TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X438MM BK224337 POSRRED #175 D:RS07-056-SB The Right Addresses The Right The Right Addresses Wheelock Properties Annual Report 06/07 Wheelock Properties Annual Report Properties Wheelock 06/07 WHEELOCK PROPERTIES (SINGAPORE) LIMITED Incorporated in the Republic of Singapore Company Registration No. 197201797H Pantone 313u Pantone cool gray 11u BK TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X438MM BK224337 POSRRED #175 D:RS07-056-SB Contents 01 Highlights 02 Right Achievements 04 Right Directions – Letter to Shareholders 10 Right Numbers – Five-Year Financial Summary 11 Right Numbers – Key Financial Data 12 Right People – Board of Directors 22 Right Principles – Corporate Governance Report 37 Financial Reports 90 Property Summary 92 Corporate Information 93 Shareholding Statistics 95 Notice of Annual General Meeting 99 Proxy Form Designed and produced by williams and phoa (asia) Pantone cool gray 11u BK TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X215MM WLP023_REV06/07_DFT04_IP15_1506_AC BK224337 POSRRED #175 D:RS07-056-SB Highlights Group revenue and profit after taxation and minority interests for the year ended 3 March 2007 were $56 million and $298 million respectively, an increase of 0% and 62% when compared to last year. GROUP REVENUE ($m) Mar ’07 561 Mar ’06 512 $561m Mar ’05 336 Mar ’04 218 Mar ’03 224 GROUP PROFIT AFTER TaX ($m) Mar ’07 298 Mar ’06 184 $298m Mar ’05 198 Mar ’04 90 Mar ’03 46 GROUP TOTAL ASSETS ($m) Mar ’07 2,841 Mar ’06 2,468 $2,841m Mar ’05 2,061 Mar ’04 1,578 Mar ’03 1,353 Highlights Wheelock Properties (Singapore) Limited Pantone 313u Pantone cool gray 11u TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X215MM WLP023_REV06/07_DFT04_IP15_1506_AC BK224337 POSRRED #175 D:RS07-056-SB Right Achievements ARDMORE II Located at the exclusive Ardmore Park enclave, Ardmore II will be developed into 8 luxury apartments over 8,000 square metre of prime freehold land. It occupies the dual plot of the former Ardmore View and Habitat II. THE COSMOPOLITAN The Cosmopolitan comprises 228 freehold apartments with superb north and south orientation. It is ideally located at the site of the former Times House and is minutes away from Orchard Road. THE SEA VIEW Situated in the picturesque East Coast, The Sea View is a 546-unit condominium with a restored historic beach house as a clubhouse for the residents. This freehold site was an amalgamation of the former Sea View Hotel and China Airlines Apartments. 2 Wheelock Properties (Singapore) Limited Right Achievements Pantone 313u Pantone cool gray 11u TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X215MM WLP023_REV06/07_DFT04_IP15_1506_AC BK224337 POSRRED #175 D:RS07-056-SB ARDMORE PaRK Ardmore Park comprises 330 luxurious residences on one of the largest freehold sites in a prime residential district. Its top quality finishes, design and prestigious location have earned Ardmore Park the recognition as the most desired residence in Singapore. The site was acquired from Malayan Credit Limited in 994. GRANGE RESIDENCES Grange Residences is a contemporary luxury development with 64 freehold apartments. It is located in the exclusive residential enclave of Tanglin and Grange Road, on the site of the former Marco Polo Hotel. WHEELOCK PLacE A stylish shopping mall and office tower, Wheelock Place is a prominent landmark in Orchard Road. Conveniently located outside the restricted zone and opposite the Orchard MRT Station, its strategic location makes it one of the most sought-after addresses. The site was acquired under the Urban Redevelopment Authority sale of sites. Right Achievements Wheelock Properties (Singapore) Limited 3 Pantone 313u Pantone cool gray 11u TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X215MM WLP023_REV06/07_DFT04_IP15_1506_AC BK224337 POSRRED #175 D:RS07-056-SB Right Directions LETTER TO SHAREHOLDERS The past year saw a remarkable period of escalating property prices and all sectors of the real estate market performed well. There is now a strong demand for high-end residential homes and equally strong demand by developers to acquire prime residential sites, many through en-bloc sales of older apartments. Prices of private residential properties increased by 0% in 2006 compared to 4% the year before based on figures released by URA. The increase in the core districts of 9, 0 and 11 was much higher at 7%. Demand for top-end luxury properties is expected to remain robust. There was renewed optimism in the office sector. Office rents have increased significantly due to increased demand, rising beyond the last peak in 200. We are pleased to see that the price movement of the Hotel Properties Limited shareholding acquisition was favourable. The market keenly awaits the completion of the development of the Integrated Resorts at Marina Bay and Sentosa in the next three years. This is expected to drive more tourism growth and activities in real estate development. REVENUE AND PROFIT Group revenue and profit after taxation from continuing operations for the year ended 3 March 2007 were higher at $472 million and $95 million respectively, an increase of 38% and 9% when compared to last year. The increase in revenue was mainly due to revenue recognition in respect of units sold in The Sea View and The Cosmopolitan. No revenue was recognised from Grange Residences during the year under review as the remaining revenue had been fully recognised in 2005/2006. The increase in other income was largely attributed to gain on disposal of Oakwood Residence Azabujuban amounting to $52 million. The increase in direct costs and operating expenses was in line with revenue recognised from The Sea View and The Cosmopolitan. 4 Wheelock Properties (Singapore) Limited Right Directions Pantone 313u Pantone cool gray 11u TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X215MM WLP023_REV06/07_DFT04_IP15_1506_AC BK224337 POSRRED #175 D:RS07-056-SB The Cosmopolitan The Group appointed an independent property consultant, CB Richard Ellis, to carry out a revaluation of its investment property as at 3 March 2007 in accordance with its accounting policy. Wheelock Place was revalued up from $450 million to $500 million. The revaluation deficit written back/surplus has been accounted for in the financial statements as follows: • $30 million revaluation deficit written back (2005/2006: $45 million) has been accounted for in the income statement as previous write-down on revaluation was taken to the income statement; • $20 million revaluation relating to surplus above original book cost has been accounted for in the revaluation reserve. Also included in other operating expenses was the write-back of diminution in value of development property of $4 million (2005/2006: $39 million). The increase in finance costs was mainly due to interest expense incurred on the GBP loan drawn down in March 2006 which was subsequently repaid in September 2006 upon the disposal of Hamptons Group Limited and higher loan interest rates compared to last year. The increase in income tax expense was mainly due to profit recognised from The Sea View and The Cosmopolitan in the current year. In addition, certain income did not give rise to tax liability last year. Profit for the year from discontinued operation was due to gain on disposal of Hamptons Group Limited amounting to $9 million (net of tax) and results of Hamptons Group Limited prior to the date of disposal. DIVIDEND The Directors have recommended a first and final dividend of 3 cents per share comprising a dividend of 2.539 cents per share less income tax of 8% and a one-tier dividend of 0.46 cents per share. The proposed first and final dividend, if approved by the Shareholders at the Annual General Meeting on 3 July 2007, will be paid on 23 August 2007. Right Directions Wheelock Properties (Singapore) Limited 5 Pantone 313u Pantone cool gray 11u TITLE:WL ANUAL CLIENT:WILLIAM & PHON SIZE:280X215MM WLP023_REV06/07_DFT04_IP15_1506_AC BK224337 POSRRED #175 D:RS07-056-SB SHAREHOLDERS’ EqUITY ($b) ASSETS Mar ’07 2.0 The Group’s total assets as at 3 March 2007 were $2.8 billion compared to Mar ’06 1.5 $2.5 billion as at 3 March 2006. The increase was mainly attributed to increase in market value of the Group’s interest in Hotel Properties Limited, acquisition of NET ASSET VaLUE PER SHARE ($) Habitat One site and higher value for the Group’s investment property, Wheelock Mar ’07 1.69 Place, as a result of year-end revaluation. Mar ’06 1.25 BORROWINGS The Group’s borrowings as at 3 March 2007 were $606.7 million compared to $84.4 million as at 3 March 2006. The lower borrowings were mainly due to repayment of loans drawn down previously to finance the acquisition of Hamptons Group Limited and Oakwood Residence Azabujuban which were disposed during the year. There was also progressive repayment of loans throughout the year from surplus funds received from the sale of residential projects and leases of investment property. The debt-equity ratio as at 3 March 2007 was 29.9%, down from 54.% a year ago. SHAREHOLDERS’ EQUITY The Shareholders’ equity was $2.0 billion as at 3 March 2007 compared to $.5 billion as at 3 March 2006. The increase was largely attributed to net profit recorded for the financial year under review, higher fair value in the Group’s interest in Hotel Properties Limited and the Group’s investment property. Net asset value increased by 35% to $.69 per share from $.25 a year ago. PROPERTY REVIEW Development Properties The Sea View As at 3 March 2007, all 546 apartments in The Sea View had been sold and profit has been recognised on the units sold according to the Group’s accounting policy. Main construction work for the project is in progress and is scheduled for completion in the fourth quarter of 2007.