INFORMATION MEMORANDUM DATED 19 JUNE 2003

S$200,000,000 IN PRINCIPAL AMOUNT OF 2.90 PER CENT. BONDS DUE 2023

Approval in-principle has been granted by the Exchange Securities Trading Limited (``SGX-ST'') for the listingof, and quotation for, all the bonds representingS$200,000,000 in principal amount of 2.90 per cent. bonds due 2023 (the ``Bonds'') of the Land Transport Authority of Singapore (the ``Authority'', ``Issuer'' or ``LTA'') on the Of®cial List of the SGX-ST. The Bonds will be denominated in S$10,000 each and will be traded on the SGX-ST in board lot size of S$250,000. The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports contained in this Information Memorandum. Admission to the Of®cial List of SGX-ST is not to be taken as an indication of the merits of LTA, its subsidiaries or the Bonds.

Interest on the Bonds will be payable in Singapore dollars semi-annually in arrear falling on 19 June and 19 December in each year, commencingon 19 December 2003 to (and including)19 June 2023. Unless previously redeemed or purchased and cancelled as provided under the terms and conditions of the Bonds, the Bonds will be redeemed in Singapore dollars on 19 June 2023.

This Information Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore (``MAS'') under the Securities and Futures Act, Chapter 289 of Singapore (the ``SFA''). Until the date falling six (6) months from the date of issue of the Bonds (the ``Expiry Date''), the Bonds may not be offered or sold or be made the subject of an invitation for subscription or purchase nor may this Information Memorandum or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Bonds be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person speci®ed in Section 274 of the SFA, (b) to sophisticated investors, and in accordance with the conditions, speci®ed in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provisions of the SFA. After the Expiry Date, the Bonds may be offered or sold or made the subject of an invitation for subscription or purchase to the public or any member of the public in Singapore provided they continue to be listed or quoted on the SGX-ST. Subject to the approval of the SGX-ST (the ``SGX-ST Approval'') being®rst obtained (and where a conditional approval is given by the SGX-ST, the condition(s) imposed thereby must be acceptable to the Issuer at its sole discretion), the board lot size of the Bonds may be reduced from S$250,000 to S$10,000 after the Expiry Date (the ``Board Lot Size Reduction''). The Issuer and/or any of its respective directors, members, of®cers, employees or agents shall not be held responsible or liable for any loss, liability, cost, claim, action, demand, expense or damage suffered or incurred by any person in the event that the Board Lot Size Reduction does not or fails to occur or materialise after the Expiry Date (whether as a result of the Issuer beingunable to ful®l the conditions under the SGX-ST Approval or otherwise).

The Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended (the ``Securities Act''). Subject to certain exceptions, the Bonds may not be offered, sold or delivered within the United States or to, or for the account or bene®t of, U.S. persons. Terms used in this paragraph have the same meaning as set out in Regulation S issued pursuant to the Securities Act.

The Bonds are subject to United States tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by the United States tax regulations. Terms used in this paragraph have the meanings given to them by the United States Internal Revenue Code and regulations thereunder.

The attention of the recipients of this Information Memorandum is drawn to the restrictions on subscription, purchase and resale of the Bonds as set out in the section on ``SUBSCRIPTION, PURCHASE AND DISTRIBUTION'' on page 38 of this Information Memorandum.

JOINT LEAD MANAGERS GENERAL

This Information Memorandum contains certain information with regards to the Issuer, its subsidiaries and the Bonds. The Issuer accepts full responsibility for the accuracy of the information which it has supplied for the purpose of this Information Memorandum and con®rms that, having made all reasonable enquiries, to the best of its knowledge and belief, such information contained herein is true and accurate in all material respects as at the date hereof. However, each of the Issuer and Barclays Bank PLC, Singapore Branch and Standard Chartered Bank (the ``Joint Lead Managers'' or each a ``Joint Lead Manager'') makes no representation or warranty as to the completeness of the information contained in this Information Memorandum which could make any of the information contained in this Information Memorandum incorrect in any material respect. No person is authorised to give any information or make any representation not contained in and/or not consistent with this Information Memorandum in connection with the Bonds and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of LTA or the Joint Lead Managers. Neither the delivery of this Information Memorandum (or any part hereof), the issue of the Bonds nor any subscription for or purchase or sale of the Bonds made in connection therewith shall under any circumstances create any implication that there has been no change in the information contained herein since the date hereof or that there has been no change in the business or ®nancial position of the Issuer or its subsidiaries since the date hereof. Nothing contained herein is, or may be relied upon as, a promise, representation or covenant as to the future performance or policies of the Issuer or its subsidiaries.

Neither this Information Memorandum nor any other document or information (or any part thereof) delivered or supplied under or in relation to the Bonds is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by LTA or the Joint Lead Managers that any recipient of this Information Memorandum or such other document or information (or such part thereof) should subscribe for or purchase any of the Bonds. Each investor contemplating subscribing for or purchasing any of the Bonds should determine for itself the relevance of the information contained in this Information Memorandum and any other such document or information (or such part thereof), and obtain its own independent legal or other advice thereon, and its investment should be, and shall be deemed to be, based upon its own independent investigation of the ®nancial condition and affairs, and its own appraisal of the credit worthiness, of the Issuer and its subsidiaries. Notwithstanding anything herein contained, none of the Issuer, the Joint Lead Managers or any of their respective directors, of®cers, employees or agents shall be held responsible for any loss or damage suffered or incurred by the recipients of this Information Memorandum or such other document or information (or any part thereof) as a result of or arising from anything expressly or implicitly contained in or referred to in this Information Memorandum or such other document or information (or such part thereof) and the same shall not constitute a ground for rescission of any purchase or acquisition of any of the Bonds by a recipient of this Information Memorandum or such other document or information (or such part thereof).

This Information Memorandum has not been registered as a prospectus with the MAS under the SFA. Prior to the Expiry Date, the Bonds may not be offered or sold or be made the subject of an invitation for subscription or purchase nor may this Information Memorandum or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Bonds be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person speci®ed in Section 274 of the SFA, (b) to sophisticated investors, and in accordance with the conditions, speci®ed in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provisions of the SFA. After the Expiry Date, the Bonds may be offered or sold or made the subject of an invitation for subscription or purchase to the public or any member of the public in Singapore provided they continue to be listed or quoted on the SGX-ST. Subject to the SGX-ST Approval being ®rst obtained (and where a conditional approval is given by the SGX-ST, the condition(s) imposed thereby must be acceptable to the Issuer at its sole discretion), the board lot size of the Bonds may be reduced from S$250,000 to S$10,000 after the Expiry Date. The Issuer and/or any of its respective directors, members, of®cers, employees or agents shall not be held responsible or liable for any loss, liability, cost, claim, action, demand, expense or damage suffered or incurred by any person in the event that the Board Lot Size Reduction does not or fails to occur

1 GENERAL or materialise after the Expiry Date (whether as a result of the Issuer being unable to ful®l the conditions under the SGX-ST Approval or otherwise).

Pursuant to the Companies (Cancellation) Noti®cation 2003, as of 1 April 2003, the Issuer's status as a public authority for the purpose of the Companies Act, Chapter 50 of Singapore, has been cancelled.

Any subscription, purchase or acquisition of the Bonds is in all respects conditional on the satisfaction of certain conditions set out in the Subscription Agreement (as de®ned herein), the issue of the Bonds by the Issuer pursuant to the Subscription Agreement and the Subscription Agreement not being terminated for any reason whatsoever. Any offer, invitation to offer or agreement made in connection with the subscription, purchase or acquisition of the Bonds or pursuant to this Information Memorandum shall (without liability or responsibility on the part of the Issuer or any of the Joint Lead Managers) lapse and cease to have any effect if (for any reason whatsoever) the Bonds are not issued by the Issuer pursuant to the Subscription Agreement.

Neither this Information Memorandum nor any other document or information (or any part thereof) delivered or supplied under or in relation to the Bonds shall be deemed to constitute an offer of, or an invitation by or on behalf of LTA or the Joint Lead Managers to subscribe for or purchase, any of the Bonds in any jurisdiction in which it is unlawful for such person to make such an offer or invitation. Neither this Information Memorandum nor any other document or information (or any part thereof) delivered or supplied may be used in connection with an offer or solicitation by any person in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. The distribution and publication of this Information Memorandum or any such other document or information (or any part thereof) and each offering of the Bonds in certain jurisdictions may be restricted by law. Persons who distribute or publish this Information Memorandum or any such other document or information (or any part thereof) or into whose possession this Information Memorandum or any such other document or information (or any part thereof) comes are required to inform themselves about and observe any such restrictions and all applicable laws, orders, rules and regulations.

The Bonds have not been and will not be registered under the Securities Act. Subject to certain exceptions, the Bonds may not be offered, sold or delivered within the United States or to, or for the account or bene®t of, U.S. persons. Terms used in this paragraph have the same meaning as set out in Regulation S issued pursuant to the Securities Act.

The Bonds are subject to United States tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by the United States tax regulations. Terms used in this paragraph have the meanings given to them by the United States Internal Revenue Code and regulations thereunder.

The attention of the recipients of this Information Memorandum is drawn to the restrictions on subscription, purchase and resale of the Bonds as set out in the section on ``SUBSCRIPTION, PURCHASE AND DISTRIBUTION'' on page 38 of this Information Memorandum.

Any statement contained in this Information Memorandum shall be deemed to be modi®ed or superseded for the purpose of this Information Memorandum to the extent that a statement contained in subsequent document that is deemed to be incorporated by reference herein modi®es or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modi®ed or superseded shall not be deemed, except as so modi®ed or superseded, to constitute a part of this Information Memorandum. Copies of all documents deemed incorporated by reference herein are available for inspection at the speci®ed of®ce of the Paying Agent.

It is recommended that persons proposing to subscribe for or purchase any of the Bonds consult their own legal and other professional advisers before subscribing, purchasing or acquiring the Bonds.

2 TABLE OF CONTENTS

Page DEFINITIONS...... 4

SUMMARY OF TERMS AND CONDITIONS OF THE BONDS ...... 6

TERMS AND CONDITIONS OF THE BONDS ...... 9

LAND TRANSPORT AUTHORITY OF SINGAPORE HISTORY AND BUSINESS ...... 18

MISSION ...... 18 STRATEGY ...... 19

MAJOR PROJECTS UNDERTAKEN TO BUILD A COMPREHENSIVE LAND TRANSPORT NETWORK ...... 20

FINANCING OF LAND TRANSPORT AUTHORITY OF SINGAPORE ...... 26 USE OF PROCEEDS ...... 27

FINANCIAL HIGHLIGHTS ...... 28 GENERAL AND STATUTORY INFORMATION ...... 30

CLEARING AND SETTLEMENT ...... 34

TAXATION ...... 35

SUBSCRIPTION, PURCHASE AND DISTRIBUTION ...... 38

FINANCIAL INFORMATION OF THE AUTHORITY

APPENDIX I Ð UNAUDITED FINANCIAL STATEMENTS OF LAND TRANSPORT AUTHORITY OF SINGAPORE FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2002 ...... 40

APPENDIX II Ð AUDITED FINANCIAL STATEMENTS OF LAND TRANSPORT AUTHORITY OF SINGAPORE FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 ...... 60

3 DEFINITIONS

The following de®nitions have, where appropriate or unless the context otherwise requires, been used in this Information Memorandum:

``Agency Agreement'' : The Agency Agreement dated 17 June 2003 between LTA and SCB, as ®scal agent and paying agent

``Authority'', ``Issuer'' or : Land Transport Authority of Singapore ``LTA''

``Barclays'' : Barclays Bank PLC, Singapore Branch

``Board'' : The members of the Authority under the LTA Act

``Bonds'' : The S$200,000,000 2.90 per cent. bonds due 2023 to be issued by LTA

``CDP'' or ``Depository'' : The Central Depository (Pte) Limited

``Companies Act'' : Companies Act, Chapter 50 of Singapore

``Fiscal Agent'' : SCB

``Government'' : The Government of Singapore

``Income TaxAct'' or ``ITA'' : Income Tax Act, Chapter 134 of Singapore

``Issue'' : Issue by the Authority of S$200,000,000 2.90 per cent. bonds due 2023

``Joint Lead Managers'' : Barclays and SCB and each a ``Joint Lead Manager''

``LRT'' : Light Rapid Transit

``LTA Act'' : Land Transport Authority of Singapore Act, Chapter 158A of Singapore

``MRT'' : Mass Rapid Transit

``Paying Agent'' : SCB

``RTS'' : Rapid transit system

``SCB'' : Standard Chartered Bank

``Securities Account'' : A securities account maintained by a depositor of securities with CDP(but does not include securities sub-accounts)

``Securities Act'' : Securities Act of 1933 of the U.S., as amended

``SGX-ST'' : Singapore Exchange Securities Trading Limited

``Singapore'' : Republic of Singapore

``Subscription Agreement'' : The subscription agreement dated 17 June 2003 between LTA and the Joint Lead Managers in relation to the subscription of the Bonds

4 DEFINITIONS

``U.S.'' or ``United States'' : United States of America

``ha'' : Hectares

``m'' : Metres

``km'' : Kilometres

``$'' or ``S$'' : Singapore dollars

``%'' or ``per cent.'' : Per centum or percentage

Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include feminine and neuter genders and vice versa. References to persons shall, where applicable, include corporations. Any reference to a time or day in this Information Memorandum shall be a reference to Singapore time or day respectively, unless otherwise stated.

5 SUMMARY OF TERMS AND CONDITIONS OF THE BONDS

The following summary is derived from, and should be read in conjunction with, the full text of this Information Memorandum:

Terms of the Bonds Issuer : Land Transport Authority of Singapore.

Joint Lead Managers : Barclays Bank PLC, Singapore Branch and Standard Chartered Bank.

Principal Amount of Bonds : S$200,000,000.

Issue Price : 100% of the principal amount of the Bonds.

Method of Issue : By way of placement.

Redemption/Maturity : Unless previously redeemed or purchased and cancelled, the Bonds will be redeemed at their principal amount on 19 June 2023.

Coupon Rate : 2.90% per annum, payable semi-annually in arrear.

Interest Rate Day Basis : Actual/365.

Issue Date : 19 June 2003.

Form and Denomination : The Bonds will be in bearer form and will be represented by a permanent global bond (the ``Permanent Global Bond'') without interest coupons, which will be deposited with the Depository on or about 19 June 2003. Interests in the Permanent Global Bond will be exchangeable for Bonds in de®nitive form in the denomination of S$10,000 each, with coupons (the ``Coupons'') attached, only in certain limited circumstances as set out therein.

Status of the Bonds : The Bonds and the Coupons constitute direct, unconditional and unsecured obligations of the Issuer and shall at all times rank pari passu and without preference among themselves. The payment obligations of the Issuer under the Bonds and the Coupons shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer.

Custody of the Bonds : The Bonds will be cleared through CDPand will be kept with CDPas authorised depository.

Listing : The Bonds will be admitted to and listed on the Of®cial List of the SGX-ST, subject to all necessary approvals having been obtained.

6 SUMMARY OF TERMS AND CONDITIONS OF THE BONDS

Taxation : All payments in respect of the Bonds and the Coupons by the Issuer shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Singapore or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In such event, the Issuer shall pay such additional amounts as will result in the receipt by the holders of the Bonds and the holders of the Coupons of such amounts as would have been received by them had no such deduction or withholding been required, except that no such additional amounts shall be payable in respect of any Bond or Coupon presented for payment: (a) by or on behalf of a holder who is subject to such taxes, duties, assessments or governmental charges by reason of his being connected with Singapore otherwise than by reason only of the holding of such Bond or Coupon or the receipt of any sums due in respect of such Bond or Coupon (including without limitation, the holder being (i) a resident in Singapore or (ii) a non-resident of Singapore who purchases such Bond using funds from its Singapore operations); or (b) more than thirty (30) days after the Relevant Date (as de®ned in the terms and conditions of the Bonds) except to the extent that the holder thereof would have been entitled to such additional amounts on presenting the same for payment on the last day of such period of thirty (30) days.

Redemption for Taxation : The Bonds may be redeemed at the option of the Issuer in Reasons whole, but not in part, at any time on giving not less than thirty (30) nor more than sixty (60) days' notice to the Bondholders (which notice shall be irrevocable), at their principal amount (together with interest accrued to (but excluding) the date ®xed for redemption), if (a) the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 6 of the terms and conditions of the Bonds, or increase the payment of such additional amounts, as a result of any change in, or amendment to, the laws (or any regulations, rulings or other administrative pronouncements promulgated thereunder) of Singapore or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or of®cial interpretation of such laws, regulations, rulings or other administrative pronouncements, which change or amendment is made public on or after the date of issue of the Bonds pursuant to the Agency Agreement and (b) such obligations cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than ninety (90) days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Bonds then due.

7 SUMMARY OF TERMS AND CONDITIONS OF THE BONDS

Bondholders' Purchase : If, as a result of any amendment to the LTA Act or any other Option statute, the Issuer ceases to be a statutory board or a body established by written law to discharge functions of a public nature or the Bonds cease to be the obligations of the Issuer and any such event would materially and adversely affect the interests of the Bondholders, the Issuer will, at the option of the holder of any Bond, purchase such Bond at its principal amount (together with interest accrued to (but excluding) the date ®xed for purchase) on the date falling thirty (30) days from the date of exercise by such holder of such option.

Fiscal Agent and Paying : Standard Chartered Bank. Agent

Selling Restrictions : For a description of certain restrictions on offers, sales and deliveries of the Bonds and the distribution of offering material relating to the Bonds, see the section on ``SUBSCRIPTION, PURCHASE AND DISTRIBUTION'' below.

Governing Law : The laws of Singapore.

Jurisdiction : Exclusive jurisdiction of the courts of Singapore.

8 TERMS AND CONDITIONS OF THE BONDS

The S$200,000,000 in principal amount of 2.90 per cent. bonds due 2023 (the ``Bonds'') of the Land Transport Authority of Singapore (the ``LTA'' or the ``Issuer'') are constituted by a Fiscal Agency Agreement (the ``Agency Agreement'') dated 17 June 2003 made between (1) the LTA, as issuer, (2) SCB, as ®scal agent (the ``Fiscal Agent'') and (3) SCB, as paying agent (the ``Paying Agent''). The Bonds are issued with the bene®t of a deed of covenant (the ``Deed of Covenant'') dated 17 June 2003 executed by the Issuer by way of a deed poll in relation to the Bonds. The statements of these terms and conditions (the ``Conditions'') are summaries of, and are subject to, the detailed provisions of the Agency Agreement. The Bondholders (as de®ned below) and the holders of the Coupons (the ``Couponholders'') are entitled to the bene®t of, are bound by and are deemed to have notice of, all the provisions of the Agency Agreement applicable to them.

Copies of the Agency Agreement and the Deed of Covenant are available for inspection at the speci®ed of®ces of the Paying Agent.

1. Form, Denomination and Title (a) Form and Denomination The Bonds are serially numbered and in bearer form in the denomination of S$10,000 each with Coupons attached on issue.

(b) Title (i) Title to the Bonds and the Coupons passes by delivery. Except as ordered by a court of competent jurisdiction or as required by law, the holder of any Bond or Coupon shall be deemed to be and may be treated as the absolute owner of such Bond or, of such Coupon, as the case may be, for the purpose of receiving payment thereof or on account thereof and for all other purposes, whether or not such Bond or Coupon shall be overdue and notwithstanding any notice of ownership, theft or loss thereof or any writing on it made by anyone, and no person shall be liable for so treating the holder. (ii) For so long as any of the Bonds is represented by the Global Bond and the Global Bond is held by The Central Depository (Pte) Limited (the ``Depository''), each person who is for the time being shown in the records of the Depository as the holder of a particular principal amount of such Bonds (in which regard any certi®cate or other document issued by the Depository as to the principal amount of such Bonds standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Fiscal Agent, the Paying Agent and all other agents of the Issuer as the holder of such principal amount of Bonds for all purposes other than with respect to the payment of principal, interest and any other amounts in respect of the Bonds, the right to which shall be vested, as against the Issuer, solely in the bearer of the Global Bond. Until the whole of the Global Bond is exchanged for De®nitive Bonds, the holder of the Global Bond shall in all respects be entitled to the same bene®ts as if it were the holder of De®nitive Bonds for which the Global Bond may be exchanged as if such De®nitive Bonds had been issued on the Issue Date (as de®ned in the Global Bond), except that the holder of the Global Bond shall not be entitled to receive any payment thereon except as provided therein. No person shall be entitled to receive any payment in respect of the Bonds represented by the Global Bond that falls due on or after the Exchange Date (as de®ned in the Global Bond) unless, upon due presentation of the Global Bond for exchange, delivery of De®nitive Bonds is improperly withheld or refused by or on behalf of the Issuer (and the expressions ``Bondholder'' and ``holder of Bonds'' and related expressions shall be construed accordingly). Bonds which are represented by the Global Bond will be transferable only in accordance with the rules and procedures for the time being of the Depository.

9 TERMS AND CONDITIONS OF THE BONDS

(iii) In these Conditions, ``Bondholder'' means the bearer of any Bond and ``holder'' means the bearer of any Bond or Coupon. (iv) Words and expressions de®ned in the Agency Agreement shall have the same meanings where used in these Conditions, unless the context otherwise requires or unless otherwise stated.

2. Status The Bonds and the Coupons constitute direct, unconditional and unsecured obligations of the Issuer and shall at all times rank pari passu and without preference among themselves. The payment obligations of the Issuer under the Bonds and Coupons shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer.

3. Interest The Bonds bear interest as from 19 June 2003 at the rate of 2.90 per cent. per annum payable semi-annually in arrear on 19 June and 19 December in each year. Each Bond will cease to bear interest from the due date for redemption unless, upon due presentation, payment of the principal is improperly withheld or refused. In such event, it shall continue to bear interest at the rate as aforesaid (as well after as before any judgement) until (but excluding) the Relevant Date (as de®ned below). If interest is required to be calculated for a period of less than one year, it will be calculated on the basis of a 365-day year and the actual number of days elapsed.

As used in these Conditions, ``Relevant Date'' in respect of any Bond or Coupon means the date on which payment in respect thereof ®rst becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date falling seven (7) days after that on which notice is duly given to the Bondholders in accordance with Condition 11 that, upon further presentation of the Bond or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon presentation, and references to ``principal'' shall be deemed to include all amounts in the nature of principal payable pursuant to Condition 4, ``interest'' shall be deemed to include all amounts payable pursuant to Condition 3 and any reference to ``principal'' and/or ``interest'' shall be deemed to include any additional amounts which may be payable under these Conditions.

4. Redemption and Purchase (a) Final Redemption Unless previously redeemed or purchased and cancelled as provided below, the Bonds will be redeemed at their principal amount on 19 June 2023 (the ``Final Redemption Date'').

(b) Purchase at the Option of Bondholders If, as a result of any amendment to the LTA Act or any other statute, the Issuer ceases to be a statutory board or a body established by written law to discharge functions of a public nature or the Bonds cease to be the obligations of the Issuer and any such event would materially and adversely affect the interests of the Bondholders, the Issuer will, at the option of the holder of any Bond, purchase such Bond at its principal amount (together with interest accrued to (but excluding) the date ®xed for purchase) on the date falling thirty (30) days from the date of the exercise by the holder of such option. The Issuer will give prompt notice to the Bondholders of the occurrence of the event referred to in this Condition 4(b) in accordance with Condition 11. To exercise such option, a Bondholder shall deposit any Bonds to be purchased with any Paying Agent at its speci®ed of®ce together with all Coupons relating to such Bonds which mature after the date ®xed for

10 TERMS AND CONDITIONS OF THE BONDS

purchase, together with a duly completed option exercise notice in the form obtainable from any Paying Agent or the Issuer (as applicable), no later than ten (10) Business Days from the date of the Issuer's notice to the Bondholders of the occurrence of such event (or such longer period, not exceeding thirty (30) Business Days, as the Issuer may notify to the Bondholders in such notice). Any Bonds so deposited may not be withdrawn. Such Bonds may be held, resold or surrendered to any Paying Agent for cancellation. The Bonds so purchased, while held by or on behalf of the Issuer, shall not entitle the holder to vote at any meetings of the Bondholders and shall not be deemed to be outstanding for the purposes of calculating quorum at meetings of the Bondholders or for the purposes of Conditions 8 and 12.

(c) Redemption for Taxation Reasons The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time on giving not less than thirty (30) nor more than sixty (60) days' notice to the Bondholders (which notice shall be irrevocable), at their principal amount (together with interest accrued to (but excluding) the date ®xed for redemption), if (i) the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 6, or increase the payment of such additional amounts, as a result of any change in, or amendment to, the laws (or any regulations, rulings or other administrative pronouncements promulgated thereunder) of Singapore or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or of®cial interpretation of such laws, regulations, rulings or other administrative pronouncements, which change or amendment is made public on or after the date of issue of the Bonds pursuant to the Agency Agreement and (ii) such obligations cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than ninety (90) days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Bonds then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Fiscal Agent a certi®cate signed by a duly authorised of®cer of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and an opinion of independent legal or tax advisers of recognised standing to the effect that the Issuer has or is likely to become obliged to pay such additional amounts as a result of such change or amendment.

(d) Purchases The Issuer and any of its subsidiaries may at any time purchase Bonds at any price in the open market or otherwise, provided that in any such case such purchase is in compliance with all relevant laws, regulations and directives.

The Bonds so purchased by the Issuer or any of its subsidiaries may be surrendered by the purchaser through the Issuer to the Fiscal Agent or any Paying Agent for cancellation or may at the option of the Issuer or its relevant subsidiary be retained for its own account, held, resold or otherwise dealt with.

For the purposes of these Conditions, ``directive'' includes any present or future directive, regulation, requirement, rule or credit restraint programme of any relevant agency, authority, central bank department, government, legislative, minister, ministry, of®cial, public or statutory corporation, self-regulating organisation, or stock exchange.

11 TERMS AND CONDITIONS OF THE BONDS

(e) Cancellation All Bonds purchased by or on behalf of the Issuer or any of its subsidiaries may be surrendered for cancellation, by surrendering each such Bond together with any relative unmatured Coupons appertaining thereto to the Fiscal Agent at its speci®ed of®ce and, if so surrendered, shall, together with all Bonds redeemed, be cancelled forthwith (together with all unmatured Coupons attached thereto or surrendered therewith). Any Bonds so surrendered for cancellation may not be reissued or resold.

5. Payments (a) Principal and Interest Payments of principal and interest will, subject as mentioned below, be made against presentation and surrender of the relevant Bonds or Coupons, as the case may be, at the speci®ed of®ce of any Paying Agent by a Singapore dollar cheque drawn on, or, at the option of the holders, by transfer to a Singapore dollar account maintained by the payee with a bank in Singapore.

(b) Payments subject to law, etc. All payments are subject in all cases to any applicable ®scal or other laws, regulations and directives, but without prejudice to the provisions of Condition 6. No commission or expenses shall be charged to the Bondholders or Couponholders in respect of such payments.

(c) Appointment of Agents The Fiscal Agent and the Paying Agent initially appointed by the Issuer and their respective speci®ed of®ces are listed below. The Issuer reserves the right at any time to vary or terminate the appointment of the Fiscal Agent or any Paying Agent and to appoint additional or other Paying Agents, provided that it will at all times maintain (i) a Fiscal Agent and (ii) a Paying Agent having a speci®ed of®ce in Singapore.

Notice of any such change or any change of any speci®ed of®ce will promptly be given to the Bondholders in accordance with Condition 11.

(d) Unmatured Coupons (i) Each Bond should be surrendered for payment together with all relative unmatured Coupons (if any) appertaining thereto, failing which an amount equal to the face value of each missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the amount of such missing unmatured Coupon which the sum of principal so paid bears to the total principal due) will be deducted from the principal amount due for payment. Any amount so deducted will be paid in the manner mentioned above against surrender of such missing Coupon within a period of ®ve (5) years from the Relevant Date for the payment of such principal (whether or not such Coupon has become void pursuant to Condition 7). (ii) If the due date for redemption or repayment of any Bond is not a due date for payment of interest, interest accrued from the preceding due date for payment of interest, shall only be payable against presentation (and surrender if appropriate) of the relevant Bond representing it, as the case may be.

12 TERMS AND CONDITIONS OF THE BONDS

(e) Default Interest If on or after the due date for payment of any sum in respect of the Bonds or as the case may be, the Coupons payment of all or any part of such sum shall not be made against due presentation of the Bonds or, as the case may be, the Coupons, the Issuer shall pay interest on the amount so unpaid from such due date up to (but excluding) the day of actual receipt by the relevant Bondholders or, as the case may be, Couponholders (as well after as before judgment) at a rate per annum determined by the Fiscal Agent to be equal to one per cent. (1%) per annum above the rate of interest payable on the Bonds as provided under Condition 3. So long as the default continues then such rate shall be recalculated on the same basis at intervals of such duration as the Fiscal Agent may select, save that the amount of unpaid interest at the above rate accruing during the preceding such period shall be added to the amount in respect of which the Issuer is in default and itself bear interest accordingly. Interest at the rate(s) determined in accordance with this paragraph shall be calculated on a 365-day year and the actual number of days elapsed, shall accrue on a daily basis and shall be immediately due and payable by the Issuer.

(f) Non-Business Days If any date for the payment in respect of any Bond or Coupon is not a Business Day, the holder shall not be entitled to payment until the next following Business Day and shall not be entitled to any further interest or payment in respect of any such delay.

In these Conditions, ``Business Day'' means a day (other than Saturdays, Sundays or gazetted public holidays) on which commercial banks are open for business in Singapore.

6. Taxation All payments in respect of the Bonds and the Coupons by the Issuer shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Singapore or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In such event, the Issuer shall pay such additional amounts as will result in the receipt by the Bondholders and the Couponholders of such amounts as would have been received by them had no such deduction or withholding been required, except that no such additional amounts shall be payable in respect of any Bond or Coupon presented for payment: (a) by or on behalf of a holder who is subject to such taxes, duties, assessments or governmental charges by reason of his being connected with Singapore otherwise than by reason only of the holding of such Bond or Coupon or the receipt of any sums due in respect of such Bond or Coupon (including without limitation, the holder being (1) a resident in Singapore or (2) a non-resident of Singapore who purchases such Bond using funds from its Singapore operations); or (b) more than thirty (30) days after the Relevant Date except to the extent that the holder thereof would have been entitled to such additional amounts on presenting the same for payment on the last day of such period of thirty (30) days.

7. Prescription Claims against the Issuer for payment in respect of the Bonds and Coupons shall be prescribed and become void unless made within ®ve (5) years from their respective Relevant Dates.

13 TERMS AND CONDITIONS OF THE BONDS

8. Events of Default If any of the following events (``Events of Default'') occurs and is continuing, the holder of any Bond may give written notice to the Fiscal Agent that such Bond is immediately repayable, whereupon the principal amount of such Bond together with accrued interest to the date of payment shall, become immediately due and payable:

(a) the Issuer fails to pay the principal of (whether becoming due upon redemption or otherwise) or any interest on any of the Bonds when due, and such default continues for a period of seven (7) Business Days; or

(b) the Issuer defaults in the performance or observance of or compliance with any of its other obligations set out in any of the Bonds or the Agency Agreement which default is incapable of remedy or, if capable of remedy, is not remedied within thirty (30) days after notice of such default shall have been given to the Issuer by any holder thereof; or

(c) (i) any other present or future indebtedness (in an aggregate amount of not less than S$30,000,000 (or its equivalent in any other currency or currencies)) of the Issuer for or in respect of moneys borrowed or raised becomes due and payable prior to its stated maturity otherwise than at the option of the Issuer or any such indebtedness is not paid when due or, as the case may be, within any applicable grace period; or (ii) the Issuer fails to pay when due any amount (in an aggregate amount of not less than S$30,000,000 (or its equivalent in any other currency or currencies)) payable by it under any present or future guarantee for any moneys borrowed or raised; or

(d) any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the Issuer over the whole or any substantial part of the undertaking, property, assets or revenues of the Issuer is enforced; or

(e) it is or will become unlawful for the Issuer to perform or comply with any of its obligations under any of the Bonds, any of the Coupons or the Agency Agreement; or

(f) any action, condition or thing (including obtaining or effecting of any necessary consent, approval, authorisation, exemption, ®ling, licence, order, recording or registration) at any time required to be taken, ful®lled or done in order (i) to enable the Issuer lawfully to enter into and perform and comply with its obligations under the Bonds, the Coupons and/or the Agency Agreement, (ii) to ensure that those obligations are legally binding and enforceable and (iii) to make the Bonds, the Coupons and the Agency Agreement admissible in evidence in the courts of, Singapore is not taken, ful®lled or done; or

(g) a moratorium is agreed or declared in respect of all or any material part of the indebtedness of the Issuer or the Government or any court or other authority in Singapore takes any action for the distribution of the assets of the Issuer or any material part thereof among any creditors of the Issuer.

9. Further Issues The Issuer may from time to time without the consent of the Bondholders or Couponholders create and issue further notes having the same terms and conditions as the Bonds and so that the same shall be consolidated and form a single series with such Bonds, and references in these Conditions to ``Bonds'' shall be construed accordingly.

14 TERMS AND CONDITIONS OF THE BONDS

10. Replacement of Bonds and Coupons If any Bond or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, at the speci®ed of®ce of any Paying Agent or at the speci®ed of®ce of such other Paying Agent as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Bondholders in accordance with Condition 11 in each case, on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Bond or Coupon is subsequently presented for payment, there will be paid to the Issuer on demand the amount payable by the Issuer in respect of such Bond or Coupon) and otherwise as the Issuer may require. Mutilated or defaced Bonds or Coupons must be surrendered before replacements will be issued.

11. Notices Notices to the holders of Bonds will be valid if published in a daily newspaper in the English language of general circulation in Singapore (or, if the holders of any Bonds can be identi®ed, notices to such holders will also be valid if they are given to each of such holders). If at any time publication in such a newspaper is not practicable, notices will be valid if published in such manner as the Issuer shall, with the consent of the Fiscal Agent, determine. Notices will, if published more than once or on different dates, be deemed to have been given on the date of the ®rst publication in such newspaper as provided above. Couponholders shall be deemed for all purposes to have notice of the contents of any notice to the holders in accordance with this Condition.

Until such time as any de®nitive Bonds are issued, there may, so long as the Global Bond is held in its entirety on behalf of the Depository, be substituted for such publication in such a newspaper, the delivery of the relevant notice to the Depository for communication by it to the Bondholders, except that if the Bonds are listed on the SGX-ST and the rules of such exchange so require, notice will in any event be published in accordance with the previous paragraph. Any such notice shall be deemed to have been given to the Bondholders on the seventh day after the day on which the said notice was given to the Depository.

Notices to be given by any Bondholder pursuant hereto (including to the Issuer) shall be in writing and given by lodging the same, together with the relative Bond or Bonds, with the Fiscal Agent. Whilst the Bonds are represented by the Global Bond, such notice may be given by any Bondholder to the Fiscal Agent through the Depository in such manner as the Fiscal Agent and the Depository may approve for this purpose.

Notwithstanding the other provisions of this Condition, in any case where the identities and addresses of all the Bondholders are known to the Issuer, notices to such holders may be given individually by recorded delivery mail to such addresses and will be deemed to have been given when received at such addresses.

15 TERMS AND CONDITIONS OF THE BONDS

12. Meeting of Bondholders and Modi®cations The Agency Agreement contains provisions for convening meetings of Bondholders to consider any matter affecting their interests, including modi®cation by Extraordinary Resolution (as de®ned in the Agency Agreement) of any of these Conditions. Such a meeting may be convened by Bondholders holding not less than twenty-®ve per cent. (25%) in principal amount of the Bonds for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be two (2) or more persons holding or representing a clear majority in principal amount of the Bonds for the time being outstanding, or at any adjourned meeting two (2) or more persons being or representing Bondholders whatever the principal amount of the Bonds held or represented, unless the business of such meeting includes consideration of proposals by the Issuer, inter alia, (a) to amend the dates of maturity or redemption of the Bonds or any date for payment of interest on the Bonds, (b) to reduce or cancel the principal amount payable on redemption of the Bonds, (c) to vary the rate or rates of interest in respect of the Bonds or to vary the method or basis of calculating the rate or rates of interest in respect of the Bonds, (d) to vary the currency or currencies of payment or denomination of the Bonds, (e) to modify the provisions concerning the quorum required at any meeting of Bondholders or the majority required to pass the Extraordinary Resolution or (f) to take any steps that as speci®ed hereon may only be taken following approval by an Extraordinary Resolution to which the special quorum provisions apply, in which case the necessary quorum shall be two (2) or more persons holding or representing not less than seventy-®ve per cent. (75%), or at any adjourned meeting not less than twenty-®ve per cent. (25%), in principal amount of all the Bonds for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on all Bondholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders. For the avoidance of doubt, the Issuer is not bound by any modi®cation to any of these Conditions unless the Issuer has agreed to such modi®cation.

13. Fiscal Agent and Paying Agent In acting under the Agency Agreement, the Fiscal Agent and the Paying Agent act solely as agents of the Issuer and do not assume any obligation or relationship of agency or trust for or with any holder except that (without affecting the obligations of the Issuer to the holders to make payment in respect of the Bonds and Coupons in accordance with their terms) any funds received by the Fiscal Agent for the payment of any amounts in respect of the Bonds or Coupons shall be held by it in trust for the relevant holders until the expiration of the period of prescription speci®ed in Condition 7.

The Agency Agreement may be amended by the Issuer and the Fiscal Agent, without the consent of the Paying Agent or any holder, for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective provision contained therein or in any manner which the Issuer and the Fiscal Agent may mutually deem necessary or desirable and which does not, in the opinion of the Issuer and the Fiscal Agent, adversely affect the interests of the holders in any material respect.

14. Contracts (Rights of Third Parties) Act, Chapter 53B No person shall have any right to enforce any term or condition of the Bonds under the Contracts (Rights of Third Parties) Act, Chapter 53B, of Singapore.

16 TERMS AND CONDITIONS OF THE BONDS

15. Governing Law (a) The Bonds and the Coupons are governed by, and shall be construed in accordance with, the laws of Singapore.

(b) In relation to any dispute, legal action or proceedings arising out of or in connection with the Bonds (``Proceedings''), the Issuer, the Bondholders and the Couponholders hereby irrevocably submit to the exclusive jurisdiction of the courts of Singapore and waive any objection to Proceedings in any such courts on the grounds of venue or the grounds that the Proceedings have been brought in an inconvenient forum.

17 LAND TRANSPORT AUTHORITY OF SINGAPORE

HISTORY AND BUSINESS The Land Transport Authority of Singapore (LTA), a statutory board of the Ministry of Transport, was established on 1 September 1995 under the LTA Act.

The scope of activities of LTA includes: (i) planning, design, construction, management and maintenance of the rapid transit system infrastructure; (ii) planning, design, construction, management and maintenance of roads and related facilities; (iii) acting as an agent of the Government in the administration, assessment, collection and enforcement of various taxes, fees and charges and other services relating to land transportation; (iv) co-ordinating land transport services; (v) advising the Government on matters related to the land transport system in Singapore; and (vi) representing Singapore internationally in respect of matters relating to land transport.

MISSION Managing land space is an on-going challenge in major cities around the world, especially in Singapore, where a limited land area of approximately 650 square km supports a growing population with an ever-increasing appetite for greater mobility.

As the demand for mobility grows over the years, LTA is ready to rise to the challenge of maintaining the delicate balance between an effective and ef®cient use of land space and meeting the transportation needs of the population.

To this end, LTA's plans for a world class land transport system for Singapore are guided and driven by its mission statement:

``To provide a quality, integrated and ef®cient land transport system which meets the needs and expectations of Singaporeans, supports economic and environmental goals and provides value for money.''

18 LAND TRANSPORT AUTHORITY OF SINGAPORE

STRATEGY Providing an attractive public transport system is the cornerstone of LTA's land transport strategy. The aim is to develop a quality public transport system that is able to provide a level of service which is ef®cient and attractive, so that it becomes the commuters' preferred choice of travel.The rapid transit system will be the backbone of such a public transport system.

To attain LTA's vision for a world class land transport system, the following broad initiatives have been put in place:

(1) Integrating land use and transport planning Working closely with town and land use planners, LTA seeks to integrate the transport network with urban development.Transport facilities would be built within easy reach of housing and commercial developments.The necessary provisions will be made, where feasible, for the development of high rise sites on top of, or adjacent to, MRT stations, when planning and constructing the rapid transit network.

(2) Building a comprehensive and ef®cient road network Singapore's comprehensive road network of approximately 8,247 lane km of roads, expressways and tunnels will be developed further to serve all parts of the island.LTA will optimise the ef®cient use of the road network by applying advanced technology in traf®c management systems.LTA plans to expand the road network by another 340 lane km over the next ®ve years.

(3) Improving and expanding the public transport system LTA will continue its efforts to improve and expand the public transport system.Plans are underway for the extension of the MRT network and the improvement of public transport- related facilities.LTA also aims to work closely with transport operators to provide an increasingly seamless and well-integrated transport system.The overall public transport system aims to provide high quality service, one that is convenient, accessible, safe, speedy and most importantly, affordable to commuters.Over the next ®ve years, LTA plans to expand the MRT and LRT lines to about 155 km from the present 102 km.

(4) Establishing demand management measures Singapore's land transport policy aims to ensure that people, goods and services can move quickly and ef®ciently on the roads in order for Singapore to remain a competitive business hub in the region.To ensure that the roads are congestion-free while sustaining a reasonable growth rate in the vehicle population, twin measures of vehicle ownership restraint (i.e. the Vehicle Quota System) and vehicle usage restraint (i.e. the system) have been put in place.These measures allow LTA to manage the demand for road space while satisfying the aspirations of Singaporeans to own motor vehicles.

19 LAND TRANSPORT AUTHORITY OF SINGAPORE

MAJOR PROJECTS UNDERTAKEN TO BUILD A COMPREHENSIVE LAND TRANSPORT NETWORK LTA's major development projects focus on a common goal - to provide a comprehensive land transport network that would link all sectors of Singapore for safe and speedy travel for commuters. The kind of projects range from road and RTS development works to the use of new traf®c management systems and improvements in public transport facilities.

(1) Expansion of the Road Network Singapore's network of roads, expressways and tunnels amounts to approximately 8,247 lane km in total length.The expressway network alone, which will consist of nine high-capacity expressways when fully completed by 2007, will cover 162 km.

LTA will continue to increase the carrying capacity of the road network by expanding existing roads, building new roads, and constructing multi-tier interchanges at crucial road junctions.

Key road expansion and improvement projects include:

. Expressways/Semi-Expressways

Widening of Expressway The (BKE) will be widened from a dual three-lane to dual four-lane carriageway from Expressway (KJE) to Expressway (SLE).The widening will increase the traf®c capacity to meet the growth in traf®c demand.The widening work is expected to complete in second quarter 2005.

Upgrading of Road into a Semi-Expresssway The upgrading of Pasir Panjang Road into a semi-expressway is the second phase of the project to upgrade Road and Pasir Panjang Road to a semi-expressway.It involves the construction of a 2.6 km viaduct which will extend the current viaduct from Telok Blangah Street 31 to Pasir Panjang Road/South Road junction.The viaduct is expected to open to traf®c sometime this year.

Upgrading of West Coast Highway and to Semi-Expressway The upgrading of West Coast Highway and Jalan Buroh will serve the ports and industrial activities concentrated in the southern and western regions of the island.The upgrading works involve the construction of two new ¯yovers at the junctions of Jurong Pier Road/ Jalan Buroh and Penjuru Road/Jalan Buroh.Two existing bridges, across Sungei Jurong and Sungei Pandan will also be reconstructed.Upon completion of these works in 2005, road users can expect improved traf®c ¯ow along West Coast Highway, Jalan Buroh and .

Kallang/Paya Lebar Expressway The Kallang/Paya Lebar Expressway (KPE) is being built to serve the travel needs of the rapidly growing north-east sector.The 12 km long KPE will link the (ECP) in the south and the Expressway (TPE) in the north-east part of the island via the Pan-Island Expressway (PIE) near Kolam Ayer.About 9 km of the KPE will be constructed underground.The construction of KPE is scheduled to complete in 2007.

20 LAND TRANSPORT AUTHORITY OF SINGAPORE

. Outer System The (ORRS) corridor comprises major roads encircling the area outside the central business district.It serves to distribute traf®c along the periphery of the city and plays a strategic role in the road transport network.The following projects are part of LTA's ongoing programme to improve the ORRS:

Bartley Road Extension The Extension will be implemented in two phases.Phase 1 of the project from Airport Road to Tampines Avenue 10 involves the construction of a 2.1 km dual three-lane viaduct with a 900 m dual three-lane road.Phase 2, from Bartley Road to Airport Road, involves the construction of a 1.9 km dual two-lane viaduct with a 400 m dual two-lane road.The extension will provide motorists with an alternative access from Paya Lebar to Tampines.It will also relieve the heavy traf®c ¯ow currently experienced along the PIE and Bedok Reservoir during peak hours.Phase 1 is scheduled for completion in the fourth quarter of 2003 and Phase 2 in 2006.

Interchange at Braddell Road/Bishan Road The project involves the construction of the 340 m long ¯yover along Braddell Road at its junction with Bishan Road.The ¯yover will allow motorists to bypass Bishan Road junction and relieve the heavy traf®c ¯ow experienced at this junction, especially during the peak hours.The project is targeted for completion in the ®rst quarter of 2004.

Queensway/Commonwealth Avenue The project involves the construction of a vehicular underpass along Queensway and is scheduled for completion in the third quarter of 2004.

Extension of Queensway to The project is being implemented in two phases.Phase 1 involves the construction of a 220 m long dual three-lane ¯yover across the Ayer Rajah Expressway (AYE), linking Normanton Park and Jalan Hang Jebat/Portsdown Road.Phase 2 involves the construction of a new road extending from Jalan Hang Jebat to Queensway.Both phases are scheduled for completion in the second quarter of 2005.It will provide motorists with a direct access from Queensway to AYE and vice versa.

. Road Interchanges

Interchange at PIE/Toh Guan Road This on-going project involves the extension of the existing Toh Guan Road and its connection to PIE with a road interchange.Scheduled for completion in the ®rst quarter of 2005, the interchange will provide motorists with a more direct access from the PIE to the Jurong Regional Centre, including the International Business Park.It will also relieve traf®c conditions along .

Upgrading of Keppel Road/AYE Interchange This upgrading project involves the construction of a 600 m single-lane ¯yover along Keppel Road to Jurong-bound AYE, and the reconstruction of the existing down ramp from Keppel Viaduct towards Telok Blangah Road.Scheduled for completion in the fourth quarter of 2004, the upgrading will provide motorists with an uninterrupted traf®c ¯ow along Keppel Road at its intersection with the AYE.

21 LAND TRANSPORT AUTHORITY OF SINGAPORE

TPE/ East Road Interchange and TPE/Sengkang East Drive Flyover The construction of the TPE/Sengkang East Road interchange and TPE/Sengkang East Drive ¯yover is currently on-going.Both projects are scheduled for completion in the third quarter of 2003.The TPE/Sengkang East Road interchange will provide access from TPE to the western part of Sengkang and Punggol New Towns, and a link between Punggol and Sengkang New Towns.The TPE/Sengkang East Drive Flyover, with the Sengkang East Drive and Upper Road Extension, will provide an alternative link between Punggol New Town and the city.

. Other Road Projects LTA has plans to widen a stretch of the KJE, from BKE to PIE, to increase the road capacity and meet the demand of traf®c generated from new towns along its route - including Choa Chu Kang New Town, Bukit Batok New Town and Jurong West New Town.

The proposed Fort Canning Tunnel and realignment of Stamford Road involve the construction of a vehicular tunnel between Queen Street and Penang Road to provide a by- pass route for Stamford Road traf®c heading for Penang Road.The tunnel and the realignment of Stamford Road will allow better utilisation of the land thus ensuring a more ef®cient parcelling of land.

The widening of Upper Changi Road from Bedok Road to Simei Ave is being planned to cater for the increase in road capacity to meet traf®c demand generated by the newly developed JTC Corporation industrial estate around Changi South Lane.

(2) Expansion of the RTS Today, the RTS network is approximately 102 km.By 2008, the network will grow to 155 km.By then, it will also reach an estimated service density of 0.23 rail km per square km of land.

The Government expects to expand the RTS network to 172 km by 2010.Plans are currently underway to develop a comprehensive RTS network that will cover all developed parts of Singapore.

Major on-going rapid transit projects include:

. North East Line (NEL) The 20 km North East Line (NEL) is a fully underground MRT system with a depot and 16 stations.From HarbourFront in the southern tip of Singapore, the line runs along the north eastern corridor to reach the new towns of Sengkang and Punggol.The NEL is currently undergoing trial running and will commence service this year.

. Circle Line (CCL) The 33.3 km Circle Line (CCL) is an orbital line which will interchange with the major rapid transit lines, namely the North-South Line, the East-West Line and the North East Line.A fully underground system, it will be built in 5 stages.

Stage 1 of the 5.4 km CCL will link the new Dhoby Ghaut interchange to Stadium Boulevard when completed by 2007.It will have six stations to serve commuters along the heavy Bras Basah corridor.

Approximately 5.4 km long, stage 2 of the CCL is expected to be completed by 2007. It will extend stage 1 of the CCL from Stadium Boulevard to Upper Paya Lebar Road and will include the construction of a depot at Kim Chuan.

22 LAND TRANSPORT AUTHORITY OF SINGAPORE

Stage 3 of the CCL, at 5.1 km long, will extend from Upper Paya Lebar Road/Bartley Road to Marymount Road.Construction is targeted to start sometime in the third quarter of 2003, and is expected to complete by 2008.

As for stages 4 and 5, engineering studies are currently in progress to determine the exact alignments of the remaining stretches of the CCL.

. Sengkang and Punggol LRT Systems The 10.7 km Sengkang line has two loops - the east loop with six stations and the west with eight.Both loops have interchange facilities with the North East Line at Sengkang MRT station.The east loop opened for passenger service on 18 January 2003.

Like the Punggol LRT system in the Punggol 21 New Town, the LRT system in Sengkang was planned and built to integrate fully with the surrounding buildings.This was possible as the development of these new towns was still in the early stages.

The Punggol LRT system, still under construction, is scheduled to complete by end 2004.It will be approximately 10.3 km in length with 15 stations and with interchange facilities with the North East Line.

The Government has also announced plans to build three new lines over the next 10 to 15 years.These lines, which are currently being studied, are Bukit Timah Line, which will serve the Bukit Panjang, Upper Bukit Timah and Bukit Timah regions; Eastern Region Line which will complement the existing East-West Line and enhance inter-town and intra-town travelling in the eastern region and Jurong Region Line, which is a light rail system to better serve residents in Jurong.

(3) Traf®c Management Projects Working hand in hand with the comprehensive network of roads and rapid transit projects are advanced traf®c management systems that harness the latest technology to maximise the transport network capacity.

. Electronic Road Pricing (ERP) and Vehicle Quota System (VQS) Electronic Road Pricing (ERP) and the Vehicle Quota System (VQS) are twin pillars in the important demand management scheme adopted by LTA to manage demand for road use. By emphasising usage restraint measures alongside ownership restraint measures, LTA strives to maintain a ®ne balance between managing traf®c and satisfying vehicle ownership aspirations of Singaporeans.

The VQS was introduced in 1990 to manage the growth of the number of vehicles by pre-determining the annual number of new vehicles allowed for registration through the use of Certi®cates of Entitlement (COE).In 2001, the COE Open Bidding System was introduced. It replaced the closed bidding system from April 2002.This has helped to ensure a higher degree of transparency and to improve access to information during the bidding process. The public can now make more informed decisions when bidding for their COEs.

The ERP cordon around the Central Business District (CBD) and along the major expressways has so far ensured that traf®c is relatively free ¯owing within the CBD and along the expressways.Thus, ERP acts to encourage a positive impact on businesses, not only directly in monetary terms but also in terms of faster travel time that leads to overall lower transportation costs.This helps to maintain Singapore's competitiveness as an ef®cient international manufacturing, logistics and business centre.

23 LAND TRANSPORT AUTHORITY OF SINGAPORE

The plan is to erect ERP gantries on all radial roads into the city.There will be about 17 ERP locations along this cordon.The installation of the gantries will be implemented in two phases.The more congested roads such as Thomson Road, Bendemeer Road and have been included in the ®rst phase, which was implemented in September 1999.The timing for the installation of the rest of the gantries will depend on the prevailing traf®c conditions.

ERP was successfully implemented in April 1998 to automate the road-pricing scheme.With ERP, road-pricing charges can be varied at different locations and at different times to match the traf®c conditions.This has enabled a more optimum use of the road network at a lower cost to motorists.

The automation of road pricing is in line with the Government's drive to make Singapore an ``intelligent'' island through the use of information technology while the use of the smartcard, from which ERP charges are deducted, supports the move towards a cashless society.

. i-transport Harnessing technology to maximise network capacity will enhance LTA's efforts to better manage traf®c.To achieve this aim, the i-transport initiative was conceived to implement intelligent transport systems (ITS) to enhance speci®c functions and electronically link all ITS at a national level to facilitate integrated traf®c management and provide comprehensive traf®c information.

A few ITS have been implemented under the i-transport initiative.They include the Green Link Determining System (GLIDE) - a computerised area traf®c control system that allows traf®c signals to be co-ordinated and brought under centralised control and monitoring, the Expressway Monitoring and Advisory System (EMAS) - an intelligent incident management system that monitors and manages traf®c along the expressways, and Traf®cScan - a system that provides information on traf®c ¯ow conditions to road users.

The linking up of all ITS will facilitate the collection, processing, sharing and dissemination of transport information.It has been conceived as a means to provide real-time traf®c information to all road users.

(4) Other Projects . Public Transport Improving public transport is part of LTA's strategy to build a world class land transport system.Besides extending the road and rapid transit network, the Authority also concentrates on improving facilities in and around public transport nodes.Ultimately, the objective is to make public transport more attractive to present and would-be users.

As part of this effort, LTA upgrades the existing bus interchanges and builds new interchanges, as well as undertakes various projects to enhance the current public transport system such as the use of contactless smart card for fare payment.

The LTA implemented a contactless smart card system in April 2002 for use in the public transport network.Better known as the ez-link Card system, it replaced the previous magnetic Farecard system.ez-link Cards have reduced transaction times and sped up the boarding of buses.In addition, commuters are spared the hassle of enquiring about fares, searching for change and inserting their farecards into the validator.This has made travelling on public transport easier and more convenient.

24 LAND TRANSPORT AUTHORITY OF SINGAPORE

The ez-link Card can also be used for non-transit applications.LTA has set up a subsidiary company called EZ-Link Pte Ltd to promote the use of these cards in the non-transit environment.

. Vehicle Registration & Licensing (VRL) System On 9 September 2002, LTA awarded a contract to design, develop and supply the integrated VRL system to replace the existing main frame Motor Vehicle Project (MVP) system, which provides for vehicle registration and licensing services.The new system will provide fast and secure round-the-clock access to LTA's many vehicle-related services through various channels such as the internet, self-help kiosks and mobile phones.

25 LAND TRANSPORT AUTHORITY OF SINGAPORE

FINANCING OF LAND TRANSPORT AUTHORITY OF SINGAPORE LTA receives monetary advances from the Government to ®nance the construction of road infrastructure, which it undertakes on behalf of the Government and which infrastructure is owned by the Government.The Government also funds the development of commuter facilities and traf®c management systems through a ®xed sum of money that has been set aside in a 5-year block vote for this purpose.In addition, LTA receives a management fee from the Government to ®nance its operating expenditure, which includes the cost of maintaining the road infrastructure and traf®c systems.

The construction of rapid transit systems is funded by development grants from the Government as these capital expenditures are capitalised in LTA's accounts.The rapid transit systems are then leased by LTA to private operators for a licence fee.LTA may also sell the operating assets of these systems to the licensed operators.

LTA may borrow or raise funds to ®nance its land transport infrastructure development projects.The principal repayment, interest and other charges incurred for the purpose of borrowing will be met out of funds provided by the Government.

26 LAND TRANSPORT AUTHORITY OF SINGAPORE

USE OF PROCEEDS The proceeds from the sale of the Bonds will be used to ®nance LTA's land transport infrastructure development projects.

27 LAND TRANSPORT AUTHORITY OF SINGAPORE

FINANCIAL HIGHLIGHTS The audited ®nancial statements of LTA for the ®nancial year ended 31 March 2002 have been examined by Ernst & Young and the audited ®nancial statements of LTA for the ®nancial years ended 31 March 1999, 2000 and 2001 have been examined by the Auditor-General in Singapore. The audited income and expenditure of LTA for the ®nancial years ended 31 March 1999, 2000, 2001 and 2002, the unaudited income and expenditure of LTA for the six months ended 30 September 2002, the summarised audited balance sheets of LTA as at 31 March 1999, 2000, 2001 and 2002 and the summarised unaudited balance sheet of LTA as at 30 September 2002 are as follows:

Income and Expenditure Statement

6 months from 1 Apr 2002 to 30 Sep 3------Financial year ended 31 March ------" 2002 2002 2001 2000 1999 $'000 $'000 $'000 $'000 $'000 Operating income 226,809 456,213 475,848 450,898 465,760 Operating expenditure (303,338) (592,061) (573,891) (456,397) (493,808)

Operating de®cit (76,529) (135,848) (98,043) (5,499) (28,048) Non-operating (de®cit)/surplus (5,769) 6,859 11,189 (27,152) 9,909

De®cit before Government grants (82,298) (128,989) (86,854) (32,651) (18,139) Deferred capital grants amortised 51,031 93,296 87,219 79,373 1,282,048 Grant for additional charges on land premium - - - 33,940 - Other grants 37,112 57,539 34,198 10,635 -

Surplus before contribution to consolidated fund 5,845 21,846 34,563 91,297 1,263,909 Contribution to consolidated fund (1,286) (5,352) (7,284) (18,260) (10,030) Return of funds to Government - - - - (1,213,761)

Net surplus 4,559 16,494 27,279 73,037 40,118 Accumulated surplus brought forward 438,858 422,364 395,085 328,383 288,265

Accumulated surplus carried forward 443,417 438,858 422,364 401,420 328,383

28 LAND TRANSPORT AUTHORITY OF SINGAPORE

Summarised Balance Sheets As at 30 Sep 3------As at 31 March ------" 2002 2002 2001 2000 1999 $'000 $'000 $'000 $'000 $'000 Capital account 102,954 102,954 102,954 102,954 100,079 Accumulated surplus 443,417 438,858 42,364 401,420 328,383 Deferred capital grants 8,146,869 7,635,759 6,621,781 5,733,162 4,922,072 Staff loan fund 597 615 1,195 1,502 1,903

8,693,837 8,178,186 7,148,294 6,239,038 5,352,437

Represented by: Fixed assets 4,397,847 4,450,777 4,034,741 3,947,528 3,577,204 Construction-in-progress 5,431,167 4,649,329 3,552,422 2,270,104 1,549,304 Investment in subsidiary companies 500 500 500 - - Long-term investments 222,402 229,410 222,590 11,483 - Amount due from sale of operating assets - - 252,915 505,830 758,744 Staff loans 533 559 982 1,223 1,684

Current assets 828,505 844,256 937,008 1,019,542 1,585,169 Current liabilities (260,164) (565,261) (646,601) (587,162) (1,265,888)

Net current assets 568,341 278,995 290,407 432,380 319,281 Long-term liabilities Retention monies 107,671 111,276 134,139 106,053 72,683 Provision for return of funds to Government - - 252,915 505,830 758,744 Provision for pensions and gratuities 19,282 20,108 19,209 17,627 22,353 Long-term loans 1,800,000 1,300,000 800,000 300,000 -

8,693,837 8,178,186 7,148,294 6,239,038 5,352,437

29 LAND TRANSPORT AUTHORITY OF SINGAPORE

GENERAL AND STATUTORY INFORMATION 1. Issued Debentures Save as disclosed below, no debentures of LTA have been issued, or agreed or proposed to be issued, as fully or partly paid in cash or otherwise than in cash during the last two years preceding the date of this Information Memorandum:

Issue Date Description Issue Price Consideration

10 May 2001 S$500,000,000 4.17 per cent. 100 per cent.S$500,000,000 Bonds Due 2016

21 May 2002 S$300,000,000 4.08 per cent. 100 per cent.S$300,000,000 Bonds Due 2012

21 May 2002 S$200,000,000 3.76 per cent. 100 per cent.S$200,000,000 Bonds Due 2009

As at 18 June 2003, being the latest practicable date prior to the printing of this Information Memorandum, no person has been, or is entitled to be, given any option to subscribe for any debentures of LTA.

In addition to the Issue, LTA is also proposing to issue S$300,000,000 2.159 per cent. bonds due 2013 (the ``2013 Bonds'') pursuant to a subscription agreement dated 17 June 2003 between LTA and Oversea-Chinese Banking Corporation Limited.

2. The Board and Management The Board and senior management are entrusted with the responsibility for the overall management of LTA.

Members of LTA The name, address of principal residence and appointment/occupation of each of the members are as follows:

Name Address of Appointment/Occupation principal residence

Mr Michael Lim Choo San 11 Jalan Piala Chairman Singapore 299120 Land Transport Authority of Singapore

Dr Tan Cheng Bock 8 Holland Grove Drive Chairman Singapore 278856 Chuan Hup Holdings Ltd

Mr Han Fook Kwang 4 Tavistock Avenue Editor Singapore 555107 The Straits Times

Mr Lee Hsien Yang 14 Jalan Piala President & Chief Executive Of®cer Singapore 299122 Singapore Telecommunications Ltd

Dr Cham Tao Soon 10 First Avenue University Distinguished Professor Singapore 268745 Nanyang Technological University

Mr Ho Meng Kit 27 Bedok Rise Chief Executive (Designate) Singapore 469586 Land Transport Authority of Singapore

30 LAND TRANSPORT AUTHORITY OF SINGAPORE

Name Address of Appointment/Occupation principal residence

Mr Andrew Ang 56 Cornwall Gardens Senior Partner Singapore 269673 Lee & Lee

Mr Seck Wai Kwong 450 Holland Road Executive Vice President & Chief Singapore 278646 Financial Of®cer Singapore Exchange Limited

Mr Yeo Guat Kwang 33 Jalan Riang Director, Quality Lifestyle & Productivity Singapore 359002 Development National Trades Union Congress

Professor Yong Kwet Yew 23 University Walk Professor of Civil Engineering Singapore 297777 National University of Singapore

Mr Abdul Wahab Bin 130 Fidelio Street Regional Director Mohamed Yusoff Singapore 458508 Documentum, Inc.

Mrs Koh-Lim Wen Gin 30B Pasir Panjang Hill Chief Planner and Deputy Chief Singapore 118852 Executive Of®cer (Physical Planning and Conservation and Urban Design) Urban Redevelopment Authority

Mr Lim Swee Cheang 18 Namly View Director Singapore 267092 Institute of Systems Science National University of Singapore

Dr Milton Tan 5 Pine Grove# 08-03 MITA Fellow; secondment from the Astor Green National University of Singapore Singapore 597591

Mr Han Eng Juan 80 Neram Road Chief Executive Singapore 807775 Land Transport Authority of Singapore

Key Management Team The name and appointment of each member of the key management team are as follows:

Name Appointment

Mr Han Eng Juan Chief Executive

Mr Low Tien Sio Deputy Chief Executive

Mr Chew Tai Chong Senior Director, Projects & Engineering

Mrs Maria Choy Director, Vehicle & Transit Licensing

Mr Tan Yong Seng Director, Contracts & Process

Mrs Rosina Howe Director, Information Technology

Mr Rajan s/o V K Krishnan Director, Projects

Mr Lim Bok Ngam Director, Planning & Transportation

Ms Eng Sok Yong Director, Policy

31 LAND TRANSPORT AUTHORITY OF SINGAPORE

3. Related Companies As at 18 June 2003, being the last practicable date prior to the printing of this Information Memorandum, the corporations which would be deemed to be related to LTA by virtue of the de®nition set out in Section 6 of the Companies Act are as follows:

Wholly-owned subsidiaries of LTA (a) MSI Global Private Limited (formerly known as MRTC Singapore International Pte Ltd); and (b) EZ-Link Pte Ltd.

4. Material Contracts The dates of, parties to and general nature of the material contracts (not being contracts entered into in the ordinary course of business) entered into by the Authority within the two years preceding 18 June 2003, being the latest practicable date prior to the printing of this Information Memorandum, are as follows: (a) Fiscal Agency Agreement dated 4 May 2001 between (1) LTA, as issuer, (2) The Development Bank of Singapore Ltd, as ®scal agent, and (3) The Development Bank of Singapore Ltd, as paying agent; (b) Subscription Agreement dated 4 May 2001 between (1) LTA, as issuer, and (2) Barclays Bank PLC, Singapore Branch, Citicorp Investment Bank (Singapore) Limited and The Development Bank of Singapore Ltd, as joint lead managers; (c) Master Depository Agreement dated 4 May 2001 between LTA, as issuer, and (2) the Depository, as depository; (d) Deed of Covenant dated 4 May 2001 executed by LTA; (e) Fiscal Agency Agreement dated 14 May 2002 between (1) LTA, as issuer, (2) The Development Bank of Singapore Ltd, as ®scal agent, and (3) The Development Bank of Singapore Ltd, as paying agent; (f) Subscription Agreement dated 14 May 2002 between (1) LTA, as issuer, and (2) The Development Bank of Singapore Ltd, as lead manager; (g) Fiscal Agency Agreement dated 14 May 2002 between (1) LTA, as issuer, (2) The Hongkong and Shanghai Banking Corporation Limited, as ®scal agent, and (3) The Hongkong and Shanghai Banking Corporation Limited, as paying agent; (h) Subscription Agreement dated 14 May 2002 between (1) LTA, as issuer, and (2) The Hongkong and Shanghai Banking Corporation Limited, as lead manager; (i) Two (2) Master Depository Agreements both dated 14 May 2002 between (1) LTA, as issuer, and (2) the Depository, as depository in relation to the bonds issued under the Subscription Agreement dated 14 May 2002 between (1) LTA, as issuer, and (2) The Development Bank of Singapore Ltd, as lead manager and in relation to the bonds issued under the Subscription Agreement dated 14 May 2002 between (1) LTA, as issuer and (2) The Hong Kong and Shanghai Banking Corporation Limited, as lead manager; and (j) Two (2) Deeds of Covenant both dated 14 May 2002 executed by LTA.

5. Consents The Joint Lead Managers, the Fiscal Agent, the Paying Agent, the Legal Adviser to the Issue and Ernst & Young have each given and have not withdrawn their respective written consents to the issue of this Information Memorandum with the inclusion herein of their names and all references thereto, in the form and context in which they respectively appear in this Information Memorandum.

32 LAND TRANSPORT AUTHORITY OF SINGAPORE

6. General (a) The nature of the business of LTA is stated under ``HISTORY AND BUSINESS'' of this Information Memorandum. (b) As disclosed under ``USE OF PROCEEDS'' of this Information Memorandum, LTA intends to utilise the net proceeds from the Issue to ®nance its land transport infrastructure development projects.Save as disclosed above, no property has been, or is proposed to be, purchased or acquired by LTA which is to be paid for wholly or partly out of the proceeds of the Issue or the purchase or acquisition of which has not been completed at the date of issue of this Information Memorandum other than such property the contract for the purchase or acquisition whereof was entered into in the ordinary course of LTA's business, the contract not being made in contemplation of the Issue nor the Issue in consequence of the contract. (c) The limit which LTA may borrow and the amount of subscriptions that are being sought pursuant to the Issue is, subject to the terms and conditions of the Bonds, S$200,000,000, being the aggregate of the principal amount of the Bonds.

7. Availability of Documents for Inspection Copies of the following documents are available for inspection at the of®ce of LTA at 460 Alexandra Road,# 28-00 PSA Building Singapore 119963 during normal business hours for a period of six months from the date of this Information Memorandum: (a) The unaudited ®nancial staments of LTA for the six months ended 30 September 2002; (b) The audited ®nancial statements of LTA for the last four ®nancial years ended 31 March 1999, 2000, 2001 and 2002; (c) The material contracts referred to in paragraph 4 above; and (d) The letters of consent referred to in paragraph 5 above.

33 CLEARING AND SETTLEMENT

Introduction Clearance of the Bonds will be effected through an electronic book-entry clearance and settlement system for the trading of debt securities (the ``Depository System'') maintained by the Depository.

The Depository The Depository, a wholly-owned subsidiary of the SGX-ST, is incorporated under the laws of Singapore and acts as a depository and clearing organisation.The Depository holds securities for its accountholders and facilitates the clearance and settlement of securities transactions between accountholders through electronic book-entry changes in the securities accounts maintained by such accountholders with the Depository.

Clearance and Settlement under the Depository System The entire issue of the Bonds is to be held by the Depository in the form of a global bond for persons holding the Bonds in securities accounts with the Depository (the ``Depositors'').Delivery and transfer of Bonds between Depositors is by electronic book entries in the records of the Depository only, as re¯ected in the securities accounts of Depositors.Although the Depository encourages settlement on the third business day following the trade date of debt securities, market participants may mutually agree on a settlement period if necessary.

Settlement of over-the-counter trades in the Bonds through the Depository System may only be effected through certain corporate depositors (the ``Depository Agents'') approved by the Depository under the Companies Act to maintain securities sub-accounts and to hold the Bonds in such securities sub-accounts for themselves and their clients.Accordingly, Bonds for which trade settlement is to be effected through the Depository System must be held in securities sub-accounts with the Depository Agents.Depositors holding Bonds in direct securities accounts with the Depository, and who wish to trade Bonds through the Depository System, must transfer the Bonds to be traded from such direct securities accounts to a securities sub-account with a Depository Agent for trade settlement.

General The Depository is not involved in money settlement between the Depository Agents (or any other persons) as the Depository is not a counterparty in the settlement of trades of debt securities. However, the Depository will make payment of interest and repayment of principal on behalf of issuers of debt securities.

Although the Depository has established procedures to facilitate transfer of interests in the Bonds in global form among depositors, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time.None of LTA, the Fiscal Agent, the Paying Agent or any other agents will have the responsibility for the performance by the Depository of its obligations under the rules and procedures governing its operations.

34 TAXATION

The following statements are general in nature and are based on certain aspects of current tax laws in Singapore and administrative guidelines issued by the MAS which are in force as of the date of this Information Memorandum and are subject to any changes in such laws or guidelines, or in the interpretation of these laws or guidelines, occurring after the date of this Information Memorandum, which changes could be made on a retroactive basis. Neither those statements nor any other statements in this Information Memorandum are to be regarded as a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of the Bonds and/or the Coupons or advice on the tax position of any holder of the Bonds and/or the Coupons or of any person acquiring or selling, or otherwise dealing with the Bonds and/or the Coupons or on any tax implications arising from the acquisition, sale or other dealings in respect of the Bond and/or the Coupons. Prospective holders of the Bonds and/or the Coupons who are in doubt about their respective tax positions or any such tax implications or who may be subject to tax in a jurisdiction other than Singapore should consult their own professional advisers.

1. Interest Payments Under tax laws currently effective in Singapore, any interest in connection with the Bonds and/or the Coupons derived by any person would generally be subject to tax in Singapore.Further, where any payment of interest which is chargeable to tax is made by a person in Singapore to a person not known to be resident in Singapore for tax purposes, such payment would be subject to withholding of Singapore tax (currently at a rate of 22 per cent.). However, if the interest is derived by a person not resident in Singapore from sources other than its trade, business, profession or vocation carried on or exercised in Singapore and which is not effectively connected with any permanent establishment in Singapore of that person and the interest is accruing in or derived from Singapore on or after 28 February 1996, the withholding tax rate is 15 per cent.The rate of 15 per cent.may be reduced by applicable tax treaties.

Section 13(1)(a) of the Income Tax Act states that, subject to Section 13(2) of the Income Tax Act and the prescribed conditions, the interest derived from: (a) any qualifying debt securities issued during the period from 28 February 1998 to 27 February 2003 by any person who is not resident in Singapore and who does not have any permanent establishment in Singapore; and (b) any qualifying debt securities issued during the period from 27 February 1999 to 27 February 2003 by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are not obtained from the operation,

shall be exempt from tax.The qualifying debt securities scheme, under which concessionary tax treatment is given to holders, has been extended by the Deputy Prime Minister/Minister of Finance for a period of ®ve (5) years until 27 February 2008.

As the Issue has been lead managed by the Joint Lead Managers, each of whom is an Approved Bond Intermediary and the Bonds will be issued during the period from 10 May 1999 to 27 February 2008, the Bonds are ``qualifying debt securities'' for the purposes of the ITA. Accordingly: (i) interest on the Bonds received by a holder who is not resident in Singapore and who does not have any permanent establishment in Singapore is exempt from Singapore tax.Non- residents who have permanent establishments in Singapore will also have the bene®t of this exemption, provided that the funds used by them to acquire the Bonds are not obtained from any operation in Singapore.Funds from Singapore operations, in relation to a person, means the funds and pro®ts of that person's operations through a permanent establishment in Singapore; and

35 TAXATION

(ii) subject to certain conditions having been ful®lled (including the submission of a return on debt securities to the Comptroller), interest on the Bonds received by any ®nancial institutions or corporations in Singapore is subject to tax at a concessionary tax rate of 10 per cent.

However, notwithstanding the foregoing: (a) if during the primary launch of the Bonds, the Bonds are issued to less than four (4) persons and 50 per cent.or more of the principal amount of such Bonds is bene®cially held or funded, directly or indirectly, by related parties of the Issuer, such Bonds would not qualify as ``qualifying debt securities''; and (b) even though the Bonds are ``qualifying debt securities'', if at any time during the tenor of the Bonds, 50 per cent.or more of the principal amount of the Bonds issued is held bene®cially or funded, directly or indirectly, by any related party/parties of the Issuer, interest derived from such Bonds held by (1) any such related party/parties of the Issuer or (2) any other person where the funds used by such person to acquire such Bonds are obtained, directly or indirectly, from any related party/parties of the Issuer, shall not be eligible for the 10 per cent.concessionary tax rate, tax exemption or withholding tax exemption outlined above.

The term ``related party'', in relation to a person, means any other person who, directly or indirectly, controls that person, or is controlled, directly or indirectly, by that person, or where he and that other person, directly or indirectly, are under the control of a common person.

Notwithstanding that the Issuer is permitted to make payment of the Bonds without deduction or withholding for tax under Section 45(1) of the ITA, any person whose interest is not exempt from tax is required under the ITA to declare any such interest in a return of income to be submitted to the Comptroller.

Where the Issuer is not permitted under applicable laws, regulations, directives, guidelines or policies to make payment in respect of the Bonds or the Coupons without any deduction or withholding for or on account of any such taxes, duties, assessments or governmental charges of whatever nature, no payment of principal or interest shall be made by the Issuer to any Bondholder or Couponholder without any such deduction or withholding unless such Bondholder or, as the case may be, Couponholder shall have provided a statutory declaration or other evidence satisfactory to the Paying Agent that the bene®cial owner of such principal or interest is a resident in Singapore for tax purposes.

All payments in respect of the Bonds and the Coupons by the Issuer shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Singapore or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law.In such event, the Issuer shall pay such additional amounts as will result in the receipt by the Bondholders and the Couponholders of such amounts as would have been received by them had no such deduction or withholding been required, except that no such additional amounts shall be payable in respect of any Bond or Coupon presented for payment: (i) by or on behalf of a holder who is subject to such taxes, duties, assessments or governmental charges by reason of his being connected with Singapore otherwise than by reason only of the holding of such Bond or Coupon or the receipt of any sums due in respect of such Bond or Coupon (including without limitation, the holder being (1) a resident in Singapore or (2) a non-resident of Singapore who purchases such Bond using funds from its Singapore operations); or

36 TAXATION

(ii) more than thirty (30) days after the Relevant Date except to the extent that the holder thereof would have been entitled to such additional amounts on presenting the same for payment on the last day of such period of thirty (30) days.

Notwithstanding the foregoing, interest paid on the Bonds to any person who (i) is a resident in Singapore or a permanent establishment in Singapore or (ii) is a non-resident who carries on any operation through a permanent establishment in Singapore and who has purchased the Bonds using funds from Singapore operations are subject to Singapore tax and such a person is required under the ITA to declare any such interest received in its income tax return to be submitted to the Comptroller of Income Tax in Singapore.

2. Capital Gains Any gains in the nature of capital made from the sale of the Bonds will not be taxable in Singapore except where the gains arise from the sale of the Bonds by a person as part of a trade or business carried on by that person as such gains are considered revenue in nature.

37 SUBSCRIPTION, PURCHASE AND DISTRIBUTION

The Subscription Agreement will set out the terms and conditions upon which the Joint Lead Managers will agree to subscribe and/or procure subscriptions for the Bonds.

The Bonds have not been and will not be registered under the Securities Act.Subject to certain exceptions, the Bonds may not be offered, sold or delivered within the United States or to, or for the account or bene®t of, U.S. persons. Terms used in this paragraph have the same meaning as set out in Regulation S issued pursuant to the Securities Act.

The Bonds are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by the U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder.

Neither this Information Memorandum nor any other document or information (or any part thereof) delivered or supplied under or in relation to the Issue may be used in connection with the offer or solicitation by any person in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.The distribution and publication of this Information Memorandum or any other document or information (or any part thereof) and the offer of the Bonds in certain jurisdictions may be restricted or prohibited by law.Persons who distribute or publish this Information Memorandum or any other document or information (or any part thereof) or into whose possession this Information Memorandum or any other document or information (or any part thereof) comes are required to inform themselves about and to observe any such restrictions or prohibitions and all applicable laws, rules and regulations.

Each Joint Lead Manager understands that no action has been or will be taken by the Issuer in any jurisdiction that would permit a public offering of any of the Bonds, or possession, circulation or distribution of the Information Memorandum or any other offering or publicity document, in any country or jurisdiction (other than Singapore) where action for that purpose is required.

Each Joint Lead Manager will, at its own expense, comply with all laws, regulations and directives in each jurisdiction in which it offers, acquires, purchases, sells, delivers or distributes the Bonds or any interest therein or rights in respect thereof or has in its possession or circulates or distributes, any such document or material and will ensure and procure that no obligations or liabilities are imposed on the Issuer in any such jurisdiction as a result of any of the foregoing actions.Each Joint Lead Manager will not directly or indirectly offer, sell, deliver or distribute the Bonds or any interest therein or rights in respect thereof or circulate or distribute or publish any prospectus, information memorandum, circular, advertisement or other offering material (including without limitation, the Information Memorandum) in any country or jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations, and all offers, sales, deliveries and distributions of the Bonds or any interest therein or rights in respect thereof by it will be made on the foregoing terms.In connection with the offer, sale, delivery or distribution by any Joint Lead Manager of any Bonds or any interest therein or rights in respect thereof, the Issuer shall not have responsibility for, and each Joint Lead Manager will obtain, any consent, approval or permission required in and each Joint Lead Manager will comply with the laws and regulations in force in, any jurisdiction to which it is subject or from which it may make any such offer or sale.

Each Joint Lead Manager acknowledges that this Information Memorandum has not been registered as a prospectus with the MAS but has been lodged as an information memorandum with the MAS and the Bonds are offered by the Issuer pursuant to exemptions invoked under Section 274 and Section 275 of the SFA.In-principle approval has been granted by the SGX-ST for the listing of, and quotation for, the Bonds on the Of®cial List of the SGX-ST.Accordingly, until the Expiry Date, each Joint Lead Manager will not offer or sell the Bonds or cause the Bonds to be made the subject of an invitation for subscription or purchase, nor will they circulate or distribute this Information Memorandum or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Bonds, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person speci®ed in Section 274 of the

38 SUBSCRIPTION, PURCHASE AND DISTRIBUTION

SFA, (b) to a sophisticated investor, and in accordance with the conditions, speci®ed in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.After the Expiry Date, the Bonds may be offered or sold or made the subject of an invitation for subscription or purchase to the public or any member of the public in Singapore provided they continue to be listed or quoted on the SGX-ST.Subject to the SGX-ST Approval being ®rst obtained (and where a conditional approval is given by the SGX-ST, the condition(s) imposed thereby must be acceptable to the Issuer at its sole discretion), the board lot size of the Bonds may be reduced from S$250,000 to S$10,000 after the Expiry Date.The Issuer and/or any of its respective directors, members, of®cers, employees or agents shall not be held responsible or liable for any loss, liability, cost, claim, action, demand, expense or damage suffered or incurred by any person in the event that the Board Lot Size Reduction does not or fails to occur or materialise after the Expiry Date (whether as a result of the Issuer being unable to ful®l the conditions under the SGX-ST Approval or otherwise).

Each Joint Lead Manager will procure that any subscriber or any purchaser from it of any of the Bonds or any interest therein or rights in respect thereof undertakes to comply with the foregoing provisions, including the requirement under this paragraph to procure a similar undertaking from any subsequent purchaser from it of the Bonds.

Any person who may be in doubt as to the laws, regulations, directives or restrictions in each jurisdiction in which it subscribes for, purchases, offers, sells or delivers the Bonds or any interest therein or rights in respect thereof and the consequences arising from a contravention thereof should consult his own professional advisers and should make his own enquiries as to the laws, regulations, directives or restrictions in force or applicable in any particular jurisdiction at any relevant time.

39 FINANCIAL INFORMATION OF THE AUTHORITY

APPENDIX I

Unaudited ®nancial statements of Land Transport Authority of Singapore for the six months ended 30 September 2002

40 FINANCIAL INFORMATION OF THE AUTHORITY

Balance Sheet As at 30 September 2002 Note 30 Sep 02 31 Mar 02 $'000 $'000

Capital account 3 102,954 102,954 Accumulated surplus 443,417 438,858 Deferred capital grants 4 8,146,869 7,635,759 Staff loan fund 5 597 615 8,693,837 8,178,186

Represented by: Fixed assets 6 4,397,847 4,450,777 Construction-in-progress 7 5,431,167 4,649,329 Investment in subsidiary companies 8 500 500 Long-term investments 9 222,402 229,410 Staff loans 11 533 559

CURRENT ASSETS Stocks 12 27,676 23,226 Advances to contractors 95,309 104,841 Debtors, deposits and prepayments 13 153,861 307,347 Amount due from Government 14 3,701 939 Grants receivable 15 191,486 89,389 Short-term investments 16 6,000 6,000 Fixed deposits 307,630 288,231 Cash and bank balances 42,842 24,283 828,505 844,256

CURRENT LIABILITIES Creditors and accruals 17 253,526 559,909 Provision for contribution to consolidated fund 6,638 5,352 260,164 565,261

NET CURRENT ASSETS 568,341 278,995 LONG-TERM LIABILITIES Retention monies 107,671 111,276 Provision for pensions and gratuities 18 19,282 20,108 Long-term loans 19 1,800,000 1,300,000 8,693,837 8,178,186

The accompanying notes form an integral part of the ®nancial statements.

41 FINANCIAL INFORMATION OF THE AUTHORITY

Income and Expenditure Statement For the six months ended 30 September 2002

1 Apr 02 1 Apr 01 to to Note 30 Sep 02 30 Sep 01 $'000 $'000 Operating income 20 226,809 245,680 Operating expenditure 21 (303,338) (283,238)

Operating de®cit (76,529) (37,558) Non-operating (de®cit)/surplus 22 (5,769) 5,009

De®cit before Government grants (82,298) (32,549) Deferred capital grants amortised 4 51,031 46,014 Other grants 37,112 27,790

Surplus before contribution to consolidated fund 5,845 41,255 Contribution to consolidated fund 23 (1,286) (10,568)

Net surplus for the ®nancial period 4,559 30,687 Accumulated surplus as at 1 April 438,858 422,364

Accumulated surplus as at 30 September 443,417 453,051

The accompanying notes form an integral part of the ®nancial statements.

42 FINANCIAL INFORMATION OF THE AUTHORITY

Statement of Changes in Equity For the six months ended 30 September 2002

Deferred Capital Accumulated capital Note account surplus grants Total $'000 $'000 $'000 $'000 Balance as at 1 April 2001 As previously reported 102,954 430,557 6,621,781 7,155,292 Effect of change in accounting policy 2b - (8,193) - (8,193)

As restated 102,954 422,364 6,621,781 7,147,099 Capital grants amortised in the ®nancial year - - (93,296) (93,296) Capital grants utilised in the ®nancial year - - 1,107,274 1,107,274 Net surplus for the ®nancial year - 16,494 - 16,494

Balance as at 31 March 2002 102,954 438,858 7,635,759 8,177,571

Balance as at 1 April 2002 102,954 438,858 7,635,759 8,177,571 Capital grants amortised in the ®nancial period - - (51,031) (51,031) Capital grants utilised in the ®nancial period - - 562,141 562,141 Net surplus for the ®nancial period - 4,559 - 4,559

Balance as at 30 September 2002 102,954 443,417 8,146,869 8,693,240

The accompanying notes form an integral part of the ®nancial statements.

43 FINANCIAL INFORMATION OF THE AUTHORITY

Statement of Cash Flow For the six months ended 30 September 2002

1 Apr 02 1 Apr 01 to to Note 30 Sep 02 30 Sep 01 $'000 $'000 CASH FLOWS FROM OPERATING ACTIVITIES De®cit before Government grants and contribution to consolidated fund (82,298) (32,549) Adjustments for: Depreciation of ®xed assets 61,231 53,972 Loss/(Gain) on disposal of ®xed assets 18 (42) Bond interest expense 37,112 27,790 Provision for pensions and gratuities (83) - Interest and investment income 5,769 (5,009) Operating surplus before working capital changes 21,749 44,162 (Increase)/Decrease in stocks (4,450) 1,077 Decrease/(Increase) in advances to contractors 9,532 (26,057) Increase in debtors, deposits and prepayments (99,522) (15,171) (Increase)/Decrease in amount due from Government (2,762) 28,746 Decrease in creditors and accruals (25,152) (188,298) Cash (used in)/provided by operations (100,605) (155,541) Payment of pensions and gratuities (693) (483) Repayment of staff loans 25 102 Payment of bond interest and charges (30,801) (8,817) Net cash (used in)/provided by operating activities (132,074) (164,739)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of ®xed assets (3,351) (1,844) Additions to construction-in-progress (786,810) (637,878) Interest income received 1,098 3,182 Dividend received 235 212 Proceeds from sale of investments - 206 Investment expenses - (8) Proceeds from sale of ®xed assets 253,006 252,978 Purchase of investment instruments - (4,417) Net cash used in investing activities (535,822) (387,569)

CASH FLOWS FROM FINANCING ACTIVITIES Grants from Government and other Statutory Board 458,787 291,101 Proceeds from long-term loans 500,000 500,000 Return of excess funds in staff loan fund to Government (18) (105) Return of proceeds from sale of operating assets to Government (252,915) (252,915) Net cash provided by ®nancing activities 705,854 538,081 Net increase/(decrease) in cash and cash equivalents 37,958 (14,227) Cash and cash equivalents as at 1 April 318,514 435,760 Cash and cash equivalents as at 30 September 25 356,472 421,533

The accompanying notes form an integral part of the ®nancial statements.

44 FINANCIAL INFORMATION OF THE AUTHORITY

Notes to the Financial Statements Ð 30 September 2002

1. Corporate information The head of®ce of the Land Transport Authority is located at 460, Alexandra Road# 28-00, PSA Building, Singapore 119963.

The scope of activities of the Land Transport Authority of Singapore (the ``Authority'') is: (a) to act as agent of the Government in the administration, assessment, collection and enforcement of various taxes, fees and charges and other services relating to land transport; (b) to plan, design, construct, manage and maintain roads and related facilities; (c) to plan, design, construct, manage and maintain the rapid transit systems; (d) to co-ordinate land transport services; (e) to advise the Government on matters relating to the land transport system in Singapore; and (f) to represent Singapore internationally in matters relating to land transport.

As at 30 September 2002, the Authority had 3,697 employees (30 September 2001: 3,629 employees).

2. Signi®cant accounting policies (a) Basis of accounting The ®nancial statements of the Authority which are expressed in Singapore dollars, have been prepared under the historical cost convention and in accordance with the Singapore Statements of Accounting Standard.

The accounting policies have been consistently applied by the Authority except for the change in accounting policy discussed more fully in 2(b) below.

(b) Change in accounting policy Employees' leave entitlement The Authority adopted SAS 17 (Revised 2000), Employee Bene®ts with effect from 31 March 2002. In accordance with SAS 17 (Revised 2000), employees' entitlements to annual leave are accrued when they are earned by the employees for services rendered to the Authority. Prior to the adoption of SAS 17 (Revised 2000), the cost of employee leave entitlement was recognised only when it was encashed.

As a result of the adoption of the accounting policy, an amount of $2,334,000 was charged to the income and expenditure statement for the six months ended 30 September 2002 (30 September 2001: $1,881,000). Comparative ®gures have been restated accordingly.

45 FINANCIAL INFORMATION OF THE AUTHORITY

2. Signi®cant accounting policies (cont'd) (c) Basis of recognising income Vehicle related licence fees and other fees are accounted for in the year in which the charges are collected. There is no apportionment of income.

Composition ®nes are recognised at the point of collection.

Other income is recognised upon completion of services.

Interest income is recognised on the accrual basis.

Dividends are recognised on the date they are declared payable.

(d) Foreign currency transactions Foreign currency transactions during the six months ended 30 September 2002 are converted into local currency at rates closely approximating those ruling on the transaction dates, except for hedged transactions which are recorded at the contracted forward exchange rates.

Foreign currency monetary assets and liabilities are converted into local currency at exchange rates ruling at the balance sheet date and exchange differences arising from conversion are included in the income and expenditure statement. Foreign currency monetary assets and liabilities hedged by forward exchange contracts are translated into the local currency at the contracted forward exchange rates.

(e) Government grants Government grants received for the purchase or the construction of depreciable assets are accounted for as deferred capital grants. The deferred capital grants are amortised and charged to the income and expenditure statement over the periods necessary to match the annual depreciation charge of these assets or when the assets are disposed or written off.

(f) Employees' bene®ts (i) Contributions to CPF Contributions made by the Authority for the bene®t of its employees to the Central Provident Fund (CPF) under the state pension scheme are recognised as compensation expense in the same period as the employment that gives rise to the contribution.

(ii) Pensions and gratuities Provision for pensions and gratuities is made for the payment of retirement bene®ts to pensionable of®cers transferred to the Authority on 1 September 1995 and to expatriate of®cers who had opted for the gratuity scheme.

The cost of pension bene®t due to pensionable of®cers is determined based on the estimated present value of the future cash out¯ows to be made in respect of services provided by these pensionable of®cers up to the balance sheet date.

46 FINANCIAL INFORMATION OF THE AUTHORITY

2. Signi®cant accounting policies (cont'd) (g) Fixed assets and depreciation Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated on the straight line basis so as to write off the cost of the assets over their estimated useful lives as follows:

Years Land, viaducts, tunnels and railway tracks 99 Buildings and structures 20 ± 60 Train ¯eet 8 ± 30 Operating equipment 2 ± 30 Computers 2 ± 7 Motor vehicles 5 Furniture, ®ttings and of®ce equipment 3 ± 10

Fixed assets costing less than $1,000 each are charged to the income and expenditure statement in the year of purchase.

Capital expenditure incurred on State property is charged to the income and expenditure statement in the year in which the expenditure is incurred.

(h) Construction-in-progress Construction-in-progress is stated at cost, and comprises land costs, construction costs and development costs.

Land costs include land acquisition, resettlement and clearance costs.

Construction costs are recorded based on contract progress payments for certi®ed works and services.

Development costs include manpower costs and other construction overheads.

(i) Investments Investments held on a long-term basis are stated at cost. In accordance with SAS 36, Impairment of Assets, provision is made on an individual basis where there is impairment in value. This new policy is applied prospectively with effect from 1 April 2001. Prior to the adoption of SAS 36, provision was made only where there is a permanent impairment in value.

Investments held as current assets are stated at the lower of cost and market value.

Transaction costs associated with the investments are expensed off in the period in which they are incurred.

47 FINANCIAL INFORMATION OF THE AUTHORITY

2. Signi®cant accounting policies (cont'd) (j) Stocks Stocks are stated at the lower of cost and net realisable value after making allowance for damaged, obsolete and slow-moving items, if any. Cost is determined on a ®rst-in ®rst-out basis. Net realisable value is the estimated selling price less anticipated cost of disposal.

(k) Trade and other debtors Trade and other debtors are recognised and carried at original invoiced amount less an allowance for any uncollectible amounts, if any. Bad debts are written-off when they are con®rmed to be irrecoverable.

(l) Long-term loan Loans are recognised at the initial cost, being the fair value of the consideration received. Transaction costs associated with the loans are charged to the income and expenditure statement in the period in which they are incurred.

(m) Impairment The carrying amounts of the Authority's assets, other than stocks, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.

An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. All impairment losses are recognised in the income and expenditure statement. This new policy is applied prospectively with effect from 1 April 2001, consistent with SAS 36, Impairment of Assets.

(n) Trade and other creditors Liabilities for trade and other creditors are carried at cost, which is the fair value of the consideration to be paid in the future, for goods and services received, whether or not billed to the Authority.

(o) Provisions Provisions are recognised when the Authority has a present obligation (legal or constructive) as a result of a past event, it is probable that an out¯ow of resources embodying economic bene®ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

3. Capital account The capital account comprises the net values of ®xed assets transferred from the Roads and Transportation Division of the former Public Works Department, the Land Transport Division of the former Ministry of Communications and the then Registry of Vehicles.

48 FINANCIAL INFORMATION OF THE AUTHORITY

4. Deferred capital grants As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Balance as at beginning of period/year 1 April 7,635,759 6,621,781 Capital grants received and utilised during the ®nancial period (Note 15) 562,141 1,107,274

8,197,900 7,729,055 Less: Amortisation to income and expenditure statement (51,031) (93,296)

8,146,869 7,635,759

Total grants received and utilised since establishment 10,098,629 9,536,488

5. Staff loan fund The staff loan fund was set up from advances received from the Government for the purpose of providing loans to the staff.

Balance as at beginning of period/year 1 April 615 1,195 Excess funds returned to Government (18) (580)

597 615

Represented by: Staff loans (Note 11) 586 610 Bank balance 11 5

597 615

No further new loans have been granted to staff through this fund. The fund will be drawn down through periodic return of loan repayment from staff and redemption to the Government.

49 6. Fixed assets Furniture, Viaducts Buildings fittings, and Railway and Train Operating Motor and office Land tunnels tracks structures fleet equipment Computers vehicles equipment Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Cost As at 1 April 2002 706,038 1,757,310 408,625 1,977,346 132,331 359,705 51,131 4,221 19,039 5,415,746 AUTHORITY THE OF INFORMATION FINANCIAL Additions - - - 242 - - 2,674 - 435 3,351 Transferred (to)/from construction-in- progress (Note 7) (2,659) 707 - 1,722 248 4,953 - - - 4,971 Disposals and write-off ------(910) - (47) (957) As at 30 September 2002 703,379 1,758,017 408,625 1,979,310 132,579 364,658 52,895 4,221 19,427 5,423,111 Accumulated depreciation As at 1 April 2002 75,610 191,176 43,536 503,679 10,483 83,775 43,644 3,375 9,691 964,969 50 Charge for the ®nancial period 3,292 8,880 2,065 23,552 3,280 16,441 2,670 239 812 61,231 Disposals and write-off ------(905) - (31) (936) As at 30 September 2002 78,902 200,056 45,601 527,231 13,763 100,216 45,409 3,614 10,472 1,025,264 Charge for the ®nancial year 2001/2002 7,040 16,827 3,900 43,242 5,075 30,670 10,586 701 1,614 119,655

Net book value As at 30 September 2002 624,477 1,557,961 363,024 1,452,079 118,816 264,442 7,486 607 8,955 4,397,847

As at 31 March 2002 630,428 1,566,134 365,089 1,473,667 121,848 275,930 7,487 846 9,348 4,450,777 FINANCIAL INFORMATION OF THE AUTHORITY

7. Construction-in-progress This represents mainly the cost of rail and road-related projects under construction.

As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Balance as at beginning of period/year 1 April 4,649,329 3,552,422 Expenditure incurred 786,809 1,605,815 Completed projects transferred to ®xed assets (Note 6) (4,971) (508,908)

5,431,167 4,649,329

Construction-in-progress comprises: Land costs 549,310 491,352 Construction costs 4,149,759 3,512,755 Development costs 732,098 645,222

5,431,167 4,649,329

8. Investment in subsidiary companies Unquoted equity shares, at cost 500 500

The details of the subsidiary companies are as follows:

Company Shares Percentage Principal activity at cost shareholding

MSI Global Private $500,000 100% To carry on the business of Limited consultancy in land transport and related industries and to develop and/or operate electronic services related to land transport.

EZ-Link Pte Ltd $2 100% To provide, develop, manage and promote the multi-purpose stored value smart card service business and the usage of the stored value smart card in Singapore.

The subsidiary companies are incorporated in Singapore. Consolidated ®nancial statements are not prepared as the assets, liabilities and operating results of these companies are not signi®cant.

51 FINANCIAL INFORMATION OF THE AUTHORITY

9. Long-term investments As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Funds managed internally Cost 28,055 28,055 Less: Provision for impairment loss (5,392) (1,312)

22,663 26,743 Funds managed by fund manager, at cost 199,739 202,667

222,402 229,410

As at As at 30 Sep 02 31 Mar 02 Market Market Cost value Cost value $'000 $'000 $'000 $'000 Long-term investments are analysed as follows: Quoted investments Funds managed internally Equities, at cost 14,055 14,055 Provision for impairment loss (5,392) (1,312)

8,663 8,842 12,743 12,743 Bonds 14,000 14,349 14,000 14,286

22,663 23,191 26,743 27,029

Funds managed by fund manager Equities 28,525 23,567 24,490 22,521 Unit trusts 13,449 13,732 10,249 10,491 Bonds 148,367 156,843 162,367 165,051

190,341 194,142 197,106 198,063

213,004 217,333 223,849 225,092

Uninvested cash held by fund manager 9,376 5,360 Others 22 201

222,402 229,410

The funds placed with professional fund manager are under two guaranteed principal schemes and any shortfall can be recovered upon the expiry of the fund management agreements.

52 FINANCIAL INFORMATION OF THE AUTHORITY

10. Amount due from sale of operating assets The Authority signed a licence and operating Agreement (the Agreement) with the Singapore MRT Limited (SMRT) on 1 April 1998. The Agreement gave SMRT the licence to operate the existing Mass Rapid Transit (MRT) system for the next 30 years. The operating assets were sold to SMRT at their carrying value, and the proceeds were repayable over ®ve equal annual instalments commencing from 1998. The proceeds have been fully received and returned to the Government.

Proceeds due from the sale of operating assets are re¯ected in the balance sheet as follows:

As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Amount receivable within one year (Note 13) - 252,915

Proceeds to be returned to the Government are re¯ected in the balance sheet as follows:

Amount payable within one year (Note 17) - 252,915

11. Staff loans Amounts receivable within one year (Note 13) 53 51 Amounts receivable after one year 533 559

586 610

Staff loans are repayable with interest at 5% to 6.5% per annum (calculated on a monthly basis) (31 March 2002: 5% to 6.5%) by monthly instalments, over periods up to 25 years for housing loans and up to 10 years for other loans.

12. Stocks Stocks stated at cost comprise of in-vehicle units to be ®tted into vehicles in connection with the implementation of the Electronic Road Pricing Scheme.

13. Debtors, deposits and prepayments Debtors and prepayments 151,123 50,989 Amounts due from subsidiary companies 2,123 2,815 Deposits 521 442 Staff loans (Note 11) 53 51 Accrued interest receivable 41 135 Amount due from sale of operating assets (Note 10) - 252,915

153,861 307,347

53 FINANCIAL INFORMATION OF THE AUTHORITY

14. Amount due from Government As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Balance as at beginning of period/year 1 April 939 12,383 Amount received during the ®nancial period (147,570) (352,270) Unutilised advances returned to Government - 7,952 Amount utilised during the ®nancial period 150,332 332,874

3,701 939

Funds are received on a monthly basis from the Government for the construction of roads, road related infrastructure and Government building. As the construction is done on behalf of the Government, the roads, road related infrastructure and Government building do not form part of the assets of the Authority.

15. Grants receivable Balance as at beginning of period/year 1 April 89,389 83,011 Grants received from Government (460,044) (1,100,896) Grants utilised and transferred to deferred capital grants (Note 4) 562,141 1,107,274

191,486 89,389

Grants are received from the Government for the construction of the rapid transit systems, and the development and purchase of depreciable assets. Grants utilised and transferred to deferred capital grants comprise primarily of amounts incurred for construction-in-progress.

16. Short-term investments Variable/¯oating rate notes, at cost (Note 25) 6,000 6,000

The variable/¯oating rate notes carried interest of 1.0125% per annum to 1.4% per annum (31 March 2002: 1.25% per annum to 2.8125% per annum) during the six months ended 30 September 2002. The variable/¯oating rate notes will mature by October 2002.

54 FINANCIAL INFORMATION OF THE AUTHORITY

17. Creditors and accruals As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Creditors and accruals 236,481 291,982 Accrual of annual leave 12,280 9,946 Deposits 3,838 4,189 Provision for pensions and gratuities (Note 18) 927 877 Proceeds from sale of operating assets to be returned to Government (Note 10) - 252,915

253,526 559,909

18. Provision for pensions and gratuities

Balance as at beginning of period/year 1 April 20,985 20,566 Accrued for the ®nancial period (83) 2,248 Utilised during the ®nancial period (693) (1,829) 20,209 20,985

Amount payable within one year (Note 17) 927 877 Amount payable after one year 19,282 20,108 20,209 20,985

19. Long-term loans This comprises of unsecured bonds issued and the details are as follows:

Principal Coupon Rate Issue Date Tenure Maturity $300,000,000 4.92% 13 July 1999 10 years 13 July 2009 $500,000,000 4.81% 9 June 2000 10 years 9 June 2010 $500,000,000 4.17% 10 May 2001 15 years 10 May 2016 $200,000,000 3.76% 21 May 2002 7 years 21 May 2009 $300,000,000 4.08% 21 May 2002 10 years 21 May 2012

Interest is payable semi-annually.

55 FINANCIAL INFORMATION OF THE AUTHORITY

20. Operating income 1 Apr 02 1 Apr 01 to to 30 Sep 02 30 Sep 01 $'000 $'000 Management fees 190,732 208,601 Composition ®nes 11,248 10,873 Vehicle transit licensing fees 9,754 10,484 New motor vehicle registration fees 6,208 6,603 Sales, search & supply of information 2,292 2,080 Administration fees 1,430 1,284 Car park related fees 1,206 1,130 Rapid transit system lease and licensing fees* 141 205 Others 3,798 4,420

226,809 245,680

* Rapid transit system lease and licensing fees includes the licence fee paid annually to the Authority by SMRT for the lease of the operating assets for a period of 30 years commencing 1 April 1998. The licence fee is derived based on SMRT's Passenger Revenue.

SMRT is required to operate the MRT System in accordance with the Operating Performance Standard and other train service guidelines as prescribed by the Authority, and other applicable laws and regulations as may be in force from time to time.

Upon expiration or cancellation of the licence, SMRT is required to surrender all parts of the MRT system owned by the Authority in a condition substantially similar to their state as at the date of the Agreement subject to reasonable wear and tear.

21. Operating expenditure

Operating expenditure comprises mainly:

Manpower costs 61,184 53,126 Depreciation of ®xed assets 61,231 53,972 Maintenance and upkeep 53,388 47,323 Bond interest expense 37,112 27,790 Improvement of commuter facilities 36,194 40,884 Contribution to Central Provident Fund 8,167 7,023 Utilities 8,010 12,096 Agency fees 7,793 9,309 Rental of of®ce premises 6,036 4,851 Electronic road pricing expenses 2,215 5,618 Board members' allowances 70 70 Pensions and gratuities (186) 331

56 FINANCIAL INFORMATION OF THE AUTHORITY

22. Non-operating (de®cit)/surplus 1 Apr 02 1 Apr 01 to to 30 Sep 02 30 Sep 01 $'000 $'000 Interest income 1,004 3,594 Dividend income 235 212 Impairment loss on long-term investments (4,080) - Net (loss)/gain from funds managed by fund manager (2,928) 1,007 Others - 196

(5,769) 5,009

Net gain from funds managed by fund manager comprises: Interest income 1,387 940 Dividend income 147 340 Other (loss)/income (3,902) 26 Fund management and other fees (560) (299)

(2,928) 1,007

23. Contribution to consolidated fund This represents the contribution to be made to the consolidated fund in accordance with Section 3(a) of the Statutory Corporations (Contributions to Consolidated Fund) Act (Chapter 319A). The contribution for the six months ended 30 September 2002 under review is based on 22.0% (30 September 2001: 24.5%) of the net surplus of the Authority.

24. Related party transactions Technical and other services: Rendered to subsidiary company (336) (3) Rendered by subsidiary company 146 -

The above transactions are entered into on terms agreed between the parties.

25. Cash and cash equivalents As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Fixed deposits 307,630 288,231 Cash and bank balances 42,842 24,283 Variable/¯oating rate notes, at cost (Note 16) 6,000 6,000 356,472 318,514

57 FINANCIAL INFORMATION OF THE AUTHORITY

26. Future capital and other expenditure As at As at 30 Sep 02 31 Mar 02 $'000 $'000 Capital and other expenditure approved by the Authority but not provided for in the ®nancial statements are as follows: Amounts approved and contracted for 3,359,117 2,444,831 Amounts approved but not contracted for 4,256,331 6,015,198 7,615,448 8,460,029

27. Operating lease commitments Rental expense for the six months ended 30 September 2002 amounted to $6,036,000 (30 September 2001: $4,851,000). Future minimum rentals under non-cancellable leases as of 30 September are as follows:

Within one year 9,756 7,908 After one year but not more than ®ve years 8,647 5,946 18,403 13,854

28. Financial risk management objectives and policies The main risks arising from the Authority's ®nancial instruments are interest rate risk, foreign currency risk and credit risk, which are summarised below:

Interest rate risk The Authority's exposure to interest rate risk relates primarily to the Authority's investment portfolios and long-term debt obligations. The Authority does not use derivative ®nancial instruments to hedge its investment portfolio.

The Authority obtains external ®nancing through long-term borrowings in the debt capital market. The long-term borrowings are issued on ®xed rate basis and this enables the Authority to effectively manage its interest costs with known certainty.

Foreign currency risk The Authority is exposed to foreign currency risk arising from its payment obligations for contracts that have been awarded in foreign or mixed currencies. The Authority primarily utilises foreign exchange forward contracts that match the payment pro®le of such contracts. The primary purpose of the Authority's foreign currency hedging activities is to protect against the volatility associated with foreign currency payment obligations under such contracts.

Credit risk The carrying amounts of investments, debtors and cash represent the Authority's maximum exposure to credit risk. The Authority has no signi®cant concentration of credit risks with any single counterparty. Cash is placed with established ®nancial institutions.

58 FINANCIAL INFORMATION OF THE AUTHORITY

29. Fair value of ®nancial instruments The aggregate net fair values of ®nancial assets and ®nancial liabilities of the Authority which are not carried at fair value in the balance sheet as at 30 September 2002 are presented in the following table: As at As at 30 Sep 02 31 Mar 02 Carrying Carrying amount Fair value Amount Fair value $'000 $'000 $'000 $'000 Financial Assets Staff loans 585 575 610 592 Financial Liabilities Long-term loans 1,800,000 1,930,520 1,300,000 1,330,030

The fair value of staff loans are estimated using discounted cash ¯ow analysis, based on current lending rates for similar types of lending and borrowing arrangements. The fair value of long-term loans are determined by reference to market values.

Forward currency ®nancial instruments The Authority enters into forward contracts to hedge the payment of foreign currency liabilities arising from the construction of rapid transit system projects. As at 30 September 2002, the notional amount of the forward contracts entered is $410,348,920, and the fair value of unrealised exchange gain amounts to $23,808,641.

30. Segment reporting The Authority operates in one segment, which is land transport and in one geographical area, Singapore. Consequently, no segment information has been presented.

31. Comparative ®gures Certain comparative ®gures have been reclassi®ed or adjusted to conform to the current period's presentation.

59 FINANCIAL INFORMATION OF THE AUTHORITY

APPENDIX II

Audited ®nancial statements of Land Transport Authority of Singapore for the ®nancial year ended 31 March 2002

60 FINANCIAL INFORMATION OF THE AUTHORITY

Report on the Audit of the Financial Statements We have audited the accompanying ®nancial statements of the Land Transport Authority of Singapore (the ``Authority'') set out on pages 62to 80. These ®nancial statements comprise the balance sheet of the Authority as at 31 March 2002, the income and expenditure statement, the statement of changes in equity, and the statement of cash ¯ow of the Authority for the ®nancial year then ended. These ®nancial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these ®nancial statements based on our audit.

We conducted our audit in accordance with Land Transport Authority of Singapore Act (Chapter 158A) and the Singapore Standards on Auditing. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ®nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ®nancial statements. An audit also includes assessing the accounting principles used and signi®cant estimates made by the management, as well as evaluating the overall ®nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, (a) the accompanying ®nancial statements are properly drawn up in accordance with the provisions of the Land Transport Authority of Singapore Act (Chapter 158A), (``Act'') and the Singapore Statements of Accounting Standard, so as to present fairly the state of affairs of the Authority as at 31 March 2002, and of the results, changes in equity and cash ¯ows of the Authority for the ®nancial year then ended; (b) proper accounting and other records have been kept, including records of all assets of the Authority whether purchased, donated or otherwise; and (c) the receipts, expenditure, investment of moneys, and the acquisition and disposal of assets by the Authority during the ®nancial year were in accordance with the provisions of the Act.

ERNST & YOUNG Certi®ed Public Accountants

Singapore 26 June 2002

61 FINANCIAL INFORMATION OF THE AUTHORITY

Balance Sheet As at 31 March 2002 Note 2002 2001 $'000 $'000 Capital account 3 102,954 102,954 Accumulated surplus 438,858 422,364 Deferred capital grants 4 7,635,759 6,621,781 Staff loan fund 5 615 1,195 8,178,186 7,148,294

Represented by: Fixed assets 6 4,450,777 4,034,741 Construction-in-progress 7 4,649,329 3,552,422 Investment in subsidiary companies 8 500 500 Long-term investments 9 229,410 222,590 Amount due from sale of operating assets 10 - 252,915 Staff loans 11 559 982

CURRENT ASSETS Stocks 12 23,226 21,280 Advances to contractors 104,841 25,269 Debtors, deposits and prepayments 13 307,347 359,305 Amount due from Government 14 939 12,383 Grants receivable 15 89,389 83,011 Short-term investments 16 6,000 7,000 Fixed deposits 288,231 384,256 Cash and bank balances 24,283 44,504

844,256 937,008 CURRENT LIABILITIES Creditors and accruals 17 559,909 639,317 Provision for contribution to consolidated fund 5,3527,284 565,261 646,601

NET CURRENT ASSETS 278,995 290,407 LONG-TERMLIABILITIES Retention monies 111,276 134,139 Provision for return of funds to Government 10 - 252,915 Provision for pensions and gratuities 18 20,108 19,209 Long-term loans 19 1,300,000 800,000 8,178,186 7,148,294

Fock Siew Wah Han Eng Juan Chairman Chief Executive 26 June 2002 26 June 2002

The accompanying notes form an integral part of the ®nancial statements.

62 FINANCIAL INFORMATION OF THE AUTHORITY

Income and Expenditure Statement For the ®nancial year ended 31 March 2002

Note 2001/2002 2000/2001 $'000 $'000 Operating income 20 456,213 475,848 Operating expenditure 21 (592,061) (573,891)

Operating de®cit (135,848) (98,043) Non-operating surplus 22 6,859 11,189 De®cit before Government grants (128,989) (86,854) Deferred capital grants amortised 4 93,296 87,219 Other grants 57,539 34,198 Surplus before contribution to consolidated fund 21,846 34,563 Contribution to consolidated fund 23 (5,352) (7,284) Net surplus for the ®nancial year 16,494 27,279 Accumulated surplus as at 1 April 422,364 395,085 Accumulated surplus as at 31 March* 438,858 422,364

* The accumulated surplus has been set aside by the Authority for speci®c transport-related projects which include the Traf®c Management Improvement Programs, Computerised Traf®c Systems and upgrading of commuter facilities.

The accompanying notes form an integral part of the ®nancial statements.

63 FINANCIAL INFORMATION OF THE AUTHORITY

Statement of Changes in Equity For the ®nancial year ended 31 March 2002

Deferred Capital Accumulated capital Note account surplus grants Total $'000 $'000 $'000 $'000 Balance as at 1 April 2000 As previously reported 102,954 401,420 5,733,162 6,237,536 Effect of change in accounting policy 2b - (6,335) - (6,335)

As restated 102,954 395,085 5,733,162 6,231,201 Capital grants amortised in the ®nancial year - - (87,219) (87,219) Capital grants utilised in the ®nancial year - - 975,838 975,838 Net surplus for the ®nancial year - 27,279 - 27,279

Balance as at 31 March 2001 102,954 422,364 6,621,781 7,147,099

Balance as at 1 April 2001 As previously reported 102,954 430,557 6,621,781 7,155,292 Effect of change in accounting policy 2b - (8,193) - (8,193)

As restated 102,954 422,364 6,621,781 7,147,099 Capital grants amortised in the ®nancial year - - (93,296) (93,296) Capital grants utilised in the ®nancial year - - 1,107,274 1,107,274 Net surplus for the ®nancial year - 16,494 - 16,494 Balance as at 31 March 2002 102,954 438,858 7,635,759 8,177,571

The accompanying notes form an integral part of the ®nancial statements.

64 FINANCIAL INFORMATION OF THE AUTHORITY

Statement of Cash Flow For the ®nancial year ended 31 March 2002 Note 2001/2002 2000/2001 $'000 $'000 CASH FLOWS FROMOPERATING ACTIVITIES De®cit before Government grants and contribution to consolidated fund (128,989) (86,854) Adjustments for: Depreciation of ®xed assets 119,655 111,441 Loss on disposal of ®xed assets - 186 Bond interest expense 57,539 34,198 Provision for pensions and gratuities 1,804 1,865 Interest and investment income (6,859) (11,189) Operating surplus before working capital changes 43,150 49,647 Increase in stocks (1,946) (3,970) (Increase)/decrease in advances to contractors (79,572) 30,435 Decrease in debtors, deposits and prepayments 46,974 12,762 Decrease/(increase) in amount due from Government 11,444 (10,552) (Decrease)/increase in creditors and accruals (109,565) 140,697 Cash (used in)/provided by operations (89,515) 219,019 Payment of pensions and gratuities (1,829) (1,232) Contribution to consolidated fund (7,284) (18,260) Repayment of staff loans 517 342 Payment of bond interest and charges (51,033) (23,704)

Net cash (used in)/provided by operating activities (149,144) 176,165

CASH FLOWS FROMINVESTING ACTIVITIES Purchase of ®xed assets (26,860) (17,643) Additions to construction-in-progress (1,605,815) (1,463,530) Interest income received 5,726 10,554 Dividend received 263 821 Proceeds from sale of investments 1,460 6,585 Investment expenses (13) (208) Proceeds from sale of ®xed assets 252,992 252,929 Purchase of investment instruments (7,043) (17,786) Investment with fund manager - (200,000) Net cash used in investing activities (1,379,290) (1,428,278)

CASH FLOWS FROMFINANCING ACTIVITIES Grants from Government and other Statutory Board 1,164,683 874,548 Proceeds from long-term loans 500,000 500,000 Return of excess funds in staff loan fund to Government (580) (307) Return of proceeds from sale of operating assets to Government (252,915) (252,914) Net cash provided by ®nancing activities 1,411,188 1,121,327 Net decrease in cash and cash equivalents (117,246) (130,786) Cash and cash equivalents as at 1 April 435,760 566,546 Cash and cash equivalents as at 31 March 25 318,514 435,760

The accompanying notes form an integral part of the ®nancial statements.

65 FINANCIAL INFORMATION OF THE AUTHORITY

Notes to the Financial Statements Year ended 31 March 2002

1. Corporate information The head of®ce of the Land Transport Authority is located at 460, Alexandra Road# 28-00, PSA Building, Singapore 119963.

The scope of activities of the Land Transport Authority of Singapore (the ``Authority'') is: (a) to act as agent of the Government in the administration, assessment, collection and enforcement of various taxes, fees and charges and other services relating to land transport; (b) to plan, design, construct, manage and maintain roads and related facilities; (c) to plan, design, construct, manage and maintain the rapid transit systems; (d) to co-ordinate land transport services; (e) to advise the Government on matters relating to the land transport system in Singapore; and (f) to represent Singapore internationally in matters relating to land transport.

As at 31 March 2002, the Authority had 3,586 employees (31 March 2001: 3,462 employees).

2. Signi®cant accounting policies (a) Basis of accounting The ®nancial statements of the Authority which are expressed in Singapore dollars, have been prepared under the historical cost convention and in accordance with the Singapore Statements of Accounting Standard.

The accounting policies have been consistently applied by the Authority except for the change in accounting policy discussed more fully in 2(b) below.

(b) Change in accounting policy Employees' leave entitlement The Authority adopted SAS 17 (Revised 2000), Employee Bene®ts. In accordance with SAS 17 (Revised 2000), employees' entitlements to annual leave are accrued when they are earned by the employees for services rendered to the Authority. Prior to the adoption of SAS 17 (Revised 2000), the cost of employee leave entitlement was recognised only when it was encashed.

As a result of the adoption of the accounting policy, an amount of $1,753,000 was charged to the income and expenditure statement for ®nancial year 2001/2002 (Financial year 2000/2001: $1,858,000). In addition, the accumulated surplus of the Authority as at the balance sheet date was reduced by $9,946,000 (2001: $8,193,000). Comparatives ®gures have been restated accordingly.

66 FINANCIAL INFORMATION OF THE AUTHORITY

2. Signi®cant accounting policies (cont'd) (c) Basis of recognising income Vehicle related licence fees and other fees are accounted for in the year in which the charges are collected. There is no apportionment of income.

Composition ®nes are recognised at the point of collection.

Other income is recognised upon completion of services.

Interest income is recognised on the accrual basis.

Dividends are recognised on the date they are declared payable.

(d) Foreign currency transactions Foreign currency transactions during the ®nancial year are converted into local currency at rates closely approximating those ruling on the transaction dates, except for hedged transactions which are recorded at the contracted forward exchange rates.

Foreign currency monetary assets and liabilities are converted into local currency at exchange rates ruling at the balance sheet date and exchange differences arising from conversion are included in the income and expenditure statement. Foreign currency monetary assets and liabilities hedged by forward exchange contracts are translated into the local currency at the contracted forward exchange rates.

(e) Government grants Government grants received for the purchase or the construction of depreciable assets are accounted for as deferred capital grants. The deferred capital grants are amortised and charged to the income and expenditure statement over the periods necessary to match the annual depreciation charge of these assets or when the assets are disposed or written off.

(f) Employees' bene®ts (i) Contributions to CPF Contributions made by the Authority for the bene®t of its employees to the Central Provident Fund (CPF) under the state pension scheme are recognised as compensation expense in the same period as the employment that gives rise to the contribution.

(ii) Pensions and gratuities Provision for pensions and gratuities is made for the payment of retirement bene®ts to pensionable of®cers transferred to the Authority on 1 September 1995 and to expatriate of®cers who had opted for the gratuity scheme.

The cost of pension bene®t due to pensionable of®cers is determined based on the estimated present value of the future cash out¯ows to be made in respect of services provided by these pensionable of®cers up to the balance sheet date.

67 FINANCIAL INFORMATION OF THE AUTHORITY

2. Signi®cant accounting policies (cont'd) (g) Fixed assets and depreciation Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated on the straight line basis so as to write off the cost of the assets over their estimated useful lives as follows:

Years Land, viaducts, tunnels and railway tracks 99 Buildings and structures 20 ± 60 Train ¯eet 8 ± 30 Operating equipment 2± 30 Computers 2± 7 Motor vehicles 5 Furniture, ®ttings and of®ce equipment 3 ± 10

Fixed assets costing less than $1,000 each are charged to the income and expenditure statement in the year of purchase.

Capital expenditure incurred on State property is charged to the income and expenditure statement in the year in which the expenditure is incurred.

(h) Construction-in-progress Construction-in-progress is stated at cost, and comprises land costs, construction costs and development costs.

Land costs include land acquisition, resettlement and clearance costs.

Construction costs are recorded based on contract progress payments for certi®ed works and services.

Development costs include manpower costs and other construction overheads.

(i) Investments Investments held on a long-term basis are stated at cost. In accordance with SAS 36, Impairment of Assets, provision is made on an individual basis where there is impairment in value. This new policy is applied prospectively with effect from 1 April 2001. Prior to the adoption of SAS 36, provision was made only where there is a permanent impairment in value.

Investments held as current assets are stated at the lower of cost and market value.

Transaction costs associated with the investments are expensed off in the period in which they are incurred.

(j) Stocks Stocks are stated at the lower of cost and net realisable value after making allowance for damaged, obsolete and slow-moving items, if any. Cost is determined on a ®rst-in ®rst-out basis. Net realisable value is the estimated selling price less anticipated cost of disposal.

68 FINANCIAL INFORMATION OF THE AUTHORITY

2. Signi®cant accounting policies (cont'd) (k) Trade and other debtors

Trade and other debtors are recognised and carried at original invoiced amount less an allowance for any uncollectible amounts, if any. Bad debts are written-off when they are con®rmed to be irrecoverable.

(l) Long-term loan Loans are recognised at the initial cost, being the fair value of the consideration received. Transaction costs associated with the loans are charged to the income and expenditure statement in the period in which they are incurred.

(m) Impairment The carrying amounts of the Authority's assets, other than stocks, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.

An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. All impairment losses are recognised in the income and expenditure statement. This new policy is applied prospectively with effect from 1 April 2001, consistent with SAS 36, Impairment of Assets.

(n) Trade and other creditors Liabilities for trade and other creditors are carried at cost, which is the fair value of the consideration to be paid in the future, for goods and services received, whether or not billed to the Authority.

(o) Provisions Provisions are recognised when the Authority has a present obligation (legal or constructive) as a result of a past event, it is probable that an out¯ow of resources embodying economic bene®ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

3. Capital account The capital account comprises the net values of ®xed assets transferred from the Roads and Transportation Division of the former Public Works Department, the Land Transport Division of the former Ministry of Communications and the then Registry of Vehicles.

69 FINANCIAL INFORMATION OF THE AUTHORITY

4. Deferred capital grants 2002 2001 $'000 $'000 Balance as at 1 April 6,621,781 5,733,162 Capital grants received and utilised during the ®nancial year 1,107,274 975,838

7,729,055 6,709,000 Less: Amortisation to income and expenditure statement (93,296) (87,219)

Balance as at 31 March 7,635,759 6,621,781

Total grants received and utilised since establishment 9,536,488 8,429,214

5. Staff loan fund The staff loan fund was set up from advances received from the Government for the purpose of providing loans to the staff.

Balance as at 1 April 1,195 1,502 Excess funds returned to Government (580) (307)

Balance as at 31 March 615 1,195

Represented by: Staff loans (Note 11) 610 1,127 Bank balance 5 68 615 1,195

No further new loans have been granted to staff through this fund. The fund will be drawn down through periodic return of loan repayment from staff and redemption to the Government.

70 6. Fixed assets Furniture, Viaducts Buildings fittings, and Railway and Train Operating Motor and office Land tunnels tracks structures fleet equipment Computers vehicles equipment Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Cost As at 1 April 2001 682,649 1,647,608 406,667 1,734,025 96,772 247,689 44,745 4,174 17,380 4,881,709 AUTHORITY THE OF INFORMATION FINANCIAL Additions - - - 1,143 - 16,861 7,036 83 1,737 26,860 Transferred from construction-in- progress (Note 7) 23,389 109,702 1,958 242,178 35,559 96,122 - - - 508,908 Disposals and write-off - - - - - (967) (650) (36) (78) (1,731)

As at 31 March 2002 706,038 1,757,310 408,625 1,977,346 132,331 359,705 51,131 4,221 19,039 5,415,746

Accumulated depreciation As at 1 April 2001 68,570 174,349 39,636 460,437 5,408 54,011 33,705 2,705 8,147 846,968 71 Charge for the ®nancial year 7,040 16,827 3,900 43,242 5,075 30,670 10,586 701 1,614 119,655 Disposals and write-off - - - - - (906) (647) (31) (70) (1,654)

As at 31 March 2002 75,610 191,176 43,536 503,679 10,483 83,775 43,644 3,375 9,691 964,969

Charge for the ®nancial year 2000/2001 6,870 16,504 3,774 41,027 3,905 25,523 11,049 673 2,116 111,441

Net book value As at 31 March 2002 630,428 1,566,134 365,089 1,473,667 121,848 275,930 7,487 846 9,348 4,450,777

As at 31 March 2001 614,079 1,473,259 367,031 1,273,588 91,364 193,678 11,040 1,469 9,233 4,034,741 FINANCIAL INFORMATION OF THE AUTHORITY

7. Construction-in-progress This represents mainly the cost of rail and road-related projects under construction.

2002 2001 $'000 $'000 Balance as at 1 April 3,552,422 2,270,104 Expenditure incurred 1,605,815 1,463,530 Completed projects transferred to ®xed assets (Note 6) (508,908) (181,212) Balance as at 31 March 4,649,329 3,552,422

Construction-in-progress comprises: Land costs 491,352301,169 Construction costs 3,512,755 2,773,232 Development costs 645,222 478,021 4,649,329 3,552,422

8. Investment in subsidiary companies Unquoted equity shares, at cost 500 500

The details of the subsidiary companies are as follows:

Shares Percentage Company at cost shareholding Principal activity MSI Global Private $500,000 100% To carry on the business of Limited consultancy in land transport and related industries and to develop and/or operate electronic services related to land transport. EZ-Link Pte Ltd $2100% To provide, develop, manage and promote the multi-purpose stored value smart card service business and the usage of the stored value smart card in Singapore.

The subsidiary companies are incorporated in Singapore. Consolidated ®nancial statements are not prepared as the assets, liabilities and operating results of these companies are not signi®cant.

72 FINANCIAL INFORMATION OF THE AUTHORITY

9. Long-term investments 2002 2001 $'000 $'000 Funds managed internally Cost 28,055 22,270 Less: Provision for impairment loss (Note 22) (1,312) - 26,743 22,270 Funds managed by fund manager, at cost 202,667 200,320

229,410 222,590

2002 2001 Market Market Cost value Cost value $'000 $'000 $'000 $'000 Long-term investments are analysed as follows: Quoted investments Funds managed internally Equities, at cost 14,055 12,270 Provision for impairment loss (1,312) -

12,743 12,743 12,270 9,776 Bonds 14,000 14,286 10,000 10,774

26,743 27,029 22,270 20,550

Funds managed by fund manager Equities 24,490 22,521 16,339 14,982 Unit trusts 10,249 10,491 10,000 10,153 Bonds 162,367 165,051 140,933 141,646

197,106 198,063 167,272 166,781

223,849 225,092 189,542 187,331

Uninvested cash held by fund manager 5,360 32,943 Others 201 105

229,410 222,590

The funds placed with professional fund manager are under two guaranteed principal schemes and any shortfall can be recovered upon the expiry of the fund management agreements.

73 FINANCIAL INFORMATION OF THE AUTHORITY

10. Amount due from sale of operating assets The Authority signed a licence and operating Agreement (the Agreement) with the Singapore MRT Limited (SMRT) on 1 April 1998. The Agreement gave SMRT the licence to operate the existing Mass Rapid Transit (MRT) system for the next 30 years. A licence fee calculated, in accordance with the Agreement, will be paid annually to the Authority. The licence fee will be reviewed every ®ve years. As part of the Agreement, the operating assets for the MRT system were sold at net book value to SMRT. The proceeds from the sale of operating assets are payable in ®ve equal annual instalments from 1998 to 2002. The proceeds will be returned to the Government.

Proceeds due from the sale of operating assets are re¯ected in the balance sheet as follows:

2002 2001 $'000 $'000 Amount receivable within one year (Note 13) 252,915 252,915 Amount receivable after one year - 252,915

252,915 505,830

Proceeds to be returned to the Government are re¯ected in the balance sheet as follows: Amount payable within one year (Note 17) 252,915 252,915 Amount payable after one year - 252,915

252,915 505,830

11. Staff loans Amounts receivable within one year (Note 13) 51 145 Amounts receivable after one year 559 982

610 1,127

Staff loans are repayable with interest at 5% to 6.5% per annum (calculated on a monthly basis) (2001: 5% to 6.5%) by monthly instalments, over periods up to 25 years for housing loans and up to 10 years for other loans.

12. Stocks Stocks stated at cost comprise of in-vehicle units to be ®tted into vehicles in connection with the implementation of the Electronic Road Pricing Scheme.

74 FINANCIAL INFORMATION OF THE AUTHORITY

13. Debtors, deposits and prepayments 2002 2001 $'000 $'000 Amount due from sale of operating assets (Note 10) 252,915 252,915 Debtors and prepayments 50,989 105,334 Amounts due from subsidiary companies 2,815 - Deposits 442422 Accrued interest receivable 135 489 Staff loans (Note 11) 51 145

307,347 359,305

14. Amount due from Government Balance as at 1 April 12,383 7,510 Amount received during the ®nancial year (352,270) (224,083) Unutilised advances returned to Government 7,95211,430 Amount utilised during the ®nancial year 332,874 217,526

Balance as at 31 March 939 12,383

Funds are received on a monthly basis from the Government for the construction of roads, road related infrastructure and Government building. As the construction is done on behalf of the Government, the roads, road related infrastructure and Government building do not form part of the assets of the Authority.

15. Grants receivable

Balance as at 1 April 83,011 (47,583) Grants received from Government (1,100,896) (851,120) Grants received from other Statutory Board - (6) Grants utilised and transferred to deferred capital grants 1,107,274 981,720

Balance as at 31 March 89,389 83,011

Grants are received from the Government for the construction of the rapid transit systems, and the development and purchase of depreciable assets. Grants utilised and transferred to deferred capital grants comprise primarily of amounts incurred for construction-in-progress.

75 FINANCIAL INFORMATION OF THE AUTHORITY

16. Short-term investments 2002 2001 $'000 $'000 Variable/¯oating rate notes, at cost (Note 25) 6,000 7,000

The variable/¯oating rate notes carried interest of 1.25% per annum to 2.8125% per annum (2001: 2.4375% per annum to 3.125% per annum) during the ®nancial year. The variable/ ¯oating rate notes will mature by June 2002.

17. Creditors and accruals Creditors and accruals 291,982 369,144 Proceeds from sale of operating assets to be returned to Government (Note 10) 252,915 252,915 Accrual of annual leave 9,946 8,193 Deposits 4,189 7,708 Provision for pensions and gratuities (Note 18) 877 1,357

559,909 639,317

18. Provision for pensions and gratuities Balance as at 1 April 20,566 19,628 Accrued for the ®nancial year 2,248 2,170 Utilised during the ®nancial year (1,829) (1,232)

Balance as at 31 March 20,985 20,566

Amount payable within one year (Note 17) 877 1,357 Amount payable after one year 20,108 19,209

20,985 20,566

19. Long-term loans This comprises of unsecured bonds issued and the details are as follows:

Principal Coupon Rate Issue Date Tenure Maturity $300,000,000 4.92% 13 July 1999 10 years 13 July 2009 $500,000,000 4.81% 9 June 2000 10 years 9 June 2010 $500,000,000 4.17% 10 May 2001 15 years 10 May 2016

Interest is payable semi-annually.

76 FINANCIAL INFORMATION OF THE AUTHORITY

20. Operating income 2001/2002 2000/2001 $'000 $'000 Management fees 381,440 400,770 Vehicle transit licensing fees 21,011 23,850 Composition ®nes 19,611 20,138 New motor vehicle registration fees 13,252 15,170 Sales, search & supply of information 4,518 4,090 Administration fees 3,489 2,393 Car park related fees 2,304 2,255 Rapid transit system lease and licensing fees 2,191 2,691 Others 8,397 4,491

456,213 475,848

21. Operating expenditure

Operating expenditure comprises mainly:

Depreciation of ®xed assets 119,655 111,441 Manpower costs 117,241 99,655 Maintenance and upkeep 100,743 87,906 Improvement of commuter facilities 65,512 122,749 Bond interest expense 57,539 34,198 Utilities 22,625 15,778 Agency fees 19,381 19,350 Contribution to Central Provident Fund 15,857 11,353 Electronic road pricing expenses 10,351 17,633 Rental of of®ce premises 9,7028,641 Pensions and gratuities 1,804 1,865 Board members' allowances 140 140 Auditor's remuneration 125 160

77 FINANCIAL INFORMATION OF THE AUTHORITY

22. Non-operating surplus 2001/2002 2000/2001 $'000 $'000 Interest income 5,37210,170 Dividend income 263 643 Impairment loss on long-term investments (Note 9) (1,312) - Net gain from funds managed by fund manager 2,344 320 Others 19256

6,859 11,189

Net gain from funds managed by fund manager comprises: Interest income 2,235 408 Dividend income 492- Other income 8 - Fund management and other fees (391) (88)

2,344 320

23. Contribution to consolidated fund This represents the contribution to be made to the consolidated fund in accordance with Section 3(a) of the Statutory Corporations (Contributions to Consolidated Fund) Act (Chapter 319A). The contribution for the ®nancial year under review is based on 24.5% (2000/2001: 20%) of the net surplus of the Authority.

24. Related party transactions Technical and other services: Rendered to subsidiary company (167) (4) Rendered by subsidiary company 72-

The above transactions are entered into on terms agreed between the parties.

25. Cash and cash equivalents 2002 2001 $'000 $'000 Fixed deposits 288,231 384,256 Cash and bank balances 24,283 44,504 Variable/¯oating rate notes, at cost (Note 16) 6,000 7,000

318,514 435,760

78 FINANCIAL INFORMATION OF THE AUTHORITY

26. Future capital and other expenditure 2002 2001 $'000 $'000 Capital and other expenditure approved by the Authority but not provided for in the ®nancial statements are as follows: Amounts approved and contracted for 2,444,831 2,747,723 Amounts approved but not contracted for 6,015,198 3,800,619

8,460,029 6,548,342

27. Operating lease commitments Rental expense for the ®nancial year amounted to $9,702,000 (2000/2001: $8,641,000). Future minimum rentals under non-cancellable leases as of 31 March are as follows:

Within one year 7,908 6,649 After one year but not more than ®ve years 5,946 7,086

13,854 13,735

28. Financial risk management objectives and policies The main risks arising from the Authority's ®nancial instruments are interest rate risk, foreign currency risk and credit risk, which are summarised below:

Interest rate risk The Authority's exposure to interest rate risk relates primarily to the Authority's investment portfolios and long-term debt obligations. The Authority does not use derivative ®nancial instruments to hedge its investment portfolio.

The Authority obtains external ®nancing through long-term borrowings in the debt capital market. The long-term borrowings are issued on ®xed rate basis and this enables the Authority to effectively manage its interest costs with known certainty.

Foreign currency risk The Authority is exposed to foreign currency risk arising from its payment obligations for contracts that have been awarded in foreign or mixed currencies. The Authority primarily utilises foreign exchange forward contracts that match the payment pro®le of such contracts. The primary purpose of the Authority's foreign currency hedging activities is to protect against the volatility associated with foreign currency payment obligations under such contracts.

Credit risk The carrying amounts of investments, debtors and cash represent the Authority's maximum exposure to credit risk. The Authority has no signi®cant concentration of credit risks with any single counterparty. Cash is placed with established ®nancial institutions.

79 FINANCIAL INFORMATION OF THE AUTHORITY

29. Fair value of ®nancial instruments The aggregate net fair values of ®nancial assets and ®nancial liabilities of the Authority which are not carried at fair value in the balance sheet as at 31 March are presented in the following table:

2002 2001 Carrying Carrying Fair amount Fair value amount value $'000 $'000 $'000 $'000 Financial Assets Staff loans 610 5921,1271,054

Financial Liabilities Long-term loans 1,300,000 1,330,030 800,000 863,690

The fair value of staff loans are estimated using discounted cash ¯ow analysis, based on current lending rates for similar types of lending and borrowing arrangements. The fair value of long-term loans are determined by reference to market values. Forward currency ®nancial instruments The Authority enters into forward contracts to hedge the payment of foreign currency liabilities arising from the construction of rapid transit system projects. As at 31 March 2002, the notional amount of the forward contracts entered is $403,949,000, and the fair value of unrealised exchange loss amounts to $367,000.

30. Segment reporting The Authority operates in one segment, which is land transport and in one geographical area, Singapore. Consequently, no segment information has been presented.

31. Subsequent event On 21 May 2002, the Authority issued the following bonds: (i) Unsecured 7-year bonds of $200,000,000 at 3.76% coupon rate payable semi-annually in arrears; and (ii) Unsecured 10-year bonds of $300,000,000 at 4.08% coupon rate payable semi-annually in arrears.

32. Comparative ®gures Certain comparative ®gures have been reclassi®ed to conform to the current year's presentation and change in accounting policy.

In particular, certain comparatives have been adjusted or extended to take into account the requirements of the following new or revised Singapore Statements of Accounting Standards (``SAS'') that have come into effect in 2001: SAS 10 : Events after the Balance Sheet Date SAS 17 : Employee Bene®ts SAS 31 : Provisions, Contingent Liabilities and Contingent Assets SAS 32: Financial Instruments: Disclosure and Presentation

33. Approval of ®nancial statements for issue The ®nancial statements were authorised for issue by the Authority's Board on 26 June 2002.

80 ISSUER

Land Transport Authority of Singapore 460 Alexandra Road #28-00 PSA Building Singapore 119963

JOINT LEAD MANAGERS

Barclays Bank PLC, Singapore Branch Standard Chartered Bank 23 Church Street 6 Battery Road# 03-00 #13-08 Capital Square Singapore 049909 Singapore 049481

LEGAL ADVISER TO THE ISSUE

Stamford Law Corporation 9 Raf¯es Place #32-00 Republic Plaza Singapore 048619

FISCAL AND PAYING AGENT

Standard Chartered Bank 6 Battery Road# 04-00 Singapore 049909

SNP-RR Donnelley Financial 6322046