Further Stronger

further stronger

Mapletree Investments Pte Ltd | Annual Report 2013/2014 Key Performance Targets FY2009/2010 - FY2013/2014

Mapletree challenged itself to achieve six growth targets meeting the S$200 million target it set for itself, while by FY13/14, and successfully turned in commendable EBIT + SOA1 grew from S$337.3 million five years ago results as it played to its strengths as an Asia-focused to S$472.0 million. real estate developer, investor and capital manager. Average return on invested equity (ROIE) for the five- In five years, the Group expanded assets under year period came in high at 14.1% – above the 10% management (AUM) to S$24.6 billion, hitting the upper minimum rate the Group wanted to achieve. Mapletree range of the S$20-25 billion growth target set. An asset- also realised a NAV CAGR2 of 11.4% in five years. Going light strategy further helped Mapletree to meet the goal forward, Mapletree is confident that it will continue to of managing as opposed to directly owning more than strengthen its earnings base and build recurring income half of the AUM. Fee income grew to S$203.2 million – to deliver consistent and high returns.

AVERAGE ROIE (From FY09/10) 29.4 14.1% 14.6 ROIE 12.0 6.4% (%) 8.0 11.9 11.4% 11.0 11.4 (From FY09/10) NAV CAGR (%) 9.2 664.4 519.5 S$472.0M EBIT + SOA 426.8 S$203.2M 337.3 (S$M) 188.1 134.3 FEE 124.2 INCOME 80.5 S$6,381M (S$M) 5,020 8,450 S$18,224M 16,744 7,519

OWNED 6,863 ASSETS 11,401 (S$M)

7,903

MANAGED 6,076 ASSETS (S$M)

FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$12,939M S$15,422M S$19,851M S$21,764M S$24,605M

1 Earnings before interest and taxes including share of profits of associated companies and joint ventures, and share of associates gain on disposal 2 Net asset value compounded annual growth rate. NAV adjusted for dividends distributed to shareholder and calculated excluding non-controlling interests and perpetual securities and with NAV as of 31 March 2009 as starting base further stronger

Five years ago, we established a set of performance targets focused on growing key areas of our business. At the end of FY13/14, we have made good progress, having achieved significant scale, strong earnings and high returns. The successful implementation of our asset-light strategy has also seen us build a comprehensive range of real estate investment products. As we enter a new five-year cycle, whether it be in our roles as developer, capital manager or investor, we remain committed to furthering our growth and becoming a stronger business.

Contents

1 16 60 further, stronger Interview with the Group CEO Investment Activities and Fund Management 2 20 better, faster Board of Directors 64 Sustainability – Corporate 4 24 Social Responsibility, deeper, broader Group Senior Management Corporate Governance, Risk Management, and 6 28 Human Resource brighter, greener Highlights of the Year 76 8 32 Property Portfolio Corporate Overview Financial Review 79

10 45 Awards and Accolades Five-Year Business Plan Corporate Liquidity and Financial Resources 81 11 Financial Statements Development Highlight 48 Operations Review 156 12 Our Offices Message from the Chairman

Clothing sponsored by ZARA at VivoCity Singapore on the cover and pages 2-3 and 4-5 better faster

We have achieved better growth at a faster pace, backed by a stronger balance sheet and solid fundamentals. With a keen eye for good opportunities, our experienced team and their astute decisions have allowed Mapletree to close deals and create funds more quickly, and build investor confidence.

Key Performance Targets (as at 31 March 2014)

Average ROIE NAV CAGR FY09/10 - FY13/14 FY09/10 - FY13/14 14.1% 11.4%

EBIT + SOA Fee Income

S$472.0million S$203.2million

aum AUM Ratio Managed vs Owned Assets

S$24.6billion 2.9:1 deeper broader

We have expanded our geographical footprint, venturing into new markets while deepening our presence in the places we are already in. As a result, we have a broad range of real estate assets that we develop and manage across the region which includes office, retail, logistics, industrial and residential developments, as well as serviced apartments.

ASSETS UNDER MANAGEMENT (S$ million)

SOUTH KOREA S$327M JAPAN S$1,694M

CHINA S$3,303M

INDIA S$63M HONG KONG SAR S$5,285M

VIETNAM S$520M

MALAYSIA S$414M

SINGAPORE S$12,999M brighter greener

The focus on growth extends to our corporate social responsibility (CSR) initiatives. We have intensified our commitment to the communities within markets we operate in by providing education and healthcare assistance to the underprivileged. A lot of care is also taken to enrich the communities by building environmentally sustainable developments and supporting local arts.

Mapletree Business City, A Healthy Workplace Ecosystem 1st in Singapore

Mapletree’s eco-friendly buildings’ annual energy savings is equivalent to providing electricity to 6,000 households

Through education and healthcare, Mapletree has impacted, from 2011 to 2013, 8,000 lives 8 Mapletree Investments Pte Ltd Annual Report 2013/2014 Corporate Overview 9 Corporate Overview Going Further

Assets Under Management (AUM) by Geography Headquartered in Singapore, Mapletree Since transforming its business model and asset classes such as office, logistics, Investments Pte Ltd (Mapletree) is a leading setting a five-year business plan to scale up industrial, residential and serviced apartments, real estate company established in investing significantly from FY09/10, Mapletree has retail/lifestyle and mixed-use. in Asian real estate markets with good growth been striving to go further and grow stronger SOUTH KOREA S$327 million potential. Combining its key strengths as a as the Group pursues value across a spectrum At the same time, Mapletree has been JAPAN S$1,694 million real estate developer, investor and capital of assets in the real estate business. Today, broadening its range of capital management manager, Mapletree has built a track record Mapletree has an operating presence in seven products, which now consists of four CHINA S$3,303 million of award-winning projects as well as for countries across Asia with assets under Singapore-listed real estate investment trusts consistently delivering high returns to its management (AUM) of S$24.6 billion as at (REITs) and five private real estate funds, investors through a diversified portfolio. 31 March 2014. The owned and managed with a total managed AUM of S$18.2 billion. INDIA S$63 million HONG KONG SAR S$5,285 million assets extend across different real estate

Our Growth Platforms VIETNAM S$520 million

Singapore Commercial Singapore Industrial Logistics MALAYSIA S$414 million

SINGAPORE S$12,999 million

Growing Stronger

Developer/owner/manager of Developer/owner/manager of Developer/owner/manager of Five-Year AUM Growth primarily commercial properties industrial properties in Singapore logistics properties in Asia 24,605 (and certain industrial and business 25,000 FY13/14 park properties) in Singapore Capital management platform Capital management platform Singapore-listed REIT: Singapore-listed REIT: 21,764 Capital management platform • Mapletree Industrial Trust (MIT) • Mapletree Logistics Trust (MLT) S$24,605 million Singapore-listed REIT: 19,851 • Mapletree Commercial Trust (MCT) 20,000

China and India North Asia South East Asia 15,422

15,000 12,939

10,000 Singapore Vietnam

Developer/owner/manager of Developer/owner/manager of Developer/owner/manager of Hong Kong SAR South Korea properties in China and India properties in Hong Kong SAR, South Korea, properties in South East Asia Japan and other markets Capital management platform Capital management platform China India Private real estate funds: Capital management platform Private real estate funds: 5,000 • Mapletree India China Fund (MIC Fund) Singapore-listed REIT: • CIMB-Mapletree Real Estate Fund 1 Japan Indonesia • Mapletree China Opportunity Fund II • Mapletree Greater China Commercial Trust (CMREF1) (MCOF II) (MGCCT) • CIMB-Mapletree Real Estate Fund 2 Shariah Malaysia (CMREF2 Shariah) • Mapletree Industrial Fund (MIF) 0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 10 11 Five -Year Development Business Plan Highlight

The close of FY13/14 caps the five-year creates a sustainable and capital efficient markets. This expansion in geographical and strategic plan that Mapletree put in place at business model. sector focus will enable Mapletree to seed the end of FY08/09. By adopting a business and syndicate more high-growth private model that integrates three complementary As a result, the Group has scaled up funds and income-yielding REITs, in turn roles: a real estate developer, an investor significantly and at the same time delivered generating higher EBIT + SOA and fee and a capital manager, Mapletree’s business superior returns through its suite of capital income contributions, and increasing strategy is to be asset-light and maximise management platforms. Mapletree currently Mapletree’s recurring profit after tax and efficiencies through capital management and manages four Singapore-listed REITs and minority intrests (PATMI). redeployment of funds. To this end, Mapletree five private real estate funds as at the end of adopted a well-balanced set of indicators FY13/14. While the last five years saw Mapletree build comprising six decisive targets to further its regional operations and network, the next propel and strengthen its business. In five years, Mapletree’s assets under five will see this scale up accompanied by management (AUM) doubled to S$24.6 billion, higher recurring income that will mitigate Mapletree continually focuses on leveraging with 74% being third-party AUM. The Group’s earnings volatility. While featuring the same set its core competencies in real estate earnings base also expanded to include a of performance targets, Mapletree’s next stage development, and applies astute investment sizable S$472.0 million in EBIT + SOA1, and of growth will involve greater emphasis on and capital management strategies to drive fee income of S$203.2 million. Importantly, average ROIE and NAV CAGR to ensure high value for investors. By realising returns in the Mapletree delivered a strong five-year average and consistent returns. form of recurring income from its private funds return on invested equity (ROIE) of 14.1% and and real estate investment trusts (REITS) and 11.4% NAV CAGR2. The business objective of the Mapletree Group injecting into them its substantial portfolio of remains unchanged: to achieve strong, acquisitions and developments, Mapletree Going forward, the Group will further sustainable returns (average ROIE and NAV is able to redeploy proceeds back into its diversify its risks and broaden its markets CAGR), a high quality and stable earnings business and fund new investments. This and real estate sectors while managing its base (EBIT + SOA and fee income), and a concentration in Singapore and select Asian substantial scale of operations (AUM). Artist impression of MBC II Key Performance Indicators (starting FY09/10) MBC II building specifications and amenities that Complementing the existing state-of-the-art are operationally cost-efficient. MBC II aims business facilities and lifestyle amenities Alexandra Precinct, Singapore New Targets to serve this demand with Grade-A office already at the current MBC, MBC II will house (FY14/15-FY18/19) AVERAGE ROIE specifications and large, column-free floor sports and recreational facilities such as (From FY09/10) plates. With floor plates potentially reaching basketball courts, futsal courts and jogging 29.4 Mapletree unveiled redevelopment plans 14.1% 10% - 15% above 9,300 square metres (sqm) (approx. tracks, to provide more amenities that offer a (ﬁve-year) for The Comtech, which will form the next 14.6 100,000 square feet), the development allows healthy workplace environment. ROIE 12.0 6.4% phase of Mapletree Business City (MBC) – (%) 8.0 for efficient space planning. MBC II’s high 11.4% 10% - 15% one of the Group’s flagship developments. 11.9 11.4 (From FY09/10) (ﬁve-year) 11.0 The new phase, MBC II, is strategically floor-to-ceiling height of 3.2 metres will also Attesting to Mapletree’s commitment to NAV CAGR located in the up and coming growth corridor allow for more natural light in the interior space. building sustainability, the planned MBC II (%) 9.2 664.4 3 has been awarded the Singapore Building 519.5 S$472.0M S$800M - S$1.2B of Singapore’s Southern Waterfront. With EBIT + SOA 426.8 S$203.2M S$350M - S$500M 337.3 The completed MBC II will offer about and Construction Authority’s Green Mark (S$M) 188.1 (cumulative >$1.5B) excellent connectivity via major expressways 134.3 106,000 sqm (approx. 1.15 million square Platinum Award. It has also obtained the FEE 124.2 and the Circle MRT Line, the development INCOME 80.5 S$6,381M is about a 15-minute drive from the Central feet) of net lettable area in a high-rise precertification for Leadership in Energy and (S$M) 5,020 Business District (CBD). tower, which will terrace down to lower Environmental Design (LEED) for Core and 8,450 > 3:1 five-, six- and eight-storey blocks. With an Shell Development (Gold Level) from the U.S. 16,744 S$18,224M AUM Ratio unprecedented 30 storeys, MBC II will be Green Building Council. The environmentally OWNED 7,519 (Managed vs Owned assets) The success of the current MBC in attracting ASSETS 6,863 11,401 premium tenants, both multinational the tallest business park in Singapore. The friendly building infrastructure and features (S$M) corporations and financial institutions, has landmark tower will offer commanding views will translate into user benefits and cost 7,903 MANAGED anchored Alexandra Precinct as a thriving of the sea to the South and the surrounding savings for tenants. ASSETS 6,076 greenery of the Southern Ridges, including (S$M) business hub. The locality is also recognised as a commercial micro-market in the Southern Labrador Park and HortPark. To blend in MBC II is expected to be completed in with the surrounding greenery, an extensive 2016 and it will enhance the vibrancy of FY09/10 FY10/11 FY11/12 FY12/13 Waterfront area. The demand for quality FY13/14 and luscious landscape will be incorporated Alexandra Precinct, reinforcing the appeal of S$12,939M S$15,422M S$19,851M S$21,764M S$24,605M S$40B - S$50B business space outside the CBD remains relatively strong as established businesses into MBC II, further providing a refreshing MBC as a successful business hub created 1 Earnings before interest and taxes including share of profits of associated companies and joint ventures, and share of associates gain on disposal appreciate well-designed developments with respite from the hustle and bustle of work. by Mapletree Group’s vision and innovation. 2 Net asset value compounded annual growth rate. NAV adjusted for dividends distributed to shareholder and calculated excluding non-controlling interests and perpetual securities and with NAV as of 31 March 2009 as starting base 3 Excludes non-recurring items 10 11 Five -Year Development Business Plan Highlight

Mr Edmund Cheng Mapletree Investments Pte Ltd Annual Report 2013/2014 Message from the Chairman 13

our five-year average return on invested equity real estate development, capital management, In addition to (ROIE) stood at 14.1% in FY13/14. and investment expertise – can continue to deliver growth and consistently superior the Group’s In addition to the Group’s strong financial returns. However, given the relatively large performance in the last five years, we size that Mapletree’s business has grown to, strong financial have proven our capability in real estate our management team is cognisant that future development. The success of Mapletree growth should not be pursued at the expense performance in Business City (MBC), our innovative business of real returns. While our management team the last five years, hub in Singapore’s Alexandra Precinct, attests intends to use the same combination of scale to this. This validation carries through to (AUM), capital efficiency and returns targets we have proven Mapletree’s capital management business as to benchmark performance, our five-year NAV well. To date, four Mapletree sponsored real CAGR and average ROIE indicators will take our capability estate investment trusts (REITs) have been on special importance and interest in the next listed on the Singapore Exchange and their stage of growth. in real estate market capitalisation as at 31 March 2014 is as follows: Mapletree Logistics Trust (MLT) The Year in Review development. at S$2.6 billion, Mapletree Commercial Trust (MCT) at S$2.5 billion, Mapletree Industrial In FY13/14, the Group delivered a steady Trust (MIT) at S$2.3 billion and Mapletree financial performance. Revenue came in at Greater China Commercial Trust (MGCCT) at S$548.6 million, lower than the previous year S$2.2 billion. This achievement is in addition to due to an absence of contributions from The financial year ended 31 March 2014 our growing portfolio of private equity funds, Festival Walk and Mapletree Anson which (FY13/14) was of special significance, which expanded to five funds as at the end had been divested to MGCCT and MCT capping a strategic milestone for Mapletree of FY13/14. respectively. Profit after tax and minority Investments Pte Ltd (Mapletree or the Group). interests (PATMI) was S$859.4 million and At the end of FY08/09, we had set ourselves Having sustained our strong performance over Operational PATMI was S$373.9 million. PATMI an ambitious set of five-year key performance the last five years, the Group’s management from recurring activities was S$363.5 million, targets which, when attained, would see team is looking forward to leveraging our growing 12% compared to the year before and the Group scale up significantly, grow our successes to deliver the next phase of growth. boosted by new contributions derived from the earnings and deliver superior returns. I am Mapletree’s management team firmly believes listing of MGCCT and launch of our new private happy to report that these targets have that our business model – which combines real estate fund, Mapletree China Opportunity substantially been met.

Mapletree’s assets under management (AUM) more than doubled from FY08/09 at S$11.8 billion to S$24.6 billion in FY13/14. That represents a compounded annual growth rate (CAGR) of 16% during the period. In line with our “asset-light” strategy, this scaling up was accompanied by a shift in Mapletree’s AUM ratio of “managed versus owned assets” from 0.9:1 to 2.9:1. Over the same period, the Group has further seen a CAGR of 23% for its fee income from S$72.6 million (FY08/09) to S$203.2 million in FY13/14. Mapletree’s earnings before interest and tax including share of associates’ income (EBIT + SOA) reached S$472.0 million as at FY13/14, which is an increase of 63% from FY08/09. The Group’s net asset value (NAV) CAGR over five years from FY09/10 was 11.4% while

MBC II, Singapore 14

Fund II (MCOF II). Fee income continued The successful land bids coupled with to grow in FY13/14 to S$203.2 million, again the credible endorsement of Mapletree’s driven by MGCCT and MCOF II. As at 31 ability to structure and raise funds for its March 2014, Mapletree’s net gearing stands various platforms help position the Group comfortably at 8% with cash and undrawn for growth in key overseas markets such as banking facilities totalling S$2.8 billion. Hong Kong SAR and China. China remains in focus and it is where the Group intends Underlining the Group’s strong performance to increase its AUM going forward. Together are several developments. The first is with Hong Kong SAR, Japan and Singapore, international recognition for Mapletree’s where the real estate markets are more capability in generating consistent and developed and transparent, China will high returns from investments in China. In continue to see the greater proportion of ASIA March 2014, MCOF II was named Asia’s our investments and focus. At the same time, CAPITAL RAISE Capital Raise of the Year by Global PERE, the Group will remain engaged and regularly OF THE YEAR the industry’s respected media voice. This evaluate its presence and investments in achievement affirms Mapletree’s brand emerging and relatively constrained markets name and its successful investment track such as Vietnam, Malaysia, South Korea record in a key overseas market, China. and India. Global PERE Awards

MCOF II closed at its hard cap of Meanwhile in Singapore, we have commenced also served as a catalyst for the transformation US$1.4 billion just 10 months after its development of the second phase of MBC of Alexandra Precinct and created value marketing launch in October 2012. Seeded (MBC II). MBC II will comprise a 30-storey for Mapletree’s Singapore portfolio. Another by two mixed-use development projects, tower (making it Singapore’s tallest business feature of the precinct is MCT’s PSA Building South Station Enterprise City and the park) and three podium blocks ranging from (PSAB) together with its redeveloped retail combined MBC Shanghai and VivoCity five to eight storeys over a total site area of centre, Alexandra Retail Centre (ARC). Shanghai developments, MCOF II will 108,000 sqm. With a GFA of 124,800 sqm, Although PSAB is now owned by MCT, the continue Mapletree’s strategy of investing MBC II will feature state-of-the-art infrastructure, redevelopment of ARC was initiated prior to in the development of integrated mixed-use an eco-friendly design and sustainable MCT’s listing and is in line with the Group’s or single-use projects, as well as projects building features. precinct rejuvenation efforts. The value add with value enhancement potential located in that came with MBC is set to be enhanced China’s Tier I and Tier II cities. The first phase of MBC maintained good with MBC II, which is expected to add to the occupancy with a committed occupancy of vibrancy and appeal of Alexandra Precinct as The Group also succeeded in tendering for over 99% as at 31 March 2014, and provided a high quality, fringe Central Business District a prime site in Tsing Yi, Hong Kong SAR, in substantial rental income to the Group in location catering to a wide range of office and May 2013, bidding HK$1.69 billion to develop FY13/14. In addition to this, the business hub business uses. its first greenfield development in the city. With a site area of 21,000 sqm and a permissible gross floor area (GFA) of 85,000 sqm, the modern, multi-storey ramp- up logistics facility will be located close to the Kwai Chung Container Terminal, and is well-connected to the city, the Hong Kong International Airport and the mainland China border via expressways.

Soon after in January 2014, Mapletree won the tender for another prime commercial site spanning a site area of about 5,112 sqm, this time in Kwun Tong, Kowloon, for HK$3.769 billion. Strategically located in Kowloon East, the site will house a Grade-A office building with a total GFA of 61,344 sqm, to cater to the growing demand for large and column- free quality office space. Expected to be completed by 2017, this will be Mapletree’s first greenfield commercial development in Hong Kong SAR. MBC Shanghai, China Mapletree Investments Pte Ltd Annual Report 2013/2014 Message from the Chairman 15

Sustainability and Social Responsibility

While the Group continues to work towards attaining its business goals, it is mindful to grow value for all stakeholders and improve sustainability.

In China, our largest overseas development featuring our two iconic brands, MBC Shanghai and VivoCity Shanghai in Minhang, were awarded the Leadership in Energy and Environmental Design (LEED) precertification, with MBC Shanghai achieving the Gold and VivoCity Shanghai attaining the Silver level. Both are designed to minimise environmental impact by incorporating sustainable green technology features while ensuring the comfort of end-users. Also achieving the LEED Gold South Station Enterprise City, China precertification were Global Technology Park, Mapletree’s technology park in Bangalore, Acknowledgements India, and MBC II in Singapore. Together, While the Group these achievements reflect Mapletree’s Mapletree has consistently maintained that commitment to environmentally sound its success is in no small measure due to continues to operations and its drive to meet the highest our people. Our employees have performed available standards within the markets where well not only in FY13/14 but also throughout work towards we operate. Mapletree’s early days. The Board and attaining its Management are appreciative of these efforts In the area of corporate giving, Mapletree and on their behalf, I offer congratulations to business goals, in FY13/14 channelled funds towards two our staff for another fruitful and successful year. more undergraduate bursary programmes, it is mindful to the Singapore Management University and As we embark on the Group’s new five-year the Singapore University of Technology strategic road map, the expertise and grow value for and Design. The Group also contributed to experience of our Board continues to play education-related programmes supporting an important role, and we have taken steps all stakeholders disadvantaged youths from Boys’ Town to further strengthen its composition. We are and improve Home and Assumption Pathway School, both pleased that two highly respected individuals located in Singapore. Meanwhile, the Group joined the Board on 18 March 2014. They are sustainability. continued to support programmes in its Mr Samuel N. Tsien, Group CEO of OCBC, targeted China markets, with the objective of and Mr David Christopher Ryan, former supporting education and healthcare for the President of Goldman Sachs Asia. Mapletree poor and marginalised. warmly welcomes them. At the same time, we bid farewell to Mr Frank Wong Kwong Apart from financial donations, Mapletree Shing, who stepped down from the Board provides resources such as complimentary on 31 March 2014. We would like to thank use of space within its malls as well as access him for his invaluable service. to its business network and partnerships. Yours sincerely, The intangible support by Mapletree for The Group is now in a good position to scale charities and various causes helps build up and leverage its complementary roles awareness and boost patronage. It was as a real estate developer, capital manager a happy moment when we were informed and investor. With the support of our various that a student from Assumption Pathway business partners and stakeholders, I am School had obtained permanent employment confident that Mapletree will go further and at Jamie’s Italian restaurant in VivoCity grow stronger in the next five years. Edmund Cheng Singapore. Mapletree had helped connect Chairman both organisations for training and industrial attachment opportunities. 16 Interview with the Group CEO

Mr Hiew Yoon Khong

Q: FY2013/2014 marked the We track our business in terms of its scale, The bulk of these assets are managed under earnings and returns. During these past 10 our real estate investment trusts (REITs) and completion of a five-year plan for years, Mapletree has grown significantly on all private fund platforms. A decade ago, we Mapletree. Much of that five-year three counts. From holding just S$2.5 billion in had no REITs and private funds business. plan was informed by strategic property assets, all of which were located in Today, there are four Mapletree REITs, plus decisions which date back to Singapore, the Group now has assets under seven private funds (past and existing), which 2003. Can you give an overview management (AUM) of S$24.6 billion. These together account for close to three-quarters of the milestones and key events span retail, office, industrial, logistics and of our total AUM. We take pride that our REITs mixed-use developments, and are located have been well-received by investors. In the in Mapletree’s growth during this across seven countries in Asia – namely latest example of this, Mapletree Greater past decade? Singapore, Greater China, Japan, South Korea, China Commercial Trust (MGCCT) was Vietnam, Malaysia and India. 29.5 times subscribed during its initial public offering (IPO) in 2013. Similarly, our newest Mapletree Investments Pte Ltd Annual Report 2013/2014 Interview with the Group CEO 17

private fund, Mapletree China Opportunity Fund II (MCOF II), raised US$1.4 billion to become one of the largest China-focused private equity real estate funds raised to-date.

Over the past ten years, our Group’s net asset value (NAV)1 grew from S$2.2 billion to S$8.3 billion. Much of this growth has taken place over the last five years, which saw us forge our business model and implement our strategic plan. As we embarked on that journey, we were mindful that we should not enlarge our AUM simply for the sake of achieving greater scale. Therefore, in 2009, we adopted a set of quantitative indicators to help us dynamically monitor the balance between AUM expansion and the need to consistently deliver high earnings and returns, namely:

Returns • NAV CAGR (five-year) • Average ROIE (five-year) Mapletree Business City (MBC), Singapore - one of Mapletree’s flagship developments

Earnings Trust, Mapletree Commercial Trust and • EBIT + SOA2 MGCCT; kept a watchful eye on quality • Fee Income developments both locally and overseas and made numerous acquisitions; developed Scale a good number of projects that created • AUM significant value; and continued to introduce • AUM ratio (managed vs owned assets) new private funds. Development Our growth in scale has come hand in hand and acquisition highlights include the with strong performances in earnings and completion of our flagship integrated returns. We grew our NAV by a compounded business hub development in Singapore, annual growth rate (CAGR) of 14.6%3 over this Mapletree Business City (MBC), and our first 10-year period. We also improved our five- overseas VivoCity in Xi’an, China. Significant year average return on invested equity (ROIE) acquisitions include Festival Walk in Hong of 3.8% for the FY04/05 to FY08/09 period to Kong SAR and Gateway Plaza in Beijing, both 14.1% for the FY09/10 to FY13/14 period. In of which have since been divested to MGCCT. 10 years, our EBIT + SOA increased six-fold The MGCCT IPO is Singapore’s largest REIT listing from S$76.5 million to S$472.0 million - this We also began developing large-scale is a good indicator to measure the cash flow integrated projects overseas, such as the strength of the Group. Our fee income stands combined MBC-VivoCity project in Minhang, The Group’s consistent financial results over at S$203.2 million. Shanghai, which will have a gross floor the past five years show that our business area of 297,000 square metres (sqm); the model has worked for us. We capped FY13/14 Specific targets were set for each of these 500,000 sqm South Station Enterprise City with a profit after tax and minority interests indicators for the five-year period through in Foshan, Guangdong, and the 262,000 (PATMI) of S$859.4 million and a strong return FY13/14. With those targets as guideposts sqm Saigon South Place in Ho Chi Minh City, on equity (ROE) of 10.6%. over those last five years, we brought three Vietnam. These integrated projects, which REITs to market, namely Mapletree Industrial Mapletree is developing in phases, will be fully completed over the next few years.

1 Excluding non-controlling interests and perpetual securities. 2 Earnings before interest and taxes including share of profits of associated companies and joint ventures, and share of associates gain on disposal. 3 NAV adjusted for dividends distributed to shareholder and calculated excluding non-controlling interests and perpetual securities and with NAV as of 31 March 2004 as starting base. 18

HarbourFront Precinct, Singapore (after)

Q: You talked about how Mapletree’s growth came from the successful execution of its business model. What is Mapletree’s business model and how was it developed?

The real estate business can be a volatile and cyclical one. To counter this, we decided to focus on building a steady stream of recurring earnings. That led us to adopt a business model that integrates three complementary roles: a real estate developer, an investor and a capital manager. The capital management business, in particular, enables us to not only reduce risk by being asset-light, but also maximise efficiencies in our capital structures HarbourFront Precinct, Singapore (before) and deployment of funds. also knew that if these rejuvenation initiatives which they would not otherwise be able to. How has this business model worked in were executed well, these assets would On our part, we saw that developing a REIT practice? In 2003, all we held were provide strong recurring income streams. platform would address two of our needs: S$2.5 billion in property assets in Singapore’s They would be prime candidates for injection to recycle capital and to deliver consistent HarbourFront and Alexandra areas. These into capital management platforms. We were returns. By 2004, we had made the decision assets were low-yielding and needed to therefore watching developments in the to list a REIT. be redeveloped or refurbished. Our plan nascent Singapore REIT market very closely. was to rejuvenate these properties. We To build a REIT, however, we needed quality decided to play to the advantage of their The early 2000s witnessed the introduction assets with a common theme that could be close proximity to each other and transform of Singapore’s first REIT, and there was much injected into a trust. In 2004, there were only them as integrated precincts, rather than talk about more REITs to come. Much attention four REITs on the Singapore bourse which individually, into exciting lifestyle and business was focused on how REITs as a financial held assets such as retail, office and industrial hubs. We knew that such a task would require instrument allowed investors to gain exposure developments. We saw an untapped niche significant capital outlay. At the same time, we to prime income-yielding real estate on terms in a logistics REIT and decided to seize that Mapletree Investments Pte Ltd Annual Report 2013/2014 Interview with the Group CEO 19

opportunity. That year, we began building our projects. Going forward, our focus is to ownership of logistics properties. In 2005, we maintain a high level of profitability and returns listed our first REIT, Mapletree Logistics Trust for our shareholder and all stakeholders. Scale (MLT), with an initial portfolio of 15 properties may be important, but not at the expense of through a S$349 million offering. That marked real returns. the first major capital recycling operation for our integrated developer-investor-capital The key indicators we used to measure our manager business model. MLT has since performance in the past five years remain grown its portfolio to 111 assets worth relevant to us. We will focus on broadening our approximately S$4.2 billion at the end of earnings opportunities and generating strong FY13/14. returns consistently as we scale our AUM. The targets, however, will be much higher. Having As we acquired our logistics assets and achieved significant scale, the task going worked towards the listing of MLT, we also forward will challenge us. Mapletree’s largest logistics development, in Tsing Yi, recognised the potential that lay in the private Hong Kong SAR, will support MLT’s future growth real estate funds sphere. Private funds Our business thus far has focused on very allow us to work with investors to undertake select markets in Asia. Those fast-developing development and investment projects which and developed economies have served example of the type of investments which would generate higher returns. In 2005, we us well. However, we also recognise that we can look into. In this regard, our low net launched two private funds: the S$90 million the outlook for Asia is not expected to be gearing level of 8% at the close of FY13/14 Mapletree Real Estate Mezzanine Fund 1, robust, at least in the near to middle term. positions the Group well to capitalise on future which invested in property-linked mortgage There are also sector-specific challenges. In growth opportunities. and mezzanine loans in Asia, and CIMB- China, for instance, the real estate market is Mapletree Real Estate Fund 1, which we getting saturated. In Singapore, land sales I would like to highlight the importance of launched with CIMB with a committed capital are increasingly limited in this relatively having the right team in place to propel us of RM327 million at its first closing. The latter small market. further. We have devoted a lot of resources to invested in development and investment hiring and training the right professionals for assets, real estate investment products and Therefore going forward, our strategy within our business. As a relatively young company listed real estate securities. Asia is to selectively focus on specific asset (age-wise) that is growing aggressively, we classes and micro-markets where we see work very hard at retaining the individuals These were the developments which formed opportunities to acquire good quality, high who have contributed to Mapletree’s our business model in the mid-2000s. In returns assets. For example, during the achievements over the past years. They the following years, we continued investing past year, we made significant inroads into understand the company and its business in assets from different sectors that could logistics development projects in China, with model well; they also possess the potentially be a part of future capital three completed land bids and several other competencies and experience to execute management platforms such as REITs and investment agreements. As China sees rising our business strategy. These experienced private funds. By 2008, we had established demand for modern logistics warehouses, professionals are the bedrock of our business. what we felt was a sustainable, high returns of which it has a limited supply, we see At the same time, we need to strengthen our business, with capital management and opportunities for us to cater to this need and team as Mapletree expands, and invest in recurring earnings at its core. As at 31 March develop such facilities. programmes to attract and develop our human 2014, our four REITs have a total portfolio size capital. At locations outside Singapore, we are of over S$16.2 billion and a combined market Besides identifying opportunities to develop also recruiting more local staff, in recognition capitalisation of approximately S$9.6 billion, and acquire high-yielding assets in niche that a sustainable business can only be built and they contribute a recurring EBIT + SOA micro-markets, we will also seek to achieve with the help of those who are a part of the of about S$290.5 million annually. our next five-year targets by diversifying local communities. beyond our current geographical and asset reach. This will in turn allow us to grow our This focus to nurture employees will continue Q: With Mapletree’s growth capital management platforms and enlarge going forward, and we will strive to develop over the past decade, how our recurring income. In particular, we will look new initiatives to attract talents and retain does it plan to further expand to new markets such as Europe and the US. high performers. going forward? In April 2014, we announced our acquisition of a stake in the Asia business of Oakwood We believe our business model is a robust Worldwide, a well-known corporate housing and resilient one. We have built stability and serviced apartment brand based in the through recurring income streams, and have US. Mapletree will also acquire and develop deployed capital relatively efficiently to grow corporate and serviced apartment assets in through both investment and development Asia, Europe and North America. This is one 20 Board of Directors

Edmund Cheng, 61 Chairman

Mr Edmund Cheng is the Chairman of the From 2005 to 2013, he was Chairman of the Limited (1996 – 2004). A past President of Board of Directors of Mapletree Investments National Arts Council where he was involved in the Real Estate Developers’ Association of Pte Ltd (MIPL). He is also the Chairman of national efforts to promote and develop an arts Singapore (REDAS), Mr Cheng remains a its Executive Resource and Compensation landscape that will enhance vibrancy in the member of its Presidential Council. Committee and Investment Committee. economy and society. Mr Cheng previously served as Chairman of the Singapore Tourism Mr Cheng was awarded The Public Service Mr Cheng is concurrently the Deputy Board (1993 – 2001), The Old Parliament Star (BAR) in 2010 and The Public Service Chairman of Wing Tai Holdings Limited, House Limited (2002 – 2006), The Esplanade Star (BBM) in 1999 by the Singapore Chairman of SATS Ltd (both listed on the Co. Ltd (2003 – 2005), and as Founding Government for his significant contributions. Singapore Exchange) and Executive Director Chairman of Design Singapore Council He also received the Outstanding Contribution of Wing Tai Malaysia Berhad (a company (2003 – 2008) and a member on the Board of to Tourism Award from the President of listed on Bursa Malaysia). Trustees of Nanyang Technological University Singapore in 2002. In 2009, he was conferred (2007 – 2012). He also served on the Boards “Officier de l’Ordre des Arts et des Lettres” by Apart from his wealth of experience as a of the Urban Redevelopment Authority (1991 – the Government of the Republic of France. property developer, Mr Cheng is actively 1994), the Construction Industry Development involved in the public and private sectors. Board (1992 – 1994) and Singapore Airlines Mapletree Investments Pte Ltd Annual Report 2013/2014 Board of Directors 21

Lee Chong Kwee, 57 Director

Mr Lee Chong Kwee is a member of the Corporation and PSB Certifications Pte Ltd. MIPL Board and the Chairman of its Audit He was also on the Advisory Boards of and Risk Committee as well as its Transaction the National University of Singapore Review Committee. Business School and The Logistics Institute – Asia Pacific. He is also currently the Chairman of Jurong Port Pte Ltd, a Director of Tiger Airways Mr Lee was formerly the Chief Executive Holdings Ltd, as well as the Corporate Advisor Officer of Pontiac Land Pte Ltd, and before to Temasek Holdings (Pte) Limited. that, the Chief Executive Officer, Asia Pacific, of Exel (Singapore) Pte Ltd from 1999 to 2005. Mr Lee had previously served on the boards Prior to joining Exel, Mr Lee was with Singapore of Singapore Post Ltd, Sinotrans Ltd, JTC Airlines Ltd in various senior positions.

Paul Ma Kah Woh, 66 Director

Mr Paul Ma Kah Woh is a member of the equity firms, namely CapitaLand China MIPL Board and a member of its Audit Development Fund Pte Ltd and CapitaLand and Risk Committee, Executive Resource China Development Fund II Limited. In and Compensation Committee, Investment addition, Mr Ma is a member of the Board Committee and Transaction Review of Trustees of the National University of Committee. He is also the Chairman of Singapore and the National Heritage Board Mapletree Logistics Trust Management Ltd. where he also chairs their Audit Committee.

Concurrently, Mr Ma is a Director of Nucleus Mr Ma is a Fellow of the Institute of Chartered Connect Pte Ltd, Keppel Infrastructure Fund Accountants in England and Wales as well as Management Pte Ltd (Trustee-Manager of a Member of the Institute of Certified Public Keppel Infrastructure Trust), PACC Offshore Accountants in Singapore. Services Holdings Ltd as well as two private

Tsang Yam Pui, 67 Director

Mr Tsang Yam Pui is a member of the MIPL International Rail Containers Co., Limited, Board and a member of the Audit and Risk in the People’s Republic of China. Committee. He is also the Chairman of Mapletree Commercial Trust Management Ltd. Prior to Mr Tsang’s appointment with NWS Holdings Ltd, he served in the Hong Kong Mr Tsang is concurrently the Executive Police Force for 38 years where he held Director and a member of the Executive many key appointments before retiring as Committee of NWS Holdings Ltd, a leading its Commissioner in 2003. infrastructure and services company listed on the Hong Kong Stock Exchange since 2004. For his distinguished public service, Mr Tsang He is also the Vice Chairman and Director was awarded the Gold Bauhinia Star (Hong of New World First Bus Services Limited and Kong SAR), the Order of the British Empire, Citybus Limited and a Director of New World the Queen’s Police Medal, the Colonial First Bus Services (China) Limited and New Police Medal for Meritorious Service, the World First Ferry Services Limited. In addition, Commissioner’s Commendation, and the Mr Tsang is the Vice Chairman of China United Hong Kong SAR Police Long Service Medal. 22

Frank Wong Kwong Shing, 66 Director

Mr Frank Wong Kwong Shing is a member of Ltd, Director and Chief Operating Officer of the MIPL Board and its Investment Committee, DBS Bank Ltd. and DBS Group Holdings Ltd, until 31 March 2014. He is the Chairman of Executive Director of DBS Group Holdings Mapletree Greater China Commercial Trust Ltd, and Chairman of DBS Bank (China) Management Ltd. Limited and DBS Bank (Hong Kong) Limited. He had previously also assumed positions Mr Wong is an Independent Non-Executive as Chairman of The Hong Kong Futures Director of Industrial and Commercial Bank of Exchange Limited and Chairman of the China Limited, China Mobile Limited, and PSA Leveraged Foreign Exchange Trading International Pte Ltd, Singapore. He is also a Ordinance Arbitration Panel. He was a member of the Hong Kong SAR Government’s member of the Foreign Exchange and Money Financial Services Development Council. Market Practices Committee of Hong Kong Association of Banks, and an Independent From 1999 until his retirement in 2008, Non-Executive Director of Singapore’s National Mr Wong was Vice Chairman of DBS Bank Healthcare Group Pte Ltd.

Wong Meng Meng, 65 Director

Mr Wong Meng Meng, Senior Counsel, is a Mr Wong is the Founder-Consultant of member of the MIPL Board, a member of its WongPartnership LLP, a leading law firm in Audit and Risk Committee and a member of Singapore. He is an accredited Adjudicator its Transaction Review Committee. Mr Wong under the Building and Construction Industry is also the Chairman of Mapletree Industrial Security of Payment Act, Chapter 30B of Trust Management Ltd. Singapore and a Member of the Competition Appeal Board, Singapore. He is a Member Mr Wong is concurrently a Director of United of the Advisory Board of the Faculty of Law, Overseas Bank Ltd, and the Chairman of National University of Singapore and was also Energy Market Company Pte. Ltd. the President of Law Society of Singapore from 2010 to 2012.

David Christopher Ryan, 44 Director

Mr David Christopher Ryan is a member returning to the US in end 2013. He was of the MIPL Board and a member of its made partner of Goldman Sachs in 2004 Investment Committee. at age 34.

Mr Ryan was the immediate past President of In addition to his role on the MIPL Board, Goldman Sachs Asia (ex Japan) from 2010 to Mr Ryan remains a Senior Director of 2013. Mr Ryan had joined Goldman Sachs in Goldman Sachs & Co. 1992, and had spent nine years in Asia before Mapletree Investments Pte Ltd Annual Report 2013/2014 Board of Directors 23

Samuel N. Tsien, 59 Director

Mr Samuel N. Tsien is a member of the Prior to joining OCBC, Mr Tsien was President MIPL Board. and Chief Executive Officer of Bank of America (Asia) Ltd. and later, President and Chief Mr Tsien is the Group Chief Executive Officer Executive Officer of China Construction Bank and Executive Director of Oversea-Chinese (Asia) Corporation Ltd. He had concurrently Banking Corporation Limited (OCBC). He is served as Executive Vice President and as also Chairman of OCBC (China) and a board Asia Commercial and Consumer Banking member of other companies in the OCBC Group Executive of Bank of America group. Prior to these appointments, he was the Corporation. Mr Tsien has held other senior Senior Executive Vice President and Global management positions in corporate banking, Head, Global Corporate Bank with worldwide retail banking and risk management at Bank responsibilities for OCBC’s corporate and of America in Hong Kong and San Francisco. commercial customer relationships. He is also Chairman of the Association of Banks in Singapore since June 2013.

Hiew Yoon Khong, 52 Director and Group Chief Executive Officer

Mr Hiew Yoon Khong is a member of the Mapletree also built a substantial and growing Board and Group Chief Executive Officer. He capital management business. is also a Non-Executive Director of Mapletree Logistics Trust Management Ltd, Mapletree From 2003 to 2011, Mr Hiew was concurrently Industrial Trust Management Ltd, Mapletree Senior Managing Director (Special Projects) in Commercial Trust Management Ltd, and Temasek Holdings. Prior to joining Mapletree, Mapletree Greater China Commercial Trust Mr Hiew held various senior positions in the Management Ltd. CapitaLand group of companies. His past directorships include serving as a member Mr Hiew joined Mapletree in 2003 as Group on the Boards of Changi Airport International Chief Executive Officer. Mr Hiew has since and Sentosa Development Corporation, as led the Mapletree Group from a Singapore- well as the Board of Trustees of the National centric asset-owning real estate company University of Singapore. Mr Hiew currently worth S$2.3 billion to a fast-growing regional serves as a member of the Pro-Tem Singapore company with total owned and managed Accountancy Council. assets in excess of S$20 billion. In the process, 24 Group Senior Management

Hiew Yoon Khong, 52 Mr Hiew is a member of the Board and process, Mapletree also built a substantial Group Chief Executive Officer. He is also a and growing capital management business. Group Chief Executive Officer Non-Executive Director of Mapletree Logistics Trust Management Ltd, Mapletree Industrial From 2003 to 2011, Mr Hiew was concurrently Trust Management Ltd, Mapletree Commercial Senior Managing Director (Special Projects) in Trust Management Ltd, and Mapletree Greater Temasek Holdings. Prior to joining Mapletree, China Commercial Trust Management Ltd. Mr Hiew held various senior positions in the CapitaLand group of companies. His past Mr Hiew joined Mapletree in 2003 as Group directorships include serving as a member Chief Executive Officer. Mr Hiew has since led on the Boards of Changi Airport International the Mapletree Group from a Singapore-centric and Sentosa Development Corporation, as asset-owning real estate company worth well as the Board of Trustees of the National S$2.3 billion to a fast-growing regional University of Singapore. Mr Hiew currently company with total owned and managed serves as a member of the Pro-Tem Singapore assets in excess of S$20 billion. In the Accountancy Council.

Wong Mun Hoong, 48 Group Chief Financial Officer

Mr Wong oversees the Finance, Tax, Treasury, Prior to joining Mapletree in 2006, Mr Wong Private Funds & Investor Relations, Risk had over 14 years of investment banking Management, and Information Systems & experience in Asia, the last 10 years of which Technology functions of the Mapletree Group. were with Merrill Lynch & Co.

He is also a Non-Executive Director of Mapletree Logistics Trust Management Ltd, Mapletree Industrial Trust Management Ltd, Mapletree Commercial Trust Management Ltd and CapitaLand Township Development Fund.

Chua Tiow Chye, 55 Group Chief Investment Officer and Regional Chief Executive Officer, North Asia

Mr Chua exercises strategic oversight of Management Ltd and Mapletree Greater China the Mapletree Group’s business expansion Commercial Trust Management Ltd. He was and directly spearheads the development of also previously the Chief Executive Officer of new markets in North Asia, i.e. South Korea, Mapletree Logistics Trust Management Ltd. Hong Kong SAR, Australia and Japan, as well as other opportunistic markets. As business Prior to joining Mapletree in 2002, Mr Chua head of the North Asia region, he has direct held senior positions with various companies responsibility over Mapletree’s non-REIT including Vision Century Corporation Ltd, assets and growth in these markets. Ascendas Pte Ltd, Singapore Food Industries Pte Ltd and United Overseas Bank Ltd. Mr Chua concurrently serves as a Non- Executive Director of Mapletree Logistics Trust Mapletree Investments Pte Ltd Annual Report 2013/2014 Group Senior Management 25

Phua Kok Kim, 51 Regional Chief Executive Officer, South East Asia

Mr Phua heads up the Group’s business in Mr Phua is also a Non-Executive Director of South East Asia. He has direct responsibility Mapletree Industrial Trust Management Ltd. over the Group’s non-REIT assets in these markets. He also supervises the management Mr Phua was previously Chief Executive of the non-REIT industrial assets under the Officer of Mapletree Industrial. Prior to joining Mapletree Industrial Fund, and is concurrently Mapletree, Mr Phua was Managing Director involved in various Mapletree real estate at Temasek Holdings Private Limited, covering capital management initiatives such as sitting investments in various sectors such as on the Investment Committee of Mapletree’s telecommunications, finance and transport. joint venture fund with CIMB of Malaysia.

Quek Kwang Meng, 48 Regional Chief Executive Officer, China and India

Mr Quek joined Mapletree in March 2012 Prior to joining Mapletree, Mr Quek was as Regional Chief Executive Officer for China the Global Co-head/Managing Director for and India. He is leading the Group in its Real Estate Investments in Citi Private Bank. business expansion in these two key markets, He was also previously Managing Director with direct responsibility over the Group’s with CapitaLand Financial Ltd. non-REIT assets in these countries.

Ho Seng Chee, 46 Group Chief, Corporate Services

Mr Ho oversees all administration, Mr Ho began his career as a litigation counsel communications, human resources and with Drew & Napier and Rajah & Tann. legal matters of the Mapletree Group. Prior to joining Mapletree in 2008, he was He was also formerly the Joint Company a staff member of the International Monetary Secretary of Mapletree Logistics Trust Fund in the USA for 11 years. Management Ltd, Mapletree Industrial Trust Management Ltd, and Mapletree Commercial Trust Management Ltd. 26

Tan Wee Seng, 48 Head, Regional Development Management

Mr Tan heads up Regional Development 22 years of design, project/construction Management where he oversees the execution management experience in the industrial, of all development projects including asset logistics, pharmaceutical, telecommunications, enhancement initiatives undertaken within the institutional, retail and commercial sectors Mapletree Group across all business units across different geographies. and countries*.

Prior to joining Mapletree in 2012, he spent * Excluding China and Japan the last 18 years with the Lend Lease Group in various senior positions. Mr Tan has over

Ng Kiat, 44 Chief Executive Officer, Mapletree Logistics Trust Management Ltd

Ms Ng is the Chief Executive Officer and an Prior to joining Mapletree in 2007, Ms Ng Executive Director of Mapletree Logistics Trust was with Temasek Holdings Private Limited Management Ltd. Prior to this appointment for five years managing private equity fund in July 2012, Ms Ng was Chief Investment investments. Preceding that, Ms Ng was Officer, South East Asia, of Mapletree where Vice President at the CapitaLand group of she was responsible for managing the companies where she was responsible for acquisitions, development and operations of real estate investments and cross-border Mapletree’s investment portfolio in the region. mergers and acquisitions activities in South She was also previously the Chief Executive East Asia and Europe. Officer, Vietnam, of Mapletree.

Amy Ng Lee Hoon, 47 Chief Executive Officer, Mapletree Commercial Trust Management Ltd

Ms Ng joined Mapletree in 2010 as the Upon the listing of Mapletree Commercial Chief Executive Officer of Singapore Trust in April 2011, Ms Ng became the Chief Investments, where she was responsible Executive Officer and an Executive Director for the Group’s Singapore Commercial of Mapletree Commercial Trust Management portfolio. She also oversaw Mapletree’s Ltd. Prior to joining Mapletree, Ms Ng held Marketing, Property Management and various appointments in the CapitaLand Development Management departments group of companies. in Singapore. Mapletree Investments Pte Ltd Annual Report 2013/2014 Group Senior Management 27

Tham Kuo Wei, 45 Chief Executive Officer, Mapletree Industrial Trust Management Ltd

Mr Tham is the Chief Executive Officer and Mr Tham joined Mapletree in 2002 and has an Executive Director of Mapletree Industrial since held various positions with the Group. Trust Management Ltd. He was previously Prior to joining Mapletree, he was in various the Deputy Chief Executive Officer and Chief engineering and logistics management roles Investment Officer of Mapletree’s Industrial with PSA Corporation. business unit. In that capacity, he was responsible for structuring, establishing and managing real estate investment platforms in Singapore and the region.

Cindy Chow Pei Pei, 44 Chief Executive Officer, Mapletree Greater China Commercial Trust Management Ltd

Ms Chow is the Chief Executive Officer and became the Senior Vice President and Head an Executive Director of Mapletree Greater of Investment for Mapletree Logistics Trust China Commercial Trust Management Ltd. Management Ltd. In that capacity, she was She was previously the Chief Executive responsible for sourcing, identifying and Officer, India, of Mapletree, where she was evaluating potential acquisitions in the region, instrumental in establishing Mapletree’s as well as recommending and analysing investments in the country. potential asset enhancement initiatives, with a view to enhance MLT’s portfolio. Ms Chow joined Mapletree in 2002 as a Business Development Manager. She later

Wendy Koh Mui Ai, 42 Head, Strategy & Research

Ms Koh was appointed Head, Strategy and Prior to joining Mapletree, Ms Koh was Research in May 2014, overseeing strategy Co-head, Asia Pacific Property Research and planning as well as research for the at Citi Investment Research. With almost Group. In her capacity, she also provides 20 years of experience as a real estate investment analysis and evaluation of equities analyst, she was involved in many opportunities in new markets. Before the IPOs and capital raising deals including for appointment, she was engaged by Mapletree Mapletree Logistics Trust, Mapletree Industrial as an advisor to review the Group’s strategy Trust and Mapletree Commercial Trust. implementation from FY09/10 to FY13/14. She was also involved in the formulation of Mapletree’s next five-year strategic plan.

28 Highlights of the Year

April 2013 • Mapletree acquired CentrePoint, a premier • Mapletree Greater China Commercial Trust office building in Ho Chi Minh City, Vietnam. (MGCCT) established a US$1.5 billion • Mapletree Commercial Trust (MCT) issued With a GFA of 33,567 sqm, the 15-storey Euro Medium Term Securities Programme S$70 million of 3.20% Fixed Rate Notes due prime office building is strategically sited together with issuers including Mapletree in 2021, under its S$1 billion Multicurrency along the main trunk road between Ho Chi Greater China Commercial Trust Treasury Medium Term Note Programme established Minh City’s Central Business District (CBD) Company Pte. Ltd. and Mapletree Greater in August 2012. A Moody’s rating of ‘Baa2’1 and Tan Son Nhat International Airport. China Commercial Treasury Company was assigned to the Notes, similar to MCT’s The acquisition supports Mapletree’s (HKSAR) Limited. long-term Issuer Rating. Vietnam strategy of focusing on acquiring well-located investment properties with June 2013 • Mapletree Industrial Trust (MIT) celebrated good quality specifications that generate the groundbreaking of a build-to-suit attractive returns. • CIMB-Mapletree Real Estate Fund 2 (BTS) development for Equinix’s third Shariah, a Shariah-compliant private International Business ExchangeTM data May 2013 real estate fund established through centre in Singapore. Designed to be Mapletree’s joint venture with CIMB in energy efficient, the S$108 million project Malaysia, announced that it will commit will meet the Building and Construction to a total project value of MYR450 million Authority (BCA) Green Mark and after its first closing. With an investment Leadership in Energy and Environmental strategy targeting the sale and leaseback Design (LEED) standards. With a total of Shariah-compliant projects in Malaysia, gross floor area (GFA) of 35,767 square the fund aims to maximise total returns metres (sqm), the development provides on capital primarily by seeking stable the infrastructure and scale for Equinix recurring income, realistic capital to expand its presence in Singapore and appreciation, and development profits. Asia-Pacific. • The Initial Public Offering (IPO) of MGCCT • VivoCity Singapore was named Best Mapletree Business City, Singapore beat four rivals to win the title of ‘Best Shopping Centre by the AsiaOne People’s Capital Raising Strategy of the Year’ at the Choice Awards. A total of 180,000 online • Mapletree Business City (MBC) garnered 2013 Real Estate Investment World Asia voters rated their favourite brands and the BCA Universal Design Mark GoldPLUS Awards for Excellence. The winner was products. This award attests to VivoCity’s Award, which is a voluntary certification selected by voters from across the Asian commitment to provide its shoppers with scheme introduced as an initiative to raise real estate industry. an iconic retail, entertainment and lifestyle the bar on Universal Design adoption in destination that constantly surprises developments. The award succeeds the and excites. initial Universal Design Awards which MBC was awarded in 2011. This accolade illustrates Mapletree’s commitment to provide best-in-class, user-friendly spaces by incorporating best practices to enhance the conduciveness and accessibility of its developments.

• Mapletree clinched a prime site in Tsing Yi, Hong Kong SAR, for HK$1.69 billion, to develop a modern multi-storey ramp-up logistics facility. The project is Mapletree’s Festival Walk, Hong Kong SAR – a MGCCT property first greenfield development in the city. The site has a land area of 21,000 sqm and a VivoCity, Singapore permissible GFA of 85,000 sqm.

1 A rating is not a recommendation to buy, sell or hold securities, does not address the likelihood or timing of prepayment, if any, or the receipt of default interest, and may be subjected to revision or withdrawal at any time by the assigning rating organisation Mapletree Investments Pte Ltd Annual Report 2013/2014 Highlights of the Year 29

July 2013 • Mapletree China Opportunity Fund II October 2013 (MCOF II) closed at its hard cap of • Mapletree Logistics Trust (MLT) acquired US$1.4 billion. Seeded by two mixed- The Box Centre in Gyeonggi-do, use development projects, South Station South Korea, for KRW28.75 billion. This Enterprise City as well as the combined acquisition is in line with MLT’s efforts to MBC Shanghai and VivoCity Shanghai, rebalance its portfolio towards the higher MCOF II closed 10 months after its growth markets in Asia. The Box Centre marketing launch. MCOF II will continue comprises a modern, three-storey dry Mapletree’s strategy of investing in the warehouse and an ancillary office block, development of integrated mixed-use or with a total GFA of approximately single-use projects, and projects with value 27,000 sqm. enhancement potential located in China’s Tier I and Tier II cities. K&S Corporate Headquarters, Singapore • Mapletree completed the construction of Odawara Centre 2 in Japan, an extension • MIT successfully completed the of Odawara Centre 1 which was completed development of K&S Corporate earlier in January. Strategically located Headquarters, a BTS project for in Kanagawa Prefecture, a popular Kulicke & Soffa (K&S). Developed with logistics hub in Western Japan, this BTS environmentally sustainable features, K&S e-commerce distribution centre enjoys Corporate Headquarters was accorded easy access to the neighbouring Tokyo, the BCA Green Mark Gold Award. The Yokohama and Nagoya areas. With a total five-storey Hi-Tech Building spans a GFA GFA of over 200,000 sqm, Odawara Centre of approximately 30,864 sqm. The property is amongst the largest of logistics centres serves as a production, research and in the vicinity. development facility as well as a corporate Artist impression of South Station Enterprise City, China office for K&S.

• Festival Walk received the Yahoo! Emotive • Mapletree Logistics Trust Management Brand Awards (Shopping Centre Category) Ltd (MLTM) was named Frost & Sullivan’s 2012-2013. This award further affirmed 2013 Asia Pacific Logistics Infrastructure Festival Walk’s popularity as a premier Developer of the Year. This is the second retail and lifestyle destination among the time2 that the Frost & Sullivan Asia Pacific 2.5 million survey participants. Best Practices Awards has recognised MLTM for its excellent track record in September 2013 growing its market presence and managing logistics infrastructure development in • Mapletree Anson emerged as first runner- the region. up at the ASEAN Energy Awards 2013, in Odawara Centre 2, Japan the Energy Efficient Building – New and • MBC was officially named Singapore’s Existing category. Designed with an array of first ‘Healthy Workplace Ecosystem’ at the August 2013 environmentally friendly features, Mapletree launch of the National Healthy Lifestyle Anson is a premier Grade-A office building • Mapletree completed the construction of Campaign 2013. Partnering the Health in the CBD with a small carbon footprint. its sixth logistics development in China Promotion Board to initiate programmes With the impressive energy saving effort – Mapletree Zhengzhou International that encourage the 10,000-strong working of an estimated 2,700,000 kWh per year, Logistics Park. Comprising four blocks of community at MBC to pursue a healthier Mapletree Anson successfully reduces single-storey dry warehouses with a GFA of lifestyle, Mapletree provides a favourable carbon dioxide emissions by approximately 79,319 sqm, the Grade-A logistics facility work environment that brings healthy living 1,400 tonnes a year. has achieved a lease commitment of close to the doorsteps of its tenants, enabling to 100% to-date. occupants to make better choices.

2 Mapletree Logistics was named Frost & Sullivan’s Asia Pacific Logistics Park Developer of the Year in 2011 30

• MBC II was awarded the LEED December 2013 in 2010. Slated to be completed in 2016, precertification Gold level for its the new business park will comprise a sustainable building design. Awarded by 30-storey tower, and three podium buildings the U.S. Green Building Council, the LEED of five to eight storeys over a total site area certification is the international standard of 108,000 sqm. With a GFA of 124,800 for high-performance green buildings. sqm, the new development will feature state-of-the-art infrastructure incorporating November 2013 an eco-friendly design and green features.

• MBC Shanghai and VivoCity Shanghai gained international recognition in building sustainability as the combined development was awarded the LEED precertification, at Gold and Silver levels respectively, marking the Group’s first LEED pre-certified overseas development. MGCCT was named ‘Best REIT’ by The Asset Magazine Featuring two of Mapletree’s iconic brands, the development was specifically designed to minimise environmental impact by • MGCCT’s IPO was named ‘Best REIT’ at incorporating sustainable green technology The Asset Magazine’s Triple A Regional features without compromising on the House and Deals Awards 2013. This comfort of end-users. recognition acknowledged MGCCT’s S$1.68 billion IPO, which demonstrated the • Mapletree Benoi Logistics Hub, MLT’s first confidence in and support for the offering redevelopment project in Singapore, was from both institutional and retail investors. completed with a 100% lease commitment. Artist impression of MBC II, Singapore The 92,500 sqm modern five-storey ramp- • Mapletree clinched a prime industrial site up logistics facility also received the BCA in Singapore for S$120 million to develop • Mapletree was awarded a prime Green Mark Platinum Award, the highest a modern high-specification industrial commercial site spanning a site area of certification for sustainable buildings facility with office space and a retail centre about 5,112 sqm in Kwun Tong, Kowloon in Singapore. within a permissible GFA of 41,230 sqm (Hong Kong SAR) for HK$3.769 billion. on 11,780 sqm of land. The project will Strategically located in Kowloon East, the be directly connected at the basement site will house a Grade-A office building level to the Tai Seng MRT station, and is with a total GFA of 61,344 sqm, to cater an ideal location for businesses in high- to the growing demand for large and value light industrial sectors and research column-free office space. Expected to be and development services. The project is completed by 2017, this will be Mapletree’s expected to be completed in the first half first greenfield commercial development in of 2016 at a development cost of about Hong Kong SAR. S$250 million. • Festival Walk, in recognition of its commitment to provide shoppers with January 2014 an enhanced shopping experience, was named ‘Top 10 Favourite Shopping Malls in • Mapletree awarded the construction of the Hong Kong’ at the ‘Shopping Mall Awards second phase of MBC (MBC II) to Shimizu 2013’ organised by leading local media Corporation, also the main contractor for the Hong Kong Economic Times and Sky Post. first phase of MBC, which was completed

Mapletree Benoi Logistics Hub, Singapore Mapletree Investments Pte Ltd Annual Report 2013/2014 Highlights of the Year 31

February 2014 March 2014 • Mapletree obtained the LEED precertification Gold level by the Indian Green Building Council for Global • Mapletree received a certificate of • Mapletree received international Technology Park (GTP) in Bangalore, India. outstanding merit for its pioneering efforts recognition for its expertise in capital As Mapletree’s first development project as one of the first business entities to set management when the 2013 Global PERE in India, GTP’s design is benchmarked up in Binh Duong New City, Vietnam. The Awards named it ‘Asia Capital Raise of the against local and international standards, award recognised Mapletree’s contributions Year’. A testament to the successful launch incorporating green technology features to towards the development of the emerging of MCOF II, the award affirmed Mapletree’s create a sustainable business township through its 75-hectare integrated competence in generating consistent and park environment. business and industrial park, Mapletree high returns from successful investments Business City @ Binh Duong. The mixed- in the China market. use development enjoys 100% occupancy for its completed Ready-Built Business • MIT announced the acquisition of a Space (Phase 1A and Phase 1B). four-storey light industrial building for approximately S$14.1 million3 in the • Mapletree obtained the Certificate of Changi North Industrial Estate. With a Compliance and Completion for Jaya GFA of 6,290 sqm, the property is used Shopping Centre in Malaysia following for manufacturing, warehousing and as an a MYR400 million transformation. With a ancillary office. Easily accessible via major net lettable area of 23,600 sqm, the new expressways, the property is near the Pasir Jaya Shopping Centre has almost doubled Ris and Tampines regional centres as well its previous retail space. Spanning seven as Changi Airport. Following the completion storeys and divided into various zones, the of this acquisition in 2Q 20144, MIT’s mall is located in a popular neighbourhood portfolio will increase to 84 properties. shopping spot in Petaling Jaya, which Artist impression of Global Technology Park, India will cater to a variety of consumers. Jaya • The Group celebrated the groundbreaking Shopping Centre was 80% pre-leased prior of Mapletree Wuxi New District Logistics • Mapletree commenced the construction to its re-opening. Park in Jiangsu Province, China. The of Mapletree Logistics Hub Tsing Yi, planned Grade-A logistics facility will a 12-storey ramp-up Grade-A logistics house four blocks of two-storey ramp- facility located in Hong Kong SAR. With a up warehouses spanning a total GFA of total GFA of 85,000 sqm, the development 124,000 sqm. Strategically located along is well-connected to the city centre, the China’s Yangtze River Delta and well- Hong Kong International Airport and connected to key transportation networks, the mainland China border via major the facility is ideally located for regional expressways. It will also enjoy improved distribution purposes serving Wuxi’s accessibility to Macau and Tuen Mun when economically vibrant market. the Hong Kong-Zhuhai-Macau bridge and Tuen Mun-Chek Lap Kok Link are • MIT inked an agreement with Hewlett- completed in 2016 and 2018 respectively. Packard Singapore to develop a new BTS facility at its existing Telok Blangah Cluster. This will be MIT’s largest BTS project to date. With a total GFA of 76,500 sqm, the proposed redevelopment will reposition the cluster into a high-tech industrial cluster Jaya Shopping Centre, Malaysia when completed in the first half of 2017.

3 Includes purchase consideration of S$12.0 million, land premium and other acquisition-related expenses 4 Subject to approval from the relevant authorities and satisfaction of certain conditions (including the land premium payable for the remaining land lease for the first 30-year term) 32 Financial Review

Income Statement For the Financial Year Ended 31 March (S$ million)

2010 2011 2012 2013 2014 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14

Revenue 453.5 590.2 574.4 686.3 548.6

Earnings before interest and tax (EBIT) 277.3 346.8 275.5 388.1 269.1

Share of profits of associated companies and joint ventures (SOA) (operating) 65.0 75.5 153.6 151.5 202.9

EBIT + SOA (operating) 342.3 422.3 429.1 539.6 472.0

Net finance cost (62.9) (74.7) (82.4) (100.3) (42.1)

Revaluation gains1 180.1 385.6 266.4 297.5 478.0

Corporate restructuring surplus and disposal gains - 111.9 63.6 259.1 14.6

Other gains and losses2 3.2 11.2 19.2 21.9 3.9

Profit before tax 462.7 856.3 695.9 1,017.8 926.4

Income tax expense (47.0) (63.9) (62.7) (76.8) (58.6)

Minority interests (6.8) (6.5) (7.4) (9.3) (8.4)

Profit after tax and minority interests 408.9 785.9 625.8 931.7 859.4

Operational profit after tax and minority interests3 236.5 389.1 1,200.4 761.8 373.9

Notes: 1 Net of tax and minority interests and including share of associated companies’ and joint ventures’ revaluation gains.

2 Other gains and losses refer to mark-to-market fair value adjustments, negative goodwill, dilution gains or losses and the like.

3 Operational profit after tax and minority interests (Operational PATMI) denotes net income derived from the underlying operating activities of the Group including, inter-alia, real estate rental and sales activities, capital management fee income businesses, investments in real estate related assets and/or securities, and corporate restructuring surplus or deficit. Any gains or losses on disposal and corporate restructuring surplus or deficit are measured based on the relevant original invested costs. Gains or losses on foreign exchange, fair value adjustments for financial derivatives and financial assets available-for-sale (per FRS 39 Financial Instruments: Recognition and Measurement), unrealised gains or losses, inter-alia, revaluation gains or losses, negative goodwill and dilution gains or losses are not included. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Review 33

Balance Sheet As at 31 March (S$ million)

2010 2011 2012 2013 2014 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14

Assets Investment properties: Completed properties 5,408.6 7,042.5 7,744.3 4,228.3 4,393.3 Under redevelopment 1,058.6 26.9 29.0 30.4 304.1 Residential investment property held for sale - 16.3 16.3 15.7 15.9

Properties under development 186.8 175.7 433.3 470.3 1,367.3

Property, plant and equipment 5.9 12.4 12.3 11.5 9.5

Investments in associated companies and joint ventures 1,672.8 1,745.1 2,668.0 3,895.8 4,022.3

Cash and cash equivalents 174.8 277.4 1,048.2 1,742.8 303.3

Others 263.2 400.0 311.6 366.5 349.7

Total Assets 8,770.7 9,696.3 12,263.0 10,761.3 10,765.4

Liabilities Borrowings/Medium term notes 2,757.8 2,832.6 4,676.3 1,778.6 1,054.8

Deferred income tax liabilities 51.8 93.5 113.3 106.0 118.8

Others 403.1 426.9 534.4 532.8 474.9

Total Liabilities 3,212.7 3,353.0 5,324.0 2,417.4 1,648.5

Net Assets 5,558.0 6,343.3 6,939.0 8,343.9 9,116.9

Shareholder’s funds 5,390.0 6,159.0 6,691.4 7,508.7 8,273.0

Perpetual securities - - - 597.1 597.1

Non-controlling interests 168.0 184.3 247.6 238.1 246.8

Total Equity 5,558.0 6,343.3 6,939.0 8,343.9 9,116.9

Key Highlights – FY13/14 City (MBC) Shanghai and VivoCity Performance Over Five Years Shanghai in Minhang, and South Station • The Group achieved profit after tax and Enterprise City in Foshan. MBC Shanghai • Shareholder’s funds grew by S$3.3 billion minority interests (PATMI) of S$859.4 million comprises seven blocks of Grade-A over a five-year period to S$8.3 billion as and Operational PATMI1 of S$373.9 million office buildings and VivoCity Shanghai is at 31 March 2014. The net asset value for FY13/14. a one-stop shopping and lifestyle mall. compounded annual growth rate (NAV South Station Enterprise City comprises CAGR)3 since 31 March 2009 was 11.4%. • PATMI from recurring activities was 23 premium office buildings, ranging from S$363.5 million in FY13/14, representing nine to 21 storeys. • PATMI grew from S$408.9 million in a growth of 12% as compared to FY09/10 to S$859.4 million in FY13/14, S$323.7 million in FY12/13. The Group • Mapletree acquired CentrePoint, a achieving a compounded annual growth recorded net revaluation gains of 15-storey office building in Ho Chi Minh rate (CAGR) of 20%. S$478.0 million, an increase of 61% from City, Vietnam, in April 2013. CentrePoint FY12/13 of S$297.5 million. Corporate is located in the Phu Nhuan District and is • Operational PATMI grew from S$236.5 restructuring surplus for FY13/14 was strategically sited between Ho Chi Minh million in FY09/10 to S$373.9 million in S$14.6 million, significantly reduced from City’s Central Business District and the FY13/14, representing a CAGR of 12%. that recorded in FY12/13. In FY12/13, the Tan Son Nhat International Airport. Group recorded corporate restructuring • Fee income increased from S$80.5 million surplus of S$259.1 million from the initial • Mapletree also succeeded in bidding for in FY09/10 to S$203.2 million in FY13/14 at public offering (IPO) of Mapletree Greater three prime sites, namely the Kowloon East a CAGR of 26%, as the Group successfully China Commercial Trust (MGCCT), and commercial site and the Tsing Yi logistics listed three real estate investment trusts the acquisition of Mapletree Anson by site in Hong Kong SAR, and the Tai Seng (REITs) and launched three new private Mapletree Commercial Trust (MCT). industrial site in Singapore. The Group real estate funds over the last five years. also made significant inroads into logistics • Return on equity (ROE) was 10.6% for development projects in China, securing • Total owned and managed real estate FY13/14 and return on invested equity2 three land parcels for development and assets grew by 2.1 times from (ROIE) was 6.4%. several other investment agreements. S$11.8 billion as at April 2009 to S$24.6 billion as at March 2014. • During the year, Mapletree raised a • As of 31 March 2014, the Group’s net US$1.4 billion equity commitment for gearing stood at 8.2% and the Group Mapletree China Opportunity Fund II has cash and undrawn banking facilities (MCOF II), well above the initial target totalling S$2.8 billion, providing strong of US$1.0 billion. MCOF II is the second financial flexibility for the Group to fund China fund sponsored by Mapletree, a future investments. sequel to the fully-deployed US$1.2 billion Mapletree India China Fund (MIC Fund). • Mapletree continued its corporate social MCOF II is one of the largest China- responsibility efforts by allocating another focused private real estate funds to date S$2.0 million to the Mapletree Corporate and was awarded the 2013 Global PERE and Staff Social Responsibility Programme Award – Asia Capital Raise of the Year. (CSSR), bringing the total pledge since the programme first started in FY10/11 to • MCOF II’s initial portfolio consists of stakes S$9.0 million. (For more information, please in two mixed-use development projects. refer to the Corporate Social Responsibility They are the combined Mapletree Business section from page 64 to 67).

Notes: 1 Operational PATMI denotes net income derived from the underlying operating activities of the Group including, inter-alia, real estate rental and sales activities, capital management fee income businesses, investments in real estate related assets and/or securities, and corporate restructuring surplus or deficit. Any gains or losses on disposal and corporate restructuring surplus or deficit are measured based on the relevant original invested costs. Gains or losses on foreign exchange, fair value adjustments for financial derivatives and financial assets available-for-sale (per FRS 39 Financial Instruments: Recognition and Measurement), unrealised gains or losses, inter-alia, revaluation gains or losses, negative goodwill and dilution gains or losses are not included.

2 ROIE is computed based on Operational PATMI over the Group’s equity from shareholder adjusted for unrealised revaluation gains or losses and such other non-cash flow and non-operating items including mark-to-market fair value adjustments and negative goodwill.

3 NAV is adjusted for dividends distributed to shareholder and calculated excluding non-controlling interests and perpetual securities and with NAV as of 31 March 2009 as starting base. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Review 35

Revenue

Sources of Revenue (%)

800

700 1%

3% 27% 600 1% 1% 1% 21% 24% 500 5% 37% 400 18%

300 72% 75% 75% 200 77% 62%

100

0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$453.5M S$590.2M S$574.4M S$686.3M S$548.6M

Rental Revenue Fee Income Sale of Residential Units Others

In FY13/14, Mapletree achieved a total Lower total revenue was mainly due to MBC achieved 98% weighted average revenue of S$548.6 million, compared to the de-consolidation of Festival Walk and occupancy in FY13/14 (FY12/13: 92%) and FY12/13 of S$686.3 million. Rental revenue Mapletree Anson, which together contributed contributed rental revenue of S$105.1 million, accounted for 62% of total revenue vis-à-vis total rental revenue of S$183.8 million in representing an increase of S$8.5 million 72% in FY12/13, and fee income was 37% of FY12/13. Festival Walk was divested in over FY12/13. total revenue, compared to 27% in FY12/13. March 2013 to MGCCT as one of the IPO The change in mix of revenue contributors is portfolio assets, and Mapletree Anson Fee income continued its growth momentum in line with Mapletree’s asset-light business was divested to MCT in February 2013. and stood at S$203.2 million in FY13/14, model and the Group’s focus on its capital Rental revenue from the Group’s Singapore an increase of S$15.1 million or 8% from management business. Commercial properties contributed a the fee income of S$188.1 million recorded significant 47% to total revenue in FY13/14. in FY12/13. 36

Rental Revenue Y-O-Y Analysis The Group’s rental revenue was lower by S$152.8 million or 31% year-on-year (y-o-y), 500 183.8 primarily due to the de-consolidation of Festival Walk and Mapletree Anson.

400 Excluding the revenue contribution from 10% 340.9 Festival Walk and Mapletree Anson in 300 309.9 FY12/13, the Group achieved 10% growth from its existing portfolio. The growth in

200 rental revenue was primarily driven by Festival Walk/ higher occupancy at MBC and a stronger Mapletree Anson operating performance from properties in the 100 Existing Properties HarbourFront Precinct, as well as new income streams from two newly completed logistics 0 assets in Japan, one newly completed (S$ million) FY12/13 FY13/14 logistics asset in China and CentrePoint in Vietnam, which was acquired in April 2013.

Fee Income Y-O-Y Analysis

250

Fee Income by Type Fee Income by Business Unit

1.3 1.0 0.1 200 36.5 78.8 2.3 41.2 1.2 2.3 68.4

44.5 150 55.5

30.1 40.5 37.7 100 23.2 93.0 44.1 43.3 68.2

50 32.1 37.3

0 (S$ million) FY12/13 FY13/14 FY12/13 FY13/14

Base and Performance Fees from REITs Property and Development Singapore Commercial China and India Others Management Fees Base Fee from Private Real Estate Funds Logistics North Asia Acquisition and Incentive Fees Singapore Industrial South East Asia

Fee income was S$203.2 million in FY13/14, capital management income sources was Base and performance fees from REITs saw representing an 8% y-o-y increase. Growth in partially offset by lower acquisition and an increase of S$24.8 million or 36% over fee income was largely driven by the launch incentive fees recorded in FY13/14. In FY12/13, mainly due to a full year contribution of MCOF II and from MGCCT which was listed FY12/13, the Group recorded an incentive fee from MGCCT and the continued growth in in March 2013. Both platforms combined of S$36.3 million from the MIC Fund arising the REITs’ businesses. contributed S$57.0 million in total fee income. from its divestment of Gateway Plaza to The increase in contribution from these new MGCCT as one of its IPO portfolio assets. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Review 37

Earnings Profiles

PATMI and Operational PATMI1

1,200 1,200.4

1,000 297.5 478.0 800 385.6 761.8

266.4 600 310.5

180.1 389.1 400 150.6 373.9 17.9 84.6 363.5 323.7 274.8 236.5 3.3 249.7 200 225.5

0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14

Recurring Core PATMI Investment & Other Gains Revaluation Gains Operational PATMI

The Group achieved a PATMI of S$859.4 million Revaluation gains increased from Mapletree Anson to MCT, and share of MIC in FY13/14 compared to FY12/13 PATMI of S$297.5 million in FY12/13 to S$478.0 million Fund’s realised gain of S$124.9 million on the S$931.7 million in FY12/13. in FY13/14 largely due to the strong disposal of Gateway Plaza to MGCCT. performance of Mapletree’s owned and Recurring core PATMI grew by 12% from managed real estate assets. The Group achieved Operational PATMI of FY12/13. Earnings diluted by the MGCCT S$373.9 million in FY13/14, compared to IPO and the divestment of Mapletree Anson The Group recorded investment & other gains S$761.8 million in FY12/13. Operational PATMI to MCT in FY12/13 were replaced by new of S$17.9 million, mainly from the corporate in FY12/13 included a corporate restructuring income streams from newly completed restructuring surplus of S$13.7 million from the surplus and share of associated companies’ logistics properties, the newly acquired divestment of a 31.5% stake in the Minhang gain on disposal measured from original CentrePoint, a better operating performance development project, and a 80% stake in invested cost of S$427.0 million, mainly from of the HarbourFront Precinct properties as well South Station Enterprise City to MCOF II. The the listing of MGCCT and the divestment of as improved occupancy at MBC. In addition, investment & other gains of S$310.5 million in Mapletree Anson to MCT. net interest expense was reduced from FY12/13 included the corporate restructuring S$100.3 million in FY12/13 to S$42.1 million surplus of S$134.2 million from Mapletree’s in FY13/14. divestment of Festival Walk to MGCCT and

Ebit + Soa1 (Including Share of Associates’ Gain on Disposal) Y-O-Y Growth Analysis by Business Unit

800 1.5 26.5 9.7 150.1 10.6 142.9 700

73.4 600 149.5 3.5 2.0 5.0 69.5 500 77.9 68.2

400 95.2 121.7

300 291.2 280.6

200

100

0 (84.1) (0.6) (S$ million) (82.1)

FY12/13 FY13/14 S$664.4M S$472.0M

Singapore Commercial Singapore Industrial North Asia Others Logistics China and India South East Asia

EBIT + SOA (including share of associates’ earnings growth of 8% on MBC and the Fund’s gain of S$124.9 million on disposal gain on disposal) was S$472.0 million in HarbourFront Precinct assets. of Gateway Plaza, and incentive fee of FY13/14, compared to S$664.4 million in S$36.3 million recognised from the MIC FY12/13. This was largely due to the dilution • Logistics BU reported an increase Fund in FY12/13. MCOF II contributed of earnings from Festival Walk and Mapletree of S$26.5 million mainly from newly new fee revenue of S$20.5 million to the Anson following their divestments in late completed logistics properties in Japan BU and share of loss as its portfolio of FY12/13 to MGCCT and MCT respectively and China, and share of higher profits assets are still under development. and the absence of share of MIC Fund’s from Mapletree Logistics Trust (MLT). gain on the disposal of Gateway Plaza • North Asia BU recorded a lower recorded in FY12/13. • Singapore Industrial BU posted an increase EBIT + SOA of S$73.4 million mainly of S$9.7 million mainly from its share of due the absence of Festival Walk’s • Singapore Commercial business unit (BU) higher profit from Mapletree Industrial contribution of S$128.4 million recorded recorded a lower EBIT + SOA of Trust (MIT), and higher fee revenue from in FY12/13. MGCCT contributed new S$10.6 million over FY12/13 mainly due the enlarged portfolio of MIT. fee revenue of S$34.5 million and share to the absence of Mapletree Anson’s of results of S$35.6 million in FY13/14. contribution as well as the decantment • China and India BU recorded a lower of The Comtech for redevelopment into EBIT + SOA of S$150.1 million mainly MBC II. The BU maintained a steady due to the absence in share of the MIC

Notes: 1 EBIT + SOA denotes earnings before interest and tax plus share of profits of associated companies and joint ventures. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Review 39

Earnings Ratio

Average Shareholder’s Funds, Roe1 (%) and Roie2 (%)

30% 29.4%

25%

20% Five-year average ROIE Five-year average 15% 14.1% ROE 14.6% 13.6% 12.8% 10.9% 12.0% 10.6% 10% 9.7%

7.9% 8.0% 6.4% 5%

FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$5,170.2M S$5,774.5M S$6,425.2M S$7,100.1M S$7,890.9M

Average Shareholder’s Funds ROE ROIE

The Group delivered strong returns to its From an operational point of view, the Group The Group recorded a high ROIE in FY12/13 shareholder with a ROE of 10.6% for FY13/14. believes that ROIE is more meaningful. mainly due to the MGCCT IPO and the For the last five financial years, the average This ratio captures the operating returns divestment of Mapletree Anson to MCT. ROE was 10.9%. of the Group for the amount invested by its Whilst recurring PATMI grew in FY13/14 shareholder in the underlying businesses by 12%, the absence of a corporate ROE for a property capital manager is and adjusts for the effect of non-operating restructuring surplus (measured from naturally volatile given that gains or losses and non-cash flow items, such as unrealised original invested costs) contributed to the from the revaluation of investment properties, investment properties’ revaluation gains lower ROIE of 6.4% in FY13/14. For the last in accordance with Singapore Financial and losses, negative goodwill, dilution gains five financial years, the average ROIE was Reporting Standards 40, can be significant or losses and fair value adjustments for strong at 14.1%. and largely influenced by the realisation of financial derivatives and available-for-sale properties in certain years. financial assets.

Notes: 1 ROE denotes return on equity

2 ROIE denotes return on invested equity and is computed based on Operational PATMI over the Group’s equity from shareholder adjusted for unrealised revaluation gains or losses and such other non-cash flow and non-operating items including mark-to-market fair value adjustments and negative goodwill. 40

Total Asset Base and Shareholder’s Funds

Total Asset Base1

12,000 312 2,668 350 10,000 4,022 400 1,745 367 263 3,896 1,673 433 8,000 7,744 176 187 7,043 1,059 6,000 1,367 5,409 470 304 4,393 4,000 4,228

2,000

0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$8,595.9M S$9,418.9M S$11,214.8M S$9,018.5M S$10,462.1M

Investment Properties - Completed Properties Under Development Others Residential Investment Property Held for Sale Property, Plant and Equipment Investment Properties - Under Redeveloment Investment in Associated Companies and Joint Ventures

Total assets excluding cash and cash equivalents of the Group as at 31 March 2014 grew 16%, or S$1.4 billion, to S$10.5 billion compared to 31 March 2013.

During the financial year, the Group’s acquisition of CentrePoint and the land acquisitions in Kowloon East, Tsing Yi and Tai Seng resulted in an increase in investment properties and properties under development.

Notes: 1 Excluding cash and cash equivalents Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Review 41

Shareholder’s Funds

10.0 Capital uplift of portfolio MGCCT IPO and MCT IPO and capital uplift of capital uplift of portfolio portfolio 8.3 8.0 MLHF, MBC and MIT IPO and capital Mapletree Anson uplift of Singapore 7.5 development portfolio value-add 6.7 6.2 6.0 5.4 5.0

4.0

2.0

0 (S$ billion) FY08/09 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14

The Group’s precinct rejuvenation and real Shareholder’s funds grew from S$5.0 billion estate capital management strategies since as at 31 March 2009 to S$8.3 billion as at FY06/07 have added considerable value 31 March 2014. NAV CAGR1 since 31 March to its shareholder. This is evident from the 2009 was a healthy 11.4%. The Group has increasing recurring core PATMI, significant created significant value in the development development value-add and revaluation gains of Bank of America Merrill Lynch HarbourFront of the portfolio over the past few years. (MLHF), Mapletree Anson and MBC. These assets, as well as the strong operating The increase in shareholder’s funds from performance from the rest of the Group’s S$7.5 billion in FY12/13 to S$8.3 billion owned and managed assets, resulted in in FY13/14 is the result of the Group’s significant revaluation gains. PATMI of S$859.4 million.

Notes: 1 NAV is adjusted for dividends distributed to shareholder and calculated excluding non-controlling interests and perpetual securities and with NAV as of 31 March 2009 as starting base. 42

Third-Party Aum by Segment (%)

1% 1% 1% 8% 1% 1% 9% 23% 24%

Mapletree Logistics Trust

Mapletree Industrial Trust 26% FY12/13 26% FY13/14 Mapletree Commercial Trust S$16,744M S$18,224M Mapletree Greater China Commercial Trust Mapletree India China Fund 17% 17% Mapletree Industrial Fund

Mapletree China Opportunity Fund II CIMB-Mapletree 23% Real Estate Fund 1 22%

During the financial year, third-party AUM grew assets within the REIT portfolios as well as by S$1.5 billion from S$16.7 billion in FY12/13 the development activities in the MIC Fund to S$18.2 billion in FY13/14. The increase is and MCOF II. mainly attributable to the revaluation gains of

Total Real Estate Assets Base (Owned and Managed) and Net Gearing

25,000 52%

47% 20,000 40%

15,000 74% 57% 77% 51% 10,000 47% Owned Assets Third-Party AUM

Net Debt/Equity 5,000 43% 8% 53% 49% 23% 26% 0% 0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$12,939M S$15,422M S$19,851M S$21,764M S$24,605M

Mapletree has achieved significant growth over the last five years while at the same time the acquisition of CentrePoint, the Group’s in its real estate asset base in the last five lowering its net gearing, without additional successful land acquisitions, development years and the five-year compounded annual capital from its shareholder. activities, and the capital uplift of the REIT growth rate is 16%. With an asset-light portfolios and the Group’s owned assets. business model and success in executing Total owned and managed real estate assets its capital management strategy, Mapletree increased from S$21.8 billion in FY12/13 to has achieved significant increase in scale S$24.6 billion in FY13/14 mainly driven by Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Review 43

Total Owned and Managed Real Estate Assets by Business Units (%)

25,000 1% 3%

1% 2% 23% 20,000 1% 2% 22% 18% 7% 6% 3% 7% 15,000 1% 3% 13% 9% 13% 3% 4% 14% 1% 3% 14% 13% 21% 10,000 22% 23% 25% 26%

5,000 50% 45% 35% 34% 32%

0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$12,939M S$15,422M S$19,851M S$21,764M S$24,605M

Singapore Commercial Singapore Industrial North Asia Others Logistics China and India South East Asia

In April 2012, the Group was reorganised to better align its focus and business structure. Mapletree was previously organised by “property type”, with BUs in logistics, industrial, commercial/retail and regional investments. The Group has since been reorganised with a greater focus on geography, except where property type focus is important, such as Logistics and Singapore Industrial.

Singapore Commercial BU continues to be the largest BU measured by total owned and managed real estate assets, accounting for 32% of total AUM. With the acquisition of the Kowloon East commercial site and portfolio gains recorded by MGCCT, North Asia BU is now the second largest BU. 44

Total Owned and Managed Real Estate Assets by Country (%)

25,000 1% 1% 2% 2% 7% 1% 2% 2% 13% 8% 20,000 1% 2% 2% 9% 13% 21% 9% 19% 3% 15,000 2% 20% 1% 9% 3% 1% 12% 2% 7% 6% 4% 10,000 6%

55% 53% 57% 69% 5,000 75%

0 (S$ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 S$12,939M S$15,422M S$19,851M S$21,764M S$24,605M

Singapore China Malaysia South Korea India Hong Kong SAR Japan Vietnam Indonesia

Mapletree continued to make significant expansion of its regional footprint outside Singapore. Notwithstanding that, majority of its total owned and managed real estate assets continue to be in Singapore at 53%. During the year, Mapletree has grown in presence in the developed economy of Hong Kong SAR with successful land bids for the Tsing Yi logistics site and the Kowloon East commercial site. 45 Corporate Liquidity and Financial Resources1

Prudent capital policy. The US economy has shown signs Financial Resources of improvement in economic activity and and Liquidity management and labour market conditions. The Eurozone is showing tentative signs of slowly pulling itself financial flexibility out from recession, while China achieved a Financial Capacity (S$ million) to fuel the Group’s modest 7.7% GDP growth in 2013 amid a new Cash 303 leadership and ensuing reforms. In Singapore, Undrawn Banking Facilities 2,491 growth the Monetary Authority of Singapore (MAS) has kept its policy of a modest and gradual Total 2,794 appreciation of the SGD unchanged, keeping Issue Capacity under MTN 4,812 Financial Market Review SGD interest rates subdued. Programmes

The global economy continued to be in a During the year, the Group continued to build As at 31 March 2014, the Group had cash state of uncertainty over the impact of the a strong base of funding resources to support reserves and undrawn banking facilities US Quantitative Easing (QE) tapering plan its operations and investment needs, and of S$2.8 billion. In addition, the Group has and geopolitical tensions. The Fed began the also to capitalise on opportunities that may a S$2 billion domestic Medium Term Note tapering of its QE programme in December arise. On an ongoing basis, the Group also (MTN) Programme and a US$3 billion Euro 2013 with a reduction of US$10 billion of monitors its cash flow position, debt maturity MTN Programme, which enable the Group the monthly purchase of US Treasuries and profile, cost of funds, foreign exchange and to tap on an ongoing basis the debt capital mortgage-backed securities. It is expected interest rate exposures, and overall liquidity markets for issues in various currencies and to complete tapering by the end of 2014. position. To ensure financial flexibility, scenario longer dated funding, hence achieving further The Fed also indicated that it would look analyses including stress tests are performed diversification of funding sources. at a broader array of economic indicators regularly to assess the potential impact of and financial conditions on its interest rate market conditions on its financial position.

Bank Facilities Availability and Utilisation (S$ million)

3,763

FY12/13 27% 73%

3,133

FY13/14 20% 80%

0 1,000 2,000 3,000 4,000

Amount utilised Available and unutilised

1 Loans from related parties have been excluded from the analysis 46

Debt and Gearing Debt Gearing As at 31 March 2014, the Group recorded 10,000 a net debt of S$729 million as compared to 9,117 S$16 million a year ago. Net gearing edged 8,344 up to 0.08 times as at 31 March 2014 from 8,000 almost zero a year ago.

During the year, the Group actively utilised 6,000 the SGD cash proceeds from the divestment Net Debt of properties in the prior year to repay loans 4,000 Equity and fund land acquisitions and investments Net Debt/Equity Ratio in various currencies. To maintain the asset- (times) liability matching in the respective currencies, 2,000 729 the Group has entered into various derivatives 16 0 0.08 including foreign exchange swaps and cross 0 currency interest rate swaps. This has helped (S$ million) FY12/13 FY13/14 achieve interest savings for the Group while maintaining the asset-liability matching.

As at As at Maturity Profile as at 31 March 2014 (S$ million) 31 March 31 March 2013 2014 500 (S$ million) (S$ million) Gross Debt 1,759 1,032 39% 400 Cash 1,743 303 Cash Net Debt 16 729 S$303m 300 As at 31 March 2014, all of the Group’s borrowings were from committed banking 20% 20% facilities and medium- to long-term 200 16% bond issuance.

The Group makes a conscious effort to spread 100 5% out its debt maturity profile to align with its cash flow plans and to reduce refinancing risks. The average life of its existing gross 0 debt portfolio was 3.1 years as at 31 March FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 & beyond 2014, longer than 2.4 years a year ago. As at the date of this report, the Group has more than sufficient resources to support its refinancing needs. Fixed vs Float

As at 31 March 2014, S$605 million of the Group’s borrowings were secured by investment properties, mainly in Japan. This constituted only 6% of the Group’s total assets. Float Float The Group continues to maintain and build an 27% 47% active relationship with a network of more than Fixed Fixed 35 banks of various nationalities. The Group adopts the philosophy of engaging the banks 73% 53% as its business partners. The diversification of financial institutions has enabled the Group to tap on the different competencies and strengths of its relationship banks to enhance FY12/13 FY13/14 its business strategy and growth in Singapore and abroad. Mapletree Investments Pte Ltd Annual Report 2013/2014 Corporate Liquidity and Financial Resources 47

The Group managed its interest cost by maintaining a balanced mix of fixed and Debt Profile (Currency Breakdown) floating rate borrowings as part of its liability management strategy. Fixed rate borrowings 4% 5% comprised 53% of the Group’s gross debt (74% on a net debt basis) with the balance on 16% floating rates. Factors taken into consideration in determining the interest rate profile include the interest rate outlook, the investment holding period, as well as the expected cash FY12/13 52% FY13/14 54% SGD flows generated from its business operations. JPY 41% USD Where feasible, the Group adopts a natural 28% Others hedge policy to mitigate exposure to foreign exchange risks. As at 31 March 2014, the Group has drawn foreign currency loans to fund investments which were denominated in the same currencies. The Group has also entered into foreign exchange contracts Overview of Asset Base and Capital Structure as at 31 March 2014 (in USD, HKD, JPY, CNH and MYR) to hedge the currency exposure of certain overseas investments. Assets

In FY13/14, the Group’s interest cover ratio and cash flow cover ratio were very healthy at 10.5 times (FY12/13: 6.4 times) and 11.5 times 75.1% 7.4% 8.6% 6.0% 2.9% (FY12/13: 5.8 times) respectively, due mainly to lower interest expense. Liabilities* & Equity

73.5% 8.4% 5.0% 5.6% 5.5% 2.0%

Equity Liabilities

SGD HKD USD JPY Others

Interest Cover Ratio Cash Flow Cover Ratio

664.4 700 700 581.1 600 600 515.3 500 472.0 500 400 400 11.5 10.5 6.4 300 300 5.8 200 200 103.3 100.3 100 45.1 100 44.9 0 0 (S$ million) FY12/13 FY13/14 (S$ million) FY12/13 FY13/14

EBIT and Share of Associates’ Income Interest Cover Ratio (times) Operating Cash Flow Cash Flow Cover Ratio (times)

Net Interest Expense Net Interest Paid

* Adjusted for foreign exchange swaps and cross currency interest rate swaps 48 Mapletree Investments Pte Ltd Annual Report 2013/2014 Singapore Commercial 49 Operations Review Singapore Commercial

2013, as well as the Singapore Building and S$900 million – a new record. Meanwhile, the and replacement. The retail market outlook Construction Authority (BCA) Green Mark offices at PSAB achieved 100% occupancy for the next six to 12 months is expected to Platinum Award in January 2014. during FY13/14, with a retention rate of 93.9% remain relatively stable on the back of a low for leases expiring in the year. Alexandra unemployment rate and healthy tourist arrivals. The HarbourFront Precinct continues to grow Retail Centre, the retail component of PSAB, However, rising business costs, especially from strength to strength as a commercial hub. achieved committed occupancy of 97.9%, up from the manpower crunch and new retail This has enabled HFC, HF1 & 2 and St James from 81.9% a year ago. supply of close to 3 million square feet coming Power Station to maintain good operating on stream in 2014, could lead to vacancy performances and provide steady income for Mapletree Anson, an asset that MCT acquired rates inching up. the Group. from its sponsor in February 2013, has contributed positively to MCT’s distributable Under the Urban Redevelopment Authority’s income for FY13/14. Mapletree Anson was References 1. Ministry of Trade and Industry, Singapore Draft Master Plan, the Greater Southern one of the first buildings in Singapore to be 2. CBRE Singapore Market View – Q1 2014 Waterfront is envisioned to be a seamless certified Green Mark Platinum, and was also extension of the city and will open up new the first runner-up in the Energy Efficient live-work-play opportunities. Over time, this Building - New and Existing Category at the will further add to the appeal of the Alexandra ASEAN Energy Awards 2013. Singapore Commercial and HarbourFront precincts. MLHF continued to contribute stable income EBIT + SOA: During the year, Mapletree continued to to the portfolio, and renewed its Green Mark focus on pursuing environment sustainability Gold award during the year. S$280.6 million and green initiatives. Singapore Commercial Fee Income: renewed the Green Mark Platinum award for Market Review and Outlook S$37.3 million MBC and HarbourFront Centre, and secured AUM: VivoCity Mapletree Anson the Green Mark Award for PSA Vista. For its Singapore’s economy grew by 4.1% year-on- user-friendliness within a built environment, year (y-o-y) in 2013. Growth is expected to be S$7.8 billion MBC also received the Universal Design between 2.0% and 4.0% in 2014. Mapletree’s Singapore Commercial business located in the HarbourFront Precinct and as Samsung, BW Maritime, BW Offshore and Mark GoldPLUS Award. unit (Singapore Commercial) manages a Mapletree Anson, located in Singapore’s Credit Agricole have expanded within MBC, Office demand was healthy in the quarter portfolio of real estate assets held under Central Business District (CBD). and occupancy ramped up to above 99% as Mapletree Commercial Trust – ended March 2014 with healthy absorption MCT Mapletree and Mapletree Commercial at 31 March 2014. In October 2013 MBC, in Continued Growth seen for quality space in new projects in the Trust (MCT), a Singapore-listed real estate As at 31 March 2014, Singapore Commercial partnership with the Health Promotion Board, CBD and decentralised locations. Leasing Portfolio: investment trust (REIT). owned and managed about S$7.8 billion in became Singapore’s first ‘Healthy Workplace With the robust performance of its assets, activities were strong in the Grade-A market 4 properties assets. It also contributed S$280.6 million and Ecosystem’. It is the first business hub to MCT reported a distribution per unit (DPU) with better occupancy rates recorded for new 1 Property value: Assets held directly under Mapletree include: S$37.3 million to Mapletree’s EBIT + SOA and promote healthy living at the workplace. of 7.372 cents for FY13/14, representing a developments while high occupancy levels • Mapletree Business City (MBC), fee income respectively. 15.9% increase over the forecast DPU in maintained in majority of the existing buildings. S$4.0 billion a Grade-A integrated office and During the year, Mapletree commenced the Office rents for both Grade-A and Grade-B the Mapletree Anson Acquisition Circular GFA: business park development Singapore Commercial redevelopment of The Comtech, which will published in December 2012, as well as a buildings continued their uptrend in the • The redevelopment of The Comtech form the next phase of MBC (MBC II). The (held directly by Mapletree) 13.6% increase from FY12/13. Gross revenue quarter ended March 2014 with 4.1% - 5.1% > 279,000 sqm into the new phase of MBC (MBC II) success of the current MBC in attracting increased to S$267.2 million and net property growth from the previous quarter. In view of the Gross revenue: • HarbourFront Centre (HFC) premium tenants has anchored Alexandra The Singapore Commercial portfolio of income grew by 25.2% to S$195.3 million. As limited supply in the near term, rental recovery S$267.2 million • HarbourFront Towers One and Two properties performed well in FY13/14, Precinct as a thriving business hub, and at 31 March 2014, MCT’s overall portfolio size is expected to be led by the Grade-A market. NPI: (HF 1 & 2) maintaining high occupancies and generating MBC II aims to continue to serve the demand was S$4.0 billion. • St James Power Station steady returns for the Group. The assets are for quality business space in this precinct. Following a weak performance in retail sales S$195.3 million • PSA Vista Like the current MBC, MBC II will be a product in the quarter ended December 2013, the largely located in two precincts, namely the VivoCity continued to see strong support DPU: Alexandra and HarbourFront precincts, within that will have a leading edge in sustainability from shoppers and tenants. Several zones Retail Sales Index (excluding motor vehicles) The properties in the MCT portfolio are VivoCity, the Greater Southern Waterfront. design. To date, MBC II has been awarded in the mall have been refreshed with new registered a 9.2% increase in January 7.372 cents Singapore’s largest mall; PSA Building (PSAB), the precertification for Leadership Energy and brands and concepts complementing the 2014, due largely to the festive season. Price per unit: an established office and retail development; In Alexandra Precinct, MBC - one of the Environmental Design (LEED) for Core and existing ones. The shoppers have endorsed Demand for retail space remained steady in and two premium office buildings, Bank of Shell Development programme Gold level by S$1.22 Group’s flagship developments - continued these changes with footfall rising 1.4% and the quarter ended March 2014 as retailers (closing price as at 31 March 2014) America Merrill Lynch HarbourFront (MLHF) to attract premium tenants. Key tenants such the U.S. Green Building Council in October tenant sales rising 5.6% for the year to above continued to seek new space for expansion

1 Earnings before interest and tax plus share of profits of associates and joint ventures 50 Mapletree Investments Pte Ltd Annual Report 2013/2014 Singapore Industrial 51 Operations Review Singapore Industrial

200-hectare precinct in Singapore that houses of 6,290 sqm, the property is used mainly for world-class research facilities and business manufacturing and warehousing. Accessible park buildings. It is designed to meet the via major expressways, the property is near Building and Construction Authority (BCA) the Pasir Ris and Tampines regional centres as Green Mark and Leadership in Energy and well as Changi Airport. Upon completion of the Environmental Design (LEED) standards. acquisition in 2Q 2014, this asset will provide Equinix is committed to lease the building for a steady income stream and is expected to be at least 20 years. The long-term lease from accretive to MIT’s DPU. a high-quality tenant will offer MIT income stability and lengthen the portfolio’s weighted Besides the MIT portfolio, the business lease to expiry. unit is also responsible for a development project for the Mapletree Group. In December Woodlands Central Cluster In October 2013, MIT completed the BTS 2013, Mapletree successfully bid for a prime facility for Kulicke & Soffa (K&S), which was industrial site of about 11,780 sqm for References 1. Ministry of Trade and Industry, Singapore developed with environmentally sustainable S$120 million through the government land 2. JTC Corporation features, and accorded the BCA Green Mark sale programme. Located within the Paya Gold Award. The grand opening of K&S Lebar iPark, a 15-hectare modern industrial Corporate Headquarters was held on park in the central-east of Singapore, the 20 February 2014. K&S occupies 69% of plot is strategically located next to Tai Seng Singapore Industrial the 26,500 sqm net lettable area under a MRT station and has a permissible GFA of EBIT + SOA: 10-year lease with the option to renew for 41,230 sqm. Mapletree plans to develop a two more 10-year terms. The five-storey modern high-specification industrial facility S$77.9 million high-specification industrial building houses with office and retail space that caters to Fee Income: facilities for manufacturing, research and businesses in high-value light industrial and K&S Corporate Headquarters Toa Payoh North 1 Cluster development, and a corporate office. research and development services. The S$40.5 million development project is expected to complete AUM: Extracting Value from in the first half of 2016 at a development cost S$3.3 billion of approximately S$250 million. Mapletree’s Singapore Industrial business unit to higher rental rates secured for leases July 2013, adding 6,500 square metres (sqm) New Projects manages a diversified portfolio of industrial across all property segments and higher of gross floor area (GFA) to MIT’s portfolio. A properties held by the Singapore-listed real occupancies in Flatted Factories. number of tenants in the biomedical sectors FY13/14 also saw MIT extend its track record Market Review and Outlook estate investment trust (REIT), Mapletree took up space in the newly created extension in BTS developments through the development MIT MIT’s portfolio of 84 properties continued to Industrial Trust (MIT), as well as a development wing. Tenants in this sector collectively of a S$250 million BTS facility at its existing The Singapore economy grew 4.1% in 2013, demonstrate resilience in FY13/14. Average Portfolio: project under the Mapletree Group. As at accounted for about 76% of the leased area Telok Blangah Cluster for Hewlett-Packard higher than 2012’s 1.9% growth, on the back portfolio occupancy was 92.8%, with average 31 March 2014, the business unit has in the cluster. The AEI at Toa Payoh North 1 Singapore, which was announced in March of strong growth in the manufacturing sector. portfolio rental rate increasing by 6.8% from 84 properties S$3.3 billion in assets under management Cluster saw the development of an eight- 2014. The proposed redevelopment will The manufacturing sector grew by 0.3% in S$1.61 per square foot per month (psf/mth) Property value: (AUM). Its contribution to the Group’s EBIT + storey Hi-Tech Building and a five-storey reposition the cluster as a high-tech industrial 2012 and 1.7% in 2013, due to the robust 1 in FY12/13 to S$1.72 psf/mth in FY13/14. SOA and fee income for FY13/14 was amenity block, as well as the upgrading of cluster, comprising two new buildings with high performance of the transport engineering S$3.2 billion Through proactive lease management and S$77.9 million and S$40.5 million respectively. existing buildings. About 13,900 sqm of GFA specifications. The purpose-built development and electronics clusters. GFA: marketing efforts, MIT achieved a healthy was added to MIT’s portfolio. Following its will include facilities for manufacturing, product tenant retention rate of 73.9% for its large base 1.8 million sqm Mapletree Industrial Trust – completion in January 2014, the cluster has and software development as well as an The median rent for multi-user factory of over 2,000 tenants who operate across a Gross revenue: been repositioned as a high-tech industrial office, occupying a total GFA of approximately space island-wide in 1Q 2014 was flat at Delivering Growth variety of trade sectors. As at 31 March 2014, space for companies engaged in clean and 76,500 sqm. The redevelopment will be in two S$2.00 psf/mth from the same period last overall portfolio size grew to S$3.2 billion from S$299.3 million In FY13/14, MIT’s distributable income of light manufacturing. Leasing interest has been phases and is expected to complete in the year. The median rent for business park S$2.9 billion the year before. NPI: S$166.1 million was 10.0% higher than the strong with commitment secured for about first half of 2017. Hewlett-Packard Singapore space island-wide continued the upward S$151.0 million for the same period last year. 78% of the space created. has committed to fully lease the BTS facility trend to S$4.23 psf/mth in 1Q 2014, 4.4% S$214.7 million Distribution per unit (DPU) grew 7.4% year- Enhancing Assets, for an initial period of 10.5 years. higher than the same period last year. DPU: On 18 April 2013, MIT celebrated the on-year to 9.92 cents. Gross revenue and Customising Solutions Although the pipeline of industrial space 9.92 cents net property income for FY13/14 were groundbreaking of the new build-to-suit (BTS) In March 2014, MIT announced the proposed supply in the market is anticipated to Price per unit: S$299.3 million and S$214.7 million, which During the year, MIT completed two asset data centre development for Equinix. With a acquisition of a four-storey light industrial increase, MIT’s portfolio rent is expected were 8.3% and 9.9% higher than the preceding enhancement initiatives (AEI). The AEI at total GFA of 35,700 sqm, the S$108 million building for approximately S$14.1 million2 in to remain stable in the next 12 months. S$1.365 year. The better performance was attributed Woodlands Central Cluster was completed in development is located at one-north, a the Changi North Industrial Estate. With a GFA (closing price as at 31 March 2014)

1 Earnings before interest and tax plus share of profits of associates and joint ventures 2 Includes purchase consideration of S$12.0 million, land premium and other acquisition-related expenses 52 Mapletree Investments Pte Ltd Annual Report 2013/2014 Logistics 53 Operations Review Logistics

income (NPI) achieved were S$310.7 million In line with portfolio rebalancing efforts, Mapletree also won land tender bids in Xi’an and S$267.6 million respectively, representing MLT enlarged its presence in South Korea and Wuxi, China, for the development of three y-o-y growth of 5% and 4% excluding forex with the acquisition of The Box Centre for logistics facilities with a combined floor area impact. KRW28.75 billion in July 2013. of approximately 240,000 sqm. Construction of the Wuxi project for a 124,000 sqm Grade-A MLT’s overall portfolio remained strong with As part of its capital recycling strategy, logistics facility has commenced in March occupancy of 98.3% as at end-March 2014, MLT is seeking opportunities to divest lower 2014. In addition, investment agreements have while positive rental reversion of 17% was yielding assets and reinvesting the proceeds been signed for another eight up-and-coming achieved for leases renewed during the year. into asset enhancements or acquisitions that logistics hubs across China spanning a total The portfolio also enjoyed stability from its provide higher yields. During the year, MLT floor area of 557,000 sqm. These projects will long lease structure with a weighted average completed the divestment of 30 Woodlands further strengthen Mapletree’s presence in lease term to expiry (by net lettable area) Loop in Singapore for a total consideration China’s growing logistics real estate space. of 4.8 years. of S$15.5 million, recording a net gain of Groundbreaking ceremony of a logistics facility in Wuxi, China S$4.96 million which is being distributed to Mapletree continues to focus on expanding MLT’s balance sheet remained healthy with unitholders over eight quarters from 1Q FY13/14. its customer network, adding over 10 quality a well-staggered debt maturity profile and Capital released from the divestment has customers from diverse industries in FY13/14. an aggregate leverage of 33.3%. The been redeployed into acquiring higher Logistics weighted average borrowing cost was yielding assets. Market Review and Outlook 1.9% while the average debt duration was EBIT + SOA: around 3.6 years. To mitigate the impact of Logistics Development – As uncertainty continued to persist in the S$121.7 million currency and interest rate fluctuations on global economy, Asian economies registered Deepening Presence in Fee Income: distributable income, about 75% of MLT’s overall growth of 5.2% in 2013 compared total debt has been hedged into fixed rates, Growth Markets with the previous year’s 5.3%. Nevertheless, S$43.3 million while approximately 88% of MLT’s FY14/15 The Mapletree Group continued to develop demand for logistics facilities in Asia remained AUM: Mapletree Benoi Logistics Hub, MLT’s first redevelopment project income stream has been hedged into or is logistics parks and facilities in Asia to meet robust. Coupled with the limited supply derived in Singapore dollars. S$5.3 billion demand at locations where quality logistics of quality logistics facilities, rentals and space is lacking. occupancies for logistics assets held steady, The Mapletree Logistics business unit and Construction Authority’s Green Mark During the year, MLT continued to execute while competition for the acquisition of comprises logistics properties held by the Platinum Award – Singapore’s highest its strategy of rejuvenating existing assets to To tap the increasing demand for modern assets intensified. Singapore-listed real estate investment trust certification for environmentally sustainable optimise returns, and rebalancing the portfolio logistics facilities in Hong Kong SAR, MLT (REIT) Mapletree Logistics Trust (MLT), as buildings. MBLH is the first naturally ventilated towards higher growth markets in Asia. In Mapletree secured a prime site of about Asia is projected to grow at around 5.5% in well as several development projects under warehouse in Singapore to earn this accolade. November 2013, the redevelopment of MBLH Portfolio: 21,000 sqm in Tsing Yi for HK$1.69 billion. 2014, supported by resilient domestic demand the Mapletree Group. As at 31 March 2014, was completed with a 100% lease commitment The planned modern, multi-storey ramp-up and a gradual pickup in exports. Mapletree 111 properties Mapletree’s logistics properties have a and provided a NPI yield of 9%. The modern, will remain focused on driving organic growth Mapletree Logistics Trust – logistics facility will be Mapletree’s first Property value: combined value of S$5.3 billion. Mapletree five-storey ramp-up warehouse spans a gross greenfield development in the territory. from the existing portfolio through proactive Logistics’ EBIT + SOA1 for FY13/14 was Stable Returns, floor area (GFA) of 92,500 square metres Located close to the Kwai Chung Container leasing efforts and asset enhancements. S$4.2 billion S$121.7 million, while fee income was Resilient Portfolio (sqm), representing a four-fold increase from Terminal and well-connected to the city At the same time, it will selectively pursue GFA: S$43.3 million. the original 22,500 sqm. MLT has identified opportunities for strategic acquisitions In FY13/14, MLT continued to deliver stable centre, the Hong Kong International Airport 5B Toh Guan Road East in Singapore as its while maintaining a disciplined capital 2.9 million sqm and growing returns to unitholders. Distribution and the mainland China border, the site is MLT, which invests in logistics properties next redevelopment opportunity. This initiative management approach. As part of its capital Gross revenue: per unit (DPU) increased 7.1% year-on-year a choice location for freight forwarding and across Asia, continued to make strides in its will transform the asset from a three-storey recycling strategy, Mapletree will continue (y-o-y) to 7.35 cents, on the back of strong local distribution. Scheduled for completion S$310.7 million efforts to rebalance and rejuvenate its portfolio warehouse with cargo lift to a six-storey to seek opportunities for divesting lower positive rental reversions, contributions from by 2017, active marketing is underway to NPI: during the year. The REIT manager, Mapletree ramp-up logistics facility, increasing GFA yielding assets and reinvesting the proceeds acquisitions and lower financing costs. secure pre-commitments for this project. Logistics Trust Management Ltd. was named by 2.7 times to 63,500 sqm. into higher yielding assets. With a healthy S$267.6 million Frost & Sullivan’s 2013 Asia Pacific Logistics balance sheet, Mapletree is well positioned to Over the year, the Japanese Yen depreciated In August 2013, Mapletree completed its DPU: Infrastructure Developer of the Year, and Other asset enhancements include the capitalise on opportunities when they arise. 20%. However, as income streams from Japan sixth logistics development project in China, one of Singapore’s Top 50 Brands by Brand installation of solar panels at four properties 7.35 cents had been substantially hedged, the impact on Mapletree Zhengzhou International Logistics Finance for the second year running. MLT’s in Japan. The second phase, expected to Price per unit: distributable income to unitholders was largely Park. Strategically located with easy first redevelopment project, Mapletree Benoi commence in FY14/15, will see installations mitigated. Gross revenue and net property accessibility via key transportation networks, Reference S$1.045 Logistics Hub (MBLH), received the Building at five more properties in Japan. 1. International Monetary Fund, World Economic the 79,319 sqm GFA Grade-A facility has (closing price as at 31 March 2014) Outlook, April 2014 achieved near 100% occupancy.

1 Earnings before interest and tax plus share of profits of associates and joint ventures 54 Mapletree Investments Pte Ltd Annual Report 2013/2014 China and India 55 Operations Review China and India

Gold and Silver level precertification with about 26,000 sqm of net lettable area respectively. This is the first international (NLA). To capitalise on the growing demand accolade for Mapletree’s China developments, for quality business space in Bangalore’s demonstrating the Group’s commitment to IT sector, Mapletree will develop more than extend environmentally sustainable building 160,000 sqm in NLA of ready-built and processes beyond Singapore. build-to-suit IT space. Constructed in phases, completion of the first phase is scheduled South Station Enterprise City (SSEC) is for February 2015. In recognition of its Mapletree’s second integrated development eco-friendly design, Global Technology Park in Foshan following Nanhai Business City was awarded the LEED India Gold level (NBC). The development will offer over precertification in 2014. 500,000 sqm of GFA for office and business space. Comprising 23 premium office Market Review and Outlook buildings ranging from nine to 21 storeys, South Station Enterprise City, China the development will be completed in phases, China with the first completion of six buildings in China recorded GDP growth of 7.7% in 2013. India 4Q 2014. Strategically situated within the Growth is expected to decline, with the India is expected to grow at 4.9% in FY13/14, upcoming Sanshan New City project, SSEC government targeting 7.5% growth for 2014. and GDP growth is expected to increase will benefit from the increasing consolidation further to 5.6%, with inflation easing slightly to of high-tech services and financial industries The retail sector performed well in 2013, and 6% in 2014. in the area. The development’s close proximity landlords with established track records in to the Guangzhou South Railway Station retail operations are expected to outperform The office market in Bangalore was relatively also allows for seamless connectivity to others in 2014. stable in 2013. Rentals and capital values are neighbouring cities, Guangzhou and expected to hold steady in 2014, driven by VivoCity Shanghai, China MBC Shanghai, China Hong Kong SAR. Amid property cooling measures, the sustained demand from the manufacturing residential market stayed resilient, with and IT sectors. Bangalore, being one of the Also in Foshan, Mapletree opened its second transaction volumes and residential prices most popular locations for the IT sector, is Mapletree’s China and India business unit projects with value enhancement potential phases from 2015 onwards, MBC Shanghai VivoCity in China with the completion of the in major Chinese cities experiencing stable expected to perform strongly. seeks to capitalise on real estate opportunities located in China’s Tier I and Tier II cities. will comprise seven blocks of Grade-A four-storey, 100,000 sqm VivoCity Nanhai retail growth in 4Q 2013. The residential market arising from these large emerging economies. office buildings while VivoCity Shanghai is mall in May 2014. The mall is located within is expected to remain positive on the back The business unit develops and manages FY13/14 saw the closing of MCOF II at its hard planned as a one-stop shopping destination. the larger mixed-use NBC development. of sustained demand in 2014. References a range of real estate assets in China and cap, or maximum target, of US$1.4 billion in The development is close to Hongqiao 1. CBRE, China MarketView Q4 2013 Office rentals are expected to face India, as well as two private real estate funds, September 2013. Seeded by two mixed-use Transportation Hub, offering easy access Separately, following the closing of MCOF II, 2. Jones Lang Lasalle Research, Asia Pacific Mapletree India China Fund (MIC Fund) and development projects in the Nanhai district of to key destinations in Shanghai as well as Mapletree has been actively sourcing suitable continued downward pressure in 2014 with Property Digest Fourth Quarter 2013 follow-on vehicle Mapletree China Opportunity Foshan (Guangdong) and the Minhang district the surrounding regions. With a total gross opportunities to invest the remaining fund upcoming supply. Fund II (MCOF II). of Shanghai, MCOF II is one of the largest floor area (GFA) of 200,000 square metres equity. In October 2013, MCOF II successfully China-focused private real estate funds raised (sqm), MBC Shanghai aims to meet the secured a new project in Foshan, known As at 31 March 2014, the business unit to date. In recognition of MCOF II’s fundraising growing demand for decentralised, cost- as King’s Place, within NBC. The project accounted for S$1.8 billion of the Group’s success, Mapletree was accorded ‘Asia effective quality office space, while the comprises residential apartments, educational China and India total assets under management. The EBIT + Capital Raise of the Year’ at the 2013 Global adjoining VivoCity Shanghai caters to the facilities, retail outlets and other amenities SOA1 and fee income contributions were Private Equity Real Estate (PERE) Awards in needs of the working population at MBC spread over a GFA of 445,000 sqm. EBIT + SOA: S$1.4 million2 and S$44.5 million respectively March 2014. Shanghai and over 300,000 residents within S$1.4 million in FY13/14. a three-kilometre radius. India Fee Income: In Minhang, the mixed-use project (previously S$44.5 million China known as the Mapletree Minhang Development Designed to minimise environmental impact Through the MIC Fund platform, Mapletree Project) is the Group’s first development while maintaining a high level of comfort for made its first investment in India with the AUM: Mapletree is focused on investing in projects housing two of its signature brands – the end-user, MBC Shanghai and VivoCity acquisition of Global Technology Park in S$1.8 billion relating to the development of integrated Mapletree Business City (MBC) and VivoCity – Shanghai were awarded the Leadership in 2011. The information technology (IT) park mixed-use or single-use projects, as well as in a single location. To be constructed in Energy and Environmental Design (LEED) in Bangalore features a fully leased building Global Technology Park, India

1 Earnings before interest and tax plus share of profits of associates and joint ventures 2 Including share of associates’ revaluation gains 56 Mapletree Investments Pte Ltd Annual Report 2013/2014 North Asia 57 Operations Review North Asia

Hong Kong SAR sectors in these markets are highly liquid Greater Tokyo rentals remained flat in and transparent with sizable investment- 4Q 2013. Against declining vacancy, In January 2014, Mapletree won a government grade stock, they present a stable income rentals are projected to increase in 2014, land tender for a prime commercial site in proposition given that their yield spreads driven by demand from the e-commerce, Kwun Tong, Kowloon East, for HK$3.769 billion. over risk-free rates are attractive. Additionally, apparel and pharmaceuticals sectors. With an existing office cluster, the Kowloon Mapletree is exploring investments in new East area has been earmarked as Hong Kong asset sectors to complement its existing SAR’s new Central Business District (CBD) product offerings. This will deepen and References and has seen a wave of relocation activities broaden its business reach in Asia and in 1 CBRE, Asia Pacific Office MarketView Q4 2013 as companies begin to consolidate their the new markets. 2 CBRE, Japan Office MarketView Q4 2013 3 CBRE, Japan Industrial & Logistics MarketView operations there. Q4 2013 Market Review and Outlook 4 Jones Lang Lasalle Research, Asia Pacific Located within walking distance from Property Digest Fourth Quarter 2013 Ngau Tau Kok MTR station and spanning Hong Kong SAR’s economy grew 2.9% in 5 Hong Kong Trade Development Council 5,112 square metres (sqm), the site will be 2013 with growth projected at 3% to 4% in 6 Census & Statistics Department developed into a Grade-A office building 2014. Retail sales performed well and grew 7 International Monetary Fund with a gross floor area of 61,344 sqm. At a 11% in 2013. Backed by strong tourist arrivals total development cost of approximately from Mainland China, rising retail sales are HK$6 billion, Mapletree’s development will expected to drive rentals up by 5% in 2014. North Asia cater to the growing demand for quality office In the office market, rentals declined 1.3% space for corporate headquarters and middle EBIT + SOA: Festival Walk, Hong Kong SAR Gateway Plaza, China quarter-on-quarter (q-o-q) in 4Q 2013. Leasing office operations. Completion is expected at demand is expected to pick up slightly as the S$69.5 million the end of 2017. global economy improves. Coupled with low 2 Fee Income: Mapletree’s North Asia business unit focuses income of S$216.2 million also surpassed Festival Walk welcomed new tenants such as vacancy and limited supply, office rents are on growing the Group’s commercial real estate forecasts by 7.4% and 9.7% respectively. Ted Baker, Just Cavalli, Qeelin, Love Moschino Japan expected to hold steady in 2014. S$36.5 million business in the mature markets of North Asia and Glasstique, and organised promotional AUM: Raising total gross IPO proceeds of S$1.68 including Hong Kong SAR, Japan and activities within the mall such as the display In FY13/14, Mapletree continued to strengthen China’s economy grew 7.7%, better than the billion, MGCCT remains the largest REIT IPO South Korea. It is also exploring investments of a life-size Breitling airplane, car shows and its presence in Japan, building on local official target of 7.5%. Utilised foreign direct S$5.6 billion in Singapore to date. In recognition of its in new markets outside Asia such as Australia, events, as well as the Spring Fashion Maze. partnerships and on-the-ground support to investment, according to China’s Ministry fundraising success, MGCCT was accorded Europe and the USA, as well as new asset A popular shopping destination among locals facilitate further growth. With four office of Commerce, increased 5.3% year-on-year the ‘Best Capital Raising Strategy of the Year’ sectors. Singapore-listed real estate and tourists from Mainland China, Festival buildings in Tokyo as seed assets, Mapletree to US$117.6 billion in 2013. China’s economy at the Real Estate Investment World Asia MGCCT investment trust (REIT) Mapletree Greater Walk was ranked ‘Top 10 Favourite Shopping is set to close its first Japan-dedicated is forecasted to grow between 7.0% and Awards for Excellence and ‘Best REIT’ at The China Commercial Trust (MGCCT) also Malls’ by Hong Kong Economic Times, and office fund, which is focused on investing in 7.5% in 2014 as the leadership focuses on Asset Magazine’s Triple A Regional House Portfolio: comes under this business unit. was voted the favourite Hong Kong brand predominantly income generating office space enacting structural reforms to put China on and Deal Awards. It was nominated for ‘Best in the shopping mall category by Southern located primarily in or around the fringe of a more sustainable growth path. Though 2 properties As at 31 March 2014, the business unit’s Investor Relations’ in the IPO category at the Metropolis Daily, a Guangzhou newspaper. Tokyo CBD, within the Greater Tokyo area, overall Grade-A office rental growth in Beijing Property value: portfolio had a combined value of S$5.6 billion. IR Magazine Awards and Conference-South Festival Walk also received the ‘Yahoo! and other major cities. In addition, Mapletree is expected to slow, demand will continue These properties contributed S$69.5 million to East Asia 2013. S$4.7 billion Emotive Brand Awards’ in the shopping centre is close to syndicating a Japan Logistics to remain stable amidst tight supply, as is the Group’s EBIT + SOA1 and S$36.5 million to Gross revenue: category, for its strong emotional appeal and Development Fund to capture the growing projected for the next two years. MGCCT’s portfolio comprises Festival Walk, fee income. popularity among the 2.5 million voters who demand for modern logistics space driven by a territorial retail mall with an office component S$267.6 million participated in the survey. the domestic third-party logistics (3PL) trend The Japanese economy grew 1.5% in 2013 in Hong Kong SAR, and Gateway Plaza, a NPI: Mapletree Greater China and expansion of the e-commerce industry. due to improvements in exports and private Grade-A office building with a retail podium Situated within Beijing’s prime Lufthansa Commercial Trust – consumption. GDP growth for 2014 is S$216.2 million in Beijing. area, Gateway Plaza is a premier Grade-A expected to remain relatively unchanged GFA: Exceeding Forecasts office building. As at 31 March 2014, it had a New Markets and New Sectors Located in the upscale residential area of at 1.4%. Office rentals in Tokyo increased Following its listing on 7 March 2013, MGCCT committed occupancy of 97.5% and enjoyed 220,000 sqm Kowloon Tong, Festival Walk continued to To further expand its business and grow its 0.2% q-o-q in 4Q 2013, backed by strong delivered a distribution per unit (DPU) of positive rental reversions of 79% for leases DPU: enjoy full occupancy, with expiring retail earnings, Mapletree is exploring investment demand in consumer-related industries such 6.265 cents2, exceeding its forecast3 at its expiring during the year. MGCCT will carry leases renewed or re-let at a positive rental opportunities in markets such as Australia, as IT and e-commerce. Given limited supply 6.265 cents initial public offering (IPO) by 13.1%. Gross out planned asset enhancement initiatives uplift of 20% in FY13/14. During the year, Europe and the US where the Group can scale and low vacancy, office rentals are expected Price per unit: 2 for Gateway Plaza in FY14/15 to further revenue of S$267.6 million and net property up while balancing its existing Asia exposure. to increase in 2014, with well-located and strengthen its appeal. These markets are currently at different stages high-specifications properties experiencing S$0.815 (closing price as at 31 March 2014) 1 Earnings before interest and tax plus share of profits of associates and joint ventures of economic recovery. As the real estate the largest increase. In the logistics market, 2 For the period from Listing Date of 7 March 2013 to 31 March 2014 3 The forecast is based on MGCCT’s IPO Prospectus dated 27 February 2013 58 Mapletree Investments Pte Ltd Annual Report 2013/2014 South East Asia 59 Operations Review South East Asia

and CMM is targeting to close a CMREF2 income and also entitle Mapletree to receive conventional tranche, which will focus on a share of the projects’ development profits. development projects and complement the Shariah tranche. Market Review and Outlook Following investors’ approval, the fund life for CMREF1 was extended for another Vietnam Vietnam’s economy held steady in 2013 two years to December 2015. The fund with GDP growth at 5.4%, compared to 5% has successfully divested most of its in 2012. With the government focusing on investments, with remaining fund equity sustainable and balanced growth, growth is invested in four projects: projected at 6% for 2014. • Menara CIMB is a 41-storey Grade-A office Fundamental drivers of Vietnam real estate building development in Kuala Lumpur such as the shortage of quality real estate (KL).Completed in January 2013 and assets, a growing middle class and rapid currently enjoying strong occupancy at urbanisation remain intact. Despite the 87%, it is 60% owned by CMREF1 with the Jaya Shopping Centre, Malaysia challenging economic climate, HCMC office remaining 40% stake held by Mapletree. market rentals rose 4% quarter-on-quarter are expected to lower retail sales and limit in 4Q 2013. Serviced apartment rentals • Also in KL, Patimas Technology Centre retail rental growth in 2014. Property cooling remained flat in both HCMC and Hanoi, while is a data centre within Technology measures and tighter funding guidelines are retail rentals declined in Hanoi in the same Park Malaysia, and is leased to FTMS likely to depress average residential rentals. period. The 2014 outlook for development and Consultants as a higher education campus Nonetheless, new properties in sought-after investment opportunities in HCMC and Hanoi and to Patimas Computers Berhad for data locations with high quality specifications CBDs remains positive. CentrePoint, Vietnam Mapletree Business City @ Binh Duong, Vietnam centre operations. are expected to command higher rentals and prices. • Jaya Shopping Centre is located in Malaysia Malaysia recorded 4.7% GDP growth in 2013, Mapletree’s South East Asia (SEA) business Vietnam units at its Mapletree Business City @ Binh Petaling Jaya and was completed in early unit focuses on acquiring income-yielding Duong, a 75-hectare integrated business 2014. The seven-storey mall had pre- lower than 5.6% in 2012. The property market References is expected to be muted in 2014 with new 1. CBRE, Asia Pacific Office MarketView Q4 2013 investment properties in South East Asia In Ho Chi Minh City (HCMC), development and industrial park. Phase 1C comprising leased 80% of the leasable area when it 2. Jones Lang Lasalle Research, Asia Pacific (excluding Singapore) to build a scalable 23,000 sqm of RBBS units was completed in opened for business in 2Q 2014. fiscal tightening measures. of the Saigon South Place mixed-use Property Digest Fourth Quarter 2013 capital management platform that generates project located in the upscale District 7 is May 2014 and received substantial leasing Demand for KL office space remained 3. DTZ Property Times, Kuala Lumpur Q4 2013 sustainable returns. SEA manages three underway. Its 65,000 square metres (sqm) pre-commitment, as investor interest in Binh • Giant Seberang Prai in Penang is leased steady in 2013, as witnessed by the stable private real estate funds, CIMB-Mapletree Real retail component, SC VivoCity, is set to open Duong is picking up. to hypermarket operator GCH Retail. occupancy rate. As a result, rentals and Estate Fund 1 (CMREF1), CIMB-Mapletree in early 2015. Construction of the offices capital values changed marginally during Real Estate Fund 2 Shariah (CMREF2 Shariah) and serviced apartments is expected to be Mapletree also manages Pacific Place, CMREF2 Shariah is a follow-on fund to the year. In 2014, 4.5 million square feet South East Asia and Mapletree Industrial Fund (MIF). SEA also completed in stages from 2016 onwards. a premier office, serviced apartment and CMREF1. With MYR140 million of committed seeks to generate income from activities that retail property in Hanoi’s CBD. capital, it will seek investment opportunities (418,000 sqm) of office space will be completed. Competition for tenants in the EBIT + SOA: are not suitable for a capital management In FY13/14, Mapletree acquired CentrePoint, to deploy the capital raised, while engaging office sector is expected to be challenging platform but add diversity to the Group’s an office property on the fringe of HCMC’s other potential investors for a second close. S$5.0 million Malaysia in 2014. income sources, such as mezzanine interest Central Business District (CBD). The 15-storey The conventional tranche is targeting to Fee Income: income, development profits and gains on building is easily accessible to the airport and Through CIMB-Mapletree Management Sdn achieve a first close in the second half of 2014. In the residential and retail markets, average S$1.0 million divestment. As at 31 March 2014, SEA owned city centre, and enjoys a strong tenant base Bhd (CMM), a joint venture with CIMB Group, rents and capital values remained stable in and managed S$677.9 million assets and of multinational corporations such as HSBC, Mapletree manages CMREF1 and CMREF2 To further diversify earnings, the SEA business AUM: 4Q 2013. Weakening consumer sentiment contributed S$5.0 million to Mapletree’s Bayer, Li & Fung and Cap Gemini. Shariah. Both closed-end private funds focus unit committed to invest in two residential following government subsidy cuts and S$677.9 million EBIT + SOA1. on real estate in Malaysia. CMREF1 is in its projects in KL via mezzanine loans during the imposition of Goods and Services Tax In Binh Duong New City, a 45-minute drive divestment phase while CMREF2 Shariah the year. These loans will generate regular SEA’s footprint spans the retail, office, serviced from HCMC, Mapletree enjoys 100% achieved a first close in June 2013 with apartments, industrial and mixed-use sectors occupancy at Phase 1A and Phase 1B of MYR140 million in committed equity. The in Vietnam and Malaysia. It is also exploring the Ready-Built Business Space (RBBS) latter focuses on Shariah-compliant projects opportunities in Indonesia and the Philippines.

1 Earnings before interest and tax plus share of profits of associates and joint ventures 60 Investment Activities & Fund Management

Mapletree’s real estate capital management An “Operator-Manager” To ensure strong alignment of interests, business focuses on the management of Mapletree typically maintains or commits public-listed real estate investment trusts Mapletree distinguishes itself as an “operator- to about one-third of the total equity in (REITs) and private equity real estate funds. manager” and emphasises a disciplined each platform. With a range of real estate investment investment approach that focuses on the products, Mapletree offers both institutional delivery of consistent and high returns. With Surpassing Expectations and retail investors different options to its real estate development, investment and meet their varying investment needs and operational asset management capabilities, In August 2013, Mapletree held a final closing risk profiles. Mapletree is strategically positioned to seize for Mapletree China Opportunity Fund II attractive investment opportunities in the (MCOF II). Exceeding its initial target of Since establishing its first managed platform major asset classes across the real estate US$1.1 billion and closing at its hard cap of in 2005, Mapletree has managed or continued value chain. Mapletree’s integrated functions, US$1.4 billion, MCOF II is one of the largest to manage 11 capital management vehicles, together with its proactive approach to asset China-focused private equity real estate funds offering investors exposure to the retail, office, management, enable the Group to create and raised to date. Seeded by two mixed-use residential, industrial and logistics real estate extract significant intrinsic values across real development projects, the fund continues asset classes across Asia. The Group currently estate projects. the Group’s successful strategy of investing manages four Singapore-listed REITs and five in the development of integrated mixed-use private funds with a combined funds under With 11 offices across Asia, Mapletree- or single-use projects as well as in projects management of over S$13 billion. managed platforms benefit from the Group’s with value enhancement potential in China’s decade-long operational and financial Tier I and Tier II cities. MCOF II is Mapletree’s As at 31 March 2014, the Group had assets experience, broad real estate industry second China-focused private fund and under management (AUM) of S$24.6 billion, knowledge, robust network of local a follow-on investment vehicle from the of which 74% are third-party managed assets. relationships, and a strong balance sheet, Mapletree India China Fund (MIC Fund). In line with this growth, the Group’s fee income to identify and capitalise on investment increased to S$203.2 in FY13/14. opportunities, delivering a proven MCOF II received strong investor support, investment performance. where the fund was able to hold a final close within 10 months from its marketing launch and two months from its first closing in June 2013. MCOF II attracted investors from North Third-Party AUM Growth (S$ million) America, Europe, the Middle East and Asia. The majority of investors were new relationships for the Group, in addition to repeat investors FROM 18,224 from the earlier investment vehicle. S$6.1 billion 16,744 TO A strong testament to Mapletree’s capital S$18.2 billion management capabilities and international h recognition of MCOF II’s fundraising success 3× was the accolade of ‘Asia Capital Raise of the 11,401 Year’ at the 2013 Global Private Equity Real Estate (PERE) Awards.

7,903

6,076

FY 09/10 FY 10/11FY 11/12FY 12/13 FY 13/14 Mapletree Investments Pte Ltd Annual Report 2013/2014 Investment Activities & Fund Management 61

Asia Capital Raise of the Year

In March 2014, Mapletree was accorded ‘Asia Capital Raise of the Year’ at the 2013 Global Private Equity Real Estate (PERE) Awards. This was for the successful launch of Mapletree China Opportunity Fund II (MCOF II). With an initial target of US$1.1 billion, the fund held its final close at its maximum target of US$1.4 billion, giving rise to one of the largest China-focused private real estate funds to-date. Seeded by two mixed-use ASIA development projects, MCOF II received strong investor support from North America, CAPITAL RAISE Europe, the Middle East and Asia, and closed within 10 months from its marketing OF THE YEAR launch. The fund continues Mapletree’s successful strategy of investing in the development of integrated mixed-use or single-use projects as well as in projects with value enhancement potential in China’s Tier I and Tier II cities.

During the year, Mapletree achieved another US$3 billion. While Mapletree continues A Growing Reach milestone with the first closing of CIMB- to formulate new vehicles to meet investor Mapletree Real Estate Fund 2 Shariah appetite, it is mindful to continue delivering Mapletree has successfully scaled up (CMREF2 Shariah) at MYR140 million in for its existing private funds, with those that its capital management business and is June 2013. commenced prior to 2013 achieving a positive committed to supporting this business growth. 1 gross internal rate of return . The Group’s success in raising capital from CMREF2 Shariah is Mapletree’s second both public and private markets speaks of its Malaysia-focused private fund and a follow-on On the REIT front, the Group’s four listed ability to create and extract value from its real investment vehicle to CIMB-Mapletree Real entities, Mapletree Greater China Commercial estate investments. The Group will continue Estate Fund 1 (CMREF1). CMREF2 Shariah Trust (MGCCT), Mapletree Commercial Trust to explore investment opportunities and aims to maximise total returns on capital, (MCT), Mapletree Industrial Trust (MIT) and strategies including those in Australia, Japan primarily through rental income and capital Mapletree Logistics Trust (MLT), turned in and Vietnam. gain through Shariah-compliant property a good performance in FY13/14. MGCCT 2 investments and development projects in reported a distribution per unit (DPU) of With a stronger capital management platform Malaysia. 6.265 cents, outperforming the forecast at its and proven investment approach backed initial public offering (IPO) by 13.1%. MCT, by a good track record, Mapletree is well In addition to MCOF II and CMREF2 Shariah, MIT and MLT also registered year-on-year positioned to further expand its AUM and add Mapletree manages three other private DPU growth of 13.6%, 7.4% and 7.1%, complementary businesses to its stable. funds, MIC Fund, CMREF1 and Mapletree delivering DPU of 7.37 cents, 9.92 cents Industrial Fund (MIF), with an aggregate and 7.35 cents respectively. capital commitment totalling approximately

1 As at 31 March 2014 2 For the period from listing date of 7 March 2013 to 31 March 2014 62

Mapletree’s Private Funds and REITs

Name Brief Description Launch/ Investment Investment Strategy Fund Life Fund Size/ of Fund/REIT Listing Universe Focus (Years) NAV1 Date

Private Mapletree A private fund 2013 China Commercial, Opportunistic/ 9 US$1,400m Funds – China established with the Industrial, Value add Existing Opportunity objective of maximising Residential Fund II total returns by & Mixed-use (MCOF II) investing in a portfolio of development projects and projects with value enhancement potential located in Tier I and Tier II cities in China.

Mapletree A private fund 2008 India & China Commercial Opportunistic/ 10 US$1,158m India China established with the & Mixed-use Value add Fund objective of maximising (MIC Fund) total returns by acquiring, developing and realising real estate projects in India and China.

Mapletree A private fund 2006 Pan Asia Industrial Core+/ 7 US$299m Industrial established with the Value add Fund objective of investing (MIF) in industrial properties in Asia for yield and appreciation.

CIMB – A Shariah-compliant 2013 Malaysia Commercial Core+/ 7 MYR140m2 Mapletree private fund with the & Education Value add Real Estate objective of maximising Facilities Fund 2 total returns on capital, Shariah primarily through rental (CMREF2 income and capital gains Shariah) from property investments and development projects in Malaysia.

CIMB – A Malaysia-focused 2005 Malaysia Commercial Core+/ 8 MYR402m Mapletree private fund with a & Residential Value add Real Estate mandate to make Fund 1 direct investments (CMREF1) in development and/ or investment assets, real estate investment products and listed real estate securities.

private Mapletree A private fund that held 2008 Singapore Industrial Core+/ Realised S$708m – fully Industrial the S$1.71 billion of Value add realised Trust - Private industrial assets acquired (MITP) from JTC in 2008.

Fully realised and achieved a 1.5x multiple and net IRR3 of 19.1% against a targeted 15.0%. Mapletree Investments Pte Ltd Annual Report 2013/2014 Investment Activities & Fund Management 63

Name Brief Description Launch/ Investment Investment Strategy Fund Life Fund Size/ of Fund/REIT Listing Universe Focus (Years) NAV1 Date Mapletree A private fund that 2005 Pan Asia All Mezzanine Realised S$90m Real Estate focused on originating Mezzanine and executing real estate Fund mezzanine loans in Asia. (MREM) Fully realised and achieved a 1.2x multiple and net IRR3 of 25.3% against a targeted 10%.

Public Mapletree REIT investing in a 2013 Greater Commercial Public REIT S$2,840m Listed Greater China diversified portfolio China REITs Commercial of income-producing Trust commercial real estate in (MGCCT) the Greater China4 region.

Mapletree REIT investing on a long- 2011 Singapore Commercial Public REIT S$2,426m Commercial term basis in a diversified Trust portfolio of office and (MCT) retail properties in Singapore.

Mapletree REIT investing in a 2010 Singapore Industrial Public REIT S$2,029m Industrial diversified portfolio Trust of income-producing (MIT) properties used for industrial purposes in Singapore.

Mapletree The first Asia-focused 2005 Pan Asia Logistics Public REIT S$2,382m Logistics logistics REIT in Trust Singapore with the (MLT) principal strategy of investing in a diversified portfolio of income- producing logistics real estate and real estate related assets in Asia.

1. Total fund size for private funds; NAV for listed REITs as at 31 March 2014 2. Fund size at first closing 3. After expenses, taxes and base fee but before carried interest 4. MGCCT’s investment mandate includes Hong Kong SAR, Tier I cities in China (Beijing, Guangzhou and Shenzhen) and key Tier II cities in China (Chengdu, Chongqing, Foshan, Hangzhou, Nanjing, Suzhou, Tianjin, Wuhan and Xi’an) 64 Sustainability Corporate Social Responsibility

Mapletree strives to incorporate sustainable practices in its Steering Mapletree’s CSR efforts is a Board Committee comprising senior management operations and invest in communities, as it broadens its business and members of Mapletree’s board as well reach across Asia. To this end, it seeks to generate shared positive as the boards of its real estate investment outcomes through corporate social responsibility (CSR) initiatives trusts (REITs). Meeting at least twice a year, underpinned by a Group-wide framework, which articulates the committee provides strategic direction guidelines for areas of support. and makes decisions on CSR programmes. To ensure good governance as well as foster diversity and an exchange of views, board representatives from the Mapletree REITs The framework is focused on two broad • To enrich communities by deriving are rotated on a two-year basis. objectives. positive outcomes for the Group’s business and the environment through sustainable Mapletree aims to align its CSR efforts • To empower individuals by creating social operational practices. Efforts include with business growth and performance. impact through the support of educational environmental conservation and support for A portion of its profits is channelled to the and healthcare causes to alleviate poverty. the arts. Mapletree Shaping & Sharing corporate giving programme. Each year, S$1 million CSR Board Committee Membership is set aside for the programme to fund Mapletree’s CSR initiatives. This increases Name CSR Board Committee (for FY13/14) to S$2 million when the Group’s profit after tax and minority interests (PATMI) for the Chairman, Mapletree Investments Pte Ltd (MIPL) Mr Edmund Cheng Wai Wing year exceeds S$300 million.

Mr Hiew Yoon Khong Group Chief Executive Officer, MIPL In FY13/14, Mapletree continued to Mr Cheah Kim Teck Mapletree Logistics Trust Management Ltd incorporate sustainable practices and invest board member in the communities it operates in, both locally and overseas. Mr Wee Joo Yeow Mapletree Industrial Trust Management Ltd board member

Mr Ho Seng Chee Group Chief, Corporate Services, MIPL

Education & Healthcare

Singapore

In FY13/14, Mapletree contributed S$500,000 to each of the bursary endowment funds of Singapore Management University (SMU) and Singapore University of Technology and Design (SUTD). The bursaries are open to students from all courses of study and based purely on financial needs. Mapletree had established similar bursaries with Nanyang Technological University and National University of Singapore in FY12/13. To date, Mapletree has contributed S$2 million to Singapore tertiary institutions through their

SMU-hosted event in appreciation of Mapletree’s contribution (photograph courtesy of SMU) Mapletree Investments Pte Ltd Annual Report 2013/2014 Corporate Social Responsibility 65

In addition, for the third year running, In January 2014, a team of staff volunteers Mapletree organised a blood donation drive visited 10 beneficiary households in Minhang to at MBC together with The Coca Cola Company present them with gift hampers in celebration and The Singapore Red Cross Society. The of the Lunar New Year. Mapletree’s China two-day event received overwhelming support offices and partner organisations also held from staff and the MBC working community. charity auctions in FY13/14 to raise funds for A total of 151 donations was collected, a 40% the underprivileged in the local communities. increase from 2012. Mapletree provided In recognition of Mapletree’s contributions to complimentary use of MBC premises, while the district, Mapletree was named ‘Charity staff from its internal recreation club provided Star’ by the Minhang Division of Shanghai on-site logistics support. Charity Foundation in March 2014.

Earlier in FY11/12, Mapletree pledged MBC is Singapore’s first ‘Healthy Workplace Ecosystem’ China RMB1 million to Xidian University, a tertiary respective endowment funds, which benefit In FY12/13, Mapletree pledged RMB5 million institution located near VivoCity Xi’an, 25 financially needy students annually and each to low-income residents in the districts Mapletree’s first VivoCity overseas. The in perpetuity. of Minhang (Shanghai) and Nanhai (Foshan, contribution provides financial assistance Guangdong). The contributions will help to to students from low-income households During the year, Mapletree continued to meet their healthcare and educational needs over five years. Ranging from RMB2,000 to support Boys’ Town Home (BTH) by over five years. RMB4,000 per student, the contribution has contributing S$115,000 to fund three of benefitted 210 needy students since 2011. BTH’s programmes for one year. Apart from In Nanhai, funds were disbursed in 2013 continuing support for BTH’s residential youth to provide the handicapped and sick with programme that provides basic necessities financial aid for rehabilitation, hearing aids, such as food and clothing to over 60 socially wheelchairs and other healthcare needs. In and financially disadvantaged boys, Mapletree addition, needy students from low-income expanded its support to include sports and art households received education assistance. therapy programmes to engage the boys in For its community efforts, Mapletree received a more holistic manner. the ‘Silver’ award at the Rose Charity Cup conferred by Foshan City Poverty Alleviation Tapping its large customer network, Mapletree Initiative Development Group. facilitated the visit of culinary students from its corporate giving beneficiary, Assumption In Minhang, a total of 167 individuals and Pathway School (APS), to the renowned Jamie’s households benefitted from Mapletree’s Italian restaurant at VivoCity. The visit provided contribution in 2013, with over RMB800,000 the students with valuable insights and first- going towards helping low-income households hand industry experience. Mapletree had cope with illnesses. Beyond financial giving, previously made a cash contribution to APS’ Mapletree also encouraged its China-based in-house residential programme in FY11/12. staff to participate in community activities. Mapletree receiving the Minhang ‘Charity Star’ award

Mapletree further leverages its role as a leading business landlord and reaches out to 2013 Contributions in Nanhai Beneficiaries working populations, both staff and tenants, Hearing aids 100 recipients to help promote healthy living. During the year, Mapletree, in partnership with the Wheelchairs and other equipment 100 recipients Health Promotion Board, made its flagship Mapletree Business City (MBC) the first Treatment and rehabilitation equipment 3 rehabilitation hospitals ‘Healthy Workplace Ecosystem’ in Singapore. By working with F&B tenants, MBC introduced Rehabilitation treatment for severely disabled patients 31 patients healthier food options and organised fitness programmes such as regular group runs and Assistance to households facing serious illnesses 10 households complimentary lunchtime health talks for the Schooling related vouchers for needy students 1,000 recipients 10,000-strong working community at MBC. The aim is to encourage working adults to Educational assistance 51 students adopt healthier lifestyles. Insurance for single-parent families 161 families 66

Environment

As a real estate developer, Mapletree For its Singapore-based developments, for its overseas developments. In addition, is committed to using environmentally Mapletree strives to achieve the Green Mark Mapletree also achieved the Leadership in sustainable designs for its projects. Energy accreditation issued by the Singapore Building Energy and Environmental Design (LEED) efficiency also translates into cost savings for and Construction Authority (BCA). To date, accreditation, the international standard for both Mapletree and its tenants. Mapletree has achieved 14 BCA awards for green buildings, for five of its developments. its Singapore assets and two accreditations

Country Name of Property LEED Level

Singapore Tata Communications Exchange LEED Gold Award U.S. Green Building Council

Singapore Mapletree Business City II Precertification for LEED for Core and Shell Development Gold Level U.S. Green Building Council

China Mapletree Business City Shanghai Precertification for LEED for Core and Shell (MBC Shanghai) Development Gold Level U.S. Green Building Council

China VivoCity Shanghai Precertification for LEED for Core and Shell Development Silver Level U.S. Green Building Council

India Global Technology Park Precertification for LEED India for Core and Shell Development Gold Level Indian Green Building Council

As Mapletree’s flagship development, project in Minhang (China), both MBC Shanghai In addition to green design, Mapletree has MBC has garnered international and local and VivoCity Shanghai were awarded the introduced ground-level measures such recognition for its eco-friendly design and LEED Gold and Silver level precertification as programming office computers and building sustainability. MBC performed respectively, for their water and energy laptops to sleep mode when idle, switching well at the Federation Internationale des saving features. off non-essential office lights during Adminstrateurs de Bien-Conseils Immobiliers lunchtime, and using sustainable paper (FIABCI) Singapore Property Awards, In Japan, Mapletree commenced a solar panel sources for publications. emerging winner in 2011 and runner-up in power generation project for properties under 2012 in FIABCI Prix d’Excellence Awards’ the Mapletree Logistics Trust (MLT) platform. To encourage tenants to go green, Mapletree Sustainable Development category. Apart Solar energy generated from the properties incorporated environmentally-friendly practices from its eco-friendly design, MBC also offers will be sold to the national power grid, adding into their fitting-out and operations guidelines. facilities that serve people from differing age a new income stream to MLT while enabling During the annual Earth Hour and Earth Day, groups and abilities. In recognition of its user- these properties to enjoy significant energy Mapletree rolled out initiatives such as raising friendly features, MBC won the BCA Universal cost savings. The solar panel installations at air-conditioning temperatures and reducing Design Mark GoldPLUS award in 2013. Mizuhomachi Centre, Zama Centre, Atsugi non-essential energy-consuming activities at Centre and Kashiwa Centre were completed its commercial properties in Singapore. Mapletree seeks to achieve similar standards in FY13/14. Installations will commence at five for its overseas developments. At its latest more properties in FY14/15. Mapletree Investments Pte Ltd Annual Report 2013/2014 Corporate Social Responsibility 67

Arts in the City – a series of complimentary arts performances at MBC

Arts

Mapletree recognises the value of design and the arts in communities. This is evident in the installation of artworks in the public areas of its Singapore properties, all of which help to enrich the developments while offering a showcase platform for artists and designers.

Mapletree commissioned a series of art books featuring its collection of installed artworks and other artefacts. The final book,Artefacts from Sea to Land was produced in FY13/14 and showcased articles from Singapore’s maritime past installed around Mapletree’s HarbourFront Precinct. The earlier books, Art in the City and Art on the Waterfront, featured the sculpture collection at MBC, and VivoCity’s art installations from the Singapore Biennale 2006, respectively. Arts in the City entertaining the MBC lunchtime crowd

Mapletree also regularly organises complimentary arts performances at MBC. Through Arts in the City, Mapletree is able to During the year, the Mapletree malls of Launched in 2013, Arts in the City is a add to the vibrancy of MBC as a business VivoCity and Alexandra Retail Centre (ARC) series of lunchtime arts performances and locality and create opportunities for MBC in Singapore, and Festival Walk in Hong workshops. This is a collaboration between occupants to share artistic and cultural Kong SAR, provided venue sponsorship for Mapletree and the Singapore National Arts experiences. In July 2013, the MBC arts-related causes. In recognition of the Council (NAC) under the latter’s Arts@Work community was entertained by a life-size Group’s contribution to the arts in Singapore, programme, which seeks to bring arts to the puppetry performance, and its working Mapletree has consistently received the NAC’s workplace and provide working adults with population was able to take a breather and annual Patron of the Arts Awards. more opportunities for artistic engagement. create key chains from recyclable materials. 68 Sustainability Corporate Governance

As Mapletree continues its regional expansion, the importance of maintaining good corporate governance practices to ensure investor confidence and business integrity becomes more entrenched in its activities. Although Mapletree is not listed on a stock exchange and therefore not subject to mandatory disclosures, it ascribes voluntarily to some of the core principles set out in the Code of Corporate Governance (Code) issued by the Monetary Authority of Singapore.

A) Board Matters Board Committee Membership based on their professional calibre, experience The Board comprises eight members, of and stature, with the overall consideration that whom seven are Non-Executive Directors and their collective experiences will bring breadth Board’s Conduct of its Affairs 1 and depth to the Board’s deliberations. Every Mapletree applies the principle that an Independent Directors . Board committees Director is expected to act in good faith and effective Board of Directors is one constituted are also constituted to assist the Board in consider the interests of the Group at all times. with the right core competencies and discharging their duties. The following diversity of experiences for the growth sets out the composition of the Board The Board meets at least once every quarter and success of the Group. The collective and the various Board committees. to assess Mapletree’s business performance wisdom of the Board provides strategic and key activities, review strategic policies guidance and diverse insights to support Mapletree’s Directors comprise business and significant acquisitions and disposals. Management, and Management is leaders and distinguished professionals in accountable to the Board. their respective fields and are appointed

Name Board of Audit and Risk Executive Resource Investment Transaction Directors Committee (AC) and Compensation Committee (IC) Review Committee (ERCC) Committee (TRC)

Mr Edmund Cheng Wai Wing Chairman Chairman Chairman

Mr Lee Chong Kwee Member Chairman Chairman

Mr Paul Ma Kah Woh Member Member Member Member Member

Mr Tsang Yam Pui Member Member

Mr Wong Meng Meng Member Member Member

Mr David Christopher Ryan(2) Member Member

Mr Samuel N. Tsien(3) Member

Mr Frank Wong Kwong Shing(4) Member Member(4)

Ms Chan Wai Ching Co-opted Member

Mr Hiew Yoon Khong Member Group CEO & Ex-officio Member

Mr Wong Mun Hoong Group CFO & Ex-officio Member

Notes: (1) Two new Directors were appointed to the Board during the year, namely Mr David Christopher Ryan and Mr Samuel N. Tsien. (2) Mr David Christopher Ryan was appointed as a Director on 18 March 2014. (3) Mr Samuel N. Tsien was appointed as a Director on 18 March 2014. (4) Mr Frank Wong Kwong Shing resigned as a Director on 31 March 2014. Mapletree Investments Pte Ltd Annual Report 2013/2014 Corporate Governance 69

The Board is updated on any material change the applicable laws and regulations in the the external and internal auditors separately to relevant laws, regulations and accounting daily operations of the Group. at least once a year, without the presence standards by way of briefings by professionals of Management. or by updates issued by Management. Board Membership Mapletree applies the principle that Board B) Remuneration Matters All Directors provide, and are also provided renewal is an ongoing process to ensure with the other Directors’ disclosures good governance and maintain relevance Mapletree applies the principle that of interests. to the changing needs of the Group. All remuneration matters are to be sufficiently appointments and resignations of Board structured and benchmarked to good market Board Composition and Balance members are approved by the Board. All practices, in order to attract suitably qualified Mapletree applies the principle that at least Board members are required to submit talent, so as to grow and manage its business. one-third of its Directors are independent themselves for re-nomination and re-election and the majority of them are non-executive. at regular intervals. As a Board member, the Mapletree applies the principle that To this end, other than the Group Chief Group CEO is also subjected to retirement remuneration for the Board and Senior Executive Officer (Group CEO) who is an and re-election. Management should be viewed in totality. Executive Director, all Board members are The Group implemented a performance-linked Independent Directors. This generates Board Performance remuneration system to ensure continuous broad and in-depth deliberations between Mapletree applies the principle that the talent development and renewal of strong the Board and Management, which provides Board’s performance is ultimately reflected and sound leadership for the continued Management with external, diverse and in the performance of the Group. success of Mapletree. To this end, the ERCC objective perspectives. is responsible for recruiting and retaining Each Board member is given sufficient time to key talents. The Board is supported by the Audit and Risk bring to the Board his perspective to enable Committee (AC) to provide a better overview balanced and well-considered decisions to The members of the ERCC are: of financial, risk and audit matters. In addition, be made. • Mr Edmund Cheng Wai Wing (Chairman); other Board committees, namely the Executive • Mr Paul Ma Kah Woh (Member); Resource and Compensation Committee • Ms Chan Wai Ching, Senior Managing Access to Information (ERCC), the Investment Committee (IC) and Mapletree applies the principle that the Board Director, Temasek International (Private) the Transaction Review Committee (TRC), shall be provided with timely and complete Limited (Co-opted Member). are constituted to address different aspects information prior to Board meetings and when of the business. All these ensure optimal the need arises. New Board members are All members of the ERCC are independent effectiveness of the Board, fostering active briefed on Mapletree’s businesses. of Management. The ERCC oversees participation and contribution. executive compensation and development Management is required to provide adequate of the management bench strength, so Chairman and Chief Executive Officer and timely information to the Board, which as to build and augment a capable and Mapletree applies the principle that a includes matters requiring the Board’s dedicated management team, and gives clear separation between the roles and decision as well as ongoing reports relating to guidance on progressive policies which can responsibilities of Chairman and Group CEO the operational and financial performance of attract, motivate and retain a pool of talented institutes an appropriate balance of power the Group. Management is also required executives for the present and future growth and authority. to furnish any additional information, when of the Group. so requested by the Board, in a timely As a Non-Executive Director, the Chairman manner in order for the Board to make Specifically, the ERCC: guides the Board in constructive debates informed decisions. • establishes compensation policies for on the strategic direction, management and key executives; governance matters. Being non-executive, the The Board has separate and independent • approves salary reviews, bonuses and Chairman is free to act independently in the access to the Management and Company incentives for key executives; best interests of Mapletree. The Chairman and Secretary. The Company Secretary attends • approves key appointments and reviews the Group CEO are not related to each other. to the administration of corporate secretarial succession plans for key positions; and matters, attends all Board and committee • oversees the development of key The Group CEO, who is a Board member, meetings, and provides assistance to the executives and younger talented is responsible for the management of the Chairman in ensuring adherence to Board executives. Group’s business. The Group CEO carries procedures. out full executive responsibilities over the The ERCC conducts on an annual basis, business directions and operational decisions The Board takes independent professional a succession planning review of the Group of the Group. The Group CEO is also advice as and when necessary to discharge CEO and selected key positions in the Group. responsible for ensuring compliance with its responsibilities effectively. The AC meets In this regard, potential internal and external 70

candidates for succession are reviewed for which sets out approval limits for operational One such initiative is the implementation immediate, medium term and longer term and capital expenditures, investments and of a control self-assessment programme in needs. The ERCC held a total of five meetings divestments, bank borrowings and cheque FY12/13, which promotes accountability, in FY13/14. signatory arrangements. Approval sub-limits control and risk ownership throughout the are also provided at various management Group, thereby cultivating a stronger sense of The Group CEO, as an Executive Director, levels to facilitate operational efficiency as well risk awareness within the Group. does not receive director’s fees. He is a lead as provide a system of checks and balances. member of Management. His compensation Mapletree’s policies and procedures relating consists of his salary, allowances, bonuses Mapletree’s procedures and practices to risk management can be found on pages and share appreciation awards from the are regularly reviewed and revised where 72 to 73 of this Annual Report. Group. The latter is conditional upon him necessary to enhance controls and efficiency. meeting certain performance targets. The Mapletree has a control self-assessment Information Technology Controls Group CEO is not present during discussions programme to promote accountability, control As part of the operational risk process, IT relating to his own compensation, terms and and risk ownership, in order to cultivate general controls have been put in place and conditions of service, and performance review. a stronger sense of risk awareness within are periodically reviewed to ensure that IT Management. risks are identified and mitigated. In addition, as part of Mapletree’s business continuity C) Accountability and Audit The Internal Audit department (IA) verifies plan, IT disaster recovery planning and compliance with these control procedures tests are conducted to ensure that critical IT Accountability and manuals. systems remain functional in a crisis situation. Mapletree applies the principle that to build confidence among stakeholders, there is a Whistle-blowing Policy Financial Reporting need to deliver maximum sustainable value. To reinforce a culture of good business The Board is regularly updated on the Group’s The Group complies with statutory and ethics and governance, Mapletree has a financial performance via quarterly reports. regulatory requirements as well as adopts Whistle-blowing Policy to encourage the These reports provide explanations for best practices in its business processes. On reporting in good faith of any suspected significant variances in financial performance a regular basis, the Board is also apprised improper conduct, including possible as well as an updated full year forecast, of the Group’s performance in order to make financial irregularities, while protecting the in comparison with budgets and actual a balanced and informed assessment of the whistle-blowers from reprisals. Any reporting performance of corresponding periods in Group’s performance, position and prospects. shall be notified to the AC Chairman and the preceding year. In addition, the Board the AC for investigation. is provided with quarterly updates on key Internal Controls operational activities. Mapletree is committed to the principle of Risk Management a sound system of internal controls and has Risk management is an integral part of Financial Management established an internal control framework Mapletree’s business management. In order to Management reviews the performance of the which addresses the operational, financial, safeguard and create value for stakeholders, Group’s portfolio properties on a monthly basis compliance and information technology (IT) Mapletree proactively manages risks and to instill financial and operational discipline at risks applicable to its business and operating requires the risk management process to be all levels of the Group. environment as well as the Group’s risk part of the Group’s planning and decision management system. These internal controls making process. The key financial risks to which Mapletree is provide reasonable but not absolute exposed comprise interest rate risk, liquidity assurance on the achievement of their In this regard, the Risk Management risk, currency risk and credit risk. Where intended control objectives. department oversees the risk management necessary and appropriate, Mapletree framework, reviews annually the adequacy hedges against interest and/or currency The key elements of Mapletree’s system and effectiveness of the risk management rate fluctuations. In addition, Management of controls are as follows: system, and monitors the key risks faced by proactively manages liquidity risk by ensuring the Group. It reports to the AC and the Board that sufficient working capital lines and loan Operating Structure on material findings and recommendations in facilities are maintained. The Group also Mapletree has a defined operating structure respect of significant risk matters. has in place credit control procedures for with lines of responsibility and delegated managing tenant credit risk and monitoring authority, as well as a reporting mechanism The risk management system is dynamic of debt collection. to Senior Management and the Board. and evolves with the business. The Risk Management department works closely with Internal Audit Policies, Procedures and Practices Management to review and enhance the On an annual basis, IA prepares a risk- Controls are detailed in formal procedures risk management system to be in line with based audit plan to review the adequacy and manuals. For example, the Board has market practices and regulatory requirements. and effectiveness of Mapletree’s system of approved a set of delegations of authority Mapletree Investments Pte Ltd Annual Report 2013/2014 Corporate Governance 71

internal controls. The department is also The AC has Terms of Reference dealing with Professional Practice of Internal Auditing involved during the year in conducting system its scope and authority, which include: (Standards), developed by the IIA and or process reviews that may be requested • review of annual internal and external has incorporated these Standards into by the AC or Management on specific areas audit plans; its audit practices. of concerns. In doing so, the department • review of audit findings of internal and obtains reasonable assurance that business external auditors, as well as Management The Standards set by the IIA cover objectives for the process under review are responses to them; requirements on: being achieved and key control mechanisms • review of quarterly, half-yearly and annual • independence and objectivity; are in place. financial statements; • proficiency and due professional care; • review of the quality and reliability of • managing the internal audit activity; Upon completion of each review, a formal information prepared for inclusion in • engagement planning; report detailing the audit findings and the financial reports; • performing engagement; and appropriate recommendations is issued • recommendation for the appointment and • communicating results. to the AC. IA monitors and reports on the re-appointment of external auditors; and timely implementation of the action plans to • approval of the remuneration and terms of The internal auditors involved in IT audits are Management and the AC on a quarterly basis. engagement of external auditors. Certified Information System Auditors and members of the Information System Audit and The external auditors provide an independent In addition, the AC also: Control Association (ISACA) in the USA. The perspective on certain aspects of the internal • meets with the external and internal ISACA Information System Auditing Standards financial controls system arising from their auditors, without the presence of provide guidance on the standards and work and annually report their findings to Management, at least once a year to procedures to be applied in IT audits. the AC. review and discuss the financial reporting process, system of internal controls To ensure that the internal audits are Transaction Review Committee (including financial, operational and performed by competent professionals, With the listing of Mapletree Greater China compliance controls), significant comments IA employs qualified staff. In order for their Commercial Trust (MGCCT) in March 2013, and recommendations; and technical knowledge to remain current and where Mapletree is the sponsor, Mapletree • reviews and, if required, investigates relevant, IA also provides training and has established a Transaction Review the matters reported via the whistle- development opportunities to the staff. Committee to (a) resolve any potential conflict blowing mechanism by which staff may, of interest that may arise between MGCCT in confidence, raise concerns about D) Communication and the Mapletree China Opportunity Fund II suspected improprieties including (whose investment mandate includes financial irregularities. with Shareholders investment properties in China) as well as Mapletree subscribes to the principle of The objective is to ensure that arrangements any Future Greater China Commercial Private providing regular and timely communications are in place for independent investigations of Fund (whose investment mandate includes with its shareholder as well as ensuring equal any matter arising from such meetings and for commercial properties in Greater China) access to information. concerning the process to be undertaken review to ensure appropriate follow-up actions. to acquire investment properties in Greater China, and (b) grant approval for the The AC held a total of four AC meetings acquisition of any seed asset for a Future in FY13/14. Greater China Commercial Private Fund. With regard to (a), the Transaction Review Internal Audit Committee process will not apply if the Mapletree adopts the practice that IA reports proposed acquisition is by way of a tender, directly to the Chairman of the AC and auction or other form of competitive process. administratively to the Group Chief, Corporate Services, who reports to the Group CEO. Audit and Risk Committee The AC supports the Board thereby allowing The role of IA is to conduct its internal audit deeper overview of financial, risk and audit work in consultation with, but independently matters, so as to maximise the effectiveness of Management. Its annual audit plan and of the Board and foster active participation findings are submitted to the AC. The AC also and contribution. meets with IA at least once a year without the presence of Management. The Head of Mapletree applies the principle that the AC IA is a member of the Singapore branch of shall have at least three members, all of whom the Institute of Internal Auditors Inc. (IIA), must be non-executive and the majority of which has its headquarters in the USA. IA is whom must be independent. in conformance with the Standards for the 72 Sustainability Risk Management

Risk management is integral to Mapletree’s business strategy Entrenched Mindset of delivering consistent and high returns, and is driven by and Culture Management. Mapletree has formalised an Enterprise Risk At Mapletree, risk management is Management (ERM) framework, which enables the Group to assess, implemented “top down” and practised mitigate and monitor risks. The framework aims to preserve capital, “bottom up”. This ensures a risk approach that ensure business resilience in an economic downturn and provide is aligned with the Group’s business objectives support for Management’s decision making. and strategies, and integrated with operational processes for effectiveness and accountability.

Mapletree’s ERM framework is dynamic and Strong Oversight nature and extent of risks which Management is willing to take in achieving its business evolves with the business. The RM team and Governance objectives. The Board is supported by the works closely with Management to review Audit and Risk Committee (AC), which and enhance the risk management system The Board of Directors (Board) is responsible comprises independent directors whose in accordance with market practices and for determining the overall risk strategy collective experience and knowledge serve regulatory requirements. A Group-wide and risk governance, and ensuring that to guide and challenge Management. The AC control self-assessment (CSA) framework Management implements sound risk has direct access to the Risk Management further creates risk awareness by fostering management and internal control practices. (RM) team, which it engages quarterly as part accountability, control and risk ownership. The Board also approves the risk appetite of its review of Mapletree’s portfolio risks. and tolerance statements, which set out the

Risk Appetite, Tolerance, Attitudes and Philosophy Risk Strategy Risk Reporting Structures, Roles, Risk Governance Responsibilities and Communication 1. Risk Identification

5. Risk Reporting 2. Risk Assessment Risk Risk Risk Analysis Management Management Process 4. Risk Monitoring Process Risk Evaluation

3. Risk Treatment

Information Financial Risk Tracked Strategic External Operational Compliance Technology

Standard Risk Internal Key Risk Delegation of Control Self- Operating Trainings Whistle-blowing Audit Indicators Authority Assessment Awareness Procedures Mapletree Investments Pte Ltd Annual Report 2013/2014 Risk Management 73

Robust Measurement independently determined by the RM team Management prudently manages exposure and regularly reviewed by Management. To to interest rate volatility from its floating rate and Analysis test the robustness of the assumptions used, borrowings by way of interest rate swaps. To sensitivity analysis is performed for key project mitigate foreign exchange risks, Management Mapletree’s risk measurement framework is variables, which are benchmarked against will borrow in the same currency as the based on Value-at-Risk (VaR), a methodology the relevant market comparables. For material underlying assets to provide some natural which measures the volatilities of market and acquisitions, independent risk assessments hedge or hedge through derivatives whenever property risk drivers such as rental rates, are conducted by the RM team and included appropriate. The Group also actively monitors occupancy rates, capital values, interest in investment proposals submitted to the its cash flow position and requirements to rates and foreign exchange rates. It takes into Investment Committee or the Board for ensure significant liquid reserves to fund consideration changes in market environment approval. All investment proposals are subject operations and meet short-term obligations. and asset cash flows as they occur. To to rigorous scrutiny by the Board (or its In addition, Management tracks and monitors further complement the VaR methodology, delegates, depending on agreed thresholds). bank concentration risks, ensuring a well- other risks such as refinancing, customer diversified funding base. creditworthiness and developmental risks are also assessed, monitored and as far as External Risks possible, measured as part of the framework. To mitigate country risks such as economic Compliance Risks uncertainties or political turbulence in The Group is subject to applicable laws With the VaR methodology, Mapletree countries where it operates, Mapletree and regulations of various jurisdictions in quantifies risk on a consistent basis across conducts rigorous country and market which it operates. Non-compliance may business units, countries and asset types, research, and monitors economic and result in litigation, penalties, fines or revoking identifying high risk assets, sectors and political developments closely. of business licenses. Mapletree identifies countries. This enables Mapletree to make applicable laws and regulatory obligations informed and efficient capital allocation Operational Risks and embeds compliance in day-to-day decisions by quantifying the benefits of risk Comprehensive operating, reporting and business processes. diversification across its portfolio. Recognising monitoring guidelines enable Mapletree to the limitations of any statistically-based system manage day-to-day activities and mitigate Information Technology (IT) Risks that relies on historical data, Mapletree’s operational risks. To ensure relevance, Any system downtime or breach in security portfolio is subject to further stress testing the Group regularly reviews its Standard may have an adverse impact on the integrity, and scenario analyses to ensure that Operating Procedures (SOPs) and accuracy and completeness of data and businesses remain resilient during unexpected benchmarks them against industry practices. information. Mapletree has comprehensive market shocks. Compliance with SOPs is ensured by the CSA policies and procedures governing information framework and reinforced through training availability, control and governance, as well Management also identifies key risks, of employees and regular checks by the as data security. In addition, the IT disaster assesses their likelihood and impact on Internal Audit department, which reports recovery plan is in place and tested to ensure businesses, and establishes corresponding independently to the AC. business recovery objectives are met. mitigating controls. The information is maintained in a risk register that is reviewed In the event of catastrophes such as Rigorous Monitoring terrorism and natural disasters, Mapletree and updated regularly. The key risks identified and Control include but are not limited to: has put in place and tested a comprehensive Business Continuity Plan to enable it to Mapletree has developed internal key risk Strategic Risks resume operations with minimal disruption indicators that serve as a warning system to Mapletree’s portfolio is subject to real estate and loss. Mapletree’s properties are insured Management by highlighting risks that have market risks such as rental rates and in accordance with industry norms in their escalated beyond established tolerance occupancy volatilities in the countries it respective jurisdictions and benchmarked levels. Management has also established operates and specific factors including against those in Singapore. required actions to be taken when risk competition, supply, demand and regulations. thresholds are breached. Such risks are quantified, aggregated and Financial Risks monitored for existing assets and new Financial market risks and capital structure Every quarter, the RM team presents to acquisitions. Significant risk profile changes or are closely monitored and actively managed the Board and AC a comprehensive report emerging trends are reported for assessment by Management, and reported quarterly to the highlighting key risk exposures, portfolio risk and/or action. Board. At the portfolio level, the risk impact of profile, results of stress testing scenarios and interest rate and currency volatilities on value status of key risk indicators. The Board and AC The Group has a disciplined investment is quantified, monitored and reported quarterly are also kept abreast of any material changes approach which subjects all investment using the VaR methodology. Refinancing risk to the Group’s risk profiles and activities. proposals to stringent reviews. Project is also quantified, taking into account the returns are assessed against internal country concentration of the loan maturity profile and and sector-specific hurdle rates, which are credit spread volatility. 74 Sustainability Human Resource

Mapletree is a dynamic and growing company with an extensive network in Asia. With the Group’s operations expanding across the region, staff strength rose to about 1,700 employees in FY13/14. Recognising that employees drive the Group’s success, Mapletree continually works with them to unlock their potential and enrich its talent base through talent attraction, staff development, performance management and employee welfare.

Strengthening the Pipeline international institutions to engage students Sharpening the Focus early in their career planning. Besides hosting student visits to Mapletree’s offices, Talent Attraction Talent Development One focus of Mapletree’s talent attraction participating in university career and To equip its workforce with the requisite strategy is to identify and develop fresh networking events also help strengthen the knowledge and skills, Mapletree continued graduates with high potential. FY13/14 Group’s branding on-campus. Mapletree to build leadership and technical skills saw the launch of the Mapletree Graduate also offers internships to promising students during the year. The ‘Mapletree Service Trainee (GT) programme, an excellent entry from a range of disciplines, to expose them with a Difference’, a service excellence point for graduates seeking their first job. to the real estate industry and introduce the programme, was launched for frontline By collaborating with top universities in career options within Mapletree. Outstanding staff and aims to better equip service staff Singapore, Mapletree successfully recruited interns are considered for Mapletree’s with skills to anticipate and exceed eight promising and motivated graduates. graduate programmes upon the completion customers’ expectations. Based on the graduates’ career interest and of their studies. aptitude, Mapletree placed them in roles Mapletree’s cornerstone leadership such as Investment, Asset Management, Concurrently, Mapletree has launched an programmes designed for employees who Human Resource, Retail Management internal job posting platform to facilitate possess managerial calibre were also and Development Management. Through career development and talent retention. enhanced. New segments include participation in live projects, job shadowing, This allows Mapletree employees to apply for application tactics through role play, as coaching, peer support and on-the-job different roles within the Group and provides well as harnessing self-awareness and training over a 12-month period, the GTs cross-function exposure which in turn helps understanding of personality dynamics as build technical knowledge in the respective deepen employees’ expertise and cultivate leadership tools. functions. Such a holistic training process is personal growth. expected to help the GTs transition quickly and contribute effectively to the work teams.

The Group also attracts talents through its management associate scheme, the Mapletree International Talent Management (MINT) programme, which targets candidates with a postgraduate degree and some years of working experience. The programme offers local and overseas job rotations for these graduates to hone their competencies as real estate professionals. In FY13/14, the programme was enhanced with a six-month extension to 24 months, to provide greater exposure to Mapletree’s various operations.

To raise Mapletree’s profile as an employer of choice, the Group actively partners local and

Mapletree’s leadership programmes are designed for those possessing managerial calibre Mapletree Investments Pte Ltd Annual Report 2013/2014 Human Resource 75

first “Healthy Workplace Ecosystem”. Through a partnership with the Health Promotion Board to encourage a healthy lifestyle at the workplace, MBC ran a series of programmes ranging from offering healthier food options at MBC’s food outlets, to organising health talks and screenings as well as weekly mass runs. The campaign raised awareness and made healthier options more accessible to working adults. To supplement these efforts, Mapletree continued to run its Workplace Health Promotion series, which is open to MBC tenants as well as Mapletree employees. The series included the annual MBC blood donation drive and lunchtime talks addressing wellness topics such as “Making Sense of Your Money”, “Build Your Inner Strength” and “Preparing Healthy Meals”. These ‘Mapletree Service with a Difference’ training session programmes were warmly received. Apart from providing quality work-life balance, Additionally, the Group conducted a Shaping the Work Environment such efforts help create a holistic working 360-degree feedback survey to increase environment at MBC. senior leaders’ self-awareness and help Employee Welfare identify their development needs. The results To promote staff welfare, improve work-life are intended to have a multiplier effect where balance and expand employees’ social teams under the leaders’ charge can be better contacts in the workplace, the Mapletree shaped and have their skills sharpened. Recreation Club led various initiatives to foster employee engagement and interaction To further strengthen technical skills on during the year. The inaugural “Movie Night”, investment evaluation, the Group launched for instance, welcomed over 700 staff and an assessment tool for senior leaders to their family members. In support of the evaluate investment teams on their project annual national “Eat with Your Family Day” proposals. This initiative aims to provide in Singapore, all employees were encouraged guidance and feedback to the investment to head home earlier. Mapletree also extended teams through critical analysis of deals, this initiative to its overseas offices. further strengthening their business acumen. During the year, Mapletree Business City (MBC) To encourage a vibrant learning environment, at Alexandra Precinct became Singapore’s The annual MBC Blood Drive is supported by members of the Mapletree offers schemes that subsidise Mapletree Recreation Club employees’ course fees for higher learning, book purchases, and/or self-development efforts. Meanwhile, the ongoing Learning Fiesta enables employees to attend bite- sized seminars on topics such as “Essentials of Interpersonal Communication”, “Effective Negotiation” and “Harmony with Bosses and Peers”.

Performance Management During the year, Mapletree rolled out an improved staff assessment process that emphasises core competencies in addition to key performance indicators and targets. The competencies across all staff categories were streamlined for greater consistency and to reflect the up-skilling expected as employees make career progress within the Group.

Mapletree Recreation Club organised interactive staff activities during festive occasions 76 Property Portfolio

Name of Building / Site Holding Company Effective Term of Remaining Land Area Gfa Stake Lease Term of Lease (sqm) (sqm) (%) (Years) (Years)

Singapore Commercial HarbourFront Centre HarbourFront Centre Pte Ltd 100 99 82.5 32,900 98,800 1 Maritime Square

HarbourFront Tower One HarbourFront Two Pte Ltd 61 99 40,300 1 HarbourFront Place 82.5 10,900 combined HarbourFront Tower Two HarbourFront Two Pte Ltd 61 99 19,200 3 HarbourFront Place

Keppel Bay Tower HarbourFront One Pte Ltd 30 99 82.5 17,300 41,800 1 HarbourFront Avenue

PSA Vista Vista Real Estate 100 99 82.5 12,900 21,900 20 Harbour Drive Investments Pte Ltd

St James Power Station The HarbourFront Pte Ltd 100 99 82.5 17,800 8,700 3 Sentosa Gateway

Industrial 43 Keppel Road Bougainvillea Realty Pte Ltd 100 30 13.5 8,600 10,500

Pasir Panjang Distripark Bougainvillea Realty Pte Ltd 100 20 3.5 56,600 63,600 151 Pasir Panjang Road

Tanjong Pagar Distripark Bougainvillea Realty Pte Ltd 100 30 13.5 40,800 72,200 37 & 39 Keppel Road

Mixed-Use Development Mapletree Business City Mapletree Business City Pte Ltd 100 99 82.5 184,200 10, 20 & 30 Pasir Panjang Road 108,500 combined Sites for Development / Land Leases The Comtech (redevelopment) Mapletree Business City Pte Ltd 100 99 82.5 124,900 60 Alexandra Terrace

HF3 Residential Site HarbourFront Three Pte Ltd 61 99 82.5 28,600 32,000

SPI Development Site HarbourFront Four Pte Ltd 100 99 82.5 25,000 32,000

West Coast Ferry Bougainvillea Realty Pte Ltd 100 30 13.5 19,900 – Terminal (land lease) 62 West Coast Ferry Road Mapletree Investments Pte Ltd Annual Report 2013/2014 Property Portfolio 77

Name of Building / Site Holding Company Effective Term of Remaining Land Area Gfa Stake Lease Term of Lease (sqm) (sqm) (%) (Years) (Years)

China Mapletree Beijing FTZ Park (Phase 1) Mapletree Zhuyuan (Beijing) 100 50 44 67,906 14,073 Beijing Logistics Development Co., Ltd

Mapletree Tianjin Airport Mapletree (Tianjin) Airport 100 50 40 48,281 66,470 Logistics Park Logistics Development Co., Ltd Tianjin

Mapletree Tianjin Port HaiFeng Mapletree Tianjin Free Port 49 50 43 182,192 194,072 Bonded Logistics Park Development (HKSAR) Limited Tianjin

Mapletree Yangshan Bonded Mapletree Lingang Logistics 100 50 42 98,798 45,933 Logistics Park Warehouse (Shanghai) Co., Ltd Shanghai

Mapletree Zhengzhou International Mapletree Emerald (ZILP) Ltd 100 50 48 130,591 79,319 Logistics Park Zhengzhou

Mapletree Wuxi New District Fengshuo Warehouse 100 50 50 99,958 124,202 Logistics Park Development (Wuxi) Co., Ltd Wuxi

Mapletree Fengdong (Xi’an) Fengshang Logistics 100 50 50 70,806 44,318 Logistics Park Phase 1 Development (Xi’an) Co., Ltd Xi’an

Mapletree Fengdong (Xi’an) Fengshang Logistics 100 50 50 119,415 75,328 Logistics Park Phase 2 Development (Xi’an) Co., Ltd Xi’an

Hong Kong SAR Mapletree Logistics Hub Tsing Yi Mapletree TY (HKSAR) Limited 100 50 49 21,000 85,000 Tsing Yi, New Territories

Japan Higashi Nihonbashi Building Higashikojiya Shugogatakojo 100 Freehold Freehold 642 3,240 Tokyo Tokutei Mokuteki Kaisha

IXINAL Monzen-Nakacho Building Higashikojiya Shugogatakojo 100 Freehold Freehold 2,788 9,175 Tokyo Tokutei Mokuteki Kaisha

Omori Prime Building Satsuki Tokutei 100 Freehold Freehold 1,764 10,442 Tokyo Mokuteki Kaisha

OTA Techno CORE Higashikojiya Shugogatakojo 100 Freehold Freehold 4,597 8,489 Tokyo Tokutei Mokuteki Kaisha

TS Ikebukuro Building Higashikojiya Shugogatakojo 100 Freehold Freehold 674 4,898 Tokyo Tokutei Mokuteki Kaisha 78

Name of Building / Site Holding Company Effective Term of Remaining Land Area Gfa Stake Lease Term of Lease (sqm) (sqm) (%) (Years) (Years)

Joso Centre Godo Kaisha Joso 100 Freehold Freehold 27,757 27,152 Ibaraki

Odawara Centre 1 Godo Kaisha Odawara 1 100 Freehold Freehold 68,451 136,898 Kanagawa

Odawara Centre 2 Godo Kaisha Odawara 2 100 Freehold Freehold 34,278 68,556 Kanagawa

Malaysia Mapletree Shah Alam Logistics Park Carrymell (M) Sdn. Bhd. & 100 99 84 100,700 60,158 Shah Alam, Selangor Darul Ehsan Maypex Ventures Sdn. Bhd.

Vietnam Mapletree Binh Duong Logistics Park Mapletree Logistics Park 100 49 41 676,348 440,000 (construction in phases; phases 1 & 2 Phase 1 (Vietnam) Co., Ltd - 140,215 sqm completed) Mapletree Logistics Park Vietnam Singapore Industrial Park II Phase 2 (Vietnam) Co., Ltd Binh Duong Province Mapletree Logistics Park Phase 3 (Vietnam) Co., Ltd Mapletree Logistics Park Phase 4 (Vietnam) Co., Ltd Mapletree Logistics Park Phase 5 (Vietnam) Co., Ltd Mapletree Logistics Park Phase 6 (Vietnam) Co., Ltd

Mapletree Bac Ninh Logistics Park Mapletree Logistics Park Bac Ninh 100 50 44 545,712 310,000 (construction in phases; phase 1 Phase 1 (Vietnam) Co., Ltd - 54,352 sqm completed) Mapletree Logistics Park Bac Ninh Vietnam Singapore Industrial Park Phase 2 (Vietnam) Co., Ltd Bac Ninh Mapletree Logistics Park Bac Ninh Bac Ninh Province Phase 3 (Vietnam) Co., Ltd Mapletree Logistics Park Bac Ninh Phase 4 (Vietnam) Co., Ltd Mapletree Logistics Park Bac Ninh Phase 5 (Vietnam) Co., Ltd

Mapletree Business City Binh Duong Real Estate 1 Pte Ltd 100 50 44 748,759 706,557 @ Binh Duong Binh Duong Industry – Service – Urban Complex Hoa Phu Ward, Thu Dau Mot City, Binh Duong Province

Saigon South Place Mapletree Tan Phong Ltd 62 50 47 44,373 262,305 Ho Chi Minh City

Pacific Place Ever Fortune JSC 100 42 29 5,430 42,725 Hanoi

CentrePoint Nguyen Vu Investment JSC 100 32 25 4,163 33,357 Ho Chi Minh City 79 Awards and Accolades

2014 Green Mark Award (Certified) Top 50 Singapore Brands Building and Construction Authority, Singapore Brand Finance, Singapore Nanhai Business City (Phase 1A) – Mapletree Logistics Trust Management Ltd The Most Favourite Hong Kong Brand – Residential Sub-phase 1 Shopping Mall Category 2013 Frost & Sullivan Asia Pacific Logistics Southern Metropolis Daily, Guangzhou Green Mark Gold Award Infrastructure Developer of the Year Festival Walk Building and Construction Authority, Singapore Frost & Sullivan Bank of America Merrill Lynch HarbourFront Mapletree Logistics Trust Management Ltd Top 10 Favourite Shopping Malls Hong Kong Economic Times Green Mark Gold Award The Asset Triple A Regional House and Festival Walk Building and Construction Authority, Singapore Deal Awards – Best REIT K&S Corporate Headquarters The Asset Magazine, Hong Kong SAR Global PERE Awards – Mapletree Greater China Commercial Trust Asia Capital Raise of the Year Green Mark Gold Award PERE Magazine Building and Construction Authority, Singapore REIW Asia Awards for Excellence – Mapletree Investments Pte Ltd for 978 & 988 Toa Payoh North Best Capital Raising Strategy of the Year Mapletree China Opportunity Fund II Real Estate Investment World Asia Green Mark Gold Award IPO of Mapletree Greater China Precertification for LEED India for Building and Construction Authority, Singapore Commercial Trust Core and Shell Development Gold Level HarbourFront Towers One and Two Indian Green Building Council Indoor Air Quality Certificate (Excellent Global Technology Park Green Mark Award Class) – Suite 308 and Common Area of Building and Construction Authority, Singapore Office Building (2009 – 2013) PSA Vista 2013 Environmental Protection Department, Hong Kong SAR Green Mark Gold Award Festival Walk Precertification for LEED for Core and Building and Construction Authority, Singapore Shell Development Gold Level VivoCity Indoor Air Quality Certificate (Good Class) – U.S. Green Building Council Retail Common Area (2011 – 2013) MBC II Precertification for LEED for Core and Environmental Protection Department, Shell Development Gold Level Hong Kong SAR U.S. Green Building Council Green Mark Platinum Award Festival Walk Building and Construction Authority, Singapore Mapletree Business City Shanghai MBC II Caring Company Certificate Precertification for LEED for Core and The Hong Kong Council of Social Service Plus Shell Development Silver Level Universal Design Gold Award – Festival Walk (New Non-Residential Category) U.S. Green Building Council Building and Construction Authority, Singapore VivoCity Shanghai Yahoo! Emotive Brand Awards – Mapletree Business City Winner for Shopping Centre Category AsiaOne People’s Choice Awards – Yahoo!, Hong Kong SAR Winner, Best Shopping Centre Green Mark Platinum Award Festival Walk Building and Construction Authority, Singapore AsiaOne, Singapore Mapletree Business City VivoCity Most Favourite Shopping Mall in Town Fashion & Beauty Magazine, Hong Kong SAR Marketing Excellence Awards – Excellence Green Mark Platinum Award Festival Walk Building and Construction Authority, Singapore in In-store Marketing Gold Award Mapletree Anson Marketing Magazine Group, Singapore VivoCity Most Wanted Prestigious Brands by Mainland Visitors Green Mark Platinum Award st Love Travel Media, Hong Kong SAR ASEAN Energy Awards – 1 Runner-up, Building and Construction Authority, Singapore Festival Walk Mapletree Benoi Logistics Hub Energy Efficient Building (New and Existing Category) ASEAN Centre of Energy Mapletree Anson 80

2012 Top 50 Singapore Brands Green Mark Platinum Award Brand Finance, Singapore (Office Interior) Mapletree Logistics Trust Management Ltd Building and Construction Authority, Singapore AsiaOne People’s Choice Awards – Mapletree Investments Pte Ltd Winner, Best Shopping Centre Water Efficient Building Certification AsiaOne, Singapore PUB, Singapore Green Mark Platinum Award VivoCity PSA Vista Building and Construction Authority, Singapore HarbourFront Centre Social Enterprise Association Corporate Water Efficient Building Certification Award – Gold Award PUB, Singapore Singapore Service Class Status Social Enterprise Association, Singapore The Signature SPRING Singapore VivoCity VivoCity Water Efficient Building Certification The MARKies Awards – Best Idea PUB, Singapore World’s Top 10 Retail Destinations (Retail Category) Woodlands Spectrum Shopping Center News, India Marketing Magazine Group, Singapore VivoCity VivoCity Water Efficient Building Certification PUB, Singapore Expat Living Reader Awards 2011 – Patron of the Arts Kallang Basin 4 Cluster 3rd place (Shopping Centre Category) National Arts Council, Singapore Expat Living, Singapore Mapletree Investments Pte Ltd Quality Water Recognition Scheme VivoCity for Buildings (2011 – 2012) Green Mark Gold (Provisional) Award Water Supplies Department Social Enterprise Association Building and Construction Authority, Singapore Festival Walk Corporate Award Menara CIMB Social Enterprise Association, Singapore VivoCity Construction Excellence Award 2011 (Commercial/Mixed Development Building) Friend of Water Building and Construction Authority, Singapore SIA-NParks Skyrise Greenery Awards – PUB, Singapore Mapletree Business City Merit Winner Bank of America Merrill Lynch HarbourFront Singapore Institute of Architects and FIABCI Prix d’Excellence Awards – National Parks, Singapore Top 5 Consistent Performing Closed-End Runner-up (Sustainable Development Mapletree Business City Private Real Estate Fund Managers Category) Preqin Federation Internationale des Administrateurs LIAS Awards of Excellence 2011 – Mapletree Investments Pte Ltd de Bien-Conseils Immobiliers Gold (Best of Category) Mapletree Business City Landscape Industry Association, Singapore SIAS Investors’ Choice Awards – Mapletree Business City Runner-up, Most Transparent Company nd ASEAN Energy Awards – 2 Runner-up, Award 2011 (New Issues Category) Energy Efficient Building (New and Green GOOD DESIGN Award 2011 – Securities Investors Association (Singapore) Existing Category) Green Architecture Category Mapletree Commercial Trust ASEAN Centre of Energy The European Centre for Architecture Mapletree Business City Art Design and Urban Studies and 2011 Frost & Sullivan Asia Pacific Logistics The Chicago Athenaeum Park Developer of the Year ASEAN Energy Awards – Winner, Mapletree Business City Frost & Sullivan Energy Efficient Building Mapletree Logistics Trust Management Ltd (Retrofitted Category) Universal Design Silver Award ASEAN Centre of Energy Building and Construction Authority, Singapore Building Environmental Assessment HarbourFront Centre Mapletree Business City Method (BEAM) – Platinum Rating in 2011 BEAM Society, Hong Kong SAR Euromoney Real Estate Awards – FIABCI Singapore Property Awards Festival Walk Best Industrial/Warehouse Developer (Sustainable Development Category) in Singapore Federation Internationale des Administrateurs Euromoney de Bien-Conseils Immobiliers Singapore Mapletree Investments Pte Ltd Mapletree Business City Financial Statements

Contents

82 92 Directors' Report Statements of Changes in Equity – The Company 86 Statement by Directors 93 Consolidated Cash Flow 87 Statement Independent Auditor's Report 95 88 Notes to the Financial Income Statements Statements

89 Statements of Comprehensive Income

90 Balance Sheets

91 Statements of Changes in Equity – The Group 82 Directors' Report For the financial year ended 31 March 2014

The directors present their report to the member together with the audited income statements, statements of comprehensive income, balance sheets and statements of changes in equity of the Company and the Group, and the audited consolidated cash flow statement of the Group for the financial year ended 31 March 2014.

Directors

The directors of the Company in office at the date of this report are as follows:

Cheng Wai Wing Edmund David Christopher Ryan (Appointed on 18 March 2014) Frank Wong Kwong Shing (Resigned on 31 March 2014) Lee Chong Kwee Ma Kah Woh Paul Samuel N. Tsien (Appointed on 18 March 2014) Tsang Yam Pui Wong Meng Meng Hiew Yoon Khong

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than those disclosed under “Mapletree Share Appreciation Rights Plan”, “Mapletree Performance Share Units Plan”, “Mapletree Restricted Share Units Plan” and “Mapletree NED Restricted Share Units Plan” on pages 83 to 85 of this report.

Directors’ interests in shares or debentures

According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Holdings in which a Holdings registered director is deemed in the name of director to have an interest At 31.03.14 At 01.04.13 At 31.03.14 At 01.04.13 Neptune Orient Lines Limited (Ordinary shares) Hiew Yoon Khong - - 140,000 140,000

STATS ChipPAC Ltd (Ordinary shares) Cheng Wai Wing Edmund 177,000 177,000 - -

Singapore Technologies Engineering Ltd (Ordinary shares) Hiew Yoon Khong - - 30,000 30,000

Singapore Telecommunications Limited (Ordinary shares) Ma Kah Woh Paul 190 190 190 190 Wong Meng Meng 1,667 1,667 1,550 1,550

Starhub Ltd (Ordinary shares) Ma Kah Woh Paul 78,580 78,580 - - Hiew Yoon Khong - - 150,000 150,000 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 83

Directors’ contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit 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 has a substantial financial interest, except that a director has an employment relationship with the Company, and has received remuneration in that capacity.

Share-based Compensation Plans

The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the share-based compensation plans.

(a) Mapletree Share Appreciation Rights Plan

The Mapletree Share Appreciation Rights Plan (“MSA Plan”) for employees and non-executive directors was adopted by the Board of Directors and shareholder of the Company on 4 January 2008 and are restricted to employees and non-executive directors of the Group. For the financial years ended 31 March 2008 and 31 March 2009, Mapletree Share Appreciation Rights (“MSA Rights”) were granted to certain employees and non-executive directors of the Group. Participants of the MSA Plan were granted MSA Rights at a grant value which was determined by the ERCC using the fair value of the ordinary shares in the capital of the Company (“Company Shares”). Participants may exercise the MSA Rights commencing on or after a realisable event and expiring on the tenth (10th) anniversary of such grant.

Upon exercise of the MSA Rights, the Company shall procure that the participant is paid for each MSA Right in respect of which the grant is exercised, an amount equal to the excess of the market value of one unit share over the grant value of the MSA Rights. If the ERCC is of the opinion that the market value as determined is not representative of the value of a unit share, the fair market value will be determined at such price as deemed to be reasonable by the ERCC. The ERCC has the absolute discretion to determine if the payment will be made wholly or partly in the form of the Company Shares or in cash.

Following a review of the MSA Plan by the ERCC in 2009, the Company ceased to grant MSA Rights under the MSA Plan from the financial year ended 31 March 2010. The terms of the MSA Rights granted in the financial years ended 31 March 2008 and 31 March 2009 were also modified to include the addition of a performance condition which is tested for achievement at pre-determined dates.

Prior to the modifications, the Company has to settle the MSA Rights only upon the realisation event. Without the realisation event, the MSA Rights awarded will lapse. With the modifications, if the realisation event does not happen but the performance condition is achieved at the pre-determined dates, the Company will have to settle the MSA Rights in cash over three years from the alternative realisation date, subject to a cap in the cash settlement value.

The performance condition added as part of the modifications was achieved as of 31 March 2013.

Details of the MSA Rights granted to the directors of the Company are as follows:

Outstanding Outstanding Name of Directors as at 31.03.14 as at 31.03.13 Cheng Wai Wing Edmund 163,467 245,200 Frank Wong Kwong Shing (resigned on 31 March 2014) 81,800 122,700 Lee Chong Kwee 99,267 148,900 Ma Kah Woh Paul 105,067 157,600 Tsang Yam Pui 116,800 175,200 Wong Meng Meng 81,800 122,700 Hiew Yoon Khong 13,803,333 20,705,000 84 Directors' Report For the financial year ended 31 March 2014

Share-based Compensation Plans (continued)

(b) Mapletree Performance Share Units Plan and Mapletree Restricted Share Units Plan

The Mapletree Performance Share Units Plan (“Mapletree PSU Plan”) and the Mapletree Restricted Share Units Plan (“Mapletree RSU Plan”) (collectively referred to as the “Plans”) for employees (including executive director) were approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009. The first grant of award under the Plans was made in January 2010. The duration of each share plan is 10 years commencing 4 November 2009.

Under the Plans, awards are granted to eligible participants. Eligible participants of the Plans include selected employees of the Company, its subsidiaries and its associated companies, including executive director.

A Performance Share Unit (“PSU”) or Restricted Share Unit (“RSU”) granted under the Plans represents a right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Plans, provided certain performance conditions and service conditions are met.

Under the Mapletree PSU Plan, awards granted to eligible participants vest immediately upon completion of the performance achievement periods. Awards are released once the ERCC is satisfied that the performance conditions have been achieved.

Under the Mapletree RSU Plan, awards granted to eligible participants vest only after a further period of service beyond the performance target completion date. Awards under the Mapletree RSU Plan differ from awards granted under the Mapletree PSU Plan in that an extended vesting period is imposed beyond the performance target completion date. Awards are released only upon the completion of the extended period of service.

Details of the PSU and RSU granted to a director of the Company are as follows:

Outstanding Outstanding as at 31.03.14 as at 31.03.13 Hiew Yoon Khong - PSU to be released after 31.03.2014 465,000 (1) 465,000 (1) - PSU to be released after 31.03.2015 465,000 (1) 465,000 (1) - PSU to be released after 31.03.2016 757,500 (1) 757,500 (1) - PSU to be released after 31.03.2017 757,500 (1) 757,500 (1) - PSU to be released after 31.03.2018 397,820 (1) - - RSU to be released after 31.03.2011 - 82,800 (3) - RSU to be released after 31.03.2012 160,035 (3) 320,070 (4) - RSU to be released after 31.03.2013 240,620 (4) 340,500 (2) - RSU to be released after 31.03.2014 177,490 (2) -

Footnotes: 1. The final number of units to be released will depend on the achievement of pre-determined targets over a five-year performance period. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 200% of the initial award.

2. The final number of units to be released will depend on the achievement of pre-determined targets over a one-year performance period and the release will be over a vesting period of three years. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 150% of the initial award.

3. Being the unvested one-third of the award.

4. Being the unvested two-thirds of the award. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 85

Share-based Compensation Plans (continued)

The Mapletree NED Restricted Share Units Plan (“Mapletree NED RSU Plan”) was approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009 and are restricted to non-executive directors of the Company. The first grant of award was made in June 2010. The duration of the Mapletree NED RSU Plan is 10 years commencing 4 November 2009.

Under the Mapletree NED RSU Plan, awards are granted to eligible non-executive directors of the Company and its subsidiaries. A NED Restricted Share Unit (“NED RSU”) granted under the Mapletree NED RSU Plan represents a right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Mapletree NED RSU Plan. Grants of Mapletree NED RSU made to a non-executive director shall form part of the director’s remuneration.

Under the Mapletree NED RSU Plan, awards granted to eligible non-executive directors shall vest at the date of grant. The right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, is exercisable at the discretion of the non-executive directors at the annual pre-determined exercise period, until the date falling on the fifth (5th) anniversary of date of grant of each award.

Details of the NED RSU granted to the non-executive directors of the Company are as follows:

Outstanding Outstanding as at 31.03.14 as at 31.03.13 Cheng Wai Wing Edmund 48,508 35,153 Frank Wong Kwong Shing (resigned on 31 March 2014) 7,084 2,198 Lee Chong Kwee 28,037 21,522 Ma Kah Woh Paul 30,252 22,760 Tsang Yam Pui 29,472 22,306 Wong Meng Meng 2,768 14,395

Independent Auditor

The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.

On behalf of the directors

CHENG WAI WING EDMUND HIEW YOON KHONG Director Director

7 May 2014 86 Statement by Directors For the financial year ended 31 March 2014

In the opinion of the directors,

(a) the income statements, statements of comprehensive income, balance sheets and statements of changes in equity of the Company and the Group and the consolidated cash flow statement of the Group as set out on pages 88 to 155 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 31 March 2014 and of the results of the business and changes in equity of the Company and of the Group and cash flows of the Group for the financial year then ended; and

(b) 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 directors

CHENG WAI WING EDMUND HIEW YOON KHONG Director Director

7 May 2014 87 Independent Auditor's Report to the Member of Mapletree Investments Pte Ltd

Report on the Financial Statements

We have audited the accompanying financial statements of Mapletree Investments Pte Ltd (the “Company”) and its subsidiaries (the “Group”) set out on pages 88 to 155 which comprise the balance sheets of the Company and the Group as at 31 March 2014, income statements, statements of comprehensive income, statements of changes in equity of the Company and the Group for the financial year ended 31 March 2014, and the consolidated cash flow statement of the Group for the financial year ended 31 March 2014, 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 financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (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 financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of 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 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 accompanying income statements, statements of comprehensive income, balance sheets and statements of changes in equity of the Company and the Group and the consolidated cash flow statement of the Group 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 Company and of the Group as at 31 March 2014, and of the results and the changes in equity of the Company and of the Group and the cash flows of the Group for the financial 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.

PricewaterhouseCoopers LLP Public Accountants and Chartered Accountants

Singapore, 7 May 2014 88 Income Statements For the financial year ended 31 March 2014

The Group The Company Note 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Revenue 3 548,600 686,319 626,314 555,948

Other gains - net 4 226,164 297,756 12,784 23,620

Expenses - Depreciation and amortisation (5,153) (4,760) (3,496) (2,983) - Employee compensation 5 (171,512) (176,427) (104,919) (101,454) - Utilities and property maintenance (34,552) (48,518) (501) (569) - Property tax (29,637) (30,143) - - - Finance cost - net 6 (45,126) (103,324) - - - Others (38,938) (14,024) (38,578) (15,661) 450,206 581,965 514,521 460,538

Share of profit of associated companies 490,122 437,230 - - Share of profit of joint ventures 1,445 4,833 - - Profit before income tax 941,773 1,024,028 514,521 460,538

Income tax (expense)/credit 7 (66,356) (84,172) 8,125 503 Profit for the financial year 875,417 939,856 522,646 461,041

Profit attributable to: Equity holders of the Company 859,370 931,733 522,646 461,041 Non-controlling interests 8,123 - 16,047 - 875,417 939,856 522,646 461,041

The accompanying notes form an integral part of these financial statements. 89 Statements of Comprehensive Income For the financial year ended 31 March 2014

The Group The Company Note 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Profit for the financial year 875,417 939,856 522,646 461,041

Other comprehensive income: Items that may be reclassified subsequently to profit or loss: Financial assets, available-for-sale - fair value (losses)/gains 11 (5,368) 21,088 - - Cash flow hedges - fair value gains/(losses) 245 (4,307) - - - reclassification 4,328 8,719 - - Currency translation differences (6,127) (9,409) - - Share of other comprehensive income of associated companies/joint ventures - fair value gains/(losses) on cash flow hedges 6,399 (394) - - - currency translation differences 39,460 (21,434) - - Other comprehensive income for the financial year, net of tax 38,937 (5,737) - - Total comprehensive income for the financial year 914,354 934,119 522,646 461,041

Total comprehensive income attributable to: Equity holders of the Company 897,598 929,961 522,646 461,041 Non-controlling interests 16,756 4,158 - - 914,354 934,119 522,646 461,041

The accompanying notes form an integral part of these financial statements. 90 Balance Sheets As at 31 March 2014

The Group The Company Note 2014 2013 2014 2013 $’000 $’000 $’000 $’000 ASSETS Current assets Cash and cash equivalents 8 303,302 1,742,815 3,443 12,114 Derivative financial instruments 20 5,325 3,707 - - Trade and other receivables 9 130,993 166,675 1,082,115 1,710,969 Residential investment property held for sale 15,882 15,722 - - Other assets 10 13,571 5,106 1,400 1,136 469,073 1,934,025 1,086,958 1,724,219 Non-current assets Trade and other receivables 9 48,544 40,500 1,944,149 914,176 Financial assets, available-for-sale 11 137,195 141,313 - - Investments in associated companies 12 3,951,387 3,832,504 - - Investments in joint ventures 13 70,935 63,320 - - Investments in subsidiaries 14 - - 1,999,508 1,999,508 Investment properties 15 4,697,351 4,258,634 - - Properties under development 16 1,367,336 470,339 - - Property, plant and equipment 17 9,474 11,521 7,310 8,417 Intangible assets 18 9,588 9,153 8,250 7,659 Other assets 10 4,507 - - - 10,296,317 8,827,284 3,959,217 2,929,760 Total assets 10,765,390 10,761,309 5,046,175 4,653,979 LIABILITIES Current liabilities Trade and other payables 19 280,679 316,054 109,648 116,084 Derivative financial instruments 20 11,471 11,666 - - Borrowings 21 202,787 653,958 - - Current income tax liabilities 46,821 68,337 1,480 1,849 541,758 1,050,015 111,128 117,933 Non-current liabilities Trade and other payables 19 135,959 136,701 73,081 89,095 Borrowings 21 851,964 1,124,656 - - Deferred income tax liabilities 22 118,776 106,033 1,273 1,096 1,106,699 1,367,390 74,354 90,191 Total liabilities 1,648,457 2,417,405 185,482 208,124 NET ASSETS 9,116,933 8,343,904 4,860,693 4,445,855 EQUITY Share capital 23 3,094,307 3,094,307 3,094,307 3,094,307 Retained earnings 5,146,956 4,414,828 1,766,386 1,345,460 Foreign currency translation reserve (8,789) (41,582) - - Share compensation reserve - 6,088 - 6,088 Hedge reserve 1,050 (9,753) - - Fair value reserve 39,490 44,858 - - 8,273,014 7,508,746 4,860,693 4,445,855 Perpetual securities 24 597,076 597,076 - - Non-controlling interests 246,843 238,082 - - Total equity 9,116,933 8,343,904 4,860,693 4,445,855

The accompanying notes form an integral part of these financial statements. 91 Statement of Changes in Equity – The Group For the financial year ended 31 March 2014

Foreign Share currency Non- Share compensation Fair value translation Hedge Retained Perpetual controlling Total Note capital reserve reserve reserve reserve earnings securities interests equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 As at 1 April 2013 3,094,307 6,088 44,858 (41,582) (9,753) 4,414,828 597,076 238,082 8,343,904

Total comprehensive income for the financial year - - (5,368) 32,793 10,803 859,370 - 16,756 914,354

Share-based expenses - 2,564 ------2,564

Reclassification of share-based compensation plan from equity-settled to cash-settled - (8,652) - - - (1,720) - - (10,372)

Dividend relating to 2013 paid 31 - - - - - (100,000) - - (100,000)

Dividend paid to non-controlling interests ------(7,995) (7,995)

Perpetual securities - distribution paid ------(30,750) - (30,750) - distribution accrued - - - - - (30,750) 30,750 - -

Tax credit arising from perpetual securities - - - - - 5,228 - - 5,228

As at 31 March 2014 3,094,307 - 39,490 (8,789) 1,050 5,146,956 597,076 246,843 9,116,933

As at 1 April 2012 3,094,307 8,677 23,770 (14,536) (13,939) 3,593,108 - 247,648 6,939,035

Total comprehensive income for the financial year - - 21,088 (27,046) 4,186 931,733 - 4,158 934,119

Share-based expenses - 3,514 ------3,514

Reclassification of share-based compensation plan from equity-settled to cash-settled - (6,103) - - - (51,952) - - (58,055)

Dividend relating to 2012 paid 31 - - - - - (40,000) - - (40,000)

Dividend paid to non-controlling interests ------(7,800) (7,800)

Capital contribution from non-controlling interests ------7,057 7,057

Acquisition of interests in subsidiaries from non-controlling interests - - - - - (580) - (12,981) (13,561)

Issuance of perpetual securities, net of transaction costs ------591,516 - 591,516

Perpetual securities - distribution paid ------(15,501) - (15,501) - distribution accrued - - - - - (21,061) 21,061 - -

Tax credit arising from perpetual securities - - - - - 3,580 - - 3,580

As at 31 March 2013 3,094,307 6,088 44,858 (41,582) (9,753) 4,414,828 597,076 238,082 8,343,904

The accompanying notes form an integral part of these financial statements. 92 Statement of Changes in Equity – The Company For the financial year ended 31 March 2014

Share Share compensation Retained Total Note capital reserve earnings equity $’000 $’000 $’000 $’000 As at 1 April 2013 3,094,307 6,088 1,345,460 4,445,855

Total comprehensive income for the financial year - - 522,646 522,646

Share-based expenses - 2,564 - 2,564

Reclassification of share-based compensation plan from equity-settled to cash-settled - (8,652) (1,720) (10,372)

Dividend relating to 2013 paid 31 - - (100,000) (100,000)

As at 31 March 2014 3,094,307 - 1,766,386 4,860,693

As at 1 April 2012 3,094,307 9,007 976,041 4,079,355

Total comprehensive income for the financial year - - 461,041 461,041

Share-based expenses - 3,514 - 3,514

Reclassification of share-based compensation plan from equity-settled to cash-settled - (6,433) (51,622) (58,055)

Dividend relating to 2012 paid 31 - - (40,000) (40,000)

As at 31 March 2013 3,094,307 6,088 1,345,460 4,445,855

The accompanying notes form an integral part of these financial statements. 93 Consolidated Cash Flow Statement For the financial year ended 31 March 2014

Note 2014 2013 $’000 $’000 Cash flows from operating activities Profit for the financial year 875,417 939,856 Adjustments for: - Income tax expense 66,356 84,172 - Share-based expenses 2,564 3,514 - Amortisation of intangible assets 1,242 1,055 - Depreciation of property, plant and equipment 3,911 3,705 - Property, plant and equipment written off - 480 - Corporate restructuring surplus on disposal of: - investment properties - (43,066) - subsidiaries (14,678) (114,892) - Financing cost 45,126 103,324 - Interest income (2,959) (3,037) - Revaluation gain on investment properties and properties under development (212,851) (152,493) - Share of profit of associated companies and joint ventures (491,567) (442,063) - Exchange differences 25,816 76,109 Operating cash flow before working capital changes 298,377 456,664

Change in operating assets and liabilities - Trade and other receivables 36,549 (44,185) - Other current assets (8,338) 11,657 - Trade and other payables 188,718 156,995 Cash generated from operations 515,306 581,131 Income tax paid (76,436) (105,960) Net cash generated from operating activities 438,870 475,171

The accompanying notes form an integral part of these financial statements. 94 Consolidated Cash Flow Statement For the financial year ended 31 March 2014

Note 2014 2013 $’000 $’000 Cash flows from investing activities Loan to a non-related party (13,509) - Purchases of financial assets, available-for-sale (1,250) (6,542) Payments for investment in associated companies (202,599) (1,075,054) Payments for investment in joint ventures (7,556) (13,551) Payments for leasehold investment properties (13,002) (26,735) Payments for properties under development (1,133,175) (320,004) Payments for property, plant and equipment (1,810) (4,524) Purchases of intangible assets (1,677) (1,444) Dividend received from associated companies 357,564 178,981 Capital return from associated companies and joint ventures 123,655 18,820 Interest received 3,019 3,037 Proceeds from disposal of investment properties - 702,296 Proceeds from disposal of property, plant and equipment - 106 Repayment of loan from an associated company 5,465 - Acquisition of subsidiaries, net of cash acquired 8 (43,446) - Disposal of subsidiaries, net of cash disposed off 8 (19,143) 1,349,388 Additional cash consideration received for disposal of a subsidiary 8 1,031 - Net cash (used in)/generated from investing activities (946,433) 804,774

Cash flows from financing activities Repayment of bank loans (395,325) (1,272,581) Repayment of medium term notes (350,000) - Proceeds from bank loans - 268,862 Net proceeds from issuance of perpetual securities - 591,516 Capital contributions from non-controlling interests - 7,057 Series A redeemable preference shares dividends paid (15,700) (15,700) Ordinary shares dividend paid (84,300) (24,300) Perpetual securities distribution paid (30,750) (15,501) Interest paid on bank borrowings and derivative hedging instruments (25,910) (71,308) Interest paid on medium term notes (21,799) (31,680) Financing fees (171) (336) Acquisition of interests in subsidiaries from non-controlling interests - (13,561) Dividend paid to non-controlling interests (7,995) (7,800) Net cash used in financing activities (931,950) (585,332)

Net (decrease)/increase in cash and cash equivalents held (1,439,513) 694,613 Cash and cash equivalents at beginning of financial year 8 1,742,815 1,048,202 Cash and cash equivalents at end of financial year 8 303,302 1,742,815

Significant non-cash transactions Management fee income of $30,757,000 (2013: $11,887,000) and dividends of $47,011,000 (2013: $11,853,000) were received by the Group in the form of units in associated companies.

The accompanying notes form an integral part of these financial statements. 95 Notes to the Financial Statements For the financial year ended 31 March 2014

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General information

Mapletree Investments Pte Ltd (the “Company”) is incorporated and domiciled in Singapore. The address of its registered office is as follows: 10 Pasir Panjang Road, #13-01 Mapletree Business City, Singapore 117438.

The principal activities of the Company are those relating to investment holding, provision of marketing consultancy and provision of asset and fund management, property development, marketing and lease administration, administrative and support services to related companies.

The principal activities of its subsidiaries are set out in Note 36 of the financial statements.

2. Significant accounting policies

2.1 Basis of preparation These financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2.26.

Interpretations and amendments to published standards effective in 2013 On 1 April 2013, the Group adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The adoption of these new and amended FRS and INT FRS did not result in substantial changes to the accounting policies of the Group and had no material effect on the amounts reported for the current or prior financial years except for the following:

Amendment to FRS 1 Presentation of Items of Other Comprehensive Income The Group adopted the amendment to FRS 1 Presentation of Items of Other Comprehensive Income on 1 April 2013. The amendment is applicable for annual periods beginning on or after 1 July 2012 (with early adoption permitted). It requires items presented in other comprehensive income to be separated into two groups, based on whether or not they may be recycled to profit or loss in the future.

FRS 113 Fair Value Measurement FRS 113 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across FRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within FRSs.

The adoption of FRS 113 does not have any material impact on the accounting policies of the Group. The Group has incorporated the additional disclosures required by FRS 113 into the financial statements. 96 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.2 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the rendering of services, net of goods and services tax, rebates and discounts, and after eliminating sales within the Group.

(a) Rental income Rental income from operating leases, adjusted for rent free incentives and service charges from the leasehold investment properties, are recognised on a straight-line basis over the lease term.

(b) Rendering of services Service income from the provision of property development, fund and asset management, marketing and lease administration, administrative and support services is recognised when services are rendered.

Car parking fees are recognised on utilisation of the Group’s car parking facilities by tenants and visitors.

(d) Dividend income Dividend income is recognised when the right to receive payment is established.

2.3 Group accounting (a) Subsidiaries (i) Consolidation Subsidiaries are entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanying a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and balance sheet. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.

(ii) Acquisitions The acquisition method of accounting is used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 97

2. Significant accounting policies (continued)

2.3 Group accounting (continued) (a) Subsidiaries (continued) (ii) Acquisitions (continued) On an acquisition-by acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition- date fair value of any previous equity interest in the acquiree over (ii) the fair value of the net identifiable assets acquired is recorded as “goodwill”. Please refer to the paragraph “Intangible assets – Goodwill” for the subsequent accounting policy on goodwill.

(iii) Disposals When a change in the Group’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific standard.

Any retained interest in the entity is re-measured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in profit or loss.

Please refer to the paragraph “Investments in subsidiaries, joint ventures and associated companies” for the Group’s accounting policy on investments in subsidiaries in the separate financial statements of the Company.

(b) Transactions with non-controlling interests Changes in the Group’s ownership in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with equity owners of the Group. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised within equity attributable to the equity holder of the Company.

(c) Joint ventures The Group’s joint ventures are entities over which the Group has contractual arrangements to jointly share control over the economic activity of the entities with one or more parties. The Group’s interest in joint ventures is accounted for in the consolidated financial statements using the equity method of accounting.

Investments in joint ventures are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets purchased, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

In applying the equity method of accounting, the Group’s share of its joint ventures’ post-acquisition profits or losses are recognised in profit or loss and its share of post-acquisition other comprehensive income recognised in other comprehensive income. These post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the joint venture.

Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of joint ventures have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.

Gains and losses arising from partial disposals or dilutions in investments in joint ventures are recognised in profit or loss.

Please refer to the paragraph “Investments in subsidiaries, joint ventures and associated companies” for accounting policy on investments in joint ventures in the separate financial statements of the Company. 98 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.3 Group accounting (continued) (d) Associated companies Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any.

Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets purchased, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies represents the excess of the cost of acquisition of the associate over the Group’s share of the fair value of the identifiable net assets of the associate and is included in the carrying amount of the investments.

In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition profits or losses are recognised in profit or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non- current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associated company.

Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group's interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of associated companies have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.

Investments in associated companies are derecognised when the Group loses significant influence. Any retained equity interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained interest at the date when significant influence is lost and its fair value is recognised in profit or loss.

Gains and losses arising from partial disposals or dilutions in investments in associated companies in which significant influence is retained are recognised in profit or loss.

Please refer to the paragraph “Investments in subsidiaries, joint ventures and associated companies” for the Group’s accounting policy on investments in associated companies in the separate financial statements of the Company.

2.4 Property, plant and equipment (a) Measurement Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. The cost of property, plant and equipment includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

(b) Depreciation Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives.

Useful lives Plant, machinery and equipment 3 - 15 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise.

Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 99

2. Significant accounting policies (continued)

2.4 Property, plant and equipment (continued) (c) Subsequent expenditure Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other subsequent expenditure is recognised in profit or loss when incurred.

(d) Disposal On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss.

2.5 Intangible assets (a) Goodwill on acquisitions Goodwill on acquisitions of subsidiaries on or after 1 January 2010 represents the excess of (i) the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over (ii) the fair value of the net identifiable assets acquired.

Goodwill on acquisition of subsidiaries prior to 1 January 2010 and on acquisition of joint ventures and associated companies represents the excess of the cost of the acquisition over the fair value of the Group’s share of the net identifiable assets acquired.

Goodwill on subsidiaries and joint ventures is recognised separately as intangible assets and carried at cost less accumulated impairment losses. Goodwill on associated companies is included in the carrying amount of the investments.

Gains and losses on the disposal of subsidiaries, joint ventures and associated companies include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained earnings in the year of acquisition and is not recognised in profit or loss on disposal.

(b) Acquired computer software licenses Acquired computer software licences are initially capitalised at cost which includes the purchase price (net of any discounts and rebates) and other directly attributable cost of preparing the asset for its intended use. Direct expenditure, which enhances or extends the performance of computer software beyond its specifications and which can be reliably measured, is added to the original cost of the software. Costs associated with maintaining the computer software are recognised as an expense when incurred.

Computer software licences are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight-line method over their estimated useful lives of three to ten years.

The amortisation period and amortisation method of intangible assets other than goodwill are reviewed at least at each balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise.

2.6 Borrowing costs Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that are directly attributable to the acquisition, construction or development of properties and assets under construction. This includes those costs on borrowings acquired specifically for the construction or development of properties and assets under construction, as well as those in relation to general borrowings used to finance the construction or development of properties and assets under construction. 100 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.7 Investment properties and properties under development Investment properties (including those completed, under redevelopment or under development) for the Group are held for long-term rental yields and/or for capital appreciation and are not occupied substantially by the Group.

Investment properties are initially recognised at cost and subsequently carried at fair value, determined annually by independent valuers on the highest-and-best-use basis. Changes in fair values are recognised in profit or loss.

Where the fair value of the investment property under development cannot be reliably measured, the property is measured at cost until the earlier of the date of construction is completed and the date at which fair value becomes reliably measurable.

Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised.

If an investment property becomes substantially owner-occupied, it is reclassified as property, plant and equipment and its fair value at the date of reclassification becomes its cost for accounting purposes.

On disposal of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.

2.8 Investments in subsidiaries, joint ventures and associated companies Investments in subsidiaries, joint ventures and associated companies are carried at cost less accumulated impairment losses in the Company’s balance sheet.

On disposal of investments in subsidiaries, joint ventures and associated companies, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

2.9 Impairment of non-financial assets (a) Goodwill Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units (“CGU”) expected to benefit from synergies arising from the business combination.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.

An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.

(b) Intangible assets Property, plant and equipment Investments in subsidiaries, joint ventures and associated companies Intangible assets, property, plant and equipment and investments in subsidiaries, joint ventures and associated companies are reviewed for impairment whenever there is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the CGU to which the asset belongs. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 101

2. Significant accounting policies (continued)

2.9 Impairment of non-financial assets (continued) (b) Intangible assets Property, plant and equipment Investments in subsidiaries, joint ventures and associated companies (continued) If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit and loss unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.

An impairment loss for an asset other than goodwill 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. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised in profit or loss, a reversal of that impairment is also recognised in profit or loss.

2.10 Financial assets (a) Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables and available-for-sale. The classification depends on the nature of the asset and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i) Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Financial assets designated as fair value through profit or loss at inception are those that are managed and their performances are evaluated on a fair value basis. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are presented as cash and cash equivalents, trade and other receivables, other current assets and loan to joint venture on the balance sheet.

(iii) Financial assets, available-for-sale Financial assets, available-for-sale are non-derivatives that are either designated in this category or not classified in any of the other categories. They are presented as non-current assets unless management intends to dispose of the assets within 12 months after the balance sheet date.

(b) Recognition and derecognition Regular way purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a financial asset, the difference between the carrying amount and the sale proceeds is recognised in profit or loss. Any amount in the fair value reserve relating to that asset is transferred to profit or loss. 102 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.10 Financial assets (continued) (c) Initial measurement Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately as expenses.

(d) Subsequent measurement Financial assets, both available-for-sale and at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Changes in the fair values of financial assets at fair value through profit or loss including the effects of currency translation, interest and dividends, are recognised in profit or loss when the changes arise.

Interest and dividend income on financial assets, available-for-sale are recognised separately in profit or loss. Changes in the fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in other comprehensive income and accumulated in the fair value reserve, together with the related currency translation differences.

(e) Impairment The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

(i) Loans and receivables Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidences that these financial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in profit or loss.

The impairment allowance is reduced through profit or loss in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods.

(ii) Financial assets, available-for-sale A significant or prolonged decline in the fair value of an equity security below its cost and the disappearance of an active trading market for the security is an objective evidence that the available-for-sale financial asset is impaired.

If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve is transferred to profit or loss. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised as an expense. The impairment losses recognised as an expense on equity securities are not reversed through profit or loss.

2.11 Financial guarantees The Company has issued corporate guarantees to banks for borrowings of its subsidiaries, where the Company is required to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings. Such contracts are classified as financial liabilities or as insurance contracts. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 103

2. Significant accounting policies (continued)

2.11 Financial guarantees (continued) (a) Financial guarantees classified as financial liabilities Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s balance sheet.

Financial guarantees are subsequently amortised to profit or loss over the period of the subsidiaries’ borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantees shall be carried at the expected amount payable to the bank in the Company’s balance sheet.

When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantees is transferred to the profit or loss.

(b) Financial guarantees classified as insurance contracts These financial guarantees are accounted for as insurance contracts. Provision is recognised based on the Company’s estimate of the ultimate cost of settling all claims incurred but unpaid at the end of the reporting period. The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.

Intragroup transactions are eliminated on consolidation.

2.12 Borrowings Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings which are due to be settled within 12 months after the balance sheet date are presented as current borrowings even though the original term was for a period longer than 12 months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the financial statements are authorised for issue. Other borrowings due to be settled more than 12 months after the balance sheet date are presented as non-current borrowings in the balance sheet.

2.13 Trade and other payables Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

2.14 Fair value estimation The fair values of financial instruments traded in active markets are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices.

The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flows analyses, are also used to determine the fair values of the financial instruments.

The fair values of currency forwards are determined using actively quoted forward exchange rates. The fair values of interest rate swaps are calculated as the present value of the estimated future cash flows discounted at actively quoted interest rates.

The fair values of financial liabilities carried at amortised cost are estimated by discounting the future contractual cash flows at the current market interest rates that are available to the Group for similar financial liabilities.

The fair values of the current financial assets and liabilities carried at amortised cost approximate their carrying amounts. 104 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.15 Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

2.16 Leases (a) When the Group is the lessee:

Operating leases Leases where substantially all the risks and rewards incidental to ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the financial year in which termination takes place.

(b) When the Group is the lessor:

Operating leases Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Rental income from operating leases (net of any incentives given to lessees) is recognised in profit or loss on a straight-line basis over the lease term.

Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basis as the lease income.

2.17 Income taxes Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, associated companies and joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities, except for investment properties. Investment property measured at fair value is presumed to be recovered entirely through sale.

Current and deferred income taxes are recognised as income or expenses in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 105

2. Significant accounting policies (continued)

2.18 Employee compensation (a) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Group’s contributions are recognised as employee compensation expense when they are due.

(b) Employee leave entitlements Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

(c) Share-based compensation The Company operates the following share-based compensation plans: Mapletree Share Appreciation Rights Plan (“MSA Plan”), Mapletree Performance Share Units Plan (“Mapletree PSU Plan”), Mapletree Restricted Share Units Plan (“Mapletree RSU Plan”) and Mapletree NED Restricted Share Units Plan (“Mapletree NED RSU Plan”).

Equity-settled share-based compensation is measured at fair value at the date of grant, whereas cash-settled share-based compensation is measured at current fair value at each balance sheet date. In estimating the fair value of the compensation cost at grant date, market-based performance conditions are taken into account. The compensation cost is charged to profit or loss on a basis that fairly reflects the manner in which the benefits will accrue to the employees under the respective plans over the vesting period.

For equity-settled share-based compensation, any change in fair value of the compensation cost at each balance sheet date, arising from a change in the estimate of the number of rights/units that are expected to become exercisable on the vesting date, is recognised in profit or loss, with a corresponding adjustment to the share compensation reserve over the remaining vesting period. For cash-settled share-based compensation, any change in fair value of the compensation cost, arising from the re-measurement of liability at each balance sheet date, is recognised in profit or loss, with a corresponding adjustment to the liability over the remaining vesting period.

When an equity-settled share-based compensation award is modified to become a cash-settled award, this is accounted for as a repurchase of an equity interest. Any excess over the fair value at the date of the grant is treated as a deduction from equity, provided the deduction is not greater than the fair value of the equity instruments when measured at the modification date. Until the liability is settled, it is re-measured at each reporting date with changes in fair value recognised in profit or loss.

The performance condition for the MSA Plan was achieved as of 31 March 2013 and the MSA Rights will be cash-settled. At each reporting date, the Company revises its estimates of the number of MSA Rights that are expected to be cash-settled and recognises the impact of the revision of the estimate in profit or loss, with a corresponding adjustment to liability.

The compensation cost for the Mapletree PSU Plan and Mapletree RSU Plan is measured based on the latest estimate of the number of units that will be awarded based on non-market vesting conditions at each balance sheet date. Any increase or decrease in compensation cost over the previous estimate is recognised in profit or loss, with a corresponding adjustment to share compensation reserve or liability for equity-settled units and cash-settled units respectively.

The compensation cost for the Mapletree NED RSU Plan is based on the number of units awarded at the date of grant. Any increase or decrease in compensation cost over the previous estimate is recognised in profit or loss, with a corresponding adjustment to share compensation reserve or liability for equity-settled units and cash-settled units respectively.

Where the terms of the share-based compensation plans are modified, the expense that is not yet recognised for the award is recognised over the remaining vesting period as if the terms had not been modified. Additional expense is recognised for any increase in the total fair value of the rights/units due to the modification, as measured at the date of the modification. 106 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.19 Currency translation (a) Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollars, which is the functional currency of the Company.

(b) Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in profit or loss. However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment in foreign operations, are recognised in other comprehensive income and accumulated in the currency translation reserve.

When a foreign operation is disposed of or any loan forming part of the net investment of the foreign operation is repaid, a proportionate share of the accumulated currency translation differences is reclassified to profit or loss, as part of the gain or loss on disposal.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

(c) Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the reporting date.

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve.

2.20 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Management Committee whose members are responsible for allocating resources and assessing performance of the operating segments.

2.21 Cash and cash equivalents For the purpose of presentation in the consolidated cash flow statement, cash and cash equivalents include cash on hand, deposits with financial institutions and bank overdrafts. Bank overdrafts are presented as current borrowings on the balance sheet.

2.22 Share capital and perpetual securities Ordinary shares, perpetual securities and redeemable preference shares are classified as equity when there is no contractual obligation to deliver cash or other financial assets to another person or entity or to exchange financial assets or liabilities with another person or entities that are potentially unfavourable to the issuer.

Incremental costs directly attributable to the issue of new ordinary or redeemable preference shares or perpetual securities are shown in equity as a deduction, net of tax, from proceeds. The proceeds received net of any directly attributable transactions costs are credited to share capital or perpetual securities. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 107

2. Significant accounting policies (continued)

2.23 Dividends Dividends to the Company’s shareholder are recognised when the dividends are approved for payment.

2.24 Derivative financial instruments and hedging activities The Group holds derivative financial instruments such as interest rate swaps and currency forwards to hedge its interest rate and foreign currency risk exposures.

A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates each hedge as either: (a) fair value hedge; or (b) cash flow hedge.

Fair value changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise.

The Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategies for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items.

The carrying amount of a derivative designated as a hedge is presented as a non-current asset or liability if the remaining expected life of the hedged item is more than 12 months and as a current asset or liability if the remaining expected life of the hedged item is less than 12 months.

(a) Fair value hedge The fair value changes on the effective portion of derivative hedging instrument designated as a fair value hedge are recognised in profit or loss within the same line item as the fair value changes from the hedged item. The fair value changes of the ineffective portion of derivative hedging instruments are recognised separately in profit or loss.

(b) Cash flow hedge Interest rate swaps The Group has entered into interest rate swaps that are cash flow hedges for the Group’s exposure to interest rate risk on its borrowings. These contracts entitle the Group to receive interest at floating rates on notional principal amounts and oblige the Group to pay interest at fixed rates on the same notional principal amounts, thus allowing the Group to raise borrowings at floating rates and swap them into fixed rates.

The fair value changes on the effective portion of interest rate swaps designated as cash flow hedges are recognised in other comprehensive income, accumulated in the fair value reserve and reclassified to profit or loss when the hedged interest expense on the borrowings is recognised in profit or loss. The fair value changes on the ineffective portion of interest rate swaps are recognised immediately in profit or loss.

(c) Net investment hedge The Group has derivative financial instruments/borrowings that qualify as net investment hedges of foreign operations. These hedging instruments are accounted for similarly to cash flow hedges. The currency translation differences on the hedging instruments relating to the effective portion of the hedge are recognised in other comprehensive income in the consolidated financial statements, accumulated in the foreign currency translation reserve and reclassified to profit or loss as part of the gain or loss on disposal of the foreign operation. The currency translation differences relating to the ineffective portion of the hedge are recognised immediately in profit or loss.

(d) Derivatives that are not designated or do not qualify for hedge accounting Fair value changes on these derivatives are recognised in profit or loss when the changes arise. 108 Notes to the Financial Statements For the financial year ended 31 March 2014

2. Significant accounting policies (continued)

2.25 Government grants Grants from the government are recognised as receivables at their fair value where there is a reasonable assurance that the grants will be received and the Group will comply with all attached conditions.

Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income.

Government grants relating to assets are deducted against the carrying amount of the assets.

2.26 Critical accounting estimates, assumptions and judgements (a) Fair value of investment properties and properties under development Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Investment properties and properties under development are stated at fair value based on valuation performed by independent professional valuers. The fair values are based on highest-and-best-use basis.

The valuers have considered valuation techniques including the direct comparison method, capitalisation approach, residual method, and/or discounted cash flows, where appropriate.

The fair value of investment properties and properties under development amounts to approximately $4.7 billion (2013: $4.3 billion) and $1.4 billion (2013: $0.5 billion) respectively.

(b) Impairment of financial assets, available-for-sale Management reviews its financial assets for objective evidence of impairment annually. Significant or prolonged declines in the fair value of the security below its cost and the disappearance of an active trading market for the security are considered objective evidence that a financial asset is impaired. In determining this, management evaluates, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost, the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

If the assumptions in relation to the health of and the near-term business outlook of the issuer do not hold, this will impact the fair value determined in the current financial year and a material impairment adjustment will be made. The fair value recognised in the reserve amounts to approximately $39 million (2013: $45 million).

3. Revenue

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Rental income from investment properties 261,788 376,709 - - Service income - Third parties 52,864 59,889 - - - Subsidiaries - - 123,262 98,948 Fees from management services 202,910 188,060 - - Car parking fees 12,422 16,444 - - Dividend income from third parties 4,383 3,638 - - Dividend income from subsidiaries - - 502,881 456,800 Interest income from loan to an unrelated party 182 - - - Other operating income 14,051 41,579 171 200 548,600 686,319 626,314 555,948 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 109

4. Other gains - net

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Revaluation gain on investment properties and properties under development 212,851 152,493 - - Corporate restructuring surplus on disposal of - investment properties - 43,066 - - - subsidiaries (Note 8) 14,678 114,892 - - Currency exchange gain/(loss) - net 3,580 (7,879) - - Changes in fair value of derivative financial instruments (4,277) 549 - - Cash flow hedges, reclassified from hedging reserve (4,328) (8,719) - - Interest income - subsidiaries - - 3,095 10,637 - short-term bank deposits 2,748 2,291 - - - others 211 746 - - 2,959 3,037 3,095 10,637 Amortisation of financial guarantee contracts - - 9,689 12,983 Others 701 317 - - 226,164 297,756 12,784 23,620

5. Employee compensation

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Wages and salaries 143,549 151,662 79,400 86,342 Employer’s contribution to defined contribution plans including Central Provident Fund (“CPF”) 9,521 9,807 7,077 6,214 Share-based expenses - equity-settled 2,564 3,514 2,564 2,474 - cash-settled 15,878 11,444 15,878 6,424 171,512 176,427 104,919 101,454

Employee headcount was 1,211 (2013: 1,368) as at the financial year end. 110 Notes to the Financial Statements For the financial year ended 31 March 2014

6. Finance cost - net

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Financing fees 171 336 - - Interest expense - bank borrowings 19,284 60,592 - - - derivative hedging instruments - interest expense 4,120 25,794 - - - interest income (248) (15,078) - - 3,872 10,716 - - - medium term notes 21,799 31,680 - - 45,126 103,324 - -

7. Income tax expense/(credit)

(a) Income tax expense/(credit)

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Tax expense/(credit) attributable to profit is made up of:

Current income tax - Singapore 52,652 53,114 (8,305) (1,592) - Foreign 7,482 14,590 3 - 60,134 67,704 (8,302) (1,592) Deferred income tax 14,957 19,542 (1,728) 1,089 75,091 87,246 (10,030) (503) (Over)/under provision in preceding financial years - Current income tax (1,978) 5,259 - - - Deferred income tax (6,757) (8,333) 1,905 - 66,356 84,172 (8,125) (503) Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 111

7. Income tax expense/(credit) (continued)

(a) Income tax expense/(credit) (continued)

The tax expense/(credit) on profit differs from the amount that would arise using the Singapore standard rate of income tax due to the following:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Profit before income tax 941,773 1,024,028 514,521 460,538

Tax calculated at a tax rate of 17% (2013: 17%) 160,101 174,085 87,469 78,291 Effects of: - Singapore statutory stepped income exemption (1,325) (1,379) (56) (36) - Revaluation gain on investment properties not subject to tax (31,219) (17,482) - - - Income not subject to tax (2,989) (30,716) (97,918) (79,489) - Expenses not deductible for tax purposes 3,545 2,098 475 731 - Unrecognised tax benefits 1,767 2,014 - - - Tax losses not allowed for carry forward 321 415 - - - Tax calculated on share of profit of associated companies and joint ventures (59,789) (51,214) - - - Different tax rates in other countries 5,571 9,584 - - - Others (892) (159) - - Tax charge/(credit) 75,091 87,246 (10,030) (503)

(b) Tax charge of $936,000 (2013: tax credit of $1,089,000) relating to fair value changes and reclassification adjustments on cash flow hedges has been included in other comprehensive income.

(c) Tax credit of $5,228,000 (2013: $3,580,000) relating to perpetual securities distribution accrued has been recognised directly in equity. 112 Notes to the Financial Statements For the financial year ended 31 March 2014

8. Cash and cash equivalents

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Cash at bank and on hand 185,984 188,255 3,443 12,114 Short-term bank deposits 117,318 1,554,560 - - 303,302 1,742,815 3,443 12,114

Short-term bank deposits of the Group at the balance sheet date had an average maturity of 32 days (2013: 22 days) from the end of the financial year. The effective interest rates at balance sheet date ranged from 0.14% to 4.90% (2013: 0.06% to 5.90%) per annum and the interest rates are re-priced upon maturity.

(i) Acquisition of subsidiaries On 26 April 2013, the Group acquired 100% of equity interest in Nguyen Vu Investment Joint Stock Company (“NIJSC”). The principal activity of NIJSC is that of property owner.

2014 $’000 (a) Purchase consideration Cash paid 45,784

Considerations transferred for the businesses 45,784

(b) Effects on cash flows of the Group Cash paid (as above) 45,784 Less: Cash and cash equivalents in subsidiary acquired (2,338)

Cash outflow from acquisition 43,446

(c) Identified assets acquired and liabilities assumed, at cost Cash and cash equivalents 2,338 Trade and other receivables 962 Other assets 4,634 Investment properties 64,638 Property, plant and equipment 68 Total assets 72,640

Less: Trade and other payables (4,660) Borrowings (13,165) Current income tax liabilities (820) Deferred income tax liabilities (8,211) Total liabilities (26,856)

Total identifiable net assets purchased 45,784 (d) Revenue and profit contribution The acquired business of NIJSC contributed revenue of $10,133,000 and net profit of $5,533,000 to the Group from 26 April 2013 to 31 March 2014. Had the above business been consolidated from 1 April 2013, consolidated revenue and net profit for the year ended 31 March 2014 would have been $549,294,000 and $875,796,000 respectively. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 113

8. Cash and cash equivalents (continued)

(ii) Corporate restructuring surplus and disposal of subsidiaries In August 2013, the Group completed the disposal of its 100% equity interest in subsidiary, MH Assets Limited (“MHAL”) and an 80% equity interest in subsidiary, Stable Growth Investment Limited (“SGIL”) to an associate, Mapletree China Opportunity Fund II Pte. Ltd. (“MCOF II”). MCOF II is an associate in which the Group has an effective interest of 36.07% as at 31 March 2014. The Group retains a 20% direct equity interest in SGIL as at 31 March 2014.

The disposed subsidiaries contributed loss before tax of $3,554,000 for the financial year ended 31 March 2013 and $745,000 for the financial period from 1 April 2013 to the respective dates of disposal. These subsidiaries did not contribute revenue for the financial year ended 31 March 2013 and for the financial period from 1 April 2013 to the respective dates of disposal.

During the financial year, the Group received additional sale consideration of S$1,031,000 arising from completion adjustment for its disposal of Claymore Limited (“Claymore”) to Mapletree Greater China Commercial Trust (“MGCCT”), as part of the initial public offering (“IPO”) of units in MGCCT on the mainboard of the Singapore Exchange Securities Trading Limited (“SGX-ST”) in Singapore on 7 March 2013.

The net impact on the income statement arising from corporate restructuring are as follows:

2014 $’000 Surplus on disposal of MHAL and SGIL 13,647 Additional sale consideration received for disposal of Claymore 1,031

14,678

The cash flows and the net assets of subsidiaries disposed are provided below:

2014 MHAL SGIL Total $’000 $’000 $’000 Cash and cash equivalents - 33,911 33,911 Trade and other receivables 1 34 35 Investments in associated companies 142,124 - 142,124 Properties under development - 28,118 28,118 Property, plant and equipment - 46 46 Total assets 142,125 62,109 204,234

Trade and other payables (145,489) (66,612) (212,101) Total liabilities (145,489) (66,612) (212,101)

Net liabilities disposed (3,364) (4,503) (7,867)

Equity interest retained as associates 6,074 2,914 8,988 Corporate restructuring surplus 8,343 5,304 13,647 Cash and cash equivalents disposed - (33,911) (33,911)

Cash inflow/(outflow) from disposal of subsidiaries 11,053 (30,196) (19,143) 114 Notes to the Financial Statements For the financial year ended 31 March 2014

8. Cash and cash equivalents (continued)

(ii) Corporate restructuring surplus and disposal of subsidiaries (continued) During the previous financial year, the Group completed the following: (a) the IPO of MGCCT, in which the Group subscribed for a 32% effective stake in MGCCT for a consideration of $792,125,000 and also disposed its 100% equity interest in a subsidiary, Claymore to MGCCT for a sale consideration of $172,785,000. The Group recorded corporate restructuring surplus of $112,776,000 on this divestment.

(b) the disposal of its 100% equity interest in a subsidiary, Mapletree WND (Wuxi) (HKSAR) Limited (“Wuxi”) to Mapletree Logistics Trust for net proceeds of $4,903,000 and recorded corporate restructuring surplus of $2,116,000.

The disposed subsidiaries contributed revenue of $107,461,000 and profit before tax of $64,314,000 for the financial year ended 31 March 2012 and revenue of $161,876,000 and profit before tax of $87,120,000 for the financial period from 1 April 2012 to the respective dates of disposal.

The net impact on the income statement arising from the corporate restructuring are as follows:

Note 2013 $’000 Surplus on disposal of subsidiaries 4 114,892 Share of MGCCT’s listing expenses 36 (15,013) 99,879

The cash flow and the net assets of subsidiaries disposed are provided below:

2013 Claymore Wuxi Total $’000 $’000 $’000 Cash and cash equivalents 67,878 3,592 71,470 Trade and other receivables 10,062 21 10,083 Investment properties 3,140,760 20,627 3,161,387 Property, plant and equipment 883 - 883 Total assets 3,219,583 24,240 3,243,823

Trade and other payables (101,249) (22,414) (123,663) Borrowings (1,855,004) - (1,855,004) Deferred tax liabilities (13,222) (480) (13,702) Total liabilities (1,969,475) (22,894) (1,992,369)

Net assets disposed 1,250,108 1,346 1,251,454

Equity interest retained as associates 53,071 1,441 54,512 Corporate restructuring surplus 112,776 2,116 114,892 Cash and cash equivalents disposed (67,878) (3,592) (71,470)

Cash inflow from disposal of subsidiaries 1,348,077 1,311 1,349,388 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 115

9. Trade and other receivables

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Current Trade receivables: - subsidiaries - - 8,370 8,709 - associated companies 38,628 80,011 - - - non-related parties 41,145 58,351 - 45 79,773 138,362 8,370 8,754 Less: Allowance for impairment of non-related parties receivables - (316) - - Trade receivables – net 79,773 138,046 8,370 8,754

Deposits placed with a subsidiary - - 170,996 876,084 Interest receivable: - subsidiaries - - 259 1,470 - non-related parties 225 285 - - 225 285 259 1,470

Dividend receivable 807 - 506,205 479,112 Net Goods and Service Tax receivable 9,305 12,970 294 237 Non-trade receivables due from subsidiaries - - 395,991 345,312 Sundry debtors 40,877 15,366 - - Staff loans and advances 6 8 - - 50,995 28,344 902,490 824,661 130,993 166,675 1,082,115 1,710,969 Non-current Loan to an associated company 35,035 40,500 - - Loan to a non-related party 13,509 - - - Loans to subsidiaries - - 1,944,149 914,176 48,544 40,500 1,944,149 914,176 179,537 207,175 3,026,264 2,625,145

(a) Deposits placed with a subsidiary mature within six months (2013: six months) from the end of the financial year. The effective interest rates on the deposits at balance sheet date ranged from 0.31% to 0.40% (2013: 0.31% to 0.40%) per annum. The interest rates are re-priced upon maturity.

(b) Non-trade receivables from subsidiaries are unsecured, interest-free and repayable on demand.

(c) The loan to an associated company is unsecured and has no fixed terms of repayment, although repayment is not expected within the next twelve months. The effective interest rate on the loan at balance sheet date is 2.26% (2013: 1.53%) per annum.

(d) The loan to a non-related party is secured, bears interest at 7% per annum plus a variable component based on the gross profit of the borrower and is repayable in full in January 2020.

(e) The loans to subsidiaries are unsecured and interest-free. The loans to subsidiaries have no fixed terms of repayment, although repayments are not expected within the next twelve months. In the previous financial year, loans to subsidiaries of $122,052,000 bore fixed interest which ranged from 2.50% to 3.62% per annum. The interest-bearing loans from subsidiaries have been repaid in the current financial year. 116 Notes to the Financial Statements For the financial year ended 31 March 2014

10. Other assets

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Current Deposits 5,434 2,746 574 457 Prepayments 8,137 2,360 826 679 13,571 5,106 1,400 1,136 Non-current Deposits 3,129 - - - Prepayments 1,378 - - - 4,507 - - - 18,078 5,106 1,400 1,136

11. Financial assets, available-for-sale

The Group 2014 2013 $’000 $’000 Beginning of financial year 141,313 113,683 Additions 1,250 6,542 Fair value (losses)/gains recognised in statement of comprehensive income (5,368) 21,088 End of financial year 137,195 141,313

Quoted equity securities – Singapore and Hong Kong SAR 63,584 68,820 Unquoted equity securities 73,611 72,493 137,195 141,313 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 117

12. Investments in associated companies

The Group 2014 2013 $’000 $’000 Quoted units in Real Estate Investment Trusts (“REITs”), at cost 2,825,509 2,747,741 Unquoted equity and preference shares, at cost 438,165 473,485 3,263,674 3,221,226 Loans to associated companies 35,796 140,310 Share of post acquisition reserves 651,917 470,968 3,951,387 3,832,504

The loans to associated companies are unsecured, interest-free and have no fixed terms of repayment, although repayment is not expected within the next twelve months.

The summarised financial information of associated companies, not adjusted for proportionate ownership interest held by the Group, are as follows:

The Group 2014 2013 $’000 $’000 Assets 20,577,374 18,983,987 Liabilities 8,897,226 8,188,310 Revenue 1,286,725 1,033,666 Net profit 1,329,821 902,543

Market value of investment in quoted units in REITs 3,452,570 3,855,010

Investments in associated companies at 31 March 2014 include goodwill of $19,002,000 (2013: $14,088,000).

Details of associated companies are provided in Note 36.

13. Investments in joint ventures

The Group 2014 2013 $’000 $’000

Unquoted equity shares, at cost 54,587 47,269 Loan to a joint venture 22,214 21,976 Share of post acquisition reserves (5,866) (5,925) 70,935 63,320

The loan to a joint venture is unsecured, bears interest ranging from 2.19% to 2.57% (2013: 2.23% to 2.57%) per annum and is repayable in full in April 2016 (2013: May 2013). 118 Notes to the Financial Statements For the financial year ended 31 March 2014

13. Investments in joint ventures (continued)

The summarised financial information of the joint ventures, adjusted for proportionate interest held by the Group, are as follows:

The Group 2014 2013 $’000 $’000 Assets - Current assets 2,715 1,244 - Non-current assets 151,670 163,645 166,360 152,914 Liabilities - Current liabilities 15,499 9,624 - Non-current liabilities 101,946 102,140 111,570 117,639

Net assets 48,721 41,344

Revenue 5,639 2,911 Expenses (6,278) (12,296) Revaluation gain on investment properties and properties under development 2,951 14,218 Profit before tax 2,312 4,833 Income tax expense (867) - Profit after tax 1,445 4,833

Proportionate interest in joint ventures’ capital commitment - -

Proportionate interest in joint ventures’ contingent liabilities incurred jointly with other investors - -

Details of joint ventures are provided in Note 36.

14. Investments in subsidiaries

The Company 2014 2013 $’000 $’000 Unquoted equity shares, at cost 1,288,262 1,288,262 Unquoted redeemable convertible preference shares, at cost 1,094,200 1,094,200 2,382,462 2,382,462 Financial guarantees 115,941 115,941 Less: Accumulated impairment losses (498,895) (498,895) 1,999,508 1,999,508

Details of significant subsidiaries are provided in Note 36. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 119

15. Investment properties

The Group 2014 2013 $’000 $’000 Completed investment properties Balance at beginning of financial year 4,228,255 7,744,328 Additions 7,788 26,118 Acquisition of a subsidiary 64,638 - Disposal - (632,395) De-consolidation of subsidiaries - (3,161,387) Transfer from properties under development 189,110 237,707 Transfer to investment properties under redevelopment (257,396) - Revaluation gain taken to income statement 192,949 136,825 Currency translation differences (32,085) (122,941) Completed properties, at valuation 4,393,259 4,228,255 Investment properties under redevelopment Balance at beginning of financial year 30,379 28,962 Additions 5,214 617 Transfer from completed investment properties 257,396 - Revaluation gain taken to income statement 11,103 800 Redevelopment properties, at valuation 304,092 30,379 Total investment properties 4,697,351 4,258,634

(a) The following amounts are recognised in income statement:

The Group 2014 2013 $’000 $’000 Rental income 261,788 376,709 Direct operating expenses arising from investment properties that generated rental income (68,128) (94,859)

(b) Certain investment properties of the Group, amounting to $1,363,607,000 (2013: $1,272,959,000) are mortgaged to secure bank loans (Note 21).

(c) The fair value hierarchy, valuation process, techniques and inputs used to determine the fair values of investment properties and properties under development (Note 16) are disclosed in Note 28.

(d) As at 31 March 2014, the fair values of the investment properties and properties under development (Note 16) have been determined by DTZ Debenham Tie Leung (SEA) Pte. Ltd, DTZ Debenham Tie Leung K.K., Cushman & Wakefield K.K, CBRE KK Valuation & Advisory Services, CH Williams Talhart & Wong Sdn Bhd, Jones Lang LaSalle Corporate Appraisal and Advisory Ltd, Jones Lang LaSalle Vietnam Co. Ltd, Cushman & Wakefield (Vietnam) Co., Ltd, DTZ Debenham Tie Leung Limited and CBRE Vietnam. These valuers have appropriate professional qualifications and experience in the location and category of the properties being valued. It is the intention of the Group to hold the investment properties and properties under development (Note 16) on a long-term basis. 120 Notes to the Financial Statements For the financial year ended 31 March 2014

16. Properties under development

The Group 2014 2013 $’000 $’000 Balance at beginning of financial year 470,339 433,339 De-consolidation of a subsidiary (28,118) - Additions 1,097,325 320,004 Transfer to investment properties (189,110) (237,707) Revaluation gain taken to income statement 8,799 14,868 Currency translation differences 8,101 (60,165) Balance at end of financial year 1,367,336 470,339

(a) During the financial year, finance costs capitalised as part of cost of properties under development amounted to $252,000 (2013: $272,900).

(b) In the previous financial year, certain properties under development of the Group amounting to $118,759,000 were mortgaged to secure bank loans (Note 21).

17. Property, plant and equipment

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Cost Beginning of financial year 25,622 24,311 14,814 13,949 Additions 1,810 4,524 1,320 865 Acquisition of a subsidiary 68 - - - Write-offs/Disposals (861) (1,777) - - Disposal of subsidiaries (60) (1,220) - - Currency translation differences 60 (216) - - End of financial year 26,639 25,622 16,134 14,814 Accumulated depreciation Beginning of financial year 14,101 11,988 6,397 4,285 Depreciation 3,911 3,705 2,427 2,112 Write-offs/Disposals (861) (1,191) - - Disposal of subsidiaries (14) (337) - - Currency translation differences 28 (64) - - End of financial year 17,165 14,101 8,824 6,397 Net book value End of financial year 9,474 11,521 7,310 8,417 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 121

18. Intangible assets

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Software Licence Beginning of financial year 9,153 8,764 7,659 7,088 Additions 1,677 1,444 1,660 1,442 Amortisation (1,242) (1,055) (1,069) (871) End of financial year 9,588 9,153 8,250 7,659

19. Trade and other payables

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Trade payables - related parties 501 4,588 - - - non-related parties 10,219 2,938 4 45 10,720 7,526 4 45 Non-trade payables: - subsidiaries - - 5,962 3,739 - non-related parties 22,187 10,477 - - 22,187 10,477 5,962 3,739

Provision for Corporate and Staff Social Responsibilities (“CSSR”) 4,131 3,853 4,131 3,853 Financial guarantees - - 13,817 23,506 Accrued capital expenditure 16,829 52,679 - - Accrued operating expenses 213,272 222,866 95,132 104,555 Accrued share-based compensation expense 63,636 69,364 63,636 69,364 Accrued retention sum 1,764 2,582 - - Interest payable 6,730 9,484 - - Rental received in advance 14,552 11,712 - - Tenancy deposits 49,311 50,795 - - Property tax payable 8,914 8,285 - - Other deposits 4,592 3,132 47 117 383,731 434,752 176,763 201,395

Total 452,755 205,179 416,638 182,729

Less: Non-current portion (135,959) (136,701) (73,081) (89,095) Current portion 280,679 316,054 109,648 116,084 122 Notes to the Financial Statements For the financial year ended 31 March 2014

19. Trade and other payables (continued)

(a) The non-trade payables due to subsidiaries and non-related parties are unsecured, interest-free and repayable on demand.

(b) Provision for CSSR relates to the Group’s CSSR commitments under its published Mapletree Shaping & Sharing Programme that strives to make social impact by empowering individuals and enriching communities through education, health, environmental and arts related causes. During the financial year, the Group committed $2,000,000 (2013: $2,000,000) as a provision for the Group’s CSSR programme.

(c) Non-current accrued operating expenses relate to four employee compensation schemes, one scheme being compensation that is deferred and payable over a period of time, and the other three schemes being compensation that will vest over certain qualifying periods based on duration of employees’ services rendered after achieving certain performance targets.

20. Derivative financial instruments

The Group Contract Notional Fair Value Maturity Amount Assets Liabilities $’000 $’000 $’000 2014 Cash flow hedges: - Interest rate swaps December 2015 128,100 - (897)

Net investment hedges: - Currency forwards April 2014 – August 2016 605,493 1,406 (874)

Non-hedging instruments: - Interest rate cap March 2017 24,540 31 - - Currency forwards April 2014 – February 2015 755,076 3,888 (387) - Cross currency swaps July 2022 253,486 - (9,313) 3,919 (9,700)

5,325 (11,471) 2013 Cash flow hedges: - Interest rate swaps March 2014 – December 2015 372,512 - (6,406)

Non-hedging instruments: - Interest rate cap October 2013 – March 2017 135,798 82 - - Currency forwards April 2013 595,787 3,625 (788) - Cross currency swaps July 2022 247,100 - (4,472) 3,707 (5,260) 3,707 (11,666)

Period when the cash flows on cash flow hedges is expected to occur or affect income statement.

Interest rate swaps Interest rate swaps are entered to hedge floating monthly and quarterly interest payments on borrowings that will mature in December 2015 (2013: between March 2014 to December 2015). Fair value gains and losses on the interest rate swaps recognised in other comprehensive income are reclassified to income statement as part of interest expense over the period of the borrowings. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 123

21. Borrowings

The Group 2014 2013 $’000 $’000 Current - Bank loans (secured) 152,787 241,183 - Bank loans (unsecured) - 62,775 - Medium term notes (unsecured) 50,000 350,000 202,787 653,958 Non-current - Bank loans (secured) 449,080 375,962 - Bank loans (unsecured) 36,595 333,033 - Medium term notes (unsecured) 339,424 389,279 - Loan from a minority shareholder of a subsidiary (unsecured) 26,865 26,382 851,964 1,124,656 1,054,751 1,778,614

(a) The current (secured) bank loans of $152,787,000 (2013: $241,183,000) are secured by mortgages over certain leasehold investment properties (Note 15) and are repayable between April 2014 and February 2015 (2013: October 2013 and March 2014). The effective interest rates at the balance sheet date ranged from 0.44% to 4.41% (2013: 0.92% to 4.41%) per annum and the interest rates are re-priced every one to twelve months.

(b) The current medium term notes issued by a subsidiary pursuant to the Medium Term Note Programme are repayable in January 2015 (2013: August 2013). The effective interest rate at the balance sheet date is 3.75% (2013: 4.60%) per annum.

(c) The non-current (secured) bank loans of $449,080,000 (2013: $375,962,000) are secured by mortgages over certain leasehold investment properties (Note 15) and properties under development (Note 16) and are repayable between October 2016 and March 2019 (2013: September 2014 and December 2017). The effective interest rates at the balance sheet date ranged from 0.28% to 8.95% (2013: 0.46% to 1.68%) per annum and the interest rates are re-priced every one to twelve months.

(d) The non-current (unsecured) bank loans of $36,595,000 (2013: $333,033,000) are repayable in October 2016 (2013: between May 2015 and January 2017). The effective interest rate at the balance sheet date is 0.50% (2013: ranged from 0.95% to 3.30%) per annum and the interest rate is re-priced every three months (2013: every one to twelve months).

(e) The non-current medium term notes issued by a subsidiary pursuant to the Medium Term Note Programme are repayable between March 2018 and October 2018 (2013: January 2015 and October 2018). The effective interest rates at the balance sheet date ranged from 3.88% to 4.45% (2013: 3.75% to 4.45%) per annum.

(f) The non-current loan from a minority shareholder of a subsidiary is unsecured, interest-free and has no fixed terms of repayment, although repayment is not expected within the next twelve months.

(g) As at the end of the previous financial year, the current (unsecured) bank loans of $62,775,000 were repayable between April 2013 and March 2014. The effective interest rates at the balance sheet date ranged from 0.66% to 1.38% per annum and the interest rates re-priced every one to twelve months. The loans have been repaid in the current financial year. 124 Notes to the Financial Statements For the financial year ended 31 March 2014

22. Deferred income taxes

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the balance sheets as follows:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Deferred income tax assets - to be recovered within one year (14,848) (3,661) (771) (646) Deferred income tax liabilities - to be settled within one year - - - - - to be settled after one year 133,624 109,694 2,044 1,742 133,624 109,694 2,044 1,742 118,776 106,033 1,273 1,096

Movement in the deferred income tax account is as follows:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Beginning of financial year 106,033 113,295 1,096 7 Tax charge/(credit) to: - income statement 8,200 11,209 177 1,089 - other comprehensive income 936 (1,089) - - - equity (5,228) (945) - - Acquisition of a subsidiary 8,211 - - - Disposals - (13,702) - - Others 624 (2,735) - - End of financial year 118,776 106,033 1,273 1,096

Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group had unutilised tax losses of approximately $44,374,000 (2013: $18,194,000) at the balance sheet date which can be carried forward and used to offset against future taxable income, subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation.

Deferred income tax liabilities have not been recognised for withholding and other taxes that would be payable on the unremitted earnings of $18,207,000 (2013: $49,771,000) of overseas subsidiary companies as the timing of the reversal of the temporary difference arising from such amounts can be controlled and it is probable that such temporary differences will not reverse in the foreseeable future. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 125

22. Deferred income taxes (continued)

The movement in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year is as follows:

The Group Accelerated Accrued Revaluation tax depreciation revenue gains Total $’000 $’000 $’000 $’000 Deferred income tax liabilities At 1 April 2013 40,194 413 69,087 109,694 Charge to income statement 9,877 9 7,741 17,627 Acquisition of a subsidiary - - 8,792 8,792 Others (2,756) 54 213 (2,489)

At 31 March 2014 47,315 476 85,833 133,624

At 1 April 2012 43,538 5,927 64,364 113,829 Charge/(credit) to income statement 10,406 (5,514) 7,410 12,302 Disposals (13,222) - (480) (13,702) Others (528) - (2,207) (2,735) At 31 March 2013 40,194 413 69,087 109,694

Fair value Perpetual changes, net securities Provisions Total $’000 $’000 $’000 $’000 Deferred income tax assets At 1 April 2013 (1,089) (945) (1,627) (3,661) Charge/(credit) to: - income statement - - (9,427) (9,427) - other comprehensive income 936 - - 936 - equity - (5,228) - (5,228) Acquisition of a subsidiary - - (581) (581) Others - 3,039 74 3,113

At 31 March 2014 (153) (3,134) (11,561) (14,848)

At 1 April 2012 - - (534) (534) Credit to: - income statement - - (1,093) (1,093) - other comprehensive income (1,089) - - (1,089) - equity - (945) - (945) At 31 March 2013 (1,089) (945) (1,627) (3,661) 126 Notes to the Financial Statements For the financial year ended 31 March 2014

22. Deferred income taxes (continued)

The Company Accelerated tax depreciation $'000 Deferred income tax liabilities At 1 April 2013 1,742 Credit to income statement 302 At 31 March 2014 2,044

At 1 April 2012 595 Credit to income statement 1,147 At 31 March 2013 1,742

Provisions $'000 Deferred income tax assets At 1 April 2013 (646) Credit to income statement (125)

At 31 March 2014 (771)

At 1 April 2012 (588) Credit to income statement (58) At 31 March 2013 (646)

23. Share capital of Mapletree Investments Pte Ltd

Issued and fully paid ordinary shares and Series A redeemable preference shares (“RPS”)

Issued shared capital No. of shares Amount ’000 $’000 2014 and 2013 Balance at beginning and end of financial year - Ordinary share capital, with no par value 1,524,307 1,524,307 - Series A redeemable preference shares, with no par value 16 1,570,000

1,524,323 3,094,307

Issued and fully paid Series A redeemable preference shares (“RPS”)

The Series A redeemable preference shares (“RPS”) confer upon the holders the following rights:

(a) Dividends The right to receive out of the distributable profits of the Company a non-cumulative preferential dividend at a rate of 1% per annum on the redemption amount (being the value of the Series A RPS). The preferential dividend shall:

(i) be declared by the Directors at any time and from time to time and payable at such time as the Directors shall determine; and

(ii) be paid in priority to any dividend or distribution in favour of holders of any other classes of shares in the Company. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 127

23. Share capital of Mapletree Investments Pte Ltd (continued)

Issued and fully paid Series A redeemable preference shares (“RPS”) (continued)

(b) Voting The right to attend and vote at general meetings of the Company only upon the happening of any of the following events:

(i) during such year as the preferential dividend or any part thereof remains in arrears and unpaid for more than 12 months;

(ii) upon any resolution which varies or abrogates the rights attached to the preference shares; and

(iii) upon any resolution for the winding up of the Company.

In addition, written approval of 75% of the RPS holders has to be obtained prior to:

(i) variation or abrogation of rights to RPS holders;

(ii) altering RPS through e.g. repurchase, cancellation, reduction, subdivision, reclassification or consolidation;

(iii) issue of equity or debt convertible into equity ranking pari passu or in priority to RPS; or

(iv) declaration or payment of dividends or other distribution of profits or by issuance of ordinary shares through capitalisation of profits or reserves.

(c) Redemption The Company has the rights to redeem all or any part of the RPS issued and fully paid at any time. Each RPS will be redeemed for the amount paid up thereon plus any arrears and accrual of dividends payable on the RPS to the redemption date.

Share-based Compensation Plans The Company currently operates the following share-based compensation plans: MSA Plan, Mapletree PSU Plan, Mapletree RSU Plan and Mapletree NED RSU Plan (collectively referred to as the “Share-based Compensation Plans”). The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the Share-based Compensation Plans.

Mapletree Share Appreciation Rights Plan The MSA Plan for employees and non-executive directors was adopted by the Board of Directors and shareholder of the Company on 4 January 2008 and are restricted to employees and non-executive directors of the Group. For the financial years ended 31 March 2008 and 31 March 2009, MSA Rights were granted to certain employees and non-executive directors of the Group. Participants of the MSA Plan were granted MSA Rights at a grant value which was determined by the ERCC using the fair value of the ordinary shares in the capital of the Company (“Company Shares”). Participants may exercise the MSA Rights commencing on or after a realisable event and expiring on the tenth (10th) anniversary of such grant.

Upon exercise of the MSA Rights, the Company shall procure that the participant is paid for each MSA Right in respect of which the grant is exercised, an amount equal to the excess of the market value of one unit share over the grant value of the MSA Rights. If the ERCC is of the opinion that the market value as determined is not representative of the value of a unit share, the market value will be determined at such price as deemed to be reasonable by the ERCC. The ERCC has the absolute discretion to determine if the payment will be made wholly or partly in the form of the Company Shares or in cash.

The performance condition added as part of the modifications was achieved as of 31 March 2013. 128 Notes to the Financial Statements For the financial year ended 31 March 2014

23. Share capital of Mapletree Investments Pte Ltd (continued)

Share-based Compensation Plans (continued) Mapletree Share Appreciation Rights Plan (continued) The number of MSA Rights outstanding under the MSA Plan at the end of the financial year is summarised below:

2014 2013 ’000 ’000 Beginning of financial year 79,193 82,186 Forfeited/cancelled (692) (2,993) Released (26,398) - End of financial year 52,103 79,193

The MSA Rights released during the financial year of 26,397,767 were cash-settled. The number of MSA Rights awarded and outstanding of 52,102,560 (2013: 79,193,300) are to be cash-settled and are measured at their current fair value at the balance sheet date.

Mapletree Performance Share Units Plan and Mapletree Restricted Share Units Plan The Mapletree PSU Plan and the Mapletree RSU Plan (collectively referred to as the “Plans”) for employees (including executive director) were approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009. The first grant of award under the Plans was made in January 2010. The duration of each share plan is 10 years commencing 4 November 2009.

The number of PSU outstanding under the Mapletree PSU Plan at the end of the financial year is summarised below:

2014 2013 ’000 ’000 Beginning of financial year 10,125 7,382 Initial award granted 1,977 2,902 Forfeited/cancelled (52) (159) End of financial year 12,050 10,125 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 129

23. Share capital of Mapletree Investments Pte Ltd (continued)

Share-based Compensation Plans (continued) Mapletree Performance Share Units Plan and Mapletree Restricted Share Units Plan (continued) The final number of units to be released will depend on the achievement of pre-determined targets over a five-year performance period. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 200% of the initial award.

On 31 March 2014, the PSU awarded and outstanding were reclassified from equity-settled to cash-settled. The number of PSU awarded and outstanding of 12,049,540 are to be cash-settled. As at the end of the previous financial year, the number of PSU awarded and outstanding of 10,124,800 were to be equity-settled. The final number of units to be released in respect of 12,049,540 (2013: 10,124,800) of outstanding PSU has not been determined.

The number of RSU outstanding under the Mapletree RSU Plan at the end of the financial year is summarised below:

2014 2013 ’000 ’000 Beginning of financial year 9,080 7,096 Initial award granted 3,507 4,528 Additional award granted for over-achievement of performance targets 269 1,735 Forfeited/cancelled (315) (515) Released (4,322) (3,764) End of financial year 8,219 9,080

The RSU released during the financial year of 4,322,420 (2013: 3,763,663) were cash-settled.

The number of RSU awarded and outstanding of 8,219,078 (2013: 9,080,307) are to be cash-settled. The final number of units to be released in respect of 3,506,650 (2013: 4,528,155) of outstanding RSU has not been determined.

The final number of units to be released will depend on the achievement of pre-determined targets over a one-year performance period and the release will be over a vesting period of three years. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 150% of the initial award.

PSU and RSU units that are expected to be cash-settled are measured at their current fair value at the balance sheet date. The fair value is measured based on the share price of $2.56 (2013: $2.48) at the balance sheet date. In the previous financial year, PSU units that were expected to be equity-settled were measured at their grant date fair values.

Mapletree NED Restricted Share Units Plan The Mapletree NED RSU Plan was approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009 and are restricted to non-executive directors (“NED”) of the Company and its subsidiaries. The first grant of award was made in June 2010. The duration of the Mapletree NED RSU Plan is 10 years commencing 4 November 2009.

Under the Mapletree NED RSU Plan, awards are granted to eligible non-executive directors of the Company. A NED Restricted Share Unit (“NED RSU”) granted under the Mapletree NED RSU Plan represents a right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Mapletree NED RSU Plan. Grants of Mapletree NED RSU made to a non-executive director shall form part of the director’s remuneration.

23. Share capital of Mapletree Investments Pte Ltd (continued)

Share-based Compensation Plans (continued) Mapletree NED Restricted Share Units Plan (continued) The number of NED RSU outstanding under the Mapletree NED RSU Plan at the end of the financial year is summarised below:

2014 2013 ’000 ’000 Beginning of financial year 118 85 Granted 45 37 Exercised (17) (4) End of financial year 146 118

The NED RSU exercised during the year of 17,164 (2013: 5,687) were cash-settled.

The number of units awarded, vested and outstanding of 146,121 (2013: 118,334) are to be cash-settled. The fair value of the cash-settled award of NED RSU at the balance sheet date is determined based on the net asset value (excluding perpetual securities) per share of the Group at the balance sheet date, up to a maximum of 200% of the initial net asset value per share of the Group at the respective grant dates.

24. Perpetual securities

On 25 July 2012, Mapletree Treasury Services Limited (“MTSL”), a wholly owned subsidiary of the Company, issued perpetual securities with an aggregate principal amount of $600,000,000. Incremental cost incurred amounting to $8,484,000 was recognised in equity as a deduction from proceeds.

Such perpetual securities are guaranteed by the Company and bear distributions at a rate of 5.125% per annum, payable semi-annually. Subject to the relevant terms and conditions in the offering circular, MTSL may elect to defer making distribution on the perpetual securities, and is not subject to any limits as to the number of times a distribution can be deferred.

As a result, the Group is considered to have no contractual obligations to repay its principal or to pay any distributions and the perpetual securities do not meet the definition for classification as a financial liability under FRS 32 Financial Instruments: Disclosure and Presentation. The whole instrument is presented within equity, and distributions are treated as dividends.

25. Contingent liabilities

Details and estimates of maximum amounts of contingent liabilities, excluding those relating to associated companies and joint ventures are as follows:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Unsecured bankers’ guarantees given in respect of operations 2,990 3,829 2,990 3,829

The Company has given a guarantee in relation to the medium term notes issued by a subsidiary (Note 21). Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 131

26. Commitments

(a) Capital commitments The Group 2014 2013 $’000 $’000 Development expenditure contracted for 787,694 27,291 Commitment in respect of equity participation in associated companies 826,370 228,180 Commitment in respect of equity participation in joint venture companies 10,215 17,885 Commitment in respect of equity participation in available-for-sale financial assets 1,501 2,862

(b) Operating lease commitments - where the Group is a lessor The Group leases out office and retail spaces under non-cancellable operating lease agreements. The leases have escalation clauses and renewal rights.

The future minimum lease payments receivable under non-cancellable operating leases contracted for at the balance sheet date but not recognised as receivables, are as follows:

The Group 2014 2013 $’000 $’000 Not later than one year 314,376 277,602 Later than one year but not later than five years 661,440 675,874 Later than five years 578,272 526,679 1,554,088 1,480,155

Some of the operating leases are subject to revision of lease rentals at periodic intervals. For the purposes of the above disclosure, the prevailing lease rentals are used.

(c) Operating lease commitments - where the Group is a lessee The Group leases land and office space under non-cancellable operating lease agreements.

The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities are:

The Group 2014 2013 $’000 $’000 Not later than one year 5,498 1,833 Between one and five years 8,770 2,627 Later than five years 17,470 4,712 31,738 9,172

27. Financial risk management

The Group’s activities expose it to a variety of financial risks. The Group uses different methods to measure and manage various types of risks to which it is exposed. These include monitoring levels of exposure to foreign exchange, price, interest rate, credit and liquidity risk.

Risk management is carried out under policies approved by the Board of Directors. The Board of Directors provides general principles for overall risk management, covering areas such as foreign exchange risk, interest rate risk, credit risk and liquidity risk. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Group’s activities. The Audit and Risk Committee, assisted by the risk management department and/or internal auditors, also evaluates the effectiveness of the system associated with the financial risk management programmes. 132 Notes to the Financial Statements For the financial year ended 31 March 2014

27. Financial risk management (continued)

(a) Market risk

(i) Foreign exchange risk The Group is exposed to exchange rate risk on its foreign currency denominated assets and investments. This currency exposure is, where practicable and appropriate, managed through borrowing in the same currencies in which the assets and/or investments are denominated as well as currency forwards, currency call/put options, and cross currency swap contracts.

In relation to its overseas investments in foreign subsidiaries whose net assets are exposed to currency translation risks and which are held for long term investment purpose, the differences arising from such translation are recorded under the foreign currency translation reserve. These translation differences are reviewed and monitored on a regular basis and managed primarily through currency forwards and/or borrowings denominated in the relevant currencies.

Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The Group’s currency exposure is as follows:

SGD USD RMB HKD JPY Others Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 2014 Financial assets Cash and cash equivalents 139,416 44,249 42,918 3,339 47,018 26,362 303,302 Financial assets, available-for-sale 63,453 68,062 - 132 5,548 - 137,195 Trade and other receivables 6,951,995 1,680,551 238,284 915,139 684,321 52,748 10,523,038 Deposits 729 54 665 3,062 462 3,591 8,563 7,155,593 1,792,916 281,867 921,672 737,349 82,701 10,972,098

Financial liabilities Borrowings 584,352 - - - 419,303 51,096 1,054,751 Trade and other payables 7,411,440 1,493,698 242,753 909,962 712,149 184,029 10,954,031 7,995,792 1,493,698 242,753 909,962 1,131,452 235,125 12,008,782

Net financial (liabilities)/ assets (840,199) 299,218 39,114 11,710 (394,103) (152,424) (1,036,684) Net financial liabilities denominated in the respective entities’ functional currencies 602,891 280,759 28,120 3,568 619,942 171,385

Notional amount of currency forwards and cross currency swaps - (703,893) (64,118) (15,935) (217,861) (6,754)

Currency exposures on financial assets and liabilities (237,308) (123,916) 3,116 (657) 7,978 12,207

The USD net exposures as at 31 March 2014 mainly arise from external USD borrowings obtained to finance the Group’s purchase of properties in China.

Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 133

27. Financial risk management (continued)

(a) Market risk (continued)

(i) Foreign exchange risk (continued)

SGD USD RMB HKD JPY Others Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 2013 Financial assets Cash and cash equivalents 1,568,202 80,901 21,666 3,567 52,760 15,719 1,742,815 Financial assets, available-for-sale 68,820 66,659 - - 5,834 - 141,313 Trade and other receivables 9,922,467 2,018,304 135,071 20,943 803,264 35,942 12,935,991 Deposits 745 29 546 252 517 657 2,746 11,560,234 2,165,893 157,283 24,762 862,375 52,318 14,822,865

Financial liabilities Borrowings 931,766 285,171 38,025 - 483,198 40,454 1,778,614 Trade and other payables 9,348,465 1,955,670 160,952 17,106 861,585 28,651 12,372,429 10,280,231 2,240,841 198,977 17,106 1,344,783 69,105 14,151,043

Net financial assets/ (liabilities) 1,280,003 (74,948) (41,694) 7,656 (482,408) (16,787) 671,822 Net financial (assets)/ liabilities denominated in the respective entities’ functional currencies (1,045,401) 617,832 37,903 3,202 657,724 23,622

Notional amount of currency forwards and cross currency swaps - (662,619) - (12,805) (166,997) -

Currency exposures on financial assets and liabilities 234,602 (119,735) (3,791) (1,947) 8,319 6,835

The USD net exposures as at 31 March 2013 mainly arise from external USD borrowings obtained to finance the Group’s purchase of properties in China.

The Company’s financial assets and liabilities are mainly denominated in Singapore Dollars. 134 Notes to the Financial Statements For the financial year ended 31 March 2014

27. Financial risk management (continued)

(a) Market risk (continued)

(i) Foreign exchange risk (continued) If the USD, JPY, HKD and RMB change against the SGD by 4% (2013: 5%) respectively with all other variables including tax rate being held constant, the effect arising from the net financial liability/asset will be as follows:

Increase/(Decrease) 2014 2013 Profit Profit after tax after tax $’000 $’000 The Group USD against SGD - strengthened (929) (1,523) - weakened 929 1,523 RMB against SGD - strengthened 103 (157) - weakened (103) 157 USD against RMB - strengthened (3,185) (3,446) - weakened 3,185 3,446 HKD against SGD - strengthened (22) (81) - weakened 22 81 JPY against SGD - strengthened 265 345 - weakened (265) (345)

(ii) Price risk The Group is exposed to equity securities price risk on investments held classified as available-for-sale. These securities are listed in Singapore and Hong Kong SAR. The Group has policies in place to ensure that the performance of investments held are monitored with respect to the risk relevant to the market in which the investments operate in.

If prices for equity securities listed in Singapore and Hong Kong SAR change by 9% (2013: 12%) with all variables including tax rate being held constant, the effect on fair value reserve will be: Increase/(Decrease) 2014 2013 Fair value Fair value reserve reserve $’000 $’000 The Group Listed in Singapore and Hong Kong SAR - increased by 9% (2013: 12%) 5,723 8,258 - decreased by 9% (2013: 12%) (5,723) (8,258) Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 135

27. Financial risk management (continued)

(a) Market risk (continued)

(iii) Cash flow and fair value interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates.

The Group is exposed to interest rate risk on its borrowings. The Group manages the risk by maintaining an appropriate mix of fixed and floating rate interest bearing liabilities. This is achieved either through fixed rate borrowings or through the use of floating-to-fixed interest rate swaps and/or interest rate caps.

The Group’s borrowings at variable rates on which effective hedges have not been entered into, are denominated mainly in JPY (2013: SGD, USD, HKD and JPY). If the interest rates increase/decrease by 0.50% (2013: 0.50%) with all other variables including tax rate being held constant, the profit after tax will be lower/higher by $1,607,000 (2013: $1,852,000) as a result of higher/lower interest expense on these borrowings. Other comprehensive income would have been higher by $1,027,000 (2013: $1,658,000) and lower by $1,015,000 (2013: $1,680,000) mainly as a result of higher fair value of interest rate swaps designated as cash flow hedges of variable rate borrowings.

(b) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The major classes of financial assets of the Group and the Company are bank deposits, trade receivables and loan to joint venture. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit history, and obtaining sufficient security where appropriate to mitigate credit risk. For other financial assets, the Group adopts the policy of dealing only with acceptable credit quality counterparties.

The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that services are made to customers with an appropriate credit history. Security in the form of bankers guarantees, insurance bonds (issued by bankers or insurers of acceptable credit quality) or cash security deposits are obtained prior to the commencement of the lease.

The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet, except as follows:

The Company 2014 2013 $’000 $’000 Corporate guarantees provided to banks on subsidiaries’ loans 426,810 1,141,056

(i) Financial assets that are neither past due nor impaired Bank deposits that are neither past due nor impaired are mainly deposits with banks with acceptable credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group. 136 Notes to the Financial Statements For the financial year ended 31 March 2014

27. Financial risk management (continued)

(b) Credit risk (continued)

(ii) Financial assets that are past due and/ or impaired There is no other class of financial assets that is past due and/or impaired except for trade receivables.

The age analysis of trade receivables past due but not impaired is as follows:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Not past due 48,752 79,141 8,370 8,754 Past due < 3 months 20,528 20,956 - - Past due over 3 months 10,493 37,949 - - 79,773 138,046 8,370 8,754

The carrying amount of trade receivables individually determined to be impaired and the movement in the related allowance for impairment are as follows:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Gross amount - 316 - - Less: Allowance for impairment - (316) ------

Beginning of financial year 316 408 - - Allowance utilised (316) (59) - - Allowance reversed - (33) - - End of financial year - 316 - -

The Group and the Company believes that no additional allowance is necessary in respect of the remaining trade and other receivables as these receivables are mainly arising from tenants with good collection records as well as sufficient security in the form of bankers guarantees, insurance bonds, or cash security deposits as collaterals.

(c) Liquidity risk The Group adopts prudent liquidity risk management by maintaining sufficient cash to fund its working capital, its financial obligations and expected committed capital expenditure requirements.

The table below analyses non-derivative financial liabilities of the Group into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 137

27. Financial risk management (continued)

Less than Between Between Over 1 year 1 and 2 years 2 and 5 years 5 years $’000 $’000 $’000 $’000 The Group 2014 Trade and other payables 269,551 60,427 49,906 25,647 Borrowings 223,934 215,140 693,760 -

493,485 275,567 743,666 25,647 2013 Trade and other payables 304,342 55,429 63,624 17,648 Borrowings 693,383 307,752 643,596 254,970 997,725 363,181 707,220 272,618

The Company 2014 Trade and other payables 109,648 39,148 25,298 8,635 2013 Trade and other payables 116,084 39,552 39,885 9,658

The table below analyses the derivative financial instruments of the Group for which contractual maturities are essential for an understanding of the timing of the cash flows into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than Between Between Over 1 year 1 and 2 years 2 and 5 years 5 years $’000 $’000 $’000 $’000 The Group 2014 Net-settled interest rate swaps (cash flow hedges) - Net cash outflows 1,082 788 - -

Gross-settled currency forwards - Receipts (758,452) - - - - Payments 755,076 - - -

Gross-settled cross currency swaps - Receipts (12,664) (12,664) (38,026) (291,406) - Payments 14,403 14,400 43,053 292,750

138 Notes to the Financial Statements For the financial year ended 31 March 2014

27. Financial risk management (continued)

Less than Between Between Over 1 year 1 and 2 years 2 and 5 years 5 years $’000 $’000 $’000 $’000 2013 Net-settled interest rate swaps (cash flow hedges) - Net cash outflows 1,538 3,447 - -

Gross-settled currency forwards - Receipts (595,787) - - - - Payments 592,881 - - -

Gross-settled cross currency swaps - Receipts (12,664) (12,664) (38,026) (304,070) - Payments 14,289 14,143 42,266 300,859

(d) Capital risk The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

The Group is required by the banks to maintain a consolidated tangible net worth of not less than $1,000 million.

There were no changes in the Group’s approach to capital management during the financial year.

(e) Categories of financial assets and financial liabilities The following table sets out the financial instruments as at the balance sheet date:

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Financial assets Derivative financial instruments 5,325 3,707 - - Financial assets, available-for-sale 137,195 141,313 - - Loans and receivables (including cash and cash equivalents) 491,402 1,952,736 3,030,281 2,637,716 Financial liabilities Derivative financial instruments 11,471 11,666 - - Liabilities carried at amortised cost 1,457,848 2,219,657 168,912 181,673 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 139

28. Fair value measurements

(a) Fair value hierarchy The following table presents assets and liabilities measured at fair value and classified by level of fair value measurement hierarchy:

Level 1: quoted prices (unadjusted) in active markets for identical assets; and

Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000 The Group 2014 Financial assets Derivative financial instruments - 5,325 - 5,325 Financial assets, available-for-sale - Quoted 63,584 - - 63,584 - Unquoted - - 73,611 73,611 63,584 5,325 73,611 142,520

Financial liabilities Derivative financial instruments - (11,471) - (11,471)

Non-financial assets Completed investment properties - - 4,393,259 4,393,259 Investment properties under redevelopment - - 304,092 304,092 Properties under development - - 1,367,336 1,367,336 - - 6,064,687 6,064,687

2013 Financial assets Derivative financial instruments - 3,707 - 3,707 Financial assets, available-for-sale - Quoted 68,820 - - 68,820 - Unquoted - - 72,493 72,493 68,820 3,707 72,493 145,020

Financial liabilities Derivative financial instruments - (11,666) - (11,666)

Non-financial assets Completed investment properties - - 4,228,255 4,228,255 Investment properties under redevelopment - - 30,379 30,379 Properties under development - - 470,339 470,339 - - 4,728,973 4,728,973 140 Notes to the Financial Statements For the financial year ended 31 March 2014

28. Fair value measurements (continued)

(b) Valuation techniques

(i) Financial assets and liabilities The fair value of available-for-sale securities traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for the quoted available-for-sale financial assets held by the Group is the current bid price. These instruments are included in Level 1.

The fair value of financial instruments that are not traded in an active market (e.g. over-the-counter derivatives) is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. The fair value of interest rate swaps and interest rate caps are calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward currency rates at the balance sheet date. These investments are classified as Level 2 and comprise derivative financial instruments.

The fair value of available-for-sale unquoted financial assets are classified as Level 3 and are determined using the net asset value of the investee companies.

(ii) Non-financial assets Level 3 fair values of the Group’s properties have been generally derived using the following methods:

• Income capitalisation - Properties are valued by capitalising net rental income after property tax at a rate which reflects the present and potential income growth and over the unexpired lease term.

• Discounted cash flow - Properties are valued by discounting the future net income stream over a period to arrive at a present value.

• Direct comparison - Properties are valued using transacted prices for comparable properties in the vicinity and elsewhere with adjustments made for differences in location, tenure, size, shape, design, layout, age and condition of the buildings, availability of car parking facilities, dates of transactions and the prevailing market conditions.

• Residual value - Investments properties under redevelopment or development are valued, as a starting point using the direct comparison method, income capitalisation method and/or discounted cash flow method to derive the fair value of the property as if the redevelopment was already completed at balance sheet date. Deductions from that fair value, such as estimated construction cost and other costs to completion and estimated profit margin required to hold and develop property to completion are made to reflect the current condition of the property under redevelopment.

Fair value of investment properties are determined by external independent valuers. The valuation of significant properties are presented to and discussed with the Audit and Risk Committee as well as the Board of Directors.

(iii) Financial assets and liabilities not carried at fair values The carrying value less impairment provision of trade and other receivables and the carrying value of trade and other payables approximate their fair values. The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The fair value of borrowings approximates their carrying amounts as the interest rates of such loans are adjusted for changes in relevant market interest rate except for the medium term notes of $389,423,000 (2013: $739,279,000) whose fair value amounted to $411,411,000 (2013: $764,195,000), determined using indicative interest rate of the notes quoted by the Group’s bankers. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 141

28. Fair value measurements (continued)

(c) Level 3 assets measured at fair value The movements of non-financial assets classified under Level 3, for Completed Investment Properties and Investment Properties under Redevelopment are presented in Note 15 and for Property under Development in Note 16.

The following table presents the valuation techniques and key inputs that were used to determine the fair value of the non-financial assets classified under Level 3 of the fair value hierarchy: Relationship of Valuation unobservable inputs techniques Key unobservable inputs to fair value Completed investment Income capitalisation Capitalisation rate The higher the capitalisation rate, properties • Singapore: 4.5% - 8.8% the lower the fair value. • Others: 8.0% - 12.5%

Discounted cash flow Discount rate The higher the discount rate, • Singapore: 7.8% - 12.0% the lower the fair value. • Others: 4.0% - 13.5%

Terminal yield The higher the terminal yield, • Singapore: 4.8% - 8.3% the lower the fair value. • Others: 5.0% - 11.8%

Direct comparison Adjusted price The higher the adjusted price rate, • Singapore: the higher the fair value. $13,600 to $18,000 psm • Others: $240 psm

Investment properties Residual Gross development valuation The higher the gross development under redevelopment • Singapore: valuation, the higher the fair value. $7,523 to $16,146 psm

Development cost The higher the development cost • Singapore: rate, the lower the fair value. $3,334 - $5,746 psm

Properties under Discounted cash flow Discount rate The higher the discount rate, development • Others: 8.8% - 15.0% the lower the fair value.

Terminal yield The higher the terminal yield, • Others: 4.8% - 9.0% the lower the fair value.

Direct comparison Adjusted price The higher the adjusted price rate, • Others: $49 to $247 psm the higher the fair value.

29. Immediate holding and ultimate holding companies

The Company’s immediate holding company is Fullerton Management Pte Ltd, incorporated in Singapore. The ultimate holding company is Temasek Holdings (Private) Limited, incorporated in Singapore. 142 Notes to the Financial Statements For the financial year ended 31 March 2014

30. Related party transactions

The following transactions took place between the Group and related parties during the financial year:

(a) Sales and purchases of goods and services

The Group The Company 2014 2013 2014 2013 $’000 $’000 $’000 $’000 Sales of goods/services to related corporations 28,499 31,623 - - Service income from subsidiaries - - 120,503 98,947 Purchase of goods/services from related corporations 20,988 22,162 - - Fees from provision of fund management services to associated companies 200,885 186,801 - - Fees from provision of development management services to a related corporation 2,025 1,250 - - Dividend income from associated companies 357,564 190,834 - - Disposal of subsidiaries to associated companies 207,616 177,688 - - Disposal of investment properties to associated companies - 680,000 - - Interest income received from an associated company and a joint venture 243 642 - - Dividend income received from subsidiaries - - 502,881 456,800 Interest income received from subsidiaries - - 3,095 10,637 Interest expense paid to related corporations 3,126 23,915 - - Subscription to perpetual securities by related corporations - 101,250 - -

(b) Key management personnel compensation Key management personnel compensation is as follows:

The Group 2014 2013 $’000 $’000 Salaries and other short-term employee benefits 17,979 17,335 Post-employment benefits - contribution to CPF 150 172 Share-based compensation expense 11,150 6,089 29,279 23,596

(c) MSA Rights, PSU and RSU granted to key management The Company ceased to grant MSA Rights under the MSA Plan from the financial year ended 31 March 2010. The outstanding number of MSA as at 31 March 2014 granted by the Company to the key management of the Group was 33,357,333 (2013: 50,036,000).

During the financial year, the Company granted 1,350,020 PSU and 906,500 RSU (2013: 2,027,500 PSU and 1,476,000 RSU) to the key management of the Group. The PSU and RSU were given on the same terms and conditions as those offered to other employees of the Group. The outstanding number of PSU and RSU as at 31 March 2014 granted by the Company to the key management of the Group was 8,135,520 and 2,605,103 (2013: 6,785,500 and 3,240,906) respectively. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 143

31. Dividends

The Group and The Company 2014 2013 $’000 $’000 Final exempt (one-tier) redeemable preference share dividends paid in respect of the previous financial year of $1,000 per redeemable preference share 15,700 15,700 Final exempt (one-tier) ordinary share dividend paid in respect of the previous financial year 60,500 24,300 Special final exempt (one-tier) ordinary share dividend paid in respect of the previous financial year 23,800 -

At the Annual General Meeting to be held, the following dividends will be proposed: - final exempt (one-tier) redeemable preference share dividend of $1,000 (2013: $1,000) per redeemable preference share amounting to $15,700,000 (2013: $15,700,000); and - final exempt (one-tier) ordinary share dividend of 2.64913 cents (2013: 3.96901 cents) per ordinary share amounting to $40,400,000 (2013: $60,500,000). - special final exempt (one-tier) ordinary share dividend of 2.88000 cents (2013: 1.56137 cents) per ordinary share amounting to $43,900,000 (2013: $23,800,000).

These financial statements do not reflect the above dividends, which will be accounted for in shareholder’s equity as an appropriation of retained earnings in the financial year ending 31 March 2015.

32. Operational profit after tax and minority interests

Operational profit after tax and minority interests (Operational PATMI) denotes net income derived from the underlying operating activities of the Group including, inter-alia, real estate rental and sales activities, capital management fee income businesses, investments in real estate related assets and/or securities and corporate restructuring surplus or deficit. Any gains or losses on disposal and corporate restructuring surplus or deficit are measured based on the relevant original invested costs (“OIC”). Gains or losses on foreign exchange, fair value adjustments for financial derivatives and financial assets available-for-sale (per FRS 39 Financial Instruments: Recognition and Measurement), unrealised gains or losses, inter-alia, revaluations gains or losses, negative goodwill, dilution gain or loss are not included.

The Group 2014 2013 $’000 $’000 Profit Attributable to Equity Holder of the Company 859,370 931,733 After adjusting for: Revaluation gain on investment properties and properties under development (212,851) (152,493) Deferred tax on revaluation gain 7,741 7,410 Non-controlling interest share of revaluation gain/(loss) (825) 7,612 Net revaluation gain (197,498) (145,908)

Share of associated companies and joint ventures: Net gains on revaluation of investment properties and properties under development (280,394) (151,608) Net foreign exchange and financial derivatives gain (8,303) (23,411) (288,697) (175,019)

Net dilution gain in associated companies - (9,747) Net foreign exchange and financial derivatives loss 697 7,845 Adjustments on: Share of associated company disposal gain at OIC - 80,329 Corporate restructuring surplus at OIC * - 72,550 Operational PATMI 373,872 761,783

* Represents cumulative revaluation gains realised on dilution. 144 Notes to the Financial Statements For the financial year ended 31 March 2014

33. Segment reporting

The operating segments are determined based on the segment reporting reviewed by the Executive Management Committee (“EMC”) for strategic and operational decisions making purposes. The EMC comprises the Group Chief Executive Officer, Group Chief Investment Officer, Group Chief Financial Officer, Group Chief, Corporate Services, Head, Regional Development Management and the Heads of each business unit.

The following summary describes the operations in each of the Group reportable segments:

• Singapore Commercial: developer/owner/manager of assets located in Singapore, which comprise mainly offices, retail properties, residential properties and certain industrial and business park properties which are not under Logistics and Industrial business units. • Logistics: developer/owner/manager of logistics properties in Asia. • Singapore Industrial: developer/owner/manager of industrial properties in Singapore. • China and India: developer/owner/manager of properties, excluding logistics properties, in China and India. • South East Asia: developer/owner/manager of properties, excluding logistics properties, in markets in Southeast Asia. • North Asia: developer/owner/manager of properties, excluding logistics properties, in markets other than those listed above. • Others: include corporate departments and consolidation adjustments.

The segment information provided to the EMC for the reportable segments are as follows:

Singapore Singapore China and South Commercial Logistics Industrial India East Asia North Asia Others Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 2014 Revenue 293,597 85,762 40,467 44,522 23,202 56,443 4,607 548,600

Segmental results Earnings before valuation gain/(loss), interest and tax 219,740 50,860 27,502 31,227 6,071 31,319 (87,197) 279,522 Revaluation gain on investment properties and properties under development 183,080 19,567 - - 10,272 (68) - 212,851 Share of profit of associated companies and joint ventures 162,797 116,962 98,213 (12,647) 2,844 123,398 - 491,567 565,617 187,389 125,715 18,580 19,187 154,649 (87,197) 983,940

Interest income 2,959 Finance costs (45,126) Tax expense (66,356)

Profit for the year 875,417

Segment assets 4,815,301 2,098,712 819,873 429,072 569,960 1,795,230 237,242 10,765,390

Segment liabilities 381,917 368,152 10,138 22,854 113,551 188,529 563,316 1,648,457

Other segment items: Depreciation and amortisation 1,124 339 40 528 114 168 2,840 5,153 Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 145

33. Segment reporting (continued)

South East Asia (excluding Greater Rest of Singapore Singapore) China Asia Total $’000 $’000 $’000 $’000 $’000 2014 Geography information Revenue 421,227 34,529 40,170 52,674 548,600 Non-current assets 6,624,043 649,940 2,324,468 697,866 10,296,317 Total assets 6,892,301 718,745 2,399,085 755,259 10,765,390

Singapore Singapore China and South Commercial Logistics Industrial India East Asia North Asia Others Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 2013 Revenue 314,725 63,939 37,729 69,064 14,023 185,015 1,824 686,319

Segmental results Earnings before valuation gain/(loss), interest and tax 281,183 29,150 25,065 38,171 603 251,727 (96,140) 529,759 Revaluation gain on investment properties and properties under development 123,240 17,832 - - 453 10,968 - 152,493 Share of profit of associated companies and joint ventures 155,158 69,839 84,982 117,531 21,693 (7,140) - 442,063 559,581 116,821 110,047 155,702 22,749 255,555 (96,140) 1,124,315 Interest income 3,037 Finance costs (103,324) Tax expense (84,172)

Profit for the year 939,856

Segment assets 4,529,828 1,727,180 572,943 759,353 445,798 1,058,015 1,668,192 10,761,309

Segment liabilities 404,163 399,436 11,965 27,699 36,402 194,135 1,343,605 2,417,405

Other segment items: Depreciation and amortisation 1,113 284 32 392 174 425 2,340 4,760 146 Notes to the Financial Statements For the financial year ended 31 March 2014

33. Segment reporting (continued)

South East Asia (excluding Greater Rest of Singapore Singapore) China Asia Total $’000 $’000 $’000 $’000 $’000 2013 Geography information Revenue 444,026 23,964 182,311 36,018 686,319 Non-current assets 7,304,837 503,796 307,043 711,608 8,827,284 Total assets 9,028,460 583,264 367,487 782,098 10,761,309

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 2. Segment profit represents the profit earned by each segment without allocation of central administration costs. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

34. New accounting standards and FRS interpretations

Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Group’s accounting periods beginning on or after 1 April 2014 or later periods and which the Group has not early adopted:

• FRS 110 Consolidated Financial Statements (effective for annual periods beginning on or after 1 January 2014)

FRS 110 replaces all of the guidance on control and consolidation in FRS 27 “Consolidated and Separate Financial Statements” and INT FRS 12 “Consolidation – Special Purpose Entities”. The same criteria are now applied to all entities to determine control. Additional guidance is also provided to assist in the determination of control where this is difficult to assess. Under FRS 110, entities that a group parent currently consolidates may not qualify for consolidation and entities that a parent currently does not consolidate may qualify for consolidation. The Group will apply FRS 110 from 1 April 2014. The Group has evaluated whether it has control over its investees under FRS 110 and it does not expect the adoption of FRS 110 to have a significant impact on the financial statements of the oup.Gr

• FRS 111 Joint Arrangements (effective for annual periods beginning on or after 1 January 2014)

FRS 111 introduces a number of changes. The “types” of joint arrangements have been reduced to two: joint operations and joint ventures. The existing policy choice of proportionate consolidation for jointly controlled entities has been eliminated and equity accounting is mandatory for participants in joint ventures. Entities that participate in joint operations will follow accounting much like that for joint assets or joint operations currently.

The Group will apply FRS 111 from 1 April 2014, but this is not expected to have any significant impact on the financial statements of the Group.

• FRS 112 Disclosure of Interests in Other Entities (effective for annual periods beginning on or after 1 January 2014)

FRS 112 requires disclosure of information that helps financial statement readers to evaluate the nature, risks and financial effects associated with the entity’s interests in (1) subsidiaries, (2) associates, (3) joint arrangements and (4) unconsolidated structured entities.

The Group will apply FRS 112 prospectively from 1 April 2014. FRS 112 will not result in any changes to the Group’s accounting policies but will require more disclosures in the financial statements. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 147

35. Events after balance sheet date

On 10 April 2014, the Group signed a share purchase and option agreement relating to the acquisition of a 49% stake in a subsidiary of the R&B Realty Group, with the option to increase its stake to 100% over time. This entity manages serviced apartments in Asia under the Oakwood Worldwide trademarked brand. The total consideration is approximately US$17 million (S$21 million) and the acquisition was completed on 30 April 2014. At the same time, the Group signed a call option and purchase agreement relating to an exclusive option to purchase 100% of the R&B Realty Group subsequently, subject to satisfying certain conditions.

36. Listing of significant companies in the Group

(a) Associated companies

Directly held by HF (USA), Inc. San Francisco Cruise Development of United States 45 45 # # Terminal LLC properties for of America investment and sale

Directly held by Mapletree Jinshajiang Ltd. Thrive United Holdings Limited Development of Hong Kong SAR 20 20 12,658 12,658 properties for investment and sale

Directly held by Mapletree Capital Management Pte. Ltd. CIMB-Mapletree Management Fund management and Malaysia 40 40 349 349 Sdn. Bhd. advisory services

Directly or indirectly held by Mapletree PE Pte. Ltd. Mapletree China Investment holding Cayman Islands 36 - 71,422 - Opportunity Fund II Feeder, L.P. and property owner

NH Assets Pte. Ltd. Property owner Singapore 24 - 1,463 -

Directly held by Meranti Investments Pte. Ltd., Mangrove Pte. Ltd., Mulberry Pte. Ltd., Mapletree Logistics Properties Pte. Ltd. and Mapletree Logistics Trust Management Ltd. Mapletree Logistics Trust - Real Estate Investment Trust Property owner Singapore 40 40 752,167 752,167 148 Notes to the Financial Statements For the financial year ended 31 March 2014

36. Listing of significant companies in the Group (continued)

(a) Associated companies (continued)

Country of incorporation/ Effective place of interest held by Cost of Name of companies Principal activities business the Group investment 2014 2013 2014 2013 % % $’000 $’000 Directly held by Sienna Pte. Ltd., The HarbourFront Pte. Ltd., HarbourFront Place Pte. Ltd., HarbourFront Eight Pte. Ltd. and Mapletree Commercial Trust Management Ltd. Mapletree Commercial Trust - Real Estate Investment Trust * Property owner Singapore 39 39 749,477 740,910

Directly held by Kent Assets Pte. Ltd., Suffolk Assets Pte. Ltd., Mapletree Greater China Commercial Trust Management Ltd. and Mapletree Greater China Property Management Limited Mapletree Greater China Commercial Trust - Real Estate Investment Trust ** Property owner Singapore 33 32 812,326 792,125

Directly held by Mapletree Dextra Pte. Ltd. and Mapletree Industrial Trust Management Ltd. Mapletree Industrial Trust - Real Estate Investment Trust Property owner Singapore 32 30 514,045 465,044

Directly held by Mapletree Overseas Holdings Ltd. Mapletree Industrial Fund Ltd. Investment holding Cayman Islands/ 40 40 35,116 35,116 and property owner Singapore

Mapletree India China Fund Ltd. Investment holding Cayman Islands/ 43 43 256,596 380,251 and property owner People’s Republic of China

Directly or indirectly held by Mapletree Dextra Pte. Ltd. CMREF 1 Sdn. Bhd. Property owner Malaysia 25 25 21,127 16,464

CMREF 2 Sdn. Bhd. Property owner Malaysia 14 - 94 -

Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 149

36. Listing of significant companies in the Group (continued)

(a) Associated companies (continued)

Country of incorporation/ Effective place of interest held by Cost of Name of companies Principal activities business the Group investment 2014 2013 2014 2013 % % $’000 $’000 Harvest Yield Limited Investment holding Cayman Islands/ - 32 - 786 and property owner People’s Republic of China

Stable Growth Investments Property owner Hong Kong SAR 20 - 11,478 - Limited ***

3,263,674 3,221,226

# Cost of investment is less than $1,000. * Gain of $9,747,000 in the prior year arising from dilution of shareholding and share of listing expenses of $1,343,000 were netted off against the share of post acquisition reserve. ** Share of listing expenses of $15,013,000 in the prior year was netted off against the share of post acquisition reserve. *** See Note 8 on the dilution of interest in Stable Growth Investment Limited from 100% to 20%.

(b) Joint ventures

Indirectly held by Mapletree Overseas Holdings Ltd. Tianjin Port Haifeng Bonded Development of property People’s 49 49 34,112 34,112 Logistics Co., Ltd. for investment Republic of China

54,587 47,269 150 Notes to the Financial Statements For the financial year ended 31 March 2014

36. Listing of significant companies in the Group (continued)

Heliconia Realty Pte. Ltd. Investment holding Singapore 100 100 1,240,336 1,240,336 and property owner

Mapletree Capital Investment holding Singapore 100 100 # # Management Pte. Ltd.

Mapletree Logistics Investment holding Singapore 100 100 # # Properties Pte. Ltd.

Mapletree Treasury Finance and treasury Singapore 100 100 1,000 1,000 Services Limited centre performing financial and treasury operations and activities for the holding and related companies within the Group

Meranti Investments Pte. Ltd. Investment holding Singapore 100 100 # #

Mulberry Pte. Ltd. Investment holding Singapore 100 100 # #

Mangrove Pte. Ltd. Investment holding Singapore 100 100 # #

Mapletree Dextra Pte. Ltd. Investment holding Singapore 100 100 # #

Sienna Pte. Ltd. Investment holding Singapore 100 100 # #

Mapletree Developments Pte. Ltd. Investment holding Singapore 100 100 # #

Phoenix Chaoyang Pte. Ltd. Investment holding Singapore 100 - # -

The HarbourFront Pte. Ltd. Investment holding, Singapore 100 100 956,236 956,236 property owner, and development of properties for investment

Shanghai Mapletree Management Consulting services and People’s 100 100 9,469 9,469 Co., Ltd. real estate management Republic of China

Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 151

36. Listing of significant companies in the Group (continued)

Country of incorporation/ Effective place of interest held by Cost of Name of companies Principal activities business the Group investment 2014 2013 2014 2013 % % $’000 $’000 Mapletree Management Investment holding Singapore 100 100 100 100 Consultancy Pte. Ltd.

Mapletree Property Services Investment holding Singapore 100 100 100 100 Pte. Ltd.

Kent Assets Pte. Ltd. Investment holding Singapore 100 100 # #

Suffolk Assets Pte. Ltd. Investment holding Singapore 100 100 # #

Mapletree PE Pte. Ltd. Investment holding Singapore 100 100 # # 2,382,462 2,382,462

Country of Effective incorporation/ interest held Name of companies Principal activities place of business by the Group 2014 2013 % % Directly held by Heliconia Realty Pte. Ltd. Mapletree Business City Pte. Ltd. Property owner Singapore 100 100

Cantonment Realty Pte. Ltd. Development of properties Singapore 100 100 for sale

Vista Real Estate Investments Property owner Singapore 100 100 Pte. Ltd.

Directly held by Mapletree Capital Management Pte. Ltd. Mapletree Logistics Trust Management Ltd. Fund management and Singapore 100 100 advisory services

Mapletree Industrial Trust Management Ltd. Fund management and Singapore 100 100 advisory services

Mapletree Commercial Trust Fund management and Singapore 100 100 Management Ltd. advisory services

Mapletree Greater China Commercial Fund management and Singapore 100 100 Trust Management Ltd. advisory services 152 Notes to the Financial Statements For the financial year ended 31 March 2014

36. Listing of significant companies in the Group (continued)

Country of Effective incorporation/ interest held Name of companies Principal activities place of business by the Group 2014 2013 % % Mapletree Industrial Fund Management Fund management and Singapore 100 100 Pte. Ltd. advisory services

Mapletree Real Estate Advisors Pte. Ltd. Fund management and Singapore 100 100 advisory services

Mapletree GC Management Pte. Ltd. Investment holding Singapore 100 100

Directly held by The HarbourFront Pte. Ltd. HarbourFront Two Pte. Ltd. Property owner and Singapore 61 61 development of properties for investment

HarbourFront Three Pte. Ltd. Development of properties Singapore 61 61 for sale

HarbourFront Four Pte. Ltd. Development of properties Singapore 100 100 for investment

HarbourFront Place Pte. Ltd. Investment holding Singapore 100 100

HarbourFront Centre Pte. Ltd. Property owner and Singapore 100 100 development of properties for investment

Harbourfront Eight Pte. Ltd. Investment holding Singapore 100 100

Mapletree Anson Pte. Ltd. Development of properties Singapore 100 100 for investment

Directly or indirectly held by Mapletree Dextra Pte. Ltd. Mapletree Overseas Holdings Ltd. * Investment holding Cayman Islands 100 100

Mapletree GC Holdings Ltd. * Investment holding Cayman Islands 100 100

Mapletree Regional Holdings Ltd. * Investment holding Cayman Islands 100 100

Mapletree LM Pte. Ltd. Investment holding Singapore 100 100

Ever-Fortune Trading Centre Property owner and Vietnam 100 100 Joint Stock Company development of properties for investment

Mapletree Business City (Vietnam) Property owner Vietnam 100 100 Co., Ltd. Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 153

36. Listing of significant companies in the Group (continued)

Country of Effective incorporation/ interest held Name of companies Principal activities place of business by the Group 2014 2013 % % Vietsin Commercial Complex Development of property Vietnam 62 62 Development Joint Stock Company for investment

Nguyen Vu Investment Joint Stock Property owner Vietnam 100 - Company

Sunstone KB (HKSAR) Limited Development of property Hong Kong SAR 100 - for investment

Mapletree Wellington Pte. Ltd. Investment holding Singapore 100 -

Directly or indirectly held by Mapletree LM Pte. Ltd. Mapletree Japan Office Fund Pte. Ltd. Investment holding Singapore 100 100

Satsuki TMK Property owner Japan 100 100

MJOF Pte. Ltd. Investment holding Singapore 100 100

Higashikojiya Shugogatakojo TMK Property owner Japan 100 100 (formerly known as Somei TMK)

Directly or indirectly held by Mapletree Overseas Holdings Ltd. Mapletree Lingang Logistics Property owner People’s 100 100 Warehouse (Shanghai) Co., Ltd. Republic of China

Mapletree (Tianjin) Airport Logistic Property owner People’s 100 100 Development Co., Ltd. Republic of China

Mapletree Zhu Yuan (Beijing) Property owner People’s 100 100 Logistics Development Co., Ltd. Republic of China

Mapletree Emerald (ZILP) Limited Property owner People’s 100 100 Republic of China

Carrymell (M) Sdn. Bhd. Property owner Malaysia 100 100

Maypex Ventures Sdn. Bhd. Property owner Malaysia 100 100

Freesia Investments Ltd * Investment holding and Cayman Islands 100 100 development of properties for investment

Mapletree TY (HKSAR) Limited Development of properties Hong Kong SAR 100 - for investment 154 Notes to the Financial Statements For the financial year ended 31 March 2014

36. Listing of significant companies in the Group (continued)

Country of Effective incorporation/ interest held Name of companies Principal activities place of business by the Group 2014 2013 % % Mapletree Logistics Park Bac Ninh Property Owner Vietnam 100 100 Phase 1 (Vietnam) Co. Ltd.

Mapletree Logistics Park Phase 1 Property Owner Vietnam 100 100 (Vietnam) Co. Ltd.

Mapletree Logistics Park Phase 2 Property Owner Vietnam 100 100 (Vietnam) Co. Ltd.

Directly held by Mapletree Treasury Services Limited Mapletree Treasury Services Finance and treasury Hong Kong SAR 100 100 (HKSAR) Private Limited centre performing financial and treasury operations and activities for the holding and related companies within the Group

Directly held by Mapletree Management Consultancy Pte. Ltd. Beijing Mapletree Huaxin Management Fund management and People’s 100 100 Consultancy Co., Ltd. advisory services Republic of China

Guangzhou Mapletree Huaxin Enterprise Fund management and People’s 100 100 Management Consultancy Co., Ltd. advisory services Republic of China

Mapletree Vietnam Management Fund management and Vietnam 100 100 Consultancy Co., Ltd. advisory services

Mapletree Hong Kong Management Limited Fund management and Hong Kong SAR 100 100 advisory services

Mapletree Malaysia Management Sdn. Bhd. Fund management and Malaysia 100 100 advisory services

Mapletree Investments Japan Fund management and Japan 100 100 Kabushiki Kaisha* advisory services

Mapletree Korea Management Co., Ltd.* Management services South Korea 100 100

Directly held by Mapletree Property Services Pte. Ltd. Mapletree Property Management Pte. Ltd. Commercial and real Singapore 100 100 estate management Mapletree Investments Pte Ltd Annual Report 2013/2014 Financial Statements 155

36. Listing of significant companies in the Group (continued)

Country of Effective incorporation/ interest held Name of companies Principal activities place of business by the Group 2014 2013 % % Mapletree Facilities Services Pte. Ltd. Commercial and industrial Singapore 100 100 real estate management

Mapletree Commercial Property Commercial and real Singapore 100 100 Management Pte. Ltd. estate management

Mapletree Greater China Property Management services Hong Kong SAR 100 100 Management Limited

Mapletree Regional Services Pte. Ltd. Management services Singapore 100 100

Mapletree Project Management Pte. Ltd. Management services Singapore 100 100

Mapletree Management Services Japan Management services Japan 100 100 Kabushiki Kaisha*

Directly held by Mapletree Management Consultancy Pte. Ltd. and Mapletree Property Services Pte. Ltd. Mapletree India Management Services Fund management and India 100 100 Private Limited advisory services

* Not required to be audited under the legislations in the country of incorporation. # Cost of investment is less than $1,000.

37. Authorisation of financial statements

These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of Mapletree Investments Pte Ltd on 7 May 2014. 156 Our Offices

Singapore Hong Kong SAR South Korea Mapletree Investments Pte Ltd Mapletree Hong Kong Mapletree Korea Management Co., Ltd 10 Pasir Panjang Road #13-01, Management Limited 4F, The Exchange Seoul, Mapletree Business City, Suites 2001-2, 20/F, Great Eagle Centre, 45 Mugyo-Dong, Jung-gu, Singapore 117438 23 Harbour Road, Wanchai, Seoul, Korea, 100772 Tel: +65 6377 6111 Hong Kong Tel: +82 2 6742 3200 Fax: +65 6273 2753 Tel: +852 2918 9855 Fax: +82 2 6742 3230 Fax: +852 2918 9915 China Malaysia Shanghai Mapletree India Mapletree Malaysia Management Sdn. Management Co., Ltd Mapletree India Management Bhd. Unit 401, Silver Court, Services Private Limited A-18-5, 18th Floor, Northpoint Office, No. 228, South Xizang Road, Room 417, Regus Level 4, Mid Valley City, 1 Medan Syed Putra Utara, Huangpu District, Rectangle No.1, 59200 Kuala Lumpur, Malaysia Shanghai 200021, China Commercial Complex D4, Saket, Tel: +603 2283 3128 Tel: +86 21 2316 7677 New Delhi 110017, India Fax: +603 2283 6128 Fax: +86 21 2316 7700 Tel: +91 11 6654 4105 / 4102 Fax: +91 11 6654 4052 Vietnam Beijing Mapletree Huaxin Mapletree Vietnam Management Management Consultancy Co., Ltd Mapletree India Management Consultancy Co., Ltd Suite 5BCD1 Tower B, Gateway Plaza, Services Private Limited 18 L2-1 Tao Luc 5 Street (VSIP II), 18 Xiaguangli, East Third North Road, 3rd Floor, Envision Technology Center, Vietnam Singapore Industrial Park II, Chaoyang District, #119, EPIP Area Phase I, Binh Duong Industry - Service - Beijing 100027, China Whitefield, Bangalore 560066, Urban Complex, Tel: +86 10 5793 0333 Karnataka, India Hoa Phu Ward, Thu Dau Mot City, Fax: +86 10 5793 0300 Tel: +91 80 4939 0800 Binh Duong Province, Vietnam Fax: +91 80 4939 0700 Tel: +84 650 3543 688 Guangzhou Mapletree Huaxin Fax: +84 650 3767 678 Enterprise Management Japan Consultancy Co., Ltd Mapletree Investments Japan Unit 412-415, Block B, China Shine Plaza, Kabushiki Kaisha No. 3-15 Lin He Xi Road, Tian He District, Level 10, Omori Prime Building, Guangzhou 510610, China 6-21-12 Minamioi, Shinagawa-ku, Tel: +86 20 3719 9800 Tokyo 140-0013, Japan Fax: +86 20 3801 0334 Tel: +81 3 6459 6469 Fax: +81 3 3766 3133

Mapletree Investments Pte Ltd

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