CapitaCommercial Trust · 2015-03-26 · Corporate Profile CapitaCommercial Trust (CCT, or the Trust) is the first and largest listed commercial REIT on SGX-ST with a market capitalisation

Scaling New HeightsCapitaCommercial TrustAnnual Report 2014

Corporate ProfileCapitaCommercial Trust (CCT, or the Trust) is the first and largest listed commercial REIT on SGX-ST with a market capitalisation of S$5.2 billion as at 31 December 2014. CCT aims to own and invest in commercial real estate and real estate-related assets which are income producing. The total deposited properties of CCT is S$7.6 billion as at 31 December 2014, comprising a portfolio of 10 prime commercial properties in Singapore, as well as an investment in Malaysia.

Listed on SGX-ST on 11 May 2004, CCT was created through a distribution in specie by CapitaLand Limited (CapitaLand) to its shareholders.

The Trust is managed by an external manager, CapitaCommercial Trust Management Limited (CCTML, or the Manager), which is an indirect wholly-owned subsidiary of CapitaLand, one of Asia’s largest real estate companies.

VisionTo be a leading commercial REIT in Singapore and Asia, backed by a portfolio of quality income-producing commercial buildings, and led by a team of dedicated and experienced management personnel.

Mission

01 Highlights 201402 Financial Highlights 05 Trust Structure and Organisation Structure06 Letter to Unitholders 12 Portfolio Value Creation Strategy14 Property Portfolio16 Board of Directors24 The Manager27 Year in Brief 201428 Corporate Governance47 Enterprise Risk Management

Contents50 Investor Relations52 Sustainability Report79 Independent Market Review86 Financial Review90 Operations Review101 Property Details111 Glossary113 Financial Statements and Notes178 Additional Information183 Statistics of Unitholdings Corporate Information

To deliver long-term sustainable distribution and total returns to Unitholders.

Any discrepancies in the tables and charts between the listed figures and totals thereof are due to rounding. Where applicable, figures and percentages are rounded to one decimal place.

Where Ringgit Malaysia is quoted, an exchange rate of S$1.00 to RM2.66 as at 31 December 2014 is used in the conversion.

Scaling New Heights

Highlights 2014

CapitaCommercial Trust’s focused investment and proactive management of a high quality portfolio of commercial properties in Singapore has enabled the delivery of higher distributions in the last decade. Embarking on the next decade of growth, we continue to underscore our aspirations to scale greater heights, backed by our proactive and disciplined approach towards acquisitions and developments as well as asset, portfolio and capital management. The successful completion of CapitaGreen marks the transformation of the former Market Street Car Park into an iconic Grade A office building, and exemplifies our focus on optimising the potential of our assets and driving value creation for our Unitholders.

Portfolio Occupancy Rate

29.3%

Credit Rating

10 properties

Market Capitalisation

S$5.2 billion

Gearing

Assuming 40.0% gearing

96.8% (including CapitaGreen)

99.5% (excluding CapitaGreen)

Upgraded to A- with stable outlook by Standard & Poor’s

(25 August 2014)

Upgraded to A3 with stable outlook by Moody’s

(12 February 2015)

S$249.2 million

Distribution Per Unit

8.46 cents

Distributable Income

Total Deposited Properties

S$7.6billion

S$1.3 billion

Information as at 31 December 2014 or for FY 2014.

2.3% p.a.

Average Cost of Debt

Debt Headroom

Scaling New Heights | 01

02 | CapitaCommercial Trust Annual Report 2014

Financial Highlights

Net Property Income (S$ million)

2010 2011 2012 2013 2014

Gross Revenue (S$ million)

299.0277.3

295.5 296.5

2010 20111 12012 2013 22014 2

391.9361.2 375.8 386.9 402.1 307.1

Distributable Income (S$ million)

2010 2012 2013

221.0 212.8228.5 234.2

249.2

Distribution Per Unit (cents)

2010 2012 2013 2014

7.83

7.52

8.04 8.14

8.46

1 Two properties were divested in 2010 and resulted in lower gross revenue, net property income, distributable income and distribution per Unit in 2011.

2 With the adoption of FRS 111 Joint Arrangements, CCT’s 60.0% interest in RCS Trust and 40.0% interest in MSO Trust are accounted for as interest in joint ventures in 2014. Gross revenue and net property income of CCT’s 60.0% interest in RCS Trust and 40.0% interest in MSO Trust are represented in blue colour bars. The 2010 to 2013 figures are restated for reference.

262.6

139.5 87.995.2

96.1

199.4182.1

211.1

135.5

251.4270.0

231.1 243.2

132.6130.1121.9

205.2197.1

99.4 101.9

Adjusted Net Asset Value Per Unit (S$)

2010 2011 2012 2013 2014

1.47

1.571.62

1.671.71

Total Deposited Properties (S$ million)

2010 2011 2012 2013 2014

6,196.26,753.9 7,003.0 7,218.2

7,633.6

As at 31 DecemberAs at 31 December

20111 201112014

Five Years Comparative Trading Performance from 2010-2014

Jan2010

Dec2010

Dec2011

Dec2012

Dec2013

Dec2014

Jun2010

Jun2011

Jun2012

Jun2013

Jun2014


+50.0%

+26.2%+16.1%

100

Selected Balance Sheet Data (S$ million)As at 31 December 2010 2011 2012 2013 2014Valuation (including Raffles City Singapore and CapitaGreen) 5,475.4 6,011.7 6,695.1 6,959.8 7,358.5Unitholders’ Funds 4,273.7 4,541.4 4,714.7 4,912.7 5,153.5Total Borrowings (including RCS Trust and MSO Trust) 1,747.3 2,017.5 2,072.1 2,060.9 2,182.7Market Capitalisation 4,235.0 2,988.6 4,790.4 4,174.2 5,168.2

Key Financial IndicatorsAs at 31 December 2010 2011 2012 2013 2014Distribution Per Unit (cents) 7.83 7.52 8.04 8.14 8.46Earnings Per Unit (cents) 17.67 16.77 13.60 13.08 15.41Gearing (%) 28.6 30.2 30.1 29.3 29.3Interest Cover (times)1 3.7 4.3 4.5 5.9 7.2Management Expense Ratio (%)1 0.34 0.30 0.35 0.32 0.33

For more details, please refer to CCT’s Financial Statements and Operations Review in this report.

1 With the adoption of FRS 111 Joint Arrangements, CCT’s 60.0% interest in RCS Trust and 40.0% interest in MSO Trust are accounted for as interest in joint ventures in 2014. The 2010 to 2013 figures are restated for reference.

CapitaCommercial Trust (CCT SP Equity) FTSE Straits Times Real Estate Investment Trust Index (FSTREI Index) Straits Times Index (FSSTI Equity)


Financial Highlights

Trading Performance for 2014

The Trust Offers Attractive Yield Compared to Other Investments

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1.42 1.485

1.70 1.67 1.685 1.7551.5951.6651.701.69

187.1

1.465

218.8

Volume (Million Units) Unit Price (S$) as at last trading day of the month

Unit Price Performance2010 2011 2012 2013 2014

As at last trading day of the year (S$) 1.50 1.05 1.68 1.45 1.755Highest (S$) 1.53 1.56 1.69 1.73 1.755Lowest (S$) 1.03 0.96 1.05 1.33 1.385Weighted Average (S$) 1.28 1.34 1.34 1.53 1.60Trading Volume (million units) 2,115.5 1,673.6 1,952.6 1,956.3 1,868.3

139.1136.3

165.5 161.6 169.1

118.2

175.1

137.7 131.1 128.7

1 CCT’s distribution yield is based on FY 2014 DPU of 8.46 cents over closing price of S$1.755 on 31 December 2014.2 CCT’s net property yield is based on FY 2014 net property income including Raffles City Singapore over December 2014 valuation.

3.3% Straits Times Index dividend yield

2.5%-3.5% Office property transacted yields

2.5% CPF (ordinary) account interest rate

2.3% 10-year government bond yield

0.3% Banks fixed deposit rate (12 months)

0.1% Banks savings deposit rate

4.6% CCT’s net property yield2

4.8% CCT’s distribution yield1

5.6% FTSE ST REIT Index dividend yield

As at 31 December 2014

1.60

Trust Structure

Organisation Structure


Unitholders

Holdings of Units in CCT

Distributions

The ManagerCapitaCommercial Trust Management

Limited

Management Services

Acts on behalf of Unitholders

Management Fees

Trustee’s Fees

Ownership of Assets

Net PropertyIncome

TrusteeHSBC Institutional

Trust Services (Singapore) Limited as Trustee of CCT

1. Capital Tower2. Six Battery Road3. One George Street4. Raffles City Singapore (60.0% interest)5. CapitaGreen (40.0% interest) - Obtained TOP on 18 Dec 20146. Twenty Anson7. HSBC Building8. Wilkie Edge9. Bugis Village10. Golden Shoe Car Park

Property Management Services

Property Management Fees

Properties

The Property ManagersCapitaLand Commercial

Management Pte. Ltd.

CapitaLand (RCS) Property Management Pte. Ltd.

Board of Directors

The ManagerCapitaCommercial Trust Management Limited

Chief Executive OfficerLynette Leong Chin Yee

Vice President,Customer

Experience Management

Faith Soh

Head,Investor Relations &

CommunicationsHo Mei Peng

Head,Finance

Anne Chua

Head, Asset

ManagementYvonne Ong

Head, Investment

Chew Peet Mun

Letter to Unitholders

(Left) Soo Kok Leng, Chairman (Right) Lynette Leong Chin Yee, Chief Executive Officer

Dear Unitholders,

2014 marked a significant year for CapitaCommercial Trust (CCT, or the Trust). We celebrated 10 years of listing since May 2004, and attained a major milestone with the completion of our first development project, CapitaGreen, on 18 December 2014 - a joint development with CapitaLand and Mitsubishi Estate Asia. Embarking on the next decade of growth,

Our proactive and disciplined approach towards acquisitions and developments as well as asset, portfolio and capital management has enabled us to turn in a stellar performance. CCT delivered a consecutive year of growth in FY 2014 with DPU of 8.46 cents. The Trust attained a significant milestone with the completion of its first development project, CapitaGreen – the result of the redevelopment of the former Market Street Car Park. It exemplifies our focus on optimising the potential of CCT’s assets and creating value for the Trust. Certainly enabling the Trust to scale new heights.

we continue to underscore our aspirations to scale greater heights, backed by our proactive and disciplined approach towards acquisitions and developments as well as asset, portfolio and capital management. Unitholders who have invested in CCT since its listing on 11 May 2004 would have been rewarded handsomely: from CCT’s distributable income which grew at a compounded annual growth rate (CAGR) of 18.6%, and from its total return of 249.7%1.

1 Sum of distribution and capital appreciation from CCT’s opening price on 11 May 2004 to closing unit price on 31 December 2014, taking into account the effects of the underwritten renounceable rights issue in 2009.


Robust Financial PerformanceWe are pleased to report another year of growth in distribution per Unit (DPU) for the financial year ended 31 December 2014 (FY 2014) and a total return of 26.9%1. FY 2014 DPU of 8.46 cents was 3.9% higher than FY 2013 DPU of 8.14 cents. The growth in DPU occurred despite the absence of yield protection income for One George Street in FY 2014 (FY 2013: S$7.6 million) and enlarged base of CCT units resulting from S$69.3 million of convertible bonds due 2015 that were converted by the bondholders into CCT units.

The Trust’s distributable income of S$249.2 million in FY 2014 was up 6.4% over FY 2013’s S$234.2 million. The stronger performance was largely due to increased revenue contribution by CCT’s properties and higher distribution from Raffles City Singapore, a joint venture project, although the increase was partially offset by higher property tax expense. The tax-exempt income from CCT’s investment in Malaysia, Quill Capita Trust, also contributed to the rise in distributable income.

As at 31 December 2014, CCT’s investment properties were valued at an aggregate of S$7.4 billion by independent valuers, an increase of 5.7% over the valuation of December 2013. The increase was due to higher rental income achieved from the properties and the completion of CapitaGreen, which is now valued as an operating asset as opposed to a property under construction before. Including other assets, CCT’s deposited properties were valued at an aggregate of S$7.6 billion as at end FY 2014. Excluding the distributable income payable to Unitholders, the net asset value per Unit was S$1.71. This was 2.4% higher than the S$1.67 per Unit as at 31 December 2013.

Delivering Resilient GrowthOn top of the strong financials, the Trust’s portfolio enjoyed a healthy take-up rate during the year thanks to our team’s proactive leasing and marketing efforts. Committed occupancy rate for CCT’s portfolio excluding CapitaGreen stood at 99.5%, up from last year’s 98.7% and well above the office market average of 95.7% as at end December 2014. Including the recently completed CapitaGreen, which registered a leasing commitment of 69.3% as at end December 2014, the portfolio occupancy rate was 96.8%, which was still above the market average.

CapitaGreen’s 69.3% leasing commitment translated to a total net lettable area of 486,800 square feet. Additionally, CCT’s other properties signed approximately 900,000 square feet of total net lettable area in FY 2014, of which about 15% were new leases, while the remaining leases were renewed ahead of their expiries in 2014. CCT locked in an increase of 5.9% in average monthly office rent to S$8.61 per square foot from S$8.13 per square foot a year ago, after taking into account the rents committed at CapitaGreen.

The successful completion of CapitaGreen marks the transformation of the former Market Street Car Park into an iconic Grade A office building, and exemplifies our focus on optimising the potential of our assets and driving value creation. CapitaGreen is a prominent, new landmark in the heart of the Central Business District (CBD) in Singapore that not only redefines the downtown skyline with a first-of-its-kind façade perimeter where green, living plants grow, but also offers energy-saving building specifications that are in line with our continuous efforts to be environmentally sustainable. Distributable income contribution from CCT’s 40.0% interest in CapitaGreen is expected in 2016 as the development stabilises its operations. Given CapitaGreen’s strong tenant appeal, we target to achieve 100% committed occupancy by end 2015 which would further underpin the growth of the Trust.

Augmenting QualityWith a view to ensuring that the quality of CCT’s portfolio meets the modern demands of our tenants, strengthens its competitiveness and continues to generate positive returns for the Trust for the long term, we have been consistently renewing the properties in line with our “portfolio reconstitution strategy” of which we have commenced execution since 2010.

Besides the flagship development of CapitaGreen, we completed a S$32.3-million asset enhancement initiative (AEI) on Raffles City Tower in 2014, which successfully achieved a return on investment (ROI) of 9.3% and well above our target ROI of 8.6%. Capital Tower is currently undergoing a S$40.0-million revitalisation programme which is targeted for completion by the fourth quarter of 2015 and expected to achieve a projected ROI of 7.8%.

1 Sum of FY 2014 DPU and capital appreciation from CCT’s closing unit price on 31 December 2013 to closing unit price on 31 December 2014.


Letter to Unitholders

Disciplined Capital ManagementWe adopt a prudent and proactive capital management to maintain a strong financial position and financial flexibility. As at end of 2014, 83% of our total borrowings were on a fixed rate basis, which provided certainty of interest expense and limited the exposure to interest rate fluctuations. CCT’s average cost of debt improved to 2.3% per annum as at end FY 2014 from 2.6% per annum in the previous year. Testament to the strong financial position of CCT, Standard & Poor’s upgraded CCT’s credit rating to “A-” with stable outlook, which is the highest credit rating for a Singapore office REIT. On 12 February 2015, Moody’s also upgraded CCT’s senior unsecured ratings to “A3” from “Baa1” with stable outlook, given its strong market position and track record.

During the year, we proactively repurchased and redeemed the Convertible Bonds (CB) due in 2015 even as other bondholders converted the CBs into CCT units. This resulted in all the CBs being cancelled ahead of their maturity.

We also diversified our sources of funding and took advantage of the low interest rate environment to extend CCT’s debt maturities. In August 2014, CCT issued S$50.0 million of notes due 2021 at a fixed interest rate of 2.98% per annum. In October 2014, CCT issued 6.3 billion Japanese Yen of floating rate notes due 2021 which was swapped into S$75.0 million at a fixed interest rate of 2.95% per annum.

We continue to maintain CCT’s robust balance sheet, and CCT is well positioned to meet future financial obligations and possesses the financial flexibility to execute growth opportunities. CCT’s total debt as at end 2014 was S$2.2 billion which translated to a low gearing ratio of 29.3%. Assuming 40.0% gearing ratio, CCT has a S$1.3 billion debt headroom. CCT has diverse options of funding sources, with an untapped balance of S$1.5 billion from its Medium-Term Note programme and sufficient undrawn bank facilities of S$265.0 million to cater for working capital.

Going ForwardThe Trust is expected to ride on the positive office market fundamentals that are likely to support rental growth given the tight office supply in the Core CBD

market in 2015. Office leases in CCT’s portfolio that are due for renewal in 2015 constitute 12% of CCT’s portfolio gross rental income and represent potential for positive rental reversions. We target to fully lease the remaining 215,200 square feet (30.7%) of office space in CapitaGreen by end of 2015 as office market rents continue to firm up. The additional revenue from CapitaGreen will position CCT strongly for 2016 when its contribution to the Trust’s distributable income is expected.

Beyond 2015, the supply pipeline to Singapore’s CBD office market will be approximately five million square feet over the next four to five years, with completions taking place progressively from the second half of 2016 to 2017. If office demand were to grow at a similar rate to the 10-year historical net rate of approximately one million square feet per annum, the supply should be progressively absorbed and the market would be in equilibrium in the medium-term. We are actively bracing the Trust by managing its office lease expiries to minimise them in the years of larger office supply, through engaging tenants ahead of their lease expiries and the stepping up of tenant retentions. Our tenant retention rate was 86% in 2014 compared with 67% in 2013.

CCT now has the option to acquire the remaining 60.0% interest of the development held by its joint venture partners from 2015 to 2017. This provides another avenue of promising pipeline growth for the Trust. CapitaGreen’s completion also resets the regulatory development capacity1 to approximately S$763.4 million for CCT to undertake new development projects should opportunities arise.

The move towards more robust regulation of the Singapore REIT market under the consultation paper by the Monetary Authority of Singapore also bodes well for S-REITs in the longer term. Our continuous efforts to maintain the quality of assets, diversified funding streams and effective portfolio management ensure that the Trust remains on a steady growth trajectory going forward.

Commitment to ExcellenceCCT is committed to delivering service excellence and we actively engage our valued tenants to forge strong lasting partnerships. The Trust successfully rolled out several tenant engagement activities over

1 Under the Property Funds Appendix, a Singapore REIT can undertake development up to 10% of its Deposited Properties. CCT’s Deposited Properties amounted to S$7,633.6 million as at 31 December 2014.


CapitaGreen Topping-Out CeremonyOn stage: (from left to right) Ms Lynette Leong, Mr Toichi Takenaka, Mr Lim Ming Yan, Mr Ng Kee Choe, Minister Khaw Boon Wan, Mr Keiji Kimura, Mr Kee Teck Koon, Mr Toyo Ito, Mr Wen Khai Meng

“The Power of 10”: CCT’s 10th Year Anniversary CelebrationOn stage: CCTML’s Board of Directors (past and present)

the year such as the bi-annual healthy treats, Eco Race and Gifts of Joy. These activities continued to receive strong support from our tenants through increased participation rates. Notably, we organised the very first CEO Breakfast Talk to provide networking opportunities for the senior management of our tenants, and it was well attended.

In other highlights of the year, the Trust celebrated the topping-out ceremony of CapitaGreen on 2 July 2014 and we were honoured to have had the Minister for National Development, Mr Khaw Boon Wan, grace this momentous occasion. That date also marked CCT’s 10th Year Anniversary dinner which we celebrated with our valued tenants and business partners in an evening of spectacular gastronomy, entertainment and conferring of awards to honour them for their strong support to the Trust.

Accolades and AppreciationCCT was conferred two Gold awards at the Singapore Corporate Awards 2014 for the Best Annual Report and Best Investor Relations in the

REITs and Business Trusts category, as we continue to pride ourselves on timely and transparent communication with our Unitholders.

We would like to take this opportunity to thank our former Chairman, Mr Kee Teck Koon, for his exemplary leadership and invaluable contributions to the Board and CCT until he stepped down on 22 September 2014.

We also extend our sincerest thanks to our valued tenants, business partners and Unitholders for their unwavering confidence and support.

Soo Kok LengChairman

Lynette Leong Chin YeeChief Executive Officer

26 February 2015

Key Events of the Year


致信托单位持有人

尊敬的单位持有人：

对凯德商务产业信托(凯德商务信托或信托)而言，2014是至关重要的一年。自2004年5月上市至今，信托迎来10周年大庆；2014年12月18日，由凯德商务信托、凯德集团和三菱亚洲地产联合开发的首个项目CapitaGreen已顺利完工，这无疑是一个重要的里程碑。展望未来十年，我们将继续以积极和严谨的处理方式进行收购、项目发展，租赁、投资组合与资本管理，创造更辉煌的业绩，更上一层楼。自2004年5月11日上市以来，投资于凯德商务信托的单位持有人已取得丰厚的回报，因为信托可派发收入的复合年均增长率(CAGR)高达18.6%，同时总体回报率高达249.7%1。

强劲稳健的业绩表现截止2014年12月31日财政年度，凯德商务信托的每单位可派发收入(DPU)再次取得年增长。2014财政年每单位可派发收入为8.46分，比2013财政年的8.14分高出3.9%，而2014年的总体年回报达26.9%2。尽管乔治街一号在2014年已没有收益保障(2013财年其收益为760万新元)，再加上2015年到期并可转换成凯德商务信托单位的债券高达6930万新元，使信托已发行单位增数，该年单位可派发收入仍能实现增长，实属不易。

该信托2014财政年的可派发收入为2亿4920万新元，和2013财政年的2亿3420万新元同比增长6.4%。这强劲的业务表现主要归功于凯德商务信托独资产业取得更高的收入以及合资项目，新加坡来福士城较高的可派发收入贡献(其更高的可派发收入已被高涨的物业税抵消了一部分)。而信托从其在马来西亚的投资项目-桂嘉信托所得来的免税投资收益，也促成了全年可派发收入的上升。

根据独立估值报告，截至2014年12月31日，凯德商务信托投资物业估值为74亿新元，与2013年12月相比，上扬5.7%。这不仅归功于产业取得更高的租金，也因为已竣工的CapitaGreen项目被重新归类为营业资产，而非先前的在建资产。截止2014年底，包括其他资产在内，信托产业总价值达76亿新元。扣除支付给单位持有人的可派发收入，每单位资产净值为1.71新元，比2013年12月31日的1.67新元上升了2.4%。

持续性增长除了强健的财务业绩之外，信托的投资组合租用率也取得了稳健的年增长。这是因为团队积极主动的租赁和有效的市场推广策略。截止2014年12月底，该信托的租用率（不包括CapitaGreen）达到99.5%，高于去年同期的98.7%，也远胜办公楼市场95.7%的业界平均租用率。即使把近期完工的CapitaGreen(其租约承诺率已达69.3%)包括在内，投资组合的租用率也达到96.8%，仍高于市场平均水平。

1 自2004年5月11日CCT开盘价至2014年12月31日闭市价期间的每单位可派发收入总值及资本增值的总和(已将2009年可弃权包销附加股的影响考虑在内)。2 自2013年12月31日CCT闭市价至2014年12月31日闭市价期间，2014财年每单位可派发收入(DPU)和资本增值的总和。

凯德商务产业信托能取得卓越的业绩，归功于我们一贯以积极和严谨的处理方式对待收购、业务发展、租赁、投资组合以及资金管理。在2014财政年度，凯德商务产业信托再次实现年增长，每单位可派发收入为8.46分。近期的一个重要里程碑是通过改建马吉街旧停车场，成功开发了首个发展项目–CapitaGreen。这充分体现了我们优化资产的潜力以及信托增值的实力。毫无疑问，这些有利于本信托在来年再创佳绩，登上新高峰。

鉴于CapitaGreen69.3%的租约承诺率，其可出租的净面积达486,800平方英尺。此外，凯德商务信托其他产业在2014财年可出租的总净面积约900,000平方英尺，其中大约15%属于新租约，而其他租约在2014年到期前均已提前续约。包括CapitaGreen所签的租金，凯德商务信托办公楼月均租金从2013年每平方尺8.13新元上扬5.9%至8.61新元。

CapitaGreen的顺利竣工象征着马吉街旧停车场已成功改建成标志性甲级办公楼，也体现了我们优化资产的潜力以及信托增值的实力。作为新加坡中央商务区(CBD)的新地标，CapitaGreen不仅将改变市中心的景观，更是首座独一无二的四面绿化建筑，拥有多项节能指标，是我们不断努力打造可持续发展环境的成果之一。

凯德商务信托拥有CapitaGreen40.0%股份，预计在2016年其项目操作稳定发展之后，有望从中获得可派发收入。鉴于CapitaGreen强烈的租户号召力，我们将努力在2015年底实现百分之百租用率，从而进一步推动信托的增长。

强化质量自2010年以来，我们一直致力于产业翻新，贯彻“组合资产重建战略”，是为了确保凯德商务信托投资组合的质量符合租户日新月异的需求并增强产业的竞争力，以及保证信托长期的可持续收益。

除了CapitaGreen这一旗舰开发项目之外，来福士城办公楼在2014年完成了耗资3230万新元的资产增值计划(AEI)，成功实现了9.3%的投资回报，远超于8.6%的目标回报率。目前，我们正在资金大厦进行耗资4000万新元的翻新振兴工程，预计2015年第4季完工，投资回报目标为7.8%。

审慎的资本管理我们以谨慎而积极的态度与策略管理资本，确保稳健的财务状况和维持财务适应能力。截至2014年底，我们83%的总贷款为固定利率，从而确定了利息支出，降低了利率波动的风险。截止2014财年，凯德商务信托年均借贷成本由上一年的2.6%降至2.3%。标准普尔提升凯德商务信托的信用评级至“A-”，发展前景良好。这是新加坡办公楼投资信托中最高的信用等级，证明了该信托稳健的财务状况。2015年2月12日，鉴于CCT稳健的发展前景与其一贯强劲的业绩，国际评级机构穆迪也将凯德商务信托高级无担保评级从“Baa1”上调至“A3”。

在这一年里，尽管有债券持有人选择把可转换债券兑成凯德商务信托单位，我们一样积极回购并赎回2015年到期的可转换债券(CB)。因此所有在2015年到期的可转换债券已被提前注销。


1 根据房地产基金附录规定，新加坡房地产投资信托最多只能用产业总价的百分之十来投资发展项目。截至2014年12月31日，凯德商务信拖的产业总价值76亿新元。

我们也致力于资金来源多元化，利用低利率的环境优势，延长凯德商务信托债务期限。2014年8月，凯德商务信托发行了2021年到期的票据，每年固定利息为2.98%，总价值5000万新元。同年10月，信托发行了2021年到期的浮动利率票据，总价值63亿日元，并通过7500万新元对冲交易，把利率固定为每年2.95%，规避汇率风险。

我们继续保持凯德商务信托强健的资产负债表，让信托更占优势地应对未来的借贷需求，保持财务适应能力，把握机会，实现增长目标。截至2014年底，该信托总债务为22亿新元，其资产负债杠杆比仅为29.3%。假设将资产负债比提高至40.0%，凯德商务信托则尚有13亿新元借贷空间。凯德商务信托拥有多样化的融资渠道，其中中期票据计划下未用的额度尚有15亿新元，未动用的银行信贷额度充足(达26500万新元)，足以应付营运资金需求。

展望未来2015年，中央商业区(CBD)预计将面对办公楼供应限量的状况，其办公楼市场前景乐观，基本面向好，从而支持租金的增长，该信托有望从中受益。在凯德商务信托投资组合中，2015年到期的办公室租赁合约占其总收入的12%，预计大多数都将得以续约。随着办公楼市场租金市场的持续坚挺，我们的目标是在2015年底前，将CapitaGreen剩余215,200平方英尺(30.7%)的办公楼空间全部出租。预计CapitaGreen将在2016年开始为信托贡献可派发收入，也为凯德商务信托的发展打下坚实的基础。

2015年后的四到五年内，新加坡中央商业区办公楼市场将涌现约5百万平方英尺的新楼面，并于2016年下半年到2017年逐步投入使用。如果办公楼面需求以10年净增长率(即，每年约百万平方英尺)的相似速度增长，这些供应将逐步被吸收，市场将达到中期平衡。我们积极加强信托地位，通过管理办公楼面租期，最大限度地减少在市场出现大量楼面时出现合约到期的情况，所采取的措施包括提前与租户续约以及提高租户保留率。2014年租户保留率从2013年的67%提高到86%。2015年至2017年，凯德商务信托可选择收购该发展项目余下60.0%属于其合资伙伴的权益。这为信托提供了另一个前景不错的增长道。CapitaGreen的竣工也让凯德商务信托法定开发能力提升至约76340万新元，从而具备把握机遇、开发新项目的实力。

根据新加坡金融管理局的咨询文件，政府将对新加坡房地产投资信托市场推行更强有力的监管，此举也对新加坡投资信托长期利好。我们坚持确保资产质量，分散资金流和有效管理投资组合，确保凯德商务信托保持稳定增长的发展态势。追求卓越凯德商务信托致力于为客户提供卓越的服务，我们与租户积极合作，致力于建立牢固持久的伙伴关系。信托在过去一年里成功推出了租户参与的活动，这包括由信托提供的健康食品一年两次分派给租户的活动、环保竞赛及圣诞佳节捐献儿童玩具礼物。这些活动一直得到租户的大力支持，参与率一再创下新高。值得一提的是，我们为租户高级管理人员首次举办的首席执行员(CEO)早餐演讲暨交流会，获得了热烈的响应。

2014年其他亮点包括：7月2日，CapitaGreen庆祝封顶落成典礼，并荣幸邀请到国家展部长许文远先生见证这一重要时刻。凯德商务信托第10届周年纪念庆典也于同日举行邀请了租户和商业合作伙伴共同庆祝。庆宴有丰富的美食和精彩的娱乐节目，还有奖项，以答谢和表彰租户和商业合作伙伴对本信托的大力支持。

获奖与致谢在2014年新加坡企业奖评选中，凯德商务信托荣获房地产投资信托和商业信托组“最佳年报”及“最佳投资者关系”两项金奖殊荣。对于能与单位持有人之间保持及时坦诚的沟通，我们引以为荣。

借此机会，我们要感谢2014年9月22日卸任的前任主席纪德坤，感谢他的杰出领导以及对董事会和该信托的宝贵贡献。

我们也向尊贵的租户、商业伙伴和单位持有人致以诚挚的谢意，感谢大家对信托的坚定信心与大力支持。

司徒国玲主席

2015年2月26日

荣获2014新加坡企业奖“最佳年报”及“最佳投资者关系”金奖

梁静仪首席执行员

举办年度环保竞赛，提倡绿化意识提供租户健康食品


Portfolio Value Creation Strategy

Portfolio Reconstitution Strategy Model

CapitaGreen• Our first

Grade A office development obtained Temporary Occupation Permit (TOP) on 18 December 2014

CCT adopts a portfolio reconstitution strategy to position our portfolio for growth and continuous development. Over the years, we have proactively managed our assets to enhance and/or unlock the value of our properties in line with our goal to optimise the potential of our portfolio.

• Six Battery Road (Completed in December 2013) • Raffles City Tower (Completed in June 2014) • Capital Tower (Ongoing from November 2013 to December 2015)

• Robinson Point and StarHub Centre (2010) • Market Street Car Park (2011)

Total proceeds: S$639 million

• Twenty Anson (2012) • One George Street (2008) • Wilkie Edge (2008) • Raffles City Singapore (2006) • HSBC Building (2005)

• Market Street Car Park redeveloped into CapitaGreen (Obtained TOP on 18 December 2014)

Unlock value at optimal stage of life cycle

Grow portfolio

Recycle capital Enhance / refurbish asset

Furthering Growth through Development

Redeveloped into CapitaGreenMarket Street Car Park before redevelopment


Asset enhancementsEnhance / refurbish asset Unlock value

Divestments AcquisitionsRecycle capital and Grow portfolio

Redevelopment

Flexibility and speed to seize growth

opportunities

Value creation

Funding flexibility

Organic growth

Creating Value with Asset Enhancements

Raffles City Tower • Completed

S$32.3-million AEI at Raffles City Tower in end June 2014

• Achieved return on investment of 9.3%, above target of 8.6%

Capital Tower • Ongoing

S$40.0-million AEI at Capital Tower on schedule for completion in 4Q 2015

• Target return on investment of 7.8%Revitalised main lobby Main lobby before AEI

Drop-off point before AEI

Main lobby before AEI Refurbished main lobby

Canopy extension at main lobby with signature sculpture at new water feature


Property Portfolio

1. Capital Tower

4. Raffles City Singapore

7. HSBC Building 9. Bugis Village 10. Golden Shoe Car Park

8. Wilkie Edge

2. Six Battery Road

5. CapitaGreen 6. Twenty Anson

3. One George Street


Portfolio Statistics (Including CapitaGreen)As at 31 December 2013 2014Number of Properties 10 10Net Lettable Area (sq m) 297,726 363,360Net Lettable Area (sq ft) 3,204,703 3,911,207Valuation (S$ million) 6,959.8 7,358.5Number of Tenants 599 626Committed Occupancy (%) 98.7 96.8

CBD Singapore Central Business District

6

10 2

3

89

7

4

Shen

ton

Way

Espl

anad

e Dr

ive

Raffles Avenue

North Brid

ge Road

Victoria Street

Sele

gie

Road

Wilkie RoadOrchard Road

Raffles Boulevard

Rochor Road

Anso

n Ro

ad

Tanjong Pagar

Marina Bay

City Hall

Clarke Quay

Bras Basah

Ascott Raffles Place

Raffles Place

Downtown

Esplanade

Bugis Junction

Bugis

Dhoby Ghaut

Plaza Singapore

Chinatown

Swissotel The Stamford Singapore

Fairmont Singapore

5Cross Street

Church Street

Havelock Road

New Bridge Road

1 Robi

nson

Roa

d

Legend

MRT

CapitaCommercial Trust Properties

Landmarks

CTE

Net lettable area and number of tenants are accounted for on 100.0% interest basis.

Telok Ayer


Central Boulevard

Marina Boulevard

Raffl

es Q

uay

Board of Directors

1 Soo Kok Leng Chairman & Non-Executive Independent Director2 Lim Ming Yan Deputy Chairman & Non-Executive Non-Independent Director3 Lynette Leong Chin Yee Chief Executive Officer & Executive Non-Independent Director4 Dato’ Mohammed Hussein Non-Executive Independent Director5 Lam Yi Young Non-Executive Independent Director6 Goh Kian Hwee Non-Executive Independent Director7 Wen Khai Meng Non-Executive Non-Independent Director8 Chong Lit Cheong Non-Executive Non-Independent Director

Audit CommitteeDato’ Mohammed Hussein Lam Yi YoungGoh Kian Hwee

Corporate Disclosure CommitteeWen Khai Meng Chong Lit CheongSoo Kok Leng

Executive CommitteeLim Ming Yan Lynette Leong Chin YeeWen Khai MengChong Lit Cheong


1

5

2

6

4

87

3

Soo Kok Leng

Chairman

Non-Executive Independent Director

Bachelor of Electrical Engineering (Honours), University of Singapore

Master of Business Administration, University of Strathclyde, Scotland

Date of first appointment as a director: 1 January 2013

Date of appointment as chairman: 22 September 2014

Length of service as a director (as at 31 December 2014): 2 years

Board committee served on

• Corporate Disclosure Committee (Member)

Present principal commitments

• Freelance management consulting

• Singapore Cruise Centre Pte Ltd (Chairman and Chairman of remuneration committee)

• Singapore Storage & Warehouse Pte Ltd (Chairman)

• Singapore Technologies Electronics Ltd (Chairman)

Background and working experience

• Corporate Advisor of Temasek International Advisors Pte. Ltd. (Since 2012)

• Adjunct Professor of National University of Singapore, Engineering School (Since 2007)

• Non-Resident Ambassador to Austria, Ministry of Foreign Affairs (Since 2006)

• Corporate Advisor of Singapore Technologies Engineering Ltd (Since 2002)

• Freelance management consultancy (Since 2002)

• Corporate Advisor of Temasek Holdings (Private) Limited (From 2003 to 2012)

• CEO (Acting) of Singapore Cable Car Pte Ltd (From 2003 to 2004)

• Vice President/General Manager of 3Com Technologies (From 1997 to 2002)

• Group General Manager/Executive Director of Falmac Ltd (From 1996 to 1997)

• Engineer to Management of Hewlett Packard Pte Ltd (From 1977 to 1996)

Award

• Public Service Medal (PBM, Pingat Bakti Masyarakat)


Lim Ming Yan

Deputy Chairman

Non-Executive Non-Independent Director

Bachelor of Engineering (Mechanical) and Economics (First Class Honours), University of

Birmingham, UK


Date of appointment as deputy chairman: 1 January 2013



• Executive Committee (Chairman)

Present directorships in other listed companies

• Ascott Residence Trust Management Limited (manager of Ascott Residence Trust) (Deputy

Chairman)

• CapitaLand Limited

• CapitaMall Trust Management Limited (manager of CapitaMall Trust) (Deputy Chairman)

• CapitaRetail China Trust Management Limited (manager of CapitaRetail China Trust) (Deputy

Chairman)

Present principal commitments (other than directorships in other listed companies)

• Building and Construction Authority (Member of the Board)

• Business China (Director)

• CapitaLand China Holdings Pte Ltd (Chairman)

• CapitaLand Hope Foundation (Director)

• CapitaLand Limited (President & Group CEO)

• CapitaLand Regional Investments Limited (Chairman)

• CapitaLand Singapore Limited (Chairman)

• CapitaMalls Asia Limited1 (Chairman)

• CTM Property Trust, Steering Committee (Chairman)

• LFIE Holding Limited (Co-Chairman)

• Shanghai YiDian Holding (Group) Company (Director)

• Singapore-China Foundation Ltd. (Governor)

• Singapore Tourism Board (Member of the Board)

• The Ascott Limited (Chairman)

Directorship in other listed company held over the preceding three years

• Central China Real Estate Limited


• Chief Operating Officer of CapitaLand Limited (From May 2011 to December 2012)

• CEO of The Ascott Limited (From July 2009 to February 2012)

• CEO of CapitaLand China Holdings Pte Ltd (From July 2000 to June 2009)

Awards

• Outstanding Chief Executive (Overseas) at the Singapore Business Awards 2006

• Magnolia Award by the Shanghai Municipal Government in 2003 and 2005

1 Delisted on 22 July 2014

Board of Directors


Lynette Leong Chin Yee

Chief Executive Officer

Executive Non-Independent Director

Bachelor of Science in Estate Management, National University of Singapore

Master of Science in Real Estate, National University of Singapore

Date of first appointment as a director: 1 October 2007

Length of service as a director (as at 31 December 2014): 7 years 3 months


• Executive Committee (Member)

Present principal commitment

• National Environment Agency (Board Member and Audit Committee Member)


• CEO of Ascendas South Korea office (From September 2003 to September 2007)

• National Director of LaSalle Investment Management, Asia (From March 2000 to September

2003)

• Vice President of LaSalle Investment Management, Chicago, USA (From January 1999 to March

2000)

• Vice President of LaSalle Investment Management, New York, USA (From January 1997 to

December 1998)

• Associate Director of LaSalle Investment Management, London, UK (From January 1996 to

December 1996)

• Director of Jones Lang Wootton (From 1993 to 1995)

• Senior Officer of United Malayan Banking Corporation Berhad (From 1991 to 1993)

• Senior Officer of Standard Chartered Bank (From 1986 to 1991)

Award

• Best CEOs for Property Sector (Third place) by Institutional Investor magazine in All-Asia

Executive Team Ranking in 2011


Dato’ Mohammed Hussein


Bachelor of Commerce (Accounting), University of Newcastle, Australia




• Audit Committee (Chairman)


• Gamuda Berhad (Chairman)

• Hap Seng Consolidated Berhad

• Quill Capita Management Sdn. Bhd. (manager of Quill Capita Trust) (Chairman)

Present principal commitments (other than directorships in other listed companies)

• Danajamin Nasional Berhad (Chairman)

• PNB Commercial Sdn. Bhd. (Director)

• Bank of America Malaysia Berhad (Director)


• MCB Bank Limited


• Senior Advisor of RSM Strategic Business Advisors Sdn Bhd, Malaysia (From July 2008 to 2009)

• Advisor of Malayan Banking Berhad, Malaysia (From April 2008 to September 2008)

• Deputy President & Chief Financial Officer of Malayan Banking Berhad, Malaysia (From 2005 to

January 2008)

• Executive Director, Business of Malayan Banking Berhad, Malaysia (From 2000 to 2005)

• Managing Director of Aseambankers Malaysia Berhad, Malaysia (From 1996 to 2000)

Board of Directors


Lam Yi Young


Master of Arts in Engineering, University of Cambridge, UK

Master in Public Administration, Harvard University, USA

Date of first appointment as a director: 15 June 2012



• Audit Committee (Member)

Present principal commitment

• Deputy Secretary (Policy) of Ministry of Education


• Chief Executive of Maritime and Port Authority of Singapore (From May 2009 to December 2013)

• Director of Manpower, Ministry of Defence (From June 2005 to April 2009)

• Deputy Director of Personnel, Ministry of Education (From September 2001 to July 2004)

Goh Kian Hwee


Bachelor of Laws (Honours), University of Singapore

Advocate & Solicitor




• Audit Committee (Member)


• Hong Leong Asia Ltd.

• Hwa Hong Corporation Limited

• QAF Limited

Present principal commitment (other than directorships in other listed companies)

• Rajah & Tann Singapore LLP (Senior Partner)


He has been a practising lawyer since 1980, principally in corporate and capital markets laws.


Wen Khai Meng


Bachelor of Engineering (First Class Honours), University of Auckland, New Zealand

Master of Business Administration and Master of Science in Construction Engineering, National

University of Singapore

Date of first appointment as a director1: 1 October 2007


Board committees served on

• Corporate Disclosure Committee (Chairman)


Present directorship in other listed company

• Quill Capita Management Sdn. Bhd. (manager of Quill Capita Trust)

Present principal commitment (other than directorship in other listed company)

• CapitaLand Singapore Limited (CEO)


• Ascott Residence Trust Management Limited (manager of Ascott Residence Trust)


• CEO of CapitaLand Financial Limited (From February 2012 to 2 January 2013)

• Chief Investment Officer of CapitaLand Limited (From July 2009 to February 2012)

• CEO of CapitaLand Commercial Limited (From April 2007 to June 2009)

• Co-CEO of CapitaLand Financial Limited (From April 2007 to June 2009)

• CEO of CapitaLand Financial Limited (From April 2006 to March 2007)

• CEO of CapitaLand Financial Services Limited (From October 2004 to March 2006)

1 Mr Wen Khai Meng was an alternate director to Mr Kee Teck Koon (a former director) from September 2006 to October 2007

Board of Directors


Chong Lit Cheong


Bachelor of Engineering (Electronics), University of Tokyo, Japan

Date of first appointment as a director: 25 March 2011


Board committees served on

• Corporate Disclosure Committee (Member)


Present directorship in other listed company

• Quill Capita Management Sdn. Bhd. (manager of Quill Capita Trust)

Present principal commitment (other than directorship in other listed company)

• CapitaLand Limited (Senior Advisor, Strategic Relations)


• CEO of Regional Investments, CapitaLand Limited (From 3 January 2013 to 31 December 2014)

• CEO of CapitaLand Commercial Limited (From 10 February 2011 to 2 January 2013)

• CEO of International Enterprise Singapore (From June 2006 to December 2010)

• CEO of Jurong Town Corporation (From January 2001 to May 2006)


Ms Lynette Leong Chin Yee

Chief Executive Officer and Executive Non-Independent Director (since October 2007)

Lynette is responsible for the strategic management and growth of CCT. Reporting to the Manager’s

Board of Directors, she is committed to delivering stable investment returns to Unitholders. Together

with the Board, she charts CCT’s future directions. Working closely with her management team, she

ensures that the Trust’s day-to-day finance, investment and asset management strategies are

executed according to its vision, mission and corporate social responsibility objectives. Her

experience is detailed in the Board of Directors’ section.

FINANCE

The Finance team supports CCT’s investment and asset management strategies through quarterly

financial reporting, budgeting, implementation of treasury and taxation policies, as well as sourcing

and management of funds for the Trust’s ongoing operations and acquisitions.

Ms Anne Chua

Head, Finance (since January 2010)

Anne is responsible for CCT’s financial management functions. She oversees all business matters

involving treasury, accounting and fund management, ensuring full alignment with CCT’s investment

strategy while focusing on optimising revenue and investment returns. Anne draws on her extensive

regional experience in finance and treasury with banks, locally listed and multinational companies.

She holds a Bachelor of Business Administration from the National University of Singapore, a Master

of Applied Finance from Macquarie University of Australia and a Master of Professional Accounting

from the Singapore Management University.

INVESTMENT

The Investment team expands and optimises CCT’s property portfolio mix through strategic

acquisitions. It identifies and analyses potential investment targets, and evaluates alternative

investment and asset holding structures to enhance the Trust’s total investment returns. It also

identifies potential divestment targets to enhance the value of the Trust.

Mr Chew Peet Mun

Head, Investment (since March 2008)

Peet Mun’s experience in finance and real estate spans over 15 years. Prior to CCT, Peet Mun was

Vice President of CapitaLand Financial Services Limited where he helped establish and manage

various CapitaLand-sponsored private funds and real estate investment trusts in Singapore and

Malaysia. He holds a Bachelor of Business Administration (First Class Honours) from the National

University of Singapore and was a recipient of the Lee Kuan Yew Gold Medal and MAS Book Prize.

The Manager


ASSET MANAGEMENT

The Asset Management team undertakes asset enhancement and environmentally sustainable initiatives to

realise the value potential of CCT’s portfolio. It directs asset enhancement exercises to maximise rental

income, and fosters close ties with tenants to understand and meet their needs. The Asset Management

team works with the Property Managers to execute asset strategies, boost rental and non-rental incomes

and manage operating expenses. It also collaborates with the Investment Team to evaluate acquisition

targets and optimise returns from the assets.

Ms Yvonne Ong

Head, Asset Management (since February 2011)

Yvonne has more than 20 years of real estate experience that includes investment and asset

management, marketing, and property and project management. A CFA charterholder and licensed

appraiser (lands and buildings), Yvonne has a Master of Science in Applied Finance from the

Singapore Management University and a Bachelor of Science (Estate Management) (Honours) from

the National University of Singapore. She is a member of CFA Singapore and the Singapore Institute

of Surveyors and Valuers.

INVESTOR RELATIONS AND COMMUNICATIONS

The Investor Relations and Communications team ensures clear and timely communications with

Unitholders and stakeholders through various communication channels. The team engages

investors, media and analysts through regular meetings, conferences and events, and produces

communication collaterals such as press releases, annual reports and presentations. The team is

responsible for CCT’s website and the “live” webcast of financial results and works closely with the

Property Managers to plan programmes as part of tenant communication.

Ms Ho Mei Peng

Head, Investor Relations and Communications (since March 2006)

Mei Peng brings more than 10 years of experience in managing investor relations and

communications. She has been instrumental to the Trust’s communication and liaison activities, and

is responsible for the delivery of timely and up-to-date information to the investing community. Mei

Peng graduated with an Honours degree in Japanese Studies from the National University of

Singapore.


The property manager provides property management, lease management and marketing services

to the Trust.

Owns Assets

The REIT

CapitaCommercial Trust

The Manager

CapitaCommercial Trust Management Limited

Manages

CapitaLand (RCS) Property

Management Pte. Ltd.

Managed by

Managed by

1. Capital Tower

2. Six Battery Road

3. One George Street

4. CapitaGreen

(40.0% interest)5. Twenty Anson

6. HSBC Building

7. Wilkie Edge

8. Bugis Village

9. Golden Shoe Car Park

10. Raffles City Singapore

(60.0% interest)

Building Managers

Cheong Pei Sze (Capital Tower)

Lim Chiong Kerng (Six Battery Road/

Golden Shoe Car Park)

Alan Chng (One George Street)

Victor Leung (CapitaGreen/HSBC Building)

Agnes Chua (Twenty Anson)

Lau Kok Ching (Wilkie Edge)

Mohd Nasir Bin Allapitchay (Bugis Village)

CapitaLand Commercial Management

Pte. Ltd.

General Manager

Margaret Khoo (Raffles City Singapore)

Head, Marketing

& Leasing

Dawn Lai

Head, Property

Services

Alfred Lim

The Property Manager


Date Event

23 January • Achieved distributable income of S$234.2 million and DPU of 8.14 cents for

FY 2013.

15 April • CapitaGreen secured lease commitment for about 12% of total NLA.

• Obtained Unitholders’ approval for renewal of Unit buy-back mandate at

Annual General Meeting.

17 April • Achieved distributable income of S$59.9 million for 1Q 2014.

30 June • During 1H 2014, S$61.50 million of CB due 2015 was converted into CCT

units and S$83.25 million of CB due 2015 was repurchased, reducing the

principal amount to S$45.5 million.

2 July • CapitaGreen marked topping-out milestone with 21% leasing commitment.

• Celebrated CCT’s 10th Anniversary.

15 July • Awarded Gold for both Best Annual Report and Best Investor Relations at the

Singapore Corporate Awards 2014.

18 July • Achieved distributable income of S$124.0 million and DPU of 4.22 cents for

1H 2014.

• Completed AEI for Raffles City Tower and achieved return on investment of

9.3%, which was higher than projected.

14 August • Issued S$50.0 million 2.98% notes due 2021 from the S$2.0 billion

multicurrency Medium Term Note (MTN) Programme.

25 August • Standard & Poor’s upgraded CCT’s long-term corporate credit rating to “A-”

from “BBB+”.

22 September • Mr Kee Teck Koon resigned as Chairman of the Board and Non-Executive

Independent Director

• Mr Soo Kok Leng, a Non-Executive Independent Director, appointed as

Chairman of the Board

26 September • Organised the third CCT Eco Race 2014, in partnership with Singapore’s

Building and Construction Authority and event partner, BMW Asia. Attracted

about 300 participants from 30 organisations.

24 October • Achieved distributable income of S$61.6 million for 3Q 2014.

31 October • Issued JPY6.3 billion floating rate notes due 2021 from the S$2.0 billion

multicurrency MTN Programme. The JPY proceeds were hedged to S$75.0

million at SGD fixed interest rate of 2.95% per annum.

24 November • During 2H 2014, S$7.75 million of CB due 2015 was converted into CCT units

and S$37.50 million of CB due 2015 was repurchased. On 24 November

2014, CCT redeemed the outstanding balance of S$0.25 million and all the

CB due 2015 was cancelled.

17–19 December • Distributed “Gifts of Joy” contributed by tenants and staff to 480

beneficiaries supported by Beyond Social Services.

18 December • Obtained TOP for CapitaGreen.

• CapitaGreen secured lease commitment for 50.4% of total NLA.

31 December • CapitaGreen secured lease commitment for 69.3% of total NLA.

Year in Brief 2014


OUR ROLE

Our primary role as the manager of CCT (Manager) is to set the strategic direction of CCT and make

recommendations to HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee

of CCT (Trustee), on acquisition, divestment and enhancement of the assets of CCT in accordance

with its stated investment strategy. The research, evaluation and analysis required for this purpose

are coordinated and carried out by us as the Manager.

As the Manager, we have general powers of management over the assets of CCT. Our primary

responsibility is to manage the assets and liabilities of CCT for the benefit of the unitholders of CCT

(Unitholders). We do this with a focus on generating rental income and enhancing asset value over

time so as to maximise returns from investments, and ultimately distributions and total returns to

Unitholders.

Our other functions and responsibilities as the Manager include:

(a) using our best endeavours to conduct CCT’s business in a proper and efficient manner and to

conduct all transactions with, or on behalf of CCT, at arm’s length;

(b) preparing annual business plans for review by the directors of the Manager (Directors),

including forecasts on revenue, net income and capital expenditure, explanations on major

variances to previous years’ plans, written commentaries on key issues and underlying

assumptions on rental rates, operating expenses and any other relevant assumptions;

(c) ensuring compliance with relevant laws and regulations, including the Listing Manual of

Singapore Exchange Securities Trading Limited (SGX-ST) (Listing Manual), the Code on

Collective Investment Schemes (CIS Code) issued by the Monetary Authority of Singapore

(MAS) (including Appendix 6 of CIS Code (Property Funds Appendix)) and the tax rulings issued

by the Inland Revenue Authority of Singapore on the taxation of CCT and Unitholders;

(d) attending to all regular communications with Unitholders; and

(e) supervising CapitaLand Commercial Management Pte. Ltd. (Property Manager), the property

manager which performs the day-to-day property management functions (including leasing,

marketing, promotion, coordination and property management) for CCT’s properties; with regard

to Raffles City Singapore (RCS), which is held by CCT and CapitaMall Trust (CMT) in the

proportions of 60.0% and 40.0% respectively, the Property Manager holds 60.0% interest in

CapitaLand (RCS) Property Management Pte. Ltd. which provides property management

services to RCS with CapitaLand Retail Management Pte Ltd, the property manager of the malls

owned by CMT, holding the other 40.0%. As a result of its interest in CapitaLand (RCS) Property

Management Pte. Ltd., the Property Manager is able to play a key role in directing the property

management function for RCS.

The Manager also considers sustainability issues (including environmental and social factors) as part

of its responsibilities. CCT’s environmental sustainability and community outreach programmes are

set out on pages 52 to 78 of the Annual Report.

CCT, constituted as a trust, is externally managed by the Manager and therefore has no personnel

of its own. The Manager appoints experienced and well qualified management to run its day-to-day

operations. All Directors and employees of the Manager are remunerated by the Manager and not

CCT.

Corporate Governance


The Manager was appointed in accordance with the terms of the trust deed constituting CCT dated

6 February 2004 (as amended, varied or supplemented from time to time) (Trust Deed). The Trust

Deed also outlines certain circumstances under which the Manager can be removed, including by

notice in writing given by the Trustee upon the occurrence of certain events, or by a resolution passed

by a simple majority of Unitholders present and voting at a meeting of Unitholders duly convened and

held in accordance with the provisions of the Trust Deed.

The Manager is a subsidiary of CapitaLand Limited (CL) which holds a significant unitholding interest

in CCT. CL is a long-term real estate developer and investor and has strong inherent interests in the

performance of CCT. CL’s retention of a significant unitholding interest in CCT ensures its

commitment to CCT and aligns its interests with other Unitholders. The Manager’s association with CL

provides the following benefits, amongst other things, to CCT:

(a) stable pipeline of property assets through CL’s development activities;

(b) wider and better access to banking and capital markets on favourable terms;

(c) fund raising and treasury support; and

(d) access to a bench of experienced management talent.

OUR CORPORATE GOVERNANCE CULTURE

The Manager aspires to the highest standards of corporate conduct as guided by the Principles of

the Code of Corporate Governance 2012 (Code). The Manager believes in developing and

maintaining sound and transparent policies and practices to meet the specific business needs of

CCT and to provide a firm foundation for a trusted and respected business enterprise. The Manager

remains focused on complying with the substance and spirit of the Principles of the Code while

achieving operational excellence and delivering CCT’s long-term strategic objectives.

The Manager has received accolades from the investment community for excellence in corporate

governance. More details can be found in the Investor Relations section on page 50 of the Annual

Report.

This report sets out the corporate governance practices for financial year (FY) 2014 with reference

to the Code. Where there are deviations from the principles and guidelines of the Code, an

explanation has been provided within this report.


(A) BOARD MATTERS

The Board’s Conduct of Affairs

Principle 1:

Every company should be headed by an effective Board to lead and control the company. The

Board is collectively responsible for the long-term success of the company. The Board works

with Management to achieve this objective and Management remains accountable to the Board.

The Manager is led by a board of Directors (Board), with non-executive independent Directors

comprising half of the Board. Each Director brings to the Board skills, experience, insights and sound

judgement, which together with his or her strategic networking relationships, serve to further the

interests of CCT. At all times, the Directors are collectively and individually obliged to act honestly

and with diligence, and consider the best interests of Unitholders.

The Board oversees the affairs of the Manager, in furtherance of the Manager’s primary responsibility

to manage the assets and liabilities of CCT for the benefit of Unitholders. The Board appoints the

Chief Executive Officer (CEO), who, assisted by the management team of the Manager

(Management), is responsible for the day-to-day management and overall operation of CCT’s

business.

The Board provides leadership to the Management, sets strategic directions and oversees the

management of CCT. The Board establishes goals for Management and monitors the achievement of

these goals. It ensures that proper and effective controls are in place to assess and manage business

risks and compliance with requirements under the Listing Manual, the Property Funds Appendix, as

well as any other applicable guidelines prescribed by the SGX-ST, the MAS or other relevant

authorities, and applicable laws. It also sets the disclosure and transparency standards for CCT and

ensures that obligations to Unitholders and other stakeholders are understood and met.

The Board has reserved authority to approve certain matters and these include:

(a) material acquisitions, investments, disposals and divestments;

(b) issue of new units;

(c) income distributions and other returns to Unitholders; and

(d) matters which involve a conflict of interest for a controlling unitholder or a Director.

Various Board Committees, namely the Audit Committee (AC), Corporate Disclosure Committee

(CDC) and Executive Committee (EC) have been constituted with clear written terms of reference to

assist the Board in the discharge of its functions. The composition of the various Board Committees

is set out on page 46 of the Annual Report.

Each of these Board Committees operates under delegated authority from the Board. The Board may

form other Board Committees as dictated by business imperatives. Membership of the various Board

Committees is managed to ensure an equitable distribution of responsibilities among Board

members, to maximise the effectiveness of the Board and to foster active participation and

contribution from Board members. Diversity of experience and appropriate skills are considered in

the composition of the respective Board Committees.



The Board has adopted a set of internal controls which establishes approval limits for, amongst other

things, capital expenditure, investments, divestments and debts. Apart from matters that specifically

require the Board’s approval, the Board delegates authority for transactions below those limits to

Board Committees and Management. Approval sub-limits are also provided at management level to

optimise operational efficiency.

The Board meets at least once every quarter, and as required by business imperatives. Where

exigencies prevent a Director from attending a Board meeting in person, the Articles of Association

of the Manager permit the Director to participate via teleconferencing or video conferencing. The

Board and Board Committees may also make decisions by way of resolutions in writing.

A total of four Board meetings were held in FY 2014. A table showing the attendance record of

Directors at meetings of the Board and Board Committees during FY 2014 is set out on page 46 of

the Annual Report. The Manager believes in the manifest contribution of its Directors beyond

attendance at formal Board and Board Committees meetings. To judge a director’s contributions

based on his or her attendance at formal meetings alone would not do justice to his or her overall

contributions, which include being accessible by Management for guidance or exchange of views

outside the formal environment of Board and Board Committees meetings.

The Manager provides suitable training for Directors. Upon appointment, each Director is provided

with a formal letter of appointment and is also given a copy of the Directors’ Manual (which includes

information on a broad range of matters relating to the role of a director). All Directors on appointment

are required to undertake an induction programme to familiarise themselves with matters relating to

the business activities of CCT, its strategic directions and policies, the regulatory environment in

which CCT operates and the Manager’s corporate governance practices. The Manager also provides

appropriate training for first-time directors including industry-specific knowledge.

Following their appointment, Directors are provided with opportunities for continuing education in

areas such as directors’ duties and responsibilities, changes to regulations and accounting

standards and industry-related matters, so as to be updated on matters that affect or may enhance

their performance as Directors or Board Committee members.

Board Composition and Guidance

Principle 2:

There should be a strong and independent element on the Board, which is able to exercise

objective judgement on corporate affairs independently, in particular, from Management and

10% shareholders. No individual or small group of individuals should be allowed to dominate

the Board’s decision making.

The Board comprises individuals who are business leaders and professionals with financial, banking,

fund management, real estate, legal, investment and accounting backgrounds. The varied

backgrounds of the Directors enable Management to benefit from their external, diverse and

objective perspectives on issues brought before the Board. The size and composition of the Board

are reviewed regularly to ensure that the Board is of appropriate size and has an optimal mix of

expertise and experience, and comprises persons who, as a group, provide the necessary core

competencies, taking into consideration the nature and scope of CCT’s operations.

The Board presently comprises eight Directors, of whom four are non-executive independent

Directors. The profiles of the Directors are set out on pages 17 to 23 of the Annual Report.


The independence of each Director is reviewed by the Board upon appointment, and thereafter

annually and as and when circumstances require. An independent director is one who has no

relationship with the Manager, its related corporations, its shareholders who hold 10% or more of the

voting shares in the Manager, or Unitholders who hold 10% or more of the units in issue of CCT or

its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the

Directors’ independent business judgement in the best interests of CCT. The Board has determined

that Mr Soo Kok Leng, Dato’ Mohammed Hussein, Mr Lam Yi Young and Mr Goh Kian Hwee are

independent Directors under the Code.

Chairman and Chief Executive Officer

Principle 3:

There should be a clear division of responsibilities between the leadership of the Board and the

executives responsible for managing the company’s business. No one individual should

represent a considerable concentration of power.

To maintain an appropriate balance of power, increased accountability and greater capacity of the

Board for independent decision making, the roles and responsibilities of the Chairman and the CEO

are held by separate individuals.

The non-executive independent Chairman is responsible for leading the Board and ensuring that the

Board is effective on all aspects of its role. The CEO has full executive responsibilities over the

business directions and operational decisions of CCT and is responsible for implementing CCT’s

strategies and policies and for conducting CCT’s business. The Chairman and the CEO are not

immediate family members. The separation of the roles of the Chairman and the CEO and the

resulting clarity of roles provide a healthy professional relationship between the Board and the

Management and facilitate robust deliberations on the business activities of CCT and exchange of

ideas and views to help shape the strategic process.

The Chairman is responsible for leadership of the Board and for creating the conditions for overall

effectiveness of the Board, Board Committee and individual Director. This includes setting the

agenda of the Board in consultation with the CEO and promoting constructive engagement among

the Directors as well as between the Board and the CEO on strategic issues.

The Chairman plays a significant leadership role by providing clear oversight, advice and guidance

to the CEO and Management on strategies and business operations.

Board Membership

Principle 4:

There should be a formal and transparent process for the appointment and re-appointment of

directors to the Board.

The Manager does not have a nominating committee. In view that the Manager is a dedicated

manager to only CCT, and taking into account the activities and scale of business of CCT, the size

of the Board and the fact that independent directors constitute half of the Board of the Manager, the

Board considers that the objectives of a nominating committee may be achieved by the full Board (of

which independent Directors comprise half of the Board) undertaking the responsibilities of a

nominating committee. Therefore, the Board performs the functions that such a committee would

otherwise perform, namely, it administers nominations to the Board, reviews the structure, size and

composition of the Board, and reviews the independence of Board members. Directors of the

Manager are not subject to periodic retirement by rotation.



Under the Code, the composition of the Board, including the selection of candidates for new

appointments to the Board as part of the Board’s renewal process, is determined using the following

principles:

(a) the Board should comprise Directors with a broad range of commercial experience, including

expertise in fund management, the property industry, banking and legal fields; and

(b) at least one-third of the Board should comprise independent Directors. Where, amongst other

things, the Chairman of the Board is not an independent Director, at least half of the Board

should comprise independent Directors.

Renewal or replacement of Board members do not necessarily reflect their contributions to date, but

may be driven by the need to position and shape the Board in line with the evolving needs of CCT

and its business.

The selection of candidates is evaluated taking into account various factors including the current and

mid-term needs and goals of CCT, as well as the relevant expertise of the candidates and their

potential contributions. Candidates may be put forward or sought through contacts and

recommendations.

Guideline 4.4 of the Code recommends that the Board determine the maximum number of listed

company board representations which any director may hold and disclose this in the annual report.

The Board is of the view that, the limit on the number of listed company directorships that an

individual may hold should be considered on a case-by-case basis, as a person’s available time and

attention may be affected by many different factors such as whether they are in full-time employment

and their other responsibilities. A Director with multiple directorships is expected to ensure that

sufficient attention is given to the affairs of the Manager in managing the assets and liabilities of CCT

for the benefit of Unitholders. The Board believes that each individual Director is best placed to

determine and ensure that he or she is able to devote sufficient time and attention to discharge his

or her duties and responsibilities as a Director of the Manager, bearing in mind his or her other

commitments. In considering the nomination of Directors for appointment, the Board will take into

account, amongst other things, the competing time commitments faced by Directors with multiple

Board memberships. All Directors had confirmed that notwithstanding the number of their individual

listed company board representations and other principal commitments, which the Directors held,

they were able to devote sufficient time and attention to the affairs of the Manager in managing the

assets and liabilities of CCT for the benefit of Unitholders. The Board is of the view that the current

commitments of each of its Directors are reasonable and each of the Directors is able to and has

been adequately carrying out his or her duties.

Board Performance

Principle 5:

There should be a formal annual assessment of the effectiveness of the Board as a whole and

its board committees and the contribution by each director to the effectiveness of the Board.

The Manager believes that Board performance is ultimately reflected in the long-term performance

of CCT.

The Board strives to ensure that there is an optimal blend in the Board of background, experience

and knowledge in business, finance and management skills critical to CCT’s business and that each

Director could bring to the Board an independent and objective perspective to enable balanced and

well-considered decisions to be made in the interests of CCT. Contributions by an individual Board


member can also take other forms, including providing objective perspectives on issues, facilitating

business opportunities and strategic relationships, and accessibility by Management outside of a

formal environment of Board and/or Board Committees meetings.

Reviews of Board performance are carried out on an informal basis. The Manager believes that

collective Board performance and that of individual Board members are better reflected in, and

evidenced by, its and their proper guidance, diligent oversight and able leadership, and the support

that it lends to Management in steering CCT in the appropriate direction, and the long-term

performance of CCT whether under favourable or challenging market conditions. The Board was also

able to assess the Board Committees through their regular reports to the Board on their activities.

Access to Information

Principle 6:

In order to fulfil their responsibilities, directors should be provided with complete, adequate

and timely information prior to board meetings and on an on-going basis so as to enable them

to make informed decisions to discharge their duties and responsibilities

The Manager recognises the importance of providing the Board with timely, adequate and relevant

information prior to Board meetings, and as and when the need arises.

As a general rule, Board papers are sent to Board members at least five working days prior to the

Board meeting to allow the members to prepare for the Board meetings and to enable the discussions

to focus on questions that the members may have. However, sensitive matters may be tabled at the

meeting itself or discussed without any papers being distributed.

In line with the Manager’s commitment to limit paper wastage and reduce its carbon footprint, the

Manager no longer provides printed copy of Board papers and Directors are instead provided with

tablet devices to enable them to access and read Board and Board Committee papers prior to and

at meetings. This initiative also enhances information security as the papers are downloaded to tablet

devices through an encrypted channel.

In addition to providing timely, adequate and relevant information to the Board on Board affairs and

issues requiring the Board’s decision, the Management also provides on-going reports relating to the

operational and financial performance of the Manager, such as monthly management reports.

Where appropriate, informal meetings are also held for Management to brief Directors on prospective

deals and potential developments in the early stages before formal Board approval is sought.

The Board has separate and independent access to Management including the company secretary

of the Manager (Company Secretary) at all times. The Company Secretary attends to corporate

secretarial administration matters and is the corporate governance advisor on corporate matters to

the Board and Management. The Company Secretary attends Board meetings. The Board, whether

as individual Director or as a group, is also entitled to have access to independent professional

advice where required, at the Manager’s expense.

The AC also meets the internal auditors and external auditors separately at least once a year, without

the presence of the CEO and Management and has unfettered access to any information that it may

require.



(B) REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7:

There should be a formal and transparent procedure for developing policy on executive

remuneration and for fixing the remuneration packages of individual directors. No director

should be involved in deciding his own remuneration.

Level and Mix of Remuneration

Principle 8:

The level and structure of remuneration should be aligned with the long-term interest and risk

policies of the company, and should be appropriate to attract, retain and motivate (a) the

directors to provide good stewardship of the company, and (b) key management personnel to

successfully manage the company. However, companies should avoid paying more than is

necessary for this purpose.

Disclosure on Remuneration

Principle 9:

Every company should provide clear disclosure of its remuneration policies, level and mix of

remuneration, and the procedure for setting remuneration, in the company’s Annual Report. It

should provide disclosure in relation to its remuneration policies to enable investors to

understand the link between remuneration paid to directors and key management personnel,

and performance.

The Manager believes that a framework of remuneration for the Board and key executives should not

be taken in isolation. It should be linked to the building of management bench strength and the

development of key executives. This is to ensure continual development of talent and renewal of

strong and sound leadership for a sustainable business and a lasting company in the best interests

of CCT.

The remuneration of the Directors and employees of the Manager is paid by the Manager, and not by

CCT. As the Manager is a subsidiary of CL, it adheres to the remuneration policies and practices of

CL. The Manager therefore does not have a remuneration committee.

The Manager’s tapping on the compensation framework of CL puts the Manager in a better position

to attract better qualified management talent, who may otherwise not be attracted to a standalone

REIT manager. The Manager being a subsidiary of CL also provides an intangible benefit of allowing

its employees to be associated with a wider corporate group identity which can offer them the depth

and breadth of experience and career horizon and this enables the Manager to attract and retain

qualified individuals.

The Board has carefully considered the remuneration policies and practices of CL and is satisfied

that such policies and practices will provide the Manager with a suitable remuneration policy.

The Directors’ fees for FY 2014 are shown in the table on page 36 of the Annual Report. The CEO

does not receive any fees in her capacity as a Director. Directors’ fees generally comprise a basic

retainer fee as a Director, an additional fee for serving on any of the Board Committees and an

attendance fee for participation in meetings of the Board and any of the Board Committees, project

meetings and verification meetings.


Non-executive Directors (save for Directors who are employees of CL) receive Directors’ fees which

are payable by way of cash and units in CCT (Units). The Manager believes that the payment of a

portion of the Directors’ fees in Units will serve to align the interests of such Directors with that of

Unitholders and CCT’s long-term growth and value.

Directors’ Fees1

Board Members FY 2014 FY 2013

Soo Kok Leng S$ 72,8992,5 S$ 59,0002,3

Kee Teck Koon S$ 69,6494 S$ 93,4002,3

Lim Ming Yan N.A.6 N.A.3,6

Lynette Leong Chin Yee N.A. N.A.

Dato’ Mohammed Hussein S$112,0002 S$111,3002

Lam Yi Young S$ 76,0007 S$ 75,4007

Goh Kian Hwee S$ 76,0002 S$ 76,0002,3

Wen Khai Meng N.A.6 N.A.6

Chong Lit Cheong N.A.6 N.A.6

N.A.: Not Applicable

1 Inclusive of attendance fees of (a) S$2,000 (local director) and S$5,000 (foreign director) per meeting attendance in person

(b) S$1,700 per meeting attendance via teleconferencing or video conferencing, and (c) S$1,000 per meeting attendance at

project and verification meetings subject to a maximum of S$10,000 per Director per annum. Directors’ fees are subject to the

approval of the Manager’s sole shareholder.

2 Each non-executive Director shall receive up to 20% of his Director’s fees in the form of Units (subject to truncation

adjustments). The remainder of the Director’s fees shall be paid in cash. No new Units will be issued for this purpose as these

Units will be paid by the Manager from the Units it holds.

3 Mr Kee Teck Koon, Mr Soo Kok Leng, Mr Lim Ming Yan and Mr Goh Kian Hwee were appointed as Directors with effect from

1 January 2013. Mr Kee Teck Koon was appointed as Chairman of the Board with effect from 23 January 2013.

4 Mr Kee Teck Koon resigned from the Board with effect from 22 September 2014. Mr Kee will receive all of his Director’s fees

for FY 2014 in cash.

5 Mr Soo Kok Leng was appointed as Chairman of the Board with effect from 22 September 2014.

6 Non-executive Directors who are management appointees of CL do not receive Directors’ fees.

7 All Director’s fees payable to Mr Lam Yi Young, a public officer, will be paid in cash to a government agency, The Directorship

& Consultancy Appointments Council.

(C) ACCOUNTABILITY AND AUDIT

Accountability

Principle 10:

The Board should present a balanced and understandable assessment of the company’s

performance, position and prospects.

The Manager provides Unitholders with quarterly and annual financial statements. In presenting the

annual and quarterly financial statements to Unitholders, the Board aims to provide Unitholders with

a balanced, clear and understandable assessment of CCT’s performance, position and prospects. In

order to achieve this, Management provides the Board with management accounts on a monthly

basis and such explanation and information as any Director may require, to enable the Directors to

keep abreast, and make a balanced and informed assessment, of CCT’s financial performance,

position and prospects.



The Manager believes in conducting itself in ways that seek to deliver maximum sustainable value to

Unitholders. Best practices are promoted as a means to build an excellent business for Unitholders

and the Manager is accountable to Unitholders for CCT’s performance. Prompt fulfilment of statutory

reporting requirements is but one way to maintaining Unitholders’ confidence and trust in the

capability and integrity of the Manager.

Risk Management and Internal Controls

Principle 11:

The Board is responsible for the governance of risk. The Board should ensure that

Management maintains a sound system of risk management and internal controls to safeguard

shareholders’ interests and the company’s assets, and should determine the nature and extent

of the significant risks which the Board is willing to take in achieving its strategic objectives.

The Manager has in place an adequate and effective system of internal controls addressing material

financial, operational, compliance and information technology risks to safeguard Unitholders’

interests and CCT’s assets.

The Board has overall responsibility for the governance of risk and exercises oversight of the risk

management strategy and framework. The AC assists the Board in strengthening the Manager’s risk

management capabilities for CCT and its subsidiaries (CCT Group).

In carrying out this responsibility, in particular, the AC:

(a) makes recommendations to the Board on the risk appetite including associated risk parameters

for CCT Group;

(b) oversees Management in the formulation, updating and maintenance of an adequate and

effective risk management framework, policies and strategies for managing risks that are

consistent with the approved risk appetite and parameters for CCT Group and report to the

Board on its decisions on any material matters concerning the aforementioned;

(c) makes the necessary recommendations to the Board such that an opinion and comment

regarding the adequacy and effectiveness of the risk management and internal control systems

can be made by the Board in the annual report of CCT in accordance with the Listing Manual

and the Code; and

(d) reports to the Board on any material breaches of risk limits and the adequacy of any proposed

action.

The Manager adopts an Enterprise Risk Management Framework (ERM Framework) which sets out

the required environmental and organisational components for managing risk in an integrated,

systematic and consistent manner. The ERM Framework and related policies are reviewed annually.

The Manager consistently seeks to improve and strengthen its ERM Framework. As part of the ERM

Framework, the Management, amongst other things, undertakes and performs a Risk and Control

Self-Assessment (RCSA) process. As a result of the RCSA process, the Manager produces and

maintains a risk register which identifies the material risks CCT Group faces and the corresponding

internal controls it has in place to manage or mitigate those risks. The material risks are reviewed

annually by the AC and the Board. The AC also reviews the approach of identifying and assessing

risks and internal controls in the risk register. The system of risk management and internal controls

is reviewed and, where appropriate, refined, regularly by the Management, the AC and the Board.


The Manager has established an approach towards how risk appetite is defined, monitored and

reviewed for CCT Group. Approved by the Board, the Risk Appetite Statement (RAS), addresses the

management of material risks faced by CCT Group. Alignment of CCT Group’s risk profile to the RAS

is achieved through various communication and monitoring mechanisms (including key performance

indicators set for Management) put in place across the various functions within the Manager.

More information on CCT’s ERM Framework can be found in the Enterprise Risk Management section

on pages 47 to 49 of the Annual Report.

Internal auditors and external auditors conduct audits that involve testing the effectiveness of the

material internal controls for CCT Group addressing financial, operational, compliance and

information technology risks. This includes testing, where practical, material internal controls in areas

managed by external service providers. Any material non-compliance or lapses in internal controls

together with corrective measures recommended by the internal auditors and external auditors are

reported to and reviewed by the AC. The adequacy and effectiveness of the measures taken by the

Manager in response to the recommendations made by the internal auditors and external auditors are

also reviewed by the AC.

The Board has received assurance from the CEO and Head of Finance of the Manager that:

(a) the financial records for CCT Group have been properly maintained and the financial statements

for the year ended 31 December 2014 give a true and fair view of CCT Group’s operations and

finances; and

(b) the system of risk management and internal controls in place for CCT Group is adequate and

effective in addressing the material risks faced by CCT Group in its current business

environment including material financial, operational, compliance and information technology

risks. The CEO and Head of Finance of the Manager have obtained similar assurance from the

respective risk and control owners.

In addition, in FY 2014, the Board has received quarterly certification by Management on the integrity

of financial reporting and the Board has provided a negative assurance confirmation to Unitholders

as required by the Listing Manual.

Based on the ERM Framework established and the reviews conducted by the Management and both

the internal auditors and external auditors, as well as the assurance from the CEO and Head of

Finance of the Manager, the Board concurs with the recommendation of the AC and is of the opinion,

that the system of risk management and internal controls addressing material financial, operational,

compliance and information technology risks established by the Manager is adequate and effective

to meet the needs of CCT Group in its current business environment as at 31 December 2014.

The Board notes that the system of risk management and internal controls established by the

Manager provides reasonable assurance that CCT Group, as it strives to achieve its business

objectives, will not be significantly affected by any event that can be reasonably foreseen or

anticipated. However, the Board also notes that no system of risk management and internal controls

can provide absolute assurance in this regard, or absolute assurance against poor judgement in

decision making, human error, losses, fraud or other irregularities.



Audit Committee

Principle 12:

The Board should establish an Audit Committee with written terms of reference which clearly

set out its authority and duties.

All the members of the AC, including the Chairman of the AC, are non-executive independent

Directors. The members bring with them invaluable recent and relevant managerial and professional

expertise in accounting and related financial management domains.

The AC has explicit authority to investigate any matter within its terms of reference. Management is

required to provide the fullest co-operation in providing information and resources, and in

implementing or carrying out all requests made by the AC. The AC has direct access to the internal

auditors and external auditors and full discretion to invite any Director or executive officer to attend

its meetings. Similarly, both the internal auditors and external auditors are given unrestricted access

to the AC.

The AC is guided by its terms of reference, in particular, the AC:

(a) monitors and evaluates the effectiveness of the Manager’s system of risk management and

internal controls (including financial, operational, compliance and information technology

controls and risk management policies and systems) through reviewing written reports from the

internal auditors and external auditors to ensure that where deficiencies in internal controls have

been identified, appropriate and prompt remedial action is taken by Management;

(b) reviews the significant financial reporting issues and judgements so as to ensure the integrity of

the financial statements of CCT Group and any announcements relating to CCT Group’s financial

performance;

(c) reviews the effectiveness of the internal audit function;

(d) reviews the scope and results of the external audit and also assesses the cost effectiveness, the

independence and objectivity of the external auditors;

(e) makes recommendations to the Board on the proposals to Unitholders on the appointment,

re-appointment and removal of the external auditors, and approving the remuneration of the

external auditors;

(f) reviews and approves processes to regulate transactions involving an Interested Person (as

defined in Chapter 9 of the Listing Manual) and/or Interested Party (as defined in the Property

Funds Appendix) (each, an Interested Person) and CCT and/or its subsidiaries (Interested

Person Transactions), in particular, ensuring compliance with the provisions of the Listing

Manual and the Property Funds Appendix relating to Interested Person Transactions; and

(g) reviews the policy and arrangements by which employees of the Manager and any other persons

may, in confidence, report suspected fraud or irregularity or suspected infringement of any laws

or regulations or rules or, raise concerns about possible improprieties in matters of financial

reporting or other matters with a view to ensuring that arrangements are in place for such

concerns to be raised and independently investigated, and for appropriate follow-up action to

be taken.


The AC has reviewed the nature and extent of non-audit services provided by the external auditors

during FY 2014 and the fees paid for such services. The AC is satisfied that the independence of the

external auditors has not been impaired by the provision of those services. The external auditors

have also provided confirmation of their independence to the AC. The aggregate amount of fees paid

and payable to the external auditors for the FY 2014 was approximately S$290,000, of which audit

fees amounted to approximately S$277,000 and non-audit fees amounted to approximately

S$13,000.

In FY 2014, the AC also met with the internal auditors and external auditors, without Management’s

presence, to discuss the reasonableness of the financial reporting process, the system of internal

controls, and the significant comments and recommendations by the auditors. Where relevant, the

AC makes reference to the best practices and guidance in the Guidebook for Audit Committees in

Singapore and the practice directions issued from time to time in relation to Financial Reporting

Surveillance Programme administered by the Accounting and Corporate Regulatory Authority of

Singapore.

The Manager confirms, on behalf of CCT, that CCT complies with Rule 712 and Rule 715 of the Listing

Manual.

Internal Audit

Principle 13:

The company should establish an effective internal audit function that is adequately resourced

and independent of the activities it audits.

The Manager has in place an internal audit function supported by CL’s Internal Audit Department (CL

IA) which reports directly to the AC and administratively to the CEO. CL IA plans its internal audit

schedules in consultation with, but independently of, Management and its plan is submitted to the AC

for approval prior to the beginning of each year. The AC also meets with CL IA at least once a year

without the presence of Management. CL IA has unfettered access to the Manager’s documents,

records, properties and employees, including access to the AC.

CL IA is a corporate member of the Singapore branch of the Institute of Internal Auditors Inc. (IIA),

which has its headquarters in the USA. CL IA subscribes to, and is guided by, the International

Standards for the Professional Practice of Internal Auditing (Standards) developed by the IIA and has

incorporated these Standards into its audit practices.

To ensure that internal audits are performed by competent professionals, CL IA recruits and employs

suitably qualified professional staff with the requisite skill set and experience.

CL IA identifies and provides training and development opportunities for its staff to ensure their

technical knowledge and skill set remain current and relevant.



(D) SHAREHOLDER RIGHTS AND RESPONSIBILITIES

Shareholder Rights

Principle 14:

Companies should treat all shareholders fairly and equitably, and should recognise, protect

and facilitate the exercise of shareholders’ rights, and continually review and update such

governance arrangements.

The Manager is committed to treating all Unitholders fairly and equitably and keeping all Unitholders,

other stakeholders and analysts informed of the performance and changes in CCT or its business

which would be likely to materially affect the price or value of Units, on a timely and consistent basis,

so as to assist Unitholders and investors in their investment decisions.

The Manager provides accurate and timely disclosure of material information on the SGXNet.

All Unitholders are entitled to attend general meetings and are accorded the opportunity to

participate effectively and vote at general meetings. All Unitholders are also informed of the rules,

including voting procedures, governing such meetings.

Communication with Shareholders

Principle 15:

Companies should actively engage their shareholders and put in place an investor relations

policy to promote regular, effective and fair communication with shareholders.

The Manager has in place an Investor Relations & Communications department which facilitates

effective communication with Unitholders, analysts, fund managers and the media.

The Manager actively engages with Unitholders and has put in place an Investor Relations Policy

(Policy) to promote regular, effective and fair communications with Unitholders. The Policy is

uploaded on CCT’s website at www.cct.com.sg.

The Board has established the CDC which assists the Board in the discharge of its function to meet

the legal and regulatory obligations arising under the laws and regulations of Singapore relating to

best practices in the corporate disclosure and compliance process.

More information on the Manager’s investor relations with Unitholders can be found in the Investor

Relations section on pages 50 to 51 of the Annual Report and the Policy which is available on CCT’s

website.

CCT is a constituent of a few major indices including the MSCI Global Standard Indices, FTSE4Good

Index Series, and the European Public Real Estate Association (EPRA)/National Association of Real

Estate Investment Trust (NAREIT) Global Real Estate Index, as well as other indices which are widely

tracked and referred to by international fund managers as performance benchmarks in the selection

and monitoring of investments.

CCT’s distribution policy is to distribute at least 90% of its taxable income (other than gains on the

sale of real properties that are determined to be trading gains), with the actual level of distribution

to be determined at the Manager’s discretion.


Conduct of Shareholder Meetings

Principle 16:

Companies should encourage greater shareholder participation at general meetings of

shareholders, and allow shareholders the opportunity to communicate their views on various

matters affecting the company.

The Manager supports the principle of encouraging Unitholders’ participation and voting at general

meetings. Unitholders receive a CD containing the CCT Annual Report (printed copies are available

upon request) and notice of the annual general meeting. As and when an extraordinary general

meeting is to be held, Unitholders will receive a copy of the circular which contains details of the

matters to be proposed for Unitholders’ consideration and approval. Notices of the general meetings

are also advertised in the press and issued via SGXNet.

At general meetings, Unitholders are encouraged to communicate their views on and discuss with the

Board and Management matters affecting CCT. Representatives of the Trustee, Directors (including

the respective Chairpersons of the Board and the AC), the Manager’s senior management and the

external auditors of CCT, would usually be present at general meetings.

To safeguard Unitholders’ interests and rights, a separate resolution is proposed for each

substantially separate issue at general meetings. To ensure transparency in the voting process and

better reflect Unitholders’ interest, the Manager conducts electronic poll voting for

Unitholders/proxies present at the meeting for all the resolutions proposed at the general meetings.

Votes cast, for or against and the respective percentages, on each resolution will be tallied and

displayed ‘live-on-screen’ to Unitholders immediately at the general meetings. The total number of

votes cast for or against the resolutions and the respective percentages are also announced after the

general meetings via SGXNet. Minutes of the general meetings are taken and are available to

Unitholders for their inspection upon request.

Unitholders also have the opportunity to communicate their views and discuss with the Board and

Management matters affecting CCT after the general meetings.

(E) ADDITIONAL INFORMATION

Executive Committee

Apart from the AC and CDC, the Board has also established an EC.

The EC oversees the day-to-day activities of the Manager and that of CCT, on behalf of the Board.

The EC is guided by its terms of reference, in particular, the EC:

(a) reviews, endorses and recommends to the Board strategic directions and management policies

of the Manager in respect of CCT;

(b) oversees operational, investment and divestment matters within approved financial limits; and

(c) reviews management reports and operating budgets.

The members of the EC also meet informally during the course of the year.

Dealings with Interested Persons

Review Procedures for Interested Person Transactions

The Manager has established internal control procedures to ensure that all Interested Person

Transactions are undertaken on an arm’s length basis and on normal commercial terms, which are

generally no more favourable than those extended to unrelated third parties, and are not prejudicial

to the interests of CCT and Unitholders. In respect of such transactions, the Manager would have to

demonstrate to the AC that such transactions are undertaken on normal commercial terms and are

not prejudicial to the interests of CCT and Unitholders which may include obtaining (where



practicable) third party quotations or obtaining valuations from independent valuers (in accordance

with applicable provisions of the Listing Manual and the Property Funds Appendix). The internal

control procedures also ensure compliance with Chapter 9 of the Listing Manual and the Property

Funds Appendix.

In particular, the following procedures are in place:

Interested Person Transactions1

Approving Authority,

Procedures and Disclosure

Below S$100,000 per transaction • Trustee

S$100,000 and above per transaction (which singly, or when

aggregated with other transactions2 with the same Interested

Person in the same financial year is less than 3.0% of CCT’s

latest audited net tangible assets/net asset value)

• Trustee

• Audit Committee

Transaction2 which:

(a) is equal to or exceeds 3.0% of CCT’s latest audited net

tangible assets/net asset value; or

(b) when aggregated with other transactions2 with the same

Interested Person in the same financial year is equal to or

exceeds 3.0% of CCT’s latest audited net tangible

assets/net asset value

• Trustee

• Audit Committee

• Immediate announcement

Transaction2 which:

(a) is equal to or exceeds 5.0% of CCT’s latest audited net

tangible assets/net asset value; or

(b) when aggregated with other transactions2 with the same

Interested Person in the same financial year is equal to or

exceeds 5.0% of CCT’s latest audited net tangible

assets/net asset value

• Trustee

• Audit Committee

• Unitholders

• Immediate announcement

1 Excluding interested person transactions falling under the exceptions set out in Rules 915 and 916 of the Listing Manual.

2 Any transaction of less than S$100,000 in value is disregarded.

Role of the Audit Committee for Interested Person Transactions

The Manager’s internal control procedures are intended to ensure that Interested Person

Transactions are conducted at arm’s length and on normal commercial terms, and are not prejudicial

to CCT and Unitholders’ interests.

The Manager maintains a register to record all Interested Person Transactions which are entered into

by CCT (and the basis on which they are entered into, including the quotations obtained to support

such basis). All Interested Person Transactions are subject to regular periodic reviews by the AC,

which in turn obtains advice from CL IA, to ascertain that the guidelines and procedures established

to monitor Interested Person Transactions, including the relevant provisions of the Listing Manual and

the Property Funds Appendix, as well as any other guidelines which may from time to time be

prescribed by the SGX-ST, the MAS or other relevant authorities, have been complied with. The

review includes an examination of the nature of the transaction and its supporting documents or such

other information deemed necessary by the AC. If a member of the AC has an interest in a


transaction, he is to abstain from participating in the review and approval process in relation to that

transaction. In addition, the Trustee also reviews such audit reports to ascertain that the Listing

Manual and the Property Funds Appendix have been complied with.

Details of all Interested Person Transactions (equal to or exceeding S$100,000 each in value) entered

into by CCT during FY 2014 are disclosed on page 178 of the Annual Report.

Dealing with Conflicts of Interest

The following principles and procedures have been established to deal with potential conflicts of

interest which the Manager (including its Directors, executive officers and employees) may

encounter in managing CCT:

(a) the Manager is a dedicated manager to CCT and will not manage any other REIT or be involved

in any other real property business;

(b) all resolutions at meetings of the Board in relation to matters concerning CCT must be decided

by a majority vote of the Directors, including at least one non-executive independent Director;

(c) in respect of matters in which CL and/or its subsidiaries have an interest, whether direct or

indirect, any nominees appointed by CL and/or its subsidiaries to the Board will abstain from

voting. In such matters, the quorum must comprise a majority of the non-executive independent

Directors and shall exclude such nominee Directors of CL and/or its subsidiaries;

(d) in respect of matters in which a Director or his associates have an interest, whether direct or

indirect, such interested Director will abstain from voting. In such matters, the quorum must

comprise a majority of the Directors and shall exclude such interested Director(s);

(e) if the Manager is required to decide whether or not to take any action against any person in

relation to any breach of any agreement entered into by the Trustee for and on behalf of CCT with

an affiliate of the Manager, the Manager is obliged to consult with a reputable law firm

(acceptable to the Trustee) which shall provide legal advice on the matter. If the said law firm

is of the opinion that the Trustee, on behalf of CCT, has a prima facie case against the party

allegedly in breach under such agreement, the Manager is obliged to pursue the appropriate

remedies under such agreement; and

(f) at least one-third of the Board shall comprise non-executive independent Directors.

Additionally, the Trustee has been granted a right of first refusal by CapitaLand Singapore Limited

(CLS) to purchase over properties with certain specified characteristics which may in the future be

identified and targeted for acquisition by CLS or any of its subsidiaries.

In respect of voting rights where the Manager would face a conflict between its own interests and that

of Unitholders, the Manager shall cause such voting rights to be exercised according to the

discretion of the Trustee.

Dealings in Securities

The Manager has devised and adopted a securities dealing policy for the Manager’s officers and

employees which applies the best practices recommendations in the Listing Manual. To this end, the

Manager has issued guidelines to its Directors and employees as well as certain relevant executives

of the CL group, which sets out prohibitions against dealings in CCT Group’s securities (i) while in

possession of material unpublished price sensitive information, (ii) during two weeks before the

release of CCT’s results for the first three quarters and (iii) during one month before the release of

CCT’s full-year results. The Manager will also not deal in CCT Group’s securities during the same

period.



Under these guidelines, all Directors and employees of the Manager as well as certain relevant

executives of the CL group are directed to refrain from dealing in CCT Group’s securities on

short-term considerations. They are also regularly reminded of laws against insider trading.

(F) CODE OF BUSINESS CONDUCT

The Manager adheres to an ethics and code of business conduct policy which deals with issues such

as confidentiality, conduct and work discipline, corporate gifts and concessionary offers. Clear

policies and guidelines on how to handle workplace harassment and grievances are also in place.

The policies and guidelines are published on CL’s intranet which is accessible by all employees of

the Manager.

The policies that the Manager has implemented aim to help to detect and prevent occupational fraud

in mainly three ways.

First, the Manager offers fair compensation packages, based on practices of pay-for-performance

and promotion based on merit to its employees. The Manager also provides various healthcare

subsidies and financial assistance schemes to alleviate the common financial pressures its

employees face.

Second, clearly documented policies and work procedures incorporate internal controls which

ensure that adequate checks and balances are in place. Periodic audits are also conducted to

evaluate the efficacy of these internal controls.

Finally, the Manager seeks to build and maintain the right organisational culture through its core

values, educating its employees on good business conduct and ethical values.

Bribery and Corruption Prevention Policy

The Manager adopts a strong stance against bribery and corruption. In addition to clear guidelines

and procedures for the giving and receipt of corporate gifts and concessionary offers, all employees

of the Manager are required to make a declaration on an annual basis where they pledge to uphold

the Manager’s core values and not to engage in any corrupt or unethical practices. This serves as a

reminder to all employees to maintain the highest standards of integrity in their work and business

dealings.

The Manager’s zero tolerance policy towards bribery and corruption extends to its business dealings

with third-parties. Pursuant to such policy, the Manager requires that certain agreements incorporate

anti-bribery and anti-corruption provisions.

Whistle-Blowing Policy

A whistle-blowing policy and other procedures are put in place to provide employees of the Manager

and parties who have dealings with the Manager with well defined, accessible and trusted channels

to report suspected fraud, corruption, dishonest practices or other improprieties in the workplace,

and for the independent investigation of any reported incidents and appropriate follow up action. The

objective of the whistle-blowing policy is to encourage the reporting of such matters – that employees

or external parties making any reports in good faith will be able to do so with the confidence that they

will be treated fairly, and to the extent possible, be protected from reprisal.

Anti-Money Laundering and Countering the Financing of Terrorism Measures

As a holder of a Capital Markets Services licence issued by the MAS, the Manager abides by the

MAS’ guidelines on the prevention of money laundering and countering the financing of terrorism.

Under these guidelines, the main obligations of the Manager are:


(a) customer due diligence;

(b) suspicious transaction reporting;

(c) record keeping;

(d) employee screening; and

(e) staff training.

The Manager has developed and implemented a policy on the prevention of money laundering and

terrorist financing and is alert at all times to suspicious transactions. Where there is a suspicion of

money laundering or terrorist financing, the Manager performs due diligence checks on its

counterparties in order to ensure that it does not enter into business transactions with terrorist

suspects or other high risk persons or entities. Suspicious transactions are also reported to the

Suspicious Transaction Reporting Office of the Commercial Affairs Department.

Under this policy, the Manager must retain all relevant records or documents relating to business

relations with its customers or transactions entered into for a period of at least five years following the

termination of such business relations or the completion of such transactions.

All prospective employees of the Manager are also screened against various lists of terrorist

suspects issued by the MAS. Periodic training is provided by the Manager to its Directors and

employees to ensure that they are updated and aware of applicable anti-money laundering and

terrorist financing regulations, the prevailing techniques and trends in money laundering and terrorist

financing and the measures adopted by the Manager to combat money laundering and terrorist

financing.

Composition and Attendance Record of Meetings of the Board and Board Committees

Board Members

Composition Attendance Record of Meetings in FY 2014

Audit

Committee

Corporate

Disclosure

Committee

Executive

Committee

Board

Audit

Committee

Executive

Committee

Number of

Meetings

Held: 4

Number of

Meetings

Held: 4

Number of

Meetings

Held: 1

Soo Kok Leng1,

Chairman

– Member – 4 out of 4 N.A. N.A.

Kee Teck Koon2 – – – 3 out of 3 N.A. N.A.

Lim Ming Yan,

Deputy Chairman

– – Chairman 3 out of 4 N.A. 1 out of 1

Lynette Leong Chin

Yee, CEO

– – Member 4 out of 4 N.A. 1 out of 1

Dato’ Mohammed

Hussein

Chairman – – 4 out of 4 4 out of 4 N.A.

Lam Yi Young Member – – 4 out of 4 4 out of 4 N.A.

Goh Kian Hwee Member – – 4 out of 4 4 out of 4 N.A.

Wen Khai Meng – Chairman Member 4 out of 4 N.A. 1 out of 1

Chong Lit Cheong – Member Member 4 out of 4 N.A. 0 out of 1

N.A.: Not Applicable

1 Mr Soo Kok Leng was appointed as Chairman of the Board with effect from 22 September 2014 in place of Mr Kee Teck Koon.

2 Mr Kee Teck Koon resigned as Chairman of the Board and Director with effect from 22 September 2014.



Risk management is an integral part of CCT Group’s business at both the strategic and operational

levels. A proactive approach towards risk management supports the attainment of CCT Group’s

business objective and corporate strategy, thereby creating and preserving value.

The Manager of CCT Group recognises that risk management is about opportunities as much as it is

about threats. To capitalise on opportunities, the Manager has to take risks. Therefore, risk

management is not about pursuing risk minimisation as a goal but rather optimising the risk-reward

relationship, within known and agreed risk appetite levels. The Manager therefore takes risks in a

prudent manner for justifiable business reasons.

The Board of Directors of the Manager is overall responsible for the governance of risk across CCT

Group. The responsibilities include determining CCT Group’s risk appetite, overseeing CCT Group’s

Enterprise Risk Management (ERM) Framework, regularly reviewing CCT Group’s risk profile, material

risks and mitigation strategies, and ensuring the effectiveness of risk management policies and

procedures. For these purposes, it is assisted by the Audit Committee (AC) which provides

dedicated oversight of risk management at the Board level.

The AC currently comprises three independent board members and meets on a quarterly basis. The

meetings are regularly attended by the CEO as well as other key management staff.

The Board has approved CCT Group’s risk appetite which determines the nature and extent of

material risks which CCT Group is willing to take to achieve its strategic objectives. CCT Group’s Risk

Appetite Statement (RAS) is expressed via formal high-level and overarching statements. Having

considered key stakeholders’ interests, CCT Group’s RAS aims to set out explicit, forward-looking

views of CCT Group’s desired risk profile and is aligned to CCT Group’s strategy and business plans.

Enterprise Risk Management Framework

Board Oversight & Senior Management Involvement

Inte

rnal C

on

tro

l S

yste

m

Ind

ep

en

den

t R

evie

w a

nd

Au

ditRisk

Identification

& Assessment

Risk Monitoring

& Reporting

Risk

Response

• Key Risk

Indicators

• Portfolio

Monitoring of

Financial Risks

Risk-Aware Culture

• Accept

• Avoid

• Mitigate

• Transfer

• Risk Appetite

Statement

• Risk & Control

Self Assessment

• Investment Risk

Evaluation

• Scenario Analysis

• Whistle Blowing/

Business Malpractice

Risk Strategy

ERM Framework

CCT Group’s ERM Framework sets out the required environmental and organisational components

which enable CCT Group to manage risks in an integrated, systematic and consistent manner. The

ERM Framework and related risk management policies are reviewed annually and are periodically

validated by external ERM consultants.

Enterprise Risk Management


A robust internal control system and an effective, independent review and audit process are the twin

pillars that underpin CCT Group’s ERM Framework. While the line management is responsible for the

design and implementation of effective internal controls using a risk-based approach, the Internal

Audit function reviews such design and implementation to provide reasonable assurance to the AC

on the adequacy and effectiveness of the internal control system.

Annually, the Manager facilitates and coordinates CCT’s Group-wide Risk and Control Self-

Assessment (RCSA) exercise that requires respective risk and control owners to proactively identify,

assess and document material risks as well as the corresponding key controls and mitigating

measures needed to address them. Material risks and their associated controls are consolidated and

reviewed by the Manager before they are presented to the AC and the Board.

Awareness of and preparedness for potential risks affecting CCT Group’s business continuity helps

the Manager minimise the impact of disruption to its business operations. The Manager has in place

a business continuity plan. In addition, the outsourced Information Technology team has in place a

disaster recovery strategy, which is reviewed and tested on an annual basis.

The Manager believes that having the right risk culture and people with the right attitude, values and

knowledge are fundamental to CCT Group’s success. Therefore, the Manager works closely with

CapitaLand’s Risk Assessment Group to proactively enhance risk management knowledge within

CCT Group to promote a culture of risk awareness.

Managing Material Risks

The Manager undertakes an iterative and comprehensive approach in identifying, managing,

monitoring and reporting of material risks across CCT Group. Such material risks include:

Competition Risk

CCT Group faces keen competition from other real estate companies, REITs or investors and

managers of commercial real estate. It adopts a relentless approach towards strengthening its

competitiveness through high-quality products and services, effective cost management, pricing,

asset enhancement initiatives and branding. CCT Group also retains tenants through tenant-centric

and branding initiatives. The Manager actively monitors relevant leasing transactions in the market

to assess the rental competitiveness of CCT Group’s properties. The formation of joint ventures with

suitable partner(s), including with its sponsor, CapitaLand Limited, is also an effective way to tap into

a wider pool of expertise and resources.

Economic Risk

CCT Group operates in Singapore, and is exposed to Singapore’s economic, financial and property

market developments. Market illiquidity during a financial crisis makes asset investment and/or

divestment challenging and this can affect CCT Group’s investment, financial or strategic objectives.

The Manager takes a disciplined approach towards financial management, by monitoring the

macro-economic environment trends and their implications on the Singapore commercial property

market.

Financial Risks

CCT Group is exposed to financial risks including liquidity risk, foreign currency risk, and interest rate

risk. The Manager continues to focus on instilling financial discipline, deploying capital to earn the

best risk-adjusted returns and maintaining a strong balance sheet to invest in suitable opportunities.

For more information on CCT Group’s Financial Risk Management, please refer to Financial Risk

Management section on pages 160 to 171 of this Annual Report.

Enterprise Risk Management


Fraud and Corruption Risk

The Manager is committed to the highest standards of integrity (one of its core values), and has no

tolerance for any fraud, corruption or bribery in the conduct of its business activities. Consistent with

this commitment, the Manager has in place an employee code of conduct and an anti-corruption

policy. The anti-corruption policy is designed to reiterate the tone from the top and sets out

CapitaLand Global Principles on Ethical Business Conduct. Every year, employees sign the

CapitaLand Pledge to renew their commitment to uphold the Group’s core values. It also has a

whistle-blowing policy to encourage the reporting of suspected reportable conduct by establishing

a clearly defined process through which such reports may be made in confidence and without fear

of reprisal.

Human Capital Risk

Competition for talent within the real estate industry remains intense. The Manager has a competitive

compensation framework designed to attract, retain and motivate talent, as well as to foster a

performance-oriented culture. CCT Group seeks to build a continual leadership pipeline and strong

management bench-strength is ensured through the annual talent review, where succession plans for

key management positions are reviewed and high-potential employees are identified for leadership

development.

Investment and Divestment Risk

To achieve the growth objectives of CCT Group, the Manager acquires properties, undertakes asset

enhancement initiatives and invests in greenfield developments. The risks involved in such activities

are weighed against a rigorous set of investment criteria, which includes rental sustainability and

potential for value creation and DPU accretion.

All major investment and divestment decisions are reviewed and approved by the Board of Directors.

The Manager conducts due diligence reviews in relation to any investment or divestment proposal.

Where necessary, it enlists the Property Manager and third-party consultants with the requisite

expertise to assist in the due diligence review. Each major investment or divestment proposal must

also include a detailed risk assessment, as well as sensitivity analysis and mitigative measures or

control strategies where appropriate.

Property Management Risk

To manage property management risks that arise from the day-to-day activities across all functions,

the Manager has established processes and procedures that seek to ensure that buildings are

well-maintained. The Manager is committed to creating and cultivating an environmentally friendly,

safe and healthy workplace in its buildings. CCT Group is guided by CapitaLand’s Environmental

Management System and Occupational Health and Safety Management System which are externally

audited and certified to internationally recognised ISO 14001 and OHSAS 18001 standards.

Regulatory and Compliance Risk

CCT Group is required to comply with relevant legislations and regulations that include the Listing

Manual of the SGX-ST, Financial Reporting Standards, Securities and Futures Act, industry standards

governed by Building and Construction Authority, Code of Corporate Governance, the CIS Code

issued by MAS and tax rulings issued by the Inland Revenue Authority of Singapore. The Manager

has in place a framework that proactively identifies applicable laws and regulatory obligations, and

embeds compliance into the day-to-day operations.


Providing Meaningful Investor Engagement

With the aim of keeping our stakeholders updated on our strategies, business operations and market

environment, CCT places a high priority on timely, unbiased and transparent communications. We

comply with regulatory requirements and abide by CCT’s Investor Relations Policy (available online

at www.cct.com.sg), while actively engaging our stakeholders.

Our semi-annual financial results briefings are held in January and July each year. Our CEO

personally conducts the presentations and question-and-answer sessions which are webcast “live”

through www.cct.com.sg. These are archived online and made available on demand for a period of

12 months.

In addition, our senior management and investor relations team host quarterly post-results meetings

and annual general meetings, as well as networking sessions and one-on-one meetings in order to

maintain regular interactions with our stakeholders and investing community and share our insights

on strategies, performance and market outlook. CCT also participates in global conferences and

roadshows which allow us to engage investors worldwide. This year, we connected with more than

200 investors in Singapore and around the world.

CCT conducts familiarisation tours of our properties for media, analysts and investors to understand

our ground operations and experience our facilities first hand. In 2014, we continued to host visits to

the CapitaGreen showsuite for about 50 investors and analysts aimed at enhancing their

understanding of the development.

We also engaged the retail and debt investors at events such as SIAS Investment Week and

CapitaLand Debt Investor Day. At the latter, CEOs from the REITs under CapitaLand were present to

take questions from the investors.

We are pleased that CCT continues to be part of the FTSE4Good index and the MSCI Global Standard

Indices.

Testament to our investor relations efforts, CCT was awarded Gold for both Best Investor Relations

and Best Annual Report in the REITs and Business Trusts category at the Singapore Corporate

Awards 2014.

Calendar of Financial Events 2015/2016

Subject to changes by the Manager without prior notice

April 2015 • Release of First Quarter 2015 Results

• Annual General Meeting

July 2015 • Release of Half Year 2015 Results

• Books closure to determine entitlement to distribution

August 2015 • Payment of distribution to Unitholders (six months ending 30 June 2015)

October 2015 • Release of Third Quarter 2015 Results

January 2016 • Release of Financial Year 2015 Results

• Books closure to determine entitlement to distribution

February 2016 • Payment of distribution to Unitholders (six months ending 31 December 2015)

Investor Relations Contact:

Ho Mei Peng, Head, Investor Relations & Communications

Direct: +65 6713 3668

Email: [email protected]

Counter Name: CapitaCom Trust

Investor Relations


Investor Relations Activities In 2014

24 January FY 2013 post results investor meeting in Singapore

20–21 February FY 2013 post results investor meetings in Hong Kong

3–5 March Citi Global Property CEO Conference 2014 in Florida, USA

2 April JPMorgan Asia Pacific Real Estate Conference in Singapore

15 April CCT’s Annual General Meeting held at STI Auditorium, Capital Tower

21 April 1Q 2014 post results investor meeting in Singapore

20 May Deutsche Bank Access Asia Conference 2014 in Singapore

24 May CEO presentation to retail investors during Securities Investors

Association (Singapore) or SIAS Investment Week

4 June Nomura Investment Forum Asia 2014 in Singapore

18 July 2Q 2014 post results investor meeting in Singapore

6 August Debt investor meetings in Hong Kong

7–8 August 2Q 2014 post results investor meetings in Hong Kong

11 August CapitaLand Debt Investor Day presentation

26 August Macquarie ASEAN Conference 2014 in Singapore

9 September Debt investor meetings in Tokyo, Japan

10–11 September Investor meetings in Tokyo, Japan

24 October 3Q 2014 post results investor meeting in Singapore

3–6 November Non-Deal Roadshow in Europe

12 November Morgan Stanley 13th Annual Asia Pacific Summit in Singapore

CCT’s 2014 Distributions

The Trust distributes on a semi-annual basis.

Distribution per Unit (cents)

Period Taxable1 Tax-exempt Payment Date

1 January 2014 to 30 June 2014 4.14 0.08 26 August 2014

1 July 2014 to 31 December 2014 4.19 0.05 25 February 2015

1 Taxable income distribution – qualifying investors and individuals (other than those who hold their Units through a partnership)

will generally receive pre-tax distributions. These distributions are exempt from tax in the hands of individuals unless such

distributions are derived through a Singapore partnership or from the carrying on of a trade, business or profession. Qualifying

foreign non-individual investors will receive their distributions after deduction of tax at the rate of 10% (until 31 March 2020 unless

otherwise stated). All other investors will receive their distributions after deduction of tax at the rate of 17%.


Dear Stakeholders,

At CCT, our pursuit for excellence is underpinned by our commitment to sustainable businessobjectives and practices. For the second consecutive year, we are pleased to present the highlightsof our continuous efforts in this sustainability report, in accordance with the principles set out by theGlobal Reporting Initiative G3.1 reporting framework.

Benchmarking our business and operations to international best practices in the industry, weintegrate sustainable practices into our areas of focus relating to corporate governance, riskmanagement, environment stewardship, workplace health and safety, people and the community,and products and services. As wholly-owned subsidiaries of CapitaLand, both we (the Manager) andthe property managers of CCT are also aligned with CapitaLand’s core values and commitment tosustainability.

In upholding corporate governance, we continue to maintain a high ratio of independent directors onthe Manager’s Board of Directors. Since 2013, about half of our Board members, including theChairman, have been independent.

In line with our green philosophy, all our eligible properties have achieved Green Mark certificationfrom the Building and Construction Authority (BCA), with numerous attaining the top accolades ofGreen Mark Platinum and Gold. The newest property in our portfolio that achieved temporaryoccupation permit on 18 December 2014, CapitaGreen, is our first development project. Designedfor a sustainable future, this Grade A, BCA Green Mark Platinum building incorporates energy-savingtechnologies and modern features that raise engineering efficiency. CapitaGreen was also conferredthe BCA Universal Design Mark GoldPLUS (Design) to recognise the building’s barrier-free anduser-friendly features that have been designed for people of all ages and abilities. Additionally, wecontinually introduce energy-efficient improvements when we embark on asset enhancementinitiatives at our existing properties.

Adopting a customer-centric approach, we are committed to service excellence. During the year, wegathered feedback for improvements via individual interviews with our tenants to develop a holisticcustomer experience. Staying ahead of potential emergencies such as severe haze or Ebolaoutbreak, we also implemented precautionary measures including test drills to safeguard our tenantsand enhance our preparedness.

We actively engage our tenants throughout the year via events such as our bi-annual “HealthyTreats”, annual “CCT Eco Race” and the Christmas charity drive, “Gifts of Joy”. This year, CCT EcoRace, which promotes eco-friendly practices among our tenants, was organised in partnership withBCA, and renowned premium car maker, BMW Asia, for its newly launched electric vehicles. We alsocollaborated with LASALLE College of the Arts to collect recycled bottles from our tenants for festivedecorations at one of CCT’s properties, Wilkie Edge.

Furthering our green message, we rolled out a mobile exhibition that was publicly displayed onrotation at all our properties. The exhibition showcased CCT’s green efforts and promoted bettergreen awareness and conduct among our tenants. We continue to actively support local and globalcauses with a green theme, from similar programmes organised by CapitaLand to the World WideFund for Nature’s (WWF) Earth Hour.

Overall, our efforts in driving sustainability have contributed to CCT’s growth. Since CCT’s listing inMay 2004, it has grown its total deposited properties and market capitalisation from S$2.0 billion andS$1.1 billion respectively, to S$7.6 billion and S$5.2 billion respectively as at 31 December 2014. Inparticular, we achieved a distributable income of S$249.2 million and a DPU of 8.46 cents in financialyear 2014, bettering the previous year’s performance by 6.4% and 3.9% respectively.

Indeed, our green efforts are instrumental in shaping our sustainable practices and set a strongfoundation for a green mindset. As we forge ahead into the second decade of growth, we are lookingforward to further strengthening our sustainability efforts and engagement with our stakeholders toinfluence greater participation in green actions.


Chief Executive Officer

Sustainability Report


INTRODUCTION

Corporate Profile

Listed on SGX-ST, CapitaCommercial Trust is Singapore’s premier commercial REIT and it is the

largest by market capitalisation as at 31 December 2014. We aim to own and invest in quality

income-producing properties and real estate-related assets in the commercial space.

About This Report

This report contains a full year’s data from 1 January to 31 December 2014 and covers CCT’s

properties and joint venture projects in Singapore, unless otherwise indicated. It is developed in line

with the Global Reporting Initiatives (GRI) G3.1 Guidelines. The GRI Index defines the reporting

elements and indicators that provide a comprehensive and balanced review of the Trust’s

sustainability disclosures. The framework driven report, first developed as part of our 2013 Annual

Report, is produced annually as part of the Trust’s annual report which can be downloaded from

www.cct.com.sg.

In an effort to enhance our policies, systems and results, we encourage our stakeholders to send

comments and suggestions concerning our sustainability disclosures to [email protected].

Sustainability Commitment

CCT is managed by the Manager and Property Managers. As wholly-owned subsidiaries of

CapitaLand, the Manager and Property Managers adopted the ethics and code of business conduct

upheld by CapitaLand that stem from its credo of “Building People. Building Communities.” The

sustainability policies guide decision making with regard to business strategies and the daily

operations of its commercial properties, and are aimed at raising the economic, environmental and

social well-being of its stakeholders.

Top Management Support and Staff Involvement

The CapitaLand Group spearheads initiatives in the areas of environment, social and governance,

helmed by CapitaLand’s Sustainability Management framework that comprises its Executive

Management Committee (EMC) which is led by the President & Group CEO with CEOs from the

various Strategic Business Units (SBUs). The latter are appointed as SBU Environmental, Health and

Safety (EHS) Champions responsible for the EHS performance within the business units.

The EMC receives support from CapitaLand’s Sustainability Steering Committee which oversees the

Environment Sustainability and Social Sustainability work teams. The work teams are made up of

representatives from the business units and are responsible for driving initiatives with support from

various departments.

CapitaLand’s Core Values

Respect

We believe in mutual trust and respect at all levels. This is fundamental to a high-performance culture

that embraces diversity and teamwork as One CapitaLand.

Integrity

We embrace the highest standards of integrity. We have the courage to do what is right, and earn the

trust of all our stakeholders.

Creativity

We constantly innovate to enhance value and stay ahead.

Excellence

We pursue excellence and persevere in everything we do.


Stakeholder Engagement

Stakeholder Objectives

Stakeholder

Needs/Interest

Selected Examples of

our Response

Employees Employer of choice 1. Regular engagement

2. Learning and

development

3. Fair and competitive

human resource

policies

4. Equitable system of

recognition and

rewards

5. Safe and healthy

working environment

1. Quarterly

communication

session by senior

management

2. Biennial Employee

Engagement Survey

(EES)

3. Focus on

occupational health

and safety

Investors Choice investment Long-term sustainable

distribution and total

returns

1. Proactive portfolio

and assets

management

2. Prudent capital

management

3. Committed to

corporate

governance

4. Disciplined approach

to acquisition

5. Identification and

mitigation of

environmental, health

and safety risks

Customers Landlord of choice 1. Reliable landlord

2. Quality and well-

maintained office

space

3. Safe working

environment

4. Positive customer

experience

1. Efficient design for

office space

2. Green Mark certified

buildings

3. Seven CCT buildings

conferred Fire

Excellence/Safety

awards from the

National Fire and

Civil Emergency

Preparedness

Council

4. Biennial customer

satisfaction survey

5. Tenants’ engagement

activities

6. Regular meet up

sessions with major

tenants

7. Quarterly newsletter,

your CapitaLetter



Stakeholder Objectives

Stakeholder

Needs/Interest

Selected Examples of

our Response

Supply chain –

suppliers,

vendors,

contractors

1. A fair and

reasonable

employer of

goods and

services

2. Acquire

knowledge of

best industry

practices

1. Fair and reasonable

treatment

2. Recognition for

exceeding standards

in CCT properties

and projects

1. Customer feedback

system

2. Set up Standard

Operating

Procedures (SOPs)

for compliance

3. Work hand-in-hand

to handle

challenging

situations

4. Term contractor/

vendor evaluation

system

Business

Partners

Build joint ventures

to benefit from best

practices and expert

knowledge

1. Fair and reasonable

actions and dealings

2. Win-win partnerships

1. Regular meetings

2. Invited to corporate

and milestone events

Community Contribute to the

community we

operate in

Environmentally and

socially responsible

organisation

1. Customers and

employees

participation in

engagement events

2. Promote awareness

of environmental

sustainability through

the annual Eco Race

3. Introduce a charity

focus through the

annual Eco Race

4. Collect “Gifts of Joy”

for underprivileged

children during

Christmas


Focus Areas of Sustainability and the Assessment and Feedback Process

Governance Environment Social

Product

Responsibility

Annual general

meeting for

Unitholders

Conducted Enterprise

Risk Management

annually

Conducted internal

audit

Participation in

Investor Relations

Professionals

Association (IRPAS)

CapitaLand’s Green

Buildings Guidelines:

– Environmental

Impact & Universal

Design Assessments

(EIA & UDA)

– Building Information

Modelling (BIM)

Environmental

Tracking System

Continual pursuit to

upgrade Green Mark

certification for

properties

Trained employees to

be Green Mark facility

managers

ISO 14001 certified

Environmental

Management System

(EMS)

People

Quarterly

communication with

staff

Externally conducted

biennial Employee

Engagement Survey

OHSAS 18001

Certified

Occupational Health

& Safety (OHS)

Management System

Community

Annual CCT Eco

Race to promote

“green” awareness

Facebook for Eco

Race participants

Second edition of

“Gifts of Joy”

collection for

underprivileged

children

Customer satisfaction

survey on buildings

and services

Singapore Service

Class

Financial Performance

The Trust achieved strong financial results in 2014, as detailed in CCT Annual Report 2014. Please

refer to Financial Highlights, pages 1 to 3; Financial Review, pages 86 to 88; and Financial

Statements, pages 114 to 177.

GOVERNANCE

CCT’s management executes its policies and processes governed by the highest standards of

corporate governance and transparency in accordance to the Principles of the Code of Corporate

Governance 2012. This adherence to high standards of corporate conduct remains in the interests

of our Unitholders and is pivotal to the Trust’s continued success. Further details on our corporate

governance performance in 2014 can be found on pages 28 to 46 of the Annual Report.

Enterprise Risk Management (ERM)

As part of good corporate governance and resource management, CCT operates a proactive and

comprehensive ERM framework that enables the identification, communication and management of

risks and exposures through integrated, systematic and consistent methods. Decision-making and

business processes undergo prudent risk assessment as instituted by the Manager, thereby

enhancing risk awareness.



Sustainability risks identified by the Trust include fraud and corruption risks, human capital risks and

property management risks. For further details on ERM, please refer to pages 47 to 49 of the Annual

Report.

ENVIRONMENT

Committed to environmental sustainability, CCT implements energy efficient practices, resource

conservation, waste management and innovative technologies in its buildings, thereby creating value

for stakeholders while enhancing its green footprint.

At CCT, it is the responsibility of each employee to lower the environmental footprint and report

environmental issues such as complaints and non-compliances. Employees are enabled in their

sustainability efforts by the CapitaLand Sustainability Structure, while the ISO 14001 certified EMS

ensures accountability.

Environmental Issues

The Sustainability Steering Committee manages the key environmental issues that affect business

strategy and operations. The Property Managers and Manager of CCT proactively seek to raise

operational efficiency by conserving resources, lowering greenhouse gas emissions and reducing

waste. The Trust adheres to CapitaLand’s Green Buildings Guidelines which safeguards

environmental factors throughout the stages of a property’s life cycle, whether it is undergoing

development or asset enhancement.

In 2014, the environmental protection expenditure for operational properties due to ISO 14001 and

OHSAS 18001 certification was maintained at about S$8,000. This is similar to 2013 as the

certification is an annual exercise. For property under construction, CapitaGreen’s consultancy fee

of S$0.5 million for Green Mark certification has been incurred progressively since 2011 and is

expected to be fully expensed in 2015.

Key

Environmental

Issues Targets Performance for 2014

Operational

Efficiency

• Using 2008 as the base

year to reduce energy and

water usage psm by 15%

by 2015 and 20% by 2020.

• Achieved 17.7% and 18.8%

reduction in energy and water

usage psm respectively.

Resource

Consumption

Management

• All new development

projects to meet Green

Mark Platinum certification.

• Achieved Green Mark Platinum

for CapitaGreen.

• To achieve Green Mark

certification for all CCT

properties.

• Achieved Green Mark GoldPLUS

and above certification for 67%

of CCT properties. Achieved

Green Mark certification for all

CCT properties except for Bugis

Village (No appropriate criteria

under current Green Mark

categories).


Key

Environmental

Issues Targets Performance for 2014

Stakeholder

Engagement

• Organise outreach activities

to promote and engage

stakeholders in

sustainability efforts.

• Organised third Eco Race to

advocate carbon monitoring and

offsetting to participating

tenants.

• Participated in i Light Marina

Bay and WWF’s Earth Hour 2014.

Supply Chain

Management

• Appoint contractors and

service providers who

comply with local

government and other legal

requirements.

• Appoint ISO 14001 and

OHSAS 18001 certified main

contractors or OHS legal

compliance on site.

• Give preference to OHSAS

18001 certified vendors/

suppliers; non-OHSAS

18001 certified vendors/

suppliers encouraged to

achieve certification of

BizSAFE Level 3 and above.

• For CapitaGreen, the main

contractor is both ISO 14001

and OHSAS 18001 certified.

• Non-certified OHSAS 18001

certified vendors/suppliers

engaged by CCT are minimally

BizSAFE Level 3 and above.

Energy Consumption

CCT has set a target to reduce its energy usage per square metre for its portfolio by 15% by 2015

from baseline year 2008, and to achieve a 20% reduction by 2020. The Trust employs an

Environmental Tracking System to monitor the electricity consumption for operational properties,

which was 38,827,998 kilowatt hour (kWh) for 2014. We achieved savings of 17.7% psm across our

portfolio, exceeding the target of 15% by 2015.

For property under construction, CapitaGreen’s direct energy consumption through diesel usage for

2014 was 520,674 litres, while indirect energy consumption through electricity usage measured

878,640 kWh. The development’s increases in electricity consumption from 2013 correspond with

heightened construction activity at the site as the project nears completion. CapitaGreen obtained its

TOP on 18 December 2014.

Energy Efficiency

CCT tracks and reduces energy consumption across its properties through energy efficiency

measures and controls. To conserve energy and raise efficiency, existing chillers and cooling tower

fans were upgraded with variable speed drives or optimised while chilled water and condenser water

pumps were upgraded. Other efforts include the introduction of auto tube cleaning system for chillers

and energy efficient light fittings for car parks.



During the year, CCT supported i Light Marina Bay 2014, Asia’s biennial sustainable light art festival

that encourages buildings in the vicinity to conserve energy during the festival. Twenty Anson, One

George Street and Wilkie Edge participated in the event which ran from 7 to 30 March. The Trust also

supported Earth Hour 2014 on 29 March with 10 properties joining the effort. Although it was under

construction at the time, CapitaGreen also observed Earth Hour by turning off all non-essential lights.

Annual Electricity Saving1

(psm)

TARGET (Using 2008 as the base year)

15% BY 2015

4.7%

8.9%

11.8%

14.8%17.7%

2010 2011 2012 2013 2014

Annual Electricity Consumption y-o-y

(’000 kWh)

40,837 40,178 38,828

51 580879

2012 2013 2014

Operational properties

2012 cumulative GFA: 3.9 million sqm



Property under construction

1 Raffles City Tower’s data is included from 2012 onwards.


CapitaGreen: New Milestones in Construction, Sustainability and Design

CapitaGreen marked its completion with the receipt of its TOP on 18 December 2014. The

development was accelerated by innovative construction solutions that reduced construction

time to 36 months instead of the usual 40 months. These included the use of larger piles in the

foundation and a top-down construction method that allowed the three-storey basement car

park and the 40-storey super structure to be built concurrently. In addition, the building is the

first in Singapore to use Supercrete, an ultra high-strength concrete, which saved both energy

and manpower.

The iconic 40-storey Grade A office development represents a new achievement in CCT’s focus

on sustainable buildings, with a range of modern eco-friendly features – from energy-efficient

glass on the facade to efficient chillers and rainwater harvesting systems.

At the same time, the building incorporates a universal design that ensures ease of access and

way–finding for customers. In addition to an advanced lift system, art installations as visual cues

for better navigation as well as family-friendly and handicapped-friendly features facilitate

mobility and efficiency. CapitaGreen also features an underground pedestrian network that

enhances accessibility to the surrounding areas for tenants and the public regardless of

weather conditions.

For its achievements in sustainability and design, CapitaGreen was awarded BCA’s Green Mark

Platinum certification in 2012 and Universal Design Mark GoldPLUS (Design) in 2013.

Water Consumption

The majority of water consumed at CCT properties is distributed by PUB, Singapore’s national water

agency. CCT also uses recycled water in cooling towers and sprinklers systems in our operational

properties to lower water consumption. Total water consumption for operational properties and

property under construction in 2014 was 440,634 m3. Recycled water consumed by some of the

operational properties accounted for 148,755 m3 or about 40% of total water used in 2014.

We attained water consumption savings of 18.8% psm from our operational properties, with 2008 as

the base year. The main reason for the lower water consumption savings achieved in 2014 compared

to 2013 was the record-breaking dry spell that lasted from mid-January to mid-March 2014. More

water had to be purchased from PUB to maintain the daily activities in CCT’s properties during the

period. Nonetheless, the savings of 18.8% psm for operational properties has exceeded the target

of 15% by 2015.

Water Efficiency

Apart from the use of recycled water in the cooling towers and sprinkler systems in our properties,

we also installed rain water storage tanks at Six Battery Road, Wilkie Edge, Golden Shoe Car Park

and CapitaGreen, where rain water collected is used in irrigation, condenser tubes cleansing and

hi-jetting of car park decks and ramps, among others. In the recent AEI at Capital Tower, a water

sub-meter was installed at the cooling tower and linked to the building management system for leak

detection. These initiatives help ensure water efficiency as they control and monitor water

consumption.



Annual Water Saving1

(psm)

TARGET (Using 2008 as the base year)

15% BY 2015

7.8%

15.3%

24.7%

21.7%

18.8%

2010 2011 2012 2013 2014

Higher Total Water Consumption y-o-y

(’000 m3)

339 358 372

38

53

69

2012 2013 2014



2013 cumulative GFA: 4.0 million sqm 2014 cumulative GFA: 4.0 million sqm


1 Raffles City Tower’s data is included from 2012 onwards.


Stable Recycled Water Consumption y-o-y

(’000 m3)

130

150 149

2

3 2

2012 2013 2014


− Capital Tower, Six Battery Road,

One George Street and Raffles City Tower


Greenhouse Gas Emission

During the year, we reduced total greenhouse gas emissions by 3% psm, from 20,0891 tonnes in 2013

to approximately 19,414 tonnes in 2014. This was achieved by improving energy efficiency at the

operational properties, optimising the use of equipment as well as upgrading and replacing existing

equipment. In addition, we have introduced electric vehicle charging stations for electric vehicles in

Capital Tower, Six Battery Road, One George Street and CapitaGreen to encourage car owners to go

green and reduce resource depletion and air pollution. In addition, indirect emissions from air

transport of employees for business activities saw a decline to about 31,793 kg, translating to 40%

reduction from 2013.

Waste Management

Of the nine operational properties in the CCT portfolio, waste data is only collected for seven

properties as not all waste collectors are able to furnish the recycled waste collected as requested.

CCT engages licensed contractors such as SembWaste to conduct waste collection and disposal for

the seven properties. Non-recyclable waste amounted to about 2,555 tonnes in 2014 compared to

2,361 tonnes in 2013. Recyclable waste was higher at 61.0 tonnes in 2014 compared to 2013’s 45

tonnes and comprised paper (55.6 tonnes), metal (0.5 tonnes) and others (4.9 tonnes). The increases

are due to the addition of Six Battery Road and Wilkie Edge whose waste consumptions were not

tracked in 2013. Non-recyclable waste comprising food and construction materials generated by

CapitaGreen was 9,881 tonnes and the total amount of paper recycled was about 1.2 tonnes. The

increases were in line with the rise in manpower and construction activity on site. Stakeholders are

encouraged to reduce, reuse and recycle waste. Recycling bins are installed across the Trust’s

operational properties for such efforts.

Resource Consumption Management

Green-rated buildings are more resource efficient to construct, operate and maintain, thus making

their targets ideal benchmarks to gauge effective resource consumption management. Given that all

CCT properties reside within Singapore, the Trust adopts the Green Mark Certification administered

by the BCA as a standard.

1 Figure has been restated



CapitaLand is committed to ensuring its existing portfolio attain at least a Green Mark certification by

2020, in accordance with Singapore’s Green Building Master Plan. CCT is aligned with this

commitment. All our eligible properties have been awarded the minimum of a Green Mark

certification, and we aim to improve on this to achieve Green Mark GoldPLUS across our portfolio. To

date, nine of CCT’s properties have received a total of 10 awards, with 67% of our properties attaining

GoldPLUS and above.

Sustainability Standards

Green Mark Award

CapitaGreen (obtained TOP on 18 December 2014) Platinum

Six Battery Road Platinum

Twenty Anson Platinum

Capital Tower Platinum

Six Battery Road Tenant Service Centre GoldPLUS (Office Interior)

One George Street GoldPLUS

Raffles City Singapore Gold

Wilkie Edge Gold

Golden Shoe Car Park GoldPLUS

HSBC Building Certified

Other Awards

CapitaGreen (obtained TOP on 18 December 2014) UD Mark GoldPLUS (Design)

Stakeholder Engagement

CCT leverages diverse communication channels and programmes to engage its stakeholders and

drive key environmental messages.

In furthering the environmental cause, CCT formed a “Green” team to share CapitaLand’s green

efforts, discuss methods to create environmentally friendly-offices and recommend tips to encourage

eco-friendly behaviour. Aimed at raising awareness among tenants on sustainability and responsible

green conduct, a four-panel mobile exhibition showcasing CCT’s green buildings and examples of

green actions was put on display at the lobbies of the Trust’s properties.


A Multi-faceted Engagement Approach on Environmental Issues

CCT adopts an all-encompassing approach to connect with its tenants through a wide range of

activities. One major event is the annual CCT Eco Race – CCT’s flagship initiative that is

designed to heighten awareness on environmental issues and sustainable practices.

Recognising that tenants contribute to almost half of a building’s total energy consumption, the

Trust aims to encourage them to lower consumption so as to improve each building’s total

energy performance. In the race’s Facebook, suggestions of simple green actions that one can

easily do in the office were offered to tenants.

Our third annual Eco Race took place in 2014 with BCA supporting us as an event partner for

the second year. The CCT Eco Race attracted 300 participants comprising tenants, BCA staff

and CapitaLand employees. The event was highlighted in the Global Real Estate Sustainability

Report 2014 as an innovative example of tenant engagement in Asia. This report is issued by

GRESB, an industry-driven organisation committed to assessing the sustainability performance

of real-estate portfolios and are relied upon by institutional investors to improve the

sustainability performance of their investments.

CCT also takes a serious view of EHS threats and maintains high vigilance at all times. The

Property Manager instituted precautionary measures and Standard Operating Procedures

(SOPs) to safeguard staff and tenants against severe haze conditions. These included the

distribution of N95 masks to all CCT tenants in June 2014; the closure of sky gardens, outdoor

terraces and automatic doors when PSI levels exceed 150; the installation of additional filters in

the air handling units and other ventilation systems; and the placement of haze kits at each

building’s concierge, tenant service centre and fire command centre. Tenants were informed of

the precautionary measures via a circular.

Addressing the threat of the Ebola epidemic, CCT purchased recommended personal

protection equipment and adjusted existing SOPs to better manage the threat. The latter

includes screenings for visitors at the main entrances of all its buildings should the need arise.

Aimed at better preparing staff, test drills were carried out with the service providers at a few

CCT properties.

PEOPLE

The cornerstone of CCT’s success is its people. Although the Trust does not have employees, the

staff of the Manager and Property Managers form our headcount.

Human Capital

CCT has aligned its processes according to the principles of fair employment and equal

remuneration outlined by CapitaLand. CapitaLand has undertaken the Employers Pledge with the

Tripartite Alliance for Fair Employment Practices on behalf of the Group and adheres to five key

principles of fair employment:

• Recruit and select employees on the basis of merit, such as skills, experience and ability,

regardless of age, race, gender, religion or family status.

• Treat employees fairly and with respect and implement progressive human resource

management systems.

• Provide employees with equal opportunities for training and development based on their

strengths and needs to help them achieve their full potential.



• Reward employees fairly based on their ability, performance, contribution and experience.

• Abide by labour laws and adopt Tripartite Guidelines which promote fair employment practices.

In 2014, there was no reported incidence of discrimination or human rights violation.

Workplace Diversity

CCT complies with CapitaLand’s policies on non-discriminatory employment practices. All job

opportunities are advertised in the public space via online job portals and newspapers in order to

attract the best talents. Selections are made solely on the basis of skill and abilities without regard

to age, gender, ethnicity or religion.

In 2014, permanent employees formed the majority of our workforce with less than 1% of staff working

on a part-time basis. By tracking manpower movement, we assessed that staff turnover for the year

was 11.7% compared to 10% in 2013. Every employee has to give minimum one month’s notice prior

to resigning. During the year, we retained 100% of male and female employees who went on parental

leave.

Work-life Balance

Our human resource (HR) policies are aimed at achieving a better work-life balance by allowing

employees flexibility in their work arrangements. Employees can opt for flexible hours, job sharing or

part-time work when it suits the job profile.

We also have a flexible benefits scheme which gives employees access to annual health screenings

and free flu vaccinations.

Learning & Development

Learning and development is an integral part of our organisational environment. Our CEO and

corporate Heads of Department meet on a monthly basis to identify and manage learning and

development, career planning and HR concerns.

About 3% of the 2014 payroll is allocated to the learning and development of employees, which

involved certified skills training programmes and personal development courses, as well as industry

seminars and conferences. Over the calendar year, 100%1 of employees joined in a minimum of one

learning event, with an average of 63.2 hours spent on training per employee. This is an improvement

of 32.2% compared to the average learning hours of 47.81 in 2013, reflecting our commitment

towards learning and development of employees. There is also a provision for full-time employees to

receive a maximum of 10 days of paid examination leave in a calendar year to sit for examinations

for sponsored or relevant training courses supported by the company.

In 2014, a group of employees under the Property Manager was selected to undergo a customised

training programme to enhance their communication skills in order to discharge their duties more

effectively.

1 Figures have been restated


Trend of Average Learning Hours Per Employee – from 2010 to 2014

42.4

53.4 53.5

47.8

63.2

2010 2011 2012 20131

2014

Employee Mix by Gender

(%)

44% 44% 47%

56% 56% 53%

20121

20131

2014

Female Male

Employee Diversity by Age

(%)

About 59% of the employees are in the age groups of 30-49 years old

9% 7%

13%

24% 26%

22%

39% 37%37%

28% 30%

28%

2012 20131 2014

< 30 30 - 39 40 - 49 ≥ 50




Employee Length of Service(%)

More than 65% of the employees are working for more than 5 years with the company

9% 7% 12%

17% 16%

22%

47% 49%

39%

27% 28% 27%

2012 20131 2014

< 1 year 1 - <5 years 5 - <10 years ≥ 10 years

1

Rewarding PerformanceTo drive performance, CapitaLand’s total reward approach includes competitive compensation andbenefits, employee development and the creation of a positive work environment.

Our pay-for-performance policy supports a remuneration package that is benchmarked based ontotal compensation. Employees participate in setting their performance goals for both team andindividual levels – an approach that clearly defines expectations of both performance andcompensation. All staff have access to regular performance feedback.

Legal ComplianceCCT complies with the provisions of the Singapore Government Central Provident Fund andsubscribes to the Flexible Benefits scheme. Under the latter, we provide a number of facilitiesincluding personal accident insurance, group medical insurance, health screenings and free fluvaccinations. CCT adheres to legislations concerning the welfare and rights of our employees.

Anti-Corruption PolicyThe Manager and Property Managers exercise utmost integrity across the operations and in theirbusiness conduct through a policy of strict financial discipline and zero tolerance for corruption,while ensuring their functions and responsibilities are executed to the highest standards.

The Manager identifies and reviews common risks for the Trust and proposes improvements tobusiness operations to circumvent bribery and corruption. The Manager’s Audit Committee receivequarterly reports on compliance which includes report on suspicious activities and incidents of fraud.If there are any reports of suspicious activities, investigation is carried out and offenders dealt withstringently. Any gaps in business processes are then fixed accordingly.



Our stringent anti-corruption policy is disseminated to staff and partners throughout the supply chainvia a comprehensive system. All service contracts and agreements with our suppliers and partnerscontain mandatory anti-corruption clauses. All employees are given an email address to which theycan report any irregularities or business malpractice. Our policies and procedures on BusinessMalpractice Incidents (BMIs) Reporting allow line and functional managers to report suspiciousbehaviour directly to the CEO.

It is mandatory for every new hire to attend the CapitaLand Immersion Program (CIP) – a group-wideprogramme organised by CapitaLand aimed at inculcating the core values and principles that directthe Group’s operations. Anti-corruption policies and procedures is a compulsory module in theprogramme. In 2014, 100% of all new employees of the Manager and Property Managers attendedthe CIP. There were no cases of corruption reported during the year.

All employees have to attend the course, CapitaDNA: Strengthening Core Values, which is designedto give them insights into the application of the core values in their respective work areas.

Staff EngagementCCT values open communication. It exercises an open door policy that emphasises fair reviews andefficient responses to employment concerns including workplace harassment, grievance handlingand whistleblowing.

Employees are able to highlight issues and share suggestions directly with HR or management viaa range of communication channels. The quarterly communication session is one such forum throughwhich SBU and CCT’s CEO and management team update employees on business results andoperational issues while addressing their work concerns.

Employees are updated on the Group’s recent developments through the quarterly e-newsletter,“i-Connect”, while the CapitaLand intranet portal offers information on employment, benefits, ethicsand corporate governance. We ensure that employees receive adequate guidance, coaching andcounselling on career development and leadership. This is covered by the CapitaLand Counsellingand Advisory Panel (CAP) which consists of experienced leaders within the Group.

CapitaLand engages an independent consultancy firm to carry out a biennial Employee EngagementSurvey (EES) with the aim of assessing the commitment level and perception of the company amongstaff. The last survey was conducted in 2012 and the next survey will be in 2015. Some of theimprovements arising from the findings of the previous surveys included regular feedback sessionswith management through various platforms, improving working conditions with flexible workarrangements as well as career development opportunities through periodic reviews of job load andjob fit. Staff is selected to participate in focus groups to stretch their potential and develop othercompetency levels.

Business ContinuityWith the potential threats of natural disasters, epidemics, terrorism and information systems failure,CCT has instituted a Business Continuity Plan (BCP) to mitigate risks of interruption and ensure rapidrecovery in the event of a crisis. Benchmarked to global and industry best practices, the BCPfacilitates the continued function of core business operations, limits financial and reputationaldamage and shields our tenants from the negative effects of a disruption. The BCP adheres torelevant laws and regulations.



Occupational Health & Safety (OHS)

CapitaLand’s OHS Management System forms the foundation for CCT’s approach to workplace

safety, and is certified against the international OHSAS 18001 OHS Management System, with the

following commitments:

• Reduce occupational injury rates with the aim to achieve zero harm

• Meet or exceed OHS legal requirements

• Provide a robust OHS Management System

• Promote a culture of individual ownership and responsibility for OHS management

• Seek proactive support and participation from CapitaLand’s stakeholders including top

management, employees, contractors, suppliers and tenants

• Drive continuous improvement in OHS performance

To ensure quick response to an epidemic outbreak, CCT has in place a series of procedures as well

as an emergency response team on-call 24 by 7. The HR department regularly updates employees

with medical advice and travel alerts.

2014 saw an absentee rate of seven days compared to 6.2 days in 2013. There were three reported

incidents of work-related injuries in 2014 compared to none in 2013. The staff affected have since

resumed work and new SOPs and safety measures have been put in place to prevent recurrences.

COMMUNITY

CapitaLand believes that every business requires the community’s support for its continued success.

In contributing to community development. CapitaLand Hope Foundation (CHF) is established as a

philanthropic arm of CapitaLand, to take care of the needs of underprivileged children. CCT partners

CHF in corporate philanthropy and support our staff in participating in community development

initiatives as volunteers and collect funds through various activities. We embrace sustainable

business practices in our properties and continue to raise our stakeholders’ awareness of

sustainability through activities and communication channels.

Corporate Philanthropy

Donations

On 27 September 2014, CCT organised the CCT Eco Race to promote awareness of environmental

sustainability and raise funds for the underprivileged children of TOUCH Community Services. Some

300 participants from 30 organisations took part in the event which saw them race to complete eight

game stations around the Central Business District. The registration fee of S$10 per participant was

matched dollar for dollar by CHF and donated to the TOUCH Community Services to support the

education of its beneficiaries. The total amount donated from this initiative was S$5,930.00.

Employee Volunteerism

More than monetary donations, CHF encourages CapitaLand employees to participate in initiatives

that benefit the community. All staff are encouraged to volunteer for community service projects

through special schemes such as Volunteer Service Leave for up to three days, Volunteer No Pay

Leave and Volunteer Part-Time Work Arrangement. The latter two schemes allow employees longer

periods away from the office to join in CapitaLand’s 2014 community development projects.

In 2014, 25% of CCT employees spent 421 working hours volunteering in community development

projects – a improvement of 4% over the previous year and a testament to the strong spirit of altruism

within the Trust. Each volunteer who uses all three days of Volunteer Service Leave can select a

registered Singapore-based children’s charity to which CHF will donate S$500.00.


CCT also partnered its tenants from five office buildings through the “Gifts of Joy” programme. The

charity drive saw the collection of 980 gifts which went to 480 children and youth beneficiaries of

Beyond Social Services. CapitaLand staff and CCT tenants formed a team of 120 volunteers who

spent two and a half days wrapping the items and distributing them to the homes of the beneficiaries.

This was the first year that tenants were invited to volunteer with us.

Tenant Engagement

We value our tenants as important business partners who contribute to our progress. With their

continued support, CCT is able to achieve its goals across the triple bottomline of people, planet and

profit.

Tenant Appreciation

In expressing our gratitude to our tenants for their support, we engaged the services of Jessie Lim,

a well-known local ceramic artist, to handcraft a unique range of fine porcelain bowls that each tenant

receives as a lease anniversary gift.

Treats are another avenue through which the Trust engages its tenants. The half-yearly engagement

saw tenants receive healthy treats such as bottles of Yakult in May and Nature Valley granola bars in

November. In celebration of CCT’s 10th anniversary, tenants across nine properties also received a

cable charger for mobile devices in May.

Going Green

CCT consistently involves tenants in its sustainability and environmental conservation efforts. The

third Eco Race organised in September 2014 drew participation from 30 tenant organisations. Then

during the Christmas season, the Trust rallied its tenants across six CCT properties to collect some

200 used plastic bottles. These were transformed into an aerial artwork named Anemone by students

from LASALLE College of the Arts and displayed at Wilkie Edge as the centerpiece of its festive

decorations.

The Trust is also a supporter of electric vehicles. In partnership with BMW Group Asia, it installed

electric vehicle public charging stations at five CCT properties, namely, Capital Tower, Six Battery

Road, One George Street, Raffles City Singapore and CapitaGreen. This move benefits CCT tenants

as well as the working community and visitors to the area.

PRODUCT RESPONSIBILITY

In the business of providing service and business space, CCT places keen emphasis on operational

excellence and product responsibility. To this end, we embark on AEIs to ensure premium work

environments. At the same time, we streamline processes and augment customer experience through

IT platforms. Our efforts provide easy access to our products and services, thereby driving

productivity and allowing our tenants to focus on their core businesses.

CCT adheres to CapitaLand’s OHS Management System to secure the health and safety impacts of

a building at the different stages of its life cycle.

Useful Enhancements

Works Promoting Efficiency and Security

AEIs are part of a business strategy through which CCT secures competitive edge and incorporates

innovative features such as security turnstiles, self-registration kiosks and Destination Control

System (DCS) for the lift system into its buildings. Both tenants and their guests benefit from the

enhanced arrival experience and improved building security. In addition, the DCS reduces waiting

and travelling time for lifts by efficiently distributing passengers to selected lifts based on the floors

they want to visit, resulting in fewer interval stops for every lift user. Such innovative features have



been successfully implemented in the recent AEIs at Capital Tower and Twenty Anson. Moving

forward, innovation will be key consideration for CCT in new development projects as well as

enhancing the quality of existing properties. CapitaGreen is a beneficiary of some of these features

which were introduced at the design and development stage. Please refer to pages 60, 93 and 94 of

the Annual Report.

Online Car Park System

Implemented in 2013, the online car park system allows customers to make parking-related

transactions efficiently and conveniently. With the customers’ needs in mind, existing processes were

streamlined and simplified before the system was designed and developed. Currently, the system is

well-utilised by customers and new features to give customers more flexibility are being introduced.

In 2014, Capital Tower also came under the purview of this service. Moving forward, CapitaGreen’s

tenants are set to benefit from the system which, when it is put into service, will allow tenants the

choice of parking at CapitaGreen or Golden Shoe Car Park. It will also introduce Corporate Account

which features more self-help functions to facilitate the convenient planning and execution of tasks

by the tenant company administrator. The features of this system include:

• Additional payment mode by Bank Transfer

• Creation of multiple roles to facilitate communications/coordination within the tenant company

• Ability to apply and cancel multiple season parking space

• Viewing of payment history and retrieval of invoices

• Receipt of tax invoice via email upon successful payment

• Viewing and tracking of “entitled lots”

Customer Satisfaction

CCT relies on innovation to enhance customer experience and provide high quality office space that

caters to modern business needs. The Trust constantly reviews and introduces new initiatives to raise

customer experience, and values customer satisfaction as a key indicator of the quality of its portfolio

and services.

Focusing on Customer Centricity

Further strengthening its commitment towards delighting customers, the Trust saw the creation of a

Customer Experience Management team in 2014 – to focus on the overarching customer experience

framework and shaping of key experiences based on an understanding of customers’ needs and

expectations. Multiple projects to innovate and improve existing offerings and experiences were then

piloted by a Service Excellence taskforce. The members of the taskforce, from diverse functions and

backgrounds, come together to generate ideas and combine expertise to fulfill the customer-centric

objectives.

Building up Service Capabilities

With a better understanding of our customers’ expectations, an EQ Communications training

programme was designed and conducted in 2014 for a selected group of employees under the

Property Manager. With enhanced communication skills, they are more effective and better equipped

to meet and exceed our customers’ expectations.

Gathering Customer Insights

To understand our customers better, insights are gathered through different listening posts, including

surveys, one-on-one interviews, and customer research. These insights are used for shaping of

customer experiences, decision making, validating or innovating products and services, so as to

improve our performance and strengthen our position not only as a landlord of choice but also as the

preferred business partner.


In 2014, we conducted one-on-one interviews with a select group of customers involving key

decision-makers. The interviews included questions on engagement, customer needs and service

level, among others. An annual survey was also conducted with customers at our properties to

monitor the quality of the amenities and facilities across our portfolio.

On a biennial basis, an in-depth customer survey is conducted to determine the various aspects of

our properties that generate customer loyalty and strategic improvement. The exercise also

measures the Trust’s performance in meeting customer expectations in service delivery while

assessing the competitive strengths and weaknesses of each factor so as to allocate resources

effectively. In 2013, we achieved an eQ Index of 75 out of a total score of 100 in accordance with

Nielsen’s Customer eQ model which is above the industry average of 73. The next survey will be

conducted in 2015.



GRI INDEX

Indicator Description Cross Reference/Direct Answer

Strategy and Analysis

1.1 Statement from senior decision-maker CEO’s Message (pg 52)

1.2 Description of key impacts, risks and opportunities Governance (pg 28-46)

Enterprise Risk Management (pg 47-49)

Organisational Profile

2.1 Name of the organisation Corporate Profile (Inside front cover)

2.2 Primary brands, products, and/or services. Corporate Profile (Inside front cover)

2.3 Operational structure of the organisation, including

main divisions, operating companies, subsidiaries

and joint ventures.

Trust Structure (pg 5, 26)

Organisation Structure (pg 5)

2.4 Location of organisation’s headquarters. Corporate Information (Inside back

cover)

2.5 Number of countries where the organisation operates,

and names of countries with either major operations

or that are specifically relevant to the sustainability

issues covered in the report.

Corporate Profile (Inside front cover)

2.6 Nature of ownership and legal form. Corporate Profile (Inside front cover)

2.7 Markets served (including geographic breakdown,

sectors served, and types of

customers/beneficiaries).


2.8 Scale of the reporting organisation Corporate Profile (Inside front cover)

2.9 Significant changes during the reporting period

regarding size, structure, or ownership

Year in Brief 2014 (pg 27)

2.10 Awards received in the reporting period. Letter to Unitholders (pg 9)

Report Parameters

3.1 Reporting period About this Report (pg 53)

3.2 Date of most recent previous report (if any) CEO’s Message (pg 52)

About this Report (pg 53)

3.3 Reporting cycle (annual, biennial, etc.) About this Report (pg 53)

3.4 Contact point for questions regarding the report or its

contents.


3.5 Process for defining report content. About this Report (pg 53)

3.6 Boundary of the report (e.g. countries, divisions,

subsidiaries, leased facilities, joint ventures,

suppliers).


3.7 State any specific limitations on the scope or

boundary of the report


3.8 Basis for reporting on joint ventures, subsidiaries,

leased facilities, outsourced operations, and other

entities that can significantly affect comparability

from period to period and/or between organisations.




3.9 Data measurement techniques and the bases of

calculations, including assumptions and techniques

underlying estimations applied to the compilation of

the Indicators and other information in the report.

Explain any decisions not to apply, or to substantially

diverge from, the GRI Indicator Protocols.

Environment (pg 57-62)

People (pg 64-69)

Product Responsibility (pg 70-72)

3.10 Explanation of the effect of any restatements of

information provided in earlier reports, and the

reasons for such re-statement

(e.g.mergers/acquisitions, change of base

years/periods, nature of business, measurement

methods).

Environment (pg 62)

People (pg 65-67)

3.11 Significant changes from previous reporting periods

in the scope, boundary, or measurement methods

applied in the report.

CEO’s Message (pg 52)

About this report (pg 53)

3.12 Table identifying the location of the Standard

Disclosures in the report.

GRI Index (pg 73-78)

3.13 Policy and current practice with regard to seeking

external assurance for the report.

None

Governance, Commitment and Engagement

4.1 Governance structure of the organisation, including

committees under the highest governance body

responsible for specific tasks, such as setting

strategy or organisational oversight.

Corporate Governance (pg 28-46)


Investor Relations (pg 50-51)

4.2 Indicate whether the Chair of the highest governance

body is also an executive officer.

Board of Directors (pg 16,17-23)


4.3 For organisations that have a unitary board structure,

state the number and gender of members of the

highest governance body that are independent

and/or non-executive members.

Board of Directors (pg 16, 17-23)


4.4 Mechanisms for shareholders and employees to

provide recommendations or direction to the highest

governance body.

Sustainability Commitment (pg 53)

Stakeholders Engagement (pg 54-55)


People (pg 64-69)

Community (pg 69-70)


4.5 Linkage between compensation for members of the

highest governance body, senior managers, and

executives (including departure arrangements), and

the organisation’s performance (including social and

environmental performance).

Letter to Unitholders (pg 6-9)


Environment (57-64)

People (pg 64-69)

4.6 Processes in place for the highest governance body

to ensure conflicts of interest are avoided.


4.7 Process for determining the composition,

qualifications, and expertise of the members of the

highest governance body and its committees,

including any consideration of gender and other

indicators of diversity.






4.8 Internally developed statements of mission or values,

codes of conduct, and principles relevant to

economic, environmental, and social performance

and the status of their implementation.


Sustainability Commitment (pg 53)


People (pg 64-69)

Community (69-70)

Product Responsibility (70-72)

4.9 Procedures of the highest governance body for

overseeing the organisation’s identification and

management of economic, environmental, and social

performance, including relevant risks and

opportunities, and adherence or compliance with

internationally agreed standards, codes of conduct,

and principles

Introduction (pg 53)



Environment (pg 57)

People (pg 64-69)

Community (pg 69)

4.10 Processes for evaluating the highest governance

body’s own performance, particularly with respect to

economic, environmental, and social performance.


4.11 Explanation of whether and how the precautionary

approach or principle is addressed by the

organisation.



Environment (pg 57, 64)

People (pg 64-69)

4.12 Externally developed economic, environmental, and

social charters, principles, or other initiatives to

which the organisation subscribes or endorses.

Stakeholder Engagement (pg 54-55)


People (pg 64-69)

4.13 Memberships in associations (such as industry

associations) and/or national/international advocacy

organisations in which the organisation: * Has

positions in governance bodies; * Participates in

projects or committees; * Provides substantive

funding beyond routine membership dues; or * Views

membership as strategic.

Represented by CapitaLand Limited in

various government agencies and non-

government organizations.

4.14 List of stakeholder groups engaged by the

organisation.


4.15 Basis for identification and selection of stakeholders

with whom to engage.


4.16 Approaches to stakeholder engagement, including

frequency of engagement by type and by stakeholder

group.


Focus Areas of Sustainability (pg 56)

4.17 Key topics and concerns that have been raised

through stakeholder engagement, and how the

organisation has responded to those key topics and

concerns, including through its reporting.


Focus Areas of Sustainability (pg 56)

Environment (pg 57, 63-64)


Economic Performance Indicators

EC1 Information on the direct economic value generated

and distributed has been provided.

Financial Performance (pg 1-3, 86-88,

114-177)

EC3 Coverage of the organisation’s defined benefit plan

obligations.

People (pg 67)

EC4 Significant financial assistance received from

government.

No significant financial assistance

received from the government.



EC8 Development and impact of infrastructure

investments and services provided primarily for

public benefit through commercial, in-kind, or pro

bono engagement.

Environment (pg 60)

Environmental Performance Indicators

EN3 Direct energy consumption by primary energy

source.


EN4 Indirect energy consumption by primary source. Environment (pg 58-59)

EN5 Energy saved due to conservation and efficiency

improvements.


EN6 Initiatives to provide energy-efficient or renewable

energy based products and services, and reductions

in energy requirements as a result of these initiatives.

Environment (pg 58)

EN7 Initiatives to reduce indirect energy consumption and

reductions achieved.


Operations Review (pg 93-94)

EN8 Total water withdrawal by source. Environment (pg 60-61)

EN10 Percentage and total volume of water recycled and

reused.


EN16 Total direct and indirect greenhouse gas emissions

by weight.

Environment (pg 62)

EN17 Other relevant indirect greenhouse gas emissions by

weight.

Environment (pg 62)

EN18 Initiatives to reduce greenhouse gas emissions and

reductions achieved.

Environment (pg 62)

EN21 Total water discharge by quality and destination. Waste water from operational properties

is discharged into the public sewerage

system. Waste water at the construction

site of CapitaGreen is recycled and re-

used for vehicular washing.

EN22 Total weight of waste by type and disposal method. Environment (pg 62)

EN23 Total number and volume of significant spills. There were no significant spills identified.

EN28 Monetary value of significant fines and total number

of non-monetary sanctions for non-compliance with

environmental laws and regulations.

There were no monetary value of

significant fines and non-monetary

sanctions for non-compliance with laws

and regulations.

EN30 Total environmental protection expenditures and

investments by type.

Environment (pg 57)

Social – Labour Practices

LA1 Total workforce by employment type, employment

contract, and region, broken down by gender.

People (pg 66-67)

LA2 Total number and rate of new employee hires and

employee turnover by age group, gender, and region.

People (pg 65)




LA5 Minimum notice period(s) regarding significant

operational changes, including whether it is specified

in collective agreements.

People (pg 65)

LA7 Rates of injury, occupational diseases, lost days, and

absenteeism, and number of work-related fatalities by

region and by gender.

People (pg 69)

LA10 Average hours of training per year per employee by

gender, and by employee category.

People (pg 66)

LA12 Percentage of employees receiving regular

performance and career development reviews, by

gender.

People (pg 67)

LA13 Composition of governance bodies and breakdown of

employees per employee category according to

gender, age group, minority group membership, and

other indicators of diversity.


People (pg 66-67)

LA14 Ratio of basic salary and remuneration of women to

men by employee category, by significant locations

of operation.

People (pg 64-65)

LA15 Return to work and retention rates after parental

leave, by gender.

People (pg 65)

Social – Human Rights

HR4 Total number of incidents of discrimination and

corrective actions taken.

People (pg 65)

HR6 Operations and significant suppliers identified as

having significant risk for incidents of child labour,

and measures taken to contribute to the effective

abolition of child labour.

Environment (pg 58)

People (pg 64-65)

HR7 Operations and significant suppliers identified as

having significant risk for incidents of forced or

compulsory labour, and measures to contribute to the

elimination of all forms of forced or compulsory

labour.

Environment (pg 58)

People (pg 64-65)

Social – Society

SO1 Percentage of operations with implemented local

community engagement, impact assessments, and

development programs.

Environment (pg 57, 60)


SO2 Percentage and total number of business units

analysed for risks related to corruption.

People (pg 67-68)

SO3 Percentage of employees trained in organisation’s

anti-corruption policies and procedures.

People (pg 67-68)

SO4 Actions taken in response to incidents of corruption. People (pg 67-68)

SO8 Monetary value of significant fines and total number

of non-monetary sanctions for non-compliance with

laws and regulations.

There were no monetary value of

significant fines and non-monetary

sanctions for non-compliance with laws

and regulations.



Social – Product Responsibility

PR1 Life cycle stages in which health and safety impacts

of products and services are assessed for

improvement, and percentage of significant products

and services categories subject to such procedures.

Product Responsibility (pg 70)

PR3 Type of product and service information required by

procedures and percentage of significant products

and services subject to such information

requirements.


PR5 Practices related to customer satisfaction, including

results of surveys measuring customer satisfaction.


PR9 Monetary value of significant fines for non-

compliance with laws and regulations concerning the

provision and use of products and services.

There were no significant fines for non-

compliance with laws and regulations for

contractors/consultants.



THE SINGAPORE MARKET

According to the Ministry of Trade and Information (MTI), Singapore’s economy grew moderately by

2.9% in 2014. The manufacturing sector grew by 2.6%, while services producing industries

expanded by 3.2%. The main growth contributors to the services producing industries were the

finance and insurance, and business services sectors. In line with this moderate growth, demand for

office space remained healthy and registered a net absorption of 1.1 million square feet for the entire

year.

THE OFFICE MARKET

Existing Supply

The total islandwide office stock in Singapore rose by 2.4% y-o-y to 55.5 million sq ft in 4Q 2014. JEM

(315,390 sq ft) came on stream in the early part of 2014, followed by Orchard Gateway (37,000 sq

ft), Paya Lebar Square (430,000 sq ft), Westgate Tower (306,400 sq ft) and CapitaGreen (700,000 sq

ft) in the later part of the year.

The CBD Core in Singapore includes the Marina Bay, Raffles Place, Shenton Way and Marina Centre

micro-markets, and is the pre-eminent choice for office occupiers to locate their front office services

and related business functions. Supply in the CBD Core registered a 2.4% y-o-y growth in 4Q 2014

to 27.8 million sq ft, accounting for 50.1% of islandwide office stock. Grade A office stock is found

principally in the CBD Core and accounted for 11.7 million sq ft (42.2%) of office space in the area.

Future Supply

Over the next three years, total island-wide office supply is expected to increase by 6.4 million sq ft.

Approximately 3.5 million sq ft or 54.7% of this new supply will be in the CBD Core.

Island-wide Future Office Supply

(Million sq ft)

0.4

0.7

0.4

2015

2.2

1.4

0.1

2016

0.3

0.6

2017

0.6

2018

CBD Core Fringe CBD Decentralised

Source: CBRE Research

Independent Market Review


South Beach Tower (527,450 sq ft) is the only major office development in the CBD completing in

2015. Thus, CBRE Research anticipates market availability in the CBD to remain tight for the year.

New supply in the CBD will increase sharply in 2016 as four developments, namely Marina One

(1,875,630 sq ft), Guoco Tower (850,000 sq ft), DUO (570,475 sq ft) and Five Shenton Way (277,540

sq ft) are projected to come on stream that year. Supply will then moderate again from 2017 onwards,

when buildings such as Oxley Tower (111,710 sq ft) and Frasers Tower (645,000 sq ft) in the CBD,

and Vision Exchange (500,000 sq ft) in Jurong East, are completed.

Demand and Vacancy

CBD Core Office Supply and Demand

(‘000 sq ft)

0%

2%

4%

6%

8%

10%

12%

14%

(400)

(200)

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q

2011

2Q

2011

3Q

2011

4Q

2011

1Q

2012

2Q

2012

3Q

2012

4Q

2012

1Q

2013

2Q

2013

3Q

2013

4Q

2013

1Q

2014

2Q

2014

3Q

2014

4Q

2014

New completions

(sq ft) (LHS)Quarterly Net Absorption

(sq ft) (LHS)

Vacancy Rate

CBD Core (RHS)

Vacancy Rate

Grade A CBD Core

(RHS)

Vacancy Rate

Grade B CBD Core

(RHS)


The CBD Core office net absorption for 2014 remained healthy at 771,180 sq ft, although this was a

21.9% decrease compared to the year before.

Vacancy levels have been declining over the past three years, indicating tightening availability of

office space as new supply was absorbed by positive net demand for office space and older

buildings were concurrently taken off the market for redevelopment. The islandwide vacancy rate was

4.7% in 4Q 2014, and vacancy rate in the CBD Core was even lower at 4.3%. Heightened by limited

pipeline of new office supply over the next few quarters, CBRE Research expects vacancy rates to

remain tight.



Rental Values

CBD Core Monthly Rental Values

(S$ psf)

$1

1.0

0

$9

.58

$9

.75

$1

1.2

0

$7

.86

$7

.50

$7

.70 $8

.55

15%

20%

25%

30%

35%

40%

45%

$0

$2

$4

$6

$8

$10

$12

1Q

20

11

2Q

20

11

3Q

20

11

4Q

20

11

1Q

20

12

2Q

20

12

3Q

20

12

4Q

20

12

1Q

20

13

2Q

20

13

3Q

20

13

4Q

20

13

1Q

20

14

2Q

20

14

3Q

20

14

4Q

20

14

Grade A (CBD Core) Grade B (CBD Core) Premium of Grade A overGrade B (RHS)


Grade A CBD Core rents and Grade B CBD Core rents were S$11.20 psf (14.9% y-o-y growth) and

S$8.55 psf (11.0% y-o-y growth) respectively in 4Q 2014. This marked the fifth consecutive quarter

of rental increment for the Singapore office market. The increase in rents due to the tightening of

available space was reflected in both the Grade A and Grade B CBD Core sub-markets, with the

former registering a higher rate of growth compared to the latter.

CBRE Prime Office Occupancy Costs

Out of the 126 office markets tracked in the CBRE Prime Office Occupancy Costs 2014 report, over

half (74 markets) reported an increase in their prime occupancy costs, while 33 markets (26%)

reported a decline with the remaining 19 markets (15%) reporting no changes. The cost to occupy

prime office space was steadily increasing, and this was in line with the global economic recovery.

For the 12 months ended 3Q 2014, global prime office occupancy costs rose at a 2.5% annual rate

mainly due to the strong gains in the Americas (4.1%) and Asia Pacific (2.8%).

Asia-Pacific had seven markets ranked among the top 10 most expensive globally – Hong Kong

Central, Beijing’s Finance Street, Beijing’s CBD, New Delhi’s Connaught Place CBD, Hong Kong-West

Kowloon, Tokyo (Marunouchi/Otemachi) and Shanghai Pudong. Comparatively, Singapore ranked

14th on the index with an occupancy cost of US$112.91 (S$151) psf per annum. Thus, from a cost of

business perspective, Singapore remained a competitive location for multi-national corporations.


Prime Office Occupancy Costs Index (Asia Pacific Top 10 Cities)

(US$ psf per annum)

250.61

197.75189.39

153.65158.47

136.46127.89

112.14103.52

112.91

Hong

Kong

Centr

al

Beiji

ng

(Fin

ance

Str

eet)

Beiji

ng

(C

BD

)

Hong

Kong

(We

st

Kow

loon)

New

Delh

i(C

BD

)

Shang

hai

(Pud

ong

)

Tokyo

(Maru

no

uchi

Ote

ma

chi)

Shang

hai

(Puxi)

Mum

bai

Sin

ga

pore

Source: CBRE Research (as at December 2014)

The Office Investment Market and Capital Values

The preliminary total investment volume across all real estate sectors in Singapore decreased by

approximately 32.1% y-o-y in 2014 to S$16.7 billion. S$4.8 billion (29.0%) of these investments for the

year was from the office sector. The drop in transaction value was due in part to a dearth of large

commercial assets available for sale. Out of the 184 private deals transacted in 2014 (24 transactions

were pure office deals) across all sectors, 19 were above $100 million and the rest were priced below

S$100 million.

The top five notable office developments transacted in 2014 included Straits Trading Building

(S$450.0 million), Prudential Tower (S$512.0 million), Equity Plaza (S$550.0 million), Westgate Tower

(S$579.4 million) and one third stake in Marina Bay Financial Centre Tower 3 (S$1.2 billion). Most

investment deals were transacted at low initial yields, with buyers’ expectation for higher yields

arising from positive rental reversions in the future. Prudential Tower and Equity Plaza were sold to

buyers who were reportedly sub-dividing the buildings into smaller strata-title floors or units for sale.



Prime Office Capital Values and Net Yields

(S$ psf)

$2,600

$2,400

$2,600

$2,850

$2,100

$2,200

$2,300

$2,400

$2,500

$2,600

$2,700

$2,800

$2,900

3.2%

3.4%

3.6%

3.8%

4.0%

4.2%

4Q 2011

Net Prime Yield (RHS)Prime Capital Value (LHS)

4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014


Grade A office capital values registered a 9.6% y-o-y growth to S$2,850 psf in 4Q 2014, with yields

compressing to 3.75% from 3.79% vis-a-vis the previous quarter, but expanding by 0.24% y-o-y in

line with rising market rentals.

The investment market is likely to remain relatively subdued in 2015 due to a lack of properties up

for sale. However, CBRE Research expects continued interest in enbloc and strata buildings for the

office sector.

Office Market Outlook

Singapore’s economic outlook for 2015 remains positive with an anticipated growth forecast of 2.0%

to 4.0%.

Leasing demand is expected to remain positive with the bulk of leasing activity likely to be

concentrated within the CBD Core. Vacancy levels are likely to remain low due to tight supply from

2015 to 1H 2016. However, with new expected supply coming in from 2H 2016 to 2017, the pressure

on vacancy rates to tighten will ease.

Rental growth is expected to remain through the next couple of quarters, particularly for 1H 2015, as

a result of tightening of available space in the market. CBRE Research expects the Grade A

sub-market to maintain its lead in the rise in the rental market. Grade B rents are also expected to

grow, albeit at a slower pace. Grade A CBD Core rents are expected to increase by 11.6% in 2015,

whereas Grade B CBD Core rents are expected to increase by 4.1% over the same period.

Rental growth is likely to taper from mid 2016 due to the oncoming sizeable supply. Both Grade A and

Grade B rents may ease and subsequently dip from 2016 to 2017. Going forward, tenant retention will

become more critical as the occupiers are presented with more space options.


CBD Core Monthly Rental Values

(S$ psf)

8.10

9.90

11.00

9.58 9.75

11.20

12.50

11.25

5.77

7.227.86

7.50 7.70

8.558.90

8.50

Grade A CBD Core Grade B CBD Core

2009 2010 2011 2012 2013 2014 2015F 2016F

Grade A CBD Coreprojected rent

Grade B CBD Coreprojected rent


Singapore REITs and Business Trusts Market Overview

Singapore is now one of the largest REIT markets in Asia. As at 4Q 2014, there were 34 listed REITs

and Business Trusts in Singapore with an aggregate market capitalisation exceeding S$61 billion. In

2015, a possible new REIT listing to look out for is Centurion Corp (formerly known as SM Summit

Holdings). With purpose-built workers facilities in Malaysia and student accommodation in Australia

and the UK, Centurion Corp is currently exploring the possibility of a REIT for dormitories.

The REIT regime in Singapore was established with the objective of providing investors with a

platform to gain exposure to real estate assets that encompassed diversification of risks through

pooling. Over the years, REITs have increasingly become a viable investment option for investors. To

further improve the regulatory regime governing REITs and REIT managers, there have been

deliberations to leverage on the strength of the current existing regime to further improve investor

confidence and growth.

There are new considerations by the MAS to strengthen the corporate governance and transparency

of the REITs and Business Trusts market. These new considerations include imposing new statutory

duties on REIT managers and its individual directors, increasing the representation of independent

directors on the Board of REIT Managers, more disclosure on remuneration of directors and key

executives and use of income support structures for acquisitions, and more alignment of

performance fee payable to REIT Managers to unitholders’ interests.

In addition, there are also proposals by MAS to improve the operational flexibility of REITs. These

include the adoption of a single-tier gearing limit of 45.0%, and increasing the development limit of

REITs from 10.0% of total deposited properties to 25.0%. While these measures might improve a

REIT’s ability to earn higher returns, they may also imply potentially higher volatility for an otherwise



stable sector. Hence, the ability of REIT managers to effectively manage and optimise their property

portfolios would become even more important, and enhanced disclosure requirements to enable

unitholders to better assess the performance of REIT Managers is essential.

All in all, the proposed enhancements serve to improve operational effectiveness, transparency, and

corporate governance in the S-REIT market, and will improve the sector’s attractiveness to issuers

and investors. This would lead to more liquidity and REIT listings, and even more importantly,

strengthen the entire S-REIT market to benefit not just the financial sector, but also the real estate

sector and overall economy in Singapore in years to come.

Qualifying Clause

This Report is subject to the following limiting conditions:

The content of this report is for information only and should not be relied upon as a substitute for professional advice, which should

be sought from CBRE prior to acting in reliance upon any such information.

The opinions, estimates and information given herein or otherwise in relation hereto are made by CBRE and affiliated companies in

their best judgment, in the utmost good faith and are as far as possible based on data or sources which they believe to be reliable

in the context hereto.

Where it is stated in the Report that information has been supplied to CBRE by another party, this information is believed to be reliable

by CBRE. Other information is derived from sources which we believe to be reliable to the best of our ability. We can accept no

responsibility if this should prove not to be so.

Notwithstanding this, CBRE disclaims any liability in respect of any claim that may arise from any errors or omissions, or from

providing such advice, opinion, judgment or information.

All rights are reserved. No part of this report may be reproduced, stored in a retrieval system, or transmitted, in any form or by any

means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of CBRE Pte Ltd.


Achieving New Heights

CCT reached a major milestone with the completion of CapitaGreen in end 2014. The timely

achievement places the Trust in a strong position for growth as it captures the expected rise in office

market rents. FY 2014 also saw the completion of an AEI at Raffles City Tower which delivered a 9.3%

return on investment, while Capital Tower’s AEI remains on schedule for completion in 4Q 2015.

The Trust achieved strong portfolio occupancy and higher signing rents during the financial year

buoyed by active leasing efforts and a tight office market. We continued to leverage the debt market

and secure opportunities to issue debt at low interest rates with long-dated maturities. At the same

time, we maintained a low gearing of 29.3% which afforded a debt headroom of S$1.3 billion,

assuming 40.0% gearing, and the flexibility to fund future opportunities for growth.

Change in Accounting Policy for Joint Venture Projects

From 1 January 2014, as a result of FRS 111 Joint Arrangements, the Group has changed its

accounting policy for its interests in joint arrangements. Under FRS 111, the Group has classified its

interests in joint arrangements as either joint operations (if the Group has rights to the assets, and

obligations for the liabilities, relating to an arrangement) or joint ventures (if the Group has rights only

to the net assets of an arrangement). When making this assessment, the Group considered the

structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the

arrangements and other facts and circumstances. Previously, the structure of the arrangement was

the sole basis of classification.

At 31 December 2013, the Group had investments under joint arrangements. RCS Trust and MSO

Trust were accounted for as jointly-controlled entities using the proportionate consolidation method.

The Group has re-evaluated the rights and obligations of the parties to these joint arrangements and

has determined that the parties in these joint arrangements have rights to the net assets of the joint

arrangements. Accordingly, these joint arrangements have been classified as joint ventures under

FRS 111 and are accounted for using the equity method. The amendments were applied

retrospectively.

Financial Review


Financial Performance for 2014

Gross Revenue

Gross revenue for FY 2014 stood at S$262.6 million1, marking an increase of 4.4% or S$11.1 million

from the year before which resulted from higher revenue contributions from all properties except One

George Street. Lower contribution from One George Street stemmed from the lack of yield protection

income which ceased on 10 July 2013.

FY 2014 Gross Revenue by Property

(S$ million)

135.5 139.5

66.6 61.2

65.0

57.6 53.3

21.7 20.4 12.8 11.6 12.8

50.22

22.3 20.4 13.3 11.9 12.9

CapitalTower

Six BatteryRoad

One GeorgeStreet

TwentyAnson

HSBCBuilding

Golden ShoeCar Park

BugisVillage

WilkieEdge

60.0% interestin

Raffles CitySingapore

FY 2013 FY 2014

Accounted for using equity method

40.0% interestin

CapitaGreen

Net Property Income

During the year in review, net property income grew 4.1% to S$205.2 million1 on the back of improved

revenue but was partially offset by higher property tax.

FY 2014 Net Property Income By Property

(S$ million)

CapitalTower

Six BatteryRoad

One GeorgeStreet

TwentyAnson

HSBCBuilding

Golden ShoeCar Park

BugisVillage

WilkieEdge

60.0% interestin

Raffles City

40.0% interest

in

CapitaGreen

FY 2013 FY 2014

43.1 46.6

42.0

17.2 20.4

9.7 9.2 8.9

99.6

48.7 51.4

39.62

17.2 20.3

9.8 9.4 8.8

102.1

Singapore

Accounted for using

equity method

(0.2)(0.2)

1 As a result of FRS 111 Joint Arrangements, interest in RCS Trust and MSO Trust were accounted for using equity method.

2 Due to absence of yield protection income.


Distributable Income

Distributable income of S$249.2 million in FY 2014 outperformed that of FY 2013 by 6.4% due to

higher NPI and lower interest expenses from CCT’s wholly-owned properties and higher distributable

income from RCS Trust as well as release of QCT’s tax-exempt income. We achieved a DPU of 8.46

cents for the financial year, an increase of 3.9% y-o-y.

Financial Performance for 2010 to 2013

The financial analysis on the revenue and net property income from 2010 to 2013 were based on

proportionate consolidation method, which had included CCT’s 60.0% interest in RCS Trust and

CCT’s 40.0% interest in MSO Trust.

2013

Gross revenue for FY 2013 was S$386.9 million, which was S$11.1 million or 3.0% improvement over

that of FY 2012. The increase was mainly due to the full-year contribution from Twenty Anson, as well

as higher revenues from all properties except for Capital Tower and One George Street. The drop in

Capital Tower revenue was due to lower average occupancy. For One George Street, lower yield

protection income which ceased on 10 July 2013, contributed to reduced revenue.

Net property income of S$296.5 million in FY 2013 outperformed that of FY 2012 by S$1.0 million or

0.3% mainly due to higher revenue, albeit offset by higher property operating expenses.

2012

Gross revenue of S$375.8 million for FY 2012 was S$14.6 million or 4.0% higher than that for FY 2011.

The higher revenue was mainly due to the acquisition of Twenty Anson on 22 March 2012 and higher

rental from HSBC Building since end April 2012. All properties recorded higher revenue in FY 2012

compared to a year ago, except for Six Battery Road, due to asset enhancement works, and the

former Market Street Car Park, due to its redevelopment to CapitaGreen, a Grade A office tower.

Lower property tax, together with higher gross revenue, yielded a net property income in FY 2012 of

S$295.5 million, a 6.6% increment over S$277.3 million in FY 2011.

2011

Gross revenue for FY 2011 was S$361.2 million, which was S$30.7 million or 7.8% lower than S$391.9

million for FY 2010. The decrease was due to lower revenue from Six Battery Road arising from

negative rent reversions and lower occupancy. Lower occupancy at Six Battery Road was partly

attributed to the ongoing AEI. In addition, loss of rental income resulting from the divestments of

Robinson Point and StarHub Centre, as well as the redevelopment of Market Street Car Park also

contributed to the decline. However, the drop in total revenue was mitigated by higher revenue from

Wilkie Edge and Raffles City Singapore’s retail and hotel components.

Net property income for FY 2011 of S$277.3 million was S$21.7 million, 7.2% lower than the S$299.0

million for FY 2010, which was largely due to lower gross revenue.

2010

Gross revenue for FY 2010 was S$391.9 million, a decrease of S$11.4 million or 2.8% over S$403.3

million for FY 2009. The decrease was mainly due to loss of rental income resulting from the

divestments of Robinson Point and StarHub Centre completed on 19 April 2010 and 16 September

2010 respectively. However, higher revenue from Capital Tower, Wilkie Edge and Raffles City

Singapore partially offset the decline.

Financial Review


Net property income for FY 2010 of S$299.0 million was S$1.2 million or 0.4% lower than the S$300.2

million achieved in FY 2009. The decrease was due to lower gross revenue although the decline was

partially offset by lower operating expenses.

Sensitivity Analysis

Estimated DPU impact per annum

0.1% increase in interest rate -0.1%

0.1% decrease in interest rate 0.1%

As at 31 December 2014, approximately 83% of the Trust’s total borrowings are on fixed interest

rates, therefore minimising the impact due to changes in interest rates. It is estimated that a 0.1%

increase or decrease in interest rate would have a 0.1% negative or positive impact on DPU per

annum.

Estimated gearing impact per annum

0.25% increase in valuation of investment properties -0.1%

0.25% decrease in valuation of investment properties 0.1%

The Trust maintains a prudent low gearing of 29.3% as at 31 December 2014. It is estimated that a

0.25% increase or decrease in valuation would decrease or increase the Trust’s gearing by 0.1% per

annum.

Estimated rental income impact per annum

1.0% increase in occupancy1 S$3.3m

1.0% decrease in occupancy1 -S$3.3m

10.0% increase in committed rental rates2 S$2.3m

10.0% decrease in committed rental rates2 -S$2.3m

CCT’s rental income could be impacted by changes in its properties’ occupancies and rental rates

achieved. Assuming that the current average rental rate is maintained, it is estimated that a 1.0%

increase or decrease in occupancy would result in S$3.3 million increase or decrease in rental

income for FY 2014.

Using leases committed in 2014 for lease renewals, rent reviews and vacant units as the baseline for

assumption, the impact on rental income for every 10.0% increase or decrease in committed rental

rates would lead to a corresponding change of approximately S$2.3 million for FY 2014.

Given that the assets of CCT Group are mainly based in Singapore, there is minimal foreign currency

exposure.

1 Assuming current average rental rate is maintained.

2 Based on leases due for renewal and rent review, and committed vacant units in 2014.


PRUDENT CAPITAL MANAGEMENT

CCT adheres to a prudent capital structure and regularly reviews its sources of debt, the debt

maturity profile and liquidity position in order to meet its funding requirements.

As at 31 December 2014, CCT Group’s total gross debt stood at S$2.2 billion and the gearing was

29.3%. With the low gearing, CCT is financially well-positioned for future growth.

Proactive Refinancing of Debt Ahead of Maturity

During FY 2014, S$69.25 million of the principal amount of S$190.25 million CB due 2015 was

converted into CCT units, while S$120.75 million of the amount was repurchased and S$0.25 million

was redeemed. As at 31 December 2014, the CB due 2015 was cancelled in their entirety after the

completion of these activities ahead of its maturity in April 2015.

During the year, notes were issued from CCT’s S$2.0 billion multicurrency Medium Term Note

Programme. These comprised a 6.5-year S$50.0 million 2.98% notes due 2021 issued in August 2014

and a 7-year 6.3 billion Japanese Yen (JPY) denominated floating rate notes due 2021 issued in

October 2014. The JPY proceeds were hedged to S$75.0 million with a Singapore dollar fixed interest

rate of 2.95% per annum.

CCT’s Debt Maturity Profile

S$ (% of total borrowings)


3.64% p.a. fixed rate $70m MTN


$328m(15%)

$480m(21%)

$120m (5%)

$18m (1%)

$200m (9%)

$70m (3%)

$148m(7%)

$200m(9%)

$100m(5%)

$175m(8%)

$75m (3%)

$50m (2%)

$275m

(12%)

RCS revolving facility loan

RCS term loan at 3.025% p.a.

RCS fixed rate notes at 3.09% p.a.

MSO Trust bank loan

Convertible bonds at 2.5% p.a.

2.89% p.a. fixed rate $148m MTN1

Unsecured bank loans


2.95% p.a. fixed rate $75m MTN1

2015 2016 2017 2018 2019 2020 2021

1 JPY Bond swapped to S$.

Operations Review


Accessibility to Banking and Debt Capital Markets

The issuance of long-dated notes at attractive interest rates are a testament to the strength of CCT’s

banking relationship and its robust debt capital market standing. These in turn generate strong

financial flexibility and lower funding costs for the Trust.

Diverse Funding Sources

CCT ensures diversified sources of funding by leveraging different debt markets through various

financial instruments. As at 31 December 2014, our funding sources comprised 46.5% bank loans,

21.4% commercial mortgage backed securities, 10.0% JPY bonds, 14.3% medium term notes and

7.8% convertible bonds.

Achieved Diversification of Funding Sources through the Years

(S$)

As at 31 December

$520m $480m $480m $480m $480m

$627m

$866m

$758m$848m

$1,041m

$220m

$320m

$320m $270m

$320m$405m

$371m$400m $365m

$175m$148m $148m

$223m

2010 2011 2012 2013 2014

CMBS Bank loans Medium Term Notes Convertible Bonds JPY Bonds (swapped to S$)

Strong Financial Flexibility

All of CCT’s assets are unencumbered, except CapitaGreen and Raffles City Singapore. The Trust’s

unsecured assets are valued at S$4.9 billion as at 31 December 2014 – a significant sum that

enhances financial flexibility. CCT also has an untapped balance of S$1.5 billion from its MTN

programme as well as undrawn bank facilities amounting to S$265.0 million which can be leveraged

as working capital and used to fund future financial obligations.


Financial Flexibility

(S$)


$265.0m

Available bank credit facilities Utilised bank credit facilities

Total Committed Bank Credit Facilities $1,786.0m

$1,456.7m

Available MTN Utilised MTN

Total MTN Facilities $2,000.0m

$4,882.4m $2,476.1m

Unencumbered properties Encumbered properties

Total Investment Properties $7,358.5m

$543.3m

$1,521.0m

Prudent Capital Structure with Low Gearing

CCT ended the financial year with a low gearing of 29.3%, at the lower end of our target gearing

range between 30.0% to 40.0% through property market cycles. Assuming 40.0% of gearing, CCT

maintains a debt headroom of S$1.3 billion.

Target Gearing Below 40.0% through Market Cycles

As at 31 December

1,747.3

2,017.5 2,072.1 2,060.9

2,182.7

28.630.2 30.1 29.3 29.3

2010 2011 2012 2013 2014

Borrowings (S$ million) Gearing (%)

Operations Review


Reduced Cost of Debt

CCT’s weighted average cost of debt for FY 2014 was 2.3%, an improvement from 2.6% for FY 2013.

The lower cost of debt was achieved due to the expiry of a S$370.0 million interest rate swap, fixed

at 3.59% per annum on 18 March 2013, which was funded by lower floating rate.

Hedge Interest Rate and Currency to Manage Risks

At the close of FY 2014, fixed rate loans made up approximately 83% of CCT’s borrowings, thus

mitigating risks brought on by volatile interest rate movements. Borrowings in JPY and US dollars

have been swapped to Singapore dollars fixed rate borrowings.

Unit Buy-back Mandate

During CCT’s Annual General Meeting held in 2014, Unitholders approved the Trust’s unit buy-back

mandate – a capital management tool that improves return on equity for Unitholders. When engaged

at strategic junctures, unit buy-back mitigates short-term market volatilities, off-sets the effects of

short-term speculation and bolsters market confidence in the Units. The Unit buy-back mandate was

not used in FY 2014.

Upgrade of Credit Rating by Standard & Poor’s and Moody’s

During the year, Standard & Poor’s raised CCT’s long-term corporate credit rating to “A-” from “BBB+”

with stable outlook, reflecting the Trust’s stable business performance supported by consistent cash

flows, high occupancies and a disciplined approach in using debt to fund new investments.

Subsequent to FY 2014, Moody’s also upgraded CCT’s senior unsecured ratings to “A3” from “Baa1”

with stable outlook. The upgrade demonstrated CCT’s strong market position, successful completion

and pro-active lease management for CapitaGreen, a good track record of high portfolio occupancy

and strong financial profile with headroom to make debt-funded acquisitions for future growth.

VALUE CREATION FOR CCT

Optimised Portfolio for Long-term Growth

The Trust’s portfolio comprises 10 well-located and distinguished properties in Singapore. These

include four Grade A office buildings (including CapitaGreen, which obtained its TOP in December

2014), two prime office buildings, three integrated developments and one multi-storey car park.

Guided by a rigorous portfolio reconstitution strategy to optimise Unitholder returns, the Trust

pursues accretive acquisitions and value creation opportunities. At the same time, we unlock the

value of properties that have reached the optimal stage of their life cycle, and strengthen our financial

flexibility to capture better market opportunities.

Proactive leasing efforts, current AEIs and the potential rental income from CapitaGreen form the

cornerstone of CCT’s long-term growth, as we persist in exploring value-enhancing opportunities

marked by a disciplined approach.

Engagement of AEIs to Drive Value

CCT engages in AEIs to augment its properties’ competitiveness while enhancing long-term rental

yields. In FY 2014, AEIs were rolled out progressively at two properties – Raffles City Tower and

Capital Tower – with the aim of generating value for the Trust and its portfolio.

In end June 2014, the AEI for Raffles City Tower, a 42-storey office tower at Raffles City Singapore,

was completed at the cost of S$32.3 million instead of the projected S$34.7 million, while delivering

a return on investment of 9.3%, which is higher than the targeted 8.6%.


Following the AEI, Raffles City Tower now features an upgraded concierge area and main lobby as

well as enhanced security with the introduction of new security turnstiles. The office tower has

refurbished lift interiors; new pantry areas on every floor; and restrooms with energy-saving lighting

and water-efficient fittings. Externally, the entrance of the building features a distinctive canopy and

the sculpture, “L’ Envol”, created by renowned French sculptor, Etienne. Average occupancy rate

during the enhancement period stood at 99.9%. As at 31 December 2014, Raffles City Tower

achieved an occupancy rate of 100.0%.

At Capital Tower, a S$40-million AEI designed to reinforce its prime position as a Grade A office tower

is underway. Progressing on schedule for completion in 4Q 2015, upgrading works have concluded

in phases since June 2014. These include new security turnstiles, self-registration kiosks, enhanced

lift lobbies on the first and second floors, and a refurbished main lobby. Meanwhile, works on the

building’s restrooms and lift interiors are ongoing. Upper lift lobbies upgrading have commenced in

December 2014.

Capital Tower’s AEI also incorporates innovative green features such as more efficient lighting and

the recycling of condensate water from the air-handling units for the cooling towers of the new chiller

plant. Energy savings from these greening efforts are expected to reach about S$600,000 per year.

Supported by the scheduled upgrades, Capital Tower was awarded a BCA Green Mark Platinum

Award in May 2013 for excellence in energy and water efficiency, environmental protection and

indoor environmental quality. Committed occupancy at Capital Tower remains at 100.0%.

On 11 July 2014, we commenced an improvement programme at Twenty Anson. The Green Mark

Platinum building completed in 2009 underwent a series of improvements including the installation

of turnstiles at the main lobby, the implementation of Destination Control System (DCS) for the lift

system, upgrades of lift motors of low-rise passenger lifts, a new concierge counter and a visitor

self-registration kiosk. At the same time, Twenty Anson’s Tenant Service Centre has been moved to

Level 4. The upgrading was completed in January 2015.

Completion of CapitaGreen Enhances Value

CapitaGreen obtained TOP on 18 December 2014. Located in the heart of the Central Business

District (CBD), the former Market Street Car Park was redeveloped into a 40-storey Grade A office

building at an estimated cost of S$1.4 billion.

CCT has a 40.0% interest in CapitaGreen, its first development project, and has a call option to

purchase the remaining 60.0% interests from joint venture partners, CapitaLand and Mitsubishi

Estate Asia. The call option is exercisable within three years between 2015 and 2017, following

receipt of the building’s TOP. The purchase price will be at market valuation subject to a minimum

price of development cost compounded at 6.3% per annum.

With limited new office supply in the CBD in 2015, CapitaGreen’s location and timely completion in

end 2014 places it in a strong position to leverage the rise in office market rents. As at end FY 2014,

the development attained aggregate leasing commitment for approximately 486,800 sq ft, or 69.3%

of NLA. CapitaGreen’s committed tenants span a variety of industries including banking, insurance

and financial services, energy and commodities, IT, media and telecommunications, and real estate

and property services.

Operations Review


Portfolio Value Marks Stable Increase

Driven by an improvement in rents, CCT’s portfolio generated an increase in valuation. For the first

time, CapitaGreen was valued as an operating asset in the December 2014 valuation as opposed to

an investment property under construction. The valuation of CCT’s portfolio and its joint venture

properties rose to S$7,358.5 million, up 5.7% y-o-y. A capitalisation rate of 3.75% to 4.25% was

adopted by the independent valuers for the valuation of CCT’s office portfolio, similar to that used in

the valuation as at 31 December 2013.

Enhancing Portfolio Value: Valuation Increased by 5.7%

Investment Properties

Valuation

As at 31 December

Capital Value

As at 31 December Cap rate

per annum

(%)

Discount

rate per

annum

(%)

2013

(S$ m)

2014

(S$ m)

Variance

(%)

2014

(S$ psf)

Capital Tower 1,282.0 1,309.0 2.1 1,770 3.85 7.50

Six Battery Road 1,285.0 1,330.0 3.5 2,691 3.75 7.50

One George Street 959.0 975.0 1.7 2,179 3.85 7.50

Twenty Anson 431.0 431.0 0.0 2,102 3.85 7.50

HSBC Building 429.0 450.0 4.9 2,245 3.85 7.50

Golden Shoe Car Park 138.4 141.0 1.9 Nm4 6.50 9.00

Wilkie Edge 186.0 191.0 2.7 1,249 4.25 7.50

Bugis Village1 58.6 55.4 (5.5) 457 13.00 13.00

Raffles City Singapore

(60.0% interest)

1,810.8 1,865.7 3.0 Nm4 Office 4.25

Retail 5.25

Hotel 5.25

Office 7.50

Retail 7.50

Hotel 7.75

CapitaGreen

(40.0% interest)

380.02 610.43 Nm4 2,171 4.00 7.25

Total 6,959.8 7,358.5 5.7

PROACTIVE PORTFOLIO MANAGEMENT

Objectives for Continued Success

The Trust maintains differentiated investment objectives for each property type within its portfolio to

ensure the competitiveness and value of its assets.

• With its Grade A office buildings, the Trust aims to optimise financial performance and

consolidate the standing of these properties as the preferred Grade A offices within the CBD.

This is achieved by focusing on tenant experience and building management services, while

creating solutions that are environmentally sustainable, thus leading to savings in property

expenses.

1 Bugis Village valuation saw a diminution compared to 12 months ago as the valuation has taken into account the right of the

President of the Republic of Singapore, as Lessor under the State Lease, to terminate on 1 April 2019 upon payment of

S$6,610,208.53 plus accrued interest.

2 Book value of property under construction comprising land value, construction and related costs

3 Market value of CapitaGreen as an operating asset

4 Not meaningful


• For its prime office properties, the Trust aims to optimise financial performance and asset value,

and capitalise on their strategic locations to ensure the long-term stability of the portfolio.

• Likewise, the Trust aims to optimise the financial returns from its integrated developments while

enhancing their positioning as unique office and shopping destinations.

• The Trust’s objective for its car park is to optimise financial returns through the provision of

quality parking facilities in the CBD, supported by varied retail and food and beverage (F&B)

options for the office community.

Strong Portfolio Performance

On the back of prime assets in choice locations, coupled with a strong customer-centric culture,

CCT’s portfolio committed occupancy, including CapitaGreen’s 69.3% committed occupancy,

continued to surpass market levels, reaching 96.8% as at 31 December 2014 versus CBRE’s CBD

Core market occupancy rate of 95.7%.

CCT’s Committed Occupancy Rate since Inception

As at 31 December

95.2%

99.1% 99.6% 99.6%

96.2%94.8%

99.3%

95.8%97.2%

98.7%

96.8%

91.7%

96.4%98.2%

95.7%

91.9%

95.4%91.2%

92.2% 95.2% 95.7%

84.0%

87.2%

89.7%

92.7%91.2%

87.9%88.7%

90.6% 90.1% 89.8%

80%

85%

90%

95%

100%

CCT CBRE's Core CBD Occupancy Rate URA

Includes CapitaGreen's

occupancy of 69.3%

87.9%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Portfolio Augmented by Choice Tenants from Diverse Industries

FY 2014 saw a healthy take up in leases with approximately 900,000 sq ft of leases signed during the

year. Meanwhile, CCT continued to attract and retain choice tenants, achieving a tenant retention rate

of about 86% and securing lease renewals with major tenants such as JPMorgan Chase Bank, N.A.

and GIC Private Limited. This high retention rate underpinned the strong portfolio occupancy rate.

Operations Review


New tenants made up approximately 15% of total leases signed. They spanned diverse trade sectors

with the three largest being Banking, Insurance and Financial Services, Energy, Commodities,

Maritime and Logistics, and Business Consultancy, IT, Media and Telecommunications.

Trade Mix of New Leases Signed in 2014 Compared to 2013 (By NLA)1

2013 2014

11%7%

20%

3% 4%

10%

5%

33%

5%2%

22%20% 19%

14%12%

6% 5%1% 1% 0%

Banking, Insurance

and Financial Services

Energy, Commodities,

Maritime and

Logistics

Business Consultancy,

IT, Media and

Telecommunications

Food and

Beverage

Retail Products and

Services

Manufacturing and

Distribution

Education and

Services

Real Estate and

Property Services

Legal Government

About 42% of the Trust’s monthly gross rental income was contributed by its top 10 blue-chip tenants

which continue to underpin revenue. In terms of monthly gross rental income, RC Hotels (Pte) Ltd,

The Hongkong and Shanghai Banking Corporation Limited and JPMorgan Chase Bank, N.A. were the

year’s top three tenants.

Top 10 Blue-Chip Tenants Contribute about 42% of Monthly Gross Rental Income2

(based on monthly gross rental income excluding retail turnover rent of top 10 tenants)


14%

6%5% 4% 4%

2% 2% 2% 2% 2%

RC Hotels (Pte) Ltd

TheHongkong

and Shanghai Banking

Corporation Limited

JPMorgan Chase Bank,

N.A.

GIC Private Limited

Standard Chartered

Bank

CapitaLand Group

Robinson & Company

(Singapore) Private Limited

Mizuho Bank, Ltd.

The Royal Bank of

Scotland PLC

Credit Agricole

Corporate and

Investment Bank

1 Based on NLA of new leases committed using 100% basis for Raffles City Singapore and excluding CapitaGreen

2 Total percentage may not add up due to rounding


CCT’s Key Buildings’ Expiring Profiles and Rents

2015 2016 2017

% of

expiring

leases1

Average

Monthly

Gross

Rental Rate

for Expiring

Leases

(S$ psf)

% of

expiring

leases1

Average

Monthly

Gross

Rental Rate

for Expiring

Leases

(S$ psf)

% of

expiring

leases1

Average

Monthly

Gross

Rental

Rate for

Expiring

Leases

(S$ psf)

Capital Tower 5% 9.06 1% 9.04 0% NA

Six Battery Road 4% 11.32 7% 10.86 5% 12.10

One George Street 3% 8.11 4% 8.79 4% 9.48

Raffles City Tower 3% 7.88 2% 9.13 3% 8.28

Total/Weighted Average 15% 8.99 14% 9.78 12% 10.05

Well Spread Lease Expiry Profile

CCT engages in active lease management which supports a well-spread lease expiry profile. Of the

office leases expiring in 2015, about 8% have been renewed as at 31 December 2014, leaving only

around 12% to be renewed. The portfolio, comprising office, retail and hotels and convention centre

leases has a weighted average lease term to expiry of 8.1 years as at end December 2014.

With limited new supply of office space in the CBD in 2015, market rents in the Singapore office

market are expected to continue to rise. The Trust is strategically placed to capture positive rent

reversions for the remaining 12% of office leases due for renewal in 2015.

Well Spread Portfolio Lease Expiry Profile

(based on monthly gross rental income excluding retail and hotel turnover rent)


Portfolio WALE2 by NLA: 8.1 years

12%

12%10%

6%

29%

5%

6%4%

1%4%

11%

2015

Office Retail Hotels and Convention Centre Committed

1%

8%

2016 2017 2018 2019 and beyond

1 Percentage of monthly gross rental income for leases expiring at respective properties as at 31 December 2014 over the monthly

gross rental income for office portfolio

2 WALE: Weighted average lease term to expiry

Operations Review


Average Office Portfolio Rental Rate Rises 5.9%

Average monthly rental for CCT’s office portfolio continued to rise, reaching S$8.61 psf as at

December 2014 – an uplift of 5.9% from S$8.13 psf the year before. The increase was fuelled by

higher achieved rents than expired rents for office leases due during the financial year and included

the committed rents of CapitaGreen. Property research consultants anticipate higher market office

rents in 2015, due to the limited supply of new office space in the CBD.

CCT’s Monthly Average Rent for Office Portfolio1

(S$ psf)

7.947.84

7.79

7.66

7.457.39

7.537.64

7.83

7.968.03

8.138.22 8.23

8.42

8.61

Average gross rent per month for office portfolio including CapitaGreen (S$ psf)

Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14

Income Contribution

CCT’s gross rental income for FY 2014 comprised approximately 66% office leases, 20% retail leases

and 14% hotels and convention centre leases. Its top three trade sectors accounted for about 60%

of the Trust’s gross rental income, of which some 34% was contributed by the Banking, Insurance and

Financial Services sector, 14% by the Hospitality sector and another 12% by the Retail Products and

Services sector.

CCT’s Income Contribution by Sector

(based on monthly gross rental income excluding retail turnover rent from 1 January 2014 to

31 December 2014)

Office (66%)

Retail (20%)

Hotels and Convention Centre (14%)

1 Average rent per month for office portfolio (S$ psf) = Total committed gross rent for office per month

Committed area of office per month


Diverse Tenant Mix in CCT’s Portfolio

(based on monthly gross rental income excluding retail turnover rent for December 2014)

Banking, Insurance and Financial Services (34%)

Hospitality (14%)

Retail Products and Services (12%)

Business Consultancy, IT, Media and Telecommunications (7%)

Manufacturing and Distribution (7%)

Food and Beverage (7%)

Education and Services (4%)

Real Estate and Property Services (4%)

Energy, Commodities, Maritime and Logistics (4%)

Legal (4%)

Government (3%)

Malaysia Investment

CCT owns 30.0% of Quill Capita Trust (QCT), a commercial REIT listed on Bursa Malaysia Securities

Berhad. CCT Group’s investment in Malaysia totals S$63.9 million, or 0.8% of its total deposited

properties.

QCT’s portfolio covers 10 properties across Kuala Lumpur, Penang and Selangor. Its total deposited

properties amounted to RM837.7 million (S$314.9 million) as at 31 December 2014, and it recorded

market capitalisation of RM456.5 million (S$171.6 million) for the same period. Its tenant profile spans

both multinational and local companies in automotive, banking, information technology, electronics,

logistics, oil & gas and retail. Its DPU of 8.38 sen for FY 2014 translates into a distribution yield of

7.2% based on the closing price of RM1.17 per unit on 31 December 2014.

Operations Review


Capital Tower

Capital Tower is a 52-storey Grade A office building set in a landscaped plaza. Integrated with

lifestyle amenities, meeting facilities and retail outlets, this multiple-award winning building was

conferred a Green Mark Platinum award in 2013, the highest accolade for sustainable buildings.

Property Information

Location 168 Robinson Road

Title Leasehold estate expiring 31 December 2094

Purchase Price in 2004 (S$ million) 793.9

Car Park Lots 415

As at 31 December 2013 2014

Valuation (S$ million) 1,282.0 1,309.0

Net Lettable Area (sq m) 68,527 68,720

Net Lettable Area (sq ft) 737,618 739,702

Number of Tenants 20 20

Committed Occupancy (%) 100.0 100.0

Gross Rental Income (S$ million) 53.7 58.0

Gross Revenue (S$ million) 61.2 66.6

Net Property Income (S$ million) 43.1 48.7

Top 3 tenants’ contribution to portfolio gross rental income

for December 2014 %

JPMorgan Chase Bank, N.A. 4.7

GIC Private Limited 4.4

CapitaLand Group 2.4

Building Lease Expiry Profile

(based on building’s monthly gross rental income)


20.5%

3.0% 0.0% 2.9%

73.6%

2015 2016 2017 2018 2019 and

beyond

Property Details


Six Battery Road

Six Battery Road, a 42-storey Grade A office building, is a Raffles Place landmark. Combining a prime

location with towering views, excellent amenities and newly revitalised interiors, it was the first

operating CBD office building to attain Green Mark Platinum standards.


Location 6 Battery Road

Title Leasehold estate expiring 19 April 2825


Car Park Lots 190











for December 2014 %

Standard Chartered Bank 3.9

Watson, Farley & Williams Asia Practice LLP 0.7

CBRE Pte. Ltd. 0.6




27.3%

14.9%

20.5%

6.6%

30.7%

2015 2016 2017 2018 2019 and

beyond

Property Details


One George Street

One George Street is a 23-storey Grade A office building in Raffles Place with eco-friendly features,

sky gardens, large floor plates, advanced building automation and iconic roof gardens. It houses

excellent amenities including F&B outlets, a fitness centre and a swimming pool.


Location 1 George Street

Title Leasehold estate expiring 21 January 2102

Purchase Price in 2008 (S$ million) 1,165.0

Car Park Lots 178


Valuation (S$ million) 959.0 975.0









for December 2014 %

The Royal Bank of Scotland PLC 1.7

Borouge Pte. Ltd. 1.3

Diageo Singapore Pte. Ltd. 1.0




17.3%

21.4%22.7% 22.8%

15.8%

2015 2016 2017 2018 2019 and

beyond


Raffles City Singapore

Raffles City Singapore is a prime landmark and one of Singapore’s largest integrated developments.

Served by three MRT lines, it comprises the 42-storey Raffles City Tower, Raffles City Shopping

Centre, Raffles City Convention Centre, the 73-storey Swissôtel The Stamford Singapore, the

28-storey twin-towers Fairmont Singapore and three levels of basement car parks.


Location 250 & 252 North Bridge Road,2 Stamford Road and 80 Bras Basah Road

Title Leasehold estate expiring 15 July 2078

Purchase Price in 2006 (S$ million) 2,166.0

Car Park Lots 1,045











for December 2014 %

RC Hotels (Pte) Ltd 13.8

Robinson & Company (Singapore) Private Limited 2.2

Economic Development Board 1.5

Major Usage Mix (based on building’s monthly gross rental income,excluding retail and hotel turnover rent for December 2014) %

Retail 48.7

Hotels and Convention Centre 32.1

Office 19.2


(based on building’s monthly gross rental income excluding retail and hotel turnover rent)


6.8%4.8% 6.0%

0.3%1.3%

12.3%

17.2%

9.8%

1.4%

8.0%

32.1%

2015 2016 2017 2018 2019 and

beyond

Hotels and Convention Centre

Retail

Office

Property Details


CapitaGreen

CapitaGreen is an ultra-modern 40-storey Grade A office tower that occupies the site of the former

Market Street Car Park. With a net lettable area of about 702,000 square feet, it is the only CBD office

building in Singapore’s Downtown Core that was completed in end 2014.


Location 138 Market Street

Title Leasehold estate expiring 31 March 2073

Car Park Lots 180

Joint Venture Partners (%) CapitaLand 50

CCT 40

Mitsubishi Estate Asia 10

Project Development Estimate (S$ million) 1,400

Date of TOP 18 December 2014


Valuation (S$ million) 1,526.0

Estimated Net Lettable Area (sq m) 65,298

Estimated Net Lettable Area (sq ft) 702,000

Number of Tenants 22

Committed Occupancy (%) 69.3


(based on building’s committed monthly gross rental income)


0.0% 0.0% 0.0%

90.6%

2015 2016 2017

9.4%

2018 2019 and

beyond


Twenty Anson

Twenty Anson is a 20-storey prime office building in downtown Tanjong Pagar. Served by Tanjong

Pagar MRT station and major expressways, this Green Mark Platinum development features a modern

facade, column-free floor plates, a roof garden and a café.


Location 20 Anson Road

Title Leasehold estate expiring 22 November 2106


Car Park Lots 55











for December 2014 %

Toyota Motor Asia Pacific Pte Ltd 1.2

BlackRock Advisors Singapore Pte. Ltd. 0.8

KCG Asia Pacific Pte. Ltd. 0.5




9.9%

35.5%

25.6%29.0%

0.0%

2015 2016 2017 2018 2019 and

beyond

Property Details


HSBC Building

HSBC Building is a 21-storey office tower with excellent frontage, convenient transport access and

views of Marina Bay. It houses The Hongkong and Shanghai Banking Corporation Limited (HSBC

Bank), the sole tenant who bears the building’s operating expenses including property tax while CCT

manages the insurance and structural maintenance matters. The lease to HSBC Bank will expire in

April 2019.


Location 21 Collyer Quay

Title Leasehold estate expiring 18 December 2849


Car Park Lots 55











Wilkie Edge

Wilkie Edge is a 12-storey integrated development comprising office space, retail units and a

serviced residence. Its distinctive facade features a huge LED screen that lights up the surrounding

cultural precinct. Located at the junction of Wilkie Road and Selegie Road, it is in close proximity to

Dhoby Ghaut MRT interchange station.


Location 8 Wilkie Road

Title Leasehold expiring 20 February 2105


Car Park Lots 215











for December 2014 %

SF Consulting Pte Ltd 1.3

Kaplan Learning Institute Pte. Ltd 0.9

AstraZeneca Singapore Pte Ltd 0.3




2.6%

13.8%

2.8%

17.7%

63.1%

2015 2016 2017 2018 2019 andbeyond

Property Details


Bugis Village

Bugis Village comprises 34 restored pre-war shophouses in a vibrant heritage enclave. Located next

to Bugis MRT station, the three-storey shophouses accommodate a mix of offices, music schools and

tuition centres, as well as hair salons, restaurants and retail outlets.


Location 62 to 67 Queen Street,

151 to 166 Rochor Road,

229 to 253 Victoria Street (Odd numbers only)

Title Leasehold estate expiring 30 March 20881


Car Park Lots NA











for December 2014 %

Golden Pass (S) Pte. Ltd. 0.1

Kentucky Fried Chicken Management Pte Ltd 0.1

Burger King Singapore Pte. Ltd. 0.1




22.1%16.7%

2.9% 0.0%

58.3%

2015 2016 2017 2018 2019 and

beyond

1 The leasehold title and the valuation take into account the right of the President of the Republic of Singapore, as Lessor under

the State Lease, to terminate the State Lease on 1 April 2019 upon payment of S$6,610,208.53 plus accrued interest.


Golden Shoe Car Park

The 10-storey Golden Shoe Car Park on Market Street is the largest parking facility in the CBD.

Besides offices on the top floor, it houses an array of retail and F&B outlets on the ground floor that

cater to the office crowd.


Location 50 Market Street

Title Leasehold estate expiring 31 January 2081


Car Park Lots 1,053








Car Park Income (S$ million) 6.4 6.5




for December 2014 %

May Hua Food Court Pte. Ltd. 0.2

DCA Architects Pte Ltd 0.2

KKS International (S) Pte Ltd 0.1




42.5%

27.4%

18.3%

11.8%

0.0%

2015 2016 2017 2018 2019 and

beyond

Property Details


In this Annual Report, the following definitions apply throughout unless otherwise stated:

AEI Asset enhancement initiative

CapitaLand CapitaLand Limited

CapitaLand Group CapitaLand and its subsidiaries (including the Manager)

CapitaLand Singaporeor CLS

CapitaLand Singapore Limited, a wholly-owned subsidiary ofCapitaLand

CB Convertible Bonds

CBD Central Business District

CCT CapitaCommercial Trust

CCT Group CCT and its subsidiaries

CDP The Central Depository (Pte) Limited

CIS Code Code on Collective Investment Schemes

CMS Capital Markets Services

CMBS Commercial Mortgage Backed Securities

CommittedOccupancy

Occupancy rate based on committed leases

CPI Consumer Price Index

Deposited Property Value of CCT’s total assets based on the latest valuation, including itsproportionate interest in joint ventures

Direct CapitalisationMethod

A valuation method appraisers use to estimate the value of incomeproducing real estate where the net income of the property iscapitalised for the remaining unexpired term of the lease period. Anappropriate capitalisation rate derived from the relevant sales evidence,is then applied to the net income.

Discounted CashflowMethod

A valuation method appraisers use to estimate the value of incomeproducing real estate, where net operating income is discounted at anappropriate discount rate to derive the market value. The capital valueof the property considers the 10-year discounted income stream andthe present value of its adopted terminal value.

DPU Distribution per Unit

GDP Gross Domestic Product

GFA Gross Floor Area

Gross Rental Income In respect of CCT properties, Gross Rental Income comprises base rent(after rent rebates, where applicable, including turnover rent) andtenant service charge, which is a contribution paid by tenants towardsthe Property Operating Expenses.

In respect of CCT’s 60.0% interest in RCS Trust, Gross Rental Incomecomprises gross rent (after rent rebates, where applicable, includingturnover rent, advertising and promotion levy and service charge, whereapplicable).

Gross Revenue Comprises Gross Rental Income, car park income and other income

HQ Headquarter

Interest ServiceCoverage Ratio

Ratio of earnings before interest, tax, depreciation and amortisationover interest expenses of CCT Group

kg Kilogram

kWh Kilowatt-hour

Glossary


LHS Left-hand side

Listing Manual Listing Manual of Singapore Exchange Securities Trading Limited(SGX-ST)

Management ExpenseRatio

Refers to the expenses of the Group excluding property expenses,borrowing costs and income tax expense as a percentage of weightedaverage net assets.

Manager CapitaCommercial Trust Management Limited, in its capacity asmanager of CCT

MAS Monetary Authority of Singapore

MRT Mass Rapid Transit

MTN Medium Term Note

m3 Cubic metres

NLA Net Lettable Area

NPI Net Property Income. Comprises Gross Revenue less PropertyOperating Expenses for CCT or the RCS Trust.

% Per Centum or Percentage

psf Per Square Foot

psm Per Square Metre

Property FundsAppendix

The Property Funds Appendix in Appendix 6 of the Code on CollectiveInvestment Schemes issued by the Monetary Authority of Singapore

Property Managers CapitaLand Commercial Management Pte. Ltd. and CapitaLand (RCS)Property Management Pte. Ltd.

Property OperatingExpenses

Comprises property tax, property management fee and other propertyoperating expenses (comprising utility expenses, reimbursement ofsalaries and related expenses, marketing expenses, repairs andmaintenance expenses, general and administrative expenses as well asother miscellaneous expenses)

Property Yield Net Property Income as a percentage of the asset value

q-o-q Quarter-on-Quarter

REIT Real Estate Investment Trust

RHS Right-hand side

RM or Ringgit The official currency of Malaysia

S-REITs Singapore Real Estate Investment Trusts

SFA Securities and Futures Act, Chapter 289

sq ft Square feet/foot

sq m Square metre

S$ Singapore dollars

Trust CapitaCommercial Trust or CCT

Trustee HSBC Institutional Trust Services (Singapore) Limited, as trustee of CCT

Unit A unit representing an undivided interest in CCT

Unitholder The registered holder for the time being of a Unit, including person soregistered as joint holders, except where the registered holder is CDP,the term “Unitholder” shall, in relation to Units registered in the name ofCDP, meaning where the context requires, the Depositor whoseSecurities Account with CDP is credited with Units.

y-o-y Year-on-Year

Glossary


Financial

Statements

Report of the Trustee 114

Statement by the Manager 115

Auditor’s Report 116

Statements of Financial Position 117

Statements of Total Return 118

Distribution Statements 119

Statement of Movements in Unitholder’s Funds 120

Portfolio Statements 121

Statements of Cash Flows 124

Notes to the Financial Statements 126

Additional Information 178

Statistics of Unitholdings 183


HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and

hold the assets of CapitaCommercial Trust (the “Trust”) and its subsidiaries (the “Group”) in trust for the

unitholders. In accordance with the Securities and Futures Act, Chapter 289 of Singapore, its subsidiary

legislation and the Code on Collective Investment Schemes, the Trustee shall monitor the activities of

CapitaCommercial Trust Management Limited (the “Manager”) for compliance with the limitations imposed on

the investment and borrowing powers as set out in the Trust Deed in each annual accounting period and report

thereon to unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the

period covered by these financial statements, set out on pages 117 to 177 in accordance with the limitations

imposed on the investment and borrowing powers set out in the Trust Deed.

For and on behalf of the Trustee,

HSBC Institutional Trust Services (Singapore) Limited

Anthony Wade Lewis

Director

Singapore

26 February 2015

Report of the Trustee


In the opinion of the directors of CapitaCommercial Trust Management Limited, the accompanying financial

statements set out on pages 117 to 177 comprising the Statements of Financial Position, Statements of Total

Return, Distribution Statements, Statements of Movements in Unitholders’ Funds, Portfolio Statements,

Statements of Cash Flows and Notes to the Financial Statements are drawn up so as to present fairly, in all

material respects, the financial position of CapitaCommercial Trust (the “Trust”) and its subsidiaries (the

“Group”) and of the Trust as at 31 December 2014, the total return, distributable income, movements in

unitholders’ funds and cash flows of the Group and of the Trust for the year then ended in accordance with the

recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts”

issued by the Institute of Singapore Chartered Accountants and the provisions of the Trust Deed. At the date

of this statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet its

financial obligations as and when they materialise.

For and on behalf of the Manager,

CapitaCommercial Trust Management Limited


Director

Singapore

26 February 2015

Statement by the Manager


(Constituted in the Republic of Singapore pursuant to a Trust Deed dated 6 February 2004 (as amended))

We have audited the accompanying financial statements of CapitaCommercial Trust (the “Trust”) and its

subsidiaries (the “Group”), which comprise the Statements of Financial Position and Portfolio Statements of the

Group and the Trust as at 31 December 2014, the Statements of Total Return, Distribution Statements,

Statements of Movements in Unitholders’ Funds and Statements of Cash Flows of the Group and the Trust for

the year then ended, and a summary of significant accounting policies and other explanatory information, as

set out on pages 117 to 177.

MANAGER’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements

in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting

Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants, and for such internal

control as the Manager of the Trust determines is necessary to enable the preparation of financial statements

that are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the Trust’s preparation and fair presentation of

the financial statements in order to design audit procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control. An audit also

includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

OPINION

In our opinion, the consolidated financial statements of the Group and the financial statements of the Trust

present fairly, in all material respects, the financial position of the Group and of the Trust as at 31 December

2014 and the total return, distributable income, movements in unitholders’ funds and cash flows of the Group

and of the Trust for the year then ended in accordance with the recommendations of Statement of

Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of

Singapore Chartered Accountants.

KPMG LLP

Public Accountants and

Chartered Accountants

Singapore

26 February 2015

Auditors’ Report to the Unitholders ofCapitaCommercial Trust


Group Trust2014 2013 2012 2014 2013

Note $’000 $’000 $’000 $’000 $’000(Restated) (Restated)

Non-current assets

Plant and equipment 4 1,453 1,480 774 1,440 1,467

Investment properties 5 4,882,400 4,769,000 4,639,000 4,451,400 4,338,000

Intangible asset 6 4,822 8,334 12,913 4,822 8,334

Subsidiaries 7 – – – 435,576 435,576

Joint ventures 8 1,427,895 1,283,879 1,232,934 984,933 971,471

Associate 9 63,899 65,002 66,491 51,479 51,479

Financial derivatives 15 1,160 – – 1,160 –

6,381,629 6,127,695 5,952,112 5,930,810 5,806,327

Current assets

Available-for-sale unquoted

investment 10 – 6 6 – 6

Trade and other receivables 11 38,345 33,716 36,558 37,576 31,540

Cash and cash equivalents 12 101,085 84,064 118,325 76,719 60,105

139,430 117,786 154,889 114,295 91,651

Total assets 6,521,059 6,245,481 6,107,001 6,045,105 5,897,978

Current liabilities

Trade and other payables 13 47,355 50,899 55,737 39,415 38,713

Current portion of security

deposits 11,437 11,964 9,243 10,876 9,726

Interest-bearing liabilities 14 270,000 – 50,000 270,000 –

Financial derivatives 15 – – 2,519 – –

Current tax payable 3 4 102 – –

328,795 62,867 117,601 320,291 48,439

Non-current liabilities

Non-current portion of

security deposits 28,300 26,333 22,462 23,510 23,614

Interest-bearing liabilities 14 800,972 867,049 864,521 800,972 867,049

Financial derivatives 15 40,298 25,243 10,693 40,298 25,243

Convertible bonds 16 169,206 351,276 377,071 169,206 351,276

1,038,776 1,269,901 1,274,747 1,033,986 1,267,182

Total liabilities 1,367,571 1,332,768 1,392,348 1,354,277 1,315,621

Net assets 5,153,488 4,912,713 4,714,653 4,690,828 4,582,357

Represented by:

Unitholders’ funds 5,153,488 4,912,713 4,714,653 4,690,828 4,582,357

Units in issue (’000) 17 2,944,849 2,878,774 2,842,956 2,944,849 2,878,774

$ $ $ $ $

Net asset value per Unit 1.75 1.71 1.66 1.59 1.59

The accompanying notes form an integral part of these financial statements.

Statements of Financial PositionAs at 31 December 2014


Group Trust2014 2013 2014 2013

Note $’000 $’000 $’000 $’000(Restated)

Gross revenue 18 262,608 251,463 240,289 229,730

Property operating expenses 19 (57,359) (54,342) (52,240) (49,809)

Net property income 205,249 197,121 188,049 179,921

Investment income 20 – – 87,087 84,743

Interest income 3,732 3,713 16,002 15,991

Base asset management fees 21 (4,892) (4,774) (4,892) (4,774)

Performance asset management fees 21 (8,681) (7,882) (8,681) (7,882)

Finance costs 22 (36,434) (42,560) (36,422) (42,547)

Audit fees (277) (264) (258) (244)

Amortisation of intangible asset (3,512) (4,579) (3,512) (4,579)

Trustee’s fees (620) (605) (620) (605)

Valuation fees (303) (285) (266) (246)

Other expenses 23 (1,466) (1,402) (1,464) (1,393)

Net income before share of profit of associate and

joint ventures 152,796 138,483 235,023 218,385

Share of profit (net of tax) of:

– Associate 4,745 4,355 – –

– Joint ventures 212,612 123,087 – –

Net income 370,153 265,925 235,023 218,385

Premium on repurchase of convertible bonds (2,713) – (2,713) –

Gain on disposal of available-for-sale unquoted

investment 226 – 226 –

Gain on remeasurement of financial derivatives – 2,519 – 2,519

Net increase in fair value of investment properties 81,219 106,162 83,222 106,322

Total return for the year before tax 448,885 374,606 315,758 327,226

Tax expense 24 (3) (16) – –

Total return for the year 448,882 374,590 315,758 327,226

Earnings per Unit cents cents cents cents

Basic 25 15.41 13.08 10.84 11.42

Diluted 25 15.06 12.47 10.65 10.96


Statements of Total ReturnYear ended 31 December 2014


Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Amount available for distribution to

Unitholders at 1 January 122,325 119,362 122,325 119,362

Net income before share of profit of

associate and joint ventures 152,796 138,483 235,023 218,385

Net tax and other adjustments (Note A) 9,139 13,186 10,155 15,850

Tax-exempt income distribution 4,035 1,667 4,035 –

Distribution from joint ventures 83,243 80,899 – –

249,213 234,235 249,213 234,235

Amount available for distribution to

Unitholders 371,538 353,597 371,538 353,597

Distributions to Unitholders:

Distribution of 4.08 cents per Unit for the period

from 1/7/2012 to 31/12/2012 – (116,001) – (116,001)


from 1/1/2013 to 30/6/2013 – (115,271) – (115,271)


from 1/7/2013 to 31/12/2013 (118,893) – (118,893) –


from 1/1/2014 to 30/6/2014 (123,873) – (123,873) –

(242,766) (231,272) (242,766) (231,272)

Amount available for distribution

to Unitholders at 31 December 128,772 122,325 128,772 122,325

Note A – Net tax and other adjustments comprise:

Non-tax deductible/(chargeable) items:

– Amortisation of transaction costs on

borrowings and convertible bonds 7,024 9,727 7,012 9,714

– Amortisation of lease incentives (330) 1,160 (508) 1,027

– Amortisation of intangible asset 3,512 4,579 3,512 4,579

– Asset management fees paid and

payable in Units 3,701 3,812 3,701 3,812

– Depreciation of plant and equipment 330 219 325 213

– Net profits from subsidiaries (4,356) (2,738) – –

– Trustee’s fees 620 605 620 605

– Tax-exempt income retained – – (3,422) (1,801)

Other items (1,362) (4,178) (1,085) (2,299)

Net tax and other adjustments 9,139 13,186 10,155 15,850


Distribution StatementsYear ended 31 December 2014


Group Trust2014 2013 2014 2013

Note $’000 $’000 $’000 $’000

Net assets at 1 January 4,912,713 4,714,653 4,582,357 4,430,039

Operations


Unitholders’ transactions

Creation of Units:

– Units issued in respect of RCS Trust’s asset

management fees 8,662 8,378 8,662 8,378

– Asset management fees paid in Units 3,650 3,995 3,650 3,995

– Conversion of convertible bonds 74,304 35,851 74,304 35,851

86,616 48,224 86,616 48,224

Distributions to Unitholders (242,766) (231,272) (242,766) (231,272)

Redemption and conversion of convertible bonds (37,111) – (37,120) –

Net decrease in net assets resulting from

Unitholders’ transactions (193,261) (183,048) (193,270) (183,048)

Foreign currency translation reserves

Foreign currency translation differences (2,013) (2,000) – –

Capital reserves

Repurchase, redemption and conversion of

convertible bonds 26 (17,869) (3,210) (17,869) (3,210)

Hedging reserves

Effective portion of change in fair value of

cash flow hedges 27 3,852 11,350 3,852 11,350

Share of hedging reserves of joint venture 1,184 378 – –

5,036 11,728 3,852 11,350

Net assets at 31 December 5,153,488 4,912,713 4,690,828 4,582,357


Statements of Movements in Unitholders’ FundsYear ended 31 December 2014


Group

Descriptionof Property

Tenure ofLand

Term ofLease

RemainingTerm ofLease

Location ExistingUse

Carrying Value1 Percentageof NetAssets

2014 2013 2014 2013

$’000 $’000 % %

Investment properties – Office buildings

Singapore

Six Battery Road Leasehold 999 years 810 years 6 Battery Road Commercial 1,330,000 1,285,000 25.8 26.2

Capital Tower Leasehold 99 years 80 years 168 Robinson Road Commercial 1,309,000 1,282,000 25.4 26.1

One George Street Leasehold 99 years 87 years 1 George Street Commercial 975,000 959,000 18.9 19.5

HSBC Building Leasehold 999 years 835 years 21 Collyer Quay Commercial 450,000 429,000 8.7 8.7

Twenty Anson2 Leasehold 99 years 92 years 20 Anson Road Commercial 431,000 431,000 8.4 8.8

Investment property – Car park building

Singapore

Golden ShoeCar Park

Leasehold 99 years 66 years 50 Market Street Transportfacilities

141,000 138,400 2.7 2.8

Investment properties – Other buildings

Singapore

Wilkie Edge Leasehold 99 years 90 years 8 Wilkie Road Commercial 191,000 186,000 3.7 3.8

Bugis Village Leasehold 99 years 73 years 62 to 67 QueenStreet151 to 166 RochorRoad229 to 253 (oddnumbers only)Victoria Street

Commercial 55,400 58,600 1.1 1.2

Investment properties, at valuation (Note 5) 4,882,400 4,769,000 94.7 97.1

Investment in associate (Note 9) 63,899 65,002 1.2 1.3

Investment in joint ventures (Note 8) 1,427,895 1,283,879 27.7 26.1

Other assets and liabilities (net) (1,220,706) (1,205,168) (23.6) (24.5)

Net assets 5,153,488 4,912,713 100.0 100.0

1 The carrying value of investment properties are at valuation.

2 Twenty Anson is held through CCT’s 100% interest in FirstOffice Pte. Ltd..


Portfolio StatementsAs at 31 December 2014


Trust

Description ofProperty

Tenureof Land

Term ofLease

RemainingTerm ofLease

Location ExistingUse

Carrying Value1 Percentageof NetAssets

2014 2013 2014 2013

$’000 $’000 % %

Investment properties – Office buildings

Singapore

Six Battery Road Leasehold 999 years 810 years 6 Battery Road Commercial 1,330,000 1,285,000 28.3 28.0

Capital Tower Leasehold 99 years 80 years 168 Robinson Road Commercial 1,309,000 1,282,000 27.9 28.0

One George Street Leasehold 99 years 87 years 1 George Street Commercial 975,000 959,000 20.8 20.9

HSBC Building Leasehold 999 years 835 years 21 Collyer Quay Commercial 450,000 429,000 9.6 9.4

Investment property – Car park building

Singapore

Golden ShoeCar Park

Leasehold 99 years 66 years 50 Market Street Transportfacilities

141,000 138,400 3.0 3.0

Investment properties – Other buildings

Singapore

Wilkie Edge Leasehold 99 years 90 years 8 Wilkie Road Commercial 191,000 186,000 4.1 4.1

Bugis Village Leasehold 99 years 73 years 62 to 67 QueenStreet151 to 166 RochorRoad229 to 253 (oddnumbers only)Victoria Street

Commercial 55,400 58,600 1.2 1.3

Investment properties, at valuation (Note 5) 4,451,400 4,338,000 94.9 94.7

Other assets and liabilities (net) 239,428 244,357 5.1 5.3

Net assets 4,690,828 4,582,357 100.0 100.0

1 The carrying value of investment properties are at valuation.


Portfolio StatementsAs at 31 December 2014


INVESTMENT PROPERTIES

On 31 December 2014, independent valuations of Capital Tower, Six Battery Road, HSBC Building, One George

Street, Twenty Anson, Bugis Village, Wilkie Edge and Golden Shoe Car Park were undertaken by CBRE Pte. Ltd.

(2013: Jones Lang LaSalle Property Consultants Pte. Ltd.).

The Manager believes that the independent valuers have appropriate professional qualifications and recent

experience in the location and category of the properties being valued. The valuations were based on direct

capitalisation method and discounted cash flow analysis. The valuations were performed on the same basis as

2013.

The net increase in fair value of the investment properties has been taken to the statement of total return.

Investment properties comprise mainly commercial properties that are leased to external customers. Generally,

the leases contain an initial non-cancellable period of three years. Subsequent renewals are negotiated with the

lessee. Contingent rents recognised in the Statements of Total Return of the Group and of the Trust amounted

to $512,000 (2013 (restated): $415,000) and $510,000 (2013: $413,000) respectively.


Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Cash flows from operating activities


Adjustments for:

Amortisation of intangible asset 3,512 4,579 3,512 4,579

Amortisation of lease incentives (330) 1,160 (508) 1,027

Asset management fees paid and payable in Units 3,701 3,812 3,701 3,812

Depreciation of plant and equipment 330 219 325 213

Finance costs 36,434 42,560 36,422 42,547

Foreign exchange loss 375 375 375 375

Gain on disposal of plant and equipment * * * *

Gain on disposal of available-for-sale unquoted

investment (226) – (226) –

Gain on remeasurement of financial derivatives – (2,519) – (2,519)

Interest income (3,732) (3,713) (16,002) (15,991)

Investment income – – (87,087) (84,743)

Net increase in fair value of investment properties (81,219) (106,162) (83,222) (106,322)

Premium on redemption of convertible bonds 2,713 – 2,713 –

Share of profit of associate and joint ventures (217,357) (127,442) – –

Operating income before working capital changes 193,086 187,475 175,761 170,204

Changes in working capital:

Trade and other receivables (202) 6,911 (1,432) 6,275

Trade and other payables (5,815) (5,825) (807) (1,167)

Security deposits 1,440 6,592 1,046 5,610

Cash generated from operations 188,509 195,153 174,568 180,922

Tax paid (4) (114) – (101)

Net cash from operating activities 188,505 195,039 174,568 180,821

* Less than $1,000


Statements of Cash FlowsYear ended 31 December 2014


Group Trust2014 2013 2014 2013

Note $’000 $’000 $’000 $’000(Restated)

Net cash from operating activities

brought forward 188,505 195,039 174,568 180,821

Cash flows from investing activities

Capital expenditure on investment properties (29,817) (21,370) (28,575) (21,318)

Capital redemption and return of cash by

available-for-sale unquoted investment 232 – 232 –

Distributions from associate 3,459 3,469 3,459 3,469

Distributions from joint venture 82,687 79,180 82,687 79,180

Interest income received 200 203 12,470 12,413

Loan to joint venture (4,800) – (4,800) –

Purchase of plant and equipment (259) (955) (254) (945)

Net cash from investing activities 51,702 60,527 65,219 72,799

Cash flows from financing activities

Distributions to Unitholders (242,766) (231,272) (242,766) (231,272)

Interest paid (30,673) (33,833) (30,660) (33,820)

Payment of transaction costs related to

borrowings and convertible bonds (12) (4,722) (12) (4,722)

Proceeds from interest-bearing liabilities 295,000 30,000 295,000 30,000

Repayment of interest-bearing liabilities (75,000) (50,000) (75,000) (50,000)

Repurchase and redemption of

convertible bonds (169,735) – (169,735) –

Net cash used in financing activities (223,186) (289,827) (223,173) (289,814)

Net increase/(decrease) in cash and cash

equivalents 17,021 (34,261) 16,614 (36,194)

Cash and cash equivalents at 1 January 84,064 118,325 60,105 96,299

Cash and cash equivalents at 31 December 12 101,085 84,064 76,719 60,105

Significant non-cash transactions

During the year, 8,008,559 (2013: 8,032,273) Units were issued at various unit prices in satisfaction of asset

management fees payable to the Manager, amounting to $3,650,000 (2013: $3,995,000) for the Group and

$8,662,000 (2013: $8,378,000) on behalf of RCS Trust. The Trust received units in RCS Trust (see note 8) in

settlement for the amount paid on its behalf.



These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Manager and the Trustee on 26 February 2015.

1 GENERAL

CapitaCommercial Trust (the “Trust”) is a Singapore-domiciled unit trust established pursuant to the trust

deed dated 6 February 2004 (as amended) (the “Trust Deed”) between CapitaCommercial Trust

Management Limited (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the

“Trustee”). The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee is under a

duty to take into custody and hold the assets of the Trust and its subsidiaries (the “Group”) in trust for the

holders (“Unitholders”) of Units in the Trust (the “Units”).

The Trust was formally admitted to the Official List of the Singapore Exchange Securities Trading Limited

(the “SGX-ST”) on 11 May 2004 and was included under the Central Provident Fund (“CPF”) Investment

Scheme on 11 May 2004.

The consolidated financial statements of the Trust as at and for the year ended 31 December 2014

comprise the Trust and its subsidiaries (together referred to as the ‘Group’ and individually as ‘Group

entities’) and the Group’s interest in its associate and joint ventures.

The principal activity of the Group is to invest in income producing real estate and real estate related

assets, which are used or substantially used for commercial purposes, with the primary objective of

achieving an attractive level of return from rental income and for long-term capital growth.

The Trust has entered into several service agreements in relation to management of the Trust and its

property operations. The fee structures of these services are as follows:

(i) Property management fees

Under the property management agreements, property management fees are charged at 3.00% per

annum of the net property income of the properties except for HSBC Building which is charged at

0.25% per annum of the net property income.

The property management fees are payable monthly in arrears.

(ii) Asset management fees

Pursuant to the Trust Deed, the asset management fees comprise a base component of 0.10% per

annum of the value of Deposited Property and a performance component of 5.25% per annum of

net income of the Trust for each financial year. “Deposited Property” refers to all the assets of the

Trust, including all its authorised investments for the time being held or deemed to be held upon the

trusts of the Trust Deed, except for the following investments:

(a) the investment in RCS Trust, a joint venture;

(b) the investment in MSO Trust, a joint venture; and

(c) the investment in Quill Capita Trust (“QCT”), an associate.

The Manager is entitled to receive, at the option of the Manager, the asset management fees wholly

in the form of cash, wholly in the form of Units or a combination of both. When paid in the form of

Units, the Manager shall be entitled to receive such number of Units as may be purchased with the

relevant amount of the asset management fee attributable to such period at an issue price equal to

the Market Price.

The Manager is also entitled to receive acquisition fee at the rate of 1% (or such lower percentage

as may be determined by the Manager in its absolute discretion) of the acquisition price and a

divestment fee at the rate of 0.5% (or such lower percentage as may be determined by the Manager

in its absolute discretion) of the sale price.

Notes to the Financial Statements


1 GENERAL (continued)

(iii) Trustee’s fees

Pursuant to the Trust Deed, the Trustee’s fees shall not exceed 0.10% per annum of the value of

Deposited Property (except for the investment in RCS Trust, a joint venture) (subject to a minimum

sum of $8,000 per month) payable out of the Deposited Property of the Trust. The Trustee is also

entitled to reimbursement of expenses incurred in the performance of its duties under the Trust

Deed.

The Trustee’s fees are payable quarterly in arrears.

2 BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements have been prepared in accordance with the Statement of Recommended

Accounting Practice (“RAP”) 7 “Reporting Framework for Unit Trusts” issued by the Institute of

Singapore Chartered Accountants and the applicable requirements of the Code on Collective

Investment Schemes (“CIS Code”) issued by the Monetary Authority of Singapore (“MAS”) and the

provisions of the Trust Deed. RAP 7 requires that accounting policies adopted should generally

comply with the principles relating to recognition and measurement of the Singapore Financial

Reporting Standards (“FRS”).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except as otherwise

described in the notes below.

2.3 Functional and presentation currency

These financial statements are presented in Singapore dollars, which is the Trust’s functional

currency. All financial information presented in Singapore dollars has been rounded to the nearest

thousand, unless otherwise stated.

2.4 Use of estimates and judgments

The preparation of the financial statements in conformity with RAP 7 requires management to make

judgments, estimates and assumptions that affect the application of accounting policies and the

reported amounts of assets, liabilities, income and expenses. Actual results may differ from these

estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised and in any future periods

affected.

Information about critical judgment in applying accounting policies that have the most significant

effect on the amount recognised in the financial statements is described in the following note:

• Note 2.5 – Classification of joint ventures

Information about assumptions and estimation uncertainties that have a significant risk of resulting

in a material adjustment within the next financial year is included in following notes:

• Note 5 – Valuation of investment properties

• Note 28 – Valuation of financial instruments


2 BASIS OF PREPARATION (continued)

2.4 Use of estimates and judgments (continued)

Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair

values, for both financial and non-financial assets and liabilities.

When measuring the fair value of an asset or a liability, the Group uses market observable data as

far as possible. Fair values are categorised into different levels in a fair value hierarchy based on

the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset

or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data

(unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different

levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the

same level of the fair value hierarchy as the lowest level input that is significant to the entire

measurement (with Level 3 being the lowest).

The Group recognises transfers between levels of the fair value hierarchy as of the end of the

reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the

following notes:

• Note 5 – Valuation of investment properties

• Note 28 – Valuation of financial instruments

2.5 Changes in accounting policies

Joint Arrangements

From 1 January 2014, as a result of FRS 111 Joint Arrangements, the Group has changed its

accounting policy for its interests in joint arrangements. Under FRS 111, the Group has classified

its interests in joint arrangements as either joint operations (if the Group has rights to the assets,

and obligations for the liabilities, relating to an arrangement) or joint ventures (if the Group has

rights only to the net assets of an arrangement). When making this assessment, the Group

considered the structure of the arrangements, the legal form of any separate vehicles, the

contractual terms of the arrangements and other facts and circumstances. Previously, the structure

of the arrangement was the sole basis of classification.

At 31 December 2013, the Group had investments under joint arrangements. RCS Trust and MSO

Trust were accounted for as jointly-controlled entities using the proportionate consolidation method.

The Group has re-evaluated the rights and obligations of the parties to these joint arrangements and

has determined that the parties in these joint arrangements have rights to the net assets of the joint

arrangements. Accordingly, these joint arrangements have been classified as joint ventures under

FRS 111 and are accounted for using the equity method. The amendments were applied

retrospectively.




2.5 Changes in accounting policies (continued)

Summary of quantitative impact

The quantitative impact of the above changes as follows:

Impact on Statement of Financial Position – Group

As at 1 January 2013 As at 31 December 2013

As

previously

reported

Joint

arrangements

As

restated

As

previously

reported

Joint

arrangements

As

restated

$’000 $’000 $’000 $’000 $’000 $’000

Non-current assets

Plant and equipment 898 (124) 774 1,955 (475) 1,480

Investment properties 6,380,200 (1,741,200) 4,639,000 6,579,800 (1,810,800) 4,769,000

Investment property

under construction 314,880 (314,880) – 380,025 (380,025) –

Intangible asset 12,913 – 12,913 8,334 – 8,334

Joint ventures 64,800 1,168,134 1,232,934 64,800 1,219,079 1,283,879

Associate 66,491 – 66,491 65,002 – 65,002

6,840,182 (888,070) 5,952,112 7,099,916 (972,221) 6,127,695

Current assets

Available-for-sale

unquoted investment 6 – 6 6 – 6

Inventories 327 (327) – 367 (367) –

Trade and other

receivables 22,969 13,589 36,558 14,358 19,358 33,716

Cash and cash

equivalents 139,520 (21,195) 118,325 103,593 (19,529) 84,064

162,822 (7,933) 154,889 118,324 (538) 117,786

Total assets 7,003,004 (896,003) 6,107,001 7,218,240 (972,759) 6,245,481

Current liabilities

Trade and other payables 87,139 (31,402) 55,737 97,454 (46,555) 50,899

Current portion of

security deposits 17,699 (8,456) 9,243 18,088 (6,124) 11,964

Interest-bearing liabilities 50,000 – 50,000 – – –

Financial derivatives 2,519 – 2,519 – – –

Current tax payable 102 – 102 4 – 4

157,459 (39,858) 117,601 115,546 (52,679) 62,867


Non-current portion of

security deposits 31,654 (9,192) 22,462 37,738 (11,405) 26,333

Interest-bearing liabilities 1,645,016 (780,495) 864,521 1,709,644 (842,595) 867,049

Financial derivatives 12,351 (1,658) 10,693 26,523 (1,280) 25,243

Convertible bonds 377,071 – 377,071 351,276 – 351,276

Amounts owing to joint

venture partners 64,800 (64,800) – 64,800 (64,800) –

2,130,892 (856,145) 1,274,747 2,189,981 (920,080) 1,269,901

Total liabilities 2,288,351 (896,003) 1,392,348 2,305,527 (972,759) 1,332,768

Net assets 4,714,653 – 4,714,653 4,912,713 – 4,912,713

Represented by:

Unitholders’ funds 4,714,653 – 4,714,653 4,912,713 – 4,912,713

The change in accounting policy had no impact on net asset value per unit for the current and

comparative years.




Impact on Statement of Total Return – Group

Year ended 31 December 2013

As

previously

reported

Joint

arrangements As restated

$’000 $’000 $’000

Gross revenue 386,936 (135,473) 251,463

Property operating expenses (90,400) 36,058 (54,342)

Net property income 296,536 (99,415) 197,121

Interest income 2,340 1,373 3,713

Base asset management fees (9,596) 4,822 (4,774)

Performance asset management fees (11,867) 3,985 (7,882)

Finance costs (61,462) 18,902 (42,560)

Audit fees (318) 54 (264)

Amortisation of intangible asset (4,579) – (4,579)

Trustee’s fees (829) 224 (605)

Valuation fees (420) 135 (285)

Other expenses (1,442) 40 (1,402)

Net income before share of profit of

associate and joint venture 208,363 (69,880) 138,483

Share of profit (net of tax) of:

– Associate 4,355 – 4,355

– Joint ventures – 123,087 123,087

Net income 212,718 53,207 265,925

Gain on remeasurement of financial derivatives 2,519 – 2,519

Net increase in fair value of investment

properties 159,371 (53,209) 106,162

Total return for the year before tax 374,608 (2) 374,606

Tax expense (18) 2 (16)

Total return for the year 374,590 – 374,590

The change in accounting policy had no impact on earnings per unit for the current and

comparative years.





Impact on Distribution Statement – Group


As

previously

reported

Joint


$’000 $’000 $’000

Amount available for distribution to Unitholders

at beginning of the year 119,362 – 119,362

Net income before share of profit of associate

and joint ventures 208,363 (69,880) 138,483

Net tax and other adjustments (Note A) 24,205 (11,019) 13,186

Tax-exempt income distribution 1,667 – 1,667

Distribution from joint venture – 80,899 80,899

234,235 – 234,235

Amount available for distribution to Unitholders 353,597 – 353,597

Distributions to Unitholders:

Distribution of 4.08 cents per unit for period

from 01/07/2012 to 31/12/2012 (116,001) – (116,001)

Distribution of 4.01 cents per unit for period

from 01/01/2013 to 30/06/2013 (115,271) – (115,271)

(231,272) – (231,272)

Amount available for distribution to Unitholders

at end of the year 122,325 – 122,325

Note A – Net tax and other adjustments comprise:

As

previously

reported

Joint


$’000 $’000 $’000

Non-tax deductible/(chargeable) items:

– Amortisation of transaction costs on

borrowings and convertible bonds 11,564 (1,837) 9,727

– Amortisation of lease incentives 1,160 – 1,160

– Amortisation of intangible asset 4,579 – 4,579

– Asset management fees paid and payable in

Units 12,260 (8,448) 3,812

– Depreciation of plant and equipment 273 (54) 219

– Net profits from subsidiaries (2,738) – (2,738)

– Trustee’s fees 829 (224) 605

Other items (3,722) (456) (4,178)

Net tax and other adjustments 24,205 (11,019) 13,186




Impact on Statement of Cash Flows – Group


As

previously

reported

Joint


$’000 $’000 $’000

Net cash from operating activities 297,976 (102,937) 195,039

Net cash (used in)/from investing activities (79,455) 139,982 60,527

Net cash used in financing activities (254,448) (35,379) (289,827)

Disclosure of interests in other entities

From 1 January 2014, as a result of FRS 112 Disclosure of Interests in Other Entities, the Group has

expanded its disclosures about its interests in subsidiaries (see note 7), joint ventures (see note 8)

and associate (see note 9).

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these

financial statements, and have been applied consistently by Group entities, except as explained in note

2.5, which addresses changes in accounting policies.

3.1 Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed

to, or has rights to, variable returns from its involvement with the entity and has the ability to affect

those returns through its power over the entity. The financial statements of subsidiaries are included

in the consolidated financial statements from the date that control commences until the date that

control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the

policies adopted by the Group.

Investments in associate and joint ventures

An associate is an entity in which the Group has a significant influence, but not control, over the

financial and operating policies. Significance influence is presumed to exist when the Group holds

20% or more of the voting power of another entity. A joint venture is an arrangement in which the

Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather

than rights to its assets and obligations for its liabilities.

Investments in an associate and joint ventures are accounted for using the equity method. They are

recognised initially at cost, which includes transactions costs. Subsequent to initial recognition, the

consolidated financial statements include the Group’s share of profit or loss and other

comprehensive income of equity-accounted investees, after adjustments to align the accounting

policies with those of the Group, from the date that significant influence or joint control commences

until the date that significant influence or joint control ceases.

When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying

amount of that investment, together with any long-term interests that form part thereof, is reduced

to zero, and the recognition of further losses is discontinued except to the extent that the Group has

an obligation to fund the investee’s operations or has made payments on behalf of the investee.



3 SIGNIFICANT ACCOUNTING POLICIES (continued)

3.1 Basis of consolidation (continued)

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from

intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with the associate and joint ventures are eliminated

against the investment to the extent of the Group’s interest in the investee. Unrealised losses are

eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of

impairment.

Accounting for subsidiaries, associate and joint ventures by the Trust

Investments in subsidiaries, associate and joint ventures are stated in the Trust’s statement of

financial position at cost less accumulated impairment losses.

3.2 Plant and equipment

Recognition and measurement

Items of plant and equipment are measured at cost less accumulated depreciation and

accumulated impairment losses. Cost includes expenditure that is directly attributable to the

acquisition of the asset.

When parts of an item of plant and equipment have different useful lives, they are accounted for as

separate items (major components) of plant and equipment.

The gain or loss on the disposal of an item of plant and equipment is determined as the difference

between the proceeds from disposal and the carrying amount of the item, and is recognised net

within other expenses in the statement of total return on the date of disposal.

Subsequent costs

The cost of replacing a component of an item of plant and equipment is recognised in the carrying

amount of the item if it is probable that the future economic benefits embodied within the component

will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced

component is derecognised. The costs of the day-to-day servicing of plant and equipment are

recognised in the statement of total return as incurred.

Depreciation

Items of plant and equipment are depreciated on a straight-line basis in the statement of total return

over the estimated useful lives of each component.

The estimated useful lives for the current and comparative years of significant items of plant and

equipment are as follows:

• Furniture, fittings and equipment 2 to 5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and

adjusted if appropriate.

3.3 Investment properties

Investment properties are properties held either to earn rental income or for capital appreciation or

for both, but not for sale in the ordinary course of business, use in the production or supply of goods

or services or for administrative purposes. Investment properties are measured at cost on initial

recognition and subsequently at fair value with any change therein recognised in the statement of

total return.

Cost includes expenditure that is directly attributable to the acquisition of the investment, which

includes transaction costs.



3.3 Investment properties (continued)

Fair value is determined in accordance with the Trust Deed, which requires investment properties

to be valued by independent registered valuers at least once a year in accordance with the CIS

Code issued by MAS.

Any gain or loss on disposal of an investment property is recognised in the statement of total return.

Investment properties are not depreciated. The properties are subject to continued maintenance

and regularly revalued on the basis set out above.

3.4 Intangible asset

Intangible asset acquired by the Group and the Trust is measured at cost less accumulated

amortisation and accumulated impairment losses.

Amortisation is calculated based on the cost of the asset and recognised in the Statements of Total

Return on a systematic basis over the estimated useful life for the current and comparative years

of 42 months. Intangible asset is tested for impairment as described in Note 3.7.

3.5 Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group

entities at the exchange rates at the date of the transactions. Monetary assets and liabilities

denominated in foreign currencies at the reporting date are retranslated to the functional currency

at the exchange rate at that date. The foreign currency gain or loss on monetary items is the

difference between amortised cost in the functional currency at the beginning of the year, adjusted

for effective interest and payments during the year, and the amortised cost in foreign currency

translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair

value are retranslated to the functional currency at the exchange rate at the date that the fair value

was determined. Non-monetary items in a foreign currency that are measured in terms of historical

cost are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognised in the statement of total return,

except for differences arising on the retranslation of monetary items that in substance form part of

the Group’s net investment in a foreign operation and available-for-sale equity instruments.

Foreign operations

The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates

at the end of the reporting period. The income and expenses of foreign operations are translated

to Singapore dollars at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in the foreign currency translation reserve. When a

foreign operation is disposed of, in part or in full, the relevant proportion of the cumulative amount

in the foreign exchange translation reserve is reclassified to the statement of total return as part of

the gain or loss on disposal.




3.6 Financial instruments

Derivative financial instruments, including hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk

exposures. Embedded derivatives are separated from the host contract and accounted for

separately if the economic characteristics and risks of the host contract and the embedded

derivative are not closely related, a separate instrument with the same terms as the embedded

derivative would meet the definition of a derivative, and the combined instrument is not measured

at fair value through the statement of total return.

On initial designation of the derivative as a hedging instrument, the Group formally documents the

relationship between the hedging instrument and hedged item, including the risk management

objectives and strategy in undertaking the hedge transaction and the hedged risk, together with the

methods that will be used to assess the effectiveness of the hedging relationship. The Group makes

an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of

whether the hedging instruments are expected to be “highly effective” in offsetting the changes in

the fair value or cash flows of the respective hedged items attributable to the hedged risk, and

whether the actual results of each hedge are within a range of 80% – 125%. For a cash flow hedge

of a forecast transaction, the transaction should be highly probable to occur and should present an

exposure to variations in cash flows that ultimately could affect the reported statement of total

return.

Derivative financial instruments are recognised initially at fair value; attributable transaction costs

are recognised in the statement of total return as incurred. Subsequent to initial recognition,

derivative financial instruments are measured at fair value, and changes therein are accounted for

as described below.

Cash flow hedge

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows

attributable to a particular risk associated with a recognised asset or liability or a highly probable

forecast transaction that could affect the statement of total return, the effective portion of changes

in the fair value of the derivative is recognised in other comprehensive income and presented in the

hedging reserve in Unitholders’ funds. Any ineffective portion of changes in the fair value of the

derivative is recognised immediately in the statement of total return.

When the hedged item is a non-financial asset, the amount accumulated in the hedging reserve is

reclassified to the statement of total return in the same period or periods during which the

non-financial item affects the statement of total return. In other cases as well, the amount

accumulated in the hedging reserve is reclassified to the statement of total return in the same

period that the hedged item affects the statement of total return. If the hedging instrument no longer

meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or the

designation is revoked, then hedge accounting is discontinued prospectively. If the forecast

transaction is no longer expected to occur, then the balance in the hedging reserve is reclassified

to the statement of total return.

Separable embedded derivatives

Changes in the fair value of separable embedded derivatives are recognised immediately in the

statement of total return.

Other non-trading derivatives

When a derivative financial instrument is not held for trading, and is not designated in a hedge

relationship that qualifies for hedge accounting, all changes in its fair value are recognised

immediately in the statement of total return.



3.6 Financial instruments (continued)

Non-derivative financial instruments

The Group initially recognises loans and receivables, deposits and convertible bonds issued on the

date that they are originated. All other financial instruments are recognised initially on the trade

date, which is the date that the Group becomes a party to the contractual provisions of the

instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the

asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in

a transaction in which substantially all the risks and rewards of ownership of the financial asset are

transferred. Any interest in transferred financial assets that is created or retained by the Group is

recognised as a separate asset or liability.

The Group derecognises a financial liability when its contractual obligations are discharged,

cancelled or expired.

Financial assets and liabilities are offset and the net amount presented in the statement of financial

position when, and only when, the Group has a legal right to offset the amounts and intends either

to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group classifies non-derivative financial instruments into the following categories: loans and

receivables, available-for-sale financial assets and other financial liabilities.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted

in an active market. Such assets are recognised on the date that they are originated at fair value

plus any directly attributable transaction costs. Subsequent to initial recognition, loans and

receivables are measured at amortised cost using the effective interest method, less any

impairment losses.

Loans and receivables comprise trade and other receivables and cash and cash equivalents.

Cash and cash equivalents comprise cash balances and short-term bank deposits with maturities

of three months or less from the acquisition date that are subject to an insignificant risk of changes

in their fair value, and are used by the Group in the management of its short-term commitments.

Available-for-sale financial assets

The Group’s investments in certain equity securities are classified as available-for-sale financial

assets if they are not classified in any of the above categories of financial assets. Available-for-sale

financial assets are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, they are measured at fair value and changes therein, other than

impairment losses, and foreign currency differences on available-for-sale debt instruments, are

recognised directly in Unitholders’ funds. When an investment is derecognised, the gain or loss

accumulated in Unitholders’ funds is reclassified to the statement of total return. Available-for-sale

financial assets which are unquoted and where the fair value cannot be measured reliably, are

stated at cost.




3.6 Financial instruments (continued)

Other financial liabilities

Other financial liabilities comprise trade and other payables, security deposits and interest-bearing

liabilities.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction

costs. Subsequent to initial recognition, other non-derivative financial instruments are measured at

amortised cost using the effective interest method.

Convertible bonds accounted for as compound financial instruments

Convertible bonds that can be converted into units at the option of the holder where the number of

units to be issued does not vary with changes in the fair value of the bonds are accounted for as

compound financial instruments.

The liability component of the convertible bonds is recognised initially at the fair value of a similar

liability that does not have an equity conversion option. The equity component is recognised initially

at the difference between the fair value of the compound financial instrument as a whole and the fair

value of the liability component. Any directly attributable transaction costs are allocated to the

liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of convertible bonds is measured at

amortised cost using the effective interest method. The equity component of convertible bonds is

not remeasured subsequent to initial recognition. When the conversion option is exercised or

lapsed, its carrying amount will be transferred to unitholders’ funds. No gain or loss is recognised

on conversion.

When a convertible bond is being redeemed before its maturity date, the purchase consideration

(including directly attributable costs, net of tax effects) are allocated to the liability and equity

components of the instrument at the date of redemption. Any resulting gain or loss relating to the

liability component is recognised in the statement of total return. The remaining purchase

consideration is recognised in unitholders’ funds.

3.7 Impairment

Non-derivative financial assets

A financial asset not classified at fair value through the statement of total return, including interest

in an associate and jointly controlled entities, is assessed at each reporting date to determine

whether there is objective evidence that it is impaired. A financial asset is impaired if objective

evidence indicates that a loss event(s) has occurred after the initial recognition of the asset, and

that loss event(s) has an impact on the estimated future cash flows of that asset that can be

estimated reliably.

The Group considers evidence of impairment for loans and receivables at both a specific asset and

collective level. All individually significant loans and receivables are assessed for specific

impairment. The individually significant receivables found not to be specifically impaired are then

collectively assessed for any impairment that has been incurred but not yet identified. Loans and

receivables that are not individually significant are collectively assessed for impairment by

grouping together assets with similar risk characteristics.



3.7 Impairment (continued)

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the

difference between its carrying amount and the present value of the estimated future cash flows

discounted at the asset’s original effective interest rate. Losses are recognised in the statement of

total return and reflected in an allowance account against loans and receivables. Interest on the

impaired asset continues to be recognised. When the Group considers that there are no realistic

prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment

loss subsequently decreases and the decrease can be related objectively to an event occurring

after the impairment was recognised, then the previously recognised impairment loss is reversed

through statement of total return.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than investment properties, are

reviewed at each reporting date to determine whether there is any indication of impairment. If any

such indication exists, then the assets’ recoverable amounts are estimated.

An impairment loss is recognised in the statement of total return if the carrying amount of an asset

or cash-generating unit (“CGU”) exceeds its estimated recoverable amount. A CGU is the smallest

identifiable asset group that generates cash flows from continuing use that are largely independent

from other assets or CGUs. Impairment losses are recognised in the statement of total return unless

it reverses a previous revaluation, credited to Unitholders’ funds, in which case it is charged to

Unitholders’ funds.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less

costs to sell. In assessing value in use, the estimated future cash flows are discounted to their

present value using a pre-tax discount rate that reflects current market assessments of the time

value of money and the risks specific to the asset or CGU.

Impairment losses recognised in prior periods are assessed at each reporting date for any

indications that the loss has decreased or no longer exists. An impairment loss is reversed if there

has been a change in the estimates used to determine the recoverable amount. An impairment loss

is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount

that would have been determined, net of depreciation or amortisation, if no impairment loss had

been recognised.

3.8 Unitholders’ funds

Unitholders’ funds are classified as equity. Incremental costs directly attributable to the issue of

Units are recognised as a deduction from equity.

3.9 Revenue recognition

Rental income from operating leases

Rental income from operating leases is recognised as revenue in the statement of total return on a

straight-line basis over the term of the lease, except where an alternative basis is more

representative of the pattern of benefits to be derived from the leased assets. Lease incentives

granted are recognised as an integral part of the total rental income, over the term of the lease.

Contingent rentals, which include gross turnover rental, are recognised as income in the accounting

period on a receipt basis. No contingent rentals are recognised if there are uncertainties due to the

possible return of amounts received.

Car park income

Car park income is recognised in the statement of total return on a receipt basis.




3.9 Revenue recognition (continued)

Interest income

Interest income is recognised in the statement of total return as it accrues, using the effective

interest method.

Investment income

Investment income is recognised in the statement of total return on the date that the Group’s right

to receive payment is established.

3.10 Government grants

Grants that compensate the Group for expenses incurred are recognised in the statement of total

return as other income on a systematic basis in the periods in which the expenses are recognised.

3.11 Expenses

Property operating expenses

Property operating expenses consist of property tax, utilities, maintenance, property management

reimbursements, property management fees using the applicable formula stipulated in Note 1(i) for

the Trust, marketing expenses and other property outgoings in relation to investment properties

where such expenses are the responsibility of the Group.

Property operating expenses are recognised on an accrual basis.

Asset management fees

Asset management fees are recognised on an accrual basis using the applicable formula stipulated

in Note 1(ii).

Trustee’s fees

The Trustee’s fees are recognised on an accrual basis using the applicable formula stipulated in

Note 1(iii).

3.12 Tax

Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the

statement of total return except to the extent that it relates to a business combination, or items

recognised directly in Unitholders’ funds, in which case it is recognised in Unitholders’ funds.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted

or substantively enacted at the reporting date, and any adjustment to tax payable in respect of

previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not

a business combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries and joint ventures to the extent

that it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.



3.12 Tax (continued)

The measurement of deferred taxes reflects the tax consequences that would follow the manner in

which the Group expects, at the end of the reporting period, to recover or settle the carrying amount

of its assets and liabilities. For investment property that is measured at fair value, the presumption

that the carrying amount of the investment property will be recovered through sale has not been

rebutted. Deferred tax is measured at the tax rates that are expected to be applied to temporary

differences when they reverse, using tax rates enacted or substantively enacted at the reporting

date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax

liabilities and assets, and they relate to income taxes levied by the same tax authority on the same

taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets

on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be

available against which the temporary difference can be utilised. Deferred tax assets are reviewed

at each reporting date and are reduced to the extent that it is no longer probable that the related

tax benefit will be realised.

In the ordinary course of business, there are many transactions and calculations for which the

ultimate tax treatment is uncertain. Therefore, the Group recognises tax liabilities based on

estimates of whether additional taxes and interest will be due. These tax liabilities are recognised

when the Group believes that certain positions may not be fully sustained upon review by tax

authorities, despite the Group’s belief that its tax return positions are supportable. The Group

believes that its accruals for tax liabilities are adequate for all open tax years based on its

assessment of many factors including interpretations of tax law and prior experience. This

assessment relies on estimates and assumptions and may involve a series of multifaceted

judgments about future events. New information may become available that causes the Group to

change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities

will impact tax expense in the period that such a determination is made.

The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the taxation of the

Trust for income earned and expenditure incurred after its listing on the SGX-ST. Subject to meeting

the terms and conditions of the tax ruling, which includes a distribution of at least 90% of the taxable

income of the Trust, the Trust will not be taxed on the portion of taxable income of the Trust that is

distributed to Unitholders. Any portion of the taxable income that is not distributed to Unitholders

will be taxed on the Trust. In the event that there are subsequent adjustments to the taxable income

when the actual taxable income of the Trust is finally agreed with IRAS, such adjustments are taken

up as an adjustment to the taxable income for the next distribution following the agreement with

IRAS.

Individuals and Qualifying Unitholders are entitled to receive taxable income distributions at gross

from the Trust. For other types of Unitholders (other than foreign non-individual Unitholders), the

Trust is required to withhold tax at the prevailing corporate tax rate (currently 17%) on the taxable

income distributions made by the Trust. Such Unitholders are subject to tax on the regrossed

amounts of the distributions received but may claim a credit for the tax deducted at source at the

prevailing corporate tax rate (currently 17%) by the Trust. Qualifying foreign non-individual

Unitholders are entitled to receive taxable income distributions net of withholding tax at a reduced

rate of 10% for distributions made on or before 31 March 2020.




3.12 Tax (continued)

A Qualifying Unitholder is a Unitholder who is

(a) a Singapore-incorporated company which is tax resident in Singapore;

(b) a body of persons, other than a company or a partnership, registered or constituted in

Singapore (for example, a town council, a statutory board, a registered charity, a registered

co-operative society, a registered trade union, a management corporation, a club and a trade

and industry association);

(c) a Singapore branch of a foreign company which has been presented a letter of approval from

the Comptroller of Income Tax granting waiver from tax deduction at source in respect of

distributions from the Trust;

(d) an agent bank or a Supplementary Retirement Scheme (“SRS”) operator acting as nominee for

individuals who have purchased Units within the Central Provident Fund Investment Scheme

(“CPFIS”) or the SRS respectively; or

(e) a nominee who can demonstrate that the Units are held for beneficial owners who are

individuals or who fall within the classes of Unitholders listed in (a) to (c) above.

The Trust has a distribution policy where it is required to distribute at least 90% of its taxable

income, other than gains from the sale of real estate properties that are determined by IRAS to be

trading gains. For the taxable income that is not distributed, referred to as retained taxable income,

tax will be assessed on the Trust. Where such retained taxable income is subsequently distributed,

the Trust need not deduct tax at source.

3.13 Finance costs

Finance costs comprise interest expense on borrowings and convertible bonds, amortisation of

borrowings and convertible bonds related transaction costs and accretion of convertible bonds

interest that are recognised in the statement of total return using the effective interest method over

the period of borrowings and the convertible bonds.

3.14 Earnings per unit

The Group presents basic and diluted earnings per unit (“EPU”) data for its units. Basic EPU is

calculated by dividing the total return attributable to Unitholders of the Trust by the weighted

average number of units outstanding during the period. Diluted EPU is determined by adjusting the

total return attributable to Unitholders and the weighted average number of units outstanding for the

effects of all dilutive potential units.

3.15 Segment reporting

An operating segment is a component of the Group that engages in business activities from which

it may earn revenues and incur expenses, including revenues and expenses that relate to

transactions with any of the Group’s other components. All operating segments’ operating results

are reviewed regularly by the Chief Executive Officer and Board of Directors of the Manager (the

Group’s “Chief Operating Decision Makers” or “CODMs”) to make decisions about resources to be

allocated to the segment and to assess its performance, and for which discrete financial information

is available.



3.15 Segment reporting (continued)

Segment results that are reported to the Group’s CODMs include items directly attributable to a

segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise

mainly income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire items of plant and

equipment and investment properties.

3.16 New standards, interpretations and revised recommended accounting practice not yet

adopted

A number of new standards, amendments to standards and interpretations are effective for annual

periods beginning after 1 January 2014, and have not been applied in preparing these financial

statements. None of these are expected to have a significant effect on the financial statements of

the Group and the Trust. The Group does not plan to adopt these standards early.

4 PLANT AND EQUIPMENT

Furniture, fittingsand equipment

2014 2013$’000 $’000

Group (Restated)

Cost

At 1 January 2,327 2,059

Additions 287 925

Disposals/write-off (117) (657)

At 31 December 2,497 2,327

Accumulated depreciation

At 1 January 847 1,285

Charge for the year 330 219


At 31 December 1,044 847

Carrying amounts

At 1 January 1,480 774

At 31 December 1,453 1,480



4 PLANT AND EQUIPMENT (continued)

Furniture, fittingsand equipment

2014 2013Trust $’000 $’000

Cost

At 1 January 2,307 2,040

Additions 282 924


At 31 December 2,472 2,307

Accumulated depreciation

At 1 January 840 1,284

Charge for the year 325 213


At 31 December 1,032 840

Carrying amounts

At 1 January 1,467 756

At 31 December 1,440 1,467

5 INVESTMENT PROPERTIES

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

At 1 January 4,769,000 4,639,000 4,338,000 4,208,000

Capital expenditure 32,181 23,838 30,178 23,678

Net increase in fair value recognised

in statement of total return 81,219 106,162 83,222 106,322

At 31 December 4,882,400 4,769,000 4,451,400 4,338,000

As at 31 December 2014 and 31 December 2013, all investment properties held by the Group and Trust

are unencumbered.

Investment properties are stated at fair value based on valuations performed by independent professional

valuers. In determining the fair value, the valuations are prepared by considering the estimated rental

value of the property by applying the appropriate valuation methods i.e. the capitalisation method and

discounted cashflow method.


5 INVESTMENT PROPERTIES (continued)

The capitalisation approach is an investment approach whereby the estimated gross passing income (on

both a passing and market rent basis) is adjusted to reflect anticipated operating costs and ongoing

vacancy to produce a net income on a fully leased basis. The adopted fully leased net income is

capitalised over the remaining term of the land lease from the valuation date at an appropriate

capitalisation rate. The discounted cash flow method involves the estimation and projection of a net

income stream over a period and discounting the net income stream with an internal rate of return to arrive

at the market value.

In determining the fair values of investment properties, the valuers have used the above valuation methods

which involve certain estimates. The Manager reviews the key valuation parameters and underlying data

including market-corroborated capitalisation rates and discount rates adopted by the valuers and is of the

view that the estimates are reflective of the current market conditions as at the reporting date.

6 INTANGIBLE ASSET

Group and Trust2014 2013$’000 $’000

Cost

At 1 January and 31 December 17,100 17,100

Accumulated amortisation

At 1 January 8,766 4,187

Amortisation for the year 3,512 4,579

At 31 December 12,278 8,766

Carrying amounts

At 1 January 8,334 12,913

At 31 December 4,822 8,334

Intangible asset represents the unamortised yield stabilization sum received by the Group under the Deed

of Yield Stabilization dated 22 March 2012 in relation to Twenty Anson (see Note 18).

7 SUBSIDIARIES

Trust2014 2013$’000 $’000

Unquoted equity investments at cost 167,657 167,657

Loan to a subsidiary 267,919 267,919

435,576 435,576

The loan to a subsidiary is unsecured, bears an effective interest rate of 4.6% (2013: 4.6%) per annum and

not repayable within 12 months.



7 SUBSIDIARIES (continued)

Details of the subsidiaries are as follows:

Name of subsidiariesPlace of

incorporation/business

Effective equity interestheld by the Trust

2014 2013% %

CCT MTN Pte. Ltd. (“CCT MTN”)1 Singapore 100 100

FirstOffice Pte. Ltd. (“FOPL”)1 Singapore 100 100

1 Audited by KPMG LLP Singapore

8 JOINT VENTURES

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Investments in joint ventures 1,315,095 1,175,879 872,133 863,471

Loan to joint venture 112,800 108,000 112,800 108,000

1,427,895 1,283,879 984,933 971,471

The loan to joint venture is unsecured, bears an effective interest rate of 3.12% (2013: 3.25%) per annum

and not repayable within 12 months.

Details of the joint ventures are as follows:

Name of joint ventures

Place ofconstitution/

business

Effective equity interestheld by the Trust2014 2013

% %

RCS Trust1 Singapore 60 60

MSO Trust1 Singapore 40 40

1 Audited by KPMG LLP Singapore


8 JOINT VENTURES (continued)

RCS Trust

RCS Trust is an unlisted special purpose trust constituted under a trust deed (“RCS Trust Trust Deed”)

dated 18 July 2006 entered into between HSBC Institutional Trust Services (Singapore) Limited as

trustee-manager of RCS Trust (“RCS Trust Trustee-Manager”), HSBC Institutional Trust Services

(Singapore) Limited as trustee of CapitaMall Trust (“CMT”), the Trustee, CapitaMall Trust Management

Limited as Manager of CMT, and the Manager. RCS Trust is 60% owned by the Trust and 40% owned by

CMT.

MSO Trust

MSO Trust is an unlisted special purpose trust constituted under a trust deed (“MSO Trust Trust Deed”)

dated 15 June 2011 entered between Market Street Office Trustee Pte. Ltd. as trustee-manager of MSO

Trust (“MSO Trust Trustee-Manager”), the Trustee and the Manager.

On 13 July 2011, the Trustee and the Manager entered into a joint venture agreement with CapitaLand

Singapore Limited (“CLS”) and Mitsubishi Estate Asia Pte. Ltd. (“MEA”). Under the agreement, the Trust,

CLS and MEA own 40%, 50% and 10% equity interest respectively in MSO Trust.

The following table summarises the financial information of joint ventures, based on the financial

statements prepared in accordance with FRS, modified for fair value adjustments on acquisition, not

adjusted for the percentage ownership held by the Group, were as follows:

2014 2013RCS Trust MSO Trust RCS Trust MSO Trust

$’000 $’000 $’000 $’000

Results

Gross revenue 232,493 – 225,788 –

Expensesa (112,003) (3,032) (108,321) (1,504)

Net increase in fair value of investment

property and investment property under

construction 73,928 242,935 87,950 1,097

Total return for the year 194,418 239,903 205,417 (407)

Assets and liabilities

Non-current assets 3,110,389 1,533,316 3,018,792 950,062

Current assetsb 16,590 23,617 14,472 40,114

Total assets 3,126,979 1,556,933 3,033,264 990,176

Current liabilitiesc 81,574 977,856 82,338 68,667

Non-current liabilitiesd 1,044,089 293,315 1,019,738 878,594

Total liabilities 1,125,663 1,271,171 1,102,076 947,261

Net assets 2,001,316 285,762 1,931,188 42,915



8 JOINT VENTURES (continued)

2014 2013RCS Trust MSO Trust RCS Trust MSO Trust

$’000 $’000 $’000 $’000

Group’s interest in net assets of

investee at 1 January 1,158,713 17,166 1,107,984 16,950

Increase in investment in joint venture with

no change in effective intereste 8,662 – 8,378 –

Share of total return for the year 116,651 95,961 123,250 (163)

Share of hedging reserves for the year – 1,184 – 379

Distributions received and receivable

during the year (83,236) (6) (80,899) –

Carrying amount of interest in investee

at 31 December 1,200,790 114,305 1,158,713 17,166

Group’s share of joint ventures’ capital

commitment 15,660 – 29,280 249,717

a Includes:

– depreciation of $114,000 (2013: $91,000) for RCS Trust;

– interest expense of $31,097,000 (2013: $30,781,000) and $906,000 (2013: Nil) for RCS Trust

and MSO Trust respectively; and

– tax credit of $4,000 (2013: tax expense of $4,000) for MSO Trust.

b Includes cash and cash equivalents of $9,163,000 (2013: $6,447,000) and $21,089,000 (2013:

$39,152,000) for RCS Trust and MSO Trust respectively.

c Includes current financial liabilities (excluding trade and other payables and provisions) of

$816,996,000 (2013: Nil) for MSO Trust.

d Includes non-current financial liabilities (excluding trade and other payables and provisions) of

$1,026,209,000 (2013: $1,000,730,000) and $282,240,000 (2013: $878,594,000) for RCS Trust and

MSO Trust respectively.

e Increase in investment by way of issuance of units in RCS Trust.

The Trust is committed to incur capital commitment of $340.0 million (2013: $340.0 million) in MSO Trust,

of which an amount up to $317.6 million (2013: $317.6 million) will be provided by unitholder’s loan to be

drawn down in multiple tranches progressively over time based on the needs of MSO Trust. As at 31

December 2014, the Trust had provided a total of $135.2 million (2013: $130.4 million) to MSO Trust

comprising $22.4 million (2013: $22.4 million) as equity and $112.8 million (2013: $108.0 million) as

unitholder’s loan.

The Trust has also provided undertakings on cost overrun, interest shortfall, security margin and project

completion, in respect of the $890.0 million (CCT’s 40% interest is $356.0 million) bank facility granted to

MSO Trust. As at 31 December 2014, the amount outstanding under the bank facility was $820.0 million

(2013: $610.0 million) (CCT’s 40% interest is $328.0 million (2013: $244.0 million).


9 ASSOCIATE

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

Investment in associate 63,899 65,002 58,850 58,850

Accumulated impairment loss – – (7,371) (7,371)

63,899 65,002 51,479 51,479

Details of the associate are as follows:

Name of associate

Place ofconstitution/

business

Effective equity interestheld by the Trust2014 2013

% %

Quill Capita Trust (“QCT”)1 Malaysia 30 30

1 Audited by Ernst & Young Malaysia.

QCT is a real estate investment trust constituted in Malaysia by a trust deed dated 9 October 2006 and

has its place of business in Malaysia. The principal activity of QCT is to own and invest in commercial

properties, primarily in Malaysia.

As the results of QCT are not expected to be announced in sufficient time to be included in the Group’s

results for the same calendar year end, the Group has equity accounted for the results of QCT based on

a 3-month lag time. Consequently as at 31 December 2014 (2013: 31 December 2013), equity accounting

was based on the results for the year ended 30 September 2014 (2013: 30 September 2013), adjusted for

significant transactions and events occurring up to the reporting date of the Group.

The fair value of the Group’s equity interest in QCT, based on the quoted market price at 31 December

2014 is $51,410,000 (RM136,937,000) (2013: $53,652,000 (RM138,107,000)).

During the year, the Trust assessed the recoverable amount of its investment in QCT. The carrying amountapproximates the fair value and no adjustment was made to the carrying amount of the investment in QCTas at 31 December 2014.

The summary financial information of the associate, not adjusted for the percentage of ownership held bythe Group, is as follows:

Associate2014 2013$’000 $’000

Results

Gross revenue 26,912 27,308

Total return for the year 15,815 14,517

Assets and liabilities

Total assets 320,278 328,225

Total liabilities 120,325 124,535



9 ASSOCIATE (continued)

Associate2014 2013$’000 $’000

Group’s interest in net assets of investee at 1 January 65,002 66,491

Share of total return for the year 4,745 4,355

Foreign currency translation reserves (2,013) (2,000)

Distributions received during the year (3,835) (3,844)

Carrying amount of interest in investee at 31 December 63,899 65,002

10 AVAILABLE-FOR-SALE UNQUOTED INVESTMENT

Available-for-sale unquoted investment represents the Group’s and Trust’s 7.4% interest in the MalaysiaCommercial Development Fund Pte. Ltd. (“MCDF”) as at 31 December 2013. MCDF had returned all itscapital and distributed its surplus assets in cash to CCT in 2014. MCDF had been liquidated on 15December 2014.

11 TRADE AND OTHER RECEIVABLES

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Trade receivables 361 610 332 550

Investment income receivable

from joint venture 21,896 21,329 21,896 21,329

Interest receivable from joint venture 10,672 7,155 10,672 7,155

Interest receivable from subsidiary – – 338 338

Amount due from related parties (trade) 4 – 4 –

Deposits 245 247 49 52

Other receivables 4,002 4,006 3,121 1,748

Loans and receivables 37,180 33,347 36,412 31,172

Prepayments 1,165 369 1,164 368

38,345 33,716 37,576 31,540

There is no allowance for impairment arising from the amounts receivable from joint ventures.

The Group’s most significant tenant accounts for $43,000 (2013 (restated): $102,000) of the tradereceivables carrying amount at the reporting date.

Concentration of credit risk relating to trade receivables is limited due to the Group’s many varied tenants.These tenants are engaged in diversified businesses and are of good quality and strong credit standing.The Group’s historical experience in collection of trade receivables falls within the recorded allowances.Due to these factors, the Manager believes that no additional credit risk, beyond amounts provided forcollection losses, is inherent in the Group’s trade receivables.


11 TRADE AND OTHER RECEIVABLES (continued)

Impairment losses

The aging of trade receivables at the reporting date is as follows:

2014 2013

GrossImpairment

losses GrossImpairment

losses$’000 $’000 $’000 $’000

(Restated) (Restated)

Group

Not past due 353 – 605 –

Past due 31 – 90 days 8 – 4 –

Past due more than 90 days – – 1 –

361 – 610 –

Trust

Not past due 324 – 546 –

Past due 31 – 90 days 8 – 3 –

Past due more than 90 days – – 1 –

332 – 550 –

The Manager believes that no impairment allowance is necessary in respect of the trade receivables asthese receivables relate mainly to tenants that have a good record with the Group or have sufficientsecurity deposits as collateral.

12 CASH AND CASH EQUIVALENTS

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Cash at bank and in hand 51,085 84,064 26,719 60,105

Fixed deposits with financial institutions 50,000 – 50,000 –

Cash and cash equivalents in the statements

of cash flows 101,085 84,064 76,719 60,105

The weighted average effective interest rates relating to cash and cash equivalents at the reporting datefor the Group and Trust were 0.58% (2013 (restated): 0.33%) and 0.65% (2013: 0.37%) per annumrespectively.



13 TRADE AND OTHER PAYABLES

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Trade payables and accrued operating

expenses 28,136 26,292 26,448 25,221

Amounts due to related parties (trade) 3,853 3,930 3,807 3,853

Other deposits and advances 10,720 15,852 4,514 4,814

Interest payable 4,646 4,825 4,646 4,825

47,355 50,899 39,415 38,713

Included in trade payables and accrued operating expenses was an amount due to the Trustee of$159,000 (2013 (restated): $155,000) for the Group and $159,000 (2013: $155,000) for the Trust.

Included in the amounts due to related parties (trade) was an amount due to the Manager of $3,360,000(2013 (restated): $3,178,000) for the Group and for the Trust and an amount due to the property managerof $465,000 (2013 (restated): $456,000) for the Group and $420,000 (2013: $411,000) for the Trust.

Included in interest payable of the Trust was an amount due to the subsidiary of $1,946,000 (2013:$1,322,000).

14 INTEREST-BEARING LIABILITIES

This note provides information about the contractual terms of the Group’s and the Trust’s interest-bearingliabilities.

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Current liabilities

Medium term notes (unsecured) 270,000 – 270,000 –


Term loans (unsecured) 446,020 444,349 446,020 444,349

Revolving credit facilities (unsecured) 125,000 30,000 125,000 30,000

Medium term notes (unsecured) 229,952 392,700 229,952 392,700

800,972 867,049 800,972 867,049

Total 1,070,972 867,049 1,070,972 867,049


14 INTEREST-BEARING LIABILITIES (continued)

Terms and debt repayment schedule

Terms and conditions of outstanding loans and borrowings are as follows:

2014 2013Nominal

interest rateYear of

maturityFacevalue

Carryingamount

Facevalue

Carryingamount

$’000 $’000 $’000 $’000Group and Trust (Restated) (Restated)

Unsecured

SGD floating rate term

loans2

and revolving credit

facilities SOR1 + margin 2018 to 2020 575,000 571,020 480,000 474,349

SGD Medium Term Notes 2.98% to 3.64% 2015 to 2021 320,000 320,000 270,000 270,000

JPY Medium Term Notes3 2.8875% to 2.95% 2019 to 2021 223,300 179,952 148,300 122,700

1,118,300 1,070,972 898,300 867,049

1 Swap Offer Rate.

2 Included in the floating rate term loans is an amount of $360.0 million (2013: $130.0 million) which is hedged by interest

rate swaps with notional contract amounts of $360.0 million (2013: $130.0 million).

3 The Trust has entered into cross currency swaps to hedge the total of JPY16.3 billion medium term notes into notional

principal amount of $223.3 million at fixed interest rates ranging from 2.8875% to 2.95% per annum.

The interest-bearing liabilities comprised the following:

Unsecured medium term notes

The Group has a $2.0 billion unsecured Multicurrency Medium Term Note Programme (“Programme”)

under CCT MTN. Under the CCT MTN Programme, CCT MTN may issue notes in any currency.

At 31 December 2014, notes issued by CCT MTN were as follows:

(i) $270.0 million (2013: $270.0 million) fixed rate notes maturing in 2015;

(ii) $50.0 million (2013: Nil) fixed rate notes maturity in 2021; and

(iii) JPY16.3 billion (2013: JPY10.0 billion) medium term notes, which comprises JPY10.0 billion and

JPY6.3 billion maturing in 2019 and 2021 respectively. The Trust had entered into cross currency

swaps to swap the JPY notes into Singapore dollars.

Unsecured bank facilities, overdraft and guarantee facilities of the Trust

As at 31 December 2014, CCT has an aggregate of $780.0 million (2013: $930.0 million) unsecured bank

facilities, comprising a combination of $450.0 million (2013: $450.0 million) term loans and $330.0 million

(2013: $480.0 million) revolving credit facilities with various maturities of up to 5.7 years from various

banks. CCT has drawn down $575.0 million (2013: $480.0 million) of the unsecured bank facilities.

The Trust also has an omnibus line facility of up to $5.0 million. As at 31 December 2014, the Trust has

utilised $3.0 million (2013: $3.0 million) from the omnibus line facility for letter of guarantees.



15 FINANCIAL DERIVATIVES

Group and Trust2014 2013$’000 $’000

(Restated)

Non-current assets

Interest rate swaps 1,160 –


Interest rate swaps – 72

Cross currency swaps 40,298 25,171

40,298 25,243

Interest rate swaps

At 31 December 2014, the Group held interest rate swaps with a total notional contract amount of $360.0

million (2013: $130.0 million) to provide fixed rate funding for terms up to 2 years. The swaps are to hedge

the exposure to varying cash flows due to changes in interest rates.

Cross currency swaps

At 31 December 2014, the Group held JPY/S$ cross currency swaps of notional contract amount totalling

JPY16.3 billion (2013: JPY10.0 billion) to hedge its foreign currency risk arising from its JPY borrowings.

The Group has designated the cross currency swaps as a hedging instrument in a cash flow hedge. The

swap matures on the same date as the JPY borrowings.

Master netting or similar agreements

The Group enters into derivative transactions under International Swaps and Derivatives Association

(ISDA) master netting agreements. In general, under such agreements the amounts owed by each

counterparty on a single day in respect of all transactions outstanding in the same currency are

aggregated into a single net amount that is payable by one party to the other. In certain circumstances –

e.g. when a credit event such as a default occurs, all outstanding transactions under the agreement are

terminated, the termination value is assessed and only a single net amount is payable in settlement of all

transactions.

The above ISDA agreements do not meet the criteria for offsetting in the statement of financial position.

This is because they create a right of set-off of recognised amounts that is enforceable only following an

event of default, insolvency or bankruptcy of the Group or the counterparties. In addition, the Group and

its counterparties do not intend to settle on a net basis or to realise the assets and settle the liabilities

simultaneously.


15 FINANCIAL DERIVATIVES (continued)

The following table sets out the carrying amounts of recognised financial instruments that are subject to

the above agreements.

Grossamounts ofrecognised

financialinstruments

Grossamounts ofrecognised

financialinstrumentsoffset in thestatement of

financialposition

Net amountsof financialinstruments

includedin the

statement offinancialposition

Relatedfinancial

instrumentsthat are not

offsetNet

amountGroup and Trust $’000 $’000 $’000 $’000 $’000

31 December 2014

Financial assets

Interest rate swaps 1,160 – 1,160 (581) 579

Financial liabilities

Cross currency swaps 40,298 – 40,298 (581) 39,717

At 31 December 2013, there were no derivative assets and liabilities which are offset in the statement of

financial position or are subject to enforceable master netting or similar arrangements.

16 CONVERTIBLE BONDS

Group and Trust2014 2013$’000 $’000

At 1 January 351,276 377,071

Repurchase and redemption of convertible bonds (118,538) –

Conversion of convertible bonds (67,800) (32,641)

Interest accretion, including transaction costs 4,268 6,846

At 31 December 169,206 351,276

(i) Convertible bonds due 2015

In April 2010, the Trust issued $225.0 million principal amount of convertible bonds due 2015 (the

“CB 2015”) with interest rate at 2.7% per annum.

During the year, $69,250,000 (2013: $34,250,000) and $120,750,000 (2013: Nil) of the outstanding

CB 2015 were converted into 58,066,405 Units (2013: 27,785,789) and repurchased respectively.

Following the conversion and repurchase of the CB 2015, the outstanding balance of $250,000 was

redeemed at 100% of its principal amount, plus unpaid accrued interest (calculated up to but

excluding the redemption date). As a result, the CB 2015 has been cancelled in their entirety as at

31 December 2014.



16 CONVERTIBLE BONDS (continued)

(ii) Convertible bonds due 2017

In September 2012, the Trust issued $175.0 million principal amount of convertible bonds due 2017

(the “CB 2017”) with interest rate at 2.5% per annum. The CB 2017 can be converted by

bondholders into Units at the conversion price of $1.5865 (2013: $1.6394) up to the close of

business on 2 September 2017, subject to adjustment to the conversion price in the event a

distribution is paid or made to CCT unitholders.

The CB 2017 may be redeemed, in whole or in part, at the option of the Trustee at any time after 12

September 2015 but not less than seven business days prior to 12 September 2017 (subject to

satisfaction of certain conditions).

Unless previously redeemed, converted or purchased and cancelled, the CB 2017 will be

redeemed on 12 September 2017 at 100% of its principal amount together with accrued interest.

As at 31 December 2014, the aggregate principal amount of the CB 2017 was $175.0 million (2013:

$175.0 million).

17 UNITS IN ISSUE

Group and Trust2014 2013’000 ’000

Units in issue:

At 1 January 2,878,774 2,842,956

Units created:

– asset management fees in relation to RCS Trust paid in Units 5,637 5,443

– asset management fees in relation to One George Street and

Wilkie Edge paid in Units 2,372 2,589

– conversion of convertible bonds 58,066 27,786

At 31 December 2,944,849 2,878,774

Units to be issued:

– asset management fees in relation to RCS Trust payable in Units 1,300 1,511

– asset management fees in relation to One George Street and

Wilkie Edge payable in Units 545 615

1,845 2,126

Total issued and issuable Units at 31 December 2,946,694 2,880,900

Units issued during the year are as follows:

(a) 5,636,310 (2013: 5,443,506) Units were issued at issue prices ranging from $1.423 to $1.667 (2013:

$1.463 to $1.655) per Unit, amounting to $8,662,000 (2013: $8,378,000) as payment for the asset

management fees in relation to RCS Trust for the period from 1 October 2013 to 30 September 2014

(2013: 1 October 2012 to 30 September 2013).

(b) 2,372,249 (2013: 2,588,767) Units were issued at issue prices ranging from $1.423 to $1.667 (2013:

$1.463 to $1.655) per Unit, amounting to $3,650,000 (2013: $3,995,000) as payment for the asset

management fees in relation to One George Street and Wilkie Edge for the period from 1 October

2013 to 30 September 2014 (2013: 1 October 2012 to 30 September 2013).


17 UNITS IN ISSUE (continued)

The issue prices were determined based on the volume weighted average traded price for all trades done

on the SGX-ST in the ordinary course of trading for the last 10 business days of the relevant periods in

which the management fees accrue.

Each Unit in the Trust represents an undivided interest in the Trust. The rights and interests of Unitholders

are contained in the Trust Deed and include the right to:

• receive income and other distributions attributable to the Units held;

• participate in the termination of the Trust by receiving a share of all net cash proceeds derived from

the realisation of the assets of the Trust less any liabilities, in accordance with their proportionate

interests in the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying

assets of the Trust and is not entitled to the transfer of any assets (or part thereof) or of any estate

or interest in any asset (or part thereof) of the Trust;

• attend all Unitholders’ meetings. The Trustee or the Manager may (and the Manager shall at the

request in writing of not less than 50 Unitholders or one-tenth in number of the Unitholders, whichever

is lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust

Deed; and

• one vote per Unit.

The restrictions of a Unitholder include the following:

• a Unitholder’s right is limited to the right to require due administration of the Trust in accordance with

the provisions of the Trust Deed; and

• a Unitholder has no right to request the Manager to redeem his Units while the Units are listed on

SGX-ST.

Under the Trust Deed, a Unitholder’s liability is limited to the amount paid or payable for any units in the

Trust. The provisions of the Trust Deed provide that no Unitholders will be personally liable to indemnify

the Trustee or any creditor of the Trustee in the event that liabilities of the Trust exceed its assets.

18 GROSS REVENUE

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Gross rental income 234,042 215,238 216,208 198,937

Car park income 11,711 11,323 11,510 11,134

Other income 16,855 24,902 12,571 19,659

262,608 251,463 240,289 229,730



18 GROSS REVENUE (continued)

Included in other income are the following:

(i) Yield stabilization income of $3,512,000 (2013: $4,579,000) accrued for Twenty Anson. Pursuant to

the Deed of Yield Stabilization dated 22 March 2012 in relation to the acquisition of 100% equity

interest in FOPL, a yield stabilization sum of $17.1 million was provided by the vendors to achieve a

stabilized yield of up to 5.5% per annum of the property purchase value of $430.0 million, for a period

of 3.5 years from 22 March 2012. For the period ended 31 December 2014, the yield stabilization sum

was computed based on a yield of 4.0% (2013: 4.0%) per annum of the property purchase value of

$430.0 million.

(ii) There was no yield protection income from CapitaLand Singapore Limited for the financial year

ended 31 December 2014 (2013: $7,621,000 for the period 1 January 2013 to 10 July 2013) in

relation to One George Street as the Deed of Yield Protection had expired on 10 July 2013.

19 PROPERTY OPERATING EXPENSES

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Property tax 19,615 15,410 17,952 13,993

Utilities 9,887 10,382 9,130 9,603

Property management reimbursements 7,606 7,122 7,000 6,558

Property management fees 5,770 5,519 5,238 4,987

Marketing expenses 2,578 4,515 1,978 4,283

Maintenance and others 11,903 11,394 10,942 10,385

57,359 54,342 52,240 49,809

20 INVESTMENT INCOME

Trust2014 2013$’000 $’000

Distribution income from joint ventures 83,252 80,899

Distribution income from associate 3,835 3,844

87,087 84,743

21 ASSET MANAGEMENT FEES

Asset management fees comprise a base component and performance component. Asset management

fees for One George Street and Wilkie Edge of $3,701,000 (2013: $3,813,000) are paid and payable in

Units. Asset management fees are paid and payable in cash for the rest of the assets.


22 FINANCE COSTS

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Interest expense 29,410 32,833 29,410 32,833

Transaction costs 7,024 9,727 7,012 9,714

36,434 42,560 36,422 42,547

23 OTHER EXPENSES

Included in other expenses was non-audit fees paid and payable to auditors of the Group and the Trust

of $13,000 (2013: $33,000).

24 TAX EXPENSE

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Current tax expense

Current year 3 16 – –

Reconciliation of effective tax rate


Tax calculated using Singapore tax rate of

17% (2013: 17%) 76,310 63,683 53,679 55,628

Non-tax deductible items 2,018 2,258 2,839 3,066

Non-taxable income (13,846) (18,476) (14,838) (19,157)

Effects of profit of associate and joint

ventures (net of tax) (22,799) (7,912) – –

Tax transparency (41,680) (39,537) (41,680) (39,537)

3 16 – –



25 EARNINGS PER UNIT

(a) Basic Earnings per Unit

The calculation of basic earnings per Unit is based on the total return for the year and weighted

average number of Units during the year, calculated as follows:

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000


Group and Trust2014 2013

Weighted average number of units ’000 ’000

Issued Units at 1 January 2,878,774 2,842,956

Effect of creation of new Units:

– issued as payment of RCS Trust’s asset management fees 3,108 2,875

– issued as payment of asset management fees of One George

Street and Wilkie Edge 1,297 1,421

– issued as conversion of convertible bonds 30,397 17,045

Weighted average number of Units in issue at 31 December 2,913,576 2,864,297

Group Trust2014cents

2013cents

2014cents

2013cents

Basic earnings per Unit 15.41 13.08 10.84 11.42

(b) Diluted Earnings per Unit

In calculating diluted earnings per Unit, the total return for the year and weighted average number

of Units during the year are adjusted for the effects of all dilutive potential Units, calculated as

follows:

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000


Interest expense on convertible bonds 6,383 16,617 6,383 16,617

455,265 391,207 322,141 343,843


25 EARNINGS PER UNIT (continued)

(b) Diluted Earnings per Unit (continued)

Group and TrustNumber of units 2014 2013

’000 ’000

Weighted average number of Units used in calculation of basic

earnings per share 2,913,576 2,864,297

Effect of conversion of convertible bonds 110,306 271,861

Weighted average number of Units in issue (diluted) 3,023,882 3,136,158

Group Trust2014cents

2013cents

2014cents

2013cents

Diluted earnings per Unit 15.06 12.47 10.65 10.96

26 CAPITAL RESERVES

Capital reserves relate to the value of the options granted to bondholders to convert their convertible

bonds into Units, net of transaction cost incurred which has been accounted for as a deduction against

equity.

27 HEDGING RESERVES

Hedging reserves comprises the effective portion of the cumulative net change in the fair value of hedging

instruments related to hedged transactions that have not yet occurred.

28 FINANCIAL RISK MANAGEMENT

Capital management

The Board of Directors of the Manager (the “Board”) reviews the Group’s and the Trust’s capital

management policy regularly so as to optimise the Group’s and the Trust’s funding structure. Capital

consists of unitholders’ funds. The Board also monitors the Group’s and the Trust’s exposures to various

risk elements and externally imposed requirements by closely adhering to clearly established

management policies and procedures.

The Trust and its subsidiaries are subject to the aggregate leverage limit as defined in the Property Funds

Appendix of the CIS Code. The CIS Code stipulates that the total borrowings and deferred payments

(together the “Aggregate Leverage”) of a property fund should not exceed 35% of its deposited property

except that the Aggregate Leverage of a property fund may exceed 35% of its deposited property (up to

a maximum of 60%) if a credit rating of the property fund from Fitch Inc., Moody’s or Standard and Poor’s

is obtained and disclosed to the public. The property fund should continue to maintain and disclose a

credit rating so long as its Aggregate Leverage exceeds 35% of its deposited property.

During the year, Standard and Poor’s upgraded CCT’s long-term corporate rating to “A-” from “BBB+” and

outlook is stable. The Group and the Trust have complied with the Aggregate Leverage limit during the

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

year.



28 FINANCIAL RISK MANAGEMENT (continued)

Overview of risk management

Risk management is integral to the whole business of the Group. The Group has a system of controls in

place to create an acceptable balance between the costs of risks occurring and the cost of managing the

risks. The Manager continually monitors the Group’s risk management process to ensure that an

appropriate balance between risk and control is achieved. Risk management policies and systems are

reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Audit Committee oversees how the Manager monitors compliance with the Group’s risk management

policies and procedures and reviews the adequacy of the risk management framework in relation to the

risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal

Audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results

of which are reported to the Audit Committee.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty fails to meet its contractual

obligations to the Group.

Exposure to credit risk

The carrying amounts of financial assets in the statements of financial position represent the Group and

the Trust’s maximum exposure to credit risk, before taking into account security deposits held as collateral.

Prior to signing lease agreements, credit assessments of prospective tenants are carried out. Security

deposits are collected from tenants when the lease agreements are signed. On an ongoing basis, the

Manager monitors the outstanding balances of the tenants continuously to minimize exposure to credit risk

of the tenants.

The Manager establishes an allowance for impairment that represents its estimate of incurred losses in

respect of trade and other receivables. The main component of this allowance is a specific loss component

that relates to the individually significant exposure.

Cash and fixed deposits are placed with financial institutions which are regulated. The Group limits its

credit risk exposure in respect of investments by investing only in liquid securities and only with

counterparties that have sound credit ratings. Given these high credit ratings, management does not

expect any counterparty to fail to meet its obligations.

At 31 December 2014 and 31 December 2013, there were no significant concentrations of credit risk other

than the amounts due from joint ventures.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The

Manager monitors its liquidity risk, maintains a level of cash and cash equivalents and refinances

borrowings to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. In

addition, the Manager also monitors and observes the CIS Code issued by MAS concerning limits on total

borrowings.

As at 31 December 2014, the Group and the Trust have undrawn bank facilities available for operating

activities of $205.0 million (2013: $450.0 million) (see note 14). In addition, the Group may issue up to

$1,456.7 million (2013: $1,581.7 million) notes under its $2.0 billion unsecured multi-currency Medium

Term Note Programme (see note 14).



Exposure to liquidity risk

The following are the expected contractual undiscounted cash outflows of financial liabilities, including

estimated interest payments/components and excluding the impact of netting agreements:

< Cash flows >Carryingamount

Contractualcash flows

Within1 year

Within 2 to5 years

More than5 years

Group $’000 $’000 $’000 $’000 $’000

31 December 2014

Non-derivative financial liabilities

Medium Term Notes 499,952 568,871 279,902 161,644 127,325

SGD floating rate term loans and

revolving credit facilities 571,020 618,164 8,792 331,016 278,356

Convertible bonds 169,206 186,807 4,375 182,432 –

Trade and other payables 47,355 47,355 47,355 – –

Security deposits 39,737 39,737 11,437 28,264 36

1,327,270 1,460,934 351,861 703,356 405,717

Derivative financial instruments

Interest rate swaps (net-settled) (1,160) (1,367) (329) (1,038) –


(gross-settled) 40,298 – – – –

– Outflow – 259,667 6,495 174,116 79,056

– (Inflow) – (233,190) (1,855) (155,684) (75,651)

39,138 25,110 4,311 17,394 3,405

1,366,408 1,486,044 356,172 720,750 409,122

31 December 2013 (Restated)







Security deposits 38,297 38,297 11,964 24,825 1,508

1,307,521 1,437,291 89,448 911,443 436,400


Interest rate swaps (net-settled) 72 2,160 756 1,404 –



– Outflow – 173,816 4,282 17,128 152,406

– (Inflow) – (158,262) (1,667) (6,669) (149,926)

25,243 17,714 3,371 11,863 2,480

1,332,764 1,455,005 92,819 923,306 438,880




Exposure to liquidity risk (continued)

< Cash flows >Carryingamount

Contractualcash flows

Within1 year

Within 2 to5 years

More than5 years

Trust $’000 $’000 $’000 $’000 $’000

31 December 2014







Security deposits 34,386 34,386 10,876 23,474 36

1,313,979 1,447,643 343,360 698,566 405,717


Interest rate swaps (net-settled) (1,160) (1,367) (329) (1,038) –



– Outflow – 259,667 6,495 174,116 79,056

– (Inflow) – (233,190) (1,855) (155,684) (75,651)

39,138 25,110 4,311 17,394 3,405

1,353,117 1,472,753 347,671 715,960 409,122

31 December 2013







Security deposits 33,340 33,340 9,726 22,106 1,508

1,290,378 1,420,148 75,024 908,724 436,400


Interest rate swaps (net-settled) 72 2,160 756 1,404 –



– Outflow – 173,816 4,282 17,128 152,406

– (Inflow) – (158,262) (1,667) (6,669) (149,926)

25,243 17,714 3,371 11,863 2,480

1,315,621 1,437,862 78,395 920,587 438,880



Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and

equity prices which will affect the Group’s total return or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within

acceptable parameters, while optimising the return on risk.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in foreign exchange rates.

Exposure to foreign currency risk

The Group is exposed to foreign currency risk on interest-bearing borrowings that were denominated in a

currency other than the functional currency of the Group. The currency giving rise to this risk is the

Japanese Yen (“JPY”). The Group hedges this risk by entering into cross currency swaps with notional

contract amounts totalling JPY16.3 billion. The cross currency swaps mature on the same date that the

interest-bearing borrowings are due for repayment and are designated as a cash flow hedge.

The Group’s and Trust’s exposures to foreign currency based on notional amounts are as follows:

Japanese Yen2014 2013

Group and Trust $’000 $’000

Non-derivative financial liabilities 179,952 122,700

Sensitivity analysis

A 10% strengthening of Singapore dollar against Japanese Yen at the reporting date would decrease the

Unitholders’ Funds by the amounts shown below. This analysis assumes that all other variables, in

particular interest rates, remain constant. The analysis is performed on the same basis for 2013.

Unitholders’ fundsGroup and Trust $’000

31 December 2014

Japanese Yen (10% strengthening) (1,488)

31 December 2013

Japanese Yen (10% strengthening) (797)

A 10% weakening of Singapore dollar against Japanese Yen at 31 December would have had the equal

but opposite effect on Japanese Yen to the amounts shown above, on the basis that all other variables

remain constant.




Interest rate risk

The Group’s exposure to changes in interest rates relates primarily to interest-bearing financial liabilities.

Interest rate risk is managed on an ongoing basis with the primary objective of limiting the extent to which

net interest expense could be affected by adverse movements in interest rates.

Interest rate swaps with a total notional amount of $360.0 million (2013: $130.0 million) by the Trust have

been entered into at the reporting date. The swaps are being used to hedge the exposure to varying cash

flows due to changes in interest rates.

The fair value of interest rate swaps in total non-current asset as at 31 December 2014 for the Group and

Trust was $1.2 million (2013: $0.1 million in non-current liabilities). Interest rate swaps represented 0.023%

(2013 (restated): 0.001%) of the net assets of the Group and 0.025% (2013: 0.002%) for the Trust.

Sensitivity analysis

In managing the interest rate risk, the Manager aims to reduce the impact of short-term fluctuations on the

Group’s total return before income tax.

A change of 100 basis points (“bp”) in interest rate at the reporting date would increase/(decrease) the

Statement of Total Return and Unitholders’ Funds by the amounts shown below. This analysis assumes that

all other variables, in particular foreign currency rates, remain constant.

Statement of total return Unitholders’ funds100 bp 100 bp 100 bp 100 bp

increase decrease increase decreaseGroup and Trust $’000 $’000 $’000 $’000

31 December 2014

Variable rate instruments (5,750) 2,568 – –

Interest rate swaps 3,600 (1,399) 892 (346)

Cross currency swaps 696 (77) 174 (19)

(1,454) 1,092 1,066 (365)


Variable rate instruments (4,800) 978 – –

Interest rate swaps 1,300 (265) 335 (68)

(3,500) 713 335 (68)



Accounting classification and fair values

The classification of financial assets and liabilities are as follows.

Note

Fair value –

hedging

instruments

Loans and

receivables

Available-

for-sale

Other

financial

liabilities

Total

carrying

amount

Group $’000 $’000 $’000 $’000 $’000

31 December 2014

Trade and other receivables 11 – 37,180 – – 37,180

Cash and cash equivalents 12 – 101,085 – – 101,085

Financial derivatives 15 1,160 – – – 1,160

1,160 138,265 – – 139,425

Trade and other payables 13 – – – (47,355) (47,355)

Security deposits – – – (39,737) (39,737)

Interest-bearing liabilities 14 – – – (1,070,972) (1,070,972)

Financial derivatives 15 (40,298) – – – (40,298)

Convertible bonds 16 – – – (169,206) (169,206)

(40,298) – – (1,327,270) (1,367,568)



investment 10 – – 6 – 6



– 117,411 6 – 117,417



Interest-bearing liabilities 14 – – – (867,049) (867,049)



(25,243) – – (1,307,521) (1,332,764)




Note

Fair value –

hedging

instruments

Loans and

receivables

Available-

for-sale

Other

financial

liabilities

Total

carrying

amount

Trust $’000 $’000 $’000 $’000 $’000

31 December 2014



Financial derivatives 15 1,160 – – – 1,160

1,160 113,131 – – 114,291



Interest-bearing liabilities 14 – – – (1,070,972) (1,070,972)



(40,298) – – (1,313,979) (1,354,277)

31 December 2013


investment 10 – – 6 – 6



– 91,277 6 – 91,283



Interest-bearing liabilities 14 – – – (867,049) (867,049)



(25,243) – – (1,290,378) (1,315,621)



Measurement of fair values

The following summarises the significant methods and assumptions used in estimating the fair values of

financial instruments of the Group and the Trust.

Financial instruments measured at fair value

Derivatives

The fair value of interest rate swaps is the estimated amount that would be received or paid to terminate

the swaps at the reporting date, taking into account current interest rates and the current creditworthiness

of the swap counterparties.

For interest rate swaps and cross currency swap, fair value is obtained based on quotes provided by the

financial institution at the reporting date.

Financial instruments not measured at fair value


Fair value, which is determined for disclosure purposes, is calculated based on the present value of

expected future principal and interest cash flows, where the discount rate is computed from the market

interest rates at the reporting date.

Interest rates used in determining fair values

The interest rates used to discount estimated cash flows, where applicable, is computed from the market

rates as follows:

Group and Trust2014 2013

% %(Restated)

Security deposits 0.25–1.53 0.25–1.32

Interest-bearing borrowings 1.73–4.70 1.35–5.30

Fair value hierarchy

The table below analyses assets and liabilities carried at fair value. The different levels have been defined

as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset

or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data

(unobservable inputs).




Assets and liabilities carried at fair value

Level 1 Level 2 Level 3 Total$’000 $’000 $’000 $’000

Group

31 December 2014

Investment properties – – 4,882,400 4,882,400

Interest rate swaps – 1,160 – 1,160

Total assets – 1,160 4,882,400 4,883,560

Cross currency swaps – 40,298 – 40,298



Interest rate swaps – 72 – 72

Cross currency swap – 25,171 – 25,171

Total liabilities – 25,243 – 25,243

Trust

31 December 2014


Interest rate swaps – 1,160 – 1,160

Total assets – 1,160 4,451,400 4,452,560

Cross currency swaps – 40,298 – 40,298

31 December 2013


Interest rate swaps – 72 – 72

Cross currency swap – 25,171 – 25,171

Total liabilities – 25,243 – 25,243



Financial assets and financial liabilities not carried at fair value but for which fair values are

disclosed*

Level 1 Level 2 Level 3 Total$’000 $’000 $’000 $’000

Group

31 December 2014

Non-current portion of security deposits – – 27,401 27,401

Interest-bearing liabilities – 1,061,396 – 1,061,396

Convertible bonds 198,742 – – 198,742

198,742 1,061,396 27,401 1,287,539



Interest-bearing liabilities – 887,157 – 887,157


359,183 887,157 25,555 1,271,895

Trust

31 December 2014


Interest-bearing liabilities – 1,061,396 – 1,061,396


198,742 1,061,396 22,635 1,282,773

31 December 2013


Interest-bearing liabilities – 887,157 – 887,157


359,183 887,157 22,850 1,269,190

* Excludes financial assets and financial liabilities whose carrying amounts measured on the amortised cost basis

approximate their fair values due to their short-term nature and where the effect of discounting is immaterial.

The entity’s policy is to recognise transfers out of Level 3 as of the end of the reporting period during which

the transfer has occurred. There were no transfers between levels during the year.




Level 3 fair values

The reconciliation from the beginning balances to the ending balances for fair value measurements in

Level 3 of the fair value hierarchy for investment properties is set out in note 5.

The following table shows the significant unobservable inputs used in the measurement of fair value of

investment properties:

Valuation techniques

Significant

unobservable inputs Range

Inter-relationship between

key unobservable inputs and

fair value measurement

Discounted cash flow

analysis

Discount rate 7.50%1 The estimated fair value

increases with a lower discount

rate

Capitalisation of income

approach

Capitalisation rate 3.75%-4.25%1 The estimated fair value

increases with a lower

capitalisation rate

1 Excludes Bugis Village and Golden Shoe Car Park discount rate range of 9.00% to 13.00% and capitalisation rate range

of 6.50% to 13.00%.

Key unobservable inputs

Key unobservable inputs correspond to:

• Discount rate, based on the risk free rate for 10-year bonds issued by the Singapore Government,

adjusted for a risk premium to reflect the risk of investing in the asset class.

• Capitalisation rate, based on investment property yields derived from comparable sales

transactions, taking into consideration the qualities of the respective properties.

29 RELATED PARTIES

For the purposes of these financial statements, parties are considered to be related to the Group if the

Group has the ability, directly or indirectly, to control the party or exercise significant influence over the

party in making financial and operating decisions, or vice versa, or where the Group and the party are

subject to common significant influence. Related parties may be individuals or other entities. The Manager

(CapitaCommercial Trust Management Limited) and Property Manager (CapitaLand Commercial

Management Pte. Ltd.) are indirect wholly-owned subsidiaries of a substantial Unitholder of the Trust.

In the normal course of the operations of the Group, the asset management fees and the Trustee’s fees

have been paid or are payable to the Manager and Trustee respectively.


29 RELATED PARTIES (continued)

During the financial year, other than those disclosed elsewhere in the financial statements, there were

significant related party transactions, which were carried out in the normal course of business as follows:

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Administrative fees and reimbursables paid

to subsidiary – – 40 41

Asset management fees paid or payable to

the Manager 13,573 12,656 13,573 12,656

Interest received or receivable from joint

venture 3,517 3,510 3,517 3,510

Interest received or receivable from

subsidiary – – 12,324 12,324

Interest paid or payable to subsidiary – – 11,319 11,580

Leasing commissions paid or payable to

related companies of the Manager 2,686 2,670 2,308 2,455

Project management fees paid or payable to

related company of the Manager 328 504 289 472

Property management fees and

reimbursables paid or payable to related

company of the Manager 13,376 12,641 12,238 11,544

Rental income and other related income from

related companies of the Manager 8,436 3,621 8,436 3,621

Rental income and other related income from

joint venture 513 532 513 532

Yield protection income from related

company of the Manager – 7,621 – 7,621



30 OPERATING SEGMENTS

For the purpose of the assessment of segment performance, the Group’s CODMs have focused on main

business segments: Capital Tower, Six Battery Road, One George Street, Other office buildings and Car

park and other buildings. This forms the basis of identifying the operating segments of the Group under

FRS 108 Operating Segments.

This primary format is based on the Group’s management and internal reporting structure for the purpose

of allocating resources and assessing performance by the Group’s CODMs.

Segment property income represents income generated from its tenants. Segment property income

represents the income earned by each segment after allocating property operating expenses. This is the

measure reported to the Group’s CODMs for the purpose of assessment of segment performance.

For the purpose of monitoring segment performance, the Group’s CODMs monitor the non-financial assets

as well as financial assets attributable to each segment.

Segment results, assets and liabilities include terms directly attributable to a segment as well as those that

can be allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets and

revenue, interest-bearing borrowings and expenses, related assets and expenses. Segment capital

expenditure is the total cost incurred during the year to acquire segment assets that are expected to be

used for more than one year. Information regarding the Group’s reportable segments is presented in the

tables below. Amounts reported for the prior year have been represented to conform to the requirements

of FRS 108.

Reportable segments

The Group invest in the following:

Office buildings Capital Tower, Six Battery Road, HSBC Building,

One George Street, Twenty Anson

Car park and other buildings Golden Shoe Car Park, Bugis Village and Wilkie Edge


30 OPERATING SEGMENTS

Reportable segments

31 December 2014

GroupCapitalTower

SixBatteryRoad

OneGeorgeStreet

Otheroffice

buildings

Totaloffice

buildings

Car parkand otherbuildings

Allsegments

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Gross rental income 57,984 61,548 46,663 38,281 204,476 29,566 234,042

Car park income 1,895 1,173 923 202 4,193 7,518 11,711

Others 6,736 2,238 2,644 4,284 15,902 953 16,855

Gross revenue 66,615 64,959 50,230 42,767 224,571 38,037 262,608

Segment net property

income 48,748 51,376 39,581 37,535 177,240 28,009 205,249

Interest income 3,732

Finance costs (36,434)

Unallocated expenses (22,238)

Share of profit of associate (net of tax) 4,745

Share of profit of joint ventures (net of tax) 212,612

Other material non-cash item:

– Net increase in fair value of investment properties 81,219

Consolidated return for the year before tax 448,885

Tax expense (3)

Consolidated return for the year after tax 448,882

Segment assets and liabilities

Reportable segment assets 1,317,261 1,334,432 981,438 908,399 4,541,530 389,839 4,931,369

Investment in associate 63,899

Investment in joint ventures 1,427,895

Unallocated assets 97,896

Total assets 6,521,059

Reportable segment

liabilities 14,753 23,538 15,659 281,901 335,851 10,429 346,280

Unallocated liabilities 1,021,291

Total liabilities 1,367,571

Other segmental information

Depreciation and

amortisation (1,174) 275 580 183 (136) 136 –

Capital expenditure 24,578 4,625 208 2,003 31,414 767 32,181



30 OPERATING SEGMENTS (continued)

Reportable segments (continued)


GroupCapitalTower

SixBatteryRoad

OneGeorgeStreet

Otheroffice

buildings

Totaloffice

buildings

Car parkand otherbuildings

Allsegments

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Gross rental income 53,683 53,908 42,143 36,748 186,482 28,756 215,238

Car park income 1,827 1,107 849 189 3,972 7,351 11,323

Others 5,687 2,553 10,327 5,244 23,811 1,091 24,902

Gross revenue 61,197 57,568 53,319 42,181 214,265 37,198 251,463

Segment net property income 43,134 46,622 42,024 37,536 169,316 27,805 197,121

Interest income 3,713

Finance costs (42,560)

Unallocated expenses (17,272)

Share of profit of associate (net of

tax) 4,355

Share of profit of joint ventures (net of tax) 123,087

Other material non-cash item:

– Net increase in fair value of investment

properties 106,162

Consolidated return for the year before tax 374,606

Tax expense (16)

Consolidated return for the year after tax 374,590

Segment assets and liabilities

Reportable segment assets 1,287,482 1,289,475 963,949 888,921 4,429,827 386,529 4,816,356

Investment in associate 65,002

Investment in joint ventures 1,283,879

Unallocated assets 80,244

Total assets 6,245,481

Reportable segment liabilities 11,543 27,299 12,974 285,769 337,585 10,554 348,139

Unallocated liabilities 984,629

Total liabilities 1,332,768

Other segmental information

Depreciation and amortisation 588 (34) 442 139 1,135 244 1,379

Capital expenditure 3,559 18,440 552 160 22,711 1,127 23,838


30 OPERATING SEGMENTS (continued)

Geographical segments

The Group’s operations are all in Singapore except for its associate, where the operations are in Malaysia.

In presenting information on the basis of geographical segments, segment revenue and assets of the

Group is based on the geographical location of the properties.

RevenueNon-current

assets$’000 $’000

31 December 2014

Singapore 262,608 6,317,730

Malaysia (Investment in associate) – 63,899


Singapore 251,463 6,062,693

Malaysia (Investment in associate) – 65,002

Major customers

Revenue from two major customers of the Group approximates $39,296,000 (2013 (restated):

$37,852,000) and was attributable to tenants in HSBC Building and Capital Tower (2013 (restated): HSBC

Building and Capital Tower).

31 COMMITMENTS

Group Trust

2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Capital expenditure commitments:

– contracted but not provided for 24,080 49,961 23,478 47,671

The Group and the Trust lease out their investment properties. Non-cancellable operating lease rentals are

receivable as follows:

Group Trust2014 2013 2014 2013$’000 $’000 $’000 $’000

(Restated)

Within 1 year 240,828 215,175 221,719 199,509

After 1 year but within 5 years 577,148 425,063 551,439 404,284

After 5 years 107,094 96,728 107,094 96,728

925,070 736,966 880,252 700,521



32 FINANCIAL RATIOS

Group2014 2013

Note % %(Restated)

Expenses to weighted average net assets A

– expenses ratio excluding performance related fees 0.15 0.15

– expenses ratio including performance related fees 0.33 0.32

Portfolio turnover rate B – –

Note A: The annualised ratios are computed in accordance with the guidelines of Investment Management Association of

Singapore. The expenses used in the computation relate to expenses of the Group, excluding property operating

expenses, borrowing cost and income tax expense.

Note B: The annualised ratio is computed based on the lesser of purchases or sales of underlying investment properties

of the Group expressed as a percentage of weighted average net asset value.

33 SUBSEQUENT EVENTS

(a) Distribution

On 21 January 2015, the Manager announced distribution for the period from 1 July to 31 December

2014 of 4.24 cents per Unit.

(b) Issue of Medium Term Notes

On 17 February 2015, the Group issued JPY8.6 billion notes under the CCT MTN Programme. The

Trust has entered into a cross currency swap to hedge the JPY8.6 billion medium term notes into

notional principal amount of $100.0 million at a fixed interest rate of 3.05% per annum.


Interested Person (as defined in the Listing Manual) and Interested Party (as defined in the Property

Funds Appendix) Transactions

The transactions entered into with interested persons during the financial year, which falls under the Listing

Manual and the Property Funds Appendix (excluding transactions of less than S$100,000 each), are as follows:

Aggregate value

(excluding transactions

of less than S$100,000

each and transactions

conducted under

unitholders’ mandate

pursuant to Rule 920)

Aggregate value of all

interested person

transactions during the

financial year under review

under unitholders’

mandate pursuant to

Rule 920 (excluding

transactions less than

S$100,000 each)

Name of Interested Person/Interested Party S$’000 S$’000

CapitaLand Limited and its subsidiaries or associates

• Manager’s management fees 22,841 –

• Property management fees and

reimbursables 14,585 –

• Leasing commissions 669 –

• Project management fees 66,530 –

• Rental and service charge income 1,309 –

105,934 –

Temasek Holdings (Private) Limited and its associates

• Provision of refuse removal services 116 –

• Rental and service charge income 335 –

451 –

HSBC Institutional Trust Services (Singapore) Limited

• Trustee’s fee 852 –

852 –

Save as disclosed above, there were no additional related party transactions (excluding transaction of less than

S$100,000 each) entered into during the financial year under review.

CCT is deemed to have obtained Unitholders’ approval on 12 April 2004 through the approval of the

shareholders of CapitaLand Limited (as outlined in the Introductory Document dated 16 March 2004) in relation

to payments for the asset management fees, payments for acquisition and divestment fees, payments of

property management fees, reimbursements and leasing commissions to the property manager in respect of

payroll and related expenses as well as payments of the Trustee’s fees, which are therefore not subject to Rules

905 and 906 of the SGX-ST’s Listing Manual. Such payments are not to be included in the aggregate value of

total related property transactions as governed by Rules 905 and 906 of the SGX-ST’s Listing Manual.

Please also see Significant Related Party Transaction on Note 29 in the financial statements.

Additional Information


Subscription of CCT Units

For the financial year ended 31 December 2014, an aggregate of 66,074,964 Units were issued and subscribed

for. As at 31 December 2014, 2,944,849,310 Units were in issue and outstanding.

Asset Management Fee Paid in Units

A summary of Units issued for payment of the asset management fee (part payment) during or in respect of the

financial year are as follows:

For Period Issue Date

Units

issued

*Issue

Price Total Value

S$ S$’000

Asset Management Fee

1 January 2014 to 31 March 2014 5 May 2014 2,074,261 1.4760 3,062

1 April 2014 to 30 June 2014 4 August 2014 1,862,490 1.6673 3,105

1 July 2014 to 30 September 2014 29 October 2014 1,945,902 1.6035 3,120

1 October 2014 to 31 December 2014 3 February 2015 1,844,770 1.6989 3,134

12,421

* Based on the volume weighted average traded price for a Unit for all trades on the SGX-ST in the ordinary course of trading

on the SGX-ST for the last ten business days of the relevant period in which the management fee accrues.







As at 27 February 2015

Issued and Fully Paid Units

2,946,694,080 Units (Voting rights: 1 vote per Unit)

Market capitalisation of S$5,200,915,051 based on market closing Unit price of S$1.765 on 27 February 2015

Distribution of Unitholdings

Size of Unitholdings

No. of

Unitholders % No. of Units %

1– 99 340 1.3 7,317 0.0

100 –1,000 7,160 27.8 4,459,563 0.2

1,001 – 10,000 14,087 54.6 60,567,400 2.0

10,001 –1,000,000 4,174 16.2 167,585,103 5.7

1,000,001 and above 33 0.1 2,714,074,697 92.1

Total 25,794 100.0 2,946,694,080 100.0

Location of Unitholdings

No. of

Unitholders % No. of Units %

Singapore 24,735 95.9 2,937,804,585 99.7

Malaysia 549 2.1 4,357,935 0.1

Others 510 2.0 4,531,560 0.2

Total 25,794 100.0 2,946,694,080 100.0

Twenty Largest Unitholders

Name No. of Units %

SBR Private Limited 640,349,000 21.7

Citibank Nominees Singapore Pte Ltd 500,157,124 17.0

DBS Nominees (Private) Limited 479,918,691 16.3

HSBC (Singapore) Nominees Pte Ltd 282,655,486 9.6

DBSN Services Pte. Ltd. 198,112,166 6.7

E-Pavilion Pte Ltd 185,137,000 6.3

CapitaCommercial Trust Management Limited 109,778,913 3.7

Raffles Nominees (Pte) Limited 104,606,717 3.6

United Overseas Bank Nominees (Private) Limited 85,471,357 2.9

BNP Paribas Securities Services Singapore Branch 29,243,452 1.0

Koo Boon Hooi (Qiu Wenhui) 13,800,000 0.5

UOB Kay Hian Private Limited 9,880,850 0.3

Bank of Singapore Nominees Pte. Ltd. 9,445,528 0.3

DB Nominees (Singapore) Pte Ltd 9,136,898 0.3

OCBC Securities Private Limited 8,948,079 0.3

Morgan Stanley Asia (Singapore) Securities Pte Ltd 6,327,152 0.2

Pei Hwa Foundation Limited 6,004,000 0.2

OCBC Nominees Singapore Private Limited 5,481,719 0.2

Lee Pineapple Company Pte Ltd 4,620,000 0.2

Gralf Max Hans Sieghold 3,500,000 0.1

Total 2,692,574,132 91.4

Statistics of Unitholdings


DIRECTORS’ INTERESTS IN UNITS AND CONVERTIBLE SECURITIES AS AT 21 JANUARY 2015

Based on the Register of Directors’ Unitholdings, save for those disclosed below, none of the Directors holds

any interest in Units and convertible securities issued by CCT.

No. of Units

Name Of Director Direct Interest Deemed Interest

Soo Kok Leng 7,329 –

Lim Ming Yan 199,000 –

Lynette Leong Chin Yee 102,000 –

Dato’ Mohammed Hussein 93,703 –

Goh Kian Hwee 9,441 –

Wen Khai Meng 19,839 –

Chong Lit Cheong 16,073 –

SUBSTANTIAL UNITHOLDERS’ UNITHOLDINGS AS AT 27 FEBRUARY 2015

Based on the information available to the Manager as at 27 February 2015, the unitholdings of Substantial

Unitholders of CCT are as follows:

Name of Substantial Unitholder

Direct Interest Deemed Interest

No. of Units % No. of Units %

Temasek Holdings (Private) Limited (THPL) – – 937,484,5711 31.8

CapitaLand Limited (CL) – – 935,264,9132 31.7

CapitaLand Singapore Limited (CLS) – – 935,264,9133 31.7

SBR Private Limited (SBR) 640,349,000 21.7 – –

CapitaLand (Office) Investments Pte Ltd (COI) – – 640,349,0004 21.7

E-Pavilion Pte. Ltd. (E-Pavilion) 185,137,000 6.3 – –

CapitaLand Investments Pte Ltd (CIPL) – – 185,137,0005 6.3

CBRE Clarion Securities LLC 173,763,933 5.9 – –

CBRE Group Inc. – – 173,763,9336 5.9

1 THPL is deemed to have an interest in the unitholdings in which its associated companies have or are deemed to have an

interest pursuant to Section 4 of the Securities and Futures Act, Chapter 289 of Singapore. THPL is wholly-owned by the

Minister for Finance.

2 CL is deemed to have an interest in the unitholdings of its indirect wholly-owned subsidiaries namely, SBR, E-Pavilion and

CapitaCommercial Trust Management Limited (CCTML).

3 CLS is deemed to have an interest in the unitholdings of its direct wholly-owned subsidiary namely, CCTML, and its indirect

wholly-owned subsidiaries namely, SBR and E-Pavilion.

4 COI is deemed to have an interest in the unitholdings of its direct wholly-owned subsidiary namely, SBR.

5 CIPL is deemed to have an interest in the unitholdings of its direct wholly-owned subsidiary namely, E-Pavilion.

6 CBRE Group Inc. is deemed to have an interest in the unitholdings of its subsidiary namely, CBRE Clarion Securities LLC.

FREE FLOAT

Based on the information available to the Manager as at 27 February 2015, approximately 61% of the

Units were held in the hands of the public. Rule 723 of the Listing Manual of the SGX-ST has

accordingly been complied with.

Statistics of Unitholdings


Corporate InformationCAPITACOMMERCIAL TRUST

REGISTERED ADDRESS HSBC Institutional Trust Services(Singapore) Limited21 Collyer Quay #10-02 HSBC BuildingSingapore 049320Email: [email protected]: www.cct.com.sg

TRUSTEEHSBC Institutional Trust Services(Singapore) Limited21 Collyer Quay #03-01 HSBC BuildingSingapore 049320Tel: +65 6658 6906Fax: +65 6534 5526

AUDITORKPMG LLPPublic Accountants and Chartered Accountants16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581Tel: +65 6213 3388Fax: +65 6225 0984Partner-in-charge: Mr Lau Kam Yuen(With effect from financial year ended 31 December 2014)

UNIT REGISTRARBoardroom Corporate &Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623Tel: +65 6536 5355Fax: +65 6536 1360

For updates or change of mailingaddress, please contact:The Central Depository (Pte) Limited9 North Buona Vista Drive#01-19/20 The MetropolisSingapore 138588Tel: +65 6535 7511Fax: +65 6535 0775Email: [email protected]: https://www1.cdp.sgx.com

This Annual Report to Unitholders may contain forward-looking statements. Forward-looking statement is subject to inherent uncertainties and is based on numerous assumptions. Actual performance, outcomes and results may differ materially from those expressed in forward-looking statements. Representative examples of factors which may cause the actual performance, outcomes and results to differ materially from those in the forward-looking statements include (without limitation) changes in general industry and economic conditions, interest rate trends, cost of capital and capital availability, availability of real estate investment opportunities, competition from other companies, shifts in customers’ demands, changes in operating conditions, including employee wages, benefits and training, governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of management on future events.

All rights are reserved.

THE MANAGER

REGISTERED ADDRESSCapitaCommercial Trust Management Limited168 Robinson Road#30-01 Capital TowerSingapore 068912Tel: +65 6713 2888Fax: +65 6713 2400Email: [email protected]: www.cct.com.sg

BOARD OF DIRECTORSSoo Kok LengChairman & Non-Executive Independent Director

Lim Ming YanDeputy Chairman & Non-Executive Non-Independent Director

Lynette Leong Chin YeeChief Executive Officer & Executive Non-Independent Director

Dato’ Mohammed HusseinNon-Executive Independent Director

Lam Yi YoungNon-Executive Independent Director

Goh Kian HweeNon-Executive Independent Director

Wen Khai MengNon-Executive Non-Independent Director

Chong Lit CheongNon-Executive Non-Independent Director

AUDIT COMMITTEEDato’ Mohammed Hussein Chairman

Lam Yi YoungGoh Kian Hwee

CORPORATE DISCLOSURE COMMITTEEWen Khai Meng Chairman

Chong Lit CheongSoo Kok Leng

EXECUTIVE COMMITTEELim Ming Yan Chairman

Lynette Leong Chin YeeWen Khai MengChong Lit Cheong

COMPANY SECRETARYDoris Lai

ASSISTANT COMPANY SECRETARYHoney Vaswani

THE PROPERTY MANAGERS

CapitaLand Commercial Management Pte. Ltd.168 Robinson Road#30-01 Capital TowerSingapore 068912Tel: +65 6713 2888Fax: +65 6713 2400

CapitaLand (RCS) Property Management Pte. Ltd.252 North Bridge Road#B1-44D Raffles CityShopping CentreSingapore 179103Tel: +65 6338 7766Fax: +65 6337 3618

Counter Name: CapitaCom TrustStock Code: C61U

CapitaCommercial Trust Management LimitedCompany Registration No. 200309059W

168 Robinson Road#30-01 Capital TowerSingapore 068912Tel: +65 6713 2888Fax: +65 6713 2400Email: [email protected]

www.cct.com.sg

This annual report is printed on environmentally-friendly paper.

Documents

CapitaCommercial Trust · 2015-03-26 · Corporate Profile CapitaCommercial Trust (CCT, or the Trust) is the first and largest listed commercial REIT on SGX-ST with a market capitalisation