in Singapore, Bahrain, China and the United Arab Emirates (UAE).
GULF COOPERATION COUNCIL (GCC) REGION In the oil-rich UAE, CapitaLand’s landmark project is Arzanah, a unique integrated development surrounding the iconic Zayed Sports City in Abu Dhabi. Capitala, a joint venture company between Mubadala Development Company and CapitaLand, was formed to develop Arzanah. The flagship US$5-6 billion development will be developed in phases on a sprawling 1.4 million square metre site. It will offer quality residences with leisure, sports and retail amenities and a concept focusing on an active urban lifestyle for its residents and community at large. Its master plan was designed by award-winning firms, Sasaki Associates and SMC Alsop. Main construction work on Rihan Heights – the first phase of Arzanah – is about 21% completed. The residential project is on track for completion by the first half of 2011.
In Bahrain, CapitaLand is managing Raffles City Bahrain, which is owned by Raffles City Bahrain Fund, a Shari’ah-compliant private equity fund. Preliminary redesign work on the integrated residential, retail and serviced residence development has been completed and in-principle approvals have been received from the local planning authorities. Construction of substructure works has also been substantially completed.
In 2009, the outlook for the GCC region turned pessimistic. Having weathered previous crises, CapitaLand decided to maintain a cautious stance early in the year, pacing the progress of its development projects there with market conditions. In the fourth quarter of 2009, global markets were rocked by the unexpected news of Dubai World seeking a standstill on its debt payments. While the subsequent bailout by Abu Dhabi has calmed global markets, the real estate markets in Dubai and Abu Dhabi continue to be depressed. Not surprisingly, Bahrain has also been affected by the overall negative sentiment.
In view of the continued uncertainty, CapitaLand will maintain flexibility in moving forward its projects in the GCC region, reviewing the various options in accordance with market conditions.
ASIA Raffles City in Singapore is an iconic landmark with retail, office, convention and hotel components. In China, there are currently five Raffles City integrated developments in Shanghai, Beijing, Chengdu, Hangzhou and Ningbo.
In Macau, CapitaLand owns a 20% interest in Macao Studio City, Asia’s first integrated leisure resort combining studios, retail, entertainment and hotels. In Kazakhstan, the Group has a 70% stake in a residential-cum-serviced residence site in Almaty, a major city. Planning for these two integrated development projects is underway.
LOOKING AHEAD CapitaLand will actively expand its portfolio of integrated developments in Asia under the Raffles City brand while adopting a prudent approach for its existing integrated development projects in the GCC region, Macau and Kazakhstan.
CAPITALAND INTEGRATED DEVELOPMENTS
KU WEI SIONG SVP, CapitaLand GCC Holdings Pte. Ltd.
WONG HEANG FINE CEO, CapitaLand ILEC Pte. Ltd. and CapitaLand GCC Holdings Pte. Ltd.
YIP HOONG MUN Deputy CEO, CapitaLand ILEC Pte. Ltd.
from left to right
LEADING ASIA-BASED REIT
AND FUND MANAGER
– ORIGINATED FIVE REITS
AND 19 REAL ESTATE
PRIVATE EQUITY FUNDS
Raffl es City Hangzhou, China
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CapitaLand’s real estate fund management and financial advisory services arm, CapitaLand Financial (CFL), has established a strong track record in real estate financial services as the leading Asia-based real estate fund and real estate investment trust (REIT) manager. Its capabilities include real estate capital management, structured financing, property fund management and advisory services.
CAPITAL-EFFICIENT STRATEGY REITs and private equity real estate funds are an integral part of the Group’s capital-efficient business model, enabling it to recycle capital and to develop, warehouse and incubate retail, office, residential, serviced residence and integrated developments. CFL has originated a portfolio of five REITs and 19 real estate private equity funds, four of which have successfully matured to date.
STRONG FUND MANAGEMENT CAPABILITIES In 2009, two private equity funds – the US$61 million (S$87.8 million) CapitaLand China Residential Fund and the US$30.5 million (S$42.3 million) Mezzo Capital – successfully matured, exceeding target returns. CapitaLand also divested Raffles City Hangzhou to its US$1 billion (S$1.4 billion) Raffles City China Fund, increasing the fund’s portfolio to four Raffles City-branded developments.
STRONG DISTRIBUTIONS FROM SPONSORED REITS Despite the global downturn, CapitaLand’s five sponsored REITs performed well. The REIT managers continued to build resilience in their portfolios through active asset enhancements, proactive leasing strategies and reconstitution of their portfolios. The REITs achieved solid distribution growth. Together they contributed a total distribution of S$167.8 million to the Group in 2009, an increase of 28%.
CapitaCommercial Trust (CCT) is Singapore’s first and largest commercial REIT by asset size and market capitalisation. As at 31 December 2009, CCT’s total asset size is S$6.1 billion, comprising 11 prime commercial properties in Singapore. CapitaLand currently owns a 31.6% interest in CCT. In a challenging market, CCT successfully raised S$1.6 billion which enhanced its financial flexibility and strengthened its balance sheet.
Ascott Residence Trust (Ascott Reit), the world’s first Pan-Asian serviced residence REIT, has 38 properties with 3,644 units across seven countries, and a portfolio value of S$1.56 billion as at end-2009. Its geographical diversification and extended stay business model continued to add resilience to its performance while prudent capital and risk management allowed it to weather the credit crisis with a strong balance sheet. With available debt capacity, Ascott Reit acquired Somerset West Lake, Hanoi in Vietnam. CapitaLand has a 47.5% stake in Ascott Reit.
Quill Capita Trust (QCT) is CapitaLand’s first overseas REIT which was listed on Bursa Malaysia’s Main Board in 2007. CapitaLand has an effective stake of 9.5% in QCT through CCT. As at end-2009, QCT had an asset base of over RM818 million (S$333 million), comprising 10 quality commercial properties in Malaysia. QCT’s tenants include subsidiaries of multinational companies.
In November 2009, with the listing of CapitaMalls Asia (CMA), the managers of five retail private equity funds and two retail REITs, CapitaMall Trust and CapitaRetail China Trust, were transferred to CMA.
LOOKING AHEAD CapitaLand will continue to strengthen its fund management business by growing its assets under management through accretive acquisitions and asset enhancements. With recovery in the global economy, investor sentiment has improved. CapitaLand will originate new funds and real estate financial products, with a focus in Asia, to tap on the renewed investor appetite.
CHONG KEE HIONG CEO, Ascott Residence Trust Management Limited
ANG SIEW YAN Deputy CEO, CapitaLand Financial Limited
LUI CHONG CHEE CEO, CapitaLand Financial Limited
JASON LEOW CEO, CapitaLand Financial Limited (China Development)
LYNETTE LEONG CEO, CapitaCommercial Trust Management Limited
CHAN SAY YEONG CEO, Quill Capita Management Sdn Bhd
CAPITALAND FINANCIAL SERVICES
from left to right
RESIDENTIAL DEVELOPMENT
PIPELINE OF 23,200 LOTS AND
INVESTMENT PROPERTY PORTFOLIO
VALUE OF APPROXIMATELY
A$2.0 BILLION (S$2.5 BILLION)
North, Sydney, Australia
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CapitaLand’s listed subsidiary Australand has been involved in property development for approximately 85 years. Its activities span Australia and cover the development of residential land, housing and apartments; development of and investment in income-producing commercial and industrial properties; and property management. As at end-2009, Australand had a staff strength of close to 500 people, and a market capitalisation of approximately A$1.3 billion (S$1.6 billion).
STRONG OPERATING PERFORMANCE Australand achieved a solid result with net operating profit after tax of A$120 million (S$151 million), with contributions from its three key operating divisions, namely Residential, Commercial & Industrial and Investment Property. Australand continued to focus on prudent capital management to ensure a strong capital and liquidity position throughout 2009.
The residential market benefited from the Australian government’s first-home owner boost. Interest from second and third time buyers and investors rose towards the end of the year on the back of improved consumer sentiment and economic outlook. In 2009, Australand sold over 1,550 residential lots, houses and apartments valued at A$588 million (S$739 million). It also secured a A$300 million (S$340.5 million) urban renewal project in Carlton, Victoria, together with a joint venture partner. The 7.5-hectare project, with over 500 homes, will be the largest and one of the most environmentally sustainable public housing redevelopments in Victoria. Australand has a residential development pipeline comprising 23,200 lots under management across land communities, housing and apartment developments.
The Commercial & Industrial division maintained its leadership position in the industrial sector due to its diversified operating platform. Over 104,000 sqm of commercial and industrial projects were delivered.
As at end-2009, the Investment Property division had a total portfolio value of approximately A$2.0 billion (S$2.5 billion) comprising 70 properties and a total lettable area of 1.2 million sqm. The portfolio continued to deliver secure, predictable earnings. Occupancy remained strong at 99.4% with a weighted average lease term of approximately six years. In December 2009, Australand Property Trust entered into an unconditional exchange of contracts for the sale of the Coles Regional Distribution Centre at Goulburn, New South Wales, for A$64 million (S$80.5 million) as part of its strategy to recycle capital and maintain strong portfolio metrics.
CAPITALISING ON THE STRENGTHENING ECONOMY Australand continued to actively manage its capital position during the year. It established three Bilateral Debt Facilities with domestic banks totalling A$350 million (S$361.8 million) and new lending covenants for its A$950 million (S$982 million) Multi-Option Facility. Australand also successfully completed a A$475 million (S$556.7 million) Entitlement Offer. The equity raising strengthened Australand’s liquidity position and funding capacity to take advantage of opportunities that emerge.
GOING FORWARD Australand has emerged from 2009 in sound financial shape. With its improved liquidity position and strong underlying business platform underpinned by recurring earnings, Australand is well-positioned to take advantage of the improving economic conditions in the commercial, industrial and residential markets.
AUSTRALAND PROPERTY GROUP
from left to centre
KIERAN PRYKE Chief Financial Officer, Australand Property Group (from 1 March 2010)
SEAN MCMAHON Executive General Manager (Commercial & Industrial), Australand Property Group
ROD FEHRING Executive General Manager (Residential), Australand Property Group (from 22 March 2010)
from centre to right
BOB JOHNSTON Managing Director & CEO, Australand Property Group
CHRIS WARRELL Executive General Manager (Human Resources), Australand Property Group
MICHAEL NEWSOM General Counsel, Australand Property Group
BEV BOOKER Company Secretary, Australand Property Group
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AWARDS AND ACCOLADES
CORPORATE AWARDS
CAPITALAND
• Best Developer Globally (2nd) Euromoney Real Estate Awards 2009
• Best Mixed-Use Developer Globally (2nd) Euromoney Real Estate Awards 2009
• Best Developer in Asia (2nd) Euromoney Real Estate Awards 2009
• Best Retail Developer in Asia Euromoney Real Estate Awards 2009
• Best Developer in China (2nd) Euromoney Real Estate Awards 2009
• Best Retail Developer in China Euromoney Real Estate Awards 2009
• Best Developer in Singapore Euromoney Real Estate Awards 2009
• Best Residential Developer in Singapore Euromoney Real Estate Awards 2009
• Best Mixed-Use Developer in Singapore Euromoney Real Estate Awards 2009
• Best Retail Developer in Singapore Euromoney Real Estate Awards 2009
• Grand Prix for Best Overall Investor Relations (Large Cap) (Highly Commended) IR Magazine South East Asia Awards 2009
• Olivier Lim – Best Investor Relations by a CFO IR Magazine South East Asia Awards 2009
• Olivier Lim – Best CFO (Singapore Category) (2nd) FinanceAsia Asia’s Best Companies Poll 2009
• Harold Woo – Best Investor Relations Professional (Large Cap) IR Magazine South East Asia Awards 2009
• Harold Woo – Best Investor Relations Professional Asia-Pacifi c IR Magazine South East Asia Awards 2009
• Jonathan Kuah – Best Investor Relations Offi cer in Singapore Asiamoney Corporate Governance Poll 2009
• Overall Best Company in Singapore for Corporate Governance Asiamoney Corporate Governance Poll 2009
• Best for Disclosure and Transparency in Singapore Asiamoney Corporate Governance Poll 2009
• Most Transparent Company (Property Category) Securities Investors Association (Singapore) Investors’ Choice Awards 2009
• Built Environment Leadership Award (Gold Class) Building and Construction Authority (BCA) Awards 2009
• Corporate Citizen Award for Philanthropy National Volunteerism & Philanthropy Awards 2009
• CapitaLand Muchuan Green Hope School – Best Developer (Corporate Social Responsibility) 2009 Cityscape Awards for Real Estate in Asia
• Watermark Award 2009 PUB
• Wong Hooe Wai – EcoFriend Award 2009 (Private Sector) National Environment Agency
CAPITALAND CHINA HOLDINGS
• Most Outstanding International Brand China Real Estate Chamber of All-China Federation of Industry & Commerce and ihome Magazine 2008-2009 Real Estate Annual Awards
• 2009 Outstanding Corporate Citizen of China China Committee of Corporate Citizenship
• Outstanding Charitable Contributions to China China Charity Foundation 15 Years Founding Ceremony
• Most Creative Idea for Earth Hour WWF (China)
• Progressive Charitable Enterprise Jiangbei District People's Government of Ningbo
In 2009, CapitaLand Group and its properties clinched over 100 awards and accolades. Some of the accolades are listed below.
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CAPITAMALLS ASIA
• China’s Top 10 Most Infl uential Retail Real Estate Company Award 2009 China Commercial Real Estate Association and Ministry of Commerce, Circulation Industry Promotion Center
• Wal-Mart Partnership Award 2009
• Gold Award (Marketing: Community Relations Category – Corporate, Company or Joint Centre) International Council of Shopping Centers 2009 Asia Shopping Centre Awards
CAPITALAND (VIETNAM)
HOLDINGS
• Golden Dragon Award 2009 (High Quality Service) Vietnam Economic Times
• Golden Dragon Award 2008 (High Quality Service) Vietnam Economic Times
THE ASCOTT LIMITED
• Ascott – Best Serviced Apartment Company (1st) Business Traveller UK Awards 2009
• Citadines – Best Serviced Apartment Company (2nd) Business Traveller UK Awards 2009
• Best Serviced Residence Brand Business Traveller Asia-Pacifi c Awards 2009
• Best Serviced Residence Brand in China Business Traveller China Awards 2009
• Best Serviced Residence Operator TTG Asia Media’s TTG Travel Awards 2009
• Best Serviced Residence Operator in China TTG Asia Media’s TTG China Travel Awards 2009
• Golden Dragon Award 2009 (Best Service) Vietnam Economic Times
• Golden Dragon Award 2008 (Best Serviced Residence Brand) Vietnam Economic Times
• Certifi cate of Excellence Vietnam Economic Times’ The Guide Awards 2008-2009
• Top Serviced Apartment Vendor Human Resources Magazine’s HR Vendors of the Year 2009
TCC CAPITAL LAND
• Best Developer Property Report Thailand’s Thailand Property Awards 2009
• International Arch of Europe Award (Platinum Category) Business Initiative Directions’ 35th BID International Arch of Europe Convention 2009
CAPITACOMMERCIAL TRUST
• Best Mid-cap Company FinanceAsia Asia’s Best Managed Companies Poll 2009
CAPITAMALL TRUST
• Best Annual Report, Gold Award (REITs & Business Trusts) Singapore Corporate Awards 2009
CAPITARETAIL CHINA TRUST
• Best Annual Report, Bronze Award (REITs & Business Trusts) Singapore Corporate Awards 2009
RESIDENTIAL DEVELOPMENTS
SINGAPORE
Citylights
• Construction Excellence Award 2009 BCA Awards 2009
• Silver Award (Implementation Projects, Residential) Landscape Industry Association of Singapore Awards of Excellence 2009
The Wharf Residence
• Green Mark Gold BCA Awards 2009
Urban Suites
• Green Mark Gold BCA Awards 2009
CHINA
La Capitale
• Outstanding Regional Project China Real Estate Chamber of All-China Federation of Industry & Commerce and ihome Magazine 2008-2009 Real Estate Annual Awards
The Loft Chengdu
• Top 10 International Residences in Chengdu Chengdu Housing and Land Administrative Bureau and Sichuan Provincial People’s Association for Friendship with Foreign Countries
The Pines
• Outstanding Regional Project China Real Estate Chamber of All-China Federation of Industry & Commerce and ihome Magazine 2008-2009 Real Estate Annual Awards
The Riviera
• 2009 Top 10 High-end Residential Projects in Guangzhou and Foshan Guangzhou & Foshan Real Estate Association and Media in Guangzhou and Foshan
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THAILAND
The Royal Residence
• Best Asia Pacifi c Development Website CNBC Asia Pacifi c Residential Property Awards 2009
COMMERCIAL DEVELOPMENTS
SINGAPORE
Capital Tower
• Green Mark Gold BCA Awards 2009
Six Battery Road
• Fire Safety Excellence Award National Fire and Civil Emergency Preparedness Council and Singapore Civil Defence Force
RETAIL DEVELOPMENTS
SINGAPORE
ION Orchard
• MIPIM Asia Awards 2009 (Shopping Centre Category)
Sembawang Shopping Centre
• Green Mark Gold BCA Awards 2009
The Atrium @ Orchard
• Water Effi cient Building Award 2009 PUB
Site at one-north
• Green Mark Gold BCA Awards 2009
CHINA
Wangjing Mall
• Operation Award Mall China Golden Mall Awards 2008-2009
SERVICED RESIDENCES
SINGAPORE
Ascott Raffl es Place Singapore
• 2009 URA Architectural Heritage Award Urban Redevelopment Authority of Singapore
CHINA
Ascott Beijing
• Best Hotel Apartment of China The Centre of Asia Hotel Forum’s 4th China Starlight Award
Ascott Guangzhou
• Best Serviced Residence in Asia-Pacifi c (3rd) Business Traveller Asia-Pacifi c Awards 2009
MALAYSIA
Ascott Kuala Lumpur
• Best Serviced Residence in Asia-Pacifi c (2nd) Business Traveller Asia-Pacifi c Awards 2009
• Best Serviced Residence (Excellence Award) Expatriate Lifestyle Magazine’s The Best of Malaysia Awards 2009
THAILAND
Ascott Sathorn Bangkok
• Best Serviced Residence in Asia-Pacifi c (1st) Business Traveller Asia-Pacifi c Awards 2009
INTEGRATED DEVELOPMENTS
SINGAPORE
Raffl es City Singapore
• Silver Award (Development and Design: Renovation or Expansion of an Existing Project) International Council of Shopping Centers 2009 Asia Shopping Centre Awards
• Water Effi cient Building Award 2009 PUB
AWARDS AND ACCOLADES
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PERFORMANCE REVIEW
PERFORMANCE OVERVIEW
2009 was a diffi cult year as global economies were badly affected by the fi nancial crisis. The tight credit environment, coupled with pressure on capital values, had a signifi cant impact on the global real estate industry. Despite the challenging business environment, CapitaLand Group posted a profi t after tax and minority interests (PATMI) of S$1.05 billion for FY2009. This is the fourth consecutive year that the Group’s profi t has crossed the S$1 billion mark.
Besides the S$1 billion profi t, the more signifi cant achievement for the Group is that it emerged from this extremely diffi cult year even stronger than before. During the year, we increased our cash position from S$4.2 billion to S$8.7 billion, reduced our net debt-to- equity ratio from 0.47 to 0.09 and increased our equity base from S$12.0 billion to S$16.9 billion. In addition to improving our fi nancial fl exibility, we also improved the medium-term potential of our businesses during the year, most notably by creating and listing CapitaMalls Asia Limited and providing it with the fi nancial fl exibility and direct access to markets to accelerate its growth. We have deployed additional capital to our businesses in China and Vietnam and the serviced residence and integrated shopping mall businesses to be ready for our next phase of growth. Our recent acquisition of S$3.1 billion worth of prime assets in China which was completed in February 2010 is part of our strategy to grow China to 45% of the Group’s assets. We will also continue to develop our business in Vietnam, the Group’s new growth market, by acquiring more land parcels, launching more projects and building our brand in the country.
In terms of fi nancial performance, FY2009’s PATMI of S$1.05 billion was comparatively lower than FY2008’s PATMI of S$1.26 billion, mainly because the Group took a net revaluation loss and higher impairment loss in 2009. Otherwise, in FY2009, the Group had recognised higher profi ts from development projects mainly from sales secured in earlier years and from higher portfolio gains, mainly from its sale of a 34.5% stake in CapitaMalls Asia Limited in connection with its initial public offering and listing in November 2009. Excluding the revaluation and impairment losses, FY2009’s PATMI would have been higher at S$1.63 billion, representing a 66% increase over FY2008’s PATMI of S$0.98 billion on the same basis.
REVENUE
Revenue for FY2009 rose 7% to S$2.96 billion, fuelled by increased sales of development projects in Singapore, China and Vietnam. The increase was partially offset by
• CapitaLand Residential Singapore • CapitaLand China Holdings • CapitaLand Commercial • CapitaMalls Asia • The Ascott Limited • CapitaLand Financial • Australand
2009 REVENUE BY STRATEGIC BUSINESS UNIT
Total: S$3.0 billion
2008 REVENUE BY STRATEGIC BUSINESS UNIT
Total: S$2.8 billion
2009
2008
22.6%
21.7%
14.4%
4.9%
7.5%
7.6%
11.9%
13.2%
8.2%
5.4%
15.9%
24.6%
6.6%
35.5%
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• Singapore • China (including Hong Kong and Macau) • Australia • Europe • Asia (excluding Singapore and China) • Others
2009 REVENUE BY GEOGRAPHICAL LOCATION
Total: S$3.0 billion
2008 REVENUE BY GEOGRAPHICAL LOCATION
Total: S$2.8 billion
2009
2008
33.1%
26.2%
30.3%
25.6%
10.5%
8.4%
17.1%
5.5%
36.9%
1.2%
3.9% 1.3%
PERFORMANCE REVIEW
lower revenue from Australia and our serviced residence operations. The reduced revenue from Australia was attributable to weaker sales and lower exchange rate while the decrease in revenue from our serviced residence operations was mainly due to a weak performance in Europe.
Geographically, 67% of the Group’s revenue in 2009 came from overseas operations comparable to 70% in 2008. China and Australia continued to be the main contributors. Contribution from Vietnam is increasing as our projects progressively enter the market. The Group will continue with its strategy to grow its presence in the core markets of Singapore, Australia and China, as well as Vietnam, its new growth market.
Revenue from CapitaLand Residential Singapore (CRS), one of the Group’s Strategic Business Units (SBU), accounted for S$673.8 million of the Group’s total revenue, an increase of 68% over 2008. The increase was underpinned by strong sales at The Seafront on Meyer and Latitude.
Revenue from the CapitaLand China Holdings (CCH) SBU increased signifi cantly by 96% to S$647.0 million as our residential projects across all regions in China saw healthy sales during the year.
The CapitaLand Commercial (CCL) SBU registered a 36% decline in revenue mainly due to the absence of revenue recognition for the sale of Wilkie Edge which was completed in late 2008. The decrease was partially mitigated by progressive revenue recognition for The Vista in Vietnam.
Revenue from the CapitaMalls Asia (CMA) SBU increased 11%, mainly due to the contribution from Sungei Wang Plaza in Malaysia, which was acquired in 3Q 2008, and the improved operating performance by the shopping malls in China.
Revenue from The Ascott Limited (Ascott) SBU fell 11% due to a weaker performance from Europe as a result of the economic downturn and the negative exchange impact from the weakening of Euro and Sterling Pound against the Singapore Dollar.
Similarly, revenue for the CapitaLand Financial (CFL) SBU fell 11% compared to 2008 mainly due to lower acquisition fees. However, fund management fees from assets under management for FY2009 were higher.
FY2009 revenue from Australand, CapitaLand’s listed subsidiary in Australia, fell 26% as a result of lower
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sales from development projects as well as a weaker Australian Dollar against the Singapore Dollar.
EARNINGS ANALYSIS
The Group’s earnings before interest and tax (EBIT) for FY2009 were S$1.55 billion. This was 30% lower than FY2008 primarily due to net revaluation losses for the investment properties portfolio compared to net revaluation gains in 2008 and higher impairment losses on residential assets and other investments. The decrease was partially mitigated by higher portfolio gains and profi ts from the development projects.
Geographically, Singapore accounted for 85% of the Group’s total EBIT in FY2009 while overseas EBIT accounted for 15%. In FY2008, overseas EBIT was 60% of total EBIT. The signifi cant gain from the sale of the 34.5% stake in CMA boosted Singapore EBIT while overseas EBIT was mainly affected by lower divestment gains in China and losses in Australia.
EBIT from CRS rose 112% to S$371.7 million on account of higher revenue and margins achieved for projects which had obtained Temporary Occupation Permit. In 2009, Temporary Occupation Permit was obtained for RiverGate, Scotts HighPark, The Metropolitan Condominium and Botannia, a project led by CRS’ joint venture partner.
EBIT from CCH was S$551.2 million or 38% lower than 2008. This was due to lower portfolio gains as the EBIT in FY2008 was boosted by signifi cant gains from the sale of Capital Tower Beijing and the Raffl es City portfolio in China, namely Raffl es City Shanghai, Raffl es City Beijing and Raffl es City Chengdu. Excluding the portfolio gains, FY2009 EBIT for CCH would be higher than 2008 due to improved sales.
CCL recorded a loss of S$497.4 million at the EBIT level for FY2009 due to impairments made for its overseas investments in Japan, Malaysia and India, and a net fair value loss on revaluation of its investment properties.
EBIT from CMA was S$449.1 million, a 50% increase over 2008. The increase came mainly from the recognition of profi ts of The Orchard Residences and higher gain from the divestment of the remaining units of Link REIT, partially offset by lower fair value gains from the revaluation of investment properties.
EBIT from Ascott of S$31.4 million was 76% lower than 2008, mainly due to lower revenue and portfolio gains.
• CapitaLand Residential Singapore • CapitaLand China Holdings • CapitaLand Commercial • CapitaMalls Asia • The Ascott Limited • CapitaLand Financial • Australand • Others
2009 EBIT BY STRATEGIC BUSINESS UNIT
Total: S$1.5 billion
2008 EBIT BY STRATEGIC BUSINESS UNIT
Total: S$2.2 billion
S$ million
S$ million
1,000
800
600
400
200
-200
0
-400
-600
1,000
800
600
400
200
0
372
175
551
883
786
68
(241)
170
98
90
31
132
449
299
(497)
396
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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• Singapore • China (including Hong Kong and Macau) • Australia • Europe • Asia (excluding Singapore and China) • Others
2009 EBIT BY GEOGRAPHICAL LOCATION
Total: S$1.5 billion
2008 EBIT BY GEOGRAPHICAL LOCATION
Total: S$2.2 billion
S$ million
S$ million
1,400
1,000
1,200
800
1,000
600
800
400
600
200
200
400
0
-200
-400
0
1,312
891
680
987
(13)
5
(219)
44
32
68
(243)
218
PERFORMANCE REVIEW
CFL’s EBIT for FY2009 increased marginally by 8% to S$98.0 million due to a reduction in operating expenses and lower impairment loss on investments compared to FY2008.
Australand’s EBIT for FY2009 was a loss of S$240.8 million compared to a profi t in FY2008. The loss was attributable to higher fair value losses from the revaluation of investment properties and higher provision for foreseeable losses for its development projects.
Others comprised the Corporate offi ce and newly start- up businesses. This segment contributed a marked increase in EBIT as it included the gain from the listing of CMA shares. The increase was partially offset by impairment losses made for the goodwill arising from the acquisition of the minority interests of Ascott and an investment in the Gulf Cooperation Council.
DIVIDENDS
The Board of Directors is pleased to propose a fi rst and fi nal dividend of 5.5 cents per share and a special dividend of 5.0 cents per share in respect of the fi nancial year ended 31 December 2009. This amounts to a payout of approximately S$446.0 million based on the number of issued shares as at 31 December 2009. The dividends are subject to the shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For FY2008, a fi rst and fi nal dividend of 5.5 cents per share and a special dividend of 1.5 cents per share were approved and paid. The said dividends of S$297.2 million were paid in May 2009.
ASSETS
The Group’s total assets as at 31 December 2009 stood at S$30.2 billion, an increase of S$5.1 billion, or 20%, from 2008’s total assets of S$25.1 billion. The increase was mainly attributed to the net proceeds from the sale of a 34.5% stake in CMA, new investments made during the year, the strengthening of the Australian dollar against the Singapore dollar and the balance of unutilised proceeds from the S$1.2 billion convertible bonds issued in September 2009. The increase in total assets was partially offset by fair value losses of investment properties and impairment losses on residential assets and other investments which reduced the assets value.
BORROWINGS
As at 31 December 2009, the Group had gross debts totalling S$10.3 billion. At the same time, the Group has a strong cash position of S$8.7 billion. After netting off
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cash and cash equivalents, the Group’s net debt as at 31 December 2009 was S$1.6 billion, much lower than the net debt of S$5.6 billion as at 31 December 2008.
The low debt position was a result of the Group’s prudent capital management strategies. In 2009, while banks were tightening their credit availability, the Group further strengthened its fi nancial capacity with a rights issue which raised S$1.8 billion in proceeds and a S$1.2 billion convertible bond issue. The proceeds from the sale of CMA shares further augmented the Group’s cash position.
As a result, the Group net debt-to-equity ratio improved signifi cantly to 0.09 as at 31 December 2009 from 0.47 as at 31 December 2008.
SHAREHOLDERS’ EQUITY
As at 31 December 2009, CapitaLand Group’s equity attributable to shareholders increased by 25% from S$10.7 billion to S$13.4 billion. The increase arose from the one-for-two rights issue which raised S$1.8 billion, and the retained profi ts made by the Group during the year. The Group’s net tangible assets per share stood at S$3.03 as at 31 December 2009.
• Investment Properties and Properties Under Development
• Interest in Associates and Jointly-Controlled Entities • Development Properties for Sale • Properties, Plant and Equipment • Cash and Cash Equivalents • Other Non-Current Assets • Other Current Assets
• Singapore • China (including Hong Kong and Macau) • Australia • Europe • Asia (excluding Singapore and China) • Others
2009 TOTAL ASSETS BY CATEGORY
Total: S$30.2 billion
2009 TOTAL ASSETS BY
GEOGRAPHICAL LOCATION
Total: S$30.2 billion
2009
2009
16.8%
28.8%
52.3%
11.9%
4.0%
5.9%
20.5%
28.9%
15.2%
2.8%
7.8%
4.9%
0.2%
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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PERFORMANCE REVIEW
TREASURY HIGHLIGHTS 2009 2008
Bank Facilities and Available Funds
Bank facilities available (S$m) 7,530 6,338 Amount utilised for loans (S$m) 4,982 4,685 Available and unutilised (S$m) 2,548 1,653 Cash and fi xed deposit balances (S$m) 8,730 4,228 Unutilised facilities and funds available for use (S$m) 11,278 5,881
Debt Securities Capacity
Debt securities capacity (S$m) 8,338 8,150 Debt securities issue (net of debt securities purchased) (S$m) 5,331 5,144 Unused debt securities capacity (S$m) 3,007 3,006
Interest Cover Ratio
Earnings before net interest, tax, depreciation and amortisation (S$m) 1,714 2,257 Net interest expense (S$m) 377 410 Interest cover ratio (times) 4.54 5.50
Interest Service Ratio
Operating cashfl ow before interest and tax (S$m) 2,074 1,806 Net interest paid (S$m) 451 468 Interest service ratio (times) 4.60 3.86
Secured Debt Ratio
Secured debt (S$m) 2,761 2,413 Percentage of secured debt 27% 25%
Debt Equity Ratio
Gross debt (S$m) 10,313 9,829 Cash and fi xed deposit balances (S$m) 8,730 4,228 Net debt (S$m) 1,583 5,601 Equity (S$m) 16,880 11,988 Net debt equity ratio (times) 0.09 0.47
MANAGEMENT AND SOURCES OF FUNDING
The Group strives to maintain a prudent fi nancial structure and actively reviews its cashfl ow, debt maturity profi le and overall liquidity position on an ongoing basis. The main sources of the Group’s operating cashfl ow are derived from residential sales, fee and rental income. As part of its liquidity management to support its funding requirements, investment needs and its growth plans, suffi cient undrawn banking facilities and capital market programmes are set up so as to facilitate fund raising at opportunistic windows.
Global fi nancial outlook has improved but risks remain. Against this backdrop, the Group has built up strong cash reserves and further strengthened its fi nancial
capacity during the year. The cash balances of the Group grew substantially by 106% from S$4.2 billion as at end-2008 to S$8.7 billion as at end-2009. The higher cash balance is mainly attributed to the unutilised proceeds from the issuance of the S$1.2 billion seven-year convertible bond in September 2009 and the S$2.8 billion proceeds from the listing of CapitaMalls Asia Limited (“CMA”) in November 2009.
The Group’s total gross debt of S$10.3 billion as at end-2009 was 5% higher as compared to S$9.8 billion as at end-2008. Notwithstanding this, the overall net debt decreased substantially by about 72% from S$5.6 billion as at end-2008 to S$1.6 billion as at end-2009 due to the higher cash balance. The Group’s equity increased by 41% to S$16.9 billion as at
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SOURCES OF FUNDING
• Bank and Other Loans • Debt Securities
end-2009 mainly due to CapitaLand Limited’s rights issue of approximately 1.4 billion shares at S$1.30 per share in February 2009 and the increase in minority interests following the Group’s sale of 34.5% stake in CMA. Consequently, the net gearing as at end-2009 improved signifi cantly to 0.09 as compared to 0.47 as at end-2008.
This puts the Group in a strong fi nancial position as it embarks on its next phase of growth. The Group is well-positioned to support its refi nancing needs and fi nance its expansion plans.
Finance cost for the Group was S$453.9 million for the year ended 2009. This was about 12% lower as compared to S$516.3 million for the year ended 2008 as a result of lower average gross debt and lower interest rates in 2009 due to various government stimulus measures worldwide to ease tight credit conditions and stimulate lending.
SOURCES OF FUNDING
As at end-2009, 52% of the Group’s total debt was raised through a diversifi ed mix of the capital market bond issuance and the balance 48% was raised through bank borrowings. The Group continues to strive for a balanced funding structure of debt securities and bank borrowings which provides the Group with a high level of fi nancial fl exibility. During the year, bank loans increased by about S$297 million mainly as a result of higher bank borrowings within the Group.
COMMITMENT OF FUNDING
As at end-2009, the Group was able to achieve 100% of its funding from committed facilities.
The Group also monitors its asset versus liability match and ensures that an appropriate portion of committed funding is put in place to match the planned investments holding periods. Taking into account the Group’s investment strategy and the uncertainty in the global economic recovery outlook, committed fi nancing was secured whenever possible to support its ongoing investments and to ensure that the Group had suffi cient fi nancial capacity to support its operations, pursue acquisitions and investment opportunities.
COMMITMENT OF FUNDING
• Committed • Uncommitted
S$ billion
S$ billion
12
12
10
10
8
8
6
6
4
4
2
2
0
0
13%
2005
2005
10%
2006
2006
2009
2009
3%
2008
2008
6%
2007
2007
29%
71%
87%
33%
67%
90%
42%
58%
94%
53%
47%
97%
52%
48%
100%
$6.7b
$8.1b
$9.9b $9.8b $10.3b
$10.3b $9.8b$9.9b
$8.1b
$6.7b
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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PERFORMANCE REVIEW
MATURITY PROFILE S$ billion % of Debt
Due within 1 year* 1.40 14 Between 1 & 2 years 2.67 26 Between 2 & 3 years 1.76 17 Between 3 & 4 years 0.05 – Between 4 & 5 years 0.69 7 After 5 years 3.74 36 * Includes long term debt with remaining loan life of less than a year to
maturity.
The Group has proactively built up suffi cient cash reserves and credit lines to enable it to meet its short term debt obligations, support its refi nancing needs and pursue opportunistic investments. The fi nancial resources have also provided the Group fl exibility in planning its refi nancing which is critical in the current economic climate, where general lending activity in the market is picking up cautiously. Additionally, the Group reviews its loan profi le closely so as to diversify the refi nancing risks and spread out the loan maturity. In reviewing the maturity profi le of its loan portfolio, the Group also took into account any divestment or investment plans and the prevailing credit market conditions.
AVAILABLE LINES BY NATIONALITY OF BANKS
AS AT 31 DECEMBER 2009
The Group continues to maintain and build an extensive and active relationship with a network of more than 30 banks of various nationalities. With this varied spectrum of network, the Group was able to tap on the strengths and support from the fi nancial institutions in pursuing its strategic growth and presence, thus enhancing its competitiveness in core markets and enabling the Group to develop other markets where appropriate.
INTEREST RATE PROFILE
The Group manages its fi nance cost by maintaining a prudent mix of fi xed and fl oating rate borrowings. As at 31 December 2009, the fi xed rate borrowings constituted 66% of the portfolio and the balance 34% were on fl oating rate basis. As fi nance cost formed an integral component of the Group’s operating costs, a higher percentage in fi xed rate funding would offer protection against unexpected rise in interest rates. On balance, to capitalise on the low interest rate environment which is likely to sustain for the foreseeable future in this current global fi nancial environment, a certain portion of the loan portfolio was maintained on fl oating rate basis. The Group was able to maintain a fl exible profi le and whenever there were divestment proceeds or sales proceeds from fast track residential
PROFILE OF FIXED AND FLOATING LOANS
• Fixed • Floating
• Singapore • Australia • Europe • Japan • Others
AVAILABLE LINES BY
NATIONALITY OF BANKS
As at 31 December 2009
2009
27%
21%
20%
16%
16%
S$ billion
12
10
8
6
4
2
0
40%
2005
26%
2006
34%
2009
25%
2008
25%
2007
60% 74% 75% 75% 66%
$6.7b
$8.1b
$9.9b $9.8b $10.3b
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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sales, it could promptly utilise the proceeds to repay its fl oating rate loans. In managing the interest rate profi le, the Group takes into account the interest rate outlook on various currencies of loans, holding periods of its investment portfolio, timing of planned divestments and operating cashfl ow generated from progress payment collections from its residential receivables.
INTEREST COVER RATIO
AND INTEREST SERVICE RATIO
The Interest Cover Ratio (“ICR”) and Interest Service Ratio (“ISR”) was 4.54 and 4.60 respectively. ICR of 4.54 was lower than 5.50 last year mainly due to higher revaluation losses from investment properties and impairment of assets. Net interest expense was lower due to the low interest rate environment generally in 2009 and a higher proportion of the Group’s loans on fl oating interest rates. ISR of 4.60 was higher than 3.86 last year due to lower net interest paid and higher cashfl ow generated from operations.
• Net Interest Expense —— Interest Cover Ratio • Net Interest Paid —— Interest Service Ratio
INTEREST COVER RATIO AND INTEREST SERVICE RATIO
S$ million Times
500 15
400 12
300 9
200 6
100 3
0 0
2005
$172m
$226m
9.19
8.53
2006
$182m
$230m
2009
$377m
$451m
4.54
4.60
5.50
3.86
13.64
6.19
9.73
8.97
2008
$410m
$468m
2007
$279m
$378m
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
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ECONOMIC VALUE ADDED STATEMENTS 2009 2008 Note S$ million S$ million
Net Operating Profi t Before Tax 825.9 1,322.1 Adjust for: Share of results of associates and jointly-controlled entities 269.2 375.1 Interest expense 466.6 535.7 Others 268.7 15.1
Adjusted Profi t Before Interest and Tax 1,830.4 2,248.0 Cash operating taxes 1 (134.7) (199.8)
Net Operating Profi t After Tax (NOPAT) 1,695.7 2,048.2
Average capital employed 2 22,747.3 21,314.5 Weighted average cost of capital (%) 3 6.887 6.150
Capital Charge (CC) 1,566.6 1,310.8
Economic Value Added (EVA) [NOPAT – CC] 129.1 737.4 Minority interests 206.8 (76.8)
Group EVA attributable to Equity Holders of the Company 335.9 660.6
Note 1: The reported current tax is adjusted for the statutory tax impact of interest expense.
Note 2: Monthly average capital employed included equity, interest-bearing liabilities, timing provision, cumulative goodwill amortised and present value of operating leases.
Major Capital Components: S$ million
Borrowings 10,104.3 Equity 12,189.9 Others 453.1
Total 22,747.3
Note 3: The weighted average cost of capital is calculated as follows:
i) Cost of Equity using Capital Asset Pricing Model with market risk premium at 5.0% (2008: 5.0%) per annum;
ii) Risk-free rate of 2.55% (2008: 2.93%) per annum based on yield-to-maturity of Singapore Government 10-year Bonds;
iii) Ungeared beta ranging from 0.51 to 1.06 (2008: 0.50 to 0.85) based on the risk categorisation of CapitaLand’s strategic business units; and
iv) Cost of Debt rate at 4.30% (2008: 4.26%) per annum using 5-year Singapore Dollar Swap Offer rate plus 187.5 basis points (2008: 131 basis points).
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
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81
VALUE ADDED STATEMENTS 2009 2008 S$ million S$ million
Value Added From:
Revenue earned 2,957.4 2,752.3 Less: Bought in materials and services (1,731.4) (1,514.0)
Gross Value Added 1,226.0 1,238.3 Share of results of associates and jointly-controlled entities 269.2 375.1 Exchange gains (net) 23.0 51.8 Other operating income (net) 566.7 1,075.0 858.9 1,501.9
Total Value Added 2,084.9 2,740.2
Distribution:
To employees in wages, salaries and benefi ts 421.2 478.1 To government in taxes and levies 146.3 284.2 To providers of capital in: – Net interest on borrowings 430.3 462.0 – Dividends to shareholders 297.2 423.4 1,295.0 1,647.7 Balance Retained in the Business:
Depreciation and amortisation 63.0 57.2 Retained profi ts net of dividends to equity holders of the Company 755.8 836.7 Minority interests (44.3) 201.3 774.5 1,095.2 Non-Production Costs and Income:
Allowance for / (Write back of) doubtful receivables 15.4 (2.7)
Total Distribution 2,084.9 2,740.2
Productivity Analysis:
Value added per employee (S$'000) # 192 199 Value added per dollar of employment cost (S$) 2.91 2.59 Value added per dollar sales (S$) 0.41 0.45
# Based on average 2009 headcount of 6,399 (2008: 6,223).
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmcLLL
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PORTFOLIO ANALYSIS
As at 31 December 2009, the Group’s property portfolio had a total attributable value of S$18.5 billion and comprised development properties, investment properties and serviced residences owned by subsidiaries, associates and jointly controlled entities.
In the following analysis, the values attributable to the CapitaLand Group are used. Investment properties are stated at their market values while development properties are stated at book costs (net of any provisions made). Properties treated as fi xed assets are stated at book cost.
PROPERTY VALUE BY
REGION (S$m)
PROPERTY VALUE BY
STRATEGIC BUSINESS
UNIT (S$m)
PROPERTY VALUE BY
SECTOR (S$m)
• Singapore • China (including
Hong Kong and Macau)
• Australia and New Zealand • Asia/Gulf Cooperation
Council countries (excluding Singapore and China)
• Europe
• CapitaMalls Asia • CapitaLand Commercial • CapitaLand China Holdings • The Ascott Limited and
Ascott Residence Trust
• CapitaLand Residential Singapore
• Australand • Integrated Leisure,
Entertainment and Conventions
• Residential • Retail • Serviced Residence • Mixed Development • Offi ce • Industrial • Others
2009
2009
2009
8,032 43%
4,379 24%
4,601 25%
4,706 26%
3,196 17%
4,234 23%
2,302 13%
3,024 16%
2,836 15%
2,914 16%
2,396 13%
2,293 12%
2,551 14%
2,331 13%
1,151 6%
2,097 11%
1314 7%
323 2%
772 4%
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 82Cap AR Corp 0312_FN_OK.indd 82 16/03/2010 2:32 PM16/03/2010 2:32 PM
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PORTFOLIO DETAILS As at 31 December 2009
RESIDENTIAL
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
SINGAPORE
Botannia West Coast Park 2009 C Leonie Court Pte Ltd 50% 493 956
Latitude Jalan Mutiara, near Grange Road
2007 S CRL Realty Pte Ltd 100% 127 Freehold
RiverGate Martin Road 2009 C Riverwalk Promenade Pte Ltd
50% 545 Freehold
Scotts HighPark Scotts Road 2009 C Leonie Court Pte Ltd 100% 73 Freehold
The Interlace Alexandra Road/ Depot Road
2007 A Ankerite Pte Ltd 60% 1,040 99
The Metropolitan Condominium
Alexandra Road, near Tanglin Road
2009 C Tanglin Residential Pte Ltd
50% 382 99
The Orchard Residences Orchard Road 2006 S Orchard Turn Residential Development Pte Ltd
50% 175 99
The Seafront on Meyer Meyer Road 2007 S CRL Realty Pte Ltd 100% 327 Freehold
The Wharf Residence Tong Watt Road, off River Valley Road
2009 S Leonie Court Pte Ltd 100% 186 999
Urban Resort Condominium
Cairnhill Road, near Orchard Road
2006 A CRL Realty Pte Ltd 100% 64 Freehold
Urban Suites Cairnhill Road, near Orchard Road
2007 A Augite Pte Ltd 50% 165 Freehold
Visioncrest Penang Road 2007 C Winpeak Investment Pte Ltd
25% 265 Freehold
Name Location Year * Holding Company Effective
Stake (%) Gross Floor Area (sqm)
Tenure (Years)
Future Projects
Site at Farrer Road Farrer Road 2007 A Morganite Pte Ltd 35% 218,380 99
Site at Nassim Hill Near Orchard Road 1999 A CRL Realty Pte Ltd 100% 15,942 Freehold
Site at Yio Chu Kang Road
Yio Chu Kang Road 2000 A CRL Realty Pte Ltd 100% 19,330 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 83Cap AR Corp 0312_FN_OK.indd 83 12/03/2010 9:37 PM12/03/2010 9:37 PM
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RESIDENTIAL
Name Location Year * Holding Company Effective
Stake (%) Gross Floor Area (sqm)
Total No. of Units
Tenure (Years)
CHINA
Beau Residences Chancheng District, Foshan
2009 S Foshan Xin De Real Estate, Development Co., Ltd
100% 46,454 648 70
Beaufort Chaoyang District, Beijing
2007 A Beijing Heng Shi Tong Fang Real Estate Development Co., Ltd
50% 104,216 1,027 70
I-World Gongshu District, Hangzhou
2009 C CapitaLand Xinyun (Hangzhou) Real Estate Development Co., Ltd
50% 53,642 580 70
Imperial Bay Gongshu District, Hangzhou
2006 A CapitaLand Xinyun (Hangzhou) Real Estate Development Co., Ltd
50% 87,517 479 70
La Capitale Dongcheng District, Beijing
2009 C Beijing Xin Xu Real Estate Development Co., Ltd
100% 50,981 313 50
La Cité Foshan Chancheng District, Foshan
2008 S Foshan Xin Kai Real Estate Development Co., Ltd
100% 79,997 750 70
La Forêt Chaoyang District, Beijing
2008 C Beijing Xin Kai Real Estate Development Co., Ltd
100% 259,131 1,808 70
Luff Egret Wenjiang District, Chengdu
2006 S Sichuan Zhixin CapitaLand Co., Ltd
50% 153,658 661 70
Oasis Riviera Changning District, Shanghai
2008 C Shanghai Ning Xin Real Estate Development Co., Ltd
100% 275,200 1,964 70
Orchid Garden Chaoyang District, Beijing
2007 C Beijing Orchid Garden Real Estate Development Co., Ltd
100% 65,372 247 70
Riverside Ville Chancheng District, Foshan
2007 S Foshan Xin Fo Chen Real Estate Development Co., Ltd
100% 109,672 758 70
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
PORTFOLIO DETAILS
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 84Cap AR Corp 0312_FN_OK.indd 84 12/03/2010 9:37 PM12/03/2010 9:37 PM
85
RESIDENTIAL
Name Location Year * Holding Company Effective
Stake (%) Gross Floor Area (sqm)
Total No. of Units
Tenure (Years)
CHINA (cont’d)
Site at Wenjiang – 645
Wenjiang District, Chengdu
2006 A Sichuan Zhixin CapitaLand Co., Ltd
50% 490,000 (estimated)
3,242 (estimated)
70
Summit Residences Ningbo
Jiangbei District, Ningbo
2007 S Ningbo Xin Yao/ Xin Feng Property Development Co., Ltd
50% 144,512 818 70
The Loft Chengdu Qingyang District, Chengdu
2008 S Chengdu Xin Kai Co., Ltd
56.3% 464,125 4,410 70
The Pines Chaoyang District, Beijing
2009 C Beijing CapitaLand Pin Yuan Real Estate Development Co., Ltd
100% 31,450 157 70
The Riviera Chancheng District, Foshan
2007 S Foshan Xin Fo Chen Real Estate Development Co., Ltd
100% 54,178 208 70
Westwood Green Minhang District, Shanghai
2008 C Shanghai Aoshun Property Co., Ltd
100% 106,595 430 70
Future Projects
Guangnan Project Qingpu District, Shanghai
2007 A Shanghai Guang Nan Real Estate Development Co., Ltd
95% 65,348 (estimated)
215 (estimated)
70
Guangzhou Liyun Baiyun District, Guangzhou
2005 A Guangzhou Beautiwin Real Estate Development Co., Ltd
50% 369,800 2,926 70
Royal Residences Beijing
Dongcheng District, Beijing
2007 A Beijing CapitaLand Xin Ming Real Estate Development Co., Ltd
100% 12,892 29 70
Vermont Hills Changping District, Beijing
2007 A Beijing Rising Harmony Real Estate Development Co., Ltd
81% 324,000 1,089 70
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 85Cap AR Corp 0312_FN_OK.indd 85 12/03/2010 9:37 PM12/03/2010 9:37 PM
86
PORTFOLIO DETAILS
RESIDENTIAL
Name Location Year * Holding Company Effective
Stake (%) Gross Floor Area (sqm)
Total No. of Units
Tenure (Years)
INDIA
The Orchard Residency
Ghatkopar, Mumbai
2007 S Runwal CapitaLand India Private Limited
49% 62,930 (saleable area)
590 Freehold
THAILAND
Athenee Residence
Wireless Road, Bangkok
2007 C TCCCL Wireless Co., Ltd.
40% 84,315 222 Freehold
North Park Place North Park, Bangkok
2007 S TCCCL North Park Co., Ltd.
40% 33,337 130 Freehold
S&S Sukhumvit Sukhumvit 101/ 1, Bangkok
2008 S TCCCL S&S Sukhumvit Co., Ltd.
40% 55,540 819 Freehold
Site at Jomtien Jomtien, Pattaya 2006 A TCCCL Jomtien Co., Ltd.
40% 40,922 166 (estimated)
Freehold
Site at Tup Kaek Tup Kaek, Krabi 2006 A TCCCL Andaman Resort Co., Ltd
40% 10,076 47 (estimated)
Freehold
The Empire Place Sathorn, Bangkok 2008 C TCCCL Narathiwad Co., Ltd.
40% 87,808 493 Freehold
The Emporio Place Sukhumvit 24, Bangkok
2009 C TCCCL Sukhumvit 24 Co., Ltd.
40% 70,410 368 Freehold
The Royal Residence
Kaset Nawamin, Bangkok
2005 S TCCCL Sena Co., Ltd. 40% 45,037 79 Freehold
Villa Asoke Petchburi, Bangkok
2008 A TCCCL Asoke Co., Ltd.
40% 54,860 525 Freehold
Villa Rachakhru Phaholyothin 5, Bangkok
2006 C TCCCL Phaholyothin Co., Ltd.
40% 6,959 70 Freehold
Villa Rachatewi Phaya Thai, Bangkok
2006 S TCCCL Rachatewi Co., Ltd.
40% 76,240 749 Freehold
Villa Sathorn Sathorn-Taksin, Bangkok
2007 S TCCCL Krungthon Co., Ltd
40% 54,131 637 Freehold
VIETNAM
Mulberry Lane Ha Dong District, Hanoi
2009 S CapitaLand-Hoang Thanh Company Limited
70% 221,806 1,478 Freehold
Site at Thanh My Loi
District 2, Ho Chi Minh City
2008 A CapitaLand-Thien Duc Company Limited
60% 234,361 950 (estimated)
Freehold
The Vista District 2, Ho Chi Minh City
2007 S CapitaLand-Vista Joint Venture Co., Ltd
80% 189,966 850 (residential
and serviced residences)
Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 86Cap AR Corp 0312_FN_OK.indd 86 12/03/2010 9:37 PM12/03/2010 9:37 PM
87
COMMERCIAL/INTEGRATED DEVELOPMENTS
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
SINGAPORE
Industrial
Corporation Place Corporation Road 1993 C Corporation Place Ltd
75% 57,667 60 #
Technopark@Chai Chee
Chai Chee Road 1982 A Wan Tien Realty (Pte) Ltd
100% 105,586 60 185,000
Offi ce
PWC Building Cross Street 2000 C DBS China Square Limited
30% 33,080 99 #
163 strata-titled units in The Adelphi
Coleman Street 1988 A Adelphi Property Pte Ltd
100% 16,543 (offi ce and
retail)
999 200,000
HELD THROUGH CAPITACOMMERCIAL TRUST
Carpark
Golden Shoe Car Park
Market Street 1989 A CapitaCommercial Trust
31.6% 4,117 99 #
Market Street Car Park
Market Street 1989 A CapitaCommercial Trust
31.6% 2,423 99 #
Integrated Development
Raffl es City Singapore
North Bridge Road/ Stamford Road/ Bras Basah Road
2006 A RCS Trust 26.8% 72,790 (retail, offi ce
and 2,030 hotel rooms)
99 #
Offi ce
Bugis Village Queen Street/ Rochor Road/ Victoria Street
1989 A CapitaCommercial Trust
31.6% 11,356 99 #
Capital Tower Robinson Road 2000 C CapitaCommercial Trust
31.6% 68,836 99 #
HSBC Building Collyer Quay 2005 A CapitaCommercial Trust
31.6% 18,624 999 #
One George Street George Street 2004 C CapitaCommercial Trust
31.6% 41,621 99 #
Robinson Point Robinson Road 1997 C CapitaCommercial Trust
31.6% 12,369 Freehold #
Six Battery Road Battery Road 1989 A CapitaCommercial Trust
31.6% 46,159 999 #
Starhub Centre Cuppage Road 1998 C CapitaCommercial Trust
31.6% 26,019 99 #
Wilkie Edge Wilkie Road 2008 C CapitaCommercial Trust
31.6% 13,576 (excludes serviced
residences)
99 #
# Total book value for non wholly-owned Singapore commercial properties and integrated developments: S$7.3 billion * A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 87Cap AR Corp 0312_FN_OK.indd 87 12/03/2010 9:37 PM12/03/2010 9:37 PM
88
PORTFOLIO DETAILS
COMMERCIAL/INTEGRATED DEVELOPMENTS
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
BAHRAIN
Integrated Development
Raffl es City Bahrain
Bahrain Bay, Manama
2007 S Bahrain Bay Integrated Development Limited
37.7% 288,841 (GFA)
Freehold ##
CHINA
Industrial
Corporation Park Sha Tin, Hong Kong
1996 C Sea Dragon Ltd 30% 40,099 (GFA)
54 ##
Integrated Development
Daning Project Zhabei District, Shanghai
2009 S Shanghai CapitaLand Xin Chuang Real Estate Development Co., Ltd
100% 71,086 (GFA)
50 (offi ce)
40 (retail and
serviced residences)
##
Macao Studio City Cotai, Macau 2007 S East Asia Televisao Por Satalite Limitada
20% 340,000 (proposed GFA
for Phase 1)
25 ##
Raffl es City Beijing
Dongcheng District, Beijing
2009 C Beijing Xin Jie Real Estate Development Co., Ltd
44.8% 138,490 (GFA)
50 (offi ce and
serviced residences)
40 (retail)
##
Raffl es City Chengdu
Wuhou District, Chengdu
2008 S Raffl es City Chengdu Co., Ltd
44.8% 193,675 (GFA)
40 ##
Raffl es City Hangzhou
Qianjiang New Town, Hangzhou
2007 A Raffl es City (Hangzhou) Real Estate Development Co., Ltd
44.8% 283,568 (GFA)
40 ##
Raffl es City Ningbo
Jiangbei District, Ningbo
2009 S Ningbo Xin Yin Property Development Co., Ltd
50% 97,898 (GFA)
50 ##
Raffl es City Shanghai
Huangpu District, Shanghai
2003 C Shanghai Hua Qing Real Estate Development Co., Ltd
25% 133,816 (GFA)
50 ##
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 88Cap AR Corp 0312_FN_OK.indd 88 16/03/2010 2:33 PM16/03/2010 2:33 PM
89
COMMERCIAL/INTEGRATED DEVELOPMENTS
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
CHINA (cont’d)
Offi ce
IBM China Centre Haidian District, Beijing
2005 C Beijing Red Diamond Science & Technology Development Co., Ltd
50% 19,022 50 ##
Innov Tower Xuhui District, Shanghai
2008 C Caike Property (Shanghai) Co., Ltd
50% 28,180 45 ##
Site at Wenjiang -110
Wenjiang District, Chengdu
2006 A Sichuan Zhixin CapitaLand Co., Ltd
50% 80,762 40 ##
INDIA
IT Park/ Offi ce
Site at Trans Thana Creek
Thana District, Navi Mumbai
2007 A Loma IT Park Developers Private Limited
49% 273,162 100 ##
JAPAN
Mixed Development
Site at Kita Shinjuku
Shinjuku Ward, Tokyo
2008 S Mitsubishi Estate Co., Ltd
20% 57,354 (offi ce and retail,
excludes 296 residential units)
Freehold ##
KAZAKHSTAN
Mixed Development
Site at Almaty Almaty 2008 A CapitaLand Express LLP
70% 35,000 (residential
and serviced residence GFA)
Freehold ##
UNITED ARAB EMIRATES
Integrated Development
Rihan Heights, (Arzanah, Phase 1)
Abu Dhabi 2008 S Mubadala CapitaLand Real Estate LLC
49% 115,013 (saleable area)
Freehold ##
UNITED KINGDOM
Integrated Development
99-121 Kensington High Street
Central London 2006 A 818 Pte Ltd 33.3% 34,443 Freehold ##
Offi ce
1 Derry Street Central London 2006 A 828 Pte Ltd 33.3% 2,991 Freehold ##
Residential
25 Kensington Square
Central London 2006 A 838 Pte Ltd 33.3% 311 Freehold ##
## Total book value for non wholly-owned overseas commercial properties and integrated developments: S$3.4 billion * A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 89Cap AR Corp 0312_FN_OK.indd 89 16/03/2010 2:33 PM16/03/2010 2:33 PM
90
PORTFOLIO DETAILS
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
SINGAPORE
Clarke Quay River Valley Road 1993 C Clarke Quay Pte Ltd
65.5% 27,342 99 ^
ION Orchard Orchard Road 2009 C Orchard Turn Retail Investment Pte. Ltd.
32.75% 59,623 99 ^
Site at one-north (under development)
one-north 2007 A One Trustee Pte Ltd
65.5% 24,000 (GFA)
(commercial only)
60 ^
HELD THROUGH CAPITAMALL TRUST
Bugis Junction Victoria Street 2005 A CapitaMall Trust 19.5% 39,162 99 ^
Bukit Panjang Plaza Jelebu Road 2003 A CapitaRetail BPP Trust
19.5% 13,793 99 ^
Funan DigitaLife Mall
North Bridge Road
1984 C CapitaMall Trust 19.5% 27,657 99 ^
Hougang Plaza Upper Serangoon Road
2005 A CapitaMall Trust 19.5% 7,000 99 ^
IMM Building Jurong East 2003 A CapitaMall Trust 19.5% 87,528 30+30 ^
Junction 8 Bishan 1993 C CapitaMall Trust 19.5% 22,921 99 ^
Jurong Entertainment Centre (under asset enhancement)
Jurong East 2005 A CapitaMall Trust 19.5% 26,113 (GFA)
99 ^
Lot One Shoppers' Mall
Choa Chu Kang 2003 A CapitaRetail Lot One Trust
19.5% 20,226 99 ^
Plaza Singapura Orchard Road 1974 C CapitaMall Trust 19.5% 46,328 Freehold ^
Rivervale Mall Rivervale Crescent
2003 A CapitaRetail Rivervale Trust
19.5% 7,537 99 ^
Sembawang Shopping Centre
Sembawang Road
2005 A CapitaMall Trust 19.5% 11,921 999 ^
Tampines Mall Tampines Central 1995 C CapitaMall Trust 19.5% 30,438 99 ^
The Atrium @ Orchard
Orchard Road 2008 A CapitaMall Trust 19.5% 34,715 99 ^
^ Total book value for non wholly-owned Singapore retail properties: S$8.8 billion * A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 90Cap AR Corp 0312_FN_OK.indd 90 16/03/2010 2:34 PM16/03/2010 2:34 PM
91
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
CHINA
Aidemengdun Mall (under development)
Daoli District, Harbin
2007 A Beijing Hualian Haerbin Real Estate Development Co., Ltd.
29.5% 43,851 (GFA)
40 ^^
Anyang Mall (under development)
Beiguan District, Anyang
2006 A Anyang SZITIC Commercial Property Co., Ltd.
19.2% 36,303 (GFA)
40 ^^
Chengnanyuan Mall
Qing Yun Pu District, Nanchang
2006 C CapitaMalls Nanchang Commercial Property Co., Ltd.
29.5% 37,551 40 ^^
Chikan Mall Chikan District, Zhanjiang
2008 C CapitaMalls Zhanjiang City Commercial Property Co., Ltd.
29.5% 33,401 40 ^^
Danshui Mall (1) Huiyang District, Huizhou
2007 C Huizhou City SZITIC Commercial Property Co., Ltd.
19.2% 39,283 (GFA)
40 ^^
Duanzhou Mall Duanzhou District, Zhaoqing
2009 C CapitaMalls Zhaoqing City Commercial Property Co., Ltd.
29.5% 32,511 50 ^^
Fucheng Mall Fucheng District, Mianyang
2007 C CapitaMalls Mianyang Commercial Property Co., Ltd.
29.5% 34,003 (phase 1) 28,000
(phase 2 GFA)
40 ^^
Gaoxin Mall Gaoxin District, Weifang
2005 C CapitaMalls Weifang Real Estate Co., Ltd.
29.5% 35,536 40 ^^
Guicheng Mall Nanhai District, Foshan
2006 C CapitaMalls Foshan City Nanhai Commercial Property Co., Ltd.
47.8% 35,523 40 ^^
Hengyang Mall (1) (under development)
Gaoxin District, Hengyang
2007 A Hengyang SZITIC Commercial Property Co., Ltd.
19.2% 49,822 (GFA)
40 ^^
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 91Cap AR Corp 0312_FN_OK.indd 91 16/03/2010 2:34 PM16/03/2010 2:34 PM
92
PORTFOLIO DETAILS
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
CHINA (cont’d)
Jiangbin Mall Licheng District, Quanzhou
2006 C Quanzhou SZITIC Commercial Property Co., Ltd.
19.2% 29,679 40 ^^
Jingdong Mall (1) (under development)
Beijing East Road, Nanchang
2008 A Jiangxi SZITIC Commercial Property Co., Ltd.
19.2% 26,017 (GFA)
40 ^^
Jingyang Mall Hedong District, Deyang
2009 C CapitaMalls Deyang Real Estate Co., Ltd.
29.5% 29,332 40 ^^
Jinniu Mall Jinniu District, Chengdu
2006 C SZITIC (Chengdu) Commercial Property Co., Ltd.
19.2% 46,869 (phase 1) 88,673
(phase 2 GFA)
40 ^^
Jiulongpo Mall Jiulongpo District, Chongqing
2005 C CapitaMalls Chongqing Investment Co., Ltd.
47.8% 39,072 40 ^^
Laiwu Mall (1) (under development)
Wenyuan Dong Dajie, Laiwu
2008 A Laiwu SZITIC Commercial Property Co., Ltd.
19.2% 48,407 (GFA)
40 ^^
Liuquan Mall Zhangdian District, Zibo
2008 C CapitaMalls Zibo Commercial Property Co., Ltd.
29.5% 30,125 40 ^^
Ma’anshan Mall (1) (under development)
Yushan Road/ Kangle Road, Ma’anshan
2007 A MaAnShan SZITIC Commercial Property Co., Ltd.
19.2% 39,486 (GFA)
40 ^^
Maonan Mall Maogang District, Maoming
2006 C CapitaMalls Maoming City Commercial Property Co., Ltd.
47.8% 30,215 40 ^^
Nanan Mall Cuiping District, Yibin
2009 C CapitaMalls Yibin Commercial Property Co., Ltd.
29.5% 27,450 40 ^^
Nancheng Mall Nancheng District, Dongguan
2009 C Dongguan City SZITIC Commercial Property Co., Ltd.
19.2% 32,852 50 ^^
Peace Plaza Shahekou District, Dalian
2008 A Dalian Kaijin Infrastructure Management Co., Ltd
19.7% 109,813 40 ^^
Rizhao Mall (under development)
Haiqu East Road/ Qingdao Road, Rizhao
2007 A CapitaRatail Rizhao Haiqu Infrastructure Management Limited
19.7% 77,458 (GFA)
40 ^^
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 92Cap AR Corp 0312_FN_OK.indd 92 16/03/2010 2:34 PM16/03/2010 2:34 PM
93
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
CHINA (cont’d)
Shawan Mall Jinniu District, Chengdu
2009 C CapitaRetail Chengdu FuQin Real Estate Co., Ltd.
19.7% 20,016 40 (commercial)
70 (underground
carpark)
^^
Tai’an Mall (1)
(under development)
Dongyue Dajie, Tai’an
2008 A Tai’an SZITIC Commercial Property Co., Ltd.
19.2% 49,577 (GFA)
40 ^^
Taohualun Mall Heshan District, Yiyang
2009 C CapitaMalls Yiyang Commercial Property Co., Ltd.
29.5% 23,313 40 ^^
Tianfu Mall (under development)
Gaoxin District, Chengdu
2008 A Chengdu Huayun Jiangnan Real Estate Development Co., Ltd
29.5% 134,411 (GFA)
40 ^^
TianjinOne Mall Hexi District, Tianjin
2007 A CapitaRetail TianJin Zhonghuan Infrastructure Developments Limited
19.7% 40,050 50 ^^
Weiyang Mall Weiyang District, Yangzhou
2009 C Yangzhou SZITIC Commercial Property Co., Ltd.
19.2% 34,935 40 ^^
Xiangcheng Mall Xiangcheng District, Zhangzhou
2006 C CapitaMalls Zhangzhou Commercial Property Co., Ltd.
47.8% 29,905 40 ^^
Xiangmihu Mall (1) Futian District, Shenzhen
2006 A CapitaRetail Qiaoxiang (Shenzhen) Co., Ltd
14.7% 140,879 (GFA)
40 ^^
Xindicheng Mall (under development)
Yanta District, Xi'an
2008 A Shanxi Hualian Real Estate Development Co., Ltd
29.5% 94,322 (GFA)
40 ^^
Xinxiang Mall (under development)
Hongqi District, Xinxiang
2006 A CapitaMalls Xinxiang Commercial Property Co., Ltd.
29.5% 38,093 (GFA)
40 ^^
Xuefu Mall (under development)
Nangang District, Harbin
2008 A CapitaRetail Harbin Shangdu Real Estate Co., Ltd.
29.5% 96,635 (GFA)
40 ^^
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 93Cap AR Corp 0312_FN_OK.indd 93 12/03/2010 9:39 PM12/03/2010 9:39 PM
94
PORTFOLIO DETAILS
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
CHINA (cont’d)
Yuhuating Mall Yuhua District, Changsha
2005 C CapitaMalls Hunan Commercial Property Co., Ltd.
47.8% 47,303 40 ^^
Yushan Mall Yushan Town, Kunshan
2009 C Kushan SZITIC Commercial Property Co., Ltd.
19.2% 27,261 40 ^^
Zhongshan Mall (under development)
Qiaokou District, Wuhan
2007 A Wuhan Guangxinlian Real Estate Development Co., Ltd
29.5% 106,536 (GFA)
40 ^^
Zhuzhou Mall (1)
(under development)
Hetang District, Zhuzhou
2007 A Zhuzhou SZITIC Commercial Property Co., Ltd.
19.2% 57,576 (GFA)
40 ^^
HELD THROUGH CAPITARETAIL CHINA TRUST
Anzhen Mall Chaoyang District, Beijing
1994 C CapitaRetail Beijing Anzhen Real Estate Co., Ltd.
17.7% 43,442 29 – 37 ^^
Jiulong Mall Chaoyang District, Beijing
2003 C CapitaRetail Beijing Shuangjing Real Estate Co., Ltd.
17.7% 49,526 40 ^^
Qibao Mall Minhang District, Shanghai
2003 C CapitaRetail Dragon Mall (Shanghai) Co., Ltd.
17.7% 50,996 39 ^^
Saihan Mall Saihan District, Huhhot
2002 C Huaxin Saihan Huhhot Real Estate Co., Ltd
17.7% 28,351 35 ^^
Wangjing Mall Chaoyang District, Beijing
2006 C CapitaRetail Beijing Wangjing Real Estate Co., Ltd.
17.7% 55,788 38 – 48 ^^
Xinwu Mall Xinwu District, Wuhu
2005 C Wuhu SZITIC Commercial Property Co., Ltd.
9.0% 37,819 40 ^^
Xizhimen Mall Xizhimenwai Avenue, Beijing
2006 A CapitaRetail Beijing Xizhimen Real Estate Co., Ltd.
17.7% 48,828 40 – 50 ^^
Zhengzhou Mall Erqi District, Zhengzhou
1992 C CapitaLand Retail Henan Zhongzhou Real Estate Co., Ltd
17.7% 92,356 38 ^^
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 16.03.2010 150# 2bmc
Cap AR Corp 0312_FN_OK.indd 94Cap AR Corp 0312_FN_OK.indd 94 16/03/2010 2:35 PM16/03/2010 2:35 PM
95
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
INDIA
Cochin Mall (under development)
Maradu Village, Kanayanoor Taluk, Ernakulam District, Cochin
2008 A Thomsun Realtors Private Limited
7.4% 102,215 (Super
Built-up Area)
Freehold ^^
Forum Value Mall, Bangalore
Krishnarajapuram Hobli, Whitefi eld, Bangalore
2008 A Prestige Garden Constructions Private Limited
10.4% 46,817 (SBA)
Freehold ^^
Graphite India, Bangalore (under development)
Doddanekundi, Krishnarajapuram, Whitefi eld, Bangalore
2008 A Prestige Whitefi eld Investment and Developers Private Limited
14.6% 97,731 (SBA)
Freehold ^^
Hyderabad Mall (under development)
Kukatpally, Hyderabad
2009 A Babji Realtors Private Limited
7.3% 79,125 (SBA)
Freehold ^^
Jalandhar Mall (under development)
Jalandhar 2008 A Francolin Infrastructure Private Limited
19.4% 103,194 (SBA)
Freehold ^^
Mangalore Mall (under development)
Pandeshwar Road, Mangalore
2008 A Prestige Mangalore Retail Ventures Private Limited
9.9% 45,916 (SBA)
Freehold ^^
Mysore Mall (under development)
Abba Road/ Hyder Ali Road, Mysore
2008 A Prestige Mysore Retail Ventures Private Limited
14.6% 33,417 (SBA)
Freehold ^^
Nagpur Mall (under development)
Umrer Road, Nagpur
2008 A Nunlet Projects Private Limited
19.4% 124,610 (SBA)
Freehold ^^
Udaipur Celebration Mall (under development)
Udaipur 2007 A Flicker Projects Private Limited
24.4% 36,048 (SBA)
99 ^^
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 95Cap AR Corp 0312_FN_OK.indd 95 12/03/2010 9:39 PM12/03/2010 9:39 PM
96
PORTFOLIO DETAILS
RETAIL
Name Location Year * Holding Company Effective
Stake (%)
Total Net Lettable
Area (sqm) Tenure (Years)
Book Value S$’000
JAPAN
Chitose Mall Chitose, Hokkaido 2005 A CapitaRetail IYC Tokutei Mokuteki Kaisha
17.2% 15,964 Freehold ^^
Co-op Kobe Nishinomiya-shi, Hyogo
2007 A CapitaRetail CK Tokutei Mokuteki Kaisha
17.2% 7,970 Freehold ^^
Ito Yokado Eniwa Eniwa, Hokkaido 2006 A CapitaRetail IYE Tokutei Mokuteki Kaisha
17.2% 14,843 Freehold ^^
Izumiya Hirakata Hirakata-shi, Osaka
2005 A CapitaRetail IH Tokutei Mokuteki Kaisha
17.2% 20,044 Freehold ^^
La Park Mizue Mizue, Edogawa-ku, Tokyo
2003 A CapitaRetail LPM Tokutei Mokuteki Kaisha
17.2% 18,430 Freehold ^^
Narashino Shopping Center
Funabashi-shi, Chiba
2007 A CapitaRetail NS Tokutei Mokuteki Kaisha
17.2% 10,738 Freehold ^^
Vivit Square Funabashi-shi, Chiba
2005 A CapitaRetail VS Tokutei Mokuteki Kaisha
17.2% 48,989 Freehold ^^
MALAYSIA
Gurney Plaza Persiaran Gurney, Penang
2007 A CapitaRetail Gurney Sdn. Bhd.
65.5% 65,765 Freehold ^^
MINES Shopping Fair
Jalan Dulang, Selangor
2007 A Mutual Streams Sdn. Bhd.
65.5% (2)
66,827 99 ^^
Sungei Wang Plaza Strata Parcels
(3)
Jalan Sultan Ismail, Kuala Lumpur
2008 A Vast Winners Sdn. Bhd.
65.5% (2)
41,819 Freehold ^^
(1) These properties will not be part of the China portfolio after completion of the asset swap and divestment exercise currently being undertaken by CapitaMalls Asia. (2) CapitaMalls Asia holds 100% of the subordinated notes issued in respect of Sungei Wang Plaza and MINES Shopping Fair. (3) Sungei Wang Plaza Strata Parcels comprise the identifi ed strata parcels within Sungei Wang Plaza, and consist of retail space of approximately 61.9% of the aggregate surveyed retail fl oor area of Sungei Wang Plaza and 1,298 car parking bays.
^^ Total book value for non wholly-owned overseas retail properties: S$5.5 billion * A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 96Cap AR Corp 0312_FN_OK.indd 96 12/03/2010 9:39 PM12/03/2010 9:39 PM
97
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
SINGAPORE
Ascott Raffl es Place Singapore
Finlayson Green 2008 C Ascott Singapore Raffl es Place Pte Ltd
100% 146 999
Citadines Singapore Mount Sophia
Wilkie Road 2009 C Citadines Singapore Mount Sophia Pte Ltd
100% 154 99
HELD THROUGH ASCOTT RESIDENCE TRUST
Somerset Grand Cairnhill, Singapore
Cairnhill Road 2006 A Ascott Residence Trust
47.5% 146 99
Somerset Liang Court, Singapore
River Valley Road 2006 A Ascott Residence Trust
47.5% 197 97
AUSTRALIA
Citadines Melbourne on Bourke (under construction)
Bourke Street, Melbourne
2008 A Citadines Melbourne on Bourke Pty Ltd
100% 398 Freehold
HELD THROUGH ASCOTT RESIDENCE TRUST
Somerset Gordon Heights, Melbourne
Little Bourke Street, Melbourne
2007 A Ascott Residence Trust
47.5% 43 Freehold
Somerset St Georges Terrace, Perth
St Georges Terrace, Perth
2008 A Ascott Residence Trust
47.5% 84 Freehold
BELGIUM
Citadines Bruxelles Sainte- Catherine
Quai au Bois a Bruler, Brussels
2002 A FBM Belgique 100% 169 Freehold
Citadines Bruxelles Toison d'Or
Avenue de la Toison d'Or, Brussels
2002 A Immobiliere Toisor- Belgium
65% 154 Freehold
CHINA
Ascott Guangzhou Tianhe District, Guangzhou
2008 C Guangzhou Hai Yi Property Development Co Ltd
100% 208 70
Somerset Garden City, Shenzhen
Nanshan District, Shenzhen
2008 A Ascott Serviced Residence (China) Fund
33% 147 70
Somerset Heping, Shenyang (under construction)
Taiyuan Street Commercial Zone, Shenyang
2008 A Ascott Serviced Residence (China) Fund
33% 319 30
Somerset JieFangBei, Chongqing
Yuzhong District, Chongqing
2008 A Ascott Serviced Residence (China) Fund
33% 157 40
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 97Cap AR Corp 0312_FN_OK.indd 97 12/03/2010 9:39 PM12/03/2010 9:39 PM
98
PORTFOLIO DETAILS
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
CHINA (cont’d)
Somerset Youyi, Tianjin Hexi District, Tianjin 2007 A Ascott Serviced Residence (China) Fund
33% 250 50
Somerset ZhongGuanCun, Beijing
Haidian District, Beijing
2006 C Somerset Xin Ya (Beijing) Property Leasing Co Ltd
100% 154 70 (general) 40 (third fl oor) 50 (clubhouse)
Citadines Hongkong Ashley
Tsim Sha Tsui District, Hong Kong
2006 C Citadines Ashley TST Management (HK) Ltd
100% 36 150
Citadines Shanghai Biyun Jinqiao Export Processing Zone, Shanghai
2007 A Ascott Serviced Residence (China) Fund
33% 196 70
Citadines Suzhou Xinghai Suzhou Industrial Park, Suzhou
2007 C Suzhou Chongrui Xin Shi Ji Real Estate Co Ltd
100% 167 70
Citadines Wuhan Zhuankou (under construction)
Zhuankou District, Wuhan
2008 A Ascott Serviced Residence (China) Fund
33% 258 40
Citadines Xi'an Central Beilin District, Xi'an 2007 C Citadines Xi'an Central Hotel Co., Ltd
100% 162 70 (residential)
50 (commercial)
Citadines Xi'an Gaoxin (under construction)
Hi-Tech Development Zone, Xi'an
2008 A Ascott Serviced Residence (China) Fund
33% 284 50
HELD THROUGH ASCOTT RESIDENCE TRUST
Ascott Beijing Chaoyang District, Beijing
2006 A Ascott Residence Trust
47.5% 310 70
Somerset Grand Fortune Garden, Beijing
Chaoyang District, Beijing
2006 A Ascott Residence Trust
47.5% of 81 units
221 70
Somerset Olympic Tower, Tianjin
Heping District, Tianjin
2006 A Ascott Residence Trust
47.5% 185 70
Somerset Xu Hui, Shanghai
Xu Hui District, Shanghai
2006 A Ascott Residence Trust
47.5% 167 70
FRANCE
Citadines Cannes Carnot Rue le Poussin, Cannes
2002 A SCI Cannes Carnot 100% 58 Freehold
Citadines Grenoble Rue de Strasbourg, Grenoble
2002 A SA Place de Metz- Greno
100% of 106
units
107 Freehold
Citadines Lille Centre Avenue Willy brant- Euralille, Lille
2002 A SA Residence des 2 100% 101 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 98Cap AR Corp 0312_FN_OK.indd 98 12/03/2010 9:39 PM12/03/2010 9:39 PM
99
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
FRANCE (cont’d)
Citadines Lyon Presqu'île Rue Thomassin, Lyon
2002 A SCI Residence Lyon 100% 116 Freehold
Citadines Marseille Castellane
Rue de Rouet, Marseille
2002 A SCI Sodi 100% (fi nance
lease)
97 Freehold
Citadines Marseille Prado Chanot
Boulevard de Louvain, Marseille
2002 A SCI Marseille 100% 77 Freehold
Citadines Montpellier Antigone
Boulevard d'Antigone, Montpellier
2002 A SCI Montpellier 100% (fi nance
lease)
125 Freehold
Citadines Paris Austerlitz Rue Esquirol, Paris 2002 A SCI Austerlitz 100% (fi nance
lease)
49 Freehold
Citadines Paris Didot Alésia
Rue Didot, Paris 2002 A ORIVILLE SAS 100% (fi nance
lease)
80 Freehold
Citadines Paris Les Halles Rue des Innocents, Paris
2002 A ORIVILLE SAS 100% 189 Freehold
Citadines Paris Louvre Rue de Richelieu, Paris
2008 A ORIVILLE SAS 100% 51 Freehold
Citadines Paris Maine-Montparnasse
Avenue du Maine, Paris
2002 A SCI Montparnasse 100% 67 Freehold
Citadines Paris Montmartre
Avenue Rachel, Paris
2002 A SNC Rachel 100% of 111
units
113 Freehold
Citadines Paris Place d'Italie
Place d'Italie, Paris 2002 A SCI Italie 100% 169 Freehold
Citadines Paris Tour Eiffel Boulevard de Grenelle, Paris
2002 A SCI Residence Grenelle
100% 104 Freehold
Citadines Paris Trocadéro Rue Saint-Didier, Paris
2002 A SARL REO St Didier 100% 97 Freehold
Citadines Paris Voltaire République
Avenue Parmentier, Paris
2002 A SCI Republique 100% (fi nance
lease)
76 Freehold
GERMANY
Citadines Berlin Olivaer Platz
Olivaer Platz, Berlin 2002 A Citador Olivaer Platz GmbH & Co KG
100% 118 Freehold
Citadines Munich Arnulfpark
Arnulfstrasse, Munich
2009 C Citadines Arnulfpark Munich (Netherlands) BV
100% 146 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 99Cap AR Corp 0312_FN_OK.indd 99 12/03/2010 9:39 PM12/03/2010 9:39 PM
100
PORTFOLIO DETAILS
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
INDIA
Somerset Greenways, Chennai (under construction)
Sathyadev Avenue, Chennai
2006 A Rattha Somerset Greenways (Chennai) Private Limited
60% 210 Freehold
Somerset Whitefi eld, Bangalore (under construction)
Whitefi eld, Bangalore
2006 A Rattha Somerset Whitefi eld (Bangalore) Private Limited
40% 230 Freehold
Citadines Ahmedabad Parimal Garden (under construction)
Central Business District, Ahmedabad
2008 A Rattha Citadines Ahmedabad ApartHotel Private Limited
40% 220 Freehold
Citadines Chennai Boulevard (under construction)
Mount Poonamelle Road, Chennai
2006 A Rattha Citadines Boulevard (Chennai) Private Limited
40% 220 Freehold
Citadines Chennai OMR Gateway (under construction)
Old Mahabalipuram Road, Chennai
2007 A Rattha Citadines OMR ApartHotel Private Limited
40% 300 Freehold
Citadines Hyderabad Hitec City (under construction)
Hitec City, Hyderabad
2007 A Rattha Citadines Hitec City ApartHotel Private Limited
49% 218 Freehold
INDONESIA
HELD THROUGH ASCOTT RESIDENCE TRUST
Serviced Residence
Ascott Jakarta Jalan Kebon Kacang Raya, Jakarta
2006 A Ascott Residence Trust
47.1% 198 26
Somerset Grand Citra, Jakarta
Jalan Prof Dr Satrio Kav 1, Jakarta
2006 A Ascott Residence Trust
27.3% 203 30
Corporate Leasing
Country Woods, Jakarta Jalan WR Supratman, Jakarta
2006 A Ascott Residence Trust
47.5% 251 20
JAPAN
Serviced Residence
Citadines Kyoto Karasuma-Gojo (under construction)
Gojo-ku, Kyoto 2007 A Citadines Kyoto Gojo Tokutei Mokuteki Kaisha
40% 126 Freehold
Citadines Tokyo Shinjuku Shinjuku-ku, Tokyo 2009 C Citadines Shinjuku Tokutei Mokuteki Kaisha
40% 160 Freehold
Corporate Leasing
Infi ni Garden Hamao District, Fukuoka
2008 C Infi ni Garden Tokutei Mokuteki Kaisha
30% 395 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
Capitaland A/R_Coporate W210 x H297mm_120gsm Eco Frontier Epigram M YC K
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 12.03.2010 150# 1bmc
Cap AR Corp 0312_FN_OK.indd 100Cap AR Corp 0312_FN_OK.indd 100 12/03/2010 9:40 PM12/03/2010 9:40 PM
101
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
JAPAN (cont’d)
HELD THROUGH ASCOTT RESIDENCE TRUST
Serviced Residence
Somerset Azabu East, Tokyo
Minato-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 79 Freehold
Somerset Roppongi, Tokyo
Minato-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 64 Freehold
Corporate Leasing
Asyl Court Nakano Sakaue Nakano-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 62 Freehold
Gala Hachimanyama I Suginami-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 76 Freehold
Gala Hachimanyama II Suginami-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 16 Freehold
Joy City Koishikawa Bunkyo-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 36 Freehold
Joy City Kuramae Taito-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 60 Freehold
Zesty Akebonobashi Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 12 Freehold
Zesty Gotokuji Setagaya-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 15 Freehold
Zesty Higashi Shinjuku Shinjuku-ku, Tokyo 2007 A Zenith Residences Tokyo TMK
47.5% 19 Freehold
Zesty Kagurazaka I Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 20 Freehold
Zesty Kagurazaka II Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 20 Freehold
Zesty Kasugacho Nerima-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 32 Freehold
Zesty Koishikawa Bunkyo-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 15 Freehold
Zesty Komazawa Daigaku II
Meguro-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 29 Freehold
Zesty Nishi Shinjuku III Shinjuku-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 29 Freehold
Zesty Sakura Shinmachi Setagaya-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 17 Freehold
Zesty Shin Ekoda Nerima-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 18 Freehold
Zesty Shoin Jinja Setagaya-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 16 Freehold
Zesty Shoin Jinja II Setagaya-ku, Tokyo 2007 A Ascott Residence Trust
47.5% 17 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
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PORTFOLIO DETAILS
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
MALAYSIA
Ascott Kuala Lumpur Jalan Pinang, Kuala Lumpur
1999 C Amanah Scotts Properties (KL) Sdn Bhd
50% 221 Freehold
Somerset Ampang, Kuala Lumpur (under construction)
Ampang District, Kuala Lumpur
2007 A Somerset Ampang (Malaysia) Sdn Bhd
100% 208 Freehold
Somerset Seri Bukit Ceylon, Kuala Lumpur
Lorong Ceylon, Kuala Lumpur
2006 C Liang Court (Malaysia) Sdn Bhd
100% of 48 units
96 Freehold
PHILIPPINES
HELD THROUGH ASCOTT RESIDENCE TRUST
Ascott Makati Ayala Center, Manila
2007 A Ascott Residence Trust
47.5% 306 48
Somerset Millennium, Makati
Legaspi Village, Manila
2006 A Ascott Residence Trust
47.5% of 69 units
138 Freehold
Somerset Salcedo, Makati
Salcedo Village, Manila
2006 A Ascott Residence Trust
47.5% of 71 units
150 Freehold
SPAIN
Citadines Barcelona Ramblas
Ramblas District, Barcelona
2002 A Eurimeg Espana SA- Spain
65% 131 Freehold
THAILAND
Ascott Sathorn Bangkok South Sathorn Road, Bangkok
2004 C Sathorn Supsin Company Limited
40% 177 50+10
Citadines Bangkok Sukhumvit 8
Bangkok 2008 C Boutique Boulevard Ltd
49% 130 Freehold
Citadines Bangkok Sukhumvit 11
Bangkok 2008 C Boutique Realty Ltd 49% 127 Freehold
Citadines Bangkok Sukhumvit 16
Bangkok 2007 C Boutique Land Ltd 49% 79 Freehold
Citadines Bangkok Sukhumvit 23
Bangkok 2008 C Boutique Assets Ltd 49% 138 Freehold
* A: Year of Acquisition S: Start of Construction C: Completion of Construction
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* A: Year of Acquisition S: Start of Construction C: Completion of Construction
SERVICED RESIDENCE
Name Location Year * Holding Company Effective
Stake (%) Total No. of Units
Tenure (Years)
UNITED KINGDOM
Citadines London Barbican Goswell Road, London
2002 A FBM London Ltd 100% 129 Freehold
Citadines London Holborn- Covent Garden
High Holborn, London
2008 A Citadines Holborn CL Limited
100% 192 Freehold
Citadines London South Kensington
Gloucester Road, London
2002 A Citagrep Ltd 65% 92 Freehold
Citadines London Trafalgar Square
Northumberland Avenue, London
2002 A FBM London Ltd 100% 187 Freehold
VIETNAM
Somerset Hoa Binh, Hanoi Hoang Quoc Viet Street, Hanoi
2008 C Somerset Hoa Binh JV Co Ltd
90% 206 40
HELD THROUGH ASCOTT RESIDENCE TRUST
Somerset Chancellor Court, Ho Chi Minh City
Nguyen Thi Minh Khai Street, Ho Chi Minh City
2007 A Ascott Residence Trust
31.9% 172 48
Somerset Grand Hanoi Hai Ba Trung Street, Hanoi
2006 A Ascott Residence Trust
36.1% 185 45
Somerset Ho Chi Minh City
Nguyen Binh Khiem Street, Ho Chi Minh City
2006 A Ascott Residence Trust
32.8% 165 45
Somerset West Lake, Hanoi
Thuy Khue Road, Hanoi
2009 A Ascott Residence Trust
33.3% 90 49
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5-YEAR FINANCIAL SUMMARY
2005 2006 2007 2008 2009
(A) INCOME STATEMENTS (S$ million)
Revenue by SBUs CapitaLand Residential Limited (1) 3,036.8 2,356.0 CapitaLand Residential Singapore 548.7 400.2 673.8 CapitaLand China Holdings 985.3 330.3 647.0 CapitaLand Commercial 122.2 139.2 165.7 227.9 144.9 CapitaMalls Asia 50.3 94.6 124.2 206.7 228.9 The Ascott Limited 444.1 478.1 459.5 441.8 393.7 CapitaLand Financial 70.6 101.2 119.2 182.2 162.2 Australand 1,406.7 984.3 732.5 Others 121.6 (21.4) (16.6) (21.1) (25.6)
Total 3,845.6 3,147.7 3,792.7 2,752.3 2,957.4
Earnings Before Interest and Tax (EBIT) by SBUs
CapitaLand Residential Limited (1) 492.4 692.2 CapitaLand Residential Singapore 308.6 175.0 371.7 CapitaLand China Holdings 403.4 883.4 551.2 CapitaLand Commercial 24.7 372.4 1,876.7 395.6 (497.4) CapitaMalls Asia 138.4 221.1 297.9 298.6 449.1 The Ascott Limited 121.4 202.5 337.2 132.2 31.4 CapitaLand Financial 53.3 61.6 69.7 90.4 98.0 Australand 470.0 169.6 (240.8) Others 30.1 264.3 60.5 68.7 785.8
Total 860.3 1,814.1 3,824.0 2,213.5 1,549.0
Net Profi t attributable to Shareholders 750.5 1,012.7 2,759.3 1,260.1 1,053.0
(B) BALANCE SHEETS (S$ million)
Investment Properties and Properties under Development 6,548.9 5,668.3 6,777.4 4,848.9 5,058.5 Development Properties for Sale 3,542.5 3,622.7 3,540.8 3,347.2 3,590.2 Associates and Jointly-Controlled Entities 3,928.7 4,749.9 6,450.7 7,864.6 8,684.2 Cash and Cash Equivalents 2,111.3 2,684.9 4,356.0 4,228.4 8,729.7 Other Assets 2,051.7 3,866.4 4,716.4 4,794.5 4,103.4
Total Assets 18,183.1 20,592.2 25,841.3 25,083.6 30,166.0
Equity attributable to equity holders of the Company 6,657.7 7,367.7 9,940.9 10,681.7 13,408.3 Total Borrowings 6,611.9 8,129.8 9,916.1 9,829.3 10,312.6 Minority Interests and Other Liabilities 4,913.5 5,094.7 5,984.3 4,572.6 6,445.1
Total Equities & Liabilities 18,183.1 20,592.2 25,841.3 25,083.6 30,166.0
(C) FINANCIAL RATIOS
Earnings per share (cents) 28.3 36.6 98.6 37.0 (2) 26.2
Return on Shareholders’ Funds (%) 12.5 14.5 31.9 12.2 8.7
Return on Total Assets (%) 8.2 8.7 15.7 7.9 5.5
Dividend First & fi nal dividend per share (cents) 6.0 7.0 8.0 5.5 5.5 Special dividend per share (cents) 12.0 5.0 7.0 1.5 5.0
Total dividend per share (cents) 18.0 12.0 15.0 7.0 10.5
Dividend cover (times) 1.9 3.2 6.5 4.2 2.4
Net Tangible Assets per share (S$) 2.41 2.64 3.53 3.57 3.03
Debt Equity Ratio (net of cash) (times) 0.50 0.58 0.47 0.47 0.09
Interest Cover (times) 9.19 9.73 13.64 5.50 4.54
Note:
For changes in accounting policies, adoption of new and/or revised accounting standards, as well as changes in the presentation of fi nancial statements for the respective fi nancial year under review, only the comparative fi gures for the previous year were restated to conform with the requirements arising from the said changes or adoption.
1 With effect from 1 April 2008, CapitaLand Residential Limited SBU was reorganised into 3 main components, namely, CapitaLand Residential Singapore, CapitaLand China Holdings and CapitaLand's holding in Australand.
2 Earnings per share for FY2008 was restated for the effects of the rights issue which was completed on 20 March 2009.
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STATUTORY ACCOUNTS
CONTENTS Directors’ Report ...................................................... 106 Statement by Directors ............................................ 119 Independent Auditors’ Report to the Members of CapitaLand Limited ........................ 120 Balance Sheets ..........................................................122 Income Statements .................................................. 123 Statements of Comprehensive Income.....................124 Statements of Changes in Equity ..............................125 Consolidated Statement of Cash Flows ....................127 Notes to the Financial Statements ........................... 129
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DIRECTORS’ REPORT
We are pleased to submit this annual report to the members of the Company, together with the audited fi nancial statements for the fi nancial year ended 31 December 2009.
DIRECTORS
The directors in offi ce at the date of this report are as follows:
Dr Hu Tsu Tau Peter Seah Lim Huat Liew Mun Leong Lim Chin Beng Jackson Peter Tai Richard Edward Hale Dr Victor Fung Kwok King James Koh Cher Siang Arfat Pannir Selvam Professor Kenneth Stuart Courtis Dr Fu Yuning (appointed on 27 July 2009) John Powell Morschel (appointed on 1 February 2010)
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES
Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares, debentures or options of the Company or of related corporations either at the beginning of the fi nancial year (or date of appointment, if later) or at the end of the fi nancial year.
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50, particulars of interests of directors who held offi ce at the end of the fi nancial year in shares, debentures, options and contingent awards in the Company and its related corporations are as follows: Holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
The Company
Ordinary shares
Dr Hu Tsu Tau 18,108 180,929 Peter Seah Lim Huat 107,363 180,741 Liew Mun Leong 1,032,026 2,628,307 Lim Chin Beng 410,581 642,461 Jackson Peter Tai 369,363 389,060 Richard Edward Hale 434,769 683,106 James Koh Cher Siang 24,340 64,648 Arfat Pannir Selvam 33,581 75,696 Professor Kenneth Stuart Courtis 87,545 101,614
Options to subscribe for ordinary shares exercisable
from 26/02/2006 to 25/02/2010 at an exercise price of $1.79 1 per share
Jackson Peter Tai 90,000 99,0901
Options to subscribe for ordinary shares exercisable
from 26/02/2006 to 25/02/2015 at an exercise price of $1.78 1 per share
Liew Mun Leong 200,000 –
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DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d) Holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
The Company (cont’d)
Options to subscribe for ordinary shares exercisable
from 25/02/2007 to 24/02/2011 at an exercise price of $3.28 1 per share
Dr Hu Tsu Tau 120,000 41,7601 Peter Seah Lim Huat 45,000 60,6601 Jackson Peter Tai 70,000 94,3601 Richard Edward Hale 95,000 128,0601 James Koh Cher Siang 100,000 134,8001 Arfat Pannir Selvam 60,000 80,8801
Options to subscribe for ordinary shares exercisable
from 25/02/2007 to 24/02/2016 at an exercise price of $3.26 1 per share
Liew Mun Leong 400,000 493,6001
Contingent award of Performance shares 2 to be delivered after 2008
Liew Mun Leong 0 to 829,5084 –¶ ¶ During the fi nancial year, 701,839 1 shares were released under the 2006 award to Liew Mun Leong.
Contingent award of Performance shares 2 to be delivered after 2009
Liew Mun Leong (363,6691 shares) 0 to 603,6004 0 to 727,3384
Contingent award of Performance shares 2 to be delivered after 2010
Liew Mun Leong (360,3301 shares) 0 to 600,0004 0 to 720,6604
Contingent award of Performance shares 2 to be delivered after 2011
Liew Mun Leong (359,160 shares) – 0 to 718,3204
Unvested Restricted shares 3 to be delivered after 2007
Dr Hu Tsu Tau 18,1086 – Peter Seah Lim Huat 10,5636 – Liew Mun Leong 160,9608 97,1321,7
Lim Chin Beng 13,5816 – Jackson Peter Tai 10,5636 – Richard Edward Hale 16,5996 – James Koh Cher Siang 15,0906 – Arfat Pannir Selvam 13,5816 – Professor Kenneth Stuart Courtis 7,5456 –
Unvested Restricted shares 3 to be delivered after 2008
Dr Hu Tsu Tau 0 to 36,0005 11,8761,6 Peter Seah Lim Huat 0 to 21,0005 6,9281,6
Liew Mun Leong 0 to 240,0005 105,3981,8
Lim Chin Beng 0 to 30,8365 10,1731,6
Jackson Peter Tai 0 to 21,0005 6,9281,6
Richard Edward Hale 0 to 33,0005 10,8861,6
James Koh Cher Siang 0 to 30,0005 9,8971,6
Arfat Pannir Selvam 0 to 27,0005 8,9071,6
Professor Kenneth Stuart Courtis 0 to 15,0005 4,9491,6
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DIRECTORS’ REPORT
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d) Holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
The Company (cont’d)
Contingent award of Restricted shares 3 to be delivered after 2009
Dr Hu Tsu Tau (29,594 shares) – 0 to 44,3915 Peter Seah Lim Huat (29,594 shares) – 0 to 44,3915 Liew Mun Leong (196,976 shares) – 0 to 295,4645 Lim Chin Beng (27,128 shares) – 0 to 40,6925 Jackson Peter Tai (17,263 shares) – 0 to 25,8955 Richard Edward Hale (27,128 shares) – 0 to 40,6925 James Koh Cher Siang (29,594 shares) – 0 to 44,3915 Arfat Pannir Selvam (22,196 shares) – 0 to 33,2945 Professor Kenneth Stuart Courtis (17,263 shares) – 0 to 25,8955
Related Corporations
CapitaMalls Asia Limited
Ordinary shares
Dr Hu Tsu Tau – 29,000 Peter Seah Lim Huat – 29,000 Liew Mun Leong – 442,000 Lim Chin Beng – 29,000 Jackson Peter Tai – 29,000 Richard Edward Hale – 38,000 James Koh Cher Siang – 43,000 Arfat Pannir Selvam – 54,000 Dr Fu Yuning – 54,000
The Ascott Capital Pte Ltd
$50 million 3.10% Fixed Rate Notes due 2010
Liew Mun Leong $1,000,000 $1,000,000
$150 million 4.70% Fixed Rate Notes due 2011
Liew Mun Leong $1,000,000 $1,000,000
$200 million 4.38% Fixed Rate Notes due 2012
Liew Mun Leong – $1,000,000
$50 million 5.15% Fixed Rate Notes due 2014
Liew Mun Leong – $1,000,000
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DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d)
Footnotes:
1 On 20 March 2009, adjustments were made to the numbers and exercise prices of unexercised options and the number of shares under contingent awards in accordance with the rules of the CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan respectively, arising from the CapitaLand rights issue at the price of $1.30 per rights share on the basis of one rights share for every two existing ordinary shares (“CapitaLand Rights Issue”).
2 Performance shares are shares under contingent awards pursuant to the CapitaLand Performance Share Plan.
3 Restricted shares are shares under contingent awards pursuant to the CapitaLand Restricted Stock Plan.
4 The fi nal number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
5 The fi nal number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of two to three years. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award.
6 Being the unvested half of the award.
7 Being the unvested one-third of the award.
8 Being the unvested two-thirds of the award.
Between the end of the fi nancial year and 21 January 2010, Mr Jackson Peter Tai’s interests in the Company increased from 389,060 to 582,510 shares by virtue of the exercise of 193,450 options.
DIRECTORS’ INTERESTS IN CONTRACTS
During the fi nancial year, the directors’ interests in contracts relate to:
(i) subscription of shares in the Company pursuant to a rights issue at the issue price of $1.30 per rights share on the basis of one rights share for every two existing ordinary shares; by the following directors:
No. of shares Subscription value Directors subscribed $
Dr Hu Tsu Tau 9,054 11,770 Peter Seah Lim Huat 53,681 69,785 Liew Mun Leong 516,013* 670,817* Lim Chin Beng 205,290 266,877 Richard Edward Hale 217,384 282,599 James Koh Cher Siang 12,170* 15,821* Arfat Pannir Selvam 16,790 21,827
* Includes deemed interest.
(ii) subscription of shares in a subsidiary, CapitaMalls Asia Limited, pursuant to its initial public offering at $2.12 per share; by the following directors:
No. of shares Subscription value Directors subscribed $
Dr Hu Tsu Tau 29,000 61,480 Peter Seah Lim Huat 29,000 61,480 Liew Mun Leong 442,000 937,040 Lim Chin Beng 29,000 61,480 Jackson Peter Tai 29,000 61,480 Richard Edward Hale 38,000 80,560 James Koh Cher Siang 43,000 91,160 Arfat Pannir Selvam 54,000 114,480 Dr Fu Yuning 54,000 114,480
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DIRECTORS’ REPORT
DIRECTORS’ INTERESTS IN CONTRACTS (cont’d) (iii) subscription by Mr Liew Mun Leong of $2.0 million fi xed rate notes with coupon rate of 4.38% to 5.15% per
annum issued by an indirect subsidiary of the Company, The Ascott Capital Pte Ltd, under a multicurrency medium term notes programme;
(iv) professional advisory fees of $85,500 paid or payable to Professor Kenneth Stuart Courtis; and
(v) professional fees of $89,925 paid or payable to Arfat Selvam Alliance LLC, of which Mrs Arfat Pannir Selvam is a shareholder.
Save as disclosed above, since the end of the last fi nancial year, no other director has received or become entitled to receive a benefi t by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which he is a member or with a company in which he has a substantial fi nancial interest.
Directors’ emoluments are disclosed in “Other Information”.
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES
Except as disclosed under the “Directors’ Interests in Shares or Debentures”, “Directors’ Interests in Contracts” and “Share Plans” sections of this report, neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.
SHARE PLANS
(a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan
The CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan (collectively referred to as the “Share Plans”) were approved and adopted by the members of the Company at an Extraordinary General Meeting held on 16 November 2000.
The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the Share Plans. The ERCC comprises the following members:
Mr Lim Chin Beng (Chairman) Mr Peter Seah Lim Huat
Under the Share Option Plan, options are granted to eligible participants exercisable during a certain period and at a certain price set out below. With effect from 2007, the Share Option Plan was replaced by the Restricted Stock Plan as the long term incentive scheme to employees across the Group, though the Share Option Plan remains an approved Share Incentive Scheme.
Under the Performance Share Plan, awards are granted to eligible participants. Awards represent the right of a participant to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the Company achieving prescribed performance target(s). Awards are released once the ERCC is satisfi ed that the prescribed target(s) have been achieved. There are no vesting periods beyond the performance achievement periods. The Performance Share Plan applies only to key executives.
Under the Restricted Stock Plan, awards granted to eligible participants vest only after the satisfactory completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-based restricted awards). No minimum vesting periods are prescribed under the Restricted Stock Plan. Performance-based restricted awards differ from awards granted under the Performance Share Plan in that an extended vesting period is imposed beyond the performance target completion date.
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SHARE PLANS (cont’d) (a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan (cont’d)
The principal terms of the Share Plans are:
Plans Size and Duration
The aggregate number of new shares over which the ERCC may grant pursuant to the Share Option Plan, when aggregated with the number of new shares to be issued pursuant to the exercise of options and/or such number of fully paid shares in the Company as may be required to be issued pursuant to the vesting of awards under the Performance Share Plan and the Restricted Stock Plan, shall not exceed 15% of the total number of issued shares in the capital of the Company from time to time. In addition, with effect from April 2009, the total number of new shares under awards which may be granted pursuant to the Performance Share Plan and Restricted Stock Plan during the period from the date of the last Annual General Meeting on 23 April 2009 to the date of the next Annual General Meeting shall not exceed 2% of the total number of issued shares in the capital of the Company from time to time.
The Share Plans shall continue to be in force at the discretion of the ERCC, subject to a maximum period of 10 years commencing on 16 November 2000, provided always that the Share Plans may continue beyond the above stipulated period with the approval of shareholders in general meeting and of any relevant authorities which may then be required. The Company will be seeking shareholders’ approval at the coming Annual General Meeting to adopt the new share plans.
Notwithstanding the expiry or termination of the Share Plans, any outstanding options held by and/or contingent awards made to participants prior to such expiry or termination will continue to remain valid.
Participants of the Share Plans
In respect of the Share Option Plan, the following persons shall be eligible to participate:
• Group Executives who have attained the age of 21 years and hold such rank as may be designated by the ERCC from time to time;
• Non-Executive Directors who, in the opinion of the ERCC, have contributed or will contribute to the success of the Group; and
• Executives of Parent Group and Executives of Associated Company (over which the Company has operational control) who have attained the age of 21 years and hold such rank as may be designated by the ERCC from time to time and who, in the opinion of the ERCC, have contributed or will contribute to the success of the Group.
In respect of the Performance Share Plan and Restricted Stock Plan, the following persons shall be eligible to participate:
• Group Executives who have attained the age of 21 years and hold such rank as may be designated by the ERCC from time to time;
• Non-Executive Directors (other than Non-Executive Directors of Parent Group) who, in the opinion of the ERCC, have contributed or will contribute to the success of the Group; and
• Executives of Associated Company who have attained the age of 21 years and hold such rank as may be designated by the ERCC from time to time and who, in the opinion of the ERCC, have contributed or will contribute to the success of the Group.
Persons who are the Company’s controlling shareholders or their associates as defi ned in the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) are not eligible to participate in all the Share Plans.
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DIRECTORS’ REPORT
SHARE PLANS (cont’d) (a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan (cont’d)
Maximum Entitlements
The Share Plans provide that the number of options or contingent awards to be granted be discretionary. However, under the Share Option Plan, the aggregate number of shares which may be offered by way of grant of options to Parent Group Executives and Non-Executive Directors of Parent Group shall not exceed 20% of the total number of shares available under the Share Option Plan.
Exercise Period
Under the Share Option Plan, options with acquisition prices which are equal to, or higher than, a price equal to the volume-weighted average price for the Company shares on the SGX-ST over the three consecutive Trading Days immediately preceding the date of grant of that option (the “Market Price”) may be exercised one year after the date of grant, and in accordance with a vesting schedule and the conditions (if any) to be determined by the ERCC on the date of grant of the respective options.
Options with acquisition prices which represent a discount to the Market Price may be exercised two years after the date of grant, and in accordance with a vesting schedule and the conditions (if any) to be determined by the ERCC on the date of grant of the respective options.
Acquisition Price
The acquisition price for each share in respect of which an option is exercisable shall be determined by the ERCC, in its absolute discretion, to be either:
• a price equal to the Market Price or such higher price as may be determined by the ERCC in its absolute discretion; or
• a price which is set at a discount to the Market Price, the quantum of such discount to be determined by the ERCC in its absolute discretion, provided that the maximum discount which may be given in respect of any option shall not exceed 20% of the Market Price in respect of that option.
Grant of Options
Options under the Share Option Plan may be granted at any time during the period when the said plan is in force, except that no options shall be granted during the period of 30 days immediately preceding the date of announcement of the Company’s fi nancial results. In the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is made, options may be granted on or after the fourth market day after the day on which such announcement is released.
(b) Options Granted
With effect from 2007, the Company has ceased granting options under the CapitaLand Share Option Plan and has granted contingent awards of shares under the CapitaLand Restricted Stock Plan in place of options.
For Australand, a listed subsidiary of the Group, the Australand Employees Securities Ownership Plan (“Australand ESOP”) offers a fi ve-year, interest-free loan to enable employees to purchase a specifi ed number of Australand stapled securities allocated by Australand’s Remuneration Committee. The loan has limited recourse and the employees’ obligations to repay the loan are limited to the market value of the securities at any time. The loan will be partly repaid by distributions on the securities held and must be fully repaid on cessation of employment with Australand or by the fi fth anniversary of the origination date of the loan, whichever is earlier. The last offer under Australand ESOP was made on 30 June 2006 and hence Australand ESOP will cease to exist on 30 June 2011.
In addition to the above Australand ESOP, options over unissued Australand stapled securities have previously been issued to employees under the terms of the Australand Share Option Scheme. No options have been issued under this scheme since March 2002. No future options will be issued under this scheme.
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SHARE PLANS (cont’d) (c) Options Exercised
During the fi nancial year, there were 4,185,255 new ordinary shares issued for cash fully paid in the capital of the Company pursuant to the exercise of options at exercise prices ranging from $0.35 to $4.19 per share.
Save as disclosed above, there were no shares issued during the fi nancial year by virtue of the exercise of options to take up unissued shares of the Company and its subsidiary.
(d) Unissued Shares under Options
At the end of the fi nancial year, there were the following unissued ordinary shares of the Company under options:
Exercise Price Number of (per share) Unissued Shares Number of Holders Expiry Date $ Under Options
The Company
Non-Executive Directors 2 25/02/2010 1.79 121,110 (including non-executive directors of subsidiaries and former directors) 12 24/02/2011 3.28 837,080
958,190
Group Executives 1 12/04/2010 1.14 28,476 13 11/06/2010 1.26 66,919 9 03/08/2010 1.23 23,200 17 18/06/2011 1.20 117,149 21 10/05/2012 0.54 150,720 43 28/02/2013 0.35 282,208 6 29/08/2013 0.35 8,117 91 27/02/2014 0.55 800,759 13 27/08/2014 0.90 74,480 1 24/01/2015 1.48 22,320 306 25/02/2015 1.78 3,564,709 37 26/08/2015 2.21 199,706 621 24/02/2016 3.26 11,452,039 1 19/06/2016 3.74 187,350 62 01/09/2016 4.19 770,684
17,748,836
Total 18,707,026
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DIRECTORS’ REPORT
SHARE PLANS (cont’d) (d) Unissued Shares under Options (cont’d)
The aggregate number of options granted since the commencement of the CapitaLand Share Option Plan to the end of the fi nancial year is as follows: Aggregate options granted since the commencement Aggregate Aggregate Aggregate Options adjusted of the options options outstanding Participants during the year* Share Option Plan exercised lapsed/cancelled options
Directors of the Company Dr Hu Tsu Tau 41,760 281,760 (240,000) – 41,760 Peter Seah Lim Huat 15,660 494,460 (433,800) – 60,660 Liew Mun Leong 122,200 6,257,200 (5,763,600) – 493,600 Lim Chin Beng – 798,410 (798,410) – – Jackson Peter Tai 33,450 722,250 (308,800) (220,000) 193,450 Richard Edward Hale 33,060 608,230 (480,170) – 128,060 James Koh Cher Siang 34,800 134,800 – – 134,800 Arfat Pannir Selvam 20,880 100,880 (20,000) – 80,880
301,810 9,397,990 (8,044,780) (220,000) 1,133,210 Non-Executive Directors of subsidiaries (including former directors of the Company) 100,020 9,225,880 (8,377,850) (529,450) 318,580 Group Executives (excluding Liew Mun Leong) 3,272,282 138,155,955 (86,953,568) (33,947,151) 17,255,236 Parent Group Executives and others – 2,662,482 (2,232,834) (429,648) –
Total 3,674,112 159,442,307 (105,609,032) (35,126,249) 18,707,026
* On 20 March 2009, adjustments were made to the total number and exercise prices of unexercised options in accordance with the rules of the CapitaLand Share Option Plan arising from the CapitaLand Rights Issue. Exercise prices of the unexercised options were adjusted lower by $0.47 per option (i.e., theoretical rights price) and an additional 3,674,112 options were granted to compensate for the decline in values of the said options.
At the end of the fi nancial year, there were also unissued stapled securities of a subsidiary under options as follows:
Exercise Price** Number of (per stapled Unissued security) Stapled Securities Australand Number of Holders Expiry Date A$ Under Options
Directors 1 13/03/2011 0.220 25,000 Employees 20 13/03/2011 0.220 194,250
Total 219,250
** Australand completed its rights issue of seven-for-10 rights issue at A$0.40 per security in September 2009. Exercise prices of the outstanding options granted under its Share Option Plan were adjusted to compensate for the decline in values of the said options.
Save as disclosed above, there were no unissued shares of the Company or its subsidiary under options as at the end of the fi nancial year.
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SHARE PLANS (cont’d) (e) Awards under the CapitaLand Performance Share Plan
During the fi nancial year, the ERCC of the Company has granted awards conditional on targets set for a performance period, currently prescribed to be a three-year performance period. A specifi ed number of shares will only be released by the ERCC to the recipient at the end of the qualifying performance period, provided the threshold targets are achieved.
The fi nal number of shares released will depend on the achievement of pre-determined targets over a three- year performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
Details of the movement in the awards of the Company during the year were as follows:
Movements during the year
Balance as at Lapsed/ Balance as at 1 January 2009 Granted/Adjusted^ Released Cancelled 31 December 2009
Year of No. of No. of No. of No. of No. of No. of No. of Contingent Award holders shares shares shares shares holders shares
2006 59 2,992,901 1,875,615 (4,612,252) (256,264) – – 2007 68 2,546,760 489,217 – (416,363) 60 2,619,614 2008 83 2,885,177 554,570 – (450,992) 74 2,988,755 2009 – – 4,163,565 – (308,279) 81 3,855,286
8,424,838 7,082,967 (4,612,252) (1,431,898) 9,463,655
^ On 20 March 2009, adjustments were made to the number of shares under contingent awards in accordance with the rules of the CapitaLand Performance Share Plan arising from the CapitaLand Rights Issue. The Company granted a total of 1,840,208 shares to compensate for the decline in values of the said awards.
(f) Awards under the CapitaLand Restricted Stock Plan
During the fi nancial year, the ERCC of the Company has granted awards conditional on targets set for a performance period, currently prescribed to be a one-year performance period. A specifi ed number of shares will only be released by the ERCC to the recipients at the end of the qualifying performance period, provided the threshold targets are achieved.
The fi nal number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
With effect from 2008, the ERCC of the Company has instituted a set of share ownership guidelines for senior management who receive shares under the Restricted Stock Plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of CapitaLand shares acquired through the Restricted Stock Plan which will vary according to their job grades and base salaries.
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DIRECTORS’ REPORT
SHARE PLANS (cont’d) (f) Awards under the CapitaLand Restricted Stock Plan (cont’d)
Details of the movement in the awards by the Company during the year were as follows:
Movements during the year
Balance as at Lapsed/ Balance as at 1 January 2009 Granted/Adjusted^^ Released Cancelled 31 December 2009
Year of No. of No. of No. of No. of No. of No. of No. of Contingent Award holders shares shares shares shares holders shares
2007 949 3,991,514 788,266 (2,415,731) (351,915) 868 2,012,134 2008 1,362 5,891,945 (73,529) (1,908,780) (531,000) 1,223 3,378,636 2009 – – 8,971,380 – (741,156) 1,656 8,230,224
9,883,459 9,686,117 (4,324,511)+ (1,624,071) 13,620,994
^^ On 20 March 2009, adjustments were made to the number of shares under contingent awards in accordance with the rules of the CapitaLand Restricted Stock Plan arising from the CapitaLand Rights Issue. The Company granted a total of 1,735,695 shares (of which 240,534 are to be cash- settled) to compensate for the decline in values of the said awards.
+ The number of shares released during the year was 4,324,511, of which 579,928 were cash-settled.
As at 31 December 2009, the number of shares comprised in contingent awards granted under the CapitaLand Restricted Stock Plan is as follows:
2009
Equity-settled Cash-settled
Final number of shares has not been determined (baseline award)# 6,965,085 1,265,139 Final number of shares determined but not released 4,615,777 774,993
11,580,862 2,040,132
# The fi nal number of shares released could range from 0% to 150% of the baseline award.
During the year, the aggregate number of new shares issued pursuant to the Share Plans did not exceed 15% of the issued share capital of the Company.
(g) Awards under the Australand Performance Rights Plan and Australand Tax Exempt Employee Security Plan
(i) Australand Performance Rights Plan
The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders at the 2007 Annual General Meeting (“AGM”).
The number of securities outstanding under the Australand Performance Rights Plan as at the end of the year is summarised below:
Movements during the year
Year of Balance as at Forfeited/ Balance as at Contingent Award 1 January 2009 Granted Cancelled 31 December 2009
2007 4,038,700 – (3,480,600) 558,100 2008 2,335,100 – (936,967) 1,398,133 2009 – 14,710,100 (3,040,933) 11,669,167
6,373,800 14,710,100 (7,458,500) 13,625,400
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SHARE PLANS (cont’d) (g) Awards under the Australand Performance Rights Plan and Australand Tax Exempt Employee Security
Plan (cont’d) (ii) Australand Tax Exempt Employee Security Plan
The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be issued by the company to employees for no cash consideration was approved by Australand’s shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights Plan) who have been continuously employed by the Group for a period of at least nine months as at the invitation date and are still employees as at the acquisition date are eligible to participate in the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually in the third quarter of each calendar year for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves Australand. Under the plan, employees will receive the same benefi ts as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which Australand’s stapled securities are traded on the Australian Stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
Australand did not issue any securities under the Australand Tax Exempt Employee Security Plan in 2009 (2008: 1,241,673).
AUDIT COMMITTEE
The Audit Committee members at the date of this report are Mr Richard Edward Hale (Chairman), Mr James Koh Cher Siang and Mrs Arfat Pannir Selvam.
The Audit Committee performs the functions specifi ed by Section 201B of the Companies Act, Chapter 50 (the “Act”), the Listing Manual of the SGX-ST, and the Code of Corporate Governance.
The principal responsibility of the Audit Committee is to assist the Board of Directors in fulfi lling its oversight responsibilities. Areas of review by the Audit Committee include:
• the reliability and integrity of the fi nancial statements; • the impact of new, revised or proposed changes in accounting policies or regulatory requirements on the fi nancial
statements; • the compliance with laws and regulations, particularly those of the Act and the Listing Manual of the SGX-ST; • the appropriateness of quarterly and full year announcements and reports; • the adequacy of internal controls and evaluation of adherence to such controls; • the effectiveness and effi ciency of internal and external audits; • the appointment and re-appointment of external auditors and the level of auditors’ remuneration; • the nature and extent of non-audit services and their impact on independence and objectivity of the external
auditors; • interested person transactions; • the fi ndings of internal investigation, if any; • the framework and processes established for the implementation of the terms of the collaboration agreement
with CapitaMalls Asia Limited in order to ensure that such framework and processes remain appropriate; • the processes put in place to manage any material confl icts of interest within the Group; and • all confl icts of interest matters referred to it.
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DIRECTORS’ REPORT
AUDIT COMMITTEE (cont’d) The Audit Committee also reviews arrangements by which employees of the Company may, in confi dence, raise concerns about possible improprieties in matters of fi nancial reporting or other matters. Pursuant to this, the Audit Committee has introduced a Whistle Blowing Policy where employees may raise improprieties to the Audit Committee Chairman in good faith, with the confi dence that employees making such reports will be treated fairly and be protected from reprisal.
The Audit Committee met four times in 2009. Specifi c functions performed during the year included reviewing the scope of work and strategies of both the internal and external auditors, and the results arising therefrom, including their evaluation of the system of internal controls. The Audit Committee also reviewed the assistance given by the Company’s offi cers to the auditors. The fi nancial statements of the Group and the Company were reviewed by the Audit Committee prior to the submission to the Board of Directors of the Company for adoption. The Audit Committee also met with the external and internal auditors, without the presence of management, to discuss issues of concern to them.
The Audit Committee has, in accordance with Chapter 9 of the Listing Manual of the SGX-ST, reviewed the requirements for approval and disclosure of interested person transactions, reviewed the procedures set by the Group and the Company to identify and report and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed interested person transactions.
The Audit Committee also undertook quarterly reviews of all non-audit services provided by KPMG LLP and its member fi rms and was satisfi ed that they did not affect their independence as external auditors of the Company.
The Audit Committee has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.
AUDITORS
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Dr Hu Tsu Tau Liew Mun Leong
Director Director
Singapore
26 February 2010
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In our opinion:
(a) the fi nancial statements set out on pages 122 to 205 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009, and of the results and changes in equity of the Group and of the Company, and of the cash fl ows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
The Board of Directors has, on the date of this statement, authorised these fi nancial statements for issue.
On behalf of the Board of Directors
Dr Hu Tsu Tau Liew Mun Leong
Director Director
Singapore
26 February 2010
STATEMENT BY DIRECTORS
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INDEPENDENT AUDITORS’ REPORT To the Members of CapitaLand Limited
We have audited the accompanying fi nancial statements of CapitaLand Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the balance sheets of the Group and the Company as at 31 December 2009, the income statements, statements of comprehensive income and statements of changes in equity of the Group and the Company and the statement of cash fl ows of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 122 to 205.
Management’s responsibility for the fi nancial statements Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes:
(a) devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profi t and loss accounts and balance sheets and to maintain accountability of assets;
(b) selecting and applying appropriate accounting policies; and
(c) making accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
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Opinion In our opinion:
(a) the consolidated fi nancial statements of the Group and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and the results and changes in equity of the Group and the Company and cash fl ows of the Group for the year ended on that date; and
(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMG LLP
Public Accountants and Certifi ed Public Accountants
Singapore
26 February 2010
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BALANCE SHEETS As at 31 December 2009
The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Non-Current Assets
Property, Plant and Equipment 3 1,772,301 1,633,378 7,291 8,814 Intangible Assets 4 517,273 588,936 – – Investment Properties 5 4,406,166 4,254,839 – – Properties Under Development 6 652,341 593,945 – – Interests in Subsidiaries 7 – – 12,258,126 6,828,287 Interests in Associates 8(a) 7,012,174 6,777,813 – – Interests in Jointly-Controlled Entities 9(a) 1,672,056 1,086,780 – – Other Financial Assets 10(a) 193,156 506,051 – – Deferred Tax Assets 30(a) 81,250 78,092 5,461 9,854 Other Non-Current Assets 11 40,956 19,199 147 147
16,347,673 15,539,033 12,271,025 6,847,102
Current Assets
Development Properties for Sale 12 3,590,244 3,347,168 – – Consumable Stock 26 23 – – Trade and Other Receivables 13 1,303,353 1,715,099 87,847 1,423,695 Other Financial Assets 10(b) 195,000 253,885 – – Cash and Cash Equivalents 16 8,729,718 4,228,405 2,356,466 757,801
13,818,341 9,544,580 2,444,313 2,181,496
Less: Current Liabilities
Trade and Other Payables 17 1,880,017 2,357,161 1,242,589 133,946 Short Term Bank Borrowings 20 992,974 1,005,902 – – Current Portion of Debt Securities 21 400,776 865,113 – – Current Portion of Finance Leases 22 3,836 4,212 – – Current Tax Payable 457,374 460,384 10,515 3,968
3,734,977 4,692,772 1,253,104 137,914
Net Current Assets 10,083,364 4,851,808 1,191,209 2,043,582
Less: Non-Current Liabilities
Long Term Bank Borrowings 20 3,951,770 3,639,590 – – Debt Securities 21 4,929,453 4,279,257 3,305,801 2,518,579 Finance Leases 22 33,745 35,260 – – Deferred Tax Liabilities 30(a) 173,756 130,639 65,986 39,995 Deferred Income 23 528 754 – – Other Non-Current Liabilities 18 462,022 317,539 44,597 63,869
9,551,274 8,403,039 3,416,384 2,622,443
Net Assets 16,879,763 11,987,802 10,045,850 6,268,241
Representing: Share Capital 25 6,229,227 4,396,144 6,229,227 4,396,144 Revenue Reserves 6,839,047 5,423,671 3,396,949 1,617,293 Other Reserves 26 339,999 861,874 419,674 254,804
Equity attributable to Equity Holders
of the Company 13,408,273 10,681,689 10,045,850 6,268,241 Minority Interests 3,471,490 1,306,113 – –
Total Equity 16,879,763 11,987,802 10,045,850 6,268,241
The accompanying notes form an integral part of these fi nancial statements.
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INCOME STATEMENTS Year ended 31 December 2009
The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Revenue 28 2,957,359 2,752,321 510,348 694,416 Cost of sales (1,931,165) (1,680,164) – –
Gross profi t 1,026,194 1,072,157 510,348 694,416 Other operating income 29(a) 1,238,399 1,330,657 1,284,775 93,163 Administrative expenses (412,649) (466,844) (149,068) (72,767) Other operating expenses (572,121) (97,574) (115,509) (72)
Profi t from operations 1,279,823 1,838,396 1,530,546 714,740 Finance costs 29(d) (453,922) (516,331) (144,796) (116,686) Share of results of: – associates (197,961) 318,275 – – – jointly-controlled entities 467,156 56,819 – – 269,195 375,094 – –
Profi t before taxation 29 1,095,096 1,697,159 1,385,750 598,054 Taxation 30(b) (86,462) (235,776) (760) 3,693
Profi t for the year 1,008,634 1,461,383 1,384,990 601,747
Attributable to:
Equity holders of the Company 1,052,959 1,260,113 1,384,990 601,747 Minority interests (44,325) 201,270 – –
Profi t for the year 1,008,634 1,461,383 1,384,990 601,747
Basic earnings per share (cents) 31 26.2 37.01 Diluted earnings per share (cents) 31 25.9 36.01
1 Restated for the effects of the CapitaLand Rights Issue.
The accompanying notes form an integral part of these fi nancial statements.
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STATEMENTS OF COMPREHENSIVE INCOME Year ended 31 December 2009
The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Profi t for the year 1,008,634 1,461,383 1,384,990 601,747
Other comprehensive income:
Exchange differences arising from translation of foreign operations and foreign currency loans 158,751 (343,809) – – Change in fair value of available-for-sale investments 12,436 (59,424) – – Effective portion of change in fair value of cash fl ow hedges 102,585 (179,141) – – Other capital reserve (132) (136) – – Share of other comprehensive income of associates and jointly-controlled entities (27,522) 63,646 – –
Total other comprehensive income
for the year, net of income tax 27 246,118 (518,864) – –
Total comprehensive income
for the year 1,254,752 942,519 1,384,990 601,747
Attributable to:
Equity holders of the Company 1,056,899 1,022,300 1,384,990 601,747 Minority interests 197,853 (79,781) – –
Total comprehensive income for the year 1,254,752 942,519 1,384,990 601,747
The accompanying notes form an integral part of these fi nancial statements.
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STATEMENTS OF CHANGES IN EQUITY Year ended 31 December 2009
Share Revenue Other Minority Total Capital Reserves Reserves Total Interests Equity The Group $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2009 4,396,144 5,423,671 861,874 10,681,689 1,306,113 11,987,802
Rights issue 1,789,901 – – 1,789,901 – 1,789,901 Issue of shares 43,182 – (35,028) 8,154 – 8,154 Dividends paid – (297,159) – (297,159) – (297,159) Transfer between reserves – 684,231 (684,231) – – – Equity portion of convertible bonds issued – – 173,767 173,767 – 173,767 Repurchase of convertible bonds – 4,780 (16,462) (11,682) – (11,682) Share-based payments – – 23,892 23,892 225 24,117 Minority interests contributions (net) – – – – 214,952 214,952 Effects of acquisitions and disposals of subsidiaries – – – – 1,850,642 1,850,642 Dividends paid/payable to minority interests – – – – (93,690) (93,690) Total comprehensive income for the year – 1,052,959 3,940 1,056,899 197,853 1,254,752 Share of other capital reserve of associates and a subsidiary – – (18,153) (18,153) (4,609) (22,762) Others – (29,435) 30,400 965 4 969
At 31 December 2009 6,229,227 6,839,047 339,999 13,408,273 3,471,490 16,879,763
At 1 January 2008 4,350,058 4,011,179 1,579,655 9,940,892 1,924,447 11,865,339
Issue of shares 46,086 – (25,665) 20,421 2,535 22,956 Dividends paid – (423,398) – (423,398) – (423,398) Transfer between reserves – 584,000 (584,000) – – – Equity portion of convertible bonds issued – – 82,940 82,940 – 82,940 Share-based payments – – 54,198 54,198 1,281 55,479 Transfer of equity compensation reserve to liability by a subsidiary – 2,007 (14,178) (12,171) – (12,171) Minority interests contributions (net) – – – – 169,093 169,093 Effects of acquisitions and disposals of subsidiaries – – – – (635,413) (635,413) Dividends paid/payable to minority interests – – – – (73,386) (73,386) Total comprehensive income for the year – 1,260,113 (237,813) 1,022,300 (79,781) 942,519 Share of other capital reserve of associates and a subsidiary – – (2,605) (2,605) (2,663) (5,268) Others – (10,230) 9,342 (888) – (888)
At 31 December 2008 4,396,144 5,423,671 861,874 10,681,689 1,306,113 11,987,802
The accompanying notes form an integral part of these fi nancial statements.
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STATEMENTS OF CHANGES IN EQUITY Year ended 31 December 2009
Equity Share Capital Revenue Compensation Total Capital Reserve Reserves Reserve Equity The Company $’000 $’000 $’000 $’000 $’000
At 1 January 2009 4,396,144 213,212 1,617,293 41,592 6,268,241
Dividends paid – – (297,159) – (297,159) Rights issue 1,789,901 – – – 1,789,901 Issue of shares 43,182 – – (10,151) 33,031 Equity portion of convertible bonds issued – 189,240 – – 189,240 Repurchase of convertible bonds – (18,962) 7,280 – (11,682) Share-based payments – – – 4,743 4,743 Capital return by a subsidiary – – 684,545 – 684,545 Total comprehensive income for the year – – 1,384,990 – 1,384,990
At 31 December 2009 6,229,227 383,490 3,396,949 36,184 10,045,850
At 1 January 2008 4,350,058 117,272 854,944 36,622 5,358,896
Dividends paid – – (423,398) – (423,398) Issue of shares 46,086 – – (10,767) 35,319 Equity portion of convertible bonds issued – 95,940 – – 95,940 Share-based payments – – – 15,737 15,737 Capital return by a subsidiary – – 584,000 – 584,000 Total comprehensive income for the year – – 601,747 – 601,747
At 31 December 2008 4,396,144 213,212 1,617,293 41,592 6,268,241
The accompanying notes form an integral part of these fi nancial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2009
2009 2008 $’000 $’000
Operating activities
Profi t after taxation 1,008,634 1,461,383
Adjustments for: Amortisation and impairment of intangible assets 56,565 2,003 Negative goodwill (2,958) (55,195) Allowance/(Write back) for: – foreseeable losses 304,028 88,457 – doubtful receivables 15,361 (6,995) – impairment on fi nancial assets 50,953 39,877 – impairment on interests in associates and jointly-controlled entities 55,254 3,490 Share-based expenses 28,727 57,644 Changes in fair value of fi nancial instruments 34,210 (41,677) Depreciation of property, plant and equipment 61,466 55,227 (Gain on disposal)/Write off of property, plant and equipment (21,750) (33,829) Gain on disposal of investment properties and properties under development (19,140) (76,600) Net fair value loss/(gain) from investment properties and properties under development 225,932 (300,682) Gain on disposal of non-current fi nancial assets (56,467) (22,982) Gain on disposal/dilution of subsidiaries, associates and jointly-controlled entities (925,214) (531,919) Share of results of associates and jointly-controlled entities (269,195) (375,094) Accretion of deferred income 895 – Interest expense 453,922 516,331 Interest income (76,550) (106,211) Tax expense 86,462 235,776 2,501 (552,379)
Operating profi t before working capital changes 1,011,135 909,004
Decrease/(Increase) in working capital: Trade and other receivables 172,784 458,226 Development properties for sale (109,362) (65,413) Trade and other payables (129,053) (12,268) Financial assets 58,804 47,996 Changes in working capital (6,827) 428,541
Cash generated from operations 1,004,308 1,337,545
Income tax paid (61,662) (192,136) Customer deposits and other non-current payables (refunded)/received (66,583) 24,636
Net cash generated from operating activities carried down 876,063 1,170,045
The accompanying notes form an integral part of these fi nancial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2009
2009 2008 Note $’000 $’000
Net cash generated from operating activities brought forward 876,063 1,170,045
Investing activities
Proceeds from disposal of property, plant and equipment 82,592 101,821 Purchase of property, plant and equipment (205,774) (358,230) Increase in associates and jointly-controlled entities (1,174,234) (1,346,566) Decrease/(Increase) in amounts owing by investee companies and other receivables 34,277 (16,644) Deposits for new investments – (21,131) Acquisition of investment properties and properties under development (269,831) (1,366,782) Proceeds from disposal of investment properties and properties under development 238,903 1,169,478 Disposal of non-current fi nancial assets 132,233 60,930 Dividends received from associates and jointly-controlled entities 319,069 265,792 Proceed from listing and offering of a subsidiary 2,763,112 – Acquisition of remaining interests in subsidiaries (21,786) (959,970) Net proceeds from acquisitions and disposals of subsidiaries 33(e) 449,000 1,447,461 Interest income received 33,159 87,462 Net cash generated from/(used in) investing activities 2,380,720 (936,379)
Financing activities
Proceeds from issue of shares under share option plan 8,154 22,956 Proceed from rights issue 1,789,655 – Proceeds from amounts owing to minority interests 20,382 16,678 Contribution from minority interests 203,634 162,554 Repayment of amount owing from sales of future receivables (234,279) (457,092) Proceeds from bank borrowings 2,578,312 3,455,464 Repayment of bank borrowings (3,114,737) (3,583,191) Proceeds from issue of debt securities 1,450,000 1,503,367 Repayment of debt securities (548,553) (443,431) Repayment of fi nance lease payables (4,509) (8,006) Dividends paid to minority interests (83,037) (76,895) Dividends paid to shareholders (297,159) (423,398) Interest expense paid (495,552) (556,541) Net cash generated from/(used in) fi nancing activities 1,272,311 (387,535)
Net increase/(decrease) in cash and cash equivalents 4,529,094 (153,869)
Cash and cash equivalents at beginning of the year 4,228,405 4,355,986 Effect of exchange rate changes on cash balances
held in foreign currencies (27,781) 26,288
Cash and cash equivalents at end of the year 16 8,729,718 4,228,405
The accompanying notes form an integral part of these fi nancial statements.
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NOTES TO THE FINANCIAL STATEMENTS These notes form an integral part of the fi nancial statements.
The fi nancial statements were authorised for issue by the Board of Directors on 26 February 2010.
1 DOMICILE AND ACTIVITIES
CapitaLand Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered offi ce at 168 Robinson Road, #30-01, Capital Tower, Singapore 068912.
The principal activities of the Company during the fi nancial year are those relating to investment holding and consultancy services as well as the corporate headquarters which gives direction, provides management support services and integrates the activities of its subsidiaries.
The principal activities of the signifi cant subsidiaries are those relating to investment holding, real estate development, investment in real estate fi nancial products and real estate assets, investment advisory and management services as well as management of serviced residences.
The consolidated fi nancial statements relate to the Company and its subsidiaries (the “Group”) and the Group’s interests in associates and jointly-controlled entities.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The fi nancial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“FRS”).
The fi nancial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.
These fi nancial statements are presented in Singapore Dollars, which is the Company’s functional currency. All fi nancial information presented in Singapore Dollars has been rounded to the nearest thousand, unless otherwise stated.
The preparation of the fi nancial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about signifi cant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most signifi cant effect on the amount recognised in the fi nancial statements are included in the following notes:
Note 2(m) – classifi cation of leases Note 2(n) – estimation of the percentage of completion of the projects, attributable profi ts and foreseeable
losses Note 3 – measurement of recoverable amounts of property, plant and equipment Note 4 – assumptions of recoverable amounts relating to goodwill impairment Note 5 – valuation of investment properties Note 6 – valuation of properties under development Note 24 – measurement of share-based payments Note 33(b) – valuation of assets, liabilities and contingent liabilities acquired in business combinations Note 34 – valuation of fi nancial instruments
The accounting policy relating to property under development was changed during the year arising from the adoption of amendments to FRS 40 Investment Property and the effects of this change are disclosed in note 2(f)(ii).
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NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (a) Basis of preparation (cont’d)
The Group applies FRS 1 (revised 2008) Presentation of Financial Statements, which became effective as of 1 January 2009. FRS 1 (revised 2008) requires the Group to present in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. Comparative information has been re-presented so that it also is in conformity with the revised standard. FRS 1 (revised 2008) impacts presentation of fi nancial information, and does not have any impact on the Group’s fi nancial position or results.
The Group also applies the amendments to FRS 107 Financial Instruments: Disclosures – Improving Disclosures about Financial Instruments, which became effective as of 1 January 2009. The amendments require disclosures of fi nancial instruments measured at fair value to be based on a “three-level” fair value hierarchy that refl ects the signifi cance of the input in such fair value measurements. The amendments also require additional qualitative and quantitative disclosures of liquidity risks. The additional disclosures required are shown in note 34. In accordance with the transitional rules under the standard, comparative information is not required.
Except for the above changes, the accounting policies set out below have been applied consistently by the Group to all periods presented in these fi nancial statements.
(b) Basis of consolidation
Business combinations
Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.
Any excess or defi ciency of the purchase consideration over the net fair value of the identifi able assets, liabilities and contingent liabilities is accounted for as goodwill or negative goodwill (see note 2(e)(i)).
For acquisition of subsidiaries prior to 1 January 2004 which previously met the criteria for merger of businesses such that the assets and liabilities and results were accounted for under the pooling of interests method, the classifi cation and accounting treatment of these business combinations have not been reconsidered or restated in preparing the Group’s fi nancial statements.
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.
The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases.
Associates and jointly-controlled entities
Associates are those entities in which the Group has signifi cant infl uence, but not control, over their fi nancial and operating policies. Signifi cant infl uence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Jointly-controlled entities are entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic fi nancial and operating decisions. Associates and jointly-controlled entities (collectively referred to as “equity accounted investees”) are accounted for using the equity method and are recognised initially at cost. The Group’s investments in equity accounted investees include goodwill identifi ed on acquisition, net of any accumulated impairment losses. The consolidated fi nancial statements include the Group’s share of the income, expenses and equity movements of associates and jointly-controlled entities, after adjustments to align the accounting policies with those of the Group, from the date that signifi cant infl uence or joint control commences until the date that signifi cant infl uence or joint control ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is stated at zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (b) Basis of consolidation (cont’d) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated fi nancial statements. Unrealised gains arising from transactions with associates and jointly-controlled entities are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Accounting for subsidiaries, associates and jointly-controlled entities by the Company
Investments in subsidiaries, associates and jointly-controlled entities are stated in the Company’s balance sheet at cost less accumulated impairment losses.
(c) Foreign currencies
Foreign currency transactions
Items included in the fi nancial statements of each entity in the Group are measured using the currency that best refl ects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”).
Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.
Foreign currency differences arising from retranslation are recognised in the income statement, except for differences arising from the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation (see below), available-for-sale equity instruments and fi nancial liabilities designated as hedges of net investment in a foreign operation (see note 2(g)) or qualifying cash fl ow hedges, which are recognised in other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore Dollars at exchange rates prevailing at the reporting date. The income and expenses of foreign operations are translated to Singapore Dollars at exchange rates prevailing at the dates of the transactions. Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
Foreign currency differences are recognised in other comprehensive income. When a foreign operation is disposed off, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to the income statement.
Net investment in a foreign operation
Exchange differences arising from monetary items that in substance form part of the Company’s net investment in a foreign operation are recognised in the Company’s income statement. Such exchange differences are reclassifi ed to equity in the consolidated fi nancial statements. When the foreign operation is disposed off, the cumulative amount in equity is transferred to the income statement as an adjustment to the profi t or loss arising from disposal.
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NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (d) Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefi ts, in excess of the originally assessed standard of performance of the existing asset, will fl ow to the Group. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.
Depreciation on other property, plant and equipment is provided on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment as follows:
Leasehold land and buildings (excluding serviced residence properties) Remaining lease period ranging from 17 to 19 years Hospitality plant, machinery, improvements, furniture, fi ttings and equipment 1 to 10 years Other plant, machinery and improvements 3 to 10 years Other furniture, fi ttings and equipment 2 to 5 years Motor vehicles 5 years
For serviced residence properties where the residual value at the end of the intended holding period is lower than the carrying amount, the difference in value is depreciated over the Group’s intended holding period. No depreciation is recognised where the residual value is higher than the carrying amount. Based on historical trends and past experience, the intended holding period (the period from the date of commencement of serviced residence operations to the date of expected strategic divestment of the properties) ranges from three to fi ve years. In 2009, the Group reviewed and extended the holding period of some of the properties by another three to fi ve years. The extension of the holding period does not have a signifi cant impact on the fi nancial statements.
Residual values of the properties at the end of the intended holding period are determined based on annual independent professional valuation. Residual value is the estimated amount that the Group would obtain from the disposal of a property if the property is already of the age and in the condition expected at the date when the Group has the intention to dispose that property.
Assets under construction are stated at cost and are not depreciated. Expenditure relating to assets under construction (including borrowing costs) are capitalised when incurred. Depreciation will commence when the development is completed.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
(e) Intangible assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the Group‘s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities of the acquiree. Negative goodwill represents the excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition.
Goodwill arising from the acquisition of subsidiaries is presented in intangible assets. Goodwill arising from the acquisition of associates and jointly-controlled entities is presented together with interests in associates and jointly-controlled entities.
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (e) Intangible assets (cont’d) (i) Goodwill (cont’d) Acquisition prior to 1 January 2004
Prior to 1 January 2001, goodwill and negative goodwill on acquisitions were written off against accumulated profi ts in the year of acquisition.
From 1 January 2001 to 31 December 2003, goodwill was stated at cost from the date of initial recognition and amortised over its estimated useful life of 20 years. On 1 January 2004, the Group discontinued the amortisation of goodwill. The remaining goodwill balance is subject to testing for impairment (see note 2(j)). Negative goodwill was derecognised by crediting accumulated profi ts on 1 January 2004.
Acquisition on or after 1 January 2004
Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment as described in note 2(j). Negative goodwill is credited to the income statement in the period of the acquisition.
Acquisition of minority interest
Goodwill arising from the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of the net assets acquired at the date of exchange.
(ii) Other intangible assets
Other intangible assets with fi nite useful lives are measured at cost less accumulated amortisation and impairment losses. They are amortised in the income statement on a straight-line basis over their estimated useful lives of one to 10 years, from the date on which they are available for use.
Other intangible assets with indefi nite useful lives are not amortised and are measured at cost less impairment losses.
(f) Investment properties and properties under development
(i) Investment properties
Investment properties are properties held either to earn rental or for capital appreciation or both. Investment properties are initially recognised at cost, including transaction costs, and subsequently at fair value with any change therein recognised in the income statement. The fair value is determined based on internal valuation or independent professional valuation. Independent professional valuation is obtained at least once every three years.
When an investment property is disposed off, the resulting gain or loss recognised in the income statement is the difference between the net disposal proceed and the carrying amount of the property.
(ii) Properties under development
Properties under development are properties being constructed or developed for future rental. Prior to 1 January 2009, properties under development are carried at cost less accumulated impairment losses until construction or development is completed, at which time they are transferred and accounted for as investment properties.
Change in accounting policy
In line with the amendments made to FRS 40 Investment Property, effective for fi nancial periods beginning on or after 1 January 2009, any property that is being constructed or developed for future use as an investment property will be classifi ed as an investment property. As the Group has adopted the fair value model to measure its investment properties, the fair value model has also been applied to properties under development with effect from 1 January 2009 and any changes will be recognised in the income statement. In accordance with the transitional provisions of FRS 40, the change in accounting policy has been applied prospectively.
Cap AR Fin 0312.indd 133Cap AR Fin 0312.indd 133 12/03/2010 8:24 PM12/03/2010 8:24 PM
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NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (f) Investment properties and properties under development (cont’d) (ii) Properties under development (cont’d) Change in accounting policy (cont’d)
The change in accounting policy had the following impact on the fi nancial statements: The Group 2009 $’000
Balance sheet as at 31 December
Increase in properties under development 76,004 Increase in interests in associates 48,558 Increase in deferred tax liabilities (46,431)
Income statement for the year ended 31 December
Decrease in other operating expenses 76,004 Increase in share of results of associates 48,558 Increase in taxation (46,431) Increase in minority interests (727) Increase in profi t attributable to equity holders of the Company 77,404
Earnings per share
Increase in basic earnings per share (cents) 1.93 Increase in diluted earnings per share (cents) 1.84
(g) Financial instruments
(i) Non-derivative fi nancial instruments
Non-derivative fi nancial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, fi nancial liabilities and trade and other payables.
Non-derivative fi nancial instruments are recognised initially at fair value plus, for instruments not at fair value through profi t or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative fi nancial instruments are measured as described below.
A fi nancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from the fi nancial assets expire or if the Group transfers the fi nancial assets to another party without retaining control or transfers substantially all the risks and rewards of the assets. Regular way purchases and sales of fi nancial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specifi ed in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash fl ows.
Instruments at fair value through profi t or loss
An instrument is classifi ed as fair value through profi t or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated as fair value through profi t or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable transaction costs are recognised in the income statement when incurred. Financial instruments classifi ed as fair value through profi t or loss are measured at fair value, and changes therein are recognised in the income statement.
Cap AR Fin 0312.indd 134Cap AR Fin 0312.indd 134 12/03/2010 8:24 PM12/03/2010 8:24 PM
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (g) Financial instruments (cont’d) (i) Non-derivative fi nancial instruments (cont’d) Available-for-sale fi nancial assets
The Group’s investments in equity securities and certain debt securities are classifi ed as available-for- sale fi nancial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairment losses (see note 2(g)(v)) and foreign exchange gains and losses on available-for-sale monetary items (see note 2(c)), are recognised directly in other comprehensive income and presented in the available-for-sale reserve in equity. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to the income statement.
Investments in equity securities whose fair value cannot be reliably measured are measured at cost less impairment loss.
Others
Other non-derivative fi nancial instruments are categorised as loans and receivables or fi nancial liabilities, which are measured at amortised cost using the effective interest method, less any impairment losses.
(ii) Derivative fi nancial instruments and hedging activities
The Group holds derivative fi nancial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the defi nition of a derivative, and the combined instrument is not measured at fair value through profi t or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.
Cash fl ow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash fl ow hedge are recognised directly in other comprehensive income and presented in the hedging reserve in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the income statement. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in other comprehensive income remains there until the forecast transaction occurs. When the hedged item is a non-fi nancial asset, the amount recognised in other comprehensive income is transferred to the carrying amount of the asset when it is recognised. In other cases, the amount recognised in other comprehensive income is transferred to the income statement in the same period that the hedged item affects income statement.
Fair value hedges
Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the income statement. The hedged item is stated at fair value in respect of the risk being hedged, with any gain or loss being recognised in the income statement.
Hedge of net investment in a foreign operation
Foreign currency differences arising from the retranslation of a fi nancial liability designated as a hedge of a net investment in a foreign operation are recognised in the Company’s income statement. On consolidation, such differences are recognised directly in other comprehensive income and presented in the foreign currency translation reserve in equity, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such differences are recognised in the income statement. When the hedged net investment is disposed off, the cumulative amount in other comprehensive income is transferred to the income statement as an adjustment to the profi t or loss on disposal.
Cap AR Fin 0312.indd 135Cap AR Fin 0312.indd 135 12/03/2010 8:24 PM12/03/2010 8:24 PM
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NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (g) Financial instruments (cont’d) (ii) Derivative fi nancial instruments and hedging activities (cont’d) Economic hedges
Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in the income statement as part of foreign currency gains and losses.
Separable embedded derivatives
Changes in the fair value of separable embedded derivatives are recognised immediately in the income statement.
(iii) Convertible bonds
Convertible bonds that can be converted into share capital where the number of shares issued does not vary with changes in the fair value of the bonds are accounted for as compound fi nancial instruments. The gross proceeds are allocated to the equity and liability components, with the equity component being assigned the residual amount after deducting the fair value of the liability component from the fair value of the compound fi nancial instrument.
Subsequent to initial recognition, the liability component of convertible bonds is measured at amortised cost using the effective interest method. The equity component of convertible bonds is not remeasured. When the conversion option is exercised, its carrying amount will be transferred to the share capital. When the conversion option lapses, its carrying amount will be transferred to revenue reserve.
When a convertible bond is being repurchased before its maturity date, the purchase consideration (including directly attributable costs, net of tax effects) are allocated to the liability and equity components of the instrument at the date of transaction. Any resulting gain or loss relating to the liability component is recognised in the income statement.
(iv) Financial guarantees
Financial guarantee contracts are classifi ed as fi nancial liabilities unless the Group or the Company has previously asserted explicitly that it regards such contracts as insurance contracts and accounted for them as such.
Financial guarantees classifi ed as fi nancial liabilities
Such fi nancial guarantees are recognised initially at fair value. Subsequent to initial measurement, the fi nancial guarantees are stated at the higher of (i) the amount determined in accordance with accounting policy 2(l) on provisions; and (ii) the initial fair value less cumulative amortisation. When fi nancial guarantees are terminated before their original expiry date, the carrying amount of the fi nancial guarantees is transferred to the income statement.
Financial guarantees classifi ed as insurance contracts
These fi nancial guarantees are accounted for as insurance contracts. Provision is recognised based on the Group’s or the Company‘s estimate of the ultimate cost of settling all claims incurred but unpaid at the balance sheet date.
The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.
(v) Impairment of fi nancial assets
A fi nancial asset not carried at fair value through profi t or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A fi nancial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash fl ows of that asset that can be estimated reliably.
Cap AR Fin 0312.indd 136Cap AR Fin 0312.indd 136 12/03/2010 8:24 PM12/03/2010 8:24 PM
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (g) Financial instruments (cont’d) (v) Impairment of fi nancial assets (cont’d)
Signifi cant fi nancial assets are tested for impairment on an individual basis. The remaining fi nancial assets are assessed collectively in groups that share similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than that suggested by historical trends.
An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash fl ows discounted at the original effective interest rate. Losses are recognised in the income statement and refl ected as an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the income statement.
Impairment losses on available-for-sale investment securities are recognised by transferring the cumulated loss that has been recognised in other comprehensive income, and presented in the available-for-sale reserve in equity, to the income statement. The cumulative loss that is removed from other comprehensive income and recognised in the income statement is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised in the income statement. Changes in impairment attributable to time value are refl ected as a component of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in the income statement, then the impairment loss is reversed, with the amount of the reversal recognised in the income statement. However, any subsequent recovery in the fair value of an impaired available- for-sale equity security is recognised in other comprehensive income.
(h) Share capital
Ordinary shares are classifi ed as equity.
Incremental costs directly attributable to the issue of ordinary shares and options are recognised as a deduction from equity.
Where share capital recognised as equity is repurchased (“treasury shares”), the amount of the consideration paid, including directly attributable costs, net of any tax effects, is presented as a deduction from equity. Where such shares are subsequently reissued, sold or cancelled, the consideration received is recognised as a change in equity. No gain or loss is recognised in the income statement.
(i) Development properties for sale
Development properties for sale are stated at the lower of cost plus, where appropriate, a portion of the attributable profi t, and estimated net realisable value, net of progress billings. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.
The cost of properties under development comprises specifi cally identifi ed costs, including acquisition costs, development expenditure, borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development property are also capitalised, on a specifi c identifi cation basis, as part of the cost of the development property until the completion of development.
Cap AR Fin 0312.indd 137Cap AR Fin 0312.indd 137 12/03/2010 8:24 PM12/03/2010 8:24 PM
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NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (j) Impairment – non-fi nancial assets
The carrying amounts of the Group’s non-fi nancial assets, other than investment properties, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and as and when indicators of impairment are identifi ed.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset or cash-generating unit. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash infl ows from continuing use that are largely independent of the cash infl ows of other assets or group of assets (the “cash-generating units, or CGUs”). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested refl ects the lowest level at which goodwill is monitored for internal reporting purposes.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of CGUs are allocated fi rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired.
(k) Employee benefi ts
Short term employee benefi ts
All short term employee benefi ts, including accumulated compensated absences, are recognised in the income statement in the period in which the employees render their services.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defi ned contribution plans
Contributions to post-employment benefi ts under defi ned contribution plans are recognised as an expense in the income statement as incurred.
Long service leave
Liabilities for other employee entitlements which are not expected to be paid or settled within twelve months of the balance sheet date are accrued in respect of all employees at the present value of the future amounts expected to be paid based on a projected weighted average increase in wage and salary rates. Expected future payments are discounted using interest rates on relevant government securities with terms to maturity that match, as closely as possible, the estimated future cash outfl ows.
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (k) Employee benefi ts (cont’d) Share-based payments
For equity-settled share-based payment transactions, the fair value of the services received is recognised as an expense in the income statement with a corresponding increase in equity over the vesting period during which the employees become unconditionally entitled to the equity instrument. The fair value of the services received is determined by reference to the fair value of the equity instrument granted at the date of the grant. At each balance sheet date, the number of equity instruments that are expected to be vested are estimated. The impact on the revision of original estimates is recognised as an expense and as a corresponding adjustment to equity over the remaining vesting period, unless the revision to original estimates is due to market conditions. No adjustment is made if the revision or actual outcome differs from the original estimate due to market conditions.
For cash-settled share-based payment transactions, the fair value of the goods or services received is recognised as an expense in the income statement with a corresponding increase in liability. The fair value of the services received is determined by reference to the fair value of the liability. Until the liability is settled, the fair value of the liability is remeasured at each balance sheet date and at the date of settlement, with any changes in fair value recognised in the income statement for the period.
The proceeds received from the exercise of the equity instruments, net of any directly attributable transaction costs, are credited to share capital when the equity instruments are exercised.
(l) Provision
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation.
A provision for onerous contract is recognised when the expected benefi ts to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
(m) Leases
When entities within the Group are lessees of a fi nance lease
Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Upon initial recognition, property, plant and equipment acquired through fi nance leases are capitalised at the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between fi nance expense and reduction of the lease liability. The fi nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confi rmed.
At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the arrangement is not in the legal form of a lease.
When entities within the Group are lessees of an operating lease
Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease payments made. Contingent rentals are charged to the income statement in the accounting period in which they are incurred.
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NOTES TO THE FINANCIAL STATEMENTS
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (m) Leases (cont’d) When entities within the Group are lessors of an operating lease
Assets subject to operating leases are included in either investment properties (see note 2(f)) or property, plant and equipment (see note 2(d)).
(n) Revenue recognition
Rental income
Rental income receivable under operating leases is recognised in the income statement on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefi ts to be derived from the leased asset. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingent rentals are recognised as income in the accounting period in which they are earned.
Development properties for sale
The Group recognises income on property development projects when the risks and rewards of ownership have been transferred to the buyer. In cases where the Group is obliged to perform any signifi cant acts after the transfer of legal title or equitable interest, revenue is recognised as the acts are performed based on the percentage of completion method, which is an allowed alternative method under Recommended Accounting Practice 11 Pre-completion Contracts for the Sale of Development Property (“RAP 11”) issued by the Institute of Certifi ed Public Accountants of Singapore in October 2005. Under the percentage of completion method, profi t is brought into the income statement only in respect of sales procured and to the extent that such profi t relates to the progress of construction work. The progress of construction work is measured by the proportion of the construction costs incurred to date to the estimated total construction costs for each project. Depending on the selling conditions associated with each development project, revenue is generally not recognised if the Group provides various guarantees and other fi nancial support to the buyers (“continuing involvement”) during the period of property development. Such continuing involvement by the Group would then require revenue to be deferred until the Group’s continuing involvement ceases.
Revenue excludes goods and services or other sale taxes and is after deduction of any trade discounts. No revenue is recognised if there are signifi cant uncertainties regarding recovery of the consideration due, associated costs or the possible return of unit sold.
Financial advisory and management fee
Financial advisory and management fee is recognised in the income statement as and when services are rendered.
Dividends
Dividend income is recognised on the date that the Group’s right to receive payment is established.
Interest income
Interest income is recognised as it accrues, using the effective interest method.
(o) Finance costs
Borrowing costs are recognised in the income statement using the effective interest method, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d) (p) Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t, and differences relating to investments in subsidiaries and jointly-controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.
(q) Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, for the effects of all dilutive potential ordinary shares, which comprise issued convertible bonds and share plans granted to employees.
(r) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identifi ed as the Council of Chief Executive Offi cers (“CEOs”) that makes strategic resources allocation decisions. The Council of CEOs comprises the President & CEO, key management offi cers of the corporate offi ce and CEOs of the strategic business units.
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NOTES TO THE FINANCIAL STATEMENTS
3 PROPERTY, PLANT AND EQUIPMENT Plant, Furniture, Serviced Other Assets machinery fi ttings residence Leasehold leasehold under and Motor and properties land buildings construction improvements vehicles equipment Total The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
At 1 January 2009 1,361,778 841 23,511 160,942 70,531 3,037 249,315 1,869,955 Translation differences 27,413 – (373) 9,081 (5,550) 194 16,952 47,717 Additions 51,528 – 341 126,304 8,677 128 18,007 204,985 Acquisition of subsidiaries 24,965 – – 35,425 – 55 105 60,550 Disposal of subsidiaries (40,104) – – – (137) (247) (10,311) (50,799) Disposals/Written off (53,879) – (203) (775) (1,418) (336) (11,678) (68,289) Reclassifi cation 130,737 – – (140,953) 233 – 9,983 –
At 31 December 2009 1,502,438 841 23,276 190,024 72,336 2,831 272,373 2,064,119
Accumulated depreciation
and impairment loss
At 1 January 2009 37,585 24 8,989 – 47,428 1,909 140,642 236,577 Translation differences 73 – (93) – (2,542) (40) 10,699 8,097 Depreciation for the year 10,241 17 2,024 – 8,657 403 40,124 61,466 Impairment loss 1,161 – 83 – – – – 1,244 Disposal of subsidiaries – – – – (22) (175) (4,277) (4,474) Disposals/Written off 1 – (185) – (1,162) (291) (9,455) (11,092)
At 31 December 2009 49,061 41 10,818 – 52,359 1,806 177,733 291,818
Carrying amount
At 1 January 2009 1,324,193 817 14,522 160,942 23,103 1,128 108,673 1,633,378
At 31 December 2009 1,453,377 800 12,458 190,024 19,977 1,025 94,640 1,772,301
Plant, Furniture, Serviced Other Assets machinery fi ttings residence Freehold Leasehold leasehold under and Motor and properties buildings land buildings construction improvements vehicles equipment Total The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
At 1 January 2008 1,151,105 4,385 841 14,242 325,475 73,727 3,095 231,781 1,804,651 Translation differences (83,484) – – 197 12,950 (4,741) 490 (18,489) (93,077) Additions 169,575 – – 1,879 125,340 5,315 571 42,803 345,483 Disposal of subsidiaries (21,573) – – – (88,218) (2,208) (840) (7,699) (120,538) Disposals/Written off (52,350) – – (388) (856) (1,065) (279) (11,626) (66,564) Reclassifi cation 198,505 (4,385) – 7,581 (213,749) (497) – 12,545 –
At 31 December 2008 1,361,778 – 841 23,511 160,942 70,531 3,037 249,315 1,869,955
Accumulated depreciation
and impairment loss
At 1 January 2008 31,058 139 7 6,347 – 46,088 2,932 129,462 216,033 Translation differences (9,993) – – 28 – (4,826) (1,203) (11,482) (27,476) Depreciation for the year 8,467 – 17 2,244 – 8,774 548 35,177 55,227 Impairment loss 8,053 – – 292 – – – – 8,345 Disposal of subsidiaries – – – – – (1,645) (186) (4,471) (6,302) Disposals/Written off – – – (61) – (861) (182) (8,146) (9,250) Reclassifi cation – (139) – 139 – (102) – 102 –
At 31 December 2008 37,585 – 24 8,989 – 47,428 1,909 140,642 236,577
Carrying amount
At 1 January 2008 1,120,047 4,246 834 7,895 325,475 27,639 163 102,319 1,588,618
At 31 December 2008 1,324,193 – 817 14,522 160,942 23,103 1,128 108,673 1,633,378
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3 PROPERTY, PLANT AND EQUIPMENT (cont’d) (a) As at 31 December 2009, certain property, plant and equipment with carrying value totalling approximately
$984.1 million (2008: $868.8 million) were mortgaged to banks to secure credit facilities for the Group (note 20).
(b) The value of property, plant and equipment of the Group held under fi nance leases at 31 December 2009 was $59.7 million (2008: $56.2 million).
(c) During the year, the Group recognised an impairment loss of $1.2 million relating to serviced residence properties in Hong Kong and Australia, as well as a leasehold building in Malaysia. The impairment loss was determined based on independent valuations done in December 2009, and was recognised in “Other Operating Expenses” in the income statement.
(d) During the fi nancial year, no interest was capitalised as cost of property, plant and equipment (2008: $1.7 million). Plant, Furniture, machinery and fi ttings and Motor improvements equipment vehicles Total The Company $’000 $’000 $’000 $’000
Cost
At 1 January 2009 10,250 10,664 431 21,345 Additions 1,331 1,661 – 2,992 Disposals/Written off (163) (446) – (609)
At 31 December 2009 11,418 11,879 431 23,728
Accumulated depreciation
At 1 January 2009 5,644 6,469 418 12,531 Depreciation for the year 2,645 1,646 13 4,304 Disposals/Written off (128) (270) – (398)
At 31 December 2009 8,161 7,845 431 16,437
Carrying amount
At 1 January 2009 4,606 4,195 13 8,814
At 31 December 2009 3,257 4,034 – 7,291
Cost
At 1 January 2008 8,840 8,454 431 17,725 Additions 1,442 3,376 – 4,818 Disposals/Written off (32) (1,166) – (1,198)
At 31 December 2008 10,250 10,664 431 21,345
Accumulated depreciation
At 1 January 2008 3,470 4,985 364 8,819 Depreciation for the year 2,202 1,624 54 3,880 Disposals/Written off (28) (140) – (168)
At 31 December 2008 5,644 6,469 418 12,531
Carrying amount
At 1 January 2008 5,370 3,469 67 8,906
At 31 December 2008 4,606 4,195 13 8,814
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NOTES TO THE FINANCIAL STATEMENTS
4 INTANGIBLE ASSETS Goodwill Others^ Total The Group Note $’000 $’000 $’000
Cost
At 1 January 2009 585,125 22,865 607,990 Disposals/Written off (16,195) (746) (16,941) Translation differences 1,513 324 1,837
At 31 December 2009 570,443 22,443 592,886
Accumulated amortisation and impairment loss
At 1 January 2009 9,942 9,112 19,054 Amortisation for the year – 1,564 1,564 Impairment loss 29(c)(iii) 55,001 – 55,001 Disposals/Written off – (164) (164) Translation differences – 158 158
At 31 December 2009 64,943 10,670 75,613
Carrying amount
At 1 January 2009 575,183 13,753 588,936
At 31 December 2009 505,500 11,773 517,273
Cost
At 1 January 2008 34,711 17,608 52,319 Additions 557,306 640 557,946 Reclassifi cation from other category of assets – 5,344 5,344 Disposals/Written off (4,950) (339) (5,289) Translation differences (1,942) (388) (2,330)
At 31 December 2008 585,125 22,865 607,990
Accumulated amortisation and impairment loss
At 1 January 2008 9,942 4,467 14,409 Amortisation for the year – 2,003 2,003 Reclassifi cation from other category of assets – 3,655 3,655 Written off – (339) (339) Translation differences – (674) (674)
At 31 December 2008 9,942 9,112 19,054
Carrying amount
At 1 January 2008 24,769 13,141 37,910
At 31 December 2008 575,183 13,753 588,936
^ Others comprised trademarks, franchises, patents and licences.
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4 INTANGIBLE ASSETS (cont’d) Impairment test for Goodwill
For impairment testing, the aggregate carrying amounts of goodwill allocated to each cash-generating unit (“CGU”) as at 31 December are as follows:
Carrying Value
Terminal Discount 2009 2008 Growth Rates Rates $’000 $’000
The Ascott Limited (“Ascott”) 1.2% 6.5% 481,161 552,356 Serviced residences in Europe 2.0% to 2.5% 8.2% to 11.3% 24,339 22,827
Balance as at 31 December 505,500 575,183
For the purposes of goodwill impairment testing, the recoverable amount of the CGUs are determined based on value-in-use calculation. The value-in-use calculation is a discounted cash fl ow model using cash fl ow projections based on the most recent budgets and forecasts approved by management covering three to 10 years. Cash fl ows beyond these periods are extrapolated using the estimated terminal growth rates stated in the table above. The discount rate applied is the weighted average cost of capital from the relevant business segment. The key assumptions are those relating to expected changes in average room rates and occupancy and direct costs. The terminal growth rate for each CGU used does not exceed management’s expectation of the long term average growth rate of the respective industry and country in which the CGU operates.
For the year ended 31 December 2009, an impairment charge of $55.0 million was taken in respect of the Ascott CGU. This impairment charge is included under “Other Operating Expenses” in the income statement.
5 INVESTMENT PROPERTIES The Group
2009 2008 Note $’000 $’000
At 1 January 4,254,839 6,208,211 Acquisition of subsidiaries – 8,072 Disposal of subsidiaries – (1,460,043) Additions 35,322 486,524 Transfer from Properties Under Development 6 154,612 466,617 Disposals (219,358) (1,243,098) Changes in fair value (305,363) 300,682 Translation differences 486,114 (512,126)
At 31 December 4,406,166 4,254,839
(a) Investment properties and properties under development are stated at fair value based on internal valuations or independent professional valuation. All of the properties were independently valued during the year. In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value of investment properties include market-corroborated capitalisation yield, terminal yield and discount rate. In relying on the valuation reports, management has exercised its judgement and is satisfi ed that the valuation methods and estimates are refl ective of current market conditions.
The fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion.
The valuers have considered valuation techniques including the direct comparison method, capitalisation approach and/or discounted cash fl ows in arriving at the open market value as at the balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS
5 INVESTMENT PROPERTIES (cont’d) (a) The direct comparison method involves the analysis of comparable sales of similar properties and adjusting
the sale prices to that refl ective of the investment properties. The capitalisation approach capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. The discounted cash fl ow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value.
(b) As at 31 December 2009, certain investment properties with carrying value of approximately $3,565.7 million (2008: $2,919.2 million) were mortgaged to banks to secure credit facilities for the Group (notes 20 and 21).
(c) Investment properties of the Group are held mainly for use by tenants under operating leases. Generally, most leases contain an initial non-cancellable period of up to three to six (2008: three to six) years, with an option to renew at renegotiated terms. Contingent rents, representing income based on certain sale achieved by tenants, recognised in the income statement during the year amounted to $4.6 million (2008: $4.6 million).
6 PROPERTIES UNDER DEVELOPMENT The Group
2009 2008 Note $’000 $’000
At 1 January 593,945 569,205 Additions 575,754 1,077,848 Disposal of subsidiaries (403,017) (628,339) Transfer to Investment Properties 5 (154,612) (466,617) Changes in fair value 79,431 – Impairment losses written back – 899 Translation differences (39,160) 40,949
At 31 December 652,341 593,945
(a) The accounting policy relating to properties under development was changed during the year arising from the adoption of amendments to FRS 40 Investment Property and the effects of this change are disclosed in note 2(f)(ii).
(b) During the fi nancial year, interest capitalised as cost of properties under development amounted to approximately $6.6 million (2008: $6.2 million).
(c) Certain properties under development with carrying value totalling approximately $179.2 million (2008: Nil) were mortgaged to banks to secure credit facilities for the Group (notes 20 and 21).
(d) The methods and signifi cant assumptions applied in determining the fair value of properties under development were disclosed in note 5(a).
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7 INTERESTS IN SUBSIDIARIES The Company
2009 2008 $’000 $’000
(a) Unquoted shares, at cost 7,138,412 3,259,325 Less: Allowance for impairment loss (163,132) (47,764)
6,975,280 3,211,561 Add: Amounts owing by subsidiaries: – Loan accounts (interest bearing) 3,674,750 2,730,000 – Loan accounts (interest free) 1,626,145 886,726 Less: Allowance for doubtful debts (18,049) – 5,282,846 3,616,726
12,258,126 6,828,287
(i) The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(ii) Movements in allowance for impairment loss are as follows: The Company
2009 2008 Note $’000 $’000
At 1 January (47,764) (47,764) Allowance during the year 29(c)(iii) (115,368) –
At 31 December (163,132) (47,764)
During the year, allowance for impairment loss amounting to $115.4 million was made in respect of the Company’s investments in certain subsidiaries to reduce the carrying value of investments to the recoverable amounts, taking into account the general economic and operating environment in which the relevant subsidiaries operate in. The recoverable amount for the relevant subsidiaries was estimated based on the higher of the value in use calculation using cash fl ow projections based on fi nancial budgets and forecasts covering three years period, or the fair value of the net assets as at balance sheet date.
(iii) The movement in allowance for doubtful debts relates to provision made during the year.
(b) Details of the subsidiaries are set out in note 38.
8 ASSOCIATES The Group
2009 2008 $’000 $’000
(a) Interests in associates Investment in associates 6,534,701 6,306,667 Less: Allowance for impairment loss (44,473) (3,490)
6,490,228 6,303,177 Amounts owing by associates: Loan accounts – interest free 232,658 150,746 – interest bearing 289,288 323,890 521,946 474,636
7,012,174 6,777,813
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NOTES TO THE FINANCIAL STATEMENTS
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8 ASSOCIATES (cont’d) (a) Interests in associates (cont’d)
(i) Movements in allowance for impairment loss are as follows: The Group
2009 2008 Note $’000 $’000
At 1 January (3,490) – Allowance during the year 29(c)(iii) (40,983) (3,490)
At 31 December (44,473) (3,490)
During the year, allowance for impairment loss amounting to $41.0 million was made in respect of the Group’s investments in Malaysia and Gulf Cooperation Council countries (“GCC”) to reduce the carrying value of investments to the recoverable amounts. The recoverable amount for the investment in Malaysia was estimated based on value in use calculation using cash fl ow projections based on fi nancial budgets and forecasts covering fi ve years period. The recoverable amount for the investment in GCC was estimated based on internal valuation using the residual value method.
(ii) The loans to associates form part of the Group’s net investment in associates. These loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(iii) Loan accounts include an amount of approximately $317.5 million (2008: $322.0 million) which is subordinated to the repayment of borrowings of certain associates.
(iv) The Group’s share of the contingent liabilities of the associates is $43.7 million (2008: $44.3 million).
(v) The Group’s investments in associates include investments in listed associates with a carrying amount of $3,780.0 million (2008: $3,640.5 million), for which the published price quotations are $3,578.9 million (2008: $1,543.0 million).
The Group
2009 2008 Note $’000 $’000
(b) Amounts owing by/(to) associates: Current accounts (unsecured) – interest free (trade) 95,283 68,458 – interest free (non-trade) 246,775 279,800 – interest bearing (non-trade) 325,641 194,627
667,699 542,885 Less: Allowance for doubtful receivables (5,591) (4,384)
13 662,108 538,501
Current accounts (mainly non-trade and unsecured) – interest free (227,870) (289,316) – interest bearing (78,638) (111,904)
17 (306,508) (401,220)
(c) Details of the associates are set out in note 39.
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8 ASSOCIATES (cont’d) (d) The fi nancial information of the associates is as follows:
The Group
2009 2008 $’000 $’000
Balance sheet
Total assets 33,998,399 35,419,789
Total liabilities 14,871,218 16,460,710
Income statement
Revenue 3,063,571 2,215,625
(Loss)/Profi t after taxation (870,392) 976,857
9 JOINTLY-CONTROLLED ENTITIES The Group
2009 2008 $’000 $’000
(a) Interests in jointly-controlled entities Investment in jointly-controlled entities 1,006,636 624,557 Less: Allowance for impairment loss (22,417) (8,050)
984,219 616,507 Amounts owing by jointly-controlled entities: Loan accounts – interest free 190,743 49,102 – interest bearing 509,193 421,171 699,936 470,273
1,684,155 1,086,780 Less: Allowance for doubtful receivables (12,099) –
1,672,056 1,086,780
(i) Movements in allowance for impairment loss are as follows: The Group
2009 2008 Note $’000 $’000
At 1 January (8,050) (8,050) Translation adjustments (96) – Allowance during the year 29(c)(iii) (14,271) –
At 31 December (22,417) (8,050)
(ii) The loans to jointly-controlled entities form part of the Group’s net investment in jointly-controlled entities. These loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(iii) Loan accounts include an amount of approximately $570.7 million (2008: $399.3 million) which is subordinated to the repayment of borrowings of certain jointly-controlled entities.
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NOTES TO THE FINANCIAL STATEMENTS
9 JOINTLY-CONTROLLED ENTITIES (cont’d) The Group
2009 2008 Note $’000 $’000
(b) Amounts owing by/(to) jointly-controlled entities: Current accounts (unsecured) – interest free (trade) 16,771 22,623 – interest free (non-trade) 205,916 361,040 – interest bearing (non-trade) 694 42,231
223,381 425,894 Less: Allowance for doubtful receivables (9,044) (8,811)
13 214,337 417,083
Current accounts (unsecured) – interest free (mainly non-trade) (20,135) (11,477) – interest bearing (non-trade) (11) (31,789)
17 (20,146) (43,266)
(c) Details of the jointly-controlled entities are set out in note 40.
(d) Movements in allowance for doubtful receivables are as follows: The Group
2009 2008 $’000 $’000
At 1 January (8,811) (19) Allowance during the year (21,156) (8,796) Allowance written back 8,796 – Translation differences 28 4
At 31 December (21,143) (8,811)
(e) The Group’s share of the jointly-controlled entities’ assets and liabilities is as follows:
The Group
2009 2008 $’000 $’000
Balance sheet
Investment properties 1,476,148 166,967 Properties under development 80,022 908,902 Other non-current assets 112,789 129,191
1,668,959 1,205,060 Current assets 1,965,616 2,305,543 Less: Current liabilities (843,994) (1,144,141) Net current assets 1,121,622 1,161,402
2,790,581 2,366,462 Less: Non-current liabilities (1,671,203) (1,711,700)
1,119,378 654,762
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9 JOINTLY-CONTROLLED ENTITIES (cont’d) (e) The Group’s share of the jointly-controlled entities’ results is as follows:
The Group
2009 2008 $’000 $’000
Income statement
Revenue 871,783 688,688 Expenses (730,407) (596,304) Fair value gains/(losses) on investment properties 378,589 (10,772)
Profi t before taxation 519,965 81,612 Taxation (52,809) (24,793)
Profi t after taxation 467,156 56,819
(f) The Group’s share of the capital commitments of the jointly-controlled entities is $183.5 million (2008: $279.6 million).
(g) The Group’s share of the contingent liabilities of the jointly-controlled entities is $70.8 million (2008: $7.1 million).
10 OTHER FINANCIAL ASSETS The Group
2009 2008 Note $’000 $’000
(a) Non-current other fi nancial assets
Fair value through profi t or loss convertible bonds (i) – 181,750 Available-for-sale equity securities (ii) 193,156 324,301
193,156 506,051
(i) During the year, the Group’s investment in convertible bonds was exchanged for shares in Peace Base Investments Limited, which owns a mixed development site in Shenzhen, China. Following this, Peace Base Investments Limited became an indirect subsidiary of the Group.
(ii) During the year, an impairment loss of $47.6 million was recognised in respect of an unquoted investment in Japan. The fair value of the fi nancial asset is estimated using the capitalisation method based on information derived from market surveys and reports and a capitalisation rate of 4.3%.
(b) Current other fi nancial assets The Group
2009 2008 $’000 $’000
Available-for-sale money market investment 195,000 195,000 Available-for-sale debt securities – 58,885
195,000 253,885
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NOTES TO THE FINANCIAL STATEMENTS
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11 OTHER NON-CURRENT ASSETS The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Loans and receivables 39,634 15,569 – – Club memberships 753 675 147 147 Derivative assets 569 2,955 – –
40,956 19,199 147 147
As at 31 December 2009, loans and receivables include:
(a) accrued interest receivables of (i) $16.8 million (2008: $6.3 million) from an associate which bears interest at 3.80% per annum (2008: 3.39% per annum) and is due and payable on 13 January 2012; and (ii) $5.4 million (2008: $2.0 million) from a jointly-controlled entity which bears interest at 3.04% per annum (2008: 3.10% per annum) and is due and payable on 30 November 2011;
(b) an amount of $15.9 million was mortgaged to banks to secure credit facilities of the Group (notes 20 and 21).
12 DEVELOPMENT PROPERTIES FOR SALE The Group
2009 2008 $’000 $’000
(a) Properties in the course of development, at cost 3,854,973 3,524,603 Less: Allowance for foreseeable loss (42,693) (17,190)
3,812,280 3,507,413 Add: Attributable profi t 388,237 156,301
4,200,517 3,663,714 Less: Progress billings (799,414) (645,741)
3,401,103 3,017,973
(b) Completed units, at cost 189,141 329,195
3,590,244 3,347,168
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12 DEVELOPMENT PROPERTIES FOR SALE (cont’d) (c) During the fi nancial year, the following amounts were capitalised as cost of development properties for sale:
The Group
2009 2008 Note $’000 $’000
Staff costs 29(b) 33,377 59,950 Interest and securitisation costs paid/payable 29(d) 74,179 98,281 Less: Interest received/receivable from fi xed deposit project accounts 29(a) (134) (879)
107,422 157,352
(d) As at 31 December 2009, certain development properties for sale amounting to approximately $1,158.3 million (2008: $1,274.6 million) were mortgaged to banks to secure credit facilities of the Group (notes 20 and 21).
(e) As at 31 December 2009, certain properties amounting to approximately $93.9 million (2008: $73.2 million), were acquired through unconditional exchange contracts with various land vendors. The related amount owing to land vendors is secured over the title of the properties being purchased (notes 17 and 18).
(f) As at 31 December 2008, there was a development property for sale amounting to $246.0 million whose future receivables were sold to third parties. As part of the arrangement of the sale, the relevant subsidiary of the Group had provided a fi xed and fl oating charge over assets relating to the project (including the land on which the project is being built and the unsold units) to the third parties. The related notes have been redeemed in full in 2009 and the related charge over the assets has been discharged.
(g) If the Group had adopted the completion of construction method, the effects on the fi nancial statements for the fi nancial year ended 31 December 2009 would have been as follows:
The Group Increased/(Decreased) by
2009 2008 $’000 $’000
Balance Sheet:
Development properties for sale as at 1 January (72,754) 239,979 Development properties for sale as at 31 December (240,052) (72,754) Interests in associates (23,942) 12,035 Interests in jointly-controlled entities 907 (94,049) Accumulated profi ts as at 1 January (196,906) (223,566)
Income Statement:
Revenue (166,619) 472,212 Profi t attributable to the equity holders of the Company (31,219) 26,660
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NOTES TO THE FINANCIAL STATEMENTS
13 TRADE AND OTHER RECEIVABLES The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Accrued receivables (b) 57,413 52,410 – – Trade receivables 14 143,626 251,516 31 7 Deposits and other receivables 15 140,557 243,226 526 295 Amounts owing by: – associates 8(b) 662,108 538,501 – – – jointly-controlled entities 9(b) 214,337 417,083 – – – investees: – interest free 38 34,078 – – – interest bearing 2,003 2,268 – – – related corporations 19 – – 87,033 1,423,049 – minority interests (unsecured and interest free) 35,279 62,449 – –
Loans and receivables 1,255,361 1,601,531 87,590 1,423,351 Prepayments 46,555 108,078 257 344 Derivative assets 1,437 5,490 – –
1,303,353 1,715,099 87,847 1,423,695
(a) As at 31 December 2009, certain trade and other receivables amounting to approximately $224.3 million (2008: $357.3 million) were mortgaged to banks to secure credit facilities of the Group (notes 20 and 21).
(b) In accordance with the Group’s accounting policy, income is recognised based on the progress of construction work for development properties for sale. Upon receipt of Temporary Occupation Permit, the balance of sales consideration to be billed is included as accrued receivables.
14 TRADE RECEIVABLES The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Trade receivables 154,281 261,155 31 7 Less: Allowance for doubtful receivables (10,655) (9,639) – –
13 143,626 251,516 31 7
(a) The maximum exposure to credit risk for trade receivables at the reporting date (by Strategic Business Units) is:
The Group
2009 2008 $’000 $’000
CapitaLand Residential Singapore 11,607 9,102 CapitaLand China Holdings 437 2,154 CapitaLand Commercial 15,931 38,916 CapitaMalls Asia 24,910 15,084 CapitaLand Financial 7,948 28,285 The Ascott Limited 30,177 39,359 Australand 48,950 114,420 Others 3,666 4,196
143,626 251,516
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14 TRADE RECEIVABLES (cont’d) (b) The ageing of trade receivables at the reporting date is:
Allowances Allowances Gross for doubtful Gross for doubtful Amount receivables Amount receivables 2009 2009 2008 2008 The Group $’000 $’000 $’000 $’000
Not past due 96,453 – 170,853 – Past due 1 – 30 days 26,659 – 9,292 (55) Past due 31 – 90 days 8,310 (4,717) 23,971 (3,207) More than 90 days 22,859 (5,938) 57,039 (6,377)
154,281 (10,655) 261,155 (9,639)
(c) The movements in allowances for doubtful receivables in respect of trade receivables during the year are as follows:
The Group
2009 2008 $’000 $’000
At 1 January (9,639) (8,161) Provision utilised 518 676 Provision during the year (1,906) (2,086) Acquisition/disposal of subsidiaries (net) – 6 Translation differences 372 (74)
At 31 December (10,655) (9,639)
Based on historical default rates, the Group believes that no allowance for doubtful receivables is necessary in respect of the receivables not past due or past due by up to 30 days.
15 DEPOSITS AND OTHER RECEIVABLES The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Deposits 29,337 29,635 61 150 Other receivables 116,473 215,536 465 145 Less: Allowance for doubtful receivables (20,265) (19,076) – – 96,208 196,460 465 145 Tax recoverable 15,012 17,131 – –
13 140,557 243,226 526 295
Other receivables include staff loans, interest receivables, deferred sales consideration and other recoverable. As at 31 December 2008, other receivables included an amount of $33.3 million due from a third party which bore interest ranging from 6% to 11% per annum and was unsecured. The amount has been fully repaid in 2009.
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NOTES TO THE FINANCIAL STATEMENTS
16 CASH AND CASH EQUIVALENTS The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Fixed deposits 7,656,852 3,452,899 2,355,955 756,994 Cash at banks and in hand 975,722 701,482 511 807 Amounts held under “Project Account Rules – 1997 Ed” 97,144 74,024 – –
8,729,718 4,228,405 2,356,466 757,801
(a) The withdrawal from amounts held under “Project Account Rules – 1997 Ed” are restricted to payments for expenditure incurred on development projects.
(b) The charge over all monies from time to time standing to the credit of the project accounts amounting to $25.3 million as at 31 December 2008 in respect of certain development properties for sale whose future receivables were sold, has been discharged during the year.
(c) The Group’s cash and cash equivalents are held mainly in Singapore Dollars, US Dollars, Australian Dollars, Euros, Chinese Renminbi, Hong Kong Dollars, Malaysian Ringgit and Vietnamese Dong. As at 31 December 2009, the effective interest rates for cash and cash equivalents ranged from 0% to 10.40% (2008: 0% to 7.27%).
17 TRADE AND OTHER PAYABLES The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Trade payables 121,756 111,444 1,093 1,123 Accruals (a) 530,968 589,292 34,965 28,222 Accrued development expenditure 209,535 327,053 – – Accrued capital expenditure (b) 78,565 24,333 – – Other payables (c) 366,884 339,133 22,623 2,909 Rental and other deposits 33,519 33,957 3 2 Derivative liabilities 40,539 37,231 – – Provisions 18(b) 8,995 35,654 – – Liability for employee benefi ts 24 46,272 56,006 32,677 38,296 Amounts owing to: – associates 8(b) 306,508 401,220 – – – jointly-controlled entities 9(b) 20,146 43,266 – – – related corporations 19 – – 1,151,228 63,394 Minority interests (unsecured): – interest free 116,127 67,966 – – – interest bearing 203 63,488 – – Proceeds from sale of future receivables (d) – 227,118 – –
1,880,017 2,357,161 1,242,589 133,946
(a) Accruals included accrued interest payable, accrued expenditure for property, plant and equipment purchases and accrued administrative expenses.
(b) Accrued capital expenditure relates to amounts owing by a subsidiary of the Group to land vendors under certain unconditional contracts entered into to purchase properties for future developments. The total acquisition cost of the properties has been included in development properties for sale and the amount payable is secured over the relevant development properties.
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17 TRADE AND OTHER PAYABLES (cont’d) (c) Other payables included retention sums and amounts payable in connection with capital expenditure incurred.
(d) These relate to the sale of future receivables in respect of a residential project in Singapore.
18 OTHER NON-CURRENT LIABILITIES The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Amounts owing to minority interests (unsecured): (a) – interest free 20,927 1,415 – – – interest bearing 157,919 16,400 – – Liability for employee benefi ts 24 54,689 71,838 44,597 63,869 Derivative liabilities 23,491 145,398 – – Provisions (b) 154,696 – – – Customer deposits and other non-current payables (c) 50,300 82,488 – –
462,022 317,539 44,597 63,869
(a) The amounts owing to minority interests are not expected to be repaid in the next 12 months.
(b) During the year, provisions totalling $145.9 million (2008: $35.7 million) were made for the Group’s exposure to the unavoidable costs of meeting its obligation under contractual agreements. Movements in the provisions are as follows:
The Group
2009 2008 Note $’000 $’000
At 1 January 35,654 – Provision during the year 29(c)(iii) 145,924 35,654 Provision utilised (17,887) –
At 31 December 163,691 35,654
Current 17 8,995 35,654 Non-current 154,696 –
163,691 35,654
(c) The other non-current payables include an amount of approximately $15.3 million (2008: $48.9 million), owing to land vendors on terms similar to those described in note 17(b).
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NOTES TO THE FINANCIAL STATEMENTS
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19 AMOUNTS OWING BY/(TO) RELATED CORPORATIONS The Company
2009 2008 Note $’000 $’000
Current
Amounts owing by subsidiaries: – current accounts, mainly non-trade and interest bearing 35,115 30,891 – current loan: – interest free 152,374 676,154 – interest bearing – 743,803 152,374 1,419,957 Less: Allowance for doubtful receivables (100,456) (27,799) 51,918 1,392,158
13 87,033 1,423,049
Amounts owing (to) subsidiaries: – current accounts, mainly non-trade and interest bearing (1,137) (16) – current loan (interest free) (62,428) – – current loan (interest bearing) (1,087,663) (63,378)
17 (1,151,228) (63,394)
(a) All balances with related corporations are unsecured and repayable on demand.
(b) The movement in allowance for doubtful receivables relates mainly to provision made during the year.
20 BANK BORROWINGS The Group
2009 2008 $’000 $’000
Bank borrowings – secured 2,325,741 1,331,508 – unsecured 2,619,003 3,313,984
4,944,744 4,645,492
Repayable: Not later than 1 year 992,974 1,005,902 Between 1 and 2 years 1,762,539 1,652,181 Between 2 and 5 years 2,061,723 1,887,115 After 5 years 127,508 100,294 After 1 year 3,951,770 3,639,590
4,944,744 4,645,492
(a) As at 31 December 2009, the effective interest rates for bank borrowings ranged from 0.42% to 15.04% (2008: 1.04% to 9.64%) per annum.
(b) Bank borrowings are secured by the following assets, details of which are disclosed in the respective notes to the fi nancial statements:
(i) mortgages on the borrowing subsidiaries’ property, plant and equipment, investment properties, properties under development, development properties for sale and trade receivables; and
(ii) assignment of all rights, titles and benefi ts with respect to the properties mortgaged.
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21 DEBT SECURITIES
Debt securities comprise fi xed rate notes, fl oating rate notes, hybrid rate notes and bonds issued by the Group and the Company.
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Convertible bonds (unsecured) 3,294,681 2,513,056 3,305,801 2,518,579 Notes issued 2,035,548 2,663,064 – – Less: Notes purchased (but not cancelled) – (31,750) – – Notes outstanding 2,035,548 2,631,314 – –
5,330,229 5,144,370 3,305,801 2,518,579
Secured notes 397,120 1,042,251 – – Unsecured notes and bonds 4,933,109 4,102,119 3,305,801 2,518,579
5,330,229 5,144,370 3,305,801 2,518,579
Repayable: Not later than 1 year 400,776 865,113 – – Between 1 and 2 years 906,120 402,139 – – Between 2 and 5 years 429,835 985,571 – – After 5 years 3,593,498 2,891,547 3,305,801 2,518,579 After 1 year 4,929,453 4,279,257 3,305,801 2,518,579
5,330,229 5,144,370 3,305,801 2,518,579
(a) As at 31 December 2009, the effective interest rates for debt securities ranged from 1.31% to 4.78% (2008: 2.03% to 8.87%) per annum.
(b) The repayment schedule for convertible bonds was based on its fi nal maturity dates.
(c) The Company has the following convertible bonds which remained outstanding as at 31 December 2009:
(i) In November 2006, the Company issued $430.0 million principal amount of Convertible Bonds (the “2006 Bonds”) due 2016 which carry interest rate at 2.10% per annum. The 2006 Bonds are convertible by holders into new ordinary shares in the capital of the Company at the conversion price of $6.01* at any time on or after 26 December 2006 and prior to the close of business on 5 November 2016. The 2006 Bonds may be redeemed, in whole or in part, at the option of the Company at any time on or after 15 November 2011 and not less than seven business days prior to 15 November 2016 (subject to the satisfaction of certain conditions). Unless previously redeemed by the holder on 15 November 2013 or by the Company at any time on or after 15 November 2013, the fi nal redemption date of the 2006 Bonds is 15 November 2016. The redemption price upon maturity is equal to the principal amount of the 2006 Bonds being redeemed.
During the year, the Company repurchased and cancelled $5.3 million principal amount of the 2006 Bonds for an aggregate consideration of $4.9 million in cash. As at 31 December 2009, the aggregate principal amount of the 2006 Bonds which remain outstanding is $424.7 million.
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NOTES TO THE FINANCIAL STATEMENTS
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21 DEBT SECURITIES (cont’d) (ii) In June 2007, the Company issued $1.0 billion principal amount of Convertible Bonds (the “2007
Bonds”) due 2022 which carry interest rate at 2.95% per annum. The 2007 Bonds are convertible by holders into new ordinary shares in the capital of the Company at the conversion price of $11.5218* at any time on or after 20 June 2008 and prior to the close of business on 10 June 2022. The 2007 Bonds may be redeemed, in whole or in part, at the option of the Company at any time on or after 20 June 2014 and not less than seven business days prior to 20 June 2022 (subject to satisfaction of certain conditions). Unless previously redeemed by the holder on 20 June 2017 or 20 June 2019 or by the Company at any time on or after 20 June 2014, the fi nal redemption date of the 2007 Bonds is 20 June 2022. The redemption price upon maturity is equal to the principal amount of the 2007 Bonds being redeemed.
(iii) In March 2008, the Company issued $1.3 billion principal amount of Convertible Bonds (the “2008 Bonds”) due 2018 which carry interest rate at 3.125% per annum. The 2008 Bonds are convertible by holders into new ordinary shares in the capital of the Company at the conversion price of $7.1468* at any time on or after 15 April 2008 and prior to the close of business on 23 February 2018. The 2008 Bonds may be redeemed, in whole or in part, at the option of the Company at any time on or after 5 March 2013 and not less than seven business days prior to 5 March 2018 (subject to satisfaction of certain conditions). Unless previously redeemed by the holder on 5 March 2015 or by the Company at any time on or after 5 March 2013, the fi nal redemption date of the 2008 Bonds is 5 March 2018. The redemption price upon maturity is equal to 109.998% of the principal amount of the 2008 Bonds being redeemed.
During the year, the Company repurchased and cancelled $250.0 million principal amount of the 2008 Bonds for an aggregate consideration of $238.9 million in cash. As at 31 December 2009, the aggregate principal amount of the 2008 Bonds which remain outstanding is $1.05 billion.
(iv) In September 2009, the Company issued $1.2 billion principal amount of Convertible Bonds (the “2009 Bonds”) due 2016 which carry interest rate at 2.875% per annum. The 2009 Bonds are convertible by holders into new ordinary shares in the capital of the Company at the conversion price of $4.79 at any time on or after 14 October 2009 and prior to the close of business on 24 August 2016. The 2009 Bonds may be redeemed, in whole or in part, at the option of the Company at any time on or after 3 September 2014 and not less than seven business days prior to 3 September 2016 (subject to satisfaction of certain conditions). Unless previously redeemed by the Company at any time on or after 3 September 2014, the fi nal redemption date of the 2009 Bonds is 3 September 2016. The redemption price upon maturity is equal to the principal amount of the 2009 Bonds being redeemed.
* The conversion prices have been adjusted as a result of the CapitaLand Rights Issue.
(d) Secured debt securities
(i) A stapled entity of the Group, Australand, issued Commercial Mortgage-backed Securities amounting to A$267.5 million (2008: A$680.5 million), equivalent to $336.3 million (2008: $677.2 million), maturing on 10 March 2011.
(ii) As at 31 December 2008, Australand had Unrated Floating Rate Notes amounting to A$261.8 million equivalent to $260.5 million maturing on 25 June 2009, 20 October 2010 and 10 March 2011. The notes were fully redeemed in 2009.
(iii) These notes are fully secured by a fi rst ranking real property mortgage over specifi c investment properties and by a fi xed and fl oating charge over some of the assets of Australand. Details on assets pledged are disclosed in the respective notes to the fi nancial statements.
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21 DEBT SECURITIES (cont’d) (e) Unsecured debt securities
An indirect subsidiary, The Ascott Capital Pte Ltd (“Ascott Capital”) established a $1.0 billion multicurrency medium term note programme (“MTN Programme”) in 2008. Under the MTN Programme, Ascott Capital may from time to time issue notes in tranches of one or more series in Singapore Dollars, US Dollars or any other currency and in such denominations as may be agreed between the relevant dealer of the MTN Programme and Ascott. Each series or tranche of notes may bear fi xed, fl oating or variable rates of interest.
As at 31 December 2009, Ascott Capital has outstanding notes amounting to $760.0 million (2008: $610.0 million). During the year, $250.0 million (2008: $300.0 million) was issued while $100.0 million (2008: Nil) of the notes was repaid. The outstanding notes comprise Fixed Rate Notes of $695.0 million (2008: $545.0 million) and Floating Rates Notes of $65.0 million (2008: $65.0 million) and are due from 2010 to 2014. The interest rates of these notes ranged from 1.16% to 5.15% per annum (2008: 2.03% to 4.70%).
22 FINANCE LEASES
The Group had obligations under fi nance leases that are repayable as follows:
Principal Interest Lease Payments $’000 $’000 $’000
2009
Repayable: Not later than 1 year 3,836 738 4,574 Between 1 and 5 years 17,199 2,085 19,284 After 5 years 16,546 681 17,227 After 1 year 33,745 2,766 36,511
37,581 3,504 41,085
2008
Repayable: Not later than 1 year 4,212 2,350 6,562 Between 1 and 5 years 15,476 6,873 22,349 After 5 years 19,784 2,994 22,778 After 1 year 35,260 9,867 45,127
39,472 12,217 51,689
23 DEFERRED INCOME
Deferred income as at 31 December 2009 represents a government grant received to fund the costs of an infrastructure in Singapore.
Deferred income as at 31 December 2008 represents mainly unrealised profi ts on project management services. The income was fully realised in 2009.
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NOTES TO THE FINANCIAL STATEMENTS
24 EMPLOYEE BENEFITS The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
Liability for short term accumulating compensated absences 3,120 2,432 212 204 Liability for long service leave entitlement 4,430 3,028 – – Liability for cash-settled share-based payments 11,403 14,667 845 460 Liability for staff incentive 82,008 107,717 76,217 101,501
100,961 127,844 77,274 102,165
Current 17 46,272 56,006 32,677 38,296 Non-current 18 54,689 71,838 44,597 63,869
100,961 127,844 77,274 102,165
(a) Long service leave
This liability relates principally to provision made by a foreign subsidiary in relation to employees’ leave entitlement granted after certain qualifying periods based on duration of employees’ services rendered.
(b) Staff incentive
This relates to staff incentive which is related to the achievement of the Group’s fi nancial performance and payable over a period of time.
(c) Equity compensation benefi ts
Share Plans of the Company The Share Option Plan, the Performance Share Plan and the Restricted Stock Plan (collectively referred to as the “Share Plans”) of the Company were approved and adopted by its members at an Extraordinary General Meeting held on 16 November 2000. The Share Plans are administered by the Company’s Executive Resource and Compensation Committee (“ERCC”) comprising Mr Lim Chin Beng and Mr Peter Seah Lim Huat.
Share Option Plan The Company ceased to grant options under the Share Option Plan with effect from 2007. Statutory information regarding the Share Option Plan is set out below:
(i) The exercise price of the options is set either at:
– A price equal to the volume-weighted average price on the SGX-ST over the three consecutive trading days immediately preceding the grant of the option (“Market Price”), or such higher price as may be determined by the ERCC in its absolute discretion; or
– A discount not exceeding 20% of the Market Price in respect of that option.
(ii) The options vest between one to four years from the grant date.
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) Share Option Plan (cont’d)
(iii) The options granted expire after fi ve or 10 years from the dates of the grant.
Movements in the number of outstanding options and their related weighted average exercise prices are as follows:
Weighted Weighted average No. of average No. of exercise price options exercise price options 2009 2009 2008 2008 $ (’000) $ (’000)
At 1 January 3.05 20,044 2.83 31,127 Additional 3.00 3,674 – – Forfeited/Expired 3.60 (826) 3.57 (1,093) Exercised 1.95 (4,185) 2.30 (9,990)
At 31 December 2.78 18,707 3.05 20,044
Exercisable on 31 December 2.59 13,763 2.61 8,261
Options exercised in 2009 resulted in 4,185,255 (2008: 9,990,336) shares being issued at a weighted average market price of $3.54 (2008: $6.25) each. Options were exercised on a regular basis throughout the year. The weighted average share price during the year was $3.14 (2008: $4.66).
Options outstanding at the end of the year are summarised below:
Options Weighted Options Weighted outstanding average outstanding average Range of Exercise Price 2009 contractual life 2008 contractual life Pre Modifi cation Post Modifi cation (’000) (years) (’000) (years)
$0.82 to $0.96 $0.35 to $0.49 290 3.18 372 4.18 $0.97 to $1.02 $0.50 to $0.55 951 3.88 1,683 4.97 $1.03 to $1.61 $0.56 to $1.14 103 3.45 150 4.84 $1.62 to $1.95 $1.15 to $1.48 230 1.43 268 2.26 $1.96 to $2.69 $1.49 to $2.22 3,886 5.03 5,389 5.96 $2.70 to $4.67 $2.23 to $4.20 13,247 5.87 12,182 6.87
18,707 20,044
The fair value of services received in return for options granted is measured by reference to the fair value of options granted. The fair value of the options granted is measured based on Enhanced Trinomial (Hull and White) valuation model.
The share price is based on volume-weighted average share price for three consecutive trading days prior to the grant date. The expected volatility is based on the historic volatility and calculated based on 36 months prior to the date of grant. The Company uses 10 (or fi ve) years risk-free rate for options with a 10 (or fi ve) years contractual term. Expected dividend yield is based on expected dividend payout over the one-year volume-weighted average share price prior to the grant date. Pre-vesting forfeiture rates and post-vesting forfeiture rates are based on historical option forfeiture and employee turnover rates. Exercise multiple is estimated based on historical employee exercise behaviour.
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NOTES TO THE FINANCIAL STATEMENTS
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) The Modifi cation Exercise in the Share Option Plan
On 20 March 2009, the Company completed its one-for-two rights issue at an issue price of $1.30 per new rights share (CapitaLand Rights Issue). In accordance with the Company’s Share Option Plan, in the event of a rights issue, the ERCC may as it deems appropriate determine whether the number of shares which are the subject of an award to the extent not yet vested shall be adjusted. Any adjustment under this rule should be made in a way that an option holder will not receive a benefi t that a shareholder does not receive and has been confi rmed in writing by the auditors to be in their opinion, fair and reasonable.
Adjustments to the terms of the unexercised options were made (based on the ex-rights date of 19 February 2009, and hereby also known as “modifi cation date”) in manner such that the option holder will maintain parity of fair value before and on the modifi cation date using the Equivalent Economic Value concept. The fair value of options was calculated using the Enhanced Trinomial (Hull and White) valuation model.
Exercise prices of the unexercised options were adjusted lower by $0.47 per option (i.e., theoretical rights price) and an additional 3,674,112 options were granted to refl ect the rights issue. No adjustments were made to the vesting and exercise periods of the options.
No incremental fair value of options was recognised as a result of the modifi cation exercise and the signifi cant inputs into the Enhanced Trinomial (Hull and White) valuation model were:
– Share price of $2.72, based on volume-weighted average share price for three consecutive trading days prior to the modifi cation date;
– Theoretical share price of $2.25 on the modifi cation date; – The volatility measured at the standard deviation of expected share price returns of 42.32%, based on
36 months closing share price prior to the modifi cation date; – Risk-free interest rate ranging from 0.39% to 1.64% per annum that matches the remaining life of the
award. This is based on the zero-coupon Singapore Government bond yield on modifi cation date for awards matching tenure contractual life; and
– Dividend yield of 1.95% based on expected dividend over one-year volume-weighted average share price prior to the modifi cation date.
Performance Share Plan This relates to compensation costs of the Company’s Performance Share Plan refl ecting the benefi ts accruing to the employees over the service period to which the performance criteria relate.
The number of shares outstanding under the Performance Share Plan at the end of the year is summarised below:
2009 2008 (’000) (’000)
At 1 January 8,425 8,809 Granted 5,243 6,268 Forfeited/Cancelled (1,432) (1,108) Additional shares granted arising from modifi cation 1,840 – Released (4,612) (5,544)
At 31 December 9,464 8,425
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) Performance Share Plan (cont’d)
The fi nal number of shares released will depend on the achievement of pre-determined targets over a three- year performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
The fair values of the shares are determined using Monte Carlo simulation method at the measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of Award 2009 2008
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $1.56 $7.18
Expected volatility based on 36 months closing share price prior to grant date 41.25% 29.22% MSCI AC Asia Pacifi c Free ex-Japan Real Estate Index annualised volatility based on 36 months prior to grant date 26.97% 16.15% Share price at grant date $2.03 $6.97 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the length of vesting period 0.99% 1.23% Expected dividend yield over 12 months volume-weighted share price prior to the grant date 1.77% 1.42% Correlation of return between MSCI AC Asia Pacifi c Free ex-Japan Real Estate Index and the Company’s share price measured over 36 months prior to the grant date 55.79% 47.88%
The Modifi cation Exercise in the Performance Share Plan In accordance with the rules of the Performance Share Plan, adjustments were made to the unvested shares arising from the CapitaLand Rights Issue.
Adjustments to the terms of the unvested shares were made (based on the ex-rights date of 19 February 2009, and hereby also known as “modifi cation date”) in manner such that the Performance Share Plan participants will maintain parity of fair value before and on the modifi cation date using the Equivalent Economic Value concept. The fair value of the shares was calculated using the Monte Carlo simulation model.
The adjustments resulted in additional contingent awards of 1,840,208 shares during the fi nancial year ended 31 December 2009.
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NOTES TO THE FINANCIAL STATEMENTS
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) The Modifi cation Exercise in the Performance Share Plan (cont’d)
No incremental fair value of shares was recognised as a result of the modifi cation exercise and the signifi cant inputs into the Monte Carlo simulation model were:
– Share price of $2.72, based on volume-weighted average share price for three consecutive trading days prior to the modifi cation date;
– Theoretical share price of $2.25 on the modifi cation date; – The volatility measured at the standard deviation of expected share price returns of 42.32%, based on
36 months closing share price prior to the modifi cation date; – Risk-free interest rate ranging from 0.29% to 0.80% per annum that matches the remaining life of the
award. This is based on the zero-coupon Singapore Government bond yield on modifi cation date for awards matching tenure contractual life; and
– Dividend yield of 1.95% based on expected dividend over one-year volume-weighted average share price prior to the modifi cation date.
Restricted Stock Plan – Equity-settled/Cash-settled This relates to compensation costs of the Company’s Restricted Stock Plan refl ecting the benefi ts accruing to the employees over the service period to which the performance criteria relate. The Company granted awards of shares under the Restricted Stock Plan in place of options with effect from 2007.
With effect from 2008, the ERCC of the Company has instituted a set of share ownership guidelines for senior management who receive shares under the Restricted Stock Plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of CapitaLand shares acquired through the Restricted Stock Plan which will vary according to their job grades and base salaries.
The number of shares outstanding under the Restricted Stock Plan at the end of the year is summarised below:
2009 2008 (’000) (’000)
At 1 January 9,883 4,552 Granted 7,951 8,529 Forfeited/Cancelled (1,624) (889) Additional shares granted arising from modifi cation 1,736 – Released* (4,325) (2,309)
At 31 December 13,621 9,883
* The number of shares released during the year was 4,324,511 (2008: 2,309,409), of which 579,928 (2008: 307,326) were cash-settled.
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) Restricted Stock Plan – Equity-settled/Cash-settled (cont’d)
As at 31 December 2009, the number of shares comprised in contingent awards granted under the CapitaLand Restricted Stock Plan is as follows:
2009 2008
Equity-settled Cash-settled Equity-settled Cash-settled (‘000) (‘000) (‘000) (‘000)
Final number of shares has not been determined (baseline award)# 6,965 1,265 5,090 802 Final number of shares determined but not released 4,616 775 3,435 556
11,581 2,040 8,525 1,358
# The fi nal number of shares released could range from 0% to 150% of the baseline award.
The fi nal number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
Cash-settled contingent awards of shares are measured at their current fair values at each balance sheet date.
The fair values of the equity-settled contingent award of shares are determined using Monte Carlo simulation method at the measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of Award 2009 2008
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $1.96 $6.78 Expected volatility based on 36 months closing share price prior to grant date 41.25% 29.22% Share price at grant date $2.03 $6.97 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with 0.47% 0.83% a term equal to the length of vesting period to 0.99% to 1.23% Expected dividend yield over 12 months volume-weighted share price prior to the grant date 1.77% 1.42%
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NOTES TO THE FINANCIAL STATEMENTS
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) The Modifi cation Exercise in the Restricted Stock Plan
In accordance with the rules of the Restricted Stock Plan, adjustments were made to the unvested shares arising from the CapitaLand Rights Issue.
Adjustments to the terms of the unvested shares were made (based on the ex-rights date of 19 February 2009, and hereby also known as “modifi cation date”) in manner such that the Restricted Stock Plan participants will maintain parity of fair value before and on the modifi cation date using the Equivalent Economic Value concept. The fair value of the shares was calculated using the Monte Carlo simulation model.
The number of shares was adjusted to refl ect the rights issue. The adjustments resulted in additional awards of 1,735,695 shares (of which 240,534 are to be cash-settled) during the fi nancial year ended 31 December 2009.
No incremental fair value of options was recognised as a result of the modifi cation exercise and the signifi cant inputs into the Monte Carlo simulation model were:
– Share price of $2.72, based on volume-weighted average share price for three consecutive trading days prior to the modifi cation date;
– Theoretical share price of $2.25 on the modifi cation date; – The volatility measured at the standard deviation of expected share price returns of 42.32%, based on
36 months closing share price prior to the modifi cation date; – Risk-free interest rate ranging from 0.29% to 0.80% per annum that matches the remaining life of the
award. This is based on the zero-coupon Singapore Government bond yield on modifi cation date for awards matching tenure contractual life; and
– Dividend yield of 1.95% based on expected dividend over one-year volume-weighted average share price prior to the modifi cation date.
Share Plans of Subsidiary
Australand Australand Employee Securities Ownership Plan
Australand, a listed subsidiary of the Group, has an Australand Employees Securities Ownership Plan (“Australand ESOP”) which offers a fi ve-year, interest-free loan to enable employees to purchase a specifi ed number of Australand stapled securities allocated by Australand’s Remuneration Committee. The loan has limited recourse and the employees’ obligations to repay the loan are limited to the market value of the securities at any time. The loan will be partly repaid by distributions on the securities held and must be fully repaid on cessation of employment with Australand or by the fi fth anniversary of the origination date of the loan, whichever is earlier. The last offer under Australand ESOP was made on 30 June 2006 and hence Australand ESOP will cease to exist on 30 June 2011.
In addition to the above Australand ESOP, options over unissued Australand stapled securities have previously been issued to employees under the terms of the Australand Share Option Scheme. No options have been issued under this scheme since March 2002. No future options will be issued under this scheme.
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24 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefi ts (cont’d) Australand Performance Rights Plan
The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders at the 2007 Annual General Meeting (“AGM”).
The number of shares outstanding under the Australand Performance Rights Plan as at the end of the year is summarised below:
2009 2008 (’000) (’000)
At 1 January 6,374 3,912 Granted 14,710 2,948 Exercised – (88) Forfeited/Cancelled (7,459) (398)
At 31 December 13,625 6,374
The fair value is independently determined at grant date using the Monte Carlo simulation technique. This technique involves stock prices being randomly simulated under risk neutral conditions and parameters in order to calculate the value of the performance rights at expiry. The simulation is repeated numerous times to produce distribution payoff amounts. The performance rights value is taken as the average of the payoff amounts calculated and discounted back to the valuation date. The fair value and assumptions are set out below:
Year of Award 2009 2008
Fair value of performance rights and assumptions: Fair value at measurement date A$0.29 A$0.11 Share price at grant date A$0.45 A$0.28 Expected price volatility of the company’s stapled securities 50% 45% Expected dividend yield 12.5% 8.5% Risk-free discount rate 4.2% 4.5% Expected franking rate 0% 50% Imputation credits’ valuation factor 65% 65%
Australand Tax Exempt Employee Security Plan The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be issued by the company to employees for no cash consideration was approved by Australand shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights Plan) who have been continuously employed by Australand for a period of at least nine months as at the invitation date and are still employees as at the acquisition date are eligible to participate in the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually in the third quarter of each calendar year for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves Australand. Under the plan, employees will receive the same benefi ts as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which Australand’s stapled securities is traded on the Australian Stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
Australand did not issue any securities under the Australand Tax Exempt Employee Security Plan in 2009 (2008: 1,241,673).
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NOTES TO THE FINANCIAL STATEMENTS
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25 SHARE CAPITAL The Company
2009 2008 No. of shares No. of shares Issued and fully paid (’000) (’000)
At 1 January 2,823,506 2,805,969 Issue of shares pursuant to the: – Rights issue 1,411,945 – – Exercise of options 4,185 9,990 – Performance Share and Restricted Stock Plans 8,357 7,547
At 31 December 4,247,993 2,823,506
(a) The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regards to the Company’s residual assets.
(b) On 9 February 2009, the Company announced a fully underwritten rights issue at the issue price of $1.30 per rights share on the basis of one rights share for every two existing ordinary shares. On 20 March 2009, the Company allocated and issued 1,411,944,806 rights shares for valid acceptances received and credited the share capital with $1,789,901,060.
(c) At the end of the fi nancial year, there were 18,707,026 (2008: 20,043,514) options under the Share Option Plan, a maximum of 18,927,310 (2008: 16,849,676) shares under the Performance Share Plan and 15,063,405 (2008: 11,070,581) shares under the Restricted Stock Plan, details of which are disclosed in note 24(c).
(d) As at December 2009, the convertible bonds issued by the Company which remained outstanding are as follows:
Conversion Principal Amount Maturity Date Price $ million Year S$
424.75 2016 6.01 Convertible into 70,673,876 new ordinary shares 1,000.00 2022 11.5218 Convertible into 86,791,994 new ordinary shares 1,050.00 2018 7.1468 Convertible into 146,918,900 new ordinary shares 1,200.00 2016 4.79 Convertible into 250,521,920 new ordinary shares
There has been no redemption or conversion by the bondholders of any of the above convertible bonds during the year (2008: Nil).
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25 SHARE CAPITAL
(e) The Company did not hold any treasury shares as at 31 December 2009 and 31 December 2008.
Capital Management The Group’s policy is to build a strong capital base so as to maintain investor, creditor and market confi dence and to sustain future development of the business. The Group monitors the return on capital, which the Group defi nes as total shareholders’ equity, excluding minority interests, and the level of dividends to ordinary shareholders.
The Group also monitors capital using a net debt to equity ratio, which is defi ned as net borrowings divided by total equity (including minority interests).
The Group
2009 2008 $’000 $’000
Gross borrowings 10,312,554 9,829,334 Cash and cash equivalents (8,729,718) (4,228,405)
Net debt 1,582,836 5,600,929
Total Equity 16,879,763 11,987,802
Net debt to equity ratio 0.09 0.47
The Group seeks to strike a balance between the higher returns that might be possible with higher levels of borrowings and the liquidity and security afforded by a sound capital position.
In addition, the Company has a share purchase mandate as approved by its shareholders which allows the Company greater fl exibility over its share capital structure with a view to improving, inter alia, its return on equity. The shares which are purchased may be held as treasury shares which the Company may transfer for the purposes of or pursuant to its employee share-based incentive schemes so as to enable the Company to take advantage of tax deductions under the current taxation regime. The use of treasury shares in lieu of issuing new shares would also mitigate the dilution impact on existing shareholders. No share purchase was made during the year.
There were no changes in the Group’s approach to capital management during the year.
26 OTHER RESERVES The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Capital reserve 435,483 950,762 383,490 213,212 Equity compensation reserve 94,224 105,364 36,184 41,592 Hedging reserve (37,682) (117,658) – – Available-for-sale reserve 29,722 20,028 – – Foreign currency translation reserve (181,748) (96,622) – –
339,999 861,874 419,674 254,804
The capital reserve comprises mainly the value of the option granted to bondholders to convert their convertible bonds into ordinary shares of the Company and share of associates’ and joint ventures’ capital reserve.
The equity compensation reserve comprises the cumulative value of employee services received for the issue of the options and shares under the Share Option Plan, Performance Share Plan and Restricted Stock Plan.
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NOTES TO THE FINANCIAL STATEMENTS
26 OTHER RESERVES (cont’d) The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments related to hedged transactions that have not yet occurred.
The available-for-sale reserve comprises the cumulative net change in the fair value of available-for-sale investment until the investment is derecognised.
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the fi nancial statements of foreign entities, as well as from the translation of foreign currency loans used to hedge the Group’s net investments in foreign entities.
27 OTHER COMPREHENSIVE INCOME 2009 2008
Before tax Tax expense Net of tax Before tax Tax benefi t Net of tax The Group $’000 $’000 $’000 $’000 $’000 $’000
Exchange differences arising from translation of foreign operations and foreign currency loans 151,907 – 151,907 (250,376) – (250,376) Reclassifi cation adjustment of exchange differences included in income statement 6,844 – 6,844 (93,433) – (93,433) Change in fair value of available-for-sale investments 53,839 – 53,839 (42,081) – (42,081) Reclassifi cation adjustment of available-for-sale reserve included in income statement (41,403) – (41,403) (17,343) – (17,343) Effective portion of change in fair value of cash fl ow hedges 150,916 (36,117) 114,799 (234,456) 60,841 (173,615) Reclassifi cation adjustment of hedging reserve included in income statement (12,214) – (12,214) (5,526) – (5,526) Reclassifi cation adjustment of other capital reserve included in income statement (132) – (132) (136) – (136) Share of other comprehensive income of associates and jointly-controlled entities (38,308) – (38,308) 63,646 – 63,646 Reclassifi cation adjustment of share of other comprehensive income of associates and jointly-controlled entities included in income statement 10,786 – 10,786 – – –
282,235 (36,117) 246,118 (579,705) 60,841 (518,864)
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28 REVENUE
Revenue of the Group and of the Company is analysed as follows:
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Trading of properties 1,827,156 1,464,311 – – Rental and related income 435,839 493,724 – – Fee income 353,092 413,161 47,920 57,292 Serviced residence rental and related income 325,732 368,045 – – Dividend income from subsidiaries – – 462,428 637,124 Others 15,540 13,080 – –
2,957,359 2,752,321 510,348 694,416
29 PROFIT BEFORE TAXATION
Profi t before taxation includes the following: The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
(a) Other operating income
Interest income from: – fi xed deposits 27,454 74,849 1,777 8,817 – subsidiaries – – 90,454 82,605 – associates and jointly-controlled entities 43,442 28,565 – – – investee companies and others 5,788 3,676 26 – – interest capitalised in development properties for sale 12(c) (134) (879) – – 76,550 106,211 92,257 91,422 Dividend income/capital distribution 8,151 21,560 – – Mark-to-market gain on fair value through profi t or loss fi nancial assets – 10,854 – – Mark-to-market gain on derivative instruments – 30,823 – – Gain on disposal/redemption of available-for-sale fi nancial assets 56,467 22,982 – – Gain on disposal/dilution/liquidation of subsidiaries, associates and jointly-controlled entities 925,214 531,919 1,154,210 – Foreign exchange gain 23,015 51,827 12,404 – Gain on disposal of investment properties 19,140 76,600 – – Gain on disposal of property, plant and equipment 23,576 43,679 – 1 Gain on repurchase of convertible bonds 7,059 – 8,289 – Net fair value gains from investment properties – 300,682 – – Negative goodwill arising from an increased stake in subsidiaries 2,958 55,195 – – Underwriting fee income from associates’ rights issue 19,359 – 14,802 – Others 76,910 78,325 2,813 1,740
1,238,399 1,330,657 1,284,775 93,163
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NOTES TO THE FINANCIAL STATEMENTS
29 PROFIT BEFORE TAXATION (cont’d) The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
(b) Staff costs
Wages and salaries 338,107 366,352 29,960 30,095 Contributions to defi ned contribution plans 41,230 50,194 1,600 1,182 Share-based expenses – equity-settled 24,682 53,908 4,742 15,737 – cash-settled 4,045 3,736 542 125 (Decrease)/Increase in liability for short term accumulating compensated absences (221) 774 8 33 Staff benefi ts, training/ development costs and others 48,035 68,568 2,143 2,490
455,878 543,532 38,995 49,662 Less: Staff costs capitalised in development properties for sale 12(c) (33,377) (59,950) – –
422,501 483,582 38,995 49,662
Recognised in: Cost of sales (c)(i) 215,847 212,561 – – Administrative expenses (c)(ii) 206,654 271,021 38,995 49,662
422,501 483,582 38,995 49,662
(c) (i) Cost of sales include:
Staff costs (b) 215,847 212,561 – – Provision for foreseeable losses on development properties for sale 158,104 52,803 – – Operating lease expenses 51,052 62,003 – – Operating expenses arising from investment properties that generated rental income 110,434 133,098 – – Amortisation of intangible assets 4 484 484 – –
(ii) Administrative expenses include:
Staff costs (b) 206,654 271,021 38,995 49,662 Allowance for/(Write back of) doubtful receivables 15,361 (2,728) 90,706 765 Amortisation of intangible assets 4 1,080 1,519 – – Auditors’ remuneration: – auditors of the Company 1,612 1,682 174 165 – other auditors 4,146 4,218 14 – Non-audit fees: – auditors of the Company 906 319 28 47 – other auditors 662 549 – – Depreciation of property, plant and equipment 3 61,466 55,227 4,304 3,880 Operating lease expenses 39,448 28,655 3,613 2,628
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29 PROFIT BEFORE TAXATION (cont’d) The Group The Company
2009 2008 2009 2008 Note $’000 $’000 $’000 $’000
(c) (iii) Other operating expenses include:
Net fair value losses from investment properties and properties under development 225,932 – – – Impairment of available-for-sale fi nancial assets 50,953 39,877 – – Mark-to-market loss on derivative instruments 34,210 – – – Impairment and write off of property, plant and equipment 1,826 9,850 75 45 Provision for foreseeable losses 18(b) 145,924 35,654 – – Impairment of subsidiaries 7(a)(ii) – – 115,368 – Impairment of goodwill 4 55,001 – – – Impairment of associates 8(a)(i) 40,983 3,490 – – Impairment of jointly-controlled entities 9(a)(i) 14,271 – – –
(d) Finance costs
Interest and securitisation costs paid and payable to: – subsidiaries – – 1,901 9 – bank loans and overdrafts 224,328 393,005 – 552 – debt securities 91,604 97,821 – 1,778 – minority interests 6,554 5,063 – – Convertible bonds: – interest expense 87,300 72,191 87,300 72,191 – amortisation of bond discount 43,650 31,405 43,650 31,405 – accretion of bond premium 11,945 10,735 11,945 10,735 Derivative fi nancial instruments 24,847 1,517 – – Others 44,455 10,831 – 16 Total borrowing costs 534,683 622,568 144,796 116,686 Less: Borrowing costs capitalised in: – property, plant and equipment 3 – (1,738) – – – properties under development 6(b) (6,582) (6,218) – – – development properties for sale 12(c) (74,179) (98,281) – – (80,761) (106,237) – –
453,922 516,331 144,796 116,686
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NOTES TO THE FINANCIAL STATEMENTS
30 TAXATION
(a) Deferred Taxation Acquisition/ Income Disposal of Translation At 1/1/2009 statement Equity subsidiaries differences At 31/12/2009 The Group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities
Accelerated tax depreciation 20,512 3,843 – 237 525 25,117 Discounts on compound fi nancial instruments 39,995 (12,769) 38,760 – – 65,986 Accrued income and interest receivable 9,837 (2,496) – – (1) 7,340 Capital allowances of assets in investment properties 9,727 124 – – – 9,851 Profi ts recognised on percentage of completion 31,895 47,137 – – 5,924 84,956 Fair value changes of investment properties 39,273 29,623 – (43,375) 1,299 26,820 Unremitted earnings/ Deferred income 26,580 5,403 – – 7,059 39,042 Others 9,350 2,384 – – 1,331 13,065
Total 187,169 73,249 38,760 (43,138) 16,137 272,177
Deferred tax assets
Unutilised tax losses (19,545) (45,945) – – (10,202) (75,692) Provisions and expenses (46,595) (25,615) – – (7,398) (79,608) Deferred income (13,141) (2,911) – (15) 539 (15,528) Derivative fi nancial instruments (34,905) – 36,117 – (4,821) (3,609) Others (20,436) 14,740 – – 462 (5,234)
Total (134,622) (59,731) 36,117 (15) (21,420) (179,671)
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30 TAXATION (cont’d) (a) Deferred Taxation (cont’d)
Acquisition/ Income Disposal of Translation At 1/1/2008 statement Equity subsidiaries differences At 31/12/2008 The Group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities
Accelerated tax depreciation 33,537 4,865 – (16,687) (1,203) 20,512 Discounts on compound fi nancial instruments 25,570 (6,635) 21,060 – – 39,995 Accrued income and interest receivable 4,140 5,700 – – (3) 9,837 Capital allowances of assets in investment properties 9,434 1,130 (837) – – 9,727 Profi ts recognised on percentage of completion 65,009 (5,052) (25,508) – (2,554) 31,895 Fair value changes of investment properties 89,848 68,520 314 (108,291) (11,118) 39,273 Unremitted earnings/ Deferred income 29,619 3,547 – – (6,586) 26,580 Derivative fi nancial instruments 18,784 – (14,598) – (4,186) – Others 5,312 13,084 1,018 (8,087) (1,977) 9,350
Total 281,253 85,159 (18,551) (133,065) (27,627) 187,169
Deferred tax assets
Unutilised tax losses (22,956) (5,525) (521) 7,253 2,204 (19,545) Provisions and expenses (42,391) (9,870) – – 5,666 (46,595) Deferred income (11,170) (27,950) 22,905 – 3,074 (13,141) Derivative fi nancial instruments – – (34,905) – – (34,905) Others (5,607) (14,978) – – 149 (20,436)
Total (82,124) (58,323) (12,521) 7,253 11,093 (134,622)
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NOTES TO THE FINANCIAL STATEMENTS
30 TAXATION (cont’d) (a) Deferred Taxation (cont’d)
Income At 1/1/2009 statement Equity At 31/12/2009 The Company $’000 $’000 $’000 $’000
Deferred tax liabilities
Discounts on compound fi nancial instruments 39,995 (12,769) 38,760 65,986
Deferred tax assets
Provisions (9,854) 4,393 – (5,461)
Income At 1/1/2008 statement Equity At 31/12/2008 The Company $’000 $’000 $’000 $’000
Deferred tax liabilities
Discounts on compound fi nancial instruments 25,570 (6,635) 21,060 39,995
Deferred tax assets
Provisions (9,854) – – (9,854)
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority.
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Deferred tax liabilities 173,756 130,639 65,986 39,995 Deferred tax assets (81,250) (78,092) (5,461) (9,854)
92,506 52,547 60,525 30,141
Deferred tax assets have not been recognised in respect of the following: The Group
2009 2008 $’000 $’000
Deductible temporary differences 142,711 175,953 Tax losses 244,195 184,064 Unutilised capital allowances 686 1,581
387,592 361,598
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profi ts will be available against which the subsidiaries of the Group can utilise the benefi ts. The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries operate. The deductible temporary differences do not expire under current tax legislation.
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30 TAXATION (cont’d) (b) Tax Charge
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Current tax expense – Based on current year’s results 150,982 258,402 4,616 1,613 – (Over)/Under provision in respect of prior years (49,960) (49,462) 4,520 238 – Group relief (28,080) – – 1,091 72,942 208,940 9,136 2,942 Deferred tax expense – Origination and reversal of temporary differences 8,382 19,411 (14,383) (6,635) – Under provision in respect of prior years 5,138 7,425 6,007 – 13,520 26,836 (8,376) (6,635)
Total 86,462 235,776 760 (3,693)
Reconciliation of effective tax rate The Group
2009 2008 $’000 $’000
Profi t before taxation 1,095,096 1,697,159 Less: Share of results of associates and jointly-controlled entities (269,195) (375,094)
Profi t before share of results of associates, jointly-controlled entities and taxation 825,901 1,322,065
Income tax using Singapore tax rate of 17% (2008: 18%) 140,403 237,972 Adjustments: Expenses not deductible for tax purposes 173,166 133,562 Income not subject to tax (188,188) (140,761) Effect of unrecognised tax losses and other deductible temporary differences 15,220 7,722 Effect of different tax rates in foreign jurisdictions 18,632 50,997 Over provision in respect of prior years (44,822) (42,037) Group relief (28,080) – Withholding taxes 25,247 3,225 Others (25,116) (14,904)
86,462 235,776
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NOTES TO THE FINANCIAL STATEMENTS
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30 TAXATION (cont’d) (b) Tax Charge (cont’d) Reconciliation of effective tax rate (cont’d)
The Company
2009 2008 $’000 $’000
Profi t before taxation 1,385,750 598,054
Income tax using Singapore tax rate of 17% (2008: 18%) 235,578 107,650 Adjustments: Expenses not deductible for tax purposes 33,861 18,308 Income not subject to tax (275,950) (127,849) Effect of other deductible temporary differences (2,691) (1,059) Under provision in respect of prior years 10,527 238 Consideration paid for losses transferred – 1,091 Tax benefi t received on losses arising from group relief – (1,091) Others (565) (981)
760 (3,693)
31 EARNINGS PER SHARE
(a) Basic earnings per share The Group
2009 2008 $’000 $’000
Basic earnings per share is based on: Net profi t attributable to equity holders of the Company 1,052,959 1,260,113
Number of shares (’000)
Weighted average number of ordinary shares in issue during the year 4,017,136 3,403,5441
1 Restated for the effects of the CapitaLand Rights Issue.
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31 EARNINGS PER SHARE (cont’d) (b) Diluted earnings per share
In calculating diluted earnings per share, the net profi t attributable to equity holders of the Company and weighted average number of ordinary shares in issue during the year are adjusted for the effects of all dilutive potential ordinary shares:
The Group
2009 2008 $’000 $’000
Net profi t attributable to equity holders of the Company 1,052,959 1,260,113 Profi t impact of conversion of the dilutive potential ordinary shares 35,702 57,145
Adjusted net profi t attributable to equity holders of the Company 1,088,661 1,317,258
Number of shares (’000)
Weighted average number of ordinary shares used in calculation of basic earnings per share 4,017,136 3,403,5441
Weighted average number of unissued ordinary shares from: – options under Share Option Plan 5,460 19,220 – shares under Performance Share Plan 18,927 16,850 – shares under Restricted Stock Plan 15,063 11,071 – convertible bonds 152,384 221,6391
Number of ordinary shares that would have been issued at fair value (2,549) (12,635) 189,285 256,145
Weighted average number of ordinary shares in issue (diluted) 4,206,421 3,659,6891
1 Restated for the effects of the CapitaLand Rights Issue.
32 DIVIDENDS
The Board of Directors of the Company has proposed a fi rst and fi nal dividend of 5.5 cents per share and a special dividend of 5.0 cents per share in respect of the fi nancial year ended 31 December 2009. This would amount to a payout of approximately $446.0 million based on the number of issued shares as at 31 December 2009. The dividends are subject to the shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For the fi nancial year ended 31 December 2008, a fi rst and fi nal one-tier dividend of 5.5 cents per share and a special one-tier dividend of 1.5 cents per share were approved and paid. The said dividends of $297.2 million were paid in May 2009.
33 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Acquisition of subsidiaries
There was no acquisition of signifi cant subsidiary in 2009 and 2008.
The total acquisition cost for subsidiaries acquired, which individually was not signifi cant, in aggregate amounted to $60.0 million (2008: $16.9 million). There were no signifi cant contribution by the above subsidiaries to the net profi t of the Group from the respective acquisition dates to 31 December 2009; nor to the revenue and the net profi t of the Group had the acquisition occurred on 1 January 2009, before accounting for fi nancing costs attributable to the acquisitions.
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NOTES TO THE FINANCIAL STATEMENTS
33 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d) (b) Effects of acquisitions
The cash fl ow and net assets of subsidiaries acquired are provided below:
Carrying Fair value Recognised amounts adjustments values The Group $’000 $’000 $’000
2009
Property, plant and equipment 60,550 – 60,550 Development properties for sale 365,930 – 365,930 Interests in associates 20,103 – 20,103 Other non-current assets 5,133 – 5,133 Current assets 167,713 – 167,713 Current liabilities (398,040) – (398,040) Minority interests (30,253) – (30,253)
191,136 – 191,136 Amounts previously accounted for as associates, jointly-controlled entities and fi nancial assets (118,550)
Net assets acquired/Purchase consideration 72,586 Less: Cash of subsidiaries acquired (12,535)
Cash outfl ow on acquisition of subsidiaries 60,051
2008
Investment properties 8,072 – 8,072 Current assets 26,273 – 26,273 Current liabilities (9,654) – (9,654) Non-current liabilities (256) – (256) Minority interests (7,514) – (7,514)
16,921 – 16,921 Amounts previously accounted for as associates and jointly-controlled entities 18
Net assets acquired/Purchase consideration 16,939
Cash outfl ow on acquisition of subsidiaries 16,939
(c) Disposals of subsidiaries
(i) During the year, the Group disposed off the following signifi cant subsidiary for a total consideration of $171.4 million: Date Effective Interest Name of Subsidiary Disposed Disposed
Pagesus Pte. Ltd.* October 2009 100%
* This subsidiary was sold to Raffl es City China Fund Ltd in which the Group has an effective interest of 44.8% as at end-2009.
The disposed subsidiaries previously incurred a net loss of $4.4 million for the year ended 31 December 2008 but contributed a net profi t of $132.6 million from 1 January 2009 to the date of disposal.
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33 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d) (c) Disposals of subsidiaries (cont’d)
(ii) In 2008, the Group disposed off the following signifi cant subsidiaries for a total consideration of $885.4 million: Date Effective Interest Name of Subsidiary Disposed Disposed
Calderdale Pte Ltd September 2008 100.0% Floral Land Pte Ltd September 2008 80.0% Hua Qing Holdings Pte Ltd September 2008 58.8% Hua Lei Holdings Pte Ltd September 2008 100.0%
The disposed subsidiaries previously contributed net profi t of $36.7 million for the year ended 31 December 2007 and $149.8 million from 1 January 2008 to the respective dates of disposal.
(d) Effects of disposals
The cash fl ow and net assets of subsidiaries disposed are provided below: The Group
2009 2008 $’000 $’000
Property, plant and equipment 46,325 114,236 Investment properties and properties under development 403,017 2,088,382 Other non-current assets 3,419 3,194 Current assets 13,730 208,172 Current liabilities (239,695) (1,033,886) Interest bearing liabilities (16,785) (547,510) Non-current liabilities (43,137) (137,003) Minority interests (3,508) (185,072)
Net assets 163,366 510,513 Less: Equity interests retained as associates and jointly-controlled entities – (55,340)
Net assets disposed 163,366 455,173 Realisation of reserves 2,656 (93,436) Deferred income 21,387 108,863 Gain on disposal of subsidiaries 23,036 414,767
Sale consideration 210,445 885,367 Repayment of shareholders‘ loan 244,251 779,745 Deferred payment (909) (66,083) Deferred sale consideration received in relation to prior year’s disposal of subsidiaries 67,991 – Cash of subsidiaries disposed (12,727) (134,629)
Cash infl ow on disposal of subsidiaries 509,051 1,464,400
(e) Net effects on acquisitions and disposals of subsidiaries The Group
2009 2008 $’000 $’000
Net cash infl ow from acquisitions and disposals of subsidiaries 449,000 1,447,461
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NOTES TO THE FINANCIAL STATEMENTS
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34 FINANCIAL RISK MANAGEMENT
(a) Financial risk management objectives and policies
The Group and the Company are exposed to market risk (including interest rate, foreign currency and price risks), credit risk and liquidity risk arising from its diversifi ed portfolio business. The Group’s risk management approach seeks to minimise the potential material adverse effects from these exposures. The Group uses fi nancial instruments such as currency forwards, interest rate swaps and caps as well as foreign currency borrowings to hedge certain fi nancial risk exposures.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board has established the Risk Committee to strengthen its risk management processes and framework. The Risk Committee is assisted by an independent unit called the Risk Assessment Group (“RAG”). RAG generates a comprehensive portfolio risk report to assist the committee. This quarterly report measures a spectrum of risks, including property market risks, construction risks, interest rate risks, refi nancing risks and currency risks.
(b) Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will have on the Group’s income or the value of its holdings of fi nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
(i) Interest rate risk The Group’s exposure to market risk for changes in interest rate environment relates mainly to its investment in fi nancial products and debt obligations.
The investments in fi nancial products are short term in nature and they are not held for trading or speculative purposes. The fi nancial products comprise fi xed deposits or short term commercial papers which yield better returns than cash at bank.
The Group manages its interest rate exposure by maintaining a prudent mix of fi xed and fl oating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve certain level of protection against rate hikes. The Group also uses hedging instruments such as interest rate swaps and caps to minimise its exposure to interest rate volatility. The Group classifi es these interest rate swaps and caps as cash fl ow hedges.
The fair value loss of swaps as at 31 December 2009 was $44.2 million (2008: fair value loss of $148.6 million).
Sensitivity analysis For interest rate swaps accounted for as cash fl ow hedges and other variable rate fi nancial liabilities, it is estimated that an increase of 100 basis points in interest rate at the reporting date would lead to a reduction in the Group’s profi t before tax (and accumulated profi ts) by approximately $34.6 million (2008: $25.0 million). A decrease in 100 basis points in interest rate would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant, and has not taken into account the effects of qualifying borrowing costs allowed for capitalisation, the associated tax effects and share of minority interests.
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34 FINANCIAL RISK MANAGEMENT (cont’d) (b) Market risk (cont’d) (ii) Foreign currency risk
The Group operates internationally and is exposed to various currencies, mainly Australian Dollars, Chinese Renminbi, Euros, Hong Kong Dollars, Japanese Yen, Sterling Pounds and US Dollars.
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which its property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.
The Group also uses forward exchange contracts to hedge its foreign currency risk, where feasible. It generally enters into forward exchange contracts with maturities ranging between three months and fi ve years which are rolled over at market rates at maturity.
The net fair value loss of the above forward exchange contracts as at 31 December 2009 was $21.4 million (2008: net fair value loss of $8.9 million).
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.
In relation to its investments in foreign subsidiaries whose net assets are exposed to currency translation risks and which are held for long term investment purposes, the differences arising from such translation are recorded under the foreign currency translation reserve. These translation differences are reviewed and monitored on a regular basis.
The Group’s and the Company’s exposure to foreign currencies as at 31 December 2009 and 31 December 2008 are as follows: Total US Australian Chinese Hong Kong Japanese Sterling Foreign Dollars Dollars Renminbi Dollars Yen Euros Pounds Others* Currencies The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2009
Other fi nancial assets 33,036 – – 3,114 152,982 93 – – 189,225 Trade and other receivables 278,346 273,476 226,566 46,028 12,270 30,360 37,277 38,700 943,023 Cash and cash equivalents 410,178 161,010 757,609 48,624 19,908 55,532 15,409 136,328 1,604,598 Borrowings and fi nance leases (1,417,495) (1,800,288) (354,304) (346,137) (195,430) (425,745) (61,113) (415,660) (5,016,172) Trade and other payables (150,357) (271,336) (588,206) (18,090) (18,537) (49,680) (5,733) (77,591) (1,179,530)
Gross currency exposure (846,292) (1,637,138) 41,665 (266,461) (28,807) (389,440) (14,160) (318,223) (3,458,856) Less: Net fi nancial liabilities/(assets) denominated in the respective entities‘ functional currencies (74,814) 2,079,071 (118,753) 232,303 248,017 394,980 46,622 473,668 3,281,094 Foreign exchange forward contracts – (407,400) – – (63,872) – (39,750) – (511,022) Less: Available-for-sale fi nancial assets (272) – – – (152,982) – – – (153,254)
Net currency exposure (921,378) 34,533 (77,088) (34,158) 2,356 5,540 (7,288) 155,445 (842,038)
* Others include mainly Malaysian Ringgit, Thai Baht, Indian Rupee and Vietnamese Dong.
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NOTES TO THE FINANCIAL STATEMENTS
34 FINANCIAL RISK MANAGEMENT (cont’d) (b) Market risk (cont’d) (ii) Foreign currency risk (cont’d)
Total US Australian Chinese Hong Kong Japanese Sterling Foreign Dollars Dollars Renminbi Dollars Yen Euros Pounds Others* Currencies The Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2008
Other fi nancial assets 284,787 – – 120,903 165,675 33 – 19 571,417 Trade and other receivables 231,738 367,497 541,978 131,409 19,444 29,972 40,902 42,167 1,405,107 Cash and cash equivalents 480,027 132,717 464,000 68,765 14,604 57,041 12,890 80,165 1,310,209 Borrowings and fi nance leases (1,599,137) (2,073,313) (312,638) (656,267) (422,740) (423,159) (69,725) (175,590) (5,732,569) Trade and other payables (154,645) (249,297) (806,235) (30,087) (16,142) (54,807) (7,579) (69,771) (1,388,563)
Gross currency exposure (757,230) (1,822,396) (112,895) (365,277) (239,159) (390,920) (23,512) (123,010) (3,834,399) Less: Net fi nancial liabilities denominated in the respective entities‘ functional currencies 774,103 1,823,874 209,791 500,566 181,975 390,967 48,755 134,155 4,064,186 Foreign exchange forward contracts (39,508) – – – – – (36,879) – (76,387) Less: Available-for-sale fi nancial assets (71,460) – – (113,071) (10,875) – – – (195,406)
Net currency exposure (94,095) 1,478 96,896 22,218 (68,059) 47 (11,636) 11,145 (42,006)
* Others include mainly Malaysian Ringgit, Thai Baht and Vietnamese Dong.
Total US Australian Sterling Foreign Dollars Dollars Pounds Others* Currencies The Company $’000 $’000 $’000 $’000 $’000
2009
Cash and cash equivalents 56 – – – 56 Trade and other payables (1,049,321) – – (39,910) (1,089,231)
Currency exposure (1,049,265) – – (39,910) (1,089,175)
2008
Cash and cash equivalents 53 6 16 2 77 Trade and other payables (9) – – – (9)
Currency exposure 44 6 16 2 68
* Others include Hong Kong Dollars and Thai Baht.
Sensitivity analysis It is estimated that a fi ve percentage point strengthening in foreign currencies against the Singapore Dollar would decrease the Group‘s profi t before tax (and accumulated profi ts) by approximately $42.1 million (2008: $2.1 million) and increase the Group’s other components of equity by approximately $7.7 million (2008: $9.8 million) respectively. A fi ve percentage point weakening in foreign currencies against the Singapore Dollar would have an equal but opposite effect. The Group’s outstanding forward exchange contracts have been included in this calculation. The analysis assumed that all other variables, in particular interest rates, remain constant and does not take into account the associated tax effects and share of minority interests.
It is estimated that a fi ve percentage point strengthening in foreign currencies against the Singapore Dollar would decrease the Company‘s profi t before tax (and accumulated profi ts) by approximately $54.5 million in 2009. The Company did not have any signifi cant foreign currencies exposure in 2008. The analysis assumed that all other variables, in particular interest rates, remain constant.
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34 FINANCIAL RISK MANAGEMENT (cont’d) (b) Market risk (cont’d) (iii) Equity price risk
The Group has available-for-sale investments in equity securities and is exposed to price risk. These securities are listed in Japan (2008: Japan and Hong Kong). The Group is not exposed to commodity price risk.
Sensitivity analysis If prices for equity securities listed in Japan (2008: Japan and Hong Kong) change by 5% with all other variables including tax rate being held constant, the impact on profi t after tax and available-for-sale reserve will be as follows:
2009 2008
5% increase 5% decrease 5% increase 5% decrease $’000 $’000 $’000 $’000
Profi t after tax – – – (1,065) Available-for-sale reserve 2,208 (2,208) 6,719 (5,654)
(c) Credit risk
Credit risk is the risk of fi nancial loss to the Group if a customer or counterparty to a fi nancial instruments fails to meet its contractual obligations. For trade receivables, the Group has guidelines governing the process of granting credit as a service or product provider in its respective segments of business. Trade and other receivables relate mainly to the Group’s customers who bought its residential units and tenants from its commercial buildings, shopping malls and serviced residences. Investments and fi nancial transactions are restricted to counterparties that meet the appropriate credit criteria and are of high credit standing.
The principal risk to which the Group and the Company is exposed in respect of fi nancial guarantee contracts is credit risk in connection with the guarantee contracts it has issued. To mitigate the risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of. Guarantees are only given for its subsidiaries and related parties. The maximum exposure to credit risk in respect of these fi nancial guarantees at the balance sheet date is disclosed in note 36.
The Group has a diversifi ed portfolio of businesses and as at balance sheet date, there were no signifi cant concentration of credit risk with any entity. The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset in the balance sheet, including derivative fi nancial instruments as well as any irrevocable loan undertaking to associates and jointly-controlled entities. There were no changes in the fair value of the Group‘s investment in convertible bonds classifi ed as fair value through profi t or loss, which were attributable to changes in credit risks.
(d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due. The Group actively manages its debt maturity profi le, operating cash fl ows and the availability of funding so as to ensure that all refi nancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains suffi cient level of cash or cash convertible investments to meet its working capital requirement. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group will constantly raise committed funding from both capital markets and fi nancial institutions and prudently balance its portfolio with some short term funding so as to achieve overall cost effectiveness.
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NOTES TO THE FINANCIAL STATEMENTS
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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34 FINANCIAL RISK MANAGEMENT (cont’d) (d) Liquidity risk (cont’d)
The following are the expected contractual undiscounted cash fl ows of fi nancial liabilities, including interest payments and excluding the impact of netting agreements:
Contractual cash fl ows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The Group $’000 $’000 $’000 $’000 $’000
2009
Financial liabilities, at amortised costs Bank borrowings 4,944,744 5,348,592 1,150,922 4,065,078 132,592 Debt securities 5,330,228 6,982,951 555,700 1,864,679 4,562,572 Finance leases 37,581 41,086 4,574 19,284 17,228 Trade and other payables* 1,895,405 1,925,871 1,538,956 377,589 9,326
12,207,958 14,298,500 3,250,152 6,326,630 4,721,718 Derivative fi nancial liabilities, at fair value 64,030 90,817 58,746 30,730 1,341
12,271,988 14,389,317 3,308,898 6,357,360 4,723,059
2008
Financial liabilities, at amortised costs Bank borrowings 4,645,492 4,930,388 1,095,666 3,714,051 120,671 Debt securities 5,144,370 7,931,180 986,497 1,868,601 5,076,082 Finance leases 39,472 51,690 6,573 22,338 22,779 Trade and other payables* 2,228,907 2,246,848 2,152,292 85,279 9,277
12,058,241 15,160,106 4,241,028 5,690,269 5,228,809 Derivative fi nancial liabilities, at fair value 182,629 196,356 66,039 100,040 30,277
12,240,870 15,356,462 4,307,067 5,790,309 5,259,086
Contractual cash fl ows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The Company $’000 $’000 $’000 $’000 $’000
2009
Financial liabilities, at amortised costs Debt securities 3,305,801 4,707,607 81,576 423,129 4,202,902 Trade and other payables* 1,209,912 1,212,390 1,212,390 – –
4,515,713 5,919,997 1,293,966 423,129 4,202,902
2008
Financial liabilities, at amortised costs Debt securities 2,518,579 5,001,254 63,780 316,726 4,620,748 Trade and other payables* 95,650 95,650 95,650 – –
2,614,229 5,096,904 159,430 316,726 4,620,748
* Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefi ts and provisions.
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34 FINANCIAL RISK MANAGEMENT (cont’d) (d) Liquidity risk (cont’d)
The following table indicates the periods in which the cash fl ows associated with derivatives that are cash fl ow hedges are expected to occur and affect the income statement:
Contractual cash fl ows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The Group $’000 $’000 $’000 $’000 $’000
2009
Interest rate swaps – liabilities (44,190) (72,430) (34,075) (35,543) (2,812) Forward start interest rate swaps – assets/(liabilities) 3,001 5,419 (865) 4,813 1,471
(41,189) (67,011) (34,940) (30,730) (1,341)
2008
Interest rate swaps – liabilities (148,589) (166,207) (52,463) (86,628) (27,116) Forward start interest rate swaps – liabilities (19,657) (20,666) (4,092) (13,413) (3,161)
(168,246) (186,873) (56,555) (100,041) (30,277)
(e) Fair values
The following methods and assumptions are used to estimate the fair values of the following signifi cant classes of fi nancial instruments:
(i) Floating Interest Bearing Loans No fair value is calculated for fl oating interest bearing loans as the Group believes that the carrying amounts which are all re-priced within six months from the balance sheet date refl ect the corresponding fair values.
(ii) Trade and Other Receivables and Trade and Other Payables The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short term nature.
(iii) Financial Assets/Financial Instruments The fair value of quoted securities is their quoted bid price at the balance sheet date. For other fi nancial instruments, fair value has been determined by discounting the relevant cash fl ows using current or applicable interest rates for similar instruments at the balance sheet date.
(iv) Non-Current Loans Due from/to Subsidiaries, Associates, Jointly-Controlled Entities, Investee Companies, Third Parties and Minority Interests Fair value is estimated as the present value of future cash fl ows discounted at current interest rates for similar instruments at the balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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34 FINANCIAL RISK MANAGEMENT (cont’d) (e) Fair values (cont’d) (v) Derivatives
The fair value of derivative fi nancial instruments is based on their market prices or brokers’ quotes.
The aggregate net fair values of fi nancial assets and liabilities which are not carried at fair value in the balance sheet as at 31 December are presented in the following table:
2009 2008
Carrying amount Fair value Carrying amount Fair value $’000 $’000 $’000 $’000
The Group
Fixed rate long term liabilities – secured debt securities – – 62,139 62,540 – unsecured debt securities 4,473,206 4,733,442 3,716,310 2,833,716
4,473,206 4,733,442 3,778,449 2,896,256
The Company
Fixed rate long term unsecured debt securities 3,305,801 3,560,279 2,518,579 1,727,899
(vi) Fair value hierarchy The table below analyses fi nancial instruments carried at fair value, by valuation method as at 31 December 2009. The different levels have been defi ned as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices)
Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
Level 1 Level 2 Level 3 Total The Group $’000 $’000 $’000 $’000
Available-for-sale fi nancial assets 44,167 195,000 148,989 388,156 Derivative fi nancial assets – 2,006 – 2,006
44,167 197,006 148,989 390,162 Derivative fi nancial liabilities – (64,030) – (64,030)
44,167 132,976 148,989 326,132
The movement of fi nancial assets classifi ed under level 3 is presented as follows: Total Note $’000
Balance as at 1 January 2009 371,624 Translation differences 176 Additions 12,174 Capital distribution (201) Impairments recognised in income statement (52,222) Fair value losses recognised in available-for-sale reserve (812) Exchanged for shares in a subsidiary 10(a)(i) (181,750)
Balance as at 31 December 2009 148,989
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35 COMMITMENTS
As at the balance sheet date, the Group and the Company had the following commitments:
(a) Operating lease
The Group leases a number of offi ces under operating leases. The leases typically have tenure of three years, with an option to renew the lease after that date. Lease payments are usually revised at each renewal date to refl ect the market rate. Future minimum lease payments for the Group and the Company on non-cancellable operating leases are as follows:
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Lease payments payable: Not later than 1 year 79,079 66,486 4,616 1,455 Between 1 and 5 years 158,920 154,764 7,135 768 After 5 years 50,665 64,277 133 133
288,664 285,527 11,884 2,356
The Group leases out its investment properties. Non-cancellable operating lease rentals are receivable as follows:
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Lease rentals receivable: Not later than 1 year 332,206 286,760 – – Between 1 and 5 years 793,039 715,693 – – After 5 years 454,169 449,367 – –
1,579,414 1,451,820 – –
(b) Commitments The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Commitments in respect of: – capital expenditure contracted but not provided for in the fi nancial statements 2,487 17,531 1,591 250 – development expenditure contracted but not provided for in the fi nancial statements 1,136,801 1,044,685 – – – capital contribution/acquisition of associates, jointly-controlled entities and investee companies 1,591,752 1,557,585 – – – purchase of land contracted but not provided for in the fi nancial statements 358,570 690,007 – – – shareholders’ loan committed to associates, jointly-controlled entities and investee companies 8,360 7,360 – –
3,097,970 3,317,168 1,591 250
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NOTES TO THE FINANCIAL STATEMENTS
While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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35 COMMITMENTS (cont’d) (c) As at the balance sheet date, the notional principal values of fi nancial instruments are as follows:
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Interest rate caps 39,768 160,309 – – Interest rate swaps 1,934,657 2,822,369 – – Forward start interest rate swaps 729,269 875,803 – – Forward foreign exchange contracts 852,309 319,586 – – Non delivery forward contracts – 202,000 – –
3,556,003 4,380,067 – –
(d) The maturity dates of these fi nancial instruments are:
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Not later than 1 year 1,441,224 1,590,109 – – Between 1 and 5 years 1,664,347 2,255,209 – – After 5 years 450,432 534,749 – –
3,556,003 4,380,067 – –
36 FINANCIAL GUARANTEE CONTRACTS
There are no terms and conditions attached to the fi nancial guarantee contracts that would have a material effect on the amount, timing and uncertainty of the Group’s and the Company’s future cash fl ows. The Group and the Company only issue guarantees for their subsidiaries and related parties.
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
(a) Guarantees given to banks to secure banking facilities provided to: – subsidiaries – – 2,999,983 3,632,769 – associates 125,199 177,778 – – – jointly-controlled entities 19,486 32,182 4,367 4,419 – investee company 27,183 – – –
171,868 209,960 3,004,350 3,637,188
(b) Undertakings by the Group and the Company:
(i) The Company has provided several undertakings on cost overrun, interest shortfall, completion and annualised gross rental, on a joint or several basis, in respect of term loan and revolving credit facilities amounting to $1,560.0 million, granted to a jointly-controlled entity. As at 31 December 2009, $1,478.3 million (2008: $1,275.4 million) of the facilities has been drawn.
(ii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of a term loan facility amounting to $605.2 million (2008: Nil) and bankers’ guarantee facility amounting to $54.8 million (2008: Nil) granted to its subsidiary. As at 31 December 2009, $376.5 million (2008: Nil) of the term loan facility has been drawn.
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36 FINANCIAL GUARANTEE CONTRACTS (cont’d) (b) Undertakings by the Group and the Company (cont’d):
(iii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of a term loan facility amounting to $1,370.0 million (2008: $1,862.1 million) and bankers’ guarantee facility amounting to $133.9 million (2008: $133.9 million) granted to an associate. As at 31 December 2009, $870.1 million (2008: $870.1 million) of the term loan facility has been drawn.
(iv) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of a term loan facility amounting to $264.1 million (2008: $393.0 million) and bankers’ guarantee facility amounting to $42.0 million (2008: $42.0 million) granted to a jointly-controlled entity. As at 31 December 2009, $226.1 million (2008: $355.0 million) of the term loan facility has been drawn.
(v) Certain of the Group’s subsidiaries in China, whose principal activities are the trading of development properties would in the ordinary course of business act as guarantors for the bank loans taken by the buyers to fi nance the purchase of residential properties developed by these subsidiaries. As at 31 December 2009, the outstanding notional amount of the guarantees amounted to $55.2 million (2008: $152.1 million).
(vi) In 2008, a subsidiary of the Group has provided a cost overrun undertaking up to $26.9 million in respect of the sale of its subsidiaries’ and jointly-controlled entities’ future receivables for residential projects. These future receivables have been settled in 2009.
(c) Options entered into by the Group:
A subsidiary of the Group has granted to Front Winners Sdn Bhd (the “Vendor”), a party unrelated to the Company, a put option to require the subsidiary to purchase the Gurney Plaza Extension and the Car Park Lot within fi ve years from 15 August 2007 at the put option price to be determined on an agreed basis. In return, the Vendor has granted this subsidiary an option to purchase the same property at the same agreed terms within one year of the expiry of the put option in the event the Vendor does not exercise the put option.
37 SIGNIFICANT RELATED PARTY TRANSACTIONS
For the purposes of these fi nancial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common signifi cant infl uence. Related parties may be individuals or other entities.
The Group considers the directors of the Company, and the Council of CEOs comprising the President & CEO, key management offi cers of the corporate offi ce and CEOs of the strategic business units, to be key management personnel in accordance with FRS 24 Related Party Disclosures.
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NOTES TO THE FINANCIAL STATEMENTS
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37 SIGNIFICANT RELATED PARTY TRANSACTIONS (cont’d) In addition to the related party information disclosed elsewhere in the fi nancial statements, there were signifi cant related party transactions which were carried out in the normal course of business on terms agreed between the parties during the fi nancial year as follows:
The Group The Company
2009 2008 2009 2008 $’000 $’000 $’000 $’000
Subsidiaries
Management fee income – – 47,920 57,292 Rental income – – 70 70 IT and administrative support services – – 1,317 811 Rental expense – – (352) (76) Others – – (240) –
Associates and Jointly-Controlled Entities
Management fee income 302,407 335,857 – – Rental expense (12,278) (7,602) (2,869) (1,389) Accounting service fee, acquisition fee, marketing income and others 35,792 22,230 – – Proceeds from sale of properties and investments* 415,731 2,078,738 – – Construction and project management income 22,676 32,576 – – Others (346) (289) (346) (289)
* The Group has deferred a portion of the profi t from the sale of these properties and investments based on its retaining stakes in the associates and jointly-controlled entities.
Key Management Personnel
Subscription of shares in the Company pursuant to its rights issue 2,537 – 1,929 – Subscription of shares in a subsidiary pursuant to the initial public offering 3,757 – 2,542 – Subscription of shares in the associates pursuant to the rights issues 2,301 – – – Subscription of bonds/notes issued by the Company and its indirect subsidiary 3,250 3,000 2,250 3,000 Interest paid/payable by the Company, its indirect subsidiary and an associate 244 33 172 33 Professional fees paid/payable to a director or fi rms in which directors are members 175 99 85 99 Shareholder’s loan to an investee company of the Group in which a director has an interest – 1,782 – –
Remuneration of Key Management Personnel
Salary, bonus and other benefi ts 15,581 24,121 10,832 10,051 Employer’s contributions to defi ned contribution plans 67 105 28 31 Equity compensation benefi ts 9,076 16,461 3,251 9,016
24,724 40,687 14,111 19,098
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38 SUBSIDIARIES
(a) The signifi cant subsidiaries directly held by the Company which are incorporated and conducting business in the Republic of Singapore are as set out below:
Percentage held by the Company
2009 2008 Name of Company % %
CapitaLand Asia Pte Ltd 100 100
CapitaLand Commercial Limited 100 100
CapitaLand Financial Limited 100 100
CapitaLand GCC Holdings Pte Ltd 100 100
CapitaLand ILEC Pte Ltd 100 100
CapitaLand Residential Limited 100 100
CapitaMalls Asia Limited 65.5 100 (formerly known as CapitaLand Retail Limited)
CapitaLand Treasury Limited 100 100
Somerset Capital Pte Ltd 100 100
The Ascott Limited 100* – (formerly known as The Ascott Group Limited)
* During the year, the investment in The Ascott Limited was transferred from Areca Investment Pte Ltd, Somerset Capital Pte Ltd and Somerset Land Pte Ltd to the Company.
(b) Other signifi cant subsidiaries in the Group are as follows: Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(i) Directly or indirectly held by CapitaLand Residential Limited:
Ausprop Holdings Limited Singapore 100 100
Australand Australia 59.3 59.3
Austvale Holdings Ltd Singapore 100 100
CapitaLand China Holdings Pte Ltd Singapore 100 100
CapitaLand Residential Singapore Pte Ltd Singapore 100 100
CRL Realty Pte Ltd Singapore 100 100
Leonie Court Pte Ltd Singapore 100 100
Prime Equities Pte Ltd Singapore 100 100
Imperial Realty Limited Singapore 100 100
Phoenix Realty Pte Ltd Singapore 100 100
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NOTES TO THE FINANCIAL STATEMENTS
38 SUBSIDIARIES (cont’d) (b) Other signifi cant subsidiaries in the Group are as follows (cont’d):
Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(ii) Directly or indirectly held by CapitaLand China Holdings Pte Ltd:
1 BJ CL Pin Yuan Real Estate Dev Co Ltd The People’s 100 100 Republic of China
4 CapitaLand China CCDF (Cayman) Holdings Co., Ltd Cayman Islands 100 100
CapitaLand China Income Fund Singapore 100 100
1 CapitaLand (China) Investment Co., Ltd The People’s 100 100 Republic of China
1 CapitaLand Management (China) Co., Ltd The People’s 100 100 Republic of China
1 Shanghai Aoshun Property Co., Ltd The People’s 100 86.7 Republic of China
1 Shanghai Ning Xing Real Estate Development Co., Ltd The People’s 100 73.0 Republic of China
3 Yong Teng Development Limited Hong Kong 100 80.1
(iii) Directly or indirectly held by CapitaLand Commercial Limited:
Adelphi Property Pte Ltd Singapore 100 100
1 CapitaLand – Vista Joint Venture Co., Ltd Vietnam 80.0 80.0
CapitaLand (Offi ce) Investments Pte Ltd Singapore 100 100
CapitaLand (RCS) Property Management Pte. Ltd. Singapore 60.0 60.0
CapitaLand (Vietnam) Holdings Pte. Ltd. Singapore 100 100
CapitaLand Commercial Management Pte. Ltd. Singapore 100 100
CapitaLand Investments Pte Ltd Singapore 100 100
Corporation Place Ltd Singapore 75.0 75.0
E-Pavilion Pte. Ltd. Singapore 100 100
KAIC Pte Ltd Singapore 100 100
KBC Pte Ltd Singapore 100 100
SBR Private Limited Singapore 100 100
Wan Tien Realty (Pte) Ltd Singapore 100 100
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38 SUBSIDIARIES (cont’d) (b) Other signifi cant subsidiaries in the Group are as follows (cont’d):
Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(iv) Directly or indirectly held by CapitaMalls Asia Limited:
CapitaMall Trust Management Limited Singapore 65.5# –
CapitaLand Japan Fund Management Pte Ltd Singapore 65.5# –
CapitaRetail China Fund Management Pte Ltd Singapore 65.5# –
CapitaLand Retail (MY) Pte Ltd Singapore 65.5 100
CapitaLand Retail China Investment Pte. Ltd. Singapore 65.5 100
CapitaLand Retail China Private Limited Singapore 65.5 100
CapitaLand Retail Hong Kong Investments Pte Ltd Singapore 65.5 100
Gain 888 Investments Pte Ltd Singapore 65.5 100
Pronto Investment One Pte Ltd Singapore 65.5 100
Pyramex Investments Pte Ltd Singapore 65.5 100
# Transferred from CapitaLand Financial Limited during the year. See note 38(b)(vi).
(v) Directly or indirectly held by The Ascott Limited:
1 Ascott Group (Jersey) Limited Jersey, 100 100 United Kingdom
1 Ascott International Management (Dubai) Co. Ltd Singapore 100 100
Ascott International Management Singapore 100 100 (Overseas Branch) Pte Ltd
1 Ascott Property Management (Shanghai) Co. Ltd The People’s 100 100 Republic of China
Ascott Singapore Raffl es Place Pte Ltd Singapore 100 100
1 Citadines Ashley TST Management (HK) Ltd Hong Kong 100 100
1 Citadines Melbourne on Bourke Pty Ltd Australia 100 100
Citadines Singapore Mount Sophia Pte Ltd Singapore 100 100
1 Equicore Enterprise Sdn Bhd Malaysia 100 100
1 Guangzhou Slamet Property Co., Ltd The People’s 100 100 Republic of China
Hua Xin Residences Pte Ltd Singapore 100 100
1 Liang Court (Malaysia) Sdn Bhd Malaysia 100 100
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NOTES TO THE FINANCIAL STATEMENTS
38 SUBSIDIARIES (cont’d) (b) Other signifi cant subsidiaries in the Group are as follows (cont’d):
Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(v) Directly or indirectly held by The Ascott Limited: (cont’d)
1 Oriville SAS France 100 100
Slamet Pte Ltd Singapore 100 100
Somerset (Vietnam) Investments Pte Ltd Singapore 100 100
1 Somerset Hoa Binh JV Co. Ltd Vietnam 90.0 90.0
The Ascott Capital Pte Ltd Singapore 100 100
The Ascott Group (Europe) Pte Ltd Singapore 100 100
The Ascott Heritage Pte Ltd Singapore 100 100
The Ascott Holdings Ltd Singapore 100 100
1 The Ascott Mayfair Operating Limited United Kingdom 100 100
1 Wuhan New Minzhong Leyuan Co Ltd The People’s 100 70.0 Republic of China
(vi) Directly or indirectly held by CapitaLand Financial Limited:
CapitaLand China Development Fund Singapore 100 100 Management Private Limited
CapitaCommercial Trust Management Limited Singapore 100 100
CapitaMall Trust Management Limited Singapore –# 100
CapitaRetail China Fund Management Pte Ltd Singapore –# 100
CapitaLand China Property Fund Management Pte Ltd Singapore 100 100
CapitaLand Japan Fund Management Pte Ltd Singapore –# 100
CapitaLand RECM Pte Ltd Singapore 100 100
RCCF Management Pte Ltd Singapore 100 100
# Transferred to CapitaMalls Asia Limited during the year. See note 38(b)(iv).
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38 SUBSIDIARIES (cont’d) (b) Other signifi cant subsidiaries in the Group are as follows (cont’d):
Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(vii) Directly or indirectly held by Australand:
2 Australand Finance Limited Australia 59.3 59.3
2 Australand Funds Management Limited Australia 59.3 59.3
2 Australand HK Company Limited Australia 59.3 59.3
2 Australand Investments Limited Australia 59.3 59.3
2 Australand Property Trust Australia 59.3 59.3
2 Australand Property Trust No. 4 Australia 59.3 59.3
2 Australand Property Trust No. 5 Australia 59.3 59.3
2 Australand Property Limited Australia 59.3 59.3
2 Australand Wholesale Holdings Limited Australia 59.3 59.3
2 Australand Wholesale Investments (Custodian) Limited Australia 59.3 59.3
2 Rylehall Pty Limited Australia 59.3 59.3
2 Port Catherine Development Pty Ltd Australia 59.3 59.3
(viii) Directly held by CapitaLand ILEC Pte Ltd:
CapitaLand Integrated Resort Pte Ltd Singapore 100 100
Kestrel Pte Ltd Singapore 100 100
(ix) Directly or indirectly held by CapitaLand GCC Holdings Pte Ltd:
1 CapitaLand Bahrain Bay Business Services WLL Bahrain 100 100
CapitaLand GCC (Bahrain) Pte Ltd Singapore 100 100
Notes:
All signifi cant subsidiaries are audited by KPMG LLP Singapore except for the following:
1 Audited by other member fi rms of KPMG International.
2 Audited by PricewaterhouseCoopers and its associated fi rms.
3 Audited by Alliott,Tsoi CPA Limited.
4 Audit not required in the country of incorporation.
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NOTES TO THE FINANCIAL STATEMENTS
39 ASSOCIATES
Details of signifi cant associates are as follows: Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(i) Jointly held by Somerset Capital Pte Ltd and The Ascott Limited:
Ascott Residence Trust Singapore 47.5 47.0
(ii) Indirectly held by CapitaLand China Holdings Pte Ltd:
CapitaLand China Development Fund Pte Ltd Singapore 37.5 37.5
1 Central China Real Estate Ltd Cayman Islands 27.1 27.1
2 Lai Fung Holdings Limited Cayman Islands 20.0 20.0
1 Raffl es City China Fund Ltd Cayman Islands 44.8* 50.0
* Includes 9.8% indirectly held through CapitaMalls Asia Limited.
(iii) Indirectly held by CapitaLand Commercial Limited:
CapitaCommercial Trust Singapore 31.6# 31.1#
3 DBS China Square Limited Singapore 30.0 30.0
3 United Malayan Land Bhd. Malaysia 20.8 20.8
# Includes 2.3% & 1.6% indirectly held through CapitaLand Financial Limited for 2009 & 2008 respectively.
(iv) Indirectly held by CapitaMalls Asia Limited:
CapitaMall Trust Singapore 19.6 29.6^
CapitaRetail Japan Fund Private Limited Singapore 17.2 26.3
CapitaRetail China Trust Singapore 17.7 26.6@
CapitaRetail China Development Fund Singapore 29.5 45.0
CapitaRetail China Development Fund II Singapore 29.5 45.0
CapitaRetail China Incubator Fund Singapore 19.7 30.0
CapitaRetail India Development Fund Singapore 29.8 45.5
^ Includes 0.8% indirectly held through CapitaLand Financial Limited.
@ Includes 0.8% indirectly held through CapitaLand Financial Limited.
(v) Indirectly held by CapitaLand Financial Limited:
1 CapitaLand AIF Ltd Cayman Islands 44.4 44.4
2 I. P. Property Fund Asia Limited Guernsey 20.0 20.0
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39 ASSOCIATES (cont’d) Details of signifi cant associates are as follows (cont’d):
Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(vi) Indirectly held by CapitaLand ILEC Pte Ltd:
2 East Asia Satellite Television (Holdings) Limited British Virgin 33.3 33.3 Islands
(vii) Indirectly held by CapitaLand GCC Holdings Pte Ltd:
1 Raffl es City Bahrain Fund Ltd Cayman Islands 37.7 37.1
Notes:
All signifi cant associates are audited by KPMG LLP Singapore except for the following:
1 Audited by other member fi rms of KPMG International.
2 Audited by Ernst & Young and its associated fi rms.
3 Audited by PricewaterhouseCoopers and its associated fi rms.
40 JOINTLY-CONTROLLED ENTITIES
Details of signifi cant jointly-controlled entities are as follows:
Effective Interest held by the Group
Place of 2009 2008 Name of Company Incorporation % %
(i) Directly held by CapitaLand Asia Pte Ltd:
1 T.C.C. Capital Land Limited Thailand 40.0 40.0
(ii) Indirectly held by CapitaLand Residential Limited:
Riverwalk Promenade Pte Ltd Singapore 50.0 50.0
Tanglin Residential Pte Ltd Singapore 50.0 50.0
(iii) Indirectly held by CapitaMalls Asia Limited:
Orchard Turn Holding Pte Ltd Singapore 32.8 50.0
(iv) Indirectly held by CapitaLand GCC Holdings Pte Ltd:
1 Mubadala CapitaLand Real Estate LLC United Arab 49.0 49.0 Emirates
Notes:
All signifi cant jointly-controlled entities are audited by KPMG LLP Singapore except for the following:
1 Audited by other member fi rms of KPMG International.
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While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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NOTES TO THE FINANCIAL STATEMENTS
41 OPERATING SEGMENTS
Management determines the operating segments based on the reports reviewed and used by the Council of CEOs for strategic decisions making and resources allocation. For management purposes, the Group is organised into strategic business units based on their products, services and geography.
The Group’s reportable operating segments are as follows:
(i) CapitaLand Residential Singapore – develops residential properties in Singapore for sale and covers a wide spectrum of the residential market in Singapore.
(ii) CapitaLand China Holdings – involved in the residential, commercial and integrated property development sectors in China.
(iii) CapitaLand Commercial – owner/manager of commercial and industrial properties in Singapore, Malaysia and United Kingdom. It also develops residential projects in Vietnam, Malaysia, India and Thailand.
(iv) CapitaMalls Asia – shopping mall owner/manager with portfolio in Singapore, China, India, Japan and Malaysia.
(v) Ascott – an international serviced residence owner-operator with operations in key cities of Asia Pacifi c, Europe and the Gulf region. It operates three brands, namely Ascott, Somerset and Citadines. The Group’s holding in Ascott Residence Trust is also presented in this segment.
(vi) CapitaLand Financial – involved in real estate fund management and fi nancial advisory services.
(vii) Australand – a major diversifi ed property group with activities in residential, commercial and industrial developments and investment properties across Australia.
(viii) Others – includes Corporate Offi ce, Group Treasury, the Group’s new businesses and consolidation adjustments.
Information regarding the operations of each reportable segment is included below. Management monitors the operating results of each of its business unit for the purpose of making decisions on resource allocation and performance assessment. Performance is measured based on segment earnings before interest and tax (“EBIT”). EBIT is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Group fi nancing (including fi nance costs) and income taxes are managed on a group basis and are not allocated to operating segments. Segment assets and liabilities are presented net of inter-segment balances. Inter-segment pricing is determined on arm’s length basis.
Geographically, management reviews the performance of the businesses in Singapore, China, Other Asia, Australia and Europe. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Non-current assets and total assets are based on the geographical location of the assets.
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41 OPERATING SEGMENTS (cont’d) Operating Segments – 31 December 2009
CapitaLand CapitaLand Residential China CapitaLand CapitaMalls CapitaLand Singapore Holdings Commercial Asia Ascott Financial Australand Others Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue
External revenue 673,782 641,970 133,367 223,000 388,368 158,136 732,490 6,246 2,957,359 Inter-segment revenue – 4,987 11,560 5,946 5,343 4,036 – (31,872) –
Total Revenue 673,782 646,957 144,927 228,946 393,711 162,172 732,490 (25,626) 2,957,359
Segmental Results
Company and subsidiaries 322,892 353,167 (246,916) 32,595 52,316 111,838 (168,126) 822,057 1,279,823 Associates (24,916) 188,892 (240,287) (50,658) (19,629) (13,466) (1,658) (36,239) (197,961) Jointly-controlled entities 73,732 9,128 (10,158) 467,174 (1,270) (400) (71,050) – 467,156
Earnings Before Interest
and Taxation 371,708 551,187 (497,361) 449,111 31,417 97,972 (240,834) 785,818 1,549,018 Finance costs (453,922) Taxation (86,462)
Profi t for the year 1,008,634
Segment Assets 2,316,567 3,520,170 2,580,886 6,482,363 3,755,397 222,068 4,373,107 6,915,456 30,166,014
Segment Liabilities 779,252 848,743 782,665 973,514 1,758,712 47,093 1,617,365 6,478,907 13,286,251
Other segment items:
Interest Income 17,181 10,133 5,897 23,517 2,311 (138) 5,903 11,746 76,550
Depreciation and
amortisation (787) (2,197) (5,006) (6,563) (37,906) (713) (3,747) (6,111) (63,030)
Impairment losses for assets – (1,557) (176,179) (221) (7,633) (5) – (73,363) (258,958)
Fair value gains/(losses) on
investment properties
and properties under
development – 185,723 (77,569) (98,970) 729 – (235,845) – (225,932)
Share-based expenses (1,962) (3,028) (4,687) (5,245) (3,541) (2,602) (1,117) (6,545) (28,727)
Gains on disposal
of investments – 18,889 29,474 52,817 25,373 1 – 897,843 1,024,397
Interests in Associates 240,059 1,320,496 1,357,786 2,997,218 538,872 140,307 38,831 378,605 7,012,174
Interests in Jointly-
controlled Entities 114,467 219,424 167,570 794,830 40,046 (962) 334,488 2,193 1,672,056
Capital Expenditure* 448 384,663 2,102 92,555 190,735 281 142,703 1,992 815,479
* Capital Expenditure consists of additions of property, plant and equipment, investment properties, properties under development and intangible assets.
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NOTES TO THE FINANCIAL STATEMENTS
41 OPERATING SEGMENTS (cont’d) Operating Segments – 31 December 2008
CapitaLand CapitaLand Residential China CapitaLand CapitaMalls CapitaLand Singapore Holdings Commercial Asia Ascott Financial Australand Others Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue
External revenue 400,193 325,444 210,692 200,937 438,596 179,509 984,301 12,649 2,752,321 Inter-segment revenue – 4,884 17,186 5,745 3,163 2,724 – (33,702) –
Total Revenue 400,193 330,328 227,878 206,682 441,759 182,233 984,301 (21,053) 2,752,321
Segmental Results
Company and subsidiaries 140,790 849,444 229,827 157,365 141,655 85,300 141,847 92,168 1,838,396 Associates (8,739) 33,621 172,463 143,890 (4,090) 5,023 (368) (23,525) 318,275 Jointly-controlled entities 42,938 369 (6,703) (2,630) (5,367) 57 28,155 – 56,819
Earnings Before Interest
and Taxation 174,989 883,434 395,587 298,625 132,198 90,380 169,634 68,643 2,213,490 Finance costs (516,331) Taxation (235,776)
Profi t for the year 1,461,383
Segment Assets 2,001,736 3,602,172 2,902,222 5,108,275 3,454,785 308,771 4,079,499 3,626,153 25,083,613
Segment Liabilities 527,421 958,823 795,555 781,066 1,586,169 65,229 2,035,250 6,346,298 13,095,811
Other segment items:
Interest Income 17,678 23,300 7,066 10,976 11,010 526 7,044 28,611 106,211
Depreciation and
amortisation (775) (2,517) (5,232) (5,238) (32,310) (734) (4,354) (6,070) (57,230)
Impairment losses for assets – (5,594) (285) (133) (12,105) (31,346) – (3,754) (53,217)
Fair value gains/(losses) on
investment properties 20 299,475 18,147 50,196 938 – (68,094) – 300,682
Share-based expenses (3,247) (5,169) (6,411) (5,530) (8,365) (7,679) (2,772) (18,471) (57,644)
Gains on disposal
of investments 30 378,475 189,858 33,173 69,173 780 472 3,219 675,180
Interests in Associates 279,739 1,249,467 1,476,785 2,779,708 538,685 208,902 34,476 210,051 6,777,813
Interests in Jointly-
controlled Entities 268,247 127,933 239,673 187,459 75,873 – 185,856 1,739 1,086,780
Capital Expenditure* 849 363,093 113,586 313,706 342,363 540 587,341 562,338 2,283,816
* Capital Expenditure consists of additions of property, plant and equipment, investment properties, properties under development and intangible assets.
Geographic Information
Singapore Australia China* Other Asia# Europe Others@ Total 2009 $’000 $’000 $’000 $’000 $’000 $’000 $’000
External Revenue 978,996 755,689 773,914 163,291 248,189 37,280 2,957,359
Non-current Assets^ 6,488,552 2,975,908 3,814,030 1,720,267 1,033,554 – 16,032,311
Total Assets 15,772,857 4,568,785 6,197,750 2,363,928 1,209,408 53,286 30,166,014
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41 OPERATING SEGMENTS (cont’d) Geographic Information (cont’d) Singapore Australia China* Other Asia# Europe Others@ Total 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000
External Revenue 834,938 1,014,765 469,477 108,325 288,383 36,433 2,752,321
Non-current Assets^ 5,915,136 2,443,386 3,769,480 1,829,349 978,340 – 14,935,691
Total Assets 10,904,953 4,139,978 6,469,898 2,295,915 1,166,313 106,556 25,083,613
* China includes Hong Kong and Macau.
# Other Asia includes Indonesia, Japan, Malaysia, Philippines, Thailand, Korea, India, Vietnam and Gulf Cooperation Council countries.
@ Others includes the Cayman Islands.
^ Non-current assets comprised property, plant and equipment, intangible assets, investment properties, properties under development and interests in associates and jointly-controlled entities.
42 SUBSEQUENT EVENTS
On 18 January 2010, the Company announced that its indirect wholly-owned subsidiary, CapitaLand China (RE) Holdings Co., Ltd has signed a Share Sale and Purchase Agreement with Orient Overseas (International) Limited (“OOIL”) to purchase its entire 100% stake of Orient Overseas Developments Limited (“OODL”) for a cash consideration of US$2.2 billion (approximately S$3.1 billion). OODL, through its subsidiaries, owns a portfolio of seven sites in Shanghai, Kunshan and Tianjin, China comprising pipeline projects of approximately 1.48 million square metres of gross fl oor area of which approximately half is residential, with the balance being offi ce, retail and serviced residences/hotel. The acquisition was completed on 10 February 2010.
43 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The Group has not applied the following accounting standards (including their consequential amendments) and interpretations that have been issued as of the balance sheet date but are not yet effective:
• Amendments to FRS 32 Financial Instruments: Presentation – Classifi cation of Rights Issues • Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items • Amendments to FRS 102 Share-based Payment – Group cash-settled share-based payment transactions • FRS 103 (revised) Business Combinations and FRS 27 (revised) Separate and Consolidated Financial Statements • Improvements to FRSs 2009 • INT FRS 117 Distributions of Non-cash Assets to Owners
FRS 103 (revised 2009) and FRS 27 (amended) will become effective for the Group’s fi nancial statements for the year ending 31 December 2010. FRS 103 (revised 2009) introduces signifi cant changes to the accounting for business combination, both at the acquisition date and post acquisition, and requires greater use of fair values. The amendments will mainly impact the accounting for transaction costs, step acquisitions, goodwill and non- controlling interests (“NCI”) (previously minority interests). The revised FRS 103 will be applied prospectively and therefore there will be no impact on prior periods in the Group’s fi nancial statements for the year ending 31 December 2010.
The amended FRS 27 requires accounting for changes in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with gain or loss recognised in the income statement. The amendments will be applied prospectively to transactions with NCI and therefore there will be no impact on prior periods in the Group’s fi nancial statements for the year ending 31 December 2010.
The initial application of these standards (and its consequential amendments) and interpretations is not expected to have material impact on the Group’s fi nancial statements. The Group has not considered the impact of accounting standards issued after the balance sheet date.
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OTHER INFORMATION 1. DIRECTORS’ REMUNERATION
(a) Directors’ Compensation Table for the Financial Year Ended 31 December 2009:
Bonus and Salary inclusive other benefi ts Directors’ fees Contingent of AWS and inclusive of inclusive of awards of employer’s CPF employer’s CPF (1) attendance fees (2) shares (3) Total Directors of the Company $ $ $ $ $
Payable by Company:
Dr Hu Tsu Tau – – 130,634 58,463 189,097 Peter Seah Lim Huat – – 154,243 58,463 212,706 Liew Mun Leong 1,019,148 3,828,384 – 947,858 5,795,390 Lim Chin Beng – – 105,184 53,591 158,775 Jackson Peter Tai – – 141,494 34,103 175,597 Richard Edward Hale – – 130,534 53,591 184,125 Dr Victor Fung Kwok King (4) – – 59,940 – 59,940 James Koh Cher Siang – – 132,351 58,463 190,814 Arfat Pannir Selvam – – 142,343 43,848 186,191 Professor Kenneth Stuart Courtis – – 147,794 34,103 181,897 Dr Fu Yuning (5) – – 38,814 – 38,814
Sub-Total 1 1,019,148 3,828,384 1,183,331 1,342,483 7,373,346
Payable by Subsidiaries:
Lim Chin Beng – – 63,500 – 63,500 Richard Edward Hale – – 78,000 – 78,000 James Koh Cher Siang – – 131,000 – 131,000 Arfat Pannir Selvam – – 9,000 – 9,000 Dr Fu Yuning – – 6,900 – 6,900
Sub-Total 2 – – 288,400 – 288,400
Total for Directors
of the Company 1,019,148 3,828,384 1,471,731 1,342,483 7,661,746
(1) The bonus fi gures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2009 is higher than 2008 due to higher portfolio gain. The EVA bonus accrued for year 2009 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) The directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(3) With effect from this fi nancial year ended 31 December 2009, the Company will be disclosing the value of the contingent awards of shares granted to its Directors. The contingent awards of shares fi gures disclosed are based on the fair value of the shares comprised in the baseline awards under the CapitaLand Restricted Stock Plan (“RSP”) and the CapitaLand Performance Share Plan (“PSP”) at the time of grant. All Directors are granted the contingent awards of shares pursuant to RSP except for Mr Liew Mun Leong who is granted the contingent awards of shares pursuant to both RSP and PSP. The fi nal number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The fair value of the shares determined for the contingent awards in 2009 is signifi cantly lower than 2008.
(4) Dr Victor Fung Kwok King had declined the grant of contingent awards of shares.
(5) Dr Fu Yuning was appointed as a director of the Company on 27 July 2009.
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1. DIRECTORS’ REMUNERATION (cont’d) (b) Directors’ Compensation Table for the Financial Year Ended 31 December 2008:
Bonus and Salary inclusive other benefi ts Directors’ fees Contingent of AWS and inclusive of inclusive of awards of employer’s CPF employer’s CPF (1) attendance fees (2) shares (3) Total Directors of the Company $ $ $ $ $
Payable by Company:
Dr Hu Tsu Tau – – 122,130 163,836 285,966 Hsuan Owyang (4) – – 172,800 238,928 411,728 Liew Mun Leong 1,198,872 2,979,118 – 3,238,708 7,416,698 Lim Chin Beng – – 97,200 140,332 237,532 Jackson Peter Tai – – 120,060 95,571 215,631 Peter Seah Lim Huat – – 93,600 95,571 189,171 Richard Edward Hale – – 122,400 150,183 272,583 Professor Robert Henry Edelstein (5) – – 22,365 – 22,365 Dr Victor Fung Kwok King (6) – – 54,900 – 54,900 James Koh Cher Siang – – 124,200 136,530 260,730 Arfat Pannir Selvam – – 134,100 122,877 256,977 Professor Kenneth Stuart Courtis – – 73,800 68,265 142,065
Sub-Total 1 1,198,872 2,979,118 1,137,555 4,450,801 9,766,346
Payable by Subsidiaries:
Hsuan Owyang – – 193,000 – 193,000 Liew Mun Leong – 31,996 14,066 – 46,062 Lim Chin Beng – 26,663 133,025 – 159,688 Richard Edward Hale – 26,663 151,573 – 178,236
Sub-Total 2 – 85,322 491,664 – 576,986
Total for Directors
of the Company 1,198,872 3,064,440 1,629,219 4,450,801 10,343,332
(1) The bonus fi gures consist primarily of EVA bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus accrued for year 2008 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) The directors’ fees were approved by the shareholders and had since been paid.
(3) The contingent awards of shares fi gures disclosed are based on the fair value of the shares comprised in the baseline awards under RSP and PSP at the time of grant. All Directors are granted the contingent awards of shares pursuant to RSP except for Mr Liew Mun Leong who is granted the contingent awards of shares pursuant to both RSP and PSP. The fi nal number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP.
(4) Mr Hsuan Owyang resigned as a director of the Company on 1 January 2009.
(5) Professor Robert Henry Edelstein resigned as a director of the Company on 29 April 2008.
(6) Dr Victor Fung Kwok King had declined the grant of contingent awards of shares.
(c) Number of Directors of CapitaLand Limited in Remuneration Bands:
Remuneration Bands 2009 2008
$500,000 and above 1 1 $250,000 to $499,999 0 5 Below $250,000 10 6
Total 11 12
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OTHER INFORMATION
2. INTERESTED PERSON TRANSACTIONS
Interested person transactions carried out during the fi nancial year which fall under Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited are as follows:
2009 The Group $’000
Transactions for the Sale of Goods and Services:
Associates of Temasek Holdings (Private) Limited 828
Transactions for the Purchase of Goods and Services:
Associates of Temasek Holdings (Private) Limited 301 Singapore Airlines Limited 181
Provision of warranties in respect of the sale of shares
by an associate of the Group:
Associate of Temasek Holdings (Private) Limited 736
Interest payable in relation to the subscription of fi xed rate notes
issued by an indirect subsidiary of the Company
under a multicurrency medium term notes programme:
Liew Mun Leong 389
Subscription of shares in a subsidiary of the Company,
CapitaMalls Asia Limited, pursuant to its initial public offering:
Associate of Temasek Holdings (Private) Limited 134,196 Liew Mun Leong and his associate 1,149 Arfat Pannir Selvam 114 Dr Fu Yuning 114
3. KEY EXECUTIVES’ REMUNERATION
Key Executives’ Compensation Table for the Financial Year Ended 31 December 2009:
Total Compensation(1) Bands Executive
$2,750,000 to $2,999,999 Wen Khai Meng and Lim Ming Yan
$2,500,000 to $2,749,999 Olivier Lim Tse Ghow
$2,250,000 to $2,499,999 Jennie Chua Kheng Yeng
1 Total compensation comprises salary, annual wage supplement, bonus, employer’s CPF, contingent awards of shares and other benefi ts in kind. The bonus is based on an accrual basis and accrued for the performance of the same year. The contingent awards of shares are based on the fair value of the shares comprised in the baseline awards under the CapitaLand Restricted Stock Plan (“RSP”) and the CapitaLand Performance Share Plan (“PSP”) at the time of grant. The fi nal number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP.
4. USE OF PROCEEDS
In September 2009, the Company issued $1.2 billion principal amount of convertible bonds due in 2016. Up to 31 December 2009, the Company has utilised $430 million of the proceeds and the balance of proceeds as at 31 December 2009 was $770 million.
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SHAREHOLDING STATISTICS As at 26 February 2010
SHARE CAPITAL FULLY PAID
S$6,276,851,552.50 (comprising 4,248,921,088 fully paid Ordinary Shares; voting rights: one vote per share)
TWENTY LARGEST SHAREHOLDERS
As shown in the Register of Members and Depository Register
Name No. of Shares %
1 Temasek Holdings (Private) Limited 1,680,704,140 39.56 2 Citibank Nominees Singapore Pte Ltd 872,204,598 20.53 3 DBS Nominees (Private) Limited 412,146,397 9.70 4 DBSN Services Pte. Ltd. 255,900,460 6.02 5 HSBC (Singapore) Nominees Pte Ltd 203,587,081 4.79 6 United Overseas Bank Nominees (Private) Limited 148,879,226 3.50 7 Raffl es Nominees (Pte.) Limited 79,161,846 1.86 8 BNP Paribas Securities Services Singapore Branch 26,452,637 0.62 9 UOB Kay Hian Private Limited 13,076,953 0.31 10 Pei Hwa Foundation Limited 11,673,335 0.27 11 OCBC Nominees Singapore Private Limited 10,852,823 0.26 12 Lee Pineapple Company (Pte) Limited 10,000,000 0.24 13 DB Nominees (Singapore) Pte Ltd 9,605,688 0.23 14 OCBC Securities Private Limited 8,503,357 0.20 15 Phillip Securities Pte Ltd 7,417,000 0.17 16 DBS Vickers Securities (Singapore) Pte Ltd 7,120,154 0.17 17 Merrill Lynch (Singapore) Pte. Ltd. 6,731,008 0.16 18 BNP Paribas Nominees Singapore Pte Ltd 6,031,084 0.14 19 TM Asia Life Singapore Ltd - PAR Fund 6,010,000 0.14 20 Morgan Stanley Asia (Singapore) Securities Pte Ltd 5,543,885 0.13
Total 3,781,601,672 89.00
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SHAREHOLDING STATISTICS As at 26 February 2010
SUBSTANTIAL SHAREHOLDERS
As shown in the Register of Substantial Shareholders as at 26 February 2010
No. of ordinary shares No. of ordinary shares in which substantial shareholder in which substantial shareholder Substantial Shareholder has a direct interest is deemed to have an interest
Temasek Holdings (Private) Limited 1,680,704,140 58,942,630(1)
Note:
(1) By virtue of Section 7 of the Companies Act, Cap. 50 of Singapore, Temasek Holdings (Private) Limited (“Temasek”) is deemed to have an interest in 58,942,630 ordinary shares in which its associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance (Incorporated).
SIZE OF HOLDINGS No. of % of No. of % of Size of Shareholdings shareholders shareholders Shares shares
1 – 999 997 1.87 388,054 0.01 1,000 – 10,000 44,626 83.87 165,546,975 3.90 10,001 – 1,000,000 7,543 14.18 257,633,294 6.06 1,000,001 and above 42 0.08 3,825,352,765 90.03
Total 53,208 100.00 4,248,921,088 100.00
Approximately 58.94% of the issued ordinary shares are held in the hands of the public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited is complied with.
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NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912, on Friday, 16 April 2010 at 10.00 a.m. to transact the following business:
AS ORDINARY BUSINESS
1 To receive and adopt the Directors‘ Report and Audited Financial Statements for the year ended 31 December 2009 and the Auditors‘ Report thereon.
2 To declare a fi rst and fi nal 1-tier dividend of S$0.055 per share and a special 1-tier dividend of S$0.05 per share for the year ended 31 December 2009.
3 To approve Directors‘ fees of S$1,183,331 for the year ended 31 December 2009. (2008: S$1,137,555)
4 To re-appoint the following Directors, who are retiring under Section 153(6) of the Companies Act, Cap. 50 of Singapore, to hold offi ce from the date of this Annual General Meeting until the next Annual General Meeting:
(a) Dr Hu Tsu Tau (b) Mr Richard Edward Hale
5 To re-elect the following Directors, who are retiring by rotation pursuant to Article 95 of the Articles of Association of the Company and who, being eligible, offer themselves for re-election:
(a) Mr Peter Seah Lim Huat (b) Mr Liew Mun Leong
6 To re-elect the following Directors, who are retiring pursuant to Article 101 of the Articles of Association of the Company and who, being eligible, offer themselves for re-election:
(a) Dr Fu Yuning (b) Mr John Powell Morschel
7 To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fi x their remuneration.
8 To transact such other ordinary business as may be transacted at an Annual General Meeting of the Company.
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NOTICE OF ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS
9 To consider and, if thought fi t, to pass the following resolution as an Ordinary Resolution:
That pursuant to Article 101 of the Articles of Association of the Company, Mr Ng Kee Choe be and is hereby appointed as a Director of the Company with effect from 16 April 2010.
10 To consider and, if thought fi t, to pass with or without any modifi cation, the following resolution as an Ordinary Resolution:
That pursuant to Section 161 of the Companies Act, Cap. 50 of Singapore, authority be and is hereby given to the Directors of the Company to:
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fi t; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
provided that:
(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fi fty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed ten per cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited (“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:
(I) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and
(II) any subsequent bonus issue, consolidation or subdivision of shares;
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and
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AS SPECIAL BUSINESS (cont’d) (4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution
shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.
By Order of the Board
Low Sai Choy
Company Secretary
Singapore 16 March 2010
NOTES:
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote instead of him. Where a member appoints more than one proxy, he shall specify the proportion of his shareholdings to be represented by each proxy. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be deposited at the offi ce of the Company‘s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Offi ce, Singapore 068906 not less than 48 hours before the time appointed for holding the Meeting.
Additional information relating to the Notice of Annual General Meeting:
1 In relation to item 4 under the heading “As Ordinary Business”, an independent Director, Mr Lim Chin Beng will be retiring under Section 153(6) of the Companies Act, Cap. 50 of Singapore at the Annual General Meeting and is not seeking re-appointment. Mr Lim will also cease to serve as Chairman of the Executive Resource and Compensation Committee and the Nominating Committee respectively. In relation to items 4(a) and (b) under the heading “As Ordinary Business”, Dr Hu Tsu Tau will, upon re-appointment, continue to serve as Chairman of the Investment Committee and Mr Richard Edward Hale will, upon re-appointment, continue to serve as Chairman of the Audit Committee and a Member of the Risk Committee. Dr Hu and Mr Hale are considered as independent Directors.
2 In relation to item 5 under the heading “As Ordinary Business”, an independent Director, Dr Victor Fung Kwok King will be retiring by rotation pursuant to Article 95 of the Articles of Association of the Company at the Annual General Meeting and is not seeking re-election. In relation to items 5(a) and (b) under the heading “As Ordinary Business”, Mr Peter Seah Lim Huat will, upon re-election, continue to serve as Chairman of the Finance and Budget Committee and a Member of the Executive Resource and Compensation Committee and the Nominating Committee respectively; and Mr Liew Mun Leong will, upon re-election, continue to serve as a Member of the Investment Committee, the Finance and Budget Committee, the Nominating Committee, and the Corporate Disclosure Committee respectively. Mr Seah is considered as an independent Director. Mr Liew is the President and Chief Executive Offi cer of the Company.
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NOTES: (cont’d) 3 In relation to items 6(a) and (b) under the heading “As Ordinary Business”, Article 101 of the Company’s Articles
of Association permits the Directors to appoint any person to be a Director, either to fi ll a casual vacancy or as an addition to the existing Directors. Any Director so appointed shall hold offi ce only until the next following Annual General Meeting, and shall then be eligible for re-election. Dr Fu Yuning was appointed on 27 July 2009 and Mr John Powell Morschel was appointed on 1 February 2010 and they are both seeking re-election at the Annual General Meeting. Dr Fu and Mr Morschel are considered as independent Directors.
4 In relation to item 9 under the heading “As Special Business”, it is proposed that Mr Ng Kee Choe be appointed as a Director of the Company with effect from 16 April 2010. Mr Ng is currently Chairman of Singapore Power Ltd, SP AusNet and NTUC Income Insurance Co-Operative Ltd and President-Commissioner of PT Bank Danamon Indonesia Tbk. Mr Ng is a member of Temasek Advisory Panel and International Advisory Council of China Development Bank. In addition, he is a director of Singapore Exchange Limited and Singapore Airport Terminal Services Limited. Mr Ng was the Vice-Chairman of DBS Group Holdings Ltd (“DBS”). He retired from his executive position in July 2003 after 33 years of service with DBS. For his contributions to public service, Mr Ng was awarded the Public Service Star award in 2001. The Board of Directors of the Company is pleased to recommend the appointment of Mr Ng, who brings with him wide ranging experience in major global companies which will be benefi cial to the Board and the Company. Mr Ng will be considered an independent Director if appointed.
5 Ordinary Resolution No. 10 under the heading “As Special Business”, if passed, will empower the Directors to issue shares in the Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments from the date of the Annual General Meeting until the date of the next Annual General Meeting. The aggregate number of shares which the Directors may issue (including shares to be issued pursuant to convertibles) under this Resolution must not exceed fi fty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company with a sub-limit of ten per cent. (10%) for issues other than on a pro rata basis. For the purpose of determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time that Ordinary Resolution No. 10 is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution No. 10 is passed and (b) any subsequent bonus issue, consolidation or subdivision of shares. The sub-limit of 10% for issues other than on a pro rata basis is below the 20% sub-limit permitted by the Listing Manual of the Singapore Exchange Securities Trading Limited. The Directors believe that the lower sub-limit of 10% would suffi ciently address the Company‘s present need to maintain fl exibility while taking into account shareholders‘ concerns against dilution.
NOTICE OF ANNUAL GENERAL MEETING
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CAPITALAND LIMITED (Regn. No.: 198900036N) (Incorporated in the Republic of Singapore)
PROXY FORM Annual General Meeting
IMPORTANT:
1. For investors who have used their CPF monies to buy the Company’s shares, this Summary Report/Annual Report is forwarded to them at the request of their CPF Approved Nominee and is sent solely FOR THEIR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.
I/We, (Name) (NRIC/Passport Number)
of (Address)
being a member/members of CapitaLand Limited (the “Company”) hereby appoint:
Name Address NRIC/Passport No.
Proportion of Shareholdings
No. of Shares %
and/or (delete as appropriate)
Name Address NRIC/Passport No.
Proportion of Shareholdings
No. of Shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary, to demand a poll, at the Annual General Meeting of the Company, to be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912, on Friday, 16 April 2010 at 10.00 a.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Annual General Meeting as indicated hereunder. If no specifi c direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Annual General Meeting.
No. Resolutions Relating To: For* Against*
ORDINARY BUSINESS
1 Adoption of Directors’ Report, Audited Financial Statements and Auditors’ Report 2 Declaration of a First and Final Dividend and a Special Dividend 3 Approval of Directors’ Fees
4(a) Re-appointment of Dr Hu Tsu Tau as Director 4(b) Re-appointment of Mr Richard Edward Hale as Director 5(a) Re-election of Mr Peter Seah Lim Huat as Director 5(b) Re-election of Mr Liew Mun Leong as Director 6(a) Re-election of Dr Fu Yuning as Director 6(b) Re-election of Mr John Powell Morschel as Director 7 Re-appointment of Auditors 8 Any Other Business
SPECIAL BUSINESS
9 Appointment of Mr Ng Kee Choe as a Director of the Company 10 Authority for Directors to issue shares and to make or grant instruments pursuant to Section
161 of the Companies Act, Cap. 50
* Please indicate your vote “For” or “Against” with a “√ ” within the box provided.
Dated this day of 2010.
Total Number of Shares Held
Signature(s) of Member(s) or Common Seal
IMPORTANT: PLEASE READ NOTES TO PROXY FORM ON REVERSE PAGE.
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NOTES TO PROXY FORM:
1 A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company.
2 Where a member appoints more than one proxy, the appointments shall be invalid unless he specifi es the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3 Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy or proxies, to the Meeting.
4 A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defi ned in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register as well as shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, the instrument of proxy will be deemed to relate to all the shares held by the member.
5 The instrument appointing a proxy or proxies must be deposited at the offi ce of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Offi ce, Singapore 068906, not less than 48 hours before the time appointed for holding the Meeting.
6 The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised offi cer.
7 Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certifi ed copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8 A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Cap. 50 of Singapore.
General
The Company shall be entitled to reject the instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at least 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.
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CAPITALAND LIMITED c/o M & C Services Private Limited
138 Robinson Road #17-00 The Corporate Offi ce
Singapore 068906
Affi x postage stamp
Cap AR Fin 0312.indd 216Cap AR Fin 0312.indd 216 12/03/2010 8:24 PM12/03/2010 8:24 PM
Epigram While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
1 2 3 4 5 6 7 8 9 10 OK 1070 MH MH261202 MAC6 11.03.2010 175# 1bmc P280cCapitaland A/R_Size:426x297mm_260gsm Art Card_175#_Inside Front&Back
MAIN CONTACTS CapitaLand Limited
168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 www.capitaland.com [email protected] (Reg. No. 198900036N)
CapitaLand Residential
Singapore Pte Ltd
8 Shenton Way #21-01 Singapore 068811 Tel +65 6820 2188 Marketing Hotline +65 6826 6800 Fax +65 6820 2208 www.capitalandresidential.com [email protected] (Reg. No. 200102075W)
CapitaLand China
Holdings Pte Ltd
268 Xizang Road (Middle) #19-01 Raffl es City Shanghai 200001 Shanghai People’s Republic of China Tel +86 21 3311 4633 Fax +86 21 6340 3733 www.capitaland.com.cn [email protected] (Reg. No. 199302460C)
CapitaLand
Commercial Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3788 www.capitalandcommercial.com [email protected] (Reg. No. 197801869H)
CapitaMalls
Asia Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitamallsasia.com [email protected] (Reg. No. 200413169H)
The Ascott Limited
8 Shenton Way #13-01 Singapore 068811 Tel +65 6220 8222 Fax +65 6227 2220 www.the-ascott.com [email protected] (Reg. No. 197900881N)
CapitaLand
ILEC Pte. Ltd.
39 Robinson Road #16-01 Robinson Point Singapore 068911 Tel +65 6622 6000 Fax +65 6720 8608 www.capitalandilec.com [email protected] (Reg. No. 199701358Z)
CapitaLand
Financial Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6533 5182 www.capitalandfi nancial.com ask-us@capitalandfi nancial.com (Reg. No. 200308451M)
Australand
Holdings Limited
Level 3, Building C Rhodes Corporate Park 1 Homebush Bay Drive Rhodes NSW 2138 Australia Tel +61 (02) 9767 2000 Fax +61 (02) 9767 2900 www.australand.com.au [email protected] (Reg. No. ABN 12008443696)
CapitaMall Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitamall.com [email protected] (Reg. No. 200106159R)
CapitaCommercial Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6533 6133 www.cct.com.sg [email protected] (Reg. No. 200309059W)
Ascott Residence Trust
Management Limited
8 Shenton Way #13-01 Singapore 068811 Tel +65 6389 9388 Fax +65 6389 9399 www.ascottreit.com [email protected] (Reg. No. 200516209Z)
CapitaRetail China Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitaretailchina.com [email protected] (Reg. No. 200611176D)
Quill Capita
Management Sdn Bhd
Suite 11.01A, Level 11 Menara Citibank No. 165 Jalan Ampang 50450 Kuala Lumpur Malaysia Tel +603 2380 6288 Fax +603 2380 6289 www.qct.com.my [email protected] (Reg. No. 737252-X)
Registrar
M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Offi ce Singapore 068906 Tel +65 6227 6660 Fax +65 6225 1452 (Reg. No. 19701676D)
Auditors
KPMG LLP 16 Raffl es Quay #22-00 Hong Leong Building Singapore 048581 Tel +65 6213 3388 Fax +65 6225 6157 Engagement Partner since fi nancial year ended 31 December 2005: Eng Chin Chin
This Annual Report to Shareholders may contain forward looking statements that involve risks and uncertainties. Actual future performance, outcome and results may differ materially from those expressed in forward looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, availability of real estate properties, competition from other companies and venues for the sale/ distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefi ts and training, governmental and public policy changes and the continued availability of fi nancing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of management of future events.
This Annual Report is printed on recycled paper, except for the cover.
CONTENTS Financial Highlights & 5-Year Share Price Performance ................................ 1 Global Presence............................................................ 8 Letter to Shareholders ................................................ 10 Board of Directors ...................................................... 18 Council of CEOs ..........................................................24 Corporate Offi ce ......................................................... 29 Corporate Directory .................................................... 30 Corporate Governance................................................. 31 Group Businesses ...................................................... 40 Financial Calendar ........................................................ 41 Risk Assessment and Management ...........................42 Human Resource ........................................................ 43 Corporate Social Responsibility ...................................44 Stakeholder Communications..................................... 46 Year in Brief..................................................................47 CapitaLand Residential Singapore ...............................52 CapitaLand China ........................................................54 CapitaLand Commercial.............................................. 56
CapitaLand Retail ........................................................ 58 CapitaLand Serviced Residences ............................... 60 CapitaLand Integrated Developments .........................62 CapitaLand Financial Services .....................................64 Australand Property Group ......................................... 66 Awards and Accolades ............................................... 68 Performance Review ................................................... 71 Economic Value Added Statements ........................... 80 Value Added Statements ............................................. 81 Portfolio Analysis .........................................................82 Portfolio Details .......................................................... 83 5-Year Financial Summary .........................................104 Statutory Accounts ...................................................105 Other Information ..................................................... 206 Shareholding Statistics ............................................ 209 Notice of Annual General Meeting ............................ 211 Proxy Form ................................................................215
CORPORATE PROFILE CapitaLand Limited is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the multi-local company’s core businesses in real estate, hospitality and real estate fi nancial services are focused in growth cities in Asia Pacifi c and Europe.
The company’s real estate and hospitality portfolio, which includes homes, offi ces, shopping malls, serviced residences and mixed developments, spans more than 110 cities in over 20 countries. CapitaLand also leverages on its signifi cant asset base, real estate domain knowledge, fi nancial skills and extensive market network to develop real estate fi nancial products and services in Singapore and the region.
The listed subsidiaries and associates of CapitaLand include Australand, CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust and CapitaRetail China Trust.
CREDO Building for People to Build People Building People to Build for People
MISSION To build a world-class real estate company with international presence that:
• Creates sustainable shareholder value • Delivers quality products and services • Attracts and develops quality human capital
VISION A world-class entrepreneurial, prosperous and lasting real estate company led and managed by people with core values respected by the business and social community.
A leading real estate company in Asia, reputed for its innovative and quality real estate products and services.
A company with a strong global network of long-term investors and blue-chip partners.
A company which attracts, develops and retains a diversity of talents regardless of nationality, race or age.
A company which consistently creates value for shareholders.
Epigram M YC K While every effort has been taken to carry out instruction to customers satisfaction NO RESPONSIBILITY liablilty will be accepted for errors CUSTOMERS ARE THEREFORE URGED TO CHECK THOROUGHLY BEFORE AUTHORISING PRINT RUNSDALIM
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CAPITALAND LIMITED ANNUAL REPORT 2009
AHEAD OF THE CURVE GROWTH DURING GLOBAL CRISIS
S$1.05 BILLION PROFIT
GROUP RAISED S$5 BILLION
THROUGH FOUR RIGHTS ISSUES
GROUP MANAGES S$47.7 BILLION
OF REAL ESTATE ASSETS
LISTED CAPITAMALLS ASIA,
LARGEST IPO IN 16 YEARS
MORE THAN 110 CITIES
IN OVER 20 COUNTRIES
OVER 100 AWARDS AND ACCOLADES
CAPITALAND LIMITED
168 Robinson Road, #30-01 Capital Tower, Singapore 068912
Tel +65 6823 3200 Fax +65 6820 2202 (Reg. No. 198900036N)
www.capitaland.com
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capital land/CapitaLand Annual Report 2011.pdf
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CAPITALAND LIMITED 168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 (Reg No. 198900036N)
www.capitaland.com
This Annual Report is printed on environmentally-friendly paper.
The Art of Building CapitaLand Limited Annual Report 2011
Strategic Focus on Core Markets
Concentrating Presence in Key Cities
6th Consecutive Year of More Than S$1 Billion Profit
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Contents Corporate Profile 2
Financial Highlights 3
5-Year Financial Summary 4
Share Price Performance 5
M an
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Year In Brief 30
Corporate Directory 34
Financial Calendar 35
Board of Directors 36
Corporate Governance 44
Council of CEOs 56
Corporate Office 64
Global Presence 66
Performance Overview 68
Awards & Accolades 78
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CapitaLand 82 Residential Singapore
CapitaLand China 84
CapitaLand Commercial 86
CapitaMalls Asia 88
The Ascott Limited 90
CapitaLand Mixed 92 Developments
P o
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Commercial 112
Shopping Malls 114
Serviced Residences 122
Mixed Developments 128
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Stakeholder Communications 132
Economic Value 134 Added Statements
Value Added Statements 135
Other Information 136
Shareholding Statistics 140
Statutory Accounts 141
Notice of 251 Annual General Meeting
Proxy Form 255
CapitaValue Homes 94
CapitaLand Financial Services 96
Australand Property Group 98
Surbana Corporation 100
Human Resource 102
Corporate Social 104 Responsibility
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“To maintain our leadership position in these turbulent times, it is imperative to stay focused yet nimble. With our continual confidence in the real estate markets of Singapore and China, we are deepening our geographical imprint in these core markets.” LIEW MUN LEONG PRESIDENT & CEO CAPITALAND GROUP
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Financial Highlights
Corporate Profile
Revenue Under Management
S$7.4 billion
Profit attributable to shareholders
S$1.06 billion
6th Consecutive Year of Profit in Excess of S$1 Billion
Earnings before Interest and Tax
S$2.09 billion
Group Managed Real Estate Assets
S$60.3 billion
Return on Shareholders’ Funds
7.3%
Return on Total Assets
5.9%
Credo Building for People to Build People Building People to Build for People
Mission Our mission is to build a world-class company with international presence that • Creates sustainable shareholder value • Delivers quality products and services • Attracts and develops quality
human capital
CapitaLand is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the multi-local company’s core businesses in real estate, hospitality and real estate financial services are focused in growth cities in Asia Pacific and Europe.
The company’s real estate and hospitality portfolio, which includes homes, offices, shopping malls, serviced residences and mixed developments, spans more than 110 cities in over 20 countries. CapitaLand also leverages on its significant asset base, real estate domain knowledge, financial skills and extensive market network to develop real estate financial products and services in Singapore and the region.
The listed entities of the CapitaLand Group include Australand, CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust, CapitaRetail China Trust, CapitaMalls Malaysia Trust and Quill Capita Trust.
Vision • A world-class entrepreneurial, prosperous
and lasting real estate company led and managed by people with core values respected by the business and social community.
• A leading real estate company in Asia, reputed for its innovative and quality real estate products and services.
• A company with a strong global network of long-term investors and blue-chip partners.
• A company which attracts, develops and retains a diversity of talents regardless of nationality, race or age.
• A company which consistently creates value for shareholders.
Core Values • Our people are our strength. We build
people to build for people. • We are committed to the highest
standards of integrity. • We have the courage to do what is
right and the will to succeed. • We add value to what we do
through innovation and continuous improvement.
• We are fair and reasonable in all our actions and dealings with business partners, customers and colleagues.
• We contribute to the well-being of the community.
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5-Year Financial Summary
2007 2008 2009 2010 2011 (Restated) (1)
(A) INCOME STATEMENT (S$ million) Revenue by SBUs CapitaLand Residential Singapore 548.7 400.2 673.8 1,284.9 774.1 CapitaLand China Holdings 985.3 330.3 647.0 327.2 526.6 CapitaLand Commercial (2) 165.7 227.9 144.9 142.9 96.7 The Ascott Limited 459.5 441.8 393.7 407.4 377.5 CapitaValue Homes (2) – – – 0.1 80.3 CapitaLand Financial 119.2 182.2 162.2 116.2 103.3 CapitaMalls Asia 124.2 206.7 228.9 245.4 246.2 Australand 1,406.7 984.3 732.5 879.8 836.4 Others (16.6) (21.1) (25.6) (20.5) (21.5) Total 3,792.7 2,752.3 2,957.4 3,383.4 3,019.6 Earnings Before Interest and Tax (EBIT) by SBUs CapitaLand Residential Singapore 308.6 175.0 371.7 514.0 327.4 CapitaLand China Holdings 403.4 883.4 551.2 648.9 423.7 CapitaLand Commercial (2) 1,876.7 395.6 (497.4) 250.2 189.6 The Ascott Limited 337.2 132.2 31.4 173.0 148.4 CapitaValue Homes (2) – – – (20.5) (12.9) CapitaLand Financial 69.7 90.4 98.0 103.0 80.0 CapitaMalls Asia 297.9 298.6 449.1 603.4 597.0 Australand 470.0 169.6 (240.8) 311.9 324.2 Others 60.5 68.7 785.8 0.6 9.2 Total 3,824.0 2,213.5 1,549.0 2,584.5 2,086.6 Net Profit attributable to Shareholders 2,759.3 1,260.1 1,053.0 1,425.7 1,057.3 (B) BALANCE SHEETS (S$ million) Investment Properties 6,777.4 4,848.9 5,058.5 4,732.9 7,074.6 Development Properties for Sale and Stocks 3,540.8 3,347.2 3,590.2 5,667.1 6,905.1 Associates and Joint Ventures 6,450.7 7,864.6 8,684.2 10,048.8 10,685.0 Cash and Cash Equivalents 4,356.0 4,228.4 8,729.7 7,190.1 6,264.5 Other Assets 4,716.4 4,794.5 4,103.4 4,248.2 4,390.2 Total Assets 25,841.3 25,083.6 30,166.0 31,887.1 35,319.4 Equity attributable to Owners of the Company 9,940.9 10,681.7 13,408.3 14,031.9 14,901.5 Total Borrowings 9,916.1 9,829.3 10,312.6 10,358.0 12,190.6 Non-controlling Interests and Other Liabilities 5,984.3 4,572.6 6,445.1 7,497.2 8,227.3 Total Equities & Liabilities 25,841.3 25,083.6 30,166.0 31,887.1 35,319.4 (C) FINANCIAL RATIOS Earnings per share (cents) 98.6 37.0 26.2 33.5 24.8
Net Tangible Assets per share (S$) 3.53 3.57 3.03 3.18 3.40
Return on Shareholders’ Funds (%) 31.9 12.2 8.7 10.5 7.3
Return on Total Assets (%) 15.7 7.9 5.5 7.6 5.9 Dividends Ordinary Dividend per share (cents) 8.0 5.5 5.5 6.0 6.0 Special Dividend per share (cents) 7.0 1.5 5.0 – 2.0 Total Dividend per share (cents) 15.0 7.0 10.5 6.0 8.0
Dividend cover (times) 6.5 4.2 2.4 5.6 3.1 Debt Equity Ratio (net of cash) (times) 0.47 0.47 0.09 0.18 0.31 Interest Cover (times) 13.64 5.50 4.54 7.63 5.72 (1) Revenue recognition on development projects was revised following the adoption of INT FRS 115 Agreements for the Construction
of Real Estate. As required by INT FRS 115, the 2010 results were restated.
(2) With effect from 1 January 2011, the residential business in Vietnam is reported under CapitaValue Homes and no longer under
CapitaLand Commercial. The prior year's results were restated to align with the current year's presentation.
Share Price Performance
CapitaLand Share Price
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Straits Times Index
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STRENGTHENING OUR PRESENCE IN SINGAPORE Sky Habitat designed by star architect Moshe Safdie Pipeline of 2,500 residential units
JCUBE ASCOTT RAFFLES PLACE SINGAPORE
CAPITAL TOWERWESTGATE
20 shopping malls Selective acquisitions to extend market leadership
Expand serviced residence portfolio to 1,500 apartment units by 2015
Replenish Grade A office portfolio
Leverage development capabilities in mixed use sector to add to portfolio of 6 properties
SKY HABITAT
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CONCENTRATING OUR PRESENCE IN CHINA Grow beyond portfolio of 8 Raffles City developments
LAKESIDE WUHAN
ASCOTT RAFFLES CITY BEIJING
SUZHOU INTEGRATED DEVELOPMENTTHE PARAGON SHANGHAI
Pipeline of approximately 5,000 value homes
Grow serviced residence portfolio to 12,000 apartment units by 2015
Pipeline of more than 21,000 residential units
Grow portfolio of 56 shopping malls and ramp up operational malls
RAFFLES CITY HANGZHOU
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DEAR SHAREHOLDERS,
For the sixth consecutive year, the Group managed to achieve an annual net profit in excess of S$1 billion. This was despite a challenging 12 months ended 31 December 2011. Looking back, it was an exciting year for CapitaLand. Despite the soft global economic environment brought about by the sovereign debt crisis in the eurozone and low economic growth in the United States, the Group recorded a net profit of S$1.06 billion after tax and minority interests (PATMI). Against this backdrop, the Group made investment commitments related to projects with a total underlying gross development value of about S$11 billion. These new acquisitions are predominantly in Asia in accordance with our strategy, as we continue to build our business for profitable long-term growth.
Letter to Shareholders
S$6.3b CapitaLand
entered 2012 in a sound financial
position, with a strong cash
position of S$6.3 billion
and a healthy net debt equity ratio of 0.31
Our core markets of Singapore,
China and Australia accounted for
more than 97% of the
Group’s EBIT
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LIEW MUN LEONG PRESIDENT & CEO
DR HU TSU TAU CHAIRMAN
The global economic outlook has turned more cautious at the start of 2012. The growth forecast for the global economy in 2012 has been slashed by both the International Monetary Fund and World Bank to 3.3% and 2.5% respectively, threatened by intensifying strains in the eurozone. The weak growth in United States and Japan will also be a drag on global growth prospects.
CapitaLand has entered 2012 in a sound financial position, with a strong cash position of S$6.3 billion and a healthy net debt equity ratio of 0.31. This is due to a disciplined yet aggressive investment approach tempered with a focus on successful capital recycling.
SIXTH CONSECUTIVE YEAR OF NET PROFIT IN EXCESS OF S$1 BILLION For financial year 2011, CapitaLand registered a PATMI of S$1.06 billion, representing the sixth consecutive year in which CapitaLand posted PATMI in excess of S$1 billion. The comparison with financial year 2010’s restated profitability, which was revised upwards by 12% to S$1.43 billion, was affected by the adoption of the INT FRS 115 accounting policy from 1 January 2011. This new accounting standard requires revenue for real estate under construction for overseas projects and local projects that offer the deferred payment scheme to be recognised on completion rather than on a progressive percentage basis.
The financial performance in 2011 was commendable given the tough operating environment. During the year, the global economic prospects in the eurozone deteriorated and the authorities in Singapore and China implemented numerous rounds of cooling measures to rein in residential property prices in both countries. The good performance achieved in 2011 was the result of healthy contributions from our diverse businesses across different property sectors and geographies. Overseas contribution accounted for 58% of the Group’s earnings before interest and tax (EBIT) of S$2.09 billion, lifted by higher development profits and divestment gains from China, and stronger contribution from fair value gains in investment properties and serviced residence operations in Australia. Our core markets of Singapore, China and Australia accounted for more than 97% of the Group’s EBIT. The Group will continue to focus on the successes of these core markets, particularly Singapore and China.
Strong profitability and prudent capital management have ensured that CapitaLand’s balance sheet remains robust to ride out market volatility in 2012. Group-wide refinancing needs for 2012 have largely been met, with CapitaLand gaining accessibility to all available funding platforms such as banks, capital markets, real estate investment trusts (REITs) and private equity funds. The Group has maintained excellent financial flexibility, armed with a healthy net debt equity ratio of 0.31 and cash liquidity of S$6.3 billion.
S$1.06b The Group recorded a net profit of S$1.06 billion after tax and minority interests (PATMI)
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Our net tangible assets (NTA) per share increased 6.9% year-on-year to S$3.40 at the end of 2011 from S$3.18 on a restated basis at the end of 2010. With the latest financial performance, the Board has recommended a final ordinary dividend of 6 cents and a special dividend of 2 cents per share. Total dividend would increase 33% from financial year 2010. The payout demonstrates the Group’s track record of generating attractive total returns to shareholders and our commitment to achieve an optimal capital structure bearing in mind the committed and potential investment opportunities we have.
We thank you for your unwavering support in 2011. Looking ahead, Asia will continue to lead world economic growth in 2012 and form an integral part of CapitaLand’s business strategy.
On behalf of the Board and management of CapitaLand, we are pleased to share with you our 2011 performance and our plans for 2012.
STRATEGIC FOCUS ON CORE MARKETS CapitaLand will continue with its business approach of focus, balance and scale to build on the company’s strong fundamentals and enhance shareholder value. Moving forward, CapitaLand has identified Singapore, China and Australia as its three strategic core markets; Europe (for serviced residence business only), Malaysia and Vietnam as secondary markets; and Japan and India as opportunistic markets.
These three core markets of Singapore, China and Australia accounted for approximately 90% of the Group’s total asset allocation, while contributing 97% of EBIT in financial year 2011. Among these core markets, Singapore and China accounted for 72% of overall Group asset exposure and approximately 81% of the Group’s EBIT. The Group takes pride in its core development skills, operational, capital raising and management competencies spanning the entire real estate value chain in Singapore, China and Australia.
Singapore As at end 2011, CapitaLand’s Singapore business accounted for S$10.9 billion or 34% of the Group’s total assets. This diversified portfolio spans across shopping malls (40%), homes (28%), offices and mixed use development (20%), serviced residences (6%), financial services (1%), consultancy services via Surbana Corporation (2%) and others (3%). Singapore is CapitaLand’s most profitable core market, with EBIT contribution of S$877 million.
At the end of 2011, our Singapore shopping mall portfolio comprised 20 malls valued at S$14.5 billion. Of these 20 malls, 16 are income generating while four are under various stages of development or enhancement initiatives. CapitaMalls Asia (CMA), CapitaLand’s integrated shopping mall business, had an active year in Singapore in 2011. Apart from the ongoing asset enhancement initiatives (AEIs) conducted across the portfolio, the Group made two acquisitions – Iluma in Bugis and the Westgate site in Jurong Gateway.
In February 2011, CapitaMall Trust (CMT) acquired Iluma, an operational shopping mall located at Victoria Street, and connected by an overhead bridge to the popular Bugis Junction, one of CMT’s existing properties, for S$295 million. The integration of Iluma and Bugis Junction will create a seamless shopping experience with a combined shopping destination of net lettable area of more than 606,000 square feet, about the size of ION Orchard. AEI at Iluma commenced in November 2011, with expected completion in June 2012.
Operationally, our shopping malls in Singapore registered healthy annual tenants’ sales and shopper traffic growth of 5.5% and 2.2% respectively. The mall portfolio in Singapore is expected to receive a lift in earnings in 2012 when JCube and the AEIs at The Atrium@Orchard, Iluma and Clarke Quay are gradually completed.
In Singapore, the Seller’s Stamp Duty (SSD) and Additional Buyer’s Stamp Duty (ABSD) imposed by the government in January and December 2011 respectively, brought about a significant decline of residential sales volume in the secondary market, and more recently, short-term uncertainty as potential buyers adopt a “wait-and-see” attitude. However there is ample liquidity in the market, and given the favourable low interest rate environment, a significant correction appears unlikely.
Letter to Shareholders
CapitaLand’s three strategic core markets are Singapore, China and Australia
S$877m Singapore is CapitaLand’s most profitable core market, with EBIT contribution of S$877 million
Operationally, our shopping malls
in Singapore registered healthy
annual tenants’ sales and shopper
traffic growth of 5.5% and
2.2% respectively
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S$6b CapitaLand’s
3 million square feet of stable
income generating commercial and
mixed use portfolio valued at
S$6 billion, is held under CCT
WESTGATE SInGAPOrE
SKY HABITAT SInGAPOrE
Our Singapore residential business exceeded expectations despite being confronted with repeated government measures to curb speculative home purchasing. The Group sold 844 homes in 2011, up 6% from the previous year. Total sales value generated was S$1.35 billion. In November 2011, CapitaLand launched Bedok Residences in one of the most popular mature residential estates in Singapore amidst market uncertainty. Boosted by its unique and attractive features, Bedok Residences received overwhelming response and sold more than 81% of the available units at an average selling price of S$1,350 per square foot. The shopping mall component of the project, which has direct access to both the MRT and bus interchange, is scheduled to open by 2014.
In 2012, CapitaLand plans to progressively release new phases at The Interlace and d’Leedon, and launch Sky Habitat, the new 509-unit condominium project in Bishan Central. Designed by star architect, Moshe Safdie, the residential towers of Sky Habitat will be linked by three sky bridges offering spectacular views. The project is within walking distance to Bishan transportation hub and Junction 8 shopping mall.
Letter to Shareholders
Of the residential portfolio, CapitaLand has a low level of completed unsold stock. Majority of the units at Latitude, The Seafront on Meyer and The Orchard Residences have been sold. As at end 2011, CapitaLand has a pipeline of about 2,500 units and is confident of releasing 800 to 1,000 units per year over the next two to three years, subject to market conditions.
CapitaLand’s Singapore commercial and mixed use business embarked on two major developments in 2011 after a year of active capital recycling in 2010. The former Market Street Car Park, now renamed CapitaGreen, will be jointly redeveloped by CapitaLand, CapitaCommercial Trust (CCT) and Mitsubishi Estate Asia (MEA) into a new Grade A office tower at an estimated cost of S$1.4 billion. The project is designed by internationally acclaimed architect Toyo Ito, and is set to be the “greenest” 40-storey building in the CBD given its façade’s 55% green ratio. In fact, CapitaGreen is designed to achieve the Building and Construction Authority of Singapore (BCA) Green Mark Platinum award. Construction of the 887,000-square-feet building has commenced and is expected to complete in 2014.
In June 2011, CapitaLand, CMA and CMT were awarded the tender by the Urban Redevelopment Authority (URA) at S$969 million to develop an integrated shopping mall and office tower at Jurong Gateway. Named Westgate, it will be a new landmark in Jurong Gateway, continuing the transformation of the Jurong Lake District into Singapore’s largest regional centre. In January 2012, groundbreaking for the 741,000-square-feet development took place in record time, a mere seven months after we were awarded the tender. The shopping mall, also named Westgate, is earmarked for completion by Christmas 2013, while the office tower, named Westgate Tower, will be ready for occupation in late 2014.
These two mega developments aside, CapitaLand’s 3 million square feet of stable income generating commercial and mixed use portfolio valued at S$6 billion, is held under CCT. Singapore office market rents eased marginally towards the end of 2011 after a robust recovery that started in the middle of 2010. The office outlook is cautious in the short-term due to the slower economic growth. However both Westgate Tower and CapitaGreen are well positioned to capitalise on the potential uptrend in office rental upon their completion as there is limited new office supply completing in 2014.
Ascott’s Singapore serviced residence operations performed well in 2011, driven by strong tourist and business arrivals. Revenue Per Available Unit (RevPAU) of our Singapore portfolio which rose 18% year-on-year, exceeded the hospitality industry’s Revenue Per Available Room (RevPAR) growth of 15% in the same period. The Group has been successful in capturing the upscale segment of the industry, which saw a 16% year-on-year growth in RevPAR.
CapitaLand has a pipeline of about
2,500 units and is confident of
releasing 800 to 1,000 units per
year over the next two to three years, subject to
market conditions
revPAU of Ascott Singapore
portfolio which rose 18% year-on-
year, exceeded the hospitality
industry’s revPAr growth of 15% in the same period
The Group sold 844 homes in 2011, up 6% from the previous year
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S$360m CapitaLand acquired
a strategic 40% stake in Surbana
from Temasek holdings for
S$360 million
Our China malls continued to
perform well in 2011, registering
net property income (nPI)
growth of 20.7% compared with the
previous year
S$813m China is also CapitaLand’s second most profitable geography after Singapore, with EBIT contribution of S$813 million
residential projects sited in Greater Shanghai (inclusive of Kunshan), Beijing and Chengdu such as The Metropolis, The Pinnacle, Beaufort and The Loft achieved sales of 75% to 100% of units launched to-date
LAKESIDE wUhAn, ChInA
In 2011, Ascott Residence Trust (Ascott Reit) was granted Planning Permission by URA for the redevelopment of Somerset Grand Cairnhill Singapore into an integrated hotel and residential development. The planning permission for the redevelopment was granted with various terms and conditions including a requirement for the redevelopment site with a maximum allowable gross floor area of 43,300 square metre to comprise a minimum of 40% hotel and related use and 60% residential use. The redevelopment options are still under evaluation and at this stage there is no certainty of any proposed redevelopment materialising. This is part of the Group’s constant review of the serviced residence portfolio for potential enhancements to optimise the value of its assets.
The Group’s Singapore consultancy services business, conducted through Surbana, maintained its leadership in the Housing and Development Board (HDB) market while making inroads into other sectors. Surbana managed to secure new consultancy projects such as Singapore University of Technology and Design and completed the Punggol Waterway and Aquatic Science Centre during the year.
China As at end 2011, China is CapitaLand’s largest market in terms of assets, accounting for S$12.0 billion or about 38% of the Group’s overall balance sheet. China is also CapitaLand’s second most profitable geography after Singapore, with EBIT contribution of S$813 million. CapitaLand’s assets in China are well diversified across the following sectors: residential (38%), shopping mall (30%), mixed use development (22% ), serviced residence (7%), township cum consultancy services (via Surbana) and others (3%).
In China, the Home Purchase Restrictions imposed by the Chinese government to rein in asset inflation are beginning to have an effect on lowering residential sale prices and activities. Developers’ inventories of unsold properties at the end of 2011 were 26% higher than a year ago, while new home sales slowed significantly in the second half of 2011, up 3.9%, against a 12.1% rise in the first half.
Our residential business in China performed reasonably well, managing to sell approximately 1,500 residential units of 3,300 units launched and generated sales value of RMB3.1 billion in 2011. Of the completed units, only about 500 units remained unsold. Projects sited in Greater Shanghai (inclusive of Kunshan), Beijing and Chengdu such as The Metropolis, The Pinnacle, Beaufort and The Loft achieved sales of 75% to 100% of units launched to-date. The Group also managed to secure a prime 32,040-square-metre residential development plot in Hangzhou with the potential to yield gross floor area of 80,105 square metre for RMB1,114 million to replenish the pipeline for future growth.
Through the Orient Overseas Developments Limited portfolio, CapitaLand has demonstrated its ability to execute timely market launches and swift commencement of construction activities. Of the three residential projects located near Greater Shanghai, the average transaction prices achieved were above the Group’s internal underwritten sale price assumptions.
Our value homes segment was similarly active in 2011, securing two development sites in Guangzhou and Shanghai. These two sites will add over 2,400 homes, bringing the total development pipeline to approximately 5,000 value homes with gross floor area in excess of 500,000 square metres. Construction activities have commenced at our Lakeside project in Wuhan.
This mass market value housing business was given a boost during the year when CapitaLand acquired a strategic 40% stake in Surbana from Temasek Holdings for S$360 million. Surbana is a well established real estate consultant and township developer with a global footprint, and is a leading township developer in China with projects in Shenyang, Xi’an, Chengdu and Wuxi. The purchase is part of CapitaLand’s objective to complement and accelerate the growth of its value housing business by leveraging on Surbana’s expertise, particularly in large scale mass market residential developments. Surbana will also add significant technical expertise to CapitaLand through its consultancy business.
CapitaLand’s integrated shopping mall business, CMA, capitalised on its financial strength as well as operational competency to acquire and open new malls. We also improved the yields of our operating malls to further seal our position as the leading shopping mall developer, owner and manager in China. Our China malls continued to perform well in 2011, registering net property income (NPI) growth of 20.7% compared with the previous year. The average occupancy of our China malls portfolio with at least two years of operating history is 97.4%. In 2011, these malls generated gross yield and NPI yield on cost of 11.8% and 6.8% respectively.
Letter to Shareholders
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raffles City Chengdu and
raffles City ningbo are scheduled to commence
operations by the second half of 2012
S$12b The current eight raffles City projects in China have an aggregate portfolio value of S$12 billion and boast a total floor area of over 2.8 million square metres of prime commercial space
SUZHOU INTEGRATED DEVELOPMENT ChInA
ASCOTT FINANCIAL CITY CHENGDU ChInA
Compared to 2010, tenants’ sales and shopper traffic in our China malls experienced healthy growth rates of 13.2% and 7.5% respectively. Three malls were opened in China in 2011 – Minhang Plaza and Hongkou Plaza in Shanghai, and CapitaMall Crystal in Beijing. As at end 2011, we owned and managed 42 operating malls, with another 14 under development in China. With an extensive presence in China, CMA is well positioned to tap into the strong consumption growth trend in the second largest economy globally.
In 2011, CMA made a significant foray into Suzhou with the signing of an agreement with Suzhou Industrial Park Jinji Lake Urban Development Co., Ltd (SIPJUD) to develop and own a shopping mall and two office towers on a prime site in Suzhou. This is our maiden project and the largest shopping mall in the city. The mall is located at the heart of the western Central Business District (CBD) of Suzhou Industrial Park, next to the renowned Jinji Lake and near the traditional city centre. With a lack of quality malls within the Jinji Lake vicinity, this latest shopping mall is set to be the focal point of retail activities upon completion.
CapitaLand extended its highly successful Raffles City footprint to Chongqing in 2011, making it the eighth such mixed use development in China. Following a successful tender in November 2011, CapitaLand, together with CMA and Singbridge Holdings (a unit of Temasek) will jointly develop the iconic Chao Tian Men site, located at the confluence of Yangtze River and Jialing River in Chongqing, into a landmark mixed use development including a shopping mall and eight towers for residential, office, serviced residence and hotel use. The project, designed by star architect Moshe Safdie, is slated for completion in phases from 2017 and beyond.
The current eight Raffles City projects in China have an aggregate portfolio value of S$12 billion and boast a total floor area of over 2.8 million square metres of prime commercial space. The eight Raffles City mixed use complexes span across Beijing, Chengdu, Ningbo, Hangzhou, Shenzhen and Chongqing, with two in Shanghai.
Of the eight Raffles City projects, two are in operation, while another two are slated to commence operations in the second half of 2012. The remaining four are in various stages of development. The current two operational Raffles City developments in Shanghai and Beijing are performing exceptionally well, with occupancy exceeding 95%. Raffles City Shanghai has witnessed a 17% compounded average growth rate in net property income since its opening in 2004. Raffles City Beijing, which completed its second year of operations, also chalked up a 76% year-on-year growth in net property income in 2011.
Raffles City Chengdu and Raffles City Ningbo are scheduled to commence operations by the second half of 2012. Pre-leasing activities for the retail and office components are in full swing and pre-committed occupancy for both assets is encouraging.
Our China serviced residence portfolio performed well with RevPAU growth of 9% year-on-year in local currency terms. Ascott further cemented our market leadership position in China by expanding the serviced residence portfolio by 1,135 apartment units to over 7,500 apartment units as at end 2011.
Letter to Shareholders
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A$300m Commercial & Industrial division successfully completed 13 projects with a combined end value of approximately A$300 million
The company is confident of the long-term
prospects of the property market
in Singapore and China, and will
devote the bulk of its resources
and efforts when deploying new
investment capital in the two markets
going forward
Malaysia, Vietnam and Europe
account for 6% of the Group’s total
assets and present potential for
further growthA$135m Australand successfully achieved a 6% increase in operating profit to A$135 million in 2011
BOTANICA SydnEy, AUSTrALIA
Letter to Shareholders
The Group clinched seven new management contracts across Beijing, Shanghai, Chengdu, Foshan, Hong Kong, Macau and Wuhan and opened two properties in Shenzhen and Xi’an. We will be adding our premier brand – Ascott The Residence, to three new properties in Foshan, Chengdu and Macau. Ascott also successfully recycled more than S$270 million in divestment proceeds from the sale of Ascott Beijing and New Minzhong Leyuan Mall in Wuhan into an increased stake of 36.1% in Ascott China Fund (ACF) and CapitaRetail China Trust respectively, and acquired 20% interest each in The Paragon and Hengshan Road development projects in Shanghai. In 2011, the US$500 million ACF fully deployed its committed capital and is set to reap returns from its investments in the coming years.
Australia In Australia, CapitaLand’s 59.3% owned subsidiary Australand, successfully achieved a 6% increase in operating profit to A$135 million (S$176 million) in 2011. The full year operating result demonstrates the resilience of the Group’s high quality investment portfolio as well as increased earnings from development activities.
The Investment property portfolio, contributing 68% of Australand’s earnings, continued its track record of growth in 2011 with occupancy at 99.3%, while the Residential division delivered 2,536 lot sales during the same period, representing a 15% increase over 2010. The Australian residential market continues to be underpinned by population growth and demand for affordable products. Australand’s residential division remains well positioned with over 21,000 lots under management in its development pipeline at an estimated end value of A$8.1 billion (S$10.5 billion).
The Commercial & Industrial division successfully completed 13 projects with a combined end value of approximately A$300 million (S$392 million).
Boosted by Australand’s healthy pipeline of residential, office and industrial projects and the expected growth in investment earnings, the Group continues to be optimistic about the outlook.
Other Markets Outside the core markets of Singapore, China and Australia, CapitaLand maintains a relatively large and stable operation in the three secondary markets of Malaysia, Vietnam and Europe. These three secondary markets account for 6% of the Group’s total assets and present potential for further growth.
Aside from the serviced residence business in Malaysia, the Group has five operational shopping malls, four of which are held under CapitaMalls Malaysia Trust (CMMT). Following the acquisition of Gurney Plaza Extension in March 2011 and East Coast Mall in Kuantan in November 2011, CMMT’s income and geographical diversifications will be further enhanced.
Vietnam presents a value proposition for CapitaLand given its young population, rising income levels and rapid urbanisation trend. While the Group has been a leading serviced residence owner cum operator in Vietnam, it also envisages potential to offer affordable to mid end homes at competitive price points to the local residents. Currently, CapitaLand has six residential projects under various stages of development across Ho Chi Minh City and Hanoi.
In Europe, Ascott has over 5,100 apartment units in 46 serviced residences and will continue to seek suitable opportunities to strengthen its presence.
INVESTMENT PHILOSOPHY – CONCENTRATING PRESENCE CapitaLand’s various investments in Singapore and China in 2011 have laid the foundation for our future growth. The Group will continue to focus on its core markets of Singapore and China. In particular, the Group is looking to concentrate its real estate presence in key Chinese cities.
The company is confident of the long-term prospects of the property market in Singapore and China, and will devote the bulk of its resources and efforts when deploying new investment capital in the two markets going forward.
While the current credit crunch faced by some real estate developers could potentially present the Group with new investment opportunities via asset sale or mergers and acquisitions, CapitaLand will adopt a disciplined strategy when evaluating them. Capital allocation to new investments will be balanced between development activities and steady income yielding assets within the residential, shopping mall, commercial and mixed use segments.
Singapore The success of Singapore as a metropolis for work (commercial offices and integrated complexes), rest (residential homes and service residences) and play (shopping malls) has strengthened the investment appeal of the island state.
CapitaLand plans to leverage on its development capabilities in the mixed use segment when seeking new acquisitions. The Group’s competitive advantage lies in our in-house development and operational expertise spread over different property segments, enabling CapitaLand to capitalise on such investment opportunities in mixed use projects effectively. Our experience in mixed use projects dates back to 1986 when we only had Raffles City Singapore, to recent landmark developments such as Wilkie Edge, ION Orchard and The Orchard Residences, Bedok Residences and the shopping mall below, The Star and Westgate.
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As the largest shopping mall owner in Singapore, CMA enjoys the benefits of economies of scale and strong presence across the island
RAFFLES CITY CHONGqING ChInA
Approximately 90% of CapitaLand’s China property
asset value is concentrated in 10 major cities
such as Shanghai, Beijing, Chengdu,
Tianjin, Shenzhen, hangzhou,
Guangzhou, Kunshan,
Chongqing and Foshan
Letter to Shareholders
CapitaLand will boost its residential pipeline to fulfill its ambition to be one of the top three residential developers in Singapore by market share. Our robust financial position and ability to bring in joint venture partners will enable the Group to explore larger residential developments requiring significant capital outlay. The Group will be closely evaluating well located sites under the Government Land Sale (GLS) programme as well as private collective sales.
CapitaLand’s strategic reconstitution of its office portfolio where Grade B assets were divested and proceeds recycled into Grade A developments such as CapitaGreen and Westgate Tower, enhances the portfolio value as Grade A developments tend to be more resilient under challenging market conditions. The ongoing enhancement of Six Battery Road and the redevelopment of CapitaGreen will offer CapitaLand a greater presence in the CBD with buildings that will meet the highest demands of its tenants. The Group will be seeking to replenish its Grade A office portfolio with development sites or completed buildings with the potential to be upgraded or enhanced into quality Grade A assets in central CBD or other good locations. Where appropriate, CapitaLand will jointly develop or co-invest with other capital partners or our listed REIT CCT.
As the largest shopping mall owner and manager in Singapore, CMA enjoys the benefits of economies of scale and strong presence across the island. CMA’s continued efforts to reach out to tenants through programmes such as Biz+ seminars and retailers’ forums add value to tenants. Retailers’ forums, for example, provide tenants with additional opportunities to meet new investors and business partners, including franchisees and potential employees, and highlight CMA’s competitive advantage in helping them expand to our malls around the region for mutual growth. The completion of new malls coupled with strong execution of AEIs on our existing malls will form the backbone of CMA’s drive to improve the profitability of our shopping mall portfolio.
Ascott will continue to expand and enhance its serviced residence portfolio through new investments, AEIs as well as pursue new management contracts. At the same time, it will strengthen its global operating platform and improve its service standards to achieve higher operational yields.
CapitaLand will continue to grow its existing REITs and private equity funds under management through accretive acquisitions and asset enhancements. It will also explore new real estate structured financial products and property funds.
The Group’s business model of capital recycling and prudent capital management will provide us with a high level of financial flexibility.
China China has already established itself as CapitaLand’s largest investment destination given the market’s depth and breadth. With rapid urbanisation, growing disposable incomes and limited investment options, China’s property market continues to remain attractive. The government’s cooling measures ensure a healthy and steady residential real estate market, which will benefit the real estate industry in the long-term.
Having cemented its position as the second largest economy globally, China will continue to present investment opportunities for CapitaLand. The robust economic growth will ensure a long and sustainable real estate development runway for CapitaLand. The Group has been investing in China since 1994, and is today a leading foreign real estate company there with diversified real estate businesses. Our accumulated portfolio in China is worth S$30 billion comprising more than 120 projects across 40 cities.
The Group intends to focus its investment activities on the residential, shopping mall, mixed use and serviced residence sectors in key Chinese cities to build on our leadership position in the respective markets. Capital deployment will be directed to key Chinese cities where the Group has a meaningful presence or where it has identified the potential to support a sizeable business operation. Approximately 90% of CapitaLand’s China property asset value is concentrated in 10 major cities such as Shanghai, Beijing, Chengdu, Tianjin, Shenzhen, Hangzhou, Guangzhou, Kunshan, Chongqing and Foshan. Shanghai and Beijing, the key financial and political hubs of China, account for 34% and 14% of the Group’s property value in China respectively.
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Australand’s focus is on the
residential, industrial and office sectors,
where the Group has distinct competitive advantages
CMA has a total of 56 shopping malls across 35 cities in China, with a total GFA of 61.1 million square feet
CAPITAMALL WUSHENG AND SOMERSET WUSHENG WUHAN ChInA
S$10b during the year,
approximately S$10 billion was
raised across the Group
Letter to Shareholders
Every Raffles City project is an iconic development and CapitaLand will be leveraging on the Raffles City brand to secure more investments in key Chinese cities. With the successful acquisition of an eighth Raffles City project in Chongqing, CapitaLand is well on course to fulfill its target of building 10 Raffles City projects in China. Each Raffles City development will be located in a prime location, an iconic design by a star architect and most importantly, a seamless integration of two or more real estate functions such as a mall, an office tower, a hotel and a serviced residence into one cohesive development under one roof.
As a niche developer in upper middle to luxury residential projects in China, CapitaLand will seek to replenish residential plots for development at reasonable prices within its existing four regions of East China (based in Shanghai), North China (based in Beijing), South China (based in Guangzhou) and South-west China (based in Chengdu). With 18 projects that could potentially offer approximately 21,000 housing units, the Group has a healthy pipeline for the next five years.
In 2011, CapitaLand stepped up efforts to build a strong pipeline of value homes, which are less impacted by government home purchase restrictions. The Group has already set up its presence in Wuhan, Guangzhou and Shanghai with three projects under its belt. Our target is to build approximately 10,000 value homes annually over the next three years, with the bulk of new acquisitions dedicated to these three regions.
The key cities of Shanghai, Beijing, Guangzhou and Shenzhen have a tight office supply in core CBD, driven by a growing demand from foreign and local financial institutions and consultancies. Outside of Shanghai and Beijing, our office investment strategy will be tied to our Raffles City projects.
CMA has a total of 56 shopping malls across 35 cities in China, with a total GFA of 61.1 million square feet. Of these, 42 malls are operational. The conversion of our CapitaRetail China Development Fund to an income fund with a 50% upsize to US$900 million reflected the evolution of the portfolio of shopping malls from assets under development into operational malls. CMA will continue to enhance its early mover advantage and entrench into key cities to further build up our presence and leverage on economies of scale. Ascott will broaden our serviced residence footprint in China to cater to a fast growing domestic travel market. The Group aims to grow its serviced residence portfolio in China to 12,000 apartment units by 2015. In addition to expanding the business through securing new management contracts, Ascott is ready to deepen its investments and entrench its leadership position in key cities such as Shanghai, Beijing, Shenzhen, Guangzhou, Chengdu and Wuhan.
Australia CapitaLand adopts a cautious outlook for the Australian economy for 2012 as the domestic economy remains soft outside of the resources sector and its related industries.
The Group’s main investment activities in Australia will be conducted via Australand, with focus on the residential, industrial and office sectors, where the Group has distinct competitive advantages. Australand is cautiously optimistic on the business outlook given its well leased investment portfolio, solid contracted forward workload for the commercial and industrial business and healthy level of residential contracts on hand.
STRATEGIC CAPITAL MANAGEMENT The Group has maintained a healthy balance sheet during an active year of investment activities. CapitaLand had made new investment commitments related to projects with a total underlying gross development value of about S$11 billion. At the same time, it crystalised the value of its portfolio by recycling some of its S$1.65 billion of divestment proceeds. The Group has healthy financial capacity with S$6.3 billion of cash and a net debt equity ratio of 0.31 as at end 2011. Less than 20% of our total debt is due within one year and our average debt maturity profile has improved to 3.8 years. In a period of great volatility and tight liquidity, the Group has managed to garner the continued support from its lending banks.
CapitaLand has maintained a diversified and balanced source of funding. This is done through funding from banks, capital markets and private equity capital. In recent years, the Group stepped up efforts to broaden its reach by tapping the debt capital markets for funding. During the year, approximately S$10 billion was raised across the Group; with about S$7 billion of bank loans raised, S$2 billion
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Through My Schoolbag, CMA donated schoolbags containing school and daily necessities to nearly 19,000 underprivileged children in Singapore, China, Malaysia, Japan and India in 2011, with funding from CapitaLand Hope Foundation
Every year, CapitaLand allocates up
to 0.5% of its net profit to
CapitaLand hope Foundation, the
philanthropic arm of CapitaLand
we will continue to embrace our credo of “Building People” by enlarging and enriching our talent pool, and developing our leadership and management teams
Letter to Shareholders
via Commercial Mortgaged Backed Securities (CMBS), Sing-dollar corporate and retail bonds, and S$0.8 billion in equity and equity linked instruments. With two issuances of retail bonds amounting to S$500 million, the Group has successfully developed a differentiated source of debt funding, creating an investor base of more than 20,000 retail bond investors to tap for future offerings. A proactive approach towards refinancing requirements means that the bulk of the Group’s immediate funding needs have been met.
In September 2011, management initiated its maiden share buyback programme. As part of this exercise, CapitaLand purchased a total of about 25.0 million shares, to be treated as treasury shares, at an average price of S$2.52 per share.
Our prudent capital management of optimising our sources and cost of capital and a sustainable dividend policy are efforts aimed towards a more efficient capital structure for the Group and maximising returns over the next few years. The Group’s confidence is backed by our robust financial position and a capital structure that has the flexibility and capacity to meet a diverse business environment in the coming year.
DEVELOPING HUMAN CAPITAL CapitaLand recognises the importance of developing and growing our human capital. The Group has an integrated human capital strategy to recruit, develop and motivate employees. Our consistent focus on building our talent pool ensures that we have depth in our management bench. CapitaLand actively identifies talents internally and externally to build its pipeline for succession planning and bench strength.
We will continue to embrace our credo of “Building People” by enlarging and enriching our talent pool, and developing our leadership and management teams. Young talent, mid-career professionals and “silver hairs” are part of our inclusive multi-prong approach in our investment in human capital. CapitaLand continues to provide training and development opportunities to equip employees for the competitive business environment internationally through programmes conducted by our own CapitaLand Institute of Management and Business (CLIMB), Ascott Centre for Excellence (ACE) and Innovation, Creativity, Entrepreneurship (ICE) initiatives. A strong pool of management talents, who are well trained, tested and equipped, have been identified for greater responsibilities and are set to take over key leadership roles to steer the Group to greater heights. With the guidance of the Board, they will chart the course for CapitaLand‘s future.
CORPORATE SOCIAL RESPONSIBILITY As a good corporate citizen, CapitaLand has always been committed to doing things responsibly in the communities we operate within. CapitaLand’s corporate social responsibility (CSR) efforts are in the areas of corporate philanthropy, volunteerism, community and the environment. For our efforts, we were listed on the Global 100 Most Sustainable Corporations in the World by Corporate Knights and the Sustainability Yearbook 2012, and was one of the three Singaporean companies in the Dow Jones Sustainability Asia Pacific Index.
Every year, CapitaLand allocates up to 0.5% of its net profit to CapitaLand Hope Foundation (CHF), the philanthropic arm of CapitaLand, as CapitaLand’s CSR commitment to support programmes for the shelter, education and healthcare needs of underprivileged children in the communities where CapitaLand operates.
For the first time, in 2011, CapitaLand partnered five Community Development Councils in Singapore to extend the donations from its Green for Hope @ CapitaLand campaign to more beneficiaries. The reach of our Green for Hope @ Primary Schools campaign was expanded to all primary schools in Singapore during the year. Green for Hope is our annual recycling campaign that marries green efforts with philanthropy. In collaboration with CHF, Green for Hope encourages tenants, shoppers and serviced residence guests at our properties and primary school students to go green by recycling, and in doing so, “earn” donations to benefit underprivileged children. CHF donated S$2 for every kilogramme of recyclable waste collected from the participating CapitaLand properties and primary schools.
Beyond Singapore, CHF also extended its corporate philanthropy to underprivileged children in countries where CapitaLand has a presence. Through My Schoolbag, CMA’s signature annual CSR programme, the Group donated schoolbags containing school and daily necessities to nearly 19,000 underprivileged children in Singapore, China, Malaysia, Japan and India. 2011 was the first time CMA extended My Schoolbag to Malaysia, Japan and India.
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On behalf of the Board and management, I wish to inform you that Dr Hu Tsu Tau will not be seeking re-appointment at the forthcoming Annual General Meeting. We would like to thank Dr Hu for his strong leadership at the Board providing vision, stewardship and oversight for the last eight years. As Chairman since April 2004, he successfully steered the Group to consistently deliver good results, even amidst very difficult market conditions. We wish him well in his retirement. – Mr Liew Mun Leong
with our strong balance sheet and gearing capacity,
we remain confident and are
ready for selective acquisitions as
well as to weather market volatility
CapitaLand also actively promotes volunteerism among its staff
we strive to be an environmentally- sustainable real estate developer and aim to be at the forefront of the industry in terms of green buildings and environmental awareness
JCUBE SInGAPOrE
with our three core markets of
Singapore, China and Australia,
the Group is well poised to benefit from this growth
Letter to Shareholders
CapitaLand also actively promotes volunteerism among its staff. Each staff is given three days of paid volunteer service leave each year for charitable work of his choice. In 2011, CapitaLand staff volunteered over 9,800 hours in various activities across Asia, particularly in China and Vietnam. Our staff enthusiastically volunteered in the construction and upgrading of school facilities and teaching of young children at CapitaLand Hope Schools in these two countries.
We strive to be an environmentally-sustainable real estate developer and aim to be at the forefront of the industry in terms of green buildings and environmental awareness. For demonstrating best practices in ‘green’ excellence and innovation, we were conferred the Asia Pacific Green Builder of the Year award at the inaugural 2011 Frost & Sullivan Asia Pacific Green Excellence Awards. We also obtained 17 green building awards with our Singapore shopping mall, JCube, clinching the prestigious Green Mark Platinum award by the Building and Construction Authority (BCA).
As environmental management and occupational health and safety are of paramount importance to CapitaLand, we more than doubled our geographical reach of our ISO 14001 and OHSAS 18001 certification (international standards which are externally audited) in Singapore, China, Japan, Malaysia and Vietnam to Australia, France, India, Philippines, Thailand and United Kingdom. Recognising our extensive environmental management system, Global Real Estate Sustainability Benchmark (GRESB) acknowledged CapitaLand as one of the Asian leaders in environmental management in its 2011 survey.
GOING FORWARD Looking into 2012, we expect Asia to lead world economic growth. With our three core markets of Singapore, China and Australia, the Group is well poised to benefit from this growth. Singapore is forecasted to grow between 1% and 3%, while China is targeting 7.5% growth.
Going forward, CapitaLand will continue to build on its leadership position in multi-sector real estate businesses to drive our growth strategy. We expect to be entrenched in the key cities and regions that we are currently in and achieve economies of scale.
With our strong balance sheet and gearing capacity, we remain confident and are ready for selective acquisitions as well as to weather market volatility.
Despite possible economic headwinds, we are confident that CapitaLand, led by strong management and armed with a robust balance sheet, will be able to continue growing our business in 2012 and beyond.
We welcome Ms Euleen Goh to the Board and look forward to her counsel and contributions in the years ahead. We want to acknowledge the invaluable contributions from outgoing directors Mr Richard Hale and Dr Fu Yuning who will not be seeking re-appointment and re-election respectively at the forthcoming Annual General Meeting. Mr Hale will also step down as Chairman of the Audit Committee and as member of the Risk Committee upon his retirement.
Mr Ng Kee Choe will be appointed as Chairman of the Board as well as Chairman of the Group’s Investment Committee on 1 May 2012. Mr Ng brings with him wide ranging experience in major companies and a distinguished career in banking. We are confident that he will be able to offer his vision and expertise to steer the Group to its next phase of growth.
On behalf of the Board and management, we wish to thank all staff, shareholders, business partners and associates for their continued commitment and support of the Group.
DR HU TSU TAU LIEW MUN LEONG CHAIRMAN PRESIDENT & CEO
28 February 2012
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Year In Brief
JANUARY CapitaLand signed an agreement to acquire Marine Point for S$100.7 million through a collective sale. CapitaLand plans to redevelop the freehold site into a distinctive condominium with 150 units for cosmopolitan living.
Shinjuku Front Square, Tokyo, Japan, a prime commercial cum residential development in Kita-Shinjuku was unveiled. Shinjuku Front Square comprises a 35-storey commercial tower named Shinjuku Front Tower and a 20-storey residential tower named The Park House Shinjuku Tower.
Ascott expanded into Germany’s second largest city, Hamburg, through acquiring a turnkey project to be developed into Citadines Michel Hamburg. It also entered into a joint venture to develop its first Citadines Apart’hotel in Bangalore, Citadines Galleria Bangalore, and secured contracts to manage two more serviced residences in the Philippines – Ascott Bonifacio Global City Manila and Citadines Salcedo Makati.
CapitaMalls Asia launched S$200.0 million worth of 1-year and 3-year retail bonds to the public in Singapore with interest rates of 1.00% and 2.15% per annum respectively. The public offer was more than 1.8 times subscribed.
FEBRUARY CapitaLand clinched a 99-year leasehold site in Bishan Central for S$550.1 million through a government land sales tender. CapitaLand plans to create a new architectural landmark on the site.
CapitaLand acquired an incremental 38% stake in a 575,787-square metre waterfront site in Panyu District, Guangzhou. Located along the Pearl River, CapitaLand will be the lead manager for the project, which will be developed into a residential estate comprising approximately 7,800 low-density and high-rise homes equipped with retail, fitness and recreational facilities, and schools.
Ascott strengthened its leadership position in China and Malaysia with the opening of Ascott Maillen Shenzhen, Somerset Heping Shenyang and Somerset Ampang Kuala Lumpur, and secured a contract to manage its first serviced residence in Cyberjaya, Citadines D’Pulze Cyberjaya.
CapitaMall Trust purchased Iluma, Singapore for a purchase consideration of S$295.0 million.
MARCH CapitaLand entered into a joint venture with Japan’s Mitsubishi Estate Co., Ltd. to jointly develop the Bishan Central condominium. CapitaLand will hold a 75% stake in the venture while Mitsubishi Estate will hold the remaining 25%.
CapitaLand organised the inaugural CapitaLand Debt Investor Relations Forum in Singapore.
APRIL CapitaLand divested its entire 40% stake in its joint venture company, TCC Capital Land Limited, for a cash consideration of THB2,340.8 million (approximately S$97.1 million).
Ascott acquired its first serviced residence in the German city of Frankfurt, Citadines Messe Frankfurt, and entered Macau SAR in China through clinching a contract to manage Ascott Paragon Macau.
MAY CapitaLand held a ceremony to announce its presence in Tianjin. The event was officiated by Mr Li Yali, Deputy Director of Standing Committee of Tianjin Municipal People’s Congress.
CapitaLand launched Dolce Vita, located in the heart of Jinshazhou in Baiyun district, Guangzhou. Buyer response was strong, with 80% of launch units sold.
Ascott acquired two prime properties in Paris to be developed into its first serviced residence in France under the premier Ascott brand. Ascott also secured contracts to manage three more serviced residences in Indonesia, Malaysia and Qatar – Somerset Kencana Jakarta, Somerset Damansara Uptown Petaling Jaya and Ascott Doha.
CapitaLand signed a Joint Venture Agreement with Khang Dien Sai Gon Real Estate JSC to jointly develop an approximately 29,000-square metre site in District 2, Ho Chi Minh City, Vietnam, into 974 value homes. CapitaLand and Khang Dien held 70% and 30% stake, respectively, in the joint venture company. The project, named PARCSpring, was subsequently injected into a joint venture fund which CapitaLand holds a 50% stake.
CapitaLand acquired 65% stake in Quoc Cuong Sai Gon Company for a cash consideration of VND121.2 billion (approximately S$7.3 million). Quoc Cuong owns an approximately 9,000-square metre piece of land in Binh Chanh District, Ho Chi Minh City, Vietnam. The project has received the Investment Certificate to be developed into approximately 800 value homes.
CapitaMalls Asia converted CapitaRetail China Development Fund to CapitaMalls China Income Fund, and upsized it by 50% to US$900.0 million (approximately S$1,127.1 million).
CapitaLand, CapitaMalls Asia and CapitaMall Trust were awarded a prime land parcel at Jurong Gateway, Singapore by the Urban Redevelopment Authority (URA), with plans for a retail-cum-office project at Singapore’s largest regional centre for a development cost of about S$1.5 billion. The development is named Westgate.
CapitaRetail China Trust (CRCT) acquired CapitaMall Minzhongleyuan, previously known as New Minzhong Leyuan Mall, in Wuhan, China at an agreed property price of RMB395.0 million (approximately S$78.6 million).
CapitaMalls Asia organised the inaugural Retailers’ Forum in Chengdu, China for more than 600 participants to network and seek expansion opportunities in other markets.
Orchard Turn Developments Pte Ltd, Singapore, the owner and manager of ION Orchard and The Orchard Residences, was accorded the BCA Design and Engineering Safety Excellence Award.
JUNE Raffles City Singapore (via special purpose vehicle Silver Oak Ltd.) issued US$645.0 million five-year secured floating rate notes which was 1.7 times subscribed.
CapitaMalls Malaysia Trust (CMMT) acquired East Coast Mall, Kuantan, Malaysia for a purchase consideration of RM310.0 million (approximately S$129.0 million).
CapitaMalls Asia opened Minhang Plaza in Shanghai, China.
JULY CapitaLand, CapitaCommercial Trust and Mitsubishi Estate Asia signed a joint-venture agreement to redevelop Market Street Car Park into CapitaGreen, a Grade A office tower at an estimated total project development cost of S$1.4 billion.
Ascott signed a lease agreement for Citadines Richmond Bangalore, its first serviced residence to open in India.
CapitaMalls Asia opened The Celebration Mall, Udaipur in India.
AUGUST CapitaLand secured a prime 32,040-square metre residential site in Gongshu district, Hangzhou, to develop 700 units of mid- to high-end homes.
Ascott acquired its first serviced residence in Hai Phong in Vietnam, Somerset Central TD Hai Phong City, and clinched contracts to manage two more properties in China – Ascott Financial City Chengdu and Somerset Wangjing Beijing.
CapitaMalls Asia acquired the remaining 50% stakes in Minhang Plaza and Hongkou Plaza in Shanghai, China for approximately US$789.0 million (approximately S$988.1 million).
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CapitaLand, together with CapitaMalls Asia and Singbridge Holdings, secured a prime site in the heart of Yuzhong District in Chongqing, China to develop a landmark mixed development including a shopping mall and eight towers for residential, office, serviced residence and hotel use, with total gross floor area of about 817,000 square metres. The total development cost is expected to be RMB21.1 billion (about S$4.2 billion).
Ascott expanded in China with two contracts to manage its first serviced residence in Foshan, Ascott M-City Foshan, and its second property in Hong Kong SAR, Somerset Victoria Park Hongkong.
CapitaLand acquired two sites in Guangzhou’s Panyu District and Shanghai’s Pudong District in China for RMB530.0 million (approximately S$107.8 million). The two sites, totaling approximately 156,600 square metres, will be developed into more than 2,400 value homes.
CapitaLand Nang Yen Primary Hope School, CapitaLand’s first Hope School in Vietnam, welcomed 165 pupils to the newly refurbished school premises and upgraded facilities. The school is located in Phu Tho Province, 130 kilometres north of Hanoi, Vietnam.
DECEMBER CapitaLand divested a high-tech industrial building, Corporation Place, for S$99.0 million, of which CCL owned 75%.
Ascott secured a contract to manage the first international branded serviced residence in Wuhan’s city centre, Somerset Wusheng Wuhan.
Ascott Residence Trust acquired a 60% interest in Citadines Shinjuku Tokyo, a 160-unit freehold property in Shinjuku-ku, Tokyo, in Japan
CapitaMalls Asia opened Hongkou Plaza in Shanghai and CapitaMall Crystal in Beijing, China.
CapitaMalls Asia launched CAPITASTAR, a card-less rewards programme for shoppers across 12 participating CapitaMalls and over 1,800 stores in Singapore. CapitaMalls Asia donated more than S$500,000 worth of school necessities to nearly 19,000 underprivileged children in Singapore, China, Malaysia, Japan and India under its signature annual “My Schoolbag” corporate social responsibility (CSR) programme, with funding from CapitaLand Hope Foundation, the philanthropic arm of CapitaLand. The programme was extended to Malaysia, Japan and India for the first time.
SEPTEMBER CapitaLand unveiled the design for Sky Habitat by renowned international architect, Moshe Safdie. Located on a 11,997-square metre site in the heart of Bishan Central, one of Singapore‘s choice residential areas, the condominium will comprise 509 apartments across two 38-storey towers.
CapitaLand brought in Japan’s Shimizu Corporation to invest in a 10% stake in the CapitaLand-led consortium developing the Bishan Central condominium. CapitaLand will hold a 65% stake in the venture.
CapitaLand held the topping out ceremony for Raffles City Chengdu, the Group’s third Raffles City project in China, after Raffles City Shanghai and Raffles City Beijing.
Ascott opened its first Somerset brand of serviced residence in India, Somerset Greenways Chennai.
CapitaLand completed The Vista on schedule and progressively handed over the apartments to the homebuyers despite the challenging economic situation in Vietnam. The Vista is CapitaLand’s first residential project in Vietnam.
CapitaMalls Asia formed a 50:50 joint venture with Suzhou Industrial Park Jinji Lake Urban Development Co., to develop a prime site in Suzhou Centre into the largest shopping mall in Suzhou, for about RMB6.74 billion (S$1.33 billion), including land cost.
OCTOBER CapitaLand launched the Tianjin International Trade Centre. Located at the central business district in Tianjin, the project consists of three towers and podium buildings and is designed to be a new iconic landmark.
Ascott extended its footprint to Nusajaya in Malaysia and Muscat in Oman through securing contracts to manage Somerset Puteri Harbour Iskandar and Somerset Panorama Muscat. Ascott also opened its third Citadines serviced residence in Xi’an in China, Citadines Xingqing Palace Xi’an.
CapitaLand’s joint venture, StorHub, acquired an industrial property at Admiralty Rd, Singapore to be a StorHub facility, for S$16.4 million.
CapitaMalls Asia launched its secondary listing by introduction on the Main Board of the Hong Kong Stock Exchange (HKEx).
CapitaMalls Asia launched the inaugural Retail Global Connexion in Singapore to showcase successful retailers, attracting more than 1,000 participants, including more than 500 top international and regional retailers and local tertiary students.
NOVEMBER CapitaLand and CapitaMalls Asia launched Bedok Residences in Bedok Central. Comprising 583 units spread across eight 15-storey blocks, Bedok Residences is part of an integrated development, which includes a shopping mall with direct access to both the MRT and bus interchange. On launch day, more than 350 units of the 450 units released were sold. Within the first three days of its launch, over 80% of the total 583 units were sold, a testament to the strong appeal of its unique and attractive attributes.
Year In Brief
CapitaLand staff volunteers with the pupils from CapitaLand Nang Yen Primary Hope School at the newly furbished school premises
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Financial Calendar
FINANCIAL YEAR ENDED 31 DECEMBER 2011
Announcement of First Quarter Results 26 April 2011
Announcement of Second Quarter Results 4 August 2011
Announcement of Third Quarter Results 21 October 2011
Announcement of Full Year Results 14 February 2012
Annual General Meeting 30 April 2012
Books Closing (Record Date) 5.00 p.m. on 9 May 2012
Books Closure 10 May 2012
Proposed Payment of 2011 Final Dividend and Special Dividend 22 May 2012
FINANCIAL YEAR ENDING 31 DECEMBER 2012
Proposed Announcement of First Quarter Results April 2012
Proposed Announcement of Second Quarter Results August 2012
Proposed Announcement of Third Quarter Results October 2012
Proposed Announcement of Full Year Results February 2013
Corporate Directory
BOARD OF DIRECTORS Dr Hu Tsu Tau Chairman
Peter Seah Lim Huat Deputy Chairman
Liew Mun Leong President & CEO
Richard Edward Hale James Koh Cher Siang Arfat Pannir Selvam Prof Kenneth Stuart Courtis Dr Fu Yuning John Powell Morschel Ng Kee Choe Simon Claude Israel Euleen Goh Yiu Kiang
COMPANY SECRETARY Low Sai Choy
ASSISTANT COMPANY SECRETARY Ng Chooi Peng
BOARD COMMITTEES Audit Committee Richard Edward Hale (Chairman) James Koh Cher Siang Arfat Pannir Selvam Euleen Goh Yiu Kiang
Investment Committee Dr Hu Tsu Tau (Chairman) Liew Mun Leong Prof Kenneth Stuart Courtis John Powell Morschel Ng Kee Choe Simon Claude Israel Arthur Lang Tao Yih
Executive Resource and Compensation Committee Peter Seah Lim Huat (Chairman) Ng Kee Choe Simon Claude Israel
Nominating Committee Peter Seah Lim Huat (Chairman) Liew Mun Leong Arfat Pannir Selvam John Powell Morschel Ng Kee Choe Simon Claude Israel
Finance and Budget Committee Peter Seah Lim Huat (Chairman) Liew Mun Leong Prof Kenneth Stuart Courtis Ng Kee Choe Arthur Lang Tao Yih
Corporate Disclosure Committee James Koh Cher Siang (Chairman) Liew Mun Leong Arfat Pannir Selvam
Risk Committee James Koh Cher Siang (Chairman) Richard Edward Hale Arfat Pannir Selvam
REGISTERED ADDRESS 168 Robinson Road #30-01 Capital Tower Singapore 068912 Telephone: +65 6823 3200 Facsimile: +65 6820 2202
SHARE REGISTRAR M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore 068906 Telephone: +65 6227 6660 Facsimile: +65 6225 1452
AUDITORS KPMG LLP 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 Telephone: +65 6213 3388 Facsimile: +65 6225 4142 (Engagement Partner since financial year ended 31 December 2010: Leong Kok Keong)
PRINCIPAL BANKERS • Australia and New Zealand
Banking Group Limited • Bank of China • BNP Paribas • CIMB Bank Berhad • Commonwealth Bank of Australia • Credit Agricole Corporate and
Investment Bank • DBS Bank Ltd • Deutsche Bank AG • Industrial and Commercial Bank
of China Limited • Malayan Banking Berhad • Mizuho Corporate Bank, Ltd. • Oversea-Chinese Banking
Corporation Limited • Standard Chartered Bank • Sumitomo Mitsui Banking
Corporation • The Bank of Tokyo–Mitsubishi
UFJ, Ltd • The Hongkong and Shanghai
Banking Corporation Limited • United Overseas Bank Limited • Westpac Banking Corporation
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1 DR HU TSU TAU CHAIRMAN
2 PETER SEAH LIM HUAT DEPUTY CHAIRMAN
3 LIEW MUN LEONG PRESIDENT & CEO
4 RICHARD EDWARD HALE DIRECTOR
5 JAMES KOH CHER SIANG DIRECTOR
6 ARFAT PANNIR SELVAM DIRECTOR
7 PROFESSOR KENNETH STUART COURTIS DIRECTOR
8 DR FU YUNING DIRECTOR
9 JOHN POWELL MORSCHEL DIRECTOR
10 NG KEE CHOE DIRECTOR
11 SIMON CLAUDE ISRAEL DIRECTOR
12 EULEEN GOH YIU KIANG DIRECTOR
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Mr Liew is Deputy Chairman of The Ascott Limited as well as Deputy Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST), CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX-ST), CapitaRetail China Trust Management Limited (the manager of CapitaRetail China Trust listed on the SGX-ST) and Ascott Residence Trust Management Limited (the manager of Ascott Residence Trust listed on the SGX-ST). He is also a Director of CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm. Mr Liew is presently Chairman of Changi Airport Group (Singapore) Pte Ltd and China Club Investment Pte Ltd. He is also a Director and a member of the Audit Committee of Singapore Exchange Limited (listed on the SGX-ST), a Director of Surbana Corporation Pte. Ltd., Singapore-China Foundation Ltd and LFIE Holding Limited.
He is a member of the NUS Business School Management Advisory Board, National Productivity and Continuing Education Council, Governing Council of the Human Capital Leadership Institute, Centre for Liveable Cities and the Board of Trustees of Chinese Development Assistance Council.
Mr Liew has spent 22 years in the public sector and another 20 years in the private sector in various leadership positions.
In 2011, Mr Liew was named Best CEO in Singapore by FinanceAsia. In 2008, he was named Asia’s Best Executive of 2008 (Singapore) by Asiamoney and Best CEO in Asia (Property) by Institutional Investor. In 2007, he was conferred the CEO of the Year award (for firms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2006, he was named Outstanding CEO of the Year in the Singapore Business Awards.
Mr Liew was conferred the Meritorious Service Medal at the Singapore National Day Awards 2011.
Mr Liew is a graduate of the University of Singapore with a Degree in Civil Engineering and is a registered professional civil engineer.
RICHARD EDWARD HALE
DIRECTOR
Mr Richard Hale, an Independent Non-Executive Director, joined the CapitaLand Board on 10 February 2003 and was last re-appointed as Director at CapitaLand’s Annual General Meeting on 25 April 2011. He is also Chairman of CapitaLand’s Audit Committee (AC) and a Member of CapitaLand’s Risk Committee (RC).
Mr Hale is presently Chairman of CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX-ST). He is also Deputy Chairman of Sembcorp Marine Ltd (listed on the SGX-ST). He is a Fellow of the Singapore Institute of Directors.
Mr Hale started his career with The Hongkong and Shanghai Banking Corporation Ltd in October 1958 and served in London, Paris, Hong Kong, Germany, Malaysia, Japan and Singapore before retiring from the Bank as CEO Singapore and Director in March 1995. From July 1995 to September 1997, he acted as advisor on environmental matters for HSBC Holdings plc London, based in Singapore. Mr Hale was Executive Chairman of SNP Corporation Ltd from April 1999 to April 2000, and also served as Chairman of the Singapore International Chamber of Commerce for 1993 and 1994. He was formerly a Governor of United World College of South East Asia, Singapore and a Director of The Ascott Group Limited (formerly listed on the SGX-ST and now known as The Ascott Limited), Wheelock Properties (Singapore) Limited and Sembcorp Industries Ltd (both listed on the SGX-ST) and BW Trust Management Pte Ltd.
Mr Hale was educated at Radley College, Abingdon, UK. He is a Fellow of the Chartered Institute of Bankers, London.
Mr Hale will be retiring as Director as from the Annual General Meeting on 30 April 2012 and will not be seeking re-appointment pursuant to Section 153(6) of the Companies Act, Cap. 50. Mr Hale will upon retirement cease to serve as Chairman and a Member of the AC and a Member of the RC.
Board of Directors
DR HU TSU TAU
CHAIRMAN
Dr Hu Tsu Tau, an Independent Non-Executive Director, joined the CapitaLand Board on 13 April 2004 and was elected Chairman on the same day. He was last re-appointed as Director at CapitaLand’s Annual General Meeting on 25 April 2011. He is also Chairman of CapitaLand’s Investment Committee (IC).
Dr Hu is presently a Member of the Board of the Government of Singapore Investment Corporation Pte Ltd (GIC). He was previously Chairman of Fullerton Financial Holdings Pte Ltd and GIC Real Estate Pte Ltd.
From 1985 to 2001, Dr Hu was a Singapore Cabinet Minister whose portfolio included the Trade and Industry, Health and Finance ministries. Prior to his ministerial appointment, Dr Hu was Managing Director of the Monetary Authority of Singapore (MAS) and GIC from 1983 to 1984. Before his appointments in MAS and GIC, he was with the Shell Group of companies from 1960, and his last position in this global company was as Chairman and Chief Executive of the Shell Group of companies in Singapore.
Dr Hu is a graduate of the University of California, USA with a Bachelor of Science in Chemistry. He also holds a Postgraduate Diploma (Chemical Engineering) and a Doctorate in Chemical Engineering, both from the University of Birmingham, UK.
Dr Hu will be retiring as Director from the Annual General Meeting on 30 April 2012 and will not be seeking re-appointment pursuant to Section 153(6) of the Companies Act, Cap. 50. Dr Hu will upon retirement cease to serve as Chairman of the Board and Chairman and a Member of the IC.
PETER SEAH LIM HUAT
DEPUTY CHAIRMAN
Mr Peter Seah, an Independent Non-Executive Director, joined the CapitaLand Board on 18 December 2001 and was appointed as Deputy Chairman on 1 January 2009. Mr Seah was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He is also Chairman of CapitaLand’s Finance and Budget Committee, Executive Resource and Compensation Committee and Nominating Committee.
Mr Seah is presently Chairman of DBS Group Holdings Ltd, Singapore Technologies Engineering Ltd (both listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”)), LaSalle College of the Arts Limited and Singapore Health Services Pte Ltd. Mr Seah is a Director of STATS ChipPAC Ltd, StarHub Ltd (both listed on the SGX-ST) and Level 3 Communications Inc (listed on NASDAQ). Mr Seah also sits on the Board of the Government of Singapore Investment Corporation Pte Ltd and Defence Science Technology Agency.
From 2001 to 2004, Mr Seah was President & CEO of Singapore Technologies Pte Ltd. Prior to the above appointment, Mr Seah was with Overseas Union Bank (OUB) from 1977 and became its President & CEO in 1991. Mr Seah retired as Vice Chairman and CEO from OUB on 30 September 2001. Mr Seah was also Chairman of SembCorp Industries Ltd and Singapore Computer Systems Limited (both listed on the SGX-ST), President Commissioner of PT Indosat Tbk (listed on the Stock Exchange of Indonesia), Deputy Chairman of Global Crossing Limited (listed on the New York Stock Exchange), Director of Chartered Semiconductor Manufacturing Ltd (listed on the SGX-ST), Siam Commercial Bank Public Company Limited (listed on the Stock Exchange of Thailand), Alliance Bank Malaysia Berhad (listed on Bursa Malaysia) and Bank of China Limited (listed on Hong Kong and Shanghai Stock Exchanges).
Mr Seah is a graduate of the University of Singapore with an Honours Degree in Business Administration.
LIEW MUN LEONG
PRESIDENT & CEO
Mr Liew Mun Leong is President & CEO of CapitaLand Group. He joined the Board of Pidemco Land as Director on 1 January 1997. Pidemco Land merged with DBS Land to form CapitaLand in November 2000. Mr Liew continued to serve on the CapitaLand Board and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He also serves as Member of CapitaLand’s Investment Committee, Nominating Committee, Corporate Disclosure Committee and Finance and Budget Committee.
Mr Liew is Chairman of CapitaMalls Asia Limited (listed on the SGX-ST and Hong Kong Stock Exchange), CapitaLand Residential Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand Commercial Limited, CapitaLand Financial Limited, CapitaValue Homes Limited and CapitaLand ILEC Pte. Ltd..
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PROFESSOR KENNETH STUART COURTIS
DIRECTOR
Prof Kenneth Courtis, an Independent Non-Executive Director, joined the CapitaLand Board on 14 February 2007 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is a Member of CapitaLand’s Finance and Budget Committee and Investment Committee.
Prof Courtis is Founding Chairman of Next Capital Partners. He is presently a Director of Noble Group Limited (listed on the SGX-ST). He was formerly Managing Director and Vice Chairman of Goldman Sachs Asia; Managing Director, Chief Economist and Strategist of Deutsche Bank Group Asia and Director of CNOOC Ltd, Hong Kong.
Prof Courtis is one of the world’s leading investment bankers and analysts of Asian economies. He has led a number of large, international corporate transactions centered on Asia, and pioneered a number of investment banking specialities across the region. Widely sought after for his knowledge of how global market forces, financial and political developments and corporate strategy interact, Prof Courtis advises major clients throughout the Asia Pacific region as well as in Europe and North America.
Prof Courtis also works closely with central banks, ministries of finance, and heads of government throughout Asia, and has been called on several occasions to advise the President of the USA, and the heads of government of several countries in Europe, North America, Asia, and the Middle East.
Prof Courtis has lectured at Keio and Tokyo Universities, Japan’s two most prestigious educational institutions; l’Institut d’Etudes Politiques, Paris; and in universities in North America. He is a member of the boards, advisory councils, and trustee of a number of international firms, universities, and research institutes in Asia, Europe and North America.
Prof Courtis received his Bachelor degree from Glendon College in Toronto and a Master in International Relations from Sussex University in the UK. He received a Master of Business Administration from INSEAD (the European Institute of Business Administration), and a Doctorate with honours and high distinction, from l’Institut d’Etudes Politiques, Paris.
DR FU YUNING
DIRECTOR
Dr Fu Yuning, an Independent Non-Executive Director, joined the CapitaLand Board on 27 July 2009 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010.
Dr Fu is presently the Chairman of China Merchants Group Limited, China Merchants Holdings (International) (listed on the Hong Kong Stock Exchange), and China Merchants Bank Company Limited (listed on both the Hong Kong and Shanghai Stock Exchanges). Dr Fu is also an Independent Non-Executive Director of Li & Fung Limited (listed on the Hong Kong Stock Exchange). He was a Director of CapitaMalls Asia Limited (listed on the SGX-ST and Hong Kong Stock Exchange).
Dr Fu also holds directorship in some public associations such as General Committee Member of the Hong Kong General Chamber of Commerce.
Dr Fu graduated from Dalian Institute of Technology in China with a degree in Port and Waterway Engineering and obtained his Ph.D. Degree in Mechanical Engineering from Brunel University in the UK, where he also worked as a Post-Doctorate research fellow briefly afterwards.
Dr Fu will be retiring by rotation pursuant to Article 95 of CapitaLand’s Articles of Association at the Annual General Meeting on 30 April 2012 and will not be seeking re-election.
JAMES KOH CHER SIANG
DIRECTOR
Mr James Koh, an Independent Non-Executive Director, joined the CapitaLand Board on 1 July 2005 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 25 April 2011. He is Chairman of CapitaLand’s Risk Committee and Corporate Disclosure Committee; and a Member of CapitaLand’s Audit Committee.
Mr Koh is Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST) and Chairman of its Investment Committee and Corporate Disclosure Committee. He is also a Director of CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm.
Mr Koh is presently Chairman of Housing & Development Board, Singapore Deposit Insurance Corporation Limited, MechanoBiology Institute and Singapore Island Country Club. He sits on the Boards of UOL Group Limited and Pan Pacific Hotels Group Limited (both listed on the SGX-ST). He is also a Director of Singapore Cooperation Enterprise and Thye Hua Kwan Moral Charities Limited.
From 1997 to 2005, Mr Koh served as CEO of the Inland Revenue Authority of Singapore. In that capacity, he was both Commissioner of Inland Revenue and Commissioner of Charities. Prior to these appointments, Mr Koh was the Permanent Secretary in the Ministries of National Development, Community Development and Education. Mr Koh has substantial experience in public administration having served in the Ministries of Finance, National Development, Community Development, Education and the Prime Minister’s Office. He was awarded the Public Administration Medal (Gold) in 1983 and the Meritorious Service Medal in 2002. Mr Koh was a Director of Singapore Airlines Limited (listed on the SGX-ST).
Mr Koh is a graduate of Oxford University, UK with a Bachelor of Arts (Honours) and a Master of Arts in Philosophy, Political Science and Economics. He also holds a Master in Public Administration from Harvard University, USA.
ARFAT PANNIR SELVAM
DIRECTOR
Mrs Arfat Selvam, an Independent Non-Executive Director, joined the CapitaLand Board on 2 January 2006 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 25 April 2011. She is a Member of CapitaLand’s Audit Committee, Corporate Disclosure Committee, Nominating Committee and Risk Committee.
Mrs Selvam is presently the Managing Director of Selvam LLC, a corporate finance law practice and its joint law venture, Duane Morris & Selvam LLP. With over 40 years in legal practice as a corporate finance lawyer, Mrs Selvam has been involved in some landmark Singapore M&A transactions.
Mrs Selvam was the President of the Law Society of Singapore in 2003. She was also a member of the Senate of the Academy of Law, the Board of Legal Education and the Board of the Accounting and Corporate Regulatory Authority (ACRA). She is a Fellow of the Singapore Institute of Directors. She is also a Director of CapitaMalls Asia Limited (listed on the SGX-ST and Hong Kong Stock Exchange) and Singapore Health Services Pte Ltd.
Mrs Selvam serves the community through her participation as President of the Muslim Financial Planning Association, member of the Executive Committee of Breast Cancer Foundation and member of the Board of Trustees of Rahmatan Lil’Alamin Foundation Ltd. She is also Chairman of the Law Society of Singapore Pro Bono, Management Committee.
Mrs Selvam is a graduate of the University of Singapore and was admitted to practise as an Advocate & Solicitor of the Supreme Court of Singapore in 1969.
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SIMON CLAUDE ISRAEL
DIRECTOR
Mr Simon Claude Israel, a Non-Independent Non- Executive Director, joined the CapitaLand Board on 1 July 2010. He is a Member of CapitaLand’s Investment Committee, Executive Resource and Compensation Committee and Nominating Committee.
Mr Israel is presently Chairman of Singapore Telecommunications Limited, Asia Pacific Breweries Limited (both listed on the SGX-ST), Asia Pacific Breweries Foundation and SingTel Innov8 Pte Ltd. He is also a Director of SingTel Innov8 Holdings Pte Ltd and a Member of the Governing Board of Lee Kuan Yew School of Public Policy.
Mr Israel retired as Executive Director of Temasek Holdings (Private) Limited, the Singapore-headquartered investment firm, on 1 July 2011. Prior to this, he was Chairman, Asia Pacific, of the Danone Group, and also worked across the Asia Pacific region in a 22-year career with Sara Lee Corporation. He stepped down as Chairman of the Singapore Tourism Board on 31 December 2010, and was a former Director of Fraser and Neave Limited and Neptune Orient Lines Limited (both listed on the SGX-ST). Mr Israel holds a Diploma in Business Studies from The University of the South Pacific.
EULEEN GOH YIU KIANG
DIRECTOR
Ms Euleen Goh Yiu Kiang, an Independent Non-Executive Director, joined the CapitaLand Board on 1 October 2011. She is currently a Member of CapitaLand’s Audit Committee (AC).
Ms Goh is presently Chairman of the Singapore International Foundation, Northlight School and Singapore Chinese Girls’ School. She is a Director of Singapore Airlines Limited, Singapore Exchange Limited, DBS Group Holdings Ltd (all listed on the SGX-ST), Aviva plc (listed on the London Stock Exchange) and DBS Bank Ltd. She is also member of the Management Advisory Board of NUS Business School, and Adviser to the Singapore Institute of International Affairs.
Ms Goh had previously served as Chairman of International Enterprise Singapore, Accounting Standards Council and Financial Industry Competency Standards Committee and Deputy Chairman of CapitaLand Financial Limited. She was a Director of MediaCorp Pte Ltd and MOH Holdings Pte Ltd, and a Council Member of the Institute of Banking & Finance. Ms Goh held various senior management positions in Standard Chartered Bank, retiring in March 2006 after some 21 years with the Bank. She was CEO of Standard Chartered Bank, Singapore from 2001 until March 2006.
Ms Goh was named as Her World Woman of the Year 2005. For her contributions to the Financial Services sector, she was awarded a Public Service Medal by the President of Singapore in the same year.
Ms Goh is a Chartered Accountant with professional qualifications in banking and taxation.
Ms Goh will be appointed as Chairman of AC and a Member of Risk Committee on 30 April 2012.
JOHN POWELL MORSCHEL
DIRECTOR
Mr John Morschel, an Independent Non-Executive Director, joined the CapitaLand Board on 1 February 2010 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He is also a Member of CapitaLand’s Nominating Committee and Investment Committee. Mr Morschel is presently Chairman of Australia and New Zealand Banking Group Limited (listed on the Australian Securities Exchange and New Zealand Stock Exchange) and a Director of Tenix Group Pty Ltd and Gifford Communications Pty Ltd. Prior to his present appointment, he was an Executive Director and then Managing Director and CEO of Lend Lease Group LLC (listed on the Australian Securities Exchange). Mr Morschel was Chairman of Comalco Ltd, CSR Limited, Leighton Holdings Limited and Rinker Group Limited. He was also a Director of Singapore Telecommunications Limited (listed on the SGX-ST), Westpac Banking Corporation (listed on the Australian Securities Exchange), Cable & Wireless Optus Ltd, Gifford Communications Ltd, Rio Tinto plc (listed on the London Stock Exchange) and Rio Tinto Limited (listed on the Australian Securities Exchange).
Mr Morschel holds a Diploma in Quantity Surveying from The University of New South Wales. He is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Institute of Management.
NG KEE CHOE
DIRECTOR
Mr Ng Kee Choe, an Independent Non-Executive Director, joined the CapitaLand Board on 16 April 2010. He is currently a Member of CapitaLand’s Executive Resource and Compensation Committee, Investment Committee (IC), Nominating Committee and Finance and Budget Committee.
Mr Ng is presently Chairman of Singapore Power Limited (until 30 June 2012), SP AusNet (listed on both SGX-ST and Australian Securities Exchange), NTUC Income Insurance Co-Operative Limited and Tanah Merah Country Club and President-Commissioner of PT Bank Danamon Indonesia Tbk (listed on the Indonesia Stock Exchange). Mr Ng is a member of Temasek Advisory Panel and International Advisory Council of China Development Bank. In addition, he is also a Director of Singapore Exchange Limited and Singapore Airport Terminal Services Limited (both listed on the SGX-ST) and Fullerton Financial Holdings Pte Ltd.
Mr Ng was Vice-Chairman of DBS Group Holdings Ltd (“DBS”). He retired from his executive position in July 2003 after 33 years of service with DBS. For his contributions to public service, Mr Ng was awarded the Public Service Star in 2001.
Mr Ng is a graduate of the University of Singapore with a Bachelor of Science (Honours) Degree.
Mr Ng will serve as Chairman of the CapitaLand Board and Chairman of the IC on 1 May 2012.
Board of Directors
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The Board has adopted a set of internal controls which sets out approval limits for capital expenditure, investments and divestments, bank borrowings and signature of cheques at Board level. Approval sublimits are also provided at Management levels to facilitate operational efficiency.
The IC is chaired by Dr Hu Tsu Tau and comprises Mr Liew Mun Leong, Prof Kenneth Stuart Courtis, Mr John Powell Morschel (appointed on 1 June 2011), Mr Ng Kee Choe (appointed on 1 December 2011), Mr Simon Claude Israel and Mr Arthur Lang Tao Yih, the Group Chief Financial Officer (“Group CFO”) (appointed on 1 August 2011). The IC has been delegated the authority by the Board to approve the Group’s investments and divestments, participation in tenders and bids and acceptance of credit facilities from financial institutions and banks. Since 2000, the Board had approved the delegation of some of its authority to the Boards and Management Committees of its various strategic business units (“SBU”) within strict limits. Apart from convening six meetings of the IC in 2011, the views of the IC and Board were actively sought by the SBUs, and the approval of the IC was obtained where required.
Changes to regulations and accounting standards are monitored closely by Management. Where regulatory changes have an important bearing on CapitaLand’s or directors’ disclosure obligations, directors are briefed during Board meetings or at specially-convened sessions conducted by professionals.
Newly appointed directors are given briefings by Management on the business activities of the Group and its strategic directions. Upon appointment, each director is briefed and provided with a formal letter setting out the director’s duties and obligations. Directors are expected to exercise independent judgement in the best interests of CapitaLand. Directors are also briefed and provided with relevant information on CapitaLand’s policies and procedures relating to corporate conduct and governance including disclosure of interests in securities, prohibitions on dealings in CapitaLand’s securities, restrictions on disclosure of price sensitive information and the disclosure of interests relating to certain property transactions.
The directors are provided with opportunities for continuing education in areas such as directors’ duties and responsibilities, corporate governance, changes in financial reporting standards, insider trading, changes in the Companies Act, the listing rules and the Code of Corporate Governance, and industry-related matters, so as to update them on matters that affect or may enhance their performance as Board or Board Committee members. Principle 2: Board Composition and Guidance The Board comprises 12 directors with 11 non-executive directors.
The non-executive Chairman Dr Hu Tsu Tau brings with him a wealth of experience both in the Singapore Government (as a former Cabinet Minister) and in a major global company (as previous Chairman and Chief Executive of the Shell Group of companies in Singapore). The sole executive director is Mr Liew Mun Leong, who is also the President & Chief Executive Officer (“CEO”).
The directors are business leaders and professionals with governmental, public service, financial, banking, tax, property, economics, transportation and related infrastructure, legal, investment and accounting backgrounds. Profiles of the directors are provided on pages 36 to 43 of this Report.
This composition of the Board enables Management to benefit from their external, diverse and objective perspective on issues brought before the Board. It also enables the Board to interact and work with Management through a robust exchange of ideas and views to help shape the strategic process. This, together with a clear separation of the role of the Chairman and the CEO, provides a healthy professional relationship between the Board and Management with clarity of roles and facilitates robust deliberations on the business activities of the Group.
Corporate Governance
CapitaLand observes high standards of corporate conduct in line with the Principles of the Code of Corporate Governance 2005 (the “Code”). We believe that each company needs to develop and maintain sound and transparent policies and practices to meet its specific business needs and to provide a solid foundation for a trusted and respected business enterprise. We remain focused on the substance and spirit of the Principles of the Code while achieving operational excellence and delivering the Group’s long-term strategic objectives.
This Report on our corporate governance practices for financial year 2011 (“Report”) describes our application of good governance principles in building a company committed to integrity, excellence and its people. The application is underpinned by sound and robust systems of internal controls and accountability, which help to promote and drive long-term sustainable growth and shareholder value.
The following sections covering each of the Principles outline our policies and practices.
(A) BOARD MATTERS Principle 1: Board’s Conduct of Affairs CapitaLand is led by an effective Board comprising a majority of independent non-executive directors. Each director brings to the Board his skills, experience, insights and sound judgement, which together with strategic networking relationships, serve to further the interests of the Group. At all times, the directors are collectively and individually obliged to act in good faith and consider the best interests of CapitaLand.
The key roles of our Board are to: • guide the corporate strategy and directions of the Group; • ensure that Senior Management discharges business
leadership and the highest quality of management skills with integrity and enterprise; and
• oversee the proper conduct of the Group’s business.
To assist the Board in the discharge of its oversight functions, various Board Committees, namely Audit Committee (“AC”), Corporate Disclosure Committee (“CDC”), Executive Resource and Compensation Committee (“ERCC”), Finance and Budget Committee (“FBC”), Investment Committee (“IC”), Nominating Committee (“NC”) and Risk Committee (“RC”) have been constituted with clear written Terms of Reference. Other Board Committees may be formed as dictated by business imperatives.
Membership of the various Board Committees is carefully managed to ensure an equitable distribution of responsibility among Board members, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are considered. CapitaLand has also taken steps to ensure that there are appropriate checks and balances in the compositions of the various Board Committees. For instance, membership of the FBC and IC which are involved in key business or executive decisions and membership of the AC with its supervisory role are mutually exclusive.
The Board meets regularly to review the key activities and business strategies of the Group, at least once every quarter, and as required by business imperatives. The Board deliberates strategic policies of the Group, including significant acquisitions and divestments, approving the annual budget, reviewing the performance of the Group’s businesses, and approving the release of the quarterly and full-year results. The AC is delegated the authority by the Board to review such results.
A total of four Board meetings was held in 2011.
A table of the Board members’ participation in the various Board Committees is set out on page 54 of this Report. This reflects each Board member’s additional responsibilities and special focus in the respective Board Committees.
A table showing the attendance record of directors at Board and Board Committee meetings during the year is set out on page 55 of this Report. We believe in the manifest contribution of our directors beyond attendance at formal Board and Board Committee meetings. CapitaLand’s directors are all professionals with diverse experience able to provide effective guidance on the strategic direction of the Group’s businesses. To judge a director’s contribution based on his attendance at formal meetings alone would not do justice to his overall contribution, which includes being accessible to Management for guidance or exchange of views outside the formal environment of Board meetings.
Report for the period from 1 January 2011 to 31 December 2011
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The NC sources for candidates for appointment on the Boards of the Group, in particular, candidates who would be able to value add to Management through their contributions of their skills, knowledge and experiences in the relevant strategic business areas.
CapitaLand’s Articles of Association require one-third of its directors to retire and subject themselves to re-election (“one-third rotation rule”) by shareholders at every Annual General Meeting (“AGM”). In other words, no director stays in office for more than three years without being re-elected by shareholders.
The President & CEO, as a Board member, is also subject to the one-third rotation rule. This separates his role as President & CEO from his position as a Board member, and enables shareholders to exercise their right to select all Board members.
In addition, a new director appointed by the Board will submit himself for retirement and re-election at the AGM immediately following his appointment. Thereafter, he is subject to the one-third rotation rule.
Directors who are above the age of 70 are also statutorily required to seek re-appointment at each AGM.
CapitaLand has adopted a policy that non-executive directors serve a maximum of two three-year terms and thereafter by exception on the recommendation of the NC. The NC ensures that although some of our directors sit on the boards of various companies, they devote sufficient time and attention to the affairs of CapitaLand.
Principle 5: Board Performance We believe that Board performance is ultimately reflected in the long-term performance of the Group.
The financial indicators, set out in the Code as guides for the evaluation of the Board and its directors, are in our opinion more of a measurement of Management’s performance and therefore less applicable to directors. In any case, such financial indicators provide a snapshot of a company’s performance, and do not fully measure the sustainable long-term wealth and value creation of CapitaLand.
A more important consideration is that the Board, through the NC, has ensured from the outset the requisite blend of background, experience and knowledge in technology, business, finance and management skills critical to the Group’s businesses. It has from the outset ensured that each director with his special contribution brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.
An evaluation of the Board and Board Committees involving the directors and the Senior Management was conducted by an independent external consultant during the year. The NC has examined the findings and made proposals which the Board has accepted.
Renewal or replacement of Board members do not necessarily reflect their contributions to date, but may be driven by the need to position and shape the Board in line with the medium term needs of CapitaLand and its business.
Principle 6: Access to Information We believe that the Board should be provided with timely and complete information prior to Board meetings, and as and when the need arises. As a general rule, Board papers are sent to Board members at least seven days before the Board meeting so that the members may better understand the matters prior to the Board meeting and discussion may be focused on questions that the members may have. However, sensitive matters may be tabled at the meeting itself or discussed without any papers being distributed. New Board members are fully briefed on the businesses of the Group.
Management provides adequate and timely information to the Board on Board affairs and issues requiring the Board’s decision. It also provides ongoing reports relating to operational and financial performance of CapitaLand, such as monthly management financial reports. The Articles of Association of CapitaLand provide for directors to convene meetings by teleconferencing or videoconferencing. Where a physical Board meeting is not possible, timely communication with members of the Board is effected through electronic means which include electronic mail, teleconferencing and videoconferencing. Alternatively, Management will brief directors in advance before seeking the Board’s approval.
The Board has established the NC which makes recommendations to the Board on all Board appointments and determines a director’s independence. The NC has determined that 10 of the 11 non-executive directors on the Board were independent in the financial year 2011.
Although Mr Peter Seah Lim Huat and Ms Euleen Goh Yiu Kiang are respectively the non-executive Chairman and non-executive director of DBS Group Holdings Ltd and DBS Bank Ltd which have rendered banking and financial services to CapitaLand and/or its group companies in fees exceeding S$200,000 in the financial year 2011, the NC considers Mr Seah and Ms Goh as independent directors notwithstanding their relationships with CapitaLand in respect of Guidance Note 2.1(d) of the Code as they are able to exercise strong independent judgement in their deliberations in the interests of CapitaLand.
Although Mr John Powell Morschel is the non-executive Chairman and non-executive director of Australia and New Zealand Banking Group Limited which has rendered banking and financial services to CapitaLand and/or its group companies in fees exceeding S$200,000 in the financial year 2011, the NC considers Mr Morschel as an independent director notwithstanding his relationship with CapitaLand in respect of Guidance Note 2.1(d) of the Code as he is able to exercise strong independent judgement in his deliberation in the interests of CapitaLand.
Principle 3: Chairman and Chief Executive Officer To maintain effective supervision and accountability at each of the Board and Management levels, the positions of Chairman and CEO are held by separate individuals.
The non-executive Chairman, Dr Hu Tsu Tau, is responsible for the Board and acts independently in the best interests of CapitaLand and its shareholders, while the President & CEO, Mr Liew Mun Leong, is responsible for the running of the Group’s businesses.
The Chairman ensures that the members of the Board and Management work together with integrity, competency and moral authority, and that the Board constructively engages Management on strategy, business operations, enterprise risk and other plans.
The President & CEO is a Board member and has full executive responsibilities over the business directions and operational decisions of the Group. The President & CEO, in consultation with the Chairman, schedules Board meetings and finalises the preparation of the Board meeting agenda. He ensures the quality and timeliness of the flow of information between Management and the Board. He is also responsible for ensuring that CapitaLand complies with corporate governance guidelines.
Principle 4: Board Membership Board renewal is a continual process, for good governance and to maintain relevance to the changing needs of the Group’s businesses. The President & CEO, as a Board member, is also subject to retirement and re-election by shareholders as part of Board renewal. Election of Board members is the prerogative and right of shareholders.
The NC is chaired by Mr Peter Seah Lim Huat and comprises Mr Liew Mun Leong, Mrs Arfat Pannir Selvam, Mr John Powell Morschel, Mr Ng Kee Choe (appointed on 1 December 2011) and Mr Simon Claude Israel.
The majority of the NC members, including the Chairman, are independent non-executive directors.
The NC ensures that the Board and Board Committees in the Group comprise individuals who are best able to discharge their responsibilities as directors having regard to the law and the highest standards of corporate governance. In performing its role, the NC is guided by its Terms of Reference which sets out its responsibilities. In particular, the NC will: • review and recommend candidates to be CapitaLand’s
nominees on the Board and Board Committees of listed companies within the Group;
• review and recommend candidates to the Board and Board Committees of holding companies of the SBUs; and
• review CapitaLand’s corporate governance practices at least once a year, having regard to relevant local and international developments in the area of corporate governance (including changes in applicable law, regulations and listing rules), and recommend changes to the Board.
Corporate Governance Report for the period from 1 January 2011 to 31 December 2011
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Non-executive directors have remuneration packages consisting of directors’ fees and attendance fees. The directors’ fee policy is based on a scale of fees divided into basic retainer fees as director and additional fees for attendance and serving on Board Committees. Non-executive directors who served on the Board during 2011 will be remunerated about 70% of his total directors’ fees in cash and about 30% of his total directors’ fees in the form of shares in CapitaLand. The number of shares to be awarded will be determined by reference to the volume-weighted average price of a share on the Singapore Exchange Securities Trading Limited (“SGX-ST”) over the 14 trading days immediately following the date of the AGM, rounded down to nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Directors who are retiring or retired from the Board during 2011 will receive all of their directors’ fees in cash. However, in order to encourage the alignment of interests of the non-executive directors with the interests of shareholders, a non-executive director is required to hold shares in CapitaLand which are received from CapitaLand in payment of his director’s fee, worth up to one-time his annual basic retainer fee at all times during his board tenure. Details of the directors’ remuneration are provided in the Other Information section of this Report (“Other Information”) on pages 136 to 139. Directors’ fees in aggregate for non-executive directors are subject to the approval of shareholders at the AGM.
The President & CEO as executive director does not receive director’s fees. He is the lead member of Management. His compensation consists of his salary, allowances, bonuses and contingent share awards. The latter is conditional upon him and CapitaLand meeting certain performance targets. The details of his compensation package are provided in the Other Information on pages 136 to 139. Key executives’ compensations consist of salary, allowances, bonuses and contingent share awards. The latter is conditional upon them and CapitaLand meeting certain performance targets. A significant proportion of executives’ remuneration is linked to
company and individual performance in the form of share based and Economic Value Added based compensation. The Code requires a company to disclose the names of at least the top five key executives of the company. CapitaLand considers members of the Office of the President (“OPM”) as its key executives. Currently, apart from the President & CEO who is the executive director, the other five members of the OPM are CapitaLand Chief Operating Officer Mr Lim Ming Yan, CapitaLand Chief Corporate Officer Ms Jennie Chua Kheng Yeng, CapitaLand Financial Limited CEO Mr Wen Khai Meng, CapitaLand Chief Investment Officer Mr Olivier Lim Tse Ghow and CapitaLand Group CFO Mr Arthur Lang Tao Yih (appointed to the OPM on 1 November 2011). Their remuneration in bands of S$250,000 are provided in the Other Information on page 139.
No employee of CapitaLand and its subsidiaries is an immediate family member of a director or the President & CEO and whose remuneration exceeded S$150,000 during the financial year 2011. “Immediate family member” means the spouse, child, adopted child, step-child, sibling and parent.
A separate remuneration report is not prepared as most of the information is found in the Other Information on pages 136 to 139.
Details of the employee share schemes are given in the Share Plans section of the Directors’ Report on pages 145 to 151.
(C) ACCOUNTABILITY AND AUDIT Principle 10: Accountability CapitaLand believes in conducting itself in ways that deliver maximum sustainable value to its shareholders. CapitaLand promotes best practices as a means to build an excellent business for its shareholders and is accountable to shareholders for its performance.
At CapitaLand, the separation of the roles of the Chairman and the President & CEO, and the holding of such appointments by separate individuals, ensure effective supervision of Management and maintenance of accountability of the Board to the shareholders, and of Management to the Board.
The Board has access to Senior Management and the Company Secretary at all times. The Company Secretary attends to corporate secretarial administration matters and is the corporate governance advisor on corporate matters to the Board and Senior Management. The Company Secretary attends Board meetings. The appointment and removal of the Company Secretary are subject to the approval of the Board. The Board also has access to independent professional advice where appropriate.
Board meetings for each year are scheduled in advance in the preceding two years to facilitate directors’ individual administrative arrangements in respect of competing commitments.
The AC also meets the external and internal auditors separately at least once a year, without the presence of the President & CEO and the Senior Management, in order to have unfettered access to information that it may require.
(B) REMUNERATION MATTERS Principle 7: Procedures for Developing
Remuneration Policies Principle 8: Level and Mix of Remuneration Principle 9: Disclosure on Remuneration We believe that a framework of remuneration for the Board and key executives should not be taken in isolation. It should be linked to the building of management bench strength and the development of key executives. This is to ensure continual development of talent and renewal of strong and sound leadership for a sustainable business and a lasting company. CapitaLand’s ERCC plays a crucial role in helping to ensure that we are able to attract, recruit and retain the best talents to drive the Group’s businesses forward.
The ERCC is chaired by Mr Peter Seah Lim Huat and comprises Mr Ng Kee Choe and Mr Simon Claude Israel.
The majority of the ERCC members, including the Chairman, are independent non-executive directors. Outside members may be co-opted into the ERCC to provide a global perspective of talent management and remuneration practices.
The ERCC oversees executive compensation and development in CapitaLand. The ERCC is guided by its Terms of Reference. Specifically, the ERCC will: • approve the remuneration framework for
CapitaLand Group; • approve the remuneration framework for
non-executive directors; • establish compensation policies for key executives; • approve salary reviews, bonus and incentives for
key executives; • approve share incentives and share ownership
for executives; • approve key appointments and review succession
plans for key positions; and • oversee the development of key executives and
younger talented executives.
The aim of the ERCC is to build capable and committed management teams, through competitive compensation, focused management, and progressive policies which can attract, motivate and retain a pool of talented executives to meet the current and future growth of CapitaLand.
The ERCC conducts, on an annual basis, a succession planning review of the President & CEO and selected key positions in CapitaLand. Potential internal and external candidates for succession are reviewed in the light of immediate, medium term and longer term needs and readiness.
The ERCC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the ERCC takes into consideration industry practices and norms in compensation. The President & CEO is not present during the discussions relating to his own compensation and terms and conditions of service, and the review of his performance. The President & CEO will be in attendance when the ERCC discusses policies and compensation of his senior team and key staff. This includes major compensation and incentive policies such as the contingent share awards, bonus, staff salary review and other incentive schemes. Two ERCC meetings were held in 2011.
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The RC’s role is to: • review the adequacy of CapitaLand’s risk
management process; • review and approve in broad terms, the risk guidelines
and limits. These include country concentration limits and risk-adjusted country hurdle rates for the Group and the SBUs, which are reviewed annually; and
• review CapitaLand’s risk portfolio and risk levels, as assisted by the CapitaLand Corporate Risk Assessment Group, which scrutinises the risk profile of every major project which is proposed and is responsible for compiling the Group Quarterly Risk Report. Included in the report is a monitoring of the utilisation of approved country and treasury limits of the Group.
The Group has an Internal Audit Department (“CL IA”) which reports directly to the Chairman of the AC and administratively to the Group CFO. CL IA plans its internal audit schedules in consultation with, but independently of, Management and its plan is submitted to the AC for approval prior to the beginning of each year. The AC also meets with CL IA at least once a year without the presence of Management.
CL IA is a corporate member of the Singapore branch of the Institute of Internal Auditors Inc. (“IIA”), which has its headquarters in the USA. CL IA subscribes to, and is guided by, the Standards for the Professional Practice of Internal Auditing (“Standards”) developed by the IIA and has incorporated these Standards into its audit practices.
The Standards set by the IIA cover requirements on: • Independence; • Professional Proficiency; • Scope of Work; • Performance of Audit Work; and • Management of the Internal Auditing Department.
CL IA staff involved in Information Technology (“IT”) audits are Certified Information System Auditors and members of the Information System Audit and Control Association (“ISACA”) in the USA. The ISACA Information System Auditing Standards provide guidance on the standards and procedures to be applied in IT audits.
To ensure that the internal audits are performed by competent professionals, CL IA recruits and employs suitably qualified staff. In order that their technical knowledge remains current and relevant, CL IA identifies and provides training and development opportunities to these staff.
CapitaLand has an established risk identification and management framework. In CapitaLand, risks are proactively identified and addressed. The ownership of these risks lies with the respective business and corporate executive heads with stewardship residing with the Board.
In 2011, CapitaLand with the assistance of an external consultant, KPMG Risk Consulting and with the participation of the business and corporate executive heads, carried out an exercise to consolidate and review the Group’s risk register which identifies the key risks facing the Group and the internal controls in place to manage or mitigate those risks. Internal and external auditors conduct audits that involve testing the effectiveness of the material internal control systems in the Group including testing, where practical, material internal controls in areas managed by external service providers. Any material non-compliance or lapses in internal controls together with corrective measures recommended by internal and external auditors are reported to the AC. The AC also reviewed the effectiveness of the measures taken by Management in response to the recommendations made by the internal and external auditors. The system of internal control and risk management is continually being refined by Management, the AC and the Board.
Based on the framework established and the reviews conducted by Management and the internal and external auditors, the Board opines, with the concurrence of the AC, that there are adequate controls in place within the Group addressing material financial, operational and compliance risks to meet the needs of CapitaLand in its current business environment.
Prompt fulfilment of statutory reporting requirements is but one way to maintain shareholders’ confidence and trust in the capability and integrity of CapitaLand.
CapitaLand was the first listed real estate group in Singapore to implement quarterly reporting before it became a requirement by the SGX-ST. This shows CapitaLand’s corporate intent to discharge its continuing obligation of prompt and thorough disclosures as practised by international standards, in view of the global reach of its businesses and shareholder base.
Principle 11: Audit Committee CapitaLand’s internal policy requires the AC to have at least three members, all of whom are non-executive and the majority must be independent. The AC is chaired by Mr Richard Edward Hale and comprises Mr James Koh Cher Siang, Mrs Arfat Pannir Selvam and Ms Euleen Goh Yiu Kiang (appointed on 15 October 2011). All the members of the AC, including the Chairman, are independent non-executive directors. The members bring with them invaluable managerial and professional expertise in the financial, tax, legal and accounting domains.
The AC is guided by Terms of Reference which defines its scope of authority. These Terms include review of the annual audit plan, adequacy of the internal audit process, results of audit findings and Management’s response, adequacy and effectiveness of internal controls, Interested Person Transactions, framework and processes established for the implementation of the terms of the collaboration agreement between CapitaLand and CapitaMalls Asia Limited, the processes for the management of material conflicts of interest within the Group and also the resolution of all conflicts of interest matters referred to the AC.
The AC reviews quarterly and full-year results and the appointment and re-appointment of auditors before recommending them to the Board for approval. The AC also approves the compensation of the external auditors, as well as considers the nature and extent of non-audit services and their potential impact on the independence and objectivity of the external auditors.
The AC also reviews arrangements by which employees of CapitaLand may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. Pursuant to this, the AC has introduced a Whistle Blowing Policy where staff may raise improprieties to the Chairman of the AC, with the confidence that, in good faith, the staff making such reports will be treated fairly and be protected from reprisal. The AC confirms that no reports have been received under the Whistle Blowing Policy thus far.
A total of six AC meetings was held in 2011. The AC also held one meeting with the external auditors and internal auditors, without Management’s presence, to discuss the reasonableness of the financial reporting process, the system of internal control, and the significant comments and recommendations by the auditors. Principle 12: Internal Controls Principle 13: Internal Audit CapitaLand believes that it has in place a robust and effective system of internal controls addressing financial, operational and compliance risks to safeguard shareholders’ interests and the Group’s assets, and also to manage risks.
The AC’s responsibilities in the Group’s internal controls are complemented by the work of the FBC and the RC.
The FBC is chaired by Mr Peter Seah Lim Huat and comprises Mr Liew Mun Leong, Prof Kenneth Stuart Courtis, Mr Ng Kee Choe (appointed on 1 December 2011) and Mr Arthur Lang Tao Yih, the Group CFO (appointed on 1 August 2011). The FBC reviews the annual budget and financial policies of the Group.
One FBC meeting was held in 2011 to review the financial forecasts and the annual financial plan of the Group. Major business events, initiatives, strategies and areas of concern were also discussed at the meetings. In addition, the FBC reviews and approves updates to the CapitaLand Group Finance Manual.
The RC was formed in September 2002 as part of CapitaLand’s efforts to strengthen its risk management processes and framework. The RC is chaired by Mr James Koh Cher Siang and comprises Mr Richard Edward Hale and Mrs Arfat Pannir Selvam. A total of four RC meetings was held in 2011.
Corporate Governance Report for the period from 1 January 2011 to 31 December 2011
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The system of internal control and risk management established by CapitaLand provides reasonable, but not absolute, assurance that CapitaLand will not be adversely affected by any event that can be reasonably foreseen as it strives to achieve its business objectives. However, the Board also notes that no system of internal controls and risk management can provide absolute assurance in this regard, or absolute assurance against poor judgement in decision making, human error, losses, fraud or other irregularities.
(D) COMMUNICATION WITH SHAREHOLDERS Principle 14: Communication with Shareholders Principle 15: Greater Shareholder Participation CapitaLand’s Investor Relations and Corporate Communications departments facilitate effective communications with CapitaLand’s shareholders, analysts, fund managers and the media.
CapitaLand’s results for the first three quarters and full-year for financial year 2011 were all released on a timely basis, within 35 days of the end of the relevant quarter and 45 days of the end of the full year.
CapitaLand has also formed the CDC which is chaired by Mr James Koh Cher Siang and comprises Mr Liew Mun Leong and Mrs Arfat Pannir Selvam. The CDC reviews the promptness and comprehensiveness of corporate disclosure issues and announcements made to the SGX-ST, and ensures the adoption of good corporate governance and best practices in terms of transparency to shareholders and the investing community. The views and approvals of the CDC were sought throughout the year on various announcements and news releases issued by CapitaLand.
CapitaLand continues to keep stakeholders and analysts informed of its corporate activities in Singapore and around the world on a timely and consistent basis. CapitaLand makes disclosures on an immediate basis as required under the Listing Manual of the SGX-ST, or as soon as possible where immediate disclosure is not practicable. Regular briefings and meetings for analysts and the media are held, generally coinciding with the release of the Group’s second quarter and full-year results. During these briefings, Senior Management reviews the Group’s most recent performance and discusses CapitaLand’s outlook. In the interest of transparency and broad dissemination, these briefings are webcast live and accessible to the public on the Group’s website at www.capitaland.com, materials used in the briefings are disseminated via SGXNET and recordings of the briefings are also archived on the Group’s website.
In 2011, Senior Management conducted more than 500 meetings with institutional investors. Management also participated in investor conferences in London, Amsterdam, Edinburgh, New York, Boston, Toronto, Montreal, Baltimore, Philadelphia, San Francisco, Frankfurt and Hong Kong besides Singapore. In addition, CapitaLand pursues opportunities to keep its retail shareholders informed through the business media, website postings and other publicity channels. Materials used in the briefings to institutional shareholders are also disseminated via SGXNET for easy access by retail shareholders. CapitaLand supports the Code’s principle to encourage shareholder participation. Shareholders receive the summary financial report and notice of the AGM. Notice of the AGM is also advertised in the press and issued via SGXNET. At the AGM and immediately thereafter, shareholders have the opportunity to communicate their views and discuss with the Board and Management matters affecting CapitaLand. The respective Chairpersons of the AC, NC and ERCC, and the external auditors, would usually be present at the AGM.
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To have transparency in the voting process and better reflect shareholders’ interest, CapitaLand conducts electronic poll voting for shareholders/proxies present at the meeting for all the resolutions proposed at the AGM. Votes cast, for or against, on each resolution will be tallied and displayed ‘live-on-screen’ to shareholders immediately at the AGM. The total number of votes cast for or against the resolutions are also announced after the AGM via SGXNET. Voting in absentia and by email may only be possible following careful study to ensure that the integrity of the information and authentication of the identity of shareholders through the web are not compromised and legislative changes are effected to recognise electronic voting.
In 2011, CapitaLand was the winner of the Most Transparent Company (Property Category) in the Securities Investors Association (Singapore) (SIAS) Investors’ Choice Awards for the 11th consecutive year. In addition, CapitaLand was named “Best Mixed-Use Developer in Asia” in Euromoney Real Estate Awards 2011, “Best Corporate Governance” and “Best Managed Company” in FinanceAsia Best Companies Poll 2011 and “Best Financial Disclosure (Singapore)” by World Finance Investor Relations Awards 2011. CapitaLand also won the Best Investor Relations (Real Estate including property development), Best CFO (Olivier Lim) for Singapore & Pan Asia and Best Investor Relations Professional (Harold Woo and Cheong Kwok Mun) by IR Magazine South East Asia Awards 2011 as well as the inaugural Best Investor Relations in ASEAN by Alpha Southeast Asia.
Corporate Governance
DEALINGS IN SECURITIES Taking into consideration the SGX-ST Best Practices Guide, CapitaLand has issued guidelines to directors and employees in the Group, prohibiting dealings in CapitaLand’s securities (i) while in possession of material unpublished price-sensitive information, (ii) during two weeks before the release of CapitaLand’s results for the first three quarters and, (iii) one month before the release of CapitaLand’s full-year results. They are also discouraged from dealing in CapitaLand’s securities on short-term considerations.
Directors and employees are also prohibited from dealing in securities of other listed companies in the Group while in possession of unpublished price-sensitive information by virtue of their status as directors and/or employees. They are also made aware of the applicability of the insider trading laws at all times.
Report for the period from 1 January 2011 to 31 December 2011
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ATTENDANCE RECORD OF MEETINGS OF THE BOARD AND BOARD COMMITTEES IN 2011
Executive Resource and Finance and Audit Investment Compensation Nominating Budget Risk Board Committee Committee Committee Committee Committee Committee
No. of Meetings Held 4 6 6 2 3 1 4
Board Members
Dr Hu Tsu Tau 4 6
Peter Seah Lim Huat 4 2 3 1
Liew Mun Leong 4 6 3 1
Jackson Peter Tai 1 1 2 1
Richard Edward Hale 3 4 3
James Koh Cher Siang 4 6 4
Arfat Pannir Selvam 4 6 3 4
Prof Kenneth Stuart Courtis 4 6 1
Dr Fu Yuning 2
John Powell Morschel 2 4 2 3
Ng Kee Choe 3 4 2
Simon Claude Israel 4 5 2 3
Euleen Goh Yiu Kiang 4 1 2
Non-Board Members
Olivier Lim Tse Ghow 5 4 1
Arthur Lang Tao Yih 6 2
Notes:
1 Retired as Director, Member of Investment Committee and Member of Finance and Budget Committee on 25 April 2011. 2 Appointed as Member of Investment Committee on 1 June 2011. 3 Appointed as Member of Investment Committee, Nominating Committee, and Finance and Budget Committee on 1 December 2011. 4 Appointed as Director and Member of Audit Committee on 1 October 2011 and 15 October 2011 respectively. 5 Resigned as Member of Investment Committee and Finance and Budget Committee on 31 July 2011. 6 Appointed as Member of Investment Committee and Finance and Budget Committee on 1 August 2011.
COMPOSITION OF BOARD AND BOARD COMMITTEES
Executive Resource and Finance and Corporate Audit Investment Compensation Nominating Budget Disclosure Risk Board Members Committee Committee Committee Committee Committee Committee Committee
Dr Hu Tsu Tau C
Peter Seah Lim Huat C C C
Liew Mun Leong M M M M
Jackson Peter Tai 1 M M
Richard Edward Hale C M
James Koh Cher Siang M C C
Arfat Pannir Selvam M M M M
Prof Kenneth Stuart Courtis M M
Dr Fu Yuning
John Powell Morschel 2 M M
Ng Kee Choe 3 M M M M
Simon Claude Israel M M M
Euleen Goh Yiu Kiang 4 M
Non-Board Members
Olivier Lim Tse Ghow 5 M M
Arthur Lang Tao Yih 6 M M
Denotes: C – Chairman M – Member
Notes:
1 Retired as Director, Member of Investment Committee and Member of Finance and Budget Committee on 25 April 2011. 2 Appointed as Member of Investment Committee on 1 June 2011. 3 Appointed as Member of Investment Committee, Nominating Committee, and Finance and Budget Committee on 1 December 2011. 4 Appointed as Director and Member of Audit Committee on 1 October 2011 and 15 October 2011 respectively. 5 Resigned as Member of Investment Committee and Finance and Budget Committee on 31 July 2011. 6 Appointed as Member of Investment Committee and Finance and Budget Committee on 1 August 2011.
Corporate Governance Report for the period from 1 January 2011 to 31 December 2011
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Council of CEOs
1 LIEW MUN LEONG PRESIDENT & CEO CAPITALAND GROUP
2 JENNIE CHUA CHIEF CORPORATE OFFICER CAPITALAND LIMITED
3 LIM MING YAN CHIEF OPERATING OFFICER CAPITALAND LIMITED CEO THE ASCOTT LIMITED (Until 5 February 2012)
4 WEN KHAI MENG CEO CAPITALAND FINANCIAL LIMITED
CHIEF INVESTMENT OFFICER CAPITALAND LIMITED (Until 5 February 2012)
5 OLIVIER LIM CHIEF INVESTMENT OFFICER CAPITALAND LIMITED (From 6 February 2012)
HEAD OF STRATEGIC CORPORATE DEVELOPMENT CAPITALAND LIMITED (Until 5 February 2012)
6 ARTHUR LANG GROUP CHIEF FINANCIAL OFFICER CAPITALAND LIMITED
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7 WONG HEANG FINE CEO CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
CEO CAPITALAND ILEC PTE. LTD.
8 JASON LEOW CEO CAPITALAND CHINA HOLDINGS PTE LTD
9 LIM BENG CHEE CEO CAPITAMALLS ASIA LIMITED
10 CHONG LIT CHEONG CEO CAPITALAND COMMERCIAL LIMITED
11 CHEN LIAN PANG CEO CAPITAVALUE HOMES LIMITED
12 CHONG KEE HIONG CEO THE ASCOTT LIMITED (From 6 February 2012)
CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (Until 5 February 2012)
13 BOB JOHNSTON MANAGING DIRECTOR & CEO AUSTRALAND PROPERTY GROUP
14 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
15 SIMON HO CEO CAPITAMALL TRUST MANAGEMENT LIMITED
16 RONALD TAY CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (From 27 February 2012)
CHIEF INVESTMENT OFFICER THE ASCOTT LIMITED (Until 5 February 2012)
17 TONY TAN TEE HIEONG CEO CAPITARETAIL CHINA TRUST MANAGEMENT LIMITED
18 CHAN SAY YEONG CEO QUILL CAPITA MANAGEMENT SDN. BHD.
19 SHARON LIM HWEE LI CEO CAPITAMALLS MALAYSIA REIT MANAGEMENT SDN. BHD.
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Awards and accolades which she has received include three Singapore National Day Awards (1984, 2004 & 2008), Outstanding Contribution to Tourism Award 2006, Women’s World Excellence Awards 2006, Travel Personality of the Year Award 2005, National Trades Union Congress (NTUC) Medal of Commendation 2005, 25 Stars of Asia Award 2003, Person of the Year – Asia Pacific (Hotel) 2002, National Productivity 2002, Pacific Area Travel Writers Association Hall of Fame 2000, Hotelier of the Year 1999, Woman of the Year 1999, Champion of the Arts 1999 and Independent Hotelier of the World 1997.
LIM MING YAN
CHIEF OPERATING OFFICER, CAPITALAND LIMITED CEO, THE ASCOTT LIMITED (Until 5 February 2012)
Mr Lim Ming Yan is the Chief Operating Officer of CapitaLand Limited. He is also the Deputy Chairman of CapitaLand China Executive Committee. Mr Lim was concurrently the CEO of The Ascott Limited until 5 February 2012.
Prior to joining Ascott, Mr Lim was the CEO of CapitaLand China Holdings Pte Ltd, responsible for growing CapitaLand into a leading foreign real estate developer in China.
Mr Lim was conferred the prestigious Magnolia Award by the Shanghai Municipal Government in 2003 and 2005 for his significant contributions to Shanghai. He was named Outstanding Chief Executive (Overseas) at the Singapore Business Awards in 2006.
Mr Lim graduated from the University of Birmingham, United Kingdom, with a Bachelor of Science (First Class Honours) in Mechanical Engineering and Economics. He attended the Advanced Management Program at Harvard Business School in 2002.
WEN KHAI MENG
CEO, CAPITALAND FINANCIAL LIMITED CHIEF INVESTMENT OFFICER, CAPITALAND LIMITED (Until 5 February 2012)
Mr Wen Khai Meng is the Chief Executive Officer of CapitaLand Financial Limited. He is also a Non-Executive Director of CapitaCommercial Trust Management Limited, Ascott Residence Trust Management Limited and Quill Capita Management Sdn. Bhd.
Prior to this, Mr Wen has held several senior appointments within the Group including Chief Investment Officer of CapitaLand Limited and CEO of CapitaLand Commercial Limited. Before joining the Group, Mr Wen was with the Ministry of National Development.
Mr Wen holds a Master of Business Administration and a Master of Science in Construction Engineering as well as a Bachelor of Engineering (First Class Honours).
OLIVIER LIM
CHIEF INVESTMENT OFFICER, CAPITALAND LIMITED (From 6 February 2012)
HEAD OF STRATEGIC CORPORATE DEVELOPMENT, CAPITALAND LIMITED (Until 5 February 2012)
Mr Olivier Lim is the Chief Investment Officer of CapitaLand Limited. He is concurrently the non-executive Chairman of Australand Holdings Limited, and a non-executive director of CapitaMalls Asia Limited, CapitaMall Trust Management Limited, CapitaCommercial Trust Management Limited and Raffles Medical Group Ltd. Mr Lim also serves as a board member of Sentosa Development Corporation, and as the non-executive Chairman of its subsidiary, Mount Faber Leisure Group Pte Ltd.
He was CapitaLand’s Group CFO for six years until 2011. Prior to joining CapitaLand Limited in 2003, he was Director and Head of the Real Estate Unit, Corporate Banking in Citibank Singapore.
Mr Lim holds a First Class Honours degree in Civil Engineering from Imperial College, London. He was named CFO of the Year in 2007 (for firms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. He was also named CFO of the Year by The Asset magazine in its 2010 Asian Awards. He was awarded Best Investor Relations by a CFO by IR Magazine for South East Asia for 2009, 2010 and 2011 and Pan-Asia for 2011.
Council of CEOs
LIEW MUN LEONG
PRESIDENT & CEO, CAPITALAND GROUP
Mr Liew Mun Leong is President & CEO of CapitaLand Group. He joined the Board of Pidemco Land as Director on 1 January 1997. Pidemco Land merged with DBS Land to form CapitaLand in November 2000. Mr Liew continued to serve on the CapitaLand Board and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He also serves as Member of CapitaLand’s Investment Committee, Nominating Committee, Corporate Disclosure Committee and Finance and Budget Committee.
Mr Liew is Chairman of CapitaMalls Asia Limited (listed on the SGX-ST and Hong Kong Stock Exchange), CapitaLand Residential Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand Commercial Limited, CapitaLand Financial Limited, CapitaValue Homes Limited and CapitaLand ILEC Pte. Ltd.. Mr Liew is Deputy Chairman of The Ascott Limited as well as Deputy Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST), CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX-ST), CapitaRetail China Trust Management Limited (the manager of CapitaRetail China Trust listed on the SGX-ST) and Ascott Residence Trust Management Limited (the manager of Ascott Residence Trust listed on the SGX-ST). He is also a Director of CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm. Mr Liew is presently Chairman of Changi Airport Group (Singapore) Pte Ltd and China Club Investment Pte Ltd. He is also a Director and a member of the Audit Committee of Singapore Exchange Limited (listed on the SGX-ST), a Director of Surbana Corporation Pte. Ltd., Singapore-China Foundation Ltd and LFIE Holding Limited.
He is a member of the NUS Business School Management Advisory Board, National Productivity and Continuing Education Council, Governing Council of the Human Capital Leadership Institute, Centre for Liveable Cities and the Board of Trustees of Chinese Development Assistance Council.
Mr Liew has spent 22 years in the public sector and another 20 years in the private sector in various leadership positions.
In 2011, Mr Liew was named Best CEO in Singapore by FinanceAsia. In 2008, he was named Asia’s Best Executive of 2008 (Singapore) by Asiamoney and Best CEO in Asia (Property) by Institutional Investor. In 2007, he was conferred the CEO of the Year award (for firms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2006, he was named Outstanding CEO of the Year in the Singapore Business Awards.
Mr Liew was conferred the Meritorious Service Medal at the Singapore National Day Awards 2011.
Mr Liew is a graduate of the University of Singapore with a Degree in Civil Engineering and is a registered professional civil engineer.
JENNIE CHUA
CHIEF CORPORATE OFFICER, CAPITALAND LIMITED
Ms Jennie Chua is the Chief Corporate Officer of CapitaLand Limited. She is a board member of CapitaMalls Asia Limited, CapitaValue Homes Limited, CapitaLand ILEC Pte. Ltd., The Ascott Limited, Ascott Residence Trust Management Limited and CapitaLand Hope Foundation.
She is Chairman of Alexandra Health/Khoo Teck Puat Hospital, Community Chest of Singapore, Sentosa Cove, Singapore Film Commission, International Advisory Council for Tourism, Tourism Industry Skills & Training Council and The Arts House. She co-chairs the Governing Council of the Institute of Service Excellence and is Deputy Chairman of Temasek Foundation.
Ms Chua is a member of Singapore’s Pro-Enterprise Panel and a Board Director of Ministry of Health Holdings Pte Ltd, Singapore International Chamber of Commerce and NYU Tisch School of the Arts, Asia Ltd.
She is on the Board of Trustees of Nanyang Technological University, Singapore.
Ms Chua is a Justice of the Peace and Singapore’s Non-Resident Ambassador to The Slovak Republic.
She is also a Board Director of ISS A/S & ISS World Services A/S.
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CHONG LIT CHEONG
CEO, CAPITALAND COMMERCIAL LIMITED
Mr Chong Lit Cheong is the CEO of CapitaLand Commercial Limited. In 2012 he is appointed as Director of Surbana Corporation Pte Ltd (Surbana), a 40%-owned associate company of CapitaLand.
Prior to joining the Group, Mr Chong was the CEO of International Enterprise Singapore, an agency under Singapore’s Ministry of Trade and Industry which promotes the overseas growth of Singapore-based enterprises and international trade. Prior to that, he was the CEO of JTC Corporation and Managing Director of National Science and Technology Board (now called A*STAR). Earlier, he served in Singapore’s Economic Board where he was posted to Suzhou, China, to lead the development of the China-Singapore Suzhou Industrial Park project.
Mr Chong is a Mombusho (Colombo Plan) Scholar and holds a Bachelor of Engineering (Electronic) from the University of Tokyo. He also completed an Advanced Management Programme at INSEAD in France in 1994 and the Tsinghua Executive Program in Shanghai, China, in 2004.
CHEN LIAN PANG
CEO, CAPITAVALUE HOMES LIMITED
Mr Chen Lian Pang is the CEO of CapitaValue Homes Limited. Prior to this, he was concurrently the CEO (Southeast Asia) of CapitaLand Commercial Limited and CEO & Managing Director of TCC Capital Land where he spearheaded the Group’s business in the new markets including Vietnam and Thailand.
Mr Chen has 28 years of international experience in construction and real estate. He started his career with the Housing and Development Board of Singapore. Prior to joining CapitaLand, he held senior positions at L&M International and Torie Construction Pte Ltd.
Mr Chen holds a Master of Science in Civil Engineering from the National University of Singapore and a Bachelor of Science in Civil Engineering (First Class Honours) from the University of Cardiff, UK. He completed the General Management Program at Harvard Business School and an International Business Fellowship Executive Programme with Tsinghua University in 2000 and 2011 respectively. Mr Chen is a registered professional engineer.
CHONG KEE HIONG
CEO, THE ASCOTT LIMITED (From 6 February 2012)
CEO, ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (Until 5 February 2012)
Mr Chong Kee Hiong was the CEO of Ascott Residence Trust Management Limited from March 2006 to February 2012. Mr Chong has assumed the position of CEO of The Ascott Limited with effect from 6 February 2012. Before joining Ascott, Mr Chong was the Chief Financial Officer of Raffles Holdings Limited.
Mr Chong is the President of the General Committee of Orchid Country Club and is a Director of SLF Leisure Enterprises (Pte) Ltd and Pasir Ris Resort Pte Ltd. He also sits on the Audit Committee of Sentosa Development Corporation.
Mr Chong holds a Bachelor of Accountancy degree from the National University of Singapore and is a member of the Institute of Certified Public Accountants of Singapore. He completed Harvard Business School’s Advanced Management Program in 2008.
BOB JOHNSTON
MANAGING DIRECTOR AND CEO, AUSTRALAND PROPERTY GROUP
Mr Bob Johnston is the Managing Director and CEO of Australand Property Group. He joined Australand in August 2007 and has in excess of 20 years of experience in the property industry.
Prior to joining Australand, Mr Johnston held a number of senior management positions with the Lend Lease Group in the USA, UK, Asia and Australia including that of Global CEO of Bovis Lend Lease, CEO of Bovis Lend Lease Asia Pacific and COO of Lend Lease Real Estate Investments in the USA.
Mr Johnston holds a First Class Honours degree in Electrical Engineering from James Cook University, Australia.
Council of CEOs
ARTHUR LANG
GROUP CHIEF FINANCIAL OFFICER, CAPITALAND LIMITED
Mr Arthur Lang is the Group Chief Financial Officer of CapitaLand Limited having started with the Group on August 1, 2011.
Prior to joining CapitaLand, he was co-head of the Southeast Asia Investment Banking Division for Morgan Stanley. In that capacity, he spearheaded the client coverage and transaction execution efforts across corporate finance, and mergers and acquisitions transactions for Southeast Asian companies. Prior roles Mr Lang held at Morgan Stanley included the Chief Operating Officer for the Asia Pacific Investment Banking Division where he was based in Hong Kong.
Mr Lang is also currently a board member of the Land Transport Authority of Singapore.
Mr Lang has an MBA from the Harvard Business School and a BA in Economics (magna cum laude) from Harvard University.
WONG HEANG FINE
CEO, CAPITALAND RESIDENTIAL SINGAPORE PTE LTD CEO, CAPITALAND ILEC PTE. LTD.
Mr Wong Heang Fine is the CEO of CapitaLand Residential Singapore Pte Ltd and the CEO of CapitaLand ILEC Pte. Ltd. He is also in charge of CapitaLand’s business in the Gulf Cooperation Council (GCC) region. In 2011, Mr Wong was appointed President of the Real Estate Developers’ Association of Singapore (REDAS).
Prior to joining CapitaLand, Mr Wong was President & CEO of Sembcorp Engineers and Constructors, the largest engineering and construction company in Southeast Asia. He also has varied experience in the leisure and entertainment industries.
Mr Wong holds a Master of Science in Engineering Production & Management from the University of Birmingham, UK and a Bachelor of Science in Mechanical Engineering (First Class Honours) from the University of Leeds, UK.
JASON LEOW
CEO, CAPITALAND CHINA HOLDINGS PTE LTD
Mr Jason Leow is the CEO of CapitaLand China Holdings Pte Ltd.
Mr Leow has been with the CapitaLand Group from 1994 and has over 17 years of working experience in China. He has held several appointments within the CapitaLand Group, including Deputy CEO of CapitaLand China Holdings.
Prior to joining the CapitaLand Group, he was a senior financial analyst at ST Aerospace Ltd and also spent three years at DBS Finance Ltd.
Mr Leow is a Certified Public Accountant and a member of the Institute of Certified Public Accountants of Singapore. He obtained an Executive Master in Business Administration degree from Fudan University and attended the Advanced Management Program at Harvard Business School in 2007.
LIM BENG CHEE
CEO, CAPITAMALLS ASIA LIMITED
Mr Lim Beng Chee is the CEO and Executive Director of CapitaMalls Asia Limited (CMA). He has more than 10 years of real estate investment and asset management experience.
Mr Lim previously held various positions within the CapitaLand Group of companies, including CEO of CapitaMall Trust Management Limited and CapitaRetail China Trust Management Limited. He played an instrumental role in the creation of CMA’s retail real estate funds and listings of CapitaRetail China Trust and CapitaMalls Malaysia Trust.
Mr Lim holds a Master of Business Administration (Accountancy) from the Nanyang Technological University of Singapore and a Bachelor of Arts in Physics (Honours) from the University of Oxford, UK.
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TONY TAN TEE HIEONG
CEO, CAPITARETAIL CHINA TRUST MANAGEMENT LIMITED
Mr Tony Tan Tee Hieong is the CEO and Executive Director of CapitaRetail China Trust Management Limited (CRCTML).
Mr Tan has over 19 years of experience in international treasury, finance and risk management. Prior to joining CRCTML, Mr Tan was with IKEA for more than nine years, where he held positions as Treasurer and Finance Manager for Asia Pacific region. During those tenures, he also concurrently sat on IKEA’s finance committee for Asia Pacific that oversaw the group’s strategic finance and tax matters. His other experiences prior to joining IKEA include Treasury Accountant for Wearnes International, the trading and distribution arm of WBL and various trading positions with international banks.
Mr Tan holds a Master of Business Administration (Distinction) from the University of Manchester, United Kingdom, and a Bachelor of Accountancy degree from the National University of Singapore.
CHAN SAY YEONG
CEO, qUILL CAPITA MANAGEMENT SDN. BHD.
Mr Chan Say Yeong is the CEO and Executive Director of Quill Capita Management Sdn. Bhd., the manager of Quill Capita Trust, CapitaLand’s first overseas REIT which is listed on Bursa Malaysia Securities Berhad.
Prior to this, Mr Chan held the position of Managing Director of CapitaLand Financial Limited based in Malaysia.
Mr Chan holds a Bachelor of Accountancy from the National University of Singapore. He has completed the Executive Development Program by The Wharton School of the University of Pennsylvania, US.
Council of CEOs
LYNETTE LEONG
CEO, CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
Ms Lynette Leong is the CEO and Executive Director of CapitaCommercial Trust Management Limited (CCTML).
Ms Leong has more than 20 years of international experience, including banking and finance with Standard Chartered Bank and United Malayan Banking Corporation Berhad in Singapore and Malaysia, and real estate fund management in the London, New York, Chicago and Asian offices of LaSalle Investment Management. Prior to joining CCTML, Ms Leong was the CEO of Ascendas’ South Korea office where she had spearheaded Ascendas’ strong foothold in the country’s real estate market, including the acquisition of office and logistics properties and the establishment of its first real estate fund.
Ms Leong holds a Master of Science in Real Estate and a Bachelor of Science degree in Estate Management from the National University of Singapore.
SIMON HO
CEO, CAPITAMALL TRUST MANAGEMENT LIMITED
Mr Simon Ho is the CEO and Executive Director of CapitaMall Trust Management Limited.
Mr Ho joined CapitaLand Financial Limited, a subsidiary of CapitaLand Limited (CL), the parent company of CMA in 2004 and has around 20 years of experience in real estate investment and management. He is currently responsible for managing the operations of 16 retail properties in Singapore.
Prior to joining CapitaLand Financial Limited in 2004, Mr Ho worked in the Ascott Group from 2000 to 2004, holding various positions including Vice President,
Business Development and Senior Vice President, Operations. As Senior Vice President in CapitaLand Financial Limited, he was in charge of research and marketing. In September 2004, Mr Ho was appointed Chief Operating Officer, Retail of CapitaLand Commercial Limited, another subsidiary of CL, where he was responsible for overseeing the operations of the company. He was the Chief Operating Officer of CMA from October 2004 to December 2008 before being appointed as the Deputy Chief Executive Officer of CMA in January 2009 and had stepped down upon the listing of CMA on the SGX-ST, he assumed his current position as Chief Executive Officer and Executive Director of CMTML.
Mr Ho holds a Master of Science in Real Estate and a Bachelor of Science in Estate Management (Honours) from the National University of Singapore.
RONALD TAY
CEO, ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (From 27 February 2012)
CHIEF INVESTMENT OFFICER, THE ASCOTT LIMITED (Until 5 February 2012)
Mr Tay is the Chief Executive Officer of Ascott Residence Trust Management Limited (ARTML) with effect from 27 February 2012. He was concurrently Chief Investment Officer of The Ascott Limited (Ascott) and Head of Business Development and Asset Management of ARTML until February 2012.
Mr Tay has been with the CapitaLand Group for more than 10 years. Prior to joining Ascott, Mr Tay was with CapitaLand Residential Singapore as Senior Vice President (Finance and Investment). Mr Tay began his career in the banking industry, where he spent nine years in various senior positions in corporate and investment banking.
Mr Tay holds a Bachelor of Business (Honours) from the Nanyang Technological University.
SHARON LIM HWEE LI
CEO, CAPITAMALLS MALAYSIA REIT MANAGEMENT SDN. BHD.
Ms Sharon Lim Hwee Li is the CEO and Executive Director of CapitaMalls Malaysia REIT Management Sdn. Bhd., the manager of CapitaMalls Malaysia Trust. Ms Lim has experience in property investment, asset management and marketing in various property sectors. Prior to her current position, Ms Lim was Country Head for CapitaMalls Asia Limited’s (CMA) operations in Malaysia, and was instrumental in establishing CMA’s retail platform in Malaysia.
She holds a Master of Business Administration from Murdoch University, Australia and a Bachelor of Business (Distinction) from the Royal Melbourne Institute of Technology, Australia.
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1 LIEW MUN LEONG PRESIDENT & CEO
7 TAN SENG CHAI DEPUTY CHIEF CORPORATE OFFICER
13 LOW SAI CHOY SENIOR VICE PRESIDENT LEGAL/COMPANY SECRETARY
2 JENNIE CHUA CHIEF CORPORATE OFFICER
3 LIM MING YAN CHIEF OPERATING OFFICER CEO THE ASCOTT LIMITED (Until 5 February 2012)
4 WEN KHAI MENG CEO CAPITALAND FINANCIAL LIMITED
CHIEF INVESTMENT OFFICER (Until 5 February 2012)
5 OLIVIER LIM CHIEF INVESTMENT OFFICER (From 6 February 2012)
HEAD STRATEGIC CORPORATE DEVELOPMENT (Until 5 February 2012)
6 ARTHUR LANG GROUP CHIEF FINANCIAL OFFICER
8 ANTHONY SEAH CHIEF OF TECHNICAL SERVICES
9 POON HIN KONG CHIEF OF DESIGN REVIEW UNIT
10 LEONG SOON PENG CHIEF TECHNOLOGY OFFICER
11 LORNA TAN SENIOR VICE PRESIDENT CORPORATE COMMUNICATIONS
12 HAROLD WOO SENIOR VICE PRESIDENT INVESTOR RELATIONS
14 HUBERT LADSTATTER SENIOR VICE PRESIDENT RISK MANAGEMENT
15 BELINDA GAN GROUP FINANCIAL CONTROLLER
16 LEOW SIEW BENG SENIOR VICE PRESIDENT HUMAN RESOURCE (ORGANISATIONAL DEVELOPMENT)
17 ANNA CHOO SENIOR VICE PRESIDENT TREASURY
18 TING TONG KOI SENIOR VICE PRESIDENT OPERATIONS COMPLIANCE UNIT
19 LIM SOO GEE HEAD CORPORATE SECURITY AND INVESTIGATION
NOT PHOTOGRAPHED
• SHARON SNG SENIOR VICE PRESIDENT CORPORATE FINANCE
• BOAZ BOON SENIOR VICE PRESIDENT RESEARCH
• ANGELINE OH SENIOR VICE PRESIDENT HUMAN RESOURCE (From 6 February 2012)
• LEE TIONG PENG SENIOR VICE PRESIDENT CAPITALAND INSTITUTE OF MANAGEMENT AND BUSINESS
• MONICA CHIA SENIOR VICE PRESIDENT GROUP INTERNAL AUDIT
• CHYE MOI JUNE HEAD GROUP TAX
• ANDRE LIM VICE PRESIDENT CORPORATE PLANNING/ ECONOMICS UNIT
• TAN BEE LENG VICE PRESIDENT CORPORATE MARKETING & CORPORATE SOCIAL RESPONSIBILITY
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Presence in more than 110 cities in over 20 countries
3 Core Markets – Singapore, China and Australia
3 Secondary Markets – Europe1, Malaysia and Vietnam
2 Opportunistic Markets – Japan and India
Strategic Focus
3 + 3 + 2 market strategy
1 Serviced residences only
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Global Presence
AUSTRALIA • Adelaide • Brisbane • Hobart • Melbourne • Perth • Sydney
CHINA • Anyang • Beijing • Changsha • Chengdu • Chongqing • Dalian • Deyang • Dongguan • Foshan • Guangzhou • Harbin • Hangzhou • Hong Kong • Huhhot • Kunshan • Macau • Maoming • Mianyang • Nanchang
• Ningbo • Quanzhou • Rizhao • Shanghai • Shenyang • Shenzhen • Suzhou • Tianjin • Weifang • Wuhan • Wuhu • Xi’an • Xiamen • Xinxiang • Yangzhou • Yibin • Yiyang • Zhangzhou • Zhanjiang • Zhaoqing • Zhengzhou • Zibo
INDIA • Ahmedabad • Bangalore • Chennai • Cochin
• Hyderabad • Jalandhar • Mangalore • Mumbai • Mysore • Nagpur • Udaipur
INDONESIA • Bali • Jakarta • Surabaya
JAPAN • Chitose • Eniwa • Funabashi • Fukuoka • Hiroshima • Kobe • Kyoto • Nagoya • Osaka • Saga • Sapporo • Sendai • Tokyo
Asia Pacific MALAYSIA • Cyberjaya • Kuala Lumpur • Kuantan • Kuching • Nusajaya • Penang • Selangor
PHILIPPINES • Manila
SINGAPORE
SOUTH KOREA • Seoul
THAILAND • Bangkok
VIETNAM • Danang • Hai Phong • Hanoi • Ho Chi Minh City
BAHRAIN • Manama
OMAN • Muscat
qATAR • Doha
Gulf Cooperation Council Countries UNITED ARAB EMIRATES • Abu Dhabi • Dubai
BELGIUM • Brussels
FRANCE • Aix-en-Provence • Bordeaux • Cannes • Ferney-Voltaire • Grenoble
• Lille • Lyon • Marseille • Montpellier • Nice • Paris • Strasbourg • Toulouse
GEORGIA • Tbilisi
GERMANY • Berlin • Frankfurt • Hamburg • Munich
Europe SPAIN • Barcelona
UNITED KINGDOM • London
Homes
Offices
Shopping Malls
Serviced Residences
Mixed Developments
Financial Services
Raffles City Developments
Multi-sector
Schools/Facilities
United Kingdom
belgiUm
france
Spain
germany
georgia
bahrain
qatar Uae
oman india
thailand
singapore
VieTnaM
Malaysia
indoneSia
philippineS
SoUth KoreaChina
eUrope
japan
aUsTralia
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A total of 844 residential units (sales value of S$1.35 billion) were sold in Singapore and another 1,500 residential units (sales value of RMB 3.1 billion) were sold in China. This was achieved amidst the economic uncertainties and cooling measures imposed in the residential property market. In Australia, the Residential division of Australand delivered 2,536 lot sales in 2011 while the Commercial & Industrial division successfully completed 13 industrial projects with a combined end value of approximately A$300 million. The Group also completed its maiden projects in Vietnam and Abu Dhabi during the year. Beyond the residential sector, CapitaMalls Asia opened three malls in China and one in India while Ascott secured a total of 25 management contracts covering Asia, Europe and the Middle East. Ascott opened seven new serviced residences in 2011 and plans to expand in various cities globally through active acquisitions of properties and securing more management contracts.
As part of the Group’s capital recycling strategy, CapitaLand China Holdings divested a residential site in Guangnan and a plot of land in Zhabei, both in Shanghai. CapitaLand Commercial also reconstituted its portfolio by divesting its non-core asset, Corporation Place. Ascott, our serviced residence arm, successfully injected New Minzhong Leyuan Mall into CapitaRetail China Trust and Ascott Beijing into Ascott Serviced Residence (China) Fund.
In terms of financial performance, the Group’s PATMI was S$1.06 billion. This was comparatively lower than FY2010’s restated(1) PATMI of S$1.43 billion, mainly attributable to lower development profits and portfolio gains, but partially mitigated by higher fair value gains of investment properties. In 2011, there was a change in accounting standard which resulted in the Group’s development profits for overseas projects being recognised on a completion basis instead of a progressive basis. This has resulted in lumpy profit recognition, thereby creating more volatility in the financial results.
The Group’s two listed subsidiaries, CapitaMalls Asia and Australand, have performed well in their respective sectors in 2011, delivering profits of S$456.0 million and A$140.6 million respectively to their shareholders.
REVENUE Revenue for FY2011 was S$3.02 billion which was 11% lower than FY2010. The decrease was attributable to lower revenue from our development projects, lower rental revenue from the shopping mall and serviced residence businesses partially mitigated by higher fee-based revenue.
Geographically, revenue from our overseas operations made up 64% or S$1.94 billion of the Group’s revenue. Revenue from the Group’s three core markets of Singapore, China and Australia accounted for 87% or S$2.63 billion of the Group’s revenue (FY2010: 89% or S$3.02 billion).
CapitaLand Residential Singapore
CapitaLand China Holdings
CapitaLand Commercial
The Ascott Limited
CapitaValue Homes
CapitaLand Financial
CapitaMalls Asia
Australand
2011
25.5%
17.3%
3.2%12.4%
3.4% 2.6%
8.1%
27.5%
2010
37.8%
9.6% 4.2%
12.0%
3.4%
7.2%
25.8%
2011 REVENUE BY STRATEGIC BUSINESS UNIT Total: S$3.02 billion
2010 REVENUE BY STRATEGIC BUSINESS UNIT (RESTATED) Total: S$3.38 billion
Performance Overview
PERFORMANCE OVERVIEW CapitaLand Group achieved a profit after tax and non-controlling interests (PATMI) of S$1.06 billion for the full year ended 2011, despite a challenging business environment clouded by global economic uncertainties and government policy restrictions on the property market. This marks the sixth consecutive year that the Group has achieved a net profit in excess of S$1 billion.
The Group continued to ramp up its investments in 2011, committing a total of S$11 billion of new investments. This followed a commitment of approximately S$6 billion worth of investments made in the previous year. We successfully secured a number of sites and made acquisitions in both our core markets of Singapore and China to further strengthen our presence in these markets.
In Singapore, we acquired the Marine Point site through an en bloc sale and were awarded the Bishan Central site (Sky Habitat) through a government land sales tender. These two sites could potentially add 650 units to our Singapore residential pipeline. On the commercial front, we also successfully bided for a prime site, Westgate (Jurong Gateway site), which will be developed into a mixed development comprising both retail and office spaces. In line with our active portfolio management, we will re-develop Market Street Car Park into a prime Grade A office tower, named CapitaGreen. This, together with Westgate, will increase our office footprint in the Singapore Central Business District and commercial hubs located near transportation nodes, thus further entrenching our presence in the Singapore office sector. The Group also acquired a 40% strategic stake in Surbana Corporation (Surbana) to complement and accelerate the growth of our value housing initiative by leveraging on Surbana’s expertise, particularly on its consultancy services and large scale mass market residential developments. Besides adding a full suite of consultancy services to CapitaLand, this acquisition also increased our presence in China through the various townships owned and developed by Surbana.
Over in China, CapitaLand was awarded the prime Chao Tian Men site located in the heart of Yuzhong District
in Chongqing through a joint tender with our subsidiary, CapitaMalls Asia, and a related party. This site, which will be developed into a landmark mixed development including a shopping mall and eight towers for residential, office, serviced residence and hotel use, will substantially strengthen our foothold in China. The plan is to develop this into our signature Raffles City project, making it the 8th Raffles City development in China. The other Raffles City projects in China are in Shanghai, Beijing, Chengdu, Hangzhou, Ningbo, Shenzhen and Changning. To further increase residential development pipeline, CapitaLand China Holdings increased its stake in a prime site in Panyu, Guangzhou and acquired another site in Hangzhou while CapitaValue Homes, our new business unit which was set up in October 2010, acquired one site each in Guangzhou and Shanghai. During the year, CapitaMalls Asia acquired four malls located in key Chinese cities, raising its number of malls in China to 56. In October 2011, CapitaMalls Asia successfully launched a secondary listing in Hong Kong. The dual listing complements CapitaMalls Asia’s growth strategy in China and further enhances its capital management flexibility with a broadened investor base.
In Australia, our listed subsidiary, Australand, established a logistics joint venture with the Government Investment Corporation of Singapore; targeting total investment of A$450 million. The joint venture will invest in completed product sourced from Australand’s development pipeline. Australand also continued to take steps to secure medium term earnings through the acquisition of several sites including Clemton Park, Ashlar and Eastern Creek in Sydney, and Sunbury and Laverton in Melbourne.
For the year under review, the Group launched a number of residential projects both in Singapore and China, the most notable of which was the launch of the Bedok Residences in Singapore which attracted very strong demand. The project was very well-received with more than 80% sold since the launch. In China, new launches included the Imperial Bay in Hangzhou, Dolce Vita in Guangzhou, Paragon in Shanghai and International Trade Centre in Tianjin. These are in addition to the release of new units of existing projects.
(1) Revenue recognition on development projects was revised following the adoption of INT FRS 115 Agreement for the Construction of Real Estate which was effective on 1 January 2011.
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EARNINGS ANALYSIS In FY2011, the Group achieved earnings before interest and tax (EBIT) of S$2.09 billion. This was 19% lower than FY2010’s restated EBIT of S$2.58 billion due to lower development profits and portfolio gains, partially mitigated by higher fair value gains from the revaluation of investment properties.
In terms of geographic spread, overseas EBIT constituted 58% of the Group’s total EBIT. EBIT from our core markets of Singapore, China and Australia totalled S$2.03 billion in FY2011, accounting for 97% of the Group’s total EBIT.
EBIT contribution from CapitaLand Residential Singapore decreased by 36% to S$327.4 million due mainly to the restatement of prior year EBIT as required under the new accounting standard INT FRS 115. In FY2010, the EBIT was boosted by significant contributions from units sold under The Seafront on Meyer and Latitude which were on deferred payment scheme and hence its revenue and profit were recognised in its entirety on the projects’ completion in 2010.
CapitaLand China Holdings registered an EBIT of S$423.7 million which was 35% lower than last year due to lower fair value gains from the revaluation of its investment properties and lower divestment gains, partially mitigated by higher development profits.
EBIT from CapitaLand Commercial was S$189.6 million. This was 24% lower than the EBIT of S$250.2 million achieved in FY2010 mainly due to lower contribution from a joint venture in Thailand that was divested in April 2011, lower gains from divestments as well as foreign exchange losses; partially mitigated by lower impairment losses.
Ascott registered an EBIT of S$148.4 million in FY2011 as compared to S$173.0 million in FY2010. The lower EBIT was mainly attributable to lower portfolio gains, partly offset by higher share of fair value gains from the revaluation of investment properties held by Ascott Residence Trust and Ascott Serviced Residence (China) Fund.
CapitaValue Homes posted a lower loss of S$12.9 million in FY2011 vis a vis a loss of S$20.5 million in FY2010. The improvement was mainly due to profit recognition for The Vista, partially offset by higher administrative expenses to start up business in China as well as its share of loss from a joint venture.
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327
2011 EBIT BY STRATEGIC BUSINESS UNIT Total: S$2.09 billion
-100
0
100
200
300
400
500
600
700
514
2010 EBIT BY STRATEGIC BUSINESS UNIT (RESTATED) Total: S$2.58 billion
-100
0
100
200
300
400
500
600
700
424
190 148
(13)
80
597*
324*
10
S$ million
649
250 173
(21)
103
603*
312*
1
S$ million CapitaLand Residential Singapore
CapitaLand China Holdings
CapitaLand Commercial
The Ascott Limited
CapitaValue Homes
CapitaLand Financial
Others
CapitaMalls Asia
Australand
* Represents 100% EBIT at CapitaMalls Asia and Australand level.
Revenue from CapitaLand Residential Singapore saw a 40% decrease to S$774.1 million when compared to the restated FY2010 figures. This was because revenue from units sold under the deferred payment scheme from The Seafront on Meyer and Latitude was recognised in its entirety in FY2010 under INT FRS 115. In FY2011, revenue comprised mainly progressive revenue recognition from The Interlace, The Wharf Residence and Urban Resort Condominium, as well as sales of remaining completed units in Latitude.
Revenue from CapitaLand China Holdings grew by 61% to S$526.6 million on the back of higher sales revenue from The Metropolis in Shanghai as well as three Foshan projects, namely, Beau Residences, The Riviera and Riverside Ville. In 2011, CapitaLand China Holdings delivered approximately 3,300 units to home buyers.
CapitaLand Commercial saw a decline in revenue to S$96.7 million as FY2010 included the recognition of a one-off deferred income in respect of Citadines Mount Sophia. Revenue was also lower following the divestment of The Adelphi in January 2011, but partially mitigated by revenue contribution from the Storhub self-storage business which was acquired in July 2010.
Revenue from Ascott fell by 7% to S$377.5 million mainly due to the absence of revenue from the serviced residence properties that had been divested to Ascott Residence Trust last year.
CapitaValue Homes recorded revenue of S$80.3 million in 2011 and this was attributable to revenue recognised for The Vista in Vietnam following its completion in the year. In 2011, 347 units of The Vista were handed over to the home buyers.
Revenue for CapitaLand Financial decreased by 11% to S$103.3 million due to lower acquisition and divestment fees. In FY2010, revenue was boosted by acquisition fees in respect of the injection of 28 serviced residence properties into Ascott Residence Trust and divestment fees in respect of the sale of Starhub Centre and Robinson Point by CapitaCommercial Trust and the sale of Ascott Beijing by Ascott Residence Trust.
CapitaMalls Asia’s revenue for FY2011 was comparable to FY2010 despite the loss of contribution from three Malaysia malls and Clarke Quay that were divested to the REITs in 2010. This was due to rental revenue from the newly acquired Queensbay Mall in Malaysia, higher contributions from the fund management entities and higher property and project management fees.
Australand’s revenue decreased by 8% as it recorded lower sales from development projects, but this decrease was partially mitigated by higher rental income from investment properties.
Performance Overview
2011
35.6%
22.0%
29.5%
6.6% 5.2% 1.1%
2010
48.5%
13.7%
27.1%
6.7% 2.9% 1.1%
Singapore
China (including Hong Kong and Macau)
Australia
Europe
Asia (excluding Singapore and China)
Others
2011 REVENUE BY GEOGRAPHICAL LOCATION Total: S$3.02 billion
2010 REVENUE BY GEOGRAPHICAL LOCATION (RESTATED) Total: S$3.38 billion
<--------------------------------------> Unlisted
<--------> Listed
----------------------------------------------------
<--------------------------------------> Unlisted
<--------> Listed
----------------------------------------------------
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BORROWINGS As at 31 December 2011, the Group’s gross debts stood at S$12.2 billion. With a cash balance of S$6.3 billion, the net debt as at 31 December 2011 was S$5.9 billion as compared to S$3.2 billion as at end 2010. The net debt position as at 31 December 2011 was higher as the Group has utilised its cash as well as drawn on new borrowings to fund its ongoing capital commitments as well as acquisitions made during the year.
Notwithstanding the increased borrowings, the Group net debt equity ratio remained healthy at 0.31 as at 31 December 2011 (2010: 0.18).
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2011
40.4%
34.0%
15.5%
2.4%
2011 TOTAL ASSETS BY GEOGRAPHICAL LOCATION Total: S$35.3 billion
Singapore
China (including Hong Kong and Macau)
Australia
Europe
Asia (excluding Singapore and China)
7.7%
SHAREHOLDERS’ EqUITY As at 31 December 2011, issued and paid-up ordinary share capital (excluding treasury shares) of the Company comprised 4.24 billion shares at S$6.3 billion. The Group’s total reserves increased from S$7.8 billion in December 2010 to S$8.6 billion in December 2011. This increase was mainly contributed by the S$1.06 billion net profit for the year and exchange gains arising from the translation of foreign operations, partially offset by the payment of the 2010 dividends and the purchase of treasury shares during the year. The shareholders’ funds as at end 2011 were S$14.9 billion compared to S$14.0 billion in 2010. With a higher equity, the Group’s net tangible assets per share increased 7% to S$3.40 as at 31 December 2011.
2011 TOTAL ASSETS BY CATEGORY Total: S$35.3 billion
2011
20.0%
30.3%
19.6%
3.0%
17.7%
3.8% 5.6%
Investment Properties
Associates and Joint Ventures
Development Properties for Sale and Stocks
Properties, Plant and Equipment
Cash and Cash Equivalents
Other Non-Current Assets
Other Current Assets
EBIT for CapitaLand Financial saw a decrease of 22% to S$80.0 million primarily due to lower acquisition and divestment fees.
CapitaMalls Asia recorded an EBIT of S$597.0 million which was marginally lower than FY2010’s EBIT of S$603.4 million. This was due to lower development profits, provision for Hong Kong listing expenses and higher staff costs offset by higher fair value gains on investment properties. In FY2010, CapitaMalls Asia’s development profits were boosted by its share of profits of The Orchard Residences as profits from units sold under the deferred payment scheme for this project were recognised in full in FY2010.
Australand achieved an EBIT of S$324.2 million in FY2011 as compared to S$311.9 million in FY2010. The increase was mainly attributable to higher fair value gains from the revaluation of its investment properties coupled with a favourable Australian dollar exchange rate against the Singapore dollar, but partly offset by a write down in the value of certain development projects, mainly in Queensland.
Others comprised the corporate office, Surbana and businesses in Gulf Cooperation Council countries. EBIT in FY2011 amounted to S$9.2 million, mainly attributable to the Group’s share of development profits from Rihan Heights, a project held by an associate in Abu Dhabi, partially offset by higher share of impairment loss for an associate in Bahrain.
DIVIDENDS The Board of Directors is pleased to propose a first and final dividend of 8.0 cents per share, comprising an ordinary dividend of 6.0 cents per share and a special dividend of 2.0 cents per share in respect of the financial year ended 31 December 2011. This amounts to a payout of approximately S$339.5 million based on the number of issued shares (excluding 25,209,000 treasury shares) as at 31 December 2011. The dividends are subject to the shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For FY2010, a first and final dividend of 6.0 cents per share were approved and paid. The said dividends of S$256.2 million were paid in May 2011.
ASSETS The Group’s total assets as at 31 December 2011 were S$35.3 billion, of which assets in Singapore, China and Australia accounted for approximately 90%. The total assets increased by S$3.4 billion or 11% from 2010’s total assets of S$31.9 billion mainly due to the acquisitions and new investments made during the year, in particular, Westgate (Jurong Gateway site), Bedok and Bishan sites in Singapore, Queensbay Mall in Malaysia, Luwan site in Shanghai and Chao Tian Men site in Chongqing as well as fair value gains from the revaluation of the Group’s investment properties portfolio.
As at 31 December 2011, the Group manages S$60.3 billion(2) of real estate assets; firmly establishing our position as one of Asia’s largest real estate companies.
Performance Overview
(2) This refers to the value of all real estate managed by CapitaLand Group entities stated at 100% of the property carrying value.
2011 EBIT BY GEOGRAPHICAL LOCATION Total: S$2.09 billion
2010 EBIT BY GEOGRAPHICAL LOCATION (RESTATED) Total: S$2.58 billion
877
-200
0
200
400
600
800
1000
(3)
S$ million
813
337
16 47
1,241
0
400
600
800
1200
1400 S$ million
200
1000 813
301 176
42 11
Singapore
China (including Hong Kong and Macau)
Australia
Europe
Asia (excluding Singapore and China)
Others
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MANAGEMENT AND SOURCES OF FUNDING The Group strives to maintain a prudent financial structure and actively reviews its cashflow, debt maturity profile and overall liquidity position on an ongoing basis to support the dynamic nature of its businesses. The main sources of the Group’s operating cashflow are derived from residential sales, fee and rental income. As part of its liquidity management to support its funding requirements, investment needs and its growth plans, the Group diversifies its funding sources through capital recycling and putting in place a mix of undrawn banking facilities and capital market programmes to facilitate fund raising at opportunistic windows. The global financial outlook has deteriorated as a result of the European debt crisis, depressed US economy and a slowdown in the Chinese economy. Against this backdrop, the Group continues to maintain strong cash reserves of S$6.3 billion compared to S$7.2 billion last year. The difference was mainly attributed to higher cash outlays as a result of the Group committing to new investments in 2011. The Group’s total gross debt of S$12.2 billion was 18% higher as compared to S$10.4 billion last year.
Consequently, net debt of S$5.9 billion as at December 2011 was higher as the cash balance was also lower due to increase in new investments. However, our net debt equity ratio remains healthy at 0.31 which places the Group in a strong financial position. With a robust balance sheet and prudent capital management, the Group is well positioned to weather the volatility in the markets and well-placed for the next phase of growth.
Finance costs for the Group were S$472.8 million for the year ended 2011. This was about 5% higher compared to S$448.2 million last year. The higher finance costs were due to higher gross debt as well as some marked-to-market losses on interest rate swaps entered into by some business units.
SOURCES OF FUNDING As at year end, 54% of the Group’s total debt was funded from bank borrowings and the balance 46% was raised through capital market bond issuances. The Group continues to seek diversified and balanced sources of funding for its loan portfolio to ensure financial flexibility and mitigate concentration risk. During the year, bank loans increased by about S$1.9 billion mainly as a result of higher secured project financings within the Group for new committed investments.
Bank and Other Loans
Debt Securities
SOURCES OF FUNDING
$9.9b
0
4
6
8
12
14 S$ billion
2
10 $9.8b $10.3b $10.4b
$12.2b
42%
58%
53%
47%
52%
48%
55%
45%
46%
54%
2007 2008 2009 2010 2011
Performance Overview
Treasury Highlights 2011 2010
Bank Facilities And Available Funds Bank facilities available (S$m) 9,961 7,754 Amount utilised for loans (S$m) 6,532 4,651 Available and unutilised (S$m) 3,429 3,103 Cash and fixed deposit balances (S$m) 6,264 7,190 Unutilised facilities and funds available for use (S$m) 9,693 10,293 Debt Securities Capacity Debt securities capacity (S$m) 10,209 9,807 Debt securities issue (net of debt securities purchased) (S$m) 5,659 5,707 Unutilised debt securities capacity (S$m) 4,550 4,100 Interest Cover Ratio Earnings before net interest, tax, depreciation and amortisation (S$m)* 2,242 2,785 Net interest expense (S$m) 392 365 Interest cover ratio (times)* 5.72 7.63 Interest Service Ratio Operating cashflow before interest and tax (S$m) 1,209 1,763 Net interest paid (S$m) 444 393 Interest service ratio (times) 2.72 4.49 Secured Debt Ratio Secured debt (S$m) 2,482 1,616 Percentage of secured debt 20% 16% Debt Equity Ratio Gross debt (S$m) 12,191 10,358 Cash and fixed deposit balances (S$m) 6,264 7,190 Net debt (S$m) 5,927 3,168 Equity (S$m)* 19,239 17,865 Net debt equity ratio (times)* 0.31 0.18 * 2010 comparatives have been restated to take into account the retrospective adjustments relating to INT FRS 115 Agreements for the
Construction of Real Estate.
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INTEREST RATE PROFILE The Group manages its finance cost by maintaining a prudent mix of fixed and floating rate borrowings. As at 31 December 2011 the fixed rate borrowings constituted 66% of the portfolio and the balance 34% were on floating rate basis. As finance cost formed an integral component of the Group’s operating costs, a higher percentage in fixed rate funding would offer protection against unexpected rise in interest rates. On balance, to capitalise on the current low interest rate environment and prepayment flexibility from operational cash surplus, the remaining portfolio was maintained on floating rate basis. In managing the interest rate profile, the Group takes into account the interest rate outlook on its loan portfolio, holding periods of its investment portfolio, certainty of its planned divestments and operating cashflow generated from residential sales.
Net Interest Expense
Net Interest Paid
Interest Cover Ratio
Interest Service Ratio
INTEREST COVER RATIO AND INTEREST SERVICE RATIO
0
500 S$ million
100
2007 2008 2009 2010 2011
200
300
400
0
15
3
6
9
12
Times
$279m
$410m
$468m
$377m
$451m
$365m $393m $392m
$444m13.64
5.50
4.54
7.63
5.72 6.19
3.86
4.60
4.49
2.72
Performance Overview
COMMITMENT OF FUNDING As at end 2011, the Group is able to achieve almost 100% of its funding from committed facilities.
As part of its financial discipline, the Group constantly reviews its asset versus liability match to ensure that a prudent portion of committed funding is put in place to match the investment’s planned holding periods. Amidst the volatile and uncertain global economic climate, committed financing was secured whenever possible to support its committed investments and to ensure that the Group had sufficient financial capacity to support its operations and future growth plans. MATURITY PROFILE S$ billion % of Debt
Due within 1 year* 0.86 7
Between 1 & 2 years 1.15 9
Between 2 & 3 years 1.10 9
Between 3 & 4 years 1.94 16
Between 4 & 5 years 3.82 32
More than 5 years 3.33 27
* Includes long-term debt with remaining loan life of less than a year to maturity.
The Group has proactively built up sufficient cash reserves and credit lines to enable it to meet its short-term debt obligations, support its refinancing needs and pursue opportunistic investments. The Group maintains a strong cash position of S$6.3 billion and unutilised bank lines of about S$3.4 billion. The Group’s average debt maturity profile has improved to 3.8 years as at December 2011 as a result of several bank facilities raised during the year. To ensure financial discipline, the Group constantly reviews its loan profile so as to diversify the refinancing risks, avoid concentration and extend its maturity profile where possible. In reviewing the maturity profile of its loan portfolio, the Group also took into account any divestment or investment plans, interest rate outlook and the prevailing credit market conditions.
AVAILABLE LINES BY NATIONALITY OF BANKS The Group, with operations spanning more than 110 cities in over 20 countries, has built up an extensive and active relationship with a network of more than 30 banks of various nationalities. Diversity has allowed the Group to tap on the strengths and support from the financial institutions in pursuing its strategic growth and presence globally, thus enhancing its competitiveness in core markets and enabling the Group to develop other markets where appropriate.
Singapore
Japan
Australia
Europe/ United Kingdom
Others
AVAILABLE LINES BY NATIONALITY OF BANKS
2011
36%
26%
16%
12%
10%
Fixed
Floating
INTEREST RATE PROFILE
$9.9b
0
4
6
8
12
14 S$ billion
2
10 $9.8b $10.3b $10.4b
$12.2b
25%
75%
25%
75%
34%
66%
28%
72%
34%
66%
2007 2008 2009 2010 2011
INTEREST COVER RATIO AND INTEREST SERVICE RATIO The Interest Cover Ratio (“ICR”) and Interest Service Ratio (“ISR”) was 5.72 and 2.72 respectively. ICR was lower at 5.72 compared to 7.63 last year, primarily attributed to lower development profits, lower portfolio gains and higher impairment charges, partially mitigated by higher fair value gains from the revaluation of investment properties. Net interest expense increased marginally by 7% to S$392 million. ISR declined from 4.49 last year to 2.72 in 2011 due to lower cashflow generated from operations as compared to 2010 which included significant cashflow contributions from a development project which achieved completion.
Committed
Uncommitted
COMMITMENT OF FUNDING
$9.9b
0
4
6
8
12
14 S$ billion
2
10
94%
2007 2008 2009 2010 2011
$9.8b $10.3b $10.4b
$12.2b
97% 100% 99% 99.6%
6% 3% 1%
0.4% $378m
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Awards & Accolades
Corporate Awards CAPITALAND LIMITED • Best Financial Disclosure World Finance Investor Relations
Awards 2011
• Best Investor Relations Website World Finance Investor Relations
Awards 2011
• Best Corporate Governance in Singapore World Finance Corporate Governance Awards 2011
• Best Global Mixed-Use Developer Euromoney Real Estate Awards 2011
• Best Mixed-Use Developer in Asia Euromoney Real Estate Awards 2011
• Best Developer in China Euromoney Real Estate Awards 2011
• Best Investor Relations Silver Award (Companies with S$1 billion
and above in market capitalisation) Singapore Corporate Awards
• Voted Best Managed Company in Singapore FinanceAsia
• Best IR Companies for Property Sector (Buy side)
2nd place Institutional Investor 2011 All-Asia Executive Team Ranking
• Green Builder of the Year 2011 Frost & Sullivan Asia Pacific
Green Excellence Award
• Dow Jones Sustainability Asia Pacific Index 2011/2012
SAM and Dow Jones Indexes
• Included in the Global Real Estate Sustainability Benchmark (GRESB)
• LIEW MUN LEONG Ranked one of 25 Asia’s Most Powerful Businesspeople Fortune Magazine
Voted Best CEO in Singapore FinanceAsia
• OLIVIER LIM Best CFO for Property Sector
(Buy side) 2nd place Institutional Investor 2011 All-Asia
Executive Team Ranking
Voted Best CFO in Singapore FinanceAsia
CAPITALAND CHINA HOLDINGS • 2011 China Outstanding
Corporate Citizen China Association of Social Work
• The Best Integrated Real Estate Developer
Hexun.com
• Gold Award for the Real Estate Enterprise of the Year
Sichuan Daily Newspaper Group & Chengdu Real Estate Management Bureau
CAPITALAND (VIETNAM) HOLDINGS • BCI Asia Top 10 Developers
Award – Vietnam BCI Asia Top 10 Awards 2011
• Golden Dragon Award 2011 Vietnam Economic Times
• Saigon Times Top 40 – Green Values 2010
The Saigon Times
CAPITAMALLS ASIA • Best Retail Developer in Asia Euromoney Real Estate Awards 2011
• Best Retail Developer in China Euromoney Real Estate Awards 2011
• Best Retail Developer in Singapore Euromoney Real Estate Awards 2011
• Best for Investor Relations Asiamoney Corporate Governance Poll 2011
CAPITAMALL TRUST • Included in FTSE4Good Index
• Included in the Global Real Estate Sustainability Benchmark (GRESB)
CAPITARETAIL CHINA TRUST • Best Annual Report –REITs and
Business Trusts (Gold Award) Singapore Corporate Awards 2011
CAPITACOMMERCIAL TRUST • Included in FTSE4Good Index
THE ASCOTT LIMITED • Best Serviced Apartment Company Business Traveller UK Awards 2011
• Best Serviced Residence Brand in Asia-Pacific
Business Traveller Asia-Pacific Awards 2011
• Best Serviced Residence in Asia-Pacific
DestinAsian Readers’ Choice Awards 2011
• Best Serviced Residence Operator TTG Travel Awards 2011
• Best Serviced Residence Operator in China
TTG China Travel Awards 2011
• Best Serviced Residence Brand in China
Business Traveller China Awards 2011
• Best Serviced Residence Group TravelWeekly China Travel &
Meetings Industry Awards 2011
• China’s Most Popular Serviced Residence Brand
21st Century Business Herald & Business Travel’s Golden Pillow Awards 2011
• Best Residence Operator The Centre of Asia Hotel Forum’s
China Hotel Starlight Awards 2011
Commercial development SINGAPORE ONE GEORGE STREET • Green Mark GoldPLUS
BCA Awards Building and Construction Authority,
Singapore
residential developments SINGAPORE THE NASSIM • Green Mark GoldPLUS BCA Awards Building and Construction Authority,
Singapore
THE METROPOLITAN CONDOMINIUM • Construction Excellence
Award 2011 BCA Awards Building and Construction Authority,
Singapore
THE SEAFRONT ON MEYER • Gold Award (Implementation Residential) LIAS Awards of Excellence 2011 Landscape Industry Association
of Singapore
• Silver Award (Residential Design Category) SILA Professional Design Award 2011 Singapore Institute of
Landscape Architects
RIVERGATE • Gold Award (Residential Design Category) SILA Professional Design Award 2011 Singapore Institute of
Landscape Architects
CHINA DOLCE VITA, GUANGZHOU • Guangzhou Habitat Property
of the Year Guangzhou Real Estate Industry
Association
I-WORLD, HANGZHOU • The Highly Commended
Apartment of China The International Property Awards
SUMMIT RESIDENCES, NINGBO • The Highly Commended
Architecture Multiple Residence of China
The International Property Awards
AUSTRALIA BOTANICA • Award for Excellence
in the category of Masterplanned Development
UDIA NSW Awards 2011
PORT COOGEE • Award for Excellence in the
category of Presidents Award UDIA WA Awards 2011
• Award for Excellence in the category of Residential Development Over 250 Lots
UDIA WA Awards 2011
• Award for Excellence in the category of Environmental Excellence
UDIA WA Awards 2011
VIETNAM BEAU RIVAGE • Green Mark Certified (Provisional) BCA Awards Building and Construction Authority,
Singapore
• Best Residential High-rise Development (5-star)
Asia Pacific Property Awards 2011
Corporate Awards (cont'd) THE ASCOTT LIMITED (cont'd) • China’s Outstanding Serviced Apartment Brand Hotel Industry Development
Summit 2011
• Saigon Times Top 40 – Green Values 2010
The Saigon Times
• Golden Dragon Award 2010 Vietnam Economic Times
ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED • Best Investment Fund Manager
(South Eastern Asia) World Finance Real Estate Awards 2011
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Awards & Accolades
Mixed developments SINGAPORE ORCHARD TURN DEVELOPMENTS PTE LTD • Design and Engineering Safety
Excellence Award 2011 BCA Awards Building and Construction Authority,
Singapore
Serviced residences SINGAPORE ASCOTT RAFFLES PLACE SINGAPORE • Best Serviced Residence
in Asia-Pacific (2nd) Business Traveller Asia-Pacific
Awards 2011
CHINA ASCOTT MAILLEN SHENZHEN • China’s Outstanding
Serviced Apartment Hotel Industry Development
Summit 2011
ASCOTT HUAI HAI ROAD SHANGHAI • Best Serviced Residence CBN Channel’s Top Realtor
quality Award
AUSTRALIA CITADINES ON BOURKE MELBOURNE • Best Suite/Apartment Hotel Australian Hotels Association
National Awards for Excellence 2011
INDONESIA ASCOTT JAKARTA • Indonesia Leading Serviced
Apartment and Suite Indonesia Travel & Tourism
Awards 2011/2012
JAPAN CITADINES SHINJUKU TOKYO • Top 25 Hotels in Japan TripAdvisor Travelers’ Choice 2011
THAILAND ASCOTT SATHORN BANGKOK • Best Serviced Residence
in Asia-Pacific (1st) Business Traveller Asia-Pacific
Awards 2011
RAFFLES CITY SINGAPORE • Green Mark Gold BCA Awards Building and Construction Authority,
Singapore
RAFFLES CITY SINGAPORE (SILVER OAK LTD.) • Securitisation Deal of the
Year 2011 IFR Asia Awards
• Asia-Pacific Securitisation Deal of the Year 2011
IFR Global Awards
• Best Cross-Border Securitisation The Asset Triple A Regional Deal
Awards 2011 Denotes listed entities
Denotes entities under the management of CapitaLand China Executive Committee
The total market capitalisation of the nine public listed entities in the Group, net of common holdings, is S$20.5 billion as at 30 December 2011.
The Group manages S$60.3 billion of real estate assets.
Non-Retail Fund & REIT Management
Offices
Shopping Malls
Residential Singapore
Value Housing
Serviced Residences
Financial Services
China
Australia
Consultancy Services & Township Development
Shopping Malls SINGAPORE ION ORCHARD • Best Shopping Experience 2011 Singapore Tourism Board
JCUBE • Green Mark Platinum BCA Awards Building and Construction Authority,
Singapore
THE ATRIUM@ORCHARD • Green Mark Gold BCA Awards Building and Construction Authority,
Singapore
BUGIS JUNCTION • Green Mark Gold BCA Awards Building and Construction Authority,
Singapore
CHINA CAPITAMALL TIANFU, CHENGDU • Green Mark Gold (Provisional) BCA Awards Building and Construction Authority,
Singapore
CAPITAMALL WUSHENG, WUHAN • Green Mark Gold (Provisional) BCA Awards Building and Construction Authority,
Singapore
CAPITAMALL JINNIU – PHASE II, CHENGDU • Green Mark Certified (Provisional) BCA Awards Building and Construction Authority,
Singapore
CAPITAMALL XUEFU, HARBIN • Green Mark Certified (Provisional) BCA Awards Building and Construction Authority,
Singapore
CAPITAMALL AIDEMENGDUN, HARBIN • Green Mark Certified BCA Awards Building and Construction Authority,
Singapore
MALAYSIA GURNEY PLAZA, PENANG • Green Mark Gold BCA Awards Building and Construction Authority,
Singapore
JAPAN VIVIT SqUARE, TOKYO • CASBEE ’A’ Rating Institute for Building Environmental
and Energy Conservation, Japan
INDIA THE CELEBRATION MALL, UDAIPUR • 25 Best Shopping Malls in India
in 2011 Retailer Magazine
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350 units of the 450 units released were sold, a testament to the strong appeal of its unique and attractive attributes. Within the first three days of its launch, over 80% of the total 583 units were sold.
Launched in 2009, the 1,040-unit The Interlace designed by internationally renowned Office for Metropolitan Architecture is about 70% sold. d’Leedon, located at Farrer Road and featuring Zaha Hadid’s visionary design, also continued to see steady sales.
LOOKING AHEAD In view of the large pool of external liquidity and strong buying interest from abroad which may potentially increase risk to the local economy and banking system, the Singapore government imposed the Additional Buyer’s Stamp Duty (ABSD) on the purchase of residential properties by certain categories of buyers with effect from 8 December 2011. Its objective is to promote a sustainable residential property market where prices move in line with economic fundamentals.
CapitaLand expects homebuying sentiments to be cautious in view of the Government measures and uncertain global economic outlook. The Group’s financial strength will enable CapitaLand to time launches according to market conditions.
homebuying sentiments are
likely to be cautious in view of
the Government measures and
uncertain global economic outlook
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CapitaLand Residential Singapore
The Singapore residential market remained resilient in 2011 with home sales recorded at 15,904 units, just under last year’s record-breaking 16,292 units. The prices of residential homes continued to rise, albeit at a slower pace compared with the previous year. Going forward, we expect a more subdued outlook on the demand and prices of residential homes in response to the year-end cooling measures introduced by the Singapore Government, as well as the economic uncertainty surrounding the European sovereign debt crisis.
TIMELY ACqUISITIONS AND DEVELOPING WELL-DESIGNED HOMES CapitaLand continued to entrench its presence in the Singapore residential market. Two quality sites with strong location attributes were acquired at the start of the year to replenish its development pipeline. These sites are located at Marine Point and Bishan Central. With their distinctive but practical designs and good quality finishes, CapitaLand’s well located homes continued to attract buyer interest. This contributed to total sales of 844 homes in the year with sales value amounting to S$1.35 billion.
The Bishan Central development designed by internationally renowned architect, Moshe Safdie, was unveiled during the year. Comprising 509 units spread across two 38-storey towers linked by three bridging “sky gardens”, the revolutionary design will transform Bishan’s urban residential landscape.
Bedok Residences, a mixed development integrated with public transport and a shopping mall was launched in November 2011. On the first day of launch,
15,904 units The Singapore residential market remained resilient in 2011 with home sales recorded at 15,904 units, almost matching last year’s record-breaking 16,292 units
1 2 3
4 5 6
7 8
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2011
Fy 2010
0 300 600 900 1200 1500
774
1,285
revenue and EBIT were higher for Fy2010 as units sold under deferred Payment Scheme for The Seafront on Meyer and Latitude were recognised in full upon their completion in 3Q2010.
EBIT (S$m) FY
2011
Fy 2010
0 100 200 300 400 500
327
514 600
1 WONG HEANG FINE CEO CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
CEO CAPITALAND ILEC PTE. LTD.
2 WONG JEN LAI CHIEF INVESTMENT OFFICER CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
3 LEE YEW KWUNG SENIOR VICE PRESIDENT, PROJECT DEVELOPMENT & MANAGEMENT CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
4 COLIN WONG SENIOR VICE PRESIDENT, MARKETING & SALES CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
5 ONG SIM LIAN SENIOR VICE PRESIDENT, DESIGN MANAGEMENT CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
6 KU WEI SIONG SENIOR VICE PRESIDENT CAPITALAND GCC HOLDINGS PTE. LTD.
7 ANSON LIM VICE PRESIDENT, INVESTMENT CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
8 TAN SEO LING VICE PRESIDENT, FINANCE CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
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As the lead development manager, CapitaLand plans to build a residential estate comprising low-density and high-rise homes. In the third quarter of the year, Capitaland secured a prime residential site in Gongshu District, Hangzhou, to develop mid- to high-end homes. At the end of the year, CapitaLand and CapitaMalls Asia together with Singbridge Holdings (a unit of Temasek Holdings) were awarded a prime site in the heart of Yuzhong District in Chongqing. The project will be developed into the eighth Raffles City in China, including a shopping mall and eight towers for residential, office, serviced residence and hotel use.
ATTRACTIVE RAFFLES CITY PORTFOLIO The year saw strong retail growth spurred by rapid urbanisation and demand for organised retailing. CapitaLand’s Raffles City portfolio is one of the largest mixed used branded developments with eight properties across China. The completed Raffles City developments in Shanghai and Beijing achieved strong rental growth. Raffles City Chengdu and Raffles City Ningbo are on track for completion in phases from 2012. Both projects have received strong interest from prospective tenants during pre-leasing. Construction of another four Raffles City developments is underway.
LOOKING AHEAD As a long-term player in China, CapitaLand remains positive on the prospects of its core real estate market. The Chinese government has ensured a more stable property market through a series of cooling measures. With a balanced portfolio and strong balance sheet, CapitaLand is well-poised to further strengthen its position in China.
with a balanced portfolio and
strong balance sheet, CapitaLand
is well-poised to further
strengthen its position in China
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CapitaLand China
Over the years, CapitaLand has grown into one of the top foreign real estate companies in China with a portfolio consisting of homes, office buildings, shopping malls, serviced residences and mixed developments. Its multi-sector and multi-geography business model continually provides a diversified earnings base. STEADY RESIDENTIAL SALES The short-term volatility in the market as a result of credit tightening and the government’s measures to restrict the purchase of residential properties had affected real estate companies in general. Nevertheless, CapitaLand projects are well-positioned to ride the market with steady residential sales performance. This year, CapitaLand sold about 1,500 residential units across Beijing, Shanghai, Guangzhou, Tianjin, Chengdu, Hangzhou, Kunshan and Foshan, with a total sales value of over RMB3.1 billion (S$0.6 billion). New launches included Imperial Bay in Hangzhou, La Cite in Foshan, Dolce Vita in Guangzhou, International Trade Centre in Tianjin and The Paragon in Shanghai. New units at The Loft in Chengdu, The Metropolis in Kunshan, Riverside Ville and Beau Residences in Foshan and Beaufort in Beijing were also released for sale. GOING DEEP INTO KEY CHINESE CITIES With the commitment to broaden and deepen pipelines in the core market of China, CapitaLand continues to explore investment opportunities. In early 2011, CapitaLand expanded its portfolio in Guangzhou through acquiring a 575,787-square metre waterfront site in Panyu District.
RMB3.1b This year, CapitaLand sold about 1,500 residential units across Beijing, Shanghai, Guangzhou, Tianjin, Chengdu, hangzhou, Kunshan and Foshan, with a total sales value of over rMB3.1 billion (S$0.6 billion)
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with the commitment to broaden and deepen pipelines in the core market of China, CapitaLand continues to explore investment opportunities
1 JASON LEOW CEO CAPITALAND CHINA HOLDINGS PTE LTD
2 LUCAS LOH DEPUTY CEO CAPITALAND CHINA HOLDINGS PTE LTD (From 6 February 2012)
3 CHAN BOON SENG DEPUTY CEO CAPITALAND CHINA HOLDINGS PTE LTD (From 6 February 2012)
4 STEVE GONG CHIEF FINANCIAL OFFICER CAPITALAND CHINA HOLDINGS PTE LTD
5 CHIN PHEI CHEN CHIEF CORPORATE OFFICER CAPITALAND CHINA HOLDINGS PTE LTD
6 HAN WEI REGIONAL GENERAL MANAGER, NORTH CHINA CAPITALAND CHINA HOLDINGS PTE LTD
7 HOON TECK MING REGIONAL GENERAL MANAGER, SOUTHWEST CHINA CAPITALAND CHINA HOLDINGS PTE LTD
revenue was higher by 61% as more development units
were being delivered to home buyers. Fy2011 EBIT was
impacted by lower fair value gains from revaluation of
investment properties and lower portfolio gains.
REVENUE (S$m)
600 400 300 200 100 0
527
327
FY 2011
Fy 2010
EBIT (S$m)
750 600 450 300 150 0
424
649
FY 2011
Fy 2010
500
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Westgate is well-connected by public transport and is one of the upcoming regional commercial centres in the western part of Singapore. CCL owns 20% in the development, jointly with CapitaMalls Asia and CapitaMall Trust which own 50% and 30% respectively. The Westgate Tower (office) is scheduled for completion in 2014.
EXPANDING STORHUB SELF-STORAGE BUSINESS CCL has a 62% interest in a joint venture with Hersing Corporation Ltd in the self-storage business under the StorHub brand. Since the joint venture’s inception in August 2010, the number of self-storage facilities has grown from five to seven, with lettable area of approximately 432,000 square feet. This includes its first self-storage facility in Guangzhou, China, to be operational in the first half of 2012. In addition, StorHub has signed an agreement to acquire its eighth facility at Admiralty Road which will bring its total lettable area for self-storage use to 459,000 square feet.
LOOKING AHEAD The first half of 2011 saw improving sentiments which were reversed by the onset of the EuroZone debt crisis in the latter half of the year. The Singapore office market was not spared from the global economic uncertainty and the year ended on a cautious note. Going forward, CCL will continue with its active portfolio management strategy and seek investments at the opportune time.
432,000 square feet
Self-storage facilities has grown from
five to seven, with lettable area of approximately
432,000 square feet
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Commercial
In 2011, CapitaLand continued its active portfolio management strategy to unlock the value of non-core assets and recycle the capital into investment opportunities for future growth.
UNLOCKING VALUE OF NON-CORE ASSETS To enhance capital productivity, CapitaLand Commercial Limited (CCL) divested its non-core assets, which included a high-tech industrial building, Corporation Place for S$99.0 million, of which CCL owned 75%; and its 40% stake in TCC Capital Land Limited for THB2,340.8 million (approximately S$97.1 million).
INVESTING FOR FUTURE GROWTH For future growth, CCL took part in two office projects in Singapore during the year, investing about S$1 billion (based on its proportionate stakes) to be funded through cash and debt. The first project is the redevelopment of Market Street Car Park into a Grade A office development at an estimated cost of S$1.4 billion. The project, named CapitaGreen, is a 50:40:10 joint venture between CCL, CapitaCommercial Trust and Mitsubishi Estate Asia respectively. CapitaGreen is strategically located within Raffles Place and near to Marina Bay. Designed by internationally-acclaimed architect Toyo Ito, CapitaGreen is expected to be completed in the fourth quarter of 2014.
The second project is a S$1.5 billion mixed development, named Westgate, at Jurong Gateway, comprising a retail shopping mall and an office tower.
9 CHEW PEET MUN HEAD, INVESTMENT AND ASSET MANAGEMENT CAPITALAND COMMERCIAL LIMITED
10 EDWARD BIN FINANCIAL CONTROLLER CAPITALAND COMMERCIAL LIMITED
11 DAWN LAI VICE PRESIDENT, MARKETING & LEASING CAPITALAND COMMERCIAL LIMITED
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1 CHONG LIT CHEONG CEO CAPITALAND COMMERCIAL LIMITED
2 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
3 CHAN SAY YEONG MANAGING DIRECTOR, MALAYSIA CAPITALAND COMMERCIAL LIMITED
4 POON HIN KONG SENIOR VICE PRESIDENT, DESIGN & DEVELOPMENT CAPITALAND COMMERCIAL LIMITED
5 VINCENT WONG GENERAL MANAGER CAPITALAND INDIA PTE LTD
6 SASAKI JUNGO COUNTRY DIRECTOR CAPITALAND JAPAN KABUSHIKI KAISHA
7 HENG TZE KIANG GENERAL MANAGER STORHUB MANAGEMENT PTE LTD
8 MICHELLE KOH SENIOR VICE PRESIDENT, LEGAL & SECRETARIAT CAPITALAND COMMERCIAL LIMITED
S$1b Invested about S$1 billion in office projects in Singapore
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2011
Fy 2010
0 50 100 150 200 250
97
143
Lower revenue year-on-year, due to the recognition of a one-off deferred income and divestment, mitigated by contribution from the self-storage business. EBIT decreased, due to loss of contribution from the Thai joint venture, lower portfolio gains from divestments, and foreign exchanges losses, mitigated by lower impairment losses.
EBIT (S$m) FY
2011
Fy 2010
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HONGKOU PLAZA ShAnGhAI, ChInA
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CMA opened a total of four malls in 2011 – three in China (Minhang Plaza and Hongkou Plaza in Shanghai, and CapitaMall Crystal in Beijing) and one in India (The Celebration Mall, Udaipur).
A major milestone for CMA in 2011 was its secondary listing on the Main Board of the Hong Kong Stock Exchange on 18 October. This is a strategic move that will widen its investor base, provide greater capital management flexibility and raise its profile in China.
CMA also converted its CapitaRetail China Development Fund to an income fund and upsized the fund by 50% to US$900.0 million (S$1.1 billion).
Continuing to build its financial strength through prudent capital management, CMA issued two series of retail bonds in January 2011 and 2012 through its wholly-owned subsidiary, CapitaMalls Asia Treasury Limited, raising a total of S$600.0 million with both bond offerings oversubscribed.
LOOKING AHEAD 2012 will be an inflection point for CMA, with more than half of the net asset value of its China malls being operational. Focus will be on delivering the opening of nine new malls and ramping up its existing malls. With its strong balance sheet and low gearing, CMA remains ready and flexible to capitalise on selective acquisitions.
Inflection point for CMA in 2012
is due to more than half of its
assets in China in terms of nAV
being operational
revenue rose slightly despite divesting four malls in Singapore
and Malaysia into rEITs.
REVENUE (S$m)
500 400 300 200 100 0
246
245
FY 2011
Fy 2010
EBIT (S$m)
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597
603
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Fy 2010
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CapitaMalls Asia
Despite the challenging economic environment, Asian economies are still growing, with China outpacing the growth of many other countries. Retail sales remained healthy in CapitaMalls Asia’s (CMA) key markets in 2011.
As at end 2011, CMA had interests in and managed a portfolio of 97 shopping malls across 51 cities in Singapore, China, Malaysia, Japan and India, with a total property value of approximately S$29.4 billion and a total gross floor area of approximately 87.4 million sq ft. Of these, 72 malls were operational while the other 25 will open over the coming years.
EXPANDING OUR PLATFORM FOR GROWTH In 2011, CMA committed a total of about S$3.4 billion in new investments, exceeding its target of S$2.0 billion. These were for acquisitions of stakes in five malls – one in Singapore (Westgate at Jurong Gateway, Singapore’s largest regional centre); and four in China (increasing its stakes in Minhang Plaza and Hongkou Plaza in Shanghai to 100%, together with its associates; a joint-venture to develop the largest shopping mall in Suzhou; and a prime site for a landmark shopping mall in Chongqing, as part of a Raffles City development).
Acquisitions by CMA’s three REITs in 2011 include Iluma in Singapore by CapitaMall Trust; CapitaMall Minzhongleyuan in Wuhan, China by CapitaRetail China Trust; and East Coast Mall in Kuantan, Malaysia by CapitaMalls Malaysia Trust.
S$3.4b Committed S$3.4 billion in investments for five acquisitions in 2011, exceeding its target of S$2.0 billion
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5 6 7 8
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S$456m Profit after tax and minority interests
1 LIM BENG CHEE CEO CAPITAMALLS ASIA LIMITED
2 NG KOK SIONG CHIEF FINANCIAL OFFICER CAPITAMALLS ASIA LIMITED
3 SIMON HO CEO CAPITAMALL TRUST MANAGEMENT LIMITED
4 SIMON YONG CHIEF DEVELOPMENT OFFICER CAPITAMALLS ASIA LIMITED
5 WILSON TAN DEPUTY CEO CAPITAMALL TRUST MANAGEMENT LIMITED (From 4 February 2012)
SENIOR VICE PRESIDENT CAPITAMALLS ASIA LIMITED (Until 3 February 2012)
6 LOCK WAI HAN CEO, CHINA CAPITAMALLS ASIA LIMITED
7 TONY TAN TEE HIEONG CEO CAPITARETAIL CHINA TRUST MANAGEMENT LIMITED
8 SHARON LIM CEO CAPITAMALLS MALAYSIA REIT MANAGEMENT SDN. BHD.
9 TOH KIM SAI DEPUTY CHIEF DEVELOPMENT OFFICER CAPITAMALLS ASIA LIMITED
10 KEK CHEE HOW COUNTRY HEAD, JAPAN CAPITAMALLS ASIA LIMITED
11 KEVIN CHEE COUNTRY HEAD, INDIA CAPITAMALLS ASIA LIMITED
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In addition, Ascott increased its financial capacity to capture new growth opportunities through divesting three properties in China and India with proceeds of over S$270 million.
ENHANCED CUSTOMER EXPERIENCE AND BRAND VALUE To enhance customer experience, brand value and asset yield, Ascott invested S$70 million to refurbish 15 properties across Asia and Europe. Ascott’s strong branding, product and service excellence enabled it to garner more than 40 prestigious awards including ‘Best Serviced Residence Brand’ at the Business Traveller Asia-Pacific Awards and ‘Best Serviced Residence Operator’ at the TTG Travel Awards.
LOOKING AHEAD Ascott is on track to achieve its target of 40,000 apartment units globally by 2015. It will continue to seek new investments in Singapore, China, India, Vietnam and United Kingdom, and grow its fee-based income through securing more management contracts. At the same time, Ascott will continue with its asset enhancement initiatives to strengthen its brand and improve its service standards to achieve higher yields.
S$70m Enhanced customer
experience, brand value and asset
yield by investing S$70 million to refurbish
15 properties across Asia and Europe
Garnered more than 40 prestigious awards for strong branding, product and service
excellence
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The Ascott Limited
In 2011, CapitaLand’s serviced residence business unit, The Ascott Limited (Ascott), continued to strengthen its leadership position and competitive edge by expanding its global presence and enhancing customer experience and brand value.
STRENGTHENED PIPELINE, EXPANDED OPERATIONS, INCREASED FINANCIAL CAPACITY Through a series of investments and management contracts, Ascott expanded its portfolio to over 29,000 apartment units in 214 properties across more than 70 cities. It invested over S$665 million to develop 11 properties with more than 2,000 apartment units in nine cities – Ahmedabad, Bangalore, Chennai and Hyderabad in India; Shanghai in China; Hai Phong in Vietnam; Frankfurt and Hamburg in Germany; and Paris in France. With strong international branding and award-winning hospitality capabilities, Ascott secured management contracts for 23 properties with over 4,000 apartment units in 20 cities including Beijing, Chengdu, Foshan and Macau SAR in China; Cyberjaya, Nusajaya and Petaling Jaya in Malaysia; Hanoi and Ho Chi Minh City in Vietnam; and Muscat in Oman.
Ascott also commenced operations in six new properties with more than 700 apartment units in Shenzhen and Xi’an in China; Bangalore and Chennai in India; Hanoi in Vietnam; and Paris in France.
1 LIM MING YAN CEO THE ASCOTT LIMITED (Until 5 February 2012)
2 CHONG KEE HIONG CEO THE ASCOTT LIMITED (From 6 February 2012)
CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (Until 5 February 2012)
1 2
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9 10
Over S$665m Invested over S$665 million to develop 11 properties and secured management contracts for 23 properties
REVENUE (S$m) FY
2011
Fy 2010
0 100 200 300 400 500
377
407
revenue and EBIT for Fy 2011 were lower mainly due to the divestment of 28 properties to Ascott reit in October 2010.
EBIT (S$m) FY
2011
Fy 2010
0 50 100 150 200 250
148
173
4
3 LEE CHEE KOON DEPUTY CEO THE ASCOTT LIMITED (From 6 February 2012)
MANAGING DIRECTOR, NORTH ASIA THE ASCOTT LIMITED
4 RONALD TAY CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (From 27 February 2012)
CHIEF INVESTMENT OFFICER THE ASCOTT LIMITED (Until 5 February 2012)
5 VINCENT WEE DEPUTY CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED
MANAGING DIRECTOR, INDIA & GULF COOPERATION COUNCIL THE ASCOTT LIMITED (From 6 February 2012)
6 ALFRED ONG MANAGING DIRECTOR, SOUTHEAST ASIA & AUSTRALIA THE ASCOTT LIMITED
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7 TAN CHOON KWANG MANAGING DIRECTOR, EUROPE THE ASCOTT LIMITED
8 TONY SOH CHIEF CORPORATE OFFICER THE ASCOTT LIMITED
9 WONG HOOE WAI CHIEF DEVELOPMENT OFFICER THE ASCOTT LIMITED
10 YEONG LAI MENG SENIOR VICE PRESIDENT, FINANCE THE ASCOTT LIMITED
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Together, they offer over 2.8 million square metres of prime commercial floor space, valued at an aggregate value of S$12 billion.
CapitaLand expanded its Raffles City footprint to Chongqing in 2011, making it the eighth of such mixed developments in China. CapitaLand, together with CapitaMalls Aisa (CMA) and Singbridge Holdings (a unit of Temasek Holdings) will jointly develop the magnificent Chao Tian Men site into a landmark development featuring a shopping mall and eight towers for residential, office, serviced residence and hotel use. The project is designed by star architect Mosche Safdie and is slated for completion in phases from 2017.
DISTINCTIVE SINGAPORE PORTFOLIO In Singapore, CapitaLand’s mixed developments can be seen stretching along the prime Orchard Road shopping belt from ION Orchard and The Orchard Residences on one end, to Plaza Singapura and The Atrium@Orchard, and Raffles City Singapore on the other end. The Group’s mixed developments portfolio in Singapore was enhanced with the securing of an integrated shopping mall and office tower project at Jurong Gateway from URA. The development, named Westgate, will be jointly developed by CapitaLand together with CMA and CapitaMall Trust, into a new landmark in Jurong. The shopping mall is earmarked for completion by Christmas 2013, while the office tower will be ready for occupation in 2014.
MOVING FORWARD CapitaLand intends to focus on its development capability in the mixed development product segment when seeking new acquisitions in Singapore and China. The Group will be leveraging on the Raffles City brand and value proposition to secure more investments in key gateway cities in China en route to fulfilling its dream of building 10 Raffles City developments in the mainland.
CapitaLand’s distinct advantage is its ability to integrate various property types seamlessly into one integrated complex or mixed development. Over the years, the Group has enjoyed much success through the development of many iconic mixed use projects in Singapore and China. This success stems from CapitaLand’s understanding of design, construction and operational needs of the different real estate components.
RICH EXPERIENCE IN MIXED DEVELOPMENTS Our experience in mixed development projects dates back to 1986 when CapitaLand started with Raffles City Singapore, to recent developments such as Wilkie Edge, ION Orchard and The Orchard Residences, Bedok Residences and the integrated shopping mall below, The Star and Westgate in Singapore. The successful launch of Bedok Residences in November 2011 can be attributed in part to the experience garnered from the development of ION Orchard and The Orchard Residences.
GROWING THE RAFFLES CITY FRANCHISE IN CHINA The highly successful Raffles City brand has been synonymous with architectural excellence and a showcase of CapitaLand’s development competence. Each Raffles City development is defined by its prime city location, an impressive design conceptualised by a world-famous architect and a seamless integration of real estate functions such as a shopping mall, an office tower, a hotel and/or a serviced residence into one cohesive development.
CapitaLand has a portfolio of nine Raffles City developments in Singapore and China. Eight of the nine Raffles City developments are in China – with two already operational, two slated to commence operations in 2012 and the remaining under various stages of development. The current eight Raffles City projects are in Shanghai, Beijing, Chengdu, Hangzhou, Ningbo, Shenzhen and Chongqing.
The highly successful raffles City brand has been synonymous with architectural excellence and a showcase of CapitaLand’s development competence
CapitaLand expanded its
raffles City footprint to
Chongqing in 2011, making it the eighth
of such mixed developments
in China
RAFFLES CITY CHANGNING ChInA
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1 LIM MING YAN CHIEF OPERATING OFFICER CAPITALAND LIMITED CEO THE ASCOTT LIMITED (Until 5 February 2012)
2 WONG HEANG FINE CEO CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
CEO CAPITALAND ILEC PTE. LTD.
3 CHONG LIT CHEONG CEO CAPITALAND COMMERCIAL LIMITED
4 JASON LEOW CEO CAPITALAND CHINA HOLDINGS PTE LTD
5 LIM BENG CHEE CEO CAPITALMALLS ASIA LIMITED
6 CHONG KEE HIONG CEO THE ASCOTT LIMITED (From 6 February 2012)
CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (Until 5 February 2012)
7 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
8 SIMON HO CEO CAPITALMALL TRUST MANAGEMENT LIMITED
4 5 6
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BUILDING AND DESIGN CAPABILITIES To accelerate the value homes development cycle and to achieve cost efficiency, CapitaValue Homes adopts standardised designs, replicable floor plans and industrialised construction methods. Construction works at PARCSpring is ongoing while the approximately 2,500-unit Lakeside located in Caidian District, Wuhan, China, will start construction in the first quarter of 2012.
STRONG DELIVERY TRACK RECORDS Notwithstanding the current challenging economic situation in Vietnam, CapitaLand completed its first mid-high end residential project in Vietnam, The Vista, on schedule in September 2011. The Vista is located within the prime residential precinct in Ho Chi Minh City's District 2.
LOOKING AHEAD CapitaValue Homes will continue to cautiously seek good investment opportunities amidst the global economic uncertainties. It will expand its value homes footprint in the key cities of China and Vietnam. CapitaValue Homes targets to build 10,000 to 15,000 value homes annually over the next three years.
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Target to build 10,000 to 15,000
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Asia continues to be spurred by rapid urbanisation and the aspirations of the growing middle class. CapitaValue Homes will capitalise on this strong growth potential and build homes that are value for money and cater to the essential needs and affordability of genuine homebuyers in the mass market in China and Vietnam.
DOUBLED VALUE HOMES PIPELINE During the year, CapitaValue Homes more than doubled its pipeline of value homes to over 6,600 units in the key cities of China and Vietnam. Of these, approximately 5,000 units are in China.
CapitaValue Homes acquired two sites in Shanghai’s Pudong District and Guangzhou’s Panyu District in China. The sites, totalling 156,627 square metres in land area, will be developed into over 2,400 value homes in the two first-tier cities.
In Vietnam, CapitaValue Homes partnered Khang Dien to jointly develop PARCSpring into 974 value homes located at the fringe of the city centre in District 2, Ho Chi Minh City. During the year, it also partnered Quoc Cuong to jointly develop about 800 value homes in Binh Chanh District, a new urban area in Ho Chi Minh City. Both projects have obtained Investment Certificates and PARCSpring is launch-ready.
6,600 value homes
More than doubled pipeline to over 6,600 value homes in China and Vietnam
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2,400 value homes
Acquired two sites in Shanghai and Guangzhou to build over 2,400 value homes
1 CHEN LIAN PANG CEO CAPITAVALUE HOMES LIMITED
2 YIP HOONG MUN DEPUTY CEO, VIETNAM CAPITAVALUE HOMES LIMITED
3 LEOW SIEW BENG CHIEF CORPORATE OFFICER CAPITAVALUE HOMES LIMITED
4 qIAN YI qI MANAGING DIRECTOR, CHINA CAPITAVALUE HOMES LIMITED
5 POON HIN KONG CHIEF OF DESIGN MANAGEMENT CAPITAVALUE HOMES LIMITED
6 YOONG VOON SIN GENERAL MANAGER, CENTRAL CHINA CAPITAVALUE HOMES LIMITED
7 LIM WIE SHAN GENERAL MANAGER, SOUTH VIETNAM CAPITAVALUE HOMES LIMITED
8 VIVIAN MIAO GENERAL MANAGER, INVESTMENT & CORPORATE AFFAIRS, SOUTH CHINA CAPITAVALUE HOMES LIMITED
9 TAN MING CHIAN GENERAL MANAGER, OPERATIONS, SOUTH CHINA CAPITAVALUE HOMES LIMITED
10 LIM HUA TIONG VICE PRESIDENT, FINANCE & CORPORATE SERVICES CAPITAVALUE HOMES LIMITED
higher revenue due to maiden recognition from The Vista in
Vietnam. reduced losses due to profit from The Vista partially offset
by higher start up costs in China.
REVENUE (S$m)
100 80 60 40 20 0
80
0
FY 2011
Fy 2010
EBIT (S$m)
-25 -20 -15 -10 -5 0
-13
-21
FY 2011
Fy 2010
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As part of its portfolio reconstitution strategy, CapitaCommercial Trust (CCT) unveiled plans to redevelop Market Street Car Park into a Grade A office tower. The development is a joint venture where CCT owns 40% interest. CCT successfully secured S$450 million committed facilities and issued S$200 million medium term notes for its S$570 million refinancing due in March 2012.
CCT and CMT completed the refinancing of S$964 million Raffles City Singapore (jointly owned by both REITs) debt via a S$800 million Aaa-rated secured notes which was 1.7 times subscribed and S$164 million bank borrowings in June 2011.
Ascott Residence Trust’s (Ascott Reit) asset size of S$2.87 billion as at 31 December 2011 comprises 65 properties with 6,600 units in 23 cities across 12 countries in Asia Pacific and Europe. During the year, Ascott Reit completed the yield accretive acquisition of 60% interest in Citadines Shinjuku Tokyo, adding another quality serviced residence to its Japan portfolio.
CapitaRetail China Trust (CRCT), acquired New Minzhong Leyuan Mall in Wuhan, central China, in June 2011. The acquisition, funded mainly through a placement of 59.8 million new units, expanded CRCT’s portfolio to nine shopping malls across six cities in China.
LOOKING AHEAD CapitaLand will continue to grow its AUM through accretive acquisitions, developments, asset enhancements and to create new funds and financial products in Singapore, China, Vietnam and Malaysia.
S$964m CCT and CMT completed the refinancing of
raffles City Singapore debt via a S$800 million
Aaa-rated secured notes and S$164 million
bank borrowings
revenue declined 11% due mainly to lower one-off acquisition and
divestment fees from our rEITs and lower fund management fees from
two private equity funds which have been fully divested. EBIT was down
22% due mainly to lower fee income and lower share of results from
associates and joint venture.
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Fy 2010
EBIT (S$m)
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Fy 2010
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CapitaLand Financial Services
As one of Asia’s largest real estate companies, CapitaLand has a strong track record in originating, structuring and managing real estate funds and financial products. The Group has created six REITs and 21 real estate private equity funds over the past years, all REITS and 15 funds are still under its management. As at end 2011, the Group’s financial services business has approximately S$34 billion Assets Under Management (AUM).
STRONG FUND MANAGEMENT CAPABILITIES The Singapore and China-focused REITs and private equity funds contributed 83% of the total AUM. In 2011, CapitaMalls Asia converted CapitaRetail China Development Fund to an income fund and increased its fund size by 50% to US$900.0 million (approximately S$1.1 billion).
PROACTIVE PORTFOLIO AND CAPITAL MANAGEMENT CapitaLand’s REITs contributed a total of S$95.6 million in management fees to the Group in 2011. The respective REIT managers continued to add value to their portfolio through portfolio reconstitution, acquisition and development, asset enhancement, proactive leasing and capital management.
CapitaMall Trust (CMT) was the first Singapore REIT to offer two-year bonds to the retail and institutional investors in Singapore. The offer was about 1.9 times subscribed. In April 2011, CMT acquired Iluma for S$295.0 million, increasing the number of retail properties in its portfolio to 16. CMT also took a 30% stake in a joint venture to develop a prime land parcel at Jurong Gateway, named Westgate, marking its first foray into greenfield developments.
S$34b The Group’s financial services business has approximately S$34 billion Assets Under Management as at end 2011
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CapitaMall Trust’s offer of two-year bonds to the retail and institutional investors in Singapore was about 1.9 times subscribed
1 2
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1 WEN KHAI MENG CEO CAPITALAND FINANCIAL LIMITED
CHIEF INVESTMENT OFFICER CAPITALAND LIMITED (Until 5 February 2012)
2 JOHN PANG MANAGING DIRECTOR CAPITALAND FINANCIAL LIMITED
3 CHAN LEE FONG HEAD, FINANCIAL & CORPORATE SERVICES CAPITALAND FINANCIAL LIMITED
4 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
5 CHONG KEE HIONG CEO THE ASCOTT LIMITED (From 6 February 2012)
CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (Until 5 February 2012)
6 RONALD TAY CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED (From 27 February 2012)
CHIEF INVESTMENT OFFICER THE ASCOTT LIMITED (Until 5 February 2012)
7 CHAN SAY YEONG CEO QUILL CAPITA MANAGEMENT SDN. BHD.
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RHODES CORPORATE PARK – BUILDING B SydnEy, AUSTrALIA
The Residential division delivered 2,536 lot sales in 2011, representing a 15% increase on 2010. The Australian residential market continues to be supported by sound fundamentals in most markets and the division remains well positioned with over 21,000 lots under management in its development pipeline at an estimated end value of A$8.1 billion (S$10.5 billion), underpinning future earnings.
The Commercial & Industrial division successfully completed 13 industrial projects with a combined end value of approximately A$300 million (S$390 million) and continues to make good progress securing new projects.
Australand introduced high quality capital partners to its business in 2011 including the Government of Singapore Investment Corporation, through the establishment of the Australand Logistics Joint Venture, and LaSalle Investment Management with the establishment of two residential development joint ventures.
LOOKING AHEAD The Australian economy is expected to continue to benefit from the significant investment in the resources sector, underpinning employment and population growth. Australand has a clear strategy and competitive advantages in each of the sectors it operates in. Its healthy pipeline of residential, office and industrial projects and the expected growth in investment earnings provide reasons for the Group to be optimistic about the outlook.
S$390m Commercial &
Industrial division successfully
completed 13 industrial projects with a combined
end value of approximately A$300 million
(S$390 million)
Australand Property Group
Australand is one of Australia’s leading diversified property groups and remains a key subsidiary of CapitaLand. Operating in the residential, commercial and industrial markets, Australand’s activities include the development of residential land, housing and apartments and the development of, and investment in, income producing commercial and industrial properties.
Australand delivered a solid result for 2011 with operating earnings up 6% year-on-year to A$135 million (S$176 million). Statutory profit for the year was A$141 million (S$184 million). Distributions for the full year totalled A$0.215 (S$0.28) per security, representing growth of 5%.
The result was achieved whilst maintaining sound capital management metrics and continuing to position the business for the future through investment in new projects, technology, its brand and its people. The operating performance reflects the resilience of the Group’s high quality investment portfolio as well as improved earnings from development activities.
STRONG OPERATING PLATFORM The investment property portfolio, contributing 68% of Australand’s earnings, continued its track record of growth in 2011. Portfolio metrics remained very strong with occupancy of over 99% and a weighted average lease expiry of 5.8 years.
4 5
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S$176m Australand achieved a 6% increase in operating profit to A$135 million (S$176 million) in 2011
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Fy 2010
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1 BOB JOHNSTON MANAGING DIRECTOR AND CEO AUSTRALAND PROPERTY GROUP
2 SEAN MCMAHON EXECUTIVE GENERAL MANAGER, COMMERCIAL & INDUSTRIAL AUSTRALAND PROPERTY GROUP
3 ROD FEHRING EXECUTIVE GENERAL MANAGER, RESIDENTIAL AUSTRALAND PROPERTY GROUP
4 KIERAN PRYKE CHIEF FINANCIAL OFFICER AUSTRALAND PROPERTY GROUP
5 MICHAEL NEWSOM GENERAL COUNSEL AUSTRALAND PROPERTY GROUP
6 BEV BOOKER COMPANY SECRETARY AUSTRALAND PROPERTY GROUP
7 CHRIS WARRELL EXECUTIVE GENERAL MANAGER, HUMAN RESOURCES AUSTRALAND PROPERTY GROUP
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TOWNSHIP DEVELOPMENT BUSINESS GEARS UP FOR GROWTH Surbana Land (SLPL) has continued on a steady growth path in 2011. In July 2011, SLPL acquired its fifth residential site in Chengdu, China, for RMB 677 million (approximately S$138 million) through a public auction. The 7.5-hectare site will yield a potential gross floor area of over 300,000 sqm or about 3,400 apartments. SLPL’s investment was a strategic move to add to its land bank and to drive business growth. In all, SLPL is developing over 57,000 homes in Chengdu, Xi’an, Wuxi and Shenyang.
2011 also saw SLPL achieve a new daily sales record when it sold 720 units in Phase 3A of the La Botanica project in Xi’an, China on 1 October. This broke the previous record of 583 units sold in a day in an earlier phase of the same project exactly a year ago. As of 31 December 2011, SLPL has sold 14,356 units in its township projects.
OVERCOMING CHALLENGES TO SUSTAIN BUSINESS GROWTH Prospects for Surbana remain good for the next two to three years. For consultancy, competition will be a key challenge. But with SIC’s strength as a leading expert in designing integrated townships and mass housing, it will be well-placed to exploit the growing global demand for affordable homes, especially in emerging markets. At the same time, SIC’s inroads into private, institutional and commercial developments will help drive business growth for the consultancy arm.
Going forward, the township development business is expected to contribute significantly to Surbana’s top and bottom lines as the township projects are progressively being completed. Surbana Land will anchor in cities where it already has a presence. To this end, it has launched a second Surbana Township Development Fund in November 2011 to support future investments.
XI’AN TOWNSHIP (PHASE 3A) ChInA
14,000 homes Since entering
the township development
business in 2003, Surbana has
sold over 14,000 homes in its four
townships in China
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Surbana’s two businesses of building consultancy and township development continued to enjoy good growth in 2011. For FY2010 ended 31 March 2011, Surbana achieved a record revenue of S$280.8 million and an EBIT of S$67.3 million.
CONSULTANCY ARM MAKING INROADS INTO NEW MARKETS Surbana International Consultants (SIC) provides full-service building consultancy solutions across the value chain, including urban planning, architecture, engineering, quantity surveying, project and construction management, coastal engineering and infrastructure, building technology, sustainable design and city management.
SIC’s core expertise is in designing integrated townships and mass housing, and a key client is Singapore’s Housing & Development Board (HDB). SIC has benefited from HDB’s ramped-up public housing building programme in 2011. At the same time, SIC has made further inroads into the private and public sectors in Singapore and overseas to drive business growth.
Notable projects secured in 2011 included the Nautical condominium in Sembawang and the Singapore University of Technology and Design. SIC was also awarded a number of projects by CapitaLand.
One of the key projects completed in 2011 was the Punggol Waterway, a 4.2 km waterway that meanders through Punggol New Town to provide a new waterfront lifestyle for residents. SIC was the full-suite consultant for this important national project. SIC also completed master planning projects for Rizhao Marine City in China and the Mumbai Metropolitan Region in India.
SIC won various industry awards in 2011, including a clean sweep of five HDB Design Awards and three FIABCI Singapore Property Awards.
Surbana Land will anchor in Chinese cities where it has established a brand name and business network to seek new investment opportunities
1 TAN KIANG HWEE GROUP CEO SURBANA CORPORATION PTE. LTD.
2 SOH WAH MENG CEO SURBANA INTERNATIONAL CONSULTANTS
3 PUAH TZE SHYANG CEO SURBANA LAND
4 CHIA CHAY YEOW GROUP CHIEF FINANCIAL OFFICER SURBANA CORPORATION PTE. LTD.
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5 SEBASTIAN TAN GROUP CHIEF HUMAN RESOURCE OFFICER SURBANA CORPORATION PTE. LTD.
6 TITUS MOHAN ALEXANDER SENIOR DIRECTOR, CORPORATE SERVICES SURBANA CORPORATION PTE. LTD.
SURBANA INTERNATIONAL CONSULTANTS (SIC)
7 LOW CHER EK MANAGING DIRECTOR TOWNSHIP AND RESIDENTIAL
8 LOH YAN HUI MANAGING DIRECTOR COASTAL ENGINEERING AND INFRASTRUCTURE
9 JEFFREY HO MANAGING DIRECTOR SURBANA URBAN PLANNING GROUP
SURBANA LAND (SLPL)
10 HENG HUA JEE HEAD OF PROJECT MANAGEMENT TEAM 1
11 LEE YANG YEN HEAD OF PROCUREMENT CONTRACTS AND COST MANAGEMENT
12 TERENCE LU HEAD OF PROJECT MANAGEMENT TEAM 2
Surbana International Consultants won over a dozen industry awards in 2011, underlying its expertise in designing well-integrated townships and quality mass housing
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1,700 employees have shared ideas at 32 ICE camps and related activities held in various countries. Staying true to its credo of “Building People”, the Group actively encourages internal transfers across job functions, business units and geographies to offer more career opportunities to its employees.
COMPETITIVE COMPENSATION/BENEFITS CapitaLand motivates and rewards employees with comprehensive and competitive compensation and benefits programmes. Incentives include short-term cash bonuses and long-term equity-based reward plans. The performance-based Restricted Stock Plan is an attractive long-term incentive offered to employees to provide them with a personal stake in the company, contingent on achieving performance targets. This better aligns employee and shareholder interests to deliver business results. Regular benchmarking against different markets and innovation in compensation strategies ensure CapitaLand remains competitive and continues to attract and retain talent.
POSITIVE WORK ENVIRONMENT CapitaLand recognises that a positive work environment will better attract, motivate and retain talent. A total employee well-being programme is in place to promote personal development, health and work-life harmony. Initiatives include a flexible medical and benefits plan, flexible work arrangements, employee engagement initiatives, and subsidised rates at The Ascott’s serviced residences.
CapitaLand has grown significantly over the years to be an international company with business presence in more than 20 countries and 110 cities. The diversity of employee profiles provides competitive advantage in terms of balance and scale, guided by the company’s core values and operating principles.
Senior management making time to ‘Build People’
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regular benchmarking
against different markets and
innovation in compensation
strategies ensure CapitaLand remains
competitive and continues to attract
and retain talent
Human Resource
CapitaLand recognises the importance of developing and growing human capital and has an integrated human capital strategy to recruit, develop and motivate employees. To live its credo of “Building People”, employees are provided with appropriate training to equip them to achieve at optimal levels, and to align their personal goals with the company’s performance objectives. A positive work environment is also created for employees to contribute and pursue their career growth.
TALENT MANAGEMENT CapitaLand identifies talents internally and externally to continue its efforts to build bench strength as well as facilitate succession planning to ensure leadership continuity. CapitaLand has recruited talents through its network with both local and overseas universities, and also attracted future leaders through scholarships such as the CapitaLand–BCA Scholarship, CapitaLand-NUS-USP Scholarship, CapitaLand International Scholarship and CapitaLand-MOM National Human Resources Scholarship. Aside from undergraduates and fresh graduates, CapitaLand also employs young and mid-career professionals as well as industry veterans.
During the year, CapitaLand continued to provide training and development opportunities to equip employees for the competitive business environment internationally. Launched in 2006, the CapitaLand Institute of Management and Business (CLIMB) has provided over 8,350 training places for employees from various countries. The Ascott Centre for Excellence (ACE), Ascott’s global hospitality training centre in Singapore, has trained more than 2,400, including employees from the hotel and accommodation services sector. CapitaLand’s successful ICE (Innovation, Creativity, Entrepreneurship) programme continues to inspire employees to generate or build on business ideas. To date, more than
Over 8,350 training places
Launched in 2006, the CapitaLand Institute of Management and Business (CLIMB) has provided over 8,350 training places for employees from various countries
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Green for Hope @ Primary Schools where CHF matched donations for the recyclable waste collected at primary schools, received 100% participation from local primary schools in Singapore and raised more than S$1 million for the welfare fund of 179 primary schools.
In conjunction with the launch of CapitaLand Orchids, Cattleya CapitaLand and Phalaenopsis CapitaLand, 10 sets of the specially-minted blooms of the two prized hybridized orchid species were designed and sold to corporate donors to raise funds for the President‘s Challenge 2011. CHF matched dollar-for-dollar towards the funds raised from the initiative, bringing the donation to a total of S$400,000 to benefit eight children beneficiaries under President‘s Challenge 2011. The Guest-of-Honour, His Excellency Dr Tony Tan Keng Yam, President of the Republic of Singapore, unveiled the two orchids with Mr Liew Mun Leong, President & CEO of CapitaLand Group, and presented the commemorative sets to the donors at the event.
Through My Schoolbag, a signature annual CSR programme by CapitaMalls Asia, whereby schoolbags containing school and daily necessities were given to underprivileged children, CHF donated S$500,000 to benefit nearly 19,000 underprivileged children in Singapore, China, Malaysia, India and Japan. Another signature CSR programme called Kids’ Food Fund, a food security and nutrition programme launched in 2010 by CHF, also expanded its reach to Vietnam this year. A total donation of S$360,000 was made to fund food-related initiatives for more than 12,000 underprivileged children in Asia, including Singapore, China, Thailand and the Philippines.
Launch of Green for Hope @ CapitaLand 2011 in partnership with CDCs to benefit the underprivileged children in Singapore
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S$500,000 Through My Schoolbag,
ChF donated S$500,000 to benefit
nearly 19,000 underprivileged
children in Singapore, China,
Malaysia, India and Japan
Corporate Social Responsibility
CapitaLand is committed to be a good corporate citizen in the communities we operate. In line with its credo of “Building People”, the focus of CapitaLand’s corporate social responsibility (CSR) efforts is in the areas of corporate philanthropy, volunteerism, community and the environment. For its efforts, CapitaLand was listed on the Global 100 Most Sustainable Corporations in the World by Corporate Knights and the Sustainability Yearbook 2012 and was one of three Singapore companies in the Dow Jones Sustainability Asia Pacific Index.
CORPORATE PHILANTHROPY CapitaLand Hope Foundation (CHF), the philanthropic arm of CapitaLand, was established in 2005 to further CapitaLand’s CSR commitment to build a better future for underprivileged children. Every year, CapitaLand allocates up to 0.5% of its net profit to CHF. Since 2005, CHF has donated more than S$15 million to support programmes for the shelter, education and healthcare needs of underprivileged children in the communities where CapitaLand operates.
In Singapore, CapitaLand extended its reach to the underprivileged children with its first-time partnership with the five Community Development Councils (CDCs) through Green for Hope @ CapitaLand, an annual creative recycling campaign that marries green efforts with philanthropy. Through matching donations according to the amount of recyclable waste collected at participating CapitaLand properties, CHF donated S$700,000 to support key programmes identified by the respective CDCs to benefit more than 5,000 underprivileged children. The second leg of Green for Hope programme,
S$15m Since 2005, ChF has donated more than S$15 million
CapitaLand was listed on the Global 100 Most Sustainable Corporations in the world
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COMMUNITY CapitaLand is the Presenting Sponsor and Conservation Donor of the Giant Pandas collaborative programme to promote conservation of the Giant Pandas for 10 years. This further strengthens the strong relationship between Singapore and China and is also a testament of CapitaLand’s long-term commitment to China. A nationwide naming contest was organised to name the Giant Pandas and approximately 1,000 entries were submitted by the public. A distinguished judging panel selected “Kai Kai” (凯凯) and “Jia Jia” (嘉嘉) as the winning names for the male and female Giant Pandas respectively.
ENVIRONMENT For demonstrating best practices in ‘green’ excellence and innovation, CapitaLand was conferred the Asia Pacific Green Builder of the Year award at the inaugural 2011 Frost & Sullivan Asia Pacific Green Excellence Awards. In 2011, CapitaLand obtained 17 green building awards. JCube, a shopping mall in Singapore, clinched the prestigious Building and Construction Authority (BCA) Green Mark Platinum award. CapitaLand also obtained its first green rating award in Japan and Malaysia with the CASBEE “A” rating for Vivit Square (Japan) and BCA Green Mark Gold for Gurney Plaza (Malaysia).
As environmental sustainability and occupational health and safety are of paramount importance to CapitaLand, it extended its ISO 14001 and OHSAS 18001 certification (international standards which are externally audited) beyond Singapore, China, Japan, Malaysia and Vietnam to Australia, France, India, Philippines, Thailand and United Kingdom in 2011, more than doubling its earlier geographical reach. Recognising its extensive environmental management system, Global Real Estate Sustainability Benchmark (GRESB) acknowledged CapitaLand as one of the Asian leaders in environmental management in its 2011 survey.
Through its Building A Greener Future programme, CapitaLand encourages staff, tenants and the community to play their part in protecting the environment. It launched the award winning Wear Less Day campaign in Singapore. Organised in conjunction with WWF’s Earth Hour, CapitaLand staff and participating office tenants in Singapore were encouraged to dress down while the air conditioning temperatures at their workplaces are turned up. For Earth Hour, more than 200 CapitaLand properties worldwide turned off non essential lights through the night.
In 2011, CapitaLand Green for Hope programme continued to receive overwhelming response. The total collection of recyclable waste by all primary schools and 24 CapitaLand properties in Singapore exceeded 1.4 million kilogrammes.
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CapitaLand was conferred the
Asia Pacific Green Builder of
the year award at the inaugural
2011 Frost & Sullivan Asia Pacific Green
Excellence Awards
Award winning Wear Less Day Campaign at Capital Tower with the participants and CapitaFrog, CapitaLand’s mascot for green community programmes
ISO 14001 and OhSAS 18001 certification in
11 countries
CapitaLand has 21 CapitaLand Hope Schools in operations or under development in remote areas of China to provide underprivileged children with a conducive learning environment. This year, CapitaLand extended its reach to Vietnam and built its first Hope School, CapitaLand Nang Yen Primary Hope School, in Phu Tho Province, one of the poorest mountainous provinces.
CapitaLand cares for the community in which it operates. During the earthquake and tsunami disaster in Japan, a group-wide donation drive was conducted where staff from all over the world responded generously and their contributions were matched dollar-for-dollar by CHF. A total donation of $250,000 was raised for ‘Save the Children Japan’ to fund relief efforts for the affected children.
VOLUNTEERISM Besides corporate philanthropy, CapitaLand actively promotes volunteerism in our people. Each staff is given three days of paid volunteer service leave each year for charitable work of their choice. In 2011, CapitaLand staff volunteered over 9,800 hours in various activities across Asia. In Singapore, staff participated in various local volunteer activities including P.E.E.K. (Providing Educational Exposure for Kids) at ION Orchard and Kids’ Food Fund Children’s Day Expedition at the Singapore Zoological Gardens. These activities provided opportunities for staff to interact with the children beneficiaries supported by CHF and promote greater CSR involvement within the company.
CapitaLand organised two staff volunteer expeditions to Vietnam and China in 2011 to engage staff in overseas community service projects and shower love and care for our children beneficiaries. 40 international and local staff volunteers participated in the Vietnam expedition by working on the construction site of CapitaLand Nang Yen Primary Hope School to complete the final upgrading phase of the new two-storey classroom building.
In China, a group of 28 international and local staff volunteers also embarked on an expedition to CapitaLand Xingfuzhilu Hope School located in the Inner Mongolia grassland. The expedition was themed “Building for Tomorrow • Sharing the Love” and staff volunteers imparted knowledge to the students through conducting interesting classroom lessons and holding meaningful interaction activities.
Corporate Social Responsibility
9,800 hours
In 2011, CapitaLand staff volunteered over 9,800 hours in various activities across Asia
Staff volunteers spent two weeks imparting knowledge to CapitaLand Hope School’s children in Inner Mongolia
1.4m kilogrammes
Over 1.4 million kilogrammes of
recyclable waste collected under
CapitaLand Green for hope
Programme
108 109
Gross Effective Floor Area Total No. Tenure Name Location Stake (%) (sqm) of Units (Years)
COMPLETED PROJECTS SINGAPORE Latitude Jalan Mutiara 100% 24,413 127 Freehold
The Seafront on Meyer Meyer Road 100% 52,474 327 Freehold CHINA Beaufort Chaoyang District, Beijing 50% 37,705 467 70 (Phase 1)
Beau Residences Chancheng District, Foshan 100% 45,912 648 70
The Riviera Chancheng District, Foshan 100% 58,254 208 70
Riverside Ville Chancheng District, Foshan 100% 111,524 758 70
The Loft Chengdu Qingyang District, Chengdu 56% 191,168 1,814 70 (Phase 1)
VIETNAM The Vista District 2, Ho Chi Minh City 80% 190,374 850 Freehold UNITED KINGDOM 25 Kensington Square Central London 33.3% 239 1 Freehold
Expected Gross Approximate Completion Effective Floor Area Percentage Total No. Tenure Name Location Date Stake (%) (sqm) Completion of Units (Years)
UNDER DEVELOPMENT
SINGAPORE d’Leedon Leedon Heights/ 2014 35% 218,519 21% 1,715 99 King’s Road/Farrer Road
The Interlace Alexandra Road/ Depot Road 2014 60% 169,600 47% 1,040 99
The Nassim Nassim Hill 2014 100% 15,942 10% 55 Freehold
The Wharf Residence Tong Watt Road 2012 100% 27,168 71% 186 999
Urban Resort Condominium Cairnhill Road 2013 100% 14,890 29% 64 Freehold
Urban Suites Cairnhill Road 2013 50% 24,263 30% 165 Freehold CHINA Beaufort Chaoyang District, Beijing 2013 50% 17,365 29% 220 70 (Phase 2)
Dolce Vita Baiyun District, Guangzhou 2013 48% 128,867 77% 1,033 70 (Phase 1)
Imperial Bay Gongshu District, Hangzhou 2013 50% 85,100 23% 462 70
La Cité Foshan Chancheng District, Foshan 2013 100% 80,767 40% 879 70
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THE PARAGON SHANGHAI, CHINA
As at 31 December 2011
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Gross Effective Floor Area Total No. Tenure Name Location Stake (%) (sqm) of Units (Years)
FUTURE DEVELOPMENTS (cont'd)
CHINA Beaufort Chaoyang District, Beijing 50% 46,394 450 70 (Phase 3 to 4)
Summit Residences, Ningbo Jiangbei District, Ningbo 50% 10,830 38 70 (Plot 1)
The Metropolis Huaqiao District, Kunshan 70% 483,217 3,872 70 (Phase 2 to 6)
The Pinnacle Pudong District, Shanghai 80% 48,423 380 70 (Phase 2)
Vermont Hills Changping District, Beijing 80% 257,706 793 70
Dolce Vita Baiyun District, Guangzhou 48% 222,613 1,743 70
Hangzhou Hemu A26 Site Gongshu District, Hangzhou 100% 80,105 700 70
LFIE Panyu District, Guangzhou 45% 1,087,362 8,060 70
Value Homes Lakeside Caidian District, Wuhan 100% 224,509 2,504 70
Lanhe Site Panyu District, Guangzhou 100% 236,082 1,500 70 (includes social (estimated and housing and excludes social commercial) housing)
Wanxiang G0302 Site Pudong District, Shanghai 95% 90,148 900 70 (estimated)
VIETNAM Thanh My Loi Site District 2, Ho Chi Minh City 30% 40,000 78 Freehold (Phase 2) (estimated) (includes 28 shop houses)
Mo Lao Site Ha Dong District, Hanoi 35% 200,000 1,300 Freehold (estimated) (estimated)
Value Homes Binh Chanh Site Binh Chanh District, Ho Chi Minh City 65% 75,000 800 Freehold (estimated) (estimated)
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Expected Gross Approximate Completion Effective Floor Area Percentage Total No. Tenure Name Location Date Stake (%) (sqm) Completion of Units (Years)
UNDER DEVELOPMENT
CHINA Royal Residences Dongcheng District, Beijing 2012 100% 14,123 40% 26 70
The Loft Chengdu Qingyang District, Chengdu 2014 56% 270,090 27% 2,632 70 (Phase 2)
The Metropolis Huaqiao District, Kunshan 2013 70% 168,356 48% 1,542 70 (Phase 1)
The Pinnacle Pudong District, Shanghai 2013 80% 52,594 90% 539 70 (Phase 1)
The Paragon Luwan District, Shanghai 2014 99% 78,440 41% 271 70
99 Hengshan Road Xuhui District, Shanghai 2013 100% 14,850 25% 90 50
Tianjin International Hexi District, Tianjin 2014 100% 111,732 11% 1,305 50 Trade Centre (residential) 73,759 (commercial)
JAPAN Parkhouse Shinjuku Tower Shinjuku Ward, Tokyo 2012 20% 19,000 89% 298 Freehold Expected Gross Approximate VIETNAM Beau Rivage District 2, Ho Chi Minh City 2014 30% 195,308 9% 962 Freehold (Phase 1 of Thanh My Loi Site)
Mulberry Lane Ha Dong District, Hanoi 2013 70% 235,631 37% 1,478 Freehold Value Homes PARCSpring District 2, Ho Chi Minh City 2014 35% 90,574 24% 974 Freehold (Phase 1)
Gross Effective Floor Area Total No. Tenure Name Location Stake (%) (sqm) of Units (Years)
FUTURE DEVELOPMENTS
SINGAPORE Sky Habitat Bishan Street 15 65% 58,786 509 99
Site at Marine Parade Road Marine Parade Road 100% 9,986 150 Freehold
Site at Yio Chu Kang Road Yio Chu Kang Road 100% 19,330 80 Freehold (estimated)
Residential As at 31 December 2011
112 113
Total Net Effective Lettable Tenure Name Location Stake (%) Area (sqm) (Years)
COMPLETED PROJECTS OFFICE SINGAPORE PWC Building Cross Street 30% 33,080 99
CHINA Innov Tower Xuhui District, Shanghai 50% 40,445 50
JAPAN Shinjuku Front Tower Shinjuku Ward, Tokyo 20% 92,092 Freehold
UNITED KINGDOM 1 Derry Street Central London 33.3% 3,020 Freehold
INDUSTRIAL SINGAPORE Technopark@Chai Chee Chai Chee Road 100% 105,384 60
25A Changi South Street 1 Changi South 62% 3,496 30
15 Changi South Street 1 Changi South 62% 3,774 30
743 Lorong 5 Toa Payoh Toa Payoh 62% 8,093 60
615 Lorong 4 Toa Payoh Toa Payoh 62% 7,447 60
CHINA Corporation Park Sha Tin, Hong Kong 30% 40,099 (GFA) 54
UNDER DEVELOPMENT
HOTEL CHINA The Paragon/ChangLe Lu Hotel Luwan District, Shanghai 99% 66,160 (GFA) 50
INDUSTRIAL IT PARK/OFFICE INDIA Site at Trans Thana Creek Thana District, Navi Mumbai 49% 273,162 100
HELD THROUGH CAPITACOMMERCIAL TRUST COMPLETED PROJECTS CAR PARK SINGAPORE Golden Shoe Car Park Market Street 32% 4,056 99
OFFICE SINGAPORE Bugis Village Queen Street/Rochor Road/ 32% 11,498 99 Victoria Street
HSBC Building Collyer Quay 32% 18,624 999
Six Battery Road Battery Road 32% 46,124 999
Capital Tower Robinson Road 32% 68,836 99
One George Street George Street 32% 41,622 99
Wilkie Edge Wilkie Road 32% 13,880 99 (excludes serviced residences)
UNDER DEVELOPMENT OFFICE SINGAPORE CapitaGreen Market Street 62.8% 79,383 (GFA) 99
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SIX BATTERY ROAD SINGAPORE
As at 31 December 2011
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Operational Effective Net Lettable Name Location Stake (%) Area (sqm) Tenure
COMPLETED PROJECTS CHINA CapitaMall Weifang Gaoxin District, Weifang 29.5% 36,342 Expiring in October 2044
CapitaMall Jiulongpo, Chongqing Jiulongpo District, Chongqing 47.8% 38,909 Expiring in October 2042
CapitaMall Yuhuating, Changsha Yuhua District, Changsha 47.8% 47,194 Expiring in March 2044
CapitaMall Chengnanyuan, Qingyunpu District, Nanchang 29.5% 37,349 Expiring in Nanchang February 2045
CapitaMall Guicheng, Foshan Nanhai District, Foshan 47.8% 36,117 Expiring in August 2044
CapitaMall Quanzhou Licheng District, Quanzhou 29.5% 29,860 Expiring in February 2045
CapitaMall Jinniu, Chengdu Jinniu District, Chengdu 29.5% 48,806 Expiring in (Phase 1) October 2044
CapitaMall Maoming Maogang District, Maoming 47.8% 30,233 Expiring in November 2044
CapitaMall Zhangzhou Xiangcheng District, Zhangzhou 47.8% 30,560 Expiring in December 2043
CapitaMall Fucheng, Mianyang Fucheng District, Mianyang 29.5% 34,465 Expiring in (Phase 1) September 2044
CapitaMall Zhanjiang Chikan District, Zhanjiang 29.5% 33,144 Expiring in December 2044
CapitaMall Zibo Zhangdian District, Zibo 29.5% 31,110 Expiring in March 2045
CapitaMall Peace Plaza, Dalian Shahekou District, Dalian 19.6% 104,173 Expiring in November 2035
CapitaMall TianjinOne, Tianjin Hexi District, Tianjin 19.6% 41,208 Expiring in September 2054
CapitaMall Shapingba, Chongqing Shapingba District, Chongqing 19.6% 26,858 Master Lease expiring in December 2023
CapitaMall Zhaoqing Duanzhou District, Zhaoqing 29.5% 32,743 Expiring in May 2055
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ION ORCHARD AND THE ORCHARD RESIDENCES SINGAPORE
As at 31 December 2011
116 117
Operational Effective Net Lettable Name Location Stake (%) Area (sqm) Tenure
COMPLETED PROJECTS (cont'd) CHINA Minhang Plaza, Shanghai* Minhang District, Shanghai 9.8% 110,640 Expiring in December 2053
Hongkou Plaza, Shanghai* Hongkou District, Shanghai 14.7% 92,276 Expiring in September 2057
CapitaMall Crystal, Beijing Haidian District, Beijing 29.5% 39,362 Commercial: Expiring in January 2043 Underground carpark: Expiring in January 2053
INDIA Forum Value Mall, Bangalore Whitefield, Bangalore 10.4% 27,059 Freehold
The Celebration Mall, Udaipur National Highway 8, Udaipur 24.4% 36,398 99 years, expiring in May 2103
JAPAN Chitose Mall Chitose-shi, Hokkaido 17.2% 15,691 Freehold
Coop Kobe Nishinomiya-shi, Hyogo 17.2% 7,970 Freehold
Ito Yokado Eniwa Eniwa-shi, Hokkaido 17.2% 14,843 Freehold
Izumiya Hirakata Hirakata-shi, Osaka 17.2% 20,043 Freehold
La Park Mizue Mizue, Edogawa-ku, Tokyo 17.2% 18,430 Freehold
Narashino Shopping Centre Funabashi-shi, Chiba 17.2% 10,737 Freehold
Vivit Square Funabashi-shi, Chiba 17.2% 49,628 Freehold
MALAYSIA Queensbay Mall Bayan Lepas, Penang 65.5% 82,700 Freehold (approximately 90.7% of retail strata area and 100% of the carpark bays)
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COMPLETED PROJECTS (cont'd) CHINA CapitaMall Deyang Jingyang District, Deyang 29.5% 30,166 Expiring in November 2045
CapitaMall Nan’an, Yibin Cuiping District, Yibin 29.5% 27,870 Expiring in May 2045
CapitaMall Dongguan Nancheng District, Dongguan 29.5% 32,043 Expiring in January 2055
CapitaMall Shawan, Chengdu Jinniu District, Chengdu 19.6% 26,920 Commercial: Expiring in January 2046 Underground carpark: Expiring in January 2076
CapitaMall Taohualun, Yiyang Heshan District, Yiyang 29.5% 23,417 Expiring in June 2045
CapitaMall Yangzhou Weiyang District, Yangzhou 29.5% 35,932 Expiring in July 2039/ April 2045
CapitaMall Hongqi, Xinxiang Hongqi District, Xinxiang 29.5% 25,404 Expiring in November 2045
CapitaMall Kunshan Yushan town, Kunshan 29.5% 27,338 Expiring in May 2045
CapitaMall Aidemengdun, Harbin Daoli District, Harbin 29.5% 27,097 Expiring in September 2042
CapitaMall Cuiwei, Beijing Haidian District, Beijing 29.5% 35,530 Commercial: Expiring in May 2046 Underground carpark: Expiring in May 2056
CapitaMall Beiguan, Anyang Beiguan District, Anyang 29.5% 25,742 Expiring in March 2046
CapitaMall Jinshui, Zhengzhou Jinshui District, Zhengzhou 19.6% 36,070 Expiring in July 2045
Shopping Malls As at 31 December 2011
* Acquisition of 50% stake pending completion.
118 119
Operational Effective Net Lettable Name Location Stake (%) Area (sqm) Tenure
UNDER DEVELOPMENT (cont'd) INDIA Mangalore Mall Pandeshwar Road, Mangalore 9.9% N.A. Freehold (to be completed in 2013)
Mysore Mall Abba Road/Hyder Ali Road, Mysore 14.6% N.A. Freehold (to be completed in 2014)
Nagpur Mall Umrer Road, Nagpur 19.3% N.A. Freehold (to be completed in 2015)
HELD THROUGH CAPITAMALL TRUST (CMT) COMPLETED PROJECTS SINGAPORE Bugis Junction Victoria Street 18.7% 38,906 99 years, expiring in September 2089
Bukit Panjang Plaza Jelebu Road 18.7% 14,185 99 years,expiring in November 2093
Clarke Quay River Valley Road 18.7% 27,372 99 years, expiring in January 2089
Funan DigitaLife Mall North Bridge Road 18.7% 27,771 99 years, expiring in December 2078
Hougang Plaza Upper Serangoon Road 18.7% 7,000 99 years, expiring in February 2090
IMM Building Jurong East 18.7% 87,751 60 years, expiring in January 2049
Junction 8 Bishan 18.7% 23,522 99 years, expiring in August 2090
Lot One Shoppers’ Mall Choa Chu Kang 18.7% 20,387 99 years, expiring in November 2092
Plaza Singapura Orchard Road 18.7% 46,278 Freehold
Rivervale Mall Rivervale Crescent 18.7% 7,537 99 years, expiring in December 2096
Sembawang Shopping Centre Sembawang Road 18.7% 12,189 999 years, expiring in March 2884
Tampines Mall Tampines Central 18.7% 30,572 99 years, expiring in August 2091
The Atrium@Orchard Orchard Road 18.7% 33,406 99 years, expiring in August 2107
Iluma Victoria Street 18.7% 18,051 60 years, expiring in September 2065
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UNDER DEVELOPMENT SINGAPORE The Star Vista One Vista Xchange Green 65.5% N.A. 60 years, expiring in (to be completed in 2012) October 2067 CHINA CapitaMall Fucheng, Mianyang Fucheng District, Mianyang 29.5% N.A. Expiring in (Phase 2) June 2047 (to be completed in 2013)
CapitaMall Jinniu, Chengdu Jinniu District, Chengdu 29.5% N.A. Expiring in (Phase 2) October 2044 (to be completed in 2013)
CapitaMall Wusheng, Wuhan Qiaokou District, Wuhan 29.5% N.A. Expiring in (to be completed in 2012) June 2044
CapitaMall Meilicheng, Chengdu Chenghua District, Chengdu 65.5% N.A. Expiring in (to be completed in 2013) August 2044
CapitaMall Tianfu, Chengdu Gaoxin District, Chengdu 65.5% N.A. Expiring in (to be completed in 2013) February 2048
CapitaMall Rizhao Donggang District, Rizhao 19.6% N.A. Expiring in (to be completed in 2012) November 2043
CapitaMall Taiyanggong, Beijing Chaoyang District, Beijing 29.5% N.A. Expiring in (to be completed in 2012) August 2044
CapitaMall Xindicheng, Xi’an Yanta District, Xi’an 29.5% N.A. Expiring in (to be completed in 2012) December 2043
CapitaMall Xuefu, Harbin Nangang District, Harbin 29.5% N.A. Expiring in (to be completed in 2012) December 2045
Luwan Integrated Development, Luwan District, Shanghai 43.2% N.A. Expiring in Shanghai July 2056 (to be completed in 2015)
Suzhou Integrated Development* Suzhou Industrial Park, Suzhou 32.7% N.A. Commercial: (to be completed in 2017) Expiring in January 2051 Underground carpark: Expiring in January 2051 INDIA Cochin Mall Ernakulam District, Cochin 7.4% N.A. Freehold (to be completed in 2016)
Graphite India, Bangalore Whitefield, Bangalore 14.6% N.A. Freehold (to be completed in 2014)
Hyderabad Mall Kukatpally, Hyderabad 7.3% N.A. Freehold (to be completed in 2013)
Jalandhar Mall Paragpur Village, Jalandhar 19.3% N.A. Freehold (to be completed in 2015)
Shopping Malls As at 31 December 2011
* Acquisition pending government approval.
120 121
Operational Effective Net Lettable Name Location Stake (%) Area (sqm) Tenure
HELd THrOugH CApiTAMALLS MALAYSiA TruST (CMMT) COMpLETEd prOJECTS East Coast Mall Putra Square, Kuantan 23.4% 41,018 99 years, expiring in December 2106
Gurney Plaza Persiaran Gurney, Penang 23.4% 81,048 Freehold
The Mines Jalan Dulang, Selangor 23.4% 66,662 99 years, expiring in March 2091
Sungei Wang Plaza Jalan Sultan Ismail, Kuala Lumpur 23.4% 41,602 Freehold (approximately 61.9% of aggregate retail floor area and 100% of the carpark bays)
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Held THrougH CapiTamall TrusT (CmT) uNdEr dEVELOpMENT SiNgApOrE JCube Jurong East 18.7% N.a. 99 years, expiring in (to be completed in 2012) February 2090
Held THrougH CapiTareTail CHina TrusT (CrCT) COMpLETEd prOJECTS CapitaMall anzhen, Beijing Chaoyang District, Beijing 17.7% 43,443 Expiring in october 2034/ March 2042/ June 2042
CapitaMall Erqi, Zhengzhou Erqi District, Zhengzhou 17.7% 92,356 Expiring in May 2042
CapitaMall Shuangjing, Beijing Chaoyang District, Beijing 17.7% 49,463 Expiring in July 2042
CapitaMall Wuhu Jinghu District, Wuhu 23.4% 37,375 Expiring in May 2044
CapitaMall Qibao, Shanghai Minhang District, Shanghai 17.7% 50,779 Master lease expiring in January 2024
CapitaMall Saihan, Huhhot Saihan District, Huhhot 17.7% 30,197 Expiring in March 2041
CapitaMall Wangjing, Beijing Chaoyang District, Beijing 17.7% 56,193 Expiring in May 2043/ May 2053
CapitaMall Xizhimen, Beijing Xicheng District, Beijing 17.7% 51,203 Underground commercial and retail use: Expiring in august 2044 Intergrated use: Expiring in august 2054
CapitaMall Minzhongleyuan, Jianghan District, Wuhan 17.7% 23,216 annex Building: Wuhan Expiring in September 2045 Conserved Building: Master Lease expiring in June 2044
Shopping Malls As at 31 december 2011
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AuSTrALiA Citadines on Bourke Melbourne Bourke Street, Melbourne 100% 28,427 380 Freehold
Somerset on Elizabeth Melbourne Elizabeth Street, Melbourne 100% 1,872 34 Freehold CHiNA ascott Beijing Chaoyang District, Beijing 36.1% 66,417 310 70
ascott Guangzhou Tianhe District, Guangzhou 100% 19,797 208 70 (residential)
50 (Commercial)
40 (retail)
Citadines ashley Hongkong Tsim Sha Tsui District, Hong Kong 100% 2,632 36 150
Citadines Biyun Shanghai Jinqiao Export Processing Zone, Shanghai 36.1% 15,877 196 70
Citadines Central Xi’an Beilin District, Xi’an 36.1% 12,998 162 70 (residential)
40 (Commercial)
Citadines Gaoxin Xi’an Hi-Tech Zone, Xi’an 36.1% 24,303 251 50
Citadines Xinghai Suzhou Suzhou Industrial Park, Suzhou 100% 10,166 167 70 (residential)
50 (Commercial)
40 (retail)
Citadines Zhuankou Wuhan Economic & Technological 36.1% 21,650 249 40 Development Zone, Wuhan
Somerset Garden City Shenzhen Nanshan District, Shenzhen 36.1% 17,379 147 70
Somerset Heping Shenyang Heping District, Shenyang 36.1% 33,031 270 40
Somerset International Building Tianjin Heping District, Tianjin 36.1% 52,726 105 50
Somerset JieFangBei Chongqing Yuzhong District, Chongqing 36.1% 21,494 157 40
Somerset riverview Chengdu Wuhou District, Chengdu 36.1% 30,455 200 50
Somerset Youyi Tianjin Hexi District, Tianijn 36.1% 31,031 250 50
Somerset ZhongGuanCun Beijing Haidian District, Beijing 100% 19,975 154 70 (residential)
50 (Commercial)
40 (retail)
FrANCE ascott arc de Triomphe Paris avenue Kleber, Paris 100% 9,700 106 Freehold
gErMANY Citadines Messe Frankfurt Europa-Boulevard, Frankfurt 100% 8,104 165 Freehold (under construction)
Citadines Michel Hamburg Ludwig-Erhard-Strabe, Hamburg 100% 6,725 128 99 (under construction)
Serviced residences
ASCOTT rAFFLES pLACE SiNgApOrE
As at 31 december 2011
124 125
gross Effective Floor Area No. of Tenure Name Location Stake (%) (sqm) units (Years)
MALAYSiA ascott Kuala Lumpur Jalan Pinang, Kuala Lumpur 50% 36,206 221 Freehold
Somerset ampang Kuala Lumpur Jalan ampang, Kuala Lumpur 100% 18,847 207 Freehold
Somerset Seri Bukit Ceylon Lorong Ceylon, Kuala Lumpur 100% 3,604 48 Freehold Kuala Lumpur SiNgApOrE ascott raffles Place Singapore Finlayson Green 100% 15,694 146 999 THAiLANd ascott Sathorn Bangkok South Sathorn road, Bangkok 40% 45,361 177 50
Citadines Sukhumvit 8 Bangkok Bangkok 49% 8,505 130 Freehold
Citadines Sukhumvit 11 Bangkok Bangkok 49% 8,215 127 Freehold
Citadines Sukhumvit 16 Bangkok Bangkok 49% 5,415 79 Freehold
Citadines Sukhumvit 23 Bangkok Bangkok 49% 8,693 138 Freehold ViETNAM Somerset Central TD Hai Phong City Ngo Quyen District, Hai Phong City 90% 14,531 132 65 (under construction)
HELd THrOugH ASCOTT rESidENCE TruST AuSTrALiA Somerset Gordon Heights Melbourne Little Bourke Street, Melbourne 48.8% 2,550 43 Freehold
Somerset St Georges Terrace Perth St Georges Terrace, Perth 48.8% 6,000 84 Freehold BELgiuM Citadines Sainte-Catherine Brussels Quai au Bois a Bruler, Brussels 48.8% 10,055 169 Freehold
Citadines Toison d’or Brussels avenue de la Toison d’or, Brussels 48.8% 12,752 154 Freehold CHiNA Somerset Grand Fortune Garden Chaoyang District, Beijing 48.8% 15,780 81 70 Property Beijing
Somerset Xu Hui Shanghai Xu Hui District, Shanghai 48.8% 21,014 167 70
Somerset olympic Tower Property Heping District, Tianjin 48.8% 32,946 185 70 Tianjin
FrANCE Citadines Croisette Cannes rue le Poussin, Cannes 48.8% 3,311 58 Freehold
Citadines City Centre Grenoble rue de Strasbourg, Grenoble 48.8% 7,872 107 Freehold
Citadines City Centre Lille avenue Willy Barndt-Euralille, Lille 48.8% 6,995 101 Freehold
Citadines Presqu'ile Lyon rue Thomassin, Lyon 48.8% 6,699 116 Freehold
Citadines Castellane Marseille rue de rouet, Marseille 48.8% 5,877 97 Freehold
Citadines Prado Chanot Marseille Boulevard de Louvain, Marseille 48.8% 5,390 77 Freehold
Citadines antigone Montpellier Boulevard d’antigone, Montpellier 48.8% 8,914 122 Freehold
Citadines Louvre Paris rue de richelieu, Paris 48.8% 3,663 51 Freehold
Citadines austerlitz Paris rue Esquirol, Paris 48.8% 1,859 49 Freehold
Citadines Prestige Les Halles Paris rue des Innocents, Paris 48.8% 10,648 189 Freehold
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gross Effective Floor Area No. of Tenure Name Location Stake (%) (sqm) units (Years)
iNdiA Citadines Galleria Bangalore Yelanhanka, Bangalore 50% 13,935 203 Freehold (under construction)
Citadines Hitec City Hyderabad Hitec City, Hyderabad 100% 10,388 218 Freehold (under construction)
Citadines oMr Gateway Chennai old Mahabalipuram road, Chennai 100% 18,649 260 Freehold (under construction)
Citadines Parimal Garden ahmedabad Central Business District, ahmedabad 100% 9,118 220 Freehold (under construction)
Somerset Greenways Chennai Sathyadev avenue, Chennai 64.4% 21,933 187 Freehold
Somerset Whitefield Bangalore Whitefield, Bangalore 100% 19,021 280 Freehold (under construction)
JApAN Citadines Karasuma-Gojo Kyoto Shimogyo-ku, Kyoto 40% 4,835 124 Freehold
Citadines Shinjuku Tokyo Shinjuku-ku, Tokyo 40% 6,197 160 Freehold JApAN COrpOrATE LEASiNg actus Hakata V-Tower Hakata-ward, Fukuoka 18.9% 9,248 297 Freehold
Big Palace Kita 14 Jo Kita-ward, Sapporo 18.9% 5,896 140 Freehold
Colonnade Kamiikedai ota-ward, Tokyo 18.9% 5,903 43 Freehold
Fujimi Duplex riz Chiyoda-ward, Tokyo 18.9% 1,824 22 Freehold
Fukuoka College Court Hakata-ward, Fukuoka 18.9% 2,706 112 Freehold
Grand E’terna Chioninmae Higashiyama-ward, Kyoto 18.9% 1,049 18 Freehold
Grand E’terna Nabeshima Nabeshima, Saga 18.9% 1,507 46 Freehold
Grand E’terna Nijojomae Nakagyo-ward, Kyoto 18.9% 1,736 47 Freehold
Grand E’terna Saga Honjocho, Saga 18.9% 4,973 128 Freehold
Grand Mire Miyamachi aoba-ward, Sendai 18.9% 2,306 91 Freehold
Grand Mire Shintera Wakabayashi-ward, Sendai 18.9% 1,711 59 Freehold
Gravis Court Kakomachi Naka-ward, Hiroshima 18.9% 2,270 63 Freehold
Gravis Court Kokutaiji Naka-ward, Hiroshima 18.9% 1,659 48 Freehold
Gravis Court Nishiharaekimae asaminami-ward, Hiroshima 18.9% 1,151 30 Freehold
Infini Garden Hamao District, Fukuoka 30% 36,770 395 Freehold
Kasahokomachi Shimogyo-ward, Kyoto 88.9% 5,699 191 Freehold (House Saison Shijo-dori)
Marunouchi Central Heights Naka-ward, Nagoya 88.9% 1,937 31 Freehold
SaMTY Namba-Minami Naniwa-ward, osaka 18.9% 4,660 123 Freehold
S-residence Fukushima Luxe Fukushima-ward, osaka 18.9% 6,568 179 Freehold
S-residence Gakuenzaka Naniwa-ward, osaka 88.9% 2,822 58 Freehold
S-residence Hommachi Marks Chuo-ward, osaka 18.9% 3,680 110 Freehold
S-residence Midoribashi Serio Higashinari-ward, osaka 18.9% 2,904 100 Freehold
S-residence Namba Viale Naniwa-ward, osaka 88.9% 3,522 116 Freehold
S-residence Shukugawa Hyogo, Kobe 88.9% 3,189 33 Freehold
S-residence Tanimachi 9 chome Tennoji-ward, osaka 18.9% 3,171 104 Freehold
The Grandview osaka Yodogawa-ward, osaka 18.9% 10,156 60 Freehold
Serviced residences As at 31 december 2011
126 127
gross Effective Floor Area No. of Tenure Name Location Stake (%) (sqm) units (Years)
HELd THrOugH ASCOTT rESidENCE TruST (cont'd) pHiLippiNES ascott Makati ayala Centre, Makati City 48.8% 55,255 306 48
Somerset Millennium Makati Legaspi Village, Makati City 48.8% 11,165 146 Freehold
Somerset Salcedo Property Makati Salcedo Village, Makati City 48.8% 5,901 71 Freehold (NLa)
SiNgApOrE Citadines Mount Sophia Property Wilkie road 48.8% 9,370 154 99 Singapore
Somerset Liang Court Property river Valley road 48.8% 27,155 197 97 Singapore
Somerset Grand Cairnhill Singapore Cairnhill road 48.8% 32,954 146 99 SpAiN Citadines ramblas Barcelona ramblas District, Barcelona 48.8% 12,323 131 Freehold
uNiTEd KiNgdOM Citadines Barbican London Goswell road, London 48.8% 7,263 129 Freehold
Citadines Prestige South Kensington Gloucester road, London 48.8% 6,657 92 Freehold London
Citadines Prestige Trafalgar Square Northumberland avenue, London 48.8% 10,903 187 Freehold London
Citadines Prestige Holborn – High Holborn, London 48.8% 10,576 192 Freehold Covent Garden London ViETNAM Somerset Hoa Binh Hanoi Hoang Quoc Viet Street, Hanoi 43.9% 23,845 206 40
Somerset Grand Hanoi Hai Ba Trung, Hanoi 37.1% 44,048 185 45
Somerset West Lake Hanoi Thuy Khue road, Hanoi 34.2% 8,474 90 49
Somerset Chancellor Court Nguyen Thi Minh, Khai Street, 32.7% 26,782 172 48 Ho Chi Minh City Ho Chi Minh City
Somerset Ho Chi Minh City Nguyen Binh Khiem Street, 33.7% 25,207 165 45 Ho Chi Minh City
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gross Effective Floor Area No. of Tenure Name Location Stake (%) (sqm) units (Years)
HELd THrOugH ASCOTT rESidENCE TruST (cont'd) FrANCE (cont'd) Citadines Montmarte Paris avenue rachel, Paris 48.8% 7,989 113 Freehold
Citadines Montparnasse Paris avenue du Maine, Paris 48.8% 3,004 67 Freehold
Citadines Place d’Italie Paris Place d’Italie, Paris 48.8% 8,003 169 Freehold
Citadines Porte de Versailles Paris rue Didot, Paris 48.8% 4,618 80 Freehold
Citadines republique Paris avenue Parmentier, Paris 48.8% 6,857 76 Freehold
Citadines Tour Eiffel Paris Boulevard de Grenelle, Paris 48.8% 8,715 104 Freehold
Citadines Trocadero Paris rue Saint-Didier, Paris 48.8% 9,725 97 Freehold gErMANY Citadines Kurfürstendamm Berlin olivaer Platz, Berlin 48.8% 6,794 118 Freehold
Citadines arnulfpark Munich arnulfstrasse, Munich 48.8% 8,303 146 Freehold iNdONESiA ascott Jakarta Jalan Kebon Kacang raya, Jakarta 48.3% 55,775 198 26
Somerset Grand Citra Jakarta Jalan Prof Dr Satrio Kav 1, Jakarta 28% 30,072 203 30 JApAN Citadines Shinjuku Tokyo Shinjuku-ku, Tokyo 29.3% 6,197 160 Freehold
Somerset azabu East Tokyo Minato-ku, Tokyo 48.8% 5,896 79 Freehold
Somerset roppongi Tokyo Minato-ku, Tokyo 48.8% 4,422 64 Freehold JApAN COrpOrATE LEASiNg asyl Court Nakano Sajakue Tokyo Nakano-ku, Tokyo 48.8% 1,805 62 Freehold
Gala Hachimanyama I Tokyo Suginami-ku, Tokyo 48.8% 2,556 76 Freehold
Gala Hachimanyama II Tokyo Suginami-ku, Tokyo 48.8% 474 16 Freehold
Joy City Koishikawa Shokubutsuen Bunkyo-ku, Tokyo 48.8% 1,281 36 Freehold Tokyo
Joy City Kuramae Tokyo Taito-ku, Tokyo 48.8% 1,970 60 Freehold
Zesty akebonobashi Tokyo Shinjuku-ku, Tokyo 48.8% 375 12 Freehold
Zesty Gotokuji Tokyo Setagaya-ku, Tokyo 48.8% 420 15 Freehold
Zesty Higashi Shinjuku Tokyo Shinjuku-ku, Tokyo 48.8% 515 19 Freehold
Zesty Kagurazaka I Tokyo Shinjuku-ku, Tokyo 48.8% 469 20 Freehold
Zesty Kagurazaka II Tokyo Shinjuku-ku, Tokyo 48.8% 533 20 Freehold
Zesty Kasugacho Tokyo Nerima-ku, Tokyo 48.8% 922 32 Freehold
Zesty Koishikawa Tokyo Bunkyo-ku, Tokyo 48.8% 385 15 Freehold
Zesty Komazawa Daigaku II Tokyo Meguro-ku, Tokyo 48.8% 1,054 29 Freehold
Zesty Nishi Shinjuku III Tokyo Shinjuku-ku, Tokyo 48.8% 915 29 Freehold
Zesty Sakura Shinmachi Tokyo Setagaya-ku, Tokyo 48.8% 619 17 Freehold
Zesty Shin Ekoda Tokyo Nerima-ku, Tokyo 48.8% 526 18 Freehold
Zesty Shoin Jinja Tokyo Setagaya-ku, Tokyo 48.8% 471 16 Freehold
Zesty Shoin Jinja II Tokyo Setagaya-ku, Tokyo 48.8% 629 17 Freehold
Serviced residences As at 31 december 2011
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gross Effective Floor Area Tenure Name Location Stake (%) (sqm) (Years)
COMpLETEd prOJECTS CHiNA raffles City Beijing Dong Cheng District, Beijing 45.3% 103,185 50 (office and Serviced residences)
40 (retail)
raffles City Shanghai Huangpu District, Shanghai 25.3% 133,816 50
SiNgApOrE IoN orchard orchard road 32.7% 87,724 99 years, expiring in March 2105
The orchard residences orchard road 32.7% 38,240 99 years, (175 units) expiring in March 2015
raffles City Singapore North Bridge road/ 26.7% 320,490 99 years, Stamford road/Bras Basah road expiring in July 2078 (retail, office and hotel)
uNiTEd KiNgdOM 99-121 Kensington High Street Central London 33% 34,971 Freehold uNdEr dEVELOpMENT CHiNA raffles City Changning Changning District, Shanghai 36.9% 237,113 50
raffles City Chengdu Wuhou District, Chengdu 45.3% 197,515 40
raffles City Hangzhou Qianjiang New Town, Hangzhou 45.3% 284,503 40
raffles City Ningbo Jiangbei District, Ningbo 45.3% 91,977 40
raffles City Shenzhen Nanshan District, Shenzhen 73.0% 215,500 50
SiNgApOrE Bedok residences & New Upper Changi road/ 82.7% 94,127 99 the site for the mall Bedok North Drive
Westgate Jurong Gateway 58.3% 90,767 99 FuTurE dEVELOpMENTS CHiNA raffles City Chongqing Yuzhong District, Chongqing 51.7% 817,000 40 (Commercial)
70 (residential)
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Mixed developments
rAFFLES CiTY BEiJiNg china
As at 31 december 2011
130 131
of activities in different countries. raG employs an innovative, state-of-the-art Value-at-risk (“Var”) model that is adapted from the banking industry and especially tailored for the real estate industry. It is used as a foundation in the portfolio risk report to measure the absolute and relative risks of the Group’s exposures using a historical simulation method. It also highlights the relevant risks and exposures vis-à-vis the Group’s financial risk appetite (as determined by the rC) and prevailing market conditions.
To complement the Var method as risk measurement for our balance sheet assets and liabilities, raG employs a contingent obligation risk registry to update and capture the Group’s contingent obligations arising from treasury activities, commercial business dealings and legal lawsuits on a regular basis. They are constantly reviewed, marked-to-market using risk reflective pricing models such as Monte Carlo simulation and Binomial Tree techniques and are highlighted quarterly to the rC.
Under the current volatile global economic environment, as a proactive and preventive risk management approach, raG has enhanced the quarterly risk report by incorporating special focus sections which evaluate and create risk impact analysis reports for event risks in various countries, including Singapore, China, Vietnam, Japan and the Middle East. Detailed findings were presented to the rC and where possible, raG proposed mitigating strategies in order to optimise the risk profile. Multiple scenario analysis and stress testing were performed and the outcomes were reported to the rC and to senior management.
raG continues to perform an independent risk evaluation of all individual investment proposals above a stipulated investment value threshold. risk-adjusted weighted average cost of capital and hurdle rates of individual countries and business units are calculated by raG according to their respective risk profiles. They are reviewed annually and when necessary, adjustments are made to reflect higher business risks and costs of investments. Subsequently, these hurdle rates are used as benchmarks for the projected returns of individual investment proposals. Where applicable and possible, raG provides recommendations to improve the structure of investment proposals in order to mitigate the key risks identified and/or optimise the risk return profile.
To promote risk awareness for business development teams and to equip them with optimal risk management skills, raG regularly conducts interactive workshops that allow raG and business development teams to share and transfer experiences learned from previous projects. In 2011, raG visited Beijing and Shanghai offices to train all respective business development teams in the investment risk management process.
as CapitaLand continues to adopt a focus, balance and scale strategy to achieve maximum economic value to shareholders, under the volatile global economic environment, raG plays a crucial role in ensuring that the risk-underwriting process at all levels of the organisation will result in an outcome with an optimised risk-return relationship in order to deliver above-market shareholder returns. CapitaLand strives to be a leader in proactive risk management techniques and processes so that market volatilities can be exploited to preserve and ultimately enhance economic value for the company.
RaG employs an innovative,
state-of-the-art Value-at-Risk
(“VaR”) model that is adapted
from the banking industry and
especially tailored for the real
estate industry
RaG regularly conducts
interactive workshops
that allow RaG and business development
teams to share and transfer experiences
learned from previous projects
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risk Assessment and Management
Financial crisis and market volatility is not something unexpected for CapitaLand as a real estate company with a complete value chain offering of homes, offices, shopping malls, serviced residences and financial services. Since the inception of CapitaLand in 2000, it was clear to the Board and senior management that there was a need to establish a proactive and independent risk management function. a robust risk management framework was institutionalised across the Group. as an integral part of the strategic and operational decision-making process at all levels, risk assessment and management adopts a modern, dynamic and proactive risk management approach.
a risk Committee (“rC”) was established in 2002, which consists of three independent board directors to guide the company in setting the risk policy. Currently the rC comprises Mr James Koh Cher Siang (Chairman), Mr richard Hale and Mrs arfat Pannir Selvam. The Group’s President and CEo, Mr Liew Mun Leong and other senior management regularly attend rC meetings. These members are assisted by a professional, highly specialised and independent risk assessment Group (“raG”).
on a quarterly basis, raG generates and presents to the rC a comprehensive group-wide portfolio risk report that measures a spectrum of risks and keeps the Board and management apprised of the necessary risk profiles in respect
as an integral part of the strategic and operational decision-making process at all levels, risk assessment and management adopts a modern, dynamic and proactive risk management approach
CapitaLand’s Comprehensive Modern risk Management Framework
Framework activity Purpose
align Risk appetite
vis-à-vis Strategy
country asset allocation Limits &
Wacc and hurdle Rates
Risk Monitoring Enhance Risk Response
Decisions Quarterly Group-Wide
Portfolio Risk Reporting
Risk Underwriting Sound Risk Underwriting
Process to align with Board approved Risk Strategy
investment Risk Management Process & Risk Trainings
Risk Strategy
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in the Euromoney real Estate awards 2011, “Best Corporate Governance” and “Best Managed Company” in Financeasia’s Best Companies Poll 2011 and “Best Financial Disclosure (Singapore)” by World Finance Investor relations awards 2011. CapitaLand also won “Best Investor relations (real Estate including property development)”, “Best CFo for Singapore & Pan asia” and “Best Investor relations Professional” by Ir Magazine South East asia awards 2011 as well as the inaugural Best Investor relations in aSEaN by alpha Southeast asia.
2011 AWArdS
2011 iNVESTOr rELATiONS CALENdAr
Alpha Southeast Asia • Best Investor Relations in ASEAN
Euromoney real Estate global poll 2011 • Best Global Mixed-use Developer • Best Retail Developer in Asia • Best Mixed-use Developer in Asia • Best Developer in China – Overall
FinanceAsia Best Companies poll 2011 (Singapore) • Best Corporate Governance • Best Managed Company • Best CEO in Singapore – Liew Mun Leong • Best CFO in Singapore – Olivier Lim • Best Investor Relations (2nd)
ir Magazine SEA Awards 2011 • Best Investor Relations by Sector – Real Estate • Best Investor Relations by a CFO (Singapore & Pan asia) – olivier Lim • Best Investor Relations Professional – Harold Woo & Cheong Kwok Mun
institutional investor • Best CFO for Property Sector (2nd) – olivier Lim • Best IR Companies for Property Sector (2nd)
Singapore Corporate Awards 2011 • Best Investor Relations (Large Cap) – Silver
Securities investors Assocation Singapore (SiAS) • Most Transparent Company (Property Category) – 11th Consecutive Year
World Finance investor relations Awards (Singapore) • Best Financial Disclosure • Best Investor Relations Website
1ST QuArTEr
• FY2010 financial results briefing to media and analysts and live webcast
• CapitaLand Debt Investor relations Forum
• Goldman Sachs Macro Conference
• SGX-UBS Global Markets Conference
• Credit Suisse Asian Investment Conference
• J P Morgan Asia Pacific real Estate Conference
2Nd QuArTEr
• Annual General Meeting
• Release of 1Q2011 financial results
• Citi Asia Pacific Property Conference
• BofA Merrill Lynch Asian Star Conference
• DB Access Asia Conference
• HSBC ASEAN Conference
3rd QuArTEr
• 1H2011 financial results briefing to media and analysts and live webcast
• DBS Vickers Pulse of Asia
• Macquarie ASEAN Conference
• BofA Merrill Lynch Real Estate Conference
• Macquarie Non-Deal roadshow
• CLSA Investors’ Forum
4TH QuArTEr
• Release of 3Q2011 financial results
• Morgan Stanley asia Pacific Summit
• UBS Global Real Estate CEo Conference
• Credit Suisse Non-Deal roadshow
• Bank of New York Mellon Depository receipt Issuers Conference
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Stakeholder Communications
CapitaLand is committed to communicating regularly with shareholders, investors, analysts and the media to provide timely and consistent updates on quarterly financial results and corporate activities.
The Group maintains a high level of investor interaction through face-to-face meetings, teleconferences, investor conferences, roadshows and site visits. In 2011, Senior Management conducted more than 500 meetings with fund managers and institutional investors. In addition, management also attended more than 15 conferences including CLSa Investors’ Forum, Morgan Stanley asia Pacific Summit 2011, Citi asia Pacific Property Conference, Bank of america Merrill Lynch asian Star Conference and Credit Suisse asian Investment Conference across London, amsterdam, Edinburgh, New York, Boston, Toronto, Montreal, Baltimore, Philadelphia, San Francisco, Frankfurt, Hong Kong and Singapore. Besides overseas conferences, CapitaLand participated in the asia Investment Conference and Exhibition (aICE) organised by Securities Investors association Singapore (SIaS) which attracted 11,000 retail investors over a weekend. It is CapitaLand’s efforts towards cultivating the retail investor base and communicating the Group’s strategies. To diversify its funding source, the Group organised its inaugural Debt Investor relations Forum to reach out to Debt Capital Market investors and attracted over 100 targeted participants.
The Investor relations team facilitated 36 site visits for fund managers and investors to cities like Shanghai, Beijing, Chengdu, Ho Chi Minh City and also in Singapore where they gained a better understanding of CapitaLand’s developments such as The Paragon, The Pinnacle, raffles City Shanghai, raffles City Beijing, raffles City Chengdu, The Vista and Beau rivage in Ho Chi Minh City and residential sites in Singapore such as The Interlace, d’Leedon and The orchard residences.
CapitaLand engages the media and investment community through news releases, media/analysts briefings and familiarisation trips. The user-friendly website provides comprehensive company information and real-time updates which are also available on the Singapore Exchange website.
CapitaLand also proactively engages the media in the markets where it has a presence. In 2011, key media from Beijing, Shanghai and Chengdu visited Singapore and left with a first-hand insight of the Group’s properties and operations. Interviews conducted with senior management by key Singapore print and broadcast media also increased the understanding of the Group’s strategy and operations. aside from interviews, a media familiarisation trip was organised to showcase the Group’s residential developments in Hangzhou, Suzhou, and Shanghai. During the trip, CapitaLand shared with the media how it intends to deepen its presence in the China market with its offering of residential – including mid to high end properties and affordable housing, as well as malls and serviced residences, which helped to reinforce CapitaLand’s long-term commitment in the China market.
The Group’s dedication and communication efforts have been recognised by the investment community. In 2011, CapitaLand won multiple awards, including the “Most Transparent Company (Property Category)” award in the Securities Investors association Singapore (SIaS) Investors’ Choice awards for the 11th consecutive year, “Best Mixed-Use Developer in asia”
The investor Relations team facilitated 36 site visits for fund managers and investors to cities like Shanghai, Beijing, chengdu, ho chi Minh city and also in Singapore where they gained a better understanding of capitaLand’s developments
in 2011, capitaLand won multiple awards, including the “Most Transparent company (Property category)” award in the Securities investors association Singapore (SiaS) investors’ choice awards for the 11th consecutive year
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Value Added Statements
2011 2010 S$ million S$ million restated*
Value Added From:
revenue earned 3,019.6 3,383.4
Less: Bought in materials and services (1,775.9) (1,893.9)
gross Value Added 1,243.7 1,489.5
Share of results of associates and joint ventures 876.6 959.8
Exchange losses (net) (33.2) (27.5)
other operating income (net) 623.0 734.1
1,466.4 1,666.4
Total Value Added 2,710.1 3,155.9
distribution:
To employees in wages, salaries and benefits 526.1 475.3
To government in taxes and levies 261.9 319.9
To providers of capital in:
– Net interest on borrowings 458.2 428.5
– Dividends to shareholders 256.2 447.4
1,502.4 1,671.1
Balance retained in the Business:
Depreciation and amortisation 40.6 59.6
revenue reserves net of dividends to owners of the Company 801.1 978.3
Non-controlling interests 365.6 426.5
1,207.3 1,464.4
Non-production Costs:
allowance for doubtful receivables 0.4 6.4
Fidelity losses arising from financial irregularities – 14.0
Total distribution 2,710.1 3,155.9
productivity Analysis:
Value added per employee (S$’000)# 167 230
Value added per dollar of employment cost (S$) 2.36 3.13
Value added per dollar sales (S$) 0.41 0.44
# Based on average 2011 headcount of 7,447 (2010: 6,482).
* 2010 comparatives have been restated to take into account the retrospective adjustments relating to INT FRS 115 Agreement for the Construction of Real Estate.
2011 2010 Note S$ million S$ million restated*
Net Operating profit Before Tax 737.2 1,176.5
adjust for:
Share of results of associates and joint ventures 876.6 959.8
Interest expense 490.3 458.8
others 71.3 118.5
Adjusted profit Before interest and Tax 2,175.4 2,713.6
Cash operating taxes 1 (219.8) (279.1)
Net Operating profit After Tax (NOpAT) 1,955.6 2,434.5
average capital employed 2 27,713.7 26,289.9
Weighted average cost of capital (%) 3 5.60 6.40
Capital Charge (CC) 1,552.0 1,682.6
Economic Value Added (EVA) [NOpAT – CC] 403.6 751.9
Non-controlling interests (99.3) (136.3)
group EVA attributable to Owners of the Company 304.3 615.6
* 2010 comparatives have been restated to take into account the retrospective adjustments relating to INT FRS 115 Agreements for the Contruction of Real Estate.
Note 1: The reported current tax is adjusted for the statutory tax impact of interest expense.
Note 2: Monthly average capital employed included equity, interest-bearing liabilities, timing provision, cumulative goodwill and present value of operating leases.
Major Capital Components S$ million
Borrowings 10,562.4 Equity 16,338.7 Others 812.6
Total 27,713 .7
Note 3: The weighted average cost of capital is calculated as follows: i) Cost of Equity using Capital Asset Pricing Model with market risk premium at 5.0% (2010: 5.0%) per annum;
ii) Risk-free rate of 2.39% (2010: 2.59%) per annum based on yield-to-maturity of Singapore Government 10-year Bonds;
iii) Ungeared beta ranging from 0.50 to 0.90 (2010: 0.64 to 1.09) based on the risk categorisation of CapitaLand's strategic business
units; and
iv) Cost of Debt rate at 3.57% (2010: 4.22%) per annum using 5-year Singapore Dollar Swap Offer rate plus 175.0 basis points (2010: 187.5 basis points).
Economic Value Added Statements
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Other information
1. dirECTOrS’ rEMuNErATiON (a) directors’ Compensation Table for the Financial Year Ended 31 december 2011: Salary Bonus and directors’ fees inclusive inclusive of other benefits of attendance fees (3) AWS and inclusive of employer’s employer’s Awards of Cash Shares/units CpF CpF (1) shares (2) component component Total directors of the Company $ $ $ $ $ $
payable by Company: Executive director Liew Mun Leong 1,373,680.00 2,601,541.07 1,506,034.00 – – 5,481,255.07
Sub-Total 1 1,373,680.00 2,601,541.07 1,506,034.00 – – 5,481,255.07 Non-Executive directors Dr Hu Tsu Tau (4) – – – 246,700.00 – 246,700.00 Peter Seah Lim Huat – – – 166,040.00 71,160.00 237,200.00 Jackson Peter Tai (4) – – – 67,292.00 – 67,292.00 richard Edward Hale (4) – – – 185,400.00 – 185,400.00 James Koh Cher Siang – – – 133,700.00 57,300.00 191,000.00 arfat Pannir Selvam – – – 145,320.00 62,280.00 207,600.00 Prof Kenneth Stuart Courtis – – – 136,290.00 58,410.00 194,700.00 Dr Fu Yuning (4) – – – 86,700.00 – 86,700.00 John Powell Morschel – – – 115,488.10 49,494.90 164,983.00 Ng Kee Choe – – – 86,671.90 37,145.10 123,817.00 Simon Claude Israel (5) – – – 126,700.00 54,300.00 181,000.00 Euleen Goh Yiu Kiang (6) – – – 23,246.30 9,962.70 33,209.00
1,519,548.30 (4) 400,052.70 (4)
Sub-Total 2 – – – 1,919,601.00 (4) 1,919,601.00 (4)
payable by Subsidiaries: Liew Mun Leong – – – 326,100.00 (7) 147,000.00 (7) 473,100.00 richard Edward Hale – – – 80,000.00 20,000.00 100,000.00 James Koh Cher Siang – – – 99,200.00 24,800.00 124,000.00 arfat Pannir Selvam – – – 81,200.00 34,800.00 116,000.00
586,500.00 226,600.00
Sub-Total 3 – – – 813,100.00 813,100.00 Total for directors of Company 1,373,680.00 2,601,541.07 1,506,034.00 2,732,701.00 8,213,956.07
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2011 is lower than 2010 largely due to lower portfolio gain. The EVA bonus accrued for year 2011 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) For the year 2011, no contingent awards of shares has been granted under the CapitaLand Restricted Share Plan 2010 (“RSP”) to all Directors except for Mr Liew Mun Leong. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan 2010 (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
1. dirECTOrS’ rEMuNErATiON (cont’d)
(3) The Directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(4) The total compensation of the non-executive Directors for 2011 of an aggregate amount of S$1,919,601, if approved, will be paid out as to S$1,519,548.30 in cash, and S$400,052.70 in the form of share awards under the RSP. Consequently, and in accordance with the “Directors’ Fee Policy”, a non-executive Director who served on the Board during 2011 (with the exception of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning, who are retiring from the Board and Mr Jackson Peter Tai who retired from the Board during 2011) will be remunerated as to about 70 per cent. (70%) of his total Directors’ fees in cash and about 30 per cent. (30%) of his total Directors’ fees in the form of shares in the Company. The number of shares to be awarded will be determined by reference to the volume-weighted average price of a share on the Singapore Exchange Securities Trading Limited over the 14 trading days immediately following the date of the Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu Tsu Tau, Mr Richard Edward Hale, Dr Fu Yuning and Mr Jackson Peter Tai will receive all of their Directors’ fees in cash.
(5) Mr Simon Claude Israel was an employee of Temasek Holdings (Private) Limited (“Temasek”) until 30 June 2011. His fee for the period from 1 January 2011 to 30 June 2011 is S$92,700 and will be paid entirely in cash to Temasek. His fee for the period from 1 July 2011 to 31 December 2011 is S$88,300 and will be paid to him in the portion of S$34,000 in cash and S$54,300 in the form of share awards under the RSP. His total directors’ fees of S$181,000 for 2011 will be paid in accordance with the Directors’ Fee Policy (see note (4) above).
(6) Ms Euleen Goh Yiu Kiang was appointed as Director of the Company on 1 October 2011.
(7) Mr Liew Mun Leong is an employee of CapitaLand Limited. The cash component of his directors’ fees will be paid to CapitaLand Limited, but he will be entitled to retain the shares component of the subsidiaries and/or units component of the real estate investment trusts managed by the subsidiaries.
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1. dirECTOrS’ rEMuNErATiON (cont’d) (b) directors’ Compensation Table for the Financial Year Ended 31 december 2010:
Bonus and Salary inclusive other benefits directors’ fees of AWS and inclusive of inclusive of Awards of employer’s CpF employer’s CpF (1) attendance fees (2) shares (3) Total directors of the Company $ $ $ $ $
payable by Company: Dr Hu Tsu Tau – – 193,000 52,404 245,404 Peter Seah Lim Huat – – 169,250 63,123 232,373 Liew Mun Leong 1,298,840 3,602,021 – 1,792,701 6,693,562 Lim Chin Beng (4) – – 31,678 20,775 52,453 Jackson Peter Tai – – 157,400 36,921 194,321 richard Edward Hale – – 138,000 56,374 194,374 Dr Victor Fung Kwok King (5) – – 22,900 – 22,900 James Koh Cher Siang – – 140,000 48,831 188,831 arfat Pannir Selvam – – 151,000 52,801 203,801 Prof Kenneth Stuart Courtis – – 155,700 36,921 192,621 Dr Fu Yuning – – 61,000 22,629 83,629 John Powell Morschel (6) – – 77,500 21,041 98,541 Ng Kee Choe (6) – – 56,292 – 56,292 Simon Claude Israel (6) – – 55,500 – 55,500
Sub-Total 1 1,298,840 3,602,021 1,409,220 2,204,521 8,514,602
payable by Subsidiaries: Liew Mun Leong – – – 67,058 67,058 Lim Chin Beng – – 63,500 – 63,500 richard Edward Hale – – 80,000 – 80,000 James Koh Cher Siang – – 117,442 6,457 123,899 arfat Pannir Selvam – – 69,964 29,517 99,481 Dr Fu Yuning – – 46,000 18,679 64,679
Sub-Total 2 – – 376,906 121,711 498,617
Total for directors of the Company 1,298,840 3,602,021 1,786,126 2,326,232 9,013,219
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2010 is lower than 2009 due to lower portfolio gain. The EVA bonus accrued for year 2010 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) The directors’ fees were approved by the shareholders and had since been paid.
(3) For the year 2010, the awards granted under the CapitaLand Restricted Stock Plan (“RSP”) to all Directors except for Mr Liew Mun Leong are time-based with no performance conditions and will be released over a vesting period of two years. The awards of shares figures disclosed are based on the fair value of the shares at the time of grant. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
(4) Mr Lim Chin Beng retired from the Board of the Company on 16 April 2010. He continued to be a Director and the Chairman of The Ascott Limited, a wholly-owned subsidiary.
(5) Dr Victor Fung Kwok King had declined the grant of award of shares. He retired from the Board of the Company on 16 April 2010.
(6) Mr John Powell Morschel, Mr Ng Kee Choe and Mr Simon Claude Israel were appointed as Directors of the Company on 1 February 2010, 16 April 2010 and 1 July 2010, respectively. Fees are paid to Mr Simon Israel’s employer.
1. dirECTOrS’ rEMuNErATiON (cont’d) (c) Number of directors of CapitaLand Limited in remuneration Bands:
remuneration Bands 2011 2010
$500,000 and above 1 1 $250,000 to $499,999 0 0 Below $250,000 12 13
Total 13 14
2 iNTErESTEd pErSON TrANSACTiONS Interested person transactions carried out during the financial year which fall under Chapter 9 of the Listing Manual of
the Singapore Exchange Securities Trading Limited are as follows: 2011 The group $’000
Transactions with Temasek Holdings (private) Limited and its associates: Establishment of a joint venture 350,000 acquisition of an associate 360,000 Sale of goods and services 11,178 Purchase of goods and services 1,378 Transactions with associate of Singapore Airlines Limited: Sale of goods and services 574 Transactions with associate of Singapore Telecommunications Limited: Purchase of goods and services 378 Transactions with associate of Sembcorp industries Ltd: Purchase of goods and services 280
3 KEY ExECuTiVES’ rEMuNErATiON Key Executives’ Compensation Table for the Financial Year Ended 31 December 2011:
Total Compensation (1) Bands Executives
$750,000 to $999,999 arthur Lang Tao Yih (2) $1,000,000 to $1,999,999 – $2,000,000 to $2,249,999 Jennie Chua Kheng Yeng $2,250,000 to $2,499,999 – $2,500,000 to $2,749,999 Wen Khai Meng and olivier Lim Tse Ghow $2,750,000 to $2,999,999 Lim Ming Yan
(1) Total compensation comprises salary, annual wage supplement, bonus, employer’s CPF, contingent awards of shares and other benefits in kind. The bonus is based on an accrual basis and accrued for the performance of the same year. The contingent awards of shares are based on the fair value of the shares comprised in the baseline awards under the CapitaLand Restricted Share Plan 2010 (“RSP”) and the CapitaLand Performance Share Plan 2010 (“PSP”) at the time of grant. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP.
(2) Mr Arthur Lang Tao Yih joined CapitaLand Limited on 1 August 2011.
4 uSE OF prOCEEdS In September 2009, the Company issued S$1.2 billion principal amount of convertible bonds due in 2016. as of
December 2011, the Company has fully utilised the proceeds.
5 AppOiNTMENT OF AudiTOrS The Company confirms that it has complied with rules 712 and 715 or 716 of the Listing Manual of the Singapore
Exchange Securities Trading Limited in relation to its auditing firms.
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Shareholding Statistics
SHARE CAPITAL Paid-up Capital S$6,344,020,090.20 Number of Issued and Paid-up Shares (including Treasury Shares) 4,269,479,858 Number of Treasury Shares 25,209,000 Number of Issued and Paid-up Shares (excluding Treasury Shares) 4,244,270,858 Class of Shares Ordinary Shares Voting Rights One vote per share. The Company cannot exercise any voting
rights in respect of shares held by it as treasury shares.
TWENTY LARGEST SHAREHOLDERS As shown in the Register of Members and Depository Register Name No. of Shares % (1)
1 Temasek Holdings (Private) Limited 1,680,704,140 39.60 2 Citibank Nominees Singapore Pte Ltd 604,997,683 14.25 3 DBS Nominees (Private) Limited 412,529,188 9.72 4 DBSN Services Pte Ltd 271,522,956 6.40 5 HSBC (Singapore) Nominees Pte Ltd 218,975,429 5.16 6 United Overseas Bank Nominees (Private) Limited 136,064,291 3.21 7 Raffles Nominees (Pte) Limited 62,534,927 1.47 8 BNP Paribas Securities Services Singapore Branch 27,584,713 0.65 9 Bank of Singapore Nominees Pte Ltd 24,056,617 0.57 10 DB Nominees (Singapore) Pte Ltd 17,851,375 0.42 11 OCBC Nominees Singapore Private Limited 13,753,199 0.32 12 BNP Paribas Nominees Singapore Pte Ltd 13,604,128 0.32 13 Pei Hwa Foundation Limited 13,230,335 0.31 14 Lee Pineapple Company (Pte) Limited 10,000,000 0.24 15 UOB Kay Hian Private Limited 9,649,453 0.23 16 Phillip Securities Pte Ltd 9,361,851 0.22 17 Merrill Lynch (Singapore) Pte Ltd 8,031,351 0.1 9 18 DBS Vickers Securities (Singapore) Pte Ltd 7,797,534 0.1 8 19 OCBC Securities Private Limited 6,838,010 0.16 20 Lee Seng Wee 5,200,000 0.12
Total 3,554,287,180 83.74 SUBSTANTIAL SHAREHOLDERS As shown in the Register of Substantial Shareholders as at 28 February 2012 No. of ordinary shares in which No. of ordinary shares in which substantial shareholder substantial shareholder Substantial Shareholder has a direct interest is deemed to have an interest
Temasek Holdings (Private) Limited 1,680,704,140 34,773,934 (*)
Note: (*) By virtue of Section 7 of the Companies Act, Cap. 50 of Singapore, Temasek Holdings (Private) Limited (“Temasek“) is deemed to have an
interest in 34,773,934 ordinary shares in which its subsidiary and associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance.
SIZE OF HOLDINGS No. of No. of Size of Shareholdings shareholders % shares % (1)
1 – 999 928 1.38 322,759 0.01 1,000 – 10,000 54,487 80.80 219,741,283 5.18 10,001 – 1,000,000 11,972 17.75 410,395,760 9.67 1,000,001 and above 48 0.07 3,613,811,056 85.14
Total 67,435 100.00 4,244,270,858 100.00 Approximately 59.45%(1) of the issued ordinary shares are held in the hands of the public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited is complied with. Note: (1) Percentage is calculated based on the total number of 4,244,270,858 issued shares, excluding treasury shares.
As at 28 February 2012
Statutory Accounts
Contents Directors’ Report 142
Statement by Directors 154
Independent Auditors’ 155 Report to the Members of CapitaLand Limited
Balance Sheets 156
Income Statements 157
Statements of 158 Comprehensive Income
Statements of 159 Changes in Equity
Consolidated Statement 162 of Cash Flows
Notes to the 164 Financial Statements
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We are pleased to submit this annual report to the members of the Company, together with the audited financial statements for the financial year ended 31 December 2011.
Directors The directors in office at the date of this report are as follows:
Dr Hu Tsu Tau Peter Seah Lim Huat Liew Mun Leong Richard Edward Hale James Koh Cher Siang Arfat Pannir Selvam Professor Kenneth Stuart Courtis Dr Fu Yuning John Powell Morschel Ng Kee Choe Simon Claude Israel Euleen Goh Yiu Kiang (appointed on 1 October 2011)
Directors’ interests in shares or Debentures Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures or options of the Company or of related corporations either at the beginning of the financial year (or date of appointment, if later) or at the end of the financial year.
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50, particulars of interests of directors who held office at the end of the financial year in shares, debentures, options and awards in the Company and its related corporations are as follows:
holdings in the name of the director, spouse and/or infant children
at beginning of the year/date of at end of appointment the year
the company Ordinary shares Dr Hu Tsu Tau 211,893 279,675 Peter Seah Lim Huat 267,417 294,807 Liew Mun Leong 3,356,436 3,571,915 Richard Edward Hale 839,549 864,467 James Koh Cher Siang 193,633 253,999 Arfat Pannir Selvam 179,799 201,039 Professor Kenneth Stuart Courtis 117,697 133,688 Dr Fu Yuning – 2,887 John Powell Morschel – 2,684 Ng Kee Choe 10,000 10,000 Simon Claude Israel – 50,000 Euleen Goh Yiu Kiang 5,572 5,572
Directors’ interests in shares or Debentures (cont'd)
holdings in the name of the director, spouse and/or infant children
at beginning of the year/date of at end of appointment the year
the company (cont'd) Options to subscribe for ordinary shares exercisable from 25/02/2007 to 24/02/2011 at an exercise price of $3.22 per share Dr Hu Tsu Tau 41,760 – James Koh Cher Siang 34,800 – Contingent award of Performance shares1 to be delivered after 2010 Liew Mun Leong (368,726 shares) 0 to 737,4523 –¶ ¶ No share was released under the 2008 award Contingent award of Performance shares1 to be delivered after 2011 Liew Mun Leong (370,258 shares) 0 to 740,516 3 0 to 740,516 3 Contingent award of Performance shares1 to be delivered after 2012 Liew Mun Leong (381,039 shares) 0 to 762,0783 0 to 762,0783 Contingent award of Performance shares1 to be delivered after 2013 Liew Mun Leong (359,200 shares) – 0 to 718,4003 Unvested Restricted shares2 to be delivered after 2008 Liew Mun Leong 53,5546 – Unvested Restricted shares2 to be delivered after 2009 Dr Hu Tsu Tau 19,3365 – Peter Seah Lim Huat 19,3365 – Liew Mun Leong 171,9587 85,9806
Richard Edward Hale 17,7255 – James Koh Cher Siang 19,3365 – Arfat Pannir Selvam 14,5035 – Professor Kenneth Stuart Courtis 11,2805 – Unvested Restricted shares2 to be delivered after 2010 Dr Hu Tsu Tau 13,3734 6,6875
Peter Seah Lim Huat 16,108 4 8,0545
Liew Mun Leong 0 to 301,9134 151,8967
Richard Edward Hale 14,3864 7,1935
James Koh Cher Siang 12,4614 6,2315
Arfat Pannir Selvam 13,474 4 6,7375
Professor Kenneth Stuart Courtis 9,4224 4,7115
Dr Fu Yuning 5,7754 2,8885
John Powell Morschel 5,3694 2,6855 Contingent award of Restricted shares2 to be delivered after 2011 Liew Mun Leong (197,000 shares) – 0 to 295,5004 $1.3 billion convertible bonds 3.125% due 2018 (Aggregate principal amount of bonds which remains outstanding is $1.05 billion) Liew Mun Leong $1,500,000 $1,500,000
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Directors’ interests in shares or Debentures (cont'd)
holdings in the name of the director, spouse and/or infant children
at beginning of the year/date of at end of appointment the year
related corporations capitaMalls asia Limited Ordinary shares Dr Hu Tsu Tau 29,000 29,000 Peter Seah Lim Huat 29,000 29,000 Liew Mun Leong 442,000 456,540 Richard Edward Hale 38,000 38,000 James Koh Cher Siang 43,000 44,400 Arfat Pannir Selvam 54,000 60,400 Dr Fu Yuning 54,000 58,050 Ng Kee Choe 130,000 130,000 Unvested Restricted shares2 to be delivered after 2010 Liew Mun Leong 29,0804 14,5405 James Koh Cher Siang 2,8004 1,4005 Arfat Pannir Selvam 12,8004 6,4005 Dr Fu Yuning 8,100 4 4,0505 capitaMalls asia treasury Limited Liew Mun Leong – $75 million 1.00% Bonds due 2012 – $1,000,000 – $125 million 2.15% Bonds due 2014 – $2,000,000 the ascott capital pte Ltd Liew Mun Leong – $150 million 4.70% Fixed Rate Notes due 2011 $1,000,000 – – $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 $1,000,000 – $50 million 5.15% Fixed Rate Notes due 2014 $1,000,000 $1,000,000 Euleen Goh Yiu Kiang – $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 $1,000,000 capitaLand treasury Limited Euleen Goh Yiu Kiang – $350 million 4.30% Fixed Rate Notes due 2020 $250,000 $250,000 Footnotes: 1 Performance shares are shares under awards pursuant to the CapitaLand Performance Share Plan 2000 and CapitaLand Performance
Share Plan 2010 (collectively referred to as “CapitaLand Performance Share Plan”). 2 Restricted shares are shares under awards pursuant to the CapitaLand Restricted Stock Plan 2000 and CapitaLand Restricted Share
Plan 2010 (collectively referred to as “CapitaLand Restricted Stock/Share Plan”) or CMA Restricted Stock Plan. 3 The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period.
No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
4 The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of two to three years. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The awards granted to non-executive directors in 2010 are time-based with no performance conditions and will be released over a vesting period of two years.
5 Being the unvested half of the award. 6 Being the unvested one-third of the award. 7 Being the unvested two-thirds of the award. There was no change in any of the above-mentioned directors’ interests in the Company between the end of the financial year and 21 January 2012.
Directors’ interests in contracts During the financial year, the directors’ interests in contracts relate to professional fees of $6,500 paid or payable to Selvam LLC, of which Mrs Arfat Pannir Selvam is a shareholder.
Save as disclosed above, since the end of the last financial year, no other director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member or with a company in which he has a substantial financial interest.
Directors’ emoluments are disclosed in “Other Information”.
arrangeMents to enabLe Directors to acquire shares anD Debentures Except as disclosed under the “Directors’ Interests in Shares or Debentures” and “Share Plans” sections of this report, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
share pLans The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the Share Plans. The ERCC members are Mr Peter Seah Lim Huat (Chairman), Mr Ng Kee Choe and Mr Simon Claude Israel.
(a) capitaLand share option plan, performance share plan and restricted stock/share plan At the Extraordinary General Meeting held on 16 April 2010, shareholders approved a new CapitaLand Performance
Share Plan 2010 (“PSP 2010”) and CapitaLand Restricted Share Plan 2010 (“RSP 2010”). These plans replaced the CapitaLand Performance Share Plan 2000 and CapitaLand Restricted Stock Plan 2000 which were terminated. All awards granted under the previous share plans prior to its termination will continue to be valid and be subject to the terms and conditions of the plans. The first grant of award under the new share plans was made in March 2011. The duration of each share plan is 10 years commencing on 16 April 2010.
under the PSP 2010, the awards granted are conditional on performance targets set based on medium-term corporate objectives. Awards represent the right of a participant to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the Company achieving prescribed performance target(s). Awards are released once the ERCC is satisfied that the prescribed target(s) have been achieved. There are no vesting periods beyond the performance achievement periods.
under the RSP 2010, awards granted to eligible participants vest only after the satisfactory completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-based restricted awards). No minimum vesting periods are prescribed under the RSP 2010.
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share pLans (cont'd) (a) capitaLand share option plan, performance share plan and restricted stock/share plan (cont'd) Awards granted under the RSP 2010 differ from awards granted under the PSP 2010 in that an extended vesting
period is normally imposed beyond the performance target completion date, that is, they also incorporate a time-based service condition as well, to encourage participants to continue serving the Group beyond the achievement date of the pre-determined performance target(s). In addition, the RSP 2010 also enable grants of fully paid shares to be made to non-executive directors as part of their remuneration in respect of their office as such in lieu of cash.
The aggregate number of new shares which may be allotted, issued and/or delivered pursuant to awards granted under the Share Plans on any date, when aggregated with existing shares (including shares held in treasury and cash equivalents) delivered and/or to be delivered, pursuant to the Shares Plans, and all shares, options or awards granted under any other share schemes of the Company then in force, shall not exceed 8% of the total number of issued shares (excluding treasury shares) from time to time.
(b) options exercised The Company ceased to grant options under the CapitaLand Share Option Plan since 2007. During the financial year,
there were new ordinary shares issued for cash in the capital of the Company and its subsidiary pursuant to the exercise of options granted:
exercise price number of name of company (per share) shares issued
CapitaLand Limited $0.30 to $3.22 1,120,367 Australand A$1.10 9,400
Save as disclosed above, there were no shares issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company and its subsidiary.
(c) unissued shares under options At the end of the financial year, there were the following unissued ordinary shares of the Company under options: exercise price number of number expiry (per share) unissued shares of holders Date $ under options
the company Group Executives 9 10/05/2012 0.49 52,833 19 28/02/2013 0.30 218,867 4 29/08/2013 0.30 7,846 58 27/02/2014 0.50 562,275 6 27/08/2014 0.85 39,235 158 25/02/2015 1.72 1,549,232 19 26/08/2015 2.15 82,877 375 24/02/2016 3.18 5,771,764 1 19/06/2016 3.65 87,350 49 01/09/2016 4.09 627,965
Total 9,000,244
share pLans (cont'd) (c) unissued shares under options (cont'd) The aggregate number of options granted since the commencement of the CapitaLand Share Option Plan to the end
of the financial year is as follows:
aggregate options granted since the aggregate aggregate aggregate commencement of the options options lapsed/ outstanding participants capitaLand share option plan exercised cancelled options
Directors of the Company: Dr Hu Tsu Tau 281,760 (281,760 ) – – Peter Seah Lim Huat 494,460 (494,460) – – Liew Mun Leong 6,257,200 (6,257,200) – – Richard Edward Hale 608,230 (608,230) – – James Koh Cher Siang 134,800 (134,800) – – Arfat Pannir Selvam 100,880 (100,880) – –
7,877,330 (7,877,330) – – Non-Executive Directors of subsidiaries (including former directors of the Company) 10,746,540 (9,990,130 ) (756,410 ) – Group Executives (excluding Liew Mun Leong) 138,155,955 (94,677,505) (34,478,206) 9,000,244 Parent Group Executives and others 2,662,482 (2,232,834) (429,648) –
Total 159,442,307 (114,777,799) (35,664,264) 9,000,244
Save as disclosed above, there were no unissued shares of the Company or its subsidiary under options as at the end of the financial year.
(d) awards under the capitaLand performance share plan During the financial year, the ERCC of the Company has granted awards which are conditional on targets set for a
performance period, currently prescribed to be a three-year performance period. A specified number of shares will only be released by the ERCC to the recipient at the end of the qualifying performance period, provided the threshold targets are achieved.
The final number of shares to be released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. Conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
Details of the movement in the awards of the Company during the year were as follows:
<--- Movements during the year --->
balance as at Lapsed/ balance as at 1 January 2011 granted cancelled 31 December 2011 Year of no. of no. of no. of no. of no. of no. of award holders shares shares shares holders shares
2008 66 2,581,903 – (2,581,903) – – 2009 73 3,497,711 – (215,984) 69 3,281,727 2010 56 3,139,866 – (292,039) 51 2,847,827 2011 – – 3,324,300 (184,800) 62 3,139,500
9,219,480 3,324,300 (3,274,726) 9,269,054
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share pLans (cont'd) (e) awards under the capitaLand restricted stock/share plan During the financial year, the ERCC of the Company has granted awards which are conditional on targets set for a
performance period, currently prescribed to be a one-year performance period. A specified number of shares will only be released by the ERCC to the recipients at the end of the qualifying performance period, provided the threshold targets are achieved.
The final number of shares to be released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. Once the final number of shares has been determined, it will be released over a vesting period of two years for non-executive directors and three years for other participants. Recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
The ERCC of the Company has instituted a set of share ownership guidelines for senior management who receives shares under the CapitaLand Restricted Stock/Share Plan. under these guidelines, members of the senior management team are required to retain a portion of the total number of CapitaLand shares acquired through the CapitaLand Restricted Stock/Share Plan which will vary according to their job grades and base salaries. The awards granted to non-executive directors in 2010 are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
Details of the movement in the awards by the Company during the year were as follows:
<------------- Movements during the year ------------->
balance as at Lapsed/ balance as at 1 January 2011 granted released+ cancelled 31 December 2011 Year of no. of no. of no. of no. of no. of no. of no. of award holders shares shares shares shares holders shares
2008 1,069 1,427,091 – (1,406,788 ) (20,303) – – 2009 1,430 6,195,093 – (3,150,349) (271,062) 1,313 2,773,682 2010 885 5,868,769 744,812 (2,191,693) (383,397) 815 4,038,491 2011 – – 6,676,870 – (426,465) 952 6,250,405
13,490,953 7,421,682 (6,748,830) (1,101,227) 13,062,578 + The number of shares released during the year was 6,748,830, of which 922,162 were cash-settled.
As at 31 December 2011, the number of shares comprised in awards granted under the CapitaLand Restricted Stock/ Share Plan is as follows:
equity-settled cash-settled
Final number of shares has not been determined (baseline award)# 5,506,130 744,275 Final number of shares determined but not released 5,938,521 873,652
11,444,651 1,617,927 # The final number of shares released could range from 0% to 150% of the baseline award.
share pLans (cont'd) (f) awards under the capitaMalls asia Limited (“cMa”) share plans The CMA Performance Share Plan and the CMA Restricted Stock Plan (collectively referred to as the “CMA Share
Plans”) were approved and adopted by the shareholders’ of CMA at an Extraordinary General Meeting held on 30 October 2009.
under the CMA Share Plans, awards are granted to eligible participants who will have the right to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the company achieving prescribed performance target(s).
(i) awards under the cMa performance share plan The CMA Performance Share Plan has no vesting periods beyond the performance achievement periods and
applies only to key executives.
Details of the movement in the awards by CMA during the year were as follows:
<--- Movements during the year --->
balance as at Lapsed/ balance as at 1 January 2011 granted cancelled 31 December 2011 Year of no. of no. of no. of no. of no. of no. of award holders shares shares shares holders shares
2010 20 871,700 – – 20 871,700 2011 – – 1,326,700 (40,000) 29 1,286,700
871,700 1,326,700 (40,000) 2,158,400
(ii) awards under the cMa restricted stock plan under the CMA Restricted Stock Plan, awards granted to eligible participants vest only after the satisfactory
completion of time-based service conditions or where the awards are performance-related, after a further period of service beyond the performance target completion date (performance-related awards). No minimum vesting period is prescribed under the CMA Restricted Stock Plan. Performance-related awards differ from awards granted under the CMA Performance Share Plan in that an extended vesting period is imposed beyond the performance target completion date.
CMA has instituted a set of share ownership guidelines for senior management who receive shares under the CMA Restricted Stock Plan. under these guidelines, members of the senior management team are required to retain a portion of the total number of CMA shares acquired through the CMA Restricted Stock Plan which will vary according to their job grades and base salaries. The awards to non-executive directors in 2010 are time- based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
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share pLans (cont'd) (f) awards under the capitaMalls asia Limited (“cMa”) share plans (cont'd) (ii) awards under the cMa restricted stock plan (cont'd) Details of the movement in the awards by CMA during the year were as follows: <------------- Movements during the year ------------->
balance as at Lapsed/ balance as at 1 January 2011 granted released* cancelled 31 December 2011 Year of no. of no. of no. of no. of no. of no. of no. of award holders shares shares shares shares holders shares
2010 795 4,116,979 427,563 (1,520,317) (245,696) 716 2,778,529 2011 – – 5,609,300 – (400,955) 934 5,208,345
4,116,979 6,036,863 (1,520,317) (646,651) 7,986,874
* The number of shares released during the year was 1,520,317, of which 438,490 were cash-settled. As at 31 December 2011, the number of shares comprised in awards granted under the CMA Restricted Stock Plan
is as follows: equity-settled cash-settled
Final number of shares has not been determined (baseline award)# 3,672,267 1,536,078 Final number of shares determined but not released 1,987,224 791,305
5,659,491 2,327,383
# The final number of shares released could range from 0% to 150% of the baseline award.
(g) awards under the australand share plans (i) australand performance rights plan The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders at
the 2007 Annual General Meeting (“AGM”).
The number of securities outstanding under the Australand Performance Rights Plan as at the end of the year is summarised below:
Year of balance as at <--------- Movements during the year ---------> balance as at award 1 January 2011 granted Lapsed/Forfeited 31 December 2011
2007 111,620 – – 111,620 2008 35,673 – – 35,673 2009 2,006,152 – (441,660) 1,564,492 2010 1,759,773 – (317,517) 1,442,256 2011 – 1,857,197 – 1,857,197
3,913,218 1,857,197 (759,177) 5,011,238
share pLans (cont'd) (g) awards under the australand share plans (cont'd) (ii) australand tax exempt employee security plan The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be issued by
the company to employees for no cash consideration was approved by Australand’s shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights Plan) who have been continuously employed by the Group for a period of at least nine months as at the invitation date and are still employees as at the acquisition date (the date Australand acquires the securities) are eligible to participate in the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves Australand. under the plan, employees will receive the same benefits as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which Australand’s stapled securities are traded on the Australian Stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
During the year, 108,016 (2010: 110,410) securities were issued under the Australand Tax Exempt Employee Security Plan at the weighted average market price of A$2.90 (2010: A$2.76) per security.
(iii) australand employee securities ownership plan All outstanding awards under the Australand Option Scheme and Australand Employees Securities Ownership
Plan were exercised or lapsed in 2011. There are no further awards under those schemes and both the plans have been closed.
auDit coMMittee The Audit Committee members at the date of this report are Mr Richard Edward Hale (Chairman), Mr James Koh Cher Siang, Mrs Arfat Pannir Selvam and Ms Euleen Goh Yiu Kiang.
The Audit Committee performs the functions specified by Section 201B of the Companies Act, Chapter 50 (the “Act”), the Listing Manual of the SGX-ST, and the Code of Corporate Governance.
The principal responsibility of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities. Areas of review by the Audit Committee include:
• the reliability and integrity of the financial statements;
• the impact of new, revised or proposed changes in accounting policies or regulatory requirements on the financial statements;
• the compliance with laws and regulations, particularly those of the Act and the Listing Manual of the SGX-ST;
• the appropriateness of quarterly and full year announcements and reports;
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auDit coMMittee (cont'd)
• the adequacy of internal controls and evaluation of adherence to such controls;
• the effectiveness and efficiency of internal and external audits;
• the appointment and re-appointment of external auditors and the level of auditors’ remuneration;
• the nature and extent of non-audit services and their impact on independence and objectivity of the external auditors;
• interested person transactions;
• the findings of internal investigation, if any;
• the framework and processes established for the implementation of the terms of the collaboration agreement with CMA in order to ensure that such framework and processes remain appropriate;
• the processes put in place to manage any material conflicts of interest within the Group; and
• all conflicts of interest matters referred to it.
The Audit Committee also reviews arrangements by which employees of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. Pursuant to this, the Audit Committee has introduced a Whistle Blowing Policy where employees may raise improprieties to the Audit Committee Chairman in good faith, with the confidence that employees making such reports will be treated fairly and be protected from reprisal.
The Audit Committee met six times in 2011. Specific functions performed during the year included reviewing the scope of work and strategies of both the internal and external auditors, and the results arising therefrom, including their evaluation of the system of internal controls. The Audit Committee also reviewed the assistance given by the Company’s officers to the auditors. The financial statements of the Group and the Company were reviewed by the Audit Committee prior to the submission to the Board of Directors of the Company for adoption. The Audit Committee also met with the internal and external auditors, without the presence of management, to discuss issues of concern to them.
The Audit Committee has, in accordance with Chapter 9 of the Listing Manual of the SGX-ST, reviewed the requirements for approval and disclosure of interested person transactions, reviewed the procedures set by the Group and the Company to identify and report and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed interested person transactions.
auDit coMMittee (cont'd) The Audit Committee also undertook quarterly reviews of all non-audit services provided by KPMG LLP and its member firms and was satisfied that they did not affect their independence as external auditors of the Company.
The Audit Committee has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.
auDitors The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Dr hu tsu tau Director
Liew Mun Leong Director
singapore 28 February 2012
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We have audited the accompanying financial statements of CapitaLand Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the balance sheets of the Group and the Company as at 31 December 2011, the income statements, statements of comprehensive income and statements of changes in equity of the Group and the Company and the statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 156 to 250.
Management’s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.
Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the consolidated financial statements of the Group and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011 and the results and changes in equity of the Group and the Company and cash flows of the Group for the year ended on that date.
Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KpMg LLp pubLic accountants anD certiFieD pubLic accountants
singapore 28 February 2012
independent auditors’ report to the Members of capitaLand Limited
In our opinion:
(a) the financial statements set out on pages 156 to 250 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011, and of the results and changes in equity of the Group and of the Company, and of the cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board of Directors
Dr hu tsu tau Director
Liew Mun Leong Director
singapore 28 February 2012
statement by Directors
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balance sheets as at 31 December 2011
the group the company 31/12/2011 31/12/2010 1/1/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000 $’000 restated* restated*
non-current assets Property, plant and equipment 3 1,075,505 1,049,407 1,772,301 12,830 8,164 Intangible assets 4 458,722 459,605 518,026 147 147 Investment properties 5 7,074,617 4,732,895 5,058,507 – – Subsidiaries 6 – – – 10,605,809 12,435,703 Associates 7(a) 9,290,737 8,191,407 6,967,819 – – Joint ventures 8(a) 1,394,263 1,857,360 1,525,394 – – Deferred tax assets 9 95,671 94,335 82,960 2,884 3,135 Other non-current assets 10(a) 795,955 308,205 233,359 – –
20,185,470 16,693,214 16,158,366 10,621,670 12,447,149
current assets Development properties for sale and stocks 11 6,905,124 5,667,149 3,578,255 – – Trade and other receivables 12 1,769,374 2,133,709 1,307,308 2,590,302 1,166,526 Other current assets 10(b) 195,000 203,009 196,437 – – Cash and cash equivalents 15 6,264,473 7,190,064 8,729,718 326,539 53,954
15,133,971 15,193,931 13,811,718 2,916,841 1,220,480
Less: current liabilities Trade and other payables 16 2,270,488 2,050,085 2,050,468 70,834 195,367 Short term bank borrowings 18 426,011 852,255 992,974 – – Current portion of debt securities 19 434,228 909,519 400,776 – – Current portion of finance leases 20 – – 3,836 – – Current tax payable 441,075 496,405 457,374 7,560 5,424
3,571,802 4,308,264 3,905,428 78,394 200,791
net current assets 11,562,169 10,885,667 9,906,290 2,838,447 1,019,689 Less: non-current liabilities Long term bank borrowings 18 6,105,790 3,798,410 3,951,770 – – Debt securities 19 5,224,610 4,797,859 4,929,453 3,432,956 3,379,883 Finance leases 20 – – 33,745 – – Deferred tax liabilities 9 627,638 576,721 144,604 44,367 55,176 Other non-current liabilities 21 550,130 540,687 462,550 27,815 32,373
12,508,168 9,713,677 9,522,122 3,505,138 3,467,432
net assets 19,239,471 17,865,204 16,542,534 9,954,979 9,999,406
Representing: Share capital 23 6,298,355 6,276,504 6,229,227 6,298,355 6,276,504 Revenue reserves 8,328,115 7,511,740 6,545,988 3,296,610 3,301,550 Other reserves 24 275,067 243,689 338,974 360,014 421,352
equity attributable to owners of the company 14,901,537 14,031,933 13,114,189 9,954,979 9,999,406 non-controlling interests 4,337,934 3,833,271 3,428,345 – –
total equity 19,239,471 17,865,204 16,542,534 9,954,979 9,999,406
* See note 2(a).
The accompanying notes form an integral part of these financial statements.
the group the company 2011 2010 2011 2010 note $’000 $’000 $’000 $’000 restated*
revenue 26 3,019,569 3,383,392 499,542 286,565 Cost of sales (1,946,684) (2,044,954) – –
Gross profit 1,072,885 1,338,438 499,542 286,565 Other operating income 27(a) 713,704 891,949 160,625 320,579 Administrative expenses (530,187) (488,279) (92,051) (79,245) Other operating expenses (46,459) (117,421) (147,184) (94)
profit from operations 1,209,943 1,624,687 420,932 527,805 Finance costs 27(d) (472,785) (448,183) (181,047) (183,895) share of results (net of tax) of: – associates 651,194 494,773 – – – joint ventures 225,452 465,022 – –
876,646 959,795 – –
profit before taxation 27 1,613,804 2,136,299 239,885 343,910 taxation 28 (190,884) (284,100 ) 11,336 8,060
profit for the year 1,422,920 1,852,199 251,221 351,970 attributable to: owners of the company 1,057,311 1,425,678 251,221 351,970 non-controlling interests 365,609 426,521 – –
profit for the year 1,422,920 1,852,199 251,221 351,970 basic earnings per share (cents) 29 24.8 33.5 Diluted earnings per share (cents) 29 24.6 32.5
* See note 2(a).
income statements Year ended 31 December 2011
The accompanying notes form an integral part of these financial statements.
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statements of comprehensive income Year ended 31 December 2011
the group the company 2011 2010 2011 2010 note $’000 $’000 $’000 $’000 restated*
Profit for the year 1,422,920 1,852,19 9 251,221 351,970 other comprehensive income: Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations 145,889 (215,696) – – Change in fair value of available-for-sale investments (43,848) 19,730 – – Effective portion of change in fair value of cash flow hedges (75,048) 33,674 – – Share of other comprehensive income of associates and joint ventures 101,812 15,762 – –
total other comprehensive income for the year, net of income tax 25 128,805 (146,530) – –
total comprehensive income for the year 1,551,725 1,705,669 251,221 351,970 attributable to: owners of the company 1,153,805 1,307,450 251,221 351,970 non-controlling interests 397,920 398,219 – –
total comprehensive income for the year 1,551,725 1,705,669 251,221 351,970
* See note 2(a).
attributable to owners of the company
non- share revenue other controlling total capital reserves reserves total interests equity the group note $’000 $’000 $’000 $’000 $’000 $’000
at 1 January 2011, as previously reported 6,276,504 7,652,261 241,886 14,170,651 3,846,811 18,017,462 Impact of change in accounting policy 2(a) – (140,521) 1,803 (138,718) (13,540) (152,258)
At 1 January 2011, as restated 6,276,504 7,511,740 243,689 14,031,933 3,833,271 17,865,204 total comprehensive income Profit for the year – 1,057,311 – 1,057,311 365,609 1,422,920 other comprehensive income Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations – – 95,337 95,337 50,552 145,889 Change in fair value of available-for-sale investments – – (43,848) (43,848) – (43,848) Effective portion of change in fair value of cash flow hedges – – (47,372) (47,372) (27,676) (75,048) Share of other comprehensive income of associates and joint ventures – – 92,377 92,377 9,435 101,812 Total other comprehensive income, net of income tax – – 96,494 96,494 32,311 128,805
total comprehensive income – 1,057,311 96,494 1,153,805 397,920 1,551,725 transactions with owners, recorded directly in equity Issue of shares 21,851 – (20,694) 1,157 – 1,157 Purchase of treasury shares – – (63,456) (63,456) – (63,456) Dividends paid/payable – (256,161) – (256,161) (147,654) (403,815) Share-based payments – – 28,800 28,800 2,958 31,758 Non-controlling interests contributions (net) – – – – 151,059 151,059 Changes in ownership interests in subsidiaries with a change in control – – – – 144,249 144,249 Changes in ownership interests in subsidiaries with no change in control – 17,322 (3,436) 13,886 (43,154) (29,268) Share of reserves of associates and joint ventures – (14,455) 5,225 (9,230) (765) (9,995) Others – 12,358 (11,555) 803 50 853
total transactions with owners 21,851 (240,936) (65,116 ) (284,201) 106,743 (177,458)
at 31 December 2011 6,298,355 8,328,115 275,067 14,901,537 4,337,934 19,239,471
statements of changes in equity Year ended 31 December 2011
The accompanying notes form an integral part of these financial statements. The accompanying notes form an integral part of these financial statements.
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attributable to owners of the company
non- share revenue other controlling total capital reserves reserves total interests equity the group note $’000 $’000 $’000 $’000 $’000 $’000
at 1 January 2010, as previously reported 6,229,227 6,839,047 339,999 13,408,273 3,471,490 16,879,763 Impact of change in accounting policy 2(a) – (293,059) (1,025) (294,084) (43,145) (337,229)
At 1 January 2010, as restated 6,229,227 6,545,988 338,974 13,114,189 3,428,345 16,542,534 total comprehensive income Profit for the year – 1,425,678 – 1,425,678 426,521 1,852,199 other comprehensive income Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations – – (186,721) (186,721) (28,975) (215,696) Change in fair value of available-for-sale investments – – 19,730 19,730 – 19,730 Effective portion of change in fair value of cash flow hedges – – 30,476 30,476 3,198 33,674 Share of other comprehensive income of associates and joint ventures – – 18,287 18,287 (2,525) 15,762 Total other comprehensive income, net of income tax – – (118,228) (118,228) (28,302) (146,530)
total comprehensive income – 1,425,678 (118,228) 1,307,450 398,219 1,705,669 transactions with owners, recorded directly in equity Issue of shares 47,277 – (25,110 ) 22,167 – 22,167 Dividends paid/payable – (447,369) – (447,369) (103,656) (551,025) Share-based payments – – 32,150 32,150 2,006 34,156 Non-controlling interests contributions (net) – – – – 19,742 19,742 Changes in ownership interests in subsidiaries with a change in control – – – – (33,786) (33,786) Changes in ownership interests in subsidiaries with no change in control – 14,16 8 (2,204) 11,964 123,339 135,303 Share of reserves of associates and joint ventures – (6,745) (1,737) (8,482) (877) (9,359) Others – (19,980) 19,844 (136) (61) (197)
total transactions with owners 47,277 (459,926) 22,943 (389,706) 6,707 (382,999)
at 31 December 2010, as restated 6,276,504 7,511,740 243,689 14,031,933 3,833,271 17,865,204
attributable to owners of the company
equity share revenue reserve For capital compensation total capital reserve own shares reserves reserve equity the company $’000 $’000 $’000 $’000 $’000 $’000
at 1 January 2011 6,276,504 3,301,550 – 383,490 37,862 9,999,406
total comprehensive income Profit for the year – 251,221 – – – 251,221 transactions with owners, recorded directly in equity Dividends paid – (256,161) – – – (256,161) Issue of shares 21,851 – – – (4,813) 17,038 Purchase of treasury shares – – (63,456) – – (63,456) Share-based payments – – – – 6,931 6,931
total transactions with owners 21,851 (256,161) (63,456) – 2,118 (295,648)
at 31 December 2011 6,298,355 3,296,610 (63,456) 383,490 39,980 9,954,979 at 1 January 2010 6,229,227 3,396,949 – 383,490 36,184 10,045,850 total comprehensive income Profit for the year – 351,970 – – – 351,970 transactions with owners, recorded directly in equity Dividends paid – (447,369) – – – (447,369) Issue of shares 47,277 – – – (6,186) 41,091 Share-based payments – – – – 7,864 7,864
total transactions with owners 47,277 (447,369) – – 1,678 (398,414)
at 31 December 2010 6,276,504 3,301,550 – 383,490 37,862 9,999,406
statements of changes in equity Year ended 31 December 2011
The accompanying notes form an integral part of these financial statements. The accompanying notes form an integral part of these financial statements.
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2011 2010 $’000 $’000 restated*
operating activities Profit after taxation 1,422,920 1,852,199 Adjustments for: Amortisation and impairment of intangible assets 1,601 1,627 Allowance/(Write back) for: – foreseeable losses 39,155 30,848 – doubtful receivables 406 6,381 – impairment on financial assets 1,329 10,936 – impairment on interests in associates and joint ventures 3,437 (5,413) – impairment on property, plant and equipment 729 23,891 Gain from bargain purchase (26) (11,580) Share-based expenses 34,343 39,128 Changes in fair value of financial instruments – (19,652) Depreciation of property, plant and equipment 39,008 57,998 Gain on disposal of property, plant and equipment (969) (12,077) Gain on disposal of investment properties (19,411) (13,845) Net fair value gain from investment properties (285,032) (394,585) Gain on disposal/liquidation/dilution of equity investments and other financial assets (227,017) (253,785) Realisation of reserves for pre-existing interest in acquirees (12,631) – Share of results of associates and joint ventures (876,646) (959,795) Provision for fidelity losses – 7,021 Accretion of deferred income 9,910 (9,209) Finance costs 472,785 448,183 Interest income (80,957) (83,027) Taxation 190,884 284,10 0
(709,102) (852,855)
Operating profit before working capital changes 713,818 999,344 (Increase)/Decrease in working capital: Trade and other receivables (104,993) (318,807) Development properties for sale (1,073,350) 143,463 Trade and other payables (142,482) 257,460 Restricted bank deposits (6,777) (2,729)
Changes in working capital (1,327,602) 79,387
Cash (used in)/generated from operations (613,784) 1,078,731 Income tax paid (194,922) (176,490)
net cash (used in)/generated from operating activities (808,706) 902,241
consolidated statement of cash Flows Year ended 31 December 2011
2011 2010 note $’000 $’000 restated*
investing activities Proceeds from disposal of property, plant and equipment 3,470 110,286 Purchase of property, plant and equipment (135,493) (88,310) Investments in associates and joint ventures (183,263) (215,657) Advance to investee companies and other receivables (7,354) (95,462) Prepayment for acquisition of an investment property (22,4 41) (18,631) Deposits for new investments (400,000) (135,933) Deposit for disposal of a subsidiary 48,976 – Acquisition of investment properties (1,958,528) (315,776) Proceeds from disposal of investment properties 502,889 1,001,467 (Investment in)/Proceeds from disposal of other financial assets (267,580) 10,360 Dividends received from associates and joint ventures 533,174 247,839 Acquisitions of subsidiaries, net of cash acquired 31(b) (419,018 ) (3,034,955) Disposals of subsidiaries, net of cash disposed off 31(d) 1,142,375 692,208 Transaction costs for public offering of a subsidiary – (18,932) Interest income received 52,513 44,682
net cash used in investing activities (1,110 ,280) (1,816,814) Financing activities Proceeds from issue of shares under options 2,804 22,155 Purchase of treasury shares (63,456) – Borrowings from non-controlling interests 49,083 18,739 Contributions from non-controlling interests 149,412 19,742 (Acquisition)/Disposal in ownership interests in subsidiaries with no change in control (29,268) 15 0,412 Proceeds from bank borrowings 5,516,970 3,18 4,232 Repayments of bank borrowings (3,522,087) (3,288,517) Proceeds from issue of debt securities 696,200 700,000 Repayments of debt securities (919,614 ) (404,438) Repayment of finance lease payables – (2,387) Dividends paid to non-controlling interests (146,239) (104,366) Dividends paid to shareholders (256,161) (447,369) Interest expense paid (495,946) (438,608)
net cash generated from/(used in) financing activities 981,698 (590,405)
net decrease in cash and cash equivalents (937,288) (1,504,978) cash and cash equivalents at beginning of the year 7,18 7,335 8,729,718 effect of exchange rate changes on cash balances held in foreign currencies 4,920 ( 37,405)
cash and cash equivalents at end of the year 15 6,254,967 7,18 7,335 * See note 2(a).
Significant non-cash transaction: In 2010, the Group disposed off three investment properties to an associate, CapitaMalls Malaysia Trust (“CMMT”), for a consideration of $889.7 million, of which $637.5 million was settled by cash and the balance was settled by way of issuance of 563.5 million units in CMMT.
The accompanying notes form an integral part of these financial statements. The accompanying notes form an integral part of these financial statements.
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notes to the Financial statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 28 February 2012.
1 DoMiciLe anD activities CapitaLand Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered office at
168 Robinson Road, #30-01, Capital Tower, Singapore 068912.
The principal activities of the Company during the financial year are those relating to investment holding and consultancy services as well as the corporate headquarters which gives direction, provides management support services and integrates the activities of its subsidiaries.
The principal activities of the significant subsidiaries are those relating to investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services as well as management of serviced residences.
The consolidated financial statements relate to the Company and its subsidiaries (the “Group”) and the Group’s interests in associates and joint ventures.
2 suMMarY oF signiFicant accounting poLicies (a) basis of preparation The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“FRS”).
The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.
These financial statements are presented in Singapore Dollars, which is the Company’s functional currency. All financial information presented in Singapore Dollars have been rounded to the nearest thousand, unless otherwise stated.
The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following note:
Note 9 – recognition of deferred tax assets
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:
Note 4 – assumptions of recoverable amounts relating to goodwill impairment Note 5 – valuation of investment properties Note 11 – estimation of the percentage of completion of the projects, attributable profits for development
properties for sale and allowance for foreseeable losses Note 21 – provisions Note 22 – measurement of share-based payments Note 32 – valuation of assets, liabilities and contingent liabilities acquired in business combinations Note 33 – valuation of financial instruments.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (a) basis of preparation (cont'd) With the adoption of new/revised FRSs effective from 1 January 2011, the Group has changed its accounting
policies in the following areas:
The Group has applied INT FRS 115 Agreements for the Construction of Real Estate in its accounting for revenue and related expenses for the sale of a real estate unit. INT FRS 115 clarifies when revenue and related expenses from a sale of a real estate unit should be recognised if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. Contracts which are not classified as construction contracts in accordance with FRS 11 Construction Contracts can only be accounted for under the percentage of completion method if the entity continuously transfers to the buyer control and the significant risks and rewards of ownership of the work-in-progress in its current state as construction progresses.
Prior to the adoption of INT FRS 115, the Group’s accounting policy for development properties for sale was to recognise revenue on percentage of completion method which is an allowed alternative method under Recommended Accounting Practice 11 – Pre-Completion Contracts For The Sale Of Development Property (“RAP 11”). RAP 11 was withdrawn with effect from 1 January 2011 following the adoption of INT FRS 115.
The Group has considered the application of INT FRS 115 and the accompanying practice note issued specifically in the context of the sale of development properties in Singapore, and concluded that whilst the “pre-completion” sale contracts are not, in substance, construction contracts, the legal terms in certain contracts result in the continuous transfer of work-in-progress to the purchaser. Consequently, the Group will continue to adopt the percentage of completion method of revenue recognition for development projects under progressive payment scheme in Singapore. For the development projects under deferred payment scheme in Singapore and overseas development projects, the construction revenue and expenses will be recognised upon the transfer of significant risks and rewards of ownership, which generally coincides with the time the development units are delivered to the purchasers.
In accordance with the transition provisions of INT FRS 115, this change in accounting policy was applied retrospectively. The effects of the Group’s financial statements arising from the adoption of INT FRS 115 are as follows:
the group increase/(Decrease)
2011 2010 $’000 $’000
Impact to balance sheet as at 1 January Revenue reserves (140,521) (293,059) Other reserves 1,803 (1,025) Non-controlling interests (13,540) (43,145 )
Total equity (152,258) (337,229)
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (a) basis of preparation (cont'd)
31/12/2010 1/1/2010 $’000 $’000
Impact to balance sheet as at Associates and joint ventures (61,607) (191,017) Deferred tax assets 6,649 1,710 Development properties for sale and stocks 247,799 (12,015) Trade and other receivables (5,916) 5,392
Total assets 186,925 (195,930) Trade and other payables 355,700 170,451 Deferred tax liabilities (16,517) (29,152)
Total liabilities 339,183 141,299
Net assets (152,258) (337,229)
2010 $’000
Impact to income statement for the year ended 31 December Revenue 650 Cost of sales 61,430 Other operating income (738) Share of results of associates (net of tax) (4,584) Share of results of joint ventures (net of tax) 143,527 Taxation (18,193) Non-controlling interests (29,553)
Profit attributable to the Owners of the Company 152,539
Increase in basic earnings per share (cents) 3.6 Increase in diluted earnings per share (cents) 3.3 From 1 January 2011, the Group has applied the revised FRS 24 Related Party Disclosures (2010) to identify
parties that are related to the Group and to determine the disclosures to be made on transactions and outstanding balances, including commitments, between the Group and its related parties. FRS 24 (2010) improved the definition of a related party in order to eliminate inconsistencies and ensure symmetrical identification of relationships between two parties.
The adoption of FRS 24 (2010) has resulted in additional parties being identified as related to the Group. Transactions and outstanding balances, including commitments, with these related parties for the current and comparative years have been disclosed accordingly in note 37 to the financial statements.
The adoption of FRS 24 (2010) affects only the disclosures made in the financial statements. There is no financial effect on the results and financial position of the Group for the current and previous financial years. Accordingly, the adoption of FRS 24 (2010) has no impact on earnings per share.
Except for the above changes, the accounting policies set out below have been applied consistently by the Group to all periods presented in these financial statements and have been applied consistently by the entities in the Group.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (b) basis of consolidation (i) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in the profit or loss.
For non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation, the Group elects on a transaction-by-transaction basis whether to measure them at fair value, or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets, at the acquisition date. All other non-controlling interests are measured at acquisition-date fair value. If the business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is re-measured to fair value at each acquisition date and any changes are taken to the profit or loss.
(ii) Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising from the loss of control is recognised in the profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (b) basis of consolidation (cont'd) (iii) Associates and joint ventures Associates are those entities in which the Group has significant influence, but not control, over their financial
and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Joint ventures are entities (including unincorporated or incorporated companies, partnerships and trusts) over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.
Associates and joint ventures (collectively referred to as “equity-accounted investees”) are accounted for using the equity method and are recognised initially at cost. The cost of the investments includes transaction costs. The Group’s investments in equity-accounted investees include goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest is stated at zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
(iv) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(v) Accounting for subsidiaries, associates and joint ventures by the Company Investments in subsidiaries, associates and joint ventures are stated in the Company’s balance sheet at cost
less accumulated impairment losses.
(c) Foreign currencies Foreign currency transactions Items included in the financial statements of each entity in the Group are measured using the currency that
best reflects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”).
Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate prevailing at that reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.
Foreign currency differences arising from retranslation are recognised in the profit or loss, except for differences arising from the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation, available-for-sale equity instruments and financial liabilities designated as hedges of net investment in a foreign operation (see note 2(g)) or qualifying cash flow hedges, which are recognised in other comprehensive income.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (c) Foreign currencies (cont'd) Foreign operations The assets and liabilities of foreign operations are translated to Singapore Dollars at exchange rates prevailing at
the end of the reporting period. The income and expenses of foreign operations are translated to Singapore Dollars at exchange rates prevailing at the dates of the transactions. Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the operation is not a wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed off such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is transferred to the profit or loss as part of the gain or loss on disposal. When the Group disposes off only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non- controlling interests. When the Group disposes off only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is transferred to the profit or loss.
Net investment in a foreign operation When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the translation reserve in equity.
(d) property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Certain of the Group’s property, plant and equipment acquired through interests in subsidiaries, are accounted for as acquisition of assets.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.
Depreciation on property, plant and equipment is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment as follows:
Leasehold land and buildings (excluding Remaining lease period ranging from serviced residence properties) 4 years to 49 years Hospitality plant, machinery and improvements, furniture, fittings and equipment 1 to 10 years Plant, machinery and improvements 3 to 10 years Motor vehicles 5 years Furniture, fittings and equipment 2 to 5 years For serviced residence properties where the residual value at the end of the intended holding period is lower
than the carrying amount, the difference in value is depreciated over the Group’s intended holding period. No depreciation is recognised where the residual value is higher than the carrying amount.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (d) property, plant and equipment (cont'd) Residual values of the properties at the end of the intended holding period are determined based on annual
independent professional valuation. Residual value is the estimated amount that the Group would obtain from the disposal of a property if the property is already of the age and in the condition expected at the date when the Group has the intention to dispose that property.
Assets under construction are stated at cost and are not depreciated. Expenditure relating to assets under construction (including borrowing costs) are capitalised when incurred. Depreciation will commence when the development is completed.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
(e) intangible assets (i) Goodwill Acquisition on or after 1 January 2010 For business combinations on or after 1 January 2010, the Group measures goodwill as at acquisition date
based on the fair value of the consideration transferred (including the fair value of any previously-held equity interest in the acquiree) and the recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the amount is negative, a bargain purchase gain is recognised in the profit or loss. Goodwill is subsequently measured at cost less accumulated impairment losses.
Goodwill arising from the acquisition of subsidiaries is presented in intangible assets. Goodwill arising from the acquisition of associates and joint ventures is presented together with interests in associates and joint ventures.
Acquisition up to 31 December 2009 Prior to 1 January 2010, goodwill is measured at cost less accumulated impairment losses. Goodwill is
tested for impairment as described in note 2(j). Negative goodwill is credited to the profit or loss in the period of the acquisition.
Acquisition of non-controlling interests From 1 January 2010, acquisitions of non-controlling interests are accounted for as transactions with owners
in their capacity as owners and therefore no goodwill is recognised. Previously, goodwill arising on the acquisition of non-controlling interests in a subsidiary has been recognised, and represented the excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date of the transaction.
(ii) Other intangible assets Other intangible assets with finite useful lives are measured at cost less accumulated amortisation and
impairment losses. They are amortised in the profit or loss on a straight-line basis over their estimated useful lives of one to 10 years, from the date on which they are available for use.
Other intangible assets with indefinite useful lives are not amortised and are measured at cost less impairment losses.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (f) investment properties and investment properties under development Investment properties are properties held either to earn rental or for capital appreciation or both. Investment
properties under development are properties being constructed or developed for future use as investment properties. Certain of the Group’s investment properties acquired through interests in subsidiaries, are accounted for as acquisition of assets. Investment properties and investment properties under development are initially recognised at cost, including transaction costs, and subsequently at fair value with any change therein recognised in the profit or loss. The fair value is determined based on internal valuation or independent professional valuation. Independent professional valuation is obtained at least once every three years.
When an investment property or investment property under development is disposed off, the resulting gain or loss recognised in the profit or loss is the difference between the net disposal proceed and the carrying amount of the property.
(g) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity and debt securities, trade and other
receivables, cash and cash equivalents, financial liabilities and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial assets to another party without retaining control or transfers substantially all the risks and rewards of the assets. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Instruments at fair value through profit or loss An instrument is classified as fair value through profit or loss if it is held for trading or is designated as such
upon initial recognition. Financial instruments are designated as fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value. upon initial recognition, attributable transaction costs are recognised in the profit or loss when incurred. Financial instruments classified as fair value through profit or loss are measured at fair value, and changes therein are recognised in the profit or loss.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (g) Financial instruments (cont'd) (i) Non-derivative financial instruments (cont'd) Available-for-sale financial assets The Group’s investments in equity securities and certain debt securities are classified as available-for-sale
financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairment losses (see note 2(g)(v)) and foreign exchange gains and losses on available-for-sale monetary items (see note 2(c)), are recognised directly in other comprehensive income and presented in the available-for-sale reserve in equity. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is reclassified to the profit or loss.
Investments in equity securities whose fair value cannot be reliably measured are measured at cost less impairment loss.
Others Other non-derivative financial instruments are categorised as loans and receivables or financial liabilities,
which are measured at amortised cost using the effective interest method, less any impairment losses.
(ii) Derivative financial instruments and hedging activities The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.
Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
On initial designation of the derivative as the hedging instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80%-125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.
Cash flow hedges Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised
directly in other comprehensive income and presented in the hedging reserve in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance is reclassified to profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset when the asset is recognised. In other cases, the amount accumulated in equity is reclassified to the profit or loss in the same period that the hedged item affects profit or loss.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (g) Financial instruments (cont'd) (ii) Derivative financial instruments and hedging activities (cont'd) Fair value hedges Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised
in the profit or loss. The hedged item is adjusted to reflect change in its fair value in respect of the risk being hedged, with any gain or loss being recognised in the profit or loss.
Hedge of net investment in a foreign operation In the Company’s financial statements, foreign currency differences arising from the retranslation of a financial
liability designated as a hedge of a net investment in a foreign operation are recognised in the profit or loss. On consolidation, such differences are recognised directly in other comprehensive income and presented in the foreign currency translation reserve in equity, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such differences are recognised in the profit or loss. When the hedged net investment is disposed off, the cumulative amount in other comprehensive income is transferred to the profit or loss.
Separable embedded derivatives Changes in the fair value of separated embedded derivatives are recognised immediately in the profit or loss.
Other non-trading derivatives When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge
accounting, all changes in its fair value are recognised immediately in the profit or loss.
(iii) Convertible bonds Convertible bonds that can be converted into share capital where the number of shares issued does not vary
with changes in the fair value of the bonds are accounted for as compound financial instruments. The gross proceeds are allocated to the equity and liability components, with the equity component being assigned the residual amount after deducting the fair value of the liability component from the fair value of the compound financial instrument.
Subsequent to initial recognition, the liability component of convertible bonds is measured at amortised cost
using the effective interest method. The equity component of convertible bonds is not re-measured. When the conversion option is exercised, its carrying amount will be transferred to the share capital. When the conversion option lapses, its carrying amount will be transferred to revenue reserve.
When a convertible bond is being repurchased before its maturity date, the purchase consideration (including directly attributable costs, net of tax effects) are allocated to the liability and equity components of the instrument at the date of transaction. Any resulting gain or loss relating to the liability component is recognised in the profit or loss.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (g) Financial instruments (cont'd) (iv) Financial guarantees Financial guarantee contracts are classified as financial liabilities unless the Group or the Company has previously
asserted explicitly that it regards such contracts as insurance contracts and accounted for them as such. Financial guarantees classified as financial liabilities Such financial guarantees are recognised initially at fair value and are classified as financial liabilities. Subsequent
to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantees is transferred to the profit or loss.
Financial guarantees classified as insurance contracts These financial guarantees are accounted for as insurance contracts. Provision is recognised based on the
Group’s or the Company’s estimate of the ultimate cost of settling all claims incurred but unpaid at the end of the reporting period.
The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.
(v) Impairment of financial assets A financial asset not carried at fair value through profit or loss is assessed at each reporting period to determine
whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than that suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Losses are recognised in the profit or loss and reflected as an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (g) Financial instruments (cont'd) (v) Impairment of financial assets (cont'd) Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses
accumulated in the available-for-sale reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in the profit or loss. Changes in impairment provision attributable to application of the effective interest method are reflected as a component of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the
increase can be related objectively to an event occurring after the impairment loss was recognised in the profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in the profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.
(h) share capital Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary shares and options are recognised as a deduction from equity.
Where share capital recognised as equity is repurchased (“treasury shares”), the amount of the consideration paid, including directly attributable costs, is presented as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in reserve for own share account. Where such shares are subsequently reissued, sold or cancelled, the consideration received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in non-distributable capital reserve.
(i) Development properties for sale Development properties for sale are stated at the lower of cost plus, where appropriate (see note 2(n)), a portion of
the attributable profit, and estimated net realisable value, net of progress billings. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.
The cost of properties under development comprises specifically identified costs, including acquisition costs, development expenditure, borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development property are also capitalised, on a specific identification basis, as part of the cost of the development property until the completion of development.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (j) impairment – non-financial assets The carrying amounts of the Group’s non-financial assets, other than investment properties, inventories and
deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and as and when indicators of impairment are identified, an impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (“CGu”) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGu is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGu. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGu. Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGus to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGu that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its CGu exceeds its estimated recoverable amount. Impairment losses are recognised in the profit or loss. Impairment losses recognised in respect of CGus are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate and a joint venture is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate and a joint venture is tested for impairment as a single asset when there is objective evidence that the investment in an associate and a joint venture may be impaired.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (k) employee benefits Short term employee benefits All short term employee benefits, including accumulated compensated absences, are recognised in the period
in which the employees render their services.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defined contribution plans Contributions to post-employment benefits under defined contribution plans are recognised as an expense in
profit or loss as incurred.
Long service leave entitlement Liabilities for other employee entitlements which are not expected to be paid or settled within twelve months of
the reporting date are accrued in respect of all employees at the present value of the future amounts expected to be paid based on a projected weighted average increase in wage and salary rates. Expected future payments are discounted using interest rates on relevant government securities with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Share-based payments For equity-settled share-based payment transactions, the fair value of the services received is recognised as an
expense with a corresponding increase in equity over the vesting period during which the employees become unconditionally entitled to the equity instrument. The fair value of the services received is determined by reference to the fair value of the equity instrument granted at the grant date. At each reporting date, the number of equity instruments that are expected to be vested are estimated. The impact on the revision of original estimates is recognised as an expense and as a corresponding adjustment to equity over the remaining vesting period, unless the revision to original estimates is due to market conditions. No adjustment is made if the revision or actual outcome differs from the original estimate due to market conditions.
For cash-settled share-based payment transactions, the fair value of the goods or services received is recognised
as an expense with a corresponding increase in liability. The fair value of the services received is determined by reference to the fair value of the liability. until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised for the period.
The proceeds received from the exercise of the equity instruments, net of any directly attributable transaction costs, are credited to share capital when the equity instruments are exercised.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (l) provision A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
A provision for onerous contract is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
(m) Leases When entities within the Group are lessees of a finance lease Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified
as finance leases. upon initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the arrangement is not in the legal form of a lease.
When entities within the Group are lessees of an operating lease Where the Group has the use of assets under operating leases, payments made under the leases are recognised
in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease payments made. Contingent rentals are charged to the profit or loss in the accounting period in which they are incurred.
When entities within the Group are lessors of an operating lease Assets subject to operating leases are included in either property, plant and equipment (see note 2(d)) or
investment properties (see note 2(f)).
(n) revenue recognition Rental income Rental income receivable under operating leases is recognised on a straight-line basis over the term of the lease,
except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingent rentals are recognised as income in the accounting period in which they are earned.
2 suMMarY oF signiFicant accounting poLicies (cont'd) (n) revenue recognition (cont'd) Development properties for sale The Group recognises income on property development projects when the significant risks and rewards of
ownership have been transferred to the purchasers. For development projects under progressive payment scheme in Singapore, whereby the legal terms in the sale contracts result in continuous transfer of work-in-progress to the purchasers, revenue is recognised based on the percentage of completion method. under the percentage of completion method, profit is brought into profit or loss only in respect of sales procured and to the extent that such profit relates to the progress of construction work. The progress of construction work is measured by the proportion of the construction costs incurred to date to the estimated total construction costs for each project. For development projects under deferred payment scheme in Singapore and overseas development projects, the construction revenue will be recognised upon the transfer of significant risks and rewards of ownership, which generally coincides with the time the development units are delivered to the purchasers.
Revenue excludes goods and services or other sale taxes and is after deduction of any trade discounts. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of unit sold.
Financial advisory and management fee Financial advisory and management fee is recognised as and when services are rendered.
Dividends Dividend income is recognised on the date that the Group’s right to receive payment is established.
Interest income Interest income is recognised as it accrues, using the effective interest method.
(o) Finance costs Borrowing costs are recognised using the effective interest method, except to the extent that they are capitalised
as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.
(p) tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit or loss
except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
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2 suMMarY oF signiFicant accounting poLicies (cont'd) (p) tax (cont'd) Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and joint ventures to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(q) earnings per share The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to owners of the Company and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise issued convertible bonds and share plans granted to employees.
(r) operating segments An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Council of Chief Executive Officers (“CEOs”) that makes strategic resources allocation decisions. The Council of CEOs comprises the President & CEO, key management officers of the corporate office and CEOs of the strategic business units.
3 propertY, pLant anD equipMent plant, serviced other machinery Furniture, assets residence Leasehold leasehold and Motor fittings and under properties land buildings improvements vehicles equipment construction total the group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
cost At 1 January 2011 853,448 5,017 49,187 90,331 3,055 284,230 47,761 1,333,029 Translation differences (21,244) 111 533 1,645 3 2,630 (6,247) (22,569) Additions 2,406 – 13,404 5,204 623 72,305 11,084 105,026 Acquisition of subsidiaries 201,645 – – 218 – 357 16,615 218,835 Disposal of subsidiaries (229,397) – (164) – (555) (10,256) (1,738) (242,110 ) Disposals/Written off (731) – (1,172) (2,278) (702) (22,425) – (27,308) Reclassification from other category of assets – – – – – 1,550 – 1,550 Reclassification – – – 403 – 124 (527) –
At 31 December 2011 806,127 5,128 61,788 95,523 2,424 328,515 66,948 1,366,453 accumulated depreciation and impairment loss At 1 January 2011 21,359 171 14,364 42,124 2,081 203,523 – 283,622 Translation differences 820 10 (311) 436 3 1,463 – 2,421 Depreciation for the year 126 134 1,958 6,783 336 29,671 – 39,008 Disposal of subsidiaries – – – – (523) (9,141) – (9,664) Disposals/Written off – – (474) (2,091) (617) (21,257) – (24,439)
At 31 December 2011 22,305 315 15,537 47,252 1,280 204,259 – 290,948 carrying amount At 1 January 2011 832,089 4,846 34,823 48,207 974 80,707 47,761 1,049,407
At 31 December 2011 783,822 4,813 46,251 48,271 1,144 124,256 66,948 1,075,505 cost At 1 January 2010 1,502,438 841 23,276 72,336 2,831 272,373 190,024 2,064,119 Translation differences (156,820) (188) (1,720) (8,423) (60) (17,842) 754 (184,299) Additions 34,914 – 235 6,262 370 41,686 37,474 120,941 Acquisition of subsidiaries 245,006 4,364 37,964 45,601 784 16,854 – 350,573 Disposal of subsidiaries (872,801) – – (18,667) (168) (21,988) (114) (913,738) Disposals/Written off (64,066) – (3,117) (7,069) (702) (29,613) – (104,567) Reclassification 164,777 – (7,451) 291 – 22,760 (180,377) –
At 31 December 2010 853,448 5,017 49,187 90,331 3,055 284,230 47,761 1,333,029 accumulated depreciation and impairment loss At 1 January 2010 49,061 41 10,818 52,359 1,806 177,733 – 291,818 Translation differences (4,740) (3) 1,250 (1,538) 618 (3,402) – (7,815) Depreciation for the year 9,061 133 2,845 10,375 339 35,245 – 57,998 Impairment loss 12,092 – – – – 11,408 – 23,500 Disposal of subsidiaries (22,571) – – (12,244) (88) (11,277) – (46,180) Disposals/Written off – – (549) (6,739) (594) (27,817) – (35,699) Reclassification (21,544) – – (89) – 21,633 – –
At 31 December 2010 21,359 171 14,364 42,124 2,081 203,523 – 283,622 carrying amount At 1 January 2010 1,453,377 800 12,458 19,977 1,025 94,640 190,024 1,772,301
At 31 December 2010 832,089 4,846 34,823 48,207 974 80,707 47,761 1,049,407
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3 propertY, pLant anD equipMent (cont'd) (a) As at 31 December 2011, certain property, plant and equipment with carrying value totalling approximately
$391.6 million (2010: $392.2 million) were mortgaged to banks to secure credit facilities for the Group (note 18).
(b) In 2010, the Group recognised an impairment loss of $23.5 million relating to a serviced residence property in Australia and operating assets of certain leased properties in Europe. The impairment loss was determined based on value in use calculation using cash flow projections, and was recognised in “Other Operating Expenses” in the income statement.
(c) During the financial year ended 31 December 2011, interest capitalised as cost of property, plant and equipment amounted to approximately $3.1 million (2010: $4.2 million) (note 27(d)).
Furniture, renovations fittings and and Motor improvements equipment vehicles total the company $’000 $’000 $’000 $’000
cost At 1 January 2011 11,578 16,741 442 28,761 Additions 170 7,762 340 8,272 Disposals/Written off – (569) (266) (835)
At 31 December 2011 11,748 23,934 516 36,198 accumulated depreciation At 1 January 2011 10,784 9,380 433 20,597 Depreciation for the year 595 2,961 42 3,598 Disposals/Written off – (561) (266) (827)
At 31 December 2011 11,379 11,780 209 23,368 carrying amount At 1 January 2011 794 7,361 9 8,164
At 31 December 2011 369 12,154 307 12,830 cost At 1 January 2010 11,418 11,879 431 23,728 Additions 327 5,303 11 5,641 Disposals/Written off (167) (441) – (608)
At 31 December 2010 11,578 16,741 442 28,761 accumulated depreciation At 1 January 2010 8,161 7,845 431 16,437 Depreciation for the year 2,661 1,989 2 4,652 Disposals/Written off (38) (454) – (492)
At 31 December 2010 10,784 9,380 433 20,597 carrying amount At 1 January 2010 3,257 4,034 – 7,291
At 31 December 2010 794 7,361 9 8,164
4 intangibLe assets
goodwill others^ total the group $’000 $’000 $’000
cost At 1 January 2011 511,341 26,048 537,389 Acquisition of a subsidiary – 835 835 Additions – 410 410 Disposals/Written off (492) (21) (513) Translation differences 237 (303) (66)
At 31 December 2011 511,086 26,969 538,055 accumulated amortisation and impairment loss At 1 January 2011 65,924 11,860 77,784 Amortisation for the year – 1,601 1,601 Translation differences 237 (289) (52)
At 31 December 2011 66,161 13,172 79,333 carrying amount At 1 January 2011 445,417 14,188 459,605
At 31 December 2011 444,925 13,797 458,722 cost At 1 January 2010 570,443 23,624 594,067 Additions – 3,343 3,343 Disposals/Written off (57,231) (194) (57,425) Translation differences (1,871) (725) (2,596)
At 31 December 2010 511,341 26,048 537,389 accumulated amortisation and impairment loss At 1 January 2010 64,943 11,098 76,041 Amortisation for the year – 1,627 1,627 Disposals/Written off – (185) (185) Translation differences 981 (680) 301
At 31 December 2010 65,924 11,860 77,784 carrying amount At 1 January 2010 505,500 12,526 518,026
At 31 December 2010 445,417 14,188 459,605
goodwill others^ total the company $’000 $’000 $’000
cost and carrying amount At 1 January 2010, 31 December 2010 and 31 December 2011 – 147 147
^ Others comprised trademarks, franchises, patents, licences and club memberships.
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4 intangibLe assets (cont'd) Impairment test for Goodwill For the purpose of goodwill impairment testing, the aggregate carrying amount of goodwill allocated to the cash-
generating unit (“CGu”) as at 31 December is as follows:
terminal growth rate Discount rate carrying value 31/12/2011 31/12/2010 31/12/2011 31/12/2010 31/12/2011 31/12/2010 % % % % $’000 $’000
The Ascott Limited (“Ascott”) 0.7 0.8 5.6 6.4 444,925 445,417 The recoverable amount of the CGu is determined based on value in use calculation. The value in use calculation is
a discounted cash flow model using cash flow projections based on the most recent budgets and forecasts approved by management covering three years. Cash flows beyond these periods are extrapolated using the estimated terminal growth rates stated in the table above. The discount rate applied is the weighted average cost of capital from the relevant business segment. The key assumptions are those relating to expected changes in average room rates and occupancy and direct costs. The terminal growth rate used for each CGu does not exceed management’s expectation of the long term average growth rate of the respective industry and country in which the CGu operates.
The Group believes that any reasonably possible changes in the above key assumptions applied are not likely to materially cause the recoverable amount to be lower than its carrying amount.
5 investMent properties
the group
31/12/2011 31/12/2010 note $’000 $’000
At 1 January 4,732,895 5,058,507 Acquisition of subsidiaries 31(b) 428,255 1,263,170 Disposal of subsidiaries 31(d) (239,052) (1,052,291) Additions 2,172,334 336,243 Disposals (471,248) (1,216,693) Reclassification from/(to) development properties for sale 52,347 (39,505) Changes in fair value 27(a) 285,032 394,585 Translation differences 114,054 (11,121)
At 31 December 7,074,617 4,732,895 (a) Investment properties, which include investment properties in the course of development are stated at fair value
based on independent professional valuations or internal valuations. The fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion. In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value of investment properties include market- corroborated capitalisation yield, terminal yield and discount rate. In relying on the valuation reports, management has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of current market conditions.
The valuers have considered valuation techniques including the direct comparison method, capitalisation approach
and/or discounted cash flows in arriving at the open market value as at the balance sheet date. The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the investment properties. The capitalisation approach capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. The discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value.
5 investMent properties (cont'd) (b) As at 31 December 2011, investment properties included $3,376.5 million (31/12/2010: $1,176.0 million) of
investment properties under development.
(c) As at 31 December 2011, certain investment properties with carrying value of approximately $2,289.0 million (31/12/2010: $1,552.4 million) were mortgaged to banks to secure credit facilities for the Group (notes 18 and 19).
(d) During the financial year ended 31 December 2011, interest capitalised as cost of investment properties amounted to approximately $23.5 million (31/12/2010: $4.9 million) (note 27(d)).
(e) Investment properties of the Group are held mainly for use by tenants under operating leases. Minimum lease payments receivable under non-cancellable operating leases of investment properties and not recognised in the financial statements are as follows:
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
Lease rentals receivable: Not later than 1 year 300,985 240,059 – – Between 1 and 5 years 1,030,601 719,737 – – After 5 years 491,466 448,855 – –
1,823,052 1,408,651 – – (f) Contingent rents, representing income based on sales turnover achieved by tenants, amounted to $3.5 million for
the year (31/12/2010: $4.8 million). 6 subsiDiaries
the company 31/12/2011 31/12/2010 $’000 $’000
(a) unquoted shares, at cost 7,434,320 7,247,453 Less: Allowance for impairment loss (70,264) (113,700)
7,364,056 7,133,753 Add: Amounts owing by subsidiaries: Loan accounts – interest bearing 1,424,750 3,674,750 – interest free 1,956,745 1,636,160 Less: Allowance for doubtful receivables (139,742) (8,960)
3,241,753 5,301,950
10,605,809 12,435,703 (i) The loans to subsidiaries form part of the Company’s net investment in the subsidiaries. These loans are
unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(ii) As at 31 December 2011, the effective interest rates for amounts owing by subsidiaries ranged from 2.10% to 2.95% (31/12/2010: 2.10% to 3.13%) per annum.
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6 subsiDiaries (cont'd) (a) unquoted shares, at cost (cont'd) (iii) Movements in allowance for impairment loss are as follows:
the company 2011 2010 $’000 $’000
At 1 January (113,700) (163,132) Allowance during the year (16,931) (48,541) Allowance written back during the year – 97,973 Allowance utilised upon disposal 60,367 –
At 31 December (70,264) (113,700) During the year, an allowance for impairment loss amounting to $16.9 million (2010: $48.5 million) was
recognised in respect of the Company’s investments in certain subsidiaries as a result of a decline in market value of assets held by these subsidiaries, arising from a decline in the economic environment in which the relevant subsidiaries operate. The recoverable amounts for each of the relevant subsidiaries were estimated based on the higher of the value in use calculation using cash flow projections based on financial budgets and forecasts covering a three year period, or the fair value of the net assets as at balance sheet date. In 2010, a reversal of impairment amounting to $98.0 million was recognised in respect of certain subsidiaries as a result of an increase in the recoverable amounts of these subsidiaries.
(iv) The movements in allowances for doubtful receivables during the year in respect of the amount owing by
subsidiaries are as follows: the company 2011 2010 $’000 $’000
At 1 January (8,960) (18,049) Allowance during the year (130,782) – Allowance written back during the year – 9,089
At 31 December (139,742 ) (8,960) During the year, an allowance for doubtful receivables of $130.8 million was made in respect of loans
extended to subsidiaries, to write down the amount to their estimated fair values.
(b) Details of the subsidiaries are set out in note 38.
7 associates the group 31/12/2011 31/12/2010 1/1/2010 $’000 $’000 $’000 restated restated
(a) Interests in associates Investment in associates 8,668,135 7,479,769 6,490,346 Less: Allowance for impairment loss (48,090) (48,473) (44,473)
8,620,045 7,431,296 6,445,873 Add: Amounts owing by associates: Loan accounts – interest free 339,910 435,112 239,608 – interest bearing 331,289 331,289 289,288
671,199 766,401 528,896
9,291,244 8,197,697 6,974,769 Less: Allowance for doubtful receivables (507) (6,290) (6,950)
9,290,737 8,191,407 6,967,819 (i) Movements in allowance for impairment loss are as follows: the group 2011 2010 note $’000 $’000
At 1 January (48,473) (44,473) Allowance during the year 27(c)(iii) (3,437) (4,000) Allowance utilised 3,820 –
At 31 December (48,090) (48,473) During the year, an allowance for impairment loss amounting to $3.4 million was made in respect of the
Group’s investment in Malaysia to reduce the carrying value of the investment to its recoverable amount. The recoverable amount was estimated based on the residual net asset value of the investment. In 2010, an allowance for impairment loss amounting to $4.0 million was made in respect of the Group’s investments in Gulf Cooperation Council countries.
(ii) The loans to associates form part of the Group’s net investment in associates. These loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(iii) As at 31 December 2011, the effective interest rate for the loans to an associate is 2.54% (31/12/2010: 3.38%; 1/1/2010: 3.80%) per annum.
(iv) Loan accounts include an amount of approximately $331.3 million (31/12/2010: $359.3 million; 1/1/2010: $317.5 million) which is subordinated to the borrowings of certain associates.
(v) The Group’s share of the contingent liabilities of the associates is $339.6 million (31/12/2010: $271.7 million; 1/1/2010: $43.7 million).
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7 associates (cont'd) (a) Interests in associates (cont'd) (vi) The Group’s investments in associates include investments in listed associates with a carrying amount of
$4,774.6 million (31/12/2010: $4,427.7 million; 1/1/2010: $3,780.0 million), for which the published price quotations are $3,900.1 million (31/12/2010: $4,612.4 million; 1/1/2010: $3,578.9 million).
the group 31/12/2011 31/12/2010 1/1/2010 note $’000 $’000 $’000
(b) Amounts owing by/(to) associates: Current accounts (unsecured) – interest free (trade) 60,616 41,484 95,283 – interest free (non-trade) 84,570 241,284 246,775 – interest bearing (non-trade) 269,416 276,836 325,641
414,602 559,604 667,699 Less: Allowance for doubtful receivables (5,475) (6,330) (5,591)
12 409,127 553,274 662,108 Current accounts (mainly non-trade and unsecured) – interest free (114,431) (105,156) (227,870) – interest bearing (155,474) (1,586) (78,638)
16 (269,905) (106,742) (306,508)
(c) In April 2011, the Group acquired 40% interest in Surbana Corporation Pte Ltd (“Surbana”) for $364.0 million (including transaction costs) in cash. The share of fair value of Surbana’s net assets in the Group’s financial statements on the date of the acquisition was $252.1 million.
(d) Details of the associates are set out in note 39. (e) The financial information of the associates, not adjusted for the percentage ownership held by the Group is
as follows: the group 31/12/2011 31/12/2010 1/1/2010 $’000 $’000 $’000 restated restated
balance sheet Total assets 47,535,023 40,834,474 26,975,175
Total liabilities 22,345,535 14,701,854 12,830,795 income statement Revenue 4,682,279 3,454,559
Profit after taxation 1,969,598 2,142,944
8 Joint ventures
the group 31/12/2011 31/12/2010 1/1/2010 $’000 $’000 $’000 restated restated
(a) Interests in joint ventures Investment in joint ventures 1,123,804 1,206,893 859,974 Less: Allowance for impairment loss (10,211) (13,004) (22,417)
1,113,593 1,193,889 837,557 Amounts owing by joint ventures: Loan accounts – interest free 104,841 217,641 190,743 – interest bearing 188,954 459,327 509,193
293,795 676,968 699,936
1,407,388 1,870,857 1,537,493 Less: Allowance for doubtful receivables (13,125) (13,497) (12,099)
1,394,263 1,857,360 1,525,394 (i) Movements in allowance for impairment loss are as follows: the group 2011 2010 note $’000 $’000
At 1 January (13,004) (22,417) Allowance written back during the year 27(a) – 9,413 Allowance utilised 2,793 –
At 31 December (10,211) (13,004) (ii) The loans to joint ventures form part of the Group’s net investment in joint ventures. These loans are
unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(iii) As at 31 December 2011, the effective interest rates for the loans to joint ventures ranged from 1.00% to 7.25% (31/12/2010: 1.00% to 6.00%; 1/1/2010: 1.00% to 9.00% ) per annum.
(iv) Loan accounts include an amount of approximately $182.1 million (31/12/2010: $177.1 million; 1/1/2010: $570.7 million) subordinated to the borrowings of certain joint ventures.
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8 Joint ventures (cont'd) (b) Amounts owing by/(to) joint ventures:
the group 31/12/2011 31/12/2010 1/1/2010 note $’000 $’000 $’000
Current accounts (unsecured) – interest free (trade) 13,693 11,457 16,771 – interest free (non-trade) 145,814 167,220 205,916 – interest bearing (non-trade) – – 694
159,507 178,677 223,381 Less: Allowance for doubtful receivables (9,606) (11,252) (9,044)
12 149,901 167,425 214,337 Current accounts (unsecured) – interest free (mainly non-trade) (31,139 ) (22,050) (20,135) – interest bearing (non-trade) – – (11)
16 (31,139 ) (22,050) (20,146)
(c) Details of the joint ventures are set out in note 40.
(d) Movements in allowance for doubtful receivables in respect of the above loans and current accounts are as follows: the group 2011 2010 $’000 $’000
At 1 January (24,749) (21,143) Allowance during the year (990) (4,500) Allowance written back during the year 1,622 6 Allowance utilised 395 – Translation differences 991 888
At 31 December (22,731) (24,749)
8 Joint ventures (cont'd) (e) The Group’s share of the joint ventures’ assets, liabilities and results is as follows: the group 31/12/2011 31/12/2010 1/1/2010 $’000 $’000 $’000 restated restated
balance sheet Investment properties 2,107,386 1,617,720 1,556,170 Other non-current assets 56,964 131,386 112,789
2,164,350 1,749,106 1,668,959 Current assets 1,120,963 1,440,566 1,842,524 Less: Current liabilities (310,452) (440,225) (868,301)
Net current assets 810,511 1,000,341 974,223
2,974,861 2,749,447 2,643,182 Less: Non-current liabilities (1,797,894) (1,496,184) (1,671,203)
1,176,967 1,253,263 971,979 income statement Revenue 599,222 1,182,469 Expenses (468,261) (733,061) Fair value gains on investment properties 109,893 94,086
Profit before taxation 240,854 543,494 Taxation (15,402) (78,472)
Profit after taxation 225,452 465,022
(f) The Group’s share of the capital commitments of the joint ventures is $333.2 million (31/12/2010: $199.8 million;
1/1/2010: $183.5 million).
(g) The Group’s share of the contingent liabilities of the joint ventures is $0.1 million (31/12/2010: $41.8 million; 1/1/2010: $70.8 million).
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9 DeFerreD taxation The movements in the deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction)
during the financial year are as follows:
at effect of 1/1/2011 change in recognised as previously accounting at 1/1/2011 in profit recognised Disposal of translation at reported policy as restated or loss in equity subsidiaries differences 31/12/2011 the group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities Accelerated tax depreciation 12,736 – 12,736 1,093 – – 591 14,420 Discounts on compound financial instruments 55,176 – 55,176 (10,809) – – – 44,367 Accrued income and interest receivable 13,661 – 13,661 1,359 – – 18 15,038 Capital allowances of assets in investment properties 10,075 – 10,075 (7,927) – – – 2,148 Profits recognised on percentage of completion and fair value adjustments on initial recognition of development properties for sale 447,192 (16,517) 430,675 22,243 – (1,925) 10,687 461,680 Fair value changes of investment properties 95,692 – 95,692 46,449 – (7,539) 5,611 140,213 unremitted earnings/ Deferred income 26,309 – 26,309 14,409 – – 548 41,266 Derivative financial instruments 589 – 589 (606) – – 17 – Others 22,766 – 22,766 (9,846) (1,482) (2,104) 161 9,495
Total 684,196 (16,517) 667,679 56,365 (1,482) (11,568) 17,633 728,627 Deferred tax assets unutilised tax losses (74,900) (3,527) (78,427) 17,372 – – (634) (61,689) Provisions and expenses (57,385) – (57,385) (367) – – (846) (58,598) Deferred income (17,741) – (17,741) (4,645) – – (423) (22,809) Fair value adjustments on initial recognition of development properties for sale (23,592) – (23,592) – – – (626) (24,218) Others (5,026) (3,122) (8,148) (21,406) – – 208 (29,346)
Total (178,644) (6,649) (185,293) (9,046) – – (2,321) (196,660)
9 DeFerreD taxation (cont'd)
at effect of 1/1/2010 change in recognised acquisition/ at as previously accounting at 1/1/2010 in profit recognised Disposal of translation 31/12/2010 reported policy as restated or loss in equity subsidiaries differences as restated the group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities Accelerated tax depreciation 25,117 – 25,117 7,873 – (16,725) (3,529) 12,736 Discounts on compound financial instruments 65,986 – 65,986 (10,810) – – – 55,176 Accrued income and interest receivable 7,340 – 7,340 5,605 – – 716 13,661 Capital allowances of assets in investment properties 9,851 – 9,851 283 – – (59) 10,075 Profits recognised on percentage of completion and fair value adjustments on initial recognition of development properties for sale 87,632 (29,152) 58,480 (2,700) – 396,699 (21,804) 430,675 Fair value changes of investment properties 26,820 – 26,820 67,425 – 11,495 (10,048) 95,692 unremitted earnings/ Deferred income 39,042 – 39,042 (12,852) – – 119 26,309 Derivative financial instruments – – – 578 – – 11 589 Others 10,389 – 10,389 10,394 1,470 1,998 (1,485) 22,766
Total 272,177 (29,152) 243,025 65,796 1,470 393,467 (36,079) 667,679 Deferred tax assets unutilised tax losses (75,692) (1,710) (77,402) (12,654) – 8,038 3,591 (78,427) Provisions and expenses (75,214) – (75,214) 14,170 – 3,202 457 (57,385) Deferred income (15,528) – (15,528) (2,028) – – (185) (17,741) Derivative financial instruments (3,609) – (3,609) – 3,647 – (38) – Fair value adjustments on initial recognition of development properties for sale – – – – – (24,652) 1,060 (23,592) Others (9,628) – (9,628) (1,339) – – 2,819 (8,148)
Total (179,671) (1,710) (181,381) (1,851) 3,647 (13,412) 7,704 (185,293)
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9 DeFerreD taxation (cont'd)
recognised at in profit at 1/1/2011 or loss 31/12/2011 the company $’000 $’000 $’000
Deferred tax liabilities Discounts on compound financial instruments 55,176 (10,809) 44,367 Deferred tax assets Provisions (3,135) 251 (2,884) recognised at in profit at 1/1/2010 or loss 31/12/2010 the company $’000 $’000 $’000
Deferred tax liabilities Discounts on compound financial instruments 65,986 (10,810) 55,176 Deferred tax assets Provisions (5,461) 2,326 (3,135)
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred taxes relate to the same taxation authority. The following amounts, determined after appropriate offsetting, are shown on the balance sheets:
the group the company 31/12/2011 31/12/2010 1/1/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000 $’000 restated restated
Deferred tax liabilities 627,638 576,721 144,604 44,367 55,176 Deferred tax assets (95,671) (94,335) (82,960) (2,884) (3,135)
531,967 482,386 61,644 41,483 52,041
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. The Group has not recognised deferred tax assets in respect of the following:
the group 31/12/2011 31/12/2010 $’000 $’000 restated
Deductible temporary differences 77,759 118,232 Tax losses 421,764 350,051 unutilised capital allowances 5,686 819
505,209 469,102
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the subsidiaries of the Group can utilise the benefits. The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries operate. The deductible temporary differences do not expire under current tax legislation.
10 other non-current/other current assets
the group 31/12/2011 31/12/2010 note $’000 $’000
(a) Other non-current assets Available-for-sale equity securities 349,343 202,494 Derivative assets 31,720 4,814 Amounts owing by: – associates and a joint venture (interest free) 8,481 – – a joint venture (interest bearing) (i) 135,000 – Interest receivables (ii) 50,500 37,591 Other receivables (iii) 169,283 63,306 Prepayments (iv) 51,628 –
795,955 308,205
(i) Amount owing by the joint venture is unsecured and bears an effective interest rate of 3.25% per annum.
(ii) Interest receivables include (i) $39.6 million (31/12/2010: $28.8 million) in respect of loan to an associate which bears an interest rate of 2.54% (31/12/2010: 3.38%) per annum and is due on 31 December 2014; and (ii) $10.9 million (31/12/2010: $8.8 million) in respect of loan to a joint venture which bears an interest rate of 1.45% (31/12/2010: 1.38%) per annum and is due after the Temporary Occupation Permit for the development property is obtained, which is expected to be in December 2013.
(iii) Other receivables include: (a) $31.9 million (31/12/2010: Nil) due from a third party which bears an effective interest rate of 8.3%
(31/12/2010: Nil) per annum, is secured and repayable in June 2013, or extendable by one year as mutually agreed;
(b) $34.4 million (31/12/2010: Nil) from a third party which bears an effective interest rate of 13.0% per annum (31/12/2010: Nil), is secured and repayable in July 2013;
(c) Consideration receivable of $76.9 million relating to the sale of a joint venture. The consideration will be paid in four annual instalments with the first instalment due on 7 April 2012 (note 14); and
(d) As at 31 December 2010, other receivables included an amount of $42.9 million due from a third party which bore an effective interest rate of 5.4% per annum, was unsecured and repayable in June 2012, or such earlier date as mutually agreed. This amount has been fully repaid in 2011.
(iv) The prepayments relate to progress payments for a property under development and facility fees.
(b) Other current assets
the group 31/12/2011 31/12/2010 $’000 $’000
Available-for-sale money market investment 195,000 195,000 Derivative assets – 8,009
195,000 203,009
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11 DeveLopMent properties For saLe anD stocKs the group 31/12/2011 31/12/2010 1/1/2010 $’000 $’000 $’000 restated restated
(a) Properties in the course of development, at cost 7,535,406 5,755,337 3,851,359 Less: Allowance for foreseeable losses (47,693) (47,693) (42,693)
7,487,713 5,707,644 3,808,666 Add: Attributable profit 347,845 50,945 108,942
7,835,558 5,758,589 3,917,608 Less: Progress billings (1,19 0,853) (434,763) (630,173 )
6,644,705 5,323,826 3,287,435 (b) Completed development properties, at cost 259,948 343,003 290,794 (c) Consumable stocks 471 320 26 Total development properties for sale and stocks 6,905,124 5,667,14 9 3,578,255
(d) The Group adopts the percentage of completion method of revenue recognition for residential projects under
progressive payment scheme in Singapore. The stage of completion is measured in accordance with the accounting policy stated in note 2(n). Significant assumptions are required in determining the stage of completion, the total estimated development costs and the estimated total revenue. In making the assumptions, the Group evaluates them by relying on past experience and the work of specialists.
The Group makes allowance for foreseeable losses taking into account the Group’s recent experience in estimating net realisable values of completed units and properties under development by reference to comparable properties, timing of sale launches, location of property, expected net selling prices and development expenditure. Market conditions may, however, change which may affect the future selling prices on the remaining unsold residential units of the development properties and accordingly, the carrying value of development properties for sale may have to be written down in future periods.
(e) During the financial year, the following amounts were capitalised as cost of development properties for sale:
the group 31/12/2011 31/12/2010 note $’000 $’000
Staff costs 27(b) 61,404 52,119 Interest costs paid/payable 27(d) 100,725 83,321 Less: Interest received/receivable from project fixed deposit accounts 27(a) (474) (259)
161,655 135,181
11 DeveLopMent properties For saLe anD stocKs (cont'd) (f) As at 31 December 2011, development properties for sale amounting to approximately $2,037.7 million
(31/12/2010: $1,069.0 million; 1/1/2010: $1,820.2 million) were mortgaged to banks to secure credit facilities of the Group (note 18).
(g) As at 31 December 2011, properties amounting to approximately $77.8 million (31/12/2010: $137.5 million; 1/1/2010: $93.9 million) were acquired through unconditional exchange contracts with various land vendors. The related amount owing to land vendors is secured over the title of the properties being purchased (notes 16 and 21).
12 traDe anD other receivabLes
the group the company 31/12/2011 31/12/2010 1/1/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000 $’000 restated restated
Accrued receivables (a) 2,959 115,830 57,413 – – Trade receivables 13 386,773 280,853 143,626 227 20 Deposits and other receivables 14 696,564 891,558 140,557 438 278 Amounts owing by: – subsidiaries 17 – – – 2,588,058 1,163,057 – associates 7(b) 409,127 553,274 662,108 – – – joint ventures 8(b) 149,901 167,425 214,337 – – – investees: – interest free 1,645 1,789 38 – – – interest bearing 53,914 – 2,003 – – – non-controlling interests (unsecured and interest free) 640 – 35,279 – –
Loans and receivables 33(e) 1,701,523 2,010,729 1,255,361 2,588,723 1,163,355 Prepayments 67,851 122,980 51,947 1,579 3,171
1,769,374 2,133,709 1,307,308 2,590,302 1,166,526
(a) Accrued receivables relate mainly to the balance of sales consideration to be billed upon the completion of the
Group’s development properties for sale.
(b) As at 31 December 2011, certain trade and other receivables amounting to approximately $77.6 million (31/12/2010: $1.8 million; 1/1/2010: $224.3 million) were mortgaged to banks to secure credit facilities of the Group (note 18).
13 traDe receivabLes the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000 restated
Trade receivables 397,450 295,368 227 20 Less: Allowance for doubtful receivables (10,677) (14,515) – –
12 386,773 280,853 227 20
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13 traDe receivabLes (cont'd) (a) The maximum exposure to credit risk for trade receivables at the reporting date (by strategic business units) is: the group 31/12/2011 31/12/2010 $’000 $’000 restated
CapitaLand Residential Singapore 83,176 33,629 CapitaLand China Holdings 3,285 1,724 CapitaLand Commercial 14,493 14,576 Ascott 35,890 42,936 CapitaValue Homes 12,134 3,467 CapitaLand Financial 39,425 49,254 CapitaMalls Asia 131,387 28,890 Australand 63,689 103,338 Others 3,294 3,039
386,773 280,853
The credit quality of trade and other receivables is assessed based on credit policy established by the Risk
Committee. The Group monitors customer credit risk by grouping trade and other receivables based on their characteristics. Trade and other receivables with high credit risk will be identified and monitored by the respective strategic business units.
(b) The ageing of trade receivables at the reporting date is: allowance allowance gross for doubtful gross for doubtful amount receivables amount receivables 31/12/2011 31/12/2011 31/12/2010 31/12/2010 $’000 $’000 $’000 $’000 the group restated
Not past due 337,057 – 240,426 – Past due 1 – 30 days 11,985 (130) 17,073 (3,410 ) Past due 31 – 90 days 16,213 (108) 14,736 (5,448) More than 90 days 32,195 (10,439) 23,133 (5,657)
397,450 (10,677) 295,368 (14,515)
(c) The movements in allowance for doubtful receivables in respect of trade receivables during the year are as follows: the group 2011 2010 $’000 $’000
At 1 January (14,515) (10,655) Allowance utilised 726 464 Write-back/(Allowance) during the year 2,856 (4,255) Translation differences 256 (69)
At 31 December (10,677) (14,515)
Based on historical default rates, the Group believes that no allowance for doubtful debts is necessary in respect
of the receivables not past due.
14 Deposits anD other receivabLes
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000
Deposits 586,728 292,494 306 228
Other receivables 127,111 609,511 132 50 Less: Allowance for doubtful receivables (19,771) (17,823) – –
107,340 591,688 132 50 Tax recoverable 2,496 7,376 – –
12 696,564 891,558 438 278
Other receivables include staff loans, interest receivables, deferred sales consideration and other recoverables.
As at 31 December 2010, other receivables included consideration receivable of $399.9 million and loans of $50.8 million assigned to the buyers relating to the sale of a subsidiary. The amounts have been fully received in 2011.
Other than disclosed above, the Group believes that no additional allowance for doubtful debts is required in respect of the other receivables.
15 cash anD cash equivaLents
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000
Fixed deposits 3,393,993 5,629,566 319,194 52,647 Cash at banks and in hand 2,767,834 1,364,912 7,345 1,307 Amounts held under “Project Account Rules – 1997 Ed” (a) 102,646 195,586 – –
Cash and cash equivalents 6,264,473 7,190,064 326,539 53,954
Restricted bank deposits (b) (9,506) (2,729)
Cash and cash equivalents in the statement of cash flows 6,254,967 7,187,335
(a) The withdrawal from amounts held under “Project Account Rules – 1997 Ed” are restricted to payments for expenditure incurred on development projects.
(b) These are bank balances of certain subsidiaries pledged in relation to bankers’ guarantees issued to the subsidiaries’ contractors.
(c) The Group’s cash and cash equivalents are held mainly in Singapore Dollars, uS Dollars, Australian Dollars, Chinese Renminbi and Malaysian Ringgit. As at 31 December 2011, the effective interest rates for cash and cash equivalents ranged from 0% to 14.0% (31/12/2010: 0% to 13.0%) per annum.
The cash and cash equivalents are held with banks and financial institutions which meet the appropriate credit criteria and are of high credit standing.
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16 traDe anD other paYabLes
the group the company 31/12/2011 31/12/2010 1/1/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000 $’000 restated restated
Trade payables 115,382 115,021 121,756 84 2,239 Accruals (a) 587,685 583,197 530,968 44,106 37,649 Accrued development expenditure 278,770 321,632 209,535 – – Accrued capital expenditure (b) 42,563 107,065 78,565 – – Other payables (c) 317,426 271,977 339,483 975 1,867 Rental and other deposits 33,291 29,413 33,519 3 3 Derivative liabilities 58,175 3,216 40,539 – – Provisions 21(a) 18,596 7,177 8,995 – – Liability for employee benefits 22 38,644 40,542 46,272 20,221 22,927 Amounts owing to: – subsidiaries 17 – – – 5,445 130,682 – associates 7(b) 269,905 106,742 306,508 – – – joint ventures 8(b) 31,139 22,050 20,146 – – Non-controlling interests (unsecured): – interest free 55,142 41,747 116,127 – – – interest bearing 105,000 198 203 – – Progress billings 318,770 400,108 197,852 – –
2,270,488 2,050,085 2,050,468 70,834 195,367
(a) Accruals included accrued interest payable, accrued expenditure for property, plant and equipment purchases
and accrued administrative expenses.
(b) Accrued capital expenditure relates to amounts owing by a subsidiary of the Group to land vendors under certain unconditional contracts entered into to purchase properties for future developments. The total acquisition cost of the properties has been included in development properties for sale and the amount payable is secured over the relevant development properties.
(c) Other payables included retention sums and amounts payable in connection with capital expenditure incurred.
17 aMounts owing bY/(to) subsiDiaries
the company 31/12/2011 31/12/2010 note $’000 $’000
current Amounts owing by subsidiaries: – current accounts, mainly non-trade and interest bearing 24,977 52,835 – current loan – interest free 367,573 988,374 – interest bearing 2,226,133 177,797
2,593,706 1,166,171 Less: Allowance for doubtful receivables (30,625) (55,949)
2,563,081 1,110,222
12 2,588,058 1,163,057
17 aMounts owing bY/(to) subsiDiaries (cont'd)
the company 31/12/2011 31/12/2010 note $’000 $’000
current (cont'd) Amounts owing to subsidiaries: – current accounts, mainly non-trade and interest bearing – (293) – current loan – interest free (5,445) (130,389)
16 (5,445) (130,682)
(a) Movements in allowance for doubtful receivables are as follows:
the company 31/12/2011 31/12/2010 $’000 $’000
At 1 January 55,949 100,456 Allowance during the year 2,575 – Allowance written back during the year (3,109 ) (44,507) Allowance utilised upon disposal (24,790) –
At 31 December 30,625 55,949
(b) All balances with subsidiaries are unsecured, repayable on demand and bear effective interest rates ranged from 0.03% to 1.00% (31/12/2010: 0.03% to 0.06%) per annum.
18 banK borrowings
the group 31/12/2011 31/12/2010 $’000 $’000
Bank borrowings – secured 2,3 41,774 1,276,512 – unsecured 4,19 0,027 3,374,15 3
6,531,801 4,650,665 Repayable: Not later than 1 year 426,011 852,255
Between 1 and 2 years 1,14 5,806 1,420,784 Between 2 and 5 years 4,863,061 2,061,522 After 5 years 96,923 316,10 4
After 1 year 6,105,790 3,798,410
6,531,801 4,650,665 (a) The Group’s borrowings are denominated mainly in Singapore Dollars, Australian Dollars, uS Dollars, Hong Kong
Dollars, Japanese Yen and Chinese Renminbi. As at 31 December 2011, the effective interest rates for bank borrowings ranged from 0.73% to 12.00% (31/12/2010: 0.63% to 16.00%) per annum.
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18 banK borrowings (cont'd) (b) Bank borrowings are secured by the following assets, details of which are disclosed in the respective notes to the
financial statements:
(i) mortgages on the borrowing subsidiaries’ property, plant and equipment, investment properties and development properties for sale; and
(ii) assignment of all rights, titles and benefits with respect to the properties mortgaged.
19 Debt securities Debt securities comprise fixed rate notes, floating rate notes, hybrid rate notes and bonds issued by the Company and
subsidiaries in the Group. the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
Convertible bonds 3,448,046 3,370,641 3,432,956 3,379,883 Notes and bonds 2,210,792 2,336,737 – –
5,658,838 5,707,378 3,432,956 3,379,883 Secured notes and bonds 140,409 339,551 – – unsecured notes and bonds 5,518,429 5,367,827 3,432,956 3,379,883
5,658,838 5,707,378 3,432,956 3,379,883 Repayable: Not later than 1 year 434,228 909,519 – –
Between 1 and 2 years – 300,000 – – Between 2 and 5 years 1,989,426 129,869 1,443,181 – After 5 years 3,235,18 4 4,367,990 1,989,775 3,379,883
After 1 year 5,224,610 4,797,859 3,432,956 3,379,883
5,658,838 5,707,378 3,432,956 3,379,883 (a) As at 31 December 2011, the effective interest rates for debt securities ranged from 1.00% to 5.81%
(31/12/2010: 0.97% to 6.27%) per annum.
(b) The repayment schedule for convertible bonds was based on its final maturity dates.
(c) The Group and the Company have the following convertible bonds which remain outstanding as at 31 December 2011:
aggregate principal Final amount conversion interest Maturity redemption Date issued outstanding price rate put Dates Dates price
15 November 2006 $424.7 million $6.01 2.1% 15 November 2013 15 November 2016 100% 20 June 2007 $1.0 billion $11.5218 2.95% 20 June 2017 20 June 2022 100% & 20 June 2019 5 March 2008 $1.05 billion $7.1468 3.125% 5 March 2015 5 March 2018 109.998% 3 September 2009 $1.2 billion $4.7247 2.875% – 3 September 2016 100%
19 Debt securities (cont'd) (d) Secured debt securities (i) As at 31 December 2011, the secured notes and bonds were fully secured by mortgages on the investment
properties of the Group amounting to $372.8 million. Details on assets pledged are disclosed in the respective notes to the financial statements.
(ii) A subsidiary of the Group, Australand, repaid its Commercial Mortgage-backed Securities amounting to A$267.5 million, equivalent to $339.6 million, on the scheduled maturity date of 10 March 2011. These notes were fully secured by a first ranking real property mortgage over specific investment properties.
(e) unsecured debt securities The holders of certain debt securities have the option to have all or any of their notes purchased by the Group
at their principal amounts on interest payment dates. unless previously redeemed or purchased and cancelled, the debt securities are redeemable at the principal amounts on their respective maturity dates.
20 Finance Leases There was no outstanding obligation under finance leases as at 31 December 2011 and 31 December 2010
following the sale of certain subsidiaries by the Group in 2010. At 1 January 2010, the Group had obligations under finance leases that were repayable as follows:
Lease principal interest payments $’000 $’000 $’000
1/1/2010 Repayable: Not later than 1 year 3,836 738 4,574 Between 1 and 5 years 17,199 2,085 19,284 After 5 years 16,546 681 17,227 After 1 year 33,745 2,766 36,511
37,581 3,504 41,085
21 other non-current LiabiLities
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000
Amounts owing to non-controlling interests (unsecured) – interest free 61,549 112,378 – – – interest bearing 142,269 157,919 – – Amounts owing to an associate (unsecured and interest bearing) 129,349 – – – Liability for employee benefits 22 36,066 39,941 27,815 32,373 Derivative liabilities 77,347 6,767 – – Provisions (a) 39,615 175,322 – – Customer deposits and other non-current payables (b) 63,535 47,929 – – Deferred income 400 431 – –
550,130 540,687 27,815 32,373
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21 other non-current LiabiLities (cont'd) (a) The provisions relate to the Group’s exposure to unavoidable costs of meeting its obligation under contractual
agreements. Movements in the provisions are as follows: the group 2011 2010 note $’000 $’000
At 1 January 182,499 163,691 Provision during the year 27(c)(iii) – 25,848 Provision written back during the year 27(a) (2,700) – Provision utilised (2,950) (7,040) Set off against available-for-sale equity security (i) (124,165) – Translation differences 5,527 –
At 31 December 58,211 182,499 Current 16 18,596 7,177 Non-current 39,615 175,322
58,211 182,499
(i) During the financial year, provisions amounting to $124.2 million were set off against the carrying amount of an unquoted available-for-sale equity investment (note 10(a)).
(b) The other non-current payables include an amount of approximately $35.2 million (31/12/2010: $30.5 million), owing to land vendors on terms similar to those described in note 16(b).
22 eMpLoYee beneFits
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 note $’000 $’000 $’000 $’000
Liability for short term accumulating compensated absences 5,027 5,594 910 722 Liability for long service leave entitlement 6,334 5,359 – – Liability for cash-settled share-based payments 5,823 9,682 512 807 Liability for staff incentive 57,526 59,848 46,614 53,771
74,710 80,483 48,036 55,300 Current 16 38,644 40,542 20,221 22,927 Non-current 21 36,066 39,941 27,815 32,373
74,710 80,483 48,036 55,300
(a) Long service leave entitlement This liability relates principally to provision made by a foreign subsidiary in relation to employees’ leave entitlement
granted after certain qualifying periods based on duration of employees’ services rendered.
22 eMpLoYee beneFits (cont'd) (b) staff incentive This relates to staff incentive which is based on the achievement of the Group’s financial performance and
payable over a period of time.
(c) equity compensation benefits Share Plans of the Company A new CapitaLand Performance Share Plan 2010 and CapitaLand Restricted Share Plan 2010 were approved
by the members of the Company at the Extraordinary General Meeting held on 16 April 2010. These plans replaced the CapitaLand Performance Share Plan 2000 and CapitaLand Restricted Stock Plan 2000 which were terminated. All awards granted under the previous share plans prior to its termination will continue to be valid and be subject to the terms and conditions of the plans. The first grant of award under the new share plans was made in March 2011. The duration of each share plan is 10 years commencing on 16 April 2010.
The details of options and awards in the Company since commencement of the Share Plans were as follows:
<-------------------- aggregate options/shares ------------------> exercised/ Lapsed/ balance as of granted released cancelled 31 December 2011 no. of shares no. of shares no. of shares no. of shares
CapitaLand Share Option Plan 159,442,307 (114,777,799) (35,664,264) 9,000,244 CapitaLand Performance Share Plan 2000 34,594,651 (17,393,355) (11,071,742 ) 6,129,554 CapitaLand Restricted Stock Plan 2000 33,689,553 (20,560,517) (6,316,863) 6,812,17 3
Total 227,726,511 (152,731,671) (53,052,869) 21,941,971 CapitaLand Performance Share Plan 2010 3,324,300 – (184,800) 3,139,500 CapitaLand Restricted Share Plan 2010 6,676,870 – (426,465) 6,250,405
Total 10,001,170 – (611,265) 9,389,905
During the year, the aggregate number of new shares issued and/or to be issued pursuant to the 2010 Share Plans did not exceed 8% of the total number of shares (excluding treasury shares) in the capital of the Company.
CapitaLand Share Option Plan The Company ceased to grant options under the CapitaLand Share Option Plan with effect from 2007. Statutory
information regarding the CapitaLand Share Option Plan is set out below:
(i) The exercise price of the options is set either at: – A price equal to the volume-weighted average price on the SGX-ST over the three consecutive trading
days immediately preceding the grant of the option (“Market Price”), or such higher price as may be determined by the ERCC in its absolute discretion; or
– A discount not exceeding 20% of the Market Price in respect of that option.
(ii) The options vest between one year and four years from the grant date.
(iii) The options granted expire after five or 10 years from the dates of the grant.
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22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) CapitaLand Share Option Plan (cont'd) Movements in the number of outstanding options and their related weighted average exercise prices are as follows: weighted average weighted average exercise price no. of options exercise price no. of options 2011 2011 2010 2010 $ (‘000) $ (‘000)
At 1 January 2.71 10,400 2.78 18,707 Lapsed/Cancelled 3.02 (280) 2.87 (259) Exercised 2.50 (1,120 ) 2.75 (8,048)
At 31 December 2.72 9,000 2.71 10,400 Exercisable on 31 December 2.72 9,000 2.71 10,400
Options exercised in 2011 resulted in 1,120,367 (31/12/2010: 8,048,400) shares being issued at a weighted average market price of $3.34 (31/12/2010: $3.93) each. Options were exercised on a regular basis throughout the year. The weighted average share price during the year was $2.94 (31/12/2010: $3.88).
The fair value of services received in return for options granted is measured by reference to the fair value of
options granted. The fair value of the options granted is measured based on Enhanced Trinomial (Hull and White) valuation model.
Options outstanding at the end of the year are summarised below: options weighted options weighted outstanding average outstanding average 31/12/2011 contractual life 31/12/2010 contractual life range of exercise price (‘000) (years) (‘000) (years)
$0.30 to $0.44 227 1.18 247 2.1 8 $0.45 to $0.50 615 2.00 678 3.00 $0.51 to $1.09 39 2.66 43 3.66 $1.10 to $1.43 – – 97 0.46 $1.44 to $2.16 1,632 3.18 1,923 4.1 8 $2.17 to $4.10 6,487 4.21 7,412 5.01
9,000 10,400
CapitaLand Performance Share Plan This relates to compensation costs of the Company’s Performance Share Plan reflecting the benefits accruing
to the employees over the service period to which the performance criteria relate. The number of shares outstanding under the CapitaLand Performance Share Plan at the end of the year is
summarised below: 2011 2010 (’000) (’000)
At 1 January 9,219 9,464 Granted 3,324 3,227 Lapsed/Cancelled (3,274) (3,499) Additional shares granted arising from modification – 363 Released – (336)
At 31 December 9,269 9,219
22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) CapitaLand Performance Share Plan (cont'd) The final number of shares to be released will depend on the achievement of pre-determined targets over a
three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. Conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
The fair values of the shares are determined using Monte Carlo simulation method at the measurement date which
projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of award 2011 2010
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $2.52 $2.92 Expected volatility based on 36 months closing share price prior to grant date 34.61% 32.69% MSCI Asia Pacific ex-Japan Real Estate Index annualised volatility based on 36 months prior to grant date 28.76% 23.77% Share price at grant date $3.33 $3.89 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the length of vesting period 0.44% 0.67% Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 1.67% 1.57% Correlation of return between MSCI Asia Pacific ex-Japan Real Estate Index and the Company’s share price measured over 36 months prior to the grant date 71.47% 67.74%
CapitaLand Restricted Stock/Share Plan – Equity-settled/Cash-settled This relates to compensation costs of the Company’s Restricted Stock/Share Plan reflecting the benefits accruing
to the employees over the service period to which the performance criteria relate. The Company granted awards of shares under the CapitaLand Restricted Stock/Share Plan in place of options with effect from 2007.
The ERCC of the Company has instituted a set of share ownership guidelines for senior management who
receives shares under the CapitaLand Restricted Stock/Share Plan. under these guidelines, members of the senior management team are required to retain a portion of the total number of CapitaLand shares acquired through the CapitaLand Restricted Stock/Share Plan which will vary according to their job grades and base salaries.
The number of shares outstanding under the CapitaLand Restricted Stock/Share Plan at the end of the year is
summarised below:
2011 2010 (’000) (’000)
At 1 January 13,491 13,621 Granted 7,422 8,597 Lapsed/Cancelled (1,101) (1,803) Additional shares granted arising from modification – 254 Released@ (6,749) (7,178 )
At 31 December 13,063 13,491
@ The number of shares released during the year was 6,748,830 (31/12/2010: 7,177,767), of which 922,162 (31/12/2010: 1,063,145) were cash-settled.
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22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) CapitaLand Restricted Stock/Share Plan – Equity-settled/Cash-settled (cont'd) As at 31 December 2011, the number of shares comprised in awards granted under the CapitaLand Restricted
Stock/Share Plan is as follows:
31/12/2011 31/12/2010 equity-settled cash-settled equity-settled cash-settled (‘000) (‘000) (‘000) (‘000)
Final number of shares has not been determined (baseline award)# 5,506 744 5,079 664 Final number of shares determined but not released 5,939 874 6,594 1,154
11,445 1,618 11,673 1,818 # The final number of shares released could range from 0% to 150% of the baseline award.
The final number of shares to be released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. Conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost. The awards granted to non-executive directors in 2010 are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
Cash-settled awards of shares are measured at their current fair values at each balance sheet date. The fair values of the shares are determined using Monte Carlo simulation method at the measurement date
which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of award 2011 2010
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $3.05 $3.78 Expected volatility based on 36 months closing share price prior to grant date 34.61% 32.69% Share price at grant date $3.14 $3.89 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the 0.32% to 0.38% to length of vesting period 0.45% 0.67% Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 1.66% 1.57%
22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) Share Plans of Subsidiaries (a) capitaMalls asia Limited (“cMa”) The CMA Performance Share Plan and the CMA Restricted Stock Plan (collectively referred to as the
“CMA Share Plans”) were approved and adopted by the shareholders of CMA at an Extraordinary General Meeting held on 30 October 2009.
CMA Performance Share Plan This relates to compensation costs of the CMA’s Performance Share Plan reflecting the benefits accruing
to the employees of CMA over the service period to which the performance criteria relate. The number of shares outstanding under the CMA Performance Share Plan at the end of the year is
summarised below:
2011 2010 (’000) (’000)
At 1 January 872 – Granted 1,326 872 Lapsed/Cancelled (40) –
At 31 December 2,158 872
The final number of shares to be released will depend on the achievement of pre-determined targets over a
three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. Conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
The fair values of the shares are determined using Monte Carlo simulation method at the measurement date
which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of award 2011 2010
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $1.19 $1.88 Expected volatility based on average of peers’ 36 months closing share price prior to grant date 25.70% 36.38% MSCI Asia Pacific ex-Japan Real Estate Index annualised volatility based on 36 months prior to grant date 26.92% 26.06% Share price at grant date $1.77 $2.34 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the length of vesting period 0.44% 0.67% Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 1.15% 0.71% Correlation of return between MSCI Asia Pacific ex-Japan Real Estate Index and CMA’s share price measured over 36 months prior to the grant date 69.36% 68.21%
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22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) Share Plans of Subsidiaries (cont'd) (a) capitaMalls asia Limited (“cMa”) (cont'd) CMA Restricted Stock Plan – Equity-settled/Cash-settled This relates to compensation costs of the CMA’s Restricted Stock Plan reflecting the benefits accruing to
the employees of CMA over the service period to which the performance criteria relate. The number of shares outstanding under the CMA Restricted Stock Plan at the end of the year is
summarised below: 2011 2010 (’000) (’000)
At 1 January 4,117 – Granted 6,036 4,634 Lapsed/Cancelled (646) (517) Released@ (1,520) –
At 31 December 7,987 4,117
@ The number of shares released during the year was 1,520,317 (31/12/2010: Nil), of which 438,490 (31/12/2010: Nil) were
cash-settled.
As at 31 December 2011, the number of shares comprised in awards granted under the CMA Restricted Stock Plan is as follows:
31/12/2011 31/12/2010 equity-settled cash-settled equity-settled cash-settled (‘000) (‘000) (‘000) (‘000)
Final number of shares has not been determined (baseline award)# 3,672 1,536 2,907 1,210 Final number of shares determined but not released 1,988 791 – –
5,660 2,327 2,907 1,210
# The final number of shares released could range from 0% to 150% of the baseline award.
The final number of shares to be released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. Conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
CMA has instituted a set of share ownership guidelines for senior management who receive shares under
the CMA Restricted Stock Plan. under these guidelines, members of the senior management team are required to retain a portion of the total number of CMA shares acquired through the CMA Restricted Stock Plan which will vary according to their job grades and base salaries. The awards to non-executive directors in 2010 are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) Share Plans of Subsidiaries (cont'd) (a) capitaMalls asia Limited (“cMa”) (cont'd) CMA Restricted Stock Plan – Equity-settled/Cash-settled (cont'd) Cash-settled awards of shares are measured at their current fair values at each balance sheet date. The fair values of the shares are determined using Monte Carlo simulation method at the measurement date
which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of award 2011 2010
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $1.69 $2.30 Expected volatility based on average of peers’ 36 months closing share price prior to grant date 25.70% 36.38% Share price at grant date $1.72 $2.34 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the 0.32% to 0.38% to length of vesting period 0.45% 0.67% Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 1.14% 0.71% (b) australand Australand Performance Rights Plan The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders
at the 2007 Annual General Meeting (“AGM”). The number of shares outstanding under the Australand Performance Rights Plan as at the end of the year
is summarised below: 2011 2010 (’000) (’000)
At 1 January 3,913 2,725 Granted 1,857 1,940 Lapsed/Forfeited (759) (752)
At 31 December 5,011 3,913
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22 eMpLoYee beneFits (cont'd) (c) equity compensation benefits (cont'd) Share Plans of Subsidiaries (cont'd) (b) australand (cont'd) Australand Performance Rights Plan (cont'd) The fair value at grant date is independently determined using the Monte Carlo Simulation technique. This
technique involves stock prices being randomly simulated under risk neutral conditions and parameters in order to calculate the value of the performance rights at expiry. The simulation is repeated numerous times to produce distribution payoff amounts. The performance rights value is taken as the average of the payoff amounts calculated and discounted back to the valuation date. The fair value and assumptions are set out below:
Year of award 2011 2010
Fair value of performance rights and assumptions Weighted average value at measurement date A$2.48 A$1.79 Share price at grant date A$2.87 A$2.75 Expected price volatility of Australand’s stapled securities 35.0% 40.0% Expected dividend yield 8.0% 8.0% Risk-free discount rate 4.7% 4.6% Expected franking rate 0% 0% Australand and index correlation 50.0% 61.0%
Australand Tax Exempt Employee Security Plan The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be issued
by the company to employees for no cash consideration was approved by Australand shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights Plan) who have been continuously employed by Australand for a period of at least nine months as at the invitation date and are still employees as at the acquisition date (the date Australand acquires the securities) are eligible to participate in the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually for
no cash consideration. A three-year restriction period on selling, transferring or otherwise dealing with the securities applies,
unless the employee leaves Australand. under the plan, employees will receive the same benefits as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the weighted
average price at which Australand’s stapled securities is traded on the Australian Stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
During the year, 108,016 (2010: 110,410) securities were issued under the Australand Tax Exempt Employee
Security Plan year at the weighted average market price of A$2.90 (2010: A$2.76) per security.
Australand Employee Securities Ownership Plan During the financial year, there were 9,400 securities being issued by virtue of the exercise of options at an
exercise price of A$1.10 per security (2010: 144,250 securities at an exercise price of A$0.22 per security).
All outstanding awards under the Australand Option Scheme and the Australand Employees Securities Ownership Plan were exercised or lapsed in 2011. There are no further awards under those schemes and both the plans have been closed.
23 share capitaL the company 2011 2010 no. of shares no. of shares issued and fully paid, with no par value (‘000) (‘000)
At 1 January 4,262,492 4,247,993 Issue of shares pursuant to the: – Exercise of options 1,120 8,048 – Performance Share and Restricted Stock Plans 5,827 6,451
At 31 December, including treasury shares 4,269,439 4,262,492 Less: Treasury shares (25,209) –
At 31 December, excluding treasury shares 4,244,230 4,262,492
(a) The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of the Company. All shares (excluding treasury shares) rank equally with regards to the Company’s residual assets.
(b) At 31 December 2011, there were 9,000,244 (31/12/2010: 10,400,345) options under the CapitaLand Share Option Plan, a maximum of 18,538,108 (31/12/2010: 18,438,960) shares under the CapitaLand Performance Share Plan and 14,197,716 (31/12/2010: 14,219,986) shares under the CapitaLand Restricted Stock/Share Plan, details of which are disclosed in note 22(c).
(c) As at December 2011, the convertible bonds issued by the Company which remained outstanding are as follows:
principal amount Final Maturity Date conversion price convertible into $ million Year $
424.75 2016 6.01 70,673,876 new ordinary shares 1,000.00 2022 11.5218 86,791,994 new ordinary shares 1,050.00 2018 7.1468 146,918,900 new ordinary shares 1,200.00 2016 4.7247 253,984,379 new ordinary shares There has been no redemption or conversion by the bondholders of any of the above convertible bonds in
2011 and 2010. capital Management The Group’s policy is to build a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Group monitors the return on capital, which the Group defines as total shareholders’ equity, excluding non-controlling interests, and the level of dividends to ordinary shareholders.
The Group also monitors capital using a net debt equity ratio, which is defined as net borrowings divided by total equity (including non-controlling interests).
the group 31/12/2011 31/12/2010 $’000 $’000 restated
Bank borrowings and debt securities 12,190,639 10,358,043 Cash and cash equivalents (6,264,473) (7,19 0,064)
Net debt 5,926,166 3,16 7,979 Total equity 19,239,471 17,865,204
Net debt equity ratio 0.31 0.18
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23 share capitaL (cont'd) capital Management (cont'd) The Group seeks to strike a balance between the higher returns that might be possible with higher level of borrowings
and the liquidity and security afforded by a sound capital position.
In addition, the Company has a share purchase mandate as approved by its shareholders which allows the Company greater flexibility over its share capital structure with a view to improving, inter alia, its return on equity. The shares which are purchased are held as treasury shares which the Company may transfer for the purposes of or pursuant to its employee share-based incentive schemes so as to enable the Company to take advantage of tax deductions under the current taxation regime. The use of treasury shares in lieu of issuing new shares would also mitigate the dilution impact on existing shareholders.
Six of the Group’s subsidiaries (31/12/2010: Six) are required to maintain certain minimum base capital and financial resources, or shareholders’ funds as they are holders of Capital Markets Services licenses registered under the Monetary Authority of Singapore or the Securities Commission Malaysia to conduct the regulated activity of Real Estate Investment Trust management. These subsidiaries have complied with the applicable capital requirements throughout the year.
There were no changes in the Group’s approach to capital management during the year.
24 other reserves the group the company 31/12/2011 31/12/2010 1/1/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000 $’000 restated restated
Reserve for own shares (63,456) – – (63,456) – Capital reserve 445,666 453,116 435,483 383,490 383,490 Equity compensation reserve 109,815 101,033 94,224 39,980 37,862 Hedging reserve (45,531) 4,334 (37,682) – – Available-for-sale reserve 5,723 49,451 29,722 – – Foreign currency translation reserve (177,150) (364,245) (182,773) – –
275,067 243,689 338,974 360,014 421,352
Reserve for own shares comprises the purchase consideration for issued shares of the Company acquired and held in treasury.
The capital reserve comprises mainly the value of the option granted to bondholders to convert their convertible bonds into ordinary shares of the Company and share of associates’ and joint ventures’ capital reserve.
The equity compensation reserve comprises the cumulative value of employee services received for the issue of the options and shares under the share plans of the Company and its subsidiaries (note 22(c)).
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments related to hedged transactions that have not yet occurred.
The available-for-sale reserve comprises the cumulative net change in the fair value of available-for-sale investment until the investment is derecognised.
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign entities, as well as from the translation of foreign currency loans used to hedge or form part of the Group’s net investments in foreign entities.
25 other coMprehensive incoMe
2011 2010 before tax tax expense net of tax before tax tax expense net of tax the group $’000 $’000 $’000 $’000 $’000 $’000 restated restated restated
Exchange differences arising from translation of foreign operations and foreign currency loans, forming part of net investment in foreign operations 138,012 – 138,012 (344,729) – (344,729) Recognition of exchange differences to profit or loss 7,877 – 7,877 129,033 – 129,033 Change in fair value of available- for-sale investments (2,987) – (2,987) 34,218 (1,470) 32,748 Recognition of fair value gain in available-for-sale reserve to profit or loss (42,343) 1,482 (40,861) (13,018) – (13,018) Effective portion of change in fair value of cash flow hedges (75,048) – (75,048) 24,448 (3,647) 20,801 Recognition of fair value losses in hedging reserve to profit or loss – – – 12,873 – 12,873 Share of other comprehensive income of associates and joint ventures 87,637 – 87,637 15,756 – 15,756 Recognition of share of other comprehensive income of associates and joint ventures to profit or loss 14,175 – 14,175 6 – 6
127,323 1,482 128,805 (141,413) (5,117 ) (146,530)
26 revenue Revenue of the Group and of the Company is analysed as follows: the group the company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 restated
Trading of properties 1,860,909 2,200,195 – – Rental and related income 397,273 432,197 – – Fee income 454,669 421,866 66,107 66,061 Serviced residence rental and related income 293,236 318,234 – – Dividend income from subsidiaries – – 433,435 220,504 Others 13,482 10,900 – –
3,019,569 3,383,392 499,542 286,565
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27 proFit beFore taxation Profit before taxation includes the following:
the group the company 2011 2010 2011 2010 note $’000 $’000 $’000 $’000 restated
(a) other operating income Interest income from: – fixed deposits 35,491 30,530 127 925 – subsidiaries – – 88,773 106,609 – associates and joint ventures 31,389 43,353 – – – investee companies and others 14,551 9,403 – 2 – interest capitalised in development properties for sale 11(e) (474) (259) – –
80,957 83,027 88,900 107,536 Dividend income 1,428 3,612 – – Net fair value gain on derivative instruments – 19,652 – – Net fair value gains from investment properties 5 285,032 394,585 – – Gain on disposal/redemption of available-for-sale financial assets 21,390 12,976 – – Gain from change of ownership interest in subsidiaries, associates and joint ventures 218,258 240,809# 57,963 90,039 Foreign exchange gain – – 7 5,779 Gain on disposal of investment properties 19,411 13,845 – – Gain on disposal of property, plant and equipment 969 12,077 72 12 Gain from bargain purchase arising from an increased stake in subsidiaries 26 11,580 – – Write back of provision for foreseeable losses 21(a) 2,700 – – – Write back of doubtful receivables – – – 53,596 Write back of impairment of subsidiaries – – – 49,432 Write back of impairment of joint ventures 8(a)(i) – 9,413 – – Others 83,533 90,373 13,683 14,185
713,704 891,949 160,625 320,579
# Includes re-measurement gain attributable to recognising investment retained in former subsidiaries at their respective fair values of $88.1 million.
27 proFit beFore taxation (cont'd)
the group the company 2011 2010 2011 2010 note $’000 $’000 $’000 $’000
(b) staff costs Wages and salaries 437,041 385,598 39,433 29,953 Contributions to defined contribution plans 46,262 41,669 2,398 1,892 Share-based expenses – equity-settled 31,766 34,298 6,932 7,786 – cash-settled 2,577 4,830 166 533 Increase in liability for short term accumulating compensated absences 1,350 1,485 188 511 Staff benefits, training/ development costs and others 73,253 63,222 3,835 3,257
592,249 531,102 52,952 43,932 Less: Staff costs capitalised in development properties for sale 11(e) (61,404) (52,119 ) – –
530,845 478,983 52,952 43,932 Recognised in: Cost of sales (c)(i) 233,479 213,446 – – Administrative expenses (c)(ii) 297,366 265,537 52,952 43,932
530,845 478,983 52,952 43,932 (c)(i) cost of sales include: Staff costs (b) 233,479 213,446 – – Write down/Provision for foreseeable losses on development properties for sale 39,155 5,000 – – Operating lease expenses 88,191 51,419 – – Operating expenses arising from investment properties that generated rental income 94,962 105,863 – – Depreciation of property, plant and equipment 3 19 – – – Amortisation of intangible assets 242 484 – –
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27 proFit beFore taxation (cont'd) the group the company 2011 2010 2011 2010 note $’000 $’000 $’000 $’000
(c)(ii) administrative expenses include: Staff costs (b) 297,366 265,537 52,952 43,932 (Write back of)/Allowance for doubtful receivables (3,021) 5,281 – – Amortisation of intangible assets 1,359 1,143 – – Auditors’ remuneration: – auditors of the Company 1,961 1,808 208 170 – other auditors 4,043 4,145 – – Non-audit fees: – auditors of the Company 1,097 159 2 10 – other auditors 282 738 – – Depreciation of property, plant and equipment 3 38,989 57,998 3,598 4,652 Operating lease expenses 36,672 36,793 4,732 4,573 (c)(iii) other operating expenses include: Allowance for doubtful receivables 3,427 1,100 130,248 – Impairment of available-for-sale financial assets 1,329 10,936 – – Foreign exchange loss 33,240 27,536 – – Impairment and write off of property, plant and equipment 729 23,891 5 94 Provision for foreseeable losses 21(a) – 25,848 – – Fidelity losses arising from financial irregularities – 14,000 – – Impairment of: – subsidiaries 6(a)(iii) – – 16,931 – – associates 7(a)(i) 3,437 4,000 – –
27 proFit beFore taxation (cont'd) the group the company 2011 2010 2011 2010 note $’000 $’000 $’000 $’000
(d) Finance costs Interest costs paid and payable: – to subsidiaries – – – 4,081 – on bank loans and overdrafts 240,385 212,240 – – – on debt securities 82,803 81,215 – – – to non-controlling interests 5,423 5,610 – – Convertible bonds: – interest expense 105,673 105,732 105,673 105,732 – amortisation of bond discount 63,584 63,584 63,584 63,584 – accretion of bond premium 10,479 10,498 10,479 10,498 Derivative financial instruments 29,957 1,759 – – Others 61,769 59,936 1,311 –
Total borrowing costs 600,073 540,574 181,047 183,895 Less: Borrowing costs capitalised in: – property, plant and equipment 3(c) (3,093) (4,167) – – – investment properties 5(d) (23,470) (4,903) – – – development properties for sale 11(e) (100,725) (83,321) – –
(127,288) (92,391) – –
472,785 448,183 181,047 183,895
28 taxation the group the company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 restated
current tax expense – Based on current year’s results 167,520 273,210 – – – (Over)/under provision in respect of prior years (19,252) (51,310) – 424 – Group relief (4,703) (1,745) (778) –
143,565 220,155 (778) 424 Deferred tax expense – Origination and reversal of temporary differences 47,652 65,065 (10,558) (8,484) – Over provision in respect of prior years (333) (1,120 ) – –
47,319 63,945 (10,558) (8,484)
total 190,884 284,100 (11,336) (8,060)
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28 taxation (cont'd) reconciliation of effective tax rate
the group 2011 2010 $’000 $’000 restated
Profit before taxation 1,613,804 2,136,299 Less: Share of results of associates and joint ventures (876,646) (959,795)
Profit before share of results of associates, joint ventures and taxation 737,158 1,176,504 Income tax using Singapore tax rate of 17% (2010: 17%) 125,317 200,006 Adjustments: Expenses not deductible for tax purposes 110,295 136,545 Income not subject to tax (133,473) (148,242) Effect of unrecognised tax losses and other deductible temporary differences 7,531 13,477 Effect of different tax rates in foreign jurisdictions 57,520 72,186 Effect of taxable distributions from associates 34,881 29,866 Over provision in respect of prior years (19,585) (52,430) Group relief (4,703) (1,745) Withholding taxes 11,083 18,859 Others 2,018 15,578
190,884 284,100 the company 2011 2010 $’000 $’000
Profit before taxation 239,885 343,910 Income tax using Singapore tax rate of 17% (2010: 17%) 40,780 58,465 Adjustments: Expenses not deductible for tax purposes 33,051 6,185 Income not subject to tax (83,550) (72,496) Effect of other deductible temporary differences (1,373) (460) under provision in respect of prior years – 424 Group relief (778) – Others 534 (178)
(11,336) (8,060)
29 earnings per share (a) basic earnings per share the group 2011 2010 $’000 $’000 restated
Basic earnings per share is based on: Net profit attributable to owners of the Company 1,057,311 1,425,678 2011 2010 number of shares (‘000)
Weighted average number of ordinary shares in issue during the year 4,261,359 4,258,925
(b) Diluted earnings per share In calculating diluted earnings per share, the net profit attributable to owners of the Company and weighted
average number of ordinary shares in issue during the year are adjusted for the effects of all dilutive potential ordinary shares:
the group 2011 2010 $’000 $’000 restated
Net profit attributable to owners of the Company 1,057,311 1,425,678 Profit impact of conversion of the potential dilutive shares 78,097 77,354
Adjusted net profit attributable to owners of the Company 1,135,408 1,503,032 2011 2010 number of shares (‘000)
Weighted average number of ordinary shares used in the calculation of basic earnings per share 4,261,359 4,258,925 Adjustments for potential dilutive shares under: – CapitaLand Share Option Plan 1,408 3,191 – CapitaLand Performance Share Plan 18,538 18,439 – CapitaLand Restricted Stock/Share Plan 14,198 14,285 – convertible bonds 324,596 324,508
358,740 360,423
Weighted average number of ordinary shares used in the calculation of diluted earnings per share 4,620,099 4,619,348
30 DiviDenDs The Board of Directors of the Company has proposed an ordinary dividend of 6.0 cents per share and a special
dividend of 2.0 cents per share in respect of the financial year ended 31 December 2011. This would amount to a payout of approximately $339.5 million based on the number of issued shares (excluding 25,209,000 treasury shares) as at 31 December 2011. The dividends are subject to shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For the financial year ended 31 December 2010, an ordinary dividend of 6.0 cents per share was approved at the Annual General Meeting held on 25 April 2011. The said dividends of $256.2 million were paid in May 2011.
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31 notes to the consoLiDateD stateMent oF cash FLows (a) acquisition of subsidiaries The list of significant subsidiaries acquired during the year is as follows:
name of subsidiary Date acquired effective interest acquired
Abbey Road Limited February 2011 45% SNC Costes K June 2011 100% The list of significant subsidiaries acquired in 2010 is as follows:
name of subsidiary Date acquired effective interest acquired
CCH Developments Limited (formerly known as Orient Overseas Developments Limited) February 2010 100% Growing State Holdings Limited March 2010 65.5% Hemliner Pte Ltd October 2010 100% (b) effects of acquisitions The cash flows and net assets of subsidiaries acquired are provided below: recognised values 2011 2010 the group note $’000 $’000
Property, plant and equipment 218,835 381,179 Investment properties 5 428,255 1,263,170 Deferred tax assets – 25,489 Other non-current assets 835 19,083 Development properties for sale 10,682 2,344,857 Cash and cash equivalents 84,381 438,478 Other current assets 10,792 20,539 Current liabilities (23,615) (195,107) Long-term bank borrowings – (158,811) Shareholder’s loan (33,666) (1,466,912) Deferred tax liabilities – (603,421) Other non-current liabilities (789) – Non-controlling interests (146,805) (60,116 )
548,905 2,008,428 Amounts previously accounted for as associates, joint ventures and other financial assets (33,582) (5,370)
Net assets acquired 515,323 2,003,058 Gain from bargain purchase (26) (11,580) Assumption of shareholder’s loan 33,666 1,466,912
Total purchase consideration 548,963 3,458,390 Less: Deferred payment and other adjustments (16,623) 15,043 Deposits paid in prior year (28,941) – Cash of subsidiaries acquired (84,381) (438,478)
cash outflow on acquisition of subsidiaries 419,018 3,034,955
31 notes to the consoLiDateD stateMent oF cash FLows (cont'd) (c) Disposals of subsidiaries The list of significant subsidiaries disposed during the year is as follows:
name of subsidiary Date Disposed effective interest Disposed
BR Properties Pte Ltd May 2011 100% Hemliner Pte Ltd* July 2011 100% Shanghai CapitaLand Xin Chuang Real Estate Development Co., Ltd. December 2011 100% * This subsidiary was sold to Ascott Serviced Residence (China) Fund in which the Group has an effective interest of 36.1%
as at end-2011.
The disposed subsidiaries previously contributed net profit of $6.5 million from 1 January 2011 to the date of disposal.
The list of significant subsidiaries disposed in 2010 is as follows:
name of subsidiary Date Disposed effective interest Disposed
The Ascott Group Europe NV* October 2010 100% Citadines Holborn CI Limited* October 2010 100% Senning Property Ltd December 2010 61.2% * These subsidiaries were sold to Ascott Residence Trust in which the Group has an effective interest of 47.8% as at end-2010.
The disposed subsidiaries previously contributed net profit of $3.1 million from 1 January 2010 to the date of disposal.
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(d) effects of disposals The cash flows and net assets of subsidiaries disposed are provided below:
the group 2011 2010 note $’000 $’000
Property, plant and equipment 232,446 867,558 Investment properties 5 239,052 1,052,291 Deferred tax assets – 12,077 Other non-current assets – 65,067 Development properties for sale 71,683 124,649 Other current assets 56,157 78,458 Current liabilities (151,009) (449,246) Long-term bank borrowings (109,591) (395,166) Deferred tax liabilities (11,568) (209,953) Non-controlling interests (2,800) (62,268)
Net assets 324,370 1,083,467 Less: Equity interests retained as associates – (321,027)
Net assets disposed 324,370 762,440 Realisation of reserves 4,864 109,834 Deferred income 20,410 64,896 Gain on disposal of subsidiaries 195,433 210,156
Sale consideration 545,077 1,147,326 Repayment of shareholders’ loan 234,748 24,080 Deferred payment – (424,210) Deferred sale consideration received in relation to prior year’s disposal of subsidiaries 417,476 909 Cash of subsidiaries disposed (54,926) (55,897)
cash inflow on disposal of subsidiaries 1,142,375 692,208
32 business coMbinations There was no significant business combination undertaken by the Group in 2011. In 2010, the Group had the following
business combinations:
(a) acquisition of orient overseas Developments Limited (now known as cch Developments Limited) On 10 February 2010, the Group acquired 100% of voting equity interest of CCH Developments Limited
(“CCHDL”). CCHDL is a property investment holding company and through its subsidiaries, conducts property development and investment with a primary focus on opportunities in the Greater Shanghai area and Tianjin, China. Its projects include residential, commercial, retail and hotel properties.
The acquisition allowed the Group to further strengthen its presence in China. CCHDL contributed revenue of $129.5 million and net profit of $127.3 million to the Group’s results for the period
from 10 February 2010 to 31 December 2010. If the acquisition had occurred on 1 January 2010, management estimates that the contribution from CCHDL
in terms of revenue and profit for the year ended 31 December 2010 would have been $130.2 million and $125.0 million respectively. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2010.
32 business coMbinations (cont'd) (a) acquisition of orient overseas Developments Limited (now known as cch Developments Limited) (cont'd) Details of the consideration paid, the assets acquired and liabilities assumed, the non-controlling interest recognised
and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(i) Purchase consideration The consideration transferred for the acquisition was $3,110.9 million, which included the assignment of and
transfer of a shareholder’s loan due from CCHDL to its previous shareholder. It was settled in cash.
No contingent consideration or indemnification asset was recognised at the acquisition date. Both the Group and the acquired entities do not have a relationship before this acquisition. Therefore, there was no settlement of pre-existing relationship.
No goodwill was recognised as the fair value of the identifiable net assets of the acquired group was equivalent to the purchase consideration transferred.
(ii) Effects of cash flows of the Group 2010 $’000
Cash consideration paid 1,643,986 Assumption of shareholder’s loan 1,466,912
Total purchase consideration 3,110 ,898 Less: Cash and cash equivalents in subsidiaries acquired (356,242)
net cash outflow on acquisition 2,754,656
(iii) Identifiable assets acquired and liabilities assumed
2010 $’000
Property, plant and equipment 88,974 Investment properties under development 1,098,791 Deferred tax assets 25,490 Other non-current assets 13,863 Development properties for sale 2,344,857 Other current assets 11,935 Cash 356,242 Current liabilities (49,787) Interest bearing loans (123,829) Shareholder’s loan (1,466,912) Deferred tax liabilities (600,429)
Total identifiable net assets 1,699,195 Add: Assumption of shareholder’s loan 1,466,912 Less: Non–controlling interest at proportionate share of the recognised amount of the identified net assets, at acquisition date (55,209)
total purchase consideration 3,110 ,898
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32 business coMbinations (cont'd) (a) acquisition of orient overseas Developments Limited (cont'd) (iv) Acquisition-related costs Acquisition-related costs of $4.2 million related to stamp duties, legal and due diligence fees were included
in administrative expenses in the consolidated income statement, and in the operating cash flows in the consolidated statement of cash flows.
(v) Acquired receivables Loan and other receivables mainly comprised other receivables. The carrying amount and gross contractual
amount of other receivables was $11.6 million. The carrying amount of other receivables approximated its fair value as the contractual maturity period was within twelve months from the acquisition date. None of the amounts was expected to be uncollectible.
(b) acquisition of storhub On 31 July 2010, a wholly-owned subsidiary, CapitaLand Commercial Limited (“CCL”), together with Hersing
Corporation Ltd, formed a group of companies to acquire four Storhub properties to provide self storage facilities. CCL has a 62% interest while Hersing has a 38% interest in these companies.
Four properties, together with the management business and management assets were acquired for $63.4 million. Acquisition-related costs of $0.9 million relating to external legal fees and due diligence cost were included in
administrative expenses in the consolidated income statement, and in operating cash flows in the consolidated statement of cash flows.
From the date of acquisition to 31 December 2010, the Storhub group of companies contributed revenue of
$4.2 million and net profit after tax of $1.6 million to the Group.
(c) acquisition of non-controlling interests in eurimeg sa On 3 August 2010, Oriville SAS, an indirect wholly-owned subsidiary, acquired an additional 39.24% interest
in Eurimeg SA for $24.8 million, increasing its ownership from 60.76% to 100%. The carrying amount of Eurimeg SA’s net assets in the Group’s financial statements on the date of acquisition
was $59.1 million. From the date of the acquisition to 31 December 2010, the revenue and net profit after tax contributed by the
additional interest acquired were not significant.
33 FinanciaL risK ManageMent (a) Financial risk management objectives and policies The Group and the Company are exposed to market risk (including interest rate, foreign currency and price
risks), credit risk and liquidity risk arising from its diversified business. The Group’s risk management approach seeks to minimise the potential material adverse effects from these exposures. The Group uses financial instruments such as currency forwards, interest rate swaps and caps as well as foreign currency borrowings to hedge certain financial risk exposures.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Board has established the Risk Committee to strengthen its risk management processes and framework. The Risk Committee is assisted by an independent unit called the Risk Assessment Group (“RAG”). RAG generates a comprehensive portfolio risk report to assist the committee. This quarterly report measures a spectrum of risks, including property market risks, construction risks, interest rate risks, refinancing risks and currency risks.
33 FinanciaL risK ManageMent (cont'd) (b) Market risk Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity
prices will have on the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
(i) Interest rate risk The Group’s exposure to market risk for changes in interest rate environment relates mainly to its investment
in financial products and debt obligations.
The investments in financial products are short term in nature and they are not held for trading or speculative purposes. The financial products comprise fixed deposits or short term commercial papers which yield better returns than cash at bank.
The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate
borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve certain level of protection against rate hikes. The Group also uses hedging instruments such as interest rate swaps and caps to minimise its exposure to interest rate volatility. The Group classifies these interest rate swaps and caps as cash flow hedges. In addition, the Group also uses other derivative instruments such as callable swaps to manage the cost of funding.
The fair value loss of swaps as at 31 December 2011 was $111.7 million (2010: $5.2 million).
Sensitivity analysis For interest rate derivative instruments used for hedging and other variable rate financial liabilities, it is
estimated that an increase of 100 basis point in interest rate at the reporting date would lead to a reduction in the Group’s profit before tax (and revenue reserves) by approximately $37.8 million (2010: $28.8 million). A decrease in 100 basis point in interest rate would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant, and has not taken into account the effects of qualifying borrowing costs allowed for capitalisation, the associated tax effects and share of non-controlling interests.
(ii) Foreign currency risk The Group operates internationally and is exposed to various currencies, mainly Australian Dollars, Chinese
Renminbi, Euros, Hong Kong Dollars, Japanese Yen, Sterling Pounds and uS Dollars.
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which its property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.
The Group uses forward exchange contracts to hedge its foreign currency risk, where feasible. It generally enters into forward exchange contracts with maturities ranging between 3 months and 1 year which are rolled over at market rates at maturity. The Group also enters into cross currency swaps to hedge the foreign exchange risk of its loans denominated in foreign currency.
The net fair value gain of the forward exchange and cross currency swaps contracts as at 31 December 2011 was $7.9 million (2010: $8.0 million).
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.
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33 FinanciaL risK ManageMent (cont'd) (b) Market risk (cont'd) (ii) Foreign currency risk (cont'd) In relation to its investments in foreign subsidiaries whose net assets are exposed to currency translation
risks and which are held for long term investment purposes, the differences arising from such translation are recorded under the foreign currency translation reserve. These translation differences are reviewed and monitored on a regular basis.
The Group’s and the Company’s exposure to foreign currencies as at 31 December 2011 and 31 December 2010 are as follows:
total us australian chinese hong Kong Japanese Malaysian Foreign Dollars Dollars renminbi Dollars Yen euro ringgit others# currencies the group $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
31/12/2011 Other financial assets 4,344 – – 3,205 321,331 – – – 328,880 Trade and other receivables 97,627 272,728 217,583 42,344 67,502 36,514 7,998 159,057 901,353 Cash and cash equivalents 273,863 144,473 1,232,612 8,186 18,917 15,150 62,307 43,442 1,798,950 Borrowings (453,519) (2,643,580) (387,139) (212,635) (562,176) (67,721) (88,556) (118,478) (4,533,804) Trade and other payables (202,556) (300,086) (574,765) (17,160) (16,897) (44,242) (27,104) (54,431) (1,237,241)
Gross currency exposure (280,241) (2,526,465) 488,291 (176,060) (171,323) (60,299) (45,355) 29,590 (2,741,862) Less: Net financial liabilities/ (assets) denominated in the respective entities’ functional currencies 44,034 2,564,899 (289,809) 146,913 43,124 61,723 84,518 (34,463) 2,620,939 Cross currency swaps/ foreign exchange forward contracts 174,306 (5,463) – – (53,914) – – – 114,929 Less: Available-for-sale financial assets (4,344) – – (3,205) (2,465) – – – (10,014)
Net currency exposure (66,245) 32,971 198,482 (32,352) (184,578) 1,424 39,163 (4,873) (16,008)
31/12/2010 (restated)
Other financial assets 22,089 – – 27,093 148,578 30 – – 197,790 Trade and other receivables 606,316 298,860 167,475 15,412 70,518 30,725 42,935 65,592 1,297,833 Cash and cash equivalents 680,484 76,291 666,390 3,867 24,769 18,705 235,314 33,834 1,739,654 Borrowings (756,830) (2,452,043) (465,498) (230,707) (258,128) – (8,835) (126,233) (4,298,274) Trade and other payables (251,429) (293,367) (537,415) (17,274) (17,030) (45,246) (17,694) (34,758) (1,214,213)
Gross currency exposure 300,630 (2,370,259) (169,048) (201,609) (31,293) 4,214 251,720 (61,565) (2,277,210) Less: Net financial liabilities/ (assets) denominated in the respective entities’ functional currencies 216,184 2,374,620 131,080 229,622 218,907 (99) (31,941) 93,120 3,231,493 Foreign exchange forward contracts (47,596) – – – (50,803) – – – (98,399) Less: Available-for-sale financial assets (4,371) – – (27,093) (148,578) – – – (180,042)
Net currency exposure 464,847 4,361 (37,968) 920 (11,767) 4,115 219,779 31,555 675,842
# Others include mainly Sterling Pound, Thai Baht, Indian Rupee and Vietnamese Dong.
33 FinanciaL risK ManageMent (cont'd) (b) Market risk (cont'd) (ii) Foreign currency risk (cont'd) total Foreign us Dollars currencies the company $’000 $’000
2011 Cash and cash equivalents 55 55 Trade and other receivables 4 4
Currency exposure 59 59 2010 Cash and cash equivalents 40 40 Trade and other payables 36 36
Currency exposure 76 76
Sensitivity analysis It is estimated that a five percentage point strengthening in foreign currencies against the Singapore Dollar
would decrease the Group’s profit before tax by approximately $0.8 million (2010: increase by $33.8 million) and increase the Group’s other components of equity by approximately $0.5 million (2010: $9.0 million) respectively. A five percentage point weakening in foreign currencies against the Singapore Dollar would have an equal but opposite effect. The Group’s outstanding forward exchange contracts have been included in this calculation. The analysis assumed that all other variables, in particular interest rates, remain constant and does not take into account the translation related risk, associated tax effects and share of non-controlling interests.
There was no significant exposure to foreign currencies for the Company as at 31 December 2011 and 31 December 2010.
(iii) Equity price risk The Group has available-for-sale investments in equity securities and is exposed to price risk. The securities
are listed in Japan.
Sensitivity analysis If prices for equity securities listed in Japan change by 5% with all other variables including tax rate being
held constant, the impact on available-for-sale reserve will be as follows:
31/12/2011 31/12/2010 5% increase 5% decrease 5% increase 5% decrease the group $’000 $’000 $’000 $’000
Available-for-sale reserve 123 (123) 1,737 (1,737)
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33 FinanciaL risK ManageMent (cont'd) (c) credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. For trade receivables, the Group has guidelines governing the process of granting credit as a service or product provider in its respective segments of business. Trade and other receivables relate mainly to the Group’s customers who bought its residential units and tenants from its commercial buildings, shopping malls and serviced residences. Investments and financial transactions are restricted to counterparties that meet the appropriate credit criteria and are of high credit standing.
The principal risk to which the Group and the Company is exposed in respect of financial guarantee contracts
is credit risk in connection with the guarantee contracts it has issued. To mitigate the risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of. Guarantees are only given for its subsidiaries and related parties. The maximum exposure to credit risk in respect of these financial guarantees at the balance sheet date is disclosed in note 35.
The Group has a diversified portfolio of businesses and as at balance sheet date, there were no significant
concentration of credit risk with any entity. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet, including derivative financial instruments as well as any irrevocable loan undertaking to associates and joint ventures.
(d) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group
actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient level of cash or cash convertible investments to meet its working capital requirement. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group will constantly raise committed funding from both capital markets and financial institutions and prudently balance its portfolio with some short term funding so as to achieve overall cost effectiveness.
The following are the expected contractual undiscounted cash flows of financial liabilities, including interest
payments and excluding the impact of netting agreements: <----------------------------- contractual cash flows ----------------------------->
carrying not later between after amount total than 1 year 1 and 5 years 5 years the group $’000 $’000 $’000 $’000 $’000
31/12/2011 Financial liabilities, at amortised cost Bank borrowings 6,531,801 7,649,276 665,250 6,866,220 117,806 Debt securities 5,658,838 7,104,747 570,780 2,821,646 3,712,321 Trade and other payables# 2,258,817 2,301,579 1,837,547 411,153 52,879
14,449,456 17,055,602 3,073,577 10,099,019 3,883,006 Derivative financial liabilities, at fair value 135,522 60,265 40,151 20,153 (39)
14,584,978 17,115,867 3,113,728 10,119,172 3,882,967 # Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
33 FinanciaL risK ManageMent (cont'd) (d) Liquidity risk (cont'd)
<----------------------------- contractual cash flows ----------------------------->
carrying not later between after amount total than 1 year 1 and 5 years 5 years the group $’000 $’000 $’000 $’000 $’000
31/12/2010 (restated) Financial liabilities, at amortised cost Bank borrowings 4,650,665 5,301,788 1,040,837 3,906,332 354,619 Debt securities 5,707,378 7,236,635 1,043,486 999,658 5,193,491 Trade and other payables# 1,851,754 1,873,672 1,577,773 293,176 2,723
12,209,797 14,412,095 3,662,096 5,199,166 5,550,833 Derivative financial liabilities, at fair value 9,983 17,595 12,049 5,175 371
12,219,780 14,429,690 3,674,145 5,204,341 5,551,204
<----------------------------- contractual cash flows ----------------------------->
carrying not later between after amount total than 1 year 1 and 5 years 5 years the company $’000 $’000 $’000 $’000 $’000
31/12/2011 Financial liabilities, at amortised cost Debt securities 3,432,956 4,496,201 81,834 2,047,879 2,366,488 Trade and other payables# 50,613 50,613 50,613 – –
3,483,569 4,546,814 132,447 2,047,879 2,366,488
31/12/2010 Financial liabilities, at amortised cost Debt securities 3,379,883 4,601,875 81,576 423,129 4,097,17 0 Trade and other payables# 172,440 172,440 172,440 – –
3,552,323 4,774,315 254,016 423,129 4,097,170 # Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
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33 FinanciaL risK ManageMent (cont'd) (d) Liquidity risk (cont'd) The following table indicates the periods in which the cash flows associated with derivatives that are cash flow
hedges are expected to occur and affect the income statement: <----------------------------- contractual cash flows ----------------------------->
carrying not later between after amount total than 1 year 1 and 5 years 5 years the group $’000 $’000 $’000 $’000 $’000
31/12/2011 Interest rate swaps – (liabilities)/assets (69,243) (31,499) (15,320) (16,753) 574 Forward start interest rate swaps – liabilities (9,772) (3,453) (813) (2,105 ) (535) Forward exchange contracts – liabilities (5,242) (5,242) (5,242) – –
(84,257) (40,194 ) (21,375) (18,858) 39
31/12/2010 Interest rate swaps – liabilities (10,441) (19,031) (10,311) (7,846) (874) Forward start interest rate swaps – assets/(liabilities) 6,491 (484) (3,218) 2,231 503 Forward exchange contracts – assets 291 291 291 – –
(3,659) (19,224) (13,238) (5,615) (371)
(e) Fair values The following methods and assumptions are used to estimate the fair values of the following significant classes
of financial instruments:
(i) Derivatives The fair value of derivative financial instruments is based on their market prices or brokers’ quotes.
(ii) Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted using the market rate of interest at the reporting date. In respect of the liability component of convertible bonds, the fair value at initial recognition is determined using a market rate of interest of similar liabilities that do not have a conversion option.
(iii) Other financial assets and liabilities The fair value of quoted securities is their quoted bid price at the balance sheet date. The carrying amounts of
financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalent and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values.
Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market-related rate for a similar instrument at the balance sheet.
33 FinanciaL risK ManageMent (cont'd) (e) Fair values (cont'd) (iv) Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method as at 31 December
2011. The different levels have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 total the group $’000 $’000 $’000 $’000
31/12/2011 Available-for-sale financial assets 2,465 195,000 322,258 519,723 Derivative financial assets – 31,720 – 31,720
2,465 226,720 322,258 551,443 Derivative financial liabilities – (135,522) – (135,522)
2,465 91,198 322,258 415,921 31/12/2010 Available-for-sale financial assets 34,741 195,000 141,144 370,885 Derivative financial assets – 12,823 – 12,823
34,741 207,823 141,144 383,708 Derivative financial liabilities – (9,983) – (9,983)
34,741 197,840 141,144 373,725
The movements of financial assets classified under Level 3 are presented as follows:
the group 2011 2010 note $’000 $’000
Balance as at 1 January 141,144 112,201 Additions 298,088 12,471 Impairments recognised in income statement (1,329) (5,752) Amount set off against provisions 21(a)(i) (124,165) – Fair value gain recognised in available-for-sale financial assets 97 22,224 Disposal (24,012) – Translations differences 32,435 –
Balance as at 31 December 322,258 141,14 4
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33 FinanciaL risK ManageMent (cont'd) (e) Fair values (cont'd) (v) Accounting classifications and fair values The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance
sheets, are as follows:
other financial liabilities Fair value – within the total hedging Loans and available- scope of carrying Fair instruments receivables for-sale Frs 39 amount value the group note $’000 $’000 $’000 $’000 $’000 $’000
31/12/2011 Trade and other receivables 12 – 1,701,523 – – 1,701,523 1,701,523 Cash and cash equivalents 15 – 6,264,473 – – 6,264,473 6,264,473 Other non-current assets 31,720 363,264 349,343 – 744,327 744,327 Other current assets 10(b) – – 195,000 – 195,000 195,000
31,720 8,329,260 544,343 – 8,905,323 8,905,323 Trade and other payables# – – – 2,258,817 2,258,817 2,258,817 Bank borrowings 18 – – – 6,5 31,801 6,531,801 6,531,801 Debt securities 19 – – – 5,658,838 5,658,838 5,608,008 Derivative financial liabilities 135,522 – – – 135,522 135,522
135,522 – – 14,449,456 14,584,978 14,534,148 31/12/2010 (restated) Trade and other receivables 12 – 2,010,729 – – 2,010,729 2,010,729 Cash and cash equivalents 15 – 7,190,064 – – 7,190,064 7,190,064 Other non-current assets 4,814 100,897 202,494 – 308,205 308,205 Other current assets 10(b) 8,009 – 195,000 – 203,009 203,009
12,823 9,301,690 397,494 – 9,712,007 9,712,007 Trade and other payables# – – – 1,8 51,754 1,851,754 1,851,754 Bank borrowings 18 – – – 4,650,665 4,650,665 4,650,665 Debt securities 19 – – – 5,707,378 5,707,378 6,006,225 Derivative financial liabilities 9,983 – – – 9,983 9,983
9,983 – – 12,209,797 12,219,780 12,518,627
# Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
33 FinanciaL risK ManageMent (cont'd) (e) Fair values (cont'd) (v) Accounting classifications and fair values (cont'd)
other financial liabilities within Loans and the scope total receivables of Frs 39 carrying amount Fair value the company note $’000 $’000 $’000 $’000
31/12/2011 Trade and other receivables 12 2,588,723 – 2,588,723 2,588,723 Cash and cash equivalents 15 326,539 – 326,539 326,539
2,915,262 – 2,915,262 2,915,262 Trade and other payables# – 50,613 50,613 50,613 Debt securities 19 – 3,432,956 3,432,956 3,498,891
– 3,483,569 3,483,569 3,549,504 31/12/2010 Trade and other receivables 12 1,163,355 – 1,16 3,355 1,163,355 Cash and cash equivalents 15 53,954 – 53,954 53,954
1,217,309 – 1,217,309 1,217,309 Trade and other payables# – 172,440 172,440 172,440 Debt securities 19 – 3,379,883 3,379,883 3,674,251
– 3,552,323 3,552,323 3,846,691
# Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
34 coMMitMents As at the balance sheet date, the Group and the Company had the following commitments: (a) operating lease The Group leases a number of offices, motor vehicles, office equipments and serviced apartments under operating
leases. The leases have tenure ranging from one to twenty years, with an option to renew the lease after that date. Lease payments are usually revised at each renewal date to reflect the market rate. Future minimum lease payments for the Group and the Company on non-cancellable operating leases are as follows:
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
Lease payments payable: Not later than 1 year 114,475 108,090 3,151 4,850 Between 1 and 5 years 280,770 303,705 1,353 2,967 After 5 years 94,490 148,819 33 133
489,735 560,614 4,537 7,950
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34 coMMitMents (cont'd) (b) commitments the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
Commitments in respect of: – capital expenditure contracted but not provided for in the financial statements 10,132 3,385 768 193 – development expenditure contracted but not provided for in the financial statements 1,774,778 1,156,995 – – – capital contribution/acquisition of associates, joint ventures and investee companies 1,094,668 1,070,242 – – – purchase of lands/properties contracted but not provided for in the financial statements 1,148,353 1,505,318 – – – shareholders’ loan committed to associates, joint ventures and investee companies 1,096,462 8,360 – –
5,124,393 3,744,300 768 193
(c) As at the balance sheet date, the notional principal values of financial instruments are as follows: the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
Interest rate swaps 2,822,340 2,405,031 – – Forward start interest rate swaps 260,142 863,158 – – Forward foreign exchange contracts 686,536 394,976 – – Cross currency swaps 211,538 – – –
3,980,556 3,663,165 – –
(d) The maturity dates of these financial instruments are: the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
Not later than 1 year 1,648,968 1,344,967 – – Between 1 and 5 years 1,690,815 1,683,523 – – After 5 years 640,773 634,675 – –
3,980,556 3,663,165 – –
35 FinanciaL guarantee contracts There are no terms and conditions attached to the financial guarantee contracts that would have a material effect on
the amount, timing and uncertainty of the Group’s and the Company’s future cash flows. The Group and the Company issue guarantees only for their subsidiaries and related parties.
the group the company 31/12/2011 31/12/2010 31/12/2011 31/12/2010 $’000 $’000 $’000 $’000
(a) Guarantees given to banks to secure banking facilities provided to: – subsidiaries – – 2,644,542 2,935,350 – associates 51,313 36,286 – – – joint ventures 10,552 15,043 – 105 – investee company 104,124 106,738 – –
165,989 158,067 2,644,542 2,935,455
(b) undertakings by the Group and the Company:
(i) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of term loan and revolving construction facilities amounting to $1,486.1 million (31/12/2010: $1,486.1 million) and bankers’ guarantee facility amounting to $133.9 million (31/12/2010: $133.9 million) granted to an associate. As at 31 December 2011, the total amount outstanding under the facilities was $1,286.1 million (31/12/2010: $1,241.1 million).
(ii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of term loan and revolving construction facilities amounting to $105.0 million (31/12/2010: $214.1 million) and bankers’ guarantee facility amounting to $42.0 million (31/12/2010: $42.0 million) granted to a joint venture. As at 31 December 2011, the amount outstanding under the facilities was $105.0 million (31/12/2010: $176.1 million).
(iii) A subsidiary of the Group has provided several undertakings on cost overrun, interest shortfall, security margin and project completion on a joint and several basis, in respect of a $890.0 million term loan facility granted to a joint venture during the year. As at 31 December 2011, the amount outstanding under the term loan facility was $440.0 million.
(iv) A subsidiary of the Group has provided an undertaking on security margin on a joint and several basis, in respect of term loan and revolving loan facilities amounting to $1,618 million granted to a joint venture during the year. As at 31 December 2011, the amount outstanding under the facilities was $1,618 million.
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35 FinanciaL guarantee contracts (cont'd) (b) undertakings by the Group and the Company (cont'd): (v) Certain subsidiaries of the Group in China, whose principal activities are the trading of development
properties, would in the ordinary course of business act as guarantors for the bank loans taken by the buyers to finance the purchase of residential properties developed by these subsidiaries. As at 31 December 2011, the outstanding notional amount of the guarantees amounted to $64.9 million (31/12/2010: $61.2 million).
(vi) In 2010, the Company provided several undertakings on cost overrun, interest shortfall, completion and annualised gross rental, on a joint or several basis, in respect of term loan and revolving credit facilities amounting to $1,490.9 million, granted to a joint venture. The undertakings were discharged during the year.
36 contingencies CapitaLand Limited previously held an effective 20% interest in the proposed Macao Studio City (“MSC”) project
through its minority holding in East Asia Satellite Television (Holdings) Limited (“East”), a joint venture company with eSun Holdings Limited (“eSun”). The MSC project is held by East and New Cotai LLC (“New Cotai”) in the proportions of 60% and 40% respectively, through Cyber One Agents Limited (“Cyber One”).
On 14 October 2010, New Cotai Entertainment LLC (“NCE”), an affiliate company of New Cotai, issued a writ in the High Court of Hong Kong, Special Administrative Region against, amongst others, CapitaLand Limited and CapitaLand Integrated Resorts Pte Ltd (“CIR”). The writ alleged that East Asia Televisao por Satelite, Limitada (“MacauCo”) has breached its contract with NCE in relation to a lease of premises in the MSC for NCE’s casino operations (“Casino Lease”). NCE has sued CapitaLand and CIR for inducement and/or procurement of breach of contract by MacauCo and conspiracy with eSun and others to use unlawful means with the intention of injuring NCE by doing whatever was necessary to ensure that MacauCo did not sign the definitive agreement in relation to the Casino Lease.
On 27 June 2011, the Group divested its entire 20% interest in MSC to a wholly-owned subsidiary of eSun, Boom Faith Limited (“Boom Faith”). Concurrently with the divestment, a settlement deed was effected between, inter alia, CapitaLand, CIR, eSun, Boom Faith and New Cotai which resulted in a full and final settlement, on a no admission of liability basis, of the legal proceedings and all disputes arising from the MSC project. The settlement included a release from liability between parties to the settlement deed and no settlement sum was payable by any party.
37 signiFicant reLateD partY transactions For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the
direct and indirect ability to control the party, jointly control or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
The Group considers the directors of the Company, and the Council of CEOs comprising the President & CEO, key management officers of the corporate office and CEOs of the strategic business units, to be key management personnel in accordance with FRS 24 Related Party Disclosures.
37 signiFicant reLateD partY transactions (cont'd) In addition to the related party information disclosed elsewhere in the financial statements, there were significant
related party transactions which were carried out in the normal course of business on terms agreed between the parties during the financial year as follows:
the group the company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 restated restated
related corporations Equity participation in a newly formed subsidiary 150,000 – – – Acquisition of an associate 360,000 – – – Project management fee income 742 – – – subsidiaries Management fee income – – 66,107 66,061 IT and administrative support services – – 12,332 1,525 Others – – (239) (710) associates and Joint ventures Management fee income 301,426 280,953 – – Construction and project management income 51,958 36,470 – – Rental expense (44,684) (10,345) (3,824) (4,005) Proceeds from sale of properties and investments 443,535 1,972,267 – – Acquisition of investments 79,443 – – – Accounting service fee, acquisition fee, divestment fee, marketing income and others 77,575 60,503 (256) (268)
Key Management personnel Subscription of bonds issued by an indirect subsidiary 3,000 – – – Interest paid/payable by the Company and its indirect subsidiaries 325 302 111 37 Professional fees paid/payable to a director and a firm in which a director is a member 7 19 – 3 Sale of residential properties by the subsidiaries 1,178 18,151 – – Rental income received/receivable from a corporation in which a director has an interest – 396 – – remuneration of Key Management personnel Salary, bonus and other benefits 23,041 23,806 11,650 11,974 Employer’s contributions to defined contribution plans 107 106 45 27 Equity compensation benefits 6,961 8,946 3,643 4,974
30,109 32,858 15,338 16,975
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38 subsiDiaries (a) The significant subsidiaries directly held by the Company which are incorporated and conducting business in the
Republic of Singapore are as set out below: percentage held by the company 31/12/2011 31/12/2010 name of company % %
CapitaLand Commercial Limited 100 100 CapitaLand Financial Limited 100 100 CapitaLand GCC Holdings Pte Ltd 100 100 CapitaLand ILEC Pte Ltd 100 100 CapitaLand Residential Limited 100 100 CapitaLand Treasury Limited 100 100 CapitaMalls Asia Limited 65.5 65.5 CapitaValue Homes Limited 100 100 CL Pinnacle Pte Ltd 100 – The Ascott Limited 100 100
(b) Other significant subsidiaries in the Group are as follows: effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(i) Directly or indirectly held by capitaLand residential Limited: Ankerite Pte Ltd Singapore 60.0 60.0 Ausprop Holdings Limited Singapore 100 100 Australand Australia 59.3 59.3 Austvale Holdings Ltd Singapore 100 100 CapitaLand China Holdings Pte Ltd Singapore 100 100 CapitaLand Residential Singapore Pte Ltd Singapore 100 100 CRL Realty Pte Ltd Singapore 100 100 Leonie Court Pte Ltd Singapore 100 100 Phoenix Realty Pte Ltd Singapore 100 100
38 subsiDiaries (cont'd)
effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(ii) Directly or indirectly held by capitaLand china holdings pte Ltd: 4 Beijing XinKai Real Estate Development Co., Ltd The People’s 100 100 Republic of China 1 CapitaLand (China) Investment Co., Ltd The People’s 100 100 Republic of China 1 CapitaLand Management (China) Co., Ltd The People’s 100 100 Republic of China
1 Dongjin Real Estate The People’s 100 100 Development (Tian Jin) Co., Ltd Republic of China 1 Foshan Xin Fo Chen Real Estate The People’s 100 100 Development Co., Ltd Republic of China 1 Longtex Investment Limited Hong Kong 100 100 3 Shenzhen Municipal Golden Dragon The People’s 73.0 50.2 Property Development Limited Republic of China Yorksure Pte Ltd Singapore 100 100 (iii) Directly or indirectly held by capitaLand commercial Limited: CapitaLand Commercial Management Pte Ltd Singapore 100 100 CapitaLand (Office) Investments Pte Ltd Singapore 100 100 CapitaLand (Vietnam) Holdings Pte Ltd Singapore – # 100 1 CapitaLand – Vista Joint Venture Co., Ltd Vietnam – # 80.0 1 CapitaLand – Hoang Thanh Company Limited Vietnam – # 70.0 Corporation Place Ltd Singapore 75.0 75.0 E-Pavilion Pte Ltd Singapore 100 100 SBR Private Limited Singapore 100 100 Wan Tien Realty (Pte) Ltd Singapore 100 100
# Transferred to CapitaValue Homes Limited. See note 38(b)(v).
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38 subsiDiaries (cont'd)
effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(iv) Directly or indirectly held by the ascott Limited: Ascott Residence Trust Management Limited Singapore 100 100 1 Citadines Melbourne on Bourke Pty Ltd Australia 100 100 The Ascott Capital Pte Ltd Singapore 100 100 The Ascott (Europe) Pte Ltd Singapore 100 100
The Ascott Holdings Limited Singapore 100 100 Somerset Capital Pte Ltd Singapore 100 100
(v) Directly held by capitavalue homes Limited: CapitaLand (Vietnam) Holdings Pte Ltd Singapore 100# – 1 CapitaLand-Vista Joint Venture Co., Ltd Vietnam 80.0 # – 1 CapitaLand-Hoang Thanh Company Limited Vietnam 70.0 # – 1 Wuhan Kaihui Real Estate Co., Ltd The People’s Republic of China 100 –
# Transferred from CapitaLand Commercial Limited. See note 38(b)(iii).
(vi) Directly or indirectly held by capitaLand Financial Limited: CapitaLand China Development Fund Management Private Limited Singapore 100 100 CapitaCommercial Trust Management Limited Singapore 100 100 CapitaLand Financial Investments Ltd Singapore 100 100 CapitaLand Japan Investments Pte Ltd Singapore 100 100 CapitaLand Nippon Investments Pte Ltd Singapore 100 100 RCCF Management Pte Ltd Singapore 100 100
38 subsiDiaries (cont'd)
effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(vii) Directly or indirectly held by capitaMalls asia Limited: CapitaLand Retail China Pte Ltd Singapore 65.5 65.5 CapitaLand Retail (MY) Pte Ltd Singapore 65.5 65.5 CapitaLand Retail RECM Pte Ltd Singapore 65.5 65.5 CapitaLand Retail Singapore Investments Pte Ltd Singapore 65.5 65.5 CapitaMall Trust Management Limited Singapore 65.5 65.5 CapitaRetail China Investments Pte Ltd Singapore 65.5 65.5 1 Chengdu HuaYun Jiangnan Real Estate The People’s 65.5 65.5 Development Co., Ltd. Republic of China Pyramex Investments Pte Ltd Singapore 65.5 65.5 1 Shanghai Yongwei Real Estate Co., Ltd The People’s 43.2 – Republic of China (viii) Directly or indirectly held by australand: 2 Australand Finance Limited Australia 59.3 59.3 2 Australand Funds Management Limited Australia 59.3 59.3 2 Australand HK Company Limited Hong Kong 59.3 59.3 2 Australand Investments Limited Australia 59.3 59.3 2 Australand Property Group Pty Limited Australia 59.3 59.3 2 Australand Property Trust Australia 59.3 59.3 2 Australand Property Limited Australia 59.3 59.3 2 Australand Property Trust No.4 Australia 59.3 59.3 2 Australand Property Trust No.5 Australia 59.3 59.3
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38 subsiDiaries (cont'd)
effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(ix) Directly held by capitaLand iLec pte Ltd:
Kestrel Pte Ltd Singapore 100 100 (x) Directly or indirectly held by capitaLand gcc holdings pte Ltd: 1 CapitaLand Bahrain Bay Business Services WLL Bahrain 100 100 CapitaLand GCC (Bahrain) Pte Ltd Singapore 100 100 Notes:
All significant subsidiaries are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by PricewaterhouseCoopers and its associated firms.
3 Audited by Shenzhen Yida Certified Public Accountants. 4 Audited by Beijing Zhong Jing Heng Tai Certified Public Accountants.
39 associates Details of significant associates are as follows: effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(i) Directly held by cL pinnacle pte Ltd: Surbana Corporation Pte Ltd Singapore 40.0 – (ii) indirectly held by capitaLand china holdings pte Ltd: CapitaLand China Development Fund Pte Ltd Singapore 37.5 37.5 1 Central China Real Estate Ltd Cayman Islands 27.1 27.1 2 Lai Fung Holdings Limited Cayman Islands 20.0 20.0 Raffles City China Fund Ltd Cayman Islands 45.3^ 45.2^
Senning Property Ltd British Virgin 38.8# 38.8#
Islands
^ Includes 9.8% interest indirectly held through CapitaMalls Asia Limited.
# Includes 11.8% interest indirectly held through CapitaMalls Asia Limited.
39 associates (cont'd) effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(iii) indirectly held by capitaLand commercial Limited: CapitaCommercial Trust Singapore 32.0# 31.8# 3 DBS China Square Limited Singapore 30.0 30.0 # Includes 2.9% and 2.6% interests indirectly held through CapitaLand Financial Limited as at end-2011 and end-2010 respectively.
(iv) Directly and indirectly held by the ascott Limited: Ascott Residence Trust Singapore 48.8 47.8 Ascott Serviced Residence (China) Fund Cayman Islands 36.1 33.0 (v) indirectly held by capitaMalls asia Limited: CapitaMall Trust+ Singapore 18.7 19.6 1 CapitaMalls Malaysia Trust Malaysia 23.4 27.3 CapitaMalls Japan Fund Private Limited+ Singapore 17.2 17.2 (formerly known as CapitaRetail Japan Fund Private Limited) CapitaRetail China Trust+ Singapore 17.7 17.9 CapitaMalls China Income Fund Singapore 29.5 29.5 (formerly known as CapitaRetail China Development Fund) CapitaMalls China Development Fund II Singapore 29.5 29.5 (formerly known as CapitaRetail China Development Fund II) CapitaMalls China Incubator Fund+ Singapore 19.6 19.7 (formerly known as CapitaRetail China Incubator Fund) CapitaMalls India Development Fund Singapore 29.8 29.8 (formerly known as CapitaRetail India Development Fund)
+ Considered to be an associate as the Group has significant influence over the financial and operating policy decisions of the investee through its subsidiary CapitaMalls Asia Limited.
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39 associates (cont'd) effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(vi) indirectly held by capitaLand gcc holdings pte Ltd: 1 Raffles City Bahrain Fund Ltd Cayman Islands 40.9 40.9 Notes:
All significant associates are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by Ernst & Young and its associated firms.
3 Audited by PricewaterhouseCoopers and its associated firms.
40 Joint ventures Details of significant joint ventures are as follows: effective interest held by the group place of 31/12/2011 31/12/2010 name of company incorporation % %
(i) indirectly held by capitaLand residential Limited: Augite Pte Ltd Singapore 50.0 50.0 (ii) Directly held by capitavalue homes Limited: Vietnam Joint Venture Company Limited Cayman Islands 50.0 50.0 (iii) indirectly held by capitaMalls asia Limited: Orchard Turn Holding Pte Ltd Singapore 32.8 32.8 (iv) indirectly held by capitaLand gcc holdings pte Ltd: 1 Mubadala CapitaLand Real Estate LLC united Arab 49.0 49.0 Emirates Notes:
All significant joint ventures are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
41 operating segMents Management determines the operating segments based on the reports reviewed and used by the Council of CEOs
for strategic decisions making and resources allocation. For management purposes, the Group is organised into strategic business units based on their products, services and geography.
The Group’s reportable operating segments are as follows:
(i) CapitaLand Residential Singapore – develops residential properties in Singapore for sale and covers a wide spectrum of the residential market in Singapore.
(ii) CapitaLand China Holdings – involves in the residential, commercial and integrated property development in China.
(iii) CapitaLand Commercial – owner/manager of commercial and industrial properties in Singapore, Malaysia and united Kingdom. It also develops residential projects in Malaysia.
(iv) Ascott – an international serviced residence owner-operator with operations in key cities of Asia Pacific, Europe and the Gulf region. It operates three brands, namely Ascott, Somerset and Citadines.
(v) CapitaLand Financial – involves in real estate fund management and financial advisory services.
(vi) CapitaValue Homes – develops value housing projects in China and Vietnam.
(vii) CapitaMalls Asia – shopping mall owner/manager with portfolio in Singapore, China, India, Japan and Malaysia.
(viii) Australand – a major diversified property group with activities in residential, commercial and industrial developments and investment properties across Australia.
(ix) Others – includes Corporate Office, Group Treasury and Surbana.
Information regarding the operations of each reportable segment is included below. Management monitors the operating results of each of its business unit for the purpose of making decisions on resource allocation and performance assessment. Performance is measured based on segment earnings before interest and tax (“EBIT”). EBIT is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments. Segment assets and liabilities are presented net of inter-segment balances. Inter-segment pricing is determined on arm’s length basis.
Geographically, management reviews the performance of the businesses in Singapore, China, Other Asia, Australia and Europe. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Non-current assets and total assets are based on the geographical location of the assets.
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41 operating segMents (cont'd) operating segments – 31 December 2011
capitaLand capitaLand residential china capitaLand capitavalue capitaLand capitaMalls singapore holdings commercial ascott homes Financial asia australand others elimination group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
revenue External revenue 773,955 521,993 92,799 369,271 79,827 101,997 243,325 836,383 19 – 3,019,569 Inter-segment revenue 129 4,647 3,934 8,179 491 1,305 2,848 – 247,317 (268,850) –
total revenue 774,084 526,640 96,733 377,450 80,318 103,302 246,173 836,383 247,336 (268,850) 3,019,569 segmental results Company and subsidiaries 301,317 251,576 34,517 41,725 (11,076) 75,947 241,196 284,834 276,162 (286,255) 1,209,943 Associates 2,026 157,327 160,610 107,228 – 4,073 195,382 5,320 (6,463) 25,691 651,194 Joint ventures 24,077 14,777 (5,562) (559) (1,794) 20 160,446 34,047 – – 225,452
earnings before interest and taxation 327,420 423,680 189,565 148,394 (12,870) 80,040 597,024 324,201 269,699 (260,564) 2,086,589 Finance costs (472,785) Taxation (190,884)
profit for the year 1,422,920 segment assets 3,056,600 6,983,939 2,771,082 3,345,704 511,065 239,065 8,901,607 5,140,846 11,272,463 (6,902,930) 35,319,441 segment Liabilities 1,370,212 1,966,926 351,587 1,205,106 232,713 49,137 2,500,260 2,190,666 6,213,363 – 16,079,970 other segment items: interest income 13,462 14,966 1,447 11,200 1,484 139 18,891 5,500 13,868 – 80,957 Depreciation and amortisation (510) (6,408) (1,285) (14,997) (437) (220) (7,067) (4,370) (5,315) – (40,609) write back of/(provision for) foreseeable losses – – 2,700 – – – – (39,155) – – (36,455) impairment losses for assets (4) (326) (4,774) – (56) – (278) – (57) – (5,495) Fair value (losses)/ gains on investment properties – (2,927) 6,915 232 – – 200,934 79,878 – – 285,032 share-based expenses (1,553) (3,495) (3,035) (4,281) (916) (1,437) (8,343) (2,971) (8,312) – (34,343) gains/(losses) on disposal of investments – 169,511 21,766 36,853 6 20,322 14,793 – (3,223) – 260,028 associates 259,672 2,056,740 1,532,978 1,152,984 (364) 135,535 3,397,889 83,742 402,696 268,865 9,290,737 Joint ventures 135,971 115,476 73,900 4,125 59,271 1,341 728,544 273,387 2,248 – 1,394,263 capital expenditure# 246,962 33,476 205,199 41,698 1,086 233 1,500,931 226,165 22,020 – 2,277,770
# Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets.
41 operating segMents (cont'd) operating segments – 31 December 2010 (restated) capitaLand capitaLand residential china capitaLand capitavalue capitaLand capitaMalls singapore holdings commercial ascott homes Financial asia australand others elimination group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
revenue External revenue 1,284,862 323,546 137,467 400,589 135 114,332 242,506 879,796 159 – 3,383,392 Inter-segment revenue – 3,665 5,409 6,772 – 1,834 2,896 – 281,850 (302,426) –
total revenue 1,284,862 327,211 142,876 407,361 135 116,166 245,402 879,796 282,009 (302,426) 3,383,392 segmental results Company and subsidiaries 525,731 501,037 33,734 93,837 (21,881) 83,219 127,527 279,297 282,104 (279,918) 1,624,687 Associates (18,291) 138,759 167,097 79,899 – 12,053 112,824 4,156 (22,013) 20,289 494,773 Joint ventures 6,581 9,149 49,375 (727) 1,373 7,768 363,062 28,441 – – 465,022
earnings before interest and taxation 514,021 648,945 250,206 173,009 (20,508) 103,040 603,413 311,894 260,091 (259,629) 2,584,482 Finance costs (448,183) Taxation (284,100)
profit for the year 1,852,199 segment assets 2,096,710 7,266,013 2,414,525 3,315,287 334,096 271,398 6,944,427 4,675,853 11,268,513 (6,699,677) 31,887,145 segment Liabilities 842,182 1,919,217 617,597 1,215,607 245,473 54,801 940,535 1,821,772 6,364,757 – 14,021,941
other segment items: interest income 17,691 9,749 3,345 7,563 2,435 13 26,037 4,199 11,995 – 83,027 Depreciation and amortisation (582) (6,876) (2,745) (30,248) (169) (351) (7,207) (5,239) (6,208) – (59,625)
provision for foreseeable losses – (5,000) (25,848) – – – – – – – (30,848) write back of/(provision for) impairment for assets – 1,402 2,572 (29,021) – (1) (284) – (4,082) – (29,414) Fair value gains on investment properties – 266,420 17,013 16,837 – – 37,375 56,878 62 – 394,585 share-based expenses (1,124) (4,343) (6,551) (4,330) – (1,739) (8,997) (2,273) (9,771) – (39,128) gains on disposal of investments – 183,324 91 70,906 59 12,970 12,333 – 24 – 279,707 associates 257,870 1,875,442 1,459,331 822,926 – 142,494 3,121,472 40,082 37,714 434,076 8,191,407 Joint ventures 111,680 124,470 153,751 38,798 33,195 6,781 1,043,657 342,818 2,210 – 1,857,360
capital expenditure# 756 16,684 65,935 94,168 279 61 95,178 182,189 5,277 – 460,527
# Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets.
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41 operating segMents (cont'd) geographic information
singapore china+ other asia# australia europe others@ total 31/12/2011 $’000 $’000 $’000 $’000 $’000 $’000 $’000
external revenue 1,074,765 665,599 156,354 890,213 200,508 32,130 3,019,569 non-current assets^ 6,821,378 6,520,896 1,674,865 3,526,515 750,190 – 19,293,844 total assets 14,275,555 12,021,215 2,715,061 5,461,780 845,830 – 35,319,441
31/12/2010 (restated)
external revenue 1,642,503 465,074 96,958 916,159 227,391 35,307 3,383,392 non-current assets^ 6,604,807 5,358,025 1,179,163 3,148,591 88 – 16,290,674 total assets 13,879,760 10,325,936 2,284,391 4,929,458 424,012 43,588 31,887,145
+ China includes Hong Kong and Macau.
# Other Asia includes Indonesia, Japan, Malaysia, Philippines, Thailand, Korea, India, Vietnam and Gulf Cooperation Council countries.
@ Others includes the Cayman Islands.
^ Non-current assets comprised property, plant and equipment, intangible assets, investment properties and interests in associates and joint ventures.
42 new accounting stanDarDs anD interpretations not Yet aDopteD The Group has not applied the following accounting standards (including their consequential amendments) and
interpretations that have been issued as of the balance sheet date but are not yet effective: • Amendments to FRS 1 Presentation of Items of Other Comprehensive Income • Amendments to FRS 12 Income Taxes: Deferred Tax Recovery of Underlying Assets • Amendments to FRS 107 Disclosures Transfer of Financial Assets • FRS 27 Separate Financial Statements • FRS 28 Investments in Associates and Joint Ventures • FRS 110 Consolidated Financial Statements • FRS 111 Joint Arrangements • FRS 112 Disclosures of Interests in Other Entities • FRS 113 Fair Value Measurements
The Group is presently assessing impact of the adoption of these standards (including their consequential amendments). The Group has not considered the impact of accounting standards issued after the balance sheet date.
43 coMparative inForMation Certain comparatives in the financial statements have been changed from prior year due to the change in accounting
policy as described in note 2(a).
notice of annual general Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the Stamford Ballroom, Level 4, Raffles City Convention Centre, 80 Bras Basah Road, Singapore 189560 on Monday, 30 April 2012 at 10.00 a.m. to transact the following business:
as orDinarY business
1 To receive and adopt the Directors’ Report and Audited Financial Statements for the year ended 31 December 2011 and the Auditors’ Report thereon.
2 To declare a first and final 1-tier dividend of S$0.06 per share and a special 1-tier dividend of S$0.02 per share for the year ended 31 December 2011.
3 To approve Directors’ fees of S$1,919,601 for the year ended 31 December 2011 comprising:
(a) S$1,519,548.30 to be paid in cash (2010: S$1,409,220); and (b) S$400,052.70 to be paid in the form of share awards under the CapitaLand Restricted Share Plan 2010, with any
residual balance to be paid in cash (2010: S$411,820^).
4 To re-elect the following Directors, who are retiring by rotation pursuant to Article 95 of the Articles of Association of the Company and who, being eligible, offer themselves for re-election:
(a) Prof Kenneth Stuart Courtis (b) Mr John Powell Morschel
5 To re-elect Ms Euleen Goh Yiu Kiang, a Director who is retiring pursuant to Article 101 of the Articles of Association of the Company and who, being eligible, offers herself for re-election.
6 To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fix their remuneration.
as speciaL business
7 To consider and, if thought fit, to pass with or without any modification, the following resolutions as Ordinary Resolutions:
7A That pursuant to Section 161 of the Companies Act, authority be and is hereby given to the Directors of the Company to:
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
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provided that: (1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance
of Instruments made or granted pursuant to this Resolution) does not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed ten per cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited (“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub- paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and
(ii) any subsequent bonus issue, consolidation or subdivision of shares; (3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the
Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and
(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.
7B That the Directors of the Company be and are hereby authorised to:
(a) grant awards in accordance with the provisions of the CapitaLand Performance Share Plan 2010 (the “Performance Share Plan”) and/or the CapitaLand Restricted Share Plan 2010 (the “Restricted Share Plan”); and
(b) allot and issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the vesting of awards under the Performance Share Plan and/or the Restricted Share Plan,
provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the Performance Share Plan, the Restricted Share Plan and all shares, options or awards granted under any other share schemes of the Company then in force, shall not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.
By Order of the Board
Low sai choY coMpanY secretarY
singapore 26 March 2012
notes:
A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote instead of him. Where a member appoints more than one proxy, he shall specify the proportion of his shareholdings to be represented by each proxy. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be deposited at the office of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906 not less than 48 hours before the time appointed for holding the Annual General Meeting.
Additional information relating to the Notice of Annual General Meeting:
1 Dr Hu Tsu Tau and Mr Richard Edward Hale, independent Directors, retire from the Annual General Meeting and are not seeking re-appointment pursuant to Section 153(6) of the Companies Act, Cap. 50 of Singapore. Dr Hu will also cease to serve as Chairman of the Board and Chairman and a Member of the Investment Committee respectively. Mr Hale will also cease to serve as Chairman and a Member of the Audit Committee and a Member of the Risk Committee respectively.
2 In relation to item 3 under the heading “As Ordinary Business”, the total compensation of the non-executive Directors for 2011 of an aggregate amount of S$1,919,601, if approved, will be paid out as to S$1,519,548.30 in cash, and S$400,052.70 in the form of share awards under the CapitaLand Restricted Share Plan 2010. Consequently, and in accordance with the “Directors’ Fee Policy” described in the Other Information section of the Company’s Summary and Annual Reports 2011, a non-executive Director who served on the Board during 2011 (with the exception of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning, who are retiring from the Board and Mr Jackson Peter Tai who retired from the Board during 2011) will be remunerated as to about 70 per cent. (70%) of his total Directors’ fees in cash and about 30 per cent. (30%) of his total Directors’ fees in the form of shares in the Company. The number of shares to be awarded will be determined by reference to the volume-weighted average price of a share on the SGX-ST over the 14 trading days immediately following the date of the Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu Tsu Tau, Mr Richard Edward Hale, Dr Fu Yuning and Mr Jackson Peter Tai will receive all of their Directors’ fees in cash.
In comparison, the contingent share awards granted under the previous CapitaLand Restricted Stock Plan (“RSP”) to non-executive Directors in recognition of their contributions for 2010 did not form a part of their Directors’ fees and thus were not directly linked to their compensation. The awards were time-based with no performance conditions and released over a vesting period of two years. The awards of shares amounted to S$411,820 in aggregate (details can be found in the Other Information section of the Company’s Summary and Annual Reports 2010) based on the fair value of the shares comprised in the awards under the RSP at the time of grant. As it is intended that share awards should have a direct linkage to the total compensation of the non-executive Directors for 2011 (other than the retiring or retired non-executive Directors mentioned above) and as the aggregate Directors’ fees for 2011 is subject to the approval of shareholders at the Annual General Meeting, no contingent share awards were granted under the CapitaLand Restricted Share Plan 2010 to the non-executive Directors during 2011.
3 In relation to item 4 under the heading “As Ordinary Business”, an independent Director, Dr Fu Yuning retires by rotation pursuant to Article 95 of the Company’s Articles of Association at the Annual General Meeting and is not seeking re-election. In relation to items 4(a) and (b) under the heading “As Ordinary Business”, Prof Kenneth Stuart Courtis will, upon re-election, continue to serve as a Member of the Investment Committee and the Finance and Budget Committee respectively; and Mr John Powell Morschel will, upon re-election, continue to serve as a Member of the Investment Committee and the Nominating Committee respectively. Prof Courtis and Mr Morschel are considered as independent Directors.
notice of annual general Meeting
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4 In relation to item 5 under the heading “As Ordinary Business”, Article 101 of the Company’s Articles of Association permits the Directors to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed shall hold office only until the next following Annual General Meeting, and shall then be eligible for re-election. Ms Euleen Goh Yiu Kiang was appointed on 1 October 2011 and offers herself for re-election at the Annual General Meeting. Ms Goh will, upon re-election, continue to serve as Chairman and a Member of the Audit Committee and a Member of the Risk Committee respectively. Ms Goh is considered as an independent Director.
5 Ordinary Resolution No. 7A under the heading “As Special Business”, if passed, will empower the Directors to issue shares in the Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments from the date of the Annual General Meeting until the date of the next Annual General Meeting. The aggregate number of shares which the Directors may issue (including shares to be issued pursuant to convertibles) under this Resolution must not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company with a sub-limit of ten per cent. (10%) for issues other than on a pro rata basis. For the purpose of determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time that Ordinary Resolution No. 7A is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution No. 7A is passed and (b) any subsequent bonus issue, consolidation or subdivision of shares. The sub-limit of ten per cent. (10%) for issues other than on a pro rata basis is below the twenty per cent. (20%) sub-limit permitted by the Listing Manual of the SGX-ST. The Directors believe that the lower sub-limit of ten per cent. (10%) would sufficiently address the Company’s present need to maintain flexibility while taking into account shareholders’ concerns against dilution.
6 Ordinary Resolution No. 7B under the heading “As Special Business”, if passed, will empower the Directors to grant awards under the Performance Share Plan and the Restricted Share Plan, and to allot and issue shares pursuant to the vesting of such awards provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the Performance Share Plan, the Restricted Share Plan and all shares, options or awards granted under any other share schemes of the Company then in force, does not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.
notice of annual general Meeting
capitaLanD LiMiteD (Regn. No.: 198900036N) (Incorporated in the Republic of Singapore)
proxY ForM annuaL generaL Meeting
I/We, __________________________________ (Name) ______________________________ (NRIC/Passport/Company Regn. No.)
of _________________________________________________________________________________________________ (Address)
being a member/members of CapitaLand Limited (the “Company”) hereby appoint:
name address nric/passport no.
proportion of shareholdings
no. of shares %
and/or (delete as appropriate)
name address nric/passport no.
proportion of shareholdings
no. of shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary, to demand a poll, at the Annual General Meeting of the Company, to be held at the Stamford Ballroom, Level 4, Raffles City Convention Centre, 80 Bras Basah Road, Singapore 189560, on Monday, 30 April 2012 at 10.00 a.m., and at any adjournment thereof. I/We direct my/our proxy/ proxies to vote for or against the Resolutions to be proposed at the Annual General Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Annual General Meeting.
no. resolutions relating to: For* against*
orDinarY business
1 Adoption of Directors’ Report, Audited Financial Statements and Auditors’ Report
2 Declaration of a First and Final Dividend and a Special Dividend
3 Approval of Directors’ Fees
4(a) Re-election of Prof Kenneth Stuart Courtis as Director
4(b) Re-election of Mr John Powell Morschel as Director
5 Re-election of Ms Euleen Goh Yiu Kiang as Director
6 Re-appointment of Auditors
speciaL business
7A Authority for Directors to issue shares and to make or grant instruments pursuant to Section 161 of the Companies Act, Cap. 50
7B Authority for Directors to grant awards, and to allot and issue shares, pursuant to the CapitaLand Performance Share Plan 2010 and the CapitaLand Restricted Share Plan 2010
total number of shares held
iMportant: 1. For investors who have used their CPF monies to buy the Company’s shares, this Summary
Report/Annual Report is forwarded to them at the request of their CPF Approved Nominee and is sent solely FOR THEIR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.
* Please indicate your vote “For” or “Against” with a “ ” within the box provided.
Dated this _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ day of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2012
Signature(s) of Member(s) or Common Seal
IMPORTANT: PLEASE READ NOTES TO PROXY FORM ON REVERSE PAGE.
257
CAPITALAND LIMITED c/o M & C Services Private Limited
138 Robinson Road #17-00 The Corporate Office
Singapore 068906
Affix postage stamp
1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company.
2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3. Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy or proxies, to the Meeting.
4. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register as well as shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, the instrument of proxy will be deemed to relate to all the shares held by the member.
5. The instrument appointing a proxy or proxies must be deposited at the office of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906, not less than 48 hours before the time appointed for holding the Meeting.
6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.
7. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Cap. 50 of Singapore.
General The Company shall be entitled to reject the instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at least 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
3rd fold here, glue along the dotted line and fold flap
2nd fold here
1st fold here
NOTES TO PROXY FORM
C a p
ita L
a n
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im ite
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e p
o rt 2011
CAPITALAND LIMITED 168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 (Reg No. 198900036N)
www.capitaland.com
This Annual Report is printed on environmentally-friendly paper.
The Art of Building CapitaLand Limited Annual Report 2011
Strategic Focus on Core Markets
Concentrating Presence in Key Cities
6th Consecutive Year of More Than S$1 Billion Profit
capital land/CapitaLand Limited - Annual Report 2010.pdf
ACHIEVED TOTAL NET PROFIT OF S$7.4 BILLION IN THE LAST FIVE YEARS
UNIQUE MULTI-SECTOR AND MULTI-GEOGRAPHY REAL ESTATE COMPANY WITH COMPLETE VALUE CHAIN COMPETENCY
MANAGES S$50.6 BILLION OF REAL ESTATE ASSETS
MORE THAN 110 CITIES IN OVER 20 COUNTRIES
READY
FIRM FOUNDATION
LEADING EDGE INNOVATION IN THE FIRST
FOR THE NEXT
YEARS
CAPITALAND LIMITED ANNUAL REPORT 2010
CORPORATE PROFILE CapitaLand is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the multi-local company's core businesses in real estate, hospitality and real estate financial services are focused in growth cities in Asia Pacific and Europe.
The company’s real estate and hospitality portfolio, which includes homes, offices, shopping malls, serviced residences and mixed developments, spans more than 110 cities in over 20 countries. CapitaLand also leverages on its significant asset base, real estate domain knowledge, financial skills and extensive market network to develop real estate financial products and services in Singapore and the region.
The listed entities of the CapitaLand Group include Australand,CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust, CapitaRetail China Trust, CapitaMalls Malaysia Trust and Quill Capita Trust.
CREDO Building for People to Build People
Building People to Build for People
VISION A world-class entrepreneurial, prosperous and
lasting real estate company led and managed by
people with core values respected by the business
and social community.
A leading real estate company in Asia, reputed for its
innovative and quality real estate products and services.
A company with a strong global network of long-term
investors and blue-chip partners.
A company which attracts, develops and retains
a diversity of talents regardless of nationality,
race or age.
A company which consistently creates value
for shareholders.
MISSION Our mission is to build a world-class company with
international presence that
• Creates sustainable shareholder value
• Delivers quality products and services
• Attracts and develops quality human capital
CONTENTS
M A
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M E
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PA G
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Letter to Shareholders
Board of Directors
Council of CEOs
Performance Overview
Global Presence
Corporate Office 34
8
18
26
38
36
5-Year Financial Summary 3
Financial Highlights 2
Group Businesses 51
Awards & Accolades 48
CapitaLand Commercial
CapitaMalls Asia
The Ascott Limited
CapitaLand Financial Services
CapitaValue Homes
CapitaLand Integrated Developments 62
56
58
60
66
64
CapitaLand China 54
CapitaLand Residential Singapore 52
Corporate Social Responsibility
Corporate Directory
Financial Calendar
Corporate Governance
Year In Brief
10-Year Share Price Performance 76
72
74
75
81
77
Human Resource 70
Australand Property Group 68
Stakeholder Communications 96
Risk Assessment and Management 94
Shareholding Statistics
Other Information
Appendix
Notice of Annual General Meeting
Statutory Accounts 105
100
102
223
216
Value Added Statements 99
Economic Value Added Statements 98
Proxy Form 239
B U
S IN
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S R
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IN V
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5th Consecutive Year of Above S$1 Billion Net Profit
Profit attributable
to Shareholders S$1.27 billionS$1.27 billion
Earnings Before
Interest and Tax S$2.38 billion
Return on
Shareholders' Funds 9.2%
Return on
Total Assets 7.1%
Group Managed
Real Estate Assets S$50.6 billion
Revenue Under
Management S$7.2 billion
FINANCIAL HIGHLIGHTS
A N
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2006 2007 2008 2009 2010
(A) INCOME STATEMENT (S$ million)
Revenue by SBUs
CapitaLand Residential Limited (1) 2,356.0 CapitaLand Residential Singapore 548.7 400.2 673.8 843.2 CapitaLand China Holdings 985.3 330.3 647.0 573.5 CapitaLand Commercial 139.2 165.7 227.9 144.9 337.8 The Ascott Limited 478.1 459.5 441.8 393.7 407.4 CapitaLand Financial 101.2 119.2 182.2 162.2 116.2 CapitaMalls Asia 94.6 124.2 206.7 228.9 245.4 Australand 1,406.7 984.3 732.5 879.8 Others (21.4) (16.6) (21.1) (25.6) (20.6)
Total 3,147.7 3,792.7 2,752.3 2,957.4 3,382.7
Earnings Before Interest and Tax (EBIT) by SBUs
CapitaLand Residential Limited (1) 692.2 CapitaLand Residential Singapore 308.6 175.0 371.7 351.5 CapitaLand China Holdings 403.4 883.4 551.2 682.4 CapitaLand Commercial 372.4 1,876.7 395.6 (497.4) 264.2 The Ascott Limited 202.5 337.2 132.2 31.4 173.0 CapitaLand Financial 61.6 69.7 90.4 98.0 103.0 CapitaMalls Asia 221.1 297.9 298.6 449.1 472.4 Australand 470.0 169.6 (240.8) 311.9 Others 264.3 60.5 68.7 785.8 25.8
Total 1,814.1 3,824.0 2,213.5 1,549.0 2,384.2
Net Profit attributable to Shareholders 1,012.7 2,759.3 1,260.1 1,053.0 1,273.1
(B) BALANCE SHEETS (S$ million)
Investment Properties 5,668.3 6,777.4 4,848.9 5,058.5 4,732.9 Development Properties for Sale and Stock 3,622.7 3,540.8 3,347.2 3,590.2 5,419.4 Associates and Joint Ventures 4,749.9 6,450.7 7,864.6 8,684.2 10,110.4 Cash and Cash Equivalents 2,684.9 4,356.0 4,228.4 8,729.7 7,190.1 Other Assets 3,866.4 4,716.4 4,794.5 4,103.4 4,247.4
Total Assets 20,592.2 25,841.3 25,083.6 30,166.0 31,700.2
Equity attributable to owners of the Company 7,367.7 9,940.9 10,681.7 13,408.3 14,170.7 Total Borrowings 8,129.8 9,916.1 9,829.3 10,312.6 10,358.0 Non-Controlling Interests and Other Liabilities 5,094.7 5,984.3 4,572.6 6,445.1 7,171.5
Total Equities & Liabilities 20,592.2 25,841.3 25,083.6 30,166.0 31,700.2
(C) FINANCIAL RATIOS
Earnings per share (cents) 36.6 98.6 37.0 26.2 29.9
Net Tangible Assets per share (S$) 2.64 3.53 3.57 3.03 3.22
Return on Shareholders’ Funds (%) 14.5 31.9 12.2 8.7 9.2
Return on Total Assets (%) 8.7 15.7 7.9 5.5 7.1
Dividend
First & final dividend per share (cents) 7.0 8.0 5.5 5.5 6.0 Special dividend per share (cents) 5.0 7.0 1.5 5.0 -
Total dividend per share (cents) 12.0 15.0 7.0 10.5 6.0
Dividend cover (times) 3.2 6.5 4.2 2.4 5.0
Debt Equity Ratio (net of cash) (times) 0.58 0.47 0.47 0.09 0.18
Interest Cover (times) 9.73 13.64 5.50 4.54 7.00
Note: For changes in accounting policies, adoption of new and/or revised accounting standards, as well as changes in the presentation of financial statements for the respective financial year under review, only the comparative figures for the previous year were restated to conform with the requirements arising from the said changes or adoption.
(1) With effect from 1 April 2008, CapitaLand Residential Limited SBU was reorganised into 3 main components, namely, CapitaLand Residential Singapore, CapitaLand China Holdings and CapitaLand's holding in Australand.
5-YEAR FINANCIAL SUMMARY
OVERSEAS ASSETS
FIRM FOUNDATION LEADING EDGE INNOVATION
25% to
56%
NUMBER OF SHOPPING MALLS
5 to
91
ASSETS UNDER MANAGEMENT
S$0.27B to
S$30.4B
CAPITAL TOWER
SINGAPORE
JINNIU MALL
CHENGDU CHINA
RIVERGATE
SINGAPORE
THE LOFT
CHENGDU CHINA
Pioneered the REIT
market in Asia
excluding Japan
with a total of six
REITs to-date
First residential
development in
Singapore to be
accorded landmark
status by Urban
Redevelopment
Authority
First earthquake-proof
high-rise condominium
community in China
Early-mover advantage
for shopping malls
in China
10 YEARS
FIRST
UNITS OF SERVICED RESIDENCES
6,000 to
OVER 26,000
ION ORCHARD AND
THE ORCHARD
RESIDENCES
SINGAPORE
RAFFLES CITY SHANGHAI
CHINA
THE PONDS
NEW SOUTH WALES AUSTRALIA
ASCOTT RAFFLES PLACE SINGAPORE
Australand is one of
the most successful
diversified property
groups in Australia
Exported Singapore’s
‘Raffles City’ brand
globally (seven
Raffles City
developments
in China)
Transformed the
retail landscape and
set new benchmarks
for super-luxury
residential
developments
in Singapore
Transformed prime
national heritage
building into
premium serviced
residence property
READY
RAFFLES CITY HANGZHOU
CHINA
JCUBE
SINGAPORE
ASCOTT GUANGZHOU IFC
CHINA
TARGET 45% OF CAPITALAND’S BUSINESS
GROW CHINA BUSINESS
GROW TOTAL ASSETS FROM S$400M TO S$2B OVER NEXT 3-5 YEARS
EXPAND IN VIETNAM
THE PINNACLE
SHANGHAI CHINA
GROW TO 40,000 UNITS BY 2015
BUILD ASCOTT’S GLOBAL DOMINANCE
CAPACITY:
CASH OF S$7.2B AND NET GEARING OF 0.18
THE STRATEGY GOING FORWARD
BEDOK TOWN
CENTRE SITE
SINGAPORE
10 YEARS
NEXT
SITE AT MO LAO WARD
HANOI VIETNAM
LA FORET
BEIJING CHINA
SINGAPORE, A GLOBAL CITY
INCREASE PRESENCE IN SINGAPORE
BUILD 10,000-15,000 AFFORDABLE HOMES ANNUALLY OVER NEXT 3-5 YEARS
GROW CAPITAVALUE HOMES BUSINESS
ORIGINATE NEW REAL ESTATE FUNDS AND FINANCIAL PRODUCTS IN SINGAPORE, CHINA, VIETNAM AND MALAYSIA
GROW FINANCIAL SERVICES FRANCHISE
TARGET TO GROW CHINA TO 40% OF CAPITAMALLS ASIA’S BUSINESS
EXTEND LEADERSHIP IN PAN-ASIAN SHOPPING MALL BUSINESS
RAFFLES CITY CHENGDU
CHINA
HONGKOU PLAZA
SHANGHAI CHINA
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DR HU TSU TAU CHAIRMAN
LIEW MUN LEONG PRESIDENT & CEO
For the fifth consecutive year, CapitaLand has recorded net profit after tax and minority interests exceeding S$1 billion. Over the last five years, CapitaLand has achieved total net profit of S$7.4 billion. The sustained profitability is the result of the Group’s aggressive growth strategy, financial discipline and focus on capital productivity. During the year, the Group continued to invest for future growth by committing over S$6 billion of new investments. It entered 2011 with a strong cash position of S$7.19 billion and healthy net debt-to-equity ratio of 0.18 as a result of its successful capital recycling strategy. This provides the Group with the flexibility and capacity to seize opportunities quickly in a global economic environment that experiences increasingly shorter cycles.
The achievements in FY2010 are the result of the solid foundation laid since the inception of CapitaLand 10 years ago. In November 2000, pursuant to the merger between Pidemco Land and DBS Land, the newly-formed CapitaLand was largely a Singapore-centric real estate developer with overseas assets accounting for just 25% of its asset base. Overseas assets have since grown to 56% of our asset base. Furthermore, the Group’s net debt-to-equity ratio was relatively high at 0.92 (compared to 0.18 today).
BUILDING THE FOUNDATION
After a decade of transformation, CapitaLand is now one of Asia’s largest real estate companies, with a total group market capitalisation of almost S$40 billion. We have grown into a multi-sector and multi-geography real estate company with operations which span across 110 cities in over 20 countries, largely in Asia Pacific and Europe. We have established leadership positions in various real estate sectors, namely homes, shopping malls, offices, serviced residences and
Over the last five years,
CapitaLand has
achieved total net profit
of S$7.4 billion
S$7.4b
Multi-sector and
multi-geography real
estate company with
operations across
110 cities in over
20 countries
LETTER TO SHAREHOLDERS
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integrated developments. Our real estate fund management business is also one of the largest in Asia with total Assets Under Management (AUM) of more than S$30 billion comprising six listed Real Estate Investment Trusts (REITs) and 17 real estate private equity funds.
Our competency across the complete value chain of investing, developing, operating and managing real estate assets differentiates us from most other real estate companies. Through strategic capital management, we have strengthened our financial standing beyond achieving a low debt exposure. Financial flexibility has been greatly enhanced as we successfully nurtured our access to the debt capital market, thereby diversifying our funding sources. An aggressive growth strategy, strategic capital management, financial discipline and a focus on talent development have produced sustained profitability for the Group despite many market challenges over the years.
DELIVERING THE RESULTS
Revenue for FY2010 was S$3.38 billion, 14% higher than FY2009. For FY2010, revenue came from brisk home sales, and contributions from development projects in Singapore, China, Australia and Vietnam. Net profit recorded a 21% increase to S$1.27 billion. Group’s Earnings Before Interest and Tax (EBIT) rose 54% to S$2.38 billion with overseas operations accounting for 60% or S$1.44 billion. CapitaLand China Holdings was the largest contributor, achieving EBIT of S$682 million (up 24%), benefiting from the divestment of a majority stake in Raffles City Changning, Shanghai. CapitaLand Residential Singapore (CRS) continued to record high EBIT with S$352 million in FY2010. The Ascott Limited (Ascott), the Group’s serviced residence business unit, saw a strong 451% increase in EBIT to S$173 million on the back of portfolio gains, higher occupancy and Revenue per Available Unit (RevPAU).
With the latest performance, the Directors are pleased to propose a first and final dividend of 6 cents per share for FY2010.
RESIDENTIAL
Our residential business was a strong contributor in 2010. Healthy sales were recorded in our core markets of Singapore, China, Australia and Vietnam. During the year, we sold 800 homes in Singapore with a total sales value of S$1.85 billion, a 54% increase. This achievement can be attributed to our focus on mid- to high-end projects in preferred locations, which continue to be attractive to local and international homebuyers and investors. We were also bold in creating unique and iconic landmark projects which set a new benchmark for Singapore’s residential landscape.
The Interlace, with a unique design by renowned architecture firm Office for Metropolitan Architecture (OMA), received a lot of interest. We have sold approximately 94% of the 650 units released by end-2010, and will release more units in 2011.
Similarly, d’Leedon, which is designed by Zaha Hadid – a world- renowned and Pritzker Architecture Prize-winning architect – will be an iconic residential development on the site of the
An aggressive growth
strategy, strategic capital
management, financial
discipline and a focus on
talent development have
produced sustained
profitability for the Group
despite many market
challenges over the years
Revenue for FY2010 was
S$3.38 billion, 14% higher
than FY2009
S$3.38b
Achieved a 54%
increase in total sales
to S$1.85 billion with
800 homes sold
in Singapore
S$1.85b
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LETTER TO SHAREHOLDERS
former Farrer Court. About 93% of the 250 units released for initial sales at the 1,715-unit condominium have been sold as at end-2010.
In 2010, we acquired a prime site in Bedok Town Centre and, together with CapitaMalls Asia (CMA), plan to build an integrated development with 500 apartments above a shopping mall in one of Singapore’s busiest town centres. We aim to be a top three developer, with 15% market share in terms of units sold, through capitalising on our strong financial position to replenish our development portfolio with prime sites.
Our China residential business enjoyed another robust year with a 23% rise in units sold to over 2,900 units and a total sales value of RMB5.4 billion (S$1.1 billion). Beaufort, The Pinnacle, The Metropolis and The Loft achieved strong sales at prices which were in line or above our expectations. The Government’s recent measures to curb excessive speculation are aimed at ensuring a healthy and sustainable property market. The measures have limited impact on our business in China which has a balanced portfolio of properties in the different sectors. The sustained demand for homes in China and the profitability of our business there vindicates our aggressive expansion over the last 16 years.
From a business which accounted for less than 5% of our balance sheet in 2000, China is today our largest overseas market with assets of S$10 billion, or 36% of our balance sheet (excluding cash reserves held at Treasury level), comprising not only residential developments but also shopping malls, serviced residences and our ‘Raffles City’ integrated developments.
The journey over the last 16 years has been a challenging but rewarding one as CapitaLand Group is today the leading foreign developer in China having completed over 11,000 homes. The wealth of market knowledge acquired over the years has enabled us to grow our presence through astute land acquisition as in the case of the US$2.2 billion (S$3.1 billion) purchase of Orient Overseas Developments Limited (OODL). We will continue to expand our business and grow our pipeline of 15,000 residential units, as at end-2010, to ride on the robust economic growth of the second largest economy in the world.
Vietnam is a relatively new market for our residential business but our presence in the country began through our serviced residence business 16 years ago. We have managed to quickly build a brand with the successful topping-out of our first residential project, The Vista, in Ho Chi Minh City. Leveraging on our growing reputation as a quality developer, we launched our second project, Mulberry Lane, in Hanoi. We also signed new joint venture agreements with two leading real estate developers to develop two residential projects, one each in
China is today our largest
overseas market with
assets of S$10 billion,
or 36% of our balance
sheet comprising
residential, shopping
malls, serviced residences
and our ‘Raffles City’
branded developments
S$10b
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Ho Chi Minh City and Hanoi. This brings our residential portfolio in Vietnam to over 4,500 apartments, comprising four prime residential developments and an affordable housing development that is under our new strategic business unit, CapitaValue Homes, which focuses on building affordable homes in Asia.
While there are short term challenges such as inflation and currency devaluations, we see vast potential in the country given its young and hardworking population, robust economic growth and rapid urbanisation. We intend to grow our presence by progressively raising the Group’s total asset size in Vietnam from S$400 million currently to S$2 billion in the next three to five years.
Over the past decade, Australand has been a significant contributor to CapitaLand’s bottom line. In 2010, Australand recorded a solid profit contribution of S$123 million on the back of rental income growth in the Investment Property division and strong sales from its residential development activities. During the year, Australand sold 1,544 residential lots with a total sales value of A$538 million (S$689 million).
Australand’s Commercial and Industrial division also saw increased levels of activity particularly in the industrial sector where land sales have recovered and demand improved for well-located logistics facilities. The office sector is expected to see improved trading conditions in 2011. Given the positive macro-economic factors in Australia and its strengthened financial standing, we expect Australand to continue its growth path and contribute positively to CapitaLand Group. A major achievement in 2010 has been Australand’s inclusion into the S&P/ASX 200 A-REIT and S&P/ASX 300 A-REIT Indices which are key property indices widely tracked by fund managers. During the course of 2010, Australand’s share price appreciated by 13%, outperforming many of its major peers in Australia.
d’Leedon, a 1,715-unit condominium in Singapore
Australand recorded solid
profit contribution of
S$123 million on the back
of rental income growth
in the Investment Property
division and strong sales
from its residential
development activities
S$123m
In Vietnam, we have
over 4,500 apartments
comprising four prime
residential developments
and an affordable
housing development
OVER
4,500 APARTMENTS
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Raffles City Changning, Shanghai, one of CapitaLand’s seven Raffles City developments in China
INTEGRATED DEVELOPMENTS
Integrated development has been one of CapitaLand’s strengths and our nine Raffles City integrated developments have become a well-recognised brand in Asia. The three completed developments in Singapore, Shanghai and Beijing achieved strong occupancy for both their office and shopping mall space. In 2010, we continued to grow our Raffles City portfolio by adding two more projects in Shenzhen and Changning, Shanghai. The two massive developments with a combined GFA of just under 500,000 sqm are located close to train lines and will incorporate a balanced mix of retail space and commercial elements catering to the residences of the vibrant neighbourhoods.
Starting with just one Raffles City project in Singapore, CapitaLand has rapidly grown the Raffles City portfolio across Asia. Drawing from the success of the completed projects, we have quickly built a pipeline of new Raffles City developments in prime sites within Chengdu, Ningbo, Hangzhou, Shenzhen and Shanghai. These are currently under construction and expected to be completed between 2012 and 2015. CapitaLand will continue to build on the success of its Raffles City brand by carefully identifying and securing ideal prime sites within Asia, adding to its existing portfolio of nine projects across Asia. Moving ahead, we will seek ways to capitalise on the Raffles City brand franchise.
FINANCIAL SERVICES/REAL ESTATE INVESTMENT TRUSTS
CapitaLand Group’s Assets Under Management (AUM) grew by 19% to S$30.4 billion during the year, inclusive of CapitaMalls Asia’s AUM. Total fees arising from fund management services amounted to about S$184.3 million for the Group. Starting with just one fund with an asset size of S$0.3 billion in November 2000, CapitaLand is today one of the largest Asian real estate fund managers. To date, the Group has originated six REITs
Group’s Assets Under
Management grew by
19% to S$30.4 billion
S$30.4b
Grew our Raffles City
portfolio by adding two
more projects in Shenzhen
and Changning, Shanghai
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and 21 real estate private equity funds. Of the private equity funds, four have successfully matured.
In 2010, the Group upsized Raffles City China Fund from US$1 billion to US$1.18 billion and injected Raffles City Ningbo into the Fund, increasing the Fund’s portfolio of properties to five Raffles City integrated developments. In addition, three retail assets in Malaysia, with a total value of RM2.1 billion as at end-2010, were injected into a REIT for listing on the Main Market of Bursa Malaysia Securities Berhad. Ascott Residence Trust (Ascott Reit) acquired 28 properties in Asia and Europe from Ascott, almost doubling its portfolio value to S$2.71 billion in 2010. We also closed two joint venture funds, one investing in residential developments in Vietnam and the other to develop Raffles City Changning in Shanghai, China. These funds are in line with the Group’s strategy, enabling us to recycle capital for new investments and to develop, warehouse and incubate retail, office, residential, serviced residence and integrated developments. Our real estate private equity funds and REITs are an important platform contributing to the growth of our real estate business.
SHOPPING MALLS
CapitaMalls Asia (CMA) continues to grow from strength to strength. Strong rental performances in our core markets of Singapore, China and Malaysia have contributed S$276 million to CapitaLand’s bottom line. Our malls continue to experience strong growth in both shopper traffic and tenants’ gross turnover.
During the year, CMA committed almost S$2 billion in six new projects in Singapore, China and Malaysia, double its 2010 target of S$800 million to S$1 billion. These acquisitions have strengthened CMA’s leading positions in its key markets of Singapore and China, and signify its commitment to grow in Malaysia – another key market.
As part of its capital management strategy, CMA successfully recycled capital with the sale of Clarke Quay to CapitaMall Trust, and the listing of CapitaMalls Malaysia Trust (CMMT) on Bursa Malaysia. CMMT is the largest “pure-play” shopping mall REIT in Malaysia.
CMA also diversified its sources of funding with its wholly- owned subsidiary, CapitaMalls Asia Treasury Limited (CMATL), issuing S$350 million of corporate bonds under CMATL’s S$2 billion Euro-Medium Term Note programme. Sensing demand from retail investors, CMATL launched the first series of retail bonds to the public in Singapore in January 2011. A total of S$200 million worth of 1-year and 3-year bonds, carrying interest payments of 1% and 2.15% per annum respectively, were issued to cater to demand from individual investors. These investors are looking for attractive fixed
CapitaMalls Asia
committed almost
S$2 billion in six new
projects in Singapore,
China and Malaysia
S$2b
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LETTER TO SHAREHOLDERS
income vis-à-vis other investments, as well as an opportunity to participate in the income resilience of CMA’s shopping malls. The public offer was well-received and about 1.82 times subscribed.
From just five malls in Singapore nine years ago, CMA is today one of Asia’s largest shopping mall developers, owners and managers with a total of 91 malls across Singapore, China, Malaysia, Japan and India. Given a cash position of S$1.32 billion and a low gearing, CMA targets to acquire another S$2 billion of new projects in its key markets of Singapore, China and Malaysia in 2011. It targets to double its China portfolio from 53 malls to 100 malls within the next three to five years. CMA’s unique strength in creating value by enhancing returns on its properties, coupled with its capital efficient business model, will enable it to extend its leadership position in Asia’s shopping mall space.
SERVICED RESIDENCES
Ascott continues to strengthen its leadership position as the world’s largest international serviced residence owner-operator. In 2010, it clinched contracts to manage 12 properties with over 2,000 apartment units across 12 cities, and opened 14 properties with over 2,800 apartment units across 13 cities. With the global economic recovery, Ascott has seen an increase in occupancy and rental rates since the middle of 2010. Revenue per Available Unit (RevPAU) in its key markets such as Singapore and China grew by 24% and 9% respectively. During the year, Ascott also injected 28 quality stabilised properties in Europe and Asia into Ascott Reit with divestment proceeds of S$974 million. This transaction has transformed Ascott Reit into a larger and stronger platform which complements Ascott’s global growth strategy and increased Ascott’s financial capacity to capture new growth opportunities.
Citadines Louvre Paris, one of the 28 quality assets injected into
Ascott Reit, is being converted into Ascott Louvre Paris
Ascott continues to
strengthen its leadership
position as the world’s
largest international
serviced residence
owner-operator
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Over the years, Ascott has grown rapidly as a result of bold moves such as the strategic acquisition in 2002 of Citadines, an established Pan-European serviced residence chain. Another key driver of Ascott’s growth was the launch of Ascott Reit in 2006 which enhanced its ability to recycle capital efficiently. The privatisation of Ascott in 2008 has further accelerated its expansion as it can better leverage on the Group’s capital base and resources. Moving ahead, Ascott is on track to achieve its target of 40,000 apartment units globally by 2015.
COMMERCIAL
Our commercial business unit is well-positioned to benefit from the rebound of Singapore’s office sector through our listed REIT, CapitaCommercial Trust (CCT). Prime office rents in Singapore have risen by 24% in 2010 after bottoming out in 1Q2010, leading to firming of asset values. CCT’s committed portfolio occupancy rate remained strong at 99%, above the market level of 95%, as at end-2010.
In 2010, we continued with our proactive capital recycling and active portfolio management strategies. CCT divested two non- Grade A office buildings while CapitaLand sold 163 strata-titled office and retail units in a mixed-use development in Singapore, and its 49% stake in a residential project in India. Six Battery Road became the first operating office building in Singapore’s Central Business District to win the Green Mark Platinum award. At the cost of S$92 million, asset enhancement works have commenced at the Grade A office property to improve the building’s technical, aesthetic and “green” specifications. We also established a joint venture with Hersing Corporation Ltd to own and manage self-storage facilities under the “StorHub” brand in Singapore, with a view to extending the portfolio to overseas markets.
We will continue to enhance our existing assets and expand our commercial portfolio in Asia through investment opportunities and grow our self-storage business under the “StorHub” brand.
CAPITAVALUE HOMES
In Asia, the rapid pace of urbanisation and escalating home prices have created a growth potential in the affordable housing segment to meet the mass market demand. CapitaLand has set up a new business unit to grow its residential business in the affordable housing segment in Asia.
For its maiden projects, CapitaValue Homes has acquired two sites, one each in Wuhan, China, and Ho Chi Minh City, Vietnam, which will provide an initial pipeline of over 2,500 affordable homes. Our prices will be affordable, targeted at the mass market homebuyers with mortgage repayment pegged at no more than 40% of the average household income level in that particular city. To ensure value for money and achieve cost
CapitaValue Homes has
acquired two sites, one
each in Wuhan, China, and
Ho Chi Minh City, Vietnam,
which will provide an
initial pipeline of over
2,500 affordable homes
OVER
2,500 AFFORDABLE HOMES
Established a joint
venture to own and
manage self-storage
facilities under the
“StorHub” brand
in Singapore
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We have 15 CapitaLand
Hope Schools in China
and recently added one
CapitaLand Hope School
in Vietnam
16 CAPITALAND HOPE SCHOOLS
efficiency, these projects will feature standardised designs and adopt industrialised construction technology.
We will actively seek more sites in China and Vietnam in order to meet the demand for affordable homes in these two countries.
CORPORATE SOCIAL RESPONSIBILITY
As a good corporate citizen, CapitaLand has always been committed to doing things responsibly and for the good of the society. We have strived to be an environmentally-sustainable real estate developer and aim to be at the forefront of the industry in terms of green buildings and environmental awareness. In 2010, we retained our inclusion in the Dow Jones Sustainability Asia Pacific Index for the third year running. CapitaLand is one of only two Singapore companies in the index, which is based on an analysis of corporate economic, environmental and social performance, and issues such as corporate governance, risk management and climate change mitigation.
At the same time, we have also been actively contributing to the communities we operate in. Since 2005, our philanthropic arm, CapitaLand Hope Foundation, has donated about S$10 million to aid underprivileged children in Singapore and overseas where we have a presence. We have 15 CapitaLand Hope Schools in China and recently committed to our first CapitaLand Hope School in Vietnam, the CapitaLand Nang Yen Primary Hope School near Hanoi. Our effort towards being a good corporate citizen has also significantly strengthened our reputation as a socially responsible company, a company with a soul. We will continue to support programmes that meet the shelter, education and healthcare needs of underprivileged children in Singapore and overseas.
READY FOR THE NEXT DECADE
Over the last 10 years, we have expanded aggressively, established a strong track record of excellent execution, and built a robust balance sheet. With this firm foundation, we are confident that the Group will continue to perform strongly as we move into the next decade.
We target to grow our China business to 45% of CapitaLand’s total assets, increase our assets in Vietnam from S$400 million currently to S$2 billion in the next three to five years, and extend our presence in Singapore as the country continues its transformation into a global city. We aim to extend our leadership in the Pan-Asian shopping mall business, build Ascott’s global dominance, and expand our financial services business by exploring new funds and real estate financial products in Singapore, China, Vietnam and Malaysia. Building on our track records in China and Vietnam, we will expand our residential business into the affordable housing segment to
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Committed to building a
world-class and lasting real
estate company as we
move into the new decade
meet the demand arising from massive urbanisation and escalating home prices in Asia.
More importantly, as we marked our 10th anniversary last year, it should be highlighted that the core to CapitaLand’s success has been its people. It is our people who moulded CapitaLand into what it is today by having the courage to push the boundaries of traditional real estate developers. Our consistent focus on building our talent pool ensures that we have depth in our management bench.
As we look forward into the next 10 years, we will continue to embrace our credo of “Building People” by enlarging and enriching our talent pool, and developing our leadership and management teams. Young talent, mid-career professionals and “silver hairs” are part of our inclusive multi-prong approach in our investment on human capital. A strong pool of new management talent – well trained and tested – is being entrusted with leadership position. With the guidance of the Board, they will chart the course for CapitaLand for the next 10 years. With our strong foundation and focus on superior performance, we remain committed to building a world-class and lasting real estate company as we move into the new decade.
We want to acknowledge the invaluable contributions from outgoing Director Mr Jackson Tai who will not be seeking re-election at the forthcoming annual general meeting. Mr Tai, who is a founding Director of CapitaLand, has been on the Board since 20 November 2001. On behalf of the management and the Board of Directors, we wish to thank all staff, shareholders, business partners and associates for their continued commitment and support of the CapitaLand Group.
DR HU TSU TAU CHAIRMAN
LIEW MUN LEONG PRESIDENT & CEO
CapitaLand’s Board of Directors and senior management toasting during the launch of CapitaLand’s 10th anniversary celebrations at ION Orchard, Singapore in February 2010
28 February 2011
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BOARD OF DIRECTORS
1 DR HU TSU TAU CHAIRMAN
2 PETER SEAH LIM HUAT DEPUTY CHAIRMAN
3 LIEW MUN LEONG PRESIDENT & CEO
4 JACKSON PETER TAI DIRECTOR
5 RICHARD EDWARD HALE DIRECTOR
6 JAMES KOH CHER SIANG DIRECTOR
7 ARFAT PANNIR SELVAM DIRECTOR
8 PROFESSOR KENNETH STUART COURTIS DIRECTOR
9 DR FU YUNING DIRECTOR
10 JOHN POWELL MORSCHEL DIRECTOR
11 NG KEE CHOE DIRECTOR
12 SIMON CLAUDE ISRAEL DIRECTOR
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DR HU TSU TAU
CHAIRMAN
Dr Hu Tsu Tau, an Independent Non-Executive Director, joined the CapitaLand Board on 13 April 2004 and was elected Chairman on the same day. He was last re-appointed as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He is also Chairman of CapitaLand’s Investment Committee.
Dr Hu is presently a Member of the Board of the Government of Singapore Investment Corporation Pte Ltd (GIC) and Chairman of Fullerton Financial Holdings Pte Ltd. He was Chairman of GIC Real Estate Pte Ltd.
From 1985 to 2001, Dr Hu was a Cabinet Minister whose portfolio included the Trade and Industry, Health and Finance ministries. Prior to his ministerial appointment, Dr Hu was Managing Director of the Monetary Authority of Singapore (MAS) and GIC from 1983 to 1984. Before his appointments in MAS and GIC, he was with the Shell Group of companies from 1960, and his last position in this global company was as Chairman and Chief Executive of the Shell Group of companies in Singapore.
Dr Hu is a graduate of the University of California, USA with a Bachelor of Science in Chemistry. He also holds a Postgraduate Diploma (Chemical Engineering) and a Doctorate in Chemical Engineering, both from the University of Birmingham, UK.
PETER SEAH LIM HUAT
DEPUTY CHAIRMAN
Mr Peter Seah, an Independent Non-Executive Director, joined the CapitaLand Board on 18 December 2001 and was appointed as Deputy Chairman on 1 January 2009. Mr Seah was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He is also Chairman of CapitaLand’s Finance and Budget Committee, Executive Resource and Compensation Committee and Nominating Committee.
Mr Seah is presently the Chairman of DBS Group Holdings Ltd and Singapore Technologies Engineering Ltd (both listed on the SGX-ST) and LaSalle Foundation Limited. He is also Deputy Chairman of Global Crossing Limited. Mr Seah is a Director of STATS ChipPAC Ltd, StarHub Ltd (both listed on the SGX-ST) and DBS Bank (HK) Limited. Mr Seah also sits on the Board of the Government of Singapore Investment Corporation Pte Ltd.
Mr Seah was President & CEO of Singapore Technologies Pte Ltd. Prior to the above appointment, Mr Seah was with Overseas Union Bank (OUB) from 1977 and became its President & CEO in 1991. Mr Seah retired as Vice Chairman and CEO from OUB on 30 September 2001. Mr Seah was also the Chairman of SembCorp Industries Ltd and Singapore Computer Systems Limited (both listed on the SGX-ST), President Commissioner of PT Indosat Tbk (listed on the Stock Exchange of Indonesia), and Director of Chartered Semiconductor Manufacturing Ltd (listed on the SGX-ST) and Siam Commercial Bank Public Company Limited (listed on the Stock Exchange of Thailand).
Mr Seah is a graduate of the University of Singapore with an Honours Degree in Business Administration.
LIEW MUN LEONG
PRESIDENT & CEO
Mr Liew Mun Leong is President and CEO of CapitaLand Group. He joined the Board of Pidemco Land as Director on 1 January 1997. Pidemco Land merged with DBS Land to form CapitaLand in November 2000. Mr Liew continued to serve on the CapitaLand Board and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He also serves as Member of CapitaLand’s Investment Committee, Nominating Committee, Corporate Disclosure Committee and Finance and Budget Committee.
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Mr Liew is Chairman of CapitaMalls Asia Limited (listed on the SGX-ST), CapitaLand Residential Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand Commercial Limited, CapitaLand Financial Limited, CapitaLand ILEC Pte. Ltd. and CapitaValue Homes Limited.
Mr Liew is Deputy Chairman of The Ascott Limited as well as the Deputy Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST), CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX- ST), CapitaRetail China Trust Management Limited (the manager of CapitaRetail China Trust listed on the SGX-ST) and Ascott Residence Trust Management Limited (the manager of Ascott Residence Trust listed on the SGX-ST). He is also a Director of CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm.
Mr Liew is presently Chairman of Changi Airport Group (Singapore) Pte Ltd. He is also Director of Singapore Exchange Limited (listed on the SGX-ST) and Singapore China Foundation Ltd.
He is a member of the NUS Business School Management Advisory Board, National Productivity and Continuing Education Council, Governing Council of the Human Capital Leadership Institute and the Board of Trustees of Chinese Development Assistance Council.
In 2006, Mr Liew was named Outstanding CEO of the Year in the Singapore Business Awards. In 2007, he was conferred the CEO of the Year award (for firms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2008, Mr Liew was named Asia’s Best Executive of 2008 (Singapore) by Asiamoney and Best CEO in Asia (Property) by Institutional Investor.
Mr Liew graduated from the University of Singapore with a Civil Engineering degree and is a registered professional civil engineer.
JACKSON PETER TAI
DIRECTOR
Mr Jackson Tai, an Independent Non-Executive Director, joined the CapitaLand Board on 20 November 2000 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 29 April 2008. He is a Member of CapitaLand’s Investment Committee and Finance and Budget Committee.
Mr Tai is a Director of NYSE Euronext and MasterCard Incorporated in the United States, and the Bank of China Limited in China. He has been nominated as a Director of Philips NV in the Netherlands. Most recently, he was a Supervisory Board Member of ING Groep NV in the Netherlands. He also serves as Non- Executive Chairman of a non-publicly listed company, Brookstone, Inc., in the United States.
Mr Tai was formerly the Vice Chairman and CEO of DBS Group Holdings Ltd (listed on the SGX-ST) and DBS Bank Ltd. Prior to joining DBS Bank Ltd, Mr Tai was a senior regional manager for J.P. Morgan & Co. Incorporated in New York, Tokyo, and San Francisco, and a Managing Director of the Investment Banking Division.
Mr Tai is a graduate of the Rensselaer Polytechnic Institute, USA with a Bachelor of Science in Management. He also holds a Master of Business Administration from Harvard University, USA.
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RICHARD EDWARD HALE
DIRECTOR
Mr Richard Hale, an Independent Non- Executive Director, joined the CapitaLand Board on 10 February 2003 and was last re-appointed as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He is also Chairman of CapitaLand’s Audit Committee and a Member of CapitaLand’s Risk Committee.
Mr Hale is presently Chairman of CapitaCommercial Trust Management Limited (the manager of CapitaCommercial Trust listed on the SGX-ST). He is also Deputy Chairman of Sembcorp Marine Ltd and a Director of Sembcorp Industries Ltd (both listed on the SGX-ST). He is a Fellow of the Singapore Institute of Directors.
Mr Hale started his career with The Hongkong and Shanghai Banking Corporation Ltd in October 1958 and served in London, Paris, Hong Kong, Germany, Malaysia, Japan and Singapore before retiring from the Bank as CEO Singapore and Director in March 1995. From July 1995 to September 1997, he acted as advisor on environmental matters for HSBC Holdings plc London, based in Singapore. Mr Hale was Executive Chairman of SNP Corporation Ltd from April 1999 to April 2000, and also served as Chairman of the Singapore International Chamber of Commerce for 1993 and 1994. He was formerly a Governor of United World College of South East Asia, Singapore and a Director of The Ascott Group Limited (formerly listed on the SGX-ST and now known as The Ascott Limited), Wheelock Properties (Singapore) Limited (listed on the SGX-ST) and BW Trust Management Pte Ltd.
Mr Hale was educated at Radley College, Abingdon, UK. He is a Fellow of the Chartered Institute of Bankers, London.
JAMES KOH CHER SIANG
DIRECTOR
Mr James Koh, an Independent Non-Executive Director, joined the CapitaLand Board on 1 July 2005 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is Chairman of CapitaLand’s Risk Committee and Corporate Disclosure Committee; and a Member of CapitaLand’s Audit Committee.
Mr Koh is Chairman of CapitaMall Trust Management Limited (the manager of CapitaMall Trust listed on the SGX-ST) and Chairman of its Investment Committee and Corporate Disclosure Committee. He is also a Director of CapitaLand Hope Foundation, the CapitaLand Group’s philanthropic arm.
Mr Koh is presently Chairman of Housing & Development Board, Singapore Deposit Insurance Corporation Limited, MechanoBiology Institute and Singapore Island Country Club. He sits on the Boards of Singapore Airlines Limited, UOL Group Limited and Pan Pacific Hotels Group Limited (all listed on the SGX-ST). He is also a Director of Singapore Cooperation Enterprise.
From 1997 to 2005, Mr Koh served as CEO of the Inland Revenue Authority of Singapore. In that capacity, he was both Commissioner of Inland Revenue and Commissioner of Charities. Prior to these appointments, Mr Koh was the Permanent Secretary in the Ministries of National Development, Community Development and Education. Mr Koh has substantial experience in public administration having served in the Ministries of Finance, National Development, Community Development, Education and the Prime Minister’s Office. He was awarded the Public Administration Medal (Gold) in 1983 and the Meritorious Service Medal in 2002.
Mr Koh is a graduate of Oxford University, UK with a Bachelor of Arts (Honours) and a Master of Arts in Philosophy, Political Science and Economics. He also holds a Master in Public Administration from Harvard University, USA.
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MRS ARFAT PANNIR SELVAM
DIRECTOR
Mrs Arfat Selvam, an Independent Non- Executive Director, joined the CapitaLand Board on 2 January 2006 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 23 April 2009. She is a Member of CapitaLand’s Audit Committee, Corporate Disclosure Committee, Nominating Committee and Risk Committee.
Mrs Selvam is presently the Managing Director of Selvam LLC, a corporate finance law practice and its joint law venture, Duane Morris & Selvam LLP. With over 40 years in legal practice as a corporate finance lawyer, Mrs Selvam has been involved in some landmark Singapore acquisition transactions.
Mrs Selvam is also a Director of CapitaMalls Asia Limited, which is listed on SGX-ST. She was the President of the Law Society of Singapore in 2003. She was also a member of the Senate of the Academy of Law, the Board of Legal Education and the Board of the Accounting and Corporate Regulatory Authority (ACRA). She is a Fellow of the Singapore Institute of Directors. She is also a Director of Singapore Health Services Pte Ltd.
Mrs Selvam serves the community through her participation as a member of the Executive Committees of Breast Cancer Foundation, Rahmatan Lil’Alamin Foundation Ltd and President of the Muslim Financial Planning Association.
Mrs Selvam is a graduate of the University of Singapore and was admitted to practise as an Advocate & Solicitor of the Supreme Court of Singapore in 1969.
PROFESSOR KENNETH STUART COURTIS
DIRECTOR
Professor Kenneth Courtis, an Independent Non-Executive Director, joined the CapitaLand Board on 14 February 2007 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 23 April 2009. He is a Member of CapitaLand’s Finance and Budget Committee and Investment Committee.
Professor Courtis is Founding Chairman of Next Capital Partners. He was formerly Managing Director and Vice Chairman of Goldman Sachs Asia, Managing Director, Chief Economist and Strategist of Deutsche Bank Group Asia, and a Director of CNOOC Ltd, Hong Kong. He is presently a Director of Noble Group Limited (listed on the SGX-ST).
Professor Courtis is one of the world’s leading investment bankers and analysts of Asian economies. He has led a number of large, international corporate transactions centered on Asia, and pioneered a number of investment banking areas across the region. Widely sought after for his knowledge of how global market forces, financial and political developments, and corporate strategy interact, Professor Courtis advises major clients throughout the Asia Pacific region, as well as in Europe and North America.
Professor Courtis also works closely with central banks, ministries of finance, and heads of government throughout Asia, and has been called on several occasions to advise the President of the USA, and the heads of government of several countries in Europe, North America, Asia, and the Middle East.
Professor Courtis has lectured at Keio and Tokyo Universities, Japan’s two most prestigious educational institutions; l’Institut d’Etudes Politiques, Paris; and in universities in North America. He is a member of the boards, advisory councils, and trustee of a
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number of international firms, universities, and research institutes in Asia, Europe and North America.
Professor Courtis received his Bachelor degree from Glendon College in Toronto and a Master in International Relations from Sussex University in the UK. He received a Master of Business Administration from INSEAD (the European Institute of Business Administration), and a Doctorate with honours and high distinction, from l’Institut d’Etudes Politiques, Paris.
DR FU YUNING
DIRECTOR
Dr Fu Yuning, an Independent Non-Executive Director, joined the CapitaLand Board on 27 July 2009 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010.
Dr Fu is presently the Chairman of China Merchants Group Limited, China Merchants Holdings (International) (listed on the Hong Kong Stock Exchange), and China Merchants Bank Company Limited (listed on both the Hong Kong and Shanghai Stock Exchange). Dr Fu is also an Independent Non-Executive Director of Sino Land Company Limited (listed on the Hong Kong Stock Exchange). He was a Director of CapitaMalls Asia Limited (listed on the SGX-ST).
Dr Fu also holds directorship in some public associations such as General Committee Member of the Hong Kong General Chamber of Commerce and Member of the Advisory Committee of the Securities and Futures Commission, Hong Kong Special Administrative Region.
Dr Fu graduated from Dalian Institute of Technology in China with a degree in Port and Waterway Engineering and obtained his Ph.D. Degree in Mechanical Engineering from Brunel University in the UK, where he also worked as a Post-Doctorate research fellow briefly afterwards.
JOHN POWELL MORSCHEL
DIRECTOR
Mr John Morschel, an Independent Non- Executive Director, joined the CapitaLand Board on 1 February 2010 and was last re-elected as Director at CapitaLand’s Annual General Meeting on 16 April 2010. He is also a Member of CapitaLand’s Nominating Committee.
Mr Morschel is presently Chairman of Australia and New Zealand Banking Group Limited (listed on the Australian Securities Exchange and New Zealand Stock Exchange) and a Director of Tenix Group Pty Ltd and Giftard Communications Pty Ltd. Prior to his present appointment, he was an Executive Director and then Managing Director and CEO of Lend Lease Group LLC (listed on the Australian Securities Exchange). Mr Morschel was Chairman of Comalco Ltd, CSR Limited, Leighton Holdings Limited and Rinker Group Limited. He was also a Director of Westpac Banking Corporation, Gifford Communications Pty Ltd, Rio Tinto plc, Rio Tinto Limited and Singapore Telecommunications Limited (listed on the SGX-ST).
Mr Morschel holds a Diploma in Quantity Surveying from The University of New South Wales. He is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Institute of Management.
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NG KEE CHOE
DIRECTOR
Mr Ng Kee Choe, an Independent Non-Executive Director, joined the CapitaLand Board on 16 April 2010. He is also a Member of CapitaLand’s Executive Resource and Compensation Committee.
Mr Ng is presently Chairman of Singapore Power Ltd, SP AusNet (listed on the SGX-ST) and NTUC Income Insurance Co-Operative Ltd and President-Commissioner of PT Bank Danamon Indonesia Tbk (listed on the Indonesia Stock Exchange). Mr Ng is a member of Temasek Advisory Panel and International Advisory Council of China Development Bank. In addition, he is also a Director of Singapore Exchange Limited and Singapore Airport Terminal Services Limited (both listed on the SGX-ST).
Mr Ng was the Vice-Chairman of DBS Group Holdings Ltd ("DBS"). He retired from his executive position in July 2003 after 33 years of service with DBS. For his contributions to public service, Mr Ng was awarded the Public Service Star award in 2001.
Mr Ng is a graduate of the University of Singapore with a Bachelor of Science (Honours) Degree.
SIMON CLAUDE ISRAEL
DIRECTOR
Mr Simon Claude Israel, a Non-Independent Non-Executive Director, joined the CapitaLand Board on 1 July 2010. He is a Member of CapitaLand’s Investment Committee, Executive Resource and Compensation Committee and Nominating Committee.
Mr Israel is presently an Executive Director of Temasek Holdings (Private) Limited, the Singapore-headquartered investment firm, since July 2006. He is Chairman of Asia Pacific Breweries Ltd (listed on the SGX-ST), Asia Pacific Breweries Foundation and SingTel Innov8 Pte Ltd. He is also a Director of Neptune Orient Lines Limited and Singapore Telecommunications Limited (both listed on the SGX-ST).
Mr Israel was Chairman of Asia Pacific of the Danone Group. Prior to this, he worked across the Asia Pacific region in a 22-year career with Sara Lee Corporation. He stepped down as Chairman of Singapore Tourism Board on 31 December 2010 and was also a Director of Fraser and Neave Limited (listed on the SGX-ST).
Mr Israel holds a Diploma in Business Studies from The University of the South Pacific.
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COUNCIL OF CEOS
1 LIEW MUN LEONG PRESIDENT & CEO
CAPITALAND GROUP
2 JENNIE CHUA CHIEF CORPORATE OFFICER
CAPITALAND LIMITED
3 LIM MING YAN CEO THE ASCOTT LIMITED
4 WEN KHAI MENG CHIEF INVESTMENT OFFICER CAPITALAND LIMITED
CEO
CAPITALAND FINANCIAL LIMITED
5 OLIVIER LIM GROUP CHIEF FINANCIAL OFFICER CAPITALAND LIMITED
6 WONG HEANG FINE CEO CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
CEO CAPITALAND ILEC PTE. LTD.
7 JASON LEOW CEO CAPITALAND CHINA HOLDINGS PTE LTD
8 LIM BENG CHEE CEO CAPITAMALLS ASIA LIMITED
9 CHONG LIT CHEONG CEO CAPITALAND COMMERCIAL LIMITED (FROM 10 FEBRUARY 2011)
10 EE CHEE HONG CEO CAPITALAND COMMERCIAL LIMITED (ON SABBATICAL FROM JANUARY 2011)
11 CHEN LIAN PANG CEO CAPITAVALUE HOMES LIMITED
12 BOB JOHNSTON MANAGING DIRECTOR & CEO AUSTRALAND PROPERTY GROUP
13 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
14 SIMON HO CEO CAPITAMALL TRUST MANAGEMENT LIMITED
15 CHONG KEE HIONG CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED
16 TONY TAN TEE HIEONG CEO CAPITARETAIL CHINA TRUST MANAGEMENT LIMITED
17 CHAN SAY YEONG CEO QUILL CAPITA MANAGEMENT SDN. BHD.
18 SHARON LIM HWEE LI CEO CAPITAMALLS MALAYSIA REIT MANAGEMENT SDN. BHD.
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LIEW MUN LEONG
PRESIDENT & CEO, CAPITALAND GROUP
Mr Liew Mun Leong is President and CEO of CapitaLand Group. Mr Liew is Chairman of CapitaMalls Asia Limited, CapitaLand Residential Singapore Pte Ltd, CapitaLand China Holdings Pte Ltd, CapitaLand Commercial Limited, CapitaLand Financial Limited, CapitaLand ILEC Pte. Ltd. and CapitaValue Homes Limited. He is Deputy Chairman of The Ascott Limited as well as the Deputy Chairman of CapitaMall Trust Management Limited, CapitaCommercial Trust Management Limited, CapitaRetail China Trust Management Limited and Ascott Residence Trust Management Limited.
Mr Liew is also Chairman of CapitaLand China Executive Committee and CapitaLand Vietnam Executive Committee. The committees co-ordinate and align CapitaLand’s investments, operations, branding and resources in China and Vietnam respectively. He is also a Director of CapitaLand Hope Foundation, the Group’s philanthropic arm.
Mr Liew is presently Chairman of Changi Airport Group (Singapore) Pte Ltd. He is also Director of Singapore Exchange Limited (listed on the SGX-ST) and Singapore China Foundation Ltd.
In 2006, Mr Liew was named Outstanding CEO of the Year in the Singapore Business Awards. In 2007, he was conferred the CEO of the Year award (for firms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. In 2008, Mr Liew was named Asia’s Best Executive of 2008 (Singapore) by Asiamoney and Best CEO in Asia (Property) by Institutional Investor.
Mr Liew graduated from the University of Singapore with a Civil Engineering degree and is a registered professional civil engineer.
JENNIE CHUA
CHIEF CORPORATE OFFICER, CAPITALAND LIMITED
Ms Jennie Chua is the Chief Corporate Officer of CapitaLand Limited. She is a board member of CapitaMalls Asia Limited, CapitaValue Homes Limited, CapitaLand ILEC Pte. Ltd., The Ascott Limited and Ascott Residence Trust Management Limited.
She is Chairman of Singapore International Chamber of Commerce, Alexandra Health/Khoo Teck Puat Hospital, Community Chest of Singapore, Sentosa Cove, Singapore Film Commission, International Advisory Council for Tourism, Tourism Industry Skills & Training Council and The Arts House. She is Deputy Chairman of Temasek Foundation.
Ms Chua is a member of Singapore’s Pro-Enterprise Panel and a Board Director of Ministry of Health Holdings Pte Ltd and NYU Tisch School of the Arts, Asia Ltd.
She is on the Board of Trustees of Nanyang Technological University, Singapore.
Ms Chua is a Justice of Peace and Singapore’s Non-Resident Ambassador to The Slovak Republic.
Awards and accolades which she has received include three Singapore National Day Awards, Outstanding Contribution to Tourism Award 2006, Women’s World Excellence Awards 2006, Travel Personality of the Year Award 2005, NTUC Medal of Commendation 2005, 25 Stars of Asia Award 2003, Person of the Year – Asia Pacific (Hotel) 2002, National Productivity 2002, Pacific Area Travel Writers Association Hall of Fame 2000, Hotelier of the Year 1999, Woman of the Year 1999, Champion of the Arts 1999 and Independent Hotelier of the World 1997.
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LIM MING YAN
CEO, THE ASCOTT LIMITED
Mr Lim Ming Yan is the CEO of The Ascott Limited. He is concurrently Deputy Chairman of CapitaLand China Executive Committee. Prior to joining Ascott, Mr Lim was CEO of CapitaLand China Holdings Pte Ltd, responsible for growing CapitaLand into a leading foreign real estate developer in China.
Mr Lim was conferred the prestigious Magnolia Award by the Shanghai Municipal Government in 2003 and 2005 for his significant contributions to Shanghai. He was named Outstanding Chief Executive (Overseas) at the Singapore Business Awards in 2006.
Mr Lim graduated from the University of Birmingham, UK, with a Bachelor of Science (First Class Honours) in Mechanical Engineering and Economics.
WEN KHAI MENG
CHIEF INVESTMENT OFFICER, CAPITALAND LIMITED
CEO, CAPITALAND FINANCIAL LIMITED
Mr Wen Khai Meng is the Chief Investment Officer of CapitaLand Limited. He is concurrently the CEO of CapitaLand Financial Limited. He is also a Non-Executive Director of CapitaCommercial Trust Management Limited, Ascott Residence Trust Management Limited and Quill Capita Management Sdn. Bhd.
Prior to this, Mr Wen has held several senior appointments within the Group including CEO of CapitaLand Commercial Limited and Deputy Chief Financial Officer of CapitaLand Limited. Before joining the Group, Mr Wen was with the Ministry of National Development.
Mr Wen holds a Master of Business Administration and a Master of Science in Construction Engineering from the National University of Singapore, as well as a Bachelor of Engineering (First Class Honours) from the University of Auckland, New Zealand.
OLIVIER LIM
GROUP CHIEF FINANCIAL OFFICER,
CAPITALAND LIMITED
Mr Olivier Lim is the Group Chief Financial Officer of CapitaLand Limited. He is a Non- Executive Director of CapitaMalls Asia Limited, CapitaMall Trust Management Limited, CapitaCommercial Trust Management Limited, Australand Holdings Limited and Raffles Medical Group Ltd. He is also Chairman of Mount Faber Leisure Group Pte Ltd, and a member of the Board of both Sentosa Development Corporation and the Accounting and Corporate Regulatory Authority.
Prior to joining CapitaLand Limited, he was Director and Head of the Real Estate Unit, Corporate Banking in Citibank Singapore. He has more than 20 years of work experience in diverse areas including corporate banking, investment banking, corporate finance and real estate financial products.
Mr Lim was named Chief Financial Officer of the Year in 2007 (for firms with market value of S$500 million or more) in The Business Times’ Singapore Corporate Awards. He was awarded Best Investor Relations by a CFO by IR Magazine in its South East Asia Awards in 2009 and 2010, and was named CFO of the Year by The Asset magazine in its 2010 Asian Awards.
Mr Lim holds a First Class Honours degree in Civil Engineering from the Imperial College of Science, Technology and Medicine, United Kingdom.
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WONG HEANG FINE
CEO, CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
CEO, CAPITALAND ILEC PTE. LTD.
Mr Wong Heang Fine is the CEO of CapitaLand Residential Singapore Pte Ltd and the CEO of CapitaLand ILEC Pte. Ltd. He is also in charge of CapitaLand’s business in the Gulf Cooperation Council (GCC) region. In 2011, Mr Wong was appointed President of the Real Estate Developers’ Association of Singapore (REDAS).
Prior to joining CapitaLand, Mr Wong was President & CEO of Sembcorp Engineers and Constructors, the largest engineering and construction company in Southeast Asia. He also has varied experience in the leisure and entertainment industries.
Mr Wong holds a Master of Science in Engineering Production & Management from the University of Birmingham, UK and a Bachelor of Science in Mechanical Engineering (First Class Honours) from the University of Leeds, UK.
JASON LEOW
CEO, CAPITALAND CHINA HOLDINGS PTE LTD
Mr Jason Leow is the CEO of CapitaLand China Holdings Pte Ltd.
Mr Leow has been with the CapitaLand Group from 1994 and has over 16 years of experience in China. He has held several appointments within the CapitaLand Group, including Deputy CEO of CapitaLand China Holdings.
Prior to joining the CapitaLand Group, he was a senior financial analyst at ST Aerospace Ltd and also spent three years at DBS Finance Ltd.
Mr Leow is a Certified Public Accountant and a member of the Institute of Certified Public Accountants of Singapore. He obtained an Executive Master in Business Administration degree from Fudan University and also attended the Advanced Management Program at Harvard Business School in 2007.
CHONG LIT CHEONG
CEO, CAPITALAND COMMERCIAL LIMITED
(FROM 10 FEBRUARY 2011)
Mr Chong Lit Cheong is the CEO of CapitaLand Commercial Limited.
Prior to joining the Group, Mr Chong was the CEO of International Enterprise Singapore, an agency under Singapore’s Ministry of Trade and Industry which promotes the overseas growth of Singapore-based enterprises and international trade. Prior to that, he was the CEO of JTC Corporation and Managing Director of National Science and Technology Board (now called A*STAR). Earlier, he served in Singapore’s Economic Development Board where he was posted to Suzhou, China, to lead the development of the China-Singapore Suzhou Industrial Park project.
Mr Chong is a Mombusho (Colombo Plan) Scholar and holds a Bachelor of Engineering (Electronics) from the University of Tokyo. He also completed an Advanced Management Programme at INSEAD in France in 1994 and the Tsinghua Executive Program in Shanghai, China, in 2004.
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EE CHEE HONG
CEO, CAPITALAND COMMERCIAL LIMITED
(ON SABBATICAL FROM JANUARY 2011)
Mr Ee Chee Hong is the Managing Director of Strategic Corporate Development of CapitaLand Limited. Mr Ee is also the Non-Executive Director of CapitaCommercial Trust Management Limited and an Alternate Director of Quill Capita Management Sdn. Bhd. Mr Ee is currently on sabbatical leave from January 2011.
Mr Ee Chee Hong was the CEO of CapitaLand Commercial Limited. He was also a board member of Australand Holdings Limited and United Malayan Land Bhd (listed on the Bursa Malaysia Securities Berhad).
Earlier, Mr Ee has held various positions within the Group including Managing Director of Financial Structuring Support for CapitaLand Financial Limited, CEO (China) for The Ascott Limited and CEO of Ascott Serviced Residence (China) Fund Management Limited. Prior to joining the Group, he held senior positions at the Singapore Embassy in Japan and Singapore’s Economic Development Board.
Mr Ee holds a Master degree in Engineering from the Graduate School of Tokyo Institute of Technology. He attended the Advanced Management Program at Harvard Business School in 2007.
LIM BENG CHEE
CEO, CAPITAMALLS ASIA LIMITED
Mr Lim Beng Chee is the CEO and Executive Director of CapitaMalls Asia Limited (CMA). He has more than 10 years of real estate investment and asset management experience.
Mr Lim previously held various positions within the CapitaLand Group of companies, including CEO of CapitaMall Trust Management Limited and CapitaRetail China Trust Management Limited and Deputy CEO of CMA. He played an instrumental role in the creation of CMA’s retail real estate funds and the creation and listing of CapitaRetail China Trust and CapitaMalls Malaysia Trust.
Mr Lim holds a Master of Business Administration (Accountancy) from the Nanyang Technological University of Singapore and a Bachelor of Arts in Physics (Honours) from the University of Oxford, UK.
CHEN LIAN PANG
CEO, CAPITAVALUE HOMES LIMITED
Mr Chen Lian Pang is the CEO of CapitaValue Homes Limited, CapitaLand’s new business unit that focuses on developing affordable homes in Asia.
Prior to this, Mr Chen has held various positions within the Group responsible for the company’s operations in Southeast Asia. He has more than 20 years of construction and real estate experience in both Singapore and overseas.
Mr Chen holds a Master of Science in Civil Engineering from the National University of Singapore and a Bachelor of Science in Civil Engineering (First Class Honours) from the University of Cardiff, UK. He completed the General Management Program at Harvard Business School in 2000. He is also a registered professional engineer.
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BOB JOHNSTON
MANAGING DIRECTOR AND CEO,
AUSTRALAND PROPERTY GROUP
Mr Bob Johnston is the Managing Director and CEO of Australand Property Group. He joined Australand in August 2007 and has in excess of 20 years of experience in the property industry.
Prior to joining Australand, Mr Johnston held a number of senior management positions with the Lend Lease Group in the USA, UK, Asia and Australia. Immediately prior to his appointment to Australand, Mr Johnston was Global CEO of Bovis Lend Lease. Positions held prior to this included CEO of Bovis Lend Lease Asia Pacific and COO of Lend Lease Real Estate Investments in the USA.
Mr Johnston holds a First Class Honours degree in Electrical Engineering from James Cook University, Australia.
LYNETTE LEONG
CEO, CAPITACOMMERCIAL TRUST
MANAGEMENT LIMITED
Ms Lynette Leong is the CEO and Executive Director of CapitaCommercial Trust Management Limited (CCTML).
Ms Leong has more than 20 years of international experience, including banking and finance with Standard Chartered Bank and United Malayan Banking Corporation Berhad in Singapore and Malaysia, and real estate fund management in the London, New York, Chicago and Asian offices of LaSalle Investment Management. Prior to joining CCTML, Ms Leong was the CEO of Ascendas’ South Korea office where she had spearheaded
Ascendas’ strong foothold in the country’s real estate market, including the acquisition of office and logistics properties and the establishment of its first real estate fund.
Ms Leong holds a Master of Science in Real Estate and a Bachelor of Science degree in Estate Management from the National University of Singapore.
SIMON HO
CEO, CAPITAMALL TRUST MANAGEMENT LIMITED
Mr Simon Ho is the CEO and Executive Director of CapitaMall Trust Management Limited. He was previously the Deputy CEO of CapitaMalls Asia Limited (CMA).
Mr Ho has more than 20 years of experience in real estate investment and management and was responsible for managing the operations of 18 shopping malls in Singapore as well as the operations of CMA’s regional shopping mall portfolio in China, Malaysia, Japan and India.
Mr Ho holds a Master of Science in Real Estate and a Bachelor of Science in Estate Management (Honours) from the National University of Singapore.
CHONG KEE HIONG
CEO, ASCOTT RESIDENCE TRUST
MANAGEMENT LIMITED
Mr Chong Kee Hiong is the CEO and Executive Director of Ascott Residence Trust Management Limited. He was also the Deputy CEO, Finance & Investment for The Ascott Limited from 2004 to March 2010. Before joining Ascott, Mr Chong was the Chief Financial Officer of Raffles Holdings Limited.
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Mr Chong sits on the Audit Committee of Sentosa Development Corporation and is the Treasurer and General Committee member of the Orchid Country Club.
Mr Chong holds a Bachelor of Accountancy degree from the National University of Singapore and is a member of the Institute of Certified Public Accountants of Singapore. He completed Harvard Business School’s Advanced Management Program in 2008.
TONY TAN TEE HIEONG
CEO, CAPITARETAIL CHINA TRUST
MANAGEMENT LIMITED
Mr Tony Tan Tee Hieong is the CEO and Executive Director of CapitaRetail China Trust Management Limited (CRCTML).
Mr Tan has over 18 years of experience in international treasury, finance and risk management. Prior to joining CRCTML, Mr Tan was with IKEA for more than nine years, where he held positions as Treasurer and Finance Manager for Asia Pacific region. During those tenures, he also concurrently sat on IKEA’s finance committee for Asia Pacific that oversaw the group’s strategic finance and tax matters. His other experiences prior to joining IKEA include Treasury Accountant for Wearnes International, the trading and distribution arm of WBLand and various trading positions with international banks.
Mr Tan holds a Master of Business Administration (Distinction) from the University of Manchester, United Kingdom, and a Bachelor of Accountancy degree from the National University of Singapore.
CHAN SAY YEONG
CEO, QUILL CAPITA MANAGEMENT SDN. BHD.
Mr Chan Say Yeong is the CEO and Executive Director of Quill Capita Management Sdn. Bhd., the manager of Quill Capita Trust, CapitaLand’s first overseas REIT which is listed on Bursa Malaysia Securities Berhad.
Prior to this, Mr Chan held the position of Managing Director of CapitaLand Financial Limited based in Malaysia. He was also a board member of United Malayan Land Bhd.
Mr Chan holds a Bachelor of Accountancy from the National University of Singapore. He has completed the Executive Development Program by The Wharton School of the University of Pennsylvania, US.
SHARON LIM HWEE LI
CEO, CAPITAMALLS MALAYSIA REIT
MANAGEMENT SDN. BHD.
Ms Sharon Lim Hwee Li is the CEO and Executive Director of CapitaMalls Malaysia REIT Management Sdn. Bhd., the manager of CapitaMalls Malaysia Trust. Ms Lim has experience in property investment, asset management and marketing in various property sectors.
Prior to her current position, Ms Lim was Country Head for CapitaMalls Asia Limited’s (CMA) operations in Malaysia, and was instrumental in establishing CMA’s retail platform in Malaysia.
She holds a Master of Business Administration from Murdoch University, Australia and a Bachelor of Business (Distinction) from the Royal Melbourne Institute of Technology, Australia.
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CORPORATE OFFICE
1 LIEW MUN LEONG PRESIDENT & CEO
2 JENNIE CHUA CHIEF CORPORATE OFFICER
3 LIM MING YAN CEO THE ASCOTT LIMITED
4 WEN KHAI MENG CHIEF INVESTMENT OFFICER
5 OLIVIER LIM GROUP CHIEF FINANCIAL OFFICER
6 TAN SENG CHAI CHIEF HUMAN RESOURCE OFFICER
7 ANTHONY SEAH CHIEF OF TECHNICAL SERVICES
8 POON HIN KONG CHIEF OF DESIGN REVIEW UNIT
9 LEONG SOON PENG CHIEF TECHNOLOGY OFFICER
10 BASSKARAN NAIR SENIOR VICE PRESIDENT CORPORATE MARKETING & COMMUNICATIONS
11 HAROLD WOO SENIOR VICE PRESIDENT INVESTOR RELATIONS
12 LOW SAI CHOY SENIOR VICE PRESIDENT LEGAL/COMPANY SECRETARY
13 HUBERT LADSTATTER SENIOR VICE PRESIDENT RISK MANAGEMENT
14 BELINDA GAN GROUP FINANCIAL CONTROLLER
15 LEOW SIEW BENG SENIOR VICE PRESIDENT HUMAN RESOURCE (ORGANISATIONAL DEVELOPMENT)
16 ANNA CHOO SENIOR VICE PRESIDENT TREASURY
17 TING TONG KOI SENIOR VICE PRESIDENT OPERATIONS COMPLIANCE UNIT
18 LIM SOO GEE VICE PRESIDENT SECURITY MANAGEMENT
NOT PHOTOGRAPHED
• EE CHEE HONG MANAGING DIRECTOR STRATEGIC CORPORATE DEVELOPMENT
• SHARON SNG SENIOR VICE PRESIDENT CORPORATE FINANCE
• BOAZ BOON SENIOR VICE PRESIDENT RESEARCH
• LEE TIONG PENG SENIOR VICE PRESIDENT CAPITALAND INSTITUTE OF MANAGEMENT AND BUSINESS
• MONICA CHIA SENIOR VICE PRESIDENT INTERNAL AUDIT
• CHYE MOI JUNE HEAD GROUP TAX
• ANDRE LIM VICE PRESIDENT CORPORATE PLANNING/ ECONOMICS UNIT
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AUSTRALIA
Adelaide Brisbane Hobart Melbourne Perth Sydney
CHINA
Anyang Beijing Changsha Chengdu Chongqing Dalian Deyang Dongguan Foshan Guangzhou Harbin Hangzhou Hong Kong Huhhot Kunshan Macau Maoming Mianyang Nanchang Ningbo Quanzhou
Rizhao Shanghai Shenyang Shenzhen Suzhou Tianjin Weifang Wuhan Wuhu Xi’an Xinxiang Yangzhou Yibin Yiyang Zhangzhou Zhanjiang Zhaoqing Zhengzhou Zibo
GEORGIA
Tbilisi
INDIA
Ahmedabad Bangalore Chennai Cochin Hyderabad Jalandhar
Mangalore Mumbai Mysore Nagpur Udaipur
INDONESIA
Bali Jakarta Surabaya
JAPAN
Chitose Eniwa Fukuoka Funabashi Hiroshima Kobe Kyoto Nagoya Osaka Saga Sapporo Sendai Tokyo
KAZAKHSTAN
Almaty
MALAYSIA
Cyberjaya Johor Kuala Lumpur Kuching Penang Selangor
PHILIPPINES
Manila
SINGAPORE
SOUTH
KOREA
Seoul
THAILAND
Bangkok Krabi Pattaya
VIETNAM
Danang Hai Phong Hanoi Ho Chi Minh City
ASIA PACIFIC
BELGIUM
Brussels
FRANCE
Aix-en- Provence Bordeaux Cannes
Ferney- Voltaire Fontainebleau Grenoble Lille Lyon Marseille Montpellier
Nice Paris Strasbourg Toulouse
GERMANY
Berlin Hamburg Munich
SPAIN
Barcelona
UNITED
KINGDOM
London
EUROPE
BAHRAIN
Manama QATAR
Doha UNITED ARAB
EMIRATES
Abu Dhabi Dubai
GULF COOPERATION COUNCIL (GCC) COUNTRIES
GLOBAL PRESENCE
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BELGIUM
SPAIN
FRANCE
GERMANY
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Presence in more than 110 cities in over 20 countries
Homes
Offices
Shopping Malls
Serviced Residences
Mixed Developments
Financial Services
Raffles City Developments
Multi-sector
Schools/Facilities
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VIETNAM THAILAND
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CHINA SOUTH KOREA
JAPAN
INDIA
KAZAKHSTAN
BAHRAIN
QATAR
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PERFORMANCE OVERVIEW
(1) Total assets excluding treasury cash
PERFORMANCE OVERVIEW
CapitaLand Group achieved a profit after tax and non-controlling interests of S$1.27 billion for FY2010; 21% higher than FY2009. This marks the fifth consecutive year that CapitaLand has delivered a net profit exceeding S$1 billion. The strong performance in FY2010 was attributable to higher profits from development projects in Singapore and Vietnam, fair value gains from the revaluation of the Group’s investment properties portfolio and lower impairment losses.
In 2010, the Group accomplished a number of achievements. We started the year with our biggest acquisition since formation - the purchase of Orient Overseas Development Limited (OODL) for S$3.1 billion. This acquisition enabled us to secure seven prime sites in Shanghai, Kunshan and Tianjin to further entrench our presence in China and increased China assets from 25% to 36% of total assets(1).
During the year, we also set up a new business unit, CapitaValue Homes, to focus on the growing affordable housing segments in China and Vietnam and to add another dimension to our residential business. In Singapore, we successfully bid for the Bedok Town Centre site which will be developed into a 500-unit residential development with a shopping mall. We also acquired the Storhub self-storage business.
As part of the Group’s strategy of achieving high capital productivity, the Group successfully listed CapitaMalls Malaysia Trust (CMMT) on the Bursa Malaysia Securities Berhad. CMMT owns three shopping malls in Malaysia and is the largest “pure-play” shopping mall Real Estate Investment Trust in Malaysia by market capitalisation and property value.
The Ascott Limited, our serviced residences arm, injected a portfolio of 28 stabilised serviced residences into Ascott Residence Trust (Ascott Reit). This successful capital recycling transaction has catapulted Ascott Reit to the sixth largest REIT listed in Singapore.
In December 2010, we divested an effective 58.1% stake in Raffles City Changning, our seventh Raffles City development in China, which gave us proceeds of approximately S$0.8 billion.
All these major recycling transactions have enabled the Group to continue investing in new investments throughout the year and yet close the year with a strong cash position of S$7.2 billion and a healthly net debt equity ratio of 0.18.
2010 REVENUE BY STRATEGIC BUSINESS UNIT
Total: S$3.38 billion
25.9% 24.8%
16.9%
9.9%11.9%
3.4%
7.2%
2009 REVENUE BY STRATEGIC BUSINESS UNIT
Total: S$2.96 billion
24.6% 22.6%
21.7%
4.9% 13.2%
5.4%
7.6%
CapitaLand Residential Singapore CapitaLand China Holdings CapitaLand Commercial The Ascott Limited CapitaLand Financial CapitaMalls Asia Australand
2010
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Financially, the Group has performed well in FY2010 with positive contributions from all our business units in the various sectors. This is in contrast to FY2009 where some of our business units suffered losses as a result of impairment losses on investments and fair value losses from the revaluation of investment properties.
CapitaLand Residential Singapore did well in 2010, having sold 800 units worth about S$1.85 billion despite the property cooling measures introduced in August 2010. In China, the Chinese government had also implemented several measures to curb speculation in the property market. However, CapitaLand China Holdings continued to achieve healthy sales for its projects, including the new projects launched in 2010. CapitaLand China Holdings sold a total of 2,920 homes in 2010. The Group’s two residential projects in Vietnam, The Vista and Mulberry Lane, continued to contribute positively through progressive revenue recognition. The pick-up in demand for office spaces and improved rental has enabled CapitaLand Commercial to recognise fair value gains from its portfolio of investment properties. At the same time, the newly acquired Storhub self-storage business had also contributed to CapitaLand Commercial’s results.
Ascott saw an improvement in its operations on the back of an increase in demand following a recovery in the general economic conditions. CapitaLand Financial, our financial services business unit, continued to enjoy a steady stream of recurrent fee income from the REITs and funds it manages.
The Group’s two listed subsidiaries, CapitaMalls Asia and Australand, also performed well in their respective business sectors in 2010. Both registered significant improvement in their reported results and contributions to the Group.
REVENUE
Revenue for FY2010 grew by 14% to S$3.38 billion on the back of strong sales and revenue contribution from our development projects in Singapore, Australia and Vietnam. The Group’s fee-based income for FY2010 was also higher with the increase coming mainly from property management fees and one-off acquisition and divestment fees. Rental income from our shopping mall and serviced residence businesses, however, saw a decrease following the capital recycling of four shopping malls and 28 serviced residences to our REITs.
In terms of geographic spread, revenue from our overseas operations constituted 65% or S$2.18 billion of the Group’s total revenue.
26.2%
2009 REVENUE BY GEOGRAPHICAL LOCATION
Total: S$2.96 billion
8.4% 33.1%
25.6%
5.5% 1.2%
2010 REVENUE BY GEOGRAPHICAL LOCATION
Total: S$3.38 billion
6.7%
8.6%
21.0%
27.1%
1.1%
35.5%
Singapore China (including Hong Kong and Macau) Australia Europe Asia (excluding Singapore and China) Others
2010
2009
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China and Australia continued to be the two most significant overseas contributors. Revenue contribution from our fourth core market, Vietnam, continued to grow in 2010, accounting for about 6% (2009: 1%) of the Group’s revenue.
Revenue from CapitaLand Residential Singapore increased by 25% to S$843.2 million, underpinned by progressive revenue recognition for The Interlace, The Wharf Residence and Latitude.
Revenue from CapitaLand China Holdings however saw a 11% decrease to S$573.5 million as most of the sales made in 2010 were from development projects held by associates and are not consolidated at the revenue line.
CapitaLand Commercial registered a strong growth of 133% in revenue to S$337.8 million on the back of higher revenue contribution from The Vista and Mulberry Lane projects in Vietnam, recognition of deferred income in respect of Citadines Mount Sophia as well as contribution from the self-storage business which was acquired in July 2010.
Revenue from Ascott grew by 3% to S$407.4 million as businesses across most of its serviced residences improved. This is despite the divestment of 28 serviced residence properties to Ascott Reit in October 2010.
Revenue for CapitaLand Financial fell by 28% year-on-year mainly due to lower fee-based income following the transfer of retail fund management companies to CapitaMalls Asia as part of a restructuring exercise prior to the listing of CapitaMalls Asia in November 2009. Excluding the effects of the transfer, revenue was higher by S$6.8 million due mainly to higher acquisition and divestment fees.
The fee income from the transferred retail fund management companies contributed to the increase in revenue for CapitaMalls Asia which rose by 7% from 2009. The higher fee-based income was however partially offset by lower rental income as Clarke Quay in Singapore and three shopping malls in Malaysia were injected into CapitaMall Trust and CapitaMalls Malaysia Trust respectively in July 2010.
Revenue from Australand grew by 20% on account of higher sales from development projects and rental income from investment properties, coupled with a favourable Australian dollar exchange rate against the Singapore dollar.
EARNINGS ANALYSIS
The Group reported earnings before interest and tax (EBIT) of S$2.38 billion for FY2010. This is a 54% increase over FY2009’s
2010 EBIT BY STRATEGIC BUSINESS UNIT
Total: S$2.38 billion
S$ million
0
100
200
300
400
500
600
700 682
2009 EBIT BY STRATEGIC BUSINESS UNIT
Total: S$1.55 billion
S$ million
-600
-400
-200
0
200
400
600
800
CapitaLand Residential Singapore CapitaLand China Holdings CapitaLand Commercial The Ascott Limited CapitaLand Financial CapitaMalls Asia Australand Others
352
264
173
103
472
312
26
372
551
31 98
449
786
(497)
(241)
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1(1) Excludes Singapore and China and includes projects in the Gulf Cooperation Council countries.
EBIT of S$1.55 billion. The strong performance in 2010 was largely driven by higher profits from development projects in Singapore and Vietnam, revaluation gains from the Group’s investment properties portfolio and lower impairment losses.
Geographically, overseas EBIT accounted for 60% of the Group’s total EBIT in FY2010, backed by strong contribution from our overseas operations in Australia, China, Other Asia(1) and Europe. In FY2009, overseas EBIT was relatively lower at 15% of total EBIT as Singapore EBIT was boosted by the gain from the public offering of 34.5% stake in CapitaMalls Asia.
EBIT from CapitaLand Residential Singapore declined marginally by 5% to S$351.5 million as FY2009’s EBIT included a share of fair value gain in respect of ION Orchard. Excluding this one-off gain in FY2009, EBIT for FY2010 improved by 17.1% on the back of higher revenue.
EBIT from CapitaLand China Holdings rose 24% to S$682.4 million in FY2010 on account of higher portfolio gains from divestments. In FY2010, CapitaLand China Holdings recorded significant gains mainly from the sale of a 58.1% effective share in Raffles City Changning as well as its 50% stake in a joint venture, Sichuan Zhixin CapitaLand Co., Ltd.
CapitaLand Commercial posted an EBIT of S$264.2 million in FY2010 as compared to a loss of S$497.4 million in FY2009. The turnaround in earnings was mainly attributable to fair value gains from the revaluation of investment properties vis a vis a loss in FY2009, lower impairment losses for its overseas investments, as well as the absence of additional provision for income support to CapitaCommercial Trust. In addition, higher development profits from the residential projects in Vietnam, namely, The Vista and Mulberry Lane, also contributed to the increase in earnings.
Ascott recorded an EBIT of S$173.0 million in FY2010 which was more than five times that of S$31.4 million recorded in FY2009. This strong performance was largely driven by higher portfolio gains mainly from the injection of 28 serviced residence properties into Ascott Reit and higher share of fair value gains from the revaluation of investment properties held by Ascott Reit.
Despite the transfer of retail fund management companies to CapitaMalls Asia, EBIT for CapitaLand Financial increased by 5% to S$103.0 million in FY2010 due to higher acquisition and divestment fees, higher portfolio gains from divestments, lower operating expenses and better performance from some funds.
2010 EBIT BY GEOGRAPHICAL LOCATION
Total: S$2.38 billion
S$ million
0
100
200
300
400
500
600
700
800
900
1000
2009 EBIT BY GEOGRAPHICAL LOCATION
Total: S$1.55 billion
S$ million
-400
-200
0
200
400
600
800
1000
1200
1400
Singapore China (including Hong Kong and Macau) Australia Europe Asia (excluding Singapore and China) Others
947
(243)
846
301
176
102
12
1,312
680
32
(219)
(13)
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Similarly, EBIT from CapitaMalls Asia of S$472.4 million was 5% higher than FY2009, mainly attributable to higher contribution from the fund management companies and ION Orchard, as well as higher fair value gains from investment properties, but partially offset by lower portfolio gains and higher operating expenses in FY2010.
Australand achieved an EBIT of S$311.9 million in FY2010 as compared to a loss of S$240.8 million in FY2009. This marked improvement was mainly attributable to fair value gains from the revaluation of investment properties in FY2010 as compared to a loss in FY2009 and the absence of provision for foreseeable losses for its development projects. Excluding the fair value changes and the foreseeable losses provision, operating profit for Australand increased by 6% over 2009.
Others comprised the corporate office and start-up businesses. EBIT in FY2009 was significantly higher as it included a gain from the public offering of CapitaMalls Asia shares. Excluding this gain in 2009, EBIT for FY2010 improved due to lower impairment losses and higher share of profit from Rihan Heights in Abu Dhabi.
DIVIDENDS
The Board of Directors is pleased to propose a first and final dividend of 6.0 cents per share in respect of the financial year ended 31 December 2010. This amounts to a payout of approximately S$255.7 million based on the number of issued shares as at 31 December 2010. The dividends are subject to the shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For FY2009, a first and final dividend of 5.5 cents per share and a special dividend of 5.0 cents per share were approved and paid. The said dividends of S$447.4 million were paid in May 2010.
ASSETS
The Group’s total assets as at 31 December 2010 totalled S$31.7 billion, an increase of S$1.5 billion, or 5%, from the total assets as at 31 December 2009 of S$30.2 billion. The increase was mainly due to the acquisition of new investments, in particular, OODL and fair value gains from the revaluation of the Group’s investment properties portfolio. The increase was partially offset by the divestment of four shopping malls and 28 serviced residences to our REITs.
2010 TOTAL ASSETS BY CATEGORY
Total: S$31.7 billion
2.7% 14.9%
31.9%
17.1%
3.3%
22.7%
7.4%
2010 TOTAL ASSETS BY GEOGRAPHICAL LOCATION
Total: S$31.7 billion
15.6%
1.3%
43.8%
31.8%
7.3% 0.2%
Singapore China (including Hong Kong and Macau) Australia Europe Asia (excluding Singapore and China) Others
Investment Properties Interest in Associates and Joint Ventures Development Properties for Sale and Stock Properties, Plant and Equipment Cash and Cash Equivalents Other Non-Current Assets Other Current Assets
2010
2010
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BORROWINGS
As at 31 December 2010, the Group’s gross debts stood at S$10.4 billion. At the same time, the Group also had a cash balance of S$7.2 billion. The Group’s net debt as at 31 December 2010 was S$3.2 billion as compared to S$1.6 billion as at end 2009. The net debt as at 31 December 2009 was significantly reduced by a higher cash balance which was in turn boosted by the proceeds from the public offering of CapitaMalls Asia shares.
The Group’s net debt equity ratio remained healthy at 0.18 as at 31 December 2010 (2009: 0.09).
SHAREHOLDERS’ EQUITY
As at 31 December 2010, issued and paid-up ordinary share capital of the Company comprised 4.26 billion shares at S$6.3 billion. The Group’s total reserves increased from S$7.2 billion in December 2009 to S$7.9 billion in December 2010. This increase was mainly contributed by the S$1.27 billion net profit for the year, partially offset by the payment of the 2009 dividends and exchange differences arising from the translation of foreign operations. The shareholders’ funds as at end 2010 was S$14.2 billion compared to S$13.4 billion in 2009. With a higher equity, the Group’s net tangible assets per share increased 6% to S$3.22 as at 31 December 2010.
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TREASURY HIGHLIGHTS 2010 2009
Bank Facilities And Available Funds
Bank facilities available (S$m) 7,754 7,530
Amount utilised for loans (S$m) 4,651 4,982
Available and unutilised (S$m) 3,103 2,548
Cash and fixed deposit balances (S$m) 7,190 8,730
Unutilised facilities and funds available for use (S$m) 10,293 11,278
Debt Securities Capacity
Debt securities capacity (S$m) 9,807 8,338
Debt securities issued (net of debt securities purchased) (S$m) 5,707 5,331
Unused debt securities capacity (S$m) 4,100 3,007
Interest Cover Ratio
Earnings before net interest, tax, depreciation and amortisation (S$m) 2,556 1,714
Net interest expense (S$m) 365 377
Interest cover ratio (times) 7.00 4.54
Interest Service Ratio
Operating cashflow before interest and tax (S$m) 1,763 2,074
Net interest paid (S$m) 393 451
Interest service ratio (times) 4.49 4.60
Secured Debt Ratio
Secured debt (S$m) 1,616 2,761
Percentage of secured debt 16% 27%
Debt Equity Ratio
Gross debt (S$m) 10,358 10,313
Cash and fixed deposit balances (S$m) 7,190 8,730
Net debt (S$m) 3,168 1,583
Equity (S$m) 18,017 16,880
Net debt equity ratio (times) 0.18 0.09
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SOURCES OF FUNDING
S$ billion
0
2
4
6
8
10
12
33%
67%
42%
58%
53%
47%
52%
48%
55%
45%
2006 2007 2008 2009 2010
Bank and Other Loans Debt Securities
COMMITMENT OF FUNDING
S$ billion
0
2
4
6
8
10
12
10%
90%
6%
94%
3%
97% 100%
1%
99%
2006 2007 2008 2009 2010
Committed Uncommitted
$8.1b
$9.9b $9.8b $10.3b$10.4b
$8.1b
$9.9b $9.8b $10.3b $10.4b
MANAGEMENT AND SOURCES OF FUNDING
The Group strives to maintain a prudent financial structure and actively reviews its cashflow, debt maturity profile and overall liquidity position on an ongoing basis to support the dynamic nature of its businesses. The main sources of the Group’s operating cashflow are derived from residential sales, fee and rental income. As part of its liquidity management to support its funding requirements, investment needs and its growth plans, the Group diversifies its funding sources through a mix of undrawn banking facilities and capital market programmes to facilitate fund raising at opportunistic windows.
Global financial outlook has improved but risks remain. Against this backdrop, the Group continues to maintain strong cash reserves of S$7.2 billion compared to S$8.7 billion last year. The difference was mainly attributed to the increase in acquisition of China property portfolio and repayment of its debts in 2010.
The Group’s total gross debt of S$10.4 billion was marginally higher as compared to S$10.3 billion last year. Net debt as at December 2009 was significantly lower as the cash balance was higher due to proceeds from the public offering of CapitaMalls Asia Limited. The low net debt equity ratio of 0.18 puts the Group in a strong financial position and with the robust balance, it is well positioned to invest in future growth.
Finance cost for the Group was S$448.2 million for the year ended 2010. This was about 1.26% lower compared to S$453.9 million last year. The lower finance costs was due to lower interest rates as a result of various worldwide government policy measures to ease tight credit conditions and stimulate lending and economic growth.
SOURCES OF FUNDING
As at year end, 55% of the Group’s total debt was funded from capital market bond issuances and the balance 45% was raised through bank borrowings. The Group continues to seek a diversified and balanced sources of funding for its loan portfolio so as to ensure financial flexibility and mitigate concentration risk. During the year, bank loans decreased by about S$331 million mainly as a result of repayment of bank borrowings. Higher composition of funding from capital markets was attributed to the Group opportunistically tapping the long dated bond market during second half of the year.
COMMITMENT OF FUNDING
As at end 2010, the Group is able to achieve 99% of its funding from committed facilities.
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As part of financial discipline, the Group constantly reviews its asset versus liability match to ensure that a prudent portion of committed funding is put in place to match the investments planned holding periods. Although global economic recovery is on track and there is general stability in the financial and capital markets, committed financing was secured whenever possible to support its committed investments and to ensure that the Group had sufficient financial capacity to support its operations and future growth plans.
MATURITY PROFILE
S$ billion % of Debt
Due within 1 year * 1.76 17
Between 1 & 2 years 1.72 17
Between 2 & 3 years 0.98 9
Between 3 & 4 years 0.64 6
Between 4 & 5 years 0.58 6
After 5 years 4.68 45
* Includes long term debt with remaining loan life of less than a year to maturity.
During the year, the Group has successfully raised several long dated capital market bond issuances of about S$700 million and this has enabled the Group to extend its average loan maturity profile to 3.7 years. It has prudently tapped the debt capital markets opportunistically for longer dated committed funding, ensuring financial discipline by maintaining a strong cash position of S$7.2 billion and unutilised bank lines of about S$3.1 billion. The prudent average loan maturity profile, strong cash position and healthy net debt equity ratio of 0.18 was a result of successful capital recycling strategy and focus on capital productivity by the Group.
In reviewing the maturity profile of its loan portfolio, the Group also took into account any divestment or investment plans, interest rate outlook and the prevailing credit market conditions.
AVAILABLE LINES BY NATIONALITY OF BANKS
The Group with operations spanning more than 110 cities in over 20 countries has built up an extensive and active relationship with a network of more than 30 banks of various nationalities. This has allowed the Group to tap on the strengths and support from the financial institutions in pursuing its strategic growth and presence globally, thus enhancing its competitiveness in core markets and enabling the Group to develop other markets where appropriate.
AVAILABLE LINES BY NATIONALITY OF BANKS
18%
35% 13%
15%
19%
Singapore Australia Europe Others Japan
2010
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INTEREST RATE PROFILE
The Group manages its finance cost by maintaining a prudent mix of fixed and floating rate borrowings. As at 31 December 2010, the fixed rate borrowings constituted 72% of the portfolio and the balance 28% were on floating rate basis. As finance cost formed an integral component of the Group’s operating costs, a higher percentage in fixed rate funding would offer protection against unexpected rise in interest rates. On balance, to capitalise on the current low interest rate environment and prepayment flexibility from operational cash surplus, the remaining portfolio was maintained on floating rate basis. In managing the interest rate profile, the Group takes into account the interest rate outlook on its loan portfolio, holding periods of its investment portfolio, certainty of its planned divestments and operating cashflow generated from residential sales.
INTEREST COVER RATIO AND INTEREST SERVICE RATIO
The Interest Cover Ratio (“ICR”) and Interest Service Ratio (“ISR”) was 7.00 and 4.49 respectively. ICR was higher at 7.00 compared to 4.54 last year, primarily due to higher profits from the development projects in Singapore and Vietnam, fair value gains from the revaluation of the Group’s investment properties portfolio and lower impairment charges. Net interest expense was lower for the year 2010 as a result of the low interest rate environment. ISR was marginally lower at 4.49 compared to 4.60 last year due to lower cashflow generated from operations as the Group had divested four shopping malls and 28 serviced residence properties to our REITs during the year.
PROFILE OF FIXED AND FLOATING RATE LOANS
S$ billion
0
2
4
6
8
10
12
26%
74%
25%
75%
25%
75%
34%
66%
28%
72%
2006 2007 2008 2009 2010
Fixed Floating
2006
Net Interest Expense Net Interest Paid
0
50
100
150
200
250
300
350
400
450
500
2007 2008 2009 2010
INTEREST COVER RATIO AND INTEREST SERVICE RATIO
S$ million Times
6
12
9
3
15
0
$8.1b
$9.9b $9.8b $10.3b $10.4b
$182m
$230m
$279m 8.97
6.19
3.86
4.60
4.49
9.73
13.64
5.50
4.54
7.00
Interest Cover Ratio Interest Service Ratio
$378m
$410m
$468m
$377m
$451m
$365m
$393m
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CORPORATE AWARDS CAPITALAND
• Grand Prix for Best Overall Investor Relations (Large Cap)
The IR Magazine South East Asia Awards 2010
• Best Investor Relations by a CFO – Mr Olivier Lim
The IR Magazine South East Asia Awards 2010
• Overall Best Company in Singapore for Corporate Governance
Asiamoney Corporate Governance Poll 2010
• Best for Disclosure and Transparency in Singapore
Asiamoney Corporate Governance Poll 2010
• Best for Investor Relations in Singapore
Asiamoney Corporate Governance Poll 2010
• Best Investor Relations Officer in Singapore – Mr Jonathan Kuah
Asiamoney Corporate Governance Poll 2010
• Best Developer Globally
Euromoney Real Estate Awards 2010
• Best Mixed-Use Developer Globally
Euromoney Real Estate Awards 2010
• Best Developer in Asia
Euromoney Real Estate Awards 2010
• Best Mixed-Use Developer in Asia
Euromoney Real Estate Awards 2010
• Best Developer in Singapore
Euromoney Real Estate Awards 2010
• Best Mixed-Use Developer in Singapore
Euromoney Real Estate Awards 2010
• Most Desired Company to Work For (Gen Y Category)
Peoplesearch.com Poll
• Most Transparent Company (Property Category)
SIAS Investors’ Choice Awards 2010
Securities Investors Association (Singapore)
• Dow Jones Sustainability Asia Pacific Index 2010/2011
SAM and Dow Jones Indexes
• Best Overall Managed Property Company in Asia
Euromoney Best Managed and Governed Companies – Asia Poll 2010
• Best Overall Managed Company in Singapore (2nd)
Euromoney Best Managed and Governed Companies – Asia Poll 2010
• Best Corporate Governance in Singapore (2nd)
Euromoney Best Managed and Governed Companies – Asia Poll 2010
• Best Financial Disclosure Procedure in Asia Pacific
World Finance Investor Relations Awards 2010
CAPITALAND
CHINA HOLDINGS
• 2010 Outstanding Corporate Citizen of China
China Committee of Corporate Citizenship and CCTV2
• Honorable Partner for Project Hope’s 20-Year Anniversary
China Youth Development Foundation
• Most Creative Idea for Earth Hour 2010
WWF (China)
• 2010 China’s Top In-house Legal Department
Asia Legal Business
CAPITALAND (VIETNAM)
HOLDINGS
• Saigon Times Top 40 – Green Values 2009
The Saigon Times
• Golden Dragon Award 2010 (High Quality Service)
Vietnam Economic Times
AWARDS & ACCOLADES
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In 2010, CapitaLand Group and its properties clinched
over 100 awards and accolades. Some of the awards
and accolades are listed below.
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CAPITAMALLS ASIA
• Best Retail Developer Globally
Euromoney Real Estate Awards 2010
• Best Retail Developer in Asia
Euromoney Real Estate Awards 2010
• Best Retail Developer in China
Euromoney Real Estate Awards 2010
• Best Retail Developer in Singapore
Euromoney Real Estate Awards 2010
• Most Transparent Company (New Issues) Runners-up
Securities Investors Association (Singapore)
• Top 10 Famous Retail Real Estate Developer in China
China Commercial Real Estate Association (CCREA)
• Golden Co-ordinates – Retail Real Estate Leader
Commerce Promoting Real Estate (CPRE)
THE ASCOTT LIMITED
• Best Serviced Apartment Company
Business Traveller UK Awards 2010
• Best Serviced Residence Brand in Asia-Pacific
Business Traveller Asia- Pacific Awards 2010
• Best Serviced Residence in Asia-Pacific
DestinAsian Readers’ Choice Awards 2010
• Best Serviced Residence Operator
TTG Travel Awards 2010
• Best Serviced Residence Operator in China
TTG China Travel Awards 2010
• Best Serviced Residence Brand in China
Business Traveller China Awards 2010
• Best Serviced Residence (Group)
TravelWeekly China Travel & Meetings Industry Awards 2010
• Best Serviced Residence Operator in China
The Centre of Asia Hotel Forum’s 5th China Starlight Awards 2010
• China’s Outstanding Serviced Apartment Brand
Hotel Industry Development Summit 2010
• Guide Award for Excellent Performance
Vietnam Economic Times & The Guide 2010
• Saigon Times Top 40 – Green Values 2009
The Saigon Times
CAPITACOMMERCIAL TRUST
• Best Mid-cap Company
Asia’s Best Managed Companies Poll 2010 FinanceAsia
RESIDENTIAL DEVELOPMENTS SINGAPORE
d’Leedon
• Green Mark GoldPLUS
BCA Awards 2010 Building and Construction Authority, Singapore
RiverEdge
• Construction Excellence Award
BCA Awards 2010 Building and Construction Authority, Singapore
The Interlace
• Green Mark GoldPLUS
BCA Awards 2010 Building and Construction Authority, Singapore
• Best Architecture (Multiple Units) Singapore
Asia Pacific Residential Property Awards 2010
Varsity Park Condominium
• Construction Excellence Award
BCA Awards 2010 Building and Construction Authority, Singapore
CHINA
Riverside Ville, Foshan
• Green Mark Award
BCA Awards 2010 Building and Construction Authority, Singapore
Summit Residences, Ningbo
• Habitat Award
Ningbo Construction Committee
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COMMERCIAL DEVELOPMENTS SINGAPORE
Six Battery Road
• Green Mark Platinum
BCA Awards 2010 Building and Construction Authority, Singapore
Capital Tower
• Green Mark Gold
BCA Awards 2010 Building and Construction Authority, Singapore
One George Street
• Green Mark Gold
BCA Awards 2010 Building and Construction Authority, Singapore
SHOPPING MALLS SINGAPORE
ION Orchard
• Gold Award New Media: Digital Marketing
International Council of Shopping Centers (ICSC) Asia 2010
• Best Shopping Experience 2010
Singapore Tourism Board
CHINA
Raffles City Beijing
• Most Popular Mall and Trendiest Shopping Mall of the Year (Female Shopper’s Choice)
The Beijing News
SERVICED RESIDENCES SINGAPORE
Ascott Raffles Place Singapore
• Best Serviced Residence in Asia-Pacific (1st)
Business Traveller Asia- Pacific Awards 2010
CHINA
Ascott Raffles City Beijing
• Best Serviced Residence in China
The Centre of Asia Hotel Forum’s 5th China Starlight Awards 2010
Ascott Huai Hai Road
Shanghai
• Best New Project of the Year
That's Shanghai’s Living in Shanghai Awards 2010
JAPAN
Citadines Shinjuku Tokyo
• Top 25 Hotels in Japan
TripAdvisor Travelers’ Choice 2010
MALAYSIA
Ascott Kuala Lumpur
• Best Serviced Residence (Excellence Award)
Expatriate Lifestyle Magazine’s The Best of Malaysia Awards 2010
SOUTH KOREA
Somerset Palace Seoul
• Best Brand - Serviced Residence
The Korea Herald Readers’ Best Brand Awards 2010
THAILAND
Ascott Sathorn Bangkok
• Best Serviced Residence in Asia-Pacific (2nd)
Business Traveller Asia- Pacific Awards 2010
INTEGRATED DEVELOPMENTS SINGAPORE
Raffles City Singapore
• Green Mark Gold
BCA Awards 2010 Building and Construction Authority, Singapore
CHINA
Raffles City Hangzhou
• Gold Level LEED-CS Pre-certification Leadership in Energy and Environmental Design Core & Shell (LEED-CS)
U.S. Green Building Council
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The total market capitalisation of the nine public listed entities in the Group,
net of common holdings, is S$29.1 billion as at 31 December 2010.
The Group manages S$50.6 billion of real estate assets.
REAL ESTATE
HOSPITALITY
FINANCIAL SERVICES
Offices
Shopping Malls
Residential Singapore
Value Housing
China
Australia
Serviced Residences
Financial Services
Non-Retail Fund & REIT Management
Denotes listed entities
Denotes entities under the management of CapitaLand China Executive Committee
GROUP BUSINESSES
* New Australand logo launched on 15 March 2011
*
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CAPITALAND RESIDENTIAL SINGAPORE D’LEEDON
SINGAPORE
A brisk pace was set in Singapore’s residential market in 2010. Home sales reached a new high, surpassing both 2009 and the 2007 market peak. Government measures, intended to reduce speculation and encourage financial prudence, ensured a stable and sustainable property market.
DEVELOPING LANDMARK HOMES
CapitaLand turned in a stellar performance. It launched several projects designed by international architects which were well- received by both local and international homebuyers and investors. A total of 800 homes were sold in the year with sales value amounting to S$1.85 billion.
The Interlace’s unconventional design by internationally renowned Office for Metropolitan Architecture continued to draw homebuyers. The 1,040-unit condominium, located at the Southern Ridges of Singapore, saw strong phase two sales.
Initial sales commenced for d’Leedon. The 1,715-unit development enjoys a coveted District 10 address and an iconic design by Pritzker Architecture Prize winner Zaha Hadid.
CapitaLand launched the 165-unit Urban Suites and the development has been substantially sold. Preview sales also
A total of 800 homes were
sold in the year with
sales value amounting
to S$1.85 billion
S$1.85b
Home sales in
Singapore reached a
new high, surpassing
both 2009 and the 2007
market peak
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started for the 64-unit Urban Resort Condominium in the year. Both projects are designed by Kerry Hill Architects and located at Cairnhill in the Orchard Road shopping district.
Temporary Occupation Permit was obtained for The Seafront on Meyer, Latitude and The Orchard Residences.
CapitaLand continued to replenish its development pipeline. It secured a prime site in the Bedok Town Centre, and will build an integrated development comprising about 500 apartments above a shopping mall.
LOOKING AHEAD
Strong fundamentals, including a rosy economic outlook, low interest rates and ample liquidity in Asia, will sustain optimism and confidence in Singapore’s residential market.
CapitaLand will continue to acquire quality sites with strong location attributes to complement its development pipeline. Singapore is becoming a global city and CapitaLand will play an integral role in providing well-designed and well-located homes for both local and international homebuyers.
CapitaLand will build an
integrated development
comprising about 500
apartments above a
shopping mall on a
prime site in the Bedok
Town Centre
1 WONG HEANG FINE CEO CAPITALAND RESIDENTIAL SINGAPORE PTE LTD CEO CAPITALAND ILEC PTE. LTD.
2 WONG JEN LAI CHIEF INVESTMENT OFFICER CAPITALAND RESIDENTIAL SINGAPORE PTE LTD (FROM 1 FEBRUARY 2011)
3 LEE YEW KWUNG SENIOR VICE PRESIDENT, PROJECT DEVELOPMENT & MANAGEMENT CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
4 COLIN WONG SENIOR VICE PRESIDENT, MARKETING & SALES CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
5 ONG SIM LIAN SENIOR VICE PRESIDENT, DESIGN MANAGEMENT CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
6 KU WEI SIONG SENIOR VICE PRESIDENT CAPITALAND GCC HOLDINGS PTE. LTD.
7 ANSON LIM VICE PRESIDENT, INVESTMENT CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
8 TAN SEO LING VICE PRESIDENT, FINANCE CAPITALAND RESIDENTIAL SINGAPORE PTE LTD
1 2 3 4
5 6 7 8
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0
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400
600
800
1000
0
100
200
300
400
500
FY2010FY2009 FY2009
843
674 352
FY2010
372
Revenue increased 25%. Excluding a one-time revaluation gain of S$72 million from ION Orchard in FY2009, EBIT was up 17% year-on-year.
300
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CAPITALAND CHINA SUMMIT RESIDENCES
NINGBO CHINA
In China, CapitaLand’s portfolio spans homes, office buildings, shopping malls, serviced residences and integrated developments. Its multi-region and multi-sector business model continues to provide a diversified earnings base for the Group.
ROBUST RESIDENTIAL SALES
Demand for homes remained strong, supported by genuine homebuyers, improvement in buyer confidence and robust economic fundamentals.
In 2010, CapitaLand China sold over 2,900 residential units across Beijing, Shanghai, Chengdu, Ningbo, Kunshan and Foshan, with a total sales value of RMB5.4 billion (S$1.1 billion). New launches included Beaufort in Beijing, The Pinnacle in Shanghai and The Metropolis in Kunshan. New units at The Loft in Chengdu were also released for sale.
GROWING THE DEVELOPMENT PIPELINE
The acquisition of Orient Overseas Developments Limited provided a unique portfolio of seven prime sites in Shanghai, Kunshan and Tianjin and marked a key milestone in the next phase of growth in China. The Changning site provided the
Sold over 2,900
residential units across
China with a total
sales value of
RMB5.4 billion
RMB5.4b
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1 JASON LEOW CEO CAPITALAND CHINA HOLDINGS PTE LTD
2 LUCAS LOH CHIEF INVESTMENT OFFICER REGIONAL GENERAL MANAGER, SOUTH CHINA CAPITALAND CHINA HOLDINGS PTE LTD
3 CHAN BOON SENG CHIEF DEVELOPMENT OFFICER REGIONAL GENERAL MANAGER, EAST CHINA CAPITALAND CHINA HOLDINGS PTE LTD
4 STEVE GONG CHIEF FINANCIAL OFFICER CAPITALAND CHINA HOLDINGS PTE LTD
5 CHIN PHEI CHEN CHIEF CORPORATE OFFICER CAPITALAND CHINA HOLDINGS PTE LTD
6 HAN WEI REGIONAL GENERAL MANAGER, NORTH CHINA CAPITALAND CHINA HOLDINGS PTE LTD
7 HOON TECK MING REGIONAL GENERAL MANAGER, SOUTHWEST CHINA CAPITALAND CHINA HOLDINGS PTE LTD
ideal location to build a second Raffles City in Shanghai while a quick time-to-market was achieved for the residential projects.
BUILDING THE RAFFLES CITY BRAND
During the year, CapitaLand extended the ‘Raffles City’ brand with another two developments in Shenzhen and Changning, Shanghai, and its ‘Raffles City’ branded portfolio now totals seven properties across China. The completed ‘Raffles City’ developments in Shanghai and Beijing are highly successful and enjoy close to full occupancy for their office and retail space. Construction of another five developments is underway and will be completed in phases between 2012 and 2015.
LOOKING AHEAD
CapitaLand is a long-term investor in China and remains optimistic about its real estate market. The Chinese government has ensured a steady property market through measures to curb excessive speculation and ensure market sustainability. With a balanced portfolio of properties across various real estate sectors, CapitaLand is well-positioned to benefit from the country’s strong economic growth and grow its business in China.
‘Raffles City’ branded
portfolio now totals seven
properties in China with
the addition of another
two developments
in Shenzhen and
Changning, Shanghai
in 2010
1 2 3
4 5 6 7
7 RAFFLES CITY DEVELOPMENTS
REVENUE (S$m) EBIT (S$m)
0
200
400
600
800
0
200
400
600
800
FY2010FY2009 FY2009
574 647 682
FY2010
551
Revenue was lower by 11% as sales were mainly through associates and not consolidated. EBIT rose by 24%, boosted by higher portfolio gains.
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Singapore office market improved during the year with office rents strengthening by about 24% after bottoming out in the first quarter. CapitaLand Commercial Limited’s (CCL’s) office portfolio in Singapore is held mainly through its listed REIT, CapitaCommercial Trust (CCT). CCT’s committed portfolio occupancy rate increased to 99.3%, above market level, at end-2010.
UNLOCKING VALUE FOR CAPITAL RECYCLING
Over the last decade, CapitaLand booked a total gain of S$1.53 billion from the divestments of its commercial and industrial assets. The proceeds were redeployed to grow the Group’s business in other high-growth markets and sectors such as China and shopping malls.
In line with CapitaLand’s capital-efficient strategy, in 2010, CCL divested its 163 strata-titled office and retail units at The Adelphi, a mixed-use development located in Singapore’s Downtown district, for S$218.1 million. CCT unlocked value by divesting two non-Grade A office properties, Robinson Point and Starhub Centre located in Singapore, for total net proceeds of approximately S$578.1 million.
In India, CCL divested its 49% stake in the 590-unit freehold residential development, The Orchard Residency, in Ghatkopar, Mumbai, for INR1.02 billion (approximately S$30 million).
Total gain of S$1.53 billion
from divestments of
commercial and industrial
assets
S$1.53b
REVENUE (S$m) EBIT (S$m)
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100
200
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400
500
-600
-400
-200
0
200
400
FY2010FY2009 FY2009
338
145
264
FY2010
-497
CAPITALAND COMMERCIAL SIX BATTERY ROAD
SINGAPORE
Six Battery Road will feature the first and largest indoor vertical garden in Singapore’s CBD designed by Dr Patrick Blanc
Revenue increased 133% from revenue recognition of projects in Vietnam. EBIT recovered to S$264 million on fair value gains and lower impairment losses.
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ENHANCING ASSET VALUE
CCT commenced asset enhancement works at Six Battery Road, a Grade A office building located in Singapore’s Central Business District (CBD). At a cost of S$92 million, the initiative will augment the building’s technical, aesthetic and green specifications to capture the office market recovery and is expected to be completed in phases by end-2013. It is the first operating office building in Singapore’s CBD to be conferred the prestigious Green Mark Platinum award by the Building and Construction Authority.
GROWING STORHUB SELF-STORAGE BUSINESS
CCL established a joint venture with Hersing Corporation Ltd to grow the self-storage business under StorHub brand. CCL holds a 62% stake in the joint venture which owns and manages self-storage facilities at four properties, totalling approximately 363,000 square feet of gross floor area in Singapore.
LOOKING AHEAD
In tandem with the optimistic economic outlook for Singapore and Asia, the office market is expected to continue to improve. CapitaLand’s active portfolio management and capital recycling strategies will enhance its nimbleness in the rising office market.
CCL will grow its new business in self-storage and double StorHub portfolio of properties in the coming year.
Owns and manages
self-storage facilities
totalling approximately
363,000 square feet
of gross floor area
in Singapore
363,000 SQUARE FEET
S$92 million asset
enhancement works at
Six Battery Road expected
to be completed in phases
by end-2013
S$92m
1 CHONG LIT CHEONG CEO CAPITALAND COMMERCIAL LIMITED (FROM 10 FEBRUARY 2011)
2 EE CHEE HONG CEO CAPITALAND COMMERCIAL LIMITED (ON SABBATICAL FROM JANUARY 2011)
3 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
4 CHAN SAY YEONG MANAGING DIRECTOR, MALAYSIA CAPITALAND COMMERCIAL LIMITED
5 POON HIN KONG SENIOR VICE PRESIDENT, DESIGN & DEVELOPMENT CAPITALAND COMMERCIAL LIMITED
6 MICHELLE KOH SENIOR VICE PRESIDENT, LEGAL & SECRETARIAT CAPITALAND COMMERCIAL LIMITED
7 EDWARD BIN FINANCIAL CONTROLLER CAPITALAND COMMERCIAL LIMITED
8 DAWN LAI VICE PRESIDENT, MARKETING & LEASING CAPITALAND COMMERCIAL LIMITED
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CAPITAMALLS ASIA CUIWEI MALL
BEIJING CHINA
2010 marked the first full year of operations for CapitaMalls Asia (CMA) after listing on the Singapore Exchange on 25 November 2009. During the year, CMA continued to grow its presence as a leading shopping mall developer, owner and manager in Asia.
As at end-2010, CMA had interests in and managed 91 shopping malls across 49 cities in Singapore, China, Malaysia, Japan and India, with a total property value of about S$23.7 billion and total gross floor area (GFA) of about 73.4 million square feet (sq ft). Of these, 65 malls were operational while the other 26 will open over the coming years.
GROWING OUR PRESENCE
In 2010, CMA committed about S$2 billion in six new projects in Singapore, China and Malaysia. These projects consist of one in Singapore (a shopping mall cum residential development at Bedok); four in China (Meili Mall and an integrated development in Tianfu in Chengdu; and a prime shopping mall and office development in Luwan, Shanghai as well as Raffles City Changning in the city); and one in Malaysia (Queensbay Mall in Penang).
In capital management, CMA monetised Clarke Quay to CapitaMall Trust for S$268 million. This was followed by the successful listing of CapitaMalls Malaysia Trust on Bursa Malaysia, making it the country’s largest “pure-play” shopping mall real estate investment
Committed S$2 billion
in six new projects in
Singapore, China and
Malaysia in 2010
S$2b
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9
trust. CMA’s wholly-owned subsidiary, CapitaMalls Asia Treasury Limited (CMATL), issued S$350 million of 7-year corporate bonds in August paying 3.95% per annum. Sensing demand from retail investors, CMATL successfully issued S$200 million of 1-year and 3-year retail bonds, paying interest of 1% and 2.15% per annum respectively, in January 2011.
CMA continued to make good progress in China with the opening of five malls in 2010: Aidemengdun Mall in Harbin, Cuiwei Mall in Beijing, Anyang Mall in Anyang, Jinshui Mall in Zhengzhou and Xinxiang Mall in Xinxiang. As at end-2010, CMA had 53 shopping malls in 34 cities in China, with a total GFA of 48.6 million sq ft. Of these, 38 malls were operational.
LOOKING AHEAD
With the confidence from the improving performances of its malls in China, CMA has set an interim goal of doubling the China portfolio to 100 malls in the coming three to five years. For 2011, CMA targets to acquire another S$2 billion of projects in its key markets of Singapore, China and Malaysia.
1 LIM BENG CHEE CEO CAPITAMALLS ASIA LIMITED
2 NG KOK SIONG CHIEF FINANCIAL OFFICER CAPITAMALLS ASIA LIMITED
3 SIMON HO CEO CAPITAMALL TRUST MANAGEMENT LIMITED
4 SIMON YONG CHIEF DEVELOPMENT OFFICER CAPITAMALLS ASIA LIMITED
5 GOH SOON YONG CEO, CHINA CAPITAMALLS ASIA LIMITED
6 LOCK WAI HAN CHIEF CORPORATE OFFICER CAPITAMALLS ASIA LIMITED
7 TONY TAN TEE HIEONG CEO CAPITARETAIL CHINA TRUST MANAGEMENT LIMITED
8 SHARON LIM CEO CAPITAMALLS MALAYSIA REIT MANAGEMENT SDN. BHD.
9 JESLINE GOH DEPUTY CEO CAPITAMALL TRUST MANAGEMENT LIMITED
10 TOH KIM SAI DEPUTY CHIEF DEVELOPMENT OFFICER CAPITAMALLS ASIA LIMITED
11 KEK CHEE HOW COUNTRY HEAD, JAPAN CAPITAMALLS ASIA LIMITED
12 KEVIN CHEE COUNTRY HEAD, INDIA CAPITAMALLS ASIA LIMITED
Target to double China
portfolio to 100 malls
within 3 to 5 years
100 MALLS IN CHINA
1 2 3 4
5 6 7 8
9 10 11 12
FY2010FY2009 FY2009 FY2010
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0
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245229
472449
Revenue rose 7% despite monetising four properties in Malaysia and Singapore into REITs. EBIT increased 5% on higher revaluation gains and better operating performance.
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THE ASCOTT LIMITED ASCOTT HUAI HAI ROAD SHANGHAI
CHINA
In 2010, CapitaLand’s serviced residence business unit, The Ascott Limited (Ascott), continued to strengthen its lead and enhanced its competitive advantage as the world’s largest international serviced residence owner-operator.
STRENGTHENED LEADERSHIP POSITION
Ascott reinforced its leadership in markets where it has presence and expanded into more cities. With its strong international branding and award-winning hospitality capabilities, Ascott clinched contracts to manage 12 properties with over 2,000 apartment units across 12 cities. Through these management contracts, Ascott entered into Danang in Vietnam, Bali in Indonesia and Chengdu, Hangzhou and Ningbo in China.
Besides new contracts, Ascott opened 14 properties with over 2,800 apartment units across 13 cities. These included its first property in four cities – Kyoto in Japan and Chengdu, Shenyang and Wuhan in China. It also opened its first Ascott-branded property in Dubai in UAE, and its first Citadines-branded property in Australia and Indonesia.
ENHANCED COMPETITIVE ADVANTAGE
Ascott injected 28 quality stabilised assets in Europe and Asia into Ascott Reit with divestment proceeds of S$974 million. This move gave Ascott financial capacity to capture new growth opportunities.
Injected 28 quality
stabilised assets in Europe
and Asia into Ascott Reit,
gaining financial capacity
to capture new growth
opportunities
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500
0
50
100
150
200
250
FY2010FY2009 FY2009
407394 173
FY2010
31
Revenue increased despite the sale of 28 properties to Ascott Reit. EBIT surged over 450% to S$173 million on portfolio gains and improved business.
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Ascott plans to invest around S$70 million to refurbish 16 properties across Asia and Europe over the next two years. The divestment has also transformed Ascott Reit into a larger and stronger platform which complements Ascott’s global growth strategy.
As Ascott expanded globally, it garnered over 20 prestigious awards for its strong branding, outstanding service and management excellence. These included ‘Best Serviced Residence Brand’ at the Business Traveller Asia-Pacific Awards and ‘Best Serviced Residence Operator’ at the TTG Travel Awards.
LOOKING AHEAD
Demand for serviced residences is growing. The growth is due to the increase in global travel and relocation assignments, given the improving world economy. Ascott is on track to achieve 40,000 apartment units globally by 2015. In 2011, it will redeploy S$1 billion capital to invest in Asia and Europe, open at least 12 properties and secure 12 more new management contracts and investments. To create more value for customers, Ascott will also continue to refurbish its properties, enhance its operating systems and expand its talent pool.
1 LIM MING YAN CEO THE ASCOTT LIMITED
2 CHONG KEE HIONG CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED
3 ALFRED ONG MANAGING DIRECTOR, SOUTHEAST ASIA & AUSTRALIA THE ASCOTT LIMITED
4 LEE CHEE KOON MANAGING DIRECTOR, NORTH ASIA THE ASCOTT LIMITED
5 RONALD TAY CHIEF INVESTMENT OFFICER THE ASCOTT LIMITED
6 TAN CHOON KWANG MANAGING DIRECTOR, EUROPE THE ASCOTT LIMITED
7 TONY SOH CHIEF CORPORATE OFFICER THE ASCOTT LIMITED
8 WONG HOOE WAI CHIEF DEVELOPMENT OFFICER THE ASCOTT LIMITED
9 YEONG LAI MENG SENIOR VICE PRESIDENT, FINANCE THE ASCOTT LIMITED
Garnered over
20 prestigious awards
for strong branding,
outstanding service and
management excellence
1 2 3
4 5 6
7 8 9
On track to achieve
40,000 apartment units
globally by 2015
40,000 APARTMENT UNITS
OVER
20 PRESTIGIOUS AWARDS
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CAPITALAND INTEGRATED DEVELOPMENTS RAFFLES CITY SHENZHEN
CHINA
CapitaLand’s competitive edge is the ability to integrate leisure, entertainment and conventions themes with homes, offices, shopping malls and serviced residences.
GROWING THE RAFFLES CITY SIGNATURE BRAND
The ‘Raffles City’ brand is synonymous with architecturally- outstanding landmark developments which offer an exciting integrated living, working and retail experience. CapitaLand has seven ‘Raffles City’ branded developments in its portfolio across China and one in Singapore. The first, Raffles City Singapore, is an iconic landmark which still attracts thousands of visitors daily.
In 2010, CapitaLand announced plans for two more ‘Raffles City’ developments in China. Raffles City Changning – Shanghai’s second Raffles City – will comprise a Grade A office tower and a shopping mall, and is centrally located in Changning District, near the Hongqiao Transportation Hub. Raffles City Shenzhen, strategically located in the Nanshan commercial district, will comprise a Grade A office tower, a shopping mall and a serviced residencey.
CapitaLand’s competitive
edge is the ability to
integrate leisure,
entertainment and
conventions themes
with homes, offices,
shopping malls and
serviced residences
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INTEGRATED LIFESTYLE DESTINATIONS
In Singapore, ION Orchard remains the ‘must visit’ shopping destination on Orchard Road while The Orchard Residences – a luxury residential condominium above the mall – obtained Temporary Occupation Permit. CapitaLand secured a strategic site in the Bedok Town Centre where it will build an integrated development comprising about 500 apartments above a one- stop family shopping mall. It will provide a new and dynamic residential and shopping destination in the heart of the Bedok transportation hub.
In the United Arab Emirates, the five towers of Rihan Heights – the first phase of the landmark Arzanah project in Abu Dhabi – reached their final heights in November, and are on track to welcome homeowners in 2011.
LOOKING AHEAD
CapitaLand will seek to expand its strong Raffles City franchise into other countries, including Vietnam and Malaysia.
CapitaLand seeks to
expand its Raffles City
franchise into other
countries, including
Vietnam and Malaysia
1 LIM MING YAN CEO THE ASCOTT LIMITED
2 WONG HEANG FINE CEO CAPITALAND RESIDENTIAL SINGAPORE PTE LTD CEO CAPITALAND ILEC PTE. LTD.
3 JASON LEOW CEO CAPITALAND CHINA HOLDINGS PTE LTD
4 LIM BENG CHEE CEO CAPITAMALLS ASIA LIMITED
5 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
6 SIMON HO CEO CAPITAMALL TRUST MANAGEMENT LIMITED
1
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Over the years, CapitaLand has built a strong track record as a reputable international real estate developer in Vietnam. Today, Vietnam is a core market for CapitaLand given its strong economic growth and rapid urbanisation as well as a huge and young population. Currently, CapitaLand’s presence is in Hanoi, Ho Chi Minh City, Hai Phong and Danang, in the residential and serviced residence sectors.
BUILDING RESIDENTIAL PORTFOLIO
In 2010, CapitaLand signed an agreement with Hoang Thanh, a leading local real estate company, to jointly develop 960 apartments on a 14,000-square-metre prime residential site in Ha Dong District in Hanoi. This brings the portfolio of prime residential units to over 4,000 across four projects in Ho Chi Minh City and Hanoi.
CapitaLand established a US$200 million joint venture fund with Mitsubishi Estate Asia and GIC Real Estate to invest in residential developments in Ho Chi Minh City and Hanoi. As the lead shareholder, it will inject a pipeline of projects into the joint venture fund and spearhead the marketing and project development functions.
Total portfolio of over
4,000 prime residential
units across four projects
in Ho Chi Minh City
and Hanoi
OVER
4,000 PRIME RESIDENTIAL UNITS
CAPITAVALUE HOMES BEAU RIVAGE
HO CHI MINH CITY VIETNAM
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BUILDING AFFORDABLE HOMES
Leveraging on its track records in China and Vietnam, CapitaLand established CapitaValue Homes, a new business unit to focus on the affordable housing segment in Asia. CapitaValue Homes aims to build well-designed homes targeted at mass market first-time homebuyers whose mortgage capacity to purchase homes are pegged to no more than 40% of the household income level in a particular city.
CapitaValue Homes has an initial pipeline of over 2,500 affordable homes. It will develop approximately 500 homes on a 9,000- square-metre site located in District 9 of Ho Chi Minh City, Vietnam. The project is targeted to be launch-ready by early 2012. Its other maiden project is a site estimated to yield over 2,000 homes in Wuhan, China.
LOOKING AHEAD
CapitaLand remains confident of the outlook for Vietnam. In the next three to five years, the Group will also explore opportunities in other real estate sectors and grow its total assets in Vietnam from the current S$400 million to S$2 billion. For CapitaValue Homes, it targets to build 10,000 to 15,000 affordable homes annually in the next three to five years.
Leveraging on its track
records in China and
Vietnam, CapitaLand
established CapitaValue
Homes to focus on the
affordable housing
segment in Asia
1 CHEN LIAN PANG CEO CAPITAVALUE HOMES LIMITED
2 YIP HOONG MUN DEPUTY CEO, VIETNAM CAPITAVALUE HOMES LIMITED
3 LEOW SIEW BENG CHIEF CORPORATE OFFICER CAPITAVALUE HOMES LIMITED
4 POON HIN KONG CHIEF OF DESIGN MANAGEMENT CAPITAVALUE HOMES LIMITED
5 QIAN YI QI MANAGING DIRECTOR, CHINA CAPITAVALUE HOMES LIMITED
6 YOONG VOON SIN GENERAL MANAGER, CENTRAL CHINA CAPITAVALUE HOMES LIMITED
7 LIM WIE SHAN GENERAL MANAGER, SOUTH VIETNAM CAPITAVALUE HOMES LIMITED
8 TAN MING CHIAN GENERAL MANAGER, NORTH VIETNAM CAPITAVALUE HOMES LIMITED
9 LIM HUA TIONG VICE PRESIDENT, FINANCE CAPITAVALUE HOMES LIMITED
1 2 3
4 5 6
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Initial pipeline of over
2,500 affordable homes
OVER
2,500 AFFORDABLE HOMES
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CAPITALAND FINANCIAL SERVICES RAFFLES CITY NINGBO
CHINA
CapitaLand is one of Asia’s leading real estate fund managers. It has established a strong track record in originating, structuring and managing real estate funds and financial products.
The Group has originated a portfolio of six REITs and 21 real estate private equity funds, of which four private equity funds have successfully matured. As at end-2010, the Group’s financial services business has Assets Under Management (AUM) of over S$30 billion.
STRONG FUND MANAGEMENT CAPABILITIES
In 2010, the Group listed its sixth REIT, CapitaMalls Malaysia Trust, the largest “pure-play” shopping mall REIT in Malaysia. CapitaLand closed two joint venture funds, one investing in residential developments in Vietnam and the other to develop Raffles City Changning in Shanghai, China. In addition, CapitaLand upsized Raffles City China Fund from US$1 billion to US$1.18 billion and increased the fund’s portfolio of properties to five Raffles City integrated developments in China by injecting Raffles City Ningbo into the fund.
GROWING OUR REITS
All REITs under CapitaLand’s management achieved strong growth and contributed a total of S$91.3 million in management fees to the Group in 2010, an increase of 35%. The REIT managers continued to enhance their portfolios through acquisitions, asset enhancements, proactive leasing strategies and portfolio reconstitution.
The Group’s financial
services business
has Assets Under
Management of
over S$30 billion
OVER
S$30b
All REITs under
CapitaLand’s
management achieved
strong growth and
contributed a total
of S$91.3 million in
management fees to
the Group
S$91.3m
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Ascott Residence Trust acquired 28 properties in Asia and Europe, almost doubling its portfolio value from S$1.56 billion in 2009 to S$2.71 billion in 2010. Ascott Residence Trust also divested two properties - Ascott Beijing in China and Country Woods Jakarta in Indonesia, achieving sale proceeds of S$227.0 million and net gain of S$103.9 milion.
CapitaMall Trust, Singapore’s largest REIT by asset size and market capitalisation, acquired Clarke Quay, bringing its portfolio to 15 strategically located malls in the suburban areas and Downtown Core.
CapitaCommercial Trust, Singapore’s first listed commercial REIT, unlocked approximately S$578.1 million from divesting two non-Grade A office properties, Robinson Point and Starhub Centre.
On the asset enhancement front, CapitaLand REITs continued to improve the asset productivity by carrying out enhancement works in Raffles City Singapore, JCube and Six Battery Road in Singapore as well as Saihan Mall in Inner Mongolia, China.
FINANCIAL PRODUCTS
During the year, CapitaLand Financial Limited originated four mezzanine financing and credit enhancement deals.
LOOKING AHEAD
CapitaLand will continue to grow its AUM through accretive acquisitions, asset enhancements and to explore opportunities to originate new funds and financial products in Singapore, China, Vietnam and Malaysia.
Ascott Residence Trust
acquired 28 properties in
Asia and Europe, almost
doubling its portfolio
value from S$1.56 billion
to S$2.71 billion
S$2.71b
1 WEN KHAI MENG CEO CAPITALAND FINANCIAL LIMITED
2 ANG SIEW YAN DEPUTY CEO CAPITALAND FINANCIAL LIMITED
3 JOHN PANG MANAGING DIRECTOR CAPITALAND FINANCIAL LIMITED
4 CHAN LEE FONG HEAD, FINANCE & CORPORATE SERVICES CAPITALAND FINANCIAL LIMITED
5 LYNETTE LEONG CEO CAPITACOMMERCIAL TRUST MANAGEMENT LIMITED
6 CHONG KEE HIONG CEO ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED
7 CHAN SAY YEONG CEO QUILL CAPITA MANAGEMENT SDN. BHD.
1 2 3
4 5 6 7
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0
50
100
150
200
0
30
60
90
120
FY2010FY2009 FY2009
116
162 103
FY2010
98
Revenue declined 28% as certain fund management companies were transferred to CMA. EBIT, however, was up 5% on better operating performance and higher portfolio gains.
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1 BOB JOHNSTON MANAGING DIRECTOR AND CEO AUSTRALAND PROPERTY GROUP
2 SEAN MCMAHON EXECUTIVE GENERAL MANAGER, COMMERCIAL & INDUSTRIAL AUSTRALAND PROPERTY GROUP
3 ROD FEHRING EXECUTIVE GENERAL MANAGER, RESIDENTIAL AUSTRALAND PROPERTY GROUP
4 KIERAN PRYKE CHIEF FINANCIAL OFFICER AUSTRALAND PROPERTY GROUP
5 MICHAEL NEWSOM GENERAL COUNSEL AUSTRALAND PROPERTY GROUP
6 BEV BOOKER COMPANY SECRETARY AUSTRALAND PROPERTY GROUP
7 CHRIS WARRELL EXECUTIVE GENERAL MANAGER, HUMAN RESOURCES AUSTRALAND PROPERTY GROUP
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CapitaLand’s listed subsidiary Australand remains one of Australia’s major diversified property groups with activities throughout Australia including the development of residential land, housing and apartments and the development and ownership of income producing commercial and industrial properties.
STRONG OPERATIONAL PERFORMANCE
Australand achieved a solid operating result of A$128 million (S$162 million), up 6% on 2009. The Group’s statutory result for the full year was a profit of A$166 million (S$210 million). The full year result reflects the resilience of the Group’s high quality investment portfolio and the emerging recovery of the development businesses.
Australand’s Residential division achieved 1,544 lot sales valued at A$538 million (S$682 million), during 2010. Australand’s core expertise in land and medium density developments and its ability to deliver affordable homes remains a competitive advantage. With a record level of sales contracts on hand at the end of 2010 and the commencement of several new projects, the outlook for the residential division remains positive.
Australand’s high quality investment portfolio was valued at A$2.1 billion (S$2.7 billion) as at December 31, 2010. Portfolio metrics remain very strong with occupancy of 98% and a weighted average lease expiry profile of 5.0 years.
Achieved a solid
operating result of
A$128 million,
up 6% on 2009
A$128m
High quality investment
portfolio valued at
A$2.1 billion as at
December 31, 2010
A$2.1b
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At year end, the Group’s internal office and industrial development pipeline comprised 11 projects with an end value of A$430 million (S$545 million).
In December 2010, Australand was included in the S&P/ASX 200 A-REIT and S&P/ASX 300 A-REIT Indices representing a significant milestone for the Group and reflecting the strategic direction of the business.
In 2010 Australand focused on rebuilding a platform to support the future growth and sustainability of its business. This includes an investment in new information systems, staff development, and a comprehensive brand refreshment programme which has now been launched.
OUTLOOK
The Australian economy continues to outperform most other developed economies and its outlook remains favourable given its leverage to the growing Asia region. Strong employment conditions and improving consumer confidence combined with Australand’s competitive positioning in each of the sectors in which it operates provide reason for Australand to be optimistic.
Australand has a clear growth strategy and earnings momentum which positions it well to deliver continued growth.
WARRIEWOOD, THE SANDS
SYDNEY AUSTRALIA
REVENUE (S$m) EBIT (S$m)
0
200
400
600
800
1000
-300
-150
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150
300
450
FY2010FY2009 FY2009
880
733 312
FY2010
-241
Revenue up 20% on higher sales from development projects and rental income. EBIT turned around to S$312 million on improved operating performance, fair value gains and absence of impairment.
AUSTRALAND PROPERTY GROUP
New Australand logo
launched on
15 March 2011
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CapitaLand recognises the importance of managing and developing human capital. Its credo of “Building People to Build for People” means developing them to reach their maximum potential, aligning their personal goals with the company’s objectives, and creating a work environment for them to contribute positively. This is the Group’s integrated human capital strategy to recruit, develop and motivate employees.
TALENT MANAGEMENT
CapitaLand identifies talents both internally and externally to build its talent pipeline to support its growth strategy, build its bench strength and facilitate succession planning. These include undergraduates, fresh graduates, young and mid-career professionals as well as industry veterans.
CapitaLand recruited talents through its network and collaborations with Singapore and overseas universities. CapitaLand also invested in future leaders through scholarship programs such as the CapitaLand–BCA Scholarship, CapitaLand-NUS-USP Scholarship and CapitaLand International Scholarship.
During the year, CapitaLand continued its focus in training and development programs to further equip employees for the changing business environment particularly in this period of
Identifies talents both
internally and from a wide
spectrum of sources
externally to build talent
pipeline and bench
strength for growth and
succession planning
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Real estate skill sets training by CapitaLand Group President &
CEO Liew Mun Leong
economy recovery from the global financial crisis. Launched in 2006, the CapitaLand Institute of Management and Business (CLIMB) has provided training for 5,750 employees from various countries. Ascott Centre for Excellence (ACE), Ascott’s global hospitality training centre in Singapore, has trained over 1,400 people for the hotel and accommodation services sector. CapitaLand’s successful ICE (Innovation, Creativity, Entrepreneurship) programs continued to inspire its diversified employee base. To date, over 1,100 employees have contributed and shared ideas at 27 ICE camps and related activities held in various countries.
COMPETITIVE COMPENSATION & BENEFITS
CapitaLand motivates and rewards employees with comprehensive and competitive compensation and benefits programmes. Incentives include short-term cash bonuses and long-term equity-based reward plans. The performance-based Restricted Share Plan is an attractive long-term incentive to employees which gives them a personal stake in the company, contingent on achieving performance targets. This better aligns employee and shareholder interests to deliver business results. Regular benchmarking against relevant markets as well as innovation in compensation strategies ensure CapitaLand remains competitive and continues to attract and retain talent.
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Since formation in 2006,
CapitaLand Institute of
Management and
Business (CLIMB) has
provided training for
5,750 employees
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CapitaLand is committed to be a good corporate citizen. The Group aims to contribute to the societies within which it operates and promote sustainable growth for future generations. Its efforts focus on the environment, philanthropy and the community.
In 2010, CapitaLand was recognised as a corporate sustainability leader by retaining the listing in the Dow Jones Sustainability Asia Pacific Index for the third year running. It was also highlighted as a sustainability leader in the Asian Sustainability Rating (ASR™) 2010. The Group clinched the prestigious Building and Construction Authority Green Mark Platinum award for its Six Battery Road office building, a first for an operating office building in Singapore.
CapitaLand published its first Sustainability Report providing comprehensive details of the Group’s corporate governance, environmental, human capital development and philanthropic initiatives.
CapitaLand staff plays an active role in all the Group’s corporate social responsibility programmes, participating in community outreach activities and volunteer expeditions. In 2010, CapitaLand staff in Singapore volunteered over 2,400 hours in various philanthropic activities.
PHILANTHROPY
Every year, CapitaLand allocates up to 0.5% of its net profit to CapitaLand Hope Foundation (CHF), its philanthropic arm, to support programmes for the shelter, education and healthcare needs of underprivileged children. In 2010, CHF celebrated its 5th anniversary with close to S$10 million donated since 2005.
Its donation of S$500,000 to President’s Challenge 2010 was largely due to the charity sales of the book “Building People: Sunday Emails from a CEO Volume 2” by Mr Liew Mun Leong, President and CEO, CapitaLand Group.
CapitaLand launched the “Hand in Hand 20.10” campaign, bringing 2,010 underprivileged children from all over China to visit the Shanghai World Expo 2010, with the aim of inspiring them to work towards a better life. In recognition of its efforts,
Underprivileged children from China visiting the Australia Pavilion at the Shanghai World Expo 2010 as part of the Hand in Hand 20.10 programme
Listed in Dow Jones
Asia Pacific Sustainability
Index 3 years in a row
Donated close to
S$10 million to aid
underprivileged
children since 2005
S$10m
CORPORATE SOCIAL RESPONSIBILITY
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CapitaLand China was awarded “China Best Corporate Citizen” award for the third year running, by the China Committee of Corporate Citizenship and CCTV2.
CHF established the CapitaLand Kids’ Food Fund programme, donating S$525,000 to provide nutritious food for over 11,000 underprivileged children in Singapore, China, Philippines and Thailand.
It funded CapitaMalls Asia’s My Schoolbag programme with S$300,000 to provide 11,000 underprivileged children in China and Singapore with basic school supplies and daily necessities.
ENVIRONMENT
Environmental sustainability and occupational health and safety are of paramount importance to CapitaLand. It obtained ISO14000 and OHSAS18000 certifications for its environmental, health and safety (EHS) management system in China, Vietnam, Malaysia and Japan, in addition to the certification achieved previously for Singapore. This makes CapitaLand one of the most extensively certified real estate companies in Asia.
Through its Building a Greener Future programme, CapitaLand encourages staff, tenants and the community to play their role in protecting the environment. In conjunction with Earth Hour 2010, a climate change initiative by WWF, CapitaLand turned off the façade lights of around 190 of its properties worldwide for 10 hours.
CapitaLand Green for Hope @ Primary Schools programme is into its third year and continued to receive overwhelming response. With this success, CapitaLand initiated the Green for Hope @ CapitaLand programme to its properties in Singapore. Over 1,368,550kg of recyclable waste was collected, earning a total donation of over S$1.3 million, benefitting the underprivileged students from the 170 participating primary schools and 10 children charities.
COMMUNITY
CapitaLand believes in promoting an understanding of the cultures between Singapore and overseas communities. It was a Supporting Partner of the Singapore Pavilion at the Shanghai World Expo 2010. CapitaLand is the Presenting Sponsor and Conservation Donor of the pair of giant panda cubs Singapore will receive from China by 2012, further strengthening the strong relationship between the two countries.
Achieved ISO 14000
and OHSAS 18000
certification for its
environmental, health
and safety management
system in Singapore,
China, Vietnam,
Malaysia and Japan
CapitaLand Hope Foundation board and management with our property tenants and beneficiaries at the Green for Hope
@ CapitaLand Launch Ceremony
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CORPORATE DIRECTORY BOARD OF DIRECTORS
Dr Hu Tsu Tau Chairman
Peter Seah Lim Huat Deputy Chairman
Liew Mun Leong President & CEO
in order of date of appointment:
Jackson Peter Tai Richard Edward Hale James Koh Cher Siang Arfat Pannir Selvam Professor Kenneth Stuart Courtis Dr Fu Yuning John Powell Morschel Ng Kee Choe Simon Claude Israel
COMPANY SECRETARY
Low Sai Choy
ASSISTANT COMPANY
SECRETARY
Ng Chooi Peng
AUDIT COMMITTEE
Richard Edward Hale (Chairman) James Koh Cher Siang Arfat Pannir Selvam
INVESTMENT COMMITTEE
Dr Hu Tsu Tau (Chairman) Liew Mun Leong Jackson Peter Tai Professor Kenneth Stuart Courtis Simon Claude Israel Olivier Lim Tse Ghow
EXECUTIVE RESOURCE
AND COMPENSATION
COMMITTEE
Peter Seah Lim Huat (Chairman) Ng Kee Choe Simon Claude Israel
NOMINATING COMMITTEE
Peter Seah Lim Huat (Chairman) Liew Mun Leong Arfat Pannir Selvam John Powell Morschel Simon Claude Israel
FINANCE AND BUDGET
COMMITTEE
Peter Seah Lim Huat (Chairman) Liew Mun Leong Jackson Peter Tai Professor Kenneth Stuart Courtis Olivier Lim Tse Ghow
CORPORATE DISCLOSURE
COMMITTEE
James Koh Cher Siang (Chairman) Liew Mun Leong Arfat Pannir Selvam
RISK COMMITTEE
James Koh Cher Siang (Chairman) Richard Edward Hale Arfat Pannir Selvam
REGISTERED ADDRESS
168 Robinson Road #30-01 Capital Tower Singapore 068912 Telephone: +65 6823 3200 Facsimile: +65 6820 2202
SHARE REGISTRAR
M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore 068906 Telephone: +65 6227 6660 Facsimile: +65 6225 1452
AUDITORS
KPMG LLP 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 Telephone: +65 6213 2008 Facsimile: +65 6225 4142 (Engagement Partner since financial year ended 31 December 2010: Leong Kok Keong)
PRINCIPAL BANKERS
• Australia and New Zealand Banking Group Limited
• Bank of China • BNP Paribas • China Merchant Bank • CIMB Bank Berhad • Commonwealth Bank
of Australia • Credit Agricole Corporate
and Investment Bank • DBS Bank Ltd • Hang Seng Bank Limited • Industrial and Commercial
Bank of China Limited • Malayan Banking Berhad • Mizuho Corporate Bank, Ltd. • National Australia Bank
Limited • Oversea-Chinese Banking
Corporation Limited • Standard Chartered Bank • Sumitomo Mitsui Banking
Corporation • The Bank of Tokyo–
Mitsubishi UFJ, Ltd • The Hongkong and
Shanghai Banking Corporation Limited
• United Overseas Bank Limited
• Westpac Banking Corporation
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FINANCIAL YEAR ENDED 31 DECEMBER 2010
Announcement of First Quarter Results 16 April 2010
Announcement of Second Quarter Results 4 August 2010
Announcement of Third Quarter Results 29 October 2010
Announcement of Full Year Results 22 February 2011
Annual General Meeting 25 April 2011
Books Closing (Record Date) 5.00 p.m. on 11 May 2011
Books Closure 12 May 2011
Proposed Payment of 2010 Final Dividend 26 May 2011
FINANCIAL YEAR ENDING 31 DECEMBER 2011
Proposed Announcement of First Quarter Results April 2011
Proposed Announcement of Second Quarter Results August 2011
Proposed Announcement of Third Quarter Results October 2011
Proposed Announcement of Full Year Results February 2012
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Benchmark Index
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MSCI AC Asia Pacific ex-Japan Industrials Index
Straits Times Index
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JANUARY
CapitaLand signed an agreement with Hoang Thanh Investment and Infrastructure Development Joint Stock Company to jointly develop a 14,000-square-metre residential site in Ha Dong District in Mo Lao New Urban Area, Hanoi, Vietnam. The signing ceremony was witnessed by Singapore Prime Minister Lee Hsien Loong and Vietnam Prime Minister Nguyen Tan Dung in Hanoi.
CapitaLand’s Urban Suites condominium was launched and saw strong sales. The high-end development in the Cairnhill area in Singapore’s prime Orchard Road shopping district has a total of 165 apartments.
CapitaLand held a groundbreaking ceremony for a residential development located in Jinshazhou, in the heart of the Guangzhou- Foshan Metropolis Circle. The project will comprise about 2,800 units.
FEBRUARY
Phase one of Beaufort, a high-end residential project in Beijing, was launched to strong buyer response. When completed, Beaufort will have four residential blocks with about 1,000 high- end apartments.
CapitaLand completed the US$2.2 billion (S$3.1 billion) acquisition of Orient Overseas Developments Limited (OODL). The portfolio comprises seven prime sites in Shanghai, Kunshan and Tianjin.
CapitaMalls Asia acquired Meili project, comprising retail and residential in Chengdu, China for RMB459.9 million (S$94.6 million).
CapitaMalls Asia monetised Clarke Quay, Singapore’s premier lifestyle and entertainment precinct, to CapitaMall Trust for S$268.0 million.
MARCH
CapitaMalls Asia acquired Tianfu integrated development, comprising a shopping mall, residential and office towers in Chengdu, China for RMB554.2 million (S$114.0 million).
CapitaMalls Asia opened Anyang Mall in Anyang, China.
Ascott entered Vietnam’s fourth largest city, Danang, through securing a contract to manage the 121-unit Somerset Danang Bay.
APRIL
CapitaLand started phase two sales of The Interlace. Set amidst a natural verdant green belt at the Southern Ridges of Singapore, the 1,040-unit condominium features 31 apartment blocks stacked in a hexagonal arrangement to form eight large-scale courtyards.
The show homes of Rihan Heights, the first phase of Arzanah in Abu Dhabi, were unveiled to the public. Arzanah is a 1.4 million-square- metre integrated development developed by Capitala, a joint venture between CapitaLand and Mubadala Development Company.
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The Paragon, Shanghai, China – one of the projects secured through the OODL acquisition
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CapitaMalls Asia opened Cuiwei Mall in Beijing, China.
Raffles City China Fund raised an additional US$180 million (S$252 million) in committed capital, increasing the fund’s capital to US$1.18 billion (S$1.65 billion). CapitaLand has a 45.6% effective interest in the fund.
CapitaLand divested Raffles City Ningbo to the Raffles City China Fund for approximately US$125 million (S$175 million), in line with its strategy to hold its Raffles City integrated developments in China through the fund.
MAY
Private previews started for the 64-unit Urban Resort Condominium, located in the Cairnhill area in Singapore’s Orchard Road shopping district.
Plans for Raffles City Shenzhen were announced. This is CapitaLand’s sixth Raffles City integrated development in China. Located in the commercial district of Shenzhen City’s Nanshan District, Raffles City Shenzhen will comprise a Grade A office tower, a shopping mall and a serviced residence.
CapitaLand launched its ‘Hand in Hand 20.10’ campaign, bringing 2,010 underprivileged children across China, including CapitaLand Hope School students, to visit the Shanghai World Expo 2010. The campaign also marked the 20th anniversary of diplomatic relations between Singapore and China, and CapitaLand’s 10th anniversary.
Six Battery Road was the first operating office building in Singapore’s Central Business District
being conferred the Green Mark Platinum Award by the Building and Construction Authority.
JUNE
CapitaLand and its partners celebrated the topping-out for its first residential project in Vietnam, The Vista, Ho Chi Minh City.
The Metropolis, a condominium located in Kunshan City, west of Shanghai, was launched to good buyer response. The Metropolis is the first project from the OODL portfolio to be released for sale.
CapitaMalls Asia opened Aidemengdun Mall in Harbin, China.
JULY
Ascott opened its first Citadines-branded property in Australia, the 380-unit Citadines on Bourke Melbourne.
The Seafront on Meyer, a 327-unit condominium in Singapore which enjoys panoramic views of the sea and city skyline, achieved Temporary Occupation Permit.
Mr Wong Heang Fine assumed the CEO position at CapitaLand Residential Singapore.
CapitaLand divested its entire 50% stake in Sichuan Zhixin CapitaLand Co., Ltd for a net gain of approximately S$33 million, in line with its ongoing strategy of capital productivity.
CapitaMalls Asia successfully listed CapitaMalls Malaysia Trust (CMMT), Malaysia’s largest “pure-play” shopping mall REIT by market capitalisation and property value, on the Main Market of the Bursa Securities, Malaysia.
Liew Mun Leong, President & CEO of CapitaLand Group, introducing underprivileged children participating in the “Hand in Hand 20.10” campaign launch at the Singapore Pavilion, Shanghai World Expo 2010, to Singapore Minister Mentor Lee Kuan Yew
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Ascott entered Bali in Indonesia through securing a contract to manage the 174-unit Citadines Kuta Bali.
CapitaLand invested in a 62% stake in the joint venture with Hersing Corporation Ltd to acquire the StorHub brand and four self-storage properties in Singapore.
AUGUST
Ascott announced its target to achieve 40,000 apartment units globally by 2015 at the opening of the 278-unit Ascott Huai Hai Road Shanghai in China.
Ascott clinched contracts to manage four more properties in China – the 160-unit Ascott Raffles City Ningbo; 151-unit Ascott Raffles City Hangzhou; 178-unit Ascott Suzhou; and 314-unit Ascott Guangzhou IFC.
Ascott announced it would convert the 51-unit Citadines Louvre Paris into Ascott Louvre Paris, the company’s first Ascott-branded property in France.
Riverside Ville, located in Chancheng District in Foshan, China, was awarded the Green Mark Award by Singapore’s Building and Construction Authority. It is the first project in South China to win the award.
CapitaLand raised S$350 million through a 10-year, Singapore-dollar bond with a coupon rate of 4.3%.
CapitaMalls Asia raised S$350 million through 3.95% unrated fixed rate notes under a S$2 billion Euro-Medium Term Note Programme.
CapitaLand China launched The Pinnacle, a residential development located in the heart of Pudong District, Shanghai.
SEPTEMBER
A joint venture between CapitaLand and CapitaMalls Asia submitted the winning bid for a prime site in Singapore’s Bedok Town Centre. The integrated development will comprise approximately 500 condominium units above a shopping mall.
Mr Lim Swee Say, Minister in the Prime Minister’s Office of Singapore, officiated the grand opening of Ascott’s first property in Chengdu, China – the 200-unit Somerset Riverview Chengdu.
Latitude, a boutique freehold development in Singapore with 127 elegant apartments, achieved Temporary Occupation Permit.
Ascott secured a contract to manage its first Ascott-branded property in Dubai, UAE – the 118-unit Ascott Park Place Dubai.
OCTOBER
Ascott injected 28 quality stabilised assets in Europe and Asia into Ascott Reit with divestment proceeds of S$974 million. This move gave Ascott financial capacity to capture new growth opportunities and has transformed Ascott Reit into a larger and stronger platform which complements Ascott’s global growth strategy.
Nearly 200 units built under the first phase of CapitaLand China’s The Loft residential project in Chengdu were successfully handed over to buyers.
CapitaLand organised an Investor Day specially for its retail shareholders to celebrate its 10th Anniversary. A total of 1,500 retail investors were present to listen to presentations made by top and senior management.
CapitaValue Homes, a new strategic business unit, was formed to meet the demand for affordable homes in Asia.
CapitaValue Homes entered into a Co-operative Agreement with the Caidian District Government as well as an Investment Framework Agreement with a Chinese state owned enterprise to invest in a site in Wuhan, China, to build more than 2,000 affordable homes.
CapitaValue Homes signed a Conditional Agreement with No Va Land Investment Group Corporation to jointly develop a residential site in District 9, Ho Chi Minh City, Vietnam, to provide approximately 500 affordable homes. The signing ceremony was witnessed by Singapore Prime Minister Lee Hsien Loong and Vietnam Prime Minister Nguyen Tan Dung in Hanoi.
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NOVEMBER
The five towers of Rihan Heights reached their final heights, and a topping-out ceremony was held to mark this significant construction milestone. The residential project in Abu Dhabi is on schedule to be handed over to homebuyers in 2011.
CapitaLand sold its entire 49% stake in Runwal CapitaLand India Private Limited which owned The Orchard Residency in Mumbai, India, at a cash consideration of INR1.02 billion (approximately S$30 million). The divestment enabled early recycling of capital ahead of the project completion.
CapitaLand established a US$200 million joint venture fund with Mitsubishi Estate Asia and GIC Real Estate to invest in residential developments in Vietnam.
CapitaLand and its partners unveiled d’Leedon, a 1,715-unit condominium on the site of the former Farrer Court. The iconic project in Singapore is designed by internationally- renowned Pritzker Architecture Prize winner Zaha Hadid.
CapitaMalls Asia acquired 66.0% interest in a prime shopping mall and office development in Luwan district, Shanghai, China for RMB3.9 billion (S$747.2 million). The entire development is expected to be completed by 2015.
CapitaMalls Asia opened Xinxiang Mall in Xinxiang, China.
DECEMBER
d’Leedon received strong buyer interest during preview sales to former owners of Farrer Court and an initial launch. The project’s seven 36- storey residential towers will offer breathtaking views of Singapore’s skyline and large expanses of greenery.
Ascott opened its first Citadines-branded property in Indonesia, the 135-unit Citadines Quartier Jakarta.
CapitaLand entered into four sale and purchase agreements to divest its 163 strata-titled units in The Adelphi for a total consideration of S$218.1 million to recycle capital.
Phase two of Beaufort in Beijing was launched to strong response. Homebuyers had a choice of 220 units, comprising studios, one- and two-bedroom apartments.
CapitaMalls Asia acquired Queensbay Mall in Penang, Malaysia for RM651.8 million (S$272.8 million).
CapitaMalls Asia opened Jinshui Mall in Zhengzhou, China.
CapitaLand China announced plans to build its second Raffles City integrated development in Shanghai. Located in Shanghai’s Changning District, near the Hongqiao Transportation Hub, Raffles City Changning will comprise a Grade A office tower and a shopping mall. CapitaLand closed a joint venture fund to develop Raffles City Changning.
Celebrating CapitaLand’s transformation in a decade with the launch of the commemorative book
“10 Years: Building People” by CapitaLand senior management at the CapitaLand Investor Day 2010.
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CapitaLand observes high standards of corporate conduct in line with the Principles of the Code of Corporate Governance 2005 (the “Code”). We believe that each company needs to develop and maintain sound and transparent policies and practices to meet its specific business needs and to provide a solid foundation for a trusted and respected business enterprise. We remain focused on the substance and spirit of the Principles of the Code while achieving operational excellence and delivering the Group’s long term strategic objectives.
This Report on our corporate governance practices for financial year 2010 (”Report”) describes our application of good governance principles in building a company committed to integrity, excellence and its people. The application is underpinned by sound systems of internal controls and accountability, which help to promote and drive long term sustainable growth and shareholder value.
The following sections covering each of the Principles outline our policies and practices.
(A) BOARD MATTERS
Principle 1: Board’s Conduct of Affairs
CapitaLand is led by an effective Board comprising a majority of independent non- executive directors. Each director brings to the Board his skills, experience, insights and sound judgement, which together with strategic networking relationships, serves to further the interests of the Group. At all times, the directors are collectively and individually obliged to act in good faith and consider the best interests of CapitaLand.
The key roles of our Board are to: • guide the corporate strategy and directions
of the Group; • ensure that Senior Management discharges
business leadership and the highest quality of management skills with integrity and enterprise; and
• oversee the proper conduct of the Group’s business.
To assist the Board in the discharge of its oversight functions, various Board Committees, namely Audit Committee (”AC”), Corporate Disclosure Committee (”CDC”), Executive Resource and Compensation Committee (”ERCC”), Finance and Budget Committee (”FBC”), Investment Committee (”IC”), Nominating Committee (”NC”) and Risk Committee (”RC”) have been constituted with clear written Terms of Reference. Other Board Committees may be formed as dictated by business imperatives.
Membership of the various Board Committees is carefully managed to ensure an equitable distribution of responsibility among Board members, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are considered. CapitaLand has also taken steps to ensure that there are appropriate checks and balances between the different Board Committees. Hence, membership of the FBC and IC being committees which are more involved in key businesses or executive decisions, and membership of the AC with its supervisory role, are mutually exclusive.
The Board meets regularly to review the key activities and business strategies of the Group, at least once every quarter, and as required by business imperatives. The Board deliberates strategic policies of the Group, including significant acquisitions and divestments, approving the annual budget, reviewing the performance of the Group’s businesses, and approving the release of the quarterly and full-year results. The AC is delegated the authority by the Board to review such results.
A total of five Board meetings was held in 2010.
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CORPORATE GOVERNANCE REPORT FOR THE PERIOD FROM 1 JANUARY 2010 TO 31 DECEMBER 2010
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A table of the Board members’ participation in the various Board Committees is set out on page 92 of this Report. This reflects each Board member’s additional responsibilities and special focus in the respective Board Committee.
A table showing the attendance record of directors at Board and Board Committee meetings during the year is set out on page 93 of this Report. We believe in the manifest contribution of our directors beyond attendance at formal Board and Board Committee meetings. CapitaLand’s directors are all professionals with diverse experience able to provide effective guidance on the strategic direction of the Group’s businesses. To judge a director’s contribution based on his attendance at formal meetings alone would not do justice to his overall contribution, which includes being accessible to Management for guidance or exchange of views outside the formal environment of Board meetings.
The Board has adopted a set of internal controls which sets out approval limits for capital expenditure, investments and divestments, bank borrowings and signature of cheques at Board level. Approval sublimits are also provided at Management levels to facilitate operational efficiency.
The IC is chaired by Dr Hu Tsu Tau and comprises Mr Liew Mun Leong, Mr Jackson Peter Tai, Professor Kenneth Stuart Courtis, Mr Simon Claude Israel (appointed on 1 July 2010) and Mr Olivier Lim Tse Ghow, the Group Chief Financial Officer (”Group CFO”). The IC has been delegated the authority by the Board to approve the Group’s investments and divestments, participation in tenders and bids and acceptance of credit facilities from financial institutions and banks. Since 2000, the Board had approved the delegation of some of its
authority to the Boards and Management Committees of its various strategic business units (”SBU”) within strict limits. Apart from convening four formal meetings of the IC in 2010, the views of the IC and Board were actively sought by the SBUs, and the approval of the IC obtained where required.
Changes to regulations and accounting standards are monitored closely by Management. Where regulatory changes have an important bearing on CapitaLand’s or directors’ disclosure obligations, directors are briefed during Board meetings or at specially-convened sessions conducted by professionals.
Newly appointed directors are given briefings by Management on the business activities of the Group and its strategic directions. Upon appointment, each director is briefed and provided with a formal letter setting out the director’s duties and obligations. Directors are expected to exercise independent judgement in the best interests of CapitaLand. Directors are also briefed and provided with relevant information on CapitaLand’s policies and procedures relating to corporate conduct and governance including disclosure of interests in securities, prohibitions on dealings in CapitaLand’s securities, restrictions on disclosure of price sensitive information and the disclosure of interests relating to certain property transactions.
The directors are provided with opportunities for continuing education in areas such as directors’ duties and responsibilities, corporate governance, changes in financial reporting standards, insider trading, changes in the Companies Act and listing rules, and industry-related matters, so as to update them on matters that affect or may enhance their performance as Board or Board Committee members.
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Principle 2: Board Composition and Guidance
The Board comprises 12 directors, with 11 non- executive directors.
The non-executive Chairman Dr Hu Tsu Tau brings with him a wealth of experience both in the Singapore Government (as a former Cabinet Minister) and in a major global company (as previous Chairman and Chief Executive of the Shell Group of companies in Singapore). The sole executive director is Mr Liew Mun Leong, who is also the President and Chief Executive Officer (”CEO”).
The directors are business leaders and professionals with governmental, financial, banking, tax, trading, real estate, transport and legal backgrounds. Profiles of the directors are provided on pages 18 to 25 of this Report.
This composition of the Board enables Management to benefit from the directors’ external, diverse and objective perspective on issues brought before the Board. It also enables the Board to interact and work with Management through a robust exchange of ideas and views to help shape the strategic process. This, together with a clear separation of the role of the Chairman and the CEO, provides a healthy professional relationship between the Board and Management with clarity of roles and facilitates robust deliberations on the business activities of the Group.
The Board has established the NC which makes recommendations to the Board on all Board appointments and determines a director’s independence. The NC has determined that 10 of the 11 non-executive directors on the Board were independent in the financial year 2010. Although Professor Kenneth Stuart Courtis received payment of an amount of US$2,016 for services rendered to CapitaLand as Economics Advisor and Mrs Arfat Pannir Selvam received payment of an aggregate
amount of S$16,590 for consultancy services rendered to a subsidiary of CapitaLand in the financial year 2010, the NC considers both Professor Courtis and Mrs Selvam as independent directors notwithstanding their relationships with CapitaLand in respect of Guidance Note 2.1(c) of the Code as the amounts paid are not significant and they are able to exercise strong independent judgement in their deliberations in the interests of CapitaLand.
Principle 3: Chairman and
Chief Executive Officer
To maintain effective supervision and accountability at each of the Board and Management levels, the positions of Chairman and CEO are held by separate individuals.
The non-executive Chairman, Dr Hu Tsu Tau, is responsible for the Board and acts independently in the best interests of CapitaLand and its shareholders, while the President and CEO, Mr Liew Mun Leong, is responsible for the running of the Group’s businesses.
The Chairman ensures that the members of the Board and Management work together with integrity, competency and moral authority, and that the Board constructively engages Management on strategy, business operations, enterprise risk and other plans.
The President and CEO is a Board member and has full executive responsibilities over the business directions and operational decisions of the Group. The President and CEO, in consultation with the Chairman, schedules Board meetings and finalises the preparation of the Board meeting agenda. He ensures the quality and timeliness of the flow of information between Management and the Board. He is also responsible for ensuring that CapitaLand complies with corporate governance guidelines.
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Principle 4: Board Membership
Board renewal is a continual process, for good governance and to maintain relevance to the changing needs of the Group’s businesses. The President and CEO, as a Board member, is also subject to retirement and re-election by shareholders as part of Board renewal. Election of Board members is the prerogative and right of shareholders.
The NC is chaired by Mr Peter Seah Lim Huat and comprises Mr Liew Mun Leong, Mrs Arfat Pannir Selvam, Mr John Powell Morschel (appointed on 1 January 2011) and Mr Simon Claude Israel (appointed on 1 January 2011).
The majority of the NC members, including the Chairman, are independent non-executive directors.
The NC ensures that the Board and Board Committees in the Group comprise individuals who are best able to discharge their responsibilities as directors having regard to the law and the highest standards of corporate governance. In performing its role, the NC is guided by its Terms of Reference which sets out its responsibilities. In particular, the NC will: • review and recommend candidates to be
CapitaLand’s nominees on the Board and Board Committees of listed companies within the Group;
• review and recommend candidates to the Board and Board Committees of holding companies of the SBUs; and
• review CapitaLand’s corporate governance practices, having regard to relevant local and international developments in the area of corporate governance (including changes in applicable law, regulations and listing rules), and recommend changes to the Board.
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The NC sources for candidates for appointment to the Boards of the Group, in particular, candidates who would be able to add value to Management through contributions of their skills, knowledge and experiences in the relevant strategic business areas.
CapitaLand’s Articles of Association require one-third of its directors to retire and subject themselves to re-election (”one-third rotation rule”) by shareholders at every Annual General Meeting (”AGM”). In other words, no director stays in office for more than three years without being re-elected by shareholders.
The President and CEO, as a Board member, is also subject to the one-third rotation rule. This separates his role as President and CEO from his position as a Board member, and enables shareholders to exercise their right to select all Board members.
In addition, a new director appointed by the Board will submit himself for retirement and re-election at the AGM immediately following his appointment. Thereafter, he is subject to the one-third rotation rule.
Directors who are above the age of 70 are also statutorily required to seek re-appointment at each AGM.
The NC ensures that although some of our directors sit on the boards of various companies, they devote sufficient time and attention to the affairs of CapitaLand.
Principle 5: Board Performance
We believe that Board performance is ultimately reflected in the long term performance of the Group.
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The financial indicators, set out in the Code as guides for the evaluation of the Board and its directors, are in our opinion more of a measurement of Management’s performance and therefore less applicable to directors. In any case, such financial indicators provide a snapshot of a company’s performance, and do not fully measure the sustainable long term wealth and value creation of CapitaLand.
A more important consideration is that the Board, through the NC, had ensured from the outset the requisite blend of background, experience and knowledge in technology, business, finance and management skills critical to the Group’s businesses. It has from the outset ensured that each director with his special contribution brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.
The NC has beginning 2011 initiated processes for formal Board assessment to be carried out by an external consultant.
Renewal or replacement of Board members do not necessarily reflect their contributions to date, but may be driven by the need to position and shape the Board in line with the medium term needs of CapitaLand and its business.
Principle 6: Access to Information
We believe that the Board should be provided with timely and complete information prior to Board meetings, and as and when the need arises. As a general rule, Board papers are sent to Board members at least seven days before the Board meeting so that the members may better understand the matters prior to the Board meeting and discussion may be focused on questions that the members may have. However, sensitive matters may be tabled at the meeting itself or discussed without any
papers being distributed. New Board members are fully briefed on the businesses of the Group.
Management provides adequate and timely information to the Board on Board affairs and issues requiring the Board’s decision. It also provides ongoing reports relating to operational and financial performance of CapitaLand, such as monthly management financial reports. The Articles of Association of CapitaLand provide for directors to convene meetings by teleconferencing or videoconferencing. Where a physical Board meeting is not possible, timely communication with members of the Board is effected through electronic means which include electronic mail, teleconferencing and videoconferencing. Alternatively, Management will brief directors in advance before seeking the Board’s approval.
The Board has access to Senior Management and the Company Secretary at all times. The Company Secretary attends to corporate secretarial administration matters and is the corporate governance advisor on corporate matters to the Board and Senior Management. The Company Secretary attends Board meetings. The appointment and removal of the Company Secretary are subject to the approval of the Board. The Board also has access to independent professional advice where appropriate.
Board meetings for each year are scheduled in advance in the preceding year to facilitate directors’ individual administrative arrangements in respect of competing commitments.
The AC also meets the external and internal auditors separately at least once a year, without the presence of the President and CEO and the Senior Management, in order to have unfettered access to information that it may require.
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(B) REMUNERATION MATTERS
Principle 7: Procedures for Developing
Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure on Remuneration
We believe that a framework of remuneration for the Board and key executives should not be taken in isolation. It should be linked to the building of management bench strength and the development of key executives. This is to ensure continual development of talent and renewal of strong and sound leadership for a sustainable business and a lasting Company. CapitaLand’s ERCC plays a crucial role in helping to ensure that we are able to attract, recruit and retain the best talents to drive the Group’s businesses forward.
The ERCC is chaired by Mr Peter Seah Lim Huat and comprises Mr Ng Kee Choe and Mr Simon Claude Israel.
The majority of the ERCC members, including the Chairman, are independent non-executive directors. Outside members may be co-opted into the ERCC to provide a global perspective of talent management and remuneration practices.
The ERCC oversees executive compensation and development in CapitaLand. The ERCC is guided by its Terms of Reference. Specifically, the ERCC will: • approve the remuneration framework for
non-executive directors; • establish compensation policies for
key executives; • approve salary reviews, bonus and
incentives for key executives; • approve share incentives and share
ownership for executives; • approve key appointments and review
succession plans for key positions; and • oversee the development of key executives
and younger talented executives.
The aim of the ERCC is to build capable and committed management teams, through competitive compensation, focused management, and progressive policies which can attract, motivate and retain a pool of talented executives to meet the current and future growth of CapitaLand.
The ERCC conducts, on an annual basis, a succession planning review of the President and CEO and selected key positions in CapitaLand. Potential internal and external candidates for succession are reviewed in the light of immediate, medium term and longer term needs and readiness.
The ERCC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the ERCC takes into consideration industry practices and norms in compensation. The President and CEO is not present during the discussions relating to his own compensation and terms and conditions of service, and the review of his performance. The President and CEO will be in attendance when the ERCC discusses policies and compensation of his senior team and key staff. This includes major compensation and incentive policies such as contingent share awards, bonus, staff salary review and other incentive schemes. One ERCC meeting was held in 2010.
Non-executive directors have remuneration packages consisting of directors’ fees, attendance fees and share awards. The directors’ fee policy is based on a scale of fees divided into basic retainer fees as director and additional fees for attendance and serving on Board Committees. Details of the breakdown are provided in the Other Information section of this Report (”Other Information”) on page 102. Directors’ fees for non-executive directors are subject to the approval of shareholders at the AGM.
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The basis of allocation of the number of share awards takes into account a director’s additional responsibilities at Board Committees.
The President and CEO as executive director does not receive director’s fees. He is the lead member of Management. His compensation consists of his salary, allowances, bonuses and contingent share awards. The latter is conditional upon him and CapitaLand meeting certain performance targets. The details of his compensation package are provided in the Other Information on page 102.
Key executives’ compensation consists of salary, allowances, bonuses and contingent share awards. The latter is conditional upon meeting certain performance targets. A significant proportion of executives’ remuneration is linked to company and individual performance in the form of share based and Economic Value Added based compensation. The Code requires a company to disclose the names of at least the top five key executives of the company. CapitaLand considers members of the Office of the President as its key executives. Currently, apart from the President and CEO who is the executive director, the other four members of the Office of the President are CapitaLand Chief Corporate Officer Ms Jennie Chua Kheng Yeng, CapitaLand Chief Investment Officer Mr Wen Khai Meng, CapitaLand Group CFO Mr Olivier Lim Tse Ghow and The Ascott Limited CEO Mr Lim Ming Yan. Their remuneration in bands of S$250,000 are provided in the Other Information on page 102.
No employee of CapitaLand and its subsidiaries is an immediate family member of a director or the President and CEO and whose remuneration exceeds S$150,000 during the financial year 2010. “Immediate family member” means the spouse, child, adopted child, step-child, sibling and parent.
A separate remuneration report is not prepared as most of the information is found in the Other Information on page 102.
Share awards which were made in 2010 were based on the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan (the “Existing Share Plans”) approved and adopted by shareholders of the Company at an Extraordinary General Meeting held on 16 November 2000.
At the Extraordinary General Meeting of the Company held on 16 April 2010, the shareholders approved the adoption of a new CapitaLand Performance Share Plan 2010 and a new CapitaLand Restricted Share Plan 2010 (the “New Share Plans”). Upon the adoption of the New Share Plans, the Existing Share Plans were terminated without prejudice to the rights of holders of outstanding options and awards. The New Share Plans carry the same terms as the Existing Share Plans except that the maximum size of the shares to be awarded has been reduced to 8% over the 10- year life of the New Share Plans (compared to 15% for the Existing Share Plans).
Details of the Existing Share Plans and New Share Plans as well as awards granted under the Existing Share Plans are given in the Share Plans section of the Directors’ Report from pages 110 to 115.
(C) ACCOUNTABILITY AND AUDIT
Principle 10: Accountability
CapitaLand believes in conducting itself in ways that deliver maximum sustainable value to its shareholders. CapitaLand promotes best practices as a means to build an excellent business for its shareholders and is accountable to shareholders for its performance.
At CapitaLand, the separation of the roles of the Chairman and the President and CEO, and
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the holding of such appointments by separate individuals, ensure effective supervision of Management and maintenance of accountability of the Board to the shareholders, and of Management to the Board.
Prompt fulfilment of statutory reporting requirements is but one way to maintain shareholders’ confidence and trust in the capability and integrity of CapitaLand.
CapitaLand was the first listed real estate group in Singapore to implement quarterly reporting before it became a requirement by the Singapore Exchange Securities Trading Limited (”SGX-ST”). This shows CapitaLand’s corporate intent to discharge its continuing obligation of prompt and thorough disclosures as practised by international standards, in view of the global reach of its businesses and shareholder base.
Principle 11: Audit Committee
CapitaLand’s internal policy requires the AC to have at least three members, all of whom are non-executive and the majority must be independent.
The AC is chaired by Mr Richard Edward Hale and comprises Mr James Koh Cher Siang and Mrs Arfat Pannir Selvam. All the members of the AC, including the Chairman, are independent non-executive directors. The members bring with them invaluable managerial and professional expertise in the financial, tax and legal domains.
The AC is guided by Terms of Reference which defines its scope of authority. These Terms include review of the annual audit plan, adequacy of the internal audit process, results of audit findings and Management’s response, adequacy and effectiveness of internal controls, Interested Person Transactions, framework and processes established for the implementation of the terms of the collaboration agreement
between CapitaLand and CapitaMalls Asia Limited, the processes for the management of material conflicts of interest within the Group and also the resolution of all conflicts of interest matters referred to the AC.
The AC reviews quarterly and full-year results and the appointment and re-appointment of auditors before recommending them to the Board for approval. The AC also approves the compensation of the external auditors, as well as considers the nature and extent of non-audit services and their potential impact on the independence and objectivity of the external auditors.
The AC also reviews arrangements by which employees of CapitaLand may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. Pursuant to this, the AC has introduced a Whistle Blowing Policy where staff may raise improprieties to the Chairman, with the confidence that, in good faith, the staff making such reports will be treated fairly and be protected from reprisal. The AC confirms that no reports have been received under the Whistle Blowing Policy thus far.
A total of four AC meetings was held in 2010. The AC also held one meeting with the external auditors and internal auditors, without Management’s presence, to discuss the reasonableness of the financial reporting process, the system of internal control, and the significant comments and recommendations by the auditors.
Principle 12: Internal Controls
Principle 13: Internal Audit
CapitaLand believes that it has in place a system of internal controls to safeguard shareholders’ interests and the Group’s assets, and also to manage risks.
The AC’s responsibilities in the Group’s internal controls are complemented by the work of the FBC and the RC.
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The FBC is chaired by Mr Peter Seah Lim Huat and comprises Mr Liew Mun Leong, Mr Jackson Peter Tai, Professor Kenneth Stuart Courtis and Mr Olivier Lim Tse Ghow, the Group CFO. The FBC reviews the annual budget and financial policies of the Group.
A total of two FBC meetings was held in 2010 to review the financial forecasts and the annual financial plan of the Group. Major business events, initiatives, strategies and areas of concern were also discussed at the meetings. In addition, the FBC reviews and approves updates to the CapitaLand Group Finance Manual.
The RC was formed in September 2002 as part of CapitaLand’s efforts to strengthen its risk management processes and framework. The RC is chaired by Mr James Koh Cher Siang and comprises Mr Richard Edward Hale and Mrs Arfat Pannir Selvam. A total of four RC meetings was held in 2010.
The RC’s role is to: • review the adequacy of CapitaLand’s risk
management process; • review and approve in broad terms,
the risk guidelines and limits. These include country concentration limits and risk-adjusted country hurdle rates for the Group and the SBUs, which are reviewed annually; and
• review CapitaLand’s risk portfolio and risk levels, as assisted by the CapitaLand Corporate Risk Assessment Group, which scrutinises the risk profile of every major project which is proposed and is responsible for compiling the Group Quarterly Risk Report. Included in the report is a monitoring of the utilisation of approved country and treasury limits of the Group.
Based on the review of these Board Committees, the Board, through the AC, is satisfied that there are adequate internal controls in place within the Group.
The Group has an Internal Audit Department (”CL IA”) which reports directly to the Chairman of the AC and administratively to the Group CFO. CL IA plans its internal audit schedules in consultation with, but independently of, Management and its plan is submitted to the AC for approval at the beginning of each year. The AC also meets with CL IA at least once a year without the presence of Management.
CL IA is a corporate member of the Singapore branch of the Institute of Internal Auditors Inc. (”IIA”), which has its headquarters in the USA. CL IA subscribes to, and is guided by, the Standards for the Professional Practice of Internal Auditing (”Standards”) developed by the IIA and has incorporated these Standards into its audit practices.
The Standards set by the IIA cover requirements on: • Independence; • Professional Proficiency; • Scope of Work; • Performance of Audit Work; and • Management of the Internal Auditing
Department.
CL IA staff involved in Information Technology (”IT”) audits are Certified Information System Auditors and members of the Information System Audit and Control Association (”ISACA”) in the USA. The ISACA Information System Auditing Standards provide guidance on the standards and procedures to be applied in IT audits.
To ensure that the internal audits are performed by competent professionals, CL IA recruits and employs suitably qualified staff. In order that their technical knowledge remains current and relevant, CL IA identifies and provides training and development opportunities to these staff.
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(D) COMMUNICATION WITH SHAREHOLDERS
Principle 14: Communication with
Shareholders
Principle 15: Greater Shareholder
Participation
CapitaLand’s Investor Relations and Corporate Communications departments facilitate effective communication with CapitaLand’s shareholders, analysts, fund managers and the media.
CapitaLand’s results for the first three quarters and full-year for financial year 2010 were all released on a timely basis, within 35 days of the end of the relevant quarter and 55 days of the end of the full year.
CapitaLand has also formed the CDC which is chaired by Mr James Koh Cher Siang and comprises Mr Liew Mun Leong and Mrs Arfat Pannir Selvam. The CDC reviews the promptness and comprehensiveness of corporate disclosure issues and announcements made to the SGX-ST, and ensures the adoption of good corporate governance and best practices in terms of transparency to shareholders and the investing community. The views and approvals of the CDC were sought throughout the year on various announcements and news releases issued by CapitaLand.
CapitaLand continues to keep stakeholders and analysts informed of its corporate activities in Singapore and around the world on a timely and consistent basis. CapitaLand makes disclosures on an immediate basis as required
under the Listing Manual of the SGX-ST, or as soon as possible where immediate disclosure is not practicable. Regular briefings and meetings for analysts and the media are held, generally coinciding with the release of the Group’s second quarter and full-year results. During these briefings, Senior Management reviews the Group’s most recent performance and discusses CapitaLand’s outlook. In the interest of transparency and broad dissemination, these briefings are webcast live and accessible to the public on the Group’s website at www.capitaland.com. Materials used in the briefings are also disseminated via SGXNET. Recordings of the briefings are archived on the website.
In 2010, Senior Management conducted about 700 meetings with institutional investors. Management also participated in investor conferences in London, Paris, Amsterdam, Edinburgh, New York, Boston, Denver, San Francisco, Frankfurt, Hong Kong, Tokyo and Beijing besides Singapore. In addition, CapitaLand pursues opportunities to keep its retail shareholders informed through the business media, website postings and other publicity channels. In 2010, as part of continual efforts to maintain a high level of investor access, a CapitaLand Investor Day was organised. Senior Management presented the Group’s activities and strategies to 1,500 retail shareholders who attended the event.
CapitaLand supports the Code’s principle to encourage shareholder participation. Shareholders receive the summary financial
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report and notice of the AGM. Notice of the AGM is also advertised in the press and issued via SGXNET. At the AGM and immediately thereafter, shareholders have the opportunity to communicate their views and discuss with the Board and Management matters affecting CapitaLand. The respective Chairpersons of the AC, NC and ERCC, and the external auditors, would usually be present at the AGM. Voting in absentia and by email may only be possible following careful study to ensure that the integrity of the information and authentication of the identity of shareholders through the web are not compromised and legislative changes are effected to recognise electronic voting.
In 2010, CapitaLand was the winner of the Most Transparent Company (Property Category) in the Securities Investors Association (Singapore) (SIAS) Investors’ Choice Awards for the tenth consecutive year. In addition, CapitaLand was named “Best Overall Managed Property Company in Asia” in Euromoney Best Managed and Governed Companies – Asia Poll 2010, “Best Overall for Corporate Governance” and “Best for Disclosure and Transparency” in Asiamoney’s Corporate Governance Poll 2010 and “Best Disclosure Procedure in Asia Pacific” by World Finance in its Investor Relations Awards 2010. CapitaLand is also a signatory of the Statement of Support Towards Excellence in Corporate Governance, initiated by SIAS in conjunction with the inaugural Singapore Corporate Governance Week 2010.
DEALINGS IN SECURITIES
Taking into consideration the SGX-ST Best Practices Guide, CapitaLand has issued guidelines to directors and employees in the Group prohibiting dealings in CapitaLand’s securities (i) while in possession of material unpublished price-sensitive information, (ii) during two weeks before the release of CapitaLand’s results for the first three quarters and (iii) one month before the release of CapitaLand’s full-year results.
Directors and employees are also prohibited from dealing in securities of other listed companies in the Group while in possession of unpublished price-sensitive information by virtue of their status as directors and/or employees. They are also made aware of the applicability of the insider trading laws at all times.
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Executive Resource and Finance and Corporate
Audit Investment Compensation Nominating Budget Disclosure Risk Board Members Committee Committee Committee Committee Committee Committee Committee
Dr Hu Tsu Tau C
Peter Seah Lim Huat 1 C C C
Liew Mun Leong M M M M
Lim Chin Beng 2 C C
Jackson Peter Tai M M
Richard Edward Hale C M
Dr Victor Fung Kwok King 3
James Koh Cher Siang M C C
Arfat Pannir Selvam M M M M
Professor Kenneth M M Stuart Courtis
Dr Fu Yuning
John Powell Morschel 4 M
Ng Kee Choe 5 M
Simon Claude Israel 6 M M M
Non-Board Member
Olivier Lim Tse Ghow M M
COMPOSITION OF BOARD AND BOARD COMMITTEES
Denotes: C – Chairman M – Member
Notes:
1 Appointed as Chairman of Executive Resource and Compensation Committee and Chairman of Nominating Committee on 16 April 2010.
2 Retired as Director, Chairman of Executive Resource and Compensation Committee and Chairman of Nominating Committee on 16 April 2010.
3 Retired as Director on 16 April 2010. 4 Appointed as Director on 1 February 2010. Appointed as Member of Nominating Committee on 1 January 2011. 5 Appointed as Director and Member of Executive Resource and Compensation Committee on 16 April 2010. 6 Appointed as Director, Member of Executive Resource and Compensation Committee and Member of Investment Committee on
1 July 2010. Appointed as Member of Nominating Committee on 1 January 2011.
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Executive Resource and Finance and
Audit Investment Compensation Budget Risk Board Committee Committee Committee Committee Committee
No. of Meetings Held 5 4 4 1 2 4
Board Members
Dr Hu Tsu Tau 5 4
Peter Seah Lim Huat 5 1 2
Liew Mun Leong 5 4 2
Lim Chin Beng 1 1 1
Jackson Peter Tai 5 4 2
Richard Edward Hale 5 4 4
Dr Victor Fung Kwok King 2 1
James Koh Cher Siang 5 4 4
Arfat Pannir Selvam 5 4 4
Professor Kenneth 5 3 2 Stuart Courtis
Dr Fu Yuning 1
John Powell Morschel 3 4
Ng Kee Choe 4 3
Simon Claude Israel 5 2 3
Non-Board Member
Olivier Lim Tse Ghow 4 2
ATTENDANCE RECORD OF MEETINGS OF THE BOARD AND BOARD COMMITTEES IN 2010
Notes:
1 Retired as Director, Chairman of Executive Resource and Compensation Committee and Chairman of Nominating Committee on 16 April 2010.
2 Retired as Director on 16 April 2010. 3 Appointed as Director on 1 February 2010. Appointed as Member of Nominating Committee on 1 January 2011. 4 Appointed as Director and Member of Executive Resource and Compensation Committee on 16 April 2010. 5 Appointed as Director, Member of Executive Resource and Compensation Committee and Member of Investment Committee on
1 July 2010. Appointed as Member of Nominating Committee on 1 January 2011.
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At the core of CapitaLand’s risk management strategy is an unwavering commitment to enhance shareholders’ value by optimizing the risk-return relationship. It is a dynamic and constantly adapting approach that is both innovative and responsive to market changes. Risk assessment and management is an integral part of the strategic and operational decision-making process at all levels of the CapitaLand Group.
Since the formation of CapitaLand in 2000, a comprehensive risk management framework has been formalised across the Group. In 2002, a Risk Committee comprising independent board directors was formed as part of CapitaLand’s efforts to strengthen its risk management processes and framework.
The Risk Committee currently comprises Mr James Koh Cher Siang (Chairman), Mr Richard Edward Hale and Mrs Arfat Pannir Selvam. The Group’s President and CEO Mr Liew Mun Leong and other senior management regularly attend Risk Committee meetings. The Risk Committee is assisted by the Risk Assessment Group (RAG), an independent in-house unit with members having diverse and vast experience in financial and operational risk management.
Harnessing in-house and external expertise, RAG has pioneered a real estate industry specific Value-at-Risk (VaR) model that has been adapted from the banking industry. Every quarter, RAG uses this model as a foundation in generating a comprehensive group-wide portfolio risk report, measuring and highlighting relevant risks and exposures vis-à-vis the Group’s financial risk capacity (as determined by the Risk Committee) and prevailing market conditions. This state-of- the-art model measures the relative and absolute riskiness of the Group’s exposures using a historical simulation method while simultaneously incorporating relevant timely market parameters. Clearly demonstrating RAG’s adaptability, RAG adjusted the model during the year by adapting it to the changing business environment that CapitaLand operates in. One new risk measurement developed was the interest cost at risk stress simulation method. This new technique measures
RISK ASSESSMENT AND MANAGEMENT
Since the formation of
CapitaLand in 2000, a
comprehensive risk
management framework
has been formalised
across the Group
Harnessing in-house
and external expertise,
RAG has pioneered a real
estate industry specific
Value-at-Risk (VaR) model
that has been adapted
from the banking industry
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the potential rise in interest cost for a given debt portfolio in view of the prevailing low interest rate environment.
Learning from the failures of established risk management methodologies during the last financial crisis, it should be noted that CapitaLand’s risk management approach is not only quantitative but also has a strong qualitative and integrative business approach. RAG proactively scans the wider business, economic, social and political environment for short-, mid- and long-term risk trends and identifies key risk elements promptly. RAG has been known to be boldly contrarian in its risk approach when the market situation calls for it and has proven to be astute in its observation and in-depth analysis of risk trends for key markets like China and Vietnam. Such findings are presented to the Risk Committee and to senior management in special- focus reports and are useful in substantiating and supporting business strategies from a risk-balanced perspective.
CapitaLand maintains a prudent risk profile by counterchecking business initiatives with RAG and by striking a balance for investments in a mix of stable assets and development properties. Unique risk management models, developed in-house, enable the Group to engage in a “disciplined aggression” investment strategy while synthesizing valuable information from both primary and secondary sources. RAG has established a risk-based country asset allocation system to manage country transfer risk effectively and avoid concentration risk. This uses a multi-faceted and risk-adjusted methodology based on CapitaLand’s investment strategy, sovereign risk ratings by international rating agencies and macroeconomic consensus views from the Group’s in-house Economics and Research Units, among others.
RAG performs independent risk evaluations of investment proposals by the Group’s business units above a stipulated investment value threshold. Where applicable, RAG makes recommendations to improve the structure of investment proposals to mitigate risks and optimise the risk-return profile. RAG is instrumental in calculating the risk-adjusted weighted average cost of capital and target returns according to their respective risk profiles for the various countries and business units that the Group is active in. This is to ensure that for every investment undertaken, the potential returns must commensurate with the risks undertaken so as to create incremental value for shareholders on a risk-adjusted basis.
As CapitaLand steps into its next 10 years, it will continue to challenge and adjust its risk management systems and methodologies in a timely manner so as to manage risks proactively, preserve capital and ultimately enhance shareholders’ value. The Group’s key risk management principle remains its objective of optimising risk dynamically as business strategies are implemented in a fast-changing environment.
CapitaLand’s risk
management approach
is not only quantitative
but also has a strong
qualitative and integrative
business approach
For every investment
undertaken, the
potential returns must
commensurate with the
risks undertaken so as to
create incremental value
for shareholders on a
risk-adjusted basis
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CapitaLand communicates regularly with shareholders, investors, analysts and the media to ensure all stakeholders are informed of its activities on a timely and consistent basis.
The Group maintains a high level of investor access through face-to-face meetings, teleconferences, investor conferences, roadshows and site visits. In 2010, CapitaLand met with about 670 investors globally and participated in investor conferences and roadshows in Singapore, Beijing, Hong Kong, Shanghai, London, New York. Site familiarisation tours were also organised for analysts and investors to CapitaLand’s projects across Asia. Formal and informal networking events were organised for investors and analysts to engage and interact with senior management. Aside from institutional investors, CapitaLand has also been committing time and resources to cater to retail investors. To celebrate its 10th Anniversary, CapitaLand organised an Investor Day specially for its retail shareholders. A total of 1,500 retail investors were present to listen to presentations made by top and senior management.
CapitaLand engages the media and the investment community through news releases, media and analyst briefings, and familiarisation trips. The Group’s Investor Relations website provides comprehensive company information such as news releases, legal announcements, financial results and annual reports, and includes features like push mail and RSS feeds which provide real-time updates. All news releases and legal announcements are also available on the Singapore Exchange website.
At the half-year and full-year financial results briefings, top management briefed the media and analysts on CapitaLand’s performance. During the year, top management were interviewed by key Singapore and international media on issues including the Group’s growth strategy, acquisition of Orient Overseas Developments Limited, and investment in human capital.
CapitaLand continues to engage the media in the various countries it operates in. In 2010, key media from Chengdu, Guangzhou, Shanghai and Hangzhou in China visited Singapore and gained insight into CapitaLand’s properties and operations. Ahead of CapitaMalls Malaysia Trust (CMMT)’s listing, key Malaysian media visited CapitaLand’s malls in Singapore while Singapore media were given a familiarisation tour of CMMT’s malls in Malaysia. Singapore media also attended and interviewed top management at the official opening of Ascott Huai Hai Road in Shanghai, China, and the topping-out of The Vista condominium in Ho Chi Minh City in Vietnam. In addition, they learnt more about CapitaLand’s plans for an integrated residential-retail development at Bedok Town Centre during a visit to the newly-acquired site.
STAKEHOLDER COMMUNICATIONS
In 2010, CapitaLand
met with about 670
investors globally and
participated in investor
conferences and
roadshows in
Singapore, Beijing,
Hong Kong, Shanghai,
London, New York
In 2010, key media
from Chengdu,
Guangzhou, Shanghai
and Hangzhou in China
visited Singapore and
gained insight into
CapitaLand’s properties
and operations
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The Group’s stakeholder communication efforts have been recognized by the investment community. In 2010, CapitaLand won multiple awards, including “Most Transparent Company (Property)” award from SIAS, “Overall Best Company in Singapore for Corporate Governance” by Asiamoney’s Corporate Governance Poll 2010, as well as the “Best Overall Investor Relations (Large Cap)” by IR Magazine SEA Awards.
• ASIAMONEY CORPORATE GOVERNANCE POLL 2010
OVERALL BEST COMPANY IN SINGAPORE FOR CORPORATE GOVERNANCE (2nd consecutive year)
BEST IRO IN SINGAPORE
• SECURITIES INVESTORS ASSOCIATION SINGAPORE (SIAS)
MOST TRANSPARENT COMPANY (PROPERTY CATEGORY) – 10th CONSECUTIVE YEAR
• IR MAGAZINE SEA AWARDS
GRAND PRIX FOR BEST OVERALL INVESTOR RELATIONS (LARGE CAP)
OLIVIER LIM – BEST INVESTOR RELATIONS BY A CFO
• WORLD FINANCE
BEST FINANCIAL DISCLOSURE PROCEDURE IN ASIA PACIFIC
• THE ASSET
OLIVIER LIM – CFO OF THE YEAR
• FINANCE ASIA
BEST CFO (SINGAPORE) – 2nd
1st QUARTER
• Daiwa Investment Conference
• FY2009 Financial results briefing to media and analysts and live webcast
• Credit Suisse Asian Investment Conference
2010 INVESTOR RELATIONS CALENDAR
2nd QUARTER
• Annual General Meeting
• Release of 1Q2010 financial results
• OSK/DMG’s Spore Property Corporate Day
• Citi Asia Pacific Property Conference
• DB Access Asia Conference
• CLSA Corporate Access
• 7th Nomura Asia Equity Forum
• Nomura Non-Deal Roadshow
2010 AWARDS (LISTING)
• Goldman Sachs Non-Deal Roadshow
• JP Morgan Asia Pacific Equity Conference
• DBS Vickers Pulse of Asia Conference
3rd QUARTER
• 1H2010 financial results briefing to media and analysts and live webcast
• CLSA Investors’ Forum
4th QUARTER
• Exane Asian Convertible Bonds Conference
• Morgan Stanley Asia Pacific Summit
• KBC Convertible Bonds Conference
• Macquarie Global Property Series
• UBS Non-Deal Roadshow
CapitaLand has won
multiple awards,
including “Overall Best
Company in Singapore for
Corporate Governance”
award by Asiamoney’s
Corporate Governance
Poll for the second
year running.
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ECONOMIC VALUE ADDED STATEMENTS
2010 2009
Note S$ million S$ million
Net Operating Profit Before Tax 1,115.2 825.9 Adjust for:
Share of results of associates and joint ventures 820.8 269.2 Interest expense 458.8 466.6 Others 123.8 268.7
Adjusted Profit Before Interest and Tax 2,518.6 1,830.4 Cash operating taxes 1 (274.0) (134.7)
Net Operating Profit After Tax (NOPAT) 2,244.6 1,695.7
Average capital employed 2 26,751.4 22,747.3 Weighted average cost of capital (%) 3 6.400 6.887
Capital Charge (CC) 1,712.1 1,566.6
Economic Value Added (EVA) [NOPAT - CC] 532.5 129.1 Non-controlling interests (99.7) 206.8
Group EVA attributable to Owners of the Company 432.8 335.9
Note 1: The reported current tax is adjusted for the statutory tax impact of interest expense.
Note 2: Monthly average capital employed included equity, interest-bearing liabilities, timing provision, cumulative goodwill and present value of operating leases.
Major Capital Components S$ million
Borrowings 10,175.0 Equity 16,067.8 Others 508.6
Total 26,751.4
Note 3 : The weighted average cost of capital is calculated as follows:
i) Cost of Equity using Capital Asset Pricing Model with market risk premium at 5.0% (2009: 5.0%) per annum;
ii) Risk-free rate of 2.59% (2009: 2.55%) per annum based on yield-to-maturity of Singapore Government 10-year Bonds;
iii) Ungeared beta ranging from 0.64 to 1.09 (2009: 0.51 to 1.06) based on the risk categorisation of CapitaLand’s strategic business units; and
iv) Cost of Debt rate at 4.22% (2009: 4.30%) per annum using 5-year Singapore Dollar Swap Offer rate plus 187.5 basis points (2009: 187.5 basis points).
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2010 2009
S$ million S$ million
Value Added From:
Revenue earned 3,382.7 2,957.4 Less: Bought in materials and services (1,937.1) (1,731.4)
Gross Value Added 1,445.6 1,226.0 Share of results of associates and joint ventures 820.9 269.2 Exchange (losses)/gains (net) (27.5) 23.0 Other operating income (net) 734.9 566.7
1,528.3 858.9
Total Value Added 2,973.9 2,084.9
Distribution:
To employees in wages, salaries and benefits 475.3 421.2 To government in taxes and levies 314.6 146.3 To providers of capital in: - Net interest on borrowings 433.8 430.3 - Dividends to shareholders 447.4 297.2
1,671.1 1,295.0 Balance Retained in the Business:
Depreciation and amortisation 59.6 63.0 Revenue reserves net of dividends to owners of the Company 825.8 755.8 Non-controlling interests 397.0 (44.3)
1,282.4 774.5 Non-Production Costs:
Allowance for doubtful receivables 6.4 15.4 Fidelity losses arising from financial irregularities 14.0 –
Total Distribution 2,973.9 2,084.9
Productivity Analysis:
Value added per employee (S$'000) # 223 192 Value added per dollar of employment cost (S$) 3.04 2.91 Value added per dollar sales (S$) 0.43 0.41
# Based on average 2010 headcount of 6,482 (2009: 6,399).
VALUE ADDED STATEMENTS
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SHAREHOLDING STATISTICS AS AT 28 FEBRUARY 2011
SHARE CAPITAL FULLY PAID
S$6,323,369,888.27 (comprising 4,262,936,446 fully paid Ordinary Shares; voting rights: one vote per share)
TWENTY LARGEST SHAREHOLDERS
As shown in the Register of Members and Depository Register
Name No. of Shares %
1 Temasek Holdings (Private) Limited 1,680,704,140 39.43 2 Citibank Nominees Singapore Pte Ltd 699,434,089 16.41 3 DBS Nominees (Private) Limited 456,128,294 10.70 4 DBSN Services Pte. Ltd. 260,454,908 6.11 5 HSBC (Singapore) Nominees Pte Ltd 205,760,169 4.83 6 United Overseas Bank Nominees (Private) Limited 129,761,010 3.04 7 Raffles Nominees (Pte.) Limited 40,829,118 0.96 8 BNP Paribas Securities Services Singapore Branch 34,850,789 0.82 9 DB Nominees (Singapore) Pte Ltd 21,481,235 0.50 10 UOB Kay Hian Private Limited 15,750,703 0.37 11 OCBC Nominees Singapore Private Limited 12,539,247 0.29 12 Phillip Securities Pte Ltd 12,127,980 0.28 13 Pei Hwa Foundation Limited 11,820,335 0.28 14 Lee Pineapple Company (Pte) Limited 10,000,000 0.23 15 DBS Vickers Securities (Singapore) Pte Ltd 9,772,495 0.23 16 Tatardjo Angkasa or Dewi Widjaja 9,759,990 0.23 17 OCBC Securities Private Limited 9,435,051 0.22 18 BNP Paribas Nominees Singapore Pte Ltd 8,184,174 0.19 19 Morgan Stanley Asia (Singapore) Securities Pte Ltd 7,726,041 0.18 20 Merrill Lynch (Singapore) Pte. Ltd. 7,098,037 0.17
Total 3,643,617,805 85.47
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SUBSTANTIAL SHAREHOLDERS
As shown in the Register of Substantial Shareholders as at 28 February 2011
No. of ordinary shares No. of ordinary shares in which substantial shareholder in which substantial shareholder
Substantial Shareholder has a direct interest is deemed to have an interest
Temasek Holdings (Private) Limited 1,680,704,140 63,606,870(1)
Note: (1) By virtue of Section 7 of the Companies Act, Cap. 50 of Singapore, Temasek Holdings (Private) Limited (“Temasek”) is deemed to have
an interest in 63,606,870 ordinary shares in which its associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance.
SIZE OF HOLDINGS
No. of % of No. of % of Size of Shareholdings shareholders shareholders shares shares
1 - 999 930 1.46 320,669 0.01 1,000 - 10,000 52,427 82.15 205,819,879 4.83 10,001 - 1,000,000 10,419 16.32 353,442,955 8.29 1,000,001 and above 45 0.07 3,703,352,943 86.87
Total 63,821 100.00 4,262,936,446 100.00
Approximately 58.94% of the issued ordinary shares are held in the hands of the public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited is complied with.
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OTHER INFORMATION 1. DIRECTORS’ REMUNERATION
(a) Directors’ Compensation Table for the Financial Year Ended 31 December 2010:
Bonus and Salary inclusive other benefits Directors’ fees
of AWS and inclusive of inclusive of Awards employer’s CPF employer’s CPF(1) attendance fees(2) of shares(3) Total
Directors of the Company $ $ $ $ $
Payable by Company:
Dr Hu Tsu Tau – – 193,000 52,404 245,404 Peter Seah Lim Huat – – 169,250 63,123 232,373 Liew Mun Leong 1,298,840 3,602,021 – 1,792,701 6,693,562 Lim Chin Beng (4) – – 31,678 20,775 52,453 Jackson Peter Tai – – 157,400 36,921 194,321 Richard Edward Hale – – 138,000 56,374 194,374 Dr Victor Fung Kwok King (5) – – 22,900 – 22,900 James Koh Cher Siang – – 140,000 48,831 188,831 Arfat Pannir Selvam – – 151,000 52,801 203,801 Professor Kenneth Stuart
Courtis – – 155,700 36,921 192,621 Dr Fu Yuning – – 61,000 22,629 83,629 John Powell Morschel (6) – – 77,500 21,041 98,541 Ng Kee Choe (6) – – 56,292 – 56,292 Simon Claude Israel (6) – – 55,500 – 55,500
Sub-Total 1 1,298,840 3,602,021 1,409,220 2,204,521 8,514,602
Payable by Subsidiaries:
Liew Mun Leong – – – 67,058 67,058 Lim Chin Beng – – 63,500 – 63,500 Richard Edward Hale – – 80,000 – 80,000 James Koh Cher Siang – – 117,442 6,457 123,899 Arfat Pannir Selvam – – 69,964 29,517 99,481 Dr Fu Yuning – – 46,000 18,679 64,679
Sub-Total 2 – – 376,906 121,711 498,617
Total for Directors
of the Company 1,298,840 3,602,021 1,786,126 2,326,232 9,013,219
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2010 is lower than 2009 due to lower portfolio gain. The EVA bonus accrued for year 2010 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) The directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(3) For the year 2010, the awards granted under the CapitaLand Restricted Stock Plan (“RSP”) to all Directors except for Mr Liew Mun Leong are time-based with no performance conditions and will be released over a vesting period of two years. The awards of shares figures disclosed are based on the fair value of the shares at the time of grant. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
(4) Mr Lim Chin Beng retired from the Board of the Company on 16 April 2010. He continued to be a Director and the Chairman of The Ascott Limited, a wholly-owned subsidiary.
(5) Dr Victor Fung Kwok King had declined the grant of award of shares. He retired from the Board of the Company on 16 April 2010.
(6) Mr John Powell Morschel, Mr Ng Kee Choe and Mr Simon Claude Israel were appointed as Directors of the Company on 1 February 2010, 16 April 2010 and 1 July 2010, respectively. Fees are payable to Mr Simon Claude Israel’s employer.
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1. DIRECTORS’ REMUNERATION (cont’d) (b) Directors’ Compensation Table for the Financial Year Ended 31 December 2009:
Bonus and Salary inclusive other benefits Directors’ fees Contingent
of AWS and inclusive of inclusive of awards employer’s CPF employer’s CPF(1) attendance fees(2) of shares(3) Total
Directors of the Company $ $ $ $ $
Payable by Company:
Dr Hu Tsu Tau – – 130,634 58,463 189,097 Peter Seah Lim Huat – – 154,243 58,463 212,706 Liew Mun Leong 1,019,148 3,828,384 – 947,858 5,795,390 Lim Chin Beng – – 105,184 53,591 158,775 Jackson Peter Tai – – 141,494 34,103 175,597 Richard Edward Hale – – 130,534 53,591 184,125 Dr Victor Fung Kwok King (4) – – 59,940 – 59,940 James Koh Cher Siang – – 132,351 58,463 190,814 Arfat Pannir Selvam – – 142,343 43,848 186,191 Professor Kenneth Stuart
Courtis – – 147,794 34,103 181,897 Dr Fu Yuning (5) – – 38,814 – 38,814
Sub-Total 1 1,019,148 3,828,384 1,183,331 1,342,483 7,373,346
Payable by Subsidiaries:
Lim Chin Beng – – 63,500 – 63,500 Richard Edward Hale – – 78,000 – 78,000 James Koh Cher Siang – – 131,000 – 131,000 Arfat Pannir Selvam – – 9,000 – 9,000 Dr Fu Yuning – – 6,900 – 6,900
Sub-Total 2 – – 288,400 – 288,400
Total for Directors
of the Company 1,019,148 3,828,384 1,471,731 1,342,483 7,661,746
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2009 is higher than 2008 due to higher portfolio gain. The EVA bonus accrued for year 2009 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) The directors’ fees were approved by the shareholders and had since been paid.
(3) With effect from the financial year ended 31 December 2009, the Company will be disclosing the value of the contingent awards of shares granted to its Directors. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the CapitaLand Restricted Stock Plan (“RSP”) and the CapitaLand Performance Share Plan (“PSP”) at the time of grant. All Directors are granted the contingent awards of shares pursuant to RSP except for Mr Liew Mun Leong who is granted the contingent awards of shares pursuant to both RSP and PSP. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The fair value of the shares determined for the contingent awards in 2009 is significantly lower than 2008.
(4) Dr Victor Fung Kwok King had declined the grant of contingent awards of shares.
(5) Dr Fu Yuning was appointed as a director of the Company on 27 July 2009.
(c) Number of Directors in Remuneration Bands:
Remuneration Bands 2010 2009
$500,000 and above 1 1 $250,000 to $499,999 0 0 Below $250,000 13 10
Total 14 11
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2. INTERESTED PERSON TRANSACTIONS
Interested person transactions carried out during the financial year which fall under Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited are as follows:
2010 The Group $’000
Transactions for the Sale of Goods and Services:
Associates of Temasek Holdings (Private) Limited 7,687 Singapore Airlines Limited 3,200
Transactions for the Purchase of Goods and Services:
Associates of Temasek Holdings (Private) Limited 336
Consideration for the sale of units in residential developments
to the directors and their associates at
prevailing prices applicable to third parties:
Liew Mun Leong and his associates – 2 units of The Interlace 6,205 Associate of Liew Mun Leong – 1 unit of The Metropolis 219 Associates of Peter Seah Lim Huat – 1 unit of The Interlace 3,100
3. KEY EXECUTIVES’ REMUNERATION
Key Executives’ Compensation Table for the Financial Year Ended 31 December 2010:
Total Compensation (1) Bands Executives
$2,250,000 to $2,499,999 Jennie Chua Kheng Yeng
$2,500,000 to $2,749,999 –
$2,750,000 to $2,999,999 Wen Khai Meng and Olivier Lim Tse Ghow
More than $3,000,000 Lim Ming Yan
1 Total compensation comprises salary, annual wage supplement, bonus, employer’s CPF, contingent awards of shares and other benefits in kind. The bonus is based on an accrual basis and accrued for the performance of the same year. The contingent awards of shares are based on the fair value of the shares comprised in the baseline awards under the CapitaLand Restricted Stock Plan (“RSP”) and the CapitaLand Performance Share Plan (“PSP”) at the time of grant. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP.
4. USE OF PROCEEDS
In September 2009, the Company issued $1.2 billion principal amount of convertible bonds due in 2016. As of 31 December 2010, the Company has utilised $659 million of the proceeds and the balance of proceeds unutilised was $541 million.
5. PROPERTY PORTFOLIO
The Group’s property portfolio as at 31 December 2010 is set out in the booklet “Property Portfolio 31 December 2010” accompanying this Annual Report.
OTHER INFORMATION
CONTENTS Directors’ Report
106
Statement by Directors 120
Independent Auditors’ Report to the Members of CapitaLand Limited
121
Balance Sheets 122
Income Statements 123
Statements of Comprehensive Income 124
Statements of Changes in Equity 125
Consolidated Statement of Cash Flows 128
Notes to the Financial Statements 130
STATUTORY ACCOUNTS
DIRECTORS’ REPORT
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We are pleased to submit this annual report to the members of the Company, together with the audited financial statements for the financial year ended 31 December 2010.
DIRECTORS The directors in office at the date of this report are as follows:
Dr Hu Tsu Tau Peter Seah Lim Huat Liew Mun Leong Jackson Peter Tai Richard Edward Hale James Koh Cher Siang Arfat Pannir Selvam Professor Kenneth Stuart Courtis Dr Fu Yuning John Powell Morschel Ng Kee Choe (appointed on 16 April 2010) Simon Claude Israel (appointed on 1 July 2010)
DIRECTORS’ INTERESTS IN ShARES OR DEBENTURES Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures or options of the Company or of related corporations either at the beginning of the financial year (or date of appointment, if later) or at the end of the financial year.
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50, particulars of interests of directors who held office at the end of the financial year in shares, debentures, options and awards in the Company and its related corporations are as follows:
holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
The Company
Ordinary shares Dr Hu Tsu Tau 180,929 211,893 Peter Seah Lim Huat 180,741 267,417 Liew Mun Leong 2,628,307 3,356,436 Jackson Peter Tai 389,060 600,572 Richard Edward Hale 683,106 839,549 James Koh Cher Siang 64,648 193,633 Arfat Pannir Selvam 75,696 179,799 Professor Kenneth Stuart Courtis 101,614 117,697 Ng Kee Choe 10,000 10,000
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DIRECTORS’ INTERESTS IN ShARES OR DEBENTURES (cont’d)
holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
The Company (cont’d)
Options to subscribe for ordinary shares exercisable from 26/02/2006 to 25/02/2010 at an exercise price of $1.791 per share Jackson Peter Tai 99,090 – Options to subscribe for ordinary shares exercisable from 25/02/2007 to 24/02/2011 at an exercise price of $3.221 per share Dr Hu Tsu Tau 41,760 41,760 Peter Seah Lim Huat 60,660 – Jackson Peter Tai 94,360 – Richard Edward Hale 128,060 – James Koh Cher Siang 134,800 34,800 Arfat Pannir Selvam 80,880 – Options to subscribe for ordinary shares exercisable from 25/02/2007 to 24/02/2016 at an exercise price of $3.181 per share Liew Mun Leong 493,600 – Contingent award of Performance shares2 to be delivered after 2009 Liew Mun Leong 0 to 727,3384 –¶ ¶ No share was released under the 2007 award.
Contingent award of Performance shares2 to be delivered after 2010 Liew Mun Leong (368,7261 shares) 0 to 720,6604 0 to 737,4524
Contingent award of Performance shares2 to be delivered after 2011 Liew Mun Leong (370,2581 shares) 0 to 718,3204 0 to 740,5164
Contingent award of Performance shares2 to be delivered after 2012 Liew Mun Leong (381,0391 shares) – 0 to 762,0784
Unvested Restricted shares3 to be delivered after 2007 Liew Mun Leong 97,1327 – Unvested Restricted shares3 to be delivered after 2008 Dr Hu Tsu Tau 11,8766 – Peter Seah Lim Huat 6,9286 – Liew Mun Leong 105,3988 53,5541,7
Jackson Peter Tai 6,9286 – Richard Edward Hale 10,8866 – James Koh Cher Siang 9,8976 – Arfat Pannir Selvam 8,9076 – Professor Kenneth Stuart Courtis 4,9496 –
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DIRECTORS’ INTERESTS IN ShARES OR DEBENTURES (cont’d)
holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
The Company (cont’d)
Unvested Restricted shares3 to be delivered after 2009 Dr Hu Tsu Tau 0 to 44,3915 19,3361,6
Peter Seah Lim Huat 0 to 44,3915 19,3361,6
Liew Mun Leong 0 to 295,4645 171,9581,8
Jackson Peter Tai 0 to 25,8955 11,2801,6
Richard Edward Hale 0 to 40,6925 17,7251,6
James Koh Cher Siang 0 to 44,3915 19,3361,6
Arfat Pannir Selvam 0 to 33,2945 14,5031,6
Professor Kenneth Stuart Courtis 0 to 25,8955 11,2801,6
Award of Restricted shares3 to be delivered after 2010 Dr Hu Tsu Tau – 13,3731,5
Peter Seah Lim Huat – 16,1081,5
Jackson Peter Tai – 9,4221,5
Richard Edward Hale – 14,3861,5
James Koh Cher Siang – 12,4611,5
Arfat Pannir Selvam – 13,4741,5
Professor Kenneth Stuart Courtis – 9,4221,5
Dr Fu Yuning – 5,7751,5
John Powell Morschel – 5,3691,5
Contingent award of Restricted shares3 to be delivered after 2010 Liew Mun Leong (201,2751 shares) – 0 to 301,9135
$1.3 billion convertible bonds 3.125% due 2018 (Aggregate principal amount of bonds which remains outstanding is $1.05 billion) Liew Mun Leong – $1,500,000
Related Corporations CapitaMalls Asia Limited
Ordinary shares Dr Hu Tsu Tau 29,000 29,000 Peter Seah Lim Huat 29,000 29,000 Liew Mun Leong 442,000 442,000 Jackson Peter Tai 29,000 29,000 Richard Edward Hale 38,000 38,000 James Koh Cher Siang 43,000 43,000 Arfat Pannir Selvam 54,000 54,000 Dr Fu Yuning 54,000 54,000 Ng Kee Choe 130,000 130,000
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DIRECTORS’ INTERESTS IN ShARES OR DEBENTURES (cont’d)
holdings in the name of the director, spouse and/or infant children
At beginning of the year/date of At end of appointment the year
Related Corporations (cont’d) CapitaMalls Asia Limited (cont’d)
Award of Restricted shares3 to be delivered after 2010 Liew Mun Leong – 29,0805
James Koh Cher Siang – 2,8005
Arfat Pannir Selvam – 12,8005
Dr Fu Yuning – 8,1005
The Ascott Capital Pte Ltd Liew Mun Leong - $50 million 3.10% Fixed Rate Notes due 2010 $1,000,000 – - $150 million 4.70% Fixed Rate Notes due 2011 $1,000,000 $1,000,000 - $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 $1,000,000 - $50 million 5.15% Fixed Rate Notes due 2014 $1,000,000 $1,000,000 Footnotes:
1 On 30 April 2010 and 3 May 2010, adjustments were made to the exercise prices of unexercised options and the number of shares under awards respectively. The adjustments were made in accordance with the rules of the CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan, arising from the payment of a special dividend of $0.05 per issued ordinary share for the financial year ended 31 December 2009.
2 Performance shares are shares under awards pursuant to the CapitaLand Performance Share Plan.
3 Restricted shares are shares under awards pursuant to the CapitaLand Restricted Stock Plan or CMA Restricted Stock Plan.
4 The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
5 The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of two to three years. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. For the year 2010, the awards granted to non-executive directors are time-based with no performance conditions and will be released over a vesting period of two years.
6 Being the unvested half of the award.
7 Being the unvested one-third of the award.
8 Being the unvested two-thirds of the award.
There was no change in any of the above-mentioned directors’ interests in the Company and its related corporations between the end of the financial year and 21 January 2011.
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DIRECTORS’ INTERESTS IN CONTRACTS During the financial year, the directors’ interests in contracts relate to:
(i) sale of residential properties to directors and their associates:
Directors Projects Transaction Amount
Liew Mun Leong and his family members 2 units of The Interlace $6,204,500 Family members of Peter Seah Lim Huat 1 unit of The Interlace $3,099,500 Family member of Liew Mun Leong 1 unit of The Metropolis RMB1,116,519
(ii) professional advisory fees of $2,843 paid to Professor Kenneth Stuart Courtis;
(iii) professional fees of $16,590 paid or payable to Selvam LLC (formerly known as Arfat Selvam Alliance LLC), of which Mrs Arfat Pannir Selvam is a shareholder; and
(iv) an ongoing tenancy lease agreement entered into between a related corporation and a company in which Mr Liew Mun Leong is a shareholder.
Save as disclosed above, since the end of the last financial year, no other director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member or with a company in which he has a substantial financial interest.
Directors’ emoluments are disclosed in “Other Information”.
ARRANgEMENTS TO ENABLE DIRECTORS TO ACqUIRE ShARES AND DEBENTURES Except as disclosed under the “Directors’ Interests in Shares or Debentures” and “Share Plans” sections of this report, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
ShARE PLANS The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the Share Plans. The ERCC comprises the following members:
Mr Peter Seah Lim Huat (Chairman) Mr Ng Kee Choe Mr Simon Claude Israel
(a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan The CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand Restricted
Stock Plan (collectively referred to as the “Existing Share Plans”) were approved and adopted by the members of the Company at an Extraordinary General Meeting (“EGM”) held on 16 November 2000.
A new CapitaLand PSP 2010 and CapitaLand RSP 2010 (together, the “New Share Plans”) were approved by the members of the Company at the EGM held on 16 April 2010. These new plans are intended to replace the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan under the Existing Share Plans. The Company did not extend the duration of, or replace, the existing CapitaLand Share Option Plan. The Existing Share Plans were terminated following the adoption of the New Share Plans. However, all awards granted under the Existing Share Plans prior to its termination will continue to be valid and be subject to the terms and conditions of the Existing Share Plans.
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ShARE PLANS (cont’d) (a) CapitaLand Share Option Plan, Performance Share Plan and Restricted Stock Plan (cont’d) The CapitaLand RSP 2010 is intended to apply to a broader base of executives as well as to the non-executive
directors, while the CapitaLand PSP 2010 is intended to apply to a select group of key senior management.
Under the CapitaLand PSP 2010, the awards granted are conditional on performance targets set based on medium-term corporate objectives. Awards represent the right of a participant to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the Company achieving prescribed performance target(s). Awards are released once the ERCC is satisfied that the prescribed target(s) have been achieved. There are no vesting periods beyond the performance achievement periods.
Under the CapitaLand RSP 2010, awards granted to eligible participants vest only after the satisfactory completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-based restricted awards). No minimum vesting periods are prescribed under the CapitaLand RSP 2010.
Awards granted under the CapitaLand RSP 2010 differ from awards granted under the CapitaLand PSP 2010 in that an extended vesting period is normally imposed beyond the performance target completion date, that is, they also incorporate a time-based service condition as well, to encourage participants to continue serving the Group beyond the achievement date of the pre-determined performance target(s). In addition, the CapitaLand RSP 2010 also enable grants of fully paid shares to be made to non-executive directors as part of their remuneration in respect of their office as such in lieu of cash.
The aggregate number of new shares which may be allotted, issued and/or delivered pursuant to awards granted under the New Share Plans on any date, when aggregated with existing shares (including shares held in treasury and cash equivalents) delivered and/or to be delivered, pursuant to the New Shares Plans, and all shares, options or awards granted under any other share schemes of the Company then in force, shall not exceed 8% of the total number of issued shares (excluding treasury shares) from time to time.
The duration of each share plan is 10 years commencing on 16 April 2010. As at the end of the financial year, there were no issued shares of the Company under the New Share Plans.
(b) Options Exercised The Company ceased to grant options under the CapitaLand Share Option Plan since 2007. During the
financial year, there were new ordinary shares issued for cash in the capital of the Company and its subsidiary pursuant to the exercise of options granted:
Exercise Price Number of Name of Company (per share) Shares Issued CapitaLand Limited $0.30 to $4.19 8,048,400 Australand A$0.22 144,250**
** The number of stapled securities issued pursuant to the exercise of options were prior to the consolidation of the stapled securities in May 2010.
Save as disclosed above, there was no share issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company and its subsidiary.
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ShARE PLANS (cont’d) (c) Unissued Shares under Options At the end of the financial year, there were the following unissued ordinary shares of the Company
under options: Exercise Price* Number of Number of (per share) Unissued Shares holders Expiry Date $ under Options
The Company Non-Executive Directors 7 24/02/2011 3.22 285,280 (including non-executive directors of subsidiaries and former directors) Group Executives 14 18/06/2011 1.15 96,741 14 10/05/2012 0.49 62,459 25 28/02/2013 0.30 239,488 4 29/08/2013 0.30 7,846 67 27/02/2014 0.50 615,517 7 27/08/2014 0.85 43,210 179 25/02/2015 1.72 1,811,796 25 26/08/2015 2.15 111,090 410 24/02/2016 3.18 6,377,502 1 19/06/2016 3.65 87,350 54 01/09/2016 4.09 662,066
10,115,065
Total 10,400,345
* On 30 April 2010, adjustments were made to the exercise prices of unexercised options in accordance with the rules of the CapitaLand Share Option Plan arising from the payment of a special dividend of $0.05 per issued ordinary share for the financial year ended 31 December 2009. Exercise prices of the unexercised options were adjusted lower by $0.05 to $0.10 per option to compensate for the decline in values of the said options.
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ShARE PLANS (cont’d) (c) Unissued Shares under Options (cont’d) The aggregate number of options granted since the commencement of the CapitaLand Share Option Plan
to the end of the financial year is as follows:
Aggregate options granted since the commencement Aggregate Aggregate Aggregate of the CapitaLand options options lapsed/ outstanding Participants Share Option Plan exercised cancelled options
Directors of the Company: Dr Hu Tsu Tau 281,760 (240,000) – 41,760 Peter Seah Lim Huat 494,460 (494,460) – – Liew Mun Leong 6,257,200 (6,257,200) – – Jackson Peter Tai 722,250 (502,250) (220,000) – Richard Edward Hale 608,230 (608,230) – – James Koh Cher Siang 134,800 (100,000) – 34,800 Arfat Pannir Selvam 100,880 (100,880) – –
8,599,580 (8,303,020) (220,000) 76,560 Non-Executive Directors of subsidiaries (including former directors of the Company) 10,024,290 (9,286,120) (529,450) 208,720 Group Executives (excluding Liew Mun Leong) 138,155,955 (93,835,458) (34,205,432) 10,115,065 Parent Group Executives and others 2,662,482 (2,232,834) (429,648) –
Total 159,442,307 (113,657,432) (35,384,530) 10,400,345
At the end of the financial year, there were also unissued stapled securities of a subsidiary under options as follows:
Exercise Price** Number of (per stapled Unissued Stapled Number of security) Securities Under Australand holders Expiry Date A$ Options**
Employees 9 11/03/2011 1.10 13,550
** In May 2010, the total number of stapled securities on issue were consolidated on a 1 for 5 basis. For every 5 stapled securities on issue prior to the consolidation, security holders received 1 new stapled security. The exercise price has been adjusted for the effect of the security consolidation.
Save as disclosed above, there were no unissued shares of the Company or its subsidiary under options as at the end of the financial year.
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ShARE PLANS (cont’d) (d) Awards under the CapitaLand Performance Share Plan During the financial year, the ERCC of the Company has granted awards under the Existing Share Plans
which are conditional on targets set for a performance period, currently prescribed to be a three-year performance period. A specified number of shares will only be released by the ERCC to the recipient at the end of the qualifying performance period, provided the threshold targets are achieved.
The final number of shares released will depend on the achievement of pre-determined targets over a three- year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
Details of the movement in the awards of the Company during the year were as follows:
<------------ Movements during the year ------------> Balance as at granted/ Lapsed/ Balance as at 1 January 2010 Adjusted^ Released Cancelled 31 December 2010 Year of No. of No. of No. of No. of No. of No. of No. of Award holders shares shares shares shares holders shares
2007 60 2,619,614 – (335,967) (2,283,647) – – 2008 74 2,988,755 62,466 – (469,318) 66 2,581,903 2009 81 3,855,286 109,932 – (467,507) 73 3,497,711 2010 – – 3,418,124 – (278,258) 56 3,139,866
9,463,655 3,590,522 (335,967) (3,498,730) 9,219,480
^ On 3 May 2010, adjustments were made to the number of shares under awards in accordance with the rules of the CapitaLand Performance Share Plan arising from the payment of a special dividend of $0.05 per issued ordinary share for the financial year ended 31 December 2009. The Company granted a total of 362,822 shares to compensate for the decline in values of the said awards.
(e) Awards under the CapitaLand Restricted Stock Plan During the financial year, the ERCC of the Company has granted awards under the Existing Share Plans
which are conditional on targets set for a performance period, currently prescribed to be a one-year performance period. A specified number of shares will only be released by the ERCC to the recipients at the end of the qualifying performance period, provided the threshold targets are achieved.
The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
With effect from 2008, the ERCC of the Company has instituted a set of share ownership guidelines for senior management who receives shares under the CapitaLand Restricted Stock Plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of CapitaLand shares acquired through the CapitaLand Restricted Stock Plan which will vary according to their job grades and base salaries. For the year 2010, awards granted to non-executive directors are time-based with no performance conditions and will be released over a vesting period of two years.
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ShARE PLANS (cont’d) (e) Awards under the CapitaLand Restricted Stock Plan (cont’d) Details of the movement in the awards by the Company during the year were as follows: <------------ Movements during the year ------------> Balance as at granted/ Lapsed/ Balance as at 1 January 2010 Adjusted^^ Released+ Cancelled 31 December 2010 Year of No. of No. of No. of No. of No. of No. of No. of Award holders shares shares shares shares holders shares
2007 868 2,012,134 – (1,958,147) (53,987) – – 2008 1,223 3,378,636 24,507 (1,714,443) (261,609) 1,069 1,427,091 2009 1,656 8,230,224 2,420,934 (3,505,177) (950,888) 1,430 6,195,093 2010 – – 6,405,436 – (536,667) 885 5,868,769
13,620,994 8,850,877 (7,177,767) (1,803,151) 13,490,953
^^ On 3 May 2010, adjustments were made to the number of shares under awards in accordance with the rules of the CapitaLand Restricted Stock Plan arising from the payment of a special dividend of $0.05 per issued ordinary share for the financial year ended 31 December 2009. The Company granted a total of 254,118 shares (of which 34,083 are to be cash-settled) to compensate for the decline in values of the said awards.
+ The number of shares released during the year was 7,177,767, of which 1,063,145 were cash-settled.
As at 31 December 2010, the number of shares comprised in awards granted under the CapitaLand Restricted Stock Plan is as follows:
Equity-settled Cash-settled Final number of shares has not been determined (baseline award) # 5,078,845 663,863 Final number of shares determined but not released 6,594,458 1,153,787
11,673,303 1,817,650
# The final number of shares released could range from 0% to 150% of the baseline award.
During the year, the aggregate number of new shares issued pursuant to the Existing Share Plans did not exceed 15% of the issued share capital of the Company.
(f) Awards under the CapitaMalls Asia Limited (“CMA”) Share Plans The CMA Performance Share Plan and the CMA Restricted Stock Plan (collectively referred to as the
“CMA Share Plans”) were approved and adopted by the shareholders’ of CMA at an Extraordinary General Meeting held on 30 October 2009.
Under the CMA Share Plans, awards are granted to eligible participants who will have the right to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the company achieving prescribed performance target(s).
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ShARE PLANS (cont’d) (f) Awards under the CapitaMalls Asia Limited (“CMA”) Share Plans (cont’d) (i) Awards under the CMA Performance Share Plan The CMA Performance Share Plan has no vesting periods beyond the performance achievement periods
and applies only to key executives.
Details of the movement in the awards by CMA during the year were as follows: <------------ Movements during the year ------------> Balance as at Lapsed/ Balance as at 1 January 2010 granted Released Cancelled 31 December 2010 Year of No. of No. of No. of No. of No. of No. of No. of Award holders shares shares shares shares holders shares
2010 – – 871,700 – – 20 871,700
(ii) Awards under the CMA Restricted Stock Plan Under the CMA Restricted Stock Plan, awards granted to eligible participants vest only after the
satisfactory completion of time-based service conditions or where the awards are performance-related, after a further period of service beyond the performance target completion date (performance-related awards). No minimum vesting period is prescribed under the CMA Restricted Stock Plan. Performance- related awards differ from awards granted under the CMA Performance Share Plan in that an extended vesting period is imposed beyond the performance target completion date.
Details of the movement in the awards by CMA during the year were as follows:
<------------ Movements during the year ------------> Balance as at Lapsed/ Balance as at 1 January 2010 granted Released Cancelled 31 December 2010 Year of No. of No. of No. of No. of No. of No. of No. of Award holders shares shares shares shares holders shares
2010 – – 4,633,710 – (516,731) 795 4,116,979*
* Included 1,209,807 shares which were to be cash-settled.
(g) Awards under the Australand Share Plans (i) Australand Performance Rights Plan The establishment of the Australand Performance Rights Plan was approved by Australand’s shareholders
at the 2007 Annual General Meeting (“AGM”).
The number of securities outstanding under the Australand Performance Rights Plan as at the end of the year is summarised below:
Year of Balance as at <------- Movements during the year --------> Balance as at Award 1 January 2010* granted Lapsed/Forfeited 31 December 2010
2007 111,620 – – 111,620 2008 279,627 – (243,954) 35,673 2009 2,333,833 – (327,681) 2,006,152 2010 – 1,939,700 (179,927) 1,759,773
2,725,080 1,939,700 (751,562) 3,913,218
* In May 2010, the total number of stapled securities on issue were consolidated on a 1 for 5 basis. For every 5 stapled securities on issue prior to the consolidation, security holders received 1 new stapled security. Opening balances of performance rights granted, and performance rights exercised, lapsed and forfeited, as well as their fair values, have been adjusted for the effect of the security consolidation.
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ShARE PLANS (cont’d) (g) Awards under the Australand Share Plans (cont’d) (ii) Australand Tax Exempt Employee Security Plan The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be
issued by the company to employees for no cash consideration was approved by Australand’s shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights Plan) who have been continuously employed by the Group for a period of at least nine months as at the invitation date and are still employees as at the acquisition date are eligible to participate in the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves Australand. Under the plan, employees will receive the same benefits as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which Australand’s stapled securities are traded on the Australian Stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
During the year, 110,410 (2009: Nil) securities were issued under the Australand Tax Exempt Employee Security Plan at the weighted average market price of A$2.76 per security.
(iii) Australand Employees Securities Ownership Plan The Australand Employees Securities Ownership Plan (“Australand ESOP”) offers a five-year, interest-
free loan to enable employees to purchase specified number of Australand stapled securities allocated by Australand’s Remuneration Committee. The loan has limited recourse and the employees’ obligations to repay the loan are limited to the market value of the securities at any time. The loan will be partly repaid by distributions on the securities held and must be fully repaid on cessation of employment with Australand or by the fifth anniversary of the origination date of the loan, whichever is earlier. The last offer under Australand ESOP was made on 30 June 2006 and hence Australand ESOP will cease to exist from 30 June 2011.
In addition to the above Australand ESOP, options over unissued Australand stapled securities have previously been issued to employees under the terms of the Australand Share Option Scheme. No option has been issued under this scheme since March 2002. No future options will be issued under this scheme.
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AUDIT COMMITTEE The Audit Committee members at the date of this report are Mr Richard Edward Hale (Chairman), Mr James Koh Cher Siang and Mrs Arfat Pannir Selvam.
The Audit Committee performs the functions specified by Section 201B of the Companies Act, Chapter 50 (the “Act”), the Listing Manual of the SGX-ST, and the Code of Corporate Governance.
The principal responsibility of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities. Areas of review by the Audit Committee include:
• the reliability and integrity of the financial statements;
• the impact of new, revised or proposed changes in accounting policies or regulatory requirements on the financial statements;
• the compliance with laws and regulations, particularly those of the Act and the Listing Manual of the SGX-ST;
• the appropriateness of quarterly and full year announcements and reports;
• the adequacy of internal controls and evaluation of adherence to such controls;
• the effectiveness and efficiency of internal and external audits;
• the appointment and re-appointment of external auditors and the level of auditors’ remuneration;
• the nature and extent of non-audit services and their impact on independence and objectivity of the external auditors;
• interested person transactions;
• the findings of internal investigation, if any;
• the framework and processes established for the implementation of the terms of the collaboration agreement with CMA in order to ensure that such framework and processes remain appropriate;
• the processes put in place to manage any material conflicts of interest within the Group; and
• all conflicts of interest matters referred to it.
The Audit Committee also reviews arrangements by which employees of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. Pursuant to this, the Audit Committee has introduced a Whistle Blowing Policy where employees may raise improprieties to the Audit Committee Chairman in good faith, with the confidence that employees making such reports will be treated fairly and be protected from reprisal.
The Audit Committee met four times in 2010. Specific functions performed during the year included reviewing the scope of work and strategies of both the internal and external auditors, and the results arising therefrom, including their evaluation of the system of internal controls. The Audit Committee also reviewed the assistance given by the Company’s officers to the auditors. The financial statements of the Group and the Company were reviewed by the Audit Committee prior to the submission to the Board of Directors of the Company for adoption. The Audit Committee also met with the internal and external auditors, without the presence of management, to discuss issues of concern to them.
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AUDIT COMMITTEE (cont’d) The Audit Committee has, in accordance with Chapter 9 of the Listing Manual of the SGX-ST, reviewed the requirements for approval and disclosure of interested person transactions, reviewed the procedures set by the Group and the Company to identify and report and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed interested person transactions.
The Audit Committee also undertook quarterly reviews of all non-audit services provided by KPMG LLP and its member firms and was satisfied that they did not affect their independence as external auditors of the Company.
The Audit Committee has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.
AUDITORS The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
DR hU TSU TAU Director
LIEw MUN LEONg Director
Singapore 28 February 2011
STATEMENT BY DIRECTORS
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In our opinion:
(a) the financial statements set out on pages 122 to 215 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010, and of the results and changes in equity of the Group and of the Company, and of the cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board of Directors
DR hU TSU TAU Director
LIEw MUN LEONg Director
Singapore 28 February 2011
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INDEPENDENT AUDITORS’ REPORT TO ThE MEMBERS OF CAPITALAND LIMITED
We have audited the accompanying financial statements of CapitaLand Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the balance sheets of the Group and the Company as at 31 December 2010, the income statements, statements of comprehensive income and statements of changes in equity of the Group and the Company and the statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 122 to 215.
Management’s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.
Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the consolidated financial statements of the Group and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity of the Group and the Company and cash flows of the Group for the year ended on that date.
Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMg LLP Public Accountants and Certified Public Accountants
Singapore 28 February 2011
BALANCE ShEETS AS AT 31 DECEMBER 2010
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The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Non-Current Assets Property, Plant and Equipment 3 1,049,407 1,772,301 8,164 7,291 Intangible Assets 4 459,605 518,026 147 147 Investment Properties 5 4,732,895 5,058,507 – – Interests in Subsidiaries 6 – – 12,435,703 12,258,126 Interests in Associates 7(a) 8,249,142 7,012,174 – – Interests in Joint Ventures 8(a) 1,861,232 1,672,056 – – Other Financial Assets 9(a) 308,205 233,359 – – Deferred Tax Assets 10 87,686 81,250 3,135 5,461
16,748,172 16,347,673 12,447,149 12,271,025 Current Assets Development Properties for Sale and Stock 11 5,419,350 3,590,270 – – Trade and Other Receivables 12 2,139,625 1,301,916 1,166,526 87,847 Other Financial Assets 9(b) 203,009 196,437 – – Cash and Cash Equivalents 15 7,190,064 8,729,718 53,954 2,356,466
14,952,048 13,818,341 1,220,480 2,444,313 Less: Current Liabilities Trade and Other Payables 16 1,694,385 1,880,017 195,367 1,242,589 Short Term Bank Borrowings 18 852,255 992,974 – – Current Portion of Debt Securities 19 909,519 400,776 – – Current Portion of Finance Leases 20 – 3,836 – – Current Tax Payable 496,405 457,374 5,424 10,515
3,952,564 3,734,977 200,791 1,253,104
Net Current Assets 10,999,484 10,083,364 1,019,689 1,191,209 Less: Non-Current Liabilities Long Term Bank Borrowings 18 3,798,410 3,951,770 – – Debt Securities 19 4,797,859 4,929,453 3,379,883 3,305,801 Finance Leases 20 – 33,745 – – Deferred Tax Liabilities 10 593,238 173,756 55,176 65,986 Other Non-Current Liabilities 21 540,687 462,550 32,373 44,597
9,730,194 9,551,274 3,467,432 3,416,384
Net Assets 18,017,462 16,879,763 9,999,406 10,045,850 Representing: Share Capital 23 6,276,504 6,229,227 6,276,504 6,229,227 Revenue Reserves 7,652,261 6,839,047 3,301,550 3,396,949 Other Reserves 24 241,886 339,999 421,352 419,674
Equity attributable to Owners of the Company 14,170,651 13,408,273 9,999,406 10,045,850 Non-controlling Interests 3,846,811 3,471,490 – –
Total Equity 18,017,462 16,879,763 9,999,406 10,045,850
The accompanying notes form an integral part of these financial statements.
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The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Revenue 26 3,382,742 2,957,359 286,565 510,348 Cost of sales (2,106,384) (1,931,165) – –
Gross profit 1,276,358 1,026,194 286,565 510,348 Other operating income 27(a) 892,687 1,238,399 320,579 1,284,775 Administrative expenses (488,279) (412,649) (79,245) (149,068) Other operating expenses (117,421) (572,121) (94) (115,509)
Profit from operations 1,563,345 1,279,823 527,805 1,530,546 Finance costs 27(d) (448,183) (453,922) (183,895) (144,796) Share of results (net of tax) of: - associates 499,357 (197,961) – – - joint ventures 321,495 467,156 – –
820,852 269,195 – –
Profit before taxation 27 1,936,014 1,095,096 343,910 1,385,750 Taxation 28 (265,907) (86,462) 8,060 (760)
Profit for the year 1,670,107 1,008,634 351,970 1,384,990 Attributable to: Owners of the Company 1,273,139 1,052,959 351,970 1,384,990 Non-controlling interests 396,968 (44,325) – –
Profit for the year 1,670,107 1,008,634 351,970 1,384,990
Basic earnings per share (cents) 29 29.9 26.2
Diluted earnings per share (cents) 29 29.2 25.9
INCOME STATEMENTS YEAR ENDED 31 DECEMBER 2010
The accompanying notes form an integral part of these financial statements.
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The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Profit for the year 1,670,107 1,008,634 351,970 1,384,990 Other comprehensive income: Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations (218,574) 158,751 – – Change in fair value of available-for-sale investments 19,730 12,436 – – Effective portion of change in fair value of cash flow hedges 33,674 102,585 – – Other capital reserve – (132) – – Share of other comprehensive income of associates and joint ventures 15,762 (27,522) – –
Total other comprehensive income for the year, net of income tax 25 (149,408) 246,118 – –
Total comprehensive income for the year 1,520,699 1,254,752 351,970 1,384,990
Attributable to: Owners of the Company 1,152,083 1,056,899 351,970 1,384,990 Non-controlling interests 368,616 197,853 – –
Total comprehensive income for the year 1,520,699 1,254,752 351,970 1,384,990
STATEMENTS OF COMPREhENSIVE INCOME YEAR ENDED 31 DECEMBER 2010
The accompanying notes form an integral part of these financial statements.
Non- Share Revenue Other controlling Total Capital Reserves Reserves Total Interests Equity The group $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2010 6,229,227 6,839,047 339,999 13,408,273 3,471,490 16,879,763 Total comprehensive income Profit for the year – 1,273,139 – 1,273,139 396,968 1,670,107
Other comprehensive income Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations – – (189,549) (189,549) (29,025) (218,574) Change in fair value of available- for-sale investments – – 19,730 19,730 – 19,730 Effective portion of change in fair value of cash flow hedges – – 30,476 30,476 3,198 33,674 Share of other comprehensive income of associates and joint ventures – – 18,287 18,287 (2,525) 15,762 Total other comprehensive income, net of income tax – – (121,056) (121,056) (28,352) (149,408)
Total comprehensive income – 1,273,139 (121,056) 1,152,083 368,616 1,520,699 Transactions with owners, recorded directly in equity Issue of shares 47,277 – (25,110) 22,167 – 22,167 Dividends paid/payable – (447,369) – (447,369) (103,656) (551,025) Share-based payments – – 32,150 32,150 2,006 34,156 Non-controlling interests contributions (net) – – – – 19,742 19,742 Changes in ownership interests in subsidiaries with a change in control – – – – (33,786) (33,786) Changes in ownership interests in subsidiaries with no change in control – 14,168 (2,204) 11,964 123,339 135,303 Share of reserves of associates and joint ventures – (6,745) (1,737) (8,482) (877) (9,359) Others – (19,979) 19,844 (135) (63) (198)
Total transactions with owners 47,277 (459,925) 22,943 (389,705) 6,705 (383,000)
At 31 December 2010 6,276,504 7,652,261 241,886 14,170,651 3,846,811 18,017,462
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The accompanying notes form an integral part of these financial statements.
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Non- Share Revenue Other controlling Total Capital Reserves Reserves Total Interests Equity The group $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2009 4,396,144 5,423,671 861,874 10,681,689 1,306,113 11,987,802 Total comprehensive income Profit for the year – 1,052,959 – 1,052,959 (44,325) 1,008,634
Other comprehensive income Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations – – (51,324) (51,324) 210,075 158,751 Change in fair value of available- for-sale investments – – 12,436 12,436 – 12,436 Effective portion of change in fair value of cash flow hedges – – 67,281 67,281 35,304 102,585 Other capital reserve – – (132) (132) – (132) Share of other comprehensive income of associates and joint ventures – – (24,321) (24,321) (3,201) (27,522) Total other comprehensive income, net of income tax – – 3,940 3,940 242,178 246,118
Total comprehensive income – 1,052,959 3,940 1,056,899 197,853 1,254,752 Transactions with owners, recorded directly in equity Rights issue 1,789,901 – – 1,789,901 – 1,789,901 Issue of shares 43,182 – (35,028) 8,154 – 8,154 Dividends paid/payable – (297,159) – (297,159) (93,690) (390,849) Transfer between reserves – 684,231 (684,231) – – – Equity portion of convertible bonds issued – – 173,767 173,767 – 173,767 Repurchase of convertible bonds – 4,780 (16,462) (11,682) – (11,682) Share-based payments – – 23,892 23,892 225 24,117 Non-controlling interests contributions (net) – – – – 214,952 214,952 Changes in ownership interests in subsidiaries with a change in control – – – – 39,574 39,574 Changes in ownership interests in subsidiaries with no change in control – – – – 1,811,068 1,811,068 Share of other capital reserve of associates and a subsidiary – – (18,153) (18,153) (4,609) (22,762) Others – (29,435) 30,400 965 4 969
Total transactions with owners 1,833,083 362,417 (525,815) 1,669,685 1,967,524 3,637,209
At 31 December 2009 6,229,227 6,839,047 339,999 13,408,273 3,471,490 16,879,763
The accompanying notes form an integral part of these financial statements.
STATEMENTS OF ChANgES IN EqUITY YEAR ENDED 31 DECEMBER 2010
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Equity Share Revenue Capital Compensation Total Capital Reserves Reserves Reserve Equity The Company $’000 $’000 $’000 $’000 $’000
At 1 January 2010 6,229,227 3,396,949 383,490 36,184 10,045,850 Total comprehensive income Profit for the year – 351,970 – – 351,970
Transactions with owners, recorded directly in equity Dividends paid – (447,369) – – (447,369) Issue of shares 47,277 – – (6,186) 41,091 Share-based payments – – – 7,864 7,864
Total transactions with owners 47,277 (447,369) – 1,678 (398,414)
At 31 December 2010 6,276,504 3,301,550 383,490 37,862 9,999,406 At 1 January 2009 4,396,144 1,617,293 213,212 41,592 6,268,241 Total comprehensive income Profit for the year – 1,384,990 – – 1,384,990
Transactions with owners, recorded directly in equity Dividends paid – (297,159) – – (297,159) Rights issue 1,789,901 – – – 1,789,901 Issue of shares 43,182 – – (10,151) 33,031 Equity portion of convertible bonds issued – – 189,240 – 189,240 Repurchase of convertible bonds – 7,280 (18,962) – (11,682) Share-based payments – – – 4,743 4,743 Capital return by a subsidiary – 684,545 – – 684,545
Total transactions with owners 1,833,083 394,666 170,278 (5,408) 2,392,619
At 31 December 2009 6,229,227 3,396,949 383,490 36,184 10,045,850
The accompanying notes form an integral part of these financial statements.
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CONSOLIDATED STATEMENT OF CASh FLOwS YEAR ENDED 31 DECEMBER 2010
2010 2009 $’000 $’000
Operating activities Profit after taxation 1,670,107 1,008,634 Adjustments for: Amortisation and impairment of intangible assets 1,627 56,565 Allowance/(Write back) for: - foreseeable losses 30,848 304,028 - doubtful receivables 6,381 15,361 - impairment on financial assets 10,936 50,953 - impairment on interests in associates and joint ventures (5,413) 55,254 - impairment on property, plant and equipment 23,891 1,826 Gain from bargain purchase (11,580) (2,958) Share-based expenses 39,128 28,727 Changes in fair value of financial instruments (19,652) 34,210 Depreciation of property, plant and equipment 57,998 61,466 Gain on disposal of property, plant and equipment (12,077) (23,576) Gain on disposal of investment properties (13,845) (19,140) Net fair value (gain)/loss from investment properties (394,585) 225,932 Gain on disposal/liquidation/dilution of equity investments and other financial assets (254,523) (981,681) Share of results of associates and joint ventures (820,852) (269,195) Provision for fidelity losses 7,021 – Accretion of deferred income (9,209) 895 Interest expense 448,183 453,922 Interest income (83,027) (76,550) Tax expense 265,907 86,462
(732,843) 2,501
Operating profit before working capital changes 937,264 1,011,135 Decrease/(Increase) in working capital: Trade and other receivables (324,723) 172,784 Development properties for sale 600,349 (109,362) Trade and other payables (131,430) (195,636) Other financial assets – 58,804 Restricted bank deposits (2,729) –
Changes in working capital 141,467 (73,410)
Cash generated from operations 1,078,731 937,725 Income tax paid (176,490) (61,662)
Net cash generated from operating activities carried down 902,241 876,063
The accompanying notes form an integral part of these financial statements.
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2010 2009 Note $’000 $’000
Net cash generated from operating activities brought forward 902,241 876,063 Investing activities Proceeds from disposal of property, plant and equipment 110,286 82,592 Purchase of property, plant and equipment (88,310) (205,774) Investments in associates and joint ventures (215,657) (1,174,234) (Advance to)/repayment from investee companies and other receivables (95,462) 34,277 Prepayment for acquisition of an investment property (18,631) – Deposits for new investments (135,933) – Acquisition of investment properties (315,776) (269,831) Proceeds from disposal of investment properties 1,001,467 238,903 Proceeds from disposal of other financial assets 10,360 132,233 Dividends received from associates and joint ventures 247,839 319,069 Acquisitions of subsidiaries, net of cash acquired 31(b) (3,034,955) (60,051) Disposals of subsidiaries, net of cash disposed off 31(d) 692,208 509,051 Proceeds from public offering of a subsidiary – 2,763,112 Acquisition of remaining interests in subsidiaries – (21,786) Transaction costs for public offering of a subsidiary (18,932) – Interest income received 44,682 33,159
Net cash (used in)/generated from investing activities (1,816,814) 2,380,720 Financing activities Proceeds from issue of shares under options 22,155 8,154 Proceeds from rights issue – 1,789,655 Borrowing from non-controlling interests 18,739 20,382 Contributions from non-controlling interests 19,742 203,634 Proceeds from disposal of interests in subsidiaries with no change in control 150,412 – Repayment of amount owing from sales of future receivables – (234,279) Proceeds from bank borrowings 3,184,232 2,578,312 Repayment of bank borrowings (3,288,517) (3,114,737) Proceeds from issue of debt securities 700,000 1,450,000 Repayment of debt securities (404,438) (548,553) Repayment of finance lease payables (2,387) (4,509) Dividends paid to non-controlling interests (104,366) (83,037) Dividends paid to shareholders (447,369) (297,159) Interest expense paid (438,608) (495,552)
Net cash (used in)/generated from financing activities (590,405) 1,272,311
Net (decrease)/increase in cash and cash equivalents (1,504,978) 4,529,094 Cash and cash equivalents at beginning of the year 8,729,718 4,228,405 Effect of exchange rate changes on cash balances held in foreign currencies (37,405) (27,781)
Cash and cash equivalents at end of the year 15 7,187,335 8,729,718
Significant non-cash transaction: In 2010, the Group disposed off three investment properties to an associate, CapitaMalls Malaysia Trust (“CMMT”), for a consideration of $889.7 million, of which $637.5 million was settled by cash and the balance was settled by way of issuance of 563.5 million units in CMMT.
The accompanying notes form an integral part of these financial statements.
NOTES TO ThE FINANCIAL STATEMENTS
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These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 28 February 2011.
1 DOMICILE AND ACTIVITIES CapitaLand Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered
office at 168 Robinson Road, #30-01, Capital Tower, Singapore 068912.
The principal activities of the Company during the financial year are those relating to investment holding and consultancy services as well as the corporate headquarters which gives direction, provides management support services and integrates the activities of its subsidiaries.
The principal activities of the significant subsidiaries are those relating to investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services as well as management of serviced residences.
The consolidated financial statements relate to the Company and its subsidiaries (the “Group”) and the Group’s interests in associates and joint ventures.
2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (a) Basis of preparation The financial statements have been prepared in accordance with the Singapore Financial Reporting
Standards (“FRS”).
The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.
These financial statements are presented in Singapore Dollars, which is the Company’s functional currency. All financial information presented in Singapore Dollars have been rounded to the nearest thousand, unless otherwise stated.
The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:
Note 2(m) – classification of leases Note 2(p) – recognition of deferred tax assets Note 36 – contingencies
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:
Note 2(n) – estimation of the percentage of completion of the projects, attributable profits for
development properties for sale and allowance for foreseeable losses Note 3 – measurement of recoverable amounts of property, plant and equipment Note 4 – assumptions of recoverable amounts relating to goodwill impairment Note 5 – valuation of investment properties.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (a) Basis of preparation (cont’d) Note 21 – provisions Note 22 – measurement of share-based payments Note 32 – valuation of assets, liabilities and contingent liabilities acquired in business combinations Note 33 – valuation of financial instruments. On adoption of new/revised FRSs effective from 1 January 2010, the Group has changed its accounting
policies in the following areas:
The Group has applied FRS 103 Business Combinations (2009) in its accounting for business combinations. Business combinations are now accounted for using the acquisition method as at the acquisition date (see note 2(b)(i)). Previously, business combinations were accounted for under the purchase method. In the purchase method, the cost of an acquisition was measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition; and the excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition was credited to the profit or loss in the period of acquisition. For business acquisitions that were achieved in stages, any existing equity interests in the acquiree were not re-measured to their fair value. Contingent consideration was recognised as an adjustment to the cost of acquisition only when it was probable and can be measured reliably.
The Group has also applied FRS 27 Consolidated and Separate Financial Statements (2009) in accounting for transaction with non-controlling interests (see note 2(b)(ii) and 2(e)(i)). Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions. When the Group losses control of a subsidiary, any interest retained in the former subsidiary will be recorded at fair value with the re-measurement gain or loss recognised in the profit or loss.
The above changes in accounting policies have been applied prospectively and had the following impact on the financial statements:
The group Increase/(Decrease) 2010 $’000
Impact to income statement for the year ended 31 December (net of tax and non-controlling interests): Re-measurement gain of investments retained in former subsidiaries to their fair values 78,250 Acquisition-related costs (5,175) Gain arising from changes in ownership interests in subsidiaries with no change in control now recognised in equity (14,168) Profit attributable to the owners of the Company 58,907 Impact to earnings per share: Increase in basic earnings per share (cents) 1.4 Increase in basic earnings per share (cents) 1.3
Except for the above changes, the accounting policies set out below have been applied consistently by the Group to all periods presented in these financial statements and have been applied consistently by the entities in the Group.
NOTES TO ThE FINANCIAL STATEMENTS
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (b) Basis of consolidation (i) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date,
which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in the profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in the profit or loss.
The Group elects on a transaction-by-transaction basis whether to measure non-controlling interests
at fair value, or at their proportionate share of the recognised amount of the identifiable net assets of the acquiree, at the acquisition date. If the business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is re-measured to fair value at each acquisition date and any changes are taken to the profit or loss.
From 1 January 2004 to 31 December 2009, business combinations are accounted for under the
purchase method. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.
For acquisition of subsidiaries prior to 1 January 2004 which previously met the criteria for merger of businesses such that the assets and liabilities and results were accounted for under the pooling of interests method, the classification and accounting treatment of these business combinations have not been reconsidered or restated in preparing the Group’s financial statements.
(ii) Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interest in a subsidiary are allocated to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising from the loss of control is recognised in the profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (b) Basis of consolidation (cont’d) (iii) Associates and joint ventures Associates are those entities in which the Group has significant influence, but not control, over their
financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Joint ventures are entities (including unincorporated or incorporated companies, partnerships and trusts) over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.
Associates and joint ventures (collectively referred to as “equity-accounted investees”) are accounted for using the equity method and are recognised initially at cost. The Group’s investments in equity-accounted investees include goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying
amount of that interest is stated at zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
(iv) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(v) Accounting for subsidiaries, associates and joint ventures by the Company Investments in subsidiaries, associates and joint ventures are stated in the Company’s balance
sheet at cost less accumulated impairment losses.
(c) Foreign currencies Foreign currency transactions Items included in the financial statements of each entity in the Group are measured using the currency
that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”).
Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate prevailing at that reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.
Foreign currency differences arising from retranslation are recognised in the profit or loss, except for differences arising from the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation, available-for-sale equity instruments and financial liabilities designated as hedges of net investment in a foreign operation (see note 2(g)) or qualifying cash flow hedges, which are recognised in other comprehensive income.
NOTES TO ThE FINANCIAL STATEMENTS
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (c) Foreign currencies (cont’d) Foreign operations The assets and liabilities of foreign operations are translated to Singapore Dollars at exchange rates
prevailing at the end of the reporting period. The income and expenses of foreign operations are translated to Singapore Dollars at exchange rates prevailing at the dates of the transactions. Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the operation is not a wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed off such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is transferred to the profit or loss as part of the gain or loss on disposal. When the Group disposes off only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes off only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is transferred to the profit or loss.
Net investment in a foreign operation Exchange differences arising from monetary items that in substance form part of the Group entity’s net
investment in a foreign operation are recognised in the respective entity’s profit or loss. Such exchange differences are reclassified to equity in the consolidated financial statements. When the foreign operation is disposed off, the cumulative amount in equity is transferred to the profit or loss.
(d) Property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.
Depreciation on property, plant and equipment is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment as follows:
Leasehold land and buildings (excluding Remaining lease period ranging from serviced residence properties) 9 years to 35 years Hospitality plant, machinery, improvements, furniture, fittings and equipment 1 to 10 years Plant, machinery and improvements 3 to 10 years Motor vehicles 5 years Furniture, fittings and equipment 2 to 5 years
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (d) Property, plant and equipment (cont’d) For serviced residence properties where the residual value at the end of the intended holding period
is lower than the carrying amount, the difference in value is depreciated over the Group’s intended holding period. No depreciation is recognised where the residual value is higher than the carrying amount. Based on historical trends and past experience, the intended holding period (the period from the date of commencement of serviced residence operations to the date of expected strategic divestment of the properties) ranges from three to five years.
Residual values of the properties at the end of the intended holding period are determined based on annual independent professional valuation. Residual value is the estimated amount that the Group would obtain from the disposal of a property if the property is already of the age and in the condition expected at the date when the Group has the intention to dispose that property.
Assets under construction are stated at cost and are not depreciated. Expenditure relating to assets under construction (including borrowing costs) are capitalised when incurred. Depreciation will commence when the development is completed.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
(e) Intangible assets (i) Goodwill Acquisition on or after 1 January 2010 For business combinations on or after 1 January 2010, the Group measures goodwill as at acquisition
date based on the fair value of the consideration transferred (including the fair value of any previously- held equity interest in the acquiree) and the recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the amount is negative, a bargain purchase gain is recognised in the profit or loss. Goodwill is subsequently measured at cost less accumulated impairment losses.
Goodwill arising from the acquisition of subsidiaries is presented in intangible assets. Goodwill arising from the acquisition of associates and joint ventures is presented together with interests in associates and joint ventures.
Acquisition on or after 1 January 2004 up to 31 December 2009 Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment
as described in note 2(j). Negative goodwill is credited to profit or loss in the period of the acquisition.
Acquisition prior to 1 January 2004 From 1 January 2001 to 31 December 2003, goodwill was stated at cost from the date of initial
recognition and amortised over its estimated useful life of 20 years. On 1 January 2004, the Group discontinued the amortisation of goodwill. The remaining goodwill balance is subject to testing for impairment (see note 2(j)). Negative goodwill was derecognised by crediting revenue reserves on 1 January 2004.
Prior to 1 January 2001, goodwill and negative goodwill on acquisitions were written off against revenue reserves in the year of acquisition.
NOTES TO ThE FINANCIAL STATEMENTS
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (e) Intangible assets (cont’d) (i) Goodwill (cont’d) Acquisition of non-controlling interests From 1 January 2010, acquisitions of non-controlling interests are accounted for as transactions
with owners in their capacity as owners and therefore no goodwill is recognised. Previously, goodwill arising on the acquisition of non-controlling interests in a subsidiary has been recognised, and represented the excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date of the transaction.
(ii) Other intangible assets Other intangible assets with finite useful lives are measured at cost less accumulated amortisation
and impairment losses. They are amortised in the profit or loss on a straight-line basis over their estimated useful lives of one to 10 years, from the date on which they are available for use.
Other intangible assets with indefinite useful lives are not amortised and are measured at cost less impairment losses.
(f) Investment properties and properties under development Investment properties are properties held either to earn rental or for capital appreciation or both.
Properties under development are properties being constructed or developed for future use as investment properties. Investment properties and properties under development are initially recognised at cost, including transaction costs, and subsequently at fair value with any change therein recognised in the profit or loss. The fair value is determined based on internal valuation or independent professional valuation. Independent professional valuation is obtained at least once every three years.
When an investment property or property under development is disposed off, the resulting gain or loss recognised in the profit or loss is the difference between the net disposal proceed and the carrying amount of the property.
(g) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity and debt securities, trade and
other receivables, cash and cash equivalents, financial liabilities and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial assets to another party without retaining control or transfers substantially all the risks and rewards of the assets. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (g) Financial instruments (cont’d) (i) Non-derivative financial instruments (cont’d) Instruments at fair value through profit or loss An instrument is classified as fair value through profit or loss if it is held for trading or is designated
as such upon initial recognition. Financial instruments are designated as fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable transaction costs are recognised in the profit or loss when incurred. Financial instruments classified as fair value through profit or loss are measured at fair value, and changes therein are recognised in the profit or loss.
Available-for-sale financial assets The Group’s investments in equity securities and certain debt securities are classified as available-
for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairment losses (see note 2(g)(v)) and foreign exchange gains and losses on available-for-sale monetary items (see note 2(c)), are recognised directly in other comprehensive income and presented in the available-for-sale reserve in equity. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is reclassified to the profit or loss.
Investments in equity securities whose fair value cannot be reliably measured are measured at cost less impairment loss.
Others Other non-derivative financial instruments are categorised as loans and receivables or financial
liabilities, which are measured at amortised cost using the effective interest method, less any impairment losses.
(ii) Derivative financial instruments and hedging activities The Group holds derivative financial instruments to hedge its foreign currency and interest rate
risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
On initial designation of the derivative as the hedging instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80%-125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the
profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (g) Financial instruments (cont’d) (ii) Derivative financial instruments and hedging activities (cont’d) Cash flow hedges Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge
are recognised directly in other comprehensive income and presented in the hedging reserve in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset when the asset is recognised. In other cases, the amount accumulated in equity is reclassified to the profit or loss in the same period that the hedged item affects profit or loss.
Fair value hedges Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are
recognised in the profit or loss. The hedged item is adjusted to reflect change in its fair value in respect of the risk being hedged, with any gain or loss being recognised in the profit or loss.
Hedge of net investment in a foreign operation Foreign currency differences arising from the retranslation of a financial liability designated as a
hedge of a net investment in a foreign operation are recognised in the profit or loss. On consolidation, such differences are recognised directly in other comprehensive income and presented in the foreign currency translation reserve in equity, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such differences are recognised in the profit or loss. When the hedged net investment is disposed off, the cumulative amount in other comprehensive income is transferred to the profit or loss.
Separable embedded derivatives Changes in the fair value of separated embedded derivatives are recognised immediately in the
profit or loss. Other non-trading derivatives When a derivative financial instrument is not designated in a hedge relationship that qualifies for
hedge accounting, all changes in its fair value are recognised immediately in the profit or loss.
(iii) Convertible bonds Convertible bonds that can be converted into share capital where the number of shares issued does
not vary with changes in the fair value of the bonds are accounted for as compound financial instruments. The gross proceeds are allocated to the equity and liability components, with the equity component being assigned the residual amount after deducting the fair value of the liability component from the fair value of the compound financial instrument.
Subsequent to initial recognition, the liability component of convertible bonds is measured at amortised cost using the effective interest method. The equity component of convertible bonds is not re-measured. When the conversion option is exercised, its carrying amount will be transferred to the share capital. When the conversion option lapses, its carrying amount will be transferred to revenue reserve.
When a convertible bond is being repurchased before its maturity date, the purchase consideration (including directly attributable costs, net of tax effects) are allocated to the liability and equity components of the instrument at the date of transaction. Any resulting gain or loss relating to the liability component is recognised in the profit or loss.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (g) Financial instruments (cont’d) (iv) Financial guarantees Financial guarantee contracts are classified as financial liabilities unless the Group or the Company
has previously asserted explicitly that it regards such contracts as insurance contracts and accounted for them as such.
Financial guarantees classified as financial liabilities Such financial guarantees are recognised initially at fair value and are classified as financial liabilities.
Subsequent to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantees is transferred to the profit or loss.
Financial guarantees classified as insurance contracts These financial guarantees are accounted for as insurance contracts. Provision is recognised based
on the Group’s or the Company’s estimate of the ultimate cost of settling all claims incurred but unpaid at the end of the reporting period.
The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.
(v) Impairment of financial assets A financial asset not carried at fair value through profit or loss is assessed at each reporting period
to determine whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than that suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Losses are recognised in the profit or loss and reflected as an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses
accumulated in the available-for-sale reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in the profit or loss. Changes in impairment provision attributable to application of the effective interest method are reflected as a component of interest income.
NOTES TO ThE FINANCIAL STATEMENTS
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (g) Financial instruments (cont’d) (v) Impairment of financial assets (cont’d) If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and
the increase can be related objectively to an event occurring after the impairment loss was recognised in the profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in the profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.
(h) Share capital Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary shares and options are recognised as a deduction from equity.
Where share capital recognised as equity is repurchased (“treasury shares”), the amount of the consideration paid, including directly attributable costs, net of any tax effects, is presented as a deduction from equity. Where such shares are subsequently reissued, sold or cancelled, the consideration received is recognised as a change in equity. No gain or loss is recognised in the profit or loss.
(i) Development properties for sale Development properties for sale are stated at the lower of cost plus, where appropriate, a portion of the
attributable profit, and estimated net realisable value, net of progress billings. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.
The cost of properties under development comprises specifically identified costs, including acquisition costs, development expenditure, borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development property are also capitalised, on a specific identification basis, as part of the cost of the development property until the completion of development.
(j) Impairment – non-financial assets The carrying amounts of the Group’s non-financial assets, other than investment properties, inventories
and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and as and when indicators of impairment are identified. An impairment loss is recognised if the carrying amount of an asset or its related cash- generating unit (“CGU”) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGU that are expected to benefit from the synergies of the combination.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (j) Impairment – non-financial assets (cont’d) An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in the profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired.
(k) Employee benefits Short term employee benefits All short term employee benefits, including accumulated compensated absences, are recognised in the
period in which the employees render their services.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit- sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defined contribution plans Contributions to post-employment benefits under defined contribution plans are recognised as an
expense as incurred.
Long service leave Liabilities for other employee entitlements which are not expected to be paid or settled within twelve
months of the reporting date are accrued in respect of all employees at the present value of the future amounts expected to be paid based on a projected weighted average increase in wage and salary rates. Expected future payments are discounted using interest rates on relevant government securities with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Share-based payments For equity-settled share-based payment transactions, the fair value of the services received is recognised
as an expense with a corresponding increase in equity over the vesting period during which the employees become unconditionally entitled to the equity instrument. The fair value of the services received is determined by reference to the fair value of the equity instrument granted at the grant date. At each reporting date, the number of equity instruments that are expected to be vested are estimated. The impact on the revision of original estimates is recognised as an expense and as a corresponding adjustment to equity over the remaining vesting period, unless the revision to original estimates is due to market conditions. No adjustment is made if the revision or actual outcome differs from the original estimate due to market conditions.
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (k) Employee benefits (cont’d) Share-based payments (cont’d) For cash-settled share-based payment transactions, the fair value of the goods or services received is
recognised as an expense with a corresponding increase in liability. The fair value of the services received is determined by reference to the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised for the period.
The proceeds received from the exercise of the equity instruments, net of any directly attributable transaction costs, are credited to share capital when the equity instruments are exercised.
(l) Provision A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
A provision for onerous contract is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
(m) Leases When entities within the Group are lessees of a finance lease Leased assets in which the Group assumes substantially all the risks and rewards of ownership are
classified as finance leases. Upon initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the arrangement is not in the legal form of a lease.
When entities within the Group are lessees of an operating lease Where the Group has the use of assets under operating leases, payments made under the leases
are recognised on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease payments made. Contingent rentals are charged to the profit or loss in the accounting period in which they are incurred.
When entities within the Group are lessors of an operating lease Assets subject to operating leases are included in either property, plant and equipment (see note 2(d)) or
investment properties (see note 2(f)).
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (n) Revenue recognition Rental income Rental income receivable under operating leases is recognised on a straight-line basis over the term of
the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingent rentals are recognised as income in the accounting period in which they are earned.
Development properties for sale The Group recognises income on property development projects when the risks and rewards of
ownership have been transferred to the buyer. In cases where the Group is obliged to perform any significant acts after the transfer of legal title or equitable interest, revenue is recognised as the acts are performed based on the percentage of completion method, which is an allowed alternative method under Recommended Accounting Practice 11 Pre-completion Contracts for the Sale of Development Property (“RAP 11”) issued by the Institute of Certified Public Accountants of Singapore in October 2005. Under the percentage of completion method, profit is brought into profit or loss only in respect of sales procured and to the extent that such profit relates to the progress of construction work. The progress of construction work is measured by the proportion of the construction costs incurred to date to the estimated total construction costs for each project. Depending on the selling conditions associated with each development project, revenue is generally not recognised if the Group provides various guarantees and other financial support to the buyers (“continuing involvement”) during the period of property development. Such continuing involvement by the Group would then require revenue to be deferred until the Group’s continuing involvement ceases.
Revenue excludes goods and services or other sale taxes and is after deduction of any trade discounts. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of unit sold.
Financial advisory and management fee Financial advisory and management fee is recognised as and when services are rendered.
Dividends Dividend income is recognised on the date that the Group’s right to receive payment is established.
Interest income Interest income is recognised as it accrues, using the effective interest method.
(o) Finance costs Borrowing costs are recognised using the effective interest method, except to the extent that they are
capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.
NOTES TO ThE FINANCIAL STATEMENTS
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2 SUMMARY OF SIgNIFICANT ACCOUNTINg POLICIES (cont’d) (p) Income tax expense Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit
or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and joint ventures to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(q) Earnings per share The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to owners of the Company and the weighted average number of ordinary shares outstanding, for the effects of all dilutive potential ordinary shares, which comprise issued convertible bonds and share plans granted to employees.
(r) Operating segments An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision- maker has been identified as the Council of Chief Executive Officers (“CEOs”) that makes strategic resources allocation decisions. The Council of CEOs comprises the President & CEO, key management officers of the corporate office and CEOs of the strategic business units.
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3 PROPERTY, PLANT AND EqUIPMENT
Plant, Furniture, Serviced Other Assets machinery fittings residence Leasehold leasehold under and Motor and properties land buildings construction improvements vehicles equipment Total The group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost At 1 January 2010 1,502,438 841 23,276 190,024 72,336 2,831 272,373 2,064,119 Translation differences (156,820) (188) (1,720) 754 (8,423) (60) (17,842) (184,299) Additions 34,914 – 235 37,474 6,262 370 41,686 120,941 Acquisition of subsidiaries 245,006 4,364 37,964 – 45,601 784 16,854 350,573 Disposal of subsidiaries (872,801) – – (114) (18,667) (168) (21,988) (913,738) Disposals/Written off (64,066) – (3,117) – (7,069) (702) (29,613) (104,567) Reclassification 164,777 – (7,451) (180,377) 291 – 22,760 –
At 31 December 2010 853,448 5,017 49,187 47,761 90,331 3,055 284,230 1,333,029 Accumulated depreciation and impairment loss At 1 January 2010 49,061 41 10,818 – 52,359 1,806 177,733 291,818 Translation differences (4,740) (3) 1,250 – (1,538) 618 (3,402) (7,815) Depreciation for the year 9,061 133 2,845 – 10,375 339 35,245 57,998 Impairment loss 12,092 – – – – – 11,408 23,500 Disposal of subsidiaries (22,571) – – – (12,244) (88) (11,277) (46,180) Disposals/Written off – – (549) – (6,739) (594) (27,817) (35,699) Reclassification (21,544) – – – (89) – 21,633 –
At 31 December 2010 21,359 171 14,364 – 42,124 2,081 203,523 283,622 Carrying amount At 1 January 2010 1,453,377 800 12,458 190,024 19,977 1,025 94,640 1,772,301
At 31 December 2010 832,089 4,846 34,823 47,761 48,207 974 80,707 1,049,407
Cost At 1 January 2009 1,361,778 841 23,511 160,942 70,531 3,037 249,315 1,869,955 Translation differences 27,413 – (373) 9,081 (5,550) 194 16,952 47,717 Additions 51,528 – 341 126,304 8,677 128 18,007 204,985 Acquisition of subsidiaries 24,965 – – 35,425 – 55 105 60,550 Disposal of subsidiaries (40,104) – – – (137) (247) (10,311) (50,799) Disposals/Written off (53,879) – (203) (775) (1,418) (336) (11,678) (68,289) Reclassification 130,737 – – (140,953) 233 – 9,983 –
At 31 December 2009 1,502,438 841 23,276 190,024 72,336 2,831 272,373 2,064,119 Accumulated depreciation and impairment loss At 1 January 2009 37,585 24 8,989 – 47,428 1,909 140,642 236,577 Translation differences 73 – (93) – (2,542) (40) 10,699 8,097 Depreciation for the year 10,241 17 2,024 – 8,657 403 40,124 61,466 Impairment loss 1,161 – 83 – – – – 1,244 Disposal of subsidiaries – – – – (22) (175) (4,277) (4,474) Disposals/Written off 1 – (185) – (1,162) (291) (9,455) (11,092)
At 31 December 2009 49,061 41 10,818 – 52,359 1,806 177,733 291,818 Carrying amount At 1 January 2009 1,324,193 817 14,522 160,942 23,103 1,128 108,673 1,633,378
At 31 December 2009 1,453,377 800 12,458 190,024 19,977 1,025 94,640 1,772,301
NOTES TO ThE FINANCIAL STATEMENTS
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3 PROPERTY, PLANT AND EqUIPMENT (cont’d) (a) As at 31 December 2010, certain property, plant and equipment with carrying value totalling
approximately $392.2 million (2009: $984.1 million) were mortgaged to banks to secure credit facilities for the Group (note 18).
(b) During the year, the Group recognised an impairment loss of $23.5 million relating to a serviced residence property in Australia and operating assets of certain leased properties in Europe. The impairment loss was determined based on value in use calculation using cash flow projections based on financial budgets and forecasts, and was recognised in “Other Operating Expenses” in the income statement.
(c) During the financial year, interest capitalised as cost of property, plant and equipment amounted to approximately $4.2 million (2009: Nil) (note 27(d)).
(d) There was no property, plant and equipment held under finance leases as at 31 December 2010 following the sale of certain subsidiaries by the Group during the year. As at 31 December 2009, the value of property, plant and equipment of the Group held under finance leases was $59.7 million.
Plant, Furniture, machinery fittings and and Motor improvements equipment vehicles Total The Company $’000 $’000 $’000 $’000
Cost At 1 January 2010 11,418 11,879 431 23,728 Additions 327 5,303 11 5,641 Disposals/Written off (167) (441) - (608)
At 31 December 2010 11,578 16,741 442 28,761 Accumulated depreciation At 1 January 2010 8,161 7,845 431 16,437 Depreciation for the year 2,661 1,989 2 4,652 Disposals/Written off (38) (454) - (492)
At 31 December 2010 10,784 9,380 433 20,597 Carrying amount At 1 January 2010 3,257 4,034 – 7,291
At 31 December 2010 794 7,361 9 8,164
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3 PROPERTY, PLANT AND EqUIPMENT (cont’d) Plant, Furniture, machinery fittings and and Motor improvements equipment vehicles Total The Company $’000 $’000 $’000 $’000
Cost At 1 January 2009 10,250 10,664 431 21,345 Additions 1,331 1,661 – 2,992 Disposals/Written off (163) (446) – (609)
At 31 December 2009 11,418 11,879 431 23,728 Accumulated depreciation At 1 January 2009 5,644 6,469 418 12,531 Depreciation for the year 2,645 1,646 13 4,304 Disposals/Written off (128) (270) – (398)
At 31 December 2009 8,161 7,845 431 16,437 Carrying amount At 1 January 2009 4,606 4,195 13 8,814
At 31 December 2009 3,257 4,034 – 7,291
4 INTANgIBLE ASSETS goodwill Others^ Total The group $’000 $’000 $’000
Cost At 1 January 2010 570,443 23,624 594,067 Additions – 3,343 3,343 Disposals/Written off (57,231) (194) (57,425) Translation differences (1,871) (725) (2,596)
At 31 December 2010 511,341 26,048 537,389 Accumulated amortisation At 1 January 2010 64,943 11,098 76,041 Amortisation for the year – 1,627 1,627 Disposals/Written off – (185) (185) Translation differences 981 (680) 301
At 31 December 2010 65,924 11,860 77,784 Carrying amount At 1 January 2010 505,500 12,526 518,026
At 31 December 2010 445,417 14,188 459,605
^ Other comprised trademarks, franchises, patents, licences and club memberships.
NOTES TO ThE FINANCIAL STATEMENTS
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4 INTANgIBLE ASSETS (cont’d)
goodwill Others^ Total The group Note $’000 $’000 $’000
Cost At 1 January 2009 585,125 23,974 609,099 Additions – 72 72 Disposals/Written off (16,195) (746) (16,941) Translation differences 1,513 324 1,837
At 31 December 2009 570,443 23,624 594,067 Accumulated amortisation and impairment loss At 1 January 2009 9,942 9,546 19,488 Amortisation for the year – 1,564 1,564 Impairment loss 27(c)(iii) 55,001 – 55,001 Write back – (6) (6) Disposals/Written off – (164) (164) Translation differences – 158 158
At 31 December 2009 64,943 11,098 76,041 Carrying amount At 1 January 2009 575,183 14,428 589,611
At 31 December 2009 505,500 12,526 518,026
goodwill Others^ Total The Company $’000 $’000 $’000
Cost and carrying amount At 1 January 2009, 31 December 2009 and 31 December 2010 – 147 147
^ Others comprised trademarks, franchises, patents, licences and club memberships. Impairment test for Goodwill For the purpose of goodwill impairment testing, the aggregate carrying amount of goodwill allocated to each
cash-generating unit (“CGU”) as at 31 December are as follows: Terminal growth Rate Discount Rate Carrying Value 2010 2009 2010 2009 2010 2009 % % % % $’000 $’000
The Ascott Limited (“Ascott”) 0.8 1.2 6.4 6.5 445,417 481,161 Serviced residences in Europe – 2.0 to 2.5 – 8.2 to 11.3 – 24,339
Balance as at 31 December 445,417 505,500 The recoverable amount of the CGUs is determined based on value in use calculation. The value in use
calculation is a discounted cash flow model using cash flow projections based on the most recent budgets and forecasts approved by management covering three years (2009: three to 10 years). Cash flows beyond these periods are extrapolated using the estimated terminal growth rates stated in the table above. The discount rate applied is the weighted average cost of capital from the relevant business segment. The key assumptions are those relating to expected changes in average room rates and occupancy and direct costs. The terminal growth rate used for each CGU does not exceed management’s expectation of the long term average growth rate of the respective industry and country in which the CGU operates.
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4 INTANgIBLE ASSETS (cont’d) The Group believes that any reasonably possible changes in the above key assumptions applied are not
likely to materially cause the recoverable amount to be lower than its carrying amount. The movement in goodwill during the year relates principally to the disposal of certain subsidiaries.
For the year ended 31 December 2009, an impairment charge of $55.0 million was taken in respect of the Ascott CGU. This impairment charge was included under “Other Operating Expenses” in the income statement.
5 INVESTMENT PROPERTIES
The group 2010 2009 Note $’000 $’000
At 1 January 5,058,507 4,848,784 Acquisition of subsidiaries 31(b) 1,263,170 – Disposal of subsidiaries 31(d) (1,052,291) (403,017) Additions 336,243 611,076 Disposals (1,216,693) (219,358) Reclassification to development properties for sale (39,505) – Changes in fair value 27(a), (c)(iii) 394,585 (225,932) Translation differences (11,121) 446,954
At 31 December 4,732,895 5,058,507 (a) Investment properties, which include investment properties in the course of development are stated at
fair value based on internal valuations or independent professional valuations. All the properties were independently valued during the year. The fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion. In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value of investment properties include market-corroborated capitalisation yield, terminal yield and discount rate. In relying on the valuation reports, management has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of current market conditions.
The valuers have considered valuation techniques including the direct comparison method, capitalisation approach and/or discounted cash flows in arriving at the open market value as at the balance sheet date. The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the investment properties. The capitalisation approach capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. The discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value.
(b) As at 31 December 2010, investment properties included $1,176.0 million (2009: $652.3 million) of properties under development.
(c) As at 31 December 2010, certain investment properties with carrying value of approximately $1,552.4 million (2009: $3,744.9 million) were mortgaged to banks to secure credit facilities for the Group (notes 18 and 19).
NOTES TO ThE FINANCIAL STATEMENTS
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5 INVESTMENT PROPERTIES (cont’d) (d) During the financial year, interest capitalised as cost of investment properties amounted to approximately
$4.9 million (2009: $6.6 million) (note 27(d)).
(e) Investment properties of the Group are held mainly for use by tenants under operating leases. There was no non-cancellable lease as at 31 December 2010. In the previous year, certain leases contain an initial non-cancellable period of three to six years. Contingent rents, representing income based on certain sale achieved by tenants, recognised in the income statement during the year amounted to $4.8 million (2009: $4.6 million).
6 INTERESTS IN SUBSIDIARIES
The Company 2010 2009 $’000 $’000
(a) Unquoted shares, at cost 7,247,453 7,138,412 Less: Allowance for impairment loss (113,700) (163,132)
7,133,753 6,975,280 Add: Amounts owing by subsidiaries: Loan accounts - interest bearing 3,674,750 3,674,750 - interest free 1,636,160 1,626,145 Less: Allowance for doubtful debts (8,960) (18,049)
5,301,950 5,282,846
12,435,703 12,258,126 (i) The loans to subsidiaries form part of the Company’s net investment in the subsidiaries. These
loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future. (ii) Movements in allowance for impairment loss are as follows:
The Company 2010 2009 $’000 $’000
At 1 January (163,132) (47,764) Allowance during the year (48,541) (115,368) Allowance written back during the year 97,973 –
At 31 December (113,700) (163,132) During the year, an allowance for impairment loss was recognised in respect of the Company’s
investments in certain subsidiaries amounting to $48.5 million (2009: $115.4 million) as a result of decline in market valuation of assets held through these subsidiaries, taking into account the general economic and operating environment in which the relevant subsidiaries operate in. The recoverable amount for the relevant subsidiaries was estimated based on the higher of the value in use calculation using cash flow projections based on financial budgets and forecasts covering three years period, or the fair value of the net assets as at balance sheet date. In respect of certain subsidiaries, a reversal of impairment amounting to $98.0 million was recognised during the year, as a result of an increase in recoverable amounts of these subsidiaries.
(iii) The movement in allowance for doubtful debts relates to provision written back during the year of $9.1 million (2009: provision made of $18.0 million).
(b) Details of the subsidiaries are set out in note 38.
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7 ASSOCIATES
The group 2010 2009 $’000 $’000
(a) Interests in associates Investment in associates 7,537,504 6,534,701 Less: Allowance for impairment loss (48,473) (44,473)
7,489,031 6,490,228 Add: Amounts owing by associates: Loan accounts - interest free 435,112 239,608 - interest bearing 331,289 289,288
766,401 528,896
8,255,432 7,019,124 Less: Allowance for doubtful receivables (6,290) (6,950)
8,249,142 7,012,174 (i) Movements in allowance for impairment loss are as follows: The group 2010 2009 Note $’000 $’000
At 1 January (44,473) (3,490) Allowance during the year 27(c)(iii) (4,000) (40,983)
At 31 December (48,473) (44,473) During the year, allowance for impairment loss amounting to $4.0 million was made in respect of
the Group’s investments in Gulf Cooperation Council countries (“GCC”) to reduce the carrying value of the investment to its recoverable amount. The recoverable amount for the investment in GCC was estimated based on the residual value method. In 2009, allowance for impairment loss amounting to $41.0 million was made in respect of the Group’s investments in Malaysia and GCC.
(ii) The loans to associates form part of the Group’s net investment in associates. These loans are
unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(iii) Loan accounts include an amount of approximately $359.3 million (2009: $317.5 million) which is subordinated to the repayment of borrowings of certain associates.
(iv) The Group’s share of the contingent liabilities of the associates is $271.7 million (2009: $43.7 million).
(v) The Group’s investments in associates include investments in listed associates with a carrying amount of $4,427.7 million (2009: $3,780.0 million), for which the published price quotations are $4,612.4 million (2009: $3,578.9 million).
NOTES TO ThE FINANCIAL STATEMENTS
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7 ASSOCIATES (cont’d) The group 2010 2009 Note $’000 $’000
(b) Amounts owing by/(to) associates: Current accounts (unsecured) - interest free (trade) 41,484 95,283 - interest free (non-trade) 241,284 246,775 - interest bearing (non-trade) 276,836 325,641
559,604 667,699 Less: Allowance for doubtful receivables (6,330) (5,591)
12 553,274 662,108
Current accounts (mainly non-trade and unsecured) - interest free (105,156) (227,870) - interest bearing (1,586) (78,638)
16 (106,742) (306,508)
(c) Details of the associates are set out in note 39. (d) The financial information of the associates, not adjusted for the percentage ownership held by the
Group is as follows: The group 2010 2009 $’000 $’000
Balance sheet Total assets 40,604,614 33,998,399
Total liabilities 14,433,374 14,871,218 Income statement Revenue 3,638,021 3,063,571
Profit/(Loss) after taxation 2,185,280 (870,392)
8 JOINT VENTURES The group 2010 2009 $’000 $’000
(a) Interests in joint ventures Investment in joint ventures 1,210,765 1,006,636 Less: Allowance for impairment loss (13,004) (22,417)
1,197,761 984,219 Amounts owing by joint ventures: Loan accounts - interest free 217,641 190,743 - interest bearing 459,327 509,193
676,968 699,936
1,874,729 1,684,155 Less: Allowance for doubtful receivables (13,497) (12,099)
1,861,232 1,672,056
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8 JOINT VENTURES (cont’d) (a) Interests in joint ventures (cont’d) (i) Movements in allowance for impairment loss are as follows: The group 2010 2009 Note $’000 $’000
At 1 January (22,417) (8,050) Translation differences – (96) Allowance during the year 27(c)(iii) – (14,271) Allowance written back during the year 27(a) 9,413 –
At 31 December (13,004) (22,417) (ii) The loans to joint ventures form part of the Group’s net investment in joint ventures. These loans
are unsecured and settlement is neither planned nor likely to occur in the foreseeable future. (iii) Loan accounts include an amount of approximately $177.1 million (2009: $570.7 million) which is
subordinated to the repayment of borrowings of certain joint ventures.
(b) Amounts owing by/(to) joint ventures: The group 2010 2009 Note $’000 $’000
Current accounts (unsecured) - interest free (trade) 11,457 16,771 - interest free (non-trade) 167,220 205,916 - interest bearing (non-trade) – 694
178,677 223,381 Less: Allowance for doubtful receivables (11,252) (9,044)
12 167,425 214,337
Current accounts (unsecured) - interest free (mainly non-trade) (22,050) (20,135) - interest bearing (non-trade) – (11)
16 (22,050) (20,146)
(c) Details of the joint ventures are set out in note 40.
(d) Movements in allowance for doubtful receivables in respect of the above loan and current accounts are as follows:
The group 2010 2009 $’000 $’000
At 1 January (21,143) (8,811) Allowance during the year (4,500) (21,156) Allowance written back during the year 6 8,796 Translation differences 888 28
At 31 December (24,749) (21,143)
NOTES TO ThE FINANCIAL STATEMENTS
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8 JOINT VENTURES (cont’d) (e) The Group’s share of the joint ventures’ assets, liabilities and results is as follows: The group 2010 2009 $’000 $’000
Balance sheet Investment properties 1,617,720 1,556,170 Other non-current assets 130,963 112,789
1,748,683 1,668,959 Current assets 1,441,901 1,965,616 Less: Current liabilities (436,191) (843,994)
Net current assets 1,005,710 1,121,622
2,754,393 2,790,581 Less: Non-current liabilities (1,497,256) (1,671,203)
1,257,137 1,119,378
Income statement Revenue 733,583 871,783 Expenses (461,228) (730,407) Fair value gains on investment properties 94,086 378,589
Profit before taxation 366,441 519,965 Taxation (44,946) (52,809)
Profit after taxation 321,495 467,156
(f) The Group’s share of the capital commitments of the joint ventures is $199.8 million (2009:
$183.5 million).
(g) The Group’s share of the contingent liabilities of the joint ventures is $41.8 million (2009: $70.8 million).
9 OThER FINANCIAL ASSETS The group 2010 2009 Note $’000 $’000
(a) Non-current other financial assets Available-for-sale equity securities 202,494 193,156 Loans and receivables (i),(ii) 100,897 39,634 Derivative assets 4,814 569
308,205 233,359
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9 OThER FINANCIAL ASSETS (cont’d) (a) Non-current other financial assets (cont’d) (i) As at 31 December, loans and receivables include: (a) accrued interest receivables of (i) $28.8 million (2009: $16.8 million) from an associate which
bears interest at 3.38% per annum (2009: 3.80% per annum) and is due on 31 December 2014; and (ii) $8.8 million (2009: $5.4 million) from a joint venture which bears interest at 1.38% per annum (2009: 3.04% per annum) and is due after the Temporary Occupation Permit for the development property is obtained, which is expected to be in December 2013; and
(b) an amount of $42.9 million (2009: Nil) due from a third party which bears an effective interest at 5.4% per annum, is unsecured and repayable in June 2012, or such earlier date as mutually agreed.
(ii) As at 31 December 2009, loans and receivables amounting to $15.9 million were mortgaged to banks to secure credit facilities of the Group (notes 18 and 19).
(b) Current other financial assets
The group 2010 2009 $’000 $’000
Available-for-sale money market investment 195,000 195,000 Derivative assets 8,009 1,437
203,009 196,437
10 DEFERRED TAxATION
Recognised Acquisition/ At in profit Disposal of Translation At 1/1/2010 or loss Equity subsidiaries differences 31/12/2010 The group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities Accelerated tax depreciation 25,117 7,873 – (16,725) (3,529) 12,736 Discounts on compound financial instruments 65,986 (10,810) – – – 55,176 Accrued income and interest receivable 7,340 5,605 – – 716 13,661 Capital allowances of assets in investment properties 9,851 283 – – (59) 10,075 Profits recognised on percentage of completion and fair value adjustments on initial recognition of development properties for sale 87,632 (14,387) – 396,699 (22,752) 447,192 Fair value changes of investment properties 26,820 67,425 – 11,495 (10,048) 95,692 Unremitted earnings/ Deferred income 39,042 (12,852) – – 119 26,309 Derivative financial instruments – 578 – – 11 589 Others 10,389 10,394 1,482 1,998 (1,497) 22,766
Total 272,177 54,109 1,482 393,467 (37,039) 684,196
NOTES TO ThE FINANCIAL STATEMENTS
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10 DEFERRED TAxATION (cont’d)
Recognised Acquisition/ At in profit Disposal of Translation At 1/1/2010 or loss Equity subsidiaries differences 31/12/2010 The group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax assets Unutilised tax losses (75,692) (10,733) – 8,038 3,487 (74,900) Provisions and expenses (75,214) 14,170 – 3,202 457 (57,385) Deferred income (15,528) (2,028) – – (185) (17,741) Derivative financial instruments (3,609) – 3,647 – (38) – Fair value adjustments on initial recognition on development properties for sale – – – (24,652) 1,060 (23,592) Others (9,628) 1,783 – – 2,819 (5,026)
Total (179,671) 3,192 3,647 (13,412) 7,600 (178,644)
Recognised Acquisition/ At in profit Disposal of Translation At 1/1/2009 or loss Equity subsidiaries differences 31/12/2009 The group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities Accelerated tax depreciation 20,512 3,843 – 237 525 25,117 Discounts on compound financial instruments 39,995 (12,769) 38,760 – – 65,986 Accrued income and interest receivable 9,837 (2,496) – – (1) 7,340 Capital allowances of assets in investment properties 9,727 124 – – – 9,851 Profits recognised on percentage of completion of development properties for sale 34,806 47,137 – – 5,689 87,632 Fair value changes of investment properties 39,273 29,623 – (43,375) 1,299 26,820 Unremitted earnings/ Deferred income 26,580 5,403 – – 7,059 39,042 Others 6,439 2,384 – – 1,566 10,389
Total 187,169 73,249 38,760 (43,138) 16,137 272,177 Deferred tax assets Unutilised tax losses (19,545) (45,945) – – (10,202) (75,692) Provisions and expenses (46,595) (21,221) – – (7,398) (75,214) Deferred income (13,141) (2,911) – (15) 539 (15,528) Derivative financial instruments (34,905) – 36,117 – (4,821) (3,609) Others (20,436) 10,346 – – 462 (9,628)
Total (134,622) (59,731) 36,117 (15) (21,420) (179,671)
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10 DEFERRED TAxATION (cont’d)
Recognised At in profit At 1/1/2010 or loss Equity 31/12/2010 The Company $’000 $’000 $’000 $’000
Deferred tax liabilities Discounts on compound financial instruments 65,986 (10,810) – 55,176 Deferred tax assets Provisions (5,461) 2,326 – (3,135)
Recognised At in profit At 1/1/2009 or loss Equity 31/12/2009 The Company $’000 $’000 $’000 $’000
Deferred tax liabilities Discounts on compound financial instruments 39,995 (12,769) 38,760 65,986 Deferred tax assets Provisions (9,854) 4,393 – (5,461) Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Deferred tax liabilities 593,238 173,756 55,176 65,986 Deferred tax assets (87,686) (81,250) (3,135) (5,461)
505,552 92,506 52,041 60,525 Deferred tax assets have not been recognised in respect of the following:
The group 2010 2009 $’000 $’000
Deductible temporary differences 118,232 142,711 Tax losses 254,334 244,195 Unutilised capital allowances 819 686
373,385 387,592 Deferred tax assets have not been recognised in respect of these items because it is not probable that future
taxable profits will be available against which the subsidiaries of the Group can utilise the benefits. The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries operate. The deductible temporary differences do not expire under current tax legislation.
NOTES TO ThE FINANCIAL STATEMENTS
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11 DEVELOPMENT PROPERTIES FOR SALE AND STOCK
The group 2010 2009 $’000 $’000
(a) Properties in the course of development, at cost 5,763,896 3,854,973 Less: Allowance for foreseeable losses (47,693) (42,693)
5,716,203 3,812,280 Add: Attributable profit 283,181 388,237
5,999,384 4,200,517 Less: Progress billings (890,118) (799,414)
5,109,266 3,401,103 (b) Completed development properties, at cost 309,764 189,141 (c) Consumable stock 320 26
Total development properties for sale and stock 5,419,350 3,590,270
(d) During the financial year, the following amounts were capitalised as cost of development properties for sale:
The group 2010 2009 Note $’000 $’000
Staff costs 27(b) 52,119 33,377 Interest and securitisation costs paid/payable 27(d) 83,321 74,179 Less: Interest received/receivable from project fixed deposit accounts 27(a) (259) (134)
135,181 107,422
(e) As at 31 December 2010, development properties for sale amounting to approximately $1,069.5 million (2009: $1,158.3 million) were mortgaged to banks to secure credit facilities of the Group (notes 18 and 19).
(f) As at 31 December 2010, properties amounting to approximately $137.5 million (2009: $93.9 million) were acquired through unconditional exchange contracts with various land vendors. The related amount owing to land vendors is secured over the title of the properties being purchased (notes 16 and 21).
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11 DEVELOPMENT PROPERTIES FOR SALE AND STOCK (cont’d) (g) The Group’s current policy of recognising revenue using the percentage of completion method on its
development projects is an allowed alternative under RAP 11. If the Group had adopted the completion of construction method, the effects on the financial statements would have been as follows:
The group Increased/(Decreased) by 2010 2009 $’000 $’000
Balance Sheet: Development properties for sale as at 1 January (240,052) (72,754) Development properties for sale as at 31 December (121,380) (240,052) Interests in associates (57,575) (23,942) Interests in joint ventures (3,872) 907 Revenue reserves as at 1 January (228,125) (196,906) Income Statement: Revenue (104,274) (166,619) Profit attributable to owners of the Company 45,321 (31,219) 12 TRADE AND OThER RECEIVABLES
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Accrued receivables (a) 134,725 57,413 – – Trade receivables 13 285,194 143,626 20 31 Deposits and other receivables 14 891,558 140,557 278 526 Amounts owing by: - subsidiaries 17 – – 1,163,057 87,033 - associates 7(b) 553,274 662,108 – – - joint ventures 8(b) 167,425 214,337 – – - investees: - interest free 1,789 38 – – - interest bearing – 2,003 – – - non-controlling interests (unsecured and interest free) – 35,279 – –
Loans and receivables 33(e) 2,033,965 1,255,361 1,163,355 87,590 Prepayments 105,660 46,555 3,171 257
2,139,625 1,301,916 1,166,526 87,847
(a) In accordance with the Group’s accounting policy, income is recognised based on the progress of construction work for development properties for sale. Upon receipt of Temporary Occupation Permit, the balance of sales consideration to be billed is included as accrued receivables.
(b) As at 31 December 2010, certain trade and other receivables amounting to approximately $1.8 million (2009: $224.3 million) were mortgaged to banks to secure credit facilities of the Group (notes 18 and 19).
NOTES TO ThE FINANCIAL STATEMENTS
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13 TRADE RECEIVABLES
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Trade receivables 299,709 154,281 20 31 Less: Allowance for doubtful receivables (14,515) (10,655) – –
12 285,194 143,626 20 31 (a) The maximum exposure to credit risk for trade receivables at the reporting date (by Strategic Business
Units) is: The group 2010 2009 $’000 $’000
CapitaLand Residential Singapore 33,629 11,607 CapitaLand China Holdings 6,065 437 CapitaLand Commercial 18,043 15,931 The Ascott Limited 42,936 30,177 CapitaLand Financial 49,254 7,948 CapitaMalls Asia 28,890 24,910 Australand 103,338 48,950 Others 3,039 3,666
285,194 143,626
(b) The ageing of trade receivables at the reporting date is: Allowances for Allowances for gross doubtful gross doubtful amount receivables amount receivables 2010 2010 2009 2009 The group $’000 $’000 $’000 $’000
Not past due 240,426 – 96,453 – Past due 1 – 30 days 20,550 (3,410) 26,659 – Past due 31 – 90 days 15,426 (5,448) 8,310 (4,717) More than 90 days 23,307 (5,657) 22,859 (5,938)
299,709 (14,515) 154,281 (10,655)
(c) The movements in allowances for doubtful receivables in respect of trade receivables during the year are as follows:
The group 2010 2009 $’000 $’000
At 1 January (10,655) (9,639) Provision utilised 464 518 Provision during the year (4,255) (1,906) Translation differences (69) 372
At 31 December (14,515) (10,655) Based on historical default rates, the Group believes that no allowance for doubtful debts is necessary
in respect of the receivables not past due.
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14 DEPOSITS AND OThER RECEIVABLES
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Deposits 292,494 29,337 228 61
Other receivables 609,511 116,473 50 465 Less: Allowance for doubtful receivables (17,823) (20,265) – –
591,688 96,208 50 465 Tax recoverable 7,376 15,012 – –
12 891,558 140,557 278 526 Other receivables include staff loans, interest receivables, deferred sales consideration and other
recoverables.
As at 31 December 2010, other receivables include consideration receivable of $399.9 million and loans of $50.8 million assigned to the buyers relating to the sale of a subsidiary.
Other than disclosed above, the Group believes that no additional allowance for doubtful debts is required in respect of the other receivables.
15 CASh AND CASh EqUIVALENTS
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Fixed deposits 5,629,566 7,656,852 52,647 2,355,955 Cash at banks and in hand 1,364,912 975,722 1,307 511 Amounts held under “Project Account Rules – 1997 Ed” (a) 195,586 97,144 – – Cash and cash equivalents 7,190,064 8,729,718 53,954 2,356,466
Restricted bank deposits (2,729) –
Cash and cash equivalents in the statement of cash flows 7,187,335 8,729,718 (a) The withdrawal from amounts held under “Project Account Rules – 1997 Ed” are restricted to payments
for expenditure incurred on development projects.
(b) The Group’s cash and cash equivalents are held mainly in Singapore Dollars, US Dollars, Australian Dollars, Euros, Chinese Renminbi, Hong Kong Dollars, Malaysian Ringgit and Vietnamese Dong. As at 31 December 2010, the effective interest rates for cash and cash equivalents ranged from 0% to 13.0% (2009: 0% to 10.4%) per annum.
NOTES TO ThE FINANCIAL STATEMENTS
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16 TRADE AND OThER PAYABLES
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Trade payables 115,021 121,756 2,239 1,093 Accruals (a) 595,465 530,968 37,649 34,965 Accrued development expenditure 321,632 209,535 – – Accrued capital expenditure (b) 107,065 78,565 – – Other payables (c) 304,117 366,884 1,867 22,623 Rental and other deposits 29,413 33,519 3 3 Derivative liabilities 3,216 40,539 – – Provisions 21(b) 7,177 8,995 – – Liability for employee benefits 22 40,542 46,272 22,927 32,677 Amounts owing to: - subsidiaries 17 – – 130,682 1,151,228 - associates 7(b) 106,742 306,508 – – - joint ventures 8(b) 22,050 20,146 – – Non-controlling interests (unsecured): - interest free 41,747 116,127 – – - interest bearing 198 203 – –
1,694,385 1,880,017 195,367 1,242,589 (a) Accruals included accrued interest payable, accrued expenditure for property, plant and equipment
purchases and accrued administrative expenses.
(b) Accrued capital expenditure relates to amounts owing by a subsidiary of the Group to land vendors under certain unconditional contracts entered into to purchase properties for future developments. The total acquisition cost of the properties has been included in development properties for sale and the amount payable is secured over the relevant development properties.
(c) Other payables included retention sums and amounts payable in connection with capital expenditure incurred.
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17 AMOUNTS OwINg BY/(TO) SUBSIDIARIES
The Company 2010 2009 Note $’000 $’000
Current Amounts owing by subsidiaries: - current accounts, mainly non-trade and interest bearing 52,835 35,115 - loan accounts - interest free 988,374 152,374 - interest bearing 177,797 – 1,166,171 152,374 Less: Allowance for doubtful receivables (55,949) (100,456)
1,110,222 51,918
12 1,163,057 87,033 Amounts owing to subsidiaries: - current accounts, mainly non-trade and interest bearing (293) (1,137) - current loan - interest free (130,389) (62,428) - interest bearing – (1,087,663)
16 (130,682) (1,151,228) (a) Movements in allowance for doubtful receivables are as follows: The Company 2010 2009 $’000 $’000
At 1 January 100,456 27,799 Allowance during the year – 72,757 Allowance written back during the year (44,507) (100)
At 31 December 55,949 100,456
(b) All balances with subsidiaries are unsecured and repayable on demand.
18 BANK BORROwINgS The group 2010 2009 $’000 $’000
Bank borrowings - secured 1,276,512 2,325,741 - unsecured 3,374,153 2,619,003
4,650,665 4,944,744
NOTES TO ThE FINANCIAL STATEMENTS
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18 BANK BORROwINgS (cont’d) The group 2010 2009 $’000 $’000
Repayable: Not later than 1 year 852,255 992,974
Between 1 and 2 years 1,420,784 1,762,539 Between 2 and 5 years 2,061,522 2,061,723 After 5 years 316,104 127,508
After 1 year 3,798,410 3,951,770
4,650,665 4,944,744 (a) The Group’s borrowings are denominated mainly in Singapore Dollars, US Dollars, Australian Dollars,
Chinese Renminbi, Hong Kong Dollars and Vietnamese Dong. As at 31 December 2010, the effective interest rates for bank borrowings ranged from 0.63% to 16.00% (2009: 0.42% to 15.04%) per annum.
(b) Bank borrowings are secured by the following assets, details of which are disclosed in the respective notes to the financial statements:
(i) mortgages on the borrowing subsidiaries’ property, plant and equipment, investment properties and development properties for sale; and
(ii) assignment of all rights, titles and benefits with respect to the properties mortgaged.
19 DEBT SECURITIES Debt securities comprise fixed rate notes, floating rate notes, hybrid rate notes and bonds issued by the
Company and subsidiaries in the Group.
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Convertible bonds (unsecured) 3,370,641 3,294,681 3,379,883 3,305,801 Notes issued 2,336,737 2,035,548 – –
5,707,378 5,330,229 3,379,883 3,305,801 Secured notes 339,551 397,120 – – Unsecured notes and bonds 5,367,827 4,933,109 3,379,883 3,305,801
5,707,378 5,330,229 3,379,883 3,305,801 Repayable: Not later than 1 year 909,519 400,776 – –
Between 1 and 2 years 300,000 906,120 – – Between 2 and 5 years 129,869 429,835 – – After 5 years 4,367,990 3,593,498 3,379,883 3,305,801
After 1 year 4,797,859 4,929,453 3,379,883 3,305,801
5,707,378 5,330,229 3,379,883 3,305,801 (a) As at 31 December 2010, the effective interest rates for debt securities ranged from 0.97% to 6.27%
(2009: 1.31% to 4.78%) per annum.
(b) The repayment schedule for convertible bonds was based on its final maturity dates.
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19 DEBT SECURITIES (cont’d) (c) The Company has the following convertible bonds which remain outstanding as at 31 December 2010:
Aggregate Principal Final Date Amount Conversion Interest Maturity Redemption Issued Outstanding Price Rate Put Dates Dates Price
15 November 2006 $424.7 million $6.01 2.1% 15 November 2013 15 November 2016 100% 20 June 2007 $1.0 billion $11.5218 2.95% 20 June 2017 20 June 2022 100% & 20 June 2019 5 March 2008 $1.05 billion $7.1468 3.125% 5 March 2015 5 March 2018 109.998% 3 September 2009 $1.2 billion $4.7275* 2.875% – 3 September 2016 100%
* The conversion price has been adjusted as a result of the payment of special dividend of $0.05 per issued ordinary share for the financial year ended 31 December 2009.
(d) Secured debt securities (i) A subsidary of the Group, Australand, issued Commercial Mortgage-backed Securities amounting
to A$267.5 million (2009: A$267.5 million), equivalent to $339.6 million (2009: $336.3 million), maturing on 10 March 2011.
(ii) These notes are fully secured by a first ranking real property mortgage over specific investment properties. Details on assets pledged are disclosed in the respective notes to the financial statements.
(e) Unsecured debt securities The holders of some of the debt securities have the option to have all or any of their notes purchased by
the Group at their principal amounts on interest payment dates. Unless previously redeemed or purchased and cancelled, the debt securities are redeemable at the principal amounts on their respective maturity dates.
20 FINANCE LEASES There was no outstanding obligation under finance leases as at 31 December 2010 following the sale of
certain subsidiaries by the Group during the year. In 2009, the Group had obligations under finance leases that are repayable as follows:
Lease Principal Interest Payments $’000 $’000 $’000
2009 Repayable: Not later than 1 year 3,836 738 4,574 Between 1 and 5 years 17,199 2,085 19,284 After 5 years 16,546 681 17,227 After 1 year 33,745 2,766 36,511
37,581 3,504 41,085
NOTES TO ThE FINANCIAL STATEMENTS
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21 OThER NON-CURRENT LIABILITIES
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Amounts owing to non-controlling interests (unsecured) (a) - interest free 112,378 20,927 – – - interest bearing 157,919 157,919 – – Liability for employee benefits 22 39,941 54,689 32,373 44,597 Derivative liabilities 6,767 23,491 – – Provisions (b) 175,322 154,696 – – Customer deposits and other non-current payables (c) 47,929 50,300 – – Deferred income (d) 431 528 – –
540,687 462,550 32,373 44,597 (a) The amounts owing to non-controlling interests are not expected to be repaid in the next 12 months.
(b) During the year, provisions totalling $25.8 million (2009: $145.9 million) were made for the Group’s exposure to the unavoidable costs of meeting its obligation under contractual agreements. Movements in the provisions are as follows:
The group 2010 2009 Note $’000 $’000
At 1 January 163,691 35,654 Provision during the year 27(c)(iii) 25,848 145,924 Provision utilised (7,040) (17,887)
At 31 December 182,499 163,691 Current 16 7,177 8,995 Non-current 175,322 154,696
182,499 163,691 (c) The other non-current payables include an amount of approximately $30.5 million (2009: $15.3 million),
owing to land vendors on terms similar to those described in note 16(b).
(d) Deferred income represents a government grant received to fund the costs of an infrastructure in Singapore.
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22 EMPLOYEE BENEFITS
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
Liability for short term accumulating compensated absences 5,594 3,120 722 212 Liability for long service leave entitlement 5,359 4,430 – – Liability for cash-settled share-based payments 9,682 11,403 807 845 Liability for staff incentive 59,848 82,008 53,771 76,217
80,483 100,961 55,300 77,274 Current 16 40,542 46,272 22,927 32,677 Non-current 21 39,941 54,689 32,373 44,597
80,483 100,961 55,300 77,274 (a) Long service leave This liability relates principally to provision made by a foreign subsidiary in relation to employees’ leave
entitlement granted after certain qualifying periods based on duration of employees’ services rendered.
(b) Staff incentive This relates to staff incentive which is related to the achievement of the Group’s financial performance
and payable over a period of time.
(c) Equity compensation benefits Share Plans of the Company The CapitaLand Share Option Plan, the CapitaLand Performance Share Plan and the CapitaLand
Restricted Stock Plan (collectively referred to as the “Existing Share Plans”) were approved and adopted by the members of the Company at an Extraordinary General Meeting (“EGM”) held on 16 November 2000.
A new CapitaLand PSP 2010 and CapitaLand RSP 2010 (together, the “New Share Plans”) were approved by the members of the Company at the EGM held on 16 April 2010. These new plans are intended to replace the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan under the Existing Share Plans. The Company did not extend the duration of, or replace, the existing CapitaLand Share Option Plan. The Existing Share Plans were terminated following the adoption of the New Share Plans. However, all awards granted under the Existing Share Plans prior to its termination will continue to be valid and be subject to the terms and conditions of the Existing Share Plans.
NOTES TO ThE FINANCIAL STATEMENTS
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) CapitaLand Share Option Plan The Company ceased to grant options under the CapitaLand Share Option Plan with effect from 2007.
Statutory information regarding the CapitaLand Share Option Plan is set out below:
(i) The exercise price of the options is set either at: - A price equal to the volume-weighted average price on the SGX-ST over the three consecutive
trading days immediately preceding the grant of the option (“Market Price”), or such higher price as may be determined by the ERCC in its absolute discretion; or
- A discount not exceeding 20% of the Market Price in respect of that option.
(ii) The options vest between one year and four years from the grant date.
(iii) The options granted expire after five or 10 years from the dates of the grant.
Movements in the number of outstanding options and their related weighted average exercise prices are as follows:
weighted weighted average No. of average No. of exercise price options exercise price options 2010 2010 2009 2009 $ (’000) $ (’000)
At 1 January 2.78 18,707 3.05 20,044 Additional options granted arising from modification – – 3.00 3,674 Forfeited/Expired 2.87 (259) 3.60 (826) Exercised 2.75 (8,048) 1.95 (4,185)
At 31 December 2.71 10,400 2.78 18,707 Exercisable on 31 December 2.71 10,400 2.59 13,763 Options exercised in 2010 resulted in 8,048,400 (2009: 4,185,255) shares being issued at a weighted
average market price of $3.93 (2009: $3.54) each. Options were exercised on a regular basis throughout the year. The weighted average share price during the year was $3.88 (2009: $3.14).
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) CapitaLand Share Option Plan (cont’d) The fair value of services received in return for options granted is measured by reference to the fair value
of options granted. The fair value of the options granted is measured based on Enhanced Trinomial (Hull and White) valuation model.
The share price is based on volume-weighted average share price for three consecutive trading days
prior to the grant date. The expected volatility is based on the historical volatility and calculated based on 36 months prior to the date of grant. The Company uses 10 (or five) years risk-free rate for options with a 10 (or five) years contractual term. Expected dividend yield is based on expected dividend payout over the 1-year volume-weighted average share price prior to the grant date. Pre-vesting forfeiture rates and post-vesting forfeiture rates are based on historical option forfeiture and employee turnover rates. Exercise multiple is estimated based on historical employee exercise behaviour.
The Modification Exercise in the CapitaLand Share Option Plan The Company paid a special dividend of $0.05 per issued ordinary share for the financial year ended 31
December 2009. In accordance with the Company’s Share Option Plan, when the Company declares a special dividend (whether in cash or in specie), the ERCC may as it deems appropriate determine whether the number of shares which are the subject of an award to the extent not yet vested shall be adjusted. Any adjustment under this rule should be made in a way that an option holder will not receive a benefit that a shareholder does not receive and has been confirmed in writing by the auditors to be in their opinion, fair and reasonable.
On 30 April 2010, adjustments to the terms of the unexercised options were made (based on the ex-
rights date of 26 April 2010, and hereby also known as “modification date”) in manner such that the option holder will maintain parity of fair value before and on the modification date using the Equivalent Economic Value concept. The fair value of options was calculated using the Enhanced Trinomial (Hull and White) option valuation model.
Exercise prices of the unexercised options were adjusted lower ranging from $0.05 to $0.10 per option
to reflect the special dividend paid. No adjustments were made to the vesting and exercise periods of the options.
No incremental fair value of options was recognised as a result of the modification exercise and the significant inputs into the Enhanced Trinomial (Hull and White) option valuation model were:
– Share price of $3.94, based on volume-weighted average share price for three consecutive trading
days prior to the modification date; – The volatility measured at the standard deviation of expected share price returns of 32.64%, based
on 36 months closing share price prior to the modification date; – Risk-free interest rate ranging from 0.43% to 2.13% per annum that matches the remaining life of
the award. This is based on the zero-coupon Singapore Government bond yield on modification date for awards matching tenure contractual life; and
– Dividend yield of 1.46% based on expected dividend over one-year volume-weighted average share price prior to the modification date.
NOTES TO ThE FINANCIAL STATEMENTS
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) CapitaLand Share Option Plan (cont’d) Options outstanding at the end of the year are summarised below:
Options weighted Options weighted outstanding average outstanding average Range of Exercise Price 2010 contractual life 2009 contractual life Pre Modification Post Modification (’000) (years) (’000) (years)
$0.35 to $0.49 $0.30 to $0.44 247 2.18 290 3.18 $0.50 to $0.55 $0.45 to $0.50 678 3.00 951 3.88 $0.56 to $1.14 $0.51 to $1.09 43 3.66 103 3.45 $1.15 to $1.48 $1.10 to $1.43 97 0.46 230 1.43 $1.49 to $2.22 $1.44 to $2.16 1,923 4.18 3,886 5.03 $2.23 to $4.20 $2.17 to $4.10 7,412 5.01 13,247 5.87
10,400 18,707 CapitaLand Performance Share Plan This relates to compensation costs of the Company’s Performance Share Plan reflecting the benefits
accruing to the employees over the service period to which the performance criteria relate. The number of shares outstanding under the CapitaLand Performance Share Plan at the end of the year
is summarised below: 2010 2009 (’000) (’000)
At 1 January 9,464 8,425 Granted 3,227 5,243 Lapsed/Cancelled (3,499) (1,432) Additional shares granted arising from modification 363 1,840 Released (336) (4,612)
At 31 December 9,219 9,464
The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
The fair values of the shares are determined using Monte Carlo simulation method at the measurement
date which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of Award 2010 2009
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $2.92 $1.56 Expected volatility based on 36 months closing share price prior to grant date 32.69% 41.25% MSCI Asia Pacific ex-Japan Real Estate Index annualised volatility based on 36 months prior to grant date 23.77% 26.97%
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) CapitaLand Performance Share Plan (cont’d)
Year of Award 2010 2009
Weighted average fair value of shares and assumptions Share price at grant date $3.89 $2.03 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the length of vesting period 0.67% 0.99% Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 1.57% 1.77% Correlation of return between MSCI Asia Pacific ex-Japan Real Estate Index and the Company’s share price measured over 36 months prior to the grant date 67.74% 55.79%
The Modification Exercise in the CapitaLand Performance Share Plan During the year, the Company paid a special dividend of $0.05 per issued ordinary share for the financial
year ended 31 December 2009. In accordance with the rules of the CapitaLand Performance Share Plan, when the Company declares a special dividend (whether in cash or in specie), the ERCC may as it deems appropriate determine whether the number of shares which are the subject of an award to the extent not yet vested shall be adjusted. Any adjustment under this rule should be made in a way that a CapitaLand Performance Share Plan participant will not receive a benefit that a shareholder does not receive and has been confirmed in writing by the auditors to be in their opinion, fair and reasonable.
On 3 May 2010, adjustments to the terms of the unvested shares were made (based on the ex-rights
date of 26 April 2010, and hereby also known as “modification date”) in manner such that the CapitaLand Performance Share Plan participants will maintain parity of fair value before and on the modification date using the Equivalent Economic Value concept. The fair value of the shares was calculated using the Monte Carlo simulation model.
The number of shares was adjusted to reflect the special dividend paid. The adjustments resulted in
additional awards of 362,822 shares during the financial year ended 31 December 2010. No incremental fair value of shares was recognised as a result of the modification exercise and the
significant inputs into the Monte Carlo simulation model were: – Share price of $3.94, based on volume-weighted average share price for three consecutive trading
days prior to the modification date; – The volatility measured at the standard deviation of expected share price returns of 32.64%,
based on 36 months closing share price prior to the modification date; – The MSCI Asia Pacific ex Japan Real Estate Index annualised volatility based on 36 months prior
to the modification date of 24.15%; – Correlation of return between MSCI Asia Pacific ex-Japan Real Estate Index and the Company’s
share price measured over 36 months prior to the modification date of 68.07%; – Risk-free interest rate ranging from 0.43% to 0.69% per annum that matches the remaining life of
the award. This is based on the zero-coupon Singapore Government bond yield on modification date for awards matching tenure contractual life; and
– Dividend yield of 1.46% based on expected dividend over one-year volume-weighted average share price prior to the modification date.
NOTES TO ThE FINANCIAL STATEMENTS
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) CapitaLand Restricted Stock Plan – Equity-settled/Cash-settled This relates to compensation costs of the Company’s Restricted Stock Plan reflecting the benefits
accruing to the employees over the service period to which the performance criteria relate. The Company granted awards of shares under the CapitaLand Restricted Stock Plan in place of options with effect from 2007.
With effect from 2008, the ERCC of the Company has instituted a set of share ownership guidelines for senior management who receives shares under the CapitaLand Restricted Stock Plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of CapitaLand shares acquired through the CapitaLand Restricted Stock Plan which will vary according to their job grades and base salaries.
The number of shares outstanding under the CapitaLand Restricted Stock Plan at the end of the year is summarised below:
2010 2009 (’000) (’000)
At 1 January 13,621 9,883 Granted 8,597 7,951 Lapsed/Cancelled (1,803) (1,624) Additional shares granted arising from modification 254 1,736 Released* (7,178) (4,325)
At 31 December 13,491 13,621
* The number of shares released during the year was 7,177,767 (2009: 4,324,511), of which 1,063,145 (2009: 579,928) were cash-settled.
As at 31 December 2010, the number of shares comprised in awards granted under the CapitaLand Restricted Stock Plan is as follows:
2010 2009 Equity-settled Cash-settled Equity-settled Cash-settled (’000) (’000) (’000) (’000)
Final number of shares has not been determined (baseline award) # 5,079 664 6,965 1,265 Final number of shares determined but not released 6,594 1,154 4,616 775
11,673 1,818 11,581 2,040
# The final number of shares released could range from 0% to 150% of the baseline award.
The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost. For the year 2010, the awards granted to non-executive directors are time-based with no performance conditions and will be released over a vesting period of two years.
Cash-settled awards of shares are measured at their current fair values at each balance sheet date.
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) CapitaLand Restricted Stock Plan – Equity-settled/Cash-settled (cont’d) The fair values of the shares are determined using Monte Carlo simulation method at the measurement
date which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of Award 2010 2009
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $3.78 $1.96 Expected volatility based on 36 months closing share price prior to grant date 32.69% 41.25% Share price at grant date $3.89 $2.03 Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the 0.38% to 0.47% to length of vesting period 0.67% 0.99% Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 1.57% 1.77% The Modification Exercise in the CapitaLand Restricted Stock Plan The Company paid a special dividend of $0.05 per issued ordinary share for the financial year ended 31
December 2009. In accordance with the Company’s Restricted Stock Plan Rules, when the Company declares a special dividend (whether in cash or in specie), the ERCC may as it deems appropriate determine whether the number of shares which are the subject of an award to the extent not yet vested shall be adjusted. Any adjustment under this rule should be made in a way that a CapitaLand Restricted Stock Plan participant will not receive a benefit that a shareholder does not receive and has been confirmed in writing by the auditors to be in their opinion, fair and reasonable.
On 3 May 2010, adjustments to the terms of the unvested shares were made (based on the ex-rights
date of 26 April 2010, and hereby also known as “modification date”) in manner such that the CapitaLand Restricted Stock Plan participants will maintain parity of fair value before and on the modification date using the Equivalent Economic Value concept. The fair value of the shares was calculated using the Monte Carlo simulation model.
The number of shares was adjusted to reflect the special dividend paid. The adjustments resulted in
additional awards of 254,118 shares (of which 34,083 are to be cash-settled) during the financial year ended 31 December 2010.
No incremental fair value of shares was recognised as a result of the modification exercise and the
significant inputs into the Monte Carlo simulation model were: – Share price of $3.94, based on volume-weighted average share price for three consecutive trading
days prior to the modification date; – The volatility measured at the standard deviation of expected share price returns of 32.64%, based
on 36 months closing share price prior to the modification date; – Risk-free interest rate ranging from 0.43% to 0.69% per annum that matches the remaining life of
the award. This is based on the zero-coupon Singapore Government bond yield on modification date for awards matching tenure contractual life; and
– Dividend yield of 1.46% based on expected dividend over one-year volume-weighted average share price prior to the modification date.
NOTES TO ThE FINANCIAL STATEMENTS
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) Share Plans of Subsidiaries (a) CapitaMalls Asia Limited (“CMA”) The CMA Performance Share Plan and the CMA Restricted Stock Plan (collectively referred to
as the “CMA Share Plans”) were approved and adopted by the shareholders of CMA at an Extraordinary General Meeting held on 30 October 2009.
CMA Performance Share Plan This relates to compensation costs of the CMA’s Performance Share Plan reflecting the benefits
accruing to the employees of CMA over the service period to which the performance criteria relate. The number of shares granted during the year and remained outstanding under the CMA
Performance Share Plan at the end of the year is 871,700 (2009: Nil).
The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
The fair values of the shares are determined using Monte Carlo simulation method at the
measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of Award 2010 2009
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $1.88 – Expected volatility based on 36 months closing share price prior to grant date 36.38% – MSCI Asia Pacific ex-Japan Real Estate Index annualised volatility based on 36 months prior to grant date 26.06% – Share price at grant date $2.34 – Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the length of vesting period 0.67% – Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 0.71% – Correlation of return between MSCI Asia Pacific ex-Japan Real Estate Index and CMA’s share price measured over 36 months prior to the grant date 68.21% –
CMA Restricted Stock Plan – Equity-settled/Cash-settled This relates to compensation costs of the CMA’s Restricted Stock Plan reflecting the benefits
accruing to the employees of CMA over the service period to which the performance criteria relate.
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) Share Plans of Subsidiaries (cont’d) (a) CapitaMalls Asia Limited (“CMA”) (cont’d) CMA Restricted Stock Plan – Equity-settled/Cash-settled (cont’d) The number of shares outstanding under the CMA Restricted Stock Plan at the end of the year is
summarised below: 2010 2009 (’000) (’000)
At 1 January – – Granted 4,634 – Lapsed/Cancelled (517) –
At 31 December * 4,117 –
* As at 31 December 2010, the number of shares awarded and outstanding was 4,116,979, of which 1,209,807
were to be cash-settled.
The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The shares have a vesting schedule of two to three years. Recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
Cash-settled awards of shares are measured at their current fair values at each balance
sheet date. The fair values of the shares are determined using Monte Carlo simulation method at the
measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions are set out below:
Year of Award 2010 2009 Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $2.30 – Expected volatility based on 36 months closing share price prior to grant date 36.38% – Share price at grant date $2.34 – Risk-free interest rate equal to the implied yield on zero-coupon Singapore Government bond with a term equal to the length of vesting period 0.38% to 0.67% – Expected dividend yield over 12 months volume-weighted average share price prior to the grant date 0.71% –
(b) Australand Australand Employee Securities Ownership Plan Australand has an Australand Employees Securities Ownership Plan (“Australand ESOP”) which
offers a five-year, interest-free loan to enable employees to purchase a specified number of Australand stapled securities allocated by Australand’s Remuneration Committee. The loan has limited recourse and the employees’ obligations to repay the loan are limited to the market value of the securities at any time. The loan will be partly repaid by distributions on the securities held and must be fully repaid on cessation of employment with Australand or by the fifth anniversary of the origination date of the loan, whichever is earlier. The last offer under Australand ESOP was made on 30 June 2006 and hence Australand ESOP will cease to exist on 30 June 2011.
NOTES TO ThE FINANCIAL STATEMENTS
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) Share Plans of Subsidiaries (cont’d) (b) Australand (cont’d) Australand Employee Securities Ownership Plan (cont’d) In addition to the above Australand ESOP, options over unissued Australand stapled securities have
previously been issued to employees under the terms of the Australand Share Option Scheme. No options have been issued under this scheme since March 2002. No future options will be issued under this scheme.
During the financial year, there were 144,250 (pre-consolidation) securities being issued by Australand by virtue of the exercise of options at an exercise price of A$0.22 per security.
As at 31 December 2010, there were 13,550 unissued securities under options at an exercise price of A$1.10 per security.
Australand Performance Rights Plan The establishment of the Australand Performance Rights Plan was approved by Australand’s
shareholders at the 2007 Annual General Meeting (“AGM”). The number of shares outstanding under the Australand Performance Rights Plan as at the end of
the year is summarised below:
2010 2009 (’000) (’000)
At 1 January 2,725* 6,374 Granted 1,940 14,710 Lapsed/Forfeited (752) (7,459)
At 31 December 3,913 13,625 * In May 2010, the total number of stapled securities on issue were consolidated on a 1 for 5 basis. For every
5 stapled securities on issue prior to the consolidation, security holders received 1 new stapled security. Opening balances of performance rights granted, and performance rights exercised, lapsed and forfeited, as well as their fair values, have been adjusted for the effect of the security consolidation. The comparative disclosure have not been adjusted.
The fair value is independently determined at grant date using the Monte Carlo Simulation technique. This technique involves stock prices being randomly simulated under risk neutral conditions and parameters in order to calculate the value of the performance rights at expiry. The simulation is repeated numerous times to produce distribution payoff amounts. The performance rights value is taken as the average of the payoff amounts calculated and discounted back to the valuation date. The fair value and assumptions are set out below:
Year of Award 2010 2009
Fair value of performance rights and assumptions: Fair value at measurement date A$1.79 A$0.29 Share price at grant date A$2.75 A$0.45 Expected price volatility of Australand’s stapled securities 40.0% 50.0% Expected dividend yield 8.0% 12.5% Risk-free discount rate 4.6% 4.2% Expected franking rate 0% 0% Australand and index correlation 61.0% 63.0%
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22 EMPLOYEE BENEFITS (cont’d) (c) Equity compensation benefits (cont’d) Share Plans of Subsidiaries (cont’d) (b) Australand (cont’d) Australand Tax Exempt Employee Security Plan The Australand Tax Exempt Employee Security Plan in which tax exempt stapled securities may be
issued by the company to employees for no cash consideration was approved by Australand shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand Performance Rights Plan) who have been continuously employed by Australand for a period of at least nine months as at the invitation date and are still employees as at the acquisition date are eligible to participate in the plan. Employees may elect not to participate in the plan.
The plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees
annually for no cash consideration. A three-year restriction period on selling, transferring or otherwise dealing with the securities
applies, unless the employee leaves Australand. Under the plan, employees will receive the same benefits as all other security holders.
The number of securities issued to participants in the plan is the offer amount divided by the
weighted average price at which Australand’s stapled securities is traded on the Australian Stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
During the year, 110,410 (2009: Nil) securities were issued under the Australand Tax Exempt
Employee Security Plan year at the weighted average market price of A$2.76 per security.
23 ShARE CAPITAL
The Company 2010 2009 No. of shares No. of shares Issued and fully paid, with no par value (’000) (’000)
At 1 January 4,247,993 2,823,506 Issue of shares pursuant to the: - Rights issue – 1,411,945 - Exercise of options 8,048 4,185 - Performance Share and Restricted Stock Plans 6,451 8,357
At 31 December 4,262,492 4,247,993
(a) The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regards to the Company’s residual assets.
(b) At the end of the financial year, there were 10,400,345 (2009: 18,707,026) options under the CapitaLand Share Option Plan, a maximum of 18,438,960 (2009: 18,927,310) shares under the CapitaLand Performance Share Plan and 14,219,986 (2009: 15,063,405) shares under the CapitaLand Restricted Stock Plan, details of which are disclosed in note 22(c).
NOTES TO ThE FINANCIAL STATEMENTS
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23 ShARE CAPITAL (cont’d) (c) As at December 2010, the convertible bonds issued by the Company which remained outstanding are
as follows:
Conversion Principal Amount Maturity Date Price $ million Year $ 424.75 2016 6.01 Convertible into 70,673,876 new ordinary shares 1,000.00 2022 11.5218 Convertible into 86,791,994 new ordinary shares 1,050.00 2018 7.1468 Convertible into 146,918,900 new ordinary shares 1,200.00 2016 4.7275 Convertible into 253,833,950 new ordinary shares There has been no redemption or conversion by the bondholders of any of the above convertible bonds
during the year (2009: Nil).
(d) The Company did not hold any treasury shares as at 31 December 2010 and 31 December 2009.
Capital Management The Group’s policy is to build a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Group monitors the return on capital, which the Group defines as total shareholders’ equity, excluding non-controlling interests, and the level of dividends to ordinary shareholders.
The Group also monitors capital using a net debt equity ratio, which is defined as net borrowings divided by total equity (including non-controlling interests).
The group 2010 2009 $’000 $’000
Gross borrowings 10,358,043 10,312,554 Cash and cash equivalents (7,190,064) (8,729,718)
Net debt 3,167,979 1,582,836
Total equity 18,017,462 16,879,763 Net debt equity ratio 0.18 0.09 The Group seeks to strike a balance between the higher returns that might be possible with higher level of
borrowings and the liquidity and security afforded by a sound capital position.
In addition, the Company has a share purchase mandate as approved by its shareholders which allows the Company greater flexibility over its share capital structure with a view to improving, inter alia, its return on equity. The shares which are purchased may be held as treasury shares which the Company may transfer for the purposes of or pursuant to its employee share-based incentive schemes so as to enable the Company to take advantage of tax deductions under the current taxation regime. The use of treasury shares in lieu of issuing new shares would also mitigate the dilution impact on existing shareholders. No share purchase was made during the year.
Six of the Group’s subsidiaries are required to maintain certain minimum base capital and financial resources, or shareholders’ funds as they are holders of Capital Markets Services licenses registered under the Monetary Authority of Singapore or the Securities Commission Malaysia to conduct the regulated activity of Real Estate Investment Trust management. These subsidiaries have complied with the applicable requirements throughout the year.
There were no changes in the Group’s approach to capital management during the year.
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24 OThER RESERVES
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Capital reserve 453,116 435,483 383,490 383,490 Equity compensation reserve 101,033 94,224 37,862 36,184 Hedging reserve 4,334 (37,682) – – Available-for-sale reserve 49,451 29,722 – – Foreign currency translation reserve (366,048) (181,748) – –
241,886 339,999 421,352 419,674 The capital reserve comprises mainly the value of the option granted to bondholders to convert their
convertible bonds into ordinary shares of the Company and share of associates’ and joint ventures’ capital reserve.
The equity compensation reserve comprises the cumulative value of employee services received for the issue of the options and shares under the share plans of the Company and its subsidiaries (note 22(c)).
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments related to hedged transactions that have not yet occurred.
The available-for-sale reserve comprises the cumulative net change in the fair value of available-for-sale investment until the investment is derecognised.
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign entities, as well as from the translation of foreign currency loans used to hedge or form part of the Group’s net investments in foreign entities.
25 OThER COMPREhENSIVE INCOME
2010 2009 Before tax Tax expense Net of tax Before tax Tax expense Net of tax The group $’000 $’000 $’000 $’000 $’000 $’000 Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations (345,167) – (345,167) 151,907 – 151,907 Recognition of exchange differences to profit or loss 126,593 – 126,593 6,844 – 6,844 Change in fair value of available-for-sale investments 34,218 (1,470) 32,748 53,839 – 53,839 Recognition of fair value gain in available-for-sale reserve to profit or loss (13,018) – (13,018) (41,403) – (41,403) Effective portion of change in fair value of cash flow hedges 24,448 (3,647) 20,801 150,916 (36,117) 114,799 Recognition of fair value losses/ (gains) in hedging reserve to profit or loss 12,873 – 12,873 (12,214) – (12,214) Recognition of changes in other capital reserve to profit or loss – – – (132) – (132) Share of other comprehensive income of associates and joint ventures 15,756 – 15,756 (38,308) – (38,308) Recognition of share of other comprehensive income of associates and joint ventures to profit or loss 6 – 6 10,786 – 10,786
(144,291) (5,117) (149,408) 282,235 (36,117) 246,118
NOTES TO ThE FINANCIAL STATEMENTS
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26 REVENUE Revenue of the Group and of the Company is analysed as follows: The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Trading of properties 2,199,545 1,827,156 – – Rental and related income 432,197 435,839 – – Fee income 421,866 353,092 66,061 47,920 Serviced residence rental and related income 318,234 325,732 – – Dividend income from subsidiaries – – 220,504 462,428 Others 10,900 15,540 – –
3,382,742 2,957,359 286,565 510,348
27 PROFIT BEFORE TAxATION Profit before taxation includes the following: The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
(a) Other operating income Interest income from: - fixed deposits 30,530 27,454 925 1,777 - subsidiaries – – 106,609 90,454 - associates and joint ventures 43,353 43,442 – – - investee companies and others 9,403 5,788 2 26 - interest capitalised in development properties for sale 11(d) (259) (134) – –
83,027 76,550 107,536 92,257 Dividend income 3,612 8,151 – – Net fair value gain on derivative instruments 19,652 – – – Net fair value gains from investment properties 5 394,585 – – – Gain on disposal/ redemption of available-for-sale financial assets 12,976 56,467 – – Gain on disposal/dilution/ liquidation of subsidiaries, associates and joint ventures 241,547* 925,214 90,039 1,154,210 Foreign exchange gain – 23,015 5,779 12,404 Gain on disposal of investment properties 13,845 19,140 – – Gain on disposal of property, plant and equipment 12,077 23,576 12 – Gain on repurchase of convertible bonds – 7,059 – 8,289
* Includes re-measurement gain attributable to recognising investment retained in former subsidiaries at their respective fair values of $88.1million (2009: Nil).
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27 PROFIT BEFORE TAxATION (cont’d)
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
(a) Other operating income (cont’d) Gain from bargain purchase arising from an increased stake in subsidiaries 11,580 2,958 – – Underwriting fee income from associates’ rights issue – 19,359 – 14,802 Write back of doubtful receivables – – 53,596 – Write back of impairment of subsidiaries – – 49,432 – Write back of impairment of joint ventures 8(a)(i) 9,413 – – – Others 90,373 76,910 14,185 2,813
892,687 1,238,399 320,579 1,284,775
(b) Staff costs Wages and salaries 385,598 338,107 29,953 29,960 Contributions to defined contribution plans 41,669 41,230 1,892 1,600 Share-based expenses - equity-settled 34,298 24,682 7,786 4,742 - cash-settled 4,830 4,045 533 542 Increase/(Decrease) in liability for short term accumulating compensated absences 1,485 (221) 511 8 Staff benefits, training/ development costs and others 63,222 48,035 3,257 2,143
531,102 455,878 43,932 38,995 Less: Staff costs capitalised in development properties for sale 11(d) (52,119) (33,377) – –
478,983 422,501 43,932 38,995
Recognised in: Cost of sales (c)(i) 213,446 215,847 – – Administrative expenses (c)(ii) 265,537 206,654 43,932 38,995
478,983 422,501 43,932 38,995
NOTES TO ThE FINANCIAL STATEMENTS
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27 PROFIT BEFORE TAxATION (cont’d)
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
(c)(i) Cost of sales include: Staff costs (b) 213,446 215,847 – – Provision for foreseeable losses on development properties for sale 5,000 158,104 – – Operating lease expenses 51,419 51,052 – – Operating expenses arising from investment properties that generated rental income 105,863 110,434 – – Amortisation of intangible assets 484 484 – – (ii) Administrative expenses include: Staff costs (b) 265,537 206,654 43,932 38,995 Allowance for doubtful receivables 5,281 15,361 – – Amortisation of intangible assets 1,143 1,080 – – Auditors’ remuneration: - auditors of the Company 1,808 1,612 170 174 - other auditors 4,145 4,146 – 14 Non-audit fees: - auditors of the Company 159 906 10 28 - other auditors 738 662 – – Depreciation of property, plant and equipment 3 57,998 61,466 4,652 4,304 Operating lease expenses 36,793 39,448 4,573 3,613 (iii) Other operating expenses include: Allowance for doubtful receivables 1,100 – – 90,706 Net fair value losses from investment properties 5 – 225,932 – – Impairment of available- for-sale financial assets 10,936 50,953 – – Net fair value loss on derivative instruments – 34,210 – – Foreign exchange loss 27,536 – – – Impairment and write off of property, plant and equipment 23,891 1,826 94 75 Provision for foreseeable losses 21(b) 25,848 145,924 – –
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27 PROFIT BEFORE TAxATION (cont’d)
The group The Company 2010 2009 2010 2009 Note $’000 $’000 $’000 $’000
(c)(iii) Other operating expenses include: (cont’d) Fidelity losses arising from financial irregularities 14,000 – – – Impairment of: - subsidiaries – – – 115,368 - goodwill 4 – 55,001 – – - associates 7(a)(i) 4,000 40,983 – – - joint ventures 8(a)(i) – 14,271 – – (d) Finance costs Interest and securitisation costs paid and payable to: - subsidiaries – – 4,081 1,901 - bank loans and overdrafts 212,240 224,328 – – - debt securities 81,215 91,604 – – - non-controlling interests 5,610 6,554 – – Convertible bonds: - interest expense 105,732 87,300 105,732 87,300 - amortisation of bond discount 63,584 43,650 63,584 43,650 - accretion of bond premium 10,498 11,945 10,498 11,945 Derivative financial instruments 1,759 24,847 – – Others 59,936 44,455 – –
Total borrowing costs 540,574 534,683 183,895 144,796 Less: Borrowing costs capitalised in: - property, plant and equipment 3(c) (4,167) – – – - investment properties 5(d) (4,903) (6,582) – – - development properties for sale 11(d) (83,321) (74,179) – –
(92,391) (80,761) – –
448,183 453,922 183,895 144,796
NOTES TO ThE FINANCIAL STATEMENTS
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28 TAxATION
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Current tax expense - Based on current year’s results 261,661 150,982 – 4,616 - (Over)/Under provision in respect of prior years (51,310) (49,960) 424 4,520 - Group relief (1,745) (28,080) – –
208,606 72,942 424 9,136 Deferred tax expense - Origination and reversal of temporary differences 58,421 8,382 (8,484) (14,383) - (Over)/Under provision in respect of prior years (1,120) 5,138 – 6,007
57,301 13,520 (8,484) (8,376)
Total 265,907 86,462 (8,060) 760 Reconciliation of effective tax rate The group 2010 2009 $’000 $’000
Profit before taxation 1,936,014 1,095,096 Less: Share of results of associates and joint ventures (820,852) (269,195)
Profit before share of results of associates, joint ventures and taxation 1,115,162 825,901
Income tax using Singapore tax rate of 17% (2009: 17%) 189,578 140,403 Adjustments: Expenses not deductible for tax purposes 151,884 173,166 Income not subject to tax (148,242) (188,188) Effect of unrecognised tax losses and other deductible temporary differences 12,188 15,220 Effect of different tax rates in foreign jurisdictions 80,227 18,632 Over provision in respect of prior years (52,430) (44,822) Group relief (1,745) (28,080) Withholding taxes 18,859 25,247 Others 15,588 (25,116)
265,907 86,462 The Company 2010 2009 $’000 $’000
Profit before taxation 343,910 1,385,750
Income tax using Singapore tax rate of 17% (2009: 17%) 58,465 235,578 Adjustments: Expenses not deductible for tax purposes 6,185 33,861 Income not subject to tax (72,496) (275,950) Effect of other deductible temporary differences (460) (2,691) Under provision in respect of prior years 424 10,527 Others (178) (565)
(8,060) 760
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29 EARNINgS PER ShARE (a) Basic earnings per share
The group 2010 2009 $’000 $’000
Basic earnings per share is based on: Net profit attributable to owners of the Company 1,273,139 1,052,959
Number of shares
(’000)
Weighted average number of ordinary shares in issue during the year 4,258,925 4,017,136
(b) Diluted earnings per share In calculating diluted earnings per share, the net profit attributable to owners of the Company and
weighted average number of ordinary shares in issue during the year are adjusted for the effects of all dilutive potential ordinary shares:
The group 2010 2009 $’000 $’000
Net profit attributable to owners of the Company 1,273,139 1,052,959 Profit impact of conversion of the dilutive potential ordinary shares 77,354 35,702
Adjusted net profit attributable to owners of the Company 1,350,493 1,088,661
2010 2009 Number of shares (’000)
Weighted average number of ordinary shares used in the calculation of basic earnings per share 4,258,925 4,017,136 Weighted average number of unissued ordinary shares from: - options under CapitaLand Share Option Plan 9,738 5,460 - shares under CapitaLand Performance Share Plan 18,439 18,927 - shares under CapitaLand Restricted Stock Plan 14,285 15,063 - convertible bonds 324,508 152,384 Number of ordinary shares that would have been issued at fair value (6,547) (2,549)
360,423 189,285
Weighted average number of ordinary shares used in the calculation of diluted earnings per share 4,619,348 4,206,421
30 DIVIDENDS The Board of Directors of the Company has proposed a first and final dividend of 6.0 cents per share in
respect of the financial year ended 31 December 2010. This would amount to a payout of approximately $255.7 million based on the number of issued shares as at 31 December 2010. The dividends are subject to shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For the financial year ended 31 December 2009, a first and final dividend of 5.5 cents per share and a special dividend of 5.0 cents per share were approved at the Annual General Meeting held on 16 April 2010. The said dividends of $447.4 million were paid in May 2010.
NOTES TO ThE FINANCIAL STATEMENTS
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31 NOTES TO ThE CONSOLIDATED STATEMENT OF CASh FLOwS (a) Acquisition of subsidiaries The list of significant subsidiaries acquired during the year is as follows: Effective Name of Subsidiary Date Acquired Interest Acquired
CCH Developments Limited (formerly known as Orient Overseas Developments Limited ) February 2010 100% Growing State Holdings Limited March 2010 65.5% Hemliner Pte Ltd October 2010 100% The total costs (including the assumption of shareholder’s loan) for the above-mentioned acquisitions
in aggregate amounted to $3,473.4 million.
There was no acquisition of significant subsidiaries in 2009. The total acquisition cost for subsidiaries acquired, which individually was not significant, in aggregate amounted to $72.6 million.
(b) Effects of acquisitions The cash flows and net assets of subsidiaries acquired are provided below: Recognised Values 2010 2009 Note $’000 $’000
The group 2010 Property, plant and equipment 381,179 60,550 Investment properties 5 1,263,170 – Deferred tax assets 25,489 15 Other non-current assets 19,083 25,221 Development properties for sale 2,344,857 365,930 Cash and cash equivalents 438,478 12,535 Other current assets 20,539 155,178 Current liabilities (195,107) (398,040) Long-term bank borrowings (158,811) – Shareholder’s loan (1,466,912) – Deferred tax liabilities (603,421) – Non-controlling interests (60,116) (30,253)
2,008,428 191,136 Amounts previously accounted for as associates, joint ventures and other financial assets (5,370) (118,550)
Net assets acquired 2,003,058 72,586 Gain from bargain purchase (11,580) – Assumption of shareholder’s loan 1,466,912 – Deferred payment 15,043 –
Total purchase consideration 3,473,433 72,586 Less: Cash of subsidiaries acquired (438,478) (12,535)
Cash outflow on acquisition of subsidiaries 3,034,955 60,051
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31 NOTES TO ThE CONSOLIDATED STATEMENT OF CASh FLOwS (cont’d) (c) Disposals of subsidiaries (i) During the year, the Group disposed off the following significant subsidiaries for a total consideration
of $1,022.8 million:
Effective Name of Subsidiary Date Disposed Interest Diposed
The Ascott Group Europe NV* October 2010 100% Citadines Holborn CI Limited* October 2010 100% Senning Property Ltd December 2010 61.2%
* These subsidiaries were sold to Ascott Residence Trust in which the Group has an effective interest of 47.8% as at end-2010.
The disposed subsidiaries previously contributed net profit of $4.6 million from 1 January 2010 to the date of disposal.
(ii) In 2009, the Group disposed off the following significant subsidiary for a total consideration of $171.4 million:
Effective Name of Subsidiary Date Disposed Interest Diposed
Pagesus Pte. Ltd.* October 2009 100%
* This subsidiary was sold to Raffles City China Fund Ltd in which the Group has an effective interest of 44.8% as at end-2009.
The disposed subsidiary previously contributed a net profit of $132.6 million from 1 January 2009 to the date of disposal.
(d) Effects of disposals The cash flows and net assets of subsidiaries disposed are provided below:
The group 2010 2009 Note $’000 $’000
Property, plant and equipment 867,558 46,325 Investment properties 5 1,052,291 403,017 Deferred tax assets 12,077 – Other non-current assets 65,067 3,419 Development properties for sale 124,649 – Other current assets 78,458 13,730 Current liabilities (449,246) (239,695) Long-term bank borrowings (395,166) (16,785) Deferred tax liabilities (209,953) (43,137) Non-controlling interests (62,268) (3,508)
Net assets 1,083,467 163,366 Less: Equity interests retained as associates (321,027) –
Net assets disposed carried down 762,440 163,366
NOTES TO ThE FINANCIAL STATEMENTS
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31 NOTES TO ThE CONSOLIDATED STATEMENT OF CASh FLOwS (cont’d) (d) Effects of disposals (cont’d)
The group 2010 2009 $’000 $’000
Net assets disposed brought forward 762,440 163,366 Realisation of reserves 109,834 2,656 Deferred income 64,896 21,387 Gain on disposal of subsidiaries 210,156 23,036
Sale consideration 1,147,326 210,445 Repayment of shareholders’ loan 24,080 244,251 Deferred payment (424,210) (909) Deferred sale consideration received in relation to prior year’s disposal of subsidiaries 909 67,991 Cash of subsidiaries disposed (55,897) (12,727)
Cash inflow on disposal of subsidiaries 692,208 509,051
32 BUSINESS COMBINATIONS (a) Acquisition of Orient Overseas Developments Limited On 10 February 2010, the Group acquired 100% of voting equity interest of CCH Developments Limited
(“CCHDL”) (formerly known as Orient Overseas Developments Limited). CCHDL is a property investment holding company and through its subsidiaries, conducts property development and investment with a primary focus on opportunities in the Greater Shanghai area and Tianjin, China. Its projects include residential, commercial, retail and hotel properties.
The acquisition allowed the Group to further strengthen its presence in China.
CCHDL contributed revenue of $129.5 million and net profit of $127.3 million to the Group’s results for the period from 10 February 2010 to 31 December 2010.
If the acquisition had occurred on 1 January 2010, management estimates that the contribution from CCHDL in terms of revenue and profit for the year ended 31 December 2010 would have been $130.2 million and $125.0 million respectively. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2010.
Details of the consideration paid, the assets acquired and liabilities assumed, the non-controlling interest recognised and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(i) Purchase consideration The consideration transferred for the acquisition was $3,110.9 million, which included the
assignment of and transfer of a shareholder’s loan due from CCHDL to its previous shareholder. It was settled in cash.
No contingent consideration or indemnification asset was recognised at the acquisition date. Both the Group and the acquired entities do not have a relationship before this acquisition. Therefore, there was no settlement of pre-existing relationship.
No goodwill was recognised as the fair value of the identifiable net assets of the acquired group was equivalent in amount to the purchase consideration transferred.
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32 BUSINESS COMBINATIONS (cont’d) (a) Acquisition of Orient Overseas Developments Limited (cont’d) (ii) Effects of cash flows of the Group 2010 $’000
Cash consideration paid 1,643,986 Assumption of shareholder’s loan 1,466,912
Total purchase consideration 3,110,898 Less: Cash and cash equivalents in subsidiaries acquired (356,242)
Net cash outflow on acquisition 2,754,656
(iii) Identifiable assets acquired and liabilities assumed
2010 $’000
Property, plant and equipment 88,974 Investment properties under development 1,098,791 Deferred tax assets 25,490 Other non-current assets 13,863 Development properties for sale 2,344,857 Other current assets 11,935 Cash 356,242 Current liabilities (49,787) Interest bearing loans (123,829) Shareholder’s loan (1,466,912) Deferred tax liabilities (600,429)
Total identifiable net assets 1,699,195 Add: Assumption of shareholder’s loan 1,466,912 Less: Non–controlling interest at proportionate share of the recognised amount of the identified net assets, at acquisition date (55,209)
Total purchase consideration 3,110,898
(iv) Acquisition-related costs Acquisition-related costs of $4.2 million related to stamp duties, legal and due diligence fees were
included in administrative expenses in the consolidated income statement, and in the operating cash flows in the consolidated statement of cash flows.
(v) Acquired receivables Loan and other receivables mainly comprised other receivables. The carrying amount and gross
contractual amount of other receivables was $11.6 million. The carrying amount of other receivables approximated its fair value as the contractual maturity period was within twelve months from the acquisition date. None of the amounts was expected to be uncollectible.
(b) Acquisition of Storhub On 31 July 2010, a wholly-owned subsidiary, CapitaLand Commercial Limited (“CCL”), together with
Hersing Corporation Ltd, formed a group of companies to acquire four Storhub properties to provide self storage facilities. CCL has a 62% interest while Hersing has a 38% interest in these companies.
Four properties, together with the management business and management assets were acquired for $63.4 million.
NOTES TO ThE FINANCIAL STATEMENTS
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32 BUSINESS COMBINATIONS (cont’d) (b) Acquisition of Storhub (cont’d) Acquisition-related costs of $0.9 million relating to external legal fees and due diligence cost were
included in administrative expenses in the consolidated income statement, and in operating cash flows in the consolidated statement of cash flows.
From the date of acquisition to 31 December 2010, the Storhub group of companies contributed revenue of $4.2 million and net profit after tax of $1.6 million to the Group.
(c) Acquisition of non-controlling interests in Eurimeg SA On 3 August 2010, Oriville SAS, an indirect wholly-owned subsidiary, acquired an additional 39.24%
interest in Eurimeg SA for $24.8 million, increasing its ownership from 60.76% to 100%.
The carrying amount of Eurimeg SA’s net assets in the Group’s financial statements on the date of acquisition was $59.1 million.
From the date of the acquisition to 31 December 2010, the revenue and net profit after tax contributed by the additional interest acquired were not significant.
33 FINANCIAL RISK MANAgEMENT (a) Financial risk management objectives and policies The Group and the Company are exposed to market risk (including interest rate, foreign currency and
price risks), credit risk and liquidity risk arising from its diversified business. The Group’s risk management approach seeks to minimise the potential material adverse effects from these exposures. The Group uses financial instruments such as currency forwards, interest rate swaps and caps as well as foreign currency borrowings to hedge certain financial risk exposures.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Board has established the Risk Committee to strengthen its risk management processes and framework. The Risk Committee is assisted by an independent unit called the Risk Assessment Group (“RAG”). RAG generates a comprehensive portfolio risk report to assist the committee. This quarterly report measures a spectrum of risks, including property market risks, construction risks, interest rate risks, refinancing risks and currency risks.
(b) Market risk Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and
equity prices will have on the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
(i) Interest rate risk The Group’s exposure to market risk for changes in interest rate environment relates mainly to its
investment in financial products and debt obligations.
The investments in financial products are short term in nature and they are not held for trading or speculative purposes. The financial products comprise fixed deposits or short term commercial papers which yield better returns than cash at bank.
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33 FINANCIAL RISK MANAgEMENT (cont’d) (b) Market risk (cont’d) (i) Interest rate risk (cont’d) The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating
rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve certain level of protection against rate hikes. The Group also uses hedging instruments such as interest rate swaps and caps to minimise its exposure to interest rate volatility. The Group classifies these interest rate swaps and caps as cash flow hedges.
The fair value loss of swaps as at 31 December 2010 was $5.2 million (2009: fair value loss of $44.2 million).
Sensitivity analysis For interest rate swaps accounted for as cash flow hedges and other variable rate financial liabilities,
it is estimated that an increase of 100 basis point in interest rate at the reporting date would lead to a reduction in the Group’s profit before tax (and revenue reserves) by approximately $28.8 million (2009: $34.6 million). A decrease in 100 basis point in interest rate would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant, and has not taken into account the effects of qualifying borrowing costs allowed for capitalisation, the associated tax effects and share of non-controlling interests.
(ii) Foreign currency risk The Group operates internationally and is exposed to various currencies, mainly Australian Dollars,
Chinese Renminbi, Euros, Hong Kong Dollars, Japanese Yen, Sterling Pounds and US Dollars.
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which its property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.
The Group also uses forward exchange contracts to hedge its foreign currency risk, where feasible. It generally enters into forward exchange contracts with maturities ranging between 3 months and 5 years which are rolled over at market rates at maturity.
The net fair value gain of the above forward exchange contracts as at 31 December 2010 was $8.0 million (2009: net fair value loss of $21.4 million).
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.
In relation to its investments in foreign subsidiaries whose net assets are exposed to currency translation risks and which are held for long term investment purposes, the differences arising from such translation are recorded under the foreign currency translation reserve. These translation differences are reviewed and monitored on a regular basis.
NOTES TO ThE FINANCIAL STATEMENTS
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33 FINANCIAL RISK MANAgEMENT (cont’d) (b) Market risk (cont’d) (ii) Foreign currency risk (cont’d) The Group’s and the Company’s exposure to foreign currencies as at 31 December 2010 and
31 December 2009 are as follows:
Total US Australian Chinese hong Kong Japanese Malaysian Foreign Dollars Dollars Renminbi Dollars Yen Euro Ringgit Others* Currencies The group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 2010
Other financial assets 22,089 – – 27,093 148,578 30 – – 197,790
Trade and other receivables 606,316 298,860 173,391 15,412 70,518 30,725 42,935 65,592 1,303,749
Cash and cash equivalents 680,484 76,291 666,390 3,867 24,769 18,705 235,314 33,834 1,739,654
Borrowings (756,830) (2,452,043) (465,498) (230,707) (258,128) – (8,835) (126,233) (4,298,274)
Trade and other payables (251,429) (293,367) (549,682) (17,274) (17,030) (45,246) (17,694) (34,758) (1,226,480)
Gross currency exposure 300,630 (2,370,259) (175,399) (201,609) (31,293) 4,214 251,720 (61,565) (2,283,561)
Less: Net financial
liabilities/(assets)
denominated in the
respective entities’
functional currencies 216,184 2,374,620 137,431 229,622 218,907 (99) (31,941) 93,120 3,237,844
Foreign exchange
forward contracts (47,596) – – – (50,803) – – – (98,399)
Less: Available-for-sale
financial assets (4,371) – – (27,093) (148,578) – – – (180,042)
Net currency exposure 464,847 4,361 (37,968) 920 (11,767) 4,115 219,779 31,555 675,842
2009
Other financial assets 33,036 – – 3,114 152,982 93 – – 189,225
Trade and other receivables 278,346 273,476 226,566 46,028 12,270 30,360 7,324 68,653 943,023
Cash and cash equivalents 410,178 161,010 757,609 48,624 19,908 55,532 94,168 57,569 1,604,598
Borrowings and
finance leases (1,417,495) (1,800,288) (354,304) (346,137) (195,430) (425,745) (395,153) (81,620) (5,016,172)
Trade and other payables (150,357) (271,336) (588,206) (18,090) (18,537) (49,680) (48,232) (35,092) (1,179,530)
Gross currency exposure (846,292) (1,637,138) 41,665 (266,461) (28,807) (389,440) (341,893) 9,510 (3,458,856)
Less: Net financial
(assets)/liabilities
denominated in the
respective entities’
functional currencies (74,814) 2,079,071 (118,753) 232,303 248,017 394,980 496,082 24,208 3,281,094
Foreign exchange
forward contracts – (407,400) – – (63,872) – – (39,750) (511,022)
Less: Available-for-sale
financial assets (272) – – – (152,982) – – – (153,254)
Net currency exposure (921,378) 34,533 (77,088) (34,158) 2,356 5,540 154,189 (6,032) (842,038)
* Others include mainly Sterling Pound, Thai Baht, Indian Rupee and Vietnamese Dong.
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33 FINANCIAL RISK MANAgEMENT (cont’d) (b) Market risk (cont’d) (ii) Foreign currency risk (cont’d) Total US Foreign Dollars Others* Currencies The Company $’000 $’000 $’000
2010 Cash and cash equivalents 40 – 40 Trade and other receivables 36 – 36
Currency exposure 76 – 76 2009 Cash and cash equivalents 56 – 56 Trade and other payables (1,049,321) (39,910) (1,089,231)
Currency exposure (1,049,265) (39,910) (1,089,175) * Others include Hong Kong Dollars and Thai Baht.
Sensitivity analysis It is estimated that a five percentage point strengthening in foreign currencies against the Singapore
Dollar would increase the Group’s profit before tax (and revenue reserves) by approximately $33.8 million (2009: decrease by $42.1 million) and increase the Group’s other components of equity by approximately $9.0 million (2009: $7.7 million) respectively. A five percentage point weakening in foreign currencies against the Singapore Dollar would have an equal but opposite effect. The Group’s outstanding forward exchange contracts have been included in this calculation. The analysis assumed that all other variables, in particular interest rates, remain constant and does not take into account the translation related risk, associated tax effects and share of non-controlling interests.
It is estimated that a five percentage point strengthening in foreign currencies against the Singapore Dollar would not have any material impact on the profit before tax or revenue reserves of the Company in 2010 (2009: decrease in Company’s profit before tax and revenue reserves by approximately $54.5 million). The analysis assumed that all other variables, in particular interest rates, remain constant.
(iii) Equity price risk The Group has available-for-sale investments in equity securities and is exposed to price risk. These
securities are listed in Japan.
Sensitivity analysis If prices for equity securities listed in Japan change by 5% with all other variables including tax rate
being held constant, the impact on profit after tax and available-for-sale reserve will be as follows:
2010 2009 5% increase 5% decrease 5% increase 5% decrease The group $’000 $’000 $’000 $’000
Available-for-sale reserve 1,737 (1,737) 2,208 (2,208)
NOTES TO ThE FINANCIAL STATEMENTS
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33 FINANCIAL RISK MANAgEMENT (cont’d) (c) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. For trade receivables, the Group has guidelines governing the process of granting credit as a service or product provider in its respective segments of business. Trade and other receivables relate mainly to the Group’s customers who bought its residential units and tenants from its commercial buildings, shopping malls and serviced residences. Investments and financial transactions are restricted to counterparties that meet the appropriate credit criteria and are of high credit standing.
The principal risk to which the Group and the Company is exposed in respect of financial guarantee
contracts is credit risk in connection with the guarantee contracts it has issued. To mitigate the risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of. Guarantees are only given for its subsidiaries and related parties. The maximum exposure to credit risk in respect of these financial guarantees at the balance sheet date is disclosed in note 35.
The Group has a diversified portfolio of businesses and as at balance sheet date, there were no significant concentration of credit risk with any entity. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet, including derivative financial instruments as well as any irrevocable loan undertaking to associates and joint ventures.
(d) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient level of cash or cash convertible investments to meet its working capital requirement. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group will constantly raise committed funding from both capital markets and financial institutions and prudently balance its portfolio with some short term funding so as to achieve overall cost effectiveness.
The following are the expected contractual undiscounted cash flows of financial liabilities, including
interest payments and excluding the impact of netting agreements: Contractual cash flows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The group $’000 $’000 $’000 $’000 $’000
2010 Financial liabilities, at amortised cost Bank borrowings 4,650,665 5,301,788 1,040,837 3,906,332 354,619 Debt securities 5,707,378 7,236,635 1,043,486 999,658 5,193,491 Trade and other payables* 1,864,021 1,885,939 1,590,040 293,176 2,723
12,222,064 14,424,362 3,674,363 5,199,166 5,550,833 Derivative financial liabilities, at fair value 9,983 17,595 12,049 5,175 371
12,232,047 14,441,957 3,686,412 5,204,341 5,551,204
* Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefits and provisions.
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33 FINANCIAL RISK MANAgEMENT (cont’d) (d) Liquidity risk (cont’d) Contractual cash flows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The group $’000 $’000 $’000 $’000 $’000
2009 Financial liabilities, at amortised cost Bank borrowings 4,944,744 5,348,592 1,150,922 4,065,078 132,592 Debt securities 5,330,229 6,982,951 555,700 1,864,679 4,562,572 Finance leases 37,581 41,086 4,574 19,284 17,228 Trade and other payables* 1,895,405 1,925,871 1,538,956 377,589 9,326
12,207,959 14,298,500 3,250,152 6,326,630 4,721,718 Derivative financial liabilities, at fair value 64,030 90,817 58,746 30,730 1,341
12,271,989 14,389,317 3,308,898 6,357,360 4,723,059
Contractual cash flows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The Company $’000 $’000 $’000 $’000 $’000
2010 Financial liabilities, at amortised cost Debt securities 3,379,883 4,601,875 81,576 423,129 4,097,170 Trade and ther payables* 172,440 172,440 172,440 – –
3,552,323 4,774,315 254,016 423,129 4,097,170
2009 Financial liabilities, at amortised cost Debt securities 3,305,801 4,707,607 81,576 423,129 4,202,902 Trade and other payables* 1,209,912 1,212,390 1,212,390 – –
4,515,713 5,919,997 1,293,966 423,129 4,202,902
* Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefits
and provisions.
NOTES TO ThE FINANCIAL STATEMENTS
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33 FINANCIAL RISK MANAgEMENT (cont’d) (d) Liquidity risk (cont’d) The following table indicates the periods in which the cash flows associated with derivatives that are
cash flow hedges are expected to occur and affect the income statement:
Contractual cash flows
Carrying Not later Between After amount Total than 1 year 1 and 5 years 5 years The group $’000 $’000 $’000 $’000 $’000
2010 Interest rate swaps - liabilities (10,441) (19,031) (10,311) (7,846) (874) Forward start interest rate swaps - assets/(liabilities) 6,491 (484) (3,218) 2,231 503 Forward exchange contracts - assets 291 291 291 – –
(3,659) (19,224) (13,238) (5,615) (371)
2009 Interest rate swaps - liabilities (44,190) (72,430) (34,075) (35,543) (2,812) Forward start interest rate swaps - assets/(liabilities) 3,001 5,419 (865) 4,813 1,471
(41,189) (67,011) (34,940) (30,730) (1,341)
(e) Fair values The following methods and assumptions are used to estimate the fair values of the following significant
classes of financial instruments:
(i) Derivatives The fair value of derivatives financial instruments is based on their market prices or brokers’ quotes.
(ii) Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of
future principal and interest cash flows, discounted using the market rate of interest at the reporting date. In respect of the liability component of convertible bonds, the fair value at initial recognition is determined using a market rate of interest of similar liabilities that do not have a conversion option.
(iii) Other financial assets and liabilities The fair value of quoted securities is their quoted bid price at the balance sheet date. The carrying
amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values.
Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market-related rate for a similar instrument at the balance sheet.
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33 FINANCIAL RISK MANAgEMENT (cont’d) (e) Fair values (cont’d) (iv) Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method as at
31 December 2010. The different levels have been defined as follows:
Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 : Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total The group $’000 $’000 $’000 $’000
2010 Available-for-sale financial assets 34,741 195,000 141,144 370,885 Derivative financial assets – 12,823 – 12,823
34,741 207,823 141,144 383,708 Derivative financial liabilities – (9,983) – (9,983)
34,741 197,840 141,144 373,725
2009 Available-for-sale financial assets 44,167 195,000 112,201 351,368 Derivative financial assets – 2,006 – 2,006
44,167 197,006 112,201 353,374 Derivative financial liabilities – (64,030) – (64,030)
44,167 132,976 112,201 289,344
The group 2010 2009 $’000 $’000
The movements of financial assets classified under Level 3 are presented as follows: Balance as at 1 January 112,201 334,249 Translation differences – 174 Additions 12,471 9,399 Capital distribution – (201) Impairments recognised in income statement (5,752) (48,858) Fair value gain/(losses) recognised in available-for-sale reserve 22,224 (812) Exchanged for shares in a subsidiary – (181,750)
Balance as at 31 December 141,144 112,201
NOTES TO ThE FINANCIAL STATEMENTS
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33 FINANCIAL RISK MANAgEMENT (cont’d) (e) Fair values (cont’d) (v) Accounting classifications and fair values The fair values of financial assets and liabilities, together with the carrying amounts shown in the
balance sheets, are as follows:
Fair value – Other Total hedging Loans and Available- financial carrying instruments receivables for-sale liabilities amount Fair value The group Note $’000 $’000 $’000 $’000 $’000 $’000
2010 Trade and other receivables 12 – 2,033,965 – – 2,033,965 2,033,965 Cash and cash equivalents 15 – 7,190,064 – – 7,190,064 7,190,064 Other non-current financial assets 9(a) 4,814 100,897 202,494 – 308,205 308,205 Other current financial assets 9(b) 8,009 – 195,000 – 203,009 203,009
12,823 9,324,926 397,494 – 9,735,243 9,735,243 Trade and other payables# – – – 1,864,021 1,864,021 1,864,021 Bank borrowings 18 – – – 4,650,665 4,650,665 4,650,665 Debt securities 19 – – – 5,707,378 5,707,378 6,006,225 Derivative financial liabilities 9,983 – – – 9,983 9,983
9,983 – – 12,222,064 12,232,047 12,530,894
2009 Trade and other receivables 12 – 1,255,361 – – 1,255,361 1,255,361 Cash and cash equivalents 15 – 8,729,718 – – 8,729,718 8,729,718 Other non-current financial assets 9(a) 569 39,634 193,156 – 233,359 233,359 Other current financial assets 9(b) 1,437 – 195,000 – 196,437 196,437
2,006 10,024,713 388,156 – 10,414,875 10,414,875
Trade and other payables# – – – 1,895,405 1,895,405 1,895,405 Bank borrowings 18 – – – 4,944,744 4,944,744 4,944,744 Debt securities 19 – – – 5,330,229 5,330,229 5,590,464 Finance leases 20 – – – 37,581 37,581 37,581 Derivative financial liabilities 64,030 – – – 64,030 64,030
64,030 – – 12,207,959 12,271,989 12,532,224
Other Total Loans and financial carrying receivables liabilities amount Fair value The Company Note $’000 $’000 $’000 $’000
2010 Trade and other receivables 12 1,163,355 – 1,163,355 1,163,355 Cash and cash equivalents 15 53,954 – 53,954 53,954
1,217,309 – 1,217,309 1,217,309
Trade and other payables# – 172,440 172,440 172,440 Debt securities 19 – 3,379,883 3,379,883 3,674,251
– 3,552,323 3,552,323 3,846,691
# Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefits and provisions.
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33 FINANCIAL RISK MANAgEMENT (cont’d) (e) Fair values (cont’d) (v) Accounting classifications and fair values (cont’d) Other Total Loans and financial carrying receivables liabilities amount Fair value The Company Note $’000 $’000 $’000 $’000
2009 Trade and other receivables 12 87,590 – 87,590 87,590 Cash and cash equivalents 15 2,356,466 – 2,356,466 2,356,466
2,444,056 – 2,444,056 2,444,056
Trade and other payables# – 1,209,912 1,209,912 1,209,912 Debt securities 19 – 3,305,801 3,305,801 3,560,279
– 4,515,713 4,515,713 4,770,191
# Excludes quasi-equity loans, excess of progress billings over work-in-progress, liability for employee benefits
and provisions.
34 COMMITMENTS As at the balance sheet date, the Group and the Company had the following commitments: (a) Operating lease The Group leases a number of offices under operating leases. The leases typically have tenure of three
years, with an option to renew the lease after that date. Lease payments are usually revised at each renewal date to reflect the market rate. Future minimum lease payments for the Group and the Company on non-cancellable operating leases are as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Lease payments payable: Not later than 1 year 108,090 79,079 4,850 4,616 Between 1 and 5 years 303,705 158,920 2,967 7,135 After 5 years 148,819 50,665 133 133
560,614 288,664 7,950 11,884
The Group leases out its investment properties. Non-cancellable operating lease rentals are receivable as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Lease rentals receivable: Not later than 1 year 240,059 332,206 – – Between 1 and 5 years 719,737 793,039 – – After 5 years 448,855 454,169 – –
1,408,651 1,579,414 – –
NOTES TO ThE FINANCIAL STATEMENTS
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34 COMMITMENTS (cont’d) (b) Commitments
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Commitments in respect of: - capital expenditure contracted but not provided for in the financial statements 3,385 2,487 193 1,591 - development expenditure contracted but not provided for in the financial statements 1,156,995 1,136,801 – – - capital contribution/acquisition of associates, joint ventures and investee companies 1,070,242 1,591,752 – – - purchase of lands/properties contracted but not provided for in the financial statements 1,505,318 358,570 – – - shareholders’ loan committed to associates, joint ventures and investee companies 8,360 8,360 – –
3,744,300 3,097,970 193 1,591
(c) As at the balance sheet date, the notional principal values of financial instruments are as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Interest rate caps – 39,768 – – Interest rate swaps 2,405,031 1,934,657 – – Forward start interest rate swaps 863,158 729,269 – – Forward foreign exchange contracts 394,976 852,309 – –
3,663,165 3,556,003 – –
(d) The maturity dates of these financial instruments are: The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Not later than 1 year 1,344,967 1,441,224 – – Between 1 and 5 years 1,683,523 1,664,347 – – After 5 years 634,675 450,432 – –
3,663,165 3,556,003 – –
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35 FINANCIAL gUARANTEE CONTRACTS There are no terms and conditions attached to the financial guarantee contracts that would have a material
effect on the amount, timing and uncertainty of the Group’s and the Company’s future cash flows. The Group and the Company issue guarantees only for their subsidiaries and related parties.
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
(a) Guarantees given to banks to secure banking facilities provided to: - subsidiaries – – 2,935,350 2,999,983 - associates 143,024 125,199 – – - joint ventures 15,043 19,486 105 4,367 - investee company – 27,183 – –
158,067 171,868 2,935,455 3,004,350 (b) Undertakings by the Group and the Company: (i) The Company has provided several undertakings on cost overrun, interest shortfall, completion and
annualised gross rental, on a joint or several basis, in respect of term loan and revolving credit facilities amounting to $1,490.9 million, granted to a joint venture. As at 31 December 2010, the amount outstanding under the facilities was $1,060.1 million (2009: $1,478.3 million).
(ii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of term loan and revolving construction facilities amounting to $476.5 million (2009: $605.2 million) and bankers’ guarantee facility amounting to $54.8 million (2009: $54.8 million) granted to its subsidiary. As at 31 December 2010, the amount outstanding under the term loan facility was $376.5 million (2009: $376.5 million).
(iii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of term loan and revolving construction facilities amounting to $1,486.1 million (2009: $1,370.0 million) and bankers’ guarantee facility amounting to $133.9 million (2009: $133.9 million) granted to an associate. As at 31 December 2010, the total amount outstanding under the term loan and revolving construction facilities was $1,241.1 million (2009: $870.1 million).
(iv) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of term loan and revolving construction facilities amounting to $214.1 million (2009: $264.1 million) and bankers’ guarantee facility amounting to $42.0 million (2009: $42.0 million) granted to a joint venture. As at 31 December 2010, the amount outstanding under the term loan facility was $176.1 million (2009: $226.1 million).
(v) A subsidiary of the Group has provided undertakings on cost overrun, security margin, interest shortfall and project completion in respect of a term loan facility amounting to US$40 million (or its equivalent in VND) granted to a subsidiary. As at 31 December 2010, the amount outstanding under the term loan facility was US$4.9 million and VND 239.96 billion.
(vi) A subsidiary of the Group has provided several undertakings on security margin and interest shortfall in respect of a $36.0 million (2009: Nil) term loan facility granted to its subsidiaries. As at 31 December 2010, the amount outstanding under the term loan facility was $36.0 million (2009: Nil).
NOTES TO ThE FINANCIAL STATEMENTS
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35 FINANCIAL gUARANTEE CONTRACTS (cont’d) (b) Undertakings by the Group and the Company (cont’d): (vii) Certain of the Group’s subsidiaries in China, whose principal activities are the trading of development
properties, would in the ordinary course of business act as guarantors for the bank loans taken by the buyers to finance the purchase of residential properties developed by these subsidiaries. As at 31 December 2010, the outstanding notional amount of the guarantees amounted to $61.2 million (2009: $55.2 million).
36 CONTINgENCIES CapitaLand Limited has an effective 20% interest in the proposed Macao Studio City (“MSC”) project
through its minority holding in East Asia Satellite Television (Holdings) Limited (“East”), a joint venture company with eSun Holdings Limited (“eSun”). The MSC project is held by East and New Cotai LLC (“New Cotai”) in the proportions of 60% and 40% respectively, through Cyber One Agents Limited (“Cyber One”).
On 14 October 2010, New Cotai Entertainment LLC (“NCE”), an affiliate company of New Cotai, issued a writ in the High Court of Hong Kong, Special Administrative Region against, amongst others, CapitaLand Limited and CapitaLand Integrated Resorts Pte Ltd (“CIR”). CIR is a shareholder of East. The writ was served on CapitaLand and CIR on 4 November 2010.
The writ alleged that East Asia Televisao por Satelite, Limitada (“MacauCo”) has breached its contract with NCE in relation to a lease of premises in the MSC for NCE’s casino operations (“Casino Lease”). MacauCo is the Macau-incorporated subsidiary of Cyber One which directly owns the MSC project. NCE has sued CapitaLand and CIR for inducement and/or procurement of breach of contract by MacauCo and conspiracy with eSun and others to use unlawful means with the intention of injuring NCE by doing whatever was necessary to ensure that MacauCo did not sign the definitive agreement in relation to the Casino Lease. NCE is claiming specific performance from MacauCo of the execution of the definitive agreement for the Casino Lease as well as damages from the parties named as defendants in the writ (namely, CapitaLand, CIR, eSun, East and MacauCo) in addition to, or instead of, such specific performance. The amount of the damages sought was not specified in the writ.
The Group and the Company understand that East has complied with all material obligations relevant to the joint venture. CapitaLand’s minority indirect stake gives it limited influence over the implementation of the MSC project. The Group and the Company believe that the allegations in the writ are without merit and accordingly, no amount is provided in respect of this matter.
37 SIgNIFICANT RELATED PARTY TRANSACTIONS For the purposes of these financial statements, parties are considered to be related to the Group if the Group
has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
The Group considers the directors of the Company, and the Council of CEOs comprising the President & CEO, key management officers of the corporate office and CEOs of the strategic business units, to be key management personnel in accordance with FRS 24 Related Party Disclosures.
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37 SIgNIFICANT RELATED PARTY TRANSACTIONS (cont’d) In addition to the related party information disclosed elsewhere in the financial statements, there were
significant related party transactions which were carried out in the normal course of business on terms agreed between the parties during the financial year as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000 Subsidiaries Management fee income – – 66,061 47,920 Rental income – – – 70 IT and administrative support services – – 1,525 1,317 Rental expense – – – (352) Others – – (710) (240) Associates and Joint Ventures Management fee income 280,953 302,407 – – Rental expense (10,345) (12,278) (4,005) (2,869) Proceeds from sale of properties and investments* 1,972,267 415,731 – – Construction and project management income 36,470 22,676 – – Accounting service fee, acquisition fee, divestment fee, marketing income and others 60,503 35,446 (268) (346)
* The Group has deferred a portion of the profit from the sale of these properties and investments based on its retained investments in the associates.
Key Management Personnel Subscription of shares in the Company pursuant to its rights issue – 2,537 – 1,929 Subscription of shares in a subsidiary and an associate pursuant to their initial public offering – 3,757 – 2,542 Subscription of shares in associates pursuant to their rights issues – 2,301 – – Subscription of shares in an associate pursuant to its preferential offering 178 – 171 – Subscription of bonds/notes issued by the Company and its indirect subsidiary – 3,250 – 2,250 Interest paid/payable by the Company, its indirect subsidiary and associates 339 244 283 172 Professional fees paid/payable to a director and a firm in which a director is a member 80 175 3 85 Sale of residential properties by the subsidiaries 18,151 – 16,954 – Rental income received/receivable from a corporation in which a director has an interest 396 779 396 779
Remuneration of Key Management Personnel Salary, bonus and other benefits 23,806 25,229 11,974 10,832 Employer’s contributions to defined contribution plans 106 95 27 28 Equity compensation benefits 8,946 9,076 4,974 3,251
32,858 34,400 16,975 14,111
NOTES TO ThE FINANCIAL STATEMENTS
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38 SUBSIDIARIES (a) The significant subsidiaries directly held by the Company which are incorporated and conducting
business in the Republic of Singapore are as set out below:
Percentage held by the Company 2010 2009 Name of Company % %
CapitaLand Asia Pte Ltd 100 100
CapitaLand Commercial Limited 100 100
CapitaLand Financial Limited 100 100
CapitaLand GCC Holdings Pte Ltd 100 100
CapitaLand ILEC Pte Ltd 100 100
CapitaLand Residential Limited 100 100
CapitaLand Treasury Limited 100 100
CapitaMalls Asia Limited 65.5 65.5
CapitaValue Homes Limited (formerly known as CapitaLand Industrial & Logistics Holdings Limited) 100 100 Somerset Capital Pte Ltd – # 100 The Ascott Limited 100 100
# Transferred to The Ascott Limited during the year. See note 38(b)(v). (b) Other significant subsidiaries in the Group are as follows: Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(i) Directly or indirectly held by CapitaLand Residential Limited:
Ausprop Holdings Limited Singapore 100 100
Australand Australia 59.3 59.3
Austvale Holdings Ltd Singapore 100 100
CapitaLand China Holdings Pte Ltd Singapore 100 100
CapitaLand Residential Singapore Pte Ltd Singapore 100 100
CRL Realty Pte Ltd Singapore 100 100
Leonie Court Pte Ltd Singapore 100 100
Phoenix Realty Pte Ltd Singapore 100 100
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38 SUBSIDIARIES (cont’d)
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(ii) Directly or indirectly held by CapitaLand China holdings Pte Ltd: 1 Beijing Xin Xu Real Estate Dev Co., Ltd The People’s 100 100 Republic of China CapitaLand China Income Fund Singapore 100 100 1 CapitaLand (China) Investment Co., Ltd The People’s 100 100 Republic of China 4 CapitaLand China (RE) Holdings Co., Ltd Cayman Islands 100 – CapitaLand Integrated Resort Pte Ltd Singapore 100# – CapitaLand (Sichuan) Holdings Pte Ltd Singapore 100 100 1 Dongjin Real Estate The People’s Development (Tian Jin) Co., Ltd Republic of China 100 – 1 Kunshan Kunan Property Co., Ltd. The People’s 70.0 – Republic of China 1 Longtex Investment Limited Hong Kong 100 – 3 Shenzhen Municipal Golden Dragon The People’s 50.2 50.2 Property Development Ltd Republic of China 1 Shanghai Orient Overseas Yongye The People’s 99.0 – Real Estate Co., Ltd. Republic of China 1 Xin Yue Property (Shanghai) Co., Ltd The People’s 80.0 – Republic of China # Transferred from CapitaLand ILEC Pte Ltd during the year. See note 38(b)(viii). (iii) Directly or indirectly held by CapitaLand Commercial Limited: Adelphi Property Pte Ltd Singapore 100 100 CapitaLand (Office) Investments Pte Ltd Singapore 100 100 1 Capitaland – Vista Joint Venture Co., Ltd Vietnam 80.0 80.0 CapitaLand (Vietnam) Holdings Pte Ltd Singapore 100 100 E-Pavilion Pte Ltd Singapore 100 100 SBR Private Limited Singapore 100 100 Wan Tien Realty (Pte) Ltd Singapore 100 100
NOTES TO ThE FINANCIAL STATEMENTS
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38 SUBSIDIARIES (cont’d)
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(iv) Directly or indirectly held by CapitaMalls Asia Limited: CapitaLand Retail China Pte Ltd Singapore 65.5 65.5 CapitaLand Retail (MY) Pte Ltd Singapore 65.5 65.5 CapitaLand Retail Singapore Investments Pte Ltd Singapore 65.5 65.5 CapitaMall Trust Management Limited Singapore 65.5 65.5 CapitaRetail China Investments Pte Ltd Singapore 65.5 65.5 Pyramex Investments Pte Ltd Singapore 65.5 65.5 (v) Directly or indirectly held by The Ascott Limited: 1 Ascott Group (Jersey) Limited Jersey, 100 100 United Kingdom Ascott International Management (2001) Pte Ltd Singapore 100 100 1 Ascott Property Management (Beijing) Co., Ltd The People’s 100 100 Republic of China Ascott Residence Trust Management Limited Singapore 100 100 Ascott Serviced Residence (China) Fund Mgt Pte Ltd Singapore 100 100 1 Citadines Melbourne on Bourke Pty Ltd Australia 100 100 1 Hemliner Real Estate (Beijing) Co., Ltd The People’s 100 – Republic of China
The Ascott Capital Pte Ltd Singapore 100 100 The Ascott (Europe) Pte Ltd Singapore 100 100 Somerset Capital Pte Ltd Singapore 100# –
# Transferred from CapitaLand Limited during the year. See note 38(a).
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38 SUBSIDIARIES (cont’d)
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(vi) Directly or indirectly held by CapitaLand Financial Limited: CapitaLand China Development Fund Management Private Limited Singapore 100 100 CapitaCommercial Trust Management Limited Singapore 100 100 CapitaLand Financial Investments Ltd Singapore 100 100 CapitaLand Fund Investment Pte Ltd Singapore 100 100 CapitaLand Nippon Investments Pte Ltd Singapore 100 100 CapitaLand RECM Pte Ltd Singapore 100 100 RCCF Management Pte Ltd Singapore 100 100 (vii) Directly or indirectly held by Australand: 2 Australand Finance Limited Australia 59.3 59.3 2 Australand Funds Management Limited Australia 59.3 59.3 2 Australand HK Company Limited Hong Kong 59.3 59.3 2 Australand Investments Limited Australia 59.3 59.3 2 Australand Property Group Pty Limited (formerly known as Rylehall Pty Limited) Australia 59.3 59.3 2 Australand Property Trust Australia 59.3 59.3 2 Australand Property Trust No. 4 Australia 59.3 59.3 2 Australand Property Trust No. 5 Australia 59.3 59.3 2 Australand Property Limited Australia 59.3 59.3 2 Australand Wholesale Holdings Limited Australia 59.3 59.3 2 Australand Wholesale Investments No. 5 Limited Australia 59.3 59.3 2 Australand Wholesale Investments (Custodian) Limited Australia 59.3 59.3 2 Freshwater Residential Unit Trust Australia 59.3 59.3 2 Port Catherine Developments Pty Ltd Australia 59.3 59.3
NOTES TO ThE FINANCIAL STATEMENTS
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38 SUBSIDIARIES (cont’d)
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(viii) Directly held by CapitaLand ILEC Pte Ltd: CapitaLand Integrated Resort Pte Ltd Singapore – # 100 Kestrel Pte Ltd Singapore 100 100 # Transferred to CapitaLand China Holdings Pte Ltd during the year. See note 38(b)(ii).
(ix) Directly or indirectly held by CapitaLand gCC holdings Pte Ltd: 1 CapitaLand Bahrain Bay Business Services WLL Bahrain 100 100 CapitaLand GCC (Bahrain) Pte Ltd Singapore 100 100 Notes:
All significant subsidiaries are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by PricewaterhouseCoopers and its associated firms.
3 Audited by Shenzhen Yida Certified Public Accountants.
4 Not required to be audited by law in the country of incorporation.
39 ASSOCIATES Details of significant associates are as follows:
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(i) held by The Ascott Limited: Ascott Residence Trust Singapore 47.8 47.5
(ii) Indirectly held by CapitaLand China holdings Pte Ltd: CapitaLand China Development Fund Pte Ltd Singapore 37.5 37.5 1 Central China Real Estate Ltd Cayman Islands 27.1 27.1 2 East Asia Satellite Television (Holdings) Limited British Virgin Islands 33.3@ – 2 Lai Fung Holdings Limited Cayman Islands 20.0 20.0
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39 ASSOCIATES (cont’d)
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
Raffles City China Fund Ltd Cayman Islands 45.2* 44.8*
Senning Property Ltd British Virgin Islands 38.8# –
@ Transferred from CapitaLand ILEC Pte Ltd during the year. See note 39(vi).
* Includes 9.8% interest indirectly held through CapitaMalls Asia Limited.
# Includes 11.8% interest indirectly held through CapitaMalls Asia Limited.
(iii) Indirectly held by CapitaLand Commercial Limited: CapitaCommercial Trust Singapore 31.8# 31.6#
3 DBS China Square Limited Singapore 30.0 30.0
# Includes 2.6% and 2.3% interests indirectly held through CapitaLand Financial Limited as at end-2010 and end-2009
respectively.
(iv) Indirectly held by CapitaMalls Asia Limited: CapitaMall Trust * Singapore 19.6 19.6 1 CapitaMalls Malaysia Trust Malaysia 27.3 – CapitaRetail Japan Fund Private Limited * Singapore 17.2 17.2 CapitaRetail China Trust * Singapore 17.9 17.7 CapitaRetail China Development Fund Singapore 29.5 29.5 CapitaRetail China Development Fund II Singapore 29.5 29.5 CapitaRetail China Incubator Fund * Singapore 19.7 19.7 CapitaRetail India Development Fund Singapore 29.8 29.8 * Considered to be an associate as the Group has significant influence over the financial and operating policy decisions
of the investee through its subsidiary CapitaMalls Asia Limited.
(v) Indirectly held by CapitaLand Financial Limited: 1 CapitaLand AIF Ltd Cayman Islands 44.4 44.4 (vi) Indirectly held by CapitaLand ILEC Pte Ltd: 2 East Asia Satellite Television (Holdings) Limited British Virgin Islands – † 33.3 † Transferred to CapitaLand China Holdings Pte Ltd during the year. See note 39(ii).
NOTES TO ThE FINANCIAL STATEMENTS
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39 ASSOCIATES (cont’d)
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(vii) Indirectly held by CapitaLand gCC holdings Pte Ltd: 1 Raffles City Bahrain Fund Ltd Cayman Islands 40.9 37.7 Notes:
All significant associates are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by Ernst & Young and its associated firms.
3 Audited by PricewaterhouseCoopers and its associated firms.
40 JOINT VENTURES Details of significant joint ventures are as follows:
Effective Interest held by the group Place of 2010 2009 Name of Company Incorporation % %
(i) Directly held by CapitaLand Asia Pte Ltd: 1 T.C.C. Capital Land Limited Thailand 40.0 40.0 (ii) Directly held by CapitaLand Financial Limited: 2 I.P. Real Estate Asset Management (Asia) Limited Singapore 50.0 50.0 (iii) Indirectly held by CapitaMalls Asia Limited: Orchard Turn Holding Pte Ltd Singapore 32.8 32.8 (iv) Indirectly held by CapitaLand gCC holdings Pte Ltd: 1 Mubadala CapitaLand Real Estate LLC United Arab Emirates 49.0 49.0 Notes:
All significant joint ventures are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by Ernst & Young and its associated firms.
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41 OPERATINg SEgMENTS Management determines the operating segments based on the reports reviewed and used by the Council
of CEOs for strategic decisions making and resources allocation. For management purposes, the Group is organised into strategic business units based on their products, services and geography.
The Group’s reportable operating segments are as follows: (i) CapitaLand Residential Singapore – develops residential properties in Singapore for sale and covers a
wide spectrum of the residential market in Singapore.
(ii) CapitaLand China Holdings – involves in the residential, commercial and integrated property development sectors in China.
(iii) CapitaLand Commercial – owner/manager of commercial and industrial properties in Singapore, Malaysia
and United Kingdom. It also develops residential projects in Vietnam, Malaysia, India and Thailand.
(iv) Ascott – an international serviced residence owner-operator with operations in key cities of Asia Pacific, Europe and the Gulf region. It operates three brands, namely Ascott, Somerset and Citadines.
(v) CapitaLand Financial – involves in real estate fund management and financial advisory services.
(vi) CapitaMalls Asia – shopping mall owner/manager with portfolio in Singapore, China, India, Japan and Malaysia.
(vii) Australand – a major diversified property group with activities in residential, commercial and industrial developments and investment properties across Australia.
(viii) Others – includes Corporate Office, Group Treasury and the Group’s new businesses.
Information regarding the operations of each reportable segment is included below. Management monitors the operating results of each of its business unit for the purpose of making decisions on resource allocation and performance assessment. Performance is measured based on segment earnings before interest and tax (“EBIT”). EBIT is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments. Segment assets and liabilities are presented net of inter segment balances. Inter-segment pricing is determined on arm’s length basis.
Geographically, management reviews the performance of the businesses in Singapore, China, Other Asia, Australia and Europe. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Non-current assets and total assets are based on the geographical location of the assets.
NOTES TO ThE FINANCIAL STATEMENTS
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41 OPERATINg SEgMENTS (cont’d) Operating Segments – 31 December 2010
CapitaLand CapitaLand Residential China CapitaLand CapitaLand CapitaMalls Singapore holdings Commercial Ascott Financial Asia Australand Others Elimination group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue External revenue 843,203 569,808 332,344 400,589 114,333 242,506 879,796 163 – 3,382,742 Inter-segment revenue – 3,665 5,409 6,772 1,834 2,896 – 281,850 (302,426) –
Total Revenue 843,203 573,473 337,753 407,361 116,167 245,402 879,796 282,013 (302,426) 3,382,742 Segmental Results Company and subsidiaries 363,219 543,645 70,464 93,837 83,219 127,527 313,772 247,580 (279,918) 1,563,345 Associates (18,291) 129,601 167,097 79,899 12,053 101,275 4,156 3,278 20,289 499,357 Joint ventures 6,581 9,149 26,651 (726) 7,768 243,631 28,441 – – 321,495
Earnings Before Interest and Taxation 351,509 682,395 264,212 173,010 103,040 472,433 346,369 250,858 (259,629) 2,384,197 Finance costs (448,183) Taxation (265,907) Profit for the year 1,670,107 Segment Assets 2,096,710 7,035,688 2,744,914 3,315,287 271,398 6,944,427 4,675,853 11,315,621 (6,699,678) 31,700,220 Segment Liabilities 842,182 1,633,740 793,948 1,215,607 54,801 940,535 1,821,772 6,380,173 – 13,682,758 Other segment items: Interest income 17,691 9,749 5,780 7,563 13 26,037 4,199 11,995 – 83,027 Depreciation and amortisation (582) (6,876) (2,914) (30,248) (351) (7,207) (5,239) (6,208) – (59,625) Impairment losses for assets – (11) (31,276) (29,021) (1) (284) – (1,545) – (62,138) Fair value gains on investment properties – 266,420 17,013 16,837 – 37,375 56,878 62 – 394,585 Share-based expenses (1,124) (4,343) (6,551) (4,330) (1,739) (8,997) (2,273) (9,771) – (39,128) gains on disposal of investments – 184,061 150 70,906 12,970 12,333 – 24 – 280,444 Interests in associates 257,870 1,894,077 1,459,331 822,926 142,494 3,121,472 40,082 76,814 434,076 8,249,142 Interests in joint ventures 111,680 124,470 190,818 38,798 6,781 1,043,657 342,818 2,210 – 1,861,232 Capital expenditure* 756 16,684 66,214 94,168 61 95,178 182,189 5,277 – 460,527
* Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets.
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41 OPERATINg SEgMENTS (cont’d) Operating Segments – 31 December 2009
CapitaLand CapitaLand Residential China CapitaLand CapitaLand CapitaMalls Singapore holdings Commercial Ascott Financial Asia Australand Others Elimination group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue External revenue 673,782 641,970 133,367 388,368 158,136 223,000 732,490 6,246 – 2,957,359 Inter-segment revenue – 4,987 11,560 5,343 4,036 5,946 – 271,637 (303,509) –
Total Revenue 673,782 646,957 144,927 393,711 162,172 228,946 732,490 277,883 (303,509) 2,957,359 Segmental Results Company and subsidiaries 322,892 353,167 (246,916) 52,316 111,838 32,595 (168,126) 1,133,413 (311,356) 1,279,823 Associates (24,916) 188,892 (240,287) (19,629) (13,466) (50,658) (1,658) (45,395) 9,156 (197,961) Joint ventures 73,732 9,128 (10,158) (1,270) (400) 467,174 (71,050) – – 467,156
Earnings Before Interest and Taxation 371,708 551,187 (497,361) 31,417 97,972 449,111 (240,834) 1,088,018 (302,200) 1,549,018 Finance costs (453,922) Taxation (86,462)
Profit for the year 1,008,634 Segment Assets 2,316,567 3,520,170 2,580,886 3,755,397 222,068 6,482,363 4,373,107 13,880,855 (6,965,399) 30,166,014 Segment Liabilities 779,252 848,743 782,665 1,758,712 47,093 973,514 1,617,365 6,478,907 – 13,286,251 Other segment items: Interest income 17,181 10,133 5,897 2,311 (138) 23,517 5,903 11,746 – 76,550 Depreciation and amortisation (787) (2,197) (5,006) (37,906) (713) (6,563) (3,747) (6,111) – (63,030) Impairment losses for assets – (1,557) (176,179) (7,633) (5) (221) – (73,363) – (258,958) Fair value gains/(losses) on investment properties – 185,723 (77,569) 729 – (98,970) (235,845) – – (225,932) Share-based expenses (1,962) (3,028) (4,687) (3,541) (2,602) (5,245) (1,117) (6,545) – (28,727) gains on disposal of investments – 18,889 29,474 25,373 1 52,817 – 897,843 – 1,024,397 Interests in associates 240,059 1,320,496 1,357,786 538,872 140,307 2,997,218 38,831 178,577 200,028 7,012,174 Interests in joint ventures 114,467 219,424 167,570 40,046 (962) 794,830 334,488 2,193 – 1,672,056 Capital expenditure* 448 384,663 2,102 190,735 281 92,555 142,703 1,992 – 815,479
* Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets.
NOTES TO ThE FINANCIAL STATEMENTS
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41 OPERATINg SEgMENTS (cont’d) geographic Information
Singapore China* Other Asia# Australia Europe Others@ Total 2010 $’000 $’000 $’000 $’000 $’000 $’000 $’000
External Revenue 1,200,843 711,336 291,706 916,159 227,391 35,307 3,382,742 Non-current Assets^ 6,604,807 5,376,659 1,222,136 3,148,591 88 – 16,352,281 Total Assets 13,879,760 10,095,610 2,327,792 4,929,458 424,012 43,588 31,700,220
2009
External Revenue 978,996 773,914 163,291 755,689 248,189 37,280 2,957,359 Non-current Assets^ 6,488,552 3,814,030 1,720,267 2,975,908 1,033,554 – 16,032,311 Total Assets 15,772,857 6,197,750 2,363,928 4,568,785 1,209,408 53,286 30,166,014
* China includes Hong Kong and Macau. # Other Asia includes Indonesia, Japan, Malaysia, Philippines, Thailand, Korea, India, Vietnam and Gulf Cooperation Council
countries. @ Others includes the Cayman Islands. ^ Non-current assets comprised property, plant and equipment, intangible assets, investment properties and interests in
associates and joint ventures.
42 NEw ACCOUNTINg STANDARDS AND INTERPRETATIONS NOT YET ADOPTED The Group has not applied the following accounting standards (including their consequential amendments)
and interpretations that have been issued as of the balance sheet date but are not yet effective:
• Revised FRS 24 Related Party Disclosures • Amendments to FRS 32 Financial Instruments: Presentation – Classification of Rights Issues • Amendments to FRS 101 Limited Exemption from Comparative FRS 107 Disclosures for First-Time
Adopters • Amendments to INT FRS 114 – Prepayments of a Minimum Funding Requirement • INT FRS 115 Agreements for the Construction of Real Estate • INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments
INT FRS 115 which is effective for financial period commencing from 1 January 2011 clarifies when revenue and related expenses from a sale of a real estate unit should be recognised if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. INT FRS 115 clarifies that contracts which do not classify as construction contracts in accordance with FRS 11 can only be accounted for under the percentage of completion method if the entity continuously transfers to the buyer control and the significant risks and rewards of ownership of the work-in-progress in its current state as construction progresses.
The Group’s current accounting policy for all residential property sales was to recognise revenue on percentage of completion method which is an allowed alternative method under Recommended Accounting Practise 11 – Pre-Completion Contracts For The Sale Of Development Property (“RAP 11”). RAP 11 will be withdrawn with effect from 1 January 2011 following the adoption of INT FRS 115.
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42 NEw ACCOUNTINg STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (cont’d) The Group has considered the application of INT FRS 115 and the accompanying practice note issued
specifically in the context of the sale of development properties in Singapore, and concluded that whilst the “pre-completion” sale contracts were not, in substance, construction contracts, the legal terms in certain contracts result in the continuous transfer of work-in-progress to the purchaser. Consequently, the Group will continue to adopt the percentage of completion method of revenue recognition for residential projects under progressive payment schemes in Singapore and hence for these contracts; revenue is recognised as work progresses. For the residential projects under deferred payment scheme in Singapore and overseas residential projects, the construction revenue and expenses will be accounted for under the completion of construction method as stipulated in INT FRS 115, where applicable.
The estimated impact of this change in accounting policy is set out below: The group 2010 $’000
Increase in revenue from trading of properties 650 Increase in profit attributable to owners of the Company 152,539 Decrease in net assets (152,258) Increase in basis earning per share (cents) 3.6 Increase in diluted earning per share (cents) 3.3
Revised FRS 24 Related Party Disclosures modifies the definition of a related party and simplifies disclosures for government-related entities. The Group does not expect any impact on its financial position or performance, however, disclosures regarding related party transactions and balances in these consolidated financial statements may be affected when the revised version of the Standard is applied in future accounting periods.
Except for INT FRS 115 Agreements for the Construction of Real Estate, the initial application of these standards (and its consequential amendments) and interpretations is not expected to have a material impact on the Group’s financial statements. The Group has not considered the impact of accounting standards issued after the balance sheet date.
NOTICE OF ANNUAL gENERAL MEETINg
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NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912, on Monday, 25 April 2011 at 10.00 a.m. to transact the following business:
AS ORDINARY BUSINESS
1 To receive and adopt the Directors’ Report and Audited Financial Statements for the year ended 31 December 2010 and the Auditors’ Report thereon.
2 To declare a first and final 1-tier dividend of S$0.06 per share for the year ended 31 December 2010.
3 To approve Directors’ fees of S$1,409,220 for the year ended 31 December 2010 (2009: S$1,183,331).
4 To re-appoint the following Directors, who are retiring under Section 153(6) of the Companies Act, Cap. 50 of Singapore (the “Companies Act”), to hold office from the date of this Annual General Meeting until the next Annual General Meeting:
(a) Dr Hu Tsu Tau (b) Mr Richard Edward Hale
5 To re-elect the following Directors, who are retiring by rotation pursuant to Article 95 of the Articles of Association of the Company and who, being eligible, offer themselves for re-election:
(a) Mr James Koh Cher Siang (b) Mrs Arfat Pannir Selvam
6 To re-elect Mr Simon Claude Israel, a Director who is retiring pursuant to Article 101 of the Articles of Association of the Company and who, being eligible, offers himself for re-election.
7 To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fix their remuneration.
8 To transact such other ordinary business as may be transacted at an Annual General Meeting of the Company.
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AS SPECIAL BUSINESS
9 To consider and, if thought fit, to pass with or without any modification, the following resolutions as Ordinary Resolutions:
9A That pursuant to Section 161 of the Companies Act, authority be and is hereby given to the Directors of the Company to:
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
provided that:
(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed ten per cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited (“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:
(I) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and
(II) any subsequent bonus issue, consolidation or subdivision of shares;
NOTICE OF ANNUAL gENERAL MEETINg
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AS SPECIAL BUSINESS (cont’d)
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and
(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.
9B That the Directors of the Company be and are hereby authorised to:
(a) grant awards in accordance with the provisions of the CapitaLand Performance Share Plan 2010 (the “Performance Share Plan”) and/or the CapitaLand Restricted Share Plan 2010 (the “Restricted Share Plan”); and
(b) allot and issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the vesting of awards under the Performance Share Plan and/or the Restricted Share Plan,
provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the Performance Share Plan, the Restricted Share Plan and all shares, options or awards granted under any other share schemes of the Company then in force, shall not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.
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AS SPECIAL BUSINESS (cont’d)
9C That:
(a) for the purposes of Sections 76C and 76E of the Companies Act, the exercise by the Directors of the Company of all the powers of the Company to purchase or otherwise acquire ordinary shares in the capital of the Company (“ordinary shares”) not exceeding in aggregate the Maximum Limit (as hereafter defined), at such price or prices as may be determined by the Directors of the Company from time to time up to the Maximum Price (as hereafter defined), whether by way of:
(i) market purchase(s) on the SGX-ST and/or any other stock exchange on which the ordinary shares may for the time being be listed and quoted (“Other Exchange”); and/or
(ii) off-market purchase(s) (if effected otherwise than on the SGX-ST or, as the case may be, Other Exchange) in accordance with any equal access scheme(s) as may be determined or formulated by the Directors of the Company as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act,
and otherwise in accordance with all other laws and regulations and rules of the SGX-ST or, as the case may be, Other Exchange as may for the time being be applicable, be and is hereby authorised and approved generally and unconditionally (the “Share Purchase Mandate”);
(b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the Company pursuant to the Share Purchase Mandate may be exercised by the Directors of the Company at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of:
(i) the date on which the next Annual General Meeting of the Company is held; and
(ii) the date by which the next Annual General Meeting of the Company is required by law to be held;
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AS SPECIAL BUSINESS (cont’d)
(c) in this Resolution:
“Average Closing Price” means the average of the last dealt prices of an ordinary share for the five consecutive Market Days on which the ordinary shares are transacted on the SGX-ST or, as the case may be, Other Exchange immediately preceding the date of market purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the off-market purchase, and deemed to be adjusted in accordance with the listing rules of the SGX-ST for any corporate action which occurs after the relevant five-day period;
“date of the making of the offer” means the date on which the Company makes an offer for the purchase or acquisition of ordinary shares from shareholders, stating therein the purchase price (which shall not be more than the Maximum Price) for each ordinary share and the relevant terms of the equal access scheme for effecting the off-market purchase;
“Market Day” means a day on which the SGX-ST is open for trading in securities;
“Maximum Limit” means that number of ordinary shares representing two per cent. (2%) of the issued ordinary shares as at the date of the passing of this Resolution (excluding any ordinary shares which are held as treasury shares); and
“Maximum Price” in relation to an ordinary share to be purchased or acquired, means the purchase
price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which shall not exceed:
(i) in the case of a market purchase of an ordinary share, one hundred and five per cent. (105%) of the Average Closing Price of the ordinary shares; and
(ii) in the case of an off-market purchase of an ordinary share pursuant to an equal access scheme, one hundred and ten per cent. (110%) of the Average Closing Price of the ordinary shares; and
(d) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider expedient or necessary to give effect to the transactions contemplated and/or authorised by this Resolution.
By Order of the Board
Low Sai Choy Company Secretary
Singapore 23 March 2011
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A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote instead of him. Where a member appoints more than one proxy, he shall specify the proportion of his shareholdings to be represented by each proxy. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be deposited at the office of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906 not less than 48 hours before the time appointed for holding the Annual General Meeting.
Additional information relating to the Notice of Annual General Meeting:
1 In relation to items 4(a) and (b) under the heading “As Ordinary Business”, Dr Hu Tsu Tau will, upon re- appointment, continue to serve as Chairman of the Investment Committee and Mr Richard Edward Hale will, upon re-appointment, continue to serve as Chairman of the Audit Committee and a Member of the Risk Committee. Dr Hu and Mr Hale are considered as independent Directors.
2 In relation to item 5 under the heading “As Ordinary Business”, Mr Jackson Peter Tai, who will be retiring by rotation pursuant to Article 95 of the Articles of Association of the Company at the Annual General Meeting, is not seeking re-election. Mr Tai will also cease to serve as Member of the Investment Committee and the Finance and Budget Committee respectively. In relation to items 5(a) and (b) under the heading “As Ordinary Business”, Mr James Koh Cher Siang will, upon re-election, continue to serve as Chairman of the Risk Committee and the Corporate Disclosure Committee respectively, and a Member of the Audit Committee; and Mrs Arfat Pannir Selvam will, upon re-election, continue to serve as a Member of the Nominating Committee, the Corporate Disclosure Committee, the Risk Committee and the Audit Committee respectively. Mr Koh and Mrs Selvam are considered as independent Directors.
3 In relation to item 6 under the heading “As Ordinary Business”, Article 101 of the Company’s Articles of Association permits the Directors to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed shall hold office only until the next following Annual General Meeting, and shall then be eligible for re-election. Mr Simon Claude Israel was appointed on 1 July 2010 and is seeking re-election at the Annual General Meeting. Mr Israel will, upon re-election, continue to serve as a Member of the Investment Committee, the Executive Resource and Compensation Committee and the Nominating Committee respectively. Mr Israel is considered as a non-independent Director.
4 Ordinary Resolution No. 9A under the heading “As Special Business”, if passed, will empower the Directors to issue shares in the Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments from the date of the Annual General Meeting until the date of the next Annual General Meeting. The aggregate number of shares which the Directors may issue (including shares to be issued pursuant to convertibles) under this Resolution must not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company with a sub-limit of ten per cent. (10%) for issues other than on a pro rata basis. For the purpose of determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time that Ordinary Resolution No. 9A is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution No. 9A is passed and (b) any subsequent bonus issue, consolidation or subdivision of shares. The sub-limit of ten per cent. (10%) for issues other than on a pro rata basis is below the twenty per cent. (20%) sub-limit permitted by the Listing Manual of the SGX-ST. The Directors believe that the lower sub-limit of ten per cent. (10%) would sufficiently address the Company’s present need to maintain flexibility while taking into account shareholders’ concerns against dilution.
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5 Ordinary Resolution No. 9B under the heading “As Special Business”, if passed, will empower the Directors to grant awards under the Performance Share Plan and the Restricted Share Plan, and to allot and issue shares pursuant to the vesting of such awards provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the Performance Share Plan, the Restricted Share Plan and all shares, options or awards granted under any other share schemes of the Company then in force, does not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.
6 Ordinary Resolution No. 9C under the heading “As Special Business”, if passed, will empower the Directors to exercise all the powers of the Company to purchase or otherwise acquire ordinary shares not exceeding in aggregate two per cent. (2%) of the total number of issued shares as at the date of the passing of this Resolution (excluding treasury shares) in the capital of the Company from the date of the Annual General Meeting until the date of the next Annual General Meeting, whether by way of market purchase(s) or off-market purchase(s), on the terms of the Share Purchase Mandate set out in the Appendix circulated to shareholders of the Company.
The Company intends to use internal sources of funds, external borrowings, or a combination of internal resources and external borrowings, to finance purchases or acquisitions of its ordinary shares. The amount of financing required for the Company to purchase or acquire its ordinary shares, and the impact on the Company’s financial position, cannot be ascertained as at the date of this Notice as these will depend on, inter alia, whether the ordinary shares are purchased or acquired out of capital and/or profits of the Company, the aggregate number of ordinary shares purchased or acquired, and the consideration paid at the relevant time. For illustrative purposes only, the financial effects of an assumed purchase or acquisition of two per cent. (2%) of its ordinary shares by the Company as at 28 February 2011, at a purchase price equivalent to the Maximum Price per Share, in the case of a market purchase and an off-market purchase respectively, based on the audited financial statements of the Group and the Company for the financial year ended 31 December 2010 and certain assumptions, are set out in paragraph 2.7 of the Appendix circulated to shareholders of the Company.
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This Appendix is circulated to shareholders of CapitaLand Limited (the “Company”). Its purpose is to provide shareholders of the Company with information on the proposed renewal of the Share Purchase Mandate to be tabled at the Annual General Meeting to be held on 25 April 2011 at 10.00 a.m. at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912.
If you are in any doubt as to the action you should take, you should consult your stockbroker or other professional adviser immediately.
The Singapore Exchange Securities Trading Limited takes no responsibility for the accuracy of any statements made or opinions expressed in this Appendix.
ThE PROPOSED RENEwAL OF ThE ShARE PURChASE MANDATE
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DEFINITIONS
In this Appendix, the following definitions apply throughout unless otherwise stated:
“AGM” The annual general meeting of the Company to be held on 25 April 2011
“CDP” The Central Depository (Pte) Limited
“Companies Act” The Companies Act, Chapter 50 of Singapore as amended from time to time
“Company” or “CapitaLand” CapitaLand Limited
“Directors” The Directors of the Company
“Group” The Company and its subsidiaries
“Latest Practicable Date” 28 February 2011, being the latest practicable date prior to the printing of this Appendix
“Listing Manual” The Listing Manual of the SGX-ST, including any amendments made thereto up to the Latest Practicable Date
“Market Day” A day on which the SGX-ST is open for trading in securities
“Securities Accounts” Securities accounts maintained by Depositors with CDP, but not including securities sub-accounts maintained with a Depository Agent
“SGX-ST” Singapore Exchange Securities Trading Limited
“Share Purchase Mandate” The mandate to enable the Company to purchase or otherwise acquire its issued Shares
“Shareholders” Registered holders of Shares, except that where the registered holder is CDP, the term “Shareholders” shall, in relation to such Shares and where the context admits, mean the Depositors whose Securities Accounts maintained with CDP are credited with the Shares
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DEFINITIONS (cont’d)
“Shares” Ordinary shares in the capital of the Company
“Substantial Shareholder” In relation to the Company, a person who has an interest in not less than 5% of the issued voting shares of the Company
“Take-over Code” The Singapore Code on Take-overs and Mergers
“$” and “cents” Singapore dollars and cents respectively
“%” Percentage or per centum
“2010 Circular” The Company’s Circular to Shareholders dated 16 March 2010
“2010 EGM” The Extraordinary General Meeting of the Company held on 16 April 2010
The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations.
Any reference in this Appendix to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined in the Companies Act or any statutory modification thereof and not otherwise defined in this Appendix shall have the same meaning assigned to it in the Companies Act or any statutory modification thereof, as the case may be.
The headings in this Appendix are inserted for convenience only and shall be ignored in construing this Appendix.
Any reference to a time of day in this Appendix is made by reference to Singapore time unless otherwise stated.
Any discrepancies in the tables in this Appendix between the listed amounts and the totals thereof are due to rounding.
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1. INTRODUCTION
1.1 AGM. We refer to (a) the notice of AGM dated 23 March 2011 (the “Notice of AGM”) convening the AGM to be held on 25 April 2011; and (b) the Ordinary Resolution No. 9C under the heading “Special Business” set out in the Notice of AGM.
1.2 This Appendix. The purpose of this Appendix is to provide Shareholders with information relating to the proposed renewal of the Share Purchase Mandate to be tabled at the AGM.
2. ThE PROPOSED RENEwAL OF ThE ShARE PURChASE MANDATE
2.1 Background. Shareholders had approved the renewal of the Share Purchase Mandate at the 2010 EGM. The authority and limitations of the Share Purchase Mandate were set out in the 2010 Circular and the ordinary resolution in the notice of the 2010 EGM. The authority contained in the Share Purchase Mandate was expressed to continue in force until the next annual general meeting of the Company and, as such, would be expiring on 25 April 2011, being the date of the forthcoming AGM. Although the Company has not undertaken any purchases or acquisitions of its Shares pursuant to the authority conferred by the Share Purchase Mandate approved by Shareholders at the 2010 EGM, it is proposed nonetheless that such authority be renewed. Accordingly, the renewal of the Share Purchase Mandate will be tabled as Ordinary Resolution No. 9C for Shareholders’ approval at the AGM (“Ordinary Resolution”).
2.2 Rationale for the Share Purchase Mandate. The Share Purchase Mandate will give the Company the flexibility to undertake purchases or acquisitions of its Shares at any time, subject to market conditions, during the period that the Share Purchase Mandate is in force. Share purchases or acquisitions allow the Company greater flexibility over its share capital structure with a view to improving, inter alia, its return on equity. The Shares which are purchased or acquired may be held as treasury shares which the Company may, inter alia, transfer for the purposes of or pursuant to its employee share schemes so as to enable the Company to take advantage of tax deductions under the current taxation regime. The use of treasury shares in lieu of issuing new Shares would also mitigate the dilution impact on existing Shareholders.
It should be noted that the purchase or acquisition of Shares pursuant to the Share Purchase Mandate will only be undertaken if it can benefit the Company and Shareholders. No purchase or acquisition of Shares will be made in circumstances which would have or may have a material adverse effect on the financial position of the Company and the Group and/or affect the listing status of the Company on the SGX-ST.
2.3 Authority and limitations of the Share Purchase Mandate. The authority and limitations placed on the Share Purchase Mandate are summarised below.
(a) Maximum number of Shares
The total number of Shares which may be purchased or acquired by the Company pursuant to the Share Purchase Mandate is limited to that number of Shares representing not more than 2% of the issued Shares as at the date of the AGM, excluding any Shares held as treasury shares. Under the Companies Act, any Shares which are held as treasury shares shall be disregarded for the purposes of computing the 2% limit. As at the Latest Practicable Date, no Shares were held as treasury shares.
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2.3 Authority and limitations of the Share Purchase Mandate (cont’d)
(a) Maximum number of Shares (cont’d) For illustrative purposes ONLY, on the basis of 4,262,936,446 issued Shares as at the Latest Practicable
Date, and assuming that (i) no further Shares are issued, whether pursuant to the exercise of share options (“Share Options”) and/or vesting of awards (“Awards”) granted under employee share schemes implemented by the Company or otherwise, and (ii) no Shares are held as treasury shares, then not more than 85,258,728 Shares (representing 2% of the issued Shares as at that date) may be purchased or acquired by the Company pursuant to the Share Purchase Mandate.
(b) Duration of authority
Purchases or acquisitions of Shares may be made, at any time and from time to time, on and from the date of the AGM at which the renewal of the Share Purchase Mandate is approved, up to the date (being a date after the AGM) on which the next annual general meeting of the Company is held or required by law to be held; or the date (being a date after the AGM) on which the authority conferred by the Share Purchase Mandate is revoked or varied, whichever is the earlier.
(c) Manner of purchase or acquisition of Shares
Purchases or acquisitions of Shares may be made by way of:
(i) market purchases (“Market Purchases”); and/or
(ii) off-market purchases (“Off-Market Purchases”).
Market Purchases refer to purchases or acquisitions of Shares by the Company effected on the SGX- ST or, as the case may be, such other stock exchange for the time being on which the Shares may be listed and quoted, through one or more duly licensed stockbrokers appointed by the Company for the purpose.
Off-Market Purchases refer to purchases or acquisitions of Shares by the Company made under an equal access scheme or schemes for the purchase or acquisition of Shares from Shareholders. The Directors may impose such terms and conditions which are not inconsistent with the Share Purchase Mandate, the Listing Manual and the Companies Act as they consider fit in the interests of the Company in connection with or in relation to any equal access scheme or schemes. Under the Companies Act, an Off-Market Purchase must, however, satisfy all the following conditions:
(A) offers for the purchase or acquisition of Shares shall be made to every person who holds Shares to purchase or acquire the same percentage of their Shares;
(B) all of those persons shall be given a reasonable opportunity to accept the offers made; and
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2. ThE PROPOSED RENEwAL OF ThE ShARE PURChASE MANDATE (cont’d)
2.3 Authority and limitations of the Share Purchase Mandate (cont’d)
(c) Manner of purchase or acquisition of Shares (cont’d) (C) the terms of all the offers shall be the same, except that there shall be disregarded:
(1) differences in consideration attributable to the fact that offers may relate to Shares with different accrued dividend entitlements; and
(2) differences in the offers introduced solely to ensure that each person is left with a whole number of Shares.
Additionally, the Listing Manual provides that, in making an Off-Market Purchase, the Company must issue an offer document to all Shareholders which must contain, inter alia:
(aa) the terms and conditions of the offer;
(bb) the period and procedures for acceptances;
(cc) the reasons for the proposed Share purchases;
(dd) the consequences, if any, of Share purchases by the Company that will arise under the Take- over Code or other applicable takeover rules;
(ee) whether the Share purchases, if made, would have any effect on the listing of the Shares on the SGX-ST; and
(ff) details of any Share purchases made by the Company in the previous 12 months (whether Market Purchases or Off-Market Purchases), giving the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for the purchases, where relevant, and the total consideration paid for the purchases.
(d) Purchase price
The purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) to be paid for a Share will be determined by the Directors. However, the maximum purchase price (the “Maximum Price”) to be paid for the Shares as determined by the Directors must not exceed:
(i) in the case of a Market Purchase, 105% of the Average Closing Price of the Shares; and
(ii) in the case of an Off-Market Purchase, 110% of the Average Closing Price of the Shares,
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2.3 Authority and limitations of the Share Purchase Mandate (cont’d)
(d) Purchase price (cont’d) in either case, excluding related expenses of the purchase or acquisition. For the above purposes:
“Average Closing Price” means the average of the last dealt prices of a Share for the five consecutive Market Days on which the Shares are transacted on the SGX-ST or, as the case may be, such other stock exchange on which the Shares are listed or quoted, immediately preceding the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase, and deemed to be adjusted in accordance with the listing rules of the SGX-ST for any corporate action which occurs after the relevant five-day period; and
“date of the making of the offer” means the date on which the Company makes an offer for an Off- Market Purchase, stating therein the purchase price (which shall not be more than the Maximum Price for an Off-Market Purchase calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase.
2.4 Status of purchased or acquired Shares. Under current law, the Shares purchased or acquired by the Company shall be deemed cancelled immediately on purchase or acquisition, and all rights and privileges attached to those Shares will expire on cancellation, unless such Shares are held by the Company as treasury shares. The total number of issued Shares will be diminished by the number of Shares purchased or acquired by the Company which are cancelled and are not held as treasury shares.
2.5 Treasury shares. Under the Companies Act, the Shares purchased or acquired by the Company may be held or dealt with as treasury shares. Some of the provisions on treasury shares under the Companies Act are summarised below.
(a) Maximum holdings
The number of Shares held as treasury shares cannot at any time exceed 10% of the total number of issued Shares.
(b) Voting and other rights
The Company cannot exercise any right in respect of treasury shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Companies Act, the Company shall be treated as having no right to vote and the treasury shares shall be treated as having no voting rights.
In addition, no dividend may be paid, and no other distribution of the Company’s assets may be made, to the Company in respect of treasury shares. However, the allotment of Shares as fully paid bonus shares in respect of treasury shares is allowed. A subdivision or consolidation of any treasury share into treasury shares of a smaller amount is also allowed so long as the total value of the treasury shares after the subdivision or consolidation is the same as before.
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2. ThE PROPOSED RENEwAL OF ThE ShARE PURChASE MANDATE (cont’d)
2.5 Treasury shares (cont’d) (c) Disposal and cancellation
Where Shares are held as treasury shares, the Company may at any time but subject always to the Take- over Code:
(i) sell the treasury shares for cash;
(ii) transfer the treasury shares for the purposes of or pursuant to an employees’ share scheme;
(iii) transfer the treasury shares as consideration for the acquisition of shares in or assets of another company or assets of a person;
(iv) cancel the treasury shares; or
(v) sell, transfer or otherwise use the treasury shares for such other purposes as may be prescribed by the Minister for Finance.
Under the Listing Manual, immediate announcement must be made of any sale, transfer, cancellation and/or use of treasury shares (in each case, the “usage”). Such announcement must include details such as the date of the usage, the purpose of the usage, the number of treasury shares of the usage, the number of treasury shares before and after the usage, and the percentage of the number of treasury shares of the usage against the total number of issued shares (of the same class as the treasury shares) which are listed on the SGX-ST before and after the usage.
2.6 Source of funds. In purchasing or acquiring Shares pursuant to the Share Purchase Mandate, the Company may only apply funds legally available for such purchase or acquisition in accordance with the Articles of Association of the Company and applicable laws. Under the Companies Act, any payment made by the Company in consideration of the purchase or acquisition of its Shares may be made out of the Company’s capital and/or profits. The Company intends to use internal sources of funds, external borrowings, or a combination of internal resources and external borrowings, to finance purchases or acquisitions of its Shares. The Directors do not propose to exercise the Share Purchase Mandate to such extent that it would materially affect the working capital requirements, financial flexibility or investment ability of the Group.
2.7 Financial effects. The financial effects on the Group and the Company arising from purchases or acquisitions of Shares which may be made pursuant to the Share Purchase Mandate will depend on, inter alia, whether the Shares are purchased or acquired out of capital and/or profits of the Company, the aggregate number of Shares purchased or acquired, and the consideration paid at the relevant time. The financial effects on the Group and the Company based on the audited financial statements of the Group and the Company for the financial year ended 31 December 2010 are based on the assumptions set out below.
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2.7 Financial effects (cont’d) (a) Purchase or acquisition out of capital and/or profits
Under the Companies Act, purchases or acquisitions of Shares by the Company may be made out of the Company’s capital and/or profits so long as the Company is solvent.
Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, the amount available for the distribution of cash dividends by the Company will not be reduced.
Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of profits, such consideration (excluding brokerage, commission, applicable goods and services tax and other related expenses) will correspondingly reduce the amount available for the distribution of cash dividends by the Company.
(b) Maximum Price paid for Shares acquired or purchased
Based on 4,262,936,446 issued Shares as at the Latest Practicable Date (none of which are held as treasury shares), the purchase or acquisition by the Company of 2% of such Shares will result in the purchase or acquisition of 85,258,728 Shares.
Assuming that the Company purchases or acquires the 85,258,728 Shares at the Maximum Price, the maximum amount of funds required is approximately:
(i) in the case of Market Purchases of Shares, $294.1 million based on $3.45 for one Share (being the price equivalent to 5% above the Average Closing Price of the Shares traded on the SGX-ST for the five consecutive Market Days immediately preceding the Latest Practicable Date); and
(ii) in the case of Off-Market Purchases of Shares, $308.6 million based on $3.62 for one Share (being the price equivalent to 10% above the Average Closing Price of the Shares traded on the SGX-ST for the five consecutive Market Days immediately preceding the Latest Practicable Date).
For illustrative purposes ONLY, on the basis of the assumptions set out above as well as the following:
(A) the Share Purchase Mandate had been effective on 1 January 2010;
(B) there was no issuance of Shares, whether pursuant to the exercise of Share Options and/or vesting of Awards or otherwise, after the Latest Practicable Date; and
(C) such Share purchases are funded solely by internal resources,
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2. ThE PROPOSED RENEwAL OF ThE ShARE PURChASE MANDATE (cont’d)
2.7 Financial effects (cont’d) the financial effects on the audited financial statements of the Group and the Company for the financial year
ended 31 December 2010 would have been as set out below.
Market Purchase Off-Market Purchase Company Group Company Group Before After Before After Before After Before After Share Share Share Share Share Share Share Share Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase At 31 December 2010 $ M $ M $ M $ M $ M $ M $ M $ M
Shareholders’ funds 9,999 9,705 18,017 17,723 9,999 9,690 18,017 17,708 NTA 9,999 9,705 13,712 13,418 9,999 9,690 13,712 13,403 Current assets 1,220 926 14,952 14,658 1,220 911 14,952 14,643 Current liabilities 201 201 3,953 3,953 201 201 3,953 3,953 Working capital 1,019 725 10,999 10,705 1,019 710 10,999 10,690 Net debt 3,326 3,380 3,168 3,462 3,326 3,380 3,168 3,477 No. of issued Shares (in Million) 4,262 4,177 4,262 4,177 4,262 4,177 4,262 4,177
Financial indicators NTA per Share ($) 2.35 2.32 3.22 3.21 2.35 2.32 3.22 3.21 Gearing (Net D/E) 0.33 0.35 0.18 0.20 0.33 0.35 0.18 0.20
Current ratio (times) 6.07 4.61 3.78 3.71 6.07 4.53 3.78 3.70 Basic EPS (cents) 8.26 8.43 29.89 30.50 8.26 8.43 29.89 30.50
Notes:
(1) NTA means Net Tangible Assets Net D/E means Net Debt-to-Equity EPS means Earnings Per Share
(2) The disclosed financial effects remain the same irrespective of whether:
(a) the purchase of the Shares is effected out of capital or profits; or
(b) the purchased Shares are held in treasury or are cancelled.
(3) NTA equals shareholders’ funds less non-controlling interests and intangible assets. NTA per Share is calculated based on the number of issued Shares excluding treasury shares.
(4) Current ratio equals current assets divided by current liabilities.
ShAREhOLDERS ShOULD NOTE ThAT ThE FINANCIAL EFFECTS SET OUT ABOVE ARE BASED ON ThE AUDITED FINANCIAL STATEMENTS OF ThE gROUP AND ThE COMPANY FOR ThE FINANCIAL YEAR ENDED 31 DECEMBER 2010 AND ARE FOR ILLUSTRATION ONLY. ThE RESULTS OF ThE gROUP AND ThE COMPANY FOR ThE FINANCIAL YEAR ENDED 31 DECEMBER 2010 MAY NOT BE REPRESENTATIVE OF FUTURE PERFORMANCE.
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2.7 Financial effects (cont’d) It should be noted that although the Share Purchase Mandate would authorise the Company to purchase
or acquire up to 2% of the issued Shares, the Company may not necessarily purchase or acquire or be able to purchase or acquire the entire 2% of the issued Shares. In addition, the Company may cancel or hold in treasury all or part of the Shares purchased or acquired. The Company will take into account both financial and non-financial factors (for example, stock market conditions and the performance of the Shares) in assessing the relative impact of a share purchase before execution.
2.8 Taxation. Shareholders who are in doubt as to their respective tax positions or any tax implications, or who may be subject to tax in a jurisdiction outside Singapore, should consult their own professional advisers.
2.9 Listing status of the Shares. The Listing Manual requires a listed company to ensure that at least 10% of the total number of its issued shares (excluding treasury shares, preference shares and convertible equity securities) in a class that is listed, is held by public shareholders at all times. As at the Latest Practicable Date, approximately 58.94% of the issued Shares are held by public shareholders. Accordingly, the Company is of the view that there is a sufficient number of the Shares held by public shareholders which would permit the Company to undertake purchases or acquisitions of its Shares through Market Purchases up to the full 2% limit pursuant to the Share Purchase Mandate without affecting the listing status of the Shares on the SGX-ST. The Company will consider investor interests when maintaining a liquid market in its securities, and will ensure that there is a sufficient float for an orderly market in its securities when purchasing its Shares.
2.10 Listing rules. The Listing Manual restricts a listed company from purchasing shares by way of market purchases at a price per share which is more than 5% above the “average closing price”, being the average of the closing market prices of the shares over the last five Market Days on which transactions in the shares were recorded, before the day on which the purchases were made, as deemed to be adjusted for any corporate action that occurs after the relevant five-day period. The Maximum Price for a Share in relation to Market Purchases referred to in paragraph 2.3 above complies with this requirement. Although the Listing Manual does not prescribe a maximum price in relation to purchases of shares by way of off-market purchases, the Company has set a cap of 10% above the average closing price of a Share as the Maximum Price for a Share to be purchased or acquired by way of an Off-Market Purchase. While the Listing Manual does not expressly prohibit any purchase or acquisition of shares by a listed company during any particular time or times, because the listed company would be regarded as an “insider” in relation to any proposed purchase or acquisition of its issued shares, the Company will not undertake any purchase or acquisition of Shares pursuant to the Share Purchase Mandate at any time after any matter or development of a price sensitive nature has occurred or has been the subject of consideration and/or a decision of the Board of Directors of the Company until such price sensitive information has been publicly announced. In particular, in line with the Company’s internal guide on securities dealings, the Company will not purchase or acquire any Shares through Market Purchases during the two weeks immediately preceding, and up to the time of the announcement of, the Company’s results for each of the first three quarters of its financial year and during the one month preceding, and up to the time of announcement of, the Company’s results for the full financial year.
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2.11 Reporting requirements. The Listing Manual specifies that a listed company shall report all purchases or acquisitions of its shares to the SGX-ST not later than 9.00 a.m. (a) in the case of a market purchase, on the Market Day following the day of purchase or acquisition of any of its shares, and (b) in the case of an off- market purchase under an equal access scheme, on the second Market Day after the close of acceptances of the offer. Such announcement (which must be in the form prescribed by the Listing Manual) must include details of the date of the purchase, the total number of shares purchased, the purchase price per share or the highest and lowest prices paid for such shares, as applicable, and the total consideration (including stamp duties and clearing charges) paid or payable for the shares.
2.12 Take-over implications. Appendix 2 of the Take-over Code contains the Share Buy-Back Guidance Note. The take-over implications arising from any purchase or acquisition by the Company of its Shares are set out below.
(a) Obligation to make a take-over offer
If, as a result of any purchase or acquisition by the Company of its Shares, the proportionate interest in the voting capital of the Company of a Shareholder and persons acting in concert with him increases, such increase will be treated as an acquisition for the purposes of Rule 14 of the Take-over Code. Consequently, a Shareholder or a group of Shareholders acting in concert with a Director could obtain or consolidate effective control of the Company and become obliged to make an offer under Rule 14 of the Take-over Code.
(b) Persons acting in concert
Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal), co-operate, through the acquisition by any of them of shares in a company to obtain or consolidate effective control of that company.
Unless the contrary is established, the Take-over Code presumes, inter alia, the following individuals and companies to be persons acting in concert with each other:
(i) the following companies:
(A) a company;
(B) the parent company of (A);
(C) the subsidiaries of (A);
(D) the fellow subsidiaries of (A);
(E) the associated companies of any of (A), (B), (C) or (D);
(F) companies whose associated companies include any of (A), (B), (C), (D) or (E); and
(G) any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the foregoing companies for the purchase of voting rights; and
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2.12 Take-over implications (cont’d) (ii) a company with any of its directors (together with their close relatives, related trusts as well as
companies controlled by any of the directors, their close relatives and related trusts).
The circumstances under which Shareholders, including Directors and persons acting in concert with them respectively, will incur an obligation to make a take-over offer under Rule 14 of the Take-over Code after a purchase or acquisition of Shares by the Company are set out in Appendix 2 of the Take-over Code.
(c) Effect of Rule 14 and Appendix 2
In general terms, the effect of Rule 14 and Appendix 2 of the Take-over Code is that, unless exempted, Directors and persons acting in concert with them will incur an obligation to make a take-over offer under Rule 14 if, as a result of the Company purchasing or acquiring Shares, the voting rights of such Directors and their concert parties would increase to 30% or more, or in the event that such Directors and their concert parties hold between 30% and 50% of the Company’s voting rights, if the voting rights of such Directors and their concert parties would increase by more than 1% in any period of six months. In calculating the percentages of voting rights of such Directors and their concert parties, treasury shares shall be excluded.
Under Appendix 2 of the Take-over Code, a Shareholder not acting in concert with the Directors will not be required to make a take-over offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Shareholder would increase to 30% or more, or, if such Shareholder holds between 30% and 50% of the Company’s voting rights, the voting rights of such Shareholder would increase by more than 1% in any period of six months. Such Shareholder need not abstain from voting in respect of the resolution authorising the Share Purchase Mandate.
Based on the interests of the Substantial Shareholder in issued Shares recorded in the Register of Substantial Shareholders as at the Latest Practicable Date, the Substantial Shareholder would not become obliged to make a take-over offer for the Company under Rule 14 of the Take-over Code as a result of any purchase or acquisition of Shares by the Company pursuant to the Share Purchase Mandate of the maximum limit of 2% of its issued Shares (excluding Shares held in treasury) as at the Latest Practicable Date.
ShAREhOLDERS whO ARE IN DOUBT AS TO ThEIR OBLIgATIONS, IF ANY, TO MAKE A MANDATORY TAKE-OVER OFFER UNDER ThE TAKE-OVER CODE AS A RESULT OF ANY PURChASE OR ACqUISITION OF ShARES BY ThE COMPANY ShOULD CONSULT ThE SECURITIES INDUSTRY COUNCIL AND/OR ThEIR PROFESSIONAL ADVISERS AT ThE EARLIEST OPPORTUNITY.
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3. DIRECTORS’ AND SUBSTANTIAL ShAREhOLDERS’ INTERESTS
3.1 Interests of Directors. The interests of the Directors in issued Shares, as recorded in the Company’s Register of Directors’ Shareholdings as at the Latest Practicable Date, are set out below.
Direct Interest Deemed Interest Total Interest No. of No. of No. of Directors Shares % Shares % Shares %
Dr Hu Tsu Tau 253,653 0.0060 0 0 253,653 0.0060 Peter Seah Lim Huat 267,417 0.0063 0 0 267,417 0.0063 Liew Mun Leong 3,119,436 0.0732 237,000* 0.0056 3,356,436 0.0787 Jackson Peter Tai 600,572 0.0141 0 0 600,572 0.0141 Richard Edward Hale 839,549 0.0197 0 0 839,549 0.0197 James Koh Cher Siang 223,933 0.0053 4,500* 0.0001 228,433 0.0054 Arfat Pannir Selvam 179,799 0.0042 0 0 179,799 0.0042 Professor Kenneth Stuart Courtis 117,697** 0.0028 0 0 117,697** 0.0028 Dr Fu Yuning 0 0 0 0 0 0 John Powell Morschel 0 0 0 0 0 0 Ng Kee Choe 10,000 0.0002 0 0 10,000 0.0002 Simon Claude Israel 0 0 0 0 0 0
Notes:
* Shares are held by spouse.
** 80,000 Shares and 37,697 Shares are held through DBS Nominees (Private) Limited and Morgan Stanley Asia (Singapore) Securities Pte Ltd, respectively.
There were 4,262,936,446 issued Shares as at the Latest Practicable Date, none of which were held as treasury shares.
The interests of the Directors in outstanding Awards as at the Latest Practicable Date are set out below.
Number of Shares comprised in outstanding Directors Awards
Dr Hu Tsu Tau 19,336(1)
13,373(2)
Peter Seah Lim Huat 19,336(1)
16,108(2)
Liew Mun Leong 53,554(3)
171,958(4)
Up to 301,913(5)
Up to 2,240,046(6)
Jackson Peter Tai 11,280(1)
9,422(2)
Richard Edward Hale 17,725(1)
14,386(2)
James Koh Cher Siang 19,336(1)
12,461(2)
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3.1 Interests of Directors (cont’d) Number of Shares comprised in outstanding Directors Awards
Arfat Pannir Selvam 14,503(1)
13,474(2)
Professor Kenneth Stuart Courtis 11,280(1)
9,422(2)
Dr Fu Yuning 5,775(2)
John Powell Morschel 5,369(2)
Ng Kee Choe^ – Simon Claude Israel^ –
Notes: (1) Being the unvested half of the Award.
(2) Being the Award granted in 2010. For the year 2010, the awards to non-executive directors are time-based with no performance conditions and will be released over a vesting period of two years.
(3) Being the unvested remaining one-third of the Award.
(4) Being the unvested two-third of the Award.
(5) The final number of Shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of three years. No Shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more Shares than the baseline award could be delivered up to a maximum of 150% of the baseline award.
(6) The final number of Shares released will depend on the achievement of pre-determined targets over a three-year performance period. No Shares will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more Shares than the baseline award could be delivered up to a maximum of 200% of the baseline award.
^ Mr Ng Kee Choe and Mr Simon Claude Israel were appointed on 16 April 2010 and 1 July 2010 respectively.
There were no outstanding Share Options held by the Directors as at the Latest Practicable Date.
3.2 Interests of Substantial Shareholder. The interests of the Substantial Shareholder in issued Shares, as recorded in the Company’s Register of Substantial Shareholders as at the Latest Practicable Date, are set out below.
Direct Interest Deemed Interest Total Interest No. of No. of No. of Substantial Shareholder Shares % Shares % Shares %
Temasek Holdings (Private) Limited 1,680,704,140 39.43 63,606,870 1.49 1,744,311,010 40.92
Notes:
By virtue of Section 7 of the Companies Act, Temasek Holdings (Private) Limited (“Temasek”) is deemed to have an interest in 63,606,870 Shares in which its associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance.
There were 4,262,936,446 issued Shares as at the Latest Practicable Date, none of which were held as treasury shares.
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4. DIRECTORS’ RECOMMENDATION
The Directors are of the opinion, for the reasons set out in paragraph 2.2 above, that the Share Purchase Mandate is in the interests of the Company. Accordingly, they recommend that Shareholders vote in favour of the Ordinary Resolution No. 9C relating to the renewal of the Share Purchase Mandate to be proposed at the AGM.
5. DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors collectively and individually accept responsibility for the accuracy of the information given in this Appendix and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and opinions expressed in this Appendix are fair and accurate and there are no material facts the omission of which would make any statement in this Appendix misleading. Where information has been extracted from published or otherwise publicly available sources, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from these sources.
6. INSPECTION OF DOCUMENTS
Copies of the following documents are available for inspection at the registered office of the Company during normal business hours from the date hereof up to and including the date of the AGM:
(a) the 2010 Circular; and
(b) the Company’s Memorandum and Articles of Association.
CAPITALAND LIMITED (Regn. No.: 198900036N) (Incorporated in the Republic of Singapore)
PROxY FORM ANNUAL gENERAL MEETINg
I/We, __________________________________ (Name) ______________________________ (NRIC/Passport/Company Regn. No.)
of ___________________________________________________________________________________________________ (Address)
being a member/members of CapitaLand Limited (the “Company”) hereby appoint:
Name Address NRIC/Passport No.
Proportion of Shareholdings
No. of Shares %
and/or (delete as appropriate)
Name Address NRIC/Passport No.
Proportion of Shareholdings
No. of Shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary, to demand a poll, at the Annual General Meeting of the Company, to be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912, on Monday, 25 April 2011 at 10.00 a.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Annual General Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Annual General Meeting.
No. Resolutions Relating To: For* Against*
ORDINARY BUSINESS
1 Adoption of Directors’ Report, Audited Financial Statements and Auditors’ Report
2 Declaration of a First and Final Dividend
3 Approval of Directors’ Fees
4(a) Re-appointment of Dr Hu Tsu Tau as Director
4(b) Re-appointment of Mr Richard Edward Hale as Director
5(a) Re-election of Mr James Koh Cher Siang as Director
5(b) Re-election of Mrs Arfat Pannir Selvam as Director
6 Re-election of Mr Simon Claude Israel as Director
7 Re-appointment of Auditors
8 Any Other Business
SPECIAL BUSINESS
9A Authority for Directors to issue shares and to make or grant instruments pursuant to Section 161 of the Companies Act, Cap. 50
9B Authority for Directors to grant awards, and to allot and issue shares, pursuant to the CapitaLand Performance Share Plan 2010 and the CapitaLand Restricted Share Plan 2010
9C Renewal of the Share Purchase Mandate
* Please indicate your vote “For” or “Against” with a “ ” within the box provided. Dated this _______________________ day of ____________________________ 2011
Signature(s) of Member(s) or Common Seal
IMPORTANT: PLEASE READ NOTES TO PROXY FORM ON REVERSE PAGE.
Total Number of Shares held
IMPORTANT
1. For investors who have used their CPF monies to buy the Company’s shares, this Summary Report/Annual Report is forwarded to them at the request of their CPF Approved Nominee and is sent solely FOR THEIR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.
CAPITALAND LIMITED c/o M & C Services Private Limited
138 Robinson Road #17-00 The Corporate Office
Singapore 068906
Affix postage stamp
1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company.
2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3. Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy or proxies, to the Meeting.
4. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register as well as shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, the instrument of proxy will be deemed to relate to all the shares held by the member.
5. The instrument appointing a proxy or proxies must be deposited at the office of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906, not less than 48 hours before the time appointed for holding the Meeting.
3rd fold here, glue along the dotted line and fold flap
2nd fold here
1st fold here
6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.
7. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Cap. 50 of Singapore.
general The Company shall be entitled to reject the instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at least 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
NOTES TO PROxY FORM
SINGAPORE CapitaLand Limited
168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 www.capitaland.com [email protected] (Reg. No. 198900036N)
CapitaLand Residential
Singapore Pte Ltd
8 Shenton Way #21-01 Singapore 068811 Tel +65 6820 2188 Marketing hotline: +65 6826 6800 Fax +65 6820 2208 www.capitalandresidential.com [email protected] (Reg. No. 200102075W)
CapitaValue Homes Limited
8 Shenton Way #29-03 Singapore 068811 Tel +65 6826 5312 Fax +65 6820 1206 (Reg. No. 200803504M)
CapitaLand
Commercial Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3788 www.capitalandcommercial.com [email protected] (Reg. No. 197801869H)
CapitaMalls Asia Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitamallsasia.com [email protected] (Reg. No. 200413169H)
The Ascott Limited
8 Shenton Way #13-01 Singapore 068811 Tel +65 6220 8222 Fax +65 6227 2220 www.the-ascott.com [email protected] (Reg. No. 197900881N)
CapitaLand Financial Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3788 www.capitalandfinancial.com [email protected] (Reg. No. 200308451M)
CapitaLand ILEC Pte. Ltd.
39 Robinson Road #16-01 Robinson Point Singapore 068911 Tel +65 6622 6000 Fax +65 6720 8608 www.capitalandilec.com [email protected] (Reg. No. 199701358Z)
CapitaMall Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitamall.com [email protected] (Reg. No. 200106159R)
CapitaCommercial Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6533 6133 www.cct.com.sg [email protected] (Reg. No. 200309059W)
Ascott Residence Trust
Management Limited
8 Shenton Way #13-01 Singapore 068811 Tel +65 6389 9388 Fax +65 6389 9399 www.ascottreit.com [email protected] (Reg. No. 200516209Z)
CapitaRetail China Trust
Management Limited
39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel +65 6536 1188 Fax +65 6536 3884 www.capitaretailchina.com [email protected] (Reg. No. 200611176D)
AUSTRALIA Australand Holdings Limited
Level 3, Building C Rhodes Corporate Park 1 Homebush Bay Drive Rhodes NSW 2138 Australia Tel +61 02 9767 2000 Fax +61 02 9767 2900 www.australand.com.au [email protected] (Reg. No. ABN 12008443696)
CHINA CapitaLand China Holdings
Pte Ltd
268 Xizang Road (Middle) #19-01 Raffles City Shanghai 200001 Shanghai People’s Republic of China Tel +86 21 3311 4633 Fax +86 21 6340 3733 www.capitaland.com.cn [email protected] (Reg. No. 199302460C)
MALAYSIA Quill Capita Management
Sdn. Bhd.
9-1, Menara Ireka Kompleks '1 Mont Kiara' No.1 Jalan Kiara Mont Kiara 50480 Kuala Lumpur, Malaysia Tel +603 2788 8188 Fax + 603 2788 8199 www.qct.com.my [email protected] (Reg. No. 737252-X)
CapitaMalls Malaysia REIT
Management Sdn. Bhd.
Level 2, Ascott Kuala Lumpur No. 9, Jalan Pinang 50450 Kuala Lumpur, Malaysia Tel +60 3 2279 9888 Fax +60 3 2279 9889 www.capitamallsmalaysia.com [email protected] (Reg. No. 819351-H)
VIETNAM CapitaLand (Vietnam)
Holdings Pte. Ltd.
30th floor, Saigon Trade Center 37 Ton Duc Thang Street District 1 Ho Chi Minh City, Vietnam Tel +84 (8) 3910 6182 Fax +84 (8) 3910 6186 www.capitaland.com.vn
REGISTRAR
M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore 068906 Tel +65 6227 6660 Fax +65 6225 1452 (Reg. No. 197901676D)
AUDITORS
KPMG LLP 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 Tel +65 6213 2008 Fax +65 6225 4142 Engagement Partner since financial year ended 31 December 2010: Leong Kok Keong
This Annual Report to Shareholders may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, availability of real estate properties, competition from other companies and venues for the sale/distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefits and training, governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events.
MAIN CONTACTS
CAPITALAND LIMITED
168 Robinson Road #30-01 Capital Tower
Singapore 068912 Tel +65 6823 3200
Fax +65 6820 2202 (Reg No. 198900036N)
www.capitaland.com This Annual Report is printed on environmentally-friendly paper.
capital land/CapitaLand Limited AR_12 FA.pdf
AnnuAl RepoRt
2012
FoCuS BAlAnCe
SCAle POSITIONED FOR GROWTH
Contents Corporate Profile 2 Financial Highlights FY2012 3 5-Year Financial Summary 4
Share Price Performance 5
Management Reports
Letter to Shareholders 10 Year In Brief 21 Awards & Accolades 28 Corporate Directory 32 Financial Calendar 33 Board of Directors 34 Executive Management Council 42 Corporate Office 50
Corporate Governance
Corporate Governance Report 52 Risk Assessment and Management 75 Stakeholder Communication 78
portfolio Details
Residential 116 Commercial 120 Shopping Malls 122 Serviced Residences 128
Mixed Developments 134
Appendix
Statutory Accounts 136 Economic Value Added Statements 242 Value Added Statements 243 Supplemental Information 244 Shareholding Statistics 246 Notice of Annual General Meeting 247 Proxy Form 251
Sustainability
Environment, Health and Safety 82 People 84 Community 86
Business Review
Global Presence 88 Performance Overview 90 Group Businesses 102 CapitaLand Singapore 104 CapitaLand China 106 CapitaMalls Asia 108 Ascott 110 Financial Products & Services and Regional Investments 112
2 3
Financial HigHligHts FY2012
PRofit AttRiButABle to ShAReholDeRS
s$930.3 million eARninGS BefoRe inteReSt AnD tAx
s$2.02 billion RetuRn on ShAReholDeRS’ funDS
6.2%
GRouP MAnAGeD ReAl eStAte ASSetS
s$63.8 billion
RetuRn on totAl ASSetS
5.2%
Revenue unDeR MAnAGeMent
s$7.3 billion MARket CAPitAliSAtion
s$15.7 billion
corporate proFile
capitaland is one of asia’s largest real estate companies. Headquartered and listed in singapore, the company’s businesses in real estate and real estate fund management are focused on its core markets of singapore and china.
the company’s diversified real estate portfolio primarily includes homes, offices, shopping malls, serviced residences and mixed developments. the company also has one of the largest real estate fund management businesses with assets located in asia. capitaland leverages its significant asset base, real estate domain knowledge, product design and development capabilities, active capital management strategies and extensive market network to develop real estate products and services in its markets.
the listed entities of the capitaland group include australand, capitaMalls asia, ascott residence trust, capitacommercial trust, capitaMall trust, capitaMalls Malaysia trust, capitaretail china trust and Quill capita trust.
to build a world-class company, with an international presence and a strong global network, that is managed by people whose core values are respected by the business and social community to: • Create sustainable shareholder value • Deliver quality products and services • Attract and develop quality human capital
MiSSion & viSion
• Our people are our strength. We build people to build for people. • We are committed to the highest standards of integrity. • We have the courage to do what is right and the will to succeed. • We add value to what we do through innovation and continuous improvement. • We are fair and reasonable in all our actions and dealings with business partners, customers and colleagues.
• We contribute to the well-being of the community.
CoRe vAlueS
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Benchmark Index
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5-Year Financial suMMarY 2008 2009 2010 2011 2012 (Restated)
(A) inCoMe StAteMent (S$ million) Revenue by SBUs capitaland residential singapore 400.2 673.8 1,284.9 774.1 854.3 capitaland china Holdings 330.3 647.0 327.2 526.6 404.1 capitaland commercial (1) 227.9 144.9 142.9 96.7 86.5 the ascott limited 441.8 393.7 407.4 377.5 381.7 capitaValue Homes (1) – – 0.1 80.3 3.9 capitaland Financial 182.2 162.2 116.2 103.3 114.1 capitaMalls asia 206.7 228.9 245.4 246.2 353.7 australand 984.3 732.5 879.8 836.4 1,131.7 others (21.1) (25.6) (20.5) (21.5) (28.6) Total 2,752.3 2,957.4 3,383.4 3,019.6 3,301.4 Earnings Before Interest and Tax (EBIT) by SBUs capitaland residential singapore 175.0 371.7 514.0 327.4 328.2 capitaland china Holdings 883.4 551.2 648.9 423.7 322.8 capitaland commercial (1) 395.6 (497.4) 250.2 189.6 174.2 the ascott limited 132.2 31.4 173.0 148.4 163.2 capitaValue Homes (1) – – (20.5) (12.9) (80.9) capitaland Financial 90.4 98.0 103.0 80.0 67.8 capitaMalls asia 298.6 449.1 603.4 597.0 676.2 australand 169.6 (240.8) 311.9 324.2 357.3 others 68.7 785.8 0.6 9.2 8.6 Total 2,213.5 1,549.0 2,584.5 2,086.6 2,017.4 Net Profit attributable to Shareholders 1,260.1 1,053.0 1,425.7 1,057.3 930.3 (B) BAlAnCe Sheet (S$ million) investment properties 4,848.9 5,058.5 4,732.9 7,074.6 7,969.4 Development properties for sale and stock 3,347.2 3,590.2 5,667.1 6,905.1 7,510.1 associates and Joint Ventures 7,864.6 8,684.2 10,048.8 10,685.0 12,511.3 cash and cash equivalents 4,228.4 8,729.7 7,190.1 6,264.5 5,497.7 other assets 4,794.5 4,103.4 4,248.2 4,390.3 4,299.1 Total Assets 25,083.6 30,166.0 31,887.1 35,319.5 37,787.6 equity attributable to owners of the company 10,681.7 13,408.3 14,031.9 14,901.6 15,080.4 total Borrowings 9,829.3 10,312.6 10,358.0 12,190.6 14,179.8 non-controlling interests and other liabilities 4,572.6 6,445.1 7,497.2 8,227.3 8,527.4 Total Equities & Liabilities 25,083.6 30,166.0 31,887.1 35,319.5 37,787.6 (C) finAnCiAl RAtioS Earnings per share (cents) 37.0 26.2 33.5 24.8 21.9
Net Tangible Assets per share (S$) 3.57 3.03 3.18 3.40 3.44
Return on Shareholders’ Funds (%) 12.2 8.7 10.5 7.3 6.2
Return on Total Assets (%) 7.9 5.5 7.7 5.9 5.2 Dividend ordinary dividend per share (cents) 5.5 5.5 6.0 6.0 7.0 special dividend per share (cents) 1.5 5.0 – 2.0 – total dividend per share (cents) 7.0 10.5 6.0 8.0 7.0 Dividend cover (times) 4.2 2.4 5.6 3.1 3.1 Debt Equity Ratio (net of cash) (times) 0.47 0.09 0.18 0.31 0.45 Interest Cover (times) 5.50 4.54 7.63 5.72 5.50 Note: For changes in accounting policies, adoption of new and/or revised accounting standards, as well as changes in the presentation of
financial statements for the respective financial year under review, only the comparative figures for the previous year were restated to conform with the requirements arising from the said changes or adoption.
(1) With effect from 1 January 2011, the residential business in Vietnam is reported under CapitaValue Homes and no longer under CapitaLand Commercial.
SinGAPoRe
huB of ASiA capitaland is well-positioned to leverage opportunities in singapore’s next phase of development. in addition, singapore’s strategic location will allow capitaland to tap any opportunities in the region’s emerging markets.
1 SkY hABitAt
2 ASCott RAffleS PlACe SinGAPoRe
3 the StAR viStA
4 BeDok MAll & BeDok ReSiDenCeS
5 CAPitAGReen
2 31
4
5
8 9
ChinA
enGine of GROWTH the fundamentals of urbanisation, economic growth, aspirations of the growing middle-class and improving infrastructure will underpin the housing industry in china. We want to continue to be a part of china’s urbanisation and growth story.
1 32
4
5
1 RAffleS CitY ChonGqinG
2 CApiTAmAll WusHenG, WuHAn
3 ASCott RAffleS CitY ChenGDu
4 the floRAvAle, ShAnGhAi
5 BeAufoRt, BeiJinG
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Management Reports
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letter to sHareHolDers
letter to sHareHolDers
liM MinG YAn PReSiDent & GRouP Ceo
nG kee Choe ChAiRMAn
Between 2010 and 2012, it committed approximately s$21.0 billion of new investments, positioning the Group well to ride the growth in Asia
As at end 2012, Capitaland’s businesses in Singapore accounted for s$11.3 billion or 33% of the Group’s total assets (excluding treasury cash)
s$21.0b new investments
s$11.3b assets in singapore
DeAR ShAReholDeRS,
capitaland registered a commendable set of financial results for the year ended 31 December 2012, posting net profit after tax and minority interests of s$930.3 million and revenue of s$3.3 billion, amidst global economic uncertainties.
in 2012, the group delivered better than expected residential sales in singapore and china, and opened two new shopping malls in singapore and seven in china. During the year, capitaland continued to invest in new projects amounting to s$4.06 billion. Between 2010 and 2012, it committed approximately s$21.0 billion of new investments, positioning the group well to ride the growth in asia. about 90% of these investments are focused in singapore and china. Despite a high level of investment activities, the group maintains a robust balance sheet through its capital recycling model and prudent capital management.
to position for the future, capitaland simplified its organisational structure in 2013 into four main businesses – capitaland singapore, capitaland china, capitaMalls asia limited (cMa) and the ascott limited (ascott). By consolidating its key residential, office and mixed development businesses into two integrated country-centric structures – capitaland singapore and capitaland china, the group will be better able to drive its growth in these two core markets. shopping mall and serviced residence businesses in all markets including singapore and china continue to be spearheaded by cMa and ascott respectively. this will allow cMa and ascott to deepen their product expertise and maximise the international network effect inherent in both businesses. the group has also streamlined its chinese name to “凯德集团” (Kai Dé Jí tuán) since the beginning of 2013. this allows the group to better leverage its brand recognition in both china and singapore.
StRAteGiC foCuS on SinGAPoRe AnD ChinA capitaland is confident of the long-term prospects of the real estate markets in singapore and china, two markets that are underpinned by strong economic fundamentals, growing population, rising disposable income and improving consumption patterns. in both markets, capitaland has built up strong capabilities spanning the full real estate value chain from land acquisition, development, operation to capital management. the group has a strong track record and enjoys a high level of brand recognition.
as at end 2012, capitaland’s businesses in singapore accounted for s$11.3 billion or 33% of the group’s total assets (excluding treasury cash). this diversified portfolio spans across homes (31%), offices and mixed developments (19%), shopping malls (40%), serviced residences (5%), financial services (2%) and others (3%). singapore was capitaland’s most profitable market in 2012, with eBit contribution of s$893.8 million, or 44% of total group eBit.
as at end 2012, china accounted for s$13.4 billion or about 39% of the group’s overall balance sheet in terms of assets. capitaland’s china portfolio is diversified across the following sectors: homes (33%), shopping malls (35%), mixed developments (23%), serviced residences (6%) and others (3%). china is also capitaland’s second most profitable geography after singapore, with eBit contribution of s$658.4 million, or 33% of total group eBit in 2012.
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in the residential market in china, the chinese government had implemented policies to moderate real estate prices. Homebuyers who initially adopted a ‘wait and see’ attitude returned to the market from april 2012, following two rounds of interest rates easing by the people’s Bank of china and price discounts from developers. in 2012, capitaland sold over 3,000 units and achieved a total sales value of rMB7.0 billion (s$1.4 billion). these figures compared favourably to the 1,466 units sold with a sales value of rMB2.9 billion (s$0.6 billion) in 2011. the loft in chengdu, Dolce Vita in guangzhou and ipark phase 1, the residential component of raffles city shenzhen, contributed much to the success.
revenue and earnings recognition for 2012 decreased compared to the previous year due to lower divestment gains and fewer completions handed to homebuyers. capitaland handed over 1,995 units to homebuyers in 2012, a 40% year-on-year decline compared to 2011.
During the year, capitaland secured a residential site in shanghai. the group’s development pipeline now stands at approximately 28,000 homes with a gross floor area in excess of three million square metres.
three new residential projects, namely Vermont Hills in Beijing, summit residences in ningbo and the lakeside in Wuhan, will be launch-ready in 2013. in addition, the boutique apartments at raffles city chengdu, together with subsequent phases from existing projects such as the loft, Dolce Vita and imperial Bay will also be planned for release. collectively, about 4,000 housing units are scheduled for launch with an estimated value of rMB6.0 billion. separately, capitaland is on schedule to hand over some 3,000 residential units from Beaufort in Beijing, imperial Bay, Dolce Vita and the loft to homebuyers in 2013.
letter to sHareHolDers
letter to sHareHolDers
Capitaland Singapore is Capitaland’s main business unit for residential, office and mixed development businesses in Singapore
Capitaland has made its maiden direct large scale mixed development investment in Danga Bay A2 island in iskandar, Malaysia
in 2012, Capitaland sold over 3,000 units and achieved a total sales value of RmB7.0 billion
rMB7.0b total sales Value
d’leeDon SINGAPORE
TWenTY AnsOn SINGAPORE
CAPitAlAnD SinGAPoRe capitaland singapore is capitaland’s main business unit for residential, office and mixed development businesses in singapore.
in the residential sector in singapore, market sentiments were affected by additional rounds of cooling measures introduced in october 2012 and January 2013. these measures were principally aimed to curb speculative demand. amidst these challenges, the group launched sky Habitat in Bishan and new phases of d’leedon and achieved total sales value of s$1.3 billion in 2012, comparable to a year ago. the number of units sold was 19% lower at 681 homes.
in 2012, capitaland acquired two pieces of land, increasing its residential pipeline to approximately 2,800 units. the first acquisition from ascott reit is a prime mixed development site in cairnhill, where capitaland plans to build about 270 residential units for sale. the second site acquired from the government is an adjoining plot to sky Habitat in Bishan where a 700-unit condominium is planned.
For 2013, the group plans to progressively release new phases at d’leedon and the interlace, and launch a freehold 150-unit seafront condominium project in east coast, and its second Bishan site, subject to market conditions. the group intends to expand its residential pipeline via selective government land tenders as the long-term prospects of the singapore housing market remain attractive.
in the commercial sector, office outlook is cautious over the short-term due to slower economic growth prospects. the situation is, however, mitigated by limited new supply, estimated to be less than one million square feet per annum, within the central Business District (cBD) between 2013 and 2015. the rate of market rental decline within the office sector in the cBD has eased since mid 2012 and is poised for recovery over the next 12 months. capitaland’s income generating commercial and mixed development portfolio is held under our associate, capitacommercial trust (cct). the newly acquired twenty anson contributed to cct’s earnings from March 2012. cct will focus on active portfolio management, capital recycling and yield accretive acquisitions in 2013. the group is positive about capitagreen at Market street and Westgate tower in Jurong east, as both projects are slated for completion in 2014 when new office supply is expected to be low.
as an extension of our singapore business, capitaland has made its maiden direct large scale mixed development investment in Danga Bay a2 island in iskandar, Malaysia. the group will hold a 51% stake in the project and lead in master planning and project management of the approximately 3.1 million square feet of freehold net land. the total gross development value of the project is estimated at MYr8.1 billion (s$3.2 billion) for 11 million square feet of total gross floor area. We envisage a premier waterfront residential development comprising high rise and landed homes on the island, complemented with marina, shopping mall, F&B outlets, offices and serviced residences. Development duration is projected at between 10 to 12 years.
CAPitAlAnD ChinA capitaland china is capitaland’s main business unit for residential, office and mixed development businesses in china.
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the group’s current portfolio of eight raffles city projects in china boasts a portfolio value of s$12.0 billion when completed, and total floor area of over 2.9 million square metres of prime commercial space. these eight raffles city mixed developments span across Beijing, chengdu, ningbo, Hangzhou, shenzhen, chongqing and shanghai.
of the eight raffles city projects, the ones in shanghai, Beijing and ningbo are fully operational, chengdu is slated to be fully operational at the end of 2013, while the remaining four in Hangzhou, shenzhen, changning in shanghai and chongqing, are in various stages of development. the raffles city developments in shanghai and Beijing are performing well, with occupancy exceeding 90%. net property yield on cost for raffles city shanghai and Beijing stood at 15.8% and 11% respectively at the end of 2012. raffles city chengdu and raffles city ningbo commenced mall operations in late september 2012. committed leasing rates of the shopping mall at both chengdu and ningbo are in excess of 80%. on the back of improved net property income (npi) generated for the raffles city portfolio, capitaland registered higher revaluation gains, which mitigated the lower divestment gains from the residential sector.
CAPitAMAllS ASiA cMa is capitaland’s business unit for the shopping mall business. it is listed on the singapore stock exchange and Hong Kong stock exchange.
at the end of 2012, our shopping mall portfolio comprised 101 malls valued at s$31.7 billion. the financial performance of the core retail business improved on its rental income, property and fund management fees, and better leasing commissions, as well as higher divestment gains from the recycling of capitaMall tianfu and capitaMall Meilicheng into a private equity fund. this was, however, partially offset by lower fair value gains from its portfolio revaluation in china.
the singapore shopping mall portfolio comprised 19 malls valued at s$14.8 billion. of the 19 malls, 15 malls are held by our associate capitaMall trust (cMt). the remaining four malls, ion orchard, the star Vista, Bedok Mall and Westgate, are held directly by cMa. in 2012, our malls in singapore registered tenants’ sales growth of 2% while shopper traffic remained stable. core operational earnings from the singapore portfolio were lifted by contributions from the star Vista and Jcube, the two new malls that became operational, as well as Bugis+ and the atrium@orchard, the two malls that successfully underwent asset enhancement in 2012. Divestment gains from the sale of Hougang plaza by cMt also boosted the bottomline.
letter to sHareHolDers
letter to sHareHolDers
s$12.0b portfolio Value
the Group’s current portfolio of eight Raffles City projects in China boasts a portfolio value of s$12.0 billion when completed
At the end of 2012, our shopping mall portfolio comprised 101 malls valued at s$31.7 billion
RAffleS CitY BeiJinG CHINA
CAPitAMAll MeiliChenG ChenGDu CHINA
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in china, cMa opened seven new malls in 2012, lifting its total number of operational malls to 49 out of its total portfolio of 60. this china shopping mall portfolio is valued at s$14.0 billion. in terms of net asset value, 70% of cMa’s retail portfolio has turned operational and is generating rental cash flow. the group’s shopping malls in china performed well in 2012, with tenants’ sales and shopper traffic at cMa’s shopping malls experiencing growth of 9.8% and 7% respectively, compared to 13.2% and 7.5% recorded for 2011. npi grew 16.9% and the average occupancy rate of the shopping malls with at least two years’ operating history was 96.7%. in 2012, cMa’s malls generated gross yield on cost and npi yield on cost of 12.6% and 7.3% respectively, up from 11.8% and 6.8% in 2011.
in Malaysia, cMa’s portfolio comprised five operational malls and one under development, valued at s$1.5 billion. of the operational malls, four are held via our listed associate, capitaMalls Malaysia trust (cMMt), while Queensbay Mall in penang is held by cMa. cMa also participated in its first retail joint development project in Klang Valley, Malaysia with sime Darby. the s$204.5 million (MYr500.0 million) project is expected to offer some 635,000 square feet of retail space when completed in 2016. the group’s Malaysian shopping malls business was lifted by full year contribution from east coast Mall, Kuantan and an overall 7.8% improvement in npi on a same mall basis. the Malaysian mall portfolio experienced shopper traffic growth of 1.5% and a high average occupancy rate of 96.6%.
in Japan, earnings were boosted by maiden contribution from olinas Mall in tokyo and contributions from our increased stakes in three Japanese shopping malls.
in 2013, cMa’s portfolio will benefit from the full year contributions from malls opened in 2012 including the star Vista, Jcube, Bugis+ and the atrium@orchard. the group plans to open six malls in 2013: Westgate and Bedok Mall in singapore; capitaMall tianfu, capitaMall Meilicheng and capitaMall Jinniu phase two in china; and capitaMall Mangalore in india.
ASCott ascott is the largest international owner and manager of serviced residences with more than 31,000 apartment units in asia and europe.
in 2012, for its investment portfolio, ascott acquired (together with capitaland singapore) somerset grand cairnhill for redevelopment into a new serviced residence cum residential development. it also acquired the 230-unit the cavendish london with a view to transform it into a premier ascott branded serviced residence. at the same time, ascott sold two premier assets, ascott raffles place singapore and ascott guangzhou, to its associate ascott reit. ascott also invested about s$20.0 million to refurbish four properties in 2012. separately, ascott reit acquired 60% interest in citadines Kyoto and the 166-unit Madison Hamburg from third parties.
operationally, revenue per available unit (revpau) per day improved 3% from s$115 to s$119 across all serviced residences owned, leased and managed by ascott. the group’s serviced residence portfolio in china, in particular, had a robust year with revpau growth of 15% year-on-year. the group’s european serviced residence portfolio performed well, lifted by maiden contribution from
the cavendish Hotel, which was acquired in 2012, and a fairly resilient uK and French market. the group’s serviced residence portfolio in Japan also showed marked improvement with revpau increase of 17% year-on-year to s$133 per available unit per day.
ascott secured new management contracts on 14 properties with approximately 2,800 apartments. in china, its main growth market, ascott further cemented its market leadership position by expanding the serviced residence portfolio for owned and managed properties to over 8,200 apartment units as at end 2012. overall management and service fee income improved by 5% year-on-year to s$129.7 million.
in the coming year, the group will continue to improve the quality of its serviced residence portfolio through asset enhancement and selective acquisitions. the group will also strengthen its operating performance via active yield management, productivity increase and tighter cost controls. ten properties, comprising some 1,600 apartment units will commence operations in china and indonesia in 2013.
ReGionAl inveStMentS capitaland’s investment in australand, which made up the bulk of our regional investments, accounted for 16% of the group’s assets and 18% of eBit at end 2012. australand’s operations posted a 7.9% year-on-year improvement
letter to sHareHolDers
letter to sHareHolDers
Ascott is the largest international owner and manager of serviced residences with more than 31,000 apartment units in Asia and europe
Ascott secured new management contracts on 14 properties with approximately 2,800 apartments
the CAvenDiSh lonDon UK
31,000 apartment units
the Group’s shopping malls in China performed well in 2012, with tenants’ sales and shopper traffic at CMA’s shopping malls experiencing growth of 9.8% and 7% respectively, compared to 13.2% and 7.5% recorded for 2011
Capitaland’s investment in Australand, which made up the bulk of our regional investments, accounted for 16% of the Group’s assets and 18% of eBiT at end 2012
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in operating eBit, lifted by stronger results from the investment property and residential divisions. the group is currently undertaking a strategic review of its 59.3% stake in australand with a view to optimise shareholder value.
the group has reviewed its current direct investments in Japan and Vietnam, and will maintain its presence in both markets as this is believed to be the optimal approach to maximise value for the investments there. capitaland will continue to review its other regional investments in uK, india, and the gulf cooperation council countries outside the retail and serviced residence space, with the aim to rationalise and optimise its capital productivity in the coming year.
StRAteGiC CAPitAl MAnAGeMent capitaland maintains a healthy balance sheet with a net debt equity ratio of 0.45 and a cash position of s$5.5 billion through prudent capital management and active capital recycling. less than 8.4% of the group’s total debt is due within one year and its average debt maturity profile remains stable at 3.7 years.
the group taps diversified funding sources including banks, capital markets and private equity capital. in september 2012, capitaland successfully raised its first usD bond issue with strong support from about 200 accounts.
the group also successfully set up two private equity funds – the us$1.0 billion capitaMalls china Development Fund iii, and the us$215.0 million capitaland china Value Housing Fund in 2012.
the group’s capital recycling model and prudent capital management will continue to provide a high level of financial flexibility for the group to seek out accretive investments and to manage an uncertain business environment.
DeveloPinG huMAn CAPitAl the group has an integrated human capital strategy to recruit, develop, promote and motivate employees. Based on our philosophy of “Building people”, capitaland actively identifies talents internally and externally to build its pipeline for succession planning and bench strength. capitaland continues to provide training and development opportunities through programmes conducted by capitaland institute of Management and Business (cliMB) and ascott centre for excellence. For senior management who show potential to take up higher office, capitaland offers opportunities for management courses to be pursued at Harvard, stanford, tsinghua and Beijing university. a strong pool of management talents, well-trained, tested and equipped, has been groomed and developed to steer the group to greater heights.
CoRPoRAte SoCiAl ReSPonSiBilitY capitaland has always been committed to being responsible in the communities it operates within. our corporate social responsibility efforts are in the areas of corporate philanthropy, volunteerism, community and the environment. every year, capitaland allocates up to 0.5% of its net profit to capitaland Hope Foundation, the philanthropic arm of capitaland, to support programmes for shelter, education and healthcare needs of underprivileged children in the communities where capitaland operates.
We strive to be an environmentally-sustainable real estate developer and aim to be at the forefront of the industry in terms of green buildings and stakeholder engagement. in 2012, we obtained 20 green building ratings with five projects clinching the prestigious green Mark platinum award given by singapore’s Building and construction authority. We also engage our tenants, shoppers, residents, service-providers and the wider community through our Building a greener Future programme.
BoARD We welcomed tan sri amirsham Bin a aziz and Mr stephen lee who bring with them extensive corporate and business expertise to the Board. We look forward to their counsel and contributions in the years ahead.
letter to sHareHolDers
letter to sHareHolDers
our corporate social responsibility efforts are in the areas of corporate philanthropy, volunteerism, community and the environment
Capitaland actively identifies talents internally and externally to build its pipeline for succession planning and bench strength
the Group also successfully set up two private equity funds – the us$1.0 billion CapitaMalls China Development fund iii, and the us$215.0 million Capitaland China value housing fund in 2012
the inAuGuRAtion of CliMB CHINA
Capitaland maintains a healthy balance sheet with a net debt equity ratio of 0.45 and a cash position of s$5.5 billion through prudent capital management and active capital recycling
s$5.5b cash position
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Mr liew Mun leong who stepped down as president and chief executive officer of capitaland limited on 1 January 2013 and was succeeded by Mr lim Ming Yan, will not be seeking re-election as Director at the forthcoming annual general Meeting. Mr liew has led the group with distinction in the last 12 years, growing it from strength to strength and steering it to chart new frontiers in the real estate industry. on behalf of the Board and staff, we extend to Mr liew our deep appreciation for all his contributions to the group and wish him well in his future endeavours.
GOinG FORWARD looking into 2013, we expect asia to lead world economic growth, with singapore and china playing key roles in the region. singapore is forecasted to post gDp growth of between 1% and 3%, while china’s growth is projected to be about 7.5%.
capitaland will continue to build on its leadership position in the multi-sector real estate businesses to drive its growth strategy. With our strong balance sheet and financial capacity, we remain confident to weather market volatility and are ready for selective acquisitions.
Despite possible economic headwinds, we are confident that the group, led by strong management and armed with a robust balance sheet, will be able to continue growing its businesses into the future.
on behalf of the Board and management, we wish to thank all staff, shareholders, business partners and associates for their continued commitment and support for the group.
nG kee Choe liM MinG YAn ChAiRMAn PReSiDent & GRouP Ceo
28 February 2013
letter to sHareHolDers
letter to sHareHolDers / Year in BrieF
Capitaland will continue to build on its leadership position in the multi-sector real estate businesses to drive its growth strategy
Year in BrieF
RAffleS CitY ChonGqinG CHINA
JAnuARY capitaland, together with capitaMalls asia and singbridge Holdings pte ltd signed a cooperation agreement with the Yuzhong District government in chongqing to develop raffles city chongqing, a landmark mixed development in the heart of Yuzhong District, at an investment of rMB21.1 billion (approximately s$4.3 billion).
capitaMalls asia raised s$400.0 million through an issue of 10-year step-up retail bonds, paying interest of 3.8% per annum for the first five years and 4.5% per annum thereafter if the bonds are not redeemed early. the public offer was approximately 4.65 times subscribed and the placement tranche more than two times subscribed.
capitaland, in partnership with capitaMalls asia and capitaMall trust, broke ground for Westgate, a shopping mall and office tower in singapore’s Jurong gateway. the total gross Floor area is 90,770 square metres.
capitaland ranked in the global 100 Most sustainable corporations in the World, and named in the sustainability
Yearbook 2012 at the World economic Forum. these listings attest to the group’s efforts in integrating sustainability into corporate strategies.
ascott secured a management contract for its first citadines property in surabaya, indonesia – the 288-unit citadines Marvell surabaya. it also strengthened its position in thailand with the opening of the 162-unit Vic3 Bangkok.
ascott residence trust divested somerset gordon Heights Melbourne in australia to a third party at an agreed consideration of a$11.7 million (approximately s$15.3 million).
feBRuARY capitaland, in partnership with capitacommercial trust and Mitsubishi estate asia unveiled the name capitagreen at a groundbreaking ceremony of the development and announced a change of address to 138 Market street. the ceremony was graced by Minister of state for national Development and Manpower, Mr tan chuan-Jin.
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Year in BrieF capitaland launched the year-long Because iCare campaign. the campaign reinforced capitaland’s ‘Building people’ credo and rallied group-wide effort to engage and care for its stakeholders including homebuyers, shoppers, retail and office tenants, serviced residence guests, investors, partners, employees and the community-at-large.
capitaMalls asia acquired the remaining 73.71% stakes each in three malls in Japan – la park Mizue in tokyo, izumiya Hirakata in osaka and coop Kobe nishinomiya-Higashi in Hyogo for about JpY13.2 billion (on a 100% basis).
MARCh capitacommercial trust acquired twenty anson, a two-year old prime office tower for a property price of s$430.0 million.
capitaland organised capitaland Debt investor Day 2012 as part of the group’s overall initiative to reach out to debt investors in singapore. it was attended by over 100 targeted participants.
capitaland’s 235 properties across asia and europe participated in WWF’s earth Hour initiative. this is the fifth year that the group is participating in the annual global sustainability movement to show commitment
Year in BrieF
JCuBe SINGAPORE
towards protecting the environment since many other cities globally adopted the event in 2008.
capitaMalls asia was included as a constituent stock of the Hang seng global composite index and Hang seng Foreign companies composite index. the indices serve as benchmarks for global investors for the performances of all Hong Kong-listed companies and Hong Kong-listed foreign companies respectively.
ascott extended its leadership position in china as the largest international serviced residence owner-operator in the country by securing a contract to manage the 169-unit citadines Jinshang road Xiamen, its first serviced residence in Xiamen.
ascott residence trust expanded its footprint into a new city in Japan by acquiring 60% interest in the 124-unit citadines Karasuma-gojo Kyoto from a third party for a total sum of JpY1.2 billion (approximately s$18.3 million).
APRil capitaland set up the art Management unit to formalise, direct and manage art as a development strategy by integrating art into our buildings.
capitaland successfully launched sky Habitat, the iconic residential development located at Bishan central and designed by internationally-renowned architect, Moshe safdie.
capitaMalls asia opened Jcube, an ultra-hip mall with singapore’s only olympic-size ice rink and first iMaX cinema in the suburbs.
capitaMalls asia acquired a site for capitaMall tiangongyuan, its ninth mall in Beijing, china. the total development cost for the mall is expected to be about rMB2,343.0 million (approximately s$469.2 million).
ascott secured a contract to manage the 290-unit Beverly park residences in Mumbai, india.
capitaMalls asia broke ground for luwan integrated development, which comprises an eight-storey shopping mall and 29-storey office tower in shanghai, china.
MAY Mr s r nathan was appointed as chairman of capitaland Hope Foundation capitaland’s philanthropic arm.
capitaMalls asia and sime Darby property announced their plan to jointly develop a shopping mall on a freehold site in taman Melawati in the Klang Valley, Malaysia, for about rM500.0 million (approximately s$204.5 million). it is capitaMalls asia’s first greenfield development and sixth mall in the country.
capitaMalls asia, together with suzhou industrial park Jinji lake urban Development co., ltd broke ground for the largest shopping mall in east china. this integrated development in suzhou, china will comprise a seven- storey shopping mall and two grade a office towers on a prime site in suzhou centre in the heart of the western cBD of suzhou industrial park. it will be developed at a total cost of about rMB6,740.0 million (approximately s$1,331 million).
June capitaland announced Mr liew Mun leong’s retirement as president & chief executive officer of capitaland group in a year’s time.
ascott divested citadines ashley Hongkong to a third party for HK$311.0 million (approximately s$50.0 million). Following the divestment, the property continued to be leased to and managed by ascott under the citadines brand.
capitaMalls asia established capitaMalls china Development Fund iii (cMcDF iii) with a fund size of us$1.0 billion, its largest private equity fund to date and fourth one in china. the fund will invest in the development of shopping malls and properties predominantly used for retail purposes in china.
JulY capitaMalls asia opened capitaMall taiyanggong in Beijing, china.
capitaMalls asia acquired olinas Mall in tokyo, Japan for JpY22.8 billion (approximately s$367.3 million). the mall is part of a large integrated development which is connected to a residential tower and an office tower. it has a total gross floor area of about 583,000 square feet.
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Management Reports
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the nanshan area, and seamlessly linked to the urban park, the 308,235 square metre mixed development will upgrade the commercial status and boost local growth of the nanshan area.
ascott strengthened its foothold in uK by acquiring an operating 230-unit property known as the cavendish london for £158.8 million (approximately s$311.0 million) – a prime property in london that will subsequently be transformed into a luxurious serviced residence under the premier ascott the residence brand. it also clinched a contract in the philippines to manage the 210-unit citadines Millennium ortigas Manila, its seventh property in the country.
capitaMalls asia issued s$250.0 million of 10-year corporate bonds under the s$2.0 billion euro-Medium term note programme, paying interest of 3.7% per annum.
SePteMBeR capitaland and ascott completed their acquisition of the somerset grand cairnhill singapore following the put-and-call option in July 2012. they will jointly undertake the redevelopment into capitaland’s first integrated development comprising a serviced residence with a hotel licence and a high-end residential development.
capitaland was recognised as a global sustainability leader by Dow Jones World sustainability index 2011/2012 and an asian sector leader in the global real estate sustainability Benchmark (gresB) report 2012. the achievements attest to the group’s efforts in integrating sustainability into corporate strategies.
capitaland expanded its corporate learning and development institute, capitaland institute of Management and Business, to china. it is part of capitaland’s commitment to its credo of “Building people” by promoting core values alignment, strategic workplace learning and leadership development among its over 12,000 staff worldwide.
capitaland treasury limited, a wholly-owned subsidiary of capitaland successfully priced us$ 400 million fixed rate notes due 2022 at a coupon of 4.076%. this was capitaland’s first foray into the usD bond market.
raffles city chengdu, the fourth raffles city development in the group’s international portfolio was launched. the inauguration was graced by Mr lee Hsien loong, the prime Minister of the republic of singapore; Mr Wei Hong, member of the standing committee of the cpc provincial committee and Deputy governor of sichuan province; together with Mr ng Kee choe, chairman of capitaland group and Mr liew Mun leong, president and ceo of capitaland group. the shopping mall attracted a first day shopper crowd of 150,000.
capitaland, in partnership with capitaMalls asia and singbridge Holdings pte ltd held the groundbreaking ceremony for raffles city chongqing.
raffles city ningbo, the fourth raffles city development in china, was opened in the Jiangbei District. With a total investment of rMB1.7 billion (s$355 million), it is connected to Metro line 2 which will be operational in the second half of 2013.
capitaMalls asia acquired site for capitaMall 1818, its third shopping mall in Wuhan, china. the total development cost is expected to be about rMB1,156.0 million (approximately s$228.3 million).
capitaMalls asia opened the star Vista in singapore.
capitaMalls asia opened capitaMall rizhao in rizhao, capitaMall Xuefu in Harbin, capitaMall Wusheng in Wuhan, and capitaMall crystal in Beijing, all in china.
ascott opened the 290-unit Beverly park residences in Mumbai, india and the 314-unit ascott iFc guangzhou in china.
ascott residence trust expanded into germany’s second largest city, Hamburg, through an acquisition of an operating 166-unit property known as Madison Hamburg for a consideration of eur37.5 million (approximately s$59.4 million).
the Wharf residence, a 186-unit residential development located in the prime Mohammed sultan area of singapore obtained top.
capitaland launched the inaugural Because iCare Awards for environment, Health and safety (eHs) to recognise its stakeholders – contractors, tenants, service providers and staff – for their contributions to eHs in capitaland. over 20 companies and individuals received the awards.
capitaMalls asia acquired site for capitaMall Xinduxin, its first shopping mall in Qingdao, china. the total development cost is expected to be about rMB1,457.0 million (approximately s$294.9 million).
capitaland, together with ascott, acquired somerset grand cairnhill singapore at s$359.0 million from ascott residence trust for redevelopment into a new serviced residence and a residential development. it also divested the 146-unit ascott raffles place singapore at s$220.0 million and the 208-unit ascott guangzhou at s$63.5 million to ascott residence trust. ascott clinched a contract to manage its third property in chengdu, china – the 296-unit ascott raffles city chengdu.
AuGuSt capitaland signed a joint venture agreement with Mitsubishi Jisho residence co., ltd. and secoM Home life co., ltd for the joint development of the parkhouse nishi-azabu residence. the 190-unit residential project is located in Minato Ward, tokyo, Japan.
capitaland announced that the capitaland group will relocate to Westgate tower progressively from end 2014. the group will occupy 11 floors, a total of about 160,000 square feet of the new 20-storey prime office tower.
raffles city shenzhen held the groundbreaking ceremony. located at the commercial hub and residential centre of
Year in BrieF
RAffleS CitY ChenGDu CHINA
Year in BrieF
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Year in BrieF oCtoBeR capitaland announced the appointment of Mr lim Ming Yan as its president and group chief executive officer with effect from 1 January 2013. He will take over from Mr liew Mun leong who will relinquish his appointment as group president and ceo from 1 January 2013.
ascott strengthened its leadership position in Vietnam by securing a management contract for the 100-unit somerset Vista Ho chi Minh city and the 168-unit Vista residences.
capitaland acquired a site in shanghai’s pudong District in china for rMB166.29 million (approximately s$33.26 million). the total gFa of approximately 86,200 square metres will be developed into 700 residential units and 15,000 square metres of commercial space.
capitaland and its partners celebrated the topping-out of Mulberry lane, its first residential project in Hanoi, Vietnam.
capitaland established capitaland china Value Housing Fund (ccVHF), its third residential fund in china. With
a fund size of us$215.0 million, the fund will focus on building more affordable home in china.
capitaretail china trust successfully raised s$86.1 million in a private placement which was increased from the original offer of s$75.0 million, due to strong demand from over 30 existing and new investors from asia, the united states and europe.
the s$150 million asset enhancement programme for the revamped plaza singapura in singapore was completed. it aims to foster a seamless and more vibrant shopping experience for shoppers.
noveMBeR a capitaland and Mitsubishi estate asia joint venture successfully bidded for a residential site at Bishan street 14 for s$505.1 million in a government land sales tender. the site will be developed into a condominium with approximately 700 units, and is expected to be launched in the second half of 2013.
capitaMalls asia organised the second edition of retail global connexion in singapore, bringing together over 1,000 retailers and tertiary students to network and be inspired by the tales of successful retailers.
capitastar, capitaMalls asia’s cardless rewards programme for shoppers, was launched in china, starting with four malls in West china.
over 20,000 underprivileged children in singapore, china, Malaysia, Japan and india benefited from a donation of more than s$500,000 under “My schoolbag”, the signature annual corporate social responsibility programme. the donation from capitaland Hope Foundation was used to purchase school and daily necessities.
capitaMall trust raised s$250.0 million equity at an issue price of s$2.00 per unit through a private placement.
ascott secured a contract in china to manage the 177-unit citadines south chengdu, its 10th citadines-branded serviced residence in the country. it also opened the 229-unit ascott Doha in Qatar and the 168-unit Vista residences in Vietnam.
DeCeMBeR Jcube, the newest mall in singapore’s West was officially opened by Dr amy Khor, Minister of state, Ministry of Health and Ministry of Manpower, and Mayor of south West District in singapore.
capitaMall Xindicheng, the first shopping mall developed by capitaMalls asia in Xi’an, commenced operations. it targets middle to high-end retailers and has attracted more than 150 famous brands from china and abroad.
capitaKids programme, a 10-year programme in support of the educational needs of selected underprivileged children, was awarded 2012 excellent csr case by china association of social Workers and china philanthropy times.
capitaland therapy for children project was launched to support underprivileged children with physical disabilities for rehabilitation needs in Beijing, china.
ascott strengthened its position in asia by securing management contracts for the 90-unit ascott Heng shan shanghai, the 250-unit ascott emerald city suzhou and the 194-unit somerset Baitang suzhou in china, and the 181-unit ascott Waterplace surabaya in indonesia. it also opened the 215-unit citadines uplands Kuching in Malaysia and the 100-unit somerset Vista Ho chi Minh city in Vietnam.
Mr Tan Seng Chai, Chief Corporate Officer, CapitaLand Limited and Executive Director, CapitaLand Hope Foundation presented a CapitaLand Hope Foundation publication "Weimingtian" book to encourage a beneficiary of CapitaLand Therapy for Children Project
Year in BrieF
THe WHARF ResiDenCe SINGAPORE
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Management Reports
29
aWarDs & accolaDes
aWarDs & accolaDes
CAPitAlAnD liMiteD BuSineSS exCellenCe • Best Developer in singapore euromoney real estate awards 2012
• Best mixed-use Developer in Singapore
euromoney real estate awards 2012
• Best Residential Developer in Singapore
euromoney real estate awards 2012
• Best investor Relations (Real estate)
ir Magazine south east asia awards 2012
• Best investment Community Meetings
ir Magazine south east asia awards 2012
• Arthur lang, Group CFO Best investor Relations by
a Cfo ir Magazine south east asia
awards 2012
• iR magazine south east Asia Top 25
capitaland limited (3rd place) ir Magazine south east asia
awards 2012
• Best investor Relations Gold Award (Market Cap of
$1 billion & above) singapore corporate awards 2012
• Golden Circle Award (Overall Most transparent Company)
securities investors association (singapore) investors’ choice award 2012
• most Transparent Company Award (Real estate)
securities investors association (singapore) investors’ choice award 2012
• most Organised investor Relations
alpha southeast asia Magazine
• Asset Asia Award 2012 (Real estate) – Platinum
the asset
• included in World Finance 100
• mr liew mun leong outstanding PR Champion prisM awards 2012
SuStAinABilitY • Global 100 most sustainable Corporations in the World (Global 100)
corporate Knights
• Dow Jones sustainability World index 2012
Dow Jones sustainability indexes in collaboration with robecosaM
• Dow Jones sustainability Asia Pacific index 2012
Dow Jones sustainability indexes in collaboration with robecosaM
• The sustainability Yearbook 2012
robecosaM and KpMg international
• strongest Adherence to Corporate Governance
alpha southeast asia Magazine
• Best strategic Corporate Social Responsibility
alpha southeast asia Magazine
• most Admired AseAn enterprise for CSR (large Company)
asean Business awards 2012
• BCA Green mark Champion Award
Building and construction authority, singapore
• Best Community Developer in Singapore
singapore compact csr awards 2012
• Workplace safety and Health Developer Award
Workplace safety and Health council, singapore
CAPitACoMMeRCiAl tRuSt • FTse4Good Global index
• Financing deal of the year (Debt Capital Markets)
cMBs for raffles city (silver oak's us$ 645 million cMBs)
• upgraded from small-cap to mid-cap stock by MSCi
• Added to the msCi Global Standard indices
CAPitAlAnD ChinA • 2011 most influential
foreign enterprise House Weekly
• China Well-known Trademark state administration for industry &
commerce of the people's republic of china
• Ranked as most Valuable Commercial estate in China
the economic observer
• Commercial property with Best investment value in China
the economic observer
• Outstanding Corporate Citizen of China 2012
china association of social Work
CAPitAMAllS ASiA liMiteD • Best Retail Developer in Asia euromoney real estate awards 2012
• Best Retail Developer in China euromoney real estate awards 2012
• Best Retail Developer in Singapore
euromoney real estate awards 2012
• most influential Developer in China
china commercial real estate association
• most Trustworthy enterprise
china influence summit 2012
• Certificate of excellence ir Magazine south east asia
awards 2012
CAPitAMAll tRuSt • FTse4Good Global index
• Best Annual Report (ReiTs & Business trusts) – Gold Award
singapore corporate awards 2012
• Best investor Relations (ReitS & Business trusts) – Gold Award
singapore corporate awards 2012
• singapore Corporate Governance Award (ReiTs) – Winner
securities investors association (singapore) investors’ choice award 2012
• most Transparent Company (Reits & Business trusts) – Runner up
securities investors association (singapore) investors’ choice award 2012
• Certificate of excellence in investor Relations
ir Magazine south east asia awards 2012
• mr Wilson Tan, CeO Capitamall trust Management limited
Brendan Wood international – siAs topGun Ceo Designation Award
securities investors association (singapore) investors’ choice award 2012
the ASCott liMiteD • Best serviced
Apartment Company Business traveller uK awards 2012
• Best serviced Residence Brand in Asia-Pacific
Business traveller asia-pacific awards 2012
• Best serviced Residence Brand in China
Business traveller china awards 2012
• Best serviced Apartment Destinasian readers' choice
awards 2012
• Best serviced Residence operator
ttg travel awards 2012
• Best serviced Residence operator in China
ttg china travel awards 2012
• Green model, innovation Model and Most Popular Brand amongst Business elites
china economy summit 2012
• Best serviced Residence operator in China
china Hotel starlight awards 2012
• 2012 China's most Popular Serviced Residence hotel Brand
9th golden-pillow award of china’s Hotels
• China’s Outstanding Serviced Apartment Brand
Hotel industry Development summit 2012
• Best serviced Residence Group travel Weekly china travel & Meetings
industry awards 2012
• Best Hospitality industry Brand top travel Hospitality industry leaders
awards 2012
• Best Recommended Serviced Apartment
travel + leisure china travel awards 2012
• preferred serviced Apartment (1st)
Human resources’ Hr Vendors of the Year 2012
• Green Achievement (highly Commended)
re:locate awards 2011/2012
• Certificate of excellence Vietnam economic times’ the guide
awards 2011-2012
ASCott ReSiDenCe tRuSt MAnAGeMent liMiteD • Best Annual Report
(ReitS & Business trusts) – Bronze Award
singapore corporate awards 2012
• included in World Finance 100
finAnCiAl PRoDuCtS & SeRviCeS AnD ReGionAl inveStMentS Capitaland vietnam
• BCi Asia Top 10 Developers Award – vietnam
Bci asia top 10 awards 2012
• Golden Dragon Award 2012 Vietnam economic times
Corporate Awards
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Management Reports
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SinGAPoRe • Bedok Residences Green Mark Platinum Building and construction authority,
singapore
• sky Habitat Green Mark GoldPluS
Building and construction authority, singapore
• d'leedon Safety and health Award
Recognition for Projects (ShARP) Award
Workplace safety and Health council, singapore
• The interlace Safety and health Award
Recognition for Projects (ShARP) Award
Workplace safety and Health council, singapore
• The Wharf Residence Safety and health Award
Recognition for Projects (ShARP) Award
Workplace safety and Health council, singapore
• urban Resort Condominium Safety and health Award
Recognition for Projects (ShARP) Award
Workplace safety and Health council, singapore
ChinA • Riverside Ville Green Mark Building and construction authority,
singapore
• The lakeside 1 Star Green Building label Ministry of Housing & urban-rural
Development
• The lakeside Year 2012 Best living environment
Residential Project Wuhan evening newspaper
otheRS • parcspring, Vietnam highly Commended in
high-rise Architecture asia pacific property awards 2012
Shopping Malls
Commercial
Residential Serviced Residences
Mixed Development
SinGAPoRe • CapitaGreen Green Mark Platinum Building and construction authority,
singapore
• six Battery Road Tenant Service Centre
Green Mark GoldPluS Building and construction authority,
singapore
SinGAPoRe • Bedok mall Green Mark Platinum Building and construction authority,
singapore
• Bugis+ Green Mark Platinum Building and construction authority,
singapore
• Bukit panjang plaza Green Mark Gold Building and construction authority,
singapore
• Junction 8 Green Mark Platinum Building and construction authority,
singapore
• lot One shoppers’ mall Green Mark Gold Building and construction authority,
singapore
• plaza singapura Green Mark Gold Building and construction authority,
singapore
• sembawang shopping Centre Green Mark Gold Building and construction authority,
singapore
• The star Vista Most innovative Shopping Centre Mapic awards 2012
ChinA • Capitamall Taiyanggong Community Shopping Centre Award 2012 commercial real estate expo
• Hongkou plaza Regional Shopping Centre Award 2012 commercial real estate expo
• Capitamall Xizhimen China’s Most Progressive Mall Award china commercial real estate association
• luwan integrated development Gold level Pre-Certification
leadership in energy and environmental Design (leeD) Gold Pre-Certification
us green Building council
MAlAYSiA • east Coast mall Green Mark Gold (Provisional) Building and construction authority,
singapore
• Wilkie edge Green Mark Gold Building and construction authority,
singapore
• Wilkie edge 2012 Green Good Design Award the chicago athenaeum and the
european centre for architecture, art, Design and urban studies
SinGAPoRe • Ascott Raffles place singapore Best Serviced Residence in
Asia-Pacific (1st) Business traveller asia-pacific
awards 2012
• somerset liang Court Singapore
Top 15 Hotels in singapore tripadvisor travelers' choice 2012
ChinA • Ascott iFC Guangzhou China’s outstanding
Serviced Apartment Hotel industry Development
summit 2012
MAlAYSiA • Ascott Kuala lumpur Best Serviced Residence
(excellence Award) expatriate lifestyle Best of
Malaysia awards 2012
• somerset Ampang kuala lumpur
top 10 hotels for families in Malaysia
tripadvisor travelers' choice 2012
AuStRAliA • Citadines on Bourke melbourne Apartment/Suite Accommodation
of the Year tourism accommodation australia
(Victoria) state awards for excellence 2012
fRAnCe • Citadines prestige
les halles Paris hotel of the Year (Gold Award) lauriers du Voyage d'affaires 2012
• Citadines prestige saint- Germain-des-Prés Paris
Top 25 Hotels for Families in France tripadvisor travelers' choice 2012
inDoneSiA • Ascott Jakarta Best Serviced Residence in
Asia-Pacific (2nd) Business traveller asia-pacific
awards 2012
• Ascott Jakarta Green Mark (Provisional) Building and construction
authority, singapore
JAPAn • Citadines shinjuku Tokyo Top 25 Trendiest Hotels in Japan tripadvisor travelers' choice 2012
• Citadines Karasuma- Gojo kyoto
top 10 hotels for Service and top 25 Trendiest Hotels in Japan
tripadvisor travelers' choice 2012
uniteD ARAB eMiRAteS • Ascott park place Dubai Top 25 Trendiest Hotels
in the Middle east tripadvisor travelers' choice 2012
uniteD kinGDoM • Citadines prestige Trafalgar square london
Building Research establishment environmental Assessment Method (BReeAM) – very Good
Building research establishment (Bre)
ChinA • Raffles City Changning
(tower 1 and Podium 1) leadership in energy and
environmental Design (leeD) Gold level Pre-Certification
us green Building council
• Raffles City Changning (Tower 2, Tower 3 and podium 3)
leadership in energy and environmental Design (leeD) Certified Pre-Certification
us green Building council
aWarDs & accolaDes
aWarDs & accolaDes
32
Management Reports corporate DirectorY / Financial calenDar
33
corporate DirectorY As at 28 February 2013
Financial calenDar FinAnCiAl YeAR enDeD 31 DeCemBeR 2012
announcement of First Quarter results 30 april 2012
announcement of second Quarter results 1 august 2012
announcement of third Quarter results 30 october 2012
announcement of Full Year results 21 February 2013
annual general Meeting 26 april 2013
Books closing (record Date) 5.00 p.m. on 7 May 2013
Books closure 8 May 2013
proposed payment of 2012 First and Final Dividend 17 May 2013
FinAnCiAl YeAR enDinG 31 DeCemBeR 2013
proposed announcement of First Quarter results april 2013
proposed announcement of second Quarter results July 2013
proposed announcement of third Quarter results october 2013
proposed announcement of Full Year results February 2014
BoARD of DiReCtoRS
ng Kee choe Chairman
peter seah lim Huat Deputy Chairman
lim Ming Yan President & Group Ceo
liew Mun leong James Koh cher siang arfat pannir selvam prof Kenneth stuart courtis John powell Morschel simon claude israel euleen goh Yiu Kiang tan sri amirsham Bin a aziz stephen lee ching Yen
CoMPAnY SeCRetARY
low sai choy
ASSiStAnt CoMPAnY SeCRetARY
ng chooi peng
BoARD CoMMitteeS
Audit Committee euleen goh Yiu Kiang (chairman) James Koh cher siang arfat pannir selvam tan sri amirsham Bin a aziz
investment Committee ng Kee choe (chairman) lim Ming Yan prof Kenneth stuart courtis John powell Morschel simon claude israel
executive Resource and Compensation Committee peter seah lim Huat (chairman) ng Kee choe simon claude israel stephen lee ching Yen
nominating Committee peter seah lim Huat (chairman) ng Kee choe arfat pannir selvam John powell Morschel simon claude israel
finance and Budget Committee peter seah lim Huat (chairman) ng Kee choe lim Ming Yan prof Kenneth stuart courtis
Corporate Disclosure Committee James Koh cher siang (chairman) lim Ming Yan arfat pannir selvam
Risk Committee James Koh cher siang (chairman) euleen goh Yiu Kiang tan sri amirsham Bin a aziz stephen lee ching Yen
ReGiSteReD ADDReSS
168 robinson road #30-01 capital tower singapore 068912 telephone: +65 6823 3200 Facsimile: +65 6820 2202
ShARe ReGiStRAR
M & c services private limited 112 robinson road #05-01 singapore 068902 telephone: +65 6227 6660 Facsimile: +65 6225 1452
AuDitoRS
KpMg llp 16 raffles Quay #22-00 Hong leong Building singapore 048581 telephone: +65 6213 3388 Facsimile: +65 6225 4142 (Engagement Partner since financial year ended 31 December 2010: Leong Kok Keong)
PRinCiPAl BAnkeRS
• Agricultural Bank of China Limited • Australia and New Zealand
Banking group limited • Bank of China • CIMB Bank Berhad • Commonwealth Bank of Australia • Credit Agricole Corporate and
investment Bank • DBS Bank Ltd • Deutsche Bank AG • Industrial and Commercial Bank
of china limited • Mizuho Corporate Bank, Ltd. • National Australia Bank Limited • Oversea-Chinese Banking
corporation limited • Standard Chartered Bank • Sumitomo Mitsui Banking
corporation • The Bank of Tokyo-Mitsubishi
uFJ, ltd. • The Hongkong and Shanghai
Banking corporation limited • United Overseas Bank Limited • Westpac Banking Corporation
34
Management Reports
35
BoarD oF Directors As at 28 February 2013
BoarD oF Directors
nG kee Choe ChAiRMAn inDePenDent non-exeCutive DiReCtoR
PeteR SeAh liM huAt DePutY ChAiRMAn inDePenDent non-exeCutive DiReCtoR
liM MinG YAn PReSiDent & GRouP Chief exeCutive offiCeR exeCutive non-inDePenDent DiReCtoR
lieW mun leOnG exeCutive non-inDePenDent DiReCtoR
ARfAt PAnniR SelvAM inDePenDent non-exeCutive DiReCtoR
PRofeSSoR kenneth StuARt CouRtiS inDePenDent non-exeCutive DiReCtoR
JAMeS koh CheR SiAnG inDePenDent non-exeCutive DiReCtoR
JOHn pOWell mORsCHel inDePenDent non-exeCutive DiReCtoR
SiMon ClAuDe iSRAel non-inDePenDent non-exeCutive DiReCtoR
euleen Goh Yiu kiAnG inDePenDent non-exeCutive DiReCtoR
StePhen lee ChinG Yen inDePenDent non-exeCutive DiReCtoR
tAn SRi AMiRShAM Bin A Aziz inDePenDent non-exeCutive DiReCtoR
36 37
BoarD oF Directors
BoarD oF Directors
nG kee Choe, 68 ChAiRMAn inDePenDent non-exeCutive DiReCtoR Bachelor of Science (Honours), University of Singapore
Date of first appointment as a director: 16 april 2010 Date of appointment as Chairman: 1 May 2012 length of service as a director (as at 31 December 2012): 2 years 8 months
Board committees served on • executive resource and compensation committee (Member) • Finance and Budget committee (Member) • investment committee (Chairman) • nominating committee (Member)
Present Directorships in other listed companies • capitaMalls asia limited (Chairman) (From 25 april 2013) • pt Bank Danamon indonesia, tbk (President-Commissioner) • singapore exchange limited • sp ausnet (Chairman)
Present Principal Commitments (other than Directorships in other listed companies) • Fullerton Financial Holdings pte ltd (Director) • ntuc income insurance co-operative limited (Chairman) • tanah Merah country club (Chairman)
Directorships in other listed companies held over the preceding three years • singapore power limited (Chairman) • singapore airport terminal services limited
Background and Working experience • Vice-chairman of DBs group Holdings ltd (“DBs”) • retired from his executive position in DBs in July 2003
after 33 years of service
Awards • the Meritorious service Medal at the singapore
national Day awards 2012 • the public service star at the singapore national Day
awards 2001
lieW mun leOnG, 66 exeCutive non-inDePenDent DiReCtoR (1) PReSiDent & Chief exeCutive offiCeR (until 31 December 2012) Bachelor of Engineering (Civil), University of Singapore Registered Professional Civil Engineer
Date of first appointment as a director: 1 January 1997 Date of last re-election as a director: 16 april 2010 length of service as a director (as at 31 December 2012): 16 years
Board committees served until 31 December 2012 • corporate Disclosure committee (Member) • Finance and Budget committee (Member) • investment committee (Member) • nominating committee (Member)
Present Directorships in other listed companies • capitaMalls asia limited (Chairman) (until 24 april 2013) • singapore exchange limited
Present Principal Commitments (other than Directorships in other listed companies) • capitaland Hope Foundation (Director) • centre for liveable cities (Advisory Board Member) • changi airport group (singapore) pte ltd (Chairman) • china club investment pte ltd (Chairman) • chinese Development assistance council (trustee) • Human capital leadership institute (Director) • nus Business school (Advisory Board Member) • singapore-china Foundation ltd (Director) • surbana corporation pte ltd (Director)
Directorships in other listed companies held over the preceding three years • ascott residence trust Management limited
(manager of ascott residence trust) (Deputy Chairman) • capitacommercial trust Management limited
(manager of capitacommercial trust) (Deputy Chairman) • capitaMall trust Management limited
(manager of capitaMall trust) (Deputy Chairman) • capitaretail china trust Management limited
(manager of capitaretail china trust) (Deputy Chairman)
Background and Working experience • president & ceo of capitaland group
(november 2000 to 31 December 2012) • Various leadership positions in the public sector and
in the private sector
Awards • the Meritorious service Medal at the singapore
national Day awards 2011 • the outstanding pr champion award by the institute
of public relations of singapore 2012 • one of the top 25 most powerful businesspeople in
asia by Fortune Magazine 2011 • Best ceo in singapore by Financeasia 2011 • asia’s Best executive (singapore) by asiamoney 2008 • Best ceo in asia (property) by institutional investor 2008 • ceo of the Year award (for firms with market value
of s$500 million or more) in the Business times’ singapore corporate awards 2007
• outstanding ceo of the Year in the singapore Business awards 2006
• the public administration Medal by the singapore government in 1979
lim minG YAn, 50 exeCutive non-inDePenDent DiReCtoR PReSiDent & GRouP Chief exeCutive offiCeR (From 1 January 2013) Bachelor of Engineering (Mechanical) and Economics (First Class Honours), University of Birmingham, UK
Date of first appointment as a director: 1 January 2013
Board committees served from 1 January 2013 • corporate Disclosure committee (Member) • Finance and Budget committee (Member) • investment committee (Member)
Present Directorships in other listed companies • capitaMalls asia limited • ascott residence trust Management limited
(manager of ascott residence trust) (Deputy Chairman) • capitacommercial trust Management limited
(manager of capitacommercial trust) (Deputy Chairman) • capitaMall trust Management limited
(manager of capitaMall trust) (Deputy Chairman) • capitaretail china trust Management limited
(manager of capitaretail china trust) (Deputy Chairman) • central china real estate limited
Present Principal Commitments (other than Directorships in other listed companies) • Business china (Director) • capitaland china Holdings pte ltd (Chairman) • capitaland singapore limited
(known as capitaland commercial limited prior to 15 March 2013) (Chairman)
• capitaland Hope Foundation (Director) • capitaland Malaysia pte. ltd. (Chairman) • ctM property trust, steering committee (Chairman) • lFie Holding limited (Co-Chairman) • shanghai YiDian Holding (group) company (Director) • the ascott limited (Chairman)
Directorships in other listed companies held over the preceding three years • lai Fung Holdings limited
Background and Working experience • chief operating officer of capitaland limited
(From May 2011 to December 2012)
• ceo of the ascott limited (From July 2009 to February 2012)
• ceo of capitaland china Holdings pte ltd (From July 2000 to June 2009)
Awards • outstanding ceo (overseas) in the singapore Business
awards 2006 • Magnolia award by the shanghai Municipal government
in 2003 and 2005
PeteR SeAh liM huAt, 66 DePutY ChAiRMAn inDePenDent non-exeCutive DiReCtoR Bachelor of Business Administration (Honours), University of Singapore
Date of first appointment as a director: 18 December 2001 Date of appointment as Deputy Chairman: 1 January 2009 Date of last re-election as a director: 16 april 2010 length of service as a director (as at 31 December 2012): 11 years
Board committees served on • executive resource and compensation committee (Chairman) • Finance and Budget committee (Chairman) • nominating committee (Chairman)
Present Directorships in other listed companies • DBs group Holdings ltd (Chairman) • level 3 communications inc • singapore technologies engineering limited (Chairman)
(until 24 april 2013)
• stats chippac ltd • starHub ltd
Present Principal Commitments (other than Directorships in other listed companies) • asia Mobile Holdings pte ltd (Director) • DBs Bank ltd (Chairman) • DBs Bank (Hong Kong) limited (Chairman) • Defence science technology agency (Board Member) • Fullerton Financial Holdings pte ltd (Director) • government of singapore investment corporation
pte ltd (Director) • lasalle college of the arts limited (Chairman) • singapore Health services pte ltd (Chairman) • stt communications ltd (Deputy Chairman)
Directorships in other listed companies held over the preceding three years • alliance Bank Malaysia Berhad • Bank of china limited • global crossing limited (Deputy Chairman) • sembcorp industries ltd (Chairman)
Background and Working experience • president & ceo of singapore technologies pte ltd
(From 2001 to 2004)
• Joined overseas union Bank (ouB) in 1997 and became president & ceo of ouB (From 1991 to 2001)
Awards • the Distinguished service order at the singapore
national Day awards 2012
Management Reports
(1) Due to retire by rotation at the next Annual General Meeting and will not be seeking re-election.
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39
BoarD oF Directors
BoarD oF Directors
JAMeS koh CheR SiAnG, 67 inDePenDent non-exeCutive DiReCtoR Bachelor of Arts (Honours), Oxford University, UK Master of Arts in Philosophy, Political Science and Economics, Oxford University, UK Master in Public Administration, Harvard University, USA
Date of first appointment as a director: 1 July 2005 Date of last re-election as a director: 25 april 2011 length of service as a director (as at 31 December 2012): 7 years 6 months
Board committees served on • audit committee (Member) • corporate Disclosure committee (Chairman) • risk committee (Chairman)
Present Directorships in other listed companies • capitaMall trust Management limited
(manager of capitaMall trust) (Chairman) • pan pacific Hotels group limited • united overseas Bank limited
Present Principal Commitments (other than Directorships in other listed companies) • capitaland Hope Foundation (Director) • Housing & Development Board (Chairman) • MechanoBiology institute (Chairman) • presidential council for religious Harmony (Member) • singapore island country club (Chairman) • thye Hua Kwan Moral charities limited (Director)
Directorships in other listed companies held over the preceding three years • singapore airlines limited • uol group limited
Background and Working experience • ceo of the inland revenue authority of singapore,
commissioner of inland revenue and commissioner of charities (1997 to 2005)
• permanent secretary in the Ministries of national Development, community Development and education
• served in the Ministries of Finance, national Development, community Development, education and the prime Minister’s office
Awards • the Meritorious service Medal at the singapore
national Day awards 2002 • the public administration Medal (gold) by the
singapore government in 1983
ARfAt PAnniR SelvAM, 67 inDePenDent non-exeCutive DiReCtoR Bachelor of Laws, University of Singapore Advocate & Solicitor
Date of first appointment as a director: 2 January 2006 Date of last re-election as a director: 25 april 2011 length of service as a director (as at 31 December 2012): 7 years
Board committees served on • audit committee (Member) • corporate Disclosure committee (Member) • nominating committee (Member) • risk committee (Member) (2)
Present Directorships in other listed companies • capitaMalls asia limited
Present Principal Commitments (other than Directorships in other listed companies) • Duane Morris & selvam llp (Managing Director) • selvam llc (Managing Director) • asa investment Holdings pte ltd (Director) • Hope Villages Fund pte ltd (Director) • iglobe partners pte ltd (Director) • iglobe partners (ii) pte ltd (Director) • nasDaQ oMX (south east asia & pacific) pte ltd (Director) • priya roshni pte ltd (Director) • selvam corporate services pte ltd (Director) • singapore institute of Directors (fellow) • Muslim Financial planning association (President) • Breast cancer Foundation (vice President) • rahmatan lil’alamin Foundation ltd (Board of
trustees Member) • law society of singapore pro Bono, Management
committee (Chairman)
Background and Working experience • over 40 years experience in legal practice as a corporate
finance lawyer • involved in many landmark singapore M&a transactions
(2) Ceased on 1 February 2013.
PRofeSSoR kenneth StuARt CouRtiS, 67 inDePenDent non-exeCutive DiReCtoR Bachelor Degree, Glendon College, Toronto, Canada Master in International Relations, Sussex University, UK Master of Business Administration, INSEAD (the European Institute of Business Administration) Doctorate with Honours & High Distinction, l’Institut D’Etudes Politiques, Paris
Date of first appointment as a director: 14 February 2007 Date of last re-election as a director: 30 april 2012 length of service as a director (as at 31 December 2012): 5 years 10 months
Board committees served on • Finance and Budget committee (Member) • investment committee (Member)
Present Principal Commitments (other than Directorships in other listed companies) • emerson electric company (Advisory Board Member) • cnooc limited (Advisory Board Member) • the economic strategy institute (Advisory Board Member) • international MBa program, York university
(Advisory Board Member) • asia pacific Foundation of canada (Director) • global advisory council (Member)
(formerly known as McKinsey advisory council)
Directorships in other listed companies held over the preceding three years • cnooc limited • noble group limited
Background and Working experience • ex Managing Director and Vice chairman of goldman
sachs asia • ex Managing Director, chief economist and strategist
of Deutsche Bank group asia • led a number of large, international corporate
transactions centered on asia and pioneered a number of investment banking specialities across the region
JOHn pOWell mORsCHel, 69 inDePenDent non-exeCutive DiReCtoR Diploma in Quantity Surveying, The University of New South Wales
Date of first appointment as a director: 1 February 2010 Date of last re-election as a director: 30 april 2012 length of service as a director (as at 31 December 2012): 2 years 11 months
Board committees served on • investment committee (Member) • nominating committee (Member)
Present Directorships in other listed companies • Australia and New Zealand Banking Group Limited
(Director from 2004 and Chairman from 2010)
Present Principal Commitments (other than Directorships in other listed companies) • australian institute of company Directors (fellow) • australian institute of Management (fellow) • gifford communications pty ltd (Director) • tenix group pty limited (Director)
Directorships in other listed companies held over the preceding three years • rinker group limited (Chairman and Director) (2003 – 2007) • rio tinto limited (Director) (1998 – 2005) • singapore telecommunications limited (Director) (2001 – 2010) • Westpac Banking corporation (Director) (1993 – 2001)
Background and Working experience • executive Director and Managing Director and ceo
of lend lease corporation limited • executive Director of Westpac Banking corporation
limited responsible for the australian consumer and small Business sectors, information technology and property
40
Management Reports
41
BoarD oF Directors
BoarD oF Directors simOn ClAuDe isRAel, 59 non-inDePenDent non-exeCutive DiReCtoR Diploma in Business Studies, The University of the South Pacific, Fiji
Date of first appointment as a director: 1 July 2010 Date of last re-election as a director: 25 april 2011 length of service as a director (as at 31 December 2012): 2 years 6 months
Board committees served on • executive resource and compensation committee (Member) • investment committee (Member) • nominating committee (Member)
Present Directorships in other listed companies • singapore telecommunications limited (Chairman)
Present Principal Commitments (other than Directorships in other listed companies) • lee Kuan Yew school of public policy (Governing
Board Member)
Directorships in other listed companies held over the preceding three years • asia pacific Breweries limited (Chairman) • neptune orient lines limited
Background and Working experience • executive Director of temasek Holdings (private) limited
(From 1 July 2006 to 1 July 2011)
• chairman, asia pacific of the Danone group (From 1 July 2005 to 30 June 2006)
• president (Household & personal care), asia pacific of sara lee corporation
Awards • the Knight in the legion of Honour by the French
government 2007 • the public service Medal at the singapore national
Day awards 2011
euleen GOH Yiu KiAnG, 58 inDePenDent non-exeCutive DiReCtoR Fellow of Institute of Chartered Accountants in England and Wales Fellow of The Chartered Institute of Taxation, UK Fellow of Institute of Certified Accountants of Singapore Fellow of Ifs School of Finance
Date of first appointment as a director: 1 october 2011 Date of last re-election as a director: 30 april 2012 length of service as a director (as at 31 December 2012): 1 year 3 months
Board committees served on • audit committee (Chairman) (3) • risk committee (Member) (4)
Present Directorships in other listed companies • DBs group Holdings ltd • singapore airlines limited
Present Principal Commitments (other than Directorships in other listed companies) • northlight school (Chairman, Board of Governors) • nus Business school (Management Advisory Board Member) • singapore international Foundation (Chairman,
Board of Governors) • DBs Bank ltd (Director) • singapore chinese girls’ school (Chairman)
Directorships in other listed companies held over the preceding three years • aviva plc • singapore exchange limited
Background and Working experience • ceo of standard chartered Bank, singapore
(From 2001 until March 2006)
• Various senior management positions in standard chartered Bank, retiring in March 2006 after some 21 years with the Bank
Awards • the public service star at the singapore national Day
awards 2012 • Her World Woman of the Year 2005 • the public service Medal at the singapore national Day
awards 2005
StePhen lee ChinG Yen, 66 inDePenDent non-exeCutive DiReCtoR Master of Business Administration, Northwestern University, Illinois, USA
Date of first appointment as a director: 1 January 2013
Board committees served from 1 February 2013 • executive resource and compensation committee (Member) • risk committee (Member)
Present Directorships in other listed companies • singapore airlines limited (Chairman) • sia engineering company (Chairman)
Present Principal Commitments (other than Directorships in other listed companies) • council of presidential advisers (Alternate Member) • Dr goh Keng swee scholarship Fund (Director) • national Wages council (Member) • Kidney Dialysis Foundation (Director) • singapore national employers Federation (President) • singapore labour Foundation (Director) • coFco corporation, china (Director) • g2000 apparel (s) pte ltd (Director) • great Malaysia textile investments pte ltd (Managing Director) • shanghai commercial and savings Bank ltd,
taiwan (Managing Director) • shanghai commercial & savings Bank ltd,
Hong Kong (Director) • slF strategic advisers private limited (Director)
Directorships in other listed companies held over the preceding three years • Baosteel group corporation, shanghai • Fraser and neave limited
Background and Working experience • chairman of international enterprise singapore
(formerly known as tDB) • chairman/advisor of psa international pte ltd • chairman of singapore Business Federation
Awards • the Distinguished service order at the singapore
national Day awards 2006 • the public service star at the singapore national Day
awards 1998
tAn SRi AMiRShAM Bin A Aziz, 62 inDePenDent non-exeCutive DiReCtoR Bachelor of Economics (Honours), The University of Malaya Certified Public Accountant
Date of first appointment as a director: 30 July 2012 length of service as a director (as at 31 December 2012): 5 months
Board committees served on • audit committee (Member) (5) • risk committee (Member) (5)
Present Directorships in other listed companies • capitaMalls asia limited • lingui Developments Berhad
Present Principal Commitments (other than Directorships in other listed companies) • Destination resorts & Hotels sdn Bhd • Malaysian investment Development authority • petroliam nasional Berhad • pulau indah Ventures sdn Bhd • samling global limited • starchase Motorsports limited • themed attractions & resorts sdn Bhd
Background and Working experience • executive Director of Malayan Banking Berhad
(From 1994 to 2008)
• Minister in the Malaysian prime Minister’s Department heading the economic planning unit and Department of statistics (From March 2008 to april 2009)
• chairman of the Malaysian national economic advisory council (From 1 June 2009 to 31 May 2011)
Awards • global Hall of Fame by the international association of
outsourcing professionals 2009 • the asian Bankers lifetime achievement award 2008
(3) Appointed as Chairman on 30 April 2012. (4) Appointed on 30 April 2012.
(5) Appointed on 15 August 2012.
42
Management Reports
43
eXecutiVe ManageMent council As at 28 February 2013
eXecutiVe ManageMent council
liM MinG YAn PReSiDent & GRouP Ceo capitalanD liMiteD
olivieR liM GRouP DePutY Ceo capitalanD liMiteD
ARthuR lAnG GRouP Chief finAnCiAl offiCeR capitalanD liMiteD
tAn SenG ChAi GRouP Chief CoRPoRAte offiCeR capitalanD liMiteD
JAsOn leOW Ceo capitalanD cHina
liM BenG Chee Ceo capitaMalls asia liMiteD
Wen KHAi menG Ceo capitalanD singapore
ChonG kee hionG Ceo tHe ascott liMiteD
Chen liAn PAnG Ceo capitalanD VietnaM
ChonG lit CheonG Ceo regional inVestMents, capitalanD liMiteD
WOnG HeAnG Fine Ceo resiDential, capitalanD singapore
MARGARet Goh Ceo special proJects, capitalanD singapore
44
Management Reports
45
eXecutiVe ManageMent council
eXecutiVe ManageMent council liM MinG YAn PReSiDent & GRouP Ceo, CAPitAlAnD liMiteD (From 1 January 2013)
Chief oPeRAtinG offiCeR (until 31 December 2012)
Mr lim Ming Yan is president and group chief executive officer of capitaland limited. prior to this, he was the chief operating officer of capitaland limited. He joined the capitaland Board as Director on 1 January 2013.
Mr lim is chairman of capitaland residential singapore pte ltd, capitaland china Holdings pte ltd, the ascott limited, capitaland singapore limited (known as capitaland commercial limited prior to 15 March 2013), capitaland Malaysia pte ltd and capitaland Financial limited. He is also Deputy chairman of capitaMall trust Management limited, capitacommercial trust Management limited, capitaretail china trust Management limited and ascott residence trust Management limited.
Mr lim is chairman of capitaland china executive committee and capitaland Vietnam executive committee. the committees co-ordinate and align capitaland’s investments, operations, branding and resources in china and Vietnam. He is also a Director of capitaland Hope Foundation, the group’s philanthropic arm.
Mr lim was the chief executive officer of the ascott limited from July 2009 to February 2012. prior to joining ascott, Mr lim was the chief executive officer of capitaland china Holdings pte ltd from november 2000 to June 2009, responsible for growing capitaland into a leading foreign real estate developer in china.
Mr lim was named outstanding chief executive (overseas) at the singapore Business awards 2006. He was also conferred the prestigious Magnolia award by the shanghai Municipal government in 2003 and 2005 for his significant contributions to shanghai.
Mr lim obtained first class honours in Mechanical engineering and economics from the university of Birmingham, united Kingdom in 1985. He attended the advanced Management program at Harvard Business school in 2002.
olivieR liM GRouP DePutY Ceo, CAPitAlAnD liMiteD (From 3 January 2013)
GRouP Chief inveStMent offiCeR, CAPitAlAnD liMiteD (until 2 January 2013)
heAD of StRAteGiC CoRPoRAte DeveloPMent, CAPitAlAnD liMiteD (until 5 February 2012)
Mr olivier lim is the group Deputy chief executive officer of capitaland limited. He is concurrently the non-executive chairman of australand Holdings limited, and a non-executive director of capitaMalls asia limited, raffles Medical group ltd and neptune orient lines limited. Mr lim also serves as a board member of sentosa Development corporation, and as the non-executive chairman of its subsidiary, Mount Faber leisure group pte ltd.
Mr lim’s prior positions in capitaland were as group chief investment officer until 2 January 2013, Head of strategic corporate Development until 5 February 2012, and group chief Financial officer for six years until 2011. prior to joining capitaland limited in 2003, he was Director and Head of the real estate unit, corporate Banking in citibank singapore.
Mr lim was awarded Best investor relations by a cFo by ir Magazine for south east asia for 2009, 2010 and 2011, and pan-asia for 2011. He was named cFo of the Year by the asset magazine in its 2010 asian awards. He was also named cFo of the Year in 2007 (for firms with market value of s$500 million or more) in the Business times’ singapore corporate awards.
Mr lim holds a First class Honours degree in civil engineering from imperial college, london.
ARthuR lAnG GRouP Chief finAnCiAl offiCeR, CAPitAlAnD liMiteD
Mr arthur lang is the group chief Financial officer of capitaland limited. in his current role, he has direct oversight of the functions of the treasury, financial reporting and controls, risk management, corporate finance, tax and investor relations departments of capitaland. He also looks after the administrative matters of the internal audit department.
prior to joining capitaland, he was co-head of the southeast asia investment banking division for Morgan stanley where he spearheaded the client coverage and transaction execution efforts across southeast asia.
prior roles Mr lang held at Morgan stanley also included the chief operating officer for the asia pacific investment banking division where he was based in Hong Kong.
Mr lang is also a board member of the land transport authority of singapore and tiger airways Holdings limited.
Mr lang was awarded the Best investor relations by a cFo at the ir Magazine south east asia awards 2012.
Mr lang has an MBa from the Harvard Business school and a Ba in economics (magna cum laude) from Harvard university.
tAn SenG ChAi GRouP Chief CoRPoRAte offiCeR, CAPitAlAnD liMiteD (From 3 January 2013)
DePutY Chief CoPoRAte offiCeR, CAPitAlAnD liMiteD (until 2 January 2013)
Mr tan seng chai is group chief corporate officer of capitaland limited. prior to this, he was Deputy chief corporate officer and chief Human resource officer of capitaland limited.
Mr tan oversees the group’s corporate functions including Human resource, organisational Development, information technology, corporate communications, corporate Marketing, legal & company secretariat, operations compliance unit, office administration and corporate security & investigation. Mr tan is also the executive Director of capitaland Hope Foundation, the philanthropic arm of capitaland.
prior to joining the group, Mr tan was with chartered semiconductor Manufacturing ltd, singapore for 12 years. He held key positions in the company including heading its worldwide human resource organisation as well as overseeing key project implementation and strategic investment activities.
an engineer by training, Mr tan started his career with national semiconductor Manufacturer singapore pte ltd as a process engineer and subsequently became the company’s Human resource Manager. He continued his career progression to head the human resource function at creative technology ltd, singapore before joining chartered semiconductor Manufacturing ltd.
Mr tan holds an honours degree in civil & structural engineering and a Master of science degree in industrial & system engineering from the national university of singapore.
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Management Reports
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eXecutiVe ManageMent council
eXecutiVe ManageMent council
Wen KHAi menG Ceo, CAPitAlAnD SinGAPoRe (From 3 January 2013)
Ceo, CAPitAlAnD finAnCiAl liMiteD (until 2 January 2013)
Chief inveStMent offiCeR, CAPitAlAnD liMiteD (until 5 February 2012)
Mr Wen Khai Meng is the chief executive officer of capitaland singapore. He is also a non-executive Director of capitacommercial trust Management limited and Quill capita Management sdn. Bhd.
prior to this, Mr Wen has held several senior appointments within the group including chief investment officer of capitaland limited, chief executive officer of capitaland commercial limited and chief executive officer of capitaland Financial limited. He was also a non-executive Director of ascott residence trust Management limited. Before joining the group, Mr Wen was with the Ministry of national Development, singapore.
Mr Wen holds a Master of Business administration and a Master of science in construction engineering as well as a Bachelor of engineering (First class Honours).
JAsOn leOW Ceo, CAPitAlAnD ChinA (From 3 January 2013)
Ceo, CAPitAlAnD ChinA holDinGS Pte ltD (until 2 January 2013)
Mr Jason leow is the chief executive officer of capitaland china. Mr leow has been chief executive officer of capitaland china Holdings pte ltd since 2009.
Mr leow has been with capitaland from 1994 and has over 19 years of experience in china. He has held several appointments within the group, including general Manager of Business Development, general Manager of corporate services and Deputy chief executive officer of capitaland china Holdings.
prior to joining capitaland, he was a senior financial analyst at st aerospace ltd and also spent three years at DBs Finance ltd.
Mr leow is a certified public accountant and a member of the institute of certified public accountants of singapore. He obtained an executive Master in Business administration degree from Fudan university and also attended the advanced Management program at Harvard Business school in 2007.
liM BenG Chee Ceo, CAPitAMAllS ASiA liMiteD
Mr lim Beng chee is the chief executive officer and executive Director of capitaMalls asia limited. He has more than 10 years of real estate investment and asset management experience.
Mr lim previously held various positions within capitaland, including chief executive officer of capitaMall trust Management limited and capitaretail china trust Management limited. Mr lim has played an instrumental role in the creation of capitaMalls asia’s retail real estate funds and retail real estate investment trusts (reits).
Mr lim holds a Master of Business administration (accountancy) from the nanyang technological university of singapore and a Bachelor of arts in physics (Honours) from the university of oxford, united Kingdom.
ChonG kee hionG Ceo, the ASCott liMiteD (From 6 February 2012)
Ceo, ASCott ReSiDenCe tRuSt MAnAGeMent liMiteD (until 5 February 2012)
Mr chong Kee Hiong is the chief executive officer of the ascott limited. He was the chief executive officer of ascott residence trust Management limited from March 2006 to February 2012. Before joining ascott, Mr chong was the chief Financial officer of raffles Holdings limited.
Mr chong is the president of the general committee of orchid country club and is a Director of slF leisure enterprises (pte) ltd and pasir ris resort pte ltd. He also sits on the audit committee of sentosa Development corporation.
Mr chong holds a Bachelor of accountancy degree from the national university of singapore and is a member of the institute of certified public accountants of singapore. He completed Harvard Business school’s advanced Management program in 2008.
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Management Reports
49
eXecutiVe ManageMent council
eXecutiVe ManageMent council
Chen liAn PAnG Ceo, CAPitAlAnD vietnAM (From 3 January 2013)
Ceo, CAPitAvAlue hoMeS liMiteD (until 2 January 2013)
Mr chen lian pang is the chief executive officer of capitaland Vietnam. Mr chen was the chief executive officer of capitaValue Homes limited until 2 January 2013.
in his 16 years of service with capitaland, Mr chen has held various positions within the group where he was responsible for the company’s operations in southeast asia. He was instrumental in the setting up t.c.c. capital land ltd in thailand in 2003 and capitaland Vietnam Holdings in Vietnam in 2007.
Mr chen has 30 years of construction and real estate experience both in singapore and overseas. He started his career with the Housing and Development Board of singapore. He had overseen the development of both commercial and residential projects, including capital tower in singapore, raffles city shanghai in china, Westlake international Hotel in Hanoi, Vietnam (now the sofitel plaza Hanoi) and a luxury condominium, suasana sentral in Kuala lumpur, Malaysia.
Mr chen holds a Master of science in civil engineering from the national university of singapore and a Bachelor of science in civil engineering (First class Honours) from the university of cardiff, united Kingdom. He completed the general Management program at Harvard Business school and an international Business Fellowship executive programme with tsinghua university in 2000 and 2011 respectively. He is also a registered professional engineer.
ChonG lit CheonG Ceo, ReGionAl inveStMentS, CAPitAlAnD liMiteD (From 3 January 2013)
Ceo, CAPitAlAnD CoMMeRCiAl liMiteD (until 2 January 2013)
Mr chong lit cheong is the chief executive officer, regional investments of capitaland limited. He was appointed as Director of surbana corporation pte ltd (surbana), a 40%-owned associate company of capitaland, in 2012. Mr chong was the chief executive officer of capitaland commercial limited until 2 January 2013.
prior to joining the group, Mr chong was the chief executive officer of international enterprise singapore, an agency under singapore’s Ministry of trade and industry which promotes the overseas growth of singapore-based enterprises and international trade. prior to that, he was the chief executive officer of Jtc corporation and Managing Director of national science and technology Board (now called a*star). He had previously served in singapore’s economic Development Board where he was posted to suzhou, china, to lead the development of the china-singapore suzhou industrial park project.
Mr chong is a Mombusho (colombo plan) scholar and holds a Bachelor of engineering (electronic) from the university of tokyo. He also completed an advanced Management programme at inseaD in France in 1994 and the tsinghua executive program in shanghai, china, in 2004.
WOnG HeAnG Fine Ceo, ReSiDentiAl, CAPitAlAnD SinGAPoRe (From 3 January 2013)
Ceo, CAPitAlAnD ReSiDentiAl SinGAPoRe Pte ltD (until 2 January 2013)
Mr Wong Heang Fine is the chief executive officer of residential, capitaland singapore.
Mr Wong was the chief executive officer of capitaland ilec pte. ltd. He was also in charge of capitaland’s business in the gulf cooperation council (gcc) region. Mr Wong was the president of the real estate Developers’ association of singapore (reDas) until end Jan 2013.
prior to joining capitaland, Mr Wong was president and ceo of sembcorp engineers and constructors, the largest engineering and construction company in southeast asia. He also has varied experience in the leisure and entertainment industries.
Mr Wong holds a Master of science in engineering production & Management from the university of Birmingham, uK and a Bachelor of science in Mechanical engineering (First class Honours) from the university of leeds, united Kingdom.
MARGARet Goh Ceo, SPeCiAl PRoJeCtS, CAPitAlAnD SinGAPoRe (From 3 January 2013)
Ceo, SPeCiAl PRoJeCtS, CAPitAlAnD liMiteD (until 2 January 2013)
Ms Margaret goh is the chief executive officer, special projects of capitaland singapore. she is in charge of capitaland’s development business in Malaysia as well as support cross-sBu projects. this includes overseeing joint venture projects between temasek and Khazanah where capitaland has been appointed as the project manager.
Ms goh joined capitaland in april 2012. prior to joining capitaland, she was the chief executive officer of ntuc choice Homes co-operative limited since 2007. earlier, she was the general Manager of sentosa cove pte ltd. Ms goh has also served in city Developments ltd, pontiac Marina pte ltd and Hong leong Holdings ltd.
Ms goh holds a Bachelor of land economics (First class) from the university of technology, sydney.
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51
corporate oFFice
corporate oFFice
lieW mun leOnG PReSiDent & Ceo (until 31 December 2012)
liM MinG YAn Chief oPeRAtinG offiCeR (until 31 December 2012)
PReSiDent & GRouP Ceo (From 1 January 2013)
Wen KHAi menG Chief exeCutive offiCeR capitalanD Financial liMiteD (until 2 January 2013)
tAn SenG ChAi DePutY Chief CoRPoRAte offiCeR (until 2 January 2013)
GRouP Chief CoRPoRAte offiCeR (From 3 January 2013)
Chief exeCutive offiCeR capitalanD singapore (From 3 January 2013)
olivieR liM Chief inveStMent offiCeR (until 2 January 2013)
ARthuR lAnG GRouP Chief finAnCiAl offiCeRGRouP DePutY Ceo
(From 3 January 2013)
not PhotoGRAPheD
AnDRe liM viCe PReSiDent MarKet & strategY insigHt anD corporate planning
AnGeline oh SenioR viCe PReSiDent HuMan resource
AnnA Choo SenioR viCe PReSiDent treasurY
AnthonY SeAh Chief of teChniCAl SeRviCeS
BelinDA GAn GRouP finAnCiAl ContRolleR
BoAz Boon SenioR viCe PReSiDent MarKet & strategY insigHt (cHina) unit
ChYe Moi June heAD group taX
FRAnCis WOnG HOOe WAi Chief of ARt MAnAGeMent
HAROlD WOO SenioR viCe PReSiDent inVestor relations
huBeRt lADStAtteR SenioR viCe PReSiDent risK ManageMent
lee tionG PenG SenioR viCe PReSiDent capitalanD institute oF ManageMent & Business
leonG Soon PenG Chief teChnoloGY offiCeR
leOW sieW BenG SenioR viCe PReSiDent HuMan resource (organisational DeVelopMent)
liM Soo Gee heAD corporate securitY & inVestigation
loRnA tAn SenioR viCe PReSiDent corporate coMMunications
lOW sAi CHOY SenioR viCe PReSiDent legal/coMpanY secretarY
MoniCA ChiA SenioR viCe PReSiDent group internal auDit
Poon hin konG CHieF OF DesiGn ReVieW uniT
ShARon SnG SenioR viCe PReSiDent corporate Finance
tAn Bee lenG viCe PReSiDent corporate MarKeting & corporate social responsiBilitY
tinG tonG koi SenioR viCe PReSiDent operations coMpliance unit
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Corporate Governance corporate goVernance report
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corporate goVernance report capitaland limited (the “company”) observes high standards of corporate conduct in line with the principles of the code of corporate governance (“code”). the code was revised by the Monetary authority of singapore in May 2012 and although it takes effect only for companies in respect of annual reports relating to financial years commencing from 1 July 2012, the company has revised its policies and practices (including its Board charter and terms of reference of its Board committees) to adhere to the revised code. Where there is any material deviation, an explanation has been provided within this report.
the company believes in developing and maintaining sound and transparent policies and practices to meet its business needs as a trusted and respected business enterprise. it remains focused on the substance and spirit of the principles of the revised code while achieving operational excellence and delivering the group’s long term strategic objectives.
this report on the company’s corporate governance practices for financial year 2012 describes its application of good governance principles in building a company committed to integrity, excellence and its people. the application is underpinned by sound and robust systems of internal controls and accountability to promote and drive long-term sustainable growth and shareholder value.
the following sections covering each of the principles of the revised code outlines the company’s policies and practices.
(A) BoARD MAtteRS Principle 1: the Board’s Conduct of Affairs
the company is led by an effective Board comprising a majority of independent non-executive Directors. each Director brings to the Board his skills, experience, insights and sound judgement, which together with strategic networking relationships, serves to further the interests of the company. at all times, the Directors are collectively and individually obliged to act in good faith and consider the best interests of the company.
the Board oversees the affairs of the company and is collectively responsible for the long-term success of the company. the Board works with Management to achieve this objective and Management remains accountable to the Board.
the Board has adopted a Board charter setting forth the duties and responsibilities of the Board. these include:
(a) approving the broad policies, strategies and objectives of the group;
(b) approving annual budgets, major funding, including capital management proposals, investment and divestment proposals;
(c) reviewing at least annually the adequacy and effectiveness of the group’s risk management and internal control systems including establishing risk appetite and parameters, and internal control systems including financial, operational, compliance and information technology controls;
(d) reviewing succession plans for Directors and recommending their appointment for shareholders’ approval;
(e) reviewing the appointment of and succession plans for the chief executive officer (“ceo”);
(f) recommending Board compensation for shareholders’ approval;
(g) approving compensation framework and specific remuneration packages of ceo and key management personnel; and
(h) appointing and removing the company secretary. specific matters which are reserved for the Board’s approval include:
(a) material acquisitions, investments, disposals and divestments;
(b) corporate and financial restructuring; (c) share issuances, dividends and other returns to
shareholders; (d) the targets for and assessing the performance of the
ceo and determining the compensation package for the ceo; and
(e) matters which involve a conflict of interest for a substantial shareholder or a Director.
the Board has adopted a set of internal controls which sets out approval limits for capital expenditure, investments and divestments, bank borrowings and signatories of cheques at Board level. approval sublimits are also provided at Management levels to facilitate operational efficiency.
the Board meets regularly to review the key activities and business strategies of the group, at least once every quarter, and as required by business imperatives. prior to the start of each Board Meeting, the non-executive Directors would meet without the presence of Management.
a total of seven Board meetings was held in 2012.
to assist the Board in the discharge of its oversight functions, various Board committees, namely audit committee (“ac”), corporate Disclosure committee (“cDc”), executive resource and compensation committee (“ercc”), Finance and Budget committee (“FBc”), investment committee (“ic”), nominating committee (“nc”) and risk committee (“rc”) have been constituted with clear written terms of reference. other Board committees may be formed as dictated by business imperatives. Membership of the various Board committees is carefully managed to ensure an equitable distribution of responsibility among Board members, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are considered. the company has also taken steps to ensure that there are appropriate checks and balances in the compositions of the various Board committees.
the membership of the Board committees is set out on page 68 of this report.
a table showing the attendance record of Directors at Board and Board committee meetings during the year is set out on page 69 of this report. We believe in the manifest contribution of our Directors beyond attendance at formal Board and Board committee meetings.
the company is responsible for arranging the training of Directors.
newly appointed Directors are given briefings by Management to orientate them on the strategic objectives and business activities of the group. arrangements are also made for the newly appointed Directors to visit the company’s properties and development sites both in singapore and overseas.
upon appointment, each Director is briefed and provided with a formal letter setting out the Director’s duties and obligations. Directors are expected to exercise independent judgement in the best interests of the company. Directors are also briefed and provided with relevant information on the company’s policies and procedures relating to corporate conduct and governance
including disclosure of interests in securities, prohibitions on dealings in the company’s securities, restrictions on disclosure of price sensitive information and the disclosure of interests relating to certain property transactions.
the Directors are provided with opportunities for continuing education in areas such as Directors’ duties and responsibilities, corporate governance, changes in financial reporting standards, insider trading, changes in the companies act, the listing rules of the listing Manual of the singapore exchange securities trading limited (“sgX-st”) and the code, and industry-related matters, so as to update them on matters that affect or may enhance their performance as Board or Board committee members.
training provided to new and existing Directors in 2012 included:
(a) update on new property measures by the authorities; (b) recent changes to the listing rules of the listing Manual
of the sgX-st; (c) code of corporate governance 2012; (d) new notification regime for substantial shareholders/
unitholders and Directors and ceos under the securities and Futures act (“sFa”); and
(e) a case study on non-disclosure offences under the sFa.
Principle 2: Board Composition and Guidance
the Board comprises 12 Directors with 10 non-executive Directors as at 28 February 2013. profiles of the Directors are provided on pages 34 to 41 of the annual report.
in financial year 2012, Dr Hu tsu tau, Mr richard edward Hale and Dr Fu Yuning stepped down from the Board on 30 april 2012. tan sri amirshim bin aziz joined the Board on 30 July 2012
Mr lim Ming Yan and Mr stephen lee joined the Board on 1 January 2013.
Mr ng Kee choe was appointed non-executive chairman on 1 May 2012. He brings with him a wealth of experience in finance and banking and listed company experience in singapore and australia.
Mr lim Ming Yan, the president & group ceo, is the executive Director. He succeeded Mr liew Mun leong who was president and ceo, from 1 January 2013.
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corporate goVernance report the Directors are business leaders and professionals with financial, banking, real estate, tax, legal, economics, investment, accounting and manufacturing backgrounds. Management has benefitted from their diverse experience and perspectives on issues brought before the Board. the Board and Management interacts formally and informally. this, together with the separation of the role of the chairman and the ceo, provides a healthy professional relationship between the Board and Management with clarity of roles.
the Board has established the nc which recommends to the Board, the appointments to the Board and Board committees and the independence of the Directors. the nc has recommended and the Board has determined that nine of the 10 non-executive Directors were independent in the financial year 2012. For the purposes of the determination, the non-executive Directors have provided declarations of their independence which were deliberated upon by the nc and the Board.
the Board has determined that Mr ng Kee choe be considered independent as he has demonstrated independence in character and judgement in the discharge of his responsibilities as a Director of the company and there are no relationships or circumstances that are likely to affect, or could appear to affect, his judgement based on his declaration received.
the Board has determined that Mr peter seah lim Huat be considered independent notwithstanding that he has served on the Board beyond nine years as he has continued to demonstrate strong independence in character and judgement in the discharge of his responsibilities as a Director of the company. He has continued to express his individual viewpoints, debated issues and objectively scrutinised and challenged Management. He has sought clarification and amplification as he deemed required, including through direct access to the group’s employees and external advisors. Based on his declaration received, Mr seah has no association with Management that could compromise his independence.
the Board has determined that Mr seah be considered independent notwithstanding that he is chairman of DBs Bank as (i) the threshold of s$200,000 recommended in guideline 2.3(d) of the code for payments made by the group to DBs Bank was not significant compared with the overall payments made by the group in the financial year 2012, (ii) the services received by the group from DBs Bank was not material in the context of all the
financial advisory and related services that the group had received from its other banks and (iii) Mr seah is required under the company’s policy to recuse himself from any transaction with DBs Bank or any matter that might give rise to a conflict of interest with DBs Bank and would abstain from voting on such proposals at the Board meetings. Based on his declaration received, there are no other relationships or circumstances that are likely to affect, or could appear to affect Mr seah’s judgement.
the Board has determined that Mr James Koh cher siang be considered independent notwithstanding that he is a Director of united overseas Bank (“uoB”) as (i) the threshold of s$200,000 recommended in guideline 2.3(d) of the code for payments made by the group to uoB was not significant compared with the overall payments made by the group in the financial year 2012, (ii) the services received by the group from uoB was not material in the context of all the financial advisory and related services that the group had received from its other banks and (iii) Mr Koh is required under the company’s policy to recuse himself from any transaction with uoB or any matter that might give rise to a conflict of interest with uoB and would abstain from voting on such proposals at Board meetings. Mr Koh has also demonstrated independence in character and judgement in the discharge of his responsibilities as a Director of the company and there are no other relationships or circumstances that are likely to affect, or could appear to affect, his judgement based on his declaration received.
the Board has determined that Mrs arfat pannir selvam be considered independent notwithstanding that she is a Director of the company’s listed subsidiary, capitaMalls asia limited (“cMa”) as (i) the threshold of s$200,000 recommended in guideline 2.3(d) of the code for payments made by cMa to the company was not significant compared with the revenues received by the group in the financial year 2012, (ii) the payments received by the group from cMa for the corporate support services supplied were interested person transactions (“ipts”) from cMa’s perspective and would be on normal commercial terms since ipts were regulated by chapter 9 of the listing Manual of sgX-st, (iii) the corporate support services supplied were not material to the group’s business and (iv) Mrs selvam is required under the company’s policy to recuse herself from any transaction with cMa or any matter that might give rise to a conflict of interest with cMa and would abstain from voting on such proposals at Board meetings. Mrs selvam
has also demonstrated independence in character and judgement in the discharge of her responsibilities as a Director of the company and there are no other relationships or circumstances that are likely to affect, or could appear to affect, her judgement based on her declaration received.
the Board has determined that prof Kenneth stuart courtis be considered independent as he has demonstrated independence in character and judgement in the discharge of his responsibilities as a Director of the company and there are no relationships or circumstances that are likely to affect, or could appear to affect, his judgement based on his declaration received.
the Board has determined that Mr John powell Morschel be considered independent notwithstanding that he is Chairman of Australia and New Zealand Banking Group (“ANZ Bank”) as (i) the threshold of S$200,000 recommended in guideline 2.3(d) of the code for payments made by the Group to ANZ Bank was not significant compared with the overall payments made by the group in the financial year 2012, (ii) the services received by the Group from ANZ Bank was not material in the context of all the financial advisory and related services that the group had received from its other banks and (iii) Mr Morschel is required under the company’s policy to recuse himself from any transaction with ANZ Bank or any matter that might give rise to a conflict of interest with ANZ Bank and would abstain from voting on such proposals at Board meetings. Mr Morschel has also demonstrated independence in character and judgement in the discharge of his responsibilities as a Director of the company and there are no other relationships or circumstances that are likely to affect, or could appear to affect, his judgement based on his declaration received.
Mr simon claude israel retired as executive Director of temasek Holdings (private) limited (“temasek”) on 1 July 2011. as temasek is not a related company of the company, he could technically be considered an independent Director under the code. However as temasek is the company’s major shareholder, the Board has determined that Mr israel be considered non-independent until the next annual review of the Directors’ independence.
the Board has determined that Ms euleen goh Yiu Kiang be considered independent notwithstanding that she is Director of DBs Bank as (i) the threshold of s$200,000
recommended in guideline 2.3(d) of the code for payments made by the group to DBs Bank was not significant compared with the overall payments made by the group in the financial year 2012, (ii) the services received by the group from DBs Bank was not material in the context of all the financial advisory and related services that the group had received from its other banks and (iii) Ms goh is required under the company’s policy to recuse herself from any transaction with DBs Bank or any matter that might give rise to a conflict of interest with DBs Bank and would abstain from voting on such proposals at Board meetings. Ms goh has also demonstrated independence in character and judgement in the discharge of her responsibilities as a Director of the company and there are no other relationships or circumstances that are likely to affect, or could appear to affect, her judgement based on her declaration received.
the Board has determined that tan sri amirsham Bin a aziz be considered independent notwithstanding that he is a Director of cMa as (i) the threshold of s$200,000 recommended in guideline 2.3(d) of the code for payments made by cMa to the company was not significant compared with the revenues received by the group in the financial year 2012, (ii) the payments received by the group from cMa for the corporate support services supplied were ipts from cMa’s perspective and would be on normal commercial terms since ipts were regulated by chapter 9 of the listing Manual of sgX-st, (iii) the corporate support services supplied were not material to the group’s business and (iv) tan sri amirsham is required under the company’s policy to recuse himself from any transaction with cMa or any matter that might give rise to a conflict of interest with cMa and would abstain from voting on such proposals at Board meetings. tan sri amirsham has also demonstrated independence in character and judgement in the discharge of his responsibilities as a Director of the company and there are no other relationships or circumstances that are likely to affect, or could appear to affect, his judgement based on his declaration received.
Mr stephen lee ching Yen was appointed on 1 January 2013 as independent non-executive Director as the Board has determined that there are no relationships or circumstances that are likely to affect, or could appear to affect, Mr lee’s judgement based on his declaration received.
Mr liew Mun leong and Mr lim Ming Yan are both executives of the company and they are therefore deemed to be non-independent Directors.
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Corporate GovernanCe report Principle 3: Chairman and Chief Executive Officer
to maintain effective supervision and accountability at each of the Board and Management levels, the positions of Chairman and Ceo are held by separate individuals.
the non-executive Chairman leads the Board and acts independently in the best interests of the Company and its shareholders, while the Ceo is responsible for the running of the Group’s businesses.
the Chairman ensures that the members of the Board and Management work together with integrity, competency and moral authority, and that the Board constructively engages Management on strategy, business operations, enterprise risk and other plans.
the Ceo is a Board member and has full executive responsibilities over the business directions and operational decisions of the Group. the Ceo, in consultation with the Chairman, schedules Board meetings and finalises the preparation of the Board meeting agenda. He ensures the quality and timeliness of the flow of information between Management and the Board. He is also responsible for ensuring that the Company complies with corporate governance guidelines.
the Chairman and Mr Lim Ming Yan, the president & Group Ceo, are not related family members. the Chairman and Mr Liew Mun Leong, the president and Ceo in financial year 2012, are also not related family members.
Principle 4: Board Membership
Board renewal is a continual process, for good governance and to maintain relevance to the changing needs of the Group’s businesses. election of Board members is the prerogative and right of shareholders.
the nC is chaired by Mr peter Seah Lim Huat and comprises Mr ng Kee Choe, Mrs arfat pannir Selvam, Mr John powell Morschel and Mr Simon Claude Israel. Mr Liew Mun Leong stepped down from the nC on 1 January 2013.
the majority of the nC members, including the Chairman, are independent non-executive Directors.
the nC ensures that the Board and Board Committees in the Group comprise individuals who are best able to discharge their responsibilities as Directors having regard to the law and the highest standards of corporate governance. In performing its role, the nC is guided by its terms of reference. In particular, the nC will recommend to the Board:
(a) candidates for appointments to the Company’s Board and Board Committees;
(b) candidates to be the Company’s nominees on the Boards of listed subsidiaries and/or associates within the Group; and
(c) candidates to the Board and Board Committees of holding companies of the unlisted business units.
In addition, the nC shall:
(a) make recommendations to the Board on the succession plans for Directors and the appointment of and succession plan for the Ceo;
(b) review and recommend the development of a process for evaluation of the performance of the Board, Board Committees and Directors;
(c) review and recommend the training and professional development programmes for the Board;
(d) consider annually, and as and when circumstances require, if a Director is independent, and shall provide its views to the Board for consideration;
(e) review and decide if a Director is able to and has been adequately carrying out his duties as a Director, taking into consideration the Director’s number of listed company board representation and other principal commitments; and
(f) review at least once a year the Company’s corporate governance practices, having regard to relevant local and international developments in the area of corporate governance (including changes in applicable law, regulations and listing rules), and recommend changes to the Board.
the Board has delegated specific duties to the nC with regard to the selection, appointment and re-election of non-executive Directors. the Board has formalised the process for selecting, appointing and re-electing non- executive Directors to the Board as follows:
(a) the nC will at least annually carry out proactive review of the Board composition as well as on each occasion that an existing non-executive Director gives notice of his or her intention to retire or resign. this is to assess the collective skills of non-executive Directors represented on the Board to determine whether the Board, as a whole, has the skills required to achieve the Group’s strategic and operational objectives. the outcome of that assessment will be reported to the Board;
(b) In carrying out this review, the nC will take into account that the Board composition should reflect balance in matters such as skill representation, tenure, experience, age spread and diversity (including gender diversity);
(c) the nC will identify suitable candidates for appointment to the Board having regard to the skills required and the skills represented on the Board;
(d) external consultants may be used from time to time to access a wide base of potential non-executive Directors. those considered will be assessed against a range of criteria including background, experience, professional skills and personal qualities. the nC and the Board will also consider whether a candidate’s skills and experience will complement the existing Board and whether the candidate has sufficient time available to commit to his responsibilities as a Director;
(e) the nC will make recommendations to the Board on candidates it considers appropriate for appointment;
(f) a new Director will receive a formal Letter of appointment and during the appointment process will also be given a copy of the new Directors’ Manual (which includes information on a broad range of matters relating to the role of a Director);
(g) all Directors on appointment will be required to undertake an induction programme to familiarise them with matters relating to the Company’s business, strategy and any matters before the Board. the Induction programme includes meetings with the Chairman of the Board, the Chairmen of the Board Committees, the Ceo, the Company Secretary, the Group Chief Financial officer (“CFo”) and other key executive members;
(h) Following appointment and induction, the Board will encourage Directors to continue their education by participating in formal workshops and attending relevant site visits. Directors are also encouraged to undertake relevant external training by attending briefings, market updates, etc;
(i) Subject to the provisions of the articles of association of the Company (“articles”) and the Companies act, the Board may appoint a person as a Director of the Company at any time but that person must retire, and may seek election by shareholders, at the next annual General Meeting (“aGM”);
(j) In regard to the re-election of existing Directors each year, the nC will advise the Board of those Directors who are retiring in accordance with the provisions of the articles of the Company;
(k) the nC will make recommendations to the Board as to whether the Board should support the re-election of a Director retiring in accordance with the provisions of the articles;
(l) In making recommendations, the nC will undertake a process of review of the retiring non-executive Director’s performance during the period in which the non-executive Director has been a member of the Board; and
(m) a non-executive Director will serve a maximum of two three-year terms and thereafter by exception on the recommendation of the nC.
the above process shall be reviewed periodically at the discretion of the Board.
the Company’s articles require one-third of its Directors to retire and subject themselves to re-election (“one-third rotation rule”) by shareholders at every aGM. In other words, no Director stays in office for more than three years without being re-elected by shareholders.
the Ceo, as a Board member, is also subject to the one-third rotation rule. this separates his role as Ceo from his position as a Board member, and enables shareholders to exercise their right to select all Board members.
In addition, a new Director appointed by the Board will submit himself for retirement and re-election at the aGM immediately following his appointment. thereafter, he is subject to the one-third rotation rule.
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corporate goVernance report Directors who are above the age of 70 are also statutorily required to seek re-appointment at each agM.
the nc has assessed that each Director in the company is able to and has been adequately carrying out his duties as a Director of the company, taking into consideration the Director’s number of listed company board representations and other principal commitments.
the Board is of the view that setting a maximum number of listed company board representations would not be meaningful as the contributions of the Directors would depend on many other factors such as whether they were in full time employment and their other responsibilities. all Directors had confirmed that notwithstanding the number of listed company board representations and other principal commitments, which the Directors held, they were able to devote sufficient time and attention to the affairs of the company.
Directors who are seeking re-election at the next agM on 26 april 2013 are stated in the notice of agM on pages 247 to 250 of the annual report.
principle 5: Board Performance
We believe that Board performance is ultimately reflected in the long term performance of the group.
the Board, through the nc, has ensured from the outset the requisite blend of background, experience and knowledge in technology, business, finance and management skills critical to the group’s businesses. it has from the outset ensured that each Director with his special contribution brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.
renewal or replacement of Board members do not necessarily reflect their contributions to date, but may be driven by the need to position and shape the Board in line with the needs of the company and its business.
the Board has adopted a process whereby an external consultant will be appointed to assess the effectiveness of the Board and Board committees annually. the consultant appointed is independent of and is not related to the company or any of its Directors.
in financial year 2012, questionnaires were sent by the consultant to the Directors and the senior Management and the findings were evaluated by the consultant and reported, together with the recommendations of the consultant, to the chairman of the nc. the findings and the recommendations were reviewed by the Board.
Principle 6: Access to information
We believe that the Board should be provided with timely, adequate and complete information prior to Board meetings, and as and when the need arises. as a general rule, Board papers are sent to Board members at least five working days before the Board meeting so that the members may better understand the matters prior to the Board meeting and discussion may be focused on questions that the members may have. However, sensitive matters may be tabled at the meeting itself or discussed without any papers being distributed. new Board members are fully briefed on the businesses of the group.
Management provides timely, adequate and complete information to the Board on Board affairs and issues requiring the Board’s decision. it also provides ongoing reports relating to operational and financial performance of the company, such as monthly management financial reports. the articles of the company provide for Directors to convene meetings by teleconferencing or videoconferencing. Where a physical Board meeting is not possible, timely communication with members of the Board is effected through electronic means which include electronic mail, teleconferencing and videoconferencing. alternatively, Management will brief Directors in advance before seeking the Board’s approval.
the Board has access to senior Management and the company secretary at all times. the company secretary attends to corporate secretarial administration matters and is the corporate governance advisor on corporate matters to the Board and senior Management. the company secretary attends Board meetings. the Board also has access to independent professional advice where appropriate.
Board meetings for each year are scheduled in advance in the preceding year to facilitate Directors’ individual administrative arrangements in respect of competing commitments.
(B) ReMuneRAtion MAtteRS Principle 7: Procedures for Developing
Remuneration Policies Principle 8: level and Mix of Remuneration Principle 9: Disclosure on Remuneration
We believe that a framework of remuneration for the Board and key executives should not be taken in isolation. it should be linked to the building of management bench strength and the development of key executives. this is to ensure continual development of talent and renewal of strong and sound leadership for a sustainable business and a lasting company. the company’s ercc plays a crucial role in helping to ensure that the company is able to attract, recruit and retain the best talents to drive the group’s businesses forward.
the ercc is chaired by Mr peter seah lim Huat and comprises Mr ng Kee choe, Mr simon claude israel and Mr stephen lee ching Yen who was appointed on 1 February 2013. Mr ng Kee choe will be replacing Mr peter seah as chairman of ercc on 27 april 2013.
all the ercc members, including the chairman, are independent non-executive Directors.
the ercc oversees executive compensation and development in the group. it sets appropriate remuneration policies and designs competitive compensation packages with focus on long term sustainability of business and long term shareholders’ return.
the ercc is guided by its terms of reference. specifically, the ercc will in relation to each of the following areas:
executive remuneration policy (a) review and recommend to the Board a general
framework of remuneration for key management personnel of the group; and
(b) review the on-going appropriateness and relevance of the executive remuneration policy and other benefit programmes;
Key Management personnel (a) consider, review, vary (if necessary) and recommend
to the Board the entire specific remuneration package and service contract terms for each key management personnel in the group excluding its listed subsidiaries (including salaries, allowances, bonuses, payments, options, benefits in kind, retirement rights, severance packages and service contracts) having regard to the general framework of remuneration for key management personnel in the group excluding its listed subsidiaries;
(b) consider and approve termination payments, retirement payments, gratuities, ex-gratia payments, severance payments and other similar payments to key management personnel in the group excluding its listed subsidiaries; and
(c) ensure that their contracts of service contain fair and reasonable termination clauses which are not overly generous;
equity Based plans (a) review and approve the design of all option plans, stock
plans and/or other equity based plans in the company; (b) for each equity based plan, determine each year
whether awards will be made under that plan; (c) review and approve each award as well as the total
proposed awards under each plan in accordance to the rules governing each plan, including awards to Directors and each key management personnel; and
(d) review, approve and keep under review performance hurdles and/or fulfillment of performance hurdles for each equity based plan in the company;
non-executive Director remuneration Framework (a) review and recommend to the Board a general
framework of remuneration (including Directors’ fees) for non-executive Directors in the group excluding its listed subsidiaries; and
(b) review and recommend to the Board specific remuneration packages for each Director in the company;
executive and leadership Development (a) oversee the development plans of Management
with the aim of a continual build up of talent and renewal of strong and sound leadership to ensure the continued success of the group and its businesses. it shall approve appointment of key management positions and review succession plans for key management positions in the group (excluding the ceo) and oversee the development of key executives and talented executives in the group.
the aim of the ercc is to build capable and committed management teams, through competitive compensation, focused management, and progressive policies which can attract, motivate and retain a pool of talented executives to meet the current and future growth of the company. the ercc conducts, on an annual basis, a succession planning review of the ceo and selected key management positions in the company. potential internal and external candidates for succession are reviewed in the light of immediate, medium term and longer term needs and readiness.
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the Board sets the remuneration policies in line with the company’s business strategy and approves the executive compensation framework based on the key principle of tying pay to performance at the beginning of the financial year. the Board approves the guaranteed cash component based on position size and relevant market competitive levels of compensation, sets performance conditions for all incentive plans and reviews the potential compensation payouts for various levels of group, business unit and individual performance at the end of the financial year. the Board reviews the performance and the resulting incentives taking into account the relevant market competitive levels of compensation. the Board has access to the advice of independent remuneration consultant to assist with the above procedure.
in financial year 2012, the ercc appointed an external counsultant carrots consulting pte ltd (“carrots”) to provide professional advice on board and executive remuneration. carrots and its principal consultant Mr Johan grundlingh, is independent and is not related to the company or any of its Directors. in its deliberations, the ercc took into consideration industry practices and norms in compensation. Mr liew Mun leong, the president and ceo, was not present during the discussions relating to his own compensation and terms and conditions of service, and the review of his performance. He was in attendance when the ercc discussed policies and compensation of his senior team and key staff which included contingent share awards, bonus, staff salary review and other incentive schemes.
one ercc meeting was held in financial year 2012.
non-executive Directors have remuneration packages consisting of Directors’ fees and attendance fees. the Directors’ fee policy is based on a scale of fees divided into basic retainer fees as Director and additional fees for attendance and serving on Board committees. the fee structure for financial year 2012 is as follows:
(S$)
Basic Retainer fee Board chairman 167,000 Deputy Board chairman 137,000 Director 78,000
fee for appointment to Audit Committee and investment Committee committee chairman 60,000 committee member 25,000
fee for appointment to executive Resource & Compensation Committee and Risk Committee committee chairman 32,000 committee member 22,000
fee for appointment to any other Board Committee committee chairman 28,000 committee member 20,000
Attendance fee for Board/Board Committee meetings (per meeting) (a) Attendance in person Board meeting
local 4,000 overseas 7,000
Board committee meeting
local 2,200 overseas 7,000
(b) Attendance via conference telephone or similar communication equipment local and overseas 1,700
Attendance fee in person or otherwise for project committee meetings/verification meetings/other meetings where attendance of Directors is required (per meeting)#
local and overseas 1,000
non-executive Directors who served on the Board during financial year 2012 will be remunerated as to about 70 per cent. (70%) of his total Directors’ fees in cash and about 30 per cent. (30%) of his total Directors’ fees in the form of shares in the company. the actual number of shares to be awarded will be based on the volume- weighted average price (“VWap”) of the company’s share on the sgX-st over the 14 trading days from (and including) the ex-dividend date following the date of the company’s agM, rounded down to the nearest share, and any residual balance settled in cash. the awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. However, in order to encourage the alignment of interests of the non-executive Directors with the interests of shareholders, a non-executive Director is required to hold shares in the company worth at least one-time his annual basic retainer fee based on the VWap of the company’s share over the 14 trading days from (and including) the ex-dividend date (if any) following the date of the company’s agM or the total number of shares awarded under the above policy for financial year 2011 and onwards, whichever is lower, at all times during his Board tenure. Details of the Directors’ remuneration for financial year 2012 are provided in the Directors’ remuneration section on page 70 of this report. Directors’ fees in aggregate for non-executive Directors are subject to the approval of shareholders at the agM.
the ceo as executive Director does not receive Director’s fees. He is the lead member of Management. His compensation consists of his salary, allowances, bonuses and contingent share awards. the latter is conditional upon him and the company meeting certain performance targets. the details of the compensation package of Mr liew Mun leong, the president and ceo in financial year 2012, are provided in the Directors’ remuneration section on page 70 of this report.
Key management personnel’s compensation consist of salary, allowances, bonuses and contingent share awards. the latter is conditional upon the executive and the company meeting certain performance targets. a significant proportion of executives’ remuneration is linked to the company and individual performance in the form of share based and economic Value added based compensation. the code requires a company to disclose the names of at least the top five key management personnel of the company. the company considers members of the office of the president (“opM”) as its key management personnel for financial year 2012. apart from the then president and ceo Mr liew Mun leong who was the executive Director, the other five members
the principles governing the company’s key management personnel remuneration policy are as follows:
BuSineSS AliGnMent
MotivAte RiGht BehAviouRS
fAiR & APPRoPRiAte
effeCtive iMPleMentAtion
• Build sustainable value creation and drive wealth-added to align with longer term shareholder interests
• Provide sound, structured funding to ensure affordability and cost-effectiveness in line with performance goals
• Enhance retention of key talents to build strong organisational capabilities
• Pay for performance –align, differentiate and balance rewards according to multiple dimensions of performance
• Strengthen line-of-sight linking rewards and performance goals
• Foster Group-Wide interests to recognise the interdependence of the various business units and drive superior outcomes
• Ensure remuneration is competitive relative to the appropriate external talent markets
• Manage internal equity so that remuneration systems are viewed as fair across the group
• Significant and appropriate portion of pay-at-risk, taking into account risk policies of the group, symmetrical with risk outcomes and sensitive to risk time horizon
• Maintain rigorous corporate governance requirements
• exercise appropriate flexibility to meet strategic business needs and practical implementation considerations
• facilitate employee understanding to maximise the value of the remuneration programs
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corporate goVernance report of the opM for financial year 2012 were the then chief operating officer Mr lim Ming Yan, the then chief corporate officer Ms Jennie chua Kheng Yeng, the then chief executive officer of capitaland Financial limited Mr Wen Khai Meng, the then chief investment officer Mr olivier lim tse ghow and the group cFo Mr arthur lang tao Yih. the details of their compensation package in bands of s$250,000 and in percentage terms are provided in the Key executives’ remuneration section on page 74 of this report.
in performing the duties as required under its terms of reference, the ercc ensures that remuneration paid to the ceo and key management personnel is strongly linked to the achievement of business and individual performance targets. the performance targets as determined by the ercc are set at realistic yet stretched levels each year to motivate a high degree of business performance with emphasis on both short- and long-term quantifiable objectives. a pay-for-performance alignment study was conducted by the external consultant and reviewed by ercc and it was found that there was sufficient evidence indicating pay-For- performance alignment for the company in both absolute and relative terms for the 3-year period from financial year 2009 to financial year 2011.
For financial year 2012, there were no termination, retirement and post-employment benefits granted to Directors, the ceo and the top five key management personnel other than the payment in lieu of notice in the event of termination in the employment contracts of the ceo and the top five key management personnel.
no employee of the company and its subsidiaries was an immediate family member of a Director or the president and ceo and whose remuneration exceeded s$150,000 during the financial year 2012. “immediate family member” means the spouse, child, adopted child, step-child, sibling and parent.
share awards which were made in 2012 were based on the capitaland performance share plan 2010 and the capitaland restricted share plan 2010 (the “new share plans”) approved and adopted by the shareholders of the company at the extraordinary general Meeting held on 16 april 2010.
upon the adoption of the new share plans, the existing capitaland performance share plan and the capitaland restricted stock plan (the “existing share plans”) were terminated without prejudice to the rights of holders of outstanding options and awards. the new share plans carry the same terms as the existing share plans except
that the maximum size of the shares to be issued has been reduced to 8% over the 10-year life of the new share plans (compared to 15% of the existing share plans).
Details of the existing share plans and new share plans as well as awards granted under the existing share plans and new share plans are given in the share plans section of the Directors’ report from pages 140 to 145.
(C) ACCountABilitY AnD AuDit Principle 10: Accountability
the Board provides shareholders with quarterly and annual financial reports. results for the first three quarters are released to shareholders within 45 days from the end of the quarter. annual results are released within 60 days from the financial year-end. the company’s results for first three quarters and full year for financial year 2012 were all released on a timely basis, within 31 days of the end of the relevant quarter and within 51 days of the end of the full year. in presenting the annual and quarterly financial statements to shareholders, the Board aims to provide shareholders with a balanced and clear assessment of the company’s position and prospects.
For financial year 2012, the president and ceo and group cFo have provided assurance to the Board on the integrity of the financial statements for the group. For the interim financial statements, the Board has provided a negative assurance confirmation to shareholders, in line with the listing Manual of the sgX-st. For the full year financial statements, the Board has received an assurance from the president & group ceo and the group cFo set out in page 63 of this report. Principle 11: Risk Management and internal Controls
the company believes that it has in place a robust and effective system of internal controls addressing material financial, operational, compliance and information technology risks to safeguard shareholders’ interests and the group’s assets, and also to manage risks.
the ac is responsible for making the necessary recommendation to the Board such that an opinion or comment regarding the adequacy and effectiveness of the risk management and internal control systems of the group can be made by the Board in the annual report of the company according to the listing Manual of the sgX-st and the code. in this regard, the ac is assisted by the rc which was formed in 2002 as part of the company’s efforts to strengthen its risk management processes and framework.
the rc is chaired by Mr James Koh cher siang and comprises Ms euleen goh Yiu Kiang who was appointed on 30 april 2012, tan sri amirsham Bin a aziz who was appointed on 15 august 2012 and Mr stephen lee ching Yen who was appointed on 1 February 2013. Mr richard edward Hale stepped down from the rc on 30 april 2012. Mrs arfat pannir selvam stepped down from the rc on 1 February 2013. a total of four rc meetings was held in 2012.
the rc is guided by its terms of reference. specifically, the rc assists the Board to:
(a) determine the group’s levels of risk tolerance and risk policies;
(b) oversee Management in the formulation, updating and maintenance of an adequate and effective risk management framework in addressing material risks including material financial, operational, compliance and information technology risks;
(c) make the necessary recommendation to ac and the Board such that an opinion or comment regarding the adequacy and effectiveness of the risk management and internal control systems can be made by the Board of Directors in the annual report in accordance to the listing Manual of the sgX-st and the code;
(d) review the group’s risk profile regularly and the adequacy of any proposed action if necessary; and
(e) review any material breaches of risk limits and the adequacy of any proposed action if necessary.
the company has an established risk identification and management framework developed with the assistance of an external consultant. in the company, risks are proactively identified and addressed. the ownership of these risks lies with the respective business and corporate executive heads with stewardship residing with the Board. the rc assists the Board to oversee Management in the formulation, updating and maintenance of an adequate and effective risk management framework while the ac reviews the adequacy and effectiveness of the risk management and internal control systems. at the Management level, an enterprise risk Management committee (erMc) comprising key management personnel, is responsible for directing and monitoring the development, implementation and practice of enterprise risk Management (“erM”) across the group. erMc reports through president & group ceo to the rc.
the company maintains a risk register which identifies the material risks facing the group and the internal controls in place to manage or mitigate those risks.
Business and corporate executive heads in the group review and update the risk register regularly. the risk register is reviewed annually by the rc, the ac and the Board. the rc also reviews the approach of identifying and assessing risks and internal controls in the risk register.
internal and external auditors conduct audits that involve testing the effectiveness of the material internal controls in the group including testing, where practical, material internal controls in areas managed by external service providers. any material non-compliance or lapses in internal controls together with corrective measures recommended by internal and external auditors are reported to the ac. the effectiveness of the measures taken by Management in response to the recommendations made by the internal and external auditors is also reviewed by the ac. the system of risk management and internal controls is continually being refined by Management, the rc, the ac and the Board.
the Board has received assurance from the president & group ceo and the group cFo at the Board meeting on 20 February 2013 that:
(a) the financial records of the group have been properly maintained and the financial statements for the year ended 31 December 2012 give a true and fair view of the group’s operations and finances; and
(b) the system of risk management and internal controls in place within the group is adequate and effective in addressing the material risks in the group in its current business environment including material financial, operational, compliance and information technology risks. the president & group ceo and the group cFo have obtained similar assurance from the business and corporate executive heads in the group.
Based on the framework established and the reviews conducted by Management and both the internal and external auditors throughout the financial year, as well as the assurance from the president & group ceo and the group cFo, the Board opines pursuant to rule 1207(10) of the listing Manual of the sgX-st, with the concurrence of the ac, that the group’s internal controls were adequate as at 31 December 2012 to address financial, operational and compliance risks which the group considers relevant and material to its operations.
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corporate goVernance report the Board notes that the system of risk management and internal controls established by the company provides reasonable, but not absolute, assurance that the group will not be significantly affected by any event that can be reasonably foreseen as it strives to achieve its business objectives. However, the Board also notes that no system of risk management and internal controls can provide absolute assurance in this regard, or absolute assurance against poor judgment in decision making, human error, losses, fraud or other irregularities.
Principle 12: Audit Committee
the ac comprises Ms euleen goh Yiu Kiang who was appointed chairman on 30 april 2012, Mr James Koh cher siang, Mrs arfat pannir selvam and tan sri amirsham Bin a aziz who was appointed on 15 august 2012. Mr richard edward Hale stepped down from the ac on 30 april 2012. all the members of the ac, including the chairman, are independent non-executive Directors. the members bring with them invaluable managerial and professional expertise in the financial, tax, legal and accounting domains.
the ac functions independently of the officers and other Directors of the company who are not ac members. such officers and other Directors of the company who are not ac members may attend any particular ac meeting only at the ac’s invitation, specific to the relevant meeting. Management is required to provide the fullest co-operation in providing information and resources, and in implementing or carrying out all requests made by the ac.
the ac is responsible for overseeing the internal audit function. the ac ensures that the internal audit Department (“cl ia”) is provided with adequate resources and that it has the appropriate standing within the company to enable it to carry out its function effectively.
Where the ac becomes aware of any suspected fraud or irregularity, or suspected infringement of any law, rules or regulations, which has or is likely to have a material impact on the operating results or financial position of the company, the ac shall discuss such matter with the external auditors and, at an appropriate time, report the matter to the Board.
the ac is guided by terms of reference which defines its scope of authority. specifcally, the ac shall:
(a) review the company’s and the group’s financial statements and any public financial reporting with Management and external auditors for submission to the Board;
(b) review with the external auditors their audit plan, audit report, management letter and the response from the Management or difficulties with Management encountered during the course of the audit;
(c) review with the external and internal auditors the adequacy and effectiveness of the group’s internal control systems, including financial, operational, compliance and information technology controls;
(d) make the necessary recommendation to the Board such that an opinion or comment regarding the adequacy and effectiveness of the risk management and internal control systems of the group can be made by the Board in the annual report according to the listing Manual of the sgX-st and the code;
(e) review with the internal auditors, the programme, scope and results of the internal audit and Management’s response to their findings to ensure that appropriate follow-up measures are taken;
(f) review at least annually the adequacy and effectiveness of the internal audit function;
(g) review with the external auditors the impact of any new or proposed changes in accounting principles or regulatory requirements on the financial statements of the company and the group;
(h) review ipts for potential conflicts of interest; (i) review on a periodic basis the framework and
processes established for the implementation of the terms of the collaboration agreement with cMa in order to ensure that such framework and processes remain appropriate;
(j) review and assess from time to time whether additional processes are required to be put in place to manage any material conflicts of interest within the group and propose, where appropriate, the relevant measures for the measurement of such conflicts;
(k) review and resolve all conflicts of interest matters referred to it;
(l) assess the suitability of the accounting firm as external auditors and recommend to the Board their appointment or re-appointment as external auditors for the coming year, to approve their compensation as negotiated by Management and to review and approve their discharge. the ac shall review the scope and results of the external audit and also assess the cost effectiveness, the independence and objectivity of the external auditors. Where the auditors also supply a substantial volume of non-audit services to the company, the ac shall keep the nature and extent of such services under review, seeking to balance the maintenance of objectivity and value for money;
(m) review filings with sgX-st or other regulatory bodies which contain the company’s and the group’s financial statements and ensure proper disclosure;
(n) commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity or failure of internal controls or infringement of any law, rule and regulation which has or is likely to have a material impact on the group’s operating results and/or financial position. the ac shall be empowered to retain independent counsel, accountants or others to assist in the conduct of any investigation;
(o) report to the Board the work performed by the ac in carrying out its functions; and
(p) consider any other matters, as defined by the Board.
the ac also reviews arrangements by which employees of the company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. pursuant to this, the ac has introduced a Whistle Blowing policy where staff may raise improprieties to the ac chairman, with the confidence that, in good faith, the staff making such reports will be treated fairly and be protected from reprisal. the ac confirms that no reports have been received under the Whistle Blowing policy thus far.
a total of four ac meetings was held in 2012. the ac also held one meeting with the external auditors and internal auditors, without Management’s presence, to discuss the reasonableness of the financial reporting process, the system of internal control, and the significant comments and recommendations by the auditors.
During financial year 2012, the group cFo briefed the ac on the impact of the new accounting standards on the group’s consolidated financial statements. the external auditors also made a presentation on the new accounting standards at an ac Meeting.
principle 13: internal Audit
cl ia reports directly to the chairman of the ac and administratively to the group cFo. cl ia plans its internal audit schedules in consultation with, but independently of, Management and its plan is submitted to the ac for approval prior to the beginning of each year. the ac also meets with cl ia at least once a year without the presence of Management.
cl ia is a corporate member of the singapore branch of the institute of internal auditors inc. (“iia”), which has its headquarters in the usa. cl ia subscribes to, and is guided by, the standards for the professional practice of internal auditing (“standards”) developed by the iia and has incorporated these standards into its audit practices.
the standards set by the iia cover requirements on:
(a) independence; (b) professional proficiency; (c) scope of Work; (d) performance of audit Work; and (e) Management of the internal auditing Department.
cl ia staff involved in information technology (“it”) audits are certified information system auditors and members of the information system audit and control association (“isaca”) in the usa. the isaca information system auditing standards provide guidance on the standards and procedures to be applied in it audits.
to ensure that the internal audits are performed by competent professionals, cl ia recruits and employs suitably qualified staff. in order that their technical knowledge remains current and relevant, cl ia identifies and provides training and development opportunities to these staff.
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corporate goVernance report (D) ShAReholDeR RiGhtS AnD ReSPonSiBilitieS Principle 14: Shareholder Rights
the company treats all its shareholders fairly and equitably and keeps all its shareholders and other stakeholders and analysts in singapore and around the world informed of its corporate activities, including changes in the company or its business which would be likely to materially affect the price or value of its shares, on a timely and consistent basis.
the company ensures that shareholders have the opportunity to participate effectively and vote at general meetings of shareholders and informs shareholders of the rules, including voting procedures, governing such meetings.
principle 15: Communication with Shareholders
the company actively engages with its shareholders and has put in place its investor relations policy to promote regular, effective and fair communication with its shareholders. the policy is uploaded on the company’s website at www.capitaland.com and is reproduced on page 80 of the annual report.
the company makes disclosures on an immediate basis as required under the listing Manual of the sgX-st, or as soon as possible where immediate disclosure is not practicable. regular briefings and meetings for analysts and the media are held, generally coinciding with the release of the group’s second quarter and full-year results. During these briefings, senior Management reviews the group’s most recent performance and discusses the company’s outlook. in the interest of transparency and broad dissemination, these briefings are webcast live and accessible to the public on the company’s website at www.capitaland. com, materials used in the briefings are disseminated via sgXnet and recordings of the briefings are also archived on the company’s website.
the Board has formed the cDc which is chaired by Mr James Koh cher siang and comprises Mrs arfat pannir selvam and Mr lim Ming Yan who was appointed on 1 January 2013. Mr liew Mun leong stepped down from the cDc on 1 January 2013. the cDc reviews the promptness and comprehensiveness of corporate disclosures and announcements made to the sgX-st, and ensures the adoption of good corporate governance and best practices in terms of transparency to shareholders
and the investing community. the views and approvals of the cDc were sought throughout the year on various announcements and news releases issued by the company.
in addition, the company’s investor relations and corporate communications departments facilitate effective communications with the company’s shareholders, analysts, fund managers and the media. in addition, the company pursues opportunities to keep its retail shareholders informed through the business media, website postings and other publicity channels. Materials used in the briefings to institutional shareholders are also disseminated via sgXnet for easy access by retail shareholders.
in 2012, senior Management conducted more than 500 meetings with institutional investors. Management also participated in investor conferences in Kuala lumpur, new York, Frankfurt, Hong Kong, london, amsterdam and Boston besides singapore.
the company has a policy on the payment of dividends. Barring unforeseen circumstances, the company’s policy is to declare a dividend of at least 30% of the annual profit after tax and non-controlling interests excluding unrealised revaluation gains or losses as well as impairment charges or write backs.
Principle 16: Conduct of Shareholder Meetings
the company supports the code’s principle to encourage shareholder participation. shareholders receive the summary financial report and notice of the agM. notice of the agM is also advertised in the press and issued via sgXnet.
to ensure transparency in the voting process and better reflect shareholders’ interest, the company conducts electronic poll voting for shareholders/proxies present at the meeting for all the resolutions proposed at the agM. Votes cast, for or against and the respective percentages, on each resolution will be tallied and displayed ‘live-on-screen’ to shareholders immediately at the agM. the total number of votes cast for or against the resolutions and the respective percentages are also announced after the agM via sgXnet. Voting in absentia and by email may only be possible following careful study to ensure that the integrity of the information and authentication of the identity of shareholders through the web are not compromised and legislative changes are effected to recognise electronic voting.
there are separate resolutions on each substantially separate issue.
comprehensive minutes of the meetings are taken and are available to shareholders for their inspection upon their request.
shareholders also have the opportunity to communicate their views and discuss with the Board and Management matters affecting the company after the meetings. the group’s communication efforts have been recognised by the investment community. in 2012, it was conferred a number of awards which are listed on page 28 of the annual report.
ADDitionAl CoMMiitteeS
apart from the Board committees recommended by the code and the cDc, the company has also set up the ic and FBc. the ic has been delegated the authority by the Board to approve the group’s investments and divestments, project budget variances, asset write-offs and disposals, reported losses of money, bad debt write-offs, granting of rebates and credits, rescheduling of recoverable debts, budget variances and procurement of goods and services within certain limits. the ic also approves the acceptance of credit facilities from financial institutions and capital markets. the ic is chaired by Mr ng Kee choe with effect from 1 May 2012 and comprises prof Kenneth stuart courtis, Mr John powell Morschel, Mr simon claude israel and Mr lim Ming Yan who was appointed on 1 January 2013. Dr Hu tsu tau stepped down from the ic on 30 april 2012. Mr liew Mun leong stepped down from the ic on 1 January 2013 and Mr arthur lang tao Yih on 26 February 2013.
six ic meetings were held in financial year 2012.
the FBc reviews the annual budget and financial policies of the group. the FBc is chaired by Mr peter seah lim Huat and comprises Mr ng Kee choe, prof Kenneth stuart courtis and Mr lim Ming Yan who was appointed on 1 January 2013. Mr liew Mun leong stepped down from the FBc on 1January 2013 and Mr arthur lang tao Yih on 26 February 2013.
the FBc is guided by its terms of reference. specifically, the FBc:
(a) reviews the annual budget or financial policies of the group. the annual budget, after being endorsed by the FBc, shall be approved by the Board;
(b) reviews the full year forecast and three-year outlook (if any) of the group; and
(c) reviews the group Finance Manual which contains policies, procedures, financial authority limits and guidelines in areas such as accounting, treasury, investment appraisal, management and statutory reporting, and corporate governance. the Finance Manual and any updates, after being endorsed by the FBc, shall be approved by the Board.
two FBc meetings were held in financial year 2012.
in financial year 2012, the Board also set up an ad-hoc Board succession committee comprising Mr ng Kee choe, Mr peter seah and Mr simon israel to manage the process for the succession of Mr liew Mun leong. the committee met on a number of occasions. external and internal candidates were reviewed before the Board appointment Mr lim Ming Yan as president & group ceo with effect from 1 January 2013.
DeAlinGS in SeCuRitieS
taking into consideration the sgX-st Best practices guide, the company has issued guidelines to Directors and employees in the group, prohibiting dealings in the company’s securities (i) while in possession of material unpublished price-sensitive information, (ii) during two weeks before the release of the company’s results for the first three quarters and, (iii) one month before the release of the company’s full-year results. they are also discouraged from dealing in the company’s securities on short term considerations.
Directors and employees are also prohibited from dealing in securities of other listed companies in the group while in possession of unpublished price-sensitive information by virtue of their status as Directors and/or employees. they are also made aware of the applicability of the insider trading laws at all times.
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corporate goVernance report
corporate goVernance report CoMPoSition of BoARD AnD BoARD CoMMitteeS in 2012
Board Members Audit Committee
investment Committee
executive Resource and Compensation Committee
nominating Committee
finance and Budget Committee
Corporate Disclosure Committee
Risk Committee
Dr Hu tsu tau 1 c
ng Kee choe 2 c M M M
peter seah lim Huat c c c
liew Mun leong M M M M
richard edward Hale 3 c M
James Koh cher siang M c c
arfat pannir selvam M M M
prof Kenneth stuart courtis M M
John powell Morschel M M
simon claude israel M M M
euleen goh Yiu Kiang 4 c M
tan sri amirsham Bin a aziz 5 M M
non-Board Members
arthur lang tao Yih M M
Denotes: C – Chairman M – Member
Notes:
1 Retired as Chairman of the Board and Chairman of Investment Committee from the Annual General Meeting on 30 April 2012. 2 Appointed as Chairman of the Board and Chairman of Investment Committee on 1 May 2012. 3 Retired as Chairman of Audit Committee and Member of Risk Committee from the Annual General Meeting on 30 April 2012. 4 Appointed as Chairman of Audit Committee and Member of Risk Committee on 30 April 2012. 5 Appointed as Member of Audit Committee and Risk Committee on 15 August 2012.
AttenDAnCe ReCoRD of MeetinGS of the BoARD AnD BoARD CoMMitteeS in 2012
Board Ad-hoc Board
Audit Committee
investment Committee
executive Resource and Compensation Committee
nominating Committee
finance and Budget Committee
Risk Committee
Board Succession Committee
no. of Meetings Held 4 3 4 6 1 3 2 4 1
Board Members
Dr Hu tsu tau 1 1 – 1
ng Kee choe 4 3 6 1 3 2 1
peter seah lim Huat 4 3 1 3 2 1
liew Mun leong 4 3 6 3 2
richard edward Hale 2 1 – 2 2
James Koh cher siang 4 3 4 4
arfat pannir selvam 4 2 4 3 4
prof Kenneth stuart courtis 4 2 6 2
Dr Fu Yuning 3 – –
John powell Morschel 4 3 6 3
simon claude israel 4 3 6 1 3 1
euleen goh Yiu Kiang 4 4 3 4 2
tan sri amirsham Bin a aziz 5 2 2 1 1
non-Board Members
arthur lang tao Yih 6 2
Notes:
1 Retired as Chairman of the Board and Director and Chairman of Investment Committee from the Annual General Meeting on 30 April 2012. 2 Retired as Director and Chairman of Audit Committee and Member of Risk Committee from the Annual General Meeting on 30 April 2012. 3 Retired as Director at the Annual General Meeting on 30 April 2012. 4 Appointed as Chairman of the Audit Committee and Member of Risk Committee on 30 April 2012. 5 Appointed as Director on 30 July 2012 and as Member of Audit Committee and Risk Committee on 15 August 2012.
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DiReCtoRS’ ReMuneRAtion Directors’ Compensation Table for the Financial Year ended 31 December 2012:
Salary Bonus and Directors’ fees inclusive inclusive of other benefits of attendance fees (3) AWs and inclusive of employer’s employer’s Awards of Cash Shares/units CPf CPf (1) shares (2) component component total Directors of the Company $ $ $ $ $ $
Payable by Company: executive Director liew Mun leong 1,428,560.00 1,785,461.08 1,951,610.00 – – 5,165,631.08
Sub-total 1 1,428,560.00 1,785,461.08 1,951,610.00 – – 5,165,631.08 non-executive Directors Dr Hu tsu tau (5) – – – 81,867.00 – 81,867.00 ng Kee choe – – – 212,146.20 90,919.80 303,066.00 peter seah lim Huat – – – 187,040.00 80,160.00 267,200.00 richard edward Hale (5) – – – 66,133.00 – 66,133.00 James Koh cher siang – – – 146,020.00 62,580.00 208,600.00 arfat pannir selvam – – – 149,240.00 63,960.00 213,200.00 prof Kenneth stuart courtis – – – 147,280.00 63,120.00 210,400.00 Dr Fu Yuning (5) – – – 26,000.00 – 26,000.00 John powell Morschel – – – 134,820.00 57,780.00 192,600.00 simon claude israel – – – 136,850.00 58,650.00 195,500.00 euleen goh Yiu Kiang – – – 126,041.30 54,017.70 180,059.00 tan sri amirsham Bin a aziz (6) – – – 61,203.80 26,230.20 87,434.00
1,474,641.30 (4) 557,417.70 (4)
Sub-total 2 – – – 2,032,059.00 (4) 2,032,059.00 Payable by Subsidiaries: liew Mun leong – – – 366,500.00 (7) 161,600.00 (7) 528,100.00 richard edward Hale – – – 97,000.00 – 97,000.00 James Koh cher siang – – – 139,000.00 – 139,000.00 arfat pannir selvam – – – 77,700.00 33,300.00 111,000.00 tan sri amirsham Bin a aziz – – – 59,500.00 25,500.00 85,000.00
739,700.00 220,400.00
sub-Total 3 – – – 960,100.00 960,100.00 total for Directors of Company 1,428,560.00 1,785,461.08 1,951,610.00 2,992,159.00 8,157,790.08 (1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on
an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2012 is lower than 2011 due to lower portfolio gain. The EVA bonus accrued for year 2012 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) For the year 2012, no contingent awards of shares has been granted under the CapitaLand Restricted Share Plan 2010 (“RSP”) to all Directors except for Mr Liew Mun Leong. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan 2010 (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
Directors’ Compensation Table for the Financial Year ended 31 December 2012: (cont’d)
(3) The directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(4) The total compensation of the non-executive Directors for 2012 of an aggregate amount of S$2,032,059, if approved, will be paid as to S$1,474,641.30 in cash, and S$557,417.70 in the form of share awards under the RSP. Consequently, and in accordance with the “Directors’ Fee Policy”, a non-executive Director who served on the Board during 2012 (with the exception of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning, who retired from the Board during 2012) will be remunerated as to about 70 per cent. (70%) of his total Directors’ fees in cash and about 30 per cent. (30%) of his total Directors’ fees in the form of shares in the Company. The actual number of shares to be awarded will be based on the volume-weighted average price of a share on the SGX-ST over the 14 trading days from (and including) the ex-dividend date following the Company’s Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning will receive all of their Directors’ fees in cash.
(5) Dr Hu Tsu Tau and Mr Richard Edward Hale retired from the Board of the Company from the Annual General Meeting on 30 April 2012. Dr Fu Yuning retired from the Board of the Company at the Annual General Meeting on 30 April 2012.
(6) Tan Sri Amirsham Bin A Aziz was appointed as Director of the Company on 30 July 2012.
(7) Mr Liew Mun Leong is an employee of CapitaLand Limited. The cash component of his directors’ fees will be paid to CapitaLand Limited, but he will be entitled to retain the shares component of the subsidiaries and/or units component of the real estate investment trusts managed by the subsidiaries.
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Corporate Governance
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DiReCtoRS’ ReMuneRAtion Directors’ Compensation Table for the Financial Year ended 31 December 2011:
Salary Bonus and Directors’ fees inclusive inclusive of other benefits of attendance fees (3) AWs and inclusive of employer’s employer’s Awards of Cash Shares/units CPf CPf (1) shares (2) component component total Directors of the Company $ $ $ $ $ $
Payable by Company: executive Director liew Mun leong 1,373,680.00 2,601,541.07 1,506,034.00 – – 5,481,255.07
Sub-total 1 1,373,680.00 2,601,541.07 1,506,034.00 – – 5,481,255.07 non-executive Director Dr Hu tsu tau (4) – – – 246,700.00 – 246,700.00 peter seah lim Huat – – – 166,040.00 71,160.00 237,200.00 Jackson peter tai (4) – – – 67,292.00 – 67,292.00 richard edward Hale (4) – – – 185,400.00 – 185,400.00 James Koh cher siang – – – 133,700.00 57,300.00 191,000.00 arfat pannir selvam – – – 145,320.00 62,280.00 207,600.00 prof Kenneth stuart courtis – – – 136,290.00 58,410.00 194,700.00 Dr Fu Yuning (4) – – – 86,700.00 – 86,700.00 John powell Morschel – – – 115,488.10 49,494.90 164,983.00 ng Kee choe – – – 86,671.90 37,145.10 123,817.00 simon claude israel (5) – – – 126,700.00 54,300.00 181,000.00 euleen goh Yiu Kiang (6) – – – 23,246.30 9,962.70 33,209.00
1,519,548.30 (4) 400,052.70 (4)
Sub-total 2 – – – 1,919,601.00 (4) 1,919,601.00 Payable by Subsidiaries: liew Mun leong – – – 326,100.00 (7) 147,000.00 (7) 473,100.00 richard edward Hale – – – 80,000.00 20,000.00 100,000.00 James Koh cher siang – – – 99,200.00 24,800.00 124,000.00 arfat pannir selvam – – – 81,200.00 34,800.00 116,000.00
586,500.00 226,600.00
sub-Total 3 – – – 813,100.00 813,100.00
total for Directors of Company 1,373,680.00 2,601,541.07 1,506,034.00 2,732,701.00 8,213,956.07
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2011 is lower than 2010 largely due to lower portfolio gain. The EVA bonus accrued for year 2011 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) For the year 2011, no contingent awards of shares has been granted under the CapitaLand Restricted Share Plan 2010 (“RSP”) to all Directors except for Mr Liew Mun Leong. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan 2010 (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
Directors’ Compensation Table for the Financial Year ended 31 December 2011: (cont’d)
(3) The Directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(4) The total compensation of the non-executive Directors for 2011 of an aggregate amount of S$1,919,601, if approved, will be paid out as to S$1,519,548.30 in cash, and S$400,052.70 in the form of share awards under the RSP. Consequently, and in accordance with the “Directors’ Fee Policy”, a non-executive Director who served on the Board during 2011 (with the exception of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning, who are retiring from the Board and Mr Jackson Peter Tai who retired from the Board during 2011) will be remunerated as to about 70 per cent. (70%) of his total Directors’ fees in cash and about 30 per cent. (30%) of his total Directors’ fees in the form of shares in the Company. The number of shares to be awarded will be determined by reference to the volume-weighted average price of a share on the SGX-ST over the 14 trading days immediately following the date of the Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu Tsu Tau, Mr Richard Edward Hale, Dr Fu Yuning and Mr Jackson Peter Tai will receive all of their Directors’ fees in cash.
(5) Mr Simon Claude Israel was an employee of Temasek Holdings (Private) Limited (“Temasek”) until 30 June 2011. His fee for the period from 1 January 2011 to 30 June 2011 is S$92,700 and will be paid entirely in cash to Temasek. His fee for the period from 1 July 2011 to 31 December 2011 is S$88,300 and will be paid to him in the portion of S$34,000 in cash and S$54,300 in the form of share awards under the RSP. His total directors’ fees of S$181,000 for 2011 will be paid in accordance with the Directors’ Fee Policy (see note (4) above).
(6) Ms Euleen Goh Yiu Kiang was appointed as Director of the Company on 1 October 2011.
(7) Mr Liew Mun Leong is an employee of CapitaLand Limited. The cash component of his directors’ fees will be paid to CapitaLand Limited, but he will be entitled to retain the shares component of the subsidiaries and/or units component of the real estate investment trusts managed by the subsidiaries.
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risK assessMent anD ManageMent enteRPRiSe RiSk MAnAGeMent risk Management is an integral part of capitaland’s business activities whether at a strategic or operational level. through proactive risk management, which supports the group’s business objectives and corporate strategy in core markets, value is created and preserved.
the group recognises that risk management is about opportunities as much as threats. to capitalise on opportunities, the group has to take risks. therefore, risk management is not about pursuing risk minimisation as a goal but rather optimising the risk-reward relationship, within known and agreed risk appetite levels. the group will therefore take risks in a prudent manner for justifiable business reasons.
the Board of Directors is responsible for the governance of risk across the group. it is assisted by the risk committee (rc), which was established in 2002, to provide oversight of risk management at the Board level. the rc currently comprises four independent board members and meets on
a quarterly basis. the meetings are regularly attended by the president and group ceo as well as other key management staff. the rc is assisted by the risk assessment group (rag), an independent in-house unit with highly specialised and professional members having diverse and vast experience in financial, operational and enterprise risk management.
an enterprise risk Management committee (erMc) comprising key management personnel at the group level is responsible for directing and monitoring the development, implementation and practice of enterprise risk Management (erM) across the group. the erMc reports through the president and group ceo to the rc. it is supported by a network of risk champions from the different strategic Business units (sBus) and corporate functions as well as various specialist support functions which are tasked to develop, implement and monitor risk management policies, methodologies and procedures in their respective areas. For example, the rag covers the area of erM while operations compliance unit provides oversight and support in the area of Bribery and corruption prevention.
enTeRpRise RisK mAnAGemenT (eRm) FRAmeWORK
RiSk iDentifiCAtion & ASSeSSMent
• Risk Appetite • Risk & Control Self-Assessment
• Investment Risk Evaluation • Quantitative Analysis
• Scenario Analysis • Whistle-blowing/
Business Malpractice
RiSk ReSPonSe • Accept • Avoid
• Mitigate e.g. Business continuity Management
• Transfer: Contractual Risk Management & insurance
RiSk MonitoRinG & RePoRtinG
• Key Risk Indicators • Quarterly Risk Reporting
• Portfolio Monitoring of Financial risks
such as concentration (by country), FX, etc.
eRM framework
Risk Strategy
Board oversight & Senior Management involvement
Culture
in te
rn a
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n tr
o l S
y st
e m
in d
e p
e n
d e
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R ev
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a n
d A
u d
it
keY exeCutiveS’ ReMuneRAtion Key executives’ compensation table for the Financial Year ended 31 December 2012:
total Compensation Bands
Salary inclusive of AWs and
employer’s CPf
Bonus and other benefits
inclusive of employer’s CPf(1)
Award of Shares(2) total
Between s$2,750,000 to s$3,000,000 lim Ming Yan 31% 38% 31% 100% arthur lang tao Yih 20% 37% 43% 100% Between s$2,000,000 to s$2,250,000 olivier lim tse ghow 33% 29% 38% 100% Wen Khai Meng 33% 31% 36% 100% Between s$250,000 to s$500,000 Jennie chua Kheng Yeng(3) 89% 11% 0% 100%
total s$10,616,052
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year.
(2) The share awards are based on the fair value of the shares comprised in the contingent awards under the CapitaLand Restricted Share Plan 2010 (“RSP”) and the CapitaLand Performance Share Plan 2010 (“PSP”) at the time of grant. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP.
(3) Jennie Chua Kheng Yeng retired from CapitaLand Limited on 31 July 2012.
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risK assessMent anD ManageMent
the group has adopted an erM framework that enables it to manage risks in an integrated, systematic and consistent manner. as a foundation to this framework, the group aims to create a risk-aware culture which embeds prudent risk-taking in decision-making and business processes. to this end, the group draws upon:
1. its core values such as integrity and courage to do the right thing;
2. its operating principles such as corruption- Free, Financial Discipline and entrepreneurship, Management, technical strengths (eMt);
3. programmes and policies such as code of conduct, open Door policy and the Because iCare programme to foster open discussion among management and staff; and learning and Development activities to inculcate corporate values and cultures, etc.
a robust internal control system and an effective and independent review and audit process are the twin pillars that underpin the erM framework. While the line management is responsible for the design and implementation of effective internal controls using a risk-based approach, the internal audit function reviews such design and implementation to provide reasonable assurance to the audit committee on the adequacy and effectiveness of the internal control system.
capitaland maintains a prudent risk profile by counterchecking business initiatives and potential investments with rag and by investing in a mix of stable assets and development properties. on a quarterly basis, rag generates and presents to the rc a comprehensive group-wide portfolio risk report that measures a spectrum of risks and keeps the Board and management apprised of the risk profiles of activities and investments in different countries. rag employs an innovative, state-of-the-art Value-at-risk (Var) model that is adapted from the banking industry and is especially tailored for the real estate industry. this is a comprehensive risk measurement tool that measures the potential value deterioration of all key risk exposures of the group using a historical simulation method.
keY RiSkS at least once a year, the sBus and various corporate functions will conduct an assessment of their risk and control environment. Key risks and their associated controls are consolidated and reviewed at the group level before they are presented to the rc. the potential key risks include but are not limited to:
economic Risk the group is exposed to major economies and key financial and property markets. this could reduce revenue, increase costs and result in revaluation losses. Market illiquidity during a financial crisis could make asset divestment challenging for the group, hence it could affect the group’s investment or strategic objectives.
among other things, the group manages this by adopting a disciplined approach towards financial management. a team of in-house experts is also on hand to monitor the macro-economic environment and to advise the senior management and the sBus on the macro-economic trends and their implications on the property market.
Property Market Risk real estate markets are cyclical in nature and are significantly affected by global and local conditions, such as government regulations, competition, consumer confidence, as well as demand and supply situations. existing and new property exposures are subjected to stress testing and scenario analyses are evaluated with the Var model to measure potential economic loss. additionally, financial assumptions of project cash flows pertaining to new investments are benchmarked to ensure forecasts and projections are objective.
over the past year, several rounds of property cooling measures and changes to policies related to the real estate market were implemented by the government, both in singapore and china. adopting a dynamic, proactive and prudent risk management approach, rag conducted a comprehensive study to evaluate and analyse the impact of these measures and regulations on the group’s property exposure. Detailed findings were presented to the rc as a special focus item. Furthermore, to enhance the quarterly risk report, multiple scenario analyses and stress testing were performed and results were incorporated in the risk report.
foreign Currency Risk the group operates internationally and is exposed to various currencies. although the group tries to naturally hedge its foreign currency exposure whenever possible by borrowing in the currency of the country in which the property investment is located or by borrowing in currencies that match future revenue streams generated by investments, it is exposed to substantial un-hedged currency positions from our equity investments in foreign currencies, especially in rMB and auD, due to liquidity constraints and significant cost factors in hedging these open positions. nevertheless, these and all other open currency positions are closely monitored, foreign currency risk evaluated and stress tested by rag and extensive foreign exchange risk management reports are regularly submitted to the rc as part of the quarterly risk report. in 2012, rag also partnered and worked closely with group treasury and Finance to study in detail the foreign currency risk arising from the group’s substantial investment into global markets. comprehensive findings were presented to the rc.
interest rate risk the group’s interest rate risk exposure relates mainly to funding of its property investments. this is managed with a prudent mix of fixed and floating rate borrowing. this allows the group to capitalise on lower cost of funding in a low interest rate environment and protect against potential rate hikes. an interest cost at risk stress simulation method was developed by rag and it measures the potential rise in interest cost for a given debt portfolio in view of the prevailing low interest rate environment.
Development risk new investments typically take several years to complete, depending on the size and complexity of the project. the risks of potential delays and cost overruns of ongoing development projects are regularly monitored and quantified with the Var model, and reported to the rc.
liquidity risk to mitigate liquidity risk of not meeting financial obligations as they fall due, capitaland actively manages its debt maturity profile, operating cash flows and the availability of funding through multiple sources to ensure that all refinancing, repayment and funding needs are fulfilled.
Political & Policy Risk the group operates in numerous locations, some of which may experience political risks such as political leadership uncertainty, inconsistency in public policies, social unrest, etc. such risks could result in the deterioration of the economic or social conditions and affect the financial viability of the group’s investments or even its control of assets in these countries. to mitigate this, local operations are run by experienced management team supported by local team who are both familiar with the local conditions and culture. concentration risk in a single country is also avoided through a risk-based country asset allocation system. this uses a multi-faceted and risk-adjusted methodology based on capitaland’s investment strategy, sovereign risk ratings by international rating agencies and macroeconomic views from the group’s in-house economic unit.
investment Risk at the individual project level, to ensure that all significant risks are identified and quantified, rag continues to perform an independent risk evaluation for all individual investment proposals above a stipulated investment value threshold. risks of each proposal are highlighted and all parameters are benchmarked against objective market comparables and historical projects undertaken by the group. Where possible, mitigation strategies are then proposed.
the prolonged financial crisis has reinforced the importance and value of comprehensive and effective risk management. to ensure that the potential returns of new investments are commensurate with the risks undertaken, risk-adjusted weighted average cost of capital and hurdle rates of individual countries and business units are calculated by rag according to their respective risk profiles and adopted as investment benchmarks. they are reviewed annually and when necessary, adjustments are made to reflect higher business risk and costs of investments. this ensures that every investment undertaken will create value for stakeholders on a risk-adjusted basis.
rag continues to promote a culture of risk awareness by developing business development teams and equipping them with optimal risk management skills. in 2012, rag conducted two workshops at capitaland institute of Management and Business. the workshop sessions included but were not limited to investment risk analysis and best practices, and lessons learnt from past investment proposals were interactively shared with staff.
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The Group’s communication efforts have been recognised by the investment community. In 2012, CapitaLand was conferred a number of awards, including the Most Transparent Company – Golden Circle Award and Most Transparent Company (Real Estate) Award in the Securities Investors Association (Singapore) Investors’ Choice Awards 2012; and Best Investor Relations (Large Cap) – Gold Award in the Singapore Corporate Awards 2012. CapitaLand was also accorded the Best Investor Relations By Sector (Real Estate) and Best Investment Community Meetings, and Mr Arthur Lang, its CFO, was also conferred the Best Investor Relations by a CFO, in the IR Magazine South East Asia Awards 2012.
2012 AWARDS
ALPHA SOUTHEAST ASIA
• Most Organised Investor Relations • Strongest Adherence to Corporate Governance • Best Strategic Corporate Social Responsibility
EUROMONEY REAL ESTATE GLOBAL POLL 2012
• Best Developer in Singapore • Best Residential Developer in Singapore • Best Mixed-use Developer in Singapore
IR MAGAZINE SOUTH EAST ASIA AWARDS 2012
• Best Investor Relations By Sector – Real Estate • Best Investor Relations By a CFO – Arthur Lang • Best Investment Community Meetings • South East Asia Top 25 (3rd)
SINGAPORE CORPORATE AWARDS 2012
• Best Investor Relations (Large Cap) – Gold
SECURITIES INVESTORS ASSOCIATION (SINGAPORE) INVESTORS’ CHOICE AWARDS 2012
• Most Transparent Company – Golden Circle Award • Most Transparent Company (Real Estate) –
12th Consecutive year
THE ASSET
• Asset Asia Award 2012 (Real Estate) – Platinum
WORLD FINANCE
• Included in World Finance 100
STAKEHOLDER COMMUNICATION CapitaLand is committed to communicate regularly with shareholders, investors, analysts and the media to provide timely and consistent updates on quarterly financial results and corporate activities.
The Group maintains a high level of investor interaction with its stakeholders through face-to-face meetings, teleconferences, investor conferences, roadshows, site visits and analyst conferences and briefings.
In 2012, Senior Management conducted more than 500 meetings with fund managers and institutional investors. In addition, management also attended 10 conferences including DBS Vickers Pulse of Asia Conference, Bank of America Merrill Lynch ASEAN Star Conference, Nomura ASEAN All Access Conference, Citi Global Property CEO Conference and Credit Suisse 15th Asian Investment Conference.
The Investor Relations team facilitated 22 site visits for fund managers and investors to gain a better insight of projects developed in Singapore and China. Some of the projects the fund managers and investors visited include The Pinnacle (Shanghai), The Paragon (Shanghai), Raffles City Shanghai, Raffles City Chongqing, Dolce Vita (Guangzhou), and the residential sites of Sky Habitat, Bedok Residences, d’Leedon and The Interlace in Singapore.
CapitaLand also proactively engages the media in the markets where it has a presence. In 2012, targeted media from China and Hong Kong visited Singapore for a first-hand insight of the Group’s developments in the Republic. Interviews taken by senior management with key Singapore print and broadcast media also helped to increase understanding of the Group’s strategy and operations.
In 2012, a familiarisation trip for the media and analysts was organised to showcase the Group’s developments in Chengdu, Chongqing and Beijing. During the trip, CapitaLand shed light on how it intends to deepen its presence in the China market with a showcase of its residential developments (mid to high-end properties), shopping malls and mixed developments to reinforce its long-term commitment in China.
CapitaLand also communicates with the media and investment community through other communication tools such as news releases and its user-friendly corporate website to provide real-time updated information.
1ST QUARTER
• FY2011 Financial results briefing to media and analysts and live webcast
• DBS Vickers Pulse of Asia Conference
• BofA Merrill Lynch ASEAN Star Conference
• Nomura Non-Deal Roadshow
• Citi Global Property CEO Conference
• Credit Suisse 15th Asian Investment Conference
2ND QUARTER
• Annual General Meeting
• Release of 1Q2012 financial results
• Citi Asia Pacific Property Conference
• HSBC 2nd Annual ASEAN Conference
• 3rd Annual DB Access Asia Conference
3RD QUARTER
• 1H2012 financial results briefing to media and analysts and live webcast
• Nomura Asia Equity Forum
• CIMB ASEAN Conference
• Goldman Sachs Non-Deal Roadshow
• Macquarie ASEAN Conference
• UBS ASEAN Conference
4TH QUARTER
• Release of 3Q2012 financial results
• Morgan Stanley 11th Annual Asia Pacific Summit
• BNY Mellon 6th Annual Depositary Receipt Issuers’ Conference
2012 INVESTOR RELATIONS CALENDAR
A guided tour of Raffles City Chengdu during the media and analyst trip to Chengdu, Chongqing and Beijing in 2012
STAKEHOLDER COMMUNICATION
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ShAReholDeRS’ CoMMuniCAtion AnD inveStoR RelAtionS PoliCY
1. GeneRAl pOliCY at all times, capitaland is committed to making timely, full and accurate disclosure and distributing other corporate communications materials* in accordance with the singapore code of corporate governance 2012.
1.1 all disclosures submitted to the singapore exchange securities trading limited (“sgX-st”) through sgXnet shall be made available on capitaland’s well maintained and updated corporate website.
1.2 this policy is subject to regular review by the senior management and board of directors of capitaland (the “Board”) to ensure its effectiveness. updates and amendments (as appropriate) will be made to reflect current best practices in our communication with shareholders and the investment community.
* Other corporate communication materials refer to any document issued or to be issued by CapitaLand for the information or action of its Shareholders, including, but not limited to, the annual report, a notice of meeting, a circular and a proxy form.
2. sHAReHOlDeR RiGHTs capitaland is also committed to treating all shareholders fairly and equitably, and would recognise, protect and facilitate the exercise of shareholders’ rights, and continually review and update such governance arrangements by adhering by the following guidelines: 2.1 capitaland would facilitate the opportunity for
shareholders to participate effectively in and vote at general meetings of shareholders. the shareholders would also be informed of the rules, including voting procedures that govern general meetings of shareholders.
2.2 capitaland would allow corporations which provide nominee or custodial services to appoint more than two proxies so that shareholders who hold shares through such corporations can attend and participate in general meetings as proxies.
3. COmmuniCATiOn pRinCiples 3.1 capitaland strives to provide pertinent and accurate
information to its shareholders and the investment community in an effective and timely manner.
3.2 capitaland will use clear and plain language in its communication with its shareholders.
3.3 capitaland endeavours to provide a consistent level of disclosure on both positive and negative developments of the organisation.
3.4 capitaland will communicate only through its designated spokespersons.
3.5 capitaland and its designated senior spokespersons will establish and maintain regular dialogue with shareholders, analysts and the media community through press cum analysts’ briefings, investor roadshows or investors’ Day briefings in order to solicit and understand the views of shareholders, analysts and media.
3.6 capitaland does not respond to rumours. However, if rumours indicate that material information has been leaked or they are in fact false or inaccurate, the rumours will be promptly denied or clarified via announcements made through sgXnet to sgX-st.
3.7 capitaland observes a “blackout period” of two weeks prior to the announcement of its quarterly results and one month prior to the announcement of its full-year results. During this period, capitaland does not comment on industry outlook, the group’s business performance and financial results.
4. COmmuniCATiOn sTRATeGies 4.1 capitaland actively engages its shareholders and the
investment community via:
(i) annual general Meeting (“agM”) and extraordinary general Meeting (“egM”) if necessary;
(ii) quarterly results presentation slides and financial results announced via sgXnet to sgX-st and posted on capitaland’s corporate website;
(iii) half yearly media and analysts’ briefings for half-year and full-year financial results, with “live” webcasts available for viewing on capitaland’s corporate website;
(iv) one-on-one/group meetings or conference calls, investor luncheons, local/overseas roadshows and conferences;
(v) site, property and mall visits; (vi) annual reports; (vii) news releases and statements; (viii) notices of, and explanatory memoranda for
agMs and egMs; and (ix) corporate website (www.capitaland.com)
investors’ Communication 4.2 capitaland meets with investors, the media and
analysts at appropriate times and participates in investor roadshows, and sector conferences throughout the year.
4.3 upon the release of half-year and full-year financial results, capitaland will hold media and analysts’ briefings. “live” webcasts of the briefings are recorded and archived on the corporate website within a reasonable time after the relevant briefing.
Shareholders’ Meetings 4.4 capitaland’s agMs are the principal communication
channels with its shareholders and for shareholders’ participation.
4.5 all shareholders are sent a copy of capitaland’s summary report with notice of agM prior to the agM. as and when an egM of the shareholders is to be held, each shareholder will be sent a copy of a circular with notice of egM which contains details of the matters to be proposed for shareholders’ consideration and approval.
4.6 notices for the general meetings setting out all items of business to be transacted at the general meeting, are also announced via sgXnet to sgX-st.
4.7 Members of the Board, capitaland’s senior management and the external auditors of the organisation are in attendance at all general meetings to address shareholders’ queries. shareholders are given the opportunity to communicate their views on various matters affecting capitaland. a shareholder is allowed to appoint up to two proxies to attend and vote at the general meetings in his/her stead.
4.8 capitaland supports voting by poll at all general meetings and the poll results are announced via sgXnet to sgX-st on the same day of each shareholders’ meeting.
Corporate Website 4.9 capitaland maintains a corporate website
(www.capitaland.com). capitaland’s business developments and operations, financial reports, announcements, news releases and other information are posted on its corporate website. Both current information and archives of previously released information including presentation slides and announcements can be found under the “investor relations” section of the corporate website.
5. COmpAnY COnTACTs 5.1 shareholders can contact our singapore share
registrar at the following address:
M&c services private limited 112 robinson road #05-01 singapore 068902 telephone: +65 6227 6660 Fax: +65 6225 1452
5.2 shareholders and the investment community can contact capitaland’s investor relations team by telephone at +65 6823 3200, or by fax at +65 6820 2202 or by email at [email protected].
6. sHAReHOlDeR pRiVACY capitaland recognises the importance of shareholders’ privacy and will not disclose shareholders’ information without their consent unless required by law.
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Sustainability
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enVironMent, HealtH anD saFetY
enVironMent, HealtH anD saFetY
environmental, health and safety (eHs) is of utmost importance to capitaland. the group’s eHs objectives are guided by its belief that reducing the environmental footprint of its buildings and having an emphasis on occupational health and safety creates value for its stakeholders and is beneficial to the community at large. its stakeholders include employees, tenants, contractors, suppliers and users of its properties.
as an international corporate social citizen, capitaland is committed to protecting the environment and upholding the occupational health and safety of everyone in the workplace, and will: • Carry out exemplary Environmental, Health and Safety practices
to minimise pollution and health and safety risks • Seek continual improvement on its Environmental, Health and
safety performance • Comply with pertinent legislations and other requirements • Implement the CapitaLand Green Buildings Guidelines and Occupational
Health and safety programmes.
this policy is published on www.capitaland.com and is readily available to all employees, suppliers, service providers and partners.
in 2012, capitaland become the first and largest real estate company in asia to receive iso 14001 and oHsas 18001 certification covering 15 countries. these international standards are externally audited annually.
capitaland was listed in the global 100 Most sustainable corporations in the World, sustainability Yearbook, Dow Jones sustainability World index, one of the asian leaders in the global real estate sustainability Benchmark (gresB), asean Business awards 2012 for csr (large company). capitaland was accorded the Building and construction authority (Bca) green Mark champion. its residential business in singapore won the Workplace safety and Health (WsH) Developer award.
capitaland incorporated eHs Key performance indicators (Kpis) linked to the remuneration of all staff, as well as top management. these include green rating for its development projects, energy and water reduction for its operating properties, certified main contractors and zero fatality/permanent disability of its employees, as follows:
Green Ratings: in 2012, capitaland achieved 20 green ratings. in singapore, these include Bca’s top rating green Mark platinum for Bedok residence, Bedok Mall, Bugis+, capitagreen and Junction 8. in china, luwan integrated development achieved the leeD pre-certification gold rating, while the lakeside, Wuhan was awarded 1 star green Building label by the Ministry of Housing and urban-rural Development – the first mass market residence to achieve green rating. in uK, citadines prestige trafalgar square london obtained capitaland’s first BreeaM certification achieving a “Very good” rating.
energy and Water usage Reduction: For the first ten months of 2012, the reduction in energy usage in KWh/m2 was 10.8% and the reduction in water usage in m3/m2 was 16% from the 2008 baseline. capitaland will continue to implement energy and water conservation measures to ensure efficient operations and minimise resource wastage.
Certified Contractors: in 2012, nine main contractors appointed were both iso 14001 and oHsas 18001 certified. they implemented eHs measures at capitaland construction sites as part of their certified eHs Management system.
zero fatality/Permanent Disability: in 2012, none of capitaland’s staff met with work-related fatality or permanent injury.
Beyond developing and operating environmentally sustainable properties in line with eHs best practices, capitaland actively engages its stakeholders. in 2012, it held its inaugural Because iCare awards for environment, Health and safety to recognise its contractors, tenants, service providers and staff for their contribution to eHs in capitaland. over 20 companies and individuals received the awards.
capitaland participates in national efforts towards environmental protection, climate change, and occupational health and safety. in singapore, capitaland is represented in the singapore green Building council, WsH council on construction and real estate, and Bca green Mark advisory committee.
australand, one of capitaland’s regional investments in australia, was represented in eHs committees and workgroups in various cities and states. it was also the gold sponsor of the green-star-communities rating tool by the green Building council of australia. the objective of this rating is to establish a framework for sustainable large scale community development projects across australia. australand staff participated in developing this rating.
the first and largest real estate company in Asia to receive iSo 14001 and ohSAS 18001 certification covering 15 countries for its environmental, health and Safety Management System
achieved certification in 15 countries
Capitaland wins BCA Green mark Champion Award. A total of 68 Green Mark Awards have been accorded to the Group’s properties in Singapore, China, Malaysia and vietnam
green Mark champion award
Recognising more than 20 stakeholders with the Because iCare Awards for environment, health and Safety
Awards recipients of the inaugural CapitaLand Because iCare Awards for Environment, Health and Safety
84
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85
people
people
in capitaland, developing and growing human capital is integral to its business strategy. capitaland has an integrated human capital strategy to recruit, develop and motivate employees. in line with its credo of “Building people”, employees are provided with appropriate development opportunities to perform well in their jobs as they align their individual goals with the company’s business objectives. through deploying progressive workplace policies and practices while inculcating the company’s core values, a positive work environment is created for employees to contribute and pursue their career growth.
huMAn CAPitAl capitaland identifies talents internally and externally to build bench strength as well as talent pipeline for leadership succession planning. capitaland recruits talents through its network of local and overseas universities, and also attracts young talents early through scholarship programmes such as the capitaland–Bca scholarship, capitaland-nus-usp scholarship, capitaland international scholarship and capitaland-MoM national Human resources scholarship. aside from fresh graduates, capitaland also employs experienced and mid-career professionals as well as industry veterans.
in 2012, capitaland expanded its corporate learning and development capability to establish its first capitaland institute of Management and Business (cliMB) overseas in shanghai, china. it targets to serve the training needs of about 7,000 employees in china. cliMB china signed a Memorandum of understanding (Mou) with tongji university’s school of economics and Management in shanghai to expand its network of training partners. through the partnership, capitaland employees can benefit from the teaching faculty and training resources in real estate and business management programmes in this prestigious university. cliMB has provided over 10,850 training places since inception.
the ascott centre for excellence (ace), ascott’s global hospitality training centre in singapore, has provided more than 4,000 training places since 2008, including employees from the hotel and accommodation services sector.
capitaland employees are encouraged to be creative and innovative in generating new ideas, solving problems and continuous improvement. employees can do so by participating in programmes such as in ice (innovation, creativity, and entrepreneurship) activities. to date, more than 2,000 employees have shared ideas at 40 ice camps and related activities held in various countries.
CoMPetitive CoMPenSAtion/ BenefitS capitaland motivates and rewards employees with comprehensive and competitive compensation and benefits programmes. incentives include short-term cash bonuses and long-term equity-based reward plans. the performance-based restricted share plan (rsp) is an attractive long-term incentive offered to employees of managerial grades to provide them with a personal stake in the company, contingent on achieving performance targets. this better aligns employee and shareholder interests to deliver business results. For non-managerial grade employees, an equivalent restricted cash plan (rcp) was implemented with effect from FY2012 to give out cash award when targets are met. the incentive pool is funded by the group’s profitability and economic value-added (eVa) performance to award employees based on their job responsibilities and individual work performance.
regular benchmarking against markets as well as innovation in compensation strategies ensure capitaland remains competitive and continues to attract and retain talent.
pOsiTiVe WORK enViROnmenT capitaland recognises that a positive work environment will better attract, motivate and retain talent. a total employee well-being programme is in place to promote personal development, health and work-life harmony. initiatives include a flexible medical and benefits plan, flexible work arrangements, employee engagement initiatives, and subsidised rates at ascott’s serviced residences. capitaland has grown significantly over the years to be an international company with business presence in more than 20 countries and 110 cities. Work improvement programmes have been implemented to raise the level of employee engagement under the various Because icare initiatives. the diversity of employee profiles provides competitive advantage to have balance and scale in the various business locations internationally, guided by the company’s core values and operating principles.
Capitaland has an integrated human capital strategy to recruit, develop and motivate employees
recruit, Develop and Motivate
Capitaland institute of Management and Business (CliMB) has provided over 10,850 training places since inception
10,850 training places
Employees are provided with appropriate development opportunities to perform well in their jobs as they align their individual goals with the company's business objectives
Capitaland has grown significantly over the years to be an international company with business presence in more than 20 countries and 110 cities
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coMMunitY
coMMunitY
capitaland is committed to be a good corporate citizen through its community development efforts in countries where it operates. capitaland Hope Foundation (cHF), the philanthropic arm of capitaland, was established in 2005 to further its commitment to build a better future for underprivileged children. every year, capitaland allocates up to 0.5% of its net profit to the Foundation. since 2005, cHF has donated over s$18 million to support education, healthcare and shelter needs for underprivileged children aged six to 16 in singapore and overseas.
in singapore, capitaland continued to extend its reach to the underprivileged children in 2012 through green for Hope @ capitaland, a creative recycling campaign that marries green efforts with philanthropy. the programme matches donations to recyclable waste collected at participating capitaland properties and raised s$700,000 to benefit more than 5,000 underprivileged children under the five community Development councils in singapore.
as the presenting sponsor and conservation Donor of the 10-year singapore-china giant panda collaborative programme, capitaland aims to enhance awareness about wildlife conservation and develop educational programmes to engage underprivileged children in contributing towards biodiversity. through the capitaland Because iCare Kai Kai and Jia Jia charity Drive, cHF raised more than s$300,000 to benefit president’s challenge 2012. corporate donors bought 10 limited edition Kai Kai and Jia Jia philatelic frames and more than 10,000 Because iCare Kai Kai and Jia Jia panda eco-bags were sold to the public across capitaland properties in singapore to raise funds. the charity drive was launched by president tony tan Keng Yam at the new giant panda Forest.
in line with its credo of ‘Building people’, capitaland embarked on a 10-year support programme called capitaKids programme in singapore and china. the programme commits to support the education needs of a selected group of underprivileged children known as capitaKids, for a period of 10 years. in china, the programme was awarded 2012 excellent csr case by china association of social Workers and china philanthropy times. With education being pivotal in breaking the vicious cycle of poverty and social exclusion, capitaland has also helped to build 23 capitaland Hope schools in remote areas of china as well as one capitaland Hope school in Vietnam to provide underprivileged children with a conducive learning environment.
For its efforts, capitaland was awarded singapore compact csr awards 2012 – Best community Developer award and 2012 asean Business awards – Most admired asean enterprise for the category of corporate social responsibility (large company). capitaland china was also conferred china Best corporate citizen award for the fifth year running in 2012 by the china committee of corporate citizenship and cctV2 in recognition of its excellent csr practices in china.
capitaland actively promotes volunteerism in its people. as the first company in singapore to formalise a three-day Volunteer service leave system, capitaland has expanded its leave policy to include Volunteer no pay leave and Volunteer part-time leave. in 2012, more than 2,000 capitaland staff volunteered over 19,000 hours during work days to participate in various volunteering activities across asia. the company achieved about 17% staff volunteer participation rate group-wide.
over 260 volunteering activities were rolled out in 2012 in asia where staff volunteers interacted with over 26,000 children beneficiaries supported by cHF. For example, two volunteer expeditions to china and indonesia were organised to engage staff in overseas community service projects. thirty staff volunteers spent almost a week at capitaland longdong Hope school in sichuan, china to set up a reading room, a library with a collection of 10,000 books as well as a dining hall.
Capitaland hope foundation has donated over S$18 million to support education, healthcare and shelter needs for underprivileged children
>s$18m Donated since 2005
Overseas staff volunteer expedition at CapitaLand Longdong Hope School, Sichuan, China
More than 2,000 Capitaland staff volunteered over 19,000 hours during work days to participate in various volunteering activities across Asia
>19,000 Volunteer Hours
Capitaland was awarded Singapore Compact CSR Awards 2012 – Best Community Developer Award and 2012 ASeAn Business Awards – Most Admired ASeAn enterprise for the category of Corporate Social Responsibility (large Company)
UNITED KINGDOM
BELGIUM
FRANCE
SPAIN
GERMANY
GEORGIA
BAHRAIN QATAR
UAE OMAN
INDIA
CHINA SOUTH
JAPAN
THAILAND PHILIPPINES
SINGAPORE
INDONESIA
AUSTRALIA
KOREA
VIETNAM
MALAYSIA
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gloBal presence As at 21 February 2013
raffles city Developments
Multi-sector
schools/Facilities
serviced residences
Mixed Developments
Financial services
Homes
offices
shopping Malls
Asia Pacific
AuStRAliA adelaide Brisbane Hobart Melbourne perth sydney
ChinA anyang Beijing changsha chengdu chongqing Dalian Deyang Dongguan Foshan guangzhou Harbin Hangzhou Hong Kong Huhhot Kunshan Macau Maoming Mianyang nanchang
ningbo Qingdao Quanzhou rizhao shanghai shenyang shenzhen suzhou tianjin Weifang Wuhan Wuhu Xi’an Xiamen Xinxiang Yangzhou Yibin Yiyang Zhangzhou Zhanjiang Zhaoqing Zhengzhou Zibo
inDiA ahmedabad Bangalore chennai
cochin Hyderabad Jalandhar Mangalore Mumbai Mysore nagpur udaipur
inDoneSiA Jakarta surabaya
JAPAn chitose eniwa Fukuoka Hiroshima Kobe Kyoto nagoya osaka saga sapporo sendai tokyo
MAlAYSiA cyberjaya Kuala lumpur Kuantan Kuching nusajaya penang petaling Jaya shah alam
PhiliPPineS Manila
SinGAPoRe
South koReA seoul
thAilAnD Bangkok
vietnAM Danang Hai phong city Hanoi Ho chi Minh city
BelGiuM Brussels
fRAnCe Bordeaux cannes Ferney-Voltaire grenoble
lille lyon Marseille Montpellier nice paris strasbourg toulouse
europe
GeoRGiA tbilisi
GeRMAnY Berlin Frankfurt Hamburg Munich
SPAin Barcelona
uniteD kinGDoM london
BAhRAin Manama
oMAn Muscat
Gulf Cooperation Council Countries
qAtAR Doha
uniteD ARAB eMiRAteS abu Dhabi Dubai
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perForMance oVerVieW
revenue from capitaland residential singapore saw a 10% increase to s$854.3 million as compared to FY2011. this was due to commencement of revenue recognition for units sold in sky Habitat and continued progressive revenue recognition from units sold from the interlace and urban resort condominium.
revenue from capitaland china Holdings fell by 23% to s$404.1 million as fewer units were handed over to homebuyers in the current year. in 2012, revenue was recognised for units sold and delivered from the Metropolis and the pinnacle in shanghai, as well as riverside Ville and Beau residences in Foshan.
capitaland commercial recorded a decrease in revenue by 11% to s$86.5 million due to the absence of revenue from the adelphi and corporation place following its divestment in January and December 2011 respectively, partially mitigated by higher fee income from project management.
peRFORmAnCe OVeRVieW capitaland group achieved a profit after tax and non-controlling interests (patMi) of s$930.3 million for the full year ended 2012, despite challenges posed by the uncertain global economy, european debt crisis and policy restrictions imposed by both the singapore and chinese government to cool the property market.
Revenue revenue for FY2012 was s$3.30 billion which was 9% higher than FY2011. the increase was fuelled by higher contribution from development projects in singapore and australia, shopping mall business and fee-based income. geographically, singapore and china operations contributed about 53% or s$1.76 billion of the group’s revenue.
perForMance oVerVieW
revenue from ascott improved marginally to s$381.7 million as the contributions from newly acquired serviced residences and higher property management fees were partially offset by the absence of contribution from divested properties.
capitaValue Homes recorded lower revenue at s$3.9 million due to fewer units sold and handed over to buyers for the Vista in Vietnam which was completed in FY2011.
revenue for capitaland Financial increased by 11% to s$114.1 million due to one-off acquisition and divestment fees earned from our reits as well as higher interest income. in FY2012, acquisition fees earned were in respect of the acquisition of twenty anson, ascott raffles place and ascott guangzhou, while the divestment fee was related to somerset grand cairnhill.
capitaMalls asia’s revenue grew 44% to s$353.7 million mainly due to contribution from the four malls in Japan acquired during the year, the star Vista which began operations in september 2012, improved management fee, leasing commission from new mall openings and new projects undertaken.
australand’s revenue rose by 33% as it recorded higher sales from development projects and higher rental income from investment properties.
capitaland residential singapore
capitaland china Holdings
capitaland commercial
the ascott limited
capitaValue Homes
capitaland Financial
capitaMalls asia
australand
2012 Revenue BY StRAteGiC BuSineSS unit Total: s$3.30 billion
10.6% 3.4%
25.7%
12.1%
2.6% 11.5%
34.0%
0.1%
2011 Revenue BY StRAteGiC BuSineSS unit Total: s$3.02 billion
25.5%
17.3%
3.2%
27.5%
8.1%
3.4% 2.6%
12.4%
singapore
china (including Hong Kong and Macau)
australia
europe
other asia (excluding singapore and china)
others
2012 Revenue BY GeoGRAPhiCAl loCAtion Total: s$3.30 billion
35.4%
0.8%
17.8%
6.0%
4.2%
35.8%
2011 Revenue BY GeoGRAPhiCAl loCAtion Total: s$3.02 billion
35.6%
1.1%
22.0%
6.6%
5.2%
29.5% 2012 20122011 2011
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<--------------------------------------------------> unlisted
<----------------> listed
-200
0
200
400
600
800 s$ million ----------------------------------------------------
<--------------------------------------------------> unlisted
<----------------> listed
-200
0
200
400
600
800 s$ million ----------------------------------------------------
australia and europe, while those in Malaysia and Japan recorded higher fair value gains. the higher impairment losses were mainly in respect of the projects in Vietnam as the demand and sentiment in Vietnam have weakened considerably.
singapore and china operations remain the key contributors to eBit, accounting for 77% of total eBit (FY2011: 81%). singapore eBit was s$893.8 million or 44% while china eBit was s$658.4 million or 33%.
eBit contribution from capitaland residential singapore increased marginally to s$328.2 million on account of the higher revenue, partially offset by lower write back of impairment charge for urban suites.
capitaland china Holdings registered an eBit of s$322.8 million which was 24% lower than last year due to lower revenue and lower gains from divestments. the decrease was partially mitigated by higher revaluation gains mainly from its raffles city portfolio.
eBit from capitaland commercial was s$174.2 million. this was 8% lower than the eBit of s$189.6 million achieved in FY2011 due to lower fair value gains from the revaluation of investment properties and lower divestment
eARninGS BefoRe inteReSt AnD tAx (eBit) AnAlYSiS the group achieved eBit of s$2.02 billion which was 3% lower than FY2011’s eBit of s$2.09 billion.
the details of the group’s eBit are as follows:
fY2012 fY2011
S$ million % S$ million %
operating profits 1,268.9 63 1,119.5 54 portfolio gains 239.7 12 260.5 12 revaluation gains 611.9 30 773.1 37 impairments (103.1) (5) (66.5) (3) total eBit 2,017.4 100 2,086.6 100
operating profits were higher compared to FY2011, driven by improved contributions from development projects in singapore, china and australia, as well as the group’s shopping mall business. However, this increase was offset by lower revaluation gains and portfolio gains as well as higher impairment losses, resulting in the overall eBit being slightly lower than last year. the group recorded lower fair value gains in respect of investment properties in singapore, china,
perForMance oVerVieW
perForMance oVerVieW
gains, partially mitigated by a write back of provision for income support for one george street.
ascott recorded a higher eBit of s$163.2 million in FY2012 as compared to s$148.4 million in FY2011. this was mainly attributable to higher portfolio gains from the divestment of ascott raffles place, ascott guangzhou and citadines ashley Hongkong and contributions from newly acquired properties. this increase was partially offset by lower share of net fair value gains from ascott residence trust and ascott serviced residence (china) Fund.
capitaValue Homes posted a higher loss of s$80.9 million in FY2012 compared to a loss of s$12.9 million in FY2011. the higher loss was mainly due to lower revenue for the Vista, operating costs for business expansion in china, as well as provision for foreseeable losses primarily for its projects in Vietnam as the demand and sentiment in Vietnam have weakened considerably.
eBit for capitaland Financial saw a decrease of 15% to s$67.8 million primarily due to an allowance for doubtful receivables and the absence of portfolio gains, partially mitigated by lower operating costs and the absence of foreign exchange losses.
capitaMalls asia recorded an eBit of s$676.2 million which was higher than FY2011’s eBit of s$597.0 million. the improvement was largely contributed by the portfolio gain in relation to the injection of capitaMall tianfu and capitaMall Meilicheng into capitaMalls china Development Fund iii and the disposal of Hougang plaza by capitaMall trust, contribution from the four Japan malls and improved results from the management fee business. the increase was partially offset by lower fair value gains and impairment losses taken up for its investments in india.
australand achieved an eBit of s$357.3 million in FY2012 as compared to s$324.2 million in FY2011. the increase was mainly attributable to higher development profits from its residential division, higher rental income from the investment property division and the absence of write down of development projects, partially offset by lower fair value gains from the revaluation of investment properties.
others comprised the corporate office, surbana and businesses in gulf cooperation council countries. eBit in FY2012 amounted to s$8.7 million, mainly attributable to the fair value gains from the revaluation of investment properties, partially offset by the impairment of projects in Bahrain and Kazakhstan.
capitaland residential singapore
capitaland china Holdings
capitaland commercial
the ascott limited
capitaValue Homes
capitaland Financial
others
capitaMalls asia
australand
2012 eBit BY StRAteGiC BuSineSS unit Total: s$2.02 billion
328 323
174 163
(81)
68
357*
676*
9
2011 eBit BY StRAteGiC BuSineSS unit Total: s$2.09 billion
327 424
190 148
(13)
80
324*
597*
10
* Represents 100% EBIT at CapitaMalls Asia and Australand level.
singapore
china (including Hong Kong and Macau)
australia
europe and others
other asia (excluding singapore and china)
2012 eBit BY GeoGRAPhiCAl loCAtion Total: s$2.02 billion
0
200
400
600
800
1,000 s$ million
894
658
365
80 20
2011 eBit BY GeoGRAPhiCAl loCAtion Total: s$2.09 billion
0
200
400
600
800
1,000 s$ million
877 813
337
4713
94 95
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14.4%
2.9%
35.4%
8.6%
38.7%
21.1%
4.5%
33.1%
3.3%
14.5%
3.6%
19.9%
Singapore
China (including Hong Kong)
Australia
Europe
Other Asia (excluding Singapore and China)
PATMI ANALYSIS The Group’s PATMI for FY2012 was S$930.3 million. Excluding revaluations and impairments, as well as divestments, the operating PATMI was S$369.3 million which is 5% higher than FY2011’s operating PATMI of S$352.1 million.
The analysis of the Group’s PATMI is shown below:
PErFOrMAnCE OvErvIEw
PErFOrMAnCE OvErvIEw
2012 TOTAL ASSETS BY CATEGORY Total: S$37.8 billion
2012 TOTAL ASSETS BY GEOGRAPHICAL LOCATION Total: S$37.8 billion
Investment Properties
Associates and Joint ventures
Development Properties for Sale and Stocks
Properties, Plant and Equipment
Cash and Cash Equivalents
Other non-Current Assets
Other Current Assets
DIVIDENDS The Board of Directors is pleased to propose an ordinary dividend of 7.0 cents per share in respect of the financial year ended 31 December 2012 versus 6.0 cents per share in the previous year. This amounts to a payout of approximately S$297.6 million based on the number of issued shares (excluding 19,611,437 treasury shares) as at 31 December 2012. The dividends are subject to the shareholders’ approval at the forthcoming Annual General Meeting of the Company.
For FY2011, a first and final dividend of 8.0 cents per share, comprising an ordinary dividend of 6.0 cents per share and a special dividend of 2.0 cents per share were approved and paid. The said dividends of S$340.0 million were paid in May 2012.
0
400
600
800
200
Operating Profits
Portfolio Gains
revaluation Gains
Impairment Total PATMI
1,000
1,200 S$ million
40%
100%369 21%
199
48%
451 -9% (89)
930
FY2012 PATMI
0
400
600
800
200
Operating Profits
Portfolio Gains
revaluation Gains
Impairment Total PATMI
1,000
1,200 S$ million
33%
21%
51%
352
222
534 -5% (51)
100%
1,057
FY2011 PATMI
ASSETS The Group’s total assets as at 31 December 2012 were S$37.8 billion, of which Singapore and China accounted for approximately 74% of the Group’s total assets. The total assets increased by S$2.5 billion or 7% from 2011’s total assets of S$35.3 billion mainly due to the acquisitions and new investments made during the year, in particular, acquisition of 50% stake in two shopping malls and an office building in Shanghai, equity injection into raffles City Chongqing, acquisition of The
Cavendish London in United Kingdom and four shopping malls in Japan, as well as fair value gains from the revaluation of the Group’s investment properties portfolio.
As at 31 December 2012, the Group managed S$63.8 billion* of real estate assets; firmly entrenching its position as one of Asia’s largest real estate companies.
* This refers to the value of all real estate managed by CapitaLand Group entities stated at 100% of the property carrying value.
2012 2012
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25.4%
16.2%
9.0%
14.3%
33.5%
10.6%
28.6%
13.1%
12.2%
35.5%
capitaland singapore
capitaland china
ascott
capitaMalls asia
Financial product & services and regional investments
corporate
2012 PRofoRMA Revenue BY StRAteGiC BuSineSS unit Total: s$3.30 billion
2012 PRofoRMA eBit BY StRAteGiC BuSineSS unit Total: s$2.02 billion
1.6%
PRofoRMA finAnCiAlS of ReoRGAniSeD SBuS in January 2013, the group announced an organisational realignment to sharpen our focus on the key markets of singapore and china to realise its growth potential. the four business units – capitaland singapore, capitaland china, capitaMalls asia and ascott – accounted for about 80% of group assets and 84% of group eBit in FY2012, on a proforma basis.
BORROWinGs as at 31 December 2012, the group’s gross debt stood at s$14.2 billion, an increase of s$2.0 billion over 31 December 2011’s gross debt. With a cash balance of s$5.5 billion, the net debt as at 31 December 2012 was s$8.7 billion as compared to s$5.9 billion as at end 2011. the net debt position as at 31 December 2012 was higher as the group had utilised its cash as well as drawn on new borrowings to fund its ongoing capital commitments as well as acquisitions and investments made during the year.
the group’s net debt equity ratio remained healthy at 0.45 as at 31 December 2012 (2011: 0.31).
ShAReholDeRS’ equitY as at 31 December 2012, issued and paid-up ordinary share capital (excluding treasury shares) of the company comprised 4.25 billion shares at s$6.3 billion. the group’s total reserves increased from s$8.6 billion in December 2011 to s$8.8 billion in December 2012. this increase was mainly contributed by the s$930.3 million net profit for the year, partially offset by exchange losses arising from the translation of foreign operations and payment of the 2011 dividends during the year. the shareholders’ funds rose to s$15.1 billion as at end 2012 compared to s$14.9 billion in 2011. accordingly, the group’s net tangible assets per share increased to s$3.44 as at 31 December 2012.
perForMance oVerVieW
perForMance oVerVieW
2012 2012
16.9%
21.6%
9.9%
19.3%
31.3%
1.0%
2012 PRofoRMA ASSetS (ex-tReASuRY CASh) BY StRAteGiC BuSineSS unit
Total: s$34.5 billion
2012
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OVeRVieW the group strives to maintain a prudent capital structure and actively reviews its cashflows, debt maturity profile and overall liquidity position on an ongoing basis to support the dynamic nature of its businesses. the main sources of the group’s operating cashflows are derived from residential sales, fees and rental income. as part of its liquidity management to support its funding requirements, investment needs and growth plans, the group actively diversifies its funding sources through capital recycling and puts in place a mix of undrawn banking facilities and capital market programmes. the global financial outlook remains uncertain with the ongoing european debt crisis and slow recovery in the us economy. against this backdrop, the group continues to maintain strong cash reserves at s$5.5 billion compared to s$6.3 billion last year. the difference was mainly attributed to higher cash outlays as a result of the group committing to new investments in 2012. the group’s total gross debt of s$14.2 billion was 16% higher as compared to s$12.2 billion last year. net debt of s$8.7 billion as at December 2012 was higher as the cash balance was lower due to an increase in new investments. the net debt equity ratio of 0.45 puts the group in a healthy financial position to weather the volatility in the markets and is well-positioned to invest for the next phase of growth.
Finance costs for the group were s$499.0 million for the year ended 2012. this was about 6% higher compared to
s$472.8 million last year. the higher finance costs were largely due to higher gross debt balance.
SouRCeS of funDinG as at year end, 52% of the group’s total debt was funded by bank borrowings and the balance 48% was raised through capital market issuances. the group continues to seek diversified and balanced sources of funding for its loan portfolio so as to ensure financial flexibility and mitigate concentration risk. During the year, bank loans increased by about s$851 million mainly as a result of higher secured project financings within the group for new committed investments. During the year, capitaland treasury limited (capitaland’s 100% owned funding vehicle) has established its first euro Medium term note programme and has raised us$400 million off the programme.
CoMMitMent of funDinG as at end 2012, the group is able to achieve almost 100% of its funding from committed facilities.
as part of its financial discipline, the group constantly reviews its portfolio to ensure that a prudent portion of committed funding is put in place to match the investments’ planned holding periods. amidst the volatile and uncertain global economic climate, committed financing is secured whenever possible to support its investments and to ensure that the group has sufficient financial capacity to support its operations and future growth plans.
perForMance oVerVieW
perForMance oVerVieW
treasury highlights 2012 2011
Bank facilities And Available funds Bank facilities available (s$m) 10,439 9,961 amount utilised for loans (s$m) 7,383 6,532 available and unutilised (s$m) 3,056 3,429 cash and fixed deposit balances (s$m) 5,498 6,264 unutilised facilities and funds available for use (s$m) 8,554 9,693 Debt Securities Capacity Debt securities capacity (s$m) 15,604 10,209 Debt securities issue (net of debt securities purchased) (s$m) 6,797 5,659 unutilised debt securities capacity (s$m) 8,807 4,550 interest Cover Ratio earnings before net interest, tax, depreciation and amortisation (s$m) 2,229 2,242 net interest expense (s$m) 405 392 interest cover ratio (times) 5.50 5.72 interest Service Ratio operating cashflow before interest and tax (s$m) 1,658 1,209 net interest paid (s$m) 506 444 interest service ratio (times) 3.28 2.72 Secured Debt Ratio secured debt (s$m) 2,864 2,482 percentage of secured debt 20% 20% Debt equity Ratio gross debt (s$m) 14,180 12,191 cash and fixed deposit balances (s$m) 5,498 6,264 net debt (s$m) 8,682 5,927 equity (s$m) 19,444 19,239 net debt equity ratio (times) 0.45 0.31
Bank and other loans
Debt securities
committed
uncommitted
SouRCeS of funDinG
0
2
4
6
8
10
12
14
16 s$ billion
47%
53%
$9.8b $10.3b $10.4b
$12.2b
$14.2b
48%
52%
45%
55%
54%
46%
52%
48%
2008 2009 2010 2011 2012
CoMMitMent of funDinG
0
2
4
6
8
10
12
14
16 s$ billion
97%
3.0% $9.8b $10.3b
$10.4b
$12.2b
$14.2b
100% 99%
1.0%
99.6%
0.4%
99.8%
0.2%
2008 2009 2010 2011 2012
100
Business Review
101
inteReSt RAte PRofile the group manages its finance costs by maintaining a prudent mix of fixed and floating rate borrowings. as at 31 December 2012, the fixed rate borrowings constituted 77% of the portfolio and the balance 23% were on floating rate basis. as finance costs formed an integral component of the group’s operating costs, a higher percentage in fixed rate funding would offer protection against unexpected rise in interest rates. the remaining portfolio was maintained on a floating rate basis to capitalise on the current low interest rate environment and prepayment flexibility from operational cash surplus. in managing the interest rate profile, the group takes into account the interest rate outlook of its loan portfolio, holding periods of its investment portfolio, certainty of its planned divestments and operating cashflow generated from residential sales.
MAtuRitY PRofile the group has proactively built up sufficient cash reserves and credit lines to enable it to meet its short term debt obligations, support its refinancing needs and pursue opportunistic investments. the group maintains a strong cash position of s$5.5 billion and unutilised bank lines of about s$3.1 billion. to ensure financial discipline, the group constantly reviews its loan profile so as to diversify the refinancing risks, avoid concentration and extend its maturity profile where possible. in reviewing the maturity profile of its loan portfolio, the group also took into account any divestment or investment plans, interest rate outlook and the prevailing credit market conditions.
AvAilABle lineS BY nAtionAlitY of BAnkS the group has built up an extensive and active relationship with a network of more than 30 banks of various nationalities. Diversity has allowed the group to tap on the strengths and support from the financial institutions in pursuing its strategic growth and presence globally, thus enhancing its competitiveness in core markets and enabling the group to develop other markets where appropriate.
inteReSt CoveR RAtio AnD inteReSt SeRviCe RAtio the interest cover ratio (“icr”) and interest service ratio (“isr”) was 5.50 and 3.28 respectively. icr was slightly lower at 5.50 compared to 5.72 last year, primarily attributed to higher interest expenses as a result of increased borrowings. net interest expense increased marginally by 3% to s$405 million. isr improved from 2.72 last year to 3.28 in 2012 due to higher cashflows generated from development projects.
perForMance oVerVieW
perForMance oVerVieW
DeBt MAtuRitY PRofile
0
1
2
3
4
5 s$ billion
6%
$0.8b
$1.6b
$2.4b
$3.9b
$0.8b
$4.7b
11% 17% 27% 6% 33%
Within 1 year
2 years 3 years 4 years 5 years More than 5 Years
AvAilABle lineS BY nAtionAlitY of BAnkS
Note: Convertible Bonds are reflected as held till final maturity.
singapore
Japan
australia
europe
others
34%
31%
11%
13%
11%
Fixed
Floating
inteReSt RAte PRofile inteReSt CoveR RAtio AnD inteReSt SeRviCe RAtio
0
2
4
6
8
10
12
14
16 s$ billion
75%
25%
$9.8b $10.3b $10.4b
$12.2b
$14.2b
66%
34%
72%
28%
66%
34%
77%
23%
2008 2009 2010 2011 2012 0
2
4
6
8
10 times
3.86
5.50
4.60
2.72 3.28
2008 2009 2010 2011 2012
4.49
4.54
7.63
5.72 5.50
interest cover ratio
interest service ratio
102
Business Review
103
group Businesses
group Businesses oRGAniSAtionAl ReAliGnMent AnD SiMPlifiCAtion on 3 January 2013, capitaland realigned and simplified its organisational structure into four main businesses to sharpen its focus on key markets and to realise its growth potential. the four main businesses are capitaland singapore, capitaland china, capitaMalls asia (cMa) and the ascott limited (ascott).
the following is a broad overview of the four businesses:
1. CApiTAlAnD sinGApORe capitaland singapore, a wholly-owned subsidiary
of capitaland limited, is one of singapore’s leading developers and owners of homes, office and mixed development projects. it comprises the businesses of capitaland residential singapore, the singapore businesses under capitaland commercial, and capitaland’s residential, office and mixed development businesses in Malaysia.
capitaland singapore is the sponsor and manager of two commercial real estate investment trusts, capitacommercial trust and Quill capita trust, separately listed in singapore and Malaysia.
capitaland singapore invests, develops and manages homes, offices and mixed developments in singapore and Malaysia.
2. CApiTAlAnD CHinA capitaland china, the leading foreign real estate
developer in china, is a wholly-owned subsidiary of capitaland limited. it comprises the businesses of capitaland china Holdings and the residential businesses under capitaValue Homes limited in china.
its core business ranges from homes, commercial properties to mixed developments and financial services. With a portfolio of about 48,000 units of residences, 16 commercial projects and 8 raffles city mixed developments in china, it also manages six real estate funds in china.
certified as a china Well-Known trademark, capitaland china is dedicated to provide quality products and services to customers.
3. CApiTAmAlls AsiA cMa is one of the largest listed shopping mall
developers, owners and managers in asia by total property value of assets and geographic reach. cMa has an integrated shopping mall business model encompassing retail real estate investment, development, mall operations, asset management and fund management capabilities. it has interests in and manages a pan-asian portfolio of 101 shopping malls across 52 cities in the five countries of singapore, china, Malaysia, Japan and india, with a total property value of approximately s$31.7 billion and a total gFa of approximately 92.5 million square feet as at 31 December 2012.
4. AsCOTT ascott is the world’s largest international serviced
residence owner-operator with more than 22,000 operating serviced residence units in key cities of asia pacific, europe and the gulf region, as well as over 9,000 units which are under development, making a total of more than 31,000 units in over 200 properties.
in addition, there are two areas which fall under capitaland group Headquarters, namely Financial products & services and regional investments.
capitaland’s Financial products & services unit oversees the group’s real estate financial products and services. it has an established track record in originating, structuring, distributing and managing real estate financial products. its areas of focus include originating, structuring and managing private real estate funds, listed real estate investment trusts (reits) and structuring credit enhancements for financing arrangements in relation to real estate assets.
the regional investments unit manages regional real estate investments that fall outside the four main business units. these include capitaland Vietnam, australand, surbana, and storHub, as well as investments in Japan, india, united Kingdom and gulf cooperation council.
capitaland singapore and capitaland china’s businesses include residential, commercial and mixed developments.
the group’s regional investments in capitaland Vietnam, australand, surbana, storHub and the overseas markets of Japan, india, gcc and united Kingdom, as well as real estate financial products and services, come under the group Headquarters.
CAPitAlAnD SinGAPoRe
ShoPPinG MAllS
SeRviCeD ReSiDenCeS
CAPitAlAnD ChinA
104 105
Business Review capitalanD singapore
capitalanD singapore Capitaland Singapore is one of Singapore’s leading developers and owners of distinctive and quality homes, offices and mixed-use developments.
SinGAPoRe PRoPeRtY MARket singapore’s residential market turned in record home sales of 22,197 units in 2012, despite the global uncertainty and cooling measures introduced during the year, surpassing last year’s 15,904 units.
singapore’s core central Business District’s office occupancy rate declined by 1% to 92.2% in end-2012. grade a office market monthly rent was s$9.58 per square foot (psf) in the fourth quarter of 2012, a 2.2% decrease quarter on quarter. However, rental outlook is expected to be positive as new supply will be limited over the next three years.
A foCuS on DiStinCtive AnD quAlitY hoMeS in CentRAl loCAtionS capitaland continued to achieve steady sales in 2012, achieving total sales of 681 homes with sales value amounting s$1.3 billion. this is largely driven by its focus on building distinctive and quality homes in central locations and near Mrt stations.
located in Bishan central, the 509-unit sky Habitat designed by Moshe safdie was launched in april 2012. the iconic condominium features a dramatic architectural form of two 38-storey towers interconnected by three bridging gardens. 70% of the 180 units launched were sold in its first weekend of sales.
capitaland and the ascott limited completed their acquisition of the somerset grand cairnhill singapore in september 2012. they will jointly redevelop it into capitaland’s first integrated development comprising a serviced residence (with a hotel licence) and a high-end residential development with some 270 units.
in november 2012, a capitaland and Mitsubishi estate asia pte ltd joint venture successfully bidded for a residential site at Bishan street 14 at a tender price of s$505.1 million in a government land sales tender. the site will be developed into a condominium with about 700 units. this new development will complement neighbouring sky Habitat in terms of its unit mix and unit size with its own distinctive architectural design.
in the last quarter of 2012, new phases were launched at sky Habitat, the interlace and d’leedon. Bedok residences which was launched in november 2011 is almost fully sold.
GROWinG OFFiCe pORTFOliO in sinGApORe in 2012, capitaland enhanced the value of its commercial properties through active portfolio management and asset upgrading.
capitacommercial trust, capitaland’s listed commercial reit grew its portfolio to a total asset size of s$7.0 billion at end-December 2012. cct acquired twenty anson, a well-located new prime office tower in March 2012 for a property price of s$430.0 million.
TWO JV DeVelOpmenTs On sCHeDule FOR COmpleTiOn in 2014 capitaland’s two commercial projects – Westgate, a mixed-use development and capitagreen, a grade a office tower, commenced construction in January 2012 and February 2012 respectively.
construction for the s$1.4 billion capitagreen development is expected to be completed in end 2014. in May 2012, capitagreen won the green Mark platinum award, conferred by singapore’s Building and construction authority in recognition of its highest standard achieved for environmental sustainability.
Westgate is a s$1.5 billion development comprising an office building and a shopping mall. construction for Westgate tower, the office building, is expected to be completed by end 2014. of the total 320,000 square feet of prime office space, about 50% is pre-leased to capitaland group. about half of the shopping mall, Westgate, has also been pre-leased more than a year ahead of its targeted opening in December 2013.
Capitaland continued to achieve steady sales in 2012, achieving total sales of 681 homes with sales value amounting s$1.3 billion
s$1.3b sales Value
CapitaGreen won the Green Mark Platinum Award, conferred by Singapore’s Building and Construction Authority in recognition of its highest standard achieved for environmental sustainability
1 Wen KHAi menG Ceo capitalanD singapore (From 3 January 2013) Ceo capitalanD Financial liMiteD (until 2 January 2013) Chief inveStMent offiCeR capitalanD liMiteD (until 5 February 2012)
2 WOnG HeAnG Fine Ceo resiDential, capitalanD singapore (From 3 January 2013) Ceo capitalanD resiDential singapore pte ltD (until 2 January 2013)
3 MARGARet Goh Ceo special proJects, capitalanD singapore (From 3 January 2013) Ceo special proJects, capitalanD liMiteD (until 2 January 2013)
4 lYnette leonG Ceo capitacoMMercial trust ManageMent liMiteD
3 4
1 2
SkY hABitAt Singapore
Revenue (S$m)
951.0
512.9
fY2012 (PRofoRMA)(1)
(1) The Group’s revenue and EBIT for FY2012 are presented based on the new organisation structure wef 3 January 2013. Revenue and EBIT for SBUs have included the fund management fees from the respective REIT/funds owned by the SBU.
eBit (S$m)
106 107
capitalanD cHina
capitalanD cHina
Capitaland sold over 3,000 residential units, achieving total sales value of approximately RmB7.0 billion
in the last 18 years, Capitaland has been deepening its presence in the China market with a portfolio consisting of homes, office buildings, shopping malls, serviced residences and mixed developments. its multi-sector, multi-geography business model provides a diversified earnings base.
SteADY ReSiDentiAl SAleS AnD DeveloPMent the short-term volatility in the market as a result of credit tightening and the government’s measures to restrict the purchase of residential properties affected real estate companies in general. nevertheless, capitaland’s projects have been able to ride the market with steady performance. in 2012, capitaland sold over 3,000 residential units, achieving total sales value of approximately rMB7.0 billion. i-park was launched as phase 1 of the raffles city development in shenzhen. new units at the pinnacle in shanghai, the Metropolis in Kunshan, the imperial Bay in Hangzhou, the loft in chengdu and Beaufort in Beijing were also released for sale.
capitaland acquired a second site in shanghai’s pudong District, jointly with shanghai lingang Wanxiang economic Development (WeD), a local state-owned enterprise to develop about 700 residential units. to date, capitaland has a pipeline of approximately 28,000 units of residence in china.
RAffleS CitY enteRS PRiMe tiMe in ChinA capitaland has followed the pulse of china’s economic development by accurately positioning and pushing forward its products. capitaland expanded the footprint of its signature raffles city mixed development in china. raffles city shenzhen started construction in august, while raffles city chengdu held an inauguration ceremony graced by Mr lee Hsien loong, prime Minister of singapore in september. on the first day of its business operation, raffles city chengdu attracted more than 150,000 visitors. in the same month,
raffles city chongqing, capitaland’s biggest investment in china and the largest single investment by any singapore firm in the country, held a ground-breaking ceremony, followed by the grand opening of raffles city ningbo as the first mixed development in the Jiangbei District. raffles city shanghai and raffles city Beijing continue to achieve strong rental growth. the construction of raffles city shanghai changning and raffles city Hangzhou is also underway. together, the eight raffles cities in china offer over 2.8 million square metres of floor space and will be worth s$12.0 billion when completed.
ReAl eStAte funDS in ChinA capitaland has established a strong track record in originating, structuring and managing real estate funds and financial products. capitaland china is managing six real estate funds in china. capitaland china Development Fund i (us$400.0 million), Fund ii (us$239.8 million) and capitaland china Value Housing Fund (us$215.0 million) primarily invest in residential business in china. raffles city china Fund (us$1.18 billion), raffles city changning JV (s$1.03 billion) and ctM property trust (s$1.12 billion) are deployed into mixed developments in china. together, they provide a platform for our capital partners to participate in china’s real estate businesses.
futuRe PRoSPeCtS capitaland remains confident in china’s growth. through years of perseverance and effort, china has grown to become the largest overseas market for capitaland. By integrating international concepts with local practices and with a balanced portfolio and financial stability, capitaland will continue to contribute towards china’s urbanisation and its development of the real estate industry. capitaland will also continue to seek opportunities to acquire new development sites to boost its property pipeline in china.
3,000 residential units
Capitaland has established a strong track record in originating, structuring and managing real estate funds
1 JAsOn leOW Ceo capitalanD cHina (From 3 January 2013) Ceo capitalanD cHina HolDings pte ltD (until 2 January 2013)
2 luCAS loh DePutY Ceo capitalanD cHina (From 3 January 2013) DePutY Ceo capitalanD cHina HolDings pte ltD (until 2 January 2013)
3 ChAn Boon SenG DePutY Ceo capitalanD cHina (From 3 January 2013) DePutY Ceo capitalanD cHina HolDings pte ltD (until 2 January 2013)
4 Steve GonG Chief finAnCiAl offiCeR capitalanD cHina (From 3 January 2013) Chief finAnCiAl offiCeR capitalanD cHina HolDings pte ltD (until 2 January 2013)
3 4
1 2
the loft Chengdu, China
Business Review
Revenue (S$m)
433.9
326.1
fY2012 (PRofoRMA)(1)
(1) The Group’s revenue and EBIT for FY2012 are presented based on the new organisation structure wef 3 January 2013. Revenue and EBIT for SBUs have included the fund management fees from the respective REIT/funds owned by the SBU.
eBit (S$m)
108
Business Review
109
capitaMalls asia
capitaMalls asia Despite the uncertain global economy, Asia continued to lead the world in economic growth in 2012. Capitamalls Asia’s (CmA) key markets of singapore, China and malaysia posted positive increases in retail sales.
as at end 2012, cMa had interests in and managed a portfolio of 101 shopping malls across 52 cities in singapore, china, Malaysia, Japan and india, with a total property value of approximately s$31.7 billion and a total gross floor area of approximately 92.5 million square feet. of these, 81 malls were operational while the other 20 will open over the coming years.
DeliveRinG on infleCtion Point cMa has delivered on its planned programme that 2012 would be an inflection point for the company, with more than 50% of its malls in china by net asset value becoming operational. in 2012, cMa opened a total of nine malls – two in singapore (the star Vista and Jcube) and seven in china (capitaMall taiyanggong in Beijing, capitaMall Wusheng in Wuhan, capitaMall rizhao in rizhao, capitaMall Xuefu in Harbin, capitaMall Xindicheng in Xi’an, raffles city chengdu and raffles city ningbo). it also completed major asset enhancements of plaza singapura and Bugis+ in singapore during the year.
to continue its growth, cMa committed a total of more than s$1.6 billion in new investments in 2012. these were for acquisitions of stakes in eight projects –
three in china (capitaMall tiangongyuan in Beijing, capitaMall 1818 in Wuhan, and capitaMall Xinduxin in Qingdao, its first mall in the city); one in Klang Valley, Malaysia (a joint venture for its first greenfield development in the country); and two in Japan (olinas Mall in tokyo; and increasing its stakes in la park Mizue in tokyo, izumiya Hirakata in osaka and coop Kobe nishinomiya-Higashi in Hyogo to 100%).
continuing to build its financial capacity to fund this growth, cMa issued s$650.0 million of retail and corporate bonds in singapore through its wholly- owned subsidiary. capitaMalls asia treasury limited (cMatl) raised s$400.0 million of retail bonds, paying 3.8% per annum for the first five years and 4.5% per annum for the subsequent five years if the bonds are not redeemed early. the public offer was about 4.65 times subscribed, while the placement tranche was more than twice subscribed. riding on the strong demand, cMatl also issued s$250.0 million of 10-year corporate bonds, paying 3.7% per annum. in June, cMa established capitaMalls china Development Fund iii with a fund size of us$1.0 billion. this is the company’s largest private equity fund to-date and its fourth china fund.
mOVinG FORWARD in 2013, cMa targets to open six malls – two new ones in singapore, three in chengdu, china, including capitaMall Jinniu phase ii, and one in india.
Portfolio of 101 shopping malls across 52 cities with a total property value of approximately s$31.7 billion and a total gross floor area of approximately 92.5 million sq ft
Continuing to build its financial capacity to fund this growth, CMA issued s$650.0 million of retail and corporate bonds in Singapore through its wholly-owned subsidiary
s$650m retail and corporate Bonds
5 tonY tAn tee hieonG Ceo capitaretail cHina trust ManageMent liMiteD
6 ShARon liM Ceo capitaMalls MalaYsia reit ManageMent sDn. BHD.
1 liM BenG Chee Ceo capitaMalls asia liMiteD
2 SiMon ho DePutY Ceo capitaMalls asia liMiteD (From 1 July 2012) Ceo capitaMall trust ManageMent liMiteD (until 30 June 2012)
3 nG kok SionG Chief finAnCiAl offiCeR capitaMalls asia liMiteD
4 WilsOn TAn Ceo capitaMall trust ManageMent liMiteD (From 1 July 2012) DePutY Ceo capitaMall trust ManageMent liMiteD (until 30 June 2012)
3
5
4
6
1 2
CAPitAMAll tAiYAnGGonG Beijing, China
Revenue (S$m)
353.7
676.2
fY2012 (PRofoRMA)(1),(2)
(1) The Group’s revenue and EBIT for FY2012 are presented based on the new organisation structure wef 3 January 2013. Revenue and EBIT for SBUs have included the fund management fees from the respective REIT/funds owned by the SBU.
(2) Represents 100% Revenue and EBIT at CMA level.
eBit (S$m)
110
Business Review
111
ascott
ascott
Ascott also generated higher operating profits from hospitality management and ended the year achieving a milestone of over 31,000 apartment units in 222 properties across more than 70 cities in Asia Pacific, europe and the Gulf region
Capitaland’s serviced residence business unit, Ascott, has an international portfolio of quality serviced residences which it actively manages and enhances through its award winning brands and operations. in 2012, Ascott continued to leverage on this real estate portfolio to improve its core earnings by realising the value of some assets at the optimal time. Ascott also generated higher operating profits from hospitality management and ended the year achieving a milestone of over 31,000 apartment units in 222 properties across more than 70 cities in Asia pacific, europe and the Gulf region.
enHAnCeD pORTFOliO COnsTiTuTiOn WiTH neW ACquisiTiOns in 2012, ascott acquired the cavendish london in united Kingdom which will be subsequently transformed into a luxurious serviced residence under the premier ascott brand.
ascott, together with capitaland, also acquired somerset grand cairnhill singapore from ascott residence trust for redevelopment into a new serviced residence and a residential development. at the same time, ascott also divested ascott guangzhou and ascott raffles place singapore to ascott residence trust. through these transactions, ascott has increased its investment in singapore’s growing hospitality scene.
ascott’s 49.4% owned associate company, ascott residence trust, has also grown its portfolio of income-generating assets. as at 31 December 2012, ascott residence trust’s asset size has more than tripled to $2.8 billion from the time it was listed in 2006. When the acquisition of the new serviced residence in cairnhill is completed, ascott residence trust’s portfolio will expand to s$3.2 billion.
the total investment amount committed in 2012 was s$850.0 million. the total divestment proceeds raised in 2012, which included the proceeds from divesting citadines ashley Hong Kong to a third party, was s$333.3 million.
ascott continues to operate ascott guangzhou china, ascott raffles place singapore and citadines ashley Hong Kong post divestment.
enhAnCinG CuStoMeR exPeRienCe AnD BRAnD vAlue ascott’s 2012 hospitality management and service fee income increased by 5% year-on-year to s$129.7 million. ascott secured 14 management contracts, added close to 2,800 apartment units to its portfolio and entered two new cities, namely Xiamen and Mumbai. overall revenue per available unit (revpau) grew by 3% to s$119 in FY 2012.
to further enhance customer experience, brand value and asset yield across asia and europe, ascott invested more than s$20 million to refurbish four properties in 2012, and had committed another s$58 million in 10 properties which will be renovated over the next few years.
ascott boasts a 28-year industry track record and was the recipient of more than 70 prestigious awards in 2012. recent awards include Destinasian readers’ choice awards 2012 for ‘Best serviced apartment’, ttg travel awards 2012 for ‘Best serviced residence operator’, ttg china travel awards 2012 for ‘Best serviced residence operator in china’, Business traveller asia-pacific awards 2012 for ‘Best serviced residence Brand’ and
‘Best serviced residence in asia-pacific’, and Business traveller uK awards 2012 for ‘Best serviced apartment company’.
lookinG AheAD ascott continues to pursue growth through investments in serviced residence properties and by securing more management contracts to achieve its target of 40,000 apartment units globally by 2015. ascott will continue with its asset enhancement initiatives to further strengthen its brand and continue to deliver award-winning service to its guests and residents.
31,000 apartment units
Ascott continues to pursue growth through investments in serviced residence properties and by securing more management contracts to achieve its target of 40,000 apartment units globally by 2015
1 ChonG kee hionG Ceo tHe ascott liMiteD (From 6 February 2012) Ceo ascott resiDence trust ManageMent liMiteD (until 5 February 2012)
3 RonAlD tAY Ceo ascott resiDence trust ManageMent liMiteD (From 27 February 2012) Chief inveStMent offiCeR tHe ascott liMiteD (until 5 February 2012)
2 lee Chee koon DePutY Ceo tHe ascott liMiteD (From 6 February 2012) MAnAGinG DiReCtoR, noRth ASiA tHe ascott liMiteD
1
2 3
SoMeRSet eMeRAlD CitY Shuzhou China
Revenue (S$m)
405.1
181.6
fY2012 (PRofoRMA)(1)
(1) The Group’s revenue and EBIT for FY2012 are presented based on the new organisation structure wef 3 January 2013. Revenue and EBIT for SBUs have included the fund management fees from the respective REIT/funds owned by the SBU.
eBit (S$m)
112
Business Review
113
Financial proDucts & serVices anD regional inVestMents
Financial proDucts & serVices anD regional inVestMents
1 olivieR liM GRouP DePutY Ceo capitalanD liMiteD (From 3 January 2013) GRouP Chief inveStMent offiCeR capitalanD liMiteD (until 2 January 2013) heAD of StRAteGiC CoRPoRAte DeveloPMent capitalanD liMiteD (until 5 February 2012)
2 ChonG lit CheonG Ceo regional inVestMents, capitalanD liMiteD (From 3 January 2013) Ceo capitalanD coMMercial liMiteD (until 2 January 2013)
3 Chen liAn PAnG Ceo capitalanD VietnaM (From 3 January 2013) Ceo capitaValue HoMes liMiteD (until 2 January 2013)
4 John PAnG MAnAGinG DiReCtoR capitalanD Financial liMiteD
3 4
1 2
finAnCiAl PRoDuCtS & SeRviCeS capitaland group’s financial products and services generate fee income from originating, structuring and managing private real estate funds, listed real estate investment trusts (reits) and other real estate financial products. the group manages a total of six reits and 16 private equity (pe) funds with aggregate assets under Management (auM) of s$37.1 billion. the majority of the assets are located in the core markets of singapore (46%) and china (40%). Fund management fees received by the group in 2012 totaled s$182.4 million.
capitaland’s reits continue with their strategy of adding value through portfolio reconstitution, acquisition and development, asset enhancements, proactive leasing and capital management.
to unlock value for unitholders, capitaMall trust (cMt) sold Hougang plaza for s$119.1 million and the proceeds provided cMt with greater financial flexibility for refinancing or to take advantage of any good acquisition
opportunities. cMt raised s$250.0 million equity at an issue price of s$2.00 per unit through a private placement in november 2012, to finance capital expenditure and asset enhancement initiatives, refinance existing debts and/or for general corporate and working capital.
capitacommercial trust (cct) completed one cycle of its portfolio reconstitution strategy with the acquisition of twenty anson for s$430.0 million. cct and cMt jointly announced a s$34.7 million asset enhancement for raffles city tower, the office component of raffles city singapore. the enhancement, expected to achieve 8.6% projected return on investment, is expected to complete by the second quarter of 2014.
ascott residence trust (art) continued its growth with the acquisition of five properties for s$766.7 million in singapore, Kyoto and Hamburg. properties purchased included ascott raffles place and a new cairnhill serviced residence in singapore with expected completion in 2017, as well as ascott guangzhou in china.
the viStA Ho Chi Minh City, Vietnam
the majority of the assets are located in the core markets of singapore (46%) and China (40%). Fund management fees received by the Group in 2012 totaled s$182.4 million
CapitaCommercial trust (CCt) completed one cycle of its portfolio reconstitution strategy with the acquisition of twenty Anson for s$430.0 million
s$430.0m acquisition of twenty anson
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Financial proDucts & serVices anD regional inVestMents
capitaretail china trust successfully raised s$86.1 million in a private placement which was increased from the original offer of s$75.0 million, due to strong demand from over 30 existing and new investors from asia, the united states and europe.
reits and fund management remain cornerstones of capitaland’s business model. capitaland will continue to grow auM through accretive acquisitions, developments and asset enhancements. it will also seek opportunities to originate new real estate private equity funds and real estate financial products in singapore and china.
ReGionAl inveStMentS the regional investments unit manages regional real estate investments that fall outside the four main business units. these include capitaland Vietnam, australand,surbana, and storHub, as well as investments in Japan, india, united Kingdom and gulf cooperation council.
Australand Property Group australand property group delivered net profit after tax of a$180.0 million (s$229.8 million) for the 2012 financial year, a 28% increase over 2011. each of australand’s three divisions made a solid contribution to the full year result with the a$2.3 billion (s$2.9 billion) investment portfolio underpinning the overall result. the portfolio continues to retain high quality tenants and has a long dated lease expiry profile. the development of 357 collins street, an office and retail building in Melbourne, was completed in 2012 and is a high quality addition to the portfolio.
the commercial & industrial development division also successfully completed a number of new industrial/logistics facilities during the year and secured commitments for new facilities that will either be retained or developed for external sale.
australand’s residential division delivered growth of 16%, a creditable result given the challenging conditions experienced in the residential sector for most of the year. australand remains well positioned in the residential sector, with over 20,000 lots under management in its development pipeline at an estimated end value of a$8.0 billion (s$10.2 billion), underpinning future earnings.
Capitaland vietnam notwithstanding the challenging market conditions, capitaland remains committed to the Vietnam market. Mulberry lane, its project in Hanoi, achieved structural completion in october 2012 and is on track to complete by early 2014.
in Ho chi Minh city, management of the somerset Vista Ho chi Minh, the 100-unit serviced residence within the Vista development in the prime residential precinct District 2, was awarded to ascott in the fourth quarter of 2012 and opened in December 2012. ascott also managed Vista residences, the 168-unit residential property within the Vista, which was available for lease from november 2012.
phase 1 of parcspring, another project located in Ho chi Minh’s District 2 is expected to achieve structural completion in the first quarter of 2013, and be completed by end 2013.
Surbana Corporation surbana’s two businesses of township development and building consultancy continued to enjoy good growth in 2012. For Financial Year 2011 ended 31 March 2012, surbana achieved revenue of s$227.8 million and an eBit of s$54.7 million. net profit after tax was s$56.2 million, a 14.9% year-on-year increase.
surbana land (slpl) has continued on a steady path of growth in 2012. in 2012, slpl sold over 3,400 residential and commercial units and over 800 car park lots in its four township projects in china. to date, slpl has sold over 17,700 homes in the projects in chengdu, Wuxi, Xi’an and shenyang. slpl also moved its headquarters to chengdu, china, so that it will operate more efficiently and respond faster to the opportunities and operations in the china market.
in singapore, surbana international consultants (sic) continues to be a dominant player in the public housing sector. it has also made significant inroads into the non-public housing market. Key projects secured in 2012 included condominiums such as Heron Bay, one canberra, skies Miltonia, Watercolours, Forestville and citylife. sic has also completed a major project, cleantech one, in singapore’s first eco-business park. the project clinched the Bca green Mark platinum, the highest award for sustainable design. sic clinched a major contract for a 11,800-unit public housing project in penang, Malaysia. it is the third public housing project sic has secured overseas, after Brunei and tianjin, china, both of which are under construction.
sic won various industry awards in 2012, including a clean sweep of six HDB Design awards and five FiaBci singapore property awards.
Storhub capitaland owns 62% interest in storHub, a joint venture with Hersing corporation limited. storHub has grown to a total of nine facilities – seven in singapore and two in china. storHub opened its seventh facility in Woodlands, singapore in august 2012. in china, the first two storHub facilties began operating in guangzhou and shanghai in 2012.
Financial proDucts & serVices anD regional inVestMents
Capitaland will continue to grow AuM through accretive acquisitions, developments and asset enhancements
Australand’s Residential division delivered growth of 16%, a creditable result given the challenging conditions experienced in the residential sector for most of the year
16% residential Division Delivered growth
Surbana achieved revenue of s$227.8 million and an eBiT of s$54.7 million. net profit after tax was s$56.2 million, a 14.9% year-on-year increase
s$56.2m net profit
SiC won various industry awards in 2012, including a clean sweep of six hDB Design Awards and five fiABCi Singapore Property Awards
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resiDential
resiDential As at 31 December 2012
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
CoMPleteD
SinGAPoRe the Wharf residence tong Watt road 100% 27,168 186 999
latitude Jalan Mutiara 100% 24,413 127 Freehold
the seafront on Meyer Meyer road 100% 52,474 327 Freehold
ChinA Beau residences chancheng District, Foshan 100% 46,429 648 70
the riviera chancheng District, Foshan 100% 58,254 208 70
riverside Ville chancheng District, Foshan 100% 110,573 (residential)
2,540 (commercial)
758 70 (residential)
40 (commercial)
the loft (phase 1)
Qingyang District, chengdu 56.3% 190,528 (residential)
1,383 (commercial)
1,814 70 (residential)
40 (commercial)
JAPAn the parkhouse shinjuku tower shinjuku Ward, tokyo 20% 30,220
(including car park and M&e
rooms)
298 Freehold
vietnAM the Vista District 2, HcMc 80% 190,734 850
Freehold
uniteD kinGDoM 25 Kensington square central london 33.3% 239 1 Freehold
name location effective stake (%)
Gross floor Area
(sqm) Total no.
of units tenure
expected Year of
Completion
Approx % of Completion
unDeR DeveloPMent
SinGAPoRe sky Habitat Bishan street 15 65% 58,786 509 99 2015 16%
the interlace alexandra road/ Depot road
60% 169,600 1,040 99 2014 84%
d’leedon leedon Heights/ King’s road/Farrer road
35% 218,519 1,715 99 2014 43%
the nassim nassim Hill 100% 15,942 55 Freehold 2014 21%
urban resort condominium cairnhill road 100% 14,890 64 Freehold 2013 78%
urban suites cairnhill road 50% 24,263 165 Freehold 2013 78%
the PinnACle Shanghai
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resiDential
name location effective stake (%)
Gross floor Area
(sqm) Total no.
of units tenure
expected Year of
Completion
Approx % of Completion
unDeR DeveloPMent (cont’d)
ChinA imperial Bay gongshu District, Hangzhou 50% 84,139
(residential)
707 (commercial)
462 70 (residential)
40 (commercial)
2014 56%
the Metropolis (phase 1)
Huaqiao District, Kunshan 70% 166,220 1,542 70 2015 72%
the pinnacle (phase 1)
pudong District, shanghai 80% 52,863 (residential)
270 (commercial)
539 70 (residential)
40 (commercial)
2013 97%
the paragon luwan District, shanghai 99% 75,353 (residential)
3,435 (commercial)
271 70 (residential)
40 (commercial)
2014 69%
99 Hengshan road Xuhui District, shanghai 100% 14,870 90 50 2014 30%
Beaufort (phase 2)
chaoyang District, Beijing 50% 17,365 220 70 2013 91%
Beaufort (phase 3)
chaoyang District, Beijing 50% 26,037 228 70 2013 37%
royal residences Dongcheng District, Beijing 100% 13,287 26 70 2013 99% tianjin international trade centre
Hexi District, tianjin 100% 111,732 (residential)
70,581 (commercial)
1,305 50 2014 24%
Dolce Vita (phase 1)
Baiyun District, guangzhou 47.5% 127,950 (residential)
1,800 (commercial)
1,033 70 (residential)
40 (commercial)
2014 93%
Dolce Vita (phase 2)
Baiyun District, guangzhou 47.5% 36,204 (residential)
3,200 (commercial)
378 70 (residential)
40 (commercial)
2014 44%
Dolce Vita (phase 3)
Baiyun District, guangzhou 47.5% 28,400 124 70 2015 4%
la cité Foshan chancheng District, Foshan
100% 72,459 (residential)
8,802 (commercial)
879 70 (residential)
40 (commercial)
2013 60%
the loft (phase 2)
Qingyang District, chengdu
56.3% 267,941 2,632 70 2013 83%
the lakeside caidian District, Wuhan 100% 216,221 (residential)
4,167 (commercial)
2,504 70 (residential)
40 (commercial)
2014 11%
JAPAn the parkhouse nishi azabu Minato Ward, tokyo 20% 23,825
(estimated) 190 Freehold 2014 25%
vietnAM Beau rivage (phase 1 of thanh My loi site)
District 2, HcMc 30% 192,497 962 Freehold 2016 10%
Mulberry lane Ha Dong District, Hanoi 70% 235,853 1,478 Freehold 2014 68% parcspring District 2, HcMc 35% 90,574 974 Freehold 2015 49%
(phase 1)
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
futuRe DeveloPMentS
SinGAPoRe site at Bishan street 14 Bishan street 14 75% 55,016 700 99
site at Marine parade road Marine parade road 100% 9,986 124 Freehold
site at Yio chu Kang road Yio chu Kang road 100% 19,330 80 Freehold
ChinA summit residences (plot 1)
Jiangbei District, ningbo 50% 10,830 38 70
the Metropolis (phase 2 to 6)
Huaqiao District, Kunshan 70% 413,327 (residential)
72,792 (commercial)
4,172 70 (residential)
40 (commercial)
the pinnacle (phase 2)
pudong District, shanghai 80% 48,529 (residential)
270 (commercial)
380 70 (residential)
40 (commercial)
Hangzhou Hemu a26 site gongshu District, Hangzhou 100% 71,18 4 691 70
Beaufort (phase 4)
chaoyang District, Beijing 50% 20,357 222 70
Vermont Hills changping District, Beijing 80% 279,657 793 70
Dolce Vita (phase 4)
Baiyun District, guangzhou 47.5% 154,808 1,261 70
lFie panyu Disrict, guangzhou 45.0% 1,116,993 (residential)
7,000 (commercial)
9,077 70 (residential)
40 (commercial)
the rivervale nansha District, guangzhou 58.6% 195,522 (residential)
40,560 (commercial)
2,027 70 (residential)
40 (commercial)
the Floravale pudong District, shanghai 55.7% 90,14 8 1,047 70
Wanxiang ii site pudong District, shanghai 55.7% 86,201 700 70
vietnAM thanh My loi site (phase 2)
District 2, HcMc 30% 40,000 (estimated)
78 (includes 28
shop houses)
Freehold
Mo lao site Ha Dong District, Hanoi 35% 198,400 (estimated)
1,300 (estimated)
Freehold
Binh chanh site Binh chanh District, HcMc 65% 75,000 (estimated)
800 (estimated)
Freehold
resiDential As at 31 December 2012
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coMMercial
coMMercial As at 31 December 2012
name location effective stake (%)
total net lettable Area
(sqm) tenure
CoMPleteD PRoJeCtS offiCe SinGAPoRe pWc Building cross street 30% 33,080 99
ChinA corporation park sha tin, Hong Kong 30% 40,099 54 innov tower Xuhui District, shanghai 100% 40,445 50
JAPAn shinjuku Front tower shinjuku Ward, tokyo 20% 92,092
(gFa) Freehold
uniteD kinGDoM 1 Derry street central london 33.3% 3,020 Freehold
inDuStRiAl SinGAPoRe technopark @ chai chee chai chee road 100% 104,703 60 25a changi south street 1 changi south 62% 3,497 30 15 changi south street 1 changi south 62% 3,774 30 743 lorong 5 toa payoh toa payoh 62% 6,955 60 615 lorong 4 toa payoh toa payoh 62% 8,276 60 31 admiralty road admiralty road 62% 9,026 60
ChinA 1, Huang Xing road Yangpu District, shanghai 62% 5,803 50 133, Jing Xi road Baiyun District, guangzhou 62% 3,441 50
helD thRouGh CAPitACoMMeRCiAl tRuSt CAR PARk SinGAPoRe golden shoe car park Market street 29% 4,256 99
offiCe SinGAPoRe Bugis Village Queen street/rochor road/
Victoria street 29% 11,375
(excluding outdoor refreshment area)
99
HsBc Building collyer Quay 29% 18,624 999 six Battery road Battery road 29% 46,080 999 capital tower robinson road 29% 68,836 99 one george street george street 29% 41,670 99 Wilkie edge Wilkie road 29% 13,880
(excluding serviced residences)
99
twenty anson anson road 29% 18,831 99
name location effective stake (%)
Gross floor Area (sqm) tenure
unDeR DeveloPMent SinGAPoRe capitagreen Market street 61.6% 82,0 0 0 99
ChinA the paragon/changle lu luwan District, shanghai 99% 71,4 8 0
(above ground) 50
TWenTY AnsOn Singapore
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123
name location effective stake (%)
operational net
lettable Area (sqm) tenure
CoMPleteD PRoJeCtS
ChinA capitaMall aidemengdun, Harbin Daoli District, Harbin 29.4% 27,847 expiring in
september 2042
capitaMall Beiguan, anyang Beiguan District, anyang 29.4% 25,929 expiring in March 2046
capitaMall chengnanyuan, nanchang Qingyunpu District, nanchang 29.4% 37,261 expiring in February 2045
capitaMall crystal, Beijing Haidian District, Beijing 29.4% 37,887 commercial: expiring in
January 2043 underground carpark:
expiring in January 2053
capitaMall cuiwei, Beijing Haidian District, Beijing 29.4% 35,367 commercial: expiring in May 2046 underground carpark: expiring in May 2056
capitaMall Deyang Jingyang District, Deyang 29.4% 30,413 expiring in november 2045
capitaMall Dongguan nancheng District, Dongguan 29.4% 32,980 expiring in January 2055
capitaMall Fucheng, Mianyang Fucheng District, Mianyang 29.4% 34,642 expiring in september 2044
capitaMall guicheng, Foshan nanhai District, Foshan 47.8% 36,141 expiring in august 2044
capitaMall Hongqi, Xinxiang Hongqi District, Xinxiang 29.4% 25,615 expiring in november 2045
capitaMall Jinniu, chengdu Jinniu District, chengdu 29.4% 48,517 expiring in october 2044
CapitaMall Jinshui, Zhengzhou Jinshui District, Zhengzhou 19.6% 36,180 expiring in July 2045
capitaMall Jiulongpo, chongqing Jiulongpo District, chongqing 47.8% 38,915 expiring in october 2042
capitaMall Kunshan Yushan town, Kunshan 29.4% 27,517 expiring in May 2045
capitaMall Maoming Maonan District, Maoming 47.8% 28,352 expiring in november 2044
capitaMall nan’an, Yibin cuiping District, Yibin 29.4% 28,037 expiring in May 2045
capitaMall peace plaza, Dalian shahekou District, Dalian 19.6% 106,226 expiring in november 2035
capitaMall Quanzhou licheng District, Quanzhou 29.4% 30,128 expiring in February 2045
capitaMall rizhao Donggang District, rizhao 19.6% 42,325 expiring in november 2043
capitaMall shapingba, chongqing shapingba District, chongqing 19.6% 26,912 Master lease expiring in
December 2023
BuGiS+ Singapore
sHopping Malls
sHopping Malls As at 31 December 2012
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125
name location effective stake (%)
operational net
lettable Area (sqm) tenure
CoMPleteD PRoJeCtS (cont’d)
ChinA capitaMall shawan, chengdu Jinniu District, chengdu 19.6% 28,691 commercial:
expiring in January 2046
underground carpark: expiring in
January 2076
capitaMall taiyanggong, Beijing chaoyang District, Beijing 29.4% 42,804 expiring in august 2044
capitaMall taohualun, Yiyang Heshan District, Yiyang 29.4% 23,225 expiring in June 2045
capitaMall tianjinone, tianjin Hexi District, tianjin 19.6% 40,636 expiring in september 2054
capitaMall Weifang gaoxin District, Weifang 29.4% 36,943 expiring in october 2044
capitaMall Wusheng, Wuhan Qiaokou District, Wuhan 29.4% 46,14 0 expiring in June 2044
capitaMall Xindicheng, Xi’an Yanta District, Xi’an 29.4% 35,300 expiring in December 2043
capitaMall Xuefu, Harbin nangang District, Harbin 29.4% 56,571 expiring in December 2045
capitaMall Yangzhou Weiyang District, Yangzhou 29.4% 36,594 expiring in July 2039/april 2045
capitaMall Yuhuating, changsha Yuhua District, changsha 47.8% 47,253 expiring in March 2044
CapitaMall Zhangzhou Xiangcheng District, Zhangzhou 47.8% 30,659 expiring in December 2043
CapitaMall Zhanjiang Chikan District, Zhanjiang 29.4% 33,183 expiring in December 2044
CapitaMall Zhaoqing Duanzhou District, Zhaoqing 29.4% 32,808 expiring in May 2055
CapitaMall Zibo Zhangdian District, Zibo 29.4% 31,108 expiring in March 2045
Hongkou plaza, shanghai Hongkou District, shanghai 47.4% 142,339 expiring in september 2057
Minhang plaza, shanghai Minhang District, shanghai 42.5% 110,543 expiring in December 2053
SinGAPoRe the star Vista one Vista Xchange green 65.4% 15,173 60 years, expiring in
october 2067
MAlAYSiA Queensbay Mall (approximately 91.8% of aggregate retail floor area and 100% of the car park bays)
Bayan lepas, penang 65.4% 82,580 Freehold
name location effective stake (%)
operational net
lettable Area (sqm) tenure
CoMPleteD PRoJeCtS (cont’d)
JAPAn chitose Mall chitose-shi, Hokkaido 17.2% 15,121 Freehold
coop Kobe nishinomiya-Higashi nishinomiya-shi, Hyogo 65.4% 7,970 Freehold
ito Yokado eniwa eniwa-shi, Hokkaido 17.2% 14,843 Freehold
izumiya Hirakata Hirakata-shi, osaka 65.4% 20,044 Freehold
la park Mizue Mizue, edogawa-ku, tokyo 65.4% 18,430 Freehold
narashino shopping centre Funabashi-shi, chiba 17.2% 10,737 Freehold
olinas Mall taihei sumidaku, tokyo 65.4% 35,400 Freehold
Vivit Minami-Funabashi Funabashi-shi, chiba 17.2% 50,055 Freehold
inDiA Forum Value Mall, Bangalore Whitefield, Bangalore 10.4% 27,059 Freehold
the celebration Mall, udaipur Bhuwana phase-ii scheme, national Highway 8, udaipur
29.7% 32,727 99 years, expiring in May 2103
name location effective stake (%)
Gross floor Area
(sqm) tenure
unDeR DeveloPMent
ChinA capitaMall 1818, Wuhan (under development to be completed in 2014)
Wuchang District, Wuhan 65.4% 70,683 expiring in september 2052
capitaMall Fucheng, Mianyang (phase ii) (under development to be completed in 2014)
Fucheng District, Mianyang 29.4% 42,111 expiring in June 2047
capitaMall Jinniu, chengdu (phase ii) (under development to be completed in 2013)
Jinniu District, chengdu 29.4% 94,085 expiring in october 2044
capitaMall Meilicheng, chengdu (under development to be completed in 2013)
chenghua District, chengdu 32.7% 59,297 expiring in august 2044
capitaMall tianfu, chengdu (under development, with mall to be completed in 2013)
gaoxin District, chengdu 32.7% 197,064 expiring in February 2048
capitaMall tiangongyuan, Beijing (under development to be completed in 2015)
Daxing District, Beijing 65.4% 122,000 expiring in January 2051
capitaMall Xinduxin, Qingdao (under development to be completed in 2015)
shibei District, Qingdao 65.4% 89,732 expiring in november 2051/ september 2052
luwan integrated Development, shanghai (under development, with mall to be completed in 2015)
luwan District, shanghai 43.2% 127,750 expiring in July 2056
suzhou integrated Development (under development, with mall to be completed in 2016)
suzhou industrial park, suzhou 32.7% 350,000 commercial: expiring in
January 2051 underground car park:
expiring in January 2051
sHopping Malls
sHopping Malls As at 31 December 2012
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sHopping Malls As at 31 December 2012
name location effective stake (%)
Gross floor Area
(sqm) tenure
unDeR DeveloPMent (cont’d)
MAlAYSiA taman Melawati site (to be completed in 2016)
Bandar ulu Kelang, Daerah gombak, negeri selangor
32.7% 90,694 Freehold
inDiA cochin Mall (under development to be completed in 2016)
ernakulam District, cochin 7.4% 99,406 Freehold
graphite india, Bangalore (under development to be completed in 2015)
Whitefield, Bangalore 14.6% 97,732 Freehold
Hyderabad Mall (under development to be completed in 2014)
Kukatpally, Hyderabad 7.3% 80,387 Freehold
Jalandhar Mall (under development to be completed in 2015)
paragpur Village, Jalandhar 19.3% 57,043 Freehold
Mangalore Mall (under development to be completed in 2013)
pandeshwar road, Mangalore 9.9% 63,814 Freehold
Mysore Mall (under development to be completed in 2014)
abba road/Hyder ali road, Mysore
14.6% 33,417 Freehold
nagpur Mall (under development to be completed in 2016)
umrer road, nagpur 19.3% 94,761 Freehold
name location effective stake (%)
operational net
lettable Area (sqm) tenure
helD thRouGh CAPitARetAil ChinA tRuSt
CoMPleteD PRoJeCtS
ChinA capitaMall anzhen, Beijing chaoyang District, Beijing 16.4% 43,443 expiring in
october 2034/ March 2042/June 2042
CapitaMall Erqi, Zhengzhou Erqi District, Zhengzhou 16.4% 92,356 expiring in May 2042
capitaMall Minzhongleyuan, Wuhan Jianghan District, Wuhan 16.4% 22,653 annex Building: expiring in
september 2045 conserved Building:
Master lease expiring in June 2044
capitaMall Qibao, shanghai Minhang District, shanghai 16.4% 50,703 Master lease expiring in January 2024
capitaMall saihan, Huhhot saihan District, Huhhot 16.4% 29,982 expiring in March 2041
capitaMall shuangjing, Beijing chaoyang District, Beijing 16.4% 49,463 expiring in July 2042
capitaMall Wangjing, Beijing chaoyang District, Beijing 16.4% 55,567 commercial: expiring in May 2043
underground car park: expiring in May 2053
capitaMall Wuhu Jinghu District, Wuhu 22.8% 35,792 expiring in May 2044
capitaMall Xizhimen, Beijing Xicheng District, Beijing 16.4% 51,319 underground commercial and retail use:
expiring in august 2044 integrated use:
expiring in august 2054
name location effective stake (%)
operational net
lettable Area (sqm) tenure
helD thRouGh CAPitAMAll tRuSt
CoMPleteD PRoJeCtS
SinGAPoRe Bugis+ Victoria street 18% 19,934 60 years, expiring in
september 2065
Bugis Junction Victoria street 18% 38,942 99 years, expiring in september 2089
Bukit panjang plaza Jelebu road 18% 14,124 99 years,expiring in november 2093
clarke Quay river Valley road 18% 27,034 99 years, expiring in January 2089
Funan Digitalife Mall north Bridge road 18% 27,762 99 years, expiring in December 2078
iMM Building Jurong east 18% 88,227 60 years, expiring in January 2049
Jcube Jurong east 18% 19,567 99 years, expiring in February 2090
Junction 8 Bishan 18% 23,325 99 years, expiring in august 2090
lot one shoppers’ Mall choa chu Kang 18% 20,424 99 years, expiring in november 2092
plaza singapura orchard road 18% 45,239 Freehold
rivervale Mall rivervale crescent 18% 7,540 99 years, expiring in December 2096
sembawang shopping centre sembawang road 18% 12,201 999 years, expiring in March 2884
tampines Mall tampines central 18% 30,607 99 years, expiring in august 2091
the atrium@orchard orchard road 18% 36,079 99 years, expiring in august 2107
helD thRouGh CAPitAMAllS MAlAYSiA tRuSt
CoMPleteD PRoJeCtS
MAlAYSiA east coast Mall putra square, Kuantan 23.5% 41,203 99 years, expiring in
December 2106
gurney plaza persiaran gurney, penang 23.5% 81,978 Freehold
the Mines Jalan Dulang, selangor 23.5% 66,771 99 years, expiring in March 2091
sungei Wang plaza (approximately 61.9% of aggregate retail floor area and 100% of the car park bays)
Jalan sultan ismail, Kuala lumpur 23.5% 41,646 Freehold
sHopping Malls
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129
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
AuStRAliA citadines on Bourke Melbourne Bourke street, Melbourne 100% 28,427 380 Freehold
somerset on elizabeth Melbourne elizabeth street, Melbourne 100% 1,872 34 Freehold
ChinA ascott Beijing chaoyang District, Beijing 36.1% 66,417 244 70
citadines Biyun shanghai Jinqiao Export Processing Zone, shanghai
36.1% 15,877 180 70
citadines central Xi’an Beilin District, Xi’an 36.1% 12,998 162 70 (residential)
40 (commercial)
citadines gaoxin Xi’an Hi-Tech Zone, Xi’an 36.1% 24,303 251 50
citadines Xinghai suzhou suzhou industrial park, suzhou 100% 10,166 167 70 (residential)
50 (commercial)
40 (retail)
Citadines Zhuankou Wuhan economic & technological Development Zone, Wuhan
36.1% 21,650 249 40
somerset garden city shenzhen nanshan District, shenzhen 36.1% 17,379 147 70
somerset Heping shenyang Heping District, shenyang 36.1% 33,031 270 40
somerset international Building tianjin Heping District, tianjin 36.1% 52,726 105 50
somerset JieFangbei chongqing Yuzhong District, chongqing 36.1% 21,494 157 40
somerset riverview chengdu Wuhou District, chengdu 36.1% 30,455 200 50
somerset Youyi tianjin Hexi District, tianijn 36.1% 31,031 250 50
Somerset ZhongGuanCun Beijing Haidian District, Beijing 100% 19,975 154 70 (residential)
50 (commercial)
40 (retail)
fRAnCe ascott arc de triomphe paris avenue Kleber, paris 100% 9,700 106 Freehold
GeRMAnY citadines city centre Frankfurt (under construction)
europa-Boulevard, Frankfurt 100% 8,104 165 Freehold
citadines Michel Hamburg (under construction)
ludwig-erhad-strabe, Hamburg 100% 6,725 128 99
CitADineS South Chengdu
serViceD resiDences
serViceD resiDences As at 31 December 2012
130
Portfolio Details
131
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
inDiA citadines galleria Bangalore (under construction)
Yelanhanka, Bangalore 50% 13,935 203 Freehold
citadines Hitec city Hyderabad (under construction)
Hitec city, Hyderabad 100% 10,388 218 Freehold
citadines oMr gateway chennai (under construction)
old Mahabalipuram road, chennai 100% 18,649 268 Freehold
citadines parimal garden ahmedabad (under construction)
central Business District, ahmedabad 100% 9,118 220 Freehold
somerset greenways chennai sathyadev avenue, chennai 64.4% 21,933 187 Freehold
somerset Whitefield Bangalore (under construction)
Whitefield, Bangalore 100% 19,021 280 Freehold
JAPAn CoRPoRAte leASinG actus Hakata V-tower Hakata-ward, Fukuoka 88.9% 9,248 297 Freehold
Big palace Kita 14 Jo Kita-ward, sapporo 88.9% 5,896 140 Freehold
colonnade Kamiikedai ota-ward, tokyo 18.9% 5,903 43 Freehold
Fujimi Duplex riz chiyoda-ward, tokyo 18.9% 1,824 22 Freehold
Fukuoka college court Hakata-ward, Fukuoka 18.9% 2,706 112 Freehold
grand e’terna chioninmae Higashiyama-ward, Kyoto 88.9% 1,049 18 Freehold
grand e’terna sagaidaidori nabeshima, saga 88.9% 1,507 46 Freehold
grand e’terna nijojomae nakagyo-ward, Kyoto 88.9% 1,736 47 Freehold
grand e’terna saga Honjocho, saga 88.9% 4,973 128 Freehold
grand Mire Miyamachi aoba-ward, sendai 88.9% 2,306 91 Freehold
grand Mire shintera Wakabayashi-ward, sendai 88.9% 1,711 59 Freehold
gravis court Kakomachi naka-ward, Hiroshima 88.9% 2,270 63 Freehold
gravis court Kokutaiji naka-ward, Hiroshima 88.9% 1,659 48 Freehold
gravis court nishiharaekimae asaminami-ward, Hiroshima 88.9% 1,151 30 Freehold
infini garden Hamao District, Fukuoka 30% 36,770 395 Freehold
Kasahokomachi shimogyo-ward, Kyoto 88.9% 5,699 191 Freehold
Marunouchi central Heights naka-ward, nagoya 88.9% 1,937 31 Freehold
saMtY namba-Minami naniwa-ward, osaka 18.9% 4,660 123 Freehold
s-residence Fukushima luxe Fukushima-ward, osaka 18.9% 6,568 179 Freehold
s-residence gakuenzaka naniwa-ward, osaka 88.9% 2,822 58 Freehold
s-residence Hommachi Marks chuo-ward, osaka 18.9% 3,680 110 Freehold
s-residence Midoribashi serio Higashinari-ward, osaka 18.9% 2,904 100 Freehold
s-residence namba Viale naniwa-ward, osaka 88.9% 3,522 116 Freehold
s-residence shukugawa Hyogo, Kobe 88.9% 3,189 33 Freehold
s-residence tanimachi 9 chome tennoji-ward, osaka 18.9% 3,171 104 Freehold
the grandview osaka Yodogawa-ward, osaka 18.9% 10,156 60 Freehold
MAlAYSiA ascott Kuala lumpur Jalan pinang, Kuala lumpur 50% 36,206 221 Freehold
somerset ampang Kuala lumpur Jalan ampang, Kuala lumpur 100% 18,847 207 Freehold
somerset seri Bukit ceylon Kuala lumpur
lorong ceylon, Kuala lumpur 100% 3,604 48 Freehold
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
thAilAnD ascott sathorn Bangkok south sathorn road, Bangkok 40% 45,361 177 50
citadines sukhumvit 8 Bangkok sukhumvit 8, Bangkok 49% 8,505 130 Freehold
citadines sukhumvit 11 Bangkok sukhimvit 11, Bangkok 49% 8,215 127 Freehold
citadines sukhumvit 16 Bangkok sukhumvit 16, Bangkok 49% 5,415 79 Freehold
citadines sukhumvit 23 Bangkok sukhumvit 23, Bangkok 49% 8,693 138 Freehold
uniteD kinGDoM the cavendish london st James, london 100% 15,360 230 65
vietnAM somerset central tD Hai phong city (under construction)
ngo Quyen District, Hai phong city
90% 14,531 132 65
helD thRouGh ASCott ReSiDenCe tRuSt
AuStRAliA somerset st georges terrace perth st georges terrace, perth 49.4% 6,000 84 Freehold
BelGiuM citadines sainte-catherine Brussels Quai au Bois a Bruler, Brussels 49.4% 10,055 169 Freehold
citadines toison d'or Brussels avenue de la toison d’or, Brussels 49.4% 12,752 154 Freehold
ChinA ascott guangzhou tianhe District, guangzhou 49.4% 19,797 208 70
somerset grand Fortune garden property Beijing
chaoyang District, Beijing 49.4% 15,780 81 70
somerset Xu Hui shanghai Xu Hui District, shanghai 49.4% 21,014 167 70
somerset olympic tower property tianjin
Heping District, tianjin
49.4% 32,946 185 70
fRAnCe citadines croisette cannes rue le poussin, cannes 49.4% 3,311 58 Freehold
citadines city centre grenoble rue de strasbourg, grenoble 49.4% 7,872 106 Freehold
citadines city centre lille avenue Willy Brandt-euralille, lille 49.4% 6,995 101 Freehold
citadines presqu’ile lyon rue thomassin, lyon 49.4% 6,699 116 Freehold
citadines castellane Marseille rue de rouet, Marseille 49.4% 5,877 97 Freehold
citadines prado chanot Marseille Boulevard de louvain, Marseille 49.4% 5,390 77 Freehold
citadines antigone Montpellier Boulevard d’antigone, Montpellier 49.4% 8,914 122 Freehold
citadines suites louvre paris rue de richelieu, paris 49.4% 3,663 51 Freehold
citadines austerlitz paris rue esquirol, paris 49.4% 1,859 50 Freehold
citadines prestige les Halles paris rue des innocents, paris 49.4% 10,648 189 Freehold
citadines Montmarte paris avenue rachel, paris 49.4% 7,989 111 Freehold
citadines Montparnasse paris avenue du Maine, paris 49.4% 3,004 67 Freehold
citadines place d’italie paris place d’italie, paris 49.4% 8,003 169 Freehold
citadines porte de Versailles paris rue Didot, paris 49.4% 4,618 80 Freehold
citadines republique paris avenue parmentier, paris 49.4% 6,857 76 Freehold
citadines tour eiffel paris Boulevard de grenelle, paris 49.4% 8,715 104 Freehold
citadines trocadero paris rue saint-Didier, paris 49.4% 9,725 97 Freehold
serViceD resiDences As at 31 December 2012
serViceD resiDences
132
Portfolio Details
133
serViceD resiDences
serViceD resiDences As at 31 December 2012
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
helD thRouGh ASCott ReSiDenCe tRuSt (cont’d)
GeRMAnY citadines Kurfürstendamm Berlin olivaer platz, Berlin 49.4% 6,794 118 Freehold
citadines arnulfpark Munich arnulfstrasse, Munich 48.9% 8,303 146 Freehold
Madison Hamburg schaarteinweg, Hamburg 49.4% 19,285 (nla)
166 Freehold
inDoneSiA ascott Jakarta Jalan Kebon Kacang raya, Jakarta 48.9% 55,775 198 26
somerset grand citra Jakarta Jalan prof Dr satrio Kav 1, Jakarta 28.3% 30,072 203 30
JAPAn citadines Karasuma-gojo Kyoto shimogyo-ku, Kyoto 69.6% 4,835 124 Freehold
citadines shinjuku tokyo shinjuku-ku, tokyo 69.6% 6,197 160 Freehold
somerset azabu east tokyo Minato-ku, tokyo 49.4% 5,896 79 Freehold
JAPAn CoRPoRAte leASinG asyl court nakano sakaue tokyo nakano-ku, tokyo 49.4% 1,805 62 Freehold
gala Hachimanyama i tokyo suginami-ku, tokyo 49.4% 2,556 76 Freehold
gala Hachimanyama ii tokyo suginami-ku, tokyo 49.4% 474 16 Freehold
Joy city Koishikawa shokubutsuen tokyo
Bunkyo-ku, tokyo 49.4% 1,281 36 Freehold
Joy city Kuramae tokyo taito-ku, tokyo 49.4% 1,970 60 Freehold
roppongi residences tokyo Minato-ku, tokyo 49.4% 4,422 64 Freehold
Zesty Akebonobashi Tokyo shinjuku-ku, tokyo 49.4% 375 12 Feehold
Zesty Gotokuji Tokyo setagaya-ku, tokyo 49.4% 420 15 Freehold
Zesty Higashi Shinjuku Tokyo shinjuku-ku, tokyo 49.4% 515 19 Freehold
Zesty Kagurazaka I Tokyo shinjuku-ku, tokyo 49.4% 469 20 Freehold
Zesty Kagurazaka II Tokyo shinjuku-ku, tokyo 49.4% 533 20 Freehold
Zesty Kasugacho Tokyo nerima-ku, tokyo 49.4% 922 32 Freehold
Zesty Koishikawa Tokyo Bunkyo-ku, tokyo 49.4% 385 15 Freehold
Zesty Komazawa Daigaku II Tokyo Merguro-ku, tokyo 49.4% 1,054 29 Freehold
Zesty Nishi Shinjuku III Tokyo shinjuku-ku, tokyo 49.4% 915 29 Freehold
Zesty Sakura Shinmachi Tokyo setagaya-ku, tokyo 49.4% 619 17 Freehold
Zesty Shin Ekoda Tokyo nerima-ku, tokyo 49.4% 526 18 Freehold
Zesty Shoin Jinja Tokyo setagaya-ku, tokyo 49.4% 471 16 Freehold
Zesty Shoin Jinja II Tokyo setagaya-ku, tokyo 49.4% 629 17 Freehold
PhiliPPineS ascott Makati ayala centre, Makati city 49.4% 55,255 306 48
somerset Millennium Makati legaspi Village, Makati city 49.4% 11,165 147 Freehold
salcedo residences Makati salcedo Village, Makati city 49.4% 5,901 (nla)
71 Freehold
name location effective stake (%)
Gross floor Area
(sqm) Total no. of units tenure
SinGAPoRe ascott raffles place singapore Finlayson green, singapore 49.4% 15,694 146 999
citadines Mount sophia property singapore
Wilkie road, singapore 49.4% 9,370 154 99
somerset liang court property singapore
river Valley road, singapore 49.4% 27,15 5 197 97
SPAin citadines ramblas Barcelona ramblas District, Barcelona 49.4% 12,323 131 Freehold
uniteD kinGDoM citadines Barbican london goswell road, london 49.4% 7,263 129 Freehold
citadines prestige south Kensington london
gloucester road, london 49.4% 6,657 92 Freehold
citadines prestige trafalgar square london
northumberland avenue, london 49.4% 10,903 187 Freehold
citadines prestige Holborn-covent garden london
High Holborn, london 49.4% 10,576 192 Freehold
vietnAM somerset Hoa Binh Hanoi Hoang Quoc Viet street, Hanoi 44.4% 23,845 206 40
somerset grand Hanoi Hai Ba trung street, Hanoi 37.5% 44,048 185 45
somerset West lake Hanoi thuy Khue road, Hanoi 34.6% 8,474 90 49
somerset chancellor court Ho chi Minh city
nguyen thi Minh Khai street, Ho chi Minh city
33.1% 26,782 172 48
somerset Ho chi Minh city nguyen Binh Khiem street, Ho chi Minh city
34.1% 25,207 165 45
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Portfolio Details
135
MiXeD DeVelopMents As at 31 December 2012
name location effective stake (%)
Gross floor Area
(sqm) tenure
CoMPleteD PRoJeCtS
ChinA raffles city Beijing Dongcheng District, Beijing 45.4% 110,996 40
(retail)
50 (integrated use)
raffles city shanghai Huangpu District, shanghai 25.4% 139,593 50
raffles city ningbo Jiangbei District, ningbo 45.4% 101,254 40
SinGAPoRe raffles city singapore north Bridge road/
stamford road/Bras Basah road 26.6% 320,490 99 years, expiring in
July 2078
the orchard residences orchard road 32.7% 38,243 99 years, expiring in March 2105
ion orchard orchard road 32.7% 87,727 99 years, expiring in March 2105
uniteD kinGDoM 99-121 Kensington High street central london 33.3% 35,600 Freehold
unDeR DeveloPMent
ChinA raffles city changning changning District, shanghai 36.8% 253,928 50
raffles city chengdu Wuhou District, chengdu 45.4% 240,928 40
raffles city Hangzhou Qianjiang new city, Hangzhou 45.4% 300,894 40
raffles city shenzhen nanshan District, shenzhen 73.0% 237,500 50
raffles city chongqing Yuzhong District, chongqing 51.7% 817,000 70 (residential)
40 (commercial)
SinGAPoRe Westgate & Westgate tower Boon lay Way 58.1% 90,770 99 years, expiring in
august 2110
ion orchard link orchard road 32.7% 450 99 years, expiring in March 2105
Bedok Mall & Bedok residences new upper changi road/ Bedok north Drive
82.7% 94, 340 99 years, expiring in november 2110
futuRe DeveloPMentS
SinGAPoRe cairnhill redevelopment project cairnhill road 100% 24,882
(residential)
17,333 (serviced
residence)
99
MiXeD DeVelopMents
WesTGATe & WesTGATe TOWeR Singapore
137
directors’ report We are pleased to submit this annual report to the members of the company, together with the audited financial statements for the financial year ended 31 december 2012.
Directors the directors in office at the date of this report are as follows:
Ng Kee choe peter seah Lim Huat Liew Mun Leong Lim Ming Yan (appointed on 1 January 2013) James Koh cher siang Arfat pannir selvam professor Kenneth stuart courtis John powell Morschel simon claude israel euleen Goh Yiu Kiang tan sri Amirsham Bin A Aziz (appointed on 30 July 2012) stephen Lee ching Yen (appointed on 1 January 2013)
Directors’ interests in shares or Debentures except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures or options of the company or of related corporations either at the beginning of the financial year (or date of appointment, if later) or at the end of the financial year.
According to the register kept by the company for the purposes of section 164 of the companies Act, chapter 50, particulars of interests of directors who held office at the end of the financial year in shares, debentures, options and awards in the company and its related corporations are as follows:
holdings in the name of the director, spouse and/or infant children
at beginning of the year/ date of appointment
at end of the year
the company
Ordinary shares Ng Kee choe 10,000 23,860 peter seah Lim Huat 294,807 329,413 Liew Mun Leong 3,571,915 2,791,563 James Koh cher siang 253,999 281,610 Arfat pannir selvam 201,039 231,014 professor Kenneth stuart courtis 133,688 160,193 John powell Morschel 2,684 23,837 simon claude israel 50,000 70,261 euleen Goh Yiu Kiang 5,572 9,289
stAtUtorY AccoUNts
Directors’ Report 137
Statement by Directors 148 Independent Auditors’ Report to the Members of CapitaLand Limited 149
Balance Sheets 150 Income Statements 151 Statements of Comprehensive Income 152 Statements of Changes in Equity 153
Consolidated Statement of Cash Flows 156 Notes to the Financial Statements 158
contents
138
appendix stAtUtorY AccoUNts
139
Directors’ interests in shares or Debentures (cont’d)
holdings in the name of the director, spouse and/or infant children
at beginning of the year/ date of appointment
at end of the year
the company (cont’d)
Contingent award of Performance shares1 to be delivered after 2011 Liew Mun Leong (370,258 shares) 0 to 740,5163 –¶ ¶ No share was released under the 2009 award
Contingent award of Performance shares1 to be delivered after 2012 Liew Mun Leong (381,039 shares) 0 to 762,0783 0 to 762,0783
Contingent award of Performance shares1 to be delivered after 2013 Liew Mun Leong (359,200 shares) 0 to 718,4003 0 to 718,4003
Contingent award of Performance shares1 to be delivered after 2014 Liew Mun Leong (359,000 shares) – 0 to 628,2503
Unvested Restricted shares2 to be delivered after 2009 Liew Mun Leong 85,9806 –
Unvested Restricted shares2 to be delivered after 2010 peter seah Lim Huat 8,0545 – Liew Mun Leong 151,8967 75,9496
James Koh cher siang 6,2315 – Arfat pannir selvam 6,7375 – professor Kenneth stuart courtis 4,7115 – John powell Morschel 2,6855 –
Unvested Restricted shares2 to be delivered after 2011 Liew Mun Leong 0 to 295,5004 115,4427
Contingent award of Restricted shares2 to be delivered after 2012 Liew Mun Leong (197,000 shares) – 0 to 295,5004
$1.3 billion convertible bonds 3.125% due 2018 (Aggregate principal amount of bonds which remains outstanding is $1.05 billion) Liew Mun Leong $1,500,000 $3,500,000
Directors’ interests in shares or Debentures (cont’d)
holdings in the name of the director, spouse and/or infant children
at beginning of the year/ date of appointment
at end of the year
related corporations capitaMalls asia Limited
Ordinary shares Ng Kee choe 130,000 130,000 peter seah Lim Huat 29,000 29,000 Liew Mun Leong 456,540 516,859 James Koh cher siang 44,400 45,800 Arfat pannir selvam 60,400 89,397 tan sri Amirsham Bin A Aziz 6,139 6,139
Unvested Restricted shares2 to be delivered after 2010 Liew Mun Leong 14,5405 – James Koh cher siang 1,4005 – Arfat pannir selvam 6,4005 –
capitaMalls asia treasury Limited Liew Mun Leong – $75 million 1.00% Bonds due 2012 $1,000,000 – – $125 million 2.15% Bonds due 2014 $2,000,000 $2,000,000
the ascott capital Pte Ltd Liew Mun Leong – $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 – – $50 million 5.15% Fixed Rate Notes due 2014 $1,000,000 $1,000,000 euleen Goh Yiu Kiang – $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 –
capitaLand treasury Limited euleen Goh Yiu Kiang – $350 million 4.30% Fixed Rate Notes due 2020 $250,000 $250,000
Footnotes: 1 Performance shares are shares under awards pursuant to the CapitaLand Performance Share Plan 2000 and CapitaLand Performance
Share Plan 2010 (collectively referred to as “CapitaLand Performance Share Plan”). 2 Restricted shares are shares under awards pursuant to the CapitaLand Restricted Stock Plan 2000 and CapitaLand Restricted Share Plan
2010 (collectively referred to as “CapitaLand Restricted Stock/Share Plan”) or CMA Restricted Stock Plan. 3 The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No
share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
4 The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of two to three years. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The awards granted to non-executive directors in 2010 are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
5 Being the unvested half of the award. 6 Being the unvested one-third of the award. 7 Being the unvested two-thirds of the award.
directors’ report
140
appendix stAtUtorY AccoUNts
141
Directors’ interests in shares or Debentures (cont’d) Mr Liew Mun Leong’s shareholding in the company had been reduced from 2,791,563 shares as at 31 december 2012 to 1,791,563 shares as at 21 January 2013.
save as disclosed above, there was no change in any of the above-mentioned directors’ interests in the company between the end of the financial year and 21 January 2013.
Directors’ interests in contracts since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the company or a related corporation with the director, or with a firm of which he is a member or with a company in which he has a substantial financial interest.
directors’ emoluments are disclosed in “directors’ remuneration”.
arrangeMents to enabLe Directors to acquire shares anD Debentures except as disclosed under the “directors’ interests in shares or debentures” and “share plans” sections of this report, neither at the end of nor at any time during the financial year was the company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the company to acquire benefits by means of the acquisition of shares in or debentures of the company or any other body corporate.
share PLans the executive resource and compensation committee (“ercc”) of the company has been designated as the committee responsible for the administration of the share plans. the ercc members at the date of this report are Mr peter seah Lim Huat (chairman), Mr Ng Kee choe, Mr simon claude israel and Mr stephen Lee ching Yen.
(a) capitaLand share option Plan, Performance share Plan and restricted stock/share Plan At the extraordinary General Meeting held on 16 April 2010, shareholders approved a new capitaLand performance
share plan 2010 (“psp 2010”) and capitaLand restricted share plan 2010 (“rsp 2010”). these plans replaced the capitaLand performance share plan 2000 and capitaLand restricted stock plan 2000 which were terminated. the company did not extend the duration of, or replace, the existing capitaLand share option plan. All awards granted under the previous share plans prior to its termination will continue to be valid and be subject to the terms and conditions of the plans. the first grant of award under the new share plans was made in March 2011. the duration of each share plan is 10 years commencing on 16 April 2010.
Under the psp 2010, the awards granted are conditional on performance targets set based on medium-term corporate objectives. Awards represent the right of a participant to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the company achieving prescribed performance target(s). Awards are released once the ercc is satisfied that the prescribed target(s) have been achieved. there are no vesting periods beyond the performance achievement periods.
Under the rsp 2010, awards granted to eligible participants vest only after the satisfactory completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-based restricted awards).
Awards granted under the rsp 2010 differ from awards granted under the psp 2010 in that an extended vesting period is normally imposed beyond the performance target completion date, that is, they also incorporate a time-based service condition as well, to encourage participants to continue serving the Group beyond the achievement date of the pre-determined performance target(s). in addition, the rsp 2010 also enable grants of fully paid shares to be made to non-executive directors as part of their remuneration in respect of their office as such in lieu of cash.
the aggregate number of new shares which may be allotted, issued and/or delivered pursuant to awards granted under the share plans on any date, when aggregated with existing shares (including shares held in treasury and cash equivalents) delivered and/or to be delivered, pursuant to the share plans, and all shares, options or awards granted under any other share schemes of the company then in force, shall not exceed 8% of the total number of issued shares (excluding treasury shares) from time to time.
share PLans (cont’d) (b) options exercised the company ceased to grant options under the capitaLand share option plan since 2007. during the financial year,
there were new ordinary shares issued for cash in the capital of the company pursuant to the exercise of options granted:
name of company exercise Price
(per share) number of
shares issued
capitaLand Limited $0.30 to $3.18 836,913
save as disclosed above, there were no shares issued during the financial year by virtue of the exercise of options to take up unissued shares of the company and its subsidiary.
(c) unissued shares under options At the end of the financial year, there were the following unissued ordinary shares of the company under options:
number of holders expiry Date
exercise Price (per share)
$
number of unissued shares
under options
the company Group executives 9 28/02/2013 0.30 64,383
4 29/08/2013 0.30 7,846 45 27/02/2014 0.50 367,232
5 27/08/2014 0.85 15,120 133 25/02/2015 1.72 1,237,820
18 26/08/2015 2.15 72,290 353 24/02/2016 3.18 5,632,884
1 19/06/2016 3.65 87,350 47 01/09/2016 4.09 621,650
total 8,106,575
the aggregate number of options granted since the commencement of the capitaLand share option plan to the end of the financial year is as follows:
Participants
aggregate options granted since the commencement
of the capitaLand share option Plan
aggregate options
exercised
aggregate options lapsed/
cancelled
aggregate options
outstanding
directors of the company: peter seah Lim Huat 494,460 (494,460) – – Liew Mun Leong 6,257,200 (6,257,200) – – James Koh cher siang 134,800 (134,800) – – Arfat pannir selvam 100,880 (100,880) – –
6,987,340 (6,987,340) – –
Non-executive directors of subsidiaries (including former directors of the company) 11,636,530 (10,880,120 ) (756,410 ) – Group executives (excluding Liew Mun Leong) 138,155,955 (95,514,418 ) (34,534,962) 8,106,575 parent Group executives and others 2,662,482 (2,232,834) (429,648) – total 159,442,307 (115,614,712) (35,721,020) 8,106,575
save as disclosed above, there were no unissued shares of the company or its subsidiary under options as at the end of the financial year.
directors’ report
142
appendix stAtUtorY AccoUNts
143
share PLans (cont’d) (d) awards under the capitaLand Performance share Plan during the financial year, the ercc of the company has granted awards which are conditional on targets set for a
performance period, currently prescribed to be a three-year performance period. A specified number of shares will only be released by the ercc to the recipient at the end of the qualifying performance period, provided the threshold targets are achieved. An initial number of shares (“baseline award”) is allocated equally according to the following performance conditions:
• Group’s Absolute Total Shareholder Return measured as a multiple of Cost of Equity; and • Group’s Relative Total Shareholder Return measured as the outperformance against the MSCI Asia Pacific
ex-Japan real estate index.
the above performance measures are selected as key measurements of wealth creation for shareholders. the final number of shares to be released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. conversely, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
details of the movement in the awards of the company during the year were as follows:
<-- Movements during the year --> balance as at
1 January 2012 granted Lapsed/
cancelled balance as at
31 December 2012
Year of award no. of holders no. of shares no. of shares no. of shares no. of holders no. of shares
2009 69 3,281,727 – (3,281,727) – – 2010 51 2,847,827 – (69,811) 49 2,778,016 2011 62 3,139,500 – (116,574) 59 3,022,926 2012 – – 3,488,000 (90,000) 63 3,398,000
9,269,054 3,488,000 (3,558,112) 9,198,942
(e) awards under the capitaLand restricted stock/share Plan during the financial year, the ercc of the company has granted awards which are conditional on targets set for a
performance period, currently prescribed to be a one-year performance period. A specified number of shares will only be released by the ercc to the recipients at the end of the qualifying performance period, provided the threshold targets are achieved. An initial number of shares (“baseline award”) is allocated equally according to the following performance conditions:
• Group’s Earnings Before Interest and Tax; and • Group’s Return on Total Assets.
the above performance measures are selected as they are the key drivers of shareholder value and are aligned to the company’s business objectives. the final number of shares to be released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. on the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. once the final number of shares has been determined, it will be released over a vesting period of three years. recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost. From 2012, cash-settled award plan for non-managerial grade employees in singapore, Malaysia and Japan has been replaced by a restricted cash plan (“rcp”). Under rcp, a cash bonus is distributed to eligible employee at the end of each financial year based on the Group’s financial performance and achievement of performance targets, as well as individual performance.
share PLans (cont’d) (e) awards under the capitaLand restricted stock/share Plan (cont’d) the ercc of the company has instituted a set of share ownership guidelines for senior management who receives
shares under the capitaLand restricted stock/share plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of capitaLand shares acquired through the capitaLand restricted stock/share plan which will vary according to their job grades and base salaries.
the awards granted to non-executive directors prior to 2010 have a vesting period of two years. in 2010, the awards granted are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
details of the movement in the awards by the company during the year were as follows:
<----------- Movements during the year -----------> balance as at
1 January 2012 granted released* Lapsed/
cancelled balance as at
31 December 2012
Year of award no. of holders no. of shares no. of shares no. of shares no. of shares no. of holders no. of shares
2009 1,313 2,773,682 – (2,708,531) (65,151) – – 2010 815 4,038,491 – (2,014,638) (173,731) 718 1,850,122 2011 952 6,250,405 – (1,783,947) (1,082,124 ) 857 3,384,334 2012 – – 7,635,290 (151,620) (404,506) 682 7,079,164
13,062,578 7,635,290 (6,658,736) (1,725,512) 12,313,620 * The number of shares released during the year was 6,658,736, of which 846,520 were cash-settled.
As at 31 december 2012, the number of shares comprised in awards granted under the capitaLand restricted stock/ share plan is as follows:
equity-settled cash-settled total
Final number of shares has not been determined (baseline award)# 6,820,334 258,830 7,079,164 Final number of shares determined but not released 4,647,933 586,523 5,234,456
11,468,267 845,353 12,313,620
# The final number of shares released could range from 0% to 150% of the baseline award.
(f) awards under the capitaMalls asia Limited (“cMa”) share Plans the cMA performance share plan and the cMA restricted stock plan (collectively referred to as the “cMA share
plans”) were approved and adopted by the shareholders’ of cMA at an extraordinary General Meeting held on 30 october 2009.
Under the cMA share plans, awards are granted to eligible participants who will have the right to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the company achieving prescribed performance target(s).
directors’ report
144
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145
share PLans (cont’d) (f) awards under the capitaMalls asia Limited (“cMa”) share Plans (cont’d) (i) awards under the cMa Performance share Plan the cMA performance share plan has no vesting periods beyond the performance achievement periods and
applies only to key executives.
details of the movement in the awards by cMA during the year were as follows:
<-- Movements during the year --> balance as at
1 January 2012 granted Lapsed/
cancelled balance as at
31 December 2012
Year of award no. of holders no. of shares no. of shares no. of shares no. of holders no. of shares
2010 20 871,700 – (95,000) 18 776,700 2011 29 1,286,700 – (136,000) 26 1,150,700 2012 – – 1,769,000 (49,000) 29 1,720,000
2,158,400 1,769,000 (280,000) 3,647,400
(ii) awards under the cMa restricted stock Plan Under the cMA restricted stock plan, awards granted to eligible participants vest only after the satisfactory
completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-related awards). performance-related awards differ from awards granted under the cMA performance share plan in that an extended vesting period is imposed beyond the performance target completion date.
cMA has instituted a set of share ownership guidelines for senior management who receive shares under the cMA restricted stock plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of cMA shares acquired through the cMA restricted stock plan which will vary according to their job grades and base salaries. the 2010 award to non-executive directors was time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, no share awards were granted under the cMA restricted stock plan to non-executive directors.
details of the movement in the awards by cMA during the year were as follows:
<----------- Movements during the year -----------> balance as at
1 January 2012 granted released* Lapsed/
cancelled balance as at
31 December 2012
Year of award no. of holders no. of shares no. of shares no. of shares no. of shares no. of holders no. of shares
2010 716 2,778,529 – (1,390,644) (155,546) 667 1,232,339 2011 934 5,208,345 1,056,139 (2,028,091) (459,085) 847 3,777,308 2012 – – 6,328,400 – (403,610) 701 5,924,790
7,986,874 7,384,539 (3,418,735) (1,018,241) 10,934,437
* The number of shares released during the year was 3,418,735, of which 995,898 were cash-settled.
As at 31 december 2012, the number of shares comprised in awards granted under the cMA restricted stock plan is as follows:
equity-settled cash-settled total
Final number of shares has not been determined (baseline award)# 4,931,990 992,800 5,924,790 Final number of shares determined but not released 3,527,305 1,482,342 5,009,647
8,459,295 2,475,142 10,934,437
# The final number of shares released could range from 0% to 150% of the baseline award.
share PLans (cont’d) (g) awards under the australand share Plans (i) australand Performance rights Plan the establishment of the Australand performance rights plan was approved by Australand’s shareholders at the
2007 Annual General Meeting (“AGM”).
the number of securities outstanding under the Australand performance rights plan as at the end of the year is summarised below:
<--------------- Movements during the year --------------->
Year of award balance as at
1 January 2012 granted exercised Lapsed/
Forfeited balance as at
31 December 2012
2007 111,620 – (23,866) – 87,754 2008 35,673 – (5,420) – 30,253 2009 1,564,492 – (228,611) – 1,335,881 2010 1,442,256 – – (394,211) 1,048,045 2011 1,839,937 – – (39,900) 1,800,037 2012 – 2,061,039 – (39,100) 2,021,939
4,993,978 2,061,039 (257,897) (473,211) 6,323,909
(ii) australand tax exempt employee security Plan the Australand tax exempt employee security plan in which tax exempt stapled securities may be issued by the
company to employees for no cash consideration was approved by Australand’s shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand performance rights plan) who have been continuously employed by Australand for a period of at least nine months as at the invitation date and are still employees as at the acquisition date (the date Australand acquires the securities) are eligible to participate in the plan. employees may elect not to participate in the plan.
the plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves Australand. Under the plan, employees will receive the same benefits as all other security holders.
the number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which Australand’s stapled securities are traded on the Australian stock exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
No securities were issued under the Australand tax exempt employee security plan during the year. in 2011, 108,016 securities were issued at the weighted average market price of A$2.90 per security.
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146
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147
auDit coMMittee the Audit committee members at the date of this report are Ms euleen Goh Yiu Kiang (chairman), Mr James Koh cher siang, Mrs Arfat pannir selvam and tan sri Amirsham Bin A Aziz.
the Audit committee performs the functions specified by section 201B of the companies Act, chapter 50 (the “Act”), the Listing Manual of the sGX-st, and the code of corporate Governance.
the principal responsibility of the Audit committee is to assist the Board of directors in fulfilling its oversight responsibilities. Areas of review by the Audit committee include:
• the reliability and integrity of the financial statements;
• the impact of new, revised or proposed changes in accounting policies or regulatory requirements on the financial statements;
• the compliance with laws and regulations, particularly those of the Act and the Listing Manual of the SGX-ST;
• the appropriateness of quarterly and full year announcements and reports;
• the adequacy of internal controls and evaluation of adherence to such controls; • the effectiveness and efficiency of internal and external audits;
• the appointment and re-appointment of external auditors and the level of auditors’ remuneration;
• the nature and extent of non-audit services and their impact on independence and objectivity of the external auditors;
• interested person transactions;
• the findings of internal investigation, if any;
• the framework and processes established for the implementation of the terms of the collaboration agreement with CMA in order to ensure that such framework and processes remain appropriate;
• the processes put in place to manage any material conflicts of interest within the Group; and
• all conflicts of interest matters referred to it.
the Audit committee also reviews arrangements by which employees of the company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. pursuant to this, the Audit committee has introduced a Whistle Blowing policy where employees may raise improprieties to the Audit committee chairman in good faith, with the confidence that employees making such reports will be treated fairly and be protected from reprisal.
the Audit committee met four times in 2012. specific functions performed during the year included reviewing the scope of work and strategies of both the internal and external auditors, and the results arising therefrom, including their evaluation of the system of internal controls. the Audit committee also reviewed the assistance given by the company’s officers to the auditors. the financial statements of the Group and the company were reviewed by the Audit committee prior to the submission to the Board of directors of the company for adoption. the Audit committee also met with the internal and external auditors, without the presence of management, to discuss issues of concern to them.
auDit coMMittee (cont’d) the Audit committee has, in accordance with chapter 9 of the Listing Manual of the sGX-st, reviewed the requirements for approval and disclosure of interested person transactions, reviewed the procedures set by the Group and the company to identify and report and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed interested person transactions.
the Audit committee also undertook quarterly reviews of all non-audit services provided by KpMG LLp and its member firms and was satisfied that they did not affect their independence as external auditors of the company.
the Audit committee has recommended to the Board of directors that the auditors, KpMG LLp, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the company. auDitors the auditors, KpMG LLp, have indicated their willingness to accept re-appointment.
on behalf of the Board of directors
ng Kee choe Director
LiM Ming Yan Director
singapore 28 February 2013
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149
stAteMeNt BY directors in our opinion:
(a) the financial statements set out on pages 150 to 241 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the company as at 31 december 2012, and of the results and changes in equity of the Group and of the company, and of the cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.
the Board of directors has, on the date of this statement, authorised these financial statements for issue.
on behalf of the Board of directors
ng Kee choe Director
LiM Ming Yan Director
singapore 28 February 2013
We have audited the accompanying financial statements of capitaLand Limited (the “company”) and its subsidiaries (the “Group”), which comprise the balance sheets of the Group and the company as at 31 december 2012, the income statements, statements of comprehensive income and statements of changes in equity of the Group and the company and the statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 150 to 241.
Management’s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the singapore companies Act, chapter 50 (the “Act”) and singapore Financial reporting standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.
Auditors’ responsibility our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with singapore standards on Auditing. those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. the procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. in making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion in our opinion, the consolidated financial statements of the Group and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the Act and singapore Financial reporting standards to give a true and fair view of the state of affairs of the Group and of the company as at 31 december 2012 and the results and changes in equity of the Group and the company and cash flows of the Group for the year ended on that date.
Report on other legal and regulatory requirements in our opinion, the accounting and other records required by the Act to be kept by the company and by those subsidiaries incorporated in singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMg LLP PubLic accountants anD certiFieD PubLic accountants
singapore 28 February 2013
iNdepeNdeNt AUditors’ report to the members of capitaLand Limited
150
appendix stAtUtorY AccoUNts
151
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
non-current assets property, plant and equipment 3 1,263,615 1,075,505 14,400 12,830 intangible assets 4 462,093 458,722 147 147 investment properties 5 7,969,402 7,074,617 – – subsidiaries 6 – – 10,546,914 10,605,809 Associates 7(a) 9,692,297 9,290,737 – – Joint ventures 8(a) 2,818,985 1,394,263 – – deferred tax assets 9 91,595 95,671 2,589 2,884 other non-current assets 10(a) 795,713 795,955 – –
23,093,700 20,185,470 10,564,050 10,621,670 current assets development properties for sale and stocks 11 7,510,093 6,905,124 – – trade and other receivables 12 1,484,753 1,769,374 2,447,221 2,590,302 other current assets 10(b) 201,370 195,000 – – cash and cash equivalents 15 5,497,693 6,264,473 442,650 326,539
14,693,909 15,133,971 2,889,871 2,916,841 Less: current liabilities trade and other payables 16 2,359,598 2,270,488 76,694 70,834 short term bank borrowings 18 765,826 426,011 – – current portion of debt securities 19 16,346 434,228 – – current tax payable 432,489 441,075 7,560 7,560
3,574,259 3,571,802 84,254 78,394 net current assets 11,119,650 11,562,169 2,805,617 2,838,447
Less: non-current liabilities Long term bank borrowings 18 6,617,114 6,105,790 – – debt securities 19 6,780,492 5,224,610 3,512,287 3,432,956 deferred tax liabilities 9 658,989 627,638 33,558 44,367 other non-current liabilities 20 712,971 550,130 17,628 27,815
14,769,566 12,508,168 3,563,473 3,505,138 net assets 19,443,784 19,239,471 9,806,194 9,954,979
representing: share capital 22 6,300,011 6,298,355 6,300,011 6,298,355 revenue reserves 8,910,445 8,328,115 3,125,358 3,296,610 other reserves 23 (130,048) 275,067 380,825 360,014 equity attributable to owners of the company 15,080,408 14,901,537 9,806,194 9,954,979 non-controlling interests 4,363,376 4,337,934 – – total equity 19,443,784 19,239,471 9,806,194 9,954,979
BALANce sHeets as at 31 December 2012
The accompanying notes form an integral part of these financial statements.
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
revenue 25 3,301,363 3,019,569 444,827 499,542 cost of sales (2,073,289) (1,946,684) – – Gross profit 1,228,074 1,072,885 444,827 499,542 other operating income 26(a) 586,949 713,704 62,107 160,625 Administrative expenses (580,251) (530,187) (100,063) (92,051) other operating expenses (52,122) (46,459) (65,194) (147,184) Profit from operations 1,182,650 1,209,943 341,677 420,932 Finance costs 26(d) (498,953) (472,785) (185,330) (181,047) share of results (net of tax) of: – associates 699,197 651,194 – – – joint ventures 135,584 225,452 – –
834,781 876,646 – – Profit before taxation 26 1,518,478 1,613,804 156,347 239,885 taxation 27 (201,907) (190,884) 12,422 11,336 Profit for the year 1,316,571 1,422,920 168,769 251,221
attributable to: owners of the company 930,347 1,057,311 168,769 251,221 non-controlling interests 386,224 365,609 – – Profit for the year 1,316,571 1,422,920 168,769 251,221
basic earnings per share (cents) 28 21.9 24.8 Diluted earnings per share (cents) 28 21.7 24.6
iNcoMe stAteMeNts Year ended 31 December 2012
The accompanying notes form an integral part of these financial statements.
152
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153
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
profit for the year 1,316,571 1,422,920 168,769 251,221
other comprehensive income: exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations (443,366) 145,889 – – change in fair value of available-for-sale investments (254) (43,848) – – effective portion of change in fair value of cash flow hedges (63,600) (75,048) – – share of other comprehensive income of associates and joint ventures (84,312) 101,812 – – total other comprehensive income for the year, net of income tax 24 (591,532) 128,805 – – total comprehensive income for the year 725,039 1,551,725 168,769 251,221
attributable to: owners of the company 487,993 1,153,805 168,769 251,221 non-controlling interests 237,046 397,920 – – total comprehensive income for the year 725,039 1,551,725 168,769 251,221
stAteMeNts oF coMpreHeNsive iNcoMe Year ended 31 December 2012
The accompanying notes form an integral part of these financial statements.
stAteMeNts oF cHANGes iN eqUitY Year ended 31 December 2012
attributable to owners of the company
share capital
revenue reserves
other reserves total
non- controlling
interests total
equity
the group $’000 $’000 $’000 $’000 $’000 $’000
at 1 January 2012 6,298,355 8,328,115 275,067 14,901,537 4,337,934 19,239,471
total comprehensive income profit for the year – 930,347 – 930,347 386,224 1,316,571
other comprehensive income exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations – – (333,608) (333,608) (109,758) (443,366) change in fair value of available-for-sale investments – – (254) (254) – (254) effective portion of change in fair value of cash flow hedges – – (36,761) (36,761) (26,839) (63,600) share of other comprehensive income of associates and joint ventures – – (71,731) (71,731) (12,581) (84,312) total other comprehensive income, net of income tax – – (442,354) (442,354) (149,178) (591,532) total comprehensive income – 930,347 (442,354) 487,993 237,046 725,039
transactions with owners, recorded directly in equity issue of shares 1,656 – (7,840) (6,184) 7,943 1,759 dividends paid/payable – (340,021) – (340,021) (151,565) (491,586) share-based payments – – 27,166 27,166 13,507 40,673 Non-controlling interests contributions (net) – – – – 69,790 69,790 effects of reclassification of a subsidiary to interest in joint venture – – – – (150,000) (150,000) changes in ownership interests in subsidiaries with a change in control – – – – (135) (135) changes in ownership interests in subsidiaries with no change in control – 974 66 1,040 (1,040) – share of reserves of associates and joint ventures – (10,861) 19,083 8,222 (533) 7,689 others – 1,891 (1,236) 655 429 1,084 total transactions with owners 1,656 (348,017) 37,239 (309,122) (211,604) (520,726) at 31 December 2012 6,300,011 8,910,445 (130,048) 15,080,408 4,363,376 19,443,784
The accompanying notes form an integral part of these financial statements.
154
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155
attributable to owners of the company
share capital
revenue reserves
other reserves total
non- controlling
interests total
equity
the group $’000 $’000 $’000 $’000 $’000 $’000
at 1 January 2011 6,276,504 7,511,740 243,689 14,031,933 3,833,271 17,865,204
total comprehensive income profit for the year – 1,057,311 – 1,057,311 365,609 1,422,920
other comprehensive income exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations – – 95,337 95,337 50,552 145,889 change in fair value of available-for-sale investments – – (43,848) (43,848) – (43,848) effective portion of change in fair value of cash flow hedges – – (47,372) (47,372) (27,676) (75,048) share of other comprehensive income of associates and joint ventures – – 92,377 92,377 9,435 101,812 total other comprehensive income, net of income tax – – 96,494 96,494 32,311 128,805 total comprehensive income – 1,057,311 96,494 1,153,805 397,920 1,551,725
transactions with owners, recorded directly in equity issue of shares 21,851 – (20,694) 1,157 – 1,157 purchase of treasury shares – – (63,456) (63,456) – (63,456) dividends paid/payable – (256,161) – (256,161) (147,654) (403,815) share-based payments – – 28,800 28,800 2,958 31,758 Non-controlling interests contributions (net) – – – – 151,059 151,059 changes in ownership interests in subsidiaries with a change in control – – – – 144,249 144,249 changes in ownership interests in subsidiaries with no change in control – 17,322 (3,436) 13,886 (43,154) (29,268) share of reserves of associates and joint ventures – (14,455) 5,225 (9,230) (765) (9,995) others – 12,358 (11,555) 803 50 853 total transactions with owners 21,851 (240,936) (65,116) (284,201) 106,743 (177,458) at 31 December 2011 6,298,355 8,328,115 275,067 14,901,537 4,337,934 19,239,471
The accompanying notes form an integral part of these financial statements.
attributable to owners of the company
share capital
revenue reserves
reserves For own
shares capital
reserves
equity compensation
reserve total
equity
the company $’000 $’000 $’000 $’000 $’000 $’000
at 1 January 2012 6,298,355 3,296,610 (63,456) 383,490 39,980 9,954,979
total comprehensive income profit for the year – 168,769 – – – 168,769
transactions with owners, recorded directly in equity dividends paid – (340,021) – – – (340,021) issue of shares 1,656 – – – (204) 1,452 issue of treasury shares – – 14,090 – (2,560) 11,530 share-based payments – – – – 9,485 9,485 total transactions with owners 1,656 (340,021) 14,090 – 6,721 (317,554) at 31 December 2012 6,300,011 3,125,358 (49,366) 383,490 46,701 9,806,194
at 1 January 2011 6,276,504 3,301,550 – 383,490 37,862 9,999,406
total comprehensive income profit for the year – 251,221 – – – 251,221
transactions with owners, recorded directly in equity dividends paid – (256,161) – – – (256,161) issue of shares 21,851 – – – (4,813) 17,038 purchase of treasury shares – – (63,456) – – (63,456) share-based payments – – – – 6,931 6,931 total transactions with owners 21,851 (256,161) (63,456) – 2,118 (295,648) at 31 December 2011 6,298,355 3,296,610 (63,456) 383,490 39,980 9,954,979
stAteMeNts oF cHANGes iN eqUitY Year ended 31 December 2012
The accompanying notes form an integral part of these financial statements.
156
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157
coNsoLidAted stAteMeNt oF cAsH FLoWs Year ended 31 December 2012
The accompanying notes form an integral part of these financial statements.
2012 $’000
2011 $’000
operating activities profit after taxation 1,316,571 1,422,920
Adjustments for: Amortisation and impairment of intangible assets 1,256 1,601 Allowance/(reversal of allowance) for: – foreseeable losses, net 33,429 39,155 – doubtful receivables 22,934 406 – impairment on financial assets 6,242 1,329 – impairment on interests in associates and joint ventures 5,034 3,437 – impairment on property, plant and equipment 8,768 729 Gain from bargain purchase (4,488) (26) share-based expenses 46,652 34,343 depreciation of property, plant and equipment 45,111 39,008 Gain on disposal of property, plant and equipment (41,836) (969) Gain on disposal of investment properties – (19,411) Net fair value gain from investment properties (155,092) (285,032) Net gain on disposal/liquidation/dilution of equity investments and other financial assets (170,850) (227,017) realisation of reserves for pre-existing interest in acquirees (5,146) (12,631) share of results of associates and joint ventures (834,781) (876,646) Accretion of deferred income (3,302) 9,910 Finance costs 498,953 472,785 interest income (93,764) (80,957) taxation 201,907 190,884
(438,973) (709,102) operating profit before working capital changes 877,598 713,818
changes in working capital: trade and other receivables 56,894 (104,993) development properties for sale (642,410) (1,073,350) trade and other payables 104,471 (142,482) restricted bank deposits 5,396 (6,777)
(475,649) (1,327,602) cash generated from/(used in) operations 401,949 (613,784) income tax paid (152,650) (194,922) net cash generated from/(used in) operating activities 249,299 (808,706)
note 2012
$’000 2011
$’000
investing activities proceeds from disposal of property, plant and equipment 221,695 3,470 purchase of property, plant and equipment (145,895) (135,493) investments in associates and joint ventures (1,404,352) (183,263) Advance to investee companies and other receivables (30,931) (7,354) prepayment for acquisition of an investment property (38,091) (22,441) deposits for new investments (86,702) (400,000) deposit for disposal of a subsidiary – 48,976 Acquisition of investment properties (877,620) (1,958,528) proceeds from disposal of investment properties 93,854 502,889 proceeds from disposal of/(investment in) other financial assets 17,932 (267,580) dividends received from associates and joint ventures 421,323 533,174 Acquisitions of subsidiaries, net of cash acquired 30(b) (426,382) (419,018) disposals of subsidiaries, net of cash disposed off 30(d) 323,001 1,142,375 interest income received 46,470 52,513 net cash used in investing activities (1,885,698) (1,110,280)
Financing activities proceeds from issue of shares under options 1,011 2,804 purchase of treasury shares – (63,456) Borrowings from non-controlling interests 56,411 49,083 (return of capital to)/contributions from non-controlling interests (917) 149,412 proceeds from disposal/(payments for acquisition) of ownership interests in subsidiaries with no change in control 69,928 (29,268) proceeds from bank borrowings 3,348,158 5,516,970 repayments of bank borrowings (2,524,434) (3,522,087) proceeds from issue of debt securities 1,482,965 696,200 repayments of debt securities (431,737) (919,614) dividends paid to non-controlling interests (152,997) (146,239) dividends paid to shareholders (340,021) (256,161) interest expense paid (552,060) (495,946) net cash generated from financing activities 956,307 981,698 net decrease in cash and cash equivalents (680,092) (937,288) cash and cash equivalents at beginning of the year 6,254,967 7,187,335 effect of exchange rate changes on cash balances held in foreign currencies (81,292) 4,920 cash and cash equivalents at end of the year 15 5,493,583 6,254,967
The accompanying notes form an integral part of these financial statements.
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notes to the Financial statements these notes form an integral part of the financial statements.
the financial statements were authorised for issue by the Board of Directors on 28 February 2013.
1 Domicile AnD Activities capitaland limited (the “company”) is incorporated in the republic of singapore and has its registered office at
168 robinson road, #30-01, capital tower, singapore 068912.
the principal activities of the company during the financial year are those relating to investment holding and consultancy services as well as the corporate headquarters which gives direction, provides management support services and integrates the activities of its subsidiaries.
the principal activities of the significant subsidiaries are those relating to investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services as well as management of serviced residences.
the consolidated financial statements relate to the company and its subsidiaries (the “Group”) and the Group’s interests in associates and joint ventures.
2 summAry of significAnt Accounting Policies (a) Basis of preparation the financial statements have been prepared in accordance with the singapore Financial reporting standards (“Frs”).
the financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.
these financial statements are presented in singapore Dollars, which is the company’s functional currency. all financial information presented in singapore Dollars have been rounded to the nearest thousand, unless otherwise stated.
the preparation of the financial statements in conformity with Frss requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. actual results may differ from these estimates.
estimates and underlying assumptions are reviewed on an ongoing basis. revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
information about critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:
note 9 – recognition of deferred tax assets
information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:
note 2(d), note 3 – determination of useful lives of property, plant and equipment and estimation of residual value of serviced residence properties
note 4 – measurement of recoverable amounts of goodwill note 5 – fair value determination of investment properties note 11 – estimation of the percentage of completion of the projects’ attributable profits for development
properties for sale and allowance for foreseeable losses
2 summAry of significAnt Accounting Policies (cont’d) (a) Basis of preparation (cont’d) note 20 – measurement of provisions note 21 – measurement of share-based payments note 31 – fair value determination of assets, liabilities and contingent liabilities acquired in business combinations note 32 – fair value determination of financial instruments
the Group applies the amendments to Frs 12 Income Tax – Deferred Tax: Recovery of Underlying Assets, which became effective as of 1 January 2012. the amendments apply to the measurement of deferred tax liabilities and assets arising from investment properties measured using the fair value model under Frs 40 Investment Property. For the purposes of measuring deferred tax, the amendments introduce a rebuttable presumption that the carrying amount of such investment property will be recovered entirely through sale. the adoption of amendments to Frs 12 do not have any significant impact on the financial position or performance of the Group.
except for the above changes, the accounting policies set out below have been applied consistently by the Group to all periods presented in these financial statements and have been applied consistently by the entities in the Group.
(b) Basis of consolidation (i) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. in assessing control, the Group takes into consideration potential voting rights that are currently exercisable.
the consideration transferred does not include amounts related to the settlement of pre-existing relationships. such amounts are generally recognised in the profit or loss.
any contingent consideration payable is recognised at fair value at the acquisition date and included in the consideration transferred. if the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. otherwise, subsequent changes to the fair value of the contingent consideration are recognised in the profit or loss.
costs related to the acquisition, other than those associated with the issue of debt or equity securities, that
the Group incurs in connection with a business combination are expensed as incurred. non-controlling interests that are present ownership interests and entitle their holders to a proportionate
share of the acquiree’s net assets in the events of liquidation are measured either at fair value or at the non- controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets, at the acquisition date. the measurement basis taken is elected on a transaction-by-transaction basis. all other non-controlling interests are measured at acquisition-date fair value. if the business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is re-measured to fair value at each acquisition date and any changes are taken to the profit or loss.
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2 summAry of significAnt Accounting Policies (cont’d) (b) Basis of consolidation (cont’d) (ii) Subsidiaries subsidiaries are entities controlled by the Group. the financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases. losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. any surplus or deficit arising from the loss of control is recognised in the profit or loss. if the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
(iii) Associates and joint ventures associates are those entities in which the Group has significant influence, but not control, over their financial
and operating policies. significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Joint ventures are entities (including unincorporated or incorporated companies, partnerships and trusts) over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.
associates and joint ventures (collectively referred to as “equity-accounted investees”) are accounted for using the equity method and are recognised initially at cost. the cost of the investments includes transaction costs. the Group’s investments in equity-accounted investees include goodwill identified on acquisition, net of any accumulated impairment losses. the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest is stated at zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation to fund the investee’s operation or has made payments on behalf of the investee.
(iv) Transactions eliminated on consolidation intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(v) Accounting for subsidiaries, associates and joint ventures by the Company investments in subsidiaries, associates and joint ventures are stated in the company’s balance sheet at cost
less accumulated impairment losses.
2 summAry of significAnt Accounting Policies (cont’d) (c) foreign currencies Foreign currency transactions items included in the financial statements of each entity in the Group are measured using the currency that
best reflects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”).
transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at the exchange rates at the dates of the transactions. monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate prevailing at that reporting date. non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.
Foreign currency differences arising from retranslation are recognised in the profit or loss, except for differences arising from the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation, available-for-sale equity instruments and financial liabilities designated as hedges of net investment in a foreign operation (see note 2(g)) or qualifying cash flow hedges to the extent such hedges are effective, which are recognised in other comprehensive income.
Foreign operations the assets and liabilities of foreign operations are translated to singapore Dollars at exchange rates prevailing at
the end of the reporting period. the income and expenses of foreign operations are translated to singapore Dollars at exchange rates prevailing at the dates of the transactions. Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the exchange rates at the end of the reporting period.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. however, if the foreign operation is not a wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed off such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is transferred to the profit or loss as part of the gain or loss on disposal. When the Group disposes off only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes off only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is transferred to the profit or loss.
Net investment in a foreign operation When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor
likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. these are recognised in other comprehensive income and are presented in the translation reserve in equity.
(d) Property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses. cost includes expenditure that is directly attributable to the acquisition of the asset. certain of the Group’s property, plant and equipment acquired through interests in subsidiaries, are accounted for as acquisition of assets.
subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset if it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group and its cost can be measured reliably. all other subsequent expenditure is recognised as an expense in the period in which it is incurred.
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2 summAry of significAnt Accounting Policies (cont’d) (d) Property, plant and equipment (cont’d) Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use.
Depreciation on property, plant and equipment is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment as follows:
leasehold land and buildings (excluding lease period ranging from serviced residence properties) 30 years to 50 years hospitality plant, machinery and improvements, furniture, fittings and equipment 1 to 10 years Plant, machinery and improvements 3 to 10 years motor vehicles 5 years Furniture, fittings and equipment 2 to 5 years
For serviced residence properties where the residual value at the end of the intended holding period is lower than the carrying amount, the difference in value is depreciated over the Group’s intended holding period. no depreciation is recognised where the residual value is higher than the carrying amount. the intended holding period (the period from the date of commencement of serviced residence operations to the date of expected strategic divestment of the properties) ranges from three to five years.
assets under construction are stated at cost and are not depreciated. expenditure relating to assets under construction (including borrowing costs) are capitalised when incurred. Depreciation will commence when the development is completed.
the assets’ residual values, useful lives and depreciation methods are reviewed at each reporting date, and adjusted if appropriate.
(e) intangible assets (i) Goodwill Acquisition on or after 1 January 2010 For business combinations on or after 1 January 2010, the Group measures goodwill as at acquisition date
based on the fair value of the consideration transferred (including the fair value of any pre-existing equity interest in the acquiree) and the recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the amount is negative, a bargain purchase gain is recognised in the profit or loss. Goodwill is subsequently measured at cost less accumulated impairment losses.
Goodwill arising from the acquisition of subsidiaries is included in intangible assets. Goodwill arising from the acquisition of associates and joint ventures is presented together with interests in associates and joint ventures.
Acquisition up to 31 December 2009 Prior to 1 January 2010, goodwill is measured at cost less accumulated impairment losses. Goodwill is tested
for impairment as described in note 2(j). negative goodwill is credited to the profit or loss in the period of the acquisition.
Acquisition of non-controlling interests From 1 January 2010, acquisitions of non-controlling interests are accounted for as transactions with owners in their
capacity as owners and therefore no goodwill is recognised. Previously, goodwill arising on the acquisition of non- controlling interests in a subsidiary has been recognised, and represented the excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date of the transaction.
2 summAry of significAnt Accounting Policies (cont’d) (e) intangible assets (cont’d) (ii) Other intangible assets other intangible assets with finite useful lives are measured at cost less accumulated amortisation and
impairment losses. they are amortised in the profit or loss on a straight-line basis over their estimated useful lives of one to 10 years, from the date on which they are available for use.
other intangible assets with indefinite useful lives are not amortised and are measured at cost less impairment losses.
(f) investment properties and investment properties under development investment properties are properties held either to earn rental or for capital appreciation or both. investment
properties under development are properties being constructed or developed for future use as investment properties. certain of the Group’s investment properties acquired through interests in subsidiaries, are accounted for as acquisition of assets. investment properties and investment properties under development are initially recognised at cost, including transaction costs, and subsequently at fair value with any change therein recognised in the profit or loss. the fair value is determined based on internal valuation or independent professional valuation. independent professional valuation is obtained at least once every three years.
When an investment property or investment property under development is disposed off, the resulting gain or loss recognised in the profit or loss is the difference between the net disposal proceed and the carrying amount of the property.
(g) financial instruments (i) Non-derivative financial assets non-derivative financial assets comprise investments in equity and debt securities, trade and other receivables
and cash and cash equivalents.
non-derivative financial assets are recognised initially at fair value plus, including financial assets not held at fair value through profit or loss, any directly attributable transaction costs. subsequent to initial recognition, non-derivative financial assets are measured as described below.
a financial asset is recognised if the Group becomes a party to the contractual provisions of the financial asset. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial assets to another party without retaining control or transfers substantially all the risks and rewards of the assets. regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset.
Financial assets at fair value through profit or loss a financial asset is classified as fair value through profit or loss if it is held for trading or is designated as such
upon initial recognition. Financial assets are designated as fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value. upon initial recognition, attributable transaction costs are recognised in the profit or loss when incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein, which takes into account any dividend income, are recognised in the profit or loss.
Available-for-sale financial assets the Group’s investments in equity securities and certain debt securities are classified as available-for-sale
financial assets. subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairment losses (see note 2(g)(v)) and foreign exchange gains and losses on available-for-sale monetary items (see note 2(c)), are recognised directly in other comprehensive income and presented in the available-for-sale reserve in equity. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is reclassified to the profit or loss.
investments in equity securities whose fair value cannot be reliably measured are measured at cost less impairment loss.
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2 suMMarY oF signiFicant accounting PoLicies (cont’d) (g) Financial instruments (cont’d) (i) Non-derivative financial assets (cont’d) Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. such assets are recognised initially at fair value plus any directly attributable transaction costs. subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents, and trade and other receivables.
Cash and cash equivalents cash and cash equivalents comprise cash balances and bank deposits. For the purpose of statement of
cash flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents.
Non-derivative financial liabilities the Group initially recognises debt securities issued and subordinated liabilities on the date that they are
originated. Financial liabilities for contingent consideration payable in a business combination are recognised at the acquisition date. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
the Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.
Financial liabilities for contingent consideration payable in a business combination are initially measured at fair value. subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
the Group classifies non-derivative financial liabilities under the other financial liabilities category. such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.
other financial liabilities comprise loans and borrowings and trade and other payables.
(ii) Derivative financial instruments and hedging activities the Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.
embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
on initial designation of the derivative as the hedging instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging relationship. the Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80%-125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the profit or loss when incurred. subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.
2 suMMarY oF signiFicant accounting PoLicies (cont’d) (g) Financial instruments (cont’d) (ii) Derivative financial instruments and hedging activities (cont’d) Cash flow hedges changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised
directly in other comprehensive income and presented in the hedging reserve in equity to the extent that the hedge is effective. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the profit or loss. if the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively. if the forecast transaction is no longer expected to occur, then the balance is reclassified to profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset when the asset is recognised. in other cases, the amount accumulated in equity is reclassified to the profit or loss in the same period that the hedged item affects profit or loss.
Fair value hedges changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised
in the profit or loss. the hedged item is adjusted to reflect change in its fair value in respect of the risk being hedged, with any gain or loss being recognised in the profit or loss.
Hedge of net investment in a foreign operation in the company’s financial statements, foreign currency differences arising from the retranslation of a financial
liability designated as a hedge of a net investment in a foreign operation are recognised in the profit or loss. on consolidation, such differences are recognised directly in other comprehensive income and presented in the foreign currency translation reserve in equity, to the extent that the hedge is effective. to the extent that the hedge is ineffective, such differences are recognised in the profit or loss. When the hedged net investment is disposed off, the cumulative amount in other comprehensive income is transferred to the profit or loss.
Separable embedded derivatives changes in the fair value of separated embedded derivatives are recognised immediately in the profit or loss.
Other non-trading derivatives When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting,
all changes in its fair value are recognised immediately in the profit or loss.
(iii) Convertible bonds convertible bonds that can be converted into share capital where the number of shares issued does not vary
with changes in the fair value of the bonds are accounted for as compound financial instruments. the gross proceeds are allocated to the equity and liability components, with the equity component being assigned the residual amount after deducting the fair value of the liability component from the fair value of the compound financial instrument.
subsequent to initial recognition, the liability component of convertible bonds is measured at amortised cost using the effective interest method. the equity component of convertible bonds is not re-measured. When the conversion option is exercised, its carrying amount will be transferred to the share capital. When the conversion option lapses, its carrying amount will be transferred to revenue reserve.
When a convertible bond is being repurchased before its maturity date, the purchase consideration (including directly attributable costs, net of tax effects) is allocated to the liability and equity components of the instrument at the date of transaction. Any resulting gain or loss relating to the liability component is recognised in the profit or loss.
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2 suMMarY oF signiFicant accounting PoLicies (cont’d) (g) Financial instruments (cont’d) (iv) Financial guarantees Financial guarantee contracts are classified as financial liabilities unless the Group or the company has previously
asserted explicitly that it regards such contracts as insurance contracts and accounted for them as such. Financial guarantees classified as financial liabilities such financial guarantees are recognised initially at fair value and are classified as financial liabilities. subsequent
to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantees is transferred to the profit or loss.
Financial guarantees classified as insurance contracts these financial guarantees are accounted for as insurance contracts. provision is recognised based on the
Group’s or the company’s estimate of the ultimate cost of settling all claims incurred but unpaid at the end of the reporting period.
the provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.
(v) Impairment of financial assets A financial asset not carried at fair value through profit or loss is assessed at each reporting period to determine
whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has been occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security.
All individually significant financial assets are assessed for specific impairment on an individual basis. All individually significant financial assets found not to be specifically impaired are then collectively assessed for any impairment that has incurred but not yet identified. the remaining financial assets that are not individually significant are collectively assessed for impairment by grouping together such instruments with similar risk characteristics.
in assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than that suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Losses are recognised in the profit or loss and reflected as an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated
in the available-for-sale reserve in equity to profit or loss. the cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in the profit or loss. changes in impairment provision attributable to application of the effective interest method are reflected as a component of interest income.
2 suMMarY oF signiFicant accounting PoLicies (cont’d) (g) Financial instruments (cont’d) (v) Impairment of financial assets (cont’d) if, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase
can be related objectively to an event occurring after the impairment loss was recognised in the profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in the profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.
(h) share capital ordinary shares are classified as equity. incremental costs directly attributable to the issue of ordinary shares and options are recognised as a deduction
from equity.
Where share capital recognised as equity is repurchased (“treasury shares”), the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. repurchased shares are classified as treasury shares and are presented in reserve for own share account. Where treasury shares are subsequently reissued, sold or cancelled, the consideration received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in non-distributable capital reserve.
(i) Development properties for sale development properties for sale are stated at the lower of cost plus, where appropriate (see note 2(n)), a portion
of the attributable profit, and estimated net realisable value, net of progress billings. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.
the cost of properties under development comprises specifically identified costs, including acquisition costs, development expenditure, borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development property are also capitalised, on a specific identification basis, as part of the cost of the development property until the completion of development.
(j) impairment of non-financial assets the carrying amounts of the Group’s non-financial assets, other than investment properties, inventories and
deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. if any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and as and when indicators of impairment are identified, an impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (“cGU”) exceeds its estimated recoverable amount.
the recoverable amount of an asset or cGU is the greater of its value in use and its fair value less costs to sell. in assessing value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or cGU. subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, cGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of cGU that are expected to benefit from the synergies of the combination.
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2 suMMarY oF signiFicant accounting PoLicies (cont’d) (j) impairment of non-financial assets (cont’d) An impairment loss is recognised if the carrying amount of an asset or its cGU exceeds its estimated recoverable
amount. impairment losses are recognised in the profit or loss. impairment losses recognised in respect of cGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. in respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate or a joint venture is not recognised separately, and therefore is not tested for impairment separately. instead, the entire amount of the investment in an associate or a joint venture is tested for impairment as a single asset when there is objective evidence that the investment in an associate or a joint venture may be impaired.
(k) employee benefits Short term employee benefits All short term employee benefits, including accumulated compensated absences, are recognised in the period
in which the employees render their services.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defined contribution plans contributions to post-employment benefits under defined contribution plans are recognised as an expense in
profit or loss in the period during which the related services are rendered by employees.
Long service leave entitlement Liabilities for other employee entitlements which are not expected to be paid or settled within twelve months of
the reporting date are accrued in respect of all employees at the present value of the future amounts expected to be paid based on a projected weighted average increase in wage and salary rates. expected future payments are discounted using interest rates on relevant government securities with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Share-based payments For equity-settled share-based payment transactions, the fair value of the services received is recognised as an
expense with a corresponding increase in equity over the vesting period during which the employees become unconditionally entitled to the equity instrument. the fair value of the services received is determined by reference to the fair value of the equity instrument granted at the grant date. At each reporting date, the number of equity instruments that are expected to be vested are estimated. the impact on the revision of original estimates is recognised as an expense and as a corresponding adjustment to equity over the remaining vesting period, unless the revision to original estimates is due to market conditions. No adjustment is made if the revision or actual outcome differs from the original estimate due to market conditions.
2 suMMarY oF signiFicant accounting PoLicies (cont’d) (k) employee benefits (cont’d) Share-based payments (cont’d) For cash-settled share-based payment transactions, the fair value of the goods or services received is recognised
as an expense with a corresponding increase in liability. the fair value of the services received is determined by reference to the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised for the period.
the proceeds received from the exercise of the equity instruments, net of any directly attributable transaction costs, are credited to share capital when the equity instruments are exercised.
(l) Provision A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
A provision for onerous contract is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. the provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with the contract.
(m) Leases When entities within the Group are lessees of a finance lease Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified
as finance leases. Upon initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of their fair value and the present value of the minimum lease payments. subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease liability. the finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability. contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the arrangement is not in the legal form of a lease.
When entities within the Group are lessees of an operating lease Where the Group has the use of assets under operating leases, payments made under the leases are recognised
in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease payments made. contingent rentals are charged to the profit or loss in the accounting period in which they are incurred.
When entities within the Group are lessors of an operating lease Assets subject to operating leases are included in either property, plant and equipment (see note 2(d)) or
investment properties (see note 2(f)).
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2 suMMarY oF signiFicant accounting PoLicies (cont’d) (n) revenue recognition Rental income rental income receivable under operating leases is recognised on a straight-line basis over the term of the lease,
except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives granted are recognised as an integral part of the total rental income to be received. contingent rentals are recognised as income in the accounting period in which they are earned.
Development properties for sale the Group recognises income on property development projects when the significant risks and rewards of
ownership have been transferred to the purchasers. For development projects under progressive payment scheme in singapore, whereby the legal terms in the sale contracts result in continuous transfer of work-in-progress to the purchasers, revenue is recognised based on the percentage of completion method. Under the percentage of completion method, profit is brought into profit or loss only in respect of sales procured and to the extent that such profit relates to the progress of construction work. the progress of construction work is measured by the proportion of the construction costs incurred to date to the estimated total construction costs for each project. For development projects under deferred payment scheme in singapore and overseas development projects, the revenue will be recognised upon the transfer of significant risks and rewards of ownership, which generally coincides with the time the development units are delivered to the purchasers.
revenue excludes goods and services or other sale taxes and is after deduction of any trade discounts. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of unit sold.
Financial advisory and management fee Financial advisory and management fee is recognised as and when services are rendered.
Dividends dividend income is recognised on the date that the Group’s right to receive payment is established.
Interest income interest income is recognised as it accrues, using the effective interest method.
(o) Finance costs Borrowing costs are recognised using the effective interest method, except to the extent that they are capitalised
as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.
(p) tax income tax expense comprises current and deferred tax. income tax expense is recognised in the profit or loss
except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
2 suMMarY oF signiFicant accounting PoLicies (cont’d) (p) tax (cont’d) deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. deferred tax is not recognised for: • temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss; • temporary differences related to investments in subsidiaries, associates and joint ventures to the extent that
the Group is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future; and
• taxable temporary differences arising on the initial recognition of goodwill.
the measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
in determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. the Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. this assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
(q) earnings per share the Group presents basic and diluted earnings per share (“eps”) data for its ordinary shares. Basic eps is
calculated by dividing the profit or loss attributable to owners of the company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. diluted eps is determined by adjusting the profit or loss attributable to owners of the company and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise issued convertible bonds and share plans granted to employees.
(r) operating segments An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. the chief operating decision-maker has been identified as the council of chief executive officers (“ceos”) that makes strategic resources allocation decisions. Following the re-organisation on 3 January 2013, the council of ceos has been renamed to executive Management council. the council comprises the president & Group ceo, all ceos of business units and key management officers of the corporate office.
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3 ProPertY, PLant anD equiPMent
serviced residence
properties Leasehold
land
other leasehold buildings
Plant, machinery
and improvements
Motor vehicles
Furniture, fittings and equipment
assets under
construction total
the group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
cost At 1 January 2012 806,127 5,128 61,788 95,523 2,424 328,515 66,948 1,366,453 translation differences (37,754) (43) (384) (2,679) (82) (13,402) (5,967) (60,311) Additions 3,373 – 501 2,622 848 47,345 90,180 144,869 Acquisition of subsidiaries (note 30(b)) 315,016 – – – – 3,356 – 318,372 disposal of subsidiaries (74,920) (4,244) (28,954) (44,231) (145) (14,560) – (167,054) disposals/Written off (169,764) – (428) (2,150) (459) (26,618) (6,378) (205,797) reclassification from other category of assets 18,277 – – – – – 121,551 139,828 reclassifications (3,552) – – (279) 5 3,834 (8) – At 31 december 2012 856,803 841 32,523 48,806 2,591 328,470 266,326 1,536,360
accumulated depreciation and impairment loss At 1 January 2012 22,305 315 15,537 47,252 1,280 204,259 – 290,948 translation differences (289) (3) (35) (1,714) (32) (9,581) – (11,654) impairment – – 1,306 – – 66 – 1,372 depreciation for the year 1,405 37 1,510 4,460 323 37,376 – 45,111 disposal of subsidiaries (8,580) (258) (3,091) (9,089) (86) (8,222) – (29,326) disposals/Written off – – (214) (2,005) (173) (21,314) – (23,706) reclassifications (182) – – (18) 1 199 – – At 31 december 2012 14,659 91 15,013 38,886 1,313 202,783 – 272,745
carrying amount At 1 January 2012 783,822 4,813 46,251 48,271 1,144 124,256 66,948 1,075,505 At 31 december 2012 842,144 750 17,510 9,920 1,278 125,687 266,326 1,263,615
cost At 1 January 2011 853,448 5,017 49,187 90,331 3,055 284,230 47,761 1,333,029 translation differences (21,244) 111 533 1,645 3 2,630 (6,247) (22,569) Additions 2,406 – 13,404 5,204 623 72,305 11,084 105,026 Acquisition of subsidiaries (note 30(b)) 201,645 – – 218 – 357 16,615 218,835 disposal of subsidiaries (229,397) – (164) – (555) (10,256) (1,738) (242,110 ) disposals/Written off (731) – (1,172) (2,278) (702) (22,425) – (27,308) reclassification from other category of assets – – – – – 1,550 – 1,550 reclassifications – – – 403 – 124 (527) – At 31 december 2011 806,127 5,128 61,788 95,523 2,424 328,515 66,948 1,366,453
accumulated depreciation and impairment loss At 1 January 2011 21,359 171 14,364 42,124 2,081 203,523 – 283,622 translation differences 820 10 (311) 436 3 1,463 – 2,421 depreciation for the year 126 134 1,958 6,783 336 29,671 – 39,008 disposal of subsidiaries – – – – (523) (9,141) – (9,664) disposals/Written off – – (474) (2,091) (617) (21,257) – (24,439) At 31 december 2011 22,305 315 15,537 47,252 1,280 204,259 – 290,948
carrying amount At 1 January 2011 832,089 4,846 34,823 48,207 974 80,707 47,761 1,049,407 At 31 december 2011 783,822 4,813 46,251 48,271 1,144 124,256 66,948 1,075,505
3 ProPertY, PLant anD equiPMent (cont’d) (a) residual values of serviced residence properties at the end of the intended holding period are determined based
on annual independent professional valuations, using valuation methods such as discounted cash flow and/or comparison method. residual value is the estimated amount that the Group would obtain from the disposal of a property if the property is already of the age and in the condition expected at the date when the Group has the intention to dispose that property. the key assumptions used to determine the residual values of serviced residence properties include market corroborated capitalisation yield, terminal yield and discount rate. in relying on valuation reports, management has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of current market conditions.
(b) As at 31 december 2012, certain property, plant and equipment with carrying value totalling approximately
$294.8 million (2011: $391.6 million) were mortgaged to banks to secure credit facilities for the Group (note 18). (c) during the financial year ended 31 december 2012, the Group transferred a portion of an investment property
under development amounting to $121.6 million to property, plant and equipment. the amount transferred represents the area that is designated to be owner-occupied.
(d) during the financial year ended 31 december 2012, interest capitalised as cost of property, plant and equipment
amounted to approximately $1.0 million (2011: $3.1 million) (note 26(d)).
renovations
and improvements
Furniture, fittings
and equipment
Motor vehicles total
the company $’000 $’000 $’000 $’000
cost At 1 January 2012 11,748 23,934 516 36,198 Additions 143 7,049 352 7,544 disposals/Written off (4) (1,713) (341) (2,058) At 31 december 2012 11,887 29,270 527 41,684
accumulated depreciation and impairment loss At 1 January 2012 11,379 11,780 209 23,368 impairment – 66 – 66 depreciation for the year 290 5,255 72 5,617 disposals/Written off (4) (1,700) (63) (1,767) At 31 december 2012 11,665 15,401 218 27,284
carrying amount At 1 January 2012 369 12,154 307 12,830 At 31 december 2012 222 13,869 309 14,400
cost At 1 January 2011 11,578 16,741 442 28,761 Additions 170 7,762 340 8,272 disposals/Written off – (569) (266) (835) At 31 december 2011 11,748 23,934 516 36,198
accumulated depreciation At 1 January 2011 10,784 9,380 433 20,597 depreciation for the year 595 2,961 42 3,598 disposals/Written off – (561) (266) (827) At 31 december 2011 11,379 11,780 209 23,368
carrying amount At 1 January 2011 794 7,361 9 8,164 At 31 december 2011 369 12,154 307 12,830
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4 intangibLe assets
goodwill others^ total
the group note $’000 $’000 $’000
cost At 1 January 2012 511,086 26,969 538,055 Acquisition of a subsidiary 30(b) 16,919 – 16,919 Additions – 1,202 1,202 disposals (12,350) – (12,350) reclassification to other category of assets – (726) (726) translation differences (478) (468) (946) At 31 december 2012 515,177 26,977 542,154
accumulated amortisation and impairment loss At 1 January 2012 66,161 13,172 79,333 Amortisation for the year – 1,329 1,329 reversal of impairment – (73) (73) translation differences (182) (346) (528) At 31 december 2012 65,979 14,082 80,061
carrying amount At 1 January 2012 444,925 13,797 458,722 At 31 december 2012 449,198 12,895 462,093
cost At 1 January 2011 511,341 26,048 537,389 Acquisition of a subsidiary – 835 835 Additions – 410 410 disposals/Written off (492) (21) (513) translation differences 237 (303) (66) At 31 december 2011 511,086 26,969 538,055
accumulated amortisation and impairment loss At 1 January 2011 65,924 11,860 77,784 Amortisation for the year – 1,601 1,601 translation differences 237 (289) (52) At 31 december 2011 66,161 13,172 79,333
carrying amount At 1 January 2011 445,417 14,188 459,605 At 31 december 2011 444,925 13,797 458,722
goodwill others^ total
the company $’000 $’000 $’000
cost and carrying amount At 1 January 2011, 31 december 2011 and 31 december 2012 – 147 147
^ Others comprise trademarks, franchises, patents, licences and club memberships.
4 intangibLe assets (cont’d) Impairment test for Goodwill For the purpose of goodwill impairment testing, the carrying amounts of goodwill allocated to the cash-generating
units (“cGU”) as at 31 december were as follows:
terminal growth rates Discount rates carrying value
2012 %
2011 %
2012 %
2011 %
2012 $’000
2011 $’000
the Ascott Limited (“Ascott”) 0.4 0.7 5.8 5.6 432,279 444,925 A serviced residence in London 2.5 – 7.8 – 16,919 – Balance as at 31 december 449,198 444,925
the recoverable amounts of the cGU are determined based on value in use calculations. the value in use calculation is
a discounted cash flow model using cash flow projections based on the most recent budgets and forecasts approved by management covering three to five years. cash flows beyond these periods are extrapolated using the estimated terminal growth rates stated in the table above. the discount rates applied are the weighted average cost of capital from the relevant business segment. the key assumptions are those relating to expected changes in average room rates and occupancy and direct costs. the terminal growth rates used for each cGU do not exceed management’s expectation of the long term average growth rates of the respective industry and country in which the cGU operates.
the Group believes that any reasonably possible changes in the above key assumptions applied are not likely to materially cause the recoverable amount to be lower than its carrying amount.
5 investMent ProPerties
the group
note 2012
$‘000 2011
$‘000
At 1 January 7,074,617 4,732,895 Acquisition of subsidiaries 30(b) 544,416 428,255 disposal of subsidiaries 30(d) (249,579) (239,052) Additions 904,341 2,172,334 disposals (93,874) (471,248) reclassification (to)/from development properties for sale and property, plant and equipment (194,986) 52,347 changes in fair value 26(a) 155,092 285,032 translation differences (170,625) 114,054 At 31 december 7,969,402 7,074,617
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5 investMent ProPerties (cont’d) (a) investment properties, which include investment properties in the course of development are stated at fair value
based on independent professional valuations or internal valuations. the fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion. in determining the fair value, the valuers have used valuation techniques which involve certain estimates. the key assumptions used to determine the fair value of investment properties include market- corroborated capitalisation yield, terminal yield and discount rate. in relying on the valuation reports, management has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of current market conditions.
the valuers have considered valuation techniques including the direct comparison method, capitalisation approach, discounted cash flows and residual method in arriving at the open market value as at the balance sheet date. the direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the investment properties. the capitalisation approach capitalises an income stream into a present value using revenue multipliers or single-year capitalisation rates. the discounted cash flow method involves the estimation and projection of an income stream over a period and discounting the income stream with an internal rate of return to arrive at the market value. in the residual method of valuation, the total gross development costs and developer’s profit are deducted from the gross development value to arrive at the residual value of land. the gross development value is the estimated value of the property assuming satisfactory completion of the development as at the date of valuation.
(b) As at 31 december 2012, investment properties valued at $2,956.1 million (2011: $3,376.5 million) were under development.
(c) As at 31 december 2012, certain investment properties with carrying value of approximately $3,319.2 million (2011: $2,289.0 million) were mortgaged to banks to secure credit facilities for the Group (notes 18 and 19).
(d) during the financial year ended 31 december 2012, interest capitalised as cost of investment properties amounted to approximately $52.6 million (2011: $23.5 million) (note 26(d)).
(e) investment properties of the Group are held mainly for use by tenants under operating leases. Minimum lease payments receivable under non-cancellable operating leases of investment properties and not recognised in the financial statements are as follows:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
Lease rentals receivable: Not later than 1 year 346,878 300,985 – – Between 1 and 5 years 1,096,018 1,030,601 – – After 5 years 638,301 491,466 – –
2,081,197 1,823,052 – – (f) contingent rents, representing income based on sales turnover achieved by tenants, amounted to $5.7 million for
the year (2011: $3.5 million).
6 subsiDiaries
the company
2012 $‘000
2011 $‘000
(a) Unquoted shares, at cost 7,438,402 7,434,320 Less: Allowance for impairment loss (87,459) (70,264)
7,350,943 7,364,056 Add: Amounts due from subsidiaries: Loan accounts – interest bearing 1,424,750 1,424,750 – interest free 1,957,468 1,956,745 Less: Allowance for doubtful receivables (186,247) (139,742)
3,195,971 3,241,753 10,546,914 10,605,809
(i) the loans to subsidiaries form part of the company’s net investment in the subsidiaries. these loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
(ii) As at 31 december 2012, the effective interest rates for amounts due from subsidiaries ranged from 2.10% to 2.95% (2011: 2.10% to 2.95%) per annum.
(iii) Movements in allowance for impairment loss were as follows:
the company
note 2012
$‘000 2011
$‘000
At 1 January (70,264) (113,700) Allowance during the year (31,904) (16,931) reversal of allowance during the year 26(a) 2,601 – transfer to allowance for doubtful receivables 6(a)(iv) 12,108 – Allowance utilised upon disposal – 60,367 At 31 december (87,459) (70,264)
during the year ended 31 december 2012, an allowance for impairment loss amounting to $31.9 million (2011:
$16.9 million) was recognised in respect of the company’s investments in certain subsidiaries as a result of a decline in market value of assets held by these subsidiaries, arising from a deterioration of the economic environment in which the relevant subsidiaries operate. the recoverable amounts for each of the relevant subsidiaries were estimated based on the higher of the value in use calculation using cash flow projections based on financial budgets and forecasts covering a three year period, or the fair value of the net assets as at balance sheet date. during the year, a transfer of impairment amounting to $12.1 million was also made as a result of an internal restructuring.
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6 subsiDiaries (cont’d) (a) Unquoted shares, at cost (cont’d) (iv) the movements in allowances for doubtful receivables in respect of the amounts due from subsidiaries were
as follows:
the company
note 2012
$‘000 2011
$‘000
At 1 January (139,742) (8,960) Allowance during the year (34,397) (130,782) transfer from allowance for impairment loss 6(a)(iii) (12,108) – At 31 december (186,247) (139,742)
in 2012, an allowance for doubtful receivables of $34.4 million (2011: $130.8 million) was made in respect of loans extended to subsidiaries based on the estimated future cashflow recoveries.
(b) details of the subsidiaries are set out in note 37.
7 associates
the group
2012 $‘000
2011 $‘000
(a) interests in associates investment in associates 9,083,337 8,668,135 Less: Allowance for impairment loss (28,049) (48,090)
9,055,288 8,620,045 Add: Amounts due from associates: Loan accounts – interest free 305,774 339,910 – interest bearing 331,289 331,289
637,063 671,199 9,692,351 9,291,244
Less: Allowance for doubtful receivables (54) (507)
9,692,297 9,290,737
(i) Movements in allowance for impairment loss were as follows:
the group
note 2012
$‘000 2011
$‘000
At 1 January (48,090) (48,473) Allowance during the year 26(c)(iii) (4,612) (3,437) Allowance utilised upon disposal 24,653 3,820 At 31 december (28,049) (48,090)
(ii) the loans to associates form part of the Group’s net investment in associates. these loans are unsecured and
settlement is neither planned nor likely to occur in the foreseeable future.
7 associates (cont’d) (a) interests in associates (cont’d) (iii) As at 31 december 2012, the effective interest rate for the loan to an associate is 2.28% (2011: 2.54%)
per annum.
(iv) Loan accounts include an amount of approximately $331.3 million (2011: $331.3 million) of which its repayment is subordinated to that of the external borrowings taken by an associate.
(v) the Group’s share of the contingent liabilities of the associates is $360.9 million (2011: $339.6 million).
(vi) the Group’s investments in associates include investments in listed associates with a carrying amount of $4,969.3 million (2011: $4,774.6 million), for which the published price quotations are $5,433.8 million (2011: $3,900.1 million).
the group
note 2012
$‘000 2011
$‘000
(b) Amounts due from/(to) associates: current accounts (unsecured) – interest free (trade) 64,131 60,616 – interest free (non-trade) 62,699 84,570 – interest bearing (non-trade) 498,550 269,416
625,380 414,602 Less: Allowance for doubtful receivables (19,759) (5,475)
12 605,621 409,127
current accounts (mainly non-trade and unsecured) – interest free (164,068) (114,431) – interest bearing (171,374) (155,474)
16 (335,442) (269,905) (c) details of the associates are set out in note 38.
(d) the financial information of the associates, not adjusted for the percentage ownership held by the Group is as follows:
the group
2012 $‘000
2011 $‘000
balance sheet total assets 50,122,018 47,535,023 total liabilities 23,663,896 22,345,535
income statement revenue 4,830,656 4,682,279 profit after taxation 2,271,633 1,969,598
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8 Joint ventures
the group
2012 $‘000
2011 $‘000
(a) interests in joint ventures investment in joint ventures 1,841,201 1,123,804 Less: Allowance for impairment loss (10,633) (10,211)
1,830,568 1,113,593 Amounts due from joint ventures: Loan accounts – interest free 838,533 104,841 – interest bearing 162,341 188,954
1,000,874 293,795 2,831,442 1,407,388
Less: Allowance for doubtful receivables (12,457) (13,125)
2,818,985 1,394,263
(i) Movements in allowance for impairment loss were as follows:
the group
note 2012
$‘000 2011
$‘000
At 1 January (10,211) (13,004) Allowance during the year 26(c)(iii) (422) – Allowance utilised upon disposal – 2,793 At 31 december (10,633) (10,211)
(ii) the loans to joint ventures form part of the Group’s net investment in joint ventures. these loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.
As at 31 december 2012, the effective interest rates for the loans to joint ventures ranged from 1.06% to 7.25% (2011: 1.00% to 7.25%) per annum.
Loan accounts include an amount of approximately $178.0 million (2011: $182.1 million) of which its
repayment is subordinated to that of the external borrowings taken by certain joint ventures.
8 Joint ventures (cont’d)
the group
note 2012
$‘000 2011
$‘000
(b) Amounts due from/(to) joint ventures: current accounts (unsecured) – interest free (trade) 18,639 13,693 – interest free (non-trade) 96,859 145,814 – interest bearing (non-trade) 9,451 –
124,949 159,507 Less: Allowance for doubtful receivables (9,268) (9,606)
12 115,681 149,901
current accounts (unsecured) – interest free (mainly non-trade) (27,181) (31,139) – interest bearing (non-trade) (31,615) –
16 (58,796) (31,139)
(c) details of the joint ventures are set out in note 39.
(d) Movements in allowance for doubtful receivables in respect of the above loans and current accounts were as follows:
the group
2012 $‘000
2011 $‘000
At 1 January (22,731) (24,749) Allowance during the year (1,710) (990) reversal of allowance during the year 1,663 1,622 Allowance utilised – 395 translation differences 1,053 991 At 31 december (21,725) (22,731)
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8 Joint ventures (cont’d) (e) the Group’s share of the joint ventures’ assets, liabilities and results is as follows:
the group
2012 $‘000
2011 $‘000
balance sheet investment properties 3,313,799 2,107,386 other non-current assets 318,691 56,964
3,632,490 2,164,350
current assets 1,407,584 1,120,963 Less: current liabilities (462,441) (310,452) Net current assets 945,143 810,511
4,577,633 2,974,861 Less: Non-current liabilities (2,686,547) (1,797,894)
1,891,086 1,176,967
income statement revenue 569,864 599,222 expenses (437,683) (468,261) Fair value gains on investment properties 31,149 109,893 profit before taxation 163,330 240,854 taxation (27,746) (15,402) profit after taxation 135,584 225,452
(f) the Group’s share of the capital commitments of the joint ventures is $858.5 million (2011: $333.2 million).
(g) the Group’s share of the contingent liabilities of the joint ventures is $9.0 million (2011: $0.1 million).
9 DeFerreD taxation the movements in the deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction)
were as follows:
at 1/1/2012
recognised in profit
or loss
acquisition/ Disposal of
subsidiaries translation differences
at 31/12/2012
the group $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities Accelerated tax depreciation 14,420 2,438 (2,547) (357) 13,954 discounts on compound financial instruments 44,367 (10,809) – – 33,558 Accrued income and interest receivable 15,038 2,905 – (35) 17,908 capital allowances of assets in investment properties 2,148 27 – – 2,175 profits recognised on percentage of completion and fair value adjustments on initial recognition of development properties for sale 461,680 (6,072) – (17,788) 437,820 Fair value adjustments arising from a business combination – – 19,313 (338) 18,975 Fair value changes of investment properties 140,213 34,822 (8,416) (7,311) 159,308 Unremitted earnings/deferred income 41,266 6,218 – (819) 46,665 others 9,495 18,406 (205) (496) 27,200 total 728,627 47,935 8,145 (27,144) 757,563
Deferred tax assets Unutilised tax losses (61,689) (4,833) – 1,260 (65,262) provisions and expenses (58,598) 2,19 0 – 703 (55,705) deferred income (22,809) 1,908 – 394 (20,507) Fair value adjustments on initial recognition of development properties for sale (24,218) – – 1,133 (23,085) others (29,346) 3,525 – 211 (25,610) total (196,660) 2,790 – 3,701 (190,169)
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9 DeFerreD taxation (cont’d)
at 1/1/2011
recognised in profit
or loss recognised
in equity Disposal of
subsidiaries translation differences
at 31/12/2011
the group $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities Accelerated tax depreciation 12,736 1,093 – – 591 14,420 discounts on compound financial instruments 55,176 (10,809) – – – 44,367 Accrued income and interest receivable 13,661 1,359 – – 18 15,038 capital allowances of assets in investment properties 10,075 (7,927) – – – 2,148 profits recognised on percentage of completion and fair value adjustments on initial recognition of development properties for sale 430,675 22,243 – (1,925) 10,687 461,680 Fair value changes of investment properties 95,692 46,449 – (7,539) 5,611 140,213 Unremitted earnings/deferred income 26,309 14,409 – – 548 41,266 derivative financial instruments 589 (606) – – 17 – others 22,766 (9,846) (1,482) (2,104) 161 9,495 total 667,679 56,365 (1,482) (11,568) 17,633 728,627
Deferred tax assets Unutilised tax losses (78,427) 17,372 – – (634) (61,689) provisions and expenses (57,385) (367) – – (846) (58,598) deferred income (17,741) (4,645) – – (423) (22,809) Fair value adjustments on initial recognition of development properties for sale (23,592) – – – (626) (24,218) others (8,148) (21,406) – – 208 (29,346)
(185,293) (9,046) – – (2,321) (196,660)
at 1/1/2011
recognised in profit
or loss at
1/1/2012
recognised in profit
or loss at
31/12/2012
the company $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities discounts on compound financial instruments 55,176 (10,809) 44,367 (10,809) 33,558
Deferred tax assets provisions (3,135) 251 (2,884) 295 (2,589)
9 DeFerreD taxation (cont’d) deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred taxes relate to the same taxation authority. the following amounts, determined after appropriate offsetting, are shown on the balance sheets:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
deferred tax liabilities 658,989 627,638 33,558 44,367 deferred tax assets (91,595) (95,671) (2,589) (2,884)
567,394 531,967 30,969 41,483
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. the Group has not recognised deferred tax assets in respect of the following:
2012 $’000
2011 $’000
deductible temporary differences 96,849 77,759 tax losses 449,746 421,764 Unutilised capital allowances 3,921 5,686
550,516 505,209
deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the subsidiaries of the Group can utilise the benefits. the tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries operate. the deductible temporary differences do not expire under current tax legislation.
10 other non-current/current assets
the group
note 2012
$‘000 2011
$‘000
(a) other non-current assets Available-for-sale equity securities – at cost 13,963 24,620 – at fair value 270,768 324,723 derivative assets 27,722 31,720 Amounts due from: – an associate and joint ventures (interest free) 36,848 8,481 – a joint venture (interest bearing) (i) 135,000 135,000 interest receivables (ii) 61,029 50,500 other receivables (iii) 157,208 169,283 prepayments and deposits (iv) 93,175 51,628
795,713 795,955
(i) Amount due from the joint venture is unsecured and bears an effective interest rate of 3.25% per annum.
(ii) interest receivables include (i) $48.4 million (2011: $39.6 million) in respect of a loan to an associate which bears an interest rate of 2.28% (2011: 2.54%) per annum and is due on 31 December 2014; and (ii) $12.6 million (2011: $10.9 million) in respect of a loan to a joint venture which bears an interest rate of 1.06% (2011: 1.45%) per annum and is due after the temporary occupation permit for the development property is obtained, which is expected to be in or after december 2013.
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10 other non-current/current assets (cont’d) (a) other non-current assets (cont’d) (iii) other receivables as at 31 december 2012 include: – $70.4 million (2011: $34.4 million) from a third party which bears an effective interest rate of 13.0%
(2011: 13.0%) per annum, is trade in nature, secured and repayable in January 2014 and
– non-current consideration receivable of $63.3 million (2011: $76.9 million) relating to the sale of a joint venture in 2011. the total consideration is receivable in four unequal annual installments commencing 2012. the consideration receivable within 12 months as at 31 december 2012, amounted to $13.9 million (2011: $14.5 million) and is included in current other receivables.
As at 31 december 2011, other receivables included an amount of $31.9 million due from a third party which bore an effective interest rate of 8.3% per annum, secured and repayable in June 2013. the amount has been fully repaid in 2012.
(iv) the amount as at 31 december 2012 relates to deposits paid for land purchases and facility fees. the amount as at 31 december 2011 relates to progress payments for a property under development and facility fees.
(b) other current assets
the group
2012 $‘000
2011 $‘000
Available-for-sale money market investment, at fair value 195,000 195,000 derivative assets 6,370 –
201,370 195,000 11 DeveLoPMent ProPerties For saLe anD stocKs
the group
2012 $‘000
2011 $‘000
(a) properties under development, sold units for which revenue is recognised using percentage of completion method cost incurred and attributable profits 3,586,513 3,416,824 Allowance for foreseeable losses (17,190) (17,190)
3,569,323 3,399,634 progress billings (965,158) (1,190,853)
2,604,165 2,208,781 other properties under development cost incurred 4,787,520 4,466,427 Allowance for foreseeable losses (79,932) (30,503)
4,707,588 4,435,924 7,311,753 6,644,705
(b) completed development properties, at cost 198,088 259,948
(c) consumable stocks 252 471
total development properties for sale and stocks 7,510,093 6,905,124
11 DeveLoPMent ProPerties For saLe anD stocKs (cont’d) (d) the Group adopts the percentage of completion method of revenue recognition for residential projects under
progressive payment scheme in singapore. the stage of completion is measured in accordance with the accounting policy stated in note 2(n). significant assumptions are required in determining the stage of completion, the total estimated development costs and the estimated total revenue. in making the assumptions, the Group evaluates them by relying on past experience and the work of specialists.
the Group makes allowance for foreseeable losses taking into account the Group’s recent experience in estimating net realisable values of completed units and properties under development by reference to comparable properties, timing of sale launches, location of property, expected net selling prices and development expenditure. Market conditions may, however, change which may affect the future selling prices on the remaining unsold residential units of the development properties and accordingly, the carrying value of development properties for sale may have to be written down in future periods.
(e) As at 31 december 2012, development properties for sale amounting to approximately $2,611.2 million (2011: $2,037.7 million) were mortgaged to banks to secure credit facilities of the Group (note 18).
(f) during the financial year, the following amounts were capitalised as cost of development properties for sale:
the group
note 2012
$‘000 2011
$‘000
staff costs 26(b) 66,729 61,404 interest costs paid/payable 26(d) 105,950 100,725 Less: interest income received/receivable from project fixed deposit accounts 26(a) (164) (474)
172,515 161,655
(g) Movements in allowance for foreseeable losses in respect of development properties for sale were as follows:
the group
2012 $‘000
2011 $‘000
At 1 January (47,693) (47,693) Allowance during the year (49,429) – At 31 december (97,122) (47,693)
(h) As at 31 december 2012, properties amounting to approximately $57.5 million (2011: $77.8 million) were acquired through unconditional contracts with various land vendors. the related amount due to land vendors is secured over the title of the properties being purchased (notes 16 and 20).
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12 traDe anD other receivabLes
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
Accrued receivables (a) 48,199 2,959 – – trade receivables 13 269,311 386,773 5 227 deposits and other receivables 14 209,459 696,564 428 438 Amounts due from: – subsidiaries 17 – – 2,446,359 2,588,058 – associates 7(b) 605,621 409,127 – – – joint ventures 8(b) 115,681 149,901 – – – investees: – interest free 1,560 1,645 – – – interest bearing 23,405 53,914 – – – non-controlling interest (unsecured and interest free) 1,065 640 – – Loans and receivables 32(e) 1,274,301 1,701,523 2,446,792 2,588,723 prepayments 210,452 67,851 429 1,579
1,484,753 1,769,374 2,447,221 2,590,302
(a) Accrued receivables relate to the remaining sales consideration not yet billed on completed development properties for sale.
(b) As at 31 december 2012, certain trade and other receivables amounting to approximately $15.9 million (2011: $77.6 million) were mortgaged to banks to secure credit facilities of the Group (note 18).
13 traDe receivabLes
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
trade receivables 287,846 397,450 5 227 Less: Allowance for doubtful receivables (18,535) (10,677) – –
12 269,311 386,773 5 227
13 traDe receivabLes (cont’d) (a) the maximum exposure to credit risk for trade receivables at the reporting date (by strategic business units) was:
the group
2012 $‘000
2011 $‘000
capitaLand residential singapore 45,007 83,176 capitaLand china Holdings 1,855 3,285 capitaLand commercial 1,367 14,493 Ascott 32,606 35,890 capitavalue Homes 8,185 12,134 capitaLand Financial 33,436 39,425 capitaMalls Asia 52,976 131,387 Australand 93,133 63,689 others 746 3,294
269,311 386,773 the credit quality of trade and other receivables is assessed based on credit policies established by the risk
committee. the Group monitors customer credit risk by grouping trade and other receivables based on their characteristics. trade and other receivables with high credit risk will be identified and monitored by the respective strategic business units.
(b) the ageing of trade receivables at the reporting date was:
gross amount
allowance for doubtful receivables
gross amount
allowance for doubtful receivables
the group 2012
$’000 2012
$’000 2011
$’000 2011
$’000
Not past due 229,678 – 337,057 – past due 1 – 30 days 7,026 (37) 11,985 (130) past due 31 – 90 days 4,130 (185) 16,213 (108) More than 90 days 47,012 (18,313) 32,195 (10,439)
287,846 (18,535) 397,450 (10,677) (c) the movements in allowance for doubtful receivables in respect of trade receivables were as follows:
the group
2012 $‘000
2011 $‘000
At 1 January (10,677) (14,515) Allowance utilised 653 726 (Allowance)/reversal of allowance during the year (8,798) 2,856 translation differences 287 256 At 31 december (18,535) (10,677)
Based on historical default rates, the Group believes that no allowance for doubtful debts is necessary in respect of the receivables not past due.
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14 DePosits anD other receivabLes
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
deposits 70,564 586,728 326 306 other receivables 155,457 127,111 102 132 Less: Allowance for doubtful receivables (19,121) (19,771) – –
136,336 107,340 102 132 tax recoverable 2,559 2,496 – –
12 209,459 696,564 428 438 other receivables include staff loans, interest receivables, deferred sales consideration and other recoverables.
the movements in allowance for doubtful receivables in respect of other receivables were as follows:
the group
2012 $‘000
2011 $‘000
At 1 January (19,771) (17,823) Allowance utilised 381 22 Allowance during the year (305) (2,484) disposal of a subsidiary – 82 translation differences 574 432 At 31 december (19,121) (19,771)
other than disclosed above, the Group believes that no additional allowance for doubtful debts is required in respect
of the other receivables. 15 cash anD cash equivaLents
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
Fixed deposits 3,428,890 3,458,118 438,826 319,194 cash at banks and in hand 2,068,803 2,806,355 3,824 7,345 cash and cash equivalents 5,497,693 6,264,473 442,650 326,539 restricted bank deposits (a) (4,110 ) (9,506) cash and cash equivalents in the statement of cash flows 5,493,583 6,254,967
(a) these are bank balances of certain subsidiaries pledged in relation to bankers’ guarantees issued to the subsidiaries’ contractors.
(b) As at 31 december 2012, the Group’s cash and cash equivalents of $100.7 million (2011: $102.6 million) were held
under project accounts and withdrawals from which are restricted to payments for expenditure incurred on projects. (c) the Group’s cash and cash equivalents are held mainly in singapore dollars, Us dollars, Australian dollars, chinese
renminbi, Japanese Yen and Malaysian ringgit. As at 31 december 2012, the effective interest rates for cash and cash equivalents ranged from 0% to 14.0% (2011: 0% to 14.0%) per annum.
the cash and cash equivalents are placed with banks and financial institutions which meet the appropriate credit
criteria and are of high credit standing.
16 traDe anD other PaYabLes
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
trade payables 112,670 115,382 1,126 84 Accruals (a) 484,918 587,685 43,601 44,106 Accrued development expenditure 277,694 278,770 – – Accrued capital expenditure (b) 42,703 42,563 – – other payables (c) 325,164 317,426 969 975 rental and other deposits 38,106 33,291 3 3 derivative liabilities 49,255 58,175 – – provisions 20(a) 24,736 18,596 – – Liability for employee benefits 21 50,762 38,644 25,550 20,221 Amounts due to: – subsidiaries 17 – – 5,445 5,445 – associates 7(b) 335,442 269,905 – – – joint ventures 8(b) 58,796 31,139 – – Non-controlling interests (unsecured): – interest free 88,217 55,142 – – – interest bearing 773 105,000 – – progress billings 470,362 318,770 – –
2,359,598 2,270,488 76,694 70,834 (a) Accruals included accrued interest payable, accrued expenditure for property, plant and equipment purchases and
accrued administrative expenses.
(b) Accrued capital expenditure relates to amounts due from a subsidiary of the Group to land vendors under certain unconditional contracts entered into to purchase properties for future developments. the total acquisition cost of the properties has been included in development properties for sale and the amount payable is secured over the relevant development properties.
(c) other payables included retention sums and amounts payable in connection with capital expenditure incurred.
17 aMounts Due FroM/(to) subsiDiaries
the company
note 2012
$‘000 2011
$‘000
current Amounts due from subsidiaries: – current accounts, mainly non-trade and interest bearing 23,895 24,977 – current loan – interest free 361,733 367,573 – interest bearing 2,090,106 2,226,133
2,451,839 2,593,706 Less: Allowance for doubtful receivables (29,375) (30,625)
2,422,464 2,563,081 12 2,446,359 2,588,058
Amounts due to subsidiaries: – current loan and interest free (5,445) (5,445)
16 (5,445) (5,445)
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17 aMounts Due FroM/(to) subsiDiaries (cont’d) (a) Movements in allowance for doubtful receivables were as follows:
the company
2012 $‘000
2011 $‘000
At 1 January (30,625) (55,949) Allowance during the year – (2,575) reversal of allowance during the year 1,250 3,109 Allowance utilised upon disposal – 24,790 At 31 december (29,375) (30,625)
(b) All balances with subsidiaries are unsecured, repayable on demand and bear effective interest rates ranging from 0.02% to 1.00% (2011: 0.03% to 1.00%) per annum.
18 banK borrowings
the group
2012 $‘000
2011 $‘000
Bank borrowings – secured 2,742,639 2,341,774 – unsecured 4,640,291 4,190,027
7,382,930 6,531,801 Finance lease (secured) 10 –
7,382,940 6,531,801 repayable: Not later than 1 year 765,826 426,011 Between 1 and 2 years 1,282,785 1,145,806 Between 2 and 5 years 4,970,952 4,863,061 After 5 years 363,377 96,923 After 1 year 6,617,114 6,105,790
7,382,940 6,531,801
(a) the Group’s borrowings are denominated mainly in singapore dollars, Australian dollars, Japanese Yen and chinese renminbi. As at 31 december 2012, the effective interest rates for bank borrowings ranged from 0.66% to 17.00% (2011: 0.73% to 12.00%) per annum.
(b) Bank borrowings are secured by the following assets, details of which are disclosed in the respective notes to the financial statements:
(i) mortgages on the borrowing subsidiaries’ property, plant and equipment, investment properties and development properties for sale and shares of certain subsidiaries of the Group; and
(ii) assignment of all rights, titles and benefits with respect to the properties mortgaged.
19 Debt securities debt securities comprise fixed rate notes, floating rate notes and bonds issued by the company and subsidiaries in
the Group.
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
convertible bonds 3,523,659 3,448,046 3,512,287 3,432,956 Notes and bonds 3,273,179 2,210,792 – –
6,796,838 5,658,838 3,512,287 3,432,956
secured notes and bonds 121,195 140,409 – – Unsecured notes and bonds 6,675,643 5,518,429 3,512,287 3,432,956
6,796,838 5,658,838 3,512,287 3,432,956
repayable: Not later than 1 year 16,346 434,228 – – Between 1 and 2 years 334,580 – – – Between 2 and 5 years 2,126,648 1,989,426 1,487,025 1,443,181 After 5 years 4,319,264 3,235,184 2,025,262 1,989,775 After 1 year 6,780,492 5,224,610 3,512,287 3,432,956
6,796,838 5,658,838 3,512,287 3,432,956
(a) the repayment schedule for convertible bonds was based on the final maturity dates.
(b) As at 31 december 2012, the effective interest rates for debt securities ranged from 0.66% to 8.78% (2011: 1.00% to 5.81%) per annum.
(c) details of the outstanding convertible bonds as at 31 december 2012 are as follows:
(i) $424.7 million principal amount of convertible bonds due on 15 November 2016 with interest rate at 2.10% per annum. these bonds are convertible into new ordinary shares at the conversion price of $6.01 per share on or after 26 december 2006 and may be redeemed at the option of the company or at the option of the bond holders on specified dates.
(ii) $1.0 billion principal amount of convertible bonds due on 20 June 2022 with interest rate at 2.95% per annum. these bonds are convertible into new ordinary shares at the conversion price of $11.5218 per share on or after 20 June 2008 and may be redeemed at the option of the company or at the option of the bond holders on specified dates.
(iii) $1.05 billion principal amount of convertible bonds due on 5 March 2018 with interest rate at 3.125% per annum. these bonds are convertible into new ordinary shares at the conversion price of $7.1468 per share on or after 15 April 2008 and may be redeemed at the option of the company or at the option of the bond holders on specified dates. the redemption price upon maturity is 109.998% of the principal amount.
(iv) $1.2 billion principal amount of convertible bonds due on 3 september 2016 with interest rate at 2.875% per annum. these bonds are convertible into new ordinary shares at the conversion price of $4.6908 per share on or after 14 october 2009 and may be redeemed at the option of the company or at the option of the bond holders on specified dates.
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195
19 Debt securities (cont’d) (d) secured debt securities As at 31 december 2012, the secured notes and bonds were fully secured by mortgages on the investment
properties of the Group amounting to $363.6 million (2011: $372.8 million). details on assets pledged are disclosed in the respective notes to the financial statements.
(e) unsecured debt securities the holders of certain debt securities have the option to have all or any of their notes purchased by the Group
at their principal amounts on interest payment dates. Unless previously redeemed or purchased and cancelled, the debt securities are redeemable at the principal amounts on their respective maturity dates.
20 other non-current LiabiLities
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
Amounts due to non-controlling interests (unsecured): – interest free 75,219 61,549 – – – interest bearing 248,974 142,269 – – Amounts due to an associate (unsecured and interest bearing) 112,373 129,349 – – Liability for employee benefits 21 30,286 36,066 17,628 27,815 derivative liabilities 137,832 77,347 – – provisions (a) – 39,615 – – customer deposits and other non-current payables (b) 107,984 63,535 – – deferred income 303 400 – –
712,971 550,130 17,628 27,815
(a) the provisions relate to the Group’s exposure to unavoidable costs of meeting its obligation under contractual agreements. Movements in the provisions were as follows:
the group
note 2012
$‘000 2011
$‘000
At 1 January 58,211 182,499 reversal of provision during the year 26(a) (16,000) (2,700) provision utilised (13,603) (2,950) set off against available-for-sale equity security (i) (3,872) (124,165) translation differences – 5,527 At 31 december 24,736 58,211
current 16 24,736 18,596 Non-current – 39,615
24,736 58,211 (i) during the year, provision amounting to $3.9 million (2011: $124.2 million) was set off against the carrying
amount of an unquoted available-for-sale equity investment (note 10(a)).
(b) the other non-current payables include an amount of approximately $14.8 million (2011: $35.2 million), due to land vendors on terms similar to those described in note 16(b).
21 eMPLoYee beneFits
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
Liability for short term accumulating compensated absences 14,476 13,542 1,338 910 Liability for long service leave entitlement 7,585 6,334 – – Liability for staff incentive 53,612 49,011 41,363 46,614 Liability for cash-settled share-based payments 5,375 5,823 477 512
81,048 74,710 43,178 48,036 current 16 50,762 38,644 25,550 20,221 Non-current 20 30,286 36,066 17,628 27,815
81,048 74,710 43,178 48,036 (a) Long service leave entitlement this liability relates principally to provision made by a foreign subsidiary in relation to employees’ leave entitlement
granted after certain qualifying periods based on duration of employees’ services rendered.
(b) staff incentive this relates to staff incentive which is based on the achievement of the Group’s financial performance and payable
over a period of time.
(c) equity compensation benefits Share Plans of the Company A new capitaLand performance share plan 2010 and capitaLand restricted share plan 2010 were approved by
the members of the company at the extraordinary General Meeting held on 16 April 2010. these plans replaced the capitaLand performance share plan 2000 and capitaLand restricted stock plan 2000 which were terminated. the company did not extend the duration of, or replace, the existing capitaLand share option plan. All awards granted under the previous share plans prior to its termination will continue to be valid and be subject to the terms and conditions of the plans. the first grant of award under the new share plans was made in March 2011. the duration of each share plan is 10 years commencing on 16 April 2010.
the details of options and awards in the company since commencement of the share plans were as follows:
<------------------- aggregate option/shares ------------------->
granted exercised/
released Lapsed/
cancelled balance as of
31 December 2012
no. of options/shares
no. of options/shares
no. of options/shares
no. of options/shares
capitaLand share option plan 159,442,307 (115,614,712) (35,721,020) 8,106,575 capitaLand performance share plan 2000 34,594,651 (17,393,355) (14,423,280) 2,778,016 capitaLand restricted stock plan 2000 33,689,553 (25,283,686) (6,555,745) 1,850,122 total 227,726,511 (158,291,753) (56,700,045) 12,734,713
capitaLand performance share plan 2010 6,812,300 – (391,374) 6,420,926 capitaLand restricted share plan 2010 14,160,540 (1,783,947) (1,913,095) 10,463,498 total 20,972,840 (1,783,947) (2,304,469) 16,884,424
during the year, the aggregate number of new shares issued and/or to be issued pursuant to the 2010 share plans
did not exceed 8% of the total number of shares (excluding treasury shares) in the capital of the company.
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21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) CapitaLand Share Option Plan the company ceased to grant options under the capitaLand share option plan with effect from 2007. statutory
information regarding the capitaLand share option plan is set out below:
(i) the exercise price of the options is set either at: – A price equal to the volume-weighted average price on the sGX-st over the three consecutive trading days
immediately preceding the grant of the option (“Market price”), or such higher price as may be determined by the ERCC in its absolute discretion; or
– A discount not exceeding 20% of the Market price in respect of that option.
(ii) the options vest between one year and four years from the grant date.
(iii) the options granted expire after five or 10 years from the dates of the grant.
Movements in the number of outstanding options and their related weighted average exercise prices were as follows:
weighted average exercise price no. of options
weighted average exercise price no. of options
2012 $
2012 (‘000)
2011 $
2011 (‘000)
At 1 January 2.72 9,000 2.71 10,400 exercised 1.20 (837) 2.50 (1,120) Lapsed/cancelled 3.08 (56) 3.02 (280) At 31 december 2.87 8,107 2.72 9,000
exercisable on 31 december 2.87 8,107 2.72 9,000
options exercised in 2012 resulted in 836,913 (2011: 1,120,367) shares being issued at a weighted average market price of $3.18 (2011: $3.34) each. options were exercised on a regular basis throughout the year. the weighted average share price during the year was $2.95 (2011: $2.94).
the fair value of services received in return for options granted is measured by reference to the fair value of options granted. the fair value of the options granted is measured based on enhanced trinomial (Hull and White) valuation model.
options outstanding at the end of the year are summarised below:
options outstanding
2012
weighted average
contractual life
options outstanding
2011
weighted average
contractual life
range of exercise Price (‘000) (years) (‘000) (years)
$0.30 to $0.44 72 0.22 227 1.18 $0.45 to $0.50 368 1.16 615 2.00 $0.51 to $1.43 15 1.65 39 2.66 $1.44 to $2.16 1,310 2.18 1,632 3.18 $2.17 to $4.10 6,342 3.21 6,487 4.21
8,107 9,000
21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) CapitaLand Performance Share Plan this relates to compensation costs of the company’s performance share plan reflecting the benefits accruing to
the employees over the service period to which the performance criteria relate.
Movements in the number of shares outstanding under the capitaLand performance share were summarised below:
2012 (‘000)
2011 (‘000)
At 1 January 9,269 9,219 Granted 3,488 3,324 Lapsed/cancelled (3,558) (3,274) At 31 december 9,199 9,269
the final number of shares to be released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. conversely, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
the fair values of the shares are determined using Monte carlo simulation method at the measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion theory. the fair value and assumptions are set out below:
Year of award 2012 2011
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $3.79 $2.52 expected volatility based on 36 months closing share price prior to grant date 32.40% 34.61% Msci Asia pacific ex-Japan real estate index annualised volatility based on 36 months prior to grant date 27.72% 28.76% share price at grant date $3.11 $3.33 risk-free interest rate equal to the implied yield on zero-coupon singapore Government bond with a term equal to the length of vesting period 0.30% 0.44% expected dividend yield over 12 months volume-weighted average share price prior to the grant date 2.24% 1.67% correlation of return between Msci Asia pacific ex-Japan real estate index and the company’s share price measured over 36 months prior to the grant date 78.30% 71.47%
CapitaLand Restricted Stock/Share Plan – Equity-settled/Cash-settled this relates to compensation costs of the company’s restricted stock/share plan reflecting the benefits accruing
to the employees over the service period to which the performance criteria relate. the company granted awards of shares under the capitaLand restricted stock/share plan in place of options with effect from 2007.
the ercc of the company has instituted a set of share ownership guidelines for senior management who receives shares under the capitaLand restricted stock/share plan. Under these guidelines, members of the senior management team are required to retain a portion of the total number of capitaLand shares acquired through the capitaLand restricted stock/share plan which will vary according to their job grades and base salaries.
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21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) CapitaLand Restricted Stock/Share Plan – Equity-settled/Cash-settled (cont’d) Movements in the number of shares outstanding under the capitaLand restricted stock/share plan were
summarised below:
2012 (‘000)
2011 (‘000)
At 1 January 13,063 13,491 Granted 7,635 7,422 released@ (6,659) (6,749) Lapsed/cancelled (1,725) (1,101) At 31 december 12,314 13,063
@ The number of shares released during the year was 6,658,736 (2011: 6,748,830), of which 846,520 (2011: 922,162) were
cash-settled.
As at 31 december 2012, the number of shares comprised in awards granted under the capitaLand restricted stock/share plan is as follows:
2012 2011
equity- settled
cash- settled total
equity- settled
cash- settled total
(‘000) (‘000) (‘000) (‘000) (‘000) (‘000)
Final number of shares has not been determined (baseline award)# 6,820 259 7,079 5,506 744 6,250 Final number of shares determined but not released 4,648 587 5,235 5,939 874 6,813
11,468 846 12,314 11,445 1,618 13,063
# The final number of shares released could range from 0% to 150% of the baseline award.
the final number of shares to be released will depend on the achievement of pre-determined targets at the end
of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. the shares have a vesting schedule of two to three years. recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
the awards granted to non-executive directors prior to 2010 have a vesting period of two years. in 2010, the awards granted are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
cash-settled awards of shares are measured at their current fair values at each balance sheet date.
21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) CapitaLand Restricted Stock/Share Plan – Equity-settled/Cash-settled (cont’d) the fair values of the shares granted to employees are determined using Monte carlo simulation method at
the measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion theory. the fair value and assumptions are set out below:
Year of award 2012 2011
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $3.00 $3.05 expected volatility based on 36 months closing share price prior to grant date 32.40% 34.61% share price at grant date $3.11 $3.14 risk-free interest rate equal to the implied yield on zero-coupon singapore Government bond with a term equal to the length of vesting period
0.15% to 0.30%
0.32% to 0.45%
expected dividend yield over 12 months volume-weighted average share price prior to the grant date 2.24% 1.66%
the fair value of the shares awarded to non-executive directors in 2012 was $2.68 which represents the volume- weighted average price of a capitaLand share on the sGX-st over the 14 trading days immediately following the date of capitaLand’s Annual General Meeting.
From 2012, cash-settled award plan for non-managerial grade employees in singapore, Malaysia and Japan has been replaced by a restricted cash plan (“rcp”). Under rcp, a cash bonus is distributed to eligible employee at the end of each financial year based on the Group’s financial performance and achievement of performance targets, as well as individual performance.
Share Plans of Subsidiaries (a) capitaMalls asia Limited (“cMa”) the cMA performance share plan and the cMA restricted stock plan (collectively referred to as the “cMA
share plans”) were approved and adopted by the shareholders of cMA at an extraordinary General Meeting held on 30 october 2009.
CMA Performance Share Plan this relates to compensation costs of the cMA’s performance share plan reflecting the benefits accruing to
the employees of cMA over the service period to which the performance criteria relate.
Movements in the number of shares outstanding under the cMA performance share plan were summarised below:
2012 (‘000)
2011 (‘000)
At 1 January 2,158 872 Granted 1,769 1,326 Lapsed/cancelled (280) (40) At 31 december 3,647 2,158
the final number of shares to be released will depend on the achievement of pre-determined targets over a
three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. conversely, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
200
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21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) Share Plans of Subsidiaries (cont’d) (a) capitaMalls asia Limited (“cMa”) (cont’d) CMA Performance Share Plan (cont’d) the fair values of the shares are determined using Monte carlo simulation method at the measurement date
which projects future share price assuming log normal distribution based on Geometric Brownian Motion theory. the fair value and assumptions are set out below:
Year of award 2012 2011
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $2.06 $1.19 expected volatility based on average of peers’ 36 months closing share price prior to grant date 32.42% 25.70% Msci Asia pacific ex-Japan real estate index annualised volatility based on 36 months prior to grant date 27.70% 26.92% share price at grant date $1.65 $1.77 risk-free interest rate equal to the implied yield on zero-coupon singapore Government bond with a term equal to the length of vesting period 0.30% 0.44% expected dividend yield over 12 months volume-weighted average share price prior to the grant date 2.27% 1.15% correlation of return between Msci Asia pacific ex-Japan real estate index and cMA’s share price measured over 36 months prior to the grant date 69.97% 69.36%
CMA Restricted Stock Plan – Equity-settled/Cash-settled this relates to compensation costs of the cMA’s restricted stock plan reflecting the benefits accruing to the
employees of cMA over the service period to which the performance criteria relate.
Movements in the number of shares outstanding under the cMA restricted stock plan were summarised below:
2012 (‘000)
2011 (‘000)
At 1 January 7,987 4,117 Granted 7,384 6,036 released@ (3,419) (1,520) Lapsed/cancelled (1,018) (646) At 31 december 10,934 7,987
@ The number of shares released during the year was 3,418,735 (2011: 1,520,317), of which 995,898 (2011: 438,490) were cash-settled.
21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) Share Plans of Subsidiaries (cont’d) (a) capitaMalls asia Limited (“cMa”) (cont’d) CMA Restricted Stock Plan – Equity-settled/Cash-settled (cont’d) As at 31 december 2012, the number of shares comprised in awards granted under the cMA restricted stock
plan is as follows:
2012 2011
equity- settled
cash- settled total
equity- settled
cash- settled total
(‘000) (‘000) (‘000) (‘000) (‘000) (‘000)
Final number of shares has not been determined (baseline award)# 4,932 993 5,925 3,672 1,536 5,208 Final number of shares determined but not released 3,527 1,482 5,009 1,988 791 2,779
8,459 2,475 10,934 5,660 2,327 7,987 # The final number of shares released could range from 0% to 150% of the baseline award.
the final number of shares to be released will depend on the achievement of pre-determined targets at the end of a one-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. conversely, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. the shares have a vesting schedule of two to three years. recipient can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost. the 2010 award to non-executive directors was time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, no share awards were granted under the cMA restricted stock plan to the non-executive directors.
cash-settled awards of shares are measured at their current fair values at each balance sheet date.
the fair values of the shares are determined using Monte carlo simulation method at the measurement date which projects future share price assuming log normal distribution based on Geometric Brownian Motion theory. the fair value and assumptions are set out below:
Year of award 2012 2011
Weighted average fair value of shares and assumptions Weighted average fair value at measurement date $1.58 to
$1.92 $1.69
expected volatility based on average of peers’ 36 months closing share price prior to grant date 32.42% 25.70% share price at grant date $1.65 $1.72 risk-free interest rate equal to the implied yield on zero-coupon singapore Government bond with a term equal to the length of vesting period
0.15% to 0.30%
0.32% to 0.45%
expected dividend yield over 12 months volume-weighted average share price prior to the grant date 2.27% 1.14%
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21 eMPLoYee beneFits (cont’d) (c) equity compensation benefits (cont’d) Share Plans of Subsidiaries (cont’d) (b) australand Australand Performance Rights Plan the establishment of the Australand performance rights plan was approved by Australand’s shareholders at
the 2007 Annual General Meeting (“AGM”).
Movements in the number of shares outstanding under the Australand performance rights plan as at the end of the year were summarised below:
2012 (‘000)
2011 (‘000)
At 1 January 4,994 3,913 Granted 2,061 1,840 exercised (258) – Lapsed/Forfeited (473) (759) At 31 december 6,324 4,994
the fair value at grant date is independently determined using the Monte carlo simulation technique. this technique involves stock prices being randomly simulated under risk neutral conditions and parameters in order to calculate the value of the performance rights at expiry. the simulation is repeated numerous times to produce distribution payoff amounts. the performance rights value is taken as the average of the payoff amounts calculated and discounted back to the valuation date. the fair value and assumptions are set out below:
Year of award 2012 2011
Fair value of performance rights and assumptions Weighted average value at measurement date A$1.78 A$2.48 share price at grant date A$2.49 A$2.87 expected price volatility of Australand’s stapled securities 32.0% 35.0% expected dividend yield 8.0% 8.0% risk-free discount rate 2.5% 4.7% expected franking rate 0% 0% Australand and index correlation 50.0% 50.0%
Australand Tax-Exempt Employee Security Plan the Australand tax-exempt employee security plan in which tax-exempt stapled securities may be issued by the
company to employees for no cash consideration was approved by Australand’s shareholders at the 2007 AGM. All Australian resident permanent (full-time and part-time) employees (excluding directors and participants in the Australand performance rights plan) who have been continuously employed by Australand for a period of at least nine months as at the invitation date and are still employees as at the acquisition date (the date Australand acquires the securities) are eligible to participate in the plan. employees may elect not to participate in the plan.
the plan provides up to A$1,000 of Australand stapled securities (tax-free) to eligible employees annually for no cash consideration.
A three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves Australand. Under the plan, employees will receive the same benefits as all other security holders.
the number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which Australand’s stapled securities are traded on the Australian stock exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
No securities were issued under the Australand tax-exempt employee security plan during the year. in 2011, 108,016 securities were issued at the weighted average market price of A$2.90 per security.
22 share caPitaL
the company
issued and fully paid, with no par value
2012 no. of shares
(’000)
2011 no. of shares
(’000)
At 1 January 4,269,439 4,262,492 issue of shares pursuant to the: – exercise of options 837 1,120 – restricted stock plans 63 5,827 – payment of directors’ fees 152 – At 31 december, including treasury shares 4,270,491 4,269,439 Less: treasury shares (19,612) (25,209) At 31 december, excluding treasury shares 4,250,879 4,244,230
(a) the holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from time
to time and are entitled to one vote per share at meetings of the company. All shares (excluding treasury shares) rank equally with regards to the company’s residual assets.
(b) At 31 december 2012, there were 8,106,575 (2011: 9,000,244) options under the capitaLand share option plan, a maximum of 17,548,384 (2011: 18,538,108) shares under the capitaLand performance share plan and 14,878,434 (2011: 14,197,716) shares under the capitaLand restricted stock/share plan, details of which are disclosed in note 21(c).
(c) As at 31 december 2012, the convertible bonds issued by the company which remained outstanding were as follows:
Principal amount Final Maturity Date conversion Price convertible into
$ million Year $
424.75 2016 6.01 70,673,876 new ordinary shares 1,000.00 2022 11.5218 86,791,994 new ordinary shares 1,050.00 2018 7.1468 146,918,900 new ordinary shares 1,200.00 2016 4.6908 255,819,903 new ordinary shares
there has been no redemption or conversion by the bondholders of any of the above convertible bonds in 2012 and 2011.
(d) Movements in the company’s treasury shares were as follows:
the company
2012 no. of shares
(’000)
2011 no. of shares
(’000)
At 1 January 25,209 – purchase of treasury shares – 25,209 treasury shares transferred pursuant to employee share plans (5,597) – At 31 december 19,612 25,209
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22 share caPitaL (cont’d) capital Management the Group’s policy is to build a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. the Group monitors the return on capital, which the Group defines as total shareholders’ equity, excluding non-controlling interests, and the level of dividends to ordinary shareholders.
the Group also monitors capital using a net debt equity ratio, which is defined as net borrowings divided by total equity (including non-controlling interests).
the group
2012 $’000
2011 $’000
Bank borrowings and debt securities 14,179,778 12,190,639 cash and cash equivalents (5,497,693) (6,264,473) Net debt 8,682,085 5,926,166
total equity 19,443,784 19,239,471
Net debt equity ratio 0.45 0.31 the Group seeks to strike a balance between the higher returns that might be possible with higher level of borrowings
and the liquidity and security afforded by a sound capital position.
in addition, the company has a share purchase mandate as approved by its shareholders which allows the company greater flexibility over its share capital structure with a view to improving, inter alia, its return on equity. the shares which are purchased are held as treasury shares which the company may transfer for the purposes of or pursuant to its employee share-based incentive schemes so as to enable the company to take advantage of tax deductions under the current taxation regime. the use of treasury shares in lieu of issuing new shares would also mitigate the dilution impact on existing shareholders.
Five of the Group’s subsidiaries (2011: six) are required to maintain certain minimum base capital and financial resources, or shareholders’ funds as they are holders of capital Markets services licenses registered with the Monetary Authority of singapore or the securities commission Malaysia to conduct the regulated activity of real estate investment trust management. these subsidiaries have complied with the applicable capital requirements throughout the year.
there were no changes in the Group’s approach to capital management during the year.
23 other reserves
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
reserve for own shares (49,366) (63,456) (49,366) (63,456) capital reserve 463,217 445,666 383,490 383,490 equity compensation reserve 114,948 109,815 46,701 39,980 Hedging reserve (91,171) (45,531) – – Available-for-sale reserve 5,469 5,723 – – Foreign currency translation reserve (573,145) (177,150) – –
(130,048) 275,067 380,825 360,014
reserve for own shares comprises the purchase consideration for issued shares of the company acquired and held in treasury.
the capital reserve comprises mainly the value of the options granted to bondholders to convert their convertible bonds into ordinary shares of the company and share of associates’ and joint ventures’ capital reserve.
the equity compensation reserve comprises the cumulative value of employee services received for the issue of the options and shares under the share plans of the company and its subsidiaries (note 21(c)).
the hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments related to hedged transactions that have not yet affected profit or loss.
the available-for-sale reserve comprises the cumulative net change in the fair value of available-for-sale investment until the investment is derecognised.
the foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign entities, as well as from the translation of foreign currency loans used to hedge or form part of the Group’s net investments in foreign entities.
24 other coMPrehensive incoMe
2012 2011
before tax
tax expense
net of tax
before tax
tax expense
net of tax
the group $’000 $’000 $’000 $’000 $’000 $’000
exchange differences arising from translation of foreign operations and foreign currency loans, forming part of net investment in foreign operations (470,356) – (470,356) 138,012 – 138,012 recognition of exchange differences to profit or loss 26,990 – 26,990 7,877 – 7,877 change in fair value of available-for-sale investments 1,248 – 1,248 (2,987) – (2,987) recognition of fair value gain in available-for-sale reserve to profit or loss (1,502) – (1,502) (42,343) 1,482 (40,861) effective portion of change in fair value of cash flow hedges (63,600) – (63,600) (75,048) – (75,048) share of other comprehensive income of associates and joint ventures (84,312) – (84,312) 87,637 – 87,637 recognition of share of other comprehensive income of associates and joint ventures to profit or loss – – – 14,175 – 14,175
(591,532) – (591,532) 127,323 1,482 128,805
206
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25 revenue revenue of the Group and of the company is analysed as follows:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
trading of properties 2,026,282 1,860,909 – – rental and related income 455,791 397,273 – – Fee income 517,193 454,669 71,471 66,107 serviced residence rental and related income 282,013 293,236 – – dividend income from subsidiaries – – 373,356 433,435 others 20,084 13,482 – –
3,301,363 3,019,569 444,827 499,542 26 ProFit beFore taxation profit before taxation includes the following:
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
(a) other operating income interest income from: – fixed deposits 38,860 35,491 776 127 – subsidiaries – – 40,366 88,773 – associates and joint ventures 44,211 31,389 – – – investee companies and others 10,857 14,551 – – – interest capitalised in development properties for sale 11(f) (164) (474) – –
93,764 80,957 41,142 88,900 dividend income 606 1,428 – – Net fair value gains from investment properties 5 155,092 285,032 – – Gain on disposal/redemption of available-for-sale financial assets 1,514 21,390 – – Gain from change of ownership interest in subsidiaries, associates and joint ventures 174,482 218,258 – 57,963 Foreign exchange gain – – – 7 Gain on disposal of investment properties – 19,411 – – Gain on disposal of property, plant and equipment 41,836 969 23 72 Gain from bargain purchase arising from acquisition of subsidiaries 30(b) 4,488 26 – – reversal of provision for foreseeable losses 20(a) 16,000 2,700 – – reversal of impairment of intangibles 4 73 – – – reversal of impairment of subsidiaries 6(a)(iii) – – 2,601 – receipt of settlement of insurance claim 14,035 – – – others 85,059 83,533 18,341 13,683
586,949 713,704 62,107 160,625
26 ProFit beFore taxation (cont’d)
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
(b) staff costs Wages and salaries 484,763 437,041 40,947 39,433 contributions to defined contribution plans 49,991 46,262 2,564 2,398 share-based expenses – equity-settled 41,844 31,766 9,485 6,932 – cash-settled 4,808 2,577 427 166 increase in liability for short term accumulating compensated absences 1,168 1,350 427 188 staff benefits, training/ development costs and others 77,957 73,253 4,453 3,835
660,531 592,249 58,303 52,952 Less: staff costs capitalised in development properties for sale 11(f) (66,729) (61,404) – –
593,802 530,845 58,303 52,952 recognised in: cost of sales (c)(i) 250,320 233,479 – – Administrative expenses (c)(ii) 343,482 297,366 58,303 52,952
593,802 530,845 58,303 52,952
(c)(i) cost of sales include: staff costs (b) 250,320 233,479 – – provision for foreseeable losses/ Write down on development properties for sale 49,429 39,155 – – operating lease expenses 81,470 88,191 – – operating expenses arising from investment properties that generated rental income 110,125 94,962 – – depreciation of property, plant and equipment 3 28 19 – – Amortisation of intangible assets – 242 – –
208
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26 ProFit beFore taxation (cont’d)
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
(c)(ii) administrative expenses include: staff costs (b) 343,482 297,366 58,303 52,952 Allowance/(reversal of allowance) for doubtful receivables 12,699 (3,021) – – Amortisation of intangible assets 1,329 1,359 – – Auditors’ remuneration: – auditors of the company 2,515 1,961 167 208 – other auditors 3,872 4,043 – – Non-audit fees: – auditors of the company 197 1,097 10 2 – other auditors 385 282 – – depreciation of property, plant and equipment 3 45,083 38,989 5,617 3,598 operating lease expenses 34,906 36,672 4,663 4,732
(c)(iii) other operating expenses include: Allowance for doubtful receivables 10,235 3,427 33,147 130,248 impairment of available-for-sale financial assets 6,242 1,329 – – Foreign exchange loss 8,654 33,240 63 – impairment and write off of property, plant and equipment 8,768 729 80 5 impairment of: – subsidiaries – – 17,195 16,931 – associate 7(a)(i) 4,612 3,437 – – – joint ventures 8(a)(i) 422 – – –
26 ProFit beFore taxation (cont’d)
the group the company
note 2012
$’000 2011
$’000 2012
$’000 2011
$’000
(d) Finance costs interest costs paid and payable: – on bank loans and overdrafts 281,732 240,385 – – – on debt securities 113,195 82,803 – – – to non-controlling interests 6,211 5,423 – – convertible bonds: – interest expense 105,991 105,673 105,991 105,673 – amortisation of bond discount 63,584 63,584 63,584 63,584 – accretion of bond premium 10,517 10,479 10,517 10,479 derivative financial instruments 21,555 29,957 – – others 55,663 61,769 5,238 1,311 total borrowing costs 658,448 600,073 185,330 181,047 Less: Borrowing costs capitalised in: – property, plant and equipment 3(d) (965) (3,093) – – – investment properties 5(d) (52,580) (23,470) – – – development properties for sale 11(f) (105,950) (100,725) – –
(159,495) (127,288) – – 498,953 472,785 185,330 181,047
27 taxation
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
current tax expense – Based on current year’s results 203,283 167,520 – – – over provision in respect of prior years (37,415) (19,252) – – – Group relief (14,686) (4,703) (1,908) (778)
151,182 143,565 (1,908) (778) Deferred tax expense – origination and reversal of temporary differences 47,922 47,652 (10,514)
(10,558)
– Under/(over) provision in respect of prior years 2,803 (333) – –
50,725 47,319 (10,514) (10,558) total 201,907 190,884 (12,422) (11,336)
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27 taxation (cont’d) reconciliation of effective tax rate
the group
2012 $’000
2011 $’000
profit before taxation 1,518,478 1,613,804 Less: share of results of associates and joint ventures (834,781) (876,646) profit before share of results of associates, joint ventures and taxation 683,697 737,158
income tax using singapore tax rate of 17% (2011: 17%) 116,228 125,317 Adjustments: expenses not deductible for tax purposes 145,534 110,295 income not subject to tax (121,045) (133,473) effect of unrecognised tax losses and other deductible temporary differences 15,908 7,531 effect of different tax rates in foreign jurisdictions 55,167 57,520 effect of taxable distributions from associates 30,008 34,881 over provision in respect of prior years (34,612) (19,585) Group relief (14,686) (4,703) Withholding taxes 13,846 11,083 others (4,441) 2,018
201,907 190,884
the company
2012 $’000
2011 $’000
profit before taxation 156,347 239,885
income tax using singapore tax rate of 17% (2011: 17%) 26,579 40,780 Adjustments: expenses not deductible for tax purposes 27,462 33,051 income not subject to tax (61,861) (83,550) effect of other deductible temporary differences (1,633) (1,373) Group relief (1,908) (778) others (1,061) 534
(12,422) (11,336)
28 earnings Per share (a) basic earnings per share
the group
2012 $’000
2011 $’000
Basic earnings per share is based on: Net profit attributable to owners of the company 930,347 1,057,311
2012 2011
number of shares (‘000)
Weighted average number of ordinary shares in issue during the year 4,249,408 4,261,359
28 earnings Per share (cont’d) (b) Diluted earnings per share in calculating diluted earnings per share, the net profit attributable to owners of the company and weighted
average number of ordinary shares in issue during the year are adjusted for the effects of all dilutive potential ordinary shares:
the group
2012 $’000
2011 $’000
Net profit attributable to owners of the company 930,347 1,057,311 profit impact of conversion of the potential dilutive shares – 78,097 Adjusted net profit attributable to owners of the company 930,347 1,135,408
2012 2011
number of shares (‘000)
Weighted average number of ordinary shares used in the calculation of basic earnings per share 4,249,408 4,261,359
Adjustments for potential dilutive shares under: – capitaLand share option plan 916 1,408 – capitaLand performance share plan 17,548 18,538 – capitaLand restricted stock/share plan 14,879 14,198 – convertible bonds – 324,596
33,343 358,740 Weighted average number of ordinary shares used in the calculation of diluted earnings per share 4,282,751 4,620,099
29 DiviDenDs the Board of directors of the company has proposed a tax-exempt ordinary dividend of 7.0 cents per share in respect
of the financial year ended 31 december 2012. this would amount to a payout of approximately $297.6 million based on the number of issued shares (excluding 19,611,437 treasury shares) as at 31 december 2012. the tax-exempt dividends are subject to shareholders’ approval at the forthcoming Annual General Meeting of the company.
For the financial year ended 31 december 2011, a tax-exempt ordinary dividend of 6.0 cents per share and a tax-exempt special dividend of 2.0 cents per share were approved at the Annual General Meeting held on 30 April 2012. the said dividends of $340.0 million were paid in May 2012.
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30 notes to the consoLiDateD stateMent oF cash FLows (a) acquisition of subsidiaries the list of significant subsidiaries acquired during the year is as follows:
name of subsidiary Date acquired effective interest acquired
capitaretail LpM investments pte Ltd# February 2012 48% capitaretail iH investments pte Ltd# February 2012 48% capitaretail cK investments pte Ltd# February 2012 48% caike property (shanghai) co., Ltd^ March 2012 50% AcrJ3 pte Ltd May 2012 70% the cavendish Hotel (London) Limited october 2012 100%
# These were previously associates of the Group.
^ This was previously a joint venture of the Group.
the list of significant subsidiaries acquired in 2011 is as follows:
name of subsidiary Date acquired effective interest acquired
Abbey road Limited February 2011 45% sNc costes K June 2011 100%
(b) effects of acquisitions the cash flows and net assets of subsidiaries acquired are provided below:
recognised values
the group note 2012
$‘000 2011
$‘000
property, plant and equipment 3 318,372 218,835 investment properties 5 544,416 428,255 other non-current assets – 835 development properties for sale – 10,682 cash and cash equivalents 70,952 84,381 other current assets 5,900 10,792 current liabilities (265,065) (23,615) Long-term bank borrowings (72,201) – shareholder’s loan (43,766) (33,666) deferred tax liabilities (33,485) – other non-current liabilities (24,442) (789) Non-controlling interests (1,711) (146,805)
498,970 548,905 Amounts previously accounted for as associates, joint ventures and other financial assets, at fair value (59,903) (33,582) Net assets acquired 439,067 515,323 Goodwill arising from acquisition 4 16,919 – Gain from bargain purchase 26(a) (4,488) (26) Assumption of shareholder’s loan 43,766 33,666 total purchase consideration 495,264 548,963 Less: deferred payment and other adjustments 2,070 (16,623) deposits paid in prior year – (28,941) cash of subsidiaries acquired (70,952) (84,381) cash outflow on acquisition of subsidiaries 426,382 419,018
30 notes to the consoLiDateD stateMent oF cash FLows (cont’d) (c) Disposal of subsidiaries the list of significant subsidiaries disposed during the year is as follows:
name of subsidiary Date Disposed effective interest Disposed
Franco investment Limited March 2012 100% Growing state Holdings Limited# June 2012 65% capitaretail china developments d18 (HK) Limited# June 2012 65% Hong Kong Yong Zheng Group company Limited^ september 2012 100% citadines Ashley tst (Hong Kong) Limited october 2012 100%
# These subsidiaries were sold to CapitaMalls China Development Fund III in which the Group has an effective interest of 32.7% as at 31 December 2012.
^ This subsidiary was sold to Ascott Residence Trust in which the Group has an effective interest of 49.4% as at 31 December 2012.
the disposed subsidiaries previously contributed net profit of $5.8 million from 1 January 2012 to the dates of disposal.
the list of significant subsidiaries disposed in 2011 is as follows:
name of subsidiary Date Disposed effective interest Disposed
Br properties pte Ltd May 2011 100% Hemliner pte Ltd* July 2011 100% shanghai capitaLand Xin chuang real estate development co., Ltd. december 2011 100%
* This subsidiary was sold to Ascott Serviced Residence (China) Fund in which the Group has an effective interest of 36.1% as at 31 December 2011.
the disposed subsidiaries previously contributed net profit of $6.5 million from 1 January 2011 to the dates of disposal.
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30 notes to the consoLiDateD stateMent oF cash FLows (cont’d) (d) effects of disposals the cash flows and net assets of subsidiaries disposed are provided below:
the group
the group note 2012
$‘000 2011
$‘000
property, plant and equipment 137,728 232,446 investment properties 5 249,579 239,052 other non-current assets 88,537 – development properties for sale 23,387 71,683 other current assets 44,156 56,157 current liabilities (186,602) (151,009) Long-term bank borrowings (46,987) (109,591) deferred tax liabilities (25,340) (11,568) Non-controlling interests – (2,800) Net assets 284,458 324,370 Less: equity interests retained as associates (191,518) – Net assets disposed 92,940 324,370 realisation of reserves 6,842 4,864 deferred income 7,451 20,410 Gain on disposal of subsidiaries 151,301 195,433 sale consideration 258,534 545,077 repayment of bank and shareholders’ loan 147,491 234,748 deposit received in prior year in relation to current year’s disposal of a subsidiary (48,976) – deferred sale consideration received in relation to prior year’s disposal of subsidiaries – 417,476 cash of subsidiaries disposed (34,048) (54,926) cash inflow on disposal of subsidiaries 323,001 1,142,375
31 business coMbinations acquisition of the cavendish hotel (London) Limited on 1 october 2012, the Group acquired 100% equity interest in the cavendish Hotel (London) Limited (“cavendish”).
cavendish owns a property known and operated as the cavendish London (the “Hotel”) since 1966.
the acquisition is part of the Group’s ongoing strategy to deepen its presence and enhance its real estate portfolio in key growth cities in Asia and europe.
cavendish contributed revenue of $8.1 million and net profit of $2.5 million to the Group’s results for the period from 1 october 2012 to 31 december 2012.
if the acquisition had occurred on 1 January 2012, management estimates that the contribution from cavendish in terms of revenue and net profit would have been $32.2 million and $10.2 million respectively. in determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2012.
Purchase Consideration the consideration for the acquisition was $320.9 million, which included the assignment of shareholder’s loan due
from cavendish to its previous shareholder, and was settled in cash. No contingent consideration or indemnification asset was recognised at the acquisition date. Both the Group and the acquired entities do not have a relationship before this acquisition. therefore, there was no settlement of pre-existing relationship.
Goodwill of $16.9 million was recognised as a result of the difference between consideration transferred and the fair value of the identifiable net assets.
Effects of cash flows of the Group
2012 $’000
cash consideration paid 277,168 Assumption of shareholder’s loan 43,766 purchase consideration 320,934 Less: cash and cash equivalents in subsidiary acquired (5,455) Net cash outflow on acquisition 315,479
Identifiable assets acquired and liabilities assumed
2012 $’000
property, plant and equipment 318,298 cash and cash equivalents 5,455 other current assets 3,201 Non-current liabilities (19,313) current liabilities (47,392) total identifiable net assets 260,249 Goodwill on acquisition 16,919 Assumption of shareholder’s loan 43,766 purchase consideration 320,934
Acquisition-related costs Acquisition-related costs of $1.2 million related to stamp duties, legal, tax and due diligence fees were included in
administrative and other operating expenses in the consolidated income statement.
there was no significant business combination undertaken by the Group in 2011.
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32 FinanciaL risK ManageMent (a) Financial risk management objectives and policies the Group and the company are exposed to market risk (including interest rate, foreign currency and price risks),
credit risk and liquidity risk arising from its diversified business. the Group’s risk management approach seeks to minimise the potential material adverse effects from these exposures. the Group uses financial instruments such as currency forwards, interest rate swaps and caps as well as foreign currency borrowings to hedge certain financial risk exposures.
the Board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. the Board has established the risk committee to strengthen its risk management processes and framework. the risk committee is assisted by an independent unit called the risk Assessment Group (“rAG”). rAG generates a comprehensive portfolio risk report to assist the committee. this quarterly report measures a spectrum of risks, including property market risks, construction risks, interest rate risks, refinancing risks and currency risks.
(b) Market risk Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity
prices will have on the Group’s income or the value of its holdings of financial instruments. the objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
(i) Interest rate risk the Group’s exposure to market risk for changes in interest rate environment relates mainly to its investment
in financial products and debt obligations.
the investments in financial products are short term in nature and they are not held for trading or speculative purposes. the financial products comprise fixed deposits or short term commercial papers which yield better returns than cash at bank.
the Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings.
the Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. this strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve certain level of protection against rate hikes. the Group also uses hedging instruments such as interest rate swaps and caps to minimise its exposure to interest rate volatility. the Group classifies these interest rate swaps and caps as cash flow hedges. in addition, the Group also uses other derivative instruments such as callable swaps to manage the cost of funding.
the fair value loss of interest rate swaps and caps as at 31 december 2012 was $183.0 million (2011: $111.7 million), comprising derivative liabilities of $183.0 million (2011: $111.9 million) and derivative assets of nil (2011: $0.2 million).
Sensitivity analysis For interest rate derivative instruments used for hedging and other variable rate financial liabilities, it is
estimated that an increase of 100 basis point in interest rate at the reporting date would lead to a reduction in the Group’s profit before tax (and revenue reserves) by approximately $33.0 million (2011: $37.8 million). A decrease in 100 basis point in interest rate would have an equal but opposite effect. this analysis assumes that all other variables, in particular foreign currency rates, remain constant, and has not taken into account the effects of qualifying borrowing costs allowed for capitalisation, the associated tax effects and share of non-controlling interests.
32 FinanciaL risK ManageMent (cont’d) (b) Market risk (cont’d) (ii) Foreign currency risk the Group operates internationally and is exposed to various currencies, mainly Australian dollars, chinese
renminbi, euros, Hong Kong dollars, Japanese Yen, sterling pounds and Us dollars.
the Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which its property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.
the Group uses forward exchange contracts to hedge its foreign currency risk, where feasible. it generally enters into forward exchange contracts with maturities ranging between 3 months and 1 year which are rolled over at market rates at maturity. the Group also enters into cross currency swaps to hedge the foreign exchange risk of its loans denominated in foreign currency.
the net fair value gain of the forward exchange and cross currency swaps contracts as at 31 december 2012 was $30.0 million (2011: $7.9 million), comprising derivative assets of $34.0 million (2011: $31.5 million) and derivative liabilities $4.0 million (2011: $23.6 million).
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.
in relation to its investments in foreign subsidiaries whose net assets are exposed to currency translation risks and which are held for long term investment purposes, the differences arising from such translation are recorded under the foreign currency translation reserve. these translation differences are reviewed and monitored on a regular basis.
the Group’s and the company’s exposure to foreign currencies as at 31 december 2012 and 31 december 2011 were as follows:
us Dollars
australian Dollars
chinese renminbi
hong Kong Dollars
Japanese Yen euro
Malaysian ringgit others#
total Foreign
currencies
the group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2012 other financial assets 4,336 – – 3,338 267,252 33 – – 274,959 trade and other receivables 141,518 326,328 202,244 18,930 52,552 33,195 4,404 140,191 919,362 cash and cash equivalents 135,664 140,876 968,073 7,794 264,323 18,990 47,736 34,882 1,618,338 Borrowings (903,690) (2,587,113) (499,379) (223,860) (1,132,141) (61,801) (86,323) (123,499) (5,617,806) trade and other payables (203,715) (287,927) (580,726) (15,435) (75,557) (47,623) (25,186) (62,415) (1,298,584) Gross currency exposure (825,887) (2,407,836) 90,212 (209,233) (623,571) (57,206) (59,369) (10,841) (4,103,731) Add/Less: Net financial (assets)/liabilities denominated in the respective entities’ functional currencies (71,097) 2,458,904 11,096 186,728 649,492 55,514 109,375 7,577 3,407,589 cross currency swaps/ foreign exchange forward contracts 728,517 – – – (23,405) – – – 705,112 Less: Available-for-sale financial assets (4,336) – – (3,338) (2,087) – – – (9,761) Net currency exposure (172,803) 51,068 101,308 (25,843) 429 (1,692) 50,006 (3,264) (791)
# Others include mainly Sterling Pound, Thai Baht, Indian Rupee and Vietnamese Dong.
218
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219
32 FinAnciAl Risk MAnAgeMent (cont’d) (b) Market risk (cont’d) (ii) Foreign currency risk (cont’d)
Us Dollars
Australian Dollars
chinese Renminbi
Hong kong Dollars
Japanese Yen euro
Malaysian Ringgit Others#
total Foreign
currencies
the group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2011 other financial assets 4,344 – – 3,205 321,331 – – – 328,880 trade and other receivables 97,627 272,728 217,583 42,344 67,502 36,514 7,998 159,057 901,353 cash and cash equivalents 273,863 144,473 1,232,612 8,186 18,917 15,150 62,307 43,442 1,798,950 Borrowings (453,519) (2,643,580) (387,139) (212,635) (562,176) (67,721) (88,556) (118,478) (4,533,804) trade and other payables (202,556) (300,086) (574,765) (17,160) (16,897) (44,242) (27,104) (54,431) (1,237,241) Gross currency exposure (280,241) (2,526,465) 488,291 (176,060) (171,323) (60,299) (45,355) 29,590 (2,741,862) add/less: net financial liabilities/(assets) denominated in the respective entities’ functional currencies 44,034 2,564,899 (289,809) 146,913 43,124 61,723 84,518 (34,463) 2,620,939 cross currency swaps/ foreign exchange forward contracts 174,306 (5,463) – – (53,914) – – – 114,929 less: available-for-sale financial assets (4,344) – – (3,205) (2,465) – – – (10,014) net currency exposure (66,245) 32,971 198,482 (32,352) (184,578) 1,424 39,163 (4,873) (16,008)
# Others include mainly Sterling Pound, Thai Baht, Indian Rupee and Vietnamese Dong.
Us Dollars total Foreign
currencies
the company $’000 $’000
2012 cash and cash equivalents 130 130 trade and other receivables 4 4 currency exposure 134 134
2011 cash and cash equivalents 55 55 trade and other receivables 4 4 currency exposure 59 59
Sensitivity analysis it is estimated that a five percentage point strengthening in foreign currencies against the singapore Dollar
would not have any significant exposure to the Group’s profit before tax (2011: the Group’s profit before tax decreased by $0.8 million) and increase the Group’s other components of equity by approximately $0.5 million (2011: $0.5 million). a five percentage point weakening in foreign currencies against the singapore Dollar would have an equal but opposite effect. the Group’s outstanding forward exchange contracts and cross currency swaps have been included in this calculation. the analysis assumed that all other variables, in particular interest rates, remain constant and does not take into account the translation related risk, associated tax effects and share of non-controlling interests.
there was no significant exposure to foreign currencies for the company as at 31 December 2012 and 31 December 2011.
32 FinAnciAl Risk MAnAgeMent (cont’d) (b) Market risk (cont’d) (iii) Equity price risk the Group has available-for-sale investments in equity securities and is exposed to price risk. the securities
are listed in Japan.
Sensitivity analysis if prices for equity securities listed in Japan change by 5% with all other variables including tax rate being held
constant, the impact on available-for-sale reserve will be as follows:
2012 2011
the group 5% increase
$’000 5% decrease
$’000 5% increase
$’000 5% decrease
$’000
available-for-sale reserve 104 (104) 123 (123)
(c) credit risk credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. For trade receivables, the Group has guidelines governing the process of granting credit as a service or product provider in its respective segments of business. trade and other receivables relate mainly to the Group’s customers who bought its residential units and tenants from its commercial buildings, shopping malls and serviced residences. investments and financial transactions are restricted to counterparties that meet the appropriate credit criteria and are of high credit standing.
the principal risk to which the Group and the company is exposed in respect of financial guarantee contracts is credit risk in connection with the guarantee contracts it has issued. to mitigate the risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of. Guarantees are only given for its subsidiaries and related parties. the maximum exposure to credit risk in respect of these financial guarantees at the balance sheet date is disclosed in note 34.
the Group has a diversified portfolio of businesses and as at balance sheet date, there were no significant concentration of credit risk with any entity. the maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet, including derivative financial instruments as well as any irrevocable loan undertaking to associates and joint ventures.
(d) liquidity risk liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. the Group
actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. as part of its overall prudent liquidity management, the Group maintains sufficient level of cash or cash convertible investments to meet its working capital requirement. in addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. as far as possible, the Group will constantly raise committed funding from both capital markets and financial institutions and prudently balance its portfolio with some short term funding so as to achieve overall cost effectiveness.
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32 FinanciaL risK ManageMent (cont’d) (d) Liquidity risk (cont’d) the following are the expected contractual undiscounted cash flows of financial liabilities, including interest
payments and excluding the impact of netting agreements:
<-------------------------- contractual cash flows ------------------------->
carrying amount total
not later than 1 year
between 1 and 5 years
after 5 years
the group $’000 $’000 $’000 $’000 $’000
2012 Financial liabilities, at amortised cost Bank borrowings 7,382,940 7,963,958 958,430 6,625,330 380,198 debt securities 6,796,838 8,530,756 184,909 3,411,084 4,934,763 trade and other payables# 2,273,336 2,276,522 1,778,959 426,836 70,727
16,453,114 18,771,236 2,922,298 10,463,250 5,385,688 derivative financial liabilities, at fair value 187,087 45,276 25,794 23,788 (4,306)
16,640,201 18,816,512 2,948,092 10,487,038 5,381,382
2011 Financial liabilities, at amortised cost Bank borrowings 6,531,801 7,649,276 665,250 6,866,220 117,806 debt securities 5,658,838 7,104,747 570,780 2,821,646 3,712,321 trade and other payables# 2,258,817 2,301,579 1,837,547 411,153 52,879
14,449,456 17,055,602 3,073,577 10,099,019 3,883,006 derivative financial liabilities, at fair value 135,522 60,265 40,151 20,153 (39)
14,584,978 17,115,867 3,113,728 10,119,172 3,882,967
<-------------------------- contractual cash flows ------------------------->
carrying amount total
not later than 1 year
between 1 and 5 years
after 5 years
the company $’000 $’000 $’000 $’000 $’000
2012 Financial liabilities, at amortised cost debt securities 3,512,287 4,390,211 81,576 2,004,459 2,304,176 trade and other payables# 51,144 51,144 51,144 – –
3,563,431 4,441,355 132,720 2,004,459 2,304,176
2011 Financial liabilities, at amortised cost debt securities 3,432,956 4,496,201 81,834 2,047,879 2,366,488 trade and other payables# 50,613 50,613 50,613 – –
3,483,569 4,546,814 132,447 2,047,879 2,366,488
# Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
32 FinanciaL risK ManageMent (cont’d) (d) Liquidity risk (cont’d) the following table indicates the periods in which the cash flows associated with derivatives that are cash flow
hedges are expected to occur and affect the income statement:
<-------------------------- contractual cash flows ------------------------->
carrying amount total
not later than 1 year
between 1 and 5 years
after 5 years
the group $’000 $’000 $’000 $’000 $’000
2012 interest rate swaps – (liabilities)/assets (130,802) (54,591) (26,109) (28,547) 65 Forward start interest rate swaps – (liabilities)/assets (6,499) (1,686) – (1,694) 8 Forward exchange contracts – assets 1,760 1,760 1,760 – – cross currency interest rate swaps – (liabilities)/assets (4,050) 14,339 1,154 6,452 6,733
(139,591) (40,178) (23,195) (23,789) 6,806
2011 interest rate swaps – (liabilities)/assets (69,243) (31,499) (15,320) (16,753) 574 Forward start interest rate swaps – liabilities (9,772) (3,453) (813) (2,105) (535) Forward exchange contracts – liabilities (5,242) (5,242) (5,242) – –
(84,257) (40,194) (21,375) (18,858) 39 (e) Fair values the following methods and assumptions are used to estimate the fair values of the following significant classes
of financial instruments:
(i) Derivatives the fair value of derivative financial instruments is based on their market prices or brokers’ quotes.
(ii) Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted using the market rate of interest at the reporting date. in respect of the liability component of convertible bonds, the fair value at initial recognition is determined using a market interest rate of similar liabilities that do not have a conversion option.
(iii) Other financial assets and liabilities the fair value of quoted securities is their quoted bid price at the balance sheet date. the carrying amounts
of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values.
Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market-related rate for a similar instrument at the balance sheet.
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32 FinanciaL risK ManageMent (cont’d) (e) Fair values (cont’d) (iv) Fair value hierarchy the table below analyses financial instruments carried at fair value, by valuation method as at 31 december
2012. the different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 total
the group $’000 $’000 $’000 $’000
2012 Available-for-sale financial assets 2,087 195,000 268,681 465,768 derivative financial assets – 34,092 – 34,092
2,087 229,092 268,681 499,860 derivative financial liabilities – (187,087) – (187,087)
2,087 42,005 268,681 312,773
2011 Available-for-sale financial assets 2,465 195,000 322,258 519,723 derivative financial assets – 31,720 – 31,720
2,465 226,720 322,258 551,443 derivative financial liabilities – (135,522) – (135,522)
2,465 91,198 322,258 415,921 For the fair value measurements in Level 3, changing one or more of the assumptions to other reasonably
possible alternative assumptions would not have a significant effect on the Group’s financial statements. the movements of financial assets classified under Level 3 are presented as follows:
the group
the group note 2012
$‘000 2011
$‘000
Balance as at 1 January 322,258 141,144 Additions 22,673 298,088 capital distribution (39,088) – impairments recognised in income statement (1,430) (1,329) Amount set off against provisions 20(a)(i) (3,872) (124,165) Fair value gain recognised in available-for-sale financial assets 123 97 disposal – (24,012) translations differences (31,983) 32,435 Balance as at 31 december 268,681 322,258
32 FinanciaL risK ManageMent (cont’d) (e) Fair values (cont’d) (v) Accounting classifications and fair values the fair values of financial assets and liabilities, together with the carrying amounts shown in the balance
sheets, are as follows:
Fair value – hedging
instruments Loans and
receivables available-
for-sale
other financial liabilities within
the scope of Frs 39
total carrying amount
Fair value
the group note $’000 $’000 $’000 $’000 $’000 $’000
2012 trade and other receivables 12 – 1,274,301 – – 1,274,301 1,274,301 cash and cash equivalents 15 – 5,497,693 – – 5,497,693 5,497,693 other non-current assets 27,722 390,085 284,731 – 702,538 702,538 other current assets 10(b) 6,370 – 195,000 – 201,370 201,370
34,092 7,162,079 479,731 – 7,675,902 7,675,902
trade and other payables# – – – 2,273,336 2,273,336 2,273,336 Bank borrowings 18 – – – 7,382,940 7,382,940 7,387,743 debt securities 19 – – – 6,796,838 6,796,838 7,220,308 derivative financial liabilities 187,087 – – – 187,087 187,087
187,087 – – 16,453,114 16,640,201 17,068,474
2011 trade and other receivables 12 – 1,701,523 – – 1,701,523 1,701,523 cash and cash equivalents 15 – 6,264,473 – – 6,264,473 6,264,473 other non-current assets 31,720 363,264 349,343 – 744,327 744,327 other current assets 10(b) – – 195,000 – 195,000 195,000
31,720 8,329,260 544,343 – 8,905,323 8,905,323
trade and other payables# – – – 2,258,817 2,258,817 2,258,817 Bank borrowings 18 – – – 6,531,801 6,531,801 6,531,801 debt securities 19 – – – 5,658,838 5,658,838 5,608,008 derivative financial liabilities 135,522 – – – 135,522 135,522
135,522 – – 14,449,456 14,584,978 14,534,148
# Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
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32 FinanciaL risK ManageMent (cont’d) (e) Fair values (cont’d) (v) Accounting classifications and fair values (cont’d)
Loans and receivables
other financial liabilities within
the scope of Frs 39 total
carrying amount Fair value
the company note $’000 $’000 $’000 $’000
2012 trade and other receivables 12 2,446,792 – 2,446,792 2,446,792 cash and cash equivalents 15 442,650 – 442,650 442,650
2,889,442 – 2,889,442 2,889,442
trade and other payables# – 51,144 51,144 51,144 debt securities 19 – 3,512,287 3,512,287 3,830,561
– 3,563,431 3,563,431 3,881,705
2011 trade and other receivables 12 2,588,723 – 2,588,723 2,588,723 cash and cash equivalents 15 326,539 – 326,539 326,539
2,915,262 – 2,915,262 2,915,262
trade and other payables# – 50,613 50,613 50,613 debt securities 19 – 3,432,956 3,432,956 3,498,891
– 3,483,569 3,483,569 3,549,504
# Excludes quasi-equity loans, progress billings, liability for employee benefits and provisions.
33 coMMitMents As at the balance sheet date, the Group and the company had the following commitments: (a) operating lease the Group leases a number of offices, motor vehicles, office equipments and serviced apartments under operating
leases. the leases have tenure ranging from one to twenty years, with an option to renew the lease after that date. Lease payments are usually revised at each renewal date to reflect the market rate. Future minimum lease payments for the Group and the company on non-cancellable operating leases are as follows:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
Lease payments payable: Not later than 1 year 110,688 114,475 4,359 3,151 Between 1 and 5 years 268,985 280,770 34,275 1,353 After 5 years 70,220 94,490 88,463 33
449,893 489,735 127,097 4,537
33 coMMitMents (cont’d) (b) commitments
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
commitments in respect of: – capital expenditure contracted but not provided for in the financial statements 7,106 10,132 944 768 – development expenditure contracted but not provided for in the financial statements 1,357,956 1,774,778 – – – capital contribution/acquisition of associates, joint ventures and investee companies 1,207,755 1,094,668 – – – purchase of lands/properties contracted but not provided for in the financial statements 796,344 1,148,353 – – – shareholders’ loan committed to associates, joint ventures and investee companies 281,302 1,096,462 – –
3,650,463 5,124,393 944 768 (c) As at the balance sheet date, the notional principal values of financial instruments were as follows:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
interest rate swaps 4,321,425 2,822,340 – – Forward start interest rate swaps 255,318 260,142 – – Forward foreign exchange contracts 739,386 686,536 – – cross currency swaps 695,816 211,538 – –
6,011,945 3,980,556 – – (d) the maturity profile of these financial instruments were:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
Not later than 1 year 1,824,487 1,648,968 – – Between 1 and 5 years 2,878,879 1,690,815 – – After 5 years 1,308,579 640,773 – –
6,011,945 3,980,556 – –
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34 FinanciaL guarantee contracts the Group accounts for its financial guarantees as insurance contracts. there are no terms and conditions attached
to the financial guarantee contracts that would have a material effect on the amount, timing and uncertainty of the Group’s and the company’s future cash flows. At balance sheet date, the Group and the company do not consider that it is probable that a claim will be made against the Group and the company under the financial guarantee contracts. Accordingly the Group and the company do not expect any net cash outflows resulting from the financial guarantee contracts. the Group and the company issue guarantees only for their subsidiaries and related parties.
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
(a) Guarantees given to banks to secure banking facilities provided to: – subsidiaries – – 2,525,499 2,644,542 – associates 34,764 51,313 – – – joint ventures 9,414 10,552 – –
44,178 61,865 2,525,499 2,644,542
(b) Undertakings by the Group and the company:
(i) A subsidiary of the Group has provided several undertakings on cost overrun, security margin, interest shortfall and an indemnity for bankers’ guarantee issuance on a several basis as well as a project completion undertaking on a joint and several basis, in respect of term loan and revolving construction facilities amounting to $1,486.1 million (2011: $1,486.1 million) and bankers’ guarantee facility amounting to $133.9 million (2011: $133.9 million) granted to an associate. As at 31 december 2012, the total amount outstanding under the facilities was $1,325.3 million (2011: $1,286.1 million).
(ii) A subsidiary of the Group has provided several undertakings on cost overrun, security margin and interest shortfall on a several basis as well as a project completion undertaking on a joint and several basis, in respect of a term loan facility amounting to $56.5 million (2011: $105.0 million) and bankers’ guarantee facility amounting to $42.0 million (2011: $42.0 million) granted to a joint venture. As at 31 december 2012, the amount outstanding under the facilities was $56.5 million (2011: $105.0 million).
(iii) A subsidiary of the Group has provided several undertakings on cost overrun, interest shortfall, security margin and project completion on a joint and several basis, in respect of a $890.0 million (2011: $890.0 million) term loan facility granted to a joint venture. As at 31 december 2012, the amount outstanding under the term loan facility was $470.0 million (2011: $440.0 million).
(iv) A subsidiary of the Group has provided an undertaking on security margin on a joint and several basis, in respect of term loan and revolving loan facilities amounting to $1,618.0 million (2011: $1,618.0 million) granted to a joint venture. As at 31 december 2012, the amount outstanding under the facilities was $1,618.0 million (2011: $1,618.0 million).
(v) certain subsidiaries of the Group in china, whose principal activities are the trading of development properties, would in the ordinary course of business act as guarantors for the bank loans taken by the buyers to finance the purchase of residential properties developed by these subsidiaries. As at 31 december 2012, the outstanding notional amount of the guarantees amounted to $61.6 million (2011: $64.9 million).
35 contingencies (a) pursuant to an agreement dated 13 december 2010, a subsidiary of the Group had granted an option to a third
party to put a piece of freehold land used for a proposed mixed commercial development to the Group within three years from 27 december 2010 at MYr255 million upon the occurrence of certain trigger events. As at 31 december 2012, the put option has not been exercised.
(b) pursuant to an agreement dated 10 April 2012, a subsidiary of the Group had granted a third party an option to put a residential development to the Group within two years from 10 April 2012 at AUd77 million upon the occurrence of certain trigger events. As at 31 december 2012, the put option has not been exercised.
36 signiFicant reLateD PartY transactions For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the
direct and indirect ability to control the party, jointly control or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. related parties may be individuals or other entities.
the Group considers the directors of the company, and the council of ceos comprising the president & ceo, key management officers of the corporate office and ceos of the strategic business units, to be key management personnel in accordance with Frs 24 Related Party Disclosures.
in addition to the related party information disclosed elsewhere in the financial statements, there were significant related party transactions which were carried out in the normal course of business on terms agreed between the parties as follows:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
related corporations equity participation in a newly formed company – 150,000 – – Acquisition of an associate – 360,000 – – project management fee income 2,154 742 – –
subsidiaries Management fee income – – 71,471 66,107 it and administrative support services – – 16,681 12,332 others – – (113) (239)
associates and Joint ventures Management fee income 339,510 301,426 – – construction and project management income 78,549 51,958 – – rental expense (44,260) (44,684) (3,498) (3,824) proceeds from sale of properties and investments 359,322 443,535 – – Acquisition of property and investments 179,500 79,443 – – Accounting service fee, acquisition fee, divestment fee, marketing income and others 81,352 77,575 (266) (256)
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36 signiFicant reLateD PartY transactions (cont’d)
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
Key Management Personnel subscription of bonds issued by a subsidiary 430 3,000 – – interest paid/payable by the company and its subsidiaries 390 325 155 111 professional fees paid/payable to a director and a firm in which a director is a member – 7 – – sale of residential properties by the subsidiaries 3,680 1,178 – –
remuneration of Key Management Personnel salary, bonus and other benefits 20,868 23,041 10,369 11,650 employer’s contributions to defined contribution plans 136 107 60 45 equity compensation benefits 9,146 6,961 4,835 3,643
30,150 30,109 15,264 15,338
37 subsiDiaries (a) the significant subsidiaries directly held by the company which are incorporated and conducting business in the
republic of singapore are as set out below:
Percentage held by the company
name of company 2012
% 2011
%
capitaLand commercial Limited 100 100
capitaLand Financial Limited 100 100
capitaLand Gcc Holdings pte Ltd 100 100
capitaLand iLec pte Ltd 100 100
capitaLand Malaysia pte Ltd 100 # –
capitaLand residential Limited 100 100
capitaLand treasury Limited 100 100
capitaMalls Asia Limited 65.4 65.5
capitavalue Homes Limited 100 100
cL pinnacle pte Ltd 100 100
the Ascott Limited 100 100
# Transferred from CapitaLand Commercial Limited.
37 subsiDiaries (cont’d) (b) other significant subsidiaries in the Group are as follows:
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(i) Directly or indirectly held by capitaLand residential Limited:
Ankerite pte Ltd singapore 60.0 60.0
Ausprop Holdings Limited singapore 100 100
Australand Australia 59.3 59.3
Austvale Holdings Ltd singapore 100 100
capitaLand china Holdings pte Ltd singapore 100 100
capitaLand residential singapore pte Ltd singapore 100 100
crL realty pte Ltd singapore 100 100
Jubilee realty pte Ltd singapore 100 100
Leonie court pte Ltd singapore 100 100
phoenix realty pte Ltd singapore 100 100
(ii) Directly or indirectly held by capitaLand china holdings Pte Ltd:
1 caike property (shanghai) co., Ltd the people’s republic of china
100 50.0
1 capitaLand (china) investment co., Ltd the people’s republic of china
100 100
1 capitaLand Management (china) co., Ltd the people’s republic of china
100 100
1 capitaLand XinYe (Hangzhou) real estate development co., Ltd
the people’s republic of china
100 100
1 dongjin real estate development (tian Jin) co., Ltd the people’s republic of china
100 100
1 Foshan Xin Fo chen real estate development co., Ltd the people’s republic of china
100 100
Knowsley pte Ltd singapore 100 100
1 Longtex investment Limited Hong Kong 100 100
3 shenzhen Municipal Golden dragon property development Limited
the people’s republic of china
73.0 73.0
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37 subsiDiaries (cont’d)
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(iii) Directly or indirectly held by capitaLand commercial Limited:
capitaLand Malaysia pte Ltd Malaysia – # 100
capitaLand (office) investments pte Ltd singapore 100 100
e-pavilion pte Ltd singapore 100 100
sBr private Limited singapore 100 100
Wan tien realty (pte) Ltd singapore 100 100
# Transferred to CapitaLand Limited.
(iv) Directly or indirectly held by the ascott Limited:
Ascott residence trust Management Limited singapore 100 100
Ascott singapore raffles place pte Ltd singapore 100 100
cH residential pte Ltd singapore 100 # –
citadines Ashley tst (singapore) pte Ltd singapore 100 100
1 citadines Melbourne on Bourke pty Ltd Australia 100 100
Lc (Kumpulan Malaysia) pte Ltd singapore 100 100
Liang court (Malaysia) sdn Bhd Malaysia 100 100
the Ascott capital pte Ltd singapore 100 100
the Ascott Holdings Limited singapore 100 100
the cavendish Hotel (London) Limited United Kingdom 100 –
somerset capital pte Ltd singapore 100 100
# Includes 50% interest directly held through CapitaLand Residential Singapore Pte Ltd.
37 subsiDiaries (cont’d)
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(v) indirectly held by capitavalue homes Limited:
capitaLand (vietnam) Holdings pte Ltd singapore 100 100
1 capitaLand-vista Joint venture co., Ltd vietnam 80.0 80.0
1 capitaLand-Hoang thanh company Limited vietnam 70.0 70.0
1 capitaLand real estate Management (vietnam) Ltd vietnam 100 100
1 Guangzhou Kaiyao real estate co., Ltd the people’s republic of china
58.6 100
1 shanghai Kaihui real estate co., Ltd the people’s republic of china
55.7 –
1 Wuhan Kaihui real estate co., Ltd the people’s republic of china
100 100
(vi) Directly or indirectly held by capitaLand Financial Limited:
capitaLand china development Fund singapore 100 100 Management private Limited
capitacommercial trust Management Limited singapore 100 100
capitaLand Fund Management (Asia) pte Ltd (formerly known as rccF Management pte Ltd)
singapore 100 100
precinct Australia pte Ltd singapore 100 100
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37 subsiDiaries (cont’d)
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(vii) Directly or indirectly held by capitaMalls asia Limited:
capitaLand retail china pte Ltd singapore 65.4 65.5
capitaLand retail (MY) pte Ltd singapore 65.4 65.5
capitaLand retail singapore investments pte Ltd singapore 65.4 65.5
capitaLand retail Hong Kong investments two (Bv) Limited
British virgin islands
65.4 65.5
capitaMall trust Management Limited singapore 65.4 65.5
capitaretail china investments pte Ltd singapore 65.4 65.5
cMA Japan Holdings pte Ltd singapore 65.4 65.5
pyramex investments pte Ltd singapore 65.4 65.5
1 shanghai Yongwei real estate co., Ltd the people’s republic of china
43.2 43.2
(viii) Directly or indirectly held by australand:
2 Australand Finance Limited Australia 59.3 59.3
2 Australand Funds Management Limited Australia 59.3 59.3
2 Australand HK company Limited Hong Kong 59.3 59.3
2 Australand investments Limited Australia 59.3 59.3
2 Australand property Group pty Limited Australia 59.3 59.3
2 Australand property trust Australia 59.3 59.3
2 Australand property Limited Australia 59.3 59.3
2 Australand property trust No.4 Australia 59.3 59.3
2 Australand property trust No.5 Australia 59.3 59.3
37 subsiDiaries (cont’d)
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(ix) Directly held by capitaLand iLec Pte Ltd:
capitaLand iLec one pte Ltd singapore 100 100
Kestrel pte Ltd singapore 100 100
(x) Directly held by capitaLand gcc holdings Pte Ltd:
1 capitaLand Bahrain Bay Business services WLL Bahrain 100 100
capitaLand Gcc (Abu dhabi) pte Ltd singapore 100 100
capitaLand Gcc (Bahrain) pte Ltd singapore 100 100
Notes:
All significant subsidiaries are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by PricewaterhouseCoopers and its associated firms.
3 Audited by Shenzhen Yida Certified Public Accountants.
4 Audited by Beijing Zhong Jing Heng Tai Certified Public Accountants.
38 associates details of significant associates are as follows:
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(i) Directly held by cL Pinnacle Pte Ltd:
surbana corporation pte Ltd singapore 40.0 40.0
(ii) indirectly held by capitaLand china holdings Pte Ltd:
capitaLand china development Fund pte Ltd singapore 37.5 37.5
1 central china real estate Ltd cayman islands 27.1 27.1
2 Lai Fung Holdings Limited cayman islands 20.0 20.0
raffles city china Fund Ltd cayman islands 45.4^ 45.3^
^ Includes 9.8% interest indirectly held through CapitaMalls Asia Limited.
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38 associates (cont’d) details of significant associates are as follows:
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(iii) indirectly held by capitaLand commercial Limited:
capitacommercial trust singapore 32.3# 32.0 #
3 dBs china square Limited singapore 30.0 30.0
# Includes 3.2% and 2.9% interests indirectly held through CapitaLand Financial Limited as at end-2012 and end-2011 respectively.
(iv) Directly and indirectly held by the ascott Limited:
Ascott residence trust singapore 49.4 48.8
Ascott serviced residence (china) Fund cayman islands 36.1 36.1
(v) indirectly held by capitaMalls asia Limited:
capitaMall trust+ singapore 18.0 18.7
1 capitaMalls Malaysia trust Malaysia 23.5 23.4
capitaMalls Japan Fund private Limited+ singapore 17.2 17.2
capitaMalls china income Fund singapore 29.4 29.5
capitaMalls china development Fund ii singapore 29.4 29.5
capitaMalls china development Fund iii singapore 32.7 –
capitaMalls china incubator Fund+ singapore 19.6 19.6
capitaMalls india development Fund singapore 29.8 29.8
capitaretail china trust+ singapore 16.4 17.7
+ Considered to be an associate as the Group has significant influence over the financial and operating policy decisions of the investee through its subsidiary CapitaMalls Asia Limited.
(vi) indirectly held by capitaLand gcc holdings Pte Ltd:
1 raffles city Bahrain Fund Ltd cayman islands 40.9 40.9
Notes:
All significant associates are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by Ernst & Young and its associated firms.
3 Audited by PricewaterhouseCoopers and its associated firms.
39 Joint ventures details of significant joint ventures are as follows:
effective interest held by the group
name of company Place of incorporation
2012 %
2011 %
(i) Directly or indirectly held by capitaLand china holdings Pte Ltd:
2 Beautiwin Limited Hong Kong 50.0 50.0
ctM property trust singapore 51.7# 51.7#
# Includes 20.5% interest indirectly held through CapitaMalls Asia Limited.
(ii) Directly held by capitavalue homes Limited:
vietnam Joint venture company Limited cayman islands 50.0 50.0
(iii) indirectly held by capitaMalls asia Limited:
orchard turn Holding pte Ltd singapore 32.7 32.8
1 suzhou Jinghui properties co the people’s republic of china
32.7 –
(iv) indirectly held by capitaLand gcc holdings Pte Ltd:
1 Mubadala capitaLand real estate LLc United Arab emirates
49.0 49.0
Notes:
All significant joint ventures are audited by KPMG LLP Singapore except for the following:
1 Audited by other member firms of KPMG International.
2 Audited by Ernst & Young and its associated firms.
40 oPerating segMents Management determines the operating segments based on the reports reviewed and used by the council of ceos for
strategic decisions making and resources allocation. For management purposes, the Group is organised into strategic business units based on their products, services and geography.
the Group’s reportable operating segments are as follows:
(i) capitaLand residential singapore – develops residential properties in singapore for sale and covers a wide spectrum of the residential market in singapore.
(ii) capitaLand china Holdings – involves in the residential, commercial and integrated property development in china.
(iii) capitaLand commercial – owner/manager of commercial and industrial properties in singapore, Malaysia and United Kingdom.
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40 oPerating segMents (cont’d) (iv) Ascott – an international serviced residence owner-operator with operations in key cities of Asia pacific, europe
and the Gulf region. it operates three brands, namely Ascott, somerset and citadines.
(v) capitaLand Financial – involves in real estate fund management and financial advisory services.
(vi) capitavalue Homes – develops value housing projects in china and vietnam.
(vii) capitaMalls Asia – shopping mall owner/manager with portfolio in singapore, china, india, Japan and Malaysia.
(viii) Australand – a major diversified property group with activities in residential, commercial and industrial developments and investment properties across Australia.
(ix) others – includes corporate office, Group treasury and surbana.
information regarding the operations of each reportable segment is included below. Management monitors the operating results of each of its business unit for the purpose of making decisions on resource allocation and performance assessment. performance is measured based on segment earnings before interest and tax (“eBit”). eBit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments. segment assets and liabilities are presented net of inter- segment balances. inter-segment pricing is determined on arm’s length basis.
Geographically, management reviews the performance of the businesses in singapore, china, other Asia, Australia and europe. in presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Non-current assets and total assets are based on the geographical location of the assets.
on 3 January 2013, capitaLand announced that it will realign and simplify the Group’s organisational structure to sharpen its focus on key markets and further accelerate its growth potential.
the Group will be realigned into four main businesses – capitaLand singapore, capitaLand china, capitaMalls Asia (cMA) and the Ascott Limited (Ascott). Under the simplified organisational structure, the Group’s businesses in singapore and china excluding that of cMA and Ascott, will be consolidated into capitaLand singapore and capitaLand china respectively. cMA and Ascott will be the other two main business units and they will operate across geographies that capitaLand is in.
40 oPerating segMents (cont’d) operating segments – 31 December 2012
capitaLand residential singapore
capitaLand china
holdings capitaLand
commercial ascott capitavalue
homes capitaLand
Financial capitaMalls
asia australand others elimination group
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
revenue
external revenue 852,413 396,516 81,674 374,186 2,709 110,544 351,346 1,131,656 319 – 3,301,363
inter-segment revenue 1,927 7,561 4,865 7,500 1,190 3,581 2,306 – 249,186 (278,116) –
total revenue 854,340 404,077 86,539 381,686 3,899 114,125 353,652 1,131,656 249,505 (278,116) 3,301,363
segmental results
company and subsidiaries 330,048 137,555 49,212 90,917 (62,026) 67,584 266,847 333,070 314,739 (345,296) 1,182,650
Associates (11,452) 164,484 126,886 72,185 – 239 298,047 9,546 9,471 29,791 699,197
Joint ventures 9,557 20,770 (1,906) 55 (18,872) 6 111,273 14,701 – – 135,584
earnings before interest and taxation 328,153 322,809 174,192 163,157 (80,898) 67,829 676,167 357,317 324,210 (315,505) 2,017,431
Finance costs (498,953)
taxation (201,907)
Profit for the year 1,316,571
segment assets 3,469,018 7,186,880 2,767,228 3,328,614 655,640 323,449 10,774,145 5,085,365 11,058,693 (6,861,423) 37,787,609
segment Liabilities 1,363,028 2,124,291 392,532 1,161,922 281,806 56,233 4,144,328 2,167,144 6,652,541 – 18,343,825
other segment items: interest income 10,624 12,276 8,406 9,876 916 140 26,930 5,342 19,254 – 93,764
Depreciation and amortisation (612) (2,893) (1,141) (18,899) (894) (168) (8,110) (5,919) (7,804) – (46,440)
(Provision made)/ reversal of provision for foreseeable losses – (5,000) 16,000 – (34,166) – – – (10,263) – (33,429)
(allowance for)/ reversal of impairment losses for assets (4) (143) 2,066 (11,971) (29) – (384) – (26,701) 17,195 (19,971)
Fair value gains/(losses) on investment properties – 6,950 (2,188) (977) – – 84,830 66,477 – – 155,092
share-based expenses (2,914) (4,714) (3,602) (4,652) (1,998) (2,607) (14,504) (1,282) (10,379) – (46,652)
gains on disposal of investments 1 33,717 6,805 81,201 11 1,534 92,846 – 1,717 – 217,832
associates 248,251 2,117,827 1,538,713 1,128,968 (364) 163,151 3,673,245 121,327 392,653 308,526 9,692,297
Joint ventures 142,528 325,806 66,226 3,401 46,214 140 1,977,658 254,795 2,217 – 2,818,985
capital expenditure# 67,458 21,927 73,660 64,776 3,649 15 561,366 249,533 8,028 – 1,050,412
# Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets.
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40 oPerating segMents (cont’d) operating segments – 31 December 2011
capitaLand residential singapore
capitaLand china
holdings capitaLand
commercial ascott capitavalue
homes capitaLand
Financial capitaMalls
asia australand others elimination group
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
revenue
external revenue 773,955 521,993 92,799 369,271 79,827 101,997 243,325 836,383 19 – 3,019,569
inter-segment revenue 129 4,647 3,934 8,179 491 1,305 2,848 – 247,317 (268,850) –
total revenue 774,084 526,640 96,733 377,450 80,318 103,302 246,173 836,383 247,336 (268,850) 3,019,569
segmental results
company and subsidiaries 301,317 251,576 34,517 41,725 (11,076) 75,947 241,196 284,834 276,162 (286,255) 1,209,943
Associates 2,026 157,327 160,610 107,228 – 4,073 195,382 5,320 (6,463) 25,691 651,194
Joint ventures 24,077 14,777 (5,562) (559) (1,794) 20 160,446 34,047 – – 225,452
earnings before interest and taxation 327,420 423,680 189,565 148,394 (12,870) 80,040 597,024 324,201 269,699 (260,564) 2,086,589
Finance costs (472,785)
taxation (190,884)
Profit for the year 1,422,920
segment assets 3,056,600 6,983,939 2,771,082 3,345,704 511,065 239,065 8,901,607 5,140,846 11,272,463 (6,902,930) 35,319,441
segment Liabilities 1,370,212 1,966,926 351,587 1,205,106 232,713 49,137 2,500,260 2,190,666 6,213,363 – 16,079,970
other segment items: interest income 13,462 14,966 1,447 11,200 1,484 139 18,891 5,500 13,868 – 80,957
Depreciation and amortisation (510) (6,408) (1,285) (14,997) (437) (220) (7,067) (4,370) (5,315) – (40,609)
reversal of provision/ (Provision made) for foreseeable losses – – 2,700 – – – – (39,155) – – (36,455)
impairment losses for assets (4) (326) (4,774) – (56) – (278) – (57) – (5,495)
Fair value (losses)/gains on investment properties – (2,927) 6,915 232 – – 200,934 79,878 – – 285,032
share-based expenses (1,553) (3,495) (3,035) (4,281) (916) (1,437) (8,343) (2,971) (8,312) – (34,343)
gains/(Losses) on disposal of investments – 169,511 21,766 36,853 6 20,322 14,793 – (3,223) – 260,028
associates 259,672 2,056,740 1,532,978 1,152,984 (364) 135,535 3,397,889 83,742 402,696 268,865 9,290,737
Joint ventures 135,971 115,476 73,900 4,125 59,271 1,341 728,544 273,387 2,248 – 1,394,263
capital expenditure# 246,962 33,476 205,199 41,698 1,086 233 1,500,931 226,165 22,020 – 2,277,770
# Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets.
40 oPerating segMents (cont’d) geographic information
singapore china+ other asia# australia europe others@ total
2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000
external revenue 1,169,706 587,933 139,896 1,182,289 196,687 24,852 3,301,363
non-current assets^ 7,497,499 8,049,872 2,179,149 3,685,159 794,713 – 22,206,392
total assets 14,631,134 13,391,858 3,242,914 5,444,832 1,076,871 – 37,787,609
2011
external revenue 1,074,765 665,599 156,354 890,213 200,508 32,130 3,019,569
non-current assets^ 6,821,378 6,520,896 1,674,865 3,526,515 750,190 – 19,293,844
total assets 14,275,555 12,021,215 2,715,061 5,461,780 845,830 – 35,319,441
+ China includes Hong Kong and Macau.
# Other Asia includes Indonesia, Japan, Malaysia, Philippines, Thailand, Korea, India, Vietnam and Gulf Cooperation Council countries.
@ Others includes the Cayman Islands.
^ Non-current assets comprised property, plant and equipment, intangible assets, investment properties and associates and joint ventures.
41 new accounting stanDarDs anD interPretations not Yet aDoPteD A number of new standards, amendments to standards and interpretations are effective for annual periods beginning
on or after 1 January 2013, and have not been applied in preparing these financial statements. those new standards, amendments to standards and interpretations are set out below.
Applicable for the Group’s 2013 financial statements
• FRS 19 Employee Benefits (revised 2011) amended the definition of short term employee benefits and requires employee benefits to be classified as short-term based on expected timing of settlement rather than the employee’s entitlement to the benefits.
the Group currently has a bonus plan based on economic value Added (evA) that was awarded to its key executives. the evA bonus accrued during the financial year is credited into the bonus account and one-third of the balance in the bonus account will be paid out annually. As at 31 december 2012, the bonus payable is measured on an undiscounted basis.
Upon adoption of this standard, the Group will need to measure the bonus payable after one year at the present value of the amount payable.
these amendments will be applied retrospectively and prior periods in the Group’s 2013 financial statements will be restated. the Group does not expect any significant financial impact on its financial position or performance from the adoption of the revised Frs 19.
240
appendix stAtUtorY AccoUNts
Notes to tHe FiNANciAL stAteMeNts
241
41 new accounting stanDarDs anD interPretations not Yet aDoPteD (cont’d) Applicable for the Group’s 2013 financial statements (cont’d)
• FRS 113 Fair Value Measurement, which replaces the existing guidance on fair value measurement in different Frss with a single definition of fair value. the standard also establishes a framework for measuring fair values and sets out the disclosure requirements for fair value measurements.
the adoption of this standard will require the Group to re-assess the bases used for determining the fair values computed for both measurement and disclosures purposes and would result in more extensive disclosures on fair value measurements.
in accordance with the transitional provisions, the Group will apply Frs 113 prospectively as of 1 January 2013. on initial application of the standard, the Group does not expect substantial changes to the bases used for determining fair values.
Applicable for the Group’s 2014 financial statements
• Amendments to FRS 32 Financial Instruments: presentation – Offsetting Financial Assets and Financial Liabilities, which clarifies the existing criteria for net presentation on the face of the statement of financial position. Under the amendments, to qualify for offsetting, the right to set off a financial asset and a financial liability must not be contingent on a future event and must be enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all counterparties.
the Group currently offsets receivables and payables due from/to the same counterparty if the Group has the legal right to set off the amounts when it is due and payable based on the contractual terms of the arrangement with the counterparty, and the Group intends to settle the amounts on a net basis. Based on the local laws and regulations in certain jurisdictions in which the counterparties are located, the set-off rights are set aside in the event of bankruptcy of the counterparties.
the amendments will be applied retrospectively and prior periods in the Group’s 2014 financial statements will be restated. on adoption of the amendments, the Group will have to present the respective receivables and payables on a gross basis as the right to set-off is not enforceable in the event of bankruptcy of the counterparty.
• FRS 110 Consolidated Financial Statements, which changes the definition of control such that an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power with the investee. Frs 110 introduces a single control model with a series of indicators to assess control. Frs 110 also adds additional context, explanation and application guidance based on the principle of control.
the Group has re-evaluated its involvement with investees under the new control model. Based on its assessment as at 31 december 2012, the Group has control over an associated company by virtue of the aggregate economic interests derived from the entity.
this standard will be applied retrospectively and prior periods in the Group’s 2014 financial statements will be restated. While the Group is continuing to evaluate the application of this standard, based on FY2012 financial information, the estimated effect of the application of Frs 110 is a decrease in equity attributable to owners of the company of $573.8 million, an increase in non-controlling interests of $713.8 million and a decrease in profit for 2012 of $141.0 million.
41 new accounting stanDarDs anD interPretations not Yet aDoPteD (cont’d) Applicable for the Group’s 2014 financial statements (cont’d)
• FRS 111 Joint Arrangements, which establishes the principles for classification and accounting of joint arrangements. the adoption of this standard would require the Group to re-assess and classify its joint arrangements as either joint operations or joint ventures based on its rights and obligations arising from the joint arrangements. Under this standard, interests in joint ventures will be accounted for using the equity method whilst interests in joint operations will be accounted for using the applicable Frss relating to the underlying assets, liabilities, revenue and expense items arising from the joint operations.
As the Group is currently applying the equity method of accounting for its joint ventures, there will be no impact to the Group’s profit or net assets when the Group adopts Frs 111 in 2014.
• FRS 112 Disclosure of Interests in Other Entities, which sets out the disclosures required to be made in respect of all forms of an entity’s interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. the adoption of this standard would result in more extensive disclosures being made in the Group’s financial statements in respect of its interests in other entities.
As Frs 112 is primarily a disclosure standard, there will be no financial impact on the results and financial position of the Group and the company upon adoption of this standard by the Group in 2014.
242
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243
ecoNoMic vALUe Added stAteMeNts/ vALUe Added stAteMeNts
ecoNoMic vALUe Added stAteMeNts
Note 1: The reported current tax is adjusted for the statutory tax impact of interest expense.
Note 2: Monthly average capital employed included equity, interest-bearing liabilities, timing provision, cumulative goodwill and present value of operating leases.
Major Capital Components S$ million
Borrowings 13,587.1 Equity 16,924.1 Others 788.6
Total 31,299.8
Note 3: The weighted average cost of capital is calculated as follows:
i) Cost of Equity using Capital Asset Pricing Model with market risk premium at 5.0% (2011: 5.0%) per annum;
ii) Risk-free rate of 1.67% (2011: 2.39%) per annum based on yield-to-maturity of Singapore Government 10-year Bonds;
iii) Ungeared beta ranging from 0.64 to 0.97 (2011: 0.50 to 0.90) based on the risk categorisation of CapitaLand’s strategic business units; and
iv) Cost of Debt rate at 3.30% (2011: 3.57%) per annum using 5-year Singapore Dollar Swap Offer rate plus 200 basis points (2011: 175 basis points).
note 2012
s$ million 2011
s$ million
net operating Profit before tax 683.7 737.2
Adjust for:
share of results of associates and joint ventures 834.8 876.6
interest expense 513.4 490.3
others 55.8 71.3
adjusted Profit before interest and tax 2,087.7 2,175.4
cash operating taxes 1 (233.1) (219.8)
net operating Profit after tax (noPat) 1,854.6 1,955.6
Average capital employed 2 31,299.8 27,713.7
Weighted average cost of capital (%) 3 5.6 5.6 capital charge (cc) 1,752.8 1,552.0
economic value added (eva) [noPat – cc] 101.8 403.6
Non-controlling interests (84.0) (99.3) group eva attributable to owners of the company 17.8 304.3
vALUe Added stAteMeNts
2012 s$ million
2011 s$ million
value added From:
revenue earned 3,301.4 3,019.6
Less: Bought in materials and services (1,886.6) (1,775.9)
gross value added 1,414.8 1,243.7
share of results of associates and joint ventures 834.8 876.6
exchange losses (net) (8.7) (33.2)
other operating income (net) 445.9 623.0 1,272.0 1,466.4
total value added 2,686.8 2,710.1
Distribution:
to employees in wages, salaries and benefits 589.4 526.1
to government in taxes and levies 263.0 261.9
to providers of capital in:
– Net interest on borrowings 462.5 458.2
– dividends to shareholders 340.0 256.2 1,654.9 1,502.4
balance retained in the business:
depreciation and amortisation 46.5 40.6
revenue reserves net of dividends to owners of the company 590.3 801.1
Non-controlling interests 386.2 365.6 1,023.0 1,207.3
non-Production costs/(income):
Allowance for doubtful receivables 22.9 0.4
receipt of settlement of insurance claims (14.0) – total Distribution 2,686.8 2,710.1
Productivity analysis:
value added per employee (s$’000)# 194 167
value added per dollar of employment cost (s$) 2.40 2.36
value added per dollar sales (s$) 0.43 0.41
# Based on average 2012 headcount of 7,284 (2011: 7,447).
244
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245
sUppLeMeNtAL iNForMAtioN
sUppLeMeNtAL iNForMAtioN 1 DiscLosure oF Directors’ interests Pursuant to sgx-st Listing ruLe 1207(7) pursuant to rule 1207(7) of the Listing Manual of the singapore exchange securities trading Limited, Mr Lim Ming
Yan who was appointed as director of the company on 1 January 2013 had interests in the shares and convertible securities of the company as at 21 January 2013 as follow:
interests as at 21 January 2013
ordinary shares 1,200,923
contingent award of performance shares1 to be delivered after 2012 (152,437 shares) 0 to 304,8743
contingent award of performance shares1 to be delivered after 2013 (143,700 shares) 0 to 287,4003
contingent award of performance shares1 to be delivered after 2014 (144,000 shares) 0 to 252,0003
Unvested restricted shares2 to be delivered after 2010 33,1565
Unvested restricted shares2 to be delivered after 2011 50,3966
contingent award of restricted shares2 to be delivered after 2012 (110,000 shares) 0 to 165,0004
$1.3 billion convertible bonds 3.125% due 2018 (Aggregate principal amount of bonds which remains outstanding is $1.05 billion) $500,000
$1.2 billion convertible bonds 2.875% due 2016 $1,000,000
Mr stephen Lee ching Yen who was also appointed as director of the company on 1 January 2013 had no interests in the shares and convertible securities of the company as at 21 January 2013.
Footnotes:
1 Performance shares are shares under awards pursuant to the CapitaLand Performance Share Plan 2000 and CapitaLand Performance Share Plan 2010 (collectively referred to as “CapitaLand Performance Share Plan”).
2 Restricted shares are shares under awards pursuant to the CapitaLand Restricted Stock Plan 2000 and CapitaLand Restricted Share Plan 2010 (collectively referred to as “CapitaLand Restricted Stock/Share Plan”).
3 The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
4 The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of three years. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award.
5 Being the unvested one-third of the award.
6 Being the unvested two-thirds of the award.
2 interesteD Person transactions interested person transactions carried out during the financial year which fall under chapter 9 of the Listing Manual
of the singapore exchange securities trading Limited are as follows:
the group 2012
$’000
transactions with temasek holdings (Private) Limited and its associates:
sale of goods and services 197,136 purchase of goods and services 18,198
transaction with singapore airlines Limited:
purchase of goods and services 199
transactions with starhub Limited and its associate:
purchase of goods and services 282
transactions with directors and their associates:
sale of a residential unit 3,680 Appointment of a former director as senior advisor to the Board of directors of the company 120
3 aPPointMent oF auDitors the company confirms that it has complied with rules 712 and 715 or 716 of the Listing Manual of the singapore
exchange securities trading Limited in relation to its auditing firms.
246
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247
Shareholding StatiSticS / notice of annual general Meeting
notice iS hereBY giVen that the annual general Meeting of the company will be held at the Star theatre, level 5, the Star Performing arts centre, 1 Vista exchange green, Singapore 138617 on friday, 26 april 2013 at 10.00 a.m. to transact the following business:
AS ORDINARY BUSINESS
1 to receive and adopt the directors’ report and audited financial Statements for the year ended 31 december 2012 and the auditors’ report thereon.
2 to declare a first and final 1-tier dividend of S$0.07 per share for the year ended 31 december 2012.
3 to approve directors’ fees of S$2,032,059 for the year ended 31 december 2012 comprising:
(a) S$1,474,641.30 to be paid in cash (2011: S$1,519,548.30); and (b) S$557,417.70 to be paid in the form of share awards under the capitaland restricted Share Plan 2010, with any
residual balance to be paid in cash (2011: S$400,052.70).
4 to re-elect the following directors, who are retiring by rotation pursuant to article 95 of the articles of association of the company and who, being eligible, offer themselves for re-election:
(a) Mr ng Kee choe (b) Mr Peter Seah lim huat
5 to re-elect the following directors, who are retiring pursuant to article 101 of the articles of association of the company and who, being eligible, offer themselves for re-election:
(a) tan Sri amirsham Bin a aziz (b) Mr Stephen lee ching Yen (c) Mr lim Ming Yan
6 to re-appoint KPMg llP as auditors of the company and to authorise the directors to fix their remuneration.
AS SPECIAL BUSINESS
7 to consider and, if thought fit, to pass with or without any modification, the following resolutions as ordinary resolutions:
7a that pursuant to Section 161 of the companies act, authority be and is hereby given to the directors of the company to:
(a) (i) issue shares in the capital of the company (”shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, ”instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the directors may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this resolution may have ceased to be in force) issue shares in pursuance of any instrument made or granted by the directors while this resolution was in force,
notice of annual general Meeting
SHARE CAPITAL Paid-up capital S$6,346,142,745.81 number of issued and Paid-up Shares (including treasury Shares) 4,270,735,848 number of treasury Shares 19,611,437 number of issued and Paid-up Shares (excluding treasury Shares) 4,251,124,411 class of Shares ordinary Shares Voting rights one vote per share. the company cannot exercise any
voting rights in respect of shares held by it as treasury shares.
TWENTY LARGEST SHAREHOLDERS as shown in the register of Members and depository register Name No. of shares %(1)
1 temasek holdings (Private) limited 1,680,704,140 39.54 2 citibank nominees Singapore Pte ltd 638,022,082 15.01 3 dBS nominees Pte ltd 479,090,878 11.27 4 dBSn Services Pte ltd 302,759,094 7.12 5 hSBc (Singapore) nominees Pte ltd 232,798,495 5.48 6 united overseas Bank nominees Pte ltd 144,167,515 3.39 7 raffles nominees (Pte) ltd 73,855,974 1.74 8 BnP Paribas Securities Services Singapore Branch 30,786,507 0.72 9 Morgan Stanley asia (Singapore) Securities Pte ltd 24,391,326 0.57 10 Merrill lynch (Singapore) Pte ltd 23,019,609 0.54 11 Bank of Singapore nominees Pte ltd 20,767,467 0.49 12 Pei hwa foundation limited 11,727,335 0.28 13 ocBc nominees Singapore Private limited 11,333,799 0.27 14 dB nominees (S) Pte ltd 11,212,716 0.26 15 ocBc Securities Private ltd 10,772,305 0.25 16 BnP Paribas nominees Singapore Pte ltd 10,482,239 0.25 17 lee Pineapple company Pte ltd 10,000,000 0.23 18 Phillip Securities Pte ltd 9,373,042 0.22 19 uoB Kay hian Pte ltd 6,906,953 0.16 20 dBS Vickers Securities (S) Pte ltd 4,705,603 0.11 Total 3,736,877,079 87.90
SUBSTANTIAL SHAREHOLDERS as shown in the register of Substantial Shareholders as at 28 february 2013 Direct Interest Deemed Interest Substantial Shareholder No. of shares %(1) No. of shares %(1)
temasek holdings (Private) limited 1,680,704,140 39.53 59,333,134(2) 1.40
SIZE OF HOLDINGS No. of No. of shares excluding Size of Shareholdings shareholders % treasury shares %(1)
1 – 999 987 1.80 340,039 0.01 1,000 – 10,000 44,784 81.78 174,382,741 4.10 10,001 – 1,000,000 8,950 16.35 306,668,135 7.21 1,000,001 and above 39 0.07 3,769,733,496 88.68
Total 54,760 100.00 4,251,124,411 100.00 approximately 58.97%(1) of the issued ordinary shares are held in the hands of the public. rule 723 of the listing Manual of the Singapore exchange Securities trading limited is complied with. Notes: (1) Percentage is calculated based on the total number of 4,251,124,411 issued shares, excluding treasury shares.
(2) Temasek Holdings (Private) Limited is deemed to have an interest in 59,333,134 ordinary shares in which its subsidiary and associated companies have or are deemed to have an interest.
Shareholding StatiSticS As at 28 February 2013
CAPITALAND LIMITED (company registration no. 198900036n) (incorporated in the republic of Singapore)
248
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249
as sPeciaL business (cont’d)
provided that:
(1) the aggregate number of shares to be issued pursuant to this resolution (including shares to be issued in pursuance of instruments made or granted pursuant to this resolution) does not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the company (including shares to be issued in pursuance of instruments made or granted pursuant to this resolution) does not exceed ten per cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the singapore exchange securities trading Limited (“sGX-st”)) for the purpose of determining the aggregate number of shares that may be issued under sub- paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the company at the time this resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and
(ii) any subsequent bonus issue, consolidation or subdivision of shares; (3) in exercising the authority conferred by this resolution, the company shall comply with the provisions of the
Listing Manual of the sGX-st for the time being in force (unless such compliance has been waived by the sGX-st) and the Articles of Association for the time being of the Company; and
(4) (unless revoked or varied by the company in general meeting) the authority conferred by this resolution shall continue in force until the conclusion of the next Annual General Meeting of the company or the date by which the next Annual General Meeting of the company is required by law to be held, whichever is the earlier.
7B that the directors of the company be and are hereby authorised to:
(a) grant awards in accordance with the provisions of the capitaLand performance share plan 2010 (the “performance Share Plan”) and/or the CapitaLand Restricted Share Plan 2010 (the “Restricted Share Plan”); and
(b) allot and issue from time to time such number of shares in the capital of the company as may be required to be issued pursuant to the vesting of awards under the performance share plan and/or the restricted share plan,
provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the performance share plan, the restricted share plan and all shares, options or awards granted under any other share schemes of the company then in force, shall not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the company from time to time.
By order of the Board
Low sai choY coMPanY secretarY
singapore 22 March 2013
Notice oF ANNUAL GeNerAL MeetiNG
Notice oF ANNUAL GeNerAL MeetiNG
notes:
A member of the company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote instead of him. Where a member appoints more than one proxy, he shall specify the proportion of his shareholdings to be represented by each proxy. A proxy need not be a member of the company. the instrument appointing a proxy or proxies must be deposited at the office of the company’s share registrar, M & c services private Limited, 112 robinson road, #05-01, singapore 068902 not less than 48 hours before the time appointed for holding the Annual General Meeting. Additional information relating to the Notice of Annual General Meeting:
1 in relation to item 3 under the heading “As ordinary Business”, the total compensation of the non-executive directors for 2012 of an aggregate amount of s$2,032,059, if approved, will be paid as to s$1,474,641.30 in cash, and s$557,417.70 in the form of share awards under the capitaLand restricted share plan 2010. consequently, and in accordance with the “directors’ Fee policy”, a non-executive director who served on the Board during 2012 (with the exception of dr Hu tsu tau, Mr richard edward Hale and dr Fu Yuning, who retired from the Board during 2012) will be remunerated as to about 70 per cent. (70%) of his total directors’ fees in cash and about 30 per cent. (30%) of his total directors’ fees in the form of shares in the company. the actual number of shares to be awarded will be based on the volume- weighted average price of a share on the sGX-st over the 14 trading days from (and including) the ex-dividend date following the company’s Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. the awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. each of dr Hu tsu tau, Mr richard edward Hale and dr Fu Yuning will receive all of their directors’ fees in cash.
2 in relation to item 4 under the heading “As ordinary Business”, Mr Liew Mun Leong, a non-independent director, retires by rotation pursuant to Article 95 of the company’s Articles of Association at the Annual General Meeting and is not seeking re-election. in relation to items 4(a) and (b) under the heading “As ordinary Business”, Mr Ng Kee choe will, upon re-election, continue to serve as chairman of the Board, chairman of the investment committee, a member of the Nominating committee, a member of the Finance and Budget committee and a member of the executive Resource and Compensation Committee respectively; and Mr Peter Seah Lim Huat will, upon re-election, continue to serve as deputy chairman of the Board, chairman of the Nominating committee, chairman of the Finance and Budget committee and chairman of the executive resource and compensation committee respectively. Mr Ng will replace Mr seah as chairman of the executive resource and compensation committee from 27 April 2013. Mr Ng and Mr seah are considered as independent directors. please refer to the “Board of directors” section of the company’s Annual report 2012 for information on the current directorships in other listed companies and other principal commitments of Mr Ng and Mr seah respectively.
3 in relation to items 5(a), (b) and (c) under the heading “As ordinary Business”, tan sri Amirsham Bin A Aziz will, upon re-election, continue to serve as a member of the Audit committee and a member of the risk committee respectively; Mr Stephen Lee Ching Yen will, upon re-election, continue to serve as a member of the Executive Resource and Compensation Committee and a member of the Risk Committee respectively; and Mr Lim Ming Yan will, upon re-election, continue to serve as a member of the investment committee, a member of the Finance and Budget committee and a member of the corporate disclosure committee respectively. tan sri Amirsham and Mr Lee are considered as independent directors. Mr Lim is the president and Group chief executive officer of the company. please refer to the “Board of directors” section of the company’s Annual report 2012 for information on the current directorships in other listed companies and other principal commitments of tan sri Amirsham, Mr Lee and Mr Lim respectively.
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notes: (cont’d)
4 ordinary resolution No. 7A under the heading ”As special Business”, if passed, will empower the directors to issue shares in the company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments from the date of the Annual General Meeting until the date of the next Annual General Meeting. the aggregate number of shares which the directors may issue (including shares to be issued pursuant to convertibles) under this resolution must not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the company with a sub-limit of ten per cent. (10%) for issues other than on a pro rata basis. For the purpose of determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) in the capital of the company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the company at the time that ordinary resolution No. 7A is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that ordinary resolution No. 7A is passed, and (b) any subsequent bonus issue, consolidation or subdivision of shares. the sub-limit of ten per cent. (10%) for issues other than on a pro rata basis is below the twenty per cent. (20%) sub-limit permitted by the Listing Manual of the sGX-st. the directors believe that the lower sub-limit of ten per cent. (10%) would sufficiently address the company’s present need to maintain flexibility while taking into account shareholders’ concerns against dilution.
5 ordinary resolution No. 7B under the heading ”As special Business”, if passed, will empower the directors to grant awards under the performance share plan and the restricted share plan, and to allot and issue shares pursuant to the vesting of such awards provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the performance share plan, the restricted share plan and all shares, options or awards granted under any other share schemes of the company then in force, does not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the company from time to time.
Notice oF ANNUAL GeNerAL MeetiNG
caPitaLanD LiMiteD (regn. No.: 198900036N) (incorporated in the republic of singapore)
ProxY ForM annuaL generaL Meeting
i/We, _________________________________ (Name) _____________________________ (Nric/passport/company regn. No.)
of _________________________________________________________________________________________________ (Address)
being a member/members of capitaLand Limited (the “company”) hereby appoint:
name address nric/Passport no.
Proportion of shareholdings
no. of shares %
and/or (delete as appropriate)
name address nric/Passport no.
Proportion of shareholdings
no. of shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the Annual General Meeting of the company to be held at the star theatre, Level 5, the star performing Arts centre, 1 vista exchange Green, singapore 138617, on Friday, 26 April 2013 at 10.00 a.m., and at any adjournment thereof. i/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the Annual General Meeting as indicated hereunder. if no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Annual General Meeting.
no. resolutions relating to: For* against*
orDinarY business
1 Adoption of directors’ report, Audited Financial statements and Auditors’ report
2 declaration of a First and Final dividend
3 Approval of directors’ Fees
4(a) re-election of Mr Ng Kee choe as director
4(b) re-election of Mr peter seah Lim Huat as director
5(a) re-election of tan sri Amirsham Bin A Aziz as director
5(b) re-election of Mr stephen Lee ching Yen as director
5(c) re-election of Mr Lim Ming Yan as director
6 re-appointment of KpMG LLp as Auditors
sPeciaL business
7A Authority for directors to issue shares and to make or grant instruments pursuant to section 161 of the companies Act, cap. 50
7B Authority for directors to grant awards, and to allot and issue shares, pursuant to the capitaLand performance share plan 2010 and the capitaLand restricted share plan 2010
total number of shares held
iMPortant: 1. For investors who have used their cpF monies to buy the company's shares, this
summary report/Annual report is forwarded to them at the request of their cpF Approved Nominees and is sent solely For iNForMAtioN oNLY.
2. this proxy Form is not valid for use by cpF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. cpF investors who wish to attend the Meeting as observers must submit their requests through their cpF Approved Nominees within the time frame specified. if they also wish to vote, they must submit their voting instructions to their cpF Approved Nominees within the time frame specified to enable them to vote on their behalf.
* If you wish to exercise all your votes “For” or “Against”, please indicate with a “ ” within the box provided. Alternatively, please indicate the number of votes as appropriate.
dated this ______________________ day of ______________________ 2013
signature(s) of Member(s) or common seal
iMportANt: pLeAse reAd Notes to proXY ForM oN reverse pAGe.
notes to ProxY ForM: 1 A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of
the company.
2 Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3 completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy or proxies, to the Meeting.
4 A member should insert the total number of shares held. if the member has shares entered against his name in the depository register (as defined in section 130A of the companies Act, cap. 50 of singapore), he should insert that number of shares. if the member has shares registered in his name in the register of Members of the company, he should insert that number of shares. if the member has shares entered against his name in the depository register as well as shares registered in his name in the register of Members, he should insert the aggregate number of shares. if no number is inserted, the instrument of proxy will be deemed to relate to all the shares held by the member.
5 the instrument appointing a proxy or proxies must be deposited at the office of the company’s share registrar, M & c services private Limited, 112 robinson road, #05-01, singapore 068902, not less than 48 hours before the time appointed for holding the Meeting.
6 the instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.
7 Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8 A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with section 179 of the companies Act, cap. 50 of singapore.
general the company shall be entitled to reject the instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. in addition, in the case of shares entered in the depository register, the company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the depository register at least 48 hours before the time appointed for holding the Meeting, as certified by the central depository (pte) Limited to the company.
2nd fold here
1st fold here
postage will be paid
by addressee
For posting in singapore only.
caPitaLanD LiMiteD c/o M & c services private Limited
112 robinson road #05-01
singapore 068902
business rePLY service PerMit no. 04910
3rd fold here, glue along the dotted line and fold flap
CApItAlAnD lIMIteD 168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 (Reg No. 198900036N)
www.capitaland.com
This annual report is printed on environmentally friendly paper containing recycled pulp from post-consumer waste and Forest Stewardship Council (FSC) certified. The paper is also manufactured with a totally chlorine free process (TCF) and has been granted the SEC (Singapore Environment Council) Green Label certification.
capital land/CapitaLand Limited SR_12 FA.pdf
SUMMARY RepoRt
2012
FoCUS BALANCe
SCALe POSITIONED FOR GROWTH
1
CORPORaTE PROFIlE
Capitaland is one of asia’s largest real estate companies. Headquartered and listed in Singapore, the company’s businesses in real estate and real estate fund management are focused on its core markets of Singapore and China.
The company’s diversified real estate portfolio primarily includes homes, offices, shopping malls, serviced residences and mixed developments. The company also has one of the largest real estate fund management businesses with assets located in asia. Capitaland leverages its significant asset base, real estate domain knowledge, product design and development capabilities, active capital management strategies and extensive market network to develop real estate products and services in its markets.
The listed entities of the Capitaland Group include australand, CapitaMalls asia, ascott Residence Trust, CapitaCommercial Trust, CapitaMall Trust, CapitaMalls Malaysia Trust, CapitaRetail China Trust and Quill Capita Trust.
to build a world-class company, with an international presence and a strong global network, that is managed by people whose core values are respected by the business and social community to: • Create sustainable shareholder value • Deliver quality products and services • Attract and develop quality human capital
MiSSioN & ViSioN
• Our people are our strength. We build people to build for people. • We are committed to the highest standards of integrity. • We have the courage to do what is right and the will to succeed. • We add value to what we do through innovation and continuous improvement. • We are fair and reasonable in all our actions and dealings with business partners, customers and colleagues.
• We contribute to the well-being of the community.
CoRe VALUeS
Corporate Profile 1 Financial Highlights FY2012 2 5-Year Financial Summary 3 Letter to Shareholders 4
Group Businesses 15 Summary Financial Statement 17 Directors’ Remuneration 34 Shareholding Statistics 38
Notice of Annual General Meeting 39
Proxy Form 43
Request Form 45
Contents
2 3
Financial HigHligHts FY2012
Profit attributable to shareholders
s$930.3 million earnings before interest and tax
s$2.02 billion return on shareholders’ funds
6.2%
grouP Managed real estate assets
s$63.8 billion
return on total assets
5.2%
revenue under ManageMent
s$7.3 billion Market caPitalisation
s$15.7 billion
2008 2009 2010 2011 2012 (restated)
(a) incoMe stateMent (s$ million) Revenue by SBUs capitaland Residential singapore 400.2 673.8 1,284.9 774.1 854.3 capitaland china Holdings 330.3 647.0 327.2 526.6 404.1 capitaland commercial (1) 227.9 144.9 142.9 96.7 86.5 the ascott limited 441.8 393.7 407.4 377.5 381.7 capitaValue Homes (1) – – 0.1 80.3 3.9 capitaland Financial 182.2 162.2 116.2 103.3 114.1 capitaMalls asia 206.7 228.9 245.4 246.2 353.7 australand 984.3 732.5 879.8 836.4 1,131.7 Others (21.1) (25.6) (20.5) (21.5) (28.6) Total 2,752.3 2,957.4 3,383.4 3,019.6 3,301.4 Earnings Before Interest and Tax (EBIT) by SBUs capitaland Residential singapore 175.0 371.7 514.0 327.4 328.2 capitaland china Holdings 883.4 551.2 648.9 423.7 322.8 capitaland commercial (1) 395.6 (497.4) 250.2 189.6 174.2 the ascott limited 132.2 31.4 173.0 148.4 163.2 capitaValue Homes (1) – – (20.5) (12.9) (80.9) capitaland Financial 90.4 98.0 103.0 80.0 67.8 capitaMalls asia 298.6 449.1 603.4 597.0 676.2 australand 169.6 (240.8) 311.9 324.2 357.3 Others 68.7 785.8 0.6 9.2 8.6 Total 2,213.5 1,549.0 2,584.5 2,086.6 2,017.4 Net Profit attributable to Shareholders 1,260.1 1,053.0 1,425.7 1,057.3 930.3 (b) balance sheet (s$ million) investment Properties 4,848.9 5,058.5 4,732.9 7,074.6 7,969.4 Development Properties for sale and stock 3,347.2 3,590.2 5,667.1 6,905.1 7,510.1 associates and Joint Ventures 7,864.6 8,684.2 10,048.8 10,685.0 12,511.3 cash and cash Equivalents 4,228.4 8,729.7 7,190.1 6,264.5 5,497.7 Other assets 4,794.5 4,103.4 4,248.2 4,390.3 4,299.1 Total Assets 25,083.6 30,166.0 31,887.1 35,319.5 37,787.6 Equity attributable to owners of the company 10,681.7 13,408.3 14,031.9 14,901.6 15,080.4 total Borrowings 9,829.3 10,312.6 10,358.0 12,190.6 14,179.8 non-controlling interests and Other liabilities 4,572.6 6,445.1 7,497.2 8,227.3 8,527.4 Total Equities & Liabilities 25,083.6 30,166.0 31,887.1 35,319.5 37,787.6 (c) financial ratios Earnings per share (cents) 37.0 26.2 33.5 24.8 21.9
Net Tangible Assets per share (S$) 3.57 3.03 3.18 3.40 3.44
Return on Shareholders’ Funds (%) 12.2 8.7 10.5 7.3 6.2
Return on Total Assets (%) 7.9 5.5 7.7 5.9 5.2 Dividend Ordinary dividend per share (cents) 5.5 5.5 6.0 6.0 7.0 special dividend per share (cents) 1.5 5.0 – 2.0 – total dividend per share (cents) 7.0 10.5 6.0 8.0 7.0 Dividend cover (times) 4.2 2.4 5.6 3.1 3.1 Debt Equity Ratio (net of cash) (times) 0.47 0.09 0.18 0.31 0.45 Interest Cover (times) 5.50 4.54 7.63 5.72 5.50 Note: For changes in accounting policies, adoption of new and/or revised accounting standards, as well as changes in the presentation of
financial statements for the respective financial year under review, only the comparative figures for the previous year were restated to conform with the requirements arising from the said changes or adoption.
(1) With effect from 1 January 2011, the residential business in Vietnam is reported under CapitaValue Homes and no longer under CapitaLand Commercial.
5-YEaR Financial suMMaRY
4 5
lEttER tO sHaREHOlDERs
liM Ming yan President & grouP ceo
ng kee choe chairMan
dear shareholders,
capitaland registered a commendable set of financial results for the year ended 31 December 2012, posting net profit after tax and minority interests of s$930.3 million and revenue of s$3.3 billion, amidst global economic uncertainties.
in 2012, the group delivered better than expected residential sales in singapore and china, and opened two new shopping malls in singapore and seven in china. During the year, capitaland continued to invest in new projects amounting to s$4.06 billion. Between 2010 and 2012, it committed approximately s$21.0 billion of new investments, positioning the group well to ride the growth in asia. about 90% of these investments are focused in singapore and china. Despite a high level of investment activities, the group maintains a robust balance sheet through its capital recycling model and prudent capital management.
to position for the future, capitaland simplified its organisational structure in 2013 into four main businesses – capitaland singapore, capitaland china, capitaMalls asia limited (cMa) and the ascott limited (ascott). By consolidating its key residential, office and mixed development businesses into two integrated country-centric structures – capitaland singapore and capitaland china, the group will be better able to drive its growth in these two core markets. shopping mall and serviced residence businesses in all markets including singapore and china continue to be spearheaded by cMa and ascott respectively. this will allow cMa and ascott to deepen their product expertise and maximise the international network effect inherent in both businesses. the group has also streamlined its chinese name to “凯德集团” (Kai Dé Jí tuán) since the beginning of 2013. this allows the group to better leverage its brand recognition in both china and singapore.
strategic focus on singaPore and china capitaland is confident of the long-term prospects of the real estate markets in singapore and china, two markets that are underpinned by strong economic fundamentals, growing population, rising disposable income and improving consumption patterns. in both markets, capitaland has built up strong capabilities spanning the full real estate value chain from land acquisition, development, operation to capital management. the group has a strong track record and enjoys a high level of brand recognition.
as at end 2012, capitaland’s businesses in singapore accounted for s$11.3 billion or 33% of the group’s total assets (excluding treasury cash). this diversified portfolio spans across homes (31%), offices and mixed developments (19%), shopping malls (40%), serviced residences (5%), financial services (2%) and others (3%). singapore was capitaland’s most profitable market in 2012, with EBit contribution of s$893.8 million, or 44% of total group EBit.
as at end 2012, china accounted for s$13.4 billion or about 39% of the group’s overall balance sheet in terms of assets. capitaland’s china portfolio is diversified across the following sectors: homes (33%), shopping malls (35%), mixed developments (23%), serviced residences (6%) and others (3%). china is also capitaland’s second most profitable geography after singapore, with EBit contribution of s$658.4 million, or 33% of total group EBit in 2012.
between 2010 and 2012, it committed approximately s$21.0 billion of new investments, positioning the group well to ride the growth in asia
as at end 2012, capitaland’s businesses in singapore accounted for s$11.3 billion or 33% of the group’s total assets (excluding treasury cash)
s$21.0b new investments
s$11.3b assets in singapore
6 7
caPitaland singaPore capitaland singapore is capitaland’s main business unit for residential, office and mixed development businesses in singapore.
in the residential sector in singapore, market sentiments were affected by additional rounds of cooling measures introduced in October 2012 and January 2013. these measures were principally aimed to curb speculative demand. amidst these challenges, the group launched sky Habitat in Bishan and new phases of d’leedon and achieved total sales value of s$1.3 billion in 2012, comparable to a year ago. the number of units sold was 19% lower at 681 homes.
in 2012, capitaland acquired two pieces of land, increasing its residential pipeline to approximately 2,800 units. the first acquisition from ascott REit is a prime mixed development site in cairnhill, where capitaland plans to build about 270 residential units for sale. the second site acquired from the government is an adjoining plot to sky Habitat in Bishan where a 700-unit condominium is planned.
For 2013, the group plans to progressively release new phases at d’leedon and the interlace, and launch a freehold 150-unit seafront condominium project in East coast, and its second Bishan site, subject to market conditions. the group intends to expand its residential pipeline via selective government land tenders as the long-term prospects of the singapore housing market remain attractive.
in the commercial sector, office outlook is cautious over the short-term due to slower economic growth prospects. the situation is, however, mitigated by limited new supply, estimated to be less than one million square feet per annum, within the central Business District (cBD) between 2013 and 2015. the rate of market rental decline within the office sector in the cBD has eased since mid 2012 and is poised for recovery over the next 12 months. capitaland’s income generating commercial and mixed development portfolio is held under our associate, capitacommercial trust (cct). the newly acquired twenty anson contributed to cct’s earnings from March 2012. cct will focus on active portfolio management, capital recycling and yield accretive acquisitions in 2013. the group is positive about capitagreen at Market street and Westgate tower in Jurong East, as both projects are slated for completion in 2014 when new office supply is expected to be low.
as an extension of our singapore business, capitaland has made its maiden direct large scale mixed development investment in Danga Bay a2 island in iskandar, Malaysia. the group will hold a 51% stake in the project and lead in master planning and project management of the approximately 3.1 million square feet of freehold net land. the total gross development value of the project is estimated at MYR8.1 billion (s$3.2 billion) for 11 million square feet of total gross floor area. We envisage a premier waterfront residential development comprising high rise and landed homes on the island, complemented with marina, shopping mall, F&B outlets, offices and serviced residences. Development duration is projected at between 10 to 12 years.
caPitaland china capitaland china is capitaland’s main business unit for residential, office and mixed development businesses in china.
lEttER tO sHaREHOlDERs
capitaland singapore is capitaland’s main business unit for residential, office and mixed development businesses in singapore
capitaland has made its maiden direct large scale mixed development investment in danga bay a2 island in iskandar, Malaysia
in the residential market in china, the chinese government had implemented policies to moderate real estate prices. Homebuyers who initially adopted a ‘wait and see’ attitude returned to the market from april 2012, following two rounds of interest rates easing by the People’s Bank of china and price discounts from developers. in 2012, capitaland sold over 3,000 units and achieved a total sales value of RMB7.0 billion (s$1.4 billion). these figures compared favourably to the 1,466 units sold with a sales value of RMB2.9 billion (s$0.6 billion) in 2011. the loft in chengdu, Dolce Vita in guangzhou and iPark phase 1, the residential component of Raffles city shenzhen, contributed much to the success.
Revenue and earnings recognition for 2012 decreased compared to the previous year due to lower divestment gains and fewer completions handed to homebuyers. capitaland handed over 1,995 units to homebuyers in 2012, a 40% year-on-year decline compared to 2011.
During the year, capitaland secured a residential site in shanghai. the group’s development pipeline now stands at approximately 28,000 homes with a gross floor area in excess of three million square metres.
three new residential projects, namely Vermont Hills in Beijing, summit Residences in ningbo and the lakeside in Wuhan, will be launch-ready in 2013. in addition, the boutique apartments at Raffles city chengdu, together with subsequent phases from existing projects such as the loft, Dolce Vita and imperial Bay will also be planned for release. collectively, about 4,000 housing units are scheduled for launch with an estimated value of RMB6.0 billion. separately, capitaland is on schedule to hand over some 3,000 residential units from Beaufort in Beijing, imperial Bay, Dolce Vita and the loft to homebuyers in 2013.
in 2012, capitaland sold over 3,000 units and achieved a total sales value of rMb7.0 billion
RMB7.0b total sales Value
d’leedon SINGAPORE
tWenty anson SINGAPORE
8 9
s$12.0b Portfolio Value
the group’s current portfolio of eight Raffles city projects in china boasts a portfolio value of s$12.0 billion when completed, and total floor area of over 2.9 million square metres of prime commercial space. these eight Raffles city mixed developments span across Beijing, chengdu, ningbo, Hangzhou, shenzhen, chongqing and shanghai.
Of the eight Raffles city projects, the ones in shanghai, Beijing and ningbo are fully operational, chengdu is slated to be fully operational at the end of 2013, while the remaining four in Hangzhou, shenzhen, changning in shanghai and chongqing, are in various stages of development. the Raffles city developments in shanghai and Beijing are performing well, with occupancy exceeding 90%. net property yield on cost for Raffles city shanghai and Beijing stood at 15.8% and 11% respectively at the end of 2012. Raffles city chengdu and Raffles city ningbo commenced mall operations in late september 2012. committed leasing rates of the shopping mall at both chengdu and ningbo are in excess of 80%. On the back of improved net Property income (nPi) generated for the Raffles city portfolio, capitaland registered higher revaluation gains, which mitigated the lower divestment gains from the residential sector.
lEttER tO sHaREHOlDERs
the group’s current portfolio of eight raffles city projects in china boasts a portfolio value of s$12.0 billion when completed
caPitaMalls asia cMa is capitaland’s business unit for the shopping mall business. it is listed on the singapore stock Exchange and Hong Kong stock Exchange.
at the end of 2012, our shopping mall portfolio comprised 101 malls valued at s$31.7 billion. the financial performance of the core retail business improved on its rental income, property and fund management fees, and better leasing commissions, as well as higher divestment gains from the recycling of capitaMall tianfu and capitaMall Meilicheng into a private equity fund. this was, however, partially offset by lower fair value gains from its portfolio revaluation in china.
the singapore shopping mall portfolio comprised 19 malls valued at s$14.8 billion. Of the 19 malls, 15 malls are held by our associate capitaMall trust (cMt). the remaining four malls, iOn Orchard, the star Vista, Bedok Mall and Westgate, are held directly by cMa. in 2012, our malls in singapore registered tenants’ sales growth of 2% while shopper traffic remained stable. core operational earnings from the singapore portfolio were lifted by contributions from the star Vista and Jcube, the two new malls that became operational, as well as Bugis+ and the atrium@Orchard, the two malls that successfully underwent asset enhancement in 2012. Divestment gains from the sale of Hougang Plaza by cMt also boosted the bottomline.
at the end of 2012, our shopping mall portfolio comprised 101 malls valued at s$31.7 billion
raffles city beiJing CHINA
caPitaMall Meilicheng chengdu CHINA
10 11
in china, cMa opened seven new malls in 2012, lifting its total number of operational malls to 49 out of its total portfolio of 60. this china shopping mall portfolio is valued at s$14.0 billion. in terms of net asset value, 70% of cMa’s retail portfolio has turned operational and is generating rental cash flow. the group’s shopping malls in china performed well in 2012, with tenants’ sales and shopper traffic at cMa’s shopping malls experiencing growth of 9.8% and 7% respectively, compared to 13.2% and 7.5% recorded for 2011. nPi grew 16.9% and the average occupancy rate of the shopping malls with at least two years’ operating history was 96.7%. in 2012, cMa’s malls generated gross yield on cost and nPi yield on cost of 12.6% and 7.3% respectively, up from 11.8% and 6.8% in 2011.
in Malaysia, cMa’s portfolio comprised five operational malls and one under development, valued at s$1.5 billion. Of the operational malls, four are held via our listed associate, capitaMalls Malaysia trust (cMMt), while Queensbay Mall in Penang is held by cMa. cMa also participated in its first retail joint development project in Klang Valley, Malaysia with sime Darby. the s$204.5 million (MYR500.0 million) project is expected to offer some 635,000 square feet of retail space when completed in 2016. the group’s Malaysian shopping malls business was lifted by full year contribution from East coast Mall, Kuantan and an overall 7.8% improvement in nPi on a same mall basis. the Malaysian mall portfolio experienced shopper traffic growth of 1.5% and a high average occupancy rate of 96.6%.
in Japan, earnings were boosted by maiden contribution from Olinas Mall in tokyo and contributions from our increased stakes in three Japanese shopping malls.
in 2013, cMa’s portfolio will benefit from the full year contributions from malls opened in 2012 including the star Vista, Jcube, Bugis+ and the atrium@Orchard. the group plans to open six malls in 2013: Westgate and Bedok Mall in singapore; capitaMall tianfu, capitaMall Meilicheng and capitaMall Jinniu phase two in china; and capitaMall Mangalore in india.
ascott ascott is the largest international owner and manager of serviced residences with more than 31,000 apartment units in asia and Europe.
in 2012, for its investment portfolio, ascott acquired (together with capitaland singapore) somerset grand cairnhill for redevelopment into a new serviced residence cum residential development. it also acquired the 230-unit the cavendish london with a view to transform it into a premier ascott branded serviced residence. at the same time, ascott sold two premier assets, ascott Raffles Place singapore and ascott guangzhou, to its associate ascott REit. ascott also invested about s$20.0 million to refurbish four properties in 2012. separately, ascott REit acquired 60% interest in citadines Kyoto and the 166-unit Madison Hamburg from third parties.
Operationally, revenue per available unit (RevPau) per day improved 3% from s$115 to s$119 across all serviced residences owned, leased and managed by ascott. the group’s serviced residence portfolio in china, in particular, had a robust year with RevPau growth of 15% year-on-year. the group’s European serviced residence portfolio performed well, lifted by maiden contribution from
lEttER tO sHaREHOlDERs
ascott is the largest international owner and manager of serviced residences with more than 31,000 apartment units in asia and europe
the cavendish Hotel, which was acquired in 2012, and a fairly resilient uK and French market. the group’s serviced residence portfolio in Japan also showed marked improvement with RevPau increase of 17% year-on-year to s$133 per available unit per day.
ascott secured new management contracts on 14 properties with approximately 2,800 apartments. in china, its main growth market, ascott further cemented its market leadership position by expanding the serviced residence portfolio for owned and managed properties to over 8,200 apartment units as at end 2012. Overall management and service fee income improved by 5% year-on-year to s$129.7 million.
in the coming year, the group will continue to improve the quality of its serviced residence portfolio through asset enhancement and selective acquisitions. the group will also strengthen its operating performance via active yield management, productivity increase and tighter cost controls. ten properties, comprising some 1,600 apartment units will commence operations in china and indonesia in 2013.
regional investMents capitaland’s investment in australand, which made up the bulk of our regional investments, accounted for 16% of the group’s assets and 18% of EBit at end 2012. australand’s operations posted a 7.9% year-on-year improvement
ascott secured new management contracts on 14 properties with approximately 2,800 apartments
the cavendish london UK
31,000 apartment units
the group’s shopping malls in china performed well in 2012, with tenants’ sales and shopper traffic at cMa’s shopping malls experiencing growth of 9.8% and 7% respectively, compared to 13.2% and 7.5% recorded for 2011
capitaland’s investment in australand, which made up the bulk of our regional investments, accounted for 16% of the group’s assets and 18% of ebit at end 2012
12 13
in operating EBit, lifted by stronger results from the investment Property and Residential divisions. the group is currently undertaking a strategic review of its 59.3% stake in australand with a view to optimise shareholder value.
the group has reviewed its current direct investments in Japan and Vietnam, and will maintain its presence in both markets as this is believed to be the optimal approach to maximise value for the investments there. capitaland will continue to review its other regional investments in uK, india, and the gulf cooperation council countries outside the retail and serviced residence space, with the aim to rationalise and optimise its capital productivity in the coming year.
strategic caPital ManageMent capitaland maintains a healthy balance sheet with a net debt equity ratio of 0.45 and a cash position of s$5.5 billion through prudent capital management and active capital recycling. less than 8.4% of the group’s total debt is due within one year and its average debt maturity profile remains stable at 3.7 years.
the group taps diversified funding sources including banks, capital markets and private equity capital. in september 2012, capitaland successfully raised its first usD bond issue with strong support from about 200 accounts.
lEttER tO sHaREHOlDERs
the group also successfully set up two private equity funds – the us$1.0 billion capitaMalls china Development Fund iii, and the us$215.0 million capitaland china Value Housing Fund in 2012.
the group’s capital recycling model and prudent capital management will continue to provide a high level of financial flexibility for the group to seek out accretive investments and to manage an uncertain business environment.
develoPing huMan caPital the group has an integrated human capital strategy to recruit, develop, promote and motivate employees. Based on our philosophy of “Building People”, capitaland actively identifies talents internally and externally to build its pipeline for succession planning and bench strength. capitaland continues to provide training and development opportunities through programmes conducted by capitaland institute of Management and Business (cliMB) and ascott centre for Excellence. For senior management who show potential to take up higher office, capitaland offers opportunities for management courses to be pursued at Harvard, stanford, tsinghua and Beijing university. a strong pool of management talents, well-trained, tested and equipped, has been groomed and developed to steer the group to greater heights.
corPorate social resPonsibility capitaland has always been committed to being responsible in the communities it operates within. Our corporate social responsibility efforts are in the areas of corporate philanthropy, volunteerism, community and the environment. Every year, capitaland allocates up to 0.5% of its net profit to capitaland Hope Foundation, the philanthropic arm of capitaland, to support programmes for shelter, education and healthcare needs of underprivileged children in the communities where capitaland operates.
We strive to be an environmentally-sustainable real estate developer and aim to be at the forefront of the industry in terms of green buildings and stakeholder engagement. in 2012, we obtained 20 green building ratings with five projects clinching the prestigious green Mark Platinum award given by singapore’s Building and construction authority. We also engage our tenants, shoppers, residents, service-providers and the wider community through our Building a greener Future Programme.
board We welcomed tan sri amirsham Bin a aziz and Mr stephen lee who bring with them extensive corporate and business expertise to the Board. We look forward to their counsel and contributions in the years ahead.
our corporate social responsibility efforts are in the areas of corporate philanthropy, volunteerism, community and the environment
capitaland actively identifies talents internally and externally to build its pipeline for succession planning and bench strength
the group also successfully set up two private equity funds – the us$1.0 billion capitaMalls china development fund iii, and the us$215.0 million capitaland china value housing fund in 2012
the inauguration of cliMb CHINA
capitaland maintains a healthy balance sheet with a net debt equity ratio of 0.45 and a cash position of s$5.5 billion through prudent capital management and active capital recycling
s$5.5b cash Position
14 15
Mr liew Mun leong who stepped down as President and chief Executive Officer of capitaland limited on 1 January 2013 and was succeeded by Mr lim Ming Yan, will not be seeking re-election as Director at the forthcoming annual general Meeting. Mr liew has led the group with distinction in the last 12 years, growing it from strength to strength and steering it to chart new frontiers in the real estate industry. On behalf of the Board and staff, we extend to Mr liew our deep appreciation for all his contributions to the group and wish him well in his future endeavours.
going forWard looking into 2013, we expect asia to lead world economic growth, with singapore and china playing key roles in the region. singapore is forecasted to post gDP growth of between 1% and 3%, while china’s growth is projected to be about 7.5%.
capitaland will continue to build on its leadership position in the multi-sector real estate businesses to drive its growth strategy. With our strong balance sheet and financial capacity, we remain confident to weather market volatility and are ready for selective acquisitions.
Despite possible economic headwinds, we are confident that the group, led by strong management and armed with a robust balance sheet, will be able to continue growing its businesses into the future.
On behalf of the Board and management, we wish to thank all staff, shareholders, business partners and associates for their continued commitment and support for the group.
ng kee choe liM Ming yan chairMan President & grouP ceo
28 february 2013
lEttER tO sHaREHOlDERs
capitaland will continue to build on its leadership position in the multi-sector real estate businesses to drive its growth strategy
organisational realignMent and siMPlification On 3 January 2013, capitaland realigned and simplified its organisational structure into four main businesses to sharpen its focus on key markets and to realise its growth potential. the four main businesses are capitaland singapore, capitaland china, capitaMalls asia (cMa) and the ascott limited (ascott).
the following is a broad overview of the four businesses:
1. caPitaland singaPore capitaland singapore, a wholly-owned subsidiary
of capitaland limited, is one of singapore’s leading developers and owners of homes, office and mixed development projects. it comprises the businesses of capitaland Residential singapore, the singapore businesses under capitaland commercial, and capitaland’s residential, office and mixed development businesses in Malaysia.
capitaland singapore is the sponsor and manager of two commercial real estate investment trusts, capitacommercial trust and Quill capita trust, separately listed in singapore and Malaysia.
capitaland singapore invests, develops and manages homes, offices and mixed developments in singapore and Malaysia.
2. caPitaland china capitaland china, the leading foreign real estate
developer in china, is a wholly-owned subsidiary of capitaland limited. it comprises the businesses of capitaland china Holdings and the residential businesses under capitaValue Homes limited in china.
its core business ranges from homes, commercial properties to mixed developments and financial services. With a portfolio of about 48,000 units of residences, 16 commercial projects and 8 Raffles city mixed developments in china, it also manages six real estate funds in china.
certified as a china Well-Known trademark, capitaland china is dedicated to provide quality products and services to customers.
3. caPitaMalls asia cMa is one of the largest listed shopping mall
developers, owners and managers in asia by total property value of assets and geographic reach. cMa has an integrated shopping mall business model encompassing retail real estate investment, development, mall operations, asset management and fund management capabilities. it has interests in and manages a pan-asian portfolio of 101 shopping malls across 52 cities in the five countries of singapore, china, Malaysia, Japan and india, with a total property value of approximately s$31.7 billion and a total gFa of approximately 92.5 million square feet as at 31 December 2012.
4. ascott ascott is the world’s largest international serviced
residence owner-operator with more than 22,000 operating serviced residence units in key cities of asia Pacific, Europe and the gulf region, as well as over 9,000 units which are under development, making a total of more than 31,000 units in over 200 properties.
in addition, there are two areas which fall under capitaland group Headquarters, namely Financial Products & services and Regional investments.
capitaland’s Financial Products & services unit oversees the group’s real estate financial products and services. it has an established track record in originating, structuring, distributing and managing real estate financial products. its areas of focus include originating, structuring and managing private real estate funds, listed real estate investment trusts (REits) and structuring credit enhancements for financing arrangements in relation to real estate assets.
the Regional investments unit manages regional real estate investments that fall outside the four main business units. these include capitaland Vietnam, australand, surbana, and storHub, as well as investments in Japan, india, united Kingdom and gulf cooperation council.
gROuP BusinEssEs
16 17
suMMaRY Financial statEMEnt the summary financial statement as set out on pages 18 to 33 contains only a summary of the information in the directors’ report and financial statements of the company’s annual report. it does not contain sufficient information to allow for a full understanding of the results and the state of affairs of the company and the group.
for further information, the full financial statements, the auditors’ report on those statements and the directors’ report in the annual report should be consulted. shareholders may request for a copy of the annual report at no cost by using the request form at the end of this summary financial statement.
Summary Directors’ Report 18 Independent Auditors’ Report on the Summary Financial Statement 27
Balance Sheets 28 Income Statements 29 Statements of Comprehensive Income 30
Notes to the Summary Financial Statement 31
contents
gROuP BusinEssEs
capitaland singapore and capitaland china’s businesses include residential, commercial and mixed developments.
the group’s regional investments in capitaland Vietnam, australand, surbana, storHub and the overseas markets of Japan, india, gcc and united Kingdom, as well as real estate financial products and services, come under the group Headquarters.
caPitaland singaPore
shoPPing Malls
serviced residences
caPitaland china
18 19
suMMaRY DiREctORs’ REPORt directors the directors in office at the date of this report are as follows:
ng Kee choe Peter seah lim Huat liew Mun leong lim Ming Yan (appointed on 1 January 2013) James Koh cher siang arfat Pannir selvam Professor Kenneth stuart courtis John Powell Morschel simon claude israel Euleen goh Yiu Kiang tan sri amirsham Bin a aziz (appointed on 30 July 2012) stephen lee ching Yen (appointed on 1 January 2013)
PrinciPal activities the principal activities of the company during the financial year are those relating to investment holding and consultancy services as well as the corporate headquarters which gives direction, provides management support services and integrates the activities of its subsidiaries.
the principal activities of the significant subsidiaries are those relating to investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services as well as management of serviced residences.
there have been no significant changes in the nature of these principal activities during the financial year. directors’ interests in shares or debentures Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures or options of the company or of related corporations either at the beginning of the financial year (or date of appointment, if later) or at the end of the financial year.
according to the register kept by the company for the purposes of section 164 of the companies act, chapter 50, particulars of interests of directors who held office at the end of the financial year in shares, debentures, options and awards in the company and its related corporations are as follows:
holdings in the name of the director, spouse and/or infant children
at beginning of the year/ date of appointment
at end of the year
the company
Ordinary shares ng Kee choe 10,000 23,860 Peter seah lim Huat 294,807 329,413 liew Mun leong 3,571,915 2,791,563 James Koh cher siang 253,999 281,610 arfat Pannir selvam 201,039 231,014 Professor Kenneth stuart courtis 133,688 160,193 John Powell Morschel 2,684 23,837 simon claude israel 50,000 70,261 Euleen goh Yiu Kiang 5,572 9,289
directors’ interests in shares or debentures (cont’d)
holdings in the name of the director, spouse and/or infant children
at beginning of the year/ date of appointment
at end of the year
the company (cont’d)
Contingent award of Performance shares1 to be delivered after 2011 liew Mun leong (370,258 shares) 0 to 740,5163 –¶ ¶ No share was released under the 2009 award
Contingent award of Performance shares1 to be delivered after 2012 liew Mun leong (381,039 shares) 0 to 762,0783 0 to 762,0783
Contingent award of Performance shares1 to be delivered after 2013 liew Mun leong (359,200 shares) 0 to 718,4003 0 to 718,4003
Contingent award of Performance shares1 to be delivered after 2014 liew Mun leong (359,000 shares) – 0 to 628,2503
Unvested Restricted shares2 to be delivered after 2009 liew Mun leong 85,9806 –
Unvested Restricted shares2 to be delivered after 2010 Peter seah lim Huat 8,0545 – liew Mun leong 151,8967 75,9496
James Koh cher siang 6,2315 – arfat Pannir selvam 6,7375 – Professor Kenneth stuart courtis 4,7115 – John Powell Morschel 2,6855 –
Unvested Restricted shares2 to be delivered after 2011 liew Mun leong 0 to 295,5004 115,4427
Contingent award of Restricted shares2 to be delivered after 2012 liew Mun leong (197,000 shares) – 0 to 295,5004
$1.3 billion convertible bonds 3.125% due 2018 (Aggregate principal amount of bonds which remains outstanding is $1.05 billion) liew Mun leong $1,500,000 $3,500,000
20 21
directors’ interests in shares or debentures (cont’d)
holdings in the name of the director, spouse and/or infant children
at beginning of the year/ date of appointment
at end of the year
related corporations capitaMalls asia limited
Ordinary shares ng Kee choe 130,000 130,000 Peter seah lim Huat 29,000 29,000 liew Mun leong 456,540 516,859 James Koh cher siang 44,400 45,800 arfat Pannir selvam 60,400 89,397 tan sri amirsham Bin a aziz 6,139 6,139
Unvested Restricted shares2 to be delivered after 2010 liew Mun leong 14,5405 – James Koh cher siang 1,4005 – arfat Pannir selvam 6,4005 –
capitaMalls asia treasury limited liew Mun leong – $75 million 1.00% Bonds due 2012 $1,000,000 – – $125 million 2.15% Bonds due 2014 $2,000,000 $2,000,000
the ascott capital Pte ltd liew Mun leong – $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 – – $50 million 5.15% Fixed Rate Notes due 2014 $1,000,000 $1,000,000 Euleen goh Yiu Kiang – $200 million 4.38% Fixed Rate Notes due 2012 $1,000,000 –
capitaland treasury limited Euleen goh Yiu Kiang – $350 million 4.30% Fixed Rate Notes due 2020 $250,000 $250,000
Footnotes: 1 Performance shares are shares under awards pursuant to the CapitaLand Performance Share Plan 2000 and CapitaLand Performance
Share Plan 2010 (collectively referred to as “CapitaLand Performance Share Plan”). 2 Restricted shares are shares under awards pursuant to the CapitaLand Restricted Stock Plan 2000 and CapitaLand Restricted Share Plan
2010 (collectively referred to as “CapitaLand Restricted Stock/Share Plan”) or CMA Restricted Stock Plan. 3 The final number of shares released will depend on the achievement of pre-determined targets over a three-year performance period. No
share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
4 The final number of shares released will depend on the achievement of pre-determined targets at the end of a one-year performance period and the release will be over a vesting period of two to three years. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. The awards granted to non-executive directors in 2010 are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions.
5 Being the unvested half of the award. 6 Being the unvested one-third of the award. 7 Being the unvested two-thirds of the award.
directors’ interests in shares or debentures (cont’d) Mr liew Mun leong’s shareholding in the company had been reduced from 2,791,563 shares as at 31 December 2012 to 1,791,563 shares as at 21 January 2013.
save as disclosed above, there was no change in any of the above-mentioned directors’ interests in the company between the end of the financial year and 21 January 2013.
directors’ interests in contracts since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the company or a related corporation with the director, or with a firm of which he is a member or with a company in which he has a substantial financial interest.
Directors’ emoluments are disclosed in “Directors’ Remuneration”.
arrangeMents to enable directors to acquire shares and debentures Except as disclosed under the “Directors’ interests in shares or Debentures” and “share Plans” sections of this report, neither at the end of nor at any time during the financial year was the company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the company to acquire benefits by means of the acquisition of shares in or debentures of the company or any other body corporate.
share Plans at the Extraordinary general Meeting held on 16 april 2010, shareholders approved a new capitaland Performance share Plan 2010 (“PsP 2010”) and capitaland Restricted share Plan 2010 (“RsP 2010”). these plans replaced the capitaland Performance share Plan 2000 and capitaland Restricted stock Plan 2000 which were terminated. the company did not extend the duration of, or replace, the existing capitaland share Option Plan. all awards granted under the previous share plans prior to its termination will continue to be valid and be subject to the terms and conditions of the plans. the first grant of award under the new share plans was made in March 2011. the duration of each share plan is 10 years commencing on 16 april 2010.
(a) options exercised the company ceased to grant options under the capitaland share Option Plan since 2007. During the financial year,
there were new ordinary shares issued for cash in the capital of the company pursuant to the exercise of options granted:
name of company exercise Price
(per share) number of
shares issued
capitaland limited $0.30 to $3.18 836,913
save as disclosed above, there were no shares issued during the financial year by virtue of the exercise of options to take up unissued shares of the company and its subsidiary.
(b) unissued shares under options at the end of the financial year, there were the following unissued ordinary shares of the company under options:
number of holders expiry date
exercise Price (per share)
$
number of unissued shares
under options
the company group Executives 9 28/02/2013 0.30 64,383
4 29/08/2013 0.30 7,846 45 27/02/2014 0.50 367,232
5 27/08/2014 0.85 15,120 133 25/02/2015 1.72 1,237,820
18 26/08/2015 2.15 72,290 353 24/02/2016 3.18 5,632,884
1 19/06/2016 3.65 87,350 47 01/09/2016 4.09 621,650
total 8,106,575
suMMaRY DiREctORs’ REPORt
22 23
share Plans (cont’d) (b) unissued shares under options (cont’d) the aggregate number of options granted since the commencement of the capitaland share Option Plan to the end
of the financial year is as follows:
Participants
aggregate options granted since the commencement
of the capitaland share option Plan
aggregate options
exercised
aggregate options lapsed/
cancelled
aggregate options
outstanding
Directors of the company: Peter seah lim Huat 494,460 (494,460) – – liew Mun leong 6,257,200 (6,257,200) – – James Koh cher siang 134,800 (134,800) – – arfat Pannir selvam 100,880 (100,880) – –
6,987,340 (6,987,340) – –
non-Executive Directors of subsidiaries (including former directors of the company) 11,636,530 (10,880,120) (756,410 ) – group Executives (excluding liew Mun leong) 138,155,955 (95,514,418) (34,534,962) 8,106,575 Parent group Executives and others 2,662,482 (2,232,834) (429,648) – total 159,442,307 (115,614,712) (35,721,020) 8,106,575
save as disclosed above, there were no unissued shares of the company or its subsidiary under options as at the end of the financial year.
(c) awards under the capitaland Performance share Plan During the financial year, the ERcc of the company has granted awards which are conditional on targets set for a
performance period, currently prescribed to be a three-year performance period. a specified number of shares will only be released by the ERcc to the recipient at the end of the qualifying performance period, provided the threshold targets are achieved. an initial number of shares (“baseline award”) is allocated equally according to the following performance conditions:
• Group’s Absolute Total Shareholder Return measured as a multiple of Cost of Equity; and • Group’s Relative Total Shareholder Return measured as the outperformance against the MSCI Asia Pacific
ex-Japan Real Estate index.
the above performance measures are selected as key measurements of wealth creation for shareholders. the final number of shares to be released will depend on the achievement of pre-determined targets over a three-year performance period. no share will be released if the threshold targets are not met at the end of the performance period. conversely, if superior targets are met, more shares than the baseline award could be released. For awards granted prior to 2012, the maximum is 200% of the baseline award. From 2012, the maximum will be 175% of the baseline award.
Details of the movement in the awards of the company during the year were as follows:
<-- Movements during the year --> balance as at
1 January 2012 granted lapsed/
cancelled balance as at
31 december 2012
year of award no. of holders no. of shares no. of shares no. of shares no. of holders no. of shares
2009 69 3,281,727 – (3,281,727) – – 2010 51 2,847,827 – (69,811) 49 2,778,016 2011 62 3,139,500 – (116,574) 59 3,022,926 2012 – – 3,488,000 (90,000) 63 3,398,000
9,269,054 3,488,000 (3,558,112) 9,198,942
share Plans (cont’d) (d) awards under the capitaland restricted stock/share Plan During the financial year, the ERcc of the company has granted awards which are conditional on targets set for a
performance period, currently prescribed to be a one-year performance period. a specified number of shares will only be released by the ERcc to the recipients at the end of the qualifying performance period, provided the threshold targets are achieved. an initial number of shares (“baseline award”) is allocated equally according to the following performance conditions:
• Group’s Earnings Before Interest and Tax; and • Group’s Return on Total Assets.
the above performance measures are selected as they are the key drivers of shareholder value and are aligned to the company’s business objectives. the final number of shares to be released will depend on the achievement of pre- determined targets at the end of a one-year performance period. no share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award could be delivered up to a maximum of 150% of the baseline award. Once the final number of shares has been determined, it will be released over a vesting period of three years. Recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost.
the ERcc of the company has instituted a set of share ownership guidelines for senior management who receives shares under the capitaland Restricted stock/share Plan. under these guidelines, members of the senior management team are required to retain a portion of the total number of capitaland shares acquired through the capitaland Restricted stock/share Plan which will vary according to their job grades and base salaries.
the awards granted to non-executive directors prior to 2010 have a vesting period of two years. in 2010, the awards granted are time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, the awards to non-executive directors form part of the directors’ fees and will be an outright grant with no performance and vesting conditions. From 2012, cash-settled award plan for non-managerial grade employees in singapore, Malaysia and Japan has been replaced by a Restricted cash Plan (“RcP”). under RcP, a cash bonus is distributed to eligible employee at the end of each financial year based on the group’s financial performance and achievement of performance targets, as well as individual performance.
Details of the movement in the awards by the company during the year were as follows:
<----------- Movements during the year -----------> balance as at
1 January 2012 granted released* lapsed/
cancelled balance as at
31 december 2012
year of award no. of holders no. of shares no. of shares no. of shares no. of shares no. of holders no. of shares
2009 1,313 2,773,682 – (2,708,531) (65,151) – – 2010 815 4,038,491 – (2,014,638) (173,731) 718 1,850,122 2011 952 6,250,405 – (1,783,947) (1,082,124 ) 857 3,384,334 2012 – – 7,635,290 (151,620) (404,506) 682 7,079,164
13,062,578 7,635,290 (6,658,736) (1,725,512) 12,313,620 * The number of shares released during the year was 6,658,736, of which 846,520 were cash-settled.
as at 31 December 2012, the number of shares comprised in awards granted under the capitaland Restricted stock/ share Plan is as follows:
equity-settled cash-settled total
Final number of shares has not been determined (baseline award)# 6,820,334 258,830 7,079,164 Final number of shares determined but not released 4,647,933 586,523 5,234,456
11,468,267 845,353 12,313,620
# The final number of shares released could range from 0% to 150% of the baseline award.
suMMaRY DiREctORs’ REPORt
24 25
share Plans (cont’d) (e) awards under the capitaMalls asia limited (“cMa”) share Plans the cMa Performance share Plan and the cMa Restricted stock Plan (collectively referred to as the “cMa share
Plans”) were approved and adopted by the shareholders’ of cMa at an Extraordinary general Meeting held on 30 October 2009.
under the cMa share Plans, awards are granted to eligible participants who will have the right to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the company achieving prescribed performance target(s).
(i) awards under the cMa Performance share Plan the cMa Performance share Plan has no vesting periods beyond the performance achievement periods and
applies only to key executives.
Details of the movement in the awards by cMa during the year were as follows:
<-- Movements during the year --> balance as at
1 January 2012 granted lapsed/
cancelled balance as at
31 december 2012
year of award no. of holders no. of shares no. of shares no. of shares no. of holders no. of shares
2010 20 871,700 – (95,000) 18 776,700 2011 29 1,286,700 – (136,000) 26 1,150,700 2012 – – 1,769,000 (49,000) 29 1,720,000
2,158,400 1,769,000 (280,000) 3,647,400 (ii) awards under the cMa restricted stock Plan under the cMa Restricted stock Plan, awards granted to eligible participants vest only after the satisfactory
completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-related awards). Performance-related awards differ from awards granted under the cMa Performance share Plan in that an extended vesting period is imposed beyond the performance target completion date.
cMa has instituted a set of share ownership guidelines for senior management who receive shares under the cMa Restricted stock Plan. under these guidelines, members of the senior management team are required to retain a portion of the total number of cMa shares acquired through the cMa Restricted stock Plan which will vary according to their job grades and base salaries. the 2010 award to non-executive directors was time-based with no performance conditions and will be released over a vesting period of two years. With effect from 2011, no share awards were granted under the cMa Restricted stock Plan to non-executive directors.
share Plans (cont’d) (e) awards under the capitaMalls asia limited (“cMa”) share Plans (cont’d) (ii) awards under the cMa restricted stock Plan (cont’d) Details of the movement in the awards by cMa during the year were as follows:
<----------- Movements during the year -----------> balance as at
1 January 2012 granted released* lapsed/
cancelled balance as at
31 december 2012
year of award no. of holders no. of shares no. of shares no. of shares no. of shares no. of holders no. of shares
2010 716 2,778,529 – (1,390,644) (155,546) 667 1,232,339 2011 934 5,208,345 1,056,139 (2,028,091) (459,085) 847 3,777,308 2012 – – 6,328,400 – (403,610) 701 5,924,790
7,986,874 7,384,539 (3,418,735) (1,018,241) 10,934,437
* The number of shares released during the year was 3,418,735, of which 995,898 were cash-settled.
as at 31 December 2012, the number of shares comprised in awards granted under the cMa Restricted stock Plan is as follows:
equity-settled cash-settled total
Final number of shares has not been determined (baseline award)# 4,931,990 992,800 5,924,790 Final number of shares determined but not released 3,527,305 1,482,342 5,009,647
8,459,295 2,475,142 10,934,437
# The final number of shares released could range from 0% to 150% of the baseline award.
(f) awards under the australand share Plans (i) australand Performance rights Plan the establishment of the australand Performance Rights Plan was approved by australand’s shareholders at
the 2007 annual general Meeting (“agM”).
the number of securities outstanding under the australand Performance Rights Plan as at the end of the year is summarised below:
<--------------- Movements during the year --------------->
year of award balance as at
1 January 2012 granted exercised lapsed/
forfeited balance as at
31 december 2012
2007 111,620 – (23,866) – 87,754 2008 35,673 – (5,420) – 30,253 2009 1,564,492 – (228,611) – 1,335,881 2010 1,442,256 – – (394,211) 1,048,045 2011 1,839,937 – – (39,900) 1,800,037 2012 – 2,061,039 – (39,100 ) 2,021,939
4,993,978 2,061,039 (257,897) (473,211) 6,323,909
suMMaRY DiREctORs’ REPORt
26 27
share Plans (cont’d) (f) awards under the australand share Plans (cont’d) (ii) australand tax exempt employee security Plan the australand tax Exempt Employee security Plan in which tax exempt stapled securities may be issued by the
company to employees for no cash consideration was approved by australand’s shareholders at the 2007 agM. all australian resident permanent (full-time and part-time) employees (excluding directors and participants in the australand Performance Rights Plan) who have been continuously employed by australand for a period of at least nine months as at the invitation date and are still employees as at the acquisition date (the date australand acquires the securities) are eligible to participate in the plan. Employees may elect not to participate in the plan.
the plan provides up to a$1,000 of australand stapled securities (tax-free) to eligible employees annually for no cash consideration.
a three-year restriction period on selling, transferring or otherwise dealing with the securities applies, unless the employee leaves australand. under the plan, employees will receive the same benefits as all other security holders.
the number of securities issued to participants in the plan is the offer amount divided by the weighted average price at which australand’s stapled securities are traded on the australian stock Exchange during the week up to and including the acquisition date (rounded down to the nearest whole number of stapled securities).
no securities were issued under the australand tax Exempt Employee security Plan during the year. in 2011, 108,016 securities were issued at the weighted average market price of a$2.90 per security.
audit coMMittee the audit committee members at the date of this report are Ms Euleen goh Yiu Kiang (chairman), Mr James Koh cher siang, Mrs arfat Pannir selvam and tan sri amirsham Bin a aziz.
other circuMstances affecting the financial stateMents in the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen during the financial year or in the interval between the end of the financial year and the date of this report which would substantially affect the results of the operations of the group for the financial year in which this report is made or render any item in the financial statements of the group and the company for the current financial year misleading, and/or affect the ability of the group and the company in meeting the obligations as and when they fall due.
the summary Financial statement set out on pages 18 to 33 was approved by the Board of Directors and was signed on its behalf by:
ng kee choe director
liM Ming yan director
singapore 28 february 2013
suMMaRY DiREctORs’ REPORt
the accompanying summary Financial statement of capitaland limited (the company) and its subsidiaries (the group), set out on pages 28 to 33, which comprise the balance sheets of the group and the company as at 31 December 2012, the income statements and the statements of comprehensive income of the group and the company for the year then ended, and related notes, are derived from the audited financial statements of the company and its subsidiaries for the year then ended. We expressed an unmodified audit opinion on those financial statements in our report dated 28 February 2013.
the summary Financial statement do not contain all the disclosures required by the singapore Financial Reporting standards. Reading the summary Financial statement, therefore, is not a substitute for reading the audited financial statements of the company and its subsidiaries.
Management’s responsibility for the Summary Financial Statement Management is responsible for the preparation of a summary of the audited financial statements in accordance with the requirements of section 203a of the singapore companies act, chapter 50 (the act). in preparing the summary Financial statement, section 203a of the act requires that the summary Financial statement be derived from the annual financial statements and the Directors’ Report for the year ended 31 December 2012 and be in such form and contain such information as may be specified by regulations made thereunder applicable to summary Financial statement.
Auditors’ responsibility Our responsibility is to express an opinion on the summary Financial statement based on our procedures, which were conducted in accordance with singapore standard on auditing 810 Engagements to Report on Summary Financial Statements.
Opinion in our opinion, the accompanying summary Financial statement are consistent, in all material respects, with the audited financial statements and the Directors’ Report of the company and its subsidiaries for the year ended 31 December 2012 from which they are derived and comply with the requirements of section 203a of the act and the regulations made thereunder applicable to summary Financial statement.
kPMg llP Public accountants and certified Public accountants
singapore 28 february 2013
inDEPEnDEnt auDitORs’ REPORt On tHE suMMaRY Financial statEMEnt to the members of capitaland limited
28 29
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
non-current assets Property, plant and equipment 1,263,615 1,075,505 14,400 12,830 intangible assets 462,093 458,722 147 147 investment properties 7,969,402 7,074,617 – – subsidiaries – – 10,546,914 10,605,809 associates 9,692,297 9,290,737 – – Joint ventures 2,818,985 1,394,263 – – Deferred tax assets 91,595 95,671 2,589 2,884 Other non-current assets 795,713 795,955 – –
23,093,700 20,185,470 10,564,050 10,621,670 current assets Development properties for sale and stocks 7,510,093 6,905,124 – – trade and other receivables 1,484,753 1,769,374 2,447,221 2,590,302 Other current assets 201,370 195,000 – – cash and cash equivalents 5,497,693 6,264,473 442,650 326,539
14,693,909 15,133,971 2,889,871 2,916,841 less: current liabilities trade and other payables 2,359,598 2,270,488 76,694 70,834 short term bank borrowings 765,826 426,011 – – current portion of debt securities 16,346 434,228 – – current tax payable 432,489 441,075 7,560 7,560
3,574,259 3,571,802 84,254 78,394 net current assets 11,119,650 11,562,169 2,805,617 2,838,447
less: non-current liabilities long term bank borrowings 6,617,114 6,105,790 – – Debt securities 6,780,492 5,224,610 3,512,287 3,432,956 Deferred tax liabilities 658,989 627,638 33,558 44,367 Other non-current liabilities 712,971 550,130 17,628 27,815
14,769,566 12,508,168 3,563,473 3,505,138 net assets 19,443,784 19,239,471 9,806,194 9,954,979
Representing: share capital 6,300,011 6,298,355 6,300,011 6,298,355 Revenue reserves 8,910,445 8,328,115 3,125,358 3,296,610 Other reserves (130,048) 275,067 380,825 360,014 equity attributable to owners of the company 15,080,408 14,901,537 9,806,194 9,954,979 non-controlling interests 4,363,376 4,337,934 – – total equity 19,443,784 19,239,471 9,806,194 9,954,979
BalancE sHEEts as at 31 december 2012
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
revenue 3,301,363 3,019,569 444,827 499,542 cost of sales (2,073,289) (1,946,684) – – gross profit 1,228,074 1,072,885 444,827 499,542 Other operating income 586,949 713,704 62,107 160,625 administrative expenses (580,251) (530,187) (100,063) (92,051) Other operating expenses (52,122) (46,459) (65,194) (147,184) Profit from operations 1,182,650 1,209,943 341,677 420,932 finance costs (498,953) (472,785) (185,330) (181,047) share of results (net of tax) of: – associates 699,197 651,194 – – – joint ventures 135,584 225,452 – –
834,781 876,646 – – Profit before taxation 1,518,478 1,613,804 156,347 239,885 taxation (201,907) (190,884) 12,422 11,336 Profit for the year 1,316,571 1,422,920 168,769 251,221
attributable to: owners of the company 930,347 1,057,311 168,769 251,221 non-controlling interests 386,224 365,609 – – Profit for the year 1,316,571 1,422,920 168,769 251,221
basic earnings per share (cents) 21.9 24.8 diluted earnings per share (cents) 21.7 24.6
incOME statEMEnts year ended 31 december 2012
30 31
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
Profit for the year 1,316,571 1,422,920 168,769 251,221
other comprehensive income: Exchange differences arising from translation of foreign operations and foreign currency loans forming part of net investment in foreign operations (443,366) 145,889 – – change in fair value of available-for-sale investments (254) (43,848) – – Effective portion of change in fair value of cash flow hedges (63,600) (75,048) – – share of other comprehensive income of associates and joint ventures (84,312) 101,812 – – total other comprehensive income for the year, net of income tax (591,532) 128,805 – – total comprehensive income for the year 725,039 1,551,725 168,769 251,221
attributable to: owners of the company 487,993 1,153,805 168,769 251,221 non-controlling interests 237,046 397,920 – – total comprehensive income for the year 725,039 1,551,725 168,769 251,221
statEMEnts OF cOMPREHEnsiVE incOME year ended 31 december 2012
nOtEs tO tHE suMMaRY Financial statEMEnt the summary financial statement is presented in singapore Dollars which is the company’s functional currency. all financial information presented in singapore Dollars has been rounded to the nearest thousand, unless otherwise stated.
dividends the Board of Directors of the company has proposed a tax-exempt ordinary dividend of 7.0 cents per share in respect of the financial year ended 31 December 2012. this would amount to a payout of approximately $297.6 million based on the number of issued shares (excluding 19,611,437 treasury shares) as at 31 December 2012. the tax-exempt dividends are subject to shareholders’ approval at the forthcoming annual general Meeting of the company.
For the financial year ended 31 December 2011, a tax-exempt ordinary dividend of 6.0 cents per share and a tax-exempt special dividend of 2.0 cents per share were approved at the annual general Meeting held on 30 april 2012. the said dividends of $340.0 million were paid in May 2012.
significant related Party transactions For the purposes of these financial statements, parties are considered to be related to the group if the group has the direct and indirect ability to control the party, jointly control or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
the group considers the directors of the company, and the council of cEOs comprising the President & cEO, key management officers of the corporate office and cEOs of the strategic business units, to be key management personnel in accordance with FRs 24 Related Party Disclosures.
in addition to the related party information disclosed in the full financial statements, there were significant related party transactions which were carried out in the normal course of business on terms agreed between the parties were as follows:
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
related corporations Equity participation in a newly formed company – 150,000 – – acquisition of an associate – 360,000 – – Project management fee income 2,154 742 – –
subsidiaries Management fee income – – 71,471 66,107 it and administrative support services – – 16,681 12,332 Others – – (113) (239)
associates and Joint ventures Management fee income 339,510 301,426 – – construction and project management income 78,549 51,958 – – Rental expense (44,260) (44,684) (3,498) (3,824) Proceeds from sale of properties and investments 359,322 443,535 – – acquisition of property and investments 179,500 79,443 – – accounting service fee, acquisition fee, divestment fee, marketing income and others 81,352 77,575 (266) (256)
32 33
significant related Party transactions (cont’d)
the group the company
2012 $’000
2011 $’000
2012 $’000
2011 $’000
key Management Personnel subscription of bonds issued by a subsidiary 430 3,000 – – interest paid/payable by the company and its subsidiaries 390 325 155 111 Professional fees paid/payable to a director and a firm in which a director is a member – 7 – – sale of residential properties by the subsidiaries 3,680 1,178 – –
remuneration of key Management Personnel salary, bonus and other benefits 20,868 23,041 10,369 11,650 Employer’s contributions to defined contribution plans 136 107 60 45 Equity compensation benefits 9,146 6,961 4,835 3,643
30,150 30,109 15,264 15,338
Material changes in accounting Policies, asset values and share caPital (a) accounting Policies accounting policies and methods of computation used in the financial statements are consistent with those applied
in the financial statements for the year ended 31 December 2011, except for the adoption of accounting standards (including its consequential amendments) and interpretations applicable for the financial period beginning 1 January 2012.
the group applies the amendments to FRs 12 Income Tax – Deferred Tax: Recovery of Underlying Assets, which became effective as of 1 January 2012. the amendments apply to the measurement of deferred tax liabilities and assets arising from investment properties measured using the fair value model under FRs 40 Investment Property. For the purposes of measuring deferred tax, the amendments introduce a rebuttable presumption that the carrying amount of such investment property will be recovered entirely through sale. the adoption of amendments to FRs 12 do not have any significant impact on the financial position or performance of the group.
(b) asset values the group’s total assets as at 31 December 2012 were $37.8 billion, of which singapore and china accounted for
approximately 74% of the group’s total assets. the total assets increased by $2.5 billion or 7% from 2011’s total assets of $35.3 billion mainly due to the acquisitions and new investments made during the year, in particular, acquisition of 50% stake in two shopping malls and an office building in shanghai, equity injection into Raffles city chongqing, acquisition of the cavendish london in united Kingdom and four shopping malls in Japan, as well as fair value gains from the revaluation of the group’s investment properties portfolio.
Material changes in accounting Policies, asset values and share caPital (cont’d) (c) share capital Movements in the company’s issued and fully paid-up share capital were as follows:
the company
2012 no. of shares
(‘000)
2011 no. of shares
(‘000)
issued and fully paid, with no par value at 1 January 4,269,439 4,262,492 issue of shares pursuant to the: – Exercise of options 837 1,120 – Restricted stock Plans 63 5,827 – Payment of directors’ fees 152 – at 31 December, including treasury shares 4,270,491 4,269,439 less: treasury shares (19,612) (25,209) at 31 December, excluding treasury shares 4,250,879 4,244,230
Movements in the company’s treasury shares were as follows:
the company
2012 no. of shares
(‘000)
2011 no. of shares
(‘000)
at 1 January 25,209 – Purchase of treasury shares – 25,209 treasury shares transferred pursuant to employee share plans (5,597) – at 31 December 19,612 25,209
nOtEs tO tHE suMMaRY Financial statEMEnt
34 35
DiREctORs’ REMunERatiOn directors’ coMPensation table for the financial year ended 31 deceMber 2012:
salary bonus and directors’ fees inclusive inclusive of other benefits of attendance fees (3) aWs and inclusive of employer’s employer’s awards of cash shares/units cPf cPf (1) shares (2) component component total directors of the company $ $ $ $ $ $
Payable by company: executive director liew Mun leong 1,428,560.00 1,785,461.08 1,951,610.00 – – 5,165,631.08
sub-total 1 1,428,560.00 1,785,461.08 1,951,610.00 – – 5,165,631.08 non-executive directors Dr Hu tsu tau (5) – – – 81,867.00 – 81,867.00 ng Kee choe – – – 212,146.20 90,919.80 303,066.00 Peter seah lim Huat – – – 187,040.00 80,160.00 267,200.00 Richard Edward Hale (5) – – – 66,133.00 – 66,133.00 James Koh cher siang – – – 146,020.00 62,580.00 208,600.00 arfat Pannir selvam – – – 149,240.00 63,960.00 213,200.00 Prof Kenneth stuart courtis – – – 147,280.00 63,120.00 210,400.00 Dr Fu Yuning (5) – – – 26,000.00 – 26,000.00 John Powell Morschel – – – 134,820.00 57,780.00 192,600.00 simon claude israel – – – 136,850.00 58,650.00 195,500.00 Euleen goh Yiu Kiang – – – 126,041.30 54,017.70 180,059.00 tan sri amirsham Bin a aziz (6) – – – 61,203.80 26,230.20 87,434.00
1,474,641.30 (4) 557,417.70 (4)
sub-total 2 – – – 2,032,059.00 (4) 2,032,059.00 Payable by subsidiaries: liew Mun leong – – – 366,500.00 (7) 161,600.00 (7) 528,100.00 Richard Edward Hale – – – 97,000.00 – 97,000.00 James Koh cher siang – – – 139,000.00 – 139,000.00 arfat Pannir selvam – – – 77,700.00 33,300.00 111,000.00 tan sri amirsham Bin a aziz – – – 59,500.00 25,500.00 85,000.00
739,700.00 220,400.00
sub-total 3 – – – 960,100.00 960,100.00 total for directors of company 1,428,560.00 1,785,461.08 1,951,610.00 2,992,159.00 8,157,790.08 (1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on
an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2012 is lower than 2011 due to lower portfolio gain. The EVA bonus accrued for year 2012 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) For the year 2012, no contingent awards of shares has been granted under the CapitaLand Restricted Share Plan 2010 (“RSP”) to all Directors except for Mr Liew Mun Leong. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan 2010 (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
directors’ coMPensation table for the financial year ended 31 deceMber 2012: (cont’d)
(3) The directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(4) The total compensation of the non-executive Directors for 2012 of an aggregate amount of S$2,032,059, if approved, will be paid as to S$1,474,641.30 in cash, and S$557,417.70 in the form of share awards under the RSP. Consequently, and in accordance with the "Directors' Fee Policy", a non-executive Director who served on the Board during 2012 (with the exception of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning, who retired from the Board during 2012) will be remunerated as to about 70 per cent. (70%) of his total Directors' fees in cash and about 30 per cent. (30%) of his total Directors' fees in the form of shares in the Company. The actual number of shares to be awarded will be based on the volume-weighted average price of a share on the SGX-ST over the 14 trading days from (and including) the ex-dividend date following the Company’s Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning will receive all of their Directors’ fees in cash.
(5) Dr Hu Tsu Tau and Mr Richard Edward Hale retired from the Board of the Company from the Annual General Meeting on 30 April 2012. Dr Fu Yuning retired from the Board of the Company at the Annual General Meeting on 30 April 2012.
(6) Tan Sri Amirsham Bin A Aziz was appointed as Director of the Company on 30 July 2012.
(7) Mr Liew Mun Leong is an employee of CapitaLand Limited. The cash component of his directors’ fees will be paid to CapitaLand Limited, but he will be entitled to retain the shares component of the subsidiaries and/or units component of the real estate investment trusts managed by the subsidiaries.
36 37
directors’ coMPensation table for the financial year ended 31 deceMber 2011:
salary bonus and directors’ fees inclusive inclusive of other benefits of attendance fees (3) aWs and inclusive of employer’s employer’s awards of cash shares/units cPf cPf (1) shares (2) component component total directors of the company $ $ $ $ $ $
Payable by company: executive director liew Mun leong 1,373,680.00 2,601,541.07 1,506,034.00 – – 5,481,255.07
sub-total 1 1,373,680.00 2,601,541.07 1,506,034.00 – – 5,481,255.07 non-executive director Dr Hu tsu tau (4) – – – 246,700.00 – 246,700.00 Peter seah lim Huat – – – 166,040.00 71,160.00 237,200.00 Jackson Peter tai (4) – – – 67,292.00 – 67,292.00 Richard Edward Hale (4) – – – 185,400.00 – 185,400.00 James Koh cher siang – – – 133,700.00 57,300.00 191,000.00 arfat Pannir selvam – – – 145,320.00 62,280.00 207,600.00 Prof Kenneth stuart courtis – – – 136,290.00 58,410.00 194,700.00 Dr Fu Yuning (4) – – – 86,700.00 – 86,700.00 John Powell Morschel – – – 115,488.10 49,494.90 164,983.00 ng Kee choe – – – 86,671.90 37,145.10 123,817.00 simon claude israel (5) – – – 126,700.00 54,300.00 181,000.00 Euleen goh Yiu Kiang (6) – – – 23,246.30 9,962.70 33,209.00
1,519,548.30 (4) 400,052.70 (4)
sub-total 2 – – – 1,919,601.00 (4) 1,919,601.00 Payable by subsidiaries: liew Mun leong – – – 326,100.00 (7) 147,000.00 (7) 473,100.00 Richard Edward Hale – – – 80,000.00 20,000.00 100,000.00 James Koh cher siang – – – 99,200.00 24,800.00 124,000.00 arfat Pannir selvam – – – 81,200.00 34,800.00 116,000.00
586,500.00 226,600.00
sub-total 3 – – – 813,100.00 813,100.00
total for directors of company 1,373,680.00 2,601,541.07 1,506,034.00 2,732,701.00 8,213,956.07
(1) The bonus figures consist primarily of Economic Value Added (“EVA”) bonuses under the EVA incentive plan and are disclosed based on an accrual basis and accrued for the performance of the same year. The EVA bonus for the year 2011 is lower than 2010 largely due to lower portfolio gain. The EVA bonus accrued for year 2011 is credited into the bonus account and 1/3 of the balance in the bonus account will be paid out annually, provided that the account balance, which is subjected to a clawback feature, is positive.
(2) For the year 2011, no contingent awards of shares has been granted under the CapitaLand Restricted Share Plan 2010 (“RSP”) to all Directors except for Mr Liew Mun Leong. Contingent awards of shares under the RSP and the CapitaLand Performance Share Plan 2010 (“PSP”) were granted to Mr Liew Mun Leong. The final number of shares released under the contingent awards of shares for RSP and PSP will depend on the achievement of pre-determined targets and subject to the respective vesting period under RSP and PSP. The contingent awards of shares figures disclosed are based on the fair value of the shares comprised in the baseline awards under the RSP and PSP at the time of grant.
directors’ coMPensation table for the financial year ended 31 deceMber 2011: (cont’d)
(3) The Directors’ fees will only be paid upon approval by the shareholders at the forthcoming Annual General Meeting of the Company and its subsidiaries.
(4) The total compensation of the non-executive Directors for 2011 of an aggregate amount of S$1,919,601, if approved, will be paid out as to S$1,519,548.30 in cash, and S$400,052.70 in the form of share awards under the RSP. Consequently, and in accordance with the "Directors' Fee Policy", a non-executive Director who served on the Board during 2011 (with the exception of Dr Hu Tsu Tau, Mr Richard Edward Hale and Dr Fu Yuning, who are retiring from the Board and Mr Jackson Peter Tai who retired from the Board during 2011) will be remunerated as to about 70 per cent. (70%) of his total Directors' fees in cash and about 30 per cent. (30%) of his total Directors' fees in the form of shares in the Company. The number of shares to be awarded will be determined by reference to the volume-weighted average price of a share on the SGX-ST over the 14 trading days immediately following the date of the Annual General Meeting, rounded down to the nearest share, and any residual balance settled in cash. The awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu Tsu Tau, Mr Richard Edward Hale, Dr Fu Yuning and Mr Jackson Peter Tai will receive all of their Directors’ fees in cash.
(5) Mr Simon Claude Israel was an employee of Temasek Holdings (Private) Limited (“Temasek”) until 30 June 2011. His fee for the period from 1 January 2011 to 30 June 2011 is S$92,700 and will be paid entirely in cash to Temasek. His fee for the period from 1 July 2011 to 31 December 2011 is S$88,300 and will be paid to him in the portion of S$34,000 in cash and S$54,300 in the form of share awards under the RSP. His total directors’ fees of S$181,000 for 2011 will be paid in accordance with the Directors’ Fee Policy (see note (4) above).
(6) Ms Euleen Goh Yiu Kiang was appointed as Director of the Company on 1 October 2011.
(7) Mr Liew Mun Leong is an employee of CapitaLand Limited. The cash component of his directors’ fees will be paid to CapitaLand Limited, but he will be entitled to retain the shares component of the subsidiaries and/or units component of the real estate investment trusts managed by the subsidiaries.
DiREctORs’ REMunERatiOn
38 39
share caPital Paid-up capital s$6,346,142,745.81 number of issued and Paid-up shares (including treasury shares) 4,270,735,848 number of treasury shares 19,611,437 number of issued and Paid-up shares (excluding treasury shares) 4,251,124,411 class of shares Ordinary shares Voting Rights One vote per share. the company cannot exercise any
voting rights in respect of shares held by it as treasury shares.
tWenty largest shareholders as shown in the Register of Members and Depository Register name no. of shares %(1)
1 temasek Holdings (Private) limited 1,680,704,140 39.54 2 citibank nominees singapore Pte ltd 638,022,082 15.01 3 DBs nominees Pte ltd 479,090,878 11.27 4 DBsn services Pte ltd 302,759,094 7.12 5 HsBc (singapore) nominees Pte ltd 232,798,495 5.48 6 united Overseas Bank nominees Pte ltd 144,167,515 3.39 7 Raffles nominees (Pte) ltd 73,855,974 1.74 8 BnP Paribas securities services singapore Branch 30,786,507 0.72 9 Morgan stanley asia (singapore) securities Pte ltd 24,391,326 0.57 10 Merrill lynch (singapore) Pte ltd 23,019,609 0.54 11 Bank of singapore nominees Pte ltd 20,767,467 0.49 12 Pei Hwa Foundation limited 11,727,335 0.28 13 OcBc nominees singapore Private limited 11,333,799 0.27 14 DB nominees (s) Pte ltd 11,212,716 0.26 15 OcBc securities Private ltd 10,772,305 0.25 16 BnP Paribas nominees singapore Pte ltd 10,482,239 0.25 17 lee Pineapple company Pte ltd 10,000,000 0.23 18 Phillip securities Pte ltd 9,373,042 0.22 19 uOB Kay Hian Pte ltd 6,906,953 0.16 20 DBs Vickers securities (s) Pte ltd 4,705,603 0.11 total 3,736,877,079 87.90
substantial shareholders as shown in the Register of substantial shareholders as at 28 February 2013 direct interest deemed interest substantial shareholder no. of shares %(1) no. of shares %(1)
temasek Holdings (Private) limited 1,680,704,140 39.53 59,333,134(2) 1.40
siZe of holdings no. of no. of shares excluding size of shareholdings shareholders % treasury shares %(1)
1 – 999 987 1.80 340,039 0.01 1,000 – 10,000 44,784 81.78 174,382,741 4.10 10,001 – 1,000,000 8,950 16.35 306,668,135 7.21 1,000,001 and above 39 0.07 3,769,733,496 88.68
total 54,760 100.00 4,251,124,411 100.00 approximately 58.97%(1) of the issued ordinary shares are held in the hands of the public. Rule 723 of the listing Manual of the singapore Exchange securities trading limited is complied with. Notes: (1) Percentage is calculated based on the total number of 4,251,124,411 issued shares, excluding treasury shares.
(2) Temasek Holdings (Private) Limited is deemed to have an interest in 59,333,134 ordinary shares in which its subsidiary and associated companies have or are deemed to have an interest.
sHaREHOlDing statistics as at 28 february 2013
nOticE is HEREBY giVEn that the annual general Meeting of the company will be held at the star theatre, level 5, the star Performing arts centre, 1 Vista Exchange green, singapore 138617 on Friday, 26 april 2013 at 10.00 a.m. to transact the following business:
as ordinary business
1 to receive and adopt the Directors’ Report and audited Financial statements for the year ended 31 December 2012 and the auditors’ Report thereon.
2 to declare a first and final 1-tier dividend of s$0.07 per share for the year ended 31 December 2012.
3 to approve Directors’ fees of s$2,032,059 for the year ended 31 December 2012 comprising:
(a) s$1,474,641.30 to be paid in cash (2011: s$1,519,548.30); and (b) s$557,417.70 to be paid in the form of share awards under the capitaland Restricted share Plan 2010, with any
residual balance to be paid in cash (2011: s$400,052.70).
4 to re-elect the following Directors, who are retiring by rotation pursuant to article 95 of the articles of association of the company and who, being eligible, offer themselves for re-election:
(a) Mr ng Kee choe (b) Mr Peter seah lim Huat
5 to re-elect the following Directors, who are retiring pursuant to article 101 of the articles of association of the company and who, being eligible, offer themselves for re-election:
(a) tan sri amirsham Bin a aziz (b) Mr stephen lee ching Yen (c) Mr lim Ming Yan
6 to re-appoint KPMg llP as auditors of the company and to authorise the Directors to fix their remuneration.
as sPecial business
7 to consider and, if thought fit, to pass with or without any modification, the following resolutions as Ordinary Resolutions:
7a that pursuant to section 161 of the companies act, authority be and is hereby given to the Directors of the company to:
(a) (i) issue shares in the capital of the company (”shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, ”instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any instrument made or granted by the Directors while this Resolution was in force,
nOticE OF annual gEnERal MEEting
40 41
as sPecial business (cont’d)
provided that:
(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of instruments made or granted pursuant to this Resolution) does not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the company (including shares to be issued in pursuance of instruments made or granted pursuant to this Resolution) does not exceed ten per cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the company (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the singapore Exchange securities trading limited (“sgX-st”)) for the purpose of determining the aggregate number of shares that may be issued under sub- paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the company at the time this Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and
(ii) any subsequent bonus issue, consolidation or subdivision of shares; (3) in exercising the authority conferred by this Resolution, the company shall comply with the provisions of the
listing Manual of the sgX-st for the time being in force (unless such compliance has been waived by the sgX-st) and the articles of association for the time being of the company; and
(4) (unless revoked or varied by the company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next annual general Meeting of the company or the date by which the next annual general Meeting of the company is required by law to be held, whichever is the earlier.
7B that the Directors of the company be and are hereby authorised to:
(a) grant awards in accordance with the provisions of the capitaland Performance share Plan 2010 (the “Performance share Plan”) and/or the capitaland Restricted share Plan 2010 (the “Restricted share Plan”); and
(b) allot and issue from time to time such number of shares in the capital of the company as may be required to be issued pursuant to the vesting of awards under the Performance share Plan and/or the Restricted share Plan,
provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the Performance share Plan, the Restricted share Plan and all shares, options or awards granted under any other share schemes of the company then in force, shall not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the company from time to time.
By Order of the Board
loW sai choy coMPany secretary
singapore 22 March 2013
nOticE OF annual gEnERal MEEting
notes:
a member of the company entitled to attend and vote at the annual general Meeting is entitled to appoint not more than two proxies to attend and vote instead of him. Where a member appoints more than one proxy, he shall specify the proportion of his shareholdings to be represented by each proxy. a proxy need not be a member of the company. the instrument appointing a proxy or proxies must be deposited at the office of the company’s share Registrar, M & c services Private limited, 112 Robinson Road, #05-01, singapore 068902 not less than 48 hours before the time appointed for holding the annual general Meeting. additional information relating to the notice of annual general Meeting:
1 in relation to item 3 under the heading “as Ordinary Business”, the total compensation of the non-executive Directors for 2012 of an aggregate amount of s$2,032,059, if approved, will be paid as to s$1,474,641.30 in cash, and s$557,417.70 in the form of share awards under the capitaland Restricted share Plan 2010. consequently, and in accordance with the “Directors’ Fee Policy”, a non-executive Director who served on the Board during 2012 (with the exception of Dr Hu tsu tau, Mr Richard Edward Hale and Dr Fu Yuning, who retired from the Board during 2012) will be remunerated as to about 70 per cent. (70%) of his total Directors’ fees in cash and about 30 per cent. (30%) of his total Directors’ fees in the form of shares in the company. the actual number of shares to be awarded will be based on the volume- weighted average price of a share on the sgX-st over the 14 trading days from (and including) the ex-dividend date following the company’s annual general Meeting, rounded down to the nearest share, and any residual balance settled in cash. the awards will consist of the grant of fully paid shares, with no performance conditions attached and no vesting periods imposed. Each of Dr Hu tsu tau, Mr Richard Edward Hale and Dr Fu Yuning will receive all of their Directors’ fees in cash.
2 in relation to item 4 under the heading “as Ordinary Business”, Mr liew Mun leong, a non-independent Director, retires by rotation pursuant to article 95 of the company’s articles of association at the annual general Meeting and is not seeking re-election. in relation to items 4(a) and (b) under the heading “as Ordinary Business”, Mr ng Kee choe will, upon re-election, continue to serve as chairman of the Board, chairman of the investment committee, a member of the nominating committee, a member of the Finance and Budget committee and a member of the Executive Resource and compensation committee respectively; and Mr Peter seah lim Huat will, upon re-election, continue to serve as Deputy chairman of the Board, chairman of the nominating committee, chairman of the Finance and Budget committee and chairman of the Executive Resource and compensation committee respectively. Mr ng will replace Mr seah as chairman of the Executive Resource and compensation committee from 27 april 2013. Mr ng and Mr seah are considered as independent Directors. Please refer to the “Board of Directors” section of the company’s annual Report 2012 for information on the current directorships in other listed companies and other principal commitments of Mr ng and Mr seah respectively.
3 in relation to items 5(a), (b) and (c) under the heading “as Ordinary Business”, tan sri amirsham Bin a aziz will, upon re-election, continue to serve as a member of the audit committee and a member of the Risk committee respectively; Mr stephen lee ching Yen will, upon re-election, continue to serve as a member of the Executive Resource and compensation committee and a member of the Risk committee respectively; and Mr lim Ming Yan will, upon re-election, continue to serve as a member of the investment committee, a member of the Finance and Budget committee and a member of the corporate Disclosure committee respectively. tan sri amirsham and Mr lee are considered as independent Directors. Mr lim is the President and group chief Executive Officer of the company. Please refer to the “Board of Directors” section of the company’s annual Report 2012 for information on the current directorships in other listed companies and other principal commitments of tan sri amirsham, Mr lee and Mr lim respectively.
42
notes: (cont’d)
4 Ordinary Resolution no. 7a under the heading ”as special Business”, if passed, will empower the Directors to issue shares in the company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments from the date of the annual general Meeting until the date of the next annual general Meeting. the aggregate number of shares which the Directors may issue (including shares to be issued pursuant to convertibles) under this Resolution must not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the company with a sub-limit of ten per cent. (10%) for issues other than on a pro rata basis. For the purpose of determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) in the capital of the company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the company at the time that Ordinary Resolution no. 7a is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution no. 7a is passed, and (b) any subsequent bonus issue, consolidation or subdivision of shares. the sub-limit of ten per cent. (10%) for issues other than on a pro rata basis is below the twenty per cent. (20%) sub-limit permitted by the listing Manual of the sgX-st. the Directors believe that the lower sub-limit of ten per cent. (10%) would sufficiently address the company’s present need to maintain flexibility while taking into account shareholders’ concerns against dilution.
5 Ordinary Resolution no. 7B under the heading ”as special Business”, if passed, will empower the Directors to grant awards under the Performance share Plan and the Restricted share Plan, and to allot and issue shares pursuant to the vesting of such awards provided that the aggregate number of shares to be issued, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered pursuant to the Performance share Plan, the Restricted share Plan and all shares, options or awards granted under any other share schemes of the company then in force, does not exceed eight per cent. (8%) of the total number of issued shares (excluding treasury shares) in the capital of the company from time to time.
nOticE OF annual gEnERal MEEting
caPitaland liMited (Regn. no.: 198900036n) (incorporated in the Republic of singapore)
Proxy forM annual general Meeting
i/We, _________________________________ (name) _____________________________ (nRic/Passport/company Regn. no.)
of _________________________________________________________________________________________________ (address)
being a member/members of capitaland limited (the “company”) hereby appoint:
name address nric/Passport no.
Proportion of shareholdings
no. of shares %
and/or (delete as appropriate)
name address nric/Passport no.
Proportion of shareholdings
no. of shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the annual general Meeting of the company to be held at the star theatre, level 5, the star Performing arts centre, 1 Vista Exchange green, singapore 138617, on Friday, 26 april 2013 at 10.00 a.m., and at any adjournment thereof. i/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the annual general Meeting as indicated hereunder. if no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the annual general Meeting.
no. resolutions relating to: for* against*
ordinary business
1 adoption of Directors’ Report, audited Financial statements and auditors’ Report
2 Declaration of a First and Final Dividend
3 approval of Directors’ Fees
4(a) Re-election of Mr ng Kee choe as Director
4(b) Re-election of Mr Peter seah lim Huat as Director
5(a) Re-election of tan sri amirsham Bin a aziz as Director
5(b) Re-election of Mr stephen lee ching Yen as Director
5(c) Re-election of Mr lim Ming Yan as Director
6 Re-appointment of KPMg llP as auditors
sPecial business
7a authority for Directors to issue shares and to make or grant instruments pursuant to section 161 of the companies act, cap. 50
7B authority for Directors to grant awards, and to allot and issue shares, pursuant to the capitaland Performance share Plan 2010 and the capitaland Restricted share Plan 2010
total number of shares held
iMPortant: 1. For investors who have used their cPF monies to buy the company's shares, this
summary Report/annual Report is forwarded to them at the request of their cPF approved nominees and is sent solely FOR inFORMatiOn OnlY.
2. this Proxy Form is not valid for use by cPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. cPF investors who wish to attend the Meeting as observers must submit their requests through their cPF approved nominees within the time frame specified. if they also wish to vote, they must submit their voting instructions to their cPF approved nominees within the time frame specified to enable them to vote on their behalf.
* If you wish to exercise all your votes “For” or “Against”, please indicate with a “ ” within the box provided. Alternatively, please indicate the number of votes as appropriate.
Dated this ______________________ day of ______________________ 2013
signature(s) of Member(s) or common seal
iMPORtant: PlEasE REaD nOtEs tO PROXY FORM On REVERsE PagE.
notes to Proxy forM: 1 a member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. a proxy need not be a member of
the company.
2 Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3 completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the Meeting. any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy or proxies, to the Meeting.
4 a member should insert the total number of shares held. if the member has shares entered against his name in the Depository Register (as defined in section 130a of the companies act, cap. 50 of singapore), he should insert that number of shares. if the member has shares registered in his name in the Register of Members of the company, he should insert that number of shares. if the member has shares entered against his name in the Depository Register as well as shares registered in his name in the Register of Members, he should insert the aggregate number of shares. if no number is inserted, the instrument of proxy will be deemed to relate to all the shares held by the member.
5 the instrument appointing a proxy or proxies must be deposited at the office of the company’s share Registrar, M & c services Private limited, 112 Robinson Road, #05-01, singapore 068902, not less than 48 hours before the time appointed for holding the Meeting.
6 the instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.
7 Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8 a corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with section 179 of the companies act, cap. 50 of singapore.
general the company shall be entitled to reject the instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. in addition, in the case of shares entered in the Depository Register, the company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at least 48 hours before the time appointed for holding the Meeting, as certified by the central Depository (Pte) limited to the company.
2nd fold here
1st fold here
Postage will be paid
by addressee
For posting in singapore only.
caPitaland liMited c/o M & c services Private limited
112 Robinson Road #05-01
singapore 068902
business rePly service PerMit no. 04910
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22 March 2013
Dear shareholder
this notice accompanies a copy of the summary Report (“sR”) of capitaland limited (“capitaland” or the “company”) for the financial year ended 31 December 2012 (“FY2012”). the sR contains a review of the capitaland group for FY2012. it also contains a summary of the audited Financial statements of the company and the group for FY2012.
the full audited Financial statements of the company and of the group for FY2012 are set out in a separate report called the annual Report (“aR”). this report is available to all capitaland shareholders at no cost upon request.
We will be sending you only sRs for as long as you are a capitaland shareholder (the sR for FY2012 is an example of sRs that you will receive in the future), unless you indicate otherwise in the request form below or have previously requested otherwise.
For shareholders receiving this sR for the first time, and for shareholders who did not previously request for copies of the aR, if you wish to receive a printed copy of the aR or a cD Rom of the aR for FY2012 and for future financial years for as long as you are a shareholder, please complete the request form below by ticking the appropriate box and returning it to us by 2 april 2013. if we do not receive your request form, it would indicate that you do not wish to receive the aR for FY2012 and for future financial years.
Please note that if you have indicated previously that you wish/do not wish to receive the sR and/or the aR, you may change your wishes by ticking the relevant box in the request form below and returning it to us by 2 april 2013. if we do not receive your request form, it would indicate that you do not wish to change your previous request.
Your latest request will supersede the earlier requests received by us.
For the convenience of shareholders, the aR for FY2012 will be available at the company’s website www.capitaland.com.
Yours faithfully For and on behalf of caPitaland liMited
loW sai choy coMPany secretary
request forM
to: capitaland limited Note: Please tick accordingly. We regret that we will not be able to process any incomplete or improperly completed request.
Please send me/us a printed copy of the annual Report for FY2012 as well as for future financial years for as long as i am/we are a shareholder/s of capitaland limited.
Please send me/us a cD Rom of the annual Report for FY2012 as well as for future financial years for as long as i am/we are a shareholder/s of capitaland limited.
Please send me/us the summary Report for future financial years for as long as i am/we are a shareholder/s of capitaland limited.*
Please do not send me/us the summary Report or the annual Report for future financial years for as long as i am/we are a shareholder/s of capitaland limited.
name(s) of shareholder(s): nric/Passport no(s): signature(s):
_____________________________ _____________________________ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_____________________________ _____________________________ ___________________________
the shares are held under or through:
cDP securities account no. – –
cPFis account no.
Physical scrips
address: ____________________________________________________________________________________
Date: ______________________________________________________________________________________ * Please note that if your shares are held through CPFIS, you will be automatically included under this option only.
caPitaland liMited (Regn. no.: 198900036n) (incorporated in the Republic of singapore)
2nd fold here
1st fold here
Postage will be paid
by addressee
For posting in singapore only.
caPitaland liMited c/o M & c services Private limited
112 Robinson Road #05-01
singapore 068902
business rePly service PerMit no. 04910
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49 This page has been intentionally left blank.
CAPITALAND LIMITED 168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel +65 6823 3200 Fax +65 6820 2202 (Reg No. 198900036N)
www.capitaland.com
This summary report is printed on environmentally friendly paper containing recycled pulp from post-consumer waste and Forest Stewardship Council (FSC) certified. The paper is also manufactured with a totally chlorine free process (TCF) and has been granted the SEC (Singapore Environment Council) Green Label certification.
