A member of Frasers Property Group Forging Trust Evolving Stronger Annual Report 2023 Contents Glossary OVERVIEW 2 3 About Frasers Centrepoint Trust Structure of FCT and Organisation Structure of The Manager Business Objectives and Growth Strategies FY2023 Highlights Key Events 5-Year Performance at a Glance 4 5 6 8 10 Unit Price Performance 12 16 20 22 Letter to Unitholders Board of Directors Trust Management Team Investor Relations BUSINESS REVIEW Financial Review 26 Operations Review 34 40 Capital Resources 42 Retail Property Market Overview ASSET PORTFOLIO FCT Portfolio Overview NEX 64 66 68 Causeway Point 70 Waterway Point 72 74 Northpoint City North Wing and Yishun 10 Tampines 1 Retail Podium Tiong Bahru Plaza 76 78 Central Plaza 80 Changi City Point 82 Century Square 84 Hougang Mall 86 White Sands 88 89 Property Directory Investment in Hektar REIT RISK MANAGEMENT AND SUSTAINABILITY REPORT 91 95 Risk Management Sustainability Report CORPORATE GOVERNANCE REPORT 139 Corporate Governance Report FINANCIAL & ADDITIONAL INFORMATION 179 Financial Statements 256 Statistics of Unitholdings 259 Additional Information Corporate Information For ease of reading, this glossary provides definitions of abbreviations that are frequently used throughout this report: All information are presented in Singapore dollars unless otherwise stated. ADTV AEI AGM ARCC AUM CIS COVID-19 CSFS DPU Essential Services : The groupings of essential and non- : Average daily trading volume : Asset Enhancement Initiative : Annual General Meeting : Audit, Risk and Compliance Committee : Asset under management : Collective Investment Scheme : Coronavirus disease : Community/Sports Facilities Scheme : Distribution per Unit FCAM FCT Fed Fed Fund Rate FSTREI Index Frasers Property or FPL FY GFA GRESB GRI GRPL GST GTO Moody’s MTN NAV NLA NPI NRC NTA q-o-q REIT Retail Portfolio S&P sf sqm SST Unitholders WALE y-o-y essential services based on Ministry of Trade and Industry’s press release on 21 April 2020 : Frasers Centrepoint Asset Management Ltd., the Manager of FCT : Frasers Centrepoint Trust : The United States Federal Reserve : Federal Funds Target Rates : FTSE ST All-share Real Estate Investment Trust Index : Frasers Property Limited, the sponsor of FCT : FCT’s financial year ending 30 September : Gross Floor Area : Global Real Estate Sustainability Benchmark : Gross Rental Income : Gold Ridge Pte. Ltd. which holds NEX; FCT owns an effective 25.50% interest in GRPL : Goods and Services Tax : Gross Turnover : Moody’s Investors Service (credit rating agency) : Medium Term Notes : Net Asset Value : Net Lettable Area : Net Property Income : Nominating and Remuneration Committee : Net Tangible Asset : quarter-on-quarter, refers to the comparison with the previous quarter : Real Estate Investment Trust : Includes all retail malls in FCT’s investment portfolio, and includes Waterway Point (50.00%-owned by FCT) and NEX (25.50%-owned by FCT), but excludes Central Plaza which is an office property : Standard and Poor’s (credit rating agency) : Square Feet : Square Meter : Sapphire Star Trust, which holds Waterway Point; it is a joint venture of FCT : Unitholders of FCT : Weighted Average Lease Expiry : year-on-year, refers to the comparison with the same period in the previous year Forging Trust Evolving Stronger At Frasers Centrepoint Trust, everything we create is built on the firm foundations of experience, expertise and trust. Across our suburban retail portfolio, we shape spaces and help connect and strengthen businesses and communities. By anchoring to our shared Purpose – Inspiring experiences, creating places for good. – and focusing on engaging with and delivering better for our stakeholders, Frasers Centrepoint Trust can deliver long-term value creation. When we consistently provide quality products, solutions and positive experiences, we forge greater trust with our stakeholders. This strengthens relationships, fuels further growth, and helps us to evolve and progress as a future-ready, resilient and stronger organisation. NEX, Singapore 2 Frasers Centrepoint Trust Annual Report 2023 About Frasers Centrepoint Trust Frasers Centrepoint Trust is a leading developer-sponsored REIT and one of the largest suburban retail mall owners in Singapore with assets under management of approximately $6.9 billion1. FCT’s property portfolio comprises ten retail malls and an office building located in the suburban regions of Singapore, near homes and within minutes to transportation amenities. The retail portfolio has approximately 2.9 million sf of net lettable area with over 1,700 leases with a strong focus on providing for necessity spending, food & beverage and essential services. The portfolio comprises NEX (25.50% interest), Causeway Point, Waterway Point (50.00% interest), Tampines 1, Northpoint City North Wing (including Yishun 10 Retail Podium), Tiong Bahru Plaza, Changi City Point2, Century Square, Hougang Mall, White Sands and an office property, Central Plaza. FCT’s malls enjoy stable and recurring shopper footfall supported by commuter traffic and residential population in the catchment areas. FCT is index constituent of several benchmark indices including the FTSE EPRA/NAREIT Global Real Estate Index Series (Global Developed Index), FTSE ST Real Estate Investment Trust Index, MSCI Singapore Small Cap Index and SGX iEdge S-REIT Leaders Index. Listed on the Main Board of the Singapore Exchange Securities Trading Limited since 5 July 2006, FCT is managed by Frasers Centrepoint Asset Management Ltd. (“FCAM”), a real estate management company and a wholly owned subsidiary of Frasers Property Limited. 1 As at 30 September 2023. 2 As at 30 September 2023, Changi City Point was reclassified to “Assets held for sale”, following FCT’s announcement relating to the divestment of the property on 30 August 2023. The divestment was completed on 31 October 2023. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 3 Structure of Frasers Centrepoint Trust Frasers Centrepoint 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 Property Manager Frasers Property Retail Management Pte. Ltd. Property Management Services Property Management Fee Ownership of Assets Net Property Income FCT Portfolio Properties1 NEX (25.50% interest) Causeway Point Waterway Point (50.00% interest) Tampines 1 Northpoint City North Wing (including Yishun 10 Retail Podium) Tiong Bahru Plaza Changi City Point2 Century Square Hougang Mall White Sands Central Plaza (office property) Organisation Structure of The Manager The Manager Frasers Centrepoint Asset Management Ltd. Nominating and Remuneration Committee The Board of Directors Chief Executive Officer Audit, Risk and Compliance Committee Investor Relations Finance Investment & Asset Management 1 As at 30 September 2023. 2 Reclassified to “Assets held for sale” as at 30 September 2023. The divestment of Changi City Point was completed on 31 October 2023. 4 Frasers Centrepoint Trust Annual Report 2023 Waterway Point, Singapore NEX, Singapore Business Objectives and Growth Strategies FCT is a real estate investment trust set up to own and invest in income- producing properties or properties that could be developed or redeveloped into income-producing properties, used primarily for retail purposes in Singapore and overseas. FCT’s objectives are to deliver regular and stable distributions to its Unitholders and to achieve long- term growth in its net asset value, so as to provide Unitholders with a competitive rate of return for their investments. FCAM, the Manager of FCT, sets the strategic direction for FCT and this includes making recommendations to HSBC Institutional Trust Services (Singapore) Limited, as the Trustee of FCT, on acquisitions, divestments and enhancement of assets. FCAM also oversees the overall management of FCT’s portfolio of investment properties, including the capital and risk management. FCT’s growth strategies comprise three growth drivers – acquisition growth, enhancement growth and organic growth. Acquisition Growth Capital Management FCAM 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 capital, interest rates exposure and overall liquidity position. Risk Management Effective risk management is a fundamental part of FCT’s business management. Key risks, mitigating measures and management actions are continually identified, reviewed and monitored by management as part of FCAM’s enterprise-wide risk management framework. Recognising and managing risks are central to the business and to protect Unitholders’ interests. Identifying and pursuing growth opportunities via acquiring additional income-producing properties and properties that could be developed or redeveloped into income-producing properties. The acquisitions should meet FCT’s investment objectives to enhance yields and returns for Unitholders while improving portfolio diversification. The acquisition opportunities include Sponsor’s pipeline assets and third party assets in Singapore. Enhancement Growth This includes change of configuration and layout of the properties to achieve better asset yield and sustainable income growth, and to achieve value creation through AEI to improve the income-producing capability of the properties. Organic Growth Active lease management to achieve positive rental reversions and maintaining healthy portfolio occupancy to provide steady rental growth. FCAM adopts prudent capital and risk management strategies in its course of business. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 5 FY2023 Highlights Gross Revenue $369.7 million ▲ 3.6% year-on-year Net Property Income $265.6 million ▲ 2.7% year-on-year FCT achieved higher gross revenue and NPI of $369.7 million and $265.6 million respectively in FY2023, as compared to FY2022. The growth was largely led by higher gross rental, increase in atrium income with the resumption of atrium events with effect from 29 March 2022, and property tax refunds received. It was partially offset by the lower gross revenue at Tampines 1 due to asset enhancement initiatives, higher maintenance and utility expenses, and higher staff costs. Distribution Per Unit 12.150 cents ▼ 0.6% year-on-year Appraised Value of Investment Property Portfolio $5,545.5 million ▲ 0.5% year-on-year DPU for FY2023 was 12.150 cents, which is 0.6% lower than the 12.227 cents in FY2022. The decrease was mainly attributed to higher interest expense and was cushioned by higher NPI and distributions from joint ventures. The total appraised value of FCT’s investment property portfolio1 as at 30 September 2023 stood at $5,545.5 million, stable as compared to $5,516.0 million a year ago. Net Asset Value and Net Tangible Asset Per Unit $2.32 ▼ 0.4% year-on-year FCT’s NAV and NTA per unit as at 30 September 2023 stood at $2.32 per unit2 which was marginally lower than the NAV and NTA per unit of $2.33 per unit3 a year ago, primarily due to a larger base of total issued and issuable units. Aggregate Leverage FCT’s aggregate leverage stood at 39.3%4,5 as at 30 September 2023, which was higher than a year ago of 33.0%. The increase was mainly attributed to the acquisition of an additional 10.00% interest in SST and effective 25.50% interest in Gold Ridge Pte. Ltd. (“GRPL”) which were fully debt funded. 1 2 3 4 Includes Changi City Point which was reclassified to “Assets held for sale” as at 30 September 2023. Includes the distribution to be paid for the second half of FY2023. Includes the distribution to be paid for the second half of FY2022. In accordance with Property Funds Appendix, the aggregate leverage included FCT’s proportionate 50.00% effective interest in the deposited property value and borrowings in Sapphire Star Trust (“SST”) which owns Waterway Point and the proportionate 25.50% effective interest in Gold Ridge Pte. Ltd. (“GRPL”) which owns NEX. 5 Assuming the net proceeds from the divestment of Changi City Point and interest in Hektar REIT are used to repay certain debts, the aggregate leverage on pro forma basis as at 30 September 2023 is expected to be reduced to 36.1%. 6 Frasers Centrepoint Trust Annual Report 2023 Key Events October 2022 February 2023 ▶ FCT announced its FY2022 full year financial results on 26 October 2022. DPU for FY2022 rose 1.2% year-on-year to 12.227 cents. Gross revenue and net property income for FY2022 reached new highs of $356.9 million and $258.6 million, respectively. ▶ FCT maintained its 5-Star rating and an overall score of 92 in the 2022 GRESB Real Estate Assessment. November 2022 ▶ FCT and Fraser Property Limited announced the completion of the joint acquisition of 50.00% interest in GRPL on 6 February 2023. ▶ FCT announced the completion of the acquisition of an additional 10.00% interest in Waterway Point on 8 February 2023. This raised FCT’s effective interest in Waterway Point to 50.00% from 40.00%. The proposed acquisition of the additional 10.00% in Waterway Point was announced on 12 September 2022. ▶ Hougang Mall achieved BCA Green Mark Platinum certification. All properties (including Central Plaza) in FCT’s portfolio are at least BCA Gold certified. April 2023 January 2023 ▶ FCT convened and held its 14th AGM on 17 January 2023. This was FCT’s first physical meeting in the endemic phase of the COVID-19. All resolutions proposed were duly passed. The minutes of the AGM were published on 15 February 2023. ▶ FCT released its 1Q23 Business Update on 26 January 2023. FCT reported improved operational performance in 1Q23. Its retail portfolio committed occupancy improved 1.2%-point year-on-year to 98.4% on healthy leasing demand. Tenants’ sales and shopper traffic growth for the period were up 13.4% and 38.3% respectively, compared to the same period a year ago. ▶ FCT and Frasers Property Limited announced the joint acquisition of 50.00% interest in Gold Ridge Pte. Ltd. (“GRPL”), which holds NEX, a suburban shopping mall located in Serangoon Central, for a purchase consideration of $652.5 million, subject to completion adjustments. FCT holds an effective interest of 25.50% in GRPL, and Frasers Property Limited holds the remaining 24.50% effective interest. NEX is the largest suburban shopping mall in Northeast Singapore with total net lettable area of approximately 634,631 sf. ▶ FCT released its 1H23 interim financial statements for the six-month period ended 31 March 2023 on 26 April 2023. FCT delivered a healthy set of results despite the headwinds from rising interest rates and operating costs. DPU for 1H23 was 6.130 cents compared to 6.136 cents a year ago. FCT also reported improved retail portfolio committed occupancy, higher rental reversion on the back of improved shopper traffic and robust retail tenants’ sales. July 2023 ▶ FCT announced a partnership with OCBC on Singapore’s first green financing solution which comprises a green loan and carbon credits. Under this green financing solution, proceeds from the green loan are used to refinance a maturing facility, finance asset enhancement initiatives and decarbonisation projects for FCT’s Tampines 1 retail mall as well as other general corporate purposes. The green financing solution, together with FCT’s decarbonisation efforts, will enable Tampines 1 to make progress towards carbon-neutral status that encompasses Scopes 1, 2 and energy-related Scope 3 emissions. ▶ FCT announced the appointment of Mr Ho Kin San as a Non-Executive and Independent Director of FCAM, and a member of the ARCC and the NRC of the Manager with effect from 18 July 2023. ▶ FCT provided 3Q23 Business Update on 25 July 2023. FCT reported retail portfolio committed occupancy of 98.7%, up 1.6%-point year-on-year, and higher shopper traffic and tenants’ sales compared to the same period a year ago. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 7 Subsequent Events August 2023 October 2023 ▶ FCT announced on 30 August 2023 the divestment ▶ FCT announced the full year financial results of Changi City Point for $338.0 million. The divestment is part of FCAM’s strategic portfolio review to strengthen FCT’s portfolio resilience and is in line with FCT’s long-term objective to create value for its unitholders. The divestment will also strengthen FCT’s financial position through the lowering of its aggregate leverage, a reduction in the average cost of borrowings and an improvement in the hedge ratio of fixed-rate loans from 63% to 73%, each on a pro forma basis. The divestment is also expected to increase the committed occupancy rate, average gross rent per sf, tenants’ sales per sf and the average remaining lease tenure of FCT’s retail portfolio. These put FCT in a stronger position to focus on its core suburban retail strategy going forward. September 2023 ▶ FCT announced on 14 September 2023 that Mr Low Chee Wah will be retiring as Non-Executive and Non-Independent Director of FCAM with effect from 1 January 2024. ▶ FCT announced on 22 September 2023 the divestment of its holdings of approximately 28.85% interest in Hektar REIT for approximately $37.4 million. ▶ FCT announced the appointment of Mr Tan Siew Peng (Darren) as Non-Executive and Independent director of FCAM with effect from 26 September 2023. Mr Tan is also a member of the ARCC and a member of the NRC of the Manager. for FY2023 on 25 October 2023. FCT reported strong FY2023 results on robust operating performance and strategic portfolio re-constitution. DPU for FY2023 was 12.150 cents. FCT maintained a healthy financial position with stable portfolio appraised valuation, and it achieved higher retail portfolio committed occupancy, improved rental reversions and sustained growth in tenants’ sales. ▶ FCT achieved the highest 5-Star rating in the 2023 GRESB Real Estate Assessment for the third consecutive year and was awarded with an “A” rating for Public Disclosure Report. ▶ FCT announced the completion of the divestment of Changi City Point on 31 October 2023. ▶ FCT announced the retirement of Dr Cheong Choong Kong as a Non-Executive and Independent Director, Chairman of the Board and member of the ARCC and the NRC of FCAM with effect from 1 November 2023. ▶ FCT announced the appointment of Ms Koh Choon Fah, a Non-Executive and Independent director of FCAM, as the chairperson of the Board with effect from 1 November 2023. ▶ FCT also announced the appointment of Mr Tan Siew Peng (Darren), a Non-Executive and Independent director of FCAM, as the chairman of the ARCC with effect from 1 November 2023. December 2023 ▶ FCT announced the completion of the divestment of its entire interest in Hektar REIT on 6 December 2023. 8 Frasers Centrepoint Trust Annual Report 2023 5-Year Performance At A Glance Revenue ($ million) 3.6% Net Property Income ($ million) 2.7% 341.1 356.9 369.7 246.6 258.6 265.6 196.4 164.4 139.3 110.9 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 Distribution per Unit (cents) Net Asset Value per Unit ($) 0.6% 0.4% 12.070 12.085 12.227 12.150 2.21 2.27 2.30 2.33 2.32 9.042 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 Total Assets ($ million) Aggregate Leverage* (%) 7.3% 6.3%-point 5,898.8 5,941.4 6,375.2 35.9 32.9 33.3 33.0 39.3 3,610.9 3,883.4 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 * In accordance with Property Funds Appendix, the aggregate leverage included FCT’s proportionate effective interest in the deposited property value and borrowings in Sapphire Star Trust (“SST”) which owns Waterway Point and the proportionate effective interest in Gold Ridge Pte. Ltd. (“GRPL”) which owns NEX. As at 30 September 2023, FCT owns 50.00% effective interest in SST and 25.50% effective interest in GRPL. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 9 Distribution per Unit by Financial Reporting Periods (cents) 5.996 6.089 6.136 6.091 6.130 6.020 3.020 3.137 3.000 2.913 3.060 4.372 1.610 FY2020* Total DPU: 9.042 FY2019 Total DPU: 12.070 FY2021* Total DPU: 12.085 FY2022* Total DPU: 12.227 FY2023* Total DPU: 12.150 Q1 | Q2 | Q3 | Q4 | 1H | 2H * FCT moved to half-yearly financial announcement and half-yearly distribution payment with effect from the second half of its financial year 2020. The announcement was made on 13 May 2020. This follows the amendment of SGX’s listing manual (Rule 705(2)) that allows issuers to move to half yearly reporting which took effect from 7 February 2020. FCT and its subsidiaries (“FCT Group”) For the Financial Year ended 30 September FY2019 FY2020 FY2021 FY2022 FY2023 Selected Income Statement and Distribution Information ($‘000) Gross Revenue Net Property Income Distribution to Unitholders 196,386 139,283 118,718 164,377 110,888 101,146 341,149 246,567 204,674 356,931 258,597 208,190 369,723 265,586 207,745 Selected Balance Sheet Information ($ million) Total Assets Total Borrowings1 Net Assets Value of Portfolio Properties Other Financial Indicators Distribution per Unit (cents)3 Net Asset Value per Unit ($)3 Aggregate Leverage4 Interest Coverage (times)5 Market Capitalisation ($ million)6 3,610.9 1,042.0 2,471.0 2,846.0 12.070 2.21 32.9% 5.74 3,058.6 3,883.4 1,255.0 2,538.3 2,749.5 9.042 2.27 35.9% 6.34 2,675.5 5,898.8 1,815.0 3,918.8 5,506.5 12.085 2.30 33.3% 4.77 3,857.3 5,941.4 1,815.0 3,964.1 5,516.0 12.227 2.33 33.0% 5.19 3,693.5 6,375.2 2,212.1 3,973.2 5,545.52 12.150 2.32 39.3% 3.47 3,741.5 1 Excludes proportionate share of borrowings of SST and GRPL. The total borrowings in FY2023 includes approximate A$238.1 million floating rate loans swapped to $220.0 million fixed rate loans. 2 The investment properties in FY2023 are Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), Changi City Point, Tampines 1, Tiong Bahru Plaza, Century Square, Hougang Mall, White Sands, and Central Plaza. The 50.00% effective interest in Waterway Point and the 25.50% effective interest in NEX are held as investments in joint ventures. Changi City Point has been reclassified to “Assets held for sale”, following FCT’s announcement relating to the divestment of the property on 30 August 2023. The divestment was completed on 31 October 2023. Includes the distribution to be paid for the last quarter for FY2019. Includes the distribution to be paid for the second half for FY2020, FY2021, FY2022 and FY2023. In accordance with Property Funds Appendix, the aggregate leverage included FCT’s proportionate effective interest in the deposited property value and borrowings in SST which owns Waterway Point and the proportionate effective interest in GRPL which owns NEX. As at 30 September 2023, FCT owns 50.00% effective interest in SST and 25.50% effective interest in GRPL. 3 4 5 From FY2020, ratio is calculated by dividing the trailing 12 months earnings before interest, tax, depreciation and amortisation (excluding effects of any fair value changes of derivatives and investment properties, and foreign exchange translation), by the trailing 12 months interest expense and borrowing-related fees as defined in the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore. As the Group has not issued any hybrid securities, Adjusted Interest Coverage Ratio (“ICR”) is identical to the ICR. 6 Based on the closing price and issued Units as at the last trading day for the respective financial year. 10 Frasers Centrepoint Trust Annual Report 2023 Unit Price Performance Unit Price and Total Return Performance in FY2023 The performance of the Singapore REIT sector, including FCT, continued to be hampered by the multiple increases in the Federal Funds Target Rates (“Fed Fund Rates”) by the United States Federal Reserve (the “Fed”) during the year under review. Within the period of October 2022 to September 2023, the Fed Fund Rates were raised six times from a range of 3.00% to 3.25% to 5.25% to 5.50%. The rate hikes as well as the commentaries from the Fed officials consequentially led to an increase in cost of borrowings, which in turn exerted downward pressure on and increased volatility in the unit price of interest rate-sensitive assets like REITs and bonds. Please refer to the chart below on FCT’s unit price performance versus the FTSE ST All-share Real Estate Investment Trust Index (“FTSE REIT Index”) and the FTSE Straits Times Index (“STI Index”) between 1 October 2022 and 29 September 2023 (last trading day of the month). 1-Year FCT Unit Price Performance versus STI Index and FTSE REIT Index 110% 105% 100% 95% 90% 85% 80% 102.78 100.92 91.15 October 2022 November 2022 December 2022 January 2023 February 2023 March 2023 April 2023 May 2023 June 2023 July 2023 August 2023 September 2023 Source: Bloomberg FCT SP Equity | STI Index | FTSE REIT Index FCT’s unit price closed at $2.19 on 29 September 2023. For the one-year period ended 29 September 2023, FCT registered 0.92% in unit price rise and a total return of 6.70%. FCT’s unit price outperformed the FTSE REIT Index, which registered a decline of 8.85% and a total return of -2.80% but lagged the performance of the STI Index which registered a unit price rise of 2.78% and a total return of 7.93% during the same period. Over the three-year period, FCT registered -8.15% in unit price change and a total return of 7.40%, compared with -19.80% and -2.97%, respectively, for the FTSE REIT Index. Over a five-year period, FCT’s unit price change and total return stood respectively at -3.21% and 23.37%, which outperformed the FTSE REIT Index. FCT achieved a total return of approximately 333.34% since its inception, and outperformed both the FTSE REIT Index and the STI Index, as shown in the table below: 1 Year 1 October 2022 to 29 September 2023 3 Years 1 October 2020 to 29 September 2023 5 Years 1 October 2018 to 29 September 2023 Since inception 5 July 2006 to 29 September 2023 Price Change % Total Return1 % Price Change % Total Return1 % Price Change % Total Return1 % Price Change % Total Return1 % FCT FTSE REIT Index FTSE Straits Times Index 0.92 -8.85 2.78 6.70 -2.80 7.93 -8.15 -19.80 30.44 7.40 -2.97 47.14 -3.21 -16.34 -1.22 23.37 13.70 19.84 109.26 -0.72 34.80 333.34 143.57 129.75 Source: Bloomberg 1 Assumes the distributions are reinvested. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 11 Monthly Trading Performance in FY2023 FCT’s trading volume and the unit closing price for each month in FY2023 is shown in the chart below. The average daily trading volume (the “ADTV”) in FY2023 was 2.78 million units (FY2022: 3.05 million units), which is about 8.8% lower compared with the same period in the previous year. Trading Performance in FY2023 2.22 2.25 2.29 2.21 2.08 76.3 2.10 2.03 84.9 49.1 49.8 51.8 48.9 50.7 2.13 75.9 2.19 2.17 2.24 2.19 66.4 48.5 53.8 38.2 October 2022 November 2022 December 2022 January 2023 February 2023 March 2023 April 2023 May 2023 June 2023 July 2023 August 2023 September 2023 Total volume traded in the month (million of units) | Closing price as at the last trading day of the month ($) Source: Bloomberg Trading Performance In The Past Five Financial Years The table below shows the historical trading information of FCT units in the past five financial years. The market capitalisation of FCT stood at approximately $3.741 billion as at 29 September 2023: Opening price ($) Closing price ($)1 Highest closing price ($) Lowest closing price ($) Total volume traded (million Units) Average daily trading volume (million Units) Market capitalisation ($ billion)2 FY2019 FY2020 FY2021 FY2022 FY2023 2.27 2.74 2.85 2.14 478.5 1.916 3.059 2.73 2.39 3.04 1.64 820.8 3.283 2.675 2.39 2.27 2.64 2.08 1,006.5 3.978 3.857 2.26 2.17 2.48 2.13 769.2 3.053 3.693 2.15 2.19 2.35 1.92 694.5 2.789 3.741 Source: Bloomberg 1 Based on the closing price as at the last trading day for the respective financial year. 2 Based on the closing price and issued Units as at the last trading day for the respective financial year. 12 Frasers Centrepoint Trust Annual Report 2023 Letter To Unitholders Date: 31 October 2023 To: The Unitholders of Frasers Centrepoint Trust Dear Unitholders, We are pleased to present Frasers Centrepoint Trust and its subsidiaries’ (“FCT” and the “FCT Group”) Annual Report and Sustainability Report for the financial year ended 30 September 2023 (“FY2023”). Over the past year, global investors, corporates, and individuals have endured an emotional rollercoaster ride, with markets oscillating between optimism for a cut in interest rates and the disillusionment over successive rate increases by the U.S. Federal Reserve (the “Fed”). Based on the “higher for longer” narrative from the Fed, interest rates are expected to remain elevated in the near to mid-term and this will continue to exert pressure on financing costs and the prices of yield-sensitive assets like the REITs. Despite the challenging macroeconomic environment where the cost of capital has surged and access to equity market became prohibitive, the Manager remained steadfast in its objective to deliver steady distribution returns to FCT and its Unitholders. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 13 Proactive Portfolio Re-constitution To Reinforce Market Position During the year, FCT completed two acquisitions and made announcements for one asset enhancement initiative (“AEI”) and two divestments. These transactions and AEI are strategic steps that enable FCT to recycle its capital effectively, bolster its financial position and portfolio strength while reinforcing its leading market position in the Singapore suburban retail sector. Acquisitions The two acquisitions were the joint acquisition of a 50.00% interest in one of Singapore’s largest suburban malls - NEX - together with FCT’s sponsor Frasers Property Limited (“Frasers Property”), of which FCT’s effective interest is 25.50%; and the acquisition of an additional 10.00% interest in Waterway Point that brought FCT’s total interest in the mall to 50.00%. The $529.8 million acquisition of the 25.50% effective interest in NEX and the $131.3 million acquisition of the additional 10.00% interest in Waterway Point are strategic moves to expand FCT’s presence in Singapore’s suburban retail market and to strengthen the quality of its portfolio. With the addition of NEX, FCT now owns or jointly-own four of the ten largest prime suburban malls1 in Singapore which are NEX, Northpoint City, Causeway Point and Waterway Point. AEI FCT announced the commencement of the $38.2 million AEI at Tampines 1 in the third quarter of FY2023. The AEI aims to create a refreshed retail experience with the introduction of new retail brands and services, improve asset yield and unlock value through space re-configuration. The projected return on investment (“ROI”) of the AEI is approximately 8% from higher rent income and savings from sustainable features that reduce energy consumption and carbon emission. The new AEI space attracted strong leasing interest with over 94% in pre- commitment. The AEI is progressing on schedule to complete in the fourth quarter of FY2024, ahead of the year-end festive season. Divestments In the final quarter of FY2023, FCT announced the divestment of Changi City Point for $338.0 million and the divestment of its interests in Hektar REIT for $39.3 million. Both divestments were part of the Manager’s strategic portfolio review to strengthen FCT’s portfolio resilience and are in line with the Manager’s long term objective of creating value for FCT Unitholders. The estimated net gain and capital gain from the divestment of Changi City Point are approximately $10.9 million and $20 million, respectively. Growing from strength to strength Since FY2018, FCT has undergone significant portfolio re-constitution that enabled its portfolio to grow 2.3 times in AUM from approximately $2.8 billion in FY2018 to $6.9 billion, through a series of acquisitions of interests in the AsiaRetail Fund portfolio and in Waterway Point; the divestments of three non-core assets (Bedok Point, Anchorpoint and YewTee Point); the acquisition of the interest in NEX and a further interest in Waterway Point. These transactions have further strengthened the resilience of FCT’s portfolio while sharpening its focus on the Singapore suburban retail market. Strong FY2023 Results FCT delivered a strong set of results and stable distribution returns for its Unitholders in FY2023. Gross revenue in FY2023 was $369.7 million and NPI was $265.6 million, up 3.6% and 2.7% year-on-year, respectively, and new-highs for FCT. The growth drivers were higher rental income underpinned by higher average portfolio occupancy rate, higher rentals achieved for new and renewed leases during the year, step-up rents from current leases and higher contribution from atrium leasing. The growth in NPI was offset by higher operating expenses due mainly to increased maintenance and utility expenses and a rise in staff costs. Stable DPU Distribution to Unitholders in FY2023 was $207.7 million, down by 0.2%, due mainly to higher interest expense that increased 73.0% year-on-year to $81.0 million from $46.8 million in FY2022. The increase in interest expense was attributed to higher interest rates as well as additional loans drawn down to finance the acquisitions of the interests in NEX and Waterway Point. This translates to a DPU of 12.150 cents for FY2023 which is marginally lower compared to 12.227 cents in FY2022. Healthy financial position; poised to strengthen FCT maintains a healthy financial position. Its aggregate leverage as at 30 September 2023 stood at 39.3%. This is expected to decline to 36.1% on a pro forma basis, after the proceeds from the divestments of Changi City Point and the interest in Hektar REIT are used to pare down debts. 1 The ten largest suburban prime malls (in descending order of net lettable area) are Jurong Point, NEX, JEM, Parkway Parade, Northpoint City, City Square Mall, IMM, Causeway Point, Westgate and Waterway Point. Source: CISTRI, as at September 2023. Suburban malls are defined as malls outside Central Core and malls not allied with major tourist nodes (e.g. Sentosa, Changi Airport). 14 Frasers Centrepoint Trust Annual Report 2023 Letter To Unitholders The aggregate appraised value of FCT’s retail portfolio remained relatively stable with gains mainly from NEX and Causeway Point and smaller gains from five other malls which are Tampines 1, Northpoint City North Wing, Waterway Point, Tiong Bahru Plaza and Hougang Mall. The capitalisation rates used by the independent valuers remained unchanged from last year. All-round improvement in operational metrics On the operating front, the portfolio delivered a robust operating performance with higher committed occupancy, better rental reversions and sustained growth in tenants’ sales. The committed occupancy of the retail portfolio was up 2.2%-points year-on-year to 99.7% as at 30 September 2023. The average portfolio rental reversion came in at 4.7% (on an average- to-average basis), higher than the 4.2% in FY2022. Portfolio tenants’ sales improved 7.3% year-on- year and shopper traffic was up 24.7% year-on-year. The improved tenants’ sales helped improve the average occupancy cost to 15.6% from 16.2% in FY2022, providing headroom for rental growth. Making Progress On The Sustainability Journey and ESG Sustainability is a key focus in FCT’s strategy. The Manager works closely with Frasers Property towards achieving the Group’s goal of net- zero carbon by 2050. For the third consecutive year, FCT achieved a 5-Star rating in the 2023 GRESB Real Estate Assessment. We believe this is a meaningful benchmark that enables our stakeholders to compare FCT’s performance with its global real estate peers in the same sector. FCT has also received an “A” rating from the MSCI ESG Ratings in September 2023, for the second consecutive year. Positive On Outlook Of The Suburban Retail Sector In Singapore FCT is leveraging on innovation and technology to improve efficiency in its operations and reduce costs. The initiatives include food waste management, data analytics for lifts and the water valve efficiency initiative. The projected savings of these initiatives when fully implemented is approximately $1 million per annum. All of FCT’s 10 retail malls and one office property have achieved BCA Green Mark certifications with five of them rated Platinum, three rated GoldPlus and three rated Gold on the new stricter Green Mark 2021 framework (GM: 2021). On green financing, the proportion of green loan in FCT’s total borrowing stood at 55.6% as at 30 September 2023, up from 31.9% last year. The proportion of green loans is expected to increase as we refinance non-green loans with green loans going forward. Other initiatives include rolling out charging points for electric vehicles in FCT malls to support green mobility and the installation of solar power panels at FCT malls to provide green energy. FCT is also expanding its efforts in community engagement. During the year, various initiatives such as the Inclusion Champion Program and Paint it Forward for the children were implemented in FCT malls. These initiatives aim to build stronger inclusiveness and a sense of belonging with FCT’s stakeholders in the community. We invite you to read the details in the Sustainability Report which is an integral part of this Annual Report. The Manager expects interest rate movements and rising operating expenses to remain the key factors affecting FCT’s performance. Barring unforeseen circumstances, the Manager expects the average cost of borrowing for FCT to be above 4%. For operating expenses, the Manager will continue to work on cost optimisation initiatives, and to remain vigilant on the movement of energy prices and contracted service fees. It will adopt appropriate hedging strategies for energy contracts to mitigate the impact on its operating expenses. While the macroeconomic environment remains challenging, we remain positive on the outlook of the suburban retail sector in Singapore, based on several factors such as Singapore’s population growth, sustained healthy consumer spending on essentials, healthy demand for prime suburban retail space and tight supply in the retail market. We believe FCT is well- positioned to benefit from these factors going forward. Acknowledgements We welcome Mr Ho Kin San and Mr Darren Tan who were appointed to the board as Non-Executive and Independent Directors on 18 July 2023 and 26 September 2023, respectively. Kin San brings on board over 30 years of experience in corporate real estate legal practice across all property sectors. Darren has extensive leadership and management experience in finance and investments. Their appointment to the board will bolster and diversify the breadth of expertise on the board. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 15 We thank Chee Wah, who will be retiring from the FCAM board as Director at the end of 2023. Chee Wah has made immense contributions in providing guidance and advice to the board and management during his tenure. This includes helping FCT navigate through the difficult times of the pandemic in 2020 and providing invaluable views on the transactions which helped re-constituted the enlarged FCT’s portfolio. We wish Chee Wah all the best in his future endeavours. I am retiring from the Board and Ms Koh Choon Fah will replace me as Chairperson on 1 November 2023. It has been an eventful 7 years, an exciting and educational experience for me personally and a challenging but productive period for Management, Board, Company and the Trust, a 7-year period of growth despite extensive business stoppages on account of COVID-19. I am confident Choon Fah and her fellow directors will take FCAM and FCT to greater heights, ably supported as always by an experienced, supremely capable and dedicated Management team. We thank all our stakeholders, Unitholders, tenants, shoppers and business partners included, for their continuing support. Cheong Choong Kong Chairman Richard Ng Chief Executive Officer 16 Frasers Centrepoint Trust Annual Report 2023 Board of Directors As at 30 September 2023 Date of appointment as Director 18 May 2016 Length of service as Director (as at 30 September 2023) 7 years and 4 months Board committees served on • Audit, Risk and Compliance Committee (Member) • Nominating and Remuneration Committee (Member) Academic & Professional Qualifications • Bachelor of Science, Adelaide University • Master of Science, Australian National University Major appointments (other than Directorships) • Chairman, NUS Mind Science Centre Advisory Board Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Chairman, Oversea-Chinese Banking Corporation Limited • Chairman, Singapore Broadcasting Corporation • Chairman, NUS Council • Deputy Chairman and CEO, Singapore • Doctor of Philosophy, Australian National Airlines Limited Dr Cheong Choong Kong, 82 Chairman, Non-Executive and Independent Director Mr Ho Chai Seng, 63 Non-Executive and Independent Director University • Doctor of Science (Honorary), Australian National University • Degree of Doctor of the University (Honorary), Adelaide University Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Listed REITs/Trusts • Nil Others • Nil Date of appointment as Director 30 June 2017 Length of service as Director (as at 30 September 2023) 6 years and 3 months Board committees served on • Nominating and Remuneration Committee (Chairman) • Audit, Risk and Compliance Committee (Member) Academic & Professional Qualifications • Bachelor of Commerce, University of Windsor, Canada • Member, Singapore Institute of Directors • Member, International Bankers Association of Japan Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Listed REITs/Trusts • Nil Others • Nil Major appointments (other than Directorships) • Executive Director and Country Manager, United Overseas Bank Ltd, Tokyo Branch Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Vice President, BHF-Bank, New York • Assistant General Manager, BHF-Bank, Singapore • General Manager, DBS Bank, London • General Manager, United Overseas Bank Ltd. London • Executive Director, United Overseas Bank Ltd. Singapore Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 17 Major appointments (other than Directorships) • Nil Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Deputy CEO of CapitaLand Mall Asia Limited (formerly known as CapitaMalls Asia Limited) • CEO of the Manager of CapitaLand Mall Trust (formerly known as CapitaMall Trust) Others • Previously on the Board of Directors of the managers of CapitaLand Mall Trust (which is listed on the Singapore Exchange Securities Trading Limited) and CapitaLand Malaysia Mall Trust (which is listed on Bursa Malaysia) Major appointments (other than Directorships) • Partner, Allen & Gledhill LLP Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Nil Date of appointment as Director 9 February 2017 Length of service as Director (as at 30 September 2023) 6 years and 7 months Board committees served on • Audit, Risk and Compliance Committee (Member) • Nominating and Remuneration Committee (Member) Academic & Professional Qualifications • Bachelor of Science (Estate Management) (Honours), National University of Singapore • Master of Real Estate, National University of Singapore Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Listed REITs/Trusts • Nil Others • ALPS Pte. Ltd. (formerly known as Agency for Healthcare Supply Chain Pte. Ltd.) • Frasers Hospitality International Pte. Ltd. • Frasers Property (Singapore) Pte. Ltd. Date of appointment as Director 18 July 2023 Length of service as Director (as at 30 September 2023) 2 months Board committees served on • Audit, Risk and Compliance Committee (Member) • Nominating and Remuneration Committee (Member) Academic & Professional Qualifications • Master of Laws (Commercial and Corporate Law), King’s College London • Postgraduate Practical Course in Law, Board of Legal Education • Bachelor of Laws (Hons), National University of Singapore Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Listed REITs/Trusts • Nil Others • Nil Mr Ho Chee Hwee, Simon, 62 Non-Executive and Non-Independent Director Mr Ho Kin San, 60 Non-Executive and Independent Director 18 Frasers Centrepoint Trust Annual Report 2023 Board of Directors As at 30 September 2023 Date of appointment as Director 3 January 2020 Length of service as Director (as at 30 September 2023)1 3 years and 9 months Board committees served on • Nil Academic & Professional Qualifications • Bachelor of Economics, Monash University • Bachelor of Laws, Monash University • Fellow of CPA Australia • Fellow of Chartered Accountant of Singapore Present Directorships in other companies (as at 30 September 2023) Listed companies • Samudera Shipping Line Ltd Major appointments (other than Directorships) • Chief Executive Officer, Frasers Property Retail, Frasers Property (Singapore) Pte. Ltd.1 Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Senior Executive Vice President, Head of Retail and Commercial Division, Frasers Property Limited • Chief Executive Officer of Frasers Commercial Asset Management Ltd, manager of Frasers Commercial Trust • Chief Executive Officer of BNP Paribas Peregrine (Singapore) Ltd., investment banking arm of BNP Paribas Singapore Mr Low Chee Wah, 58 Non-Executive and Non-Independent Director Listed REITs/Trusts • Nil Others • President, Real Estate Investment Trust Association of Singapore (REITAS) • Chairman, Audit, Risk and Governance Committee, Dover Park Hospice • Board Member, Singapore River One Limited Date of appointment as Director 1 October 2019 Length of service as Director (as at 30 September 2023) 4 years Board committees served on • Audit, Risk and Compliance Committee (Chairperson) • Nominating and Remuneration Committee (Member) Academic & Professional Qualifications • Bachelor of Science (Estate Management) (Honours), National University of Singapore • Master of Arts (Business Administration), University of Georgia (Athens)/United States of America • Fellow, Royal Institute of Chartered Surveyors • Fellow, Singapore Institute of Surveyors & Valuers Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Listed REITs/Trusts • Nil Others • Edmund Tie Holdings Pte. Ltd. • New Horizons Holdings Pte. Ltd. • CPG Corporation Pte Ltd • Maxwell Chambers Pte. Ltd. Major appointments (other than Directorships) • Global Governing Trustee, Urban Land Institute, USA • Chairperson of Nominations Committee, Urban Land Institute Singapore Council, Singapore • Management Board Member, National University of Singapore Institute of Real Estate and Urban Studies, Singapore • Council Member and Chairperson of Professional Development Committee, Council for Estate Agencies, Singapore • Adjunct Professor in Dean’s Office, College of Design and Engineering, National University of Singapore Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Chief Executive Officer, Edmund Tie & Company (SEA) Pte. Ltd. • Chief Operating Officer, DTZ Debenham Tie Leung (SEA) Pte. Ltd. (now known as Edmund Tie & Company (SEA) Pte. Ltd.) • Executive Committee Member and Chairperson, Urban Land Institute Singapore Council, Singapore Ms Koh Choon Fah, 65 Non-Executive and Independent Director 1 Mr Low is retiring from the Board of FCAM with effect from 1 January 2024. This is in line with his planned retirement on the same day as Chief Executive Officer of Frasers Property Retail, a division of Frasers Property. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 19 Date of appointment as Director 1 March 2022 Length of service as Director (as at 30 September 2023) 1 year and 7 months Board committees served on • Nil Academic & Professional Qualifications • Master of Business Administration, National University of Singapore • Bachelor of Science - Estate Management (Honours), National University of Singapore Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Ms Soon Su Lin, 63 Non-Executive and Non-Independent Director Listed REITs/Trusts • Nil Others • Nil Major appointments (other than Directorships) • Chief Executive Officer of Frasers Property Singapore • Member of the Integrated Development Council, Urban Land Institute, Singapore • Management Committee Member of Real Estate Developers’ Association of Singapore (REDAS) • Chairperson of REDAS’ Green & Sustainable Sub-Committee Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Nil Past major appointments • Chief Executive Officer (Development) of Frasers Property Holdings (Thailand) Co., Ltd. • Chief Executive Officer (Development) of TCC Assets (Thailand) Co., Ltd. • Chief Executive Officer of Orchard Turn Developments Pte. Ltd Date of appointment as Director 26 September 2023 Major appointments (other than Directorships) • Chief Investment Officer, Raffles Medical Board committees served on • Audit, Risk and Compliance Committee Group Ltd. (Member) • Nominating and Remuneration Committee (Member) Academic & Professional Qualifications • Bachelor of Accountancy (First Class Honours), Nanyang Technological University – Accountancy • Stanford Executive Program, Stanford Business School, Stanford University, Palo Alto, California, USA • Chartered Financial Analyst, Association of Investment Management and Research Present Directorships in other companies (as at 30 September 2023) Listed companies • Nil Listed REITs/Trusts • Nil Others • Director, Inland Revenue Authority of Singapore, Tax Academy of Singapore • Director, Singapore Management University, School of Accountancy Advisory Board Past Directorships in listed companies held over the preceding 3 years (from 01 October 2020 to 30 September 2023) • Director, Bank of Ningbo Co., Ltd. Past major appointments • Chief Financial Officer, Oversea-Chinese Banking Corporation Limited • Council Member and Chairman of Investment Committee, Institute of Singapore Chartered Accountants • Member, Alumni Advisory Board, Nanyang Technological University, Nanyang Business School • Adjunct Professor, Nanyang Technological University, Nanyang Business School • Director, OCBC Property Services Private Limited • Director, OCBC Overseas Investments Pte Ltd • Director, OCBC Wing Hang Bank (China) Limited • Director, OCBC Bank (Malaysia) Berhad • Director, Lion Global Investors Limited • Director, MaxWealth Asset Management Limited Mr Tan Siew Peng (Darren), 52 Non-Executive and Independent Director 20 Frasers Centrepoint Trust Annual Report 2023 Trust Management Team Richard is responsible for the overall business direction, investment strategies and operations of FCT. He leads the FCAM management team to ensure that FCT’s finance, investment, asset management, investor relations and other plans and initiatives are executed successfully. Richard has over 30 years of experience in the Singapore and regional property markets, spanning the areas of marketing, investment, asset and REIT management. Prior to joining Frasers Property, he was Executive Director, Asset Management, at PGIM (Singapore) Pte. Ltd. where he oversaw the portfolio asset management comprising retail and commercial properties in Singapore and Malaysia. Richard has held senior management appointments during his 14 years at the CapitaLand Group, including 10 years at CapitaLand Mall Trust (CMT) where he was part of the team that oversaw the initial public offering of CMT in 2002. At CMT, Richard was the Head of Asset Management, responsible for the overall performance of CMT’s assets. Richard holds a Master of Science degree in Real Estate and a Bachelor of Science (Honours) degree in Estate Management, both from the National University of Singapore. Audrey is responsible for the financial, taxation, treasury and compliance functions of FCT. She has over 20 years of financial experience in locally-listed and multinational companies. Prior to joining FCAM, she was Head of Finance (Frasers Property Retail) at Frasers Property Limited. Prior to joining Frasers Property Limited, she held various positions at CapitaLand Limited (including its subsidiaries) for more than 10 years. Audrey holds a Bachelor’s degree of Business (Accountancy) from RMIT and is a Certified Practising Accountant with CPA Australia. Mr Richard Ng Chief Executive Officer Ms Audrey Tan Chief Financial Officer Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 21 Pauline is responsible for the management of FCT’s portfolio of retail assets in Singapore. She has over 20 years of real estate experience. Prior to joining FCAM, she was the Executive Director at PGIM Real Estate (“PGIM”) and was responsible for the portfolio management of PGIM Real Estate AsiaRetail Fund and another private equity co- investment which together own several malls in Singapore and Malaysia. Before PGIM, Pauline was Vice-President, Investment Management of GIC Real Estate (GIC RE), where she was responsible for investment and asset management in the office, retail and residential sectors in various Asia Pacific markets and supported GIC RE senior management in global portfolio reporting, asset strategy and planning. Prior to GIC RE, she held various roles at DBS and Jones Lang LaSalle in Singapore and Hong Kong. Pauline holds a Master of Business Administration degree from the University of Western Australia and a Bachelor’s degree in Business Administration from the National University of Singapore. Fung Leng is responsible for FCT’s investor relations function. He has more than 15 years of experience in the field of investor relations and is responsible for the communications and forging relations between FCT and its Unitholders, the investment community, and the media. He also provides market intelligence and research to the management team and oversees the sustainability reporting for FCT. Fung Leng holds a Master of Science degree in Industrial and Systems Engineering and a Bachelor’s degree in Mechanical Engineering (Honours), both from the National University of Singapore. Ms Pauline Lim Head, Investment & Asset Management Mr Chen Fung Leng Vice President, Investor Relations 22 Frasers Centrepoint Trust Annual Report 2023 Investor Relations Open and Transparent Communication With Unitholders Frasers Centrepoint Asset Management Ltd., as Manager of Frasers Centrepoint Trust, is committed to maintaining open and transparent communication with its Unitholders, media and investors. 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 The AGM and EGM are important communication platforms between the board of directors, the management of FCAM and the Unitholders. FCT convened its 14th AGM on 17 January 2023 at the Intercontinental Singapore. This was the first physical meeting since the lifting of the COVID-related restrictions by the authorities. All resolutions tabled at the AGM were duly passed, and the results were announced on SGX-ST and FCT’s website on the same day of the AGM. The minutes of the AGM were also published on SGX-ST and FCT’s website on 15 February 2023. Proactive Investor Outreach FCAM proactively engages investors and research analysts through various channels to extend its outreach and to raise the profile of FCT among investors. FCT participated in multiple major investor conferences, investor outreach events and post-results meetings organised by the banks and securities brokerage firms. The total number of investors FCT engaged with in FY2023 was 486 (FY2022: 435). This refers to the aggregate number of investors and analysts (by person) FCT engaged in FY2023, including physical and virtual meetings), of which approximately 21.8% (FY2022: 28.5%) were new to FCT1. The table below shows the list of investor relations events and activities during FY2023: Timeframe Key Investor Relations Events 1 October - 31 December 2022 • FCT 2H FY2022 post financial results analysts’ briefing call on 26 October 2022 • FCT 2H FY2022 post financial results investors’ call hosted by Goldman Sachs on 1 January - 31 March 2023 1 April - 30 June 2023 1 July - 30 September 2023 26 October 2022 • Frasers Bangkok Day on 22 November 2022 • DBS Pulse of Asia Conference on 10 January 2023 • FCT 1Q FY2023 post business updates analysts’ briefing call on 27 January 2023 • FCT Non-deal roadshow investor call hosted by DBS on 10 February 2023 • FCT 1H FY2023 post results analysts’ briefing call on 26 April 2023 • FCT 1H FY2023 post results investors’ call hosted by JP Morgan on 26 April 2023 • Non-deal roadshow hosted by DBS, BofA, Maybank and OCBC between 9 May 2023 and 15 May 2023 • FCT 3Q FY2023 post business updates analysts’ briefing call on 26 July 2023 • FCT 3Q FY2023 post business updates investors’ call hosted by BofA on 26 July 2023 • Citi ASEAN Financials and Real Estate Investment Forum on 16 August 2023 • Frasers Property Group Kuala Lumpur Non-deal Roadshow on 23 August 2023 Subsequent event: The 2H FY2023 and full year results were announced on 25 October 2023. 1 Includes new-to-FCT and investors whom FCAM has not met or engaged in the preceding 24 months, including through virtual meetings. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 23 Financial Calendar 15th Annual General Meeting 1Q FY2024 Business Update (period ending 31 December 2023) 1H FY2024 Financial results announcement (period ending 31 March 2024) Distribution payment for period 1 October 2023 to 31 March 2024 3Q FY2024 Business Update (period ending 30 June 2024) 2H FY2024 and Full Year Financial results announcement (period ending 30 September 2024) Distribution payment for period 1 April 2024 to 30 September 2024 * Subject to changes. Accolade Coverage By Equity Research Houses FY2024 22 January 2024 January 2024* April 2024* May 2024* July 2024* October 2024* November 2024* 5-Star rating in the 2023 GRESB Real Estate Assessment FCT maintained its top 5-Star rating in the 2023 GRESB Real Estate Assessment for the third consecutive year, with a total score of 92 points (2022: 92). It ranked first in the Singapore Retail category with a rating of “A” and a score of 100 in public disclosure. As at 12 November 2023, there were 18 equity research firms which provided equity research coverage on FCT. The research firms which cover FCT (in alphabetical order) are: BofA Securities J.P. Morgan Securities Singapore 1. 2. CGS-CIMB Securities (Singapore) 3. Citi Research 4. CLSA 5. Daiwa Capital Markets 6. DBS Bank 7. Goldman Sachs (Singapore) 8. HSBC 9. 10. Macquarie Research 11. Maybank Research 12. Morgan Stanley Asia (Singapore) 13. Morningstar Equity Research 14. OCBC 15. Phillip Securities Research (Singapore) 16. RHB 17. UBS Securities 18. UOB Kay Hian 24 Frasers Centrepoint Trust Annual Report 2023 Investor Relations Credit Ratings By Credit Rating Agencies Credit rating agencies Long term issue rating Outlook Rating date Last review date Moody’s Investors Service S&P Global Ratings Baa2 BBB Stable Stable 30 January 2023 13 April 2020 11 August 2023 23 June 2023 ESG Rating FCT maintained its “A” rating from MSCI ESG Ratings. Agency ESG Credit Impact Score Date MSCI ESG Ratings Rating action date: 20 June 2023 Last report update: 29 September 2023 Enquiries Unit Registrar For general enquiries on FCT, please contact: Mr Chen Fung Leng Vice President, Investor Relations Frasers Centrepoint Asset Management Ltd. 438 Alexandra Road, #21-00 Alexandra Point Singapore 119958 Phone: (65) 6276 4882 Fax: (65) 6272 8776 Email: ir@fraserscentrepointtrust.com Boardroom Corporate & Advisory Services Pte Ltd 1 HarbourFront Avenue Keppel Bay Tower, #14-07 Singapore 098632 Phone: (65) 6536 5355 Fax: (65) 6536 1360 Website: www.boardroomlimited.com Causeway Point, Singapore Operations Review Waterway Point, Singapore Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 27 Lease Renewals and Rental Reversion A total of 509 leases in the Retail Portfolio1 and 10 leases at Central Plaza were renewed or newly leased in FY2023. The retail leases accounted for 780,682 sf or 31.0% of Retail Portfolio1 NLA. The NLA of the 10 reversionary leases at Central Plaza in FY2023 represented 26.6% of its total NLA. average rent includes the step-up rents during the respective lease tenure. All malls recorded positive reversion between 1.8% and 10.3% due to active asset and property management of the portfolio properties, and the strong leasing demand due to the properties’ strategic location in populous residential catchments with direct connectivity to public transport including buses and MRT trains. Positive rental reversion for Retail Portfolio in FY2023 The rental reversion for the Retail Portfolio1 in FY2023 was positive at 4.7% based on the variance between the average rent of the incoming lease and the average rent of the outgoing lease (“average-to-average”). The Leasing demand for suburban retail malls remained robust in FY2023, particularly by food and beverage and services tenants. The retail market continues to be supported by below historical-average retail pipeline in the near term, and retailers remain cautiously optimistic, prioritising well-managed and well-located malls. Summary of Lease Renewals and Rental Reversion in FY2023 (Excluding newly created and reconfigured area) Property NEX Causeway Point Waterway Point Northpoint City North Wing2 Tiong Bahru Plaza Changi City Point Century Square Hougang Mall White Sands Retail Portfolio1 Central Plaza Number of renewals / new leases 150 63 55 66 32 33 31 41 38 509 10 Area in sf 302,987 118,575 63,610 70,680 40,907 40,527 39,529 57,617 46,250 780,682 38,158 As % of NLA of property FY2023 rental reversion (average-to-average) 49.1% 28.3% 17.1% 33.9% 19.1% 19.4% 19.5% 38.4% 36.0% 31.0% 26.6% 4.0% 5.4% 5.1% 6.9% 3.4% 10.3% 4.2% 4.3% 1.8% 4.7% 2.1% 1 Excludes Tampines 1 due to ongoing AEI works. 2 Includes Yishun 10 Retail Podium. 28 Frasers Centrepoint Trust Annual Report 2023 Operations Review Lease Expiry Profile Well-spread lease expiry profile The portfolio lease expiry from FY2024 to FY2028 and beyond, and the lease expiry by property in FY2024 are presented in the tables below. The leases have a typical lease duration of 3 years although certain key or anchor tenancies may be of longer tenure. FCT has a well-spread portfolio lease expiry profile with low concentration risk in any particular financial year. The leases expiring over the next two years in FY2024 and FY2025 account for 29.3% and 27.3% of FCT’s gross rental income (“GRI”) respectively. As at 30 September 2023, the weighted average lease expiry3 (“WALE”) of the Retail Portfolio4 stood at 1.96 years (FY2022: 1.87 years) by NLA and 1.82 years (FY2022: 1.78 years) by GRI. The WALE (by GRI) of the retail leases4 commenced in FY2023, based on duration to lease expiry as at 30 September 2023 was 2.64 years (FY2022: 2.55 years). The WALE (by NLA) of these leases is 2.76 years (FY2022: 2.66 years). These new leases account for 34.1% (FY2022: 33.7%) of the total GRI of the Retail Portfolio4 as at 30 September 2023. The aggregate NLA of the leases in the Retail Portfolio4 due for renewal in FY2024 is 708,137 sf. Retail Portfolio4 Lease Expiry as at 30 September 2023 Lease expiry as at 30 September 2023 FY2024 FY2025 FY2026 FY2027 Number of expiring leases NLA of expiring leases (sf) Expiries as % of total leased area Expiries as % of GRI 516 708,137 28.2% 29.3% 517 621,981 24.7% 27.3% 500 698,405 27.8% 29.7% 106 259,882 10.3% 9.2% Calculation based on committed leases as at 30 September 2023; vacant floor area is excluded. FY2028 and beyond 21 225,550 9.0% 4.5% Total 1,660 2,513,955 100.0% 100.0% Lease Expiry as at 30 September 2023 NEX Causeway Point Waterway Point Northpoint City North Wing5 Tiong Bahru Plaza Changi City Point Century Square Hougang Mall White Sands Retail Portfolio4 Central Plaza FCT Portfolio4 Number of expiring leases NLA of expiring leases in sf As % of leased area of property As % of total GRI of property 67 77 62 56 49 55 61 52 37 516 7 523 98,017 162,019 97,690 67,128 71,293 52,376 75,102 58,146 26,366 708,137 25,233 733,370 15.9% 38.7% 26.3% 32.3% 33.3% 25.3% 37.4% 38.8% 20.6% 28.2% 18.5% 27.7% 16.6% 36.6% 29.5% 31.4% 30.8% 28.7% 44.0% 42.6% 24.9% 29.3% 20.9% 29.1% Calculation based on committed leases as at 30 September 2023; vacant floor area is excluded. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 29 Portfolio Tenants’ Sales, Shopper Traffic and Occupancy Cost Tenants’ sales improved 7.3% year-on-year The total tenants’ sales of the Retail Portfolio6 in FY2023 stood at $2,215.6 million, which is 7.3% higher than $2,065.6 million achieved in FY2022 and averaged approximately 17% above pre-COVID-19 levels. Brick- and-mortar retail stores and restaurants once again showed resilience and the significant sales growth over 2023 is a testament to ongoing consumer demand for in-store experiences. Sales growth varies across the trade categories The top five trade categories which constituted 78.5% of the Retail Portfolio4 GRI traded well. Food & Beverage, the largest trade category representing 37.5% (by GRI) of the Retail Portfolio, registered stronger sales year-on-year in FY2023, particularly for Restaurants, Cafes and Food Courts with new tenants showing stronger performance. Beauty & Healthcare, the second largest trade category representing 14.5% (by GRI), also displayed higher year-on-year sales in FY2023, largely driven by higher demand for beauty salons and cosmetics as people returned to work. Retail Portfolio6 Tenants’ Sales Year-on-Year Comparison 11.7% 1.3% 15.8% 12.6% 3.1% 6.2% 4.4% 4.9% 4.3% 7.1% 6.1% 10.9% October November December January February March April May June July August September FY2022 | FY2023 Occupancy cost refers to the ratio of gross rental (including turnover rent) paid by the tenants to the tenant’s sales turnover (excluding GST). The average occupancy cost of the Retail Portfolio6 for FY2023 and the preceding five financial years are presented in the chart on the right. As tenants’ sales saw a continued improvement in FY2023 with the significant scale back of COVID-19 restrictions, the average occupancy cost of the Retail Portfolio6 moderated to 15.6% in FY2023 which is within a healthy and sustainable range for suburban retail malls. Retail Portfolio Average Occupancy Cost 16.6% 17.0% 19.2% 17.5% 16.2% 15.6% FY2018 FY2019 FY2020 (Affected by Circuit Breaker) FY2021 FY2022 FY2023 3 Computation of WALE is as follows: WALE (by NLA) = Sum of (remaining lease tenure x NLA of individual leases)/total leased area. WALE (by GRI) = Sum of (remaining lease tenure x GRI of individual leases) / total GRI. Remaining lease tenure = time period between reporting date and the lease expiry date. 4 Excludes Tampines 1 due to ongoing AEI works. 5 6 Excludes Tampines 1 due to ongoing AEI works and NEX (acquired only in FY2023). Includes Yishun 10 Retail Podium. 30 Frasers Centrepoint Trust Annual Report 2023 Operations Review Leases With Gross Turnover Rent and Step-Up Clauses Approximately 96.4% (FY2022: 91.8%) of the Retail Portfolio7 leases include step-up rent clauses that provide for annual rental increment of between 1% and 2% over the lease term. 93.3% (FY2022: 92.3%) of the committed leases include GTO rent clauses, which the tenants would typically pay between 0.5% and 1.0% of their sales as part of the gross rent. Portfolio Occupancy The Retail Portfolio7 committed occupancy stood at 99.7% as at 30 September 2023, up 2.2%-points year-on-year. The majority of the malls show a year-on-year improvement in occupancy. The improvement in portfolio occupancy is in tandem with leasing activity picking up as Singapore re- opens and embarks on its journey towards endemic living. Northpoint City North Wing, Singapore The committed occupancy by property is tabulated in the table below: Property NEX Causeway Point Waterway Point Northpoint City North Wing9 Tiong Bahru Plaza Changi City Point Century Square Hougang Mall White Sands Retail Portfolio7 Central Plaza Calculation based on committed leases as at 30 September 2023; vacant floor area is excluded. As at 30 September 2023 As at 30 September 2022 100.0% 99.6% 100.0% 99.7% 99.7% 99.2% 99.0% 100.0% 99.5% 99.7% 95.3% Not applicable8 100.0% 99.0% 100.0% 99.0% 93.7% 86.8% 98.4% 96.4% 97.5% 88.9% Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 31 Shopper Traffic Shopper traffic of the Retail Portfolio7 continues its recovery trajectory as Singapore reverts its Disease Outbreak Response System Condition (DORSCON) level from yellow to green in February 2023 after more than three years of living with heightened health alerts due to COVID-19. COVID-19 measures were further scaled back, with masks no longer required on public transport as well as the stepping down of the use of TraceTogether and SafeEntry. This marks a significant progress towards normalization as the aggregate shopper traffic of the Retail Portfolio7 improved by 24.7% from 137.1 million in FY2022 to 171.0 million in FY2023. All malls recorded recovery in shopper footfall in FY2023. Retail Portfolio Shopper Traffic Year-On-Year Comparison Percentage indicates year-on-year increase over FY2022 50.2% 42.4% 29.2% 28.8% 31.9% 25.7% 13.0% 13.2% 42.0% 12.1% 15.9% 11.1% October November December January February March April May June July August September FY2022 | FY2023 Shopper Traffic by Property (million) FY2023 FY2022 Increase/ (Decrease) Causeway Point Waterway Point Northpoint City10 Tiong Bahru Plaza Changi City Point Century Square Hougang Mall White Sands Note: Total may not add up due to rounding differences. 25.9 25.5 56.7 16.5 10.5 12.4 12.7 10.7 21.4 19.3 47.6 13.4 7.5 10.2 9.4 8.4 21.0% 32.1% 19.1% 23.1% 40.0% 21.6% 35.1% 27.4% 7 Excludes Tampines 1 due to ongoing AEI works. 8 FCT acquired the 25.50% interest in NEX in FY2023, hence FY2022 data for NEX is not included. 9 10 Combined shopper traffic of Northpoint City North Wing and South Wing. Includes Yishun 10 Retail Podium. 32 Frasers Centrepoint Trust Annual Report 2023 Operations Review NEX, Singapore Retail Portfolio Trade Mix Food & Beverage is the largest trade category accounting for 30.1% (FY2022: 30.2%) of total NLA and 37.5% (FY2022: 38.0%) of total GRI. The second and the third largest trade categories by GRI are Beauty & Healthcare at 14.5% (FY2022: 15.0%) and Fashion & Accessories at 12.0% (FY2022: 11.5%). Trade Mix as at 30 September 2023 Trade Category (by descending order of GRI) As % of total NLA As % of total GRI Food & Beverage Beauty & Healthcare Fashion & Accessories Sundry & Services Supermarket & Grocers Information & Technology Leisure & Entertainment Homeware & Furnishing Jewellery & Watches Department Store Books, Music, Arts & Craft, Hobbies Electrical & Electronics Sports Apparel & Equipment Education Vacant Retail Portfolio11 30.1% 10.7% 11.3% 6.0% 11.0% 2.5% 7.0% 3.3% 0.9% 4.5% 3.6% 3.0% 3.2% 2.6% 0.3% 100.0% 37.5% 14.5% 12.0% 8.2% 6.3% 2.9% 2.7% 2.7% 2.4% 2.4% 2.3% 2.2% 2.1% 1.8% 0.0% 100.0% Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 33 NEX, Singapore Top 10 Tenants By GRI The top ten tenants collectively accounted for 19.5% (FY2022: 18.4%) of the total GRI as at 30 September 2023. Our largest tenant NTUC FairPrice, the operator of FairPrice supermarkets, Kopitiam food courts, Unity Pharmacy and various food and beverage establishments in FCT malls, accounted for 5.6% (FY2022: 4.1%) of the portfolio GRI. Top 10 Tenants by GRI as at 30 September 2023 Tenants NTUC FairPrice1 BreadTalk Group2 Dairy Farm Group3 Courts (Singapore) Pte. Ltd. Hanbaobao Pte Ltd4 Metro (Private) Limited5 R E & S Enterprises Pte Ltd6 Oversea-Chinese Banking Corporation Limited Shaw Theatres Pte. Ltd. Beauty One International7 Total for Top 10 Trade Category Supermarket & Grocers, Food & Beverage, Beauty & Healthcare Food & Beverage Supermarket & Grocers, Beauty & Healthcare Electrical & Electronics Food & Beverage Department Store, Beauty & Healthcare Food & Beverage Sundry & Services Leisure & Entertainment Beauty & Healthcare As % of total NLA As % of total GRI 8.1% 5.6% 2.7% 1.7% 1.8% 0.9% 2.2% 1.2% 0.7% 2.5% 0.9% 22.7% 3.2% 2.0% 1.4% 1.4% 1.3% 1.3% 1.3% 1.0% 1.0% 19.5% 1 Includes FairPrice supermarkets (FairPrice, FairPrice Finest, FairPrice Xtra), Kopitiam food courts (Kopitiam and Cantine by Kopitiam), Unity Pharmacy, Pezzo and Crave. Includes Food Republic, Food Junction, BreadTalk, Toast Box, The Food Market and Din Tai Fung. Includes Cold Storage, Guardian Health & Beauty and 7-Eleven. 2 3 4 Operator of Mcdonald’s. 5 6 Operator of Ichiban Boshi, Ichiban Sushi, Kuriya Japanese Market, Tsukimi Hamburg, Yakiniku-GO and &JOY Japanese Food Street. Includes Victoria Facelift, Yun Nam Hair Care, Dorra Slimming, London Weight Management, New York Skin Solutions and Shakura 7 Pigmentation Beauty. Includes Metro and Clinique. 11 Excludes Tampines 1 due to ongoing AEI works. Financial Review Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 35 Investment Property Portfolio As at 30 September 2023, the investment property portfolio of FCT and its subsidiaries (“FCT Group”) comprises Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), Changi City Point, Tampines 1, Tiong Bahru Plaza, Century Square, Hougang Mall, White Sands and Central Plaza. The properties are strategically located in suburban regions of Singapore and have a diversified tenant base covering a wide variety of trade sectors. On 29 August 2023, FCT entered into a sale and purchase agreement to divest Changi City Point (“CCP”) and accordingly, CCP was reclassified to “Assets held for sale” as at 30 September 2023. The divestment was completed on 31 October 2023. Investments Held In Associate and Joint Ventures Sapphire Star Trust On 8 February 2023, following the completion of acquisition of additional 10.00% interest in Sapphire Star Trust (“SST”), a private trust that owns Waterway Point, a suburban shopping mall located in Punggol, FCT’s interest in SST increased from 40.00% to 50.00% with a total acquisition outlay of approximately $74.4 million (including transaction costs and completion adjustments). FCT jointly controls the venture with another joint venture partner and unanimous consent is required for all decisions over the relevant activities. Hektar Real Estate Investment Trust On 22 September 2023 and 4 October 2023, FCT entered into sale and purchase agreements (as amended, supplemented and/or varied) with unrelated third parties1 in relation to the proposed divestment of the entire interest of 30.97% Hektar Real Estate Investment Trust (“H-REIT”) and accordingly, investment in H-REIT was reclassified to “Assets held for sale” as at 30 September 2023. The divestment was completed on 6 December 2023. NEX Partners Trust On 26 January 2023, FCT and FCL Emerald (1) Pte. Ltd. (“FCL Emerald”), a wholly-owned subsidiary of Frasers Property Limited (“FPL”), established NEX Partners Trust (“NP Trust”). FCT and FCL Emerald respectively hold 51.00% and 49.00% interest in each of NP Trust and Frasers Property Coral Pte. Ltd. (“FP Coral”), the trustee-manager of NP Trust. FP Coral, in its capacity as the trustee-manager of NP Trust, entered into a conditional sale and purchase agreement with Mercatus Tres Pte. Ltd. to purchase 168,764,576 ordinary shares, representing 50% of the total share capital of Gold Ridge Pte. Ltd. (“GRPL”), which owns NEX, a suburban shopping mall located in Serangoon Central. The transaction was completed on 6 February 2023 with a total acquisition outlay of approximately $332.2 million (including transaction costs and completion adjustments) as of 30 September 2023. Upon completion, FCT owns an effective interest of 25.50% in GRPL. 1 The purchasers are Dato’ Ong Choo Meng, Hextar Rubber Sdn. Bhd. and Aventura Sdn. Bhd. 36 Frasers Centrepoint Trust Annual Report 2023 Financial Review Financial Performance Of Investment Property Portfolio The tables presented below show the gross revenue, property expenses and net property income for FCT Group’s investment property portfolio for the Financial Year ended 30 September 2023 (“FY2023”) and Financial Year ended 30 September 2022 (“FY2022”). FY2023 1 October 2022 - 30 September 2023 FY2022 1 October 2021 - 30 September 2022 Increase / (Decrease) Gross Revenue $’000 Causeway Point Northpoint City North Wing1 Changi City Point2 Tampines 1 Tiong Bahru Plaza Century Square Hougang Mall White Sands Central Plaza Other investment properties3 Total Property Expenses $’000 Causeway Point Northpoint City North Wing1 Changi City Point2 Tampines 1 Tiong Bahru Plaza Century Square Hougang Mall White Sands Central Plaza Other investment properties3 Total Net Property Income $’000 Causeway Point Northpoint City North Wing1 Changi City Point2 Tampines 1 Tiong Bahru Plaza Century Square Hougang Mall White Sands Central Plaza Other investment properties3 Total 93,255 57,126 25,563 46,435 42,228 32,424 31,564 30,878 10,250 - 369,723 23,313 15,690 9,698 13,083 10,269 8,748 9,269 10,464 3,603 - 104,137 69,942 41,436 15,865 33,352 31,959 23,676 22,295 20,414 6,647 - 265,586 89,007 54,847 23,935 47,622 41,358 31,456 30,509 28,769 9,414 14 356,931 20,560 13,956 9,365 13,206 10,345 9,609 9,368 8,524 3,593 (192) 98,334 68,447 40,891 14,570 34,416 31,013 21,847 21,141 20,245 5,821 206 258,597 4.8% 4.2% 6.8% (2.5%) 2.1% 3.1% 3.5% 7.3% 8.9% N.M. 3.6% 13.4% 12.4% 3.6% (0.9%) (0.7%) (9.0%) (1.1%) 22.8% 0.3% N.M. 5.9% 2.2% 1.3% 8.9% (3.1%) 3.1% 8.4% 5.5% 0.8% 14.2% N.M. 2.7% Includes Yishun 10 Retail Podium. 1 2 Reclassified to “Assets held for sale” as at 30 September 2023. The divestment of Changi City Point was completed on 31 October 2023. 3 For FY2022, other investment properties mainly related to the adjustments made for the divested malls i.e. Bedok Point, Anchorpoint and YewTee Point. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 37 Performance Comparison Between FY2023 and FY2022 Gross revenue for FY2023 was $369.7 million, an increase of $12.8 million or 3.6% from FY2022. The increase was mainly due to higher gross rent arising from higher occupancy rates, higher rental achieved for new and renewed leases and staggered rent across most malls and increase in atrium income with the resumption of atrium events with effect from 29 March 2022. It was partially offset by the lower gross revenue at Tampines 1 due to asset enhancement initiatives. Property expenses for FY2023 was $104.1 million, an increase of $5.8 million or 5.9% from FY2022. The increase was mainly due to higher maintenance and utility expenses, and higher staff costs during the year. It was partially offset by property tax refunds received during the financial year. Net property income for FY2023 was therefore higher at $265.6 million, an increase of $7.0 million or 2.7% from FY2022. Net non-property expenses for FY2023 of $116.5 million was $33.5 million or 40.3% higher than FY2022 mainly due to higher interest expense of $34.2 million attributed to the higher interest rate and additional loan drawdown to finance the acquisition of an additional 10.00% interest in SST and effective 25.50% interest in GRPL, as well as increase in asset management fees arising from higher net property income and higher total assets with the acquisition of an additional 10.00% interest in SST and effective 25.50% interest in GRPL. This was partially offset by the one-off grant income recognised in FY2023. Total return included: ▶ Share of results of associate of $5.9 million was $7.0 million higher than FY2022 due to the share of H-REIT’s fair value gain on investment properties of $3.6 million (FY2022: share of fair value loss on investment properties of $4.1 million). ▶ Impairment loss on investment in associate of $4.0 million recognised in FY2023. ▶ Share of results of joint ventures of $51.2 million was $26.6 million higher than FY2022 due to recognition of an additional 10.00% share of SST’s results with effect from 8 February 2023 and 51.00% share of NP Trust’s results with effect from 6 February 2023. Included in the share of results of joint ventures, was a one-off gain of $13.6 million recognised upon the completion of the acquisition of an additional 10.00% interest in SST and effective 25.50% interest in GRPL as well as share of revaluation gain from SST and NP Trust of $4.9 million. ▶ In FY2023, the Group recognised a net change in fair value of investment properties of $9.9 million. ▶ No provision has been made for tax at the Trust level as well as for certain subsidiaries as it is assumed that 100% of the taxable income available for distribution to Unitholders in the next financial year will be distributed. The Tax Ruling grants tax transparency to FCT, Tiong Bahru Plaza Trust 1, White Sands Trust 1, Hougang Mall Trust 1, Tampines 1 Trust 1, Century Square Trust 1, Century Square Trust 2 and Central Plaza Trust 1 on their taxable income that is distributed to Unitholders such that the aforementioned entities would not be taxed on such taxable income. The Group’s tax expense of $0.3 million mainly arose from under-provision of prior year tax expenses of certain subsidiaries within the Group. 38 Frasers Centrepoint Trust Annual Report 2023 Financial Review Distribution Distribution to Unitholders for FY2023 was $207.7 million, which was $0.4 million or 0.2% lower compared to FY2022. The breakdown and comparison of the Distribution per Unit (“DPU”) for FY2023 and FY2022 are presented below: FY2023 1 October 2022 - 30 September 2023 FY2022 1 October 2021 - 30 September 2022 Increase / (Decrease) DPU (cents) First half (1 October – 31 March) Second half (1 April – 30 September) Full Year (1 October – 30 September) 6.1301 6.0202 12.150 6.1363 6.0914 12.227 (0.1%) (1.2%) (0.6%) 1 2 3 4 In determining the distribution relating to first half of FY2023, FCT released $1.7 million of its tax-exempt income available for distribution to Unitholders which had been retained in second half of FY2022 and retained $3.0 million of its current period’s tax-exempt income available for distribution to Unitholders. In determining the distribution relating to second half of FY2023, FCT released $3.0 million of its tax-exempt income available for distribution to Unitholders which had been retained in first half of FY2023 and retained $1.1 million of its current period’s tax-exempt income available for distribution to Unitholders. In determining the distribution relating to first half of FY2022, FCT retained $4.8 million of its taxable income available for distribution to Unitholders. In determining the distribution relating to second half of FY2022, FCT released $4.8 million of its taxable income available for distribution to Unitholders which had been retained in first half of FY2022 and retained $1.7 million of its tax-exempt income available for distribution to Unitholders. Total Assets, Net Asset Value Per Unit and Net Tangible Asset Per Unit As at 30 September 2023, the total assets stood at $6,375.2 million, an increase of $433.8 million from $5,941.4 million a year ago. The increase was mainly attributed to the acquisition of an additional 10.00% interest in SST and effective 25.50% interest in GRPL. FCT’s net assets stood at $3,973.2 million as at 30 September 2023, an increase of $9.1 million compared with $3,964.1 million a year ago. The Net Asset Value (“NAV”) and the Net Tangible Asset (“NTA”) of FCT Group decreased slightly to $2.32 per Unit from $2.33 per Unit a year ago, primarily due to a larger base of total issued and issuable units. The NAV and NTA per Unit are calculated based on the following: NAV/NTA ($’000) Total issued and issuable Units (‘000) NAV/NTA per Unit ($) 30 September 2023 30 September 2022 3,973,235 1,712,039 2.32 3,964,077 1,703,765 2.33 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 39 Appraised Value of Properties Independent valuations of the investment properties, including investment property reclassified to assets held for sale were undertaken by Jones Lang LaSalle Property Consultants Pte Ltd and Savills Valuation and Professional Services (S) Pte Ltd. The Manager believes that these independent valuers possess appropriate professional qualifications and relevant experience in the location and category of the investment properties being valued. Valuation methods used for the investment properties include the capitalisation approach and discounted cash flow analysis (and direct comparison method as a cross-check) in determining the fair values of the properties. Annual valuations are required by the Code on Collective Investment Schemes. The total appraised value of FCT Group’s investment property portfolio1 as at 30 September 2023 stood at $5,545.5 million, stable as compared with $5,516.0 million a year ago. The appraised values of Causeway Point, Northpoint City North Wing, Tampines 1, Tiong Bahru Plaza, Hougang Mall and Central Plaza saw an increase of between $1.5 million and $13.0 million. Valuation of Century Square, White Sands, Changi City Point and Yishun 10 Retail Podium remained the same compared to a year ago. Investment properties in Singapore Causeway Point Northpoint City North Wing Yishun 10 Retail Podium2 Tampines 1 Tiong Bahru Plaza Century Square Hougang Mall White Sands Central Plaza Sub-total Asset held for sale in Singapore Changi City Point3 Total Investment properties held through joint venture Waterway Point4 NEX5 As at 30 September 2023 As at 30 September 2022 Appraised Value ($ million) Capitalisation rate Appraised Value ($ million) Capitalisation rate 1,336.0 782.0 34.0 771.0 657.0 559.0 435.0 429.0 217.5 5,220.5 325.0 5,545.5 1,315.0 2,100.0 4.75% 4.75% 3.75% 4.75% 4.75% 4.75% 4.75% 4.75% 3.75% 5.00% 4.50% 4.50% 1,323.0 778.0 34.0 764.0 655.0 559.0 433.0 429.0 216.0 5,191.0 325.0 5,516.0 1,312.5 - 4.75% 4.75% 3.75% 4.75% 4.75% 4.75% 4.75% 4.75% 3.75% 5.00% 4.50% - Include Changi City Point which has been reclassified to “Assets held for sale” as at 30 September 2023. 1 2 Yishun 10 Retail Podium comprises 10 strata-titled retail units at Yishun 10 Cinema Complex. As at 30 September 2023, the valuation was based on the capitalisation approach, discounted cash flow analysis and direct comparison method. 3 Based on independent valuation of Changi City Point as at 31 July 2023 in connection with the divestment of Changi City Point to Changi Times Square Pte. Ltd. The divestment was completed on 31 October 2023. 4 As at 30 September 2023, FCT owns 50.00% of Sapphire Star Trust which holds Waterway Point. The value reflected in this table is the total value of the retail property and FCT’s 50.00% interest amounts to $657.5 million. 5 As at 30 September 2023, FCT owns an indirect interest of 25.50% of Gold Ridge Pte. Ltd. which holds NEX. The value reflected in this table is the total value of the retail property and FCT’s 25.50% interest amounts to $535.5 million. 40 Frasers Centrepoint Trust Annual Report 2023 Capital Resources Overview Sources of Funding The Manager of FCT continues to maintain a prudent financial structure and adequate financial flexibility to ensure that it has access to funding and capital to drive growth. The Manager proactively manages and monitors FCT Group’s cash flow position, debt maturity profile, funding costs, interest rate and overall liquidity position to stay competitive. We maintain a strong capital structure that is supported by diversified sources of funding for financing of operations and investment requirements. FCT Group taps on the debt and equity market for its funding needs. The Manager maintains active relationship with local and foreign banks which are located in Singapore. The principal bankers of FCT Group are BNP Paribas, Citibank, N.A., Singapore Branch, Credit Industriel et Commercial, Singapore Branch, DBS Bank Ltd., Malayan Banking Berhad, Singapore Branch, Oversea-Chinese Banking Corporation Limited and Standard Chartered Bank. Credit Ratings FCT has corporate credit ratings from S&P and Moody’s. FCT has been assigned a corporate rating of “BBB” with a stable outlook by S&P and a corporate rating of “Baa2” with a stable outlook by Moody’s. In addition, FCT’s Medium Term Note Programme (“MTN Programme”) has been rated “BBB” by S&P. As at 30 September 2023, FCT Group has a total capacity of $6,696.0 million from its sources of funding, of which $2,212.1 million or 33.0% has been utilised. The following table summarises the capacity and the amount utilised for each of the sources of funding: Sources of Funding Revolving credit facilities Revolving credit facilities Medium Term Note Programme Bank borrowings Bank borrowings Multicurrency Debt Issuance Programme Total Type Unsecured Secured Unsecured Unsecured Secured Unsecured Capacity ($’million) Amount Utilised ($’million) % Utilised 1,199.1 298.8 1,000.0 580.0 618.1 3,000.0 6,696.0 765.1 178.9 70.0 580.0 618.1 - 2,212.1 63.8% 59.9% 7.0% 100.0% 100.0% 0.0% 33.0% Sustainable Financing Debt Profile In December 2021, FCT set up a sustainable finance framework to demonstrate its commitment towards responsible investment by improving its portfolio’s ESG performance. FCT’s goal is to certify 80.0% of its existing buildings by 2024 to at least Building Construction Authority Green Mark Gold certification. In FY2023, we secured three sustainability linked loans totalling approximately $506.0 million. The proportion of green loans in FCT’s total borrowing rose to 55.6%1 as at 30 September 2023 from 31.9% last year. In FY2023, FCT Group entered into new bank facilities totalling $916.0 million to re-finance the borrowings and to fund acquisitions. To mitigate interest rate risk, interest rate swaps and cross-currency interest rate swaps of notional $624.0 million were executed. As at 30 September 2023, 63.0% of the total borrowings are on fixed interest rates. On 30 September 2023, FCT Group’s total debt stood at $2,212.1 million for which it comprised of $797.0 million secured bank borrowings, $1,345.1 million unsecured bank borrowings and $70.0 million unsecured Notes. The Interest Coverage Ratio (“ICR”) for the year ended was 3.47 times and FCT Group’s aggregate leverage stood at 39.3%. 1 The proportion of green loans in FCT’s total borrowing included FCT’s proportionate effective interest in SST which owns Waterway Point and the proportionate effective interest in GRPL which owns NEX. As at 30 September 2023, FCT owns 50.00% effective interest in SST and 25.50% effective interest in GRPL. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 41 Key Financial Metrics Total Borrowings1 Aggregate Leverage2 Interest Coverage Ratio3 % of debt hedged to fixed rate interest Average All-In Cost of Debt4 Average Debt Maturity 30 September 2023 30 September 2022 $2,212.1 million 39.3% 3.47 times 63.0% 3.8% 2.3 years $1,815.0 million 33.0% 5.19 times 71.0% 2.5% 2.0 years 1 Excludes proportionate share of borrowings of SST and GRPL and includes approximate A$238.1 million floating rate loans swapped to 2 $220.0 million fixed rate loans. In accordance with Property Funds Appendix, the aggregate leverage included FCT’s proportionate effective interest in the deposited property value and borrowings in SST which owns Waterway Point and the proportionate effective interest in GRPL which owns NEX. As at 30 September 2023, FCT owns 50.00% effective interest in SST and 25.50% effective interest in GRPL. 3 Ratio is calculated by dividing the trailing 12 months earnings before interest, tax, depreciation and amortisation (excluding effects of any fair value changes of derivatives and investment properties, and foreign exchange translation), by the trailing 12 months interest expense and borrowing-related fees as defined in the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore. As the Group has not issued any hybrid securities, adjusted ICR is identical to the ICR of the Group. 4 Based on year-to-date cost of debt. FCT Group holds derivative financial instruments to hedge its interest rate risk exposure. The fair value of derivative for FY2023 as financial derivative assets and financial derivative liabilities were $18.5 million (2022: $25.1 million) and $9.2 million (2022: $NIL) as disclosed in the Financial Statements. Debt Maturity Profile As At 30 September 2023 < 1 year 1 to 2 years 2 to 3 years 3 to 4 years > 4 years Total Borrowings $2,212.1 million Amount ($’million) 353.5 513.5 553.0 318.0 474.1 2,212.1 As % of total borrowings 16.0% 23.2% 25.0% 14.4% 21.4% 100.0% $353.5 million (16.0% of total borrowings) $513.5 million (23.2% of total borrowings) $553.0 million (25.0% of total borrowings) $318.0 million (14.4% of total borrowings) $474.1 million (21.4% of total borrowings) Total Borrowings < 1 year 1 to 2 years 2 to 3 years 3 to 4 years > 4 years 42 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 1. Introduction This report has been prepared by Cistri Pte. Ltd. This report provides an independent review of the Singapore retail market, including the suburban shopping centre market. First, we consider the macro-economic drivers of the retail market, including economic growth, inflation, tourism, and population growth. Second, we look at the shopping centre market in more detail, providing an analysis of key market dynamics such as shopping centre supply, rental, and occupancy growth. Finally, we summarise key trends in the retail market. 2. Economic Context This section provides background information on the economic context at the global and Singapore levels. Current Situation & Near-Term Outlook The global economy has maintained its growth trajectory through 2023 despite various geopolitical events and shocks to the financial system. However, growth has been uneven across various countries and regions. On one hand, the United States (US) achieved year-on-year real gross domestic product (GDP) growth of around 2.4% in Q2 2023, notwithstanding continued monetary tightening. At the same time, the US unemployment rate has ranged between 3.4% and 3.8% throughout 2023 so far, on par with pre-pandemic lows in 2019. China also posted healthy year-on-year GDP growth of 5.2% for the first three quarters of 2023, aided by low base effects from 2022 when “Zero COVID” restrictions were still in place. Conversely, the European Union posted much lower GDP growth of around 0.4% year-on-year as at Q2 2023, as member countries continued to experience the impacts of economic and supply chain disruptions caused by the Russia-Ukraine War. For the full year of 2023, the International Monetary Fund (IMF) forecasts global GDP growth to reach 3.0%. The anticipated growth is lower than the 3.5% growth achieved in 2022 as the post-pandemic consumption rebound diminishes. Positively, global inflation is also forecast to decline this year in response to interest rate hikes, falling from 8.7% in 2022 to 6.9% in 2023. Several risks cloud the global economic outlook. Firstly, protracted geopolitical instability continues to present a risk for commodity price inflation. In addition to the Russia-Ukraine war, which has now lasted for over a year, war has also broken out between Israel and Hamas. There are concerns that an escalation of this war might lead to higher oil prices should major oil producers in the region also become involved. Second, China’s real estate market situation could have broader ramifications on the world’s second largest economy. Major Chinese property developers such as Evergrande and Country Garden remain in financial distress, facing challenges repaying various debt obligations. Should any of the major Chinese real estate developers face liquidation and cease operations, there could be negative knock-on effects on broader household wealth, employment and spending power amongst Chinese consumers. In Singapore, real GDP in Q3 2023 grew by 0.7% year-on-year according to the Ministry of Trade and Industry (MTI)’s advance estimates. The main drivers of this growth were hospitality services, supported by a recovery in tourism, and construction. In contrast, manufacturing showed a year-on-year decline in GDP, and has been the main reason Singapore has experienced such moderate growth. One bright spot within the manufacturing sector is the transport engineering sector, which has benefited from the recovery in air travel. For the full year of 2023, MTI is forecasting real GDP growth within a range of 0.5% – 1.5%. This is a moderate level of growth compared to the 2022 growth of 3.6%, reflecting Singapore’s exposure to the global economy and the challenges it is currently facing. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 43 Singapore Full-Year Real GDP Growth 2013 – 2031 2013 - 2022 Average Growth: 3.3% p.a. 8.9% 2023 - 2031 Average Growth: 2.3% p.a. Forecast 4.8% 3.9% 3.0% 3.6% 4.5% 3.6% 1.3% 3.6% 0.9% 2.5% 2.8% 2.6% 2.6% 2.5% 2.5% 2.4% 2.4% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 -3.9% Source: Focus Economics, Cistri Medium-Term Outlook The IMF forecasts global GDP growth to slow in 2024 to 2.9%, accompanied by a further decline in inflation to 5.8% as monetary tightening policies continue to take effect. For Singapore, the Monetary Authority of Singapore (MAS) expects growth to be modest in the first half of 2024 before picking up in the latter half. Nevertheless, there are several factors that could affect the medium-term economic outlook. The first factor concerns future monetary policy decisions. In 2023, the US Federal Reserve (“Fed”) led the continued tightening of monetary policy globally, with four rate hikes of 25 basis points each until September 2023. The Fed, along with other central banks, has since paused further rate hikes to assess the macroeconomic situation before making further policy changes. In Singapore, MAS has neither tightened nor loosened its exchange rate policy throughout 2023 so far. Central banks will need to carefully calibrate future monetary policy, namely the direction and magnitude of future interest rate changes, to achieve a balanced moderation of both inflation and growth. Over tightening could lead to a sharp contraction in global consumption, which would negatively impact Singapore’s export output. Conversely, not sufficiently tightening monetary policy risks worsening the high cost of living situation, which would also dampen spending. The second factor concerns the economic and demographic situation in China. Besides the challenges with its real estate market, China is facing an ageing and shrinking population, having recorded its first population decline in six decades in 2022. Youth unemployment has also risen, leading some young consumers to tighten their belts amid lower incomes and higher costs of living. If unaddressed, these factors could dampen the consumption power of one of Singapore’s largest trading partners. Long-Term Outlook The risk factors outlined above are all global in nature, and as a small and open economy, Singapore is not immune to them. Notwithstanding, Singapore’s good governance, business-friendly policies and political stability relative to many other countries provide strong fundamentals for the city-state to navigate future economic uncertainties adeptly. Furthermore, Singapore stands to benefit from its geographical proximity and connections to emerging Asian economies that are projected to be some of the fastest-growing markets in the coming years. Going forward, full-year GDP growth is forecast to average around 2.3% p.a. between 2023 and 2030. 44 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 3. Inflation Inflation in Singapore has slowed compared to 2022 and was estimated at around 5.1% year-on-year as at September 2023. Nevertheless, prices of goods and services continue to be on the rise. Product and service categories that registered the highest inflation rates in September 2023 include food and beverage services and transport driven by higher car prices. To help Singaporeans cope with the higher cost of living, the Singapore government announced enhancements to the Assurance Package and the Permanent GST Voucher Scheme at Budget 2023. In October 2023, the government also introduced a SGD 1.1 billion Cost of Living Support Package for households. These support measures provide cash payouts, rebates and vouchers to help cushion the impact of price increases and GST hikes. On the monetary policy front, MAS has not conducted any further policy tightening this year following five consecutive rounds of tightening between October 2021 and October 2022. For the full year of 2023, MAS forecasts overall inflation to average around 5%, down from 6.1% in 2022. Thereafter, inflation is projected to moderate further to 3.0% – 4.0% in 2024, including the impact of a further GST increase to 9%. Consumer Price Inflation 2013 – 2031 2013 - 2022 Average Growth: 1.2% p.a. 6.1% 4.8% 2023 - 2031 Average Growth: 2.3% p.a. Forecast 2.4% 1.0% 0.6% 0.4% 0.6% -0.5% -0.5% -0.2% 2.3% 3.0% 2.1% 1.8% 1.9% 1.8% 1.8% 1.8% 1.8% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: Focus Economics, Cistri Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 45 4. Population Growth Total Population Growth & Demographic Trends Singapore’s population rebounded by 5.0% from 2022 to 2023 to reach 5.92 million, extending the 3.4% growth in 2022 and exceeding the pre-pandemic population level. This growth was largely driven by foreigners, particularly foreign Work Permit holders who accounted for more than half of population growth in the year. Demand for foreign workers has increased this year due to service construction projects that have resumed after the pandemic. The population of residents (including Singapore Citizens and Permanent Residents) and white-collar expatriates has grown at a slower rate. Slower natural population growth among residents has contributed to this; Singapore’s resident fertility rates have dropped to an all-time low of around 1.04 and resident births have fallen over the years. The government has rolled out various policies over the years to address this, and most recently announced the following policies to be implemented from 1 January 2024: • Giving greater priority to first-time families in applications for four-room or smaller Standard Build-To-Order flats • across Singapore. Increasing the Baby Bonus Cash Gift and the Child Development Account First Step Grant for all eligible Singaporean children. There will also be a higher co-matching cap in the Child Development Account for the first and second child. • Extending government-paid paternity leave from two weeks to four weeks. Population Growth 2013 – 2031 2013 - 2023 Average Growth: 1.0% p.a. 5.0% 3.4% 2024 - 2031 Average Growth: 1.1% p.a. Forecast 1.6% 1.3% 1.2% 1.3% 0.1% 0.5% 1.2% 1.3% 1.2% 1.1% 1.0% 1.0% 1.0% 1.0% 1.0% -0.3% -4.1% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: SingStat, Cistri In the long term, we expect Singapore’s natural population growth among residents to remain low, leaving inward migration as the main driver of future population growth. The government recognises this and has maintained policies to keep Singapore open to global talent. One such policy is the Overseas Network and Expertise (One) Pass, a new work pass that was introduced in 2022 to attract top foreign talent with valuable networks and deep skills from across all industries. Overall, we forecast population growth to average around 1.1% p.a. in 2024 – 2031 to bring total population to around 6.4 million by 2031. 46 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview Geographical Distribution of Population Growth Future housing development influences the future geographical distribution of the population. Future population growth is generally expected to be stronger in the areas outside Central Core, with more housing units planned in these areas. The Outer West sector stands out with a residential housing pipeline of 29,000 units, or close to a quarter of total upcoming housing supply island-wide, either planned or under construction. The main contributor of future supply in the Outer West sector is Tengah, the Housing & Development Board’s (HDB) newest public housing estate with more than 22,000 units launched as at October 2023. The central fringe areas also have sizeable amounts of new housing planned or under construction. The Central West and Central East sectors both have around 18,000 new housing units in the pipeline, comprising a mix of large Built-to-Order public housing and private housing projects. Public & Private Housing Units Pipeline (Planned & Under Construction) by Sector From Q2 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 47 Household Income Growth Between 2012 and 2022, average household income per resident grew by around 3.5% p.a. on average. While incomes were negatively impacted by the COVID-19 pandemic in 2020, they have since rebounded exceeded pre- pandemic levels. Between 2021 and 2022, average household income per resident grew by around 7.5% year-on- year. Other than income from work, income from other sources (e.g. investments) and savings also influence the amount of disposable income that consumers have available to spend. Taking all of these elements into account, total personal disposable income in Singapore grew by around 5.1% p.a. on average between 2012 and 2022. Looking forward to the next few years, disposable income growth may slow as households opt to save more in response to economic uncertainties and the impending GST increase. The longer-term outlook for income growth will depend on the fundamental strength of the Singapore economy and its ability to continue attracting investments and companies that generate well-paying employment opportunities. 5. Tourism Growth While Singapore’s tourism sector has yet to fully bounce back from the pandemic, it has made steady progress towards recovery. Visitor arrivals between January and September 2023 have reached around 10.1 million, which is around 70% higher than the same period in 2022 but still around 40% below the same period in 2019. With China reopening in January 2023, China is now Singapore’s second biggest tourist source market, contributing around 1 million visitor arrivals between January and September 2023. However, this is only around one-third of the total arrivals during the same period in 2019. Positively, other major source markets like Indonesia and India have shown stronger recoveries for the same period, with arrivals from these countries having reached over 70% of 2019 total visitor arrivals. The steady recovery has been facilitated by the decisive steps that Singapore has taken to revive its tourism sector. These include removing all border restrictions, reopening Changi Airport Terminal 2 and resuming various business and leisure events. Besides these measures, the Singapore Tourism Board (STB) has rolled out multiple initiatives to raise Singapore’s profile as a global tourist destination under its “Made in Singapore” brand campaign, which aims to spotlight uniquely Singapore experiences. STB has partnered the Infocomm Media Development Authority to launch a $10-million Singapore On-Screen fund to “inspire travel to Singapore through TV series and films”. This joint fund will support international media and entertainment partners to produce global TV and film projects that feature Singapore as a destination for international audiences. STB also continues to partner the private sector to promote Singapore as a tourist destination. For instance, it is partnering Google’s ARCore for AI-powered guided tours within its Visit Singapore application. Another example is its partnership with Disney Cruise Line to homeport a brand-new Disney cruise ship exclusively in Singapore for at least five years from 2025. In the near future, visitor inflows from China will influence how quickly Singapore’s tourism sector can make a full recovery. In turn, the appetite for outbound tourism from China will depend on the level of consumer confidence given China’s ongoing property market, youth unemployment and other broader economic issues. Notwithstanding, other factors could support tourism growth in the coming year. Of particular note are upcoming major events such as Coldplay and Taylor Swift’s sold-out concerts, which are expected to bring in numerous visitors from the region. At the same time, Singapore’s tourism and economic agencies’ ongoing destination marketing initiatives remain important to continue attracting visitors from all source markets. 48 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 6. Retail Sales Current Situation Following a steep decline in 2020, retail sales began to recover in 2021 and have continued to grow over the past two years. Growth has been facilitated by consumers’ pent-up demand for shopping from the COVID-19 pandemic. Different product categories have seen sales rebound to differing extents. Some categories have seen sales return to or even exceed pre-pandemic levels, while others have yet to fully recover. Comparing total sales in the first eight months of the year, computer and telecommunications equipment sales have grown the most between 2019 and 2023. For the same period, sales in food retail and non-food discretionary categories such as jewellery, apparel, and household goods have also exceeded pre-pandemic levels in 2023. While groceries and household equipment sales remain well above pre-pandemic levels in 2023, they have fallen from the exceptional highs in 2022 amid the return to a post-pandemic normal. Nonetheless, sales of grocery essentials at supermarkets and hypermarkets have evidently been resilient since they remain well above pre-pandemic levels according to SingStat’s data. In contrast, department stores continue to perform relatively poorly amid changing shopper preferences. Department store sales for the first eight months of 2023 are around 16% below those in the first eight months of 2019. F&B sales at restaurants are also still slightly below pre-pandemic levels for the same period despite all dine- in restrictions having been lifted. Given the impact of the COVID-19 pandemic on retail in Singapore and the fact that the virus is now endemic, the chart below compares the growth in nominal retail sales by category between the first eight months of 2023 and the same period in 2019. Nominal Retail Sales Growth by Category First Eight Months of 2019 vs. First Eight Months of 2023 Computer & Telecommunications Equipment Watches & Jewellery Fast Food Outlets Wearing Apparel & Footwear Supermarkets & Hypermarkets Furniture & Household Equipment Recreational Goods Petrol Service Stations Food & Alcohol Restaurants Mini-marts & Convenience Stores Cosmetics, Toiletries & Medical Goods Optical Goods & Books Department Stores Food Caterers Source: SingStat, Cistri 44% 25% 24% 24% 23% 16% 14% 9% 8% -2% -3% -8% -14% -17% -17% 2023 Above 2019 Levels 2023 Below 2019 Levels In addition to growth in the volume of goods and service sold, price growth – or retail price inflation – also forms a component of nominal sales growth. The chart below provides a short-term comparison on the retail price changes of various retail categories between the previous and current year. Comparing the growth in nominal and real retail sales for the first eight months of 2022 and 2023 suggests that most retail product categories saw price increases between the two years. Food and beverage services categories, including restaurants, fast food outlets and other catering businesses, registered the highest rates of retail price inflation. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 49 Estimated Retail Price Inflation by Category First Eight Months of 2022 vs. First Eight Months of 2023 Fast Food Outlets Food Caterers Restaurants Mini-marts & Convenience Stores Food & Alcohol Supermarkets & Hypermarkets Recreational Goods Wearing Apparel & Footwear Department Stores Cosmetics, Toiletries & Medical Goods Watches & Jewellery Furniture & Household Equipment Optical Goods & Books Computer & Telecommunications Equipment Petrol Service Stations 8.4% 6.9% 6.8% 6.7% 6.5% 4.6% 3.5% 3.5% 2.5% 2.5% 2.3% 2.3% 0.6% -1.1% -7.2% Positive Retail Price Inflation Negative Retail Price Inflation Note: Calculated as the difference between the change in nominal retail sales and the change in real retail sales in each category Source: SingStat, Cistri Based on SingStat’s data up to August 2023, Cistri forecasts full-year nominal retail sales (excluding petrol and motor vehicles but including F&B) to grow by around 6.8% in 2023. Spending growth towards the end of the year may be supported by consumers frontloading some purchases ahead of the 2024 GST hike, especially for high- value items such as household goods and electronics. Medium-Term and Long-Term Outlook With a softer economic outlook in 2024 and the uncertainties around tourism from China, retail sales growth is forecast to slow. A sustained recovery in retail sales thereafter will depend on whether a stable economic environment with moderate inflation can be achieved, and how inbound tourism from China and other major markets can fully recover. Overall, between 2023 and 2031, total nominal retail sales growth is forecast to average around 4.8% p.a.. Nominal Retail Sales Growth 2013 – 2031 2013 - 2022 Average Growth: 0.5% p.a. 1.0% 0.8% 0.8% -0.5% -0.7% -2.0% -0.04% 16.5% 8.3% 9.7% 2023 - 2031 Average Growth: 5.1% p.a. Forecast 6.2% 5.0% 4.8% 4.1% 4.1% 4.1% 4.1% 4.1% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 -16.5% Note: Retail sales including F&B but excluding motor vehicles and petrol. Source: SingStat, Cistri Not all of this growth will accrue to bricks-and-mortar retail stores. However, data from SingStat suggests that the absolute levels of online retail and F&B sales have stabilised since 2022, and their share of total sales has begun to decline. This data suggests that the share of sales captured by physical retailers is recovering. 50 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview Our view is that physical stores will continue to play a critical role in facilitating most retail transactions over the next decade, particularly via omnichannel means. Furthermore, there will be variations in the pace of bricks-and- mortar sales recovery across different types of retail centres. High-quality, well-managed and well-located retail centres are likely to experience a faster uptick in sales. Online Proportion of Retail & F&B Sales (%) 2019 – 2023 31.5% 23.0% 26.9% 23.3% 13.6% 14.58% 14.5% 13.8% 8.3% 6.3% 2019 2020 2021 2022 2023 Retail Sales exc. Motor Vehicles | F&B Services Note: Based on sales for full year up to YTD August of each year Source: SingStat, Cistri 7. Retail Supply Cistri’s estimate of future retail floorspace includes announced retail projects, longer-term allowances for unannounced future projects, as well as an allowance for obsolescence. Supply forecasts for announced projects are based on the URA’s commercial projects pipelines and developers’ intentions. Total retail net lettable area (NLA) supply in Singapore reached 66.8 million sq ft by end 2022, approximately 300,000 sq ft higher than in 2021. By end 2023, total retail NLA is expected to reach around 67.6 million sq ft due to a combination of recent (e.g. Woodleigh Mall and Sengkang Grand Mall) and anticipated mall openings (e.g. One Holland Village), centre re-openings post-renovation (e.g. Changi Airport Terminal 2), and the opening of retail podiums (e.g. Guoco Midtown and Komo Shoppes). However, there has also been some mall closures. CapitaLand’s JCube was closed in August 2023 to make way for a mixed-use condominium, J’den, comprising of 38 storeys of residential units and two storeys of retail space. By 2027, total retail floorspace is forecast to increase to around 68.9 million sq ft, which translates to an average growth rate of approximately 0.6% p.a. from 2022. This includes both mall and non-mall floorspace, including retail spaces operated by HDB and hotels. Of the total floorspace supply by 2027, around 55% is expected to be in shopping centre format, and around 37% of the shopping centre floorspace is anticipated to be outside the Central Area. As a proportion of total retail floorspace, the share of shopping centre floorspace outside the Central Area is expected to remain stable at around 20% from 2022 to 2027. Retail Floorspace Supply Singapore, 2012 – 2027 (Million sq ft) 60.2 61.8 30.9 31.0 9.1 10.4 63.7 64.3 65.1 65.4 65.5 66.7 66.1 66.5 66.8 67.6 68.0 68.3 68.5 68.9 30.9 31.4 31.2 30.9 30.5 30.4 30.3 30.6 30.4 30.6 30.7 30.8 30.9 31.0 11.0 11.0 11.8 12.4 12.8 13.4 13.1 13.1 13.3 13.6 13.7 13.8 13.8 14.0 20.2 20.3 21.7 21.8 22.1 22.1 22.2 22.9 22.7 22.7 23.0 23.5 23.6 23.8 23.8 23.9 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total | Other Retail Formats | Shopping Centres Outside Central Area | Central Area Shopping Centres Forecast Note: Central Area includes Central Core and central fringe areas Source: URA, Developers’ Announcements, Cistri; as of October 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 51 Notable upcoming retail centre projects include a mixture of projects in the central fringe, suburban east and northeast Singapore. These are listed in table below. Upcoming Enclosed Retail Centre Projects (>60,000 sq ft NLA) October 2023 – 2027 Name Opening Year NLA (sq ft) Closest MRT/LRT Centre Type One Holland Village Marine Parade Underground Mall Pasir Ris Mall Punggol Digital District 46 Kim Yam Road CanningHill Square/CanningHill Pier Source: URA, developers, Cistri 2023 2023 2024 2024 2024 2025 116,300 99,800 269,000 172,600 151,900 96,900 Holland Village Marine Parade (U/C) Pasir Ris Punggol Fort Canning Fort Canning Neighbourhood Neighbourhood Sub-Regional Neighbourhood Neighbourhood Neighbourhood Besides the above, several other locations provide the potential for new retail floorspace: • Areas identified for development under URA’s 2019 Master Plan, including: Woodlands Regional Centre, Changi Gateway, the Greater Southern Waterfront, Tengah and Bidadari, as well as tourist destinations like Sentosa- Brani, Jurong Lake District and Mandai Eco-Tourism Hub. • Government Land Sales (GLS) provide opportunities for mixed-use developments with retail components. Currently, there are three GLS sites that could potentially accommodate retail development, two of which are in the Confirmed List and the remaining one on the Reserve List. As of October 2023, there has yet to be a successful developer application for Woodlands Avenue 2 white site as it remains on the Reserve List. • A key unknown for supply in the western suburbs of Singapore is the future of Jurong Lake District (JLD). Some retail will almost certainly be part of the JLD project. A maximum of approximately 570,000 sq.ft has been allocated for a range of uses of which retail is just one. Other uses include hotels, sports facilities and community uses. As such, it remains unclear what size of retail will be provided. While this remains a risk for malls located in the west of Singapore, we do not expect it to occur prior to 2028. Upcoming Government Land Sale Sites (Mixed-Use / White Sites) October 2023 Site Marina Gardens Crescent Jurong Lake District Woodlands Avenue 2 Source: URA (figures converted from sq m) Site Area (ha) Proposed Gross Plot Ratio Maximum GFA (sq ft) Capped Retail GFA (sq ft) Status 1.7 6.5 2.8 4.2 - 4.2 780,000 3,930,000 1,250,000 60,000 - 360,000 Confirmed List Confirmed List Reserve List 52 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 8. Shopping Centre Floorspace Per Capita By end 2023, Singapore’s shopping centre floorspace per capita provision is anticipated to reach around 6.2 sq ft NLA. This is similar to the provision in 2022 primarily due to the shopping centre floorspace increasing in tandem to Singapore’s population growth. By 2027, we expect floorspace per capita to moderate slightly to around 6.1 sq ft as population continues to grow faster than supply. Compared to other countries, Singapore has a lower provision of floorspace per capita compared to other larger countries like the US, Australia, and other major cities in the region. This is primarily because Singapore has fewer large shopping centres. However, the quantum of floorspace per capita does not reflect the quality of the retail offering. Singapore generally has good quality shopping malls, a comprehensive retail hierarchy, and low levels of vacancy. This means that shoppers are generally well-served notwithstanding the lower per capita provision of floorspace. 16.5 23.8 Shopping Centre Floorspace Per Capita (sq ft NLA) Singapore vs. Various Countries & Cities US Canada Australia Bangkok Kuala Lumpur Hong Kong Shanghai Singapore (2023) Singapore (2027) Jakarta Japan France 12.7 11.9 10.9 10.8 9.6 6.2 6.1 4.9 4.4 4.4 Global benchmarks updated based on latest data availability. Source: Cistri Amongst the various regions of Singapore, the highest concentration of shopping centre floorspace is within the central areas, particularly around Orchard Road. The suburban areas have lower provisions, ranging from around 2.1 sq ft per capita in the Outer North to around 4.3 sq ft per capita in the Outer East in 2022. Cistri expects the Outer Northeast region to be the only region to experience growth in per capita floorspace provision between 2022 and 2027. Contributing to this are new and upcoming openings such as Sengkang Grand Mall and the retail components of Punggol Digital District. In all other regions, floorspace per capita is expected to decline from 2022 as Singapore’s total population is expected to rise faster than the shopping centre floorspace stock. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 53 Shopping Centre Floorspace Per Capita by Region 2022 vs. 2027 54 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 9. The Available Market For Suburban Malls Malls outside the Central Area account for around 20% of the total retail floorspace in Singapore. While this is not the majority, malls outside the Central Area serve as important retail amenities for a sizeable portion of Singapore’s population. As illustrated in the heatmap below, many malls outside the Central Area are located in high density residential areas. These areas include Sengkang and Punggol in the northeast, Tampines in the east, Yishun in the north and Jurong in the west. Furthermore, Cistri estimates that around 3 million people, or over half of Singapore’s population, live within 1 km of a mall located outside the Central Area. This suggests that malls outside the Central Area are well-positioned to serve a large proportion of Singapore’s resident population, especially for daily convenience shopping that is typically done close to residents’ homes. Population Density Within 1 km of A Mall Outside Central Area 2023 51% of total population living within 1 km of a mall located outside Central Area. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 55 Malls outside the Central Area are also well-positioned to capture spending from new residents in suburban growth areas. Cistri estimates that over a third of the new housing units being built or planned across Singapore is located within 1 km of a mall located outside the Central Area. Under Construction & Planned Housing Units Within 1 km of A Mall Outside Central Area 2023 36% of future housing unit pipeline within 1 km of a mall located outside Central Area. 56 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 10. Market Share Of Shopping Centre NLA By Owner FCT remains the second-largest owner of total shopping centre floorspace in Singapore with a market share of around 6.1% as at 30 October 2023. This is slightly higher than the previous year due to the closure of JCube and acquisition of NEX from NTUC Enterprise. Share of Total Shopping Centre Floorspace by Owner By NLA 11.9% 6.1% 4.4% 4.3% 3.2% 2.9% 2.8% 2.6% 2.5% 2.2% CapitaLand Integrated Commercial Trust Frasers Centrepoint Trust Far East Organization HDB Mapletree Pan Asia Commercial Trust Changi Airport Group Singapore Land Group Limited Frasers Property Link REIT Lendlease Global Commercial REIT Source: Cistri Note: As at October 2023 Similarly, FCT’s share of suburban shopping centre floorspace as at 30 October 2023 is estimated to be higher than last year too, at around 10.6%. Share of Suburban Shopping Centre Floorspace by Owner By NLA 10.6% 9.8% 7.3% HDB Frasers Centrepoint Trust CapitaLand Integrated Commercial Trust Source: Cistri Note: As at October 2023 5.5% 5.0% 3.7% 3.6% 3.6% 3.5% 3.0% Mapletree Pan Asia Commercial Trust Changi Airport Group Link REIT NTUC Enterprise Far East Organization Lendlease Lendlease Global Commercial REIT The sale of shopping centres by Mercatus, NTUC Enterprise’s real estate subsidiary, was the key transaction leading to notable changes to the top 10 shopping centre owners in 2023: • Due to the divestment of Jurong Point, Thomson Plaza and NEX, NTUC Enterprise’s market share has declined significantly and it has dropped out of the list of top 10 shopping centre owners. • Link REIT is now part of the top 10 shopping centre floorspace owners since its purchase of Jurong Point and NTUC Enterprise’s share of Thomson Plaza. • Frasers Property has entered the list of top 10 owners due to its acquisition of NTUC Enterprise’s share of NEX in early 2023. Cistri estimates that around 3 million people or approximately half of Singapore’s population live within a 3 km radius from FCT’s suburban malls. Many of these people live in the north, east and northeast areas. Among the top suburban mall owners FCT has the second highest number of people living within 3 km of its suburban malls. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 57 Population Within 3 km Radius from Malls of Top Suburban Shopping Centre Owners 2023 2,790,000 2,177,000 1,423,000 Frasers Centrepoint Trust CapitaLand Integrated Commercial Trust HDB 126,000 Mapletree Pan Asia Commercial Trust 13,000 Changi Airport Group 396,000 Link REIT Source: Cistri Note: As at October 2023, exluding Changi Airport Group’s shopping centres Shopping Centre Locations of Top Five Suburban Shopping Centre Owners 2023 58 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview 11. Retail Rents & Occupancy After several very challenging years, the recovery in retail sales and tourism appears to have started to the benefit of retail landlords in the central area. Average retail occupancy in Orchard Road and the Rest of City Area both increased by 1.5 to 2.0 percentage points between Q4 2021 and Q4 2022. This brought average occupancy in both areas to around 90%. Nevertheless, the Suburban submarket continues to outperform with an average occupancy of around 94.5% as at Q4 2022. Furthermore, the recovery in central area occupancies still appears to be volatile, with average occupancy on Orchard Road decreasing again in the first three quarters of 2023 to around 88%. We note that several new stores have opened in Orchard Road in Q3 2023. Considering this, as well as the continued recovery of tourism, we anticipate occupancies on Orchard Road and in the central areas more generally to further improve by the end of 2023. Suburban occupancies, which are already outperforming those in central areas, are expected to remain stable at an average of around 94%. Retail Occupancy Rate Singapore, 2017 – 2024 100% 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% Forecast 2017 2018 2019 2020 2021 2022 2023 2024 Orchard Road | Rest of City Area | Suburban Source: URA, Cistri Continuing the trend since the COVID-19 pandemic, retail rents as measured by the URA declined further over 2022. Central submarkets saw a sharper decline in rents between 2021 and 2022, although quarter-on-quarter data for the first half of 2023 suggests central submarket rents may be starting to stabilise. Conversely, the Suburban submarket posted a smaller rental decline between 2021 and 2022, but have declined faster quarter-on-quarter through to the third quarter of 2023. We note that there are a range of different sources for rents in the market. Some of the real estate agencies have indicated that they are seeing stronger quarter-on-quarter growth in rents than reported by the URA. These agencies are utilising their own baskets of leases which can result in different outcomes. That said, we believe that the agencies data reflects real growth in the market, and we would expect to see further growth in the market come through the URA data in coming quarters. With growing sales and declining rentals, rental affordability has improved in recent quarters. However, there remain some challenges for retailers including a continued manpower crunch, other rising costs and the GST increase. We expect the current trend of rental decline to bottom out by the end of 2023 before beginning to rebound in 2024. A stronger recovery is anticipated for the central submarkets as tourism traffic picks up. In the medium- to long-term, as retail sales continue to recover, we anticipate both rents and occupancies to further improve. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 59 Median Retail Rental (Based on Contract Date) Year-on-Year Growth Singapore, 2017 – 2024 3% 1% 0.3% -0.1% -3% -2% -2% -7% -7% -8% -4% -5% -6% -6% -6% -6% -8% Forecast 0.5% 0.5% 1% -1% -1% -1% -2% 2017 2018 2019 2020 2021 2022 2023 2024 Orchard Road | Rest of City Area | Suburban -6% -7% -9% 2016 Note: Based on rents for full year up to Q4 in each year Source: URA, Cistri 12. Retail Trends In The Post-COVID-19 World Singapore’s retail market continues to be shaped by trends that were accelerated by the COVID-19 pandemic, as well as structural changes to the demographics, attitudes and behaviours of its resident consumer base. Post-COVID-19 Consumer Movement Patterns Continue to Support Localisation Over the last few years, Singapore has relaxed COVID-19 restrictions and fully removed all movement and border restrictions as of early 2023. While people have been allowed to move freely across the island for some time, people movement patterns do not appear to have fully returned to pre-pandemic conditions. Notably, the pandemic has increased the adoption of work-from-home practices and led to consumers spending more time in the suburban areas where they live compared to the pre-pandemic period. These changes appear to have benefited suburban malls, enabling them to attract a higher share of footfall. According to human mobility data from international data provider Near, suburban malls attracted around 74% of total resident visits to malls across Singapore in 2022. This share has remained stable since 2020 and is around five percentage points higher than pre-pandemic levels. Distribution of Resident Visits to Suburban vs. Central Malls 2019 – 2022 100% 80% 60% 40% 20% 0% 69% 31% 2019 73% 27% 2020 72% 28% 74% 26% 2021 2022 Source: Near, Cistri Central Malls | Suburban Malls 60 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview As consumers turn more to their local malls, mall owners have an opportunity to reposition their properties as community hubs serving local needs. This could involve combining convenience retail with community gathering spaces, civic uses and public activities that attract surrounding residents. For example, two newly opened malls in 2023 – The Woodleigh Mall and Sengkang Grand Mall – are integrated with Community Clubs that offer community classes and events, which can act as drivers of regular footfall to the malls. Catering to the Silver Consumer Like many other developed countries, Singapore has a growing silver population. Over the last decade, the proportion of Singapore residents aged 65 and above has increased from around 10.5% in 2013 to around 17.3% in 2023. This brings the resident population aged 65 and above to around 717,800 in 2023. As the silver generation becomes an increasingly significant consumer market, shopping malls will need to tailor their offer to be relevant to senior shoppers. Each generation of shoppers has a different lifestyle and thus different spending habits. In Singapore, the Household Expenditure Survey shows several differences in the spending patterns between elderly households and the average household. First, elderly households allocate a higher proportion of spending to food retail and groceries and a lower proportion of spending to dining out (i.e. F&B) compared to the average Singapore household. This reflects elderly consumers’ preference to cook and eat at home. Similar trends have also been observed in spending statistics for other countries. Elderly households also naturally allocate a higher proportion of spending to health services, reflecting the physical needs at this life stage. Third, elderly households allocate a higher proportion of spending to home furnishings and equipment, and a lower proportion to transport compared to the average Singapore household. While the lower spending on transport may reflect travel subsidies for senior citizens, it may also be a result of elderly consumers’ preference to spend more time at home. Product Category Share of Average Resident Household Member Expenditure Singapore Household Expenditure Survey 2017-2018 19% 16% 16% 10% 16% 17% 8% 9% 11% 6% Food Retail F&B Home Furnishings & Equipment Health Transport All Households | Households Aged >=65 Years Source: SingStat, Cistri Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 61 Overall, these findings reflect senior shoppers’ relatively homebound lifestyles, which are in turn associated with more purchases relating to their homes and cooking and eating at home. These findings have implications for the trade mix of malls serving senior shoppers. Notably, shopping centre operators could look to enhance their fresh food and groceries and health services offer to better cater to senior shoppers’ preferences. In some cases, in Singapore (e.g. Pasir Ris Mall), the government is requiring that new malls provide more health and well-being services into their tenant mix. While this may be mandated in some projects, we have observed other projects in other markets where this has occurred without a government mandate due to higher visitation that may be induced. Beyond the trade mix, mall owners are also putting more thought into the design and ambience of spaces to make them more inclusive towards senior shoppers. For instance, Frasers Property has set aside calm zones during designated mall opening hours, when in-store lighting will be dimmed and music volume restricted to create a more comfortable shopping environment for the elderly. Besides ambience, walkability and wayfinding are also important areas of enhancement that mall owners can consider. Catering to Next-Generation Consumers Through Omnichannel Retail Meanwhile, the young generation of shoppers continue to appreciate the convenience offered by omnichannel experiences. In response to this, more omnichannel retailers continue to emerge, and many of those looking to tap into the market of young shoppers in Southeast Asia are doing so via Singapore. Examples of recent entrants into Singapore’s retail market include Luckin Coffee, as well as digital native brands such as Spanish furniture retailer Kave Home and Chinese apparel brand Neiwai. The entry of digital native brands into physical retailing presents an opportunity for malls to discover new potential tenants that can enhance the omnichannel experience at shopping malls. Having a successful omnichannel offer also includes offering shoppers an enjoyable in-store shopping experience beyond making purchases. Retailers are therefore increasingly incorporating experiential elements into their physical stores. Some retailers, such as fashion retailers Marimekko, FJ Benjamin and cycling apparel brand Pas Normal Studios, have chosen to do this by offering in-store dining experiences. These higher-end brands are following the trends set by mass market brands such as Muji and Benjamin Barker. Others are offering interactive educational experiences, such as Richard Mille’s in-store watchmaking workshops. Rising Shopper Awareness on Sustainability Singapore shoppers are gradually becoming more conscious about sustainability. This has encouraged the emergence of stores focused on the sale and swapping of second-hand goods, notably apparel aimed at youths. An example is second-hand fashion retailer Refash, which so far has added five new store locations across central and suburban malls in 2023. Recognising the growth potential of second-hand fashion retail, online marketplace Carousell has acquired Refash. The growing public interest in environmental topics also presents mall operators an opportunity to organise sustainability-themed placemaking activations. Lendlease has done this through its “You Won’t Believe It’s Trash” exhibition at PLQ Mall this year. The event includes a textiles collection drive, where selected participants can receive prizes in exchange for their textile recycling donations. Such activations can attract visitors to malls while providing them opportunities to contribute to sustainability initiatives. 62 Frasers Centrepoint Trust Annual Report 2023 Retail Property Market Overview Retail Within Mixed-Use Developments New malls in Singapore are increasingly being developed as part of mixed-use developments with residences, offices and/or hotels accompanying the retail offer. This is the case for almost all of the known upcoming malls in Singapore. In addition, CapitaLand and Frasers Property have proposed to redevelop JCube and Bedok Point respectively into residential-led mixed-use developments. Mixed-use development can create benefits for both the retail and non-retail components. On one hand, the retail mall benefits from direct access to an on-site market of potential shoppers, which support footfall and sales at the mall. On the other hand, the mall provides an amenity that enhances the attractiveness of the on-site residences, offices or hotels. In turn, this can support the take-up or occupancy, as well as the sales price or rental premiums, that these non-retail components can achieve. To achieve these benefits, both the retail and non-retail uses have to be designed optimally and developed to a high quality. Developers with diverse capabilities and experience developing high-quality properties across a range of asset classes are best positioned to do this and take advantage of the mixed-use development trend. 13. Conclusion The situation in Singapore’s retail market has continued to improve since the challenges of COVID-19. The market has exceeded pre-pandemic levels and continued to enjoy another strong year of growth over 2023. SingStat’s retail sales data for the first eight months of 2023 continues to paint a positive picture, with sales across numerous product categories exceeding the same period in 2019. While the COVID-19 pandemic is over, certain shopper behaviours appear to have persisted. Of particular note is how suburban malls appear to still be capturing a higher share of resident mall visits compared to pre-pandemic levels despite the complete removal of movement restrictions. This, combined with the occupancy performance of suburban retail, shows the resilience of the suburban retail performance throughout both pandemic and non- pandemic conditions. While the resident spending market fundamentals appear robust, we note that the tourist market has yet to fully recover. The economic situation in China, one of Singapore’s main tourist source markets pre-pandemic, will be a key determinant of how quickly this recovery can occur. Besides this, the global outlook for inflation will continue to impact cost of living and thus consumers’ ability and willingness to spend on retail goods and services. Notwithstanding the short- to medium-term economic headwinds, we are optimistic about the long-term future of the Singapore retail real estate market. It will continue to be supported by ongoing inward migration, household income growth, coupled with low levels of retail supply growth ensuring occupancy remains high and providing conditions for long term rental growth. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 63 14. Disclaimer This report is dated 30 October 2023 and incorporates information and events up to that date only and excludes any information arising, or event occurring, after that date which may affect the validity of Cistri Pte. Ltd.’s opinion in this report. Cistri Pte. Ltd. prepared this report on the instructions, and for the benefit only, of Frasers Centrepoint Trust (Instructing Party) for the purpose of Independent Retail Market Overview (Purpose) and not for any other purpose or use. To the extent permitted by applicable law, Cistri Pte. Ltd. expressly disclaims all liability, whether direct or indirect, to the Instructing Party which relies or purports to rely on this report for any purpose other than the Purpose, and to any other person which relies or purports to rely on this report for any purpose whatsoever (including the Purpose). In preparing this report, Cistri Pte. Ltd. was required to make judgements which may be affected by unforeseen future events, the likelihood and effects of which are not capable of precise assessment. All surveys, forecasts, projections and recommendations contained in or associated with this report are made in good faith and on the basis of information supplied to Cistri Pte. Ltd. at the date of this report, and upon which Cistri Pte. Ltd. relied. Achievement of the projections and budgets set out in this report will depend, among other things, on the actions of others over which Cistri Pte. Ltd. has no control. In preparing this report, Cistri Pte. Ltd. may rely on or refer to documents in a language other than English, which Cistri Pte. Ltd. may arrange to be translated. Cistri Pte. Ltd. is not responsible for the accuracy or completeness of such translations and disclaims any liability for any statement or opinion made in this report being inaccurate or incomplete arising from such translations. Whilst Cistri Pte. Ltd. has made all reasonable inquiries it believes necessary in preparing this report, it is not responsible for determining the completeness or accuracy of information provided to it. Cistri Pte. Ltd. (including its officers and personnel) is not liable for any errors or omissions, including in information provided by the Instructing Party or another person or upon which Cistri Pte. Ltd. relies, provided that such errors or omissions are not made by Cistri Pte. Ltd. recklessly or in bad faith. This report has been prepared with due care and diligence by Cistri Pte. Ltd. and the statements and opinions given by Cistri Pte. Ltd. in this report are given in good faith and in the reasonable belief that they are correct and not misleading, subject to the limitations above. 64 Frasers Centrepoint Trust Annual Report 2023 FCT Portfolio Overview As at 30 September 2023 NEX1 Causeway Point Waterway Point2 Tampines 1 Northpoint City North Wing Yishun 10 Retail Podium Tiong Bahru Plaza Changi City Point3 Century Square Hougang Mall White Sands Central Plaza (Office Property) GFA NLA Number of leases Number of tenants Title Year purchased 942,141 sf 87,527 sqm 634,631 sf4 58,959 sqm 326 322 99-year leasehold commencing 26 June 2008 25.50% in 2023 629,156 sf 58,450 sqm 419,688 sf 38,990 sqm 225 204 99-year leasehold commencing 30 October 1995 2006 560,234 sf 52,047 sqm 389,444 sf5 36,180 sqm 223 209 99-year leasehold commencing 18 May 2011 40.00% in 2019; 380,906 sf 35,387 sqm 268,514 sf 24,946 sqm 124 118 99-year leasehold commencing 1 April 1990 2020 Additional 10.00% in 2023 Purchase price $529.8 million for 25.50% interest $606.2 million $520.0 million for 40.00% interest; $762.0 million 519,202 sf 48,235 sqm 214,564 sf 19,933 sqm 151 141 171,793 sf7 15,960 sqm 33 32 306,376 sf 28,463 sqm 211,845 sf8 19,681 sqm 140 131 327,226 sf 30,400 sqm 211,281 sf9 19,628 sqm 147 146 232,782 sf 21,626 sqm 165,692 sf10 15,393 sqm 130 123 227,250 sf 21,112 sqm 150,374 sf11 13,970 sqm 140 130 99-year leasehold 99-year leasehold 60-year leasehold 99-year leasehold 99-year leasehold 99-year leasehold commencing commencing 1 September 1991 1 September 1991 2020 2020 commencing 30 April 2009 2014 commencing 1 September 1992 2020 commencing 1 May 1994 2020 commencing 1 May 1993 2020 376,579 sf 34,985 sqm 229,931 sf6 21,361 sqm 10,398 sf 966 sqm 10,344 sf 961 sqm 178 173 99-year leasehold commencing 1 April 1990 2016 $37.8 million $654.0 million $215.0 million $305.0 million $574.0 million $432.0 million $428.0 million Northpoint 1: 2006 Northpoint 2: 2010 Northpoint 1: $249.3 million Northpoint 2: $164.6 million $2,100.0 million (100.00% interest) $535.5 million (FCT’s 25.50% interest) 7.9% $1,336.0 million 19.8% $131.3 million for additional 10.00% interest $1,315.0 million (100.00% interest) $657.5 million (FCT’s 50.00% interest) 9.8% $771.0 million $782.0 million $34.0 million $657.0 million $217.5 million $325.0 million12 $559.0 million $435.0 million $429.0 million 11.4% 12.1% 9.8% 3.2% 4.8% 8.3% 6.5% 6.4% $83,81814 $93,255 $80,99115 $46,435 $67,00414 100.0% $69,942 99.6% $61,74115 100.0% $33,352 72.1% $57,126 $41,436 99.7% $42,228 $31,959 99.7% $10,250 $6,647 95.3% $25,563 $15,865 99.2% $32,424 $23,676 99.0% $31,564 $22,295 100.0% $30,878 $20,414 99.5% 36.2 million 25.9 million 25.5 million 16.9 million 56.7 million16 Not applicable 16.5 million Not applicable 10.5 million 12.4 million 12.7 million 10.7 million Serangoon MRT station (North East Line and Circle Line) and Serangoon Bus Interchange Woodlands MRT station (North- South Line and Thomson-East Coast Line) and Woodlands Bus Interchange Tampines MRT station (East- West Line and Downtown Line) and Tampines Bus Interchange Punggol MRT station (North East Line and the future Cross Island Line), LRT station and Punggol Temporary Bus Interchange Yishun MRT station (North-South Line) and Yishun Bus Interchange Tiong Bahru MRT Tiong Bahru MRT Expo MRT station Tampines MRT Hougang MRT Pasir Ris MRT station (East-West station (East-West (East-West Line and station (East-West station (North station (East-West Line) Line) Downtown Line) Line and Downtown East Line and the Line and the future Line) and Tampines future Cross Island Cross Island Line) Bus Interchange Line) and Hougang and Pasir Ris Bus Central Bus Interchange Interchange 1 FCT owns 25.50% effective interest in Gold Ridge Pte Ltd (“GRPL”) which holds NEX. 2 FCT owns 50.00% interest in Sapphire Star Trust (“SST”), a private trust that owns the interest in Waterway Point. 3 On 30 August 2023, FCT announced the divestment of Changi City Point for $338.0 million. The divestment was completed on 31 October 2023. 4 The NLA includes 17,562 sf (1,632 sqm) currently used as Community/ Sports Facilities Scheme (“CSFS”) space. 5 The NLA includes 17,954 sf (1,668 sqm) currently used as CSFS space. 6 The NLA includes 31,753 sf (2,950 sqm) currently used as CSFS space. 7 The NLA includes 28,355 sf (2,634 sqm) currently used as CSFS space. 8 The NLA includes 3,391 sf (315 sqm) currently used as CSFS space. 9 The NLA includes 8,547 sf (794 sqm) currently used as CSFS space. 10 The NLA includes 15,767 sf (1,465 sqm) currently used as CSFS space. 11 The NLA includes 21,744 sf (2,020 sqm) currently used as CSFS space. 12 Valuation is done as at 31 July 2023. 13 Based on FCT’s 50.00% interest in SST and 25.50% effective interest in GRPL which holds NEX. 14 GRPL’s revenue and NPI for the period of 7 February 2023 to 30 September 2023 on 100% basis. 15 SST’s revenue and NPI on 100% basis. 16 Combined shopper traffic of Northpoint City North Wing and South Wing. Valuation As % of total portfolio appraised value13 FY2023 Gross revenue (’000) FY2023 NPI (’000) Committed occupancy Annual shopper traffic Connection to public transport Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 65 NEX1 Causeway Point Waterway Point2 Tampines 1 Northpoint City North Wing Yishun 10 Retail Podium Tiong Bahru Plaza Central Plaza (Office Property) Changi City Point3 Century Square Hougang Mall White Sands 25.50% interest (100.00% interest) $535.5 million (FCT’s 25.50% interest) 7.9% $1,336.0 million Additional 10.00% in 2023 40.00% interest; $131.3 million for additional 10.00% interest (100.00% interest) $657.5 million (FCT’s 50.00% interest) 9.8% 2006 2010 Northpoint 2: $249.3 million Northpoint 2: $164.6 million GFA NLA 942,141 sf 87,527 sqm 634,631 sf4 58,959 sqm 629,156 sf 58,450 sqm 419,688 sf 38,990 sqm 225 204 560,234 sf 52,047 sqm 389,444 sf5 36,180 sqm 223 209 380,906 sf 35,387 sqm 268,514 sf 24,946 sqm 124 118 376,579 sf 34,985 sqm 229,931 sf6 21,361 sqm 10,398 sf 966 sqm 10,344 sf 961 sqm 178 173 Number of leases Number of tenants 326 322 Title 99-year leasehold 99-year leasehold 99-year leasehold 99-year leasehold 99-year leasehold commencing commencing commencing commencing 26 June 2008 30 October 1995 18 May 2011 1 April 1990 commencing 1 April 1990 Year purchased 25.50% in 2023 2006 40.00% in 2019; 2020 Northpoint 1: 2016 519,202 sf 48,235 sqm 214,564 sf 19,933 sqm 151 141 99-year leasehold commencing 1 September 1991 2020 171,793 sf7 15,960 sqm 33 32 99-year leasehold commencing 1 September 1991 2020 306,376 sf 28,463 sqm 211,845 sf8 19,681 sqm 140 131 60-year leasehold commencing 30 April 2009 2014 327,226 sf 30,400 sqm 211,281 sf9 19,628 sqm 147 146 99-year leasehold commencing 1 September 1992 2020 232,782 sf 21,626 sqm 165,692 sf10 15,393 sqm 130 123 99-year leasehold commencing 1 May 1994 2020 227,250 sf 21,112 sqm 150,374 sf11 13,970 sqm 140 130 99-year leasehold commencing 1 May 1993 2020 Purchase price $529.8 million for $606.2 million $520.0 million for $762.0 million Northpoint 1: $37.8 million $654.0 million $215.0 million $305.0 million $574.0 million $432.0 million $428.0 million Valuation $2,100.0 million $1,315.0 million $771.0 million $782.0 million $34.0 million $657.0 million $217.5 million $325.0 million12 $559.0 million $435.0 million $429.0 million 19.8% 11.4% 12.1% 9.8% 3.2% 4.8% 8.3% 6.5% 6.4% $83,81814 $93,255 $80,99115 $46,435 $67,00414 100.0% $69,942 99.6% $61,74115 100.0% $33,352 72.1% $57,126 $41,436 99.7% $42,228 $31,959 99.7% $10,250 $6,647 95.3% $25,563 $15,865 99.2% $32,424 $23,676 99.0% $31,564 $22,295 100.0% $30,878 $20,414 99.5% Annual shopper 36.2 million 25.9 million 25.5 million 16.9 million 56.7 million16 Not applicable 16.5 million Not applicable 10.5 million 12.4 million 12.7 million 10.7 million As % of total portfolio appraised value13 FY2023 Gross revenue (’000) FY2023 NPI (’000) Committed occupancy traffic Connection to Serangoon MRT Woodlands MRT Punggol MRT Tampines MRT public transport station (North station (North- station (North station (East- Yishun MRT station (North-South Line) East Line and South Line and East Line and West Line and and Yishun Bus Interchange Tiong Bahru MRT station (East-West Line) Tiong Bahru MRT station (East-West Line) Expo MRT station (East-West Line and Downtown Line) Tampines MRT station (East-West Line and Downtown Line) and Tampines Bus Interchange Hougang MRT station (North East Line and the future Cross Island Line) and Hougang Central Bus Interchange Pasir Ris MRT station (East-West Line and the future Cross Island Line) and Pasir Ris Bus Interchange Circle Line) and Thomson-East the future Cross Downtown Line) Serangoon Bus Coast Line) and Island Line), and Tampines Interchange Woodlands Bus LRT station Bus Interchange Interchange and Punggol Temporary Bus Interchange 1 FCT owns 25.50% effective interest in Gold Ridge Pte Ltd (“GRPL”) which holds NEX. 2 FCT owns 50.00% interest in Sapphire Star Trust (“SST”), a private trust that owns the interest in Waterway Point. 3 On 30 August 2023, FCT announced the divestment of Changi City Point for $338.0 million. The divestment was completed on 31 October 2023. 4 The NLA includes 17,562 sf (1,632 sqm) currently used as Community/ Sports Facilities Scheme (“CSFS”) space. 5 The NLA includes 17,954 sf (1,668 sqm) currently used as CSFS space. 6 The NLA includes 31,753 sf (2,950 sqm) currently used as CSFS space. 7 The NLA includes 28,355 sf (2,634 sqm) currently used as CSFS space. 8 The NLA includes 3,391 sf (315 sqm) currently used as CSFS space. 9 The NLA includes 8,547 sf (794 sqm) currently used as CSFS space. 10 The NLA includes 15,767 sf (1,465 sqm) currently used as CSFS space. 11 The NLA includes 21,744 sf (2,020 sqm) currently used as CSFS space. 12 Valuation is done as at 31 July 2023. 13 Based on FCT’s 50.00% interest in SST and 25.50% effective interest in GRPL which holds NEX. 14 GRPL’s revenue and NPI for the period of 7 February 2023 to 30 September 2023 on 100% basis. 15 SST’s revenue and NPI on 100% basis. 16 Combined shopper traffic of Northpoint City North Wing and South Wing. 66 Frasers Centrepoint Trust Annual Report 2023 Property Profiles NEX Description: Shopping mall comprising 5 storeys and 2 basement levels Address: 23 Serangoon Central, Singapore 556083 Gross Floor Area: 87,527 sqm (942,141 sf) Net Lettable Area1: 58,959 sqm (634,631 sf) Car Park Lots: 400 Title: 99-year leasehold commencing 26 June 2008 Year Acquired by FCT: FCT owns an effective 25.50% interest (acquired on 6 February 2023) in GRPL, which holds NEX. Valuation2: $2,100.0 million (100.00% interest) $535.5 million (FCT’s 25.50% interest) Green Building Certification: BCA Green Mark GoldPlus Annual Shopper Traffic: 36.2 million (October 2022 – September 2023) Key Tenants: FairPrice Xtra, Isetan, H&M, Food Junction and Shaw Theatres NEX is the largest suburban retail mall in Northeast Singapore with a total net lettable area of 634,631 sf spread over seven retail levels, including two basement levels. Notable brands among its over 300 stores include FairPrice Xtra, Isetan, H&M, Food Junction and Shaw Theatres. NEX is easily accessible via the integrated Serangoon Bus Interchange and Serangoon MRT station which connects to the North East Line and Circle Line of the MRT network, making it a convenient destination for the surrounding residential population and commuters. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 67 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 83,8183 16,8143 67,0043 100.0% 36.24 Top 10 Tenants Trade Mix As at 30 September 2023, NEX has a total of 326 leases and 322 tenants. The top 10 tenants contributed collectively 27.4% of the mall’s total GRI. Food & Beverage contributed 34.2% of the mall’s GRI, followed by Beauty & Healthcare at 15.3% and Fashion & Accessories at 13.7%. The three trades accounted for 63.2% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) BreadTalk Group5 NTUC FairPrice6 Isetan Dairy Farm Group7 H&M Group8 Shaw Theatres R E & S Enterprises Pte Ltd9 Courts (Singapore) Pte. Ltd. Paradise Group10 Uniqlo (Singapore) Pte. Ltd. Total 6.1% 4.4% 4.1% 2.6% 2.5% 2.3% 1.5% 1.4% 1.3% 1.2% 27.4% Food & Beverage Beauty & Healthcare Fashion & Accessories Sundry & Services Supermarket & Grocers Department Store Information & Technology Homeware & Furnishing Leisure & Entertainment Books, Music, Arts & Craft, Hobbies Jewellery & Watches Electrical & Electronics Education Sports Apparel & Equipment Vacant Total By NLA By GRI11 27.3% 10.3% 11.9% 4.9% 12.8% 8.6% 3.0% 3.9% 7.2% 4.0% 1.0% 2.7% 1.5% 0.9% 0.0% 34.2% 15.3% 13.7% 6.9% 6.2% 4.0% 3.9% 3.4% 3.0% 2.9% 2.5% 1.7% 1.2% 1.1% 0.0% 100.0% 100.0% Lease Expiry Profile12 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 67 98,017 15.9% 16.6% 95 187,521 30.4% 28.8% 134 194,541 31.5% 38.0% 27 83,077 13.5% 12.2% 3 53,913 8.7% 4.4% Total 326 617,069 100.0% 100.0% Includes Food Junction, Food Republic, Din Tai Fung and BreadTalk Family. Includes FairPrice Xtra and Unity Pharmacy. Includes Cold Storage, Guardian Health & Beauty and 7-Eleven. 1 The NLA includes the area of approximately 17,562 sf (1,632 sqm) currently used as CSFS space. 2 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 3 GRPL’s revenue, property expenses and NPI for the period of 7 February 2023 to 30 September 2023 on 100% basis. 4 Shopper traffic based on 12 months ended 30 September 2023. 5 6 7 8 Operator of H&M. 9 Operator of &JOY Japanese Food Street. 10 Includes Beauty In The Pot and Canton Paradise. 11 Excludes gross turnover rent. 12 Based on committed leases as at 30 September 2023; vacant floor area is excluded. 68 Frasers Centrepoint Trust Annual Report 2023 Property Profiles CAUSEWAY POINT Description: Shopping mall comprising 7 storeys and 3 basement levels Address: 1 Woodlands Square, Singapore 738099 Gross Floor Area: 58,450 sqm (629,156 sf) Net Lettable Area: 38,990 sqm (419,688 sf) Car Park Lots: 735 Title: 99-year leasehold commencing 30 October 1995 Year Acquired by FCT: 2006 Valuation1: $1,336.0 million Green Building Certification: BCA Green Mark Gold (GM: 2021 In Operation) Annual Shopper Traffic: 25.9 million (October 2022 – September 2023) Key Tenants: Metro, Courts, Food Republic, FairPrice Finest, Cathay Cineplexes and Uniqlo Causeway Point is the largest mall in Woodlands, one of Singapore’s most populous residential estates. It is located in the heart of the Woodlands Regional Centre and seamlessly connected to Woodlands Regional Bus Interchange and Woodlands MRT station, which serves as an interchange for the North-South line and Thomson-East Coast line. The mall offers a one-stop shopping and dining experience with over 200 retail and food and beverage outlets. Notable tenants include Metro, Courts, Food Republic, FairPrice Finest, Cathay Cineplexes and Uniqlo. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 69 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 93,255 23,313 69,942 99.6% 25.9 89,007 20,560 68,447 100.0% 21.4 4.8% 13.4% 2.2% (0.4%-point) 21.0% Top 10 Tenants Trade Mix As at 30 September 2023, Causeway Point has a total of 225 leases (FY2022: 226) and 204 tenants (FY2022: 216), excluding vacancy. The top 10 tenants contributed collectively 36.6% (FY2022: 35.7%) of the mall’s total GRI. Food & Beverage contributed 31.6% (FY2022: 31.9%) of the mall’s GRI, followed by Beauty & Healthcare at 13.2% (FY2022: 12.0%) and Fashion & Accessories at 11.6% (FY2022: 11.7%). These three trades accounted for 56.4% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) Metro (Private) Limited2 Courts (Singapore) Pte Ltd NTUC FairPrice3 BreadTalk Group4 Cathay Cineplexes Pte Ltd Uniqlo (Singapore) Pte Ltd Hanbaobao Pte Ltd5 Dairy Farm Group6 Aspial Corporation7 R E & S Enterprises Pte Ltd8 Total 7.9% 6.6% 5.8% 4.6% 3.0% 2.1% 1.9% 1.8% 1.5% 1.4% 36.6% Food & Beverage Beauty & Healthcare Fashion & Accessories Department Store Electrical & Electronics Sundry & Services Information & Technology Leisure & Entertainment Supermarket & Grocers Jewellery & Watches Homeware & Furnishing Sports Apparel & Equipment Books, Music, Arts & Craft, Hobbies Education Vacant Total By NLA By GRI9 24.8% 8.5% 11.2% 14.3% 9.0% 3.8% 3.7% 9.4% 5.8% 1.1% 2.1% 1.8% 3.0% 1.1% 0.4% 31.6% 13.2% 11.6% 7.8% 7.0% 5.6% 5.0% 4.1% 3.7% 3.3% 2.7% 1.8% 1.8% 0.8% 0.0% 100.0% 100.0% Lease Expiry Profile10 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 77 162,019 38.7% 36.6% 73 96,658 23.1% 26.3% 66 83,423 20.0% 24.4% 7 39,342 9.4% 7.8% 2 36,664 8.8% 4.9% Total 225 418,106 100.0% 100.0% Includes Metro Department Store and Clinique. Includes FairPrice Finest, Cantine by Kopitiam, Unity Pharmacy, Crave and Pezzo. Includes Food Republic, BreadTalk and Toast Box. 1 Valuation done by Savills Valuation And Professional Services (S) Pte Ltd as at 30 September 2023. 2 3 4 5 Operator of McDonald’s. 6 7 8 9 Excludes gross turnover rent. 10 Based on committed leases as at 30 September 2023; vacant floor area is excluded. Includes Guardian Health & Beauty and 7-Eleven. Includes Goldheart, Lee Hwa Jewellery and Maxi-Cash. Includes Ichiban Boshi and Kuriya Japanese Market. 70 Frasers Centrepoint Trust Annual Report 2023 Property Profiles WATERWAY POINT Description: Shopping mall comprising 2 storeys and 2 basement levels Address: 83 Punggol Central, Singapore 828761 Gross Floor Area: 52,047 sqm (560,234 sf) Net Lettable Area1: 36,180 sqm (389,444 sf) Green Building Certification: BCA Green Mark GoldPlus Annual Shopper Traffic: 25.5 million (October 2022 – September 2023) Key Tenants: Shaw Theatres, FairPrice Finest, Cookhouse by Koufu, Uniqlo, Best Denki, Toys“R”Us and Don Don Donki Car Park Lots: 622 Title: 99-year leasehold commencing 18 May 2011 Year Acquired by FCT: FCT owns 50.00% stake in Sapphire Star Trust (“SST”), a private trust that owns Waterway Point. The dates of acquisition are as follows: • 33.33% acquired on 11 July 2019 • 6.67% acquired on 18 September 2019 • 10.00% acquired on 8 February 2023 Valuation2: $1,315.0 million (100.00% interest) $657.5 million (FCT’s 50.00% interest) Waterway Point is a family and lifestyle shopping mall located at the heart of Singapore’s first waterfront eco-town, Punggol. The mall enjoys direct connectivity to public transportation system including Punggol MRT and LRT station and a bus interchange. It is also served by major expressways including Tampines Expressway (TPE) and Seletar Expressway (SLE) which provide vehicular accessibility to other parts of Singapore. The mall offers shoppers a diverse range of shopping, dining and entertainment experiences, catering to their necessity and convenience shopping as well as their leisure needs. Notable retailers and restaurants at the mall include a 24- hour FairPrice Finest, Cookhouse by Koufu, Best Denki, Uniqlo and Don Don Donki. The mall also has a cineplex operated by Shaw Theatres that features 11 screens, including an IMAX theatre. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 71 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000)2 Property Expenses ($’000)2 Net Property Income ($’000)2 Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 80,991 19,250 61,741 100.0% 25.5 77,772 17,826 59,945 99.0% 19.3 4.1% 8.0% 3.0% 1.0%-points 32.1% Top 10 Tenants Trade Mix As at 30 September 2023, Waterway Point has a total of 223 leases (FY2022: 218) and 209 tenants (FY2022: 209). The top 10 tenants contributed collectively 26.4% (FY2022: 25.4%) of the mall’s total GRI. Food & Beverage contributed 38.6% (FY2022: 38.9%) of the mall’s GRI, followed by Beauty & Healthcare at 12.2% (FY2022: 12.1%) and Sundry & Services at 10.6% (FY2022: 10.7%). These three trades accounted for 61.4% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) NTUC FairPrice4 Koufu Group5 Shaw Theatres Pte Ltd Jollibee Group6 BreadTalk Group7 Best Denki (Singapore) Pte Ltd Uniqlo (Singapore) Pte Ltd United Overseas Bank Limited R E & S Enterprises Pte Ltd8 Maybank Total 7.0% 4.4% 3.2% 2.4% 1.8% 1.7% 1.6% 1.5% 1.4% 1.4% 26.4% Food & Beverage Beauty & Healthcare Sundry & Services Fashion & Accessories Supermarket & Grocers Leisure & Entertainment Books, Music, Arts & Craft, Hobbies Education Homeware & Furnishing Information & Technology Electrical & Electronics Jewellery & Watches Sports Apparel & Equipment Vacant Total By NLA By GRI9 30.5% 8.0% 7.5% 10.7% 12.7% 9.6% 5.8% 3.4% 4.0% 1.8% 3.5% 0.9% 1.6% 0.0% 38.6% 12.2% 10.6% 10.2% 8.6% 3.7% 3.0% 2.8% 2.6% 2.4% 2.1% 1.7% 1.5% 0.0% 100.0% 100.0% Lease Expiry Profile10 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 62 97,690 26.3% 29.5% 90 86,991 23.4% 29.5% 56 120,711 32.5% 30.9% 14 33,104 8.9% 6.9% 1 32,994 8.9% 3.2% Total 223 371,490 100.0% 100.0% 1 The NLA includes the area of approximately 17,954 sf (1,668 sqm) currently used as CSFS space. 2 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 3 SST’s gross revenue, property expenses and NPI on 100% basis. Includes FairPrice Finest, Unity Pharmacy, Pezzo and Crave. 4 Includes Cookhouse by Koufu, Dough Culture and Nine Fresh. 5 Includes Tim Ho Wan, Jollibee, Tiong Bahru Bakery and Strip & Browhaus. 6 Includes BreadTalk, Toast Box and Din Tai Fung. 7 Includes Ichiban Boshi & Kuriya Japanese Market. 8 9 Excludes gross turnover rent. 10 Based on committed leases as at 30 September 2023; vacant floor area is excluded. 72 Frasers Centrepoint Trust Annual Report 2023 Property Profiles TAMPINES 1 Description: Shopping mall comprising 5 storeys and 2 basement levels Address: 10 Tampines Central 1, Singapore 529536 Gross Floor Area: 35,387 sqm (380,906 sf) Net Lettable Area: 24,946 sqm (268,514 sf) Car Park Lots: 203 Title: 99-year leasehold commencing 1 April 1990 Year Acquired by FCT: 2020 Valuation1: $771.0 million Green Building Certification: BCA Green Mark GoldPlus Annual Shopper Traffic: 16.9 million (October 2022 – September 2023) Key Tenants: Cold Storage, Don Don Donki, Muji, Kopitiam and Amore Fitness Tampines 1 is located in the heart of Tampines, next to the Tampines MRT interchange and the Tampines Bus Interchange. The mall draws its crowd from the populous residential catchment, commuter traffic and working population in the East region. Tampines 1 offers shoppers a wide selection of food and beverage, beauty, fashion, and lifestyle brands including Cold Storage, Don Don Donki and Muji. Tampines 1 is undergoing asset enhancement works which is expected to complete in the fourth quarter of FY2024. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 73 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 46,435 13,083 33,352 72.1%2 16.9 47,622 13,206 34,416 99.1% 15.9 (2.5%) (0.9%) (3.1%) (27.0%-points) 6.3% Top 10 Tenants Trade Mix3 As at 30 September 2023, Tampines 1 has a total of 124 leases (FY2022: 174) leases and 118 tenants (FY2022: 170), excluding vacancy. The top 10 tenants contributed collectively 29.8% (FY2022: 21.7%) of the mall’s total GRI. Food & Beverage contributed 28.0% (FY2022: 33.7%) of the mall’s GRI followed by Beauty & Healthcare at 25.1% (FY2022: 21.5%) and Fashion & Accessories at 10.7% (FY2022: 12.6%). These three trades accounted for 63.8% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) Dairy Farm Group4 Pan Pacific Retail Management (Singapore) Pte Ltd5 NTUC FairPrice6 Beauty One International7 Eadeco (Singapore) Pte Ltd8 Muji (Singapore) Pte Ltd Jollibee Group9 RMG Group10 Bank of China Limited Amore Fitness Pte Ltd Total 5.1% 3.6% 2.9% 2.8% 2.8% 2.7% 2.6% 2.5% 2.5% 2.3% 29.8% Food & Beverage Beauty & Healthcare Fashion & Accessories Homeware & Furnishing Supermarket & Grocers Sundry & Services Information & Technology Sports Apparel & Equipment Books, Music, Arts & Craft, Hobbies Jewellery & Watches Vacant2 Total By NLA By GRI11 17.3% 16.6% 6.1% 10.3% 11.2% 5.3% 2.6% 1.6% 1.0% 0.1% 27.9% 28.0% 25.1% 10.7% 10.3% 10.2% 8.6% 2.4% 2.4% 1.9% 0.4% 0.0% 100.0% 100.0% Lease Expiry Profile3,12 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 54 66,851 34.6% 38.4% 32 66,182 34.2% 31.9% 26 28,510 14.7% 16.0% 8 26,387 13.6% 10.0% 4 5,629 2.9% 3.7% Total 124 193,559 100.0% 100.0% 1 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 2 Vacancies include units recovered for AEI works. 3 Excludes pre-committed AEI leases. 4 Operator of Cold Storage. 5 Operator of Don Don Donki. 6 7 8 9 10 Operator of Raffles Medical Clinic and Raffles Dental/ Women’s & Children’s Centre. 11 Excludes gross turnover rent. 12 Based on committed leases as at 30 September 2023; vacant floor area is excluded. Includes Kopitiam and Pezzo. Includes Shakura Pigmentation Beauty, London Weight Management and New York Skin Solutions. Includes Hooga and AKEMIUCHI. Includes Tim Ho Wan and Strip & Browhaus. 74 Frasers Centrepoint Trust Annual Report 2023 Property Profiles NORTHPOINT CITY NORTH WING AND YISHUN 10 RETAIL PODIUM NORTHPOINT CITY NORTH WING Description: Shopping mall comprising 4 storeys and 2 basement levels Address: 930 Yishun Avenue 2, Singapore 769098 Gross Floor Area: 34,985 sqm (376,579 sf) Net Lettable Area1: 21,361 sqm (229,931 sf) Car Park Lots: 256 Title: 99-year leasehold commencing 1 April 1990 Year Acquired by FCT: 2006 (Northpoint 1), 2010 (Northpoint 2) Valuation2: $782.0 million Green Building Certification: BCA Green Mark Gold (GM: 2021 In Operation) Annual Shopper Traffic: 56.7 million3 (October 2022 – September 2023) Key Tenants: Kopitiam, Don Don Donki, OCBC Bank, UOB Bank and Popular Bookstore YISHUN 10 RETAIL PODIUM Description: 10 retail units on the first storey in a cinema complex with basement carpark Address: 51 Yishun Central 1, Singapore 768794 Gross Floor Area: 966 sqm (10,398 sf) Net Lettable Area: 961 sqm (10,344 sf) Car Park Lots: 175 Title: 99-year leasehold commencing 1 April 1990 Year Acquired by FCT: 2016 Valuation2: $34.0 million Key Tenants: Sri Murugan Supermarket, Redman by Phoon Huat Northpoint City North Wing, which forms part of Northpoint City4 together with Northpoint City South Wing, is the largest mall in the North Region with over 400 retail stores and food and beverage outlets spread over more than 500,000 sf of space. Key tenants at Northpoint City North Wing include Kopitiam, Don Don Donki, OCBC Bank, UOB Bank and Popular Bookstore. The mall enjoys high shopper traffic flow from the surrounding residential estates, schools and the commuters from Yishun MRT station and Yishun Bus Interchange which are connected to the mall. FCT owns the ground floor retail of Yishun 10, a strata-titled retail development located next to Northpoint City North Wing. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 75 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million)3 FY2023 FY2022 Increase/ (Decrease) 57,126 15,690 41,436 99.7% 56.7 54,847 13,956 40,891 100.0% 47.6 4.2% 12.4% 1.3% (0.3%-point) 19.1% Top 10 Tenants Trade Mix As at 30 September 2023, Northpoint City North Wing and Yishun 10 Retail Podium have a total of 178 leases (FY2022: 179) and 173 tenants (FY2022: 174), excluding vacancy. The top 10 tenants contributed collectively 28.5% (FY2022: 26.4%) of the total GRI. Food & Beverage contributed 41.7% (FY2022: 41.7%) of the mall’s GRI, followed by Sundry & Services at 13.1% (FY2022: 13.0%) and Beauty & Healthcare at 12.6% (FY2022: 13.0%). These three trades accounted for 67.4% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) NTUC FairPrice5 Pan Pacific Retail Management (Singapore) Pte. Ltd.6 Oversea-Chinese Banking Corporation Limited United Overseas Bank Limited Minor Group7 Maybank Aspial Corporation8 Fei Siong9 Dairy Farm Group10 Maxim Group11 Total 6.5% 3.7% 3.1% 2.6% 2.3% 2.1% 2.1% 2.1% 2.1% 1.9% 28.5% Food & Beverage Sundry & Services Beauty & Healthcare Fashion & Accessories Supermarket & Grocers Jewellery & Watches Books, Music, Arts & Craft, Hobbies Homeware & Furnishing Sports Apparel & Equipment Information & Technology Education Leisure & Entertainment Vacant Total By NLA By GRI12 39.9% 8.8% 10.5% 8.9% 11.6% 2.0% 5.8% 2.7% 2.7% 2.4% 2.1% 2.3% 0.3% 41.7% 13.1% 12.6% 10.6% 6.3% 4.3% 2.7% 2.2% 2.1% 1.9% 1.5% 1.0% 0.0% 100.0% 100.0% Lease Expiry Profile13 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 56 67,128 32.3% 31.4% 46 45,221 21.7% 25.4% 53 55,650 26.7% 27.8% 21 22,785 11.0% 11.3% 2 17,191 8.3% 4.1% Total 178 207,975 100.0% 100.0% Includes Kopitiam and Crave. 1 The NLA includes the area of approximately 31,753 sf (2,950 sqm) currently used as CSFS space. 2 Valuation done by Savills Valuation and Professional Services (S) Pte Ltd as at 30 September 2023. 3 Combined shopper traffic of Northpoint City North Wing and South Wing. 4 Northpoint City is owned by FCT, Frasers Property Limited and TCC Prosperity Limited. 5 6 Operator of Don Don Donki. 7 8 9 10 Includes Guardian Health & Beauty and 7-Eleven. 11 Includes Starbucks Coffee and Genki Sushi. 12 Excludes gross turnover rent. 13 Based on committed leases as at 30 September 2023; vacant floor area is excluded. Includes Sanook Kitchen and Xin Wang Hong Kong Café. Includes Goldheart and Maxi-Cash. Includes Popeyes, Encik Tan, EAT., Nam Kee Pau and Hong Kong Egglet. 76 Frasers Centrepoint Trust Annual Report 2023 Property Profiles TIONG BAHRU PLAZA Description: Shopping mall comprising 4 storeys and 3 basement levels Car Park Lots: 338 carpark lots are shared between Tiong Bahru Plaza and Central Plaza Address: 302 Tiong Bahru Road, Singapore 168732 Gross Floor Area1: 48,235 sqm (519,202 sf) Net Lettable Area: 19,933 sqm (214,564 sf) Title: 99-year leasehold commencing 1 September 1991 Year Acquired by FCT: 2020 Valuation2: $657.0 million Green Building Certification: BCA Green Mark Platinum Annual Shopper Traffic: 16.5 million (October 2022 – September 2023) Key Tenants: FairPrice Finest, Golden Village, Don Don Donki, Uniqlo and Kopitiam Tiong Bahru Plaza is located in the charming Tiong Bahru estate with rich local heritage. The mall is near the city area and is easily accessible through public transport as it is directly connected to the Tiong Bahru MRT station on the East-West line. The mall offers a wide variety of retail, grocery, entertainment and food and beverage options for shoppers and diners. It draws its shoppers from the immediate residential catchment residing in the Tiong Bahru and Bukit Merah estates, as well as the working and student population in the vicinity and the adjacent office, Central Plaza. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 77 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 42,228 10,269 31,959 99.7% 16.5 41,358 10,345 31,013 99.0% 13.4 2.1% (0.7%) 3.1% 0.7%-points 23.1% Top 10 Tenants Trade Mix As at 30 September 2023, Tiong Bahru Plaza has a total of 151 leases (FY2022: 150) and 141 tenants (FY2022: 143), excluding vacancy. The top 10 tenants contributed collectively 28.2% (FY2022: 29.0%) of the total GRI. Food & Beverage contributed 38.6% (FY2022: 38.8%) of the mall’s GRI, followed by Beauty & Healthcare at 21.2% (FY2022: 20.7%) and Sundry & Services at 12.2% (FY2022: 12.3%). These three trades accounted for 72.0% of the mall’s GRI. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) NTUC FairPrice3 Beauty One International4 United Overseas Bank Limited Hanbaobao Pte Ltd5 DBS Bank Ltd Jean Yip Salon Pte Ltd6 Oversea-Chinese Banking Corporation Limited Uniqlo (Singapore) Pte Ltd Watson’s Personal Care Stores Pte Ltd Yum!7 Total 8.4% 3.5% 2.4% 2.3% 2.2% 2.1% 2.0% 1.8% 1.8% 1.7% 28.2% Food & Beverage Beauty & Healthcare Sundry & Services Fashion & Accessories Supermarket & Grocers Leisure & Entertainment Jewellery & Watches Education Information & Technology Homeware & Furnishing Books, Music, Arts & Craft, Hobbies Sports Apparel & Equipment Vacant Total By NLA By GRI8 27.6% 16.9% 9.2% 11.2% 12.5% 10.4% 1.0% 3.6% 2.5% 3.4% 1.1% 0.3% 0.3% 38.6% 21.2% 12.2% 9.4% 6.6% 2.5% 2.3% 2.2% 2.1% 1.7% 0.8% 0.4% 0.0% 100.0% 100.0% Lease Expiry Profile9 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 49 71,293 33.3% 30.8% 60 47,270 22.1% 33.7% 31 62,833 29.4% 24.0% 8 13,664 6.4% 6.4% 3 18,815 8.8% 5.1% Total 151 213,875 100.0% 100.0% Includes FairPrice Finest, Kopitiam, Pezzo and Crave. Includes Yun Nam Hair Care, Victoria Facelift, New York Skin Solutions, London Weight Management and Dorra Slimming. 1 Gross Floor Area (GFA) includes area of both Tiong Bahru Plaza and Central Plaza. 2 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 3 4 5 Operator of McDonald’s. Includes Jean Yip salon and Cheryl W. 6 Includes KFC and Pizza Hut. 7 8 Excludes gross turnover rent. 9 Based on committed leases as at 30 September 2023; vacant floor area is excluded. 78 Frasers Centrepoint Trust Annual Report 2023 Property Profiles CENTRAL PLAZA Description: Office building comprising 20 storeys and 3 basement levels Car Park Lots: 338 carpark lots are shared between Tiong Bahru Plaza and Central Plaza Address: 298 Tiong Bahru Road, Singapore 168730 Gross Floor Area1: 48,235 sqm (519,202 sf) Net Lettable Area2: 15,960 sqm (171,793 sf) Title: 99-year leasehold commencing 1 September 1991 Year Acquired by FCT: 2020 Valuation3: $217.5 million Green Building Certification: BCA Green Mark Platinum Annual Shopper Traffic: Not applicable Key Tenants: JustCo, National Council of Social Service, Nippon Steel Engineering and Kyocera Asia Pacific Central Plaza is a 20-storey office building, the office component of the mixed development comprising the shopping mall Tiong Bahru Plaza and Central Plaza. Central Plaza is directly connected to Tiong Bahru Plaza and both share a common car park with 338 parking lots. It offers excellent location advantage with close proximity to the Central Business District that is complemented with connection to public transport system and the amenities of an adjacent shopping mall. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 79 Office Performance Highlights Financial Year ended 30 September FY2023 FY2022 Increase/ (Decrease) Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Top 10 Tenants 10,250 3,603 6,647 95.3% 9,414 3,593 5,821 88.9% 8.9% 0.3% 14.2% 6.4%-points As at 30 September 2023, Central Plaza has a total of 33 leases (FY2022: 27) and 32 tenants (FY2022: 27), excluding vacancy. The top 10 tenants contributed collectively 65.6% (FY2022: 71.0%) of the total GRI. Top 10 Tenants as at 30 September 2023 National Council of Social Service Nippon Steel Engineering Co., Ltd. Kyocera Asia Pacific Pte. Ltd. Interplex Precision Technology (Singapore) Pte. Ltd. Molnlycke Health Care Asia-Pacific Pte Ltd BGC Group Pte. Ltd. Prive Jewel Pte. Ltd. MC Academy @ Central Plaza Pte. Ltd. Agency For Integrated Care Pte. Ltd. Blujay Solutions Pte. Ltd. Total Lease Expiry Profile4 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of office’s total leased area Expiries as % of office’s total GRI 7 25,233 18.5% 20.9% 7 35,414 25.9% 30.7% 11 29,470 21.6% 26.3% 6 16,609 12.1% 14.4% 2 29,967 21.9% 7.7% % of Mall’s GRI 13.6% 9.3% 8.7% 8.0% 5.9% 5.6% 4.2% 4.0% 3.2% 3.1% 65.6% Total 33 136,693 100.0% 100.0% 1 Gross Floor Area (GFA) includes area of both Tiong Bahru Plaza and Central Plaza. 2 The NLA includes the area of approximately 28,355 sf (2,634 sqm) currently used as CSFS space. 3 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 4 Based on committed leases as at 30 September 2023; vacant floor area is excluded. 80 Frasers Centrepoint Trust Annual Report 2023 Property Profiles CHANGI CITY POINT Description: Shopping mall comprising 3 storeys and 1 basement level Address: 5 Changi Business Park Central, Singapore 486038 Gross Floor Area: 28,463 sqm (306,376 sf) Net Lettable Area1: 19,681 sqm (211,845 sf) Car Park Lots2: 627 Title: 60-year leasehold commencing 30 April 2009 Year Acquired by FCT: 2014 Valuation3: $325.0 million Green Building Certification: BCA Green Mark Gold (GM: 2021 In Operation) Annual Shopper Traffic: 10.5 million (October 2022 – September 2023) Key Tenants: Nike Unite, My Kampung, Anytime Fitness and FairPrice Finest Changi City Point is located in Changi Business Park and near Singapore Expo, the largest convention and exhibition venue in Singapore. The mall offers a diverse shopping and dining experience to the nearby working and residential catchment. It features a variety of fashion and sports outlet retailers such as Nike Unite, Adidas Outlet, Puma Outlet and Coach Outlet, drawing shoppers from around Singapore and tourists with Changi Airport just a MRT stop away. On 30 August 2023, FCT announced the divestment of Changi City Point for $338.0 million. The divestment was completed on 31 October 2023. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 81 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 25,563 9,698 15,865 99.2% 10.5 23,935 9,365 14,570 93.7% 7.5 6.8% 3.6% 8.9% 5.5%-points 40.0% Top 10 Tenants Trade Mix As at 30 September 2023, Changi City Point has a total of 140 leases (FY2022: 139) and 131 tenants (FY2022: 128), excluding vacancy. The top 10 tenants contributed collectively 23.5% (FY2022: 22.6%) of the mall’s total GRI. Food & Beverage contributed 49.8% (FY2022: 50.3%) of the mall’s GRI, followed by Fashion & Accessories at 21.1% (FY2022: 22.4%) and Sports Apparel & Equipment at 14.4% (FY2022: 11.7%). These three trades accounted for 85.3% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) Nike Japan Foods Holding4 Yew Kee Group5 Cotton On Singapore Pte. Ltd. R E & S Enterprises Pte Ltd6 Jollibee Group7 Wing Tai Group8 The Dim Sum Place EN Group9 Manna Pot Catering Pte. Ltd.10 Total Lease Expiry Profile12 3.8% 3.5% 3.1% 2.3% 2.0% 1.9% 1.9% 1.7% 1.7% 1.6% 23.5% Food & Beverage Fashion & Accessories Sports Apparel & Equipment Beauty & Healthcare Supermarket & Grocers Sundry & Services Information & Technology Homeware & Furnishing Leisure & Entertainment Jewellery & Watches Vacant Total By NLA By GRI11 37.3% 17.3% 22.1% 7.4% 6.8% 2.0% 1.8% 3.9% 0.5% 0.1% 0.8% 49.8% 21.1% 14.4% 6.0% 2.4% 2.3% 2.1% 1.4% 0.3% 0.2% 0.0% 100.0% 100.0% As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 55 52,376 25.3% 28.7% 39 64,007 31.0% 31.2% 38 60,371 29.2% 30.6% 5 18,889 9.1% 6.2% 3 11,203 5.4% 3.3% Total 140 206,846 100.0% 100.0% 1 The NLA includes the area of approximately 3,391 sf (315 sqm) currently used as CSFS space. 2 The car park lots are shared between Changi City Point, Capri by Fraser, Changi City and ONE@Changi City. 3 Valuation done by Savills Valuation and Professional Services (S) Pte Ltd as at 31 July 2023. 4 Operator of Menzo Butao, Yakiniku Shokudo, Godaime and Fruit Paradise. 5 Operator of My Kampung food court. 6 Operator of Ichiban Sushi and Idaten Udon. 7 Operator of Jollibee. 8 9 Operator of Aburi-EN and Tamago-EN. 10 Operator of The White Tiffin and Manna Bistro & Grill. 11 Excludes gross turnover rent. 12 Based on committed leases as at 30 September 2023; vacant floor area is excluded. Includes Adidas, Cath Kidston and G2000 outlets. 82 Frasers Centrepoint Trust Annual Report 2023 Property Profiles CENTURY SQUARE Description: Shopping mall comprising 5 storeys and 3 basement levels Address: 2 Tampines Central 5, Singapore 529509 Gross Floor Area: 30,400 sqm (327,226 sf) Net Lettable Area1: 19,628 sqm (211,281 sf) Car Park Lots: 298 Title: 99-year leasehold commencing 1 September 1992 Year Acquired by FCT: 2020 Valuation2: $559.0 million Green Building Certification: BCA Green Mark Platinum Annual Shopper Traffic: 12.4 million (October 2022 – September 2023) Key Tenants: The Food Market, Cathay Cineplexes, Haidilao Hotpot, DBS/POSB and the upcoming FairPrice Finest Century Square is located in the heart of Tampines Central and is in close proximity to Tampines MRT interchange and Tampines Bus Interchange. The mall draws its shopper traffic from the populous residential catchment, commuter traffic and working population in the East region. The mall completed an extensive asset enhancement and refurbishment works in 2018. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 83 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 32,424 8,748 23,676 99.0% 12.4 31,456 9,609 21,847 86.8% 10.2 3.1% (9.0%) 8.4% 12.2%-points 21.6% Top 10 Tenants Trade Mix As at 30 September 2023, Century Square has a total of 147 leases (FY2022: 138) and 146 tenants (FY2022: 135), excluding vacancy. The top 10 tenants contributed collectively 25.4% (FY2022: 27.6%) of the mall’s total GRI. Food & Beverage contributed 41.2% (FY2022: 41.1%) of the mall’s GRI, followed by Beauty & Healthcare at 17.9% (FY2022: 21.6%) and Fashion & Accessories at 12.0% (FY2022: 13.0%). These three trades accounted for 71.1% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) BreadTalk Group3 Lao Huo Tang Group4 Singapore Hai Di Lao Dining Pte. Ltd. Foot Locker Singapore Pte. Ltd. Jean Yip Group5 Kiddy Palace Pte Ltd The Learning Lab R E & S Enterprises Pte Ltd6 Soup Restaurant Singapore Pte. Ltd. Bata Shoe (Singapore) Private Limited Total 6.7% 3.1% 3.1% 2.6% 1.8% 1.7% 1.6% 1.6% 1.6% 1.6% 25.4% Food & Beverage Beauty & Healthcare Fashion & Accessories Supermarket & Grocers Homeware & Furnishing Leisure & Entertainment Sports Apparel & Equipment Sundry & Services Education Books, Music, Arts & Craft, Hobbies Jewellery & Watches Information & Technology Electrical & Electronics Vacant Total By NLA By GRI7 31.3% 14.1% 9.9% 10.5% 3.7% 11.5% 4.2% 4.7% 4.7% 3.4% 0.5% 0.3% 0.2% 1.0% 41.2% 17.9% 12.0% 6.1% 4.2% 3.8% 3.8% 3.4% 2.9% 2.8% 1.1% 0.5% 0.3% 0.0% 100.0% 100.0% Lease Expiry Profile8 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 61 75,102 37.4% 44.0% 32 31,642 15.8% 18.6% 44 50,430 25.1% 26.0% 5 2,348 1.2% 2.3% 5 41,164 20.5% 9.1% Total 147 200,686 100.0% 100.0% 1 The NLA includes the area of approximately 8,547 sf (794 sqm) currently used as CSFS space. 2 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 3 Operator of The Food Market. 4 5 6 Operator of Ichiban Boshi. 7 Excludes gross turnover rent. 8 Based on committed leases as at 30 September 2023; vacant floor area is excluded. Includes Kenny Rogers Roasters and Lao Huo Tang. Includes 6 Elements Hair Spa and Cheryl W. 84 Frasers Centrepoint Trust Annual Report 2023 Property Profiles HOUGANG MALL Description: Shopping mall comprising 5 storeys and 2 basement levels Address: 90 Hougang Avenue 10, Singapore 538766 Gross Floor Area: 21,626 sqm (232,782 sf) Net Lettable Area1: 15,393 sqm (165,692 sf) Car Park Lots: 152 Title: 99-year leasehold commencing 1 May 1994 Year Acquired by FCT: 2020 Valuation2: $435.0 million Green Building Certification: BCA Green Mark Platinum Annual Shopper Traffic: 12.7 million (October 2022 – September 2023) Key Tenants: FairPrice, Foodies’ Garden, Harvey Norman and Popular Bookstore Hougang Mall is a suburban retail mall located near Hougang MRT station and Hougang Central Bus Interchange. The mall is popular with the residents and the communities of Hougang, Kovan, and even Sengkang and Buangkok, which are residential estates further afield. The mall offers a wide selection of daily necessities and essential services such as supermarket, food court, home furnishing retailers and clinics. Notable brands and services in the mall include FairPrice, Foodies’ Garden, Harvey Norman and Popular Bookstore. Cheng San Public Library is located within the building. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 85 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 31,564 9,269 22,295 100.0% 12.7 30,509 9,368 21,141 98.4% 9.4 3.5% (1.1%) 5.5% 1.6%-points 35.1% Top 10 Tenants Trade Mix As at 30 September 2023, Hougang Mall has a total of 130 leases (FY2022: 128) and 123 tenants (FY2022: 123). The top 10 tenants contributed collectively 34.6% (FY2022: 32.6%) of the mall’s total GRI. Food & Beverage contributed 37.3% (FY2022: 37.7%) of the mall’s GRI, followed by Beauty and Healthcare at 13.8% (FY2022: 13.7%) and Fashion & Accessories at 11.8% (FY2022: 11.6%). These three trades accounted for 62.9% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) NTUC FairPrice3 Collin’s Group4 Pertama Merchandising Pte Ltd5 Hanbaobao Pte Ltd6 R E & S Enterprises Pte Ltd7 Oversea-Chinese Banking Corporation Ltd Yum!8 United Overseas Bank Limited Popular Book Company (Pte.) Ltd Minoshe Group9 Total 10.3% 5.4% 3.2% 2.9% 2.9% 2.4% 2.2% 1.9% 1.8% 1.6% 34.6% Food & Beverage Beauty & Healthcare Fashion & Accessories Sundry & Services Supermarket & Grocers Education Jewellery & Watches Electrical & Electronics Books, Music, Arts & Craft, Hobbies Information & Technology Homeware & Furnishing Leisure & Entertainment Vacant Total By NLA By GRI10 28.9% 11.5% 9.9% 8.4% 15.4% 6.8% 1.3% 5.5% 4.6% 3.3% 2.4% 2.0% 0.0% 37.3% 13.8% 11.8% 9.5% 9.5% 3.4% 3.2% 3.2% 2.8% 2.4% 2.3% 0.8% 0.0% 100.0% 100.0% Lease Expiry Profile11 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 52 58,146 38.8% 42.6% 38 29,519 19.7% 21.0% 35 25,875 17.2% 19.8% 4 24,868 16.6% 11.2% 1 11,517 7.7% 5.4% Total 130 149,925 100.0% 100.0% Includes FairPrice, Unity Pharmacy, Pezzo and Crave. 1 The NLA includes the area of approximately 15,767 sf (1,465 sqm) currently used as CSFS space. 2 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 3 4 Operator of Foodies’ Garden. 5 Operator of Harvey Norman. 6 Operator of Mcdonald’s. 7 8 Operator of KFC. 9 10 Excludes gross turnover rent. 11 Based on committed leases as at 30 September 2023; vacant floor area is excluded. Includes Ichiban Sushi, Yakiniku-GO & Tsukimi Hamburg. Includes Young Hearts, Pierre Cardin and Sorella. 86 Frasers Centrepoint Trust Annual Report 2023 Property Profiles WHITE SANDS Description: Shopping mall comprising 5 storeys and 3 basement levels Address: 1 Pasir Ris Central Street 3, Singapore 518457 Gross Floor Area: 21,112 sqm (227,250 sf) Net Lettable Area1: 13,970 sqm (150,374 sf) Car Park Lots: 187 Title: 99-year leasehold commencing 1 May 1993 Year Acquired by FCT: 2020 Valuation2: $429.0 million Green Building Certification: BCA Green Mark Platinum Annual Shopper Traffic: 10.7 million (October 2022 – September 2023) Key Tenants: FairPrice, Cookhouse by Koufu, McDonald’s and Popular Bookstore White Sands is located in Pasir Ris, a residential estate in the East region of Singapore next to Pasir Ris MRT Station and Pasir Ris Bus Interchange. White Sands is a convenient destination for necessity shopping, essential services, lifestyle and entertainment needs. Key tenants at the mall include FairPrice, Cookhouse by Koufu, McDonald’s and Popular Bookstore. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 87 Mall Performance Highlights Financial Year ended 30 September Gross Revenue ($’000) Property Expenses ($’000) Net Property Income ($’000) Committed Occupancy Shopper Traffic (million) FY2023 FY2022 Increase/ (Decrease) 30,878 10,464 20,414 99.5% 10.7 28,769 8,524 20,245 96.4% 8.4 7.3% 22.8% 0.8% 3.1%-points 27.4% Top 10 Tenants Trade Mix As at 30 September 2023, White Sands has a total of 140 leases (FY2022: 134) and 130 tenants (FY2022: 126), excluding vacancy. The top 10 tenants contributed collectively 34.5% (FY2022: 32.7%) of the mall’s total GRI. Food & Beverage contributed 41.7% (FY2022: 40.5%) of the mall’s GRI, followed by Beauty & Healthcare at 19.9% (FY2022: 19.0%) and Sundry & Services at 10.9% (FY2022: 10.9%). These three trades accounted for 72.5% of the mall’s GRI. The breakdown of the trade category by NLA and GRI is presented below. Top 10 Tenants as at 30 September 2023 % of Mall’s GRI Trade Category (in descending order of GRI) NTUC FairPrice3 Koufu Group4 Beauty One International5 Minor Group6 Hanbaobao Pte Ltd7 Oversea-Chinese Banking Corporation Ltd Watson’s Personal Care Stores Pte Ltd DBS Bank Ltd Yum!8 Dairy Farm Group9 Total 9.8% 4.2% 3.9% 3.7% 3.2% 2.4% 2.0% 2.0% 1.8% 1.5% 34.5% Food & Beverage Beauty & Healthcare Sundry & Services Fashion & Accessories Supermarket & Grocers Education Homeware & Furnishing Books, Music, Arts & Craft, Hobbies Sports Apparel & Equipment Information & Technology Leisure & Entertainment Jewellery & Watches Vacant Total By NLA By GRI10 35.8% 17.2% 9.4% 8.5% 13.5% 5.3% 2.6% 3.0% 0.9% 1.1% 2.0% 0.2% 0.5% 41.7% 19.9% 10.9% 9.5% 7.7% 3.5% 2.3% 1.6% 0.9% 0.8% 0.8% 0.4% 0.0% 100.0% 100.0% Lease Expiry Profile11 As at 30 September 2023 FY2024 FY2025 FY2026 FY2027 FY2028 and beyond Number of expiring leases NLA of expiring leases (sf) Expiries as % of mall’s total leased area Expiries as % of mall’s total GRI 37 26,366 20.6% 24.9% 44 33,152 25.9% 26.3% 43 44,571 34.8% 31.7% 15 21,805 17.1% 15.9% 1 2,089 1.6% 1.2% Total 140 127,983 100.0% 100.0% Includes FairPrice, Unity Pharmacy, Crave and Pezzo. Includes Cookhouse by Koufu and Dough Culture. Includes New York Skin Solutions, Dorra Slimming and Victoria Facelift. Includes Xin Wang Hong Kong Café, Poulet and UFO Hot Pot by ThaiExpress. 1 The NLA includes the area of approximately 21,744 sf (2,020 sqm) currently used as CSFS space. 2 Valuation done by Jones Lang LaSalle Property Consultants Pte Ltd as at 30 September 2023. 3 4 5 6 7 Operator of McDonald’s. 8 Operator of KFC. 9 Operator of Guardian Health & Beauty. 10 Excludes gross turnover rent. 11 Based on committed leases as at 30 September 2023; vacant floor area is excluded. 88 Frasers Centrepoint Trust Annual Report 2023 Property Directory Causeway Point Address: 1 Woodlands Square, Singapore 738099 Telephone: (65) 6894 2237 NEX Address: 23 Serangoon Central, Singapore 556083 Telephone: (65) 6416 6366 Tiong Bahru Plaza Address: 302 Tiong Bahru Road, Singapore 168732 Telephone: (65) 6276 4686 Mall website: https://www.causewaypoint.com.sg Mall website: https://www.nex.com.sg Mall website: https://www.tiongbahruplaza.com.sg Century Square Address: 2 Tampines Central 5, Singapore 529509 Telephone: (65) 6789 6261 Mall website: https://www.centurysquare.com.sg Changi City Point1 Address: 5 Changi Business Park Central 1, Singapore 486038 Hougang Mall Address: 90 Hougang Avenue 10, Singapore 538766 Telephone: (65) 6488 9617 Mall website: https://www.hougangmall.com.sg Northpoint City North Wing Address: 930 Yishun Avenue 2, Singapore 769098 Telephone: (65) 6754 2300 Mall website: https://www.northpointcity.com.sg Yishun 10 Retail Podium Address: 51 Yishun Central 1, Singapore 768794 Tampines 1 Address: 10 Tampines Central 1, Singapore 529536 Telephone: (65) 6572 5522 Mall website: https://www.tampines1.com.sg Central Plaza2 Address: 298 Tiong Bahru Road, Singapore 168730 Waterway Point Address: 83 Punggol Central, Singapore 828761 Telephone: (65) 6812 7300 Mall website: https://www.waterwaypoint.com.sg White Sands Address: 1 Pasir Ris Central Street 3, Singapore 518457 Telephone: (65) 6585 0606 Mall website: https://www.whitesands.com.sg 1 FCT completed the divestment of Changi City Point on 31 October 2023. 2 Central Plaza is an office property that is connected to Tiong Bahru Plaza. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 89 Investment in Hektar REIT As at 30 September 2023, FCT holds 30.97% 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. On 22 September 2023 and 4 October 2023, FCT entered into sale and purchase agreements with unrelated third parties in relation to the divestment of interest in H-REIT and accordingly, investment in H-REIT was reclassified to “Assets held for sale” as at 30 September 2023. FCT announced the completion of the divestment of its entire interest in H-REIT on 6 December 2023. H-REIT’s property portfolio consists of six shopping centres in the Northern, Central and Southern Regions of Peninsular Malaysia. These six shopping centres are Subang Parade (Selangor), Mahkota Parade (Melaka), Wetex Parade (Johor), Central Square (Kedah), Kulim Central (Kedah) and Segamat Central (Johor). The properties in H-REIT portfolio have a total NLA of approximately 2.0 million sf and a combined value of approximately RM1,206.1 million ($351.4 million). H-REIT Property Profile1 State Title NLA (Retail), sf as at 31 December 2022 Tenancies as at 31 December 2022 (NLA lots only) Occupancy as at 31 December 2022 Visitor traffic FY2022 (million) Acquisition price (RM million) Valuation (RM million) as at 31 December 2022 Gross revenue (RM million) Net property income (RM million) Top 10 Tenants1 Subang Parade Mahkota Parade Wetex Parade Central Square Kulim Central Segamat Central Selangor Freehold 527,139 Melaka Leasehold (expires 2101) 521,142 Johor Freehold Kedah Freehold Kedah Freehold 174,651 310,564 299,781 Johor Leasehold (expires 2116) 211,919 74 84 54 45 73 35 70.3% 86.9% 88.1% 82.3% 96.4% 73.7% 4.7 280.0 417.0 32.5 13.1 6.0 232.0 338.5 38.0 20.8 2.9 117.5 156.6 16.8 8.7 2.7 83.0 91.0 9.5 4.6 2.9 98.0 138.0 15.9 11.1 1.8 104.0 65.0 4.8 0.4 The top ten tenants in the portfolio contributed approximately 39.9% of total monthly rental income, providing a diversified revenue base. Aside from the top tenant, Parkson, which contributed approximately 13% of monthly rental income, no other tenant contributed more than 10%. Tenant Trade Category NLA (sf) % of total NLA % of total monthly rental income Parkson The Store GSC Watson’s Mr D.I.Y Seleria Food Court Guardian Giant Superstore MM Cineplexes KFC Top 10 Tenants (by Monthly Rental Income) Other Tenants Total Department Store/Supermarket Department Store/Supermarket Leisure & Entertainment/Sports & Fitness Health & Beauty Homewares & Furnishing Food & Beverage/Food Court Health & Beauty Department Store/Supermarket Leisure & Entertainment/Sports & Fitness Food & Beverage/Food Court Based on monthly rental income for December 2022. Note: Total may not add up due to rounding differences. 252,515 273,198 88,670 11,965 74,301 47,760 12,164 72,140 75,928 15,792 924,432 1,120,764 2,045,196 12.3% 13.4% 4.3% 0.6% 3.6% 2.3% 0.6% 3.5% 3.7% 0.8% 45.2% 54.8% 100.0% 13.0% 9.2% 2.6% 2.5% 2.3% 2.2% 2.1% 2.1% 1.9% 1.8% 39.9% 60.1% 100.0% 1 Source: Hektar REIT Annual Report 2022 and its website at http://www.hektarreit.com/. Information as at 31 December 2022. 90 Frasers Centrepoint Trust Annual Report 2023 Investment in Hektar REIT Portfolio Tenancy Mix1 The largest rental contributors to the portfolio are tenants from the Department Store/Supermarket and the Food & Beverage/Food Court segments. Both segments contributed 46% of the portfolio’s total rental income. In terms of NLA occupancy, Department Store/Supermarket tenants continue to dominate the portfolio by taking up 41% of all available NLA. Segment % of overall portfolio NLA % of portfolio rental income Department Store/Supermarket Food & Beverage/Food Court Fashion & Footwear Health & Beauty Leisure & Entertainment/Sports & Fitness Electronics & IT Homewares & Furnishing Gifts/Books/Toys/Specialty Education/Services Based on monthly rental income for December 2022. Note: Total may not add up due to rounding differences. Portfolio Lease Expiry Profile1 41% 12% 11% 3% 18% 4% 7% 2% 1% 26% 20% 20% 10% 7% 8% 4% 4% 1% A total of 213 tenancies will expire in 2023 representing approximately 47.1% of NLA and 57.5% of monthly rental income as at 31 December 2022. For Year ending 31 December No. of tenancies expiring NLA of tenancies expiring (sf) NLA of tenancies expiring as % of total NLA % of total monthly rental income 2023 2024 2025 213 94 58 962,565 528,121 187,202 47.1% 25.8% 9.2% 57.5% 30.5% 12.0% Based on monthly rental income for December 2022. Note: Total may not add up due to rounding differences. 1 Source: Hektar REIT Annual Report 2022 and its website at http://www.hektarreit.com/. Information as at 31 December 2022. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 91 Risk Management Effective risk management is a fundamental part of Frasers Centrepoint Trust and its subsidiaries’ (“FCT Group”) business strategy. Key risks, mitigating measures and management actions are continually identified, reviewed and monitored by management of the Manager (the “Management”) as part of the Manager’s enterprise-wide risk management (the “ERM”) framework. Recognising and managing risks are central to the business and for protecting Unitholders’ interests. Governance and Oversight The Board of Directors of the Manager (the “Board”) is responsible for the governance of risks and ensuring that the Manager maintains a sound system of 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 Group’s assets and the interests of FCT and its Unitholders. The Audit, Risk and Compliance Committee (the “ARCC”) 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. Risk Management Process Risk Assessment • Risk assessment parameters - impact, likelihood • Risk prioritisation Risk Identification • Strategic risks • Operation risks • Financial risks • Compliance risks • Information Technology risks • ESG risks • Emerging risks Risk Treatment • Mitigating measures - Accept, Avoid, Reduce, Transfer Risk Monitoring • Risk tolerance • Key risk indicators Risk Reporting • Quarterly risk review • Quarterly reporting on material risk areas • Quarterly risk tolerance limits compliance reporting • Annual ERM validation with annual review of risk tolerance statements • Annual comfort matrix 92 Frasers Centrepoint Trust Annual Report 2023 Risk Management As part of the risk management process, Management is responsible for identifying, assessing, managing, monitoring and reporting risks to the ARCC. This process is facilitated through a web-based corporate risk scorecard system which enables the reporting of risks and risk status on a common platform in a consistent and cohesive manner. Management is also responsible for the implementation of the risk management process and ensuring that the risk management framework is adequate and effective to provide assurance to the ARCC and the Board that material and relevant risks are identified and managed. Apart from the ERM process, each acquisition or divestment transaction is also subjected to a comprehensive due diligence review where the relevant and material risks associated with the transaction are identified and assessed. FCT Group’s ERM framework promotes a risk management culture. The Manager works closely with Frasers Property Limited’s Group Risk Management Team to conduct workshops where necessary to reinforce and enhance risk management knowledge and management principles. Risk Management E-learning modules are rolled out for new and existing employees to enhance risk awareness and capability. In our approach towards business continuity management, the Manager identifies and maps end- to-end dependencies that support the critical business services, prioritising the recovery of our business services and functions based on their criticality to minimise the degree of disruption, safeguard Unitholders’ interests and maintain the safety and soundness of FCT. FCT Group conducts regular and comprehensive testing to ensure response and recovery arrangements are robust. Key Risks Some of the key risks, including those related to material sustainability factors, that the Manager has been actively monitoring in FY2023 include: place crisis management and business continuity plans, with clear protocols of activation in the event of emergencies. In addition, insurance policies are in place to mitigate claims and/or losses resulting from unforeseen events. Macroeconomic Risk Human Capital Risk While FCT Group’s portfolio is predominantly in Singapore, volatility in global economies, rising geo-political tensions and global inflationary pressures can have impact on the domestic economy. Coupled with rapidly changing retail market trends and a limited pool of prospective tenants, this results in a challenging business climate with higher business costs. The Manager actively monitors the macroeconomic trends, policies, regulatory changes and retail market trends, as well as continuously seeks to strengthen FCT Group’s competitiveness through active lease management and asset enhancement works. Operational Risk Any unanticipated significant disruption to the operations of the properties will impact business continuity and profitability. The Manager has established 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 the properties. These procedures cover various areas such as workplace safety and security incidents. These procedures and guidelines are regularly reviewed and benchmarked against industry best practices to ensure relevance and effectiveness. The Manager remains vigilant towards making the properties safe and secure for the tenants, customers, vendors, employees and any other third parties. The Manager has in A competent management team is a key factor in achieving FCT’s business objectives and the Manager faces the risk of loss of key management personnel and the inability to attract / retain talent for its management team. The Manager has in place a performance management framework and development system for its staff and implemented competitive reward schemes to attract and retain appropriate talent for the business. There is also an annual talent review process to identify key leadership and business critical positions. Regular training sessions and development opportunities are also provided to upgrade the skills and knowledge of the staff. An organisational culture survey was rolled out in 2023 to measure employee engagement and sentiments with the aim to shape a purpose-led culture aligned with our business strategy. Fraud and Corruption Risk To safeguard FCT Group’s assets and FCT’s and its Unitholders’ interests, the Manager does not condone any acts of fraud, corruption or bribery by employees in the course of our business activities. The Manager adheres to the various policies and guidelines established by Frasers Property Limited, including a Code of Business Conduct and an Anti- Bribery Policy, to guide employees on business practices, standards and conduct expected during their employment. The Manager has put in place a Whistle-Blowing Policy (“Whistle- Blowing Policy”). The Whistle- Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 93 Blowing Policy provides an independent feedback channel through which matters of concern about possible improprieties in matters of financial reporting, suspected fraud and corruption or other matters may be raised by employees and any other persons in confidence and in good faith, without fear of reprisal. The ARCC reviews and ensures that independent investigations and appropriate follow-up actions are carried out. More details can be found in the Corporate Governance section of this Annual Report on pages 139 to 178. Liquidity Risk Capital and liquidity management are an integral part of FCT’s business to achieve its objectives. Insufficient liquidity will result in FCT Group’s inability to meet its debt obligations and hence its survival. In ensuring a prudent financial structure for FCT Group, the Manager adheres closely to the covenants in the loan agreements and Appendix 6 (Investment: Property Funds) of the Code on Collective Investment Schemes (the “CIS”) issued by Monetary Authority of Singapore. In addition, the Manager proactively manages FCT Group’s cashflow position and liquidity requirements. In view of the challenges posed by the global inflationary pressures, the Management regularly conducted stress testing to assess and track the possible impact of the macroeconomic environment on the FCT Group’s liquidity and cashflow. Capital and liquidity management remain priorities for FCT Group. The Manager actively monitors its debt maturity profile and operating cashflows. FCT Group has undrawn revolving credit facilities totaling $488.4 million as of 30 September 2023 to ensure adequacy of liquidity reserves to finance FCT Group’s operations, capital expenditures, asset enhancement initiatives (“AEIs”) and any other unforeseen short-term obligations. FCT Group’s liquidity is supported by its long-term banking relationships and track record of strong access to the debt capital market. Please refer to page 40 under Capital Resources section on the various sources of funds. The Manager continues to comply with its policy of spreading out the debts maturing in a single year. Interest Rate Risk Rising interest rates and cost of capital can impact the profitability of FCT Group and the distributable income available to Unitholders. Interest rate risk is proactively managed by the Manager with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates. The Manager closely monitors the interest rate environment with support from Frasers Property Limited’s Group Treasury to mitigate the difficulties in raising debt at reasonable cost in view of the ongoing interest rate hike. As at 30 September 2023, 63.0% of the total borrowings are on fixed interest rates. Credit Risk Credit risk arising from uncollectible debts of tenants affects FCT Group’s cashflow and profitability. The Manager monitors the debt levels on an ongoing basis and remains vigilant in its debt collection procedures. Credit evaluations are performed before lease agreements are entered into with tenants or before lease terms with existing tenants are extended. Credit risk is also mitigated by collecting rental deposits via cash or banker’s guarantee from the tenants. Investment Risk FCT is exposed to the risk of lower returns from its investments than expected. As FCT Group 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, asset sustainability attributes, environmental impact metrics, and future growth potential, having due regard to market conditions and outlook. Compliance Risk FCT Group is subject to relevant laws and regulations including the Listing Manual of the Singapore Exchange Securities Trading Limited, the CIS, the tax rulings issued by the Inland Revenue Authority of Singapore and the upcoming Lease Agreements for Retail Premises Act 2023. Any changes to these regulations may affect FCT Group’s operations and results. The Manager 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, attending talks and briefings. Information Systems and Cybersecurity Risk Cybersecurity incidents or system failures can lead to business disruptions, financial loss and / or regulatory penalties. Digital disruption and the future of work that are enabled by digital technology offer new opportunities and challenges for our business. 94 Frasers Centrepoint Trust Annual Report 2023 Risk Management Environment and Climate Change Risk Climate change and potentially catastrophic weather events expose FCT Group to environmental and sustainability risks, including the impact of rising operating costs from physical and transition risks of climate change. The growing emphasis of government regulations on sustainability, environmental laws and green finance laws creates a challenge to meet regulatory requirements amidst rising cost from capital expenditure. In order to meet the stringent green building and green loans requirements for sustainability financing, the Manager constantly monitors green finance trends and compliance requirements of green building. Training and workplace bulletins are in place to update employees’ sustainability knowledge and align operational objectives to the strategic direction of the FCT Group. Please refer to pages 95 to 138 under the Sustainability Report section on the FCT Group’s effort to comply with the Environmental Risk Management Guidelines. Frasers Property, of which the Manager is part of, continues to build digital capabilities and invest in new technologies to ensure that the FCT Group’s business is future-ready. This includes embracing of cloud technology to provide a higher level of business agility, scalability, cost competitiveness. Group-wide policies, standards and procedures and security technology solutions have been put in place to ensure the confidentiality, availability, and integrity of Information Technology (“IT”) systems, as well as to ensure that cybersecurity threats are managed. Disaster recovery plans and incident management procedures have been developed and are tested regularly. Measures and considerations have also been taken to enable effective privileged access monitoring, patch management, data security, data protection and safeguard against prolonged service unavailability of critical IT systems. Periodic IT security training sessions are conducted for new and existing employees to raise IT security awareness on the evolving threats landscape. External professional service providers are engaged to conduct independent vulnerability assessment and penetration tests to further strengthen the IT systems. At the management level, the appointed Chief Information Officer and Chief Information Security Officer manage the technology risks of FCT Group and take all decisions in accordance with the risk appetite approved by the Board. The Manager monitors the compliance with applicable regulations on an ongoing basis, using the toolkits and quarterly compliance checklists created for periodic reporting. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 95 Sustainability Report Contents Glossary Board Statement 96 97 FY2023 Performance 98 Our Approach to ESG Acting Progressively 105 Risk-based Management 108 Responsible Investment 108 Resilient Properties 114 Innovation Consuming Responsibly 116 Energy and Carbon 118 Water 119 Waste 120 Materials and Supply Chain 121 Biodiversity Focusing on People 123 Diversity, Equity and Inclusion 125 Skills and Leadership 126 Health and Well-being 128 Community Connectedness Appendix 130 About This Report 131 134 GRI Content Index Independent Assurance Statement A glossary of the abbreviations used in this report: AEI ARCC BCA CCTV DDC DEI EHS ERM ESG F&B FCAM FCT FRx GBP GFA GHG GLP GRESB GRI IA ICMA IoT ISAE 3000 : Asset Enhancement Initiative : Audit, Risk and Compliance Committee : Building and Construction Authority, Singapore : Closed-Circuit Television : Distributed District Cooling : Diversity, Equity and Inclusion : Environmental, Health and Safety : Enterprise Risk Management : Environmental, Social and Governance : Food and Beverage : Frasers Centrepoint Asset management Ltd., the Manager of FCT : Frasers Centrepoint Trust : Frasers Experience : Green Bond Principles : Gross Floor Area : Greenhouse Gas : Green Loan Principles : Global Real Estate Sustainability Benchmark : Global Reporting Initiative : Internal Audit : International Capital Market Association : Internet of Things : International Standard on Assurance Engagements 3000 ISO 14001 : International Organisation for Standardisation ISO 45001 (Environmental Management System) : International Organisation for Standardisation (Occupational Health and Safety Management System) ISO 50001 : International Organisation for Standardisation KPI L&D MAS NGOs OH&S ORBA PV PUB Q-CON REIT REITAS SBTi SBG SDG SGBC SGX SIAS SRA SRMC SSWG SWC SX 2022 TAFEP (Energy Management System) : Key Performance Indicator : Learning and Development : Monetary Authority of Singapore : Non-governmental Organisations : Occupational Health and Safety : Orchard Road Business Association : Photovoltaic : Public Utilities Board, Singapore : Quality Construction Products Public Company Limited : Real Estate Investment Trust : REIT Association of Singapore : Science Based Targets initiative : Sustainability Bond Guidelines : Sustainable Development Goal : Singapore Green Building Council : Singapore Exchange Limited : Securities Investors Association (Singapore) : Singapore Retailers Association : Sustainability and Risk Management Committee : National Safety and Security Watch Group : Sustainability Working Committee : Sustainability Expo 2022 : Tripartite Alliance for Fair and Progressive Employment Practices TCFD : Task Force on Climate-related Financial UN UNGC UNWEP UV WEB WSH Disclosures : United Nations : United Nations Global Compact : United Nations Women Empowerment Principles : Ultraviolet : Water Efficient Building : Workplace Safety and Health 96 Frasers Centrepoint Trust Annual Report 2023 Board Statement GRI 2-22 Dear Stakeholders, FY2023 has been a challenging yet fulfilling year for FCT. While the macro-economic environment remains volatile, marked by inflation and surges in energy costs, and extreme climate change events pose threats to our assets and supply chains, we remain steadfast in our commitment to press on with our sustainability endeavours, and ensure that we continue to deliver on our shared Purpose - Inspiring experiences, creating places for good. In FY2023, we have continuously driven portfolio and built a resilient, diversified portfolio of quality assets while also engaging in green and sustainable financing. We have also made progress in our green financing efforts. The proportion of green loans in FCT’s total borrowing rose to 55.6% as at 30 September 2023 from 31.9% last year. We expect to further increase this proportion of green loans going forward. We have also partnered with OCBC on a new green financing solution that packages carbon credits with a green loan that helps support our net-zero carbon goal. In line with our sustainability roadmap, we continue to align this year’s sustainability disclosures with the TCFD recommendations. FCT’s FY2023 Sustainability Report provides an overview of our sustainability performance and efforts throughout the year. Beyond that, it also highlights how we continue to further our sustainability goals through the three pillars of our Sponsor Frasers Property’s ESG Framework – Acting Progressively, Consuming Responsibly and Focusing on People. As one of the largest suburban retail mall owners in Singapore, we are cognisant of our pivotal role in minimising our environmental impact, whether it involves greening our properties, or imparting eco- conscious practices to employees, tenants, shoppers and the broader community. We continue to embrace innovation and leverage technology to optimise energy efficiency at our properties. This encompasses key initiatives such as upgrading the cooling systems as well as retrofitting more energy efficient LED lighting at selected properties. These dedicated efforts align us with Frasers Property’s strategic ESG goal of achieving net-zero carbon emissions by 2050. As testament to our efforts, we are proud to share that we have achieved a 5-Star Rating at the 2023 GRESB Real Estate Assessment, marking the third consecutive year that we have attained this rating. This assessment is significant as it enables our stakeholders to benchmark FCT’s performance with its global real estate peers in the same sector. FCT has also maintained its “A” rating from the MSCI ESG Ratings in 2023, underscoring our progress in effectively managing ESG risks and opportunities. As we advance on our sustainability journey, we continue to keep our people at the heart of all we do. We uphold stringent workplace health and safety standards across our business, including having all properties certified with ISO 45001 occupational health and safety management systems. We recognise FCT’s influence in partnering our tenants in driving greater environmental and social impact. Tenants from FCT malls participated in the inaugural “Building a Greener Retail Ecosystem Together” event organised by Frasers Property Singapore. We also seek to engage and contribute to the local communities where we operate. FCT malls are contributing to an industry-first Inclusion Champions Programme by Frasers Property Singapore, geared towards creating more inclusive spaces and experiences for members of the community who have different needs. Reflecting on the past year, we are heartened by the progress we have made towards our sustainability goals. We are grateful for the invaluable support of our employees and stakeholders, which have enabled us to remain steadfast in our commitment to sustainable practices. Moving forward, we embrace the opportunity to accelerate change and create a positive impact through our business by further integrating ESG factors into our strategy and operations. While we acknowledge that there will be ongoing and new challenges on the horizon, we are confident that we can chart a sustainable path forward and create long-term value for all our stakeholders. Board of Directors Frasers Centrepoint Asset Management Ltd. as Manager of Frasers Centrepoint Trust Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 97 FY2023 Performance The Year At A Glance ACTING PROGRESSIVELY CONSUMING RESPONSIBLY FOCUSING ON PEOPLE Maintain “A” rating in ESG rating by MSCI ESG Rating 147 MWh of renewable energy generated onsite Partner with OCBC on a new green financing solution that packages carbon credits with a green loan to help accelerate our progress towards carbon-neutral status encompassing all energy- related emissions Raised the proportion of green loans to 55.6%1 as of 30 September 2023 from 31.9% as of 30 September 2022 Reduced Scope 1 & 2 emission intensity by 12.8% from FY2019 baseline Reduced water intensity by 16.3% from FY2019 baseline Reduced waste intensity by 8.4% from FY2019 baseline Collected more than 2,189 tonnes of waste for recycling, a 10.1% increase compared to FY2022 Expanded Scopes 1 and 3 disclosure with the planned publication of an ESG Databook Women made up 25% and 40% of the Board of Directors and senior management respectively Each employee completed an average of 26 learning hours Majority2 of Board members underwent sustainability training All new hires are trained on sustainability via an e-learning module Safety-first approach with all properties certified with ISO 45001 occupational health and safety management systems and all properties with BizSAFE STAR During the year, various initiatives such as the Inclusion Champions Programme and Paint it Forward were implemented in FCT malls. These initiatives aim to build stronger inclusiveness and a sense of belonging with FCT’s stakeholders in the community Collected 6.6 tonnes of food for donation to Food Bank Singapore 1 The proportion of green loans in FCT’s total borrowing included FCT’s proportionate effective interest in SST which owns Waterway Point and the proportionate effective interest in GRPL which owns NEX. As at 30 September 2023, FCT owns 50.00% effective interest in SST and 25.50% effective interest in GRPL. 2 All directors, except Mr Tan Siew Peng (Darren), have undergone the training. Mr Tan, who was recently appointed to the board on 26 September 2023, will be enrolling for the mandatory director’s training under SGX’s Listing Rules Practice Note 2.3, which includes the sustainability module. He has 1 year from appointment to undergo the mandatory training. 98 Frasers Centrepoint Trust Annual Report 2023 Building A Resilient Future: Our Approach To ESG Embedding Sustainability Within Our Core As one of Singapore’s largest suburban retail mall owners, we are cognisant of our duty as responsible stewards of the environment and of the communities that we serve. This underpins our commitment to sustainability and responsible business practices. Our sustainability strategy is grounded in Frasers Property’s Sustainability Framework (the “Framework”) which comprises three core pillars: Acting Progressively, Consuming Responsibly and Focusing on People. These pillars encompass ESG focus areas which we have identified as most pertinent for our business and operations. ACTING PROGRESSIVELY Pillars CONSUMING RESPONSIBLY Focus areas Risk-based Management Comprehensive assessment to address environmental, health and safety risks Energy and Carbon Increasing substantially energy efficiency and renewable energy used Responsible Investment Incorporating social, environment and governance criteria in the evaluation process Resilient Properties Strengthening the resilience and climate adaptive capacity Innovation Fostering an innovation culture that creates value and strengthens our competitive edge Water Increasing substantially water efficiency and the recycling and safe reuse of water discharged Waste Reducing substantially waste generation through prevention, reduction, recycling and reuse Materials and Supply Chain Achieving the sustainable management and efficient use of materials along the supply chain Biodiversity Enhancing the environment and ecosystem through our developments FOCUSING ON PEOPLE Diversity, Equity and Inclusion Empowering and promoting the social inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion, economic or other status Skills and Leadership Developing skills and leadership programmes that support productive activities, creativity and innovation to deliver high- value products and services Health and Well-being Ensuring healthy and balanced work and community environments Community Connectedness Considering social value principles for communities Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 99 Our ESG Roadmap The Framework guides us to direct our efforts and resources to address the ESG focus areas where we can make the most positive impact. We develop and execute our ESG action plans aligning to Frasers Property’s long-term goals. In FY2023, Frasers Property refreshed the Group ESG goals following a benchmark and review of the progress against targets announced in FY2021. The refresh took in a range of considerations including a market review of global sustainability trends, a stakeholder survey exercise in FY2022, and evolving regulatory requirements. The refreshed Group ESG goals are presented below: 1 2 3 4 5 6 Achieve net-zero carbon across Scopes 1, 2 and 3 by 2050. Install 215 MW of renewable energy on properties by 2030. Deploy group- wide climate risk analytics platform to identify, assess and manage climate-related risks by FY2024. Have 100% by GFA of new development projects, and 85% of owned and asset-managed properties, be either green- certified or pursuing green certification by 2030. Engage 75% of our suppliers by spend on our Responsible Sourcing Policy by FY2025. Develop a framework to assess and prioritise biodiversity risks and opportunities by FY2025. We are committed to aligning and rejuvenating our sustainability objectives in accordance with Frasers Property’s ESG goals. 100 Frasers Centrepoint Trust Annual Report 2023 Managing Sustainability GRI 2-9 Sustainability Governance REIT Association of Singapore (REITAS) Ensuring transparency, accountability and integrity alongside our sustainability approach is a tenet of good governance and demonstrates our efforts to build trust with stakeholders. FCT has put in place a sustainability governance structure to ensure we align our sustainability goals with the overall business strategy and integrate sustainability considerations into our long-term plan and operations. To ensure a cohesive governance approach, we collaborate closely with our Sponsor, Frasers Property. This alignment extends to our shared sustainability agenda, guided by the Group Sustainability Steering Committee (“SSC”). This committee, consisting of Chief Executive Officers across the business units in Frasers Property as well as other senior management, convenes six times annually to drive Group-wide sustainability strategies, and monitor sustainability performance against key metrics and endorse action plans throughout the Group. The SSC is supported by the Frasers Property’s ESG Team, which also provides support to FCT on the execution of their ESG strategies and ensure alignment between Group and business unit ESG activities. The management team of FCT collaborates closely with the Sustainability Steering Committee of Frasers Property Singapore. This strategic partnership entails close cooperation to determine and drive the sustainability framework and objectives within FCT’s portfolio. The Frasers Property Singapore SSC, led by senior management including FCAM’s Chief Executive Officer, plays a pivotal role in providing guidance and leadership to the Sustainability Working Committee (“SWC”). The SWC comprises management and executive personnel who are responsible for implementing action plans and closely monitoring performance against key performance indicators applicable to retail malls under FCT. Our Board of Directors (“Board”) provides the strategic direction and oversees the identification, monitoring and the management of environmental, social and governance material factors central to achieving FCT’s sustainability objectives. Participation in Membership Associations and Alignment with Recognised Standards GRI 2-28 FCT, whether independently or through Frasers Property, supports and engages with various global movements to advance sustainability initiatives. Such participation in local and international initiatives, as well as partnerships with industry bodies, enable us to leverage the insights and knowledge to drive meaningful changes. These collaborations play a role in fulfilling our sustainability commitments. REITAS serves as the representative advocate for Singapore’s REIT (S-REIT) sector, facilitating member engagement in policy consultations. REITAS supports the growth of the S-REIT industry by improving transparency and governance for investor decision- making, collaborating with regulators for industry- friendly policies. FCT plays an active role as a member of REITAS, participating in industry events organised by the association as well as relevant surveys e.g. by the regulators which seek to gather feedback from SREITs. FCT, through Frasers Property, is also represented on REITAS’ Sustainability Taskforce. FCT, whether on its own or through Frasers Property, is also aligned with sectoral, national and international platforms to elevate standards and scale up best practices. These include: • GRESB Real Estate Assessment • Property Council of Australia • Science Based Targets initiative (SBTi) • TCFD • United Nations Global Compact (UNGC) • United Nations Women’s Empowerment Principles (UNWEP) • Urban Land Institute (ULI) Singapore • Tripartite Guidelines on Fair Employment Practices (TAFEP) • Net Zero Carbon Buildings Commitment of the World Green Building Council (WGBC) • Singapore Green Nation Pledge by Ministry of Sustainability and the Environment Stakeholder Engagement GRI 2-29 FCT actively engages our stakeholders and addresses their concerns throughout our sustainability strategy. We value our stakeholders’ views and consistently work to integrate their feedback into our practices to improve our sustainability performance. Our approach to stakeholder engagement involves identifying and prioritising stakeholders’ views based on the impact our operations have on them, their knowledge of the sector and FCT as well as their importance to the success of our business. FCT is committed to delivering long-term outcomes for our diverse stakeholder groups by establishing feedback mechanisms that enable collaboration and foster trust. Throughout the year, we engage stakeholders through various communication channels with the goal of understanding their needs while seeking collaborative ways to achieve shared goals. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 101 Key Stakeholders Key Topics of Concern Mode and Frequency of Engagement Tenants ● Maintaining high shopper traffic ● Competitive rental rates ● Collaboration in marketing and promotional events ● Green leases ● Environmental awareness Shoppers ● Meeting our shoppers’ needs ● Quality of services and facilities ● Providing comfortable shopping environment and family-friendly amenities ● Considerations for safety, accessibility and easy navigation within the mall ● Good connectivity to public transport Employees ● Compensation and benefits ● Career progression ● Continuous education and skills upgrading ● Employee well-being Throughout the year: ● Face to face dialogue ● Partnership in promotional events ● Regular tenant engagement and feedback meetings Once every three years: ● Tenant satisfaction survey ● Shopper surveys (No fixed period) ● Focus group study (No fixed period) ● Ongoing feedback via online and various social media such as Facebook, Instagram and LinkedIn and FCT/ Frasers Property websites ● Regular events to engage shoppers ● Ongoing Frasers Rewards shopper loyalty programme ● Feedback forms made available throughout the year on our website or via customer service staff, customer service counters and concierge counters ● Annual performance appraisals ● Communal sports and activities throughout the year ● Orientation and training programmes upon joining ● Regular department meetings ● Family day events ● Culture survey Property Manager ● Key Performance Indicators (“KPIs“) for the property manager ● Monthly meetings and ad-hoc meetings as required ● Regular exchanges on internal communication channels Investors and FCT’s Unitholders ● Business and operations performance ● Business strategy and outlook ● Sustainability concerns Local Community ● Helping the groups in need in the community ● Foster strong community ties and promote family values Throughout the year: ● Investor meetings, quarterly post-results luncheons and non-deal roadshows, mall tours and Annual General Meetings ● Website, annual reports, SGXNet announcements, presentation slides, quarterly business update or financial results briefings and conference calls ● Ad-hoc engagement with agencies such as National Council of Social Service, Care Corner Singapore and Health Promotion Board on community activities/events to be held at the malls ● Ongoing provision of venue space where relevant, to support community and charitable events that promote community bonding and well-being Regulators and Industry Associations ● Compliance with relevant rules and regulations ● Engagement with investors and Unitholders ● Government policies on REITs or real estate sector ● Issues concerning both short and long-term interests of the retail industry in Singapore ● Regular participation in events organised by industry associations throughout the year ● Regular participation in briefings and consultation with regulators such as the SGX and MAS throughout the year 102 Frasers Centrepoint Trust Annual Report 2023 Materiality Assessment GRI 3-1, 3-2 FCT monitors its operating landscape for any changes or developments that may impact on our business, stakeholders, and our material ESG topics. In FY2022, Frasers Property led a group-wide review of material topics to determine if any new topics have emerged, or whether there has been a shift in the importance and impact of existing topics. The review process comprised a global market review of relevant key sustainability trends as well as surveys and interviews with internal and external stakeholders. The findings affirmed that FCT’s material topics remain relevant and aligned to stakeholder expectations. Group Sustainability Framework Pillars Material Topics Rationale Risk-based Management Ensuring our business continuously assesses the environment, health and safety and social risks to ensure we are in compliance with relevant laws and regulations. Adopting a zero-tolerance approach towards corruption and fraud and maintaining high standards of integrity, accountability, and corporate governance. ACTING PROGRESSIVELY Ensuring compliance with the Code of Advertising Practice and applicable guidelines and principles for responsible communications and marketing. Responsible Investment Resilient Properties Innovation Achieving sustainable improvement in economic performance through investing with long-term views and financial and sustainability considerations to deliver regular and stable distributions to our Unitholders, and to achieve growth in FCT’s net asset value per Unit. Understanding and responding to climate-related risks and opportunities to enhance the resilience of our properties and future-proof our business. Being an agile and adaptable business that will allow us to remain relevant and competitive in the retail industry and lead to a viable business in the long-term. Energy and Carbon Proactively reducing energy consumption of our properties and contributing towards achieving net-zero carbon goal. Water Waste CONSUMING RESPONSIBLY Conserving water whenever possible to reduce unnecessary usage and wastage. Waste is a natural byproduct of our operations. Our objective is to substantially minimise waste generation by adhering to the 3Rs hierarchy: Reduce, reuse and recycle. FOCUSING ON PEOPLE Materials and Supply Chain As a responsible business, it is important that we have oversight of the materials and supply chain activities, minimising risks along our value chain. Diversity, Equity and Inclusion Creating a diverse and inclusive environment where employees can be their best selves. Skills and Leadership Health and Well-being Investing in employee learning and helping them to develop their career with us. Continuously seeking to attract and retain our human capital and talents as we continue to grow in our business. Maintaining open-door communication with our employees to foster trust and confidence in our communications. Creating an environment within our properties where our stakeholders, including shoppers, contractors and tenants, feel safe and comfortable to carry out their intended activities. Community Connectedness Fostering healthy interactions with local communities to build strong sense of belonging and connections, and contributing back to the community by helping the less fortunate. FCT/FCAM Suppliers/ Contractors Tenants/ Shoppers Local Communities/ NGOs Material Factor Boundaries Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 103 The outcomes of the materiality process inform our strategic decisions and sustainability management, ensuring our strategy remains relevant to our stakeholders, as well as addresses the risks and opportunities most important to the business. The following table reflects where we have caused or contributed to significant impacts for each of our material topics. FCT/FCAM Suppliers/ Contractors Tenants/ Shoppers Local Communities/ NGOs Material Factor Boundaries Group Sustainability Framework Pillars Material Topics Rationale Risk-based Management Ensuring our business continuously assesses the environment, health and safety and social risks to ensure we are in compliance with relevant laws and regulations. Adopting a zero-tolerance approach towards corruption and fraud and maintaining high standards of integrity, accountability, and corporate governance. ACTING PROGRESSIVELY Ensuring compliance with the Code of Advertising Practice and applicable guidelines and principles for responsible communications and marketing. Responsible Investment Achieving sustainable improvement in economic performance through investing with long-term views and financial and sustainability considerations to deliver regular and stable distributions to our Unitholders, and to achieve growth in FCT’s net asset value per Unit. Resilient Properties Understanding and responding to climate-related risks and opportunities to enhance the resilience of our properties and future-proof our business. Innovation Being an agile and adaptable business that will allow us to remain relevant and competitive in the retail industry and lead to a viable business in the long-term. Energy and Carbon Proactively reducing energy consumption of our properties and contributing towards achieving net-zero carbon goal. Water Waste Conserving water whenever possible to reduce unnecessary usage and wastage. Waste is a natural byproduct of our operations. Our objective is to substantially minimise waste generation by adhering to the 3Rs hierarchy: Reduce, reuse and CONSUMING RESPONSIBLY recycle. Materials and Supply Chain As a responsible business, it is important that we have oversight of the materials and supply chain activities, minimising risks along our value chain. Diversity, Equity Creating a diverse and inclusive environment where employees can be their best and Inclusion selves. FOCUSING ON PEOPLE Skills and Leadership Investing in employee learning and helping them to develop their career with us. Continuously seeking to attract and retain our human capital and talents as we continue to grow in our business. Maintaining open-door communication with our employees to foster trust and confidence in our communications. Health and Well-being Creating an environment within our properties where our stakeholders, including shoppers, contractors and tenants, feel safe and comfortable to carry out their Community Fostering healthy interactions with local communities to build strong sense of Connectedness belonging and connections, and contributing back to the community by helping the intended activities. less fortunate. 104 Frasers Centrepoint Trust Annual Report 2023 Acting Progressively FCT is committed to upholding high standard of integrity and accountability, anchoring this commitment in a robust framework of policies and procedures. We strive to consistently integrate ESG considerations into our business decisions and operational fabric. This enables us to anticipate forthcoming risks and opportunities, enhancing our resilience as a company. In our pursuit of responsible investment, we diligently factor in ESG considerations when making investment decisions and actively pursue green building certifications. We also seek to foster an innovative culture to enhance efficiency and adaptability, as well as invest in innovative solutions, to help us navigate the ever- changing business landscape. Our Progress in FY2023 Focus Area Our Goals Our Progress in FY2023 Risk-Based Management ● To establish holistic overarching internal policies to govern and guide management of the focus areas ● All our properties are third-party audited with ISO 14001, ISO 45001 and ISO 50001 certifications ● 88.7% of suppliers and vendors have acknowledged our Responsible Sourcing Policy as of 30 September 2023 ● Introduced Technology Risk Management and Environmental Risk Management in our governance framework, aligning to the regulatory requirements by the Monetary Authority of Singapore Responsible Investment ● To certify 80% of owned and asset-managed properties with third-party and relevant green building schemes by 2024 ● 100% of owned and asset-managed properties are green-certified as at 30 September 2023 ● Achieved 5-Star rating for third consecutive year at GRESB Real Estate Assessment 2023 ● Attained “A” rating in ESG rating by MSCI ESG Ratings ● To finance majority of our new sustainable asset portfolios with green and sustainable financing by 2024 ● Raised the proportion of green loans to 55.6% as of 30 September 2023 from 31.9% as of 30 September 2022 Resilient Properties ● To carry out climate risk assessments and ● Majority of Board members underwent sustainability implement asset-level adaptation and mitigation plans aligned to the Task Force on Climate- Related Financial Disclosures framework by 2024 training ● Increased the Board’s oversight over the FCT sustainability strategy by expanding the remit of the ARCC ● Signed commitment letter to be part of the SBTi Innovation ● To cultivate a customer-centric and ● Around 8,000 product listings on Frasers eStore collaborative mindset platform Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 105 Risk-Based Management Our Approach GRI 3-3 FCT has in place policies and procedures to enable us to proactively address environmental, social, and governance-related risks while minimising potential negative impacts. FCT’s dedication to the highest levels of integrity and transparency is consistently upheld throughout our portfolio. We strive to adhere to principles of fairness and ethical conduct and have a zero-tolerance stance towards fraud and corruption. FCT’s risk management framework is overseen by the Board through the Audit, Risk and Compliance Committee (“ARCC”). The ARCC ensures the quality and effectiveness of risk management practices and mitigating controls. Additionally, an enterprise risk management (“ERM“) framework has been implemented to enhance our risk management capabilities. This involves continuous identification, assessment, and monitoring of key risks, along with corresponding control measures and management actions. As part of our ERM process, financial and operational key risk indicators have also been established to track our principal risk exposures. Discussions within the Board and Board Committees encompass various aspects, including business, financial performance, strategy, sustainability, environmental, social & governance, and technology risk management. Internal audit support is provided by the Frasers Property’s internal audit department (“Group IA”), which conducts independent, objective assessments of internal controls, risk management, and governance practices. Collaboration with the Frasers Property’s Group Risk and Group Sustainability teams further strengthens our risk management approach and ensures alignment with ESG-related concerns. Since 2022, FCT’s governance framework has included Technology Risk Management and Environmental Risk Management, mandated by the MAS. FCT’s commitment to corporate governance is demonstrated through our continued participation as a signatory in the annual Corporate Governance Statement of Support, initiated by the Securities Investors Association (Singapore) (“SIAS”). Further details can be found in our Corporate Governance Report on pages 139 to 178 of the Annual Report. To ensure the reliability of our data disclosure and sustainability reporting processes, we have sought independent external assurance of this Report for the third consecutive year. Our assurance is carried out by Ere-S Pte Ltd (“Ere-S”), with the engagement conducted under a limited level of assurance according to the International Standard on Assurance Engagements 3000 (“ISAE 3000”) guidelines. Please refer to pages 131 to 133 for assurance findings and observations. All our properties also undergo third-party audits to be certified under the ISO 14001, ISO 45001 and ISO 50001 standards. Our Actions and Progress GRI 2-23, 2-24, 2-25, 2-26, 2-27, 205-2, 205-3, 206-1 FCT has implemented a comprehensive set of corporate policies to drive sustainable outcomes while safeguarding integrity and accountability across our business. These policies are aligned with those of Frasers Property, and regularly reviewed to ensure that they remain relevant to our changing operating landscape. ▶ Anti-Bribery Policy ▶ Board Diversity Policy ▶ Code of Business Conduct ▶ Competition Act Compliance Manual ▶ Complaints/Feedback Handling Policy ▶ Corporate Social Responsibility Policy ▶ Diversity and Inclusion Policy ▶ Documents Management and Retention Policy ▶ Investment Manual and Guidelines – Acquisitions and Disposals ▶ Investor Relations Policy ▶ Personal Data Breach Incident Management Policy ▶ Personal Data Protection Policy ▶ Policy for Continuing Education of Capital Markets ▶ Services Representatives ▶ Policy on Dealings in Units of Frasers Centrepoint ▶ Trust and Reporting Procedure ▶ Policy on Outsourcing ▶ Policy for Prevention of Money Laundering and Countering the Financing of Terrorism ▶ Procurement Policy ▶ Responsible Sourcing Policy ▶ Whistle-Blowing Policy ▶ Workplace Health and Safety Policy Anti-Bribery, Anti-Corruption and Competition FCT does not tolerate any form of bribery and corruption, striving to maintain the highest standards of ethical business conduct. Our commitment towards good faith business activities and regulatory compliance are outlined in our policies, namely the Anti-Bribery Policy, the Competition Act Compliance Manual and the Policy for Prevention of Money Laundering and Countering the Financing of Terrorism. Training and communication build the awareness needed to tackle corruption and bribery. This year, FCT did not record any confirmed incidents of bribery and corruption, nor any significant breaches of laws and regulations in relation to the environment, health and safety regulations or industry codes around marketing communications. Further, all our employees have attended training sessions on anti-corruption. 106 Frasers Centrepoint Trust Annual Report 2023 Acting Progressively Whistle-blowing and Raising Concerns Independent feedback channels have been implemented to ensure that FCAM’s employees and other third parties have safe avenues to report any improprieties, grievances or misconduct without fear of reprisal. Reports can be made by mail, electronic mail or by calling a hotline. Employees and third parties are encouraged to raise their concerns on any of the following issues relating to FCAM and its staff: ▶ Financial fraud or professional misconduct, including concerns about accounting, internal controls or auditing matters; Supply Chain Management FCT seek to forge close partnerships with suppliers that share in our sustainability goals and values, and who are aligned with our commitment to high quality environmental, health and safety standards. As conveyed in our Responsible Sourcing Policy, these commitments include expectations to: ▶ Improve environmental practices and enhance environmental management where appropriate; ▶ Respect human rights, with regards to employee safety, health, well-being and labour rights; and ▶ Comply with local and international codes of ▶ Improper conduct, dishonest, fraudulent or unethical practice, upholding ethics and integrity. We continued to share our Responsible Sourcing Policy with all key suppliers and vendors, with 88.7% of them acknowledging the policy as at 30 September 2023. Data Privacy FCT is entrusted with the data of tenants, underscoring the need for robust cybersecurity policies and protocols. Our Personal Data Protection Policy has been implemented to protect our information assets and establish responsibilities that employees must undertake to ensure maximum data confidentiality and security. In the case of information security incidents, FCT’s Personal Data Breach Incident Management Policy sets out procedures for employees to manage and mitigate any negative impacts. There were no recorded information security breaches in FY2023. behaviour; ▶ Any criminal or regulatory offence, breach, irregularity or non-compliance with laws/regulations or the FCAM’s policies and procedures, and/or internal controls; ▶ Violence at the workplace, or any workplace hazards/violations which may threaten health and safety; ▶ Corruption or bribery; ▶ Conflicts of interest without proper disclosure; ▶ Any deliberate attempt to cover up and/or conceal misconduct; and ▶ Any other improprieties or matters that may adversely affect unitholders’ interest in, and assets of, FCT, and its reputation Individuals who wish to file a whistle-blowing report may refer to the details contained in FCT’s Whistle-blowing Policy available on FCT’s website at https://fct.frasersproperty.com/corporate_overview. html#governance. All reports submitted through these channels are received by the head of Group Internal Audit. Group Internal Audit has been designated as an independent function to investigate all whistle-blowing reports. All reports made in good faith will be treated fairly, confidentially and protected from reprisal. FCT will respond appropriately to individuals who engage in reprisal actions against whistle-blowers. In FY2023, we did not receive any cases via our whistle- blowing channels. We will continue to foster close collaboration with stakeholders and ensure that we pre- empt and mitigate any risks throughout our value chain. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 107 Aligning with MAS Guidelines on Environmental Risk Management for Asset Managers Pursuant to MAS guidelines aimed at enhancing the resilience of funds, asset managers have been tasked to implement the guidelines across six key areas of environmental risk management. We have aligned our processes and practices to meet the requirements and will continue to strive for further alignment. Key Areas of MAS Guidelines on Environmental Risk Management Status Governance and strategy The Board and senior management to oversee integration of environmental risk considerations into asset managers’ strategies, business plans and product offerings. We have enhanced the Board’s oversight over the FCT sustainability strategy by expanding the remit of the ARCC. Furthermore, FCAM’s Chief Executive Officer serves on the Frasers Property Singapore Sustainability Steering Committee. The committee makes key decisions in relation to our sustainability framework and goals. Research and portfolio construction Asset managers should evaluate the potential impact of environmental risk on the return potential of our investments. We consider operational indicators (such as greenhouse gas emissions, energy, waste and water) and sustainability benchmarks that may affect tenant demand as well as operational efficiencies and costs. Please refer to the Energy and Carbon section on pages 116 to 118 of this Report for further details. Portfolio risk management Asset managers should put in place appropriate processes and systems to systematically assess, manage and monitor the impact of any risk. We have put in place processes to manage environmental risk. Please refer to the Risk-Based Management section of this Report for further information. Scenario analysis Asset managers should develop capabilities to assess the environmental risk impact on their portfolios and their alignment with climate goals set under a range of scenario pathways. We have completed climate risk assessments, including scenario analysis from temperature rises (below 2°C scenario: RCP 2.6 and below 4°C scenario: RCP 8.5) and established a roadmap for achieving net-zero carbon by 2050. Stewardship Asset managers should engage investee companies to improve risk profile and support their efforts to transition towards more sustainable policies and practices. We have implemented asset enhancement initiatives with measures to improve energy and water efficiency and waste management. Disclosures Clear and meaningful disclosures referencing well- regarded international reporting frameworks. This Report discloses our approach to environmental risk management and the potential impacts from environmental risk, and is aligned to the 2021 GRI Universal Standards. We strive to enhance disclosures to further align to the TCFD recommendations. 108 Frasers Centrepoint Trust Annual Report 2023 Acting Progressively Responsible Investment Our Approach GRI 3-3 FCT acknowledges the significance of responsible investment in enhancing our competitive advantage and generating long-term value for both our business and stakeholders. We aim to integrate ESG considerations into our investment strategies, while exploring opportunities to green our portfolio and employ sustainable financing methods. FCT endeavours to incorporates ESG considerations into our business decisions by aligning to green building certifications and benchmarking our performance through both local and internationally recognised certifications such as the BCA Green Mark and GRESB Real Estate Assessment. Additionally, we conduct regular assessments of all properties to ensure that we continuously adapt to the needs of our customers and tenants. Our Actions and Progress Adopting Green and Sustainable Financing Our approach is guided by our Sustainable Finance Framework, which is designed to provide overarching criteria and guidelines for FCT. The framework has four core elements, namely: Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds and Reporting. These elements come together to provide a comprehensive approach for financing new assets based on sustainable finance principles while tracking our environmental impacts. Crucially, the Framework been externally assured to be in accordance with the relevant international principles and guidelines as follows: ▶ Green Bond Principles (“GBP”) 2021 and Sustainability Bond Guidelines (“SBG”) 2021 by the International Capital Market Association (“ICMA”); and ▶ Green Loan Principles (“GLP”) 2021 by the Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications and Trading Association. FCT has increased its proportion of green loans from 31.9% as at 30 September 2022 to 55.6%3 as at 30 September 2023 through refinancing of maturing loans with green loans. Additionally, FCT has announced a partnership with OCBC on Singapore’s first green financing solution which comprises a green loan and carbon credits. Under this green financing solution, proceeds from the green loan are used to refinance a maturing facility, finance asset enhancement initiatives and decarbonisation projects for FCT’s Tampines 1 retail mall as well as other general corporate purposes. Benchmarking FCT’s Performance with the GRESB Real Estate Assessment Since 2019, FCT has been a participant of the annual GRESB Real Estate Assessment. The GRESB Real Estate Assessment is a globally recognised industry benchmark that is aligned with international reporting frameworks. The Assessment benchmarks real estate funds and companies worldwide based on information relating to their ESG performance and sustainability best practices. Seeking third party assessment from bodies such as GRESB is key to FCT’s approach in affirming ESG standards and performance and encouraging greater accountability with our stakeholders. FCT continued to report a strong performance in the 2023 GRESB Real Estate Assessment, achieving a score of 92 and attaining a 5-star rating for the third year in a row, while also scoring an ‘A’ for public disclosure. FCT aims to continue building on this momentum and continue to learn from our experiences and the wider industry as ESG standards evolve. Resilient Properties Our Approach GRI 3-3 FCT is focused on addressing climate-related risks by forging close partnerships with its tenants/shoppers, suppliers as well as communities that may be potentially impacted by its operations. Through this approach, we believe that we can forge a more sustainable future. As an investor and manager of real estate, enhancing the resilience of FCT’s assets and operations against these impending threats is a key priority. In response, FCAM proactively integrate these risks into FCT’s financial risk management processes. This entails harnessing climate risk data to identify, understand and manage FCT’s portfolio’s exposure to climate- related hazards. Through this, FCAM believes it can effectively measure and manage FCT’s climate risks and opportunities, thereby delivering and preserving long- term value for its stakeholders. 3 The proportion of green loans in FCT’s total borrowing included FCT’s proportionate effective interest in SST which owns Waterway Point and the proportionate effective interest in GRPL which owns NEX. As at 30 September 2023, FCT owns 50.00% effective interest in SST and 25.50% effective interest in GRPL. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 109 FCT has set forth a series of climate objectives that closely align with Frasers Property’s overarching sustainability goals. These goals include a commitment to achieving net-zero carbon emissions by 2050. In parallel with these endeavours, FCT is aligning its disclosures with the recommendations outlined by TCFD. This is geared towards promoting greater transparency in its reporting. Advancing Green Practices in our Portfolio FCT constantly seeks to improve the ESG performance of its portfolio by actively certifying its assets with recognised green building standards in Singapore. We have focused the efforts on attaining BCA Green Mark certification, which provides a comprehensive framework for assessing the overall environmental performance of new and existing buildings. As of 30 September 2023, FCT’s property portfolio is 100% BCA Green Mark-certified by GFA. The Green Mark certifications achieved by the respective FCT property are as follows: Green Mark Certification Properties Green Mark Platinum Green Mark GoldPlus Green Mark Gold • Tiong Bahru Plaza • Central Plaza • Century Square • White Sands • Hougang Mall • Tampines 1 • Waterway Point • NEX • Northpoint City North Wing* • Changi City Point* • Causeway Point* * This certification is under BCA’s revised scheme Green Mark 2021, also known as BCA GM: 2021. To be certified under this revised scheme, buildings will have to meet higher minimum Energy Efficiency levels as well as score sufficient points in the scheme’s sustainability sections. The certification will apply to new and existing buildings and developments as well as to those in operation or those developments and buildings that have been previously certified under BCA Green Mark. We also continuously identify opportunities for improvement of efficiencies across all our properties through regular reviews. This ensures that we stay attuned to the changing needs of customers and tenants. These include AEI to upgrade properties and optimise performance through the installation of environmentally efficient infrastructure. In addition, all of FCT’s Centre Management Offices participated in the Singapore Environment Council’s Eco Office Certification, which guides offices in implementing environmentally friendly practices. This certification takes place once every two years, and we last obtained it in 2022. We are committed to maintaining our environmental commitment, and as such, we will be actively pursuing re-certification in 2024. In the most recent certification, five centres attained the highest Elite ranking, and three attained the Champion ranking. This demonstrates our dedication to sustainable and eco-friendly practices, and we aim to further enhance our environmental efforts in the upcoming certification in 2024. 110 Frasers Centrepoint Trust Annual Report 2023 Acting Progressively Our Actions and Progress The table below outlines our approach and progress towards managing climate-related risks and opportunities, in alignment to the TCFD. TCFD core element Our activities to support TCFD Alignment Describe the organisation’s governance around climate-related risks and opportunities. The Board provides oversight on broader sustainability trends, risks and opportunities to connect sustainability with corporate purpose and strategy. The Board is supported by Frasers Property’s Sustainability Steering Committee and Group Sustainability team. The ARCC continue to assist the Board in carrying out its responsibility, which includes responsibility in determining ESG factors that are material to our business, monitoring and managing ESG factors, and overseeing standards, management processes and strategies to achieve sustainability practices. Describe management’s role in assessing and managing climate-related risks and opportunities. Senior management manages climate risk, identifies potential opportunities through accountability linked to remuneration and provides quarterly updates to the Board on climate-related risk to support decision making. We established sustainability metrics, including climate-related objectives, within their responsibility areas and linked them to executive remuneration via the balanced- scorecard methodology. Describe the climate- related risks and opportunities the organisation has identified over the short, medium, and long term. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. Board members4 and senior leaders underwent training on assessing and managing climate risks and opportunities, which included a deep dive into TCFD recommendations and steps to be taken to better align with them and incorporate robust risk management processes into our strategy. We carry out climate risk assessments that involve identifying potential risks to our assets and estimating financial impacts to the business using scenario analysis. As part of our climate risk assessments, we have prioritised key physical and transitional climate- related risks to FCT, and their financial impact to our business. We have also identified several climate-related opportunities we can leverage on. For further details on our assessed material risks and opportunities, please refer to Table A on page 112. Our climate risk assessments include an analysis of both the financial impacts to our major operating revenue and costs items in the absence of any mitigation actions and the potential value of damages to our assets in the face of extreme weather events. FCT has developed an action plan to address and mitigate key physical and transition risks and prioritised strategies to achieve net-zero carbon by 2050. Our action plan includes (but is not limited to): • Phasing down refrigerants with high Global Warming Potential • Partnering low carbon vendors and service providers to increase procurement of low carbon products and services • Enhancing waste management and increasing waste diversion • Reducing downstream emissions from leased assets 4 All directors, except Mr Tan Siew Peng (Darren), have undergone the training. Mr Tan, who was recently appointed to the board on 26 September 2023, will be enrolling for the mandatory director’s training under SGX’s Listing Rules Practice Note 2.3, which includes the sustainability module. He has 1 year from appointment to undergo the mandatory training. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 111 TCFD core element Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Our activities to support TCFD Alignment As part of Frasers Property’s group-wide exercise, FCT has conducted a readiness assessment which informed a roadmap to align more closely with TCFD recommendations. Examples of actions within the roadmap include: • Better integrating climate change risks and opportunities into strategic decision making • Providing annual training for business leaders • Undertaking climate risk assessments on an asset level, including an assessment against different and longer-term time horizons, both low-emissions and high-emissions scenarios, and an assessment of financial impacts and materiality of climate-related risks and opportunities • Strengthening processes to identify, assess, and manage climate-related risks and improving the quality of climate-related financial disclosures This roadmap was reviewed by the Board and enables us to address and mitigate physical and transition risks that are key to our business. Describe the organisation’s processes for identifying and assessing climate- related risks. FCT completed a climate risk and climate ‘value-at-risk’ portfolio-level assessment of our portfolio properties in Singapore. This provided us with a deep understanding of the carbon emissions from our own operations as well as from our broader value chain – in particular, our tenants’ and suppliers’ energy use. As part of this work, we created an action plan to address and mitigate key physical and transition risks and prioritised asset-specific strategies to achieve net-zero carbon by 2050. Describe the organisation’s processes for managing climate-related risks. We identify key risks, assesses their likelihood and materiality to our business and document corresponding mitigating controls in a risk register. The risk register is reviewed and updated regularly. Describe how processes for identifying, assessing, and managing climate- related risks are integrated into the organisation’s overall risk management. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. Cognisant of the serious impact that climate-related risks have on our properties and operations, environmental and climate change risks have been included in the FCT Risk Register for monitoring. We have implemented an Environmental, Health & Safety Policy and an Environmental, Health & Safety Management System aligned to the ISO 14001 and ISO 45001 standards. We are on track towards integrating our climate related risk identification activities within our Enterprise Risk Management processes and associated risk register practices. To ensure that we are on track to meet our target of net-zero carbon emissions by 2050, we measure and report our energy consumption and greenhouse gas emissions across Scopes 1, 2 and 3. Please refer to the Energy and Carbon section on pages 116 to 118 of this Report for detailed information on our metrics and targets. We measure and disclose our performance using metrics including: ● Absolute energy consumption (GJ) ● Scopes 1 & 2 energy intensity (GJ/m2) ● Absolute Scopes 1, 2 and 3 greenhouse gas emissions (tCO2e) ● Scopes 1 & 2 greenhouse gas intensity (tCO2e/m2) We have also restructured this year’s Sustainability Report to better align with recommended TCFD disclosures. Across asset classes and regions, we certify our properties using third-party green building standards. Our property portfolio is presently 100% Green Mark-certified by GFA. 112 Frasers Centrepoint Trust Annual Report 2023 Acting Progressively TCFD core element Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. Our activities to support TCFD Alignment Please refer to the Energy and Carbon section on pages 116 to 118 for further information on metrics related to greenhouse gas emissions. We are continuously increasing our carbon and climate-related data coverage under Scopes 1, 2, and 3. Examples of new data disclosed in this Sustainability Report include: • Scope 1 emissions from refrigerant top-ups and diesel purchased. • Categories 3, 5, 7 and 13 of Scope 3 Emissions. We introduced goals to encourage impactful climate action, such as attaining net-zero carbon by 2050. Our properties saw a 12.8% reduction in scope 1 & 2 emission intensity from the FY2019 baseline. For further details on energy efficiency measures implemented in FY2023, please refer to the Energy and Carbon section on pages 116 to 118. Table A: FCT’s climate-related physical risks Physical Climate Risk Risk Description Description of Potential Business Impact Business Response Extreme water levels More frequent and intense levels of rainfall can lead to flooding Rising temperatures Higher mean temperatures, heatwaves Exposure of assets to river floods damaging both the built and surrounding infrastructure and natural environment. Impairing accessibility and damaging functionality of buildings for tenants. Consequentially, resulting in increased repair and maintenance expenditure and lower revenue from closure of operations. Higher temperatures reduce durability of building materials and affect the indoor climate. This leads to higher expenses and more frequent maintenance checks and higher energy consumption required for cooling. Extreme temperatures also pose health and safety risks to workers. Restricting/shifting working hours can affect business productivity. Windstorms (including Cyclones & Typhoons) More frequent and intense storms and droughts More frequent and intense storms can cause damage to building infrastructure. Thus, higher expenses from more frequent repairs and maintenance of building infrastructure and replacement of fixtures Wildfires Increased potential and frequency of fire-related events linked to the warm and dry conditions due to climate change Destruction of assets and the surrounding environment. Increased expenditure due to having to re-build and replace assets lost. We are looking to expand climate risk assessments and adaptation plans to more developments for better flood risk management. The impacts of increased heat on the thermal comfort of occupants is considered as part of development/asset-level climate adaptation plans, while the use of on-site and off-site renewable energy will help mitigate the emissions associated with the need for additional cooling. Windstorms are considered within climate risk assessments and associated adaptation plans. For some assets, back-up power is provided in the event of infrastructure damage, with generators shifting from diesel to biodiesel to help reduce associated emissions. Considered as part of climate risk assessments and associated adaptation plans, wildfire protection is also managed through coordination and alignment with local authorities. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 113 Table B: FCT’s climate-related transition risks and opportunities Transition Risks Risk Description Description of Potential Business Impact Business Response Carbon pricing Policy requirements for low carbon buildings Increasing carbon prices across countries would lead to increased operating costs due to direct and indirect carbon taxes on energy consumption and from within the value chain. These increased operating costs would affect total return and customers/tenants may move towards landlords who are able to mitigate/avoid these costs With evolving building sector standards and regulations and national policies, businesses may need to upgrade existing assets or ensure new builds or assets comply. This could lead to increased expenditure to retrofit existing assets and ensure new builds comply. Failure to meet these policy requirements can lead to reputational risks. Our alignment to Frasers Property’s goal to achieve net zero carbon emissions by 2050 drives us to reduce climate impacts and mitigate potential carbon pricing impacts. We aim to enhance the green building certification of our properties in the portfolio. This will strengthen the resilience of our properties to physical and transitional climate- related shocks and impacts. Transition Opportunities Opportunity Opportunity Description Description of Potential Business Impact Improving the resilience and energy efficiency of our portfolio Partnering with leading electricity retailers and renewable energy solution providers to increase renewable energy procurement FCT intends to increase the proportion of renewable energy in its total energy consumption. FCT hopes to harness benefits including reducing energy costs, accelerating decarbonisation, and reducing overall asset level energy demand. Deepening partnerships with tenants Partnering with our tenants to develop green leases with an additional focus on energy efficient and smart equipment, which help reduce tenants’ power consumption and provide greater visibility of energy use during the lease term. We see the potential to enhance resilience through cost savings, increased property value, and mitigation of climate-related risks, while supporting sustainable practices and positive tenant relationships. Developing training and engagement programmes Providing training and engagement programmes to centre managers and tenants to facilitate energy and water efficiency, responsible procurement, etc. We believe this will promote the understanding and adoption of sustainable practices, enhancing resource efficiency and mitigating climate risks, thus bolstering financial resilience. 114 Frasers Centrepoint Trust Annual Report 2023 Acting Progressively Innovation Our Approach GRI 3-3 FCT, in partnership with Frasers Property, strives to improve operational efficiency and to reduce reliance on manpower through innovation and leveraging technology. Fostering Innovation and Design Thinking in Our Employees We collaborate closely with Frasers Property’s innovation team to employ design thinking approach in our problem solving processes and to equip our team with more tools and skills to solve problems. Adapting to consumer’s evolving needs through Omnichannel Retail FCT embraces omnichannel retail. This approach enhances convenience and accessibility for shoppers, offering diverse order fulfilment options. For retailers and F&B operators in our malls, omnichannel retailing expands customer reach, elevating sales productivity of physical spaces, and introducing click-and-collect and delivery for added convenience. It also furnishes valuable data and analytics, enabling informed business decisions regarding product assortment and expansion. This integrated approach improves sales, enhances business efficiency, brand loyalty and shopper satisfaction. We continue to enhance our Frasers loyalty program, the Frasers Experience, which complements our brick- and-mortar malls to promote the omnichannel retail experience. Harnessing technology for operational efficiency With increasing challenges from rising operating and manpower costs, driving cost reduction through innovation and use of technology become crucial. We have been working with Frasers Property and multiple industry partners to explore various initiatives to optimise complex processes, reduce inefficiencies in our building management systems, use of technology to replace repetitive and routine work and use of smart technology to reduce reliance on manpower in surveillance and security. One example is the initiative call “SMART Lifts”, which uses data analytics to determine the optimal quarterly maintenance regime for the elevators based on data such as usage and wear rate. This results in tremendous amount of cost savings and reduction of wastage over the long run. Other initiatives include food waste valorisation which creates circular economy in food waste management and water valve efficiency initiative that regulate air and water pressure in pipes to improve flow efficiency and reduce water bills. The projected savings of these initiatives when fully implemented is approximately $1 million per annum. Leveraging Technology to Achieve ESG Goals In collaboration with DBS/POSB, our retail team has launched the Eco-Perks programme on the Frasers Experience (FRx) mobile application. This initiative aims to nurture eco-consciousness as a part of a wider initiative to contribute towards zero waste and carbon reduction in the long term. FRx Eco-Perks offers shoppers a transformative gateway to embark on their sustainability journey, while incentivising them to participate in a wide selection of eco-friendly activities. These activities span from meaningful endeavours such as food donation drives to embracing conscious dining and interactive upcycling events. Our utilisation of technology through the FRx application has enabled us to engage a wider audience of shoppers and amplify our sustainability impact. In this manner, we have successfully engaged more than 14,300 community members, resulting in a substantial reduction of nearly 19,000 kg of food waste. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 115 Consuming Responsibly As a leading suburban retail REIT in Singapore, FCT aims to be a positive example in its sustainability and ESG efforts and disclosures. We want to proactively collaborate with our stakeholders in reducing our consumption in energy and water, cut our carbon and greenhouse gas emissions and to promote recycling. These are in line with our broader Group goal to be net-zero by 2050. Our Progress Focus Area Our Goals Our Progress in FY2023 Energy and Carbon ● To achieve net-zero carbon emissions by 2050 ● To develop a net-zero carbon roadmap and ● 147 MWh of renewable energy generated from solar panels installed in Tiong Bahru Plaza establish progressive carbon targets ● Approximately 25,200 tCO2e Scopes 1 and 2 location- ● To monitor and reduce our energy usage based emissions produced for the year intensity progressively by 2035 ● To reduce our Scopes 1, 2 and 3 greenhouse ● Expanded disclosure on Scope 3 emissions with a total of 44 ktCO2e recorded for Categories 3, 5, 7 and 135 gas emissions progressively by 2035, aligned to the SBTi path ● Increased data coverage of Scope 1 contributors including refrigerant top-ups and diesel purchased Water ● To reduce water intensity progressively by 2030 ● Total water consumption of 903 megalitres reported at landlord-controlled areas, an increase of 8.6% compared to FY2022 ● Water intensity reduced by 16.3% compared to FY2019 baseline, to 2.7 kL/m2 Waste ● To implement food waste recycling in all FCT’s ● Recycled 2,189 tonnes of general waste, 10.1% properties increase compared FY2022 ● Recycling rate increased to 12.4% 5 Scope 3 disclosures in this report encompass fuel- and energy-related activities, waste generated in operations, employee commuting, and downstream leased assets. 116 Frasers Centrepoint Trust Annual Report 2023 Consuming Responsibly Energy and Carbon Our Approach GRI 3-3 We note that the retail industry has a significant role to play in mitigating climate impacts. FCT has embarked on a journey to achieve net-zero by 2050. Our approach encompasses a diverse range of strategies aimed at reducing energy consumption and enhancing our operational efficiency. Our commitment extends beyond our business activities as well, as we actively endeavour to inspire and empower employees, shoppers, tenants and suppliers to embrace eco- conscious practices and choices, thereby fostering a culture of environmental responsibility. In collaboration with Frasers Property, FCT has embarked on a journey towards decarbonising our operations and achieving net-zero by 2050. Our carbon inventory development is based on the requirements within the widely-utilised GHG Protocol Corporate Accounting and Reporting Standard as well as Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The operational control approach is adopted for carbon inventory establishment. This ensures that we take ownership of emissions generated by activities from which economic profit is derived. Since FY2021, FCT has established a comprehensive roadmap that details our carbon reduction strategies as well as specific targets and timelines. The development of this roadmap entailed a process which involved initial identification and prioritisation of strategies specific to the retail sector. Subsequently, we drew upon industry-leading carbon reduction pathways to develop our absolute and sectoral decarbonisation pathways. Employing a science-based methodology, we also modelled alternative scenarios to project potential emission reductions up until the year 2035. Targeted at reducing our Scopes 1, 2 and 3 GHG emissions, our decarbonisation strategies include improving energy efficiencies, increasing our renewable energy mix, addressing tenant energy consumption patterns, and promoting sustainable procurement as well as proper waste and water management. In order to better understand our carbon inventory structure and generate meaningful insights for decarbonisation, we strive to enhance the accuracy and quality of our database. More than 95% of environmental disclosure in this report is derived from actual data, which demonstrates our effort in setting up a high quality ESG data management system. Our Actions and Progress Energy GRI 302-1, 302-2, 302-3 At common areas, a large proportion of FCT’s energy consumption6 is attributed to electricity consumption. Due to higher occupancies in FY2023, our properties purchased 3.6 kL of diesel and consumed 62 GWh of grid electricity. This leads to an overall energy consumption of 224,000 GJ and the corresponding energy intensity remained relatively unchanged at 0.7 GJ/m2. At tenant-controlled areas, we have recorded a total of 103 GWh of electricity consumption. With higher transparency on data tracking and more vigilant monitoring process in place, we are on track to our goal of reducing the energy intensity of our portfolio by 1.5% per annum by 2024 against a FY2019 baseline. 6 Energy data for the reported periods are restated to factor in replacement of previous estimates with actual data. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 117 FCT Landlord Energy (GJ) and Intensity (GJ/m2) 0.6 231K 0.7 0.7 218K 224K FY2021 FY2022 FY2023 Landlord Energy (GJ) | Landlord Energy Intensity (GJ/m2) FCT Tenant Energy (GJ) and Intensity (GJ/m2) 1.0 360K 1.1 1.1 358K 371K FY2021 FY2022 FY2023 Tenant Energy (GJ) | Tenant Energy Intensity (GJ/m2) To reduce our reliance on fossil-fuel based energy, we have been generating renewable energy on-site via solar panels. In FY2023, 147 MWh of solar energy was generated and consumed at Tiong Bahru Plaza. We are heartened to observe a continuous increase in renewable energy generated in our portfolio and strive to further expand capacity over time by implementing sustainable energy infrastructure on more properties. Hougang Mall achieved its inaugural BCA’s Green Mark certification this year with the Platinum rating. This accomplishment reflects our continuous commitment to enhancing our properties’ energy efficiency. FCT has upgraded the mall’s cooling system, eliminating individual water-cooled package units in favour of a more efficient chiller plant, which is projected to operate 34.4% more efficiently and save 3,600 GJ of energy annually. Additionally, common area lights will be retrofitted with LEDs, increasing lighting power efficiency from 14% to 48.5%, saving 360 GJ of energy. These efforts have led to a remarkable annual reduction of 395 tonnes of CO2e in carbon emissions and a 3,485 GJ decrease in energy consumption at Hougang Mall. On a longer term project, two of FCT malls, Century Square and Tampines 1, participated in the SP Group- led project to develop Singapore’s first brownfield Distributed District Cooling (DDC) network in Tampines Central. The DDC is a centralised cooling system for a network of interconnected buildings. In the case of the Tampines DDC, two of FCT’s malls – Century Square and Tampines 1 and together with another building, act as the injection nodes for chilled water to the DDC which comprises 14 buildings. According to a white paper7 feasibility study conducted by Temasek and the SP Group, the Tampines DDC could potentially achieve 17% lower energy consumption, an 18% reduction in carbon emissions annually and $4.3 million annually from energy savings, reduction in equipment replacement and maintenance costs and potential earnings from freeing up chiller plant space, which can be converted into retail or office space. 7 SP Group and Temasek. (2020). Taking the heat off cooling: A greener way to cool. Studying the impact of a brownfield distributed https://www. spgroup.com.sg/dam/spgroupvn/TET-DDC-Whitepaper_Final_Single-pages_18-Aug--1-.pdf 118 Frasers Centrepoint Trust Annual Report 2023 Consuming Responsibly Scope 1&2 Location Based Emissions (tCO2e) and Intensity (tCO2e/m2) 67.6 24K 7.49 25K 76.6 25K Scope 3 Cat 3, 5, 7, 13 GHG Emissions (tCO2e) 40K 42K 44K FY2021 FY2022 FY2023 Scope 1&2 Location Based Emissions (tCO2e) Scope 1&2 Location Based Emissions Intensity (tCO2e/m2) Carbon Emissions GRI 305-1, 305-2, 305-3, 305-4, 305-5 Scope 1 includes direct emissions from sources that are owned or controlled by FCT such as diesel purchased and refrigerant top-ups at its assets, while Scope 2 comprises indirect emissions from purchased electricity consumed by the operational activities of FCT at its managed buildings. In FY2023, our total Scope 18 and 2 location-based carbon emissions amounted to 27 and 25,168 tonnes of CO2 equivalent (tCO2e) respectively, representing a 2.2% increase as compared to FY2022. FCT’s Scopes 1 and 2 emissions intensity was 76.6 kgCO2e/m2. A total of 46 ktCO2e of Scope 3 emissions were produced, across four categories, a slight increase from FY2022. Of the four categories, majority of FCT’s Scope 3 emissions stemmed from category 13 which includes tenants’ emissions at downstream leased assets, followed by category 3, which refers to fuel- and energy-related activities that FCT engages in. We have encouraged all our employees to take part in the Group’s annual employee commute survey, which aims to compute our category 79 of Scope 3 emissions based on our full-time permanent employees commuting behaviour. With a response rate of 79%, the emission of this category is estimated to be 23 tCO2e. Scope 3 category FY2023 emissions (‘000 tCO2e) Category 3 Fuel- and energy-related activities Category 5 Waste generated in operations Category 7 Employee commuting Category 13 Downstream leased assets 1.1 0.7 <0.1 41.6 FY2021 FY2022 FY2023 Water Our Approach GRI 3-3, 303-1, 303-3 As global demand for water continues to grow, the need for responsible and smarter water management practices becomes more pertinent than ever. At FCT, we acknowledge the importance of effective water management given that many aspects of our operations such as sanitation and cooling of our properties rely on a stable supply of water. According to Singapore’s Public Utilities Board (PUB), it is estimated that by 2065, Singapore’s total water demand could double. Against this backdrop, FCT targets to carefully manage our water use and has adopted a strategic approach to water management, enhancing the efficiency, resilience and long-term value of our portfolio. We aim to achieve a 25% reduction in water intensity by 2035, from FY2019 baseline. As of FY2023, we have achieved a reduction of 16.3% from FY2019 baseline. All our properties have been granted PUB’s Water Efficient Building (WEB) Certification. The WEB includes industry benchmarks and best practice sharing, FCT Water Consumption (kL) and Intensity (kL/m2) 2.5 889K 2.5 831K 2.7 903K FY2021 FY2022 FY2023 Water Consumption (kL) | Water Consumption Intensity (kL/m2) 8 Refrigerant and diesel purchased for FY2021 and FY2022 have been restated to reflect on overall progress over the years. Scopes 1, 2 and 3 carbon emissions for the reported periods are restated to factor in replacement of previous estimates with actual data and updated emission factors. 9 23 tCO2e is calculated for Category 7 based on 79% of response rate from our annual employee commuting survey. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 119 encouraging organisations to take a more active role in reducing water consumption. Our Actions and Progress GRI 306-2, 306-3, 306-4, 306-5 Our Actions and Progress GRI 303-1, 303-3 In FY2023, the total volume of water consumed across our properties was 903 megalitres10, with water intensity of 2.7 kL/m2, an increase of 8.7% from last year. This change is due to the increase in tenancy and activities across FCT-managed properties. FCT continues to undertake a range of initiatives to reduce water consumption across our properties, attesting to our continued efforts to responsible water management. This includes adoption of the ISO 14001 process and best practices for water conservation such as incorporating automated irrigation systems at selected malls, and actively monitoring and benchmarking water usage. Additionally, we prioritise the installation of water-efficient fittings with an “Excellent” rating under the Water Efficiency Labelling Scheme (WELS) to minimise water consumption wherever applicable. We also continuously promote the use of non-potable water sources such as NEWater11 and rainwater, reducing the strain on freshwater resources. In FY2023, we consumed close to 355 kilolitres of NEWater. Moving beyond infrastructural and operational enhancements, we have proactively taken steps to raise awareness about water conservation by encouraging sustainable behaviour among our employees, tenants and shoppers. Waste Our Approach GRI 3-3, 306-1, 306-3 While the retail industry may be a major contributor to waste production, it also has the greatest potential to be a gamechanger in advancing circular economy principles. FCT recognises the pivotal role it plays in this landscape and strives to be at the forefront of the retail sector’s transformation by committing to waste reduction and increased recycling rates. We actively encourage tenants and shoppers to engage in responsible consumption and engage with them to foster circular economy practices that align with our broader environmental goals. During the year, we also introduced the ‘ChopValue’ initiative at participating establishments within our malls, which repurposes discarded chopsticks into eco- friendly products. We track waste generated and waste sent for recycling across our properties. In FY2023, the total waste generated from our properties was 17,657 tonnes12, an increase of 5.9% from FY2022. Our waste streams comprise mixed recyclables and general waste generated from day-to-day operational business activities. In Singapore, general waste is usually sent to waste-to-energy plants for incineration. The increase of waste intensity to 53.7kg/m2 can be attributable to higher volume of activities observed in the malls. We sent 2,189 tonnes of waste for recycling, including 98% of paper and cardboard and 2% of metal, plastic and wood. Our commitment to promote recycling behaviours is evident from the increase in recycling rate of 12.4%, up from FY2022’s 11.9%, FCT strives to continue our efforts in minimising environmental impact and advancing responsible waste management practices. Waste Generated (tonnes) and Waste Intensity (kg/m2) Waste Generated (tonnes) Waste Intensity (kg/m2) 25,000 20,000 15,000 10,000 5,000 0 43.7 15,743 50.6 16,666 53.7 17,657 60 40 20 0 FY2021 FY2022 FY2023 Waste Generated (tonnes) | Waste Intensity (kg/m2) Waste Recycled (tonnes) and Recycling Rate (%) Waste Recycled (tonnes) Recycling Rate (%) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 10.8 1,701 11.9 1,988 12.4 2,189 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 FY2021 FY2022 FY2023 Waste Recycled (tonnes) | Recycling Rate 10 Water consumption for the reported periods are restated to factor in replacement of previous estimates with actual data. 11 In Singapore, NEWater is reclaimed water produced through advanced water treatment processes, including microfiltration, reverse osmosis, and ultraviolet disinfection. It is primarily used for non-potable purposes such as industrial processes, cooling water for power plants, and irrigating public spaces. 12 Waste data for the reported periods are restated to factor in replacement of previous estimates with actual data. 120 Frasers Centrepoint Trust Annual Report 2023 Consuming Responsibly Partnerships to Reduce Waste On July 14, 2023, over 100 partners and tenants from 13 Frasers Property Singapore malls came together for a sustainability-focused retail tenant engagement event. During a panel discussion, representatives from key partners such as McDonald’s Singapore, FairPrice Group, and Green Lab shared insights on how they collaborate to embed sustainability into their business practices. The event highlighted initiatives like FairPrice’s “no plastic bag” scheme, McDonald’s use of green materials, and showcased a united commitment to building a more sustainable retail ecosystem. At FCT, we take pride and place great emphasis on collaboration and partnership in the pursuit of our sustainability goals. Through such engagements, we not only acknowledge our business partners’ efforts, but also actively foster a dynamic environment where ideas and actions converge towards a greener future. Materials and Supply Chain Our Approach As a retail mall owner, we recognise our role in shaping our supply chain and the use of materials throughout our value chain. The oversight of these materials and supply chain activities is crucial for effective collaboration with our suppliers. This collaborative effort ultimately empowers us to implement responsible sourcing practices, thereby reducing risks along the value chain. Our Responsible Sourcing Policy is aligned with Frasers Property’s Responsible Sourcing Policy, guiding our approach to sustainable procurement. By mapping our value chain, we can identify our key suppliers based on the level of environmental and social risks. This ensures that our suppliers are compliant with the relevant regulations and are aligned with our core values. Our Responsible Sourcing Policy outlines our expectations of our suppliers across four key areas: Environmental Management Human rights and labour management Health, safety and well-being Business ethics and integrity Managing the environmental impacts of products and services and continuously seeking to improve environmental efforts Eliminating human rights violations and opposing human trafficking in operations and supply chains, on top of providing fair and transparent employment conditions to employees Managing health and safety risks and ensuring that workers are safe and protected Upholding business ethics and ensuring that business is lawfully conducted and with integrity Our Actions and Progress In FY2023, Frasers Property set a new goal of engaging 75% of suppliers across the Group (by spend) on the Responsible Sourcing Policy by the end of FY2025. This will be achieved through our supplier e-learning programme, designed to strengthen sustainability awareness and capabilities across our supply chain, along with other direct engagement strategies. We will be onboarding our suppliers onto the programme, which aims to encourage and equip our stakeholders to implement sustainable business practices. This will serve as a springboard towards reducing environmental and social impacts in our value chain. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 121 Biodiversity Our Approach The protection and promotion of biodiversity are critical in today’s world, in terms of creating resilient urban spaces: biodiversity provides a multitude of ecosystem services in cities, such as the enhancement of air quality, flood mitigation and reduction of the urban heat island effect. Yet, according to the World Economic Forum, the built environment sector is responsible for an alarming 30% of biodiversity loss globally. As a leading suburban retail mall operator in Singapore, FCT is cognisant of the growing importance of biodiversity conservation and its duty to mitigate its impact on the global ecosystem. The introduction of the Kunming Montreal Global Biodiversity Index and the emergence of supporting frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the Science-Based Targets for Nature presents opportunities for FCT to better understand our biodiversity-related impacts. As part of our evolving goals, we are committed to exploring ways to measure and address our impacts on nature. We are dedicated to staying informed about emerging best practices and the latest research in this area. By deepening our understanding of the significance of biodiversity, we aim to lay the foundation for a more sustainable and responsible future. Our Actions and Progress We support Frasers Property’s ESG Goal of developing a framework by FY2025 to guide the assessment and prioritisation of biodiversity risks and opportunities. This framework will be a first step within a broader roadmap to promote sustainable use of biodiversity in FCT. 122 Frasers Centrepoint Trust Annual Report 2023 Focusing on People FCAM, the Manager of FCT, which is a wholly-owned subsidiary of Frasers Property, adopts a people-focused approach aimed at enhancing the satisfaction and well-being of our employees, tenants, customers and local communities. We strive to champion the holistic well-being of all stakeholders, aligning with Frasers Property’s overarching purpose of “Inspiring experiences, creating places for good.” We are dedicated to nurturing a diverse and inclusive work environment that promotes growth and development for our staff. FCT upholds this commitment by engaging in fair employment practices while also nurturing a culture of continuous learning and development. Additionally, we continually invest in our local communities through various initiatives and partnerships. FCT’s goal is to have lasting positive impacts on the key focus areas within Frasers Property’s Community Investment Framework - Health, Education and the Environment. Our Progress Focus Area Our Goals Our Progress in FY2023 Diversity, Equity and Inclusion ● To embed diversity, equity and inclusion in our culture through employee engagement Women made up 25% and 40% of the Board of Directors and senior management respectively ● To provide training and education that raises employee awareness of diversity and inclusion and associated benefits ● To enhance processes and policies to encourage greater flexibility and diversity Skills and Leadership Health and Well-being ● To ensure continuous learning to build a ● 26 average training hours per employee resilient organisation ● To transform our workplace by building a wellness culture that positively engages employees ● All properties have implemented ISO 45001 occupational health and safety (“OH&S”) management system ● To create awareness of health management, ● All of our malls are certified BizSAFE STAR by the support mental wellness and foster a connected workforce ● To create a safe working environment and achieve zero injuries Workplace Safety and Health Council Community Connectedness ● To seek meaningful long-term relationships ● Collected 6.6 tonnes of foodstuff from members of the that respect local cultures and create lasting benefits public for donation to Food Bank Singapore ● Developed a tenant engagement plan to be implemented at FCT’s properties Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 123 Diversity, Equity and Inclusion Our Approach GRI 3-3, 2-29, 404-3 A diverse and inclusive workplace is of pertinence to FCAM. We recognise that diversity fuels growth and innovation. Job opportunities at FCAM are offered based on merit, regardless of age, race, gender, religion, marital status or disability. We view diversity as an asset that enriches our work environment and strengthens our connections with the communities we serve. We also aspire to extend this culture of inclusivity and care beyond our workplace to our valued shoppers by creating an inclusive and accessible shopping experience for everyone who visits our malls. We are in adherence to Frasers Property’s Diversity and Inclusion Policy and the Group Diversity, Equity and Inclusion Framework, which comprises four key equity strands: Gender Equity Cultural Equity Generation Equity Ability Equity Continue to advance women at the workplace, enable flexible working arrangements and support all families Promote a positive environment where employees can deliver their best regardless of race, ethnicity or sexual orientation Develop strategies and support for an age-diverse workforce, rethink learning and development for lifelong learning Develop awareness and understanding of recruiting and employing talent with disabilities, provide solutions at properties for inclusive spaces Our Actions and Progress GRI 2-7, 2-9, 401-1, 404-3, 405-1 We measure progress against applicable international standards by tracking and disclosing our employee composition in alignment with relevant GRI recommendations. As at 30 September 2023, all 27 employees of FCAM were permanent, full-time employees based in Singapore, with no temporary or part-time employees. FCAM had 70% of its employees, 40% of its senior management, and 25% of its Board members being female. These four equity strands serve as a strong foundation for fostering a diverse and inclusive workforce. Employees may report such incidents through our whistleblowing channels, without fear of reprisal. FCT will engage in the necessary remediation measures to resolve all cases. Frasers Property, of which FCAM is a part of, is a signatory to Singapore’s Tripartite Alliance for Fair & Progressive Employer Practices (TAFEP), underscoring our commitment to implementing fair and progressive HR practices. Additionally, as a member of the Singapore National Employer Federation, we ensure alignment with the latest statutory guidelines and national standards. We maintain an open appraisal system for all FCAM employees, with rewards based on meritocracy. All staff eligible for incentives receive a performance and career development review. To gain a better and more updated understanding of FCT’s business culture, we regularly engage our employees in surveys such as the biennial Culture Survey led by Frasers Property, as well as interim Pulse surveys. The findings from such engagements not only enhance our understanding of our teams’ work dynamics but also help foster improved communication and cooperation among employees. 124 Frasers Centrepoint Trust Annual Report 2023 Focusing on People In FY2023, we hired one employee, while one employee contributed to the total turnover over the year. A breakdown of hiring and turnover rates during the reporting period by gender and age group is presented in the table below: Hiring rate Turnover rate FCT recognises the importance of building a sustainable talent pipeline. We carry out yearly performance evaluations that encompass an open and transparent appraisal approach, enabling our employees to evaluate their performance and gain insights into their career growth. Our reward system is rooted in meritocracy, ensuring that employees are recognised and incentivised based on their achievements. Moreover, we are committed to fostering equal access to opportunities for all, promoting a pathway for professional development. This underscores our dedication to fostering a work environment that nurtures individual growth and potential. Creating more inclusive spaces for our community FCT extends our unwavering commitment to inclusivity and accessibility beyond our organisational framework as well. We ensure that our employees are not only trained but also empowered to assist those with special needs, fostering an environment where every individual, regardless of their abilities, feels valued and accommodated. Gender Female Male under 30 4% 4% 0% 0% 0% 0% Age 30 - 50 4% 4% over 50 0% 0% Region13 Singapore 4% 4% Inclusion Champions Programme FCT is committed to fostering a culture of inclusion through our participation in Frasers Property Singapore’s Inclusion Champions Programme. This initiative aims to train staff to become “Inclusion Champions” who can help create more inclusive spaces and cater to community members with diverse needs. The programme is extended to frontline employees at Frasers Property Singapore’s malls as well as its retail tenants. Inclusion Champions undergo yearly inclusivity training, covering consumer inclusiveness, support for persons with dementia, and shoppers on the Autism Spectrum. These trainings are conducted in collaboration with organisations such as SG Enable, Dementia Singapore, and St Andrew’s Autism Centre. Besides providing trainings, the programme drives efforts to transform malls into more accessible spaces through community consultation and partnerships with stakeholders. Inclusion Transformation Programme Inclusion Champions will also support the effort by setting aside space within their outlets that function as dementia go-to points or transition points. Stores may also provide calm shopping hours on Mondays and Tuesdays, where in-store lighting is dimmed, and music volume is restricted to cater to the needs of the neurodivergent and elderly. As of 30 September 2023, FCT has 176 stores offering calm shopping hours, and 29 dementia go-to points comprising of tenants and customer service counters. 13 All FCAM employees are employed and based in Singapore. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 125 Skills and Leadership Our Approach GRI 3-3 Our employees form the backbone of our business, serving as the driving force behind FCT’s continued success over the years. Recognising the importance of a skilled and empowered workforce, FCT places learning and development at the core of our human capital development and talent management strategy. We have training and upskilling initiatives in place to empower our employees with opportunities for growth enriches their professional journey. Fraser Property’s Talent & Learning team identifies and curates comprehensive training programmes to meet the diverse needs of our employees. We believe that this further enhances FCT’s capacity to adapt to evolving industry landscapes, foster organisational agility and cultivate leaders with growth-oriented mindsets. Our Actions and Progress GRI 404-1, 404-2 FCT collaborates closely with Fraser Property’s Talent & Learning team during dedicated learning needs dialogue discussions. During these sessions, we engage in constructive discussions about our employees’ learning needs and devise solutions that align with our business priorities and can help achieve our desired learning goals. In FY2023, our employees continued to participate actively in learning and development programmes. During the year, they underwent an average of 26 learning hours per employee. Among our employees, our female employees underwent an average of 26 hours of learning, while our male employees underwent 28 hours. By upskilling our employees with knowledge on sustainability concepts and practices, FCT ensures that our employees are empowered to integrate eco-conscious decisions into their roles and responsibilities. This enables them to develop a deeper appreciation for sustainability and its implications across various aspects of our operations. All new hires undergo sustainability training via an e-learning module. Further, to ensure that sustainability is incorporated into our strategy at the highest levels, each member of our Board, except Mr Tan Siew Peng (Darren) who was appointed on 26 September 2023, underwent SGX- prescribed sustainability training in FY2023. Average Learning Hours by Gender 30 20 10 0 25.7 28.2 Female employees Male employees 126 Frasers Centrepoint Trust Annual Report 2023 Focusing on People Health and Well-being Our Approach GRI 3-3 Ensuring the holistic well-being of our stakeholders, including employees, tenants, shoppers and local communities, is a top priority at FCT. We are fully committed to providing a safe and healthy environment for people to work and enjoy. This dedication is exemplified through our stringent workplace safety practices and our ongoing efforts to uphold the highest safety standards across all our business operations. Upholding occupational health and safety standards across our properties GRI 403-1, 403-2, 403-4, 403-5, 403-7 Frasers Property Singapore’s Sustainability & Safety Working Committee is responsible for implementing environmental health and safety systems and policies as well as monitoring occupational health and safety performance. The Working Committee, which comprises representatives from FCAM and Frasers Property’s retail management and commercial portfolios, meets monthly to discuss safety-related issues and identify areas for improvement. Overseeing the Working Committee is Frasers Property Singapore’s Sustainability Steering Committee, which is responsible for making key decisions to drive sustainability goals. Hazard identification and Risk Assessment (HIRA) To foster improved engagement between our senior leaders and site staff members, FCAM organises quarterly site safety walks. This initiative serves as a proactive measure to reinforce our commitment to safety at all levels of our organisation. During these safety walks, senior leaders actively interact with on-site staff to gain first-hand insights into safety measures, identify potential risks and ensure the effective implementation of safety protocols. At our retail and office properties, an annual audit is conducted to assess compliance with the ISO 45001 occupational health and safety management system. These audits meticulously evaluate hazard identification and risk assessments at audit sites, providing a comprehensive overview of safety measures across our portfolio. Conducting these regular safety assessments enable us to maintain rigorous standards and continually foster a culture of safety, promoting a secure and healthy environment for all stakeholders. In addition, all of our malls have been awarded the BizSAFE STAR by the Workplace Safety and Health (WSH) Council. To uphold our rigorous safety standards, we mandate that all contractors engaged in projects exceeding a certain value hold BizSAFE Level 3 certification. This stringent approach underscores our dedication to maintaining a secure and compliant working environment across our portfolio. Cultivating holistic employee health and well-being GRI 401-2, 403-6 FCAM aligns our human resource practices with those of Frasers Property. This includes an extensive range of welfare benefits, encompassing family care and parental leave, as well as life, medical, and accident insurance coverage. Adhering to Singapore-legislated social security policies, FCAM makes monthly contributions to our employees’ Central Provident Fund accounts. This ensures that our employees receive the necessary financial support as mandated by the law. Every full-time and contract employee of FCAM has access to a flexible benefit scheme, enabling them to personalise their benefits according to their needs. This includes options for increased personal insurance coverage, outpatient treatments, dental care, and health screenings. Those working for FCAM can also utilise the employer assistance programme (EAP) launched by Frasers Property. This initiative provides confidential professional counselling services, allowing employees an avenue to sound out should they face any personal challenges. Notably, since FY2022, access to this programme was extended to the immediate family members of our employees, cementing our commitment to supporting our employees’ and their loved ones’ holistic well-being. Going a step further, FCAM has also implemented employee well-being programmes aimed at safeguarding the health of FCAM’s employees. Collaborating with Frasers Property’s Corporate Wellness team, we engage in activities that address physical, mental, financial, and environmental wellness aspects through the Corporate Wellness Framework. Furthermore, property-level well-being initiatives are organised for our stakeholders, highlighting our dedication to a holistic approach to well-being. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 127 FCAM has implemented a policy allowing its staff to leave work earlier every last Friday of the month, enabling them to spend valuable time with their families. These initiatives underscore our commitment to prioritising our employee’s mental and emotional health. To gain comprehensive insights into the sentiments of our employees, Frasers Property conducts Group- wide employee surveys every two years. These surveys serve as a valuable tool for understanding employee perspectives in FCAM, gauging their satisfaction levels, and identifying areas for improvement. By engaging in these surveys, we demonstrate our commitment to fostering a supportive and fulfilling work environment that is responsive to the diverse requirements of our workforce. Our Actions and Progress GRI 401-3, 403-9, 403-10 In FY2023, there were no work-related fatalities, high-consequence injuries, work-related ill health or significant safety-related non-compliance cases for our staff and contractors at FCT’s properties. There was, however, two cases of recordable injury reported with 11 lost days incurred, taking place at our portfolio. In relation to this, appropriate follow-up action have been taken after the incidents to remediate, strengthen safety protocols and prevent further occurrence. FCT has adopted parental leave policy, applicable to employees regardless of gender and nationality, to support employees with their childcare commitments . In both FY2022 and FY2023, no FCAM employees took parental leave. Creating Safer Spaces Through Innovation Going beyond compliance, FCAM engages its employees in creating safer environments within our malls, empowering them to be safety advocates. This year, through the Frasers Property Singapore Workplace Safety and Health Award programme, teams from each of FCT’s malls channelled their creativity into ideating solutions to address safety issues. For instance, the team at Tampines 1 introduced Singapore’s first magnetic bollards for escalators, mitigating safety risks associated with prams and trolleys. In collaboration with Singapore’s Building and Construction Authority (BCA), these bollards were piloted at Tampines 1 for six months. During the pilot, it was observed that the bollards reduced incidences of shoppers using their prams and trolleys on escalators in the mall by approximately 50%, reducing the risk of escalator-related injuries. At Tiong Bahru Plaza, a CCTV camera in the chiller plant room provided a safer way to monitor water seepage, reducing the need to work at heights. To further improve electrical safety in the chiller plant room, the team added an acrylic screen between the pumps and electrical boards, protecting the boards from potential water exposure in the event of a leak. The team at Hougang Mall installed a secure platform with additional lighting, facilitating access to kitchen waste pipes on the property. This initiative improved visibility in the area, enabling safer collaboration between staff and contractors. The team also replaced a long roof ladder with two shorter ladders, and installed a separate platform to make equipment transportation safer and more efficient. 128 Frasers Centrepoint Trust Annual Report 2023 Focusing on People Community Connectedness Our Approach GRI 3-3 FCT is dedicated to forming meaningful and lasting connections with our employees, tenants and local communities. This commitment is demonstrated through our involvement in community investment activities, including beach clean-ups and food donations, as well as customer engagement initiatives such as educational exhibitions. These initiatives aim to enhance the sense of community connectedness and foster a stronger, more interconnected community. FCT’s initiatives are steered by the Community Investment Framework established by Frasers Property. This framework revolves around three fundamental pillars: Health, Education and the Environment. These areas are carefully chosen to maximise the positive impact of our efforts. To ensure the effectiveness and significance of our contributions, we tailor our initiatives to address the specific needs of each community we are committed to serving. By aligning our efforts with the unique requirements of these communities, we aim not only to make a difference but also to make a meaningful and lasting one that resonates with local needs and aspirations. Our Actions and Progress We dedicate our resources towards making a positive difference to society through the pillars in our Frasers Property’s Community Investment Framework. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 129 Health Food Bank Volunteer Sessions with Tenants and Staff Since 2019, we have been collaborating with the Food Bank Singapore to combat food waste. As part of this partnership, dedicated food bank donation boxes are placed at our commercial and retail properties to collect donated non-perishable food items. Leveraging their locations as key community hubs, our properties serve as convenient drop-off points for members of the public to donate food. All donations are redistributed to households in need, through organisations such as family service centres, soup kitchens, and other voluntary welfare organisations. As part of this initiative in December 2022, 200 staff volunteers spent meaningful time at the Food Bank Singapore to pack and deliver 1,000 bundles of food to households in need of food. Additionally, in April 2023, our property manager collaborated with FCT tenants, such as McDonald’s, Metro (Singapore), Koufu and Toys”R”Us Singapore. This collective effort resulted in the successful packing and distribution of 100 food bundles for the beneficiaries of NTUC Health Senior Day Care (Henderson). These initiatives highlight our unwavering dedication to addressing the often-overlooked issue of food insecurity in Singapore. Education ‘Happy Home Happy Earth’ Exhibition at Northpoint City In March 2023, Northpoint City hosted the ‘Happy Home Happy Earth’ exhibition. In this exhibition, shoppers and members of the public had the opportunity to explore various ‘rooms’ showcasing informative displays. The content educated individuals on ways in which one can adopt more sustainable lifestyles at home and in their day-to-day practices. Activities in this exhibition ranged from engaging upcycling workshops to practical lessons on conducting basic electric repairs. This interactive and educational experience empowered visitors with the knowledge and skills needed to integrate sustainability into their daily lives. Environment Coastal and Beach Clean-Ups In April 2023, 40 employees from across Frasers Property engaged in our environmental conservation efforts. The event, which included representation from leaders which included Soon Su Lin, Chief Executive Officer of Frasers Property Singapore, Low Chee Wah, Chief Executive Officer Of Frasers Property Retail and Jack Lam, Chief Operating Officer (COO) Commercial, Frasers Property Singapore – participated in a beach clean-up along a section of East Coast Beach. Our commercial team simultaneously organised a separate coastal clean-up session specially for their tenants. In total, approximately 84 kilogrammes of litter were collected during these efforts. 130 Frasers Centrepoint Trust Annual Report 2023 About This Report GRI 2-2, 2-3 Report Scope External Assurance To verify the reliability of the data and management approach disclosed in our Sustainability Report, we sought an independent limited assurance by Ere-S Pte Ltd, an independent third-party assurance provider. Details of the assurance scope and findings can be found in the Independent Assurance Statement on pages 131 to 133. Feedback We welcome your feedback in our efforts to continuously improve our sustainability practices and performance. Please contact: Chen Fung Leng Vice President, Investor Relations Frasers Centrepoint Trust Email: ir@fraserscentrepointtrust.com This is FCT’s ninth annual Sustainability Report. It provides a summary of our sustainability commitments and our progress in managing our material sustainability issues. The information contained in this report pertains to the period 1 October 2022 to 30 September 2023 (FY2023) and covers our operations and properties in Singapore. These properties are Causeway Point, Waterway Point (of which FCT holds a 50.00% interest), Tampines 1, Northpoint City North Wing (inclusive of the Yishun 10 Retail Podium), Tiong Bahru Plaza (inclusive of Central Plaza), Century Square, Changi City Point, Hougang Mall and White Sands. Restatements of data and further notes to the performance data included in this report can be found on pages 116 to 119. International Standards and Guidelines This Report has been prepared in accordance with: • • the Global Reporting Initiative (GRI) Universal Standards 2021 the SGX-ST Listing Manual (Rules 711A and 711B) and the SGX Core ESG Metrics FCT has applied the Reporting Principles from the GRI Standards to ensure high quality and proper representation of the reported information. For a full list of disclosures reported, please refer to the GRI Content Index on pages 134 to 138. This report has also incorporated the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 131 Independent Assurance Statement To the management of Frasers Centrepoint Trust Ere-S Pte Ltd (Ere-S) has undertaken an independent limited assurance on the content of Frasers Centrepoint Trust‘s (“FCT”) Sustainability Report FY2023 (“the Report”). The engagement, which took place between September and November 2023, formed part of a wider assurance of Frasers Property Limited’s Sustainability Report. Scope The assurance encompassed the entire Report and focused on all figures, statements and claims related to sustainability during the reporting period October 2022 to September 2023. This included the environmental and social management approach and performance data related to the company’s corporate office and portfolio of owned and managed properties (nine in total), covering the following topics: Energy, carbon emissions, water, waste, diversity, employment, training, and safety. The assurance does not cover historical figures, such as in environmental charts showing FY2021 and FY2022 performance, which were restated to factor in updated and actual data from the relevant periods. Disclosures on projected performance and savings of individual projects or properties were also not covered. Ere-S did not verify that the Report contained all information required by the GRI Standards for each disclosure listed in the Report’s GRI Content Index, nor did Ere-S assess the validity of the information given in the Index, including the reasons for omissions. Similarly, the verification did not cover whether FCT’s material issues, approaches and outcomes presented in the Report were specifically aligned with any other frameworks mentioned in the Report, such as the Task Force on Climate-related Financial Disclosures (TCFD) framework, the MAS guidelines, the GHG Protocol, and the Sustainable Development Goals (SDGs). Figures or statements unrelated to sustainability were not covered in the assurance. These include organisation profile and corporate structure, corporate financial and economic performance, and, where applicable, technical descriptions and figures of construction, machineries, technologies, plants and production processes. Assurance criteria The information was verified against the principles of Accuracy, Verifiability, Clarity, Completeness, Balance, Comparability, Sustainability Context and Timeliness as defined under the Global Reporting Initiative (GRI) Standards. Type of assurance This assurance engagement was carried out to a limited level of assurance in accordance with the International Standard on Assurance Engagements 3000 (ISAE 3000), Assurance Engagements Other than Audits or Reviews of Historical Financial Information. A limited level assurance relies on desktop-based assessment and basic sampling that is sufficient to support the plausibility of the information. Assurance methodology The assurance procedures and principles applied in this engagement are compliant with ISAE 3000 and are drawn from a methodology developed by Ere-S comprising the following steps: 1. Identifying and classifying data sets according to the relevant topics and the types of evidence required for the verification process. 2. Carrying out virtual interviews and remote desktop- based data verification with the key data owners located at FCT’s corporate office in Singapore. Specifically: • Enquiring about the quantitative and qualitative aspects of the performance disclosures, related statements and the underlying measurement systems, data collection and quality control mechanisms. • Requesting evidence of data sources from the data owner or key functional manager, as well as explanations of data collection and calculation methods (including conversion factors, estimates, key assumptions and apportionment methodologies) to substantiate the figures and claims. • Taking a broad sampling of quantitative data to validate data sets and corresponding sources, as well as other supporting information. • Challenging the claims made in the Report and comparing the presented evidence (including calculation methods, criteria and assumptions) with external sources and information from other business units and portfolios covered in the wider assurance engagement or from previous assurance engagements conducted for FCT. 3. Assessing the collected data against the reporting criteria and providing recommendations for correction of the Report’s content or for future improvement of the data collection and reporting procedures. 4. Validating the performance disclosures submitted in the final version of the Report and, where applicable, verifying that Ere-S recommendations have been applied. 132 Frasers Centrepoint Trust Annual Report 2023 Independent Assurance Statement Ere-S was given access to the data management systems covering the entire FCT portfolio to allow our assurance team to evaluate the environmental and safety data more comprehensively. Social performance figures, such as those relating to workforce profile and training, as well as group-level initiatives disclosed in the Report, were verified in separate interviews as part of the assurance process for Frasers Property Limited. Ere-S assessment of statements concerning the number (or absence) of complaints, incidents, breaches, and cases of non-compliance to policies and regulations related to environmental and social issues was founded on confirmation by key data owners and, where available, internal documents presented during the interviews. FCT’s stakeholder groups or their representatives were not interviewed during the assurance to assess the results of the engagement initiatives and the impact of the actions taken by the organisation. Limitations A limited assurance provides a relatively lower level of confidence in an organisation’s disclosures than a reasonable level of assurance (as used in financial auditing) would provide. The restricted extent, timeline and precision of audit procedures in a limited assurance can leave small misstatements undetected. In addition, sustainability-related evidence being more persuasive rather than conclusive, the assurance findings are more constrained to the judgement of the assurance practitioner. To mitigate the associated risk of material misstatement in the disclosures being assessed during this engagement and to provide greater confidence in the accuracy of the information, including the application of the management approach, data collection methods, criteria and assumptions, further confirmation of the presented evidence was sought by Ere-S from multiple data owners and using other internal and external documentation. Responsibility and independence This statement represents the independent opinion of Ere-S, whose responsibility was to provide the assurance, to express conclusions according to the agreed scope, and to prepare the assurance report and this assurance statement for the management of FCT alone and for no other purpose. The management of FCT was responsible for the preparation of the Report, including all statements and figures contained within it, and for the selection and application of the methods to collect and compile the performance data of its operations and properties. Ere-S was not involved in the development of the Report or any other aspects or projects related to the sustainability framework of FCT. The activities of Ere-S are independent of FCT and Frasers Property Limited and contain no financial interest in their business operations. Findings and Observations The operations and portfolio of FCT are supported by policies, procedures, and objectives aligned with the global ESG strategy of the Group. We found evidence indicating the adoption of a risk-based approach for assessing social and environmental impacts and establishing mitigation measures, with a particular emphasis on responding to climate change. Other environmental and social aspects were also addressed, including through multiple platforms for engaging with stakeholders, such as employees, customers, investors, and government bodies. There was, however, less evidence of consistent two-way engagement with other stakeholder groups. Based on our assessment, the content of the Report is sufficiently comprehensive, covering the company’s operational boundaries and key material aspects. We found an overall high level of accuracy and verifiability in the performance disclosures and statements on the management approach, and important information could be traced back to supporting evidence, including source documents, data sets, and calculation methods. Confidence in the data quality was enforced by additional checks executed during the year by the main data owners on the environmental records provided by the properties’ key functional managers. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 133 No significant gaps or inconsistencies were found in the Report’s disclosures, and the reporting team promptly applied Ere-S recommendations for minor corrections. Ere-S commends this year’s increase in reporting boundaries with the inclusion of fugitive emissions from cooling systems and the addition of GHG emissions categories in the Scope 3 disclosures. However, FCT could further improve the completeness of the Report content by disclosing more information on the indirect social and environmental impact in the rest of its value chain. Also, the Report could be more balanced, i.e., showing positive and negative information, with highlights on current gaps and negative performance, for example, related to internal targets or alignment with standards. Conclusion On the basis of a limited assurance engagement consistent with the above-listed criteria, nothing has come to Ere-S attention that causes us not to believe that, in all material respects, Frasers Centrepoint Trust’s Sustainability Report FY2023 provides a credible and fair representation of the organisation’s sustainability profile and includes statements and figures that achieve an adequate level of reliability and accuracy. A detailed assurance report containing the above findings and additional recommendations for improvement has been presented to the management of Frasers Centrepoint Trust. Reg no. 201003736W www.ere-s.com Singapore, 21 November 2023 Jean-Pierre Dalla Palma Director and Lead Certified Sustainability Assurance Practitioner Ere-S Pte Ltd is a consulting company specialising in business sustainability and provides sustainability reporting, sustainability report assurance, stakeholder engagement and training services. Our assurance team comprises assurance practitioners with expertise in corporate sustainability, and each member must follow Ere-S’ assurance code of conduct, which can be found at www.ere s.com/assurance-code-of-conduct. Ere-S is not responsible for any actions taken by other parties as a result of the findings presented in this assurance statement. 134 Frasers Centrepoint Trust Annual Report 2023 GRI Content Index Statement of use GRI 1 used Frasers Centrepoint Trust has reported in accordance with the GRI Standards for the period 1 October 2022 to 30 September 2023 (FY2023). GRI 1: Foundation 2021 GRI Standard/ Other Source Disclosure Location Requirement(s) Omitted Reason Explanation Omission General disclosures GRI 2: General Disclosures 2021 2-1 Organizational details 2-2 Entities included in the organization’s sustainability reporting 2-3 Reporting period, frequency and contact point 2-4 Restatements of information 2-5 External assurance 2-6 Activities, value chain and other business relationships 2-7 Employees 2-8 Workers who are not employees 2-9 Governance structure and composition 2-10 Nomination and selection of the highest governance body 2-11 Chair of the highest governance body 2-12 Role of the highest governance body in overseeing the management of impacts 2-13 Delegation of responsibility for managing impacts 2-14 Role of the highest governance body in sustainability reporting 2-15 Conflicts of interest Corporate Profile, pages 2 to 3, Corporate information, inside back cover of Annual Report. About this Report, page 130. About this Report, page 130. Consuming Responsibly – Energy and Carbon, pages 116 to 118, Water, pages 118 to 119, Waste, pages 119 to 120. Independent Assurance Statement, pages 131 to 133. About Frasers Centrepoint Trust, page 2. Focusing on People – Diversity, Equity and Inclusion, pages 123 to 124. Structure of FCT and Organisation Structure of The Manager, page 3, Board of Directors, pages 16 to 19, Management Team, pages 20 to 21, Corporate Governance Report, pages 139 to 178, Managing Sustainability, page 100. Corporate Governance Report, page 139 to 178 . Board of Directors, pages 16 to 19. Board of Directors, page 16 to 19, Board Statement, page 96, Managing Sustainability, Page 100. Corporate Governance Report – Delegation of Authority Framework, page 145, Management Team, pages 20 to 21, Managing Sustainability – Sustainability Governance, page 100. Board Statement, page 96, Managing Sustainability – Sustainability Governance, page 100. Corporate Governance Report – Conflict of Interest Policy, page 159. a, b, c Not applicable. The REIT Manager does not engage a significant number of workers who are not employees. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 135 GRI Standard/ Other Source GRI 2: General Disclosures 2021 Material topics GRI 3: Material Topics 2021 Disclosure 2-16 Communication of critical concerns 2-17 Collective knowledge of the highest governance body 2-18 Evaluation of the performance of the highest governance body Location Corporate Governance Report – Governance of Risk and Internal Controls, page 167. Resilient Properties – Our Actions and Progress, pages 108 to 109, Corporate Governance Report – Training and Development of Directors, page 148. Corporate Governance Report – Board Performance Evaluation, pages 159 to 160. 2-19 Remuneration policies Corporate Governance Report – Remuneration Matters, pages 160 to 161. Corporate Governance Report – Remuneration Matters, pages 160 to 161. 2-20 Process to determine remuneration 2-21 Annual total compensation ratio 2-22 Statement on sustainable development strategy 2-23 Policy commitments 2-24 Embedding policy commitments 2-25 Processes to remediate negative impacts 2-26 Mechanisms for seeking advice and raising concerns 2-27 Compliance with laws and regulations 2-28 Membership associations 2-29 Approach to stakeholder engagement 2-30 Collective bargaining agreements 3-1 Process to determine material topics 3-2 List of material topics Board Statement, page 96. Acting Progressively - Risk- based Management, pages 105 to 107. Acting Progressively - Risk- based Management, page 105. Acting Progressively - Risk- based Management, pages 105 to 107. Acting Progressively - Risk- based Management, pages 105 to 107. Acting Progressively - Risk- based Management, pages 105 to 107. Managing Sustainability - Participation in Membership Associations and Alignment with Recognised Standards, page 100. Managing Sustainability – Stakeholder Engagement, pages 100 to 101. Managing Sustainability – Materiality Assessment, pages 102 to 103. Managing Sustainability – Materiality Assessment, pages 102 to 103. Requirement(s) Omitted Reason Explanation Omission a, b, c Confidentiality constraints. We are unable to disclose the ratio due to our highly competitive labour market. e Information unavailable. We do not track the effectiveness of the mechanisms but we readily welcome feedback through our various communication channels. a, b Confidentiality constraints. We do not publicly disclose this data. Acting Progressively Risk-based Management GRI 3: Material Topics 2021 3-3 Management of material topics Acting Progressively – Risk- based Management, pages 105 to 107. a,b Information incomplete. Lack of data for meaningful disclosure. 136 Frasers Centrepoint Trust Annual Report 2023 GRI Content Index GRI Standard/ Other Source GRI 205: Anti- corruption 2016 GRI 206: Anti- competitive Behaviour 2016 Disclosure 205-1 Operations assessed for risks related to corruption 205-2 Communication and training about anti- corruption policies and procedures 205-3 Confirmed incidents of corruption and actions taken 206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices Location Acting Progressively – Risk- based Management, pages 105 to 107. Acting Progressively – Risk- based Management, pages 105 to 107. Acting Progressively – Risk- based Management, pages 105 to 107. Acting Progressively – Risk- based Management, pages 105 to 107. Responsible Investment GRI 3: Material Topics 2021 3-3 Management of material topics Resilient Properties GRI 3: Material Topics 2021 3-3 Management of material topics Acting Progressively – Responsible Investment, page 108. Acting Progressively – Resilient Properties, pages 108 to 113. Innovation GRI 3: Material Topics 2021 3-3 Management of material topics Acting Progressively – Innovation, page 114. Consuming Responsibly Energy and Carbon GRI 3: Material Topics 2021 3-3 Management of material topics GRI 302: Energy 2016 302-1 Energy consumption within the organization 302-2 Energy consumption outside of the organization 302-3 Energy intensity 302-5 Reductions in energy requirements of products and services Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 305-2 Energy indirect (Scope 2) GHG emissions 305-3 Other indirect (Scope 3) GHG emissions 305-4 GHG emissions intensity 305-5 Reduction of GHG emissions Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. Consuming Responsibly – Energy and Carbon, pages 116 to 118. Water GRI 3: Material Topics 2021 3-3 Management of material topics Consuming Responsibly – Water, pages 118 to 119. Omission Requirement(s) Omitted c, d Reason Information incomplete. Explanation Lack of data for meaningful disclosure. a.b.c Information incomplete. Due to the management of diverse properties and year- on-year fluctuations, we are unable to provide specific numerical reductions in energy consumption that are directly tied to initiatives. This complexity makes it challenging to precisely isolate the impact of its reduction measures. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 137 Requirement(s) Omitted Reason Explanation Omission b, c Information incomplete. FCT tracks total water withdrawal but currently does not break this down to source and water stress areas. a Information incomplete FCT does not currently track the waste composition. GRI Standard/ Other Source GRI 303: Water and Effluents 2018 Disclosure 303-1 Interactions with water as a shared resource 303-3 Water withdrawal Location Consuming Responsibly – Water, pages 118 to 119. Consuming Responsibly – Water, pages 118 to 119. Waste GRI 3: Material Topics 2021 GRI 306: Waste 2020 3-3 Management of material topics 306-1 Waste generation and significant waste-related impacts 306-2 Management of significant waste-related impacts 306-3 Waste generated 306-4 Waste diverted from disposal 306-5 Waste directed to disposal Consuming Responsibly – Waste, pages 119 to 120. Consuming Responsibly – Waste, pages 119 to 120. Consuming Responsibly – Waste, pages 119 to 120. Consuming Responsibly – Waste, pages 119 to 120. Consuming Responsibly – Waste, pages 119 to 120. Consuming Responsibly – Waste, pages 119 to 120. Materials and Supply Chain GRI 3: Material Topics 2021 3-3 Management of material topics Consuming Responsibly – Materials and Supply Chain, page 120 Biodiversity GRI 3: Material Topics 2021 3-3 Management of material topics Consuming Responsibly – Materials and Supply Chain, page 120. Focusing on People Diversity, Equity and Inclusion GRI 3: Material Topics 2021 3-3 Management of material topics GRI 401: Employment 2016 GRI 402: Labor/ Management Relations 2016 GRI 405: Diversity and Equal Opportunity 2016 401-1 New employee hires and employee turnover 402-1 Minimum notice periods regarding operational changes 405-1 Diversity of governance bodies and employees 405-2 Ratio of basic salary and remuneration of women to men Skills and Leadership GRI 3: Material Topics 2021 GRI 404: Training and Education 2016 3-3 Management of material topics 404-1 Average hours of training per year per employee 404-2 Programs for upgrading employee skills and transition assistance programs 404-3 Percentage of employees receiving regular performance and career development reviews Focusing on People – Diversity, Equity and Inclusion, pages 123 to 124. Focusing on People – Diversity, Equity and Inclusion, pages 123 to 124. Focusing on People – Diversity, Equity and Inclusion, pages 123 to 124. Focusing on People – Skills and Leadership, page 125. Focusing on People – Skills and Leadership, page 125. a, b Not applicable. The notice period varies on a situational basis. a, b Information incomplete. Lack of data for meaningful disclosure. Focusing on People – Skills and Leadership, page 125. b Information incomplete. Lack of data for meaningful disclosure. Focusing on People – Skills and Leadership, page 125. Health and Well-being GRI 3: Material Topics 2021 3-3 Management of material topics Focusing on People – Health and Wellbeing, pages 126 to 127. 138 Frasers Centrepoint Trust Annual Report 2023 GRI Content Index GRI Standard/ Other Source GRI 401: Employment 2016 GRI 403: Occupational Health and Safety 2018 Disclosure 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 401-3 Parental leave 403-1 Occupational health and safety management system 403-2 Hazard identification, risk assessment, and incident investigation 403-4 Worker participation, consultation, and communication on occupational health and safety 403-5 Worker training on occupational health and safety 403-6 Promotion of worker health 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 403-9 Work-related injuries 403-10 Work-related ill health Requirement(s) Omitted Reason Explanation Omission b a Information incomplete. Lack of data for meaningful disclosure. Information incomplete. Lack of data for meaningful disclosure. Location Focusing on People – Health and Well-being, pages 126 to 127. Focusing on People – Health and Well-being, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. Focusing on People – Health and Wellbeing, pages 126 to 127. c, f c, d Information incomplete. Lack of data for meaningful disclosure. Information incomplete. Lack of data for meaningful disclosure. Community and Connectedness GRI 3: Material Topics 2021 3-3 Management of material topics Focusing on People – Community Connectedness, pages 128 to 129. Notes General • Discrepancies between individual figures and aggregates, or derived values, in the charts and tables of this report are due to rounding. Energy, Gas GHG, Water and Waste Reporting Scope • The FY2019 baseline was chosen because of the relatively complete dataset established and it was more representative of our usual business activities. • No mobile combustion considered for Scope 1 emissions as there are no owned vehicles. Stationary combustion is considered due to diesel usage for generators. Industrial Processes and Product Use (IPPU) emissions are calculated based on refrigerants purchased for air conditioners and cooling systems. • Scope 3 disclosures in this report include fuel- and energy-related activities, waste generated in operations, employee commuting, and downstream leased assets. Fuel- and energy related well-to-tank transmission and distribution emissions are calculated based on the data provided in Scope 1 and 2. Waste generated in operations includes emissions from third-party disposal and treatment of waste generated (solid waste and wastewater) at controlled operations, assuming zero emissions for recycled waste. Employee commuting includes emissions from the transportation of employees between their homes and their worksites as well as teleworking. The category of downstream leased assets includes emissions from the operation of assets that are owned by the business and are leased to tenants, accounting for tenants’ Scope 1 and 2 emissions. • Energy, GHG, water and waste intensities exclude both newly completed properties in FY2023 and properties divested at any point during the reporting period. • The GHG emission factors are from Greenhouse Gas Reporting Conversion Factors 2021, 2022 and 2023 by the United Kingdom’s Department for Energy Security and Net Zero and Department for Business, Energy & Industrial Strategy; Singapore Energy Statistics (published in Oct 2022) from Energy Market Authority (“EMA”) • The number of recordable injuries and lost days led to a recordable injury rate of 3.9 and a severity rate of 40.8. Rates are calculated per million hours worked, and man-hours have been estimated by property managers based on regular business operations. Monetary Disclosure • All monetary related disclosures within the report are in Singapore Dollars ($) unless stated otherwise. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 139 Corporate Governance Report INTRODUCTION Frasers Centrepoint Trust (“FCT”) is a real estate investment trust (“REIT”) listed on the Main Board of the Singapore Exchange Securities Trading Limited (the “SGX-ST”). FCT is managed by Frasers Centrepoint Asset Management Ltd. (the “Manager”), a wholly-owned subsidiary of Frasers Property Limited (“FPL” or the “Sponsor” and together with its subsidiaries, “FPL Group”). In line with the listing manual of the SGX-ST (the “SGX-ST Listing Manual”) and its obligations under the Guidelines to All Holders of a Capital Markets Services Licence for Real Estate Investment Trust Management (Guideline No: SFA04–G07) issued by the Monetary Authority of Singapore (“MAS”), the Manager complies with the principles of the Code of Corporate Governance 2018 (the “CG Code”). The practices and activities of the board of directors of the Manager (the “Board”) and the management of the Manager (the “Management”) adhere closely to the provisions under the CG Code. To the extent the practices may vary from any provision of the CG Code, the Manager will state explicitly the provision from which it has varied, explain the reason for the variation and explain how the practices nevertheless are consistent with the intent of the relevant principle of the CG Code. The Manager is also guided by the Practice Guidance which accompanies the CG Code and which sets out best practices for listed issuers, as this will build investor and stakeholder confidence in FCT and the Manager. A summary of compliance with the express disclosure requirements under the provisions of the CG Code is set out on pages 177 to 178 of this Annual Report. The Manager The Manager has general powers of management over the assets of FCT. As a manager of a REIT, the Manager holds a Capital Markets Services Licence issued by the MAS to carry out REIT management activities. The Manager’s main responsibility is to manage FCT’s assets and liabilities for the benefit of unitholders of FCT (the “Unitholders”). To this end, the Manager is able to set the strategic direction of FCT and make recommendations to HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of FCT (the “Trustee”), on acquisitions, divestments and enhancement of the assets of FCT. It also supervises the property manager, Frasers Property Retail Management Pte. Ltd. in its day-to-day management of certain properties within FCT’s portfolio, namely, Causeway Point, Northpoint City North Wing and Yishun 10 Retail Podium, Changi City Point1, Waterway Point (50.00% interest), Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square, Tampines 1 and Central Plaza pursuant to property management agreements entered into for each property. The role of the Manager includes the pursuit of a business model that sustains the growth and enhances the value of FCT and is focused on delivering regular and stable distributions to Unitholders. Other functions and responsibilities of the Manager include preparing annual asset plans and undertaking regular individual asset performance analysis and market research analysis and managing finance functions relating to FCT (which includes financial and tax reporting, capital management, treasury and preparation of consolidated budgets). The Values of the Manager 1. 2. 3. The Manager is committed to upholding and maintaining high standards of corporate governance, corporate transparency and sustainability, and instituting sound corporate practices and controls to facilitate the Manager’s role in safeguarding and enhancing FCT’s asset value so as to maximise returns from investments, and ultimately the total return to Unitholders. The Manager believes that a robust and sound governance framework is an essential foundation on which to build, evolve and innovate a business which is sustainable over the long-term and one which is resilient in the face of the demands of a dynamic, fast-changing environment. The Manager adheres to corporate policies, business practices and systems of risk management and internal controls, which are designed to ensure that it maintains consistently high standards of integrity, accountability and governance in FCT and its own daily operations. The Manager ensures that the business and practices of FCT are carried out in a manner that complies with applicable laws, rules and regulations, including the Securities and Futures Act 2001 of Singapore (the “SFA”), the SGX-ST Listing Manual, the CG Code, the Code on Collective Investment Schemes (the “CIS Code”) issued by the MAS (including Appendix 6 of the CIS Code, the “Property Funds Appendix”), the trust deed constituting FCT between the Manager and the Trustee dated 5 June 2006 (as amended, restated and supplemented) (“Trust Deed”), as well as the written directions, notices, codes and other guidelines that the MAS and other regulators may issue from time to time. 1 As at 30 September 2023, Changi City Point was reclassified to “Assets held for sale”, following FCT’s announcement relating to the divestment of the property on 30 August 2023. The divestment was completed on 31 October 2023. 140 Frasers Centrepoint Trust Annual Report 2023 Corporate Governance Report The Board works with Management to ensure that these values underpin its leadership of the Manager. The Manager is staffed by an experienced and well-qualified team who manage the operational matters of FCT. The Manager is a wholly-owned subsidiary of FPL, a multi-national developer-owner-operator of real estate products and services across five asset classes, namely, residential, retail, commercial & business parks, industrial & logistics as well as hospitality. The FPL Group has businesses in Southeast Asia, Australia, Europe and China, and its well-established hospitality business owns and/or operates serviced apartments and hotels in over 70 cities and 20 countries across Asia, Australia, Europe, the Middle East and Africa. As the Sponsor holds a substantial ownership stake of approximately 41.35%2 in FCT, there is an alignment of interests between the Sponsor, the Manager and the Unitholders. The Manager is able to benefit from and leverage on its association with the Sponsor in the management of FCT in various ways, including tapping on the Sponsor’s extensive experience in development and management of real estate assets, sourcing for talent and experienced personnel within the Sponsor pool of employees, including those who may be considered for appointment to the Board, access to the FPL Group’s network of lenders for debt financing, and negotiating for favourable terms with external suppliers and vendors on a group basis. The Manager is appointed in accordance with the terms of the Trust Deed. The Manager can be removed by notice in writing given by the Trustee in favour of a corporation appointed by the Trustee under certain circumstances outlined in the Trust Deed, including where Unitholders, by a resolution duly passed by a simple majority of Unitholders present and voting (with no Unitholder being disenfranchised) at a Unitholders’ meeting, decide that the Manager is to be removed. BOARD MATTERS The Board The Board is responsible for the overall leadership and oversight of both FCT’s and the Manager’s business, financial, investment and material operational affairs and performance objectives, and its long-term success. The Board sets the strategic direction of FCT and the Manager, which includes appropriate focus on value creation, innovation and sustainability. The Board also determines the Manager’s approach to corporate governance, including setting appropriate tone-from-the-top and the desired organisational culture, values and ethical standards of conduct, and works with Management on its implementation across all levels of the organisation’s values, standards, policies and practices. The Board, supported by Management, ensures necessary resources are in place for FCT and the Manager to meet its strategic objectives. Through the enterprise-wide risk management framework of FCT and its subsidiaries (the “Group”), the Board establishes and maintains a sound risk management framework to effectively monitor and manage risks and to achieve an appropriate balance between risks and the Group’s performance. The Board also puts in place policies, structures and mechanisms to ensure compliance with legislative and regulatory requirements. The Board, which comprises directors who, as fiduciaries, are expected to act objectively in the best interests of the Manager and the Group, constructively challenges Management and reviews its performance, and holds Management accountable for performance. It also oversees Management to ensure transparency and accountability to key stakeholder groups. 2 As at 30 September 2023. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 141 The Chairman The chairman of the Board (the “Chairman”) leads the Board. The Chairman provides leadership and direction in the review of the Manager’s corporate strategy and objectives, sets the right ethical and behavioural tone and ensures the Board’s effectiveness by, among other things, promoting and maintaining high standards of corporate governance and transparency, encouraging active and effective engagement, participation by all directors of the Manager (the “Directors”) and facilitating constructive and appropriate relations among and between them and Management. The Chairman sets the agenda for each Board meeting to take full account of the issues and concerns of the Directors and the Management team, promotes a culture of openness and debate at Board meetings and encourages Directors to engage in productive and thorough discussions and constructive debate on strategic, business and other key issues pertinent to the business and operations of the Group and the Manager, leading to better decision-making and enhanced business performance. The Chairman, supported by Management, ensures effective communication with Unitholders, financial analysts and the media on critical issues that could significantly affect the reputation and standing of the Manager and FCT. The Chairman also presides over the Annual General Meeting each year and any other general meetings of the Unitholders. The Chairman addresses, and/or requests the Chief Executive Officer (the “CEO”) of the Manager to address the Unitholders’ queries and ensures that there is clear and open dialogue between all stakeholders. Role of the CEO and Management The Management is led by the CEO. The CEO is responsible for the execution of the strategies and policies as approved by the Board, and leading, promoting and conducting the affairs of FCT and the Manager with the highest standards of integrity, corporate governance and transparency. The CEO is responsible and is accountable to the Board for the conduct and performance of Management. The CEO and Management team of the Manager are responsible for executing the Manager’s strategies and policies as approved by the Board and are responsible for the planning, direction, control, conduct and performance of the business operations of the Manager. With the support of the Management, the CEO seeks business opportunities, drives new initiatives and is responsible for the operational performance of the Group and building and maintaining strong relationships with stakeholders of the Group. Division of Responsibilities between the Chairman and the CEO The Chairman and the CEO are separate persons and the division of responsibilities between the Chairman and the CEO is clearly demarcated. This avoids concentration of power and ensures a degree of checks and balances, an increased accountability, and greater capacity of the Board for independent decision-making. Such separation of roles between the Chairman and CEO promotes robust deliberations by the Board and Management on the business activities of FCT. Relationships between the CEO and Board None of the members of the Board and the CEO are related to one another, and none of them has any business relationships among them. Board Committees The Board has formed committees of the Board (the “Board Committees”) to oversee specific areas, for greater efficiency and has delegated authority and duties to such Board Committees based on written and clearly defined terms of reference. The terms of reference of the Board Committees set out their compositions, authorities and duties, including reporting back to the Board. There are two Board Committees, namely, the Audit, Risk and Compliance Committee (“ARCC”), and the Nominating and Remuneration Committee (“NRC”). Minutes of all Board Committee meetings are circulated to the Board so that Directors are aware of and kept updated as to the proceedings, matters discussed and decisions made during such meetings, and to enable the Directors to weigh in on any key points under consideration. Corporate Governance Report 142 Frasers Centrepoint Trust Annual Report 2023 Membership Key Objectives Audit, Risk and Compliance Committee(1) Ms Koh Choon Fah, Chairperson(2) Dr Cheong Choong Kong, Member(3) Mr Ho Chai Seng, Member Mr Ho Chee Hwee Simon, Member Mr Ho Kin San, Member(4) Mr Tan Siew Peng (Darren), Member(5) Notes: • Assist the Board in fulfilling responsibility for overseeing the quality and integrity of the accounting, auditing and financial practices, internal controls, risk management and sustainability practices of the Manager (1) Unless otherwise stated, the information provided herein is as at 30 September 2023. (2) Ms Koh Choon Fah was appointed as the Chairperson of the Board with effect from 1 November 2023. With effect from 1 November 2023, Ms Koh relinquished her role as the Chairperson of the ARCC. She remains a member of the ARCC and the NRC. (3) Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and NRC on 1 November 2023. (4) Mr Ho Kin San was appointed as a non-executive and independent Director and a member of the ARCC with effect from 18 July 2023. (5) Mr Tan Siew Peng (Darren) was appointed as a non-executive and independent Director and a member of the ARCC with effect from 26 September 2023. With effect from 1 November 2023, he was appointed as the Chairman of the ARCC. As at 30 September 2023, the ARCC comprises non-executive Directors, the majority of whom, including the chairperson of the ARCC, are independent Directors. All members of the ARCC, including the chairperson of the ARCC, are appropriately qualified and have recent and/or relevant accounting and related financial management expertise or experience. Their collective wealth of experience and expertise enables them to discharge their responsibilities competently. Under the Terms of Reference of the ARCC, a former partner or director of FCT’s existing auditing firm or auditing corporation shall not act as a member of the ARCC: (a) within a period of two years commencing on the date of his ceasing to be a partner of the auditing firm or a director of the auditing corporation; and in any case, (b) for so long as he has any financial interest in the auditing firm or auditing corporation. None of the members of the ARCC is a former partner of FCT’s external auditors, KPMG LLP and none of the members of the ARCC has any financial interest in FCT’s external auditors, KPMG LLP. AUDIT FUNCTIONS The Terms of Reference of the ARCC provide that some of the key responsibilities of the ARCC include: • • • • External Audit Process: reviewing and reporting to the Board the scope, quality, results and performance of the external audit(s), its cost effectiveness and the independence and objectivity of the external auditors. It shall also review the nature and extent of non-audit services performed by external auditors; Internal Audit: establishing an effective internal audit function which shall be adequately qualified to perform an effective role, adequately resourced, independent of the activities which it audits and able to discharge its duties objectively, and to approve the hiring, removal, evaluation and compensation of the head of the internal audit function, or the accounting/auditing firm or corporation to which the internal audit function is outsourced3. Financial Reporting: reviewing and reporting to the Board, the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of FCT and the Manager and any announcements relating to FCT’s and the Manager’s financial performance, and to review the assurance provided by the CEO and the Chief Financial Officer of the Manager (the “CFO”, and together with the CEO, the “Key Management Personnel”) that the financial records have been properly maintained and the financial statements give a true and fair view of FCT’s and/or the Manager’s operations and finances; Internal Controls and Risk Management: reviewing and reporting to the Board at least annually, its assessment of the adequacy and effectiveness of the Manager’s internal controls for FCT and the Manager, including financial, operational, compliance and information technology controls (including those relating to compliance with existing legislation and regulations), and risk management policies and systems established by Management; 3 For the financial year ended 30 September 2023, the internal audit function is outsourced to the FPL Group. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 143 • • • • Interested Person Transactions: reviewing interested person transactions (as defined in the SGX-ST Listing Manual) and interested party transactions (as defined in the Property Funds Appendix) (both such types of transactions constituting “Related/Interested Person Transactions”) entered into from time to time and the internal audit reports to ensure compliance with applicable legislation, the SGX-ST Listing Manual and the Property Funds Appendix; Conflicts of Interests: deliberating on resolutions relating to conflicts of interest situations involving FCT; Whistle-Blowing: reviewing the policy and arrangements by which staff of the Manager, FCT and any other persons may, in confidence, safely raise concerns about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for such concerns to be raised and independently investigated and for appropriate follow-up action to be taken; and Investigations: reviewing the findings of internal investigations into any suspected fraud or irregularity, or suspected infringement of any Singapore laws or regulations or rules of the SGX-ST or any other regulatory authority in Singapore, which the ARCC becomes aware of, and which has or is likely to have a material impact on FCT’s operating results or financial position. Where the external auditors, in their review or audit of FCT’s year-end financial statements, raise any significant issues which have a material impact on the interim financial statements or business updates previously announced by FCT or the Manager, the ARCC will bring this to the Board’s attention immediately so that the Board can consider whether an immediate announcement is required under the SGX-ST Listing Manual. In such a situation, the ARCC will also advise the Board if changes are needed to improve the quality of future interim financial statements or business updates – such changes (if any) will be disclosed in FCT’s annual report. In carrying out its role, the ARCC is empowered to investigate any matter within its Terms of Reference, with full access to, and cooperation by, Management, to seek information it may require from any Director and/or employee of the Manager. The ARCC also has full discretion to invite any Director or executive officer to attend its meetings, and obtain reasonable resources to enable it to discharge its functions properly. The Chairman, non-executive Directors, the CEO, the CFO, the head of the internal audit function, representatives of the external auditor(s), or other person with relevant experience and expertise may attend the meetings of the ARCC at the invitation of the ARCC. The meetings serve as a forum to review and discuss material risks and exposures of the Manager’s businesses and strategies to mitigate risks. The ARCC meets with internal auditors and external auditors without the presence of Management at least once a year to review various audit matters and the assistance given by Management to the internal and external auditors. In carrying out its function, the ARCC may also obtain independent or external legal or other professional advice or appoint external consultants as it considers necessary at the Manager’s cost. Periodic updates on changes in accounting standards and treatment are prepared by external auditors and circulated to members of the ARCC so that they are kept abreast of such changes and its corresponding impact on the financial statements, if any. Sustainability The ARCC also assists the Board in carrying out its responsibility in determining environmental, social and governance (“ESG”) factors identified as material to the business, monitoring and managing ESG factors and overseeing standards, management processes and strategies to achieve sustainability practices. The ARCC has oversight of sustainability practices, and assists the Board in ensuring that Management establishes and maintains a sound system of sustainability governance and an appropriate sustainability reporting framework which links sustainability risks and opportunities with strategy, other organisational risks and goals and which also enhances operational responses to sustainability risks and opportunities. Risk Management The ARCC shall review the framework and processes established by Management to achieve compliance with applicable laws, regulations, standards, best practice guidelines and the Manager’s policies and procedures. The ARCC shall assist the Board in ensuring that Management maintains a sound system of risk management and internal controls to safeguard the interests of the Manager or the interests of Unitholders (as the case may be) and the assets of the Manager and the assets of FCT. The ARCC also assists the Board in its determination of the nature and extent of significant risks which the Board is willing to take in achieving the Manager’s strategic objectives and the overall levels of risk tolerance and risk policies, including reviewing technology risks faced by the Manager. Further information on the key activities conducted by the ARCC can be found in the sections titled “Financial Performance, Reporting and Audit” on pages 166 to 167 and “Governance of Risk and Internal Controls” on pages 167 to 170. Corporate Governance Report 144 Frasers Centrepoint Trust Annual Report 2023 Membership Key Objectives Nominating and Remuneration Committee(1) Mr Ho Chai Seng, Chairman Dr Cheong Choong Kong, Member(2) Mr Ho Chee Hwee Simon, Member Mr Ho Kin San, Member(3) Ms Koh Choon Fah, Member Mr Tan Siew Peng (Darren), Member(4) • • • • • Establish a formal and transparent process for appointment and reappointment of Directors Develop a process for evaluation of the performance and annual assessment of the effectiveness of the Board as a whole and each of its Board Committees, and individual Directors Review succession plans Assist the Board in establishing a formal and transparent process for developing policies on Director and executive remuneration, and for fixing the remuneration packages of individual Directors and Key Management Personnel Review and recommend to the Board a general framework of remuneration for the Board and Key Management Personnel and specific remuneration packages for each Director and Key Management Personnel Notes: (1) Unless otherwise stated, the information provided herein is as at 30 September 2023. (2) Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and NRC on 1 November 2023. (3) Mr Ho Kin San was appointed as a non-executive and independent Director and a member of the ARCC and the NRC with effect from 18 July 2023. (4) Mr Tan Siew Peng (Darren) was appointed as a non-executive and independent Director and a member of the ARCC and the NRC with effect from 26 September 2023. As at 30 September 2023, all the members of the NRC are non-executive and the majority of whom, including the chairman of the NRC, are independent. The NRC is guided by written Terms of Reference approved by the Board which set out the duties and responsibilities of the NRC. The NRC’s responsibilities, in relation to its functions as a nominating committee, include reviewing the structure, size and composition and independence of the Board and its Board Committees, reviewing and making recommendations to the Board on the succession plans for Directors, the Chairman and Key Management Personnel, making recommendations to the Board on all appointments and re-appointments of Directors (including alternate Directors, if any), and determining the independence of Directors. The NRC also proposes for the Board’s approval, the objective performance criteria and process for the evaluation of the effectiveness of the Board, the Board Committees and each Director, and ensures that proper disclosures of such process are made. The NRC is also responsible for reviewing and making recommendations to the Board on training and professional development programmes for the Board and the Directors. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 145 Further information on the main activities of the NRC, in relation to its functions as a nominating committee, are outlined in the following sections: • • • • “Training and Development of Directors” on page 148 “Board Composition” on pages 149 to 150 “Directors’ Independence” on pages 153 to 158 “Board Performance Evaluation” on pages 159 to 160 The NRC’s responsibilities, in reviewing remuneration matters, include: (i) reviewing and recommending to the Board, a framework of remuneration for the Board and Key Management Personnel, and (ii) ensuring that the remuneration of executive Directors (if any) shall not be linked in any way to FCT’s gross revenue. On an annual basis, the NRC also reviews and recommends, for the Board’s approval, the Manager’s remuneration and benefits policies and practices (including long-term incentive schemes), and the performance and specific remuneration packages for each Director and Key Management Personnel, in accordance with the approved remuneration policies and processes. The NRC also proposes, for the Board’s approval, criteria to assist in the evaluation of the performance of Key Management Personnel, and (where applicable) reviews the obligations of the Manager arising in the event of the termination of the service agreements of Key Management Personnel to ensure that such contracts of service contain fair and reasonable termination clauses. The NRC also administers and approves awards under the Restricted Unit Plan (“RUP”) and/or other long-term incentive schemes to senior employees of the Manager. In carrying out its review on remuneration matters, the Terms of Reference of the NRC provide that the NRC shall consider all aspects of remuneration, including Directors’ fees, special remuneration to Directors who render special or extra services to the Manager, salaries, allowances, bonuses, options, Unit-based incentives and awards, benefits-in-kind and termination payments, and shall aim to be fair and to avoid rewarding poor performance. If necessary, the NRC can seek expert advice on remuneration within FPL Group’s Human Resource Department or from external sources. Where such advice is obtained from external sources, the NRC ensures that existing relationships, if any, between the Manager and the appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants. Delegation of authority framework As part of the Manager’s internal controls, the Board has adopted a framework of delegated authorisations in its Manual of Authorities (the “MOA”). The MOA, which is approved by the Board, sets out the levels of authorisation required for particular types of transactions to be carried out, and specifies whether Board approval needs to be sought. It also sets out approval limits for operating and capital expenditure, treasury transactions as well as investments, divestments and asset enhancement initiatives. While day-to-day operations of the business are delegated to Management, in order to facilitate the Board’s exercise of its leadership and oversight of FCT, the MOA sets out certain matters specifically reserved for approval by the Board and these are clearly communicated to Management in writing. These include approval of annual budgets, financial plans, material transactions, namely, major acquisitions and divestments, funding and investment proposals and asset enhancement initiatives. Corporate Governance Report 146 Frasers Centrepoint Trust Annual Report 2023 Meetings of the Board and Board Committees The Board meets regularly, at least once every quarter, and also as required by business needs or if their members deem it necessary or appropriate to do so. The following table summarises the number of meetings of the Board and Board Committees and general meetings held and attended by the Directors in the financial year ended 30 September 2023 (“FY2023”): Meetings held in FY2023 Board Meetings Audit, Risk and Compliance Committee Meetings Number of meetings held in FY2023 6 Dr Cheong Choong Kong(2) Mr Ho Chai Seng Mr Ho Chee Hwee Simon Mr Ho Kin San(3) Ms Koh Choon Fah(4) Mr Low Chee Wah(5) Ms Soon Su Lin Mr Tan Siew Peng (Darren)(6) Notes: (1) (C) refers to Chairman or Chairperson. 6/6(C)(1) 6/6 6/6 1/1 6/6 6/6 6/6 —* 4 4/4 4/4 4/4 1/1 4/4(C)(1) N.A. N.A. —* Nominating and Remuneration Committee Meetings Annual General Meeting 3 1 3/3 3/3(C)(1) 3/3 1/1 3/3 N.A. N.A. —* 1/1(C)(1) 1/1 1/1 —* 1/1 1/1 1/1 —* (2) Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and the NRC with effect from 1 November 2023. (3) Mr Ho Kin San was appointed as a non-executive and independent Director and a member of the ARCC and the NRC with effect from 18 July 2023. (4) Ms Koh Choon Fah was appointed as the Chairperson of the Board with effect from 1 November 2023. With effect from 1 November 2023, Ms Koh relinquished her role as the Chairperson of the ARCC. She remains a member of the ARCC and NRC. (5) Mr Low Chee Wah will retire as a Director with effect from 1 January 2024. (6) Mr Tan Siew Peng (Darren) was appointed as a non-executive and independent Director and a member of the ARCC and the NRC with effect from 26 September 2023. With effect from 1 November 2023, he was appointed as the Chairman of the ARCC. * No meeting(s) held during the period of appointment in FY2023. A calendar of activities is scheduled for the Board a year in advance. The Manager’s Constitution provides for Board members who are unable to attend physical meetings to participate through telephone conference, video conference or similar communications equipment. Management provides the Directors with Board papers setting out complete, adequate and relevant information on the agenda items to be discussed at Board and Board Committee meetings around a week in advance of the meeting (save in cases of urgency). This is to give Directors sufficient time to prepare for the meeting and review and consider the matters being tabled so that discussions can be more meaningful and productive and Directors have the necessary information to make sound and informed decisions. Senior members of the Management attend Board meetings, and where necessary, Board Committee meetings, to brief and make presentations to the Directors, provide input and insight into matters being discussed, and respond to queries and take any follow-up instructions from the Directors. If required, time is set aside after scheduled Board meetings for discussions amongst the Board without the presence of Management. Where required by the Directors, external advisers may also be present or available whether at Board and Board Committee meetings or otherwise, and (if necessary), at the Manager’s expense where applicable, to brief the Directors and provide their advice. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 147 Matters discussed by Board and Board Committees in FY2023 BOARD Strategy • • Business and Operations Update Sustainability, Environmental, • Social & Governance Financial Performance • • Governance • Cyber Security and Threats Feedback from Board Committees • • Acquisitions and Divestments Proposals • Technology Risk Management • Asset Enhancement Initiatives Audit, Risk and Compliance Committee Nominating and Remuneration Committee External and Internal Audit • Financial Reporting • Treasury, Debt and Capital Management • • Internal Controls and Risk Management • Related/Interested Person Transactions • Conflicts of Interests • • • Compliance with Legislation and Regulations • Technology Risk Management Sustainability, Environmental, Social & Governance Tax Updates and Planning • Board Composition and Renewal • Board Diversity Policy • Board, Board Committees and Director Evaluations • • Remuneration Policies and Framework • Training and Development Succession Planning Board Oversight Outside of Board and Board Committee meetings, Management provides Directors with complete and adequate reports on major operational matters, business development activities, financial performance, potential investment opportunities and budgets periodically, as well as such other relevant information on an ongoing and timely basis to enable them to discharge their duties and responsibilities properly. In respect of budgets, any material variance between the projections and actual results will be disclosed and explained in the relevant periodic report. Directors have separate and independent access to Management, and are entitled to request for such additional information as needed to make informed decisions and to fulfil their duties and responsibilities properly, which additional information will then be provided by Management in a timely manner. Where required or requested by Directors, site visits are also arranged for Directors to have an intimate understanding of the key business operations of each division and to promote active engagement with Management. Directors are provided with complete, adequate and timely information to enable them to ensure that they prepare adequately for Board and Board Committee meetings and make informed decisions, and Directors (including those who hold multiple board representations and other principal commitments) devote sufficient time and attention to the affairs of FCT and the Manager. At Board and Board Committee meetings, the Directors attend and actively participate, discuss, deliberate and appraise matters requiring their attention and decision. Where necessary for the proper discharge of their duties, the Directors may seek and obtain independent professional advice at the Manager’s expense. In addition to the scheduled Board meetings, Management also provides regular updates on the financial performance, investment and asset management and investor relations matters of FCT to the Chairman and ARCC Chairperson during monthly meetings. Corporate Governance Report 148 Frasers Centrepoint Trust Annual Report 2023 The Company Secretary The Board is supported by the Company Secretary of the Manager (the “Company Secretary”), who is legally trained and familiar with company secretarial practices, and responsible for administering and executing Board and Board Committee procedures in compliance with the Companies Act 1967 of Singapore, the Manager’s Constitution, the Trust Deed and applicable law. The Company Secretary also provides advice and guidance on relevant guidelines, notices, rules and regulations, including disclosure requirements under the SFA, applicable MAS guidelines and notices, the CIS Code and the SGX-ST Listing Manual, as well as corporate governance practices and processes. The Company Secretary attends all Board and Board Committee meetings and drafts and reviews the minutes of proceedings thereof, and facilitates and acts as a channel of communication for the smooth flow of information to and within the Board and its various Board Committees, as well as between and with senior Management. The Directors have separate and independent access to the Company Secretary, whose responsibilities include supporting and advising the Board on corporate and administrative matters. The Company Secretary solicits and consolidates Directors’ feedback and evaluation, facilitates induction and orientation programmes for new Directors, and assists with Directors’ professional development matters. The Company Secretary also acts as the Manager’s primary channel of communication with the SGX-ST. The appointment and removal of the Company Secretary is subject to the approval of the Board. Training and Development of Directors The NRC is tasked with identifying and developing training programmes for the Board and Board Committees for the Board’s approval and ensuring that Directors have the opportunity to develop their skills and knowledge. Upon appointment, each new Director is issued a formal letter of appointment setting out his or her roles, duties, responsibilities and obligations, including his or her responsibilities as fiduciaries and on the policies relating to conflicts of interest, as well as the expectations of the Manager. An induction and orientation programme is also conducted to provide new appointees with information on the business activities, strategic direction, policies and corporate governance practices of the Manager, as well as their statutory and other duties and responsibilities as Directors. A new Director who has no prior experience as a director of an issuer listed on the SGX-ST must also undergo mandatory training in his or her roles and responsibilities as prescribed by the SGX-ST (including training on sustainability matters), unless the NRC is of the view that training is not required because he or she has other relevant experience, in which case the basis of its assessment will be disclosed. The Directors are kept continually and regularly updated on FCT’s business and the regulatory and industry specific environments in which the entities of the Group operate. 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 and such updates may be in writing, by way of briefings held by the Manager’s lawyers, external advisors and external auditors or disseminated by way of presentations and/or handouts. During FY2023, the Directors attended briefings and training programmes on, among others, (i) climate-related financial disclosure; (ii) Workplace Safety and Health legislation and industry update; (iii) updates on MAS Guidelines on Business Continuity Management; and (iv) changes to SGX-ST Listing Manual and recommendations on adoption of the International Sustainability Standards Board reporting standards. To ensure the Directors have the opportunities to develop their skills and knowledge and to continually improve the performance of the Board, all Directors are encouraged to undergo continual professional development during the term of their appointment, and provided with opportunities to develop and maintain their skills and knowledge at the Manager’s expense. The Manager maintains a training record to track Directors’ attendance at training and professional development courses. Directors are encouraged to be members of the Singapore Institute of Directors (“SID”) and for them to receive updates and training from SID to stay abreast of relevant developments in financial, legal and regulatory requirements, and relevant business trends. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 149 BOARD COMPOSITION The following table shows the composition of the Board and the various Board Committees(1): Dr Cheong Choong Kong(2) Mr Ho Chai Seng Mr Ho Chee Hwee Simon Mr Ho Kin San(3) Ms Koh Choon Fah(4) Mr Low Chee Wah(5) Ms Soon Su Lin Mr Tan Siew Peng (Darren)(6) Notes: Chairman, Non-Executive (Independent) Director Non-Executive (Independent) Director Non-Executive (Non-Independent) Director Non-Executive (Independent) Director Non-Executive (Independent) Director Non-Executive (Non-Independent) Director Non-Executive (Non-Independent) Director Non-Executive (Independent) Director Audit, Risk and Compliance Committee ● ● ● ● ● (Chairperson) ● Nominating and Remuneration Committee ● ● (Chairman) ● ● ● ● (1) Unless otherwise stated, the information provided herein is as of 30 September 2023. (2) Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and the NRC with effect from 1 November 2023. (3) Mr Ho Kin San was appointed as a non-executive and independent Director and a member of the ARCC and the NRC with effect from 18 July 2023. (4) Ms Koh Choon Fah was appointed as the Chairperson of the Board with effect from 1 November 2023. With effect from 1 November 2023, Ms Koh relinquished her role as Chairperson of the ARCC. She remains a member of the ARCC and the NRC. (5) Mr Low Chee Wah will retire as a Director with effect from 1 January 2024. (6) Mr Tan Siew Peng (Darren) was appointed as a non-executive and independent Director and a member of the ARCC and the NRC with effect from 26 September 2023. With effect from 1 November 2023, he was appointed as the Chairman of the ARCC. Profiles of each of the Directors can be found on pages 16 to 19. As at 30 September 2023, all of the Directors are non-executive and the Board comprises a majority of independent Directors. No alternate directors have been appointed on the Board for FY2023. Alternate directors will only be appointed in exceptional circumstances. As the Chairman, Dr Cheong Choong Kong, is a non-executive independent Director, no lead independent director has been appointed for FY2023. Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and the NRC with effect from 1 November 2023 and Ms Koh Choon Fah was appointed as the Chairperson of the Board with effect from 1 November 2023. As Ms Koh Choon Fah is a non-executive independent Director, no lead independent director will be appointed for the financial year ending 30 September 2024. The NRC reviews, on an annual basis, the structure, size and composition of the Board and Board Committees, taking into account the CG Code and the Securities and Futures (Licensing and Conduct of Business) Regulations (“SFLCB Regulations”). The NRC has assessed that the current structure, size and composition of the Board and Board Committees are appropriate for the scope and nature of FCT’s and the Manager’s operations. No individual or group dominates the Board’s decision-making process or has unfettered powers of decision-making. The NRC is of the opinion that the Directors with their diverse backgrounds and competencies (including real estate experience / knowledge, business management, strategy development, investments / mergers and acquisitions (including fund management and/or investment banking), audit / accounting and finance, risk management, legal / corporate governance, sustainability and human resource management) provide the appropriate balance and mix of skills, knowledge, experience and other aspects of diversity that avoids groupthink and fosters constructive debate and ensures the effectiveness of the Board and its Board Committees. The Board concurs with the views of the NRC. Where Directors step down from the Board, cessation announcements providing detailed reason(s) for the cessation are released on SGXNet in compliance with the requirements of the SGX-ST Listing Manual. Corporate Governance Report 150 Frasers Centrepoint Trust Annual Report 2023 Board Composition in terms of Age Group, Independence, Tenure and Gender (as at 30 September 2023) Age Group Independence Gender 51-65 years old 66-80 years old 87.5% 12.5% Non-Executive and Non-Independent Directors Non-Executive and Independent Directors 37.5% 62.5% Male Female 75.0% 25.0% 7.37 6.25 6.64 4.00 3.74 average tenure: 3.73 years 0.20 0.01 1.58 Cheong Choong Kong Ho Chai Seng Koh Choon Fah Ho Kin San Tan Siew Peng (Darren) Low Chee Wah Ho Chee Hwee Simon Soon Su Lin Non-Executive and Independent Directors | Non-Executive and Non-Independent Directors Selection, Appointment and Re-appointment of Directors Under the Terms of Reference of the NRC, the NRC is tasked with making recommendations to the Board on all Board appointments and re-appointments, taking into account, among other things, the scope and nature of the operations of the Group, the requirements of the business, whether Directors who have multiple board representations are able to carry out and have been carrying out their duties as Directors and whether the Directors have given sufficient time and attention to the affairs of FCT and the Manager. The process for the selection, appointment and re-appointment of Directors also takes into account the composition and progressive renewal of the Board and Board Committees. Additionally, as part of the NRC’s review of the composition, and performance evaluation, of the Board and Board Committees (which are done at least annually), the NRC will consider the competencies, commitment, contribution and performance (e.g. attendance, preparedness, participation and candour) of the Directors (including Directors who are to be recommended for re-appointment). In the case of a potential new Director, the NRC will consider the candidate’s experience, education, expertise, judgement, skillset, personal qualities and general and sector specific knowledge in relation to the needs of the Board as well as whether the candidates will add diversity to the Board and whether they are likely to have adequate time to discharge their duties, including attendance at all Board meetings. The NRC will also take into consideration whether a candidate had previously served on the boards of companies with adverse track records or a history of irregularities, and assess whether such past appointments would affect his/ her ability to act as a Director of the Manager. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 151 The NRC considers a range of different channels to source and screen both internal and external candidates for Board appointments, depending on the requirements, including tapping on existing networks of contacts and recommendations. External consultants may be retained from time to time, where appropriate, to assist in sourcing, assessing and selecting a broader range of potential internal and external candidates beyond the Board’s existing network of contacts. Suitable candidates are carefully evaluated by the NRC so that recommendations made on proposed candidates are objective and well supported. On an annual basis, the NRC reviews (a) the directorships and principal commitments of each Director, and (b) a framework for Board evaluation to be conducted by an external consultant on the effectiveness of the Board. Through the aforementioned Board evaluation exercise, the Directors assess whether Board members effectively manage his or her directorships and have the time and ability to contribute to the Board. Instead of prescribing a maximum number of directorships and/or other principal commitments that each Director may have, the NRC adopts a holistic assessment of each Director’s individual capacity and circumstances to carry out his or her duties, taking into consideration not only the number of other board and other principal commitments held by each Director, but also the nature and complexity of such commitments. The assessment also takes into consideration Directors’ commitment, conduct and contributions (such as meaningful participation, candour and rigorous decision making) at Board meetings, as well as whether the Director’s engagement with Management is adequate and effective. In respect of FY2023, the NRC is of the view that each Director, including Directors who hold multiple board representations, has been able to diligently discharge his or her duties as a Director of the Manager. Further details on the Board evaluation exercise are set out under the section “Board Performance Evaluation” on pages 159 to 160. Directors are not subject to periodic retirement by rotation. Under its Terms of Reference, the NRC is tasked with reviewing the succession plans for Directors, the Chairman and Key Management Personnel. Board Diversity Policy, Targets, Timelines and Progress The NRC is responsible for: (a) the Board Diversity Policy which has been adopted by the Board; (b) setting qualitative and measurable quantitative objectives (where appropriate) for achieving board diversity; (c) monitoring and implementing the Board Diversity Policy, and taking the principles of the Board Diversity Policy into consideration when determining the optimal composition of the Board and recommending any proposed changes to the Board; and (d) reviewing the Manager’s progress towards achieving the objectives under the Board Diversity Policy. Upon the NRC’s recommendation, the Board will set certain measurable objectives and specific diversity targets (each a “Target”) in order to achieve an optimal Board composition. These Targets will be reviewed by the NRC annually to ensure their appropriateness. The NRC will endeavour to ensure that the Targets are taken into consideration when assessing the suitability of candidates for new Board appointments, and together with the Board, will work towards meeting the Targets as set by the Board. The Board will strive to ensure, with a view to meeting the Targets, that: (a) (b) any brief to external search consultants for potential appointments to the Board will include a requirement to fulfil one or more Targets; and candidates fulfilling one or more of the Target(s) are included for consideration by the NRC whenever it seeks to identify a new Director for appointment to the Board. The Manager embraces diversity and the Board Diversity Policy addresses various aspects of diversity such as gender, skills and expertise and age. Corporate Governance Report 152 Frasers Centrepoint Trust Annual Report 2023 The Board composition reflects the Manager’s commitment to Board diversity, especially in terms of gender, skills and expertise and age. The Manager’s diversity Targets for the Board, its plans and timelines for achieving the Targets, and its progress towards achieving the Targets, are described below. Target Progress and plans towards achieving Target 1. Gender representation Maintain at least 25% female representation on the Board. As at 30 September 2023, female representation on the Board is 25% and therefore this target is met. 2. Skills and Expertise The Board to comprise Directors who, as a group, possess a variety of qualifications and competencies, including skillsets, expertise and/or experience in at least a majority of the identified core competencies of: As at 30 September 2023, this target is met. In FY2023, the following directors were appointed to the Board: (i) real estate industry experience/knowledge; (ii) business management; (iii) strategy development; (iv) investments/mergers and acquisitions (including fund management and/or investment banking); (v) audit/accounting and finance; (vi) risk management; (vii) legal/corporate governance; (viii) digital and technology (including AI); (ix) sustainability; and (x) human resource management. (i) (ii) Mr Ho Kin San was appointed as a non-executive and independent director on 18 July 2023. He is currently a partner and Co-Head of the Corporate Real Estate Department of Allen & Gledhill LLP, and has over 30 years of experience in corporate real estate work. Mr Ho’s experience as a corporate real estate lawyer will provide further diversity to the core competencies and skill set of the Board. Mr Tan Siew Peng (Darren) was appointed as a non-executive and independent director on 26 September 2023. He is currently the Chief Investment Officer of Raffles Medical Group Ltd wherein he develops and executes business and investment strategies, and has over 28 years of experience in financial matters (including in the areas of accounting, treasury and capital and asset liability management). Mr Tan’s experience in the development and execution of investment strategies as well as in the aforesaid financial matters will provide further diversity to the core competencies and skill set of the Board. When considering new Directors for appointment to the Board, candidates who have relevant skills, expertise and/or experience which would complement those already on the Board would be prioritised. 3. Age diversity The Board to comprise directors falling within at least two out of three age groups, being (i) 50 and below; (ii) 51 to 60; and (iii) 61 and above. As at 30 September 2023, this target is met. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 153 The Manager’s target is to maintain the above levels of diversity in gender representation, skills and expertise, and age annually. The Board views Board diversity as an essential element for driving value in decision-making and proactively seeks as part of its Board Diversity Policy, to maintain an appropriate balance of expertise, skills and attributes among the Directors. This is reflected in the diversity of gender, skills and expertise and age of the Directors. The Board, taking into account the views of the NRC, considers that diversity of the Board will contribute to the quality of its decision-making process and serve the needs and plans of the Group. In this regard: (a) (b) in relation to gender representation, the Manager believes in achieving an optimum mix of gender representation on the Board to provide different approaches and perspectives. The push for greater gender diversity would also provide the Manager with access to a broader talent pool and improve its capacity for strategic thinking and problem solving; in relation to skills and expertise, the Manager believes that diversity in skills and expertise would support the work of the Board and Board Committees and the needs of the Manager. This benefits the Manager and Management as decisions by, and discussions with, the Board would be enriched by the broad range of views and perspectives and the breadth of experience of the Directors. In addition, this would facilitate the effective oversight of management and the Group’s businesses and would also help shape the Manager’s strategic objectives; and (c) in relation to age diversity, the Manager believes that age diversity would contribute beneficially to the Board’s deliberations and avoid the risk of groupthink, while ensuring the Board’s decisions and/or strategies stay relevant as markets evolve. The current Board composition reflects an appropriate diversity of age, independence, backgrounds and competencies of the Directors. The competencies of the Directors range from real estate industry experience/knowledge, business management, strategy development, investments/mergers and acquisitions (including fund management and/ or investment banking), audit/accounting and finance, risk management, legal/corporate governance and human resource management. As at 30 September 2023, the ages of the Board members range from 52 to 82 years. Directors’ Independence The Directors exercise their judgement independently and objectively in the interests of FCT and the Manager. The NRC determines annually, and as and when circumstances require, if a Director is independent based on the rules, guidelines and/or circumstances on director independence as set out in Rule 210(5)(d) of the SGX-ST Listing Manual, Provision 2.1 of the CG Code and the accompanying Practice Guidance, the MAS Guidelines No. SFA04-G07 “Guidelines to all Holders of a Capital Markets Services Licence for Real Estate Investment Trust Management” dated 1 January 2016 and Regulations 13D to 13H of the SFLCB Regulations (collectively, the “Relevant Regulations”). The NRC provides its views to the Board for the Board’s consideration. Directors are expected to disclose any relationships with the Manager, its related corporations, its substantial shareholders, its officers or the substantial Unitholders of FCT, if any, which may affect their independence, as and when they arise, to the Board. Each of the Independent Directors complete a declaration of independence annually which is then reviewed by the NRC. Based on the declarations of independence of these Directors, and having regard to the rules, guidelines and circumstances set forth in the Relevant Regulations, the NRC and the Board have determined that for FY2023, there are five independent Directors on the Board, namely Dr Cheong Choong Kong, Mr Ho Chai Seng, Mr Ho Kin San, Ms Koh Choon Fah and Mr Tan Siew Peng (Darren). Dr Cheong Choong Kong As at 30 September 2023, Dr Cheong Choong Kong does not hold other directorships. He has confirmed, inter alia, that he: (a) is not connected1 to any substantial shareholder2 of the Manager or substantial Unitholder2 of FCT and does not have any relationship with the Manager, its related corporations, its substantial shareholders, its officers or the substantial Unitholders of FCT which could interfere with the exercise of his independent judgement as a Director; Corporate Governance Report 154 Frasers Centrepoint Trust Annual Report 2023 (b) (c) (i) is not employed by the Manager, any of its related corporations or the Trustee for FY2023 or any of the past three financial years, and (ii) does not have any immediate family member3 who has been employed by the Manager or any of its related corporations, FCT or any of its related corporations or the Trustee, as an executive officer in any of the past three financial years; and in FY2023 or the immediate past financial year, (i) has not, and does not have any immediate family member who, received significant payments4 or material services from the Manager or any of its subsidiaries, FCT or any of its subsidiaries and/or the Trustee and (ii) was not, and does not have any immediate family member who was (A) a substantial shareholder or substantial Unitholder of, or (B) a partner in (with 5% or more stake), or (C) an executive officer of, or (D) a director of, any organisation to or from which the Manager or any of its subsidiaries, FCT or any of its subsidiaries or the Trustee made, or received significant payments5 or material services (other than Directors’ fees). Having considered the declaration of independence and the Relevant Regulations, the NRC has determined that, Dr Cheong Choong Kong is an independent director as at 30 September 2023. Mr Ho Chai Seng As at 30 September 2023, Mr Ho Chai Seng does not hold other directorships. He has confirmed, inter alia, that he: (a) (b) (c) is not connected1 to any substantial shareholder2 of the Manager or substantial Unitholder2 of FCT and does not have any relationship with the Manager, its related corporations, its substantial shareholders, its officers or the substantial Unitholders of FCT which could interfere with the exercise of his independent judgement as a Director; (i) is not employed by the Manager, any of its related corporations or the Trustee for FY2023 or any of the past three financial years, and (ii) does not have any immediate family member3 who has been employed by the Manager or any of its related corporations, FCT or any of its related corporations or the Trustee, as an executive officer in any of the past three financial years; and in FY2023 or the immediate past financial year, (i) has not, and does not have any immediate family member who, received significant payments4 or material services from the Manager or any of its subsidiaries, FCT or any of its subsidiaries and/or the Trustee and (ii) was not, and does not have any immediate family member who was (A) a substantial shareholder or substantial Unitholder of, or (B) a partner in (with 5% or more stake), or (C) an executive officer of, or (D) a director of, any organisation to or from which the Manager or any of its subsidiaries, FCT or any of its subsidiaries or the Trustee made, or received significant payments5 or material services (other than Directors’ fees). Having considered the declaration of independence and the Relevant Regulations, the NRC has determined that Mr Ho Chai Seng is an independent director as at 30 September 2023. Mr Ho Kin San As at 30 September 2023, Mr Ho Kin San is a partner of Allen & Gledhill LLP. He has confirmed, inter alia, that he: (a) (b) is not connected1 to any substantial shareholder2 of the Manager or substantial Unitholder2 of FCT and, save as set out in note (2) on page 157, does not have any relationship with the Manager, its related corporations, its substantial shareholders, its officers or the substantial Unitholders of FCT which could interfere with the exercise of his independent judgement as a Director; (i) is not employed by the Manager, any of its related corporations or the Trustee for FY2023 or any of the past three financial years, and (ii) does not have any immediate family member3 who has been employed by the Manager or any of its related corporations, FCT or any of its related corporations or the Trustee, as an executive officer in any of the past three financial years; and Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 155 (c) in FY2023 or the immediate past financial year, (i) has not, and does not have any immediate family member who, received significant payments4 or material services from the Manager or any of its subsidiaries, FCT or any of its subsidiaries and/or the Trustee and (ii) was not, and does not have any immediate family member who was (A) a substantial shareholder or substantial Unitholder of, or (B) a partner in (with 5% or more stake), or (C) an executive officer of, or (D) a director of, any organisation to or from which the Manager or any of its subsidiaries, FCT or any of its subsidiaries or the Trustee made, or received significant payments5 or material services (other than Directors’ fees). Having considered the declaration of independence and the Relevant Regulations, the NRC has determined that notwithstanding the circumstances set out in note (2) on page 157, Mr Ho Kin San is an independent director as at 30 September 2023. Ms Koh Choon Fah As at 30 September 2023, Ms Koh Choon Fah is a director of the following companies: • • • • Edmund Tie Holdings Pte. Ltd.; New Horizon Holdings Pte. Ltd.; CPG Corporation Pte Ltd; and Maxwell Chambers Pte. Ltd. She has confirmed, inter alia, that she: (a) (b) (c) is not connected1 to any substantial shareholder2 of the Manager or substantial Unitholder2 of FCT and, save as set out in note (3) on page 158, does not have any relationship with the Manager, its related corporations, its substantial shareholders, its officers or the substantial Unitholders of FCT which could interfere with the exercise of her independent judgement as a Director; (i) is not employed by the Manager, any of its related corporations or the Trustee for FY2023 or any of the past three financial years, and (ii) does not have any immediate family member3 who has been employed by the Manager or any of its related corporations, FCT or any of its related corporations or the Trustee, as an executive officer in any of the past three financial years; and in FY2023 or the immediate past financial year, (i) has not, and does not have any immediate family member who, received significant payments4 or material services from the Manager or any of its subsidiaries, FCT or any of its subsidiaries and/or the Trustee and (ii) was not, and does not have any immediate family member who was a substantial shareholder or substantial Unitholder of, or (B) a partner in (with 5% or more stake), or (C) an executive officer of, or (D) a director of, any organisation to or from which the Manager or any of its subsidiaries, FCT or any of its subsidiaries or the Trustee made, or received significant payments5 or material services (other than Directors’ fees). Having considered the declaration of independence and the Relevant Regulations, the NRC had determined that, notwithstanding the circumstances set out in note (3) on page 158, Ms Koh Choon Fah is an independent director as at 30 September 2023. Mr Tan Siew Peng (Darren) As at 30 September 2023, Mr Tan Siew Peng (Darren) is a director of Inland Revenue Authority of Singapore, Tax Academy of Singapore and the Singapore Management University, School of Accountancy Advisory Board. He has confirmed, inter alia, that he: (a) is not connected1 to any substantial shareholder2 of the Manager or substantial Unitholder2 of FCT and does not have any relationship with the Manager, its related corporations, its substantial shareholders, its officers or the substantial Unitholders of FCT which could interfere with the exercise of his independent judgement as a Director; Corporate Governance Report 156 Frasers Centrepoint Trust Annual Report 2023 (b) (c) (i) is not employed by the Manager, any of its related corporations or the Trustee for FY2023 or any of the past three financial years, and (ii) does not have any immediate family member3 who has been employed by the Manager or any of its related corporations, FCT or any of its related corporations or the Trustee, as an executive officer in any of the past three financial years; and in FY2023 or the immediate past financial year, save as set out in note (6) on page 158, (i) has not, and does not have any immediate family member who, received significant payments4 or material services from the Manager or any of its subsidiaries, FCT or any of its subsidiaries and/or the Trustee and (ii) was not, and does not have any immediate family member who was (A) a substantial shareholder or substantial Unitholder of, or (B) a partner in (with 5% or more stake), or (C) an executive officer of, or (D) a director of, any organisation to or from which the Manager or any of its subsidiaries, FCT or any of its subsidiaries or the Trustee made, or received significant payments5 or material services (other than Directors’ fees). Having considered the declaration of independence and the Relevant Regulations, the NRC has determined that notwithstanding the circumstances set out in note (6) on page 158, Mr Tan Siew Peng (Darren) is an independent director as at 30 September 2023. Notes: (1) A Director is “connected” to a substantial shareholder of the Manager or substantial Unitholder if: (a) in the case where the substantial shareholder or substantial Unitholder is an individual, he/she is: (i) a member of the immediate family of the substantial shareholder or substantial Unitholder; (ii) employed by the substantial shareholder or substantial Unitholder; (iii) a partner of a firm or a limited liability partnership of which the substantial shareholder or substantial Unitholder is also a partner; or (iv) accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder or substantial Unitholder; or (b) in the case where the substantial shareholder or substantial Unitholder is a corporation, he/she is: (i) employed by the substantial shareholder or substantial Unitholder; (ii) employed by a related corporation or associated corporation of the substantial shareholder or substantial Unitholder; (iii) a director of the substantial shareholder or substantial Unitholder; (iv) a director of a related corporation or associated corporation of the substantial shareholder or substantial Unitholder; (v) a partner of a firm or a limited liability partnership of which the substantial shareholder or substantial Unitholder is also a partner; or (vi) accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder or substantial Unitholder. (2) “substantial shareholder” and “substantial Unitholder” refers to a shareholder or Unitholder holding not less than 5% of the total votes or units attached to all voting shares or units in the Manager or FCT, respectively. (3) “immediate family” in relation to an individual, means the individual’s spouse, child, adopted child, step-child, sibling, or parent. (4) As a guide, payments aggregated over any financial year in excess of $50,000 would generally be deemed as significant. The amount and nature of the service, and whether it is provided on a one-off or recurring basis, are relevant in determining whether the service provided is material. (5) As a guide, payments aggregated over any financial year in excess of $200,000 would generally be deemed as significant irrespective of whether they constitute a significant portion of the revenue of the organisation in question. The amount and nature of the service, and whether it is provided on a one-off or recurring basis, are relevant in determining whether the service provided is material. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 157 The Board has considered the relevant requirements under the SFLCB Regulations and its views in respect of the independence of each Director for FY2023 are as follows: The Director: Dr Cheong Choong Kong Mr Ho Chai Seng Mr Ho Chee Hwee Simon(1) Mr Ho Kin San(2) Ms Koh Choon Fah(3) Mr Low Chee Wah(4) Ms Soon Mr Tan Siew Peng Su Lin(5) (Darren)(6) had been independent from the management of the Manager and FCT during FY2023 had been independent from any business relationship with the Manager and FCT during FY2023 had been independent from every substantial shareholder of the Manager and every substantial Unitholder during FY2023 had not been a substantial shareholder of the Manager or a substantial Unitholder during FY2023 has not served as a director of the Manager for a continuous period of 9 years or longer as at the last day of FY2023 (i) (ii) (iii) (iv) (v) Notes: (1) Mr Ho Chee Hwee Simon was appointed as (a) the vice-chairman of the board of Frasers Hospitality International Pte. Ltd., a subsidiary of FPL; and (b) an advisor to FPL (collectively referred to as the “Prior Appointments”) on 16 July 2018, and receives director’s fees amounting to $75,000 per year and advisor’s fees amounting to $175,000 per year respectively. Mr Ho Chee Hwee Simon was appointed as a director of Frasers Property (Singapore) Pte. Ltd. (“FPS”), a subsidiary of FPL, on 1 November 2019 (the “FPS Appointment”) and in conjunction with the FPS Appointment, Mr Ho Chee Hwee Simon was also appointed as the chairman of the Retail Management Committee of FPL. In connection with the FPS Appointment, Mr Ho Chee Hwee Simon receives director’s fees of $75,000 per year. The total fees that Mr Ho Chee Hwee Simon will be receiving in connection with the Prior Appointments and the FPS Appointment for FY2023 amounts to $325,000. FPL wholly-owns the Manager and is a substantial Unitholder. Pursuant to the SFLCB Regulations, during FY2023, Mr Ho Chee Hwee Simon is deemed to (i) have a business relationship with the Manager and FCT; and (ii) be connected to a substantial shareholder of the Manager and a substantial Unitholder. The Board of the Manager is satisfied that, as at 30 September 2023, Mr Ho Chee Hwee Simon was able to act in the best interests of all Unitholders as a whole. As at 30 September 2023, Mr Ho Chee Hwee Simon was able to act in the best interests of all Unitholders as a whole. (2) Mr Ho Kin San is a partner of Allen & Gledhill LLP (“A&G”). A&G has been appointed by the Manager and/or its related corporations, being other entities within the FPL group (“FPL Group”) in FY2023 and the immediately preceding financial year, to provide legal services (the “A&G Appointments”) and fees have been paid or are payable pursuant to such appointments (“A&G Fees”). These services fall within the categories of business relationships set out in Regulation 13G of the SFLCB Regulations. Pursuant to the SFLCB Regulations, during FY2023, Mr Ho Kin San is deemed to have a business relationship with the Manager and FCT. Nonetheless, taking into consideration that (i) Mr Ho Kin San acts in his professional capacity as a partner of A&G and is subject to professional rules and ethics including those relating to conflicts of interests, (ii) the A&G Appointments have been made on an arm’s length basis following assessment and determination carried out independently by the management teams of the relevant FPL Group entities based on objective criteria, including competence, service level and/or competitiveness of pricing and (iii) the declaration of independence by Mr Ho Kin San, the Board of the Manager is satisfied that the A&G Appointments and the payment of A&G Fees in respect therefor do not affect his continued ability to exercise strong objective judgement and be independent in conduct and character (in particular, in the expression of his views and in his participation in the deliberations and decision-making of the Board and Board Committees of which he is a member), acting in the best interests of all Unitholders as a whole. As a measure by the Manager to mitigate potential conflicts of interest, Mr Ho Kin San will abstain from any decision relating to the engagement of A&G for the provision of services to the Manager or FCT. He will not be involved in (a) any of the services provided by A&G to the Manager or FCT, and (b) any services provided by A&G to other entities in the FPL Group if FCT is the counterparty to the transaction. The Board of the Manager is satisfied that, as at 30 September 2023, Mr Ho Kin San was able to act in the best interests of all Unitholders as a whole. As at 30 September 2023, Mr Ho Kin San was able to act in the best interests of all Unitholders as a whole. Corporate Governance Report 158 Frasers Centrepoint Trust Annual Report 2023 (3) Ms Koh Choon Fah is a director and a shareholder of New Horizon Holdings Pte Ltd (“New Horizon”), holding a 20% shareholding interest in New Horizon. New Horizon holds 28.68% of Edmund Tie Holdings Pte. Ltd., which in turn holds 100% of Edmund Tie & Company (SEA) Pte. Ltd. (“ETCSEA”). Ms Koh thereby has an approximately 5.736% effective shareholding interest in ETCSEA. Ms Koh was the executive director and chief executive officer of ETCSEA (the “ETCSEA Appointments”) until 31 March 2021 and 30 June 2021 respectively. ETCSEA has been appointed by related corporations of the Manager, being other entities within the FPL Group in FY2023 and the immediately preceding financial year, to provide real estate related services, and received fees therefor (the “ETCSEA Fees”). These services fall within the categories of business relationships set out in Regulation 13G of the SFLCB Regulations. Pursuant to the SFLCB Regulations, during FY2023, Ms Koh Choon Fah is deemed to have a business relationship with the Manager and FCT. Nonetheless, taking into consideration that (i) the fees paid previously to ETCSEA have been made on an arm’s length basis following assessment and determination carried out independently by the management teams of the relevant FPL Group entities based on objective criteria, including competence, service level and/or competitiveness of pricing and (ii) the declaration of independence by Ms Koh Choon Fah, the Board of the Manager is satisfied that the appointment of ETCSEA by entities of the FPL Group and the payment of ETCSEA Fees in respect therefor do not affect her continued ability to exercise strong objective judgement and be independent in conduct and character (in particular, in the expression of her views and in her participation in the deliberations and decision-making of the Board and Board Committees of which she is a member), acting in the best interests of all Unitholders as a whole. As a measure by the Manager to mitigate potential conflicts of interest, FCT will not consider ETCSEA for the provision of valuation services for any acquisition or disposal of retail assets by FCT or for any existing assets of FCT. For all other services, if ETCSEA is assessed and determined to be the most suitable based on objective criteria, including competence, service level and/or competitiveness of pricing, and FCT is considering engaging ETCSEA, Ms Koh Choon Fah will abstain from voting on any proposal for such engagement. Further, following the cessation of the ETCSEA Appointments, even though Ms Koh continues to have an approximately 5.736% effective shareholding interest in ETCSEA, she is no longer involved in the running of the business of, or the provision of services by, ETCSEA. The Board of the Manager is satisfied that, as at 30 September 2023, Ms Koh Choon Fah was able to act in the best interests of all Unitholders as a whole. As at 30 September 2023, Ms Koh Choon Fah was able to act in the best interests of all Unitholders as a whole. (4) Mr Low Chee Wah is currently employed by a related corporation of the Manager and is a director of various subsidiaries/associated companies of FPL, which have entered into intra-group transactions with the Manager and FCT and received fees therefor. FPL wholly owns the Manager and is a substantial Unitholder. As such, during FY2023, he is deemed (i) to have a management relationship with the Manager and FCT; (ii) to have a business relationship with the Manager and FCT; and (iii) connected to a substantial shareholder of the Manager and substantial Unitholder. The Board of the Manager is satisfied that, as at 30 September 2023, Mr Low Chee Wah was able to act in the best interests of all Unitholders as a whole. As at 30 September 2023, Mr Low Chee Wah was able to act in the best interests of all Unitholders as a whole. (5) Ms Soon Su Lin is currently employed by a related corporation of the Manager and is a director of various subsidiaries/associated companies of FPL, which have entered into intra-group transactions with the Manager and FCT and received fees therefor. FPL wholly owns the Manager and is a substantial Unitholder. As such, during FY2023, she is deemed (i) to have a management relationship with the Manager and FCT; (ii) to have a business relationship with the Manager and FCT; and (iii) connected to a substantial shareholder of the Manager and substantial Unitholder. The Board of the Manager is satisfied that, as at 30 September 2023, Ms Soon Su Lin was able to act in the best interests of all Unitholders as a whole. As at 30 September 2023, Ms Soon Su Lin was able to act in the best interests of all Unitholders as a whole. (6) Mr Tan Siew Peng (Darren) is currently employed as the Chief Investment Officer of Raffles Medical Group Ltd. (“RMG”). RMG currently leases and may potentially lease premises in properties owned by the Group and in properties owned or managed by related corporations of the Manager, being other entities of the FPL Group, in FY2023 and the immediately preceding financial year, and rental (and/or other similar fees) (“RMG Payments”) have been paid or are payable pursuant to such leases (“RMG Leases”). These leasing arrangements fall within the categories of business relationships set out in Regulation 13G of the SFLCB Regulations. Pursuant to the SFLCB Regulations, during FY2023, Mr Tan Siew Peng (Darren) is deemed to have a business relationship with the Manager and FCT. Nonetheless, taking into consideration that (i) the RMG Leases are made on an arm’s-length basis following assessment and determination carried out independently by the relevant property manager and the asset management teams of the Manager and/or the relevant FPL Group entities based on objective criteria, including tenant trade mix, rental rates and/or lease tenure, (ii) Mr Tan Siew Peng (Darren) has confirmed that his role as the Chief Investment Officer of RMG does not require him to be involved in matters relating to RMG’s leasing of premises, in any RMG Leases and (iii) the declaration of independence by Mr Tan Siew Peng (Darren), the Board of the Manager is satisfied that the RMG Leases and the RMG Payments do not affect his continued ability to exercise strong objective judgement and be independent in conduct and character (in particular, in the expression of his views and in his participation in the deliberations and decision-making of the Board and Board Committees of which he is a member), acting in the best interests of all Unitholders as a whole. As a measure by the Manager to mitigate potential conflicts of interest, in the event RMG leases or proposes to lease premises in properties owned by FCT and/or in properties owned or managed by related corporations of the Manager, being other entities of the FPL Group, Mr Tan Siew Peng (Darren) will abstain on any decision relating any such leases. The Board of the Manager is satisfied that, as at 30 September 2023, Mr Tan Siew Peng (Darren) was able to act in the best interests of all Unitholders as a whole. As at 30 September 2023, Mr Tan Siew Peng (Darren) was able to act in the best interests of all Unitholders as a whole. The independent Directors lead the way in upholding good corporate governance at the Board level and their presence facilitates the exercise of objective independent judgement on corporate affairs. Their participation and input also ensure that key issues and strategies are critically reviewed, constructively challenged, fully discussed and thoroughly examined, taking into account the long-term interests of FCT and its Unitholders. As of 30 September 2023, none of the independent Directors have served on the Board for a continuous period of nine years or longer. Board renewal is a continuing process where the appropriate composition of the Board is continually under review. In this regard, the tenure of each independent Director is monitored so that the process for board renewal is commenced ahead of any independent Director reaching the nine-year mark to facilitate a smooth transition and to ensure that the Board continues to have an appropriate balance of independence. To this end, the NRC is tasked with undertaking the process of reviewing, considering and recommending any changes to the composition of the Board, where appropriate, taking into account the requirements to be met by independent Directors including the SFLCB Regulations. As the majority of the Board comprises independent Directors, the Manager will not be subjecting any appointment or re-appointment of Directors to voting by Unitholders under Regulation 13D of the SFLCB Regulations. The Chairman is presently an independent Director. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 159 Changes to the Board and Board Committees after 30 September 2023 In line with the Company’s plans for Board refreshment and renewal, the following changes to the Board and Board Committees took place, or will take place, after 30 September 2023: (a) Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and the NRC with effect from 1 November 2023; (b) Ms Koh Choon Fah was appointed as the Chairperson of the Board with effect from 1 November 2023. With effect from 1 November 2023, Ms Koh relinquished her role as the Chairperson of the ARCC. She remains a member of the ARCC and NRC; (c) Mr Low Chee Wah will retire as a Director with effect from 1 January 2024; and (d) Mr Tan Siew Peng (Darren) was appointed as the Chairman of the ARCC with effect from 1 November 2023. Conflict of Interest The Board has in place clear procedures for dealing with conflicts of interest. To address and manage possible conflicts of interest (including in relation to Directors, officers and employees) that may arise in managing FCT, the Manager has put in place procedures which, among other things, specify that: (a) the Manager shall be dedicated to the management of FCT and will not directly or indirectly manage other REITs; (b) all executive officers of the Manager will be employed by the Manager; (c) 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; (d) at least one-third of the Board shall comprise independent Directors; (e) on matters where FPL and/or its subsidiaries have an interest (directly or indirectly), Directors nominated by FPL and/or its subsidiaries shall abstain from voting. On such matters, the quorum must comprise a majority of independent Directors and must exclude nominee Directors of FPL and/ or its subsidiaries; and (f) an interested Director is required to disclose his/her interest in any proposed transaction with FCT, to recuse himself or herself from meetings and/or discussions (or relevant segments thereof), and is required to abstain from voting on resolutions approving the transaction. The Manager does not have a practice of extending loans to Directors, and as at 30 September 2023, there were no loans granted by the Manager to Directors. If there are such loans, the Manager will comply with its obligations under the Companies Act 1967 of Singapore in relation to loans, quasi-loans, credit transactions and related arrangements to Directors. Board Performance Evaluation The NRC is tasked with making recommendations to the Board on the process and objective performance criteria for evaluation of the performance of the Board as a whole, the Board Committees and the individual Directors. The Board, with the recommendation of the NRC, has approved the objective performance criteria and implemented a formal process for assessing the effectiveness of the Board as a whole and its Board Committees separately, and the contribution by the Chairman and each individual Director to the effectiveness of the Board, on an annual basis. The objective performance criteria are not typically changed from year to year. In relation to the financial year ended 30 September 2022 (“FY2022”), the outcome of the evaluation was generally affirmative across the evaluation categories. Based on the NRC’s review, the Board and the various Board Committees operate effectively and each Director is contributing to the overall effectiveness of the Board. For FY2023, an independent external consultant, Aon Solutions Singapore Pte. Ltd., has been appointed to facilitate the process of conducting a Board evaluation survey. The external consultant has no connection with the Manager or FCT or any of the Directors. Each Director is required to complete a Board evaluation questionnaire, a Board Committee evaluation questionnaire and an individual Director self-evaluation questionnaire (the “Questionnaires”). The Questionnaires have been designed to provide an evaluation of the current effectiveness of the Board and to support the Chairman and the Board in proactively considering what can enhance the readiness of the Board to address emerging strategic priorities for FCT as a whole. The external consultant will facilitate the sending of questionnaires to all Directors, and one-to-one interviews are conducted selectively on a rotational basis, to obtain Directors’ feedback. Corporate Governance Report 160 Frasers Centrepoint Trust Annual Report 2023 The objective performance criteria covered in the Board evaluation exercise relate to the following key segments: (1) Board composition (balance of skills, experience, independence, knowledge of the company, and diversity); (2) management of information flow; (3) Board processes (including Board practices and conduct); (4) Board’s consideration of ESG aspects; (5) Board strategy and priorities; (6) Board’s value-add to, and management of the performance of the Manager and FCT; (7) development and succession planning of executives; (8) development and training of Directors; (9) oversight of risk management and internal controls; and (10) the effectiveness of the Board Committees. The individual Director self-evaluation questionnaire aims to assess whether each Director is willing and able to constructively challenge and contribute effectively to the Board, and demonstrate commitment to his or her roles on the Board and Board Committees (if any). The responses to the Questionnaires and interview(s), if any for that particular financial year, are summarised by the external consultant and its report submitted to the NRC. To provide a greater level of objectivity in the evaluation process, the report also includes peer comparisons and third-party benchmarking of the results to the evaluation. Findings and recommendations of the external consultant which include feedback from Directors would be taken into consideration and any necessary follow-up actions would be undertaken with a view to improving the overall effectiveness of the Board in fulfilling its role and meeting its responsibilities to Unitholders. The Chairman will, where necessary, provide feedback to the Directors with a view to improving Board performance and, where appropriate, propose changes to the composition of the Board. REMUNERATION MATTERS The remuneration of the staff of the Manager and Directors’ fees are paid by the Manager from the management fees it receives from FCT, and not by FCT. With the recommendations of the NRC, the Board has put in place a formal and transparent procedure for developing policies on remuneration of Directors and Key Management Personnel and for reviewing and approving the remuneration packages of individual Directors and Key Management Personnel. Compensation Philosophy The Manager seeks to incentivise and reward consistent and sustained performance through market competitive, internally equitable and performance-orientated compensation programmes which are aligned with Unitholders’ interests. This compensation philosophy is the foundation of the Manager’s remuneration framework and seeks to (a) align the aspirations and interests of its employees with the interests of FCT and its Unitholders, resulting in the sharing of rewards for both employees and Unitholders on a sustained basis and (b) attract, retain and motivate employees. The Manager aims to connect employees’ desire to develop and fulfil their aspirations with the growth opportunities afforded by the Manager’s strategic vision and corporate initiatives. Compensation Principles All compensation programme design, determination and administration are guided by the following principles: (a) Pay-for-Performance The Manager’s Pay-for-Performance principle encourages excellence, in a manner consistent with the Manager’s core values. The Manager takes a total compensation approach, which recognises the value and responsibility of each role, and differentiates and rewards performance through its incentive plans. (b) Unitholder Returns Performance measures for incentives are established to drive initiatives and activities that are aligned with both short-term value creation and long-term Unitholder wealth creation, thus ensuring a focus on delivering Unitholder returns. (c) Sustainable Performance The Manager believes sustained success depends on the balanced pursuit and consistent achievement of short-term and long-term goals. Hence, variable incentives incorporate a significant pay-at-risk element to align employees with sustainable performance for the Manager. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 161 (d) Market Competitiveness The Manager aims to be market competitive by benchmarking its compensation levels with relevant comparators accordingly. However, the Manager embraces a holistic view of employee engagement that extends beyond monetary rewards. Recognising each individual as unique, the Manager seeks to motivate and develop employees through all the levers available to the Manager through its comprehensive human capital platform, including: (a) culture and engagement building; (b) a holistic benefits and wellbeing framework; (c) leadership development; (d) learning and development; and (e) career advancement through vertical, lateral and diagonal moves within the Group. Engagement of External Consultants The NRC may from time to time, and where necessary or required, engage external consultants in framing the remuneration policy and determining the level and mix of remuneration for Directors and Management. Among other things, this helps the Manager to stay competitive in its remuneration packages. During FY2023, Willis Towers Watson Consulting (Singapore) Pte Ltd and Mercer (Singapore) Ptd Ltd were appointed as the Manager’s remuneration consultants. The remuneration consultants do not have any relationship with FCT, the Manager, its controlling shareholders, its related entities and/or its Directors which would affect their independence and objectivity. Remuneration Framework The NRC reviews and makes recommendations to the Board on the remuneration framework for the independent Directors and other non-executive Directors and the Key Management Personnel. The remuneration framework is endorsed by the Board. The remuneration framework: (a) (b) covers all aspects of remuneration including salaries, allowances, performance bonuses, benefits-in-kind, termination terms and payments, grant of awards of units of FCT (“Units”) and incentives for the Key Management Personnel and fees for the independent Directors and other non-executive Directors. The NRC considers all such aspects of remuneration to ensure they are fair and avoid rewarding poor performance; and is tailored to the specific role and circumstances of each Director and Key Management Personnel, to ensure an appropriate remuneration level and mix that recognises the performance, potential and responsibilities of these individuals, as applicable. Remuneration Policy in respect of Management and other employees The NRC takes into account all aspects of remuneration, including termination terms, to ensure that they are fair. The NRC reviews the level, structure and mix of remuneration and benefits policies and practices (where appropriate) of the Manager and takes into account the strategic objectives of FCT and the Manager to ensure that they are: (a) appropriate and proportionate to the sustained performance and value creation of FCT and the Manager; and (b) designed to attract, retain and motivate the Key Management Personnel to successfully manage FCT and the Manager for the long term. The remuneration framework comprises fixed and variable components, which include short-term and long-term incentives. When conducting its review of the remuneration, the NRC takes into account the performance of FCT and individual performance. The performance of FCT is measured based on pre-set financial and non-financial indicators. Individual performance is measured via the employee’s annual performance review based on indicators such as core values, competencies and key performance indicators. Corporate Governance Report 162 Frasers Centrepoint Trust Annual Report 2023 Fixed Component The fixed component in the Manager’s remuneration framework is structured to remunerate employees for the roles they perform, and is benchmarked against relevant industry market data. It comprises base salary, fixed allowances and applicable statutory contribution. The base salary and fixed allowances for Key Management Personnel are reviewed annually by the NRC and approved by the Board. Variable Component A significant and appropriate proportion of the remuneration of key executives of the Manager comprises a variable component which is structured to link rewards to corporate and individual performance and incentivise sustained performance in both the short and long term. The variable incentives are based on quantitative and qualitative targets, and overall performance will be determined at the end of the year and approved by the NRC. The performance targets are measurable, appropriate and meaningful so that they incentivise the right behaviour in a manner consistent with the Group’s core values. For individuals in control functions, performance targets are principally based on the achievement of the objectives of their functions. 1. Short-Term Incentive Plans The short-term incentive plans (“STI Plans”) aim to incentivise short term performance excellence. All Key Management Personnel’s performance are assessed through either a balanced scorecard or annual performance review with pre-agreed key performance indicators (“KPIs”). The KPIs consist of: (a) financial KPIs based on the performance of FCT; (b) non-financial KPIs which may include measures on People & Culture, Business Growth, Digitalisation, Data & Innovation and Sustainability or specified projects. The sustainability performance indicator includes areas such as asset and entity level ESG benchmarking, green finance and skills and leadership. At the end of the financial year, the achievements are measured against the pre-agreed targets and the short-term incentives of each Key Management Personnel are determined. The NRC recommends the final short-term incentives that are awarded to Key Management Personnel for the Board’s approval, taking into consideration any other relevant circumstances. 2. Long-Term Incentive Plans The NRC administers the Manager’s long-term incentive plan, namely, the RUP. The RUP was approved by the Board and subsequently adopted by Unitholders on 8 December 2017. Through the RUP, the Manager seeks to foster a greater ownership culture within the Manager by aligning more directly the interests of senior employees (including the CEO) with the interests of Unitholders and other stakeholders, and for such employees to participate and share in FCT’s growth and success, thereby ensuring alignment with sustainable value creation for Unitholders over the long term. The RUP is available to selected senior employees of the Manager. Its objectives are to increase the Manager’s flexibility and effectiveness in attracting, motivating and retaining talented senior employees and in rewarding these employees for the future performance of FCT and the Manager. Under the RUP, the Manager grants Unit-based awards (“Initial Awards”) with pre-determined performance targets being set at the beginning of the performance period. The NRC recommends the Initial Awards granted to Key Management Personnel to the Board for approval, taking into consideration the Key Management Personnel’s individual performance. The performance period for the RUP is one year. The pre-set targets are net property income and distribution per Unit. Such performance conditions are generally performance indicators that are key drivers of business performance, Unitholder value creation and aligned to FCT’s business objectives. The RUP awards represent the right to receive fully paid Units, their equivalent cash value or a combination thereof, free of charge, provided certain prescribed performance conditions are met. The final number of Units to be released (“Final Awards”) will depend on the achievement of the pre-determined targets at the end of the performance period. If such targets are exceeded, more Units than the Initial Awards may be delivered, subject to a maximum multiplier of the Initial Awards. The Final Awards will vest to the participants in three tranches, after the one-year performance period, at or around the 1st, 2nd and 3rd anniversary of the grant date of the Initial Awards. The obligation to deliver the Units is expected to be satisfied out of the Units held by the Manager. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 163 The NRC has discretion to decide on the Final Awards, taking into consideration any other relevant circumstances. Approach to Remuneration of Key Management Personnel The Manager advocates a performance-based remuneration system that is highly flexible and responsive to the market, and that is structured so as to link a significant and appropriate proportion of remuneration to FCT’s performance and that of the individual. In designing the compensation structure, the NRC seeks to ensure that the level and mix of remuneration is competitive, relevant and appropriate in finding a balance between current versus long-term compensation and between cash versus equity incentive compensation. Executives who have a greater ability to influence outcomes within the Manager have a greater proportion of overall reward at risk. The NRC exercises broad discretion and independent judgement in ensuring that the amount and mix of compensation are aligned with interests of Unitholders and other stakeholders and promote the long-term success of FCT, and appropriate to attract, retain and motivate Key Management Personnel to successfully manage FCT for the long term. Performance Indicators for Key Management Personnel As set out above, the Manager’s variable remuneration comprises short-term and long-term incentives, taking into account both FCT’s and individual performance. This is to ensure employee remuneration is linked to performance. In determining the short-term incentives, both FCT’s financial and non-financial performance as per the balanced scorecard are taken into consideration. The performance targets align the interests of the Key Management Personnel with the long-term growth and performance of FCT and the Manager. The financial performance indicators on which the Key Management Personnel are evaluated comprise (a) FCT’s net property income, (b) distribution per Unit, (c) FCT’s price-to-book value (against a peer group), (d) Manager’s profit before interest and tax, and (e) divestment of non-core assets. These performance indicators are quantitative and are objective measures of FCT’s performance. The non-financial performance indicators on which the Key Management Personnel are evaluated include (i) Culture & People, (ii) Business Growth, (iii) Digitalisation, Data & Innovation and (iv) Sustainability. The sustainability performance indicator includes areas such as asset and entity level ESG benchmarking, green finance and skills and leadership. These qualitative performance indicators will align the Key Management Personnel’s performance with FCT’s strategic objectives. In relation to long-term incentives, the Manager has implemented the RUP with effect from the financial year ended 30 September 2018 as set out above. The release of long-term incentive awards to Key Management Personnel are conditional upon the performance targets being met. The performance targets of the KPIs align the interests of the Key Management Personnel with the long-term growth and performance of FCT. In FY2023, the pre-determined target performance levels for the RUP grant were met. Currently, the Manager does not have claw-back provisions which allow it to reclaim incentive components of remuneration from its Key Management Personnel in exceptional circumstances of misstatement of financial results or misconduct resulting in financial loss. The Manager is reviewing the terms of the incentive plans, which includes a review of any claw-back provisions. Remuneration Packages of Key Management Personnel The NRC reviews and makes recommendations on the specific remuneration packages and service terms for the Key Management Personnel for endorsement by the Board, which is ultimately accountable for all remuneration decisions relating to the Key Management Personnel. The NRC will review the short-term and long-term incentives in the Key Management Personnel’s remuneration package to ensure its compliance with the substance and spirit of the directions and guidelines from the MAS. No Director or Key Management Personnel is involved in deciding his or her remuneration. The NRC aligns the CEO’s leadership, through appropriate remuneration and benefit policies, with FCT’s and the Manager’s strategic objectives and key challenges. Performance targets are also set for the CEO and his performance is evaluated yearly. Corporate Governance Report 164 Frasers Centrepoint Trust Annual Report 2023 Remuneration Policy in respect of Non-Executive Directors The remuneration of non-executive Directors has been designed to be appropriate to the level of contribution, taking into account factors such as effort, time spent, and responsibilities, on the Board and Board Committees, and to attract, retain and motivate the Directors to provide good stewardship of FCT to successfully manage FCT for the long term. Non-executive Directors do not receive bonuses, options or Unit-based incentives and awards. Directors’ fees are paid in cash and not in the form of Units. The Manager engages consultants to review Directors’ fees by benchmarking such fees against the amounts paid by listed industry peers. Each non-executive Director’s remuneration comprises a basic fee and attendance fees for attending Board and Board Committee meetings. In addition, non-executive Directors who perform additional services in Board Committees are paid an additional fee for such services. The chairman or chairperson of each Board Committee is also paid a higher fee compared with the members of the respective Board Committees in view of the greater responsibility carried by that office. The Manager’s Board fee structure during FY2023 is set out below. Board – Chairman – Member Audit, Risk and Compliance Committee – Chairman – Member Nominating and Remuneration Committee – Chairman – Member Basic Fee per annum ($) 90,000 45,000 40,000 20,000 12,000 6,000 Attendance Fee per meeting (for attendance in person in Singapore) ($) Attendance Fee per trip (for attendance in person outside Singapore ($) Attendance Fee per meeting (for attendance via tele/video conference) ($) 3,000 1,500 3,000 1,500 3,000 1,500 4,500 4,500 4,500 4,500 4,500 4,500 1,000 1,000 1,000 1,000 1,000 1,000 Disclosure of Remuneration of Directors and Key Executives of the Manager Information on the remuneration of Directors and Key Executives of the Manager for FY2023 is set out below. Directors of the Manager Dr Cheong Choong Kong Mr Ho Chai Seng Mr Ho Chee Hwee Simon Mr Ho Kin San Ms Koh Choon Fah Mr Low Chee Wah(2) Ms Soon Su Lin(3) Mr Tan Siew Peng (Darren) Notes: Remuneration $ 139,000.00 98,500.00 89,500.00(1) 19,005.38 115,500.00 53,500.00 53,500.00 986.11 (1) Excludes $75,000 and $175,000 being payment of director’s fees and advisor’s fees respectively for the Prior Appointments and $75,000 being payment of director’s fees for the FPS Appointment, from FPL Group (excluding the Manager). (2) Director’s fees for Mr Low Chee Wah are paid to Frasers Property Corporate Services Pte. Ltd. (3) Director’s fees for Ms Soon Su Lin are paid to Frasers Property Corporate Services Pte. Ltd. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 165 Remuneration of CEO for FY2023 Between $1,000,001 to $1,250,000 Mr Richard Ng Remuneration of key executives of the Manager(1) (excluding CEO) for FY2023 Ms Tan Loo Ming Audrey Ms Pauline Lim Mr Chen Fung Leng Aggregate Total Remuneration (excluding CEO) Notes: Salary % Bonus % Allowances and Benefits % Long-Term Incentives % Total % 49 24 5 22 100 Salary % Bonus % Allowances and Benefits % Long-Term Incentives % Total % 57(2) 19(2) 5(2) 19(2) 100 $1,486,762 (1) At present, the Manager has three key executives (excluding the CEO). They are the CFO and the division heads of the Manager and they are listed in this table. (2) Derived based on the aggregation of the respective remuneration components of each of the key executives of the Manager (excluding the CEO) and represented as percentages against the total remuneration for these key executives. There are no existing or proposed service agreements entered into or to be entered into by the Manager or any of its subsidiaries with Directors or Key Management Personnel which provide for compensation in the form of stock options, or pension, retirement or other similar benefits, or other benefits, upon termination of employment. Pursuant to the MAS Notice to All Holders of a Capital Markets Services Licence for Real Estate Investment Trust Management (Notice No: SFA4-N14), REIT managers are required to disclose the remuneration of the CEO and each individual Director on a named basis, and the remuneration of at least the top five executive officers (which shall not include the CEO and executive officers who are Directors), on a named basis, in bands of $250,000. The REIT manager may provide an explanation if it does not wish to or is unable to comply with such requirement. The Manager is (a) disclosing the CEO’s remuneration in bands of $250,000 (instead of on a quantum basis), (b) not disclosing exact details of the remuneration of the other Key Executives of the Manager in bands of $250,000 and (c) disclosing the aggregate remuneration of all key executives of the Manager (excluding the CEO), for the following reasons: (i) (ii) (iii) (iv) (v) given the competitive business environment which FCT operates in, the Manager faces significant competition for talent in the REIT management sector and the Manager has not disclosed the exact remuneration of the Key Executives (including the CEO) so as to minimise potential staff movement and undue disruption to its management team which would be prejudicial to the interests of Unitholders; the composition of the current management team has been stable and to ensure the continuity of business and operations of FCT, it is important that the Manager continues to retain its team of competent and committed staff; it is important for the Manager to ensure stability and continuity of its business by retaining a competent and experienced management team and being able to attract talented staff and disclosure of the remuneration of the CEO and the other Key Executives could make it difficult to retain and attract talented staff on a long-term basis; due to the confidentiality and sensitivity of staff remuneration matters, the Manager is of the view that such disclosure could be prejudicial to the interests of Unitholders; and the remuneration of the CEO and the other Key Executives of the Manager are paid by the Manager and there is full disclosure of the total amount of fees paid to the Manager as set out at pages 187, 231 and 259 to 260 of this Annual Report. Corporate Governance Report 166 Frasers Centrepoint Trust Annual Report 2023 While the disclosure of the exact quantum of the remuneration of the CEO and the requisite remuneration band for each of the other Key Executives (who are not also Directors or the CEO) would be in full compliance with Provision 8.1 of the CG Code, taking into account the reasons why such disclosure would be prejudicial to the interests of Unitholders and that the Manager has disclosed the remuneration policies, composition of remuneration, appraisal process and performance metrics which go towards determination of the performance bonus of the CEO and other key executives, the Board has determined that despite the partial deviation from Provision 8.1 of the CG Code, there is sufficient transparency on the Manager’s remuneration policies, level and mix of remuneration, the procedure for setting remuneration and the relationships between remuneration, performance and value creation which are consistent with the intent of Principle 8 of the CG Code. As at 30 September 2023, there are no employees within the Manager who is a substantial Unitholder or who is an immediate family member of a Director, the CEO or a substantial Unitholder. FINANCIAL PERFORMANCE, REPORTING AND AUDIT 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 are made available to the Directors on request. The Manager prepares the financial statements of FCT in accordance with the recommendations of the Statement of Recommended Accounting Practice 7 “Reporting Framework for Investment Funds” issued by the Institute of Singapore Chartered Accountants, the applicable requirements of the CIS Code issued by the MAS, SGX-ST Listing Manual, Singapore Financial Reporting Standards (International), and the provisions of the Trust Deed. The Board releases FCT’s half-yearly and full year financial results. The Manager also provides business updates to Unitholders for the first and third quarter performance of FCT. The Board also provides Unitholders with relevant business updates, other price or trade sensitive information and material corporate developments through announcements to the SGX-ST and FCT’s website. External Audit The ARCC conducts an assessment of the external auditors, and recommends its appointment, re-appointment or removal to the Board. The assessment is based on factors such as the performance and quality of its audit, the cost effectiveness and the independence and objectivity of the external auditors. The ARCC also makes recommendations to the Board on the remuneration and terms of engagement of the external auditors. At the annual general meeting (“AGM”) held on 17 January 2023, KPMG LLP was re-appointed by Unitholders as the external auditors of FCT until the conclusion of the next AGM. Pursuant to the requirements of the SGX-ST, an audit partner may only be in charge of a maximum of five consecutive annual audits and may then return after two years. The KPMG LLP audit partner in charge of the annual audit for the Group for FY2023 is in charge of the annual audit for the third time. During FY2023, the ARCC conducted a review of the scope, quality, results and performance of audit by the external auditors and its cost effectiveness, as well as the independence and objectivity of the external auditors. It also reviewed all non-audit services provided by the external auditors during the financial year, and the aggregate amount of fees paid to them for such services. Details of fees paid or payable to the external auditors in respect of audit and non-audit services for FY2023 are set out in the table below: Fees relating to external auditors for FY2023 For audit and audit-related services For non-audit services Total $’000 311.7 147.8 459.5 Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 167 The ARCC has conducted a review of all non-audit services provided by KPMG LLP during the financial year. The ARCC is satisfied that given the nature and extent of non-audit services provided and the fees for such services, neither the independence nor the objectivity of KPMG LLP is put at risk. KPMG LLP attended the ARCC meetings held every quarter for FY2023, and where appropriate, has met with the ARCC without the presence of Management to discuss their findings, if any. The Manager, on behalf of FCT, confirms that FCT has complied with Rule 712 of the SGX-ST Listing Manual which requires, amongst others, that a suitable auditing firm should be appointed by FCT having regard to certain factors. FCT has also complied with Rule 715 of the SGX-ST Listing Manual which requires that the same auditing firm of FCT based in Singapore audits its Singapore-incorporated subsidiaries and significant associated companies, and that a suitable auditing firm be engaged for its significant foreign-incorporated subsidiaries and associated companies. In the review of the financial statements for FY2023, the ARCC discussed the following key audit matters identified by the external auditors with Management: Key Audit Matters How this issue was addressed by the ARCC Valuation of investment properties The ARCC considered the methodologies and key assumptions applied by the valuers in arriving at the valuation of the properties. The ARCC reviewed the outputs from the financial year-end valuation process of the Group’s investment properties and discussed the details of the valuation with Management, focusing on significant changes in fair value measurements and key drivers of the changes. The ARCC was satisfied with the valuation process, the methodologies used and the valuation for investment properties as adopted as at 30 September 2023. GOVERNANCE OF RISK AND INTERNAL CONTROLS The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls. Enterprise Risk Management and Risk Tolerance The Manager has established a sound system of risk management and internal controls comprising procedures and processes to safeguard FCT’s assets and the interests of FCT and its Unitholders. The ARCC reviews and reports to the Board on the adequacy and effectiveness of such controls, including financial, operational, compliance and information technology controls, and risk management procedures and systems, taking into consideration the recommendations of both internal and external auditors. Internal Controls The ARCC, 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, operational, compliance and information technology controls. In assessing the effectiveness of internal controls, the ARCC ensures primarily that key objectives are met, material assets are properly safeguarded, fraud or errors (if any) 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. The ARCC and the Board have been monitoring the rising interest rates, cost inflation pressures and global geopolitical tensions, which have an impact on FCT’s financials and are working closely with Management on an ongoing basis. The ARCC and the Board are updated by Management regularly on the results of various scenario planning and stress testing to assess and track the possible impact on FCT’s financials. Capital and liquidity management remain priorities for the Manager and FCT. Corporate Governance Report 168 Frasers Centrepoint Trust Annual Report 2023 Risk Management The Board, through the ARCC, reviews the adequacy and effectiveness of the Manager’s risk management framework 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 pages 91 to 94. Periodic updates are provided to the ARCC on FCT’s and the Manager’s risk profiles. These updates would involve an assessment of FCT’s and the Manager’s key risks by risk categories, current status, the effectiveness of any mitigating measures taken, and the action plans undertaken by Management to manage such risks. 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 ARCC. Risk tolerance statements setting out the nature and extent of significant risks which the Manager is willing to take in achieving its strategic objectives and value creation have been formalised and adopted. The Board has received assurance from the CEO and the CFO that as at 30 September 2023: (a) (b) the financial records of FCT have been properly maintained and the financial statements for FY2023 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 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 to address risks which the Manager considers relevant and material to FCT’s operations. Board’s Comment 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 ARCC and assurance from the CEO and the CFO, the Board is of the view that the internal controls in place for FCT were adequate and effective as at 30 September 2023 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 adopted by the Manager, review performed by Management and assurance from the CEO and the CFO, the Board is of the view that the risk management system in place for FCT was adequate and effective as at 30 September 2023 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 FCT will not be adversely affected by any event that could be reasonably foreseen as the Manager works to achieve its business objectives for FCT. 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 judgement in decision-making, human error, losses, fraud or other irregularities. The ARCC concurs with the Board’s view that as at 30 September 2023, the internal controls of FCT (including financial, operational, compliance and information technology controls) and risk management systems in place for FCT were adequate and effective to address risks which the Manager considers relevant and material to FCT’s operations. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 169 Internal Audit The internal audit function of the Manager is performed by FPL Group’s internal audit department (“FPL Group IA”). FPL Group IA is responsible for conducting objective and independent assessments on the adequacy and effectiveness of the Manager’s system of internal controls, risk management and governance practices. The Head of FPL Group IA reports directly to the ARCC and administratively, to FPL’s Group Chief Corporate Officer. The appointment and removal of FPL Group IA as the service provider of the Manager’s internal audit function requires the approval of the ARCC. The ARCC ensures that FPL Group IA complies with the standards set by nationally or internationally recognised professional bodies. In this regard, in performing internal audit services, FPL Group IA has adopted and complies with the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors, Inc. The ARCC is also responsible for ensuring that the internal audit function is adequately resourced and staffed with persons with the relevant qualifications and experience. As at 30 September 2023, FPL Group IA comprised 25 professional staff. The Head of FPL Group IA and the Singapore-based FPL Group IA staff are members of The Institute of Internal Auditors, Singapore. To ensure that the internal audit activities are effectively performed, FPL Group IA recruits suitably qualified audit professionals with the requisite skills and experience. FPL Group IA staff are given relevant training and development opportunities to update their technical knowledge and auditing skills. This includes attending relevant technical workshops and seminars organised by The Institute of Internal Auditors, Singapore and other professional bodies. FPL Group IA operates within the framework of a set of terms of reference as contained in the Internal Audit Charter approved by the ARCC. It adopts a risk-based audit methodology to develop its audit plan, and its activities are aligned with the key strategies of FCT. Risk assessments are carried out on all key business processes, which are used to determine the extent and the frequencies of the reviews to be performed. Higher risk areas are subject to more extensive and frequent reviews. FPL Group IA conducts its reviews based on the internal audit plan approved by the ARCC. FPL Group IA has unfettered access to FCT’s and the Manager’s documents, records, properties and personnel, including the ARCC members, and has appropriate standing with FCT and the Manager. All audit reports detailing audit findings and recommendations are provided to Management, who would respond with the actions to be taken. Each quarter, FPL Group IA submits reports to the ARCC on the status of completion of the audit plan, audit findings noted from reviews performed, and status of Management’s action plans to address such findings, including implementation of the audit recommendations. The ARCC is satisfied that for FY2023, the internal audit function is independent, effective, adequately resourced, and has appropriate standing within FCT and the Manager to perform its functions effectively. Quality assurance reviews on FPL Group’s internal audit function are periodically carried out by qualified professionals from an external organisation. The last review was performed in FY2022. Where required, the ARCC will make recommendations to the Board to ensure that FPL Group IA remains an adequate, effective and independent internal audit function. Related/Interested Person Transactions The Manager has established internal processes such that the Board, with the assistance of the ARCC, is required to be satisfied that all Related/Interested Person Transactions are undertaken on normal commercial terms, and are not 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 Appendix). Directors who are interested in any proposed Related/Interested Person Transaction to be entered into by FCT are required to abstain from any deliberations or decisions in relation to that Related/Interested Person Transaction. All Related/Interested Person Transactions are entered in a register maintained by the Manager. The Manager incorporates into its internal audit plan a review of the Related/Interested Person Transactions recorded in the register to ascertain that internal procedures and requirements of the SGX-ST Listing Manual and Property Funds Appendix have been complied with. The ARCC reviews the internal audit reports at least twice a year to ascertain that the guidelines and procedures established to monitor Related/Interested Person Transactions have been complied with. The review includes the examination of the nature of the Related/Interested Person Transactions and its supporting documents or such other data deemed necessary by the ARCC. In addition, the Trustee also has the right to review any such relevant internal audit reports to ascertain that the Property Funds Appendix has been complied with. Any Related/Interested Person Transaction proposed to be entered into between FCT and an interested person, would require the Trustee to satisfy itself that such Related/Interested Person Transaction is conducted on normal commercial terms, is not prejudicial to the interests of FCT and its Unitholders, and is in accordance with all applicable requirements of the CIS Code and the SGX-ST Listing Manual. Corporate Governance Report 170 Frasers Centrepoint Trust Annual Report 2023 Whistle-Blowing Policy The Manager has put in place a whistle-blowing policy (the “Whistle-Blowing Policy”). The Whistle-Blowing Policy provides an independent feedback channel through which matters of concern about possible improprieties, misconduct or wrongdoing relating to FCT, the Manager and its officers in matters of financial reporting, suspected fraud and corruption or other matters may be raised by employees and any other persons in confidence and in good faith, without fear of reprisal. Whistle-Blowers may report any matters of concern by mail, email or calling a hotline, details of which are provided in the Whistle-Blowing Policy, which is available on FCT’s website. Any report submitted through this channel would be received by the Head of the internal audit function and the Manager has designated FPL Group IA, an independent function, to investigate all whistle-blowing reports made in good faith. The Manager is committed to ensuring that whistle-blowers will be treated fairly, and protected from reprisals, victimisation or any otherwise detrimental or unfair treatment for whistle-blowing in good faith. The Manager will treat all information received confidentially and protect the identity of all whistle-blowers. The improprieties, misconduct or wrongdoing that are reportable under the Whistle-Blowing Policy include: (a) financial or professional misconduct, including concerns about accounting, internal controls or auditing matters; (b) improper conduct, dishonest, fraudulent or unethical behaviour; (c) any criminal or regulatory offence, breach, irregularity or non- compliance with laws/regulations or the Manager’s policies and procedures, and/or internal controls; (d) violence at the workplace, or any workplace hazards/violations which may threaten health and safety; (e) corruption or bribery; (f) conflicts of interest without proper disclosure; (g) any deliberate attempt to cover up and/or conceal misconduct and (h) any other improprieties or matters that may adversely affect Unitholders’/shareholders’ interests in, and the assets of, FCT/the Manager as well as FCT’s/the Manager’s reputation. The Whistle-Blowing Policy is covered and explained in detail during staff training, including the procedures for raising concerns. All whistle-blowing complaints raised are independently investigated and if appropriate, an investigation committee will be constituted. The outcome of each investigation and any action taken is reported to the ARCC. The ARCC, which is responsible for oversight and monitoring of whistle-blowing, reviews and ensures that independent investigations and any appropriate follow-up actions are carried out (including reporting to the Board of any significant matters raised through the whistle-blowing channel). UNITHOLDER MATTERS The Manager treats all Unitholders fairly and equitably in order to enable them to exercise their Unitholders’ rights and have the opportunity to communicate their views on matters affecting FCT. Unitholders are also given accurate, objective, timely, balanced and understandable assessment of FCT’s performance, financial position and prospects. The Manager provides regular updates via SGXNET announcements and on its websites and via participation in outreach retail investors events hosted by the Securities Investors Association (Singapore), securities brokers or the SGX-ST. Unitholders and investors can also contact the investor relations contact person at FCT to provide their feedback or submit enquiries. The AGMs provide a platform for Unitholders to communicate their views to FCT Board and Management on various matters affecting FCT. Investor Relations The Manager prides itself on its high standards of disclosure and corporate transparency. The Manager aims to provide accurate, objective and timely information regarding FCT’s performance and progress and matters concerning FCT and its business which are likely to materially affect the price or value of the Units or are likely to influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell the Units, to Unitholders and the investment community, to enable them to make informed investment decisions. The Manager’s dedicated Investor Relations (“IR”) manager is tasked with, and focuses on, facilitating communications between FCT and its Unitholders, as well as with the investment community, analysts and media. Contact details of the IR manager (“IR Contact”) are available on FCT’s website at https://www.frasersproperty.com/reits/fct for Unitholders, investors and other stakeholders to channel their comments and queries. The IR policy also sets out the mechanism through which Unitholders may contact the Manager with questions and through which the Manager may respond to such questions. Continuous and informed dialogue between the Manager and Unitholders is a central tenet of good corporate governance. Regular engagement between these parties will promote greater transparency. Material and other pertinent information such as press releases and presentation slides are released to the SGX-ST via SGXNET and FCT’s website. Announcements through SGXNET and FCT’s website are the principal media of communication with Unitholders. In the interim business updates for the first and third quarters of each financial year, the Manager provides, inter alia, a discussion of the significant factors that affected FCT’s interim performance as well as relevant market trends, including the risks and opportunities that may have a material impact on FCT’s prospects. Such information provides Unitholders a better understanding of FCT’s performance in the context of the current business environment. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 171 The Management (including the IR manager), participates in investor conferences, roadshows, and one-on-one meetings (including virtual meetings) to keep the investment community informed of FCT’s corporate developments, financial and operational performance and strategies and in order to solicit and understand the views of Unitholders and investors. Analysts’ briefings, conference calls and/or investors’ post-results calls were conducted after the announcements of FY2023 financial results/business updates for each quarter. Audio casts of the Manager’s presentations of FCT’s half year and full year results are available on FCT’s website on the day of release of the respective results. Details of the IR activities during the year can be found in the Investor Relations section of this Annual Report on pages 22 to 24. An electronic copy of this Annual Report is available on FCT’s website at https://fct.frasersproperty.com/publications.html. Unitholders can also request for printed copies of this Annual Report via IR Contact. The Trust Deed is also available for inspection upon request at the Manager’s office4. Conduct of general meetings The forthcoming 15th Annual General Meeting (“AGM 2024”) will be held in a wholly physical format on 22 January 2024 and Unitholders (themselves or through duly appointed proxies) will be able to vote and ask questions in person at AGM 2024. The Board supports and encourages active Unitholder participation at AGMs as it believes that general meetings serve as an opportune forum for Unitholders to meet the Board and senior Management, and to interact with them. As and when an extraordinary general meeting is convened, a circular is sent to Unitholders, containing details of the matters proposed for Unitholders’ consideration and approval. To encourage participation, FCT’s general meetings are held at convenient locations. Unitholders are given the opportunity to participate effectively and vote at FCT’s general meetings, where relevant rules and procedures governing such meetings (for instance, how to vote) are clearly communicated prior to the start of the meeting. Unitholders such as nominee companies which provide custodial services for securities are not constrained by the two proxy limitation, and are able to appoint more than two proxies to attend, speak and vote at general meetings of FCT. At FCT’s general meetings, Unitholders are also given opportunities to ask questions or give feedback to the Manager. The Manager generally provides Unitholders with longer than the minimum notice period required for general meetings. The Manager tries its best not to schedule AGMs during peak periods when these might coincide with the AGMs of other listed companies. The Manager gives Unitholders the necessary information on each resolution so as to enable them to exercise their votes on an informed basis. To safeguard the Unitholders’ interests and rights, the Manager tables separate resolutions at general meetings of Unitholders on each substantially separate issue unless the issues are interdependent and linked so as to form one significant proposal. In the event where resolutions are bundled, the Manager will explain the reasons and material implications in the relevant notice of meeting. Unitholders are given the opportunity to raise questions and clarify any issues that they may have relating to the resolutions sought to be passed. For greater transparency, the Manager has implemented electronic poll voting at general meetings. This entails Unitholders being invited to vote on each of the resolutions by poll, using an electronic voting system (instead of voting by hands), thereby allowing all Unitholders present or represented at the meeting to vote on a one Unit, one vote basis. The voting results of all votes cast for, against, or abstaining from each resolution is then screened at the meeting and announced via SGXNET after the meeting. An independent external party is appointed as scrutineer for the electronic voting process to count and validate the votes at general meetings. Provision 11.4 of the CG Code provides for an issuer’s constitution to allow for absentia voting at general meetings of unitholders. The Trust Deed currently does not, however, permit Unitholders to vote at general meetings in absentia (such as via mail, email or fax). In line with Principle 11 of the CG Code, Unitholders nevertheless have the opportunity to appoint proxies to vote on his behalf at the meeting through proxy forms sent in advance. As the authentication of Unitholder identity and other related security and integrity issues remain a concern, for FY2023, the REIT Manager did not implement absentia voting methods such as voting via mail, email or fax. 4 Prior appointment with the Manager is appreciated. Corporate Governance Report 172 Frasers Centrepoint Trust Annual Report 2023 At the AGM, the Manager will make a presentation to update Unitholders on FCT’s financial and operational performance for the financial year. The presentation materials are made available on SGXNET and FCT’s website before the commencement of the AGM for the benefit of Unitholders. Board members and senior Management are present at, and for the entire duration of, each Unitholders’ meeting to respond to any questions from Unitholders, unless they are unable to attend due to exigencies. Certain external consultants including FCT’s external auditors are also present to address queries about the conduct of audit and the preparation and content of the auditors’ report. The Chairman of the meeting is tasked with facilitating constructive dialogue between the Unitholders and the Board, Management and the external auditors. Where appropriate, the Chairman allows specific Directors, such as the respective Board Committee chairpersons, to answer queries on matters related to their roles. Unitholders are also given an opportunity to interact with the Directors before and/or after general meetings. The minutes of Unitholders’ meetings which include the attendance of Board members at the meetings, matters approved by Unitholders, voting results and substantial and relevant comments or queries from Unitholders relating to the agenda of the general meeting together with responses from the Board and Management, are prepared by the Manager. The minutes will be published on FCT’s website within one month from the date of the meeting. Distributions FCT’s distribution policy is to distribute at least 90.0% of its taxable income, comprising substantially its income from the letting of its properties and related property maintenance services income after deduction of allowable expenses and such distributions are typically paid on a half-yearly basis. For FY2023, the distribution for the first half-year (for the period from 1 October 2022 to 31 March 2023) was made on 30 May 2023. The distribution for the second half-year (for the period from 1 April 2023 to 30 September 2023) was made on 29 November 2023. STAKEHOLDER ENGAGEMENT The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of FCT are served. Stakeholders are parties who may be affected by FCT’s or the Manager’s activities or whose actions can affect the ability of FCT or the Manager to conduct its activities. Sustainability In order to review and assess the material factors relevant to FCT’s business activities, the Manager from time to time proactively engages with various stakeholders, including employees, vendors and tenants, and the investment community, to gather feedback on the sustainability matters which have significant impact to the business and operations of FCT and its stakeholders. Please refer to the Sustainability Report on pages 93 to 136 of this Annual Report, which sets out information on the Manager’s arrangements to identify and engage with its material stakeholder groups and to manage its relationships with such groups, and the Manager’s strategy and key areas of focus in relation to the management of stakeholder relationships during FY2023. Responsible sourcing The Manager has put in place a Responsible Sourcing Policy which sets out expectations of contractors and suppliers across four areas of sustainable procurement, namely environmental management; human rights and labour management; health, safety, and well-being; and business ethics and integrity. The policy is informed by the UN Global Compact Principles and the UN Universal Declaration of Human Rights. Code of Business Conduct The conduct of employees of the Manager is governed by the FPL Code of Business Conduct. The FPL Group’s business practices are governed by integrity, honesty, fair dealing and compliance with applicable laws. To guide FPL Group’s employees across its multi-national network to uphold these values, FPL has established the FPL Code of Business Conduct to provide clear guidelines on ethics and relationships to safeguard the interests and reputation of the FPL Group, including the Manager, as well as its stakeholders. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 173 The FPL Code of Business Conduct covers key aspects such as avoiding conflicts of interest, working with external stakeholders (including customers, suppliers, business partners, governments and regulatory officials), protecting company’s assets, social media engagement, data privacy and upholding laws in countries where the FPL Group has geographical presence in. The FPL Code of Business Conduct also emphasises the importance of upholding FPL’s core values to build a respectful culture. Employees are encouraged to be respectful to the elements that make people similar or different from one another, including background, views, experiences, capabilities, values, beliefs, physical differences, ethnicity and culture, gender, age, thinking styles, preferences and behaviours. The FPL Code of Business Conduct sets out the policies and procedures dealing with various issues such as conflicts of interests, the maintenance of records and reports, equal employment opportunities and sexual harassment. It includes requirements relating to the keeping of accurate and sufficiently detailed accounting records for financial transactions, internal financial reporting and financial reporting to stakeholders, sets out the standards to which employees must adhere in their business relationships with third parties and personal business undertakings and their obligations to the FPL Group, and provides for the need to obtain approval in certain situations where a conflict of interest may arise. It also covers an employee’s obligations in protecting the FPL Group’s confidential information and intellectual property and reiterates the FPL Group’s zero tolerance approach to bribery and corruption. Where applicable/appropriate, the FPL Code of Business Conduct is also made available to other stakeholders such as the Manager’s agents, suppliers, business associates and customers. Anti-Money Laundering and Countering the Financing of Terrorism Measures The Manager has a policy and procedures in place to comply with applicable anti-money laundering, counter-terrorism financing laws and regulations, including the notice and guidelines issued by the MAS to capital intermediaries on the prevention of money laundering and countering the financing of terrorism. The Manager’s policy and procedures include, but are not limited to, risk assessment and mitigation, customer due diligence, reporting of suspicious transactions, and record keeping. Training on anti-money laundering, counter-terrorism financing laws and regulations are also conducted for employees, officers and representatives periodically and as and when needed. Business Continuity Management FCT has in place a Group Business Continuity Management (“BCM”) Policy which references the requirements of ISO 22301 management system. The policy sets the directives and guides the Manager in implementing and maintaining a BCM programme to protect against, reduce the likelihood of the occurrence of, prepare for, respond to and recover from disruptions when they arise. The Manager has in FY2023, enhanced its BCM programme which has boosted its resilience and capability in responding, managing, and recovering from adverse business disruptions and unforeseen catastrophic events. Under the programme, critical business functions, key processes, resource requirements, service recovery time objectives and business recovery strategies are identified. Management has identified and mapped end-to-end dependencies covering people, processes, technology and other resources (including third parties and intragroup) that support each critical business service. Management has put in place a robust and effective incident management programme to manage incidents to recover the critical business services and functions to prepare itself within the stipulated recovery time objectives. A Crisis Management Team has been established to oversee the Manager’s crisis management activities. Group Internal Audit (as an independent and qualified party) has been engaged to establish a comprehensive BCM audit plan and conduct an audit of the BCM framework and the BCM of each critical business service at least once every three years. Annual tests, exercises (tabletop or simulated) and drills, simulating different scenarios, will be carried out to assess the effectiveness of the abovementioned plans. The Manager’s Crisis Management Team and staff are trained periodically, and the plans under the BCM are updated regularly. The BCM programme ensures FCT stays resilient in the face of a crisis. It is a holistic approach to minimise adverse business impact and to safeguard FCT’s reputation and business operations. The FPL Code of Business Conduct, the BCM Policy and the other policies mentioned above, are accessible to all employees on the FPL Group intranet. Corporate Governance Report 174 Frasers Centrepoint Trust Annual Report 2023 POLICY ON DEALINGS IN SECURITIES The Manager has established a dealing policy on securities trading (“Dealing Policy”) setting out the procedure for dealings in FCT’s securities by its Directors, officers and employees. In compliance with Rule 1207(19) of the SGX-ST Listing Manual on best practices on dealing in securities, the Group issues reminders to its Directors, officers and employees on the restrictions in dealings in listed securities of the Group during the period commencing (a) two weeks prior to the announcement of the interim business updates of the first and third quarters of the financial year, and (b) one month before the announcement of the half-year and full year results, and ending on the date of such announcements (the “Prohibition Period”). Directors, officers and employees are also reminded not to trade in listed securities of FCT at any time while in possession of unpublished price sensitive information and to refrain from dealing in FCT’s securities on short-term considerations. Pursuant to the SFA, Directors and the CEO are also required to report their dealings in FCT’s securities within two business days. Every quarter, each Director, officer and employee is required to complete and submit a declaration form to the designated compliance officer to report any trades he/she made in Units in the previous quarter and confirm that no trades were made during the Prohibition Period. A quarterly report will be provided to the ARCC. Any non-compliance with the Dealing Policy will be reported to the ARCC 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 Units. The Manager has undertaken that it will not deal in Units: (i) during the Prohibition Period; or (ii) whenever it is in possession of unpublished price sensitive information/material in relation to those securities. ADDITIONAL DISCLOSURE ON FEES PAYABLE TO THE MANAGER Pursuant to the Trust Deed, the Manager is entitled to receive the following fees: Type of Fee Computation and Form of Payment Rationale and Purpose Base Fee Pursuant to Clause 15.1.1 of the Trust Deed, the Manager is entitled to receive a Base Fee not exceeding the rate of 0.3% per annum of the Value of FCT’s Deposited Property. The Base Fee is payable quarterly in the form of cash and/or Units as the Manager may elect. Performance Fee Pursuant to Clause 15.1.2 of the Trust Deed, the Manager is entitled to receive a Performance Fee equal to a rate of 5.0% per annum of the Net Property Income of FCT (calculated before accounting for the Performance Fee in that financial year) or (as the case may be) Special Purpose Vehicles for each Financial Year accrued to the Manager and remaining unpaid. The Performance Fee is payable in the form of cash and/or Units as the Manager may elect. With effect from 1 October 2016, the Performance Fee shall be paid annually, in compliance with the Property Funds Appendix. The Base Fee compensates the Manager for the costs incurred in managing FCT, which includes overheads, day- to-day operational costs, compliance, monitoring and reporting costs as well as administrative expenses. The Base Fee is calculated at a fixed percentage of asset value as the scope of the Manager’s duties is commensurate with the size of FCT’s asset portfolio. The Performance Fee, which is based on Net Property Income, aligns the interests of the Manager with Unitholders as the Manager is incentivised to proactively focus on improving rentals and optimising the operating costs and expenses of FCT’s properties. Linking the Performance Fee to Net Property Income will also motivate the Manager to ensure the long-term sustainability of the assets instead of taking on excessive short-term risks to the detriment of Unitholders. Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 175 Type of Fee Computation and Form of Payment Rationale and Purpose Acquisition Fee Pursuant to Clause 15.2.1(i) of the Trust Deed, the Manager is entitled to receive an Acquisition Fee not exceeding the rate of 1.0% of the acquisition price upon the completion of an acquisition. Subject to the Property Funds Appendix, the Acquisition Fee is payable as soon as practicable after completion of the acquisition in the form of cash and/or Units as the Manager may elect. The Acquisition Fee and Divestment Fee seek to motivate and compensate the Manager for the time, cost and effort spent (in the case of an acquisition) in sourcing, evaluating and executing potential opportunities to acquire new properties to further grow FCT’s asset portfolio or, (in the case of a divestment) in rebalancing and unlocking the underlying value of the existing properties. The Manager provides these services over and above the provision of ongoing management services with the aim of enhancing long-term returns, income sustainability and achieving the investment objectives of FCT. The Acquisition Fee is higher than the Divestment Fee because there is additional work required to be undertaken in terms of sourcing, evaluating and conducting due diligence for an acquisition, as compared to a divestment. Divestment Fee Pursuant to Clause 15.2.1(ii) of the Trust Deed, the Manager is entitled to receive a Divestment Fee not exceeding the rate of 0.5% of the sale price upon the completion of a sale or disposal. Subject to the Property Funds Appendix, the Divestment Fee is payable as soon as practicable after completion of the sale or disposal in the form of cash and/or Units as the Manager may elect. Note: Capitalised terms used in this section shall have the same meanings ascribed to them in the Trust Deed. Corporate Governance Report 176 Frasers Centrepoint Trust Annual Report 2023 SUMMARY OF COMPLIANCE WITH EXPRESS DISCLOSURE REQUIREMENTS IN PRINCIPLES AND PROVISIONS OF CG CODE PRINCIPLES AND PROVISIONS OF THE 2018 CODE OF CORPORATE GOVERNANCE BOARD’S CONDUCT OF AFFAIRS PAGE REFERENCE OF ANNUAL REPORT 2023 Provision 1.2 Induction, training and development provided to new and existing Directors Provision 1.3 Matters requiring Board approval Provision 1.4 Names of Board Committee members, terms of reference of Board Committees, any delegation of Board’s authority to make decisions and a summary of each Board Committee’s activities Provision 1.5 Number of Board and Board Committee meetings and each individual Directors’ attendances at such meeting 148 145 to 147 141 to 147 146 BOARD COMPOSITION AND GUIDANCE Provision 2.2 The Board diversity policy and progress made towards implementation of the policy, including objectives 151 to 153 BOARD MEMBERSHIP Provision 4.3 Provision 4.4 Provision 4.5 Process for the selection, appointment and re-appointment of Directors to the Board, including the criteria used to identify and evaluate potential new Directors and channels used in searching for appropriate candidates Relationships that independent Directors have with FCT, its related corporations, its substantial Unitholders or its officers, if any, which may affect their independence, and the reasons why the Board, having taken into account the views of the NRC, has determined that such Directors are still independent 144 and 150 to 151 153 to 158 Listed company directorships and principal commitments of each Director, and where a Director holds a significant number of such directorships and commitments, the NRC’s and Board’s reasoned assessment of the ability of the Director to diligently discharge his or her duties 22 to 24 and 153 to 158 BOARD PERFORMANCE Provision 5.2 How the assessments of the Board, its Board Committees and each Director have been conducted, including the identity of any external facilitator and its connection, if any, with the Manager or any of its Directors 159 to 160 Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 177 PRINCIPLES AND PROVISIONS OF THE 2018 CODE OF CORPORATE GOVERNANCE PROCEDURES FOR DEVELOPING REMUNERATION POLICIES PAGE REFERENCE OF ANNUAL REPORT 2023 Provision 6.4 Engagement of any remuneration consultants and their independence 161 and 164 DISCLOSURE ON REMUNERATION Provision 8.1 Policy and criteria for setting remuneration, as well as names, amounts and breakdown of remuneration of: 160 to 166 Provision 8.2 (a) each individual Director and the CEO; and (b) at least the top five key management personnel (who are not Directors or the CEO) in bands no wider than $250,000 and in aggregate the total remuneration paid to these key management personnel Names and remuneration of employees who are substantial shareholders of the Manager or substantial Unitholders, or are immediate family members of a Director, the CEO or such a substantial shareholder or substantial Unitholder, and whose remuneration exceeds $100,000 during the year, in bands no wider than $100,000. The employee’s relationship with the relevant Director or the CEO or substantial shareholder or substantial Unitholder should also be stated. 166 Provision 8.3 All forms of remuneration and other payments and benefits, paid by the Manager and its subsidiaries to Directors and Key Management Personnel 160 to 166 RISK MANAGEMENT AND INTERNAL CONTROLS Provision 9.2 Board’s assurance from: 168 (a) (b) the CEO and the CFO that the financial records have been properly maintained and the financial statements give a true and fair view of the REIT’s operations and finances; and the CEO and other key management personnel who are responsible, regarding the adequacy and effectiveness of the REIT’s risk management and internal control systems. Corporate Governance Report 178 Frasers Centrepoint Trust Annual Report 2023 PRINCIPLES AND PROVISIONS OF THE 2018 CODE OF CORPORATE GOVERNANCE UNITHOLDER RIGHTS AND ENGAGEMENT UNITHOLDER RIGHTS AND CONDUCT OF GENERAL MEETINGS PAGE REFERENCE OF ANNUAL REPORT 2023 Provision 11.3 Directors’ attendance at general meetings of Unitholders held during the financial year 146 and 171 to 172 ENGAGEMENT WITH UNITHOLDERS Provision 12.1 Steps taken by the Manager to solicit and understand the views of Unitholders 170 to 172 ENGAGEMENT WITH STAKEHOLDERS Provision 13.2 The Manager’s strategy and key areas of focus in relation to the management of stakeholder relationships during the reporting period 170 to 173 Corporate Governance Report Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 179 Contents FINANCIAL STATEMENTS Independent Auditors’ Report 180 Report of the Trustee 181 Statement by the Manager 182 186 Statements of Financial Position 187 Statement of Total Return 188 Distribution Statement 189 Statements of Movements in Unitholders’ Funds 190 Portfolio Statement 192 Statement of Cash Flows 194 Notes to the Financial Statements 180 Frasers Centrepoint Trust Annual Report 2023 Report of the Trustee HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the assets of Frasers Centrepoint Trust (the “Trust”) and its subsidiaries (collectively, the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). In accordance with the Securities and Futures Act 2001, 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, a second supplemental deed dated 22 January 2010, a third supplemental deed dated 17 December 2015, a fourth supplemental deed dated 19 January 2017 and a fifth supplemental deed dated 24 January 2018) (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 186 to 255, 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 Authorised Signatory Singapore 16 November 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 181 Statement by the Manager In the opinion of the directors of Frasers Centrepoint Asset Management Ltd., the accompanying financial statements set out on pages 186 to 255, comprising the consolidated statement of financial position and consolidated portfolio statement of the Group and the statement of financial position of the Trust as at 30 September 2023, and the consolidated statement of total return, consolidated distribution statement, consolidated statement of movements in unitholders’ funds and consolidated statement of cash flows of the Group and the statement of movements in unitholders’ funds of the Trust for the year then ended, and notes to the financial statements, including a summary of significant accounting policies are drawn up so as to present fairly, in all material respects, the consolidated financial position and the consolidated portfolio holdings of the Group and the financial position of the Trust as at 30 September 2023, the consolidated total return, consolidated distributable income, consolidated movements in unitholders’ funds and consolidated cash flows of the Group and the movements in unitholders’ funds of the Trust for the year then ended, in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Investment Funds 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. Koh Choon Fah Director Singapore 16 November 2023 Soon Su Lin Director 182 Frasers Centrepoint Trust Annual Report 2023 Independent Auditors’ Report To the Unitholders Frasers Centrepoint Trust (Constituted under a Trust Deed (as amended, restated and supplemented) in the Republic of Singapore) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Frasers Centrepoint Trust (the “Trust”) and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position and consolidated portfolio statement of the Group and the statement of financial position of the Trust as at 30 September 2023, the consolidated statement of total return, consolidated distribution statement, consolidated statement of movements in unitholders’ funds and consolidated statement of cash flows of the Group and the statement of movements in unitholders’ funds of the Trust for the year then ended, and notes to the financial statements, including a summary of significant accounting policies as set out on pages 186 to 255. In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position and statement of movements in unitholders’ funds of the Trust present fairly, in all material respects, the consolidated financial position and the consolidated portfolio holdings of the Group and the financial position of the Trust as at 30 September 2023 and the consolidated total return, consolidated distributable income, consolidated movements in unitholders’ funds and consolidated cash flows of the Group and the movements in unitholders’ funds of the Trust for the year ended on that date in accordance with the recommendations of Statement of Recommended Accounting Practice 7 (“RAP 7”) Reporting Framework for Investment Funds issued by the Institute of Singapore Chartered Accountants (the “ISCA”). Basis for opinion We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are further described in the ‘Auditors’ responsibilities for the audit of the financial statements’ section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 183 Independent Auditors’ Report To the Unitholders Frasers Centrepoint Trust (Constituted under a Trust Deed (as amended, restated and supplemented) in the Republic of Singapore) Valuation of investment properties (Refer to Portfolio Statement and Note 4 to the financial statements) Risk The Group owns retail malls and an office building located in Singapore that are leased to third parties under operating leases. As at 30 September 2023, the investment properties with carrying amount of $5.22 billion represent the single largest asset category on the consolidated statement of financial position of the Group. The investment properties are stated at their fair values based on independent external valuations. The valuation process is considered a key audit matter because it involves significant judgement in determining the appropriate valuation methodology to be used, and in estimating the underlying assumptions to be applied. The valuations are sensitive to key assumptions applied and a change in the assumptions may have a significant impact on the valuations. Our response We evaluated the qualifications and competence of the external valuers. We considered the valuation methodologies used against those applied by other valuers for similar property types. We evaluated the appropriateness of the key assumptions used in the valuations by comparing them against available industry data, taking into consideration comparability and market factors. Where the assumptions were outside the expected range, we undertook further procedures to understand the effect of additional factors taken into account in the valuations. Our findings The external valuers are members of generally-recognised professional bodies for valuers and have considered their own independence in carrying out their work. The valuation methodologies used were in line with generally accepted market practices and the key assumptions used were generally comparable to available market data. Where the assumptions were outside the expected range, the additional factors considered by the external valuers were consistent with other corroborative evidence. Other information Frasers Centrepoint Asset Management Ltd., the Manager of the Trust (the “Manager”), is responsible for the other information contained in the annual report. Other information is defined as all information in the annual report other than the financial statements and our auditors’ report thereon. We have obtained all other information prior to the date of this auditors’ report except for the Sustainability Report and the Statistics of Unitholdings which are expected to be made available to us after that date. Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the Sustainability Report and the Statistics of Unitholdings, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the Manager and take appropriate actions in accordance with SSAs. 184 Frasers Centrepoint Trust Annual Report 2023 Independent Auditors’ Report To the Unitholders Frasers Centrepoint Trust (Constituted under a Trust Deed (as amended, restated and supplemented) in the Republic of Singapore) Responsibilities of the Manager for the financial statements The Manager is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of RAP 7 issued by the ISCA, 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. In preparing the financial statements, the Manager is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to terminate the Group or to cease operations of the Group, or has no realistic alternative but to do so. The Manager’s responsibilities include overseeing the Group’s financial reporting process. Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • • • • • • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Obtain an understanding of internal controls relevant to the audit 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 Group’s internal controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager. Conclude on the appropriateness of the Manager’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 185 Independent Auditors’ Report To the Unitholders Frasers Centrepoint Trust (Constituted under a Trust Deed (as amended, restated and supplemented) in the Republic of Singapore) We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit. We also provide the Manager with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Manager, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent auditors’ report is Sarina Lee. KPMG LLP Public Accountants and Chartered Accountants Singapore 16 November 2023 186 Frasers Centrepoint Trust Annual Report 2023 Statements of Financial Position As at 30 September 2023 Non-current assets Investment properties Fixed assets Investment in subsidiaries Investment in associate Investment in joint ventures Derivative financial instruments Current assets Derivative financial instruments Trade and other receivables Cash and cash equivalents Assets held for sale Total assets Current liabilities Trade and other payables Derivative financial instruments Current portion of security deposits Interest-bearing borrowings Provision for taxation Liabilities held for sale Non-current liabilities Derivative financial instruments Interest-bearing borrowings Non-current portion of security deposits Total liabilities Net assets Represented by: Unitholders’ funds Units in issue (’000) Group Trust Note 2023 $’000 2022 $’000 2023 $’000 2022 $’000 4 5 6 7 8 9 9 10 11 12 13 9 14 12 9 14 5,220,500 48 – – 730,766 14,937 5,966,251 3,533 8,756 32,206 364,436 408,931 5,516,000 126 – 40,808 312,341 21,740 5,891,015 3,331 8,857 38,165 – 50,353 2,152,000 48 2,004,045 – 693,951 15,063 4,865,107 3,533 5,986 12,766 364,320 386,605 2,460,000 126 1,447,600 44,565 287,366 21,740 4,261,397 3,331 358,944 16,613 – 378,888 6,375,182 5,941,368 5,251,712 4,640,285 95,250 – 48,680 353,483 402 6,189 504,004 70,583 – 45,647 390,668 463 – 507,361 225,011 3,533 16,548 – – 6,189 251,281 9,217 1,841,925 46,801 1,897,943 – 1,419,458 50,472 1,469,930 12,483 1,137,227 17,977 1,167,687 114,204 2,897 19,228 199,951 – – 336,280 11,189 457,677 20,165 489,031 2,401,947 1,977,291 1,418,968 825,311 3,973,235 3,964,077 3,832,744 3,814,974 3,973,235 3,964,077 3,832,744 3,814,974 15 1,708,459 1,702,057 1,708,459 1,702,057 Net asset value/Net tangible asset value per Unit ($) 16 2.32 2.33 2.24 2.24 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 187 Statement of Total Return For the Financial Year Ended 30 September 2023 Gross revenue Property expenses Net property income Finance income Other income Finance costs Asset management fees Valuation fees Trustee’s fees Audit fees Professional fees Other charges Net income Share of results of associate Share of results of joint ventures Impairment loss on investment in associate Loss from the dilution of interest in associate Net change in fair value of investment properties Net change in fair value of derivative financial instruments Net foreign exchange loss Total return before tax Taxation Total return for the year Earnings per Unit (cents) Basic Diluted Note Group 2023 $’000 2022 $’000 17 18 19 20 21 7 8 7 4 22 23 369,723 (104,137) 265,586 439 3,815 (81,042) (35,468) (188) (1,016) (290) (2,369) (398) 149,069 5,862 51,185 (3,982) – 9,897 174 (1) 212,204 (250) 211,954 356,931 (98,334) 258,597 43 – (46,832) (32,608) (164) (953) (246) (1,531) (743) 175,563 (1,096) 24,599 – (1,143) 2,744 528 (8) 201,187 6,092 207,279 12.42 12.39 12.18 12.17 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 188 Frasers Centrepoint Trust Annual Report 2023 Distribution Statement For the financial year ended 30 September 2023 Income available for distribution to Unitholders at beginning of year Net income Net tax and other adjustments (Note A) Distributions from associate Distributions from joint ventures Distributable income for the year Income available for distribution to Unitholders Distributions to Unitholders: Distribution of 6.089 cents per Unit for period from 1/4/2021 to 30/9/2021 Distribution of 6.136 cents per Unit for period from 1/10/2021 to 31/3/2022 Distribution of 6.091 cents per Unit for period from 1/4/2022 to 30/9/2022 Distribution of 6.130 cents per Unit for period from 1/10/2022 to 31/3/2023 Income available for distribution to Unitholders at end of year Distributions to Unitholders (1) (2) Distribution per Unit for the year (cents) (1) (2) Note A – Net tax and other adjustments relate to the following items: – Asset management fees paid/payable in Units – Amortisation of transaction costs – Amortisation of lease incentives – Other items (3) Net tax and other adjustments 2023 $’000 105,478 149,069 19,965 3,187 34,914 207,135 312,613 – – 103,776 104,680 208,456 104,157 207,745 12.150 Group 2022 $’000 103,573 175,563 12,234 2,130 19,957 209,884 313,457 103,565 104,414 – – 207,979 105,478 208,190 12.227 11,556 2,787 (1,394) 7,016 19,965 6,522 2,439 (1,906) 5,179 12,234 (1) In determining the distributions relating to FY2023, FCT released $1.7 million of its tax-exempt income available for distribution to Unitholders which had been previously retained in FY2022 and retained $1.1 million of its tax-exempt income available for distribution to Unitholders. In determining the distributions relating to FY2022, FCT retained $1.7 million of its tax-exempt income available for distribution to Unitholders. (2) The distribution relating to period from 1 April 2023 to 30 September 2023 will be paid on 29 November 2023. (3) Include tax-exempt dividend of $4.0 million (2022: $2.0 million) declared by FCT Holdings (Sigma) Pte. Ltd. The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 189 Statements of Movements in Unitholders’ Funds For the financial year ended 30 September 2023 Net assets at beginning of year 3,964,077 3,918,808 3,814,974 3,794,254 Group 2023 $’000 2022 $’000 Trust 2023 $’000 2022 $’000 Operations Total return for the year Unitholders’ transactions Creation of Units – issued/issuable as satisfaction of asset management fees – issued as satisfaction of acquisition fees Distributions to Unitholders Net decrease in net assets resulting from Unitholders’ transactions Hedging reserve Effective portion of change in fair value of cash flow hedges Net change in fair value of cash flow hedges reclassified to statement of total return Share of movement in hedging reserve of joint ventures Net (decrease)/increase in net assets resulting from hedging reserve Translation reserve Net effect of exchange loss arising from translation of financial statement of associate Realisation of translation reserve arising from the dilution of interest in associate Net effect of exchange loss arising from translation of financial statements of subsidiaries Net decrease in net assets resulting from translation reserve 211,954 207,279 205,655 209,084 11,556 6,611 (208,456) 6,522 – (207,979) 11,556 6,611 (208,456) 6,522 – (207,979) (190,289) (201,457) (190,289) (201,457) (15,818) 27,679 (8,405) 13,093 10,809 – 10,809 (5,201) 13,099 – – – (10,210) 40,778 2,404 13,093 (2,266) (1,716) – (31) 399 (14) (2,297) (1,331) – – – – – – – – Net assets at end of year 3,973,235 3,964,077 3,832,744 3,814,974 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 190 Frasers Centrepoint Trust Annual Report 2023 Portfolio Statement As at 30 September 2023 GROUP Description of Property Term of Lease Investment properties in Singapore Location Existing Use Carrying Value Percentage of Net Assets 2023 $’000 2022 $’000 2023 % 2022 % Causeway Point Northpoint City North Wing Changi City Point Yishun 10 Retail Podium Tampines 1 Tiong Bahru Plaza Century Square Hougang Mall White Sands Central Plaza 99-year leasehold from 30 October 1995 99-year leasehold from 1 April 1990 60-year leasehold from 30 April 2009 99-year leasehold from 1 April 1990 99-year leasehold from 1 April 1990 99-year leasehold from 1 September 1991 99-year leasehold from 1 September 1992 99-year leasehold from 1 May 1994 99-year leasehold from 1 May 1993 99-year leasehold from 1 September 1991 1 Woodlands Square 930 Yishun Avenue 2 5 Changi Business Park Central 1 51 Yishun Central 1 10 Tampines Central 1 302 Tiong Bahru Road 2 Tampines Central 5 90 Hougang Avenue 10 1 Pasir Ris Central Street 3 298 Tiong Bahru Road Commercial 1,336,000 1,323,000 33.6 33.4 Commercial 782,000 778,000 19.7 19.6 Commercial – (1) 325,000 – 8.2 Commercial 34,000 34,000 0.9 0.9 Commercial 771,000 764,000 19.4 19.3 Commercial 657,000 655,000 16.5 16.5 Commercial 559,000 559,000 14.1 14.1 Commercial 435,000 433,000 10.9 10.9 Commercial 429,000 429,000 10.8 10.8 Commercial 217,500 216,000 5.5 5.5 Investment properties, at valuation 5,220,500 5,516,000 131.4 139.2 Asset held for sale in Singapore (Note 12) Changi City Point 60-year leasehold from 30 April 2009 5 Changi Business Park Central 1 Commercial 325,000 (1) – 8.2 – Investment in associate (Note 7) Investment in joint ventures (Note 8) Other assets and liabilities (net) Net assets attributable to Unitholders – (1) 730,766 (2) 6,276,266 (2,303,031) 3,973,235 40,808 312,341 5,869,149 (1,905,072) 3,964,077 – 18.4 158.0 (58.0) 100.0 1.0 7.9 148.1 (48.1) 100.0 (1) Reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (2) Excluded the investment in Changi City Carpark Operations LLP (“CCCO LLP”), which has been reclassified to “Assets held for sale” as at 30 September 2023. The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 191 Portfolio Statement As at 30 September 2023 Independent valuations of the investment properties were undertaken by Jones Lang LaSalle Property Consultants Pte Ltd (“JLL”) and Savills Valuation and Professional Services (S) Pte Ltd (“Savills”) (2022: JLL and Savills). The Manager believes that these independent valuers possess appropriate professional qualifications and relevant 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 Investment properties in Singapore Carrying Value 2023 $’000 2022 $’000 Causeway Point Savills (2022: Savills) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 1,336,000 1,323,000 Northpoint City North Wing Savills (2022: Savills) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 782,000 778,000 Yishun 10 Retail Podium Savills (2022: Savills) Capitalisation approach, discounted cash flow analysis and direct comparison method (2022: Capitalisation approach, discounted cash flow analysis and direct comparison method) 34,000 34,000 Tampines 1 JLL (2022: JLL) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 771,000 764,000 Tiong Bahru Plaza JLL (2022: JLL) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 657,000 655,000 Century Square JLL (2022: JLL) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 559,000 559,000 Hougang Mall White Sands Central Plaza JLL (2022: JLL) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 435,000 433,000 JLL (2022: JLL) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 429,000 429,000 JLL (2022: JLL) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 217,500 216,000 Asset held for sale in Singapore (Note 12) Changi City Point Savills (2022: Savills) Capitalisation approach and discounted cash flow analysis (1) (2022: Capitalisation approach and discounted cash flow analysis (1)) 325,000 (2) 325,000 (1) Direct comparison method was used as a cross-check. (2) Reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). The net change in fair value of these investment properties have been recognised in the statement 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 rental income, recognised in the statement of total return of the Group for the year ended 30 September 2023 amounted to $18,349,000 (2022: $17,560,000) (Note 17). The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 192 Frasers Centrepoint Trust Annual Report 2023 Statement of Cash Flows For the financial year ended 30 September 2023 Operating activities Total return before tax Adjustments for: Net allowance/(written back) for doubtful receivables Finance costs Asset management fees paid/payable in Units Finance income Depreciation of fixed assets Share of results of associate Share of results of joint ventures Impairment loss on investment in associate Loss from the dilution of interest in associate Net change in fair value of investment properties Net change in fair value of derivative financial instruments Amortisation of lease incentives Fixed assets written off Operating income before working capital changes Changes in working capital: Trade and other receivables Trade and other payables Security deposits Cash flows generated from operating activities Income tax paid Net cash flows generated from operating activities Investing activities Distributions received from associate Distributions received from joint ventures Adjustment of consideration paid for investment in joint venture Finance income received Capital and other expenditure on investment properties Deposit received for assets held for sale Investment in joint ventures Cash flows (used in)/generated from investing activities Note Group 2023 $’000 2022 $’000 212,204 201,187 18 20 18 7 8 7 4 18 7 8 8 51 81,042 11,556 (439) 43 (5,862) (51,185) 3,982 – (9,897) (174) (1,394) 35 239,962 51 (2,121) 5,551 243,443 (313) 243,130 9 34,028 – 439 (8,332) 16,900 (399,975) (356,931) (656) 46,832 6,522 (43) 49 1,096 (24,599) – 1,143 (2,744) (528) (1,906) – 226,353 794 36 7,752 234,935 (1,351) 233,584 2,130 19,686 70 43 (5,901) – – 16,028 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 193 Statement of Cash Flows For the financial year ended 30 September 2023 Financing activities Proceeds from borrowings Repayment of borrowings Interest expense paid Distributions to Unitholders Settlement of derivative financial instrument Payment of transaction costs Cash flows generated from/(used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Significant Non-Cash Transactions Note 14 14 14 14 14 11 Group 2023 $’000 2022 $’000 1,146,998 (749,933) (76,474) (208,456) 174 (4,467) 107,842 (5,959) 38,165 32,206 387,000 (387,000) (43,712) (207,979) – (1,990) (253,681) (4,069) 42,234 38,165 During the financial year, 5,286,207 (2022: 2,906,185) Units were issued and issuable in satisfaction of asset management fees payable in Units, amounting to a value of $11,556,000 (2022: $6,522,000). On 14 February 2023, 2,987,432 Units were issued in satisfaction of: (i) (ii) the acquisition fee of $1,313,000 in connection with the acquisition of an additional 10.00% interest in Sapphire Star Trust (“SST”); and the acquisition fee of $5,298,000 in connection with the acquisition of an effective 25.50% interest in Gold Ridge Pte. Ltd (“GRPL”). On 3 January 2023, Hektar Real Estate Investment Trust (“H-REIT”) declared a distribution of RM6,864,000 (net of 10% withholding tax) to the Group. The Group had elected to reinvest and receive the entire distribution in new H-REIT units under the income distribution reinvestment plan (“IDRP”). Following the IDRP, the Group received 10,559,928 new H-REIT units and the Group’s interest in H-REIT increased from 30.53% to 30.97%. The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 194 Frasers Centrepoint Trust Annual Report 2023 The following notes form an integral part of the financial statements. The financial statements were authorised for issue by the Manager and the Trustee on 16 November 2023. 1. GENERAL Frasers Centrepoint Trust (the “Trust” or “FCT”) 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 subsidiaries (collectively, the “Group” and individually as “Group entities”) and the Group’s interest in equity-accounted investees in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). 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 significant subsidiaries is set out in Note 6. For financial reporting purposes, the Trust is regarded as a subsidiary of Frasers Property Limited (“FPL”), a Singapore-domiciled company. The ultimate holding company is TCC Assets Limited, which is incorporated in the British Virgin Islands. The Group has entered into several service agreements in relation to management of the Group and its property operations. The fee structures of these services are as follows: 1.1 Property management fees Under the property management agreements, the fees charged for all properties within the portfolio, excluding Central Plaza, are as follows: (i) 2.0% per annum of the gross revenue of the properties; (ii) (iii) 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, otherwise payable to the Property Manager and/or third party agents. For Central Plaza, property management fees are charged based on 3.0% per annum of the net property income of the property. The property management fees are payable monthly in arrears. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 195 1. GENERAL (CONT’D) 1.2 Asset management fees Pursuant to the Trust Deed, asset management fees comprise the following: (i) (ii) a base fee not exceeding 0.3% per annum of the value of Deposited Property (being all assets, as stipulated in the Trust Deed) of the Trust and any Special Purpose Vehicles of the Group; 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 of the Group (as defined in the Trust Deed) for each financial year. Any increase in the rate or any change in the structure of the asset management fees must be approved by an Extraordinary Resolution of Unitholders passed at a Unitholders’ meeting duly convened and held in accordance with the provisions of the Trust Deed. The Manager may elect to receive the fees in cash or Units or a combination of cash and Units (as it may in its sole discretion determine). For the year ended 30 September 2023, the Manager has opted to receive an average of 32.5% (2022: 20.0%) of the asset management fees in the form of Units with the balance in cash. The portion of the base management fees is payable on a quarterly basis in arrears and the portion of the performance management fees is payable on an annually basis in arrears. The Manager is also entitled to receive acquisition fee not exceeding the rate of 1% of the acquisition price on all acquisitions and divestment fee not exceeding the rate of 0.5% of the sale price on all disposals of properties or investments. 1.3 Trustee’s fees Pursuant to the Trust Deed, the Trustee’s fees payable by the Trust 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. The Trustee’s fees payable by the sub-trusts shall not exceed 0.0135% per annum of the respective proportionate share of the value of Deposited Property, subject to a minimum of $6,000 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. BASIS OF PREPARATION 2.1 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 Investment Funds 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 Financial Reporting Standards in Singapore (“FRSs”). The financial statements have been prepared on the historical cost basis except as otherwise described in the notes below. These financial statements are presented in Singapore dollars, which is the Trust’s functional currency. All financial information presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise stated. Notes to the Financial StatementsFor the year ended 30 September 2023 196 Frasers Centrepoint Trust Annual Report 2023 2. BASIS OF PREPARATION (CONT’D) 2.1 Basis of preparation (cont’d) 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. Actual results may differ from these estimates. Estimates and underlying assumptions are revised on an ongoing basis. Revisions to accounting estimates are recognised prospectively. Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in Note 4 – Valuation of investment properties. Measurement of fair values A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: 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). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is 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 (with Level 3 being the lowest). The Group recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred. 2.2 Changes in accounting policies New and amended standards adopted by the Group The Group has applied the following FRSs and amendments to FRSs for the first time for the annual period beginning on 1 October 2022: • • • • • Amendments to FRS 103: Reference to the Conceptual Framework Amendments to FRS 16: Property, Plant and Equipment – Proceeds before Intended Use Amendments to FRS 37: Onerous Contracts – Cost of fulfilling a Contract Annual Improvements to FRSs 2018-2020 Amendments to FRS 12: International Tax Reform – Pillar Two Model Rules Based on Amendments to FRS 12: International Tax Reform – Pillar Two Model Rules, the Group has applied the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group’s adoption of the new standards and amendments to FRSs does not have a material impact on the financial statements. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 197 3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied by the Group entities consistently to all the periods presented in these financial statements, except as explained in Note 2.2, which addresses changes in accounting policies arising from the adoption of new standards. 3.1 Basis of consolidation (i) Business combinations The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The Group measures goodwill at the date of acquisition as: • • • the fair value of the consideration transferred; plus the recognised amount of any non-controlling interest (“NCI”) in the acquiree; plus if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any goodwill that arises is tested annually for impairment. When the excess is negative, a bargain purchase gain is recognised immediately in the statement of total return. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the statement of total return. Any contingent consideration payable is recognised at fair value at the date of acquisition and included in the consideration transferred. If the contingent consideration that meets the definition of a financial instrument is classified as equity, it is not remeasured and settlement is accounted for within unitholders’ funds. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes to the fair value of the contingent consideration are recognised in the statement of total return. NCI (if any) that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation are measured either at fair value or at the NCI’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets, at the date of acquisition. The measurement basis taken is elected on a transaction-by-transaction basis. All other NCI are measured at acquisition-date fair value, unless another measurement basis is required by FRSs. Costs related to the acquisition, other than those associated with the issue of debt or equity investments, that the Group incurs in connection with a business combination are expensed as incurred. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Notes to the Financial StatementsFor the year ended 30 September 2023 198 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.1 Basis of consolidation (cont’d) (ii) Subsidiaries A subsidiary is an entity controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of a subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the NCI in a subsidiary are allocated to the NCI even if doing so causes the NCI to have a deficit balance. In the Trust’s statement of financial position, investment in subsidiary is accounted for at cost less any accumulated impairment losses. When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in the statement of total return. Any interest retained in the former subsidiary is measured at fair value when control is lost. (iii) Investments in associate and joint ventures (equity-accounted investees) An associate is an entity over which the Group has significant influence over the financial and operating policy decisions of the investee but does not have control or joint control of those policies. Significant influence is presumed to exist when the Group has 20% or more of the voting power of another entity. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Investments in associate and joint ventures are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income (“OCI”) of equity- accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group’s share of losses exceeds its investment in equity-accounted investee, the carrying amount of the investment, together with any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation to fund the investee’s operations or has made payments on behalf of the investee. The financial statements of the associate and joint ventures are prepared as the same reporting date as the Trust. 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 associate are carried at cost less accumulated impairment losses. A list of the associate and joint ventures is shown in Notes 7 and 8, respectively. (iv) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 199 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.1 Basis of consolidation (cont’d) (v) Property acquisitions and business combinations Where property is acquired, via corporate acquisitions or otherwise, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. More specifically, consideration is made of the extent to which significant processes are acquired and, in particular, the extent of services provided by the subsidiary. When the acquisition does not represent a business, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised. 3.2 Earnings per Unit The Group presents basic and diluted earnings per Unit data for its Units. Basic earnings per Unit is calculated by dividing the total return attributable to Unitholders of the Group by the weighted-average number of units outstanding during the year. Diluted earnings per Unit is determined by adjusting the total return attributable to Unitholders and the weighted-average number of units outstanding, for the effects of all dilutive potential Units. 3.3 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 1.1. (ii) Asset management fees Asset management fees are recognised on an accrual basis based on the applicable formula stipulated in Note 1.2. (iii) Trustee’s fees Trustee’s fees are recognised on an accrual basis based on the applicable formula stipulated in Note 1.3. 3.4 Financial instruments (i) Recognition and initial measurement Non-derivative financial assets and financial liabilities Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price. Notes to the Financial StatementsFor the year ended 30 September 2023 200 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.4 Financial instruments (cont’d) (ii) Classification and subsequent measurement Non-derivative financial assets On initial recognition, a financial asset is classified as measured at amortised cost. The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest. The Group reclassifies financial assets when and only when its business model for managing those assets changes. Financial assets at amortised cost A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: • • it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets: Business model assessment The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes: • • • • the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets; how the performance of the portfolio is evaluated and reported to the Group’s management; the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity. Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 201 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.4 Financial instruments (cont’d) (ii) Classification and subsequent measurement (cont’d) Non-derivative financial assets: Assessment whether contractual cash flows are solely payments of principal and interest For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers: • • • • contingent events that would change the amount or timing of cash flows; terms that may adjust the contractual coupon rate, including variable rate features; prepayment and extension features; and terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features). A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition. Non-derivative financial assets: Subsequent measurement and gains and losses Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in the statement of total return. Any gain or loss on derecognition is recognised in the statement of total return. Non-derivative financial liabilities: Classification, subsequent measurement and gains and losses Financial liabilities are classified as measured at amortised cost. Directly attributable transaction costs are recognised in the statement of total return as incurred. Other financial liabilities are initially measured at fair value less directly attributable transaction costs. They are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the statement of total return. Notes to the Financial StatementsFor the year ended 30 September 2023 202 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.4 Financial instruments (cont’d) (ii) Classification and subsequent measurement (cont’d) Interest rate benchmark reform When the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortised cost changed as a result of interest rate benchmark reform, the Group updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform. No immediate gain or loss is recognised. A change in the basis for determining the contractual cash flows is required by interest rate benchmark reform if the following conditions are met: • • the change is necessary as a direct consequence of the reform; and the new basis for determining the contractual cash flows is economically equivalent to the previous basis – i.e. the basis immediately before the change. When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Group applied the policies on accounting for modifications to the additional changes. (iii) Derecognition Financial assets The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. The Group enters into transactions whereby it transfers assets recognised in its statements of financial position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised. Financial liabilities The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in the statement of total return. (iv) Offsetting Financial assets and financial liabilities are offset and the net amount presented in the statements of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 203 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.4 Financial instruments (cont’d) (v) Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months or less from the date of acquisition that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments. (vi) Derivative financial instruments and hedge accounting The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met. Derivatives are initially measured at fair value and any directly attributable transaction costs are recognised in the statement of total return as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in the statement of total return. The Group designates certain derivatives and non-derivative financial instruments as hedging instruments in qualifying hedging relationships. At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other. Cash flow hedges The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in unitholders’ funds and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in unitholders’ funds is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the statement of total return. If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve and the cost of hedging reserve remains in unitholders’ funds until it is reclassified to the statement of total return in the same period or periods as the hedged expected future cash flows affect the statement of total return. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to the statement of total return. Notes to the Financial StatementsFor the year ended 30 September 2023 204 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.4 Financial instruments (cont’d) (vi) Derivative financial instruments and hedge accounting (cont’d) Hedges directly affected by interest rate benchmark reform When the basis for determining the contractual cash flows of the hedged item or hedging instrument changes as a result of interest rate benchmark reform and therefore there is no longer uncertainty arising about the cash flows of the hedged item or the hedging instrument, the Group amends the hedge documentation of that hedging relationship to reflect the change(s) required by interest rate benchmark reform. A change in the basis for determining the contractual cash flows is required by interest rate benchmark reform if the following conditions are met: • • the change is necessary as a direct consequence of the reform; and the new basis for determining the contractual cash flows is economically equivalent to the previous basis – i.e. the basis immediately before the change. For this purpose, the hedge designation is amended only to make one or more of the following changes: • • • designating an alternative benchmark rate as the hedged risk; updating the description of the hedged item, including the description of the designated portion of the cash flows or fair value being hedged; or updating the description of the hedging instrument. The Group amends the description of the hedging instrument only if the following conditions are met: • it makes a change required by interest rate benchmark reform by changing the basis for determining the contractual cash flows of the hedging instrument or using another approach that is economically equivalent to changing the basis for determining the contractual cash flows of the original hedging instrument; and • the original hedging instrument is not derecognised. The Group amends the formal hedge documentation by the end of the reporting period during which a change required by interest rate benchmark reform is made to the hedged risk, hedged item or hedging instrument. These amendments in the formal hedge documentation do not constitute the discontinuation of the hedging relationship or the designation of a new hedging relationship. If changes are made in addition to those changes required by interest rate benchmark reform described above, then the Group first considers whether those additional changes result in the discontinuation of the hedge accounting relationship. If the additional changes do not result in the discontinuation of the hedge accounting relationship, then the Group amends the formal hedge documentation for changes required by interest rate benchmark reform as mentioned above. When the interest rate benchmark on which the hedged future cash flows had been based is changed as required by interest rate benchmark reform, for the purpose of determining whether the hedged future cash flows are expected to occur, the Group deems that the hedging reserve recognised in unitholders’ funds for that hedging relationship is based on the alternative benchmark rate on which the hedged future cash flows will be based. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 205 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.5 Fixed assets (i) Recognition and measurement Items of fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. If significant parts of an item of fixed asset have different useful lives, they are accounted for as separate items (major components) of fixed asset. The gain or loss on disposal of an item of fixed asset is recognised in the statement of total return. (ii) Subsequent costs The cost of replacing a component of an item of fixed asset is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of fixed asset are recognised in the statement of total return as incurred. (iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation is recognised as an expense in the statement of total return on a straight-line basis over the estimated useful lives of each component of an item of fixed asset, unless it is included in the carrying amount of another asset. Depreciation is recognised from the date that the fixed assets are installed and are ready for use. The estimated useful lives are 2 years to 10 years. Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate. 3.6 Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are measured and recorded on initial recognition in Singapore dollars, the functional currency of the Group entities, at exchange rates at the dates of transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are generally recognised in statement of total return. However, foreign currency differences arising from the translation of the following items are recognised in unitholders’ fund: • • • an equity investment designated as at fair value through other comprehensive income (“FVOCI”); a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and qualifying cash flow hedges to the extent that the hedges are effective. Notes to the Financial StatementsFor the year ended 30 September 2023 206 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.6 Foreign currency (cont’d) (ii) Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the dates of the transactions. Foreign currency differences are recognised in unitholders’ funds. However, if the foreign operation is a non wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the NCI. When a foreign operation is disposed of such control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to statement of total return as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to statement of total return. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to form part of a net investment in a foreign operation are recognised in the translation reserve in unitholders’ funds. 3.7 Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. As a lessor At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset. If an arrangement contains lease and non-lease components, then the Group applies FRS 115 to allocate the consideration in the contract. The Group recognises lease payments received from investment property under operating leases as income on a straight-line basis over the lease term as part of ‘revenue’. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 207 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.8 Impairment (i) Non-derivative financial assets The Group recognises loss allowances for expected credit losses (“ECLs”) on financial assets measured at amortised cost and lease receivables. Loss allowances of the Group are measured on either of the following bases: • • 12-month ECLs: these are ECLs that result from default events that are possible within the 12 months after the reporting date (or for a shorter period if the expected life of the instrument is less than 12 months); or Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument. Simplified approach The Group applies the simplified approach to provide for ECLs for all trade receivables (including lease receivables). The simplified approach requires the loss allowance to be measured at an amount equal to lifetime ECLs. General approach The Group applies the general approach to provide for ECLs on all other financial instruments. Under the general approach, the loss allowance is measured at an amount equal to 12-month ECLs at initial recognition. At each reporting date, the Group assesses whether the credit risk of a financial instrument has increased significantly since initial recognition. When credit risk has increased significantly since initial recognition, loss allowance is measured at an amount equal to lifetime ECLs. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and includes forward-looking information. If credit risk has not increased significantly since initial recognition or if the credit quality of the financial instruments improves such that there is no longer a significant increase in credit risk since initial recognition, loss allowance is measured at an amount equal to 12-month ECLs. The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held), or when the financial asset is more than 90 days past due. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. Measurement of ECLs ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset. Notes to the Financial StatementsFor the year ended 30 September 2023 208 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.8 Impairment (cont’d) (i) Non-derivative financial assets (cont’d) Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: • • • • • significant financial difficulty of the debtor; a breach of contract such as a default or being more than 90 days past due; the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise; it is probable that the debtor will enter bankruptcy or other financial reorganisation; or the disappearance of an active market for a security because of financial difficulties. Presentation of allowance for ECLs in the statements of financial position Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of these assets. Write-off The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due. (ii) Non-financial assets The carrying amounts of the Group’s non-financial assets, other than investment properties, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets’ recoverable amounts are estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit (“CGU”) exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of total return. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. 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 or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the 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 or amortisation, if no impairment loss had been recognised. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 209 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.8 Impairment (cont’d) (ii) Non-financial assets (cont’d) An impairment loss in respect of an associate or joint venture is measured by comparing the recoverable amount of the investment with its carrying amount in accordance with the requirements for non-financial assets. An impairment loss is recognised in the statement of total return. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount and only to the extent that the recoverable amount increases. Goodwill that forms part of the carrying amount of an investment in associate or joint venture is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in associate or joint venture is tested for impairment as a single asset when there is objective evidence that the investment in associate or joint venture may be impaired. 3.9 Finance income and finance costs The Group’s finance income and finance costs include: • • • • interest income; interest expense; hedge ineffectiveness in statement of total return; and amortisation of transaction costs. Interest income or expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to: • • the gross carrying amount of the financial asset; or the amortised cost of the financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis. Finance costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in statement of total return using the effective interest method. Notes to the Financial StatementsFor the year ended 30 September 2023 210 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.10 Investment properties Investment properties are properties held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in production or supply of goods or services or for administrative purposes. Investment properties are measured at cost on initial recognition and subsequently at fair value 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 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 statement of total return as a net change in fair value of the investment properties. Cost includes expenditure that is directly attributable to the acquisition of the investment property. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in the statement of total return. 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 entities may claim capital allowances on assets that qualify as plant and machinery under the Singapore Income Tax Act. 3.11 Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance costs. 3.12 Revenue recognition Gross rental income Gross rental income, which include lease incentives, is recognised on a straight-line basis over the lease term commencing on the date from which the lessee is entitled to exercise its right to use the leased asset. Gross turnover rental income Contingent rentals, which include gross turnover rental income, are recognised as income in the accounting period in which it is earned and the amount can be reliably measured. Car park income Car park income consists of season and hourly parking income. Season parking income is recognised on a straight-line basis over the non-cancellable lease term. Hourly parking income is recognised at a point of time upon the utilisation of car parking facilities. 3.13 Security deposits Security deposits mainly comprise of rental deposits and utility deposits received from tenants at the Group’s investment properties. The accounting policy for security deposits as financial liabilities is set out in Note 3.4. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 211 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.14 Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Board of Directors of the Manager to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Segment results that are reported to the Board of Directors of the Manager include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly finance costs and asset management fees. Segment capital expenditure is the total cost incurred to acquire investment properties and fixed assets. 3.15 Taxation Tax expense comprises current and deferred tax. Current tax and deferred tax expense are recognised in the statement of total return except to the extent that it relates to an item recognised directly in unitholders’ funds. The Group has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under FRS 37 Provisions, Contingent Liabilities and Contingent Assets. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. Current tax assets and liabilities are offset only if certain criteria are met. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences that: • • temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; temporary differences related to investments in subsidiaries, associates and joint ventures to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future; and • taxable temporary differences arising on the initial recognition of goodwill. The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For investment property that is measured at fair value, the presumption that the carrying amount of the investment property will be recovered through sale has not been rebutted. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date, and reflects uncertainty related to income taxes, if any. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. Notes to the Financial StatementsFor the year ended 30 September 2023 212 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.15 Taxation (cont’d) Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. 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 and the Units are not held through a partnership in Singapore or Qualifying Unitholders, who are not acting in the capacity of a trustee, the Trustee and the Manager will make the distributions to such Unitholders without deducting any income tax; and where the beneficial owners are Qualifying foreign non-individual investors or qualifying Non-resident Fund or where the Units are held by nominee Unitholders who can demonstrate that the Units are held for beneficial owners who are Qualifying foreign non-individual investors or qualifying Non-resident Fund, the Trustee and the Manager will deduct/withhold tax at a reduced rate of 10% from the distributions. A Qualifying foreign non-individual investor refers to a non-resident non-individual unitholder or foreign fund who: (i) does not have any permanent establishment in Singapore (other than a fund manager in Singapore); or (ii) carries on any operation through a permanent establishment in Singapore (other than a fund manager in Singapore), where the funds used by that person to acquire the units in the Trust are not obtained from that operation. A Qualifying Unitholder is a unitholder who is: (i) an individual (including those who purchased units in the Trust through agent banks or Supplementary Retirement Scheme (“SRS”) operators which act as a nominee under the CPF Investment Scheme or the SRS respectively); (ii) a company incorporated and resident in Singapore; (iii) a Singapore branch of a foreign company; (iv) a body of persons (excluding companies or partnerships) incorporated or registered in Singapore, including charities registered under Charities Act 1994 or established by any written law, town councils, statutory boards, co-operative societies registered under the Co-operatives Societies Act 1979 or trade unions registered under the Trade Unions Act 1940; Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 213 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.15 Taxation (cont’d) Tax transparency (cont’d) (v) (vi) an international organisation that is exempt from tax on such distributions by reason of an order made under the International Organisations (Immunities and Privileges) Act 1948; or real estate investment trust exchange-traded funds (“REIT ETFs”) which have been accorded the tax transparency treatment. A qualifying Non-resident Fund is a non-resident fund that qualifies for tax exemption under Section 13D, 13U or 13V of the Income Tax Act 1947 and who: (i) does not have a permanent establishment in Singapore (other than a fund manager in Singapore); or (ii) carries on an operation through a permanent establishment in Singapore (other than a fund manager in Singapore), where the funds used by that qualifying fund to acquire units of the Trust are not obtained from that operation. 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. 3.16 Unitholders’ funds Unitholders’ funds represent the Unitholders’ residual interest in the Group’s net assets upon termination and are classified as equity. Incremental costs directly attributable to the issuance of Units are deducted against unitholders’ funds. 3.17 Government grants Government grants are recognised when there is reasonable assurance that the grant will be received and the Group will comply with the conditions associated with the grant. Government grants related to income are recognised in the statement of total return as ‘other income’ on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate. 3.18 Non-Current Assets and Liabilities Held for Sale Non-current assets and liabilities, that are highly probable to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets are remeasured in accordance with the applicable FRS. Thereafter, the assets are generally measured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in the statement of total return. Gains are not recognised in excess of any cumulative impairment loss. Property, plant and equipment once classified as held for sale are not depreciated. In addition, equity accounting of associate and joint ventures ceases once the investments are classified as held for sale. Notes to the Financial StatementsFor the year ended 30 September 2023 214 Frasers Centrepoint Trust Annual Report 2023 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.19 New standards and interpretations not adopted A number of new standards and amendments to FRSs are effective for annual periods beginning after 1 October 2022 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these financial statements. The following new standards and amendments to FRSs are not expected to have a material impact on the financial statements. • • • • • Amendments to FRS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction Amendments to FRS 1: Classification of Liabilities as Current or Non-current FRS 117 Insurance Contracts and Amendments to FRS 117 Insurance Contracts Amendments to FRS 1 and FRS Practice Statement 2: Disclosure of Accounting Policies Amendments to FRS 8: Definition of Accounting Estimates 4. INVESTMENT PROPERTIES Group 2023 $’000 2022 $’000 Trust 2023 $’000 2022 $’000 At beginning Capital expenditure Capitalisation of lease incentives, net of amortisation Net change in fair value of investment properties Reclassification to assets held for sale (Note 12) At end 5,516,000 17,916 5,506,500 4,850 2,460,000 2,626 2,441,500 3,361 1,687 9,897 (325,000) 5,220,500 1,906 2,744 – 5,516,000 (516) 14,890 (325,000) 2,152,000 1,049 14,090 – 2,460,000 The investment properties owned by the Group are set out in the Portfolio Statement on pages 190 to 191. Certain investment properties of the Group with an aggregate carrying value of $1,759 million (2022: $1,752 million) are pledged as securities to banks for banking facilities granted (Note 14). Direct operating expenses (including repairs and maintenance) arising from rental generating properties are disclosed on Note 18 to the financial statements. On 29 August 2023, the Trust entered into a sale and purchase agreement with an unrelated third party to divest Changi City Point for divestment consideration of $338.0 million and the purchaser has agreed to be a partner in CCCO LLP with effect from (and including) completion of the divestment. Accordingly, Changi City Point was reclassified to assets held for sale (Note 12) as at 30 September 2023. The purchaser had paid a deposit of $16.9 million, representing 5% of the divestment consideration. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 215 4. INVESTMENT PROPERTIES (CONT’D) Valuation processes Investment properties, including investment property reclassified as assets held for sale, 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 category of the investment properties 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, including investment property reclassified as assets held for sale, include market-corroborated capitalisation yields, discount rates and terminal yields. 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 2023. The fair value measurement for investment properties, including investment property reclassified as assets held for sale, for the Group and Trust have been categorised as Level 3 fair values based on the inputs to the valuation techniques used. Valuation techniques and significant unobservable inputs The following table shows the valuation techniques and significant unobservable inputs used in measuring level 3 fair values of investment properties, including investment property reclassified as assets held for sale: Valuation techniques Significant unobservable inputs Range of unobservable inputs Relationship of unobservable inputs to fair value Capitalisation approach Capitalisation rate Discounted cash flow analysis Discount rate 3.75% – 5.00% (2022: 3.75% – 5.00%) The higher the rates, the lower the fair value. 6.75% – 7.50% (2022: 6.75% – 7.50%) The higher the rates, the lower the fair value. Terminal yield 4.00% – 5.25% (2022: 4.00% – 5.25%) The higher the rates, the lower the fair value. Direct comparison method (1) Transacted prices $2,762 – $5,751 psf (2022: $2,329 – $4,362 psf) The higher the comparable values, the higher the fair value. (1) The direct comparison method was used in the valuation of Yishun 10 Retail Podium. The significant unobservable inputs correspond to: • • • discount rate, based on the risk-free rate for 10-year bonds issued by the Government of Singapore, adjusted for a risk premium to reflect the risk of investing in the asset class; terminal yield reflects the uncertainty, functional/economic obsolescence and the risk associated with the investment properties; and capitalisation rate which corresponds to a rate of return on investment properties based on the expected income that the property will generate. Notes to the Financial StatementsFor the year ended 30 September 2023 216 Frasers Centrepoint Trust Annual Report 2023 5. FIXED ASSETS Cost At beginning Disposals/write-offs At end Accumulated depreciation At beginning Charge for the year Disposals/write-offs At end Carrying amount At beginning At end 6. INVESTMENT IN SUBSIDIARIES Equipment, furniture and fittings, and others Group and Trust 2023 $’000 2022 $’000 312 (97) 215 186 43 (62) 167 126 48 316 (4) 312 141 49 (4) 186 175 126 Trust 2023 $’000 2022 $’000 Unquoted equity investments, at cost 2,004,045 1,447,600 Details of the significant subsidiaries are as follows: Name of subsidiary Place of incorporation/ business FCT MTN Pte. Ltd. (1) Singapore Principal activity Provision of treasury services FCT Holdings (Sigma) Pte. Ltd. (1) Singapore Investment holding Tiong Bahru Plaza LLP (1) , (2) Singapore Property investment Effective equity interes held by the Trust 2023 % 100 100 100 2022 % 100 100 100 Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 217 6. INVESTMENT IN SUBSIDIARIES (CONT’D) Name of subsidiary Place of incorporation/ business Principal activity White Sands LLP (1) , (2) Singapore Property investment Hougang Mall LLP (1) , (2) Singapore Property investment Tampines 1 LLP (1) , (2) Singapore Property investment Central Plaza LLP (1) , (2) Singapore Property investment Century Square LLP (1) , (2) Singapore Property investment Tiong Bahru Plaza Trust 1 (1) Singapore Investment holding Tiong Bahru Plaza Trust 2 (1) , (2) Singapore Investment holding White Sands Trust 1 (1) Singapore Investment holding White Sands Trust 2 (1) , (2) Singapore Investment holding Hougang Mall Trust 1 (1) Singapore Investment holding Hougang Mall Trust 2 (1) , (2) Singapore Investment holding Tampines 1 Trust 1 (1) Singapore Investment holding Tampines 1 Trust 2 (1) , (2) Singapore Investment holding Central Plaza Trust 1 (1) Singapore Investment holding Central Plaza Trust 2 (1) , (2) Singapore Investment holding Century Square Trust 1 (1) Singapore Investment holding Century Square Trust 2 (1) Singapore Investment holding The Management Corporation Strata Title Plan No. 2634 (1) , (2) Singapore Management and maintenance of property (1) Audited by KPMG LLP, Singapore. (2) Indirectly held by FCT. Effective equity interes held by the Trust 2023 % 2022 % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Notes to the Financial StatementsFor the year ended 30 September 2023 218 Frasers Centrepoint Trust Annual Report 2023 7. INVESTMENT IN ASSOCIATE Investment in associate Allowance for impairment Details of the associate are as follows: Name of associate Group Trust 2023 $’000 – – – 2022 $’000 59,543 (18,735) 40,808 2023 $’000 – – – 2022 $’000 74,584 (30,019) 44,565 Place of incorporation/ business Effective equity interest held by the Group and Trust 2022 2023 % % Hektar Real Estate Investment Trust (1) Malaysia – (2) 30.53 (1) Audited by BDO, Malaysia. (2) Reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). 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. On 24 December 2021 and 29 December 2021, H-REIT conducted a private placement exercise. Following the private placement, the Group’s interest in H-REIT decreased from 31.15% to 30.53%. Arising from the dilution of interest in H-REIT, the Group recognised a loss of $1,143,000 in 2022, of which a loss of $399,000 arose from the realisation of translation reserve. On 3 January 2023, H-REIT declared a distribution of RM6,864,000 (net of 10% withholding tax) to the Group for the fourth quarter ended 31 December 2022, based on 5.3 sen per unit. The Group had elected to reinvest the entire distribution under the IDRP based on the issue price of RM0.65 per unit. Following the IDRP, the Group received 10,559,928 new H-REIT units and the Group’s interest in H-REIT increased from 30.53% to 30.97%. On 22 September 2023, the Trust entered into a sale and purchase agreement with an unrelated third party in relation to the divestment of 28.85% interest in H-REIT, comprising of 143,898,398 units in H-REIT for a purchase consideration of approximately RM128,070,000 (equivalent to approximately $37,319,000). The purchase consideration was negotiated on a willing-buyer and willing-seller basis at RM0.89 per unit. On 4 October 2023, the Trust entered into a sale and purchase agreement with an unrelated third party in relation to the divestment of the remaining 2.12% interest in H-REIT, comprising 10,559,928 units in H-REIT for a purchase consideration of approximately RM6,864,000 (equivalent to approximately $2,000,000). The purchase consideration was negotiated on a willing-buyer and willing-seller basis at RM0.65 per unit. The Group and the Trust provided for an impairment loss of $3,982,000 (2022: $NIL) and $7,330,000 (2022: $1,929,000) respectively to write down the carrying amount of the investment in H-REIT to the estimated recoverable amount. The entire interest in H-REIT was reclassified to assets held for sale (Note 12) as at 30 September 2023 and the divestments are expected to be completed in the quarter ending 31 December 2023. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 219 7. INVESTMENT IN ASSOCIATE (CONT’D) As the results of H-REIT were not expected to be announced in sufficient time to be included in the Group’s results for the quarter ended 30 September 2022, the Group had estimated the results of H-REIT for the quarter ended 30 September 2022 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 results for H-REIT are equity accounted for at the Group level, net of 10% (2022: 10%) withholding tax in Malaysia. The fair value of H-REIT based on published price quotations was $23,620,000 as at 30 September 2022. The following table summarises the financial information of the Group’s associate based on their respective unaudited management accounts prepared in accordance with FRS, modified for fair value adjustments on acquisition and differences in the Group’s accounting policies, if any. Assets and liabilities (3) Non-current assets Current assets Total assets Current liabilities Non-current liabilities Total liabilities Results (4) Revenue Expenses Net change in fair value of investment properties Tax credit Loss after taxation 2022 $’000 367,073 13,017 380,090 21,679 183,102 204,781 33,193 (25,337) (13,931) 956 (5,119) (3) The “Assets and liabilities” was based on the latest available unaudited management accounts as at 30 June 2022. (4) The “Results” was based on the latest available unaudited management accounts for the six months ended 30 June 2022 and six-month results from the audited financial statements for the year ended 31 December 2021. As at 30 September 2022, the associate’s property portfolio comprised Subang Parade in Selangor, Mahkota Parade in Melaka, Wetex Parade and Segamat Central in Johor, Central Square and Kulim Central in Kedah. Group’s interest in associate At beginning Group’s share of: – Profit/(loss) after taxation Dividends received during the year Addition in relation to IDRP Loss from the dilution of interest in associate Impairment loss Translation difference Reclassification to assets held for sale (Note 12) At end 2023 $’000 2022 $’000 40,808 46,494 5,862 (3,187) 2,084 – (3,982) (2,266) (39,319) – (1,096) (2,130) – (744) – (1,716) – 40,808 Notes to the Financial StatementsFor the year ended 30 September 2023 220 Frasers Centrepoint Trust Annual Report 2023 8. INVESTMENT IN JOINT VENTURES Investment in joint ventures Allowance for impairment Details of the joint ventures are as follows: Name of joint ventures Changi City Carpark Operations LLP (1) Sapphire Star Trust (2) FC Retail Trustee Pte. Ltd. (2) NEX Partners Trust (2) Frasers Property Coral Pte. Ltd. (2) Joint venture held by NEX Partners Trust Group 2023 $’000 2022 $’000 Trust 2023 $’000 2022 $’000 731,898 (1,132) 730,766 313,473 (1,132) 312,341 695,083 (1,132) 693,951 288,498 (1,132) 287,366 Place of incorporation/ business Singapore Singapore Singapore Singapore Singapore Effective equity interest held by the Group and Trust 2023 % – (4) 50.00 50.00 51.00 51.00 2022 % 43.68 40.00 40.00 – – Gold Ridge Pte. Ltd. (3) Singapore 25.50 – (1) Audited by P G Wee Partnership LLP. (2) Audited by KPMG LLP, Singapore. (3) Audited by Deloitte & Touche LLP, Singapore. (4) Reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). CCCO LLP is incorporated in Singapore and is a strategic venture in the management and operation of car park in Changi City Point. On 29 August 2023, the Trust entered into a sale and purchase agreement with an unrelated third party to divest Changi City Point for divestment consideration of $338.0 million and the purchaser has agreed to be a partner in CCCO LLP with effect from (and including) completion of the divestment. Accordingly, the investment in CCCO LLP was reclassified to assets held for sale (Note 12) as at 30 September 2023. The Group holds an interest and voting rights in the following joint ventures: (i) SST, a private trust that owns Waterway Point, a suburban shopping mall located in Punggol and (ii) FC Retail Trustee Pte. Ltd. (“FCRT”), which is the trustee-manager of SST. The Group jointly controls the joint ventures with another joint venture partner and unanimous consent is required for all decisions over the relevant activities. On 12 September 2022, the Trust entered into a conditional unit sale and purchase agreement with Sekisui House, Ltd. (the “Vendor”) to acquire from the Vendor 10.00% of the total issued units of SST, comprising 500,001 ordinary units and 56,904,785 redeemable preference units in SST; and a conditional share sale and purchase agreement with the Vendor to acquire from the Vendor 10.00% of the issued share capital of FCRT. On 8 February 2023, the Group completed its acquisition of an additional 10.00% interest in SST and FCRT with a total acquisition outlay (including transaction costs and completion adjustments) of approximately $74.4 million. Subsequent to the acquisition, the Group’s interest in SST and FCRT increased from 40.00% to 50.00%. On 26 January 2023, the Trust and FCL Emerald (1) Pte. Ltd. (“FCL Emerald”), a wholly-owned subsidiary of FPL, established NEX Partners Trust (“NP Trust”). The Trust and FCL Emerald respectively hold 51.00% and 49.00% interest in each of NP Trust and Frasers Property Coral Pte. Ltd. (“FP Coral”), the trustee-manager of NP Trust. The Group jointly controls NP Trust and FP Coral with FCL Emerald and unanimous consent is required for all decisions over the relevant activities. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 221 8. INVESTMENT IN JOINT VENTURES (CONT’D) On 26 January 2023, FP Coral, in its capacity as the trustee-manager of NP Trust, entered into a conditional sale and purchase agreement with Mercatus Tres Pte. Ltd. to purchase 168,764,576 ordinary shares, representing 50.00% of the total share capital of GRPL, which holds the retail mall known as “NEX” at 23 Serangoon Central, Singapore 556083. The transaction was completed on 6 February 2023 and as at 30 September 2023, there is a total acquisition outlay (including transaction costs and completion adjustments) of approximately $332.2 million. Subsequent to the transaction, the Group has an effective interest of 25.50% in GRPL. No disclosure of fair value is made for the joint ventures as they are not quoted on any market. The following table summarises the financial information of the Group’s material joint ventures based on their respective unaudited management accounts prepared in accordance with FRS, modified for fair value adjustments on acquisition and differences in the Group’s accounting policies, if any. The table also analyses, in aggregate, the carrying amount and share of profit and OCI of the remaining individually immaterial joint ventures. 2023 Results (1) Revenue Expenses (a) Share of results of joint venture Net change in fair value of investment properties Tax expense Profit after taxation (a) Includes: – Depreciation – Finance income – Finance costs Assets and liabilities (2) Non-current assets Current assets (b) Total assets Current liabilities Non-current liabilities (c) Total liabilities (b) Includes cash and cash equivalents (c) Includes non-current bank borrowings Group’s interest in joint ventures At beginning Group’s share of: – Profit after taxation (3) – Other comprehensive income Total comprehensive income Additions during the year Reclassification to assets held for sale (Note 12) Dividends received during the year At end SST $’000 NP Trust $’000 Immaterial joint ventures $’000 Total $’000 80,991 (34,609) – 2,647 (3,577) 45,452 (6) 1,157 (17,001) – (543) 47,107 – – 46,564 – – – 1,343,914 43,180 1,387,094 661,304 778 662,082 29,352 590,106 619,458 40,579 572,247 312,092 26,967 (4,019) 22,948 74,369 – (21,403) 388,006 436 – 436 662 – – 249 312,341 23,747 (1,182) 22,565 332,208 – (12,036) 342,737 471 – 471 9 (117) (589) 23 51,185 (5,201) 45,984 406,586 (117) (34,028) 730,766 (1) The “Results” are based on the unaudited management accounts for the year ended 30 September 2023 for SST and period from 26 January 2023 to 30 September 2023 for NP Trust. (2) The “Assets and liabilities” are based on the unaudited management accounts as at 30 September 2023. (3) Includes a one-off gain of $13,581,000 recognised upon the completion of the acquisition of an additional 10.00% interest in SST and effective 25.50% interest in GRPL. Notes to the Financial StatementsFor the year ended 30 September 2023 222 Frasers Centrepoint Trust Annual Report 2023 8. INVESTMENT IN JOINT VENTURES (CONT’D) 2022 Results (4) Revenue Expenses (a) Net change in fair value of investment properties Tax expense Profit after taxation (a) Includes: – Depreciation – Finance income – Finance costs Assets and liabilities (5) Non-current assets Current assets (b) Total assets Current liabilities Non-current liabilities (c) Total liabilities (b) Includes cash and cash equivalents (c) Includes non-current bank borrowings Immaterial joint ventures $’000 SST $’000 Total $’000 78,158 (28,231) 10,669 (4,363) 56,233 (7) 244 (10,571) 1,349,844 46,897 1,396,741 43,664 579,428 623,092 44,791 571,961 Group’s interest in joint ventures At beginning Group’s share of: – Profit after taxation – Other comprehensive income Total comprehensive income Adjustment of consideration paid for investment in joint venture Dividends received during the year At end 294,236 163 294,399 24,239 13,099 37,338 (70) (19,412) 312,092 360 – 360 – (274) 249 24,599 13,099 37,698 (70) (19,686) 312,341 (4) The “Results” were based on the unaudited management accounts for the year ended 30 September 2022. (5) The “Assets and liabilities” were based on the unaudited management accounts as at 30 September 2022. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 223 9. DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial assets Interest rate swaps Classified as: – Current – Non-current Derivative financial liabilities Interest rate swaps Cross-currency interest rate swaps Classified as: – Current – Non-current Derivative financial instruments as a percentage of net assets (a) Interest rate swaps used for hedging Group 2023 $’000 2022 $’000 Trust 2023 $’000 2022 $’000 18,470 25,071 18,596 25,071 3,533 14,937 18,470 3,331 21,740 25,071 126 9,091 9,217 – 9,217 9,217 – – – – – – 3,533 15,063 18,596 6,925 9,091 16,016 3,533 12,483 16,016 3,331 21,740 25,071 14,086 – 14,086 2,897 11,189 14,086 0.23% 0.63% 0.07% 0.29% Interest rate swaps are used by the Group to hedge its exposure to interest rate risk associated with movements in interest rates on the borrowings of the Group. The Trust has entered into interest rate swap arrangements on behalf of entities within the Group. The Group and the Trust have interest rate swap arrangements in place for the following amounts: Maturing: Within one year Between one to five years Group Notional amount 2023 $’000 2022 $’000 Trust Notional amount 2023 $’000 2022 $’000 220,000 594,000 814,000 276,000 444,000 720,000 440,000 804,000 1,244,000 467,000 704,000 1,171,000 As at 30 September 2023, the fixed interest rates of the outstanding interest rate swaps range between 1.456% to 3.740% (2022: 0.463% to 2.420%) per annum. Notes to the Financial StatementsFor the year ended 30 September 2023 224 Frasers Centrepoint Trust Annual Report 2023 9. DERIVATIVE FINANCIAL INSTRUMENTS (CONT’D) (b) Cross-currency interest rate swaps used for hedging Cross-currency interest rate swaps are used by the Group to hedge its exposure to foreign currency and interest rate risks on borrowings denominated in Australian dollars. The Group and the Trust have cross-currency interest rate swap arrangements in place for the following amounts: Maturing: Between one to five years Group and Trust Notional amount 2023 $’000 2022 $’000 209,191 209,191 – – The fair value of the interest rate swaps and cross-currency interest rate swaps is determined using the valuation technique as disclosed in Note 25(b). 10. TRADE AND OTHER RECEIVABLES Trade receivables Allowance for doubtful receivables Net trade receivables Deposits Prepayments Amounts due from subsidiaries (non-trade) Amounts due from related parties (non-trade) Other receivables Group Trust 2023 $’000 5,474 (143) 5,331 72 612 – 53 2,688 8,756 2022 $’000 6,232 (154) 6,078 695 175 – 35 1,874 8,857 2023 $’000 2,327 (79) 2,248 41 22 1,752 52 1,871 5,986 2022 $’000 3,215 (111) 3,104 33 14 354,155 33 1,605 358,944 Trade receivables are recognised at their original invoiced amounts which represent their fair values on initial recognition. Non-trade amounts due from subsidiaries and related parties are unsecured, interest-free and repayable on demand. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 225 11. CASH AND CASH EQUIVALENTS Cash at bank and on hand Fixed deposits Group Trust 2023 $’000 29,206 3,000 32,206 2022 $’000 38,165 – 38,165 2023 $’000 9,766 3,000 12,766 2022 $’000 16,613 – 16,613 The interest rates of the fixed deposits for the Group and Trust range between 3.00% to 3.90% (2022: NIL%) per annum. 12. ASSETS/LIABILITIES HELD FOR SALE Investment property (Note 4) Investment in associate (Note 7) Investment in joint venture (Note 8) Assets held for sale Security deposits Liabilities held for sale 13. TRADE AND OTHER PAYABLES Trade payables and accrued operating expenses Amounts due to related parties Amounts due to subsidiaries (non-trade) Interest payable Deposit received for assets held for sale Other payables GST payables Advance rent received 2023 $’000 325,000 39,319 117 364,436 6,189 6,189 2023 $’000 43,170 19,022 – 9,466 16,900 293 88,851 3,927 2,472 95,250 Group Trust 2022 $’000 – – – – – – 2023 $’000 325,000 39,319 1 364,320 6,189 6,189 2022 $’000 – – – – – – Group Trust 2022 $’000 35,852 20,520 – 7,685 – 122 64,179 4,997 1,407 70,583 2023 $’000 21,636 15,895 164,208 4,079 16,900 129 222,847 1,799 365 225,011 2022 $’000 20,212 18,169 72,100 1,098 – 27 111,606 2,271 327 114,204 Included in trade payables and accrued operating expenses is an amount due to the Trustee of $221,000 (2022: $240,000). Included in amounts due to related parties are amounts due to the Manager of $13,135,000 (2022: $15,047,000) and the Property Manager of $5,646,000 (2022: $5,266,000) respectively. The amounts due to related parties are unsecured, interest free and repayable on demand. Notes to the Financial StatementsFor the year ended 30 September 2023 226 Frasers Centrepoint Trust Annual Report 2023 14. INTEREST-BEARING BORROWINGS Current liabilities Bank loan (secured) Bank loan (unsecured) Medium Term Note (unsecured) Loan from subsidiary (unsecured) Less: Unamortised transaction costs Non-current liabilities Bank loans (secured) Bank loans (unsecured) Medium Term Note (unsecured) Loan from subsidiary (unsecured) Less: Unamortised transaction costs Group 2023 $’000 2022 $’000 Trust 2023 $’000 2022 $’000 353,500 – – – (17) 353,483 – 191,000 200,000 – (332) 390,668 – – – – – – 443,500 1,334,256 70,000 – (5,831) 1,841,925 794,000 560,000 70,000 – (4,542) 1,419,458 – 1,071,256 – 70,000 (4,029) 1,137,227 – – – 200,000 (49) 199,951 – 389,000 – 70,000 (1,323) 457,677 As at 30 September 2023, secured bank loans and certain bank facilities are secured on the following: • • • • a mortgage over Tampines 1 (“T1”), Century Square (“CS”) and White Sands (“WS”) (2022: T1, CS and WS); an assignment of the rights, benefits, title and interest of the respective entities in, under and arising out of the insurances effected in respect of T1, CS and WS (2022: T1, CS and WS); an assignment and charge of the rights, benefits, title and interest of the respective entities 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 T1, CS and WS (2022: T1, CS and WS); and a first fixed and floating charge over all present and future assets of the respective entities in connection with T1, CS and WS (2022: T1, CS and WS). Undrawn Revolving Credit Facilities as at 30 September 2023 amounted to $488.4 million (2022: $616.9 million). Medium Term Notes (unsecured) Programme On 7 May 2009, the Group through its subsidiary, FCT MTN Pte. Ltd. (“FCT MTN”), established a $500 million 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 was increased from $500 million to $1 billion. 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. As at 30 September 2023, $70 million (2022: $70 million) of Fixed Rate Notes issued by the Group under the FCT MTN Programme mature in November 2024 and bear a fixed interest rate of 2.770% per annum payable semi-annually in arrears. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 227 14. INTEREST-BEARING BORROWINGS (CONT’D) Multicurrency Debt (unsecured) Issuance Programme On 8 February 2017, the Group established a $3 billion Multicurrency Debt Issuance Programme (“Debt Issuance Programme”). Under the Debt Issuance Programme, the Issuers may, subject to compliance with all relevant laws, regulations and directives from time to time, issue notes (the ”Notes”) and perpetual securities (the “Perpetual Securities”, and together with the Notes the “Securities”) in Singapore dollars or any other currency as may be agreed between the relevant dealers of the Programme and the Issuers. Each series or tranche of Notes may be issued in various amounts and tenors, and may bear interest at fixed, floating, hybrid or variable rates as may be agreed between the relevant dealers of the Debt Issuance Programme and the relevant Issuer or may not bear interest. The Notes and the coupons of all series shall constitute direct, unconditional, unsubordinated and unsecured obligations of the relevant Issuer and shall at all times rank 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 the relevant Issuer. As at 30 September 2023, there are no outstanding (2022: $200 million) Fixed Rate Note issued under this programme. Terms and debt repayment schedule Currency Year of maturity Group Face value $’000 Carrying value $’000 Trust Face value $’000 Carrying value $’000 2023 Bank loans Bank loans Medium Term Note Loan from subsidiary 2022 Bank loans Medium Term Notes Loans from subsidiary SGD 2023 – 2028 2026 A$ 2024 SGD 2024 SGD 1,922,065 209,191 70,000 – 2,201,256 1,916,755 208,678 69,975 – 2,195,408 862,065 209,191 – 70,000 1,141,256 858,574 208,678 – 69,975 1,137,227 SGD 2023 – 2027 SGD 2023 – 2024 SGD 2023 – 2024 1,545,000 270,000 – 1,815,000 1,540,222 269,904 – 1,810,126 389,000 – 270,000 659,000 387,724 – 269,904 657,628 Notes to the Financial StatementsFor the year ended 30 September 2023 228 Frasers Centrepoint Trust Annual Report 2023 14. INTEREST-BEARING BORROWINGS (CONT’D) Reconciliation of movements of liabilities to cash flows arising from financing activities Liabilities Interest- bearing borrowings $’000 Interest payable (Note 13) $’000 Accrued transaction costs $’000 Derivative financial instruments held to hedge borrowings Derivative liabilities/ (assets) (Note 9) $’000 Total $’000 1,808,916 7,004 1,759 3,136 1,820,815 387,000 (387,000) – (1,229) (1,229) – – 2,439 2,439 1,810,126 – – (43,712) – (43,712) – 44,393 – 44,393 7,685 1,810,126 7,685 1,146,998 (749,933) – – (3,761) 393,304 – – 2,787 (10,809) (8,022) 2,195,408 – – (76,474) – – (76,474) – 78,255 – – 78,255 9,466 – – – (761) (761) – – – – 998 998 – – – – (706) (706) – – – – – 292 – – – – – (28,207) – – – (25,071) 387,000 (387,000) (43,712) (1,990) (45,702) (28,207) 44,393 2,439 46,832 1,793,738 (25,071) 1,793,738 – – – 174 – 174 15,644 1,146,998 (749,933) (76,474) 174 (4,467) 316,298 15,644 – – – – (9,253) 78,255 2,787 (10,809) 70,233 2,195,913 Group At 1 October 2021 Changes from financing cash flows Proceeds from borrowings Repayment of borrowings Interest expense paid Payment of transaction costs Total changes from financing cash flows Change in fair value Other changes Interest expense (Note 20) Amortisation of transaction costs (Note 20) Total other changes At 30 September 2022 At 1 October 2022 Changes from financing cash flows Proceeds from borrowings Repayment of borrowings Interest expense paid Settlement of derivative financial instrument Payment of transaction costs Total changes from financing cash flows Change in fair value Other changes Interest expense (Note 20) Amortisation of transaction costs (Note 20) Effect of changes in foreign exchange rates Total other changes At 30 September 2023 Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 229 15. UNITS IN ISSUE Units in issue At beginning Issue of Units – issued as satisfaction of asset management fees – issued as satisfaction of acquisition fee At end Units to be issued – asset management fees payable in Units Total issued and issuable Units at end Group and Trust 2023 No. of Units ’000 2022 No. of Units ’000 1,702,057 1,699,268 3,414 2,988 1,708,459 2,789 – 1,702,057 3,580 1,712,039 1,708 1,703,765 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. Notes to the Financial StatementsFor the year ended 30 September 2023 230 Frasers Centrepoint Trust Annual Report 2023 16. NET ASSET VALUE/NET TANGIBLE ASSET PER UNIT Group Trust 2023 2022 2023 2022 Net asset value/Net tangible asset per Unit is based on: Net assets/Net tangible assets ($’000) 3,973,235 3,964,077 3,832,744 3,814,974 Total issued and issuable Units (‘000) (Note 15) 1,712,039 1,703,765 1,712,039 1,703,765 17. GROSS REVENUE Gross rental income Gross turnover rental income Carpark income Others 18. PROPERTY EXPENSES Property tax Maintenance and utilities Property management fees Property management reimbursements (1) Marketing Net allowance/(written back) for doubtful receivables Bad debts recovered Depreciation of fixed assets Fixed assets written off Others 2023 $’000 331,255 18,349 7,281 12,838 369,723 Group 2022 $’000 325,626 17,560 6,167 7,578 356,931 2023 $’000 29,535 31,544 14,193 16,842 7,381 51 (7) 43 35 4,520 104,137 Group 2022 $’000 33,430 27,537 13,763 12,167 7,707 (656) (3) 49 – 4,340 98,334 (1) Relates to reimbursement of staff costs paid/payable under the respective property management agreements to Frasers Property Retail Management Pte. Ltd. 19. OTHER INCOME Other income includes an one-off grant income of $3,815,000 (2022: $NIL) in relation to property tax rebates and cash grant received from IRAS. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 231 20. FINANCE COSTS Interest expense Amortisation of transaction costs 21. ASSET MANAGEMENT FEES 2023 $’000 78,255 2,787 81,042 Group 2022 $’000 44,393 2,439 46,832 Asset management fees comprise $19,906,000 (2022: $18,479,000) of base fee and $15,562,000 (2022: $14,129,000) of performance fee computed in accordance with the fee structure as disclosed in Note 1.2 to the financial statements. An aggregate of 5,286,207 (2022: 2,906,185) Units were issued or are issuable to the Manager as satisfaction of the asset management fees payable for the year ended 30 September 2023. 22. TAXATION Current tax expense Current year Under/(over) provision in prior years Deferred tax expense Reversal of temporary differences (1) Total taxation Reconciliation of effective tax Total return before tax Income tax using Singapore tax rate of 17% (2022: 17%) Effects of different tax rates in foreign jurisdictions Expenses not deductible Income not subject to tax Reversal of temporary differences Tax transparency Under/(over) provision in prior years * Amount less than $1,000. (1) Reversal of temporary differences in relation to investment properties. Group 2022 $’000 906 (358) 548 (6,640) (6,640) 2023 $’000 * 250 250 – – 250 (6,092) 212,204 201,187 36,075 2 4,093 (8,380) – (31,790) 250 250 34,202 9 2,499 (4,879) (6,640) (30,925) (358) (6,092) Notes to the Financial StatementsFor the year ended 30 September 2023 232 Frasers Centrepoint Trust Annual Report 2023 23. EARNINGS PER UNIT (i) Basic earnings per Unit The calculation of basic earnings per Unit is based on the weighted average number of Units during the financial year and total return for the year. Total return for the year ($’000) Weighted average number of Units (’000) (ii) Diluted earnings per Unit Group 2023 2022 211,954 207,279 1,706,420 1,701,468 In calculating diluted earnings per Unit, the total return for the year and weighted average number of Units outstanding are adjusted for the effect of all dilutive potential units, as set out below: Total return for the year ($’000) Weighted average number of Units arriving at basic earnings per Unit (‘000) Effect of Units to be issued as payment of asset management fees in Units (‘000) Weighted average number of Units (diluted) (’000) 24. SIGNIFICANT RELATED PARTY TRANSACTIONS Group 2023 2022 211,954 207,279 1,706,420 1,701,468 4,506 1,710,926 2,298 1,703,766 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: Related Corporations Property management fees, project management fee, service fees and reimbursement of expenses paid/payable to the Property Manager (1) Acquisition fees paid in Units to the Manager Reimbursement of expenses paid/payable to the Manager Adjustment of consideration paid for investment in joint venture from a related company Reimbursement of expenses/capital expenditure paid/payable to related companies Recovery of expenses paid on behalf of a related company Income from related companies Purchase of services from a related company Reimbursement of carpark income received on behalf of a related company Car park expenses paid/payable to a joint venture (1) In accordance with service agreements in relation to management of the Trust and its property operations. Group 2023 $’000 2022 $’000 43,323 6,611 54 – 1,433 (191) (523) 537 2,270 44 36,041 – 122 (70) 210 (140) (356) 418 1,830 40 Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 233 25. FAIR VALUE OF ASSETS AND LIABILITIES (a) Assets and liabilities measured at fair value Group At 30 September 2023 Financial assets Interest rate swaps Financial liabilities Interest rate swaps Cross-currency interest rate swaps At 30 September 2022 Financial assets Interest rate swaps Trust At 30 September 2023 Financial assets Interest rate swaps Financial liabilities Interest rate swaps Cross-currency interest rate swaps At 30 September 2022 Financial assets Interest rate swaps Financial liabilities Interest rate swaps Level 1 $’000 Level 2 $’000 Level 3 $’000 Total $’000 – – – – – – – – – 18,470 126 9,091 25,071 18,596 6,925 9,091 25,071 14,086 – – – – – – – – – 18,470 126 9,091 25,071 18,596 6,925 9,091 25,071 14,086 During the years ended 30 September 2023 and 30 September 2022, there have been no transfers between the respective levels. (b) Level 2 fair value measurements Interest rate swap contracts and cross-currency interest rate swaps are valued using present value calculations by applying market observable inputs existing at each reporting date into swap models. The models incorporate various inputs including interest rate curves and foreign exchange spot rates. Notes to the Financial StatementsFor the year ended 30 September 2023 234 Frasers Centrepoint Trust Annual Report 2023 25. FAIR VALUE OF ASSETS AND LIABILITIES (CONT’D) (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 reporting date: Group Financial liabilities Interest-bearing borrowings (non-current) Security deposits (non-current) Trust Financial liabilities Interest-bearing borrowings (non-current) Security deposits (non-current) 2023 2022 Carrying amount $’000 Fair value $’000 Carrying amount $’000 Fair value $’000 1,841,925 46,801 1,888,726 1,838,393 42,709 1,881,102 1,419,458 50,472 1,469,930 1,414,883 46,809 1,461,692 1,137,227 17,977 1,155,204 1,133,695 16,538 1,150,233 457,677 20,165 477,842 453,598 18,775 472,373 (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, trade and other payables, current portion of security deposits and current portion of interest-bearing borrowings) 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 reporting date. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 235 26. 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 45.0% of the fund’s deposited property. The aggregate leverage of a property fund may exceed 45.0% of the fund’s deposited property (up to a maximum of 50.0%) only if the property fund has a minimum adjusted interest coverage ratio of 2.5 times after taking into account the interest payment obligations arising from the new borrowings. As at 30 September 2023, the Group’s Aggregate Leverage stood at 39.3% (2022: 33.0%) of its deposited property, which is within the limit set by the Property Fund Guidelines and externally imposed capital requirements. The Trust has affirmed its corporate ratings of “BBB” from S&P Global Ratings and “Baa2” from Moody’s Investors Service. (b) Financial risk management objectives and policies Exposure to credit, foreign currency, 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 tenants and monitors their balances on an ongoing basis. Credit evaluations are performed by the Manager before lease agreements are entered into with tenants. Credit risk is also mitigated by the security deposits held for each of the tenants. In addition, receivables are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. Trade receivables The Manager has established an allowance account for doubtful receivables 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 statements of financial position. At the reporting date, approximately 14.9% (2022: 26.2%) of the Group’s trade receivables were due from 5 tenants which are reputable companies located in Singapore. Notes to the Financial StatementsFor the year ended 30 September 2023 236 Frasers Centrepoint Trust Annual Report 2023 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (i) Credit risk (cont’d) Expected credit loss assessment for individual tenants The Group uses an allowance matrix to measure the ECLs of trade receivables from individual tenants, which comprise a very large number of tenants. Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through successive stages of delinquency to write-off based on actual credit loss experience over the last three years. The following table provides information about the exposure to credit risk and ECLs for trade receivables at the reporting date: Group Less than 30 days 31 to 60 days 61 to 90 days More than 90 days Trust Less than 30 days 31 to 60 days 61 to 90 days More than 90 days Gross carrying amount $’000 2023 Allowance for doubtful receivables $’000 Gross carrying amount $’000 2022 Allowance for doubtful receivables $’000 4,764 172 24 514 5,474 2,178 55 11 83 2,327 (52) (6) (5) (80) (143) (26) (6) (3) (44) (79) 5,075 362 132 663 6,232 2,485 246 127 357 3,215 (15) – – (139) (154) (11) – – (100) (111) The movement in the allowance for doubtful receivables during the financial year was as follows: At beginning Net allowance/(written back) for doubtful receivables Write-off of trade receivables against allowance At end Group Trust 2023 $’000 154 51 (62) 143 2022 $’000 942 (656) (132) 154 2023 $’000 111 (17) (15) 79 2022 $’000 751 (640) – 111 Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant difficulties and have defaulted on payments. The allowance for doubtful receivables 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. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 237 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (i) Credit risk (cont’d) Deposits and other receivables Impairment on these balances has been measured on the 12-month expected loss basis which reflects the short maturity and low credit risks of the exposure. The amount of the allowance on these balances is insignificant. Amounts due from related parties and subsidiaries Outstanding balances with related parties are unsecured and repayable on demand. ECL is assessed from estimated cash flows recoverable from the related parties and subsidiaries based on the review of their financial strength at the reporting date. There is no allowance for doubtful receivables arising from these outstanding balances as the ECL is not material. Cash and cash equivalents Cash is placed with financial institutions which are regulated. The maximum exposure to credit risk is represented by the carrying value on the statements of financial position. Impairment on cash and cash equivalents has been measured on the 12-month expected loss basis and reflects the short maturities of the exposure. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties. The amount of the allowance on cash and cash equivalents was negligible. (ii) Currency risk The Group’s foreign currency risk relates mainly to the borrowings, that are denominated in Australian dollars (“A$”). The Manager monitors the Group’s foreign currency exposure on an ongoing basis and limits its exposure to fluctuations in foreign currency exchange rates by using derivative financial instruments or other suitable financial products, where appropriate. The Group uses cross-currency interest rate swaps to hedge its currency risk. The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency and amount of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item using the critical terms match method and hypothetical derivative method. During the financial year, the Group has drawn down borrowings of A$238.1 million (equivalent to $209.2 million) (2022: Nil) and entered into cross-currency interest rate swaps to fully hedge against the foreign currency risk, and accordingly, there is no net currency exposure arising from these borrowings. Notes to the Financial StatementsFor the year ended 30 September 2023 238 Frasers Centrepoint Trust Annual Report 2023 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk is in respect of debt obligations with financial institutions. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate debts with varying tenors. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. To manage this mix in a cost-efficient manner, the Group uses hedging instruments such as interest rate swaps and and cross-currency interest rate swaps to minimise its exposure to interest rate volatility. The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, tenors, repricing dates and maturities and the notional or par amounts. The Group assesses whether the derivative designated in each hedge relationship is expected to be effective in offsetting changes in cash flows of the hedged item using the critical terms method, dollar offset method or regression method. Hedge ineffectiveness may occur due to changes in the critical terms of either the interest rate swaps or borrowings. Managing interest rate benchmark reform and associated risks A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (“IBORs”) with alternative nearly risk-free rates (referred to as “interest rate benchmark reform”). The Group had exposures to IBORs (i.e. SOR) on its financial instruments that will be replaced or reformed as part of these market-wide initiatives. The Group monitors and manages the transition to alternative rates. The Group evaluates the extent to which contracts reference SOR cash flows, whether such contracts will need to be amended as a result of interest rate benchmark reform and how to manage communication about interest rate benchmark reform with counterparties. The Group monitors the progress of transition from SOR to SORA by reviewing the total amounts of contracts that have yet to transition to SORA and the amounts of such contracts that include an appropriate fallback clause. The Group considers that a contract is not yet transitioned to SORA when interest under the contract is indexed to SOR, even if it includes a fallback clause that deals with the cessation of the existing SOR (referred to as an “unreformed contract”). Non-derivative financial liabilities Historically, the Group’s IBOR exposures to non-derivative financial liabilities included secured and unsecured bank loans indexed to SOR. As at 30 September 2023, the Group is no longer exposed to any interest rate risk arising from the IBOR reform. As at 30 September 2022, the carrying amounts of unreformed non-derivative financial liabilities of the Group and Trust were $372,364,000 and $118,782,000, respectively. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 239 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Interest rate risk (cont’d) Derivatives The Group holds interest rate swaps and cross-currency interest rate swaps for risk management purposes that are designated in cash flow hedging relationships. The Group’s derivative instruments are governed by contracts based on the International Swaps and Derivatives Association (“ISDA”)’s master agreements. As at 30 September 2023, the Group has completed the transition with respective counterparties of the contracts for all derivative financial instruments and is no longer exposed to any interest rate risk arising from the IBOR reform. As at 30 September 2022, the notional amounts of unreformed derivative financial instruments that included appropriate fallback language of the Group and Trust were $310,000,000 and $119,000,000 respectively. Hedge accounting The Group’s hedged items and hedging instruments at the reporting date are indexed to SORA. Hedging relationships impacted by interest rate benchmark reform may experience ineffectiveness attributable to market participants’ expectations of when the shift from the existing IBOR benchmark rate to an alternative benchmark interest rate will occur for the relevant hedged items and hedging instruments. During the financial year, the Group has fully completed the IBOR reform transition for the remaining IBOR linked instruments. The Group has applied the Phase 2 amendments relief when the relief criterions are met: (i) (ii) The Group updates the effective interest rate of the financial liability carried at amortised cost with no immediate gain or loss to be recognised. The Group amends the formal hedge documentation by the end of reporting period for changes which are required by IBOR reform to the hedged risk, hedged items and hedging instrument. Amendments to the formal hedge documentation do not constitute discontinuation of the hedging relationship. For the year ended 30 September 2023, the IBOR reform transition of the affected financial liabilities at amortised cost and interest rate swaps had no material ineffectiveness on the consolidated financial statements of the Group. Given that most of the critical terms were matched, the changes in fair value of the hedged risk approximates the change in fair value of the hedging instruments. Therefore, no material ineffectiveness was recognised. Sensitivity analysis for interest rate risk It is estimated that every 100 basis points increase in interest rate at the reporting date, with all other variables held constant, would increase the Group’s Unitholders’ funds by approximately $22,237,000 (2022: $12,924,000) and every 100 basis points decrease in interest rate, with all other variables held constant, would decrease the Group’s Unitholders’ funds by approximately $22,796,000 (2022: $13,341,000), arising mainly as a result of change in the fair value of interest rate swap instruments. On outstanding borrowings not covered by derivative financial instruments at the reporting date, it is estimated that every 100 basis points increase in interest rate, with all other variables held constant, would decrease the Group’s total return for the year by approximately $8,181,000 (2022: $5,300,000) and every 100 basis points decrease in interest rate, with all other variables held constant, would increase the Group’s total return for the year by approximately $8,181,000 (2022: $5,300,000), arising mainly as a result of higher/lower 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. Notes to the Financial StatementsFor the year ended 30 September 2023 240 Frasers Centrepoint Trust Annual Report 2023 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Interest rate risk (cont’d) Hedge accounting (cont’d) The amounts relating to items designated as hedging instruments were as follows. There are no hedge ineffectiveness recognised during the year. 2023 During the year – 2023 Line item in the statement of financial position where the hedging instrument is included $’000 Changes in fair value of the hedging instrument recognised in OCI $’000 Net change in fair value reclassified from hedging reserve to statement of total return $’000 Line item in statement of total return affected by the reclassification $’000 Notional amount $’000 Carrying amount – assets $’000 Carrying amount – liabilities $’000 Group Cash flow hedges Interest rate risk and foreign currency risk – Cross- currency interest rate swaps to hedge foreign currency floating rate borrowings Interest rate risk – Interest rate swaps to hedge floating rate borrowings 209,191(1) – (9,091) 814,000 18,470 (126) Derivative financial instruments Derivative financial instruments (9,091) 10,809 Foreign exchange loss (6,727) – – (1) The Group entered into cross-currency interest rate swaps to swap A$238.1 million floating rate borrowings to $220.0 million fixed rate borrowings. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 241 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Interest rate risk (cont’d) Hedge accounting (cont’d) 2022 During the year – 2022 Line item in the statement of financial position where the hedging instrument is included $’000 Changes in fair value of the hedging instrument recognised in OCI $’000 Net change in fair value reclassified from hedging reserve to statement of total return $’000 Line item in statement of total return affected by the reclassification $’000 Notional amount $’000 Carrying amount – assets $’000 Carrying amount – liabilities $’000 Group Cash flow hedges Interest rate risk – Interest rate swaps to hedge floating rate borrowings 720,000 25,071 – Derivative financial instruments 27,679 – – Notes to the Financial StatementsFor the year ended 30 September 2023 242 Frasers Centrepoint Trust Annual Report 2023 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Interest rate risk (cont’d) Hedge accounting (cont’d) 2023 During the year – 2023 Line item in the statement of financial position where the hedging instrument is included $’000 Changes in fair value of the hedging instrument recognised in OCI $’000 Net change in fair value reclassified from hedging reserve to statement of total return $’000 Line item in statement of total return affected by the reclassification $’000 Notional amount $’000 Carrying amount – assets $’000 Carrying amount – liabilities $’000 Trust Cash flow hedges Interest rate risk and foreign currency risk – Cross- currency interest rate swaps to hedge foreign currency floating rate borrowings 209,191(1) – (9,091) Derivative financial instruments (9,091) 10,809 Foreign exchange loss Interest rate risk – Interest rate swaps to hedge floating rate borrowings 1,244,000 18,596 (6,925) Derivative financial instruments 686 – – (1) The Group entered into cross-currency interest rate swaps to swap A$238.1 million floating rate borrowings to $220.0 million fixed rate borrowings. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 243 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Interest rate risk (cont’d) Hedge accounting (cont’d) 2022 During the year – 2022 Line item in the statement of financial position where the hedging instrument is included $’000 Changes in fair value of the hedging instrument recognised in OCI $’000 Net change in fair value reclassified from hedging reserve to statement of total return $’000 Line item in statement of total return affected by the reclassification $’000 Notional amount $’000 Carrying amount – assets $’000 Carrying amount – liabilities $’000 Trust Cash flow hedges Interest rate risk – Interest rate swaps to hedge floating rate borrowings 1,171,000 (iv) Liquidity risk 25,071 (14,086) Derivative financial instruments 13,093 – – 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. Notes to the Financial StatementsFor the year ended 30 September 2023 244 Frasers Centrepoint Trust Annual Report 2023 26. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iv) Liquidity risk (cont’d) The following are the expected contractual undiscounted cash flows of the Group’s and Trust’s non-derivative financial liabilities and derivative financial instruments including interest payments: Group As at 30 September 2023 Derivative financial assets/(liabilities) Interest rate swaps (net-settled) Cross-currency interest rate swaps (gross-settled) – outflow – inflow Non-derivative financial liabilities Trade and other payables (1) Security deposits Interest-bearing borrowings As at 30 September 2022 Derivative financial assets Interest rate swaps (net-settled) Non-derivative financial liabilities Trade and other payables (1) Security deposits Interest-bearing borrowings Trust As at 30 September 2023 Derivative financial assets/(liabilities) Interest rate swaps (net-settled) Cross-currency interest rate swaps (gross-settled) – outflow – inflow Non-derivative financial liabilities Trade and other payables (1) Security deposits Interest-bearing borrowings As at 30 September 2022 Derivative financial assets/(liabilities) Interest rate swaps (net-settled) Non-derivative financial liabilities Trade and other payables (1) Security deposits Interest-bearing borrowings Carrying amount $’000 Contractual cash flows $’000 Within 1 year $’000 Cash flows 1 to 5 years $’000 More than 5 years $’000 18,344 19,307 8,773 10,534 (9,091) – – 9,253 – (241,401) 236,638 14,544 – (7,636) 9,975 11,112 – (233,765) 226,663 3,432 – – – – – (88,851) (95,481) (2,195,408) (2,379,740) (88,851) (95,481) (2,433,947) (2,618,279) (88,851) (48,680) (434,330) (571,861) – (45,276) (1,999,617) (2,044,893) – (1,525) – (1,525) 25,071 26,875 10,723 16,152 – (64,179) (96,119) (1,810,126) (1,970,424) (64,179) (96,119) (1,977,774) (2,138,072) (64,179) (45,647) (461,060) (570,886) – (49,335) (1,516,714) (1,566,049) – (1,137) – (1,137) 11,671 12,418 3,677 8,741 (9,091) – – 2,580 – (241,401) 236,638 7,655 – (7,636) 9,975 6,016 – (233,765) 226,663 1,639 (222,847) (34,525) (1,137,227) (1,394,599) (222,847) (34,525) (1,310,439) (1,567,811) (222,847) (16,548) (49,351) (288,746) – (17,977) (1,261,088) (1,279,065) 10,985 11,976 3,151 8,825 – – – – – – – – – – (111,606) (39,393) (657,628) (808,627) (111,606) (39,393) (725,751) (876,750) (111,606) (19,228) (223,155) (353,989) – (19,632) (502,596) (522,228) – (533) – (533) (1) Excludes advance rent received and GST payables. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 245 27. SEGMENT REPORTING Business segments The Group is in the business of investing in retail malls and an office building, which are considered to be the main business segments. The Group’s portfolio as at 30 September 2023 comprises: 1. 2. 3. 4. 5. 6. 7. 8. 9. Causeway Point; Northpoint City North Wing; Yishun 10 Retail Podium; Changi City Point; Tampines 1; Tiong Bahru Plaza; Century Square; Hougang Mall; White Sands; and 10. Central Plaza. The Manager 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. Segment capital expenditure is the total costs incurred during the financial 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 investment in H-REIT for which operations are in Malaysia. Notes to the Financial StatementsFor the year ended 30 September 2023 246 Frasers Centrepoint Trust Annual Report 2023 27. SEGMENT REPORTING (CONT’D) Year ended 30 September 2023 Revenue and expenses Gross rental income Others Gross revenue Segment net property income Finance income Other income Finance costs Non-property expenses Net income Share of results of associate (2) Share of results of joint ventures (3) Impairment loss on investment of associate Net change in fair value of investment properties Net change in fair value of derivative financial instruments Net foreign exchange loss Total return before tax Taxation Unallocated taxation Total return for the year Northpoint City North Wing and Yishun 10 Retail Podium $’000 50,829 6,297 57,126 41,436 Causeway Point $’000 83,253 10,002 93,255 69,942 Changi City Point (1) $’000 22,328 3,235 25,563 15,865 Tampines 1 $’000 40,878 5,557 46,435 33,352 Tiong Bahru Plaza $’000 38,664 3,564 42,228 31,959 Century Square $’000 Hougang Mall $’000 White Sands $’000 30,895 1,529 32,424 23,676 27,285 4,279 31,564 22,295 26,875 4,003 30,878 20,414 Central Plaza $’000 10,248 2 10,250 6,647 265,586 13,177 3,522 (1,809) 1,053 113 (5,327) 823 (1,366) (289) – – – (252) – – – – – Group $’000 331,255 38,468 369,723 439 3,815 (81,042) (39,729) 149,069 5,862 51,185 (3,982) 9,897 174 (1) 212,204 (252) 2 211,954 (1) Changi City Point has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (2) Investment in H-REIT has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (3) Investment in CCCO LLP has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 247 27. SEGMENT REPORTING (CONT’D) Year ended 30 September 2023 Revenue and expenses Gross rental income Others Gross revenue Segment net property income Finance income Other income Finance costs Non-property expenses Net income Northpoint City North Wing and Yishun 10 Retail Podium $’000 50,829 6,297 57,126 41,436 Causeway Point $’000 83,253 10,002 93,255 69,942 Changi City Point (1) $’000 22,328 3,235 25,563 15,865 Tampines 1 $’000 40,878 5,557 46,435 33,352 Tiong Bahru Plaza $’000 38,664 3,564 42,228 31,959 Century Square $’000 Hougang Mall $’000 White Sands $’000 30,895 1,529 32,424 23,676 27,285 4,279 31,564 22,295 26,875 4,003 30,878 20,414 Central Plaza $’000 10,248 2 10,250 Group $’000 331,255 38,468 369,723 6,647 265,586 Share of results of associate (2) Share of results of joint ventures (3) Impairment loss on investment of associate Net change in fair value of investment properties Net change in fair value of derivative financial instruments Net foreign exchange loss Total return before tax Taxation Unallocated taxation Total return for the year (1) Changi City Point has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (2) Investment in H-REIT has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (3) Investment in CCCO LLP has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). 13,177 3,522 (1,809) 1,053 113 (5,327) 823 (1,366) (289) – – – (252) – – – – – 439 3,815 (81,042) (39,729) 149,069 5,862 51,185 (3,982) 9,897 174 (1) 212,204 (252) 2 211,954 Notes to the Financial StatementsFor the year ended 30 September 2023 248 Frasers Centrepoint Trust Annual Report 2023 27. SEGMENT REPORTING (CONT’D) Year ended 30 September 2022 Revenue and expenses Gross rental income Others Gross revenue Segment net property income Finance income Finance costs Non-property expenses Net income Share of results of associate Share of results of joint ventures Loss from the dilution of interest in associate Net change in fair value of investment properties Net change in fair value of derivative financial instruments Net foreign exchange loss Total return before tax Taxation Unallocated taxation Total return for the year Northpoint City North Wing and Yishun 10 Retail $’000 50,075 4,772 54,847 40,891 Changi City Point $’000 21,040 2,895 23,935 14,570 Causeway Point $’000 80,252 8,755 89,007 68,447 Tampines 1 $’000 Tiong Bahru Plaza $’000 Century Square $’000 Hougang Mall $’000 White Sands $’000 Central Plaza $’000 Others (1) $’000 Group $’000 42,926 4,696 47,622 38,735 2,623 41,358 29,968 1,488 31,456 27,318 3,191 30,509 25,901 2,868 28,769 – 14 14 325,626 31,305 356,931 34,416 31,013 21,847 21,141 20,245 206 258,597 9,411 3 9,414 5,821 8,375 6,904 (1,189) 1,057 1,169 (15,423) 214 902 735 – – – – – 6,102 – – – 43 (46,832) (36,245) 175,563 (1,096) 24,599 (1,143) 2,744 528 (8) 201,187 6,102 (10) 207,279 – – (1) These net property income contribution arose mainly due to the adjustments made for the divested malls i.e. Bedok Point, Anchorpoint and YewTee Point. Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 249 Northpoint City North Wing and Yishun 10 Retail $’000 50,075 4,772 54,847 40,891 Changi City Point $’000 21,040 2,895 23,935 14,570 Causeway Point $’000 80,252 8,755 89,007 68,447 Tampines 1 $’000 Tiong Bahru Plaza $’000 Century Square $’000 Hougang Mall $’000 White Sands $’000 Central Plaza $’000 Others (1) $’000 Group $’000 42,926 4,696 47,622 38,735 2,623 41,358 29,968 1,488 31,456 27,318 3,191 30,509 25,901 2,868 28,769 34,416 31,013 21,847 21,141 20,245 9,411 3 9,414 5,821 – 14 14 325,626 31,305 356,931 206 258,597 8,375 6,904 (1,189) 1,057 1,169 (15,423) 214 902 735 – – – – – 6,102 – – – (1) These net property income contribution arose mainly due to the adjustments made for the divested malls i.e. Bedok Point, Anchorpoint 43 (46,832) (36,245) 175,563 (1,096) 24,599 (1,143) 2,744 528 (8) 201,187 6,102 (10) 207,279 – – 27. SEGMENT REPORTING (CONT’D) Year ended 30 September 2022 Revenue and expenses Gross rental income Others Gross revenue Segment net property income Finance income Finance costs Non-property expenses Net income Share of results of associate Share of results of joint ventures Loss from the dilution of interest in associate Net change in fair value of investment properties Net change in fair value of derivative financial instruments Net foreign exchange loss Total return before tax Taxation Unallocated taxation Total return for the year and YewTee Point. Notes to the Financial StatementsFor the year ended 30 September 2023 250 Frasers Centrepoint Trust Annual Report 2023 27. SEGMENT REPORTING (CONT’D) As at 30 September 2023 Assets and liabilities Segment assets Investment in joint ventures (2) Assets held for sale Unallocated assets – Derivative financial instruments – Others Total assets Segment liabilities Liabilities held for sale Unallocated liabilities – Interest-bearing borrowings – Derivative financial instruments – Others Total liabilities Northpoint City North Wing and Yishun 10 Retail Podium $’000 Causeway Point $’000 Changi City Point (1) $’000 Tampines 1 $’000 Tiong Bahru Plaza $’000 Century Square $’000 Hougang Mall $’000 White Sands $’000 Central Plaza $’000 Group $’000 1,340,508 818,607 3,956 778,041 662,097 560,596 437,281 432,702 219,656 31,126 22,049 24,040 31,891 15,056 16,731 13,264 13,997 3,815 5,253,444 730,766 364,436 18,470 8,066 6,375,182 171,969 6,189 2,195,408 9,217 19,164 2,401,947 Year ended 30 September 2023 Other segmental information Net (written back)/allowance for doubtful receivables Bad debts recovered Amortisation of lease incentives Depreciation of fixed assets Fixed assets written off Capital expenditure – Investment properties (87) (1) 424 20 – 246 1 – 371 8 – 849 68 – (278) 15 35 1,531 (1) Changi City Point has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (2) Excluded the investment in CCCO LLP, which has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (1) (3) 319 – – (260) 64 – – – 6 (3) – – – – – – – – – – – – – – 51 (7) 43 35 (1,213) (224) (66) (467) (1,394) 6,266 1,627 3,822 953 1,300 1,322 17,916 Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 251 Northpoint City North Wing and Yishun 10 Retail Podium $’000 Causeway Point $’000 Changi City Point (1) $’000 Tampines 1 $’000 Tiong Bahru Plaza $’000 Century Square $’000 Hougang Mall $’000 White Sands $’000 Central Plaza $’000 Group $’000 1,340,508 818,607 3,956 778,041 662,097 560,596 437,281 432,702 219,656 31,126 22,049 24,040 31,891 15,056 16,731 13,264 13,997 3,815 5,253,444 730,766 364,436 18,470 8,066 6,375,182 171,969 6,189 2,195,408 9,217 19,164 2,401,947 Net (written back)/allowance for doubtful receivables (87) (1) 424 20 – 246 371 1 – 8 – 849 (278) 68 – 15 35 1,531 (1) (3) 319 – – 64 – (260) – – 6 (3) (1,213) – – – – (224) – – – – (66) – – – – (467) – – 51 (7) (1,394) 43 35 6,266 1,627 3,822 953 1,300 1,322 17,916 (1) Changi City Point has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). (2) Excluded the investment in CCCO LLP, which has been reclassified to “Assets held for sale” as at 30 September 2023 (Note 12). 27. SEGMENT REPORTING (CONT’D) As at 30 September 2023 Assets and liabilities Segment assets Investment in joint ventures (2) Assets held for sale Unallocated assets – Derivative financial instruments – Others Total assets Segment liabilities Liabilities held for sale Unallocated liabilities – Interest-bearing borrowings – Derivative financial instruments – Others Total liabilities Year ended 30 September 2023 Other segmental information Bad debts recovered Amortisation of lease incentives Depreciation of fixed assets Fixed assets written off Capital expenditure – Investment properties Notes to the Financial StatementsFor the year ended 30 September 2023 252 Frasers Centrepoint Trust Annual Report 2023 27. SEGMENT REPORTING (CONT’D) As at 30 September 2022 Assets and liabilities Segment assets Investment in associate Investment in joint ventures Unallocated assets – Derivative financial instruments – Others Total assets Segment liabilities Unallocated liabilities – Interest-bearing borrowings – Others Total liabilities Northpoint City North Wing and Yishun 10 Retail Podium $’000 Causeway Point $’000 Changi City Point $’000 Tampines 1 $’000 Tiong Bahru Plaza $’000 Century Square $’000 Hougang Mall $’000 White Sands $’000 Central Plaza $’000 Group $’000 1,328,583 813,922 327,723 771,053 661,875 561,142 435,643 432,058 217,655 29,923 20,133 11,771 24,153 14,582 15,325 12,032 11,705 3,694 143,318 5,549,654 40,808 312,341 25,071 13,494 5,941,368 1,810,126 23,847 1,977,291 Year ended 30 September 2022 Other segmental information Net (written back)/allowance for doubtful receivables Bad debts recovered Amortisation of lease incentives Depreciation of fixed assets Capital expenditure – Investment properties (644) (1) (565) 22 – – (275) 8 2,060 320 5 – (209) 19 981 (15) (1) (611) – 331 – (1) 310 – 141 9 – – (310) (11) (221) – – – – – 29 – – – (54) (656) (3) (1,906) 49 113 565 127 212 4,850 Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 253 Northpoint City North Wing and Yishun 10 Retail Podium $’000 Causeway Point $’000 Changi City Point $’000 Tampines 1 $’000 Tiong Bahru Plaza $’000 Century Square $’000 Hougang Mall $’000 White Sands $’000 Central Plaza $’000 Group $’000 1,328,583 813,922 327,723 771,053 661,875 561,142 435,643 432,058 217,655 5,549,654 40,808 312,341 25,071 13,494 5,941,368 29,923 20,133 11,771 24,153 14,582 15,325 12,032 11,705 3,694 143,318 1,810,126 23,847 1,977,291 Net (written back)/allowance for doubtful receivables (644) (1) (565) 22 – – 8 (275) 2,060 320 5 – (209) 19 981 (15) (1) (611) – 331 – (1) 310 – 141 9 – (310) – (11) – (221) – – – 29 – – – (54) – (656) (3) (1,906) 49 113 565 127 212 4,850 27. SEGMENT REPORTING (CONT’D) As at 30 September 2022 Assets and liabilities Segment assets Investment in associate Investment in joint ventures Unallocated assets – Derivative financial instruments – Others Total assets Segment liabilities Unallocated liabilities – Interest-bearing borrowings – Others Total liabilities Year ended 30 September 2022 Other segmental information Bad debts recovered Amortisation of lease incentives Depreciation of fixed assets Capital expenditure – Investment properties Notes to the Financial StatementsFor the year ended 30 September 2023 254 Frasers Centrepoint Trust Annual Report 2023 28. COMMITMENTS Group 2023 $’000 2022 $’000 Trust 2023 $’000 2022 $’000 Commitments in respect of contracts entered but not provided for: – Capital expenditure for investment properties – Share of joint venture’s capital expenditure for investment property 31,743 316 458 – – – 458 – 29. CONTINGENT LIABILITY Pursuant to the tax transparency ruling from the IRAS, the Trustee and the Manager have provided a tax indemnity for certain types of tax losses, including unrecovered late payment penalties, that may be suffered by 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. 30. LEASES Leases as lessor The Group leases out its investment property consisting of its owned retail malls and an office building (Note 4). All leases are classified as operating leases from a lessor perspective. Operating lease The Group leases out its investment properties. The Group has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Portfolio Statement sets out information about the operating leases of investment property. Gross rental income from investment properties recognised by the Group for the year ended 30 September 2023 was $331,255,000 (2022: $325,626,000) (Note 17). The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. Operating leases under FRS 116 Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total Group 2023 $’000 2022 $’000 274,060 184,568 109,030 40,828 15,942 5,950 630,378 283,173 182,730 78,382 24,197 8,832 1,717 579,031 Notes to the Financial StatementsFor the year ended 30 September 2023 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 255 31. FINANCIAL RATIOS Expenses to weighted average net assets (1) – including performance component of asset management fees – excluding performance component of asset management fees Total operating expenses to net asset value (2) Portfolio turnover rate (3) Group 2023 % 1.01 0.61 4.1 – 2022 % 0.93 0.57 3.7 – (1) The expense 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 Group, excluding property expenses, interest expense, foreign exchange gains and losses and tax expense of the Group. (2) The expense ratios are computed based on total operating expense, including property expenses and all fees and charges paid/payable to the Managers and the interested parties as well as FCT’s proportionate share of the operating expenses incurred by its joint ventures and associate of $161,221,000 (2022: $148,359,000) as a percentage of net asset value as at the end of the financial year. (3) The portfolio turnover ratios are computed based on the lesser of purchases or sales of underlying investment properties of the Group expressed as a percentage of weighted average net asset value. 32. SUBSEQUENT EVENTS On 4 October 2023, the Trust entered into a sale and purchase agreement with an unrelated third party in relation to the divestment of the remaining 2.12% interest in H-REIT, comprising 10,559,928 units in H-REIT for a purchase consideration of approximately RM6,864,000 (equivalent to approximately $2,000,000). The purchase consideration was negotiated on a willing-buyer and willing-seller basis at RM0.65 per unit. On 16 October 2023, the discharge of the collaterals for Tampines 1 has been completed after the refinancing and repayment of the secured bank loan. On 25 October 2023, the Manager has declared an aggregate distribution of $103,065,000 (or 6.020 cents per Unit) to Unitholders which includes a distribution which was earlier retained by the Manager for the period from 1 October 2022 to 31 March 2023 of $2,986,000 (or 0.174 cents per Unit). On 27 October 2023, the Trust has issued 3,580,068 new Units issued at a price of $2.1903 per Unit as payment of the following: - • • • 20% of the performance fee component of its management fee for the period from 1 October 2022 to 31 March 2023; 35% of the performance fee component of its management fee for the period from 1 April 2023 to 30 June 2023; and 55% of the base fee component and performance fee component of its management fee for the period from 1 July 2023 to 30 September 2023. On 31 October 2023, the Trust has completed the divestment of Changi City Point for divestment consideration of $338.0 million. Notes to the Financial StatementsFor the year ended 30 September 2023 256 Frasers Centrepoint Trust Annual Report 2023 Statistics of Unitholdings ISSUED AND FULLY PAID-UP UNITS There were 1,712,039,299 Units (voting rights: one vote per Unit) outstanding as at 27 November 2023. There is only one class of Units. The market capitalisation was approximately $3,766 million based on closing unit price of $2.20 on 27 November 2023. TOP TWENTY UNITHOLDERS AS AT 27 NOVEMBER 2023 As shown in the Register of Unitholders S/No Unitholders FRASERS PROPERTY RETAIL TRUST HOLDINGS PTE LTD 1. CITIBANK NOMINEES SINGAPORE PTE LTD 2. HSBC (SINGAPORE) NOMINEES PTE LTD 3. DBS NOMINEES (PRIVATE) LIMITED 4. DBSN SERVICES PTE. LTD. 5. RAFFLES NOMINEES (PTE.) LIMITED 6. FRASERS CENTREPOINT ASSET MANAGEMENT LTD 7. BPSS NOMINEES SINGAPORE (PTE.) LTD. 8. DB NOMINEES (SINGAPORE) PTE LTD 9. UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 10. PHILLIP SECURITIES PTE LTD 11. IFAST FINANCIAL PTE. LTD. 12. CGS-CIMB SECURITIES (SINGAPORE) PTE. LTD. 13. OCBC NOMINEES SINGAPORE PRIVATE LIMITED 14. PAP COMMUNITY FOUNDATION 15. OCBC SECURITIES PRIVATE LIMITED 16. 17. ABN AMRO CLEARING BANK N.V. 18. MAYBANK SECURITIES PTE. LTD. UOB KAY HIAN PRIVATE LIMITED 19. BNP PARIBAS NOMINEES SINGAPORE PTE. LTD. 20. Total UNITHOLDINGS OF DIRECTORS OF THE MANAGER AS AT 21 OCTOBER 2023 Number of Units % of Total units in Issue 624,684,552 260,949,026 151,405,257 132,055,232 100,256,696 98,247,776 85,290,961 18,239,631 9,203,146 7,858,062 7,632,777 7,204,989 6,947,885 5,787,689 5,000,000 4,788,420 4,026,344 2,801,750 2,789,794 2,661,793 1,537,831,780 36.49 15.24 8.84 7.71 5.86 5.74 4.98 1.07 0.54 0.46 0.45 0.42 0.41 0.34 0.29 0.28 0.24 0.16 0.16 0.16 89.84 Name of Director Dr Cheong Choong Kong Mr Ho Chee Hwee Simon Number of Direct Interest FCT Units held Deemed Interest 186,597 – – 200,000 Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 257 Statistics of Unitholdings SUBSTANTIAL UNITHOLDERS AS AT 27 NOVEMBER 2023 Substantial Unitholders Frasers Property Retail Trust Holdings Pte. Ltd. Frasers Property Limited (1) Thai Beverage Public Company Limited (2) International Beverage Holdings Limited (3) InterBev Investment Limited (4) Siriwana Company Limited (5) Shiny Treasure Holdings Limited (6) TCC Assets Limited (7) Charoen Sirivadhanabhakdi (8) The estate of the late Khunying Wanna Sirivadhanabhakdi (9) Notes: Direct Interest Deemed Interest Number of Units % Number of Units Total Number of Units Held % % 624,684,552 – 36.49 – – 709,975,513 – 41.47 624,684,552 709,975,513 36.49 41.47 – – – – – – – – – – – – – – – – 709,975,513 41.47 709,975,513 41.47 709,975,513 709,975,513 709,975,513 709,975,513 709,975,513 709,975,513 41.47 41.47 41.47 41.47 41.47 41.47 709,975,513 709,975,513 709,975,513 709,975,513 709,975,513 709,975,513 41.47 41.47 41.47 41.47 41.47 41.47 709,975,513 41.47 709,975,513 41.47 (1) Frasers Property Limited (“FPL”) holds a 100% direct interest in each of Frasers Centrepoint Asset Management Ltd. (“FCAM”) and Frasers Property Retail Trust Holdings Pte. Ltd. (“FPRTH”); and each of FCAM and FPRTH directly holds units in FCT. FPL therefore has a deemed interest in the units in FCT in which each of FCAM and FPRTH has an interest, by virtue of Section 4 of the Securities and Futures Act 2001 of Singapore (the “SFA”). (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 FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. ThaiBev therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of the Section 4 of the SFA. (3) IBHL holds a 100% direct interest in IBIL; – IBIL holds a greater than 20% interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. IBHL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. (4) IBIL holds a greater than 20% interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. IBIL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. (5) Siriwana Co., Ltd (“SCL”) holds, directly and indirectly, through its wholly-owned subsidiary, Siriwanan Co., Ltd, a majority interest in ThaiBev; – ThaiBev holds a 100% direct interest in IBHL; – – IBHL holds a 100% direct interest in IBIL; IBIL holds a greater than 20% interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. SCL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. (6) Shiny Treasure Holdings Limited (“STHL”) holds a greater than 20% interest in SCL; – SCL holds, directly and indirectly, a majority interest in ThaiBev; – ThaiBev holds a 100% direct interest in IBHL; – – IBHL holds a 100% direct interest in IBIL; IBIL holds a greater than 20% interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. STHL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. 258 Frasers Centrepoint Trust Annual Report 2023 Statistics of Unitholdings SUBSTANTIAL UNITHOLDERS (CONT’D) AS AT 27 NOVEMBER 2023 (7) TCC Assets Limited (“TCCA”) holds a majority interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. TCCA therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. (8) Charoen Sirivadhanabhakdi and the estate of the late Khunying Wanna Sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of TCCA; – TCCA holds a majority interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. Charoen Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. (9) The estate of the late Khunying Wanna Sirivadhanabhakdi and Charoen Sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of TCCA; – TCCA holds a majority interest in FPL; – FPL holds a 100% direct interest in each of FCAM and FPRTH; and – Each of FCAM and FPRTH directly holds units in FCT. The estate of the late Khunying Wanna Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA. 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 (%) 105 2,215 9,361 3,170 25 14,876 0.70 14.89 62.93 21.31 0.17 100.00 4,645 1,613,579 43,060,303 118,799,098 1,548,561,674 1,712,039,299 0.00 0.09 2.52 6.94 90.45 100.00 Number of Unitholders Percentage of Unitholders (%) Number of Units Percentage of Units in Issue (%) 14,384 358 134 14,876 96.69 2.41 0.90 100.00 1,705,242,216 5,010,094 1,786,989 1,712,039,299 99.60 0.29 0.11 100.00 Based on information made available to the Manager as at 27 November 2023, approximately 58.5% 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. Contents Overview Business Review Asset Portfolio Risk Management Sustainability Corporate Governance Financial & Other Information 259 Additional Information INTERESTED PERSON TRANSACTIONS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023 The transactions entered into with interested persons during the financial year under review, 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: Name of Interested Person Nature of relationship 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) $’000 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 Frasers Property Limited and its subsidiaries or associate – Asset management fees (1) – Acquisition fees (2) – Property management, project management and service fees (1), (3), (4) – Reimbursement of expenses and capital expenditure (1), (3) – Recovery of expenses – Entry into Joint Venture (5) – Purchase of services Fraser & Neave Group and its subsidiaries or associate – Rental income and license fee – Purchase of services (1) Associates of controlling shareholder of Manager and controlling unitholder of FCT HSBC Institutional Trust Services (Singapore) Limited – Trustee’s and Custodian’s fees Trustee (1) Includes FCT’s interest in joint ventures. 35,468 6,611 16,074 27,447 191 326,910 44 282 537 1,038 – – – – – – – – – – (2) Relates to the acquisition fees for acquisition of an effective 25.50% interest in Gold Ridge Pte. Ltd. (“GRPL”) which holds NEX and acquisition of 10.00% interest in Sapphire Star Trust (“SST”) which holds Waterway Point. (3) During the financial year, the managing agent agreement with Frasers Property Retail Management Pte. Ltd. (the “Managing Agent”) for The Management Corporation Strata Title Plan No. 2193 in respect of Century Square has been renewed for a tenure of two years. The managing agent fees payable and expenses reimbursable to the Managing Agent are estimated at $2.10 million. (4) During the financial year, the property management agreement in respect of Waterway Point between Frasers Property Retail Management Pte. Ltd. (“FPRM”), the property manager and FC Retail Trustee Pte. Ltd., the trustee-manager of SST (“FCRT”), a private trust through which FCT holds a 50.00% interest in Waterway Point, has been amended to provide for a scheme where, a lump sum payment of $0.90 million is payable by FCRT to FPRM. FCT’s share of the lump sum payment is estimated at $0.45 million. (5) Relates to the entry by FCT into a joint venture with FCL Emerald (1) Pte. Ltd. (a wholly owned subsidiary of Frasers Property Limited) in connection with the parties’ joint acquisition of 50.00% interest in GRPL, including the related transaction costs and completion adjustments. The entry into the joint venture falls within the exception under Rule 916(2) of the SGX-ST’s Listing Manual and accordingly, the approval of the unitholders of FCT for the entry into the joint venture is not required. 260 Frasers Centrepoint Trust Annual Report 2023 Additional Information INTERESTED PERSON TRANSACTIONS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023 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 refer to Note 24 Significant Related Party Transactions to 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, restated and supplemented) 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. Manager’s Asset Management and Acquisition Fees Paid and Payable in Units A summary of Units issued for payment of the Manager’s management fees and acquisition fees in respect of the financial year are as follows:- Manager’s Base Fee Component 1 October to 31 December 2022 1 January to 31 March 2023 1 April to 30 June 2023 1 July to 30 September 2023 Manager’s Performance Fee Component 1 October 2022 to 30 September 2023 Acquisition Fee In respect of the acquisition of an effective 25.50% interest in GRPL and acquisition of 10.00% interest in SST on 6 February 2023 and 8 February 2023 respectively Issue Date Units Issued Issue Price 30 January 2023 28 April 2023 28 July 2023 27 October 2023 451,951 448,558 805,630 1,289,774 $2.0656 (1) $2.2444 (1) $2.2020 (1) $2.1903 (1) 27 October 2023 2,290,294 $2.1903 (2) 14 February 2023 2,987,432 $2.2129 (3) (1) Based on the volume weighted average traded price of a Unit in the ordinary course of trading on the SGX-ST for the last 10 business days of the relevant period in which the management fees were accrued. (2) Based on the volume weighted average traded price of a Unit in the ordinary course of trading on the SGX-ST for the last 10 business days immediately preceding the end date of the financial year ended 30 September 2023. (3) Based on the volume weighted average traded price of a Unit in the ordinary course of trading on the SGX-ST for the last 10 business days immediately preceding the date of issue of the Units. SUBSCRIPTION OF FCT UNITS For the financial year ended 30 September 2023, an aggregate of 6,401,667 Units were issued and as at 30 September 2023, 1,708,459,231 Units were in issue. On 27 October 2023, the Trust issued 3,580,068 new Units to the Manager as the base fee component of the Manager’s management fees for the quarter ended 30 September 2023 and the performance fee component of the Manager’s management fees for the financial year ended 30 September 2023. NON-DEAL ROADSHOW EXPENSES Non-deal roadshow expenses of $850 (2022: $NIL) were incurred during the year ended 30 September 2023. Corporate Information As at 30 September 2023 Frasers Centrepoint Trust Trustee’s Registered Address HSBC Institutional Trust Services (Singapore) Limited 10 Marina Boulevard Marina Bay Financial Centre Tower 2 #48-01 Singapore 018983 Website and email address: www.frasersproperty.com/reits/fct ir@fraserscentrepointtrust.com SGX Stock code: J69U Bloomberg Stock code: FCT SP Trustee’s Mailing Address HSBC Institutional Trust Services (Singapore) Limited 10 Marina Boulevard Marina Bay Financial Centre Tower 2 #45-01 Singapore 018983 Auditor KPMG LLP 12 Marina View, #15-01 Asia Square Tower 2 Singapore 018961 Partner-in-charge: Ms Sarina Lee (With effect from financial year ended 30 September 2021) Phone Fax : (65) 6213 3388 : (65) 6225 0984 Bankers BNP Paribas Citibank, N.A., Singapore Branch Credit Industriel et Commercial, Singapore Branch DBS Bank Ltd. Malayan Banking Berhad, Singapore Branch Oversea-Chinese Banking Corporation Limited Standard Chartered Bank Unit Registrar Boardroom Corporate & Advisory Services Pte. Ltd. 1 HarbourFront Avenue Keppel Bay Tower, #14-07 Singapore 098632 Phone Fax : (65) 6536 5355 : (65) 6536 1360 The Manager Registered Address Frasers Centrepoint Asset Management Ltd. 438 Alexandra Road, #21-00 Alexandra Point Singapore 119958 Phone: (65) 6276 4882 Fax: (65) 6272 8776 Directors of The Manager Dr Cheong Choong Kong (Chairman)1 Non-Executive and Independent Director Mr Ho Chai Seng Non-Executive and Independent Director Mr Ho Chee Hwee Simon Non-Executive and Non-Independent Director Mr Ho Kin San Non-Executive and Independent Director Ms Koh Choon Fah2 Non-Executive and Independent Director Mr Low Chee Wah3 Non-Executive and Non-Independent Director Ms Soon Su Lin Non-Executive and Non-Independent Director Mr Tan Siew Peng (Darren) Non-Executive and Independent Director Audit, Risk and Compliance Committee Ms Koh Choon Fah (Chairperson)2 Dr Cheong Choong Kong Mr Ho Chai Seng Mr Ho Chee Hwee Simon Mr Ho Kin San Mr Tan Siew Peng (Darren)4 Nominating and Remuneration Committee Mr Ho Chai Seng (Chairman) Dr Cheong Choong Kong Mr Ho Chee Hwee Simon Mr Ho Kin San Ms Koh Choon Fah Mr Tan Siew Peng (Darren) Company Secretary Ms Catherine Yeo 1 Dr Cheong Choong Kong retired as a Director, the Chairman of the Board, and a member of the ARCC and NRC on 1 November 2023. 2 Ms Koh Choon Fah was appointed as the Chairperson of the Board with effect from 1 November 2023. With effect from 1 November 2023, Ms Koh relinquished her role as the Chairperson of the ARCC. She remains a member of the ARCC and the NRC. 3 Mr Low Chee Wah will retire as a Director with effect from 1 January 2024. 4 Mr Tan Siew Peng (Darren) was appointed as the Chairman of the ARCC with effect from 1 November 2023. FRASERS CENTREPOINT ASSET MANAGEMENT LTD. As Manager of Frasers Centrepoint Trust Company Registration Number 200601347G 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 Phone: +65 6276 4882 +65 6272 8776 Fax: ir@fraserscentrepointtrust.com Email: frasersproperty.com/reits/fct