Keppel Land Limited Value Talent Readiness Enterprise Execution SafetyAccountabilityIntegrity Can Do Value Readiness Collective Strength Innovation People-Centredness Preparedness Execution Talent Agility Collective Agility Integrity Strength Collective Strength EnterpriseFocus People-Centredness Accountability Safety Can Do Execution Preparedness Value Customer Focus Agility Enterprise Safety Enterprise Value Can DoReadiness Execution Harnessing Strengths Preparedness ValueQualityCollective Strength Accountability Can Do Can Do Talent People-Centredness Agility Accountability Can DoValue Innovation Enterprise Talent Customer Focus Collective Strength Enterprise Talent Innovation Readiness Report to Shareholders 2015 CollectiveSustainabili Strength Customer Focus Readiness Enterprisety Readiness InnovationExecution Preparedness Talent People-Centredness Enterprise Collective Can DoValueInnovation Strength Preparedness AccountabilityExecution Innovation Collective Strength People-Centredness Talent Value Readiness Talent Accountability Preparedness Can Safety Do Agility ValueDiscipline Talent Integrity Collective Strength Enterprise Innovation Execution Can Do Readiness AgilityValue Customer Focus Harnessing Strengths Keppel Land Limited Report to Shareholders 2015 (Incorporated in the Republic of Singapore) 230 Victoria Street #15-05 Bugis Junction Towers Singapore 188024 Tel: (65) 6338 8111 Fax: (65) 6337 7168 www.keppelland.com Co Reg No: 189000001G Vision Operating Principles A leading real estate 1 Best value propositions company, shaping the to customers. best for future generations. 2 Tapping and developing best talents from our global workforce. Mission 3 Cultivating a spirit of Guided by our operating innovation and enterprise. principles and core values, 4 Executing our projects well. we will create value for all 5 Being financially disciplined to stakeholders through innovative earn best risk-adjusted returns. Harnessing real estate solutions. 6 Clarity of focus and operating within our core competence. Strengths 7 Being prepared for the future. The Keppel Group Overview 01 Key Figures for 2015 harnesses and synergises 02 Group Financial Highlights the distinctive strengths 03 Corporate Profile 04 Chairman’s Statement of its multi businesses to 10 Interview with the CEO 15 Board of Directors capture opportunities arising 20 Senior Management from the global demand 22 Key Personnel 26 Awards and Accolades for energy, sustainable 28 Corporate Milestones urbanisation and connectivity. 29 Corporate Governance 35 Risk Management Our strong culture and 38 Harnessing Strengths enduring values drive our 40 Special Feature people to strive for execution Operations and Market Review 42 Overview excellence and operational 44 Singapore efficiency. With financial 48 Property Fund Management 52 Retail Management discipline and sharp focus 54 Hospitality Management on optimising returns, 56 China 64 Vietnam we will seize opportunities 68 Indonesia 70 The Philippines, Myanmar as well as innovate solutions 71 United States, United Kingdom and services to build a 72 India, Sri Lanka 73 Malaysia, Thailand long-term and competitive 74 International Network position and capture 77 Property Portfolio sustainable returns for our stakeholders. FSC insert by printer Overview / Operations and Market Review 01 Key Figures for 2015 Key Figures for 2015 Revenue Return on Equity $1.6b 18.9% Revenue rose by 6.8% year-on-year Return on equity is one of the highest amongst to $1.6 billion. Asia’s leading property developers at 18.9% per annum over 10 years, from 2006 to 2015. Total Assets New Commercial Space Under Development $14.9b 630,000sm Total assets grew from $14.6 billion New commercial properties under to $14.9 billion year-on-year. development overseas. Volunteerism Safety Training 5,095hrs 34,000 A total of 5,095 volunteer hours were clocked by 34,000 workers trained to-date at Keppel Land’s staff for corporate social responsibility activities Safety Awareness Centres in Vietnam and Malaysia. in Singapore and overseas. 02 Keppel Land Limited Report to Shareholders 2015 Group Financial Highlights 2015 2014 2013 2012 2011 For the year ($’000) Sales 1,598,260 1,497,177 1,461,048 938,856 948,974 Pre-tax profit Before fair value gain on investment properties/impairment 473,240 733,111 669,712 613,813 885,703 After fair value gain on investment properties/impairment 728,855 953,325 1,000,773 987,308 1,476,993 Net profit 564,076 752,486 885,892 838,368 1,374,682 Funds from/(used in) operations 495,565 200,443 (1,308,680) (612,268) (892,199) Capital expenditure on investment properties and fixed assets (379,399) (81,003) (87,692) (37,239) (132,933) At year-end ($’000) Fixed assets and investment properties 2,811,783 1,577,281 1,894,051 1,590,744 837,784 Investments 3,494,114 3,028,776 3,040,799 2,709,394 2,263,559 Non-current assets 311,487 256,851 761,409 775,886 646,487 Net current assets (Note 1) 6,062,058 7,767,480 6,183,482 4,784,231 4,693,077 Deferred taxation (229,623) (216,261) (182,018) (150,544) (32,500) Other non-current liabilities (22,236) – – – – Assets employed 12,427,583 12,414,127 11,697,723 9,709,711 8,408,407 Shareholders' equity 8,143,153 7,655,537 6,989,419 6,169,141 5,575,314 Non-controlling interests 489,443 489,401 496,168 477,314 295,680 Long-term borrowings 3,646,982 3,147,338 3,869,749 2,348,613 2,336,200 Short-term borrowings 83,775 1,055,670 283,275 714,643 201,213 Loan from non-controlling shareholders 64,230 66,181 59,112 – – Total funds invested 12,427,583 12,414,127 11,697,723 9,709,711 8,408,407 Financial ratios Return on equity (%) After taxation but before fair value gain on investment properties/impairment 4.4 7.9 9.3 8.4 18.4 After taxation and fair value gain on investment properties/impairment 7.1 10.7 14.1 14.8 32.1 Interest cover (times) (Note 2) 5.2 8.4 8.9 12.3 16.7 Net debt-equity ratio (times) (Note 3) 0.24 0.20 0.38 0.22 0.10 Employees (Note 4) Number (average) 4,150 4,071 4,207 4,107 3,038 Wages and salaries ($’000) 212,453 195,940 176,189 144,212 148,547 Pre-tax profit per employee ($’000) 63 111 105 58 234 Notes: 1. In arriving at net current assets, short-term borrowings have been excluded. 2. In the calculation of interest cover, fair value gain on investment properties/impairment has been excluded. Net interest cost, comprising net interest expense taken to the profit and loss account and interest capitalised under investment properties, properties held for sale and fixed assets, has been used. 3. In the calculation of the net debt-equity ratio, net debt includes borrowings net of cash and equity includes non-controlling interests in subsidiaries. 4. Wages and salaries include amounts capitalised under investment properties and properties held for sale. In the calculation of pre-tax profit per employee, the share of results of associates and joint ventures, and fair value gain on investment properties/impairment have been excluded. Overview / Operations and Market Review 03 Corporate Profile Corporate Profile Keppel Land is the property as Marina Bay Financial Centre iconic waterfront residences 01 Through its arm of the Keppel Group, one of and Ocean Financial Centre. at Keppel Bay and Marina Bay unwavering focus on sustaining growth in its Singapore’s largest multinational in Singapore. The Company businesses, empowering groups with key businesses in The Company is committed to has also ventured into the lives of its people, and offshore and marine, property, grow its commercial portfolio United States with a residential nurturing communities wherever it operates, infrastructure and investments. in key Asian cities. Its portfolio development in Manhattan, Keppel Land continues includes Seasons City in the New York. to shape the future One of Asia’s premier property Sino-Singapore Tianjin Eco-City, for the benefit of tomorrow’s generation. companies, Keppel Land is Life Hub @ Jinqiao, Park Avenue With a pipeline of about recognised for its sterling Central in Shanghai, China, 70,000 homes in Singapore portfolio of award-winning Saigon Centre in Ho Chi Minh City, and overseas as well as an residential developments and Vietnam, as well as International increasing commercial presence investment-grade commercial Financial Centre Jakarta in in the region, Keppel Land is properties as well as high Indonesia. The Company plans well-positioned to meet the standards of corporate to expand the SM-KL Project growing demands for quality governance and transparency. in the Philippines and residential, office and Keppel Land was privatised develop Junction City Tower mixed-use developments. and delisted from the Singapore in Yangon, Myanmar. Stock Exchange with effect An established property fund from 16 July 2015. A selective Beyond Asia, Keppel Land has manager, Keppel Land has capital reduction exercise to acquired an office building in two property fund management cancel all outstanding shares London, the United Kingdom. vehicles, Keppel REIT Management held by minority shareholders To strengthen the Company’s Limited, the manager of of Keppel Land was approved retail capabilities, Keppel Land Keppel REIT, a pan-Asian at an extraordinary general has acquired a 75% stake in commercial real estate meeting on 13 April 2016 and retail management company investment trust, and Alpha the court on 5 May 2016. Array Real Estate, which has Investment Partners (Alpha). been renamed Keppel Land As at 31 December 2015, The Company is geographically Retail Management. Keppel REIT and Alpha’s total diversified in Asia, with Singapore assets under management have and China as its core markets as Keppel Land is Asia’s premier grown to $20.5 billion when fully well as Vietnam and Indonesia as home developer with world-class leveraged and invested. its growth markets. Keppel Land focuses on a two-pronged strategy of property development for sale 01 and property fund management.