dpU 10.93¢ fy2013 dpU 10.01¢ fy2012 dpU 8.32¢ fy2011 dpU 8.20¢ fy2010 dpU 7.51¢ fy2009 dpU 7.29¢ fy2008 dpU 6.55¢ fy2007 hiTTiNg high points ANNUAL REPORT 2013 cONTENTs editoriaL 02 Corporate Profile Structure of FCT 03 Performance at a Glance 04 Letter to Unitholders 06 Year in Brief 11 Investor Relations 12 Board of Directors 14 Trust Management Team 18 Property Management Team 20 Community Engagement 21 operations & FinanCiaL review 23 Operations & Financial Review 29 Capital Resources Risk Management 31 32 Market Overview Portfolio Overview MaLL proFiLes 36 38 Causeway Point 42 Northpoint 45 Bedok Point YewTee Point 48 51 Anchorpoint 54 Hektar REIT Corporate governanCe 57 Corporate Governance Report Financial Statements FinanCiaLs 67 109 Statistics of Unitholders 111 Additional Information 112 Notice of Annual General Meeting Proxy Form Corporate Information +9.2% 10.93¢ DisTRibUTiON PER UNiT +7.3% $158.0m gROss REvENUE +15.7% $1.77per unit NET AssET vALUE +6.9% $111.6m NET PROPERTy iNcOmE +9.5% $90.1m DisTRibUTiON TO UNiThOLDERs high points Of ThE yEAR FCT turned in another strong performance in FY2013, featuring multiple high points in revenue, earnings, distribution per unit and net asset value. 2 fRAsERs cENTREPOiNT TRUsT cORPORATE PROfiLE frasers centrepoint Trust (“fcT”) is a leading developer-sponsored retail real estate investment trust with five quality suburban malls in singapore. fcT’s current portfolio comprises causeway Point, Northpoint, bedok Point, yewTee Point and Anchorpoint. With a combined appraised value of $2 billion as at 30 september 2013, fcT’s malls enjoy wide captive markets, good connectivity and high occupancy. fcT also receives steady overseas returns via its 31% strategic stake in hektar REiT. fcT is focused on increasing shareholder value by pursuing organic, enhancement and acquisition growth strategies. With proactive lease management initiatives, fcT is well-placed to achieve sustainable rental growth. To unlock the full potential of its assets, fcT continues to enhance existing assets to maximise their performance. The potential acquisitions of new assets will help fcT gain greater scale and drive further income growth for unitholders. fcT was listed on the main board of the singapore Exchange securities Trading Limited on 5 July 2006. The trust is managed by frasers centrepoint Asset management Ltd., a division of property company frasers centrepoint Limited. vision • Our vision is to be “your malls of choice” to our stakeholders: Tenants, shoppers and investors. • We aim to be a fair and value-adding landlord to our Tenants. • We aspire to create and offer a vibrant and exciting shopping experience to meet the expectations of our shoppers. • We endeavour to be the REiT of choice affording stable, sustainable and growing distributions to our investors. mission frasers centrepoint Trust’s mission is to provide its unitholders with a regular and stable distribution by investing primarily in quality income-producing retail properties in singapore and overseas, and to achieve long-term growth in net asset value. ANNUAL REPORT 2013 3 sTRUcTURE Of fcT UnithoLders Holdings of Units in Frasers Centrepoint Trust Distributions Manager frasers centrepoint Asset management Ltd. Management Services Management Fees Acts on behalf of Unitholders Trustee Fees trUstee hsbc institutional Trust services (singapore) Limited Ownership of Assets Net Property Income FCt portFoLio • Causeway Point • Northpoint • Bedok Point • YewTee Point • Anchorpoint Property Management Fees Property Management Services property Manager frasers centrepoint Property management services Pte. Ltd. 4 fRAsERs cENTREPOiNT TRUsT PERfORmANcE AT A gLANcE Gross revenue ($ million) +7.3% net ProPerty income ($ million) +6.9% 147.2 158.0 111.6 104.4 114.7 117.9 86.6 80.1 82.6 59.9 9 0 0 2 Y F 0 1 0 2 Y F 1 1 0 2 Y F 2 1 0 2 Y F 3 1 0 2 Y F 9 0 0 2 Y F 0 1 0 2 Y F 1 1 0 2 Y F 2 1 0 2 Y F 3 1 0 2 Y F FY2013 gross revenue grew 7.3% to $158.0 million on higher contributions from Causeway Point and Northpoint from better rental rates achieved for new and renewed leases signed during the year. The increase of $7. 2 million in net property income year-on-year was contributed by Causeway Point and Northpoint, and was partially offset by lower contributions from Anchorpoint and Bedok Point. 5-year FinanCiaL highLights Selected Income Statement and Distribution Data Gross Rent ($’000) Other Revenue ($’000) Gross Revenue ($’000) Net Property Income ($’000) Distributable Income ($’000) Selected Balance Sheet Data Total Assets ($ million) Total Borrowings ($ million) Net Assets ($ million) Value of Portfolio Properties ($ million) Key Financial Indicators Distribution per Unit (cents) Net Asset Value per Unit ($) Ratio of Total Borrowing to Total Assets (Gearing) Interest Coverage (times) Fy2009 Fy2010 Fy2011 Fy2012 Fy2013 74,608 12,016 100,349 103,644 131,280 140,329 14,389 14,240 15,923 17,630 86,624 114,738 117,884 147,203 157,959 59,861 46,940 80,050 59,177 82,618 104,430 111,590 64,375 82,348 90,131 1,165.5 1,516.2 1,786.8 1,917.1 2,134.5 349.0 763.8 460.0 989.3 1,100.0 1,439.0 559.0 1,151.9 1,697.0 577.0 1,263.0 1,816.0 589.0 1,462.4 2,019.5 7.51 1.22 29.9% 6.12 8.20 1.29 30.3% 4.43 8.32 1.40 31.3% 4.62 10.01 1.53 30.1% 5.56 10.93 1.77 27.6% 6.15 ANNUAL REPORT 2013 5 net Asset vAlue Per unit ($) +15.7% Distribution Per unit (¢) +9.2% 1.77 1.53 1.40 1.29 1.22 10.93 10.01 8.20 8.32 7.51 9 0 0 2 Y F 0 1 0 2 Y F 1 1 0 2 Y F 2 1 0 2 Y F 3 1 0 2 Y F 9 0 0 2 Y F 0 1 0 2 Y F 1 1 0 2 Y F 2 1 0 2 Y F 3 1 0 2 Y F The net asset value per unit grew 15.7% to $1.77 as FCT portfolio recorded net surplus of $195.7 million on property revaluation on 30 September 2013. The FY2013 distribution per unit (“DPU”) of 10.93 cents is a new-high and it represents the seventh year of consecutive DPU growth since FCT’s listing. FCt Unit priCe perForManCe (1 OcTObER 2012 - 30 sEPTEmbER 2013) FCT UNIT PRICe (S$) VOlUme UNIT PRICe (S$) Closing price on 1 Oct 2012: $1.815 Closing price on 30 Sep 2013: $1.845 2.50 2.00 1.50 1.00 0.50 0.00 T C O V O N C E D N A j B E F R A M R P A Y A M N U j L U j G U A P E S 2012 2013 Unit priCe statistiCs For Fy2013 (1 OcTObER 2012 - 30 sEPTEmbER 2013) Period Open : $1.815 on 1 October 2012 Period Close : $1.845 on 30 September 2013 Period High : $2.320 on 3 May 2013 Period Low : $1.765 on 29 August 2013 VOlUme 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 6 fRAsERs cENTREPOiNT TRUsT LETTER TO UNiThOLDERs Mr phiLip eng chairman fcT turned in another strong performance in fy2013 with full year distribution per unit of 10.93 cents, an increase of 9.2% over the previous year. dr Chew tUan Chiong chief Executive Officer ANNUAL REPORT 2013 7 dear UnithoLders, We are pleased to present Frasers Centrepoint Trust (“FCT” or the “Trust”)’s Annual Report 2013 for the financial year ended 30 September 2013 (“FY2013”). Consistent and weLL-baLanCed growth FCT turned in another strong performance in FY2013 with full year distribution per unit (“DPU”) of 10.93 cents, an increase of 9.2% over the previous year. Gross revenue was $158.0 million and net property income was $111.6 million; both were approximately 7% higher than the previous year. FCT also recorded its seventh consecutive year of DPU increase. The compounded annual growth rate through the seven years was 8.9%. This reaffirms our strategy to achieve steady and well-balanced growth through a multi-pronged approach of asset acquisitions, asset enhancement initiatives (“AeI”) and organic growth from existing assets. CaUseway point and northpoint Led the growth The performance drivers for the year were Causeway Point and Northpoint. Revenue from Causeway Point grew 13% with improved rental rates from new and renewed leases as well as higher occupancy following the completion of its AEI. The average rental reversion at Causeway Point for FY2013 was 7.6%. Northpoint also achieved higher rental rates for its new and renewed leases, which helped grew its revenue by 5%. The average rental reversion for Northpoint for FY2013 was 8.9%. Performance at YewTee Point and Anchorpoint remained stable with positive rental reversions of 11% and 10%, respectively, while Bedok Point saw a slight decline of 2% in revenue due to weaker rentals during year. soLid FinanCiaL position The financial position of the Trust remained solid with gearing level at 27.6%. Total assets as at 30 September 2013 increased 11% to $2.13 billion. The increase was mainly attributed to the recognition of $195.7 million from net surplus on revaluation of FCT’s properties. All five properties in FCT’s portfolio recorded higher valuations compared to a year ago. Correspondingly, the net asset value per unit of FCT increased 16% to $1.77, from $1.53 a year ago. Average cost of borrowing stood at 2.73% and the weighted average debt maturity was 2.85 years. Our risk exposure to rising interest rates in the near-term remains low, given that 94% of our borrowings are on fixed rates, or have been swapped to fixed rates. We will continue to explore borrowing options that help to stretch our debt maturity profile as we refinance maturing loans. We have also increased of the size of FCT’s Medium Term Note programme from S$500 million to S$1 billion to enhance our financial flexibility. These initiatives will position FCT well to support its growth plans and capital needs. stepping Up initiatives that heLp inCrease oUr tenants’ saLes We are cognizant of the various challenges posed by rising operating expenses in property taxes, utilities and maintenance expenses. Amidst continuing efforts to maintain cost efficiency in our operations, we are stepping up various initiatives in the coming year, particularly in our advertising & promotional programs, to grow shopper traffic and to help our tenants increase their sales. FoCUs on UpCoMing Lease renewaLs Lease renewals will be a key area for FCT in the next two years. Leases accounting for 32% of FCT’s total gross rental income (“GRI”) are due for renewal in FY2014 and leases accounting for 39% of the GRI in FY2015. Causeway Point and Northpoint, in particular, account for substantial proportion of these lease expiries. These two malls are the best performing malls in FCT’s portfolio and they enjoy robust leasing demand. We are confident that these two malls will be able to achieve healthy rental reversions. growth throUgh asset aCqUisitions One of the growth catalysts for FCT is the pipeline assets from the Sponsor, Frasers Centrepoint Limited. These are assets in the Sponsor’s portfolio which can potentially be acquired by FCT in the future. These include existing malls such as Changi City Point and green field developments in the Sponsor’s portfolio. In addition to pipeline assets, FCT is also seeking other asset acquisition opportunities in Singapore and overseas. aCCoLades FCT won two awards during the year in recognition of its efforts in investor relations. It garnered the “Grand prix for best overall investor relations - mid/small cap” at the IR Magazine Awards South East Asia 2012 and the Best Investor Relations Award (Bronze) in the REITS & Business Trust Category at the Singapore Corporate Awards 2013. We appreciate the support from all our investors, analysts, media and the investment community and will continue to improve on our efforts in investor relations. Looking Forward The Government expects Singapore’s economy to grow between 3.5% and 4% in 2013. The projected growth in 2014 is between 2% and 4%. The rise in median household income and sustained low unemployment rate, among other factors, are expected to underpin the growth and stability of the retail sector. In particular, we expect the suburban retail sector to further benefit from the population increase in the suburban residential estates, especially in Woodlands and Yishun where FCT has strong presence. Moving forward, we will continue to pursue our fundamental strategy of growth through both organic and acquisitive means, which have enabled us to hit new highs every year. aCknowLedgeMents We wish to express our gratitude to our Board of Directors for their wise counsel and dedication. We also like to thank our Unitholders, business partners, colleagues, tenants and shoppers for their continued support for FCT. Thank you. Mr phiLip eng chairman dr Chew tUan Chiong chief Executive Officer 3 aCqUisition growth asset enhanCeMent growth 2 1 organiC growth CLear growth strategies A MULti-point gROWTh sTRATEgy Our strategy is to achieve steady and well-balanced growth through a multi-pronged approach of asset acquisitions, asset enhancement initiatives and organic growth from existing assets. 10.93¢ Fy2013 10.01¢ Fy2012 8.32¢ Fy2011 8.20¢ Fy2010 We have achieved seven consecutive years of DPU growth since listing, at a compounded annual growth rate of 8.9% 7.51¢ Fy2009 7.29¢ Fy2008 6.55¢ Fy2007 REAchiNg new points We will continue to pursue our fundamental strategy of growth through both organic and acquisitive means, which have enabled us to hit new highs every year. ANNUAL REPORT 2013 11 yEAR iN bRiEf deC 2012 FCT was awarded the “Grand prix for best overall investor relations - mid/small cap” at the IR Magazine Awards South East Asia 2012. FCT MTN retired the S$55 million 2.83% Medium Term Notes which matured on 8 February 2013. Feb 2013 Jan 2013 FCT posted strong 1Q13 results with 10.8% year-on-year increase in distributable income. DPU for 1Q13 grew 9.1% to 2.40 cents. FCT convened its Fourth Annual General Meeting on 22 january 2013 and all resolutions as set out in the Notice of AGM were duly passed. FCT MTN Pte Ltd (“FCT MTN”), a wholly-owned subsidiary of HSBC Institutional Trust Services, (the trustee of FCT) issued S$70 million 3.00% Medium Term Notes (“MTN”) due 2020 under FCT’s existing MTN programme. apr 2013 FCT announced its distributable income for 2Q13 grew 10.4% and DPU for 2Q13 increased 8% to 2.70 cents. Northpoint, Bedok Point, YewTee Point and Anchorpoint were awarded the “We Welcome Families” Achiever Award by the Businesses For Families Council. JUL 2013 FCT announced DPU of 2.85 cents for 3Q13, an increase of 9.6% year-on-year. Causeway Point was re-launched on 30 july in conjunction with its 15th anniversary. FCT achieved strong performance for FY2013 with full year DPU of 10.93 cents, an increase of 9.2% over the previous year. It was also the seventh consecutive year of DPU growth since FCT’s listing. sep 2013 aUg 2013 Frasers Centrepoint Trust won the Best Investor Relations Award (Bronze) in the REITS & Business Trust Category at the Singapore Corporate awards 2013 organised by The Business Times. FCAM announced that the size of the multicurrency MTN programme under FCT MTN was increased from S$500 million to S$1 billion. 12 fRAsERs cENTREPOiNT TRUsT iNvEsTOR RELATiONs open and transparent CoMMUniCations Frasers Centrepoint Asset Management Ltd (“FCAm”), as Manager of Frasers Centrepoint Trust (“FCT”), is committed to maintaining open and transparent communications with its unitholders and the investment community. FCAM provides factual and timely disclosure on all material information concerning FCT. General information on FCT including annual reports, portfolio information and investor presentations are updated regularly on FCT’s website. All news releases and company announcements are also available on the SGX-ST website. aCtive engageMent with investors Senior management of FCAM meets regularly with FCT’s investors and analysts at conferences (both overseas and local), one-on-one meetings, post-results luncheons and road shows to apprise them of FCT’s corporate developments and financial performance. FCT has participated in several conferences hosted by major financial institutions in the year under review and they include the UBS Global Real Estate CEO/CFO Conference (in London); the Bank of America Merrill Lynch ASEAN Star Conference; the Citi Asia Pacific Property Conference (in Hong Kong); the DBS Pulse of Asia Conference; and the UBS ASEAN Conference 2013. FCAM met or spoke with 273 investors from 160 firms in FY2013, compared to 282 investors from 159 firms in FY2012. The investors generally view FCT favourably because of its established track record in distribution growth, stability, good growth prospects, attractive total return, good corporate governance and transparent management. As at 30 September 2013, 51.7% of the total FCT issued units were held by institutional investors, 41.0% were held by the Sponsor group (comprising Frasers Centrepoint Limited and FCAM) and 7.3% were held by retail investors. Coverage by eqUity researCh hoUses As at 30 October 2013, there were 15 equity research firms* (FY2012: 17) which provide equity research coverage on FCT. The research firms were (in alphabetical order): 1. Bank of America-Merrill Lynch 2. CLSA 3. Credit Suisse 4. CIMB Research 5. Citi Investment Research 6. Daiwa Capital Markets 7. DBS Vickers Securities 8. DMG & Partners Securities 9. HSBC 10. j.P. Morgan 11. OCBC Investment Research 12. Religãre Institutional Research 13. Standard Chartered Bank 14. UBS 15. UOB Kay Hian Research * The research coverage by RHB Research Institute Sdn Bhd was consolidated with DMG & Partners Securities in 2012. Maybank Kim Eng Research voluntarily stopped its coverage on FCT in 2012. ANNUAL REPORT 2013 13 aCCoLades • Frasers Centrepoint Trust was awarded the “Grand prix for best overall investor relations - mid/small cap” at the IR Magazine Awards South East Asia 2012. • Frasers Centrepoint Trust won the Best Investor Relations Award (Bronze) in the REITS & Business Trust Category at the Singapore Corporate awards 2013 organised by The Business Times. from left to right: Ms. yeo Lian sim chief Regulatory & Risk Officer of singapore Exchange Ltd dr Chew tuan Chiong cEO, frasers centrepoint Asset management Ltd Mr alvin tay Editor of The business Times CEO Dr Chew (centre) receiving the award for the Best Investor Relations Award (Bronze) in the REITS & Business Trust Category at the Singapore Corporate awards 2013 organised by The Business Times. Fy2014 FinanCiaL CaLendar^ 21 january 2014 – Annual General Meeting 21 january 2014 – 1Q FY2014 Results Announcement End February 2014 – 1Q FY2014 Distribution Payment 22 April 2014 – 2Q FY2014 Results Announcement End May 2014 – 2Q FY2014 Distribution Payment 22 july 2014 – 3Q FY2014 Results Announcement End August 2014 – 3Q FY2014 Distribution Payment 21 October 2014 – 4Q FY2014 Results Announcement End November 2014 – 4Q FY2014 Distribution Payment enqUiries For general enquiries on FCT, please contact: Mr Chen Fung Leng Head, Investor Relations & Research Frasers Centrepoint Asset Management Ltd Tel: (65) 6277-2657 Email: ir@fraserscentrepointtrust.com Unit registrar Boardroom Corporate & Advisory Services Pte Ltd Phone: (65) 6536-5355 Fax: (65) 6536-1360 Website: www.boardroomlimited.com ^ Note: Dates are indicative and are subject to change. 14 fRAsERs cENTREPOiNT TRUsT bOARD Of DiREcTORs Mr phiLip eng heng nee AGe 67 dr Chew tUan Chiong AGe 55 independent Non-Executive chairman cEO and Executive Director Date of appointment as Director : 3 April 2006 Date of appointment as Director : 14 July 2010 length of service as Director (as at 30 September 2013) : 7 years 6 months length of service as Director (as at 30 September 2013) : 3 years 2 months board committee served on: • Nil board committee served on: • Nil academic & professional qualifications: • Bachelor of Commerce in Accountancy, University of New South Wales • Associate Member, Institute of Chartered Accountants in Australia present directorships (as at 30 september 2013) listed companies • Ezra Holdings Limited • Fraser & Neave, Limited • mDR Limited (Non-Executive Chairman) • PT Adira Dinamika Multi Finance, Tbk (Commissioner) • The Hour Glass Limited Others • Chinese Development Assistance Council • Hektar Asset Management Sdn Bhd • Heliconia Capital Management Private Limited • KK Women’s and Children’s Hospital Pte Ltd • NTUC Income Insurance Cooperative Limited • OpenNet Private Limited • Singapore Health Services Pte Ltd Major appointments (other than directorships) • Singapore’s Non-Resident High Commissioner to Canada past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Asia Pacific Breweries Limited • Hup Soon Global Corporation Limited • MCL Land Limited others • Mr Philip Eng spent 23 years with the Jardine Cycle & Carriage Group before retiring in February 2005 as Group Managing Director. academic & professional qualifications: • Bachelor of Engineering (First Class Honours), Monash University • Master of Engineering, National University of Singapore • Doctor of Philosophy, University of Cambridge • Chartered Engineer, The Engineering Council UK • Fellow, The Institution of Engineers Singapore • Fellow, Academy of Engineering Singapore present directorships (as at 30 september 2013) listed companies • Nil Others • CityNet Infrastructure Management Pte Ltd • Frasers Property Australia Pty Ltd • Hektar Asset Management Sdn Bhd • Vacaron Company Sdn Bhd Major appointments (other than directorships) • Chief Executive Officer, Frasers Centrepoint Asset Management Ltd past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Nil others • Previously Chief Executive Officer of the Science Centre Singapore (1995 – 2010) • Public Administration Medal (Silver) (Singapore) • Sugden Award by the Combustion Institute (UK) • IPS Cadi Scientific Medal by the Institute of Physics Singapore • President’s Award by Asia Pacific Association of Science & Technology Centres ANNUAL REPORT 2013 15 Mr Chia khong shoong AGe 42 Mr Christopher tang kok kai AGe 52 Non-Executive Director Non-Executive Director Date of appointment as Director : 1 September 2009 Date of appointment as Director : 27 January 2006 length of service as Director (as at 30 September 2013) : 4 years 1 month length of service as Director (as at 30 September 2013) : 7 years 8 months board committee served on: • Nil board committee served on: • Nil academic & professional qualifications: • Bachelor of Commerce (Accounting and Finance) (First Class Honours), University of Western Australia • Master of Philosophy (Management Studies), Cambridge University present directorships (as at 30 september 2013) listed companies • Nil Others • Frasers Centrepoint Asset Management (Commercial) Limited Major appointments (other than directorships) • Chief Financial Officer, Frasers Centrepoint Limited • Chief Executive Officer – Australia, New Zealand and United Kingdom, Frasers Centrepoint Limited past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Gemdale Properties and Investment Corporation Limited (formerly known as Frasers Property (China) Limited) others • Mr Chia was previously an investment banker and has worked with Schroders, Salomon Smith Barney / Citigroup Global Markets and HSBC in London, New York, Kuala Lumpur and Singapore. academic & professional qualifications: • Bachelor of Science, National University of Singapore • Master of Business Administration, National University of Singapore present directorships (as at 30 september 2013) listed companies • Nil Others • Frasers Centrepoint Asset Management (Commercial) Limited • Hektar Asset Management Sdn Bhd • Republic Polytechnic (Member of the Board of Governors) Major appointments (other than directorships) • Chief Executive Officer, Frasers Centrepoint Commercial, Frasers Centrepoint Limited • Chief Executive Officer, Greater China, Frasers Centrepoint Limited past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Gemdale Properties and Investment Corporation Limited (formerly known as Frasers Property (China) Limited) others • Mr Tang was the Chief Executive Officer of Frasers Centrepoint Asset Management Ltd., the Manager of Frasers Centrepoint Trust, from july 2006 to Feb 2010. He had previously worked with DBS Bank, DBS Land and British Petroleum 16 fRAsERs cENTREPOiNT TRUsT bOARD Of DiREcTORs Mr LiM ee seng AGe 62 Mr anthony Cheong Fook seng AGe 59 Non-Executive Director Non-Executive Director Date of appointment as Director : 27 January 2006 Date of appointment as Director : 27 February 2006 length of service as Director (as at 30 September 2013) : 7 years 8 months length of service as Director (as at 30 September 2013) : 7 years 8 months board committees served on: • Former Chairman of the Board from 1 July 2008 to 23 April 2009 board committee served on: • Audit Committee (Member) academic & professional qualifications: • Bachelor of Engineering (Civil Engineering), University of Singapore • Master of Science (Project Management), National University of Singapore • Fellow, Singapore Institute of Directors • Member, The Institution of Engineers Singapore academic & professional qualifications: • Member, Institute of Chartered Accountants in England & Wales • Member, Institute of Singapore Chartered Accountants present directorships (as at 30 september 2013) listed companies • Fraser & Neave Holdings Bhd present directorships (as at 30 september 2013) listed companies • Nil Others • Fraser and Neave Group and Frasers Centrepoint Group companies Others • Frasers Centrepoint Asset Management (Commercial) Limited Major appointments (other than directorships) • Group Company Secretary of the Fraser and Neave Group Major appointments (other than directorships) • Group Chief Executive Officer, Frasers Centrepoint Limited • 2nd Vice-President, Real Estate Development Association of Singapore past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Gemdale Properties and Investment Corporation Limited (formerly known as Frasers Property (China) Limited) past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Gemdale Properties and Investment Corporation Limited others • Nil (formerly known as Frasers Property (China) Limited) others • Awarded Public Service Medal, Singapore • Former Board member of the Building and Construction Authority of Singapore (2005 to 2009) • Former Council member of the Singapore Chinese Chamber of Commerce and Industry (2000 to 2004) • Previously Managing Director of MCL Land Limited (1996 to 2004) • Previously General Manager of the property division of First Capital Corporation Limited ANNUAL REPORT 2013 17 Mr bobby Chin yoke Choong AGe 62 Mr soh kiM soon AGe 67 independent Non-Executive Director independent Non-Executive Director Date of appointment as Director : 3 April 2006 Date of appointment as Director : 23 march 2006 length of service as Director (as at 30 September 2013) : 7 years 6 months length of service as Director (as at 30 September 2013) : 7 years 6 months board committee served on: • Audit Committee (Chairman) board committee served on: • Audit Committee (Member) academic & professional qualifications: • Bachelor of Arts (Honours), University of Singapore • Associate, Chartered Institute of Bankers present directorships (as at 30 september 2013) listed companies • EnGro Corporation Limited Others • ORIX Investment and Management Private Limited • ORIX Leasing Singapore Limited Major appointments (other than directorships) • Chairman of ORIX Investment and Management Private Limited past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Nil others • Previously Senior Managing Director of DBS Bank academic & professional qualifications: • Bachelor of Accountancy, University of Singapore • Fellow Chartered Accountant of Singapore of the Institute of Singapore Chartered Accountants • Associate member, Institute of Chartered Accountants in England and Wales present directorships (as at 30 september 2013) listed companies • AV Jennings Limited • Ho Bee Land Limited • Oversea-Chinese Banking Corporation Limited • Sembcorp Industries Limited • Singapore Telecommunications Limited • Yeo Hiap Seng Limited Others • NTUC Enterprise Co-operative Limited (Deputy Chairman) • NTUC Fairprice Co-operative Limited • Singapore Labour Foundation • Singapore Power Limited Major appointments (other than directorships) • Council of Presidential Advisers (Member) past directorships in listed companies held over the preceding 3 years (from 1 october 2010 to 30 september 2013) • Neptune Orient Lines Limited others • Former Managing Partner of KPMG Singapore • Former Board member of Urban Redevelopment Authority (URA) from 1997 to 2006, and its Chairman from 2001 to 2006 • Former Chairman of Singapore Totalisator Board from 2006 to 2012 18 fRAsERs cENTREPOiNT TRUsT TRUsT mANAgEmENT TEAm from left to right: Mr alex Chia Ms tay hwee pio Mr Chen Fung Leng dr Chew tuan Chiong Ms Lim poh tin ANNUAL REPORT 2013 19 dr Chew tUan Chiong chief Executive Officer & Executive Director Please refer to Dr Chew’s biography in the section on ‘Board of Directors’ Mr aLex Chia head, investment Alex leads the investment team that is responsible for the expansion of FCT’s asset portfolio with the objective of ensuring optimum investment returns. Alex has over 8 years of business development experience in serviced residence industry covering the Pan Asia market. He also has more than 5 years of retail experience in areas of operations and project planning. Alex holds a Bachelor Degree in Business Administration from National University of Singapore and an MBA from University of Hull, United Kingdom. Ms LiM poh tin general manager and head, Asset management Poh Tin’s responsibilities include formulating business and asset enhancement plans in relation to FCT’s properties with short, medium and long-term objectives. This involves working together with the Property Manager to ensure that the property business plans are executed diligently. Poh Tin has more than 25 years of experience in real estate asset and property management. She holds Diplomas in Building Maintenance and Management from Ngee Ann Technical College and Management Studies from Singapore Institute of Management. She obtained her Bachelor of Science (Honours) degree in Real Estate Management from Oxford Brookes University. Ms tay hwee pio financial controller Hwee Pio is responsible for the financial, taxation, treasury and compliance functions of Frasers Centrepoint Trust. She has over 20 years of financial experience in the real estate industry. Prior to joining FCT, Hwee Pio was based in Shanghai for 10 years, of which she was the financial controller for Frasers Centrepoint Limited’s business operations in China since year 2006. Before joining Frasers Centrepoint Limited, Hwee Pio held financial positions at Keppel Land, Guocoland and KPMG. Hwee Pio is a Singapore Chartered Accountant (CA) with the Institute of Singapore Chartered Accountants and she is a Fellow with the Association of Chartered Certified Accountants. Mr Chen FUng Leng head, investor Relations and Research Fung Leng is responsible for FCT’s investor relations function, he covers investor targeting, media and unitholder communication, as well as to provide market intelligence and research support to management. Fung Leng holds a Master of Science degree in Industrial and Systems Engineering and a Bachelor’s degree in Mechanical Engineering (Honours), both degrees from the National University of Singapore. 20 fRAsERs cENTREPOiNT TRUsT PROPERTy mANAgEmENT TEAm from left to right: Mr edmund tan Mr Chia shee Liang Ms Jill ng Ms see san san Mr Chia shee Liang general manager Ms JiLL ng head, Advertising & Promotions Shee Liang, who has more than 20 years of experience in the real estate sector, leads the Property Management team in managing the portfolio of retail properties at Frasers Centrepoint Commercial, Frasers Centrepoint Limited (FCL). Shee Liang spent 17 years working overseas in China, Hong Kong, Taipei and Indonesia, specialising in retail management and consultancies. Prior to joining FCL, Shee Liang was head of Property Management with Savills, Singapore. He has extensive hands on experience in leading and coordinating shopping centres and mixed development that comprises retail, residential, hotel and office, from conceptual planning stage to pre and post operational stages of the development process. The sizes of projects ranged from 50,000 to 200,000 square metres. Shee Liang obtained his B.Sc (Estate Management) from National University of Singapore. Ms see san san head, Leasing San San heads the leasing function across ten malls in the Frasers Centrepoint Limited Group and she has 26 years of work experience. Prior to this, San San was Assistant General Manager of Marina Centre Holdings (MCH) where she was responsible for marketing/leasing the shopping mall, leisure-plex and office block at Marina Square, Singapore’s third largest shopping mall. Prior to joining MCH, San San gained extensive marketing and management experience in the retail, industrial and residential sector working for jones Lang Wootton, Colliers jardine, and Colliers Goh & Tan. San San holds a Bachelor Degree in Estate Management from the National University of Singapore and a graduate diploma in marketing from the Marketing Institute of Singapore. jill has 14 years of experience in sales and marketing in the field of information technology, event management and mall management. Prior to joining Frasers Centrepoint Limited, she was part of the development marketing team for a greenfield retail mall. She also led Marketing Communications at Singapore’s largest suburban mall where she spearheaded branding, loyalty, service excellence and promotions. jill has a Degree in Business Administration from Macquarie University and a Diploma in Hospitality Management from Temasek Polytechnic. Mr edMUnd tan head, Retail Design management Edmund leads the retail designs function, responsible for the review and approval of shop front designs and layouts across 10 Frasers Centrepoint malls. He develops and implements retail design guidelines to maintain standards and quality in tenancy designs. He is also involved in asset enhancement initiatives, design and feasibility studies to continuously improve the standards of both interior and tenancy designs in the malls. Prior to joining Frasers Centrepoint Limited, Edmund has 11 years of working experience in design conceptualisation, space planning and project management in retail, corporate office and hospitality sectors in Singapore and in overseas. He holds a Diploma in Interior Design from the LaSalle-SIA, College of the Arts. ANNUAL REPORT 2013 21 cOmmUNiTy ENgAgEmENT Children enjoying themselves at the play area at Causeway Point. Dr Teo Ho Pin (Left), Mayor of North West District, receiving the $30,000 cheque for the ‘North West Silver Care Fund @ Causeway Point’, from Mr Philip Eng (Right), Chairman of Frasers Centrepoint Asset Management. Making oUr MaLLs FaMiLy-FriendLy destinations We strive to establish our malls as family-friendly destinations that support a wide variety of communal events and services that cater to families and the community. We frequently organize or support the hosting of communal events at our malls that promote healthy communal interaction and family bonding. Our mall management also works closely with local community organizations and government agencies to facilitate the organization of social events such as children’s art and craft activities, charity drives, community exhibitions as well as initiatives to promote family-friendly practices. Many of our malls are equipped with pro-family and elderly-friendly amenities, such as children’s play area, nursing rooms, wheelchair ramps and family parking spaces. These amenities help to make the shopping experience at our malls more enjoyable for all. Four of our malls were awarded the “We Welcome Families” Achiever Award by Businesses for Families Council, which recognises commendable family-friendly practices at business establishments. ContribUting baCk to the CoMMUnity In conjunction with the 15th anniversary and re-launch of Causeway Point in july 2013, we launched the ‘North West Silver Care Fund @ Causeway Point’ with an initial sum of S$30,000. This fund aims to support the programmes administered by the North West CDC to promote active and healthy living of our silver community in the North West District. In conjunction with the launch of the fund, Causeway Point also lined up several programmes such as the ‘Walk & Shop Reward Card Game’ and a Shoppers give-back Programme. All proceeds from these programmes went into supporting the ‘North West Silver Care Fund @ Causeway Point’. We launched the North West Silver Care fund @ Causeway Point to support active and healthy living of our silver community in the North West district. OPERATiONs & fiNANciAL REviEW 23 Operations & Financial Review 29 Capital Resources 31 Risk Management 32 Market Overview ANNUAL REPORT 2013 23 OPERATiONs & fiNANciAL REviEW operations review leAse renewAls in Fy2013 During the year under review, a total of 170 leases, which accounted for 146,864 square feet or 16.7% of FCT’s total net lettable area (‘‘NlA”), were renewed with 7.7% average rental reversion. Rental reversion refers to the difference in average rental rate between the renewed leases and the preceding expired leases which were typically contracted 3 years ago. All malls, with the exception of Bedok Point, recorded positive rental reversions of between 7.6% and 10.9% for the year. The average occupancy cost1 for the portfolio stood at 16% for the 11-month period between October 2012 and August 2013. This is relatively unchanged from the same period in the previous year. sUMMary oF Lease renewaLs FroM 1 oCtober 2012 to 30 septeMber 2013 Property Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint FCT Portfolio Number of lease renewals Aggregate NLA of renewed leases (sq ft) Renewed NLA as percentage of property’s NLA Average rental reversion increase/(Decrease) 39 59 16 35 21 170 33,929 58,504 5,817 28,856 19,758 146,864 8.1% 24.8% 7.1% 39.2% 27.6% 16.7% 7.6% 8.9% (14.5)% 10.9% 9.7% 7.7% leAse exPiry ProFile The lease expiry profiles for FCT portfolio and for the respective malls from FY2014 to FY2018 are presented in the tables below. Our leases have average lease duration of 3 years. Some key or anchor tenants are offered longer tenure. The lease expiry profile is relatively well-staggered with leases accounting for 32.1% and 39.0% of FCT’s Gross Rental Income (“GRI”) due for renewals in FY2014 and FY2015, respectively. The aggregate NLA of the leases in FCT portfolio which are due for renewal in FY2014 is 264,053 square feet. Causeway Point and Northpoint, the two largest malls in FCT portfolio, account for 189,426 square feet or 72% of the total NLA due for renewals in FY2014. As at 30 September 2013, the weighted average lease expiry of FCT portfolio stood at 1.56 years by NLA, and 1.49 years by GRI. Lease expiry proFiLes oF FCt portFoLio and by property as at 30 septeMber 2013 fcT Portfolio fy2016 fy2015 fy2014 fy2017 Number of Leases expiring NLA of expiring leases as % of the portfolio’s NLA Total NLA of expiring leases (square feet) GRI of expiring leases as % of the portfolio’s GRI 219 30.5% 264,053 32.1% 232 37.4% 323,718 39.0% 130 22.8% 197,132 22.5% 19 4.5% 38,697 4.8% fy2018 2 4.8% 41,646 1.6% causeway Point fy2014 fy2015 fy2016 fy2017 fy2018 NLA of expiring leases as % of the mall’s NLA Expiries as % mall’s total NLA Total NLA of expiring leases (square feet) GRI of expiring leases as % of the mall’s GRI 81 36.6% 151,685 39.0% 78 25.3% 104,904 32.0% 54 26.0% 107,790 23.3% 7 2.0% 8,427 2.2% 2 10.0% 41,646 3.4% 1 Occupancy cost is defined as a ratio of the rental payable (inclusive of base rent, service charge, advertising & promotional charge and gross turnover rent) to tenants’ sales. 24 fRAsERs cENTREPOiNT TRUsT OPERATiONs & fiNANciAL REviEW Northpoint fy2014 fy2015 fy2016 fy2017 fy2018 NLA of expiring leases as % of the mall’s NLA Expiries as % mall’s total NLA Total NLA of expiring leases (square feet) GRI of expiring leases as % of the mall’s GRI 43 16.1% 37,741 17.9% 81 57.8% 135,503 50.2% 45 20.8% 48,717 25.0% 6 5.3% 12,452 6.9% - 0.0% - 0.0% bedok Point fy2014 fy2015 fy2016 fy2017 fy2018 NLA of expiring leases as % of the mall’s NLA Expiries as % mall’s total NLA Total NLA of expiring leases (square feet) GRI of expiring leases as % of the mall’s GRI 48 56.0% 44,092 60.7% 14 28.1% 22,153 25.3% 6 14.1% 11,063 11.3% 1 1.8% 1,424 2.7% - 0.0% - 0.0% yewTee Point fy2014 fy2015 fy2016 fy2017 fy2018 NLA of expiring leases as % of the mall’s NLA Expiries as % mall’s total NLA Total NLA of expiring leases (square feet) GRI of expiring leases as % of the mall’s GRI 20 13.9% 9,504 15.8% 41 55.5% 37,912 56.7% 8 13.4% 9,159 13.6% 4 17.1% 11,690 13.9% - 0.0% - 0.0% Anchorpoint fy2014 fy2015 fy2016 fy2017 fy2018 NLA of expiring leases as % of the mall’s NLA Expiries as % mall’s total NLA Total NLA of expiring leases (square feet) GRI of expiring leases as % of the mall’s GRI 27 30.3% 21,031 37.2% 18 33.5% 23,246 28.4% 17 29.4% 20,403 29.9% 1 6.8% 4,704 4.5% - 0.0% - 0.0% leAses with Gross turnover rent AnD steP-uP clAuses Nearly all our leases include step-up clause which stipulates annual increase to the base rent during the lease term. In addition, 94% of the occupied leases include Gross Turnover rent1 (“GTO”) clause. The aggregate GTO as a percentage of FCT’s gross revenue was approximately 5% for the year under review, this is unchanged from FY2012. perCentage oF oCCUpied Leases with gto and step-Up CLaUses With GTO clause With step-up clause mAll occuPAncy fy2013 94.0% 99.2% fy2012 94.0% 98.7% change No change 0.5%-point Average portfolio occupancy as at 30 September 2013 stood at 98.4%, which was 4.8%-point higher than a year ago. The better occupancy was attributed to the 11.8%-point improvement in occupancy at Causeway Point after the full completion of the refurbishment works at the mall. Occupancy at Northpoint remained healthy in the year under review while occupancy of the smaller malls saw higher volatility due to fitting-out period of new tenants and vacancies. oCCUpanCy by property Property Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint Total FCT portfolio As at 30 september 2013 As at 30 september 2012 increase/(Decrease) 99.5% 99.3% 96.7% 92.7% 96.9% 98.4% 87.7% 99.7% 98.7% 96.3% 99.3% 93.6% 11.8%-point (0.4)%-point (2.0)%-point (3.6)%-point (2.4)%-point 4.8%-point 1 Gross Turnover rent: Rent which is a percentage of the tenant’s sales. ANNUAL REPORT 2013 25 shoPPer trAFFic The total shopper traffic in FY2013 was 87.5 million, or an average of 7.3 million per month. This is 3.1% higher than the same period last year. Causeway Point recorded 13% year-on-year improvement in shopper traffic to 23.4 million, after the full completion of the refurbishment works in December 2012. Northpoint remained the most-visited mall in FCT’s portfolio with total shopper traffic of 41.7 million, or nearly 3.5 million per month. The shopper traffic at YewTee Point and Anchorpoint remained relatively stable but Bedok Point saw a 17.5% decline in shopper traffic during the year. shopper traFFiC by property (million) Property fy2013 fy2012 increase/(Decrease) Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint Total FCT portfolio trADe sector AnAlysis 23.4 41.7 6.6 11.8 4.0 87.5 20.7 40.8 8.0 11.5 3.9 84.9 13.0% 2.2% (17.5)% 2.6% 2.6% 3.1% FCT’s diversified portfolio comprises 11 major trade sectors of which Food & Restaurants and Fashion were the dominant trade sectors. Food & Restaurants accounted for 28.4% of FCT’s total NLA as at 30 September 2013, compared to 25.6% a year ago. This was mainly due to the opening of new restaurants and food court at Causeway Point in january 2013 after the completion of the mall’s refurbishment. Correspondingly, the GRI contribution from Food & Restaurants has also increased to 32.2% of FCT’s total GRI as at 30 September 2013, from 31.0% a year ago. Fashion trade accounted for 23.3% of FCT’s GRI as at 30 September 2013, a slight decrease compared to 24.6% a year ago. The percentage contributions in terms of NLA and GRI of other trade sectors have also remained relatively stable compared to a year ago. as % oF FCt’s net LettabLe area 10 11 12 9 8 7 6 5 4 3 2 as % oF FCt’s gross rentaL inCoMe 9 10 11 8 7 6 5 4 3 2 1 1 TRADE cLAssificATiONs Food & Restaurants 1 Fashion 2 Services/Education 3 Household 4 Supermarket 5 Department Store 6 Leisure/Entertainment 7 Beauty, Hair, Cosmetics, Personal Care 8 Books, Music, Art & Craft, Hobbies 9 10 Healthcare 11 12 Sports Apparels & Equipment Vacant TOTAl TRADE cLAssificATiONs Food & Restaurants 1 Fashion 2 Services/Education 3 Beauty, Hair, Cosmetics, Personal Care 4 Household 5 Supermarket 6 Healthcare 7 Books, Music, Art & Craft, Hobbies 8 Department Store 9 Leisure/Entertainment 10 Sports Apparels & Equipment 11 TOTAl % 28.4% 15.3% 9.1% 8.8% 8.2% 6.8% 6.8% 6.2% 4.5% 2.5% 1.8% 1.6% 100.0% % 32.2% 23.3% 8.6% 8.2% 7.6% 4.3% 4.0% 3.7% 3.2% 2.7% 2.2% 100.0% 26 fRAsERs cENTREPOiNT TRUsT OPERATiONs & fiNANciAL REviEW toP 10 tenAnts by Gross rentAl income (Gri) The top ten largest tenants in FCT’s portfolio collectively accounted for 22.1% of the total GRI as at 30 September 2013 (30 September 2012: 22.6%). Our largest tenant, Cold Storage Singapore (1983) Pte Ltd, the operator of Cold Storage supermarkets, the Guardian Pharmacy and 7-Eleven stores in FCT malls, accounted for 4.7% of the portfolio GRI in FY2013. top 10 tenants by gross rentaL inCoMe as at 30 septeMber 2013 Tenant Trade sector Cold Storage Singapore (1983) Pte Ltd1 Metro (Private) Limited2 Courts (Singapore) Limited Copitiam Pte Ltd3 Food Republic Pte Ltd NTUC Fairprice Co-operative Ltd4 Watson's Personal Care Stores Pte Ltd Aspial Corporation Ltd5 McDonald's Restaurants Pte Ltd G2000 Apparel (S) Pte Ltd TOTAl (Top 10) Supermarket Departmental Store Household Food & Restaurants Food & Restaurants Supermarket Beauty, Hair, Cosmetics, Personal Care Fashion Food & Restaurants Fashion comPletion oF the Asset enhAncement initiAtive (Aei) At cAusewAy Point gRi % 4.7% 3.2% 3.0% 2.0% 1.9% 1.6% 1.5% 1.5% 1.4% 1.3% 22.1% 1 2 Includes the leases for Cold Storage supermarkets, Guardian Pharmacy and 7-Eleven stores Includes the leases for Metro departmental store and Clinique Service Centre 3 Operator of the Kopitiam food courts 4 5 Includes leases for NTUC Fairprice and NTUC Healthcare (Unity) Include leases for Lee Hwa jewellery, CITIGEMS, Goldheart jewellery and Maxi- Cash The AEI at Causeway Point was fully completed in December 2012 on schedule. This was the third mall enhancement project for FCT, after the AEI at Anchorpoint in 2007 and at Northpoint in 2009. The commencement of the AEI at Causeway Point was announced in july 2010 and it was implemented in phases over a 30-month period. The AEI at Causeway Point delivered return of investment (“ROI”) of 17%, higher than the projected ROI of 13%. The average rent of the mall increased 32% from $10.20 per square foot per month before the AEI to $13.52 per square foot per month after post-AEI, as the mall enjoyed higher rental rates for new and renewed leases. Net property income increased 29% from $42.2 million before the AEI to $54.5 million (FY2013). The AEI had also delivered cumulative increase of $276 million in valuation between FY2010 and FY2013. The valuation of Causeway Point was $1,006 million as at 30 September 2013, compared to $730 million as at 30 September 2010. Causeway Point was awarded the Platinum GreenMark rating by the Building and Construction Authority for its efforts to improve energy efficiency and to reduce its carbon footprint. FinanCiaL review PerFormAnce comPArison between Fy2013 AnD Fy2012 FY2013 gross revenue grew 7.3% to $158.0 million on higher contributions from Causeway Point and Northpoint, due to better rental rates achieved for new and renewed leases during the year. Property expenses for the year under review was $46.4 million, an increase of $3.6 million or 8.4% compared with the same period last year. The increase in property expenses was mainly due to higher property tax, other property expenses and property manager’s fee arising from the improvement in revenue and net property income (“NPI”). FY2013 NPI was $111.6 million, which was $7.2 million or 6.9% higher compared with the same period last year. The total distribution to unitholders for FY2013 was $90.1 million, an increase of 9.5% compared to FY2012. Distribution per unit for FY2013 grew 9.2% year-on-year to a new-high of 10.93 cents. ANNUAL REPORT 2013 27 FinanCiaL highLights ($’000) financial year ended 30 september Gross rent Other revenue Gross revenue Property expenses Net property income distribUtion stateMents ($’000) financial year ended 30 september Net Income Net tax adjustments Distribution from Associate Income available for distribution Distribution to unitholders distribUtion per Unit (cents) financial year ended 30 september First quarter (1 Oct – 31 Dec) Second quarter (1 jan – 31 Mar) Third quarter (1 Apr – 30 jun) Fourth quarter (1 jul – 30 Sep) Full Year (1 Oct – 30 Sep) fy2013 fy2012 increase/(Decrease) 140,329 17,630 157,959 (46,369) 111,590 131,280 15,923 147,203 (42,773) 104,430 6.9% 10.7% 7.3% 8.4% 6.9% fy2013 fy2012 increase/(Decrease) 80,916 4,772 4,443 90,131 90,131 74,040 4,435 3,873 82,348 82,348 9.3% 7.6% 14.7% 9.5% 9.5% fy2013 fy2012 increase / (Decrease) 2.40 2.70 2.85 2.98 10.93 2.20 2.50 2.60 2.71 10.01 9.1% 8.0% 9.6% 10.0% 9.2% totAl Assets AnD net Asset vAlue Per unit As at 30 September 2013, the total assets of FCT stood at $2.13 billion, an increase of 10.9% from $1.92 billion a year ago. This resulted from the recognition of $195.7 million of net surplus on revaluation of FCT’s properties. All five properties recorded higher values in the valuations conducted by independent valuers on 30 September 2013. FCT’s net assets as at 30 September 2013 stood at $1.46 billion, an increase of $199.3 million compared to a year ago. Correspondingly, the net asset value (“NAV”) per unit of FCT increased 15.7% to $1.77 from $1.53 a year ago. net asset vaLUe per Unit As at NAV per unit a computed based on 824,704,435 Units b computed based on 823,522,544 Units appraised vaLUe oF properties* Property Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint Total Adjustments2 Net Revaluation surplus 30 sep 2013 30 sep 2012 increase/(Decrease) $1.77a $1.53b 15.7% valuation @ 30.09.2013 ($ million) book value @ 30.09.2013 ($ million) Revaluation surplus ($ million) 1,006.0 638.0 128.5 161.0 86.0 2,019.5 898.7 570.0 128.0 147.0 81.0 1,824.7 107.3 68.0 0.5 14.0 5.0 194.7 1.0 195.7 capitalisation Rate1 2013 5.35% 5.25% 5.50% 5.60% 5.45% 2012 5.50% 5.50% 5.75% 5.75% 5.60% * The properties were valued by one of Knight Frank Pte Ltd, Colliers International Consultancy & Valuation (Singapore) Pte Ltd or jones Lang LaSalle Property Consultants Pte Ltd, at $2.02 billion on 30 Sep 2013. Valuation methods used include: capitalisation approach, discounted cash flows method and direct comparison approach in determining the fair values of the properties. Annual valuations are required by the Code on Collective Investment Schemes. 1 Capitalisation rates as adopted by the independent valuers to derive the market values of each property. 2 FRS adjustments relating to amortisation of rental incentives. 28 fRAsERs cENTREPOiNT TRUsT OPERATiONs & fiNANciAL REviEW FinAnciAl PerFormAnce review by ProPerty gross revenUe by property ($’000) Properties fy2013 fy2012 increase/(Decrease) Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint Total FCT 75,128 48,804 12,242 13,156 8,629 157,959 66,507 46,669 12,464 13,124 8,439 147,203 13.0% 4.6% (1.8%) 0.2% 2.3% 7.3% Causeway Point registered 13% growth in revenue for FY2013, the highest among the five malls. The growth was driven by higher mall occupancy after the completion of the refurbishment of the mall and higher rental rates achieved for both new and renewed leases signed during the year. As Causeway Point accounted for nearly half of FCT’s total revenue, it was the main contributor to the 7.3% revenue growth of the portfolio. Northpoint recorded a revenue growth of 4.6%, mainly from improved rental rates from new and renewed leases signed during the year. Revenue performance for YewTee Point and Anchorpoint was comparable to FY2012. Bedok Point achieved lower revenue in FY2013 due to lower average rental rates achieved for lease renewals signed during the year. property expenses by property ($’000) Properties fy2013 fy2012 increase/(Decrease) Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint Total FCT 20,595 13,461 4,877 3,485 3,951 46,369 17,923 13,307 4,419 3,496 3,628 42,773 14.9% 1.2% 10.4% (0.3%) 8.9% 8.4% The property expenses of Causeway Point increased $2.7 million or 15% year-on-year. It was also the main contributor to the $3.6 million or 8.4% increase in the overall portfolio’s property expenses for the year under review. The sharp increase in the property expenses of Causeway Point was mainly attributed to higher property tax, which included one-time tax payments backdated to FY2010 to FY2012, following the most recent assessment by the Inland Revenue Authority of Singapore. Bedok Point saw a 10% increase in property expenses and this was due to higher property tax and maintenance expenses. For Anchorpoint, the increase of 9% in property expenses was attributed increase in repair and maintenance expenses as well as higher salary and marketing expenses. net property inCoMe by property ($’000) Properties fy2013 fy2012 increase/(Decrease) Causeway Point Northpoint Bedok Point YewTee Point Anchorpoint Total FCT 54,533 35,343 7,365 9,671 4,678 111,590 48,584 33,362 8,045 9,628 4,811 104,430 12.2% 5.9% (8.5%) 0.4% (2.8%) 6.9% Both Causeway Point and Northpoint registered healthy NPI growth of 12% and 6%, respectively, in FY2013. The NPI performance for Bedok Point, YewTee Point and Anchorpoint was mixed. Bedok Point recorded a decline of 8.5% in NPI due to a combination of lower gross revenue and higher expenses in FY2013, compared to the same period a year ago. ANNUAL REPORT 2013 29 cAPiTAL REsOURcEs overview Frasers Centrepoint Asset Management (“FCAm”), as Manager of Frasers Centrepoint Trust (“FCT”), continues to maintain a prudent financial structure and adequate financial flexibility to ensure that it has access to capital resources at competitive cost. FCAM proactively manages FCT’s cash flows, financial position, debt maturity profile, cost of funds, interest rates exposure and overall liquidity position. FCAM monitors and maintains a level of cash and cash equivalents deemed adequate by management to meet its operational needs. It also maintains an amount of available banking facilities deemed sufficient by management with several reputable banks to ensure FCT has access to diversified sources of bank borrowings. soUrCes oF FUnding FCT relies on the debt capital and syndicated loans markets, equity market and bilateral bank facilities for its funding needs. FCAM maintains active relationship with several reputable banks which are located in Singapore. The principal bankers of FCT are DBS Bank Ltd, Oversea-Chinese Banking Corporation and Standard Chartered Bank. As at 30 September 2013, FCT has a total capacity of $1,364 million from its sources of funding, of which $589 million or 43.2% has been utilised. The following table summarises the capacity and the amount utilised for each of the sources of funding: sources of funding Type capacity Utilised %Untilised Revolving credit facility Medium Term Note Programme^ Bank borrowings Total Unsecured Unsecured Secured $30 million $1,000 million $334 million $1,364 million Nil $255 million $334 million $589 million 0.0% 25.5% 100.0% 43.2% ^ On 14 August 2013, FCT increased the maximum aggregate principal amount of notes under its multicurrency Medium Term Note Programme from S$$500 million to S$1 billion. Credit ratings FCT has corporate credit ratings from Standard & Poor’s Rating Services (“S&P”) and Moody’s Investors Service (“moody’s”). S&P has given FCT a corporate rating of “BBB+” with a stable outlook and Moody’s has given FCT a corporate credit rating of “Baa1” with a stable outlook. In addition, S&P has also given a “BBB+” credit rating for FCT’s multicurrency Medium Term Notes Programme (“mTN Programme”). debt proFiLe The Manager, on 21 january 2013, issued S$70 million 3.00% Medium Term Notes (“Notes”) due 2020 under FCT’s existing MTN programme. Part of the proceeds from this issue was utilised to retire the S$55 million 2.83% Notes which matured on 8 February 2013, while the remaining of the proceeds was utilised to finance the investments of FCT, asset enhancement works initiated by FCT and general working capital purposes of FCT. FCT’s total gross borrowings stood at S$589 million at 30 September 2013, of which $60 million of borrowing (about 10% of total borrowing) will mature in the next 12 months. The total borrowings comprised $334 million in secured bank borrowings and $255 million in unsecured Notes. FCT’s gearing stood at 27.6% as at 30 September 2013. The interest cover for the year ended September 2013 was 6.15 times. The weighted average debt maturity was 2.85 years as at 30 September 2013. 30 fRAsERs cENTREPOiNT TRUsT cAPiTAL REsOURcEs highLights financial year ended 30 september Total Borrowings Gearing1 Interest Cover Average Cost of Borrowing 2013 2012 $589 million 27.6% 6.15 times 2.73% $577 million 30.1% 5.56 times 2.71% 1 Calculated as the ratio of total outstanding borrowings to the total assets as at the stated balance sheet date. debt MatUrity proFiLe (as at 30 september 2013) Timeframe < 1 year 1-2 years 2-4 years > 4 years Total Borrowings $589 million Amount Due (s$ million) As % of total borrowings 60.0 95.0 364.0 70.0 589.0 10.2% 16.1% 61.8% 11.9% 100.0% $364 million (61.8% of total debt) $95 million (16.1% of total debt) $60 million (10.2% of total debt) $70 million (11.9% of total debt) TOTAl DeBT < 1 YEAR 1-2 YEARS 2-4 YEARS > 4 YEARS ANNUAL REPORT 2013 31 Risk mANAgEmENT Effective risk management is a fundamental part of FCT’s business strategy. Key risks, mitigating measures and management actions are continually identified, reviewed and monitored by management as part of FCAM’s enterprise-wide risk management (“eRm”) framework. Recognising and managing risks are central to the business and to protecting unitholders’ interests. risk ManageMent FraMework ERM reporting is facilitated through a web-based Corporate Risk Scorecard system which enables the reporting of risks and risk status using a common platform in a consistent and cohesive manner. Risks are reported and monitored at the operational level using a Risk Scorecard which captures risks, mitigating measures, timeline for action items and risk ratings. Where applicable, Key Risk Indicators (“KRIs”) are established to monitor risks. For risks that are material, the mitigating measures and KRIs are presented in the form of a Key Risk Dashboard and reviewed by the Management and Audit Committee on a regular basis. Risk tolerance statements setting out the nature and extent of significant risks which FCAM is willing to take in achieving its strategic objectives have been formalised and adopted. risk Update Formal risk reviews take place half yearly and the scorecard is updated regularly. On a half yearly basis, ERM validations are held where the Management of FCAM provides assurance to the Audit Committee, that key risks have been identified and the mitigating measures are adequate, and the system of risk management is adequate and effective to address risks in certain key areas which are considered relevant and material to the operations. FCAM also seeks to benchmark its ERM programme against industry best practices and standards. In assessing areas for improvement and how the ERM processes and practices can be strengthened, reference was made to the best practices in risk management set out in the Risk Governance Guidance for Listed Boards issued by the Corporate Governance Council in May 2012. As every staff has a role to play in risk management, ERM and business continuity plans (“BCPs”) awareness briefings are conducted for new staff. Refresher sessions are also held to update staff on relevant developments in the area of ERM and BCPs, where required. key risks in FinanCiaL year 2012/2013 Operational Risks FCAM has established and strictly adheres to a set of standard operating procedures designed to identify monitor, report and manage the operational risks associated with the day-to-day management and maintenance of FCT malls. These procedures and guidelines are regularly reviewed and benchmarked against industry best practices to ensure relevance and effectiveness. Insurances are also in place to mitigate losses resulting from unforeseen events. BCPs are regularly tested for their effectiveness. human capital Risk FCAM has in place a career planning and development system and conducts regular remuneration and benefits benchmarking to attract and retain appropriate talent for the business. Liquidity Risks In managing FCT, FCAM adheres closely to the covenants in the loan agreements and property fund guidelines in the Code of Collective Investment Schemes issued by the Monetary Authority of Singapore. In addition, there is close monitoring by FCAM of FCT’s cash flow position and requirements so as to ensure sufficient liquidity reserves to finance its operations and meet any short-term obligations. investment Risks As FCT grows its investment portfolio via the acquisition of new properties and other forms of permitted investments, all investment opportunities are subject to a disciplined and rigorous appraisal process. All investment proposals are evaluated based on a comprehensive set of investment criteria including alignment with FCT’s investment mandate, asset quality, expected returns, sustainability of asset performance and future growth potential, and having due regard to market conditions and outlook. interest Rate Risk Interest rate risk is managed by FCAM on an on-going basis with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates. For a major portion of FCT’s outstanding borrowings, FCAM adopts a policy of hedging the floating-rate loans to fixed-rates through interest rate swaps. credit Risk FCAM has established credit limits for tenants and monitors their debt levels on an ongoing basis. Credit evaluations are performed before lease agreements are entered into with tenants. Credit risk is also mitigated by collecting rental deposits from the tenants. Cash and fixed deposits are placed with regulated financial institutions. compliance Risk FCT is subject to relevant laws and regulations including the Listing Manual of the Singapore Exchange Securities Trading Limited, the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore and the tax rulings issued by the Inland Revenue Authority of Singapore with regard to the taxation of FCT and its Unitholders. Any changes to these regulations may affect FCT’s operations and results. FCAM has in place policies and procedures to facilitate compliance with applicable laws and regulations. Management keeps abreast of latest developments in relevant laws and regulations through training and attending talks and briefings. 32 fRAsERs cENTREPOiNT TRUsT mARkET OvERviEW overview oF the suburbAn retAil sector sUppLy and deMand The suburban retail space, which constitutes about 44% of the existing retail stock, will contribute a substantial portion of the retail space supply between 2013 and 2016 (see chart). The expected suburban retail space to be added between 2013 and 2016 is about 3.78 million square feet, more than half of which are attributed to major retail developments such as jEM and Westgate in the jurong Gateway region. In 2014, about 1.5 million square feet of retail space will be added to the suburban space when new malls including Bedok Mall (262k sq ft), Sports Hub (370k sq ft), Waterway Point (365k sq ft) and OneKM (210k sq ft) open. For 2015, the retail developments due to open include Promenade@Pelikat (58k sq ft) and Alexandra Central (48k sq ft). The demand in the suburban space is expected to be support by strong leasing activity in the suburban space. jEM has reported near-full occupancy while reported pre-commitment level at Bedok Mall (due to open in December 2013) was more than 95% from both local and international retailers. The strong leasing interest can be attributed to rising household income and increasing population in the suburban regions. These positive factors are expected to support the absorption of the new supply over time. retaiL rentaL The retail rent of both the grade A and grade B suburban malls have remained stable at about $28.2 and $14.4, respectively, on a per square foot per month basis. Despite the significant addition of new retail space in the suburban sector in 2013-2014, rents are expected to remain resilient. proJeCted sUppLy oF retaiL spaCe by LoCation* Future Supply (million sq ft) 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 2013 2014 2015 2016 2017 Primary Secondary Suburban retaiL rentaL vaLUe - sUbUrban shopping area (Prime Level)* Av $ per sq ft per mth (gross) 30.00 25.00 20.00 15.00 10.00 5.00 7 0 Q 3 7 0 Q 4 8 0 Q 1 8 0 Q 2 8 0 Q 3 8 0 Q 4 9 0 Q 1 9 0 Q 2 9 0 Q 3 9 0 Q 4 0 1 Q 1 0 1 Q 2 0 1 Q 3 0 1 Q 4 1 1 Q 1 1 1 Q 2 1 1 Q 3 1 1 Q 4 2 1 Q 1 2 1 Q 2 2 1 Q 3 2 1 Q 4 3 1 Q 1 3 1 Q 2 3 1 Q 3 Grade A Centres Grade B Centres * Source: jones Lang LaSalle Research, August 2013 ANNUAL REPORT 2013 33 oUtLook The Retail Sales Index (excluding motor vehicles) grew steadily between 2009 and 2012. The year-on-year growth of the index has also been positive for most of the first eight months in 2013. In particular, the subsectors including department stores, supermarkets and food & beverages grew at faster pace compared to other trades such as apparels & footwear and furniture & household equipment. This bodes well for the suburban retail malls as the department stores and supermarkets are usually the anchor tenants that draw shopper traffic. The Government expects Singapore’s economy to grow between 3.5% and 4% in 2013, and between 2% and 4% in 2014^. The rise in median household income and sustained low unemployment rate, among other factors, are expected to underpin the growth and stability of the retail sector. In particular, the suburban retail sector could further benefit from the population increase in the suburban regions. ^ Source: Ministry of Trade and Industry, 21 November 2013 rentaL saLes index1 (2010 = 100, at current prices) 110.6 110.6 107.8 100.0 95.8 93.5 2008 2009 2010 2011 2012 2013 (AUG) year-on-year % Change in retaiL saLes index (exCLUding Motor vehiCLes)1 (at current prices) 9.9 -5.3 0.8 0.1 2.8 2.5 2.1 1.4 jAN FEB MAR APR MAY jUN jUL AUG 2013 1 Source: Department of Statistics, August 2013 mALL PROfiLEs Portfolio Overview 36 38 Causeway Point 42 Northpoint Bedok Point 45 48 YewTee Point 51 Anchorpoint 54 Hektar Real Estate Investment Trust 36 fRAsERs cENTREPOiNT TRUsT PORTfOLiO OvERviEW gross Floor area1 (square feet) net Lettable area (nLa)1 (square feet) number of Car park Lots 629,159 416,137 843 364,593 235,653 236 133,597 81,393 76 116,250 73,669 832 title 99 years leasehold w.e.f. 30 Oct 1995 (81 years remaining as at 30 Sep 2013) 99 years leasehold w.e.f. 1 Apr 1990 (76 years remaining as at 30 Sep 2013) 99 years leasehold w.e.f. 15 Mar 1978 (64 years remaining as at 30 Sep 2013) 99 years leasehold w.e.f. 3 jan 2006 (91 years remaining as at 30 Sep 2013) Freehold 101,891 71,610 1283 Location and Connectivity to public transport Woodlands Woodlands MRT Station and Woodlands Bus Interchange Yishun Yishun MRT Station and Yishun Bus Interchange Bedok Bedok MRT Station and Bedok Bus Interchange Yew Tee (Choa Chu Kang) Yew Tee MRT Station and public buses Queenstown Public and shuttle buses; nearest MRT: Queenstown MRT Station 1 As indicated in the valuation reports (dated 30 Septemeber 2013) for the respective properties by independent valuers Knight Frank Pte Ltd, Colliers International Consultancy & Valuation (Singapore) Pte Ltd and jones Lang Lasalle Property Consultants Pte Ltd. 2 Part of limited common property for the exclusive benefit of YewTee Point. 3 Located at Anchorpoint but are part of a common property of a strata sub-divided mixed-use development, which comprises Anchorpoint and The Anchorage (a condominium), managed by the MCST Title plan No.2304. CaUseway point northpoint bedok point yewtee point anChorpoint number of Leases % of nLa Fy2013 shopper Mall occupancy Fy2013 Fy2013 key tenants (by nLa) occupied by top 10 tenants traffic (million) as at gross revenue net property 30 sep 2013 30 sep 2013 (s$’000) income (s$’000) (s$ million) valuation as at 217 Cathay Cineplexes, 48.6% 23.4 99.5% 75,128 54,533 1,006 176 34.1% 41.7 99.3% 48,804 35,343 638.0 38.5% 6.6 96.7% 12,242 7,365 128.5 55.9% 11.8 92.7% 13,156 9,671 161.0 63 Gyu-Kaku, Koufu, 54.1% 4.0 96.9% 8,629 4,678 86.0 Metro, Courts, Cold Storage, Food Republic, Uniqlo Kopitiam, Harvey Norman, Cold Storage, Popular Bookstore, National Library K-Box Karaoke, Challenger, Sushi Tei, Mind Stretcher, Paradise Inn NTUC Fairprice, Koufu, Watsons, Xin Wang, West Co’z Cafe Cold Storage, Xin Wang, 69 72 ANNUAL REPORT 2013 37 gross Floor area1 (square feet) net Lettable area (nLa)1 (square feet) of Car park Lots number and Connectivity number of Leases key tenants (by nLa) % of nLa occupied by top 10 tenants Fy2013 shopper traffic (million) Mall occupancy as at 30 sep 2013 Fy2013 gross revenue (s$’000) Fy2013 net property income (s$’000) valuation as at 30 sep 2013 (s$ million) 217 176 69 72 63 Metro, Courts, Cold Storage, Cathay Cineplexes, Food Republic, Uniqlo Kopitiam, Harvey Norman, Cold Storage, Popular Bookstore, National Library K-Box Karaoke, Challenger, Sushi Tei, Mind Stretcher, Paradise Inn NTUC Fairprice, Koufu, Watsons, Xin Wang, West Co’z Cafe Cold Storage, Gyu-Kaku, Koufu, Xin Wang, 48.6% 23.4 99.5% 75,128 54,533 1,006 34.1% 41.7 99.3% 48,804 35,343 638.0 38.5% 6.6 96.7% 12,242 7,365 128.5 55.9% 11.8 92.7% 13,156 9,671 161.0 54.1% 4.0 96.9% 8,629 4,678 86.0 title 99 years leasehold w.e.f. 30 Oct 1995 (81 years remaining as at 30 Sep 2013) 99 years leasehold w.e.f. 1 Apr 1990 (76 years remaining as at 30 Sep 2013) 99 years leasehold w.e.f. 15 Mar 1978 (64 years remaining as at 30 Sep 2013) 99 years leasehold w.e.f. 3 jan 2006 (91 years remaining as at 30 Sep 2013) 629,159 416,137 843 364,593 235,653 236 133,597 81,393 76 116,250 73,669 832 Freehold 101,891 71,610 1283 Location to public transport Woodlands Woodlands MRT Station and Woodlands Bus Interchange Yishun Yishun MRT Station and Yishun Bus Interchange Bedok Bedok MRT Station and Bedok Bus Interchange Yew Tee (Choa Chu Kang) Yew Tee MRT Station and public buses Queenstown Public and shuttle buses; nearest MRT: Queenstown MRT Station 38 fRAsERs cENTREPOiNT TRUsT cAUsEWAy POiNT cAusewAy Point mAll ProFile DEscRiPTiON Seven retail levels (including one basement level) and seven car park levels (B2, B3 and 2nd - 6th levels) ADDREss 1 Woodlands Square Singapore 738099 NET LETTAbLE AREA 416,137 square feet1 cAR PARk LOTs 843 TiTLE 99 years leasehold w.e.f 30 Oct 1995 yEAR AcqUiRED by fcT 2006 mARkET vALUATiON S$1,006 million as at 30 Sep 2013 ANNUAL shOPPER TRAffic kEy TENANTs 23.4 million (Oct 2012 – Sep 2013) Metro, Courts, Cold Storage, Cathay Cineplexes, Food Republic, Uniqlo 1 As indicated in the valuation report for Causeway Point, dated 30 September 2013 by Knight Frank Pte Ltd. Causeway Point is the largest mall in Woodlands, one of Singapore’s most populous residential estates. It is conveniently located next to the Woodlands regional bus interchange and the Woodlands MRT station, which serves as an interchange station for the existing North-South Line and the new Thomson Line in the future. With more than 200 retail stores, restaurants and food outlets spread over seven retail levels (including basement level), Causeway Point offers its shoppers a one-stop shopping and dining destination. The mall recorded annual shopper traffic of 23.4 million in FY2013, up from 20.7 million a year ago. The mall has won the prestigious Platinum Award in the BCA’s GreenMark program for its host of environment-friendly features that reduces its energy consumption and carbon footprint. ANNUAL REPORT 2013 39 centre mAnAGement teAm from left to right: Ms sharon wong centre Executive Ms Fyonne kwek centre Executive Mr Fong yew kay building manager Ms Zana Fang centre Executive Mr timothy wong building Executive Ms June tan Assistant centre manager Ms Molly Lim senior centre manager Ms Fara hatta Advertising & Promotions Executive Mr Franz Lagania building Executive Ms Lillian wong senior Advertising & Promotions Executive mAll PerFormAnce hiGhliGhts financial year ended 30 september fy2013 fy2012 Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Occupancy Shopper Traffic (million) 75,128 20,595 54,533 99.5% 23.4 66,507 17,923 48,584 87.7% 20.7 increase/ (Decrease) 13.0% 14.9% 12.2% 11.8%-point 13.0% 40 fRAsERs cENTREPOiNT TRUsT cAUsEWAy POiNT toP tenAnts As at 30 September 2013, Causeway Point has a total of 222 leases, excluding vacancy. The key tenants include Metro, Courts, Cold Storage, Food Republic and Cathay Cineplexes. The top ten tenants contributed collectively, 32.4% (FY2012: 35.7%) of the mall’s total Gross Rental Income (“GRI”). top 10 tenants (by gri) at CaUseway point as at 30 september 2013 Metro (Private) Limited(a) Courts (Singapore) Limited Cold Storage Singapore (1983) Pte Ltd(b) Food Republic Pte Ltd Cathay Cineplexes Pte Ltd Uniqlo (Singapore ) Pte Ltd McDonald's Restaurants Pte Ltd Aspial Corporation Ltd(c) Bagus Management Pte Ltd Soo Kee jewellery (d) Total As % of mall’s gRi 6.8% 6.2% 4.8% 4.0% 2.3% 2.1% 1.8% 1.5% 1.5% 1.4% (a) Includes leases for Metro departmental store and Clinique Service Centre (b) Includes leases for Cold Storage supermarket, Guardian Pharmacy and 7-Eleven stores (c) Include leases for Lee Hwa jewellery, CITIGEMS and Goldheart jewellery (d) Includes leases for SK jewellery & 32.4% Soo Kee jewellery ANNUAL REPORT 2013 41 trADe mix In terms of trade sectors, Food & Restaurants was the top GRI contributor to the mall at 28.8% (FY2012: 25.4%), followed by Fashion at 25.7% (FY2012: 28.2%). The GRI contribution of the Food & Restaurants increased following the progressive opening of new restaurants at the fifth level of the mall after the completion of the mall’s refurbishment works in December 2012. The detailed breakdown of the trade mix by NLA and by GRI is presented in charts below. trade Mix by net LettabLe area (as at 30 september 2013) trade Mix by gross rentaL inCoMe (as at 30 september 2013) 9 10 11 12 8 7 5 6 4 1 10 11 9 8 7 6 5 4 3 3 2 2 TRADE cLAssificATiONs % TRADE cLAssificATiONs 1 2 3 4 5 6 7 8 9 Food & Restaurants Fashion Department Store Household Leisure/Entertainment Supermarket Service/Education Beauty, Hair, Cosmetics, Personal Care Books, Music, Art & Craft, Hobbies 10 Healthcare 11 12 Sports Apparels & Equipment Vacant TOTAl 23.5% 18.0% 14.4% 12.0% 9.2% 5.7% 4.8% 4.2% 3.8% 2.0% 1.9% 0.5% 100.0% 1 % 28.8% 25.7% 10.6% 6.6% 6.5% 6.4% 3.5% 3.2% 3.0% 3.0% 2.7% 1 2 3 4 5 6 7 8 9 10 11 Food & Restaurants Fashion Household Department Store Beauty, Hair, Cosmetics, Personal Care Service/Education Healthcare Books, Music, Art & Craft, Hobbies Supermarket Leisure/Entertainment Sports Apparels & Equipment TOTAl 100.0% 42 fRAsERs cENTREPOiNT TRUsT NORThPOiNT northPoint mAll ProFile DEscRiPTiON ADDREss Six retail levels (including two basement levels) and three levels of car park (B1 - B3) 930 Yishun Avenue 2, Northpoint Singapore 769098 NET LETTAbLE AREA 235,653 square feet1 cAR PARk LOTs 236 TiTLE 99 years leasehold w.e.f. 1 Apr 1990 yEAR AcqUiRED by fcT 2006 (Northpoint 1), 2010 (Northpoint 2) mARkET vALUATiON S$638 million as at 30 Sep 2013 ANNUAL shOPPER TRAffic kEy TENANTs 41.7 million (Oct 2012 – Sep 2013) Kopitiam, Harvey Norman, Cold Storage, Popular Bookstore, OCBC Bank 1 As indicated in the valuation report for Northpoint, dated 30 September 2013, by Colliers International Consultancy & Valuation (Singapore) Pte Ltd. Northpoint, opened in 1992, is Singapore’s pioneer suburban retail mall. The mall is located in the populous Yishun estate. The mall offers six retail levels of shopping (including two basement levels). It is connected to the Yishun bus interchange and is also linked to the Yishun MRT Station via a direct underground pedestrian underpass. Northpoint is the second largest mall in FCT’s portfolio with an aggregate net lettable area of 235,653 square feet. The mall consistently attracts high shopper traffic flow from the surrounding residential estate and schools. Shopper traffic in FY2013 was 41.7 million or an average of 3.5 million per month, one of the highest among suburban malls in Singapore. Key tenants at Northpoint include Cold Storage, Harvey Norman, Kopitiam and Popular Bookstore. The mall also features a community library and a 5,400 square feet rooftop wet and dry children’s playground. ANNUAL REPORT 2013 43 centre mAnAGement teAm from left to right: Mr Lee Chwee beng building Executive Ms Joyce sim senior centre Executive Ms Cynthia ng centre manager Mr kor Lee kiong building manager Ms doralee Chen senior centre Executive Ms Cherrie Chee Advertising & Promotions Executive mAll PerFormAnce hiGhliGhts financial year ended 30 september fy2013 fy2012 Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Occupancy Shopper Traffic (million) 48,804 13,461 35,343 99.3% 41.7 46,669 13,307 33,362 99.7% 40.8 increase/ (Decrease) 4.6% 1.2% 5.9% (0.4)%-point 2.2% 44 fRAsERs cENTREPOiNT TRUsT NORThPOiNT toP tenAnts As at 30 September 2013, Northpoint has a total of 175 leases, excluding vacancy. The key tenants include Kopitiam, Harvey Norman, Cold Storage, Popular Bookstore and OCBC Bank. The top ten tenants contributed collectively, 29.7% (FY2012: 29.5%) of the mall’s total Gross Rental Income (“GRI”). top 10 tenants (by gri) at northpoint as at 30 september 2013 As % of mall’s gRi Copitiam Pte Ltd(a) Cold Storage Singapore (1983) Pte Ltd(b) Aspial Corporation Ltd (c) Overseas-Chinese Banking Corporation Ltd Pertama Merchandising Pte Ltd (d) United Overseas Bank Ltd Popular Book Company Pte Ltd Malayan Banking Berhad Suki Sushi Pte Ltd G2000 Apparel (S) Pte Ltd Total 6.5% 5.9% 2.5% 2.5% 2.5% 2.3% 2.0% 1.9% 1.9% 1.7% 29.7% (a) Operates the Kopitiam food court at Northpoint (b) Includes leases for Cold Storage supermarket, Guardian Pharmacy and 7-Eleven stores (c) Include leases for CITIGEMS, Goldheart jewellery and Maxi-Cash (d) Operates the Harvey Norman store at Northpoint trADe mix In terms of trade sectors, Food & Restaurants was the top GRI contributor to the mall at 31.7%, (FY2012: 31.2%), followed by Fashion at 27.7% (FY2012: 28.6%). The detailed breakdown of the trade mix by NLA and by GRI is presented in charts below. trade Mix by net LettabLe area (as at 30 september 2013) trade Mix by gross rentaL inCoMe (as at 30 september 2013) 9 10 11 8 6 5 4 7 3 1 2 8 9 10 7 6 5 4 3 2 TRADE cLAssificATiONs % TRADE cLAssificATiONs 1 % 31.7% 27.7% 12.2% 7.2% 5.0% 4.6% 4.5% 3.0% 2.2% 1.9% 0.0% 1 2 3 4 5 6 7 8 9 Food & Restaurants Fashion Service/Education Beauty, Hair, Cosmetics, Personal Care Healthcare Household Books, Music, Art & Craft, Hobbies Supermarket Sports Apparels & Equipment 10 Leisure/Entertainment 11 Department Store TOTAl 100.0% 1 2 3 4 5 6 7 8 9 10 11 Food & Restaurants Service/Education Fashion Supermarket Books, Music, Art & Craft, Hobbies Household Beauty, Hair, Cosmetics, Personal Care Leisure/Entertainment Healthcare Sports Apparels & Equipment Vacant 12 Department Store 28.0% 17.1% 16.3% 8.7% 7.0% 6.1% 5.8% 4.5% 3.5% 2.3% 0.7% 0.0% TOTAl 100.0% ANNUAL REPORT 2013 45 bEDOk POiNT beDoK Point mAll ProFile DEscRiPTiON ADDREss Five retail levels (including one basement level) and one basement car park 799 New Upper Changi Road Singapore 467351 NET LETTAbLE AREA 81,393 square feet1 cAR PARk LOTs 76 TiTLE 99 years leasehold w.e.f. 15 Mar 1978 yEAR AcqUiRED by fcT 2011 mARkET vALUATiON S$128.5 million as at 30 Sep 2013 ANNUAL shOPPER TRAffic kEy TENANTs 6.6 million (Oct 2012 – Sep 2013) K Box Karaoke, Challenger, Sushi Tei, Mind Stretcher, Paradise Inn 1 As indicated in the valuation report for Bedok Point, dated 30 September 2013, by jones Lang LaSalle Consultants Pte Ltd. Bedok Point has five retail levels (including one basement level) and one basement car park. The mall is located in the town centre of Bedok, which is one of the largest residential estates in Singapore by population. The mall is well-served by the nearby Bedok MRT station and the Bedok bus interchange. The mall offers an exciting array of restaurants, food outlets, entertainment, retail and service offerings that makes it an attractive destination for families, students and PMEBs (Professionals, Managers, Executives and Businessmen) around the precinct. The tenants at Bedok Point include K Box Karaoke, Challenger, Sushi Tei, Mind Stretcher and Paradise Inn, among others. Total shopper traffic to the mall in FY2013 was 6.6 million. 46 fRAsERs cENTREPOiNT TRUsT bEDOk POiNT centre mAnAGement teAm from left to right: Ms Crystal kong Jin yi centre Executive Mr woo Mun hoa senior building Executive Ms angela wu Zhuo hui centre manager (seated) Ms Joanne Loy pui we Advertising & Promotions Executive Ms ivry Foo Cai yi senior centre Officer increase/ (Decrease) (1.8)% 10.4% (8.5)% mAll PerFormAnce hiGhliGhts financial year ended 30 september fy2013 fy2012 Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Occupancy Shopper Traffic (million) 12,242 4,877 7,365 96.7% 6.6 12,464 4,419 8,045 98.7% (2.0)%-point 8.0 (17.5)% ANNUAL REPORT 2013 47 toP tenAnts As at 30 September 2013, Bedok Point has a total of 69 leases, excluding vacancy. The key tenants include Paradise Group, K Box Karaoke, Sushi Tei, Beijing 101 and Mind Stretcher. The top 10 tenants contributed collectively, 36.5% (FY2012: 34.0%) of the mall’s total Gross Rental Income (“GRI”). top 10 tenants (by gri) at bedok point as at 30 september 2013 As % of mall’s gRi Paradise Group Holdings Pte Ltd K Box (Bedok Central) Pte Ltd Sushi-Tei Pte Ltd Beijing 101 Hair Consultants Pte Ltd L.A.I Singapore Pte Ltd Louisiana QSR Pte Ltd Mind Stretcher Learning Centre Ltd Starbucks Coffee Singapore Pte Ltd Pastamatrix International Pte Ltd Sports Link Holdings Pte Ltd Total 6.7% 5.9% 4.2% 3.5% 2.8% 2.8% 2.7% 2.7% 2.7% 2.5% 36.5% trADe mix In terms of trade sectors, Food & Restaurants was the top GRI contributor to the mall at 46.4%, (FY2012: 45.0%), followed by Beauty, Hair, Cosmetics and Personal Care at 13.9% (FY2012: 14.3%). The detailed breakdown of the trade mix by NLA and by GRI is presented in charts below. trade Mix by net LettabLe area (as at 30 september 2013) trade Mix by gross rentaL inCoMe (as at 30 september 2013) 9 10 8 7 6 5 4 3 8 9 7 6 5 4 3 2 1 2 1 TRADE cLAssificATiONs % TRADE cLAssificATiONs 1 2 3 4 5 6 7 8 9 Food & Restaurants Leisure/Entertainment Service/Education Beauty, Hair, Cosmetics, Personal Care Household Fashion Books, Music, Art & Craft, Hobbies Vacant Sports Apparels & Equipment 10 Healthcare 11 Department Store 12 Supermarket 42.1% 12.9% 10.1% 10.0% 7.6% 6.2% 4.5% 3.3% 2.7% 0.6% 0.0% 0.0% TOTAl 100.0% 1 2 3 4 5 6 7 8 9 Food & Restaurants Beauty, Hair, Cosmetics, Personal Care Fashion Service/Education Leisure/Entertainment Household Books, Music, Art & Craft, Hobbies Sports Apparels & Equipment Healthcare 10 Department Store 11 Supermarket % 46.4% 13.9% 9.3% 8.9% 8.7% 4.6% 4.6% 2.5% 1.1% 0.0% 0.0% TOTAl 100.0% 48 fRAsERs cENTREPOiNT TRUsT yEWTEE POiNT yewtee Point mAll ProFile YewTee Point has two retail levels (including one basement level). The mall is located in Yew Tee, a housing estate within a major residential precinct Choa Chu Kang, north-west of Singapore. YewTee Point is served by the adjacent Yew Tee MRT station and public bus services. YewTee Point’s key tenants include NTUC Fairprice, Koufu (food court), Watsons, Xin Wang Hong Kong Café, among others. It draws shoppers from the private apartments located above the mall, the Yew Tee housing estate, schools, military camp and the nearby industrial estate. Total shopper traffic to the mall in FY2013 was 11.8 million. DEscRiPTiON ADDREss Two retail levels (including one basement level) and one basement car park 21 Choa Chu Kang North 6 Singapore 689578 NET LETTAbLE AREA 73,669 square feet1 cAR PARk LOTs 83* TiTLE 99 years leasehold w.e.f. 3 jan 2006 yEAR AcqUiRED by fcT 2010 mARkET vALUATiON S$161.0 million as at 30 Sep 2013 ANNUAL shOPPER TRAffic kEy TENANTs 11.8 million (Oct 2012 – Sep 2013) NTUC Fairprice, Koufu, Watsons, Xin Wang Hong Kong Café * Part of limited common property for the exclusive benefit of YewTee Point. 1 As indicated in the valuation report for YewTee Point, dated 30 September 2013, by Knight Frank Pte Ltd. ANNUAL REPORT 2013 49 centre mAnAGement teAm from left to right: Mr patrick Loh senior building Executive Ms Crystal Lim senior centre Officer Ms deon koh Assistant centre manager Ms Farah dila Advertising & Promotions Executive Ms Faye Chia Administrative Officer mAll PerFormAnce hiGhliGhts financial year ended 30 september fy2013 fy2012 Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Occupancy Shopper Traffic (million) 13,156 3,485 9,671 92.7% 11.8 increase/ (Decrease) 0.2% (0.3)% 0.4% 13,124 3,496 9,628 96.3 % (3.6)%-point 11.5 2.6% 50 fRAsERs cENTREPOiNT TRUsT yEWTEE POiNT toP tenAnts As at 30 September 2013, YewTee Point has a total of 73 leases, excluding vacancy. The key tenants include NTUC Fairprice, Koufu (food court), Watsons, among others. The top 10 tenants contributed collectively, 51.1% (FY2012: 48.5%) of the mall’s total Gross Rental Income (“GRI”). top 10 tenants (by gri) at yewtee point as at 30 september 2013 As % of mall’s gRi NTUC Fairprice Co-operative Ltd(a) Koufu Pte Ltd Kentucky Fried Chicken Management Pte Ltd Watson’s Personal Care Stores Pte Ltd Shakura Pigmentation Pte Ltd West Co’z Cafe Pte Ltd XWS Pte Ltd (Xin Wang Hong Kong Café) Pastamatrix International Pte Ltd (Pastamania) BreadTalk Pte Ltd London Weight Management Pte Ltd Total 20.0% 10.4% 3.7% 3.7% 2.8% 2.3% 2.1% 2.1% 2.1% 1.9% 51.1% trADe mix In terms of trade sectors, Food & Restaurants was the top GRI contributor to the mall at 34.1%, (FY2012: 39.2%), followed by Supermarket at 18.5% (FY2012: 16.1%). The detailed breakdown of the trade mix by NLA and by GRI is presented in charts below. trade Mix by net LettabLe area (as at 30 september 2013) trade Mix by gross rentaL inCoMe (as at 30 september 2013) 8 9 10 7 6 8 9 7 6 4 5 3 5 4 3 1 1 (a) Includes leases for NTUC Fairprice and NTUC Healthcare (Unity) 2 2 TRADE cLAssificATiONs % TRADE cLAssificATiONs 1 2 3 4 5 6 7 8 9 Food & Restaurants Supermarket/Hypermarket Beauty, Hair, Cosmetics, Personal Care Service/Education Vacant Fashion Household Healthcare Books, Music, Art & Craft, Hobbies 10 Sports Apparels & Equipment 11 Department Store 12 Leisure/Entertainment 31.4% 23.5% 12.7% 7.7% 7.3% 5.9% 4.3% 4.1% 2.6% 0.5% 0.0% 0.0% TOTAl 100.0% 1 2 3 4 5 6 7 8 9 Food & Restaurants Supermarket/Hypermarket Beauty, Hair, Cosmetics, Personal Care Service/Education Fashion Healthcare Household Books, Music, Art & Craft, Hobbies Sports Apparels & Equipment 10 Department Store 11 Leisure/Entertainment % 34.1% 18.5% 15.7% 8.1% 8.0% 6.5% 4.9% 3.5% 0.7% 0.0% 0.0% TOTAl 100.0% ANNUAL REPORT 2013 51 ANchORPOiNT AnchorPoint mAll ProFile Anchorpoint has two retail levels (including one basement level) and an adjacent a 2-storey restaurant building. The mall is located along Alexandra Road, opposite to the popular large home furnishing store IKEA. Anchorpoint is well-served by public bus services as well as scheduled shuttle bus service between the mall and the nearby offices in the Alexandra area. Anchorpoint offers an exciting range of eateries and restaurants, retail shopping and boutique outlets. The stores and restaurants at Anchorpoint include Cold Storage, Koufu (food court), japanese BBQ restaurant Gyu-Kaku as well as reputable retailers such as Charles & Keith and Cotton On, among others. Total shopper traffic to the mall in FY2013 was 4.0 million. DEscRiPTiON Two retail levels (including one basement level) and an adjacent a two-storey restaurant building ADDREss 368 and 370 Alexandra Road Singapore 159952/159953 NET LETTAbLE AREA 71,610 square feet1 cAR PARk LOTs 128* TiTLE yEAR AcqUiRED by fcT Freehold 2006 mARkET vALUATiON S$86.0 million as at 30 Sep 2013 ANNUAL shOPPER TRAffic kEy TENANTs 4.0 million (Oct 2012 – Sep 2013) Cold Storage, Gyu-Kaku, Koufu, Xin Wang Hong Kong Café * Located at Anchorpoint but are part of a common property of strata sub-divided mixed-use development, which comprises Anchorpoint and The Anchorage (a condominium), managed by the MCST Title plan No.2304. 1 As indicated in the valuation report for Anchorpoint, dated 30 September 2013, by Knight Frank Pte Ltd. 52 fRAsERs cENTREPOiNT TRUsT ANchORPOiNT centre mAnAGement teAm from left to right: Mr abdul rahman bin anwar senior building Executive Ms Lynn Foo Mei Jin centre Executive Mr raymond Chan kin centre manager Ms hazel soh pei yun Advertising & Promotions Executive increase/ (Decrease) 2.3% 8.9% (2.8)% mAll PerFormAnce hiGhliGhts financial year ended 30 september fy2013 fy2012 Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Occupancy Shopper Traffic (million) 8,629 3,951 4,678 96.9% 4.0 8,439 3,628 4,811 99.3 % (2.4)%-point 3.9 2.6% ANNUAL REPORT 2013 53 toP tenAnts As at 30 September 2013, Anchorpoint has a total of 63 leases, excluding vacancy. The key tenants include Cold Storage, Koufu (food court), Gyu-Kaku japanese BBQ restaurant, Watson’s, among others. The top 10 tenants contributed collectively 47.2% (FY2012: 44.6%) of the mall’s total Gross Rental Income (“GRI”). top 10 tenants (by gri) at anChorpoint as at 30 september 2013 As % of mall’s gRi Cold Storage (1983) Singapore Pte Ltda Koufu Pte Ltd Royal Culinary Pte Ltd (Gyu-Kaku) XWS Pte Ltd (Xin Wang Hong Kong Café) Sarika Connoisseur Cafe Pte Ltd (TCC) Sakuraya Foods Pte Ltd G2000 Apparel (S) Pte Ltd Cotton On Singapore Pte Ltd jP Food Service Pte Ltd (jack’s Place) Watson's Personal Care Stores Pte Ltd Total 10.0% 6.5% 4.5% 4.2% 4.0% 4.0% 3.7% 3.7% 3.4% 3.2% 47.2% trADe mix In terms of trade sectors, Food & Restaurants was the top GRI contributor to the mall at 42.1%, (FY2012: 42.2%), followed by Fashion at 18.9% (FY2012: 21.0%). The detailed breakdown of the trade mix by NLA and by GRI is presented in charts below. trade Mix by net LettabLe area (as at 30 september 2013) trade Mix by gross rentaL inCoMe (as at 30 september 2013) a Includes leases for Cold Storage supermarket, Guardian Pharmancy and 7-Eleven stores. 8 9 7 6 5 4 3 2 1 7 8 6 4 3 5 2 1 TRADE cLAssificATiONs % TRADE cLAssificATiONs 1 2 3 4 5 6 7 8 9 Food & Restaurants Fashion Supermarket Beauty, Hair, Cosmetics, Personal Care Service/Education Household Vacant Books, Music, Art & Craft, Hobbies Healthcare 10 Sports Apparels & Equipment 11 Department Store 12 Leisure/Entertainment 40.0% 16.1% 15.1% 8.5% 8.3% 4.4% 3.1% 2.3% 2.2% 0.0% 0.0% 0.0% TOTAl 100.0% 1 2 3 4 5 6 7 8 9 Food & Restaurants Fashion Beauty, Hair, Cosmetics, Personal Care Supermarket Service/Education Household Books, Music, Art & Craft, Hobbies Healthcare Sports Apparels & Equipment 10 Department Store 11 Leisure/Entertainment % 42.1% 18.9% 9.9% 9.1% 7.8% 5.7% 3.6% 2.9% 0.0% 0.0% 0.0% TOTAl 100.0% 54 fRAsERs cENTREPOiNT TRUsT hEkTAR REAL EsTATE iNvEsTmENT TRUsT investment in hektar reit As at 30 September 2013, FCT holds 31.17% of the units in Hektar Real Estate Investment Trust (“H-ReIT”). H-REIT, an associate of FCT, is a retail-focused REIT in Malaysia listed on the Main Market of Bursa Malaysia Securities Berhad. Its property portfolio comprises Subang Parade in Selangor; Mahkota Parade in Melaka; Wetex Parade & Classic Hotel in Muar, johor; Central Square in Sungai Petani and Landmark Central in Kulim, both located in Kedah. The properties in H-REIT portfolio have a total net lettable area (“NlA”) of 1.7 million square feet. from left to right: subang parade Mahkota parade wetex parade Central square Landmark Central heKtAr ProPerty ProFile (as at 31 December 2012) sTATE TiTLE subang parade Selangor Freehold Mahkota parade Melaka Leasehold (Expiring in 2101) wetex parade johor Freehold Central square Kedah Freehold Landmark Central Kedah Freehold NET LETTAbLE AREA (RETAiL) 500,447 sq ft 484,052 sq ft 155,253 sq ft 300,046 sq ft 281,716 sq ft TENANciEs OccUPANcy 132 99.76% 108 96.05% 100 97.83% visiTOR TRAffic iN fy2012 11.4 million 11.0 million 5.7 million 88 89.80% n/a 78 96.87% n/a PURchAsE PRicE (Rm) 280.0 million 232.0 million 117.5 million 83.0 million 98.0 million vALUATiON (Rm) 391.3 million 315.0 million 135.0 million 84.7 million 103.0 million heKtAr reit’s toP 10 tenAnts The top ten tenants in the Hektar’s portfolio contributed approximately 24.4% of total monthly rental income. Tenant Trade sector Parkson The Store Ampang Superbowl 1 2 3 4 Giant Supermarket K.F.C. 5 6 Celebrity Fitness 7 World Of Sports 8 Digital One 9 McDonald's 10 Best Denki Department Store Department Store Leisure & Entertainment Department Store Food & Beverage Leisure & Entertainment Fashion & Footwear Electronics and IT Food & Beverage Electronics and IT Top 10 Tenants (By Monthly Rental Income) Other Tenants Total # Based on monthly rental income for December 2012. NLA (sq ft) 254,009 267,114 61,717 72,140 11,776 34,317 11,517 21,361 8,431 24,739 767,121 954,945 1,722,066 % of Total NLA % monthly Rental income# 14.8% 15.5% 3.6% 4.2% 0.7% 2.0% 0.7% 1.2% 0.5% 1.4% 44.5% 55.5% 100.0% 9.4% 5.8% 1.4% 1.3% 1.3% 1.2% 1.2% 1.0% 1.0% 0.8% 24.4% 75.6% 100.0% ANNUAL REPORT 2013 55 trADe mix Departmental stores and supermarkets constituted approximately 37.7% of H-REIT’s total portfolio NLA. This proportion has increased in FY2012 with the addition of the Landmark Central and Central Square. The largest contributor for rental income was the fashion and footwear segment, which contributed approximately 28.4% of H-REIT’s monthly rental income. Source: H-REIT Annual Report 2012 trade Mix by net LettabLe area trade Mix by gross rentaL inCoMe 8 9 7 6 5 4 3 1 2 8 7 9 6 5 4 3 TRADE cLAssificATiONs 1 Fashion & Footwear 2 Food & Beverage/Food Court 3 Department Store/Supermarket 4 Gift/Books/Toys/Specialty 5 Education/Services 2 % TRADE cLAssificATiONs 14.3% 13.1% 37.7% 5.6% 3.2% 1 Fashion & Footwear 2 Food & Beverage/Food Court 3 Department Store/Supermarket 4 Gift/Books/Toys/Specialty 5 Education/Services 6 Leisure & Entertainment, Sports & Fitness 16.0% 6 Leisure & Entertainment, Sports & Fitness 7 Electronics & IT 8 Housewares & Furnishing 9 Others 4.7% 3.4% 1.9% 7 Electronics & IT 8 Housewares & Furnishing 9 Others 1 % 28.4% 21.1% 17.1% 9.0% 6.7% 6.3% 4.9% 2.5% 4.0% leAse exPiry ProFile (as at 31 December 2012) for year ending 31 December fy2013 fy2014 fy2015 Number of leases expiring 190 162 129 NLA of expiring leases (square feet) 319,121 576,383 708,450 NLA of expiring leases as % of total NLA Expiries as % Monthly Rental Income* 19% 29% 33% 35% 41% 30% * Based on monthly rental income for December 2012. Figures may not round to 100% due to miscellaneous items. Corporate GovernanCe annual report 2013 57 Corporate GovernanCe report IntroductIon Frasers Centrepoint Trust (“FCT”) is a real estate investment trust (“REIT”) listed on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”). FCT is managed by Frasers Centrepoint Asset Management Ltd. (“Manager”), which is a wholly-owned subsidiary of Frasers Centrepoint Limited (“FCL”). The Manager is committed to upholding high standards of corporate governance to preserve and enhance FCT’s asset value so as to maximise the returns from investments, and ultimately the distributions and total return to unitholders (“Unitholders”) of FCT. Listed on the Mainboard of the SGX-ST, FCT adheres closely to the principles and guidelines of the Code of Corporate Governance and other applicable laws, rules and regulations, including the SGX-ST Listing Manual. Reference is made to both the Code of Corporate Governance 2005 and 2012 (the “2005 Code” and “2012 Code” respectively), and although the 2012 Code takes effect in respect of annual reports for the financial year commencing on 1 October 2013, the Manager has started to ensure compliance with the 2012 Code to such extent and as best as it can. The Manager has general powers of management over the assets of FCT. The Manager’s main responsibility is to manage FCT’s assets and liabilities for the benefit of Unitholders. It ensures that the business of FCT is carried on and conducted in a proper and efficient manner. The Manager also ensures that applicable laws and regulations such as the listing rules of the SGX-ST, the Code on Collective Investment Schemes (“Code on CIS”) (containing the Property Funds Guidelines) and the Securities and Futures Act (“SFA”), are complied with. It also supervises the property manager in its day-to-day management of the malls of FCT, namely, Anchorpoint, Causeway Point, Northpoint, YewTee Point and Bedok Point, pursuant to property management agreements entered into for each mall. The primary role of the Manager is to set the strategic direction for FCT. This includes making recommendations to the Trustee on acquisitions, divestments and enhancement of assets. As required under the licensing regime for REIT managers, the Manager holds a Capital Markets Services Licence (“CMS Licence”) issued by the Monetary Authority of Singapore (“MAS”) to carry out REIT management activities. This corporate governance report (“CG Report”) provides an insight on the Manager’s corporate governance framework and practices in compliance with the principles and guidelines of the 2005 Code and the 2012 Code. As FCT is a listed REIT, not all principles of the 2005 Code and the 2012 Code may be applicable to FCT and the Manager. Any deviations from the 2005 Code and the 2012 Code are explained. Board Matters Principle 1: Board’s Conduct of Affairs The composition of the Board of Directors of the Manager (“Board”) as at 30 September 2013 is as follows: Mr Philip Eng Heng Nee Dr Chew Tuan Chiong Mr Anthony Cheong Fook Seng Mr Chia Khong Shoong Mr Bobby Chin Yoke Choong Mr Lim Ee Seng Mr Soh Kim Soon Mr Christopher Tang Kok Kai Chairman, Non-Executive (Independent) Chief Executive Officer (Non-independent) Non-Executive (Non-independent) Non-Executive (Non-independent) Non-Executive (Independent) Non-Executive (Non-independent) Non-Executive (Independent) Non-Executive (Non-independent) The Board oversees the business affairs of FCT and the Manager, providing oversight, strategic direction and entrepreneurial leadership, and sets strategic aims and directions of the Manager. It works closely with Management, and has oversight of and reviews Management’s performance. The Board sets the values and standards of corporate governance for the Manager and FCT, with the ultimate aim of safeguarding and enhancing Unitholder value and achieving sustainable growth for FCT. None of the Directors has entered into any service contract directly with FCT. Management provides the Board with complete, timely and adequate information to keep the Directors updated on the operations and financial performance of FCT. 58 Frasers Centrepoint trust Corporate GovernanCe report As part of the Manager’s internal controls, the Board has established a Manual of Authority. This sets out the requisite levels of authorisation required for particular types of transactions to be carried out, and specifies whether Board approval needs to be sought. The matters reserved to the Board for approval include approval of annual budgets, financial plans, financial statements, business strategy and material transactions of FCT, namely, major acquisitions, divestments, funding and investment proposals, and appointment of key executives. To assist the Board to effectively discharge its oversight and functions, appropriate delegations of authority to Management have been effected to enhance operational efficiency. To assist the Board in its corporate governance and risk management responsibilities, the Audit Committee was established. Upon joining the Board, new Directors undergo an induction and/or orientation programme to provide them with information on FCT’s business, strategic directions, governance practices, policies and business activities, including major new projects. New Independent Directors who join the Board are issued a formal letter of appointment setting out relevant Directors’ duties and obligations, so as to acquaint them with their responsibilities as Directors of the Manager. The Manager sees to it that the Board is regularly updated on new developments in laws and regulations or changes in regulatory requirements and financial reporting standards which are relevant to or may affect the Manager or FCT. During the year, the Board was briefed and/or updated on the following: (1) amendments to the SGX-ST Listing Manual and (2) risk based capital adequacy requirements for holders of capital markets services licences. In addition, the Manager encourages Directors to be members of the Singapore Institute of Directors (“SID”), and for them to attend training courses from SID and receive journal updates, so as to stay abreast of changes to the financial, legal and regulatory requirements, and the business environment. The Board meets regularly, at least once every quarter, to review the key activities, performance, business strategies and significant operations and/or management matters pertaining to the Manager and/or FCT. In the event Directors are unable to attend Board meetings physically, the Manager’s Articles of Association allows for such meetings to be conducted via telephone, video conference or any other form of electronic or instantaneous communication. At least once a year and if required, time is set aside after scheduled Board meetings for discussions amongst the members of the Board without the presence of Management, in line with the guidelines of the 2012 Code, as this facilitates a more effective check on Management. The number of Board and Audit Committee meetings held during the year ended 30 September 2013 and the attendance of Directors at these meetings are disclosed below: Board Meetings audit committee Meetings Meetings held for financial year ended 30 September 2013 Mr Philip Eng Heng Nee Dr Chew Tuan Chiong Mr Anthony Cheong Fook Seng Mr Chia Khong Shoong Mr Bobby Chin Yoke Choong Mr Lim Ee Seng Mr Soh Kim Soon Mr Christopher Tang Kok Kai Principle 2: Board Composition and Guidance 5 5/5 5/5 5/5 5/5 5/5 5/5 5/5 5/5 4 NA NA 4/4 NA 4/4 NA 4/4 NA The Board comprises eight members, of which three are independent non-executive Directors. The CEO is the only Executive Director on the Board. The rest of the Board members are non-executive Directors. The size of the Board is appropriate and adequate, having regard to the scope and nature of the Manager’s and FCT’s business and operations. The Board is of the view that the current size and composition of the Board is appropriate for the scope and nature of the operations of the Manager and FCT and facilitates effective decision-making. In line with the 2012 Code, the Board is also of the view that the current size of the Board is not so large as to be unwieldy. In this regard, the Board has taken into account the requirements of the business of the Manager and FCT and the need to avoid undue disruptions from changes to the composition of the Board and the Audit Committee. The Board considers that its present size, composition and balance between Executive, Non-Executive and Independent Directors, is appropriate and allows for a balanced exchange of views, robust deliberations, debates among members and effective oversight over Management. The current composition gives the Board the ability to consider and make decisions objectively and independently on issues relating to FCT and the Manager. Under the current composition, no one individual or group dominates the Board’s decisions or its process. annual report 2013 59 The composition of the Board is reviewed regularly to ensure that the Board has the appropriate size and mix of expertise and experience. There is a strong and independent element on the Board. Directors exercise their judgment independently and objectively in the interests of FCT and the Manager. The Board reviews and assesses annually the independence of its directors based on the definitions and guidelines of independence set out in the Code of Corporate Governance. In its review for the financial year ended 30 September 2013, the Board determined the following with respect to the independence of directors: Mr Philip Eng Heng Nee Dr Chew Tuan Chiong Mr Anthony Cheong Fook Seng Mr Chia Khong Shoong Mr Bobby Chin Yoke Choong Mr Lim Ee Seng Mr Soh Kim Soon Mr Christopher Tang Kok Kai Independent Non-independent Non-independent Non-independent Independent Non-independent Independent Non-independent The Board members have core competencies and expertise and experience in various fields ranging from accounting and finance, to business management. Coupled with relevant industry knowledge and strategic planning experience of the Board members, the Board is well-placed to drive FCT’s continuous growth and success and deliver sustainable Unitholder value. Management is able to benefit from the diverse and objective perspectives of the Board members on issues that are brought before the Board, with a healthy exchange of ideas and views between the Board and Management, to help shape the strategic process. Directors of the Manager are not subject to periodic retirement by rotation. The Board reviews its composition to ensure the appropriate size and diversity of skills, expertise and experience. Principle 3: Chairman and Chief Executive Officer The positions of Chairman and Chief Executive Officer are held by separate persons. This is so that an appropriate balance of power and authority, with clear divisions of responsibilities and accountability, can be attained. Such separation of roles between the Chairman and the Chief Executive Officer promotes robust deliberations by the Board and Management on the business activities of FCT. The Chairman and Chief Executive Officer are not related to each other, nor is there any other business relationship between them. The Chairman, who is non-executive and independent, leads and ensures the effectiveness of the Board. Through the Chairman’s continuing leadership of the Board, constructive discussions among the Board members as well as between the Board and Management, and effective contribution by the Directors, are promoted. High standards of corporate governance are upheld as a result. The Chief Executive Officer has full executive responsibilities over the business direction and operations of the Manager. Principle 4: Board Membership The Manager does not consider it necessary for the Board to establish a nominating committee. In respect of the search and nomination process for new directors, the Board identifies the relevant and/or desirable skills and experience, and engages search companies as well as networking contacts to identify and shortlist candidates, to spread its reach for the best person for the role. The 2012 Code requires listed companies to fix the maximum number of board representations on other listed companies that their directors may hold and to disclose this in their annual report. Details of such directorships and other principal commitments of our Directors may be found on pages 14 to 17. In determining whether each Director is able to devote sufficient time to discharge his duties, the Board has taken cognizance of the 2012 Code requirement, but is of the view that its assessment should not be restricted to the number of board representations of each Director and their respective principal commitments per se. Holistically, the contributions by our Directors to and during meetings of the Board and the Audit Committee as well as their attendance at such meetings should also be taken into account. Principle 5: Board Performance The Board uses objective performance criteria to assess the effectiveness of the Board as a whole and the contribution of each Director to the effectiveness of the Board. 60 Frasers Centrepoint trust Corporate GovernanCe report All Directors are required to assess the performance of the Board and the Board Committee. The assessment covers areas such as Board composition, Board processes, managing the Manager’s performance, Board Committee effectiveness and any specific areas where improvements may be made. Principle 6: Access to Information On an on-going basis, and prior to Board meetings, adequate and timely information is given by Management to Board members, who have separate and independent access to Management and the Company Secretary. The Company Secretary is a non-executive Director and a member of the Audit Committee. Under the direction of the Chairman, the Company Secretary ensures that Board procedures, and applicable rules and regulations are complied with. He attends all Board meetings and acts as a channel of communication for information flow and dissemination to and within the Board, as well as between senior Management and non-executive Directors. The annual calendar of Board activities is scheduled in advance. Board papers are dispatched to Directors about a week before scheduled meetings so that Directors have sufficient time to review and consider matters being tabled and discussed at the meetings. Senior Executives are requested to attend the Board meetings to provide additional insights into matters being discussed and to respond to any queries from Directors. The Directors, either individually or as a group, may seek or obtain independent professional advice, where necessary, in the furtherance of their duties and at the Manager’s expense. reMuneratIon Matters Principle 7: Remuneration Matters Principle 8: Level and Mix of Remuneration Principle 9: Disclosure on Remuneration FCT, as a REIT, is managed by the Manager which has experienced and well-qualified management personnel to manage the operational matters of the Manager and FCT. The remuneration of the staff of the Manager and Directors’ fees are paid by the Manager from the fees it receives from FCT, and not by FCT. For the financial year ended 30 September 2013, the Manager adopted the remuneration policies and practices of Fraser and Neave, Limited (“F&N”), which has a Remuneration Committee1 (“F&N RC”) that oversees, inter alia, the framework of remuneration, compensation and benefits for key executives of the Manager, including the CEO. The level and mix of remuneration and benefits, policies and practices of the Manager was reviewed by the F&N RC on an annual basis. In undertaking such reviews, the F&N RC took into consideration the performance of the Manager and that of individual employees. It also reviewed and approved the framework for salary reviews, performance bonuses and incentives for senior Management taking into consideration the achievements of FCT and the Manager, and the performance of individual employees. Remuneration of the Directors and officers of the Manager are not paid out of the trust property of FCT, but are directly paid by the Manager from the fees it receives. The Directors’ fees for the financial year ended 30 September 2013 is shown in the table below. The Chief Executive Officer does not receive Director’s fees. In determining the quantum of such fees, factors such as frequency of meetings, time spent and responsibilities of Directors are taken into account. 1 Until 21 March 2013, this Committee of F&N was known as the Remuneration & Staff Establishment Committee. annual report 2013 61 Board Members Mr Philip Eng Heng Nee (Chairman) Dr Chew Tuan Chiong Mr Anthony Cheong Fook Seng1 (Member, Audit Committee) Mr Chia Khong Shoong2 Mr Bobby Chin Yoke Choong (Member, Audit Committee) Mr Lim Ee Seng2 Mr Soh Kim Soon (Member, Audit Committee) Mr Christopher Tang Kok Kai2 (1) Director’s fees are paid to Fraser & Neave (S) Pte Ltd (2) Director’s fees are paid to FCL Management Services Pte Ltd accountaBIlIty and audIt Principle 10: Accountability directors’ Fees S$75,000 – S$45,000 S$35,000 S$55,000 S$35,000 S$50,000 S$35,000 The Board, with the support of Management, is responsible for providing a balanced and understandable assessment of FCT’s performance, position and prospects, on a quarterly basis. Quarterly and annual financial statements and other material information are disseminated to Unitholders through announcements to the SGX-ST, and, where applicable, press releases. Financial statements of FCT are prepared in accordance with the Singapore Financial Reporting Standards prescribed by the Accounting Standards Council. Principle 11: Risk Management and Internal Controls During FY2013, risk tolerance statements setting out the nature and extent of significant risks which the Manager is willing to take in achieving its strategic objectives have been formalised and adopted. The Manager has established a system of internal controls comprising procedures and processes to safeguard FCT’s assets, Unitholders’ interests as well as to manage risks. The Audit Committee reviews and reports to the Board on the adequacy of the system of controls, including financial, operational, compliance and information technology controls, and risk management policies and systems established by Management. The Audit Committee reviews the risk profiles of FCT and the Manager, and guides Management to ensure that robust risk management and internal controls are in place. Effective risk management is fundamental to FCT’s business strategy. Key risks, control measures and management actions are continually identified, reviewed and monitored by Management as part of the Manager’s enterprise-wide risk management framework. Financial and operational key risk indicators are in place to track key risk exposures. In addition, each transaction is comprehensively analysed to understand the risks involved before it is undertaken. In assessing business risks, the Board considers the economic environment and risks pertaining to the relevant industry. It reviews management reports and feasibility studies on major transactions prior to their approval. Using a comfort matrix of key risks, the material financial, operational, compliance and information technology risks of the FCT Group have been documented and presented against strategies, policies, people, processes, systems, mechanism and reporting processes that have been put in place. An outline of the Manager’s enterprise-wide risk management framework and progress report is set out on page 31. Opinion of the Board on Internal Controls and Risk Management Framework Based on internal controls and risk management framework established and maintained by the Manager, work performed by internal and external auditors and reviews performed by Management and the Audit Committee, the Board, with the concurrence of the Audit Committee, is of the opinion that the Manager’s internal controls were adequate as at 30 September 2013 to address financial, operational compliance and information technology risks of FCT, which the Manager considers relevant and material to its operations. 62 Frasers Centrepoint trust Corporate GovernanCe report The Board notes that the system of internal controls and risk management provides reasonable, but not absolute, assurance that the Manager will not be adversely affected by any event that could be reasonably foreseen as it works to achieve its business objectives. In this regard, the Board also notes that no system of internal controls and risk management can provide absolute assurance against the occurrence of material errors, poor judgment in decision making, human error, losses, fraud or other irregularities. The Board has received assurances from the CEO and the Financial Controller of the Manager the following: • • that the financial records have been properly maintained and the financial statements are presented fairly in all material respects the Group’s operations and finances. To the best of their knowledge, they are not aware of any events that have arisen which would have a material effect on the financial results of FCT and its subsidiary, except as disclosed in the financial results, and nothing has come to their attention which may render the financial results false or misleading. that the system of risk management and internal controls in place for FCT were adequate and effective as at 30 September 2013 to address financial, operational, compliance and information technology risks which the Manager considers relevant and material to FCT’s operations. Principle 12: Audit Committee The Audit Committee comprises three Non-executive Directors, two of whom including the Chairman, are independent: name Mr Bobby Chin Yoke Choong Mr Anthony Cheong Fook Seng Mr Soh Kim Soon role Chairman Member Member Members of the Audit Committee are appropriately qualified to discharge their responsibilities, possessing the requisite accounting and financial management expertise and experience. The Audit Committee is governed by written terms of reference, with explicit authority to investigate any matter within its terms of reference. It has full access to, and the co-operation of Management, and full discretion to invite any Director or executive officer to attend its meetings. It has reasonable resources to enable it to discharge its functions effectively. The Audit Committee’s responsibilities include: • • reviewing the effectiveness of the Manager’s internal control processes including financial, compliance and risk management controls/ framework, reviewing the results of audit findings, and directing prompt remedial action by Management; reviewing the financial statements and the audit report for recommendation to the Board for approval; • monitoring Management’s compliance with applicable rules and legislation, such as the listing rules of the SGX-ST, the Code on CIS and the SFA; • • • • • reviewing with the external auditors, the audit plans, audit reports and their evaluation of the system of internal controls; reviewing the appointment and re-appointment of the external auditors and their fees and recommending the same to the Board for approval, as well as reviewing the adequacy of external audits in respect of cost, scope and performance; reviewing the independence and objectivity of the external auditors, taking into consideration the non-audit services provided by the external auditors. For FY2013, an aggregate amount in fees, comprising audit fees of $89,000 and non-audit fees of $25,300 was paid/ payable to FCT’s external auditors; reviewing the adequacy and effectiveness of the internal audit function, including its resources, audit plans and the scope and effectiveness of the internal audit procedures; and reviewing Interested Person/Party Transactions to ascertain compliance with internal procedures and provisions of applicable laws and regulations; annual report 2013 63 In discharging its duties, the Audit Committee met with the internal and external auditors and reviewed both their audit plans and reports, and the assistance given by the Manager to the auditors. All audit findings and recommendations are presented to the Audit Committee for discussion. In addition, updates on changes in accounting standards and treatment are prepared by external auditors and circulated to members of the Audit Committee periodically. The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board the nomination of the external auditors for re-appointment. The Audit Committee has reviewed the nature and extent of non-audit services provided by the external auditors, and is satisfied that they do not affect the independence and objectivity of the external auditors. The Manager, on behalf of FCT, confirms that FCT has complied with Rule 712 and Rule 715 of the Listing Manual in relation to its auditing firm. WhIstle-BloWIng PolIcy A Whistle-Blowing Policy is in place to provide an avenue through which employees may report or communicate, in good faith and in confidence, any concerns relating to financial and other matters, so that independent investigation of such matters can be conducted and appropriate follow-up action taken. Principle 13: Internal Audit The Manager has in place an internal audit function which was supported by F&N’s Internal Audit Department (“F&N IA”) for the financial year ended 30 September 2013. The F&N IA is independent of the activities that it audits. The Head of F&N IA, who is a Chartered Accountant of Singapore, reported directly to the Chairman of the Audit Committee and administratively, to the Group Company Secretary of F&N. The Head of F&N IA and most of the internal audit staff are members of the Institute of Internal Auditors, Singapore and the department has adopted and complied with the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors. To ensure that the internal audits are effectively performed, it recruits and employs suitably qualified staff with the requisite skills and experience. Such staff are also given relevant training and development opportunities to update their technical knowledge and auditing skills. Key staff members of the F&N IA also receive relevant technical training and seminars organised by the Institute of Internal Auditors, Singapore and other professional bodies. The F&N IA operates within the framework stated in its terms of reference. It adopts a risk-based audit methodology to develop its audit plans, and its activities are aligned to key risks of FCT. Based on risk assessments performed, greater focus and appropriate review intervals are set for higher risk activities, and material internal controls, including compliance with FCT and the Manager’s policies, procedures and regulatory responsibilities. During the year, F&N IA conducted its audit reviews based on the approved internal audit plans. All audit reports detailing audit findings and recommendations are provided to Management who would respond on the actions to be taken. Each quarter, F&N IA would submit to the Audit Committee a report on the status of the audit plan and on audit findings and actions taken by Management on such findings. Key findings are highlighted at the Audit Committee meetings for discussion and follow-up action. The Audit Committee monitors the timely and proper implementation of required corrective, preventive or improvement measures undertaken by Management. The Audit Committee is satisfied that for the financial year ended 30 September 2013, the internal audit function is adequately resourced to perform its functions, and has appropriate standing within FCT and the Manager. unItholder rIghts and resPonsIBIlItIes Principle 14: Unitholder Rights The Manager believes in treating all Unitholders fairly and equitably. It aspires to keep all Unitholders and other stakeholders and analysts in Singapore and beyond informed of FCT’s activities, including changes (if any) in FCT’s business which are likely to materially affect the price or value of its Units, in a timely and consistent manner. 64 Frasers Centrepoint trust Corporate GovernanCe report Unitholders are also given the opportunity to participate effectively and vote at general meetings of FCT, where relevant rules and procedures governing such meetings (for instance, how to vote) are clearly communicated. Principle 15: Communication with Unitholders The Manager strives to uphold high standards of disclosure and corporate transparency. It aims to provide timely, effective and fair information relating to the FCT’s performance and its developments to its Unitholders and the investment community through announcements to the SGX-ST and on FCT’s website, to enable them to make informed investment decisions. The Manager has a dedicated investor relations manager (“IR manager”) to facilitate communication between FCT, its Unitholders and the investment community. The Manager meets and communicates regularly with Unitholders and the investment community to keep them apprised of FCT’s corporate developments and financial performance. During the year, the senior Management and the IR manager, met or spoke with 273 investors at investment conferences, non-deal road shows as well as one-on-one and group meetings. The Manager also conducts post-result briefings for analysts and the media, following the release of its half year and full year results. For its first quarter and third quarter results, this is done by conference calls. The Manager makes available all its briefing materials, its financial information, its annual reports and all announcements to the SGX-ST on its website at www.fct.sg, with contact details for investors to channel their comments and queries. Principle 16: Conduct of Unitholder Meetings All Unitholders are sent a copy of the Annual Report. In compliance with the Property Funds Guidelines, an Annual General Meeting (“AGM”) was held during the year. The Board supports and encourages active Unitholder participation at AGMs. It believes that AGMs serve as an opportune forum for Unitholders to meet the Board and senior Management, and to interact with them. A Unitholder is allowed to appoint one or two proxies to attend and vote at the general meetings on his/her behalf. Board members and appropriate senior Management are present at each Unitholders’ meeting to respond to any questions from Unitholders. The external auditors are also present to address queries about the conduct of audit and the preparation and content of the auditors’ report. For greater transparency, the Manager has implemented electronic poll voting at its AGMs, whereby Unitholders are invited to vote on relevant resolutions by way of poll (instead of by show of hands), using hand held electronic devices. This allows all Unitholders present or represented at the meeting to vote on a one vote per Unit basis. The voting results of all votes cast for, or against, of each resolution are displayed at the meeting and announced to the SGX-ST after the meeting. The Manager will continue to use the electronic poll voting system at the forthcoming AGM. dealIngs In unIts The Manager has adopted a dealing policy (“Dealing Policy”) on securities trading which provides guidance with regard to dealings in FCT units by its Directors, officers and employees. Directors, officers and employees are prohibited from dealing in FCT units: • • in line with the Listing Rule 1207(19)(c) on Dealings in Securities, two weeks before the date of announcement of quarterly financial statements and one month before the date of announcement of full-year results (“Prohibition Period”); and at any time while in possession of unpublished material or price sensitive information. Directors, officers and employees are also directed to refrain from dealing in FCT units on short-term considerations. Prior to the commencement of the Prohibition Period, Directors, officers and employees will be reminded not to trade during this period or whenever they are in possession of unpublished price sensitive information. Outside of the Prohibition Period, any trades must be reported to the Board within 48 hours. Every quarter, each Director, officer or employee is required to complete and submit a declaration form to the Compliance Officer to report any trades he/she made in FCT units in the previous quarter and confirm that no trades were made during the Prohibition Period. A quarterly report will be provided to the Audit Committee. Any non-compliance with the Dealing Policy will be reported to Audit Committee for its review and instructions. In compliance with the Dealing Policy in relation to the Manager, prior approval from the Board is required before the Manager deals or trades in FCT units. The Manager has undertaken that it will not deal in FCT units: annual report 2013 65 a) during the period commencing one month before the public announcement of FCT’s full-year results and (where applicable) property valuations and two weeks before the public announcement of FCT’s quarterly results; or b) whenever it is in possession of unpublished material price sensitive information. The Manager has also given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its holdings in FCT units and any changes thereto within two business days after the date on which it acquires or disposes of any FCT units, as the case may be. conFlIcts oF Interest The Manager has put in place procedures to address potential conflicts of interest (including in relation to Directors, officers and employees) which may arise in managing FCT. These include the following: • The Manager is to be dedicated to managing FCT and will not directly or indirectly manage other REITs. • All executive officers of the Manager will be employed by the Manager. • All resolutions in writing of the Directors in relation to matters concerning FCT must be approved by a majority of the Directors, including at least one Independent Director. • At least one-third of the Board shall comprise Independent Directors. • On matters where FCL and/or its subsidiaries have an interest (directly or indirectly), Directors nominated by them shall abstain from voting. In such matters, the quorum must comprise a majority of independent Directors and must exclude nominee Directors of FCL and/or its subsidiaries. • An interested Director is required to disclose his interest in any proposed transaction with FCT and is required to abstain from voting on resolutions approving the transaction. related Party transactIons The Manager has established internal control procedures to ensure that all related party transactions (“RPT”) are undertaken on normal commercial terms, and will not be prejudicial to the interests of FCT and the Unitholders. This may entail obtaining (where practicable) quotations from parties unrelated to the Manager, or obtaining one or more valuations from independent professional valuers (in accordance with the Property Funds Guidelines). All RPT are entered in a register maintained by the Manager, including any quotations from unrelated parties and independent valuations supporting the bases on which such transactions are entered into. The Manager incorporates into its internal audit plan a review of the RPT recorded in the register to ascertain that internal procedures and requirements of the Listing Manual and Property Funds Guidelines have been complied with. The Audit Committee reviews the internal audit reports twice a year to ascertain that the guidelines and procedures established to monitor RPT have been complied with. In addition, the Trustee also has the right to review any such relevant internal audit reports to ascertain that the Property Fund Guidelines have been complied with. In respect of transactions entered into or to be entered into by the Trustee for and on behalf of FCT with a related party of the Manager (which would include relevant Associates (as defined in the Listing Manual) thereof ) or FCT, the Trustee is required to satisfy itself that such transactions are conducted on normal commercial terms, are not prejudicial to the interests of FCT and the Unitholders, and in accordance with all applicable requirements of the Property Funds Guidelines and/or the Listing Manual. The Trustee has the ultimate discretion under the Trust Deed entered into between the Trustee and the Manager constituting FCT to decide whether or not to enter into such a transaction involving a related party of the Manager or FCT. role oF the audIt coMMIttee For related Party transactIons The Audit Committee reviews RPT periodically to ensure compliance with the internal control procedures and the relevant provisions of the Listing Manual and Property Funds Guidelines. Any member who has an interest in a transaction shall abstain from participating in the review and approval processes in relation to that transaction. 66 Frasers Centrepoint trust FinanCials annual report 2013 67 report oF tHe trustee HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the assets of Frasers Centrepoint Trust (the “Trust”) and its subsidiary (collectively, the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). In accordance with the Securities and Futures Act, Chapter 289, of Singapore, its subsidiary legislation and the Code on Collective Investment Schemes, the Trustee shall monitor the activities of Frasers Centrepoint Asset Management Ltd. (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set out in the trust deed dated 5 June 2006 (as amended and restated) (the “Trust Deed”) between the Manager and the Trustee in each annual accounting period and report thereon to Unitholders in an annual report. To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the period covered by these financial statements set out on pages 70 to 108 in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed. For and on behalf of the Trustee, HSBC Institutional Trust Services (Singapore) Limited Antony Wade Lewis Director Singapore 12 November 2013 68 Frasers Centrepoint trust stateMent BY tHe ManaGer In the opinion of the directors of Frasers Centrepoint Asset Management Ltd., the accompanying financial statements set out on pages 70 to 108, comprising the Balance Sheets and Portfolio Statements as at 30 September 2013, the Statements of Total Return, Distribution Statements, Statements of Movements in Unitholders’ Funds and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory notes are drawn up so as to present fairly, in all material respects, the financial positions of the Group and the Trust as at 30 September 2013, the total return, distributable income, movements in Unitholders’ funds of the Group and of the Trust and cash flow of the Group for the year ended on that date in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants and the provisions of the Trust Deed. At the date of this statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet their financial obligations as and when they materialise. For and on behalf of the Manager, Frasers Centrepoint Asset Management Ltd. Mr Philip Eng Heng Nee Director Dr Chew Tuan Chiong Director and Chief Executive Officer Singapore 12 November 2013 annual report 2013 69 inDepenDent auDitor’s report to tHe unitHolDers oF Frasers Centrepoint trust (Constituted in the republic of singapore pursuant to a trust deed dated 5 June 2006 (as amended and restated)) We have audited the accompanying financial statements of Frasers Centrepoint Trust (the “Trust”) and its subsidiary (collectively, the “Group”), which comprise the Balance Sheets and Portfolio Statements of the Group and the Trust as at 30 September 2013, the Statements of Total Return, Distribution Statements, Statements of Movements in Unitholders’ Funds of the Group and the Trust and Cash Flow Statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 70 to 108. Manager’s resPonsIBIlIty For the FInancIal stateMents The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants, and for such internal control as the Manager determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. audItor’s resPonsIBIlIty Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trust’s preparation and fair presentation of financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. oPInIon In our opinion, the financial statements present fairly, in all material respects, the financial positions of the Group and the Trust as at 30 September 2013, the total return, distributable income and movements in Unitholders’ funds of the Group and the Trust and cash flows of the Group for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants. ERNST & YOUNG LLP Public Accountants and Chartered Accountants Singapore 12 November 2013 70 Frasers Centrepoint trust BalanCe sHeets as at 30 september 2013 Non-current assets Investment properties Fixed assets Investment in subsidiary Investment in associate Current assets Trade and other receivables Cash and cash equivalents Total assets Current liabilities Trade and other payables Current portion of security deposits Deferred income Interest-bearing borrowings Non-current liabilities Interest-bearing borrowings Non-current portion of security deposits Deferred income Total liabilities Net assets Represented by:- Unitholders’ funds Translation reserve Unitholders’ funds and reserve Units in issue (‘000) Net asset value per Unit * Denotes amount less than $500 group trust note 2013 $’000 2012 $’000 2013 $’000 2012 $’000 3 4 5 6 7 8 9 10 11 11 10 12 13 14 2,019,500 121 – 71,727 2,091,348 3,456 39,706 43,162 2,134,510 45,662 14,249 704 60,000 120,615 529,000 21,990 550 551,540 1,816,000 129 – 71,819 1,887,948 6,302 22,869 29,171 1,917,119 39,868 13,817 734 58,000 112,419 519,000 22,036 634 541,670 2,019,500 121 * 63,843 2,083,464 3,456 39,706 43,162 2,126,626 45,671 14,249 704 60,000 120,624 529,000 21,990 550 551,540 1,816,000 129 * 63,843 1,879,972 6,302 22,869 29,171 1,909,143 39,875 13,817 734 58,000 112,426 519,000 22,036 634 541,670 672,155 1,462,355 654,089 1,263,030 672,164 1,454,462 654,096 1,255,047 1,470,618 (8,263) 1,268,401 (5,371) 1,454,462 – 1,255,047 – 1,462,355 1,263,030 1,454,462 1,255,047 824,383 $ 1.77 823,200 $ 1.53 824,383 $ 1.76 823,200 $ 1.52 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. annual report 2013 71 stateMents oF total return for the Financial Year ended 30 september 2013 Gross revenue Property expenses Net property income Interest income Borrowing costs Asset management fees Valuation fees Trustee’s fees Audit fees Other professional fees Other charges Net income Distribution from associate Share of results of associate - operations - revaluation surplus Surplus on revaluation of investment properties Unrealised gain from fair valuation of derivatives Total return before tax Taxation Total return for the year Earnings per Unit (cents) Basic Diluted note 15 16 17 18 3 19 20 group trust 2013 $’000 157,959 (46,369) 111,590 35 (17,704) (11,520) (88) (326) (87) (574) (410) 80,916 – 4,910 2,333 195,741 3,866 287,766 – 287,766 2012 $’000 147,203 (42,773) 104,430 7 (18,245) (10,713) (110) (309) (106) (440) (474) 74,040 – 4,352 6,064 100,759 352 185,567 – 185,567 2013 $’000 157,959 (46,369) 111,590 35 (17,704) (11,520) (88) (326) (87) (574) (412) 80,914 4,443 – – 195,741 3,866 284,964 – 284,964 2012 $’000 147,203 (42,773) 104,430 7 (18,245) (10,713) (110) (309) (106) (440) (477) 74,037 3,873 – – 100,759 352 179,021 – 179,021 34.93 34.93 22.56 22.56 34.59 34.59 21.76 21.76 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 72 Frasers Centrepoint trust DistriBution stateMents for the Financial Year ended 30 september 2013 Income available for distribution to Unitholders at beginning of year Net income Net tax adjustments (Note A) Distributions from associate Income available for distribution to Unitholders Distributions to Unitholders: Distribution of 2.07 cents per Unit for period from 1/7/2011 to 22/9/2011 Distribution of 0.28 cents per Unit for period from 23/9/2011 to 30/9/2011 Distribution of 2.20 cents per Unit for period from 1/10/2011 to 31/12/2011 Distribution of 2.50 cents per Unit for period from 1/1/2012 to 31/3/2012 Distribution of 2.60 cents per Unit for period from 1/4/2012 to 30/6/2012 Distribution of 2.71 cents per Unit for period from 1/7/2012 to 30/9/2012 Distribution of 2.40 cents per Unit for period from 1/10/2012 to 31/12/2012 Distribution of 2.70 cents per Unit for period from 1/1/2013 to 31/3/2013 Distribution of 2.85 cents per Unit for period from 1/4/2013 to 30/6/2013 group trust 2013 $’000 22,354 80,916 4,772 4,443 90,131 112,485 – – – – – 22,317 19,772 22,250 23,495 87,834 2012 $’000 18,357 74,040 4,435 3,873 82,348 100,705 15,977 2,303 18,096 20,572 21,403 – – – – 78,351 2013 $’000 22,351 80,914 4,774 4,443 90,131 112,482 – – – – – 22,317 19,772 22,250 23,495 87,834 2012 $’000 18,354 74,037 4,438 3,873 82,348 100,702 15,977 2,303 18,096 20,572 21,403 – – – – 78,351 Income available for distribution to Unitholders at end of year 24,651 22,354 24,648 22,351 Note A – Net tax adjustments relate to the following items: - Asset management fees paid/payable in Units - Trustee’s fees - Amortisation of loan arrangement fees - Amortisation of lease incentives - Deferred income and amortisation of rental deposits - Other items Net tax adjustments 2,304 326 674 1,004 – 464 4,772 2,402 309 671 (1,288) 12 2,329 4,435 2,304 326 674 1,004 – 466 4,774 2,402 309 671 (1,288) 12 2,332 4,438 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. annual report 2013 73 stateMents oF MoveMents in unitHolDers’ FunDs anD translation reserve for the Financial Year ended 30 september 2013 Net assets at beginning of year Operations Total return for the year Unitholders’ transactions Creation of Units - issued as satisfaction of acquisition fee - issued as satisfaction of asset management fees Issue expense adjustment Distributions to Unitholders Net decrease in net assets resulting from Unitholders’ transactions Movement in translation reserve (Note 12) group trust 2013 $’000 2012 $’000 2013 $’000 2012 $’000 1,263,030 1,151,858 1,255,047 1,149,407 287,766 185,567 284,964 179,021 – 2,285 – (87,834) 1,270 3,655 45 (78,351) – 2,285 – (87,834) 1,270 3,655 45 (78,351) (85,549) (73,381) (85,549) (73,381) (2,892) (1,014) – – Net assets at end of year 1,462,355 1,263,030 1,454,462 1,255,047 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 74 Frasers Centrepoint trust portFolio stateMents as at 30 september 2013 grouP description of Property term of lease location existing use occupancy rate as at 30 september 2013 % at Valuation Percentage of total assets 2013 $’000 2012 $’000 2013 % 2012 % Investment properties in Singapore Causeway Point Northpoint 99-year leasehold from 30 October 1995 99-year leasehold from 1 April 1990 Anchorpoint Freehold YewTee Point Bedok Point 99-year leasehold from 3 January 2006 99-year leasehold from 15 March 1978 1 Woodlands Square 930 Yishun Avenue 2 368 & 370 Alexandra Road 21 Choa Chu Kang North 6 799 New Upper Changi Road Investment properties, at valuation Investment in associate (Note 6) Other assets Total assets attributable to Unitholders Commercial 99.5 1,006,000 890,000 47.1 46.4 Commercial 99.3 638,000 570,000 29.9 29.7 Commercial 96.9 86,000 81,000 Commercial 92.7 161,000 147,000 4.0 7.6 4.2 7.7 Commercial 96.7 128,500 128,000 6.0 6.7 2,019,500 71,727 2,091,227 43,283 2,134,510 1,816,000 71,819 1,887,819 29,300 1,917,119 94.6 3.4 98.0 2.0 100.0 94.7 3.8 98.5 1.5 100.0 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. annual report 2013 75 portFolio stateMents as at 30 september 2013 trust description of Property term of lease location existing use occupancy rate as at 30 september 2013 % at Valuation Percentage of total assets 2013 $’000 2012 $’000 2013 % 2012 % Investment properties in Singapore Causeway Point Northpoint 99-year leasehold from 30 October 1995 99-year leasehold from 1 April 1990 Anchorpoint Freehold YewTee Point Bedok Point 99-year leasehold from 3 January 2006 99-year leasehold from 15 March 1978 1 Woodlands Square 930 Yishun Avenue 2 368 & 370 Alexandra Road 21 Choa Chu Kang North 6 799 New Upper Changi Road Investment properties, at valuation Investment in associate (Note 6) Other assets Total assets attributable to Unitholders Commercial 99.5 1,006,000 890,000 47.3 46.6 Commercial 99.3 638,000 570,000 30.0 29.9 Commercial 96.9 86,000 81,000 Commercial 92.7 161,000 147,000 4.1 7.6 4.3 7.7 Commercial 96.7 128,500 128,000 6.0 6.7 2,019,500 63,843 2,083,343 43,283 2,126,626 1,816,000 63,843 1,879,843 29,300 1,909,143 95.0 3.0 98.0 2.0 100.0 95.2 3.3 98.5 1.5 100.0 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 76 Frasers Centrepoint trust portFolio stateMents as at 30 september 2013 On 30 September 2013, independent valuations of the investment properties were undertaken by Knight Frank Pte Ltd (“Knight Frank”), Jones Lang LaSalle Property Consultants Pte Ltd (“JLL”), and Colliers International Consultancy & Valuation (Singapore) Pte Ltd (“Colliers”). The Manager believes that these independent valuers possess appropriate professional qualifications and recent experience in the location and category of the investment properties being valued. The valuations were performed based on the following methods: description of Property Causeway Point Northpoint Anchorpoint Valuer Valuation Method Knight Frank (2012: JLL) Colliers (2012: Colliers) Capitalisation approach and discounted cash flows and capitalisation (2012: discounted cash flows) approach Direct comparison method, investment method and discounted cash (2012: direct comparison method, investment method and discounted cash flows) flows Knight Frank (2012: Knight Frank) Capitalisation approach and discounted cash flows (2012: capitalisation approach and discounted cash flows) YewTee Point Knight Frank (2012: Knight Frank) Capitalisation approach and discounted cash flows (2012: capitalisation approach and discounted cash flows) Bedok Point JLL (2012: Knight Frank) Capitalisation approach and discounted cash flows (2012: capitalisation approach and discounted cash flows) Valuation 2013 $’000 2012 $’000 1,006,000 890,000 638,000 570,000 86,000 81,000 161,000 147,000 128,500 128,000 The net changes in fair values of these investment properties have been recognised in the Statements of Total Return in accordance with the Group’s accounting policies. The investment properties are leased to third party tenants. Generally, these leases contain an initial non-cancellable period of three years. Subsequent renewals are negotiated with individual lessees. Contingent rent, which comprises gross turnover rent, recognised in the Statements of Total Return amounted to $7,802,000 (2012: $7,404,000). The accompanying accounting policies and explanatory notes form an integral part of the financial statements. annual report 2013 77 CasH FloW stateMent for the Financial Year ended 30 september 2013 Operating activities Total return before tax Adjustments for: Allowance for doubtful receivables Bad debts written off Write back of allowance for doubtful receivables Borrowing costs Interest income Asset management fees paid/payable in Units Depreciation of fixed assets Share of associate’s results (including revaluation surplus) Surplus on revaluation of investment properties Unrealised gain from fair valuation of derivatives Amortisation of lease incentives Deferred income recognised Operating income before working capital changes Changes in working capital: Trade and other receivables Trade and other payables Cash flows from operating activities Investing activities Distributions received from associate Interest received Capital expenditure on investment properties Acquisition of fixed assets Investment in associate Cash flows used in investing activities Financing activities Proceeds from borrowings Repayment of borrowings Borrowing costs paid Distributions to Unitholders Payment of issue and finance costs Cash flows used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (Note 8) sIgnIFIcant non-cash transactIons group 2013 $’000 2012 $’000 287,766 185,567 104 5 (70) 17,704 (35) 2,304 43 (7,243) (195,741) (3,866) 1,004 (986) 100,989 2,413 9,361 112,763 4,443 35 (9,483) (35) – (5,040) 70,000 (58,000) (14,772) (87,834) (280) (90,886) 16,837 22,869 39,706 130 – (290) 18,245 (7) 2,402 44 (10,416) (100,759) (352) (1,288) (964) 92,312 (611) 6,025 97,726 3,873 7 (19,000) (39) (12,533) (27,692) 183,000 (165,000) (16,549) (78,351) (755) (77,655) (7,621) 30,490 22,869 During the financial year, 1,181,891 (2012: 1,519,456) Units were issued and issuable in satisfaction of asset management fees payable in Units, amounting to a value of $2,304,013 (2012: $2,401,705) in respect of the financial year ended 30 September 2013. The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 78 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 The following notes form an integral part of the financial statements. 1. general Frasers Centrepoint Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to a trust deed dated 5 June 2006, and any amendment or modification thereof (the “Trust Deed”), between Frasers Centrepoint Asset Management Ltd. (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”). The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee is under a duty to take into custody and hold the assets of the Trust and its subsidiary (collectively, the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). The address of the Trustee’s registered office is 21 Collyer Quay #10-02 HSBC Building Singapore 049320. The Trust was formally admitted to the Official List of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 5 July 2006 and was included in the Central Provident Fund Investment Scheme (“CPFIS”) on 5 July 2006. The principal activity of the Trust is to invest in income-producing properties used primarily for retail purposes, in Singapore and overseas, with the primary objective of delivering regular and stable distributions to Unitholders and to achieve long-term capital growth. The principal activity of the subsidiary is set out in Note 5. The financial statements were authorised for issue by the Manager and the Trustee on 12 November 2013. The Trust has entered into several service agreements in relation to management of the Trust and its property operations. The fee structures of these services are as follows: (a) Property management fees Under the property management agreements, fees are charged as follows: (i) 2.0% per annum of the gross revenue of the properties; (ii) 2.0% per annum of the net property income of the properties (calculated before accounting for the property management fees); and (iii) 0.5% per annum of the net property income of the properties (calculated before accounting for the property management fees), in lieu of leasing commissions. The property management fees are payable monthly in arrears. (b) Asset management fees Pursuant to the Trust Deed, asset management fees comprise the following: (i) A base fee equal to a rate of 0.3% per annum of the value of Deposited Property (being all assets, as stipulated in the Trust Deed) of the Trust; and (ii) An annual performance fee equal to a rate of 5.0% per annum of the Net Property Income (as defined in the Trust Deed) of the Trust and any Special Purpose Vehicles (as defined in the Trust Deed) for each financial year. Any increase in the rate or any change in the structure of the asset management fees must be approved by an Extraordinary Resolution of Unitholders passed at a Unitholders’ meeting duly convened and held in accordance with the provisions of the Trust Deed. The Manager may elect to receive the fees in cash or Units or a combination of cash and Units (as it may in its sole discretion determine). For the year ended 30 September 2013, the Manager has opted to receive an average of 20% (2012: 22%) of the asset management fees in the form of Units with the balance in cash. The portion of the asset management fees in the form of Units is payable on a quarterly basis in arrears, and the portion in cash is payable on a monthly basis in arrears. annual report 2013 79 notes to tHe FinanCial stateMents 30 september 2013 1. general (cont’d) (b) Asset management fees (cont’d) The Manager is also entitled to receive acquisition fee at the rate of 1% of the acquisition price and a divestment fee of 0.5% of the sale price on all future acquisitions or disposals of properties or investments. (c) Trustee’s fees Pursuant to the Trust Deed, the Trustee’s fees shall not exceed 0.1% per annum of the value of Deposited Property of the Trust, subject to a minimum of $9,000 per month, excluding out-of-pocket expenses and GST. Any increase in the maximum permitted or any change in the structure of the Trustee’s fee must be approved by an Extraordinary Resolution of Unitholders passed at a Unitholders’ meeting duly convened and held in accordance with the provisions of the Trust Deed. The Trustee’s fees are payable monthly in arrears. 2. suMMary oF sIgnIFIcant accountIng PolIcIes (a) Basis of preparation The financial statements have been prepared in accordance with the recommendations of Statement of Recommended Accounting Practice (“RAP”) 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants (“ISCA”), the applicable requirements of the Code on Collective Investment Schemes (the “CIS Code”) issued by the Monetary Authority of Singapore (“MAS”) and the provisions of the Trust Deed. RAP 7 requires the accounting policies to generally comply with the principles relating to recognition and measurement under the Singapore Financial Reporting Standards (“FRS”). The financial statements, which are presented in Singapore dollars and rounded to the nearest thousand, unless otherwise stated, have been prepared on the historical cost basis except as disclosed in the accounting policies below. In June 2012, the ISCA issued a revised RAP 7 which is effective for unit trusts with annual periods beginning on or after 30 June 2012. The changes that have been brought about under the revised RAP 7 include the requirements to present statement of movements in unitholders’ funds by unit trusts, as well as statement of cash flow and statement of distribution by property funds. These changes have no material impact on the financial statements. The preparation of the financial statements in conformity with RAP 7 requires the Manager to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Financial impact arising from revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes: (i) Note 3 – Valuation of investment properties (ii) Note 6 – Accounting for investment in associate (b) Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards which are effective for annual periods beginning on 1 October 2012. The adoption of these standards did not have any material effect on the financial performance or position of the Group and the Trust. 80 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (c) Standards issued but not yet effective The Group has not adopted the following standards that have been issued but not yet effective: FRS 113 Fair Value Measurement Improvements to FRSs 2012 - Amendment to FRS 16 Property, Plant and Equipment - Amendment to FRS 32 Financial Instruments: Presentation Revised FRS 27 Separate Financial Statements Revised FRS 28 Investments in Associates and Joint Ventures Amendments to FRS 36 Recoverable Amount Disclosures for Non-financial Assets FRS 110 Consolidated Financial Statements FRS 112 Disclosure of Interest in Other Entities effective date (annual period beginning on or after) 1 January 2013 1 January 2013 1 January 2013 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 The Manager expects that the adoption of the above standards will have no material impact on the financial statements in the period of initial application. (d) Foreign currency Transactions in foreign currencies are measured and recorded on initial recognition in Singapore dollars, the functional currency of the Trust and subsidiary, at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the Statement of Total Return except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in equity as translation reserve in the Balance Sheet and recognised in the Statement of Total Return on disposal of the foreign operation. For consolidation purposes, the assets and liabilities of foreign operations are translated into Singapore dollars at the rate of exchange ruling at the balance sheet date and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on translation are taken directly to a separate component of equity as translation reserve. On disposal of a foreign operation, the cumulative amount recognised in translation reserve relating to that particular foreign operation is recognised in the Statement of Total Return. When associates that are foreign operations are partially disposed, the proportionate share of the accumulated exchange differences is reclassified to the Statement of Total Return. (e) Investment properties Investment properties are stated at initial cost on acquisition, including transaction costs, and at valuation thereafter. Valuation is determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers in the following events: • In such manner and frequency required under the CIS Code issued by the MAS; and • At least once in each period of 12 months following the acquisition of each parcel of real estate property. annual report 2013 81 notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (e) Investment properties (cont’d) Any increase or decrease on revaluation is credited or charged to the Statement of Total Return as a net revaluation surplus or deficit in the value of the investment properties. Subsequent expenditure relating to investment properties that have already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of originally assessed standard of performance of the existing asset, will flow to the Group and the Trust. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the Statement of Total Return in the year of retirement or disposal. Investment properties are not depreciated. Investment properties are subject to continual maintenance and regularly revalued on the basis set out above. For taxation purposes, the Group and the Trust may claim capital allowances on assets that qualify as plant and machinery under the Income Tax Act. (f ) Basis of consolidation and investment in subsidiary A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the Trust’s balance sheet, investment in subsidiary is accounted for at cost less any impairment losses. The consolidated financial statements incorporate the financial statements of the Trust and its subsidiary as of the balance sheet date. The financial statements of the subsidiary used in the preparation of the consolidated financial statements are prepared for the same reporting date and using consistent accounting policies as the Trust. A subsidiary is consolidated from the date of acquisition, being the date on which the Group obtains control, and continues to be consolidated until the date that such control ceases. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full. Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration, if deemed to be an asset or liability within the scope of FRS 39, will be recognised either in the Statement of Total Return or as change to a separate component of equity. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity. In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in the Statement of Total Return. The Group elects for each individual business combination whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. 82 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (f ) Basis of consolidation and investment in subsidiary (cont’d) Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non- controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in the Statement of Total Return on the acquisition date. (g) Investment in associate An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. The Group’s investment in associate is accounted for using the equity method. Under the equity method, the investment in associate is stated in the Balance Sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associate. The Group’s share of results of the associate is recognised in the Statement of Total Return. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes in equity. After application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in the associate. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the Statement of Total Return. The associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. Goodwill relating to an associate is included in the carrying amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s results in the period in which the investment is acquired. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured receivables, the Group does not recognise further losses unless it has incurred obligations or made payments on behalf of the associate. Where the dates of the financial statements of the associate are not co-terminous with those of the Group, the share of results is arrived at from the last audited financial statements available and un-audited management accounts to the end of the accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in the Statement of Total Return. (h) Fixed assets Fixed assets are stated at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. The cost of a fixed asset is recognised as an asset if, and only if, it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repair are charged to the Statement of Total Return. When assets are derecognised upon disposal or when no future economic benefits are expected from their use or disposal, their cost and accumulated depreciation are removed from the financial statements and any gain or loss on derecognition of the assets is included in the Statement of Total Return. annual report 2013 83 notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (h) Fixed assets (cont’d) Fixed assets are depreciated on the straight line method so as to write off the cost of the fixed assets over their estimated useful lives. The principal annual rates of depreciation for equipment, furniture and fittings range from 10% to 20%. The carrying values of fixed assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate. (i) Impairment of non-financial assets The Group assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An impairment loss is recognised in the Statement of Total Return whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. If such indication exists, the recoverable amount is estimated. An impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Reversal of an impairment loss is recognised in the Statement of Total Return. After such a reversal, the depreciation charge, if any, is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (j) Financial assets The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective interest method, less any impairment losses. Gains or losses are recognised in the Statement of Total Return when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets classified as held for trading include derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by FRS 39. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised in the Statement of Total Return. 84 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (j) Financial assets (cont’d) Financial assets are recognised on the Balance Sheet when, and only when, the Group becomes a party to the contractual provisions of the instruments. Financial assets are derecognised when the contractual rights to receive cash flows from the assets have expired. On derecognition, the difference between the carrying amount and the consideration received is recognised in the Statement of Total Return. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. (k) Cash and cash equivalents Cash and cash equivalents comprise cash balances and bank deposits. (l) Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. For financial assets carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of impairment loss is calculated as the difference between its carrying amount, and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss and any subsequent write-back is recognised in the Statement of Total Return. When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset. To determine whether there is objective evidence that an impairment loss on financial assets has incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the Statement of Total Return to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. (m) Financial liabilities Financial liabilities are recognised on the Balance Sheet when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition. Financial liabilities are initially recognised at the fair value of consideration received, and in the case of financial liabilities other than those designated at fair value through profit or loss, less directly attributable transaction costs. annual report 2013 85 notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (m) Financial liabilities (cont’d) Financial liabilities that are designated at fair value through profit or loss include financial liabilities held for trading. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments such as interest rate swaps entered into by the Group to hedge its risks associated with interest rate fluctuations. Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in the Statement of Total Return. After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the Statement of Total Return when the liabilities are derecognised and through the amortisation process. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. (n) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as finance cost. (o) Security deposits and deferred income Security deposits relate to rental deposits received from tenants at the Group’s investment properties. The accounting policy for security deposits as a financial liability is set out in Note 2(m). Deferred income relates to the difference between consideration received for security deposits and its fair value at initial recognition, and is credited to the Statement of Total Return as gross rental income on a straight line basis over individual lease term. (p) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset even if that right is not explicitly specified in an arrangement. Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2(q)(i). (q) Revenue recognition Revenue is recognised to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable, excluding discounts, rebates, and sales taxes or duty. The following specific recognition criteria must also be met before revenue is recognised: 86 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (q) Revenue recognition (cont’d) (i) Rental income Rental income receivable under operating leases is recognised in the Statement of Total Return on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as an integral part of the total rental to be received. The aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line basis. Contingent rent, which comprises gross turnover rental, is recognised as income in the period in which it is earned. (ii) Interest income Interest income is recognised in the Statement of Total Return using the effective interest method. (r) Expenses (i) Property expenses Property expenses are recognised on an accrual basis. Included in property expenses are property management fees which are based on the applicable formula stipulated in Note 1(a). (ii) Asset management fees Asset management fees are recognised on an accrual basis based on the applicable formula stipulated in Note 1(b). (iii) Trust expenses Trust expenses are recognised on an accrual basis. Included in trust expenses are Trustee’s fees which are based on the applicable formula stipulated in Note 1(c). (s) Taxation (i) Current income tax Current income tax is the expected tax payable on the taxable income for the period, using tax rates and tax laws enacted or substantively enacted at the balance sheet date. (ii) Deferred tax Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is not recognised for temporary differences that: - Arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and - Are associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the assets are realised or the liabilities are settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. annual report 2013 87 notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (s) Taxation (cont’d) (iii) Tax transparency The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the income tax treatment of the Trust. Subject to meeting the terms and conditions of the tax ruling which includes a distribution of at least 90% of the taxable income of the Trust, the Trustee will not be assessed to tax on the taxable income of the Trust. Instead, the distributions made by the Trust out of such taxable income are subject to tax in the hands of Unitholders, unless they are exempt from tax on the Trust’s distributions (the “tax transparency ruling”). Accordingly, the Trustee and the Manager will deduct income tax at the prevailing corporate tax rate from the distributions made to Unitholders that are made out of the taxable income of the Trust, except: a) where the beneficial owners are individuals or Qualifying Unitholders, the Trustee and the Manager will make the distributions to such Unitholders without deducting any income tax; and b) where the beneficial owners are foreign non-individual investors or where the Units are held by nominee Unitholders who can demonstrate that the Units are held for beneficial owners who are foreign non-individual investors, the Trustee and the Manager will deduct/withhold tax at a reduced rate of 10% from the distributions. A Qualifying Unitholder is a Unitholder who is: (i) A tax resident Singapore-incorporated company; (ii) A non-corporate Singapore constituted or registered entity (e.g. town council, statutory board, charitable organisation, management corporation, club and trade and industry association constituted, incorporated, registered or organised in Singapore); (iii) A Singapore branch of a foreign company which has been presented a letter of approval from the Comptroller of Income Tax granting waiver from tax deducted at source in respect of distributions from the Trust; (iv) An agent bank or a Supplementary Retirement Scheme (“SRS”) operator acting as nominee for individuals who have purchased Units in the Trust within the CPFIS or the SRS respectively; or (v) A nominee who can demonstrate that the Units are held for beneficial owners who are individuals or who fall within the classes of Unitholders listed in (i) to (iii) above. The above tax transparency ruling does not apply to gains from the sale of real properties. Such gains, when determined by the IRAS to be trading gains, are assessable to tax on the Trustee. Where the gains are capital gains, the Trustee will not be assessed to tax and may distribute the capital gains without tax being deducted at source. (iv) Sales tax Revenue, expenses and assets are recognised net of the amount of sales tax except: - Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and - Receivables and payables that are stated with the amount of sales tax included. The net amount of sales tax recoverable from, or payable to, the IRAS is included as part of receivables or payables on the Balance Sheet. 88 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (t) Borrowing costs Borrowing costs are expensed in the period they occur, and consist of interest and other costs that the Group incurs in connection with the borrowing of funds. (u) Segment reporting For management purposes, the Group is organised into operating segments based on individual investment property within the Group’s portfolio. The Manager regularly reviews the segment results in order to allocate resources to the segments and to assess the segments’ performance. Additional disclosures on each of these segments are shown in Note 23, including the factors used to identify the reportable segments and the measurement basis of segment information. (v) Units and unit issuance expenses Proceeds from issuance of Units are recognised as Unithholders’ funds. Incremental costs directly attributable to the issuance of Units are deducted against Unitholders’ funds. (w) Contingencies A contingent liability is: a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or the Trust; or b) A present obligation that arises from past events but is not recognised because: (i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) The amount of the obligation cannot be measured with sufficient reliability. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or the Trust. Contingent liabilities and assets are not recognised on the Balance Sheets, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined. (x) Related parties A related party is defined as follows: a) A person or a close member of that person’s family is related to the Group if that person: (i) has control or joint control over the Group; (ii) has significant influence over the Group; or (iii) is a member of the key management personnel of the Group or of a parent of the Group. annual report 2013 89 notes to tHe FinanCial stateMents 30 september 2013 2. suMMary oF sIgnIFIcant accountIng PolIcIes (cont’d) (x) Related parties (cont’d) b) An entity is related to the Group if any of the following conditions applies: (i) the entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) both entities are joint ventures of the same third party. (iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. (vi) the entity is controlled or jointly controlled by a person identified in (a); (vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). 3. InVestMent ProPertIes At beginning Capital expenditure Surplus on revaluation At end group and trust 2013 $’000 1,816,000 8,763 1,824,763 194,737 2,019,500 2012 $’000 1,697,000 16,953 1,713,953 102,047 1,816,000 The investment properties owned by the Group and the Trust are set out in the Portfolio Statements. Northpoint has been mortgaged as security for a $264 million secured five-year term loan from DBS Bank Ltd, Oversea-Chinese Banking Corporation Limited and Standard Chartered Bank (Note 11). Bedok Point has been mortgaged as security for a $70 million secured five-year term loan from DBS Bank Ltd (Note 11). Investment properties are stated at fair value based on valuations performed by independent professional valuers. In determining the fair value, the valuers have used valuation methods which involve certain estimates. The key assumptions used to determine the fair value of investment properties include market-corroborated capitalisation yields, terminal yields and discount rates. The Manager is of the view that the valuation methods and estimates are reflective of the market conditions as at 30 September 2013. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently and without compulsion. 90 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 3. InVestMent ProPertIes (cont’d) The net change in fair value of the properties recognised in the Statements of Total Return has been adjusted for amortisation of lease incentives as follows: Surplus on revaluation Amortisation of lease incentives Surplus on revaluation recognised in Statements of Total Return group and trust 2013 $’000 194,737 1,004 195,741 2012 $’000 102,047 (1,288) 100,759 The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements other than as disclosed in Note 24. 4. FIXed assets Cost At beginning Additions Disposals At end Accumulated depreciation At beginning Charge for the year Disposals At end Carrying amount At beginning At end 5. InVestMent In suBsIdIary Unquoted equity investment, at cost * Denotes amount less than $500. equipment, furniture and fittings group and trust 2013 $’000 2012 $’000 277 35 (4) 308 148 43 (4) 187 129 121 246 39 (8) 277 112 44 (8) 148 134 129 trust 2013 $’000 * 2012 $’000 * annual report 2013 91 notes to tHe FinanCial stateMents 30 september 2013 5. InVestMent In suBsIdIary (cont’d) Details of the subsidiary are as follows: name of subsidiary FCT MTN Pte. Ltd. (1) (1) Audited by Ernst & Young LLP, Singapore Place of incorporation / business Singapore effective equity interest held by the trust 2013 % 100 2012 % 100 FCT MTN Pte. Ltd. (“FCT MTN”) is a wholly-owned subsidiary with share capital of $2 comprising 2 ordinary shares. The principal activity of the subsidiary is the provision of treasury services, including lending to the Trust the proceeds from issuance of notes under an unsecured multicurrency medium term note programme. 6. InVestMent In assocIate Quoted units, at cost Share of post-acquisition reserves - operations - revaluation surplus Translation difference Allowance for impairment group trust 2013 $’000 2012 $’000 2013 $’000 2012 $’000 67,806 67,806 67,806 67,806 3,086 15,857 (8,263) 78,486 (6,759) 71,727 2,619 13,524 (5,371) 78,578 (6,759) 71,819 – – – 67,806 (3,963) 63,843 – – – 67,806 (3,963) 63,843 Fair value of investment based on published price quotation 73,568 69,940 73,568 69,940 Details of the associate are as follows: name of associate Place of incorporation / business Hektar Real Estate Investment Trust (1) Malaysia (1) Audited by SJ Grant Thornton, Malaysia effective equity interest held by the group and trust 2013 % 31.17 2012 % 31.17 Hektar Real Estate Investment Trust (“H-REIT”) is a real estate investment trust constituted in Malaysia by a trust deed dated 5 October 2006. H-REIT units are listed on the Main Board of Bursa Malaysia Securities Berhad. The principal investment objective of H-REIT is to invest in income-producing real estate in Malaysia used primarily for retail purposes. As the results of H-REIT are not expected to be announced in sufficient time to be included in the Group’s results for the quarter ended 30 September 2013, the Group has estimated the results of H-REIT for the quarter ended 30 September 2013 based on its results for the preceding quarter, adjusted for significant transactions and events occurring up to the reporting date of the Group, if any. The result for H-REIT was equity accounted for at the Group level, net of 10% (2012: 10%) withholding tax in Malaysia. 92 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 6. InVestMent In assocIate (cont’d) The following summarised financial information relating to the associate has not been adjusted for the percentage of ownership interest held by the Group: Assets and liabilities Non-current assets Current assets Total assets Current liabilities Non-current liabilities Total liabilities Results Revenue Expenses Revaluation surplus Total return for year 2013 (2) $’000 2012 (3) $’000 413,434 12,001 425,435 13,107 174,004 187,111 330,283 16,904 347,187 71,300 85,392 156,692 45,696 (29,087) 7,865 24,474 38,936 (23,507) 19,095 34,524 (2) (3) The financial information is based on the latest available unaudited management accounts as at 30 June 2013 and for the six months ended 30 June 2013 and the pro- rated six month results from the audited financial statements for the period ended 31 December 2012. The financial information is based on the unaudited management accounts as at 30 June 2012 and for the six months ended 30 June 2012 and the pro-rated six month results from the audited financial statements for the period ended 31 December 2011. As at 30 September 2013, the associate’s property portfolio comprises Subang Parade in Selangor, Mahkota Parade in Melaka and Wetex Parade in Muar, Johor, Central Square and Landmark Central in Kedah. 7. trade and other receIVaBles Trade receivables Allowance for doubtful receivables Net trade receivables Deposits Prepayments Other receivables Loan arrangement fees group and trust 2013 $’000 1,373 (86) 1,287 77 199 2 1,891 3,456 2012 $’000 2,397 (90) 2,307 68 324 1,318 2,285 6,302 annual report 2013 93 notes to tHe FinanCial stateMents 30 september 2013 7. trade and other receIVaBles (cont’d) Trade receivables are recognised at their original invoiced amounts which represent their fair values on initial recognition. (i) Trade receivables that are past due but not impaired The Group and the Trust have trade receivables amounting to $1,287,000 (2012: $2,307,000) that are past due at the balance sheet date but not impaired. The aging of receivables at the balance sheet date is as follows: Trade receivables past due but not impaired: Less than 30 days 30 to 60 days 61 to 90 days 91 to 120 days More than 120 days (ii) Trade receivables that are impaired group and trust 2013 $’000 866 243 34 76 68 1,287 2012 $’000 886 552 129 150 590 2,307 The Group’s and the Trust’s trade receivables that are impaired at the balance sheet date and the movements of the allowance account used to record the impairment are as follows: Trade receivables Allowance for impairment Movement in allowance account: At beginning Impairment loss recognised Written back Allowance utilised At end group and trust 2013 $’000 2012 $’000 86 (86) – 90 104 (70) (38) 86 90 (90) – 257 130 (290) (7) 90 Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in significant difficulties and have defaulted on payments. The allowance for impairment recorded in relation to these receivables represents the amount in excess of the security deposits held as collateral. Based on the Group’s historical experience of the collection of trade receivables, the Manager believes that there is no additional credit risk beyond those which have been provided for. 94 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 8. cash and cash eQuIValents For purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the balance sheet date: Cash at bank and on hand Fixed deposits The weighted average effective interest rate for fixed deposits is 0.22% (2012: 0.06%) per annum. 9. trade and other PayaBles group and trust 2013 $’000 25,706 14,000 39,706 2012 $’000 17,869 5,000 22,869 Trade payables and accrued operating expenses Amounts due to related parties (trade) Deposits and advances Interest payable Other payables Withholding tax Fair value of interest rate swaps group trust 2013 $’000 24,765 4,637 3,625 3,654 28 928 8,025 45,662 2012 $’000 15,819 4,522 3,301 3,424 82 829 11,891 39,868 2013 $’000 24,774 4,637 3,625 3,654 28 928 8,025 45,671 2012 $’000 15,826 4,522 3,301 3,424 82 829 11,891 39,875 Included in trade payables and accrued operating expenses is an amount due to the Trustee of $56,246 (2012: $52,597). Included in amounts due to related parties are amounts due to the Manager of $3,186,015 (2012: $3,087,324) and the Property Manager of $1,451,172 (2012: $1,434,103) respectively. The amounts due to related parties are unsecured, interest free and payable within the next 3 months. The Trust entered into contracts to exchange, at specified intervals, the difference between floating rate and fixed rate interest amounts calculated by reference to agreed notional amounts. As at balance sheet date, the Trust has interest rate swaps for: (i) notional contract amount of $100 million that mature in April 2015; (ii) notional contract amount of $159 million that mature in July 2016; and (iii) notional contract amount of $42 million that mature in June 2015. The Group does not apply hedge accounting. annual report 2013 95 notes to tHe FinanCial stateMents 30 september 2013 10. deFerred IncoMe Cost At beginning Additions Fully amortised At end Accumulated amortisation At beginning Charge for the year Fully amortised At end Net deferred income This comprises: Current portion Non-current portion 11. Interest-BearIng BorroWIngs Non-current liabilities Term loans (secured) Loan from subsidiary (unsecured) Medium Term Notes (unsecured) Current liabilities Loan from subsidiary (unsecured) Medium Term Notes (unsecured) Revolving credit loan (unsecured) group and trust 2013 $’000 2,812 872 (771) 2,913 1,444 986 (771) 1,659 1,254 704 550 1,254 2012 $’000 3,266 866 (1,320) 2,812 1,800 964 (1,320) 1,444 1,368 734 634 1,368 group trust 2013 $’000 2012 $’000 2013 $’000 2012 $’000 334,000 – 195,000 529,000 – 60,000 – 60,000 334,000 – 185,000 519,000 – 55,000 3,000 58,000 334,000 195,000 – 529,000 60,000 – – 60,000 334,000 185,000 – 519,000 55,000 – 3,000 58,000 96 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 11. Interest-BearIng BorroWIngs (cont’d) a) Term loans (secured) The Trust obtained a $264 million 5-year secured term loan under a facility agreement dated 29 November 2010 between (i) the Trustee, as borrower and (ii) DBS Bank Ltd, Oversea-Chinese Banking Corporation Limited and Standard Chartered Bank, as lenders (the “S$264 million Secured Term Loan“). The secured term loan bears interest at the swap-offer rate plus a margin. The expected maturity date of the loan falls in July 2016. The S$264 million Secured Term Loan is principally secured by the following: • • • a mortgage over Northpoint; an assignment of the rights, benefits, title and interest of the Trust in, under and arising out of the insurances effected in respect of Northpoint; an assignment and charge of the rights, benefits, title and interest of the Trust in, under and arising out of the tenancy agreements, the sale agreements, the performance guarantees (including sale proceeds and rental proceeds) and the bank accounts arising from, relating to or in connection with Northpoint; • a first fixed and floating charge over all present and future assets of the Trust in connection with Northpoint. In December 2011, FCT entered into a facility agreement with DBS Bank Ltd for a secured five-year term loan of S$70 million (the “S$70 million Secured Term Loan”). The S$70 million Secured Term Loan is principally secured by the following: • • • a mortgage over Bedok Point; an assignment of the rights, benefits, title and interest of the Trust in, under and arising out of the insurances effected in respect of Bedok Point; an assignment and charge of the rights, benefits, title and interest of the Trust in, under and arising out of the tenancy agreements, the sale agreements, the performance guarantees (including sale proceeds and rental proceeds) and the bank accounts arising from, relating to or in connection with Bedok Point; and • a first fixed and floating charge over all present and future assets of the Trust in connection with Bedok Point. b) Medium Term Notes (unsecured) On 7 May 2009, the Group through its subsidiary, FCT MTN, established a $500,000,000 Multicurrency Medium Term Note Programme (“FCT MTN Programme”). With effect from 14 August 2013, the maximum aggregate principal amount of notes that may be issued under the FCT MTN Programme is increased from $500,000,000 to $1,000,000,000. Under the FCT MTN Programme, FCT MTN may, subject to compliance with all relevant laws, regulations and directives, from time to time issue notes (the “Notes”) in Singapore dollars or any other currency. The Notes may be issued in various amounts and tenors, and may bear interest at fixed, floating, hybrid or variable rates of interest. Hybrid notes or zero coupon notes may also be issued under the FCT MTN Programme. The Notes shall constitute direct, unconditional, unsubordinated and unsecured obligations of FCT MTN ranking pari passu, without any preference or priority among themselves, and pari passu with all other present and future unsecured obligations (other than subordinated obligations and priorities created by law) of FCT MTN. All sums payable in respect of the Notes are unconditionally and irrevocably guaranteed by the Trustee. annual report 2013 97 notes to tHe FinanCial stateMents 30 september 2013 11. Interest-BearIng BorroWIngs (cont’d) b) Medium Term Notes (unsecured) (cont’d) As at 30 September 2013, the aggregate balance of the Notes issued by the Group under the FCT MTN Programme amounted to $255 million (2012: $240 million), consisting of: (i) $25 million (2012: $25 million) Fixed Rate Notes which mature on 12 February 2015 and bear a fixed interest rate of 3.50% per annum payable semi-annually in arrear; (ii) $60 million (2012: $60 million) Fixed Rate Notes which mature on 24 January 2014 and bear a fixed interest rate of 2.80% per annum payable semi-annually in arrear; (iii) $70 million (2012: $70 million) Fixed Rate Notes which mature on 12 June 2015 and bear a fixed interest rate of 2.30% per annum payable semi-annually; (iv) $30 million (2012: $30 million) Fixed Rate Notes which mature on 12 June 2017 and bear a fixed interest rate of 2.85% per annum payable semi-annually; and (v) $70 million (2012: $Nil) Fixed Rate Notes which mature on 21 January 2020 and bear a fixed interest rate of 3.00% per annum payable semi-annually. $55 million Fixed Rate Notes which bear a fixed interest rate of 2.83% per annum were repaid in February 2013. c) Unsecured revolving credit facilities The Trust has obtained unsecured revolving credit facilities amounting to $30 million (2012: $30 million). As at 30 September 2013, total borrowings drawn down by the Trust on these facilities amounted to $Nil (2012: $3 million). 12. translatIon reserVe The translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currency is different from that of the Group’s presentation currency. At beginning Net effect of exchange differences arising from translation of financial statements of foreign operations At end group 2013 $’000 5,371 2,892 8,263 2012 $’000 4,357 1,014 5,371 98 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 13. unIts In Issue Units in issue At beginning Issue of Units - issued as satisfaction of acquisition fee - issued as satisfaction of asset management fees At end Units to be issued - as asset management fees payable in Units Total issued and issuable Units at end group and trust 2013 2012 no. of units no. of units ’000 ’000 823,200 819,817 – 1,183 824,383 914 2,469 823,200 322 824,705 323 823,523 Each Unit represents an undivided interest in the Trust. The rights and interests of Unitholders are contained in the Trust Deed and include the rights to: • • Receive income and other distributions attributable to the Units held; Participate in the termination of the Trust by receiving a share of all net cash proceeds derived from the realisation of the assets of the Trust less any liabilities, in accordance with their proportionate interests in the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying assets of the Trust and is not entitled to the transfer to it of any assets (or part thereof ) or of any estate or interest in any assets (or part thereof ) of the Trust; • Attend all Unitholders’ meetings. The Trustee or the Manager may (and the Manager shall at the request in writing of not less than 50 Unitholders or one-tenth number of the Unitholders, whichever is lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed; and • One vote per Unit. The restrictions of a Unitholder include the following: • A Unitholder’s right is limited to the right to require due administration of the Trust in accordance with the provisions of the Trust Deed; and • A Unitholder has no right to request the Manager to redeem his Units while the Units are listed on SGX-ST. A Unitholder’s liability is limited to the amount paid or payable for any Units in the Trust. The provisions of the Trust Deed provide that no Unitholders will be personally liable to indemnify the Trustee or any creditor of the Trustee in the event that liabilities of the Trust exceed its assets. 14. net asset Value Per unIt Net asset value per Unit is based on: Net assets Total issued and issuable Units (Note 13) group trust 2013 $’000 2012 $’000 2013 $’000 2012 $’000 1,462,355 1,263,030 1,454,462 1,255,047 ’000 824,705 ‘000 823,523 ’000 824,705 ’000 823,523 annual report 2013 99 notes to tHe FinanCial stateMents 30 september 2013 15. gross reVenue Gross rental income Turnover rental income Carpark income Others 16. ProPerty eXPenses Property tax Utilities Maintenance Property management fees Marketing expenses Allowance for doubtful receivables Write back of allowance for doubtful receivables Bad debts written off Depreciation Staff costs (1) Carpark expenses Others (1) Relates to reimbursement of staff costs paid/payable to the Property Manager. The Group does not have any employees. 17. BorroWIng costs Interest expense Amortisation of loan arrangement fees 18. asset ManageMent Fees group and trust 2013 $’000 140,329 7,802 4,472 5,356 157,959 2012 $’000 131,280 7,404 3,779 4,740 147,203 group and trust 2013 $’000 14,144 6,220 10,233 6,102 4,586 104 (70) 5 43 2,648 1,644 710 46,369 2012 $’000 11,631 6,885 9,507 5,697 4,243 130 (290) – 44 2,187 1,928 811 42,773 group and trust 2013 $’000 17,030 674 17,704 2012 $’000 17,574 671 18,245 Asset management fees comprise $5,940,568 (2012: $5,491,666) of base fee and $5,579,496 (2012: $5,221,517) of performance fee computed in accordance with the fee structure as disclosed in Note 1(b) to the financial statements. An aggregate of 1,181,891 (2012: 1,519,456) Units were issued or are issuable to the Manager as satisfaction of the asset management fees payable. 100 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 19. taXatIon Reconciliation of effective tax Net income Income tax using Singapore tax rate of 17% (2012: 17%) Non-tax deductible items Income not subject to tax Income exempt from tax 20. earnIngs Per unIt group trust 2013 $’000 2012 $’000 2013 $’000 2012 $’000 80,916 74,040 80,914 74,037 13,756 811 755 (15,322) – 12,587 754 658 (13,999) – 13,755 811 755 (15,321) – 12,586 754 658 (13,998) – The calculation of basic earnings per Unit is based on the weighted average number of Units during the year and total return for the year. Total return for year after tax Weighted average number of Units in issue group trust 2013 $’000 2012 $’000 2013 $’000 2012 $’000 287,766 185,567 284,964 179,021 ’000 823,948 ‘000 822,658 ’000 823,948 ’000 822,658 Diluted earnings per Unit is the same as basic earnings per Unit as there is no dilutive instrument in issue during the year. 21. sIgnIFIcant related Party transactIons During the financial year, other than the transactions disclosed in the financial statements, the following related party transactions were carried out in the normal course of business on arm’s length commercial terms: Property management fees and reimbursement of expenses paid/payable to the Property Manager (1) Reimbursement of expenses paid/payable to the Manager Reimbursement of expenses paid/payable to a subsidiary of a Unitholder (1) In accordance with service agreements in relation to management of the Trust and its property operations. 22. FInancIal rIsK ManageMent (a) Capital management group and trust 2013 $’000 13,861 25 4 2012 $’000 13,119 36 248 The primary objective of the Group’s capital management is to ensure that it maintains a strong and healthy capital structure in order to support its business and maximise Unitholder value. annual report 2013 101 notes to tHe FinanCial stateMents 30 september 2013 22. FInancIal rIsK ManageMent (cont’d) (a) Capital management (cont’d) The Group is subject to the aggregate leverage limit as defined in the Property Fund Guidelines of the CIS Code. The CIS Code stipulates that borrowings and deferred payments (together the “Aggregate Leverage”) of a property fund should not exceed 35.0% of the fund’s depository property. The Aggregate Leverage of a property fund may exceed 35.0% of its depository property (up to a maximum of 60.0%) only if a credit rating from Fitch Inc., Moody’s or Standard and Poor’s is obtained and disclosed to the public. As at 30 September 2013, the Group’s Aggregate Leverage stood at 27.6% (2012: 30.1%) of its depository property, which is within the limit set by the Property Fund Guidelines. The Trust has maintained its corporate ratings of “BBB+” from Standard and Poor’s and “Baa1” from Moody’s. (b) Financial risk management objectives and policies Exposure to credit, interest rate and liquidity risks arises in the normal course of the Group’s business. The Manager continually monitors the Group’s exposure to the above risks. There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures risks. (i) Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due. The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Manager has established credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed by the Manager before lease agreements are entered into with customers. Credit risk is also mitigated by the rental deposits held for each of the customers. In addition, receivables are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. The Manager has established an allowance account for impairment that represents its estimate of losses in respect of trade receivables due from specific customers. Subsequently when the Group is satisfied that no recovery of such losses is possible, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset. The maximum exposure to credit risk is represented by the carrying value of each financial asset on the Balance Sheet. At the balance sheet date, approximately 5.9% (2012: 11.6%) of the Group’s trade receivables were due from 5 tenants who are reputable companies located in Singapore. Trade and other receivables that are neither past due nor impaired represent creditworthy debtors with good payment record with the Group. Cash and fixed deposits are placed with a local bank regulated by the MAS. Information regarding financial assets that are either past due or impaired is disclosed in Note 7. (ii) Interest rate risk The Group’s exposure to changes in interest rates relates primarily to its interest-earning financial assets and interest-bearing financial liabilities. Interest rate risk is managed by the Manager on an on-going basis with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates. The Manager adopts a policy of fixing the interest rates for a portion of its outstanding borrowings using financial derivatives or other suitable financial products. Sensitivity analysis for interest rate risk It is estimated that a hundred basis points increase or decrease in interest rate at the balance sheet date, with all other variables held constant, would decrease or increase the Group’s total return for the year and Unitholders’ funds by approximately $6,288,000 (2012: $9,373,000), arising mainly as a result of change in the fair value of interest rate swap instruments. 102 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 22. FInancIal rIsK ManageMent (cont’d) (b) Financial risk management objectives and policies (cont’d) (iii) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s objective is to maintain sufficient cash on demand to meet expected operational expenses for a reasonable period, including the servicing of financial obligations. The Manager monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. In addition, the Manager monitors and observes the CIS Code issued by the MAS concerning limits on total borrowings. The table below summarises the maturity profile of the Group’s and the Trust’s financial liabilities at the balance sheet date based on contractual undiscounted payments. as at 30 september 2013 Group Trade and other payables Derivative financial instruments Security deposits Interest-bearing borrowings Trust Trade and other payables Derivative financial instruments Security deposits Interest-bearing borrowings as at 30 september 2012 Group Trade and other payables Derivative financial instruments Security deposits Interest-bearing borrowings Trust Trade and other payables Derivative financial instruments Security deposits Interest-bearing borrowings Within 1 year $’000 1 to 5 years $’000 More than 5 years $’000 total $’000 37,637 8,025 15,347 75,108 136,117 37,646 8,025 15,347 75,108 136,126 27,977 11,891 14,637 72,783 127,288 27,984 11,891 14,637 72,783 127,295 – – 22,188 552,498 574,686 – – 22,188 552,498 574,686 – – 22,627 547,490 570,117 – – 22,627 547,490 570,117 – – – 2,744 2,744 – – – 2,744 2,744 – – – – – – – – – – 37,637 8,025 37,535 630,350 713,547 37,646 8,025 37,535 630,350 713,556 27,977 11,891 37,264 620,273 697,405 27,984 11,891 37,264 620,273 697,412 annual report 2013 103 notes to tHe FinanCial stateMents 30 september 2013 22. FInancIal rIsK ManageMent (cont’d) (c) Fair values The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Group and the Trust. Derivative financial instruments The fair value of interest rate swaps are derived by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date. Non-derivative financial liabilities – security deposits and interest-bearing borrowings Fair values, which are determined for disclosure purposes, are estimated by discounting expected future cash flows at market incremental lending rates for similar types of lending or borrowing arrangements at the balance sheet date. Other non-derivative financial assets and liabilities The carrying amounts of financial assets and liabilities with maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the balance sheet date. The fair value of financial liabilities by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows: Group and Trust Financial liabilities: Interest-bearing borrowings (non-current) Security deposits (non-current) Fair value hierarchy as at 30.9.2013 $’000 as at 30.9.2012 $’000 carrying amount Fair value carrying amount Fair value 529,000 21,990 550,990 532,921 21,667 554,588 519,000 22,036 541,036 530,546 22,064 552,610 The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: • • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). 104 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 22. FInancIal rIsK ManageMent (cont’d) (c) Fair values (cont’d) at 30 september 2013 Interest rate swaps at 30 september 2012 Interest rate swaps level 1 $’000 level 2 $’000 level 3 $’000 – – – – 8,025 8,025 11,891 11,891 – – – – total $’000 8,025 8,025 11,891 11,891 During the financial years ended 30 September 2013 and 2012, there have been no transfers between the respective levels. 23. segMent rePortIng Business segments The Group is in the business of investing in the following shopping malls, which are considered to be the main business segments: Causeway Point, Northpoint, Anchorpoint, YewTee Point and Bedok Point. All these properties are located in Singapore. Management monitors the operating results of the business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment information is presented in respect of the Group’s business segments, based on its management and internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets, interest-bearing borrowings and their related revenue and expenses. Segment capital expenditure is the total costs incurred during the year to acquire segment assets that are expected to be used for more than one year. Geographical segments The Group’s operations are primarily in Singapore except for its associate, for which operations are in Malaysia. annual report 2013 105 notes to tHe FinanCial stateMents 30 september 2013 23. segMent rePortIng (cont’d) (a) Business segments 2013 Revenue and expenses Gross rental income Others Gross revenue Segment net property income Interest income Unallocated expenses * Net income Unrealised gain from fair valuation of derivatives Share of results of associate Surplus on revaluation of investment properties Total return for the year 2012 Revenue and expenses Gross rental income Others Gross revenue Segment net property income Interest income Unallocated expenses * Net income Unrealised gain from fair valuation of derivatives Share of results of associate Surplus on revaluation of investment properties Total return for the year causeway Point $’000 northpoint anchorpoint $’000 $’000 yewtee Point $’000 Bedok Point $’000 group $’000 66,294 8,834 75,128 54,533 43,792 5,012 48,804 35,343 7,700 929 8,629 4,678 11,623 1,533 13,156 9,671 10,920 1,322 12,242 140,329 17,630 157,959 7,365 111,590 107,750 68,426 5,024 14,004 537 causeway Point $’000 northpoint anchorpoint $’000 $’000 yewtee Point $’000 Bedok Point $’000 35 (30,709) 80,916 3,866 7,243 195,741 287,766 group $’000 59,029 7,478 66,507 48,584 41,557 5,112 46,669 33,362 7,668 771 8,439 4,811 11,587 1,537 13,124 9,628 11,439 1,025 12,464 131,280 15,923 147,203 8,045 104,430 52,989 36,147 2,889 9,034 (300) 7 (30,397) 74,040 352 10,416 100,759 185,567 * Unallocated expenses include borrowing costs and asset management fees as disclosed in the Statements of Total Return. 106 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 23. segMent rePortIng (cont’d) (a) Business segments (cont’d) as at 30 september 2013 Assets and liabilities Segment assets Investment in associate Unallocated assets Total assets Segment liabilities Unallocated liabilities - trade and other payables - interest-bearing borrowings Total liabilities Other segmental information Allowance for doubtful receivables Bad debts written off Write back of allowance for doubtful receivables Amortisation of lease incentives Depreciation Capital expenditure - Investment properties - Fixed assets causeway Point $’000 northpoint anchorpoint $’000 $’000 yewtee Point $’000 Bedok Point $’000 group $’000 1,020,933 640,956 87,433 162,443 134,599 2,046,364 71,727 16,419 2,134,510 38,450 15,674 3,271 4,571 4,809 66,775 51 – (52) 474 16 8,726 7 6 5 (4) 445 5 18 8 5 – (4) 24 4 – 5 15 – – 4 10 – 4 16,380 589,000 672,155 104 5 (70) 1,004 43 8,763 35 27 – (10) 57 8 19 11 annual report 2013 107 notes to tHe FinanCial stateMents 30 september 2013 23. segMent rePortIng (cont’d) (a) Business segments (cont’d) as at 30 september 2012 Assets and liabilities Segment assets Investment in associate Unallocated assets Total assets Segment liabilities Unallocated liabilities - trade and other payables - interest-bearing borrowings Total liabilities Other segmental information Allowance for doubtful receivables Write back of allowance for doubtful receivables Amortisation of lease incentives Depreciation Capital expenditure - Investment properties - Fixed assets 24. coMMItMents causeway Point $’000 northpoint anchorpoint $’000 $’000 yewtee Point $’000 Bedok Point $’000 group $’000 896,039 573,041 82,390 148,321 133,988 1,833,779 71,819 11,521 1,917,119 29,486 15,834 3,161 4,562 4,363 57,406 85 (168) (1,159) 16 1 (1) 269 5 15,852 6 1,123 3 24 (25) (111) 6 – – – (81) 42 11 8 2 20 (15) (329) 6 (30) 28 19,683 577,000 654,089 130 (290) (1,288) 44 16,953 39 Capital expenditure contracted but not provided for The Group leases out its investment properties. Non-cancellable operating lease rentals receivable are as follows: group and trust 2013 $’000 5,966 2012 $’000 17,881 Receivable: Within 1 year After 1 year but within 5 years After 5 years group and trust 2013 $’000 2012 $’000 122,817 110,601 – 233,418 125,598 146,142 457 272,197 108 Frasers Centrepoint trust notes to tHe FinanCial stateMents 30 september 2013 25. contIngent lIaBIlIty Pursuant to the tax transparency ruling from the IRAS, the Trustee and the Manager have provided a tax indemnity for certain types of tax losses, including unrecovered late payment penalties, that may be suffered by IRAS should IRAS fail to recover from Unitholders tax due or payable on distributions made to them without deduction of tax, subject to the indemnity amount agreed with the IRAS. The amount of indemnity, as agreed with IRAS, is limited to the higher of $500,000 or 1.0% of the taxable income of the Trust each year. Each yearly indemnity has a validity period of the earlier of seven years from the relevant year of assessment and three years from the termination of the Trust. 26. suBseQuent eVents On 21 October 2013, the Manager declared a distribution of $24,576,000 to Unitholders in respect of the period from 1 July 2013 to 30 September 2013. On 24 October 2013, the Trust issued 321,640 new Units at a price of $1.8515 per Unit in payment of 20% of its management fees for the period from 1 July 2013 to 30 September 2013. 27. FInancIal ratIos The following financial ratios are presented as required by RAP 7: Expenses to weighted average net assets (1): - including performance component of asset management fees - excluding performance component of asset management fees Portfolio turnover rate (2) group 2013 % 1.01 0.58 2012 % 1.04 0.59 – – (1) (2) The annualised ratios are computed in accordance with the guidelines of Investment Management Association of Singapore. The expenses used in the computation relate to expenses of the Trust, excluding property expenses, interest expense and income tax expense. The annualised ratios are computed based on the lesser of purchases or sales of underlying investment properties of the Group expressed as a percentage of daily average net asset value. annual report 2013 109 statistiCs oF unitHolDers Issued and Fully PaId-uP unIts There were 824,704,435 Units (voting rights: one vote per Unit) outstanding as at 29 November 2013. There is only one class of Units. The market capitalisation was $1,459,726,850 based on closing unit price of $1.77 on 29 November 2013. toP tWenty unItholders As at 29 November 2013 s/no unitholders 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. FCL Trust Holdings Pte. Ltd. HSBC (Singapore) Noms Pte. Ltd. Citibank Noms S’pore Pte. Ltd. DBSN Services Pte. Ltd. DBS Nominees Pte. Ltd. Frasers Centrepoint Asset Management Ltd. United Overseas Bank Nominees Raffles Nominees (Pte.) Ltd. NTUC Fairprice Co-Operative Ltd. CIMB Sec (S’pore) Pte. Ltd. UOB Kay Hian Pte. Ltd. OCBC Securities Private Ltd. DB Nominees (S) Pte. Ltd. Bank Of S’pore Noms Pte. Ltd. BNP Paribas Securities Svcs Certis CISCO Security Pte. Ltd. Morgan Stanley Asia (S’pore) Maybank Kim Eng Secs Pte. Ltd. Ng Say Ban OCBC Nominees Singapore Total holdings of top 20 unitholders Manager’s dIrectors’ unItholdIngs As at 21 October 2013 name of director Mr Anthony Cheong Fook Seng Mr Bobby Chin Yoke Choong Mr Lim Ee Seng Mr Soh Kim Soon Mr Christopher Tang Kok Kai number of units % of total 313,500,000 116,136,701 107,220,428 60,632,030 41,820,562 25,074,435 13,063,700 10,888,645 10,000,000 7,643,000 6,755,000 6,698,000 6,079,704 5,996,000 4,741,552 2,260,000 1,972,708 1,663,500 1,300,000 1,053,000 744,498,965 38.01% 14.08% 13.00% 7.35% 5.07% 3.04% 1.58% 1.32% 1.21% 0.93% 0.82% 0.81% 0.74% 0.73% 0.57% 0.27% 0.24% 0.20% 0.16% 0.13% 90.26% number of Fct units held direct Interest deemed Interest 50,000 – 200,000 100,000 50,000 – 100,000 – – 620,000 110 Frasers Centrepoint trust statistiCs oF unitHolDers suBstantIal unItholders As at 29 November 2013 substantial unitholders number of units % number of units direct Interest deemed Interest total number of units held % FCL Trust Holdings Pte. Ltd. Fraser and Neave, Limited(1) Frasers Centrepoint Limited(2) Thai Beverage Public Company Limited(3) International Beverage Holdings Limited(4) InterBev Investment Limited(5) TCC Assets Limited(6) Charoen Sirivadhanabhakdi(7) Khunying Wanna Sirivadhanabhakdi(8) Schroder Investment Management Group(9) (1) (2) (3) As at 29 November 2013, Fraser and Neave, Limited (“F&NL”) holds a 100% direct interest in Frasers Centrepoint Limited (“FCL”); FCL holds a 100% direct interest in each of Frasers Centrepoint Asset Management Ltd (“FCAM”) and FCL Trust Holdings Pte. Ltd. (“FCLT”); and FCLT holds 313,500,000 units and FCAM hold 25,074,435 units in FCT. F&NL therefore has a deemed interest in the units in FCT in which FCL has an interest by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). FCL holds a 100% direct interest in each of FCAM and FCLT; and FCAM and FCLT hold units in FCT. FCL therefore has a deemed interest in the units in FCT in which each of FCAM and FCLT has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). ThaiBev holds a 100% direct interest in International Beverage Holdings Limited (“IBHL”); − IBHL holds a 100% direct interest in InterBev Investment Limited (“IBIL”); − IBIL holds a greater than 20% interest in F&NL; − F&NL holds a 100% direct interest in FCL; − FCL holds a 100% direct interest in each of FCAM and FCLT; and − FCAM and FCLT hold units in FCT. ThaiBev therefore has a deemed interest in the units in FCT in which F&N has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). dIstrIButIon oF holdIngs 313,500,000 – – – – – – – – – 38.01% – – – – – – – – – - 338,574,435 338,574,435 338,574,435 338,574,435 338,574,435 338,574,435 338,574,435 338,574,435 71,187,000 - 313,500,000 41.05% 338,574,435 41.05% 338,574,435 41.05% 338,574,435 41.05% 338,574,435 41.05% 338,574,435 41.05% 338,574,435 41.05% 338,574,435 41.05% 338,574,435 71,187,000 8.63% % 38.01% 41.05% 41.05% 41.05% 41.05% 41.05% 41.05% 41.05% 41.05% 8.63% (4) (5) (6) IBHL holds a 100% direct interest in InterBev Investment Limited (“IBIL”); − IBIL holds a greater than 20% interest in F&NL; − F&NL holds a 100% direct interest in FCL; − FCL holds a 100% direct interest in each of FCAM and FCLT; and − FCAM and FCLT hold units in FCT. IBHL therefore has a deemed interest in the units in FCT in which F&N has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). IBIL holds a greater than 20% interest in F&NL; − F&NL holds a 100% direct interest in FCL; − FCL holds a 100% direct interest in each of FCAM and FCLT; and − FCAM and FCLT hold units in FCT. IBIL therefore has a deemed interest in the units in FCT in which F&NL has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). TCC Assets Limited (“TCCA”) holds a majority interest in F&NL; − F&NL holds a 100% direct interest in FCL; − FCL holds a 100% direct interest in each of FCAM and FCLT; and − FCAM and FCLT hold units in FCT. TCCA therefore has a deemed interest in the units in FCT in which F&N has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). (7) (8) Charoen Sirivadhanabhakdi and his spouse, Khunying Wanna Sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of TCCA; − TCCA holds a majority interest in F&NL; − F&NL holds a 100% direct interest in FCL; − FCL holds a 100% direct interest in each of FCAM and FCLT; and − FCAM and FCLT hold units in FCT. Charoen Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which F&NL has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). Khunying Wanna Sirivadhanabhakdi and her spouse, Charoen Sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of TCCA; − TCCA holds a majority interest in F&NL; − F&NL holds a 100% direct interest in FCL; − FCL holds a 100% direct interest in each of FCAM and FCLT; and − FCAM and FCLT hold units in FCT. Khunying Wanna Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which F&NL has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore). (9) Based on information provided by Schroder Investment (Singapore) Ltd. on 29 November 2013. size of holdings number of unitholders Percentage of unitholders number of units Percentage of units 1 to 999 1,000 to 10,000 10,001 to 1,000,000 1,000,001 and above Grand Total locatIon oF unItholders country Singapore Malaysia Others Grand Total Free Float 21 3,798 1,185 20 5,024 0.42% 75.59% 23.59% 0.40% 100.00% 4,502 17,713,818 62,487,150 744,498,965 824,704,435 0.00% 2.15% 7.58% 90.27% 100.00% number of unitholders Percentage of unitholders number of units Percentage of units 4,834 121 69 5,024 96.22% 2.41% 1.37% 100.00% 820,779,935 2,972,000 952,500 824,704,435 99.52% 0.36% 0.12% 100.00% Based on information available to the Manager as at 29 November 2013, approximately 58.9% of the Units are held in the hands of public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited has accordingly been complied with. annual report 2013 111 aDDitional inForMation related Party transactIons The transactions entered into with related parties during the financial period and which fall within the Listing Manual of the CIS Code, are as follows: name of related Party Frasers Centrepoint Limited and its subsidiaries - Asset management fees - Property management fees - Reimbursement of expenses HSBC Institutional Trust Services (Singapore) Limited - Trustee’s fees aggregate value of all related party transactions during the financial period under review (excluding transactions of less than $100,000 each) $’000 11,520 4,847 1,981 326 Saved as disclosed above, there were no additional related party transactions (excluding transactions of less than $100,000 each) entered into during the financial period under review. Please also see Significant Related Party Transactions in Note 21 in the financial statements. Rules 905 and 906 of the Listing Manual are not applicable if such related party transactions are made on the basis of, and in accordance with, the terms and conditions set out in the Trust prospectus dated 27 June 2006 and therefore would not be subject to Audit Committee review / approval. suBscrIPtIon oF the trust unIts As at 30 September 2013, an aggregate of 824,382,795 Units were in issue. On 24 October 2013, the Trust issued 321,640 Units to the Manager as asset management fees for the period from 1 July 2013 to 30 September 2013. non-deal roadshoW eXPenses Non-deal roadshow expenses of $22,183 (2012: $29,669) were incurred during the year ended 30 September 2013. 112 Frasers Centrepoint trust notiCe oF annual General MeetinG (a real estate investment trust constituted on 5 June 2006 under the laws of the Republic of Singapore) Sponsored by Frasers Centrepoint Limited notIce oF annual general MeetIng NOTICE IS HEREBY GIVEN that the 5th Annual General Meeting of FRASERS CENTREPOINT TRUST (“FCT”) will be held at Level 2, Alexandra Point, 438 Alexandra Road, Singapore 119958 on 21 January 2014 at 10.00 a.m. for the following purposes:- routIne BusIness Resolution (1) 1. To receive and adopt the Report of the Trustee issued by HSBC Institutional Trust Services (Singapore) Limited, as trustee of FCT (the “Trustee”), the Statement by the Manager issued by Frasers Centrepoint Asset Management Ltd., as manager of FCT (the “Manager”) and the Audited Financial Statements of FCT for the year ended 30 September 2013. Resolution (2) 2. To re-appoint Ernst & Young LLP as Auditors of FCT to hold office until the conclusion of the next Annual General Meeting, and to authorise the Manager, to fix their remuneration. sPecIal BusIness To consider and, if thought fit, to pass the following Ordinary Resolutions, with or without any modifications: Resolution (3) 3. That authority be and is hereby given to the Manager, to (a) (i) issue units in FCT (“Units”) whether by way of rights, bonus or otherwise; and/or (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Units to be issued, including but not limited to the creation and issue of (as well as adjustments to) securities, warrants, debentures or other instruments convertible into Units, at any time and upon such terms and conditions and for such purposes and to such persons as the Manager may in its absolute discretion deem fit; and (b) issue Units in pursuance of any Instrument made or granted by the Manager while this Resolution was in force (notwithstanding that the authority conferred by this Resolution may have ceased to be in force), provided that: (1) the aggregate number of Units to be issued pursuant to this Resolution (including Units to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed fifty per cent. (50%) of the total number of issued Units (excluding treasury Units, if any) (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Units to be issued other than on a pro rata basis to unitholders of FCT (“Unitholders”) does not exceed twenty per cent. (20%) of the total number of issued Units (excluding treasury Units, if any) (as calculated in accordance with sub-paragraph (2) below); annual report 2013 113 notiCe oF annual General MeetinG (2) subject to such manner of calculation as may be prescribed by Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the purpose of determining the aggregate number of Units that may be issued under sub-paragraph (1) above, the total number of issued Units (excluding treasury Units, if any) shall be based on the number of issued Units (excluding treasury Units, if any) at the time this Resolution is passed, after adjusting for: (a) any new Units arising from the conversion or exercise of any Instruments which are outstanding at the time this Resolution is passed; and (b) any subsequent bonus issue, consolidation or subdivision of Units; (3) in exercising the authority conferred by this Resolution, the Manager shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the deed of trust constituting FCT (as amended and restated) (the “Trust Deed”) for the time being in force (unless otherwise exempted or waived by the Monetary Authority of Singapore); (4) unless revoked or varied by Unitholders in a general meeting, the authority conferred by this Resolution shall continue in force until (i) the conclusion of the next Annual General Meeting of FCT or (ii) the date by which the next Annual General Meeting of FCT is required by the applicable law or regulations to be held, whichever is earlier; (5) where the terms of the issue of the Instruments provide for adjustment to the number of Instruments or Units into which the Instruments may be converted in the event of rights, bonus or other capitalisation issues or any other events, the Manager may issue additional Instruments or Units pursuant to such adjustment notwithstanding that the authority conferred by this Resolution may have ceased to be in force at the time the Instruments or Units are issued; and (6) the Manager, any director of the Manager (“Director”) and the Trustee, be and are hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Manager, such Director, or, as the case may be, the Trustee may consider expedient or necessary or in the interest of FCT to give effect to the authority conferred by this Resolution. other BusIness 4. To transact any other business which may properly be brought forward. Frasers Centrepoint Asset Management Ltd. (Company Registration No: 200601347G) As manager of Frasers Centrepoint Trust Anthony Cheong Fook Seng Company Secretary Singapore, 23 December 2013 A Unitholder entitled to attend the meeting and vote is entitled to appoint not more than two proxies to attend and vote instead of him; a proxy need not be a Unitholder. Where a Unitholder appoints more than one proxy, he shall specify the proportion of his unitholdings to be represented by each proxy. The instrument appointing a proxy or proxies (a form is enclosed) must be deposited with the company secretary of the Manager at the registered office of the Manager not less than 48 hours before the time appointed for holding the meeting. 114 Frasers Centrepoint trust notiCe oF annual General MeetinG Explanatory Notes: Resolution 3 Resolution 3 above, if passed, will empower the Manager from the date of this Annual General Meeting until the date of the next Annual General Meeting, to issue Units and to make or grant instruments (such as securities, warrants or debentures) convertible into Units and issue Units pursuant to such instruments, up to a number not exceeding 50% of the total number of issued Units (excluding treasury Units, if any), of which up to 20% may be issued other than on a pro rata basis to Unitholders. For determining the aggregate number of Units that may be issued, the percentage of issued Units will be calculated based on the issued Units at the time the Resolution 3 above is passed, after adjusting for new Units arising from the conversion or exercise of any Instruments which are outstanding at the time Resolution 3 above is passed and any subsequent bonus issue, consolidation or subdivision of Units. Fund raising by issuance of new Units may be required in instances of property acquisitions or debt repayments. In any event, if the approval of Unitholders is required under the Listing Manual of the SGX-ST and the Trust Deed or any applicable laws and regulations in such instances, the Manager will then obtain the approval of Unitholders accordingly. Important Notice The value of Units and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on the SGX-ST. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. The listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of FCT is not necessarily indicative of the future performance of FCT. Frasers centrePoInt trust (Constituted in the republic of singapore pursuant to a trust deed dated 5 June 2006 (as amended and restated)) proxY ForM annual General MeetinG IMPORTANT 1. For investors who have used their CPF money to buy units in Frasers Centrepoint Trust, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or is purported to be used by them. 3. CPF Investors who wish to attend the Annual General Meeting as OBSERVERS have to submit their requests through their respective Agent Banks so that their Agent Banks may register, in the required format, with the Company Secretary, Frasers Centrepoint Asset Management Ltd. (Agent Banks: please see note No. 8 on required format). 4. PLEASE READ THE NOTES TO THE PROXY FORM. I/We of (Name) (NRIC/Passport Number) (Address) being a unitholder/unitholders of Frasers Centrepoint Trust (“FCT”), hereby appoint: name address nriC/passport number proportion of unitholdings (note 2) no. of units % and/or (delete as appropriate) name address nriC/passport number proportion of unitholdings (note 2) no. of units % or both of whom failing, the Chairman of the Annual General Meeting as my/our proxy/proxies to attend and to vote for me/us on my/ our behalf and if necessary, to demand a poll, at the Annual General Meeting of FCT to be held at 10.00 a.m. on 21 January 2014 at Level 2, Alexandra Point, 438 Alexandra Road, Singapore 119958 and any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the Annual General Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/ proxies may vote or abstain from voting at his/their discretion, as he/they may on any other matter arising at the Annual General Meeting. NOTE: The Chairman of the AGM will be exercising his right under paragraph 9 of Schedule 1 of the Deed of Trust constituting FCT (as amended and restated) to demand a poll in respect of the resolutions to be put to the vote of members at the AGM and at any adjournment thereof. Accordingly, such resolutions at the AGM will be voted on by way of poll. no. resolutions relating to: routine Business no. of votes For* no. of votes against* 1. 2. 3. 4. To receive and adopt the Trustee’s Report, the Statement by the Manager and the Audited Financial Statements of FCT for the year ended 30 September 2013 To re-appoint Ernst & Young as Auditors of FCT and authorise the Manager to fix their remuneration speCial Business To authorise the Manager to issue Units and to make or grant convertible instruments otHer Business To transact any other business which may properly be brought forward * If you wish to exercise all your votes “For” or “Against” the relevant resolution, please tick (3) within the relevant box provided. Alternatively, if you wish to exercise your votes for both “For” and “Against” the relevant resolution, please indicate the number of Units in the boxes provided. Dated this day of 2014 total number of units held (note 4) Signature(s) of Unitholder(s)/Common Seal fold and seal here IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW Notes To Proxy Form 1. A unitholder of FCT (“Unitholder”) entitled to attend and vote at the meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a Unitholder. The instrument appointing a proxy or proxies must be deposited with the Company Secretary of the Manager at its registered office at 438 Alexandra Road, #21-00 Alexandra Point, Singapore 119958, not less than 48 hours before the time appointed for holding the meeting. 2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy. 3. Completion and return of this instrument appointing a proxy or proxies shall not preclude a Unitholder from attending and voting at the meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a Unitholder attends the meeting in person, and in such event, the Manager reserves the right to refuse to admit any person or persons appointed under this instrument of proxy, to the meeting. 4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his name in the Depository Register maintained by the Central Depository (Pte) Limited (“CDP”), he should insert that number of Units. If the Unitholder has Units registered in his name in the Register of Unitholders of FCT, he should insert that number of Units. If the Unitholder has Units entered against his name in the said Depository Register and registered in his name in the Register of Unitholders, he should insert the aggregate number of Units. If no number is inserted, this form of proxy will be deemed to relate to all the Units held by the Unitholder. 5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer. 6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the power of attorney or a duly certified copy thereof must (failing previous registration with the Manager) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 7. The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on and/or attached to the Proxy Form. In addition, in the case of Units entered in the Depository Register, the Manager may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units entered against his name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certified by CDP to the Manager. 8. Agent Banks acting on the request of CPF investors who wish to attend the meeting as Observers are required to submit in writing, a list with details of the investors’ names, NRIC/Passport numbers, addresses and numbers of Units held. The list, signed by an authorised signatory of the Agent Bank, should reach the Company Secretary, at the registered office of the Manager not later than 48 hours before the time appointed for holding the meeting. “Agent Banks” are banks appointed to maintain Unitholders’ CPF Investment Accounts under the CPF Investment Scheme-Ordinary Account. Affix Postage Stamp The Company Secretary Frasers Centrepoint Asset Management Ltd. (as manager of Frasers Centrepoint Trust) 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 fold here fold here cORPORATE iNfORmATiON FrAsers centrePoint trust registered address aUditor Unit registrar Boardroom Corporate & Advisory Services Pte Ltd 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 Phone: (65) 6536-5355 (65) 6536-1360 Fax: Ernst & Young LLP Partner-in-charge: Mr Nagaraj Sivaram (since financial year 2012) One Raffles Quay Level 18 North Tower Singapore 048583 Phone: (65) 6535-7777 (65) 6532-7662 Fax: bankers DBS Bank Ltd Oversea-Chinese Banking Corporation Ltd Standard Chartered Bank HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #10-02 HSBC Building Singapore 049320 website address www.fct.sg trUstee HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #03-01 HSBC Building Singapore 049320 Phone: (65) 6658-6906 (65) 6534-5526 Fax: the mAnAGer registered address direCtors oF the Manager aUdit CoMMittee Mr Bobby Chin Yoke Choong (Chairman) Mr Anthony Cheong Fook Seng Mr Soh Kim Soon CoMpany seCretary Mr Anthony Cheong Fook Seng Frasers Centrepoint Asset Management Ltd 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 Phone: (65) 6276-4882 (65) 6272-8776 Fax: n o i t c u d o r p i n g s e d i o d u t s 2 c a Mr Philip Eng Heng Nee Independent Non-Executive Chairman Dr Chew Tuan Chiong CEO and Executive Director Mr Anthony Cheong Fook Seng Non-Executive Director Mr Chia Khong Shoong Non-Executive Director Mr Bobby Chin Yoke Choong Independent Non-Executive Director Mr Lim Ee Seng Non-Executive Director Mr Soh Kim Soon Independent Non-Executive Director Mr Christopher Tang Kok Kai Non-Executive Director Frasers Centrepoint asset ManageMent Ltd As Manager of Frasers Centrepoint Trust Company Registration Number: 200601347G 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 Phone: (65) 6276 4882 (65) 6272 8776 Fax: ir@fraserscentrepointtrust.com Email: www.fct.sg