SuStaining long-term growth ANNUAL REPORT 2015 growing through StrategiC FootprintS ANNUAL REPORT 2015 SuStaining long-term growth ANNUAL REPORT 2015 growing to new heightS ANNUAL REPORT 2015 on tra Ck to realiSing our ambitionS ANNUAL REPORT 2015 SuStaining long-term growth This year’s design for the Frasers Centrepoint group of companies’ annual reports comprises a series that prominently features the Frasers Centrepoint logo. All four annual reports (Frasers Centrepoint Limited, Frasers Centrepoint Trust, Frasers Commercial Trust and Frasers Hospitality Trust) can be positioned together to form the complete corporate logo. The Frasers Centrepoint logo symbolically personifies its brand essence of being a property group that builds upon trust and care. In the form of a structured yet dynamic diamond shape, the logo reflects Frasers Centrepoint’s strength, stability and trustworthiness as an integrated real estate group. The eight contoured strokes represent progression and continuity in its business activities. The red strokes represent a strong business foundation, while the warm grey strokes represent its business partners, investors and customers. Together, they form a complete diamond which represents success. The colour red symbolises warmth, vibrancy and passion while grey reflects dignity, trustworthiness and professionalism. Integration, progression and continuity are exemplified by the coming together of the four entities. At Frasers Centrepoint Trust, we focus on developing and growing a portfolio of retail assets which delivers stable and consistent returns. Our strength in being Singapore- centric and suburban-focused underpins our ability to deliver sustainable long-term growth to our unitholders. C O N T E N T S eDitorial operationS & FinanCial review SuStainability 01 02 03 04 06 10 11 13 16 20 21 Financial highlightS in 2015 24 operationS & Financial 60 SuStainabilitY report about FraSerS centrepoint truSt Structure oF FraSerS centrepoint truSt perFormance at a glance letter to unitholderS 31 33 34 review capital reSourceS riSk management retail propertY market review Corporate governanCe 74 corporate governance report FinanCialS Financial Year 2015 in brieF mall proFileS 91 Financial StatementS inveStor relationS 42 Fct portFolio SummarY Fct unit price perFormance 44 cauSewaY point otherS board oF directorS 46 northpoint 142 StatiSticS oF unitholderS truSt management team 48 changi citY point 145 additional inFormation propertY management team 50 52 54 bedok point Yewtee point anchorpoint 56 hektar reit 146 notice oF annual general meeting proxY Form FiNANciAl HiGHliGHts iN 2015 $189.2m GrOss reVeNue $131.0m Net prOperty iNcOme 11.608¢ DistriButiON per uNit $1.91 Net Asset VAlue per uNit +12.1% +11.0% +3.8% +3.2% 5 1 0 2 t r o p e r l a u n n a 01 t s u r t I t n o p e r t n e C s r e s a r f ABOut FrAsers ceNtrepOiNt tru st frasers Centrepoint trust (“fCt”) is a leading developer-sponsored retail real estate investment trust (“reIt”) with six quality suburban malls in singapore. fCt’s current portfolio comprises Causeway point, northpoint, Changi City point, Yewtee point, Bedok point and anchorpoint. With combined appraised value of $2.46 billion as at 30 september 2015, 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. (“fCaM”), a real estate management company and a subsidiary of frasers Centrepoint limited (“fCl”). 5 1 0 2 t r o p e r l a u n n a 02 t s u r t I t n o p e r t n e C s r e s a r f Vi siON 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. mis siON 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. structure OF FrAsers ceNtr epOiNt trust 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 prOpe rt y mAN AGer property Management services frasers Centrepoint property Management services pte. ltd. property Management fees Fct pOrtFOliO Causeway point northpoint Changi City point Bedok point Yewtee point anchorpoint 5 1 0 2 t r o p e r l a u n n a 03 t s u r t I t n o p e r t n e C s r e s a r f perFOrmANce A t A Gl ANce Gross revenue ($ Million) net property income ($ Million) +12.1% 189.2 168.8 +11.0% 111.6 118.1 104.4 131.0 82.6 158.0 147.2 117.9 fY2011 fY2012 fY2013 fY2014 Fy2015 fY2011 fY2012 fY2013 fY2014 Fy2015 net Asset vAlue per unit ($) Distribution per unit (Cents) +3.2% 1.85 1.91 1.77 +3.8% 11.608 11.187 10.93 10.01 8.32 1.53 1.40 fY2011 fY2012 fY2013 fY2014 Fy2015 fY2011 fY2012 fY2013 fY2014 Fy2015 5 1 0 2 t r o p e r l a u n n a 04 t s u r t I t n o p e r t n e C s r e s a r f perFOrmANce A t A Gl ANce 5-yeAr FinAnciAl HiGHliGHts Group For the Financial year ending 30 september selected income statement and Distribution Data ($‘000) Gross rent other revenue Gross revenue Net property income Distributable income selected Balance sheet Data ($ million) total assets total Borrowings net assets Value of portfolio properties1 Key Financial indicators Distribution per unit (cents) net asset Value per unit ($)2 ratio of total Borrowings to total assets (Gearing) Interest Coverage (times) Fy2011 Fy2012 Fy2013 Fy2014 Fy2015 103,644 131,280 140,329 149,453 167,914 14,240 15,923 17,630 19,301 21,328 117,884 147,203 157,959 168,754 189,242 82,618 104,430 111,590 118,096 131,043 64,375 82,348 90,131 95,442 106,412 1,786.8 1,917.1 2,134.5 2,521.8 2,548.7 559.0 577.0 589.0 739.0 718.0 1,151.9 1,263.0 1,462.4 1,698.7 1,754.5 1,697.0 1,816.0 2,019.5 2,400.0 2,464.0 8.32 1.40 31.3% 4.62 10.01 1.53 30.1% 5.56 10.93 1.77 27.6% 6.15 11.187 11.608 1.85 29.3% 6.20 1.91 28.2% 6.61 1 fCt’s property portfolio comprises the following suburban retail properties in singapore: Causeway point, northpoint, anchorpoint, Yewtee point, Bedok point and Changi City point. 2 Includes the distribution to be paid for the last quarter of the financial Year. 5 1 0 2 t r o p e r l a u n n a 05 t s u r t I t n o p e r t n e C s r e s a r f let ter t O uNitHOlDer s DeAr unitHolDers, We are pleased to present frasers Centrepoint trust (fCt)’s annual report 2015 and the inaugural sustainability report for the financial year ended 30 september 2015. GooD set oF FinAnciAl results AnD stronG bAlAnce sHeet fCt has delivered another set of good financial results for fY2015 with stable operating performance of its properties. Distribution per unit for fY2015 was up 3.8% to 11.608 cents and this is a new-high following nine consecutive years of growth at a compounded average growth rate of 7.5% since our Ipo in 2006. Gross revenue increased 12.1% to $189.2 million and net property income increased 11.0% to $131.0 million on the back of full-year contribution from Changi City point (which was acquired in June 2014), and from the step- up rents and higher rental rates achieved for new and renewed leases signed during the year. net property income margin for the portfolio eased slightly to 69.2% from 70.0% in fY2014, as property expenses increase outpaced that of revenue. our two largest malls, Causeway point and northpoint, continued to deliver steady performance. net property income of Causeway point and northpoint grew 4.6% and 0.5% year-on-year, respectively. our balance sheet remains strong with gearing level at 28.2% and our average all-in cost of borrowings was 2.4%, down from 2.5% last year. our total debt stood at $718.0 million as at 30 september 2015, down from $739.0 million. We have maintained the proportion of fixed-interest rate debt of our borrowings at 75% to provide cushion from short-term interest rates volatility. on the asset side of the balance sheets, the appraised value of our properties has increased to $2,464.0 million from $2,400.0 million, due to upward revision of the valuations of our properties, with the exception of Bedok point. With higher total assets and lower liabilities, our net asset value as at end-fY2015 increased 3.2% from $1.85 to $1.91 per unit. stAble operAtinG perFormAnce our portfolio of six suburban malls are mostly located near or next to Mrt stations and bus interchanges in populous residential areas. our malls attracted a total of 97.2 million shoppers in fY2015, an increase of about 3% from fY2014. our suburban malls typically draw stable shopper footfall from residential catchment within 3 to 5 kilometres radius of the mall, and spending at the malls are substantially for necessities such as food and dining, groceries and services. these characteristics underpin the stability and resilient performance of our properties through economic cycles. portfolio occupancy was 96.0% as at 30 september 2015, a slight drop from 98.9% last year owing to on-going tenant remixing activities at Changi City point and Bedok point. Despite the current headwinds in the retail market, we were able to achieve portfolio average rental reversion of 6.3% for the 255 leases renewed in fY2015, which accounted for 31.7% of fCt’s total net lettable area. 63.6% of the area renewed were at Causeway point and northpoint, which achieved good reversions of 6.3% and 5.7%, respectively. Challenges however, persisted at the smaller Bedok point, which registered decline of 6.4% in rental reversions, as the mall is still undergoing a repositioning process. 5 1 0 2 t r o p e r l a u n n a 06 t s u r t I t n o p e r t n e C s r e s a r f let ter t O uNitHOlDers During the year, we have intensified our advertising and promotion efforts to help draw more shopper traffic to the malls. this include hosting more festive events and promotions at our malls and enhancing the frasers rewards loyalty program (which has over 300,000 members) to incentivise shoppers to patronise frasers malls more often. We also continue to adjust our tenant- mix by adding new f&B offerings, introducing popular fashion retailers and diversifying our range of service retailers, in response to the changing demography and lifestyle trends and to e-commerce. some of the notable retailers added to our malls during the year include Ilao Ilao, timberland, Crocs, and uniqlo (at Changi City point). our portfolio tenants’ sales grew 2.9% year-on-year in fY2015, while our portfolio average occupancy cost stood at 15.3% for fY2015. GoinG ForwArD the singapore retail sector has been facing headwinds as reflected by the weak retail sales Index data published by the Government. these headwinds include weaker consumer spending, slower tourists’ arrivals, increasing online spending and more significantly, staffing challenges that curtailed the growth plans of retailers. although we expect some of these headwinds to persist in fY2016, we remain sanguine that the suburban retail sector will stay resilient, underpinned by growth in median household income, sustained low unemployment rate and improvement in singapore’s economy. fCt’s well-located suburban malls which attract steady shopper traffic will contribute to the stability and sustainability of the portfolio’s rental income and occupancy rates. fCt will continue to adhere to its strategy in sustaining steady unitholders’ return and growth through asset acquisitions, asset enhancement initiatives and organic means. northpoint, our second largest mall in the portfolio, is set to undergo asset enhancement initiative (aeI) work. this is the second aeI for northpoint since the completion of the previous one 6 years ago. the aeI is scheduled to commerce in March 2016 and to complete in phases over 18 months. the aeI will focus on enhancing shopper experience and comfort, boosting the diversity of retail offerings, and to position the mall to benefit from the integration with the upcoming retail component of northpoint City by frasers Centrepoint limited. We expect the aeI to deliver positive return on investment upon its completion and more importantly, to bring about long-term benefits for fCt and its unitholders. inAuGurAl sustAinAbility report sustainability is an important aspect of fCt’s business. We are pleased to present our inaugural sustainability report within this annual report. the report is in accordance with the Global reporting Initiative’s G4 Core requirements (an international standard for sustainability reporting) and its Construction and real estate sector Disclosures standard. It marks the commencement of our journey in reporting the key material aspects of our business that have impact on the environment, society and economy, significant to both our internal and external stakeholders. our approach to sustainability is harmonised with frasers Group’s sustainability approach. enGAGinG investors GlobAlly, ForGinG GooD investor relAtions AnD reseArcH coverAGe We continue to build on fCt’s track record as a growing reIt with steady returns, good financial performance, excellent corporate governance and disclosures. these qualities have attracted increasing interests from investors and research analysts, contributing to fCt’s improved trading liquidity and awareness among investors. We recognise the importance of good investor relations in the competitive global capital markets and we invest appreciable amount of time and resources to engage the investment community globally. During the year, our management met with 275 institutional investors in various locations including europe, Japan, south Korea, Hong Kong and singapore, through non-deal roadshows, investor conferences, post-result luncheons and one-on-one meetings. We are pleased that the number of equity research analysts covering fCt has increased from 16 to 18 during the year, with 11 of them holding positive view on the stock and 6 among them ranking fCt as their top picks. AcknowleDGements We would like to express our appreciations to our fellow board members for their stewardship and wisdom that has enabled the trust to continue to prosper. We would also like to thank the management and staff for their dedication and hard work. finally, we thank our unitholders, business partners, tenants and shoppers for their continued support for fCt. thank you. mr pHilip enG Chairman expansion through acquisition of new assets is one key strategy of fCt. prospects include existing and future malls in the sponsor’s portfolio, as well as other opportunities arising within singapore and overseas. Dr cHew tuAn cHionG Chief executive officer 29 December 2015 5 1 0 2 t r o p e r l a u n n a 07 t s u r t I t n o p e r t n e C s r e s a r f 5 1 0 2 t r o p e r l a u n n a 09 t s u r t I t n o p e r t n e C s r e s a r f G r o w i nG Fr o m s t r e nGtH t o s t r e nGtH our sound financial position is achieved via proactive and prudent capital management. Guided by keen foresight and an effective investment strategy, fCt has achieved nine consecutive years of growth in revenue, net property income and distribution per unit (Dpu) since our Ipo launch. Moving forward, we will continue to build on this momentum to grow to greater heights ahead. FiNANciAl yeAr 2015 iN BrieF october fCt achieved new-high Dpu of 11.608 cents for fY2015, an increase of 3.8% over the previous year. It was also the ninth consecutive year of Dpu growth since fCt’s listing. fCt posts new-high Dpu of 3.036 cents for 3Q15. July mAy fCt’s Causeway point was awarded the BCa universal Design Goldplus award for its user-friendliness, connectivity and safety features. Bedok point was awarded the BCa Greenmark Gold award for its energy- efficient, water-saving and recycling features. 5 1 0 2 t r o p e r l a u n n a 10 t s u r t I t n o p e r t n e C s r e s a r f fCt reported its distributable income rose 14% to $27.0 million. fCt Mtn pte ltd, a wholly-owned subsidiary of HsBC Institutional trust services, (the trustee of fCt) issued $60 million 2.9% Medium term notes due 2019 under fCt’s $1 billion Multicurrency Medium term note programme. April FebruAry Moody’s changed the outlook of fCt’s Baa1 issuer rating to ‘positive’ from ‘stable’. fCt Mtn pte ltd, a wholly-owned subsidiary of HsBC Institutional trust services, (the trustee of fCt) made full redemption of its $25.0 million 3.5% Medium term notes due 2015 under fCt’s $1.0 billion Multicurrency Medium term note programme. fCt announced Dpu for 1Q15 rises 10% year-on-year to 2.75 cents. fCt convened its sixth annual General Meeting on 23 January 2015. all resolutions as set out in the notice of aGM were duly passed. JAnuAry iNVest Or rel AtiONs open AnD trAnspArent communicAtions investor conFerences AnD non-DeAl roADsHows 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. AnnuAl GenerAl meetinG (AGm) the aGM and eGM are important channels for communication between the board of directors, the management of fCaM and the unitholders of fCt. fCt convened its 6th aGM on 23 January 2015. the voting for all resolutions at the aGM were conducted via electronic polls. all resolutions tabled at the aGM were duly passed and the results of the polls were announced on the sGX and fCt websites on the same day of the events. Active enGAGement witH institutionAl AnD retAil investors the senior management of fCaM meets regularly with fCt’s investors and analysts at conferences (both overseas and local), one-on-one meetings, quarterly post-results luncheons and non-deal roadshows to apprise them of fCt’s corporate developments and financial performance. During the year under review, fCt participated in overseas non-deal investor roadshows to europe, Japan, south Korea, Hong Kong and Malaysia as well as investor conferences hosted by major financial institutions. During fY2015, the management of fCaM participated in the following events: siNGApOre • Morgan Stanley 13th Annual Asia Pacific Summit • DBS Pulse of Asia Conference 2015 • The Bank of America Merrill Lynch ASEAN Star Conference 2015 • JP Morgan Asia Pacific Real Estate Conference 2015 • SGX-Barclays Equities Corporate Day • Citi ASEAN Investor Conference • Macquarie ASEAN Conference 2015 • REITAS Singapore REIT & Sponsors Forum 2015 OVerseAs • UBS Global Real Estate Conference (London) and europe non-Deal roadshow • CLSA Tokyo and Seoul Access Non-Deal Roadshow (Japan and south Korea) • Citi Asia Pacific Property Conference 2015 (Hong Kong) • RHB Kuala Lumpur Non-Deal Roadshow (Malaysia) the management met or spoke with 275 institutional investors in fY2015, compared to 307 investors in fY2014. 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 november 2015, 50.07% of the total fCt issued units were held by institutional investors, 41.35% were held by the sponsor group (comprising frasers Centrepoint limited and fCaM) and 8.58% were held by individual investors. there were 5,837 CDp-registered unitholders of fCt and an additional 583 investors who held their units under their Cpf-Investment accounts. 5 1 0 2 t r o p e r l a u n n a 11 t s u r t I t n o p e r t n e C s r e s a r f iNVest Or rel AtiONs coverAGe by equity reseArcH Houses enquiries During the year under review, there were 18 equity research firms (fY2014: 16) which provided equity research coverage on fCt. the firms that initiated new research coverage on fCt during fY2015 include Maybank Kim eng research, phillip research and KGI fraser securities. standard Chartered ceased their equity research activities in singapore during the year. 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 the research firms which cover fCt (in alphabetical order) are: unit reGistrAr 1. Bank of america-Merrill lynch 2. Bnp paribas 3. CIMB research 4. Citi Investment research 5. Clsa 6. Credit suisse 7. Daiwa Capital Markets 8. DBs Vickers securities 9. HsBC 10. J.p. Morgan 11. KGI fraser securities 12. Maybank Kim eng research 13. oCBC Investment research 14. phillip research 15. religãre Institutional research 16. rHB* 17. uBs 18. uoB Kay Hian research Boardroom Corporate & advisory services pte ltd phone: (65) 6536-5355 fax: (65) 6536-1360 Website: www.boardroomlimited.com Fy2016 FinAnciAl cAlenDAr# 21 January 2016 annual General Meeting 21 January 2016 1Q fY2016 results announcement end february 2016 1Q fY2016 Distribution payment 21 april 2016 2Q fY2016 results announcement end May 2016 2Q fY2016 Distribution payment 21 July 2016 3Q fY2016 results announcement end august 2016 3Q fY2016 Distribution payment 20 october 2016 4Q fY2016 results announcement end november 2016 4Q fY2016 Distribution payment * formerly DMG & partners securities pte ltd # note: Dates are indicative and are subject to change 5 1 0 2 t r o p e r l a u n n a 12 t s u r t I t n o p e r t n e C s r e s a r f Fct uNit price perFOrmANce perFormAnce oF tHe Fct unit price For Fy2015 (1 October 2014 – 30 September 2015) fCt unit price closed at $1.905 on 30 september 2015, this is 1.06% higher than the last done price on 30 september 2014, the last day of the preceding period. During this period, despite the volatilities in the global equities markets arising from uncertainties in the global economy, risk of interest rates hike by the us federal reserve, geopolitical tensions and among other factors, fCt units registered a total return of 6.96%, outperforming the ftse reIt index which registered total return of -1.80%. over the longer 3-year and 5-year periods, fCt units registered total returns of 24.91% and 71.16%, respectively. trADinG perFormAnce HiGHliGHts • Opening price on 1 October 2014 • Closing price on 30 September 2015 • Highest closing price • Lowest closing price • Average daily trading volume • Total volume traded : $1.885 : $1.905 : $2.15 on 24 April 2015 : $1.85 on 24 August 2015 : 1,265,170 units : 321.5 million units Fct unit price perFormAnce in Fy2015 (Base = 100 on 30 September 2014) fCt ftse reIt Index 120% 115% 110% 105% 100% 95% 90% 85% 80% Fct 101.1% Ftse reit iNDeX 92.5% 30/09/14 31/10/14 30/11/14 31/12/14 31/01/15 28/02/15 31/03/15 30/04/15 31/05/15 30/06/15 31/07/15 31/08/15 30/09/15 performance of Fct compared with Ftse reit index fCt ftse reIt Index 1 year 3 years 5 years price change 1.06% -7.48% total return 6.96% -1.80% price change 5.25% -7.25% total return 24.91% 10.74% price change 28.72% -0.10% total return 71.16% 35.42% note: Calculation of the price change is based on the closing price on the last day of the preceding reporting period compared with the closing price on the last day of the next period. Calculation of the total return assumed the distributions paid during the period are reinvested. source: Bloomberg 5 1 0 2 t r o p e r l a u n n a 13 t s u r t I t n o p e r t n e C s r e s a r f 5 1 0 2 t r o p e r l a u n n a 15 t s u r t I t n o p e r t n e C s r e s a r f G r o w i nG Fo r tHe Fu t u r e fCt is well-positioned to tap exciting growth opportunities ahead, both in singapore and across the region. our focus on developing a portfolio of suburban, high-quality retail assets is supported by an established sponsor, which places us on track to deliver steadfast performances and generate sustainable returns for our unitholders. BOArD OF Direct Ors mr pHilip eNG HeNG Nee, 69 Chairman, non-executive and Independent Director Dr cHew tu AN cHiONG, 57 executive and non-Independent Director Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 3 April 2006 9 years and 6 months Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 14 July 2010 5 years and 2 months Board committee served on • Audit Committee (Member) Board committee served on nil Academic & professional Qualifications • Bachelor of Commerce in Accountancy, University of Academic & professional Qualifications • Bachelor of Engineering (First Class Honours), new south Wales Monash university • Associate Member, Institute of Chartered Accountants in australia present Directorships (as at 30 september 2015) Listed companies • Ezra Holdings Limited • Frasers Centrepoint Limited (Chairman of Remuneration Committee and Member of audit Committee) • mDR Limited (Non-Executive Chairman) • PT Adira Dinamika Multi Finance, Tbk (Commissioner) • The Hour Glass Limited Listed REITs/Trusts • Hektar Asset Management Sdn Bhd, Manager of Hektar real estate Investment trust Others • Frasers Property Australia Pty Limited • Heliconia Capital Management Private Limited • KK Women’s and Children’s Hospital Pte Ltd • NTUC Income Insurance Cooperative Limited • Singapore Health Services Pte Ltd • Vanda 1 Investments 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 2012 to 30 september 2015) • Asia Pacific Breweries Limited • Fraser and Neave, Limited • Hup Soon Global Corporation Limited Others • Former Group Managing Director, Jardine Cycle & Carriage Group • 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 2015) Listed companies nil Listed REITs/Trusts • Hektar Asset Management Sdn Bhd, Manager of Hektar real estate Investment trust Others • CityNet Infrastructure Management Pte Ltd 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 2012 to 30 september 2015) 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 5 1 0 2 t r o p e r l a u n n a 16 t s u r t I t n o p e r t n e C s r e s a r f BOArD OF Direct Ors mr cHiA KHONG sHOONG, 44 non-executive and non-Independent Director mr BOBB y cHiN yOKe cHOONG, 64 non-executive and Independent Director Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 1 September 2009 6 years and 1 month Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 3 April 2006 9 years and 6 months Board committee served on nil Board committee served on • Audit Committee (Chairman) Academic & professional Qualifications • Bachelor of Commerce (Accounting and Finance) (first Class Honours), university of Western australia Academic & professional Qualifications • Bachelor of Accountancy, University of Singapore • Associate member, Institute of Chartered Accountants • Master of Philosophy (Management Studies), Cambridge in england and Wales university present Directorships (as at 30 september 2015) Listed companies nil Listed REITs/Trusts • Frasers Centrepoint Asset Management (Commercial) limited, Manager of frasers Commercial trust Others nil major appointments (other than Directorships) • Chief Financial Officer, Frasers Centrepoint Limited past Directorships in listed companies held over the preceding 3 years (from 1 October 2012 to 30 september 2015) • Gemdale Properties and Investment Corporation Limited Others • Previously, Director, Investment Banking, The Hong Kong & shanghai Banking Corporation ltd present Directorships (as at 30 september 2015) Listed companies • AV Jennings Limited • Ho Bee Land Limited • Sembcorp Industries Limited • Singapore Telecommunications Limited • Yeo Hiap Seng Limited Others • NTUC Enterprise Co-operative Limited (Deputy Chairman) • NTUC Fairprice Co-operative Limited (Chairman) • Singapore Labour Foundation • Temasek Holdings (Private) 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 2012 to 30 september 2015) • Oversea-Chinese Banking Corporation 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 5 1 0 2 t r o p e r l a u n n a 17 t s u r t I t n o p e r t n e C s r e s a r f BOArD OF Direct Ors mr lim ee seNG, BBm, 64 non-executive and non-Independent Director mr sOH Kim sOON , 69 non-executive and Independent Director Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 27 January 2006 9 years and 8 months Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 23 March 2006 9 years and 6 months Board committee served on nil 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 • Bachelor of Arts (Honours), University of Singapore • Associate, Chartered Institute of Bankers present Directorships (as at 30 september 2015) Listed companies • EnGro Corporation Limited present Directorships (as at 30 september 2015) Listed companies nil Others • ORIX Investment and Management Private Limited • ORIX Leasing Singapore Limited Listed REITs/Trusts • Frasers Centrepoint Asset Management (Commercial) major appointments (other than Directorships) • Chairman of ORIX Investment and Management Private limited, Manager of frasers Commercial trust limited past Directorships in listed companies held over the preceding 3 years (from 1 October 2012 to 30 september 2015) nil Others • Previously Senior Managing Director of DBS Bank • Frasers Hospitality Asset Management Pte Ltd, Manager of frasers Hospitality real estate Investment trust • Frasers Hospitality Trust Management Pte Ltd, Trustee- Manager of frasers Hospitality Business trust Others • Frasers Property Australia Pty Limited • Vacaron Company Sdn Bhd 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 2012 to 30 september 2015) • Gemdale Properties and Investment Corporation Limited Others • Awarded Public Service Star (BBM) • Former Board member of the Building and Construction authority of singapore • Former Council member of the Singapore Chinese Chamber of Commerce and Industry • Previously Managing Director of MCL Land Limited • Previously General Manager (Property Division), first Capital Corporation ltd. • Previously Project Manager, Singapore Land Limited 5 1 0 2 t r o p e r l a u n n a 18 t s u r t I t n o p e r t n e C s r e s a r f BOArD OF Direct Ors mr cHrist OpHer tANG K OK KAi, 54 non-executive and non-Independent Director Date of appointment as Director Length of service as Director (as at 30 September 2015) : : 27 January 2006 9 years and 8 months Board committee served on nil Academic & professional Qualifications • Bachelor of Science, National University of Singapore • Master of Business Administration, National University of singapore present Directorships (as at 30 september 2015) Listed companies nil Listed REITs/Trusts • Frasers Centrepoint Asset Management (Commercial) limited, Manager of frasers Commercial trust • Hektar Asset Management Sdn Bhd, Manager of Hektar real estate Investment trust Others • Republic Polytechnic (Member of the Board of Governors) • REIT Association of Singapore (Member of the Executive Committee) 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 2012 to 30 september 2015) • Gemdale Properties and Investment Corporation Limited Others • Previously the Chief Executive Officer of Frasers Centrepoint asset Management ltd., the Manager of frasers Centrepoint trust, from July 2006 to february 2010 • Previously worked with DBS Bank, DBS Land and British petroleum 5 1 0 2 t r o p e r l a u n n a 19 t s u r t I t n o p e r t n e C s r e s a r f trust mANAGemeNt teAm from left: Ms lim poh tin, Mr alex Chia, Dr Chew tuan Chiong, Ms tay Hwee pio, Mr Chen fung leng 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. Dr cHew tu AN cHiONG Chief executive officer & executive Director mr AleX cHiA Head, Investment please refer to Dr Chew’s biography in the section on ‘Board of Directors’ 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. 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 tA y 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. 5 1 0 2 t r o p e r l a u n n a 20 t s u r t I t n o p e r t n e C s r e s a r f pr Opert y mANAGem eNt teAm from left: Mr edmund tan, Mr Chia shee liang, Ms Molly lim, Ms Jill ng, Ms see san san 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, 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 graduated in Interior Design from the lasalle-sIa, College of the arts. mr cHiA sHee liANG General Manager shee liang has more than 20 years of experience in the real estate sector. He leads the property Management team in managing the portfolio of retail properties in the company. 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 sqm. shee liang obtained his B.sc (estate Management) from national university of singapore. ms mOlly lim senior Manager, retail properties Molly oversees the operations and business processes of 3 malls in the fCt portfolio. she has 25 years in retail property management and commercial leasing. prior to this, she was overseeing Causeway point for 18 years. Being part of the pioneer centre management team for Causeway point, she was instrumental in establishing the administrative framework and standard operational procedures for the mall. Her responsibilities include the operations and management of the mall, tenancy and leasing management, customer service, and the implementation of retail policies and initiatives of the frasers Group. she played significant role in the asset enhancement works of Causeway point which was completed in 2012. Molly graduated from the national university of singapore with a Bachelor of social sciences (Honours) degree majoring in economics. she also holds a Graduate Diploma in Business administration from the singapore Institute of Management. ms Jill NG Head, advertising & promotions 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 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. ms see sAN sAN Head, leasing san san heads the leasing function across ten malls in the fCl Group and she has more than 20 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. 5 1 0 2 t r o p e r l a u n n a 21 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView 24 operations review 28 financial review 31 Capital resources 33 risk Management 34 retail property Market review 5 1 0 2 t r o p e r l a u n n a 23 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView Ope rA tiONs reView leAse renewAls a total of 255 leases were renewed in fY2015. these leases accounted for 343,836 square feet or 31.7% of fCt’s total net lettable area (the “NlA”) and the average rental reversion of these renewals was 6.3% (fY2014: 6.5%). rental reversion refers to the variance between the average rental rate of the renewed leases and the preceding expired leases which were contracted typically 3 years ago. all malls, with the exception of Bedok point, recorded positive rental reversions of between 5.7% and 10.8% for the year. summAry oF leAses reneweD1 in Fy2015 property Causeway point northpoint Changi City point Bedok point Yewtee point anchorpoint Fct portfolio Number of leases renewed Aggregate NlA of renewed leases (square feet) renewed NlA as percentage of property’s NlA Average rental reversion positive/ (Negative) 74 78 46 11 32 14 255 105,677 112,968 54,734 14,262 34,692 21,503 343,836 25.4% 48.0% 26.4% 17.2% 47.1% 30.3% 31.7% 6.3% 5.7% 9.0% (6.4%) 8.4% 10.8% 6.3% 1 excluding newly-created and reconfigured area. leAse expiry proFile the portfolio lease expiry from fY2016 to fY2020 and the lease expiry by property in fY2016 are presented in the next two tables. our leases have an average lease duration of 3 years. Certain key or anchor tenants may be offered longer tenures, depending on the lease structure. the lease expiry profile of the portfolio is relatively well-staggered with leases accounting for 29.9% and 35.2% of fCt’s Gross rental Income (the “Gri”) due for renewals in fY2016 and fY2017, respectively. as at 30 september 2015, the weighted average lease expiry of fCt portfolio stood at 1.50 years by nla and 1.54 years by GrI. the aggregate nla of the leases in fCt portfolio due for renewal in fY2016 is 320,021 square feet and substantial portion of it is attributed to Causeway point, Changi City point and northpoint. portFolio leAse expiry As At 30 september 2015 number of leases expiring 227 243 214 9 1 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 total 694 total nla of expiring leases (square feet) nla of expiring leases as % of the portfolio’s nla GrI of expiring leases as % of the portfolio’s GrI 320,021 360,267 293,586 59,808 8,461 1,042,143 30.7% 34.6% 28.2% 29.9% 35.2% 29.2% 5.7% 5.3% 0.8% 100.0% 0.4% 100.0% 5 1 0 2 t r o p e r l a u n n a 24 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView leAse expiry For Fy2016 As At 30 september 2015 property Causeway point northpoint Changi City point Bedok point Yewtee point anchorpoint Fct portfolio Number of leases expiring NlA of expiring leases (square feet) NlA of expiring leases as % of the mall’s NlA1 Gri of expiring leases as % of the mall’s Gri2 57 56 54 12 23 25 227 105,021 75,468 86,993 14,557 14,616 23,366 320,021 25.4% 32.6% 46.1% 20.9% 20.9% 34.0% 30.7%3 24.1% 34.1% 44.8% 23.1% 23.3% 35.1% 29.9%4 1 as percentage of mall’s nla as at 30 september 2015. 2 as percentage of mall’s actual gross rent income for the month of september 2015, excluding gross turnover rent. 3 as percentage of leased area of fCt portfolio as at 30 september 2015. 4 as percentage of actual gross rent income of fCt portfolio for the month of september 2015, excluding gross turnover rent. portFolio tenAnts’ sAles AnD occupAncy cost fCt’s portfolio tenants’ sales grew 2.9% in fY2015 compared with the same period in fY2014. the average occupancy cost for fCt portfolio for the 12-month period between october 2014 and september 2015 was 15.3%. this is slightly lower than the 16.4% registered in fY2014. occupancy cost refers to the ratio of gross rental paid by the tenants to the tenant’s sales turnover (excluding Goods & services tax). leAses witH Gross turnover rent AnD step-up clAuses nearly all our leases include step-up clauses that provide for annual rental increment of between 1% and 2% during the lease term. In addition, 95% of the occupied leases include Gross turnover rent (the “GtO”) clauses, which the tenants would pay between 0.5% and 1% of their sales as part of the gross rent under the lease agreements. the aggregate Gto as a percentage of fCt’s gross revenue was approximately 5% for the year under review, which is stable compared with fY2014. percentAGe oF occupieD leAses witH Gto AnD step-up clAuses With Gto clause With step-up clause portFolio occupAncy Fy2015 94.8% 99.3% Fy2014 increase/(Decrease) 95.3% 99.2% (0.5%-point) 0.1%-point the average portfolio occupancy stood at 96.0% as at 30 september 2015, this is 2.9%-point lower than a year ago. the occupancy by property is shown in the table below. the occupancy at Causeway point, northpoint, Yewtee point and anchorpoint remained relatively stable within 2%-point variance. Bedok point and Changi City point saw steeper declines in their occupancy compared with a year ago, mainly due to vacancies from on-going tenant re- positioning activities at these two malls. Occupancy by property As at 30 september 2015 As at 30 september 2014 increase/(Decrease) Causeway point northpoint Changi City point Bedok point Yewtee point anchorpoint Fct portfolio 99.5% 98.2% 91.1% 84.2% 94.8% 96.9% 96.0% 99.8% 99.4% 97.9% 98.2% 96.6% 97.8% 98.9% (0.3%-point) (1.2%-point) (6.8%-point) (14.0%-point) (1.8%-point) (0.9%-point) (2.9%-point) 5 1 0 2 t r o p e r l a u n n a 25 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView sHopper trAFFic the total shopper traffic in fY2015, excluding Changi City point which was acquired on 16 June 2014, was 86.6 million (fY2014: 83.5 million), an increase of 3.7% year-on-year. the growth can be generally attributed to increased promotional activities and events, more long weekends such as the sG50 Jubilee weekends and the normalising of the shopper traffic pattern over time after the opening of several new malls in the previous year. In the case of the Causeway point, which registered 11.2% growth in traffic, some of the additional shopper traffic could be attributed to the partial closure of a shopping mall in the adjacent precinct which underwent renovations for several months. Bedok point showed 11.3% decline in shopper traffic due to on-going tenant remixing activities at the mall and competition from a larger mall nearby. traffic at the other malls, including Changi City point, remained relatively stable. shopper traffic by property (million) Fy2015 Fy2014 increase/(Decrease) Causeway point northpoint Bedok point Yewtee point anchorpoint Fct portfolio, excluding changi city point Changi City point Fct portfolio 24.9 41.3 4.7 12.1 3.6 86.6 10.6 97.2 22.4 40.3 5.3 11.7 3.8 83.5 2.71 86.2 11.2% 2.5% (11.3)% 3.4% (5.3)% 3.7% - - 1 this is the shopper traffic for 3 months from July to september 2014. Changi City point was acquired on 16 June 2014 trADe sector AnAlysis fCt’s well-diversified portfolio comprises 11 trade sectors. food & restaurants is the largest sector which accounted for 30.1% of fCt’s total nla, down slightly from 30.7% a year ago. In term of gross rents, food & restaurants is again the largest contributor, accounting for 34.2% of total fCt gross rents, up slightly from 33.8% a year ago. 1 2 3 4 5 6 7 8 9 10 11 12 trade classifications food & restaurants fashion services/education Beauty, Hair, Cosmetics, personal Care Household supermarket Healthcare Department store Books, Music, art & Craft, Hobbies sports apparels & equipment leisure/entertainment Vacant total % NlA 30.1% 15.1% 8.8% 5.3% 8.7% 8.1% 2.7% 5.7% 3.7% 3.3% 4.5% 4.0% % rents1 34.2% 21.5% 8.9% 7.7% 7.6% 4.9% 3.9% 3.3% 3.2% 3.1% 1.7% 0.0% 100.0% 100.0% 1 as percentage of actual gross rent income of fCt portfolio for the month of september 2015, excluding gross turnover rent. 5 1 0 2 t r o p e r l a u n n a 26 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView top 10 tenAnts by Gri1 the top ten tenants collectively accounted for 23.8% of the total GrI as at 30 september 2015 (30 september 2014: 22.0%). 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 5.4% of the portfolio GrI in fY2015. top 10 tenAnts by Gri As At 30 september 2015 tenant Cold storage singapore (1983) pte ltd2 Metro (private) limited3 Copitiam pte ltd4 Courts (singapore) limited Koufu pte ltd food republic pte ltd trade sector supermarket Department store food & restaurants Household food & restaurants food & restaurants Watson's personal Care stores pte ltd Beauty, Hair, Cosmetics, personal Care ntuC fairprice Co-operative ltd5 McDonald's restaurants pte ltd uniqlo (singapore) pte ltd tOtAl (top 10) supermarket food & restaurants fashion 1 Based on actual gross rental income for the month of september 2015, excluding gross turnover rent 2. 3. Includes the leases for Cold storage supermarket, Guardian pharmacy and 7-eleven stores Includes the leases for Metro departmental store and Clinique service Centre 4. operator of Kopitiam food courts, includes Kopitiam, Bagus, Cantine, Dorakeiki 5. Includes leases for ntuC fairprice and ntuC Healthcare (unity) Gri % 5.4% 3.2% 2.9% 2.6% 2.2% 1.7% 1.5% 1.5% 1.4% 1.4% 23.8% 5 1 0 2 t r o p e r l a u n n a 27 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView Fy2015 80,960 50,335 9,386 14,049 8,772 25,740 189,242 Fy2015 21,860 14,179 4,441 4,329 3,973 9,417 58,199 Fy2015 59,100 36,156 4,945 9,720 4,799 16,323 Fy2014 increase/(Decrease) 78,233 49,491 10,805 13,738 8,663 7,8241 168,754 3.5% 1.7% (13.1)% 2.3% 1.3% 229.0% 12.1% Fy2014 increase/(Decrease) 21,752 13,512 4,573 4,174 3,986 2,6611 50,658 0.5% 4.9% (2.9%) 3.7% (0.3%) 253.9% 14.9% Fy2014 increase/(Decrease) 56,481 35,979 6,232 9,564 4,677 5,1631 4.6% 0.5% (20.7%) 1.6% 2.6% 216.2% 11.0% F iN ANciAl reView Gross revenue ($’000) Causeway point northpoint Bedok point Yewtee point anchorpoint Changi City point total Fct property expenses ($’000) Causeway point northpoint Bedok point Yewtee point anchorpoint Changi City point total Fct Net property income ($’000) Causeway point northpoint Bedok point Yewtee point anchorpoint Changi City point total Fct 5 1 0 2 t r o p e r l a u n n a 28 t s u r t I t n o p e r t n e C s r e s a r f 1 Changi City point was acquired on 16 June 2014. the financial figures for fY2014 for Changi City point is for the period 16 June 2014 to 30 september 2014. 131,043 118,096 OperA tiONs & FiNANciAl reView perFormAnce compArison between Fy2015 AnD Fy2014 Gross revenue for the year ended 30 september 2015 was $189.2 million, an increase of $20.5 million or 12.1% over the corresponding period last year. the increase was mainly contributed by the addition of Changi City point to the portfolio on 16 June 2014. fCt’s property portfolio continued to achieve net positive rental reversions during the year. rentals from renewal and replacement leases from the properties commencing during the period, showed an average increase of 6.3% over the expiring leases. property expenses for the year ended 30 september 2015 totaled $58.2 million, an increase of $7.5 million or 14.9% from the corresponding period last year. the increase was mainly due to the addition of Changi City point to the portfolio on 16 June 2014, as well as higher maintenance expenses and other property expenses. the above increase was partially offset by the write-back of provisions for property tax and property tax refunds. Hence, net property income was $131.0 million, which was $12.9 million or 11.0% higher than the corresponding period last year. Distribution Income available for distribution for the year ended 30 september 2015 was $106.4 million, which was $11.0 million higher compared to the corresponding period in the preceding financial year. Distribution per unit for fY2015 grew 3.8% to a new-high of 11.608 cents from 11.187 cents. the breakdown and comparison of the distribution per unit for fY2015 and fY2014 are presented below. Distribution per unit (cents) Financial year ended 30 september first quarter (1 october – 31 December) second quarter (1 January – 31 March) third quarter (1 april – 30 June) fourth quarter (1 July – 30 september) Full year (1 October – 30 september) Fy2015 2.750 2.963 3.036 2.859 11.608 Fy2014 increase 2.500 2.880 3.022 2.785 11.187 10.0% 2.9% 0.5% 2.7% 3.8% 5 1 0 2 t r o p e r l a u n n a 29 t s u r t I t n o p e r t n e C s r e s a r f OperA tiONs & FiNANciAl reView totAl Assets AnD net Asset vAlue per unit as at 30 september 2015, the total assets of fCt stood at $2,549 million, a slight increase from $2,522 million a year ago. the increase was attributed to the recognition of $64.0 million of surplus on revaluation of fCt’s properties, partially offset by a decrease in cash due to repayment of debt as well as decrease in carrying value of investment in H-reIt. the total appraised value of the investment properties was $2,464 million as at 30 september 2015, being $64.0 million higher than the year before. fCt’s net assets stood at $1.75 billion as at 30 september 2015, compared with $1.70 billion a year ago. Correspondingly, the net asset value (the “NAV”) of fCt increased to $1.91 per unit from $1.85 a year ago. As at naV per unit 30 september 2015 30 september 2014 $1.911 $1.852 1 Computed based on 917,211,336 units, comprising (i) 916,840,040 units in issue as at 30 september 2015; and (ii) 371,296 units issuable to the Manager in october 2015 at an issue price of $1.8925 per unit, in satisfaction of 20% of the management fee payable to the Manager for the quarter ended 30 september 2015. 2 Computed based on 915,779,232 units, comprising (i) 915,415,215 units in issue as at 30 september 2014; and (ii) 364,017 units issuable to the Manager in october 2014 at an issue price of $1.9085 per unit, in satisfaction of 20% of the management fee payable to the Manager for the quarter ended 30 september 2014. ApprAiseD vAlue oF properties3 property Causeway point northpoint Bedok point Yewtee point anchorpoint Changi City point total Valuation as at 30 september 2015 ($ million) Valuation as at 30 september 2014 ($ million) 1,110.0 665.0 108.0 170.0 100.0 311.0 2,464.0 1,058.0 655.0 120.0 168.0 93.0 306.0 2,400.0 capitalisation rate4 2015 5.35% 5.25% 5.50% 5.50% 5.50% 5.70% 2014 5.35% 5.25% 5.50% 5.50% 5.50% 5.70% 3 the properties were valued by one of CBre pte. ltd., Colliers International Consultancy & Valuation (singapore) pte. ltd., DtZ Debenham tie leung (se asia) pte. ltd., Jones lang lasalle property Consultants pte. ltd., or Knight frank pte. ltd. on 30 september 2015. Valuation methods used include: capitalisation approach, discounted cash flows analysis and direct comparison method in determining the fair values of the properties. annual valuations are required by the Code on Collective Investment schemes. 4 as indicated by property valuers. 5 1 0 2 t r o p e r l a u n n a 30 t s u r t I t n o p e r t n e C s r e s a r f cApit Al resOurces overview frasers Centrepoint asset Management ltd. (“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, standard Chartered Bank and Citibank. as at 30 september 2015, fCt has a total capacity of $1,534 million from its sources of funding, of which $718 million or 46.8% has been utilised. the following table summarises the capacity and the amount utilised for each of the sources of funding: sources of Funding revolving credit facility Medium term note programme Bank borrowings total creDit rAtinGs type unsecured unsecured secured capacity Amount utilised % utilised $50 million $1,000 million $484 million $1,534 million $14 million $220 million $484 million $718 million 28.0% 22.0% 100.0% 46.8% fCt has corporate credit ratings from standard & poor’s rating services (“s&p”) and Moody’s Investors service (“moody’s”). on 17 february 2015, Moody’s changed the outlook of fCt’s Baa1 issuer rating to positive from stable. the rating action reflects fCt’s enlarged asset portfolio, which remains focused on the resilient suburban retail sector, as well as its strong financial profile that is supported by a long track record of prudent financial management. s&p has given fCt a corporate rating of “BBB+” 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 10 april 2015, issued $60 million 2.9% Medium term notes (“notes”) due 2019 under fCt’s existing Mtn programme. the proceeds from this issue was utilised to refinance the $70 million 2.3% notes which matured on 12 June 2015. fCt’s total gross borrowings stood at $718 million at 30 september 2015, of which $278 million of borrowing (about 38.7% of total borrowing) will mature in the next 12 months. the total borrowings comprised $334 million in secured bank borrowings, $164 million unsecured bank borrowings and $220 million in unsecured notes. fCt’s gearing stood at 28.2% as at 30 september 2015. the interest cover for the year ended 30 september 2015 was 6.61 times. the weighted average debt maturity was 1.6 years as at 30 september 2015. 5 1 0 2 t r o p e r l a u n n a 31 t s u r t I t n o p e r t n e C s r e s a r f cApit Al resOurces HiGHliGHts Financial year ended 30 september 2015 2014 total Borrowings Gearing1 Interest Cover average cost of borrowing average Debt Maturity $718 million $739 million 28.2% 6.61 times 2.40% 1.6 years 29.3% 6.20 times 2.51% 2.5 years 1 Calculated as the ratio of total outstanding borrowings over the total assets as at the stated balance sheet date. Debt mAturity proFile As At 30 september 2015 timeframe < 1 year 1-2 years 2-4 years > 4 years total Borrowings $718.0 million Amount Due ($ million) As % of total borrowings 278.0 250.0 120.0 70.0 718.0 38.7% 34.8% 16.7% 9.8% 100.0% $278.0 million (38.7% of total debt) $250.0 million (34.8% of total debt) $120.0 million (16.7% of total debt) $70.0 million (9.8% of total debt) total Debt < 1 year 1-2 years 2-4 years > 4 years 5 1 0 2 t r o p e r l a u n n a 32 t s u r t I t n o p e r t n e C s r e s a r f 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 are reviewed annually. risk upDAte formal risk reviews take place half yearly and the scorecard is updated regularly. on a 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 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 including those set out in the Code of Corporate Governance 2012 and 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 2015 OperAtiONAl risK 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 risK 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 risK 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. 5 1 0 2 t r o p e r l a u n n a 33 t s u r t I t n o p e r t n e C s r e s a r f re tAil pr Opert y mArKet reView By JONes lANG lAsAlle prOperty cONsultANts pte ltD 30 OctOBer 2015 mAcro-economic overview FiGure 1: resiDent populAtion in sinGApore (as of June 2015) GrOss DOmestic prODuct singapore’s economic growth continued to moderate in 2015, after growing 2.9% in 2014 and 4.4% in 2013. according to the Ministry of trade and Industry (MtI), gross domestic product (GDp) growth was reduced to 1.8% y-o-y in 2Q 2015, following a 2.8% y-o-y expansion 1Q 2015. the advance estimates for 3Q 2015 GDp from the MtI moderated further, growing by 1.4% y-o-y. economic growth was underpinned by a sustained y-o-y growth in the wholesale and retail trade, a key contributor to the singapore economy. overall growth, however, was dragged down by an extended and a faster paced contraction in the manufacturing and accommodation & food services sectors in 2Q 2015 than was seen in 1Q 2015. a decline in the transportation & storage sector also weighed on growth in 2Q 2015. iNFlAtiON the Monetary authority of singapore’s (Mas) Core Inflation (excluding costs of accommodation and private road transport) picked up to 0.6% y-o-y in september 2015 compared to 0.2% y-o-y in august. this mainly reflected the stronger pickup in prices of services and retail goods. Core Inflation at 0.6% y-o-y in the January-september 2015 period continued to soften, following an increase of 1.5% y-o-y for full-year 2014. the inflation in 2015 was largely driven by higher prices of food and education. pOpulAtiON AND emplOymeNt as of september 2015, singapore’s total population rose 1.2% y-o-y to 5.53 million. Residents, comprising citizens and permanent residents, made up 3.87 million of the total population while non-residents contributed the remaining 1.6 million. Between 2010 and 2015, the total population rose 9.0% mainly driven by an influx of non- residents, the number of which rose 25.1% over this period. figure 1 highlights singapore’s population spread and growth based on the urban redevelopment authority’s boundaries. although the Central and West regions of singapore are the most densely-populated, population growth is strongest in the north and north-east regions of the country. this growth is due to the completion of housing developments in sembawang in the north region and in the new residential towns, namely punggol and sengkang in the north-east region. figure 2 highlights the population density of housing estates across singapore. Many suburban estates, including Woodlands, Yishun, Choa Chu Kang and Bedok have high density, providing natural catchments for suburban malls. 5 1 0 2 t r o p e r l a u n n a 34 t s u r t I t n o p e r t n e C s r e s a r f source: ura, Department of statistics singapore, Jll research, september 2015 FiGure 2: resiDent populAtion by plAnninG AreA (as of June 2015) source: Department of statistics singapore, september 2015 overall, unemployment remained low at 2.0% as of June 2015 as new employment continued to outpace layoffs. However, overall employment growth in the first half of 2015 slowed down, on a y-o-y basis, due to a lower increase in foreign manpower than in the previous year. singapore has been progressively raising the quality of its workforce and reducing reliance on foreign labour. overall, the labour market is expected to remain tight over the near term, with demand growth likely supported by externally oriented sectors such as the wholesale trade, and finance & insurance. labour intensive industries will continue to be constrained by a shortage of workers. retAil pr Opert y mArKet reView By JONes lANG lAsAlle prOperty cONsultANts pte ltD 30 OctOBer 2015 Key GOVerNmeNt plANs AND pOlicies the following plans and policies introduced by the government highlight the growth opportunities for the retail industry: population white paper 2013 on population Growth in 2020 and 2030. the government is projecting that singapore’s total population could reach 5.8 to 6 million by 2020, and 6.5 to 6.9 million by 2030. this translates to a forecast growth rate of 1 - 1.5% from 2014 to 2020 and 1.1 - 1.4% from 2020 to 2030. a growing population will lead to increased retail spending which is expected to lift demand for retail space. urban redevelopment Authority (urA) plans – ura’s emphasis on decentralisation will introduce more commercial and industrial activities to the suburban areas. Woodlands regional Centre will have 700,000 sqm of new commercial space and more amenities introduced in existing and new housing areas. Changi will benefit from the expansion of the business park and become a hub for employment and will also benefit from the development of a leading-edge university. the increased activities will raise the resident and working catchment, and benefit retail malls in the areas. land transport Authority plans for New train lines and extensions. the expected completion of the Downtown line and the Jurong regional line extensions in 2017 and 2025 respectively, as well as the new Cross Island line in 2030, will improve connectivity and access to retail space island-wide. this is expected to improve shoppers’ mobility and benefit retail malls near transport nodes. singapore tourism Board (stB) efforts to Boost tourism. the stB will invest sGD65 million in joint marketing campaigns globally and domestically together with industry stakeholders, including the Changi airport Group (CaG) to boost tourist arrivals in singapore. With these efforts, the downside risks of weak tourist arrivals and retail sales are likely to be contained in 2015, and retailers’ sales in the short-to-medium term will be boosted. HOuseHOlD iNcOme AND eXpeNDiture according to the Department of statistics, over the last ten years between 2004 and 2014, the average monthly household income from work rose 3.2% annually, in real terms. over this period, household income growth for the lower 50.0% decile over 2009-2014 outpaced growth over 2004-2009, a reflection of the success of the government initiatives in lifting the skill levels of lower and middle-income workers over the past five years. the rising real income trend for all income groups will increase the amount of money available for retail spending and, in turn, demand for retail space. specifically, the rising income of the lower and middle income groups that fuel spending, contributed to the growth plans of mass-market retailers and to the growth in demand for suburban retail space. according to the Household expenditure survey made by the Department of statistics, average household expenditure grew by 4.4% per annum over the past five years between 2007/2008 and 2012/2013. this was faster than the 2.6% annual growth between 2002/2003 and 2007/2008, and was a reflection of household’s greater propensity to spend with higher income growth, especially those from the lower and middle-income groups. With rising affluence, households spent more on dining in restaurants, cafes and pubs, contributing to the growth of f&B outlets in shopping malls. Household spending on education services also rose in line with the greater emphasis on children’s education over the years and this fueled the growth of education centres, predominantly in the suburban shopping malls. priVAte cONsumptiON eXpeNDiture (pce) private Consumption expenditure (pCe) grew by 3.4% annually between 2010 and 2014. Growth in 2014 slowed to 2.2% y-o-y, a reflection of more cautious spending due to softer global and domestic economic growth. on a positive note, pCe picked up momentum in 2015 with growth of 3.3% y-o-y in 1Q 2015 and 3.8% y-o-y in 2Q 2015. the major contributors to pCe in 2014 were housing & utilities, recreation & culture, transport, food & non-alcoholic beverages, health and food servicing services. retAil sAles iNDeX, tOurism ArriVAls AND tOurism receipts the seasonally adjusted constant-price basis retail sales Index (excluding motor vehicles) has been volatile over the past year. on a brighter note, the index continued its uptrend, recording an increase of 4.6% m-o-m and 2.1% y-o-y in august 2015, following a slight recovery of 2.6% m-o-m and 0.8% y-o-y in July 2015. the positive change in retail sales in august 2015 was mainly attributable to improved sales of wearing apparel & footwear (10.5% m-o-m and 1.6% y-o-y), furniture & household equipment (8.1% m-o-m and 5.4% y-o-y), watches & jewellery (7.3% m-o-m and 10.3% y-o-y) and telecommunication apparatus & computers (6.8% m-o-m and 0.7% y-o-y). Island-wide special deals and promotions as part of singapore’s 50 years’ anniversary celebration could have contributed to the improved retail sales performance of wearing apparel & footwear and furniture & household equipment. a recovery in tourist arrivals could have accounted for the healthier sales performance of watches & jewellery while the launch of several new smartphone devices could have led to the stronger sales of telecommunication apparatus & computers. the marginal improvement in overall retail sales in the first two months of 3Q 2015 led to improved retail confidence. following seventeen months of weak or negative growth, inbound visitor arrivals picked up sharply by 7.9% y-o-y to 1.5 million in July 2015 and 6.0% y-o-y to 1.4 million in august 2015, according to the singapore tourism Board (stB). Compared to the modest increases in visitor arrivals earlier in the year (1.2% y-o-y in May and 0.3% y-o-y in June) and negative growth from January to april 2015, July’s performance was a peak for 2015. 5 1 0 2 t r o p e r l a u n n a 35 t s u r t I t n o p e r t n e C s r e s a r f re tAil pr Opert y mArKet reView By JONes lANG lAsAlle prOperty cONsultANts pte ltD 30 OctOBer 2015 However, there were fewer visitors from australia (-8.5% y-o-y in July and 0.7% y-o-y in august), a key source market. surprisingly, tourists from Mainland China, who accounted for an average of 14% of the total numbers of tourist arrivals over January-august 2015, surged 53.4% y-o-y in august 2015. this may be attributable to the strength of the Chinese Yuan against the singapore dollar, which made trips to singapore more affordable for Chinese tourists, as well as the easing of the stigma associated with the global aviation disaster of Malaysian airlines flight MH370, which led to a negative impact on tourism demand. OutlOOK following a weak first half, global economic growth in 2H 2015 is expected to pick up gradually, on the back of a modest recovery in the domestic-driven us economy and a continuous but gradual growth in the Euro zone economy. In 2015, the International Monetary fund has forecast global economic growth of 3.3%, somewhat lower than the 3.4% of 2014, led by a gradual pick-up in the advanced economies but weighed down by slower economic growth prospects in China and the consequent dampening impact on the asean economies. a gradual pick-up in the global economy is expected to support singapore’s economic growth in 2015, although sustained low oil prices and the manpower crunch will weigh on the marine & offshore and labour-intensive sectors respectively. Considering the uncertainties, the Ministry of trade and Industry has narrowed its growth forecast for singapore’s economy in 2015 to 2.0-2.5%, from the previous 2.0-4.0%. the retail market outlook is expected to remain tepid on the back of weak consumer confidence. prospects of an imminent interest rate hike that would reduce disposal income for consumer spending, would further dampen retail sentiment. notwithstanding short-term challenges, singapore’s stable economic growth, competitive and mature retail market and strong infrastructure will continue to support consumption and resilience in the retail sector. retAil property mArket retAil iNDustry treNDs international retailers continue to enter singapore – notwithstanding intense competition and a tight labour market, singapore continues to serve as a gateway for international retailers looking to enter the south east asian and Chinese markets. the primary sub-market remains the preferred location for new-to-market international retailers. also, over the past years, mass and mid-tier international retailers have expanded into the suburban market to capture the growing affluence of the local catchments. However, in light of the softer economic outlook, international retailers, particularly those in the lifestyle fashion trade, have become increasingly cautious, favouring only established and accessible locations. suburban shopping continues to gain popularity – With more new suburban malls conveniently located in the suburban markets, and the improving quality of retailers, consumers are increasingly shopping at suburban malls. the strong foot traffic continues to sustain the leasing interest of both international retailers and local brands in the suburban markets, particularly in the regional centres of tampines and Woodlands. new growth areas such as paya lebar and alexandra are also expected to attract retailers as these have less retail competition and an increasingly affluent population base. warehouse retailing catering to mass consumers – Warehouse retailing offering a one-stop shopping experience has been gaining popularity, and capturing not only shoppers’ but retailers’ attention due to the wide range of reasonably priced products offered and the potentially lower occupancy costs. this has led to an increase in warehouse-retail developments in the suburban market over the past year and this increases pressure on traditional mall operators to offer shoppers a better quality shopping experience. It also forces them to keep up-to-date with retail offerings that meet changing consumer preferences and patterns. Omni-channel retailing on the rise – according to the 2012/2013 Household expenditure singapore survey, online purchases are gaining popularity in singapore, especially amongst those aged 25-44 and those in the higher income groups. aligning themselves with changing purchasing patterns, retailers, particularly in the fashion trade, are increasingly embracing omni- channel retailing, and offering a strong online presence to allow shoppers to research, browse and purchase on-the-go whilst maintaining physical stores to build loyalty for their brands. also, a physical store provides service, a point-of-sale, and a more complete shopping experience that allows shoppers to test, feel and try products. emergence of pop-up stores – to offer shoppers a more complete shopping experience, on-line retailers are increasingly maintaining a physical retail presence through pop-up stores in shopping malls. the concept provides a benefits for both parties as it offers retailers preferential rental rates that are not locked into multi- year leases while landlords can fill vacant space and, at the same time, gain new target markets for their shopping malls. eXistiNG supply Based on Jll tracked shopping malls, the island wide retail space stock in 3Q2015 grew 6.3% y-o-y to 24.3 million sq ft. Due to their relatively larger market sizes, the suburban sub-markets provided the bulk (44.5% or 10.8 million sq ft) of total retail space while the orchard sub-market, which comprises the popular orchard shopping belt provided approximately 8.1 million sq ft – 5 1 0 2 t r o p e r l a u n n a 36 t s u r t I t n o p e r t n e C s r e s a r f retAil pr Opert y mArKet reView By JONes lANG lAsAlle prOperty cONsultANts pte ltD 30 OctOBer 2015 33.3% of the island wide stock. the Marina sub-market had the remaining 5.4 million sq ft, contributing 22.2% of the total. the additional supply came largely from about 1.4 million sq ft of new retail space in the suburban sub- markets, following completions of new developments such as one KM (210,000 sq ft), Big Box (260,000 sq ft) and the seletar Mall (188,000 sq ft), as well as the refurbished mall, eastpoint Mall (214,000 sq ft). the orchard and Marina sub-markets have contributed only 141,000 sq ft and 160,000 sq ft of additional retail space since 3Q 2014, the result of new completions and the refurbishment of existing retail malls. pOteNtiAl supply potential supply to come on stream from 4Q 2015 to 2019 is expected to be 3.1 million sq ft, representing a 12.8% increase in the existing stock of 3Q 2015 (figure 3). FiGure 3: Future supply sq ft 2,000,000 1,800,000 1,600,000 1,400,000 1,000,000 800,000 600,000 400,000 200,000 0 2014 2015f 2016f 2017f 2018f 2019f n orchard n Marina n suburban source: Jll research, 3Q 2015 Including new stock in 4Q 2015, a total of 897,000 sq ft of additional retail space will have been added in 2015, 53.0% less than the new supply of 1.9 million sq ft in 2014 and about 45.0% less than the 1.6 million sq ft in 2013. the new space in 2015 is about 20% below the 10-year historical average of new supply of 1.1 million sq ft. the bulk (72.8%) of the new supply from 4Q 2015 to 2019 will be from the suburban sub-market, with 2.3 million sq ft of new space. the orchard sub-market will contribute about 71,000 sq ft (or 2.3% of total future supply) and this will largely be refurbished space. the Marina sub-market will add about 780,000 sq ft, or 24.9% of total new supply. table 4 highlights the pipeline supply for 4Q 2015 and 2016. Most of the new supply in the suburban sub-market from 4Q 2015 to 2019 will be in growth suburban areas such as paya lebar, Woodlands and Changi. this is in line with government plans to decentralise commercial activities and to grow commercial centres outside the city centre. apart from Waterway point (344,000 sq ft), which is scheduled for completion in 4Q 2015, most of this new space is scheduled for completion in 2018, with the paya lebar mixed development (450,000 sq ft), northpoint City (290,000 sq ft) and Jewel @ Changi (575,000 sq ft) expected to come on stream. no new construction is planned for the orchard sub- market in the medium term. the only supply over the next five years will be the refurbished space in the Centrepoint mall. In the Marina sub-market, the new supply coming on-stream is from six new developments, namely the Heart, retail space at tanjong pagar mixed development, Downtown Gallery and south Beach, as well as from two refurbishment projects at Marina square and Downtown Gallery. Most of this space is due for completion in 2016. tAble 4: upcominG supply oF retAil spAce by locAtion AnD scHeDuleD completion yeAr project Name location estimated NlA (sq ft) 4Q15 marina refurbishment of Marina square suburban Waterway point the promenade @ pelikat 2016 prime City Hall 140,000 punggol Central / punggol Walk Jalan pelikat 344,370 58,394 the Centrepoint orchard road 71,380 marina south Beach Duo Galleria the Heart (within Marina one) Guoco tower Downtown Gallery (oue Downtown) suburban Hillion Mall Beach road Bugis Marina south peck seah street / Choon Guan street raffles place Jelebu road Tiong Bahru Plaza Bukit Merah source: Jll research, 3Q 2015 60,000 54,000 140,000 100,000 160,000 168,000 167,200 5 1 0 2 t r o p e r l a u n n a 37 t s u r t I t n o p e r t n e C s r e s a r f re tAil pr Opert y mArKet reView By JONes lANG lAsAlle prOperty cONsultANts pte ltD 30 OctOBer 2015 DemAND AND OccupANcy Healthy pre-commitments contributed to the relatively strong take-up of 1.8 million sq ft of retail space in 2014 (figure 5). leasing demand turned mildly tepid in 2015. Weighed down by a softer economic outlook, cautious consumer spending and manpower woes, several existing retailers, including fJ Benjamin, Courts and tommy Hilfiger, reported significant declines in sales, while others, such as Wendy’s and Goods of Desire, pulled out of singapore. as a result, retailers were more cautious in their expansion plans, choosing to take up space in established malls with proven track records. Demand was largely supply-led and island-wide net absorption was 95,900 sq ft from 1Q 2015 to 3Q 2015 (figure 6). FiGure 5: islAnD-wiDe retAil net ADDitions, tAke-up AnD occupAncy rAte* sq ft 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 -500,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 2Q 2015 3Q 2015 n net supply n take-up n occupancy rate % 100.0 99.5 99.0 98.5 98.0 97.5 97.0 96.5 96.0 95.5 95.0 5 1 0 2 t r o p e r l a u n n a 38 t s u r t I t n o p e r t n e C s r e s a r f source: Jll research, 3Q2015 *Captures only retail space above 50,000 sq ft the completion of several new malls contributed to the island-wide net addition of 354,000 sq ft from 1Q 2015 to 3Q 2015. as a result of a supply-demand imbalance, island-wide occupancy fell 100 basis points from 97.8% as of 4Q 2014 to 96.8% as of 3Q 2015 (figure 6). notwithstanding the weakening consumer sentiment, the suburban sub-market, which depends largely on local consumers, remained relatively resilient, benefitting from the population growth of the local catchment areas. Malls in regional Centres such as Woodlands, that benefits from both the local catchment areas and the general population, continued to thrive while demand for space in malls in good locations and with high shopper patronage, such as VivoCity, remained relatively firm. as a result, the occupancy rate in the suburban sub-market dipped by a lesser extent than in the orchard sub-market, falling by 90 basis points to 97.7% as of 3Q 2015, from 98.6% as of 4Q 2014 (figure 6). the orchard sub-market experienced a steeper decline in occupancy, weighed by the higher vacancies in newly opened Orchard Gateway and the older Far East Plaza. as at 3Q 2015, occupancy fell 110 basis points to 97.1%, from 98.2% as at 4Q 2014 (figure 6). occupancy in the Marina sub-market saw the largest decline, falling 140 basis points from 95.8% as of 4Q 2014 to 94.4% as of 3Q 2015 due to the completion of a massive amount of new space from the final phase of asset enhancement at suntec City. FiGure 6: retAil occupAncy rAte* % 102.00 100.00 98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 2Q 2015 3Q 2015 n Islandwide n orchard n Marina n suburban source: Jll research, 3Q 2015 *Captures only retail spaces above 50,000 sq ft reNtAl VAlues In 2015, following a relatively firm 2014 rental market, rents corrected across all sub-markets on the back of the weaker economic outlook, lower consumer spending and the tight labour market. Despite strong occupier demand for space in major malls, rents in the suburban sub-market fell 2.7% from sGD 28.15 psf in 4Q 2014 to sGD 27.39 psf in 3Q 2015. rents were affected by slower take-up and the falling rents of smaller malls in non-prime locations (figures 7 and 8). rents in the orchard area gave a relatively better performance, declining 1.8% from sGD 38.00 psf in 4Q 2014 to sGD 37.30 psf in 3Q 2015, supported by the limited new supply and the sustained leasing interest in established malls in the prime orchard road shopping belt (figures 7 and 8). FiGure 7: Gross rents by sub-mArkets sGD per sq ft/mth 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 sGD37.30 sGD 27.39 sGD 20.95 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 2Q 2015 3Q 2015 n orchard n Marina n suburban source: Jll research, 3Q 2015 retAil pr Opert y mArKet reView By JONes lANG lAsAlle prOperty cONsultANts pte ltD 30 OctOBer 2015 FiGure 8: Gross rents in orcHArD, mArinA AnD suburbAn sub-mArkets source: Jll research, 3Q 2015 In spite of leasing interest from new-to-market retailers in new premium-quality space, rents in the Marina sub- market continued to soften, falling 2.5% from sGD 21.49 psf in 4Q 2014 to sGD 20.95 psf in 3Q 2015 (figures 7 and 8). OutlOOK retail rents are expected to remain soft for the rest of 2015 in the light of more cautious consumer spending amid a weaker economic outlook, and a more challenging operating environment faced by retailers exacerbated by the labour shortfall. However, despite these challenges, singapore remains attractive to international brands, given its status as a commercial gateway to asean and its large middle income population with high spending power. the healthy demand from these sources should moderate the downside risks for rents. rents in the suburban sub-market are expected to remain weak, declining about 2.2% for the rest of 2015. the completion of Waterway point in punggol in 4Q 2015, with 344,000 sq ft of new retail space, is expected to put pressure on rents. space consolidation by retailers that previously expanded aggressively and were now facing declining sales, should further contribute to downward pressure on rents and occupancy. notwithstanding these challenges, well-located malls near transport nodes and offering a rich trade mix and a one-stop shopping experience, such as Causeway point and north point, will continue to draw foot traffic and rental interest, and maintain healthy occupancy. However, smaller and older malls that are less accessible may have to compromise on rents in order to maintain occupancy. overall, rents in the suburban sub-market are expected to soften a further 1.9% in 2016. 5 1 0 2 t r o p e r l a u n n a 39 t s u r t I t n o p e r t n e C s r e s a r f mAll prOFiles 42 fCt portfolio summary 44 Causeway point 46 northpoint 48 Changi City point 50 Bedok point 52 Yewtee point 54 anchorpoint 56 Hektar reIt 5 1 0 2 t r o p e r l a u n n a 41 t s u r t I t n o p e r t n e C s r e s a r f Fct pOr tFOliO su mmAry As At 30 sep 2015 Fct portfolio summary as at 30 sep 2015 causeway point Northpoint changi city point Net lettable Area1 (square feet) Number of leases title year purchased purchase price ($ million) Appraised Value ($ million) As % of total portfolio Appraised Value Fy2015 Gross revenue ($’000) Fy2015 Net property income ($’000) Occupancy rate Key tenants by Gross rental income Annual shopper traffic (millions) connectivity 415,774 223 235,850 172 207,244 122 99 years leasehold commencing 30/10/95 99 years leasehold commencing 1/4/90 60 years leasehold commencing 30/4/09 (79 years remaining) (74 years remaining) (54 years remaining) 2006 606.17 1,110.00 45.0% 80,960 59,100 99.5% northpoint 1: 2006 northpoint 2: 2010 northpoint 1: 249.27 northpoint 2: 164.55 665.00 27.0% 50,335 36,156 98.2% 2014 305.00 311.00 12.6% 25,740 16,323 91.1% Metro, Courts, Cold storage supermarket, Cathay Cineplexes, food republic, uniqlo Cold storage supermarket, Harvey norman, Kopitiam food court and popular bookstore uniqlo, nike, timberland, Cold storage supermarket, Koufu and Bagus 24.9 41.3 10.6 Woodlands Mrt station & bus interchange Yishun Mrt station & bus interchange expo Mrt station 1 net lettable area as stated in valuation reports dated 30 september 2015 for the respective assets. 5 1 0 2 t r o p e r l a u n n a 42 t s u r t I t n o p e r t n e C s r e s a r f Fct pOrtFOliO su mmAry As At 30 sep 2015 Fct portfolio summary as at 30 sep 2015 Bedok point yewtee point Anchorpoint Net lettable Area1 (square feet) Number of leases title year purchased purchase price ($ million) Appraised Value ($ million) As % of total portfolio Appraised Value Fy2015 Gross revenue ($’000) Fy2015 Net property income ($’000) Occupancy rate Key tenants by Gross rental income Annual shopper traffic (millions) connectivity 82,713 47 73,670 70 99 years leasehold commencing 15/3/78 99 years leasehold commencing 3/1/06 (61 years remaining) (89 years remaining) 2011 127.00 108.00 4.4% 9,386 4,945 84.2% 2010 125.65 170.00 6.9% 14,049 9,720 94.8% 70,989 60 freehold 2006 36.02 100.00 4.1% 8,772 4,799 96.9% Harvey norman, Challenger, ssiksin Korea BBQ, Mind stretcher ntuC fairprice, Koufu food court, Watson’s, KfC Cold storage, Gyu-Kaku, Koufu, Xin Wang Hong Kong Cafe 4.7 12.1 3.6 Bedok Mrt station & bus interchange Yewtee Mrt station & bus stop near Queenstown Mrt station & bus stop 1 net lettable area as stated in valuation reports dated 30 september 2015 for the respective assets. 5 1 0 2 t r o p e r l a u n n a 43 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles cAus e wAy pOiNt property Description Description Address seven retail levels (including one basement level) and seven car park levels (B2, B3 and 2nd - 6th levels) 1 Woodlands square singapore 738099 Net lettable Area 415,774 square feet1 car park lots 839 title 99 years leasehold w.e.f 30 oct 1995 year Acquired by Fct 2006 market Valuation $1,110.0 million as at 30 sep 2015 Annual shopper traffic 24.9 million (oct 2014 – sep 2015) senior centre manager Ms elsie Goh Key tenants Metro, Courts, Cold storage supermarket, Cathay Cineplexes, food republic, uniqlo mAll proFile 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 will serve as an interchange station for the existing north-south line and the new thomson line in the future. With more than 200 stores 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 gross revenue of $80.96 million in fY2015, up 3.5 % from $78.2 million for the same period a year ago. the mall attracted 24.9 million shoppers in fY2015, up 11.2% from 22.4 million in fY2014. Causeway point is the winner of BCa universal Design Goldplus award in 2015 for its emphasis in incorporating user-friendliness, connectivity and safety aspects in its mall design and features. the mall is also awarded the platinum award in the BCa’s GreenMark program for its host of environmental-friendly features that reduces its energy consumption and carbon footprint. mAll perFormAnce HiGHliGHts Financial year ended 30 september ($’000) Gross revenue property expenses net property Income occupancy shopper traffic (million) Fy2015 80,960 21,860 59,100 99.5% 24.9 Fy2014 increase/(Decrease) 78,233 21,752 56,481 99.8% 22.4 3.5% 0.5% 4.6% (0.3%-point) 11.2% 1 as indicated in the valuation report for Causeway point, dated 30 september 2015, by DtZ Debenham tie leung (se asia) pte ltd. 5 1 0 2 t r o p e r l a u n n a 44 t s u r t I t n o p e r t n e C s r e s a r f cAusewAy pOiNt mAll pr OFiles top 10 tenAnts as at 30 september 2015, Causeway point has a total of 223 leases, excluding vacancy. the key tenants include Metro, Courts, Cold storage supermarket, food republic and Cathay Cineplexes, among others. the top 10 tenants contributed collectively, 33.1% (fY2014: 32.8%) of the mall’s total gross rental income. top 10 tenants at causeway point (as at 30 september 2015) % of mall’s Gross rental income Metro (private) limited1 Courts (singapore) limited Cold storage singapore (1983) pte ltd2 food republic pte ltd Cathay Cineplexes pte ltd uniqlo (singapore) pte ltd McDonald's restaurants pte ltd Bagus Management pte ltd aspial Corporation ltd3 re&s enterprises4 total 7.4% 6.1% 5.0% 3.9% 2.3% 2.2% 1.8% 1.5% 1.5% 1.4% 33.1% 1 2 3 Includes leases for Metro Department store & Clinique service Centre Includes leases for Cold storage supermarket, Guardian pharmacy and 7-eleven stores Includes leases for lee Hwa Jewellery, CItIGeMs and Goldheart Jewellery 4 operator of Kuriya Japanese Market and Ichiban Boshi restaurant trADe sector AnAlysis food & restaurants contributed 28.5%, (fY2014: 28.6%) of the mall’s gross rental income, followed by the fashion trade at 23.9% (fY2014: 25.4%). these two trades account for 52.4% of the mall’s gross rental income. the breakdown of the trade sector analysis by net lettable area and gross rental income is presented on the right. As at 30 september 2015 food & restaurants fashion Household Department store services/education Beauty, Hair, Cosmetics, personal Care Books, Music, art & Craft, Hobbies sports apparels & equipment supermarket Healthcare leisure/entertainment Vacant total 5 excludes gross turnover rent By Net lettable Area By Gross rental income5 23.1% 17.5% 11.7% 14.5% 4.9% 4.3% 4.5% 2.2% 5.7% 1.9% 9.2% 0.5% 28.5% 23.9% 10.2% 7.2% 7.2% 6.7% 3.6% 3.3% 3.2% 3.2% 3.0% 0.0% 100.0% 100.0% leAse expiry proFile As at 30 September 2015 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 tOtAl number of leases expiring 57 92 69 5 net lettable area of expiring leases (square feet) 105,021 163,164 103,122 42,572 expiries as % of Mall’s total leased area Gross rental Income (GrI) Contribution of expiring leases as % of Mall’s total GrI 25.4% 24.0% 39.4% 41.3% 24.9% 25.5% 10.3% 9.2% – – 0.0% 0.0% 223 413,879 100.0% 100.0% 5 1 0 2 t r o p e r l a u n n a 45 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles NOr tHpOiNt property Description 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 235,850 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 $665.0 million as at 30 sep 2015 Annual shopper traffic 41.3 million (oct 2014 – sep 2015) senior centre manager Ms Cynthia ng Key tenants Cold storage supermarket, Harvey norman, Kopitiam food court and popular bookstore mAll proFile northpoint, opened in 1992, is singapore’s pioneer suburban retail mall. the mall is located in the central of the populous Yishun estate. the mall offers six retail levels of shopping (including two basement levels). It is connected to the Yishun bus interchange and is also linked to the Yishun Mrt station via a direct underground pedestrian underpass. northpoint consistently attracts high shopper traffic flow from the surrounding residential estate and schools. shopper traffic in fY2014 was 41.3 million or an average of 3.4 million per month, one of the highest among suburban malls in singapore. Key tenants at northpoint include Cold storage supermarket, Harvey norman, Kopitiam food court and popular bookstore. the mall also features a community library and a 5,400 square feet rooftop wet and dry children’s playground on the rooftop. mAll perFormAnce HiGHliGHts Financial year ended 30 september ($’000) Gross revenue property expenses net property Income occupancy shopper traffic (million) Fy2015 50,335 14,179 36,156 98.2% 41.3 Fy2014 increase/(Decrease) 49,491 13,512 35,979 99.4% 40.3 1.7% 4.9% 0.5% (1.2%-point) 2.5% 1 as indicated in the valuation report for northpoint, dated 30 september 2015, by Jones lang lasalle property Consultants pte. ltd. 5 1 0 2 t r o p e r l a u n n a 46 t s u r t I t n o p e r t n e C s r e s a r f NOrtHpOiNt mAll pr OFiles top 10 tenAnts as at 30 september 2015, northpoint has a total of 172 leases, excluding vacancy. the key tenants include Kopitiam food court, Cold storage supermarket, aspial (CItIGeMs, Goldheart Jewellery and Maxi-Cash), Harvey norman, among others. the top 10 tenants contributed collectively, 32.1% (fY2014: 29.7%) of the mall’s total gross rental income. top 10 tenants at Northpoint (as at 30 september 2015) Copitiam pte ltd1 Cold storage singapore (1983) pte ltd2 aspial Corporation ltd3 pertama Merchandising pte ltd4 united overseas Bank ltd overseas-Chinese Banking Corporation ltd popular Book Company pte ltd Malayan Banking Berhad soo Kee Jewellery pte ltd McDonald's restaurants pte ltd total % of mall’s Gross rental income 8.8% 6.3% 2.5% 2.5% 2.4% 2.3% 2.0% 2.0% 1.7% 1.6% 32.1% trADe sector AnAlysis food & restaurants contributed 31.9%, (fY2014: 31.9%) of the mall’s gross rental income, followed by the fashion trade at 25.7% (fY2014: 27.4%). the breakdown of the trade sector analysis by net lettable area and gross rental income is presented on the right. 1 operator of the Kopitiam food court and Cantine at northpoint 2 3 Includes leases for Cold storage supermarket, Guardian pharmacy and 7-eleven stores Includes leases for CItIGeMs, Goldheart Jewellery and Maxi-Cash 4 operator of the Harvey norman store at northpoint As at 30 september 2015 food & restaurants fashion services/education Beauty, Hair, Cosmetics, personal Care Household Healthcare Books, Music, art & Craft, Hobbies supermarket sports apparels & equipment leisure/entertainment Vacant total 5 excludes gross turnover rent By Net lettable Area By Gross rental income5 27.4% 15.0% 17.7% 5.7% 6.5% 3.5% 6.6% 8.8% 2.5% 4.5% 1.8% 31.9% 25.7% 13.0% 7.3% 5.3% 5.2% 4.2% 3.3% 2.4% 1.7% 0.0% 100.0% 100.0% leAse expiry proFile As at 30 September 2015 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 tOtAl number of leases expiring 56 55 60 net lettable area of expiring leases (square feet) 75,468 59,005 93,899 expiries as % of Mall’s total leased area 32.6% 25.5% 40.6% 1 2,877 1.3% – – 172 231,249 0.0% 100.0% Gross rental Income (GrI) Contribution of expiring leases as % of Mall’s total GrI 34.1% 26.8% 36.7% 2.4% 0.0% 100.0% 5 1 0 2 t r o p e r l a u n n a 47 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles cHAN Gi cit y pOiNt property Description Description Address three retail levels (including one basement level) 5 Changi Business park Central 1, Changi City point, singapore 486038 Net lettable Area 207,244 square feet1 car park lots 6272 title 60 years leasehold w.e.f 30 apr 2009 year Acquired by Fct 2014 market Valuation $311.0 million as at 30 sep 2015 Annual shopper traffic 10.6 million (oct 2014 – sep 2015) senior centre manager Ms emily fong Key tenants uniqlo, nike, timberland, Cold storage supermarket, Koufu and Bagus mAll proFile Changi City point is a three-storey retail mall (with one basement) located in Changi Business park, next to the singapore expo Mrt station and near singapore’s largest convention and exhibition venue, the singapore expo. Changi City point is the third largest by net lettable area among frasers Centrepoint trust’s portfolio of six retail malls. the mall offers diverse shopping and dining experience especially for the working population in Changi Business park; residents in nearby precincts such as tampines, Bedok and simei; and the visitors to the singapore expo. Changi City point features fashion retailers including uniqlo, nike, timberland, adidas and many outlets stores. shoppers can also do their grocery shopping at the Cold storage supermarket. the restaurants at the mall include tung lok signatures and table Manners and the Koufu and Bagus food courts. families can also enjoy the landscaped rooftop garden that also features a wet and dry children’s playground. mAll perFormAnce HiGHliGHts Financial year ended 30 september ($’000) Gross revenue property expenses net property Income occupancy shopper traffic (million) Fy2015 25,740 9,417 16,323 91.1% 10.6 Fy20143 increase/(Decrease) 7,824 2,661 5,163 97.9% 2.74 229.0% 253.9% 216.2% (6.8%-point) not meaningful 1 2 3 4 as indicated in the valuation report for Changi City point, dated 30 september 2015, by Knight frank pte. ltd. the car park lots are shared between Changi City point, Capri By fraser and one@Changi City. Included the results of Changi City point from 16 June (date of acquisition) to 30 september 2014 for 3-month period between 1 July and 30 september 2014 5 1 0 2 t r o p e r l a u n n a 48 t s u r t I t n o p e r t n e C s r e s a r f cHANGi cit y pOiNt mAll pr OFiles top 10 tenAnts as at 30 september 2015, Changi City point has a total of 122 leases, excluding vacancy. the key tenants include Koufu food court, Cold storage supermarket, Bagus food court, uniqlo and nike, among others. the top 10 tenants contributed collectively, 35.0% (fY2014: 33.1%) of the mall’s total gross rental income. top 10 tenants at changi city point (as at 30 september 2015) Koufu pte ltd1 Cold storage singapore (1983) pte ltd2 Copitiam pte ltd3 uniqlo (singapore) pte ltd nIKe singapore pte ltd D & n singapore pte ltd4 tung lok Millennium pte ltd trilogies of Beers pte ltd Challenger technologies limited re & s enterprise pte ltd5 total % of mall’s Gross rental income 8.9% 7.4% 3.9% 3.2% 2.1% 2.1% 1.9% 1.9% 1.9% 1.7% 35.0% 1 operates the Koufu food court at Changi City point 2 Includes leases for Cold storage supermarket, Guardian pharmacy and 7-eleven stores 3 operates the Bagus food court and Dora KeiKi at Changi City point 4 operates the spaghetti Goemon & the asian Kitchen at Changi City point 5 operates the Ichiban sushi restaurant at Changi City point trADe sector AnAlysis food & restaurants contributed 47.5%, (fY2014: 44.1%) of the mall’s gross rental income, followed by the fashion trade at 20.8% (fY2014: 19.7%). the breakdown of the trade sector analysis by net lettable area and gross rental income is presented on the right. As at 30 september 2015 food & restaurants fashion sports apparels & equipment supermarket services/education Household Healthcare Beauty, Hair, Cosmetics, personal Care Department store Books, Music, art & Craft, Hobbies Vacant total 6 excludes gross turnover rent By Net lettable Area By Gross rental income6 38.8% 19.0% 9.0% 7.4% 5.3% 4.1% 3.4% 2.1% 1.1% 0.9% 8.9% 47.5% 20.8% 6.9% 6.0% 5.7% 3.9% 3.8% 3.7% 1.0% 0.7% 0.0% 100.0% 100.0% leAse expiry proFile As at 30 September 2015 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 tOtAl number of leases expiring 54 25 41 net lettable area of expiring leases (square feet) 86,993 50,320 41,766 expiries as % of Mall’s total leased area 46.1% 26.7% 22.1% 1 1,173 0.6% 1 122 8,461 180,252 4.5% 100.0% Gross rental Income (GrI) Contribution of expiring leases as % of Mall’s total GrI 44.8% 24.9% 26.3% 0.8% 3.2% 100.0% 5 1 0 2 t r o p e r l a u n n a 49 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles BeD OK pOiNt property Description Description Address five retail levels (including one basement level) and one basement car park 799 new upper Changi road singapore 467351 Net lettable Area 82,713 square feet1 car park lots 76 title 99 years leasehold w.e.f 15 Mar 1978 year Acquired by Fct 2011 market Valuation $108.0 million as at 30 sep 2015 Annual shopper traffic 4.7 million (oct 2014 – sep 2015) Assistant centre manager Ms Donna oh Key tenants Harvey norman, Challenger, ssiksin Korea BBQ, Mind stretcher mAll perFormAnce HiGHliGHts mAll proFile Bedok point has five retail levels (including one basement level) and one basement car park. the mall is located in the town centre of Bedok, which is one of the largest residential estates in singapore by population. the mall is well-served by the nearby Bedok Mrt station and the Bedok bus interchange. the mall offers an exciting array of restaurants, food outlets, enrichment centres, retail and service offerings that makes it an attractive destination for families, students and pMeBs (professionals, Managers, executives and Businessmen) around the precinct. the tenants at Bedok point include Harvey norman, Challenger, ssiksin Korea BBQ, Mind stretcher, the learning lab and paradise Inn, among others. total shopper traffic to the mall in fY2014 was 4.7 million. Bedok point was awarded the BCa green Mark gold award in 2014. Financial year ended 30 september ($’000) Fy2015 Fy2014 increase/(Decrease) Gross revenue property expenses net property Income occupancy shopper traffic (million) 9,386 4,441 4,945 84.2% 4.7 10,805 4,573 6,232 98.2% 5.3 (13.1%) (2.9%) (20.7%) (14.0%-point) (11.3%) 1 as indicated in the valuation report for Bedok point, dated 30 september 2015, by CBre pte ltd. 5 1 0 2 t r o p e r l a u n n a 50 t s u r t I t n o p e r t n e C s r e s a r f BeD OK pOiNt mAll pr OFiles top 10 tenAnts as at 30 september 2015, Bedok point has a total of 47 leases, excluding vacancy. the key tenants include pertama Merchandising pte ltd (operator of Harvey norman), Go sushi, Korea Buffet pte ltd (operator of ssiksin), among others. the top 10 tenants contributed collectively, 46.2% (fY2014: 48.7%) of the mall’s total gross rental income. top 10 tenants at Bedok point (as at 30 september 2015) pertama Merchandising pte ltd1 Go sushi pte ltd2 Korea Buffet pte ltd3 louisiana Qsr pte ltd4 Mind stretcher learning Centre ltd Creative eateries pte ltd5 starbucks Coffee singapore pte ltd Chen Kang foot spa pte ltd Cristofori Music pte ltd Meng Har le spa pte ltd total % of mall’s Gross rental income 10.9% 5.4% 5.3% 4.2% 3.9% 3.9% 3.7% 3.1% 3.0% 2.8% 46.2% 1 operator of the Harvey norman store at Bedok point 2 operator of sushi express at Bedok point 3 operator of ssiksin Korea BBQ at Bedok point 4 operator of popeyes at Bedok point 5 operator of sukiya at Bedok point trADe sector AnAlysis food & restaurants contributed 50.1%, (fY2014: 46.2%) of the mall’s gross rental income, followed by the Household trade at 13.7% (fY2014: 13.1%). the breakdown of the trade sector analysis by net lettable area and gross rental income is presented on the right. As at 30 september 2015 food & restaurants Household services/education Beauty, Hair, Cosmetics, personal Care fashion sports apparels & equipment Healthcare Books, Music, art & Craft, Hobbies Vacant total 6 excludes gross turnover rent By Net lettable Area By Gross rental income6 36.8% 18.5% 14.6% 7.5% 2.3% 2.7% 0.6% 1.2% 15.8% 100.0% 50.1% 13.7% 13.4% 13.0% 5.0% 2.5% 1.2% 1.1% 0.0% 100.0% leAse expiry proFile As at 30 September 2015 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 tOtAl number of leases expiring 12 26 9 net lettable area of expiring leases (square feet) 14,557 40,657 14,425 expiries as % of Mall’s total leased area 20.9% 58.4% 20.7% Gross rental Income (GrI) Contribution of expiring leases as % of Mall’s total GrI 23.1% 58.0% 18.9% – – – – – – – – 47 69,639 100.0% 100.0% 5 1 0 2 t r o p e r l a u n n a 51 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles ye w te e 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, Watson’s and KfC, among others. It draws shoppers from the private apartments located above the mall (Yewtee residence), the Yewtee housing estate, schools, military camp and the nearby industrial estate. total shopper traffic to the mall in fY2015 was 12.1 million. property Description 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 73,670 square feet1 car park lots 832 title 99 years leasehold w.e.f 3 Jan 2006 year Acquired by Fct 2010 market Valuation $170.0 million as at 30 sep 2015 Annual shopper traffic 12.1 million (oct 2014 – sep 2015) centre manager Ms Jazmine Lim Key tenants ntuC fairprice, Koufu food court, Watson’s, KfC mAll perFormAnce HiGHliGHts Financial year ended 30 september ($’000) Gross revenue property expenses net property Income occupancy shopper traffic (million) Fy2015 14,049 4,329 9,720 94.8% 12.1 Fy2014 increase/(Decrease) 13,738 4,174 9,564 96.6% 11.7 2.3% 3.7% 1.6% (1.8%-point) 3.4% 1 as indicated in the valuation report for Yewtee point, dated 30 september 2015, by Colliers International Consultancy & Valuation (singapore) pte. ltd. 2 part of limited common property for the exclusive benefit of Yewtee point. 5 1 0 2 t r o p e r l a u n n a 52 t s u r t I t n o p e r t n e C s r e s a r f yew tee pOiNt mAll pr OFiles top 10 tenAnts as at 30 september 2015, Yewtee point has a total of 70 leases, excluding vacancy. the key tenants include ntuC fairprice, Koufu food court, Watson’s and KfC, among others. the top 10 tenants contributed collectively, 51.6% (fY2014: 49.7%) of the mall’s total gross rental income. trADe sector AnAlysis food & restaurants contributed 38.6%, (fY2014: 37.7%) of the mall’s gross rental income, followed by the supermarket trade at 19.0% (fY2014: 17.9%). the breakdown of the trade sector analysis by net lettable area and gross rental income is presented on the right. top 10 tenants at yewtee point (as at 30 september 2015) ntuC fairprice Co-operative ltd1 Koufu pte ltd2 Watson’s personal Care stores pte ltd Kentucky fried Chicken Management pte ltd shakura pigmentation pte ltd West Co’z Cafe Pte Ltd oldtown singapore pte ltd XWs pte ltd3 Breadtalk pte ltd4 london Weight Management total % of mall’s Gross rental income 20.5% 10.3% 3.8% 3.7% 2.7% 2.3% 2.3% 2.1% 2.0% 1.9% 51.6% 1 Includes leases for ntuC fairprice and ntuC Healthcare (unity) 2 operates the Koufu food court at Yewtee point 3 operates Xin Wang HK Café at Yewtee point 4 operates toastBox at Yewtee point As at 30 september 2015 food & restaurants supermarket Beauty, Hair, Cosmetics, personal Care services/education Healthcare fashion Household Books, Music, art & Craft, Hobbies sports apparels & equipment Vacant total 5 excludes gross turnover rent By Net lettable Area By Gross rental income5 37.0% 23.4% 13.6% 7.3% 4.9% 3.7% 2.9% 1.5% 0.5% 5.2% 38.6% 19.0% 16.7% 7.8% 7.1% 5.0% 3.1% 2.0% 0.7% 0.0% 100.0% 100.0% leAse expiry proFile As at 30 September 2015 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 tOtAl number of leases expiring 23 21 26 net lettable area of expiring leases (square feet) 14,616 22,280 32,950 – – – – 70 69,846 expiries as % of Mall’s total leased area 20.9% 31.9% 47.2% 0.0% 0.0% 100.0% Gross rental Income (GrI) Contribution of expiring leases as % of Mall’s total GrI 23.3% 29.8% 46.9% 0.0% 0.0% 100.0% 5 1 0 2 t r o p e r l a u n n a 53 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles ANcHOrpOiNt property Description Description Address two retail levels (including one basement level) and an adjacent a two-storey restaurant building 368 and 370 alexandra road singapore 159952/159953 Net lettable Area 70,989 sq ft1 car park lots title 1282 freehold year Acquired by Fct 2006 market Valuation $100.0 million as at 30 sep 2015 Annual shopper traffic 3.6 million (oct 2014 – sep 2015) centre manager Mr raymond Chan Kin Key tenants Cold storage, Gyu-Kaku, Koufu, Xin Wang Hong Kong Cafe mAll perFormAnce HiGHliGHts mAll proFile anchorpoint has two retail levels (including one basement level) and an adjacent a 2-storey restaurant building. the mall is located along alexandra road, opposite to the popular large home furnishing store IKea and newly-opened park Hotel alexandra. anchorpoint is well- served by public bus services as well as scheduled shuttle bus service between the mall and the nearby offices in the alexandra area. anchorpoint offers an exciting range of eateries and restaurants, retail shopping and boutique outlets. the stores and restaurants at anchorpoint include Cold storage, Koufu (food court), Japanese BBQ restaurant Gyu-Kaku as well as reputable retailers such as Charles & Keith and Cotton on, among others. total shopper traffic to the mall in fY2015 was 3.6 million. anchorpoint was awarded the singapore service Class award (2012 – 2015) by spring singapore. Financial year ended 30 september ($’000) Fy2015 Fy2014 increase/(Decrease) Gross revenue property expenses net property Income occupancy shopper traffic (million) 8,772 3,973 4,799 96.9% 3.6 8,663 3,986 4,677 97.8% 3.8 1.3% (0.3%) 2.6% (0.9%-point) (5.3%) 1 as indicated in the valuation report for anchorpoint, dated 30 september 2015, by Colliers International Consultancy & Valuation (singapore) pte ltd. 2 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. 5 1 0 2 t r o p e r l a u n n a 54 t s u r t I t n o p e r t n e C s r e s a r f ANcHOrpOiNt mAll pr OFiles top 10 tenAnts as at 30 september 2015, anchorpoint has a total of 60 leases, excluding vacancy. the key tenants include Cold storage supermarket, Koufu (operator of food court), Gyu-Kaku Japanese BBQ restaurant, among others. the top 10 tenants contributed collectively, 49.5% (fY2014: 48.5%) of the mall’s total gross rental income. top 10 tenants at Anchorpoint (as at 30 september 2015) Cold storage (1983) singapore pte ltd1 Koufu pte ltd royal Culinary pte ltd2 XWs pte ltd3 Cotton on singapore pte ltd sarika Connoisseur Cafe pte ltd4 sakuraya foods pte ltd G2000 apparel (s) pte ltd Jp food service pte ltd5 Watson's personal Care stores pte ltd total % of mall’s Gross rental income 10.8% 6.7% 4.6% 4.4% 4.3% 4.1% 4.0% 3.6% 3.6% 3.4% 49.5% 1 Includes leases for Cold storage supermarket, Guardian pharmacy and 7-eleven stores 2 operator of Gyu-Kaku at anchorpoint 3 operator of Xin Wang Hong Kong Cafè at anchorpoint 4 operator of the Coffee Connoisseur at anchorpoint 5 operator of Jack’s place restaurant at anchorpoint As at 30 september 2015 food & restaurants fashion Beauty, Hair, Cosmetics, personal Care supermarket services/education Household Books, Music, art & Craft, Hobbies Healthcare Vacant total 6 excludes gross turnover rent By Net lettable Area By Gross rental income6 38.7% 16.4% 8.6% 15.2% 6.7% 6.9% 2.5% 1.9% 3.1% 40.0% 19.7% 10.3% 9.9% 7.0% 6.9% 3.7% 2.5% 0.0% 100.0% 100.0% trADe sector AnAlysis food & restaurants contributed 40.0%, (fY2014: 41.1%) of the mall’s gross rental income, followed by the fashion trade at 19.7% (fY2014: 20.5%). the breakdown of the trade sector analysis by net lettable area and gross rental income is presented on the right. leAse expiry proFile As at 30 September 2015 Fy2016 Fy2017 Fy2018 Fy2019 Fy2020 tOtAl number of leases expiring 25 24 net lettable area of expiring leases (square feet) 23,366 24,841 expiries as % of Mall’s total leased area 33.9% 36.1% 9 7,424 10.8% 2 13,186 19.2% – – 60 68,817 0.0% 100.0% Gross rental Income (GrI) Contribution of expiring leases as % of Mall’s total GrI 35.1% 41.4% 11.1% 12.4% 0.0% 100.0% 5 1 0 2 t r o p e r l a u n n a 55 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles HeKt Ar reAl est Ate iNVestmeNt trus t investment in HektAr reit as at 30 september 2015, 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 of 1.7 million square feet. HektAr property proFile As at 31 December 2014 state title subang parade selangor freehold mahkota parade Melaka leasehold (expiring in 2101) wetex parade Johor central square Kedah landmark central Kedah freehold freehold freehold net lettable area (retail) 504,681 sq ft 484,029 sq ft 158,334 sq ft 303,234 sq ft 281,388 sq ft tenancies occupancy 137 99.3% 101 94.5% 75 98.3% 56 80.5% 68 97.8% Visitor traffic fY2014 9.5 million 10.0 million 4.8 million 3.3 million 3.2 million purchase price (rM) 280.0 million 232.0 million 117.5 million 83.0 million 98.0 million Valuation (rM) 417.7 million 318.0 million 135.0 million 85.5 million 104.5 million 5 1 0 2 t r o p e r l a u n n a 56 t s u r t I t n o p e r t n e C s r e s a r f HeKt Ar reAl est Ate iNVestm eNt trust mAll pr OFiles HektAr reit’s top 10 tenAnts the top ten tenants in the Hektar’s portfolio contributed approximately 28.2% of total monthly rental income. % of total NlA % of monthly rental income1 tenant parkson the store seleria Giant McDonald's KfC trade sector Department store / supermarket Department store / supermarket food & Beverage Department store / supermarket food & Beverage food & Beverage reject shop fashion & footwear MpH Bookstores Gifts / Books / toys / specialty Kenny rogers roasters food & Beverage 1 2 3 4 5 6 7 8 9 10 Celebrity fitness leisure & entertainment / sports & fitness top 10 tenants (By Monthly rental Income) other tenants total 1 Based on monthly rental income for December 2014 NlA (sq ft) 254,009 273,198 35,773 96,283 14,676 17,431 29,663 22,075 7,096 34,317 784,521 947,145 14.7% 15.8% 2.1% 5.6% 0.8% 1.0% 1.7% 1.3% 0.4% 2.0% 45.3% 54.7% 1,731,666 100.0% 9.5% 6.0% 2.4% 1.8% 1.7% 1.6% 1.6% 1.3% 1.2% 1.2% 28.2% 71.8% 100.0% 5 1 0 2 t r o p e r l a u n n a 57 t s u r t I t n o p e r t n e C s r e s a r f mAll pr OFiles iN Ve stmeNt iN HeKt Ar r eit tenAncy mix As at 31 December 2014 the portfolio tenancy mix is dominated by department stores and supermarkets, which is led by parkson and the store, constitute approximately 38.2% of total portfolio nla. In terms of rental income, the largest segment remains fashion and footwear, which contributes approximately 24.6% of monthly rental income. By Net lettable Area By Gross rental income 24.6% 22.1% 17.3% 6.7% 9.6% 6.7% 7.7% 0.6% 4.7% 100.0% Fy2017 110 492,684 28% 29% As at 30 september 2015 fashion & footwear food & Beverage / food Court Department store / supermarket Gifts / Books / toys / specialty education / services leisure & entertainment, sports & fitness electronics & It Homewares & furnishing others total leAse expiry proFile As at 31 December 2014 13.3% 13.7% 38.2% 5.5% 5.5% 12.6% 7.0% 0.7% 3.5% 100.0% For year ending 31 December number of tenancies expiring nla of tenancies expiring (square feet) nla of tenancies expiring as % of total nla % of total Monthly rental Income* Fy2015 191 899,840 52% 47% Fy2016 129 235,486 14% 24% * Based on monthly rental income for December 2014. figures may not round to 100% due to miscellaneous items source: Hektar annual report 2014 5 1 0 2 t r o p e r l a u n n a 58 t s u r t I t n o p e r t n e C s r e s a r f sustAiNABilit y 60 sustainability report 5 1 0 2 t r o p e r l a u n n a 59 t s u r t I t n o p e r t n e C s r e s a r f tHe sustAinAbility steerinG committee AnD workinG committee our sustainability report is driven by our sustainability steering Committee (ssC), which is chaired by the Group Ceo of frasers Centrepoint limited (fCl), Mr lim ee seng. the committee members consist of members from our senior management including the Cfo, Company secretary, Chief Human resource officer and the Ceos of all the fCl business units, including Dr Chew, the Ceo of fCaM, the Manager of fCt. the role of the ssC is to guide on strategic matters and approve action plans to improve the group sustainability practices. the ssC meets quarterly to review performance of the key material issues. the operational aspect of the sustainability governance work is coordinated by the sustainability Working Committee (sWC) which reports to the ssC. the sWC comprises staff and executives from the respective business units and it focuses on sustainability implementation, data management and performance review. sustAiNABilit y repOrt sustAinAbility reportinG We are pleased to present our inaugural sustainability report. environmental, social and governance sustainability are important parts of our business and for our stakeholders. We believe it is important for our stakeholders to be informed of the efforts that we undertake in order to realise our vision for a sustainable future. this sustainability report will be published annually. We will report on the performance and strategy on the material issues to our stakeholders. scope oF tHis report this report covers the financial year from 1 october 2014 to 30 september 2015. the report is produced based on the guidelines laid out by the Global reporting Initiative (GrI), an international standard for sustainability reporting. the report meets the GrI’s G4 Core requirements and accounts for the Construction and real estate sector Disclosures. the scope of this report covers all properties owned by frasers Centrepoint trust (fCt). [G4-17]. We intend to seek external assurance on our sustainability report in the future. our ApproAcH to sustAinAbility our sustainability programme is aligned with fCt’s sponsor, frasers Centrepoint limited (fCl)’s strategic sustainability initiatives and it incorporates the interests of fCt’s stakeholders. led by the Ceo of frasers Centrepoint asset Management ltd (fCaM), the Manager of fCt, Dr Chew tuan Chiong, topics covering environmental, people, governance and economic performance were analysed to derive a list of the top ten most important material issues. Guidance was drawn from international standards including the GrI, aa1000, the Global real estate sustainability Benchmark (GresB) and the GrI G4 Construction and real estate sector Disclosures. [G4-18] our sustainability programme is supported by relevant policies and standard operating procedures (sops) established by fCaM and fCl. Compliance with these policies and sops is effected through regular staff training, periodic reviews by the senior management and the board as well as through internal audits. our strategic approach is to prevent pollution at source and mitigation of risks to the environment. this is achieved through the reduction of wastage of energy and water use as well as the reduction of the carbon footprint of our assets and in our operations, in sustainable ways. We will continue to explore ways to manage and enhance the way our business and properties interact with our environment and its stakeholders to foster a sustainable relationship going forward. contAct For FeeDbAck We welcome feedback and suggestions to continuously improve our sustainability practices and performance. feedback on this report can be directed to Mr Chen fung leng, Head of Investor relations & research, at email: fungleng.chen@fraserscentrepoint.com or telephone at (+65) 6277 2657. 5 1 0 2 t r o p e r l a u n n a 60 t s u r t I t n o p e r t n e C s r e s a r f sustAiNABilit y repOrt tHe key mAteriAl issues the ssC undertook a materiality assessment to define the key material issues for fCt. the assessment was based on the international standards for materiality, GrI and aa1000 as well as the application of sector-specific guidance from the Global real estate sustainability Benchmark (GresB) and the GrI G4 Construction & real estate sector Disclosures. the process was guided by an independent sustainability advisor. [G4-18] from the materiality assessment, we identified the following ten material issues relevant to fCt and to our stakeholders in the following categories: [G4-19] material issues economic performance 1. economic and financial contribution to the business and fCt stakeholders Governance 2. anti-corruption environment 4. environmental compliance 3. ethical marketing communications 5. energy use/climate change 6. Water use/conservation people 7. Health & safety 8. labour/Management relations 9. staff retention & development 10. local communities AccountAbility to our stAkeHolDers our stakeholders are important to fCt’s long-term success and sustainability. We seek to engage stakeholders’ concerns through multiple communication platforms. fCt stakeholders comprise the shoppers, tenants, investors and fCt unitholders, employees of the Manager and the property manager, the regulators, the industry associations and the general community. [G4-24; G4-25] Our key stakeholders examples of issues / interests Form of engagement shoppers • Comfortable shopping • Shopper surveys (at least twice environment and family-friendly amenities • Considerations for safety and easy accessibility • Good connectivity to public transport a year) • Focus group study (every 2 years) • Online and mobile platforms (website and phone apps) • Social media (Facebook) • Events and promotion for shoppers • Frasers Rewards tenants • High and consistent shopper • Partnership in promotional events traffic • Competitive rental rates • Collaboration in marketing and promotional events • Regular tenant feedback meetings 5 1 0 2 t r o p e r l a u n n a 61 t s u r t I t n o p e r t n e C s r e s a r f sustAiNABilit y repOrt Our key stakeholders examples of issues/interests Form of engagement regulators • Compliance with rules and • Regular meetings regulations • Government policies on REITs or real estate sector • Issues concerning both short and long-term interests of the retail industry in singapore • Letters and emails • Monetary Authority of Singapore • Singapore Exchange • Inland Revenue Authority of singapore industry Associations • REIT Association of Singapore (reItas) • Investor Relations Professionals association (singapore)(Irpas) • Orchard Road Business Association (orBa) • Singapore Retailers Association property manager • Key Performance indicators for • Monthly meetings the property manager • Email exchanges investors and Fct unitholders • Business and operations • Ad-hoc investor meetings, please refer to the chapter on Investor relations in pages 11-12 of this annual report performance • Business strategy and outlook • Sustainability concerns quarterly post-results luncheon and at least 2 overseas roadshows annually • Mall tours upon requests • Annual General Meetings • Website, annual reports, SGXNET announcements, presentations slides, quarterly financial results briefings and conference calls employees • Compensation and Benefits • Annual Performance appraisals please refer to the section on chapter on people in page 65 of this annual report • Career progression • Communal sports and activities • Continuous education and • Training programmes by Group upgrading Hr • Employee wellness • Regular department meetings (once every 2 weeks) community • Helping the needy group in the • Annual Charity Drives and Events please refer to the section on chapter on local Community in page 67 of this annual report community • Donations and sponsorships to • Foster strong community ties and charitable organisations promote family-values 5 1 0 2 t r o p e r l a u n n a 62 [G4-26; G4-27] t s u r t I t n o p e r t n e C s r e s a r f sustAiNABilit y repOrt sustAinAbility Across our supply cHAin as the Manager of fCt, we have the responsibility to influence our value chain on sustainability matters. We identify and consider, where practical, any sustainability opportunities or risks that may arise. for instance, we work closely with our property manager and service providers to consider the use of environmentally- friendly equipment and materials, where possible, during the upgrading of the mall and its equipment. In managing our retail mall properties, we engage our staff, contractors and service providers, tenants, shoppers and the community in various aspects of sustainability. We require our property manager to ensure that the service providers who carry out maintenance work and fitting-out works in our properties are in compliance with statutory requirements and the relevant codes of practice. economic perFormAnce economic and financial contribution to fCt’s business and its stakeholders is a key material issue in fCt’s sustainability report. this topic is covered in the operations and financial review (page 24 to 30) and the financial statements page 94 to 141 in this annual report. GovernAnce fCt maintains high standards of integrity, accountability and responsible governance and adheres to the Code of Corporate Governance 2012, property fund Guidelines and the listing Manual prescribed by the authorities. fCt also complies with the internal policies and internal audit processes established by fCl which cover business conduct, insider dealing, risk management and fraud. More details on Corporate Governance can be found in pages 74 to 89 in this annual report. ANti-cOrruptiON We take a zero-tolerance approach towards corruption. all employees of fCaM are expected to comply with the Code of Business Conduct that includes statements on the prohibition of bribery, acceptance or offer of lavish gifts or entertainment. It also provides guidelines on the acceptance of permissible non-cash social amenities, entertainment or courtesies which are appropriate and reasonable for legitimate business purposes under applicable laws and customs. Where applicable and appropriate, the Code of Business Conduct is also made available to our vendors, suppliers, contractors and business affiliates. there was no incident of corruption reported in fY2015. fCt has in place the Whistle-Blowing policy that serves to encourage, and provide a channel to, employees and any other persons who are not employees to report, in good faith and in confidence, concerns about possible improprieties in financial reporting and non-compliance with laws or other matters that may adversely affect unitholders’ interests and fCt’s reputation. the policy is available on fCt’s website at www.fct.sg. all reported cases are raised to the audit Committee which ensures that independent investigations and appropriate follow- up actions are carried out. there was no incident of whistle-blowing reported in fY2015. fCt adheres to fCl’s policy for Disclosure and approval of purchase of property projects of fCl which spells out the declaration and approval requirements for any interested persons, directors and employees of the fCl purchasing property projects developed by fCl. this is to ensure that the terms of sales are fair and reasonable and are not prejudicial to the interests of the fCl and its minority shareholders. there are established internal audit processes within the fCl organisation to improve the effectiveness of risk management, control and governance processes. the senior management of fCaM is briefed on the outcome and recommendations of the audits. the audit reports are made available to external auditors. etHicAl mArKetiNG cOmmuNicAtiONs fCt supports ethical marketing in the course of its business. our leasing and marketing staff adheres to the singapore Code of advertising practice and the applicable rules. there was no incident of non- compliance with regulations and voluntary codes concerning marketing communications in fY2015. We seek to ensure that all our employees are briefed on the company policies. Training courses are organized for employees for new policies or updates to existing ones. for example in 2015, all fCaM executives received training on the new Competition act Compliance Manual. environment this section covers energy use/climate change, environmental compliance and water use/conservation. fCt aligns its goals in environment sustainability with the goals laid out by fCl, which supports the national plan to reduce greenhouse emissions. at fCt malls, we strive to improve on our resource efficiency in order to reduce energy and water consumption, carbon emission and waste. We monitor the key performance indicators regularly and incorporate environmental sustainability considerations, where possible, during the maintenance and upgrading of our properties. We believe that environmentally-efficient properties are more attractive to tenants and investors and hence they compete better in the marketplace. eNVirONmeNtAl cOmpliANce We view protection of the environment seriously. We have not had any fines for non-compliance with environmental regulation at of our properties in fY2015. 5 1 0 2 t r o p e r l a u n n a 63 t s u r t I t n o p e r t n e C s r e s a r f sustAiNABilit y repOrt In singapore, our Green Mark-certified properties have energy efficiency measures built into their designs and they are subject to regular energy audits. the list below shows the properties in fCt portfolio which are Green Mark certified as at 30 september 2015. • Causeway Point • Changi City Point • Bedok Point : BCA Green Mark (Platinum)1 : BCA Green Mark (GoldPlus) : BCA Green Mark (Gold) 1 re-certification in progress as at 30 september 2015 eNerGy use/climAte cHANGe energy wastage in buildings can be minimised through energy-efficient building designs, saving considerable costs over the life-cycle of the building. fCt strives to incorporate green design features into its properties during asset enhancement planning and renovation for its properties. the air-conditioning of malls accounts for a substantial portion of our total energy consumption. We continuously work with air-conditioning and mechanical ventilation system (aCMV) specialists to improve the energy efficiency in our cooling systems. the Building and Construction authority of singapore (BCa) awarded Causeway point the highest Green Mark award (platinum) and named it one of the top 10 energy-efficient retail malls in singapore in 2015. for example, at Causeway point, we retrofitted the chiller plants for more efficient cooling during the asset enhancement works at the mall, resulting in a saving of about 3.4 million kWh a year. We also installed Co and Co2 sensors to maximise fresh air intake efficiency and this helped cut energy consumption by about 0.5 million kWh a year. overall, Causeway point reduced its energy consumption by over 20% through these and other similar efforts. other initiatives include varying the operating hours of the escalators and other energy-usage intensive equipment; implementation of motion-sensors for lighting; use of low wattage leD lightings; and the use of low-e window glass panes in the mall to reduce heat gain from the solar insolation. the total energy consumption for fCt’s properties in fY2015 was 32.9 million kWh and the building energy intensity was 207.7 kWh/m2, both lower than in fY2014. the total greenhouse gas emissions were 14.2 million tonnes of Co2 equivalent, 0.2 million tonnes lower compared with 14.4 million tonnes in fY2014. please refer to the table below: 5 1 0 2 t r o p e r l a u n n a Fct portfolio Building energy Consumption (million kWh) Building energy Intensity1 (kWh/m2) Building Green House Gas emissions (million tonnes of Co2e) Building Green House Gas intensity2 (tonnes of Co2e/m2) 64 notes: Fy2014 Fy2015 33.2 209.8 14.4 93.4 32.9 207.7 14.2 92.5 t s u r t I t n o p e r t n e C s r e s a r f 1 energy consumption and greenhouse gas emissions are reported based on landlord area and exclude tenants’ area. 2 Grid emission factors are from singapore energy statistics 2015 from energy Market authority. wAter use/cONserVAtiON We strive to reduce our total water consumption and overall water intensity across our malls. Many of our malls are fitted with water-saving features such as tap flow restrictors, low-flush water system and public utilities Board (puB) Water efficiency labelling scheme (Wels) approved fittings. three of our malls, namely Bedok point, anchorpoint and Yewtee point, have attained the puB’s Water efficiency Basic certification; the remaining malls being upgraded progressively from fY2016. alternative water sources, such as neWater and aHu condensate, are utilised for non-potable applications such as irrigation, washing, water features and cooling towers. at our largest mall Causeway point, we use neWater for over 90% of the mall’s water needs and we use recycled water for sanitary flushing, irrigation and for the cooling towers. We will continue to work with our property manager and the public utilities providers to improve the efficiency in of water use at our malls. our malls also participate in the puB’s “friends of Water” programme to encourage the aware and the care for water use among our staff, tenants and shoppers. sustAiNABilit y repOrt the total water consumption of all of fCt’s properties in fY2015 was 481.5 million m3, which is lower than the 508.0 million m3 in fY2014. the building water intensity was 3.04 m3/m2, lower than the 3.21 m3/m2 in fY2014. Fct portfolio Building water consumption (million m3) Building water intensity1 (m3/m2) note: 1 Water consumption is based on landlord area. people [G4-26; G4-27] Fy2014 Fy2015 508.0 3.21 481.5 3.04 HeAltH & sAFety fCaM adheres to the Workplace Health and safety policy implemented by the frasers Group, as well as all relevant safety rules and regulations to provide a safe environment at our properties for all our employees, tenants, shoppers and stakeholders. In fY2015, there were no incident of non-compliance with the health and safety regulations or voluntary codes. fCaM employees have not had any lost time injury during fY2015. as part of fCt’s transparent sustainability approach, we are additionally reporting about workplace incidents at our properties that include employees of our property manager, frasers Centrepoint property Management services pte ltd. In fY2015, there was one lost-time injury, which resulted in 7 lost days, a lost-time injury rate of 3.08 and a severity rate of 21.6 per million man hours. the property manager has stepped up on its safety measures and safety briefings. the data reported is in line with requirements of Ministry of Manpower, singapore. lost-time injury refers to injury that results in medical leave of more than 3 days. lABOur/mANAGemeNt relAtiONs We are committed to promoting the well-being of our employees. retention of talents and the nurturing of future leaders are fundamental to the sustainability of our business. fCaM also has a clear commitment to fair employment practices. as part of the fCl Group, we are part of the tripartite alliance for fair and progressive employment practices (tafep). each employee receives training and career development, as appropriate. We engage our employees as part of the daily business through staff meetings and appraisals. our employees also enjoy social events organised by the frasers Group which include family Day, annual Dinner & Dance as well as sport events such as futsal, bowling and badminton tournaments. stAFF reteNtiON & DeVelOpmeNt as of 30 september 2015, frasers Centrepoint asset Management ltd, the Manager of fCt, has 15 employees, all located in singapore. there were no new hires or turnovers in fY2015. workforce movement number of employees new Hires turnover Fy2014 Fy2015 15 0 0 15 0 0 5 1 0 2 t r o p e r l a u n n a 65 t s u r t I t n o p e r t n e C s r e s a r f sustAiNABilit y repOrt FcAm employee proFile As At 30 september 2015 > 50 years old 13.3% < 30 years old 13.3% Female 66.7% male 33.3% by AGe Group by GenDer 30-49 years old 73.4% Non-executive 13.3% executive 86.7% singapore 100.0% by Job type by country 5 1 0 2 t r o p e r l a u n n a 66 t s u r t I t n o p e r t n e C s r e s a r f fCaM adheres fCl Group’s commitment to fair and equal employment opportunity, as laid out in its Code of Business Conduct. as part of the fCl Group, we also adopt the guidance on fair employment practices, including diversity, through its membership in the singapore national employer federation (snef). In addition to basic salaries and Central provident fund (Cpf) contributions, fCaM also provides medical benefits, medical insurance and parental leave for its employees. as part of the fCl group, fCaM relies on fCl’s Human resource (Hr) department to ensure its employees’ remunerations remain market competitive. all our employees are subject to annual performance appraisals. directory for all fCl staff and staff may also request to attend training courses not covered by this learning directory. the average duration of training per fCaM employee in fY2015 was 23.25 hours. further breakdown of the training data is as follows: average training hours per employee by gender - Male: 28.85 hours per year - female: 20.45 hours per year average training hours per employee by job type: - executive: 25.56 hours per year - non-executive: 8.25 hours per year fCaM taps on fCl’s Hr department to provide guidance on training and skills development for its employees. the supervisors are to assess the training needs of their staff regularly and to ensure compliance with the requirements for Continuing education of Capital Markets services representatives. In this regard, fCl’s Hr department publishes periodic comprehensive learning fCaM taps on fCl’s staff wellness programmes to promote healthy lifestyle and bonding among its employees. the programme comprises activities such as social events (annual Dinner and Dance, family Day, Health screening, etc); fitness programs (Kick boxing, Yoga etc); and sports events (Bowling tournaments, Dragon Boating, Walk/Jog sessions, etc). sustAiNABilit y repOrt mOe sG50 eVeNt, At cHANGi city pOiNt (6-12 July 2015) the Ministry of education held one of its Moe sG50 event at Changi City point (6-12 July 2015) as part of the sG50 events to showcase 50 years of classroom activities. the activities include re-living what it was like in school in the 1960s and make new discoveries about school today through interactive displays, games and artefacts from the past. Changi City point was the venue sponsor. the event was graced by Minister for education Mr Heng swee Kiat3. locAl community our malls actively support community events for charitable and social causes. our mall and property management teams work regularly with the community, charitable organisations and government agencies to provide the venue and support for events relating to charitable causes, public services and social events. some of the events which we supported this year include the pioneer Generation roadshow at Causeway point and the Ministry of education sG50 event at Changi City point. piONeer GeNerAtiON rOADsHOw At cAusewAy pOiNt (15 - 21 JuNe 2015) the pioneer Generation roadshow is a series of events held by the Government to promote the awareness of the pioneer Generation package benefits, which range from additional healthcare subsidies to disability assistance for the pioneer Generation. Causeway point was the venue sponsor for the roadshow held between 15 and 21 July 2015. the event at Causeway point was graced by Minister for national Development Mr Khaw Boon Wan1 and senior parliamentary secretary for Manpower and Education Mr Hawazi Daipi2. Minister for education Mr Heng swee Kiat giving a speech to the visitors to the Moe sG50 event at Changi City point. Minister for national Development Mr Khaw Boon Wan together with the participants at the pioneer Generation roadshow. senior parliamentary secretary for Manpower and education Mr Hawazi Daipi looks on as one of the participants at the pioneer generation roadshow share her thoughts. 1 Mr Khaw Boon Wan is Coordinating Minister for Infrastructure & Minister for transport from 1 october 2015. 2 Mr Hawazi Daipi has stepped down from political appointment prior to the General Elections on 11 September 2015. 3 Mr Heng swee Kiat is Minister for finance from 1 october 2015. 5 1 0 2 t r o p e r l a u n n a 67 t s u r t I t n o p e r t n e C s r e s a r f Gri cONteNt iNDeX (G4 cOre) GeNerAl stANDArD DisclOsures stANDArD DisclOsure title strAteGy AND ANAlysis G4-1 statement from the most senior decision-maker of the organisation about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability OrganisationAl prOFile G4-3 name of the organisation G4-4 primary brands, products, and services G4-5 location of the organisation’s headquarters G4-6 number of countries where the organisation operates, and names of countries where either the organisation has significant operations or that are specifically relevant to the sustainability topics covered in the report G4-7 nature of ownership and legal form pAGe reFereNce letter to unitholders, p. 7 about frasers Centrepoint trust, p. 2 about frasers Centrepoint trust, p. 2 fCt portfolio summary, p. 42-43 Corporate information, inside back cover about frasers Centrepoint trust, p. 2 about frasers Centrepoint trust, p. 2 structure of frasers Centrepoint trust, p. 3 G4-8 Markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries) about frasers Centrepoint trust, p. 2 G4-9 scale of the organisation G4-10 a. total number of employees by employment contract and gender b. total number of permanent employees by employment type and gender c. total workforce by employees and supervised workers and by gender d. total workforce by region and gender e. report whether a substantial portion of the organisation’s work is performed by workers who are legally recognized as self- employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors f. any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries) about frasers Centrepoint trust, p. 2 staff retention & Development, p. 65 staff retention & Development, p. 65 no substantial work is performed by workers who are legally recognized as self-employed. there is no significant variation in employment numbers. G4-11 employees covered by collective bargaining agreements G4-12 the organisation’s supply chain there are no collective bargaining agreements in place. sustainability across our supply Chain, p. 63 5 1 0 2 t r o p e r l a u n n a 68 t s u r t I t n o p e r t n e C s r e s a r f GrI Disclosure fully met partially met not covered Gri cONteNt iNDeX (G4 cOre) G4-13 G4-14 G4-15 G4-16 significant changes during the reporting period regarding the organisation’s size, structure, ownership, or its supply chain not applicable - 1st sustainability report n/a Whether and how the precautionary approach or principle is addressed by the organisation our approach to sustainability, p. 60 externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or which it endorses Governance, p. 63 environment, 63-64 people, p. 65 Memberships of associations (such as industry associations) and national or international advocacy organisations accountability to our stakeholders, p. 61-62 iDeNtiFieD mAteriAl Aspects AND BOuNDAries G4-17 all entities included or not included in organisation’s financial statements G4-18 process for defining report Content G4-19 the material aspects identified in the process for defining report content G4-20 for each material aspect, aspect Boundary within the organisation G4-21 aspect Boundary outside the organisation fCt portfolio summary, p. 42-43 scope of this report, p. 60 our approach to sustainability, p. 60 the Key Material Issues, p. 61 the Key Material Issues, p. 61 all material issues are relevant internally. all material issues are relevant externally except for staff retention & Development. G4-22 G4-23 effect of any restatements of information provided in previous reports, and the reasons for such restatements not applicable - 1st sustainability report significant changes from previous reporting periods in the scope and aspect Boundaries not applicable - 1st sustainability report stAKeHOlDer eNGAGemeNt G4-24 stakeholder groups engaged by the organisation accountability to our stakeholders, p. 61-62 G4-25 G4-26 G4-27 Basis for identification and selection of stakeholders with whom to engage accountability to our stakeholders, p. 61-62 approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group accountability to our stakeholders, p. 61-62 Key topics and concerns raised through stakeholder engagement, and how the organisation has responded accountability to our stakeholders, p. 61-62 repOrt prOFile G4-28 reporting period for information provided scope of this report, p. 60 G4-29 Date of most recent previous report G4-30 reporting cycle G4-31 Contact point for questions regarding the report or its contents not applicable - 1st sustainability report sustainability reporting, p. 60 Contact for feedback, p. 60 scope of this report, p. 60 G4-32 G4-33 report on ‘In accordance’ option, GrI Content Index, reference to external assurance policy and current practice with regard to seeking external assurance for the report scope of this report, p. 60 n/a n/a n/a 5 1 0 2 t r o p e r l a u n n a 69 t s u r t I t n o p e r t n e C s r e s a r f GrI Disclosure fully met partially met not covered Gri cONteNt iNDeX (G4 cOre) GOVerNANce G4-34 Governance structure of the organisation G4-58 Internal and external mechanisms for reporting concerns about ethical and lawful behaviour, and matters related to organisational integrity, such as escalation through line management, whistleblowing mechanisms or hotlines speciFic stANDArD DisclOsures cAteGOry: ecONOmic Aspect: ecONOmic perFOrmANce G4-DMa Generic Disclosures on Management approach G4-eC1 Direct economic value generated and distributed G4-eC3 Coverage of the organisation's defined benefit plan obligations cAteGOry: eNVirONmeNtAl Aspect: eNerGy G4-DMa Generic Disclosures on Management approach G4-en3 energy consumption within the organisation G4-en5 energy intensity G4-en6 reduction of energy consumption G4-Cre1 Building energy intensity Aspect: wAter structure of frasers Centrepoint trust, p. 3 Board of Directors, p. 16-19 trust Management team, p. 20- 21 risk Management, p. 33 the sustainability steering Committee and Working Committee, p. 60 Governance, p. 63 Corporate Governance, p. 74-89 anti-corruption, p. 63 Corporate Governance, p. 74-89 operations and financial review, p. 24-30 operations and financial review, p. 24-30 staff retention & Development, p. 65 employees are covered by singapore’s mandatory social security savings plan, the Central provident fund (Cpf). energy use/Climate change, p. 64 energy use/Climate change, p. 64 energy use/Climate change, p. 64 energy use/Climate change, p. 64 energy use/Climate change, p. 64 G4-DMa Generic Disclosures on Management approach environment, p. 63 G4-en8 total water withdrawal by source G4-Cre2 Building water intensity Water use/Conservation, p. 64 Water use/Conservation, p. 64 Water use/Conservation, p. 64 GrI Disclosure fully met partially met not covered 5 1 0 2 t r o p e r l a u n n a 70 t s u r t I t n o p e r t n e C s r e s a r f Gri cONteNt iNDeX (G4 cOre) Aspect: emissiONs G4-DMa Generic Disclosures on Management approach G4-en16 energy indirect greenhouse gas (GHG) emissions (scope 2) G4-en18 Greenhouse gas (GHG) emissions intensity G4-en19 reduction of greenhouse gas (GHG) emissions G4-Cre3 Greenhouse gas (GHG) emissions intensity from buildings environment, p. 63 energy use/Climate change, p. 64 energy use/Climate change, p. 64 energy use/Climate change, p. 64 energy use/Climate change, p. 64 energy use/Climate change, p. 64 Aspect: cOmpliANce G4-DMa Generic Disclosures on Management approach environment, p. 63-64 G4-en29 non-monetary sanctions for non-compliance with environmental laws and regulations cAteGOry: sOciAl suB-cAteGOry: lABOr prActices AND DeceNt wOrK Aspect: emplOymeNt G4-DMa Generic Disclosures on Management approach G4-la1 G4-la2 total number and rates of new employee hires and employee turnover by age group, gender and region Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation environmental Compliance, p. 63 people, p. 65-66 people, p. 65-66 not applicable. temporary or part time employees are not a significant part of fCaM’s workforce. n/a Aspect: lABOr/mANAGemeNt relAtiONs G4-DMa Generic Disclosures on Management approach people, p. 65-66 G4-la4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements. this is currently not covered in group-wide collective agreements We ensure staff are given sufficient notice to adjust to any operational changes. the notice period varies. Aspect: OccupAtiONAl HeAltH AND sAFety G4-DMa Generic Disclosures on Management approach Health & safety, p. 65 G4-la5 G4-la6 Workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs there are no health and safety committees. type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender Health & safety, p. 65 G4-Cre6 percentage of the organisation operating in verified compliance with an internationally recognized health and safety management system Health & safety, p. 65 there is no data tracking about the percentage of employees working in verified compliance with an Internationally recognised Health & safety Management system. 5 1 0 2 t r o p e r l a u n n a 71 t s u r t I t n o p e r t n e C s r e s a r f GrI Disclosure fully met partially met not covered Gri cONteNt iNDeX (G4 cOre) Aspect: trAiNiNG AND eDucAtiON G4-DMa Generic Disclosures on Management approach G4-la9 training per year per employee by gender, and by employee category G4-la10 programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings staff retention & Development, p. 65 staff retention & Development, p. 65 staff retention & Development, p. 65 G4-la11 employees receiving regular performance and career development reviews, by gender and by employee category staff retention & Development, p. 65 suB-cAteGOry: sOciety Aspect: lOcAl cOmmuNities G4-DMa Generic Disclosures on Management approach G4-so1 operations with implemented local community engagement, impact assessments, and development programs G4-Cre7 persons voluntarily and involuntarily displaced and/or resettled by development, broken down by project local Community, p. 67 local Community, p. 67 fCt has only invested in completed properties. It has not been involved in the development phase of these properties. Aspect: ANti-cOrruptiON G4-DMa Generic Disclosures on Management approach Governance, p. 63 G4-so3 operations assessed for risks related to corruption and the significant risks identified G4-so5 Confirmed incidents of corruption and actions taken suB-cAteGOry: prODuct respONsiBility Aspect: custOmer HeAltH AND sAFety G4-DMa Generic Disclosures on Management approach G4-pr2 Incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle Aspect: mArKetiNG cOmmuNicAtiONs G4-DMa Generic Disclosures on Management approach G4-pr7 total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes Corporate Governance, p. 74-89 risk Management, p. 33 anti-corruption, p. 63 anti-corruption, p. 63 Health & safety, p. 65 Health & safety, p. 65 ethical Marketing Communications, p. 63 ethical Marketing Communications, p. 63 5 1 0 2 t r o p e r l a u n n a 72 t s u r t I t n o p e r t n e C s r e s a r f GrI Disclosure fully met partially met not covered corporate governan ce 74 Corporate Governance Report corporate governance repor t 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. 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. It also supervises the property manager in its day-to-day management of the malls of fCt, namely, anchorpoint, Causeway point, northpoint, Yewtee point, Bedok point and Changi City 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. listed on the Mainboard of the sGX-st, fCt adheres closely to the principles and guidelines of the Code of Corporate Governance 2012 (the “cg code”) and other applicable laws, rules and regulations, including the sGX-st listing Manual, the Code on Collective Investment schemes (the “code on cIS”) and the securities and futures act (the “SFa”). 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 CG Code. as fCt is a listed ReIt, not all principles of the CG Code may be applicable to fCt and the Manager. any deviations from the CG Code are explained. BOARD MATTERS principle 1: the Board’s conduct of affairs the composition of the Board of Directors of the Manager (the “Board”) as at 30 september 2015 is as follows: Mr philip eng Heng nee Dr Chew tuan Chiong 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 (Independent) non-executive (non-independent) non-executive (Independent) non-executive (non-independent) 5 1 0 2 t R o p e R l a u n n a 74 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t 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. 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 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. no new members were appointed to the Board during fY2015. 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 Mas’ response to feedback received on the consultation paper on enhancements to the regulatory regime governing ReIts and ReIt managers. In addition to talks conducted by relevant professionals, members of the Board are encouraged to attend relevant courses and seminars so as to keep themselves updated on developments and changes in fCt’s operating environment, and to be members of the singapore Institute of Directors (“SID”) and for them to receive journal updates and training from sID to stay abreast of relevant developments in financial, legal and regulatory requirements, and the business environment and outlook. 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 allow 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 CG Code. In addition to the meetings, the members of the Board have access to Management throughout the financial year, thereby allowing the Board continuous strategic oversight over the activities of fCt. 5 1 0 2 t R o p e R l a u n n a 75 t s u R t I t n o p e R t n e C s R e s a R f corporate governance repor t the number of Board and audit Committee meetings held during the year ended 30 september 2015 and the attendance of Directors at these meetings are disclosed below: Meetings held for financial year ended 30 September 2015 Mr philip eng Heng nee Dr Chew tuan Chiong 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 Board Meetings audit committee Meetings 4 4/4 4/4 4/4 4/4 4/4 4/4 4/4 4 4/4 na na 4/4 na 4/4 na for fY2015, the Board comprised seven members, of whom 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 CG 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 and 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. 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 CG Code. In its review for the financial year ended 30 september 2015, the Board determined the following with respect to the independence of directors: Mr philip eng Heng nee Dr Chew tuan Chiong 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 Independent non-independent Independent non-independent 5 1 0 2 t R o p e R l a u n n a 76 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t the Board had noted that each Independent Director: (i) had declared that there were no relationships or instances, as stated Guideline 2.3 of the CG Code, that would otherwise deem him not to be independent. (ii) had served on the Board for more than 9 years. the Board was of the view that the Independent Directors, despite their length of service, had continued to demonstrate their ability to exercise strong objective judgement and act in the best interests of the Manager and fCt. they remained independent in expressing their views and in participating in the deliberations and decision making of the Board and the audit Committee. Having considered the above factors and weighing the need to refresh board membership, the Board (with each Independent Director abstaining with respect to the assessment of his own independence) determined that each Independent Director was independent, notwithstanding that each of them has served on the Board for more than 9 years. 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. 5 1 0 2 t R o p e R l a u n n a 77 t s u R t I t n o p e R t n e C s R e s a R f corporate governance repor t 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 CG 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 16 to 19. In determining whether each Director is able to devote sufficient time to discharge his duties, the Board has taken cognizance of the CG 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 the 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 has implemented a process to assess the performance of the Board and its decision-making processes. Members of the Board are required to assess the Board’s performance, which includes areas such as the Board’s composition and processes, effectiveness in its management of fCt’s performance, and such other areas which the Board is of the view that improvements are required. the findings of the assessment are reviewed by the Board with a view to improving its overall effectiveness in carrying out its role. Based on such periodic reviews, the Board is of the view that it is operating effectively and each of its members is contributing to its overall effectiveness and commits to maintain such effectiveness. 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. 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. 5 1 0 2 t R o p e R l a u n n a 78 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t 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 2015, the Manager adopted the remuneration policies and practices of fCl, which has a Remuneration Committee (“FcL 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 fCl group, which includes the Manager, are reviewed by the fCl RC on an annual basis. In undertaking such reviews, the fCl RC takes into consideration the performance of the Manager as part of the fCl group, and that of individual employees. It also reviews and approves the framework for salary reviews, performance bonuses and incentives for senior managers of the Manager as part of the fCl group-wide review. 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 Manager’s compensation framework comprises fixed pay and short term and long-term incentives. executive remuneration is linked to, inter alia, individual performance based on an annual appraisal of each individual employee of the Manager. the remuneration of non-executive Directors takes into account their level and quality of contribution and their respective responsibilities, including attendance and time spent at Board meetings and Board Committee meetings. save for the Ceo, Directors are paid a basic fee and attendance fees for attending Board meetings. the Ceo does not receive Directors’ fees. non-executive Directors who perform services through Board Committees are paid additional basic and attendance fees for such services. no Director decides his own fees. Directors’ fees are reviewed periodically to benchmark such fees against the amounts paid by other major listed companies. the Directors’ fees for the financial year ended 30 september 2015 are shown in the table below. the Chief executive officer does not receive Directors’ fees. In determining the quantum of such fees, factors such as frequency of meetings, time spent and responsibilities of Directors are taken into account. Board Members Mr philip eng Heng nee (Chairman) (Member, audit Committee) Dr Chew tuan Chiong Mr Chia Khong shoong(1) Mr Bobby Chin Yoke Choong (Chairman, audit Committee) Mr lim ee seng(1) Mr soh Kim soon (Member, audit Committee) Mr Christopher tang Kok Kai(1) (1) Director’s fees are paid to fCl Management services pte ltd Directors’ Fees $113,000 – $46,000 $78,000 $46,000 $67,000 $46,000 5 1 0 2 t R o p e R l a u n n a 79 t s u R t I t n o p e R t n e C s R e s a R f corporate governance repor t ACCOUNTABILITY AND AUDIT principle 10: accountability 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. the Board, with the support of Management, is responsible for providing a balanced and understandable assessment of fCt’s performance, position and prospects. financial reports are provided to the Board on a quarterly basis and monthly accounts will be made available to the Directors on request. Quarterly and annual financial reports and other material information are disseminated to unitholders through announcements released via sGXnet, and where applicable, media releases and analysts’ briefings. such financial reports are reviewed by the Board before dissemination. principle 11: risk Management and Internal controls the Manager has established a sound system of risk management and internal controls comprising procedures and processes to safeguard fCt’s assets and unitholders’ interests. the audit Committee reviews and reports to the Board on the adequacy and effectiveness of such controls, including financial, compliance, operational and information technology controls, and risk management procedures and systems, taking into consideration the recommendations of both internal and external auditors. Internal controls the audit Committee, through the assistance of internal and external auditors, reviews and reports to the Board on the adequacy and effectiveness of the Manager’s system of controls, including financial, compliance, operational and information technology controls. In assessing the effectiveness of internal controls, the audit Committee ensures primarily that key objectives are met, material assets are properly safeguarded, fraud or errors in the accounting records are prevented or detected, accounting records are accurate and complete, and reliable financial information is prepared in compliance with applicable internal policies, laws and regulations. risk Management the Board, through the audit Committee, reviews the adequacy and effectiveness of the Manager’s risk management framework for the Manager and fCt to ensure that robust risk management and mitigating controls are in place. the Manager has adopted an enterprise-wide risk management (“erM”) framework to enhance its risk management capabilities. Key risks, control measures and management actions are continually identified, reviewed and monitored as part of the eRM process. financial and operational key risk indicators are in place to track key risk exposures. apart from the eRM process, key business risks are thoroughly assessed by Management and each significant transaction is comprehensively analysed so that Management understands the risks involved before it is embarked upon. an outline of the Manager’s eRM framework and progress report is set out on page 33. periodic updates are provided to the audit Committee on fCt’s and the Manager’s risk profile. these updates would involve an assessment of fCt’s and the Manager’s key risks by risk categories, its current status, the effectiveness of mitigating measures taken, and the action plans undertaken by Management to manage such risks. 5 1 0 2 t R o p e R l a u n n a 80 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t In addition to the eRM framework, a comfort matrix of key risks, by which relevant material financial, compliance and operational (including information technology) risks of fCt and the Manager have been documented to assist the Board to assess the adequacy and effectiveness of the existing internal controls. the comfort matrix is prepared with reference to the strategies, policies, processes, systems and reporting processes connected with the management of such key risks and presented to the Board and the audit Committee. 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 Board has received assurance from the Ceo and the financial Controller of the Manager that as at 30 september 2015: (a) (b) the financial records of fCt have been properly maintained and the financial statements for the year ended 30 september 2015 give a true and fair view of fCt’s operations and finances; the system of internal controls in place for fCt is adequate and effective as at 30 september 2015 to address financial, operational, compliance and information technology risks which the Manager considers relevant and material to fCt’s operations; and (c) the risk management system in place for fCt is adequate and effective as at 30 september 2015 to address risks which the Manager considers relevant and material to fCt’s operations. opinion of the Board on Internal controls and risk Management Framework Based on the internal controls established and maintained by the Manager, work performed by internal and external auditors, reviews performed by Management and the audit Committee and assurance from the Ceo and the financial Controller of the Manager, the Board, with the concurrence of the audit Committee, is of the opinion that the internal controls in place for fCt, were adequate and effective as at 30 september 2015 to address financial, operational, compliance and information technology risks, which the Manager considers relevant and material to fCt’s operations. Based on the risk management framework established and assurance from the Ceo and the financial Controller of the Manager, the Board is of the view that the risk management system in place for fCt was adequate and effective as at 30 september 2015 to address risks which the Manager considers relevant and material to fCt’s operations. 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. 5 1 0 2 t R o p e R l a u n n a 81 t s u R t I t n o p e R t n e C s R e s a R f corporate governance repor t principle 12: audit committee 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 for the Manager and FCT 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 and effectiveness 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 fY2015, audit fees of $95,000 was paid/payable to fCt’s external auditors. no non-audit services were provided by the external auditors during fY2015; 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. In performing its functions, the audit Committee meets with the internal and external auditors and reviews the internal and external audit plans and reports for fCt and the Manager, and the assistance given by Management 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. for fY2015, the audit Committee comprised three non-executive Directors, all of whom including the Chairman, are independent: name Mr Bobby Chin Yoke Choong Mr philip eng Heng nee Mr soh Kim soon role Chairman Member Member 5 1 0 2 t R o p e R l a u n n a 82 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t the separation of the roles of the Chairman of the Board and the Chairman of the audit Committee ensures greater independence of the audit Committee in the discharge of its duties. this is also with a view to increasing its effectiveness in assisting the Board in the discharge of its statutory and other responsibilities in the areas of internal controls, financial and accounting matters, compliance and risk management. Members of the audit Committee collectively possess the accounting and related financial management, expertise and experience required for the audit Committee to discharge its responsibilities and assist the Board in its oversight over Management in the design, implementation and monitoring of risk management and internal control systems. external auditors ernst and Young llp (“eY”) was re-appointed pursuant to the approval of the unitholders on 23 January 2015 as external auditors of fCt. the Manager confirms that fCt complies with Rules 712 and 715 of the listing Manual in relation to the re-appointment of eY as the external auditors of fCt. eY has attended the audit Committee meeting held every quarter for the financial year ended 30 september 2015, and where appropriate, has met with the audit Committee without the presence of Management to discuss their findings, if any. It is proposed that at the forthcoming fCt annual General Meeting, KpMG llp (“KpMg”) be appointed as the external auditors of fCt in place of eY and that the Manager be authorised to fix their remuneration. accordingly, eY will not be seeking re-appointment at the forthcoming annual General Meeting. the audit Committee has reviewed and deliberated on the proposed change of external auditors commencing from the financial year ending 30 september 2016 and is of the view that the proposed change is in line with the proposed change of external auditors to KpMG by fCl, fCt’s sponsor and indirect controlling unitholder. the appointment of the same external auditors by fCt would be more efficient from a reporting perspective. taking into consideration (i) the resources and experience of KpMG, (ii) the terms of KpMG’s engagement, (iii) the size and complexity of fCt and its subsidiaries and (iv) the number and the experience of KpMG’s supervisory and professional staff assigned to the audit of fCt, the audit Committee is of the view that KpMG will be able to meet the audit requirements and statutory obligations of fCt. the audit Committee has therefore recommended the appointment of KpMG as new auditors for the financial year ending 30 september 2016. WHISTLE-BLOWING POLICY a Whistle-Blowing policy is in place to provide an avenue through which employees and any other persons 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 With effect from 1 october 2014, i.e. at the beginning of the current financial year, the Manager’s internal audit function is supported by the Internal audit Department of fCl (“FcL Ia”). prior to that, the function was supported by the internal audit department of fraser and neave, limited (“F&n”), fCl’s parent company prior to its listing, as part of a transitional arrangement between fCl and f&n for shared corporate services. following the cessation of the transitional arrangement, on 1 october 2014, fCl Ia was formally established. 5 1 0 2 t R o p e R l a u n n a 83 t s u R t I t n o p e R t n e C s R e s a R f corporate governance repor t the fCl Ia is independent of the activities that it audits. the Head of Ia, who is a Certified f raud examiner and a fellow of the Institute of singapore Certified accountants (IsCa), Cpa australia and a CCa, reports directly to the Chairman of the audit Committee. the Head of Ia and the Ia staff are members of the Institute of Internal auditors, singapore and fCl Ia has adopted and complied with the s tandards for the professional practice of Internal auditing set by the Institute of Internal auditors, Inc. 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. all Ia staff received relevant technical training and attended seminars organised by the Institute of Internal auditors, singapore or other professional bodies. the Ia operates within the framework stated in the terms of Reference as contained in the Internal audit Charter approved by the aC. 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. the audit scope also included review of compliance with the policies, procedures and regulatory responsibilities of fCt and the Manager. During the year, 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, 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 appropriate follow-up measures to be undertaken by Management. the audit Committee is satisfied that for the financial year ended 30 september 2015, the internal audit function is adequately resourced and has appropriate standing within fCt and the Manager to perform its functions effectively. UNITHOLDER RIGHTS AND RESPONSIBILITIES principle 14: Unitholder rights 5 1 0 2 t R o p e R l a u n n a 84 t s u R t I t n o p e R t n e C s R e s a R f 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. 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 275 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. corporate governance r epor t principle 16: conduct of Unitholder Meetings a copy of the fCt annual Report is sent to all unitholders. In compliance with the Code on CIs, an annual General Meeting (“agM”) is held after the close of each financial year allowing the Manager to interact with investors. 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: 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 5 1 0 2 t R o p e R l a u n n a 85 t s u R t I t n o p e R t n e C s R e s a R f 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. corporate governance repor t 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; and 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. INTERESTED PERSON TRANSACTIONS the Manager has established internal control procedures to ensure that all interested person transactions (“Ipts”) 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 Ipts 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 Ipts 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 Ipts 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 an interested person, 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 an interested person. ROLE OF THE AUDIT COMMITTEE FOR INTERESTED PERSON TRANSACTIONS the audit Committee reviews Ipts 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. 5 1 0 2 t R o p e R l a u n n a 86 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t GUIDELINES FOR DISCLOSURE guideline General Questions (a) Has the Company complied with all the principles and guidelines of the Code? If not, please state the specific deviations and the alternative corporate governance practices adopted by the Company in lieu of the recommendations in the Code. (b) In what respect do these alternative corporate governance practices achieve the objectives of the principles and conform to the guidelines in the Code? How has the company complied please refer to the disclosures and references in this table for the specific deviations from the Code. has the Manager adopted alternative corporate governance practices which reflect the fact that the Manager itself is not a listed entity but that the entity which it manages, frasers Centrepoint trust (“Fct”), is listed and managed externally by the Manager. Board responsibility Guideline 1.5 What are the types of material transactions which require approval from the Board? please refer to page 75 of this annual Report. Members of the Board Guideline 2.6 (a) What is the Board’s policy with regard to diversity in identifying director nominees? (b) please state whether the current composition of the Board provides diversity on each of the following – skills, experience, gender and knowledge of the Company, and elaborate with numerical data where appropriate. please refer to pages 76 to 77 of this annual Report. please refer to pages 76 to 77 of this annual Report. (c) What steps has the Board taken to achieve the balance and diversity necessary to maximize its effectiveness? please refer to pages 76 to 77 of this annual Report. Guideline 4.6 please describe the board nomination process for the Company in the last financial year for (i) selecting and appointing new directors and (ii) re-electing incumbent directors no new directors were appointed or re-elected in the financial period. Directors of the Manager are not subject to periodic retirement by rotation. Guideline 1.6 (a) are new directors given formal training? If not, please explain why. Yes. please refer to page 75 of this annual Report. (b) What are the types of information and training provided to (i) new directors and (ii) existing directors to keep them up-to-date? please refer to page 75 of this annual Report. Guideline 4.4 (a) What is the maximum number of listed company board representations that the Company has prescribed for its directors? What are the reasons for this number? no maximum number has been prescribed. (b) If a maximum number has not been determined, what are the reasons? please refer to page 78 of this annual Report. (c) What are the specific considerations in deciding on the capacity of directors? please refer to page 78 of this annual Report. 5 1 0 2 t R o p e R l a u n n a 87 t s u R t I t n o p e R t n e C s R e s a R f corporate governance repor t Board evaluation Guideline 5.1 (a) What was the process upon which the Board reached the conclusion on its performance for the financial year? (b) Has the Board met its performance objectives? Independence of Directors Guideline 2.1 Does the Company comply with the guideline on the proportion of independent directors on the Board? If not, please state the reasons for the deviation and the remedial action taken by the Company please refer to page 78 of this annual Report. Yes. please refer to page 78 of this annual Report. Yes. please refer to page 76 of this annual Report. Guideline 2.3 (a) Is there any director who is deemed to be independent by the Board, notwithstanding the existence of a relationship as stated in the Code that would otherwise deem him not to be independent? If so, please identify the director and specify the nature of such relationship. none. (b) What are the Board’s reasons for considering him not applicable. independent? please provide a detailed explanation. Guideline 2.4 (a) Has any independent director served on the Board for more than nine years from the date of his first appointment? If so, please identify the director and set out the Board’s reasons for considering him independent. Disclosure on remuneration Guideline 9.2 Has the Company disclosed each director’s and the Ceo’s remuneration as well as a breakdown (in percentage or dollar terms) into base/fixed salary, variable or performance related income/bonuses, benefits-in-kind, stock options granted, share-based incentives and awards, and other long-term incentives? If not, what are the reasons for not disclosing so? Guideline 9.3 (a) Has the Company disclosed each key management personnel’s remuneration, in bands of s$250,000 or in more detail, as well as a breakdown (in percentage or dollar terms) into base/fixed salary, variable or performance-related income/bonuses, benefits-in- kind, stock options granted, share-based incentives and awards, and other long-term incentives? If not, what are the reasons for not disclosing so? Yes. Mr philip eng Heng nee, Mr Bobby Chin Yoke Choong and Mr soh Kim soon have served on the Board for more than nine years from the respective dates of their first appointment. please refer to pages 76 to 77 of this annual Report for the Board’s reasons for considering them independent. this is not applicable to fCt as all fees and remuneration payable to the Directors, the Ceo and employees of the Manager are paid by the Manager and not by fCt. nonetheless, the Manager has voluntarily disclosed the Directors’ fees paid to each Director (save for Dr Chew tuan Chiong who does not receive Directors’ fees). please refer to page 79 of this annual Report. not applicable. please see the response to Guideline 9.2 above. (b) please disclose the aggregate remuneration paid to the top key management personnel (who are not directors or the Ceo). not applicable. please see the response to Guideline 9.2 above. Guideline 9.4 Is there any employee who is an immediate family member of a director or the Ceo, and whose remuneration exceeds s$50,000 during the year? If so, please identify the employee and specify the relationship with the relevant director or the Ceo. no. 5 1 0 2 t R o p e R l a u n n a 88 t s u R t I t n o p e R t n e C s R e s a R f corporate governance r epor t Guideline 9.6 (a) please describe how the remuneration received by executive directors and key management personnel has been determined by the performance criteria. not applicable. please see the response to Guideline 9.2 above and page 79 of this annual Report. (b) What were the performance conditions used to determine their entitlement under the short-term and long-term incentive schemes? not applicable. please see the response to Guideline 9.2 above and page 79 of this annual Report. (c) Were all of these performance conditions met? If not, what were the reasons? not applicable. please see the response to Guideline 9.2 above. risk Management and Internal controls Guideline 6.1 What types of information does the Company provide to independent directors to enable them to understand its business, the business and financial environment as well as the risks faced by the Company? How frequently is the information provided? please refer to pages 80 to 81 of this annual Report. Guideline 13.1 Does the Company have an internal audit function? If not, please explain why Yes. please refer to pages 83 to 84 of this annual Report. Guideline 11.3 (a) financial, In relation to the major risks faced by the Company, including compliance, information technology and sustainability, please state the bases for the Board’s view on the adequacy and effectiveness of the Company’s internal controls and risk management systems. operational, (b) In respect of the past 12 months, has the Board received assurance from the Ceo and the Cfo as well as the internal auditor that: (i) the financial records have been properly maintained and the financial statements give true and fair view of the Company’s operations and finances; and (ii) the Company’s risk management and internal control systems are effective? If not, how does the Board assure itself of points (i) and (ii) above? please refer to page 81 of this annual Report. please refer to page 81 of this annual Report. Guideline 12.6 (a) please provide a breakdown of the fees paid in total to the external auditors for audit and non-audit services for the financial year. please refer to page 82 of this annual Report. (b) If the external auditors have supplied a substantial volume of non-audit services to the Company, please state the bases for the audit Committee’s view on the independence of the external auditors services were no non-audit supplied by the external auditors during the financial year. communication with Shareholders (a) Guideline 15.4 Does the Company regularly communicate with shareholders and attend to their questions? How often does the Company meet with institutional and retail investors? Yes. please refer to page 84 of this annual Report. (b) Is this done by a dedicated investor relations team (or equivalent)? If not, who performs this role? Yes. please refer to page 84 of this annual Report. Guideline 15.5 If the Company is not paying any dividends for the financial year, please explain why. not applicable. please refer to the “Distribution statements” on page 96 of this annual Report. 5 1 0 2 t R o p e R l a u n n a 89 t s u R t I t n o p e R t n e C s R e s a R f FInancIaLS 91 Report of the trustee 92 statement by the Manager 93 Independent auditor’s Report to the unitholders of frasers Centrepoint trust 94 Balance sheets 95 statements of total Return 96 Distribution statements 97 statements of Movements in unitholders’ funds and translation Reserve 98 portfolio statements 101 Cash flow statement 103 notes to the financial statements otHerS 142 statistics of unitholders 145 additional Information 146 notice of annual General Meeting proxy form report oF tHe tr UStee 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 by a first supplemental deed dated 4 october 2006, a first amending and restating deed dated 7 May 2009 and a second supplemental deed dated 22 January 2010) (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 94 to 141 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 esther Fong Senior Vice President, Trustee Services Singapore 12 november 2015 5 1 0 2 t R o p e R l a u n n a 91 t s u R t I t n o p e R t n e C s R e s a R f StateMent BY tHe Manag er In the opinion of the directors of frasers Centrepoint asset Management ltd., the accompanying financial statements set out on pages 94 to 141, comprising the Balance sheets and portfolio statements as at 30 september 2015, 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 2015, 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 2015 5 1 0 2 t R o p e R l a u n n a 92 t s u R t I t n o p e R t n e C s R e s a R f InDepenDent a UDItor ’S report to tHe UnItHoLDerS oF FraSerS c en tr epoInt t r (ConstItuteD In tHe RepuBlIC of sInGapoRe puRsuant to a tRust DeeD DateD 5 June 2006 (as aMenDeD anD RestateD)) USt 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 2015, 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 94 to 141. 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, 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 2015, 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 2015 5 1 0 2 t R o p e R l a u n n a 93 t s u R t I t n o p e R t n e C s R e s a R f BaL ance SHeetS as at 30 septeMBeR 2015 non-current assets Investment properties fixed assets Intangible assets Investment in subsidiary Investment in associate Investment in joint venture 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 group trust note 2015 $’000 2014 $’000 2015 $’000 2014 $’000 3 4 5 6 7 8 9 10 11 12 13 13 12 14 2,464,000 105 66 – 62,823 154 2,527,148 2,400,000 113 84 – 74,512 – 2,474,709 2,464,000 105 66 * 63,843 1 2,528,015 2,400,000 113 84 * 63,843 – 2,464,040 5,401 16,197 21,598 2,548,746 5,336 41,741 47,077 2,521,786 5,401 16,197 21,598 2,549,613 5,336 41,741 47,077 2,511,117 31,813 17,124 732 278,000 327,669 39,895 17,534 778 95,000 153,207 31,831 17,124 732 278,000 327,687 39,909 17,534 778 95,000 153,221 440,000 25,957 576 466,533 794,202 1,754,544 644,000 25,277 625 669,902 823,109 1,698,677 440,000 25,957 576 466,533 794,220 1,755,393 644,000 25,277 625 669,902 823,123 1,687,994 1,774,711 (20,167) 1,754,544 1,706,126 (7,449) 1,698,677 1,755,393 – 1,755,393 1,687,994 – 1,687,994 Units in issue (’000) 15 916,840 915,415 916,840 915,415 net asset value per Unit * Denotes amount less than $500 16 $ 1.91 $ 1.85 $ 1.91 $ 1.84 5 1 0 2 t R o p e R l a u n n a 94 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. StateMentS oF totaL retUr n foR tHe fInanCIal YeaR enDeD 30 septeMBeR 2015 group trust note 2015 $’000 2014 $’000 2015 $’000 2014 $’000 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 Distributions from associate Distributions from joint venture share of results of associate – operations – share of results of joint venture – operations surplus on revaluation of investment properties unrealised gain from fair valuation of derivatives total return before tax taxation total return for the year revaluation surplus earnings per Unit (cents) 17 18 19 20 3 21 22 189,242 (58,199) 131,043 168,754 (50,658) 118,096 189,242 (58,199) 131,043 168,754 (50,658) 118,096 180 (19,336) (14,097) (125) (397) (108) (310) (645) 96,205 – – 4,550 722 506 64,039 5,442 171,464 – 171,464 82 (18,487) (12,869) (128) (363) (107) (283) (802) 85,139 – – 5,028 1,520 – 69,497 3,879 165,063 – 165,063 180 (19,336) (14,097) (125) (397) (108) (310) (648) 96,202 4,243 352 – – – 64,039 5,442 170,278 – 170,278 82 (18,487) (12,869) (128) (363) (107) (283) (806) 85,135 4,576 – – – – 69,497 3,879 163,087 – 163,087 Basic Diluted 18.71 19.30 18.58 19.07 18.71 19.30 18.58 19.07 5 1 0 2 t R o p e R l a u n n a 95 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. DIStrIBUtIon StateMentS foR tHe fInanCIal YeaR enDeD 30 septeMBeR 2015 group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 Income available for distribution to unitholders at beginning of year net income net tax adjustments (note a) Distributions from associate Income from joint venture Income available for distribution to unitholders Distributions to unitholders: Distribution of 2.98 cents per unit for period from 1/7/2013 to 30/9/2013 Distribution of 2.50 cents per unit for period from 1/10/2013 to 31/12/2013 Distribution of 2.88 cents per unit for period from 1/1/2014 to 31/3/2014 Distribution of 2.396 cents per unit for period from 1/4/2014 to 9/6/2014 Distribution of 0.626 cents per unit for period from 10/6/2014 to 30/6/2014 Distribution of 2.785 cents per unit for period from 1/7/2014 to 30/9/2014 Distribution of 2.75 cents per unit for period from 1/10/2014 to 31/12/2014 Distribution of 2.963 cents per unit for period from 1/1/2015 to 31/3/2015 Distribution of 3.036 cents per unit for period from 1/4/2015 to 30/6/2015 25,612 96,205 5,612 4,243 352 106,412 132,024 – – – – – 25,505 25,194 27,156 24,651 85,139 5,727 4,576 – 95,442 120,093 24,576 20,626 23,772 19,776 5,731 25,609 96,202 5,615 4,243 352 106,412 132,021 24,648 85,135 5,731 4,576 – 95,442 120,090 – – – – – 24,576 20,626 23,772 19,776 5,731 – – – – – – 25,505 25,194 27,156 27,835 105,690 – 94,481 27,835 105,690 – 94,481 Income available for distribution to unitholders at end of year 26,334 25,612 26,331 25,609 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 2,819 397 889 480 4 1,023 5,612 2,574 363 753 1,538 7 492 5,727 2,819 397 889 480 4 1,026 5,615 2,574 363 753 1,538 7 496 5,731 the accompanying accounting policies and explanatory notes form an integral part of the financial statements. 5 1 0 2 t R o p e R l a u n n a 96 t s u R t I t n o p e R t n e C s R e s a R f Stat eMentS oF MoveMentS In UnItHoL DerS’ FUnDS anD tranSL atIon reServe foR tHe fInanCIal YeaR enDeD 30 septeMBeR 2015 group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 net assets at beginning of year 1,698,677 1,462,355 1,687,994 1,454,462 operations total return for the year Unitholders’ transactions Creation of units – proceeds from placement – – Issue expenses Distributions to unitholders issued as satisfaction of acquisition fee issued as satisfaction of asset management fees net (decrease)/increase in net assets resulting from unitholders’ transactions 171,464 165,063 170,278 163,087 – – 2,811 – (105,690) 161,480 3,050 2,474 (2,078) (94,481) – – 2,811 – (105,690) 161,480 3,050 2,474 (2,078) (94,481) (102,879) 70,445 (102,879) 70,445 Movement in translation reserve (note 14) (12,718) 814 – – net assets at end of year 1,754,544 1,698,677 1,755,393 1,687,994 5 1 0 2 t R o p e R l a u n n a 97 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. portFoLIo StateMentS as at 30 septeMBeR 2015 GROUP Description of property term of Lease Location existing Use occupancy rate as at 30 September 2015 % at valuation 2015 $’000 2014 $’000 percentage of total assets 2014 2015 % % Investment properties in Singapore Causeway point 99-year leasehold from 30 october 1995 1 Woodlands square northpoint 930 Yishun avenue 2 99-year leasehold from 1 april 1990 anchorpoint freehold Yewtee point 99-year leasehold from 3 January 2006 368 & 370 alexandra Road 21 Choa Chu Kang north 6 Bedok point 99-year leasehold from 15 March 1978 799 new upper Changi Road Commercial 99.5 1,110,000 1,058,000 43.6 41.9 Commercial 98.2 665,000 655,000 26.1 26.0 Commercial 96.9 100,000 93,000 3.9 3.7 Commercial 94.8 170,000 168,000 6.7 6.7 Commercial 84.2 108,000 120,000 4.2 4.8 Changi City point 60-year leasehold from 30 april 2009 Commercial 5 Changi Business park Central 1 Investment properties, at valuation Investment in associate (note 7) other assets total assets attributable to unitholders 5 1 0 2 t R o p e R l a u n n a 98 t s u R t I t n o p e R t n e C s R e s a R f 91.1 311,000 306,000 12.2 12.1 95.2 2,464,000 2,400,000 2.9 74,512 98.1 2,474,512 1.9 47,274 2,548,746 2,521,786 100.0 100.0 62,823 2,526,823 21,923 96.7 2.5 99.2 0.8 the accompanying accounting policies and explanatory notes form an integral part of the financial statements. portFoLIo StateMentS as at 30 septeMBeR 2015 TRUST Description of property term of Lease Location existing Use occupancy rate as at 30 September 2015 % at valuation 2015 $’000 2014 $’000 percentage of total assets 2014 2015 % % Investment properties in Singapore Causeway point 99-year leasehold from 30 october 1995 1 Woodlands square northpoint 930 Yishun avenue 2 99-year leasehold from 1 april 1990 anchorpoint freehold Yewtee point 99-year leasehold from 3 January 2006 368 & 370 alexandra Road 21 Choa Chu Kang north 6 Bedok point 99-year leasehold from 15 March 1978 799 new upper Changi Road Commercial 99.5 1,110,000 1,058,000 43.5 42.1 Commercial 98.2 665,000 655,000 26.1 26.1 Commercial 96.9 100,000 93,000 3.9 3.7 Commercial 94.8 170,000 168,000 6.7 6.7 Commercial 84.2 108,000 120,000 4.2 4.8 Changi City point 60-year leasehold from 30 april 2009 Commercial 5 Changi Business park Central 1 Investment properties, at valuation Investment in associate (note 7) other assets total assets attributable to unitholders 91.1 311,000 306,000 12.2 12.2 63,843 2,464,000 2,400,000 63,843 2,527,843 2,463,843 47,274 95.6 2.5 98.1 1.9 2,511,117 100.0 100.0 21,770 2,549,613 96.6 2.5 99.1 0.9 5 1 0 2 t R o p e R l a u n n a 99 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. portFoLIo StateMentS as at 30 septeMBeR 2015 on 30 september 2015, independent valuations of the investment properties were undertaken by Knight frank pte ltd (“Knight frank”), Jones lang lasalle property Consultants pte ltd (“Jll”), Colliers International Consultancy & Valuation (singapore) pte ltd (“Colliers”), CBRe pte. ltd. (“CBRe”) and DtZ Debenham tie leung (se asia) pte ltd (“DtZ”). 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 valuer valuation Method Causeway point DtZ (2014: Knight frank) Capitalisation approach and discounted cash flow analysis (2014: Capitalisation approach and discounted cash flow analysis) valuation 2015 $’000 2014 $’000 1,110,000 1,058,000 northpoint Jll (2014: Jll) Capitalisation approach and discounted cash flow analysis (2014: Capitalisation approach and discounted cash flow analysis) 665,000 655,000 anchorpoint Colliers (2014: Colliers) Yewtee point Colliers (2014: Colliers) Capitalisation approach, discounted cash flow analysis and direct comparison method (2014: Capitalisation approach, discounted cash flow analysis and direct comparison method) Capitalisation approach, discounted cash flow analysis and direct comparison method (2014: Capitalisation approach, discounted cash flow analysis and direct comparison method) 100,000 93,000 170,000 168,000 Bedok point CBRe (2014: Jll) Capitalisation approach and discounted cash flow analysis (2014: Capitalisation approach and discounted cash flow analysis) 108,000 120,000 Changi City point Knight frank (2014: Knight frank) Capitalisation approach and discounted cash flow analysis (2014: Capitalisation approach and discounted cash flow analysis) 311,000 306,000 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 $9,288,000 (2014: $8,290,000). 5 1 0 2 t R o p e R l a u n n a 100 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. caSH FL oW StateMent foR tHe fInanCIal YeaR enDeD 30 septeMBeR 2015 operating activities total return before tax adjustments for: allowance for doubtful receivables Write back of allowance for doubtful receivables Borrowing costs Interest income asset management fees paid/payable in units Depreciation of fixed assets amortisation of intangible assets share of associate’s results (including revaluation surplus) share of joint venture’s results 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 Distributions received from joint venture Interest received Capital expenditure on investment properties Investment in joint venture acquisition of fixed assets acquisition of intangible assets net cash outflow on purchase of investment properties (including acquisition fees and expenses) (note B) cash flows used in investing activities group 2015 $’000 2014 $’000 171,464 165,063 8 (7) 19,336 (180) 2,819 46 18 (5,272) (506) (64,039) (5,442) 480 (975) 117,750 41 (57) 18,487 (82) 2,574 41 6 (6,548) – (69,497) (3,879) 1,538 (1,026) 106,661 (827) 3,081 120,004 (1,598) (4,793) 100,270 4,243 352 180 (5,356) (1) (38) – 4,576 – 82 (1,473) – (33) (90) – (620) (298,682) (295,620) 5 1 0 2 t R o p e R l a u n n a 101 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. caSH FL oW StateMent (c ont’D) foR tHe fInanCIal YeaR enDeD 30 septeMBeR 2015 Financing activities proceeds from borrowings proceeds from issue of new units Repayment of borrowings Borrowing costs paid Distributions to unitholders payment of issue and finance costs cash flows (used in)/generated from financing activities net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year cash and cash equivalents at end of year (note 10) group 2015 $’000 2014 $’000 98,000 – (119,000) (18,110) (105,690) (128) (144,928) (25,544) 41,741 16,197 220,000 161,480 (70,000) (16,517) (94,481) (3,097) 197,385 2,035 39,706 41,741 note B net cash outflow on purchase of investment properties (including acquisition fees and expenses) net cash outflow on purchase of investment properties (including acquisition fees and expenses) is set out below: Investment properties security deposits net identifiable assets acquired acquisition fees and expenses less: units issued for acquisition fee paid to the Manager net cash outflow Significant non-cash transactions group 2015 $’000 2014 $’000 – – – – – – 305,000 (6,703) 298,297 3,435 (3,050) 298,682 During the financial years, there were the following significant non-cash transactions: (i) (ii) 1,432,104 (2014: 1,412,672) units were issued and issuable in satisfaction of asset management fees payable in units, amounting to a value of $2,819,438 (2014: $2,573,856) in respect of the financial year ended 30 september 2015; and 1,662,125 units were issued in June 2014 in satisfaction of acquisition fees of $3,050,000 in connection with the acquisition of Changi City point completed on 16 June 2014. 5 1 0 2 t R o p e R l a u n n a 102 t s u R t I t n o p e R t n e C s R e s a R f the accompanying accounting policies and explanatory notes form an integral part of the financial statements. noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 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 #13-02 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 6. the financial statements were authorised for issue by the Manager and the trustee on 12 november 2015. 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) (ii) 2.0% per annum of the gross revenue of the properties; 2.0% per annum of the net property income of the properties (calculated before accounting for the property management fees); and 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. (iii) 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 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. (ii) 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 2015, the Manager has opted to receive an average of 20% (2014: 20%) 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. 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. 5 1 0 2 t R o p e R l a u n n a 103 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 1. GENERAL (CONT’D) (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. 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 7 – accounting for investment in associate (iii) note 11 – Valuation of interest rate swaps 5 1 0 2 t R o p e R l a u n n a 104 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (b) Adoption of new and revised standards the Group and the trust have applied the same accounting policies and methods of computation in the preparation of the financial statements for the current financial year and are consistent with those used in the previous financial year, except as disclosed below. In the current year, the Group has adopted the following standards that are relevant and effective for financial years beginning on or after 1 october 2014. Revised fRs 27 Revised fRs 28 amendments to fRs 36 fRs 110 fRs 111 fRs 112 amendments to fRs 32 amendments to fRs 110, fRs 111 and fRs 112 amendments to fRs 110, fRs 112 and fRs 27 Improvements to fRss (January 2014) – amendment to fRs 103 – amendment to fRs 108 – amendment to fRs 16 – amendment to fRs 24 – amendment to fRs 38 Improvements to fRss (february 2014) – amendment to fRs 103 – amendment to fRs 113 – amendment to fRs 40 Separate Financial Statements Investments in Associates and Joint Ventures Recoverable Amount Disclosures for Non-Financial Assets Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Offsetting Financial Assets and Financial Liabilities Transition Guidance Investment Entities Business Combinations Operating Segments Property, Plant and Equipment Related Party Disclosures Intangible Assets Business Combinations Fair Value Measurement Investment Property the adoption of the above standards did not result in any substantial change to the Group’s accounting policies nor any significant impact on the financial statements, except for the fRs 112 Disclosure of Interests in other entities which sets out the disclosures required to be made in respect of all forms of an entity’s interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. the adoption of this standard would result in more extensive disclosures being made in the Group’s financial statements in respect of its interests in other entities. 5 1 0 2 t R o p e R l a u n n a as a result of fRs 112, the Group has expanded its disclosures about its interests in associates (note 7) and joint ventures (note 8) from 1 october 2014. 105 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (c) FRS and INTERPRETATIONS OF FRS (“INT FRS”) not yet effective there are a number of standards, interpretations, and amendments of standards that have been issued but not effective as yet and the Group has not early adopted any of these standards. fRs 114 Regulatory Deferral accounts amendments to fRs 27 equity Method in separate financial statements amendments to fRs 16 and fRs 38 Clarification of acceptable Methods of Depreciation and amortisation amendments to fRs 111 accounting for acquisition of Interests in Joint operations amendments to fRs 110 and fRs 28 sale for Contribution of assets between an Investor and its associate or Joint Venture Improvements to fRss (november 2014) amendments to fRs 105 non-current assets Held for sale and Discontinued operations amendments to fRs 107 financial Instruments: Disclosures amendments to fRs 19 employee Benefits amendments to fRs 34 Interim financial Reporting amendments to fRs 1 Disclosure Initiative amendments to fRs 110, fRs 112 and fRs 28 Investment entity: applying the Consolidation exception fRs 115 Revenue from Contracts with Customers fRs 109 financial Instruments effective date (annual period beginning on or after) 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2016 1 January 2018 1 January 2018 With the exception of fRs 115 and fRs 109, the directors expect that the adoption of the other standards above will have no material impact on the financial statements in the period of initial application. the nature of the impending changes in accounting policy on adoption of fRs 115 and fRs 109 are described below. fRs 115 Revenue from Contracts with Customers fRs 115 establishes a five-step model that will apply to revenue arising from contracts with customers. under fRs 115, revenue is recognised at an amount that reflects the consideration which an entity expects to be entitled in exchange for transferring goods or services to a customer. the principles in fRs 115 provide a more structured approach to measuring and recognising revenue when the promised goods and services are transferred to the customer (i.e., when performance obligations are satisfied). Key issues for the Group include identifying performance obligations, accounting for contract modifications, applying the constraint to variable consideration, evaluating significant financing components, measuring progress toward satisfaction of a performance obligation, recognising contract cost assets and addressing disclosure requirements. either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 with early adoption permitted. the Group is currently assessing the impact of fRs 115 and plans to adopt the new standard on the required effective date. fRs 109 Financial Instruments fRs 109 is effective for financial periods beginning on or after 1 January 2018. fRs 109 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in fRs 39. the approach in fRs 109 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets, and enables companies to reflect their risk management activities better in their financial statements, and, in turn, help investors to understand the effect of those activities on future cash flows. fRs 109 is principle-based, and will more closely align hedge accounting with risk management activities undertaken by companies when hedging their financial and non- financial risk exposures. the impairment requirements in fRs 109 are based on an expected credit loss model and replace the fRs 39 incurred loss model. 5 1 0 2 t R o p e R l a u n n a 106 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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 statements 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 sheets and recognised in the statements 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 statements of total Return. When associates that are foreign operations are partially disposed, the proportionate share of the accumulated exchange differences is reclassified to the statements 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 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. any increase or decrease on revaluation is credited or charged to the statements 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 statements 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. 5 1 0 2 t R o p e R l a u n n a 107 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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 statements 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 statements 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. 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 statements of total Return on the acquisition date. (g) Investment in associate and joint venture an associate is an entity over which the Group has the power to participate in the financial and operating policy decisions of the investee but does not have control or joint control of those policies. the Group account for its investments in associates and joint ventures using the equity method from the date on which it becomes an associate or joint venture. 5 1 0 2 t R o p e R l a u n n a 108 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (g) Investment in associate and joint venture (cont’d) on acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair value of the investee’s identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of the investment. any excess of the Group’s share of the net fair value of the investee’s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entity’s share of the associate or joint venture’s profit or loss in the period in which the investment is acquired. under the equity method, the investment in associates or joint ventures are carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associates or joint ventures. the profit or loss reflects the share of results of the operations of the associates or joint ventures. Distributions received from joint ventures or associates reduce the carrying amount of the investment. Where there has been a change recognised in other comprehensive income by the associates or joint venture, the Group recognises its share of such changes in other comprehensive income. unrealised gains and losses resulting from transactions between the Group and associate or joint venture are eliminated to the extent of the interest in the associates or joint ventures. When the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint venture, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate or joint venture. after application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in associate or joint ventures. the Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associate or joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognises the amount in the statements of total Return. the financial statements of the associates and joint ventures are prepared as the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. In the trust’s separate financial statements, interests in joint ventures and associates are carried at cost less impairment losses. a list of the associates and joint ventures is shown in note 7 and 8 respectively. (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 statements 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 statements of total Return. 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. 5 1 0 2 t R o p e R l a u n n a 109 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 2. (i) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Intangible assets software is initially recognised at cost and subsequently carried at cost less accumulated amortisation. software is amortised over the estimated useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodies in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. the amortisation expense on intangible assets with finite useful lives is recognised in the statements of total Return in the expense category consistent with the function of the intangible asset. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statements of total Return when the asset is derecognised. (j) 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 statements 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 statements 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. 5 1 0 2 t R o p e R l a u n n a 110 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (k) 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 statements 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 statements of total Return. financial assets are recognised on the Balance sheets 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 statements 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. (l) Cash and cash equivalents Cash and cash equivalents comprise cash balances and bank deposits. (m) 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 statements of total Return. 5 1 0 2 t R o p e R l a u n n a 111 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (m) Impairment of financial assets (cont’d) 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 statements of total Return to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. (n) Financial liabilities financial liabilities are recognised on the Balance sheets 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. 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 statements 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 statements 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. (o) 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. (p) 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(n). Deferred income relates to the difference between consideration received for security deposits and its fair value at initial recognition, and is credited to the statements of total Return as gross rental income on a straight line basis over individual lease term. 5 1 0 2 t R o p e R l a u n n a 112 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (q) 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(r)(i). (r) 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: (i) Rental income Rental income receivable under operating leases is recognised in the statements 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 statements of total Return using the effective interest method. (s) 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). (t) 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. 5 1 0 2 t R o p e R l a u n n a 113 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 2. (t) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Taxation (cont’d) (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. (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: – – 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 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) (iii) (iv) (v) 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); 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; 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 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. 5 1 0 2 t R o p e R l a u n n a 114 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 2. (t) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Taxation (cont’d) (iii) Tax transparency (cont’d) 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 sheets. (u) 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. (v) 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 26, including the factors used to identify the reportable segments and the measurement basis of segment information. (w) 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. (x) Contingencies a contingent liability is: – 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 – 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. 5 1 0 2 t R o p e R l a u n n a 115 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 3. INVESTMENT PROPERTIES at beginning purchase of an investment property Capital expenditure surplus on revaluation taken to statements of total Return at end group and trust 2015 $’000 2014 $’000 2,400,000 – 441 2,400,441 2,019,500 308,435 4,106 2,332,041 63,559 2,464,000 67,959 2,400,000 the investment properties owned by the Group and the trust are set out in the portfolio statements on pages 98 to 100. 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 13). Bedok point has been mortgaged as security for a $70 million secured five-year term loan from DBs Bank ltd (note 13). During the last financial year, the trust completed the acquisition of Changi City point for a total consideration of $308,434,956 (including transaction costs of $384,956 directly attributable to the acquisition and acquisition fees paid to the Manager in units of $3,050,000, representing 1% of the purchase consideration paid of $305,000,000). Valuation processes Investment properties are stated at fair value based on valuations performed by external independent valuers who possess appropriate recognised professional qualifications and relevant experience in the location and property being valued. In accordance with the CIs code, the Group rotates the independent valuers every two years. 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 reviews the appropriateness of the valuation methodologies, assumptions and estimates adopted and is of the view that they are reflective of the market conditions as at 30 september 2015. 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. 5 1 0 2 t R o p e R l a u n n a 116 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 3. INVESTMENT PROPERTIES (CONT’D) Fair value hierarchy ∞ ∞ ∞ level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date; 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). fair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. at 30 September 2015 non-financial assets Investment properties at 30 September 2014 non-financial assets Investment properties Level 3 fair value measurements Level 1 $’000 Level 2 $’000 Level 3 $’000 total $’000 – – – 2,464,000 2,464,000 – 2,400,000 2,400,000 the following table shows the information about fair value measurements using significant unobservable inputs (level 3): Description Investment properties Fair value at 30 September 2015 $’000 valuation techniques Key unobservable inputs range of unobservable inputs relationship of unobservable inputs to fair value 2,464,000 Capitalisation approach Capitalisation rate 5.25% – 5.70% the higher the rate, the lower the fair value. Discounted cash flow analysis Discount rate 7.50% – 8.00% the higher the rate, Direct comparison method transacted prices – the lower the fair value. the higher the comparable value, the higher the fair value. a significant reduction in the capitalisation rate and/or discount rate in isolation would result in a significantly higher fair value of the investment properties. the key unobservable inputs correspond to: • • Discount rate, based on the risk-free rate for 10-year bonds issued by the government in Singapore, adjusted for a risk premium to reflect the increased risk of investing in the asset class; and Capitalisation rate which corresponds to a rate of return on investment properties based on the expected income that the property will generate. 5 1 0 2 t R o p e R l a u n n a 117 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 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 2014 $’000 2015 $’000 63,559 480 64,039 67,959 1,538 69,497 Direct operating expenses (including repairs and maintenance) arising from rental generating properties are disclosed on note 18 to the financial statements. 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 27. 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 1 0 2 t R o p e R l a u n n a 118 t s u R t I t n o p e R t n e C s R e s a R f equipment, furniture and fittings group and trust 2015 $’000 2014 $’000 324 38 (2) 360 211 46 (2) 255 113 105 308 33 (17) 324 187 41 (17) 211 121 113 noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 5. INTANGIBLE ASSETS cost at beginning additions at end accumulated amortisation at beginning Charge for the year at end carrying amount at beginning at end 6. INVESTMENT IN SUBSIDIARY unquoted equity investment, at cost * Denotes amount less than $500. Details of the subsidiary are as follows: name of subsidiary place of incorporation / business Software group and trust 2015 $’000 2014 $’000 90 – 90 6 18 24 84 66 – 90 90 – 6 6 – 84 trust 2015 $’000 2014 $’000 * * effective equity interest held by the trust 2015 % 2014 % fCt Mtn pte. ltd.(1) singapore 100 100 (1) audited by ernst & Young llp, singapore 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. 5 1 0 2 t R o p e R l a u n n a 119 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 7. INVESTMENT IN ASSOCIATE Quoted units, at cost share of post-acquisition reserves – operations – translation difference revaluation surplus allowance for impairment group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 67,806 67,806 67,806 67,806 3,844 18,099 (20,167) 69,582 (6,759) 62,823 3,537 17,377 (7,449) 81,271 (6,759) 74,512 – – – 67,806 (3,963) 63,843 – – – 67,806 (3,963) 63,843 fair value of investment based on published price quotation 60,914 73,361 60,914 73,361 Details of the associate are as follows: name of associate place of incorporation / business effective equity interest held by the group and trust 2015 % 2014 % Hektar Real estate Investment trust(1) Malaysia 31.17 31.17 (1) audited by sJ Grant thornton, Malaysia 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 2015, the Group has estimated the results of H-ReIt for the quarter ended 30 september 2015 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% (2014: 10%) withholding tax in Malaysia. 5 1 0 2 t R o p e R l a u n n a 120 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 7. 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 2015 (2) $’000 2014 (3) $’000 395,216 10,628 405,844 11,815 172,096 183,911 44,308 (28,188) 2,181 18,301 414,567 10,965 425,532 8,233 178,427 186,660 47,331 (29,360) 4,914 22,885 (2) the financial information is based on the latest available unaudited management accounts as at 30 June 2015 and for the six months ended 30 June 2015 and the pro-rated six month results from the audited financial statements for the period ended 31 December 2014. (3) the financial information is based on the unaudited management accounts as at 30 June 2014 and for the six months ended 30 June 2014 and the pro-rated six month results from the audited financial statements for the period ended 31 December 2013. as at 30 september 2015 and 2014, the associate’s property portfolio comprises subang parade in selangor, Mahkota parade in Melaka, Wetex parade in Muar, Johor, Central square and landmark Central in Kedah. 5 1 0 2 t R o p e R l a u n n a 121 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 8. INVESTMENT IN JOINT VENTURE unquoted equity investment, at cost share of post-acquisition reserves – operations Details of the joint venture are as follows: group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 1 153 154 – – – 1 – 1 – – – name of joint venture place of incorporation / business effective equity interest held by the group and trust 2015 % 2014 % Changi City Carpark operations llp singapore 43.68 – the Group has 43.68% interest in the ownership and voting rights in a joint venture, Changi City Carpark operations llp. this joint venture is incorporated in singapore and is a strategic venture in the management and operation of Car park in Changi City point. the Group jointly controls the venture with other partner under the contractual agreement and requires unanimous consent for all major decisions over the relevant activities. 5 1 0 2 t R o p e R l a u n n a 122 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 9. TRADE AND OTHER RECEIVABLES trade receivables allowance for doubtful receivables net trade receivables Deposits prepayments other receivables amount due from joint venture amount due from related party (trade) loan arrangement fees fair value of interest rate swaps group and trust 2015 $’000 2014 $’000 2,020 (61) 1,959 70 532 – 87 – 1,396 1,357 5,401 1,964 (69) 1,895 63 273 17 – 932 2,156 – 5,336 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 $1,959,000 (2014: $1,895,000) 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 group and trust 2015 $’000 2014 $’000 1,624 169 76 41 49 1,959 1,685 128 39 5 38 1,895 5 1 0 2 t R o p e R l a u n n a 123 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 9. TRADE AND OTHER RECEIVABLES (CONT’D) (ii) Trade receivables that are impaired 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 2015 $’000 2014 $’000 61 (61) – 69 8 (7) (9) 61 69 (69) – 86 41 (57) (1) 69 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. 10. 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 group and trust 2015 $’000 2014 $’000 16,197 – 16,197 18,741 23,000 41,741 the weighted average effective interest rate for fixed deposits is 1.03% (2014: 0.69%) per annum. 5 1 0 2 t R o p e R l a u n n a 124 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 11. TRADE AND OTHER PAYABLES 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 2015 $’000 2014 $’000 2015 $’000 2014 $’000 16,694 6,486 4,365 3,196 29 981 62 31,813 21,011 6,055 4,625 3,838 28 191 4,147 39,895 16,712 6,486 4,365 3,196 29 981 62 31,831 21,025 6,055 4,625 3,838 28 191 4,147 39,909 Included in trade payables and accrued operating expenses is an amount due to the trustee of $66,441 (2014: $65,578). Included in amounts due to related parties are amounts due to the Manager of $3,759,333 (2014: $3,716,792) and the property Manager of $2,568,740 (2014: $2,337,699) 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 $159 million that matures in July 2016; (ii) notional contract amount of $70 million that matures in December 2016; and (ii) notional contract amount of $90 million that matures in June 2017. the fair value of the interest rate swaps is determined using valuation technique as disclosed in note 24(b). the Group does not apply hedge accounting. 5 1 0 2 t R o p e R l a u n n a 125 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 12. 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 13. INTEREST-BEARING BORROWINGS non-current liabilities term loan (secured) term loan (unsecured) loan from subsidiary (unsecured) Medium term notes (unsecured) current liabilities loan from subsidiary (unsecured) Medium term notes (unsecured) term loan (secured) Revolving loan (unsecured) 5 1 0 2 t R o p e R l a u n n a 126 t s u R t I t n o p e R t n e C s R e s a R f group and trust 2015 $’000 2014 $’000 3,147 880 (1,139) 2,888 1,744 975 (1,139) 1,580 2,913 1,175 (941) 3,147 1,659 1,026 (941) 1,744 1,308 1,403 732 576 1,308 778 625 1,403 group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 70,000 150,000 – 220,000 440,000 – – 264,000 14,000 278,000 334,000 150,000 – 160,000 644,000 – 95,000 – – 95,000 70,000 150,000 220,000 – 440,000 – – 264,000 14,000 278,000 334,000 150,000 160,000 – 644,000 95,000 – – – 95,000 noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 13. INTEREST-BEARING BORROWINGS (CONT’D) (a) Term loans (secured) (i) 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 “$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 $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; and a first fixed and floating charge over all present and future assets of the trust in connection with northpoint. ∞ ∞ (ii) In December 2011, the trust entered into a facility agreement with DBs Bank ltd for a secured five-year term loan of $70 million (the “$70 million secured term loan”). the $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) Term loan (unsecured) on 9 June 2014, the trust entered into a facility agreement with DBs Bank ltd and Citibank n.a., singapore branch for an unsecured term loan of $150 million. the unsecured term loan, which has 2 repayment dates in June 2017 and June 2019, bears interest at swap-offer rate plus respective margins. (c) 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. 5 1 0 2 t R o p e R l a u n n a 127 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 13. INTEREST-BEARING BORROWINGS (CONT’D) as at 30 september 2015, the aggregate balance of the notes issued by the Group under the fCt Mtn programme amounted to $220 million (2014: $255 million), consisting of: (i) (ii) (iii) (iv) $30 million (2014: $30 million) fixed Rate notes which mature on 12 June 2017 and bear a fixed interest rate of 2.850% per annum payable semi-annually in arrear; $70 million (2014: $70 million) fixed Rate notes which mature on 21 January 2020 and bear a fixed interest rate of 3.000% per annum payable semi-annually in arrear; $60 million (2014: $60 million) fixed Rate notes which mature on 12 December 2017 and bear a fixed interest rate of 2.535% per annum payable semi-annually in arrear; and $60 million (2014: $nil) fixed Rate notes which mature on 10 april 2019 and bear a fixed interest rate of 2.900% per annum payable semi-annually in arrear. $25 million fixed Rate notes and $70 million fixed Rate notes which bear a fixed interest rate of 3.500% and 2.300% per annum were repaid in february 2015 and June 2015 respectively. (d) Unsecured revolving credit facilities the trust has obtained unsecured revolving credit facilities amounting to $50 million (2014: $30 million). as at 30 september 2015, total borrowings drawn down by the trust on these facilities amounted to $14 million (2014: $nil). 14. 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 loss/(gain) arising from translation of financial statements of foreign operations at end group 2015 $’000 2014 $’000 7,449 8,263 12,718 20,167 (814) 7,449 5 1 0 2 t R o p e R l a u n n a 128 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 15. UNITS IN ISSUE Units in issue at beginning Issue of Units – private placement – – at end issued as satisfaction of acquisition fee issued as satisfaction of asset management fees Units to be issued – as asset management fees payable in units total issued and issuable units at end group and trust 2015 2014 no. of Units no. of Units ’000 ’000 915,415 824,383 – – 1,425 916,840 88,000 1,662 1,370 915,415 371 917,211 364 915,779 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. 16. NET ASSET VALUE PER UNIT net asset value per unit is based on: net assets group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 1,754,544 1,698,677 1,755,393 1,687,994 ’000 ’000 ’000 ’000 total issued and issuable units (note 15) 917,211 915,779 917,211 915,779 5 1 0 2 t R o p e R l a u n n a 129 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 17. GROSS REVENUE Gross rental income turnover rental income Carpark income others 18. PROPERTY EXPENSES property tax utilities Maintenance property management fees Marketing expenses allowance for doubtful receivables Write back of allowance for doubtful receivables Depreciation of fixed assets amortisation of intangible assets 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. 19. BORROWING COSTS Interest expense amortisation of loan arrangement fees 5 1 0 2 t R o p e R l a u n n a 130 t s u R t I t n o p e R t n e C s R e s a R f group and trust 2015 $’000 2014 $’000 167,914 9,288 4,738 7,302 189,242 149,453 8,290 4,729 6,282 168,754 group and trust 2015 $’000 2014 $’000 15,700 5,779 16,020 7,242 6,865 8 (7) 46 18 3,886 1,973 669 58,199 15,312 5,347 13,601 6,490 4,394 41 (57) 41 6 3,132 1,561 790 50,658 group and trust 2015 $’000 2014 $’000 18,447 889 19,336 17,734 753 18,487 noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 20. ASSET MANAGEMENT FEES asset management fees comprise $7,545,053 (2014: $6,964,460) of base fee and $6,552,138 (2014: $5,904,820) of performance fee computed in accordance with the fee structure as disclosed in note 1(b) to the financial statements. an aggregate of 1,432,104 (2014: 1,412,672) units were issued or are issuable to the Manager as satisfaction of the asset management fees payable for the financial year ended 30 september 2015. 21. TAXATION reconciliation of effective tax net income Income tax using singapore tax rate of 17% (2014: 17%) non-tax deductible items Income not subject to tax Income exempt from tax 22. EARNINGS PER UNIT group trust 2015 $’000 2014 $’000 2015 $’000 2014 $’000 96,205 85,139 96,202 85,135 16,355 954 721 (18,030) – 14,474 974 778 (16,226) – 16,354 955 721 (18,030) – 14,473 974 778 (16,225) – 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. group 2015 $’000 2014 $’000 trust 2015 $’000 2014 $’000 total return for year after tax 171,464 165,063 170,278 163,087 Weighted average number of units in issue ’000 916,318 ’000 855,116 ’000 916,318 ’000 855,116 Diluted earnings per unit is the same as basic earnings per unit as there is no dilutive instrument in issue during the year. 5 1 0 2 t R o p e R l a u n n a 131 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 23. SIGNIFICANT RELATED PARTY TRANSACTIONS for the purposes of these financial statements, parties are considered to be related to the Group if the Group has the direct and indirect ability to control the party, jointly control or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and party are subject to common control or common significant influence. Related parties may be individuals or other entities. the Group considers the Managers as the key management officers of the corporate office in accordance with fRs 24 Related party Disclosures. 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) acquisition fees paid in units to the Manager in relation to the acquisition of an investment property(1) Reimbursement of expenses paid/payable to the Manager Reimbursement of expenses paid/payable to a subsidiary of a unitholder Recovery of expenses paid on behalf of a subsidiary of a unitholder Recovery of net income receivable from related companies of the Manager Income from related company of the Manager acquisition of an investment property from related company of the Manager Car park expenses paid/payable to the Joint Venture group and trust 2015 $’000 2014 $’000 17,634 14,598 – 41 8 (27) (27) (23) – 28 3,050 92 10 (8) (904) – 305,000 – (1) In accordance with service agreements in relation to management of the trust and its property operations. 24. FAIR VALUE OF ASSETS AND LIABILITIES (a) Assets and liabilities measured at fair value at 30 September 2015 financial assets Interest rate swaps at 30 September 2014 financial assets Interest rate swaps Level 1 $’000 Level 2 $’000 Level 3 $’000 total $’000 – – 1,357 – – – 1,357 – 5 1 0 2 t R o p e R l a u n n a 132 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 24. FAIR VALUE OF ASSETS AND LIABILITIES (CONT’D) (a) Assets and liabilities measured at fair value (cont’d) at 30 September 2015 financial liabilities Interest rate swaps at 30 September 2014 financial liabilities Interest rate swaps Level 1 $’000 Level 2 $’000 Level 3 $’000 total $’000 – – 62 4,147 – – 62 4,147 During the financial years ended 30 september 2015 and 2014, there have been no transfers between the respective levels. (b) Level 2 fair value measurements Interest rate swap contracts are valued using present value calculations by applying market observable inputs existing at each balance sheet date into swap models. the models incorporate various inputs including the credit quality of counterparties and interest rate curves. (c) Fair value of financial liabilities that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair values the following 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: group and trust Financial liabilities: Interest-bearing borrowings (non-current) security deposits (non-current) as at 30.9.2015 $’000 as at 30.9.2014 $’000 carrying amount Fair value carrying amount Fair value 440,000 25,957 465,957 439,080 25,377 464,457 644,000 25,277 669,277 645,728 25,016 670,744 (d) Fair value of financial assets and liabilities that are not carried at fair value and whose carrying amounts are reasonable approximation of fair values 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. 5 1 0 2 t R o p e R l a u n n a 133 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 25. FINANCIAL RISK MANAGEMENT (a) Capital risk management 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. 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 2015, the Group’s aggregate leverage stood at 28.2% (2014: 29.3%) of its depository property, which is within the limit set by the property fund Guidelines and externally imposed capital requirements. 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 sheets. at the balance sheet date, approximately 6.5% (2014: 4.8%) 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 9. (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 ongoing 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. 5 1 0 2 t R o p e R l a u n n a 134 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 25. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (ii) Interest rate risk (cont’d) 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 $3,014,000 (2014: $3,295,000), arising mainly as a result of change in the fair value of interest rate swap instruments. on outstanding borrowings not covered by financial derivatives at the balance sheet date, it is estimated that a twenty five points increase in interest rate, with all other variables held constant, would decrease the Group’s total return for the year and unitholders’ funds by approximately $448,000 (2014: $458,000) and a twenty five basis points decrease in interest rate, with all other variables held constant, would increase the Group’s total return for the year and unitholders’ funds by approximately $448,000 (2014: $380,000), arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings. the assumed movement in basis points for interest rate sensitivity analysis is based on current observable market environment. (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. 5 1 0 2 t R o p e R l a u n n a 135 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 25. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Liquidity risk (cont’d) 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. Within 1 year $’000 1 to 5 years $’000 More than 5 years $’000 total $’000 as at 30 September 2015 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 2014 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 5 1 0 2 t R o p e R l a u n n a 136 t s u R t I t n o p e R t n e C s R e s a R f 31,751 62 17,955 293,095 342,863 31,769 62 17,955 293,095 342,881 35,748 4,147 18,520 109,756 168,171 35,762 4,147 18,520 109,756 168,185 – – 26,456 459,375 485,831 – – 26,456 459,375 485,831 – – 25,720 663,919 689,639 – – 25,720 663,919 689,639 – – 10 – 10 – – 10 – 10 – – 10 644 654 – – 10 644 654 31,751 62 44,421 752,470 828,704 31,769 62 44,421 752,470 828,722 35,748 4,147 44,250 774,319 858,464 35,762 4,147 44,250 774,319 858,478 noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 26. 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, Bedok point and Changi City 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. 5 1 0 2 t R o p e R l a u n n a 137 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 26. SEGMENT REPORTING (CONT’D) (a) Business segments causeway point $’000 north- point $’000 anchor- point $’000 Yewtee point $’000 Bedok point $’000 changi city point group $’000 $’000 2015 Revenue and expenses Gross rental income others Gross revenue 71,175 9,785 80,960 45,131 5,204 50,335 7,926 846 8,772 12,251 1,798 14,049 8,393 993 9,386 23,039 2,701 25,740 167,914 21,328 189,242 segment net property income 59,100 36,156 4,799 9,720 4,945 16,323 131,043 Interest income unallocated expenses* net income unrealised gain from fair valuation of derivatives share of results of associate share of results of joint venture surplus on revaluation of investment properties total return for the year 2014 Revenue and expenses Gross rental income others Gross revenue 52,535 10,036 2,033 6,982 (11,945) 4,398 180 (35,018) 96,205 5,442 5,272 506 64,039 171,464 causeway point $’000 north- point $’000 anchor- point $’000 Yewtee point $’000 Bedok point $’000 changi city point group $’000 $’000 68,530 9,703 78,233 44,469 5,022 49,491 7,724 939 8,663 12,024 1,714 13,738 9,597 1,208 10,805 7,109 715 7,824 149,453 19,301 168,754 segment net property income 56,481 35,979 4,677 9,564 6,232 5,163 118,096 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 50,079 17,179 6,865 6,996 (8,994) (2,628) 82 (33,039) 85,139 3,879 6,548 69,497 165,063 * unallocated expenses include borrowing costs and asset management fees as disclosed in the statements of total Return. 5 1 0 2 t R o p e R l a u n n a 138 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 26. SEGMENT REPORTING (CONT’D) (a) Business segments (cont’d) as at 30 September 2015 Assets and liabilities segment assets Investment in associate Investment in joint venture unallocated assets total assets segment liabilities unallocated liabilities – trade and other payables – total liabilities Interest-bearing borrowings Other segmental information allowance for doubtful receivables Write back of allowance for doubtful receivables amortisation of lease incentives Depreciation of fixed assets amortisation of intangible assets Capital expenditure – – fixed assets Investment properties as at 30 September 2014 Assets and liabilities segment assets Investment in associate unallocated assets total assets segment liabilities unallocated liabilities – trade and other payables – total liabilities Interest-bearing borrowings Other segmental information allowance for doubtful receivables Write back of allowance for doubtful receivables amortisation of lease incentives Depreciation of fixed assets amortisation of intangible assets Investment properties Capital expenditure – – fixed assets – Intangible assets causeway point $’000 north- point $’000 anchor- point $’000 Yewtee point $’000 Bedok point $’000 changi city point group $’000 $’000 1,114,619 669,104 102,044 171,000 110,159 314,976 2,481,902 62,823 154 3,867 2,548,746 28,132 16,572 3,351 5,296 4,444 9,802 67,597 8,605 718,000 794,202 – – 817 14 3 283 6 1 – 36 6 3 – 7 – – 22 4 3 40 20 3 (5) 34 7 3 – 5 – (1) 97 9 3 42 – 4 8 (1) (526) 6 3 76 – (7) 480 46 18 441 38 causeway point $’000 north- point $’000 anchor- point $’000 Yewtee point $’000 Bedok point $’000 changi city point group $’000 $’000 1,063,291 658,580 94,646 169,113 123,511 310,256 2,419,397 74,512 27,877 2,521,786 33,591 16,196 3,343 5,207 4,537 8,849 71,723 12,386 739,000 823,109 34 1 (35) 1,545 15 1 3,466 7 15 (3) 480 6 1 301 4 15 – – (26) 2 1 109 – 15 5 (13) (4) 8 1 – – 15 – 1 41 (6) (264) 9 1 – (193) 1 1 (57) 1,538 41 6 230 – 15 308,435 22 15 312,541 33 90 5 1 0 2 t R o p e R l a u n n a 139 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInancIaL Stat eMentS 30 septeMBeR 2015 27. COMMITMENTS Capital expenditure contracted but not provided for 1,209 2,406 the Group leases out its investment properties. non-cancellable operating lease rentals receivable are as follows: group and trust 2015 $’000 2014 $’000 Receivable: Within 1 year after 1 year but within 5 years after 5 years 28. CONTINGENT LIABILITY group and trust 2015 $’000 2014 $’000 145,715 143,916 44 289,675 137,143 126,877 85 264,105 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 the IRas should the 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 the 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. 29. SUBSEQUENT EVENTS on 22 october 2015, the Manager declared a distribution of $26,223,000 to unitholders in respect of the period from 1 July 2015 to 30 september 2015. on 26 october 2015, the trust issued 371,296 new units at a price of $1.8925 per unit in payment of 20% of its management fees for the period from 1 July 2015 to 30 september 2015. 5 1 0 2 t R o p e R l a u n n a 140 t s u R t I t n o p e R t n e C s R e s a R f noteS to tHe FInan cIaL StateMen tS 30 septeMBeR 2015 30. 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 2015 % 2014 % 0.92 0.54 – 0.96 0.57 – (1) 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. (2) 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. 5 1 0 2 t R o p e R l a u n n a 141 t s u R t I t n o p e R t n e C s R e s a R f StatIStIcS oF UnItHoLDerS as at 30 noVeMBeR 2015 ISSUED AND FULLY PAID-UP UNITS there were 917,211,336 units (voting rights: one vote per unit) outstanding as at 30 november 2015. there is only one class of units. the market capitalisation was $1,696,841 based on closing unit price of $1.85 on 30 november 2015. TOP TWENTY UNITHOLDERS AS AT 30 NOVEMBER 2015 as shown in the Register of unitholders S/no Unitholders number of Units % of total units in Issue 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. CItIBanK noMInees sInGapoRe pte ltD HsBC (sInGapoRe) noMInees pte ltD DBs noMInees (pRIVate) lIMIteD Raffles noMInees (pte) lIMIteD fRaseRs CentRepoInt asset ManaGeMent ltD DBsn seRVICes pte. ltD. unIteD oVeRseas BanK noMInees (pRIVate) lIMIteD BanK of sInGapoRe noMInees pte. ltD. ntuC faIRpRICe Co-opeRatIVe ltD CIMB seCuRItIes (sInGapoRe) pte. ltD. DB noMInees (sInGapoRe) pte ltD Bnp paRIBas seCuRItIes seRVICes sInGapoRe BRanCH oCBC seCuRItIes pRIVate lIMIteD uoB KaY HIan pRIVate lIMIteD MaYBanK KIM enG seCuRItIes pte. ltD. KGI fRaseR seCuRItIes pte. ltD. Yap CHonG HIn GaBRIel oCBC noMInees sInGapoRe pRIVate lIMIteD Bnp paRIBas noMInees sInGapoRe pte ltD total 349,671,000 136,498,976 121,182,093 71,469,980 35,149,928 29,581,336 25,203,955 11,422,600 8,670,400 7,695,000 7,006,848 5,958,704 5,372,196 3,536,800 2,900,200 2,169,662 1,594,700 1,500,000 1,433,000 1,404,300 829,421,678 UNITHOLDINGS OF DIRECTORS OF THE MANAGER AS AT 21 OCTOBER 2015 38.12 14.88 13.21 7.79 3.83 3.23 2.75 1.25 0.95 0.84 0.76 0.65 0.59 0.39 0.32 0.24 0.17 0.16 0.16 0.15 90.44 name of Director Mr Bobby Chin Yoke Choong Mr lim ee seng Mr soh Kim soon Mr Christopher tang Kok Kai number of Fct Units held Direct Interest Deemed Interest – 200,000 100,000 50,000 100,000 – – 620,000 5 1 0 2 t R o p e R l a u n n a 142 t s u R t I t n o p e R t n e C s R e s a R f StatIStIcS oF UnItHoLDerS as at 30 noVeMBeR 2015 SUBSTANTIAL UNITHOLDERS AS AT 30 NOVEMBER 2015 Substantial Unitholders number of Units % number of Units % total number of Units Held % Direct Interest Deemed Interest fCl trust Holdings pte. ltd. frasers Centrepoint limited(1) thai Beverage public Company 349,671,000 – – 38.12% – – – 379,252,336 379,252,336 – 41.35% 41.35% 349,671,000 379,252,336 379,252,336 38.12% 41.35% 41.35% limited(2) International Beverage Holdings limited(3) InterBev Investment limited(4) tCC assets limited(5) Charoen sirivadhanabhakdi(6) Khunying Wanna sirivadhanabhakdi(7) schroder Investment Management Group(8) – – – – – – – – – – – – 379,252,336 41.35% 379,252,336 41.35% 379,252,336 379,252,336 379,252,336 379,252,336 41.35% 41.35% 41.35% 41.35% 379,252,336 379,252,336 379,252,336 379,252,336 41.35% 41.35% 41.35% 41.35% 51,596,600 5.63% 51,596,600 5.63% notes: (1) frasers Centrepoint limited (“FcL”) holds a 100% direct interest in each of frasers Centrepoint asset Management ltd (“FcaM”) and fCl trust Holdings pte. ltd. (“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). (2) thai Beverage public Company limited (“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 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 fCl has an interest, by virtue of section 4 of the securities and futures act (Chapter 289 of singapore). (3) IBIl holds a greater than 20% interest in fCl; fCl holds a 100% direct interest in each of fCaM and fClt; and fCaM and fClt hold units in fCt. IBHl holds a 100% direct interest in InterBev Investment limited; − − − IBHl 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). (4) fCl holds a 100% direct interest in each of fCaM and fClt; and fCaM and fClt hold units in fCt. IBIl holds a greater than 20% interest in fCl; − − IBIl 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). (5) tCC assets limited (“tCCa”) holds a majority 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 fCl has an interest, by virtue of section 4 of the securities and futures act (Chapter 289 of singapore). (6) Charoen sirivadhanabhakdi and his spouse, Khunying Wanna sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of tCCa; fCl holds a 100% direct interest in each of fCaM and fClt; and fCaM and fClt hold units in fCt. − tCCa holds a majority interest in fCl; − − Charoen sirivadhanabhakdi 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). (7) Khunying Wanna sirivadhanabhakdi and her spouse, Charoen sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of tCCa; fCl holds a 100% direct interest in each of fCaM and fClt; and fCaM and fClt hold units in fCt. − tCCa holds a majority interest in fCl; − − Khunying Wanna sirivadhanabhakdi 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). (8) Based on information provided by schroder Investment Management (singapore) ltd. on 1 December 2015. 5 1 0 2 t R o p e R l a u n n a 143 t s u R t I t n o p e R t n e C s R e s a R f StatIStIcS oF UnItHoLDerS as at 30 noVeMBeR 2015 DISTRIBUTION OF HOLDINGS Size of Holdings 1 to 99 100 to 1,000 1,001 to 10,000 10,001 to 1,000,000 1,000,001 and above total LOCATION OF UNITHOLDERS country singapore Malaysia others total FREE FLOAT number of Unitholders percentage of Unitholders number of Units percentage of Units in Issue 14 617 3,863 1,321 22 5,837 0.24% 10.57% 66.18% 22.63% 0.38% 100.00% 360 566,394 19,285,297 65,535,107 831,824,178 917,211,336 0.00% 0.06% 2.10% 7.15% 90.69% 100.00% number of Unitholders percentage of Unitholders number of Units percentage of Units in Issue 5,561 192 84 5,837 95.27% 3.29% 1.44% 100.00% 912,382,334 3,767,600 1,061,402 917,211,336 99.47% 0.41% 0.12% 100.00% Based on information made available to the Manager as at 30 november 2015, approximately 58.65% of the units are held in the hands of the public. Rule 723 of the listing Manual of the singapore exchange securities trading limited has accordingly been complied with. 5 1 0 2 t R o p e R l a u n n a 144 t s u R t I t n o p e R t n e C s R e s a R f aDDItIonaL InForMatIon INTERESTED PERSON TRANSACTIONS the transactions entered into with interested persons during the financial year, which fall within the listing Manual of the singapore exchange securities trading limited (“sGX-st”) and the property funds appendix of the Code on Collective Investment schemes (excluding transactions of less than $100,000 each) are as follows: aggregate value of all Interested person transactions during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders’ mandate pursuant to rule 920) aggregate value of all Interested person transactions during the financial year under review under shareholders’ mandate pursuant to rule 920 (excluding transactions less than $100,000) $’000 $’000 14,097 5,136 3,424 397 – – – – name of Interested person Frasers centrepoint Limited and its subsidiaries or associate – asset management fees – property management fees – Reimbursement of expenses HSBc Institutional trust Services (Singapore) Limited – trustee’s fees saved as disclosed above, there were no additional interested person transactions (excluding transactions of less than $100,000 each) entered into during the financial year under review nor any material contracts entered into by the trust that involved the interests of the Ceo, any Director or any controlling shareholder of the trust. please also see significant Related party transactions in note 23 in the financial statements. fees payable to the Manager and the property Manager on the basis of, and in accordance with, the terms and conditions set out in the trust deed dated 5 June 2006 (as amended) and/or the prospectus dated 27 June 2006 are not subject to Rules 905 and 906 of the sGX-st’s listing Manual. accordingly, such fees are not subject to aggregation and other requirements under Rules 905 and 906 of the sGX-st’s listing Manual. SUBSCRIPTION OF THE TRUST UNITS 5 1 0 2 t R o p e R l a u n n a as at 30 september 2015, an aggregate of 916,840,040 units were in issue. on 26 october 2015, the trust issued 371,296 units to the Manager as asset management fees for the period from 1 July 2015 to 30 september 2015. 145 NON-DEAL ROADSHOW EXPENSES non-deal roadshow expenses of $35,595 (2014: $42,409) were incurred during the year ended 30 september 2015. t s u R t I t n o p e R t n e C s R e s a R f notIce oF annU aL generaL MeetIng (a real estate investment trust constituted on 5 June 2006 under the laws of the Republic of singapore) notIce IS HereBY gIven that the 7th annual General Meeting of fRaseRs CentRepoInt tRust (“Fct”) will be held at level 2, alexandra point, 438 alexandra Road, singapore 119958 on thursday, 21 January 2016 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 financial year ended 30 september 2015. resolution (2) 2. to appoint KpMG llp (“KpMg”) as auditors of fCt to hold office until the conclusion of the next annual General Meeting in place of the retiring auditors, ernst & Young llp (“eY”), 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); 5 1 0 2 t R o p e R l a u n n a 146 t s u R t I t n o p e R t n e C s R e s a R f notIce oF annU aL 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) (4) (5) (6) 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) (the “trust Deed”) for the time being in force (unless otherwise exempted or waived by the Monetary authority of singapore); 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; 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 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. frasers Centrepoint asset Management ltd. (Company Registration no: 200601347G) as manager of frasers Centrepoint trust piya treruangrachada Company secretary singapore, 29 December 2015 5 1 0 2 t R o p e R l a u n n a 147 t s u R t I t n o p e R t n e C s R e s a R f notIce oF annU aL generaL MeetIng notes: (1) a unitholder who is not a relevant intermediary entitled to attend the meeting and vote is entitled to appoint not more than two proxies to attend and vote instead of the unitholder. a proxy need not be a unitholder. Where a unitholder appoints more than one proxy, the appointments shall be invalid unless the unitholder specifies the proportion of the unitolder’s holdings (expressed as a percentage of the whole) to be represented by each proxy. (2) a unitholder who is a relevant intermediary entitled to attend the meeting and vote is entitled to appoint more than two proxies to attend and vote instead of the unitholder, but each proxy must be appointed to exercise the rights attached to a different unit or units held by such unitholder. Where such unitholder appoints more than two proxies, the appointments shall be invalid unless the unitholder specifies the number of units in relation to which each proxy has been appointed. “Relevant intermediary” means: (a) (b) (c) a banking corporation licensed under the Banking act, Chapter 19 of singapore or a wholly-owned subsidiary of such a banking corporation, whose business includes the provision of nominee services and who holds units in that capacity; a person holding a capital markets services licence to provide custodial services for securities under the securities and futures act, Chapter 289 of singapore and who holds units in that capacity; or the Central provident fund Board (“cpF Board”) established by the Central provident fund act, Chapter 36 of singapore, in respect of units purchased under the subsidiary legislation made under that act providing for the making of investments from the contributions and interest standing to the credit of members of the Central provident fund, if the Cpf Board holds those units in the capacity of an intermediary pursuant to or in accordance with that subsidiary legislation. (3) 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 at 438 alexandra Road, #21-00 alexandra point, singapore 119958, not less than 72 hours before the time appointed for holding the meeting. 5 1 0 2 t R o p e R l a u n n a 148 t s u R t I t n o p e R t n e C s R e s a R f explanatory note: Resolution 2 the ordinary Resolution 2 above is to approve the appointment of KpMG as auditors of fCt in place of the retiring auditors, eY, and to authorise the Manager to fix their remuneration. eY, the retiring auditors, have served as external auditors of fCt since the constitution of fCt. fCt’s proposed change in auditor is in line with the proposed change of auditors to KpMG by frasers Centrepoint limited, fCt’s sponsor and indirect controlling unitholder. the appointment by fCt of the same external auditor would also be more efficient for fCt from a reporting perspective. the Manager is therefore of the view that it would be timely to effect a change of external auditor from the financial year ending 30 september 2016. the audit Committee has reviewed and deliberated on the proposed change of auditors and has recommended that KpMG be appointed in place of the retiring auditors, after taking into consideration the suitability of KpMG and the requirements of Rule 712(1), Rule 712(2) and Rule 715 of the listing Manual of the sGX-st. the Directors have taken into account the audit Committee’s recommendation, and considered factors such as the adequacy of the resources and experience of KpMG and the persons to be assigned to the audit, KpMG’s audit engagements, the size and complexity of fCt and its subsidiaries, and the number and experience of KpMG’s supervisory and professional staff to be assigned to the audit, and is satisfied that KpMG will be able to meet the audit requirements of fCt. accordingly, the Directors recommend the appointment of KpMG as the auditors of fCt in place of the retiring auditors, eY. notIce oF annU aL generaL MeetIng In accordance with the requirements of Rule 1203(5) of the listing Manual of the sGX-st: i. ii. iii. iv. the outgoing auditors, eY, have confirmed that they are not aware of any professional reasons why the new auditors, KpMG, should not accept appointment as auditors of fCt; the trustee and the Manager confirm that there were no disagreements with the outgoing auditors, eY, on accounting treatments within the last 12 months; the trustee and the Manager confirm that, other than as set out above, it is not aware of any circumstances connected with the proposed change of auditors that should be brought to the attention of unitholders; and the Manager confirms that Rule 712 and Rule 715 of the listing Manual of the sGX-st are complied with in relation to the appointment of KpMG. Resolution 3 the ordinary 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 ordinary 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 this Resolution 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. 5 1 0 2 t R o p e R l a u n n a 149 t s u R t I t n o p e R t n e C s R e s a R f notIce oF annU aL generaL MeetIng perSonaL Data prIvacY: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the annual General Meeting (“agM”) and/or any adjournment thereof, a unitholder (i) consents to the collection, use and disclosure of the unitholder’s personal data by the Manager and the trustee (or their agents) for the purpose of the processing and administration by the Manager and the trustee (or their agents) of proxies and representatives appointed for the aGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the aGM (including any adjournment thereof), and in order for the Manager and the trustee (or their agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “purposes”), (ii) warrants that where the unitholder discloses the personal data of the unitholder’s proxy(ies) and/ or representative(s) to the Manager and the trustee (or their agents), the unitholder has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Manager and the trustee (or their agents) of the personal data of such proxy(ies) and/or representative(s) for the purposes, and (iii) agrees that the unitholder will indemnify the Manager and the trustee (or their agents) in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the unitholder’s breach of warranty. 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 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. 5 1 0 2 t R o p e R l a u n n a 150 t s u R t I t n o p e R t n e C s R e s a R f 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. a relevant intermediary may appoint more than two proxies to attend the annual General Meeting and vote (please see note 2 for the definition of “relevant intermediary”). 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. 2. 3. pLeaSe reaD tHe noteS to tHe proXY ForM. perSonaL Data prIvacY By submitting an instrument appointing a proxy(ies) and/or representative(s), the unitholder accepts and agrees to the personal data privacy terms set out in the notice of annual General Meeting dated 29 December 2015. I/We (name) (nRIC/passport number) of being a unitholder/unitholders of frasers Centrepoint trust (“Fct”), hereby appoint: (address) 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 thursday, 21 January 2016 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/her/their discretion, as he/she/they may on any other matter arising at the annual General Meeting. no. of votes For* no. of votes against* no. reSoLUtIonS reLatIng to: 1. 2. 3. roUtIne BUSIneSS to receive and adopt the trustee’s Report, the statement by the Manager and the audited financial statements of fCt for the financial year ended 30 september 2015 to appoint KpMG llp as auditors of fCt to hold office until the conclusion of the next annual General Meeting in place of the retiring auditors, ernst & Young llp, and to authorise the Manager to fix their remuneration SpecIaL BUSIneSS to authorise the Manager to issue units and to make or grant convertible instruments * Voting will be conducted by poll. If you wish to exercise all your votes “for” or “against” the relevant resolution, please tick (ü) 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 2016 signature(s) of unitholder(s)/Common seal IMportant: pLeaSe reaD noteS to tHe proXY ForM total number of units held (note 4) fold and seal here IMportant: pLeaSe reaD tHe noteS to proXY ForM BeLoW notes to proxy Form 1. a unitholder who is not a relevant intermediary entitled to attend the meeting and vote is entitled to appoint not more than two proxies to attend and vote instead of the unitholder. a proxy need not be a unitholder. Where a unitholder appoints more than one proxy, the appointments shall be invalid unless the unitholder specifies the proportion of the unitolder’s holdings (expressed as a percentage of the whole) to be represented by each proxy. 2. a unitholder who is a relevant intermediary entitled to attend the meeting and vote is entitled to appoint more than two proxies to attend and vote instead of the unitholder, but each proxy must be appointed to exercise the rights attached to a different unit or units held by such unitholder. Where such unitholder appoints more than two proxies, the appointments shall be invalid unless the unitholder specifies the number of units in relation to which each proxy has been appointed. “Relevant intermediary” means: (a) a banking corporation licensed under the Banking act, Chapter 19 of singapore or a wholly-owned subsidiary of such a banking corporation, whose business includes the provision of nominee services and who holds units in that capacity; (b) a person holding a capital markets services licence to provide custodial services for securities under the securities and futures act, Chapter 289 of singapore and who holds units in that capacity; or (c) the Central provident fund Board (“cpF Board”) established by the Central provident fund act, Chapter 36 of singapore, in respect of units purchased under the subsidiary legislation made under that act providing for the making of investments from the contributions and interest standing to the credit of members of the Central provident fund, if the Cpf Board holds those units in the capacity of an intermediary pursuant to or in accordance with that subsidiary legislation. 5. 4. 3. 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 at 438 alexandra Road, #21-00 alexandra point, singapore 119958, not less than 72 hours before the time appointed for holding the meeting. 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. a unitholder should insert the total number of units held. If the unitholder has units entered against the unitholder’s name in the Depository Register maintained by the Central Depository (pte) limited (“cDp”), the unitholder should insert that number of units. If the unitholder has units registered in the unitholder’s 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 the unitholder’s name in the Register of unitholders, the unitholder 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. 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. 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. 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 the unitholder’s name in the Depository Register as at 72 hours before the time appointed for holding the meeting, as certified by CDp to the Manager. 8. 6. 7. fold here 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 Corporate inFor mation FrAsers centrepoint trust tHe mAnAGer regiStereD aDDreSS HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay, HSBC Building, #13-02 Singapore 049320 website ADDress www.fct.sg trustee HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay, HSBC Building, #13-02 Singapore 049320 Phone: (65) 6658-6906 Fax: (65) 6534-5526 AuDitor 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 Fax: (65) 6532-7662 regiStereD aDDreSS Frasers Centrepoint Asset Management Ltd 438 Alexandra Road, Alexandra Point, #21-00 Singapore 119958 Phone: (65) 6276-4882 Fax: (65) 6272-8776 Directors oF tHe mAnAGer mr philip eng heng nee Independent Non-Executive Chairman Dr Chew tuan Chiong CEO and 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 bAnkers Citibank N.A. DBS Bank Ltd Oversea-Chinese Banking Corporation Ltd Standard Chartered Bank AuDit committee Mr Bobby Chin Yoke Choong (Chairman) Mr Philip Eng Heng Nee Mr Soh Kim Soon unit reGistrAr Boardroom Corporate & Advisory Services Pte Ltd 50 Raffles Place, Singapore Land Tower, #32-01 Singapore 048623 Phone: (65) 6536-5355 Fax: (65) 6536-1360 compAny secretAry Mr Piya Treruangrachada FraSerS Centrepoint aSSet m a nagem e n t ltD. As Manager of Frasers Centrepoint Trust C o m p a n y R e g i s t r a t i o n N u m b e r : 2 0 0 6 0 1 3 4 7 G 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 Phone: +65 6276 4882 Fax: +65 6272 8776 Email: ir@fraserscentrepointtrust.com www.fct.sg