CAPITALAND LIMITED - listed companycct.listedcompany.com/misc/CapitaLand_Circular.pdf · stockbroker or other agent through whom the sale or transfer was effected for onward transmission

CIRCULAR DATED 16 MARCH 2004

This Circular is important and requires your immediate attention. If you are in any doubt as to theaction you should take, you should consult your stockbroker, bank manager, accountant, solicitor orother professional adviser immediately.

If you have sold or transferred all your shares in the capital of CapitaLand Limited (the ``Company''),you should immediately forward this Circular together with the Notice of Extraordinary GeneralMeeting and the accompanying Proxy Form to the purchaser or transferee or to the bank,stockbroker or other agent through whom the sale or transfer was effected for onward transmissionto the purchaser or transferee.

Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of anyof the statements made, reports contained or opinions expressed in this Circular.

CAPITALAND LIMITED(Incorporated in the Republic of Singapore)

CIRCULAR TO SHAREHOLDERS

in relation to the proposed

(I) DISTRIBUTION IN SPECIE OF UNITS IN CAPITACOMMERCIAL TRUST TO THESHAREHOLDERS OF CAPITALAND LIMITED; AND

(II) MODIFICATIONS TO THE CAPITALAND SHARE OPTION PLAN, THE CAPITALANDPERFORMANCE SHARE PLAN AND THE CAPITALAND RESTRICTED STOCK PLAN

Joint Financial Advisers to the Company in relation to the Distribution In Specie

IMPORTANT DATES AND TIMES:

Last Date and Time for Lodgement of Proxy Form : 10 April 2004 at 10.30 a.m.

Date and Time of Extraordinary General Meeting : 12 April 2004 at 10.30 a.m. (or as soonthereafter following the conclusion oradjournment of the Annual General Meetingof the Company to be held at 10.00 a.m. onthe same day and at the same place)

Place of Extraordinary General Meeting : STI, 168 Robinson RoadLevel 9, Capital TowerSingapore 068912

IMPORTANT NOTICE TO OVERSEAS SHAREHOLDERS

Set out below are certain guidelines on the distribution of the CCT Units to Overseas Shareholders in Australia,Hong Kong, Malaysia, The Netherlands, the United Kingdom and the United States. Further details on thedistribution of and the entitlement of Overseas Shareholders to the CCT Units are set out on pages 25 to 27 ofthis Circular.

Australia

This Circular is for the exclusive use of Shareholders in connection with the proposed Capital Reduction andDistribution In Specie. No product disclosure statement (``PDS'') is required under the Corporations Act 2001and no such document has been or will be prepared or lodged with the Australian Securities and InvestmentsCommission. No conduct in relation to the Distribution In Specie has been authorised by CapitaLand to occur inAustralia. The CCT Units are being distributed for the purposes outlined in paragraph 2 ``Background to andRationale for the Distribution In Specie'' of Section I of the Letter to Shareholders, and not for the purpose ofShareholders selling or transferring the CCT Units, or granting, issuing or transferring interests in, or options orwarrants over, the CCT Units. Shareholders must not distribute this Circular in Australia or engage in anyconduct in relation to the CCT Units that would require the preparation of a PDS, CCT to be registered as amanaged investment scheme, or require an Australian Financial Services Licence (where an appropriate licenceis not already held). Any sale of the CCT Units must be on the SGX-ST or to a person to whom it would belawful to offer the CCT Units without them being given a PDS.

Hong Kong

This Circular is for the exclusive use of Shareholders in connection with the proposed Capital Reduction andDistribution In Specie. Accordingly, this Circular must not be distributed, published or reproduced (in whole or inpart), disclosed by Shareholders to any other person in Hong Kong or used for any purpose in Hong Kong otherthan in connection with Shareholders' consideration of the Capital Reduction and the Distribution In Specie. ThisCircular does not constitute an offer or invitation for the sale or purchase of securities in Hong Kong and shall notform the basis of any contract.

Malaysia

Overseas Shareholders in Malaysia should note that the distribution of the CCT Units to them is subject to theapproval of the Securities Commission of Malaysia. An application has been made to the Securities Commissionof Malaysia for such approval but there is no assurance that such approval will be given or obtained in time forthe distribution of the CCT Units. If such approval is not given or not obtained in time for the distribution of theCCT Units, or if the approval is subject to compliance with conditions or requirements which, in the view of theDirectors, are onerous by reasons of costs, delay or otherwise, such Overseas Shareholders will not receive theirentitlements to the CCT Units, but will receive the net proceeds of the sale of the CCT Units which they otherwisewould have been entitled to, in the manner set out herein.

The Netherlands

The CCT Units will not be offered, sold, transferred or delivered, whether directly or indirectly, as part of theirinitial distribution or any time thereafter, to any individual or legal entity situated in The Netherlands other thanto individuals or legal entities who or which trade or invest in securities in the conduct of their profession orbusiness within the meaning of the Exemption Regulation of December 21 1995 issued pursuant to TheNetherlands Securities Market Supervision 1995 Act (``Wet Toezicht Effectenverkeer 1995''). These include,but are not limited to, banks, brokers, securities institutions, insurance companies, pension funds, investmentinstitutions, other institutional investors and other parties, including treasury departments of commercialenterprises and ®nance companies of groups, who or which trade or invest in securities in the conduct of abusiness or profession.

United Kingdom

This Circular was prepared solely for the use of and is directed in the United Kingdom at Overseas Shareholdersin the United Kingdom having professional experience in matters relating to investments that are `ÌnvestmentProfessionals'' as de®ned by Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion)Order 2001. Subject to the applicable provisions of the laws of the United Kingdom, the Distribution In Speciewill be available to Overseas Shareholders in the United Kingdom and the CCT Units will be distributed to suchOverseas Shareholders. Overseas Shareholders in the United Kingdom who do not have professional experiencein such matters relating to investments should not rely on this Circular.

United States

The CCT Units have not been and will not be registered under the U.S. Securities Act of 1933 as amended, foroffer or sale as part of their distribution and, subject to certain exceptions, may not be offered or sold in theUnited States or to U.S. persons. The CCT Units are not transferable except in accordance with the restrictionsdescribed herein.

CONTENTS

Page

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

INDICATIVE TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

LETTER TO SHAREHOLDERS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

(I) THE PROPOSED DISTRIBUTION IN SPECIE OF UNITS IN CAPITACOMMERCIALTRUST TO SHAREHOLDERS OF CAPITALAND LIMITED

1. Summary Information on CCT . . . . . . . . . . . . . . . . . . . . . . . . . . 10

2. Background to and Rationale for the Distribution In Specie . . . . . . . . . . . 15

3. Financial Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

4. How the Capital Reduction and the Distribution In Specie will be Implemented . 22

5. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

6. Shareholders' Entitlement to the CCT Units . . . . . . . . . . . . . . . . . . . 25

(II) THE PROPOSED MODIFICATIONS TO THE CAPITALAND SHARE OPTION PLAN,THE CAPITALAND PERFORMANCE SHARE PLAN AND THE CAPITALANDRESTRICTED STOCK PLAN

1. The Share Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

2. The Proposed Modi®cations to the Share Plans . . . . . . . . . . . . . . . . . 28

3. Rationale for the Proposed Modi®cations . . . . . . . . . . . . . . . . . . . . 28

4. Shareholders' Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

(III) GENERAL

1. Directors' Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

2. Irrevocable Undertaking given by STPL . . . . . . . . . . . . . . . . . . . . . 30

3. Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 30

4. Action to be taken by Shareholders . . . . . . . . . . . . . . . . . . . . . . . 30

5. Directors' Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . 31

6. Financial Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

7. Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

APPENDIX 1

Pro Forma Financial Statements of the Group . . . . . . . . . . . . . . . . . . . . . . . . 32

APPENDIX 2

The Proposed Modi®cations to the Share Plans . . . . . . . . . . . . . . . . . . . . . . . 35

APPENDIX 3

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . 40

PROXY FORM

1

DEFINITIONS

In this Circular, the following de®nitions apply throughout except where the context otherwiserequires:

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

`Àustraland'' : Australand Property Group

`Àward'' : A contingent award of Shares granted pursuant to theCapitaLand Performance Share Plan and/or the CapitaLandRestricted Stock Plan

``Bondholders'' : Holders of the Convertible Bonds

``Books Closure Date'' : A date to be announced on which the Transfer Books and theRegister of Members of the Company will be closed in order todetermine the entitlement of Shareholders to the CCT Units forthe purpose of the Distribution In Specie

``CapitaLand'' or the``Company''

: CapitaLand Limited

``CapitaLand Group'' or the``Group''

: CapitaLand, its subsidiaries, associated companies and jointventures

``Capital Reduction'' : The proposed capital reduction exercise under Section 73 of theAct to be carried out by the Company to effect the DistributionIn Specie

``CCL'' : CapitaLand Commercial Limited

``CCT'' : CapitaCommercial Trust

``CCT Unit'' or `Ùnit'' : A unit representing an undivided interest in CCT

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

``CFL'' : CapitaLand Financial Limited

``CFSL'' : CapitaLand Financial Services Limited, a wholly-ownedsubsidiary of CFL

``CMT'' : CapitaMall Trust

``COI'' : CapitaLand (Of®ce) Investments Pte Ltd

``Commercial Property'' : Property used, or predominantly used, for commercial purposes

``commercial purposes'' : In relation to the Manager's investment strategy in real estate,means all categories of commercial use including, but notlimited to, of®ce, car park, retail and other commercial uses,but speci®cally excluding real estate which is in the nature ofretail shopping malls or buildings which are used, orpredominantly used, for retail purposes

``Convertible Bonds'' : The S$380,000,000 5/8% convertible bonds due 2007 issued bythe Company, convertible by the Bondholders into Shares

``CPF'' : Central Provident Fund

``DBS Bank'' : DBS Bank Ltd

2

``Deposited Property'' : All the assets of CCT, including the Properties held in itsportfolio

``Directors'' : The directors of the Company as at the date of this Circular

``Distribution In Specie'' : The proposed distribution in specie of approximately 60% of thetotal number of issued CCT Units to Shareholders, on the basisof 200 CCT Units for every 1,000 Shares held as at the BooksClosure Date, by way of the Capital Reduction

`ÈBIT'' : Earnings before interest and taxation

`ÈBITDA'' : Earnings before interest, taxation, depreciation and amortisation

`Èffective Date'' : The date on which the Capital Reduction becomes effective

`ÈGM'' : The extraordinary general meeting of the Company to be held on12 April 2004 (and any adjournment thereof)

`ÈPS'' : Earnings per share

`ÈRCC'' : Executive Resource and Compensation Committee, a boardcommittee of the Company

``FY'' : Financial year ended or ending 31 December

``High Court'' : The High Court of the Republic of Singapore

`Ìntroductory Document'' : Introductory document dated 16 March 2004 issued inconjunction with the listing of CCT on the SGX-ST by way ofan introduction

`ÌRAS'' : Inland Revenue Authority of Singapore

``JPMorgan'' : J.P. Morgan (S.E.A.) Ltd

``KPMG'' : KPMG Singapore

``Latest Practicable Date'' : The latest practicable date prior to the printing of this Circular,being 10 March 2004

``Listing Date'' : The date of admission of CCT to the Of®cial List of the SGX-STand the date on which trading of the CCT Units commences

``Listing Manual'' : SGX-ST Listing Manual

``Manager'' : CapitaCommercial Trust Management Limited, as the managerof CCT

``MAS'' : Monetary Authority of Singapore

``NAV'' : Net asset value

``Net Lettable Area'' : Comprises the ¯oor area in a building that is to be leased,excluding common areas such as common corridors, lift shafts,®re escape staircases and toilets, and is usually the area inrespect of which rent is payable. In the case of shophouses,Net Lettable Area includes toilets and, where the letting is foran entire shophouse, includes staircases and toilets

``NTA'' : Net tangible assets

3

`Òverseas Shareholders'' : Shareholders whose registered addresses appearing in theCompany's Register of Members or Depository Register (as thecase may be) are outside Singapore

``PATMI'' : Pro®t after taxation and minority interests

``PREMAS'' : PREMAS International Limited

``Properties'' : The seven commercial properties comprising Capital Tower,6 Battery Road, Starhub Centre, Robinson Point, Bugis Village,Golden Shoe Car Park and Market Street Car Park

``Property Companies'' : The respective owners of the Properties being (i) Capital TowerPte Ltd; (ii) Clover Properties Pte Ltd; (iii) Cuppage Centre PteLtd; (iv) Robinson Point Pte Ltd; (v) Rochor Square Pte Ltd; (vi)Golden Square Pte Ltd; and (vii) CapitaLand Market Street PteLtd

``Property Fund Guidelines'' : The guidelines for real estate investment trusts issued by theMAS as Appendix 2 to The Code of Collective InvestmentSchemes

``Proposed Listing'' : The proposed listing of CCT on the SGX-ST by way of anintroduction

``Raf¯es Holdings'' : Raf¯es Holdings Limited

``Registrar'' : The Registrar of Companies and Businesses in Singapore

``REIT'' : Real estate investment trust

``Retained Holding'' : The CCT Units amounting to approximately 40% of the issuedCCT Units retained and held by CapitaLand's wholly-ownedsubsidiaries after the completion of the Capital Reduction andthe Distribution In Specie

``ROA'' : Return on assets

``ROE'' : Return on equity

``Securities Account'' : A securities account or sub-account maintained by a Depositorwith CDP

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

``Shares'' : Ordinary shares of S$1.00 each in the capital of the Company

``Shareholders'' : The registered holders of the Shares, except that where theregistered holder is CDP, the term ``Shareholders'' shall, inrelation to those Shares, mean Depositors whose SecuritiesAccounts are credited with those Shares

``Share Options'' : Share options to subscribe for new Shares granted pursuant tothe CapitaLand Share Option Plan

``Share Plans'' : The CapitaLand Share Option Plan, CapitaLand PerformanceShare Plan and CapitaLand Restricted Stock Plan collectively,which were approved and adopted by the Company on 16November 2000

``STPI'' : ST Property Investments Pte Ltd

4

``STPL'' : Singapore Technologies Pte Ltd

``Substantial Shareholder'' : A person who, in accordance with the Act, has an interest in notless than 5% of the issued voting Shares of the Company

``Tax Ruling'' : The tax ruling dated 10 December 2003 issued by IRAS on thetaxation of CCT and its Unitholders, including any modi®cation,amendment and revision that may be made to it up to the dateof this Circular

``The Ascott Group'' : The Ascott Group Limited

``Trust Deed'' : The Trust Deed dated 6 February 2004 made between theTrustee and the Manager constituting CCT

``Trustee'' : Bermuda Trust (Singapore) Limited, as the trustee of CCT

`Ùnitholder'' : The registered holder for the time being of a Unit, includingpersons so registered as joint holders, except where theregistered holder is CDP, the term `Ùnitholder'' shall, in relationto Units registered in the name of CDP, mean, where the contextrequires, the Depositor whose Securities Account with CDP iscredited with Units

``$'' or ``S$'' and ``cents'' : Singapore dollars and cents, respectively

`ÙS$'' : United States dollars

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

The terms ``Depositor'' and ``Depository Register'' shall have the meanings ascribed to themrespectively in Section 130A of the Act.

Except where speci®cally de®ned, the terms ``we'', `ùs'' and `òur'' in this Circular refer to the Group.

Words importing the singular shall, where applicable, include the plural and vice versa. Wordsimporting the masculine gender shall, where applicable, include the feminine and neuter genders.References to persons shall include corporations.

Any reference in this Circular to any enactment is a reference to that enactment as for the time beingamended or re-enacted. Any word de®ned under the Act or any statutory modi®cation thereof and nototherwise de®ned in the Circular shall have the same meaning assigned to it under the Act or anystatutory modi®cation thereof, as the case may be.

Any reference to a time of day in this Circular is made by reference to Singapore time unless otherwisestated.

5

INDICATIVE TIMETABLE

The following are the indicative dates and times for the Capital Reduction and the Distribution InSpecie:

Last date and time for lodgement of Proxy Forms for the EGM : 10 April 2004 at 10.30 a.m.

Date and time of EGM : 12 April 2004 at 10.30 a.m.(or as soon thereafterfollowing the conclusion oradjournment of the AnnualGeneral Meeting of theCompany to be held at 10.00a.m. on the same day and atthe same place)

Expected date for ®ling application with High Court : 13 April 2004

Expected date for High Court approval of the Capital Reduction : 4 May 2004

Expected Books Closure Date for the Distribution In Specie : 14 May 2004 at 5.00 p.m.

Expected Effective Date of the Capital Reduction and theDistribution in Specie

: 18 May 2004

Expected date for crediting CCT Units into the SecuritiesAccounts of Shareholders

: 18 May 2004

Expected date for commencement of trading of CCT Units onthe SGX-ST

: 19 May 2004

Notes:

(1) The timetable above is only indicative and the actual dates of the above events in italics will be announced in due course.

(2) Proxy Forms should be duly completed and deposited at the registered of®ce of the Company at 168 Robinson Road,30-01 Capital Tower, Singapore 068912, not less than 48 hours before the time appointed for the EGM. Completion and

return of a Proxy Form will not preclude a Shareholder from attending and voting in person at the EGM in place of his proxy.#

6


Directors: Registered Of®ce:

Philip Yeo Liat Kok (Chairman) 168 Robinson RoadHsuan Owyang (Deputy Chairman) 30-01 Capital TowerLiew Mun Leong (President & CEO) Singapore 068912Andrew BuxtonSir Alan CockshawRichard Edward HaleLim Chin BengPeter Seah Lim HuatSum Soon LimJackson Peter TaiLucien Wong Yuen Kuai

16 March 2004

To: The Shareholders of CapitaLand Limited

Dear Sir/Madam

(I) THE PROPOSED DISTRIBUTION IN SPECIE OF UNITS IN CAPITACOMMERCIAL TRUST TOSHAREHOLDERS OF CAPITALAND LIMITED; AND

(II) THE PROPOSED MODIFICATIONS TO THE CAPITALAND SHARE OPTION PLAN, THECAPITALAND PERFORMANCE SHARE PLAN AND THE CAPITALAND RESTRICTEDSTOCK PLAN

INTRODUCTION

Since CapitaLand was established following the merger of DBS Land Limited and Pidemco LandLimited in November 2000 (the ``Merger''), we have pursued a strategy of enhancingShareholder returns through:

^ Raising asset productivity;

^ Expanding overseas; and

^ Growing higher value-added services.

In another decisive step to deliver on our key business objectives, we announced on 6 February2004 our intention to establish a new REIT1 to be known as CapitaCommercial Trust.

CCT will be created in three distinct steps:

Step 1

The following seven commercial properties are transferred into a new REIT called CCT:

^ Capital Tower ^ Bugis Village^ 6 Battery Road ^ Golden Shoe Car Park^ Starhub Centre ^ Market Street Car Park^ Robinson Point

#

1 REITs are trusts that invest primarily in investment quality real estate with the aim of providing investors with regular andstable income distributions. An example of such a REIT is CMT which we launched in July 2002 and is today listed on theSGX-ST.

7

Step 2

Subject to Shareholders' approval, we will distribute in specie approximately 60% of the issuedunits in CCT to Shareholders. As a Shareholder, you will own an interest in these Propertiesdirectly rather than indirectly through your investment in the Shares (as is currently the case).

You will receive CCT Units in proportion to your shareholdings in CapitaLand. For every 1,000Shares that you own, you will receive 200 CCT Units. This will be done by means of theCapital Reduction and the Distribution In Specie.

Step 3

CCT will be listed on the SGX-ST by way of an introduction, and trading of CCT Units willcommence. As a Shareholder, you will then hold listed investments in both CapitaLand and CCT.

To demonstrate our commitment to CCT, we will retain (through our wholly-owned subsidiaries)approximately 40% of the issued CCT Units.

We believe that the creation of CCT and the distribution of CCT Units to all our Shareholders willbene®t both Shareholders and the Group.

Shareholders will benefit as follows:

^ You will receive a capital distribution from the Company in the form of publicly listedCCT Units that will be separately listed and traded on the SGX-ST.

^ You will receive a significantly higher proportion of the taxable income from theProperties under CCT ownership than would be the case under CapitaLand ownership.For the period from the date of the Distribution In Specie to 31 December 2004 and forFY2005, CCT will distribute 95.0% of its taxable income to Unitholders. Thereafter, CCTwill distribute at least 90.0% of its taxable income.

^ You stand to benefit from tax transparency granted to CCT if you are a QualifyingUnitholder (as defined on page 13 of this Circular), as CCT distributions will be receivedby you on a gross basis and you pay tax subsequently at your own applicable incometax rate.

^ You stand to benefit from the tax exemption as announced in the 2004 Budget ondistributions from CCT (excluding distributions of franked dividends) if you are anindividual holding the CCT Units as investment assets, irrespective of your nationalityor tax residence status. This is provided you do not hold the CCT Units through apartnership.

^ You may also bene®t from a potential re-rating of CapitaLand's share price given thestrategic implications of the Distribution In Specie for the Group, including thosedescribed immediately below.

The Distribution In Specie is expected to deliver the following benefits to the Group:

^ Achieve a more balanced portfolio of assets and income streams.

^ Enhance the capital productivity of the Group and improve ROA and ROE by reducingownership of capital intensive investment properties whilst continuing to generate feeincome from the continued management of the Properties and increasing the Group'srelative weighting of higher yielding assets.

^ Expand the Group's property funds management platform which allows us to increaseour fee-based income and deliver a larger business footprint with substantially lesscapital employed.

8

We are also taking the opportunity to propose, for your approval, certain modi®cations to theprovisions of the Share Plans to bring them in line with current market practice.

The purpose of this Circular is to provide you with details of the Capital Reduction and theDistribution In Specie, as well as details on the proposed modi®cations to the Share Plans, andto seek your approval for the same at the EGM, notice of which is set out on pages 40 to 41 ofthis Circular.

The Board recommends you to vote in favour of the Capital Reduction and the Distribution InSpecie, and urges you to complete, sign and return the Proxy Form enclosed with this Circularas soon as possible and in any event no later than 10.30 a.m. on 10 April 2004. Alternatively, theBoard welcomes you to attend the EGM in person to cast your vote.

If the Capital Reduction and the Distribution In Specie are approved by Shareholders at theEGM, no further action will be required on your part to receive the CCT Units. If you holdyour Shares through CDP, your Securities Account will be credited with CCT Units on oraround 18 May 2004. Alternatively, if you hold your Shares in scrip, you will be credited withCCT Units on or around 18 May 2004 by the entry of your name on the Register of Unitholdersto be maintained by the Trustee. The CCT Units are expected to commence trading on the SGX-ST on or around 19 May 2004.

9

(I) THE PROPOSED DISTRIBUTION IN SPECIE OF UNITS IN CAPITACOMMERCIAL TRUSTTO SHAREHOLDERS OF CAPITALAND LIMITED

1. SUMMARY INFORMATION ON CCT

You should also have received, together with this Circular, the Introductory Document whichsets out detailed information on CCT, including its properties and business, selected proforma ®nancial information, pro®t forecast and pro®t projection, risk factors and distributionpolicy. Please read the Introductory Document carefully. The following is a summary ofselected information on CCT, and should be read in conjunction with the IntroductoryDocument.

1.1 Property Portfolio

CCT is a Singapore-based unit trust established with the objective of owning and investing inreal estate and real estate-related assets which are income producing and used, orpredominantly used, for commercial purposes. There is no overlap with the investmentmandate of CMT which invests in properties which are used, or predominantly used, forretail purposes.

At the time of the Distribution In Specie, CCT holds the following Properties, some of whichare among Singapore's ®nest landmark assets:

Building Description Title

CommittedOccupancy

as at 31 Dec2003

AppraisedValue(1)

(S$' million)

Capital Tower Grade A 52-storey intelligentof®ce building located alongRobinson Road in Singapore'sprime business district

Leasehold estateexpiring31 December 2094

100.0% 793.9

....... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ..

6 Battery Road Grade A 42-storey of®cebuilding with four-storeypodium located in the heart ofRaf¯es Place, Singapore's®nancial and commercial hub

Leasehold estateexpiring19 April 2825

91.2% 675.2

....... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ..

Starhub Centre 10-storey of®ce building withretail space on the ®rst storeyand a food court on the secondstorey, located in the primeOrchard Road shopping belt

Leasehold estateexpiring31 January 2095

100.0% 266.1

....... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ..

Robinson Point 21-storey of®ce buildinglocated within 10 minutes' walkof the Raf¯es Place MRTstation

Freehold 72.6% 119.8

....... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ..

Bugis Village 34 three-storey pre-SecondWorld War shophouses thatwere restored in 1991, locatedin the Bugis Street/QueenStreet area

Leasehold estateexpiring30 March 2088(2)

89.9% 56.5(2)

.... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ..

Golden ShoeCar Park

10-storey building located onthe western end of MarketStreet, next to Raf¯es Place

Leasehold estateexpiring31 January 2081

100.0%(3) 72.1(4)

.... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ... ... ... .... ... ... ... ... ..

Market StreetCar Park

Eight-storey building boundedby Market Street, Cross Streetand Cecil Street, located nearRaf¯es Place

Leasehold estateexpiring31 March 2073

100.0%(5) 34.9

Average/Total 94.9% 2,018.5

10

Notes:

(1) Appraised value as at 31 December 2003, as provided by Knight Frank Pte Ltd.

(2) Takes into account the right of the President of the Republic of Singapore, as lessor under the State Lease forBugis Village, to terminate the State Lease on 1 April 2019 upon payment of a sum of S$6,610,208.53 plusaccrued interest. As at the date of this Circular, the CapitaLand Group is not aware of any intention on the partof the lessor to exercise such a right.

(3) Percentage refers to the committed occupancy of the retail and of®ce components of the building.

(4) The space on the second and third storeys (which was granted to the Ministry of the Environment of Singapore,free of rent, for use as a food centre) is excluded from the valuation.

(5) Percentage refers to the committed occupancy of the retail component of the building.

We believe that CCT's portfolio of seven commercial properties listed above offers a numberof key investment attractions to Unitholders:

^ Scale Ð CCT owns a portfolio comprising the seven Properties, which have beenindependently valued at S$2,018.5 million as at 31 December 2003. CCT's initialportfolio represents one of the largest Commercial Property portfolios in Singapore andwill provide sufficient diversification and scale to support the acquisition of additionalproperties without materially changing CCT's investment profile. The Manager intendsto leverage off this quality as a platform for growth in the future.

^ Quality and location Ð 68.0% of the total portfolio by Net Lettable Area comprisesGrade A office buildings in the Central Business District, namely Capital Tower and 6Battery Road, and more than 70.0% of the total gross rent2 for the month ended 31December 2003 is derived from these two buildings. The Properties are variouslylocated in the prime Raffles Place, Shenton Way, Tanjong Pagar, Orchard Road andBugis micro-markets for Commercial Properties, and are either in close proximity to oradjacent to Mass Rapid Transit (``MRT'') stations.

^ Occupancy and renewals Ð The Properties enjoy high, consistent and stableoccupancy rates. Based on committed leases, the Properties had an occupancy rate of94.9% as at 31 December 2003 (compared to a market occupancy rate of 82.1%) andfor FY2003, the renewal rate of the Properties (in terms of total Net Lettable Areacovered by the expired leases) was 72.6%. The portfolio's occupancy and renewallevels demonstrate the high quality of both the portfolio and its management personnel,who have largely been retained by CCT.

^ Diverse tenant base Ð The Properties have a diverse tenant base with 234 internationaland local tenants as at 31 December 2003 across a variety of business sectors, but witha predominance of foreign financial institutions, multinational corporations, aGovernment investment corporation as well as companies in the CapitaLand Group.

^ Long land leases Ð A signi®cant proportion of the Properties is either freehold or heldon long land leases in Singapore's prime business district. Robinson Point, for instance,is a freehold property while the land lease for 6 Battery Road is for a term of 999 yearsexpiring in the year 2825. As at 31 December 2003, these two properties togetheraccounted for 34.5% of the total Net Lettable Area and 39.4% of the aggregateappraised value of all the Properties, and are expected to generate cash ¯ow streamsover a longer period of time. The remaining Properties are primarily held on 99-yeartenure leases.

1.2 Key Features of CCT

Beyond the exposure to a large, high quality and diversi®ed portfolio, we believe that CCT willoffer Unitholders the following attractions:

Strategy to provide regular and stable distributions

One of CCT's primary objectives will be to provide Unitholders with regular and stabledistributions on a semi-annual basis. The stability of CCT's distributions is underpinned by

2 Consists of base rental income (after rent rebates, where applicable, but excluding turnover rent) and tenant service charge,which is a contribution paid by tenants towards the property expenses of each Property.

11

the diversity of its tenant base and their business sectors as well as the high, consistent andstable occupancy rates experienced by the Properties.

In accordance with market practice for listed REITs in Singapore, and to further enhance thestability of CCT's distributions, the Manager has agreed to receive such proportion of itsmanagement fees in respect of the period from the date of the Distribution In Specie to 31December 2004 and FY2005 as would be required to support, to the extent possible, theprojected distributions during the said periods, in the form of CCT Units (rather than cash).For each of the years ending 31 December 2006, 2007 and 2008, the Manager shallcontinue this practice to support, to the extent possible, a distribution per CCT Unit of 5.68cents. This should not be construed in any way as a forecast or projection of CCT's resultsof operations for the years ending 31 December 2006, 2007 and 2008 or of the prospectivereturns on CCT Units.

Experienced and professional management

Unitholders will bene®t from the experience of key staff members of the Manager in theSingapore Commercial Property market as well as the strengths and experience in propertymanagement of CapitaLand Commercial Management Pte. Ltd., the property manager of theProperties. The management fees payable to the Manager have a substantial performance-based element which is designed to align the interests of the Manager with those of theUnitholders, and which provides the Manager with an incentive to both grow revenue andminimise operating costs.

Opportunities for future growth through active asset management

The Manager will endeavour to increase the property yield of CCT's property portfolio and,correspondingly, the net asset value per CCT Unit through active asset management ofCCT's property portfolio, by: (i) raising or maintaining occupancy levels across theProperties; (ii) diversifying the tenant base; (iii) developing proactive marketing plans; and (iv)minimising property expenses in order to maximise returns from CCT's property portfolio.

Opportunities and a strategy for future growth through acquisitions

Various characteristics of CCT would enable it to make appropriate and potentially yield-accretive acquisitions that are expected to maintain or enhance returns to Unitholders andprovide potential for net asset growth. These characteristics include:

Ð CCT's initial portfolio of the seven Properties (independently valued at an aggregate ofS$2,018.5 million as at 31 December 2003), which provides sufficient diversificationand scale to support the acquisition of additional properties without materially changingCCT's investment profile;

Ð The financial flexibility provided by CCT's conservative capital structure; and

Ð CCT's suf®ciently wide mandate to invest in `ìncome producing properties that are used,or predominantly used, for commercial purposes''.

CCT has a competitive advantage in the acquisition of Commercial Properties as CCT'srelationship with CapitaLand provides CCT with access to the Group's market expertise,experience, knowledge and business network as well as a right of ®rst refusal overproperties with certain speci®ed characteristics which may in the future be identi®ed andtargeted for acquisition by CCL or any of its subsidiaries.

CapitaLand's interests substantially aligned with interests of Unitholders

Through its wholly-owned subsidiaries, CapitaLand will retain an approximately 40% stake inCCT following the completion of the Distribution In Specie. To demonstrate its commitment toCCT, CapitaLand has voluntarily subjected the Retained Holding to a lock-up arrangementwhich will be maintained for a period of one year from and including the Listing Date.Although the relevant subsidiary or subsidiaries of CapitaLand will be at liberty to sell ordispose their CCT Units after the one-year period, CapitaLand (directly or through itssubsidiaries) intends to be a long-term investor in CCT and to hold a substantial interest inCCT.

12

Further details on such lock-up arrangement can be found on page 147 of the IntroductoryDocument.

Conservative capital structure

The Manager aims to optimise CCT's capital structure and cost of capital within the borrowinglimits set out in the Property Funds Guidelines, and intends to use a combination of debt andequity to fund future acquisitions and property enhancements.

CCT will have, at the Listing Date, an initial level of indebtedness of S$580.0 million, or 28.0%of the value of its Deposited Property (based on the pro forma consolidated balance sheet asat 31 December 2003). By adopting this conservative gearing level, CCT will maintainoperating ¯exibility when considering future acquisition opportunities and capital expenditurerequirements.

Distribution policy

For the period from the date of the Distribution In Specie to 31 December 2004 and forFY2005, CCT will distribute 95.0% of its taxable income to Unitholders. Thereafter, CCT willdistribute at least 90.0% of its taxable income in accordance with the Tax Ruling, with theactual level of distribution to be determined at the Manager's discretion.

Setting the initial distribution policy of CCT at 95.0% of taxable income rather than 100.0%provides CCT with additional ®nancial ¯exibility, enhanced cash ¯ow management forworking capital purposes and the ability to fund unexpected capital expenditure. TheManager will continually seek to maximise the payout ratio while ensuring that CCT retainssuf®cient cash for funding and operational requirements.

Tax transparency for Qualifying Unitholders

Qualifying Unitholders will be taxed at the level of the Unitholders at their applicable incometax rates rather than at CCT level. ``Qualifying Unitholders'' refer to:

(a) tax resident Singapore-incorporated companies;

(b) bodies of persons registered or constituted in Singapore (for example, town councils,statutory boards, registered charities, registered co-operative societies, registered tradeunions, management corporations, clubs and trade and industry associations); and

(c) Singapore branches of foreign companies which have presented a letter of approvalfrom IRAS granting a waiver from tax deducted at source in respect of distributionsfrom CCT.

This tax transparency offers Qualifying Unitholders the bene®t of pre-tax distributions.

Distributions made to all other non-individual Unitholders will be subject to tax deducted atsource at the prevailing corporate tax rate. This tax deducted at source is not a ®nal tax.These non-individual Unitholders can use the tax deducted as a set off against theirSingapore income tax liabilities.

Tax exemption for distributions made to certain individuals

The Singapore Government announced in the 2004 Budget on 27 February 2004 thatdistributions from REITs that are authorised under Section 286 of the Securities and FuturesAct, Chapter 289 of Singapore (``SFA'') (excluding distributions out of franked dividends)derived on or after 1 January 2004 by individuals will be exempted from tax. This taxexemption does not apply to distributions that are derived through a partnership or areconsidered as gains or pro®ts from any trade, business or profession (i.e. distributionsassessable to tax under Section 10(1)(a) of the Income Tax Act, Chapter 134 of Singapore(the `Ìncome Tax Act'')).

13

Following this announcement and subject to the legislation of the tax exemption asannounced, distributions made to individuals, irrespective of their nationality or tax residencestatus, who hold the CCT Units as investment assets will be tax exempt. Distributions madeto individuals who hold the CCT Units as trading assets or through a partnership will be taxedat the applicable income tax rates of these individuals.

IRAS has also con®rmed that all individuals, other than those who hold the CCT Units througha partnership, will receive their distributions from CCT free of tax deducted at source.

1.3 Selected Financial Information

Number of CCT Units in issue 839,116,700

Aggregate appraised value of the Properties as at 31 December 2003,based on independent valuation done by Knight Frank Pte Ltd

S$2,018.5 million

Net property income in FY2003 (pro forma) S$94.7 million

Taxable income available for distribution to Unitholders in FY2003 (proforma)

S$71.5 million

Total Unitholders' funds as at 31 December 2003 (pro forma) S$1,459.8 million

NAV per CCT Unit as at 31 December 2003 (pro forma) S$1.74(1)

Note:

(1) The NAV per CCT unit has been revised from S$1.75 (as stated in the Company's announcement dated 6February 2004) to S$1.74, as CCT managed to obtain a higher level of borrowings of S$580 million from thecapital markets through the issuance of commercial mortgage backed securities by a conduit special purposecompany. The level of borrowings the Manager estimated it was able to obtain at the time the Company'sannouncement was made on 6 February 2004 was approximately S$570 million and the NAV per CCT unit ofS$1.75 was computed based on this level of borrowings.

The Capital Reduction and the Distribution In Specie will be made at the NAV of the Propertiesof S$1,459.8 million as at 31 December 2003, which translates into S$1.74 per CCT Unit (aftertaking into account expenses relating to the establishment of CCT and the issue of the CCTUnits). The NAV was arrived at by deducting net liabilities from the aggregate appraised valueof the Properties.

The price at which the CCT Units will trade when trading commences on the SGX-STwill be determined by the market, which is likely to take into account CCT's forecastdistribution income and the yields offered by comparable investment alternatives. Thetable on page 103 of the Introductory Document provides an illustrative market price rangeof a CCT Unit and its corresponding distribution yield.

1.4 Listing on the Main Board of the SGX-ST

CCT will be listed on the Main Board of the SGX-ST by way of an introduction. CCT hasreceived a letter of eligibility from the SGX-ST for the listing and quotation of the CCT Unitson the Main Board of the SGX-ST. Admission to the Of®cial List of the SGX-ST is not to betaken as an indication of the merits of the introduction, CCT, the Manager or the CCT Units.

1.5 Powers of the Manager and Trustee

The Manager has general power of management over the assets of CCT. The Manager's mainresponsibility is to manage CCT's assets and liabilities for the bene®t of Unitholders. TheManager also sets the strategic direction of CCT and makes recommendations to theTrustee on the acquisition, divestment or enhancement of assets of CCT in accordance withits stated investment strategy.

14

The Trustee is Bermuda Trust (Singapore) Limited. The Trustee's powers and duties include:

(a) acting as trustee of CCT and, in such capacity, safeguarding the rights and interests ofthe Unitholders, for example, by satisfying itself that transactions it enters into for and onbehalf of CCT with a related party of the Manager or CCT are conducted on normalcommercial terms, are not prejudicial to the interests of CCT and the Unitholders, andin accordance with all applicable requirements of the Property Funds Guidelines and/orthe Listing Manual relating to the transaction in question;

(b) holding the assets of CCT on trust for the benefit of the Unitholders; and

(c) exercising all the powers of a trustee and the powers that are incidental to the ownershipof the assets of CCT.

Further details on the Trustee's powers and duties can be found on page 159 of theIntroductory Document.

1.6 Interested Person Transactions relating to CCT

You should note that by voting in favour of the Capital Reduction and the Distribution InSpecie, you are deemed to have speci®cally approved the interested person transactionsdescribed in the sections ``The Manager and Corporate Governance Ð Related PartyTransactions In Connection with the Setting Up of CapitaCommercial Trust'' and ``TheManager and Corporate Governance Ð Certain Other Related Party Transactions'' of theIntroductory Document.

2. BACKGROUND TO AND RATIONALE FOR THE DISTRIBUTION IN SPECIE

2.1 Our strategy since the formation of CapitaLand

Since CapitaLand was established after the Merger, we have sought to increase total returnsto Shareholders through three main thrusts:

^ Raise asset productivity by achieving higher asset turnover, divesting low-yielding assetsand reducing ownership of capital intensive properties whilst continuing to generate feeincome from the continued management of such properties;

^ Expand overseas; and

^ Grow higher value-added services.

2.2 How we have delivered on our strategy in the past three years

We have raised asset productivity through the following measures:

(a) We have increased the Group's asset turnover, in particular by stepping up ourresidential property development business, notably in China and Australia. We havelaunched a number of highly successful residential developments in Shanghai in thelast two years. These include Summit Residences, La CiteÂ and Oasis Riviera. InAustralia, our subsidiary, Australand, has sold approximately 7,700 land lots, housesand apartment units during FY2002 and FY2003.

(b) We have embarked on a number of initiatives to improve the yields of our investmentproperties. Plaza Singapura, a retail mall located in Singapore's prime shopping district,was refurbished and repositioned for higher yield. Clarke Quay, a shopping precinctlocated alongside the Singapore River, is being revitalised through an iconicdevelopment based on a unique design by Alsop, a renowned firm of architects. Weare also re-developing the office property One George Street.

15

(c) We have adopted a more capital-efficient growth model through the use of propertyfunds and REITs. We pioneered the first REIT in Singapore, with the launch of CMT inJuly 2002. The creation of CMT enabled us to increase our capital productivity throughthe transfer of three retail malls to CMT while continuing to provide property and fundmanagement services for these malls. In December 2003, we launched theapproximately S$500 million CapitaRetail Singapore Limited fund (``CRS'') to invest inthree retail malls, namely Lot One Shoppers' Mall, Bukit Panjang Plaza and RivervaleMall. We will earn fee-based income for rendering property and fund managementservices to CRS.

(d) We have lightened our asset base considerably. The Group has monetised over S$3billion worth of assets since the Merger. Major monetisation projects undertaken by theCompany and its subsidiaries include the sale of Pidemco Centre (now known as OneGeorge Street), The Adelphi and part of Temasek Tower to the Eureka Of®ce Fund in2001, and the sale of Raf¯es Holdings' 55.0% stake in Raf¯es City (Private) Limitedalso in 2001; the sale of Ascott's stake in Somerset Grand Shanghai serviced residenceand the initial public offering of CMT in 2002; and the sale of Brown's Hotel by Raf¯esHoldings in 2003.

We have increased overseas contribution:

(e) Over the past three years, we have strengthened our real estate businesses in overseasmarkets such as Australia and China and expanded our hospitality businesses globally.We are now one of the top foreign developers in Shanghai while our subsidiary,Australand, is a leading home builder in Australia. In 2001, our hotel subsidiary, Raf¯esHoldings, acquired SwissoÃ tel Holding AG, signi®cantly increasing its global presence. Inthe last three years, our serviced residence subsidiary, The Ascott Group, also expandedits portfolio signi®cantly through acquisitions. These included the pan-EuropeanCitadines Group and the Oakford chain in Australia. Our overseas revenue hasincreased from 50.6% of the total revenue in FY2000 to 64.3% in FY2003. Moresigni®cantly, overseas EBIT has risen to 81.3% of total EBIT in FY2003 compared witha loss in FY2000.

We have grown the range of our value-added services. In the process, we have reduced ourreliance on income derived from asset ownership and increased our fee-based income:

(f) We have grown our retail management business significantly. The number of mallsowned and/or managed by the Group has grown to 33 by the end of 2003, making theGroup one of the largest mall managers in Asia. Apart from Lot One Shoppers' Mall,Bukit Panjang Plaza and Rivervale Mall, all of which were acquired through CRS, in2003, we also acquired La Park Mizue, a retail mall in Tokyo, while CMT expanded itsretail portfolio to four properties with the acquisition of IMM Building. All theseacquisitions, which are or will be held in property funds or REITs, are part of ourstrategy to grow our retail management business while keeping our equity investmentlow.

(g) Our hospitality subsidiaries, The Ascott Group and Raffles Holdings, have expandedtheir portfolio of managed properties in line with their strategy to grow through fee-based management contracts. In 2003, The Ascott Group signed on six newmanagement contracts in Malaysia, Thailand, Australia, China and the United ArabEmirates. In the same year, Raffles Holdings secured four management contracts inJapan, Thailand and The Grenadines.

(h) We have set up a business unit to provide real estate financial products and services.While the first steps in developing financial products and services were taken byPidemco Land Limited prior to the Merger, we stepped up our efforts to grow thisbusiness in the last two years. Leveraging on our real estate domain knowledge andfinancial skills, the products and services provided by CFL include REITs, propertyfunds, mezzanine financing and financial advisory and structuring services. As at 31December 2003, CFL has S$3.1 billion of assets under its fund management business,and has also advised on financial structuring of transactions involving assets worth atotal of S$2.0 billion.

16

(i) Our property services subsidiary, PREMAS, has evolved into a total real estatemanagement company, providing technology-based products and services. Theseinclude facility management for high-tech industries, total building management andenergy management. With this change in focus, PREMAS is targeting new industrialsegments which include pharmaceutical, semi-conductor and wafer fabrication plants.

2.3 Why the launch of CCT will be another signi®cant step for the Group

One of our foremost corporate objectives has been to transform the Group from a Singapore-focused asset-heavy property developer and owner into an international real estate group withfund management services as a key component of its more capital-ef®cient business portfolio.

We believe that the launch of CCT will represent another major step towards achieving thisgoal.

2.3.1 Achieve a more balanced portfolio of asset mix and income streams

The Distribution In Specie will enable us to further re-balance our income streams and assetmix across our various geographic markets, property sectors and business units.

Diversi®cation across Geographic Markets

When CapitaLand was established in 2000, we stated our plan to reduce the Singaporecommercial portfolio subject to market conditions. As the pie charts below illustrate, theDistribution In Specie will enable us to move signi®cantly closer to that objective, byreducing our ownership of assets in Singapore from S$10,864 million (61.9% of total assets)to S$9,395 million (58.4% of total assets) assuming for balance sheet purposes that theDistribution In Specie had been effected on 31 December 2003.

The Distribution In Specie will also result in more balanced income streams across thegeographic markets in which we operate. For FY2003, the Group derived 81.3% of its EBITfrom its overseas operations. Assuming that the Distribution In Specie had occurred on 1January 2003 for the purposes of the pro®t and loss accounts, this percentage would haverisen to 86.2%.

38.1%61.9%

41.6% 58.4%

After the Distribution In SpecieFY2003 Assets: S$16.1 billion

Before the Distribution In SpecieFY2003 Assets: S$17.6 billion

Singapore Overseas

17

81.3%

After the Distribution In SpecieFY2003 EBIT: S$562 million

Before the Distribution In SpecieFY2003 EBIT: S$596 million

Singapore Overseas

18.7%

86.2%

13.8%

If provisions were excluded from the calculation to give a normalised effect, overseas EBIT forFY2003 would have been 64.6% of the Group's EBIT and it will rise to 69.9% assuming thatthe Distribution In Specie had occurred on 1 January 2003.

The pie charts above show that our overseas markets are able to generate proportionatelyhigher EBIT relative to asset base, as compared to the mature Singapore market, hence thebene®t of reducing our capital concentration in Singapore. With the Distribution In Specie, theGroup will become less dependent on the mature Singapore property market for earnings, andwill increase its emphasis on other geographic markets with higher growth potential.

Diversi®cation across Property Sectors

The Distribution In Specie will also have a tangible impact on the percentage of the Group'stotal assets accounted for by of®ce properties. As the following pie charts illustrate, had theDistribution In Specie taken place on 31 December 2003 for balance sheet purposes, theGroup's exposure to of®ce properties would have been reduced from 32.7% to 26.6%.

The Distribution In Specie will allow the Group to reduce its dominant weighting of of®ceassets to a more balanced 26.6%, roughly equal to the Group's weighting of assets in theresidential sector.

9.6%

11.8% 1.1%

4.7%

14.5%2.7%

22.9%

32.7%

1.2%

10.5%

12.9%

5.1%

15.8%2.9%

25.0%

26.6%

Residential Office RetailIndustrial Mixed Developments HotelServiced Residences Others

After the Distribution In SpecieFY2003 Property value: S$13.3 billion

Before the Distribution In SpecieFY2003 Property value: S$14.5 billion

18

Diversi®cation across Business Units

With the Distribution In Specie, the Group will derive a greater percentage of its EBIT from itslocal and international residential development activities, which generate higher pro®t marginsand higher ROA.

The pie charts below show that for FY2003, the Group derived 15.3% of its EBIT from itscommercial and ®nancial business unit. Had the Distribution In Specie occurred on 1January 2003, this percentage would have been reduced to 10.3%. As at 31 December2003, the commercial and ®nancial business unit accounted for 38.0% of the Group's totalassets. Had the Distribution In Specie taken place on 31 December 2003, this percentagewould have been 32.3% instead.

6.8%

9.2%

10.1% 15.3%

58.6%

7.2%

9.7%

10.7%

10.3%

62.1%

Commercial& Financial

Residential Ascott Raffles PREMAS & Others

After the Distribution In SpecieFY2003 EBIT: S$562 million

Before the Distribution In SpecieFY2003 EBIT: S$596 million

3.5%

12.2%

14.1%

38.0%

32.2%

3.9%

13.3%

15.4%32.3%

35.1%

After the Distribution In SpecieFY2003 Assets: S$16.1 billion

Before the Distribution In SpecieFY2003 Assets: S$17.6 billion

Commercial& Financial

Residential Ascott Raffles PREMAS & Others

2.3.2 Enhancing capital productivity and improving ROA and ROE

The transfer of the Properties into CCT followed by the distribution of approximately 60% ofthe CCT Units to Shareholders will reduce the Group's total assets by 8.4% or S$1,469 millionon a pro forma basis. The Group's EBIT, however, will only be reduced by a lesser 5.6% orS$33.4 million on a pro forma basis. The combined effect of a greater reduction in assets thanincome is an improvement in the Group's ROA.

19

The low reduction in income is made possible by the fact that the Group will receiveapproximately 40% of the distributions of CCT from its Retained Holding, while receiving100% of CCT's property and fund management fees. Shareholders, as owners ofapproximately 60% of CCT, will receive much higher distributions from the Properties underCCT ownership than they currently do under CapitaLand ownership.

By distributing approximately 60% of CCT Units to Shareholders, the Group's shareholders'funds will be reduced by 15.0%. However, as PATMI will only be reduced by a lesser 8.8%or S$9.3 million on a pro forma basis, the combined effect of a greater reduction in theGroup's shareholders' funds than income is an improvement in the Group's ROE.

As a result of the above enhancement of capital productivity, the ROA of the Group forFY2003 would have increased from 2.62% to 2.66% while the ROE of the Group for FY2003would have risen from 1.73% to 1.87%, both on a pro forma basis.

While the FY2003 pro forma ROA and ROE improvements are modest, the capital productivityimprovements are lasting and sustainable bene®ts for CapitaLand and Shareholders.Undertaking the Distribution In Specie is expected to lead to greater ROA and ROE bene®tsin future years.

2.3.3 Increased fee income from an expanded property funds management platform

Our existing property funds management platform which includes CMT, CRS, Eureka Of®ceFund, CapitaLand China Residential Fund and IP Property Fund Asia, will be substantiallyexpanded by the creation of CCT. This important platform allows us to increase our fee-based income and deliver a larger business footprint with substantially less capital employedthan direct ownership of assets.

The attraction of fee-based income derived from funds management operations includes thefact that it is less vulnerable to swings in assets values, while strong fee income growth canbe achieved from existing vehicles under management through asset enhancement andproperty acquisitions, again with little additional capital investment by us.

The creation of CCT will enable us to increase our recurring fee-based income without theGroup having to own 100% of the Properties as was previously the case.

2.3.4 Higher and more regular dividend income for Shareholders

CCT, as a REIT, will distribute to its Unitholders a signi®cantly higher proportion of taxableincome received from the Properties than was the case under their CapitaLand ownership.

For the period from the date of the Distribution In Specie to 31 December 2004 and forFY2005, CCT will distribute 95.0% of its taxable income to Unitholders. Thereafter, CCT willdistribute at least 90.0% of its taxable income in accordance with the Tax Ruling.

2.3.5 Tax Transparency for Qualifying Unitholders and Tax Exemption for certain individuals

Apart from receiving higher total gross dividends after the Distribution In Specie, you alsostand to bene®t from tax transparency granted to CCT if you are a Qualifying Unitholder, asCCT distributions will be received by you on a gross basis and you pay tax subsequently atyour own applicable income tax rate.

IRAS has con®rmed that if you are an individual, irrespective of your nationality or taxresidence status, you will receive distributions from CCT free of tax deducted at source. Thistax transparency does not apply if you hold the CCT Units through a partnership. If you holdthe CCT Units as investment assets, you will be exempt from tax on such distributions.However, if you hold the CCT Units as trading assets or through a partnership, you will betaxed on distributions from CCT at your applicable personal income tax rate.

20

In addition, whereas you will effectively pay tax at the prevailing corporate tax rate onSingapore dividends received from companies under the one-tier tax system, which will befully implemented in 2008, you will have the bene®t of paying tax on distributions from CCTat your own applicable income tax rate. If you are an individual who holds the CCT Units asinvestment assets and these CCT Units are not held through a partnership, you will have thebene®t of not having to pay tax on distributions from CCT.

2.4 The Group remains a leading Asia-Paci®c property player

Notwithstanding the transfer of the Properties, the Group will remain a leading propertycompany in Asia-Paci®c with total assets of S$16,089 million, as shown in the table below:

As at 31 December 2003

Before theDistributionIn Specie

(S$ 'million)

After theDistributionIn Specie

(S$ 'million) Change (%)

Total assets 17,558 16,089 (8.4)

Shareholders' funds 6,078 5,164 (15.0)

After the Distribution In Specie, the Group will continue to retain its strong presence inSingapore's residential and commercial property sectors. The Group will also continue toexpand internationally, with an already strong presence in the Australian property market; inChina through various property investments in Chinese gateway cities such as Beijing andShanghai; and by growing its activities in Thailand, Japan and other countries.

3. FINANCIAL EFFECTS

The pro forma financial effects of the Distribution In Specie on selected financial measuresand ratios of the Group are set out below, and have been computed using the latest auditedconsolidated figures of the Group, on the basis that the Distribution In Specie is accounted forin the Group's accounts at net book value, and that the Distribution In Specie had takenplace:

(a) for the purposes of the balance sheet, on 31 December 2003, being the date to whichthe latest full-year audited accounts of the Group were made up; and

(b) for the purposes of the pro®t and loss accounts, on 1 January 2003, being the start ofthe latest audited ®nancial year.

As these ®nancial effects are based on the Company's audited consolidated ®nancial resultsfor FY2003 and are presented for illustration purposes only, they will not re¯ect the future®nancial position of the Group following completion of the Capital Reduction and theDistribution In Specie in 2004.

Before the DistributionIn Specie(S$'000)

After the DistributionIn Specie(1), (2)

(S$'000)

Pro®t & Loss Account

EBIT 595,591 562,200

PATMI 105,254 95,953

EPS (basic) (cents) 4.2 3.8

EPS (fully diluted) (cents) 4.2 3.8

Balance Sheet

Issued share capital 2,517,350 2,517,350

Share premium account 3,429,376 2,544,289

Shareholders' funds 6,077,579 5,163,556

NTA 6,041,438 5,127,415

21

Before the DistributionIn Specie(S$'000)

After the DistributionIn Specie(1), (2)

(S$'000)

NTA per Share (S$) 2.40 2.04

Total borrowings 7,548,334 7,018,993

Cash and cash equivalents 1,476,486 1,450,754

Net borrowings 6,071,848 5,568,239

Financial Ratios

ROA 2.62% 2.66%

ROE 1.73% 1.87%

Debt equity ratio 0.75 0.78

Interest cover ratio 3.67 4.04

Interest servicing ratio 5.52 5.87

De®nitions Used

(a) EPS (basic) = PATMI 7 weighted average number of Shares in issue during the year

(b) EPS (fully diluted) = PATMI 7 weighted average number of Shares adjusted for effects of certain Share Optionswhich are dilutive. In this regard, the Convertible Bonds and Share Options whose conversion or exercise priceswhich are above S$1.55, the closing market share price as at 31 December 2003, are disregarded.

(c) NTA per Share = (shareholders' funds - intangible assets) 7 number of Shares in issue as at year-end

(d) ROA = (pro®t after tax + interest expense) 7 average total assets

(e) ROE = PATMI 7 average shareholders' funds

(f) Debt equity ratio = net borrowings 7 (shareholders' funds + minority interests)

(g) Interest cover ratio = EBITDA 7 net interest expense

(h) Interest servicing ratio = operating cash ¯ow 7 net interest paid

Notes:

(1) Post-Distribution In Specie pro forma ®nancial effects on the pro®t and loss account are arrived at afteraccounting for adjustments which are expected to occur every year. One-off ®nance and transaction costs to becharged to the pro®t and loss account in the year the Capital Reduction occurs are not taken into account.

(2) Such ®nancial effects do not take into account the impact of any conversion of the Convertible Bonds or exerciseof the Share Options.

Detailed pro forma ®nancial statements of the Group after the establishment of CCT and theDistribution In Specie are set out in Appendix 1 to this Circular.

4. HOW THE CAPITAL REDUCTION AND THE DISTRIBUTION IN SPECIE WILL BEIMPLEMENTED

4.1 Key Steps

The Capital Reduction and the Distribution In Specie will involve the reduction of the amountstanding to the credit of the share premium account of the Company by a maximum amountof approximately S$952 million, assuming that all outstanding Share Options and ConvertibleBonds, which are exercisable or convertible into Shares (as the case may be) as at the LatestPracticable Date are exercised or converted prior to the Books Closure Date.

As at the Latest Practicable Date, the Company has an authorised share capital ofS$4,000,000,000 and US$172,500 divided into 4,000,000,000 Shares and 172,500redeemable convertible cumulative preference shares of US$1.00 each respectively. Theissued and paid-up share capital of S$2,518,630,013 is divided into 2,518,630,013 Shares.As at the Latest Practicable Date, there were S$380,000,000 outstanding Convertible Bondsheld by the Bondholders exercisable into 162,685,161 Shares, and there were 90,626,758outstanding Share Options granted to eligible participants under the Share Plans. Out of the90,626,758 Share Options, 26,285,585 Share Options are exercisable into 26,285,585 Sharesas at the Latest Practicable Date.

22

Depending on the number of new Shares which may be issued as a result of the possibleexercise of the Share Options or conversion of the Convertible Bonds prior to the BooksClosure Date, the aggregate sum to be distributed to Shareholders pursuant to the CapitalReduction amounts to a maximum of approximately S$952 million based on the enlargedissued share capital of CapitaLand, assuming that all outstanding Share Options and theConvertible Bonds which are exercisable or convertible into Shares (as the case may be) asat the Latest Practicable Date are exercised or converted prior to the Books Closure Date.

Such an aggregate sum will be distributed to Shareholders by way of a distribution in specieof a total of up to 541,520,152 CCT Units, representing approximately 64.5% of the totalnumber of units in CCT, to Shareholders in proportion to the number of Shares that you areholding as at the Books Closure Date. For every 1,000 Shares that you hold on the BooksClosure Date, you will be entitled to receive 200 CCT Units. The CCT Units will bedistributed to you free of encumbrances and together with all rights attaching thereto on andfrom the date the Distribution In Specie is effected.

4.2 Effect of the Capital Reduction and Distribution In Specie

The effect of the Capital Reduction and the Distribution In Specie is to return to Shareholdersan aggregate sum of up to approximately S$952 million in the form of CCT Units to bedistributed to Shareholders on a pro rata basis as set out above. The issued and paid-upshare capital of the Company will remain the same after the Distribution In Specie, andaccordingly there will be no change in the number and par value of the ordinary shares inthe capital of the Company held by the Shareholders immediately after the Capital Reductionand the Distribution In Specie.

Pursuant to the Share Plans and the terms and conditions of the Convertible Bonds, thesubscription price of each Share Option or the number of Shares comprised in each ShareOption, the number of Shares comprised in each Award and the conversion price of eachConvertible Bond will be adjusted as a consequence of the Capital Reduction and theDistribution In Specie. For the Share Options and Awards, such adjustments to be made tothe subscription prices of or number of Shares comprised in the Share Options and thenumber of Shares comprised in the Awards shall come into effect upon written noti®cation ofthe adjustments to the holders of the Share Options and Awards in accordance with the rulesof the Share Plans. For the Convertible Bonds, such adjustments to be made to theconversion price shall come into effect on the Effective Date.

4.3 Con®rmation from Auditors

KPMG has con®rmed that as at 31 December 2003, the Company's share premium accountamounting to S$2,161 million is suf®cient to effect the Capital Reduction and the DistributionIn Specie.

4.4 No Payment Required

Shareholders should note that they will not be required to pay for any CCT Units receivedpursuant to the Distribution In Specie.

4.5 Conditions

The Capital Reduction and the Distribution In Specie are subject to, inter alia, the following:

(a) the approval of Shareholders for the Capital Reduction and the Distribution In Specie atthe EGM;

(b) the Capital Reduction being approved and confirmed by the High Court and a copy ofthe Order of Court approving the Capital Reduction being electronically filed with theRegistrar; and

(c) such other regulatory approvals as may be required.

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4.6 Suspension of the Share Plans

To facilitate the distribution in specie of the CCT Units and for ease of administration, theexercise of the Share Options and the grant of Awards under the Share Plans (as the casemay be) will be suspended for a period to be determined by the Directors, up to andincluding the Books Closure Date.

4.7 Date of Crediting

Subject to the above conditions being satis®ed, it is expected that the Securities Accounts ofShareholders who are Depositors will be credited with CCT Units on or about 18 May 2004.Shareholders who are not Depositors will be credited with CCT Units on or about 18 May2004 by the entry of their names on the Register of Unitholders to be maintained by theTrustee. Please refer to ``Shareholders' Entitlement to the CCT Units'' on pages 25 to 27 ofthis Circular for further details.

5. TAXATION

5.1 Tax Implications on the Company

5.1.1 Income Tax

The Distribution In Specie should not give rise to adverse income tax implications on theCompany to the extent that the Capital Reduction is made out of the Company's contributedcapital, as de®ned under the Income Tax Act.

On the basis that the effect of the Capital Reduction and the Distribution In Specie is to returnto Shareholders a total of up to approximately S$952 million in the form of CCT Units, theCompany has suf®cient contributed capital to effect the Capital Reduction wholly out of itscontributed capital.

5.1.2 Stamp Duty

The Commissioner of Stamp Duties has indicated in a letter dated 28 November 2003 thatinstruments executed for the disposal of CCT Units will not be subject to stamp duty.Accordingly, the Distribution In Specie, as well as any instrument executed to effect theDistribution In Specie, will not be subject to stamp duty.

5.2 Tax implications on Shareholders

Shareholders should note that the statements below are not to be regarded as tax advice or acomplete and comprehensive analysis of all tax implications on Shareholders arising from theDistribution In Specie, the ownership and subsequent disposal of CCT units. The statementsdo not purport to deal with the tax consequences applicable to all categories of Shareholders.The statements are of a general nature and are based on Singapore tax laws in effect and onadministrative and judicial interpretations of these tax laws, as of the Latest Practicable Date,all of which are subject to change and any such changes may take effect on a retroactivebasis. Shareholders should consult their own professional advisers on the tax implicationsthat may apply to their own individual circumstances. Shareholders who may be subject totax in a jurisdiction other than Singapore should also consult their own professional advisers.

5.2.1 Income Tax

On the basis that the Company will be making the Capital Reduction out of its contributedcapital and does have suf®cient contributed capital for this purpose, the Distribution InSpecie will be treated as a return of capital to Shareholders. A return of capital is generallynot liable to income tax. Should the return of capital received by a Shareholder exceed hiscost of investment in the Shares, the excess may be subject to tax in certain circumstances,for example, where a Shareholder holds the Shares as trading assets of a trade or business ofdealing in shares.

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5.2.2 Stamp Duty

The Commissioner of Stamp Duties has indicated in a letter dated 28 November 2003 thatinstruments executed for the disposal of CCT Units will not be subject to stamp duty.Accordingly, a disposal of a CCT Unit by any Shareholder will not be subject to stamp duty.

6. SHAREHOLDERS' ENTITLEMENT TO THE CCT UNITS

6.1 Notice of Books Closure Date

An announcement will be made to notify Shareholders of the Books Closure Date in duecourse. As the Books Closure Date will be announced before the High Court's approval andcon®rmation for the Capital Reduction, the Books Closure Date will be subject to the HighCourt's con®rmation and approval for the Capital Reduction. Con®rmation of the BooksClosure Date will be announced upon the High Court's approval and con®rmation for theCapital Reduction.

6.2 Entitlement

Pursuant to the Capital Reduction and Distribution In Specie, Shareholders will receive oneCCT Unit for every ®ve Shares held as at the Books Closure Date, with any fraction of aCCT Unit arising from the Distribution In Specie to be disregarded. For example, for every1,000 Shares held by the Shareholders as at the Books Closure Date, each Shareholder willreceive 200 CCT Units.

6.3 Scripless Shares

In the case of Shareholders being Depositors, entitlements to the CCT Units will bedetermined on the basis of the number of Shares standing to the credit of their respectiveSecurities Accounts as at the Books Closure Date. Following the Books Closure Date, CDPwill credit their Securities Accounts with the relevant number of CCT Units and will sendeach such Depositor a noti®cation letter con®rming the number of CCT Units that has beencredited to his Securities Account.

6.4 Scrip Shares

In the case of Shareholders not being Depositors, entitlements to the CCT Units will bedetermined on the basis of their holdings of Shares appearing in the Register of Members ofthe Company as at the Books Closure Date. Shareholders not being Depositors who have notalready done so, are requested to take the necessary action to ensure that the Shares ownedby them are registered in their names or in the names of their nominees by the Books ClosureDate.

Following the Books Closure Date, the names of each Shareholder not being a Depositor aswell as relevant number of CCT Units held by each such Shareholder will be entered into theRegister of Unitholders maintained by the Trustee. The entries in the Register of Unitholdersshall be conclusive evidence of the number of CCT Units held by each Shareholder not beinga Depositor. Shareholders not being Depositors should note that they will not be able to tradein such CCT Units on the SGX-ST unless they make appropriate arrangements for such CCTUnits to be held by CDP and recorded as such in the Register of Unitholders maintained bythe Trustee.

6.5 CPF Funded Shareholders

In the case of Shareholders who have purchased Shares using their CPF funds, entitlementsto the CCT Units will be determined on the basis of the number of Shares standing to thecredit of their respective Investment Accounts (``CPFIA'') as at the Books Closure Date.Following the Books Closure Date, CDP will credit their CPFIAs with the relevant number ofCCT Units. Each such Shareholder will be sent a noti®cation letter con®rming the number ofCCT Units that has been credited to his CPFIA.

25

6.6 Overseas Shareholders

6.6.1 General

Where the Directors are of the view that the distribution of the CCT Units to any OverseasShareholders may infringe any relevant foreign law or necessitate compliance with conditionsor requirements which they regard as onerous by reasons of costs, delay or otherwise, theCCT Units which such Overseas Shareholders would have been entitled to pursuant to theCapital Reduction and the Distribution In Specie (the `Òverseas Shareholders' CCT Units'')will not be transferred to such Overseas Shareholders.

Instead, the Overseas Shareholders' CCT Units will be transferred to nominee(s) appointed bythe Company, who shall sell the Overseas Shareholders' CCT Units and thereafter, distributethe aggregate amount of the net proceeds, after deducting all dealing and other expenses inconnection therewith, proportionately among such Overseas Shareholders in accordance withtheir respective entitlements to the CCT Units as at the Books Closure Date in full satisfactionof their rights to the CCT Units to which they would otherwise have become entitled under theCapital Reduction and the Distribution In Specie, and where the net proceeds to which anyparticular Overseas Shareholder is entitled shall be less than S$10.00, such net proceedsshall be retained for the bene®t of the Company, and no Overseas Shareholder shall haveany claim whatsoever against CDP and the Company in connection therewith.

6.6.2 Australia

This Circular is for the exclusive use of Shareholders in connection with the proposed CapitalReduction and Distribution In Specie. No product disclosure statement (``PDS'') is requiredunder the Corporations Act 2001 and no such document has been or will be prepared orlodged with the Australian Securities and Investments Commission. No conduct in relation tothe Distribution In Specie has been authorised by CapitaLand to occur in Australia.

The CCT Units are being distributed for the purposes outlined in paragraph 2 ``Background toand Rationale for the Distribution In Specie'' above, and not for the purpose of Shareholdersselling or transferring the CCT Units, or granting, issuing or transferring interests in, or optionsor warrants over, the CCT Units. Shareholders must not distribute this Circular in Australia orengage in any conduct in relation to the CCT Units that would require the preparation of aPDS, CCT to be registered as a managed investment scheme, or require an AustralianFinancial Services Licence (where an appropriate licence is not already held). Any sale of theCCT Units must be on the SGX-ST or to a person to whom it would be lawful to offer the CCTUnits without them being given a PDS.

6.6.3 Hong Kong

This Circular is for the exclusive use of Shareholders in connection with the proposed CapitalReduction and Distribution In Specie. Accordingly, this Circular must not be distributed,published or reproduced (in whole or in part), disclosed by Shareholders to any other personin Hong Kong or used for any purpose in Hong Kong other than in connection withShareholders' consideration of the Capital Reduction and the Distribution In Specie. ThisCircular does not constitute an offer or invitation for the sale or purchase of securities inHong Kong and shall not form the basis of any contract.

6.6.4 Malaysia

Overseas Shareholders in Malaysia should note that the distribution of the CCT Units to themis subject to the approval of the Securities Commission of Malaysia. An application has beenmade to the Securities Commission of Malaysia for such approval but there is no assurancethat such approval will be given or obtained in time for the distribution of the CCT Units. Ifsuch approval is not given or not obtained in time for the distribution of the CCT Units, or ifthe approval is subject to compliance with conditions or requirements which, in the view ofthe Directors, are onerous by reasons of costs, delay or otherwise, such OverseasShareholders will not receive their entitlements to the CCT Units, but will receive the netproceeds of the sale of the CCT Units which they otherwise would have been entitled to, inthe manner set out in paragraph 6.6.1 above.

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6.6.5 The Netherlands

The CCT Units will not be offered, sold, transferred or delivered, whether directly or indirectly,as part of their initial distribution or any time thereafter, to any individual or legal entity situatedin The Netherlands other than to individuals or legal entities who or which trade or invest insecurities in the conduct of their profession or business within the meaning of the ExemptionRegulation of December 21 1995 issued pursuant to The Netherlands Securities MarketSupervision 1995 Act (``Wet Toezicht Effectenverkeer 1995''). These include, but are notlimited to, banks, brokers, securities institutions, insurance companies, pension funds,investment institutions, other institutional investors and other parties, including treasurydepartments of commercial enterprises and ®nance companies of groups, who or whichtrade or invest in securities in the conduct of a business or profession. OverseasShareholders in The Netherlands who are not individuals or legal entities who or which tradeor invest in securities in the conduct of their profession or business within the meaning of theExemption Regulation of December 21 1995 issued pursuant to Wet Toezicht Effectenverkeer1995 will instead receive the net proceeds of the sale of the CCT Units which they otherwisewould have been entitled to, in the manner set out in paragraph 6.6.1 above.

6.6.6 United Kingdom

This Circular was prepared solely for the use of and is directed in the United Kingdom atOverseas Shareholders in the United Kingdom having professional experience in mattersrelating to investments that are `Ìnvestment Professionals'' as de®ned by Article 19 of theFinancial Services and Markets Act 2000 (Financial Promotion) Order 2001. Subject to theapplicable provisions of the laws of the United Kingdom, the Distribution In Specie will beavailable to Overseas Shareholders in the United Kingdom and the CCT Units will bedistributed to such Overseas Shareholders. Overseas Shareholders in the United Kingdomwho do not have professional experience in such matters relating to investments should notrely on this Circular.

6.6.7 United States

The CCT Units have not been and will not be registered under the U.S. Securities Act of 1933as amended (the ``Securities Act''), for offer or sale as part of their distribution and may notbe offered, sold or delivered in the United States or to, or for the account or bene®t of, anyU.S. person, unless the CCT Units are registered under the Securities Act or an exemptionfrom the registration requirements of the Securities Act is available, in each case inaccordance with all applicable securities laws of the states of the United States.

6.7 Odd-lot Trading

The CCT Units will be traded in board lots of 1,000 units. However, a temporary odd-lotcounter will be set up for two calendar months from the date for commencement of tradingof CCT Units on the SGX-ST (``Concession Period'') to allow trading in board lots of 100CCT Units. CCT Units are expected to commence trading on or about 19 May 2004.

To provide Unitholders a more economical avenue to trade and/or round up their odd lots ofCCT Units, CapitaLand has arranged for DBS Vickers Securities (S) Pte Ltd (``DBSV'') to offerconcessionary brokerage rates for the trading in CCT Units during the Concession Period. Theminimum brokerage fee payable by those who trade on the temporary odd-lot counter duringthe Concession Period through DBSV will be S$20.00 per contract, instead of the usualS$30.00. After the Concession Period, Unitholders can trade in odd lots of CCT Units in theSGX-ST's Unit Share Market which allows trading of odd lots with a minimum of one CCTUnit.

For trades in board lots of 1,000 CCT Units, the usual brokerage fee applies.

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(II) THE PROPOSED MODIFICATIONS TO THE CAPITALAND SHARE OPTION PLAN, THECAPITALAND PERFORMANCE SHARE PLAN AND THE CAPITALAND RESTRICTEDSTOCK PLAN

1. THE SHARE PLANS

The Share Plans were adopted on the merger of DBS Land Limited and Pidemco LandLimited in November 2000 to establish CapitaLand. A summary of the rules of the SharePlans was set out in the Appendix 6 of the Scheme Document dated 21 September 2000issued to the shareholders of DBS Land Limited. We are proposing certain modi®cations tothe provisions of the Share Plans to bring the Share Plans in line with current market practice.

2. THE PROPOSED MODIFICATIONS TO THE SHARE PLANS

We propose to modify Rule 11.1 of the CapitaLand Share Option Plan, and Rule 9.1 of each ofthe CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan.

Existing Rule 11.1 of the CapitaLand Share Option Plan and existing Rule 9.1 of each of theCapitaLand Performance Share Plan and the CapitaLand Restricted Stock Plan permit theERCC to adjust outstanding Share Options or Awards (as the case may be) if a variation inthe issued ordinary share capital (whether by capitalisation of pro®t or reserve or rightsissue, reduction, subdivision, consolidation, distribution or otherwise) shall take place.

Rule 11.1 of the CapitaLand Share Option Plan and Rule 9.1 of each of the CapitaLandPerformance Share Plan and the CapitaLand Restricted Stock Plan currently do not haveany provisions for adjustments to be made in the event of a declaration of a special dividend(whether in cash or in specie). Normally such a declaration does not involve a variation in theissued ordinary share capital of the Company. We propose that Rule 11.1 of the CapitaLandShare Option Plan and Rule 9.1 of each of the CapitaLand Performance Share Plan and theCapitaLand Restricted Stock Plan be modi®ed to give the ERCC the discretion to adjust theoutstanding Share Options or Awards (as the case may be) in the event that the Companymakes a declaration of a special dividend (whether in cash or in specie). Such provisions arealso proposed to be modi®ed to give the ERCC the discretion to adjust the outstanding ShareOptions or Awards in the event the Company varies its reserves.

Any determination by the ERCC as to whether to make an adjustment and if so, the manner inwhich such an adjustment should be made, would have to be con®rmed by the auditors of theCompany to be fair and reasonable.

Further, the ERCC would also have to bear in mind, and comply with, Rule 850(2) of theListing Manual when determining the manner in which any adjustments should be made,which provides that any adjustments made must be made in such a way that a participant ofthe Share Plans will not receive a bene®t that a Shareholder does not receive.

3. RATIONALE FOR THE PROPOSED MODIFICATIONS

Currently the adjustments to outstanding Share Options or Awards (as the case may be) mayonly be made in the event of a variation in the issued ordinary share capital of the Company,for example, where the Company implements a bonus issue of ordinary shares.

Paying a special dividend or otherwise making a distribution out of the Company's reserveswill have the same dilution effect on the Share Options and Awards as a distribution out ofthe Company's issued ordinary share capital. Just as the Share Plans permit adjustments tothe Share Options and Awards to be made in the event of a variation in the share capital,adjustments should similarly be permitted in the event of a special dividend or a variation inthe Company's reserves.

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The proposed alterations to Rule 11.1 of the CapitaLand Share Option Plan and Rule 9.1 ofeach of the CapitaLand Performance Share Plan and the CapitaLand Restricted Stock Planwill give the ERCC the ability and the discretion to determine whether an adjustment shouldbe made (and if so, the manner in which it should be made) where the interests of participantsof the Share Plans are diluted due to a variation in the reserves of the Company or adeclaration of a special dividend (whether in cash or in specie).

While the ERCC may have such discretion, any adjustment would have to be con®rmed by theauditors of the Company to be fair and reasonable and cannot be made in a way that wouldconfer a bene®t not received by Shareholders as required in Rule 850(2) of the Listing Manual.

4. SHAREHOLDERS' APPROVAL

The proposed modi®cations are subject to approval of Shareholders at the EGM.

Details to the proposed modi®cations to Rule 11.1 of the CapitaLand Share Option Plan andRule 9.1 of each of the CapitaLand Performance Share Plan and the CapitaLand RestrictedStock Plan are set out in Appendix 2 to this Circular.

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(III) GENERAL

1. DIRECTORS' RECOMMENDATION

1.1 The Capital Reduction and the Distribution In Specie

Having considered the terms of and the rationale for the Capital Reduction and theDistribution In Specie, the Directors are of the opinion that the Capital Reduction and theDistribution In Specie are in the interests of the Company and the Shareholders.Accordingly, the Directors recommend that Shareholders vote in favour of Resolution 1,being the Special Resolution relating to the Capital Reduction and the Distribution In Specie.

1.2 The Proposed Modi®cations to the Share Plans

As all the Directors hold Share Options or Awards (as the case may be) under the Share Plans,they will accordingly abstain from making any recommendation on the proposed modi®cationsto the Share Plans to Shareholders.

2. IRREVOCABLE UNDERTAKING GIVEN BY STPL

As at the Latest Practicable Date, STPL is a majority shareholder of the Company and hasgiven an irrevocable undertaking to the Company to vote, or procure the voting of, all theShares in which it and its wholly-owned subsidiary, STPI, have a bene®cial interest, asre¯ected in the Depository Register and/or the Register of Members of the Company 48hours before the EGM, in favour of the Special Resolution to approve the Capital Reductionand the Distribution In Specie at the EGM.

3. EXTRAORDINARY GENERAL MEETING

The EGM, notice (the ``Notice'') of which is set out on pages 40 to 41 of this Circular, will beheld at STI, 168 Robinson Road, Level 9 Capital Tower, Singapore 068912 on 12 April 2004 at10.30 a.m. (or as soon thereafter following the conclusion or adjournment of the AnnualGeneral Meeting of the Company to be held at 10.00 a.m. on the same day and at the sameplace) for the purposes of considering and, if thought ®t, passing with or without anymodi®cations, the resolutions set out in the Notice.

A Depositor shall not be regarded as a Shareholder entitled to attend the EGM and to speakand vote thereat unless he is shown to have Shares entered against his name in theDepository Register, as certi®ed by CDP as at 48 hours before the EGM.

4. ACTION TO BE TAKEN BY SHAREHOLDERS

4.1 Abstention from voting

As required under Rule 859 of the Listing Manual, any Shareholder who is eligible toparticipate in the Share Plans (such as, inter alia, employees of the Company and itssubsidiaries) must abstain from voting in the EGM in respect of Resolution 2, being theOrdinary Resolution relating to the proposed modi®cations to the Share Plans. SuchShareholder should also decline to accept appointment as proxies for any Shareholder tovote in respect of Resolution 2, unless the Shareholder concerned shall have giveninstructions in his proxy form as to the manner in which his vote is to be cast in respect ofResolution 2.

4.2 Appointment of Proxies

You will ®nd enclosed with this Circular the Notice and a Proxy Form.

If you are unable to attend the EGM and you wish to appoint a proxy to attend and vote onyour behalf, you should complete, sign and return the attached Proxy Form in accordancewith the instructions printed thereon as soon as possible and, in any event, so as to reachthe registered of®ce of the Company at 168 Robinson Road, 30-01 Capital Tower,Singapore 068912, not later than 48 hours before the time ®xed for the EGM. Yourcompletion and return of a Proxy Form will not prevent you from attending and voting inperson at the EGM if you so wish.

#

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5. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors (including those who may have delegated detailed supervision of this Circular)collectively and individually accept responsibility for the accuracy of the information given inthis Circular and con®rm, having made all reasonable enquiries, that to the best of theirknowledge and belief, the facts stated and opinions expressed in this Circular are fair andaccurate in all material respects as at the date of this Circular and that there are no materialfacts the omission of which would make any statement in this Circular misleading in anymaterial respect.

Where information has been extracted or reproduced from published or otherwise publiclyavailable sources, the sole responsibility of the Directors has been to ensure throughreasonable enquiries that such information is accurately extracted from such sources or, asthe case may be, re¯ected or reproduced in this Circular.

6. FINANCIAL ADVISERS

6.1 Financial Advisers

The Company has appointed CFSL, DBS Bank and JPMorgan as its ®nancial advisers inrespect of the Capital Reduction and the Distribution In Specie. CFSL is an indirect wholly-owned subsidiary, and the real estate ®nancial services arm, of CapitaLand. CFSL has beengranted a capital markets services licence under the SFA by MAS for the regulated activitiesof dealing in securities and advising on corporate ®nance. The Company will also pay toCFSL, DBS Bank and JPMorgan customary fees for acting as ®nancial advisers, as well asits legal and other expenses.

6.2 Responsibility Statement

CFSL, DBS Bank and JPMorgan, as ®nancial advisers to the Company in respect of theCapital Reduction and the Distribution In Specie, each acknowledges that, based on theinformation provided by the Company and having made reasonable enquiries and to the bestof its knowledge and belief, this Circular constitutes full and true disclosure of all materialfacts on the Capital Reduction and Distribution In Specie. Where the information has beenextracted from published or publicly available sources or otherwise based on informationprovided by the Company, the sole responsibility of each of CFSL, DBS Bank and JPMorganhas been to ensure that such information is accurately extracted from these sources or, as thecase may be, re¯ected or reproduced in this Circular.

7. ADDITIONAL INFORMATION

Your attention is drawn to the additional information as set out in the Appendices to thisCircular.

Yours faithfullyFor and on behalf ofthe Board of Directors ofCAPITALAND LIMITED

Philip Yeo Liat KokChairman

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APPENDIX 1

PRO FORMA FINANCIAL STATEMENTS OF THE GROUP

Balance Sheet as at 31 December 2003

S$'000

As at31 December 2003

(audited)

Adjustmentspursuant to the

DistributionIn Specie Pro Forma

Non-Current Assets

Property, Plant and Equipment 1,318,015 (441)(1) 1,317,574

Intangible Assets 36,141 36,141

Investment Properties 6,583,170 (2,018,500)(1) 4,564,670

Properties Under Development 156,635 156,635

Interest in Associated Companies 1,741,210 575,576 (2) 2,316,786

Interest in Joint Venture Companies 1,269,743 1,269,743

Interest in Partnerships 51,241 51,241

Financial Assets 193,061 193,061

Deferred Tax Assets 16,797 16,797

Other Non-Current Assets 37,771 37,771

11,403,784 9,960,419

Current Assets

Development Properties for Sale 3,552,375 3,552,375

Consumable Stock 14,752 14,752

Trade and Other Receivables 952,587 (144)(1) 952,443

Financial Assets 158,416 158,416

Cash and Cash Equivalents 1,476,486 (25,732)(1) 1,450,754

6,154,616 6,128,740

Less: Current Liabilities

Bank Overdrafts 720 720

Trade and Other Payables 1,361,502 1,361,502

Short Term Loans 1,051,868 (529,341)(3) 522,527

Current Portion of Term Loans 510,873 510,873

Current Portion of Debt Securities 1,129,061 1,129,061

Provision for Taxation 196,505 (5,484) (1) 191,021

4,250,529 3,715,704

Net Current Assets 1,904,087 2,413,036

Less: Non-Current Liabilities

Term Loans 3,399,964 3,399,964

Debt Securities 1,455,848 1,455,848

Deferred Tax Liabilities 94,072 (5,205) (1) 88,867

Deferred Income 22,965 22,965

Other Non-Current Liabilities 273,415 (15,188) (1) 258,227

5,246,264 5,225,871

8,061,607 7,147,584

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S$'000

As at31 December 2003

(audited)


DistributionIn Specie Pro Forma

Representing:

Share Capital 2,517,350 2,517,350

Reserves 3,560,229 (914,023)(4) 2,646,206

Share Capital and Reserves 6,077,579 5,163,556

Minority Interests 1,984,028 1,984,028

8,061,607 7,147,584

Notes:

1. These adjustments represent the assets and liabilities of the Property Companies being deconsolidated from the Group.

2. This represents the Group's interest in CCT net of its share of transaction costs.

3. This relates to a reduction in borrowings as a result of the net cash consideration received from CCT.

4. This adjustment relates to the Capital Reduction and the related transaction costs effected through the Group's reserves.

5. The above pro forma ®nancial statements do not take into account the effects of any conversion of Convertible Bonds orexercise of Share Options.

33

Pro®t & Loss Account for FY2003

S$'000FY2003(audited)

Recurring(1)


DistributionIn Specie

Recurring(1)

Pro Forma

One-off(2)


DistributionIn Specie

All-Inclusive(2)

Pro Forma

Revenue 3,830,086 (107,400)(3) 3,722,686 3,722,686

Cost of Sales (2,800,906) 18,696 (4) (2,782,210) (2,782,210)

Gross pro®t 1,029,180 940,476 940,476

Other operating income 236,233 (46)(4) 236,187 236,187

Administrative expenses (554,489) 1,866 (4) (552,623) (552,623)

Other operating expenses (173,231) 26,631 (5) (146,600) (146,600)

Pro®t from Operations 537,693 477,440 477,440

Finance costs (240,767) 23,716 (6) (217,051) (7,330)(9) (224,381)

Share of results of:

Ð associated companies 84,022 26,862 (7) 110,884 (14,481) (10) 96,403

Ð joint venturecompanies (18,806) (18,806) (18,806)

Ð partnerships (7,318) (7,318) (7,318)

Pro®t before taxation 354,824 345,149 323,338

Taxation (150,292) 374 (8) (149,918) (149,918)

Pro®t after taxation 204,532 195,231 173,420

Minority interests (99,278) (99,278) (99,278)

Net pro®t attributable toshareholders 105,254 95,953 74,142

Notes:

1. ``Recurring Pro Forma'' is arrived at after accounting for those types of adjustments which are expected to occur every year(``Recurring Adjustments'').

2. `Àll-Inclusive Pro Forma'' includes, besides Recurring Adjustments, one-off ®nance and transaction costs to be charged tothe pro®t and loss account in the year the Capital Reduction exercise occurs.

3. This represents the revenue of the Property Companies being de-consolidated from the Group (S$119,919,000) partiallyoffset by certain management fees earned (S$12,519,000) under the CCT structure.

4. These adjustments represent certain cost of sales, other operating income and administrative expenses of the PropertyCompanies being de-consolidated from the Group.

5. This relates to a reduction in the Group's share of revaluation de®cits of the Properties as a result of a reduction inownership in the Property Companies after the proposed Distribution In Specie.

6. This represents the net reduction in ®nance costs upon repayment of certain borrowings of the Group from the net cashconsideration received from CCT.

7. This represents the Group's share of results of CCT, computed based on its 40% interest held, determined in accordancewith the Group's accounting policies.

8. This relates to the net tax effects on the Group's earnings after the proposed Distribution In Specie.

9. This relates to a one-off ®nance cost incurred for a standby credit facility in connection with the Capital Reduction exercise.

10. This represents the Group's share of the one-off transaction costs borne by CCT charged to the Pro®t and Loss Account inaccordance with the Group's accounting policies.

11. The above pro forma ®nancial statements do not take into account the effects of any conversion of Convertible Bonds orexercise of Share Options.

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APPENDIX 2

THE PROPOSED MODIFICATIONS TO THE SHARE PLANS

The proposed modi®cations to the Share Plans are set out below. For ease of reference and whereappropriate, the full text of the relevant Rules of the Share Plans which are proposed to be modi®edhave been reproduced.

The CapitaLand Share Option Plan

Existing Rule 11.1

11.1 If a variation in the issued ordinary share capital of the Company (whether by way of acapitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation,distribution or otherwise) shall take place, then:±

(a) the Subscription Price of the Shares, the nominal amount, class and/or number of Sharescomprised in an Option to the extent unexercised; and/or

(b) the nominal amount, class and/or number of Shares over which future Options may begranted under the Plan,

shall be adjusted in such manner as the Committee may determine to be appropriate.

Proposed modi®cation to Existing Rule 11.1

Existing Rule 11.1 shall be deleted in its entirety and the following substituted therefor:

11.1 If a variation in the share capital or reserves of the Company (whether by way of a capitalisationof profits or reserves or rights issue, reduction, subdivision, consolidation, distribution orotherwise) shall take place or if the Company shall make a declaration of a special dividend(whether in cash or in specie), then the Committee may as it deems appropriate determinewhether:±

(a) the Subscription Price of the Shares, the nominal amount, class and/or number of Sharescomprised in an Option to the extent unexercised; and/or

(b) the nominal amount, class and/or number of Shares over which future Options may begranted under the Plan,

shall be adjusted and, if so, the manner in which such adjustment shall be made. Any adjustmentunder this Rule 11 shall be made in a way that a Participant will not receive a bene®t that aholder of Shares does not receive.

The CapitaLand Performance Share Plan

Existing Rule 9.1


(a) the nominal amount, class and/or number of Shares which are the subject of an Award tothe extent not yet Vested; and/or

(b) the nominal amount, class and/or number of Shares in respect of which future Awards maybe granted under the Plan,


35

Proposed modi®cation to existing Rule 9.1





shall be adjusted and, if so, the manner in which such adjustment shall be made. Any adjustmentunder this Rule 9 shall be made in a way that a Participant will not receive a bene®t that a holderof Shares does not receive.

The CapitaLand Restricted Stock Plan

Existing Rule 9.1





Proposed modi®cation to existing Rule 9.1





shall be adjusted and, if so, the manner in which such adjustment shall be made. Any adjustmentunder this Rule 9 shall be made in a way that a Participant will not receive a bene®t that a holderof Shares does not receive.

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APPENDIX 3

ADDITIONAL INFORMATION

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued and paid-up share capital of the Companycomprises 2,518,630,013 Shares. As at the Latest Practicable Date, the Company has anaggregate of 90,626,758 outstanding options granted to eligible participants under the SharePlans to subscribe for new Shares at exercise prices ranging from S$1.02 to S$2.68 for eachnew Share.

2. DISCLOSURE OF INTERESTS

2.1 Directors

The interests of the Directors in the Shares as recorded in the Register of Directors'Shareholdings as at the Latest Practicable Date are set out below:

------- Direct Interest ------ ----- Indirect Interest ----

Number ofShares

comprised inoutstanding

optionsgranted by

the CompanyName of DirectorNo. of

Issued Shares %No. of

Issued Shares %

Philip Yeo Liat Kok Ð Ð Ð Ð 617,700

Hsuan Owyang Ð Ð Ð Ð 790,000

Liew Mun Leong(1) Ð Ð Ð Ð 4,327,000

Andrew Buxton 50,000 Ð Ð Ð 233,850

Sir Alan Cockshaw Ð Ð Ð Ð 724,630

Richard Edward Hale Ð Ð Ð Ð 344,850

Lim Chin Beng Ð Ð Ð Ð 600,010

Peter Seah Lim Huat 113,000 Ð Ð Ð 270,000

Sum Soon Lim Ð Ð Ð Ð 637,700

Jackson Peter Tai 50,000 Ð Ð Ð 500,000

Lucien Wong Yuen Kuai Ð Ð Ð Ð 383,850

Note:

(1) Mr Liew Mun Leong has also been granted conditional awards of 250,000 and 400,000 performance shares underthe CapitaLand Performance Share Plan to be delivered after 2004 and 2005 respectively. The actual number ofperformance shares to be delivered will depend on the achievement of set targets over a three year period. Forachievements that are below 80% of the targets, no performance shares will be given while for achievements thatexceed targets, more performance shares than the original award could be delivered up to a maximum of 200% ofthe original award.

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2.2 Substantial Shareholders

The interests of the Substantial Shareholders in the Shares as recorded in the Register ofSubstantial Shareholders as at the Latest Practicable Date are set out below:

------- Direct Interest ------ ------- Indirect Interest ------ -------- Total Interest -------

Name of SubstantialShareholder

No. of IssuedShares %



ST Property InvestmentsPte Ltd 328,344,838 13.04 Ð Ð 328,344,838 13.04

Singapore TechnologiesPte Ltd 1,120,748,933 44.50 406,019,838 (1) 16.12 1,526,768,771 60.62

Temasek Holdings(Private) Limited Ð Ð 1,579,369,271 (2) 62.71 1,579,369,271 62.71

Notes:

(1) ST Property Investments Pte Ltd (``STPI'') is a wholly-owned subsidiary of Singapore Technologies Pte Ltd (``STPL'').By virtue of Section 7 of the Companies Act, Chapter 50, STPL is deemed to have an interest in (a) the 328,344,838Shares held by STPI; (b) the 1,300,000 Shares held by other companies within the Singapore Technologies group;and (c) the 76,375,000 Shares subject to the terms of securities lending agreements entered into with ®nancialinstitutions.

(2) Temasek Holdings (Private) Limited (``Temasek'') directly holds 81.3% of the issued share capital of STPL and has adeemed interest (by virtue of Section 7 of the Companies Act, Chapter 50) in the 18.7% of the issued share capital ofSTPL held by Singapore Technologies Holdings Pte Ltd (``STH'') by virtue of STH being wholly-owned by Temasek.Accordingly, Temasek is deemed to be interested in 1,526,768,771 Shares held by the Singapore Technologiesgroup by virtue of the foregoing and 52,600,500 Shares held by other companies within the Temasek group.Temasek is wholly-owned by the Minister for Finance (Incorporated).

3. MATERIAL LITIGATION

As at the Latest Practicable Date, the Directors are not aware of any litigation, claims orproceedings pending or threatened against the Company or any of its subsidiaries or any factslikely to give rise to any litigation, claims or proceedings which, in the opinion of the Directors,might materially and adversely affect the ®nancial position of the Company and its subsidiariestaken as a whole.

4. CONSENTS

CFSL, DBS Bank, JPMorgan, KPMG and Knight Frank Pte Ltd have given and have notwithdrawn their written consents to the issue of this Circular with the inclusion herein of theirnames and all references to their names in the form and context in which they appear.

5. VOTING

Pursuant to the Articles of Association of the Company, a resolution put to the vote of a generalmeeting of the Company shall be decided on a show of hands unless a poll is (before or on thedeclaration of the result of the show of hands) demanded by:

(a) the chairman of the general meeting;

(b) any member of the Company present in person or by proxy and entitled to vote thereat;

(c) a member of the Company present in person or by proxy and representing not less thanone-tenth of the total voting rights of all the members of the Company having the right tovote at the general meeting; or

(d) a member of the Company present in person or by proxy and holding Shares conferring aright to vote at the general meeting being Shares on which an aggregate sum has beenpaid up equal to not less than one-tenth of the total sum paid on all the Shares conferringthat right;

38

provided always that no poll shall be demanded on the choice of a chairman or on a question ofadjournment.

A demand for a poll may be withdrawn only with the approval of the general meeting. Unless apoll is demanded a declaration by the chairman of the general meeting of the Company that aresolution has been carried, or carried unanimously, or by a particular majority, or lost, and anentry to that effect in the minute book, shall be conclusive evidence of that fact without proofof the number or proportion of the votes recorded for or against such resolution.

If a poll is duly demanded, it shall be taken in such manner (including the use of ballot or votingpapers or tickets) as the chairman of the general meeting may direct, and the result of the pollshall be deemed to be the resolution of the general meeting at which the poll was demanded.The chairman of the general meeting may (and if so directed by the general meeting shall),appoint scrutineers and may adjourn the general meeting to some place and time ®xed by himfor the purpose of declaring the result of the poll. In the case of an equality of votes, whether ona show of hands or on a poll, the chairman of the general meeting at which the show of handstakes place or at which the poll is demanded shall be entitled to a casting vote.

A poll demanded on any question shall be taken either immediately or at such subsequent time(not being more than 30 days from the date of the general meeting) and place as the chairman ofthe general meeting may direct. No notice need be given of a poll not taken immediately. Thedemand for a poll shall not prevent the continuance of the general meeting for the transactionof any business other than the question on which the poll has been demanded.

No objection shall be raised as to the admissibility of any vote except at the general meeting oradjourned general meeting at which the vote objected to is or may be given or tendered andevery vote not disallowed at such meeting shall be valid for all purposes. Any such objectionshall be referred to the chairman of the general meeting whose direction shall be ®nal andconclusive. On a poll, votes may be given either personally or by proxy and a person entitled tomore than one vote need not use all his votes or cast all the votes he uses in the same way.

6. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents may be inspected at the registered office of the Company at168 Robinson Road, 30-01 Capital Tower, Singapore 068912, during normal office hours fromthe date of this Circular up to and including the date of the EGM:

(a) the Memorandum and Articles of Association of the Company;

(b) the annual reports of the Company for FY2001 and FY2002, and the audited financialstatements for FY2003;

(c) the auditors' letter of confirmation referred to in paragraph 4.3 of Section I of the Letter toShareholders on page 23 of this Circular;

(d) the rules of the Share Plans; and

(e) the letters of consent from CFSL, DBS Bank, JPMorgan, KPMG and Knight Frank Pte Ltdreferred to in paragraph 4 above.

#

39


NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of CapitaLand Limited (the``Company'') will be held at STI, 168 Robinson Road, Level 9 Capital Tower, Singapore 068912, on12 April 2004 at 10.30 a.m. (or as soon thereafter following the conclusion or adjournment of theAnnual General Meeting of the Company to be held at 10.00 a.m. on the same day and at the sameplace) for the purpose of considering and, if thought ®t, passing with or without amendment, thefollowing Resolutions, of which Resolution 1 will be proposed as a Special Resolution, andResolution 2 will be proposed as an Ordinary Resolution:

SPECIAL RESOLUTION

Resolution 1: Approval for the Capital Reduction and the Distribution In Specie

That:

(a) the sum standing to the credit of the share premium account of the Company be reduced by amaximum of S$952 million (the ``Capital Reduction''), with such reduction to be effected by thedistribution in specie of the said sum in the form of units (``CCT Units'') in CapitaCommercialTrust (the ``Distribution In Specie'') free of encumbrances and together with all rights attachingthereto on and from the date the Distribution In Specie is effected, to existing Shareholders, asat such date to be determined by the Directors of the Company as the date on which theRegister of Members and the Transfer Books of the Company will be closed (the ``BooksClosure Date''), in the proportion of one CCT Unit for every five shares held by theShareholders as at the Books Closure Date, fractional entitlements to be disregarded and to bedisposed of or dealt with in such manner and for such purpose as the Directors deem fit in theinterests of the Company; and

(b) the Directors of the Company and each of them be and is/are hereby authorised and empoweredto complete and to do all such acts and things, and to approve, modify and execute suchdocuments, as they may consider necessary or expedient to give effect to the CapitalReduction and the Distribution In Specie.

ORDINARY RESOLUTION

Resolution 2: Proposed Modi®cations to the CapitaLand Share Option Plan, the CapitaLandPerformance Share Plan and the CapitaLand Restricted Stock Plan

That:

(a) Rule 11.1 of the CapitaLand Share Option Plan be and is hereby modified, in the manner and tothe extent as set out in Appendix 2 to the circular to shareholders dated 16 March 2004 (the``Circular'');

(b) Rule 9.1 of the CapitaLand Performance Share Plan be and is hereby modified, in the mannerand to the extent as set out in Appendix 2 to the Circular; and

(c) Rule 9.1 of the CapitaLand Restricted Stock Plan be and is hereby modi®ed, in the manner andto the extent as set out in Appendix 2 to the Circular.

By Order of the Board

Tan Wah NamCompany Secretary

16 March 2004

40

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies toattend and vote in his stead.

2. A member of the Company which is a corporation is entitled to appoint its authorised representative or proxy to vote on itsbehalf.

3. A proxy need not be a member of the Company.

4. The instrument appointing a proxy must be deposited at the registered of®ce of the Company at 168 RobinsonRoad, 30-01 Capital Tower, Singapore 068912, not less than 48 hours before the time set for the Meeting.#

41

This page has been intentionally left blank.


PROXY FORMÐ EXTRAORDINARY GENERAL MEETING

*I/We (Name)

of (Address)

being a member/members of CAPITALAND LIMITED (the ``Company'') hereby appoint:

Name AddressNRIC/

Passport NumberProportion of my

Shareholdings (%)

and/or (delete as appropriate)

or, failing him/her, the Chairman of the Meeting as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Extraordinary General Meeting of theCompany to be held at STI, 168 Robinson Road, Level 9 Capital Tower, Singapore 068912 on 12 April2004 at 10.30 a.m. (or as soon thereafter following the conclusion or adjournment of the AnnualGeneral Meeting of the Company to be held at 10.00 a.m. on the same day and at the same place)and at any adjournment thereof.

(Please indicate with an ``X'' in the spaces provided whether you wish your vote(s) to be cast for oragainst the Resolutions as set out in the Notice of Extraordinary General Meeting. In the absence ofspeci®c directions, the proxy/proxies will vote or abstain as he/they may think ®t, as he/they will onany other matter arising at the Extraordinary General Meeting).

For Against

Resolution 1 (Special Resolution)

To approve the Capital Reduction and the Distribution In Specie

Resolution 2 (Ordinary Resolution)

To approve the modi®cations to the Share Plans

Dated this day of 2004

Total number of Shares held

Signature(s) of Member(s) or Common Seal

IMPORTANT: PLEASE READ NOTES TO PROXY FORM OVERLEAF.4IMPORTANT

If you have used your CPF moneys to buy shares in thecapital of CapitaLand Limited, this Circular is forwarded toyou at the request of your CPF Approved Nominees and issent solely for information only.

This Proxy Form is not valid for use by such CPF investorsand shall be ineffective for all intents and purposes if usedor purported to be used by them.

NOTES TO PROXY FORM:

1. Please insert the total number of ordinary shares you hold. If you have ordinary shares entered against your name in theDepository Register (as de®ned in section 130A of the Companies Act, Chapter 50 of Singapore), you should insert thatnumber of ordinary shares. If you have ordinary shares registered in your name in the Register of Members, you shouldinsert that number of ordinary shares. If you have ordinary shares entered against your name in the Depository Register aswell as ordinary shares registered in your name in the Register of Members, you should insert the aggregate number of suchordinary shares. If you do not insert any number, this Proxy Form shall be deemed to relate to all the ordinary shares heldby you.

2. A member of the Company entitled to attend and vote at a Meeting of the Company is entitled to appoint one or twoproxies to attend and vote on his behalf. Such proxy need not be a member of the Company.

3. If the Chairman of the Meeting is appointed as proxy, this Proxy Form shall be deemed to confer on him the right tonominate a person to vote on his behalf on a show of hands.

4. Where a member appoints two proxies, the appointments shall be invalid unless he speci®es the proportion of hisshareholding (expressed as a percentage of the whole) to be represented by each proxy.

5. This Proxy Form must be deposited at the registered of®ce of the Company at 168 Robinson Road, 30-01 Capital Tower,Singapore 068912, not less than 48 hours before the time set for the Extraordinary General Meeting.

6. This Proxy Form must be under the hand of the appointer or of his attorney duly authorised in writing. A corporation whichis a member must execute this Proxy Form either under its seal or under the hand of a director or an of®cer or attorney dulyauthorised.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as itthinks ®t to act as its representative at the Extraordinary General Meeting, in accordance with section 179 of theCompanies Act, Chapter 50 of Singapore.

8. The Company shall be entitled to reject this Proxy Form if it is incomplete, improperly completed or illegible or where thetrue intentions of the appointor are not ascertainable from the instructions of the appointor speci®ed in this Proxy Form. Inaddition, in the case of a member whose shares are entered in the Depository Register, the Company may reject this ProxyForm if the member, being the appointor, is not shown to have such shares entered against his name in the DepositoryRegister as at 48 hours before the time set for the Extraordinary General Meeting, as certi®ed by The Central Depository(Pte) Limited to the Company.

9. There are no rights of appraisal or similar rights of dissenters.

10. Proxies may be revoked at any time prior to the Extraordinary General Meeting. Proxies are deemed to be revoked if aShareholder attends and votes at the Extraordinary General Meeting.

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