SINGAPORE LAND LIMITED

Transcription

1 SINGAPORE LAND LIMITED ANNUAL REPORT 2009 Annual Report 2009

2 contents 01 Group Financial Highlights 02 Chairman s Statement 05 Board of Directors 13 Corporate Governance Report 24 Corporate Data 26 Management Review 33 Human Resource 34 Property Activities Summary 36 Financial Report 96 Five Year Summary 98 Statistics of Shareholdings 100 Notice of Annual General Meeting 103 Proxy Form

3 Group Financial Highlights For the financial year ended 31 December 2009 ($ million) Revenue Net profit from operations Net fair value gain/(loss) on investment properties 1,220 (275) (469) Attributable profit/(loss) ,357 (117) (266) Total assets 3,259 3,748 5,968 5,735 5,132 Shareholders equity 2,528 3,092 4,093 3,896 3,548 Revenue ($ million) Attributable profit/(loss) ($ million) 2009 (266) 2008 (117) , Total assets ($ million) Shareholders equity ($ million) , , , , , , , , , ,528 Singapore Land Limited annual report

4 Chairman s Statement 2009 OVERVIEW Singapore saw a deep economic dip at the beginning of the year. However, a strong second half and the Government s $20.5 billion stimulus package helped Singapore pull through a difficult year with a GDP contraction of 2%. Performance Review and Dividend Despite declining office rental rates in 2009, the Group s gross rental income increased by $23.3 million (10%) to $255.0 million as we continued to benefit from leases signed earlier. Following the sales launch of the Group s whollyowned residential project, The Trizon, in the third quarter of 2009, property sales of $46.3 million was progressively recognised. Revenue of The Pan Pacific Singapore, however, declined by $26.9 million (23%) to $90.5 million as room rates weakened on the back of lower visitor arrivals. Overall, the Group s total gross revenue of $397.5 million represented a net increase of $42.2 million (12%). Notwithstanding lower profits in Marina Mandarin and Mandarin Oriental Hotels, progressive recognition of profits from sales of residential properties (One Amber and The Sixth Avenue Residences) contributed to a $3.0 million (6%) increase in share of associated companies operating results to $56.1 million. With lower operating and finance expenses, the Group registered a net operating profit of $203.3 million, an increase of $44.8 million (28%). Based on year end valuation by professional valuers, the value of the Group s investment commercial properties declined by 14%. The fair value loss of $469.2 million (2008: $275.9 million), net of deferred income tax adjustments, was charged to income statement, resulting in an overall net loss of $266.0 million (2008: $117.4 million). The Board recommends a first and final tax exempt (one-tier) dividend of 20.0 cents (2008: 20.0 cents) amounting to $82.5 million (2008: $82.5 million) for the financial year ended 31 December Singapore Land Limited annual report 2009

5 Singapore Office, Retail Properties and Hotels During the year under review, the Group maintained an average occupancy in excess of 90% for its office properties. Gross office rental income for the Group was $180.8 million compared to $155.5 million in the previous year. To keep up with the increasing competition posed by newer malls, Marina Square was continually refreshed throughout the year by new international lifestyle brands and large-scale shows like the National Day exhibition, which attracted about 150,000 shoppers a day. Occupancy of the 650,000 square feet of retail space and rental rates remained healthy. The Singapore hospitality industry was significantly weaker in 2009 due to the economic crisis and the outbreak of the H1N1 flu virus and the three Marina Square hotels turned in results that were in line with the industry. West Mall celebrated its 11 th anniversary with vibrant promotions throughout the year. New retailers were also brought into the Mall to strengthen the tenant mix. Notwithstanding its age, West Mall was able to achieve 100% occupancy. Novena Square, in which the Group has a 20% interest, successfully positioned itself as a one-stop sports mall by collaborating with leading sports organisations like the Singapore Sports Council and Mizuno. Average occupancy for the retail mall was maintained at 99%. Singapore Residential Projects The Group has completed about 16% of the residential project The Trizon, which is located in the prime Holland Road area, with TOP expected in The Trizon is the Group s wholly-owned project and the 289-unit condominium was 45% sold at the end of December Overseas Investments In Chengdu, China, the Group s wholly-owned condominium project named 朗御 Lang Yu ( The Excellency ) comprising 468 units, is currently under construction. The development which is located close to the shopping belt in Dacisi Road will be officially launched for sale in March The Beijing Landmark Towers is a prime district mixed development of hotel, apartments and offices, in which the Group holds 19.95% interest. Dividend of $2.6 million was received from this investment in Singapore Land Limited annual report

6 Chairman s Statement Offer for Singapore Land Limited On 14 January 2009, UOL Equity Investments Pte Ltd ( UEI ), a wholly-owned subsidiary of the UOL Group Limited, announced the acquisition of 15,862,000 ordinary shares in the capital of the Group s holding company, United Industrial Corporation Limited ( UIC ), raising the shareholding of UEI and relevant parties in UIC to 30.2%. Pursuant to The Singapore Code on Takeovers and Mergers (the Code ) and the Securities and Futures Act, UEI made a mandatory conditional cash offer for all the remaining shares of UIC at $1.20 per share ( the Offer ). The Offer was conditional upon UEI and parties acting in concert with it acquiring more than 50% of the voting rights attributable to the issued share capital of UIC. In the event that UEI succeeded in acquiring more than 50% of UIC, UEI was required under the Code to make a mandatory unconditional cash offer for all the issued shares in Singapore Land Limited. When the Offer closed on 3 March 2009, UEI and its concert parties did not manage to obtain more than 50% of the voting rights attributable to the total issued shares of UIC. The Offer did not become unconditional and lapsed. Outlook for 2010 With the improved business outlook and the completion of the two integrated resorts, the Singapore economy is forecast to grow between 4.5% and 6.5% in The office market, faced with an influx of new supply from the second quarter of 2010, will remain challenging for landlords of existing buildings in the year ahead. The Group will continue to leverage on our market competencies and focus on maintaining and building strong relationships with tenants. Acknowledgement As always, I would like to thank our shareholders, tenants, business associates and customers for their support over the years. I would also like to give credit to our management team and valued employees for their hard work and dedication during the past difficult year. Finally, I would like to thank the Board members for their invaluable contributions and guidance to the Management team during the past year. Ms Pang Cheng Lian, who has served as a Director for 11 years, has informed the Board that she does not wish to present herself for re-election at the Annual General Meeting ( AGM ). Mr Antonio L. Go who has served as an Independent Director since 2004 has indicated that he would be retiring at the coming AGM and will not be offering himself for re-appointment. Two other directors, Mr Perry L. Pe and Mr Gn Hiang Meng, who have been on the Board since 1999, have also indicated that they wish to step down as Directors at the close of the 2010 AGM. We will miss their invaluable inputs. On behalf of the Board, I wish to record our appreciation for their contributions and wish them well in their future endeavours. Wee Cho Yaw Chairman Singapore 12 February Singapore Land Limited annual report 2009

7 Board of Directors Wee Cho Yaw Chairman Dr Wee Cho Yaw was appointed a Director and Deputy Chairman of Singapore Land Limited ( 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 50 years of experience in the banking industry. He is also the Chairman of UOL Group Limited, Haw Par Corporation Limited, Pan Pacific Hotels Group Limited (formerly known as Hotel Plaza Limited), United Industrial Corporation Limited and Marina Centre Holdings Private Limited. He is also the Chairman of the Wee Foundation. 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 He was presented with the Lifetime Achievement Award by The Asian Banker in May 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. Singapore Land Limited annual report

8 Board of Directors 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, Oriental Petroleum and Minerals 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. 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. Lim Hock San President and CEO 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. 6 Singapore Land Limited annual report 2009

9 Mr Gwee Lian Kheng was appointed a Director of SingLand in He is the Group Chief Executive of UOL and its listed subsidiary Pan Pacific Hotels Group Limited (formerly known as 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. Gwee Lian Kheng Mr Gwee graduated with a Bachelor of Accountancy (Honours) from the University of Singapore. He is a Fellow Member of the Chartered Institute of Management Accountants, Association of Chartered Certified Accountants and 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). Singapore Land Limited annual report

10 Board of Directors 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. Hwang Soo Jin 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 a lawyer in private practice and the Senior Partner of WongPartnership LLP. Mr Yeo was appointed Senior Counsel of the Supreme Court of Singapore in January He is the Chairman of the Audit Committee of the Law Society of Singapore, and a member of the Appeals Advisory Panel of the Monetary Authority of Singapore, the Singapore International Arbitration Centre s Council of Advisors, and a Fellow of the Singapore Institute of Arbitrators. He is also a Director of United Industrial Corporation, Tuas Power and Keppel Corporation. Mr Yeo is a Member of Parliament and Chairman of the Government Parliamentary Committee for Home Affairs and Law. 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). 8 Singapore Land Limited annual report 2009

11 Roberto R. Romulo Mr Roberto R. Romulo was appointed a Director of SingLand in January He is the Chairman of Chartis Philippines Insurance Inc. (formerly AIU Insurance (Philippines) Company, Inc.), PETNET, Inc, Medilink Network Inc., Zuellig Family Foundation, Carlos P. Romulo Foundation 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. Singapore Land Limited annual report

12 Board of Directors 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. 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 UOL Group Limited, Pan Pacific Hotels Group Limited and Hua Han Bio-Pharmaceutical Holdings Limited (a company listed on the Hong Kong Stock Exchange). He was previously a board member of Sentosa Development Corporation. Mr Wee graduated with a Bachelor of Arts (Economics) from Clark University, USA. 10 Singapore Land Limited annual report 2009

13 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. In 2009 she was appointed Director of Temasek Cares CLG Limited. Pang Cheng Lian 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. Singapore Land Limited annual report

14 Board of Directors 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 the Chairman of Steniel Manufacturing Corporation, a publicly-listed company in the Philippines. He is also an independent director of Araneta Properties, Inc. and a director of Ace Saatchi and Saatchi, Inc. Perry L. Pe 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. 12 Singapore Land Limited annual report 2009

15 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 2009, 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 3 Executive Committee Meetings Wee Cho Yaw 4 n/a John Gokongwei, Jr. 4 n/a n/a n/a 3 Lim Hock San 4 n/a n/a n/a 3 Antonio L. Go 4 n/a 1 n/a n/a Gn Hiang Meng 3 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 3 n/a n/a n/a 2 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 3 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 2 3 n/a 1 n/a Singapore Land Limited annual report

16 Corporate Governance Report 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. 14 Singapore Land Limited annual report 2009

17 The CEO is the most senior executive in the Company and bears executive responsibility for the Company s business. 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 under its Terms of Reference, approval limits and powers affecting the Group on, inter alia, (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 for 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 Singapore Land Limited annual report

18 Corporate Governance Report 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. 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. 16 Singapore Land Limited annual report 2009

19 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 non-executive 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. 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 various 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 AGM. There are no special service contracts offered by the Company. Singapore Land Limited annual report

20 Corporate Governance Report Remuneration of Directors For The Year Ended 31 December 2009 Variable or Share Options Performance- Granted, Related Allowances Remuneration Band & Base/Fixed Income/ Directors and Other Name of Director Salary Bonuses Fees Benefits $500,000 $750,000 Lim Hock San* 55% 31% 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 18 Singapore Land Limited annual report 2009

21 Remuneration of Key Executives (Who Are Not Also Directors) For The Year Ended 31 December 2009 Variable or Share Options Performance- Granted, Related Allowances Base/Fixed Income/ and Other Remuneration Band & Name of Key Executive Salary Bonuses Benefits $250,000 $500,000 Vito Koh Leong Huat* 51% 25% 24% Below $250,000 Loy Chee Chang* 50% 12% 38% Susie Koh* 60% 14% 26% Goh Poh Leng* 54% 16% 30% Koh Kim Meng* 65% 15% 20% * The remuneration of the executive director and key executives were apportioned between SingLand and its holding company, UIC. Their duties and responsibilities cover both companies. The above remuneration band represents the quantum borne by SingLand. 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 with a listed property company. 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. Singapore Land Limited annual report

22 Corporate Governance Report 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. 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 Koh Kim Meng (General Manager, Projects & Development) Mr Koh Kim Meng has a Second Class Upper Honours Degree in Civil Engineering from the University of Technology, Loughborough, U.K., a Diploma in Structural Engineering from the Singapore Polytechnic and a Certificate in Management Studies from the Institute of Management Studies. He joined UIC in 2007 and has extensive experience in every aspect of projects and development works. 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; 20 Singapore Land Limited annual report 2009

23 (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. 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 2009, 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. Singapore Land Limited annual report

24 Corporate Governance Report 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. 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. 22 Singapore Land Limited annual report 2009

25 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 Interested Person Transactions entered into during the financial year ended 31 December 2009 are set out as follows: Name of Interested Person Aggregate value of all IPT during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders mandate pursuant to Rule 920 of the SGX-ST Listing Manual) S$ million Aggregate value of all IPT conducted under shareholders mandate pursuant to Rule 920 of the SGX-ST Listing Manual (excluding transactions less than $100,000) S$ million UIC Investments (Properties) Pte Ltd 0.4 n/a Rental and service payments to UIC Investments (Properties) Pte Ltd Relatives of a director Purchase of residential properties 2.8 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. Material Contracts There were no other material contracts of the Company or its subsidiaries involving the interests of the CEO, each Director or controlling shareholder, either still subsisting at the end of the financial year or if not then subsisting entered into since the end of the previous financial year except for the Company s joint venture with UIC and UOL Group Limited ( UOL ) for the acquisition and development of One Amber in The freehold land was acquired for a cash consideration of $236.5 million. The aforesaid transaction between the Company, UIC and UOL was on normal commercial terms, the risks and rewards of the joint venture are in proportion to the equity of each joint venture partner (35 : 35 : 30 respectively). Singapore Land Limited annual report

26 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 *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 * The Board Member will be stepping down as Director/Alternate Director/Member of his respective Board Committee at the close of the AGM to be held on 23 April Singapore Land Limited annual report 2009

27 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 with effect from 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: Company Registration Number C Singapore Land Limited annual report

28 Management Review 2009 OVERVIEW 2009 was a challenging year for the office market. After nine months of negative take-up, the office market slowly picked up in the third quarter of 2009 on the back of improving business confidence. Despite the difficult conditions, the Group managed to increase office rental income by 16% to $181 million compared to the previous year. However, average occupancy dropped slightly to 91%. The residential property market took on an unexpected turn during the second quarter despite a slow start for the year Low interest rate, lack of alternative investment and pent up demand, fuelled the surge in market activities. However, sentiments were more subdued towards the end of the year, with the cooling measures announced by the Government. 26 Singapore Land Limited annual report 2009

29 SGX Centre 2 Marina Square Shopping Mall The Excellency, Chengdu Novena Square Singapore Land Limited annual report

30 Management Review Singapore Land Tower SINGAPORE Commercial Office Investments Singapore Land Tower During the year under review, Singapore Land Tower faced fierce competition from newer buildings in the Central Business District. Despite the challenges and 49% of lease expiries, the building was able to improve its rental income by 21% although average occupancy slipped to 89%. A series of upgrading works were undertaken during the year as part of our on-going programme to enhance the building s facilities. These included the upgrading of the Public Address System in September The new Public Address System utilises state-ofart audio technology which will enable better control and more efficient message dissemination to our tenants. The Fire Command Centre was concurrently retrofitted to incorporate the new public address system with additional closed circuit TV monitoring system. The cooling tower on the fourth storey was upgraded to provide more efficient cooling to the common areas in the podium block as well as basement lobbies and the restaurant. Clifford Centre Clifford Centre faced a challenging year as 155,000 square feet of leases, which represents 56% of the total lettable area, expired during the year. Notwithstanding the high expiries and intense competition from newer buildings in the vicinity, 73% of the leases were renewed. With an additional 38,000 square feet of new leases secured, the building achieved an average occupancy of 91%. Total rental income also improved by 13%. The retail premises, which form 20% of the total lettable area, contributed substantially to 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. SGX Centre SGX Centre continued to perform well in 2009 with rental income improving by 21% and average occupancy at 96%. Clifford Centre The Building Management Services Division continued to serve as the managing agent for both SGX Centre 1 & 2 during the year under review. As Managing Agents, we will continue to upkeep and renew the facilities to maintain them in good and serviceable condition so as to retain existing good tenants and to face the competition ahead. The Gateway Leases of about 340,000 square feet expired during the year. Of these 70% were renewed. Together with the leasing of another 68,000 square feet, rental income improved by 13% compared to the preceding year. However, average occupancy dropped to 89%. To better serve our tenants and as part of our continuous energy conservation programme, improvement works such as modernisation of lifts at Gateway East and the replacement of centralised air-conditioning chillers were carried out. Other building initiatives include changing of electricity supplier offering lower rates to achieve savings in energy costs. 28 Singapore Land Limited annual report 2009

31 The Gateway Abacus Plaza and Tampines Plaza The twin office towers located in the Tampines Finance Park faced fierce competition from both new buildings in the Tampines vicinity as well as the Changi Business Park. During the year, 88% of leases expired in Abacus Plaza. Of these, 62% were renewed. Another 26% of new leases were secured. Average occupancy as at the end of the year stood at 93% while rental income improved by 6%. In the case of Tampines Plaza, the building maintained its average occupancy at close to 100%. Minor improvements such as the installation of closed circuit television cameras to all eight passenger lifts were carried out during the year. In line with National Environment Agency campaign to promote energy efficiency, light tubes at the car park and common areas were replaced with energy efficient tubes. Variable speed drives were installed to all chilled water pumps. Abacus Plaza & Tampines Plaza SINGAPORE Commercial Retail Properties Marina Square Shopping Mall With over 650,000 square feet of retail space and 300 tenants, Marina Square offers a diverse mix of shopping, dining and entertainment options targeting at the mass-affluent market. Complementing the selection of major international brands like Mango, Zara and Topshop are local designers Nicholas Wong and Daniel Yam. Lifestyle stores such as Muji, Golf House and The Planet Traveller provided added dimension to the shopping experience. In 2009, the revamp of Kids zone on Level 3 was successfully completed. The anchor space occupied by Kiddy Palace was subdivided into three units resulting in higher rental yields. A new playground, new kids fashion brands, Periwinkle and Poney, as well as The Little Gym a US-franchised fitness and development centre for children, were brought in to enhance the overall tenant mix. To bring in shoppers and encourage spending, the Advertising and Promotions department worked closely with tenants on tactical promotions to drive sales through thematic events and atrium fairs. Marina Square hosted the National Day exhibition which attracted strong turnout of 150,000 a day. The themed atrium event featuring Formula 1 merchandise, shopping promotions and live screening of the race during the Singapore Grand Prix season was held to create buzz and shopper traffic. Marina Square is a member of the Baywatch Association, established by Marina Bay stakeholders. In collaboration with Singapore Tourism Board, Baywatch launched an inaugural Christmas Light-Up at the Marina Bay area, separate from Orchard Road this year. This was intended to build a separate identity and instil greater awareness of Marina Bay as a distinct and unique precinct. The Christmas Light-Up leading to the New Year Countdown at the floating platform has become a signature event at the Bay. Such events would help to anchor Marina Square as a centre of activity, entertainment and exciting events for locals and international visitors. Marina Square Hotels The hospitality industry in Singapore continued to be affected by both weaker demand from less inbound Singapore Land Limited annual report

32 Management Review Mandarin Oriental travel and lower discretionary spending due to the global economic crisis as well as the outbreak of the Influenza A (H1N1). Consequently, the three Marina Square Hotels, namely; Pan Pacific Singapore, Marina Mandarin and Mandarin Oriental, experienced a decline in both occupancy and average room rates, which was generally in line with the competitive benchmark of other international hotel brands in Singapore. With the opening of the integrated resorts in 2010, rate of growth would likely remain subdued though the three hotels may experience improvement in demand volume due to the anticipated increase in visitor arrivals. West Mall West Mall celebrated its 11th Anniversary with the residents of Bukit Batok New Town, Jurong East, Hillview and Clementi by holding a spectacular circus carnival in November. Due to its proximity to the Bukit Batok MRT station and bus interchange, the event was well attended by shoppers. Besides the Anniversary event, many vibrant promotions were organised throughout the year. Two new campaigns, The Coupon Savers and Fashion & Lifestyle Event held in March Pan Pacific Singapore and August 2009 encouraged shoppers to spend to qualify for vouchers which could be redeemed at the shops. The Chinese New Year show featuring the Blue Sky Dance Troupe from China attracted many shoppers and photographers to the Mall at the beginning of the year. There were fewer expiries in Only 10.7% of the Mall s lettable area of 183,000 square feet expired. Most of these leases were renewed at rates which were 7% higher than existing rents. Shops with leases which were renewed underwent renovations and updated their decorations to keep up with the new retailers. For leases which West Mall were not renewed, new retailers such as Citispa, Udders Ice Cream, Pink Beauty and Shojikiya were brought into the Mall to strengthen the tenant mix for shoppers. Overall, rental revenue increased by 4%. Notwithstanding its age, West Mall received the Fire Safety Excellence Award in This award was given by the National Fire Prevention Council in recognition of its good fire safety practices and records. Novena Square The Group has a 20% interest in Novena Square, a commercial development located above the Novena MRT Station. As at the end 30 Singapore Land Limited annual report 2009

33 The clubhouse at One Amber The Sixth Avenue Residences of December 2009, occupancy for the retail space was 99% whilst office occupancies for Tower A and B were 97% and 100% respectively. The retail mall, Novena Square, strengthened its position as a sports mall with several high profile sporting events including cycling, water polo, underwater hockey, street caged basketball and ice skating competitions. Velocity has also worked with partners to bring in wellpublicised events like the appearance of the Liverpool soccer players, World Slalom Free Style Skating Competitions and Lianhe Zaobao Table Tennis Cup. More than 60% of the popular runs like New Balance Real Run, Saucony 100 Plus Passion Run and Mizuno Runs also held their registration road shows at Velocity. In 2009, the Mall strengthened its working relationship with the Singapore Sports Council by having the launch of the official mascot and song for the Asian Youth Games as well as the launch of their revamped sports website at the Mall. SINGAPORE Residential Properties One Amber Located on 249,300 square feet of freehold site in the Katong area, the development comprises four 23-storey blocks of 562 units, with full condominium facilities. The Group has a 35% stake in this project. As at 31st December 2009, the development is about 80% completed. TOP for the fully sold project is expected to be obtained in The Sixth Avenue Residences The 172,000 square feet freehold site located along Sixth Avenue in the heart of District 10, comprises seven 5-storey blocks of 175 apartments, with full condominium facilities. The Group has a 48% interest in this fully sold project. TOP was obtained in August The Trizon Nestled 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 The Trizon Singapore Land Limited annual report

34 Management Review Beijing Landmark Towers proposed development comprises three 24-storey blocks of 289 units, and has full condominium facilities. As at 31st December 2009, the project is about 16% completed and 45% sold. TOP is expected to be obtained in Building Management The Building Management Services Division continues to maintain all the office buildings of Singapore Land and UIC Group of Companies. We provide technical and contracting support for all building services to our tenants. The Division is also the Managing Agent for the Management Corporation of SGX 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 proved to be a challenging year for the hospitality industry. In addition to the financial crisis, the H1N1 outbreak caused a number of large exhibitions and seminars to be cancelled. Visitor arrivals dwindled and room rates tumbled along with occupancy rates. The only favourable event is that 12,000 square metre of space in the office tower s vacated by the Daimler Group last year was filled. 95% occupancy was achieved. Office rental rates slipped substantially during the year due to oversupply. The Excellency, Chengdu The site has a land area of 7,566 square metres and is situated very close to the popular Chun Xi shopping belt in Dacisi Road, Chengdu. With a gross floor area of approximately 54,000 square metres, the condominium project named Lang Yu ( The Excellency ) comprises two 51-storey residential blocks. As at end December 2009, the construction has been completed up to 15th storey. It is the Group s wholly-owned project. Mandarin Oriental The Excellency, Chengdu 32 Singapore Land Limited annual report 2009

35 Human Resource To meet corporate objectives effectively, the Group remains committed to strengthen its human capital through continuous training and development. Employees were encouraged to attend seminars, talks, courses and job-related skills organised by professional institutions. We also recognise the importance of maintaining an enhanced quality work life as this creates a motivated and dedicated workforce. In collaboration with the Health Promotion Board, workplace health programmes were organised during lunch and after office hours for our employees. Indoor and outdoor activities include regular taiji exercises, line dance, physiotherapy consultations, Amazing Race at Labrador Park, Southern Ridge Walk Challenge, Walk Buddies Programme as well as the Vertical Challenge, a stair climbing exercise at Clifford Centre. To foster interaction amongst employees and family members, various activities were planned throughout the year. These included musical concert, movie screening and short trips. The in-house newsletters provide the channel for communication with staff on a regular basis. In support of community development, the Group made donations to social community organisations and participated in charity drives. For the sixth consecutive year, employees took part in the SGX Bull Run organised by the Singapore Exchange. The iconic charity fun run of 3.2km in the Central Business District was in aid of 12 charitable organisations for needy youths. SGX Bull Run A Tour of Malacca Singapore Land Limited annual report

36 Property Activities Summary As at 31 December 2009 Site Area (sq metres) Gross Floor Area (sq metres) Approximate Net Floor Area (sq metres) Car Parking Lots Percentage of Shareholding Subsidiary Companies Property Holdings 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, (inclusive of 3,336 A 29-storey office building with two 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 two basements of car parking space located at Tampines Central 1 in the Tampines Finance Park Marina Square 92, , ,780 1, Hotels and Shopping Mall comprising fashion boutiques, department store, eating and entertainment outlets, food court, cinemas and bowling alley, commercial building, car park and communal facilities 34 Singapore Land Limited annual report 2009

37 Gross Approximate Car Site Area Floor Area Net Floor Area Parking Percentage 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 16,673 70,010 57, 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 Tenure Site Area (sq metres) Gross Floor Area (sq metres) Expected Year of TOP Percentage of Shareholding Residential Property Projects Completed The Sixth Avenue Residences Freehold 16,055 22, * 48 A 175-unit condominium at Sixth Avenue Under Development One Amber Freehold 23,161 64, A 562-unit condominium at Amber Gardens The Trizon Freehold 18,153 38, A 289-unit condominium at Ridgewood Close The Excellency, Chengdu 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 *Actual Year of TOP Singapore Land Limited annual report

38 FINANCIAL REPORT Financial Contents The TRIZON 36 Singapore Land Limited annual report 2009

39 Financial Contents contents 38 directors report 41 statement by directors 42 independent auditor s report 44 consolidated income statement 45 Consolidated statement of comprehensive income 46 balance sheets 47 consolidated statement of changes in equity 48 consolidated cash flow statement 49 notes to the financial statements Singapore Land Limited annual report