contents Cover pictures from top: Singapore Land Tower, Marina Square Shopping Mall, The Trizon

Transcription

1 Annual report 2008

2 contents 01 Group Financial Highlights 02 Chairman s Statement 04 Board of Directors 08 Corporate Governance Report 18 Corporate Data 20 Management Review 28 Human Resource 30 Property Activities Summary 32 Financial Report 82 Five Year Summary 84 Statistics of Shareholdings 87 Notice of Annual General Meeting Proxy Form Cover pictures from top: Singapore Land Tower, Marina Square Shopping Mall, The Trizon

3 group financial highlights Year ended 31 December 2008 ($ million) Revenue Attributable profit/(loss) ,357 (117) Total assets 3,093 3,259 3,748 5,968 5,735 Shareholders equity 2,244 2,528 3,092 4,093 3,896 Note: The 2008 attributable loss of $117 million (2007: profit of $1,357 million) comprises of net profit from operations of $158 million (2007: $137 million) and net fair value loss of investment properties of $276 million (2007: $1,220 million fair value gain). Revenue ($ million) Attributable profit/(loss) ($ million) 355 1, (117) Total assets ($ million) Shareholders equity ($ million) 5,968 5,735 4,093 3,896 3,093 3,259 3,748 2,244 2,528 3, Singapore Land Limited annual report

4 chairman s statement Wee Cho Yaw Chairman 2008 OVERVIEW 2008 was a tumultuous year. Despite a promising start, the year closed with a whimper as the effects of the meltdown in financial markets worldwide took its toll on many global economies including that of Singapore. Singapore s GDP eased to 1.1% in Performance Review and Dividend With the rise in rental rates during the first half of 2008, gross rental income from the Group s investment properties in 2008 increased by $44.4 million (24%) to $231.8 million. A full year consolidation of the revenue of The Pan Pacific Singapore Hotel (a wholly-owned subsidiary since April 2007) and the improved room rates contributed to a $39.5 million increase to $117.4 million from the hotel. In total, the Group s gross revenue increased by $84.3 million (31%) to $355.3 million. The resultant increase in net profit from operations by $21.0 million (15%) to $158.5 million was also boosted by associated companies progressive recognition of profits from sales of One Amber and The Sixth Avenue Residences residential development projects. In the wake of the weak office market in the second half of 2008, capital values of the Group s investment properties as at year-end declined by 7%, according to our professional valuers. Net of deferred income tax, a fair value loss of $275.9 million (compared to a fair value gain of $1,219.8 million in 2007) was charged to the income statement. The overall net loss for the year was $117.4 million (2007: net profit of $1,357.3 million). The Board recommends a first and final tax exempt (one-tier) dividend of 20.0 cents (2007: 20.0 cents) amounting to $82.5 million (2007: $82.5 million) for the financial year ended 31 December Singapore Office, Retail and Hotels The Group maintained an average occupancy of 95% for its office developments. With 700,000 square feet of office leases expiring during the year, the Group secured higher rentals thereby improving office rental income by 35% to $155.5 million compared to the preceding year. Average occupancy of the Group s suburban properties; Abacus Plaza, Tampines Plaza and West Mall, a popular retail landmark in the western heartland, was close to 100%. Novena Square, in which the Group has a 20% interest, strengthened its retail mall position as Singapore s leading sports and lifestyle-themed retail destination. The successful re-branding of Novena Square saw retail occupancy at close to 100% whilst office occupancies for Towers A and B were 97% and 100% respectively as at end of Asset enhancement programmes and efforts to enhance the shopping experience for patrons were the key focus for the successfully remodelled Marina Square. Apart from adding new international brands to the retail mix, glass shoplets were created along the expansive corridors to provide a unique retail experience. The shopping mall is almost fully leased. The three Marina Square hotels turned in their best performance in 2008, notwithstanding the fall in tourist arrivals to Singapore and the contraction in the leisure and business travel sectors toward the later part of the year. Singapore Residential Project The Group is currently engaged in the development of The Trizon, formerly known as Himiko Court, which it acquired in Located in the Holland Road area, the 195,000 square feet land area of freehold development comprises 247 apartment units with full condominium facilities. Overseas Investments In China, the Group maintained a 19.95% interest in Beijing Landmark Towers, a mixed development of hotel, apartments and offices in the business district of Beijing, which generated a pre-tax profit of Rmb102.7 million ($21.0 million) in Dividend of Rmb12.6 million ($2.4 million) was received from this investment. 02 Singapore Land Limited annual report 2008

5 In Chengdu, we are developing a 81,438 square feet land area of residential project with full condominium facilities close to the shopping belt in Dacisi Road. The project is currently under construction. Possible Offer for Singapore Land Limited The UIC Group owns approximately 72.4% of the total issued shares in Singapore Land Limited (SingLand). On 14 January 2009, UOL Equity Investments Pte Ltd, a wholly-owned subsidiary of UOL Group Limited (UOL), announced the acquisition of 15,862,000 ordinary shares in the capital of the UIC Group (Offer), raising its overall stake to 30.2%. In accordance with the Singapore Code on Takeovers and Mergers (Code) and the Singapore Securities and Futures Act, UOL has subsequently made a mandatory conditional cash offer to purchase all the remaining shares of the UIC Group at $1.20 per share. In the event that the mandatory conditional cash offer to purchase all the remaining shares of the UIC Group becomes unconditional as to acceptances or pursuant to the Offer or otherwise, UOL shall pursuant to the Code make a mandatory unconditional cash offer for all the issued shares in SingLand (SingLand Offer) at the offer price of $3.57 per share. The Board s directors who are independent of the Offer have since appointed ING Bank N.V. as the UIC Group s independent financial adviser for recommendation to the shareholders in relation to the Offer. Further details on the outcome of the Offer will be made by 3 March If and when the Singland Offer is made, details of the SingLand Offer will be announced by 22 April 2009.* Outlook for 2009 With the global financial crisis likely to last for some time, the office and retail rental markets as well as the residential property market will likely remain weak. The prospect of the tourism industry is challenging in view of the poor business sentiment and the global economic downturn. Nevertheless, the Group will leverage our market competencies and competitive position, and continue to take a prudent approach in our business scope and operational efficiency. We will continue to focus on maintaining and building strong relationships with tenants. Acknowledgements I wish to express my gratitude to our shareholders, tenants and business associates for their ongoing support. Much credit must also go to Board members for their guidance and counsel to ensure the Group stays the course. Last but not least, I thank the management and staff of the Group for their dedication and vigilance which are essential to seeing us through the challenging times ahead. Wee Cho Yaw Chairman Singapore 12 February 2009 * The offer by UOL for UIC lapsed on the closing date, 3 March 2009, because UOL and its concert parties had not fulfilled the condition of obtaining more than 50% of the voting rights attributable to the total issued shares of UIC. Accordingly, UOL did not make the SingLand Offer. Singapore Land Limited annual report

6 board of directors Wee Cho Yaw (Chairman) Dr Wee Cho Yaw was appointed a Director and Deputy Chairman of Singapore Land Limited (the SingLand ) in He became the Chairman of SingLand with effect from 16 January He is also the Chairman of the United Overseas Bank Group comprising United Overseas Bank Limited, Far Eastern Bank Ltd and their subsidiaries. He has more than 40 years of experience in the banking industry. He is also the Chairman of UOL Group Limited, Haw Par Corporation Limited, Hotel Plaza Limited, United Industrial Corporation Limited and Marina Centre Holdings Private Limited. He was the former Chairman of Overseas Union Enterprise Ltd. Dr Wee received Chinese high school education. He is the President of the Singapore Federation of Chinese Clan Associations and the Honorary President of the Singapore Chinese Chamber of Commerce and Industry. He was appointed Pro-Chancellor of Nanyang Technological University in 2004 and was conferred Honorary Doctor of Letters by the National University of Singapore in John Gokongwei, Jr. (Deputy Chairman) Dr John Gokongwei, Jr. was appointed a Director and Deputy Chairman of SingLand in As of January 2002, he is the Chairman Emeritus of JG Summit Holdings, Inc., a company incorporated in the Philippines and listed on the Philippines Stock Exchange Inc., since its formation in He is also a Director and Deputy Chairman of United Industrial Corporation Limited, Director of Marina Centre Holdings Private Limited, Universal Robina Corporation, Robinsons Land Corporation, Digital Telecommunications Phils., Inc., Oriental Petroleum and Minerals Corporation and Anscor Phils.. Dr Gokongwei received a Master in Business Administration from the De la Salle University in the Philippines, and attended the Advanced Management Program at Harvard University, Boston, Massachusetts, USA. James L. Go Mr James L. Go was appointed a Director of SingLand in He is the Chairman and Chief Executive Officer of the JG Summit Holdings Group of Companies in the Philippines. He also sits on the boards of directors of Universal Robina Corporation, Robinsons Land Corporation, Digital Telecommunications (Philippines), Inc., United Industrial Corporation Limited, Marina Centre Holdings Private Limited and Hotel Marina City Private Limited. Mr Go graduated with a Bachelor of Science and Master of Science, Chemical Engineering from Massachusetts Institute of Technology, USA. Lim Hock San (President and CEO) Mr Lim Hock San, the President and Chief Executive Officer, was appointed a Director of SingLand in Mr Lim is also the President and Chief Executive Officer of United Industrial Corporation Limited and a Director of Keppel Corporation Limited and the Chairman of the National Council On Problem Gambling. Mr Lim graduated with a Bachelor of Accountancy from the University of Singapore. He obtained a Master of Science in Management from the Massachusetts Institute of Technology, and attended the Advanced Management Program at Harvard Business School. He is a Fellow of the Chartered Institute of Management Accountants (UK) and a Fellow and past President of the Institute of Certified Public Accountants of Singapore. Wee Cho Yaw Chairman John Gokongwei, Jr. Deputy Chairman James L. Go Lim Hock San President and CEO 04 Singapore Land Limited annual report 2008

7 Gwee Lian Kheng Mr Gwee Lian Kheng was appointed a Director of SingLand in He is the Group Chief Executive of UOL and its listed subsidiary Hotel Plaza Limited. Mr Gwee has been with the UOL Group for 35 years. He also sits on the board of United Industrial Corporation Limited. Mr Gwee graduated with a Bachelor of Accountancy (Honours) from the National University of Singapore. He is a Fellow Member of the Chartered Institute of Management Accountants, Chartered Association of Certified Accountants, as well as a Member of the Institute of Certified Public Accountants of Singapore. Tan Boon Teik Mr Tan Boon Teik was appointed a Director of SingLand in Mr Tan is a Director of United Industrial Corporation Limited. He is on the Panel of International Commercial Arbitrators of CIETAC in Beijing, Shanghai and Shenzhen. He was the Attorney General of Singapore from 1969 to 1992, and was also the Chairman of Singapore Petroleum Co. Ltd. He is currently a Member of the panel of the Singapore International Arbitration Centre. Mr Tan is a Fellow of the Singapore Academy of Law and a Fellow of the Singapore Institute of Directors. He graduated with a LLM (London) and is a Barrister-at-Law (Middle Temple). Hwang Soo Jin Mr Hwang Soo Jin was appointed a Director of SingLand in January 2003 and is currently the Chairman of the Nominating Committee. He is a Chartered Insurer qualified in the United Kingdom, and has more than 40 years business experience. Mr Hwang is currently the Chairman Emeritus of Singapore Reinsurance Corporation Ltd and also sits on the boards of directors of United Overseas Insurance Ltd, Haw Par Corporation Ltd and United Industrial Corporation Limited, among others. He is a former director of Lee Kim Tah Holdings Limited and former Chairman of Singapore Reinsurance Corporation Ltd. Mr Hwang is an Associate of the Chartered Insurance Institute, United Kingdom. Alvin Yeo Khirn Hai Mr Alvin Yeo Khirn Hai was appointed a Director of SingLand in 2002 and is currently the Chairman of the Remuneration Committee. He is an Advocate and Solicitor and the Senior Partner of WongPartnership LLP. Mr Yeo was appointed a Senior Counsel of the Supreme Court of Singapore in January He serves on the Appeals Advisory Panel of the Monetary Authority of Singapore, the Singapore International Arbitration Centre s main panel of Arbitrators and is a Fellow of the Singapore Institute of Arbitrators. He was formerly a Member of the Citizenship Committee of Inquiry and a Director of the Civil Service College. He is also a Director of United Industrial Corporation Limited and Tuas Power Ltd. Mr Yeo is a Member of Parliament. Mr Yeo graduated with a Bachelor of Laws (Honours) from King s College, University of London, and is a Barrister-at-Law (Gray s Inn). Gwee Lian Kheng Tan Boon Teik Hwang Soo Jin Alvin Yeo Khirn Hai Singapore Land Limited annual report

8 board of directors roberto r. romulo Mr Roberto R. Romulo was appointed a Director of SingLand in January He is the Chairman of Philam Insurance, Inc. (AIG Subsidiary), PETNET, Inc. and Medilink Network Inc. and Romulo Asia Pacific Advisory. He is a board member of A. Soriano Corporation, Aboitiz Equity Ventures, Equicom Savings Bank, Philippine Long Distance Telephone Co, MIH Ltd. (South Africa) and United Industrial Corporation Limited. He is a Member of the Board of Counselors of McLarty Associates (formerly Kissinger McLarty Associates). Mr Romulo graduated with a Bachelor of Arts in Political Science from Georgetown University, Washington, D.C. and a Bachelor of Laws from Ateneo de Manila University. Antonio l. go Mr Antonio L. Go was appointed a Director of SingLand in He is currently a Director and President of Equitable Computer Services, Inc. and Chairman of Equicom, Inc.. He is also the President of Equitable Development Corporation, K & L Holdings Corporation and Equity Development Corporation. He is a Trustee of Algo Foundation. He sits on the boards of United Industrial Corporation Limited, Equitable Systems Management, Medilink Network, Inc., Equicom Manila Holdings, Klara Holdings, Inc., Motan Corp., Equitable Foundation Inc., Go Kim Pah Foundation, Digital Telecommunications Philippines, Oriental Petroleum and Minerals Corporation, Cebu Air, Inc., Equicom Information Technology, Pin-An Holdings, Maxicare Healthcare Corporation, Equicom Savings Bank and Algo Leasing & Finance. Mr Go graduated with a Bachelor of Business Administration from Youngstown University, USA. He also attended the International Advanced Management programme at the International Management Institute, Geneva, Switzerland, and the ABA National School of Bankcard Management, Northwestern University, USA. lance Y. gokongwei Mr Lance Y. Gokongwei was appointed a Director of SingLand in He is the President and Chief Operating Officer and a Director of JG Summit Holdings, Inc., Universal Robina Corporation and JG Summit Petrochemical Corporation. He is also the Vice Chairman and Deputy Chief Executive Officer of Robinsons Land Corporation. He is the President and Chief Executive Officer of Cebu Air, Inc.. He is also the Chairman of Robinsons Savings Bank, Vice Chairman of JG Summit Capital Markets Corporation and a Director of Digital Telecommunications Phils., Inc., Oriental Petroleum and Minerals Corporation and United Industrial Corporation Limited. He is also a trustee, secretary and treasurer of the Gokongwei Brothers Foundation, Inc.. Mr Gokongwei graduated with a Bachelor of Science (Applied Science) from Pennsylvania Engineering School and a Bachelor of Science (Finance) from Wharton School, USA. He also attended the management and technology program at the University of Pennsylvania. Roberto R. Romulo Antonio L. Go Lance Y. Gokongwei 06 singapore land limited annual report 2008

9 Wee Ee Lim Mr Wee Ee Lim was appointed a Director of SingLand in He is presently the President and Chief Executive Officer of Haw Par Corporation Limited. In addition, he sits on the board of directors of United Industrial Corporation Limited as well as some other companies in Singapore and Hong Kong. He also serves as a board member of Sentosa Development Corporation. Mr Wee graduated with a Bachelor of Arts (Economics) from Clark University, USA. Pang Cheng Lian Miss Pang Cheng Lian was appointed a Director of SingLand in She is also the First Vice President/Special Assistant to Dr Wee Cho Yaw, Chairman of the United Overseas Bank. In addition, she is a Director of United Industrial Corporation Limited. Miss Pang graduated with a Master of Arts (Political Science) from the University of Singapore. Gn Hiang Meng Mr Gn Hiang Meng was appointed a Director of SingLand in He had been a senior banker with the United Overseas Bank Group for 28 years and was Senior Executive Vice President in charge of the Investment Banking and Stockbroking businesses. He was previously a director of UOB Kay Hian Holdings Ltd, United International Securities Ltd and Industrial Commercial Bank Ltd. He retired as Deputy President (Hotel and Finance) of the UOL Group and is currently a Director of United Industrial Corporation Limited, SM Summit Holdings Ltd, Koh Brothers Group Ltd and Marina Centre Holdings Private Limited. Mr Gn graduated with a Bachelor of Business Administration (Honours) from the University of Singapore. Perry L. Pe Mr Perry L. Pe was appointed a Director of SingLand in He is a lawyer and Partner in Messrs Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles Law Firm. He is also the Chairman of Steniel Manufacturing Corporation, a publicly-listed company in the Philippines. Mr Pe graduated with a Bachelor of Laws degree from Ateneo de Manila University Law School in the Philippines and obtained a Master of Laws degree from Columbia Law School, New York, USA. Wee Ee Lim Pang Cheng Lian Gn Hiang Meng Perry L. Pe Singapore Land Limited annual report

10 corporate governance report The Company is committed to maintaining high standards of corporate governance. This report outlines the Company s corporate governance practices with reference to the revised Code of Corporate Governance 2005 ( Revised Code ). BOARD MATTERS Board s Conduct of its Affairs The principal functions of the Board are to: (a) provide entrepreneurial leadership, set strategic aims and commitments, review recommendations of the Nominating Committee ( NC ), Remuneration Committee ( RC ), Audit Committee ( AC ) and Executive Committee ( EXCO ) and ensure that the necessary financial and human resources are in place for the Company to meet its objectives; (b) establish a framework of prudent and effective controls which enables risk to be assessed and managed; (c) review the business results of the Company and monitor the performance of Management; (d) set the Company s values and standards, and ensure that obligations to shareholders and others are understood and met; and, (e) assume responsibility for corporate governance, and monitor Board composition, performance and processes. The Board delegates certain functions to the various Board Committees, namely, the NC, RC, AC and EXCO. Each committee has its own written terms of reference and whose actions are reported to and monitored by the Board. All the committees are actively engaged and play an important role in ensuring good corporate governance in the Company. The Board meets on a quarterly basis and as and when warranted by circumstances. Telephonic conferences at Board meetings are permitted by the Company s Articles of Association ( Articles ). The number of Board and Board Committee meetings held in 2008, as well as the attendance of each Board member at these meetings, are disclosed below: Name Attendance at 4 Board Meetings Attendance at 4 Audit Committee Meetings Attendance at 1 Nominating Committee Meeting Attendance at 1 Remuneration Committee Meeting Attendance at 4 Executive Committee Meetings Wee Cho Yaw 4 n/a John Gokongwei, Jr. 4 n/a n/a n/a 4 Lim Hock San 4 n/a n/a n/a 4 Antonio L. Go 4 n/a 1 n/a n/a Gn Hiang Meng 4 n/a n/a n/a n/a James L. Go Lance Y. Gokongwei 4 n/a n/a n/a n/a Gwee Lian Kheng 4 n/a n/a n/a 4 Hwang Soo Jin 4 n/a 1 1 n/a Pang Cheng Lian 4 n/a n/a n/a n/a Perry L. Pe 4 n/a n/a n/a n/a Roberto R. Romulo 4 n/a 1 1 n/a Tan Boon Teik 4 4 n/a n/a n/a Wee Ee Lim 3 n/a n/a n/a n/a Alvin Yeo Khirn Hai 4 4 n/a 1 n/a 08 Singapore Land Limited annual report 2008

11 The Company has adopted internal guidelines and financial authority limits structure setting forth matters that require Board approval. Under the guidelines, Board approval is required for material transactions such as commitments and payments of operating and capital expenditure (including property development projects) exceeding $5 million by any Group company, and disposal of assets exceeding $5 million. A formal letter setting out the Director s duties and obligations is provided to each Director upon his appointment. Apart from keeping the Board informed of all relevant new laws and regulations, the Company has an on-going training budget for existing Directors to attend any training programme in connection with their duties as Directors, and an orientation programme for incoming Directors to ensure that they are familiar with the Company s business and governance practices. Board s Composition and Guidance The Board comprises fifteen Directors, of whom five, namely, Antonio L. Go, Tan Boon Teik, Hwang Soo Jin, Roberto R. Romulo and Alvin Yeo Khirn Hai are considered independent directors. Mr Lim Hock San, the Chief Executive Officer ( CEO ), holds an executive position. The independence of each Director is reviewed annually by the NC. Following the review, the NC is of the view that the independent Directors make up at least one-third of the Board and that the current Board size is appropriate, taking into account the nature and scope of the Company s operations. No individual or small group of individuals dominates the Board s decision-making process. The Board consists of high calibre members with a wealth of knowledge, expertise and experience. As a group, the Directors contribute valuable direction and insight, drawing from their vast experience in matters relating to accounting, finance, legal, banking, business, management, property and general corporate matters. Brief description on the background of each Director is set out in the Board of Directors section of this Annual Report. The non-executive Directors effectively check on Management by constructively challenging and helping to develop proposals on strategy. They monitor and review the reporting and the performance of Management in meeting agreed goals and objectives. The non-executive Directors may meet regularly on their own as warranted without the presence of Management. CHAIRMAN AND CHIEF EXECUTIVE OFFICER To ensure an appropriate balance of power, increased accountability and a greater capacity of the Board for independent decision-making, the Company has a clear division of responsibilities at the top management level. Such division of responsibilities is established and agreed by the Board. The non-executive Chairman and the CEO have separate roles and they are not related to each other. The Chairman s responsibilities include: (a) leading the Board to ensure its effectiveness on all aspects of its role and setting its meeting agenda; (b) ensuring that the Directors receive accurate, timely and clear information; (c) ensuring effective communication with shareholders; (d) encouraging constructive relations between the Board and Management; (e) facilitating the effective contribution of non-executive Directors; (f) encouraging constructive relations between executive Directors and non-executive Directors; and, (g) promoting high standards of corporate governance. The CEO is the most senior executive in the Company and bears executive responsibility for the Company s business. Singapore Land Limited annual report

12 corporate governance report BOARD MEMBERSHIP Executive Committee ( EXCO ) The EXCO comprises five board members. They are Wee Cho Yaw (Chairman), John Gokongwei, Jr., James L. Go, Lim Hock San and Gwee Lian Kheng. The Board has conferred upon the EXCO approval limits and powers affecting the Group on (1) investments, acquisitions and divestment matters; and (2) formulation and review of strategic business directions and corporate policies. Nominating Committee There is a formal and transparent process for the appointment of new directors to the Board through the establishment of the NC. The NC comprises five Directors, namely, Hwang Soo Jin (Chairman), Wee Cho Yaw, James L. Go, Roberto R. Romulo and Antonio L. Go, of whom three, including the Chairman are independent. The NC reviews and recommends all new Board appointments and also the re-nomination and re-appointment of Directors to the Board. The main Terms of Reference of the NC are: (a) recommending the appointment/re-appointment of Directors; (b) reviewing skills required by the Board; (c) reviewing the size of the Board; (d) determining annually the independence of each Director, and ensuring that the Board comprises at least one-third independent Directors; (e) deciding whether a Director with multiple Board representations is able to and has been adequately carrying out his duties as Director; (f) deciding how Board s performance may be evaluated and proposing objective performance criteria to assess the effectiveness of the Board as a whole and the contribution of each Director; and (g) carrying out annual assessment of the effectiveness of the Board and individual Directors. In the nomination and selection process of a new Director, the NC identifies key attributes of an incoming Director based on the requirements of the Group and recommends to the Board the appointment of the new Director. New Directors are appointed by way of a Board Resolution. The NC conducts a yearly review of the appointment, retirement, re-nomination and re-election of Directors. The Directors submit themselves for re-election on regular intervals of at least once every three years in accordance with the Articles. In its deliberations on the re-nomination of existing Directors, the NC takes into consideration the Director s contribution and performance. The NC is also responsible for determining annually, the independence of Directors. Following its annual review for the year, the NC has reviewed and endorsed the independence status of each Director. The NC also considered, and is of the opinion, that multiple board representation of the Directors does not impede their performance in carrying out their duties to the Company. The NC requires a director who is unable to attend any meeting to give his/her views, if any, in writing to the Chairman of the Board and/or Board Committees. To address the competing time commitments of such Directors, the Board and Board Committee meeting dates are scheduled in advance prior to the start of every calendar year. The information on independent, executive and non-executive Directors, including the year of initial appointment, last re-election and membership on Board Committees is set out in the section of this Annual Report entitled Corporate Data. 10 Singapore Land Limited annual report 2008

13 BOARD PERFORMANCE With the Board s approval, the NC has adopted objective performance criteria for assessing the effectiveness of the Directors and the Board as a whole. In evaluating the Board s performance as a whole, the NC has adopted the quantitative indicators which include, return on equity, return on assets, economic value added, the Company s share price performance over a five year period vis-à-vis the Singapore Straits Times Index and a benchmark index of industry peers. In addition, the NC also takes into consideration the qualitative criteria of the effectiveness of the Board in monitoring Management s performance and the success of Management in achieving strategic and budgetary objectives set by the Board. As part of the yearly assessment of contribution of each Director to the effectiveness of the Board, the Chairmen of the NC and the Board would assess whether each Director has contributed effectively and discharged their duties responsibly. The Board would then be informed of the results of the performance evaluation. The individual Director s performance criteria is in relation to their industry knowledge and/or functional expertise, contribution and workload requirements, sense of independence and attendance at the Board and Board Committee meetings. A formal assessment of the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of the Board was duly carried out this year on the above basis. ACCESS TO INFORMATION To enable the Board to fulfil its responsibilities, Directors are provided with complete, adequate and timely information prior to Board and Board Committee meetings and on an on-going basis. Management provides Directors with the monthly management accounts and whenever necessary, copies of budgets and forecasts. Board papers are sent to Directors at least seven days before each Board and Board Committee meetings. Managers, who can provide additional insight into the matters to be discussed, are present at the relevant time during the Board and Board Committee meetings. The Board is responsible for the appointment and removal of the Company Secretary. The Company Secretary administers and attends all Board and Board Committee meetings. The Company Secretary ensures good information flow within the Board and its Committees and between senior Management and non-executive Directors. The Directors have separate and independent access to the Company Secretary and senior Management. The Board takes independent professional advice as and when necessary to enable it to discharge its responsibilities effectively. Subject to the approval of the Chairman, the Directors may seek and obtain separate and independent professional advice to assist them in their duties. PROCEDURES FOR DEVELOPING REMUNERATION POLICIES Remuneration Committee ( RC ) There is a formal and transparent procedure for developing policies on executive remuneration and for fixing the remuneration packages of individual Directors. The members of the RC are Alvin Yeo Khirn Hai (Chairman), Wee Cho Yaw, James L. Go, Hwang Soo Jin and Roberto R. Romulo. The RC is made up of nonexecutive Directors, majority of whom, including the Chairman are independent. The RC recommends to the Board an appropriate and competitive framework of remuneration for the Board members which covers all aspects of remuneration, including without limitation, directors fees, salaries, allowances, bonuses, options and benefits-in-kind. The RC also reviews the remuneration of senior Management of the Group. Singapore Land Limited annual report

14 corporate governance report The RC s main Terms of Reference are: (a) reviewing the existing benefit and remuneration systems, including the Performance or Variable Bonus Schemes and the Executive Share Option Scheme ( ESOS ) of its holding company, United Industrial Corporation Limited ( UIC ) and proposing any amendment/update, where appropriate, to the Board for approval; (b) approving the remuneration packages of CEO and senior Management of the Group; (c) administering the ESOS, including approving allocations of options to qualifying executives including executive Directors of the Company; and (d) formally assessing and reviewing the performance of Directors on an annual basis and recommending appropriate rewards and fees for Directors taking into account their services and contributions on the Board Committees. LEVEL AND MIX OF REMUNERATION In setting remuneration packages, the RC will take into account the Company s performance and the performance of individual Directors and senior Management. The Board, with the RC s input, periodically reviews the Company s remuneration policy to ensure that it is in line with market practices. For Directors fees, the RC is guided by the Singapore Institute of Directors recommendations. No member of the RC or any Director is involved in the deliberations in respect of any remuneration, compensation, options or any form of benefits to be granted to him or her. Certain key executives including the executive director of the company received share options granted under the UIC Share Option Scheme. Details of the UIC ESOS are set out in the Directors Report section of the UIC s Annual Report, which can be found on the website: The specific remuneration packages for each director has been endorsed by the RC and recommended to the Board for shareholders approval at the Annual General Meeting ( AGM ). There are no special service contracts offered by the Company. Remuneration of Directors For The Year Ended 31 December 2008 Remuneration Band & Name of Director Base/Fixed Salary Variable or Performance-Related Income/Bonuses Directors Fees Share Options Granted, Allowances and Other Benefits $1,000,000 $1,250,000 Lim Hock San # 53% 33% n/a 14% Below $250,000 Wee Cho Yaw n/a n/a 100% n/a John Gokongwei, Jr. n/a n/a 100% n/a Antonio L. Go n/a n/a 100% n/a Gn Hiang Meng n/a n/a 100% n/a James L. Go n/a n/a 100% n/a Lance Y. Gokongwei n/a n/a 100% n/a Gwee Lian Kheng n/a n/a 100% n/a Hwang Soo Jin n/a n/a 100% n/a Pang Cheng Lian n/a n/a 100% n/a Perry L. Pe n/a n/a 100% n/a Roberto R. Romulo n/a n/a 100% n/a Tan Boon Teik n/a n/a 100% n/a Wee Ee Lim n/a n/a 100% n/a Alvin Yeo Khirn Hai n/a n/a 100% n/a # Remuneration was paid by SingLand and its holding company, United Industrial Corporation Limited. 12 Singapore Land Limited annual report 2008

15 Remuneration of Key Executives (Who Are Not Also Directors) For The Year Ended 31 December 2008 Remuneration Band & Name of Key Executive Base/Fixed Salary Variable or Performance-Related Income/Bonuses Share Options Granted, Allowances and Other Benefits $500,000 $750,000 Vito Koh Leong Huat # 41% 37% 22% $250,000 $500,000 Loy Chee Chang # 46% 15% 39% Lim Yue Khim 61% 23% 16% Below $250,000 Susie Koh # 52% 16% 32% Goh Poh Leng # 53% 19% 28% # Remuneration was paid by SingLand and its holding company, United Industrial Corporation Limited. No employee of the Company and its subsidiaries was an immediate family member of a Director or the CEO and whose remuneration exceeded $150,000 during the financial year ended 31 December INFORMATION ON KEY EXECUTIVES Vito Koh Leong Huat (Group General Manager) Mr Vito Koh received his Estate Management degree from National University of Singapore in 1988 and is a Licenced Valuer. His past work experience includes Ministry of Defence as Staff Officer, as well as Director of Residential and Investment Sales in an international property consultancy firm. Prior to joining the Group in January 2005, he was General Manager, Business Development & Marketing at MCL Land Limited. Mr Koh is in charge of residential property development in Singapore for the Group. Loy Chee Chang (Senior Financial Controller) Mr Loy Chee Chang graduated from the National University of Singapore in 1982 with a Bachelor of Accountancy degree and worked in Pricewaterhouse, Singapore as an auditor from 1982 to He joined UIC in 1991 as its Financial Controller. He is the Senior Financial Controller of both UIC and SingLand. Susie Koh (Company Secretary/Legal Manager) Mrs Susie Koh obtained her L.L.B. (Honours), University of London in 1976 and Barrister-at-Law (Gray s Inn) in Mrs Koh was in private legal practice in Singapore as an Advocate & Solicitor from She became an in-house corporate lawyer and held the position of Company Secretary/General Manager (Legal) in Scotts Holding Ltd in 1991 until 1995 when she joined Sembawang Corporation Ltd as Senior Vice President, Group Legal/Group Company Secretary. She was appointed Company Secretary and Legal Manager for both UIC and SingLand in She is a member of the Singapore Academy of Law. Singapore Land Limited annual report

16 corporate governance report Goh Poh Leng (General Manager, Marketing) Ms Goh Poh Leng graduated with a Bachelor of Science (Estate Management)(Honours) from the National University of Singapore in 1990 and subsequently obtained her Certified Diploma in Accounting and Finance conducted by The Association of Chartered Certified Accountants, UK. Prior to joining SingLand, Ms Goh worked in an international property consultancy firm for two years. She joined in 1992 and held various positions until her appointment as General Manager, Marketing in July Lim Yue Khim (Group General Manager, Marina Centre Holdings Pte Ltd) Mr Lim Yue Khim graduated with a Bachelor of Science degree from the University of Singapore. He is a Fellow of the Royal Institution of Chartered Surveyors, United Kingdom, and a Member of the Singapore Institute of Surveyors and Valuers. Mr Lim started his career with a statutory board and worked with major housing developers, both locally and overseas. Mr Lim joined Marina Centre Holdings Pte Ltd, a subsidiary of SingLand, on 15 May ACCOUNTABILITY AND AUDIT The Board provides shareholders with a balanced and understandable assessment of the Company s performance, position and prospects on a quarterly basis via quarterly announcements of results and other ad hoc announcements as required by SGX-ST; and Management provides Directors with the management accounts on a monthly basis. AUDIT COMMITTEE ( AC ) The AC comprises three non-executive Directors, namely, Tan Boon Teik (Chairman), James L. Go and Alvin Yeo Khirn Hai, the majority of whom, including the Chairman, are independent. The members have many years of financial management experience in the finance and legal industry. The main functions and Terms of Reference of the AC are to: (a) review with the external auditor the scope and results of the audit report and its cost effectiveness; (b) review the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Company and any formal announcements relating to the Company s financial performance; (c) review the effectiveness of the Company s material internal controls and risk management and the adequacy of the internal audit function annually; (d) review the assistance given by the Company s officers to the external and internal auditors and determining that no Management restriction has been placed on the scope of the examination of the auditors; (e) commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule and regulation, which has or is likely to have a material impact on the Group s operating results or financial position; (f) review Interested Person Transactions ( IPT ); (g) meet with the external and internal auditors annually without the presence of Management; and (h) review the independence of external auditors annually. The AC has explicit authority to investigate any matter within its Terms of Reference, full access to and co-operation by Management and full discretion to invite any Director or executive Director to attend its meetings, and has reasonable resources to enable it to discharge its functions properly. Management has put in place, with the AC s endorsement, arrangements by which staff of the Group may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The objective for such arrangement is to ensure independent investigation of such matter and for appropriate follow-up action. 14 Singapore Land Limited annual report 2008

17 During the year, the AC held four meetings. The announcements of the quarterly and full year results and the financial statements of the Group and the Auditors Report thereon for the full year were reviewed by the AC prior to consideration and approval of the Board. The AC has met with the external and internal auditors, without the presence of Management, at least once during the year. For the financial year 2008, the AC undertook a review of the fees and expenses of the audit and non-audit services provided by the external auditor, PricewaterhouseCoopers LLP. It assessed whether the nature and extent of the non-audit services might prejudice the independence and objectivity of the auditor before confirming its re-nomination. It was satisfied that such services did not affect the independence of external auditor. The AC also reviewed the Company s IPT and the cost-effectiveness of the audit conducted by the external auditor. Minutes of the AC meetings are submitted to the Board for information and review. INTERNAL CONTROLS The Group has in place a sound system of internal controls and risk management for ensuring proper accounting records and reliable financial information as well as management of business risks with a view to safeguarding shareholders investments and the Company s assets. The risk management framework implemented provides for systematic and structured review and reporting of the assessment of the degree of risk, evaluation of effectiveness of controls in place and the requirements for further controls. The Company has implemented a whistle-blowing policy, approved by the AC, in February INTERNAL AUDIT The Group maintains accountability through an internal audit function that is independent of the activities it audits. The internal audit team is guided by the Standards of Professional Practice of internal auditing set by the Institute of Internal Auditors, and it reports directly to the Chairman of the AC and, administratively, to the CEO. The Company s internal and external auditors review the effectiveness of the Company s material internal controls, including financial, operational and compliance controls, and risk management. Any material noncompliance or failures in internal controls and recommendations for improvements are reported to the AC. The internal audit team has unrestricted access to all records, properties, functions and co-operation from Management and staff necessary to effectively discharge its responsibilities. The AC has reviewed the Company s internal audit function and risk assessment based on reports from the external and internal audit teams and is satisfied that there are adequate internal controls in the Company. COMMUNICATION WITH SHAREHOLDERS The Company engages in regular, effective and fair communication with its shareholders. The Board provides shareholders with a balanced and understandable assessment of the Company s performance, position and prospects on a quarterly basis via quarterly announcement of results and other ad hoc announcements as required by SGX-ST. Timely as well as detailed disclosure is made in compliance with the SGX-ST guidelines. When material information is disseminated to the SGX-ST, such information is posted as soon as practicable on the Company s website at Shareholders participation at AGMs are highly encouraged. Each item of special business included in the Notice of the meeting is accompanied by an explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at the meeting. The Chairman of each Board Committee as well as external auditors are normally present at general meetings to address shareholders queries, if any. Singapore Land Limited annual report

18 corporate governance report GREATER SHAREHOLDER PARTICIPATION The Articles allow a member of the Company to appoint one or two proxies to attend and vote on behalf of the member. For fairness to all shareholders, the Company has not amended its Articles to lift the limit on the number of proxies for nominee shareholders. However, upon written request, the Company may allow additional proxies for nominee shareholders to attend the shareholders meetings as an observer on a case by case basis. The Company has not amended its Articles to provide for absentia voting as the Board feels that it is difficult to ensure a foolproof system. CODE ON SHARE DEALINGS The Company has adopted Rule 1207(18) of the SGX-ST Listing Manual with respect to dealings in the Company s securities by its Directors and employees. Circulars are issued to all Directors and employees of the Company and its subsidiaries to remind them of, inter alia, laws of insider trading and the importance of not dealing in the shares of the Company and within the Group on short term consideration and during the prohibitive periods. INTERESTED PERSON TRANSACTIONS ( IPT ) POLICIES The Company has adopted an internal policy in respect of any transaction with interested persons and has set out the procedures for review and approval of the Company s IPT. The Company s disclosures according to Rule 907 of the SGX-ST Listing Manual in respect of IPT for the financial year ended 31 December 2008 are set out as follows: Name of Interested Person Aggregate value of all IPT during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders mandate pursuant to Rule 920 of the SGX-ST Listing Manual) Aggregate value of all IPT conducted under shareholders mandate pursuant to Rule 920 of the SGX-ST Listing Manual (excluding transactions less than $100,000) United Industrial Corporation Limited ( UIC ) Joint venture with UIC and UOL Group Limited in relation to the acquisition and development of One Amber UIC Development (Private) Limited/ UIC Investments (Properties) Pte Ltd Rental and service payment to UIC Development (Private) Limited/ UIC Investments (Properties) Pte Ltd S$ million S$ million 64.3 n/a 0.4 n/a The above IPT were conducted on normal commercial terms. The AC of the Company was also of the view that the risks and rewards of the aforementioned joint ventures were in proportion to the equity of each joint venture partner, and that the joint ventures were not prejudicial to the interests of the Company and its minority shareholders. 16 Singapore Land Limited annual report 2008

19 Material Contracts There were no material contracts made by the Company and its subsidiaries involving the interests of the CEO, each Director or Controlling Shareholder except for the following material contracts entered into with United Overseas Bank Limited ( UOB ), a Controlling Shareholder: 1. Pursuant to UOB s letter of offer dated 12 January 2000, Gateway Land Limited has been given a $185 million multi-currency revolving credit and overdraft facility. Each advance under the revolving credit facility may be up to six months tenure with interest rate based on the prevailing bank s costs of funds. The interest on the overdraft facility is based on the prevailing bank s prime rate. The facility is uncommitted and unsecured. 2. Pursuant to UOB s letter of offer dated 6 March 2007 and the Amendment and Restatement Agreement dated 20 November 2007 between UOB and Marina Centre Holdings Pte Ltd ( MCH ), MCH has been given a $250 million revolving credit, overdraft and performance guarantee facility. Each advance under the revolving credit facility may be up to twelve months tenure with interest rate at 0.72% above the prevailing bank s swap rate. The interest on the overdraft facility is based on the prevailing bank s prime rate. The facility is unsecured and will mature on 4 April Pursuant to the letter of offer dated 18 October 2005 and Facilities Agreement dated 30 August 2006 between UOB and Hotel Marina City Pte Ltd ( HMC ), HMC has been given a $111.1 million revolving credit, term loan, overdraft, performance guarantee, and foreign cheques payable facility. Each advance under the revolving credit facility may be up to twelve months tenure with interest rate at 0.72% above the prevailing bank s swap rate. The interest on the overdraft facility is based on the prevailing bank s prime rate. The facility is unsecured and will mature on 30 June Pursuant to UOB s letter of offer dated 10 October 2007, Ideal Homes Pte. Limited has been given a $370 million land loan, construction loan and performance guarantee facility. Each advance under the land loan facility may be up to six months tenure with interest rate at either swap cost plus 0.55% per annum or fixed interest rate plus 0.55% per annum. The facility is secured on the legal mortgage of the land and development at 2, 4, 6 and 8 Ridgewood Close, Singapore. The loans shall be fully repaid on 31 December 2011 or three months after the date of issuance of TOP for the development, whichever is earlier. Singapore Land Limited annual report

20 corporate DATA Date of date of initial last Board of Directors board Appointment Appointment Re-election Wee Cho Yaw Non-Executive Chairman John Gokongwei, Jr. Non-Executive Deputy Chairman Lim Hock San President & Chief Executive Officer n/a Antonio L. Go Non-Executive and Independent Director Gn Hiang Meng Non-Executive Director James L. Go Non-Executive Director Lance Y. Gokongwei Non-Executive Director Gwee Lian Kheng Non-Executive Director Hwang Soo Jin Non-Executive and Independent Director Pang Cheng Lian Non-Executive Director Perry L. Pe Non-Executive Director Roberto R. Romulo Non-Executive and Independent Director Tan Boon Teik Non-Executive and Independent Director Wee Ee Lim Non-Executive Director Alvin Yeo Khirn Hai Non-Executive and Independent Director Frederick D. Go Alternate to John Gokongwei, Jr n/a Patrick O. Ng Alternate to Lance Y. Gokongwei n/a Gabriel C. Singson Alternate to Perry L. Pe Singapore Land Limited annual report 2008

21 Audit Committee Tan Boon Teik James L. Go Alvin Yeo Khirn Hai Nominating Committee Hwang Soo Jin Wee Cho Yaw James L. Go Roberto R. Romulo Antonio L. Go Remuneration Committee Alvin Yeo Khirn Hai Wee Cho Yaw James L. Go Hwang Soo Jin Roberto R. Romulo Executive Committee Wee Cho Yaw John Gokongwei, Jr. James L. Go Lim Hock San Gwee Lian Kheng Wee Ee Lim Lance Y. Gokongwei Chairman Member Member Chairman Member Member Member Member Chairman Member Member Member Member Chairman Member Member Member Member (Alternate to Wee Cho Yaw and/or Gwee Lian Kheng) (Alternate to John Gokongwei, Jr. and/or James L. Go) Company Secretary Susie Koh Auditors PricewaterhouseCoopers LLP 8 Cross Street #17-00 PWC Building Singapore Audit Partner: Sim Hwee Cher (appointed wef financial year 2007) Share Registrars Tricor Barbinder Share Registration Services 8 Cross Street #11-00 PWC Building Singapore Telephone: Facsimile: Registered Office 5 Shenton Way #02-14 Podium Block UIC Building Singapore Telephone: Facsimile: Website: www. singland.com.sg Company Registration Number C Singapore Land Limited annual report

22 management review The interior of Singapore Land Tower 2008 overview the office market, after two years of extraordinary growth, peaked in third quarter of 2008 on the back of easing demand following the global financial crisis. notwithstanding the challenging business conditions, average occupancy for the group s office properties was maintained at 95%. With 700,000 square feet of leases expiring, the group was able to secure higher rental rates and rental income increased by 35% to $155.5 million compared to previous year. despite starting the year well, the residential market took a beating with slow sales and softening prices when the local economy falters towards the end of the year with 1.1% gdp growth. looking ahead, the private residential market looks set to slow down amid uncertainties as buyers will be cautious in buying properties as sentiment weakens.

23 SGX Centre 2 Marina Square Shopping Mall

24 PROPERTY PORTFOLIO Singapore Commercial Office Investments Singapore Land Tower The flagship building continued to perform well in the year under review. Notwithstanding strong competition from newer buildings in the vicinity, the building was able to improve its rental income by 28% although average occupancy slipped slightly to 92%. The modernisation of a total of 23 passenger lifts was successfully completed during the year, ensuring a smoother and faster ride for tenants at the building. Clifford Centre Despite being the oldest building in the Group, Clifford Centre managed to improve its occupancy as well as rental income. During the year, 29% of leases expired. Of these, 46,000 square feet were renewed at market rates. With the addition of around 10,000 square feet of new leases, total rental income increased by 25%. Average occupancy also improved by 3% to 96%. The retail premises, which formed 20% of the total lettable area, contributed about 30% of the total rental revenue. As part of the on-going programme to help retail tenants maintain healthy sales revenue, year-end marketing promotions were organised during the festive season. Some major projects undertaken were re-waterproofing of the podium roof and the replacement of the common corridor ceiling. SGX Centre 2 Despite the expiry of 60% of leases during the year, SGX Centre secured 54% of renewals and a further 4% of new leases at market rent. This led to an increase in rental income by 47%. Average occupancy was maintained at 98%. The Building Management Services Division continued to serve as the managing agent for SGX Centre. Cost savings were achieved for SGX Centre as a result of switching to a new electricity supplier offering lower rates. The Gateway Leases of about 300,000 square feet expired during the year. Of these, 57% were renewed. Together with the leasing of another 95,000 square feet at market rate, average occupancy improved from 93% to 94%. Rental income saw an increase of 38% compared to the preceding year. The office towers were given a refreshing look with improvement works such as the restoration of the external facade and the walls of the basement lift lobbies as well as the repainting of the car park. Energy efficient lightings were installed at the car park as part of the building s energy conservation effort. Another building enhancement work was the upgrading of the electrical High Voltage switchgears. Abacus Plaza and Tampines Plaza The twin office towers located in the Tampines Finance Park enjoy the benefits to various facilities such as the Tampines MRT station and several shopping malls. During the year, Abacus Plaza secured renewals and new leases of 31% of the total net lettable area at market rate. With the higher rates secured, rental income improved by 60% whilst average occupancy was maintained at 96%. For Tampines Plaza, the building achieved its average occupancy at 100% while rental income improved by 17%. 22 Singapore Land Limited annual report 2008

25 Singapore Land Tower Interior of SGX Centre 2 The Gateway Singapore Land Limited annual report

26 PROPERTY PORTFOLIO Singapore Commercial Retail Properties Marina Square Shopping Mall Fashionable and trendy, the Marina Square Shopping Mall, offers a wide range of fashion apparels, bags, shoes, accessories and a delectable selection of food and beverage choices, to its mainly middle-class affluent shoppers. Newly created shoplets at Marina Square Shopping Mall Marina Square Shopping Mall The presence of new entrants to the Mall including international brand name, Desigual, and renowned local designers, Nicholas Wong and Daniel Yam have further enhanced and boosted merchandise selection at the Mall. New food specialties include Dome Cafe and Inle Myanmar which serves Myanmese ethnic cuisine. Seven glass shoplets were created at the shopping aisle on Levels 2 and 3 as part of the Mall s asset enhancement programme as well as to widen the merchandise selection for shoppers. With its cosy ambience and water fountain, the atrium cafe at the intersection at Level 2 between Pan Pacific and Suntec Link-bridge, provides an iconic focal point and meeting area for shoppers. Mandarin Oriental The focus of the advertising and promotions strategy of the Mall continues to be its collaboration with tenants for thematic activities to encourage repeat visits and extended shopping hours. For instance, late-night shopping and weekday complimentary parking with minimum purchase were successfully implemented during the year. A tourist programme had also been introduced to tap the tourist sector and increase the Mall s visitors. This is in line with the government s effort to promote Marina Bay as an attraction and vibrant destination with round the clock activities for locals and tourists alike. 24 Singapore Land Limited annual report 2008

27 West Mall Chinese New Year Show at West Mall The shopping mall enjoys almost full occupancy at 99%, whilst Marina Bayfront offices are fully leased to the sole-tenant Merrill Lynch International Bank. Marina Square Hotels The three Marina Square Hotels, viz, Pan Pacific Singapore, Marina Mandarin and Mandarin Oriental have performed relatively well in line with market expectation and within the scope of market growth in the first quarter of the year. With the US sub-prime mortgage crisis and slowdown in the global economy, the hospitality sector saw a decline in visitor arrivals into Singapore. Factors such as high fuel surcharge and tax by airlines took its toll on travelling. As a result, the three Marina Square Hotels experienced a decline in occupancy and cancellation of events/meetings, especially from financial institutions and multi-national companies toward the later part of the year. Amidst these challenges, 2008 was still the best performing year for the three Marina Square Hotels since their openings. West Mall With its location next to the Bukit Batok MRT station, the Mall continued to be popular with the residents of Bukit Batok, Jurong East and Hillview. During the year, vibrant promotional events were organised at the atrium. The spectacular Chinese New Year show by The Blue Sky Dance Troupe from China and the popular item entitled Thousand Hand Goddess of Mercy attracted many shoppers and photographers to the Mall. Another major event was the Tenth Anniversary Celebration which generated much publicity and lasted from October to December Leases for 23% of the 183,000 square feet of the Mall s space expired in The leases for 20% were renewed at rates which were 23% higher than existing rents. For the leases that were not renewed, the shops were let out to popular retailers such as SWATCH, Triumph and Pet Lover s Centre and rates achieved were 45% higher. Overall, rental revenue increased by 11%. Novena Square The Group has a 20% interest in Novena Square, a commercial development located above the Novena MRT Station. As at the end of December 2008, occupancy for the retail space was close to full occupancy whilst office occupancies for Tower A and B were 97% and 100% respectively. The retail mall, Novena Square, consolidated its position as a sports mall with several high profile sporting events including boxing, iceskating, international free-style inline skating competition, ESPN Guinness 9-Ball Tour and the Lianhe Zaobao Cup National Students Table Tennis Challenge. The Mall also won the SRA (Singapore Retailers Association) Award for Best Retail Event of the Year 2008 for its Velocity Beach Festival held in June Singapore Land Limited annual report

28 PROPERTY PORTFOLIO One Amber The Sixth Avenue Residences Dacisi Project, Chengdu, China 26 Singapore Land Limited annual report 2008

29 Singapore Residential Properties One Amber Building on a 249,300 square feet of freehold site located in the Katong area, this residential development comprises 562 apartment units in four 23-storey blocks with full condominium facilities. It was marketed in April 2006, and was fully sold. The Group has a 35% stake in this project. As at 31 December 2008, the progress of work on site is about 46% completed. The Sixth Avenue Residences This is a 172,000 square feet freehold site. The development comprises seven blocks of five-storey residential buildings with 175 apartment units and has full condominium facilities. The project was marketed in December 2006 and was fully sold. The Group has a 48% interest in this project. As at 31 December 2008, the progress of work on site is about 52% completed. The Trizon (formerly known as Himiko Court) Located in the Holland Road area (off the junction of Holland Road/ Pandan Valley), this 195,000 square feet freehold site was acquired by the Group in December The proposed development comprises three 24-storey blocks with 247 apartment units and has full condominium facilities. Construction work began in June 2008 and as at 31 December 2008, the project is about 7% completed. Building Management The Building Management Services Division continues to maintain all the buildings and residential projects of the Group. In addition, the Division provides technical and contracting support for all building services to the Group s tenants. The Division is also the managing agent for the Management Corporation of SGX Centre. Major projects completed during the year included modernisation of passenger lifts at Singapore Land Tower, restoration of the façade at The Gateway as well as re-waterproofing of the podium roof and replacement of the common corridor ceiling system at Clifford Centre. OVERSEAS INVESTMENTS China Beijing Landmark Towers The Group has a 19.95% interest in Beijing Landmark Towers which is a mixed development comprising a hotel, an apartment block and two office towers. During the year of review, the development achieved a pre-tax profit of Rmb million (S$21.0 million). As 2008 was the Olympics year for China, the development set a new historic high for room rates in August However, for the months leading to the Olympics, business was slack as a large number of exhibitions and seminars were postponed or cancelled. During the year, a major tenant, Daimler Chrysler, moved out of Landmark Towers to their own premises. With the difficult global economic outlook, it is expected that the business environment for 2009 will be tough and competition will be fierce with many new hotels constructed for the Olympics and new office space coming on stream. Chengdu, Dacisi Road, The site has a land area of 7,566 square metre and is situated very close to the popular Chunxi shopping belt. With a gross floor area of approximately 77,000 square metre, the development comprises two 51-storey residential blocks with full condominium facilities. Construction work started in June The project is wholly-owned by the Group. OVERSEAS INVESTMENTS Hong Kong The Waterfront The Group holds a 7.5% stake in The Waterfront, a prime residential development located at the Kowloon Airport Express Station. The development has six blocks of 28-storey towers, consisting of 1,288 apartments and 1,332 car park lots. All the apartments were sold by 31 December As at 31 December 2008, 139 of the remaining 191 car park lots were sold. Singapore Land Limited annual report

30 Human Resource SGX Bull Run 2008 Visit to a herbal farm in Singapore 28 Singapore Land Limited annual report 2008

31 Continuous employee development and wellness programme remain the focus of the Group s human resource initiatives. To equip employees with the latest job-related updates to meet corporate objectives, employees were encouraged to upgrade themselves through seminars, workshops and talks. As part of the Group s workplace health programme, regular activities were conducted during lunch time and on Friday evenings. These programme included health screening and health talks on popular topics like nutrition, osteoporosis, cholesterol and weight management. In addition, the programme includes physical activities such as yoga, pilates and aerobics. Good entertainment at the Staff Dinner The Group received the Singapore Health Silver Award presented by the Health Promotion Board on 20 November 2008 providing national recognition to organisations with commendable Workplace Health Promotion programmes. Various recreational activities were organised during the year to promote recreation and team spirit such as the staff dinner, rides on the Singapore Flyer, blockbuster movie, durian/fruit party and Nature Walk. Eye screening test for staff To support community development efforts, the Group made contributions to several community and charitable organisations during the year. During the recent China Szechuan earthquake, the Group made donations to the Chinese Embassy and other organisations to assist the Szechuan earthquake victims. The Group continues to participate in the SGX Bull Run, a charitable fun run organised by the Stock Exchange of Singapore. Group picture taken during the Nature Walk at Telok Blangah Hill Singapore Land Limited annual report

32 property activities summary Subsidiary Companies Property Holdings Gross Approximate Car Percentage site Area Floor Area Net Floor Area Parking of (sq metres) (sq metres) (sq metres) Lots Shareholding Singapore Land Tower 5,064 74,215 57, A 47-storey complex of banks and offices and three basements of car parking space with frontages on Raffles Place/Battery Road SGX CENTRE 2 2,970 36,590 25, A 29-storey office building with two (inclusive of 3,336 sq m basements of car parking space in SGX CENTRE 1) located at 4 Shenton Way Clifford Centre 3,343 37,267 25, A 29-storey complex of shops and offices with frontages on both Raffles Place and Collyer Quay The Gateway 22,381 97,430 69, A pair of 37-storey towers with two basements of car parking space located at Beach Road ABACUS Plaza 2,614 10,970 8, and Tampines Plaza 2,613 10,965 8, A pair of 8-storey office buildings with with two basements of car parking space located at Tampines Central 1 in the Tampines Finance Park Marina Square 92, , ,780 1, Three hotels, mall shops, family entertainment centre, supermarket cinema, food court, entertainment complex, commercial building, car parking and ancillary space 30 Singapore Land Limited annual report 2008

33 Gross Approximate Car Percentage site Area Floor Area Net Floor Area Parking of (sq metres) (sq metres) (sq metres) Lots Shareholding Associated Companies Property Holdings West Mall 9,890 26,300 17, A 5-storey retail and entertainment complex with three basements of car parking space, located at Bukit Batok Town Centre Novena Square 16,674 70,009 53, A commercial complex comprising two office towers of 25 and 18 storeys and a three-storey retail block located at the junction of Thomson Road and Moulmein Road Residential Property Holdings Gross Expected Percentage site Area Floor Area Date of of tenure (sq metres) (sq metres) TOP Shareholding One Amber Freehold 23,161 64, A 562-unit condominium at Amber Gardens The Sixth Avenue Residences Freehold 16,055 22, A 175-unit condominium at Sixth Avenue The Trizon Freehold 18,153 38, A 247-unit condominium at Ridgewood Close Chengdu, Dacisi Road, China Leasehold 7,566 77, Two towers of 51 storeys each with 3 basement car parks at the junction of Dacisi Road and Tian Xian Qiao Road North. Singapore Land Limited annual report

34 Financial report Marina Mandarin The Gateway Pan Pacific Singapore 32 Singapore Land Limited annual report 2008