Frasers Property Limited
Annual Report 2014

Plain-text annual report

A NEW LEVEL OF GROWTH ANNUAL REPORT 2014 A N E W L E V E L O F G R O W T H F R A S E R S C E N T R E P O I N T L I M I T E D A N N U A L R E P O R T 2 0 1 4 FRASERS CENTRE PO INT LIMITE D C o m p a n y R e g i s t r a t i o n N u m b e r : 1 9 6 3 0 0 4 4 0 G 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 Phone: +65 6276 4882 +65 6276 6328 Fax: fraserscen trepo int.com C O N T E N T S 0 2 O U R V I S I O N , M I S S I O N A N D K E Y S T R A T E G I E S 0 4 F C L G R O U P A T A G L A N C E 0 6 G L O B A L P R E S E N C E 0 8 M I L E S T O N E S 1 0 C O R P O R A T E I N F O R M A T I O N 1 1 G R O U P S T R U C T U R E 1 2 F I N A N C I A L H I G H L I G H T S 1 4 C H A I R M A N ’ S S T A T E M E N T 2 0 B O A R D O F D I R E C T O R S 2 6 G R O U P M A N A G E M E N T 2 8 G R O U P C E O ’ S B U S I N E S S R E V I E W • D E V E L O P M E N T P R O P E R T I E S • C O M M E R C I A L P R O P E R T I E S • H O S P I T A L I T Y • A U S T R A L A N D 5 8 I N V E S T O R R E L A T I O N S 6 0 T R E A S U R Y H I G H L I G H T S 6 2 C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y 7 4 A W A R D S & A C C O L A D E S 7 8 E N T E R P R I S E - W I D E R I S K M A N A G E M E N T 8 1 C O R P O R A T E G O V E R N A N C E R E P O R T 9 7 F I N A N C I A L S T A T E M E N T S 2 3 4 P A R T I C U L A R S O F G R O U P P R O P E R T I E S 2 5 1 I N T E R E S T E D P E R S O N S T R A N S A C T I O N S 2 5 2 S H A R E H O L D I N G S T A T I S T I C S 2 5 4 N O T I C E O F A N N U A L G E N E R A L M E E T I N G P R O X Y F O R M Central Park, Sydney, Australia Watertown, Singapore Capri by Fraser, Changi City, Singapore All figures in this Annual Report are in Singapore dollars unless otherwise specified. Frasers Tower, Singapore FY2013/14 has been a milestone year for Frasers Centrepoint Limited (FCL). We made the leap to the big league by being independently listed on the Singapore Exchange after having operated as a subsidiary of Fraser and Neave, Limited (F&NL) for more than 20 years. This enables us to pursue targeted growth initiatives and employ new strategies to further develop our brand. Building on the strong foundation that we have established over the years, FCL is now in a better position to improve its corporate visibility across its business segments – to take our brand further and embark on Port Coogee, Western Australia a new level of growth. 1 O U R V I S I O N TO BE OUR STAKEHOLDERS’ REAL ESTATE COMPANY OF CHOICE O U R M I S S I O N CREATING VALUE THROUGH SPACE FOR TODAY AND TOMORROW Waterway Point, Singapore 2 Eastern Creek Business Park, Sydney, Australia OUR KEY STRATEGIES 1 Achieve sustainable earnings growth through a significant development project pipeline, investment properties and fee income 2 Grow our asset portfolio in a balanced manner across geographies and property segments to preserve stability Hotel InterContinental, Singapore of earnings 3 Optimise capital productivity through REIT platforms and active asset management initiatives 4 Develop synergies with the TCC Group Waterfront Gold, Singapore 3 F C L G R O U P A T A G L A N C E Frasers Centrepoint Limited is an international real estate company with a portfolio that spans residential, commercial, hospitality and industrial asset classes. We invest in, develop and manage properties in over 35 cities across Europe, Australia, Asia and the Middle-East. Our established focus on our three core markets of Singapore, where we are listed and have our roots, Australia and China, is driven by the strong market fundamentals that characterise these territories. Over the years, we have developed an intimate knowledge of our core markets and also of our secondary markets of the United Kingdom, Vietnam, Thailand and Malaysia. chain. Combined with our financial and operational discipline, and the thoughtful execution of our strategies, we aim to deliver value to our stakeholders and the communities we serve. We have a clear vision of the path ahead. Our experienced management team, proven expertise in multiple asset classes, and sound financials, mean we are well equipped to continue growing and creating innovative real estate solutions for today and tomorrow. TOTAL ASSETS ($’m) We are bound by a common objective across our diverse geographic footprint – to develop real places for real people. Places that are inclusive, where young and old alike can live, work and play. We are proud of the contribution we make to the cities we operate in, from providing homes for families and accommodation for travellers, to efficient spaces that allow businesses to thrive and malls that serve the needs of local communities. Our diverse portfolio, active management of assets across segments and geographies, and ability to strike the right balance between development, income-yielding assets and optimising capital through our Singapore-listed REIT platforms, allow us to generate quality earnings throughout the entire real estate value 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 PROFIT BEFORE INTEREST AND TAXATION ($’m) 16,891 10,445 10,357 9,808 9,567 10,112 9,860 9,127 6,140 5,081 FY2014 689M 71% 10% 10% 7% 1% 1% DEVELOPMENT PROPERTIES INVESTMENT PROPERTIES HOSPITALITY REITS AUSTRALAND1 CORPORATE & OTHERS 66% 11% 12% 10% – 1% FY2013 571M Development Properties ($’m) Investment Properties ($’m) Hospitality ($’m) REIT ($’m) Australand ($’m) Corporate & Others ($’m) Profit Before Interest and Taxation FY2014 FY2013 490.8 379.4 68.4 63.0 67.8 69.7 54.4 54.4 6.4 – 1.6 4.6 Group ($’m) ($’000) 689.4 571.1 1 Australand became a member of the Group on 29 August 2014, contributing one month of income in FY2014 4 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES RESIDENTIAL Frasers Centrepoint Homes focuses on residential property development in Singapore. It has built over 13,000 homes in Singapore, with close to 6,000 homes under development (including properties under joint-venture projects). Frasers Property is the international arm of the Group. It develops residential and mixed-use property projects outside of Singapore, including in China, Australia, New Zealand, Thailand, and the United Kingdom. Our key overseas markets for property development are China and Australia. COMMERCIAL Frasers Centrepoint Commercial manages our shopping malls in Singapore under the Frasers Centrepoint Malls brand. It manages six shopping malls in Singapore held by Frasers Centrepoint Trust, an entity which is listed on the SGX-ST. In addition, FCL also has interests in and/or manages seven other shopping malls in Singapore, and one shopping mall each in China and Australia. Frasers Centrepoint Commercial also manages office and business space properties. It manages five commercial and office properties in Singapore and Australia held by Frasers Commercial Trust, an entity which is also listed on the SGX-ST. FCL also has interests in seven office and business space properties located in Singapore, China and Vietnam. Flamingo Valley, Singapore AU STR ALAND Australand is a wholly owned subsidiary of Frasers Centrepoint Limited. Australand is one of Australia’s leading property groups, having been involved in property development for more than 90 years. Its current operations are focussed on investment in income-producing office and industrial properties, commercial and industrial property development and management and residential development (including land, housing and apartments). Australand has offices in Sydney, Melbourne, Brisbane and Perth. It also maintains a residential sales office in Hong Kong. Modena by Fraser, Wuhan, China HOSPITALITY Frasers Hospitality has interests in and/or manages serviced residences under the branded lifestyle offerings of Fraser Suites, Fraser Place, Fraser Residence, Modena by Fraser and Capri by Fraser, offering more than 11,000 apartments and hotel rooms in over 35 cities. Based on management contracts secured, more than 7,700 apartments will be added to Frasers Hospitality’s portfolio of serviced residences in the next three years. Changi City Point, Singapore 357 Collins Street, Melbourne, Australia 5 G L O B A L P R E S E N C E PROFIT BEFORE INTEREST AND TAXATION BREAKDOWN BY GEOGRAPHICAL SEGMENT ($’m) FY2014 689M 58% SINGAPORE 87% 21% AUSTRALIA 12% EUROPE 6% 1% 2% CHINA THAILAND OTHERS* 1% 3% 5% 1% 3% FY2013 571M SINGAPORE FY2014 ($’000) AUSTRALIA FY2014 ($’000) EUROPE FY2014 ($’000) 400,673 147,135 87,328 FY2013 ($’000) 499,352 FY2013 ($’000) 4,230 FY2013 ($’000) 18,465 CHINA FY2014 ($’000) 39,121 FY2013 ($’000) 29,552 THAILAND FY2014 ($’000) 3,314 FY2013 ($’000) 7,896 OTHERS1 FY2014 ($’000) 11,791 FY2013 ($’000) 11,643 1 Include New Zealand, Malaysia, Indonesia, Philippines & Vietnam 6 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES • RESIDENTIAL Australia China Malaysia New Zealand Singapore Thailand United Kingdom • COMMERCIAL Australia China Malaysia Singapore Vietnam • INDUSTRIAL Australia • HOSPITALITY Australia Bahrain China France Germany Hungary India Indonesia Japan Malaysia Nigeria Philippines Qatar Singapore South Korea Spain Thailand Turkey United Arab Emirates United Kingdom Vietnam 7 ANNUAL REPORT2014M I L E S T O N E S 1 9 8 8 Centrepoint Properties Limited (CPL) was listed on the Main Board of the Singapore Exchange (SGX-ST) 1 9 9 0 CPL became a subsidiary of F&NL 1 9 9 2 Northpoint, Singapore’s pioneer suburban retail mall in Yishun; Bridgepoint, a retail mall in Sydney; and Alexandra Point, CPLs’ first office project, were launched 1 9 9 8 CPL’s first two hospitality projects, Fraser Suites and Fraser Place in Singapore, were launched 2 0 0 1 Jingan Four Seasons in Shanghai was CPL’s first residential project developed in China 2 0 0 6 CPL was rebranded Frasers Centrepoint Limited (FCL) FCL launched its first REIT, Frasers Centrepoint Trust which is listed on the Main Board of SGX-ST 2 0 0 0 Pavilions on the Bay in Australia and Annandale House in the United Kingdom, CPL’s first overseas residential projects were developed 2 0 0 2 CPL launched serviced residences in the United Kingdom, Korea and Philippines CPL was delisted from SGX-ST and became a wholly owned subsidiary of F&NL 8 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES1 9 9 3 The Anchorage, CPL’s first residential project, was redeveloped from F&N Singapore’s old brewery and soft drink plants 1 9 9 6 CPL’s first overseas office project, Me Linh Point, a commercial-cum-retail centre in Ho Chi Minh City was developed 1 9 9 7 Alexandra Technopark, CPL’s first business space project was developed and launched 2 0 0 8 FCL acquired a stake in Allco Commercial REIT (Allco) and the entire stake of Allco’s manager, and rebranded the REIT Frasers Commercial Trust (FCOT). FCOT is listed on the Main Board of SGX-ST 2 0 1 3 FCL became a member of TCC Group 2 0 1 4 FCL was listed by way of introduction on the Main Board of SGX-ST Frasers Hospitality Trust was listed on the Main Board of SGX-ST. It is the first hotel and serviced residence stapled group with a global mandate, except Thailand, to be listed on the SGX-ST FCL wholly acquired Australand, an Australian property company 9 ANNUAL REPORT2014C O R P O R A T E I N F O R M A T I O N BOA RD OF DIRE CTOR S Mr Charoen Sirivadhanabhakdi Non-Executive and Non-Independent Chairman R ISK MA NAGEMEN T C OM M ITTEE Mr Chotiphat Bijananda Chairman Khunying Wanna Sirivadhanabhakdi Non-Executive and Non-Independent Vice Chairman Mr Charles Mak Ming Ying Mr Chan Heng Wing Mr Weerawong Chittmittrapap Mr Panote Sirivadhanabhakdi Mr Sithichai Chaikriangkrai AUD IT C OMMI TTEE Mr Charles Mak Ming Ying Chairman Mr Philip Eng Heng Nee Mr Wee Joo Yeow Mr Sithichai Chaikriangkrai NO MI NATING C OMM ITTE E Mr Weerawong Chittmittrapap Chairman Mr Chan Heng Wing Mr Chotiphat Bijananda R EM UNERATION CO MMI TTEE Mr Philip Eng Heng Nee Chairman Mr Charles Mak Ming Ying Mr Panote Sirivadhanabhakdi GR O UP MA NAGEMEN T Mr Lim Ee Seng Group Chief Executive Officer Mr Cheang Kok Kheong Chief Executive Officer, Development & Property, Singapore Mr Chia Khong Shoong Chief Financial Officer Mr Choe Peng Sum Chief Executive Officer, Frasers Hospitality Pte Ltd Mr Charles Mak Ming Ying Non-Executive and Independent Director Mr Chan Heng Wing Non-Executive and Independent Director Mr Philip Eng Heng Nee Non-Executive and Independent Director Mr Wee Joo Yeow Non-Executive and Independent Director Mr Weerawong Chittmittrapap Non-Executive and Independent Director Mr Chotiphat Bijananda Non-Executive and Non-Independent Director Mr Panote Sirivadhanabhakdi Non-Executive and Non-Independent Director Mr Sithichai Chaikriangkrai Non-Executive and Non-Independent Director BOA RD EXECUTIV E COM MI TTEE Mr Charoen Sirivadhanabhakdi Chairman Mr Charles Mak Ming Ying Vice Chairman Mr Chotiphat Bijananda Vice Chairman Mr Wee Joo Yeow Mr Panote Sirivadhanabhakdi Mr Sithichai Chaikriangkrai 10 GROUP MANAGE MENT (C ONT’D) Mr Tang Kok Kai Christopher Chief Executive Officer, Commercial Chief Executive Officer, Greater China Mr Uten Lohachitpitaks Chief Investment Officer CO MPA NY SEC RETA RI AT Mr Piya Treruangrachada Group Company Secretary REGI STERED OFFIC E #21-00 Alexandra Point 438 Alexandra Road Singapore 119958 Tel: (65) 6276 4882 Fax: (65) 6276 6328 Website: fraserscentrepoint.com SHA RE REGI STRA R Tricor Barbinder Share Registration Services 80 Robinson Road #02-00 Singapore 068898 Tel: (65) 6236 3333 Fax: (65) 6236 4399 A UDI TOR Ernst & Young LLP Partner-in-charge: Mr Nagaraj Sivaram PRIN CI PA L B ANK ERS Australia and New Zealand Banking Group Limited DBS Bank Ltd National Australia Bank Limited Oversea-Chinese Banking Corporation Limited Standard Chartered Bank Sumitomo Mitsui Banking Corporation United Overseas Bank Limited Westpac Banking Corporation FRASERS CENTREPOINT LIMITED & SUBSIDIARIES G R O U P S T R U C T U R E d n a l a r t s u A y t i l a t i p s o H l a i c r e m m o C l a i t n e d i s e R d n a l a r t s u A s r e s a r F y t i l a t i p s o H s r e s a r F s r e s a r F s r e s a r F y t i l a t i p s o H l a i c r e m m o C i t n o p e r t n e C t s u r T t s u r T t s u r T s r e s a r F i t n o p e r t n e C & e c fi f O l a i c r e m m o C s r e s a r F i t n o p e r t n e C s l l a M s r e s a r F y t r e p o r P s r e s a r F i t n o p e r t n e C s e m o H s l e t o H d e c i v r e S a i l a r t s u A / s e c n e d i s e R t n e m e g a n a M t e s s A d n a e c fi f O , l i a t e R e c a p S s s e n i s u B s a e s r e v O e r o p a g n S i i g n d a e L n a i l a r t s u A - i t l u M t n e m g e s r e p o l e v e D / r e n w O d n a r o t a r e p O y l l a b o l G e l b a l a c S y t i l a t i p s o H r o t a r e p O i g n w o r G s s e n i s u B t n e m e g a n a M t e s s A l i a t e R t s e g r a L e h t f o e n O n i s r o t a r e p O / s r e n w O l l a M p o T e h t f o e n O n i s r e p o l e v e D l a i t n e d i s e R e r o p a g n S i e r o p a g n S i 11 ANNUAL REPORT2014 F I N A N C I A L H I G H L I G H T S 2010 2011 2012 2013 2014 Revenue ($’m) 1,708 2,234 1,412 2,053 2,735 Profit before interest, fair value change on 503 578 390 571 689 investment properties, taxation and exceptional items ($’m) Profit before tax ($’m) Before fair value change on investment properties and exceptional items 441 525 330 510 678 After fair value change on investment properties 621 784 721 832 697 and exceptional items Attributable profit ($’m) Before fair value change and exceptional items After fair value change and exceptional items 333 484 395 603 252 643 401 722 501 501 Earnings per share (cents) Attributable profit before fair value change on investment properties and exceptional items 42.9 51.7 33.5 53.2 20.41 Attributable profit after fair value change on 63.0 79.4 85.4 95.9 20.41 investment properties and exceptional items Dividend per share Ordinary shares (cents) Preference shares ($) 30.5 60.0 26.6 30.1 19.9 Nil 26.6 Nil 8.61 Nil Net asset value (share capital & reserves) ($’m) 3,960 4,384 4,932 5,451 6,436 Net asset value per share ($) 4.82 5.38 6.11 6.80 2.23* Return on average shareholders’ equity (%) Profit before interest, fair value change on 13.1 13.9 8.4 11.0 11.6 investment properties, taxation & exceptional items Attributable profit before fair value change on investment properties & exceptional items 8.6 9.5 5.4 7.7 8.4 1 Calculated based on 2,889,812,572 shares in issue after FCL’s listing on SGX-ST on 9 January 2014 12 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESQueens Riverside, Perth, Australia Central Park, Sydney, Australia 13 C H A I R M A N ’ S S T A T E M E N T Charoen Sirivadhanabhakdi Chairman 14 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESWE MADE SIGNIFICANT STRIDES IN OUR STRATEGY TO ACHIEVE BALANCED GROWTH ACROSS GEOGRAPHIES AND PROPERTY SEGMENTS AND IN EXTENDING OUR REIT STRATEGY. Dear Fellow Shareholders, FY2013/14 has been an important year for Frasers Centrepoint Limited (FCL). Beginning with our relisting on the Main Board of the SGX-ST, this year has been a busy year with numerous highlights. RECOR D REVENUE AND C O RE EAR NINGS IN F Y 2013/ 14 Financially, our Group performed well this year. We achieved a record high revenue of S$2.7 billion. Our core earnings, or attributable profit before fair value change and exceptional items, also reached an all-time high of S$501.0 million. This strong performance is an encouraging indication that we are successfully executing our strategies to deliver sustainable earnings growth. In view of the good operating performance this year, the Board of Directors has proposed a final dividend of 6.2 Singapore cents. Including our interim dividend of 2.4 Singapore cents, FCL’s total dividend for FY2013/14 is 8.6 Singapore cents, which translates to a payout of approximately 50% of our core earnings. S UC C ESSFU L E XECUTION OF GR OWTH STRATEGIES If I were to describe FY2013/14, I would say that it was a year where FCL fully demonstrated our ability to successfully execute our key growth strategies. In particular, we made significant strides in our strategy to achieve balanced growth across geographies and property segments and in extending our REIT strategy. Achieving balanced growth via acquisition of Australand Growing FCL’s asset portfolio in a balanced manner is an important imperative to delivering stable earnings and achieving sustainable growth. A balanced portfolio will allow FCL to diversify and avoid undue reliance on any specific geography or property segment. In addition, stable earnings mean clearer visibility of cash flows, which creates flexibility and improves FCL’s ability to make strategic capital management decisions. As part of this balanced portfolio strategy, FCL had planned on achieving several key strategic objectives over the medium term, including increasing the proportion of overseas earnings and recurring income, as well as enhancing our platform in our core overseas markets, including Australia. To achieve these objectives organically, it would have taken five to ten years for our efforts to reach fruition. This approach, however, is not without its risks. The acquisition of Australand allows FCL to achieve our targets immediately and reach the level of scale and depth in Australia that we sought. With the acquisition of Australand, FCL now has scale and depth in two of its core markets – Singapore and Australia, where it stands among the top players in all the asset classes that it operates in. This allows FCL to access deal flow, achieve synergies, and enjoy economies of scale. Looking at FCL’s asset breakdown by geographical segment as at 30 September 2014, our assets in Australia and Singapore are about equal, with both making up a little over 40% each. Our proportion of recurring income to development income will also become more balanced, and we should see this from the next financial year as FCL takes in full-year contributions from Australand. Extending REIT strategy with FHT listing and asset injection into FCT Our REIT strategy is one of FCL’s key growth strategies; we see REITs as the right platform to efficiently hold stabilised investment properties. Our REITs are not only an efficient capital recycling platform, they also generate an additional source of revenue for FCL in the form of asset management fees, thereby strengthening our income base. Importantly, our REITs allow FCL to generate quality earnings throughout the entire real estate value chain. 15 ANNUAL REPORT2014C H A I R M A N ’ S S T A T E M E N T Phase 3 of Chengdu Logistics Hub, Chengdu, China We achieved a milestone in our REIT strategy this year with the listing of Frasers Hospitality Trust (FHT). A hospitality REIT is a logical extension of FCL’s REIT strategy. FCL already has a retail REIT, Frasers Centrepoint Trust (FCT), to support the growth of our retail business, and an office and business space REIT, Frasers Commercial Trust (FCOT), to support the growth of our office business. A hospitality REIT will help support the growth of our fast-growing hospitality business, and this plan was realised when FHT was listed in July 2014 with six serviced residences and six hotels. During the year we also completed the divestment of Changi City Point (CCP) to FCT in June. CCP had been ear-marked for injection into FCT for some time. We recorded a healthy profit on this divestment, which has been reflected in our financial performance. 16 R EAC HI NG A NEW LEV EL OF GR OWT H This year, with FCL’s relisting on the SGX Main Board and successful execution of its key growth strategies, FCL has reached a new level of growth. As we look ahead, we will remain focused on our sustainable growth tripod – Singapore, Australia and China. Singapore is FCL’s home market, a market that we’re very familiar with and well entrenched in. We will seek to maintain our position as a market leader in Singapore and focus on the disciplined execution of our growth strategies. With Australand, we are now equally deeply rooted in Australia, and our immediate priority is to ensure that we do a good job with the integration of our Australian businesses. We will continue to grow and strengthen our two strong legs of Singapore and Australia, even as we look for opportunities over the medium term to strengthen our third leg of China. In our view, China is a country that we in Asia cannot credibly ignore. The macro trends of rapid urbanisation and rising wealth all bode well for the real estate market in China over the long term. China’s real estate market is not the easiest market to be in, but FCL has been doing business in China for over a decade now, and we have a solid platform in our three chosen cities of Shanghai, Chengdu and Suzhou, from which to grow our position. We are keeping a close eye on China for opportunities in the medium term. The global environment is increasingly volatile, and cycles have shortened. While the environment may present challenges, opportunities also often emerge. FCL’s growth strategies are designed precisely to enable FCL to trade through cycles, and we have a proven track record of doing that. FCL is better positioned now than ever before to continue making waves in the global real estate sector, and to offer opportunities for all our stakeholders to grow with us. FRASERS CENTREPOINT LIMITED & SUBSIDIARIESFCL IS BETTER POSITIONED NOW THAN EVER BEFORE TO CONTINUE MAKING WAVES IN THE GLOBAL REAL ESTATE SECTOR, AND TO OFFER OPPORTUNITIES FOR ALL OUR STAKEHOLDERS TO GROW WITH US. PRUDENT CAPITAL MANAGEME NT As FCL works towards fulfilling our growth ambitions, we are ever-mindful of the importance of prudent capital management. FCL’s net debt to equity stood at 95% as at 30 September 2014. Given the capital intensive nature of our industry, we believe that a sensible level of gearing is appropriate for a growing company like FCL. We are comfortable with a level of between 80% and 100%. FCL is well-equipped to manage our gearing. Firstly, FCL has clear earnings visibility with S$3.9 billion of unrecognised development revenue at year end. Secondly, FCL has a sizeable proportion of recurring income in our income mix. Last but not least, FCL has a number of investment properties within our portfolio that may be suitable assets for injection into our listed REITs at the right time, if the REITs are keen. As part of our disciplined capital management efforts, FCL has also been working to diversify our funding sources and bolster our balance sheet. During the year, FCL increased our multi-currency medium term note programme (MTN programme) from S$1 billion to S$3 billion. FCL issued our first perpetual capital securities under this MTN programme in September. The S$600 million, 4.88% subordinated perpetual capital securities was very well received. In October, FCL issued another S$200 million seven-year 3.95% fixed-rate notes, and we shared with shareholders our intention to issue additional perpetual capital securities. We believe that our attention to prudent capital management will enable FCL to achieve a sustainable capital structure that will position us strategically for long-term growth. Rhodes Building F, Sydney, Australia 17 ANNUAL REPORT2014C H A I R M A N ’ S S T A T E M E N T Fraser Suites, Singapore AC KNOWLEDGEMEN TS FCL is where it is today because of the support of our many stakeholders. To my esteemed colleagues on the Board, thank you for the valuable guidance. I want to express my sincere gratitude too, to our business partners, financial advisers, bankers, customers and shareholders, for their unwavering support of FCL. On behalf of the Board, I would also like to thank the Boards of FCT, FCOT and FHT, for their stewardship of our listed REITs. Last but not least, I would like to express my deep appreciation to our employees for their dedication and hard work. 18 On behalf of the Board, I would like to assure our stakeholders that FCL will strive to continue delivering value to all our stakeholders. We will maintain a high standard of corporate governance and transparency, and we are gratified that our efforts in this area have been recognised with FCL winning the Most Transparent Company Award 2014 in the New Issues Category at the 15th SIAS Investors’ Choice Awards in our first year of listing. We will also bear in mind our role as a responsible corporate citizen and strive to keep sustainability as a cornerstone of our growth strategies. Charoen Sirivadhanabhakdi Chairman FRASERS CENTREPOINT LIMITED & SUBSIDIARIESE I G H T C O U R T YA R D S S I N G A P O R E 19 B O A R D O F D I R E C T O R S CHAROEN SIRIVADHANABHAKDI, 70 KHUNYING WANNA SIRIVADHANABHAKDI, 71 Non-Executive and Non-Independent Chairman Non-Executive and Non-Independent Vice Chairman Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 11 months : 25 Oct 2013 : - Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 8 months : 07 Jan 2014 : - Board committee(s) served on • Board Executive Committee (Chairman) Board committee(s) served on Nil Academic & Professional Qualification(s) • Honorary Doctoral Degree in Agricultural Business Administration, Maejo Institute of Agricultural Technology, Thailand • Honorary Doctoral Degree in Industrial Technology, Chandrakasem Rajabhat University, Thailand Academic & Professional Qualification(s) • Honorary Doctoral Degree in Bio-Technology, Ramkhamhaeng University, Thailand • Honorary Doctoral Degree in Agricultural Business Administration, Maejo Institute of Agricultural Technology, Thailand • Honorary Doctoral Degree in Management, Huachiew • Honorary Doctoral Degree in Business Administration, Chalermprakiet University, Thailand Chiang Mai University, Thailand • Honorary Doctoral Degree in Business Administration, • Honorary Doctor of Philosophy in Social Sciences, Mae Fah Eastern Asia University, Thailand Luang University, Thailand • Honorary Doctor of Philosophy in Business Administration, • Honorary Doctoral Degree in Business Administration and Information Technology, Rajamangala University of Technology Tawan-ok, Thailand Present Directorships (as at 30 Sep 2014) Listed companies • Berli Jucker Public Company Limited (Vice Chairman) • Thai Beverage Public Company Limited (Vice Chairman) • Fraser and Neave, Limited (Vice Chairman) Others • Beer Thip Brewery (1991) Co., Ltd. (Chairman) • Sangsom Group of Companies (Chairman) • TCC Capital Land Limited (Vice Chairman) • TCC Holding Co., Ltd. (Vice Chairman of Executive Board) Major Appointments (other than Directorships) Nil Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) Nil Mae Fah Luang University, Thailand • Honorary Doctoral Degree in Management, Rajamangala University of Technology Suvarnabhumi, Thailand • Honorary Doctoral Degree in International Business Administration, University of the Thai Chamber of Commerce, Thailand • Honorary Doctoral Degree in Sciences and Food Technology, Rajamangala University of Technology Lanna, Thailand • Honorary Doctoral Degree in Hospitality and Tourism, Christian University of Thailand, Thailand Present Directorships (as at 30 Sep 2014) Listed companies • Berli Jucker Public Company Limited (Chairman) • Thai Beverage Public Company Limited (Chairman) • Fraser and Neave, Limited (Chairman) Others • Beer Thai (1991) Public Company Limited (Chairman) • Red Bull Distillery Group of Companies (Chairman) • Southeast Group Co., Ltd. (Chairman) • TCC Holding Co., Ltd. (Chairman) • TCC Land Co., Ltd. (Chairman) Major Appointments (other than Directorships) Nil Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) Nil Others Nil 20 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESCHARLES MAK MING YING, 62 CHAN HENG WING, 68 Non-Executive and Independent Director Non-Executive and Independent Director Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 11 months : 25 Oct 2013 : - Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 11 months : 25 Oct 2013 : 07 Jan 2014 Board committee(s) served on • Audit Committee (Chairman) • Board Executive Committee (Vice Chairman) • Remuneration Committee • Risk Management Committee Academic & Professional Qualification(s) • Master of Business Administration, PACE University, USA • Bachelor of Business Administration, PACE University, USA Present Directorships (as at 30 Sep 2014) Listed companies Nil Major Appointments (other than Directorships) • Morgan Stanley Asia Pacific (Vice Chairman) • Morgan Stanley International Wealth Management (President) Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) • Fraser and Neave, Limited Others • Senior Advisor to Morgan Stanley Asia’s Investment Banking Division • Previously the Chairman and Director of Bank Morgan Stanley AG • Previously a Director in Morgan Stanley Asia Limited and a member of Morgan Stanley’s Asia Pacific Executive Committee, the Morgan Stanley Wealth Management Committee and the International Operating Committee • Previously Managing Director and Head of Morgan Stanley Board committee(s) served on • Nominating Committee • Risk Management Committee Academic & Professional Qualification(s) • Master of Science, Columbia Graduate School of Journalism, USA • Master of Arts, University of Singapore, Singapore • Bachelor of Arts (Honours), University of Singapore, Singapore Present Directorships (as at 30 Sep 2014) Listed companies • Banyan Tree Holdings Ltd. • Shanda Games Ltd. Others • Precious Quay Pte. Ltd. • Precious Treasures Pte. Ltd. Major Appointments (other than Directorships) • Ministry of Foreign Affairs : Singapore’s Non-Resident High Commissioner to Bangladesh and Senior Advisor • Milken Institute Asia Center (Chairman) Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) • Fraser and Neave, Limited Others • Previously Managing Director of Temasek Holdings • Previously Singapore’s Consul General to Hong Kong and Shanghai Asia Pacific Private Wealth Management • Previously Singapore’s Ambassador to Thailand • Previously Executive Director and Senior Investment Adviser of Morgan Stanley’s Private Wealth Management Group 21 ANNUAL REPORT2014B O A R D O F D I R E C T O R S PHILIP ENG HENG NEE, 68 WEE JOO YEOW, 67 Non-Executive and Independent Director Non-Executive and Independent Director Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 11 months : 25 Oct 2013 : - Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 6 months : 10 Mar 2014 : - Board committee(s) served on • Remuneration Committee (Chairman) • Audit Committee Board committee(s) served on • Executive Committee • Audit Committee Academic & Professional Qualification(s) • Bachelor of Commerce in Accountancy, University of New Academic & Professional Qualification(s) • Master of Business Administration, New York University, South Wales, Australia USA • Associate Member, Institute of Chartered Accountants in • Bachelor of Business Administration (BBA Hons), University Australia of Singapore Present Directorships (as at 30 Sep 2014) Listed companies • Mapletree Industrial Trust Management Ltd • PACC Offshore Services Holdings Ltd • Oversea-Chinese Banking Corporation Limited Major Appointments (other than Directorships) Nil Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) • Orix Leasing Singapore Limited • Singapore-Bintan Resort Holdings Pte Ltd Others Nil Present Directorships (as at 30 Sep 2014) Listed companies • Ezra Holdings Limited • Frasers Centrepoint Asset Management Ltd. (Chairman) • MDR Limited (Chairman) • PT Adira Dinamika Multi Finance Tbk (Commissioner) • The Hour Glass Limited Others • Frasers Australand Pty Ltd • Hektar Asset Management Sdn Bhd • Heliconia Capital Management Pte. Ltd. • KK Women’s and Children’s Hospital Pte. Ltd. • NTUC Income • Singapore Health Services Pte. Ltd. • Vanda 1 Investments Pte. Ltd. Major Appointments (other than Directorships) • Ministry of Foreign Affairs : Singapore’s Non-Resident High Commissioner to Canada Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) • Asia Pacific Breweries Limited • Fraser and Neave, Limited Others Nil 22 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESWEERAWONG CHITTMITTRAPAP, 56 CHOTIPHAT BIJANANDA, 51 Non-Executive and Independent Director Non-Executive and Non-Independent Director Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 11 months : 25 Oct 2013 : - Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 1 year 6 months : 08 Mar 2013 : 07 Jan 2014 Board committee(s) served on • Nominating Committee (Chairman) • Risk Management Committee Academic & Professional Qualification(s) • Thai Barrister-at-Law and the first Thai lawyer admitted to the New York State Bar • Master of Law, University of Pennsylvania, USA • Bachelor of Law, Chulalongkorn University, Thailand Present Directorships (as at 30 Sep 2014) Listed companies • Berli Jucker Public Company Limited • SCB Life Assurance Public Company Limited • Thai Airways International Public Company Limited • Siam Commercial Bank Public Company Limited Others • National Power Supply Public Company Limited Major Appointments (other than Directorships) • Thai Institute of Directors (Special Lecturer) Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) • Minor International Public Company Limited • Fraser and Neave, Limited • Siam Food Public Company Limited • Nok Airlines Public Company Limited • Golden Land Property Development Public Company Limited • GMM Grammy Public Company Limited • Weerawong, Chinnavat & Peangpanor Limited Others Nil Board committee(s) served on • Risk Management Committee (Chairman) • Board Executive Committee (Vice Chairman) • Nominating Committee Academic & Professional Qualification(s) • Master of Business Administration, Finance, University of Missouri, USA • Bachelor of Laws, Thammasat University, Thailand Present Directorships (as at 30 Sep 2014) Listed companies • Sermsuk Public Company Limited • Golden Land Property Development Public Company Limited • Fraser and Neave, Limited Others • Australand Holdings Limited • Australand Property Limited • Australand Investments Limited • Frasers Australand Pty Ltd • Southeast Group Co., Ltd. (President) • Southeast Insurance Public Co., Ltd. (Chairman of Executive Board) • Southeast Life Insurance Public Co., Ltd. (Chairman of Executive Board) • Southeast Capital Co., Ltd. (Chairman of Executive Board) • TCC Assets Limited • TCC Technology Co., Ltd. Major Appointments (other than Directorships) Nil Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) Nil Others Nil 23 ANNUAL REPORT2014 B O A R D O F D I R E C T O R S PANOTE SIRIVADHANABHAKDI, 37 SITHICHAI CHAIKRIANGKRAI, 60 Non-Executive and Non-Independent Director Non-Executive and Non-Independent Director Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 1 year : 08 Mar 2013 : 07 Jan 2014 Date of first appointment as a director Date of last re-election as a director Length of service as a director (as at 30 Sep 2014) : 1 year : 07 Aug 2013 : 07 Jan 2014 6 months 1 month Board committee(s) served on • Board Executive Committee • Remuneration Committee • Risk Management Committee Board committee(s) served on • Board Executive Committee • Audit Committee • Risk Management Committee Academic & Professional Qualification(s) • Master of Science in Analysis, Design and Management of Information System, London School of Economics and Political Science, UK Academic & Professional Qualification(s) • Bachelor of Accountancy (First Class Honours), Thammasat University, Thailand • Diploma in Computer Management, Chulalongkorn • Bachelor of Science in Manufacturing Engineering, Boston University, Thailand University, USA • Certificate of the Mini MBA Leadership Management, • Certificate in Industrial Engineering and Economics, Kasetsart University, Thailand Massachusetts University, USA Present Directorships (as at 30 Sep 2014) Listed companies • Berli Jucker Public Company Limited • Golden Land Property Development Public Company Limited (Vice Chairman) • Siam Food Products Public Company Limited • Thai Beverage Public Company Limited • Univentures Public Company Limited Others • Australand Holdings Limited • Australand Property Limited • Australand Investments Limited • Beer Thip Brewery (1991) Co., Ltd. • Blairmhor Distillers Limited • Blairmhor Limited • Frasers Australand Pty Ltd • InterBev (Singapore) Limited • International Beverage Holdings (China) Limited • International Beverage Holdings Limited • International Beverage Holdings (UK) Limited • Sura Bangyikhan Group of Companies Present Directorships (as at 30 Sep 2014) Listed companies • Thai Beverage Public Company Limited • Berli Jucker Public Company Limited • Golden Land Property Development Public Company Limited • Oishi Group Public Company Limited • Siam Food Products Public Company Limited • Sermsuk Public Company Limited • Univentures Public Company Limited • Fraser and Neave, Limited Others • InterBev Investment Limited • International Beverage Holdings Limited • Certain Subsidiaries of Thai Beverage Public Company Limited • Certain Subsidiaries of Berli Jucker Public Company Limited • Certain Subsidiaries of Oishi Group Public Company Limited • Certain Subsidiaries of Siam Food Products Public Company Limited • Certain Subsidiaries of Sermsuk Public Company Limited Major Appointments (other than Directorships) • Thai Beverage Public Company Limited (Chief Financial Major Appointments (other than Directorships) • Univentures Public Company Limited (Chief Executive Officer) Officer) Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) • Fraser and Neave, Limited Past Directorships in listed companies held over the preceding three years (from 01 Oct 2011 to 30 Sep 2014) Nil Others Nil Others Nil 24 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES F L A M I N G O VA L L E Y S I N G A P O R E 25 G R O U P M A N A G E M E N T LIM EE SENG, PBM, 63 CHIA KHONG SHOONG, 43 UTEN LOHACHITPITAKS, 41 Group Chief Executive Officer Frasers Centrepoint Limited Date Appointed : 15 October 2004 Chief Financial Officer Frasers Centrepoint Limited Date Appointed : 2 March 2009 Chief Investment Officer Frasers Centrepoint Limited Date Appointed : 1 October 2013 Mr Chia is responsible for all aspects of FCL Group’s finance. He has direct oversight of the Finance, Corporate Planning, Tax, Treasury and Group Communications units. Academic & Professional Qualifications • Bachelor of Commerce (Accounting and Finance), University of Western Australia • Master of Philosophy (Management Studies), Cambridge University Working Experience • 1996 – 2004 Vice President, Global Investment Banking, Citigroup / Salomon Smith Barney / Schroders • 2004 – 2008 Director, Investment Banking and Global Banking, The Hongkong & Shanghai Banking Corporation Ltd Significant Directorships (as at 30 Sep 2014) • Frasers Centrepoint Asset Management Ltd, Manager of Frasers Centrepoint Trust • Frasers Centrepoint Asset Management (Commercial) Limited, Manager of Frasers Commercial Trust Mr Lohachitpitaks is responsible for FCL Group’s capital markets transactions, managing and monitoring the Group’s portfolio of assets, devising strategies for acquisitions and liaising with investors. Academic & Professional Qualifications • Bachelor of Business Administration, Assumption University, Thailand • Master of Business Administration, Assumption University, Thailand Working Experience • 1996 – 2005 Vice President, Corporate & Investment Banking Group, DBS Bank Ltd • 2005 – 2006 Director, Investment Banking Division, United Overseas Bank (Thai) Public Company Limited • 2006 – 2013 Managing Director, Strategic Advisory, DBS Bank Ltd Significant Directorships (as at 30 Sep 2014) Nil Mr Lim is responsible for executing FCL Group’s strategies and policies and is accountable to the Board of Directors for the management and performance of the Group’s entire portfolio which spans more than 20 countries. Academic & Professional Qualifications • Bachelor of Engineering (Civil), University of Singapore • Master of Science (Project Management), National University of Singapore • Member, The Institution of Engineers, Singapore • Fellow, Singapore Institute of Directors Working Experience • 1982 – 1989 Project Manager, Singapore Land Ltd • 1989 – 1996 General Manager (Property Division), First Capital Corporation Ltd • 1996 – 2004 Managing Director, MCL Land Limited Significant Directorships (as at 30 Sep 2014) • Frasers Australand Pty Ltd • Frasers Centrepoint Asset Management Ltd, Manager of Frasers Centrepoint Trust • Frasers Centrepoint Asset Management (Commercial) Limited, Manager of Frasers Commercial Trust • Frasers Hospitality Asset Management Pte Ltd, Manager of Frasers Hospitality Trust 26 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESCHEANG KOK KHEONG, 59 CHOE PENG SUM, 54 TANG KOK KAI CHRISTOPHER, 53 Chief Executive Officer Development and Property Frasers Centrepoint Limited Date Appointed : 1 October 2010 Chief Executive Officer Frasers Hospitality Pte Ltd Date Appointed : 19 June 2007 Mr Cheang oversees the Development and Property Division that builds residential developments under the Frasers Centrepoint Homes brand. He has oversight of the design and project management of developments, ensuring quality construction, cost and time control and compliance with all regulatory and project requirements. Academic & Professional Qualifications • Bachelor of Architecture, National University of Singapore • Master of Science in Tourism, Planning and Development, University of Surrey Working Experience • 1994 – 1998 Senior Manager, Projects, DBS Land Limited • 1998 – 2002 Senior Manager, Projects, Ascendas Land (Singapore) Pte Ltd • 2002 – 2005 General Manager, Projects, MCL Land Limited • 2007 – 2010 Chief Operating Officer, Development and Property, Frasers Centrepoint Limited Significant Directorships (as at 30 Sep 2014) Nil Mr Choe oversees the Frasers Hospitality group’s business from investments, business development, global expansion of the chain of gold-standard serviced residences and hotels worldwide, to funds and asset management of hotels and serviced residences on a global mandate. Academic & Professional Qualifications • Bachelor of Science with Distinction, Cornell University, New York • President’s Honor Roll, Washington State University • Executive Development Programme, International College of Hospitality Administration, BRIG, Switzerland Working Experience • 1984 – 1994 Executive Assistant Manager, Shangri- La Hotel, Singapore • 1994 – 1996 Resident Manager, Portman Shangri- La Hotel, Shanghai • 1996 – 2007 General Manager of Hospitality, Frasers Centrepoint Limited Significant Directorships (as at 30 Sep 2014) • Frasers Hospitality Asset Management Pte Ltd, Manager of Frasers Hospitality Trust Chief Executive Officer Commercial1 & Greater China2 Frasers Centrepoint Limited Date Appointed : 1 October 20061 and 1 October 20102 Mr Tang oversees FCL’s business in the Commercial real estate space of Retail Malls and Offices. He oversees the entire value chain of investment, development and property management to asset and fund management. Mr Tang also oversees FCL’s property interests in China, providing leadership to the China team in the residential and commercial business there. Academic & Professional Qualifications • Bachelor of Science, National University of Singapore • Master of Business Administration, National University of Singapore Working Experience • 1997 – 2000 Senior Manager, Strategic Planning and Asset Management, DBS Land Limited • 2000 – 2001 Vice President, Private Equity, DBS Bank Ltd • 2001 – 2002 General Manager, Strategic Planning and Asset Management, Frasers Centrepoint Limited • 2002 – 2006 General Manager, Strategic Planning and Asset Management, Fraser and Neave, Limited • 2006 – 2010 Chief Executive Officer, Frasers Centrepoint Asset Management Ltd Significant Directorships (as at 30 Sep 2014) • Frasers Centrepoint Asset Management Ltd, Manager of Frasers Centrepoint Trust • Frasers Centrepoint Asset Management (Commercial) Limited, Manager of Frasers Commercial Trust • Hektar Asset Management Sdn Bhd, Manager of Hektar REIT 27 ANNUAL REPORT2014 G R O U P C E O ’ S B U S I N E S S R E V I E W Lim Ee Seng Group CEO 28 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESFCL’S PERFORMANCE THIS YEAR IS A VALIDATION OF THE GROUP’S OVERSEAS AND REIT STRATEGIES. FCL ACHIEVED RECORD REVENUE AND ATTRIBUTABLE PROFIT BEFORE FAIR VALUE CHANGE AND EXCEPTIONAL ITEMS (APBFE) IN FY2013/14. Group revenue grew by 33% to S$2,734.9 million, while core earnings (APBFE) grew by 25% to S$501.0 million. This robust growth was largely driven by completions of overseas development projects in Australia, China and the United Kingdom. During the year, the Group’s divestment of a retail asset, Changi City Point, to its retail REIT, Frasers Centrepoint Trust (FCT), also contributed to the increase. On a balance sheet level, we ended the year with total assets of S$16.9 billion, a significant increase of 62% from last year largely due to the acquisition of Australand. Meanwhile our gearing, or net debt/equity, stood at 95% as at 30 September 2014, within our comfort zone of a gearing level of between 80% and 100%. Looking at some key ratios, the Group’s FY2013/14 earnings per share (EPS) and net asset value (NAV)1 per share as at 30 September 2014 have both increased to 20.39 Singapore cents and S$2.23 respectively. Our return on equity2 also went up from 7.7% to 8.4%. GR OWTH THROUGH OUR K EY S TR ATE GIES In FY2013/14, we executed three key corporate actions that demonstrated the Group’s commitment to carrying out our growth strategies of growing our business and asset portfolio in a balanced manner across geographies and property segments, as well as optimising capital productivity and strengthening our income base through our REIT platforms. Achieving balanced growth As part of the Group’s strategy of growing its business and asset portfolio in a balanced manner across geographies and property segments, FCL announced on 4 June 2014 that it had submitted an indicative non-binding proposal to acquire Australian Securities Exchange (ASX)-listed Australand Property Group (Australand), one of Australia’s leading diversified property groups. Following the completion of a four-week due diligence process, FCL launched a conditional cash offer (Offer) on 7 July 2014 to acquire all stapled securities in Australand. The Offer valued Australand at approximately A$2.6 billion (S$3.1 billion). FCL received acceptances of approximately 56.8% of the issued stapled securities of Australand on 7 August 2014 and the Offer was declared unconditional. At the close of the offer period on 4 September 2014, FCL held an interest of 98.4% of the issued stapled securities of Australand. On 24 September 2014, FCL commenced a compulsory acquisition of the outstanding Australand securities that it did not already own. As of 31 October 2014, FCL successfully acquired 100% of Australand, and Australand securities were delisted from the close of trading hours on 3 November 2014. The acquisition of Australand is a transformational transaction that we expect will deliver significant benefits, including: • Substantial increase in asset and profit contribution from outside of Singapore; • Improved sustainability of earnings through increased contribution from recurring income; • Access to a quality platform with immediate scale in Australia, a core market; • Ownership of an attractive commercial and industrial portfolio with development capabilities; and • Enhanced residential development capabilities in Australia. 1 After fair value adjustments on investment properties and exceptional items 2 APBFE over Average Shareholder Fund 29 ANNUAL REPORT2014 G R O U P C E O ’ S B U S I N E S S R E V I E W B U S I N E S S R E V I E W Hospitality REIT On 30 June 2014, FCL, through our wholly owned subsidiaries Frasers Hospitality Asset Management Pte. Ltd. and Frasers Hospitality Trust Management Pte. Ltd., launched an initial public offering (IPO) of stapled securities in Frasers Hospitality Trust (FHT). FCL received gross proceeds of S$654.7 million from the injection of six of our serviced residences into FHT. FHT’s initial portfolio also comprised six international hotel assets injected by FCL’s majority shareholder, the TCC Group, making FHT the first hotel and serviced residence stapled trust with a global mandate3 to be listed on the SGX-ST. Following the successful IPO, which was 19 times subscribed, FHT was listed on the Main Board of the SGX-ST on 14 July 2014. Divestment of CCP In line with the group’s REIT strategy, FCL also completed the divestment of Changi City Point to FCT during the year. Changi City Point was held through Ascendas Frasers Pte. Ltd., a 50:50 joint venture between FCL and Ascendas Development Pte. Ltd. FCL’s 50% share of the gross proceeds from the divestment was S$152.5 million. 3 Except Thailand Thrive Parkside, Melbourne, Australia Why Australia specifically? Australia is a core market for FCL. The Group chose to enter the Australian market over a decade ago due to favourable fundamentals, including its transparent regulatory environment, strong corporate governance, as well as its deep and mature property market. While Australia is not a market with high margins and growth rates, the growth there is stable and sustainable. High margins, at the end of the day, do not last, and we want to be in a market for the long term. We already have an established platform and good brand recognition in Australia, but scale and depth matter in the real estate business. With scale and depth, we can do so much more in Australia, and that is exactly what the acquisition is about. 30 Which brings me to, why Australand? Australand’s portfolio complements FCL’s Australian business in terms of geography and product segments; there is very little overlap in our areas of business. In addition, Australand has a platform that is well developed, scalable, profitable, and an experienced and well-regarded management team. So what FCL acquired is a true quality platform with immediate scale in Australia. I am pleased to note that the acquisition of Australand was retroactively approved by FCL’s shareholders at an Extraordinary General Meeting convened on 12 November 2014. FRASERS CENTREPOINT LIMITED & SUBSIDIARIESG R O U P C E O ’ S B U S I N E S S R E V I E W DEVELOPMENT PROPERTIES Eight Courtyards, Singapore Baitang One, Suzhou, China 31 G R O U P C E O ’ S B U S I N E S S R E V I E W DEV ELOPMENT PROP ERTIES Revenue from development properties increased by 33% to S$2,236 million compared to S$1,682 million last year. This was attributable to higher development revenue from overseas projects, which accounted for 61% of the Group’s overall development revenue. This growth was largely fuelled by completions in Australia, China and the United Kingdom, including Central Park and Queens Riverside in Australia, Chengdu Logistics Hub and Baitang One in Suzhou, China, and Riverside Quarter in the United Kingdom. In line with revenue growth, PBIT also increased 29% by S$111 million to S$491 million. The increase was partly offset by a decline in revenue and profitability from Singapore projects. As at 30 September 2014, development properties’ unrecognised revenue stood at about S$2.2 billion, comprising about S$1.7 billion in Singapore, S$400 million in Australia, and S$100 million in China. S INGAPORE In Singapore, we made creditable sales during the year despite the additional cooling measures introduced by the Singapore government in 2013 and large supplies entering the market. In February 2014, we launched RiverTrees Residences and sold 200 of the 300 units released for sale on the first day. To-date, 58.3% of the development has been taken up. It is of paramount importance to FCL that we keep our fingers firmly on the pulse of the market. This way, we are able to offer residential developments with the right offerings. RiverTrees Residences features superior design and home layouts, as well as product innovation, with over 80% of the units enjoying views of tropical landscaping, pools and the Punggol Reservoir. We also introduced eight Cove Houses – unique waterfront landed houses with reservoir and greenery frontage. RiverTrees Residences is a joint development with Far East Organization and Sekisui House Ltd. We also continued to see sales in other residential developments in our portfolio. Two developments launched in 2013, Q Bay Residences and executive condominium (EC) Twin Fountains, enjoyed take-up rates of 99.8% and 88.0% respectively. On average, our portfolio of residential development projects is 95% sold. During the year, Waterfront Gold, Eight Courtyards, Flamingo Valley and our Good Class Bungalows in Holland Park received their Temporary Occupation Permits (TOPs). Together, these yielded more than 1,400 units. Watertown, Singapore 32 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESSINGAPORE: Projects currently under development Effective interest (%) No. of units % of units sold % Completion Ave. selling price (S$ psf) Land cost (S$ psf) Target completion date 50.0 50.0 100.0 50.0 50.0 50.0 80.0 100.0 33.3 33.3 33.3 70.0 40.0 361 656 393 563 475 494 728 430 750 632 992 418 496 100.0 100.0 97.7 98.9 100.0 100.0 99.9 97.7 93.5 99.8 99.3 88.0 58.5 100.0 100.0 100.0 81.3 94.0 88.5 82.3 77.7 31.9 48.0 26.9 45.9 0.0 973 807 1,233 1,042 932 910 711 857 1,324 1,032 1,221 744 1,094 240 321 415 240 334 320 270 325 534 418 482 302 533 Completed Completed Completed 2QFY2014/15 1QFY2014/15 2QFY2014/15 2QFY2014/15 3QFY2014/15 2QFY2015/16 3QFY2015/16 1QFY2016/17 2QFY2015/16 2QFY2016/17 Project Waterfront Gold Eight Courtyards Flamingo Valley Waterfront Isle Seastrand Boathouse Residences Twin Waterfalls EC Palm Isles eCO Q Bay Residences Watertown Twin Fountains EC RiverTrees Residences SINGAPORE: Land bank Sites Location Effective interest (%) Est. no. of units Est. saleable area (‘m sq ft) Land cost (S$ psf ppr) Tenure Est. launch ready date North Park Residences Yishun 100.0 Sembawang EC Sembawang 80.0 TOTAL 920 670 1,590 0.7 0.7 1.4 $1,077 (includes retail) Leasehold 2QFY2014/15 $320 Leasehold 2QFY2015/16 Flamingo Valley, Singapore 33 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W Central Park, Sydney, Australia To replenish our landbank, we secured an EC site in Sembawang with a bid of S$214 million or S$320 per sq ft per plot ratio (psf ppr). We plan to capitalise on the adjacent Canberra Park, with its facilities and views, and build about 670 residences. FCL has a 20% joint venture partner, Keong Hong Holdings Limited, for this development. OVER SEAS Overseas developments saw an increase in revenue by S$1,010 million from S$344 million last year to S$1,354 million for this financial year. Consistent with the increase in revenue, PBIT from overseas developments saw an overall increase of S$201 million from last year. The growth was largely fuelled by developments in Australia, China and the United Kingdom. 34 Australia / New Zealand We have done well in Australia this year, achieving sales of over 440 units, and this does not include Australand. Sales comprised 218 units at Central Park, Sydney; 30 units at Queens Riverside, Perth; 175 units from Putney Hill, Sydney; two units at Lumiere Residences, Sydney, and 17 land lots at Frasers Landing, Mandurah. We also sold seven land lots at Coast Papamoa Beach, New Zealand. Completions in Australia this year contributed significantly to FCL’s financial performance in FY2013/14. Construction was completed for One Central Park East, Park Lane and The Mark at Central Park, and Figtree at Putney Hill in Sydney and QIII at Queens Riverside in Perth. New units at Putney Hill and Central Park will be launched in 2015. Central Park, Sydney 2014 was a year of achievements for Central Park, our A$2 billion urban regeneration project in Sydney. The completion of One Central Park’s East tower along with the completion of the Park Lane and The Mark towers saw a further 1,188 apartments delivered. Overall, as at 30 September 2014, 1,428 apartments have been completed within Central Park with only 24 apartments remaining unsold. In November, One Central Park won international recognition when it was declared the “Best Tall Building Worldwide” by Chicago’s Council on Tall Buildings and Urban Habitat, beating 87 other worthy developments around the world to the honour. In addition, this financial year saw the opening of the multi-level retail mall at Central Park with major tenants including Woolworths supermarket, Japanese retailer Daiso, Adidas, Glue, Super Dry and Footlocker. FRASERS CENTREPOINT LIMITED & SUBSIDIARIESCentral Park, Sydney, Australia Central Park, Sydney, Australia Target completion date Completed Completed Completed Completed 2QFY2014/15 3QFY2015/16 3QFY2015/16 A$252 A$257 A$256 A$29 A$29 A$100 A$100 AUSTRALASIA: Projects currently under development Projects Location interest (%) No. of units Effective % Sold @ 30 Sep 2014 Ave. selling price Land cost One Central Park Park Lane The Mark Queens Riverside (QIII) Queens Riverside (QII) Putney Hill (Stage 1) Putney Hill (Stage 2) Sydney Sydney Sydney Perth Perth Sydney Sydney Frasers Landing Western Australia Coast Papamoa Beach New Zealand 37.5 37.5 37.5 87.5 87.5 75.0 75.0 56.3 67.5 623 393 412 267 107 449 15 173 117 98.0 98.0 99.0 87.0 47.7 93.0 60.0 35.0 16.0 A$1,234 A$1,272 A$1,286 A$889 A$837 A$642 A$739 A$424 A$6 1QFY2015/16 NZ$714 NZ$6 NA AUSTRALASIA: Land bank Land bank One Central Park (JV) One Central Park (Non-JV) Frasers Landing Putney Hill (Stage 2) Queens Riverside (QI) Broadview Rise Coast Papamoa Beach TOTAL Location Sydney Sydney Western Australia Sydney Perth New Zealand New Zealand Effective interest (%) 37.5 75.0 56.3 75.0 87.5 75.0 67.5 Est. no. of units 1,1001 5243 418 327 126 29 303 2,827 Est. saleable area (’m sq ft) Land cost 1.02 0.3 1.6 0.3 0.1 0.1 1.89 5.29 A$163 A$163 A$6 A$100 A$30 NZ$77 NZ$6 Includes 632 student accommodation units Includes 0.55 million sq ft of commercial space and 0.26 million sq ft of student accommodation space 1 2 3 Includes 237 student accommodation units 4 This relates to the sale of land lots 35 ANNUAL REPORT2014 G R O U P C E O ’ S B U S I N E S S R E V I E W Gemdale MegaCity Construction continues for Phase 2 of Gemdale MegaCity, Shanghai, which is made up of 2,199 high-rise dwelling units of various sizes. Phases 2A and 2B were launched in August and November 2013 respectively. As at the end of FY2013/14, we had collectively sold 1,808 (or 82.2%) out of 2,199 units in Phase 2, with sales value of over RMB 3.4 billion. Handover for Phase 2 is expected to take place in mid-2015. China In China, we achieved sales of over 1,900 units for the financial year. Suzhou Baitang During the year, 262 units in Phases 1B and 2A, and the newly completed Phase 2B were sold while Phase 3A, currently under construction, saw sales of 252 units. Chengdu Logistics Hub Construction was completed for Phase 2, which comprises two tower office blocks and an ancillary retail block with 149 office units and 14 retail units. 59 units were sold in FY2013/14. CHINA: Projects currently under development Location interest (%) No. of units Effective % Sold @ 30 Sep 14 Ave. selling price (RMB psf) Land cost (RMB psf)1 100.0 100.0 100.0 100.0 80.0 45.2 45.2 100.0 426 542 538 360 163 1,065 1,134 706 98.8 96.7 98.5 46.4 64.4 78.8 85.4 35.7 1,243 1,265 1,124 1,272 846 1,539 1,792 1,297 238 236 237 237 30 174 179 237 Target completion date Completed Completed Completed Completed Completed 3QFY2014/15 4QFY2014/15 4QFY2014/15 Effective interest (%) Est. no. of units Est. saleable area (’m sq ft) Land cost (RMB psf)1 100.0 45.2 80.0 1,356 3,884 5,240 637 637 5,877 2.0 4.3 6.3 2.8 2.8 9.1 237 179 36 Projects Baitang One (P1A) Baitang One (P1B) Baitang One (P2A) Baitang One (P2B) Suzhou Suzhou Suzhou Suzhou Chengdu Logistics Hub (P2) Chengdu Gemdale Megacity (P2A)2 Gemdale Megacity (P2B)2 Baitang One (P3A) Shanghai Shanghai Suzhou CHINA: Land bank Sites Baitang One (P3B – 3C) Gemdale Megacity (P3-6)2 Residential Location Suzhou Shanghai Chengdu Logistics Hub (P2A & 4) Chengdu Commercial TOTAL 1 Land cost includes land use tax 2 Gemdale MegaCity was accounted as an associate 36 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES Gemdale MegaCity, Shanghai, China 37 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W COMMERCIAL PROPERTIES Waterway Point, Singapore Changi City Point, Singapore 38 CO M MERCIAL PROP ERTIES Commercial Properties comprise the retail and office REITs and non-REIT retail, office and business space properties. PBIT from Commercial Properties rose 8% year-on-year to S$68 million in FY2013/14 as a result of higher cost efficiencies achieved and improved occupancy rates for the office and business space portfolio. This was achieved despite overall revenue being 2% lower at S$134 million. On the malls front, occupancy rates among the Group’s retail malls in Singapore were also healthy at close-to-full occupancy. The Centrepoint is in the midst of transformation with Metro taking over from Robinsons as the anchor tenant. Metro at The Centrepoint opened its doors in November 2014. The Group has interests in and/or manages a global commercial portfolio of 27 retail, office and business space properties (excluding Australand) totalling a net lettable area of over 8.5 million sq ft. In Singapore, there are 13 shopping malls marketed under the ‘Frasers Centrepoint Malls’ brand, one shopping mall each in China and Australia, and 12 office and business space properties in Singapore, Australia, China and Vietnam. In particular, One@Changi City, which is 50%-owned by the Group, achieved higher average rental rates and improved cost efficiency. The majority of our office and business space properties, specifically Alexandra Technopark and Valley Point Office Tower, also achieved higher rental rates and boasted close-to-full occupancy. Our REITs – FCT and Frasers Commercial Trust (FCOT) also did well, delivering record-high full-year distribution per unit (DPU) in FY2013/14. If the distributable income from FCOT’s Series A Convertible Perpetual Preferred Units had been excluded, income contribution from the REIT would have seen a 13% increase due mainly to stronger operating performance. Alexandra Technopark, Singapore 39 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W RETAIL Our portfolio of non-REIT malls continued to trade well. Valley Point Shopping Centre, a 15-year old development, has undergone upgrading works to rejuvenate the mall and keep it in sync with the surrounding developments. We look forward to the completion of construction of Waterway Point, a new mall with over 370,000 sq ft of net lettable area, at Punggol New Town. Waterway Point is expected to obtain its TOP in the second half of 2015. Leasing is underway with Uniqlo, NTUC Fairprice and Shaw Theatre Cinema confirmed as anchor tenants. In August, we unveiled Northpoint City, a new integrated development in Yishun. The mall at Northpoint City will be integrated with the existing Northpoint Shopping Centre. Combined, our Northpoint City mall will be the largest mall in the north of Singapore with over 500 retail shops. The mall will be integrated with a new air-conditioned bus interchange, have a direct shopping underpass link to Yishun MRT station, and will feature Nee Soon Central Community Club, the first community club in a mall, as well as a town square the size of ten basketball courts for community activities. Above these sits a 920-unit private residential development, North Park Residences. Once completed in 2018, Northpoint City will become the new “Heartbeat of the North”. Frasers Centrepoint Trust FCT delivered another strong set of results for the year with new highs in DPU, income and NAV. Its gross revenue for FY2013/14 rose by 6.8% over the previous year to S$168.8 million, and net property income (NPI) was up 5.8% year-on-year to S$118.1 million. Its DPU for FY2013/14 was a record-high at 11.187 Singapore cents. NAV per unit of S$1.85 was also up from S$1.77 a year ago. The growth in revenue and net property income was driven by Changi City Point, which was acquired from Ascendas Frasers Pte. Ltd.4 in June 2014 for S$305 million, as well as the rental step-up of current leases and better rental rates achieved for new and renewed leases. FCT’s overall occupancy for its portfolio of six malls stood at 98.9% as at 30 September 2014. Causeway Point and Northpoint registered occupancy of 99.8% and 99.4%, respectively, the highest among the six malls in FCT’s portfolio. For the full year, the portfolio achieved 6.5% increase in average rental for lease renewals, compared to 7.7% in the previous year. 4 Ascendas Frasers Pte. Ltd. is a 50:50 joint venture between FCT’s sponsor, Frasers Centrepoint Limited, and Ascendas Development Pte. Ltd Northpoint City, Singapore 40 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W China Square Central, Singapore OFFICE AND BUSINESS SPACE Alexandra Point and Valley Point Office Tower achieved occupancies of 100.0% and 98.0% respectively. Me Linh Point in Ho Chi Minh City had 100% occupancy while Chengdu Logistics Hub had 74.4% occupancy. Piling has commenced for Frasers Tower, our Grade A office development at Cecil Street. When completed, it will be FCL’s largest office property in Singapore with an estimated net lettable area of 670,000 sq ft. The development will have a two-storey retail podium and is expected to obtain its TOP in 2018. Frasers Commercial Trust FCOT hit new highs with a distributable income of S$57.3 million and DPU of 8.51 Singapore cents for the full year. The DPU of 8.51 Singapore cents marks the fifth consecutive year of DPU growth since the completion of the recapitalisation exercise in 2009. These were also the highest distributable income and DPU achieved since FCOT was listed on the SGX-ST in 2006. The full year NPI on a cash basis5 was S$88 million, a 2.4% increase year-on-year. Meanwhile NAV per unit of S$1.59 was up from S$1.57 the previous year. FCOT’s good performance was driven mainly by the properties in Singapore that continued to benefit from the positive momentum in the Singapore office market. Properties in FCOT’s portfolio enjoyed 96.5% average occupancy as at 30 September 2014. China Square Central, especially, continues to reap the benefits from the positive effects of the China Square Precinct Master Plan, and asset enhancement initiatives that were completed a year ago. With the low passing rents of expiring leases in the coming year, the properties in Singapore are also poised to benefit from the continuous uptrend in rentals for the Singapore office space. Similarly, following the expiry of the master lease at Alexandra Technopark, there will be a significant uplift in income for Alexandra Technopark. The property is poised to capture the potential upside in rentals given the lack of new supply of independent high-specs space in the Alexandra Precinct and the low passing rents of expiring underlying leases in FY2014/15. 5 Excluding the effects of recognising accounting income on a straight line basis 41 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W COMMERCIAL PORTFOLIO Properties SINGAPORE: REIT (Frasers Centrepoint Trust) Anchorpoint Bedok Point Causeway Point Northpoint YewTee Point Changi City Point SINGAPORE: Non-REIT retail assets Compass Point Eastpoint Mall Robertson Walk The Centrepoint Valley Point (Retail)2 Waterway Point3 Northpoint City (Retail)3 OVERSEAS: Non-REIT retail assets China, Beijing - Crosspoint (classified as held for sale) Australia, Sydney - Central (classified as held for sale) Total RETAIL SINGAPORE: REIT (Frasers Commercial Trust) 55 Market Street Alexandra Technopark China Square Central SINGAPORE: Non-REIT office/business park assets Alexandra Point Valley Point Office Tower ONE@Changi City (Office) 51 Cuppage Road Frasers Tower3 OVERSEAS: REIT (Frasers Commercial Trust) Australia, Canberra - Caroline Chisholm Centre Australia, Perth - Central Park OVERSEAS: Non-REIT office/business park assets China, Chengdu - Chengdu Logistics Hub (classified as held for sale) Vietnam, Ho Chi Minh City - Me Linh Point Total OFFICE/BUSINESS PARK Australia, Australand Group Total COMMERCIAL PROPERTIES Effective interest at 30 Sep 14 (%) Book value (S$’m) Net lettable area (sq ft) Occupancy FY2014 (%) FY2013 (%) 41.2 41.2 41.2 41.2 41.2 41.2 19.0 0.0 100.0 100.0 100.0 33.3 100.0 100.0 37.5 27.6 27.6 27.6 100.0 100.0 50.0 100.0 100.0 27.6 13.8 80.0 75.0 100.0 93 120 1,058 655 168 306 540 NA 115 646 44 782 NA4 70,989 82,713 416,581 235,850 73,670 207,239 266,586 214,161 97,044 335,080 29,234 371,000 330,000 53 138 4,718 156,336 143,129 3,029,612 134 503 579 289 251 300 400 974 71,796 1,045,227 372,452 199,380 183,109 657,648 276,439 670,000 97.8 98.2 99.8 99.4 96.6 97.9 98.9 NA 100.0 61.4 81.2 NA NA 98.0 72.0 100.05 96.96 98.8 100.0 98.0 94.1 61.2 NA 233 7518 433,182 713,6808 100.0 88.6 $82 $50 4,546 703,981 188,896 5,515,790 74.4 100.0 96.9 96.7 99.5 99.3 92.7 97.91 100.0 NA 98.5 97.7 100.0 NA NA 92.0 NA 100.0 100.07 93.5 100.0 91.0 91.0 74.0 NA 100.0 93.5 78.0 100.0 2,766 12,030 12,774,103 21,319,505 94.5 95.39 1 Prior to the divestment to FCT on 16 June 2014 2 Undergoing asset enhancement 3 Currently under development 4 The land acquisition is pending completion 5 Based on the committed occupancy as at 30 September 2014 6 Based on the underlying leases of Alexandra Technopark. On 25 August 2014, the master lease with Orrick Investments Pte Ltd expired and was not renewed 7 Based on the master lease at Alexandra Technopark 8 Represents 100% indirect interest in the asset. FCOT only has 50% indirect interest in the asset 9 Prior to the acquistion of Australand 42 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES B U S I N E S S R E V I E W C H A N G I C I T Y P O I N T S I N G A P O R E 43 G R O U P C E O ’ S B U S I N E S S R E V I E W HOSPITALITY Fraser Suites, New Delhi, India Fraser Suites, Sydney, Australia Modena by Fraser, Wuhan, China 44 HOSPITALITY FCL’s Hospitality segment delivered strong operational performance throughout the year, with revenue climbing 46% compared to last year. The Group acquired operating companies that are the master lessees for six hotels owned by Frasers Hospitality Trust (FHT), resulting in a new stream of revenue to the Group. Revenue was also higher on the back of improved occupancies, particularly at Fraser Suites Queens Gate, United Kingdom, Fraser Place Melbourne and Fraser Suites Perth, Australia. These increases partially offset the reduced contributions resulting from the divestment of six serviced residences into FHT and stiff competition in the Singapore market. GROWING O UR H O SPITAL IT Y PORT FOLIO Over the financial year, Frasers Hospitality grew its portfolio through acquisitions in Europe and Australia and new sign-ups across Europe, North Asia and South-East Asia, including the asset management of newly acquired 436-room Sofitel Wentworth Sydney, an iconic fixture in the downtown Sydney skyline. In April, Frasers Hospitality’s second property in Jakarta, Fraser Residence Menteng Jakarta was opened. Frasers Hospitality’s European portfolio was further augmented by the acquisition of properties in Frankfurt, Germany and Barcelona, Spain, both to be branded Capri by Fraser, and one in Berlin, Germany which will be branded Fraser Place Berlin. The Fraser-branded properties in the UK also enjoyed strong occupancies, benefitting from the Commonwealth Games earlier this year. has also exceeded its occupancy targets. This has resulted in the growth of the brand through both management contracts and acquisitions, with Capri by Fraser Barcelona, Spain, Capri by Fraser, Brisbane, Australia and Capri by Fraser, Frankfurt, Germany slated to open in 2015. In addition, our hospitality division deepened its presence in China’s second tier cities with new sign-ups for Fraser Place Nanchang, Fraser Residence Chengdu, Fraser Suites Kunming, Fraser Suites Tianjin, Fraser Suites Hefei as well as the recent openings of Modena by Fraser Wuxi and Modena by Fraser Wuhan. We will also be adding another two managed properties in Bangkok, Thailand to our hospitality portfolio. The Capri by Fraser brand, with its design-led concept, has been positively received as evidenced by the strong occupancies in Capri by Fraser, Changi City, Singapore and Capri by Fraser, Ho Chi Minh City, Vietnam. The recently opened Capri by Fraser, Kuala Lumpur, Malaysia As at 30 September 2014, Frasers Hospitality has interest in and/or manages over 11,000 serviced apartments/hotel rooms in more than 35 cities and has signed up over 7,700 units that are expected to progressively begin operations from 2015 onwards. Capri by Fraser, Kuala Lumpur, Malaysia 45 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W G R O U P C E O B U S I N E S S R E V I E W Sofitel Sydney Wentworth, Sydney, Australia SERVICED RESIDENCES - Owned Properties Country Property Australia Fraser Suites Perth Fraser Place Melbourne Sofitel Sydney Wentworth Capri by Fraser, Brisbane Fraser Suites Beijing Fraser Residence Sudirman Jakarta Fraser Suites Kensington China Indonesia London Philippines Fraser Place Manila Spain Singapore Capri by Fraser, Barcelona Capri by Fraser, Changi City Fraser Place Singapore Effective interest (%) No. of units Occupancy FY2014 (%) FY2013 (%) Average daily rate FY2014 FY2013 Book value at 30 Sep 14 87.5 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 50.0 100.0 236 112 436 239 357 108 70 89 97 313 163 86.9 91.1 87.2 NA 84.1 83.6 81.6 87.3 70.0 83.3 69.8 65.0 75.0 NA NA 82.0 93.0 84.0 86.0 NA 77.0 76.0 A$288.0 A$138.7 A$322.0 NA A$270.6 A$142.4 NA NA A$124.6m A$29.0m A$200.0m A$54.0m RMB831.3 RMB841.8 RMB1,183.0m US$142.3 US$134.4 US$33.9m £268.1 £252.5 £109.2m PHP7,131.5 €115.5 PHP7,117.4 NA PHP1,256.0m €15.5m $257.5 $248.4 $97.4m $382.3 $366.4 $210.0m Total number of rooms owned 2,220 46 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W B E S T W E S T E R N C R O M W E L L L O N D O N , U N I T E D K I N G D O M G R O U P C E O B U S I N E S S R E V I E W 47 G R O U P C E O ’ S B U S I N E S S R E V I E W SERVICED RESIDENCES - Under Management Country Bahrain China France Hungary Indonesia India Japan UK Malaysia Qatar Singapore Property Fraser Suites Bahrain Fraser Place Shekou, Shenzhen Fraser Residence Shanghai Fraser Suites Shanghai Fraser Residence CBD East, Beijing Fraser Suites Nanjing Modena by Fraser Shanghai Putuo Modena by Fraser Heping Tianjin Fraser Suites Chengdu Fraser Suites Suzhou Modena by Fraser Jinjihu Suzhou Fraser Suites Guangzhou Modena by Fraser Wuxi New District Modena by Fraser Wuhan Fraser Suites Harmonie, Paris Fraser Suites Le Claridge, Paris Fraser Residence Budapest Fraser Residence Menteng, Jakarta Fraser Suites New Delhi Fraser Residence Nankai Osaka Fraser Residence Prince of Wales, London Fraser Residence Bishopgate, London Fraser Residence Blackfriars, London Fraser Residence Monument, London Fraser Residence City, London Fraser Place Kuala Lumpur Capri by Fraser, Kuala Lumpur Fraser Suites Doha Fraser Place Fusionopolis Fraser Residence Orchard South Korea Fraser Suites Insadong, Seoul Thailand Turkey UAE Vietnam Fraser Place Central, Seoul Fraser Place Nandaemum, Seoul Fraser Suites Sukhumvit, Bangkok Fraser Place Anthill Istanbul Fraser Suites Dubai Fraser Suites Hanoi Capri by Fraser, Ho Chi Minh City No. of units 91 232 324 186 228 210 348 104 360 276 237 332 120 170 134 110 51 128 92 114 18 26 12 14 22 315 240 138 50 72 213 254 252 163 116 180 185 175 Total number of rooms (under management) 6,292 48 Capri by Fraser, Barcelona, Spain FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W Fraser Residence Menteng, Jakarta, Indonesia Capri by Fraser, Barcelona, Spain Modena by Fraser, Wuxi, China 49 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W FRAS ER S HOS PITALITY T RUS T FHT is Singapore’s first global hotel and serviced residence hospitality trust to be listed on the Main Board of the SGX-ST. FHT offers investors an opportunity to invest in a geographically diversified and balanced portfolio of quality assets to take advantage of favourable hospitality sector fundamentals of the key gateway cities in which the assets are located. The REIT’s balanced and well-diversified initial portfolio comprises six hotels and six serviced residences. Valued at approximately S$1.7 billion6, FHT’s initial portfolio of properties collectively has 1,928 hotel rooms and 842 serviced residence units, and total gross floor area of approximately 3.8 million sq ft. Each of these quality assets is located in prime locations within key gateway cities, and is managed by globally renowned hotel and serviced residence operators including the award-winning Frasers Hospitality Pte Ltd. Fraser Suites Glasgow, Scotland In line with the growth of Frasers Hospitality division, FHT is well-positioned to grow through both organic and inorganic opportunities with further expansion supported by a robust pipeline of right-of-first-refusal properties located across ten countries, granted by FCL and strategic partner, the TCC Group. 6 The Initial Portfolio is valued at approximately S$1,666.5 million, based on the higher of the two independent appraisal values for the Properties and exchange rates as at 27 June 2014. The appraisal values of the Properties are as at 31 March 2014 for Novotel Rockford Darling Harbour and Fraser Suites Sydney and as at 31 December 2013 for the remaining Properties. SERVICED RESIDENCES - Held Through Frasers Hospitality Trust City Singapore Property InterContinental Singapore Fraser Suites Singapore Kuala Lumpur The Westin Kuala Lumpur Kobe Sydney Glasgow Edinburgh London Ana Crowne Plaza Kobe Fraser Suites Sydney Novotel Rockford Darling Harbour Fraser Suites Glasgow Fraser Suites Edinburgh Fraser Suites Queens Gate, London Best Western Cromwell London Park International London Fraser Place Canary Wharf, London Effective interest (%) No. of units 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 406 255 443 593 201 230 98 75 105 85 171 108 Book value as at 14 Jul 14 $497.1m $327.0m MYR455.0m ¥11,200.0m A$103.5m A$66.0m £7.5m £11.5m £46.3m £17.0m £39.3m £31.5m Total number of rooms owned & managed 2,770 50 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W G R O U P C E O ’ S B U S I N E S S R E V I E W AUSTRALAND Freshwater Place, Melbourne, Australia Coles Parkinson, Queensland, Australia Clemton Park Village, Sydney, Australia 51 G R O U P C E O ’ S B U S I N E S S R E V I E W Discovery Point, Sydney, Australia including 16 at Greenvale, 14 at Clyde North, 11 at Croydon and 13 at Cranbourne; in Queensland, Hamilton Reach sold 21 apartments and on the Gold Coast COVA sold 16 town houses; and in Perth, Western Australia our joint-venture master-planned land project at Baldavis East sold 15 lots. As at 30 September 2014, Australand’s Residential Division had contracts on hand of S$1.7 billion and a development pipeline with estimated gross development value of S$10.4 billion. AUSTRALAND Australand became a member of the Group after the share transfer was completed on 29 August 2014. Australand is one of Australia’s leading diversified property groups and has been involved in property development for more than 90 years. Its operations, which include development of residential land, housing and apartments, development of, and investment in income producing commercial and industrial properties, and property management, are located in Sydney, Melbourne, South-East Queensland, Adelaide and Perth. In the one month that Australand was a member of the Group, Australand contributed revenue of S$47 million and PBIT of S$6 million. RESID ENTIAL PRO PERT IES Australand is one of the top five residential developers in Australia with a pipeline of more than 20,000 lots to be developed over the next five to seven years. Almost two-thirds of the pipeline is in the form of master-planned residential land projects and the remainder medium-density urban infill projects in Australia’s largest population centres – Sydney, Melbourne, South-East Queensland and Perth. In Australand’s one month as part of the Group, 225 sales were achieved across an active portfolio of 41 projects worth S$110.4 million. Highlights for the month included the sale of 33 apartments at Discovery Point, Sydney and 34 low-rise apartments at Clemton Park, also in Sydney; in Victoria, 20 apartments sold at Parkville, Melbourne and four master-planned land projects contributed 54 sales 52 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W COM ME RCIAL AND INDUST RIAL PR OPE RT IES Australand’s Commercial and Industrial (C&I) development division controls 25.9 million sq ft of industrial developable land and 1.1 million sq ft of future office development. The division has an integrated development platform providing end-to-end capabilities, and is a market leader in the Australian industrial sector. The C&I division has a solid forward workload of 2.0 million sq ft across 15 projects, mainly located along the eastern seaboard with Sydney and Melbourne generating the bulk of activity. As at 30 September 2014, the C&I division had a development pipeline with an estimated gross development value of S$2.0 billion. AUSTRALAND: Land bank Country Site2 Australia (Australand - Residential) Beveridge - L, VIC Clyde North - L, VIC Wallan - L, VIC Shell Cove - L, NSW Yanchep - L, WA East Baldivis - L, WA Burwood East - H/MD, VIC Ashlar - L and H/MD, NSW Discovery Point - HD, NSW Point Cook - L, VIC Parkville - H/MD, VIC Cockburn Central - H/MD, WA Hamilton - H/MD, QLD Botany - H/MD, NSW Sunbury - L, VIC North Ryde - H/MD, NSW Hope Island - L and H/MD, QLD Park Ridge - L, QLD West Baldivis - L, WA Carlton - H/MD, VIC Greenvale - L, VIC Port Coogee - L, WA Westmeadows - H/MD, VIC Clemton Park - H/MD, NSW Cranbourne West - L, VIC Avondale Heights - H/MD, VIC Discovery Point - HD, NSW Croydon - L, VIC Lidcombe - H/MD, NSW Sunshine - H/MD, VIC Port Coogee - L, WA Ivadale Lakes - L, QLD Includes 100% of joint arrangements (Joint operation-JO and Joint venture-JV) and PDAs 1 2 L - Land, H/MD - Housing / medium density, HD - High density Effective interest (%) Est total no. of lots1 Est. saleable area (’m sq ft) 50.0 50.0 50.0 50.0 Mgt rights 50.0 100.0 100.0 100.0 50.0 50.0 100.0 100.0 100.0 100.0 50.0 100.0 100.0 100.0 65.0 100.0 100.0 100.0 50.0 100.0 100.0 50.0 50.0 100.0 50.0 50.0 100.0 3,800 2,145 1,270 1,019 1,000 935 790 779 660 601 559 464 460 445 391 374 373 371 363 349 319 290 202 182 153 135 97 89 80 78 88 50 NA NA NA NA NA NA 1 NA 0.5 NA 0.4 0.2 0.4 0.4 NA 0.3 NA NA NA 0.2 NA NA 0.7 0.8 NA 0.2 0.1 NA 0.1 0.3 NA NA 53 ANNUAL REPORT2014G R O U P C E O ’ S B U S I N E S S R E V I E W Some of the division’s current projects include a 484,376 sq ft distribution centre at Eastern Creek, New South Wales (NSW), which upon completion will be leased to TTi Logistics for seven years; a 176,270-sq-ft Distribution Centre at Eastern Creek, NSW which upon completion will be leased to Fisher & Paykel for ten years; a 411,450-sq-ft industrial facility at Truganina, Victoria which will be leased in part to MaxiPARTS; and a 178,175-sq-ft office and warehouse facility at Winston Hills, NSW leased to Toshiba for 15 years and Australian Geographic for ten years. INV ES TM ENT PROPE RTI ES The S$2.8-billion Australand Investment Property portfolio comprises prime commercial and industrial assets predominantly located along Australia’s eastern seaboard. The portfolio has been primarily internally developed by Australand’s C&I division and is weighted 51% industrial and 49% commercial. The portfolio tenancy profile is of a high quality with 86% of income sourced from ASX-listed companies, federal and state governments and multi-national corporations. Occupancy is at 94.5% with an average weighted average lease to expire (WALE) of 5.1 years. The average commercial portfolio NABERS sustainability rating is 4.47 stars, which is above Australand’s industry peers. Some of the recent activities within the Investment Property portfolio included the lease renewal of SP Services at 2 Southbank Boulevard, Southbank, Victoria of over 87,285 sq ft; a new ten-year lease plus building extension at Dandenong South, Victoria of an over 279,862-sq-ft (upon completion) facility leased to Danks (a division of Woolworths); and a five-year lease renewal with Tyres 4 You at 150 Atlantic Drive, Keysborough, Victoria. Site Truganina, VIC Yatala, QLD Keysborough, VIC Western Sydney Parklands Trust, NSW Burbridge Business Park, SA Eastern Creek, NSW Eastern Creek, NSW Pinkenba, QLD Effective interest (%) 100.0 50.0 100.0 PDA1 50.0 100.0 50.0 100.0 Berrinba (Crestmead), QLD Option Beverley, SA Derrimut, VIC Berrinba, QLD Parkinson, QLD Rowville, VIC Winston Hills, NSW Pinkenba, QLD Mulgrave, VIC Richlands, QLD Macquarie Park, NSW Altona, VIC Gillman, SA Berwick, VIC 100.0 100.0 100.0 50.0 100.0 100.0 50.0 50.0 100.0 50.0 100.0 50.0 100.0 Est. saleable area (’m sq ft) 5.4 3.9 4.6 2.1 1.7 1.7 1.2 0.9 0.7 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.1 Type Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Office Industrial Office Industrial Industrial Industrial AUSTRALAND: Land bank Country Australia (Australand - C&I) 1 Project development agreement 54 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W P O R T C O O G E E W E S T E R N A U S T R A L I A 55 G R O U P C E O ’ S B U S I N E S S R E V I E W over 7,700 signed-up serviced apartments pending openings are expected to progressively commence operations from 2015 onwards. The Group will continue to strive towards its target of 30,000 serviced apartments/hotel rooms under management by 2019. I see FY2013/14 as a milestone year for FCL in achieving a new level of growth, and we look forward to exciting years ahead as we continue to execute on our growth strategies. Northpoint City, Singapore LOOK ING AH EAD Australia is a core market for FCL where the Group sees exciting prospects for sustainable growth. With the acquisition of Australand, FCL has a platform that takes our Australian business to the next level in every way, from the scale of operations, to scope of activities, to the Group’s ability to compete and more importantly, our ability to attract and retain the best people. Having the right organisational structure and management team in place is critical to achieving the Group’s growth ambitions in Australia. On 3 November 2014, FCL announced that Bob Johnston, Managing Director of Australand, will lead the Group’s combined business in Australia. 56 On the development front in Singapore, the progress of Northpoint City is on track with construction expected to commence in FY2014/15. Meanwhile in our overseas markets, there are numerous scheduled completions in Australand’s development portfolio in FY2014/15. The Group’s unrecognised development revenue totalled S$3.9 billion at the end of FY2013/14. This unrecognised development revenue, as well as scheduled completions from its core overseas markets, will continue to support FCL’s development properties business. On the hospitality front, the Group has increased its portfolio to over 11,000 serviced apartments/hotel rooms under management in more than 35 cities, following the launch of new properties in China, Indonesia and Malaysia, as well as the listing of FHT. In addition, FRASERS CENTREPOINT LIMITED & SUBSIDIARIESB U S I N E S S R E V I E W F R A S E R R E S I D E N C E K U A L A L U M P U R , M A L A Y S I A 57 I N V E S T O R R E L A T I O N S During the year, we also extended our REIT strategy through the listing of Frasers Hospitality Trust, as well as strengthened our position in Australia, a core market for FCL, through the acquisition of Australand Property Group. Throughout these two developments, we provided timely and accurate disclosures and updates via announcements on SGXNet. Where appropriate, we also supplemented the announcements with press releases and presentations to enhance understanding of the developments. Both these developments had elements that were subject to shareholders’ approvals. We despatched the relevant notices and circulars to shareholders within the requisite period of time before the respective extraordinary general meeting (EGM) to provide shareholders with adequate time to read the materials and consider the developments. The EGMs were well-attended by shareholders, who were able to speak with the Board of Directors, including the Chairman. PR OACTI VE A ND REGUL AR EN GAGEM ENT As part of our ongoing regular updates on our business, we announce our financial performance on SGXNet every quarter, along with a press release and presentation. We also host quarterly conference calls, during which members of our senior management team present highlights of our financial results and answer questions posed by analysts and institutional investors. We also host in-person briefings on our half-year and full-year results, which are attended by analysts, institutional investors and the media. A concurrent dial-in facility is also offered for those who wish to attend the briefing, but are unable to do so in person. All the materials related to FCL’s quarterly announcements on our financial performance, as well as a webcast of the FY2013/14 full-year results presentation, are publicly available via FCL’s corporate website (fraserscentrepoint.com). The website serves as a resource centre from which the public can access information about FCL. In addition to the aforementioned resources, the website also contains fact sheets about FCL, and provides more insighs into our business and properties. In addition, over the course of the year, FCL participated in 149 meetings with analysts and institutional investors to facilitate understanding of our activities and growth plans. For enquiries on Frasers Centrepoint Limited, please contact: Ms Gerry Wong Head, Group Communications Tel: (65) 6276 4882 Email: ir@fraserscentrepoint.com OVER VI EW FCL’s investor relations (IR) team is focussed on proactively engaging the financial and investment community as well as the media to generate awareness and understanding of FCL’s business model, competitive strengths, growth strategy, and investment merits; as well as garner feedback for consideration. The senior management and IR teams regularly engage these stakeholders through multiple platforms. These include one-on-one meetings, results calls and briefings, post-results luncheons, non-deal roadshows and conferences. In addition, we organise site visits to our properties to help stakeholders better understand our business. Recognising our commitment to corporate transparency, the Securities Investors Association (Singapore) conferred FCL the Most Transparent Company Award 2014, in the New Issues category, at the 15th Investors’ Choice Awards. FOCUSSED O N C OR POR AT E TRANS PARE NCY FY2013/14 was an eventful year for FCL, with a number of major corporate developments. To begin with, we were demerged from our previous parent company Fraser and Neave, Limited, and independently listed on 9 January 2014. Believing in the importance of being transparent with our new direct shareholders, we voluntarily prepared a comprehensive annual report for FY2012/13, the last financial year before our independent listing, and published it on 8 January 2014. 58 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESFCL’S CLOSING PRICE AND TRADING VOLUME IN FY2013/14 FCL SP Equity - Last Price 1.700 1.975 High on 05/22/14 Average 1.679 1.400 Low on 02/10/14 FCL SP Equity - Volume High on 09/19/14 Average Low on 06/19/14 0.055m 6.311m 0.780m 61000 JAN 15 JAN 30 FEB 14 FEB 28 MAR 14 MAR 31 APR 15 APR 30 MAY 15 MAY 30 JUN 16 JUN 30 JUL 15 JUL 31 AUG 15 AUG 15 SEP 15 SEP 30 BROKERAGES COVERING FCL (AS OF 30 SEPTEMBER 2014) FY2013/14 INVESTOR RELATIONS CALENDAR 1. Bank of America Merrill Lynch 2. CIMB Research 3. CLSA 4. Daiwa Capital Markets 5. DBS Bank Jan 14 Feb 14 Feb 14 Listing on SGX-ST Main Board Release of 1Q FY2013/14 results Investor meetings in Singapore, Kuala Lumpur and Hong Kong Mar 14 Daiwa Investment Conference Tokyo 2014 May 14 Release of 2Q FY2013/14 results Investor meetings in Singapore, May 14 Amsterdam, Edinburgh and London Citi Asia Pacific Property Conference 2014, Hong Kong Jun 14 Aug 14 Release of 3Q FY2013/14 results Sep 14 Investor meetings in Singapore 2.000 1.900 1.800 1.700 1.600 1.500 1.400 6M 4M 2M 59 ANNUAL REPORT2014T R E A S U R Y H I G H L I G H T S The Group aims to maintain a prudent and efficient financial structure to ensure that it will be able to access adequate capital at favourable terms. Our newly acquired subsidiary Australand and our three main businesses, Development Properties, Commercial (Retail and Office), Hospitality and the Asset Management of the three REITs generates cash flows for the Group in Singapore and over 35 cities around the world. Management monitors the Group’s cash flow position, debt maturity profile, funding cost, interest rate exposures and overall liquidity position on a continuous basis. To ensure that the Group has adequate overall liquidity to finance its operations and investment requirements, the Group maintains available banking facilities with a large number of banks globally. The Group also taps the debt capital markets through its Medium Term Notes (MTN) programmes. In September 2014, the Group raised S$600 million in Perpetual Hybrid Securities that was non-callable until year 5 with interest step up in Year 10. In October 2014, the Group issued S$200 million of seven-year 3.95% fixed-rate notes. In FY2013/14, the Group improved its capital position (net worth increased 29% from S$5,451 million to S$7,033 million) and cash balance (from S$507 million to S$884 million). The capital position was improved from S$670 million of capital infusion from Fraser and Neave, Limited prior to the FCL listing in January 2014, the issuance of Perpetual Securities of S$600 million in September 2014 and retained earnings for the year. Net Group Borrowings had increased from S$3.145 billion to S$6.733 billion during the year with the incremental addition of Australand’s debt and the acquisition financing for Australand (S$1.8 billion). The increased cash balance was attributed to cash collection from the strong pipeline of pre-sold development projects in Singapore and overseas, stable cash flow generated from investment properties and the monetisation of assets. Interest cost in FY2013/14 was S$94 million (of which S$51 million was capitalised), 36.9% lower than the previous year’s interest cost of S$149 million (of which S$70 million was capitalised) mainly due to a higher proportion of floating rate debt. SOURC E OF FUNDI NG Besides cash flow from our businesses, the Group also relies on the debt capital markets, equity markets and bilateral banking facilities for its funding. As at 30 September 2014, the Group has S$2.1 billion in banking facilities and S$2.3 billion in MTN programme that may be used/issued to meet the funding requirements of the Group. AVAI LA B LE B ANK LI NE S B Y B ANKS A S AT 30 SEPTEM BER 2014 The Group maintains an active relationship with a network of more than 25 banks globally, located in various countries where the Group operates. Our principal bankers include Australia and New Zealand Banking Group Limited, DBS Bank Ltd, National Australia Bank Limited, Oversea-Chinese Banking Corporation Limited, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, United Overseas Bank Limited and Westpac Banking Corporation. The Group continues to adopt the philosophy of engaging the banks as our core business partners. We continue to receive very strong support from our relationship banks across all segments of the Group’s businesses. Total banking facilities (utilised and unutilised) extended to the Group as at 30 September 2014 amounted to S$11 billion. The principal bankers of the Group provided 83% of these banking facilities. All banking relationships for the entire Group are maintained by Corporate Treasury in Singapore. D EBT CA PI TA L MARKE TS The Group has various MTN programmes in place to tap the debt capital market. FCL Treasury Pte Ltd has an updated S$3 billion MTN programme. Our associates, Frasers Centrepoint Trust and Frasers Commercial Trust each has a S$1 billion MTN programme. 60 FRASERS CENTREPOINT LIMITED & SUBSIDIARIES DEBT MATURITY PROFILE (S$m) GEA RING A ND INTERE ST COVER 1,920 1,595 1,494 1,318 1,212 2,500 2,000 1,500 1,000 500 < 1 Yr 1 to 2 Yrs 2 to 3 Yrs 3 to 4 Yrs 4 to 5 Yrs > 5 Yrs Average Maturity – 2.8 years 77 INT ER EST RATE PR OF ILE AND DE R IVAT IV ES The Group manages its interest cost by maintaining a prudent mix of fixed and floating rate borrowings. On a portfolio basis, 35% of the Group’s borrowings are in fixed rates (including floating rate borrowings that have been fixed with interest rate swaps) with an average fixed rate tenor of 3.5 years as at 30 September 2014. The remaining 65% of the Group’s borrowings are in floating rates as at 30 September 2014. The floating rate loan portfolio allows the Group to maintain a flexible maturity profile to support divestments and cash inflows from sales of development property where debt can be reduced quickly. In managing the interest rate profile, the Group takes into account the interest rate outlook, expected cash flow generated from its business operations, holding period of long-term investments and any acquisition and divestments plans. The Group makes use of interest rate derivatives for the purpose of hedging interest rate risks and managing its portfolio of fixed and floating rate borrowings. The Group does not engage in trading in interest rate derivatives. The Group’s total interest rate derivatives and the mark-to-market values as at 30 September 2014 are disclosed in the financial statement in Note 37. The Group aims to keep the Group’s net gearing to equity at 80% to 100%. As at 30 September 2014, this ratio was 95%. Total interest paid during the year amounted to S$94 million, of which S$51 million was capitalised as part of Properties Under Development. The net interest charged to profit statement for the year was S$43 million and the net interest cover over earnings before interest and tax was at 16 times. FOREI GN EXCHA NGE RISKS A ND D ERI VATIVES The Group has exposure to foreign exchange risk as a result of transactions denominated in foreign currencies, arising from normal trading and investment activities. Where exposures are certain, it is the Group’s policy to hedge these risks as they arise. The Group uses foreign currency forward exchange contracts and certain currency derivatives to manage these foreign exchange risks. The Group does not engage in trading of foreign exchange and foreign exchange derivatives. The Group uses foreign exchange contracts and derivatives solely for hedging actual underlying foreign exchange requirements in accordance with hedging limits set by the Audit Committee and the Board under the Group Treasury Policy. These policies are reviewed regularly by the Audit and Executive Committees to ensure that the Group’s policies and guidelines are in line with the Group’s foreign exchange risk management objectives. The Group’s foreign exchange contracts and derivatives and the mark-to-market values as at 30 September 2014 are disclosed in the financial statement in Note 37. The Group does not hedge its foreign exchange risks of its investments in overseas subsidiary, joint-venture and associated companies. Such investments are long term in nature and therefore not feasible and economical to hedge. The Group only hedges the dividends cash flows payable from its overseas subsidiary, joint-venture and associated companies. 61 ANNUAL REPORT2014 C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y O NE W I TH THE CO M MUNITY FCL and the communities in which we exist are intrinsically interwoven. People are at the heart of every property we build and manage; and each property is designed to enhance the lives of the people who live, work, play and shop there. Beyond that, we contribute to these communities in myriad ways – from providing financial aid and spending time with the underprivileged to offering our property spaces for art, education and charitable events. In addition, we participated in Project Green Malls @ North East, where we organised activities such as interactive exhibits and eco-green workshops to raise awareness and get the community involved in owning and caring for our environment. Open House Perth was once again held at Central Park and opened its doors to various tour groups who were given a brief on the design and architectural features of the building and shown various facilities such as the Ride & Park facility and the conference centre. EDUCAT ION To promote social entrepreneurship, Frasers Centrepoint Malls collaborated with Ngee Ann Polytechnic Business Studies’ final-year Entrepreneurship students for the sixth year to organise the National Youth Business Challenge (NYBC). Held on 5 and 6 July 2014, NYBC saw students come together to propose earth-friendly business ideas. We also hosted a series of educational exhibitions at our properties. Trading Stories, at China Square Central, featured the experiences and personal stories of six tradespeople who plied old trades in Singapore. Universal Design Exhibition, at Changi City Point, was a collaboration with the Building and Construction Authority to promote green buildings to students and get Singapore’s future generations to appreciate the benefits of and pledge their support for universal design in their built environment. Health Promotion Board and Singapore Heart Foundation also held exhibitions at Changi City Point to promote healthy living and to raise awareness of cardiovascular disease respectively. 62 In Sydney, we sponsored the Putney Primary School fete and St Charles Catholic Primary School’s fundraising initiative. T HE ARTS Frasers Hospitality provided close to $300,000-worth of accommodation for performing arts groups for a number of productions, including KidsFest 2014, Shakespeare in the Park – The Merchant of Venice, Jack & the Bean-Sprout and Red Riding Hood. In recognition of our support, the National Arts Council of Singapore conferred Frasers Hospitality the Friend of the Arts award and Capri by Fraser, Changi City was named a Supporter of the Arts. Changi City Point played host to several art exhibitions, including Arts @ Metta, a fundraiser by the Metta School to equip their special needs alumni with life skills and employment; and Very Special Arts’ Annual Art Exhibition to showcase the artistic talents of people with special needs. From February to August 2014, China Square Central also housed National Arts Council-licenced street buskers, who performed during lunch time at its canopy area to the delight of passers-by. In Australia, Frasers Property Australia and its joint-venture partner Sekisui House sponsored A$30,000 towards the BEAMS Arts Festival in Chippendale for the third year running. Organised by 350 local creative people, the major community event drew 12,000 visitors to the areas within and surrounding Central Park, Sydney to experience visual and performing arts and feast on local food. Central retail centre has become the heart and soul of Central Park, Sydney, delivering a continual series of community engagement events and theatrical activations. These include The 7m Pitch, a curated collection of video art playing onto the monumental video wall within Central; the Creative Playground –1,000 sq m of creative community space, including visual arts studios, a performance/rehearsal studio, an active fashion-making atelier, a photography school, an event space, a pop-up cinema programme and ever-changing activities and whimsical events. This creative activation continues the tradition of activating space for community use at Central Park, which began in 2008 with the establishment of the FraserStudios visual and performing arts hub within otherwise vacant warehouses. A number of events were also organised in Central Park, Perth, including the Colours of Our Country exhibition, and a photography competition for its tenants. FRASERS CENTREPOINT LIMITED & SUBSIDIARIES1 3 5 2 4 63 1 2 3 4 5 Very Special Arts’ Annual Art Exhibition Colours of Our Country Exhibition BEAMS Arts Festival BEAMS Arts Festival Jack & the Bean-Sprout ANNUAL REPORT2014C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y COM MU NITY OUTR EAC H Charitable activities At Changi City Point, President Tony Tan Keng Yam launched the President’s Challenge and the Carnival @ Changi on 25 March. All proceeds from the carnival went to the President‘s Challenge 2014. The popular board game Monopoly went life-sized at Family Monopoly Challenge organised by Frasers Centrepoint Malls. The event, which stretched over a month from 23 May to 29 June 2014 in eight Frasers Centrepoint Malls, was organised to raise funds for the Care & Share Movement under the Community Chest and to support the International Year of the Family. Many families, under the care of the Family Service Centres supported by the Community Chest, were invited to participate in this highly interactive and fun-filled game. The Family Monopoly Challenge event raised proceeds of S$31,800 which went to the Community Chest in support of needy families. In addition, our malls hosted a number of fundraising activities. Causeway Point held a two-day fund raising event for MINDS where students from NTU performed, displayed interactive exhibits and sold merchandise at stalls. Changi City Point sponsored a pushcart for SingYouth Hub, a non-profit organisation focussed on nurturing and engaging Singaporean youths in community work, to sell hand-made products as part of its fundraising efforts. At Changi City Point, national shuttlers attempted a record-breaking badminton rally to raise 10,000kg of rice for the needy in the Cheng San-Seletar Division. YewTee Point collaborated with YewTee Community Club to organise a donation drive to benefit the neighbourhood’s families under the ComCare assistance scheme. 64 Central Park, Perth played host to events including Pink Ribbon Day and Australia’s Biggest Morning Tea organised by the Cancer Council of Western Australia; Step Up for MS vertical run which raised A$211,510 for the Multiple Sclerosis Society; and worked with tenants to organise barbecues at the park and forecourt of the premises to raise funds for various charities. Reaching out to the underprivileged Our properties hosted several groups of the elderly and the underprivileged in their communities. Causeway Point invited 55 children from three homes/orphanages – Melrose Home, Sunbeam Place and Pertapis Children’s Home to watch Forever Friends shows, dine at Pasta Mania and participate in a make-a-bear workshop; and treated 30 needy families from the North-West CDC to lunch with two local celebrities, Calvin Soh and Taufik Batisah. Anchorpoint worked with Privileged Enterprise Group to bring the elderly from various nursing homes and elderly homes to the mall to enjoy the performances and activities at its premises, and sponsored 100 mini hampers for the elderly. For the second year running our Office and Commercial team organised a fun-filled afternoon for children from Melrose Home at The Polliwogs, where they played at the indoor playground and had pizza, drinks and snacks. Fraser Suites CBD Beijing hosted children from the Beijing Bethel Foster Home at Christmas for their annual party; Fraser Place Namdaemun, Seoul invited 25 children and teachers from Hyochang Social Welfare Centre to celebrate its anniversary with a pizza-making class for the children and a magician; and Capri by Fraser Kuala Lumpur held a charity buka puasa event for 30 disabled children from the Social Welfare Department. China Square Central and Fraser Suites Dubai both successfully organised blood donation drives with the number of donors exceeding the total targeted. Fraser Suites Seef, Bahrain donated 18 sofas to The Royal Charity Organization in aid of orphans and widows in the Kingdom of Bahrain. A place for people to come together Our malls also served as spaces for people to come together for fun activities. Causeway Point partnered with the Northwest CDC to host 200 line dancers at its atrium in May and again in September. Bedok Point organised a book swap event that saw not only 530 shoppers donate books, but the mall also gave away $5 Bedok Point voucher to shoppers who completed a book swap. The balance books were donated to the underprivileged in the Kampong Chai Chee area. VOLUNTEERISM The Australand Foundation provides donations and sponsors staff volunteering activities directed at the environment and disadvantaged youth. A bank of 500 staff volunteering days per annum is matched with a donation budget of approximately $150,000 per annum to identify and support charities and activities in which staff can participate. In 2014, these were as varied as Clean-Up Australia Day including a scuba “dive for debris”, Schools Tree Day and building a Red Cross garden at a Brisbane primary school. FRASERS CENTREPOINT LIMITED & SUBSIDIARIES 1 3 2 4 65 5 1 2 Family Monopoly Challenge ComCare beneficiaries of YewTee Point’s donation drive 3 Pizza-making class hosted by Fraser Place Namdaemum, Seoul for children from Hyochang Social Welfare Centre 4 5 Clean-up Australia Day Blood donation drive at Fraser Suites Dubai ANNUAL REPORT2014C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y ENVIRONMENTALLY FRIENDLY PROPERTIES As a responsible developer conscious of the need to minimise our environmental impact, Frasers Centrepoint continues to implement environmental initiatives in the properties we develop and manage. RECOGNITION O F O UR EFFOR TS Our “green” buildings have received many accolades in recognition of their environmentally sensitive provisions. In Singapore, all the properties in our commercial trust, Frasers Commercial Trust, have attained the Green Mark Gold Award certification by the Building & Construction Authority (BCA) of Singapore, while most of the properties in our retail trust, Frasers Centrepoint Trust, have minimally attained the Green Mark Gold Award. Following retrofitting work, Alexandra Point, one of our non-REIT office buildings, achieved the BCA Green Mark Platinum Award. Our first hotel-residence Capri by Fraser, Changi City, Singapore is also a BCA Green Mark-certified development with high efficiency lighting, water-waste minimisation systems, regular preventative maintainence and environmentally responsible purchasing policies in place. 66 Meanwhile, Central Park in Perth, Australia has achieved many firsts in environmental certification. It was the first commercial building in Australia to achieve a 4.5-star National Australian Built Environment Rating System (NABERS) Energy rating, and subsequently became the first premium office building in Perth to attain a 5-star NABERS Energy base building rating. Central Park also achieved a 4.5-star NABERS Indoor Environment rating and a 3.5-star NABERS water rating. Designed with cutting-edge energy efficient technology, Caroline Chisholm Centre in Canberra, Australia also has a 5-star NABERS Energy base building rating. Central Park, Perth also took home top honours in the Western Australia Property Awards by winning the Commercial Office Manager of the Year. This award recognises the Manager’s commitment to operating Central Park in an environmentally responsible manner, maintaining good tenant relations and engaging the Central Park and neighbouring communities. EN HAN CI NG E NERGY EF F IC IENCY We have implemented various energy efficient measures and monitoring systems to reduce, and monitor energy consumption in our Singapore properties. Motion sensors and energy saving lighting systems have been installed at the car parks, corridors and staircases at the properties in Singapore, at the food court and individual tenants’ premises at Alexandra Technopark, and also in toilets of Alexandra Point and the office tower of China Square Central. To ensure that the air-conditioning and mechanical ventilation system (ACMV) is run at an optimum level at China Square Central, a performance-based savings scheme was established with the ACMV vendors. Vendors are also contractually obliged to optimise the performance for the chillers and cooling tower to reduce energy consumption. To further conserve energy, China Square Central’s escalators are operated at pre-determined hours. Over at 55 Market Street, the air-conditioning is automatically switched off during off-peak hours and Alexandra Technopark’s air-conditioning system was retrofitted, resulting in improved energy usage. The energy saving initiatives resulted in savings in energy consumption of 10.8%, 1.9% and 9.3% respectively for China Square Central, 55 Market Street and Alexandra Technopark in FY2013/14. In addition, we undertook a green retrofitting at Alexandra Point, which included an upgrade of the chiller plant and installation of variable speed drives to chilled and condenser water pumps and AHUs. We also instituted an energy management and review policy to monitor and set targets to maintain the plant performance at ≤0.6 kilowatts per refrigeration ton through optimisation of the system. At our malls, through vigilant management, our energy consumption level was 32.5% better than the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 90.1, an international energy consumption benchmark. We are looking into installing LED lighting at some of our malls and plan to further improve the operating efficiency of Northpoint’s chiller plant through the purchase of a proprietary system. FRASERS CENTREPOINT LIMITED & SUBSIDIARIES1 2 3 67 4 1 2 3 4 Alexandra Point, Singapore Alexandra Technopark, Singapore Bedok Point, Singapore China Square Central, Singapore ANNUAL REPORT2014FRA SE RS CE N TRE POI N T LIM ITED & SU BSID IARIES C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y Over in Australia, Central Park, Perth was the first commercial property in the state to incorporate a solar photovoltaics (PV) system to provide renewable energy. The PV system is able to generate 16,000 kilowatt hours of solar electricity a year, reducing Central Park’s carbon footprint. In 2014, a number of energy saving initiatives were implemented at Central Park, Perth, resulting in a 2.1% reduction in base building energy consumption. Energy efficient T5 lights were installed at public and tenant car parks, and tenants’ area, and will be installed progressively throughout the property. A control system with motion sensors was also put in place to conserve electricity when the facilities are not in use. The new system uses less than half the energy compared to the old system. Lift upgrading works are in progress and the refurbished lifts will incorporate destination control and state-of-the-art permanent magnet motors which are expected to reduce energy consumption by about 30%. As with previous years, Central Park’s management purchased carbon credits as part of the Carbon Farming Initiative programme to offset the emissions generated by the base building operations. The programme encourages sustainable farming and supports landscape restoration projects. At Caroline Chisholm Centre, T5 and LED lighting were installed throughout the property and are controlled by an environmentally conscious computerised management system. The Dali Dynalite lighting control system provides effective management of energy usage. Solar panels have also been installed to provide renewable energy. In the meantime, Central Park, Sydney’s substantial green infrastructure, including the central thermal plant and tri-generation power station, has been completed, and operations commenced during the year. In addition, advanced negotiations are underway to dispose of the onsite central thermal plant to owner-operator Brookfield Infrastructure. F UR THE RI NG WATER C ON SERVATION We installed water-efficient fittings and adopted water-efficient flow flush/rates in some of our properties in Singapore. At Alexandra Technopark and Alexandra Point, NEWater (treated used water) is used for non-potable purposes such as water for air-conditioning cooling towers, irrigation and fire-fighting facilities like the fire hydrant and sprinkler system. In addition, China Square Central is part of the Friends of Water programme organised by the Public Utilities Board. This programme aims to recognise, inspire and encourage community stewardship of water resources in Singapore. The water-saving initiatives have culminated in China Square Central, 55 Market Street and Alexandra Technopark being certified Water Efficient Buildings with consumption savings of 2.5%, 10.7% and 15.1% respectively. Alexandra Point is now a PUB Water Efficient Building with estimated savings of 30,646 cubic metres per year. The managers of our malls monitor water consumption daily and achieved 9.2% savings from the use of NEWater for non-potable purposes. In Australia, to reduce water consumption at Central Park, Perth, tap flow restrictors, low-flow shower heads, low-flush water closets and a park reticulation weather station were installed. In addition, installation of dual-flush toilets, low water use urinals and automatic AAA taps continued in 2014. Central Park achieved savings of 12.9% in water consumption during the year. At Caroline Chisholm Centre, water-efficient tap-ware such as the ‘Rada Sensor’ shower controls, rainwater recycling and Greywater were implemented. In Sydney, Central Park’s water recycling plant is now owned and operated by independent water infrastructure specialist group Flow Systems. Meanwhile, Australand was identified as the Regional Sector Leader for Australia/Diversified/ Large Cap Category under the Global Real Estate Sustainability Benchmark (GRESB). GRESB is an industry-driven organisation committed to assessing the sustainability performance of real estate portfolios (public, private and direct) around the globe. The dynamic benchmark is used by institutional investors to engage with their investments with the aim to improve the sustainability performance of their investment portfolio, and the global property sector at large. 68 1 3 3 69 2 1 2 3 Caroline Chisholm Centre, Canberra, Australia Central Park, Perth, Australia Central Park, Sydney, Australia ANNUAL REPORT2014C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y FOST ERING A G RE EN LIFES TYLE AND ENV IRONMENT The sustainable practices implemented by China Square Central, Alexandra Technopark, 51 Cuppage Road, Valley Point, Robertson Walk and Alexandra Point’s management offices have been accredited by the Singapore Environment Council under Project: Eco-Office. Posters on environmental conservation, such as recycling, energy conservation and water saving are placed in common areas as part of the on-going educational initiatives. In addition, recycling bins for cans, plastic and paper have been placed at various locations across our properties to encourage recycling. As with previous years, most of our commercial properties in Singapore participated in Earth Hour 2014 organised by the World Wide Fund for Nature – all non-essential lightings were turned off. This is part of our continuous commitment to save and conserve energy usage and participate in the drive to create awareness towards a sustainable environment. Our hotel residence, Capri by Fraser, Changi City also participated in Earth Hour 2014 where lights in public areas, signage, ambient music and back-of-house air-conditioning were switched off. Guests were encouraged to do their part in reducing our carbon footprint by dining in the dark by candlelight. As part of our efforts to foster greener lifestyles and environments, all our serviced residences in Singapore encourage residents to “Go Green” by offering them the option to re-use their towels and providing bath amenities packaged in re-usable cloth bags to reduce the use of paper and plastics. H ELPI NG TO MA KE GREEN A WAY OF L IFE Watertown, a Green Mark GoldPLUS certified development, is a high-density mixed-use development that helps promote a full-service neighbourhood and reduces commuting trips for the residents for various essential services. In addition to seamless connectivity to the MRT, LRT and bus interchange, it has an excellent bicycle infrastructure with the provision of more than 300 bicycle lots inside the development and green parking lots with electric charging stations. Various energy saving strategies were used, such as provision of Regenerative Lifts, LED lights occupancy sensors. While water efficiency was achieved through the provision of water-efficient fittings (min 2 ticks WELS rating), rainwater harvesting for irrigation and auto irrigation was employed. Environmentally friendly paints and adhesives were used and a pneumatic waste collection system provided. Watertown was constructed using various green construction strategies such as low concrete usage index, an environmental management plan, CONQUAS certification, and the use of environmentally friendly building materials. Homes were also provided with highly efficient appliances. Overall, the project is able to reduce about 1,457 tons of carbon dioxide emissions and save about 18, 542 cubic metres of water per year. The development has an integrated green design to reduce energy consumption by about 2,913,243 kilowatt hours per year in the buildings and increase the density of greenery in the project site. Some of these design features include facades with good shading to the glass, louvered screens and cool paints for high thermal performance, extensive landscaping and water features with more than 300 trees and 1,000 palms on the e-decks and the sky decks, and naturally ventilated common areas with daylight provision. In Australia, One Central Park, Sydney features a monumental cantilever expressed as a Sky Garden extending from level 29 of the taller East tower. The cantilever supports a visually arresting light-reflecting heliostat system, while the largest en masse vertical gardens in the world – covering 1,100 sq m – clad the exterior facades. The unique heliostat design feature is the first of its kind to be used in a residential context in Australia and the largest of its type in the world used in an urban environment. 70 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESThe garden was designed for plant life and the heliostats allow redirected sunlight to be used in new ways to improve the quality of high-rise living. The use of the heliostats, coupled with hydroponics, allowed One Central Park, Sydney, to manage and extend vegetation and daylight to previously inaccessible places of the building. The hydroponic irrigation systems allow soil-less growth of vertical vegetation in planters and on walls all the way up to the tower tops, resulting in green facades that trap carbon dioxide, emit oxygen and provide energy-saving shade. The 320 glittering heliostats also track sunlight and redirect it deep down into the building and onto overshadowed parklands; to places that direct sun beams cannot reach. FCL will to strive to keep improving our eco-friendly practices and building a sustainable environment for all. 1 71 2 1 2 Watertown, Singapore Reusable bath amenity bags to reduce use of paper and plastics ANNUAL REPORT2014embarked on a co-branded leadership certificate programme with Cornell University’s e-learning platform. At Frasers Centrepoint Homes, in addition to sending staff to attend industry programmes focussed on technology, innovation, productivity and cost management, the Business leaders provide team coaching using design thinking methodology during regular team meetings to stretch the team’s critical thinking and project management skills. FCL is also proud to have its Approved Training Organisation status renewed by the Workforce Development Agency, affirming our commitment to providing continuous learning opportunities 1 5 C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y HUMAN CAPITAL LEADERSHIP FOR TH E NE XT LEAP FORWAR D strategic leadership skills through special assignments, representation at industry events and forums as determined by the respective Business CEO. For our middle leaders, development is based on their individual development needs as well as group programmes customised for the Business Units. Building on the positive results achieved through customised group programmes, Frasers Centrepoint Commercial leveraged last year’s Facilities Management programme and added another module which focussed on the manager’s responsibilities and legal accountabilities. Similarly, to tap group learnings, Frasers Hospitality It has been a year of profound change and excitement for FCL. The Group’s rapidly increasing business reach has created a greater need for a robust leadership bench, ready to propel FCL’s growth. As at 30 September 2014, our staff strength stood at 2,230, an increase of 42% from 1,567 at the end of the last financial year. This increase was mainly due to the acquisition of Australand and the expansion of our businesses both locally and overseas, including the formation of FHT. GROWING O UR TALENT Strong future leadership built on solid functional excellence is the foundation for FCL’s approach towards talent development. To build a comprehensive bench strength, we have two paths for talent development – the leadership track and the core specialist track. Our leadership track comprises programmes for senior leaders, middle leaders and junior emerging leaders. For our senior leaders, focus is placed on sharpening their 4 72 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESfor all our staff. To fortify our middle management leadership capabilities, in the coming year our management training programme will be based on a three-tiered theme - Managing Business, Managing Team Synergies and Managing Self. held activities targeting both the mental and physical wellness of our staff. These activities were well received and well participated. In recognition of our efforts, we have consistently won the Singapore Health Award for the past few years. For FY2013/14, our local staff put in a total of 18,377 training hours, a 20% increase over the previous year. ENGAGING OUR STAFF During the course of the year, we organised many staff engagement activities which saw commitment and involvement all the way from top management. The Corporate Wellness Committee, chaired by the CEO of Development & Property, RECOGNISING ACHIEVEMENTS We continue to recognise our staff and celebrate their successes along the way. R2OCI2T2 awards were given to staff who consistently demonstrated our R2OCI2T2 values at work. With our continuing efforts towards service excellence, this year we are proud to have 108 staff honoured for their excellent service at the EXSA Awards, an increase of 38% compared to 78 awardees last year. STRE NGTH ENIN G FA MILY TIE S We believe in the importance of building family bonds. In addition to corporate passes to family attractions likes the Singapore Zoo, we also have our annual Eat With Your Family day when staff are released from work early so that they can be home early for dinner with their family. Our FCL Family Day saw overwhelming participation with more than 2,000 staff and their family members having a rollicking good time at the S.E.A. Aquarium. To enhance the welfare of our staff’s families, we launched the FCL Bursary Award in December 2014 which further fosters a stronger emotional bond between staff and the company. 2 6 1 2 3 4 5 6 FCL Long-Service Awards FCL Dinner & Dance 2014 FCL Family Day Promoting Teamwork at FCL Staff Orientation Session Inaugural FCL Bursary Award Ceremony 2014 Excellent Service Award 2014 3 73 ANNUAL REPORT2014A W A R D S A N D A C C O L A D E S C O R P O R A T E C O M M E R C I A L • SIAS Investors’ Choice Award – Most Transparent Newly-Listed Company Award 2014 Frasers Centrepoint Limited • World Travel Award - Middle East’s Leading Serviced Apartment Brand 2013 & 2014 Frasers Hospitality Pte Ltd • Business Traveller Middle East Awards 2014 - Best Serviced Apartments Company in the Middle East Frasers Hospitality Pte Ltd • CHIC International Hospitality Excellence Award by China Hotel Investment Conference Frasers Hospitality Pte Ltd • 2014 South East Asia Property • 9th China Hotel Starlight Awards Awards – Best Developer (Singapore) Frasers Centrepoint Limited - Best Serviced Apartments Brand of China Frasers Hospitality Pte Ltd • Singapore Health Award 2013 by Health Promotion Board – Silver Frasers Centrepoint Limited • HR Vendors of the Year 2013 by Human Resources Magazine Frasers Hospitality Pte Ltd • World Travel Award - China’s Leading Serviced Apartment Brand 2013 & 2014 Frasers Hospitality Pte Ltd • Preferred Serviced Apartments of the Year by Human Resources Magazine Frasers Hospitality Pte Ltd • World Travel Award - Asia’s Leading Serviced Apartment Brand 2014 Frasers Hospitality Pte Ltd • World Travel Award - Australasia’s Leading Serviced Apartment Brand 2013 Frasers Hospitality Pte Ltd • SIAS Investors’ Choice Award – Singapore Corporate Governance Award 2014, REITs & Business Trusts category – Runner-up Frasers Commercial Trust • BCA Green Mark Platinum Award 2014 Alexandra Point • BCA Green Mark Gold Award 2014 Bedok Point • Occupational Health and Safety Assessment Specification (OHSAS 18001) Certification – Alexandra Point – Alexandra Technopark – 55 Market Street – China Square Central • ICSC Asia Pacific Shopping Center Awards 2014 (Marketing) – Finalist Frasers Centrepoint Malls • Safety & Security Watch Group (Individual Award) 2014 by Jurong Police Division & Singapore Civil Defence Force Causeway Point • Safety & Security Watch Group (Individual Award) 2013 by Singapore Police Force • World Travel Award - South Korea’s Leading Serviced Apartment Brand 2014 Frasers Hospitality Pte Ltd • World Travel Award - Europe’s Leading Serviced Apartment Brand 2014 Frasers Hospitality Pte Ltd • World Travel Award - England’s Leading Serviced Apartment Brand 2014 Frasers Hospitality Pte Ltd • World Travel Award - Hungary’s Leading Serviced Apartment Brand 2014 Frasers Hospitality Pte Ltd 74 • World Travel Award - Singapore’s The Centrepoint Leading Serviced Apartment Brand 2013 Frasers Hospitality Pte Ltd • Best Serviced Apartment Operator by Travel Trade Gazette Frasers Hospitality Pte Ltd • 2014 Arts Supporter Award by National Arts Council Changi City Point • Friends of Water 2013 by Public Utilities Board China Square Central • Water Efficient Building 2013 by Public Utilities Board China Square Central • Excellent Service Award (EXSA) 2013 - Silver Award – China Square Central – Robertson Walk FRASERS CENTREPOINT LIMITED & SUBSIDIARIES• Eco Office Award 2013 – 2015 by Singapore Environment Council – 51 Cuppage Road – Alexandra Point – Alexandra Technopark – China Square Central – Robertson Walk – Valley Point • Singapore Service Class Award – Alexandra Technopark – Changi City Point – China Square Central – Northpoint – Valley Point – YewTee Point • Western Australia Property Awards 2014 – Commercial Office Manager of the Year (2012 – 2015) by Spring Singapore Central Park, Perth – Anchorpoint – Compass Point – Northpoint – The Centrepoint – YewTee Point • Happy Toilets Certification (4-stars Award) 2013 by Restroom Association (Singapore) – Robertson Walk – The Centrepoint • 4.5-star NABERS Indoor Environment Rating Central Park, Perth • 3.5-star NABERS Water Rating Central Park, Perth • 5-star NABERS Energy Base Building Rating – Caroline Chisholm Centre, Canberra • Orchard Road Best Dressed – Central Park, Perth Building (Top 3 Winners) 2013 by Orchard Road Business Association The Centrepoint • Excellent Service Award (EXSA) 2014 - Star Award Changi City Point • Excellent Service Award (EXSA) 2014 - Gold Award – Alexandra Technopark – Changi City Point – Causeway Point – Robertson Walk – YewTee Point • Excellent Service Award (EXSA) 2014 - Silver Award – 51 Cuppage Road – Alexandra Point R E S I D E N T I A L • 2014 South East Asia Property Awards Best Condominium Development (Singapore) – Highly Commended Flamingo Valley • FIABCI Singapore Award 2014 – Waterfront Key – Waterfront Waves • BCA Green Mark GoldPLUS Award 2014 Watertown H O S P I T A L I T Y • World Travel Award - Asia’s Leading Serviced Apartments 2014 Fraser Suites Singapore • World Travel Award - Australasia’s Leading Serviced Apartments 2014 Fraser Suites Sydney • World Travel Award - Asia’s Leading Hotel Residences 2013 & 2014 Capri by Fraser, Changi City / Singapore • World Travel Award - China’s Leading Serviced Apartments 2013 & 2014 Fraser Suites Chengdu • World Travel Award - India’s Leading Serviced Apartments 2014 Fraser Suites New Delhi • World Travel Award - South Korea’s Leading Serviced Apartments 2014 Fraser Place Namdaemun, Seoul • World Travel Award - Europe’s Leading Serviced Apartments 2014 Fraser Suites Le Claridge Champs-Élysées, Paris • World Travel Award - England’s Leading Serviced Apartments 2014 Fraser Suites Kensington, London • World Travel Award - France’s Leading Serviced Apartments 2014 Fraser Suites Le Claridge Champs-Élysées, Paris • World Travel Award - Hungary’s Leading Serviced Apartments 2014 Fraser Residence Budapest 75 ANNUAL REPORT2014A W A R D S A N D A C C O L A D E S H O S P I T A L I T Y • World Travel Award - Scotland’s Leading Serviced Apartments 2014 Fraser Suites Edinburgh • World Travel Award - Turkey’s Leading Serviced Apartments 2014 Fraser Place Anthill Istanbul • World Travel Award - Bahrain’s Leading Serviced Apartments 2013 & 2014 Fraser Suites Bahrain • World Travel Award - Qatar’s Leading Serviced Apartments 2013 & 2014 Fraser Suites Doha • World Travel Award - Dubai’s Leading Serviced Apartments 2013 & 2014 Fraser Suites Dubai H O S P I T A L I T Y • Industry Eminence Awards - Best Serviced Apartments and Hotel Residences Award 2014 Fraser Suites New Delhi • HM Awards for Hotel & Accommodation Excellence, HM Magazine - Serviced Apartment Property of the Year 2013 & 2014 Fraser Suites Sydney – Fraser Place Central Seoul – Fraser Residence Nankai Osaka – Fraser Residence Shanghai – Modena Putuo Shanghai – Capri by Fraser, Changi City / Singapore • Hotel Interior Award by International Property Awards – Highly Commended Capri by Fraser, Changi City / Singapore • Scottish Hotel Awards - Serviced Apartments Special Commendation Award Fraser Suites Edinburgh • Scottish Hotel Awards - Serviced Apartments Hospitality Award 2014 Fraser Suites Glasgow • Excellent Service Award (EXSA) 2014 - Star Award – Fraser Suites River Valley Singapore – Fraser Place Robertson Walk Singapore – Fraser Residence Orchard – Fraser Place Fusionopolis Singapore – Capri by Fraser, Changi City / Singapore • Excellent Service Award (EXSA) 2014 - Gold Award – Fraser Suites River Valley Singapore – Fraser Place Robertson Walk Singapore – Capri by Fraser, Changi City / Singapore • Excellent Service Award (EXSA) 2014 - Silver Award – Fraser Suites River Valley • Scottish Hotel Awards - Serviced Singapore Apartments of the year 2014 – Fraser Place Robertson Walk Fraser Suites Glasgow Singapore – Fraser Residence Orchard Pte • 9th China Hotel Starlight Awards Ltd - Best Luxurious Serviced Apartment of China Fraser Suites Chengdu • 9th China Hotel Starlight Awards - Best Newly Open Serviced Apartment of China – Fraser Place Fusionopolis Singapore – Capri by Fraser, Changi City / Singapore • World Travel Award - World’s Leading Serviced Apartments 2013 Fraser Suites Le Claridge Champs-Élysées, Paris • Best Serviced Residence in China 2013 by Business Traveller China Fraser Suites Nanjing • Best of Malaysia Travel Awards - Best Serviced Residence 2013 Fraser Place Kuala Lumpur • World Travel Award - Asia’s Leading Hotel Residences 2013 Capri by Fraser, Changi City / Singapore • Certificate of Excellence 2014 by Fraser Suites Guangzhou Trip Advisor – Fraser Suites Dubai – Fraser Suites Glasgow – Fraser Suites Guangzhou – Fraser Suites Harmonie, Paris • 9th China Hotel Starlight Awards - Best Serviced Apartment of China Fraser Suites Top Glory Shanghai – Fraser Suites Le Claridge Champs Élysées, Paris – Fraser Suites New Delhi – Fraser Suites Perth – Fraser Suites Seef Bahrain – Fraser Suites Singapore – Fraser Suites Sukhumvit Bangkok – Fraser Suites Insadong Seoul – Fraser Suites Suzhou – Fraser Place Kuala Lumpur – Fraser Place Singapore 76 • 9th China Hotel Starlight Awards - Best Designed Boutique Hotel Residence of China Modena Putuo Shanghai • Top Performing Partner by Booking.com Fraser Residence Shanghai FRASERS CENTREPOINT LIMITED & SUBSIDIARIES A U S T R A L I A • World Travel Award - China’s Leading Serviced Apartments 2013 & 2014 Fraser Suites Chengdu • Best Tall Building Worldwide by the 2014 Council on Tall Buildings and Urban Habitat One Central Park, Sydney • World Travel Award - Australasia’s Leading Serviced Apartments 2013 Fraser Suites Sydney, Australia • Best Tall Building in Asia and Australia by the 2014 Council on Tall Buildings and Urban Habitat One Central Park, Sydney • World Travel Award - Hungary’s Leading Serviced Apartments 2013 Fraser Residence Budapest • Innovation Award by the 2014 Council on Tall Buildings and Urban Habitat - Finalist One Central Park, Sydney • The Best Serviced Apartment of 2013 by Booking.com Fraser Suites Suzhou • Emporis Award 2014 – World’s Top 5 Skyscrapers One Central Park, Sydney • International Green Infrastructure Award by World Green Infrastructure Congress 2014 One Central Park, Sydney • Leading European Architects Forum (LEAF) Awards 2014 – Best Sustainable Development of the Year One Central Park, Sydney • Leading European Architects Forum (LEAF) Awards 2014 – Best Overall Project One Central Park, Sydney • WAN Façade Award 2014 – Highly Commended One Central Park, Sydney • Development Excellence Awards by Urban Taskforce - Development of the Year Award One Central Park, Sydney • Awards for Excellence by Urban Development Institute of Australia (New South Wales) – High Density Development One Central Park, Sydney A U S T R A L A N D • 2014 Awards for Excellence by Urban Development Institute of Australia (Queensland) - Excellence in Environmentally Sustainable Development – Residential The Green Quarter, Hamilton Reach, Brisbane • Australian Timber Design Awards 2014 - Judges’ Innovation Award The Green, Parkville, Melbourne • 2014 Awards for Excellence by Urban Development Institute of Australia (Western Australia) – Best Medium Density Residential Project Kingston, Cockburn Living, Perth • 2013 Awards for Excellence by Urban Development Institute of Australia (Queensland) – Multi- Level Development The Promontory, Yungaba, Brisbane • 2013 National Innovation and Excellence Awards – Best Master Planned Community Port Coogee, Perth • Awards for Excellence by Urban Development Institute of Australia (New South Wales) – Design & Innovation One Central Park, Sydney • 2014 AIB National Professional Excellence in Building Award (Residential Construction $100 Million Plus) by Australian Institute of Building One Central Park, Sydney • Engineers Australia Sydney Excellence Awards – Building & Structure Award One Central Park, Sydney • Engineers Australia Sydney Excellence Awards – Infrastructure Award for central thermal plant One Central Park, Sydney • Sydney Design Awards 2014 - Landscape Design Award One Central Park, Sydney • 2013 Awards for Excellence by Urban Development Institute of Australia (National) – Environmental Excellence Award Frasers Landing, Mandurah • 2013 Awards for Excellence by Urban Development Institute of Australia (Western Australia) – Environmental Excellence Award Frasers Landing, Mandurah 77 ANNUAL REPORT2014E N T E R P R I S E - W I D E R I S K M A N A G E M E N T Enterprise-wide Risk Management (ERM) is an integral part of the business activities of FCL and its subsidiaries (collectively, the Group). The Group maintains a risk management system to proactively manage risks to support the achievement of its business objectives. Through active risk management, Management creates and preserves value for the organisation. RISK MAN AGEME NT PR OC ESS Since FCL’s listing on the SGX-ST in January 2014, the Group has set up a Risk Management Committee (RMC) to assist the Board in overseeing the risk management process implemented by Management. The RMC comprises six members with three independent Directors. The committee meets at least three times per year. All material risks and risk issues are reported to the RMC for review. An ERM policy, which spells out the risk management framework and methodology, is developed as part of ERM implementation in FCL. FCL adopts a robust risk management framework to maintain a high level of corporate discipline and governance. The framework links our risk management process with the organisation’s strategic objectives. Risks are identified and assessed, and mitigating measures developed to address and manage those risks. The risk management process is integrated and coordinated across the businesses of the Group. The risk management framework and processes apply to all business units in the organisation. The ownership of risks lies with the heads of the respective business units who review risks and mitigating measures quarterly. Risks that have a material impact on the business units are identified and assessed. The risk exposures and potential mitigating measures are tracked in a risk register maintained in a web-based Corporate Risk Scorecard system. Where applicable, Key Risk Indicators are established to monitor risks. For the financial year ended 30 September 2014, key material risks and their associated mitigating measures were consolidated at the Group level and reported to the RMC. Risk tolerance statements, which set out the nature and extent of the significant risks that the Group is willing to take in achieving its strategic objectives, are also renewed and monitored at the Management level and reported to the RMC. An annual ERM validation is held at the Management level. The heads of business units provide assurance to the Group Chief Executive Officer and Chief Financial Officer that key risks at the business unit level have been identified and the associated mitigating measures are effective and adequate. The result of the ERM validation for the financial year ended 30 September 2014 is reported to the RMC and presented at a joint meeting of the Audit Committee and the RMC. At the ERM validation, Management provides assurance that the risk management system implemented in the Group is adequate and effective as at 30 September 2014 to address risks that are considered relevant and material to FCL’s operations. The risk management culture in FCL is enhanced through various risk management activities implemented within the Group. Risk awareness briefings are conducted for new recruits. During the financial year, 19 risk awareness sessions were held. Refresher sessions are also organised for existing staff when required. Periodic discussion of risk and risk issues are also held at the business unit level where emerging risks are identified and managed. FCL’s ERM system is benchmarked against market practice. Control self-assessment, which promotes accountability and risk ownership, is implemented for several key processes. The Group also seeks to improve its risk management processes on an ongoing basis. During the financial year, the web-based Corporate Risk Scorecard system, which provides the platform for the Group’s risk registers, was upgraded to cater to user requirements. The Group also implemented a Comfort Matrix framework, which provides an overview of the mitigating measures, and assurance processes of key financial, compliance, operational (including information technology) risks. KEY RI SKS Management has been actively monitoring the key material risks that affect the Group. The following are some of the key potential risks that FCL is exposed to: Country Risks (Economic, Political and Regulatory Risks) FCL is exposed to various conditions affecting major economies and key financial and property markets. The risk of adverse changes in the global economy can reduce profits, result in revaluation losses and affect the Group’s ability to sell its residential development stock. 78 FRASERS CENTREPOINT LIMITED & SUBSIDIARIESInconsistent and frequent changes in regulatory policies may also result in higher operating and investment costs, loss in productivity and disruptions to business operations. To mitigate these risks, FCL adopts a prudent approach in selecting locations for its investment. Measures are in place to monitor the markets closely, such as through maintaining good working relationships with local authorities, business associations and local contacts, and reviewing expert opinions and market indicators, to keep abreast of economic, political and regulatory changes. Where the need arises, FCL will reassess its business and marketing plans accordingly. Foreign Currency and Interest Rate Risks With worldwide operations, FCL is exposed to changes in currency exchange rates and interest rates. The Group uses derivatives, a mix of fixed and floating rate debt with varying tenors as well as other financial instruments to hedge against these risks. Policies and processes are in place to facilitate the monitoring and management of risks in a timely manner. Liquidity Risk To manage the liquidity risk that the Group may encounter in meeting financial obligations when they fall due, FCL maintains sufficient cash and procures availability of funding through multiple sources to ensure that refinancing, repayment and funding needs are fulfilled. Alexandra Point, Singapore 79 ANNUAL REPORT2014C H A N G I C I T Y P O I N T S I N G A P O R E 80 Good corporate governance is essential to the success of Frasers Centrepoint Limited (“FCL” or the “Company”). FCL is firmly committed to setting and maintaining high standards of corporate governance and corporate transparency, and adheres to sound corporate policies, business practices and a system of internal controls. Operating within such a framework allows FCL to safeguard the assets of FCL and its subsidiaries (the “Group”) and shareholders’ interests whilst pursuing sustainable growth and enhancement of value for shareholders. Listed on 9 January 2014 on Singapore Securities Trading Limited (“SGX-ST”), the Company adheres closely to the principles and guidelines of the Code of Corporate Governance 2012 (the “Code 2012”) and other applicable laws, rules and regulations, including the SGX-ST Listing Manual. A. BOARD MATTE RS Principle 1: The Board’s Conduct of Affairs The Board is entrusted with oversight of the business performance and affairs of FCL, and is responsible for the Group’s overall entrepreneurial leadership, strategic direction, performance objectives and long-term success. Our Board of Directors1 comprise 10 non-executive Directors, and is well-diversified in terms of gender, age group and nationality. They are: Mr Charoen Sirivadhanabhakdi (Chairman)2 Khunying Wanna Sirivadhanabhakdi (Vice-Chairman)3 Mr Charles Mak Ming Ying4 Mr Chan Heng Wing4, 6 Mr Philip Eng Heng Nee4 Mr Wee Joo Yeow5 Mr Weerawong Chittmittrapap4 Mr Chotiphat Bijananda6 Mr Panote Sirivadhanabhakdi6 Mr Sithichai Chaikriangkrai6 Notes: 1 Mrs Siripen Sitasuwan had been appointed as a non-executive and independent Director on 25 October 2013 and re-appointed to the Board of FCL on 7 January 2014. She stepped down on 10 March 2014 in line with disclosure made in the Introductory Document dated 28 October 2013 relating to the listing of the Company. 2 Mr Charoen Sirivadhanabhakdi was appointed as a non-executive and non-independent Director on 25 October 2013. 3 Khunying Wanna Sirivadhanabhakdi joined the Board as non-executive and non-independent Director on 7 January 2014. 4 Mr Charles Mak, Mr Chan Heng Wing, Mr Philip Eng and Mr Weerawong Chittmittrapap were appointed as non-executive and independent Directors on 25 October 2013. 5 Mr Wee Joo Yeow was appointed as a non-executive and independent Director on 10 March 2014. 6 Mr Chan Heng Wing, Mr Chotiphat Bijananda, Mr Panote Sirivadhanabhakdi, and Mr Sithichai Chaikriangkrai were re-appointed to the Board of FCL at the Annual General Meeting held on 7 January 2014. The Board also reviews annual budgets, financial plans, major acquisitions and divestments, funding and investment proposals, monitors the financial performance of the Group and Management’s performance, and ensures compliance by the Group with relevant laws and regulations. The Board meets regularly, and during Board meetings, our Directors actively participate, discuss, deliberate and appraise matters requiring its attention and decision. Time is set aside, where appropriate, after scheduled Board meetings for discussions amongst our Directors without the presence of Management, so as to facilitate a more effective check on Management. 81 annual report2014CORPORATEGoVernanCeDelegation of Authority on certain Board Matters In order for the Board to efficiently provide strategic oversight of FCL, it delegates specific areas of responsibilities to five Board Committees namely, the Board Executive Committee (“EXCO”)1, the Audit Committee (“AC”), the Nominating Committee (“NC”), the Remuneration Committee (“RC”) and the Risk Management Committee (“RMC”). Each Board Committee is governed by clear Terms of Reference which have been approved by the Board2. Minutes of all Board Committee meetings are circulated to the Board so that Directors are aware of and kept updated as to the proceedings and matters discussed during such meetings. Notes: 1 The Terms of Reference of the EXCO were updated and approved by the Board and adopted on 25 October 2013. 2 The AC, NC, RC and RMC were constituted, and Terms of Reference for each of these Committees were approved by the Board and adopted, on 25 October 2013. The Company adopts a framework of delegated authorisations in its Manual of Authority (“MOA”). The MOA defines the procedures and levels of authorisation required for specified transactions. It also sets out approval limits for operating and capital expenditure as well as acquisitions and disposals of investments. The MOA also contains a schedule of matters specifically reserved to the Board for approval. These include approval of annual budgets, financial plans, business strategies and material transactions, such as major acquisitions, divestments, funding and investment proposals. The MOA authorises the EXCO to approve certain transactions up to specified limits, beyond which the approval of the Board needs to be obtained. Below the Board and EXCO levels, there are appropriate delegation of authority and approval sub-limits at Management level, to facilitate operational efficiency. To address and manage possible conflicts of interest that may arise between Directors’ interests and those of the Group, the Company has put in place appropriate procedures including requiring such Directors to refrain from participating in meetings or discussions (or relevant segments thereof), in addition to abstaining from voting, on any matter in which they are so interested or conflicted. For purchases of property in FCL property projects, there is also a policy which sets out the process and procedure for disclosing, reporting and obtaining of relevant approvals for property purchases made by any Director, the CEO or any other interested persons (as defined in the SGX-ST Listing Manual) and employees of the Group. Board Executive Committee (or EXCO) The current EXCO is made up of the following members: Mr Charoen Sirivadhanabhakdi1 Mr Charles Mak1 Mr Chotiphat Bijananda1 Mr Wee Joo Yeow2 Mr Panote Sirivadhanabhakdi1 Mr Sithichai Chaikriangkrai1 Chairman Vice-Chairman Vice-Chairman Member Member Member Notes: 1 Mr Charoen Sirivadhanabhakdi, Mr Charles Mak, Mr Chotiphat Bijananda, Mr Panote Sirivadhanabhakdi and Mr Sithichai Chaikriangkrai were appointed to the EXCO on 25 October 2013. 2 Mr Wee Joo Yeow was appointed to the EXCO on 10 March 2014. The EXCO assumes oversight of the business affairs of FCL and is empowered to exercise the full powers and authority of the Board when the Board does not meet except in respect of matters that specifically require the decision of the Board or any Board Committee. The EXCO formulates the FCL Group’s strategic development initiatives, provide direction for new investments and material financial and non-financial matters to ensure that the Group achieves its desired performance objectives and enhances long-term shareholder value, and oversees the Company’s and the Group’s conduct of business and corporate governance structure. The activities and responsibilities of other Board Committees are described in the following sections of this report. 82 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceMeetings of the Board and Board Committees The Board and its various Board Committees meet regularly, and also as required by business needs or if their members deem it necessary or appropriate to do so. For the financial year ended 30 September 2014, the Board met 11 times. The Directors are also given direct access to the Management team of the Group’s business divisions through presentations at Board and Board Committee meetings. Where required or requested by Board members, site visits and meetings with personnel from the Group’s business divisions are also arranged in order for Directors to have an intimate understanding of the key business operations of each division. The Company’s Articles of Association provide for Board members who are unable to attend physical meetings to participate through telephone conference, video conference or any other forms of electronic or instantaneous communication facilities. The number of Board meetings and Board Committee meetings held in the financial year ended 30 September 2014 and the attendance of Directors at these meetings are as follows: Board Board EXCO Audit Committee Risk Management Committee Remuneration Committee Nominating Committee Meetings held for the financial year ended 30 September 2014 Mr Charoen Sirivadhanabhakdi2 Khunying Wanna Sirivadhanabhakdi3 Mr Charles Mak Ming Ying4 Mr Chan Heng Wing4 Mr Philip Eng Heng Nee4 Mr Wee Joo Yeow5 Mr Weerawong Chittmittrapap4 Mr Chotiphat Bijananda6 Mr Panote Sirivadhanabhakdi6 Mr Sithichai Chaikriangkrai6 Mrs Siripen Sitasuwan7 11 11 9 11 7 9 5 10 10 11 11 4 6 5 – 4 – – 2 – 5 6 6 – 6 – – 6 – 6 3 – – – 6 2 2 – – 2 1 – – 1 2 2 2 – Nil1 – – Nil – Nil – – – Nil – – Nil1 – – – Nil – – Nil Nil – – – Notes: 1 Matters during the year requiring the Nominating Committee’s and Remuneration Committee’s approval were dealt with via circular resolutions. 2 Mr Charoen Sirivadhanabhakdi was appointed as a non-executive and non-independent Director on 25 October 2013. 3 Khunying Wanna Sirivadhanabhakdi joined the Board as non-executive and non-independent Director on 7 January 2014. 4 Mr Charles Mak, Mr Chan Heng Wing, Mr Philip Eng and Mr Weerawong Chittmittrapap were appointed as non-executive and independent Directors on 25 October 2013. 5 Mr Wee Joo Yeow was appointed as a non-executive and independent Director on 10 March 2014. 6 Mr Chan Heng Wing, Mr Chotiphat Bijananda, Mr Panote Sirivadhanabhakdi, and Mr Sithichai Chaikriangkrai were re-appointed to the Board of FCL at the Annual General Meeting held on 7 January 2014. 7 Mrs Siripen Sitasuwan stepped down from the Board and from her respective memberships on the Board Committees of Frasers Centrepoint Limited on 10 March 2014 in line with the disclosure made in the Introductory Document dated 28 October 2013 relating to the listing of the Company. Upon appointment, each new director is issued a formal letter of appointment setting out his or her duties and obligations, and where appropriate, incorporating processes to deal with possible conflicts of interest that may arise. A comprehensive orientation programme is also conducted to familiarise new appointees with the business activities, strategic directions, policies and corporate governance practices of the FCL Group. This programme allows new Directors to get acquainted with senior Management, and also fosters better rapport and facilitate communications with Management. 83 annual report2014CORPORATEGoVernanCeOur Directors are kept continually and regularly updated on the Group’s businesses and the regulatory and industry- specific environments in which the entities of the Group operate. Updates on relevant legal, regulatory and technical developments may be in writing or disseminated by way of briefings, presentations and/or handouts. The Board has been briefed and/or updated on the latest key changes to the Companies Act and changes to the Listing Rules. Our Directors are also encouraged to be members of the Singapore Institute of Directors (“SID”) and for them to receive journal updates and training from SID to stay abreast of relevant developments in financial, legal and regulatory requirements, and the business environment and outlook. Principle 2: Board Composition and Guidance Our current Board comprises 10 non-executive Directors, of whom five are independent, namely, Mr Charles Mak, Mr Chan Heng Wing, Mr Philip Eng, Mr Wee Joo Yeow and Mr Weerawong Chittmittrapap. Based on declarations of independence made by each of these independent Directors, none of them has any relationship with the Company, its related corporations1, our 10% shareholders2 or FCL’s officers that could interfere, or be reasonably perceived to interfere, with the exercise of each of their independent business judgment with a view to the best interests of the Company. These five independent Directors will help to uphold good corporate governance at the Board level and their presence will facilitate the exercise of independent and objective judgment on corporate affairs. Their participation and input will also ensure that key issues and strategies are critically reviewed, constructively challenged, fully discussed and thoroughly examined, and takes into account the long-term interests of FCL and its Shareholders. Notes: 1 Code 2012 defines “related corporations” as having the same meaning under the Companies Act, Chapter 50 i.e. a corporation that is the company’s holding company, subsidiary or fellow subsidiary. 2 Code 2012 defines a ten percent (10%) shareholder as a person who has an interest or interests in one or more voting shares in the company and the total votes attached to that share, or those shares, is not less than ten percent (10%) of the total votes attached to all the voting shares in the company. The NC is of the view that the current size and composition of the Board is appropriate for the scope and nature of the Group’s operations, and facilitates effective decision-making. In line with Code 2012, taking into account the requirements of the Group’s businesses and the need to avoid undue disruptions from changes to the composition of the Board and Board Committees, the NC is of the view that the current size of the Board is not so large as to be unwieldy, or as would interfere with efficient decision-making. No individual or group dominates the Board’s decision-making process. The Board proactively seeks to maintain an appropriate balance of expertise, skills and attributes among the Directors. This is also reflected in the diversity of backgrounds and competencies of our Directors, whose competencies range from banking, finance, accounting and legal to relevant industry knowledge, entrepreneurial and management experience, and familiarity with regulatory requirements and risk management. This is beneficial to the Company and its 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 our Directors. The Directors are provided with accurate, complete and timely information and have direct and unrestricted access to Management. This gives the Board and Board Committees sufficient time to critically evaluate and consider issues relevant to the Company and its businesses and operations, and also allows our Directors to effectively carry out their duties and discharge their oversight function. Principle 3: Chairman and Chief Executive Officer The Chairman and the Group Chief Executive Officer (“Group CEO”) of the Company, Mr Lim Ee Seng, are separate persons to ensure an appropriate balance and separation of power and authority, and clear division of responsibilities and accountability. The Chairman, who is non-executive, is not related to the Group CEO and neither is there any business relationship between them. Likewise, none of the chief executive officers of the Group’s business divisions and the Group CEO are related to each other, and neither is there any other business relationship between or among them. 84 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceThe Chairman leads the Board and ensures its effectiveness by, among other things, steering effective, productive and comprehensive discussions amongst Board members and the Management team on strategic, business and other key issues pertinent to the business and operations of the Group. In addition, the Chairman promotes a culture of openness and debate at the Board and also makes sure, with the support of the Company Secretary, that Directors are provided with clear, complete and timely information in order to make sound, informed decisions. The Chairman encourages active and effective engagement, participation by and contribution from all Directors, and facilitates constructive relations among and between them and Management. With the full support of the Board, Company Secretary and Management, the Chairman will spur the Company to promote, attain and maintain highest standards of corporate governance and transparency. With the help of FCL’s corporate services, he also sees to it that there is overall effective communications to and with Shareholders on the performance of the Group. In turn, the CEOs of the Group’s business divisions are responsible for executing the Group’s strategies and policies, and are accountable to the Board for the conduct and performance of the respective business operations under their charge. Principle 4: Board Membership The Nominating Committee (or NC)1 is made up of the following Directors: Mr Weerawong Chittmittrapap Chairman Mr Chan Heng Wing Mr Chotiphat Bijananda Member Member A majority of the members of this Committee, including the Chairman, are independent non-executive Directors. Note: 1 The NC was constituted on 25 October 2013. The NC is guided by written Terms of Reference approved by the Board and which set out the duties and responsibilities of this Committee. It is responsible for reviewing the structure, size and composition of the Board, identifying the balance of skills, knowledge and experience required for the Board to discharge its responsibilities effectively, and for nominated candidates to meet the needs and requirements of the Group. The NC will assess from time to time the independence of each Director, the performance of the Board as a whole, and the contribution of each Director to the effectiveness of the Board. The NC is also required to determine whether Directors who hold multiple board representations are able to and have been devoting sufficient time to discharge their responsibilities adequately. Code 2012 requires listed companies to fix the maximum number of board representations on other listed companies that their directors may hold and to disclose this in their annual report. Details of such directorships and other principal commitments of our Directors may be found on pages 20 to 24. In determining whether each Director is able to devote sufficient time to discharge his or her duties, the NC has taken cognizance of the Code 2012 requirement, but is of the view that its assessment should not be restricted to the number of board representations of each Director – and their respective principal commitments – per se. Holistically, the contributions by the Directors to and during meetings of the Board and relevant Board Committees as well as their attendance at such meetings are also taken into account. The NC also reviews all nominations for appointments and re-appointments to the Board and to Board Committees, and submits its recommendations for approval by the Board taking into account an appropriate mix of core competencies for the Board to fulfill its roles and responsibilities. The Committee takes the lead in identifying, evaluating and selecting suitable candidates for new directorships. In its search and selection process, the NC considers factors such as the ability of the prospective candidate to contribute to discussions, deliberations and activities of the Board and Board Committees. It also reviews the composition of the Board – including the mix of expertise, skills and attributes of Directors – so as to identify needed and/or desired competencies to supplement the Board’s existing attributes. Where it deems necessary or appropriate, the Committee may tap on its networking contacts and/or engage external professional headhunters to assist with identifying and shortlisting candidates. 85 annual report2014CORPORATEGoVernanCeThe Company’s Articles of Association provides that at least one-third of its Directors shall retire from office and are subject to re-election at every Annual General Meeting of the Company (“AGM”). All Directors are required to retire from office at least once every three years. The NC will assess and evaluate whether Directors retiring at each AGM are properly qualified for reappointment by virtue of their skills, experience and contributions. Newly-appointed Directors during the year must also submit themselves for retirement and re-election at the next AGM immediately following their appointment. The Shareholders approve the appointment or re-appointment of Board members at the AGM. The NC determines the independence of each Director annually based on the definitions and guidelines of independence set out in Code 2012. For the financial year ended 30 September 2014, the Nominating Committee has performed a review of the independence of the Directors as at 30 September 2014 and following its assessment, has determined the status of each Director as follows: Mr Charoen Sirivadhanabhakdi1 Khunying Wanna Sirivadhanabhakdi1 Mr Charles Mak Ming Ying Mr Chan Heng Wing Mr Philip Eng Heng Nee Mr Wee Joo Yeow Mr Weerawong Chittmittrapap Mr Chotiphat Bijananda2 Mr Panote Sirivadhanabhakdi3 Mr Sithichai Chaikriangkrai4 Non-Independent Non-Independent Independent Independent Independent Independent Independent Non-Independent Non-Independent Non-Independent Notes: 1 Each of Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi are directly or indirectly interested in not less than ten percent (10%) of the total voting shares in the Company through their interests in TCC Assets Limited (“TCCA”) and Thai Beverage Public Company Limited (“ThaiBev”). TCCA has a direct interest of 59.39% in the Company and ThaiBev, through its indirect wholly-owned subsidiary InterBev Investment Limited, holds 28.54% interest in the Company. Mr Charoen Sirivadhanabhakdi is married to Khunying Wanna Sirivadhanabhakdi. 2 Mr Chotiphat Bijananda is the son-in-law of Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi and a director of TCCA. 3 Mr Panote Sirivadhanabhakdi being a son of Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi is an immediate family member of a ten percent (10%) shareholder of the Company. 4 Mr Sithichai Chaikriangkrai is a Director and the Chief Financial Officer of ThaiBev. Key Information regarding Directors Key information on the Directors is set out on pages 20 to 24. Principle 5: Board Performance The effectiveness of the Board as a whole and the contribution by each Director to the effectiveness of the Board will be assessed annually. All Directors will be required to assess the performance of the Board and the Board Committees. The assessment will be likely to cover areas such as Board processes, managing the Company’s performance, effectiveness of the Board Committees, Director development and management self-evaluation. Directors will also be asked to provide input on issues which do not fall under these categories, for instance, addressing specific areas where improvements can be made. Feedback and comments received from the Directors would then be reviewed by the NC, in consultation with the Chairman of the Board. External consultants may also be engaged to facilitate the formulation and implementation of the Board evaluation process. Based on the NC’s review, the Board and the various Board Committees operate effectively and each Director is contributing to the overall effectiveness of the Board. 86 Frasers centrepoint limited & subsidiariesCORPORATEGoVernance Principle 6: Access to Information Management provides the Board with detailed Board papers specifying relevant information and commercial rationale for each proposal for which Board approval is sought. Such information includes relevant financial forecasts, risk analyses, mitigation strategies, feasibility studies and key commercial issues for the Board’s attention and consideration. Reports on major operational matters, business development activities, financial performance, potential investment opportunities and budgets are circulated to the Board. A calendar of activities is scheduled for the Board a year in advance, with Board papers and agenda items dispatched to the Directors about a week before scheduled meetings as far as possible. This is to give Directors sufficient time to review and consider the matters being tabled and/or discussed so that discussions can be more meaningful and productive. Senior Management from the Company’s business divisions is requested to attend meetings of the Board and the Board Committees in order to provide input and insight into matters being discussed, and to respond to any queries that the Directors may have. The Board also has separate and independent access to the Company’s senior Management and the Company Secretary. The Company Secretary attends all Board meetings, ensures that Board procedures are complied with, and provides advice and guidance on corporate governance, and on legal and regulatory compliance. The Company Secretary also facilitates and acts as a channel of communications for the smooth flow of information to and within the Board and its various Committees, as well as between and with senior Management. Additionally, the Company Secretary solicits and consolidates Directors’ feedback and evaluation from time to time, and arranges for and facilitates orientation programmes for new Directors and assists with their professional development as required. The Company Secretary is the Company’s primary channel of communication with SGX-ST. Where it is necessary for the efficacious discharge of their duties, the Directors may seek and obtain independent professional advice at the Company’s expense. B. R EM UNER ATIO N MATTE RS Principle 7: Procedures for Developing Remuneration Policies Remuneration Committee (or RC) The RC1 is made up of non-executive Directors, the majority of whom, including the Chairman, are independent Directors. It comprises the following members: Mr Philip Eng Heng Nee Mr Charles Mak Ming Ying Mr Panote Sirivadhanabhakdi Chairman Member Member Note: 1 The RC was constituted on 25 October 2013. The RC’s main responsibility is to assist the Board in establishing a formal and transparent process for developing policies on executive remuneration and development. The RC also reviews remuneration packages and service terms of individual Directors and the Group CEO. When carrying out its duties, the RC reviews and makes recommendations on the remuneration framework for the Board and key management personnel. The RC also oversees the framework for remuneration for other key Management of the Company. The RC reviews the level and mix of remuneration and benefits policies and practices of the Company, where appropriate, including long-term incentives. When conducting such reviews, the RC takes into account the performance of the Company and employees. It also reviews and approves the framework for salary reviews, performance bonus and incentives for key Management of the Group. 87 annual report2014CORPORATEGoVernanCeThe RC will also review and recommend to the Board succession plans for key Management and the leadership pipeline for the Company. In doing so, the RC aligns the Group CEO’s leadership – through appropriate remuneration and benefits policies and long-term incentives – with the Company’s strategic objectives and key challenges. Performance targets will also be set for the Group CEO and his performance evaluated yearly. The RC 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 Company to stay competitive in its remuneration packages. Principle 8: Level and Mix of Remuneration In recommending the level and mix of remuneration, the RC seeks to build, motivate and retain Directors and key Management. It ensures that competitive remuneration policies and practices are in place to draw and motivate high-performing executives so as to drive the Group’s businesses to greater growth, efficiency and profitability. In its deliberation, the RC takes into consideration industry practices and benchmarks against relevant industry players to ensure that its remuneration and employment conditions are competitive. The Company’s compensation framework comprises fixed pay and short-term and long-term incentives. The Company subscribes to linking executive remuneration to corporate and individual performance, based on an annual appraisal of employees and using indicators such as core values, competencies, key result areas, performance rating, and potential of the employees. Long-term incentive schemes are in place to motivate and reward employees and align their interests to maximise long–term Shareholder value. Long Term Incentive Plans The RC administers the Company’s share-based remuneration incentive plans, namely, the FCL Restricted Share Plan (“RSP”) and FCL Performance Share Plan (“PSP”)1. Note: 1 The FCL RSP and FCL PSP were approved by the Board and adopted on 25 October 2013. Through the RSP and PSP, the Company seeks to foster a greater ownership culture within the FCL Group by aligning more directly the interests of key senior Management and senior executives with the interest of Shareholders, and for such employees to participate and share in the Group’s growth and success. The RSP is available to a broader base of senior executives compared to the PSP. Its objectives are to increase the Company’s flexibility and effectiveness in its continuing efforts to attract, motivate and retain talented senior executives and to reward these executives for the performance of the Company and that of the individual. The PSP applies to senior Management in key positions who shoulder the responsibility of the Company’s performance and who are able to drive the growth of the Company through superior performance. It serves as further motivation to key senior Management in striving for excellence and delivering long-term Shareholder value. Under the RSP and PSP, the Company grants share-based awards (“Base Awards”) conditional upon pre-determined performance targets being met. These targets are set by the RC in its absolute discretion for the performance conditions to be met over the performance period. The performance period for the RSP and PSP are two years and three years respectively. For the RSP, the targets set are the achievement of Attributable Profit Before Fair Value Adjustment and Exceptional Items and Return On Capital Employed. For the PSP, the pre-set targets are based on Return On Invested Capital, Total Shareholders’ Return Relative to FTSE Straits Times Real Estate Index and Absolute Shareholders’ Return as a multiple of Cost of Equity. 88 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceThe awards represent the right to receive fully paid shares, their equivalent cash value or a combination thereof, free of charge, provided certain prescribed performance conditions are met. The final number of shares to be released will depend on the achievement of the pre-determined targets at the end of the performance period. If such targets are met and/or exceeded, more shares than the Base Awards can be delivered, subject to a maximum percentage of the Base Awards. The maximum number of Company shares which can be released, when aggregated with the number of new shares issued pursuant to the vesting of awards under the RSP and PSP will not exceed ten percent (10%) of the issued share capital of the Company. Senior management participants are required to hold a minimum number of the shares released to them under the RSP and PSP to maintain a beneficial ownership stake in the Company for the duration of their employment or tenure with the Company. In the Introductory Document dated 28 October 2013 for the listing of the Company, it was disclosed that the Company may on or after its listing grant replacement FCL Awards (“Replacement FCL Awards”) to certain employees of the Group pursuant to the RSP and PSP, in replacement of awards previously granted to them pursuant to the Fraser and Neave, Limited Restricted Share Plan and the Fraser and Neave, Limited Performance Share Plan (the “Outstanding F&N Awards”). Replacement FCL Awards were granted on 3 October 2014 to replace the Outstanding F&N Awards previously granted to employees pursuant to the Fraser and Neave, Limited Share Plans. The first grant under the RSP and PSP for the Financial Year 2013/2014 was also made on 3 October 2014. Principle 9: Disclosure on Remuneration Remuneration of Directors and Top Five Key Management Executives Information on the remuneration of Directors of the Company and key management executives of the Group for the financial year ended 30 September 2014 are set out below. Directors of the Company1 Mr Charoen Sirivadhanabhakdi2 Khunying Wanna Sirivadhanabhakdi3 Mr Charles Mak Ming Ying4 Mr Chan Heng Wing4, 6 Mr Philip Eng Heng Nee4 Mr Wee Joo Yeow5 Mr Weerawong Chittmittrapap4 Mr Chotiphat Bijananda6 Mr Panote Sirivadhanabhakdi6 Mr Sithichai Chaikriangkrai6 Remuneration S$ –7 –7 197,387 106,226 214,6138 79,892 123,258 163,000 148,000 164,000 Notes: 1 Mrs Siripen Sitasuwan had been appointed as a non-executive and independent Director on 25 October 2013 and re-appointed to the Board of FCL on 7 January 2014. She stepped down on 10 March 2014 in line with the disclosure made in the Introductory Document dated 28 October 2013 relating to the listing of the Company. Director fees paid to her amount to $49,589. 2 Mr Charoen Sirivadhanabhakdi was appointed as non-executive and non-independent Director on 25 October 2013. 3 Khunying Wanna Sirivadhanabhakdi was appointed as non-executive and non-independent Director on 7 January 2014. 4 Mr Charles Mak, Mr Chan Heng Wing, Mr Philip Eng and Mr Weerawong Chittmittrapap were appointed as non-executive and independent Directors on 25 October 2013. 5 Mr Wee Joo Yeow was appointed as non-executive and independent Director on 10 March 2014. 6 Mr Chan Heng Wing, Mr Chotiphat Bijananda, Mr Panote Sirivadhanabhakdi and Mr Sithichai Chaikriangkrai were re-appointed to the Board of FCL at the Annual General Meeting held on 7 January 2014. 7 Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi waived payment of Directors’ fees due to them. 8 Includes $76,000 being payment of directors’ fees from FCL’s subsidiary, Frasers Centrepoint Asset Management Ltd. 89 annual report2014CORPORATEGoVernanCeRemuneration of Group CEO for Year Ended 30 September 2014 Mr Lim Ee Seng Remuneration $ 4,016,000 Salary % 35 Bonus % 30 Allowances & Benefits % 2 Long Term Inc / Benefits % 33 Remuneration of Key Management Executives for Year Ended 30 September 2014 Between $900,001 and $1,150,000 Mr Tang Kok Kai Christopher Mr Chia Khong Shoong Mr Choe Peng Sum Mr Cheang Kok Kheong Between $650,001 to $900,000 Mr Uten Lohachitpitaks Salary % Bonus % Allowances & Benefits % Long Term Inc / Benefits % 44 42 42 42 60 26 26 26 25 35 5 5 5 5 5 25 27 27 28 0 Total % 100 Total % 100 100 100 100 100 There are no existing or proposed service agreements entered into or to be entered into by the Company or any of its subsidiaries with Directors, the Group CEO or other key management executives which provide for compensation in the form of stock options, or pension, retirement or other similar benefits, or other benefits, upon termination of employment. There are no employees within the FCL Group who are immediate family members of a Director, and whose remuneration exceeds S$50,000 during the year. Directors’ Fees The remuneration of non-executive Directors takes into account their level and quality of contribution and their respective responsibilities, including attendance and time spent at Board meetings and Board Committee meetings. Directors are paid a basic fee and attendance fees for attending Board meetings. Non-Executive Directors who perform services through Board Committees are paid additional basic and attendance fees for such services. No Director decides his own fees. Directors’ fees will be reviewed periodically to benchmark such fees against the amounts paid by listed industry peers. The Company’s Board fee structure during the year is as set out below. Basic Fee ($) Attendance Fee ($) Board – Chairman – Member Audit Committee and Board EXCO – Chairman – Member Nominating Committee, Remuneration Committee and Risk Management Committee – Chairman – Member 150,000 75,000 50,000 25,000 30,000 15,000 2,000 1,000 2,000 1,000 2,000 1,000 Shareholders’ approval will be sought at the next Annual General Meeting of the Company on 30 January 2015, for the payment of the Directors’ fees for the financial year ending 30 September 2015 of up to $2,000,000 (last year: up to $1,453,000). 90 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceC. ACCOUN TABILITY AND AUDI T Principle 10: Accountability FCL prepares its financial statements in accordance with the Singapore Financial Reporting Standards (“SFRS”) prescribed by the Accounting Standards Council. The Board provides Shareholders with quarterly and annual financial reports, and releases its quarterly and full year financial results through announcements to the SGX-ST and, where appropriate, press releases and media and analysts’ briefings. In communicating and disseminating its results, FCL aims to present a balanced and clear assessment of the Group’s performance, position and prospects. Principle 11: Risk Management and Internal Controls The Company maintains a sound system of risk management and internal controls with a view to safeguard its assets and Shareholders’ interests. The AC1, with the assistance of internal and external auditors, reviews and reports to the Board on the adequacy of the Company’s system of controls, including financial, operational, compliance controls and information technology, established by Management. In assessing the effectiveness of internal controls, the AC ensures primarily that key objectives are met, material assets are properly safeguarded, fraud or errors in the accounting records are prevented or detected, accounting records are accurate and complete, and reliable financial information is prepared in compliance with applicable internal policies, laws and regulations. Note: 1 The AC was constituted on 25 October 2013. The importance and emphasis placed by the FCL Group on internal controls is underpinned by the fact that the key performance indicators for Management’s performance takes into account the findings of both internal and external auditors and the number of unresolved or outstanding issues raised in the process. Risk Management Committee The Board, through the RMC1, reviews the adequacy of the Group’s risk management framework to ensure that robust risk management and mitigating controls are in place. The Company has adopted an enterprise-wide risk management (“ERM”) framework to enhance its risk management capabilities. Key risks, mitigating 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. Note: 1 The RMC was constituted on 25 October 2013. The RMC oversees the risk management framework and policies of the Group. It is responsible for, among other things, reviewing the Group’s risk management strategy, policies, enterprise-wide risk management framework, processes and procedures for identifying, measuring, reporting and mitigating key risks in the Group’s businesses and operations. In this regard, key risks, findings and recommendations are reported to the Board. Together with the AC, the RMC helps to ensure that Management maintains a sound system of risk management and internal controls to safeguard the interests of Shareholders and the assets of the Group. Through guidance to and discussions with Management, it assists the Board in its determination of the nature and extent of significant risks which the Board is willing to take in achieving the Group’s strategic objectives. The meetings of the RMC are attended by the senior Management of the Group, and serve as a forum to review and discuss material risks and exposures of the Group’s businesses and strategies to mitigate risks. 91 annual report2014CORPORATEGoVernanCeThe RMC comprises the following members: Chairman Mr Chotiphat Bijananda Member Mr Charles Mak Ming Ying Mr Chan Heng Wing Member Mr Weerawong Chittmittrapap Member Member Mr Panote Sirivadhanabhakdi Member Mr Sithichai Chaikriangkrai Periodic updates are provided to the RMC on the Group’s risk profile. These updates include an assessment of the Group’s key risks by major business units, risk categories, and the status and changes in plans undertaken by Management to manage key risks. Using a comfort matrix of key risks, the material financial, compliance and operational (including information technology) risks of the Company have been documented and presented against strategies, policies, people, processes, systems, mechanisms and reporting processes that have been put in place. The Management of the Company also carries out control self-assessment in key areas of their respective businesses and operations to evaluate the adequacy and effectiveness of their risk management measures and internal controls. The Board has received assurance from the CEO and the CFO of the Company that as at 30 September 2014, (a) the financial records of the Group have been properly maintained and the financial statements for the year ended 30 September 2014 give a true and fair view of the Group’s operations and finances; (b) the system of internal controls in place for the Group is adequate and effective as at 30 September 2014 to address financial, operational, compliance and information technology risks which the Group considers relevant and material to its operations; and (c) the risk management system in place for the Group is adequate and effective as at 30 September 2014 to address risks which the Group considers relevant and material to its operations. Based on the internal controls established and maintained by the Group, work performed by internal and external auditors, reviews performed by Management and various Board Committees and assurance from the CEO and the CFO, the Board, with the concurrence of the Audit Committee, is of the opinion that the Group’s internal controls were adequate and effective as at 30 September 2014 to address financial, operational, compliance and information technology risks, which the Group considers relevant and material to its operations. Based on the risk management framework established and assurance from the CEO and the CFO, the Board is of the view that the Group’s risk management system was adequate and effective as at 30 September 2014 to address risks which the Group considers relevant and material to its operations. The Board notes that the system of internal controls and risk management provides reasonable, but not absolute, assurance that the Group will not be adversely affected by any event that could be reasonably foreseen as it works to achieve its business objectives. In this regard, the Board also notes that no system of internal controls and risk management can provide absolute assurance against the occurrence of material errors, poor judgment in decision making, human error, losses, fraud or other irregularities. An outline of the Group’s ERM framework is set out on pages 78 to 79. Principle 12: Audit Committee The AC, on behalf of the Board, undertakes the monitoring and review of the system of internal controls. Its main responsibilities are to assist the Board in the discharge of its oversight responsibilities in the areas of internal controls, financial and accounting practices, operational and compliance controls. Significant findings are reported to the Board. The AC is guided by written Terms of Reference endorsed by the Board and which set out its duties and responsibilities. It is duly authorised to investigate any matter within such Terms of Reference, and has full access to and the co- operation of Management, as well as the full discretion to invite any Director or executive officer to attend its meetings. 92 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceThe AC comprises the following members: Mr Charles Mak Ming Ying Mr Philip Eng Heng Nee Mr Wee Joo Yeow Mr Sithichai Chaikriangkrai Chairman Member Member Member The AC is made up of non-executive Directors, the majority of whom, including the Chairman, are independent Directors. The members of the AC are appropriately qualified. Their collective wealth of experience and expertise on accounting and financial management enables them to discharge their responsibilities competently. The Company has committed reasonable resources to enable the Committee to discharge its functions effectively. During the year, the key activities of the Audit Committee included the following: • • • • • • • • Reviewing the quarterly and full-year financial results and related SGX announcements, including significant financial reporting issues and assessments, to safeguard the integrity in financial reporting, and to ensure compliance with the requirements of the Singapore Financial Reporting Standards. Approving, on behalf of the Board, the 1st and 3rd Quarter financial results and related SGX-ST announcements Recommending, for the approval of the Board, the half-year and annual financial results and related SGX-ST announcements Reviewing and evaluating with internal and external auditors, the adequacy and effectiveness of internal control systems, including financial, operational and compliance controls Reviewing and approving the internal and external audit plans to ensure the adequacy of the audit scope Reviewing with internal and external auditors, the audit report and their recommendations, and monitoring the timely and proper implementation of any required corrective or improvement measures Reviewing the adequacy and effectiveness of the Group’s internal audit function, including the adequacy of internal audit resources and its appropriate standing within the Group Reviewing whistle-blowing investigations within the Group and ensuring appropriate follow-up actions, if required The Committee also meets with internal and external auditors without the presence of Management at least once a year to obtain feedback on the competency and adequacy of the finance function and to ascertain if there are any material weaknesses or control deficiencies in the Group’s financial reporting and operational systems. In addition, periodic updates on changes in accounting standards and treatment are prepared by external auditors and circulated to members of the AC. The Committee makes recommendations to the Board for approval by shareholders, the appointment and re-appointment and removal of the Company’s external auditors. During the year, the Audit Committee conducted a review of the scope and results of audit by the incumbent auditors and its cost effectiveness, as well as the independence and objectivity of the auditors. It also reviewed all non-audit services provided by the incumbent auditors, and the aggregate amount of audit fees paid to them. For details of fees payable to the auditors in respect of audit and non-audit services for the year ended 30 September 2014, please refer to Note 6 of the Notes to the Financial Statements on page 141. The Audit Committee is satisfied that neither their independence nor their objectivity is put at risk, and that they are still able to meet the audit requirements and statutory obligations of the Company. It is also satisfied with the aggregate amount of audit fees paid to the auditors. Accordingly, the Audit Committee has recommended the re-appointment of the external auditors at the Annual General Meeting of FCL. In recommending the re-appointment of the auditors, the Audit Committee considered and reviewed a variety of factors including the adequacy of resources, experience of supervisory and professional staff to be assigned to the audit, and size and complexity of the Group, its businesses and operations. 93 annual report2014CORPORATEGoVernanCeWhistle-Blowing Policy The Company has in place a Whistle-Blowing Policy. This Policy provides an independent feedback channel through which matters of concern about possible improprieties in matters of financial reporting or other matters may be raised by employees and any other persons in confidence and in good faith, without fear of reprisal. Details of this policy have been disseminated and made available. All matters which are raised are then independently investigated and appropriate actions taken. The AC ensures that independent investigations and any appropriate follow-up actions are carried out. Principle 13: Internal Audit During the financial year ended 30 September 2014, the Internal Audit (“IA”) function for the Company was performed by the Internal Audit department of Fraser and Neave, Limited (“F&NL”), FCL’s parent company prior to its listing, as part of a transitional arrangement between the Company and F&NL for shared corporate services. On 25 October 2013, the Company had entered into a Shared Services Agreement (“SSA”) with Fraser & Neave (Singapore) Pte Limited (“F&NS”), a wholly-owned subsidiary of F&NL, pursuant to which certain shared services (including IA services) were provided by F&NS to the Company as part of transitional arrangements in conjunction with FCL’s listing. It was envisaged that an independent IA department would perform the IA function for the Group (“FCL IA Department”) on and after the expiry or termination of the SSA. The FCL IA Department would be responsible for conducting objective and independent assessments on the adequacy and quality of the Group’s system of internal controls, and the Head of IA for FCL would report directly to the Chairman of the AC and administratively, to the Company Secretary. For the financial year ended 30 September 2014, in performing IA services for the Company, the IA department adopted and complied with the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors. The Head of the IA department and most of the internal audit staff are members of the Institute of Internal Auditors, Singapore. To ensure that the internal audits are effectively performed, it recruits and employs suitably qualified staff with the requisite skills and experience. Such staff are given relevant training and development opportunities to update their technical knowledge and auditing skills. Key staff members of the IA department also received relevant technical training and seminars organised by the Institute of Internal Auditors, Singapore and other professional bodies. The IA department operates within the framework stated in a set of Terms of Reference. During the year, the Head of IA department reported directly to the Chairman of the AC. It adopted a risk-based audit methodology to develop its audit plans, and its activities were aligned to key risks of the FCL Group. Based on risk assessments performed, greater focus and appropriate review intervals were then set for higher risk activities, and material internal controls, including compliance with the Company’s policies, procedures and regulatory responsibilities. During the year ended 30 September 2014, the IA department conducted its audit reviews based on the approved internal audit plans. All audit reports detailing audit findings and recommendations are provided to Management who would respond on the actions to be taken. Each quarter, the IA Department would submit quarterly reports to the AC on the status of the audit plan and on audit findings and actions taken by Management on such findings. Key findings are highlighted at AC meetings for discussion and follow-up action. The AC monitors the timely and proper implementation of required corrective, preventive or improvement measures undertaken by Management. The AC is satisfied that the IA department has adequate resources and appropriate standing within the Company to perform its functions effectively. 94 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceD. S HA REH OLDE R R IGH TS AND R E S PO NSI B I LI TI ES Principle 14: Shareholder Rights FCL believes in treating all shareholders fairly and equitably. It aspires to keep all shareholders and other stakeholders and analysts in Singapore and beyond informed of its corporate activities, including changes (if any) in the Company or its businesses which are likely to materially affect the price or value of its shares, in a timely and consistent manner. Shareholders of FCL will be given the opportunity to participate effectively and vote at general meetings of the Company, where relevant rules and procedures governing such meetings (for instance, how to vote) will be clearly communicated. Principle 15: Communication with Shareholders The Company prides itself on its high standards of disclosure and corporate transparency. At the Securities Investors Association (Singapore) (“SIAS”) 15th Investors’ Choice Awards, FCL was named the Most Transparent Company for the New Listings Category. FCL aims to provide fair, relevant, comprehensive and timely information regarding the Group’s performance and progress to shareholders and the investment community to enable them to make informed investment decisions. The Group’s dedicated Investor Relations (“IR”) team is tasked with and focuses on facilitating communications between the Company and its Shareholders, as well as with the investment community. The IR team communicates regularly with its Shareholders, as well as with the investment community, through timely disclosures of material and other pertinent information, and via forums such as regular dialogues and announcements to SGX-ST. The team also conducts roadshows (together with key senior Management), and participates in investor seminars and conferences to keep the market and investors apprised of the FCL Group’s corporate developments and financial performance. During the year, the IR team, together with senior Management, engaged with Singapore and foreign investors at conferences, briefings and calls, non-deal roadshows as well as one-on-one and group meetings. The aim of such engagements is to provide shareholders and investors prompt disclosure of relevant information, to enable them to have a better understanding of the Company’s businesses and performance. The Company makes available all its briefing materials to analysts and the media, its financial information, its annual reports and all announcements to the SGX-ST and on its website at www.fraserscentrepoint.com, with contact details for investors to channel their comments and queries. Further details on IR’s activities and responsibilities during the year can be found in the Investor Relations section of the Annual Report on pages 58 to 59. As previously disclosed in the Introductory Document, the Company intends to recommend dividends of up to 75% of its net profit after tax after considering factors such as its level of cash and reserves, results of operations, business prospects, capital requirements and surplus, general financial condition, contractual restrictions, the absence of any circumstances which might reduce the amount of reserves available to pay dividends and other factors relevant to the Board (including the expected financial performance of FCL). Principle 16: Conduct of Shareholder Meetings The Board supports and encourages active shareholder participation at AGMs as it believes that general meetings serve as an opportune forum for shareholders to meet the Board and senior Management, and to interact with them. The Company’s Articles of Association allows Shareholders the right to appoint up to two proxies to attend and vote on their behalf in shareholders’ meetings. A copy of the Annual Report and notice of AGM are sent to all Shareholders. Separate resolutions are proposed on each substantially separate issue at the meeting. Shareholders are given the opportunity to raise questions and clarify any issues that they may have relating to the resolutions to be passed. 95 annual report2014CORPORATEGoVernanCeBoard members and senior Management are present at each Shareholders’ meeting to respond to any questions from Shareholders. The Company’s external auditors are also present to address queries about the conduct of audit and the preparation and content of the auditors’ report. For greater transparency, FCL has implemented electronic poll voting at AGMs. This entails Shareholders being invited to vote on each of the resolutions by poll, using an electronic voting system (instead of voting by hands), thereby allowing all shareholders present or represented at the meeting to vote on a one share, one vote basis. The voting results of all votes cast for, or against, each resolution is then screened at the meeting and announced to the SGX-ST after the meeting. FCL will continue to use the electronic poll voting system at the forthcoming Annual General Meeting. Listing Rule 1207 sub-Rule (19) on Dealings in Securities In compliance with Listing Rule 1207 sub-Rule (19) of the SGX-ST Listing Manual, the Group issues quarterly reminders to its Directors, officers and employees on the restrictions in dealings in listed securities of the Group during the period commencing (i) two weeks prior to the announcement of financial results of each of the first three quarters of the financial year, and (ii) one month before the announcement of full year results, and ending on the date of such announcements. Directors, officers and employees are also reminded not to trade in listed securities of the Group at any time while in possession of unpublished price sensitive information and to refrain from dealing in the Group’s securities on short-term considerations. 96 Frasers centrepoint limited & subsidiariesCORPORATEGoVernanceF I N A N C I A L S T A T E M E N T S 9 8 D I R E C T O R S ’ R E P O R T 1 0 4 S T A T E M E N T B Y D I R E C T O R S 1 0 5 I N D E P E N D E N T A U D I T O R ’ S R E P O R T 1 0 6 C O N S O L I D A T E D P R O F I T S T A T E M E N T 1 0 7 C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E 1 0 8 B A L A N C E S H E E T S 1 0 9 S T A T E M E N T S O F C H A N G E S I N E Q U I T Y 1 1 3 C O N S O L I D A T E D C A S H F L O W S T A T E M E N T 1 1 6 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S D I R E C T O R S ’ R E P O R T The directors have pleasure in submitting their report and the audited consolidated financial statements of Frasers Centrepoint Limited (the “Company”) and subsidiaries (the “Group”) and the balance sheet and statements of changes in equity of the Company for the year ended 30 September 2014. 1. DIRECTORATE The directors of the Company in office at the date of this report are: (Appointed on 25 October 2013) * Mr Charoen Sirivadhanabhakdi (Chairman) Khunying Wanna Sirivadhanabhakdi (Vice Chairman) (Appointed on 7 January 2014) Mr Charles Mak Ming Ying Mr Chan Heng Wing Mr Philip Eng Heng Nee Mr Wee Joo Yeow Mr Weerawong Chittmittrapap Mr Chotiphat Bijananda Mr Panote Sirivadhanabhakdi Mr Sithichai Chaikriangkrai (Appointed on 25 October 2013) * (Appointed on 25 October 2013) * # (Appointed on 25 October 2013) * (Appointed on 10 March 2014) (Appointed on 25 October 2013) * # # # Appointed at Extraordinary General Meeting on 25 October 2013. * # Re-appointed at Annual General Meeting on 7 January 2014. Mrs Siripen Sitasuwan resigned from the Board on 10 March 2014. The Board places on record its appreciation to Mrs Sitasuwan for her past services. At the forthcoming Annual General Meeting, the following directors will retire and, being eligible, offer themselves for re-election: – – – Pursuant to Section 153(6) of the Companies Act, Chapter 50: • Mr Charoen Sirivadhanabhakdi • Khunying Wanna Sirivadhanabhakdi By rotation pursuant to Article 91 of the Company’s Articles of Association: • Mr Philip Eng Heng Nee • Mr Charles Mak Ming Ying • Mr Weerawong Chittmittrapap Pursuant to Article 97 of the Company’s Articles of Association, having been appointed since the last Annual General Meeting: • Mr Wee Joo Yeow 2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES Neither at the end of, nor at any time during, the financial year did there subsist any arrangements to which the Company is a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, save as disclosed in this report. 98 Frasers centrepoint limited & subsidiaries D I R E C T O R S ’ R E P O R T 3. DIRECTORS' INTERESTS IN SHARES OR DEBENTURES The directors holding office at the end of the financial year who had interests in the shares in or debentures of the Company and its related corporations as recorded in the register required to be kept under Section 164 of the Companies Act, Chapter 50 are as follows: Charoen Sirivadhanabhakdi – Frasers Centrepoint Limited • Ordinary Shares FCL Treasury Pte. Ltd. • S$600,000,000 4.88% Subordinated Perpetual Securities – – – – – (Series 3) (S$) Australand Property Group • Ordinary Shares Fraser and Neave, Limited • Ordinary Shares Fraser & Neave Holdings Bhd • Ordinary Shares TCC Assets Limited • Ordinary Shares Khunying Wanna Sirivadhanabhakdi – Frasers Centrepoint Limited • Ordinary Shares FCL Treasury Pte. Ltd. • S$600,000,000 4.88% Subordinated Perpetual Securities – – – – – (Series 3) (S$) Australand Property Group • Ordinary Shares Fraser and Neave, Limited • Ordinary Shares Fraser & Neave Holdings Bhd • Ordinary Shares TCC Assets Limited • Ordinary Shares OTHER SECURITIES IN GROUP COMPANIES As at 1 Oct 2013 or Date of Appointment As at 30 Sep 2014 Nil 2,541,007,768 (1) Nil 250,000,000 (2) Nil 573,807,176 (3) 1,301,433,884 1,270,503,884 (4) 203,470,910 203,470,910 (5) 25,000 25,000 Nil 2,541,007,768 (1) Nil 250,000,000 (2) Nil 573,807,176 (3) 1,301,433,884 1,270,503,884 (4) 203,470,910 203,470,910 (5) 25,000 25,000 99 annual report2014 D I R E C T O R S ’ R E P O R T 3. DIRECTORS' INTERESTS IN SHARES OR DEBENTURES (CONT’D) (1) The acquisition of interest arose from (i) the completion of the distribution of dividend in specie by Fraser and Neave, Limited (“F&N”) of all the ordinary shares in the issued share capital of Frasers Centrepoint Limited (the “Company”) to shareholders of F&N, on the basis of 2 shares in the Company for each share in F&N held by F&N shareholders; and (ii) the listing of the Company on the Main Board of the Singapore Exchange Securities Trading Limited on 9 January 2014 (the “Listing Date”). Each of Charoen Sirivadhanabhakdi and his spouse, Khunying Wanna Sirivadhanabhakdi, owns 50% of the issued and paid-up share capital of TCC Assets Limited ("TCCA"), and is therefore deemed to be interested in all of the 1,716,160,124 shares in Frasers Centrepoint Limited (“FCL”) in which TCCA has an interest. Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi also jointly hold a 51% direct interest in Siriwana Company Limited, which in turn holds an approximate 45.27% direct interest in Thai Beverage Public Company Limited (“ThaiBev”). Further, Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi also jointly hold a 100% direct interest in MM Group Limited (“MM Group”). MM Group holds a 100% direct interest in each of Maxtop Management Corp. (“Maxtop”), Risen Mark Enterprise Ltd. (“RM”) and Golden Capital (Singapore) Limited (“GC”). Maxtop holds a 17.23% direct interest in ThaiBev; RM holds a 3.32% direct interest in ThaiBev; and GC holds a 0.06% direct interest in ThaiBev. ThaiBev holds a 100% direct interest in International Beverage Holdings Limited, which in turn holds a 100% direct interest in InterBev Investment Limited (“IBIL”). Each of Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi is therefore deemed to be interested in all of the 824,847,644 shares in FCL in which IBIL has an interest. TCC Prosperity Limited (“TCCP”) subscribed for S$250 million in aggregate principal amount of perpetual securities issued by FCL Treasury Pte. Ltd. on 24 September 2014. Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi own all the shares in TCCP in equal shares, and therefore are deemed to be interested in the perpetual securities in which TCCP has an interest. On 7 July 2014, Frasers Amethyst Pte Ltd, a wholly-owned subsidiary of FCL, made an off-market takeover bid to acquire up to 100% of the issued stapled securities of the Australand Property Group (being shares in Australand Holdings Limited and units in Australand Property Trust, Australand Property Trust No. 4 and Australand Property Trust No. 5). Each of Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi owns more than 20% of the issued and paid-up share capital of TCCA. TCCA is in turn the majority shareholder of FCL. Accordingly, each of Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi is deemed to be interested in the 573,807,176 stapled securities in which TCCA has an interest held through FCL and its subsidiaries as at 30 September 2014. (2) (3) (4) As at 30 September 2014: – – TCCA holds 858,080,062 shares in Fraser and Neave, Limited (“F&N”); and IBIL holds 412,423,822 shares in F&N. Each of Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi is therefore deemed to be interested in all of the shares in F&N in which TCCA and IBIL have an interest. (5) As at 30 September 2014, F&N holds 203,470,910 shares in Fraser & Neave Holdings Bhd. Therefore, each of Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi has a deemed interest in all of the shares in Fraser & Neave Holdings Bhd in which F&N has an interest. There was no change in any of the abovementioned interests between the end of the financial year and 21 October 2014. Except as disclosed in this report, no director who held office at the end of the financial year had interest in shares in or debentures of the Company, or its related corporations. 4. DIRECTORS’ CONTRACTUAL BENEFITS Since the end of the previous financial year, no director has received or has become entitled to receive a benefit required to be disclosed by Section 201(8) of the Companies Act, Chapter 50 by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he had a substantial financial interest except as disclosed in this report or in the financial statements of the Company or of the Group, and except that certain directors have employment relations with, or are directors/officers of related corporations and have received remuneration/fees/benefits in those capacities. 100 Frasers centrepoint limited & subsidiariesD I R E C T O R S ’ R E P O R T 5. SHARE OPTIONS AND SHARE PLANS (a) Share Options The Company does not have any share option scheme in place. (b) Share Plans On 25 October 2013, F&N, which was then the sole shareholder of the Company, approved the adoption of the FCL Restricted Share Plan (“RSP”) and FCL Performance Share Plan (“PSP”). The RSP and PSP are administered by the Remuneration Committee which comprises the following three non-executive directors who do not participate in the Share Plans: Mr Philip Eng Heng Nee (Chairman) Mr Charles Mak Ming Ying Mr Panote Sirivadhanabhakdi (c) Share Grants Under RSP and PSP (i) Under the RSP and PSP, the Company grants shares to eligible participants annually, referred to herein as “RSP Shares” and “PSP Shares”, respectively. The grant (“Base Award”) represents the right to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, provided that certain prescribed performance conditions are met. The Remuneration Committee that administers this scheme has absolute discretion in the granting of shares under the RSP and PSP. The vesting of the RSP Base Award and the PSP Base Award are conditional on the achievement of pre-determined targets set for a two-year performance period and a three-year performance period respectively. The final number of RSP Shares and PSP Shares to be awarded will be determined at the end of the performance period (“Final Award”). The Final Award varies depending on the level of achievement of the pre-determined targets. An achievement factor will be applied to the relevant Base Award to determine the final number of RSP Shares and PSP Shares (as the case may be) to be awarded. The achievement factor ranges from 0% to 150% for RSP and from 0% to 200% for PSP. At the end of the performance period, 50% of the RSP Shares will be released upon vesting and the balance will be released equally over the subsequent two years with fulfillment of service requirements. All PSP Shares will be released to the participants at the end of the three-year performance period upon vesting. Pre-determined targets are set by the Remuneration Committee at their absolute discretion for the performance conditions to be met over the performance period. For the RSP, the targets set are the achievement of Attributable Profit Before Fair Value Adjustment and Exceptional Items (APBE) and Return On Capital Employed (ROCE). For the PSP, the pre-set targets are based on Return on Invested Capital (ROIC), Total Shareholders’ Return Relative to Straits Times Index and Absolute Shareholders’ Return as a multiple of Cost of Equity. Senior management participants are required to hold a minimum number of the shares released to them under the RSP and PSP to maintain a beneficial ownership stake in the Company for the duration of their employment or tenure with the Company. No awards have been granted to controlling shareholders or their associates, or parent group employees under the RSP and PSP. No awards have been granted to directors of the Company. No employee has received 5% or more of the total number of shares available/delivered pursuant to grants under the RSP and PSP. 101 annual report2014 D I R E C T O R S ’ R E P O R T 5. SHARE OPTIONS AND SHARE PLANS (CONT’D) (c) Share Grants Under RSP and PSP (cont’d) (ii) It was disclosed in the Introductory Document dated 28 October 2013 that the Company may on or after the Listing Date, grant Replacement FCL Awards pursuant to the RSP and PSP to certain employees of our Group in replacement of awards previously granted to them pursuant to the Fraser and Neave, Limited Restricted Share Plan and the Fraser and Neave, Limited Performance Share Plan (the “Outstanding F&N Awards”). Replacement FCL Awards were granted on 3 October 2014 to replace the Outstanding F&N Awards previously granted to FCL Employees pursuant to the Fraser and Neave, Limited Share Plans. The first grant of RSP and PSP for the FY 2014 was also made on 3 October 2014. RSP Shares Conversion / Grant Date Balance as at Conversion or Grant Date Replacement FCL Awards* 2014 (Year 1) Award 3 October 2014 3 October 2014 7,100,182 4,052,698 11,152,880 * The Replacement FCL Awards were granted to replace the 1,844,401 Outstanding F&N Awards. PSP Shares Conversion / Grant Date Balance as at Conversion or Grant Date Replacement FCL Awards** 2014 (Year 1) Award 3 October 2014 3 October 2014 1,200,527 667,839 1,868,366 ** The Replacement FCL Awards were granted to replace the 370,246 Outstanding F&N Awards. 6. AUDIT COMMITTEE At a series of meetings convened during the twelve months up to the date of this report, the Audit Committee reviewed reports prepared respectively by the external and the internal auditors and approved proposals for improvement in internal controls. The announcement of quarterly results and the financial statements of the Company and of the Group and the audit report thereon for the full year were also reviewed prior to consideration and approval of the Board. The Audit Committee has nominated Ernst & Young LLP for re-appointment by shareholders as auditor for the ensuing financial year. 102 Frasers centrepoint limited & subsidiaries D I R E C T O R S ’ R E P O R T 7. AUDITOR Ernst & Young LLP, have expressed their willingness to accept re-appointment as auditor and a resolution proposing their appointment will be submitted at the Annual General Meeting. On behalf of the Board Charles Mak Ming Ying Director Singapore 12 November 2014 Sithichai Chaikriangkrai Director 103 annual report2014S T A T E M E N T B Y D I R E C T O R S We, Charles Mak Ming Ying and Sithichai Chaikriangkrai, being two of the Directors of FRASERS CENTREPOINT LIMITED, do hereby state that in the opinion of the Directors: (i) the balance sheets, consolidated profit statement, consolidated statement of comprehensive income, statements of changes in equity, and consolidated cash flow statement together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 30 September 2014 and of the results of the business, changes in equity and cash flow of the Group and the changes in equity of the Company for the year ended 30 September 2014; and (ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. On behalf of the Board Charles Mak Ming Ying Director Singapore 12 November 2014 Sithichai Chaikriangkrai Director 104 Frasers centrepoint limited & subsidiariesI N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S O F F R A S E R S C E N T R E P O I N T L I M I T E D REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS We have audited the accompanying consolidated financial statements of Frasers Centrepoint Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the balance sheets of the Group and the Company as at 30 September 2014, the statements of changes in equity of the Group and the Company and the consolidated profit statement, consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information. MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risk of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated financial statements that give a true and fair view 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPINION In our opinion, the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and the Company as at 30 September 2014 and the results, changes in equity and cash flow of the Group and the changes in equity of the Company for the year ended on that date. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. ERNST & YOUNG LLP Public Accountants and Chartered Accountants Singapore 12 November 2014 105 annual report2014C O N S O L I D A T E D P R O F I T S T A T E M E N T F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 REVENUE Cost of sales GROSS PROFIT Other income/(losses) Other items of expenses Operating costs Marketing costs Administrative costs TOTAL COSTS AND EXPENSES Note 3 4 5 Group 2014 $'000 2013 $'000 2,734,911 (1,704,708) 2,052,749 (1,241,094) 1,030,203 (3,330) 811,655 (2,561) (195,880) (63,169) (131,296) (144,771) (60,599) (92,122) (390,345) (297,492) TRADING PROFIT Share of results of associates and equity – accounted entities Investment income 6 18(a) 7 636,528 52,532 302 511,602 59,536 – PROFIT BEFORE INTEREST, FAIR VALUE CHANGE, TAXATION AND EXCEPTIONAL ITEMS Interest income Interest expense NET INTEREST COST PROFIT BEFORE FAIR VALUE CHANGE, TAXATION AND EXCEPTIONAL ITEMS Fair value change on investment properties Share of associates’ fair value change on investment properties PROFIT BEFORE TAXATION AND EXCEPTIONAL ITEMS Exceptional items PROFIT BEFORE TAXATION Taxation PROFIT FOR THE YEAR ATTRIBUTABLE TO: Shareholders of the Company – before fair value change and exceptional items – fair value change – exceptional items Non-controlling interests PROFIT FOR THE YEAR EARNINGS PER SHARE The accompanying Notes form an integral part of the Financial Statements. 106 689,362 571,138 31,645 (42,950) 18,459 (79,428) (11,305) (60,969) 678,057 80,362 58,128 816,547 (119,787) 510,169 165,883 109,860 785,912 46,409 696,760 (155,513) 832,321 (96,583) 541,247 735,738 500,995 126,177 (126,461) 500,711 40,536 541,247 20.4¢ 401,080 275,682 45,541 722,303 13,435 735,738 95.9¢ 8 9 14 18(a) 10 11 12 Frasers centrepoint limited & subsidiariesC O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME, NET OF TAX Items that may be reclassified subsequently to profit statement: Fair value change of cash flow hedges Fair value change of available-for-sale financial assets Foreign currency translation reserve: – exchange difference on consolidation Share of other comprehensive income of associates and equity – accounted entities Other comprehensive income for the year, net of tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME FOR THE YEAR Group 2014 $'000 2013 $'000 541,247 735,738 3,423 – 5,517 (34,900) (81,286) (17,126) (3,468) (15,049) (81,331) (61,558) 459,916 674,180 421,582 38,334 668,859 5,321 459,916 674,180 The accompanying Notes form an integral part of the Financial Statements. 107 annual report2014B A L A N C E S H E E T S A S A T 3 0 S E P T E M B E R 2 0 1 4 NON-CURRENT ASSETS Investment properties Property, plant and equipment Investments in: – subsidiaries – joint ventures – associates and equity – accounted entities Financial assets Intangible assets Other long-term assets Prepayments Other receivables Deferred tax assets Derivative financial instruments CURRENT ASSETS Prepaid land and development costs Other prepayments Inventory Trade and other receivables Properties held for sale Derivative financial instruments Cash and cash equivalents TOTAL ASSETS CURRENT LIABILITIES Derivative financial instruments Trade and other payables Provision for taxation Loans and borrowings NET CURRENT ASSETS NON-CURRENT LIABILITIES Deferred tax liabilities Derivative financial instruments Other payables Loans and borrowings NET ASSETS SHARE CAPITAL AND RESERVES Share capital Retained earnings Other reserves Equity attributable to Owners of the Company NON-CONTROLLING INTERESTS – PERPETUAL SECURITIES NON-CONTROLLING INTERESTS – OTHERS TOTAL EQUITY Group 2014 $'000 2013 $'000 Note 14 15 6,822,331 279,300 3,115,234 31,599 16 17 18 19 20(a) 20(b) 21 22 23 25 21 21 22 24 25 26 25 27 28 23 25 27 28 29 30 32 – – 1,499,055 2,164 510,450 148,432 10,141 245,565 111,983 2,080 9,631,501 480,244 31,292 4,195 751,537 5,079,495 29,623 883,604 7,259,990 16,891,491 7,358 1,620,392 181,365 1,493,767 3,302,882 3,957,108 13,588,609 174,063 7,979 196,184 6,122,608 6,500,834 7,087,775 1,753,977 4,565,577 115,995 6,435,549 597,654 7,033,203 54,572 7,087,775 – – 1,055,983 2,164 64,478 43,200 – 168,104 2,937 – 4,483,699 398,033 11,901 3,578 302,763 4,737,053 1,478 506,784 5,961,590 10,445,289 3,232 1,725,158 112,674 629,135 2,470,199 3,491,391 7,975,090 117,928 3,059 1,200,444 1,175,373 2,496,804 5,478,286 1,083,977 4,363,384 3,725 5,451,086 – 5,451,086 27,200 5,478,286 Company 2014 $'000 1,600 – 1,609,043 500 – 2,148 – – – 2,522,213 – – 4,135,504 – 22 – 721,626 – 254 86,537 808,439 4,943,943 6,098 132,542 10,114 – 148,754 659,685 4,795,189 – 227 634,291 – 634,518 4,160,671 1,753,977 2,212,590 194,104 4,160,671 – 4,160,671 – 4,160,671 2013 $'000 1,650 1 1,556,627 500 – 2,148 – – – 1,710,382 – – 3,271,308 – 49 – 562,097 – 1,478 28,426 592,050 3,863,358 2,163 538,776 11,767 – 552,706 39,344 3,310,652 – 698 725,478 – 726,176 2,584,476 1,083,977 1,499,588 911 2,584,476 – 2,584,476 – 2,584,476 The accompanying Notes form an integral part of the Financial Statements. 108 Frasers centrepoint limited & subsidiariesS T A T E M E N T S O F C H A N G E S I N E Q U I T Y F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 Attributable to Owners of the Company Share Capital (Note 29) $'000 Retained Earnings $'000 Other Reserves (Note 30) $'000 Equity Attributable to Owners of the Company, Total $'000 Non- Controlling Interest – Perpetual Securities (Note 32) $'000 Non- Controlling Interests – Others $'000 Total $'000 Total Equity $'000 1,083,977 – 4,363,384 500,711 3,725 – 5,451,086 500,711 – 5,451,086 500,711 – 27,200 5,478,286 541,247 40,536 – – – – – – – – – 3,242 (78,903) 3,242 (78,903) (3,468) (3,468) (79,129) (79,129) 500,711 (79,129) 421,582 – – – – – 3,242 (78,903) 181 (2,383) 3,423 (81,286) (3,468) – (3,468) (79,129) (2,202) (81,331) 421,582 38,334 459,916 Group 2014 Opening balance at 1 October 2013 Profit for the year Other comprehensive income Net fair value change of cash flow hedges Foreign currency translation Share of other comprehensive income of associates Other comprehensive income for the year Total comprehensive income for the year Contributions by and distributions to owners Ordinary shares issued during the year 1,000,000 – – 1,000,000 – 1,000,000 – 1,000,000 Preference shares redeemed during the year Employee share-based expense Dividend paid (Note 33) Dividend proposed (Note 33) Total contributions by and distributions to owners Changes in ownership interests in subsidiaries and associates Redemption of non-controlling interest's preference shares Shares issued to non-controlling interest Total changes in ownership interests in subsidiaries and associates Total transactions with owners in their capacity as owners Contributions by and distributions to perpetual securities holders Issue of perpetual securities Total contributions by and distributions to perpetual securities holders Closing balance at 30 September 2014 (330,000) – – – – – (119,350) (179,168) – 12,231 – 179,168 (330,000) 12,231 (119,350) – 670,000 (298,518) 191,399 562,881 – – – – – – – – – – – – 670,000 (298,518) 191,399 562,881 – – – – – – – – – (330,000) 12,231 (119,350) – – – (5,707) – (330,000) 12,231 (125,057) – 562,881 (5,707) 557,174 – – – (5,455) (5,455) 200 200 (5,255) (5,255) 562,881 (10,962) 551,919 – – – – – – – – 597,654 597,654 597,654 597,654 – – 597,654 597,654 1,753,977 4,565,577 115,995 6,435,549 597,654 7,033,203 54,572 7,087,775 The accompanying Notes form an integral part of the Financial Statements. 109 annual report2014S T A T E M E N T S O F C H A N G E S I N E Q U I T Y F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 ( C O N T ’ D ) Attributable to Owners of the Company Share Capital (Note 29) $'000 Retained Earnings $'000 Other Reserves (Note 30) $'000 Equity Attributable to Owners of the Company, Total $'000 Non- Controlling Interests $'000 Total Equity $'000 Group 2013 Opening balance at 1 October 2012 Profit for the year 1,083,977 – 3,791,081 722,303 57,169 – 4,932,227 722,303 23,442 13,435 4,955,669 735,738 Other comprehensive income Net fair value change of cash flow hedges Foreign currency translation Realisation upon disposal of available-for-sale financial assets Share of other comprehensive income of associates Other comprehensive income for the year Total comprehensive income for the year Contributions by and distributions to owners Dividends paid (Note 33) Total contributions by and distributions to owners Changes in ownership interests in subsidiaries and associates Shares issued to non-controlling interests Redemption of non-controlling interest's preference shares Total changes in ownership interests in subsidiaries and associates Total transactions with owners in their capacity as owners – – – – – – – – – – – – – – – 5,278 (8,773) 5,278 (8,773) 239 (8,353) 5,517 (17,126) (34,900) (34,900) – (34,900) – – 722,303 (15,049) (53,444) (53,444) (15,049) (53,444) 668,859 – (8,114) 5,321 (15,049) (61,558) 674,180 (150,000) (150,000) – – – (150,000) – – – – – – (150,000) (1,268) (151,268) (150,000) (1,268) (151,268) – – – 300 (595) (295) 300 (595) (295) (150,000) (1,563) (151,563) Closing balance at 30 September 2013 1,083,977 4,363,384 3,725 5,451,086 27,200 5,478,286 The accompanying Notes form an integral part of the Financial Statements. 110 Frasers centrepoint limited & subsidiaries S T A T E M E N T S O F C H A N G E S I N E Q U I T Y F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 ( C O N T ’ D ) Share Capital (Note 29) $'000 Retaining Earnings $'000 Other Reserves, Total $'000 Hedging Reserve $'000 Share-based Compensation Reserve $'000 Dividend Reserve $'000 Total Equity $'000 Company 2014 Opening balance at 1 October 2013 Profit for the year 1,083,977 1,499,588 – 1,011,520 911 – 911 – Other comprehensive income Net fair value change of cash flow hedges Other comprehensive income for the year Total comprehensive income for the year Contributions by and distributions to owners Employee share-based expenses Ordinary shares issued during the year Preference shares redeemed during the year Dividend paid (Note 33) Dividend proposed (Note 33) Total transactions with owners in their capacity as owners Closing balance at 30 September 2014 – – – – 1,825 1,825 1,825 1,825 – 1,011,520 1,825 1,825 – – – – – – 2,584,476 – 1,011,520 – – 1,825 1,825 – 1,013,345 – 1,000,000 – – 12,200 – (330,000) – – – (119,350) (179,168) – – 179,168 670,000 (298,518) 191,368 – – – – – – 12,200 – – 12,200 – 1,000,000 – – – – – 179,168 (330,000) (119,350) – 12,200 179,168 562,850 1,753,977 2,212,590 194,104 2,736 12,200 179,168 4,160,671 The accompanying Notes form an integral part of the Financial Statements. 111 annual report2014 S T A T E M E N T S O F C H A N G E S I N E Q U I T Y F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 ( C O N T ’ D ) Share Capital (Note 29) $'000 Retained Earnings $'000 Other Reserves, Total $'000 Hedging Reserve $'000 Fair Value Adjustment Reserve $'000 Asset Revaluation Reserve $'000 Total Equity $'000 Company 2013 Opening balance at 1 October 2012 Profit for the year 1,083,977 – 430,818 211,656 1,038,293 – (3,721) – 34,900 – 1,007,114 – 2,553,088 211,656 Other comprehensive income Net fair value change of cash flow hedges Realisation upon disposal of available-for-sale financial assets Other comprehensive income for the year Total comprehensive income for the year Contributions by and distributions to owners Dividend paid (Note 33) Transfer of reserves* Total transactions with owners in their capacity as owners Closing balance at 30 September 2013 – – – – – – – – – – 4,632 4,632 – (34,900) – (34,900) (30,268) 4,632 (34,900) 211,656 (30,268) 4,632 (34,900) – – – – 4,632 (34,900) (30,268) 181,388 – (150,000) 1,007,114 (1,007,114) 857,114 (1,007,114) – – – 1,083,977 1,499,588 911 911 – – – – – (1,007,114) (150,000) – (1,007,114) (150,000) – 2,584,476 * The transfer from Asset Revaluation Reserve to Retained Earnings relates to the revaluation reserve on investments. The accompanying Notes form an integral part of the Financial Statements. 112 Frasers centrepoint limited & subsidiariesC O N S O L I D A T E D C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation and exceptional items Adjustments for: Development profit Write-down to net realisable value of properties held for sale Fair value change on investment properties Share of associates' fair value change on investment properties Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment Amortisation of intangible assets Employee share-based expense Share of results of associates and equity – accounted entities Mark-to-market (losses)/gains on derivatives Write-back of provision for impairment of an associate Interest expense Interest income Exchange difference Operating cash flow before working capital changes Progress payments received from sale of residential units Development expenditure – properties held for sale Payment of land premium Change in prepaid project costs Change in rental deposits Change in inventory Change in trade and other receivables Change in trade and other payables Change in joint ventures and associates' balances Change in related companies' balances Cash generated from/(used in) operations Interest expense paid Interest income received Income taxes paid Group 2014 $'000 2013 $'000 Note 816,547 785,912 5 20(a) 5 7 9 8 (516,725) 4,199 (80,362) (58,128) 8,199 2,820 538 5,259 (52,532) (1,490) (177) 42,950 (31,645) 8,573 148,026 1,956,163 (925,183) (163,952) (281,652) (4,681) 1,212 (242,214) 316,226 (19,176) (658,358) 126,411 (31,092) 29,561 (77,755) (408,711) 8,452 (165,883) (109,860) 7,655 625 498 5,384 (59,536) 3,922 – 79,428 (18,459) 24,925 154,352 1,282,779 (996,030) (256,054) (398,033) 632 597 (31,687) 65,864 6,585 6,521 (164,474) (78,485) 27,098 (87,017) Net cash generated from/(used in) operating activities 47,125 (302,878) The accompanying Notes form an integral part of the Financial Statements. 113 annual report2014C O N S O L I D A T E D C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 ( C O N T ’ D ) CASH FLOW FROM INVESTING ACTIVITIES Proceeds from disposal of available-for-sale financial assets Proceeds from disposal of investment property Development expenditure – investment properties under construction Purchase of property, plant and equipment Payment of land premium for investment properties Additions of investment properties Purchase of intangible assets Cost incurred on acquisition of subsidiary Acquisition of subsidiaries, net of cash acquired Investment in associates Redemption of Series A CPPUs Repayment by/(loans to) associates Loans to joint ventures Dividend income from available-for-sale financial assets Dividend income from associates Net cash (used in)/generated from investing activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issue of new shares by subsidiary to non-controlling interests Redemption of non-controlling interest's preference shares Proceeds from bank loans drawn down Repayment of bank loans Repayment of long-term loans to a related company Write off of Part Consideration of the Loans Proceeds from issue of new shares Redemption of preference shares Proceeds from issue of perpetual securities Payment of dividends by a subsidiary to non-controlling interest Payment of dividends to shareholders Group 2014 $'000 2013 $'000 – 527,956 (24,250) (8,691) (698,083) (35,669) (162) (69,475) (3,140,349) (307,520) – 19,598 (3,927) 125 55,510 60,709 – (13,329) (5,364) – (83,784) (143) – – (34,114) 306,158 (71,688) – – 61,068 (3,684,937) 219,513 200 (5,455) 5,137,622 (1,022,546) (1,197,275) (41,776) 1,000,000 (330,000) 597,654 (5,707) (119,350) 300 (595) 591,924 (356,426) (697,045) – – – – – (151,268) Note 15 14 20(a) 16 7 27 27 29 29 32 33 33 Net cash generated from/(used in) financing activities 4,013,367 (613,110) Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Effects of exchange rate on opening cash 375,555 502,609 – (696,475) 1,202,222 (3,138) Cash and cash equivalents at end of year 26 878,164 502,609 The accompanying Notes form an integral part of the Financial Statements. 114 Frasers centrepoint limited & subsidiariesC O N S O L I D A T E D C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D 3 0 S E P T E M B E R 2 0 1 4 ( C O N T ’ D ) Group 2014 $'000 2013 $'000 Analysis of Acquisitions of Subsidiaries Net assets acquired Investment properties Property, plant and equipment Investment in equity – accounted entities Intangible assets Properties held for sale Current assets Current liabilities Non-current liabilities Cash and cash equivalents Total identifiable net assets at fair value Net goodwill arising from acquisition Consideration paid in cash Cash and cash equivalents of subsidiaries acquired Cashflow on acquisition net of cash and cash equivalents acquired 2,837,769 264,248 115,827 23,569 1,616,052 217,870 (455,690) (1,915,616) 142,292 2,846,321 436,320 3,282,641 (142,292) 3,140,349 The accompanying Notes form an integral part of the Financial Statements. – – – – – – – – – – – – – – 115 annual report2014These notes form an integral part of the financial statements: 1. CORPO RATE INFO RM AT IO N Frasers Centrepoint Limited (the “Company”) is a limited liability company incorporated and domiciled in Singapore. On 9 January 2014, the Company commenced trading on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”) by way of introduction. TCC Assets Limited, incorporated in the British Virgin Islands, became the immediate and ultimate holding company. The registered office and principal place of business of the Company is located at 438 Alexandra Road, #21-00 Alexandra Point, Singapore 119958. The principal activity of the Company is investment holding. The principal activities of the significant subsidiaries, joint ventures and associates are set out in Note 43. Related companies in the financial statements refer to Frasers Centrepoint Limited group of companies and the entities related to the shareholders of TCC Assets Limited. 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES 2.1 Basis of Preparation The complete set of consolidated financial statements of the Company and its subsidiaries (collectively, the “Group”), are prepared in accordance with Singapore Financial Reporting Standards. The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are prepared on the historical cost basis except as disclosed in the accounting policies below. The financial statements are presented in Singapore Dollars (“$” or “S$”). All financial information presented in Singapore Dollars has been rounded to the nearest thousand, unless otherwise stated. The Group and the Company have applied the same accounting policies and methods of computation in the preparation of the financial statements for the current financial year and are consistent with those used in the previous financial year, except as disclosed below. (a) Adoption of New and Revised Standards In the current year, the Group has adopted the following standards that are relevant and effective for financial years beginning on or after 1 October 2013: Amendments to FRS 1 Revised FRS 19 FRS 113 Amendments to FRS 107 Improvements to FRSs 2012: – Amendments to FRS 1 – Amendments to FRS 16 – Amendments to FRS 32 Presentation of Items of Other Comprehensive Income Employee Benefits Fair Value Measurement Disclosures – Offsetting Financial Assets and Financial Liabilities Presentation of Financial Statements Property, Plant and Equipment Financial Instruments : Presentation 116 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.1 Basis of Preparation (cont’d) (a) Adoption of New and Revised Standards (cont’d) The adoption of the above standards did not result in any substantial change to the Group’s accounting policies nor any significant impact on the financial statements, except for the following: (i) Amendments to FRS 1 Presentation of Items of Other Comprehensive Income The Amendments to FRS 1 change the grouping of items presented in other comprehensive income. Items that could be reclassified to profit statement at a future point in time would be presented separately from items which will never be reclassified. As the amendments only affect the presentations of items that are already recognised in other comprehensive income, there is no impact on the Group’s financial position and financial performance upon adoption of these amendments. (ii) FRS 113 Fair Value Measurement FRS 113 provides a single source of guidance for all fair value measurements. FRS 113 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under FRS when fair value is required or permitted by FRS. The Group has applied the new fair value measurement guidance prospectively. The change had no significant impact on the measurements of the Group’s assets and liabilities. The additional disclosures as a result of the adoption of this standard have been included in Note 37. 2.2 Significant Accounting Judgements and Estimates The preparation of the Group’s consolidated financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities at the balance sheet date. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities and which are not readily apparent from other sources. Estimates and underlying assumptions are revised on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. (a) Key Sources of Estimation Uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (i) Revenue Recognition and Estimation of Total Development Costs For Singapore property development projects under progressive payment scheme, the Group recognises revenue and cost of sales from partly completed development properties held for sale based on the percentage of completion method. The stage of completion is measured in accordance with the accounting policy stated in Note 2.9. Estimates are required in determining the total estimated development costs which will affect the stage of completion. In making these assumptions, the Group relies on references to information such as current offers and/or recent contracts with contractors and suppliers, estimation of construction and material costs based on historical experience, and the work of professional surveyors and architects. Revenue from partly completed development properties held for sale is as disclosed in Note 3. 117 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.2 Significant Accounting Judgements and Estimates (cont’d) (a) Key Sources of Estimation Uncertainty (cont’d) (ii) Valuation of Completed Investment Properties The Group’s completed investment properties are stated at their estimated market values, which are determined annually. The fair values are based on independent professional valuations conducted annually except for certain overseas properties whereby valuations are performed internally every year and at least once every two years, independent professional valuations are obtained for cross-checking purposes. The fair value of completed investment properties is determined using a combination of the Direct Comparison Method, Income Approach and Discounted Cash Flow Analysis. These estimated market values may differ from the prices at which the Group’s completed investment properties could be sold at a particular time, since actual selling prices are negotiated between willing buyers and sellers. Also, certain estimates require an assessment of factors not within the directors’ control, such as overall market conditions. As a result, actual results of operations and realisation of these completed investment properties could differ from the estimates set forth in these financial statements, and the difference could be significant. The carrying amount of completed investment properties is as disclosed in the Group’s balance sheet. The Group’s valuation policies and procedures are disclosed in Note 37(d). (iii) Revaluation of Investment Property under Construction (“IPUC”) IPUC is measured at fair value if it can be reliably determined. If fair value cannot be reliably determined, then IPUC is recorded at cost. The fair value of IPUC is determined using a combination of market comparison and discounted cash flow analysis and investment comparable sales and residual land value methods which considers the significant risks which are relevant to the development process, including but not limited to construction and letting risks. The Group’s valuation policies and procedures are disclosed in Note 37(d). (iv) Net Realisable Value of Properties Held for Sale Properties held for sale are carried at lower of cost and net realisable value. A write down to net realisable value is made for properties held for sale when the net realisable value has fallen below cost. In arriving at estimates of net realisable values, management considers factors such as current market conditions, recent selling prices of the development properties and comparable development properties less the estimated costs of completion and the estimated costs necessary to make the sale. The carrying amounts of properties held for sale is as disclosed in the Group’s balance sheet. 118 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.2 Significant Accounting Judgements and Estimates (cont’d) (a) Key Sources of Estimation Uncertainty (cont’d) (v) Impairment of Intangible Assets – Management Contracts, Goodwill and Brand Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles, such as management contracts and brand with indefinite useful lives recognised by the Group. The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in Note 20(a). In particular, the valuations of the brand and goodwill arising from business combinations during the current year as disclosed in Note 16(b) and Note 20(a) have been provisionally determined as at 30 September 2014, and as there are no indicators of impairment as at the reporting date, no impairment testing is applicable for the current year. (b) Critical Judgements made in Applying Accounting Policies In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have significant effects on the amounts recognised in the consolidated financial statements. (i) Income Taxes The Group has exposure to income taxes in numerous jurisdictions. Significant assumptions are required in determining the group-wide provision for income taxes. The ultimate tax determination of taxability of income and deductibility of expenses from certain transactions are uncertain during the ordinary course of business. The tax computations of newly created tax consolidated groups arising from business combinations would also be subject to uncertainty and final assessment by tax authorities. The Group recognises the liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amounts of provision for taxation, deferred tax assets and liabilities are as disclosed in the Group’s balance sheet. The tax computation of newly created tax consolidated groups arising from business combinations would also be subject to uncertainty and formal assessment by tax authorities. 119 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.2 Significant Accounting Judgements and Estimates (cont’d) (b) Critical Judgements made in Applying Accounting Policies (cont’d) (ii) Land Appreciation Tax Under the Provisional Regulations on land appreciation tax (“LAT”) implemented upon the issuance of the Provisional Regulations of the People’s Republic of China (the “PRC”) on 27 January 1995, all gains arising from the transfer of real estate property in China effective from 1 January 1994 are subject to LAT at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of properties less deductible expenditure including amortisation of land use rights, borrowing costs and all property development expenditure. The subsidiaries of the Group engaging in property development business in China are subject to land appreciation tax. However, the implementation of this tax varies amongst China cities and the Group has not finalised its land appreciation tax returns with various tax authorities. Accordingly, significant judgement is required in determining the amount of land appreciation and related taxes. The ultimate tax determination is uncertain during the ordinary course of business. The Group recognises these liabilities based on management’s best estimates. When the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the provisions for land appreciation tax in the period in which such determination is made. (iii) Operating Lease Commitments – Group as Lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases, except for freehold properties with 75 years lease carved out or 99 years lease carved out which have been treated as finance leases. (iv) Classification of Property In determining whether a property used as service apartments is classified as investment property or fixed assets, the Group analyses whether the quantum of other income derived from ancillary services rendered in the serviced apartments is significant as compared to room revenue and total revenue. Based on the analysis for the years presented, the Group has determined that revenue from ancillary services is not significant. (v) Business Combinations The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each 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 (e.g. maintenance, cleaning, security, bookkeeping, hotel services, etc). For example, the Group assessed the acquisition of the subsidiaries as disclosed in Note 16(b) as purchases of businesses because of the strategic management function and associate processes purchased along with the investment and development properties. When the acquisition of subsidiaries 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. 120 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.3 Functional Currency Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to the entity (the “functional currency”). The consolidated financial statements and financial statements of the Company are presented in Singapore dollars, the functional currency of the Company. 2.4 Basis of Consolidation and Business Combinations (a) Basis of Consolidation The financial year of the Company and all its subsidiaries ends on 30 September unless otherwise stated. The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to 30 September. The financial statements of subsidiaries are prepared using consistent accounting policies. Adjustments are made to any dissimilar material accounting policies to conform to the Group’s significant accounting policies. A list of the Company’s significant subsidiaries is shown in Note 43. The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra- group transactions and dividends are eliminated in full. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group losses control over a subsidiary, it: – – – – – – – De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when control is lost; De-recognises the carrying amount of any non-controlling interest; De-recognises the cumulative translation differences recorded in equity; Recognises the fair value of the consideration received; Recognises the fair value of any investment retained; Recognises any surplus or deficit in profit statement; Re-classifies the Group’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate. 121 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.4 Basis of Consolidation and Business Combinations (cont’d) (b) Business Combinations Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration, which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in the profit statement or as changes to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity. In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in the profit statement. The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any), that are present ownership interests and entitle their holders to a proportionate share of net assets in the event of liquidation, is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Other components of non-controlling interests are measured on their acquisition date at fair value, unless another measurement basis is required by another FRS. Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out below. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in the profit statement on the acquisition date. Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company and are presented separately in the consolidated profit statement and consolidated statement of comprehensive income, and within equity in the consolidated balance sheet, separately from the equity attributable to owners of the Company. Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributable to owners of the Company. 122 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.4 Basis of Consolidation and Business Combinations (cont’d) (c) 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. The basis of the judgement is set out in Note 2.2(b)(v). Where such acquisitions are not judged to be an acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity is allocated between the identifiable assets and liabilities of the entity based on their relative fair values at the acquisition date. Accordingly, no goodwill or additional deferred taxation arises. Otherwise, acquisitions are accounted for as business combinations. 2.5 Investment in Subsidiaries Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. The Group generally has such power when it directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors. In the Company’s balance sheet, investment in subsidiaries is accounted for at cost less any impairment losses. 2.6 Joint Ventures A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. The Group recognises its interest in the joint venture using the proportionate consolidation method. The Group combines its proportionate share of each of the assets, liabilities, income and expenses of the joint venture with the similar items, line by line, in its consolidated financial statements. The joint venture is proportionately consolidated from the date the Group obtains joint control until the date the Group ceases to have joint control over the joint venture. Adjustments are made in the Group’s consolidated financial statements to eliminate the Group’s share of intragroup balances, income and expenses and unrealised gains and losses on such transactions between the Group and its jointly controlled entity. Losses on transactions are recognised immediately if the loss provides evidence of a reduction in the net realisable value of current assets or an impairment loss. The financial statements of the joint venture are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Upon loss of joint control, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the former jointly controlled entity upon loss of joint control and the aggregate of the fair value of the retained investment and proceeds from disposal is recognised in profit statement. In the Company’s separate financial statements, interests in joint ventures are carried at cost less impairment losses. A list of the joint ventures is shown in Note 43. 123 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.7 Associates Associates are entities (not being subsidiaries or joint ventures) in which the Group has significant influence. Associates are equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associates. The Group’s investments in associates are accounted for in the consolidated financial statements using the equity method. Under the equity method, the investment in associates is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is included as income in the determination of the Group’s share of results of the associate in the period in which the investment is acquired. The profit statement reflects the share of the results of operations of the associates. Where there has been a change recognised in other comprehensive income by the associates, the Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and the associates are eliminated to the extent of the interest in the associates. The Group’s share of the profit or loss of its associates is the profit attributable to equity holders of the associate and, therefore is the profit or loss after tax and non-controlling interests in the subsidiaries of associates. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit statement. The most recently available audited financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is arrived from the last audited financial statements available and unaudited management financial statements to the end of the accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances. Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in profit statement. In the Company’s separate financial statements, interests in associates are carried at cost less impairment losses. A list of the associates is shown in Note 43. 124 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 20142. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.8 Investment Properties (a) Completed Investment Properties Completed investment properties are held either to earn rental income or for capital appreciation or both and are treated as non-current assets. Completed investment properties are initially recorded at cost, including transaction costs. Subsequent to recognition, completed investment properties are measured at fair value and gains or losses arising from changes in the fair value of completed investment properties are included in the profit statement in the year in which they arise. Completed investment properties are derecognised when either they have been disposed of or when the completed investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of a completed investment property are recognised in the profit statement in the year of retirement or disposal. Transfers are made to or from completed investment properties only when there is a change in use. For a transfer from completed investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner- occupied property to completed investment property, the property is accounted for in accordance with the accounting policy for fixed assets up to the date of change in use. Rental and related income from completed investment properties are 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. (b) Investment Properties under Construction (“IPUC”) IPUC are initially stated at cost which includes cost of land and construction, related overhead expenditure and financing charges incurred during the period of construction and up to the completion of construction. IPUC are subsequently measured at fair value annually and on completion, with changes in fair values being recognised in the profit statement when fair value can be measured reliably. IPUC are considered completed and are transferred to investment properties when they are ready for their intended use and a Temporary Occupation Permit from the authorities have been obtained. When assessing whether the fair value of IPUC can be determined reliably, the Group considers, among other things: 1. 2. 3. 4. whether the asset is being constructed in a developed liquid market; whether a construction contract with the contractor has been signed; whether the required building and letting permits are obtained; and what percentage of rentable area has been pre-leased to tenants. IPUC for which fair value cannot be determined reliably is measured at cost less impairment. 125 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.8 Investment Properties (cont’d) (b) Investment Properties under Construction (“IPUC”) (cont’d) The fair values of Singapore’s IPUC are determined annually based on the opinion of a qualified independent valuer and valuations are performed using methods as deemed appropriate by the valuer. The fair values of overseas’ IPUC are determined at least once every two years based on the opinion of a qualified independent valuer or internal valuer and valuations are performed using methods as deemed appropriate by the valuer. Each IPUC is individually assessed. Valuations are adopted by directors. The estimated value of future assets is based on the expected future income from the project, using risk adjusted yields that are higher than the current yields of similar completed property. The remaining expected costs of completion plus margin are deducted from the estimated future assets value. 2.9 Properties Held for Sale (a) Development Properties Held for Sale Development properties held for sale are properties acquired or being constructed for sale in the ordinary course of business, rather than to be held for the Company’s own use, rental or capital appreciation. Development properties held for sale are held as inventories and are measured at the lower of cost and net realisable value. The costs of development properties held for sale include: – – – Freehold and leasehold rights for land; Amounts paid to contractors for construction; and Borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, construction overheads and other related costs. Non-refundable commissions paid to sales or marketing agents on the sale of real estate units are expensed when incurred. Net realisable value of development properties held for sale is the estimated selling price in the ordinary course of the business, based on market prices at the end of the reporting period and discounted for the time value of money if material, less the estimated costs of completion and the estimated costs necessary to make the sale. Development properties held for sale are stated at cost plus attributable profits less progress billings if their revenue is recognised based on percentage of completion method (see accounting policy for revenue recognition below). Progress billings not yet paid by customers are included within “trade and other receivables”. Development properties held for sale are stated at cost if their revenue is recognised upon completion. Payments received from purchasers prior to completion are included in “trade and other payables” as “progress billings received in advance”. 126 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.9 Properties Held for Sale (cont’d) (a) Development Properties Held for Sale (cont’d) The costs of development properties recognised in profit statement on disposal are determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold. Development properties held for sale are considered complete upon the issue of Temporary Occupation Permit. When completed, development properties held for sale are transferred to completed properties held for sale. (b) Completed Properties Held for Sale Completed properties held for sale are stated at the lower of cost and net realisable value. Cost includes cost of land and construction, related overhead expenditure, and financing charges and other net costs incurred during the period of development. A write down to net realisable value is made when it is anticipated that the net realisable value has fallen below cost. 2.10 Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repair are charged to the profit statement. When assets are sold or retired, their cost and accumulated depreciation are removed from the financial statements and any gain or loss resulting from their disposal is included in the profit statement. Property, plant and equipment are depreciated on the straight line method so as to write off the cost of the assets over their estimated useful lives. The principal annual rates of depreciation are as follows: Freehold land Buildings Equipment, furniture and fittings Motor vehicles Rate per annum Not depreciated 2% to 5% 10% to 20% 14.3% The useful lives and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment. 2.11 Financial Assets Financial assets within the scope of FRS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit and loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re- evaluates this designation at each financial year end. 127 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.11 Financial Assets (cont’d) Non-derivative financial assets with fixed or determinable payment that are not quoted in an active market are classified as loans and receivables. Such assets are initially recognised at fair value, plus directly attributable costs, and subsequently carried at amortised cost using the effective interest method. Gains and losses are recognised in the profit statement when the loans and receivables are derecognised or impaired, and through the amortisation process. Available-for-sale financial assets are those that are not classified in any of the other categories. After initial recognition, available-for-sale financial assets are measured at fair value, with any resultant gain or loss recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit statement. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit statement as a reclassification adjustment when the financial asset is derecognised. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. 2.12 Receivables Trade and other receivables, including amounts due from subsidiaries, associates, joint ventures, related companies and loans to related companies, are classified and accounted for as loans and receivables under FRS 39. The accounting policy is stated in Note 2.11. An allowance is made for uncollectible amounts when there is objective evidence that the Group will not be able to collect the debt. Bad debts are written off when identified. Further details of accounting policy for impairment of financial assets are stated in Note 2.16. 2.13 Cash and Cash Equivalents Cash on hand and in banks and fixed deposits which are held to maturity are classified and accounted for as loans and receivables under FRS 39. The accounting policy is stated in Note 2.11. For the purpose of cash flow statement, cash and cash equivalents consist of cash on hand and deposits in banks, net of outstanding bank overdrafts. 2.14 Financial Liabilities Financial liabilities within the scope of FRS 39 are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. Financial liabilities are recognised initially at fair value plus directly attributable transaction costs. Subsequent to initial recognition, financial liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the profit statement when the liabilities are derecognised, and through the amortisation process. 128 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.15 Provisions Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 2.16 Impairment (a) Impairment of Non-Financial Assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflow that are largely independent of those from other assets or groups of assets. Impairment losses of continuing operations are recognised in profit statement, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Reversal of an impairment loss is recognised in the profit statement unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. The Group does not reverse in a subsequent period, any impairment loss recognised for goodwill. 129 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.16 Impairment (cont’d) (b) Impairment of Financial Assets The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired. (i) Assets Carried at Amortised Cost For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss on loans and receivables or held-to- maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flow discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance. The amount of the loss is recognised in the profit statement. When the asset becomes uncollectible, the carrying amount of impaired financial asset is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset. To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the profit statement, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. (ii) Assets Carried at Cost If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flow discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods. 130 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.16 Impairment (cont’d) (b) Impairment of Financial Assets (cont’d) (iii) Available-for-sale Financial Assets In the case of equity investments classified as available-for-sale, objective evidence of impairment include (i) significant financial difficulty of the issuer or obligor, (ii) information about significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in equity instrument may not be recovered; and (iii) a significant or prolonged decline in the fair value of the investment below its costs. ‘Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the profit statement, is transferred from equity to the profit statement. Reversals in respect of equity instruments classified as available-for-sale are not recognised in the profit statement. Reversals of impairment losses on debt instruments are reversed through the profit statement, if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognised in the profit statement. 2.17 Income Taxes (a) Current Tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Current taxes are recognised in the profit statement except to the extent that the tax relates to items recognised outside the profit statement, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. (b) Deferred Tax Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except: – – Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. 131 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.17 Income Taxes (cont’d) (b) Deferred Tax (cont’d) Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised except: – – Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax relating to items recognised outside the profit statement is recognised outside the profit statement. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. (c) Sales Tax Revenue, expenses and assets are recognised net of the amount of sales tax except: – Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and – Receivables and payables that are stated with the amount of sales tax included. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. 132 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.18 Borrowing Costs Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditure and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 2.19 Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The following specific recognition criteria must also be met before revenue is recognised: (a) Properties Held for Sale Sale of Completed Property Revenue from completed properties is recognised when the risks and rewards of ownership have been transferred to the purchaser either through the transfer of legal title or equitable interest in the properties, which is normally on unconditional exchange of contracts. For conditional exchanges, sales are recognised only when all the significant conditions are satisfied. Sale of Property under Development The Group recognises revenue on property under development when the significant risks and rewards of ownership have been transferred to the purchasers. For residential development projects under progressive payment scheme in Singapore, whereby the legal terms in the sales contracts result in continuous transfer of work-in-progress to the purchasers, revenue is recognised based on the percentage of completion method. Under the percentage of completion method, profit is brought into profit statement only in respect of finalised sales contracts and to the extent that such profit relates to the progress of construction work. The progress of construction work is measured by the proportion of the construction and related costs incurred to date to the estimated total construction and related costs for each project. For executive condominium projects in Singapore, residential development projects under deferred payment scheme in Singapore and overseas development projects, revenue will be recognised upon the transfer of significant risks and rewards of ownership, which generally coincides with the time the development units are delivered to the purchasers. (b) Rental Income Refer to the policy on Investment Properties. (c) Hotel Income Revenue from hotel operations is recognised on an accrual basis, upon rendering of the relevant services. (d) Dividends Dividend income is recognised when the Group’s right to receive the payment is established. 133 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.19 Revenue Recognition (cont’d) (e) Interest Income Interest income is recognised using the effective interest method. (f) Management Fees Revenue is recognised on an accrual basis. 2.20 Intangible Assets Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit statement in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite useful lives is recognised in profit statement in the expense category consistent with the function of the intangible asset. Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit statement when the asset is derecognised. (a) Management Contracts Management contracts with finite useful lives are amortised on a straight line basis over an estimated useful life of 8 years. Management contracts with indefinite useful lives are not amortised. (b) Goodwill Goodwill acquired in a business combination is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is reviewed for impairment, at least annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. (c) Brands Brands with finite useful lives are amortised on a straight line basis over an estimated useful life of 10 years. 134 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.21 Foreign Currencies (a) Foreign Currency Transactions Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries at rates of exchange approximating those ruling at transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates ruling at the initial transaction dates. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. Exchange differences are dealt with in the profit statement. Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the profit statement except for exchange differences arising on monetary items that form part of the Company’s net investment in foreign subsidiaries, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity and recognised in the consolidated profit statement on disposal of the subsidiary. In the Company’s separate financial statements, such exchange differences are recognised in the profit statement. (b) Foreign Currency Translation The results and financial position of foreign operations are translated into Singapore dollars using the following procedures: – – Assets and liabilities for each balance sheet presented are translated at the closing rate ruling at that balance sheet date; and Income and expenses for each profit statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions. All resulting exchange differences are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount of exchange differences recognised in other comprehensive income relating to that foreign operation is recognised in the profit statement as a component of the gain or loss on disposal. 2.22 Employee Benefits (a) Defined Contribution Plan As required by law, the Group makes contributions to state pension schemes in accordance with local regulatory requirements. The pension contributions are recognised as compensation expense in the same period as the employment that gives rise to the contribution. (b) Employee Leave Entitlement Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for leave as a result of services rendered by employees up to the balance sheet date. 135 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.22 Employee Benefits (cont’d) (c) Share Plans For equity-settled share-based payment transactions, the fair value of the services received is recognised as an expense with a corresponding increase in equity over the vesting period during which the employees become unconditionally entitled to the equity instrument. The fair value of the services received is determined by reference to the fair value of the equity instrument granted at the grant date. At each reporting date, the number of equity instruments that are expected to be vested are estimated. The impact on the revision of original estimates is recognised as an expense and as a corresponding adjustment to equity over the remaining vesting period, unless the revision to original estimates is due to market conditions. No adjustment is made if the revision or actual outcome differs from the original estimate due to market conditions. For cash-settled share-based payment transactions, the fair value of the goods or services received is recognised as an expense with a corresponding increase in liability. The fair value of the services received is determined by reference to the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised for the period. The proceeds received from the exercise of the equity instruments, net of any directly attributable transaction costs, are credited to share capital when the equity instruments are exercised. 2.23 Derivative Financial Instruments The Group uses derivative financial instruments to hedge against risks associated with foreign currency and interest rate fluctuations. Foreign exchange forward contracts are used to hedge its risks associated primarily with foreign currency fluctuations. Interest rate swap contracts are used to hedge its risks associated with interest rate fluctuations. It is the Group’s policy not to trade in derivative financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The changes in fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the profit statement. The Group applies hedge accounting for certain hedging relationships, which qualifies for hedge accounting. For the purpose of hedge accounting, these hedges are classified as cash flow hedges. At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. Such hedges are expected to be highly effective in achieving offsetting changes in cash flow and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. Hedges which meet the strict criteria for hedge accounting are accounted for as follows: The effective portion of the gain or loss on the hedging instrument is recognised directly as other comprehensive income in hedging reserve, while any ineffective portion is recognised immediately in the profit statement. Amounts recognised as other comprehensive income are transferred to the profit statement when the hedged transaction affects the profit statement, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognised as other comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability. If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognised in equity are transferred to the profit statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in other comprehensive income remain in other comprehensive income until the forecast transaction or firm commitment occurs. 136 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.23 Derivative Financial Instruments (cont’d) The fair value of forward foreign currency contracts is calculated by reference to current forward foreign exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference to market values for similar instruments. 2.24 Derecognition of Financial Instruments (a) Financial Assets A financial asset is derecognised when the contractual rights to receive cash flow from the asset have expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that has been recognised in other comprehensive income is recognised in the profit statement. (b) Financial Liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or has expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit statement. 2.25 Financial Guarantee A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantees are recognised initially at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial guarantees are recognised as income in the profit statement over the period of the guarantee. If it is probable that the liability will be higher than the amount initially recognised less amortisation, the liability is recorded at the higher amount with the difference charged to the profit statement. 2.26 Leases The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. 137 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.26 Leases (cont’d) (a) As Lessee Finance leases which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit statement. Contingent rents, if any, are charged as expenses in the periods in which they are incurred. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. Operating lease payments are recognised as an expense in profit statement on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. (b) As Lessor Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is stated in Note 2.19. Contingent rents are recognised as revenue in the period in which they are earned. (c) Other Long-Term Assets For finance leases where the minimum lease payments have been fully received by the Group, the other long-term assets represents the unguaranteed residual value which is the portion of the residual value of the leased asset, the realisation of which by the lessor is not assured or is guaranteed solely by a party related to the lessor. Lessors shall initially recognise such assets in their balance sheets and present them as a receivable at an amount equal to the net investment in the lease. For subsequent measurement, the recognition of finance income shall be based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease. Estimated unguaranteed residual values used in computing the lessor’s gross investment in a lease are reviewed regularly. If there has been a reduction in the estimated unguaranteed residual value, the income allocation over the lease term is revised and any reduction in respect of amounts accrued is recognised immediately. 2.27 Exceptional Items Exceptional items are one-off items of income and expense of such size, nature or incidence that their disclosure is relevant to explain the performance of the Company and Group for the year arising from non- recurring and non-operating transactions. 2.28 Share Capital and Share Issuance Expenses Proceeds from issuance of ordinary shares and redeemable preference shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of such shares are deducted against share capital. 138 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 2. SUMMAR Y O F S IGNIF ICAN T AC C OUNTI NG POL ICI ES ( CO NT’D) 2.29 Related Parties A related party is defined as follows: (a) A person or a close member of that person’s family is related to the Group and the Company if that person: (i) Has control or joint control over the Company; (ii) Has significant influence over the Company; or (iii) Is a member of the key management personnel of the Group or Company or of a parent of the Company. (b) An entity is related to the Group and the Company if any of the following conditions applies: (i) (ii) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others); One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member); (iii) Both entities are joint ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company; (vi) The entity is controlled or jointly controlled by a person identified in (a); (vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). 2.30 Contingencies A contingent liability is: (a) (b) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group and the Company; or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognised on the balance sheet of the Group and the Company, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined. 139 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 3. REVENUE Properties held for sale – recognised on completed contract method – recognised on percentage of completion method Rent and related income Management fee income Hotel income Others 4. COST OF S ALES Properties held for sale 5. OTHER IN CO M E/ (LO SSE S) Fair value gain/(loss) on foreign currency forward contracts Foreign exchange (loss)/gain Loss on disposal of property, plant and equipment Others Group 2014 $'000 2013 $'000 1,527,052 694,381 2,221,433 769,310 872,043 1,641,353 371,490 67,732 60,757 13,499 2,734,911 334,983 64,926 – 11,487 2,052,749 Group 2014 $'000 2013 $'000 (1,704,708) (1,241,094) Group 2014 $'000 1,490 (2,208) (2,820) 208 (3,330) 2013 $'000 (3,922) 1,899 (625) 87 (2,561) 140 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 20146. TR ADI NG PRO F IT Trading profit is stated after crediting: Write-back of allowance for doubtful trade receivables Reversal of write-down to net realisable value of completed properties held for sale and charging: Write down to net realisable value of properties held for sale Allowance for doubtful trade receivables Depreciation of property, plant and equipment Amortisation of intangible assets Audit fees paid to: – auditors of the Company – other auditors Non-audit fees paid to: – auditors of the Company – other auditors Property tax Directors of the Company: – Fee – Remuneration of members of Board Committees – Remuneration – Provident Fund contribution – Employee share-based expense Resigned Directors of the Company: – Fee – Remuneration of members of Board Committees – Remuneration Key executive officers: – Remuneration – Provident Fund contribution – Employee share-based expense Staff costs Defined contribution plans Employee share-based expense Group 2014 $'000 2013 $'000 Note 22 1,932 2,041 – 137 22 15 20(a) 4,199 1,093 8,199 538 632 1,750 240 337 20,856 622 499 – – – 32 17 – 6,282 66 2,178 94,537 7,670 3,081 8,589 2,556 7,655 498 535 924 827 1,052 20,114 – – 3,066 19 1,587 – – 62 5,153 101 1,344 56,583 5,053 2,453 141 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014Note 18 Note 20(b) Group 2013 $'000 – – 2014 $'000 125 177 Group 2014 $'000 2013 $'000 8,443 7,143 13,509 29,095 – 400 2,150 – 31,645 3,880 6,382 6,666 16,928 290 800 – 441 18,459 Group 2014 $'000 2013 $'000 (23,887) (19,063) (42,950) – (42,950) (21,291) (57,439) (78,730) (698) (79,428) 7. IN VES T MEN T INCOM E Dividend income from available-for-sale financial assets Write-back of provision for impairment of an associate 8. IN TEREST INCOM E Interest income from loans and receivables – related companies – non-controlling interest – fixed deposits and bank balances Interest income from available-for-sale assets – quoted non-equity investments Interest income accretion from other long-term assets Interest rate swaps – unrealised – realised 9. IN TERES T EX PEN SE Interest expense – loans and borrowings – related companies Interest rate swaps – unrealised 142 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201410. EXCEPTIO NAL IT EMS Gain on disposal of investment properties to an associate Loss on redemption of quoted non-equity investments Write-back of over-provision of bank profit share Write off of Part Consideration of the Loans (Loss)/gain on dilution in an associate's interest Transaction costs on acquisition of subsidiaries Gain on disposal of financial assets Share of associates' exceptional items Note 14 27 27 16(b) 2014 $'000 14,729 – 3,114 (41,776) (637) (88,111) – (7,106) (119,787) Group 2013 $'000 – (622) 4,337 – 1,162 – 35,260 6,272 46,409 Current year’s share of associates’ exceptional items relates to share of an associate’s transaction costs arising from acquisition of investment properties. Prior year’s share of exceptional items relates to associates’ gain on disposal of investment properties. Included in exceptional items are audit fees paid to other auditors of $122,000 (2013: Nil), non-audit fees paid to auditors of the Company of $624,000 (2013: Nil) and non-audit fees paid to other auditors of $318,000 (2013: Nil). 11. TAXATI ON Based on profit for the year: Current taxation Withholding tax Deferred taxation Under/(over) provision in prior years: Current taxation Deferred taxation Group 2014 $'000 2013 $'000 75,412 6,985 61,732 144,129 1,509 9,875 11,384 155,513 57,996 3,941 38,582 100,519 (3,163) (773) (3,936) 96,583 143 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201411. TAXATI ON ( C ON T’D) A reconciliation of the statutory tax rate to the Group’s effective tax rate applicable to profit before taxation and non-controlling interests for the years ended 30 September is as follows: Singapore statutory rate Income not subject to tax Expenses not deductible for tax purposes Utilisation of previously unrecognised tax losses Under/(over) provision in prior years Deferred tax benefits on losses not recognised Effect of tax losses not recognised Effect of different tax rates of other countries Tax effect of fair value adjustments Withholding tax Transfer of losses under group relief Others Effective tax rate Group 2014 % 17.0 (2.5) 5.8 (3.0) 1.6 0.4 0.3 3.5 (2.9) 1.0 – 1.1 22.3 2013 % 17.0 (1.6) 1.4 (1.0) (0.5) 0.8 0.1 0.4 (5.6) 0.5 (0.2) 0.3 11.6 During the current year, in relation to Year of Assessment (“YA”) 2014, certain subsidiaries in Singapore have transferred losses of $7,956,000 (YA 2013: $72,706,000) to set off against the taxable income of other companies in the Group. In the profit statement for the year, no tax benefits were recognised on the tax losses utilised under the Singapore group relief system (FY 2013: $1,933,900). Tax benefits of $16,047,000 (2013: $14,694,000) arising from the utilisation of group relief have not been recognised as they are subject to compliance with the relevant tax legislation governing group relief and agreement of the Inland Revenue Authority of Singapore. In the United Kingdom, during the year the corporate tax rate was reduced from 23% to 21% effective from 1 April 2014. In FY 2013, the corporate tax rate was reduced from 24% to 23% effective from 1 April 2013. As at 30 September 2014, certain subsidiaries have unutilised tax losses of approximately $639,555,000 (2013: $253,389,000) and unabsorbed capital allowances of $9,537,000 (2013: Nil) available for set off against future taxable profits and taxable capital gains respectively of which deferred tax assets of $124,909,000 (2013: $1,950,000) have been recognised. Included in the unutilised tax losses as at 30 September 2014 are $435,595,000 arising from acquisition of Australand Property Group, which $104,910,000 deferred tax assets are recognised as part of the Purchase Price Allocation (“PPA”) as disclosed in Note 16(b). The use of these tax losses is subject to certain statutory requirements being met in the various legal jurisdiction. Tax losses amounting to $13,020,000 (2013: 13,231,000) can be carried forward for 5 years subsequent to the year of the loss, while the remaining tax losses have no expiry dates. 144 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201412. EARNI NG S PE R SH AR E Basic and diluted earnings per share is computed by dividing the Group’s attributable profit (net of preference dividends paid) by the weighted average number of ordinary shares in issue during the financial year. The following table reflects the profit and share data used in the computation of basic and diluted earnings per share for the year ended 30 September: Attributable profit to shareholders of the Company – before fair value change and exceptional items – after fair value change and exceptional items Group 2014 $'000 2013 $'000 500,995 500,711 401,080 722,303 No. of Shares '000 '000 Weighted average number of ordinary shares in issue 2,457,316 753,292 Basic and diluted earnings per share – before fair value change on investment properties and exceptional items – after fair value change on investment properties and exceptional items 20.4¢ 20.4¢ 53.2¢ 95.9¢ There are no potential dilutive ordinary shares in existence for the years presented. 13. SEGM ENT INFOR MAT ION The Group’s operating businesses are organised and managed separately according to the nature of activities. During the year, the Group acquired Australand Property Group (“Australand”) whose operating business include residential, commercial, industrial and retail development, and investment in income producing commercial and industrial properties, property trust management and property management. All of Australand’s operations are in Australia. As Australand is a significant business group, the Group manages it as a separate operating business segment on its own. With the inclusion of Australand, the Group’s operating business segments are namely investment properties, Real Estate Investment Trusts, development properties, serviced residences, Australand and corporate and others. Serviced residences comprise serviced apartments and related management consultancy services. The Group operates in six main geographical areas, namely, Singapore, Australia, Europe, China, Thailand and others. Geographical segment revenue is based on geographical location of the Group’s customers. Geographical segment assets is based on geographical location of the Group’s assets. Segment accounting policies are the same as the policies described in Note 2. Inter-segment sales are based on terms agreed between the related companies. 145 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 13. SEGM ENT INFOR MAT ION (C ON T ’D) Year ended 30 September 2014 The following table presents financial information regarding business segments: Business segment Investment Properties $'000 REIT $'000 Development Corporate Properties Hospitality Australand $'000 $'000 $'000 & Others Eliminations $'000 $'000 Group $'000 Revenue – external Revenue – inter-segment Revenue – intra-segment Total revenue Subsidiaries and joint ventures Associates and equity – accounted entities PBIT * Interest income Interest costs Profit before fair value change, taxation and exceptional items Fair value change on investment properties Share of associates’ fair value change on investment properties Profit before taxation and exceptional items Exceptional items Profit before taxation Taxation Profit for the year Non-current assets Current assets Investments in associates and equity – accounted entities Tax assets Bank deposits and cash balances Total assets Liabilities Loans and borrowings Tax liabilities Total liabilities Other segment information Additions to non-current assets Additions to intangible assets Depreciation Write down to net realisable value of properties held for sale Exceptional items 146 134,142 3,985 – 138,127 68,384 – – – – – 2,235,682 – – 2,235,682 267,898 – 9,531 277,429 47,110 – – 47,110 50,079 35,524 19,694 105,297 – 2,734,911 – (39,509) (29,225) – (68,734) 2,734,911 494,547 67,782 5,599 518 – 54,389 (3,792) – 803 1,132 68,384 54,389 490,755 67,782 6,402 1,650 63,315 – – 56,249 – – 17,047 – – – – 1,879 – – – – – 636,830 52,532 689,362 31,645 (42,950) 678,057 80,362 58,128 816,547 (119,787) 696,760 (155,513) 541,247 3,225,273 14,696 – – 13,527 1,225,443 3,292,323 278,546 1,705,422 4,343,867 232,023 65,729 – 7,988,589 – 6,408,260 – 1,245,261 136,832 – 112,081 4,881 76,319 – 1,027,830 181,243 352,269 194,252 744,001 – 116 – – – 102 21,623 7,929 2,532 – 85 – 6,743 446,348 487 162 778 – – – (7,744) 4,199 3,114 – (1,787) – (53,606) – (59,764) – 1,499,055 111,983 883,604 16,891,491 – 1,831,913 7,616,375 355,428 9,803,716 – – – – – 776,187 446,510 8,209 4,199 (119,787) Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 13. SEGM ENT INFOR MAT ION (C ON T ’D) Year ended 30 September 2014 (cont’d) Business segment Investment Properties $'000 REIT $'000 Development Corporate Properties Hospitality Australand $'000 $'000 $'000 & Others Eliminations $'000 $'000 Group $'000 Attributable profit before exceptional items Exceptional items Attributable profit 113,616 – 113,616 102,219 (7,744) 94,475 351,640 2,492 354,132 40,111 (7,839) 32,272 (8,794) (53,606) (62,400) 28,380 (59,764) (31,384) – – – 627,172 (126,461) 500,711 The following table presents financial information regarding geographical segments: Geographical segment Singapore Australia $'000 $'000 Europe $'000 China $'000 Thailand Others(1) $'000 $'000 Group $'000 Total revenue PBIT * 1,140,087 1,011,220 400,673 147,135 291,918 87,328 238,659 39,121 7,582 3,314 45,445 11,791 2,734,911 689,362 Non-current assets Current assets Investments in associates and equity – accounted entities Tax assets Bank deposits and cash balances Total assets Liabilities Loans and borrowings Tax liabilities Total liabilities Other segment information Additions to non-current assets Additions to intangible assets Depreciation Write down to net realisable value of properties held for sale Exceptional items 3,575,046 3,720,152 2,425,013 3,011,479 300,374 251,669 260,859 562,910 7 132,151 7,988,589 35,901 121,288 6,408,260 1,249,634 112,081 – 88,937 47,896 507 1,499,055 111,983 883,604 16,891,491 847,608 573,875 108,904 289,791 616 11,119 1,831,913 7,616,375 355,428 9,803,716 747,828 162 2,082 24,800 446,348 3,268 – – (56,492) (67,956) 2,644 – 1,346 2,076 4,661 300 – 973 – – – – 3 – – 615 – 537 776,187 446,510 8,209 2,123 4,199 – (119,787) * PBIT – Profit before interest, fair value change, taxation and exceptional items. (1) Others – New Zealand, Vietnam, Philippines, Indonesia and Malaysia. 147 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 13. SEGM ENT INFOR MAT ION (C ON T ’D) Year ended 30 September 2013 The following table presents financial information regarding business segments: Business segment Investment Properties $'000 Development REIT $'000 Properties Hospitality $'000 $'000 136,224 2,346 – 138,570 63,032 – – – – – 1,682,379 – – 1,682,379 183,833 484 9,661 193,978 375,454 69,658 – 54,452 3,923 – 63,032 54,452 379,377 69,658 Corporate & Others $'000 50,313 38,660 15,824 104,797 3,458 1,161 4,619 Revenue – external Revenue – inter-segment Revenue – intra-segment Total revenue Subsidiaries and joint ventures Associates and equity – accounted entities PBIT * Interest income Interest costs Profit before fair value change, taxation and exceptional items Fair value change on investment properties Share of associates’ fair value change on investment properties Profit before taxation and exceptional items Exceptional items Profit before taxation Taxation Profit for the year Non-current assets Current assets Investments in associates and equity – accounted entities Tax assets Bank deposits and cash balances Total assets Liabilities Loans and borrowings Tax liabilities Total liabilities 129,960 – – 107,771 – – 35,923 – – 2,089 1,759,211 289,847 – – 14,320 4,786,822 1,429,336 347,755 67,866 184,428 – 910,897 142,232 – 2,854 250,240 – 1,620,576 276,872 784,205 Other segment information Additions to non-current assets Additions to intangible assets Depreciation Write-down to net realisable value of properties held for sale Exceptional items 24,062 – 139 – – 148 – – – 101 – 308 77,157 13,385 – 6,480 143 770 – 5,512 8,452 4,337 – – – 36,560 Eliminations $'000 Group $'000 – (41,490) (25,485) (66,975) 2,052,749 – – 2,052,749 – – – – – – – – – – – – – – 511,602 59,536 571,138 18,459 (79,428) 510,169 165,883 109,860 785,912 46,409 832,321 (96,583) 735,738 3,270,733 5,608,852 1,055,983 2,937 506,784 10,445,289 2,931,893 1,804,508 230,602 4,967,003 114,705 143 7,697 8,452 46,409 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 13. SEGM ENT INFOR MAT ION (C ON T ’D) Year ended 30 September 2013 (cont’d) Business segment Investment Properties $'000 Development Properties $'000 REIT $'000 Hospitality $'000 Corporate & Others $'000 Eliminations $'000 Group $'000 Attributable profit before exceptional items Exceptional items Attributable profit 176,147 – 176,147 156,927 5,512 162,439 281,908 3,470 285,378 68,754 – 68,754 (6,974) 36,559 29,585 – – – 676,762 45,541 722,303 The following table presents financial information regarding geographical segments: Geographical segment Singapore $'000 Australia $'000 Total revenue PBIT * 1,583,514 499,352 187,105 4,230 Europe $'000 81,321 18,465 2,371,445 3,016,155 88,086 1,526,822 428,029 337,241 China $'000 Thailand $'000 Others(1) $'000 Group $'000 157,409 29,552 259,841 580,027 20,328 7,896 10 42,038 23,072 11,643 2,052,749 571,138 123,322 106,569 3,270,733 5,608,852 Non-current assets Current assets Investments in associates and equity – accounted entities Tax assets Bank deposits and cash balances Total assets Liabilities Loans and borrowings Tax liabilities Total liabilities Other segment information Additions to non-current assets Additions to intangible assets Depreciation Write- down to net realisable value of properties held for sale Exceptional items 913,547 – – 97,252 44,980 204 2,133,113 378,160 211,224 163,444 8,298 37,654 1,055,983 2,937 506,784 10,445,289 2,931,893 1,804,508 230,602 4,967,003 26,642 143 2,298 – 42,072 61,375 – 1,639 26,255 – 2,011 8,589 – (137) 4,337 184 – 1,148 – – 1 – 4 – – 248 – 597 – – 114,705 143 7,697 8,452 46,409 * PBIT – Profit before interest, fair value change, taxation and exceptional items. (1) Others – New Zealand, Vietnam, Philippines, Indonesia and Malaysia. 149 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 14. IN VES T MEN T PR OPE RT IES Group Balance Sheet At Cost At 1 October 2012 Currency re-alignment Transfer upon completion Additions Fair value change At 30 September 2013 and 1 October 2013 Currency re-alignment Transfer from prepayments Transfer from properties held for sale Reclassification to other long-term assets Additions Disposals Fair value change Acquisition of subsidiaries At 30 September 2014 Investment Properties Completed Investment Under Properties Construction $'000 $'000 Total Investment Properties $'000 2,500,581 15,470 105,566 83,784 165,883 2,871,284 (40,581) – 400,000 (101,848) 35,669 (499,409) 80,362 2,806,053 5,551,530 320,853 – (105,566) 28,663 – 243,950 (634) 259,401 – – 736,368 – – 31,716 1,270,801 2,821,434 15,470 – 112,447 165,883 3,115,234 (41,215) 259,401 400,000 (101,848) 772,037 (499,409) 80,362 2,837,769 6,822,331 During the year, the Group disposed of $499,409,000 of investment properties under the hospitality segment to an associate. The gain on disposal amounted to $14,729,000 (Note 10). Profit Statement Rental income from completed investment properties: – Minimum lease payments – Contingent rent based on tenants' turnover 2014 $'000 2013 $'000 269,980 1,989 271,969 229,995 2,894 232,889 Direct operating expenses (including repairs and maintenance) arising from: – Rental generating properties 128,052 85,933 150 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 14. IN VES T MEN T PR OPE RT IES ( C ON T’D ) Company Balance Sheet At Cost At 1 October 2012 Fair value change At 30 September 2013 and 1 October 2013 Fair value change At 30 September 2014 (a) Completed Investment Properties Completed Investment Properties $'000 1,550 100 1,650 (50) 1,600 Completed investment properties comprise serviced residences and commercial properties that are leased mainly to third parties under operating leases (Note 40). Completed investment properties are stated at fair value which has been determined based on valuations performed at balance sheet date. Valuations are performed by accredited internal or external independent valuers with recognised and relevant professional qualification and with recent experience in the location and category of the properties being valued. The valuations are based on open market values on the highest and best use basis and were prepared primarily using the Direct Comparison Method, Income/Investment Approach, Discounted Cash Flow Analysis and Capitalisation Method. In relying on the valuation reports, management has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of current market conditions. 151 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201414. IN VES T MEN T PR OPE RT IES ( C ON T’D ) (a) Completed Investment Properties (cont’d) Where external independent professional valuations were obtained, these were carried out by the following valuers: Country Singapore United Kingdom Australia Philippines Vietnam Indonesia China 2014 Valuers 2013 Valuers Knight Frank Pte Ltd Savills Commercial Limited CBRE Valuations Pty Limited Knight Frank Australia Pty Ltd Jones Lang Lasalle Advisory Services Pty Limited Savills Valuations Pty Ltd CIVAS (VIC) Pty Limited M3 Property Pty Ltd Urbis Valuations Pty Limited Asian Appraisal Company, Inc. Colliers International KJPP Rengganis, Hamid & Rekan Savills Real Estate Valuation Knight Frank Pte Ltd Savills Commercial Limited CBRE Valuations Pty Limited – – – – – – Asian Appraisal Company, Inc. Colliers International KJPP Rengganis, Hamid & Rekan Savills Real Estate Valuation (Beijing) Company (Beijing) Company (b) Investment Properties under Construction Investment property under construction is valued annually by internal or external valuers by estimating the fair value of the completed investment property and then deducting from that amount the estimated costs to complete the construction and a reasonable profit margin on construction and development. The estimated cost to complete is determined based on the construction cost per square metre in the pertinent area. Where external independent professional valuations were obtained, these were carried out by the following valuers: Country 2014 Valuers 2013 Valuers Singapore Knight Frank Pte Ltd Knight Frank Pte Ltd IPUC amounting to approximately $1,234,959,000 (2013: $243,950,000) have been mortgaged to banks as securities for bank facilities. 152 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 15. PR OPERTY, PLANT AND EQ UIPM E NT Group Cost At 1 October 2012 Currency re-alignment Additions Disposals/write-offs At 30 September 2013 and 1 October 2013 Currency re-alignment Acquisition of subsidiaries Additions Disposals/write-offs At 30 September 2014 Accumulated Depreciation At 1 October 2012 Currency re-alignment Charge for the year 2013 Disposals/write-offs At 30 September 2013 and 1 October 2013 Currency re-alignment Charge for the year 2014 Acquisition of subsidiaries Disposals/write-offs At 30 September 2014 Net Book Value At 30 September 2014 At 30 September 2013 Freehold Land and Buildings $'000 Equipment, Furniture and Fittings $'000 Motor Vehicles $'000 Others $'000 Total $'000 – – – – – (1,599) 230,271 – – 228,672 – – – – – (18) 1,144 – – 1,126 67,144 682 5,251 (2,299) 70,778 (1,812) 34,686 8,638 (30,259) 82,031 34,082 (532) 7,601 (1,674) 39,477 (699) 6,970 4,044 (16,333) 33,459 1,062 24 113 – 1,199 (14) – 53 – 1,238 787 18 96 – 901 33 95 – – 1,029 – – – – – (362) 3,335 – – 2,973 – – – – – – – – – – 68,206 706 5,364 (2,299) 71,977 (3,787) 268,292 8,691 (30,259) 314,914 34,869 (514) 7,697 (1,674) 40,378 (684) 8,209 4,044 (16,333) 35,614 227,546 – 48,572 31,301 209 298 2,973 – 279,300 31,599 153 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201415. PR OPERTY, PLANT AND EQ UIPM E NT (CO NT’D ) Company At Cost At 1 October 2012, 30 September 2013, 1 October 2013 and 30 September 2014 Accumulated Depreciation At 1 October 2012 Charge for the year 2013 At 30 September 2013 and 1 October 2013 Charge for the year 2014 At 30 September 2014 Net Book Value At 30 September 2014 At 30 September 2013 Equipment, Furniture and Fittings $'000 53 51 1 52 1 53 – 1 The depreciation charge for the year is included in the financial statements as follows: Charged to profit statement (Note 6) Capitalised in properties held for sale Group 2013 $'000 7,655 42 7,697 2014 $'000 8,199 10 8,209 Company 2014 $'000 2013 $'000 1 – 1 1 – 1 16. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES Company 2014 $'000 2013 $'000 1,689,533 (80,490) 1,609,043 1,637,117 (80,490) 1,556,627 Investments in subsidiaries Unquoted shares, at cost Allowance for impairment 154 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201416. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) Balances with subsidiaries Amounts due from subsidiaries – interest free – interest bearing Amounts due to subsidiaries – interest free – interest bearing Net balances with subsidiaries Note 22 27 Company 2014 $'000 2013 $'000 1,165,355 2,063,777 3,229,132 1,109,011 1,163,465 2,272,476 (521,993) (125,425) 2,581,714 (938,299) – 1,334,177 Amounts due from subsidiaries are non-trade related, unsecured and payable in cash. In respect of interest- bearing amounts, interest of between 0.2% to 5.8% (2013: between 0.2% to 6.7%) per annum was charged. Amounts due to subsidiaries are non-trade related, unsecured and payable in cash. In respect of interest- bearing amounts, interest of 5.8% (2013: Nil) per annum was charged. Balances which are payable on demand have been classified as current while balances with no fixed terms of repayment and not expected to be repaid within the next 12 months have been classified as non-current. Refer to disclosures in Notes 22 and 27 respectively. Details of significant subsidiaries are included in Note 43. (a) Incorporation/Constitution of Subsidiaries The following subsidiaries of the Group and Company were incorporated during the financial year: Subsidiaries of the Group Incorporated in Date of Incorporation Paid-up Capital Group's Effective Interest Frasers Hospitality Group Pte. Ltd. Frasers Hospitality Asset Management Singapore 10 October 2013 S$500,000 100% Pte. Ltd. Singapore 20 November 2013 S$1,000,000 100% Frasers Hospitality Trust Management Pte. Ltd. FCL Bridgepoint Australia Pty Ltd Frasers Hospitality Sydney Investments Singapore Australia 13 January 2014 7 February 2014 Pty Ltd Australia 23 May 2014 Frasers Hospitality Dalian Holding Pte. Ltd. Frasers Hospitality Berlin Investments Ltd Frasers Hospitality ML Pte. Ltd. Frasers Sydney ML Hotel Pty Ltd Frasers Amethyst Pte. Ltd. Sembawang Residences Pte. Ltd. Singapore United Kingdom Singapore Australia Singapore Singapore 11 June 2014 17 June 2014 18 June 2014 19 June 2014 27 June 2014 13 August 2014 S$1 A$2 A$1 S$2 GBP2 S$1 A$1 S$1 S$1,000,000 100% 100% 100% 100% 100% 100% 100% 100% 80% 155 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201416. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) (b) Acquisition of Subsidiaries (i) On 24 April 2014, FCL (Fraser) Pte. Ltd. (“FCL (Fraser)”), a wholly-owned subsidiary of the Company, completed the acquisition of 100% shareholding interest in Teycotel BCN, S.L. (“Teycotel BCN”), a company incorporated in Spain. Teycotel BCN is the owner of “Hotel Porta Marina”, which is located in Barcelona, Spain. Teycotel BCN also holds all the shares in Teycotel Gestio Hotels, S.L., the operator of the Hotel. The consideration is approximately EUR1,078,000 (approximately S$1,868,000), and was arrived at on a “willing-buyer-willing-seller” basis, taking into account the net tangible asset value of Teycotel BCN as at 31 March 2014 of approximately EUR877,000 (approximately S$1,518,000). The purchase price was paid in cash and funded from internal sources. As part of the acquisition, by way of shareholder’s loan to Teycotel BCN, FCL (Fraser) procured repayment of certain outstanding loans and debts owing by Teycotel Gestio amounting to approximately EUR4,528,000 (approximately S$7,840,000). The fair value of the identifiable assets and liabilities of Teycotel BCN as at acquisition date were: Fair Value Recognised on Acquisition $'000 26,460 674 978 73 28,185 (868) (24,621) (25,489) 2,696 (828) 1,868 1,868 (73) 1,795 Investment properties Property, plant and equipment Trade and other receivables Cash and cash equivalents Trade and other payables Bank borrowings Total identifiable net assets at fair value Negative goodwill arising from acquisition Total consideration Cash of subsidiary acquired Net cash outflow on acquisition of subsidiary 156 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 16. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) (b) Acquisition of Subsidiaries (cont’d) Negative goodwill arising from acquisition The negative goodwill of $828,000 arose due to excess of fair value of its identifiable net assets over consideration. The negative goodwill recognised is not expected to be taxable for income tax purposes. Impact of the acquisition on profit statement From the acquisition date, Teycotel BCN has contributed $2,204,000 of revenue and $697,000 to the Group’s profit for the year. If the business combination had taken place at the beginning of the year, the contribution by Teycotel BCN to the Group’s revenue and Group’s profit for the year would have been $2,915,000 and $384,000 respectively. (ii) On 20 June 2014, Frasers Hospitality Investments Melbourne Pte. Ltd., a wholly-owned subsidiary of the Company, completed the acquisition of 100% unitholding in Lasalle 61 Philip Sub Trust, a unit trust established in Australia by a trust deed and 100% of the issued share capital of Ananke Holdings Pty Ltd (“Ananke”), a company incorporated in Australia (collectively, the “Sofitel”). The aggregate consideration for the acquisition was approximately A$202.7 million (approximately S$237.2 million), and was arrived at on a “willing-buyer-willing-seller” basis, taking into account the valuation of the hotel, Sofitel Wentworth Sydney, of approximately A$202.0 million (approximately S$236.3 million), the net cash and accounts receivable and payable of the Sub Trust and Ananke of approximately A$1.7 million (approximately S$2.0 million). The purchase price was paid in cash and funded from borrowings and internal resources. The fair value of the identifiable assets and liabilities of subsidiaries as at the acquisition date were: Property, plant and equipment Trade and other receivables Cash and cash equivalents Trade and other payables Total identifiable net assets at fair value Goodwill arising from acquisition Total consideration Cash of subsidiaries acquired Cash outflow on acquisition of subsidiaries Transaction costs Fair Value Recognised on Acquisition $'000 230,068 20,535 8,936 259,539 (26,932) 232,607 1,451 234,058 (8,936) 225,122 Transaction costs related to the acquisition of $12,901,000 have been recognised in the “Exceptional Items” in the Group’s profit statement for the year ended 30 September 2014. 157 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201416. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) (b) Acquisition of Subsidiaries (cont’d) Goodwill arising from acquisition The goodwill of $1,451,000 represents excess purchase consideration paid over the fair value of its identifiable net assets and is written off in the “Exceptional Items” in the Group’s profit statement for the year ended 30 September 2014. None of the goodwill recognised is expected to be deductible for income tax purposes. Impact of the acquisition on profit statement From the acquisition date, Sofitel has contributed revenue of $14,596,000 and loss of $1,382,000 to the Group’s profit for the year. If the business combination had taken place at the beginning of the year, the contribution by Sofitel to the Group’s revenue and the Group’s profit for the year would have been $53,650,000 and gain of $2,649,000, respectively. Provisional accounting of the acquisition of Sofitel As a consequence of the acquisition, a new tax consolidated group would be created in Sydney whereby the tax bases of the subsidiaries would be reset and taxes would be recomputed and reassessed. Accordingly, the deferred tax liabilities as at 30 September 2014 have been provisionally determined and would be adjusted accordingly on a retrospective basis when the tax provisions are finalised. (iii) On 14 July 2014, Frasers Hospitality ML Pte. Ltd. (“FHML”), a wholly-owned subsidiary of the Company, completed the acquisition of K.K. Shinkobe Holding (“SKH”) and P I Hotel Management Limited (“PIHML”). On 17 July 2014, FHML completed the acquisition of BCH Hotel Investment Pte Ltd (“BCH”), JBB Hotels Sdn. Bhd. (“JBB”), Golden Shower Development (PTC) Ltd. (in its capacity as trustee of Viewgrand Trust C) (“GSD”) and Viewgrand Trust C (“Trust C”). The acquired entities are the master lessees and tenants of the six hotels that Frasers Hospitality Trust acquired from TCC Group. The consideration for the shares for each of the entities is set out in the table below. The sellers are part of the TCC Group. Operating Entities BCH JBB SKH PIHML Viewgrand Trust C GSD (as trustee of Viewgrand Trust C) Seller Purchaser Consideration Net Tangible Asset Value Pacific Coast Assets Inc. Frasers Hospitality SGD5,254,419 SGD3,725,280 Newood Assets Limited Excellence Prosperity (Singapore) Pte Ltd Rakestone Limited, Reenstone Limited and Global-Link Investments Limited Yellowood Development (PTC) Ltd Mr Chia Kwok Ping ML Pte. Ltd. Frasers Hospitality ML Pte. Ltd. Frasers Hospitality ML Pte. Ltd. Frasers Hospitality ML Pte. Ltd. Frasers Sydney ML Hotel Pty Ltd Frasers Sydney ML Hotel Pty Ltd MYR4,170,888 MYR4,170,888 JPY449,326,178 JPY255,142,938 GBP2,902,959 GBP2,902,959 AUD2,248,018 AUD2,248,018 USD1 USD1 158 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201416. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) (b) Acquisition of Subsidiaries (cont’d) (iii) The consideration was arrived at on a “willing-buyer-willing-seller” basis and based on the net asset value of each of the entities. The consideration was paid in cash on completion and funded from internal sources. The fair value of the identifiable assets and liabilities of subsidiaries as at the acquisition date were: Trade and other receivables Cash and cash equivalents Deferred tax assets Trade and other payables Total identifiable net assets at fair value Goodwill arising from acquisition Total consideration Cash of subsidiaries acquired Cash inflow on acquisition of subsidiaries Transaction costs Fair Value Recognised on Acquisition $'000 24,171 46,567 1,845 72,583 (55,501) 17,082 3,818 20,900 (46,567) (25,667) Transaction costs related to the acquisition of $1,294,000 have been recognised in the “Exceptional Items” in the Group’s profit statement for the year ended 30 September 2014. Goodwill arising from acquisition The goodwill of $3,818,000 represents excess purchase consideration paid over the fair value of its identifiable net assets and is written off in the “Exceptional Items” in the Group’s profit statement for the year ended 30 September 2014. None of the goodwill recognised is expected to be deductible for income tax purposes. Impact of the acquisition on profit statement From the acquisition date, the operating entities contributed revenue of $46,160,000 and loss of $4,057,000 to the Group’s profit for the year. If the business combination had taken place at the beginning of the year, the revenue and profit net of tax contributed by the operating entities to the Group would have been $220,288,000 and $18,610,000 respectively. 159 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 16. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) (b) Acquisition of Subsidiaries (cont’d) (iv) On 1 July 2014, the Group, through its wholly-owned subsidiary, Frasers Amethyst Pte. Ltd. (“Frasers Amethyst”) launched an off-market take over offer (the “Offer”) to acquire up to 100% of Australand Property Group (“Australand”) for A$4.48 cash per Australand security. Australand is one of Australia’s leading diversified property groups with activities that span across Australia and property segments. The acquisition of Australand is expected to deliver significant benefits to the Group, including: 1. 2. 3. 4. Increasing contribution from outside of Singapore; Increasing contribution from recurring income, which correspondingly increase the stability and visibility of the Group’s earnings; A quality platform with immediate scale in Australia, a core market; Ownership of an attractive commercial and industrial portfolio with development capabilities in Australia; and 5. Enhancing the Group’s residential development capabilities in Australia. The offer closed in accordance with the bidder’s statement of FCL Bidder dated 1 July 2014 (as supplemented by FCL Bidder’s supplementary bidder’s statement dated 31 July 2014) (the “Bidder’s statement”). As at 30 September 2014, together with on-market purchases, the Group acquired 98.6% shareholdings in Australand. The Group was entitled to mandatorily purchase the remaining 1.4% which was completed on 31 October 2014. As at 30 September 2014, the Group accrued for the cost of the remaining 1.4% and consolidated Australand as a wholly-owned subsidiary. Transaction costs Transaction costs related to the acquisition of $69,475,000 have been recognised in “Exceptional Items” in the Group’s profit statement for the year ended 30 September 2014. Goodwill arising from acquisition The Group has engaged an independent firm to perform purchase price allocation exercise (“PPA”) for Australand. Based on the PPA, part of the consideration paid for the net assets acquired have been identified and provisionally allocated to properties held for sale, deferred tax assets and liabilities and brand, and the residual excess of consideration paid over the fair values of identifiable net assets have been recorded as goodwill amounting to $431,879,000. Impact of the acquisition on profit statement From the acquisition date, Australand has contributed revenue of $47,110,000 and loss for the period of $8,794,000 to the Group. Australand has a financial year end of 31 December. If the business combination had taken place at the beginning of Australand’s financial year, Australand’s contribution to the Group’s revenue and Group’s profit after tax would have been $475.7 million and $115.5 million, respectively. 160 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 16. IN VES T MEN TS I N AND BALANC ES W I TH SUB S ID IA RIES (CO NT’D) (b) Acquisition of Subsidiaries (cont’d) Provisional accounting of the acquisition of Australand As at 30 September 2014, the fair value of the Australand brand of $23,098,000, fair value of properties held for sale of $1,616,052,000, deferred tax assets of $104,910,000, deferred tax liabilities of $37,513,000 and goodwill of $431,879,000 have been determined on a provisional basis as the final results of the PPA have not been received by the date the financial statements was authorised for issue. Goodwill arising from this acquisition, the carrying amounts of the brands and properties held for sale, deferred tax assets and liabilities will be adjusted accordingly on a retrospective basis when the valuations of the brands, properties held for sale and taxes are finalised. The fair value of the identifiable assets and liabilities of Australand as at the acquisition were: Investment properties Property, plant and equipment Investment in equity – accounted entities Intangible assets Properties held for sale Deferred tax assets (net) Trade and other receivables and prepayments Cash and cash equivalents Trade and other payables Bank borrowings Total identifiable net assets at fair value Goodwill arising from acquisition Total consideration Cash of subsidiaries acquired Cash outflow on acquisition of subsidiaries Fair Value Recognised on Acquisition $'000 2,811,309 33,506 115,827 23,569 1,616,052 67,397 173,560 86,716 4,927,936 (612,725) (1,721,275) (2,334,000) 2,593,936 431,879 3,025,815 (86,716) 2,939,099 161 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 17. IN VES T MEN TS I N AND BALANC ES W I TH JOI NT VE NTU RES Investments in joint ventures Unquoted investments, at cost Balances with joint ventures Loans from joint ventures Company 2014 $'000 2013 $'000 Note 500 500 27 (98,918) (50,568) Loans to joint ventures are interest free, unsecured and repayable in cash on demand. Details of joint ventures are included in Note 43. The aggregate amounts of current assets, non-current assets, current liabilities, non-current liabilities, income and expenses related to the Group’s interests in the joint ventures are as follows: Group 2014 $'000 2013 $'000 409,790 85,259 495,049 306,684 105,131 411,815 1,177,915 384,872 1,562,787 659,144 542,609 1,201,753 Group 2014 $'000 2013 $'000 708,319 8,899 (493,461) (3,478) 19 (39,354) 180,944 602,524 34,934 (441,707) (4,218) – (27,154) 164,379 Assets and Liabilities Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Results Revenue Fair value change on investment properties Cost of sales and expenses Interest expense Interest income Taxation Profit for the year 162 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201418. IN VES T MEN TS IN AND BA LA NCES WITH A SSOC IATE S A ND E QU ITY – AC C OU NTE D EN TITIES Group Company Note 2014 $'000 2013 $'000 2014 $'000 2013 $'000 Investments in associates and equity – accounted entities Shares, at cost Negative goodwill on acquisition Share of post-acquisition reserves Allowance for impairment Balances Loans to – non-current – associates – non-current – equity – accounted entities – current – associates – current – equity – accounted entities 22 22 22 22 1,205,093 97,074 196,888 – 1,499,055 784,061 97,712 174,387 (177) 1,055,983 – – – – – 88,833 17,917 18,227 10,012 134,989 77,675 – 8,071 – 85,746 – – 8,313 – 8,313 Loan (from) – non-current – an associate Investments are represented by: Quoted instruments Market value: $1,196,063,000 (2013: $854,938,000) Unquoted instruments 27 (40,912) – 1,245,261 910,897 253,794 1,499,055 145,086 1,055,983 – – – – – – – – – – – – – – – – – – Except for $63,617,000 (2013: $63,617,000) which bear interest at 6.2% (2013: 6.2%) per annum and are repayable in November 2022, non-current loans to associates are unsecured, interest free, payable in cash and have no fixed repayment terms. The loan from an associate of $40,912,000 (2013: Nil) bears interest at 6.2% (2013: Nil) per annum, is unsecured and is repayable in September 2016. Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 Allowance for impairment At 1 October Write-back of allowance At 30 September 177 (177) – 177 – 177 – – – – – – 163 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 18. IN VES T MEN TS IN AND BA LA NCES WITH A SSOC IATE S A ND E QU ITY – AC C OU NTE D EN TITIES (CONT’D ) (a) Share of results of associates and equity- accounted entities Share of results Share of exceptional items Share of fair value change on investment properties Profit for the year Share of other comprehensive income of associates and equity – accounted entities comprise of: Share of capital reserve Share of foreign translation reserve Share of fair value reserve Share of hedging reserve Other comprehensive income for the year (b) Frasers Centrepoint Trust (“FCT”) (i) Payment of Management Fees by Way of Units in FCT Group 2014 $'000 2013 $'000 52,532 (7,106) 58,128 103,554 59,536 6,272 109,860 175,668 (723) (3,143) 468 (70) (3,468) 109 (15,507) (33) 382 (15,049) The Group, through its subsidiary, Frasers Centrepoint Asset Management Ltd. (“FCAM”) as the manager of FCT, received the following Units in FCT in payment of 20% of its management fees for the year from 1 October 2013 to 30 September 2014 (the “Relevant Period”): Relevant Period Date Received No. of Units Received Issued Price $ Value of Units Received $ Aggregate of Aggregate of FCT Units FCT Units held held by FCAM by the Group 1 July 2013 to 30 September 2013 1 October 2013 to 31 December 2013 1 January 2014 to 31 March 2014 1 April 2014 to 30 June 2014 24 October 2013 321,640 1.8515 595,516 25,074,435 338,574,435 23 January 2014 350,516 1.7506 613,613 25,424,951 338,924,951 24 April 2014 345,392 1.7605 608,063 25,770,343 339,270,343 24 July 2014 352,747 1.8638 657,450 2,474,642 26,123,090 339,623,090 The payment of such fees in the form of Units is provided for in the Trust Deed constituting FCT dated 5 June 2006. The Issue Price is the volume weighted average price of the Units traded on the Singapore Exchange Securities Trading Limited for the last ten business days of the Relevant Period. 164 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 18. IN VES T MEN TS IN AND BA LA NCES WITH A SSOC IATE S A ND E QU ITY – AC C OU NTE D EN TITIES (CONT’D ) (b) Frasers Centrepoint Trust (“FCT”) (cont’d) (ii) Acquisition Fees The Group, through FCAM, received 1,662,125 Units in FCT issued at a price of $1.835 per Unit, in payment of acquisition fee of $3,050,000 payable in respect of the acquisition by FCT of Changi City Point, calculated at 1.0% of $305.0 million, the purchase consideration for the acquisition, which was completed on 16 June 2014. (iii) Private Placement of 36,171,000 New Units in FCT On 16 June 2014, FCT acquired Changi City Point for a purchase consideration of $305.0 million from Ascendas Frasers Pte. Ltd., a joint venture of the Group. The acquisition is financed with a combination of equity and debt financing. Equity financing is in the form of a private placement of a total of 88.0 million new units in FCT, of which FCL Trust Holdings Pte. Ltd., a wholly-owned subsidiary of the Company, is placed 36,171,000 units. With the above payments of management fees and acquisition fees by way of Units in FCT and private placement of new units, the Group and FCAM hold an aggregate of 377,456,215 and 27,785,215 Units in FCT, representing 41.2% and 3.0% of the total issued FCT Units, respectively. (c) Frasers Commercial Trust (“FCOT”) Payment of Management Fees by way of Units in FCOT The Group, through its subsidiary, Frasers Centrepoint Asset Management (Commercial) Ltd. (“FCAMC”) as the manager of FCOT, received the following units in FCOT in payment of approximately 45% to 80% of its management fees for the year from 1 October 2013 to 30 September 2014 (the “Relevant Period”): Relevant Period Date Received No. of Units Received Issued Price $ Value of Units Received $ Aggregate of Aggregate of FCOT Units FCOT Units held by the Group held by FCAMC 1 July 2013 to 30 September 2013 1 October 2013 to 31 December 2013 1 January 2014 to 31 March 2014 1 April 2014 to 30 June 2014 25 October 2013 1,539,732 1.2533 1,929,746 83,378,546 184,763,525 24 January 2014 586,569 1.2552 736,261 83,965,115 185,350,094 25 April 2014 694,880 1.2507 869,086 84,659,995 186,044,974 23 July 2014 883,707 1.3512 1,194,065 4,729,158 85,543,702 186,928,681 165 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201418. IN VES T MEN TS IN AND BA LA NCES WITH A SSOC IATE S A ND E QU ITY – AC C OU NTE D EN TITIES (CONT’D ) (c) Frasers Commercial Trust (“FCOT”) (cont’d) The payment of such management fees in the form of Units is provided for in the Trust Deed constituting FCOT dated 12 September 2005. The Issue Price is the volume weighted average price of the Units traded on the Singapore Exchange Securities Trading Limited for the last ten business days of the Relevant Period. With the above payments of management fees by way of Units in FCOT, the Group and FCAMC hold an aggregate of 186,928,681 and 85,543,702 Units in FCOT, representing 27.6% and 12.6% of the total issued FCOT Units, respectively. (d) Frasers Hospitality Trust (“FHT”) In June 2014, FCL Investments Pte. Ltd. (“FCLI”), a wholly-owned subsidiary of the Company, was issued the initial stapled security in FHT. On 14 July 2014, the listing date of FHT, FCLI was issued 262,377,999 stapled securities C, representing 22.0% of the total number of stapled securities in issue, amounting to $230,893,000. (e) The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by the Group, is as follows: Assets and Liabilities Total assets Total liabilities Results Revenue Profit for the year Group 2014 $'000 2013 $'000 8,693,261 4,396,132 5,439,278 2,390,513 401,608 189,900 428,291 482,942 (f) Subsidiaries’ Investments in Equity – Accounted Entities (i) The Group’s share of the consolidated assets and liabilities of the equity – accounted entities is as follows: Group 2014 $'000 2013 $'000 250,703 (138,622) – – Assets and Liabilities Total assets Total liabilities 166 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 18. IN VES T MEN TS IN AND BA LA NCES WITH A SSOC IATE S A ND E QU ITY – AC C OU NTE D EN TITIES (CONT’D ) (f) Subsidiaries’ Investments in Equity – Accounted Entities (cont’d) (ii) The Group’s share of the consolidated results of the equity – accounted entities for the year is as follows: Results Revenue Profit after taxation 19. FI NA NCIA L ASSETS Available-for-sale financial assets: Unquoted Equity investments, at cost Allowance for impairment Quoted Equity investments Allowance for impairment Group 2013 $'000 – – 2014 $'000 2,659 803 Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 3,303 (1,155) 2,148 3,303 (1,155) 2,148 3,303 (1,155) 2,148 3,303 (1,155) 2,148 24 (8) 16 24 (8) 16 – – – – – – Total available-for-sale financial assets 2,164 2,164 2,148 2,148 The unquoted equity investments are measured at cost less impairment losses as there are no active markets for these investments and other methods of determining fair value do not result in a reliable estimate (Note 37(e)). 167 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201420(a). INTANGIBLE ASSETS At Cost At 1 October 2012 Additions 30 September 2013 and 1 October 2013 Additions Acquisition of subsidiaries Currency re-alignment At 30 September 2014 Accumulated Amortisation At 1 October 2012 Amortisation At 30 September 2013 and 1 October 2013 Amortisation At 30 September 2014 Net Book Value At 30 September 2014 At 30 September 2013 Management Contracts Management Management Contracts (Finite Contracts (Indefinite Useful Life) Useful Life) Goodwill $'000 $'000 $'000 Brand $'000 Others $'000 Total $'000 62,601 – 62,601 – – – 62,601 – – – – – 4,648 – 4,648 – – – 4,648 2,450 490 2,940 490 3,430 – – – – – – 431,879 (8,629) 423,250 – – 23,569 (471) 23,098 – – – – – – – – – – 43 142 185 162 – – 347 8 8 16 48 64 67,292 142 67,434 162 455,448 (9,100) 513,944 2,458 498 2,956 538 3,494 62,601 62,601 1,218 1,708 423,250 – 23,098 – 283 169 510,450 64,478 Management contracts relate to fair values of management contracts held by certain acquired subsidiaries prior to the acquisition of the subsidiaries by the Group. Management contracts with a cost of $62,601,000 (2013: $62,601,000) are assessed to have an indefinite useful life and not amortised. This is the value ascribed to management contracts entered into between a subsidiary and an associate. Management is of the view that these intangible assets have an indefinite useful life as the contracts are contracts which go into perpetuity, and will only be terminated upon the removal of the subsidiary as the manager, when Frasers Commercial Trust is dissolved. The remaining useful life of management contracts with finite useful life is 1 (2013: 2) year. The recoverable amount of the management contracts has been determined based on value in use calculations using a projection of the management fee income covering a 5-year period. The pre-tax discount applied to the projections is 10% (2013: 10%) and the forecast growth rate used beyond the 5-year period is 2% (2013: 2%). Based on the recoverable amount, no impairment is necessary. Amortisation charge of $538,000 (2013: $498,000) is included in administrative costs in the profit statement. 168 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201420(a). INTANGIBLE ASSETS (CONT’D) Goodwill As disclosed in Note 16(b), goodwill is provisionally recorded on the acquisition of Australand arising from excess purchase consideration paid over the fair value of its identifiable net assets. Brand As disclosed in Note 16(b), brand, arising from the acquisition of Australand, has been provisionally valued at $23,098,000 as at 30 September 2014 based on an independent professional valuation. No amortisation has been charged for the year. 20(b). OTHER LONG-TERM ASSETS For finance leases where the minimum lease payments have been fully received by the Group, the other long-term assets represents the unguaranteed residual value in relation to the Group’s freehold interest retained in certain properties after the expiry of the respective leases. In the current year, finance income is recognised based on average long-term inflationary rate in Singapore and the interest accretion recognised in the profit statement for the year amounted to $400,000 (2013: $800,000). 21. PR EPAYME NTS Non-current – Prepayments Current – Prepaid land and development costs – Other prepayments Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 10,141 – 480,244 31,292 521,677 398,033 11,901 409,934 – – – – – – – – Prepaid land and development costs relate to tender deposits and stamp duties paid in respect of tender of two land parcels at: (1) Yishun Avenue 2 / Yishun Central 1 (Lot 3685T MK19) for a mixed commercial and residential development integrated with a bus interchange and a community club. Vacant possession of the land parcel is expected to take place at the end of December 2014. Upon obtaining vacant possession of the land parcel from the Housing and Development Board, the prepayments will be reclassified to development properties held for sale and investment properties under construction according to their intended uses. (2) Sembawang Avenue for a residential development. Subsequent to the year end, the land acquisition was completed in October 2014 and an amount of $59,960,000 has been reclassified to development properties held for sale. 169 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 22. TR ADE AND OTH ER REC E IVABL ES Other receivables (non-current) Amounts due from subsidiaries Loans to associates Loans to equity – accounted entities Loan to a non-controlling interest Sundry debtors Trade receivables (current) Trade receivables Sales proceeds and progress billing receivables Other receivables (current) Tax recoverable Accrued interest income Staff loans and advances Sundry debtors Other deposits Amount due from holding company Amounts due from subsidiaries Loans to associates Loans to equity – accounted entities Amounts due from related companies Amounts due from a related party Rental deposits paid to an associate Note 16 18 18 16 18 18 Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 – 88,833 17,917 96,242 42,573 245,565 75,390 549,939 625,329 2,056 5,476 791 63,727 7,580 – – 18,227 10,012 2,609 911 14,819 126,208 – 77,675 – 90,429 – 168,104 34,077 187,812 221,889 2,665 3,393 896 36,499 5,438 16,551 – 8,071 – 7,361 – – 80,874 2,522,213 – – – – 2,522,213 1,710,382 – – – – 1,710,382 – – – – – – 5,298 12 – 706,919 8,313 – 1,084 – – 721,626 2 – 2 – – – 1 – – 562,094 – – – – – 562,095 Total trade and other receivables (current) 751,537 302,763 721,626 562,097 Total trade and other receivables (current and non-current) Trade Receivables 997,102 470,867 3,243,839 2,272,479 Trade receivables comprise mainly rental receivable and management fee receivable, are non-interest bearing and are recognised at their original invoiced amounts which represent their fair values on initial recognition. Included in trade receivables are management fee receivable from associates amounting to $13,544,000 (2013: $738,000). 170 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201422. TR ADE AND OTH ER REC E IVABL ES (CO NT’D ) Sales Proceeds and Progress Billing Receivables Sales proceeds receivable relate to the balance of sales proceeds from completed properties held for sale which will be received upon issue of notice of vacant possession, certificate of statutory completion, expiry of defect liability period and/ or title subdivision. Progress billing receivables relate to the outstanding balance of progress billings which are due within 14 days after the purchasers receive the notices to make payments. Sundry Debtors Included in sundry debtors are $9,762,000 and $42,129,000 (2013: Nil and Nil), being current and non-current expected cash flows associated with receivables from joint development agreements. The timing of expected receipts of these cash flows were based on cash flow forecast carried out in conjunction with detailed reviews of the project feasibility studies. Related Companies Balances Amounts due from holding, related companies and related party are non-trade related, unsecured, interest free and repayable on demand in cash. Loan to a Non-controlling Interest Loan to a non-controlling interest (“NCI”) relates to the NCI’s share of shareholders’ loan contributions to a subsidiary, Frasers (Australia) Pte. Ltd. (“Frasers Australia”) paid on behalf by FCL Clover Pte. Ltd. (“FCL Clover”), another subsidiary of the Company. The amount is repayable in cash and bears interest at a fixed rate of 8% (2013: 8%) per annum. The loan to a NCI shall be repaid out of: (i) all repayment of shareholders loans and interest accrued thereon made by Frasers Australia to the extent of the NCI’s share thereof; (ii) all distributions made by Frasers Australia to the extent of the NCI’s share thereof; (iii) all dividends declared or made by Frasers Australia to the extent of the NCI’s share thereof derived from Frasers Broadway Pty Limited (“Frasers Broadway”) and Frasers Queens Pty Limited (“Frasers Queens”) (subsidiary and associate of Frasers Australia respectively); and (iv) half of all dividends declared or made by Frasers Australia to the extent of the NCI’s share thereof derived from subsidiaries of Frasers Australia other than Frasers Broadway and Frasers Queens. The amount has no fixed date of repayment. The amount is secured: (i) by way of first fixed charge to FCL Clover all the NCI’s right, title and interest in and to the shares that it may from time to time hold in the capital of Frasers Australia and all its rights attaching or relating thereto; and (ii) assignment by the NCI all its rights, title and interest in and to all moneys payable to the NCI by Frasers Australia in respect of loans made by the NCI to Frasers Australia. 171 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201422. TR ADE AND OTH ER REC E IVABL ES (CO NT’D ) There is no concentration of credit risk with respect to the trade receivables of the Group as they consist of a large number of customers that are geographically dispersed. The Group does not have any significant credit risk exposure to a single customer or group of customers. The Group generally holds collateral in the form of bank deposits, bank guarantees or mortgages over assets until completion. The credit risk associated with receivables from equity – accounted entities is monitored through management’s review of project feasibilities and the Group’s ongoing involvement in the operations of these entities. (a) Credit risk by business segments The maximum exposure to credit risk for trade receivables and sales proceeds receivable at the balance sheet date by business segment is as follows: Investment properties Development properties Hospitality Australand Corporate & others 2014 $'000 1,445 542,709 30,031 22,993 14,607 611,785 Group 2013 $'000 1,870 190,508 15,249 – 14,262 221,889 Company 2014 $'000 2013 $'000 – – – – – – – – – – 2 2 (b) Trade receivables that are past due but not impaired The Group had trade receivables amounting to $20,558,000 (2013: $15,758,000) that are past due at balance sheet date but not impaired. These receivables are unsecured and the aging analysis at the balance sheet date is as follows: Group 2014 $'000 2013 $'000 9,026 2,131 348 9,053 20,558 12,385 1,203 1,273 897 15,758 Trade receivables past due: 1 to 30 days 31 to 60 days 61 to 90 days More than 90 days 172 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 22. TR ADE AND OTH ER REC E IVABL ES (CO NT’D ) (c) Trade receivables that are impaired The Group’s trade receivables that are impaired at the balance sheet date and the movements of the allowance account used to record the impairment are as follows: Trade receivables – nominal amounts Allowance for impairment Movements in allowance account: At 1 October Charge for the year Write-back of allowance Written off Exchange differences At 30 September Group Collectively Impaired 2013 $'000 2014 $'000 Individually Impaired 2013 $'000 2014 $'000 760 (9) 751 – 10 (5) (4) 8 9 – – – – – – – – – 1,786 (1,786) – 2,816 1,083 (1,932) (146) (35) 1,786 2,816 (2,816) – 2,405 2,556 (2,041) (54) (50) 2,816 Trade and other receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. Based on the Group’s historical experience in the collection of receivables, management believes that no additional credit risk beyond that provided for is inherent in the Group’s trade and other receivables. 23. DEFER RED TAX ASS ET S AND LIAB ILI TIES (a) Deferred Tax Assets Group Balance Sheet 2014 $'000 2013 $'000 Profit Statement 2013 $'000 2014 $'000 Unabsorbed losses and capital allowances Provisions, expenses and income taken in a different period Arising from acquisition of a subsidiary group due to carried forward losses 161 232 6,912 2,705 104,910 111,983 – 2,937 – – – – (115) (46) – (161) 173 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201423. DEFERR ED TAX A SS ET S AND LIABIL ITIE S ( CO NT’D ) (b) Deferred Tax Liabilities Group Balance Sheet 2014 $'000 2013 $'000 Profit Statement 2013 $'000 2014 $'000 18,531 46,875 97,153 306 13,803 35,493 71,757 (1,084) 37,513 200,378 – 119,969 3,949 11,648 74,367 (98) – 89,866 (356) (19,838) (6,121) (26,315) 174,063 (121) (1,950) (116) (18,100) 30 (2,041) 117,928 (43) (18,259) 71,607 770 (561) 39,342 (1,587) – 37,964 3 – 3 6 37,970 Group 2014 $'000 2013 $'000 4,780,210 (93,725) 4,686,485 385,175 5,071,660 (826,238) 4,245,422 4,515,741 (51,021) 4,464,720 469,864 4,934,584 (1,035,875) 3,898,709 835,371 (1,298) 834,073 5,079,495 861,079 (22,735) 838,344 4,737,053 Deferred tax liabilities at the end of the financial year related to the following: Deferred tax liabilities Differences in depreciation Tax effect on revaluation surplus Provisions, expenses and income taken in a different period Others Arising from acquisition of a subsidiary group due to fair value uplift allocated to assets in the PPA Gross deferred tax liabilities Less: Deferred tax assets Employee benefits Unabsorbed losses and capital allowances Provisions, expenses and income taken in a different period Gross deferred tax assets Net deferred tax liabilities 24. PR OPERTIES H E LD FO R S AL E Development properties held for sale Properties in the course of development, at cost Write down to net realisable value Development profit Progress payments received Completed properties held for sale Completed units, at cost Write down to net realisable value Total properties held for sale 174 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201424. PR OPERTIES HE LD FOR SALE ( C O NT’D) (a) During the year, net interest expense of $50,825,000 (2013: $69,908,000) arising from borrowings obtained specifically for the projects were capitalised as cost of development properties held for sale. The borrowing cost of loans used to finance the projects have been capitalised at interest rates of between 1.1% and 5.7% (2013: 1.0% and 7.3%) per annum. (b) The following table provides information about agreements that are in progress at the reporting date whose revenue are recognised on a percentage of completion basis. Aggregate costs incurred and recognised to date Less: Progress billings Group 2014 $'000 2013 $'000 1,609,112 (826,238) 782,874 2,632,851 (1,035,875) 1,596,976 (c) (d) Included in development properties held for sale are projects of approximately $567,320,000 (2013: $926,395,000) which are expected to be completed within the next twelve months. Included in development properties held for sale are the following significant transactions between the Group and related parties which took place during the year at terms agreed between the parties: Interest expense – Paid to related companies – Paid to related parties Development costs – Paid to related parties Project management fees – Paid to related parties Group 2014 $'000 2013 $'000 6,618 9,358 17,205 4,422 70,500 91,496 205 1,581 (e) Certain subsidiaries and joint ventures have granted fixed and floating charges over their properties held for sale totalling $1,709,912,000 (2013: $1,897,151,000) to banks as securities for credit facilities. 175 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 25. DERIVAT IVE F INANC IAL INS TRUM ENTS Assets Cross currency interest rate swaps Interest rate swaps Foreign currency forward contracts Comprise: – Current – Non-current Liabilities Cross currency interest rate swaps Interest rate swaps Foreign currency forward contracts Comprise: – Current – Non-current Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 12,915 2,080 16,708 31,703 29,623 2,080 31,703 – 8,882 6,455 15,337 7,358 7,979 15,337 – – 1,478 1,478 1,478 – 1,478 660 4,663 968 6,291 3,232 3,059 6,291 – – 254 254 254 – 254 – 1,036 5,289 6,325 6,098 227 6,325 – – 1,478 1,478 1,478 – 1,478 – 2,861 – 2,861 2,163 698 2,861 Cross Currency Interest Rate Swaps (“CCIRS”) In September 2014, US$130 million of guaranteed senior notes of a subsidiary were repaid and the associated US$140 million cross currency swap (notional principal) was terminated accordingly. As at 30 September 2014, the Group had on issue US$40 million of guaranteed senior notes through the US Private Placement debt market (“USPP”). It is the Group’s policy to protect debt sourced overseas from exposure to volatility in exchange rates. The Group had entered into a US$30 million cross currency swap contracts under which it is obliged to pay interest at variable rates in Australian Dollars (AUD) and to pay interest at fixed rates in United States Dollars (USD). The USD components of the cross currency interest rate swaps are structured to provide USD necessary to pay the semi annual coupons on the USD Senior Notes to maturity. The settlement dates coincide with the dates on which interest is payable on the underlying debt. The AUD components of the cross currency, interest rate swaps are paid on a floating rate basis every 90 days. The fair value of the cross currency interest rate swap as at 30 September 2014 was a current asset of $12,915,000 (2013: current liability of $660,000). In October 2014, the remaining USPP senior notes were repaid and associated CCIRS was terminated. 176 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201425. DERIVAT IVE F INANC IAL INS TRUM ENTS ( CO NT’D) The Group has cross currency interest rate swap arrangements in place for the following loan amounts: Notional amounts Within one year Interest Rate Swaps Group 2014 $'000 2013 $'000 87,551 50,000 Derivative financial instruments are used by the Group to hedge exposure to interest rate risk associated with movements in interest rates which impact on the borrowings of the Group and also to hedge exposure to exchange rate risk on foreign currency borrowings. The Company and the Group have interest rate swap arrangements in place for the following loan amounts: Notional amounts Within one year Between one to three years After three years Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 163,386 1,130,361 1,055,080 2,348,827 190,797 236,587 – 427,384 43,890 81,510 – 125,400 82,537 44,443 – 126,980 At 30 September 2014, the fixed interest rates of the outstanding interest rate swap contracts range between 0.5% to 4.0% (2013: between 0.5% to 4.0%) per annum. Foreign Currency Forward Contracts The carrying amounts of the foreign currency forward contracts are accounted for at fair value through profit or loss. The Company and the Group have foreign currency forward contracts arrangements in place for the following amounts: Notional amounts Within one year Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 807,238 196,027 205,166 146,027 177 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 26. CASH A ND CA SH EQUI VALENT S Fixed deposits Cash at bank and in hand Amounts held under "Project Account Rules – 1997 Ed” Fixed deposits Cash at banks Cash and cash equivalents Group 2014 $'000 2013 $'000 245,103 495,800 100,322 206,105 126,335 16,366 142,701 883,604 181,444 18,913 200,357 506,784 Company 2014 $'000 – 86,537 – – – 86,537 2013 $'000 12,585 15,841 – – – 28,426 Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made in varying periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. The withdrawals from amounts held under “Project Account Rules – 1997 Ed” are restricted to payments for development expenditure incurred on properties developed for sale. For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the balance sheet date: Fixed deposits and cash at banks and in hand Bank overdrafts Effect of exchange rate change on opening cash Cash and cash equivalents in the consolidated cash flow statement Note 28 Group 2014 $'000 2013 $'000 883,604 (5,440) – 878,164 506,784 (1,037) (3,138) 502,609 178 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201427. TR ADE AND OTH ER PAYABL ES Group Company Note 2014 $'000 2013 $'000 2014 $'000 2013 $'000 Trade payables 469,878 344,519 795 61 Other payables (current) Amounts due to non-controlling interests Interest payable Accrued operating expenses and sundry creditors Land vendor liabilities Provision for bank profit share Rental deposits Deposits Amounts due to subsidiaries Amounts due to holding company Amounts due to associates Loans from joint ventures Amounts due to related companies Progress billings received 145,228 16,872 159,082 5,015 358,587 20,789 – 36,400 35,302 – – 1,877 8 14,695 520,756 1,150,514 149,790 – 14,036 41,314 25,681 – 7,427 – – 675,665 302,629 1,380,639 – 191 19,511 – – – – 13,127 – – 98,918 – – 131,747 – 206 2,996 – – – – 212,821 – – 50,568 272,124 – 538,715 16 18 Total trade and other payables (current) 1,620,392 1,725,158 132,542 538,776 Other payables (non-current) Sundry creditors Land vendor liabilities Amounts due to subsidiaries Loan from an associate Amounts due to related companies Total trade and other payables (current and non-current) 16 18 28,466 126,806 – 40,912 – 196,184 3,169 – – – 1,197,275 1,200,444 – – 634,291 – – 634,291 – – 725,478 – – 725,478 1,816,576 2,925,602 766,833 1,264,254 179 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201427. TR ADE AND OTH ER PAYABL ES (C ONT’D ) Trade Payables Trade payables are non-interest bearing and are generally settled on 60 day terms. Included in trade payables is an amount of rent payable to an associate of $4,135,000 (2013: Nil). Amounts due to Non-controlling Interests Amounts due to non-controlling interests are non-trade in nature, unsecured, repayable in cash on demand and interest free except for amounts of $17,692,000 (2013: $17,372,000) which bear interest at 2.3% (2013: 2.0%) per annum. Accrued Operating Expenses and Sundry Creditors Accrued operating expenses and sundry creditors include provision for transaction cost and outstanding consideration for the acquisition of a subsidiary by the Group, and the Company of $132,436 (2013: Nil) and $12,315 (2013: Nil), respectively. Related Companies Balances Amounts due to holding and related companies are non-trade related, unsecured and repayable in cash. The current amounts are repayable upon demand. Maturity of non-current amounts due to related companies is as follows: Between 1 and 2 years Between 3 and 5 years Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 – – – 641,845 555,430 1,197,275 – – – – – – The amounts are non-interest bearing except for the following: Interest bearing – 1,847,259 – – Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 180 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 27. TR ADE AND OTH ER PAYABL ES (C ONT’D ) F&N Treasury Pte. Ltd. (“F&NT”), a related company of the Group, had, from time to time, extended loans (“F&NT Loans”) to the Group for various purposes. These loans were interest bearing and were included in Related Companies balances as at 30 September 2013. Immediately prior to the Company’s listing on 9 January 2014, the Company repaid the F&NT Loans by transferring the outstanding loans to FCL Treasury Pte. Ltd., a wholly-owned subsidiary of the Company, for a consideration of approximately $1.678 billion which was based on the estimated fair value of the F&NT Loans based on prevailing market interest rates. A part of the consideration of the F&NT Loans of $41,776,000 (Note 10) pertains to premium charged on the redemption of these Loans and this sum has been taken to the profit statement as a write off of Part Consideration of the Loans, which is reflected under the “Exceptional Items” line. This one-off cost was the difference between the estimated fair value of the F&NT Loans based on prevailing market interest rates at the time of redemption, and the carrying value of these loans. Land Vendor Liabilities When a subsidiary enters into unconditional contracts with land vendors to purchase properties for future development that contain deferred payment terms, these liabilities are disclosed at their present value. The amount owing to some land vendors of $111,459,000 (2013: Nil) is secured over the properties being purchased until the balance of the purchase monies has been paid or settlement of the acquisition has occurred. Provision for Bank Profit Share This provision was made in connection with the bank debt restructuring of Frasers Property UK, a subsidiary of the Group, during the year and comprises: – – a 1% dividend known as “BEAD” as described above; and a Deferred Restructuring Fees (“DRF”) pursuant to a refinanced facility, the Senior facilities (“SF”) with the bank, which is equal to 19% of any future profits arising on certain development properties held for sale in the United Kingdom. The “BEAD” and “DRF” payouts, collectively known as the “Bank Profit Share”, are payable on the earlier of these three events: – – – upon repayment of the SF; or upon the maturity of the SF; or upon the sale of the secured development properties in UK. During the current year, this bank profit share was subsequently settled in October 2013 upon the full repayment of the SF. An over-provision of $3,114,000 (Note 10) was written back to the profit statement, which is reflected under the “Exceptional Items” line. 181 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 28. LOANS AND BO RROW INGS Weighted Average Effective Interest Rate 2014 2013 % % Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 3.2 1.2 2.5 – 1,072,231 5,440 107,260 1,037 3.1 4.0 416,096 1,493,767 520,838 629,135 2.9 3.7 5.4 3.7 2,927,224 125,000 34,751 125,000 2.2 2.4 3,070,384 6,122,608 7,616,375 1,015,622 1,175,373 1,804,508 – – – – – – – – – – – – – – – – – – Repayable within one year: Unsecured Bank loans Bank overdrafts Secured Bank loans Repayable after one year: Unsecured Bank loans Medium Term Notes Secured Bank loans Total loans and borrowings (a) The secured bank loans, overdrafts and term loans are secured by certain subsidiaries and joint ventures by way of fixed and floating charges over certain assets and mortgages on freehold and leasehold land under development as disclosed in Notes 14 and 24. (b) Maturity of non-current loans and borrowings is as follows: Group Company 2014 $'000 2013 $'000 2014 $'000 2013 $'000 1,228,551 4,816,805 77,252 6,122,608 490,012 549,090 136,271 1,175,373 – – – – – – – – Between 1 and 2 years Between 3 and 5 years After 5 years At 30 September 182 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201428. LOANS AND BO RROW INGS ( C ON T ’D ) (c) (d) As at 30 September 2014, the Company and Group had interest rate swaps in place, which have the economic effect of converting borrowings from fixed rates to variable rates or vice versa. The terms of these interest rate swaps is discussed in Note 25, and the fair values are disclosed in Note 37. FCL Treasury Pte. Ltd. (“FCLT”), a wholly-owned subsidiary of the Company, established a S$1,000,000,000 Multicurrency Medium Term Note Programme (the “Programme”), to be unconditionally and irrevocably guaranteed by the Company on 21 March 2012. The Programme has been updated to: (i) allow FCLT to issue, in addition to notes (the “Notes”) in bearer form, (i) Notes in registered form and (ii) perpetual securities in registered and/or bearer form (the “Perpetual Securities” and, together with the Notes, the “Securities”) under the Programme; and (ii) increase the maximum aggregate principal amount of Securities that may be issued under the Programme from S$1,000,000,000 to S$3,000,000,000. In connection with the foregoing, the Programme has been renamed as the “S$3,000,000,000 Multicurrency Debt Issuance Programme”. 29. SHARE CAPITAL Issued and fully paid: Ordinary Shares At 1 October Issue of shares At 30 September Redeemable Preference Shares ("RPS") At 1 October Class B RPS Redeemed during the year At 30 September Total share capital (a) Ordinary Shares Group and Company 2014 2013 No. of Shares $'000 No. of Shares $'000 753,291,782 2,136,520,790 2,889,812,572 753,977 1,000,000 1,753,977 753,291,782 – 753,291,782 753,977 – 753,977 330,000 (330,000) – 330,000 (330,000) – 1,753,977 330,000 – 330,000 330,000 – 330,000 1,083,977 The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All shares carry one vote per share without restriction. The ordinary shares have no par value. 183 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201429. SHARE CAPITAL (C ON T’D) (b) Redeemable Preference Shares The Class B RPS have no fixed maturity, are redeemable at the option of the Company on a Dividend Date and shall rank in priority to the ordinary shares of the Company in the entitlement to receive declared dividends and repayment of specified redemption amount upon any liquidation, dissolution or winding-up of the Company. Holders of Class B RPS shall be paid dividend at the same rate declared, and on the same date as that for the ordinary shares. Save in certain instances set out in the Company’s Articles and the Companies Act, the Class B RPS shall not confer on its holders the right to receive notice of or attend or vote at any general meeting of the Company. Subject to the Companies Act, the Class B RPS shall be redeemed by the Company on such date as the Company and the holders of the Class B RPS may agree, or on liquidation, or winding-up of the Company, whichever is earlier. (c) Corporate Restructuring Prior to the listing, (i) (ii) Fraser and Neave, Limited (“F&N”) subscribed for 330,000,000 new shares for a total subscription amount of $330.0 million; the Company redeemed all the redeemable preference shares held by F&N in the Company for an aggregate amount of $330.0 million; and (iii) F&N subscribed an additional 1,806,520,790 new ordinary shares for a total subscription amount of $670.0 million. As at 30 September 2014, the Company’s issued and paid-up ordinary share capital was $1,753,977,000 comprising 2,889,812,572 ordinary shares. 30. OTH ER R ESE RVE S Foreign currency translation reserve Hedging reserve Fair value adjustment reserve Share-based compensation reserve Dividend reserve Other reserves Group Company 2014 $'000 (76,406) 2,790 671 12,231 179,168 (2,459) 115,995 2013 $'000 5,640 (382) 203 – – (1,736) 3,725 2014 $'000 – 2,736 – 12,200 179,168 – 194,104 2013 $'000 – 911 – – – – 911 184 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 30. OTH ER R ESE RVE S ( C ON T ’D) The movement of other reserves is as follows: Hedging Reserve $'000 Fair Value Adjustment Reserve $'000 Foreign Currency Translation Reserve $'000 Share-based Compensation Reserve $'000 Dividend Reserve $'000 Other Reserve $'000 Total $'000 Group 2014 Opening balance at 1 October 2013 Other comprehensive income Net fair value change of cash flow hedges Foreign currency translation Share of other comprehensive (382) 203 5,640 3,242 – – – – (78,903) income of associates (70) 468 (3,143) 3,172 468 (82,046) – – – – – – (1,736) 3,725 – – – – – 3,242 – (78,903) (723) (3,468) (723) (79,129) Other comprehensive income for the year Contributions by and distributions to owners Employee share-based expense Dividend proposed Total contributions by and distributions to owners Closing balance at 30 September 2014 – – – – – – – – – 12,231 – – 179,168 – 12,231 – 179,168 12,231 179,168 – 191,399 2,790 671 (76,406) 12,231 179,168 (2,459) 115,995 185 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 30. OTH ER R ESE RVE S ( C ON T ’D) Hedging Reserve $'000 Fair Value Adjustment Reserve $'000 Foreign Currency Translation Reserve $'000 Other Reserve $'000 Total $'000 Group 2013 Opening balance at 1 October 2012 (6,042) 35,136 29,920 (1,845) 57,169 Other comprehensive income Net fair value change of cash flow hedges Foreign currency translation Realisation upon disposal of available-for-sale financial assets Share of other comprehensive income of associates Total other comprehensive income for the year Closing balance at 30 September 2013 Fair Value Adjustment Reserve 5,278 – – – – (8,773) – (34,900) – 382 (33) (15,507) 5,660 (34,933) (24,280) – – – 109 109 5,278 (8,773) (34,900) (15,049) (53,444) (382) 203 5,640 (1,736) 3,725 Fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial assets until they are disposed of or impaired. Foreign Currency Translation Reserve The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the effect of hedging net investment in foreign operations and translating foreign currency loans which form part of the Group’s net investment in foreign operations. Hedging Reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments related to hedged transactions that have not yet occurred. 186 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 30. OTH ER R ESE RVE S ( C ON T ’D) Share-based Compensation Reserve Share-based compensation reserve represents the equity-settled share options granted by a subsidiary. The reserve is made up of the Group’s share of the cumulative value of services received from employees of the subsidiary recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options. Dividend Reserve Dividend reserve relates to proposed final dividend of 6.20 cents (2013: Nil) per share. Other Reserves Included in other reserves are: (i) (ii) the statutory reserve which relates to appropriation of funds from the net profit of subsidiaries and associate in China and Thailand, respectively, in accordance with the local laws; and the Group’s share of its associates’ costs directly attributable to the issuance of the units of the associates. 31. SHARE PL ANS (a) On 25 October 2013, F&N, which was then the sole shareholder of the Company, approved the adoption of the FCL Restricted Share Plan (“RSP”) and FCL Performance Share Plan (“PSP”). The RSP and PSP are administered by the Remuneration Committee which comprises the following three non-executive directors who do not participate in the Share Plans: Mr Philip Eng Heng Nee (Chairman) Mr Charles Mak Ming Ying Mr Panote Sirivadhanabhakdi (b) Share Grants Under RSP and PSP (i) Plan Description Under the RSP and PSP, the Company grants shares to eligible participants annually, referred to herein as “RSP Shares” and “PSP Shares”, respectively. The grant (“Base Award”) represents the right to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, provided that certain prescribed performance conditions are met. The Remuneration Committee that administers this scheme has absolute discretion in the granting of shares under the RSP and PSP. The vesting of the RSP Base Award and the PSP Base Award are conditional on the achievement of pre-determined targets set for a two-year performance period and a three-year performance period respectively. The final number of RSP Shares and PSP Shares to be awarded will be determined at the end of the performance period (“Final Award”). 187 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 31. SHARE PL ANS ( C ON T’ D) (b) Share Grants Under RSP and PSP (cont’d) (ii) Final Award The Final Award varies depending on the level of achievement of the pre-determined targets. An achievement factor will be applied to the relevant Base Award to determine the final number of RSP Shares and PSP Shares (as the case may be) to be awarded. The achievement factor ranges from 0% to 150% for RSP and from 0% to 200% for PSP. (iii) Vesting Condition and Schedule At the end of the performance period, 50% of the RSP Shares will be released upon vesting and the balance will be released equally over the subsequent two years with fulfilment of service requirements. All PSP Shares will be released to the participants at the end of the three-year performance period upon vesting. (iv) Performance Conditions Pre-determined targets are set by the Remuneration Committee at their absolute discretion for the performance conditions to be met over the performance period. For the RSP, the targets set are the achievement of Attributable Profit Before Fair Value Adjustment and Exceptional Items (APBE) and Return On Capital Employed (ROCE). For the PSP, the pre-set targets are based on Return on Invested Capital (ROIC). Total Shareholders’ Return Relative to Straits Times Index and Absolute Shareholders’ Return as a multiple of Cost of Equity. (v) Fraser and Neave, Limited Restricted Share Plan and Performance Share Plan (the “Outstanding F&N Awards”) It was disclosed in the Introductory Document dated 28 October 2013 that the Company may on or after the Listing Date, grant Replacement FCL Awards pursuant to the RSP and PSP to certain employees of our Group in replacement of awards previously granted to them pursuant to the Fraser and Neave, Limited Restricted Share Plan and the Fraser and Neave, Limited Performance Share Plan (the “Outstanding F&N Awards”). (vi) Replacement FCL Awards was granted on 3 October 2014 to replace the Outstanding F&N Awards previously granted to FCL Employees pursuant to the Fraser and Neave, Limited Share Plans. The first grant of RSP and PSP for the Financial Year 2013/14 was also made on 3 October 2014. 2014 2013 RSP PSP RSP PSP Outstanding F&N Awards as at 30 September 2014 1,844,401 370,246 Replacement FCL Awards FCL 2014 (Year 1) Awards granted on 3 October 2014 7,100,182 4,052,698 11,152,880 1,200,527 667,839 1,868,366 – – – – – – – – (c) 188 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 31. SHARE PL ANS ( C ON T’ D) (c) (d) (e) Although FCL 2014 (Year 1) RSP and PSP Awards were made on 3 October 2014, the Awards were taken into account for the financial year ended 30 September 2014, and accordingly, the expenses recognised in profit statement for the current financial year under the RSP and PSP are $4,334,000 and $925,000 respectively. Senior management participants are required to hold a minimum number of the shares released to them under the RSP and PSP to maintain a beneficial ownership stake in the Company for the duration of their employment or tenure with the Company. On 3 October 2014, the Company granted contingent awards of 4,052,698 shares under FCL RSP and 667,839 shares under FCL PSP. The estimated fair values of the shares granted under FCL RSP range from $1.515 to $1.621. The estimated fair value of the shares granted under FCL PSP is $1.18. The fair values of the contingent awards are determined at the grant date using Monte Carlo simulation method which involves projection of future outcomes using statistical distributions of key random variables including share price and volatility of returns. The significant inputs into the model are as follows: 2014 2013 RSP PSP RSP PSP Date of grant Prevailing share price at date of grant Expected volatility company FSTREH Index Correlation with FSTREH Index Expected term Risk free interest rate Expected dividend yield* Cost of equity 3.10.2014 3.10.2014 $1.695 $1.695 20.94% NA NA 1.24 to 3.25 years 0.42% to 0.98% 3.41% NA 20.94% 14.59% 74.59% 2.25 years 0.65% 3.41% 7.74% * The expected dividend yield is based on management’s forecast. – – – – – – – – – – – – – – – – – – The expected volatilities are based on a peer group of real estate companies and the FSTREH Index price over the previous 36 months immediately preceding the grant date. The expected term used in the model is based on the grant date and the end of the vesting period. 32. PERP ETUA L S EC URI TI ES FCLT, a wholly-owned subsidiary of the Company, issued $600 million in aggregate principal amount of 4.88% perpetual capital securities on 24 September 2014. The securities are recorded at the proceeds received, net of direct issue costs. The securities are perpetual and confer a right to receive distribution payments. Such distribution is payable semi-annually in arrear unless FCLT, at its sole discretion, elect to defer any distribution in accordance with the terms and conditions of the securities. The rate of distribution applicable to the securities is as follows: (i) from 24 September 2014 (the “Issue Date”) to the date falling five years from the Issue Date (the “First Call Date”) but excluding the First Call Date, at 4.88% per annum plus in the event of a Change in Control Event (as defined in the terms and conditions of the securities (the “Conditions”)) and FCLT does not elect to redeem the securities in accordance with the Conditions, 1.0% per annum (the “Change of Control Margin”); 189 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 32. PERP ETU AL SE CUR IT IE S ( C ON T’D ) (ii) (iii) from the First Call Date to, but excluding the date falling 10 years from the Issue Date (the “Step-Up Date”), at the prevailing five-year S$ swap offer rate with respect to the First Call Date plus the initial spread of 3.046% (the “Initial Spread”) plus the Change of Control Margin (if applicable); from the Step-Up Date and each date falling every five years after the Step-Up Date (each, a “Reset Date”) to, but excluding the immediately following Reset Date, at the prevailing five-year S$ swap offer rate plus the Initial Spread and the step-up margin of one per cent plus the Change of Control Margin (if applicable). A principal sum of $250,000,000 and $1,000,000 was subscribed by TCC Prosperity Limited, an entity of the TCC Group (being companies or entities in the TCC Group which are controlled by Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi) and Mr Lim Ee Seng, Group Chief Executive Officer respectively. The securities constitute direct, unconditional, unsecured and subordinated obligations of FCLT and rank pari passu and without any preference among themselves. The securities may be redeemed at the option of FCLT on any distribution payment date as specified in the Conditions and otherwise upon the occurrence of certain redemptive events as specified in the Conditions. 33. DI VIDENDS Dividends on Ordinary Shares Interim paid 2.4 cents (2013: 19.91 cents) per share, tax exempt Final proposed 6.20 cents (2013: 1.73) per share, tax exempt Company 2014 $'000 2013 $'000 69,350 150,000 179,168 248,518 50,000 200,000 The final dividend is proposed by the Directors after the balance sheet date and subject to the approval of shareholders at the next annual general meeting of the Company. Dividends on Redeemable Preference Shares No preference dividends were paid during the years. During the year, the Company paid final proposed dividends of $50,000,000 for last financial year ended 30 September 2013 and interim dividends of $69,350,000 for current financial year ended 30 September 2014, totalling $119,350,000. 190 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201434. FINANCIAL REPO RTI NG S TANDAR D S (“FRS”) A ND I NTERPR ETATION S O F FRS (“ INT FR S”) FRS and INT FRS not yet effective The Group has not adopted the following standards that have been issued but not yet effective: Description Revised FRS 27 Revised FRS 28 Amendments to FRS 36 Amendments to FRS 39 FRS 110 FRS 111 FRS 112 Amendments to FRS 32 Amendments to FRS 110, FRS 111 and FRS 112 Amendments to FRS 110, FRS 112 and FRS 27 Amendments to FRS 19 Improvements to FRSs (January 2014) – Amendment to FRS 102 – Amendment to FRS 103 – Amendment to FRS 108 – Amendment to FRS 16 – Amendment to FRS 24 – Amendment to FRS 38 Improvements to FRS (February 2014) – Amendment to FRS 103 – Amendment to FRS 113 – Amendment to FRS 40 FRS 114 Amendments to FRS 16 and FRS 38 Amendments to FRS 16 and FRS 41 Amendments to FRS 111 Separate Financial Statements Investments in Associates and Joint Ventures Recoverable Amount Disclosures for Non-Financial Assets Novation of Derivatives and Continuation of Hedge Accounting Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Offsetting Financial Assets and Financial Liabilities Transition Guidance Investment Entities Effective for Annual Period Beginning on or After 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 Defined Benefit Plans : Employee Contributions 1 July 2014 Share Based Payment Business Combinations Operating Segments Property, Plant and Equipment Related Party Disclosures Intangible Assets Business Combinations Fair Value Measurement Investment Property Regulatory Deferral Accounts Clarification of Acceptable Methods of Depreciation and Amortisation Agriculture Bearer Plants Accounting for Acquisitions of Interests in Joint Operations 1 July 2014 1 July 2014 1 July 2014 1 July 2014 1 July 2014 1 July 2014 1 July 2014 1 July 2014 1 July 2014 1 January 2016 1 January 2016 1 January 2016 1 January 2016 Except for Revised FRS 27, Revised FRS 28, FRS 110, FRS 111 and FRS 112, the Group expects that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of Revised FRS 27, Revised FRS 28, FRS 110, FRS 111 and FRS 112 are described below. 191 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 34. FINANCIAL REPO RTI NG S TANDAR D S (“FRS”) A ND I NTERPR ETATION S O F FRS (“ INT FR S”) (CONT’D ) Standards issued but not yet effective FRS 110 Consolidated Financial Statements and Revised FRS 27 Separate Financial Statements FRS 110 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by FRS 110 will require management to exercise significant judgement to determine which entities are controlled and therefore are required to be consolidated by the Group, compared with the requirements that were in FRS 27. Therefore, FRS 110 may change which entities are consolidated within a group. The revised FRS 27 was amended to address accounting for subsidiaries, jointly controlled entities and associates in separate financial statements. In accordance with the transitional provisions of FRS 110, the Group re-assessed the control conclusion for its investees. As a consequence, when the Group adopts FRS 110 from 1 October 2014, it would consolidate its investments in Frasers Commercial Trust, Frasers Centrepoint Trust and Frasers Hospitality Trust, which are currently accounted for as associated companies using the equity method. This standard will be applied retrospectively and prior periods in the Group’s 2015 financial statements will be restated. While the Group is continuing to evaluate the application of this standard, based on FY2014 financial information, the estimated effect of the application of FRS 110 is a decrease in equity attributable to owners of the Company of $18.4 million, an increase in non-controlling interests of $2,554.2 million. FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and Joint Ventures FRS 111 classifies joint arrangements either as joint operations or joint ventures. Joint operation is a joint arrangement whereby the parties that have rights to the assets and obligations for the liabilities whereas joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. FRS 111 requires the determination of joint arrangement’s classification to be based on the parties rights and obligations under the arrangement, with the existence of a separate legal vehicle no longer being the key factor. FRS 111 disallows proportionate consolidation and requires joint ventures to be accounted for using the equity method. The revised FRS 28 was amended to describe the application of equity method to investments in joint ventures in addition to associates. The Group has several investments in joint arrangements. The Group has re-evaluated the rights and obligations of the parties to these joint arrangements and has determined that the parties in these joint arrangements have rights to the net assets of the arrangements. Accordingly, these joint arrangements will be classified as joint ventures under FRS 111 and will be accounted for using the equity method. Currently, the Group’s joint arrangements are accounted for as joint venture companies under FRS 31 Interest in Joint Venture using the proportionate consolidation method. This standard will be applied retrospectively and prior periods in the Group’s 2015 financial statements will be restated. While the Group is continuing to evaluate the application of this standard, based on FY 2014 financial information, the estimated effect of the application of FRS 111 is a decrease in revenue of $708.3 million, a decrease in cost of sales of $470.9 million and, a decrease in other expenses of $22.6 million. FRS 112 Disclosure of Interests in Other Entities FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its financial statements to evaluate the nature and risks associated with its interests in other entities and the effects of those interests on its financial statements. As this is a disclosure standard, it will have no impact to the financial position and financial performance of the Group when implemented in 2015. 192 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 35. SI GNI FICANT R EL AT ED PAR T Y TR AN SACTI ONS Sale and Purchase of Goods and Services In addition to those related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place during the period at terms agreed between the parties: Rental – Received from related companies – Paid to an associate Service charge – Received from related companies Management fees – Paid to a related company – Paid to a related party – Received from associates Acquisition fees – Received from an associate Leasing commission – Received from an associate Marketing costs – Paid to related parties Purchases – Paid to related companies Corporate guarantee fee – Paid to holding company Interest (income)/expense – Received from related parties – Paid to a related company Group 2014 $'000 2013 $'000 (1,886) 49,685 (2,211) 22,000 (408) (541) 12,006 360 (36,639) 12,500 360 (31,000) 3,050 – (152) (161) 5,136 11,960 34 – 208 808 (15,586) 19,063 (10,262) 57,439 193 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 36. FINANCIAL RI SK M ANAGE MEN T The Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk. The Group has risk management policies and guidelines governing all investments, which set out its overall business strategies, its tolerance for risk and its general risk management philosophy and has established processes to monitor and control hedging transactions in a timely and accurate manner. All investment opportunities are reviewed regularly by the Executive Committee of the Board to ensure that the Group’s policy guidelines are adhered to. (a) Credit Risk At the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk in the event that the counterparties fail to perform their obligations is represented by the carrying amount of each class of financial assets recognised in the balance sheets, including derivatives with positive fair values. At 30 September 2014, 100% (2013: 100%) of the Company’s receivables are due from subsidiaries and joint ventures. The directors believe that there is no significant credit risk as these companies are of good credit standing. The Group has guidelines governing the monitoring of credit risk. Contractual deposits are collected and scheduled progress payments are received from the buyers of development properties held for sale when due. Titles to development properties held for sale are only transferred upon full settlement. Rental deposits are collected from tenants and debts are monitored regularly to minimise risk of non-payment. Cash and fixed deposits are placed with reputable financial institutions. Information regarding financial assets that are either past due or impaired and the aging analysis of trade receivables is disclosed in Note 22. With respect to derivative financial instruments, credit risk arises from the potential failure of counterparties to meet their obligations under the contract or arrangement. The Group’s maximum credit risk exposure for foreign currency swap contracts and interest rate swap contracts are limited to the fair value adjustments of these contracts. It is the Group’s and the Company’s policy to enter into financial instruments with a diversity of credit worthy counterparties. The Group and the Company do not expect to incur material credit losses on their financial assets or other financial instruments. (b) Liquidity Risk Liquidity risk is the risk that the Group and Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group adopts a prudent approach to managing its liquidity risk. The Group always maintains sufficient cash and has available funding through a diverse source of uncommitted credit facilities from various banks and a related company. Surplus cash from subsidiaries are transferred to the Company in accordance with its group policy for management of liquidity of the companies in the Group. 194 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201436. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (b) Liquidity Risk (cont’d) The table below analyses the maturity profile of the Group’s and Company’s financial assets and liabilities (including derivative financial instruments) based on contractual undiscounted cash flow. 1 year or less $'000 2014 1 to 5 years $'000 Over 5 years $'000 Total $'000 1 year or less $'000 2013 1 to 5 years $'000 Over 5 years $'000 Total $'000 Group Financial Assets Trade and other receivables Derivative financial instruments Cash and cash equivalents Total undiscounted financial assets 763,193 112,070 161,758 1,037,021 313,954 106,257 94,067 514,278 29,623 2,080 883,604 – – – 31,703 1,478 883,604 506,784 – – – – 1,478 506,784 1,676,420 114,150 161,758 1,952,328 822,216 106,257 94,067 1,022,540 170,255 1,072,424 Financial Liabilities Trade and other payables Derivative financial instruments Loans and borrowings Total undiscounted financial liabilities 3,290,812 8,042,882 115,349 11,449,043 2,133,354 2,343,474 147,978 4,624,806 28,466 1,271,145 1,461,043 1,245,096 669,079 1,095,454 144,809 1,909,342 2,211,030 7,864,648 86,883 10,162,561 3,169 2,709,308 15,337 7,979 7,358 2,924 3,232 6,156 – – Total net undiscounted financial (liabilities)/ assets (1,614,392) (7,928,732) 46,409 (9,496,715) (1,311,138) (2,237,217) (53,911) (3,602,266) 195 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201436. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (b) Liquidity Risk (cont’d) 1 year or less $'000 2014 1 to 5 years $'000 Over 5 years $'000 Total $'000 1 year or less $'000 2013 1 to 5 years $'000 Over 5 years $'000 Total $'000 Company Financial Assets Trade and other receivables Amounts due from subsidiaries Cash and cash equivalents Total undiscounted financial assets Financial Liabilities Trade and other payables Derivative financial instruments Amounts due to subsidiaries 14,707 – – 14,707 3 – – 3 747,310 92,619 2,429,594 3,269,523 562,094 315,828 1,394,554 2,272,476 86,537 – – 86,537 28,426 – – 28,426 848,554 92,619 2,429,594 3,370,767 590,523 315,828 1,394,554 2,300,905 119,415 – 6,098 227 – – 119,415 3,263 – 6,325 2,163 698 – – 3,263 2,861 20,377 652,949 1,621 674,947 536,053 725,478 – 1,261,531 Total undiscounted financial liabilities 145,890 653,176 1,621 800,687 541,479 726,176 – 1,267,655 Total net undiscounted financial assets/ (liabilities) 702,664 (560,557) 2,427,973 2,570,080 49,044 (410,348) 1,394,554 1,033,250 The earliest period in which the financial guarantee contracts amounting to $46,272,000 (2013: $52,383,000) could be called is within one year. 196 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201436. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (c) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flow of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s exposure to changes in interest rates is in respect of debt obligations and deposits with related companies and financial institutions. The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts with varying tenors. To manage this mix in a cost-efficient manner, the Group enters into interest rate swaps to hedge its interest rate exposure for specific underlying debt obligations. Effective interest rates and repricing analysis In respect of the interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at balance sheet date and the periods in which they reprice. Financial instruments classified as fixed rates are instruments for which interest rates are fixed until the maturity of the instruments or for which interest rate swaps have been entered into. Group Fixed Interest Rate Effective Interest Rate % Floating Interest Rate $'000 Note Within 1 Year $'000 Between 1 to 5 Years $'000 After 5 Years $'000 Total $'000 2014 Financial Assets Cash and bank deposits Other receivables Derivative financial instruments Financial Liabilities Loans and borrowings Other payables Derivative financial instruments 2013 Financial Assets Cash and bank deposits Other receivables Financial Liabilities Loans and borrowings Other payables Derivative financial instruments 26 22 25 28 27 25 26 22 28 27 25 0.0 to 5.0 6.2 to 8.0 1.0 to 5.8 – – 371,438 – 14,995 14,995 – 371,438 – 96,242 – 96,242 – 63,617 – 63,617 371,438 159,859 14,995 546,292 1.1 to 7.3 6.2 5,073,134 – 128,604 – 2,364,937 40,912 49,700 – 7,616,375 40,912 0.5 to 4.0 8,882 5,082,016 – 128,604 – 2,405,849 – 49,700 8,882 7,666,169 0.0 to 4.0 6.0 to 8.0 73,090 – 73,090 281,766 8,071 289,837 – 90,429 90,429 – 63,617 63,617 354,856 162,117 516,973 1.0 to 7.3 0.6 to 6.0 1,329,104 302,350 61,300 347,634 289,104 1,197,275 125,000 – 1,804,508 1,847,259 0.5 to 4.0 5,323 1,636,777 – 408,934 – 1,486,379 – 125,000 5,323 3,657,090 197 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 36. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (c) Interest Rate Risk (cont’d) Company Fixed Interest Rate Effective Interest Rate % Floating Interest Rate $'000 Note Within 1 Year $'000 Between 1 to 5 Years $'000 After 5 Years $'000 Total $'000 2014 Financial Assets Amounts due from subsidiaries Financial Liabilities Amounts due to subsidiaries Derivative financial instruments 2013 Financial Assets Cash and bank deposits Amounts due from subsidiaries Financial Liabilities Other payables Derivative financial instruments 16 25 26 16 27 25 16 0.2 to 5.8 2,063,777 2,063,777 5.8 125,425 1.6 to 4.0 1,036 126,461 – – – – – 0.0 to 7.7 – 12,585 0.2 to 6.7 1,163,465 1,163,465 – 12,585 0.9 to 7.8 145,140 126,980 1.6 to 4.0 2,861 148,001 – 126,980 – – – – – – – – – – – – – – – – – – – – – – 2,063,777 2,063,777 125,425 1,036 126,461 12,585 1,163,465 1,176,050 272,120 2,861 274,981 Sensitivity Analysis for Interest Rate Risk For the variable rate financial assets and liabilities, a hundred basis points increase/decrease in interest rate, with all other variables held constant, would decrease/increase the Group’s profit after tax and net loss in hedging reserve by approximately $42,056,000 (2013: $12,979,000) and $730,000 (2013: $5,300,000) respectively, arising mainly as a result of higher/lower interest expense on net floating borrowing position and increase/decrease in the fair value of derivatives held for hedging respectively. 198 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 36. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (d) Foreign Currency Risk The purpose of the Company’s and the Group’s foreign currency hedging activities is to protect against the volatility associated with investments in and loans granted to foreign subsidiaries. The Company and the Group primarily utilise foreign currency forward contracts with maturities of less than twelve months to hedge foreign currency-denominated investments and loans to foreign subsidiaries. Under this programme, increases or decreases in the Company’s foreign currency-denominated investments and loans are partially offset by gains and losses on the hedging instruments. The Company does not use foreign currency forward contracts for trading purposes. In addition to transactional exposures, the Group is also exposed to foreign exchange movements on its net investment in foreign subsidiaries. The Group uses foreign currency borrowings as a natural hedge against the activities of the foreign subsidiaries. The net fair value gain/loss of the foreign currency forward contracts as at 30 September 2014 was $10,253,000 (2013: $510,000). The financial assets and liabilities are denominated in the following currencies: Singapore Australia Chinese Hong Kong Sterling Pound $'000 Dollar Renminbi $'000 $'000 Dollar $'000 Dollar $'000 United States Dollar $'000 Others $'000 Total $'000 Group 2014 Financial Assets Financial assets Trade and other receivables Cash and cash equivalents Derivative financial instruments Total Financial 2,148 – – 535,041 411,394 2,661 – 6 16 – – 2,164 21,063 13,532 13,405 997,102 552,875 216,638 10,260 727 61,450 5,147 36,507 883,604 6,453 24,424 – – 302 524 – 31,703 Assets 1,096,517 652,456 12,921 733 82,831 19,203 49,912 1,914,573 Financial Liabilities Trade and other payables 965,568 67,576 4,208 67,582 93,419 50,344 47,123 1,295,820 Derivative financial instruments Loans and borrowings Total Financial Liabilities 1,753 6,109 4,940,208 2,350,685 – – – 34 7,166 275 15,337 – 142,939 162,243 20,300 7,616,375 5,907,529 2,424,370 4,208 67,582 236,392 219,753 67,698 8,927,532 199 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 36. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (d) Foreign Currency Risk (cont’d) Singapore Australia Chinese Hong Kong Sterling Pound $'000 Dollar Renminbi $'000 $'000 Dollar $'000 Dollar $'000 United States Dollar Others $'000 $'000 Total $'000 Group 2013 Financial Assets Financial assets Trade and other receivables Cash and cash equivalents Derivative financial instruments Total Financial 2,148 – – – 16 – – 2,164 403,597 26,208 12,254 572 11,465 14,658 2,113 470,867 259,277 74,604 123,278 939 32,944 5,690 10,052 506,784 – – – – – 1,478 – 1,478 Assets 665,022 100,812 135,532 1,511 44,425 21,826 12,165 981,293 Financial Liabilities Trade and other payables 1,775,806 211,033 102,149 81 318,449 201,299 14,156 2,622,973 Derivative financial instruments Loans and borrowings Total Financial Liabilities 1,720 1,710 – 820,586 723,584 46,689 – – – 2,861 – 6,291 97,787 107,260 8,602 1,804,508 2,598,112 936,327 148,838 81 416,236 311,420 22,758 4,433,772 200 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201436. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (d) Foreign Currency Risk (cont’d) The financial assets and liabilities are denominated in the following currencies: Singapore Australia Chinese Hong Kong Sterling Pound $'000 Dollar Renminbi $'000 $'000 Dollar $'000 Dollar $'000 United States Dollar Others $'000 $'000 Total $'000 Company 2014 Financial Assets Financial assets Trade and other receivables Cash and cash equivalents Derivative financial instruments Total Financial 2,148 – 2,885,412 53,495 85,835 – 588 254 Assets 2,973,395 54,337 Financial Liabilities Trade and other payables 641,408 Derivative financial instruments Total Financial Liabilities – 641,408 – – – – – – – – – – – – – 54 – 54 – – – – – – 2,148 27 248,111 56,794 3,243,839 – – 60 – – – 86,537 254 27 248,171 56,794 3,332,778 – – – 125,425 6,325 131,750 – – – 766,833 6,325 773,158 201 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 36. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (d) Foreign Currency Risk (cont’d) Singapore Australia Chinese Hong Kong Sterling Pound $'000 Dollar Renminbi $'000 $'000 Dollar $'000 Dollar $'000 United States Dollar Others $'000 $'000 Total $'000 Company 2013 Financial Assets Financial assets Trade and other receivables Cash and cash equivalents Derivative financial instruments Total Financial 2,148 – 1,910,020 55,166 22,846 – – – Assets 1,935,014 55,166 Financial Liabilities Trade and other payables 1,092,181 Derivative financial instruments Total Financial Liabilities – 1,092,181 – – – – – – – – – – – – – 54 – 54 – – – – – – – 2,148 250,448 56,845 2,272,479 5,487 39 – 1,478 – – 28,426 1,478 5,487 251,965 56,845 2,304,531 – – – 172,073 – 1,264,254 2,861 – 2,861 174,934 – 1,267,115 The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the US$ and A$ exchange rates (against the respective functional currencies of the Group entities), with all other variables held constant. Group US$/S$ – strengthened 10% (2013: 10%) – weakened 10% (2013: 10%) US$/RMB – strengthened 10% (2013: 10%) – weakened 10% (2013: 10%) A$/S$ – strengthened 10% (2013: 10%) – weakened 10% (2013: 10%) 2014 $'000 2013 $'000 12,575 (12,575) (11,862) 11,862 (1,787) 1,787 7,859 (7,859) (1,809) 1,809 1,551 (1,551) 202 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 36. FINANCIAL RI SK M ANAGE MEN T ( CO NT’D) (d) Foreign Currency Risk (cont’d) Company US$/S$ A$/S$ NZ$/S$ – strengthened 10% (2013: 10%) – weakened 10% (2013: 10%) – strengthened 10% (2013: 10%) – weakened 10% (2013: 10%) – strengthened 10% (2013: 10%) – weakened 10% (2013: 10%) 37. FAI R VALU E O F ASSETS AND LI AB IL I TI ES (a) Fair Value Hierarchy 2014 $'000 10,188 (10,188) 4,489 (4,489) 4,714 (4,714) 2013 $'000 6,508 (6,508) 4,579 (4,579) 4,718 (4,718) The Group categorises fair value measurements using a fair value hierarchy that is dependent on the valuation inputs used as follows: Level 1 Level 2 : : Level 3 : Quoted prices (unadjusted) in active markets for identical assets or liabilities. 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). Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Fair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. 203 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (b) Classifications and Fair Values The following tables show the carrying amounts and fair values of assets and liabilities, including their levels in the fair value hierarchy. It does not include fair value information for short term trade and other receivables, cash and cash equivalents and trade and other payables as their carrying amounts are reasonable approximation of fair values. Note Level 1 $'000 Level 2 $'000 Level 3 $'000 Fair Value Total $'000 Carrying Amount Total $'000 Group 2014 Assets and Liabilities measured at Fair Value: Financial Assets Available-for-sale financial assets: – Quoted investments Derivative financial assets: – Interest rate swaps – Foreign currency forward contracts Non-Financial Assets Investment properties Financial Liabilities Derivative financial liabilities: – Interest rate swaps – Foreign currency forward contracts 19 25 25 14 25 25 Liabilities not carried at Fair Value but for which Fair Value are disclosed: Financial Liabilities Bank borrowings 28 204 16 – – – 16 – – – – 14,995 16,708 – – – 16 16 14,995 14,995 16,708 16,708 – 31,703 6,822,331 6,822,331 6,822,331 6,854,050 6,822,331 6,854,050 (8,882) (6,455) (15,337) – – – (8,882) (8,882) (6,455) (15,337) (6,455) (15,337) – (6,121,733) – (6,121,733) (6,122,608) Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (b) Classifications and Fair Values (cont’d) Note Level 1 $'000 Level 2 $'000 Level 3 $'000 Fair Value Total $'000 Carrying Amount Total $'000 Company 2014 Assets and Liabilities measured at Fair Value: Financial Assets Derivative financial assets: – Foreign currency forward contracts Non-Financial Asset Investment property Financial Liabilities Derivative financial liabilities: – Interest rate swaps – Foreign currency forward contracts 25 14 25 25 (c) Determination of Fair Value – – – – – – 254 – 254 (1,036) (5,289) (6,325) – 254 254 1,600 1,600 1,600 1,854 1,600 1,854 – – – (1,036) (1,036) (5,289) (6,325) (5,289) (6,325) The following valuation methods and assumptions are used to estimate the fair values of the following significant classes of assets and liabilities: (i) Derivatives Forward currency forward contracts, cross currency interest rate swaps and interest rate swaps are valued using valuation techniques with market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models, using present valuation calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, interest rate and forward rate curves. (ii) Non-Derivative Financial Liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted using the market rate of interest at the reporting date. In respect of the liability component of convertible bonds, the fair value at initial recognition is determined using a market interest rate of similar liabilities that do not have a conversion option. 205 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (c) Determination of Fair Value (cont’d) (iii) Other Financial Assets and Liabilities The fair value of quoted securities is their quoted bid price at the balance sheet date. The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values. Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market-related rate for a similar instrument in the balance sheet. (iv) Investment Properties The Group’s investment property portfolio is mostly valued by external and independent valuation companies at least once every two years. The fair values are based on open market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably and without compulsion. The valuers have considered valuation techniques including direct comparison method, capitalisation approach, discounted cash flows and residual method in arriving at the open market value as at the balance sheet date. In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions used to determine the fair value of investment properties include market-corroborated capitalisation yield, terminal yield and discount rate. Investment properties under construction (“IPUC”) are stated at fair value which has been determined based on valuations performed at balance sheet date. Valuations are performed by accredited independent valuer with recognised and relevant professional qualification or internal valuers and with recent experience in the location and category of the properties being valued. The valuation is prepared on an ungeared basis. The fair value of IPUC is determined using a combination of capitalisation approach, discounted cash flow analysis and residual land value method, where appropriate. In arriving at their estimates of market value, the valuers have used their market knowledge and professional judgement and not only relied on historical transactional comparables. 206 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (d) Level 3 Fair Value Measurements (i) Information about Significant Unobservable Inputs used in Level 3 Fair Value Measurements The following table shows the valuation techniques used in measuring significant Level 3 fair values, as well as the significant unobservable inputs used. Recurring Fair Value Measurements Fair Value as at 30 September 2014 $'000 Valuation Techniques Key Unobservable Inputs Inter-relationship Between Key Unobservable Inputs and Fair Value Measurement Description Investment Properties – Commercial – Singapore 1,896,095 – Capitalisation – Capitalisation rate: approach 3.9% to 5.7% – Others 50,423 – Discounted cashflow approach – Discount rate: 6.0% to 7.8% – Terminal yield rate: 3.9% to 6.5% – Discounted cashflow approach – Discount rate: 12.0% – Terminal yield rate: 10.0% Investment Properties under Construction – Commercial – Singapore 1,234,959 – Capitalisation – Capitalisation rate: approach 3.8% to 5.3% – Discounted cashflow approach – Discount rate: 7.8% – Residual land value method – Terminal yield rate: 5.5% – Total gross development values: $2,273 million – Total estimated construction cost to completion: $500 million The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate and terminal yield rate The estimated fair value varies inversely against the discount rate and terminal yield rate The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate and terminal yield rate The estimated fair value would increase with higher gross development value and decreases with higher cost to completion 207 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (d) Level 3 Fair Value Measurements (cont’d) (i) Information about Significant Unobservable Inputs used in Level 3 Fair Value Measurements (cont’d) Recurring Fair Value Measurements (cont’d) Fair Value as at 30 September 2014 $'000 Valuation Techniques Key Unobservable Inputs Inter-relationship Between Key Unobservable Inputs and Fair Value Measurement Description Investment Properties – Hospitality – Singapore 210,000 – Capitalisation – Capitalisation rate: approach 3.8% – Discounted cashflow approach – Discount rate: 6.5% – Terminal yield rate: 3.8% – Australia 94,501 – Capitalisation – Capitalisation rate: approach 7.5% – Discounted cashflow approach – Discount rate: 9.5% – Europe 249,863 – Capitalisation – Capitalisation rate: approach 7.3% – Discounted cashflow approach – Market comparison method – Discount rate: 9.8% – Transacted price of comparable properties(1) $336 psf to $2,335 psf – China 241,575 – Capitalisation – Capitalisation rate: approach 2.4% – Others 78,475 – Discounted cashflow approach – Discounted cashflow approach – Discount rate: 5.4% – Capitalisation rate: 8.0% – Discount rate: 6.8% – Market comparison method – Transacted price of comparable properties(1) $180 psf to $347 psf The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate and terminal yield rate The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate The estimated fair value varies with different adjustment factors used The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate The estimated fair value varies with different adjustment factors used (1) Adjustments are made for any difference in the location, tenure, size and condition of the specific property. 208 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (d) Level 3 Fair Value Measurements (cont’d) (i) Information about Significant Unobservable Inputs used in Level 3 Fair Value Measurements (cont’d) Recurring Fair Value Measurements (cont’d) Description Investment Properties – Australand Investment Properties under Construction – Australand Fair Value as at 30 September 2014 $'000 Valuation Techniques Key Unobservable Inputs Inter-relationship Between Key Unobservable Inputs and Fair Value Measurement 2,730,598 – Capitalisation – Capitalisation rate: approach 6.5% to 10.3% – Discounted cashflow approach – Discount rate: 8.4% to 11.0% 35,842 – Capitalisation – Capitalisation rate: approach 6.5% to 10.3% – Discounted cashflow approach – Discount rate: 8.4% to 11.0% The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate The estimated fair value varies inversely against the capitalisation rate The estimated fair value varies inversely against the discount rate The fair value of equity securities was estimated based on the fair value of the underlying investment property of the investee company. The valuation was based on discounted cash flow approach and its significant unobservable inputs were consistent with the information as presented above. (ii) Movement in Level 3 Assets Measured at Fair Value The movements of financial and non-financial assets, investment properties, classified under Level 3 have been disclosed in Note 14. (iii) Valuation Policies and Procedures The significant non-financial asset of the Group categorised within Level 3 of the fair value hierarchy is investment properties. Generally, the fair values of investment properties are determined annually by independent professional valuers except for our significant subsidiary, Australand. At Australand, the fair values of the investment properties are determined at least once every two years by independent professional valuers and investment properties that are not independently valued are carried at fair value determined by directors’ valuation. Australand’s investment properties division includes a valuation team (the “Australand Valuation Team”) where each member of this team is professionally qualified and is an accredited property valuer. The Australand Valuation Team performs the underlying valuations that support the directors’ valuation. 209 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 37. FAI R VALUE O F A SSETS AND LI A BI LI TI E S (CO NT’D) (d) Level 3 Fair Value Measurements (cont’d) (iii) Valuation Policies and Procedures (cont’d) The independent professional valuers and Australand Valuation Team (the “Valuers”) are experts who possess the relevant credentials and knowledge on the subject of property valuation, valuation methodologies and FRS 113 fair value measurement guidance to perform the valuation. For valuation performed by the Valuers, the appropriateness of the valuation methodologies and assumptions adopted are reviewed along with the appropriateness and reliability of the inputs (including those developed internally by the Group) used in the valuations. In selecting the appropriate valuation models and inputs to be adopted for each valuation that uses significant non-observable inputs, the Valuers are required to recalibrate the valuation models and inputs to actual market transactions (which may include transactions entered into by the Group with third parties as appropriate) that are relevant to the valuation if such information are reasonably available. For valuations that are sensitive to the unobservable inputs used, the Valuers are required, to the extent practicable to use a minimum of two valuation approaches to allow for cross-checks. Significant changes in fair value measurements from period to period are evaluated for reasonableness. Key drivers of the changes are identified and assessed for reasonableness against relevant information from independent sources, or internal sources if necessary and appropriate. In accordance with the Group’s reporting policies, the valuation process and the results of the independent valuations and directors’ valuation are reviewed at least once a year by the Board Executive Committee and the Audit Committee before the results are presented to the Board of Directors for approval. (e) Fair Value of Financial Instruments by Classes that are not Carried at Fair Value and whose Carrying Amounts are not Reasonable Approximation of Fair Value Other Receivables (Non-Current) and Other Payables (Non-Current) No disclosure of fair value is made for other receivables and other payables as it is not practicable to determine their fair values with sufficient reliability since the balances have no fixed terms of repayment. The Group and the Company do not anticipate that the carrying amounts recorded at the end of the financial year would be significantly different from the values that would eventually be received or settled. Available-for-Sale Financial Assets – Unquoted Equity Investments, at Cost Unquoted equity investments represent ordinary shares that are not quoted on any market and do not have any comparable industry peer that is listed. Fair value information has not been disclosed for these investments carried at cost less impairment because fair value cannot be measured reliably. The Group does not intend to dispose of these investments in the foreseeable future. 210 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 38. CLASSIFICAT ION O F FIN ANC IAL IN STRUM E NTS Set out below is a comparison by category of carrying amounts of all the Group’s and the Company’s financial instruments that are carried in the financial statements. Loans and Receivables $'000 Derivatives used for Hedging $'000 Fair Value through Profit or Loss $'000 Available- for-sale $'000 Liabilities at Amortised Cost $'000 Group Year ended 30 September 2014 Assets Financial assets Trade and other receivables Derivative financial instruments Cash and cash equivalents Liabilities Trade and other payables Derivative financial instruments Loans and borrowings Year ended 30 September 2013 Assets Financial assets Trade and other receivables Derivative financial instruments Cash and cash equivalents Liabilities Trade and other payables Derivative financial instruments Loans and borrowings – 997,102 – 883,604 1,880,706 – – – – – 470,867 – 506,784 977,651 – – – – – – – – – – 8,882 – 8,882 – – – – – – 4,663 – 4,663 – – 31,703 – 31,703 – 6,455 – 6,455 – – 1,478 – 1,478 – 1,628 – 1,628 2,164 – – – 2,164 – – – – – – – – – 1,816,576 – 7,616,375 9,432,951 2,164 – – – 2,164 – – – – – – – – – 2,622,973 – 1,804,508 4,427,481 211 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201438. CLASSIFICAT ION O F FIN ANC IAL IN STRUM E NTS (CO NT’D ) Loans and Receivables $'000 Derivatives used for Hedging $'000 Fair Value through Profit or Loss $'000 Available- for-sale $'000 Liabilities at Amortised Cost $'000 Company Year ended 30 September 2014 Assets Financial assets Trade and other receivables Cash and cash equivalents Derivative financial instruments Liabilities Trade and other payables Derivative financial instruments Year ended 30 September 2013 Assets Financial assets Trade and other receivables Cash and cash equivalents Derivative financial instruments Liabilities Trade and other payables Derivative financial instruments – 3,243,839 86,537 – 3,330,376 – – – – – – – – – 1,036 1,036 – 2,272,479 28,426 – 2,300,905 – – – – – – – – – 2,861 2,861 – – – 254 254 – 5,289 5,289 – – – 1,478 1,478 – – – 2,148 – – – 2,148 – – – – – – – – 766,833 – 766,833 2,148 – – – 2,148 – – – – – – – – 1,264,254 – 1,264,254 212 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201439. CAPI TAL M ANAGE MENT The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 30 September 2014 and 30 September 2013. The Group monitors capital using a gearing ratio, which is net debt divided by total equity, as follows: Fixed deposits, cash and bank balances Loans and borrowings Interest bearing loans due to related companies Net borrowings Total equity Net borrowings over total equity ratio Group 2014 $'000 2013 $'000 883,604 (7,616,375) – (6,732,771) 506,784 (1,804,508) (1,847,259) (3,144,983) 7,087,775 5,478,286 0.95 0.57 Certain entities in the Group are required to comply with certain externally imposed capital requirements in respect of some of their external borrowings, and these have been compiled with during the year. 40. COMMI TM ENTS (a) Capital Commitments Capital and development expenditures contracted for as at the end of the reporting period but not recognised in the financial statements are as follows: Commitments in respect of contracts placed for: – Estimated development costs for properties held for sale – Capital expenditure costs for investment properties – Share of joint ventures’ capital and development expenditure – Others Group 2014 $'000 2013 $'000 1,672,587 861,596 278,410 49,195 2,861,788 2,144,291 788,414 339,445 – 3,272,150 213 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201440. COMMI TM ENTS ( C ON T’D ) (b) Operating Lease Commitments – as Lessee Future minimum rental payable under non-cancellable operating leases at the end of the reporting period is as follows: Within 1 year From 1 year to 5 years After 5 years 2014 $'000 92,326 346,247 1,209,755 1,648,328 Group 2013 $'000 23,012 7,333 – 30,345 Company 2014 $'000 2013 $'000 – – – – – – – – The operating leases do not contain any escalation clauses and do not provide for contingent rents. The lease terms do not contain restrictions on the Group activities concerning dividends, additional debts or entering into other leasing agreements. Rental expense recognised in the profit statement is as follows: Minimum lease payments (c) Operating Lease Commitments – as Lessor Group 2014 $'000 2013 $'000 46,211 25,200 The Group has entered into commercial property leases on its investment properties and properties held for sale. These non-cancellable leases have remaining non-cancellable lease terms of between 2 to 8 years. Future minimum rental receivable under non-cancellable operating leases at the end of the reporting period is as follows: Within 1 year From 1 year to 5 years After 5 years 2014 $'000 290,425 864,212 547,445 1,702,082 Group 2013 $'000 125,114 166,797 63 291,974 Company 2014 $'000 2013 $'000 – – – – – – – – Rental income from investment properties is disclosed in Note 14. Rental income recognised in the profit statement from properties held for sale is as follows: Minimum lease payments 214 Group 2014 $'000 2013 $'000 99,521 102,093 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 41. CONTI NG ENCI ES Financial Guarantee Contracts (i) (ii) As at 30 September 2014, the Company has provided bankers’ guarantees of $75,639,000 (2013: $61,153,000) to unrelated parties in respect of performance contracts on behalf of certain subsidiaries. No liability is expected to arise. The Company has provided an unconditional and irrevocable corporate guarantee for up to $57 million to finance the payment of development charge and construction cost of the New Wing of The Centrepoint by The Management Corporation Strata Title Plan No. 1298 (“MCST 1298”). The corporate guarantee will only be discharged upon full repayment of the loan by the MCST 1298. As at 30 September 2014, the outstanding loan by MCST 1298 is $13,431,000 (2013: $15,431,000). (iii) A wholly-owned subsidiary of the Group has provided RMB 206.4 million (2013: RMB 176.3 million) financial guarantees to banks in China in connection with loans provided by the banks to the subsidiary’s property buyers, covering the period from loan contract date to the property delivery date. 42. SUBS EQUENT EVENT S (i) (ii) On 7 October 2014, FCL Treasury Pte Ltd (“FCLT”), a wholly-owned subsidiary of the Company, announced that FCLT has issued $200 million in aggregate principal amount of 3.95 per cent notes due 2021 (the “Series 4 Notes”) under the $3,000 million Multicurrency Debt Issuance Programme established by FCLT on 21 March 2012. The obligations of FCLT under the Series 4 Notes are guaranteed by the Company. On 24 October 2014, the Group announced that its subsidiaries, FCL Assets Pte Ltd and Frasers (Australia) Pte Ltd, entered into an agreement to acquire the remaining 8% of the issued share capital of Frasers Town Hall Pty Ltd (“FTHPL”) held by Genting (NSW) Pty Ltd, in equal share, to increase their respective shareholding interest in FTHPL to 50% each (the “Acquisition”). The aggregate consideration for the Acquisition is approximately $2,364,000. (iii) On 31 October 2014, the Group completed the compulsory acquisition of the remaining interest to make Australand a wholly-owned subsidiary of the Group. Australand has since been removed from the official list of ASX. (iv) On 12 November 2014, in an Extraordinary General Meeting of the Company, shareholders approved: (a) (b) Retroactively the acquisition of up to 100% of the Australand Securities via an off-market takeover offer for cash consideration; and The proposed issue and placement of Perpetual Capital Securities to TCC Prosperity Limited (“TCCPL”), a wholly-owned corporation of substantial shareholder, TCC Group, subject to a maximum of 50% of the proposed offer of $600 million. 215 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 43. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Company Country of Incorporation and Place of Business: Singapore (a) FCL Property Investments Pte. Ltd. (a) FCL Enterprises Pte. Ltd. (a) Riverside Property Pte. Ltd. (a) FCL Centrepoint Pte. Ltd. (a) Orrick Investments Pte Limited (a) Yishun Development Pte Ltd (a) FCL Alexandra Point Pte. Ltd. (a) Woodlands Complex Pte Ltd (a) Riverside Walk Pte Ltd (a) FCL Ventures Pte. Ltd. (a) FCL Management Services Pte. Ltd. (a) Riverside Investments Pte Ltd (a) Yishun Land Pte Ltd (a) Yishun Property Pte Ltd (a) FCL Tampines Pte. Ltd. (a) FCL Homes Pte. Ltd. (a) FCL Land Pte. Ltd. (a) FCL Assets Pte. Ltd. (a) FCL Estates Pte. Ltd. (a) Frasers Hospitality Pte. Ltd. (a) Frasers (UK) Pte. Ltd. (a) Frasers (Australia) Pte. Ltd. (a) FCL (China) Pte. Ltd. (a) FCL Boon Lay Pte. Ltd. (a) FCL (Fraser) Pte. Ltd. (a) FCL Sophia Pte. Ltd. (a) Frasers Centrepoint Property Management Services Pte. Ltd. (a) FCL Choa Chu Kang Pte. Ltd. (a) FCL Joo Chiat Place Pte. Ltd. (a) Frasers (NZ) Pte. Ltd. (a) FCL China Development Pte. Ltd. (a) FCL Court Pte. Ltd. (a) FCL Lodge Pte. Ltd. (a) FCL Place Pte. Ltd. (a) FCL Rise Pte. Ltd. 216 Property investment Property investment Property investment Investment holding Property investment Property development Property investment Property development Property development Property development Management services Property development Property development Property development Property development Property development Property development Investment holding Property development Investment holding and management services Investment holding Investment holding Investment holding Property development Investment holding Property development Management services Property development Property development Investment holding Investment holding Property development Property development Property development Property development 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 80% 100% 100% 100% 100% 100% 75% 75% 100% 100% 100% 100% 100% 100% 100% 75% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 80% 100% 100% 100% 100% 100% 75% 75% 100% 100% 100% 100% 100% 100% 100% 75% 100% 100% 100% 100% 100% Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Subsidiaries of the Company (cont'd) Country of Incorporation and Place of Business: Singapore (cont'd) (a) Frasers (Thailand) Pte. Ltd. (a) River Valley Properties Pte Ltd (a) Lion (Singapore) Pte. Limited (a) FCL View Pte. Ltd. (a) FCL Tower Pte. Ltd. (a) FCL Loft Pte. Ltd. (a) Frasers Centrepoint Asset Management Ltd. (a) FCL Investments Pte. Ltd. (a) FCL Trust Holdings Pte. Ltd. (a) Frasers Hospitality Investment Holding (Philippines) Pte. Ltd. Investment holding Investment holding and property development Property development Property development Property development Property development Management services Investment holding Investment holding Investment holding Effective Shareholding 2014 2013 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% (a) Frasers Centrepoint Asset Investment holding 100% 100% Management (Malaysia) Pte. Ltd. (a) FCL Trust Holdings (Commercial) Pte. Ltd. (a) Frasers Centrepoint Asset Management (Commercial) Ltd (a) MLP Co Pte. Ltd. (a) SAJV Co Pte. Ltd. (a) FCL Clover Pte. Ltd. (a) FCL Tampines Court Pte. Ltd. (a) FCL Emerald (1) Pte. Ltd. (a) FCL Emerald (2) Pte. Ltd. (a) Opal Star Pte. Ltd. (a) Fraser Suites Jakarta Pte. Ltd. (a) Fraser Residence Orchard Pte. Ltd. (a) Frasers Centrepoint Property Management (Commercial) Pte. Ltd. (a) FCL Management Services (Commercial) Pte. Ltd. (a) FCL Crystal Pte. Ltd. (a) FCL Topaz Pte. Ltd. (a) Frasers Hospitality Investments Melbourne Pte. Ltd. (a) FCL Treasury Pte. Ltd. (a) Frasers Land Pte. Ltd. Investment holding Asset management, fund and property management and related advisory services Investment holding Investment holding Financial services Investment holding Investment holding Investment holding Investment holding Investment holding Operation of serviced apartments Asset management, fund and property management and related advisory services Management services Property development Investment holding Investment holding Financial services Property development 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% 217 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Subsidiaries of the Company (cont'd) Country of Incorporation and Place of Business: Singapore (cont'd) (a) FCL Aquamarine Pte. Ltd. (a) FC Commercial Trustee Pte. Ltd. (a) FCL Amber Pte. Ltd. (a) FC North Gem Trustee Pte. Ltd. (a) Frasers Hospitality Group Pte. Ltd. (a) Frasers Hospitality Asset Management Pte. Ltd. Investment holding Investment holding Trustee-management services Investment holding Trustee-management services Management services (formerly FCL Pearl Pte. Ltd.) (a) Frasers Hospitality Trust Management Pte. Ltd. Business and management (formerly FCL Quartz Pte. Ltd.) (a) Frasers Hospitality Dalian Holding Pte. Ltd. (a) Frasers Hospitality ML Pte. Ltd. (a) Frasers Amethyst Pte. Ltd. consultancy services Investment holding Investment holding Investment holding Country of Incorporation and Place of Business: Hong Kong Effective Shareholding 2014 2013 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% – – – – – – (a) Excellent Esteem Limited Investment holding 100% 100% Subsidiaries of the Group Country of Incorporation and Place of Business: Singapore (a) Frasers Hospitality Management Pte. Ltd. Management consultancy services (a) Frasers Hospitality Property Services Pte. Ltd. Management consultancy services Management consultancy services (a) Frasers Hospitality Changi City Pte. Ltd. Management services (a) FC Hotel Trustee Pte. Ltd. Investment holding (a) Ruby Star Trust Investment holding (a) Sinomax International Pte. Ltd. Investment holding (a) Singapore Logistics Investments Pte. Ltd. Property investment (a) Emerald Hill Developments Pte. Ltd. Property investment (a) River Valley Shopping Centre Pte. Ltd. Property investment (a) River Valley Tower Pte. Ltd. Property investment (a) River Valley Apartments Pte. Ltd. Property development (a) FCL Compassvale Pte. Ltd. Property development (a) FCL Admiralty Pte. Ltd. Property development (a) Punggol Residences Pte. Ltd. Property investment and development (a) Aquamarine Star Trust Property development (a) North Gem Development Pte. Ltd. Property investment and development (a) North Gem Trust Investment holding (a) Frasers Property (Europe) Holdings Pte. Ltd. 100% 100% 100% 100% 100% 100% 80% 100% 100% 100% 100% 80% 70% 80% 100% 100% 100% 80% 100% 100% 100% 100% 100% 100% 80% 100% 100% 100% 100% 80% 70% 80% 100% 100% 100% 80% 218 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont’d) Country of Incorporation and Place of Business: United Kingdom (c) Frasers Projects Ltd (c) The School House (Tunbridge Wells) Limited (c) Frasers General Partner Limited (c) Frasers FB (UK) Group Limited (c) Frasers FB (House) Limited (c) Frasers Homes (UK) Ltd (c) Frasers (Buckswood Grange) Limited (c) Frasers Islington Limited (c) Frasers Islington Properties Limited (c) Frasers (Brown Street) Limited (c) Frasers (Vincent Square) Ltd (c) Frasers Lumiere Leeds Ltd (c) Frasers Management (UK) Ltd (c) Frasers (Riverside Quarter) Ltd (c) Frasers (Maidenhead) Ltd (c) Frasers Imperial Place Ltd (c) Frasers Property (UK) Limited (c) Frasers Property Developments Ltd (c) Frasers Investments (UK) Limited (c) Frasers Ventures Limited (c) Frasers FB (UK) Limited (c) Fairdace Limited (c) Frasers Hospitality (UK) Limited (c) Frasers St Giles Street Management Ltd (c) 39 QGG Management Limited (c) Frasers Hospitality Frankfurt Investment Ltd (c) Fairbriar Residential Investment Property development Property development Property investment Investment holding Investment holding Property development Property development Property development Property development Property development Property development Investment holding Management services Property development Property development Property development Investment holding Investment holding Property investment Property development Property investment Serviced apartments Management consultancy services and serviced apartments Property management Management services Investment holding Investment in residential property Partnership fund Country of Incorporation and Place of Business: Australia (a) Frasers Property Australia Pty Ltd (a) Frasers Property Management Australia Pty Limited (a) Frasers Chandos Pty Limited (a) Frasers Lorne Pty Limited (a) Frasers Mandurah Pty Limited Investment holding Management services Property development Property development Property development 80% 80% 80% 80% 80% 80% 80% 79.2% 79.2% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 100% 100% 100% 100% 100% 100% 75% 75% 75% 75% 56.3% 80% 80% 80% 80% 80% 80% 80% 79.2% 79.2% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 100% 100% 100% 100% 100% 100% 75% 75% 75% 75% 56.3% 219 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014 43. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (a) Frasers Killara Pty Ltd (a) Frasers Morton Pty Ltd (a) Frasers Broadway Pty Ltd (a) Frasers Homes WA Pty Limited (a) Frasers Putney Pty Limited (a) Frasers Central Park Holdings No. 1 Pty Ltd (a) Frasers Central Park Holdings No. 2 Pty Ltd (a) Frasers Brisbane Management Pty Ltd (a) Frasers Brisbane Apartments Pty Ltd Property development Property development Property development Builder Property development Investment holding Investment holding Trustee-management services Management and consultancy services Dormant (a) FCL Bridgepoint Australia Pty Ltd (a) Frasers Hospitality Sydney Investments Pty Ltd Investment holding Investment holding (a) Frasers Sydney ML Hotel Pty Ltd Investment holding Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Holding entity Holding entity Property investment Property investment Property investment Property investment Property investment Property investment Property investment (1)(d) Apartment (Altona No. 2) Trust (1)(d) Apartment (Altona No. 3) Trust (1)(d) Apartment (Berrinba No. 1) Trust (1)(d) Apartment (Collins St No. 1) Trust (1)(d) Apartment (Derrimut No. 1) Trust (1)(d) Apartment (Derrimut No. 2) Trust (1)(d) Apartment (Eastern Creek No. 2) Trust (1)(d) Apartment (Eastern Creek No. 3) Trust (1)(d) Apartment (Eastern Creek No. 4) Trust (1)(d) Apartment (Eastern Creek No. 5) Trust (1)(d) Apartment (Eastern Creek No. 6) Trust (1)(d) Apartment (Inala/Richlands No. 1) Trust (1)(d) Apartment (Keysborough No. 1) Trust (1)(d) Apartment (Keysborough No. 2) Trust (1)(d) Apartment (Keysborough No. 3) Trust (1)(d) Apartment (Keysborough No. 4) Trust (1)(d) Apartment (Northgate No. 1) Trust (1)(d) Apartment (Parkinson No. 1) Trust (1)(d) Apartment (Parkinson No. 2) Trust (1)(d) Apartment (Port Kembla No. 1) Trust (1)(d) Apartment (Truganina No. 1) Trust (1)(d) Apartment (Truganina No. 2) Trust 75% 75% 75% 56.3% 75% 75% 75% 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% 75% 75% 75% 56.3% 75% 75% 75% 100% 100% – – – – – – – – – – – – – – – – – – – – – – – – – 220 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Apartment Altona Toll Trust (1)(d) Apartment Clayton South No. 1 Unit Trust (1)(d) Apartment Erskine Park No. 2 Unit Trust (1)(d) Apartment Logistics Trust (1)(d) Apartment Rhodes F Unit Trust (1)(d) Apartment Rhodes No. 1 Unit Trust (1)(d) Apartment Seven Hills No. 2 Unit Trust (1)(d) Apartment Seven Hills No. 5 Unit Trust (1)(d) Apartment Tullamarine No. 1 Unit Trust (1)(d) Australand C & I Land Holdings (Eastern Creek Stage 4 No. 1) Trust (1)(d) Australand C & I Land Holdings (Keysborough) Trust Property investment Property investment Property investment Investment holding Property investment Property investment Property investment Property investment Property investment Property development Property development (1)(d) Australand C & I Land Holdings (Rowville) Trust (1)(d) Australand C & I Land Holdings Property development Property development (The Ponds No. 1) Trust (1)(d) Australand Cambridge Street Unit Trust (1)(d) Australand Car Park Trust (1)(d) Australand Citta Gold Games Trust (1)(d) Australand Industrial No. 101 Trust (1)(d) Australand Industrial No. 101 Trust (No. 2) (1)(d) Australand Industrial No. 101 Trust (No. 3) (1)(d) Australand Jets Court Unit Trust (No. 1) (1)(d) Australand Jets Court Unit Trust (No. 2) (1)(d) Australand Parkinson Trust (1)(d) Australand Port Melbourne Unit Trust (1)(d) Australand Property Trust (1)(d) Australand Property Trust No. 4 (1)(d) Australand Property Trust No. 5 Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Corporate Property investment Holding entity 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% – – – – – – – – – – – – – – – – – – – – – – – – – – 221 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Australand Residential (Burwood No. 2) Unit Trust Property investment (1)(d) Australand Residential Ashlar Unit Trust Property development (1)(d) Australand Residential Cranbourne Unit Trust Property development (1)(d) Australand Retail JV Trust (1)(d) Australand Retail Trust (1)(d) Australand West Park No. 1 Trust (1)(d) Australand West Park Truganina Trust (1)(d) Australand Wholesale Property Trust Holding entity Holding entity Property development Property development Property investment (1)(d) Australand Wholesale Property Trust No. 2 Investment holding (1)(d) Australand Wholesale Property Trust No. 3 Investment holding (1)(d) AWPT No. 4 Holding Trust (1)(d) AWPT3 Greystanes Holding Trust No. 1 (1)(d) AWPT3 Greystanes Holding Trust No. 2 (1)(d) AWPT4 NSW Holding Trust No. 1 (1)(d) AWPT4 NSW Holding Trust No. 2 (1)(d) AWPT5 Holding Trust No. 3 (1)(d) AWPT5 Holding Trust No. 5 (1)(d) AWPT5 Holding Trust No. 6 (1)(d) AWPT5 Intermediate Trust (1)(d) Berwick Retail Trust (1)(d) Burbridge Investment Trust (1)(d) Burbridge Park Industrial Trust B (1)(d) Burbridge Park Industrial Trust C (1)(d) Burbridge Park Industrial Trust D Investment holding Investment holding Investment holding Investment holding Investment holding Property investment Property investment Property investment Investment holding Property investment Property investment Property investment Property investment Property investment (1)(d) Chatswood Unit Trust Property development 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% – – – – – – – – – – – – – – – – – – – – – – – – – 222 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Eastern Creek Investment Trust No. 2 Property investment (1)(d) Eastern Creek No. 1 Unit Trust Property development (1)(d) Freshwater Holding Trust No. 2 (1)(d) Freshwater Holding Trust No. 5 (1)(d) Freshwater Office Trust No. 2 (1)(d) Freshwater Stage 4 No. 2 Unit Trust (1)(d) Freshwater Stage 4 Unit Trust (1)(d) Greystanes No. 1 Unit Trust (1)(d) Greystanes No. 2 Unit Trust (1)(d) Henry Deane Building Trust (1)(d) Horrie Miller Drive Unit Trust (1)(d) Huntingwood Trust (1)(d) Industrial Project No. 2 Unit Trust (1)(d) Industrial Project No. 3 Unit Trust (1)(d) Mascot No. 1 Unit Trust (1)(d) No. 9 Stradbroke Street Unit Trust (1)(d) Outer Harbour Unit Trust (1)(d) Platinum Street Trust (1)(d) Port Coogee Seabed Unit Trust (1)(d) Queensport Road Unit Trust (1)(d) Rhodes No. 8 Unit Trust (1)(d) Rhodes No. 9 Unit Trust (1)(d) Shettleston Street Trust (1)(d) Smeaton Grange Trust (1)(d) South Park Industrial Trust A (1)(d) South Park Industrial Trust B (1)(d) South Park Investment Trust Investment holding Investment holding Property investment Property development Property development Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property development Property investment Property development Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment 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% – – – – – – – – – – – – – – – – – – – – – – – – – – – 223 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) South Park No. 116 Trust (No. 1) (1)(d) South Park No. 125 Trust (1)(d) South Park No. 2 Unit Trust (1)(d) South Park Unit Trust (1)(d) Stanton Road No. 1 Unit Trust (1)(d) Stanton Road No. 2 Unit Trust (1)(d) The Gateway Building Trust (1)(d) Trade Street Unit Trust Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property investment (1)(d) Trust Project No. 11 Unit Trust Property development (1)(d) Trust Project No. 9 Unit Trust (1)(d) Tullamarine No. 1 Unit Trust (1)(d) Twenty8 Freshwater Place Unit Trust (1)(d) Walter Road Unit Trust (1)(d) West Park Investment Trust No. 2 (1)(d) West Park No. 116 Trust (No. 1) (1)(d) West Park No. 118 Trust (1)(d) Wolli Creek No. 1 Unit Trust (1)(d) Wolli Creek No. 10 Unit Trust (1)(d) Wolli Creek No. 2 Unit Trust (1)(d) Wolli Creek No. 3A Unit Trust (1)(d) Wolli Creek No. 3B Unit Trust (1)(d) Wolli Creek No. 4 Unit Trust (1)(d) Wolli Creek No. 5 Unit Trust (1)(d) Wolli Creek No. 6 Unit Trust (1)(d) Wolli Creek No. 7A Unit Trust (1)(d) Wolli Creek No. 7B Unit Trust (1)(d) Wolli Creek No. 8 Unit Trust (1)(d) Wolli Creek No. 9A Unit Trust (1)(d) Wolli Creek No. 9B Unit Trust (1)(d) Wolli Creek Unit Trust 224 Property investment Property investment Property investment Property investment Property investment Property investment Property investment Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Investment holding 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% – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) AHL (Perth) Pty Limited (1)(d) AHL Centenary Pty Limited (1)(d) AHL Projects Pty Limited (1)(d) AHL Real Estate (Vic) Pty Limited (1)(d) AHL Real Estate Pty Limited (1)(d) Australand Avondale Pty Limited Management services Property development Finance Management services Management services Investment holding (1)(d) Australand Car Park Operations Pty Limited Management services (1)(d) Australand Consolidated Investments Pty Limited Investment holding (1)(d) Australand Constructions Pty Limited Management services (1)(d) Australand Coorparoo Holdings Pty Limited Property development (1)(d) Australand Coorparoo Pty Limited Investment holding (1)(d) Australand Corporation (NSW) Pty Limited Investment holding (1)(d) Australand Corporation (Qld) Pty Ltd Property development (1)(d) Australand Developments (NSW) Pty Limited Investment holding (1)(d) Australand Finance Pty Limited Finance (1)(d) Australand Funds Management Limited Management services (1)(d) Australand HK Company Limited (1)(d) Australand Holdings Limited Management services Property development (1)(d) Australand Industrial Construction Pty Limited Management services (1)(d) Australand Industrial No. 100 Pty Limited Investment holding (1)(d) Australand Industrial No. 101 Pty Limited Investment holding (1)(d) Australand Industrial No. 102 Pty Limited Investment holding (1)(d) Australand Industrial No. 103 Pty Limited Investment holding (1)(d) Australand Industrial No. 105 Pty Limited Investment holding (1)(d) Australand Industrial No. 106 Pty Limited Investment holding (1)(d) Australand Industrial No. 107 Pty Limited Investment holding (1)(d) Australand Industrial No. 110 Pty Limited Investment holding (1)(d) Australand Industrial No. 111 Pty Limited Investment holding (1)(d) Australand Industrial No. 112 Pty Limited Investment holding 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% – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 225 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Australand Industrial No. 113 Pty Limited Investment holding (1)(d) Australand Industrial No. 115 Pty Limited Investment holding (1)(d) Australand Industrial No. 117 Pty Limited Investment holding (1)(d) Australand Industrial No. 118 Pty Limited Investment holding (1)(d) Australand Industrial No. 122 Pty Limited Property development (1)(d) Australand Industrial No. 125 Pty Limited Investment holding (1)(d) Australand Industrial No. 128 Pty Limited Investment holding (1)(d) Australand Industrial No. 129 Pty Limited Investment holding (1)(d) Australand Industrial No. 133 Pty Limited Investment holding (1)(d) Australand Industrial No. 134 Pty Limited Investment holding (1)(d) Australand Industrial No. 137 Pty Limited Investment holding (1)(d) Australand Industrial No. 139 Pty Limited Investment holding (1)(d) Australand Industrial No. 14 Pty Limited Trustee (1)(d) Australand Industrial No. 140 Pty Limited Investment holding (1)(d) Australand Industrial No. 141 Pty Limited Investment holding (1)(d) Australand Industrial No. 145 Pty Limited Investment holding (1)(d) Australand Industrial No. 146 Pty Limited Investment holding (1)(d) Australand Industrial No. 147 Pty Limited Investment holding (1)(d) Australand Industrial No. 148 Pty Limited Investment holding (1)(d) Australand Industrial No. 149 Pty Limited Investment holding (1)(d) Australand Industrial No. 153 Pty Limited Investment holding (1)(d) Australand Industrial No. 154 Pty Limited Investment holding (1)(d) Australand Industrial No. 155 Pty Limited Investment holding (1)(d) Australand Industrial No. 158 Pty Limited Investment holding (1)(d) Australand Industrial No. 16 Pty Limited Property development (1)(d) Australand Industrial No. 160 Pty Limited Investment holding (1)(d) Australand Industrial No. 161 Pty Limited Investment holding (1)(d) Australand Industrial No. 162 Pty Limited Investment holding (1)(d) Australand Industrial No. 163 Pty Limited Investment holding (1)(d) Australand Industrial No. 18 Pty Limited Trustee 226 100% 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% – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Australand Industrial No. 63 Pty Limited Property development (1)(d) Australand Industrial No. 68 Pty Limited Property development (1)(d) Australand Industrial No. 69 Pty Limited Property development (1)(d) Australand Industrial No. 70 Pty Limited Investment holding (1)(d) Australand Industrial No. 72 Pty Limited Investment holding (1)(d) Australand Industrial No. 76 Pty Limited Property development (1)(d) Australand Industrial No. 81 Pty Limited Investment holding (1)(d) Australand Industrial No. 84 Pty Limited Investment holding (1)(d) Australand Industrial No. 85 Pty Limited Investment holding (1)(d) Australand Industrial No. 86 Pty Limited Investment holding (1)(d) Australand Industrial No. 88 Pty Limited Investment holding (1)(d) Australand Industrial No. 89 Pty Limited Investment holding (1)(d) Australand Industrial No. 90 Pty Limited Investment holding (1)(d) Australand Industrial No. 91 Pty Limited Investment holding (1)(d) Australand Industrial No. 92 Pty Limited Investment holding (1)(d) Australand Industrial No. 93 Pty Limited Investment holding (1)(d) Australand Industrial No. 94 Pty Limited Investment holding (1)(d) Australand Industrial No. 96 Pty Limited Investment holding (1)(d) Australand Industrial No. 98 Pty Limited Investment holding (1)(d) Australand Inter Entity Finance Pty Limited (1)(d) Australand Investment Finance Pty Limited Finance Finance (1)(d) Australand Investments Limited Management services (1)(d) Australand Kellyville Partnership Pty Limited Investment holding (1)(d) Australand Land and Housing No. 5 (Hope Island) Pty Limited (1)(d) Australand Land and Housing No. 7 (Hope Island) Pty Limited (1)(d) Australand Land and Housing No. 8 (Hope Island) Pty Limited Property development Property development Property development 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% – – – – – – – – – – – – – – – – – – – – – – – – – – 227 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Australand Management Services Pty Limited Investment holding (1)(d) Australand Northshore Pty Limited (1)(d) Australand Omeo Finance Pty Limited Investment holding Investment holding (1)(d) Australand Property Group Pty Limited Management services (1)(d) Australand Property Holdings Pty Limited Investment holding (1)(d) Australand Property Limited Management services (1)(d) Australand Queensland Constructions Investment holding Pty Limited (1)(d) Australand Residential No. 126 Pty Limited Investment holding (1)(d) Australand Residential No. 130 Pty Limited Investment holding (1)(d) Australand Residential No. 138 Pty Limited Investment holding (1)(d) Australand Residential No. 143 Pty Limited Investment holding (1)(d) Australand Residential No. 150 Pty Limited Investment holding (1)(d) Australand Residential No. 156 Pty Limited Investment holding (1)(d) Australand Residential No. 164 Pty Limited Investment holding (1)(d) Australand Residential No. 165 Pty Limited Investment holding (1)(d) Australand Residential No. 75 Pty Limited Investment holding (1)(d) Australand Residential Project Management Property development Pty Limited (1)(d) Australand Retail Investments Pty Limited Property development (1)(d) Australand Retail Portfolio Pty Limited Property development (1)(d) Australand Valley Part Pty Limited Management services (1)(d) Australand Wholesale Holdings Pty Limited Management services (1)(d) Australand Wholesale Investments (Custodian) Management services Pty Limited (1)(d) AWPT Finance Pty Limited (1)(d) AWPT No. 3 Construction Finance Pty Limited (1)(d) AWPT No. 3 Post Construction Finance Pty Limited Finance Finance Finance (1)(d) Cinamist Pty Limited Property development (1)(d) Clemton Park Development No. 1 Pty Limited Property development (1)(d) Discovery Point Pty Limited Property development 228 100% 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% – – – – – – – – – – – – – – – – – – – – – – – – – – – – Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Australia (cont'd) (1)(d) Interciti Amcliffe Pty Ltd (1)(d) Jacday Pty Limited Property development Investment holding (1)(d) JEM Warehouse Bonds Pty Limited Investment holding (1)(d) Melbourne Apartment Developments Management services Pty Limited (1)(d) Newcastle Guarantee Corporation Property development Pty Limited (1)(d) PDI (Qld) Pty Limited Property development (1)(d) Port Catherine Development Pty Ltd Property development (1)(d) Regency Chatswood Constructions Investment holding Pty Limited (1)(d) T.M. Burke Estates Proprietary Limited Property development (1)(d) Wharf W Pty Limited Investment holding Country of Incorporation and Place of Business: New Zealand (1)(a) Frasers Broadview Limited (1)(a) Frasers Papamoa Limited Property development Property development Country of Incorporation and Place of Business: Philippines (1)(a) Frasers Hospitality Philippines, Inc Management consultancy services (1)(a) Frasers Hospitality Investments Inc. Property investment Country of Incorporation and Place of Business: Thailand 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 75% 67.5% 100% 100% – – – – – – – – – – 75% 67.5% 100% 100% (1)(a) Frasers Hospitality (Thailand) Limited Management consultancy services 100% 100% Country of Incorporation and Place of Business: Japan (b) Frasers Hospitality Japan Kabushiki Kaisha Management consultancy services 100% 100% 229 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: India (a) Frasers Hospitality India Pty Ltd Management consultancy services 100% 100% Country of Incorporation: Jersey, Channel Islands and Place of Business: United Kingdom (c) Frasers (St Giles Street, Edinburgh) Limited Property investment (c) Queensgate Gardens (C.I.) Limited Property investment 100% 100% 100% 100% Country of Incorporation and Place of Business: France (c) Societe de Gestion de Residence La Defense Management services 100% 100% Country of Incorporation and Place of Business: Indonesia (1)(a) PT Frasers Hospitality Investments Indonesia Property investment 100% 100% Country of Incorporation and Place of Business: Vietnam (a) Me Linh Point Limited Property investment 75% 75% Country of Incorporation and Place of Business: China (1)(e) Shanghai Frasers Management Consultancy Co., Ltd (1)(e) Beijing Sin Hua Yan Real Estate Development Co., Ltd Management services 100% 100% Property development 100% 100% (1)(e) Singlong Property Development Property development 100% 100% (Suzhou) Co., Ltd (1)(e) Frasers Property Management (Shanghai) Co., Ltd Management services 100% 100% (1)(e) Chengdu Sino Singapore Southwest Property development 80% 80% Logistics Co., Ltd (1)(e) Frasers Hospitality Management Management consultancy services 100% 100% Co., Ltd, Shanghai (1)(e) Fraser Place (Beijing) Property Management Co., Ltd Management consultancy services 100% 100% (1)(e) Modena Hospitality Management Management consultancy services 51% 51% Co., Ltd. (Shanghai) (1)(e) Beijing Fraser Suites Real Estate Management Co., Ltd Property investment 100% 100% 230 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 2014 43. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Subsidiaries of the Group (cont'd) Country of Incorporation and Place of Business: Hong Kong (e) Ace Goal Limited (e) Extra Strength Limited (e) Forth Carries Limited (e) Forward Plan Limited (e) Summit Park Limited (e) Superway Logistics Investments (Hong Kong) Limited Investment holding Investment holding Investment holding Investment holding Investment holding Investment holding Effective Shareholding 2014 2013 100% 100% 100% 100% 100% 80% 100% 100% 100% 100% 100% 80% (e) Frasers Hospitality (Hong Kong) Limited Management consultancy services 100% 100% Country of Incorporation and Place of Business: Thailand (1)(a) Riverside Homes Development Co., Ltd Property development 69.6% (5) 69.6% (5) Joint Ventures of the Group Country of Incorporation and Place of Business: Singapore (a) FCL Peak Pte. Ltd. (2)(a) Ascendas Frasers Pte. Ltd. (a) Yishun Gold Pte. Ltd. (a) Precious Sand Pte. Ltd. (a) Easthouse Properties Pte. Ltd. (a) Emerald Star Pte. Ltd. (a) Sapphire Star Trust Property development Property development Property development Property development Property development Property development Property investment and development (a) FC Retail Trustee Pte. Ltd. Trustee-management services (a) eCO Properties Pte. Ltd. (a) Quarry Bay Pte. Ltd. (a) WaterVine Homes Pte. Ltd. Property development Property development Property development Country of Incorporation and Place of Business: Malaysia 50% 50% 50% 50% 50% 33.3% 33.3% 33.3% 33.3% 33.3% 40% 50% 50% 50% 50% 50% 33.3% 33.3% 33.3% 33.3% 33.3% 40% (a) Vacaron Company Sdn Bhd Property development 50% 50% Country of Incorporation and Place of Business: United Kingdom (c) GSF Homes Limited Property development (c) Sovereign House Fairbriar Homes Ltd Property development (c) Fairmuir Limited Property development 40% 40% 40% 40% 40% 40% 231 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Joint Ventures of the Group (cont’d) Country of Incorporation and Place of Business: Australia (4)(a) Frasers Central Park Property development 37.5% 37.5% Equity No. 1 Pty Ltd and SH Central Park Development East Pty Ltd (4)(a) Frasers Central Park Property development 37.5% 37.5% Equity No. 2 Pty Ltd and SH Central Park Development West Pty Ltd Australand Group Joint Ventures (1)(d) Australand Apartments No. 6 Pty Limited Property development (1) (d) Port Coogee Finance Pty Limited (1) (d) Australand Residential Trust (1) (d) Berwick Investment Trust (1)(d) Chymont Unit Trust (1)(d) CIP ALZ Gillman Trust (1)(d) CIP ALZ Goulbum Industrial Unit Trust Finance Investment holding Investment holding Investment holding Property development Property development (1)(d) CIP ALZ Horrie Miller Drive Industrial Unit Trust Property development (1)(d) CIP ALZ (MA) Trust (1)(d) CIP ALZ (WA) Unit Trust (1)(d) CIP ALZ (Wellington Road) Unit Trust Property development Property development Property development (1)(d) Commercial & Industrial Property (Mt Waverley) Trust Property development (1)(d) Commercial & Industrial Property (Pinkenba) Trust Property development (1)(d) Commercial & Industrial Property (Port Melbourne) Trust (1)(d) Croydon Development Trust (1)(d) Freshwater Residential Unit Trust (1)(d) Australand North Ryde Trust Property development Property development Investment holding Property development 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% – – – – – – – – – – – – – – – – – 232 Frasers centrepoint limited & subsidiariesNOTES TO THE FINANCIAL STATEMENTSFor tHe Year ended 30 september 201443. SI GNI FICANT S UBSI DI AR IES, J OI NT VE NTU RES A ND ASSOC IATE S (CO NT’D ) Principal Activities Effective Shareholding 2014 2013 Associates of the Group Country of Incorporation and Place of Business: Singapore (a) Frasers Commercial Trust (a) Frasers Centrepoint Trust Real estate investment trust 27.9% 27.9% Real estate investment trust 41% 19% 41% 19% (3)(a) Gemshine Investments (S) Pte Ltd Investment holding Country of Incorporation and Place of Business: Thailand (1)(a) Krungthep Land Public Company Limited Investment holding and property development 40.5% 40.5% Country of Incorporation and Place of Business: Malaysia (1)(e) Hektar Asset Management Sdn Bhd Management services 40% 40% Country of Incorporation and Place of Business: British Virgin Islands (b) Supreme Asia Investments Limited Investment holding 43.3% 43.3% Country of Incorporation and Place of Business: China (1)(e) Shanghai Zhong Jun Property Real Property development 45.2% 45.2% Estate Development Co, Ltd (a) (b) (c) (d) (e) Audited by Ernst & Young in the respective countries Not required to be audited under laws of the country of incorporation Audited by KPMG, Nottingham Audited by PWC, Sydney Audited by other firms Note (1) Accounting year end is 31 December Note (2) Accounting year end is 31 March Note (3) Accounting year end is 30 June Note (4) Unincorporated joint ventures Note (5) Riverside Homes Development Co., Ltd is accounted for as a joint venture as the Group exercises only joint control over the company. 44. AUTH ORIS AT IO N O F FI NAN CIA L S TATEM ENTS The financial statements for the financial year ended 30 September 2014 were authorised for issue in accordance with a resolution of the directors on 12 November 2014. 233 annual report2014NOTES TO THE FINANCIAL STATEMENTSFor tHe Year enDeD 30 SepteMBer 2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S Singapore Alexandra Point Robertson Walk & Fraser Place Robertson Walk The Centrepoint Valley Point A 24-storey office building at 438 Alexandra Road Freehold, lettable area – 18,523 sqm A 10-storey commercial-cum-serviced apartment complex with a 2-storey basement carpark, a 2-storey retail podium and 164 serviced apartment units at Robertson Walk Shopping Centre and Fraser Place Robertson Walk, 11 Unity Street Leasehold (Lease expires year 2840) Lettable area : Retail Serviced apartments Total 9,016 sqm 17,694 sqm 26,710 sqm A 7-storey shopping-cum-residential complex with 2 basement floors at The Centrepoint, 176 Orchard Road Freehold and leasehold (Lease expires year 2078), lettable area – 30,967 sqm A 20-storey commercial-cum-serviced apartment complex with a 5-storey covered carpark, a 5-storey podium block, a 2-storey retail podium and 255 serviced apartment units at Valley Point Shopping Centre/Office Tower and Fraser Suites River Valley, River Valley Road Leasehold (Lease expires year 2876) Lettable area : Retail Office Total 3,699 sqm 16,948 sqm 20,647 sqm One@Changi City Business Park A 9-storey commercial business park building at 1 Changi Business Park Central 1 Leasehold (Lease expires year 2069), lettable area – 61,299 sqm 51 Cuppage Road A 10-storey commercial building at 51 Cuppage Road Leasehold (Lease expires year 2095), lettable area – 25,682 sqm Centrepoint Apartment An apartment unit 112 serviced apartment units in 2 blocks of high rise building at Melbourne, VIC 3000 Freehold, lettable area – 3,801 sqm Australia Fraser Place Melbourne 234 Book Value $’000 289,000 325,000 645,494 295,000 150,000 400,000 1,600 32,993 Frasers centrepoint limited & subsidiaries P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) Australia (cont’d) Capri by Fraser, Brisbane 239 units of hotel residences at 80 Albert St, Brisbane, Australia Freehold, lettable area – 9,468 sqm Australand Group’s Completed Investment Properties A property comprising a warehouse and office at 6 Butu Wargun Drive, Greystanes, NSW Lettable area – 19,218 sqm A property comprising a warehouse facility, two level office and showroom at 21-33 South Park Drive, Dandenong South, VIC Lettable area – 22,106 sqm A car park comprising 267 public car parking spaces with direct access to the Melbourne Freeway network at Freshwater Car Park, Southbank, VIC A property comprising a warehouse and a single storey office at 64 West Park Drive, West Park, Derrimut, VIC Lettable area – 20,337 sqm A property comprising an industrial facility with a warehouse and an attached single level office building at 81-103 South Park Drive, Dandenong South, VIC Lettable area – 10,425 sqm A property comprising a freestanding industrial distribution facility at 8 Butu Wargun Drive, Greystanes, NSW Lettable area – 22,511 sqm A property comprising a distribution facility incorporating a single level office attached to a large warehouse at 468 Boundary Road, West Park, Derrimut, VIC Lettable area – 24,732 sqm A property comprising a large refrigerated warehouse and distribution centre together with a two storey office at 3135 & 3277 Beaudesert Road, Parkinson, QLD Lettable area – 54,245 sqm A property comprising an industrial office and warehouse facility at 98-126 South Park Drive, Dandenong, VIC Lettable area – 21,070 sqm An apartment unit at 138 Ferney Ave, Surfers Paradise, QLD A property comprising an office and warehouse facility at 18-20 Butler Blvd, Burbridge Business Park, Adelaide Airport, SA Lettable area – 6,991 sqm Book Value $’000 61,508 32,424 21,958 17,748 22,185 10,808 35,724 24,574 209,337 24,152 114 9,500 235 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) A property comprising an industrial facility with two separate offices and warehouses at 25 – 29 Jets Court, Melbourne Airport Business Park, Tullamarine, VIC Lettable area – 15,544 sqm A property comprising a warehouse and distribution facility with a single level office at 38-52 Sky Road, Melbourne Airport Business Park, Tullamarine, VIC Lettable area – 46,231 sqm A property comprising a warehouse facility and a freestanding two level office at Spring Valley Business Park, 610 Heatherton Rd, Clayton South, VIC Lettable area – 8,387 sqm A property comprising a warehouse and distribution facility at 44 Cambridge St, Rocklea, QLD Lettable area – 10,923 sqm An office tower at 28 Southbank Blvd, Southbank, VIC Lettable area – 33,993 sqm A property comprising an industrial facility, two level office and ground floor café at 115-121 South Centre Rd, Melb Airport, Tullamarine, VIC Lettable area – 3,085 sqm A property comprising a warehouse distribution facility and a two level office at 28-32 Sky Road East, Melb Airport Bus Park, Tullamarine, VIC Lettable area – 12,086 sqm A property comprising a two storey office and warehouse facility with multiple loading docks at 8 Distribution Place, Seven Hills, NSW Lettable area – 13,189 sqm A property comprising a warehouse facility and a single level office at 1 West Park Dr, Derrimut, VIC Lettable area – 10,078 sqm A property comprising the common facilities including a café, childcare centre, car wash, gym, pool and common parking areas at Rhodes Corp Park, 1 Homebush Bay Drive, Rhodes, NSW Lettable area – 1,053 sqm Book Value $’000 12,742 24,062 28,329 17,634 139,937 6,826 9,670 22,185 9,386 8,817 Australia (cont’d) Australand Group’s Completed Investment Properties (cont’d) 236 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) Australia (cont’d) Australand Group’s Completed Investment Properties (cont’d) A property comprising four industrial units with associated offices at BBP2, 5 Butler Blvd, Adelaide Airport, SA Lettable area – 8,224 sqm A property comprising an office warehouse at 18 Hudswell Road, Perth Airport, WA Lettable area – 20,143 sqm A property comprising an industrial facility with a three level office at 96-106 Link Road, Melbourne Airport Business Park, Tullamarine, VIC Lettable area – 18,598 sqm A property comprising two warehouse and distribution facilities with associated office accommodation at 17-23 Jets Court, Melb Airport Bus Park, Tullamarine, VIC Lettable area – 9,869 sqm A property comprising a two level office and warehouse at 260 Earnshaw Rd, Northgate, QLD Lettable area – 30,779 sqm A property comprising a warehouse facility and associated office at 230-242 Greens Rd & South Park Dr, Dandenong VIC Lettable area – 12,729 sqm A property comprising an office and warehouse facility at BBP4, 20- 24 Butler Blvd, Adelaide Airport, SA Lettable area – 11,197 sqm A property comprising an office and warehouse at Lots 104 & 105 Tom Thumb Road, Port Kembla, NSW Lettable area – 3,283 sqm A property comprising office accommodation and retail amenity at 351-357 Collins St, Melbourne, VIC Lettable area – 32,110 sqm A property comprising a warehouse and associated offices at 99 Station Road, Seven Hills, NSW Lettable area – 10,772 sqm A property comprising two attached warehouses with internal office accommodation at 1 & 15 Sunline Drive, West Park, Derrimut, VIC Lettable area – 26,153 sqm Book Value $’000 8,931 24,176 29,922 8,419 55,975 12,628 11,718 25,598 235,521 17,521 29,125 237 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) Australia (cont’d) Australand Group’s Completed Investment Properties (cont’d) A property comprising two units warehouse and office facility at 144-166 Atlantic Drive, Keysborough, VIC Lettable area – 27,272 sqm A property comprising an industrial warehouse and an attached two level office building at 49-71 Pacific Drive, Keysborough, VIC Lettable area – 25,163 sqm A property comprising office accommodation at Rhodes F, Homebush Bay Drive, Rhodes, NSW Lettable area – 17,650 sqm A property comprising two warehouse and office at 17 Pacific Dr & 170-172 Atlantic Dr, Keysbourough, VIC Lettable area – 30,004 sqm A property comprising a warehouse and office at 30 Flint St & 374 Boundary Rd, Inala, QLD Lettable area – 15,016 sqm A property comprising a warehouse and ancillary office at 4 Kangaroo Ave, Eastern Ck, NSW Lettable area – 15,918 sqm A property comprising three level office accommodation at Building 10, 658 Church St, Richmond, VIC Lettable area – 8,049 sqm A property comprising office complex at 690 Springvale Rd, Mulgrave Corporate Park, Mulgrave, VIC Lettable area – 21,433 sqm An 8-storey office building at Henry Deane Place, 20 Lee St, Sydney, NSW Lettable area – 9,112 sqm A property comprising a warehouse and manufacturing facility at 57-71 Platinum St, Crestmead, QLD Lettable area – 19,299 sqm A property comprising a single level office and warehouse at 5-7 Trade St, Lytton, QLD Lettable area – 14,479 sqm A property comprising an office and temperature controlled warehouse facility at Lot 102 Coghlan Rd, Outer Harbor, SA Lettable area – 6,626 sqm 238 Book Value $’000 34,131 28,954 108,798 34,315 25,371 28,443 43,233 91,016 57,169 30,149 21,844 7,168 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) Australia (cont’d) Australand Group’s Completed Investment Properties (cont’d) A property comprising a warehouse and an attached 2-storey office at 23 Scanlon Drive, Epping, VIC Lettable area – 12,361 sqm A property comprising two freestanding industrial facility at 2 Douglas Street, Port Melbourne, VIC Lettable area – 21,803 sqm A property comprising a warehouse and distribution facility with a single level office at 99 Shettleston St, Rocklea, QLD Lettable area – 15,186 sqm A property comprising a warehouse and production facility with associated office accommodation at 51 Stradbroke St, Heathwood, QLD Lettable area – 14,916 sqm A property comprising a warehouse and 2-storey office component at 227 Walters Road, Arndell Park, NSW Lettable area – 17,733 sqm A property comprising a two level office and warehouse at 8 Stanton Road, Seven Hills, NSW Lettable area – 10,708 sqm An 8-storey building with a terrace area on level seven at 26-30 Lee St, Gateway Building, Sydney, NSW Lettable area – 12,601 sqm A property comprising an industrial facility with full vehicular access and a single level office at 10 Butu Wargun Drive, Greystanes, NSW Lettable area – 25,705 sqm A six level office accommodation and a café at Nestle, Building B, Rhodes, NSW Lettable area – 12,799 sqm A commercial office building with five levels office accommodation at Nestle, Building D, Rhodes, NSW Lettable area – 17,238 sqm An eight level office building including a café at Tower A, 197-201 Coward St, Mascot, NSW Lettable area – 12,700 sqm A property comprising a two level office accommodation, undercover parking and a warehouse at 10 Stanton Road, Seven Hills, NSW Lettable area – 7,065 sqm Book Value $’000 15,075 26,167 22,982 24,233 26,736 17,634 88,741 40,388 77,528 111,495 77,376 13,084 239 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) Australia (cont’d) Australand Group’s Completed Investment Properties (cont’d) A property comprising a single level office component and warehouse at 35 Huntingwood Drive, Huntingwood, NSW Lettable area – 24,967 sqm A property comprising an distribution centre at 80 Hartley Road, Smeaton Grange, NSW Lettable area – 61,281 sqm industrial office, warehouse and A property comprising a ground floor and seven upper levels of office accommodation at Tower B, 197-201 Coward St, Mascot, NSW Lettable area – 10,253 sqm Book Value $’000 41,156 69,684 50,065 An office tower with retail, food and amenity at 2 Southbank Blvd, Southbank, VIC (50% interest) Lettable area – 54,922 sqm 233,229 A property comprising a warehouse with two level office at 63-71 South Park Drive, Dandenong, VIC Lettable area – 13,963 sqm A property comprising a warehouse and office at 47-59 Boundary Road, Carole Park, QLD Lettable area – 13,260 sqm A property comprising a single level office and temperature controlled warehouse at 22-28 Bam Wine Court, Dandenong South Lettable area – 17,606 sqm A property comprising a three level office and warehouse at 2 Wonderland Drive, Eastern Creek, NSW Lettable area – 29,047 sqm A property comprising a detached two level office building and warehouse at 286 Queensport Road, Murarrie, QLD Lettable area – 21,531 sqm 15,359 14,221 21,389 54,534 31,272 240 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED INV EST MEN T PRO P E R T I E S ( CO NT ’ D ) Book Value $’000 Vietnam Me Linh Point China Fraser Suites CBD Philippines Fraser Place Forbes Tower Europe Capri Barcelona A 22-storey retail/office building plus 2 basements at Me Linh Point Tower, 2 Ngo Duc Ke Street, District 1, Ho Chi Minh City Leasehold (Lease expires year 2045), lettable area – 17,549 sqm 50,423 A building comprising residential apartments (3rd to 23rd level) and clubhouse (2nd level) at Fraser Suites CBD Beijing (EEL), 12 Jin Tong Xi Road, Chaoyang District, Beijing Leasehold : Residential (Lease expires year 2073) Clubhouse (Lease expires year 2043) Lettable area – 28,448 sqm 241,574 89 serviced apartment units with 116 car park lots in the East Tower of Fraser Place Forbes Tower, Valero Street, Salcedo Village, Makati City, Manila Freehold, lettable area – 17,046 sqm 35,963 97 serviced apartments at Hotel Apsis Porta Marina, Sancho de Avila, 32-34 08018 Barcelona, Spain Freehold, lettable area – 3,626 sqm Fraser Suites Kensington 69 residential apartments at Fraser Suites Kensington, 75 Stanhope Gardens London SW7 5RN Freehold, lettable area – 6,845 sqm Indonesia Fraser Residence Sudirman 108 serviced apartment units in Fraser Tower of Fraser Residence Sudirman Jakarta, The Peak Sudirman Jakarta, Jl. Setiabudi Raya No. 9, Jakarta Freehold, lettable area – 11,388 sqm 25,372 224,491 42,511 TOTAL COMPLETED INVESTMENT PROPERTIES 5,551,514 241 annual report2014 P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 INV ES TMENT PR OPE RT IES UN DE R C O NST RUCTI ON Singapore Waterway Point Cecil Street Australia Australand Group’s Investment Properties Under Construction A mixed commercial and residential development at Punggol Central/Punggol Walk 331/3% proportionate share of commercial component Leasehold (Lease expires year 2110), gross floor area of 50,398 sqm Book Value $’000 260,668 A commercial development at Cecil Street/ Telok Ayer Street Leasehold (Lease expires year 2112), gross floor area of 77,162 sqm 974,291 A property comprising two attached warehouses with office accommodation at 2-34 Aylesbury Drive, Altona A property comprising two attached warehouses with office accommodation at 70 – 86 Atlantic Drive, Keysborough, VIC A property comprising 3 adjacent warehouse facilities with internal offices at Cnr Sunline & Efficient Drives, Truganina, Derrimut, VIC TOTAL INVESTMENT PROPERTIES UNDER CONSTRUCTION TOTAL PROPERTIES (CLASSIFIED AS INVESTMENT PROPERTIES) P ROPERTY , PLAN T AND EQ UIP MEN T 7,243 12,056 16,559 1,270,817 6,822,331 Book Value $’000 Australia Sofitel Wentworth Sydney A 5-star hotel with 436 hotel rooms at 61-101 Philip Street, Sydney NSW 2000 Freehold, lettable area – 33,589 sqm 227,546 242 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED PR OPE RT IE S H EL D FO R S A L E Singapore Soleil@Sinaran Leasehold land of approximately 12,468 sqm situated at Sinaran Drive. The development has a gross floor area of 44,878 sqm and consists of 417 condominium units. Esparina Residences Leasehold land of approximately 19,000 sqm at Compassvale Bow for the development of 573 executive condominium units of approximately 56,643 sqm of gross floor area for sale. Capri by Fraser Holland Park Flamingo Valley Australia Lumiere Central Park Fraser Suites Perth Queens Riverside Leasehold land of approximately 7,517 sqm situated at Changi Business Park. The development has a gross floor area of 18,975 sqm and consists of 313 hotel rooms and 4 food & beverage outlets. Freehold land of approximately 2,801 sqm at Holland Park for the development of 2 good class bungalows for sale. Freehold land of approximately 31,164 sqm at Siglap Road for the development of 393 condominium units of approximately 43,629 sqm of gross floor area for sale. Freehold land of approximately 3,966 sqm situated at former Regent Theatre, Frontages on George Street, Bathurst & Kent Street, Sydney NSW. The development has a gross floor area of 61,146 sqm and consists of 1 retail podium, 456 residential units, 201 serviced apartments , 3 retail units and 19 commercial suites. Freehold land of approximately 48,000 sqm situated at Broadway, Sydney NSW for a proposed mixed development of approximately 2,519 residential apartment units of approximately 162,529 sqm of gross floor area for sale and commercial space of approximately 50,971 sqm of gross floor area for sale. Freehold land of approximately 11,895 sqm situated at East Perth. The development has a gross floor area of 22,118 sqm and consists of 165 serviced apartments, 5 retail units and 6 commercial office units. Freehold land of approximately 11,895 sqm situated at East Perth for a proposed mixed development comprising approximately 500 private apartment units, 165 serviced apartments and commercial space of a total of approximately 64,854 sqm of gross floor area for sale. Effective Group Interest % 100.0 80.0 50.0 100.0 100.0 80.5 37.5 87.5 87.5 243 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 COM PLETED PR OPE RT IE S H EL D FO R S A L E ( CO NT ’ D ) Australia (cont’d) Putney Hill Freehold land of approximately 113,500 sqm situated at Putney, Sydney NSW for a proposed development comprising 705 apartments and 86 houses of approximately 75,818 sqm of gross floor area for sale. Australand Group’s Completed Properties Held for Sale A property comprising a warehouse and two level office at 20 Thackray Road, Port Melbourne, VIC. The development has a gross floor area of 9,027 sqm. Leasehold land of approximately 7,111 sqm situated at Xi Cheng District, Xin Jie Kou, Beijing. The development has a gross floor area of 28,572 sqm and consists of retail units and offices. Leasehold land of approximately 195,846 sqm situated at Chengdu. Phase 1 and 2 (Office) of the development has a gross floor area of 221,928 sqm and consists of 299 offices, 27 warehouses and 766 car park lots. Leasehold land of approximately 314,501 sqm situated at Gongye Yuan District, Nan Shi Jie Dong, Suzhou. Phase 1a and 1b of the development has a gross floor area of 132,520 sqm and consists of 968 apartment units. Phase 2a and 2b has a gross floor area of 150,218 sqm and consists of 898 apartment units. Freehold land of approximately 40,608 sqm situated at Rama III Road, Bangkok. Phase 1 of the development has a gross floor area of 62,348 sqm and consists of 399 condominium units. Freehold land of approximately 20,531 sqm situated at south bank of River Thames, London. Phase 3A (One and Three Riverside) comprises 121 private apartments, 18 affordable apartments and 12 commercial units. China Crosspoint Chengdu Logistics Hub Baitang One Thailand The Pano United Kingdom Wandsworth 244 Effective Group Interest % 75.0 100.0 100.0 80.0 100.0 49.0 80.0 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 DEV ELOPMENT PRO PERT IES H E LD FOR SA LE Stage of Completion % Estimated Date of Completion Effective Group Interest % Singapore Waterfront Isle Leasehold land (Lease expires year 2108) of approximately 20,800 sqm at Bedok Reservoir Road for the development of 561 residential units and 2 retail units of approximately 52,491 sqm of gross floor area for sale. 81 2nd Quarter 2015 50.0 Boathouse Residences Leasehold land (Lease expires year 2110) of approximately 13,000 sqm at Upper Serangoon View for the development of 493 residential units of approximately 45,501 sqm of gross floor area for sale. 89 2nd Quarter 2015 50.0 Palm Isles Seastrand Watertown eCO Twin Waterfalls Leasehold land (Lease expires year 2110) of approximately 26,818 sqm at Flora Drive for the development of 429 residential units and 1 retail unit of approximately 40,323 sqm of gross floor area for sale. Leasehold land (Lease expires year 2110) of approximately 20,000 sqm at Pasir Ris Link for the development of 473 residential units and 2 retail units of approximately 40,314 sqm of gross floor area for sale. Leasehold land (Lease expires year 2110) of approximately 29,999 sqm at Punggol Central/ Punggol Walk for a mixed commercial and residential residential development. The component of the development comprises 992 residential units of approximately 73,376 sqm of gross floor area for sale. Leasehold land (Lease expires year 2111) of approximately 62,096 sqm at Bedok South Ave 3 for the development of 714 condominium units, 34 units of strata landed houses and 2 retail units of approximately 60,154 sqm of gross floor area for sale. Leasehold land (Lease expires year 2110) of approximately 25,164 sqm at Punggol Walk for the development of 728 executive condominium units of approximately 76,713 sqm of gross floor area for sale. 78 3rd Quarter 2015 100.0 94 1st Quarter 2015 50.0 27 1st Quarter 2017 33.3 32 2nd Quarter 2016 33.3 82 2nd Quarter 2015 80.0 245 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 DEVELOPMEN T PR O PER TIES HEL D FO R SA LE (CO NT’D ) Stage of Completion % Estimated Date of Completion Effective Group Interest % Singapore (cont’d) QBay Residences Twin Fountains Leasehold land (Lease expires year 2111) of approximately 20,071 sqm at Tampines Ave 10 for the development of 630 residential units and 2 retail units of approximately 56,516 sqm of gross floor area for sale. Leasehold land (Lease expires year 2111) of approximately 16,504 sqm at Woodlands Ave 6 (Woodlands Planning Area) for the development of 418 executive condominium units of approximately 45,769 sqm of gross floor area for sale. RiverTrees Residences Leasehold land (Lease expires year 2112) of approximately 14,931 sqm at Lot 4789X Mukim 20 at Fernvale Close for the development of 495 residential units and 1 retail unit of approximately 44,792 sqm of gross floor area for sale. Australia Queens Riverside Freehold land of approximately 11,895 sqm situated at East Perth for a proposed mixed development approximately comprising 500 private apartment units, 165 serviced apartments and commercial space of a total of approximately 64,854 sqm of gross floor area for sale. – Q I – Q II Frasers Landing Freehold land of approximately 550,000 sqm situated at Mandurah, Western Australia for a proposed residential development. Freehold land of approximately 10,000 sqm situated at Broadway, Sydney NSW for a proposed mixed development of approximately 524 residential apartment units of approximately 32,203 sqm of gross floor area for sale and commercial space of approximately 5,200 sqm of gross floor area for sale. Central Park (CUB Site) 246 48 3rd Quarter 2016 33.3 46 2nd Quarter 2016 70.0 6 2nd Quarter 2017 40.0 15 82 1st Quarter 2016 2nd Quarter 2015 – 3rd Quarter 2023 87.5 87.5 56.3 – 4th Quarter 2018 75.0 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 DEVELOPMEN T PR O PER TIES HEL D FO R SA LE (CO NT’D ) Stage of Completion % Estimated Date of Completion Effective Group Interest % Australia (cont’d) Putney Hill Freehold land of approximately 113,500 sqm situated at Putney, Sydney NSW for a proposed development comprising 665 apartments and 126 houses over phases of approximately 75,818 sqm of gross floor area for sale. – Houses – Apartments Port Coogee A residential development of 2,000 lots consisting of 800 land lots and 1,200 medium density townhouses and apartments. 58 22 2nd Quarter 2017 3rd Quarter 2018 75.0 75.0 38 1st Quarter 2023 100.0 Discovery Point Share Works A development of 1,850 apartments comprising a series of 17 buildings. 1 4th Quarter 2018 100.0 Jandakot – Cockburn Central development A apartments. of approximately 800 36 1st Quarter 2020 100.0 Ashlar Golf Course A residential development of approximately 780 medium density dwellings. – 1st Quarter 2021 100.0 Caloundra – Ivadale Lakes Springfield – The Springs Cova – Hope Island Yungabah Northshore – Hamilton Casiana Grove 865 Frank Road A development comprising 650 land lots. 83 3rd Quarter 2015 100.0 A development comprising 275 land lots. 74 1st Quarter 2015 100.0 A development comprising a yield of approximately 570 dwellings, split between 220 land lots and 350 medium density dwellings. 20 3rd Quarter 2021 100.0 A development comprising 165 apartments and 10 residential houses. 41 4th Quarter 2016 100.0 development A apartments and terrace homes. of approximately 660 15 1st Quarter 2020 100.0 A development comprising 680 land lots. 74 1st Quarter 2016 100.0 Lidcombe Village Civil A development comprising 230 dwellings. 64 4th Quarter 2016 100.0 Greenvale A development comprising 660 land lots. 48 1st Quarter 2017 100.0 247 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 DEVELOPMEN T PR OP ERT IES H E LD FO R SA LE (CO NT’D ) Stage of Completion % Estimated Date of Completion Effective Group Interest % Australia (cont’d) Clemton Park A residential development. 21 1st Quarter 2017 Discovery Point Co A development of 1,850 apartments comprising a series of 17 buildings. – 4th Quarter 2016 East Baldivis A residential development. – 3rd Quarter 2021 Lincoln Health Co A development comprising 600 land lots. – 1st Quarter 2020 The Range at Croydon A residential development. 80 4th Quarter 2015 Sunshine A residential development. 82 3rd Quarter 2016 A residential development. 25 1st Quarter 2015 50.0 50.0 50.0 50.0 50.0 50.0 50.0 Leasehold land (Lease expires year 2057) of approximately 195,846 sqm situated at Chengdu for a proposed industrial/commercial development of a total of approximately 542,638 sqm of gross floor area for sale, which is separated into Phase 1 of 161,288 sqm and Phase 2 to 4 of 381,350 sqm. Phase 1 and 2 (Office) of the development were completed. Phase 3 was sold in September 2012. – Phase 2a – Office – Phase 4 – Office Leasehold land (Lease expires year 2074) of approximately 314,501 sqm situated at Gongye Yuan district, Nan Shi Jie Dong, Suzhou for a residential development of a total of approximately 543,700 sqm of gross floor area for sale, which is separated into Phase 1a and 1b of 132,520 sqm and Phase 2a to 3d of 410,785 sqm. Phase 1a, 1b, 2a and 2b of the development were completed. – Baitang One (Phase 3a) – Baitang One (Phase 3b) – Baitang One (Phase 3c) – – 2nd Quarter 2017 4th Quarter 2015 80.0 80.0 – – – 4th Quarter 2015 4th Quarter 2017 4th Quarter 2016 100.0 100.0 100.0 Wallan China Chengdu Logistics Hub Baitang One 248 Frasers centrepoint limited & subsidiariesP A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 DEV ELOPMEN T PR O PER TIES HEL D FO R SA LE (CO NT’D) Stage of Completion % Estimated Date of Completion Effective Group Interest % New Zealand Broadview Coast @ Papamoa United Kingdom Wandsworth Riverside Quarter Freehold land of approximately 13,275 sqm situated at South Island, Queenstown for a proposed development of 43 luxury residential apartments of approximately 8,410 sqm of gross floor area for sale. Freehold land of approximately 271,168 sqm situated at Tauranga, North Island for a proposed development of approximately 303 land lots of approximately 139,906 sqm of lot area for sale. Freehold land of approximately 20,531 sqm situated at south bank of River Thames, London for a proposed residential and commercial development of 512 residential units and ancillary office and retail space of a total of approximately 32,236 sqm of gross floor area for sale for Phase 3 of the Wandsworth Riverside Development. Vauxhall Sky Garolens Freehold land of approximately 1,700 sqm situated at Vauxhall, London. The 36 storey tower development has a gross floor area of approximately 21,000 sqm and consists of 198 private apartments, 41 affordable, with offices and ground floor commercial. Camberwell Green Project Freehold land of approximately 2,310 sqm situated at 1 – 6 Camberwell Green and 307 – 311 Camberwell New Road SE5, London. Brown Street Project Freehold land of approximately 3,157 sqm situated at Brown Street, Glasgow. Baildon Project Freehold land of approximately 5,870 sqm situated at Baildon. – 4th Quarter 2016 75.0 – 1st Quarter 2017 67.5 – 3rd Quarter 2016 80.0 – 3rd Quarter 2016 80.0 – – – – – – 80.0 80.0 80.0 249 annual report2014P A R T I C U L A R S O F G R O U P P R O P E R T I E S A S A T 3 0 S E P T E M B E R 2 0 1 4 D EV ELOPMENT PR OP ERT IES H E LD FO R SAL E ( CO NT ’ D ) Stage of Completion % Estimated Date of Completion Effective Group Interest % Thailand The Pano Peninsular Malaysia Dataran Fraser “Fraser Square” Freehold land of approximately 40,608 sqm situated at Rama III Road, Bangkok, which is separated into Phase 1 of 14,062 sqm and Phase 2 and 3 of 26,546 sqm. Phase 1 of the development was completed. Leasehold land (Lease expires year 2069) of approximately 51,491 sqm situated at Petaling Jaya, Selangor for a proposed mixed development with a total of approximately 179,916 sqm of gross floor area for sale. – Phase 1a – Serviced Apartment & Street Retail – Phase 1b – SOHO – Phase 2 – Boutique Office & Shopping Mall – Phase 3 – Corporate Tower – Phase 4 – Business Hotel – – 49.0 – 4th Quarter 2018 – – – – 2nd Quarter 2019 2nd Quarter 2020 4th Quarter 2019 1st Quarter 2020 50.0 50.0 50.0 50.0 50.0 250 Frasers centrepoint limited & subsidiariesI N T E R E S T E D P E R S O N T R A N S A C T I O N S Particulars of interested person transactions ("IPTs") for the period 9 January 2014 to 30 September 2014 as required under Rule 907 of the SGX Listing Manual. Aggregate value of all Interested Person Transactions ("IPT") during the financial period 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 ("IPT") conducted during the financial period under review under Shareholders' Mandate pursuant to Rule 920 (excluding transactions less than $100,000) $'000 10,257 250,000 652 Nil 1,000 Nil Nil 136,133 15,392 Nil Name of interested person TCC Group of Companies(1) – Acquisition of entities – TCC Prosperity Limited: Placement of perpetual capital securities – Sale of goods and services – Extension of loans Lim Ee Seng, Group Chief Executive Officer – Placement of perpetual capital securities Note: (1) This refers to the companies and entities in the TCC Group, which are controlled by Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi. M ATERI AL C ONT RACTS (R UL E 12 07(8 ) OF THE SGX LI STI NG M A NUAL ) There were no material contracts entered into by the Company or any of its subsidiaries involving the interests of any director or controlling shareholder of the Company during the financial period under review, same as disclosed above and in this Annual Report. 251 annual report2014 S H A R E H O L D I N G S T A T I S T I C S A S A T 1 2 D E C E M B E R 2 0 1 4 Class of Shares Voting Rights – – Ordinary shares One vote per share DIS TRIBUTION O F SH AR EH OLDE R S B Y SI ZE OF SH A RE HOL DI NG S Size of Holding – 999 1 1,000 – 10,000 10,001 – 1,000,000 1,000,001 and above TOTAL No. of Shareholders % No. of Shares % 200 4,430 2,213 24 6,867 2.91 64.51 32.23 0.35 100.00 58,963 21,473,896 126,871,285 2,741,408,428 2,889,812,572 0.00 0.74 4.39 94.87 100.00 TWENT Y L ARGE S T S HA REH O LDER S ( AS SH OW N I N THE R EGI STER OF M EMB ERS A ND D EPOSI TORY R EGIS TER) No. Shareholder's Name DBS Nominees Pte Ltd United Overseas Bank Nominees Pte Ltd InterBev Investment Limited Citibank Nominees Singapore Pte Ltd BNP Paribas Nominees Singapore Pte Ltd DBS Vickers Securities (Singapore) Pte Ltd HSBC (Singapore) Nominees Pte Ltd Raffles Nominees (Pte) Ltd UOB Kay Hian Pte Ltd DBSN Services Pte Ltd Lee Seng Tee Phay Thong Huat Pte Ltd CIMB Securities (Singapore) Pte Ltd DB Nominees (Singapore) Pte Ltd The Titular Roman Catholic Archbishop Of Kuala Lumpur OCBC Securities Private Ltd Maybank Kim Eng Securities Pte Ltd Choo Meileen Chee Swee Cheng & Co Pte Ltd Bank of Singapore Nominees Pte Ltd TOTAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Note: No. of Shares Held 872,629,615 860,975,154 824,847,644 64,006,367 24,148,230 20,651,020 14,140,196 13,469,681 10,812,620 6,413,292 5,000,000 3,598,000 2,938,553 2,667,810 2,013,440 1,933,240 1,830,844 1,812,130 1,693,220 1,385,172 2,736,966,228 %* 30.20 29.79 28.54 2.21 0.84 0.71 0.49 0.47 0.37 0.22 0.17 0.12 0.10 0.09 0.07 0.07 0.06 0.06 0.06 0.05 94.69 * Percentage is based on 2,889,812,572 shares as at 12 December 2014. There are no Treasury Shares as at 12 December 2014. 252 Frasers centrepoint limited & subsidiaries S H A R E H O L D I N G S T A T I S T I C S A S A T 1 2 D E C E M B E R 2 0 1 4 SUBSTANTIAL SH ARE HO LDE RS ( AS S HOWN I N THE REGI STER OF SUB STA NTIA L S HA REHO LDERS) TCC Assets Limited InterBev Investment Limited International Beverage Holdings Limited (1) Thai Beverage Public Company Limited (2) Siriwana Company Limited (3) MM Group Limited (4) Maxtop Management Corp. (4) Risen Mark Enterprise Ltd. (4) Golden Capital (Singapore) Limited (4) Charoen Sirivadhanabhakdi (5) Khunying Wanna Sirivadhanabhakdi (5) Direct Interest Deemed Interest No. of Shares %* No. of Shares %* 1,716,160,124 824,847,644 – – – – – – – – – 59.39 28.54 – – – – – – – – – – – 824,847,644 824,847,644 824,847,644 824,847,644 824,847,644 824,847,644 824,847,644 2,541,007,768 2,541,007,768 – – 28.54 28.54 28.54 28.54 28.54 28.54 28.54 87.93 87.93 To the best of the Company’s knowledge and based on records of the Company as at 12 December 2014, approximately 12%* of the issued shares of the Company are held in the hands of the public and this complies with Rule 723 of the Listing Manual. Notes: * Percentage is based on 2,889,812,572 shares as at 12 December 2014. There are no Treasury Shares as at 12 December 2014. (1) International Beverage Holdings Limited (“IBHL”) holds a 100% direct interest in InterBev Investment Limited (“IBIL”) and is therefore deemed to be interested in all of the shares of Frasers Centrepoint Limited (“FCL”) in which IBIL has an interest. (2) Thai Beverage Public Company Limited (“ThaiBev”) holds a 100% direct interest in IBHL, which in turn holds a 100% direct interest in IBIL. ThaiBev is therefore deemed to be interested in all of the shares of FCL in which IBIL has an interest. (3) Siriwana Company Limited holds an approximately 45.27% direct interest in ThaiBev; - - ThaiBev holds a 100% direct interest in IBHL; and IBHL holds a 100% direct interest in IBIL. Siriwana Company Limited is therefore deemed to be interested in all of the shares of FCL in which IBIL has an interest. (4) MM Group Limited (“MM Group”) holds a 100% direct interest in each of Maxtop Management Corp. (“Maxtop”), Risen Mark Enterprise Ltd. (“RM”) and Golden Capital (Singapore) Limited (“GC”); - Maxtop holds a 17.23% direct interest in ThaiBev; - RM holds a 3.32% direct interest in ThaiBev; - GC holds a 0.06% direct interest in ThaiBev; - - ThaiBev holds a 100% direct interest in IBHL; and IBHL holds a 100% direct interest in IBIL. MM Group is therefore deemed to be interested in all of the shares of FCL in which IBIL has an interest. (5) Each of Charoen Sirivadhanabhakdi and his spouse, Khunying Wanna Sirivadhanabhakdi, owns 50% of the issued and paid-up share capital of TCC Assets Limited (“TCCA”), and is therefore deemed to be interested in all of the shares of FCL in which TCCA has an interest. Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi also jointly hold: - - a 51% direct interest in Siriwana Company Limited, which in turn holds an approximate 45.27% direct interest in ThaiBev; and a 100% direct interest in MM Group. MM Group holds a 100% direct interest in each of Maxtop, RM and GC. Maxtop holds a 17.23% direct interest in ThaiBev; RM holds a 3.32% direct interest in ThaiBev; and GC holds a 0.06% direct interest in ThaiBev. ThaiBev holds a 100% direct interest in IBHL, which in turn holds a 100% direct interest in IBIL. Each of Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi is therefore deemed to be interested in all of the shares of FCL in which IBIL has an interest. 253 annual report2014 N O T I C E O F A N N U A L G E N E R A L M E E T I N G The admission and listing of Frasers Centrepoint Limited on the Singapore Exchange Securities Trading Limited was sponsored by DBS Bank Ltd. as the Sole Issue Manager. DBS Bank Ltd., United Overseas Bank Limited and Morgan Stanley Asia (Singapore) Pte. were the Joint Financial Advisers for the listing of Frasers Centrepoint Limited. DBS Bank Ltd., United Overseas Bank Limited and Morgan Stanley Asia (Singapore) Pte. assume no responsibility for the contents of this Notice. FRASERS CENTREPOINT LIMITED (Incorporated in the Republic of Singapore) (Company Registration No. 196300440G) NOTICE OF ANNUAL GENERAL MEETING : Friday, 30 January 2015 Date : Ballrooms II and III, Level 2, InterContinental Singapore, 80 Middle Road, Singapore 188966 Place NOTICE IS HEREBY GIVEN that the 51st Annual General Meeting of FRASERS CENTREPOINT LIMITED (the “Company”) will be held at Ballrooms II and III, Level 2, InterContinental Singapore, 80 Middle Road, Singapore 188966 on Friday, 30 January 2015 at 2.00 p.m. for the following purposes: ROUTI NE BUS INE SS (1) (2) (3) To receive and adopt the report of the Directors and audited financial statements for the year ended 30 September 2014 and the auditors’ report thereon. To approve a final tax-exempt (one-tier) dividend of 6.2 cents per share in respect of the year ended 30 September 2014. To pass the following resolutions on the recommendation of the Nominating Committee and endorsement of the Board of Directors in respect of appointment of Directors1: (a) “That pursuant to Section 153(6) of the Companies Act, Cap. 50, Mr Charoen Sirivadhanabhakdi be and is hereby re-appointed as a Director of the Company, to hold office from the date of this Annual General Meeting until the next Annual General Meeting of the Company.” Subject to his re-appointment, Mr Charoen will be re-appointed as Chairman of the Board of Directors and Chairman of the Board Executive Committee. (b) “That pursuant to Section 153(6) of the Companies Act, Cap. 50, Khunying Wanna Sirivadhanabhakdi be and is hereby re-appointed as a Director of the Company, to hold office from the date of this Annual General Meeting until the next Annual General Meeting of the Company.” Subject to her re-appointment, Khunying Wanna will be re-appointed as Vice Chairman of the Board of Directors. (c) “That Mr Wee Joo Yeow, who will cease to hold office pursuant to Article 97 of the Articles of Association of the Company and who, being eligible, has offered himself for re-election, be and is hereby re-appointed as a Director of the Company.” Subject to his re-appointment, Mr Wee, who is considered an independent Director, will be re-appointed as a Member of the Board Executive Committee and a Member of the Audit Committee. 1 Detailed information on the Directors who are proposed to be re-appointed can be found under “Board of Directors” and “Corporate Governance” in the Company’s Annual Report 2014. 254 Frasers centrepoint limited & subsidiaries N O T I C E O F A N N U A L G E N E R A L M E E T I N G (d) “That Mr Charles Mak Ming Ying, who will retire by rotation pursuant to Article 91 of the Articles of Association of the Company and who, being eligible, has offered himself for re-election, be and is hereby re-appointed as a Director of the Company.” Subject to his re-appointment, Mr Mak, who is considered an independent Director, will be re-appointed as Vice Chairman of the Board Executive Committee, Chairman of the Audit Committee, a Member of the Risk Management Committee and a Member of the Remuneration Committee. (e) “That Mr Philip Eng Heng Nee, who will retire by rotation pursuant to Article 91 of the Articles of Association of the Company and who, being eligible, has offered himself for re-election, be and is hereby re-appointed as a Director of the Company.” Subject to his re-appointment, Mr Eng, who is considered an independent Director, will be re-appointed as Chairman of the Remuneration Committee and a Member of the Audit Committee. (f) “That Mr Weerawong Chittmittrapap, who will retire by rotation pursuant to Article 91 of the Articles of Association of the Company and who, being eligible, has offered himself for re-election, be and is hereby re-appointed as a Director of the Company.” Subject to his re-appointment, Mr Chittmittrapap, who is considered an independent Director, will be re-appointed as Chairman of the Nominating Committee and a Member of the Risk Management Committee. (4) (5) To approve Directors’ fees of up to S$2,000,000 payable by the Company for the year ending 30 September 2015 (last year: up to S$1,453,000). To re-appoint Ernst & Young LLP as the Company’s auditors for the ensuing year and to authorise the Directors to fix their remuneration. SPECI AL BUSINESS To consider and, if thought fit, to pass the following Ordinary Resolutions, with or without any modifications: (6) “That authority be and is hereby given to the Directors of the Company to: (a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and (b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force, 255 annual report2014 N O T I C E O F A N N U A L G E N E R A L M E E T I N G provided that: (1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50% of the total number of issued shares in the capital of the Company, excluding treasury shares (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed 20% of the total number of issued shares in the capital of the Company, excluding treasury shares (as calculated in accordance with sub-paragraph (2) below); (2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited (“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the percentage of issued shares shall be based on the total number of issued shares in the capital of the Company, excluding treasury shares, at the time this Resolution is passed, after adjusting for: (i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and (ii) any subsequent bonus issue, consolidation or subdivision of shares; (3) (4) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.” (7) “That approval be and is hereby given to the Directors of the Company to: (a) (b) grant awards in accordance with the provisions of the FCL Restricted Share Plan (the “Restricted Share Plan”) and/or the FCL Performance Share Plan (the “Performance Share Plan”); and allot and issue such number of ordinary shares in the capital of the Company as may be required to be delivered pursuant to the vesting of awards under the Restricted Share Plan and/or the Performance Share Plan, provided that the aggregate number of new ordinary shares allotted and issued and/or to be allotted and issued, when aggregated with existing ordinary shares in the capital of the Company (including shares held in treasury) delivered and/or to be delivered, pursuant to the Restricted Share Plan and the Performance Share Plan, shall not exceed 10% of the total number of issued ordinary shares in the capital of the Company, excluding treasury shares, from time to time.” 256 Frasers centrepoint limited & subsidiaries N O T I C E O F A N N U A L G E N E R A L M E E T I N G (8) “That: (a) approval be and is hereby given, for the purposes of Chapter 9 of the Listing Manual (“Chapter 9”) of the Singapore Exchange Securities Trading Limited, for the Company, its subsidiaries and associated companies that are considered to be “entities at risk” (as that term is used in Chapter 9), or any of them, to enter into any of the transactions falling within the types of Mandated Transactions (as described in Appendix A to the Letter to Shareholders dated 9 January 2015 (the “Letter to Shareholders”)), with any party who is of the class of Mandated Interested Persons described in Appendix A to the Letter to Shareholders, provided that such transactions are carried out on normal commercial terms and in accordance with the review procedures for Mandated Transactions (the “IPT Mandate”); (b) (c) the IPT Mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company; and the Company and any Director of the Company be and is hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Company or, as the case may be, such Director of the Company may consider expedient or necessary or in the interests of the Company to give effect to this Resolution.” OTH ER BUS INESS (9) To transact any other business which may properly be brought forward. By Order of the Board Piya Treruangrachada Company Secretary Singapore, 9 January 2015 A member of the Company entitled to attend the meeting and vote is entitled to appoint not more than two proxies to attend and vote instead of him; a proxy need not be a member of the Company. Where a member of the Company appoints more than one proxy, he shall specify the proportion of his shareholdings to be represented by each proxy. The instrument appointing a proxy or proxies (a form is enclosed) must be deposited with the Company Secretary at the registered office not less than 48 hours before the time appointed for holding the meeting. 257 annual report2014N O T I C E O F A N N U A L G E N E R A L M E E T I N G Explanatory Notes: (a) The Ordinary Resolution proposed in item (6) above is to authorise the Directors of the Company from the date of the Annual General Meeting until the next Annual General Meeting to issue shares and/or make or grant instruments that might require shares to be issued, and to issue shares in pursuance of such instruments, up to a limit of 50% of the total number of issued shares in the capital of the Company, excluding treasury shares, with a sub-limit of 20% for issues other than on a pro rata basis, calculated as described in the Resolution. (b) The Ordinary Resolution proposed in item (7) above is to authorise the Directors of the Company to offer and grant awards and to issue ordinary shares in the capital of the Company pursuant to the FCL Restricted Share Plan (the “Restricted Share Plan”) and the FCL Performance Share Plan (the “Performance Share Plan”) provided that the aggregate number of new ordinary shares allotted and issued and/or to be allotted and issued, when aggregated with existing ordinary shares in the capital of the Company (including shares held in treasury) delivered and/or to be delivered, pursuant to the Restricted Share Plan and the Performance Share Plan, shall not exceed 10% of the total number of issued ordinary shares in the capital of the Company, excluding treasury shares, from time to time. (c) The Ordinary Resolution proposed in item (8) above is to renew the mandate to enable the Company, its subsidiaries and associated companies that are considered to be “entities at risk” under Chapter 9 of the Listing Manual, or any of them, to enter into certain interested person transactions with specified classes of interested persons, as described in the Letter to Shareholders dated 9 January 2015. Please refer to the Letter for more details. Personal data privacy: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Annual General Meeting (“AGM”) and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), and (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes. 258 Frasers centrepoint limited & subsidiariesFRA SERS CENTR EPOI NT LIM IT E D (Company Registration No. 196300440G) (Incorporated in Singapore) P R O X Y F O R M A N N U A L G E N E R A L M E E T I N G IMPORTANT CPF Investors 1. For investors who have used their CPF monies to buy Frasers Centrepoint Limited shares, the Annual Report 2014 is forwarded to them at the request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used, or purported to be used, by them. 3. CPF investors who wish to attend the Annual General Meeting as OBSERVERS have to submit their requests through their respective Agent Banks so that their Agent Banks may register, in the required format, with the Company Secretary, Frasers Centrepoint Limited. (Agent Banks: Please see Note 8 on the required format.) Personal Data Privacy By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 9 January 2015. I/We __________________________________________ (Name) _________________________ (NRIC/Passport Number) of _________________________________________________________________________________________ (Address) being a member/members of Frasers Centrepoint Limited (the “Company”), hereby appoint: Name Address NRIC/Passport Number No. of Shares % Proportion of Shareholdings (Note 2) and/or (delete as appropriate) Name Address NRIC/Passport Number No. of Shares % Proportion of Shareholdings (Note 2) or failing him/them, the Chairman of the Annual General Meeting (the “AGM”), as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the AGM of the Company to be held at 2.00 p.m. on Friday, 30 January 2015 at Ballroom II and III, Level 2, InterContinental Singapore, 80 Middle Road, Singapore 188966, and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the AGM as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies may vote or abstain from voting at his/their discretion, as he/they may on any other matter arising at the AGM. NOTE: The Chairman of the AGM will be exercising his right under Article 61(B)(a) of the Articles of Association of the Company to demand a poll in respect of the resolutions to be put to the vote at the AGM and at any adjournment thereof. Accordingly, such resolutions at the AGM will be voted on by way of a poll. No. of Votes For* No. of Votes Against* NO. RESOLUTIONS RELATING TO: To re-appoint Director: Mr Charoen Sirivadhanabhakdi To re-appoint Director: Khunying Wanna Sirivadhanabhakdi To re-appoint Director: Mr Wee Joo Yeow To re-appoint Director: Mr Charles Mak Ming Ying To re-appoint Director: Mr Philip Eng Heng Nee To re-appoint Director: Mr Weerawong Chittmittrapap ROUTINE BUSINESS To receive and adopt the report of the Directors and audited financial statements for the year ended 30 September 2014 and the auditors’ report thereon. To approve a final tax-exempt (one-tier) dividend of 6.2 cents per share in respect of the year ended 30 September 2014. (a) (b) (c) (d) (e) (f) To approve Directors’ fees of up to S$2,000,000 payable by the Company for the year ending 30 September 2015 (last year: up to S$1,453,000). To re-appoint Ernst & Young LLP as the Company’s auditors for the ensuing year and to authorise the Directors to fix their remuneration. SPECIAL BUSINESS To authorise Directors to issue shares and to make or grant convertible instruments. To authorise Directors to grant awards and to allot and issue shares pursuant to the FCL Restricted Share Plan and/or the FCL Performance Share Plan. To approve the proposed renewal of the mandate for interested person transactions. OTHER BUSINESS To transact any other business which may properly be brought forward. 1. 2. 3. 4. 5. 6. 7. 8. 9. * If you wish to exercise all your votes “For” or “Against” the relevant resolution, please tick (ü) within the relevant box provided. Alternatively, if you wish to exercise your votes both “For” and “Against” the relevant resolution, please indicate the number of Shares in the boxes provided. Dated this ______ day of ____________________ 2015. Total Number of Shares held (Note 4) Signature(s) of Member(s) or Common Seal IMPORTANT: PLEASE READ NOTES OVERLEAF fold and seal here NOTES TO PROXY FORM: 1. A member of the Company entitled to attend the meeting and vote is entitled to appoint one or two proxies to attend and vote instead of him. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be deposited with the Company Secretary at the registered office not less than 48 hours before the time appointed for holding the meeting. 2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. 3. Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under this instrument of proxy, to the meeting. 4. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and registered in his name in the Register of Members of the Company, he should insert the number of shares entered against his name in the Depository Register and registered in his name in the Register of Members. If no number is inserted, this form of proxy will be deemed to relate to all shares held by the member. 5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer. 6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 7. The Company shall be entitled to reject a Proxy Form which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on and/or attached to the Proxy Form. In addition, in the case of a member whose shares are entered in the Depository Register, the Company may reject a Proxy Form if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certified by The Central Depository (Pte) Limited to the Company. 8. Agent Banks acting on the request of CPF investors who wish to attend the meeting as Observers are required to submit in writing, a list with details of the investors’ name, NRIC/Passport numbers, addresses and numbers of shares held. The list, signed by an authorised signatory of the Agent Bank, should reach the Company Secretary, at the registered office of the Company not later than 48 hours before the time appointed for holding the meeting. Affix Postage Stamp THE COMPANY SECRETARY FRASERS CENTREPOINT LIMITED #21-00 Alexandra Point 438 Alexandra Road Singapore 119958 fold here fold here A NEW LEVEL OF GROWTH ANNUAL REPORT 2014 A N E W L E V E L O F G R O W T H F R A S E R S C E N T R E P O I N T L I M I T E D A N N U A L R E P O R T 2 0 1 4 FRASERS CENTRE PO INT LIMITE D C o m p a n y R e g i s t r a t i o n N u m b e r : 1 9 6 3 0 0 4 4 0 G 438 Alexandra Road #21-00 Alexandra Point Singapore 119958 Phone: +65 6276 4882 +65 6276 6328 Fax: fraserscen trepo int.com 

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