CROESUS RETAIL ASSET MANAGEMENT PTE. LTD. (Registration Number K)

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1 CIRCULAR DATED 15 JUNE 2016 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. Singapore Exchange Securities Trading Limited (the SGX-ST ) assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained, in this Circular. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Preferential Offering Units (as defined herein) on the Main Board of the SGX-ST. The SGX-ST s in-principle approval is not to be taken as an indication of the merits of the Preferential Offering (as defined herein), the Preferential Offering Units, CRT (as defined herein), the Trustee-Manager and/or their subsidiaries. If you have sold or transferred all your units in CRT ( Units ), you should immediately forward this Circular, together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form in this Circular, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. (a business trust constituted on 7 May 2012 under the laws of the Republic of Singapore) Registration Number: Managed by CROESUS RETAIL ASSET MANAGEMENT PTE. LTD. (Registration Number K) Independent Financial Adviser to the Independent Directors of the Trustee-Manager CIMB BANK BERHAD (13491-P) Singapore Branch (Incorporated in Malaysia) Lead Manager and Underwriter for the Preferential Offering and Financial Adviser to the Trustee-Manager in relation to the Internalisation Citigroup Global Markets Singapore Pte. Ltd. CIRCULAR TO UNITHOLDERS IN RELATION TO: (1) THE PROPOSED INTERNALISATION OF THE TRUSTEE-MANAGER; (2) THE PROPOSED DISTRIBUTION OF RETURNS TO UNITHOLDERS; AND (3) THE PROPOSED PREFERENTIAL OFFERING. IMPORTANT DATES AND TIMES FOR UNITHOLDERS Last date and time for lodgement of Proxy Forms : 28 June 2016 at 10:00 a.m. Date and time of Extraordinary General Meeting ( EGM ) : 30 June 2016 at 10:00 a.m. Place of EGM : Amara Hotel, Ballroom 1 and 2, Level 3, 165 Tanjong Pagar Road, Singapore

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3 TABLE OF CONTENTS Page CORPORATE INFORMATION... iii INDICATIVE TIMETABLE... 1 LETTER TO UNITHOLDERS 1. SUMMARY OF APPROVALS SOUGHT THE PROPOSED INTERNALISATION OF THE TRUSTEE-MANAGER RISK FACTORS IN RELATION TO THE PROPOSED INTERNALISATION SUMMARY OF KEY TERMS OF THE SHARE PURCHASE AGREEMENT AND TM SHARE TRUST DEED RATIONALE FOR THE INTERNALISATION THE PROPOSED DISTRIBUTION OF RETURNS THE PROPOSED PREFERENTIAL OFFERING DETAILS AND FINANCIAL INFORMATION OF THE PROPOSED TRANSACTIONS INTERESTS OF DIRECTORS AND SUBSTANTIAL UNITHOLDERS RECOMMENDATIONS EXTRAORDINARY GENERAL MEETING ABSTENTIONS FROM VOTING ACTION TO BE TAKEN BY UNITHOLDERS DIRECTORS RESPONSIBILITY STATEMENT FINANCIAL ADVISER TO THE TRUSTEE-MANAGER S RESPONSIBILITY STATEMENT CONSENTS DOCUMENTS ON DISPLAY IMPORTANT NOTICE GLOSSARY APPENDICES APPENDIX A CURRENT HOLDING STRUCTURE OF THE TRUSTEE-MANAGER AND CRT... A-1 APPENDIX B POST-INTERNALISATION HOLDING STRUCTURE OF THE TRUSTEE-MANAGER AND CRT... B-1 APPENDIX C VALUATION REPORT... C-1 APPENDIX D SUMMARY OF KEY TERMS OF THE AMENDED ROFRS... D-1 APPENDIX E IFA LETTER... E-1 APPENDIX F EXISTING INTERESTED PERSON TRANSACTIONS... F-1 APPENDIX G TAX CONSIDERATIONS... G-1 i

4 Page APPENDIX H PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS AND THE PROFIT AND LOSS SUMMARY OF THE TRUSTEE-MANAGER GROUP... H-1 NOTICE OF EXTRAORDINARY GENERAL MEETING... I-1 PROXY FORM ii

5 CORPORATE INFORMATION Directors of Croesus Retail Asset Management Pte. Ltd., in its capacity as trustee-manager of Croesus Retail Trust ( CRT, and the trustee-manager of CRT, the Trustee-Manager ) Registered Office of the Trustee-Manager Lead Manager and Underwriter for the Preferential Offering and Financial Adviser to the Trustee-Manager as to the Internalisation (as defined herein) Legal Adviser to the Trustee-Manager Unit Registrar and Unit Transfer Office Independent Financial Adviser to the Independent Directors and Audit and Risk Committee of the Trustee-Manager (the IFA ) : Mr David Lim Teck Leong (Chairman and Independent Director and member of the Audit and Risk Committee and Nominating and Remuneration Committee) Mr Jim Chang Cheng-Wen (Executive Director and Chief Executive Officer) Mr Eng Meng Leong (Independent Director, Chairman of the Audit and Risk Committee and member of the Nominating and Remuneration Committee) Mr Quah Ban Huat (Independent Director, member of the Audit and Risk Committee and Chairman of the Nominating and Remuneration Committee) Mr Yong Chao Hsien Jeremy (Non-Executive Director) : 50 Raffles Place #25-03 Singapore Land Tower Singapore : Citigroup Global Markets Singapore Pte. Ltd. 8 Marina View #21-00 Asia Square Tower 1 Singapore : Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore : Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore : CIMB Bank Berhad, Singapore Branch 50 Raffles Place #09-01 Singapore Land Tower Singapore Independent Valuer : KPMG Corporate Finance Pte. Ltd. 16 Raffles Quay #22-00 Hong Leong Building Singapore TP Trustee (as defined herein) : Perpetual (Asia) Limited 8 Marina Boulevard #05-02 Marina Bay Financial Centre Singapore iii

6 INDICATIVE TIMETABLE The timetable for the events which are scheduled to take place after the EGM is indicative only and is subject to change at the Trustee-Manager s absolute discretion. Any changes (including any determination of the relevant dates) to the timetable below will be announced. Event Last date and time for lodgement of Proxy Forms Date and Time : 28 June 2016 at 10:00 a.m. Date and time of the EGM : 30 June 2016 at 10:00 a.m. If approvals for the proposed Internalisation and the proposed Distribution of Returns to Unitholders are obtained at the EGM: Target date for completion of the Internalisation and the Distribution of Returns (as defined herein) ( Completion ) : Expected to be on 2 August 2016 (or such other date as may be agreed between the Trustee-Manager and Evertrust) 1

7 (a business trust constituted on 7 May 2012 under the laws of the Republic of Singapore) Managed by Croesus Retail Asset Management Pte. Ltd. (Registration Number K) Directors of the Trustee-Manager Mr David Lim Teck Leong (Chairman and Independent Director and member of the Audit and Risk Committee and Nominating and Remuneration Committee) Mr Jim Chang Cheng-Wen (Executive Director and Chief Executive Officer) Mr Eng Meng Leong (Independent Director and Chairman of the Audit and Risk Committee and member of the Nominating and Remuneration Committee) Mr Quah Ban Huat (Independent Director and member of the Audit and Risk Committee and Chairman of the Nominating and Remuneration Committee) Mr Yong Chao Hsien Jeremy (Non-Executive Director) Registered Office 50 Raffles Place #25-03 Singapore Land Tower Singapore June 2016 To: Unitholders of CRT ( Unitholders ) Dear Sir/Madam 1. SUMMARY OF APPROVALS SOUGHT The Trustee-Manager is convening the EGM to seek the approval from Unitholders by way of an Ordinary Resolution 1 in respect of (i) Resolution 1: the proposed Internalisation; (ii) Resolution 2: the proposed Distribution of Returns; and (iii) Resolution 3: the proposed Preferential Offering. Unitholders should note that Resolution 1 relating to the proposed Internalisation is inter-conditional with Resolution 2 relating to the proposed Distribution of Returns. In the event that any of Resolutions 1 and 2 is not passed, the Trustee-Manager will not proceed with the proposed Internalisation or the proposed Distribution of Returns. 1 Ordinary Resolution means a resolution proposed and passed as such by a majority being greater than 50.0% or more of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance with the provisions of the CRT Trust Deed (as defined herein). 2

8 In addition, Resolution 3 is contingent upon Resolution 1 and Resolution 2 being passed. In the event that Resolution 1 and Resolution 2 are not passed, the Trustee-Manager will not proceed with Resolution 3. For the avoidance of doubt, in the event that Resolution 1 and Resolution 2 are passed, and Resolution 3 is not passed, the Trustee-Manager will nonetheless proceed with the proposed Internalisation and the proposed Distribution of Returns. 2. THE PROPOSED INTERNALISATION OF THE TRUSTEE-MANAGER 2.1 Introduction The Trustee-Manager is seeking the approval of Unitholders for the proposed internalisation of the Trustee-Manager (which will include the wholly-owned subsidiary of the Trustee-Manager, Croesus Retail Asset Management Co., Ltd. ( CRAM KK )) (the Internalisation ). The Internalisation seeks to internalise the functions of the Trustee-Manager such that the overall management and day-to-day operations of CRT are brought in-house. With the Internalisation, there will be costs savings to Unitholders with the Trustee-Manager s net profits being available for distribution to Unitholders as dividends. The overall costs savings in the management of CRT is expected to result in a long term increase in the yield to Unitholders. (See paragraph 5.1 of this Circular below for further details on the overall costs savings.) To implement the Internalisation, the eventual control over, and beneficial ownership of, the Trustee-Manager has to lie with the Unitholders from time to time. Accordingly, the Internalisation will be implemented through the following steps: the Trustee-Manager has engaged Perpetual (Asia) Limited (the TP Trustee ) to act as the trustee of a trust named as the Trustee-Manager Share Trust (the TM Share Trust ) to be established for the principal purpose of holding all the issued shares of the Trustee-Manager (the TM Shares ) to provide additional benefits to CRT and, to this end, the Unitholders from time to time (the Trust Purpose ); by a declaration of trust under the trust deed for the establishment of the Trust Purpose, the TM Share Trust was constituted with a nominal amount of S$10.00, which forms the initial trust assets of the TM Share Trust, and in accordance with the Trust Purpose, the Unitholders from time to time shall stand to benefit as the beneficiaries of the TM Share Trust. For the avoidance of doubt, the TM Share Trust is not a unit trust. Accordingly, no unit in the TM Share Trust will be issued upon the constitution of the TM Share Trust nor in connection with the proposed Internalisation; 3

9 2.1.3 the TP Trustee has on 12 June 2016 entered into a Share Purchase Agreement (as defined herein) to acquire the TM Shares from Evertrust Asset Management Pte. Ltd., the sole shareholder of the Trustee-Manager ( Evertrust, and the acquisition of all the issued shares of the Trustee-Manager, the Trustee-Manager Acquisition ). Completion of the Trustee-Manager Acquisition will be conditional upon the approval of Unitholders for Resolution 1 and Resolution 2; and in order to implement the proposed Internalisation, the Trustee-Manager shall declare a distribution of returns where equitable interests in the TM Shares will be distributed to Unitholders as an ascertainable class of beneficiaries (the Distribution of Returns ). The Distribution of Returns shall be effected in the following manner: (i) the Trustee-Manager will transfer the Purchase Consideration (as defined herein) to the TP Trustee to be held on trust for CRT in accordance with the Trust Purpose; (ii) the Purchase Consideration shall be utilised under the Share Purchase Agreement to purchase the TM Shares; and (iii) upon completion of the Trustee-Manager Acquisition, the TP Trustee will acquire the TM Shares (in its capacity as trustee of the TM Share Trust), whereupon undivided interests in the TM Shares are held in accordance with the Trust Purpose for the eventual benefit of Unitholders from time to time. Accordingly, the Distribution of Returns will be completed as the Unitholders just prior to the completion of the Trustee-Manager Acquisition are identified as the ascertainable class of beneficiaries. The TP Trustee is a professional third party trustee who is independent from Croesus Merchants International Pte. Ltd., the sponsor of CRT (the Sponsor ). The TP Trustee is a company incorporated in Singapore and registered as a trust company under the Trust Companies Act, Chapter 336 of Singapore and regulated by the Monetary Authority of Singapore. As at 2 June 2016 (the Latest Practicable Date ), the TP Trustee has a paid-up capital of S$8.5 million and the TP Trustee s registered address is located at 8 Marina Boulevard #05-02 Marina Bay Financial Centre, Singapore Upon the completion of the Internalisation, CRT will have in place a novel structure as compared to the real estate investment trusts and business trusts currently listed on the SGX-ST which are under the external management model. (See (i) Appendix A of this Circular for the current holding structure of the Trustee-Manager and CRT and (ii) Appendix B of this Circular for the post-internalisation holding structure of the Trustee-Manager and CRT.) 2.2 Current Shareholders of the Trustee-Manager The Trustee-Manager is currently a wholly-owned subsidiary of Evertrust. Evertrust is (a) 80% owned by Croesus Partners Pte. Ltd. ( Croesus Partners ), (b) 10% owned by Daiwa House Industry Co. Ltd ( Daiwa House ) and (c) 10% owned by Marubeni Corporation ( Marubeni, and Daiwa House and Marubeni shall hereinafter be collectively referred to as the Strategic Partners ). 4

10 Croesus Partners is 80.0% owned by the Sponsor and 20.0% owned by JM Capital Kabushiki Kaisha. The Sponsor is currently owned by Mr Jim Chang Cheng-Wen (who is currently the Chief Executive Officer and Executive Director of the Trustee-Manager) and Mr Yong Chao Hsien Jeremy (who is currently the Non-Executive Director of the Trustee-Manager) in the proportions of 51% and 49%, respectively. The Sponsor also wholly owns CMI Realty Management Kabushiki Kaisha ( CMIRM KK ), which is a company incorporated in Japan to provide asset management services. CMIRM KK is the asset manager of four of CRT s properties (being Torius, which was acquired by CRT in October 2015, Fuji Grand Natalie which was acquired by CRT in April 2016, and the most recent acquisitions by CRT, being Mallage Saga and Feeeal Asahikawa which were both acquired by CRT in May 2016). The asset managers of the seven other properties of CRT are Tozai Asset Management Co., Ltd. (the asset manager for Aeon Town Moriya, Aeon Town Suzuka, Croesus Shinsaibashi, Mallage Shobu and One s Mall) and Marubeni Asset Management Co., Ltd. (the asset manager for Croesus Tachikawa and Luz Omori). Tozai Asset Management Co., Ltd. is an unrelated third party of the Sponsor while Marubeni Asset Management Co., Ltd. is a wholly-owned subsidiary of Marubeni. In addition, the property managers of all of CRT s properties are also unrelated third parties of the Sponsor. In addition, the Trustee-Manager has a wholly-owned subsidiary, CRAM KK, which was incorporated in Japan to employ certain of the employees required for the Trustee-Manager s operations in Japan. (See (i) Appendix A of this Circular for the current holding structure of the Trustee-Manager and CRT and (ii) Appendix B of this Circular for the post-internalisation holding structure of the Trustee-Manager and CRT.) 2.3 Details of the Proposed Internalisation and the Independent Valuation On 12 June 2016, Evertrust, as the vendor, the TP Trustee (in its capacity as trustee of TM Share Trust), as the purchaser, the Trustee-Manager and the Sponsor (as guarantor) entered into a conditional share purchase agreement (the Share Purchase Agreement ) in relation to the Trustee-Manager Acquisition. (See paragraph 4.1 of this Circular below for a summary of the key terms and conditions of the Share Purchase Agreement.) The purchase consideration payable to Evertrust in connection with the Trustee-Manager Acquisition is JPY4,100 million (equivalent to approximately S$50.0 million 1 ) (the Purchase Consideration ) and will be funded out of the Trust Property 2 of CRT pursuant to the Distribution of Returns. The Purchase Consideration represents a discount of between 2.4% (based on the valuation of JPY4,200.1 million) and 8.9% (based on the valuation of JPY4,501.7 million) to the valuation. The Trustee-Manager, in its capacity as trustee-manager of CRT, has commissioned the Independent Valuer, KPMG Corporate Finance Pte. Ltd., to undertake a valuation of the 1 2 Unless otherwise indicated, all conversions from Japanese Yen amounts into Singapore Dollar amounts in this Circular are based on an assumed exchange rate of JPY82.00 : S$1.00. Trust Property has the meaning ascribed to it in the Business Trusts Act, Chapter 31A of Singapore (the BTA ), including the Authorised Investments (as defined in the CRT Trust Deed) of CRT for the time being held or deemed to be held upon the terms of the CRT Trust Deed. 5

11 Trustee-Manager for the purpose of the proposed Internalisation. The date of the valuation of the Trustee-Manager (including its wholly-owned subsidiary CRAM KK) is 7 June 2016 (the Valuation Date ), and the valuation is in the range of JPY4,200.1 million to JPY4,501.7 million (equivalent to approximately S$51.2 million to S$54.9 million). The main valuation methodology adopted by the Independent Valuer to value the Trustee-Manager is the income approach utilising the discounted cash flow method. The Independent Valuer also used the market approach as a cross-check to the valuation range indicated by the income approach. (See Appendix C of this Circular for the method of valuation set out in the full valuation report issued by the Independent Valuer.) The Purchase Consideration of JPY4,100 million (equivalent to approximately S$50.0 million) was agreed after arm s length negotiations between the Trustee-Manager and Evertrust, and was arrived at on a willing-buyer and willing-seller basis, after taking into account, inter alia, the valuation of the Trustee-Manager of JPY4,200.1 million to JPY4,501.7 million (equivalent to approximately S$51.2 million to S$54.9 million). Accordingly, the Purchase Consideration represents a discount of between 2.4% (based on the valuation of JPY4,200.1 million) and 8.9% (based on the valuation of JPY4,501.7 million) to the valuation. (See Appendix C of this Circular for the full valuation report issued by the Independent Valuer.) Post-Internalisation, both the Trustee-Manager and CRT will continue to comply with the BTA and the Business Trusts Regulations in order for CRT to qualify as a registered business trust. In addition, both the Trustee-Manager and CRT will continue to comply with the laws relating to business trusts in the Securities and Futures Act, Chapter 289 of Singapore (the SFA ) and the relevant subsidiary legislation, as well as the listing rules in the Listing Manual of the SGX-ST (the Listing Manual ) that are applicable to a listed business trust. Accordingly, it should be noted that the Trustee-Manager is required under the BTA to be dedicated to CRT and will not carry on any business other than the management and operation of CRT as its trustee-manager Introduction to the TM Share Trust The TM Share Trust is a trust that has been constituted as part of the Internalisation by a declaration of trust by the TP Trustee. Under the trust deed constituting the TM Share Trust dated 12 June 2016 (the TM Share Trust Deed ), the Trust Purpose is to provide additional benefits to CRT and, to this end, the Unitholders from time to time. Accordingly, Unitholders will form the ascertainable class of beneficiaries being the unitholders of CRT and such Unitholders from time to time will stand to benefit from the TM Share Trust in accordance with the Trust Purpose, upon the completion of the Trustee-Manager Acquisition when the TM Shares will form part of the trust assets. Thereafter, each of the Unitholders from time to time will stand to benefit from the beneficial interest in the TM Shares in proportion to such Unitholder s unitholding interest in CRT. For the avoidance of doubt, the TM Share Trust is not a unit trust and accordingly, no unit in the TM Share Trust will be issued to each individual Unitholder. Instead, the TP Trustee will stand possessed of all the issued shares of the Trustee-Manager for the time 1 Section 6(3) of the BTA. 6

12 being on trust on behalf of and for the Trust Purpose, to the benefit of the Unitholders from time to time pari passu, each of whom as the ascertainable class of beneficiaries, has an undivided interest in the TM Shares. Accordingly, no Unitholders will be conferred with any interest or share in any particular TM Share. In addition, it should be noted that the TP Trustee is subject to the provisions of the TM Share Trust Deed. In the event that the Trustee-Manager Acquisition cannot be completed for any reason whatsoever, the TP Trustee will continue to hold the Purchase Consideration on trust for CRT and such monies may be distributed by the TP Trustee to CRT in accordance with the Trust Purpose. Changes to a Unitholder s unitholding interests in CRT will correspondingly change such Unitholder s proportionate equitable interest in the Trustee-Manager. Post-Internalisation, a Unitholder s equitable interest in the TM Shares is only transferable together with a transfer of its Units. Accordingly, if a Unitholder ceases to own any Units, he will concurrently cease to own any equitable interest in the TM Shares. For the avoidance of doubt, the TM Shares will not be listed on the SGX-ST. Pursuant to the Internalisation, Unitholders who are substantial unitholders 1 of CRT will necessarily and simultaneously be deemed to be substantial shareholders of the Trustee-Manager. Under Sections 135, 136 and 137 of the SFA read with Section 137J of the SFA or Section 137P of the SFA (as the case may be), Unitholders will be required to notify both the Trustee-Manager and the TM Share Trustee of (1) their deemed and direct unitholdings, (2) any subsequent change in the percentage level of such unitholdings (rounded down to the next whole number), (3) their ceasing to hold 5.0% or more of the total unitholding, or (4) where the percentage of their interest in the shares of the Trustee-Manager reaches, crosses or falls below 15.0%, 30.0%, 50.0% or 75.0% within two business days of becoming aware of (a) such deemed or direct unitholdings, (b) the change in percentage level of such unitholdings, (c) such cessation from being a substantial unitholder, and (d) such change in the percentage of their interest reaching, crossing or falling below 15.0%, 30.0%, 50.0% or 75.0%, respectively. Accordingly, the Trustee-Manager will ultimately be beneficially owned by Unitholders from time to time as the ascertainable class of beneficiaries of the TM Share Trust. Pursuant to the Internalisation, through the TM Share Trust Deed, Unitholders will have certain rights in relation to the corporate actions of the Trustee-Manager. After the Internalisation, Unitholders will have the right among others, to endorse the appointment or re-appointment of each of the directors of the Trustee-Manager at the annual general meeting of CRT, by way of ordinary resolution. The TP Trustee will procure the resignation or removal of any director of the Trustee-Manager whose appointment or re-appointment has not been endorsed by the Unitholders at the annual general meeting of CRT. 1 substantial unitholder means a person who has an interest or interests in Units or units in the TM Share Trust representing not less than 5.0% of the total voting rights of all the Unitholders, or beneficial owners of the TM Share Trust. 7

13 (See paragraph 4.2 of this Circular below for a summary of the key terms and conditions of the TM Share Trust Deed.) 2.5 Payment of Management Fees and Declaration of Dividends The Trustee-Manager will continue to derive its income from the provision of trustee and management services to CRT in accordance with the existing provisions 1 under the trust deed constituting CRT dated 7 May 2012 (as amended) (the CRT Trust Deed ), and largely in Units. Accordingly, notwithstanding that the Trustee-Manager is internalised, the Trustee-Manager will continue to hold the assets of CRT on trust, and will also continue to provide management services to CRT. In return for the provision of such trustee and management services, the Trustee-Manager will continue to be paid by CRT in accordance with the existing provisions of the CRT Trust Deed. However, excess cash from the Trustee-Manager s income (after deducting the costs of operating the Trustee-Manager, like the remuneration of the employees of the Trustee-Manager and the payment of directors fees, finance costs and income tax) will be distributed to the TP Trustee by way of declaration of dividends in cash. In turn, such dividends will be paid to the TP Trustee as the sole shareholder of the Trustee-Manager and, under the TM Share Trust Deed, the TP Trustee shall pay out all dividends received from the Trustee-Manager as distributions to the beneficiaries, being the Unitholders. It is intended that such distributions by the TP Trustee (as and when such distributions are available) will be paid to Unitholders together with the payment of the distributions of CRT by the Trustee-Manager under the CRT Trust Deed. For the avoidance of doubt, notwithstanding that the Trustee-Manager will continue to receive part of its fees in Units, only cash will be distributed out of the trust assets of the TM Share Trust. Please refer to the following illustration which sets out how the Trustee-Manager s net profits will be distributed to the Unitholders: Step 1: CRT Management fees under the CRT Trust Deed 1 Trustee-Manager services Trustee- Manager Note: (1) Under the CRT Trust Deed, the Trustee-Manager has the discretion to elect to receive a portion of its management fees in Units and for the purposes of this Circular, it is assumed that up to 80.0% of the management fees received by the Trustee-Manager will continue to be paid in the form of Units. 1 The fee formula provisions in the CRT Trust Deed have been effective since the initial public offering of CRT and have not been amended since. On the basis that these fee formulae were determined on arm s length basis and are on normal commercial terms and not prejudicial to the interests of CRT and the Unitholders, the Trustee-Manager does not intend to vary these fee formula provisions. 8

14 Step 2: Trustee- Manager 1 Management fees less off operating expenses, finance costs and income tax to derive net profits Declaration of net profits as dividends TM Share Trust 2 Notes: (1) Units that the Trustee-Manager receives as management fees during the course of the relevant period will be sold to pay for its operating expenses, finance costs and income tax. (2) The dividends declared and paid by the Trustee-Manager will be held by the TP Trustee in its capacity as trustee of the TM Share Trust. Step 3: TM Share Trust CRT Dividends from Trustee- Manager 1 Unitholders Distributable Income Note: (1) All dividends received from the Trustee-Manager will be distributed to Unitholders. It is expected that the TP Trustee will pay out the dividends to Unitholders at the same time that distributions from CRT are paid out to Unitholders. 2.6 Continued Support from the Croesus Group, the Strategic Partners and the Key Persons The Croesus Group ROFRs CRT currently benefits from right of first refusals ( ROFRs ) from each of the Sponsor, Croesus Group Pte. Ltd. and Croesus International Inc. (collectively, the Croesus Group ). Each of the ROFRs provided by the members of the Croesus Group (the Croesus Group ROFRs ) lasts for so long as: (i) (a) the Trustee-Manager or any of its related corporations remains as the trustee-manager of CRT and the Trustee-Manager is wholly-owned by Evertrust; and (b) the Sponsor and/or any of its related corporations, alone or in aggregate, holds directly or indirectly 15.0% or more of the nominal amount of all voting shares of Evertrust; or 9

15 (ii) the Sponsor and/or any of its related corporations, alone or in aggregate, holds directly or indirectly 15.0% or more of the nominal amount of all voting shares of the Trustee-Manager for the time being of CRT. Under the existing terms of the Croesus Group ROFRs, these Croesus Group ROFRs will be terminated post-internalisation as the Trustee-Manager is no longer wholly-owned by Evertrust such that the Sponsor will, no longer indirectly through Evertrust, hold more than 15% of the voting shares of the Trustee-Manager. Notwithstanding the foregoing, each of the members of the Croesus Group has executed a fresh ROFR dated 20 May 2016 on the same terms as their current respective Croesus Group ROFRs (the Amended Croesus Group ROFRs ), save for the duration of the ROFRs, which shall be defined such that each Amended Croesus Group ROFR will continue to subsist until 30 June 2020, or such time after 30 June 2020 for so long as either Mr Yong Chao Hsien Jeremy or Mr Jim Chang Cheng-Wen remains on the Board (as defined herein), or such replacement trustee-manager of CRT, as the case may be, unless in the case of a voluntary resignation during the initial term. (See Appendix D of this Circular for a summary of the terms of the Amended Croesus Group ROFRs.) The Strategic Partner ROFRs CRT also benefits from ROFRs from each of Daiwa House and Marubeni (the Strategic Partner ROFRs ). Under the existing terms of the Strategic Partner ROFRs provided by the Strategic Partners, the Strategic Partner ROFRs will subsist for so long as the Strategic Partners hold directly or indirectly any voting shares of the Trustee-Manager or any replacement trustee-manager of CRT. Although the Strategic Partner ROFRs were not contemplated to subsist in a situation after the completion of the Internalisation (following which the Strategic Partners interest in the Trustee-Manager will only be a beneficial interest that is proportionate to their unitholding in CRT and shared among all the other Unitholders), each of the Strategic Partners have executed a fresh ROFR dated 31 May 2016 on the same terms as their current respective Strategic Partner ROFR (the Amended Strategic Partner ROFRs ), save for the duration of the ROFRs, which shall be defined such that each Amended Strategic Partner ROFR will continue to subsist until 30 June 2018, or such time after 30 June 2018 unless terminated by the respective Strategic Partners. For the avoidance of doubt, each of the Strategic Partners shall only have the right to terminate their respective Amended Strategic Partner ROFRs after 30 June (See Appendix D of this Circular for a summary of the terms of the Amended Strategic Partner ROFRs.) 10

16 2.6.3 Service agreements to be entered into with key directors and key executive officers of the Trustee-Manager In connection with the Internalisation and in addition to the continued support from the members of the Croesus Group and the Strategic Partners, each of the following key persons ( Key Persons ): (i) (ii) Mr Jim Chang Cheng-Wen (Chief Executive Officer and Executive Director); Mr Yong Chao Hsien Jeremy (Non-Executive Director); (iii) Mr Tetsuo Ito (Chief Financial Officer and Head of Investor Relations 1 ); (iv) (v) Mr Kiyoshi Sato (Chief Investment Officer); and Mr Shunji Miyazaki (Chief Asset Management Officer), have agreed to enter into service agreements with the Trustee-Manager (the Service Agreements ). In connection with and for the purposes of the Internalisation, the Trustee-Manager is pleased to announce the establishment of a nominating and remuneration committee (the Nominating and Remuneration Committee ) comprising Mr Lim Teck Leong, David, Mr Eng Meng Leong, and Mr Quah Ban Huat to deliberate on the Trustee-Manager s remuneration policy and remuneration-related matters, including but not limited to ensuring that the terms of the Service Agreements are reasonable and effective as part of the Trustee-Manager s implementation of an effective remuneration policy to incentivise and motivate its employees. Mr Quah Ban Huat is the chairman of the Nominating and Remuneration Committee. The Service Agreements have been reviewed by the Nominating and Remuneration Committee and the material terms are disclosed in the following paragraphs. The Service Agreements for Mr Yong Chao Hsien Jeremy and Mr Jim Chang Cheng-Wen shall be valid for an initial term commencing from the date of completion of the Trustee-Manager Share Acquisition up to and until 30 June 2020, for so long as (a) CRT remains listed on the mainboard of the SGX-ST and (b) (unless in the case of a voluntary resignation during the initial term) Mr Yong Chao Hsien Jeremy or, as the case may be, Mr Jim Chang Cheng-Wen remains a director of the Trustee-Manager. The Service Agreements for the other key executive officers of the Trustee-Manager, being Mr Tetsuo Ito, Mr Kiyoshi Sato and Mr Shunji Miyazaki shall be valid for an initial term commencing from the date of completion of the Trustee-Manager Share Acquisition up to and until 30 June 2018, for so long as CRT remains listed on the mainboard of the SGX-ST. 1 Mr Tetsuo Ito has been appointed as Head of Investor Relations effective from 9 November

17 Each of the Service Agreements thereafter shall automatically be renewed from year to year (on such terms and conditions as the relevant Key Person and the Trustee-Manager may agree) unless terminated in accordance with the respective Service Agreements. For the initial term of the respective Service Agreements, each of the Service Agreements may only be terminated by the Trustee-Manager by six months notice in writing or by the payment of six months base salary in lieu of notice unless the conditions provided for above are triggered, upon which Mr Yong Chao Hsien Jeremy, Mr Jim Chang Cheng-Wen or the other Key Persons, as the case may be, may terminate their respective Service Agreements by three months notice in writing. Thereafter, each of the Service Agreements may be terminated by written notice of three months given by either party to the other provided that the Trustee-Manager shall have the option to pay three months base salary in lieu of any required period of notice. Except for such payment in lieu of notice as provided for under the respective Service Agreements, no compensation or damages is payable by the Trustee-Manager to each of the Key Persons in respect of their termination in accordance with the terms of their respective Service Agreements. Each of the Service Agreements may also be terminated by the Trustee-Manager at any time without notice or payment upon the occurrence of events such as gross misconduct or wilful neglect by the Key Person in the discharge of his duties, any serious or persistent breach of his obligations under the Service Agreement, non-observance with directions from the Board, non-performance of his obligations under the Service Agreement or disqualification of the Key Person from acting as a Director (if applicable) for any reason. Based on the remuneration of the Key Persons under their respective Service Agreements, in bands of S$250,000, the remuneration of the Key Persons shall be as follows: Remuneration Bands Salary Bonus 1 Benefits 2 Other Total % % % % S$250,000 S$500,000 Jim Chang Cheng-Wen Yong Chao Hsien Jeremy Kiyoshi Sato Shunji Miyazaki Tetsuo Ito Notes: (1) Bonus is estimated based on the actual bonus provided from 1 July 2015 to 31 May (2) Other benefits are estimated based on the respective Service Agreements and the actual other benefits provided for the financial year ending 30 June

18 Save as disclosed above, there are no other existing service agreements between the Trustee-Manager, CRT or their subsidiaries and any of the Key Persons which provide for benefits upon termination of employment. In addition, in the event that the proposed Internalisation is implemented, and to demonstrate his continued support and dedication to CRT, Mr Yong Chao Hsien Jeremy has agreed to take on an executive role in the Trustee-Manager, such that the management structure of CRT will be as follows: Mr Jim Chang Cheng-Wen (Chief Executive Officer) Mr Yong Chao Hsien Jeremy (Managing Director) Mr Tetsuo Ito (Chief Financial Officer & Head of Investor Relations) Mr Shunji Miyazaki (Chief Asset Management Officer) Mr Kiyoshi Sato (Chief Investment Officer) Mr Yong Chao Hsien Jeremy will assume the executive position of Managing Director of the Trustee-Manager. As Managing Director, Mr Yong Chao Hsien Jeremy will work closely with the Chief Executive Officer to direct CRT s operations and give strategic guidance and direction to the management of the Trustee-Manager and CRT, to achieve the mission and objectives of CRT. His primary roles and responsibilities will include the following: (i) (ii) (iii) advising the board of directors of the Trustee-Manager (the Board ) in preparing a corporate plan and annual business plan and work closely with the Chief Executive Officer to monitor progress against these plans to ensure that the Trustee-Manager attains its objectives for CRT as cost-effectively and efficiently as possible; providing strategic advice and guidance to the Chairman of the Board and the rest of the Board members, undertaking business development for the Trustee-Manager by keeping the Board aware of developments within the industry and to ensure that the appropriate policies are developed to meet the Trustee-Manager s mission and objectives and to comply with all relevant statutory and other regulations, and to ensure that CRT remains at the forefront of the industry; establishing and maintaining effective formal and informal communication channels with other stakeholders generally; 13

19 (iv) (v) representing the Trustee-Manager in negotiations and dealings with other key contacts of CRT, such as banks and other professional service providers; and developing and maintaining an effective marketing and public relations strategy for CRT. 2.7 Total Cost of the Internalisation The total cost of the Internalisation to CRT is currently estimated to be approximately S$55.4 million, comprising: (i) the Purchase Consideration of JPY4,100 million (equivalent to approximately S$50.0 million); and (ii) the estimated professional and other fees and expenses (inclusive of the miscellaneous costs and stamp duty) of approximately S$5.4 million incurred or to be incurred by CRT in connection with the Internalisation. 2.8 Method of Financing The Trustee-Manager intends to finance the proposed Internalisation through a combination of the following: the proceeds from the Preferential Offering ranging from S$19.5 million to S$21.6 million; part of the proceeds from the issuance of the S$60,000, % fixed rate notes due 2020 on 13 April 2016 (the Notes ) under the U.S.$500,000,000 Euro Medium Term Note Programme established by the Trustee-Manager on 3 January 2014 (the EMTN Programme ) of approximately S$24.6 million; and CRT s existing cash balances of approximately S$10.0 million. 2.9 If Resolution 3 relating to the proposed Preferential Offering is not passed, the proposed Internalisation and the proposed Distribution of Returns will nonetheless proceed and the Trustee-Manager will endeavour to adopt and implement an optimal financing plan to fund the balance Purchase Consideration, including but not limited to the issuance of other capital markets instruments, debt facilities and/or utilisation of the internal cash reserves of CRT Requirement for Unitholder s Approval The Trustee-Manager is wholly owned by Evertrust. Accordingly, for purposes of Chapter 9 of the Listing Manual, Evertrust (being a controlling shareholder of the Trustee-Manager) is an interested person of CRT. Interested Person Transaction under the Listing Manual Under Chapter 9 of the Listing Manual, where CRT proposes to enter into a transaction with an interested person (as defined in the Listing Manual) and the value of the 14

20 transaction (either in itself or when aggregated with the value of other transactions, each of a value equal to or greater than S$100,000, with the same interested person during the same financial year) is equal to or exceeds 5.0% of CRT s latest audited net tangible assets ( NTA ), Unitholders approval is required in respect of the transaction. Based on CRT s audited financial statements for the financial year ended 30 June 2015 ( FY2015, and the audited financial statements for FY2015, the FY2015 Audited Financial Statements ), the NTA of CRT was approximately JPY43,586 million (equivalent to approximately S$531.5 million) as at 30 June As CMIRM KK is also wholly owned by the Sponsor and will be paid under its asset management agreement, the fees paid under such asset management agreement with CRT will also constitute an interested person transaction under Chapter 9 of the Listing Manual (the Existing Interested Person Transaction ). Given the Purchase Consideration of JPY4,100 million (equivalent to approximately S$50.0 million) (which is 9.4% of the NTA of CRT as at 30 June 2015) and aggregated with the value of the Existing Interested Person Transaction, the value of the Trustee-Manager Acquisition exceeds the said threshold. Please refer to the following table which sets out the foregoing information: Listing Rule 906 Calculation NTA (JPY m) (FY2015 Audited Financial Statements)... 43,586 Purchase Consideration (JPY m)... 4,100 Existing Interested Person Transaction (JPY m) Purchase Consideration as a%oflatest audited NTA % (Exceeds 5.0% threshold) Details of the Existing Interested Person Transaction may be found in Appendix F of this Circular. Therefore, the proposed Internalisation will constitute an interested person transaction under Chapter 9 of the Listing Manual, in respect of which Unitholders approval is required Advice of the Independent Financial Adviser The Trustee-Manager has appointed the IFA to advise the Independent Directors and the Audit and Risk Committee in relation to the proposed Internalisation. A copy of the letter issued by the IFA (the IFA Letter ), containing the IFA s advice in full, is set out in Appendix E of this Circular. Unitholders are advised to read the IFA Letter carefully. Based on the evaluation undertaken by the IFA having considered, inter alia, the factors described in the IFA Letter and the information made available to the IFA as at the Latest Practicable Date, and subject to the qualifications and assumptions made in the IFA Letter, the IFA is of the opinion that as of the Latest Practicable Date, the Purchase Consideration in relation to the proposed Internalisation is on balance, fair and reasonable under current prevailing market, economic, industry, monetary and other relevant conditions. Accordingly, the IFA is of the opinion that the terms of the proposed 15

21 Internalisation are based on normal commercial terms and are not prejudicial to the interests of CRT and its minority Unitholders and that the Independent Directors and the Audit and Risk Committee can recommend that Unitholders vote in favour of the resolution in connection with the proposed Internalisation to be proposed at the EGM. Details of the interested person transactions entered into between CRT and the Sponsor and their respective subsidiaries and associates, during the course of the current financial year up to the Latest Practicable Date ( Existing Interested Person Transactions ), which are the subject of aggregation pursuant to Rule 906 of the Listing Manual, may be found in Appendix F of this Circular Other Information Relative figures computed on the bases in Rule 1006 of the Listing Manual The relative figures computed on the basis set out in Rule 1006(b) and Rule 1006(c) of the Listing Manual is as follows: the net profits attributable to the assets acquired compared with CRT s net profits; and the aggregate value of the consideration given compared with CRT s market capitalisation. Comparison of Internalisation CRT Relative figure (%) Rule 1006(b) Net Property Income ( NPI ) (JPY 000)... Rule 1006(c) Purchase consideration compared with CRT s market capitalisation (3)... (1) 4,681,121 (2) N.A. JPY4,100 million (approximately S$50.0 million) Approximately JPY47,638 million (S$581.0 million) 8.6 Notes: (1) There is no NPI associated with the Internalisation as there is no property involved in the acquisition of the Trustee-Manager. (2) The NPI of CRT is extracted from the FY2015 Audited Financial Statements. (3) Based on 716,965,618 Units in issue and multiplied by the weighted average price of S$ per Unit on 10 June 2016 (being the Market Day immediately preceding the Share Purchase Agreement). Rule 1006(d) of the Listing Manual does not apply in relation to the Internalisation as no Units will be issued as consideration for the Internalisation. As the relative figure under Rule 1006(c) exceeds 5.0% but does not exceed 20.0%, the Internalisation is a discloseable transaction under Chapter 10 of the Listing Manual and the specific approval of Unitholders is not required for the Internalisation. 16

22 2.13 Other Information Financial Performance of the Trustee Manager The following table sets out the profit and loss summary of the Trustee-Manager and CRAM KK (the Trustee-Manager Group ), based on the audited consolidated financial statements of the Trustee-Manager Group for FY2015. For comparison, an illustrative pro forma profit and loss summary has been presented below strictly for illustrative purposes: Profit and Loss Summary of the Trustee-Manager Group 30 June June 2015 Trustee-Manager Group Trustee-Manager Group Actual (JPY 000) Pro Forma (JPY 000) Revenue ,312 (1) 700,651 (2) Cost of sales... (214,724) (3) Gross profit , ,651 Dividend income from investment securities... 13,158 (4) Interest income... 2 Other income Employee compensation... (198,803) (198,803) Administrative expenses... (169,306) (169,306) Other expenses... (4,827) (5,475) (5) Finance cost.... (5,286) (5,286) Realised loss on sale of investment securities... (19,003) Profit before change in fair value... 35, ,781 Current taxes... (3,270) (47,801) (6) Net profit for the year... 32, ,980 Other comprehensive income Net gain on fair value change of investment securities.... (330) (7) Total comprehensive income for the year... 32, ,980 Notes: (1) Includes acquisition fee of JPY79,200,000 for One s Mall. (2) Includes additional base fee and performance fee from the Torius Acquisition (as defined herein) and the 2016 Acquisitions (as defined herein) and excludes acquisition fees. (3) Cost of sales comprises (i) the acquisition fees associated with acquisitions of new properties by CRT which are paid to the Trustee-Manager, and which are in turn paid by the Trustee-Manager to the Sponsor; (ii) monthly management fees paid to the Sponsor; and (iii) consultation and service fees paid to the Japan asset managers, being Tozai Asset Management Co., Ltd., and Marubeni Asset Management Co., Ltd. by the Trustee-Manager in its own corporate capacity. In respect of (i), acquisition fees are excluded as they will no longer be paid to the Sponsor but will be declared as dividends to Unitholders. In respect of (ii) and (iii), such consultation and/or management services were provided to the Trustee-Manager to facilitate and assist the Trustee-Manager in the performance of its own duties and obligations but are no longer required as the Trustee-Manager now has the relevant experience, expertise and the network to perform its duties without any continuing external advice. Accordingly, such consultation and/or management service fees have been removed from expenses as they will be discontinued post-internalisation. 17

23 (4) Nil, as all of the Units owned by the Trustee-Manager will be divested (which is assumed to take place at the start of FY2015). (5) Includes brokerage expenses from divestment of all Units held by the Trustee-Manager (which is assumed to take place at the start of FY2015). (6) Higher taxes paid as a result of higher profit before tax. (7) Nil, as all of the Units held by the Trustee-Manager will be divested (which is assumed to take place at the start of FY2015). (See Appendix H of this Circular for further details on the pro forma profit and loss summary of the Trustee-Manager Group and the accompanying assumptions and bases.) The Internalisation is not expected to have any material impact on the day-to-day operations of the Trustee-Manager which will continue as usual. Based on the profit and loss summary and the explanations set out in the notes relating thereto, the material change under the cost of sales line item is due to: (i) the discontinuation of consultation and/or management service arrangements which are no longer required as the Trustee-Manager now has the relevant experience, expertise and the network to perform its duties without any continuing external advice and (ii) the exclusion of acquisition fees which will no longer be payable to the Sponsor. 3. RISK FACTORS IN RELATION TO THE PROPOSED INTERNALISATION 3.1 Post-Internalisation, the Trustee-Manager has to directly employ its own staff and the loss of any key personnel or lack of ability to employ experienced and qualified personnel may adversely affect its operations. The Trustee-Manager s performance depends, in part, upon the continued service and performance of the Key Persons. In addition, the performance of the Trustee-Manager will largely depend on its ability to attract experienced and qualified personnel. These Key Persons may leave the employment of the Trustee-Manager. Notwithstanding that service agreements have been entered into with key directors and key executive officers of the Trustee-Manager, which should reduce the risk of loss of Key Persons before at least 30 June 2018, if any of the above were to occur, the Trustee-Manager will need to spend time searching for a replacement and the duties which such Key Persons are responsible for may be affected. The loss of any of these Key Persons and the inability of the Trustee-Manager to employ experienced and qualified personnel to replace and/or to supplement the management team could have a material adverse effect on the performance of the Trustee-Manager and this may have a material and adverse impact on CRT s operations and financial condition which may consequently affect its ability to make distributions to Unitholders. 3.2 Post-Internalisation, the Trustee-Manager will not be able to leverage on the Sponsor s experience. Post-Internalisation, notwithstanding that the Amended Croesus Group ROFRs and the Amended Strategic Partner ROFRs will ensure continued support for the Trustee-Manager s growth strategy and will provide CRT with continuing access to the acquisition opportunities and pipeline afforded by the Croesus Group and Strategic Partners, there is no assurance that the Sponsor will not dispose of all or part of its direct and indirect effective interest in the Units. In the event that the Sponsor decides to 18

24 transfer or dispose of its Units, the Sponsor would have no interest in CRT as a whole and CRT may no longer be able to leverage on the Sponsor s support and this may have a material and adverse impact on CRT s operations and financial condition which may consequently affect its ability to make distributions to Unitholders. 3.3 While the Amended Croesus Group ROFRs and the Amended Strategic Partner ROFRs will continue to subsist until 30 June 2020 and 30 June 2018 respectively, the Amended Croesus Group ROFRs and the Amended Strategic Partner ROFRs may be terminated if the conditions for the ROFRs to remain in full force and effect are not satisfied. To demonstrate support from the members of the Croesus Group and the Strategic Partners, the Amended Croesus Group ROFRs and Amended Strategic Partner ROFRs have been voluntarily granted to CRT in order to provide CRT with continuing access to the acquisition opportunities and pipeline afforded by the Croesus Group and Strategic Partners. However, it should be noted that the term of the Amended Croesus Group ROFR specifies that the Amended Croesus Group ROFR will subsist only until 30 June 2020, pursuant to which the Amended Croesus Group ROFR may be terminated at such time after 30 June 2020 in the event that either (a) Mr Yong Chao Hsien Jeremy or Mr Jim Chang Cheng-Wen leaves the Board, or (b) the Trustee-Manager is replaced. Next, it should be noted that the term of the Amended Strategic Partner ROFRs specify that each of the Amended Strategic Partner ROFR will subsist only until 30 June 2018, pursuant to which each of the Strategic Partners shall have the right to terminate their respective Amended Strategic Partner ROFR after 30 June In the event that the Amended Croesus Group ROFRs or the Amended Strategic Partner ROFRs are terminated, this may adversely affect CRT s pipeline of future acquisitions as the Trustee-Manager would have to independently source for potential acquisitions. 4. SUMMARY OF KEY TERMS OF THE SHARE PURCHASE AGREEMENT AND TM SHARE TRUST DEED 4.1 Principal Terms and Conditions of the Share Purchase Agreement The principal terms of the Share Purchase Agreement include, among others, the following: Purchase Consideration The Purchase Consideration payable in cash under the Share Purchase Agreement to Evertrust in connection with the proposed Internalisation is JPY4,100 million (equivalent to approximately S$50.0 million). There will be no adjustments to the Purchase Consideration and the Share Purchase Agreement provides for the Trustee-Manager (including its wholly-owned subsidiary CRAM KK) to be delivered at completion (based an agreed completion balance sheet between the parties to the Share Purchase Agreement) with a minimum net asset value of at least JPY93.6 million (equivalent to approximately S$1.1 million). 19

25 The Purchase Consideration of JPY4,100 million (equivalent to approximately S$50.0 million) was determined following arm s length negotiations between the Trustee-Manager and Evertrust, and was arrived at on a willing-buyer and willing-seller basis, after taking into account the valuation of the Trustee-Manager of JPY4,200.1 million to JPY4,501.7 million (equivalent to approximately S$51.2 million to S$54.9 million). Accordingly, the Purchase Consideration represents a discount of between 2.4% (based on the valuation of JPY4,200.1 million) and 8.9% (based on the valuation of JPY4,501.7 million) to the valuation. (See Appendix C of this Circular for the full valuation report issued by the Independent Valuer.) Valuation of the TM Shares The Trustee-Manager, in its capacity as trustee-manager of CRT, has commissioned the Independent Valuer to undertake a valuation of the Trustee-Manager for the purpose of the proposed Internalisation. The value of the Trustee-Manager (including its wholly-owned subsidiary CRAM KK) as at the Valuation Date is in the range of JPY4,200.1 million to JPY4,501.7 million (equivalent to approximately S$51.2 million to S$54.9 million). The main valuation methodology adopted by the Independent Valuer to value the Trustee-Manager is the income approach utilising the discounted cash flow method. The Independent Valuer also used the market approach as a cross-check to the valuation range indicated by the income approach. (See Appendix C of this Circular for the method of valuation set out in the full valuation report issued by the Independent Valuer.) Conditions Precedent Completion under the Share Purchase Agreement is subject to and conditional upon: (i) (ii) the approval from Unitholders for the proposed Internalisation obtained at a duly convened general meeting of CRT; the approval from Unitholders for the proposed Distribution of Returns obtained at a duly convened general meeting of CRT; and (iii) obtaining such licences, authorisations, orders, grants, confirmations, permissions, registrations, exemptions and/or other approvals as may be required under the relevant laws, regulations or the provisions of the Trust Deed in order to effect the proposed Internalisation as contemplated in this Circular, and such licences, authorisation, orders, grants, confirmations, permissions, registrations, exemptions and/or other approvals remaining in full force and effect, (collectively, the Conditions ). Provided that the Conditions are satisfied, the Share Purchase Agreement further provides that completion shall take place within 21 Business Days after the later of (i) date of the EGM and (ii) the receipt of the licences, authorisations, orders, grants, 20

26 confirmations, permissions, registrations, exemptions and/or other approvals referred to in paragraph 4.1.3(iii). In the event that Resolution 3 relating to the Preferential Offering is not approved by Unitholders, the Share Purchase Agreement provides that the TP Trustee and the Trustee-Manager shall use their best endeavours to satisfy the Purchase Consideration for completion to take place as soon as practicable Date of Completion Completion is condition on the fulfilment of the Conditions and shall take place no later than 21 Business Days after the later of (i) date of the EGM and (ii) the receipt of the licences, authorisations, orders, grants, confirmations, permissions, registrations, exemptions and/or other approvals referred to in paragraph 4.1.3(iii), or such other date as the parties to the Share Purchase Agreement may agree in writing which shall be no later than 31 December 2016 (the Long Stop Date ). In the event that any of the Conditions has not been fulfilled prior to the Long Stop Date, the Share Purchase Agreement (other than the surviving provisions) shall automatically terminate and neither party to the Share Purchase Agreement shall have any claim thereunder against the other party (save in respect of claims arising out of any antecedent breach of the Share Purchase Agreement) Limitation of Liability Under the Share Purchase Agreement, Evertrust (as the seller) shall not be liable in respect of any claim: (i) (ii) (in the case of any claim in respect of breaches of tax warranties) unless within five years after Completion; (in the case of any claim in respect of breaches of tax indemnities) unless a written notice of the claim is given by the TP Trustee (as the purchaser) or the Trustee-Manager within the applicable statutory look back or limitation period within which the tax in connection to the claim being made can lawfully be assessed by the relevant tax authority plus six months thereafter; and (iii) (in the case of any other claims) unless within eighteen months after Completion. Claims are subject to the following: (i) (ii) de minimis: claims in respect of any individual claim (or a series of claims arising from substantially identical facts or circumstances) where the liability agreed or determined in respect of such claim or series of claims does not exceed S$50,000; maximum liability: the aggregate liability of the seller in respect of claims under the Share Purchase Agreement shall not exceed a maximum liability of 30.0% of the Purchase Consideration. 21

27 The maximum liability provision does not apply to limit the seller s liability in respect of claims by the purchaser against the seller under the Share Purchase Agreement in relation to tax claims (comprising claims in respect of breaches of tax warranties and tax indemnities) Guarantee from Sponsor The Sponsor has unconditionally and irrevocably agreed to guarantee the due and punctual performance and observance by Evertrust (as seller) of all its obligations, commitments, undertakings, warranties and indemnities under or pursuant to the Share Purchase Agreement. Under the guarantee, the Sponsor has agreed to indemnify the TP Trustee (as the purchaser) against all losses, liabilities, costs (including without limitation reasonable legal costs), charges, expenses, actions, proceedings, claims and demands which the TP Trustee (as the purchaser) may suffer through or arising from any breach by Evertrust (as seller). For the avoidance of doubt, the limitation of liability provisions under the Share Purchase Agreement apply to limit the guarantee by the Sponsor. 4.2 Principal Terms and Conditions of the TM Share Trust Deed Implementation of the proposed Internalisation and the proposed Distribution of Returns In order to implement the proposed Internalisation and the proposed Distribution of Returns, the TM Share Trust Deed will, among others, provide that: (i) (ii) the TM Share Trust will be constituted with an amount of S$10.00, which shall form the initial trust assets of the TM Share Trust and will stand to benefit the Trust Purpose; in accordance with the Trust Purpose, Unitholders from time to time shall constitute the ascertainable class of beneficiaries for whom the TM Share Trust has been established; (iii) the Purchase Consideration shall be utilised under the Share Purchase Agreement to purchase the TM Shares in accordance with the Trust Purpose; (iv) (v) upon completion of the Trustee-Manager Acquisition and the Distribution of Returns, the TP Trustee will acquire the TM Shares (in its capacity as trustee of the TM Share Trust), whereupon undivided interests in the TM Shares are held in accordance with the Trust Purpose for the eventual benefit of Unitholders from time to time and such Unitholders from time to time shall form the ascertainable class of beneficiaries distributed; and distributions from the TM Share Trust shall be in the form of cash only. 22

28 4.2.2 Powers of the TP Trustee under the TM Share Trust Deed The TM Share Trust Deed expressly sets out that the TP Trustee will not have any power of investment and will not actively engage in any management or investment decision. The TP Trustee shall distribute all dividends received from the Trustee-Manager in accordance with the Trust Purpose, meaning that such dividends will eventually be paid out as distributions to the Unitholders from time to time Rights of the beneficiaries of the TM Share Trust Post-Internalisation, the Unitholders from time to time will be entitled to exercise certain rights in relation to the Trustee-Manager which are akin to shareholder rights. Such additional rights are conferred by the TM Share Trust Deed upon the Unitholders from time to time and will result in an improved corporate governance and accountability framework. At present, the directors of the Trustee-Manager are appointed by Evertrust as the sole shareholder of the Trustee-Manager. Moreover, Evertrust is entitled to exercise all shareholder rights in relation to the Trustee-Manager in accordance with the Companies Act, Chapter 50 of Singapore (the Companies Act ) and Unitholders have no rights in relation to the selection of directors or any other shareholder rights in relation to the Trustee-Manager. Following the implementation of the Internalisation, and through the provisions of the TM Share Trust Deed, an improved corporate governance and accountability framework will be put in place as further described below. In order to improve accountability, the principal terms of the TM Share Trust Deed include, among others, the following provisions to provide rights to the Unitholders from time to time, save as expressly provided for by any or all applicable laws, regulations and guidelines: (i) (ii) (iii) (iv) (v) that resolutions to endorse the appointment of each person who is a director shall be included in the agenda for the annual general meeting of CRT; that each Director has to be re-endorsed by Unitholders for re-appointment no later than every third annual general meeting of CRT after the relevant general meeting at which such director s appointment was last endorsed or re-endorsed, as the case may be; (where a person is appointed as director, either to fill a vacancy or as an addition to the existing directors, at any time) that Unitholders endorsement for his appointment as director will be sought at the next annual general meeting of CRT immediately following his appointment; removal of directors upon the passing of a relevant resolution by Unitholders at a duly convened general meeting of CRT; (a) the TP Trustee shall have no power, authority or any other right to carry into effect any proposal for disposing of the whole or substantially the whole of the TM Share Trust s undertaking or property unless such proposals are endorsed 23

29 by Unitholders; (b) the TP Trustee shall have no power, authority or any other right to exercise any power of the Trustee-Manager to issue TM Shares unless endorsed by Unitholders; (c) the TP Trustee shall not make or cause a restricted transaction (as defined in Section 162(1) of the Companies Act 1 ) unless certain conditions are met and has been endorsed by Unitholders in accordance with the TM Share Trust Deed; (d) the TP Trustee shall not and shall not cause to extend any loans or quasi-loans or otherwise provide any guarantee or security, or credit transaction as creditor for the benefit of any director or his interested company in accordance with the TM Share Trust Deed unless endorsed by Unitholders; (e) the TP Trustee shall not and/or cause the Trustee-Manager take part in an arrangement under which another person enters into a transaction that, if it had been entered into by the Trustee-Manager, would have been a restricted transaction under paragraph (a), (b), (c), (d) or (f) of Section 162(1) of the Companies Act and that person, in pursuant of the arrangement, obtains a benefit from the Trustee-Manager or a related company, unless endorsed by Unitholders; (f) the TP Trustee shall not and/or cause the assignment to the Trustee-Manager, or assumption by the Trustee-Manager, of any rights, obligations or liabilities under a transaction that, if it had been entered into by the Trustee-Manager, would have required approval from shareholders as required by the Companies Act, unless endorsed by Unitholders; (g) the TP Trustee shall not and/or cause to (A) make to any director any payment by way of compensation for loss of office as an officer of the Trustee-Manager or of a subsidiary of the Trustee-Manager or as consideration for or in connection with his retirement from any such office; or (B) make to any director any payment in connection with the transfer of the whole or any part of the undertaking or property of the Trustee-Manager, unless particulars with respect to the proposed payment, including the amount thereof, have been disclosed to Unitholders and the proposal has been endorsed by Unitholders in a general meeting of CRT; (h) the TP Trustee shall, on the requisition of the Unitholders and acting on the recommendation of two or more Unitholders holding not less than 10 per cent. of the total number of Units as at the date of the deposit of the requisition, immediately proceed duly to convene 1 Under Section 162(1) of the Companies Act, a company makes a restricted transaction if it (a) makes a loan or quasi-loan to a director (i) of the company; or (ii) of a company which by virtue of section 6 of the Companies Act is deemed to be related to that company, (referred to in this section as a relevant director); (b) enters into any guarantee or provides any security in connection with a loan or quasi-loan made to a relevant director by any other person; (c) enters into a credit transaction as creditor for the benefit of a relevant director; (d) enters into any guarantee or provides any security in connection with a credit transaction entered into by any person for the benefit of a relevant director; (e) takes part in an arrangement under which (i) another person enters into a transaction that, if it had been entered into by the company, would have been a restricted transaction under paragraph (a), (b), (c), (d) or (f); and (ii) that person, in pursuance of the arrangement, obtains a benefit from the company or a company which by virtue of section 6 of the Companies Act is deemed to be related to that company; or (f) arranges the assignment to the company, or assumption by the company, of any rights, obligations or liabilities under a transaction that, if it had been entered into by the company, would have been a restricted transaction under paragraphs (a) to (e). 24

30 an extraordinary general meeting of the Trustee-Manager to be held as soon as practicable but in any case not later than two months after the receipt by the Trustee-Manager of the requisition; (i) there shall be no alteration, addition, or any other amendment made to the constitution (or memorandum and articles of association or any other name by which such constitutive document is referred to) of the Trustee-Manager (the Constitution ) unless such alteration, addition or any other amendment is effected by the TP Trustee, acting in accordance with the direction of Unitholders through the passing of resolution(s) by way of special resolution at a general meeting of CRT; (j) there shall not be any change in name of the Trustee-Manager unless such change in name is effected by the TP Trustee, acting in accordance with the direction of Unitholders through the passing of resolution(s) by way of special resolution at a general meeting of CRT; and (k) the TP Trustee shall not and/or cause at any meeting or otherwise provide emoluments or improve emoluments for any directors in respect of his office as such unless the provision is endorsed by Unitholders through the passing of resolution(s) by way of ordinary resolution at a general meeting of CRT; and (vi) a catch-all provision to provide that any matter on which the TP Trustee (as the legal owner of the Trustee-Manager) is required to exercise its voting rights (in the Trustee-Manager) through an ordinary resolution or special resolution, as the case may be, under the Companies Act or the Constitution, will correspondingly require endorsement by way of an ordinary resolution or special resolution, as the case may be, of Unitholders at a duly convened general meeting of CRT. The foregoing provisions ensure that the Unitholders are effectively entitled to exercise rights which are similar to those enjoyed by shareholders of a company incorporated in Singapore and the accompanying safeguards to improve corporate governance and enhance accountability. In addition, the TM Share Trust Deed shall include a provision stipulating that in the event of any inconsistency between the rights of the Unitholders under the TM Share Trust Deed and the CRT Trust Deed, the provisions of the CRT Trust Deed shall apply to the extent of such inconsistency. The CRT Trust Deed is more comprehensive as it sets out the activities, duties, obligations and rights of Unitholders and the Trustee-Manager in order to regulate CRT as a listed business trust on the Main Board of the SGX-ST. On the other hand, the TM Share Trust Deed only serves to ensure that the Unitholders are empowered in relation to the rights in relation to the TM Shares such that the Unitholders are put in the same position as though they are shareholders of the Trustee-Manager. 25

31 5. RATIONALE FOR THE INTERNALISATION The Trustee-Manager believes that the proposed Internalisation will bring the following key benefits to Unitholders: 5.1 The Proposed Internalisation will reduce the costs to Unitholders in the management of CRT and will be DPU accretive to Unitholders As stated in paragraph 2.5 above, the Trustee-Manager will continue to derive its income pursuant to the current fee provisions under the CRT Trust Deed. In addition, the Trustee-Manager intends to continue with its present arrangement under which the Trustee-Manager is paid largely in Units 1. However, excess cash from the Trustee-Manager s income (after deducting the costs of operating the Trustee-Manager, like the remuneration of the employees of the Trustee-Manager and the payment of directors fees, finance costs and income tax) will be distributed to Unitholders in accordance with the Trust Purpose. Accordingly, the proposed Internalisation is consistent with the Trustee-Manager s objective of delivering a competitive return on investment to Unitholders as it would increase the distributions to Unitholders. For illustrative purposes, assuming that the Internalisation was completed on 1 July 2014 and in effect for FY2015, the pro forma DPU of CRT would increase to approximately 8.02 Singapore cents compared to the pro forma DPU of approximately 7.94 Singapore cents pre-internalisation based on the pro forma income statement of CRT for FY2015 (see paragraph 8.1 of this Circular below for further details on the assumptions relied upon for the preparation of the pro forma financial effects): + 1.0% Accretion After the 2016 Acquisitions (Pro Forma) After the Internalisation (Pro Forma) 1 Under the CRT Trust Deed, the Trustee-Manager has the discretion to elect to receive a portion of its management fees in Units and for the purposes of this Circular, it is assumed that up to 80.0% of the management fees received by the Trustee-Manager will continue to be paid in the form of Units. 26

32 (See Appendix H of this Circular for further details on the pro forma financial effects of the Transactions and the accompanying assumptions and bases.) In this regard, the costs to Unitholders in having an externally-managed trustee-manager are higher than the expected costs to be incurred in the operation of the Trustee-Manager after completion of the proposed Internalisation. CRT will also be able to undertake new acquisitions of properties competitively at a reduced cost to Unitholders as any excess cash from payment of the acquisition fee to the Trustee-Manager will be declared as dividends for the benefit of Unitholders. CRT will enjoy operating leverage, as the work undertaken by the Trustee-Manager for new acquisitions should not require a material increase in internal management cost which should therefore provide greater contributions to the earnings growth per unit of CRT. In light of the foregoing, the overall costs savings to Unitholders arising from the proposed Internalisation is expected to result in long term increase in the yield to Unitholders. The illustrative pro forma management costs in FY2015, assuming that (a) the Internalisation had been completed on 1 July 2014 and (b) the Torius acquisition 1, the Fuji Grand Natalie acquisition 2 and the Mallage Saga and Feeeal Asahikawa acquisitions 3 (collectively, the Fuji Grand Natalie acquisition, Mallage Saga and Feeeal Asahikawa acquisitions, the 2016 Acquisitions ), were completed on 1 July 2014 and there were no acquisition fees for FY2015, are set out below: Figures in JPY (million) (1) FY2015 Pre-Internalisation Adjustments FY2015 Pro Forma Post-Internalisation Base Fee (2) (541) (3) Performance Fee (2) (160) (4) Japan Asset Management Fee ( Japan AM Fee ) (5) Trustee-Manager operating expenses in FY2015 (6) Net Management Costs (before tax) (322) (7) 478 Tax Net Management Costs (after tax) (274) (8) 526 Notes: (1) Where relevant, all figures in Japanese Yen above have been converted to Singapore dollars at the exchange rate of JPY82.00 to S$1.00 (2) The Base Fee and Performance Fee includes the additional fees from the Torius Acquisition and 2016 Acquisitions but excludes the Japan AM Fee paid by CRT. (3) Represents the elimination of Base Fee payable to the Trustee-Manager (based on CRT s value of the Trust Property) post-internalisation The actual completion of the acquisition of Torius was on 16 October 2015 (the Torius Acquisition ). The actual completion of the acquisition of Fuji Grand Natalie was on 18 April The actual completion of the acquisitions of Mallage Saga and Feeeal Asahikawa were on 27 May

33 (4) Represents the elimination of Performance Fee payable to the Trustee-Manager (based on CRT s net property income) post-internalisation. (5) Japan AM Fee will continue to be paid for the remaining term of the asset management agreements. After the respective asset management agreements expire (including contracts with CMIRM KK), the Trustee-Manager, through its subsidiary, intends to take over the role of Japan asset manager, subject in the case of Luz Omori, that prior written consent of the Ota ward of Tokyo is obtained. (6) Based on the FY2015 Audited Financial Statements, the Trustee-Manager s operating expenses in FY2015 mainly comprises director s fees, remuneration of employees, rental and professional fees, and includes finance costs associated with the working capital facility of JPY5.3 million (equivalent to approximately S$64,500). Includes 0.1% brokerage fees of JPY0.65 million associated with the sell-down of the Trustee-Manager s fees in Units. (7) Represents the estimated cost savings before taking into consideration income tax payable by the Trustee-Manager. (8) Represents the estimated cost savings after taking into consideration income tax payable by the Trustee-Manager. 5.2 Stronger alignment of interest between Unitholders and the Trustee-Manager The TM Share Trust Deed establishes the Trust Purpose and will regulate the relationship between the TP Trustee and Unitholders, including but not limited to the rights, obligations, functions, powers and responsibilities of the TP Trustee. Following the proposed Internalisation, the TM Share Trust Deed will confer on Unitholders the right to endorse the appointment (or re-appointment, as the case may be) of each of the directors of the Trustee-Manager at the annual general meeting of CRT, by way of ordinary resolution. The TP Trustee, as the sole shareholder of the Trustee-Manager, shall be obligated to procure the resignation or removal of any director whose appointment (or re-appointment, as the case may be) has not been endorsed or re-endorsed (as the case may be) by Unitholders by way of Ordinary Resolution. Accordingly, this ensures that the directors of the Trustee-Manager will be effectively appointed by Unitholders (as compared to most external management models where such appointments are made by shareholders of the trustee-manager as opposed to the unitholders at large), which would enhance the level of corporate governance as Unitholders are empowered in the selection of the directors, and enable maximum alignment of interests between Unitholders and the Trustee-Manager. 5.3 Continued support from the Sponsor As highlighted in paragraph 2.6 of this Circular above, pursuant to the terms of the Amended Croesus Group ROFRs and the Amended Strategic Partner ROFRs, CRT will continue to benefit from the support of the members of the Croesus Group and the Strategic Partners. The Amended Croesus Group ROFRs and the Amended Strategic Partner ROFRs will ensure continued support for the Trustee-Manager s growth strategy and will provide CRT with continuing access to the acquisition opportunities and pipeline afforded by the Croesus Group and Strategic Partners at the time of its initial public offering. In addition, the continuing commitment of the Key Persons and entry into the Service Agreements will mitigate against any operational and/or business disruptions resulting from the Internalisation. CRT will continue to be able to rely on the expertise and business connections of the Key Persons. Accordingly, it is submitted that the continuing ROFRs and the commitment from the key persons of the Trustee-Manager evince continued support from the Sponsor. 28

34 5.4 Provision of a more complete suite of services by the Trustee-Manager Pursuant to the proposed Internalisation, the Trustee-Manager intends to carry on with the remaining terms of the various asset management agreements with the respective Japan asset managers (which includes the contracts with CMIRM KK). The Trustee-Manager intends to, through its subsidiary, provide asset management services 1 in respect of the properties in CRT s portfolio. The Trustee-Manager, through its subsidiary, will apply for and ensure that the requisite consents, approvals and licences are obtained in Japan to provide asset management services in respect of the properties in CRT s portfolio as well as recruit sufficiently experienced and qualified personnel to undertake such services. This will allow the Trustee-Manager to provide a more complete suite of services to CRT at overall lower costs to unitholders due to economies of scale through both the trustee-manager services as well as asset management services. 6. THE PROPOSED DISTRIBUTION OF RETURNS Subject to the approval of Unitholders, in order to implement the proposed Internalisation, the Trustee-Manager shall declare a Distribution of Returns. The Distribution of Returns will be implemented in the following manner: the Trustee-Manager will transfer the Purchase Consideration to the TP Trustee to be held on trust for CRT in accordance with the Trust Purpose; the Purchase Consideration shall be utilised under the Share Purchase Agreement to purchase the TM Shares; and upon completion of the Trustee-Manager Acquisition, the TP Trustee will acquire the TM Shares (in its capacity as trustee of the TM Share Trust), whereupon undivided interests in the TM Shares are held in accordance with the Trust Purpose for the eventual benefit of Unitholders from time to time. Accordingly, the Distribution of Returns will be completed as the Unitholders just prior to the completion of the Trustee-Manager Acquisition are identified as the ascertainable class of beneficiaries. 7. THE PROPOSED PREFERENTIAL OFFERING 7.1 Introduction The Trustee-Manager proposes to issue from 25,641,026 to 32,722,285 new Units (the Preferential Offering Units ) (representing approximately 3.6% to 4.6% of the existing number of issued Units as at the Latest Practicable Date) to raise gross proceeds ranging from S$20.0 million to S$22.1 million by way of an underwritten non-renounceable preferential offering to Eligible Unitholders (as defined herein) (the Preferential Offering ) on a pro rata basis of up to one (1) Preferential Offering Unit for every 1 Provision of asset management services is subject to the relevant consents, approvals and licences being obtained, including consent from the Ota ward of Tokyo for the change in asset manager for Luz Omori. 29

35 twenty-two (22) existing Units 1 ( Existing Units, and the basis of the Preferential Offering, the Preferential Offering Ratio ) held as at the time and date on which the transfer books and register of Unitholders will be closed to determine the provisional allotments of Preferential Offering Units to the Eligible Unitholders (the Preferential Offering Books Closure Date ), fractional entitlements to be disregarded. Citigroup Global Markets Singapore Pte. Ltd. has been appointed as the lead manager and underwriter in respect of the Preferential Offering (the Lead Manager and Underwriter ). The Preferential Offering Units will be underwritten by the Lead Manager and Underwriter pursuant to the terms and subject to the conditions contained in the underwriting agreement entered into by the Trustee-Manager and the Lead Manager and Underwriter (the Underwriting Agreement ) on 12 June In addition, Evertrust has on 12 June 2016 entered into a sub-underwriting arrangement with the Lead Manager and Underwriter. Under the Underwriting Agreement, the Lead Manager and Underwriter will be entitled to a commission of 2.0% of the Issue Price multiplied by the total number of Preferential Offering Units offered under the Preferential Offering. (See paragraph 7.5 of this Circular below for further details on the sub-underwriting arrangement with Evertrust.) Upon the Preferential Offering being approved by Unitholders, the Trustee-Manager and the Lead Manager and Underwriter will determine the Preferential Offering Books Closure Date, and fix the issue price of the Preferential Offering Units (the Issue Price ) and the exact Preferential Offering Ratio. The Trustee-Manager will make the appropriate announcement(s) in due course to inform Unitholders of the Preferential Offering Books Closure Date, the Issue Price and the exact Preferential Offering Ratio. The actual number of Preferential Offering Units to be issued pursuant to the Preferential Offering will depend on the aggregate amount of proceeds to be raised from the Preferential Offering, the Issue Price and the exact Preferential Offering Ratio. The Issue Price will be determined in accordance with, among others, Chapter 8 of the Listing Manual of the SGX-ST ( Listing Manual ). The Issue Price will not be at more than a 10.0% discount to the volume weighted average price for trades done on the SGX-ST for the full Market Day immediately preceding the day on which the Underwriting Agreement is signed 2, being 10 June Accordingly, the Issue Price shall be no lower than S$ per Preferential Offering Unit. The Trustee-Manager will work together with the Lead Manager and Underwriter to determine the Issue Price and the most appropriate launch timing of the Preferential Offering so as to ensure its success, having regard to market conditions and other factors that the Trustee-Manager and the Lead Manager and Underwriter may consider relevant. 1 2 Based on the maximum number of 32,722,285 Preferential Offering Units. The Preferential Offering Ratio will be one (1) Preferential Offering Unit for every twenty-eight (28) Existing Units based on the minimum number of 25,641,026 Preferential Offering Units. The Underwriting Agreement was not signed on a Market Day. 30

36 Unitholders should note that the Preferential Offering Units offered under the Preferential Offering will be on a non-renounceable basis. The ARE 2 will not be renounceable or transferable and will be for use only by the Eligible Unitholders. The Preferential Offering is subject to, inter alia, the then prevailing market conditions and agreement to the terms of and execution of the Underwriting Agreement to be entered into between the Trustee-Manager and the Lead Manager and Underwriter. The Trustee-Manager will announce details of the Preferential Offering through SGXNET at the appropriate time. The information contained in this paragraph 7 is subject to change. When the Trustee-Manager finalises its plans in relation to the Preferential Offering, they will make an announcement in relation to such details at the appropriate time. 7.2 Receipt of Approval-in-principle The Trustee-Manager had on 12 June 2016 announced that approval in-principle has been obtained on 10 June 2016 from SGX-ST for the listing of, and dealing in and quotation of up to 32,722,285 Preferential Offering Units on the Main Board of the SGX-ST which are to be issued pursuant to the Preferential Offering. The SGX-ST s approval in-principle is not to be taken as an indication of the merits of the Preferential Offering, the Preferential Offering Units, the Trustee-Manager, CRT and/or their subsidiaries. The SGX-ST s in-principle approval is subject to, among others, compliance with the SGX-ST s listing requirements and the provision of the following written confirmations and undertakings to the SGX-ST: compliance with the SGX-ST s listing requirements; a written undertaking from the Trustee-Manager that it will comply with Listing Rules 704(30), 815 and 1207(20) in relation to the use of proceeds from the Preferential Offering and where proceeds are to be used for working capital purposes, the Trustee-Manager will disclose a breakdown with specific details on the use of proceeds and in the annual report of CRT; and a written undertaking from the Trustee-Manager that it will comply with Listing Rule 877(10) with regards to the allotment of any excess Preferential Offering Units. 7.3 Consequential Adjustment to Distribution Period and Status of the Preferential Offering Units CRT s current policy is to distribute its income available for distribution on a semi-annual basis to Unitholders. The Preferential Offering Units will, upon allotment and issue, rank pari passu in all respects with the existing Units in issue as at the date of issue of the Preferential Offering Units, including the right to any distributions which may accrue for the period from 1 January 2016 to 30 June 2016 as well as all distributions thereafter. 2 The application form for new Units provisionally allotted to entitled Unitholders under the Preferential Offering and application form for excess new Units. 31

37 7.4 Use of Proceeds Subject to relevant laws and regulations, the Trustee-Manager intends to utilise the gross proceeds ranging from S$20.0 million to S$22.1 million from the Preferential Offering in the following manner: approximately S$19.5 million to S$21.6 million (which is equivalent to approximately 97.5% to 97.7% of the maximum gross proceeds of the Preferential Offering) to partially fund the proposed Internalisation; and approximately S$0.5 million (which is equivalent to approximately 2.3% to 2.5% of the maximum gross proceeds of the Preferential Offering) to pay the estimated fees and expenses, including professional fees and expenses, incurred or to be incurred by CRT in connection with the Preferential Offering. Notwithstanding its current intention, the Trustee-Manager may, subject to relevant laws and regulations, utilise the net proceeds of the Preferential Offering at its absolute discretion for other purposes, including without limitation, the repayment of existing indebtedness. Pending the deployment of the net proceeds from the Preferential Offering, the net proceeds may, subject to relevant laws and regulations, be deposited with banks and/or financial institutions, or used to repay outstanding borrowings or for any other purpose on a short-term basis as the Trustee-Manager may, in its absolute discretion, deem fit. The Trustee-Manager will make periodic announcements via SGXNET on the utilisation of the proceeds from the Preferential Offering as and when such funds are materially utilised and provide a status report on the use of the proceeds from the Preferential Offering in the annual reports of CRT. Where there is any material deviation from the stated use of proceeds, the Trustee-Manager will announce the reasons for such deviation. 7.5 Sub-underwriting by Evertrust While the Preferential Offering will be underwritten by the Lead Manager and Underwriter, Evertrust has entered into a sub-underwriting arrangement with the Lead Manager and Underwriter. For the avoidance of doubt, no sub-underwriting fees will be paid in relation to the sub-underwriting arrangement. Under the sub-underwriting arrangement, Evertrust either directly or indirectly through any one or more of its subsidiaries and/or wholly-owned entities (save for the Trustee-Manager), will pay for and acquire excess Preferential Offering Units from the Lead Manager and Underwriter, to the extent that such excess Preferential Offering Units were unsubscribed after satisfaction of all applications (if any) for excess Preferential Offering Units during the Preferential Offering and were subscribed for by the Lead Manager and Underwriter. 7.6 Rationale for the Preferential Offering For purposes of good corporate governance and to ensure that Unitholders are given the opportunity to decide on the various aspects of the Internalisation (including the method of funding), the Trustee-Manager has also decided that the Preferential Offering will be subject to the approval of Unitholders at the EGM. This is notwithstanding that the Trustee-Manager will be relying on the general mandate that was obtained by the Trustee-Manager from Unitholders at the annual general meeting of Unitholders held on 26 October 2015 to issue the Preferential Offering Units. 32

38 7.7 Requirement for Unitholders Approval The Trustee-Manager is seeking the approval of Unitholders for the proposed issue of up to 32,722,285 Preferential Offering Units (representing approximately 4.6% of the existing number of issued Units as at the Latest Practicable Date) under the Preferential Offering pursuant to Rule 805(1) of the Listing Manual. 8. DETAILS AND FINANCIAL INFORMATION OF THE PROPOSED TRANSACTIONS 8.1 Pro Forma Financial Effects of the Transactions The pro forma financial effects of the proposed Internalisation and proposed Preferential Offering (collectively, the Transactions ) on the distribution per Unit ( DPU ) and net asset value ( NAV ) per Unit, and the pro forma capitalisation of CRT presented below are strictly for illustrative purposes and were prepared based on the FY2015 Audited Financial Statements, taking into account: (i) the acquisition of Torius which for purposes of the pro forma financial effects set out below, is assumed to be completed on 1 July ; (ii) the 114,222,677 Units issued pursuant to the underwritten and renounceable rights issue to existing Unitholders on a pro rata basis which closed on 23 October 2015 (the 2015 Rights Issue ), but for purposes of the pro forma financial effects set out below, is assumed to be completed on 1 July 2014; (iii) the 70,000,000 New Units issued under the private placement which closed on 24 March 2016 (the Private Placement ), but for purposes of the pro forma financial effects set out below, is assumed to be completed on 1 July 2014; (iv) the issuance of S$60,000, % fixed rate notes due 2020 (the Notes ) under the U.S.$500,000,000 Euro Medium Term Note Programme, with the interest costs as at 1 July 2014 being 2.65%; (v) the acquisition of Fuji Grand Natalie which for purposes of the pro forma financial effects set out below, is assumed to be completed on 1 July ; and (vi) the acquisitions of Mallage Saga and Feeeal Asahikawa which for purposes of the pro forma financial effects set out below, is assumed to be completed on 1 July , and based on the assumptions below: Assumptions relating to the Torius Acquisition:- It is assumed that: (a) (b) (c) (d) Torius was acquired by CRT on 1 July 2014 and held for FY2015; the acquisition cost of JPY9,348.4 million (approximately S$111.3 million) is funded through a combination of the issuance of Japanese onshore 5-year specified bonds, the proceeds of the 2015 Rights Issue, and the balance via Consumption Tax Specified Bonds; the interest cost of the Japanese specified bonds is 0.95% per annum; and 114,222,677 Units were issued under the 2015 Rights Issue (the Rights Units ) at an issue price of S$0.610 per Rights Unit The actual completion of the acquisition of Torius was on 16 October The actual completion of the acquisition of Fuji Grand Natalie was on 18 April The actual completion of the acquisitions of Mallage Saga and Feeeal Asahikawa were on 27 May

39 Assumptions relating to the Acquisition of Fuji Grand Natalie, Mallage Saga and Feeeal Asahikawa (the 2016 Acquisitions ):- It is assumed that: (a) (b) (c) for the purpose of illustrating the pro forma financial effects of the 2016 Acquisitions on CRT, the 2016 Acquisitions were completed on 1 July 2014 and held for FY2015; the 2016 Acquisitions (and the associated transaction costs) of JPY12,378.7 million were funded through a combination of funds, comprising S$35.4 million from the proceeds of the issuance of the Notes, the Private Placement and the balance via Japanese Yen-denominated debt and Consumption Tax Specified Bonds, where an exchange rate of Japanese Yen to 1 Singapore Dollar has been applied to the proceeds of the Notes and the Private Placement; and the interest cost of the Notes and Japanese local bank debt/japanese onshore 5-year specified bonds were 2.65% and 0.6% per annum, respectively. Assumptions relating to the Proposed Internalisation:- It is assumed that: (a) for the purpose of illustrating the pro forma financial effects of the proposed Internalisation on CRT, the Internalisation was completed on 1 July 2014 and in effect for FY2015; (b) the Base Fee and the Performance Fee include fees attributable to the 2016 Acquisitions; (c) (d) (e) the Internalisation (and the associated transaction costs) is funded through a combination of funds, comprising S$24.6 million from the proceeds of the issuance of Notes, S$20 million from the proceeds of the Preferential Offering and the balance via the existing cash balance of S$10.0 million, where an exchange rate of Japanese Yen to 1 Singapore Dollar has been applied; the interest cost of the Notes and Japanese local bank debt/japanese onshore 5-year specified bonds were 2.65% and 0.6% per annum respectively; and 25,641,026 Preferential Offering Units were issued on 1 July 2014 at an issue price of S$0.780 per Preferential Offering Unit. (See Appendix H of this Circular for additional pro forma financial effects of the Transactions.) 34

40 8.2 Pro Forma DPU FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma financial effects of the Transactions on CRT s DPU for FY2015 as if the Transactions were completed on 1 July 2014 and the Trustee-Manager was beneficially held by Unitholders through to 30 June 2015 are as follows: Before the Transactions (FY2015 Audited Financial Statements) After the Torius Acquisition and 2015 Rights Issue only (Pro Forma) After the 2016 Acquisitions (Pro Forma) After the Internalisation (Pro Forma) Distributable Income (JPY 000). 3,358,177 (1) 3,921,788 4,478,917 (4) 4,692,060 Issued Units ,193,989 (2) 635,287,408 (3) 706,410,202 (4)(5) 732,051,228 (6) DPU (Singapore cents) (5) 8.02 Notes: (1) Based on the FY2015 Audited Financial Statements. (2) Based on the number of Units in issue as at 30 June 2015 and adjusted to include 1,680,000 Units issued to the Trustee-Manager on 31 August 2015 as payment of 80% of the Trustee-Manager s management fees for the period from 1 April 2015 to 30 June (3) Includes 114,222,677 Units that have been issued pursuant to the 2015 Rights Issue as well as Units that have been issued to the Trustee-Manager as payment of 80% of the Trustee-Manager s management fees for the period from 1 July 2014 to 30 June 2015 and Units that have been issued pursuant to CRT s Dividend Reinvestment Plan for the period from 11 September 2014 to 31 December 2014, both as a result of the Torius Acquisition and the 2015 Rights Issue. (4) Prior to the announcement of the Internalisation, CRT had announced and completed the Private Placement, the issuance of the Notes and the 2016 Acquisitions. Assuming the full amount and finance cost associated with the issuance of the Notes had been taken into consideration (including the amount of S$24.6m which have been subsequently utilised to part fund the Internalisation), the pro forma Distributable Income, Issued Units and DPU (after the 2016 Acquisitions) would be JPY4.4 million, 706,533,455 and 7.83 Singapore cents respectively. (5) Includes the 70,000,000 New Units issued as part of the Private Placement as well the Units that have been issued to the Trustee-Manager as payment of 80% of the management fees for the period from 1 July 2014 to 30 June 2015 as a result of the Acquisitions. (6) Includes the 25,641,026 Preferential Offering Units issued as part of the Preferential Offering. 35

41 8.3 Pro Forma NAV FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma financial effects of the Transactions on CRT s NAV per Unit as at 30 June 2015, as if the Transactions were completed on 30 June 2015 are as follows: Before the Transactions (FY2015 Audited Financial Statements) After the Torius Acquisition and 2015 Rights Issue only (Pro Forma) After the 2016 Acquisitions (Pro Forma) After the Internalisation of TM (Pro Forma) NAV (JPY 000)... 43,586,162 (1) 49,241,054 (3) 53,377,440 54,577,933 Issued Units ,193,989 (2) 633,416,666 (4) 703,416,666 (5) 729,057,692 (6) NAV per Unit (JPY) Notes: (1) Based on the FY2015 Audited Financial Statements. (2) Based on the number of Units in issue as at 30 June 2015 and adjusted to include 1,680,000 new Units issued to the Trustee-Manager on 31 August 2015 as payment of 80% of the Trustee-Manager s management fees for the period from 1 April 2015 to 30 June (3) Based on the FY2015 Audited Financial Statements and assuming that Torius was acquired on 1 July 2014, as announced in the offer information statement dated 6 October 2015 relating to the Rights Issue. (4) Includes 114,222,677 Rights Units issued pursuant to the 2015 Rights Issue. (5) Includes the 70,000,000 New Units issued as part of the Private Placement. (6) Includes the 25,641,026 Preferential Offering Units issued as part of the Preferential Offering. 8.4 Pro Forma Leverage Ratio FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma financial effects of the Transactions on CRT s leverage ratio for FY2015 as if the Transactions were completed on 30 June 2015 are as follows: Before the Transactions (FY2015 Audited Financial Statements) After the Torius Acquisition and 2015 Rights Issue only (Pro Forma) After the 2016 Acquisitions (Pro Forma) After the Internalisation (Pro Forma) Loans and borrowings (JPY 000) 47,487,213 51,996,075 60,070,786 62,087,986 Total assets (JPY 000) ,400, ,811, ,760, ,978,599 Leverage ratio % 46.5% 47.8% (1) 48.1% 36

42 Note: (1) Prior to the announcement of the Internalisation, CRT had announced and completed the Private Placement, the issuance of the Notes and the 2016 Acquisitions. Assuming the full amount of the Notes had been included for the 2016 Acquisitions, the pro forma leverage ratio would be 48.6%. 8.5 Pro Forma Capitalisation FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma capitalisation of CRT as at 30 June 2015, as if the proposed Internalisation was completed on 30 June 2015, is as follows: Before the Transactions (FY2015 Audited Financial Statements) After the Torius Acquisition and 2015 Rights Issue only (Pro Forma) After the 2016 Acquisitions (Pro Forma) After the Internalisation (Pro Forma) Cash and short-term deposits (JPY 000)... 2,941,662 3,341,924 4,268,935 3,386,628 Short term debt (JPY 000) ,873 1,246,873 1,806,873 1,806,873 Long term debt (JPY 000)... 46,840,340 50,749,202 58,263,913 60,281,113 NAV (JPY 000)... 43,586,162 49,241,054 53,377,440 54,577,933 Total Capitalisation (JPY 000).. 91,073, ,237, ,448, ,665, INTERESTS OF DIRECTORS AND SUBSTANTIAL UNITHOLDERS Further details of the interests in Units of Directors and Substantial Unitholders are set out below. 9.1 Interests of Directors Based on the Register of Directors Unitholdings maintained by the Trustee-Manager and save as disclosed in the table below, none of the Directors currently holds a direct or deemed interest in the Units as at the Latest Practicable Date: Name of Directors Direct Interest Deemed Interest No. of Units % (1) No. of Units % (1) Total No. of Units % (1) Mr David Lim Teck Leong... 1,769, ,769, Mr Jim Chang Cheng-Wen.. 9,460, ,460, Mr Eng Meng Leong... Mr Quah Ban Huat.... Mr Yong Chao Hsien Jeremy... 9,460, ,460, Note: (1) The percentage is based on 716,965,618 Units in issue as at the Latest Practicable Date. 37

43 In addition, the Sponsor is owned by Mr Jim Chang Cheng-Wen (Chief Executive Officer and Executive Director) and Mr Yong Chao Hsien Jeremy (Non-Executive Director). The Sponsor has an 80.0% interest in Croesus Partners, which in turn has an 80.0% interest in Evertrust, which in turn wholly-owns the Trustee-Manager. 9.2 Interests of Substantial Unitholders Based on the Register of Substantial Unitholders maintained by the Trustee-Manager, the Substantial Unitholders 1 of CRT and their interests in the Units as at the Latest Practicable Date are as follows: Name of Substantial Unitholders Direct Interest Deemed Interest No. of Units % (1) No. of Units % (1) Total No. of Units held % (1) BlackRock, Inc. (a)... 35,852, ,852, DBS Bank Ltd ,325, ,325, DBS Group Holdings Ltd. ( DBSH ) (b)... 43,325, ,325, GKG Investment Holdings Pte Ltd ( GKGI ) (c)... 38,391, ,391, Goh Geok Khim ( GGK ) (d).. 5,000, ,391, ,391, Temasek Holdings (Private) Limited ( Temasek ) (e)... 43,325, ,325, The PNC Financial Services Group, Inc. ( PNC ) (f)... 35,852, ,852, Value Partners High-Dividend Stocks Fund... 41,070, ,070, Notes: (1) The percentage of unitholdings is based on 716,965,618 units in CRT in issue as at the Latest Practicable Date. (a) BlackRock Inc. holds a deemed interest because it has indirect control of the entity that holds the direct interest. (b) DBSH is deemed to be interested in 43,325,020 units held directly by DBS Bank Ltd., a wholly-owned subsidiary of DBSH. (c) GKGI is deemed to be interested in the units held by its subsidiaries. (d) GGK is deemed to be interested in the units held by GKGI and his spouse. (e) Temasek is deemed to be interested in the 43,325,020 units held directly by DBS Bank Ltd., a wholly-owned subsidiary of DBSH. Temasek has more than 20% interest in DBSH, an independently managed Temasek portfolio company. Temasek is not involved in the business or operating decisions of DBSH, including those regarding their positions in the units. (f) PNC as deemed shareholder through its over 20% ownership of BlackRock, Inc. (which is in turn a deemed shareholder through various BlackRock, Inc. subsidiaries). Save as disclosed above and based on information available to the Trustee-Manager as at the Latest Practicable Date, none of the Directors or the Substantial Unitholders have an interest, direct or indirect, in the Transactions. 1 Substantial Unitholders refer to Unitholders with interests in not less than 5.0% of all Units in issue. 38

44 9.3 Directors Service Contracts Save for the Service Agreements as disclosed in paragraph of this Circular, no person is proposed to be appointed as a director of the Trustee-Manager in connection with the Transactions or any other transactions contemplated in relation to the Transactions. However, with the completion of the proposed Internalisation (if approved), Unitholders shall be conferred with the right to endorse the appointment of each of the directors at the upcoming annual general meeting of CRT to be held in 2016, by way of ordinary resolution. The directors who have been endorsed or by unitholders of CRT by way of ordinary resolution at this annual general meeting shall remain as directors. The TP Trustee, as the sole member of the Trustee-Manager, shall procure the resignation or removal of any director as the director of the Trustee-Manager whose appointment has not been endorsed. 10. RECOMMENDATIONS 10.1 On the proposed Internalisation Based on the opinion of the IFA (as set out in the IFA Letter in Appendix E of this Circular), the independent valuation report on the Trustee-Manager (as set out in Appendix C of this Circular), the terms of the proposed Internalisation and the rationale for the proposed Internalisation as set out in paragraph 5 above, the Independent Directors and the Audit and Risk Committee believe that the proposed Internalisation is based on normal commercial terms, would not be prejudicial to the interests of CRT and its minority Unitholders, and the proposed Internalisation is in the best interests of Unitholders, without taking into account the personal circumstance and factors affecting each individual Unitholder. Accordingly, the Independent Directors recommend that Unitholders vote at the EGM in favour of the resolution to approve the proposed Internalisation On the proposed Distribution of Returns The Directors believe that the proposed Distribution of Returns is required as a mechanism for the proposed Internalisation to be effected and accordingly, the Directors recommend that the Unitholders vote at the EGM in favour of the resolution to approve the proposed Distribution of Returns On the proposed Preferential Offering Having regard to the rationale for the proposed Preferential Offering as set out in paragraph 5 above, the Directors believe that the proposed Preferential Offering would be beneficial to, and is in the interests of, CRT and its Unitholders. Accordingly, the Directors recommend that Unitholders vote at the EGM in favour of the resolution to approve the proposed Preferential Offering. 39

45 11. EXTRAORDINARY GENERAL MEETING 11.1 The EGM will be held on Thursday, 30 June 2016 at 10:00 a.m. at Amara Hotel, Ballroom 1 and 2, Level 3, 165 Tanjong Pagar Road, Singapore , for the purpose of considering and, if thought fit, passing with or without modification, the resolutions set out in the Notice of EGM, which is set out on pages I-1 to I-3 of this Circular. The purpose of this Circular is to provide Unitholders with relevant information about the resolutions. Approval by way of an Ordinary Resolution is required in respect of the proposed Internalisation (Resolution 1), the proposed Distribution of Returns (Resolution 2) and the proposed Preferential Offering (Resolution 3) A Depositor shall not be regarded as a Unitholder entitled to attend the EGM and to speak and vote thereat unless he is shown to have Units entered against his name in the Depository Register, as certified by The Central Depository (Pte) Limited ( CDP ) as at 48 hours before the time fixed for the EGM. 12. ABSTENTIONS FROM VOTING Under Rule 919 of the Listing Manual, where a meeting is held to obtain Unitholders approval for an interested person transaction, the interested person and any associate of the interested person must not vote on the resolution, nor accept appointments as proxies unless specific instructions as to voting are given. Accordingly, Evertrust and its associates are prohibited from voting on Resolution 1 at the EGM to be convened to seek Unitholders approval. In addition, Evertrust and its associates shall decline to accept appointment as proxy to attend and vote at the EGM in respect of the proposed Internalisation unless the Unitholder concerned has given specific instructions in his/her/its proxy form as to the manner in which his/her/its votes are to be cast. 13. ACTION TO BE TAKEN BY UNITHOLDERS Unitholders will find enclosed in this Circular the Notice of EGM and a Proxy Form. If a Unitholder is unable to attend the EGM and wishes to appoint a proxy to attend and vote on his behalf, he should complete, sign and return the enclosed Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the Unit Registrar s office at Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place #32-01, Singapore Land Tower, Singapore , not later than 28 June 2016 at 10:00 a.m., being 48 hours before the time fixed for the EGM. The completion and return of the Proxy Form by a Unitholder will not prevent him from attending and voting in person at the EGM if he so wishes. Persons who have an interest in the approval of the resolutions must decline to accept appointment as proxies unless the Unitholder concerned has specific instructions in his Proxy Form as to the manner in which his votes are to be cast in respect of such resolution. If a Unitholder (being an independent Unitholder) wishes to appoint Mr Jim Chang Cheng-Wen and/or Mr Yong Chao Hsien Jeremy as his/her proxy/proxies for the EGM, he/she should give specific instructions in his/her Proxy Form as to the manner in which his/her vote is to be cast in respect of the resolutions. 40

46 14. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Transactions, CRT, the Trustee-Manager and their subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in this Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Circular in its proper form and context. 15. FINANCIAL ADVISER TO THE TRUSTEE-MANAGER S RESPONSIBILITY STATEMENT To the best of the Financial Adviser to the Trustee-Manager s knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the proposed Internalisation, CRT, the Trustee-Manager and their subsidiaries, and the Financial Adviser to the Trustee-Manager is not aware of any facts the omission of which would make any statement in this Circular misleading. 16. CONSENTS Each of the IFA (being CIMB Bank Berhad, Singapore Branch) and the Independent Valuer (being KPMG Corporate Finance Pte. Ltd.) has given and has not withdrawn its written consent to the issue of this Circular with the inclusion of its name and, respectively, the IFA Letter, the full valuation report and all references thereto, in the form and context in which they are included in this Circular. 17. DOCUMENTS ON DISPLAY Copies of the following documents are available for inspection during normal business hours at the registered office of the Trustee-Manager 1 at 50 Raffles Place #25-03 Singapore Land Tower Singapore from the date of this Circular up to and including the date falling three months after the date of this Circular: (i) (ii) (iii) (iv) (v) (vi) the Share Purchase Agreement; the TM Share Trust Deed; the IFA Letter; the independent valuation report on the Trustee-Manager issued by the Independent Valuer; the Amended Croesus Group ROFRs and the Amended Strategic Partner ROFRs; the FY2015 Audited Financial Statements; and 1 Prior appointment with the Trustee-Manager will be appreciated. 41

47 (vii) the written consents of each of the IFA and the Independent Valuer. The CRT Trust Deed will also be available for inspection at the registered office of the Trustee-Manager for so long as CRT is in existence. Yours faithfully Croesus Retail Asset Management Pte. Ltd. (as trustee-manager of Croesus Retail Trust) (Company Registration No K) David Lim Teck Leong Chairman and Independent Director 15 June

48 IMPORTANT NOTICE The value of Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Trustee-Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request the Trustee-Manager to redeem or purchase their Units for so long as the Units are listed on the SGX-ST. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of CRT is not indicative of the future performance of CRT. Similarly, the past performance of the Trustee-Manager is not indicative of the future performance of the Trustee-Manager. This Circular may contain forward-looking statements that involve assumptions, 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, competition from other developments or companies, shifts in expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), 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 the Trustee-Manager s current view on future events. If you have sold or transferred all your Units, you should immediately forward this Circular, together with the Notice of EGM and the accompanying Proxy Form, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. Circular not an Offering Document. This Circular is issued to Unitholders solely for the purpose of convening the EGM and seeking their approval for the resolutions to be considered at such meeting. Unitholders are authorised to use this Circular solely for the purpose of considering the approvals sought. Persons to whom a copy of this Circular has been issued shall not circulate to any other person, reproduce or otherwise distribute this Circular or any information herein for any purpose whatsoever nor permit or cause the same to occur. This Circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of CRT. 43

49 GLOSSARY In this Circular, the following definitions apply throughout unless otherwise stated: % : Per centum or percentage Audit and Risk Committee : The audit and risk committee of the Trustee-Manager Business Day : A day which is not a Saturday, Sunday or a public holiday in Singapore CRAM KK : Croesus Retail Asset Management Co., Ltd. CMIRM KK : CMI Realty Management Kabushiki Kaisha Croesus Group : The Sponsor, Croesus Group Pte. Ltd. and Croesus International Inc. Croesus Group ROFRs : The ROFRs provided by each member of the Croesus Group Croesus Partners : Croesus Partners Pte. Ltd. CRT : Croesus Retail Trust CRT Trust Deed : The trust deed constituting CRT dated 7 May 2012 (as amended) CDP : The Central Depository (Pte) Limited Circular : This circular to Unitholders dated 15 June 2016 Daiwa House : Daiwa House Industry Co. Ltd DPU : Distribution per Unit EGM : The extraordinary general meeting of Unitholders to be held on 30 June 2016 at 10:00 a.m. at Amara Hotel, Ballroom 1 and 2, Level 3, 165 Tanjong Pagar Road, Singapore , to approve the matters set out in the Notice of Extraordinary General Meeting on pages I-1 to I-3 of this Circular Eligible Unitholders : Eligible Unitholders are Unitholders with Units standing to the credit of their Securities Accounts and whose registered addresses with CDP are in Singapore as at the books closure date or who have, at least three Market Days prior to the books closure date, provided CDP with addresses in Singapore for the service of notices and documents and such Unitholders who the Trustee-Manager, on behalf of CRT, may determine, may be offered Preferential Offering Units without breaching applicable securities laws 44

50 Evertrust : Evertrust Asset Management Pte. Ltd. Existing Interested Person Transactions : The interested person transactions entered into between the Sponsor and CRT and their respective subsidiaries and associates, during the course of the current financial year up to the Latest Practicable Date FY2015 : The financial year ended 30 June 2015 IFA : CIMB Bank Berhad, Singapore Branch IFA Letter : The letter from the IFA to the Independent Directors and the Audit and Risk Committee of the Trustee-Manager containing its advice as set out in Appendix E of this Circular Independent Directors : The independent directors of the Trustee-Manager Independent Valuer : KPMG Corporate Finance Pte. Ltd. Latest Practicable Date : 2 June 2016, being the latest practicable date prior to the printing of this Circular Listing Manual : The listing manual of the SGX-ST Market Day : A day on which the SGX-ST is open for trading in securities Marubeni : Marubeni Corporation MAS : Monetary Authority of Singapore NAV : Net asset value NTA : Net tangible asset value Ordinary Resolution : A resolution proposed and passed as such by a majority being greater than 50.0% or more of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance with the provisions of the CRT Trust Deed ROFR : Right of first refusal(s) S$ and cents : Singapore dollars and cents SGX-ST : Singapore Exchange Securities Trading Limited Share Purchase Agreement : The share purchase agreement dated 12 June 2016 in relation to the Trustee-Manager Acquisition entered into between Evertrust, as the vendor, the TP Trustee (in its capacity as trustee of TM Share Trust), as the purchaser, the Trustee-Manager and the Sponsor (as guarantor) 45

51 sq ft : Square feet sq m : Square metres Strategic Partners : Daiwa House and Marubeni Substantial Unitholder : A person with an interest in Units constituting not less than 5.0% of the total number of Units in issue TM Shares : All of the issued shares of the Trustee-Manager TM Share Trust : The trust whereby the TP Trustee is trustee on behalf of Unitholders, such that all the TM Shares will be held by the TP Trustee on trust for Unitholders from time to time TM Share Trust Deed : The trust deed constituting the TM Share Trust dated 12 June 2016 TP Trustee : Perpetual (Asia) Limited Trustee-Manager : Croesus Retail Asset Management Pte. Ltd., in its capacity as trustee-manager of CRT Trustee-Manager Acquisition : The acquisition by the TP Trustee of all the issued shares of the Trustee-Manager from Evertrust Unit : A unit representing an undivided interest in CRT Unitholder : The registered holder for the time being of a Unit, including person(s) so registered as joint holders, except where the registered holder is CDP, the term Unitholder shall, in relation to Units registered in the name of CDP, mean, where the context requires, the Depositor whose Securities Account with CDP is credited with Units The terms Depositor and Depository Register shall have the meanings ascribed to them respectively in Section 81SF of the Securities and Futures Act, Chapter 289 of Singapore. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations. Any reference in this Circular to any enactment is a reference to that enactment for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise stated. Any discrepancies in the tables, graphs and charts between the listed amounts and totals thereof are due to rounding. Where applicable, figures and percentages are rounded to one decimal place. 46

52 APPENDIX A Current Holding Structure of the Trustee-Manager and CRT 100% Mr Jim Chang Cheng-Wen Mr Yong Chao Hsien Jeremy Croesus International Inc. 51% 49% JM Capital Kabushiki Kaisha Croesus Merchants International Croesus Group Pte. Ltd. 20% 80% Unitholders Strategic Partners Croesus Partners Distributions Holds Units 20% 80% CRT Evertrust 100% Trustee-Manager Fees Dividends 100% Shareholder s loans 100% Acts on behalf of Unitholders / Provision of management services Holds 49% preferred equity Singapore SPVs Certain Singapore SPVs establish Japan branch Singapore CRAM KK Asset management fees Croesus TMKs Holds 51% preferred equity Japan Branch of Singapore SPV Japan Japan Asset Managers 1 Beneficial ownership Net property income Property management fees Japan Property Managers Asset management services Property Property management services Note: (1) The Japan Asset Managers include CMIRM KK, which is the asset manager of Torius, Fuji Grand Natalie, Mallage Saga and Feeeal Asahikawa. The asset managers of the seven other properties of CRT are Tozai Asset Management Co., Ltd. (the asset manager for Aeon Town Moriya, Aeon Town Suzuka, Croesus Shinsaibashi, Mallage Shobu and One s Mall) and Marubeni Asset Management Co., Ltd. (the asset manager for Croesus Tachikawa and Luz Omori). A-1

53 APPENDIX B POST-INTERNALISATION HOLDING STRUCTURE OF TRUSTEE-MANAGER AND CRT TP Trustee Beneficial interest Unitholders TM Share Trust Deed TM Share Trust CRT Trust Deed Distributions CRT Holds Units Holds 100% TM Shares on behalf of Unitholders Dividends 100% Trustee- Manager Shareholder s loans 100% Holds 49% preferred equity Singapore SPVs Certain Singapore SPVs establish Japan branch Singapore CRAM KK Asset management fees Croesus TMKs Holds 51% preferred equity Japan Branch of Singapore SPV Japan Beneficial ownership Net property income Japan Asset Managers 1 Asset management services Property Property management fees Property management services Japan Property Managers Note: (1) The Japan Asset Managers include CMIRM KK, which is the asset manager of Torius, Fuji Grand Natalie, Mallage Saga and Feeeal Asahikawa. The asset managers of the seven other properties of CRT are Tozai Asset Management Co., Ltd. (the asset manager for Aeon Town Moriya, Aeon Town Suzuka, Croesus Shinsaibashi, Mallage Shobu and One s Mall) and Marubeni Asset Management Co., Ltd. (the asset manager for Croesus Tachikawa and Luz Omori). B-1

54 APPENDIX C VALUATION REPORT C-1

55 Project Sakura Valuation Report 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 1 Document Classification: KPMG Confidential C-2

56 Private and confidential 7 June 2016 The Board of Directors Croesus Retail Asset Management Pte. Ltd. (as trustee-manager of Croesus Retail Trust) 50 Raffles Place #25-03 Singapore Land Tower Singapore In preparing this Report, we have relied on information provided and representations made to us by the management of the Trustee-Manager and their professional advisors (collectively the Management ), and other publicly available information. Nothing in this Report should be taken to imply that KPMG CF has verified any information supplied to us, or has in any way carried out an audit of the books of account or other records of CRAM or CRT for the purpose of this Report. We have considered and relied upon information provided by Management, which we assume to be reliable, complete and not misleading. We have no reason to believe that any material facts have been withheld from us but do not warrant that our inquiries have revealed all of the matters which an audit or extensive examination might disclose. Further, we have not verified and do not assume responsibility for the accuracy or completeness of information provided to us. Dear Sirs, Independent Valuation of Croesus Retail Asset Management Pte. Ltd. in relation to the Proposed Internalisation by the Unitholders of Croesus Retail Trust KPMG Corporate Finance Pte. Ltd. ( KPMG CF or we ) has been appointed by the Board of Directors (the Directors ) of Croesus Retail Asset Management Pte. Ltd. ( CRAM, or the Trustee-Manager, or the Company ) in its capacity as the Trustee-Manager of Croesus Retail Trust ( CRT ) to undertake an independent valuation of the 100% equity value of CRAM (the Valuation ) for the purpose of the proposed acquisition of the Company by the unitholders of CRT (the Proposed Internalisation ). KPMG CF s conclusions on the Valuation are set out in this Valuation Report (the Report ) that has been prepared in accordance with KPMG CF s letter of engagement dated 10 March 2016 (the Engagement Letter ). This Report is prepared solely for the use by the Directors of the Trustee- Manager, and will be incorporated as an Appendix to the circular to be issued to CRT s unitholders in connection with the Proposed Internalisation (the Circular ). This Report is confidential to the Trustee-Manager and it is given on the understanding that it is not to be communicated, in whole or in part, to any third party other than the parties identified in our Engagement Letter, without KPMG CF s prior written consent. KPMG CF expressly disclaims any and all liability for any loss or damage of whatever kind to any person acting on information contained in this Report other than the Directors of the Trustee-Manager. Yours faithfully Vishal Sharma Executive Director 10 June 2016 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 2 Document Classification: KPMG Confidential C-3

57 Important Notice This Report is prepared solely for the use by the Directors of the Trustee-Manager, and will be incorporated as an Appendix to the Circular. It must not be copied, disclosed or circulated, or referred to in correspondence or discussion, either in whole or in part, with any other person, except to the parties identified in our Engagement Letter. This Report may not be used for any financial reporting or support for any such reporting, or for any fund raising activities of any entity for which KPMG LLP provides audit services. This Report is limited in its scope as provided in our Engagement Letter dated 10 March This Report is based upon information made available to KPMG CF by Management. Neither KPMG CF, nor its affiliated partnerships or bodies corporate, nor the partners, directors, shareholders, managers, employees or agents of any of them, make any representation or warranty, expressed or implied, as to the accuracy, reasonableness or completeness of the information made available to us for the purposes of preparing this Report. Accordingly, we express no opinion on the assumptions underlying the forecasts. If there were any omissions, inaccuracies or misrepresentations on the information provided by Management, this may have the effect of materially changing our Valuation. All such parties and entities expressly disclaim any and all liability for, or based on or relating to any such information contained in, or errors in or omissions from, this Report or based on or relating to the recipient s use of this Report. This Report in which this notice is incorporated does not constitute an offer or invitation to any section of the public to subscribe for or purchase any securities in or assets or liabilities of the Trustee-Manager, or any of its subsidiaries/jv companies/affiliates. This notice forms an integral part of this Report. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 3 Document Classification: KPMG Confidential C-4

58 Glossary AUM Asset Under Management EV Enterprise Value BMI Business Monitor International Capital IQ S&P Capital IQ Financial Database CAPM Capital Asset Pricing Model CMI Croesus Merchants International Pte. Ltd. CMIRM KK CMI Realty Management Kabushiki Kaisha CoCos Comparable Companies CoTrans Comparable Transactions CPI Consumer Price Index CRAM, or Company, or Trustee-Manager Croesus Retail Asset Management Pte. Ltd. CRAM KK Croesus Retail Asset Management Co., Ltd. CRT Croesus Retail Trust DCF Discounted Cash Flow Directors Board of Directors of Croesus Retail Asset Management Pte. Ltd. EBIT Earnings Before Interest and Tax EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation EV/EBITDA Enterprise Value to Earnings Before Interest, Tax, Depreciation and Amortisation FY Financial Year ending 30 June IPO Initial Public Offering JAM Japanese Asset Managers Kd Cost of Debt Ke Cost of Equity KPMG CF, or KCF KPMG Corporate Finance Pte. Ltd. Management Management of the Trustee-Manager, and their professional advisors NLA Net Leasable Area NPI Net Property Income Proposed Internalisation CRT s proposed acquisition of CRAM Report Independent Valuation report Valuation Independent valuation of the 100% equity value of CRAM Valuation Date 7 June 2016 Vendor Evertrust Asset Management Pte. Ltd. Effective Information Date 12 February 2016 WACC Weighted Average Cost of Capital EIU Economist Intelligence Unit WALE Weighted Average Lease Expiry 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 4 Document Classification: KPMG Confidential C-5

59 Contents Page Page Introduction 6 WACC Computation 29 Engagement Background and Scope of Work 7 Cash Flow Projection 30 Limitations and Basis of Preparation 8 DCF Valuation 31 Executive Summary 9 Market Approach Cross-check 32 Company Overview 12 Comparable Companies Method 33 Company Background 13 Comparable Transactions Method 34 Corporate Structure 14 Conclusion 35 Industry Overview 16 Appendices 37 Historical Financial Information 19 I. Sources of Information 38 Historical Income Statement 20 Historical Consolidated Balance Sheet 21 II. Valuation Methodology III. Discount Rate Applied IV. Comparable Companies Valuation Methodologies 23 V. Comparable Transactions 43 Income Approach 25 Key Assumptions June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-6 5

60 Introduction 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-7 6

61 Engagement Background and Scope of Work We understand that the Directors are proposing to internalise the Trustee- Manager through a proposed acquisition by the unitholders of CRT. The Proposed Internalisation is deemed to be an Interested Person Transaction ( IPT ) pursuant to Chapter 9 of the Singapore Exchange Securities Trading Limited Listing Manual. KPMG CF has been appointed by the Directors to undertake an independent valuation of CRAM based on information available as of the Effective Information Date for the purpose of the Proposed Internalisation. The Valuation performed by KPMG CF is prepared solely for the use by the Directors, and the Report will be incorporated as an Appendix to the Circular. Our Valuation has been presented in this Report, which sets out: - the underlying assumptions approved and provided to us by Management; In performing the Valuation, we have undertaken the following procedures: - An analysis of Japan s general economic outlook and Japan s retail real estate industry in the relevant jurisdictions in which CRT s underlying properties operate; - A review of the historical operating performance, including discussions with Management to obtain an explanation and clarification of information received; - A review of financial forecasts including revenues, operating margins, working capital, capital expenditure, and the assumptions which form the basis of the projections; - An analysis of financial and market data for publicly traded comparable companies and comparable transactions in order to develop an opinion on valuation parameters; and - the valuation methodologies employed; and - indicative values for CRAM s 100% equity stake as at the Valuation Date. The Valuation was based solely on the financial and operational information provided by Management. - An analysis of the discount rate applicable to the sector in which CRAM operates, and an assessment of the discount rate applicable to the cash flows provided within the financial forecast. We have not carried out any valuation or appraisal of individual assets of CRAM, including fixed assets such as property, plant or machinery. KPMG CF has applied the Income Approach, specifically the Discounted Cash Flow ( DCF ) method as the primary approach to estimate the value of CRAM s equity. KPMG CF has applied the Market Approach, more specifically, the CoCos (as defined herein) method and the CoTrans (as defined herein) method as cross-checks to the values derived using the Income Approach. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 7 Document Classification: KPMG Confidential C-8

62 Limitations and Basis of Preparation In preparing this Report, our primary source has been information provided and representations made to us by Management. We do not accept responsibility for the accuracy, reasonableness and completeness of such information, which remains the responsibility of the Company. Details of our principal information sources are set out in Appendix I and we have satisfied ourselves, so far as possible, that the information presented in this Report is consistent with other information which was made available to us in the course of our work in accordance with the terms of our Engagement Letter. We have not, however, sought to establish the reliability of the sources by reference to other evidence. Our opinion is based on prevailing market, regulatory, economic and other conditions as of the Effective Information Date at which information necessary for this valuation was provided by Management. These conditions can change over relatively short periods of time. Any subsequent changes in these conditions could impact upon the value, either positively or negatively. The scope of our work was different from that for an audit and, consequently, no assurance is expressed. This Report makes reference to KPMG CF Analysis. This indicates only that we have (where specified) undertaken certain analytical activities on the underlying data to arrive at the information presented. We have provided Management with a draft of this Report prior to its issue in final form. Management has not indicated anything to KPMG CF to suggest that the information contained therein is not materially accurate and complete, fair in the manner of its portrayal and therefore forms a reliable basis for the Valuation. This Report is provided solely for the benefit of the parties identified in our Engagement Letter and should not be copied, quoted or referred to in whole or in part without our prior written consent other than the parties identified in the Engagement Letter. We will not accept responsibility to any other party to whom this Report may be shown or who may acquire a copy of this Report. The Trustee-Manager and its successors indemnify KPMG CF and its affiliated entities and their respective officers and employees, who may be involved in or in any way associated with this Report, against any and all losses, claims, damages and liabilities arising out of or related to the performance of those services by KPMG CF and occasioned by reliance by KPMG CF on information provided by them or their representatives which is subsequently found to be false or misleading or not complete. Complete information is deemed to be information which at the time of completing this Report should have been available to KPMG CF and would have reasonably been expected to have been made available to KPMG CF to enable us to form our opinion. The Trustee-Manager will reimburse any indemnified party for all expenses (including without limitation, legal expenses) on a full indemnity basis. Neither KPMG CF nor any of its affiliates worldwide are responsible for updating this Report because of events or transactions occurring subsequent to the Effective Information Date. Any updates or second opinions on this Report cannot be sought by the Trustee-Manager from external agencies including any of the global offices of KPMG, without the prior written permission of KPMG CF. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 8 Document Classification: KPMG Confidential C-9

63 Executive Summary 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-10 9

64 Executive Summary Valuation Summary Based on the information provided by Management as of the Effective Information Date, we have obtained an indicative range of equity values for the Company of between JPY4,200.1 to JPY4,501.7 million (S$51.2 to S$54.9 million, based on an exchange rate of SGD to JPY of 82.0). In estimating the indicative range of values, we have used the Income Approach, specifically the DCF method where the projected cash flows of the Company are discounted using a discount rate that considers the risk profile associated with the cash flows. We consider the DCF method to be the more robust approach in determining the value of CRAM, as we note that: - CRAM s cash flows are expected to be relatively stable and recurring in nature, and therefore can be forecast with relative ease; - CRAM operates as a real estate asset manager with revenue streams from a base fee calculated based on the value of Trust Property (as defined in the Business Trusts Act (Cap 31A)) and a performance fee calculated based on the NPI of CRT; - The majority of the leases in CRT s property portfolio are structured as fixed long-term leases, thus allowing CRT to maintain a stable and recurring stream of Net Property Income ( NPI ) from the real estate assets; and - As at 31 December 2015, the Weighted Average Lease Expiry ( WALE ) for CRT s property portfolio s tenants is 8.0 years, the average committed occupancy for CRT s property portfolio is 98.8% and CRT s property portfolio is valued at JPY96.3 billion (S$1.2 billion). Key Assumptions We note that the market value of CRT s portfolio of investment properties has appreciated historically, however, we have made the assumption that the market value of CRT s portfolio remains stable and unchanged over the forecast period. We have assumed the as-is scenario where CRT will not acquire/dispose of any investment properties during the forecast period, save for the 3 new retail mall assets acquired prior to the Proposed Internalisation. CRAM will be able to charge a base fee of 0.5% of the value of the Trust Property of CRT, including on rental deposits received from tenants of the existing properties as well as from new tenants of the 3 new retail mall assets. We have applied the DCF method for the Valuation of the Company on a stand-alone and going concern basis. We have calculated free cash flows for the Company for 5 years from, FY2017 to FY2021, based on financial forecasts provided by Management, after which a terminal value is calculated to represent the value of cash flows beyond the forecast period. We have estimated an NPI growth rate of 1.45% for 5 years, from FY2017 to FY2021, based on the average of the normalized historical growth rate of NPI from CRT s portfolio of investment properties, excluding income from One s Mall and Torius as they were more recently acquired. In calculating the terminal value, we have capitalized the terminal year cash flow using an estimated discount rate of 7.8%-8.3% and a long term growth rate of 1.2% to reflect the long term inflation rate in Japan as estimated by Economist Intelligence Unit ( EIU ). We note that CRT s properties are all commercial retail malls on freehold or longdated leases. We have applied an expense growth rate of 1.2% over the forecast period to reflect the long term inflation rate in Japan as estimated by EIU. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 10 Document Classification: KPMG Confidential C-11

65 Executive Summary Valuation Cross-check We have carried out a cross-check of the indicative range of equity values derived from the DCF Method by using the Market Approach, more specifically, using the Comparable Companies ( CoCos ) method and the Comparable Transactions ( CoTrans ) method. We note that none of the selected companies operations from the set of CoCos and CoTrans exactly match CRAM in terms of profile, stage of maturity, cash-flow profiles and size. Thus, we have considered the Market Approach only as a cross-check to the DCF valuation. We note that the implied range of values based on: - Enterprise Value ( EV ) to Earnings Before Interest, Tax, Depreciation and Amortisation ( EV/EBITDA ) multiple (based on CoCos); - EV as a percentage of Assets Under Management ( AUM ) (based on CoCos); and - EV as a percentage of AUM (based on CoTrans); is JPY3,194.5 million JPY5,773.7 million (S$39.0 million to S$70.4 million, based on an exchange rate of SGD to JPY of 82.0). Valuation Summary JPY million Low High Income Approach DCF Method 4, ,501.7 Market Approach Cross-check CoCos EV/EBITDA multiple 3, ,904.7 EV as % of AUM 3, ,773.7 CoTrans EV as % of AUM 3, ,570.7 Source: KPMG CF Analysis Valuation Overview The indicative range of equity values derived using the Income Approach falls within the range of values derived using the Market Approach. We note that our Valuation is dependent upon the following general assumptions or inputs: DCF Approach 4, ,501.7 The accuracy and completeness of the audited financial statements, pro-forma income statement for FY2016, interim management accounts and operational information provided to us; EV/EBITDA multiple (CoCos) 3, ,904.7 The robustness of the assumptions underlying the financial projection provided to us, which are dependent on, inter alia, the NPI generated by the underlying assets in the Trust Property and the estimation of operating costs post-internalisation, where staff remuneration costs represents the largest component of ongoing operating costs; EV as % of AUM (CoCos) 3, ,773.7 The ability of CRAM to maintain consistent NPI growth and achieve its financial projections; and EV as % of AUM (CoTrans) 3, ,570.7 Changes in the market, regulatory, and economic environment, particularly in countries where CRAM derives its revenue. In JPY million 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 11 Document Classification: KPMG Confidential C-12

66 Company Overview 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-13 12

67 Company Background Background Operations Incorporated in 2012, CRAM is a wholly-owned subsidiary of Evertrust Asset Management Pte. Ltd. (the Vendor ) which is owned by Croesus Partners Pte. Ltd. (80%) and the strategic partners, Daiwa House Industry Co. Ltd (10%) and Marubeni Corporation (10%). CRAM provides various asset management services to CRT s property portfolio in Japan in order to deliver return on investment to CRT s unitholders by (i) regular and growing distributions and (ii) long-term capital value growth of CRT s portfolio. The key executives of the Trustee Manager have extensive knowledge of the Japanese real estate industry acquired from their prior experience in managing Real Estate Investment Trusts ( REITs ) owning real estate assets located in Japan. In addition, the Trustee-Manager is assisted by an experienced Japan-based asset management team. The real estate assets under CRT s portfolio of investment properties currently comprises of 8 commercial retail malls in Japan (excluding the 3 new retail mall assets that were recently acquired prior to the Proposed Internalisation). The properties are each located conveniently and are highly accessible through different modes of transportation. The existing Japanese Asset Managers ( JAM ) are Tozai Asset Management Co., Ltd. ( Tozai ), Marubeni Asset Management Co., Ltd. ( Marubeni ) and CMI Realty Management Kabushiki Kaisha ( CMIRM KK ). The Board of Directors of the Trustee-Manager comprises of individuals with extensive experience across various industries. Please refer to page 14 for more details on the existing corporate structure of CRT and CRAM. With a majority of the leases structured as fixed long-term leases, CRT has been able to maintain a stable stream of cash flows and NPI from the real estate assets. We note the following statistics for CRT s property portfolio: - CRT s properties are all commercial retail malls on freehold or longdated leases; - The WALE for CRT s property portfolio s tenants is 8.0 years as at 31 December 2015; - The average committed occupancy for CRT s property portfolio is 98.8% as at 31 December 2015; - CRT s property portfolio is valued at JPY96.3 billion (S$1.2 billion) as at 31 December 2015; and - The aggregate net leasable area ( NLA ) for CRT s property portfolio is 328,052 sqm as at 31 December June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 13 Document Classification: KPMG Confidential C-14

68 Corporate Structure The existing corporate structure of CRAM and CRT is illustrated in the chart below. Croesus Partners Strategic Partners 1 Pte Ltd 20% 80% Unitholders Evertrust 100% Trustee Manager Management Fees Management services Distributions Unitholding CRT Dividends 100% Singapore SPVs Shareholders loan Established a few Japan branches CRAM KK 2 100% Consultation Fee Japan Asset Managers Japan Property Managers Asset management services Asset management fees Property management services Property management fees Croesus TMK 3 NPI Property 49% preferred equity Beneficial ownership 51% preferred equity Japan branch of Singapore SPV Notes: 1. Strategic Partners refer to Daiwa House Industry Co. Ltd and Marubeni Corporation. 2. Croesus Retail Asset Management Co., Ltd. ( CRAM KK ) was incorporated in Japan to employ certain staff required to run Trustee-Manager s operations. 3. TMK refers to Tokutei Mokuteki Kaisha which is the common structure adopted for real estate investment in Japan. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-15 14

69 Corporate Structure The proposed post-internalisation corporate structure of CRAM and CRT is illustrated in the chart below. Third Party Trustee Unitholders Hold shares in Trustee- Manager on behalf of unitholders Distributions Unitholding Trust Deed Trustee Manager CRT Shareholders loan Dividends 100% 100% Singapore SPVs Established a few Japan branches CRAM KK 1 Until FY2021 Japan Asset Managers Japan Property Managers Asset management services Asset management fees Property management services Property management fees Croesus TMK 2 NPI Property 49% preferred equity Beneficial ownership 51% preferred equity Japan branch of Singapore SPV Notes: 1. CRAM KK was incorporated in Japan to employ certain staff required to run Trustee-Manager s operations. 2. TMK refers to Tokutei Mokuteki Kaisha which is the common structure adopted for real estate investment in Japan. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-16 15

70 Industry Overview 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-17 16

71 Industry Overview Since the performance of CRAM is linked to the performance of the underlying properties owned by CRT, the performance of the properties in turn are impacted by the overall economic environment. We provide a short analysis of both, (i) the economic environment in Japan and (ii) Japan s retail real estate industry. Japan s economic outlook The Economist Intelligence Unit forecasts Japan s real GDP to grow at 0.8% in 2016 amid weak external demand. An appreciating Japanese Yen is expected to limit the growth in external sector. According to EIU, JPY is forecast to appreciate to an annual average exchange rate of JPY 115 per US Dollar ( USD ) in 2016, from JPY 121 per USD in According to EIU, consumer price inflation ( CPI ) in Japan is forecast to decelerate to 0.3% in 2016 from 0.8% in 2015, reflecting low global oil prices and a stronger JPY. However, CPI is expected to reach 1.2% by The real personal disposable income of Japan is expected to achieve a compounded annual growth rate of 1.8% for the period from 2015 to 2020, signaling conservative growth in potential local demand. The table below summarises Japan s macroeconomic indicators, for the period Japan's Macroeconomic Indicators F 2017F 2018F 2019F 2020F Real GDP growth (%) Consumer price inflation (av; %) Personal disposable income (USD bn) 2,466 2,492 2,503 2,583 2,636 2,699 Population (m) Source: Economist Intelligence Unit Japan s retail real estate industry According to Business Monitor International ( BMI ), Japan is the third largest retail market in the world, after USA and China. Japan s retail sector has been supported by a strong tourist trade leading to a stable retail real estate sector, with increasing rental rates since However, the popularity of discount stores and online shopping has led to an increased pressure on traditional shops affecting consumer demand in the retail sector. Euromonitor expects Japan s store-based retail market to witness no growth (remaining flat) with a market value of JPY 98.8 trillion by 2019, in comparison to a market value of JPY 98.9 trillion in Japan s Nonstore retailing market, however, is expected to grow at an annual average of 4.9%, for the period , from JPY 14.1 trillion in 2015 to JPY 17.8 trillion by The chart below summarises Japan s retail market value forecast, for the period Japan's retail market value, for the period In JPY Trillion Retail value Source: Euromonitor 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 17 Document Classification: KPMG Confidential C-18

72 Y-o-y growth (In %) Industry Overview Japan s retail real estate industry (continued) Going forward, BMI expects the rental rates to continue increasing in the short term. However, changes in spending habits is expected to dampen demand levels in retail sector and hence, the rental rates of the retail real estate market in the longer term. Retail real estate sector Tokyo According to the Savills report titled Japan Retail published September 2015, Tokyo accounted for approximately 70% of investments in Japan s retail real estate sector in the first half of According to BMI, Tokyo s average retail rental increased 12.4% to JPY 45, per square meter per month in 2015 from JPY 40, per square meter per month in 2014, reflecting strong tourist spending and interest of global companies to maintain a presence in Tokyo. The chart on the right summarises Tokyo s monthly average retail rental, for the period Tokyo's retail rental rates, for the period Although Tokyo is one of the most saturated property markets in Japan, property managers still command high rental rates. Going forward, Tokyo is also expected to profit significantly from the 2020 Olympic Games, Average rent Growth ensuring demand remains high over the next five years. Source: BMI research 54,000 45,000 36,000 27,000 18,000 9, , % 38,009 36, % -2.9% 40, % 45, % 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% 18 In JPY/sqm/month C-19

73 Historical Financial Information 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-20 19

74 Historical Financial Information The adjacent table sets out the historical consolidated audited income statements of CRAM and its subsidiary, CRAM KK, for the period from its incorporation on 1 March 2012 to FY2015, as well as the unaudited FY2016 budgeted (pre-internalisation) and pro-forma (postinternalisation) income statement as provided by Management. We note the following items Historical revenues consists of management fees, performance fees and acquisition fees paid by CRT, while the budgeted and pro-forma revenues exclude acquisition fees. Employee compensation primarily comprises of employee salaries and directors fees. CRAM s cost of sales mainly comprise of consultation fees paid to JAM. Other operating expenses primarily consist of travel expenses, office rental, administration expenses, legal and professional fees. In relation to the FY2016 pro-forma income statement (post-internalisation), where we have assumed CRAM operates on a stand alone and normalized basis, we note that: Management fee income of JPY 75.2 million due to CRAM arising from the acquisition of 3 new retail mall assets has been included in revenue. Consultation services from JAM and management services provided by CMI will be terminated after the Proposed Internalisation as CRAM now has the relevant experience, expertise and the network to perform its duties without any continuing external advice. Accordingly, consultation and management fees paid to JAM and CMI, respectively, are removed from CRAM s cost of sales post-internalisation. Additional employee compensation of JPY 15.3 million relating to new management to be hired post-internalisation has been added to expenses. Rental expenses for Ocean Financial Centre office of JPY 9.6 million is removed since the contract will be terminated post-internalisation. Advisory services fee of JPY 21.9m comprise services provided to the Trustee-Manager in its own corporate capacity by a third-party consultancy service provider. Such advisory services were rendered to the Trustee-Manager to facilitate and assist the Trustee-Manager in the search and acquisition of Japanese assets. Such services are no longer required as the Trustee-Manager has the relevant experience, expertise and the network to perform such search and acquisition work in-house. Accordingly, the advisory services agreement will discontinue post-internalisation. Dividend income of JPY 15.2 million from units of CRT held by CRAM is also eliminated after CRAM is internalised by CRT. Audited Historical and Pro-forma Income Statement of CRAM JPY'000 FY FY2014 FY2015 FY2016 FY2016 Actual Actual Actual Budgeted Pro-forma 30-Jun Jun Jun Jun Jun-16 Revenue 558, , , , ,385 y-o-y growth -2.6% 16.6% 14.7% 12.2% Cost of sales (516,154) (213,140) (214,724) (149,412) - % of revenue 92.4% 39.2% 33.9% 23.9% 0.0% Gross profit 42, , , , ,385 Less: Expenses Employee compensation (37,883) (207,408) (198,803) (238,009) (253,309) Other operating expenses (10,374) (91,629) (174,133) (142,704) (111,234) Realised loss on sale of investment securities - (2,214) (19,003) - - Add: Other Income Dividend income from investment securities - 14,460 13,158 15,170 - Other income EBIT (5,979) 44,228 41, , ,842 EBIT Margin -1.1% 8.1% 6.5% 17.5% 47.4% Interest income Finance cost - (2,772) (5,286) (5,400) (5,400) Profit before tax (5,979) 41,456 35, , ,442 PBT Margin -1.1% 7.6% 5.6% 16.6% 48.0% Income tax expense (47) (3,477) (3,270) (10,371) (52,649) Profit after tax (6,026) 37,979 32,469 93, ,793 Profit Margin -1.1% 7.0% 5.1% 14.9% 40.6% Source: Audited Financial Statements 1) For the period starting 1 March 2012 which is the date of incorporation 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 20 Document Classification: KPMG Confidential C-21

75 Historical Financial Information The adjacent table sets out the audited balance sheet of CRAM and its subsidiary, CRAM KK, for the period from its incorporation on 1 March 2012 to FY2015. Assets Trade receivables comprise of receivables due from CRT which are noninterest bearing and can be settled in the form of cash or units in CRT. We understand that in FY2015, c. JPY 129 million has been arranged to be settled by issuance of units in CRT. Other receivables amounting to JPY 18 million in FY2015 consists of receivable due from third parties and CRT. We note that refundable deposits amounting to JPY 35 million has also been classified under other receivables for FY2015. We understand that these receivables are interest-free, unsecured and repayable on demand in the form of cash. Property, plant and equipment ( PPE ) primarily consist of building and improvements, and furniture and fittings. A significant portion of PPE is held under finance leases, with the carrying amount of buildings and improvements, and furniture and fittings held under finance lease amounting to JPY 26 million and JPY 12 million respectively. Investment securities refer to units held in CRT that are classified as availablefor-sale securities. Audited Historical Consolidated Balance Sheet of CRAM JPY'000 FY FY2014 FY Jun Jun Jun-15 Assets Current assets Trade and other receivables 65, , ,034 Prepayments 1,346 18,186 12,680 Cash and short-term deposits 132, , ,257 Total current assets 198, , ,971 Non-current assets Property, plant and equipment - 6,784 46,395 Investment securities - 18,144 47,500 Prepayments - - 6,366 Other receivables ,883 Total non-current assets - 25, ,144 Total assets 198, , ,115 Liabilities Current liabilities Trade and other payables (198,304) (139,946) (128,389) Loans and borrowings - (157,972) (175,183) Income tax payable (47) (1,221) (3,040) Total current liabilities (198,351) (299,139) (306,612) Non-current liabilities Loans and borrowings - - (49,367) Other liabilities - - (14,931) Deferred tax liabilities - (1,923) (2,038) Total non-current liabilities - (1,923) (66,336) Total liabilities (198,351) (301,062) (372,948) Net assets ,028 71,167 Source: Audited Financial Statements 1) For the period starting 1 March 2012 which is the date of incorporation 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-22 21

76 Historical Financial Information Liabilities Trade payables of JPY 60 million owed to CMI for FY2015 is interest-free, unsecured and repayable on demand in cash. Other payables consist of amount due to third parties as well as accrued operating expenses. We understand that other payables to third parties represent mainly sundry payables and goods and services tax payables. As of FY2015, loans and borrowings refer to obligations under the finance lease, loans from a related party, and bank loans. - We understand that obligations under finance leases, which started in FY2015, are secured by a charge over the leased assets. The average discount rate implicit in the leases is 3.56% p.a. - Bank loans amounting to JPY 165 million are secured by units of CRT held by CMI. The interest rates range from the bank swap rate of +2.0% to the bank offer rate +2.0% per annum. The loans are repayable upon maturity. - Loans from related party in FY2015 amounts to JPY 30 million are unsecured and are repayable upon maturity in 2019 with an interest rate of 3%. We understand that other liabilities in FY2015 refer to asset retirement obligations. Audited Historical Consolidated Balance Sheet of CRAM JPY'000 FY FY2014 FY Jun Jun Jun-15 Assets Current assets Trade and other receivables 65, , ,034 Prepayments 1,346 18,186 12,680 Cash and short-term deposits 132, , ,257 Total current assets 198, , ,971 Non-current assets Property, plant and equipment - 6,784 46,395 Investment securities - 18,144 47,500 Prepayments - - 6,366 Other receivables ,883 Total non-current assets - 25, ,144 Total assets 198, , ,115 Liabilities Current liabilities Trade and other payables (198,304) (139,946) (128,389) Loans and borrowings - (157,972) (175,183) Income tax payable (47) (1,221) (3,040) Total current liabilities (198,351) (299,139) (306,612) Non-current liabilities Loans and borrowings - - (49,367) Other liabilities - - (14,931) Deferred tax liabilities - (1,923) (2,038) Total non-current liabilities - (1,923) (66,336) Total liabilities (198,351) (301,062) (372,948) Net assets ,028 71,167 Source: Audited Financial Statements 1) For the period starting 1 March 2012 which is the date of incorporation 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-23 22

77 Valuation Methodologies 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-24 23

78 Valuation Methodologies Valuation methodologies Based on the above, we have valued CRAM using: The company value is commonly derived by applying one or more of the following methodologies: - the DCF method under the Income Approach as the primary methodology; and - Income Approach (Discounted Cash Flow method) - Market Approach (including Comparable Companies and Comparable Transactions methods) - Cost Approach (Net Asset Value method) Selected methodologies In selecting the appropriate methodology to be adopted in valuing CRAM, we have considered the following: - the nature of the Company and its structure as the Trustee- Manager of a business trust; - availability of financial data of the Company; - availability of data for comparable companies and/or comparable transactions; and - the Market Approach using CoCos and CoTrans methods as a cross-check to our Income Approach. We have applied the DCF method for the Valuation of the Company on a stand-alone and going concern basis. We have calculated free cash flows for 5 years from FY2017 to FY2021 based on financial forecasts provided by Management, after which a terminal value is calculated to represent the value of cash flows beyond the forecast period. The Valuation assumes a cash free and debt free transaction. For the CoCos method, we have shortlisted comparable real estate asset managers with a similar function to CRAM. For the CoTrans method, we have selected a number of precedent transactions involving the internalisation of its respective trustee-manager or the acquisition of real estate asset manager with similar operations to CRAM. - current conditions and future plans of the Company. We note that: - CRAM operates as a real estate asset manager with revenue streams from a base fee calculated based on the value of Trust Property and a performance fee calculated based on the NPI of CRT; and - Accordingly, the cash flows are expected to be relatively stable and recurring in nature, and therefore can be forecast with relative ease. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 24 Document Classification: KPMG Confidential C-25

79 Income Approach C-26

80 Income Approach: Key Assumptions We have adopted the following key assumptions as the basis of the Company s projected cash flows post-internalisation. Revenue Assumptions We have relied upon the estimated 2016 NPI derived from CRT s portfolio of investment properties (including the 3 new retail mall assets acquired prior to the Proposed Internalisation) provided by Management as a starting point for projecting future NPI for CRT. We have estimated an NPI growth rate of 1.45%, based on the average of the normalized historical NPI growth rate of CRT s portfolio of investment properties for FY2014 and FY2015 (excluding income from One s Mall and Torius as they were recently acquired in FY2014 and FY2015 respectively). We have assumed an as-is scenario where CRT will not acquire/dispose of any investment properties during the forecast period, save for the 3 new retail mall assets acquired prior to the Proposed Internalisation. We have forecast future revenues for CRAM based on CRAM s existing management fee structure as set out below: No one-off acquisition or divestment fees due to CRAM from CRT have been considered over the forecast period, so as to project CRAM s revenues on a normalized basis. Consumption Tax Consumption tax arising from the acquisition of the 3 new retail mall assets has not been capitalized on the basis that it is a one-time expense and will be refunded back to CRAM in the next 12 months. Accordingly, it has been removed when calculating CRAM s base fees on a normalized basis. Dividend Reinvestment Plan ( DRP ) We understand from Management that the revenues arising from the DRP is estimated by multiplying the income available for distribution by a projected DRP take-up rate of 20%. This projected DRP take-up rate was estimated by Management based on Management calculations of the historical DRP take-up rate. - Base fee of 0.6% of the value of Trust Property if the value is less than JPY100 billion; - Base fee of 0.5% of the value of Trust Property if the value is equal to or greater than JPY100 billion; and - Performance fee of 3.0% per annum of Net Property Income of CRT. We note that CRAM will be able to charge a base fee of 0.5% of the value of the Trust Property of CRT, including on rental deposits received from tenants from the existing properties as well as from new tenants from the 3 new retail mall assets acquired prior to the Proposed Internalisation. We have also assumed that the market value of CRT s portfolio of investment properties remains stable and unchanged over the forecast period. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 26 Document Classification: KPMG Confidential C-27

81 Income Approach: Key Assumptions Expense Assumptions Cost of sales CRAM s cost of sales comprises of consultation and service fees paid to JAM and management fees paid to CMI. JAM provides consultation services to CRAM by collecting investment information, identifying investment opportunities and providing other administrative services as required by CRAM. CMI provides various management services to CRAM to facilitate and assist CRAM in the performance of its duties. After the Proposed Internalisation, we note that CRAM will no longer require the facilitation and assistance provided by JAM and CMI as CRAM now has the relevant experience, expertise and the network to perform its duties without any continuing external advice. Accordingly, CRAM will no longer pay any consultation and management fees as they will be discontinued post-internalisation. However, CRAM will incur incremental employee compensation fees for any additional employees that will be hired to take over the functions of JAM. - We have applied the projected employee headcount increase over the forecast period and the corresponding compensation expenses, as provided by Management. Administrative expenses - We note that the bulk of CRAM s administrative expenses consists of rental expenses and professional fees. - We have adopted the budgeted administrative expenses for FY2016, as provided by Management, and applied an administrative expenses growth rate of 1.2% over the forecast period to reflect the long term inflationary growth in Japan estimated by EIU. Tax Expenses The effective tax rate of 18.8% was estimated based on the normalized taxable income of CRAM entities in Singapore and Japan. Operating Expenses Operating expenses primarily consists of employee compensation and administrative expenses. Employee compensation - We note that CRAM s employee compensation mainly comprises of employee salaries, directors remuneration, staff bonuses, employee welfare and allowances, employee benefits and staff commuting expenses. - We understand from Management that CRAM will take over the role of JAM post-internalisation and will increase the employee headcount accordingly to carry out the function of JAM. Therefore, CRAM will incur incremental employee cost. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 27 Document Classification: KPMG Confidential C-28

82 Income Approach: Key Assumptions Assumptions made for the calculation of Free Cash Flows Mid-year Discounting Depreciation We have applied the budgeted depreciation for FY2016 as provided by Management, and made the assumption that it remains constant through the forecast period. We have applied the mid-year discounting convention as we are of the view that it is a more accurate approximation of the actual timing of the cash flows generated by the Company. Terminal Value Management has advised that the budgeted depreciation for FY2016 differs from that for FY2015 as some of CRAM s assets will be sold to CMIRM KK before the Proposed Internalisation. Capital Expenditure ( Capex ) We understand from Management that CRAM does not possess any significant fixed assets and that maintenance Capex will mainly be incurred for renovations on furniture and office equipment. On the basis that any maintenance Capex would be minimal, we have applied a Capex amount which equals the depreciation over the forecast period. We have made this assumption on the basis that the Company will be required to make some minimal maintenance Capex to maintain its existing size and operations. We have attributed a terminal value to our Valuation as the Company is expected to operate as a going concern beyond the forecast period. In calculating the terminal value, we have capitalized the terminal year cash flow using the Gordon Constant Growth model. Our capitalization rate is based on the following assumptions: - Discount rate of 7.8%-8.3% as discussed in the following page; and - Long term growth rate of 1.2% in line with the long term inflation rate for Japan sourced from EIU. Net Working Capital Being an asset manager, CRAM s working capital comprises of mainly receivables and payables arising from management fees that are only settled at the end of every quarter and employee compensation fees that are only paid at certain intervals respectively. Management has represented that the nature of CRAM s business results in little to no net working capital. We have reviewed CRAM s historical financial statements and note that there was minimal net working capital except for a one-off working capital adjustment in Accordingly, no changes to net working capital have been estimated. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 28 Document Classification: KPMG Confidential C-29

83 Cost of equity Cost of debt Income Approach: WACC Computation 0.8% 5.0% % 1.5% - 2.0% 8.0% - 8.5% Market Company Risk-free rate 1 Country Risk + ( Equity Risk x Beta 3 ) + Specific = Premium 2 Premium 4 + Adjustment 5 Cost of Equity (rounded) x 97.3% 8 7.8% - 8.3% 2.7% 18.8% 2.2% = WACC (rounded) Pre-tax x (1 - Tax rate) = Cost of Debt 7 After-tax 6 Cost of Debt x 2.7% 8 Notes: 1. Risk-free rate of 0.8% for Japan, being a non-aaa rated country, is estimated based on the 10-year U.S. government bond yield, adjusted for the inflation differential between the country and the U.S. using the International Fisher Equation. 2. The market risk premium of 5% is based on KPMG s internal estimates of equity risk premium for mature markets. 3. Beta is derived from the unlevered beta of comparable companies, and re-levered based on (i) median D/E ratio of Trading Comps and (ii) marginal tax rate based on the country of listing. The comparable companies selected are listed in Appendix IV. 4. The country risk premium is based on studies on country risk premiums performed by Professor Aswath Damodaran of NYU Stern School of Business. 5. Company specific adjustment in the range on 1.5% to 2.0% has been applied in the estimation of Cost of Equity. Company specific risk adjustment is due to perceived risk associated with factors that are unique to the Company. 6. Pre-tax cost of debt of 2.7% was provided by Management based on the existing weighted average borrowing rate of the Company. 7. Effective tax rate of 18.8% is derived from the normalized taxable income of CRAM entities in Singapore and Japan. 8. We have applied a debt to capital ratio of 2.7% based on the existing debt to equity ratio of CRAM. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 29 Document Classification: KPMG Confidential C-30

84 Income Approach: Cash Flow Projections Cash Flow Projections JPY million Year Ended 30 June Terminal 7-Jun Jun Jun Jun Jun Jun-21 Year Base Revenue Additional Revenue from Acquisitions Total Revenue Employee Compensation 2 (253.3) (264.3) (291.5) (327.0) (330.9) (334.9) Administrative Expenses (112.6) (113.9) (115.3) (116.7) (118.1) (119.5) EBIT Tax Expenses 18.8% (62.2) (61.2) (71.7) (69.2) (70.5) (71.8) NOPAT Source: KPMG CF Analysis, Management Notes: 1. Refers to the additional revenue CRAM will receive upon completion of the acquisition of 3 new retail mall assets in Japan. The acquisition is completed prior to the Proposed Internalisation. 2. The management of the 3 new retail mall assets will be undertaken by CMIRM KK for FY2017 and FY2018. Upon the end of the 2 year contract period, CRAM KK, a wholly owned subsidiary of CRAM, will take over the role of CMIRM KK. Accordingly, CRAM will incur incremental employee cost due to the additional employee headcount as they replace the role of JAM. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-31 30

85 Income Approach: DCF Valuation DCF Valuation - KPMG CF (Upper Boundary) JPY million Year Ended 30 June 7-Jun Jun Jun Jun Jun Jun-21 Terminal Year NOPAT Change in Net Working Capital Depreciation and Amortisation Capex (9.1) (9.1) (9.1) (9.1) (9.1) (9.1) Terminal Value 1.2% 4,659.5 FCFF ,659.5 Discount Factor 7.8% Discounted Cash Flows ,310.2 Equity Value (JPY million) 4,501.7 Conversion Rate 82.0 Equity Value (SGD million) 54.9 DCF Valuation - KPMG CF (Lower Boundary) JPY million Year Ended 30 June 7-Jun Jun Jun Jun Jun Jun-21 Terminal Year NOPAT Change in Net Working Capital Depreciation and Amortisation Capex (9.1) (9.1) (9.1) (9.1) (9.1) (9.1) Terminal Value 1.2% 4,341.2 FCFF ,341.2 Discount Factor 8.3% Discounted Cash Flows ,021.7 Equity Value (JPY million) 4,200.1 Conversion Rate 82.0 Equity Value (SGD million) 51.2 Source: KPMG CF Analysis, Management 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-32 31

86 Market Approach Cross-check 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-33 32

87 Comparable Companies Method Valuation Cross Check As a cross-check to our DCF method, we have compared the implied range of equity values derived from a set of CoCos and CoTrans and the pro-forma FY2016 EBITDA, to the range estimated using the DCF method. Comparable Companies Method We have selected 2 listed comparable companies (as detailed in Appendix IV), on the basis that: (i) they principally manage publicly listed REITs and/or private real estate investment funds with portfolios consisting of retail real estate; and CoCos Cross-check - EV / EBITDA Multiple 2016 EV/ EBITDA JPY million Low High Comparable Companies' multiple Pro-forma EBITDA for year ended 30 June Equity Value (Minority, Marketable) 4, ,716.0 Add: Control Premium 20.0% 30.0% Equity Value (Majority, Marketable) 5, ,130.9 Less: DLOM 30.0% 20.0% Equity Value 3, ,904.7 Exchange rate of SGD to JPY 82.0 Equity Value (SGD million) Source: KPMG CF Analysis, Capital IQ (ii) their aggregate AUM is greater than S$1 billion. We note that none of these selected companies operations exactly match CRAM in term of profile, stage of maturity, cash-flow profiles and size. Thus, we have only considered CoCos as a cross-check to the DCF method. The LTM EV/EBITDA and EV as percentage of AUM indicated by the CoCos range from 13.0x and 13.2x and 3.0% and 4.4%, respectively. As the Proposed Internalisation involves the acquisition of a 100% stake in the Company, we have applied a control premium ranging from 20% to 30% to reflect the benefits associated from holding a controlling interest. As our CoCos comprises of publicly listed real estate asset managers, we have applied a Discount for Lack of Marketability ( DLOM ) ranging from 20% to 30%, to the equity value. CoCos Cross-check - EV as % of AUM 2016 EV as % of AUM JPY million Low High Comparable Companies' multiple 3.0% 4.4% Budgeted CRT's AUM 1 (as at 30 June 2016) 125,760.9 Equity value (Minority, Marketable) 3, ,551.6 Add: Control Premium 20.0% 30.0% Equity Value (Majority, Marketable) 4, ,217.1 Less: DLOM 30.0% 20.0% Equity Value 3, ,773.7 Exchange rate of SGD to JPY 82.0 Equity Value (SGD million) Source: KPMG CF Analysis, Capital IQ Notes: 1. Budgeted CRT's AUM includes the acquisition of 3 new retail mall assets 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 33 Document Classification: KPMG Confidential C-34

88 Comparable Transactions Method Comparable Transactions Method We have selected 6 comparable transactions (as detailed in Appendix V) where the transactions involve the four internalisations of trusteemanagers in Australia and New Zealand and two acquisitions of asset managers in Singapore and Hong Kong, being the most recent transactions over the last 3 years. We note that none of these selected companies operations exactly match CRAM in term of profile, stage of maturity, cash-flow profiles and size. As such, we have only considered this methodology as a crosscheck to the DCF method. We have not considered the EV/EBITDA multiples from the CoTrans since there is limited public information available on the transactions to derive accurate multiples. CoTrans Cross-check - EV as % of AUM EV as % of AUM JPY million Low 1 High 1 Comparable Transactions' multiple 2.7% 3.6% Budgeted CRT's AUM 2 (as at 30 June 2016) 125,760.9 Equity value 3, ,570.7 Exchange rate of SGD to JPY 82.0 Equity Value (SGD million) Source: KPMG CF Analysis, Capital IQ Notes: 1. The 1st and 3rd quartile of Comparable Transactions' multiples have been used as the low and high bounds respectively 2. Budgeted CRT's AUM includes the acquisition of 3 new retail mall assets The purchase consideration as percentage of AUM indicated by the CoTrans range is between 2.7% and 3.6%. We note that the set of comparable transactions comprises of majority stake acquisitions, except for the minority stake acquisition of ARA Asset Management Limited. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 34 Document Classification: KPMG Confidential C-35

89 Conclusion 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-36 35

90 Conclusion Valuation Summary Based on the information provided by Management as of the Effective Information Date, we have obtained an indicative range of equity values for the Company of between JPY4,200.1 to JPY4,501.7 million (S$51.2 to S$54.9 million, based on an exchange rate of SGD to JPY of 82.0). In estimating the indicative range of values, we have used the Income Approach, specifically the DCF method whereby the projected cash flows of the Company are discounted using a discount rate that consider the risk profile associated with the cash flows. Valuation Summary JPY million Low High Income Approach DCF Method 4, ,501.7 Market Approach Cross-check CoCos EV/EBITDA multiple 3, ,904.7 EV as % of AUM 3, ,773.7 Valuation Cross-check We have carried out a cross-check of the indicative range of values derived from the DCF method by using the Market Approach, more specifically, the Comparable Companies method and the Comparable Transactions method. The adjacent table illustrates the findings from our Market Approach crosscheck. CoTrans EV as % of AUM 3, ,570.7 Source: KPMG CF Analysis Valuation Overview We note that the implied range of values based on: DCF Approach 4, , EV to EBITDA multiple (based on CoCos); - EV as a percentage of AUM (based on CoCos); and - EV as a percentage of AUM (based on CoTrans); EV/EBITDA multiple (CoCos) 3, ,904.7 is JPY3,194.5 million JPY5,773.7 million (S$39.0 million to S$70.4 million, based on an exchange rate of SGD to JPY of 82.0). The indicative range of equity values derived using the Income Approach falls within the range of values derived using the Market Approach. EV as % of AUM (CoCos) 3, ,773.7 EV as % of AUM (CoTrans) 3, ,570.7 In JPY million 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-37 36

91 Appendices 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-38 37

92 I: Sources of Information In preparing this report we have been provided with and considered the following sources of information: Historical consolidated balance sheet, income statement, and cash flow statement of CRAM for the financial years ended 30 June 2014 to 30 June 2015; Unaudited budgeted and pro-forma financial information of CRAM for FY2016; Financial projections of CRAM from FY2017 to FY2021; Discussions with various parties, and obtained clarifications from Management, including representatives from the Sponsors, and the Issuer s financial adviser; and Contracts and other documents provided by Management and CRAM s financial adviser. We have also used information sourced from: Bloomberg; Business Monitor International; Capital IQ; Economist Intelligence Unit; and Other publicly available information sources. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-39 38

93 II: Valuation Methodology Enterprise or Equity Value Income Approach - DCF Method Depending on the valuation approach selected and the treatment of a business existing debt position, the valuation range calculated will result in either an enterprise value or an equity value being estimated. An enterprise value reflects the value of the whole of the business (i.e. The total assets of the business including fixed assets, working capital and goodwill/intangibles) that accrues to the providers of both debt and equity. An enterprise value will be calculated if a multiple is applied to unleveraged earnings (i.e. Revenue, EBITDA, EBIT) or unleveraged free cash flows. An equity value reflects the value that accrues to the equity holders. To compare an enterprise value to an equity value, the level of net debt must be deducted from the enterprise value. An equity value will be calculated if a multiple is applied to leveraged earnings (i.e. Net Profit after Taxation) or free cash flow, post debt servicing. Under the DCF Method, forecast cash flows are discounted back to the Valuation Date, generating a net present value for the cash flow stream of the business. A terminal value at the end of the explicit forecast period is then estimated and that value is also discounted back to the Valuation Date to give an overall value for the business. In a DCF Method analysis, the forecast period should be of such a length to enable the business to achieve a stabilised level of earnings, or to be reflective of an entire operation cycle for more cyclical industries. Typically a forecast period of at least five years is required, although this can vary by industry and by sector within agiven industry. The rate at which the future cash flows are discounted ('the Discount Rate') should reflect not only the time value of money, but also the risk associated with the business future operations. This means that in order for a DCF to produce a sensible valuation figure, the importance of the quality of the underlying cash flow forecasts is fundamental. The Discount Rate most generally employed is the WACC, reflecting an optimal (as opposed to actual) financing structure, which is applied to unleveraged cash flows and results in an Enterprise Value for the business. Alternatively, for some sectors it is more appropriate to apply a CAPM equity approach instead. In calculating the terminal value, regard must be had to the business potential for further growth beyond the explicit forecast period. The 'constant growth model', which applies an expected constant level of growth to the cash flow forecast in the last year of the forecast period and assumes such growth is achieved in perpetuity, is a common method. These results would be cross-checked, however, for reasonability to implied exit multiples. 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 39 Document Classification: KPMG Confidential C-40

94 II: Valuation Methodology Market Approach Comparable Companies method / Comparable Transactions method An earnings based approach estimates a sustainable level of future earnings for a business ('maintainable earnings') and applies an appropriate multiple to those earnings, capitalising them into a value for the business. The earnings bases to which a multiple is commonly applied include Revenue, EBITDA, EBIT and PAT. In considering the maintainable earnings of the business being valued, factors to be taken into account include whether the historical performance of the business reflects the expected level of future operating performance, particularly in cases of development, or when significant changes occur in the operating environment, or the underlying business is cyclical. With regard to the multiples applied in an earnings based valuation, they are generally based on data from listed companies and recent transactions in a comparable sector, but with appropriate adjustment after consideration has been given to the specific characteristics of the business being valued. The multiples derived for comparable quoted companies are generally based on share prices reflective of the trades of small parcels of shares. As such, multiples are generally reflective of the prices at which portfolio interests change hands. That is there is no premium for control incorporated within such pricing. They may also be impacted by illiquidity in trading of the particular stock. Accordingly, when valuing a business en bloc (100 percent) we would also reference the multiples achieved in recent mergers and acquisitions, where a control premium and breadth of purchaser interest are reflected. An earnings approach is typically used to provide a market cross-check to the conclusions reached under a theoretical DCF Method or where the entity subject to valuation operates a mature business in a mature industry 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-41 40

95 III: Discount Rate Applied Weighted Average Cost of Capital Modified Capital Asset Pricing Model When applying the Income Approach, the expected cash flows are discounted to their present value equivalent using a rate of return that reflects the relative risk of the investment, as well as the time value of money. This is normally calculated based on the weighted required returns on debt and equity in proportion to their estimated percentages in the company s expected capital structure. The modified Capital Asset Pricing Model was utilised to determine the required return on equity. CAPM estimates the rate of return on common equity as the current risk free rate of return, plus a market risk premium expected over the risk free rate of return multiplied by the beta for the stock. Beta is a risk measure that reflects the sensitivity of a company s stock price to the movements of the stock market as a whole. The general formula for calculating WACC is given as: The CAPM rate of return on equity capital is calculated using the following formula: WACC = K d * (d%) + K e * (e%) Where: K e = R * R f + ß e + R c + Ke Where: K e = Rate of return on equity capital WACC = Weighted Average Cost of Capital K d = Cost of long term debt capital after tax R R f = Risk free rate of return d% = Debt capital as a percentage of the sum of the debt and equity capital ß = Beta or systematic risk of the equity K e = Required rate of return on cost of common equity capital Equity risk premium R = Country specific risk premium c e% = Equity capital as a percentage of the total debt and equity = Company specific premium R e = 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. 41 Document Classification: KPMG Confidential C-42

96 IV: Comparable Companies Comparable Companies - Market Approach Name Country Business Description Market Capitalisation (1) AUM (2)(3) EV/EBITDA (4) EV as a % of LTM (in S$ million) (%) (x) ARA Asset Management Limited Singapore ARA Asset Management Limited is a real estate investment manager. The firm manages real estate investment trusts and private real estate and equity funds. 1, % 13.0x Cohen & Steers Inc. United States Cohen & Steers Inc., together with its subsidiaries, operates as an investment manager in the United States, Japan, and internationally. The company manages portfolios focused on real estate, infrastructure, commodities, real assets, preferred securities and other income solutions. 2, % 13.2x Range 3.0% - 4.4% 13.0x x Source: Capital IQ, Corporate Filings Notes: 1. Market capitalisation as at the Latest Practicable Date 2. Enterprise Value were based on (i) market capitalisation as at the Latest Practicable Date and (ii) net debt and minority interests as at the latest available financial statements 3. AUM were based on the respective companies' latest available financial statements 4. Based on EBITDA over the last twelve months as of the latest available financial statements 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-43 42

97 V: Comparable Transactions Comparable Transactions - Market Approach Announcement Date Target Entity Acquiring Entity Transaction EV as % of Value AUM (1)(2) (in million) (%) Jul-13 Oriental Management Services Limited Nan Fung International Holdings Ltd EUR % Jul-13 Kiwi Income Properties Limited Kiwi Property Group Limited NZD % Oct-13 ARA Asset Management Limited The Straits Trading Company Limited SGD % Nov-13 GDI Property Group's funds business GDI Property Group AUD % Feb-14 Commonwealth Managed Investments Limited CFS Retail Property Trust Group AUD % Nov-14 Arena Investment Management Limited Arena REIT AUD % Source: Capital IQ, Mergermarket, Corporate Filings Notes: 1st Quartile 2.7% Median 3.4% 3rd Quartile 3.6% 1. Enterprise Value of the target companies were based on consideration paid, save for ARA Asset Management Limited whose financial statements were publicly available 2. AUM of the target companies were based on the companies' circulars and prospectuses 10 June 2016 KPMG Corporate Finance Pte. Ltd. (Registration No: D), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Document Classification: KPMG Confidential C-44 43

98 kpmg.com/socialmedia kpmg.com/app 10 June 2016 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Singapore. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. C-45