ARA ASSET MANAGEMENT LIMITED - listed companyara.listedcompany.com/misc/ar/ar2009.pdf · Marina Bay...

A R A A S SE T M A N AG EMEN T LIMIT ED

A n n u A l R e p o R t 2 0 0 9

c o n t e n t s

2 Our Core Values

3 Corporate Profile

6 Business Segments

7 Funds & Services

8 Real Estate Investment Trusts

16 Private Funds

18 Real Estate Management Services

19 Corporate Finance Advisory Services

22 Letter to Shareholders

28 Highlights of the Year

30 Financial Highlights

32 Performance Review

38 Board of Directors

42 Management Team

48 Investor Relations

49 Corporate Information

52 Report on Corporate Governance

66 Financial Statements

117 Supplementary Information

118 Shareholders’ Information

120 Notice of Annual General Meeting

125 Notice of Books Closure

o U R c o R e V A L U e s

I N T E G R I T Y

R E S P E C T

e x C E L L E N C E

t E A M W O R K

c o R p o R A t e p R o f I L e

ARA Asset Management Limited (“ARA” or the “Company” and together

with its subsidiaries, the “Group”) is an Asian real estate fund management

company focused on the management of public listed real estate investment

trusts (“REITs”) and private real estate funds. ARA was incorporated as an

exempted company with limited liability in Bermuda on 1 July 2002 and was

admitted to the official list of the main board of the Singapore Exchange

Securities Trading Limited (“SGx-ST”) on 2 November 2007.

ARA currently manages REITs listed in Singapore, Hong Kong and Malaysia

with a diversified portfolio spanning the office, retail and industrial/office

sectors; private funds investing in real estate and real estate-related securities

in Asia; and provides real estate management services, including property

management services and convention & exhibition services; and corporate

finance advisory services.

As at 31 December 2009, ARA’s total assets under management was S$13.5

billion (approximately US$9.6 billion).

A N N U A L R E P O R T 2 0 0 9 3

o U R B U s I n e s s

A N N U A L R E P O R T 2 0 0 9 5

B U s I n e s s s e g m e n t s

BusinessSegments

RevenueSources

Notes:

Corporate FinanceAdvisory Services

Real Estate Management Services

Private FundsREITs

For the REITs we manage, we earn:

For the private funds we manage, we earn:

We earn management fees for the provision of:

We earn advisory fees for corporate finance advisory services rendered to related corporations.portfolio management

fees based on the committed capital, NAV or gross assets of the funds;

a share of the returns of the funds for performance above certain hurdle rates as performance fees; and

returns on seed capital invested in the fund.

base fees based on the value of the properties of the REITs;

performance / variable fees based on the net property income of the REITs; and

acquisition / divestment fees based on the value of properties acquired / divested by the REITs.

property management services;

convention & exhibition services; and

management services for common property of real estate.

•Advisory Fees•Property Management Fees

•Convention & Exhibition Service Fees

•Portfolio Management Fees

•Performance Fees

•Return on Seed Capital

•Base Fees

•Performance / Variable Fees

•Acquisition /Divestment Fees

A R A A S S E T M A N A G E M E N T L I M I T E D6

f U n d s & s e R V I c e s

DIvERSIFIED & CoMPlEMENTARy FuND PlATFoRMS & SERvICES

1 As at 31 December 2009

SGx-listed with Hong Kong retail

assets

SGx-listed with Singapore retail and office assets

HKSE-listed with Hong Kong office

and industrial/office assets

Bursa-listed with Malaysia commercial

assets

Description

HK$11,500m S$5,185m HK$5,256m RM998mProperty Value 1

2.0m 2.9m 1.2m 2.3mRentable Area(square feet)

RE

ITs

Description

Flagship strategic and opportunistic private real

estate fund investing in Singapore, Hong Kong, China, Malaysia and other

emerging economies in Asia

Single-asset private real estate fund invested in the

Suntec Singapore International Convention

& Exhibition Centre

Open-ended private fund investing in REITs, listed

infrastructure and utilities trusts in the Asia-Pacific region

ADFARA Asia Dragon Fund

ARA Harmony FundARA Asian Asset Income Fund

AAIF

Pri

vate

Fun

ds

DescriptionOperations, sales and marketing services

provider for convention, exhibition, meeting and event facilities

Property management services provider

Rea

l Est

ate

Man

agem

ent

Serv

ices

A N N U A L R E P O R T 2 0 0 9 7

ReAL estAte InVestment tRUsts

Suntec REITFirst composite REIT in Singapore

Listed on 9 December 2004 on the SGx-ST and with a primary focus on prime commercial property in Singapore,

Suntec REIT was the first composite REIT in Singapore owning both retail and office properties. Suntec REIT is

managed by ARA Trust Management (Suntec) Limited, a wholly-owned subsidiary of the Company, and currently

owns a portfolio of retail and office properties with a total net lettable area of approximately 2.9 million square feet.*

3 3 4

ARA currently manages four public listed REITs across Singapore, Hong Kong and Malaysia with a gross property value of S$8.6 billion (US$6.1 billion) and more than 8.0 million square feet of real estate space. The REITs managed by the Group are:


Orchard RoadShopping BeltDhoby Ghaut

BrasBasah*

GROWTH CORRIDOR

3

4

Raffles Hotel

Raffles City

City Hall

Supreme Court

ParliamentHouse

ClarkeQuay

Fullerton Hotel

RafflesPlace

Raffles PlaceBusiness District

2

Marina BayFinancial District

Downtown* Marina BayFinancial Centre*Shenton Way

Business District

Bayfront*

Marina Bay SandsIntegrated Resort*

GROWTH CORRIDOR

Ea

st

Co

as

t P

ar k

wa

y E

xp

r es

sw

ay

Brid

ge*

Gardens by the Bay*

Marina Barrage

MARINA BAY

Marina BayGolf Course

To Changi International Airport

Nicoll Highway*

1

Promenade*Conrad Centennial

Pan PacificHotel Millennia

Walk

Esplanade*

Marina Mandarin

Esplanade -Theatres by the Bay

Marina Square

Mandarin Oriental

Ritz CarltonMillenia

Notes:* Under Construction

loCATIoN PRoPERTyNET lETTABlE AREA

(SQuARE FEET)

1 Marina Bay - Suntec City Suntec City 2,120,662 *

2 Marina Bay - Financial District One Raffles Quay445,120

(one-third interest)

3 Orchard Park Mall 269,959 **

4 City Hall Chijmes 79,977

ToTAl 2,915,718

* Include Suntec REIT’s 20% interest in the retail net lettable area in the Suntec Singapore International Convention & Exhibition Centre which was acquired in 2009.** Excludes the permissible net lettable area of 65,454 square feet from the acquired land along Penang Road.

R e A L e s t A t e I n V e s t m e n t t R U s t s

A N N U A L R E P O R T 2 0 0 9 9


Fortune REITAsia’s first cross border REIT

loCATIoN PRoPERTyGRoSS RENTABlE AREA

(SQuARE FEET)

1 Shatin City One Shatin Property 414,469

2 Shatin Ma On Shan Plaza 310,084

3 Tseung Kwan O Metro Town 180,822

4 Hung Hom The Metropolis Mall 332,168

5 Tuen Mun Waldorf Garden Property 80,842

6 Tung Chung Caribbean Bazaar 63,018

7 Tsuen Wan Smartland 123,544

8 Tsing Yi Tsing Yi Square Property 78,836

9 Shatin Jubilee Court Shopping Centre 170,616

10 Kwai Chung The Household Center 91,779

11 Kwun Tong Centre de Laguna Property 43,000

12 West Kowloon Hampton Loft 74,734

13 Tsuen Wan Lido Garden Property 9,836

14 Tsuen Wan Rhine Garden Property 14,604

ToTAl 1,988,352

Listed on 12 August 2003 on the SGx-ST and with a primary focus on Hong Kong retail assets, Fortune REIT was Asia’s

first cross-border REIT. Fortune REIT is managed by ARA Asset Management (Fortune) Limited (formerly known as ARA

Asset Management (Singapore) Limited), a wholly-owned subsidiary of the Company, and currently owns a portfolio of 14

suburban retail malls and properties in Hong Kong with a total gross rentable area of approximately 2.0 million square feet.


2 3 4

135

7

8

6

14

10

412

1

3

9

11

2

NEW TERRITORIES

KOWLOON

HONG KONG ISLANDLANTAU ISLAND


A N N U A L R E P O R T 2 0 0 9 11

Prosperity REITFirst private sector REIT in Hong Kong

Listed on 16 December 2005 on The Stock Exchange of Hong Kong Limited, Prosperity REIT was the first private sector

REIT in Hong Kong. Prosperity REIT is managed by ARA Asset Management (Prosperity) Limited, a wholly-owned

subsidiary of the Company, and currently owns a diverse portfolio of seven high quality office, industrial/office, and

industrial properties in Hong Kong, with a total gross rentable area of about 1.2 million square feet.

1 3 4

5 6 7



loCATIoN PRoPERTyGRoSS RENTABlE AREA

(SQuARE FEET)

1 Hung Hom The Metropolis Tower 271,418

2 Hung Hom Harbourfront Landmark (portion) 77,021

3 North Point Prosperity Millennia Plaza 217,955

4 Cheung Sha Wan Trendy Centre 173,764

5 Kwun Tong Prosperity Place 240,000

6 Kwun Tong Prosperity Center (portion) 149,253

7 San Po Kong New Treasure Centre (portion) 86,168

ToTAl 1,215,579

KOWLOON

HONG KONG ISLAND

Mei Foo

BUSINESS DISTRICT

BUSINESS DISTRICT

4

CheungSha Wan

Austin

Lai Chi Kok

Mong Kok

Tsim Sha Tsui

7

2

3

6

5

Wong Tai Sin

Diamond Hill

CORE BUSINESS DISTRICT

1

Ngau Tau Kok

Kowloon Bay

Hung Hom

Yau Tong

Kwun Tong

VICTORIA HARBOUR

EasternHarbourTunnel

WesternHarbourTunnel Cross

HarbourTunnel

Quarry Bay

Causeway BayWan Chai

Admiralty

Central

Sheng WanNorth Point

Tai Koo


A N N U A L R E P O R T 2 0 0 9 13

AmFIRST REITCommercial REIT in Malaysia

Listed on 21 December 2006, AmFIRST REIT is currently one of the largest commercial REITs listed on Bursa Malaysia

Securities Berhad with six properties in its portfolio with approximately 2.3 million square feet of net lettable area.

AmFIRST REIT is managed by Am ARA REIT Managers Sdn. Bhd. and is wholly-owned by Am ARA REIT Holdings

Sdn. Bhd., which in turn is 70% owned by AmInvestment Group Berhad and 30% owned by ARA Asset Management

(Malaysia) Limited, a wholly-owned subsidiary of the Company.

1 2 3

4 5 6



6

SELANGOR STATE

SELANGOR STATE

NEGERI SEMBILAN

STATE

STRAITS OF MALACCA

PAHANGSTATE

GOLDENTRIANGLE

Selayang

Gombak

Ampang

Kajang

Kuala Lumpur

Petaling Jaya

Klang

1

35

6

2

4

loCATIoN PRoPERTyNET lETTABlE AREA *

(SQuARE FEET)

1 Kuala Lumpur Golden Triangle Bangunan AmBank Group 360,166

2 Kuala Lumpur Golden Triangle Menara AmBank 458,522

3 Kuala Lumpur Golden Triangle AmBank Group Leadership Centre 57,801

4 Kelana Jaya Kelana Brem Towers 287,223

5 Petaling Jaya Menara Merais 159,001

6 Subang Jaya The Summit Subang USJ 944,471

ToTAl 2,267,184

* As at 28 February 2010.


A N N U A L R E P O R T 2 0 0 9 15

pRIVAte fUnds

Established in September 2007, the

ARA Asia Dragon Fund (“ADF”) is

the Group’s flagship private real

estate fund with aggregate capital

commitments in excess of US$1.1

billion. A closed-end fund, the ADF

has an initial lifespan of seven years,

including an investment period of

four years.

With a mandate to invest across Asia

with a primary focus on the main cities

of China, Singapore, Hong Kong and

Malaysia as well as a secondary focus

on other emerging economies in Asia,

the ADF attracted a broad range of investors including public pension funds, foundations and other global institutional

investors seeking to invest in a diversified portfolio of real estate investments in Asia. Leveraging on ARA’s experience and

intimate knowledge of the real estate market in Asia, the ADF seeks to make strategic and opportunistic investments in real

estate assets with the goal of optimising total return from a combination of income and capital appreciation.

To date, the ADF has made investments in completed and development projects in the residential, retail and office sectors

in Singapore, Hong Kong and in various major cities of China – Nanjing, Dalian and Tianjin. The fund expects to place out

the bulk of its remaining capital commitments by the end of 2010.

A major retail mall in Dalian, China acquired by the ADF in January 2010

ARA currently manages private funds investing in real estate and real estate-related securities in Asia with total assets under management of approximately S$4.5 billion (US$3.2 billion)* as at 31 December 2009.

ARA Asia Dragon FundFlagship private real estate fund investing in Asia

* Excludes the retail mall in Dalian, China which was acquired in January 2010.


Established in September 2009, the ARA Harmony Fund is a single-asset private real estate fund which owns the Suntec

Singapore International Convention & Exhibition Centre (“Suntec Singapore”). Suntec REIT holds a 20% strategic stake in

the ARA Harmony Fund.

About Suntec Singapore

Situated within Singapore’s Downtown Marina Centre

precinct and only 20 minutes from Changi International

Airport, Suntec Singapore is a world class business events

venue located at the heart of Asia’s most integrated

meetings, conventions and exhibitions hub. With 100,000

square metres of versatile floor space over six levels, this

award-winning venue with top notch facilities and service is

designed to cater to a diverse range of events from 10 to

20,000 persons.

Suntec Singapore is part of the iconic integrated commercial

development known as Suntec City comprising Suntec

Singapore, five Grade A office towers with over 2 million

square feet of net lettable area and one of Singapore’s largest shopping malls with over 800,000 square feet of retail space.

In addition to its world-class facilities, Suntec Singapore offers direct access to 5,200 hotel rooms, 1,000 retail shops and

300 restaurants within the Suntec City vicinity. Suntec City is easily accessible by car and public transport networks and is

linked to two MRT stations in the upcoming MRT Circle Line – the Esplanade and Promenade stations which are expected

to be operational in April 2010.

p R I V A t e f U n d s

ARA Harmony FundPrivate real estate fund invested in the Suntec Singapore International Convention & Exhibition Centre

ARA Asian Asset Income FundOpen-ended private fund investing in equity securities

Managed by ARA Strategic Capital I Pte. Ltd. (“ARA Strategic Capital”), a subsidiary of the Company, the ARA Asian Asset

Income Fund (“AAIF”) is an open-ended private fund which seeks to generate superior long-term returns by investing in a

portfolio of primarily listed equity securities in asset-intensive growth sectors in the Asia-Pacific region, including REITs and

infrastructure and utilities trusts. The AAIF is marketed to global institutional investors.

Bird’s eye view of Suntec Singapore (foreground) and the Suntec City vicinity

A N N U A L R E P O R T 2 0 0 9 17

The newest addition to the ARA family, the real estate management services business division seeks to complement and support the growth of the Group’s core REITs and private real estate funds business divisions.

APM Property Management Pte. Ltd. ARA’s in-house property management arm

Acquired in December 2009, APM Property Management Pte. Ltd. (“APM”) is a wholly-owned subsidiary of ARA and the

Group’s in-house property management arm.

APM is staffed by a team of experienced professionals with expertise in property and facilities management, leasing and

marketing. APM is currently the property manager for Suntec REIT’s properties in Suntec City as well as the managing

agent for Management Corporation Strata Title Plan No. 2179, responsible for the management and maintenance of the

common property of Suntec City.

APM seeks to leverage on the Group’s REIT and private real estate fund management platforms to grow its property

management footprint.

Suntec Singapore International Convention & Exhibition Services Pte. Ltd. Convention & exhibition services provider for Suntec Singapore

A wholly-owned subsidiary of ARA, Suntec Singapore International Convention & Exhibition Services Pte. Ltd. (“SSICES”)

has a team of highly driven and dedicated professionals with extensive local, regional and international experience. The

management team of SSICES have backgrounds ranging from the airline, hospitality, healthcare, logistics to the service

sector industries. Collectively, they direct and manage a team of specialised individuals who are well versed in the art

and science of providing world-class service to ensure that all events held in Suntec Singapore are successfully executed.

ReAL estAte mAnAgement seRVIces


ARA Financial Pte. Ltd. (“ARA Financial”) is the Group’s in-house corporate finance advisory arm. ARA Financial currently

provides advisory services on asset acquisitions to the REITs managed by the Group and advises the Group on the

establishment of REITs, partnerships and joint ventures as well as mergers and acquisitions.

R e A L e s t A t e m A n A g e m e n t s e R V I c e s

coRpoRAte fInAnce AdVIsoRy seRVIces

The SSICES team have been managing

Suntec Singapore since its inception

in 1995 and over the years, has gained

experience in hosting a range of events

ranging from corporate meetings to

mega-events, including the World Trade

Organization Ministerial Meeting in 1996,

the World Economic Forum in 1998,

the Annual Meetings of the Board of

Governors of the International Monetary

Fund and the World Bank Group in 2006,

and most recently the APEC Economic

Leaders’ Meetings 2009. In 2010, Suntec

Singapore will be the proud host of the

Singapore 2010 Youth Olympic Games

and many events.

SSICES and Suntec Singapore are the recipient of numerous awards including “Best Convention & Exhibition Centre”

Award at the TTG Travel Awards for three years running from 2007 to 2009 and “Asia’s Leading Conference Centre” Award

at the World Travel Awards for four years running from 2006 to 2009.

Suntec Singapore, Asia’s leading MICE venue

A N N U A L R E P O R T 2 0 0 9 19

L e t t e R t o s h A R e h o L d e R s

A N N U A L R E P O R T 2 0 0 9 21



Dividend

The Directors have proposed a final dividend of 2.50 cents per share for FY2009. Together with the interim dividend of 2.30 cents per share paid out on 3 September 2009, the total dividend for FY2009 amounts to 4.80 cents per share. In recognition of the continued support received from shareholders and to enhance the trading liquidity of the Company’s shares, the Directors additionally propose a bonus issue of up to 116,412,000 new ordinary shares of S$0.002 each in the capital of the Company on the basis of one (1) bonus share credited as fully paid for every five (5) existing shares held in the capital of the Company. As the Group continues to grow, barring unforeseen circumstances, we believe that we will be able to maintain the current dividend payout, notwithstanding the increased number of shares in issue arising from the proposed bonus issue. The proposed final dividend and bonus issue are subject to shareholders’ approval at the Company’s Annual General Meeting and Special General Meeting to be held on 26 April 2010.

Asia’s Emergence

2009 was a year of contrasts. The fallout from the housing collapse in the United States came to a head in March, with virtually all major indices hitting lows not seen since the dotcom bubble burst or the Asian Financial Crisis. From those depths, extraordinary and coordinated government efforts to shore up liquidity in domestic financial markets and stimulate their economies brought the world back from the brink of economic depression. The year ended with many regional stock and property markets enjoying their best performance in years. While risks remain, most notably policy risks from the withdrawal of stimulus measures, Asia has firmly established itself as the region leading the global recovery.

As a leading Asian real estate fund manager, ARA is well positioned to capitalise on Asia’s emergence on the world economic stage and we are pleased to report another set of robust results for the Group in FY2009. The resilient nature of the Group’s business platforms was demonstrated throughout the market upheavals. Recurrent management fee income held steady, registering a 4% increase to S$67.1 million from S$64.5 million in FY2008. At the same time, income from acquisition and performance fees soared 553% to S$7.5 million, primarily from fees in relation to the establishment of the ARA Harmony Fund and Fortune REIT’s acquisition of three retail properties in Hong Kong. Other income jumped 165% to S$11.7 million from gains on the disposal of REIT units received as part payment of REIT management fees and increased distribution income from the financial assets held by the Group. All in, total revenue climbed 23% to S$86.3 million in FY2009, while total assets under management rose to S$13.5 billion (approximately US$9.6 billion) as at 31 December 2009, an 11% increase from S$12.1 billion the previous year.

REIT Management

In the past year, ARA’s reputation as one of the leading REIT managers in Asia has been further enhanced by our careful navigation of the financial crisis. The Group’s major areas of focus in 2009 were to secure the timely refinancing of debt becoming due and to maintain high occupancy levels in the REITs under management in order to underpin their ability to weather the economic downturn.

In April 2009, during the depths of the crisis, Suntec REIT secured the refinancing of its loan facilities due at the end of 2009 through a S$825 million term loan facility. This transaction gave a huge shot of confidence to the market

For the financial year ended 31 December 2009 (“FY2009”), the Group posted a record net profit of S$48.3 million, a 32% jump from the S$36.7 million achieved the previous year. Earnings per share were 8.30 cents (FY2008 – 6.31 cents)1.

1 Based on 582,060,000 shares in issue as at 31 December 2008 and 31 December 2009.

A N N U A L R E P O R T 2 0 0 9 23

by dispelling the then-prevalent perception that credit was not available for REITs to refinance the large amounts of loans becoming due.

The Group also undertook a major exercise to address two major issues facing Fortune REIT – its limited trading liquidity and its need to secure refinancing for the REIT’s HK$2.4 billion CMBS2 loan due in June 2010. This was done via a pioneering exercise involving the purchase of three retail properties in Hong Kong for HK$2.0 billion, funded by a rights issue and new debt, including a facility to refinance the CMBS loan. The exercise received strong support from the REIT’s minority shareholders and was successfully completed on 15 October 2009. Following this exercise, Fortune REIT’s daily average trading volume has quadrupled from less than 1 million units at the start of the year to almost 4 million units in the fourth quarter of 2009. We are also pleased to report that all the three newly-acquired properties are performing well, having achieved a collective valuation increase of 6% from their purchase price and 100% occupancy as at 31 December 2009, up from 95.6% as at 30 June 2009.

ARA’s skillful handling of the financial crisis and strong standing in the REIT management arena has attracted a number of strategic partners to work with us to jointly establish and manage new REITs. The Group recently announced that Cache Logistics Trust (“CLT”), an Asia Pacific-focused logistics REIT jointly established by ARA and leading Singapore-listed logistics group, CWT Limited (“CWT”), has received its eligibility-to-list from the SGx-ST. CLT will have an initial portfolio of six logistics properties located in Singapore valued at approximately S$730 million with a total GFA of 3.9 million square feet. This high quality portfolio, coupled with ARA and CWT’s complementary networks and expertise, provides a strong foundation for the manager of CLT, which is 60%-owned by ARA and 40%-owned by CWT, to seek out acquisition opportunities and distinguish CLT as the leading logistics REIT in the Asia Pacific region.

Retail rents in both Singapore and Hong Kong have remained resilient through the crisis and after a year of correction, rentals in the Singapore office sector have also shown clear signs of stabilisation. Looking ahead, the Group will continue to pro-actively engage current and prospective tenants to maintain high occupancy levels in the REITs’ properties and invest in asset enhancements to augment the competitiveness of the properties. At the same time, we will capitalise on improving market sentiment to seek value-adding acquisitions for the REITs under our management.

Private Funds

The highlight of the year for our private funds business division was undoubtedly the establishment of the ARA Harmony Fund. This transaction was significant in several aspects. First, this fund was raised in record time and was completed in the midst of the financial crisis – a testament to ARA’s fund-raising capability. Second, this fund marks the Group’s first collaboration with a new class of investors – high net-worth individuals (“HNWIs”). This is a potentially huge market and the Group will continue to cultivate our HNWI investor base to enhance our fund-raising channels. Third, with the purchase of the Suntec Singapore International Convention & Exhibition Centre (“Suntec Singapore”) by the fund, all three major components of Suntec City – retail mall, office and convention centre – are now under a single management group for the first time since the initial public offering of Suntec REIT. With the MRT Circle Line linking to Suntec City in April 2010 and the ongoing transformation of the Marina Bay precinct, the timing of the transaction provides the Group with the perfect opportunity to reposition Suntec City to enhance its competitiveness as a leading business and leisure destination in Singapore.

The Group’s flagship fund, the ARA Asia Dragon Fund (“ADF”), had a good year as the recovery in regional markets lifted the values of the fund’s investments. Our prudent


2 Commercial mortgage-backed securities.


approach to investments has won us considerable trust and goodwill among the ADF’s investors. This puts us in good stead to secure capital commitments for future funds in the ADF franchise. The ADF, which recently acquired one of the largest retail malls in Dalian, China, is currently in the midst of reviewing or closing several investments. We are confident that we will be able to place out the bulk of the fund’s remaining capital commitments by the end of 2010.


At the end of 2009, the Group added the real estate management services business division to our growing family. The two subsidiaries under this division – APM Property Management Pte. Ltd. (“APM”) and Suntec Singapore International Convention & Exhibition Services Pte. Ltd. (“SSICES”) – will not only contribute positively to the Group’s financial performance in 2010 and beyond, but also add considerable expertise and skillsets to the Group. APM is the property manager for Suntec REIT’s Suntec City portfolio and the managing agent for the Suntec City MCST3. Built around a core team of employees from the previous property manager and managing agent, APM has over 15 years of experience in property management. The Group intends to leverage this wealth of experience to more effectively manage other properties under the Group’s management.

SSICES, which joined the ARA fold following the establishment of the ARA Harmony Fund, is the award-winning convention & exhibition services team of Suntec Singapore, a premier MICE4 venue in Asia. Among the numerous accolades garnered by Suntec Singapore include “Best Convention & Exhibition Centre” Award at the TTG Travel Awards from 2007 to 2009 and “Asia’s Leading Conference Centre” Award at the World Travel Awards from 2006 to 2009. A world-class outfit like SSICES is a valuable addition to any organisation and

ARA is proud to count this dedicated team of professionals as one of our own.

APM and SSICES are natural complements to the Group’s existing real estate fund management businesses and we are confident that they will contribute significantly to the Group’s earnings as they grow in tandem with the REITs and private real estate funds under our management.

Prospects

ARA is now firmly established as one of the leading real estate fund managers in the region. As Asia powers ahead as the engine of global economic growth, we are very excited about the opportunities for real estate fund management in Asia. Our existing platforms provide us with a firm foundation to tap into the rise of Asia. With our growing reputation, we are optimistic of establishing new strategic partnerships to expand our REIT and fund management platforms into new sectors and markets.

Acknowledgement

ARA has come a long way since its establishment in 2002. All of this would not have been possible without the guidance of the Board and the hard work and dedication of our employees – our most valuable asset. We would like to take this opportunity to express our sincere appreciation to our fellow Directors on the Board and all employees of the Group for their contributions and service during the year.

Chiu Kwok Hung Justin Lim Hwee Chiang JohnChairman Group Chief Executive officer

3 Management Corporation Strata Title Plan No. 2179 comprising the common property of Suntec City.4 Meetings, Incentives, Conventions & Exhibitions.

A N N U A L R E P O R T 2 0 0 9 25

y e A R I n R e V I e w

A N N U A L R E P O R T 2 0 0 9 27

h I g h L I g h t s o f t h e y e A R

April• SuntecREITsecuresS$825

million facility to refinance

loans due in 2009

• ARAFY2008Annual

General Meeting

May• PaymentofFY2008final

dividend of S$0.0224

per share

June• FortuneREIT’spropertyportfolio

revalued with a gain of 3.5% to

HK$8,900 million

• ProsperityREIT’sproperty

portfolio revalued with a gain

of 1.0% to HK$4,887 million

September• PaymentofFY2009interim

dividend of S$0.0230 per share

• AmFIRSTREITacquires12,056

square feet of office space in

Menara Summit for RM3.7 million

• ARAHarmonyFundacquires

the Suntec Singapore

International Convention &

Exhibition Centre (“Suntec

Singapore”) for S$235 million

• ARAestablishesSuntec

Singapore International

Convention & Exhibition Services

Pte. Ltd. as the convention &

exhibition services provider for

Suntec Singapore

October• FortuneREITacquires3retail

properties in Hong Kong for

HK$2.0 billion, completes a

1-for-1 rights issue and secures a

HK$2.8 billion facility to refinance

loans due in 2010

• SuntecSingaporewinsthe“Best

Convention & Exhibition Centre”

Award at the Annual TTG Travel

Award for the third year running

• FortuneREIT’s2008annual

report wins 2 awards in the

prestigious 2009 International

Annual Report Competition


November• SuntecSingaporesuccessfully

hosts the APEC Economic

Leaders’ Meetings 2009

December• ARAacquiresAPMProperty

Management Pte. Ltd., the

managing agent of the Suntec

City MCST. APM enters

into property management

agreement with Suntec REIT

for the REIT’s properties in

Suntec City

• SuntecREITcompletesprivate

placement for 128.5 million

new units

• ARAannouncesMemorandum-

of-Understanding with Qatar-

based Regency Group to jointly

establish first Shariah-compliant

REIT in Singapore

• ARAwinsIRMagazine

Certificate Of Excellence at the

IR Magazine South East Asia

Awards 2009

• ProsperityREIT’s2008annual

report wins 2 awards at

the 20th Annual International

GALAxY 2009 Awards

Competition

• SuntecREITwinsRunnerUp

(REITs Category) – Most

Transparent Company Award”

at the Securities Investors

Association of Singapore

Investors’ Choice Award 2009

• SuntecREIT’spropertyportfolio

revalued at S$5,185 million

• FortuneREIT’spropertyportfolio

revalued at HK$11,500 million

• ProsperityREIT’sproperty

portfolio revalued with a gain of

7.6% to HK$5,256 million

A N N U A L R E P O R T 2 0 0 9 29

f I n A n c I A L h I g h L I g h t s

• Totalrevenuerose23%toS$86.3million

• Netprofitincreased32%toS$48.3million

• ProposedfinaldividendofS$0.025pershare,totalpayoutofS$0.048pershareforFY2009

• Proposed1-for-5bonusissuetorewardshareholders

• Totalassetsundermanagementup11%fortheyeartoS$13.5billion(approximatelyUS$9.6billion)

Key Financial Results Fy2009 Fy2008 Change (%)

Revenue

Management fees S$’000 67,102 64,484 4%

Acquisition and performance fees S$’000 7,494 1,148 553%

Other income S$’000 11,683 4,407 165%

Total revenue S$’000 86,279 70,039 23%

EBIT1 S$’000 54,509 40,326 35%

Net profit S$’000 48,339 36,729 32%

EPS2 S$ cents 8.30 6.31 32%

Net margin (%) 56% 52% 4% pts

Dividend S$ cents 4.80 4.41 9%

Total Assets under Management3

31 December

2009

31 December

2008 Change (%)

REITs - Real estate4 (S$ billion) 8.63 8.25 5%

Private funds - Real estate5 (S$ billion) 3.43 2.72 26%

Private funds - Capital6 (S$ billion) 1.07 1.14 (6%)

Real estate management services7 (S$ billion) 0.33 - n.m.8

Total AUM (S$ billion) 13.46 12.11 11%

1 Earnings before interest and tax2 Earnings per share. Based on 582,060,000 shares in issue as at 31 December 2009 and 31 December 2008

3 Based on exchange rates as at 31 December 20094 Property value of REITs5 Gross value of real estate investments in private funds and third-party real estate6 Unutilised commitments in private real estate funds and net asset value of specialist equity funds7 Revenue base for real estate management services fees computation8 Not meaningful


Total Revenue & Net Profit(S$ million)

Total Assets under Management(S$ billion)As at 31 Dec

Management fees

Acquisition and performance fees

Other income

Net profit

REITs - Real estate

Private funds - Real estate

Private funds - Capital

Real estate management services

10 2

4

6

8

10

12

14

2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009

5.7

0.8

13.4

27.6

31.3

13.5

34.0

62.1

70.0

86.3

36.7

48.3

20

30

40

50

60

70

80

90

0.6

3.5

5.76.5

9.9

12.1

13.5

A N N U A L R E P O R T 2 0 0 9 31

Performance overview

The Group registered a stellar performance in the financial

year ended 31 December 2009 (“FY2009”) with net profit

soaring 32% to a record S$48.3 million from S$36.7 million

in FY2008. The strong performance was achieved on the

back of a 23% increase in total revenue to S$86.3 million

and an 11% rise in total assets under management to

S$13.5 billion. During the year, the Group also completed

a number of important initiatives which laid a firm

foundation for the future growth of the Group. These

include the establishment of the ARA Harmony Fund and

the real estate management services division as well as

Fortune REIT’s acquisition of 3 retail properties in Hong

Kong. These initiatives will contribute materially to the

Group’s recurrent management fee income and profits

going forward.

Assets under Management

Total assets under management rose by 11% to S$13.5

billion as at 31 December 2009 from S$12.1 billion as at 31

December 2008. The Group’s REIT real estate assets under

management registered a 5% increase to S$8.6 billion,

primarily from Fortune REIT’s acquisition. In the private

real estate funds division, the establishment of the ARA

Harmony Fund and positive valuation changes in the ARA

Asia Dragon Fund (“ADF”) helped propel a 26% increase

in private funds real estate assets under management to

S$3.4 billion. Private funds capital under management

declined by 6% due to capital calls by the ADF while real

estate management services added approximately S$300

million to assets under management1.

Revenue

Despite the challenging external environment, total

revenue for FY2009 jumped 23% to a record S$86.3 million.

Recurrent management fee income increased marginally

by 4% to S$67.1 million in FY2009 from S$64.5 million

in FY2008. REIT base and performance fees were little

changed at S$40.4 million in FY2009 compared with S$40.5

million in FY2008 while private fund management fees rose

to S$25.5 million in FY2009 from S$24.0 million in FY2008,

primarily from the full-year contribution of the third closing

of the ADF which was completed on 19 June 2008 and

contributions from the ARA Harmony Fund. Real estate

management services fees added another S$1.2 million to

management fee income, primarily from service fees from

Suntec Singapore International Convention & Exhibition

Services Pte. Ltd. (“SSICES”) which commenced operations

on 1 October 2009 and APM Property Management Pte.

Ltd. (“APM”) which was acquired on 8 December 2009.

Acquisition and performance fees climbed 553% to

S$7.5 million on the back of fees received in relation

to the establishment of the ARA Harmony Fund on 30

September 2009 and Fortune REIT’s acquisition of 3 retail

properties in Hong Kong which was completed on 15

October 2009. In FY2008, the Group received acquisition

and performance fees of S$1.1 million, primarily from

AmFIRST REIT’s acquisition of an interest in The Summit

Subang USJ, a mixed commercial development in Subang

Jaya, Malaysia.

Other income soared 165% to S$11.7 million in FY2009

from S$4.4 million in FY2008, primarily due to higher

distribution income from the Group’s strategic stakes in

AmFIRST REIT and Suntec REIT. The Group’s strategic

stake in Suntec REIT was built up over FY2008 and the first

quarter of FY2009 and the larger base for distributions was

the primary driver for the increase in distribution income.

Gains from the disposal of REIT units received as part

payment of REIT management fees added S$3.5 million to

other income in FY2009.

Earnings

The Group achieved a net margin of 56% in FY2009,

an improvement of 4% points from the 52% achieved in

FY2008. Operating expenses for FY2009 totaled S$31.8

million, up 7% from S$29.7 million in FY2008 due primarily

to increased administrative and operating lease expenses

p e R f o R m A n c e R e V I e w

1 Assets under management of the real estate management services division is based on the revenue base upon which real estate management services fees are computed


Fy2008 (S$ million)

Total: S$70.0m

S$24.034%

S$1.12%

S$4.46%

S$40.558%

Fy2009 (S$ million)

Total: S$86.3m

S$11.714%

S$40.446%

S$7.59%

S$25.530%

S$1.21%

REIT management fees

Private fund management fees


Acquisition and performance fees

Other income

Singapore

Hong Kong

China

Malaysia

Real estate assets under management by country

Revenue by segments

Fy2009 (S$ billion)

Total: S$11.0b

S$0.44%

S$5.853%

S$2.926%

S$1.917%

Fy2008 (S$ billion)

Total: S$12.1b

S$0.43%

S$5.949%

S$3.529%

S$2.219%

A N N U A L R E P O R T 2 0 0 9 33

in line with the Group’s business expansion. This was

partially offset by a fall in other expenses from S$8.7 million

in FY2008 to S$7.7 million in FY2009. For FY2008, other

expenses included a loss on disposal of REIT units received

as part payment of REIT management fees of S$3.1 million.

The Group’s finance expenses were primarily in relation to

a loan of RM44.9 million from AmInvestment Bank Berhad

(“AIBB”) to part finance the acquisition of a 12.5% interest

in AmFIRST REIT. For FY2009, finance expenses fell by

12% to S$715,000 from S$813,000 in FY2008 due to lower

interest rates on the loan from AIBB.

Share of profits of associates relates primarily to our share

of profits arising from the Group’s 30% effective interest

in Am ARA REIT Managers Sdn. Bhd., the manager of

AmFIRST REIT. This rose 58% in FY2009 to S$245,000 from

S$155,000 in FY2008 primarily due to an increase in the

assets under management of AmFIRST REIT. Income tax

expenses rose 89% to S$5.8 million in FY2009 from S$3.1

million in FY2008.

As a result of the above, net profit attributable to equity

holders of the Company for FY2009 was S$48.3 million,

a 32% jump from S$36.7 million in FY2008. Earnings per

share was 8.30 Singapore cents per share, up 32% from

6.31 Singapore cents per share in FY2008.

Dividends

The Directors are pleased to propose a final tax-exempt

(one-tier) dividend of 2.50 Singapore cents per share for

FY2009. Inclusive of an interim dividend of 2.30 Singapore

cents paid out on 3 September 2009, the total dividend

for FY2009 amounts to 4.80 Singapore cents per share or

S$27.9 million in aggregate, representing a 9% increase

from the total dividend of 4.41 Singapore cents paid out

for FY2008.

The proposed final dividend is subject to shareholders’

approval at the Company’s Annual General Meeting

(“AGM”) to be held on 26 April 2010.

Assets

The Group operates on an asset-light business model with

a focus on generating fee-based income from real estate

fund management and related services. The Group’s

total assets as at 31 December 2009 was S$169.1 million

including cash and short term bank deposits of S$46.1

million and financial assets of S$96.6 million, comprised

mainly of the Group’s strategic stakes in AmFIRST REIT and

Suntec REIT as well as seed investments in private funds

and associated securities.

Borrowings

As at 31 December 2009, the Group had bank borrowings

of RM44.9 million (approximately S$18.4 million) from

a secured revolving credit facility provided by AIBB to a

wholly-owned subsidiary to part finance the acquisition

of a 12.5% interest in AmFIRST REIT. The facility, which is

secured by a pledge of the AmFIRST units purchased by

the Group, matures on May 2011 and bears interest at a

floating rate of 1.0% p.a. above AIBB’s cost of funds from

28 May 2009.

As at 31 December 2009, the overall gearing of the Group

stood at 14.5%.

Shareholders’ Equity

The issued and paid-up ordinary share capital of the

Company as at 31 December 2009 was S$1.2 million

comprising 582.1 million ordinary shares of S$0.002 each.

There were no outstanding options or convertible securities

of the Company as at 31 December 2009.

p e R f o R m A n c e R e V I e w


In recognition of the continued support received from

shareholders and to enhance the trading liquidity of the

Company’s shares, the Directors additionally propose a

bonus issue of up to 116,412,000 new ordinary shares of

S$0.002 each in the capital of the Company on the basis

of one (1) bonus share credited as fully paid for every five

(5) existing shares held in the capital of the Company. The

Company will be capitalising the sum of up to S$232,824

standing to the credit of the Company’s reserves to be

applied towards paying up in full for the bonus shares. The

proposed bonus issue is subject to shareholders’ approval

at the Company’s Special General Meeting to be held on

26 April 2010, immediately following the AGM.

The Group’s total reserves stood at S$126.9 million as

at 31 December 2009 while total shareholders’ equity

amounted to S$127.7 million. Net tangible assets per share

was S$0.22.

Cash Flows & liquidity

The Group’s main sources of operating cashflows are fees

from the management of REITs and private funds and the

provision of real estate management and corporate finance

advisory services, which are generally received in cash.

Management fees in respect of certain REITs are received

in cash and/or REIT units. For the REIT units received

as part payment of REIT management fees, the Group

generally realises them into cash as soon as practicable and

outside of the corresponding black-out periods for the

respective REITs.

In addition, the Group also maintains the following

facilities:

• an unutilised unsecured revolving credit facility

of $1.1 million which bears interest at the prime

lending rate; and

• unutilised unsecured overdraft facilities of S$6.0

million and HK$3.0 million which bears interest at

the prime lending rate.

Net cash generated from operating activities in FY2009 was

S$48.2 million compared with S$52.2 million in FY2008. The

change was primarily due to a decrease in the proceeds

arising from the sale of REIT units and movement in working

capital. Cashflows from operating activities in FY2008

included proceeds from the sale of REIT units received as

fees in prior financial periods and receipt of performance

fees in relation to the Al-Islami Far Eastern Real Estate Fund

which divested its assets in the previous year.

The Group utilised S$16.6 million for investing activities

in FY2009 for the acquisition of a strategic stake in Suntec

REIT, seed capital investment in the ADF pursuant to

capital calls from the fund and the Group’s participation

in an interest-bearing loan to the ARA Harmony Fund to

part finance the fund’s purchase of the Suntec Singapore

International Convention & Exhibition Centre.

Net cash outflow for financing activities amounted to

S$27.2 million in FY2009 for the payment of the final

dividend for FY2008 and the interim dividend for FY2009.

A N N U A L R E P O R T 2 0 0 9 35

o U R p e o p L e

A N N U A L R E P O R T 2 0 0 9 37

B o A R d o f d I R e c t o R s

Chiu Kwok Hung JustinChairman and Non-Executive Director

Mr Chiu Kwok Hung Justin is the Chairman and a Non-

Executive Director of the Company. He is also the chairman

of ARA Asset Management (Fortune) Limited (the manager

of Fortune REIT), the chairman of ARA Trust Management

(Suntec) Limited (the manager of Suntec REIT) and the

chairman of ARA Asset Management (Prosperity) Limited

(the manager of Prosperity REIT). Fortune REIT and Suntec

REIT are listed on the SGx-ST while Prosperity REIT is listed

on the Main Board of The Stock Exchange of Hong Kong

Limited (“SEHK”). Mr Chiu is also a director of ARA Fund

Management (Asia Dragon) Limited as the manager of

the ARA Asia Dragon Fund. Mr Chiu is a member of the

11th Shanghai Committee of the Chinese People’s Political

Consultative Conference of the People’s Republic of

China, a fellow of the Hong Kong Institute of Real Estate

Administrators and a member of the Board of Governors

of Hong Kong Baptist University Foundation.

Mr Chiu has more than 30 years of international experience

in real estate and is one of the most respected professionals

in the property industry in Asia. Mr Chiu is an executive

director of Cheung Kong (Holdings) Limited (“Cheung

Kong”), a company listed on the SEHK. He joined Cheung

Kong in 1997 and has been an executive director since

2000, heading the real estate sales, marketing and property

management teams. Prior to joining Cheung Kong, Mr

Chiu was with Sino Land Company Limited from l994 to

1997 and Hang Lung Development Company, Limited

(now known as Hang Lung Group Limited) from 1979 to

1994, responsible for the leasing and property management

in both companies.

Mr Chiu holds Bachelor degrees in Sociology and

Economics from Trent University in Ontario, Canada.

Lim Hwee Chiang JohnGroup Chief Executive officer and Executive Director

Mr Lim Hwee Chiang John is the Group Chief Executive

Officer and Executive Director of the Company. He has

been the Group Chief Executive Officer and Executive

Director of the Company since its establishment. He

is also a director of ARA Asset Management (Fortune)

Limited, the manager of Singapore-listed Fortune REIT,

ARA Trust Management (Suntec) Limited, the manager

of Singapore-listed Suntec REIT, ARA Asset Management

(Prosperity) Limited, the manager of Hong Kong-listed

Prosperity REIT, Am ARA REIT Managers Sdn. Bhd.,

the manager of Malaysia-listed AmFIRST REIT, and the

chairman of APM Property Management Pte. Ltd., Suntec

Singapore International Convention & Exhibition Services

Pte. Ltd., and the management council of Management

Corporation Strata Title Plan No. 2179 (Suntec City).

In addition, Mr Lim is an independent director and

member of the audit committee of Singapore-listed

Teckwah Industrial Corporation Limited. He is also the

vice president of the Hong Kong-Singapore Business

Chiu Kwok Hung Justin Lim Hwee Chiang John Ip Tak Chuen Edmond Lee Yock Suan


Association, the senior vice president of the Asian Public

Real Estate Association and a member of the Valuation

Review Board of the Ministry of Finance of Singapore.

Mr Lim has close to 30 years of experience in real estate.

Prior to founding ARA, from 1997 to 2002, he was an

executive director of GRA (Singapore) Pte. Ltd., a wholly-

owned subsidiary of Prudential (US) Real Estate Investors.

From 1996 to 1997, he founded and was the managing

director of The Land Managers (S) Pte. Ltd., a Singapore-

based property and consulting firm specialising in

feasibility studies, marketing and leasing management

in Singapore, Hong Kong and China. He was the

general manager of the Singapore Labour Foundation

Management Services Pte. Ltd. from 1991 to 1995, and

was with DBS Land Limited (now part of CapitaLand

Limited) from 1981 to 1990.

Mr Lim holds a Bachelor of Engineering (First Class

Honours) in Mechanical Engineering, a Master of

Science in Industrial Engineering, as well as a Diploma

in Business Administration, each from the National

University of Singapore.

Ip Tak Chuen EdmondNon-Executive Director

Mr Ip Tak Chuen Edmond is a Non-Executive Director of the

Company and a member of the Remuneration Committee.

He is also a director of ARA Asset Management (Fortune)

Limited (the manager of Fortune REIT) and ARA Trust

Management (Suntec) Limited (the manager of Suntec

REIT). Both Fortune REIT and Suntec REIT are listed on

the SGx-ST.

Mr Ip has been an executive director of Cheung Kong since

1993 and deputy managing director since 2005, responsible

for overseeing all financial and treasury functions of

Cheung Kong and its subsidiaries, particularly in the

fields of corporate and project finance. He has been an

executive director of Cheung Kong Infrastructure Holdings

Limited (“CK Infrastructure”) since its incorporation in

1996 and deputy chairman since 2003, and the senior vice

president and chief investment officer of CK Life Sciences

lnt’l., (Holdings) Inc. (“CK Life Sciences”) since 2002. He

oversees matters relating to corporate finance, strategic

acquisition and investment of both CK Infrastructure and

CK Life Sciences. Mr Ip is also a non-executive director of

TOM Group Limited (“TOM”), AVIC International

Holding (HK) Limited (“AVIC”), Excel Technology

International Holdings Limited (“Excel”), Shougang

Concord International Enterprises Company Limited

(“Shougang”) and Ruinian International Limited

(“Ruinian”). Cheung Kong, CK Infrastructure, CK Life

Sciences, TOM, AVIC, Excel, Shougang and Ruinian are

listed on the SEHK. Prior to joining Cheung Kong, Mr

Ip held a number of senior financial positions in major

financial institutions and has extensive experience in the

Hong Kong financial market covering diverse activities such

as banking, capital markets, corporate finance, securities

brokerage and portfolio investments.

Lim How Teck Cheng Mo Chi Moses Colin Stevens Russel

A N N U A L R E P O R T 2 0 0 9 39

B o A R d o f d I R e c t o R s

Mr Ip holds a Bachelor of Arts degree in Economics and

a Master of Science degree in Business Administration.

Lee Yock SuanIndependent Non-Executive Director

Mr Lee Yock Suan is an Independent Non-Executive Director

of the Company and chairman of the Audit Committee.

Mr Lee was elected as a Member of Parliament of Singapore

in 1980 and remained a Member of Parliament until his

retirement from politics in 2006. He was a Minister in the

Singapore Cabinet from 1981 to 2004 and his portfolios

included Finance, National Development, Education,

Foreign Affairs, Information and the Arts, Trade and Industry,

Environment and Labour. Mr Lee was also the chairman

of the Singapore Labour Foundation from 1997 to 2002,

deputy chairman of the People’s Association from 1984 to

1991 and deputy managing director of the Petrochemical

Corporation of Singapore (Pte) Ltd from 1980 to 1981. Mr

Lee started his career in the Economic Development Board

of Singapore in 1969.

Mr Lee holds a Bachelor of Science (First Class Honours) in

Chemical Engineering from the Imperial College, London

University and a Diploma in Business Administration from

the University of Singapore. He was awarded the President’s

Scholarship in 1966.

Lim How TeckIndependent Non-Executive Director

Mr Lim How Teck is an Independent Non-Executive

Director of the Company and chairman of the Nominating

Committee. Mr Lim is also the chairman of Certis CISCO

Security Pte. Ltd., deputy chairman of Tuas Power Ltd and

an independent non-executive director of Eng Kong

Holdings Limited, IFS Capital Limited, Lasseters

International Holdings Limited and Mermaid Maritime

Public Company Limited, all of which are listed on the SGx-

ST. In addition, Mr Lim is an independent non-executive

director of Rickmers Trust Management Pte. Ltd. (trustee-

manager of Rickmers Maritime) and a governor of the

Foundation for Development Cooperation.

Currently, Mr Lim is the chairman of Redwood International

Pte. Ltd., an investment and consultancy company. From

1979 to 2005, Mr Lim was with Neptune Orient Lines

Ltd (“NOL”) where he held various positions including

executive director, group chief financial officer, group

chief operating officer and group deputy chief executive

officer. He also held directorships in various subsidiaries,

associated companies and investment interests of NOL.

Prior to joining NOL, he was with Coopers & Lybrand, an

international accounting firm and Plessey Singapore, a

multinational trading and manufacturing company.

Mr Lim holds a Bachelor of Accountancy degree from the

University of Singapore. He also completed the Corporate

Financial Management Course and Advanced Management

Programme at the Harvard Graduate School of Business.

In addition, he is a fellow of the Chartered Institute of

Management Accountants, Certified Public Accountants

Australia, the Institute of Certified Public Accountants

of Singapore and the Singapore Institute of Directors as

well as an associate of the Australian Institute of Business

Administration. Mr Lim was awarded the Public Service

Medal (PBM) by the Singapore Government in 1999.

Cheng Mo Chi MosesIndependent Non-Executive Director

Dr Cheng Mo Chi Moses is an Independent Non-Executive

Director of the Company and chairman of the Remuneration

Committee. Dr Cheng is also an independent non-

executive director of ARA Asset Management (Fortune)

Limited (the manager of Fortune REIT) and a number

of public-listed companies including the Hong Kong

Exchanges and Clearing Limited, K. Wah International

Holdings Limited, China COSCO Holdings Company

Limited, China Mobile Limited, China Resources Enterprise,

Limited, Towngas China Company Limited, Kader Holdings

Company Limited, Liu Chong Hing Investment Limited, City

Telecom (H.K.) Limited, Guangdong Investment Limited and

Tian An China Investments Company Limited. Dr Cheng is


also the founder chairman of The Hong Kong Institute of

Directors of which he is now the honorary president and

chairman emeritus. Presently, Dr Cheng is the chairman of

the Education Commission, the chairman of the Advisory

Committee on Post-office Employment for former Chief

Executives and Politically Appointed Officials, the chairman

of the Advisory Committee on Post-service Employment of

Civil Servants, and a member of the Financial Reporting

Council. Dr Cheng is also an active Rotarian and served as

district governor of Rotary International District 3450 from

1993 to 1994. In addition, Dr Cheng is an active member of

the Anglican Church and is the chancellor of the Province

of the Hong Kong Sheng Kung Hui.

Dr Cheng is currently the senior partner of Messrs. P.C. Woo

& Co. a law firm in Hong Kong. He served as a member of

the Legislative Council of Hong Kong between 1991 and

1995, and was appointed a Justice of the Peace by the

Hong Kong Special Administrative Region Government

in 1996.

Dr Cheng holds a Bachelor of Laws from the University of

Hong Kong, a Post-Graduate Certificate in Laws from the

University of Hong Kong, a Doctor of Law from the Hong

Kong Baptist University and a Doctor of Law from Lingnan

University. Dr Cheng was awarded the Order of the British

Empire (“OBE”) by Her Majesty, the Queen of the United

Kingdom in 1997 and the Gold Bauhinia Star medal by the

Hong Kong Special Administrative Region Government

in 2003.

Colin Stevens RusselIndependent Non-Executive Director

Mr Colin Stevens Russel is an Independent Non-Executive

Director of the Company and member of the Audit,

Nominating and Remuneration Committees. He is also an

independent non-executive director of CK Infrastructure,

CK Life Sciences and Husky Energy Inc.

Mr Russel is the founder and managing director of Emerging

Markets Advisory Services Ltd., a company which provides

advisory services to organisations on business strategy and

planning, market development, competitive positioning

and risk management. He is also the managing director

of EMAS (HK) Limited. From 1972 to 2001, Mr Russel held

various appointments in the Canadian Trade Commissioner

Service and Diplomatic Service, including ambassador to

Venezuela, consul general in Hong Kong, director for China

of the Department of Foreign Affairs (Ottawa), director for

East Asia Trade (Ottawa), senior trade commissioner in

Hong Kong, director for Japan Trade of the Department

of External Affairs (Ottawa). He also served in the Trade

Commissioner Service in Spain, Hong Kong, Morocco,

the Philippines, London and India. Prior to that, Mr Russel

was a project manager for RCA Limited in Canada, Liberia,

Nigeria, Mexico and India and an engineer with RCA

Limited in Canada and with Associated Electrical Industries

Limited in the United Kingdom.

Mr Russel holds a degree in Electronics Engineering and

a Master’s degree in Business Administration from McGill

University, Canada. He is also a professional engineer and

qualified commercial mediator.

A N N U A L R E P O R T 2 0 0 9 41

m A n A g e m e n t t e A m

Lim Hwee Chiang JohnGroup Chief Executive officer

BuSINESS uNITS CoRPoRATE DIvIS IoNS

Private Funds

ARA Asia Dragon Fund Ng Beng Tiong

CEo

ARA Strategic CapitalStephen Finch

CEo

ARA Harmony FundChow Chee Peng

Fund Director

Corporate Finance Advisory Services

ARA FinancialLow Poh Choo

Director

REITs

Suntec REITYeo See Kiat

CEo

Fortune REITAng Meng Huat Anthony

CEo

Prosperity REITStephen Henry Chu

CEo

AmFIRST REITLim Yoon Peng

CEo

Cache logistics Trust 1

Daniel CerfCEo


APM Property ManagementSusan Sim

CEo

Suntec Singapore International Convention & Exhibition Services

Pieter IdenburgCEo

1 To be listed

Finance & ComplianceSeow Bee Lian Cheryl

Group Finance Director

Corporate officeNg Beng Tiong

Director

Corporate Business DevelopmentMoses Song

Director

China DeskMun Hon PhengCountry Head

Group Risk Management & Internal Audit

Tang Boon KangManager

Corporate Development & Human Resources

Lim Poh Leng PaulineManager

office AdministrationYeo Lay Har Serene

Manager


Yeo See KiatChief Executive officer

ARA Trust Management (Suntec) Limited,

Manager of Suntec REIT

Mr Yeo See Kiat is the chief executive officer and an

executive director of ARA Trust Management (Suntec)

Limited, the manager of Singapore-listed Suntec REIT. He

is also a director of One Raffles Quay Private Limited.

Mr Yeo has more than 29 years of experience in the real

estate industry, managing and overseeing various projects

with Hwa Hong Corporation Limited, The Wharf Group,

Parkway Holdings Limited, and CapitaLand Limited. He has

held senior management positions over the last 19 years.

Mr Yeo started his career in Turquand Young (now Ernst &

Young) and was with the firm from 1976 to 1980.

Mr Yeo holds a Bachelor of Accountancy from the University

of Singapore and a Graduate Diploma in Management

Studies from the Singapore Institute of Management. He is

also a fellow of the Institute of Certified Public Accountants

of Singapore.

Ang Meng Huat AnthonyChief Executive officer

ARA Asset Management (Fortune) Limited,

Manager of Fortune REIT

Mr Ang Meng Huat, Anthony is the chief executive

officer of ARA Asset Management (Fortune) Limited,

the manager of Fortune REIT. He is also an alternate

director (to Lim Hwee Chiang John) of Am ARA REIT

Managers Sdn. Bhd., the manager of AmFIRST REIT

listed on Bursa Malaysia, and an independent non-

executive director of Armstrong Industrial Corporation

Limited, a precision engineering group listed on the

SGx-ST. Prior to his current appointment, Mr Ang was the

chief executive officer of ARA Managers (Asia Dragon) Pte.

Ltd., the manager of the ARA Asia Dragon Fund.

Before joining the Group in 2006, Mr Ang held various senior

positions with GIC Real Estate Pte. Ltd., a global real estate

fund management company; Vertex Management Pte.

Ltd., a Singapore-based global venture capital company;

Majulah Connection Limited, a global business networking

and consulting organisation, and Armstrong Industrial

Corporation Limited. Mr Ang began his career with the

Singapore Economic Development Board where he served

for 14 years, including 6 years in the United States as the

regional director of their North American operations.

Mr Ang holds a Bachelor of Science degree (Mechanical

Engineering) with First Class Honours from the Imperial

College, London University, and obtained a Master of

Business Administration from the European Institution of

Business Administration (INSEAD) in 1982 on a scholarship

from the Singapore and French governments. He is also

a fellow of the Chartered Management Institute (United

Kingdom) and the vice chairman of the Chartered

Management Institute Singapore.

Stephen Henry ChuChief Executive officer

ARA Asset Management (Prosperity) Limited,

Manager of Prosperity REIT

Mr Stephen Henry Chu is the chief executive officer of

ARA Asset Management (Prosperity) Limited, the manager

of Hong Kong-listed Prosperity REIT. Prior to this, he was

the chief executive officer of ARA Asset Management

(Fortune) Limited, the manager of Fortune REIT.

Mr Chu has more than 20 years of international property

experience in the fields of leasing, sales, facility and

property management and marketing work covering the

retail, residential, hotel, and commercial sectors of the real

estate market. Prior to joining the Group, Mr Chu was with

Harbour Plaza Hotels & Resorts from 1998 to 2007 where

he held various positions including general manager, and

A N N U A L R E P O R T 2 0 0 9 43

deputy general manager (group leasing). Before that, he

held senior posts with various companies including Sino

Land Company Limited, Primeland Realty Inc, and Century

21 Charter Realty Inc.

Mr Chu holds a Bachelor of Arts (Honours) degree and a

Master of Business Administration degree.

Lim Yoon PengChief Executive officer

Am ARA REIT Managers Sdn. Bhd.,

Manager of AmFIRST REIT

Mr Lim Yoon Peng is the chief executive officer of Am ARA

REIT Managers Sdn. Bhd., the manager of Malaysia-listed

AmFIRST REIT.

Prior to joining the Group, Mr Lim was the chief financial

officer of Axis REIT Managers Bhd, where he was involved

in the establishment of Axis REIT, the first REIT to be listed

in Malaysia, in 2005. From 2001 to 2005, Mr Lim was the

financial controller and company secretary of Victoria

Investments & Properties Pty Ltd, a real estate company

focusing on real estate in Melbourne, Australia. He started

his career in 1980 as a credit and finance manager with

Finplan Credit & Leasing Sdn. Bhd. and was with various

international companies including Balfour, Williamson &

Co. Ltd of the United Kingdom and the Pacific Dunlop

Group of Australia.

Mr Lim is a fellow of The Chartered Association of Certified

Accountants, United Kingdom, a member of the Malaysian

Institute of Accountants and a fellow of Certified Public

Accountants Australia.

Daniel CerfChief Executive officer

ARA-CWT Trust Management (Cache) Limited,

Manager of Cache Logistics Trust

Mr Daniel Cerf is the chief executive officer of ARA-CWT

Trust Management (Cache) Limited, the manager of Cache

Logistics Trust, a REIT to be listed on the SGx-ST.

Mr Cerf has more than 20 years of experience in real estate

in Asia, having worked on investment and development

ventures in Hong Kong, the Philippines, Singapore,

Indonesia, Thailand, Vietnam and Malaysia. Prior to

joining the Group, Mr Cerf was the deputy chief executive

officer of K-REIT Asia Management Limited, the manager

of K-REIT Asia – a Keppel Land Limited sponsored REIT

listed on the SGx-ST. During Mr Cerf’s tenure, the total

assets under management of K-REIT Asia grew from

S$637 million in March 2006 to over S$2.1 billion. Mr Cerf’s

duties covered all day-to-day operations of K-REIT Asia

Management Limited, including sourcing and managing a

team of investment, asset and finance managers in meeting

the strategic, investment and operational objectives of

K-REIT Asia.

Mr Cerf had also held key director and/or management

positions with First Pacific Land – the former real estate

investment and development arm of the First Pacific

Company – in Hong Kong, Singapore and Malaysia. Mr

Cerf was also a founding shareholder of Supreme Value

Properties in Malaysia, a boutique residential property

investment and development company, created as a result

of a management buy-out of First Pacific Land’s interests

in Malaysia.

Mr Cerf is a licensed architect in the United States and

holds a Bachelor of Architecture Degree (Dean’s List) from

the University of Oklahoma, USA.



Ng Beng TiongChief Executive officer

ARA Managers (Asia Dragon) Pte. Ltd.,

Manager of the ARA Asia Dragon Fund

Director, Corporate office

Mr Ng Beng Tiong is the chief executive officer of

ARA Managers (Asia Dragon) Pte. Ltd., the manager of

the ARA Asia Dragon Fund. He holds the concurrent

appointment of director, corporate office, of ARA Asset

Management Limited, overseeing corporate development,

administration and training & development for the Group.

Mr Ng is also an independent director and chairman of the

audit committee of Micro-Mechanics (Holdings) Limited, a

precision engineering group listed on the SGx-ST.

Prior to joining the Group, from 2003 to 2007, Mr Ng was

the finance director of Low Keng Huat (Singapore) Ltd, a

property, construction and hotel group listed on the SGx-ST.

He was a director of Stone Forest M&A Pte. Ltd., a mergers

and acquisitions advisory company from 2002 to 2003, and

director of corporate planning and business development

at Labroy Marine Limited, a shipping, shipbuilding and

marine engineering company listed on the SGx-ST from

1997 to 2002. Mr Ng began his career with DBS Bank Ltd

in 1989, initially as a corporate banker, and subsequently as

an investment banker.

Mr Ng holds a Master of Engineering (Software Engineering)

(First Class Honours) from Imperial College, London. He is

also a CFA Charterholder.

Stephen Ray FinchChief Executive officer

ARA Strategic Capital,

Manager of the ARA Asian Asset Income Fund

Mr Stephen Ray Finch is the chief executive officer of ARA

Strategic Capital, the manager of the ARA Asian Asset

Income Fund.

Prior to joining the Group, Mr Finch was the managing

director and head of debt capital markets at DBS Bank Ltd

from 2000 to 2006 where he evaluated, structured, priced

and marketed primary and secondary offerings of REITs

as well as local and international debt securities offerings,

including convertible bonds, asset securitisations and

business trusts. He was the executive director of capital

markets focused on emerging market debt in ANZ

Investment Bank from 1996 to 1999 and was with Citigroup

from 1984 to 1996.

Mr Finch holds a Bachelor of Science from Texas A&M

University and a Master of Business Administration from

the Harvard Business School.

Chow Chee PengFund Director

ARA Managers (Harmony) Pte. Ltd.,

Manager of the ARA Harmony Fund

Mr Chow Chee Peng is the fund director of ARA Harmony

Fund, a single-asset private real estate fund invested in

the Suntec Singapore International Convention &

Exhibition Centre.

Mr Chow has over 15 years of real estate investment and

asset management experience in many Asian countries

including China, Malaysia, Singapore, Korea, Japan and

Indonesia. Before joining the Group in 2009, Mr Chow

was running his own real estate advisory business. Prior to

that, he had held various senior positions with Pacific Star

Group from 2005 to 2006 and the real estate arm of the

Government of Singapore Investment Corporation from

1999 to 2004.

Mr Chow holds a Bachelor of Accountancy Degree

(Honours) from the National University of Singapore. He

is a Certified Public Accountant (CPA) of Singapore since

1994 and a Chartered Financial Analyst (CFA) since 1999.

A N N U A L R E P O R T 2 0 0 9 45

Susan SimChief Executive officer

APM Property Management Pte. Ltd.

Ms Susan Sim is the chief executive officer of APM

Property Management Pte. Ltd., the property management

arm of the Group and currently the property manager

for Suntec REIT’s properties in Suntec City and the

managing agent of the Suntec City MCST.

Prior to joining the Group, Ms Sim was the co-founder

and chief executive officer of SGL Capital Investment

Pte. Ltd., manager of an AIM-listed Vietnam property

fund. She was the general manager of GuocoLand Limited

and prior to that, the senior vice president of Mapletree

Investments Pte. Ltd. and director retail of DBS Land Pte.

Ltd. (now part of CapitaLand Ltd). Ms Sim began her

career with the Singapore Tourism Board.

Ms Sim holds a Bachelor of Science degree in Finance

(Honours) from Southern lllinois University.

Pieter IdenburgChief Executive officer

Suntec Singapore International Convention

& Exhibition Services Pte. Ltd.

Mr Pieter Idenburg is the chief executive officer of Suntec

Singapore International Convention & Exhibition Services

Pte. Ltd., the convention & exhibition services provider for

Suntec Singapore.

With Suntec Singapore since 2005, Mr Idenburg brings

more than 20 years of extensive senior management

expertise and international experience from the airline and

hospitality industries where he has worked with American

Airlines, The Walt Disney Company and British Airways in

the United States and Europe. Mr Idenburg has a track

record as an innovator in the service industry and has been

influential in implementing large scale change initiatives to

increase shareholder value. He has held various leadership

positions focusing on financial, sales and marketing

strategies; customer service and operations as well as

project management.

At Suntec Singapore, Mr Idenburg has been instrumental

in helming landmark projects such as the extensive

building enhancement programme and the complex

Suntec Singapore venue operations for the IMF-World

Bank Annual Meetings in 2006. Within the organisation,

he has been influential in driving change at all levels. He

has been successful in growing the business exponentially

while encouraging employees to constantly raise the bar in

providing service excellence.

Mr Idenburg is presently chairman of the Board of the

Dutch Chamber of Commerce (Singapore) and also sits

on the Board of Singapore’s European Chamber of

Commerce. He is an advisory board member of the Cornell-

Nanyang Institute of Hospitality Management in Singapore

and serves as a committee member of the Hospitality and

Retail Group of the Singapore International Chamber of

Commerce.

Low Poh ChooDirector

ARA Financial

Ms Low Poh Choo is the director of ARA Financial, the

corporate finance advisory arm of the Group.

Prior to joining the Group, Ms Low was vice president of

global financial markets (asset backed structured products)

at DBS Bank Ltd from 2003 to 2006. She was with the REIT

origination team, where she evaluated, advised, structured

and marketed various primary and secondary REIT

offerings. Ms Low began her career as an equity analyst

and has 17 years of experience in the field, including 11

years as a specialist in the real estate sector.

Ms Low holds a Bachelor of Arts from the University of

California, Berkeley.



Seow Bee Lian CherylGroup Finance Director

Ms Seow Bee Lian Cheryl is the group finance director

of ARA Asset Management Limited, responsible for the

Group’s finance function.

Prior to joining the Group, Ms Seow established and ran

her own boutique consultancy firm providing accounting

and consultancy services to small and medium enterprises

from 2002 to 2003. From 1990 to 2002, she was with

various companies listed on the SGx-ST. She was the

deputy financial controller and company secretary of

L.C. Development Ltd from 1997 to 2002, and was with

Royal Sporting House from 1994 to 1997 and Lum Chang

Holdings Limited from 1990 to 1993. Ms Seow began her

career with Deloitte & Touche, Singapore in 1988.

Ms Seow holds a Bachelor of Accountancy from the

National University of Singapore and is a Certified Public

Accountant with the Institute of Certified Public Accountants

of Singapore.

Moses SongDirector, Corporate Business Development

Mr Moses Song is the director, corporate business

development, of ARA Asset Management Limited,

responsible for business development for the Group.

Prior to joining the Group, Mr Song was a principal and

chief operating officer at Lubert-Adler Asia Advisors

Pte. Ltd., the Asia investment platform of United States-

based real estate private equity firm Lubert-Adler Partners

L.P., where he was responsible for North Asia investment

opportunities, and with Marathon Asset Management

(Singapore) Pte. Ltd., as managing director responsible for

real estate finance and investments in Asia. He was based

in Hong Kong from 2004 to 2007 with Merrill Lynch (Asia)

Ltd. as a director in the global commercial real estate

group and Morgan Stanley Asia Ltd. as a vice-president of

Morgan Stanley International Real Estate Funds. Mr Song

began his career as a corporate and real estate finance

attorney in the United States. He moved to Asia in 2000 as

a seconded attorney to Morgan Stanley International Real

Estate Funds in Tokyo, Japan and was appointed general

counsel of Morgan Stanley’s real estate asset management

platform in Korea in 2001.

Mr Song holds a Juris Doctorate from the Vanderbilt

University School of Law and a Bachelor of Science in

Economics from Centre College. He is a member of the

State Bar of Texas.

Mun Hon PhengCountry Head, China

Mr Mun Hon Pheng is the country head, China of ARA Asset

Management Limited. Mr. Mun is also an independent

non-executive director of Eagle Ceramics Ltd, a China-

based ceramic tile manufacturing company and Dayen

Environmental Ltd, a Singapore-based water treatment

company, both listed in Singapore.

Prior to joining the Group, Mr Mun operated a boutique

advisory business specialising in advising Singapore

companies on cross border acquisition opportunities

in China particularly in the acquisition of commercial

properties. Mr Mun began his career in banking with

SIMBL, a joint venture merchant bank between a UK

merchant bank and OCBC in 1982. He subsequently joined

the First National Bank of Chicago where he served for

8 years, including 4 years in Beijing, China as the bank’s

representative and three years in Hong Kong heading

up the bank’s China Group. He was also an executive

director of Aztech Systems Ltd, an IT company listed on

the SGx-ST.

Mr Mun holds a Bachelor of Commerce degree (Accounting

and Information Systems) from the University of New

South Wales, Sydney, Australia and obtained a Master

of Business Administration from the Australian Graduate

School of Management, Sydney, Australia in 1981. He is

also a member of the Chartered Institute of Arbitrators

(United Kingdom) and a fellow of the Singapore Institute

of Arbitrators.

A N N U A L R E P O R T 2 0 0 9 47

I n V e s t o R R e L A t I o n s

ARA is committed to maintaining proactive and effective

communications with all stakeholders – shareholders,

investment professionals, analysts and the media. We

keep shareholders informed and updated by making

timely announcements on developments in the Group

and engage existing and new investors in face-to-

face meetings, conference calls, non-deal roadshows,

investment conferences as well as via quarterly

performance and strategic updates. Management also

proactively engages analysts to encourage more research

coverage on the Company.

ARA maintains open and timely communications with the

media through various channels including press releases,

interviews and targeted pitching of story ideas to individual

journalists to increase media coverage and raise the profile

of the Group. Going forward, the Group will continue to

strive to uphold the highest standards of accountability

and disclosure to shareholders.

The Group’s proactive investor relations approach has been

recognised by the investment community with numerous

awards including:

ARA Asset Management limited

• “CertificateOfExcellence”,IRMagazineSouthEast

Asia Awards 2009

• “BestInvestorRelationsforanIPO”,IRMagazine

South East Asia Awards 2008

Suntec REIT

• “RunnerUp(REITsCategory)–MostTransparent

Company Award”, Securities Investors Association of

Singapore Investors’ Choice Award 2009







• “RunnerUp(NewIssueCategory)–MostTransparent



Fortune REIT

• “BronzeAward–PrintingandProduction:REIT

– Retail / Shopping Center”, International Annual

Report Competition Awards 2009

• “HonoursAward–OverallAnnualReport:REIT

– Retail / Shopping Center”, International Annual

Report Competition Awards 2009

Prosperity REIT

• “GoldAward–Design:AnnualReport(REITIndustrial/

Office Property)”, International GALAxY 2009 Awards

Competition

• “SilverAward–AnnualReport(International)”,

International GALAxY 2009 Awards Competition

• “HonorsAward–AnnualReports(REITs)”,

International GALAxY 2008 Awards Competition

Other major awards won by the Group include:

Suntec Singapore

• “BestConvention&ExhibitionCentre”,TTGTravel

Awards 2007 – 2009

• “Asia’sLeadingConferenceCentre”,WorldTravel

Awards 2006 – 2009


c o R p o R A t e I n f o R m A t I o n

Board of Directors

Chiu Kwok Hung JustinChairman and Non-Executive Director

Lim Hwee Chiang JohnGroup Chief Executive officer and Executive Director

Ip Tak Chuen EdmondNon-Executive Director

Lee Yock SuanIndependent Non-ExecutiveDirector

Lim How TeckIndependent Non-ExecutiveDirector

Cheng Mo Chi MosesIndependent Non-ExecutiveDirector

Colin Stevens RusselIndependent Non-ExecutiveDirector

Audit Committee

Lee Yock Suan (Chairman)Lim How TeckCheng Mo Chi MosesColin Stevens Russel

Remuneration Committee

Cheng Mo Chi Moses (Chairman)Lim How TeckColin Stevens RusselIp Tak Chuen Edmond

Nominating Committee

Lim How Teck (Chairman)Cheng Mo Chi MosesColin Stevens Russel

Company Secretary

Yvonne Choo

Assistant Company Secretaries

Sharon Lim Siew ChooIra Stuart Outerbridge III

Registered office

Clarendon House2 Church StreetHamilton HM 11Bermuda

Principal Place of Business

6 Temasek Boulevard#16-02 Suntec Tower FourSingapore 038986Tel: 65 6835 9232Fax: 65 6835 9672

Singapore Share Transfer Agent

Boardroom Corporate & AdvisoryServices Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 045623

Auditors

KPMG LLP16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581(Partner-in-charge: Eng Chin Chin)(Appointment since financial yearended 31 December 2007)

Principal Bankers

DBS Bank Ltd6 Shenton WayDBS Building Tower OneSingapore 068809

The Hongkong and ShanghaiBanking Corporation Limited21 Collyer QuayHSBC BuildingSingapore 049320

Standard Chartered Bank6 Battery RoadSingapore 049909

A N N U A L R E P O R T 2 0 0 9 49

f I n A n c I A L s tA t e m e n t s

52 Report on Corporate Governance

66 Directors’ Report

69 Statement by Directors

70 Independent Auditors’ Report

72 Statements of Financial Position

73 Consolidated Income Statement

74 Consolidated Statement of Comprehensive Income

75 Consolidated Statement of Changes in Equity

77 Consolidated Cash Flow Statement

79 Notes to the Financial Statements

117 Supplementary Information

118 Shareholders’ Information

120 Notice of Annual General Meeting

125 Notice of Books Closure

A N N U A L R E P O R T 2 0 0 9 51

R e p o R t o n c o R p o R A t e g o V e R n A n c e

ARA is committed to maintaining high standards of corporate governance in line with the Code of Corporate Governance

2005 (the “Code”). We believe that sound corporate governance policies and practices is the foundation for a trusted,

successful, profitable and respected business organisation. As we work towards our long term strategic objectives, we seek

to observe both the substance and spirit of the Code while bearing in mind the Group’s specific business needs and the

interests of all stakeholders.

This report discusses the Group’s application of the principles and guidelines of the Code which is underpinned by a robust

structure and system of internal controls and accountability to all stakeholders. This will promote and drive long term

sustainable growth and shareholder value.

ARA is pleased to confirm that the Group has adhered to the principles and guidelines of the Code unless specified

otherwise.

BoARD MATTERS

THE BoARD’S CoNDuCT oF AFFAIRS

Principle 1 Every company should be headed by an effective Board to lead and control the company. The Board

is collectively responsible for the success of the company. The Board works with Management to

achieve this and the Management remains accountable to the Board.

The Board is entrusted with the responsibility of overseeing the Group’s overall management and guiding its strategic

direction, including establishing a prudent and effective framework of controls for risk management, establishing goals for

Management and monitoring the achievement of these goals.

Each of our Directors is a respected individual in corporate and/or international circles and brings to the Board his

experience, insight, judgement and strategic networking relationships, which serve to further the interests of the Group.

Collectively and individually, the Directors act in good faith in the course of deliberations and consider at all times the

interests of the Group. Profiles of the Directors can be found in page 38 to 41 of this Report.

The Board has adopted internal guidelines setting forth matters that require board approval. Matters requiring board

approval include significant acquisition and disposal of assets, material investments and divestments, capital expenditure

and operating budget and all commitments to term loans and lines of credit from banks and financial institutions as well

as those involving a conflict of interest for a substantial shareholder or a director. Management, on the other hand, is

responsible for the day-to-day operation and administration of the company in accordance with the policies and strategy

set by the Board.

Directors are also briefed by Management on the business activities and strategic directions of the Group, and provided

with relevant information on the Group’s policies and procedures relating to corporate conduct and governance including

but not limited to disclosure of interests in securities, prohibitions on dealings in the Company’s securities and restrictions

on disclosure of price sensitive information.

The Board conducts regular scheduled meetings at least four times a year. Ad-hoc meetings are convened as and when

warranted by particular circumstances. The Company’s Bye-Laws provides for meetings to be held via telephone conference.


The participation of each Director in the various Board and Board Committee meetings held during the year under review

is summarised in page 64 of this Report.

All newly-appointed Directors are given letters explaining the terms of their appointment as well as their duties and

obligations. A comprehensive orientation programme which includes management presentations on the Group’s business

and strategic plans and objectives is arranged for all new Directors.

BoARD CoMPoSITIoN AND GuIDANCE

Principle 2 There should be a strong and independent element on the Board, which is able to exercise objective

judgement on corporate affairs independently, in particular, from Management. No individual or

small group of individuals should be allowed to dominate the Board’s decision making.

The composition of the Board is determined in accordance with the following principles:

• theChairmanoftheBoardshouldbeaNon-ExecutiveDirector;

• theBoardshouldcompriseDirectorswithabroadrangeofcommercialexperienceincludingexperienceinfund

management, finance, law and real estate; and

• atleastone-thirdoftheBoardshouldcompriseIndependentDirectors.

Our Bye-Laws provide that the Board shall consist of no fewer than two Directors. Currently, the Board comprises one

executive Director, two Non-Executive Directors and four Independent Non-Executive Directors (within the meaning of

the Code). The Independent Non-Executive Directors are Mr Lee Yock Suan, Mr Lim How Teck, Dr Cheng Mo Chi Moses

and Mr Colin Stevens Russel.

The current composition of the Board includes a diverse breath of expertise and experience. This enables Management to

benefit from the external and expert perspectives of the Directors. There is a clear separation of the role of the Chairman

and the Group CEO which allows for a robust exchange of views and ideas in shaping the strategy of the Group. The Board

reviews its composition regularly to ensure an appropriate mix of expertise and experience.

The Board is supported by various Board committees, namely the Audit Committee, Nominating Committee and

Remuneration Committee. Membership to these committees is carefully considered to ensure the independence and

objectivity of the committees. The experience and relevance of skills of each Director are also considered in determining

the Directors’ suitability for appointment to the committees.

CHAIRMAN AND GRouP CHIEF EXECuTIvE oFFICER

Principle 3 There should be a clear division of responsibilities at the top of the company – the working of the

Board and the executive responsibility of the company’s business – which will ensure a balance of

power and authority, such that no one individual represents a considerable concentration of power.

A N N U A L R E P O R T 2 0 0 9 53


The positions of Chairman and Group CEO are held by separate individuals to ensure an appropriate balance of power,

increased accountability and greater capacity of the Board for independent decision-making.

Our Chairman and Non-Executive Director, Mr Chiu Kwok Hung Justin, is responsible for the overall leadership of our

Board. Mr Chiu also ensures that Directors receive adequate and timely information, and there is effective communication

with shareholders. He also encourages constructive relations between our Board members and Management, facilitates

the effective contribution of Non-Executive Directors, and promotes high standards of corporate governance.

Our Group CEO, Mr Lim Hwee Chiang John, works with the Board to determine the strategy for the Group and is responsible

for the day-to-day operations of the Group. Mr Lim works with the senior management of the Group to ensure that the

Group operates in accordance with our strategic and operational objectives.

BoARD MEMBERSHIP

Principle 4 There should be a formal and transparent process for the appointment of new directors to the Board.

Board renewal is a continual process, one which is essential to ensuring that the Board remains relevant to the changing

business environment and for maintaining good corporate governance. The Board has established a Nominating

Committee which comprises three Independent Non-Executive Directors namely Mr Lim How Teck, Dr Cheng Mo Chi

Moses and Mr Colin Stevens Russel. The Chairman of the Nominating Committee is Mr Lim How Teck.

The Nominating Committee is guided by its terms of reference which sets out its responsibilities. These include:

(i) establishing procedures for and making recommendations to the Board on all Board appointments and re-

appointments;

(ii) determining on an annual basis if a Director is independent;

(iii) deciding if a Director who has multiple board representations is able to and has been adequately carrying out his

duties as a Director; and

(iv) evaluating the performance of the Board and proposing objective performance criteria for the Board’s approval.

The Nominating Committee reports to the Board and meets at least once a year.

The Nominating Committee has put in place a formal process for the selection of new Directors and the re-appointment of

Directors to increase the transparency of the nominating process in identifying and evaluating candidates for appointment

or re-appointment.

The Nominating Committee leads the process and makes recommendation to the Board on the suitability of candidates for

appointment to the Board based on objective criteria such as integrity, independent mindedness, commitment, financial

literacy and ability to contribute to the Board process.

The Nominating Committee reviews the independence of Board members and has determined that Mr Lee Yock Suan, Mr

Lim How Teck, Dr Cheng Mo Chi Moses and Mr Colin Stevens Russel are independent. The Nominating Committee also


determines annually if a Director with multiple board representations is able to and has been adequately carrying out his

duties as a Director of the Company. Although the Non-Executive Directors and Independent Non-Executive Directors

hold directorships in other companies, the Nominating Committee is satisfied that such multiple board representations do

not hinder them from carrying out their duties as Directors of the Company. These Directors widen the experience of the

Board and provide a broader perspective. The Board affirms and supports this view.

Our Bye-Laws require that each Director retires at least once every three years but would be eligible for re-election. A

newly appointed Director is also required to submit himself/herself for retirement and re-election at the Annual General

Meeting (“AGM”) immediately following his/her appointment. A summary of each Director’s initial appointment and last

re-election as well as their directorships in listed companies is set out in page 65 of this Report.

In recommending a Director for re-election to the Board, the Nominating Committee considers, amongst other things, his

contributions to the Board (including attendance and participation at meetings, time and effort accorded to the Group’s

business and affairs) and his independence. The Board has the discretion of accepting or rejecting the Nominating

Committee’s recommendation and its decision is final.

The Nominating Committee has recommended the nomination of Mr Ip Tak Chuen Edmond and Mr Lee Yock Suan for re-

election at the forthcoming AGM. The Board has accepted the recommendation of the Nominating Committee and being

eligible, Mr Ip Tak Chuen Edmond and Mr Lee Yock Suan will be offering themselves for re-election at the AGM.

BoARD PERFoRMANCE

Principle 5 There should be a formal assessment of the effectiveness of the Board as a whole and the contribution

by each director to the effectiveness of the Board.

We believe that the performance of the Board is ultimately reflected in the long term performance of the Group. The Board

is responsible for overseeing the Group’s overall management and guiding our strategic direction, as well as ensuring our

compliance with applicable laws. Collectively and individually, the Directors have a duty to act in good faith and exercise

due diligence and care in the best interests of the Group and its shareholders.

The Nominating Committee acknowledges the importance of a formal assessment of Board performance and has

adopted a formal system of evaluating Board performance as a whole. The Nominating Committee determines the criteria

for evaluating the Board’s performance. The performance criteria includes an evaluation of the size and composition of

the Board, the Board’s access to information, its accountability, Board processes, the Board’s performance in relation to

discharging its principal responsibilities, communication with Management and establishing and upholding standards of

conduct for the Directors.

The evaluation of the Board’s performance is conducted by means of a questionnaire completed by each Director,

which is then collated and the findings analysed and discussed with the Nominating Committee and the Board.

Recommendations to further enhance the effectiveness of the Board are implemented, as appropriate.

A N N U A L R E P O R T 2 0 0 9 55

ACCESS To INFoRMATIoN

Principle 6 In order to fulfill their responsibilities, Board members should be provided with complete, adequate

and timely information prior to board meetings and on an ongoing basis.

We believe that the Board should be provided with complete, adequate and timely information prior to Board meetings

and on an ongoing basis. Management provides the Board with timely and adequate information on Board matters and

issues requiring the Board’s deliberations. All Directors are also provided with ongoing reports relating to the operational

and financial performance of the Group to enable them to exercise effective oversight over the Group’s operational and

financial performance.

Board meetings for each year are scheduled in advance to facilitate Directors’ individual administrative arrangements in

respect of ongoing commitments. Board papers are generally circulated at least three days in advance of each meeting

and include background explanatory information to enable the Directors to make informed decisions. Such explanatory

information may also be in the form of briefings to the Directors or formal presentations by senior management staff in

attendance at Board meetings, or by external professionals.

The Board has separate and independent access to the Company Secretary and to senior management staff at all times.

The Company Secretary, or her authorised designate(s), attends all meetings of the Board and Board committees and

prepares minutes of board proceedings. She assists the Chairman to ensure that Board procedures are followed and are

regularly reviewed to ensure the effective functioning of the Board and compliance with relevant rules and regulations. The

Company Secretary also assists the Chairman and the Board to implement and strengthen corporate governance practices

and processes with a view to enhancing long-term shareholder value.

Where the Directors require independent professional advice in the course of their duties, such advice would be provided

at the Company’s expense.

REMuNERATIoN MATTERS

PRoCEDuRES FoR DEvEloPING REMuNERATIoN PolICIES

Principle 7 There should be a formal and transparent procedure for developing policy on executive remuneration

and for fixing the remuneration packages of individual directors. No director should be involved in

deciding his own remuneration.

We believe that executive remuneration should be linked to the development of management depth for continual talent

development and management renewal to ensure the continued success of the Group. The Remuneration Committee

of the Board comprises four Directors, all of whom are Non-Executive Directors and a majority of whom, including the

Chairman, are independent. The members of the Remuneration Committee are Dr Cheng Mo Chi Moses, Mr Lim How

Teck, Mr Colin Stevens Russel and Mr Ip Tak Chuen Edmond. The Chairman of the Remuneration Committee is Dr Cheng

Mo Chi Moses.



The Remuneration Committee assists the Board in:

(i) overseeing executive staff compensation and development in the Group;

(ii) determining and reviewing, from time to time, the remuneration policy of the Group;

(iii) reviewing and setting compensation policies and remuneration for Executive Directors and senior executives;

(iv) ensuring, as far as possible, that the remuneration packages of the Group take due account of the environment and

circumstances faced by the Group in the various markets and countries in which we operate; and

(v) administering the Group’s Performance Based Bonus Scheme.

The Remuneration Committee reports to the Board and meets at least once a year.

lEvEl AND MIX oF REMuNERATIoN

Principle 8 The level of remuneration should be appropriate to attract, retain and motivate the directors needed

to run the company successfully but companies should avoid paying more than is necessary for this

purpose. A significant proportion of executive directors’ remuneration should be structured so as to

link rewards to corporate and individual performance.

In setting remuneration packages, the Group takes into consideration the remuneration and employment conditions within

the same industry and in comparable companies, as well as the Group’s relative performance and the performance of

each individual.

The Independent Non-Executive Directors receive Directors’ fees commensurate with their appointment, taking into

account factors such as their time spent and responsibilities. Directors’ fees are recommended by the Board for approval

at the Company’s AGM.

The Non-Executive Directors (other than the Independent Non-Executive Directors) do not receive Directors’ fees. The

Group CEO and Executive Director, Mr Lim Hwee Chiang John, has a service agreement with the Company for an initial

term of 2 years commencing on 2 October 2007. The service agreement with Mr Lim was renewed on 1 November 2009

for an indefinite term to ensure continuity of Mr Lim’s services. The agreement may, however, be terminated by written

notice of 6 months by either party or if there is a breach of the provisions of the agreement. Under the terms of the service

agreement, Mr Lim is paid a base salary payable monthly in arrears.

In addition to base salary and a variable year-end bonus, designated executives of the Group participate in the Group’s

Performance Based Bonus Scheme at the absolute discretion of the Remuneration Committee (the “Participants”). Under

the scheme, the Participants from each operating business unit of the Group may be entitled to a pool of incentive

payments based on certain performance indicators. The calculation for the pool of incentive payments for each of the

business units and the award schedule is set out in the table below. 10% of each pool of incentive payments for each

business unit of the Group is deducted and contributed to the pool of incentive payments for the Participants from the

corporate divisions of the Group which support the various business units.

A N N U A L R E P O R T 2 0 0 9 57

(1) Before deduction for the contribution to the pool of incentive payments for the corporate divisions.(2) Refers to vendors which are not members of the Cheung Kong Group.(3) 10% of each of these amounts will be deducted from the pool of incentive payments for each business unit and contributed to the

pool of incentive payments for the corporate divisions which support the various business units. The awards (if any) to employees from the corporate division would be made once every financial year.

Any such pool of incentive payments or any part thereof may be allocated to Participants of the scheme engaged in the

relevant business unit or corporate division at the absolute discretion of the Remuneration Committee. Such allocation

takes into account each Participant’s seniority, length of service and his/her performance and contributions. Any amount

allocated shall be paid to the Participant in the form of cash.

Each Participant’s annual entitlement under the scheme for each business unit he/she is engaged in is subject to a maximum

cap of his/her annual base salary (which excludes any annual wage supplement, bonus, award and other fringe benefit)

for that financial year, save for entitlements under the private real estate fund management and, where applicable, the

specialist equity fund management business units, which is subject to a maximum cap of the equivalent of the Participant’s

annual base salary (as described above) from the commencement of each relevant closed-end fund to the realisation of

such fund.

The scheme is targeted at key executives who are in the best position to drive the growth of our Group through superior

performance. It is an incentive plan designed on the basis that it is important to retain employees whose contributions are

essential to the growth and profitability of our Group. The scheme allows the Group to attract potential employees with

relevant skills and to motivate existing employees to optimise their performance, efficiency as well as maintain a high level

of contribution to our Group, and more importantly, to retain key executives of our Group whose contributions are essential

to our long-term growth and profitability. In addition, the scheme is designed to convey the Group’s recognition and

appreciation to the executives who have contributed to our growth to further strengthen these individuals’ commitment,

support and loyalty to our long-term growth and profitability.

REITs Private Real Estate Funds

Specialist Equity Funds Corporate Finance Advisory Services

Pools of incentive payments for each business units(1)

10% of acquisition fees for each REIT manager paid on acquisition of assets from third party vendors(2), (3)

10% to 20% of performance fees for each fund(3)

10% of performance fees for each fund(3)

10% of revenue generated by ARA Financial in excess of its annual approved budget(3)

Award Schedule

Half-yearly Upon the realisation of the performance fee for each fund

Half-yearly in respect of each open-ended fund and in respect of each closed-end fund, upon the realisation of the performance fee for that fund

Annually



DISCloSuRE oN REMuNERATIoN

Principle 9 Each company should provide clear disclosure of its remuneration policy, level and mix of

remuneration, and the procedure for setting remuneration in the company’s annual report. It should

provide disclosure in relation to its remuneration policies to enable investors to understand the link

between remuneration paid to directors and key executives, and performance.

The remuneration of the Directors for the year ended 31 December 2009 in bands of S$250,000 is provided below:

(1) Includes AWS and employer’s CPF(2) Mr Chiu Kwok Hung Justin and Mr Ip Tak Chuen Edmond are nominees of Cheung Kong Investment Company Limited, a

substantial shareholder of the Company, and have agreed to waive their right to receive any directors’ fees(3) Key person and strategic advisory fees paid to Mr Chiu Kwok Hung Justin by ARA Fund Management (Asia Dragon) Limited for

strategic advice and serving as a key person of the ARA Asia Dragon Fund

A breakdown of the remuneration of the Directors for the year ended 31 December 2009 is set out below:

Remuneration Bands in Fy2009 Number of Directors

S$500,000 and above 1

S$250,000 to below S$500,000 1

Below S$250,000 4

Total 6

Remuneration Band/Name of Director

Salary(1)

(%)Bonus

(%)Directors’ Fees(2)

(%)others

(%)Total(%)

(i) S$500,000 and above

Mr Lim Hwee Chiang John 100 - - - 100

(ii) S$250,000 to below S$500,000

Mr Chiu Kwok Hung Justin - - - 100(3) 100

(iii) Below S$250,000

Mr Lee Yock Suan - - 100 - 100

Mr Lim How Teck - - 100 - 100

Dr Cheng Mo Chi Moses - - 100 - 100

Mr Colin Stevens Russel - - 100 - 100

A N N U A L R E P O R T 2 0 0 9 59

We have also provided a Group-wide cross-section of key executives’ remuneration by number of employees in bands

of S$250,000 in lieu of naming the top 5 key executives who are not Directors of the Company. We believe that this

disclosure, which provides sufficient overview of the remuneration of the Group while maintaining confidentiality

of staff remuneration matters, is in the best interests of the Group given the competitive conditions in the fund

management industry.

Save for Mr Lim Hwee Chiang John who is a substantial shareholder of the Company and Ms Chiu Yu Justina who is an

immediate family member of the Chairman and Non-Executive Director, Mr Chiu Kwok Hung Justin, there are no other

Directors or executives who are related to one another or to any of our substantial shareholders. The Group currently

does not have any share option scheme or share plan. There are no existing or proposed service agreements entered

into or to be entered into by the Directors or executives with the Company that provide for benefits upon termination of

appointment or employment. We have also not set aside nor accrued any amounts to provide for pension, retirement or

similar benefits for the Directors and executives of the Group.

ACCouNTABIlITy AND AuDIT

ACCouNTABIlITy

Principle 10 The Board should present a balanced and understandable assessment of the company’s performance,

position and prospects.

We seek to keep stakeholders updated on the Group’s financial performance, position and prospects through quarterly

and annual financial reports as well as timely announcements on developments in the Group’s businesses. Quarterly

results are released to shareholders within 45 days of the reporting period while the full year results are released to

shareholders within 60 days of the financial year end. In presenting the financial reports, we aim to provide a balanced and

understandable presentation of the Group’s financial performance, position and prospects.

Management provides the Board with a continual flow of relevant information on the performance of the Group on a timely

basis in order that the Board may effectively discharge its duties.

Total Compensation Bands in Fy2009 Number of Employees

S$500,000 to below S$750,000 4

S$250,000 to below S$500,000 6

Below S$250,000 10

Total 20



AuDIT CoMMITTEE

Principle 11 The Board should establish an Audit Committee with written terms of reference which clearly set out

its authority and duties.

The Audit Committee of the Board comprises four Directors, all of whom are Independent Non-Executive Directors. The

Audit Committee members are Mr Lee Yock Suan, Mr Lim How Teck, Dr Cheng Mo Chi Moses and Mr Colin Stevens Russel.

The Chairman of the Audit Committee is Mr Lee Yock Suan.

The members of the Audit Committee bring with them invaluable experience and professional expertise in the financial

and legal domains. The Audit Committee is guided by its terms of reference which includes reviewing:

(i) the annual audit plan;

(ii) the adequacy of the internal audit process;

(iii) the results of audit findings and Management’s response;

(iv) the adequacy of the Group’s accounting and other controls; and

(v) interested person transactions.

The Audit Committee also reviews the quarterly and annual financial statements and any formal announcements relating

to our financial performance as well as the non-audit services provided by the external auditors to ensure that provision of

such services will not affect the independence of the external auditors.

The Audit Committee makes recommendations to the Board on the appointment/re-appointment of the external auditors,

taking into consideration the scope, results of the audit as well as the cost effectiveness and the independence and

objectivity of the external auditors. The Audit Committee has reviewed all non-audit services provided by the external

auditors and is satisfied that the provision of such services did not affect the independence of the external auditors.

The Audit Committee also reviews arrangements by which employees of the Group may, in confidence, raise concerns

about possible improprieties in matters of accounting and financial controls and reporting. Pursuant to this, the Board has

adopted a Whistle Blowing Policy where employees may raise such concerns directly to the Audit Committee.

The Audit Committee meets at least four times a year and at least annually with the external auditors and internal auditors

without the presence of Management. The external auditors and internal auditors may also request the Audit Committee

to meet if they consider a meeting necessary. The Audit Committee is required to pass resolutions only upon an unanimous

vote. Any conflicting views are submitted to the full Board for its final decision. Any member who has an interest in any

matter being reviewed or considered abstains from voting on the matter.

A N N U A L R E P O R T 2 0 0 9 61

INTERNAl CoNTRolS

Principle 12 The Board should ensure that the Management maintains a sound system of internal controls to

safeguard the shareholders’ investments and the company’s assets.

Risk assessment and evaluation is an integral part of the Group’s ongoing operations. The Group has identified the key

risks faced by the various business units and set out the appropriate mitigating actions as well as monitoring mechanisms

to respond to changes within the Group and the external business environment. The Audit Committee reviews the Group’s

risk management policies and internal control systems established by Management, with the assistance of both the

internal and external auditors.

The Group’s internal and external auditors conduct an annual review of the effectiveness of the Group’s internal controls,

including financial, operational and compliance controls and risk management. Any material non-compliance or failures

in internal controls including recommendations for improvements are reported to the Audit Committee. The Audit

Committee also reviews the effectiveness of actions taken by Management on the recommendations made by the

internal and external auditors in this respect.

During the year, the Audit Committee has reviewed the effectiveness of the Group’s internal control systems and the

Board is satisfied that the Group’s internal control systems are adequate to meet the needs of the Group in its current

business environment.

INTERNAl AuDIT

Principle 13 The company should establish an internal audit function that is independent of the activities it audits.

The Group has engaged Deloitte & Touche Enterprise Risk Services Pte. Ltd. (“Deloitte”), an independent firm, to conduct

a full review of its internal control systems and assist the Group Internal Audit Department (together with Deloitte, referred

to as the “Internal Auditor”) to examine, identify, analyse and monitor if there are any material non-compliance and internal

control improvements, including financial, operational and compliance controls and risk management systems.

The Internal Auditor reports primarily to the Chairman of the Audit Committee on audit matters and to the Group CEO on

administrative matters. The Group’s internal audit activities are guided by the International Standards for the Professional

Practice of Internal Auditing set by The Institute of Internal Auditors.

The Audit Committee is satisfied that the Group’s internal audit function is adequately resourced and has appropriate

standing within the Group.

CoMMuNICATIoN WITH SHAREHolDERS

Principle 14 Companies should engage in regular, effective and fair communication with shareholders.

We strive for timeliness and consistency in our disclosures to stakeholders and it is the Group’s policy to keep all stakeholders

informed of material developments that would have an impact on the Group through announcements via SGxNET and on



the Group’s website. Such announcements are communicated on an immediate basis as required under the Listing Manual

of the SGx-ST (the “Listing Manual”), or as soon as possible where immediate disclosure is not practicable.

Regular briefings are conducted for analysts and media, generally coinciding with the release of the Group’s half year and

full year financial results. The materials used in these briefings are also disseminated simultaneously via SGxNET in the

interest of transparency and to ensure broad dissemination.

Management also actively engages institutional investors through face-to-face meetings, conference calls, non-deal

roadshows and by participating in investment conferences. We also strive to keep retail investors updated on developments

in the Group through timely announcements, the Group’s website and the media.

Principle 15 Companies should encourage greater shareholder participation at AGMs, and allow shareholders

the opportunity to communicate their views on various matters affecting the company.

Shareholders are accorded the opportunity to raise relevant questions and to communicate their views at shareholders’

meetings. Voting in absentia such as by mail, email or fax has not been implemented due to concerns relating to issues of

information control and security. All resolutions at the AGM are kept separate as far as practicable. The Chairpersons of

the Audit, Nominating and Remuneration Committees attend the AGM of the Company to address matters relating to the

work of the committees. The external auditors also attend the AGM to address shareholders’ queries on the conduct of

the audit and the preparation and content of the auditors’ report.

We view the AGM as the principal forum for dialogue with shareholders, in particular retail shareholders. AGM minutes are

prepared and made available to shareholders upon request. The Company has also designated contact persons who are

available to address queries from stakeholders from time to time.

DEAlINGS IN SECuRITIES

The Group has adopted an internal code which prohibits Directors of the Company and executives of the Group from

dealing in the Company’s shares during the periods commencing one month prior to the announcement of the Group’s

quarterly, half year and full year results and ending on the date of the announcement of the results, or if they were in

possession of non-public price-sensitive information concerning the Group (and in the case of Prosperity REIT, commencing

60 days immediately preceding the publication date of full year results announcement and 30 days immediately preceding

the publication date of half-year results announcement, pursuant to amendments to the Rules Governing the Listing of

Securities on The Stock Exchange of Hong Kong Limited which took effect from 1 April 2009). Executives of the Group

are required to report all dealings in the Company’s shares entered into by them or their immediate family members

(within the meaning of the Listing Manual of the SGx-ST). In addition, executives of the Group are prohibited from

dealing in units of publicly-listed REITs managed by the Group during the corresponding black-out periods for the REITs.

Directors of the Company and executives of the Group are discouraged from dealing in the Company’s shares on short-

term considerations.A N N U A L R E P O R T 2 0 0 9 63

INTERESTED PERSoN TRANSACTIoNS

Disclosure of interested person transactions is set out in page 117 of this Report. As a listed company on the SGx-ST, the

Company is required to comply with Chapter 9 of the Listing Manual of the SGx-ST on interested person transactions. In

addition to the requirements set out in the Listing Manual, the Board has also adopted a policy of requiring Directors to

declare their conflicts of interest, if any and abstain from voting if they are so conflicted.

Participation of Directors in Board and Board Committee Meetings

Board Meetings Audit Committee Nominating Committee Remuneration Committee

Name of Director

Appointment Attendance / Number

of meetings held


of meetings held


of meetings held


of meetings held

Mr Chiu Kwok Hung Justin

Chairman and Non-Executive Director

4/4 - N/A - N/A - N/A

Mr Lim Hwee Chiang John

Group CEO and Executive Director

4/4 - N/A - N/A - N/A

Mr Ip Tak Chuen Edmond

Non-Executive Director

4/4 - N/A - N/A Member 1/1

Mr Lee Yock Suan

Independent Non-Executive Director

4/4 Chairman 4/4 - N/A - N/A

Mr Lim How Teck


4/4 Member 4/4 Chairman 2/2 Member 1/1

Dr Cheng Mo Chi Moses


4/4 Member 4/4 Member 2/2 Chairman 1/1

Mr Colin Stevens Russel


4/4 Member 4/4 Member 2/2 Member 1/1



Name of Director Appointment Dates of Initial Appointment/ last re-election

Directorships in listed Companies

Mr Chiu Kwok Hung Justin

Chairman and Non-Executive Director

23 July 2002/29 April 2008

ARA Asset Management Limited

Cheung Kong (Holdings) LimitedMr Lim Hwee Chiang John

Group CEO and Executive Director

23 July 2002/29 April 2009


Teckwah Industrial Corporation LimitedMr Ip Tak Chuen Edmond

Non-Executive Director 17 September 2007/29 April 2008


AVIC International Holding (HK) Limited (formerly known as CATIC International Holdings Limited )

Cheung Kong (Holdings) Limited

Cheung Kong Infrastructure Holdings Limited

CK Life Sciences Int’l., (Holdings) Inc.

Excel Technology International Holdings Limited

Shougang Concord International Enterprises Company Limited

TOM Group Limited

Ruinian International LimitedMr Lee Yock Suan Independent

Non-Executive Director17 September 2007/29 April 2008


Mr Lim How Teck Independent Non-Executive Director

17 September 2007/29 April 2008


Eng Kong Holdings Limited

IFS Capital Limited

Lasseters International Holdings Limited

Mermaid Maritime Public Company LimitedDr Cheng Mo Chi Moses




China COSCO Holdings Company Limited

China Mobile Limited

China Resources Enterprise, Limited

City Telecom (HK) Limited

Guangdong Investment Limited

Hong Kong Exchanges and Clearing Limited

Kader Holdings Company Limited

Liu Chong Hing Investment Limited

Tian An China Investments Company Limited

Towngas China Company Limited

K.Wah International Holdings LimitedMr Colin Stevens Russel




Cheung Kong Infrastructure Holdings Limited

CK Life Sciences Int’l., (Holdings) Inc.

Husky Energy Inc.

Dates of Initial Appointment of Directors and Directorships in listed Companies

A N N U A L R E P O R T 2 0 0 9 65

d I R e c t o R s ’ R e p o R t

We are pleased to submit this annual report to the members of the Company together with the audited financial statements

of the Group for the financial year ended 31 December 2009.

DIRECToRS

The directors in office at the date of this report are as follows:

Chiu Kwok Hung Justin (Chairman)

Lim Hwee Chiang John (Group CEO)

Ip Tak Chuen Edmond

Lee Yock Suan

Lim How Teck

Cheng Mo Chi Moses

Colin Stevens Russel

DIRECToRS’ INTERESTS

According to the Register of Directors’ Shareholdings kept by the Company, particulars of interests of directors who held

office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants

and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows:

Name of director and corporation inHoldings registered in name of

director or nomineeHoldings in which director is deemed to have an interest

which interests are held At 1.1.2009 At 31.12.2009 At 1.1.2009 At 31.12.2009

ARA Asset Management limited (number of ordinary shares of S$0.002 each)

Lim Hwee Chiang John 1,378,000 1,378,000 212,142,000 212,142,000

Lee Yock Suan 50,000 50,000 - -

Lim How Teck 450,000 450,000 - -

Colin Stevens Russel 15,000 15,000 - -


Mr Lim Hwee Chiang John is deemed to have interests in the other subsidiaries of ARA Asset Management Limited, at the

beginning and at the end of the financial year.

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares,

debentures, warrants or share options of the Company, or of related corporations, either at the beginning or at the end of

the financial year.

There were no changes in any of the above mentioned interests in the Company between the end of the financial year and

21 January 2010.

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects

are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of

shares in or debentures of the Company or any other body corporate.

Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in Note 25 to the financial

statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit

by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a

member, or with a company in which he has a substantial financial interest.

SHARE oPTIoNS

During the financial year, there were:

(i) no options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or

its subsidiaries; and

(ii) no shares issued by virtue of any exercise of option to take up unissued shares of the Company or its subsidiaries.

As at the end of the financial year, there were no unissued shares of the Company or its subsidiaries under option.

AuDIT CoMMITTEE

The members of the Audit Committee during the year and at the date of this report are:

• MrLeeYockSuan(Chairman),IndependentNon-ExecutiveDirector

• MrLimHowTeck,IndependentNon-ExecutiveDirector

• DrChengMoChiMoses,IndependentNon-ExecutiveDirector

• MrColinStevensRussel,IndependentNon-ExecutiveDirector

A N N U A L R E P O R T 2 0 0 9 67

The Audit Committee performs the functions specified in Section 201B of the Companies Act, the Listing Manual and

the Code.

The Audit Committee has held four meetings during the financial year. In performing its functions, the Audit Committee

met with the Company’s external and internal auditors to discuss the scope of their work, the results of their examination

and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:

• assistanceprovidedbytheCompany’sofficerstotheinternalandexternalauditors;

• quarterly financial information and annual financial statements of the Group and the Company prior to their

submission to the directors of the Company for adoption; and

• interestedpersontransactions(asdefinedinChapter9oftheListingManual).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It

has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee

also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended

to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming

AGM of the Company.

The auditors, KPMG LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Chiu Kwok Hung Justin

Director

lim Hwee Chiang John

Director

22 February 2010

d I R e c t o R s ’ R e p o R t


In our opinion:

(a) the financial statements set out on pages 72 to 116 are drawn up so as to give a true and fair view of the state of

affairs of the Group and of the Company as at 31 December 2009 and of the results, changes in equity and cash

flows of the Group for the year ended on that date in accordance with the Singapore Financial Reporting Standards;

and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts

as and when they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Chiu Kwok Hung Justin

Director

lim Hwee Chiang John

Director

22 February 2010

s tA t e m e n t B y d I R e c t o R s

A N N U A L R E P O R T 2 0 0 9 69

I n d e p e n d e n t A U d I t o R s ’ R e p o R t

Members of the Company


We have audited the accompanying financial statements of ARA Asset Management Limited (the “Company”) and its

subsidiaries (the “Group”), which comprise the statements of financial position of the Group and the Company as at 31

December 2009, the income statement and statement of comprehensive income, statement of changes in equity and

cash flow statement of the Group for the year then ended, and a summary of significant accounting policies and other

explanatory notes, as set out on pages 72 to 116.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the

Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that

assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised

and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and

balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit

in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free

from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order

to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.


opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company

are properly drawn up in accordance with the Singapore Financial Reporting Standards to give a true and fair view of the

state of affairs of the Group and of the Company as at 31 December 2009 and the results, changes in equity and cash flows

of the Group for the year ended on that date.

KPMG llP

Public Accountants and

Certified Public Accountants

Singapore

22 February 2010

A N N U A L R E P O R T 2 0 0 9 71

s tA t e m e n t s o f f I n A n c I A L p o s I t I o n

As at 31 December 2009

Group Company

2009 2008 2009 2008

Note $’000 $’000 $’000 $’000

Assets

Goodwill 20 1,450 - - -

Plant and equipment 4 1,095 849 - -

Tenancy deposits 7 625 296 - -

Subsidiaries 26 - - 64,928 49,480

Associates 5 551 468 - -

Financial assets 6 92,432 48,870 - -

Total non-current assets 96,153 50,483 64,928 49,480

Financial assets 6 4,321 - - -

Trade and other receivables 7 22,451 16,069 7,060 8,894

Cash and cash equivalents 8 46,148 41,879 25,600 35,948

Total current assets 72,920 57,948 32,660 44,842

Total assets 169,073 108,431 97,588 94,322

Equity

Share capital 1,164 1,164 1,164 1,164

Reserves 77,553 47,293 75,413 75,413

Accumulated profits 49,310 27,396 17,647 13,844

Equity attributable to equity holders of the Company 128,027 75,853 94,224 90,421

Minority interest (371) (227) - -

Total equity 9 127,656 75,626 94,224 90,421

liabilities

Loan and borrowings 10 18,515 18,832 - -

Deferred tax liabilities 12 54 54 - -

Total non-current liabilities 18,569 18,886 - -

Trade and other payables 13 17,760 11,058 3,362 3,872

Loan and borrowings 10 38 424 - -

Current tax payable 5,050 2,437 2 29

Total current liabilities 22,848 13,919 3,364 3,901

Total liabilities 41,417 32,805 3,364 3,901

Total equity and liabilities 169,073 108,431 97,588 94,322

The accompanying notes form an integral part of these financial statements.


c o n s o L I d A t e d I n c o m e s tA t e m e n t

Year ended 31 December 2009

Group

2009 2008

Note $’000 $’000

Revenue 14 74,596 65,632

Other income 11,683 4,407

86,279 70,039

Administrative expenses (21,856) (19,194)

Operating lease expenses (2,258) (1,764)

Other expenses (7,656) (8,755)

Results from operating activities 54,509 40,326

Finance expenses 16 (715) (813)

53,794 39,513

Share of profit of associates, net of tax 245 155

Profit before income tax 54,039 39,668

Income tax expense 17 (5,844) (3,096)

Profit for the year 15 48,195 36,572

Attributable to:

Equity holders of the Company 48,339 36,729

Minority interest (144) (157)

Profit for the year 48,195 36,572

Earnings per share

Basic earnings per share (cents) 18 8.30 6.31

Diluted earnings per share (cents) 18 8.30 6.31


A N N U A L R E P O R T 2 0 0 9 73

c o n s o L I d A t e d s tA t e m e n t o f c o m p R e h e n s I V e I n c o m e


Group

2009 2008

$’000 $’000


other comprehensive income

Translation differences relating to financial statements of foreign subsidiaries (875) 12

Available-for-sale financial assets, net movement in fair value reserve 30,602 (26,814)

Effective portion of changes in fair value of cash flow hedge 533 (386)

other comprehensive income for the year, net of income tax 30,260 (27,188)

Total comprehensive income for the year 78,455 9,384

Attributable to:

Owners of the Company 78,599 9,546

Minority interests (144) (162)





c o n s o L I d A t e d s tA t e m e n t o f c h A n g e s I n e q U I t y


Attributable to equity holders of the Company

Reserves

Share capital

Share

premium

Foreign currency

translation reserve

Fair value

reserveHedging reserve

Accumulated

profits TotalMinority interest

Total equity

Group Note $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2008 1,164 75,413 85 (1,022) - 25,414 101,054 (65) 100,989

Total comprehensive income for the year - - 17 (26,814) (386) 36,729 9,546 (162) 9,384

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Dividends to equity holders 9 - - - -

- (34,747) (34,747) - (34,747)

Total transactions with owners - - -

-

- (34,747) (34,747) - (34,747)

At 31 December 2008 1,164 75,413 102 (27,836) (386) 27,396 75,853 (227) 75,626

A N N U A L R E P O R T 2 0 0 9 75

c o n s o L I d A t e d s tA t e m e n t o f c h A n g e s I n e q U I t y


Attributable to equity holders of the Company

Reserves

Share capital

Share

premium

Foreign currency

translation reserve

Fair value

reserveHedging reserve

Accumulated

profits TotalMinority interest

Total equity

Group Note $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2009 1,164 75,413 102 (27,836) (386) 27,396 75,853 (227) 75,626

Total comprehensive income for the year - - (875) 30,602 533 48,339 78,599 (144) 78,455

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Dividends to equity holders 9 - - - -

- (26,425) (26,425) - (26,425)

Total transactions with owners - - -

-

- (26,425) (26,425) - (26,425)

At 31 December 2009 1,164 75,413 (773) 2,766 147 49,310 128,027 (371) 127,656




c o n s o L I d A t e d c A s h f Lo w s tA t e m e n t


2009 2008

Note $’000 $’000

Cash flows from operating activities


Adjustments for:

Depreciation 4 395 270

Share of profits of associates (245) (155)

Interest income (215) (345)

Finance expenses 715 813

Distribution income (7,590) (4,062)

(Gain)/Loss on disposal of held-for–trading securities (3,488) 3,055

Loss/(Gain) on disposal of plant and equipment 4 (46)

Management fees received/receivable in units of real estate investments trusts (36,234) (32,328)

Income tax expense 5,844 3,096

7,381 6,870

Changes in trade and other receivables (4,163) 10,504

Changes in trade and other payables 6,383 (5,170)

Cash generated from operating activities 9,601 12,204

Income tax paid (3,252) (5,281)

Interest received 215 345

Proceeds from sale of units in real estate investments trusts 34,749 40,895

Distribution income received 7,590 4,062

Subscription of held-for-trading securities (732) -

Net cash from operating activities 48,171 52,225

Cash flows from investing activities

Dividend received from associate 170 -

Interest bearing loan to a private fund (8,000) -

Acquisition of subsidiary, net of cash acquired 20 (1,115) -

Purchase of plant and equipment (647) (319)

Proceeds from disposal of plant and equipment - 48

Purchase of unquoted available-for-sale securities (2,732) (15,619)

Purchase of quoted available-for-sale securities (4,275) (33,264)

Net cash used in investing activities (16,599) (49,154)

A N N U A L R E P O R T 2 0 0 9 77

2009 2008

Note $’000 $’000

Cash flows from financing activities

Dividends paid (26,425) (34,747)

Interest paid (715) (813)

Payment of finance lease liabilities (38) (123)

Net cash used in financing activities (27,178) (35,683)

Net increase/(decrease) in cash and cash equivalents 4,394 (32,612)

Cash and cash equivalents at 1 January 41,879 74,494

Effect of exchange rate fluctuations on cash held (125) (3)

Cash and cash equivalents at 31 December 8 46,148 41,879

c o n s o L I d A t e d c A s h f Lo w s tA t e m e n t




n o t e s t o t h e f I n A n c I A L s tA t e m e n t s

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 22 February 2010.

1. DoMICIlE AND ACTIvITIES

ARA Asset Management Limited (the “Company”) is incorporated as an exempted company with limited liability

in Bermuda and has its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The

principal place of business is at 6 Temasek Boulevard, #16-02 Suntec Tower 4, Singapore 038986. The Company was

admitted to the official list of the main board of the Singapore Exchange Securities Trading Limited (the “SGx-ST”)

on 2 November 2007.

The principal activity of the Company is that of investment holding.

The principal activities of the subsidiaries are those relating to the provision of asset and property fund management

services, including acting as the asset manager for public-listed trusts and the provision of real estate fund

management services.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the

“Group”) and the Group’s interests in associates.

2. BASIS oF PREPARATIoN

(a) Statement of compliance

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material items in

the statements of financial position:

• derivativefinancialinstrumentsaremeasuredatfairvalue

• financialinstrumentsatfairvaluethroughprofitorlossaremeasuredatfairvalue

• available-for-salefinancialassetsaremeasuredatfairvalue

(c) Functional and presentation currency

These financial statements are presented in Singapore dollars, which is the Company’s functional currency.

All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless

otherwise stated.

A N N U A L R E P O R T 2 0 0 9 79

(d) use of estimates and judgements

The preparation of the financial statements in conformity with FRSs requires management to make judgements,

estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the

amount recognised in the financial statements is included in Notes 6 and 21 – valuation and measurement of

financial assets.

(e) Changes in accounting policies

(i) Overview

Starting as of 1 January 2009 on adoption of new/revised FRSs, the Group has changed its accounting policies in

the following areas:

• Determinationandpresentationofoperatingsegments

• Presentationoffinancialstatements

• Disclosureofcontractualmaturityanalysis

(ii) Determination and presentation of operating segments

As of 1 January 2009, the Group determines and presents operating segments based on the information that

internally is provided to the Group Chief Executive Officer (“Group CEO”), who is the Group’s chief operating

decision maker. This change in accounting policy is due to the adoption of FRS 108 Operating Segments. Previously

operating segments were determined and presented in accordance with FRS 14 Segment Reporting. The new

accounting policy in respect of operating segment disclosures is presented as follows.

Comparative segment information has been re-presented in conformity with the transitional requirements of such

standard. Since the change in accounting policy only impacts presentation and disclosure aspects, there is no

impact on earnings per share.

An operating segment is a component of the Group that engages in business activities from which it may earn

revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s

other components. An operating segment’s operating results is reviewed regularly by the Group CEO to make

decisions about resources to be allocated to the segment and to assess its performance.


2. Basis of Preparation (cont’d)


Segment results that are reported to the Group CEO include items directly attributable to a segment as well as

those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily

the Company’s headquarters), head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire plant and equipment.

(iii) Presentation of financial statements

The Group applies revised FRS 1 Presentation of Financial Statements (2008), which became effective as of

1 January 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner

changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of

comprehensive income.

Comparative information has been re-presented so that it also is in conformity with the revised standard. Since the

change in accounting policy only impacts presentation aspects, there is no impact on earnings per share.

(iv) Disclosure of contractual maturity analysis

The Group applies the amendments to FRS 107 Financial Instruments: Disclosures, which became effective as of 1

January 2009. As a result, the Group discloses the maximum amount of issued financial guarantees in the earliest

time period for which the guarantees could be called upon in the contractual maturity analysis. Previously, the

Group disclosed the maximum amount of issued financial guarantees in the contractual maturity analysis only if the

Group assessed that it is probable that the guarantee would be called upon.

FRS 107 does not require comparative information to be restated and therefore, the contractual maturity analysis for

the comparative period has not been represented. Since the change in accounting policy only impacts presentation

and disclosure aspects, there is no impact on earnings per share.

3. SIGNIFICANT ACCouNTING PolICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial

statements, and have been applied consistently by Group entities, except as explained in Note 2(e), which addresses

changes in accounting policies.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the

consolidated financial statements from the date that control commences until the date that control ceases. The

accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by

the Group.

2. (e) (ii) Determination and presentation of operating segments (cont’d)

A N N U A L R E P O R T 2 0 0 9 81

For acquisition of subsidiaries under common control, the identifiable assets and liabilities were accounted for at

their historical costs, in a manner similar to the pooling-of-interests method of accounting. Any excess or deficiency

between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other

assets and the amount recorded for the share capital acquired is recognised directly in equity.

For acquisition of subsidiaries accounted under the purchase method, the cost of acquisition is measured at the fair

value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus

costs directly attributable to the acquisition.

Any excess or deficiency of the purchase consideration over the net fair value of the identifiable assets,

liabilities and contingent liabilities is accounted as goodwill or negative goodwill. Goodwill is stated at cost less

impairment losses and is tested annually for impairment. Negative goodwill is recognised in profit or loss in the

period of acquisition.

(ii) Investments in associates

Associates are companies in which the Group has significant influence, but not control, over their financial and

operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of

the voting power of another entity. Associates are accounted for using the equity method and are recognised

initially at cost. The consolidated financial statements include the Group’s share of the income, expenses and equity

movements of associates, after adjustments to align the accounting policies with those of the Group, from the date

that significant influence commences until the date that significant influence ceases. When the Group’s share of

losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments

is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has an

obligation or has made payments on behalf of the associates.

(iii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group

transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from

transactions with associates are eliminated against the investment to the extent of the Group’s interest in the

associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there

is no evidence of impairment.

(iv) Accounting for subsidiaries and associates by the Company

Investments in subsidiaries and associates are stated in the Company’s statement of financial position at cost less

accumulated impairment losses.


3. (a) (i) Subsidiaries (cont’d)


(b) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the

exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies

at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. The

foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency

at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised

cost in foreign currency translated at the exchange rate at the end of the reporting period. Non-monetary assets

and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional

currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising

on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-

sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation,

or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items that

are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of

the transaction.

(ii) Foreign operations

The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates prevailing at

the reporting date. The income and expenses of foreign operations are translated to Singapore dollars at exchange

rates prevailing at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income. When a foreign operation is disposed

of, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to profit or loss as

part of the profit or loss on disposal.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor

likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered

to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are

presented within equity in the foreign currency translation reserve.

(c) Plant and equipment

(i) Recognition and measurement

Items of plant and equipment are stated at cost less accumulated depreciation and accumulated impairment

losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed

assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset

to a working condition for its intended use, and the cost of dismantling and removing the items and restoring

the site on which they are located and capitalised borrowing costs. Cost also may include transfers from other

comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency purchases of plant

3. Significant Accounting Policies (cont’d)

A N N U A L R E P O R T 2 0 0 9 83

and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as

part of that equipment.

When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items

(major components) of plant and equipment.

Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds

from disposal with the carrying amount of plant and equipment, and are recognised net within other income in

profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to

retained earnings.

(ii) Subsequent costs

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it

is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be

measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing

of plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted

for cost, less its residual value.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of

an item of plant and equipment, since this most closely reflects the expected pattern of consumption of the future

economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and

their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives for the current and comparative periods are as follows:

Fittings and office equipment - 3 to 5 years

Motor vehicles - 5 years

Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted

if appropriate.

(d) Intangible assets

Goodwill

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the

identifiable assets, liabilities and contingent liabilities of the acquiree.

Goodwill arising on the acquisition of subsidiaries is presented as intangible assets. Goodwill arising on the

acquisition of associates is presented together with investments in associates.


3. (c) (i) Recognition and measurement (cont’d)


Goodwill is measured at cost less accumulated impairment losses, and is tested annually for impairment. Negative

goodwill is recognised immediately in profit or loss.

(e) Financial instruments

(i) Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other

financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade

date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it

transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially

all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets

that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,

and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to

realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: financial assets at fair value through profit or loss, loans

and receivables and available-for-sale financial assets.

Financial assets at fair value through profit or loss

A financial asset is classified at fair value through profit or loss if it is classified as held-for-trading or is designated

as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Group

manages such investments and makes purchase and sale decisions based on their fair value in accordance with the

Group’s documented risk management or investment strategy. Upon initial recognition, attributable transaction

costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at

fair value, and changes therein are recognised in profit or loss.

Held-to-maturity financial assets

If the Group has the positive intent and ability to hold debt securities to maturity, then such financial assets are

classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly

attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured

at amortised cost using the effective interest method, less any impairment losses. Any sale or reclassification of

a more than insignificant amount of held-to-maturity investments not close to their maturity would result in the

reclassification of all held-to-maturity investments as available-for-sale, and prevent the Group from classifying

investment securities as held-to-maturity for the current and the following two financial years.

3. (d) Intangible assets (cont’d)

A N N U A L R E P O R T 2 0 0 9 85

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active

market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent

to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less

any impairment losses.

Loans and receivables comprise trade and other receivables and cash and cash equivalents.

Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on

demand and form an integral part of the Group’s cash management are included as a component of cash and cash

equivalents for the purpose of the cash flow statement.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and

that are not classified in any of the previous categories. The Group’s investments in equity securities are classified

as available-for-sale financial assets.

Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment

losses (see Note 3(f)(i)) and foreign currency differences on available-for-sale monetary items (see Note 3(b)(i)),

are recognised in other comprehensive income and presented within equity in the fair value reserve. When an

investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to profit

or loss.

(ii) Non-derivative financial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated.

All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially

on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,

and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to

realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial liabilities: loans and borrowings and trade and other

payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective

interest method.


3. (e) (i) Non-derivative financial assets (cont’d)


(iii) Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and

share options are recognised as a deduction from equity, net of any tax effects.

(iv) Derivative financial instruments and hedging activities

The Group holds derivative financial instruments to hedge its foreign currency risk exposures. Embedded derivatives

are separated from the host contract and accounted for separately if the economic characteristics and risks of the

host contract and the embedded derivative are not closely related, a separate instrument with the same terms as

the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured

at fair value through profit or loss.

On initial designation of the hedge, the Group formally documents the relationship between the hedging

instruments and hedged items, including the risk management objectives and strategy in undertaking the hedge

transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis,

whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or

cash flows of the respective hedged items during the period for which the hedge is designated.

For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should

present an exposure to variations in cash flows that could ultimately affect reported net income.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when

incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted

for as described below.

Cash flow hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable

to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that

could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in

other comprehensive income and presented in the hedging reserve in equity. The amount recognised in other

comprehensive income is removed and included in profit or loss in the same period as the hedged cash flows affect

profit or loss under the same line item in profit or loss as the hedged item. Any ineffective portion of changes in the

fair value of the derivative is recognised immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised,

or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss

previously recognised in other comprehensive income and presented in the hedging reserve in equity remains

there until the forecast transaction affects profit or loss. When the hedged item is a non-financial asset, the amount

3. (e) Financial instruments (cont’d)

A N N U A L R E P O R T 2 0 0 9 87

recognised in other comprehensive income is transferred to the carrying amount of the asset when the asset is

recognised. If the forecast transaction is no longer expected to occur, then the balance in other comprehensive

income is recognised immediately in profit or loss. In other cases, the amount recognised in other comprehensive

income is transferred to profit or loss in the same period that the hedged item affects profit or loss.

Other non-trading derivatives

When a derivative financial instrument is not held-for-trading, and is not designated in a qualifying hedge

relationship, all changes in its fair value are recognised immediately in profit or loss.

(f) Impairment

(i) Financial assets (including receivables)

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine

whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates

that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect

on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency

by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise,

indications that a debtor or issuer will enter bankruptcy, the disappearance of an active market for a security. In

addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is

objective evidence of impairment.

The Group considers evidence of impairment for receivables and held-to-maturity investment securities at both a

specific asset and collective level. All individually significant receivables and held-to-maturity investment securities

are assessed for specific impairment. All individually significant receivables and held-to-maturity investment securities

found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but

not yet identified. Receivables and held-to-maturity investment securities that are not individually significant are

collectively assessed for impairment by grouping together receivables and held-to-maturity investment securities

with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries

and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit

conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference

between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s

original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against

receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount.

When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is

reversed through profit or loss.


3. (e) (iv) Cash flow hedges (cont’d)


Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that

has been recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or

loss. The cumulative loss that is removed from other comprehensive income and recognised in profit or loss is the

difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value,

less any impairment loss previously recognised in profit or loss. Changes in impairment attributable to time value

are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the

increase can be related objectively to an event occurring after the impairment loss was recognised in profit or

loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However,

any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other

comprehensive income.

(ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each

reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’

recoverable amounts are estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less

costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using

a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to

the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together

into the smallest group of assets that generates cash inflows from continuing use that are largely independent of

the cash inflows of other assets or groups of assets (the cash-generating unit, or “CGU”). Subject to an operating

segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated

are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored

for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that

are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated

recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of

cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and

then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised

in prior periods are assessed at each reporting date for any indications that the loss has decreased or no

longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the

recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not

exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had

been recognised.

3. (f) (i) Financial assets (including receivables) (cont’d)

A N N U A L R E P O R T 2 0 0 9 89

(g) leased assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance

leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and

the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in

accordance with the accounting policy applicable to that asset.

Other leases are operating leases and the leased assets are not recognised in the Group’s statement of

financial position.

(h) lease payments

Where the Group has the use of assets under operating leases, payments made under the leases are recognised

in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in

profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are

accounted for by revising the minimum lease payments over the remaining term of the lease when the lease

adjustment is confirmed.

(i) Employee benefits

(i) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions

into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for

contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss

in the periods during which services are rendered by employees.

(ii) Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related

service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus where the Group has

a present legal or constructive obligation to pay this amount as a result of past service provided by the employee

and the obligation can be estimated reliably.

(j) Revenue recognition

(i) Real estate investment trust (“REIT”) base and performance fees

REIT base and performance fees are derived from the management of REITs and are determined based on the value

of the real estate assets or total gross assets under management and net property income of the REITs managed,

respectively. These fees are recognised on an accrual basis.




(ii) Acquisition and performance fees

Acquisition fees relate to fees earned in relation to the acquisition of properties by REITs and private funds managed

by the Group and also include corporate finance advisory fees earned in relation to the acquisition of properties by

REITs. The acquisition fees are determined based on the value of the properties acquired and are recognised when

the services have been rendered. Corporate finance advisory fees are determined based on contracted terms and

are recognised when the services have been rendered.

Performance fees relate to fees earned in relation to private funds where the returns of the private funds exceed

certain specified hurdles.

(iii) Portfolio management fees

Portfolio management fees are derived from the management of private funds and are determined based on

committed capital, portfolio value or invested capital. These fees are recognised on an accrual basis.

(iv) Real estate management services fees

Real estate management services fees are derived from property management services and convention & exhibition

services rendered. These fees are recognised on an accrual basis.

(v) Distribution income

Distribution income is recognised in profit or loss when the unitholder’s right to receive payment is established.

(k) Finance expenses

Finance expenses comprise interest expense on financial liabilities. All borrowing costs are recognised in profit or

loss using the effective interest method, except to the extent that they are capitalised as being directly attributable

to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be

prepared for its intended use or sale.

(l) Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except

to the extent that it relates to items recognised directly in equity, or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted

or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

3. (j) Revenue recognition (cont’d)

A N N U A L R E P O R T 2 0 0 9 91

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities

for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for

the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities

in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss,

and differences relating to investments in subsidiaries and associates to the extent that it is probable that they will

not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences

arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be

applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively

enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to

offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same

taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or

their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the

extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred

tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the

related tax benefit will be realised.

(m) Key management personnel

Key management personnel of the Group are those persons having the authority and responsibility for planning,

directing and controlling the activities of the entity. The directors of the Company are considered as key management

personnel of the Group.

(n) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn

revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s

other components. All operating segments’ operating results are reviewed regularly by the Group CEO to make

decisions about resources to be allocated to the segment and assess its performance, and for which discrete

financial information is available.

(o) Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated

by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number

of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by

adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary

shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.


3. (I) Income tax expense (cont’d)


(p) New standards and interpretations not yet adopted

New standards, amendments to standards and interpretations that are not yet effective for the year ended 31

December 2009 have not been applied in preparing these financial statements. None of these will have an effect

on the financial statements of the Group, except for Eligible Hedged Items - Amendment to FRS 39 Financial

Instruments: Recognition and Measurement, which clarifies the existing principles that determine whether specific

risks or portions of cash flows are eligible for designation in a hedging relationship. The amendment, which becomes

mandatory for the Group’s 2010 consolidated financial statements, is not expected to have a significant impact on

the consolidated financial statements.

4. PlANT AND EQuIPMENT

Fittings

and officeequipment

Motor vehicles Total

Group $’000 $’000 $’000

Cost

At 1 January 2008 707 455 1,162

Additions 319 296 615

Disposals (38) (280) (318)

Effect of movement in exchange rates 1 1 2

At 31 December 2008 989 472 1,461

Additions 647 - 647

Disposals (8) - (8)

Effect of movement in exchange rates (9) (5) (14)

At 31 December 2009 1,619 467 2,086

Accumulated depreciation

At 1 January 2008 294 269 563

Depreciation for the year 177 93 270

Disposals (37) (187) (224)

Effect of movement in exchange rates 1 2 3

At 31 December 2008 435 177 612

Depreciation for the year 300 95 395

Disposals (4) - (4)

Effect of movement in exchange rates (7) (5) (12)

At 31 December 2009 724 267 991


A N N U A L R E P O R T 2 0 0 9 93

leased plant and equipment

As at 31 December 2009, plant and equipment with a carrying amount of $178,000 (2008: $296,000) were acquired by the Group under finance lease agreements. The amount outstanding under the finance lease agreements is set out in Note 10 to the financial statements.

5. ASSoCIATES

The Group’s share of profit in its associates for the year was $245,000 (2008: $155,000).

In 2009, the Group received dividends of $170,000 (2008: $Nil) from its investments in associates.

Summary financial information relating to associates which is not adjusted for the percentage of ownership held by the Group are as follows:

Fittings and officeequipment

Motor vehicles Total

Group $’000 $’000 $’000

Carrying amount

At 1 January 2008 413 186 599

At 31 December 2008 554 295 849

At 31 December 2009 895 200 1,095

Group

2009 2008

$’000 $’000

Investment in associates 551 468

Details of significant associates are as follows:

2009 2008

$’000 $’000

Asset and liabilities

Total assets 2,072 1,621

Total liabilities 333 249

Results

Revenue 2,086 1,420

Expenses (1,282) (764)

Profit after taxation 804 656

# Audited by Ernst & Young, Malaysia.


Name of associatesCountry of

incorporation

Effective equity held by the Group

2009 2008

% %

# Am ARA REIT Holdings Sdn. Bhd. Malaysia 30 30

# Am ARA REIT Managers Sdn. Bhd. Malaysia 30 30

4. Plant and Equipment (cont’d)


6. FINANCIAl ASSETS

Quoted financial assets relate to units held in listed REITs. Certain quoted available-for-sale securities with an

aggregate amount of $22,819,000 (2008: $17,820,000) relate to units held in a listed REIT which are pledged as

security to obtain credit facilities.

Unquoted available-for-sale financial assets with a carrying value of $10,980,000 (2008: $8,664,000) relate to seed

capital investment stated at cost as there are no reliable estimates available to arrive at the fair value.

Unquoted available-for-sale financial assets of $4,607,000 (2008: $3,553,000) relate to units held in an open-ended

specialist equity fund.

The interest bearing loan to a private fund, classified as loans and receivables, of $8,000,000 is secured by the shares

of the borrower. The secured loan is repayable in full at maturity in September 2012, although the borrower has the

option to extend the loan to September 2014. The net interest rate per annum on the loan at the balance sheet date

is 8.50%.

The Group’s exposure to credit, currency and interest rate risks related to financial assets is disclosed in Note 11.

Sensitivity analysis — equity price risk

All of the Group’s quoted equity financial assets are listed on the SGx-ST, the Stock Exchange of Hong Kong

Limited or the Bursa Malaysia Securities Berhad. For such investments classified as available-for-sale or held-for-

trading, a 10% increase (decrease) in the above stock prices at the reporting date would have increase (decrease)

equity and profit or loss by the following amount:

Group

2009 2008

$’000 $’000

Non-currentQuoted available-for-sale financial assets 68,845 36,653Unquoted available-for-sale financial assets 15,587 12,217Interest bearing loan to a private fund 8,000 -

92,432 48,870

CurrentDerivative assets – forward exchange contracts 147 -Quoted held-for-trading financial assets 4,174 -

4,321 -

This analysis assumes that all other variables remain constant.

Equity Profit or loss

2009 2008 2009 2008

$’000 $’000 $’000 $’000

SGx-ST 4,603 1,883 417 -

Bursa Malaysia Securities Berhad 2,282 1,782 - -

A N N U A L R E P O R T 2 0 0 9 95

7. TRADE AND oTHER RECEIvABlES

There is no impairment allowance arising from the outstanding balances, none of which are past due at the

reporting date.

The non-trade amounts due from subsidiaries are unsecured, interest-free and repayable on demand.

Trade receivables for the Group include amount due from a trustee of REITs of $606,000 (2008: $37,000).

Accrued revenue relates to accrual of REITs performance and base fees and portfolio management fees.

8. CASH AND CASH EQuIvAlENTS

The weighted average effective interest rates per annum relating to fixed deposits with banks as at 31 December

2009 for the Group and the Company are 0.05% (2008: 0.15%) and Nil% (2008: 0.15%) respectively. Interest rates are

repriced on a weekly basis.

The Group and the Company’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities

are disclosed in Note 11.


Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Trade receivables 1,400 307 - -Accrued revenue 15,487 14,688 - -Deposits 726 610 - -Other receivables 2,426 336 102 -Amounts due from subsidiaries, non-trade - - 6,935 8,870 Loans and receivables 20,039 15,941 7,037 8,870 Prepayments 3,037 424 23 24

23,076 16,365 7,060 8,894

Non-current 625 296 - -

Current 22,451 16,069 7,060 8,894

23,076 16,365 7,060 8,894

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Cash at bank and in hand 43,304 14,190 25,600 9,648

Fixed deposits 2,844 27,689 - 26,300

Cash and cash equivalents in the cash flow statement 46,148 41,879 25,600 35,948


9. CAPITAl AND RESERvES

Share capital

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank pari passu with regard to the Company’s residual assets.

All issued shares are fully paid.

Share premium

Share premium is net of cost of issue of new shares.

Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company.

Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognised or impaired.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Dividends

The following dividends were declared and paid by the Group and Company:

For the year ended 31 December

At the Annual General Meeting and Special General Meeting to be held on 26 April 2010, a final exempt dividend of

$0.0250 per ordinary share amounting to $14,552,000 as well as a 1-for-5 bonus issue of up to 116,412,000 shares of

$0.002 will be recommended for shareholders’ approval. These financial statements do not reflect the final dividend

and bonus issue, which will be accounted for in the shareholders’ equity as an appropriation of retained profits and

share premium respectively in the financial year ending 31 December 2010.

2009 2008

Number of shares

Group and Company ’000 ’000

On issue at 1 January and 31 December 582,060 582,060

Group and Company

2009 2008

$’000 $’000

Interim dividend of $0.0230 per ordinary share (2008: $0.0217) 13,387 12,630Final dividend of $0.0224 per ordinary share, paid in respect of the previous

financial year (2008: $0.0380) 13,038 22,11726,425 34,747

A N N U A L R E P O R T 2 0 0 9 97

10. loAN AND BoRRoWINGS

This note provides information about the contractual terms of the Group’s interest-bearing loan and borrowings,

which are measured at amortised cost. For more information about the Group’s exposure to interest rate, foreign

currency and liquidity risk, see Note 11.

Terms and debt repayment schedule

Terms and conditions of outstanding loan and borrowings are as follows:


Group

2009 2008

$’000 $’000

Non-current liabilities

Secured bank loan 18,365 18,644

Finance lease liabilities 150 188

18,515 18,832

Current liabilities

Finance lease liabilities 38 38

Derivative liabilities – forward exchange contracts - 386

38 424

18,553 19,256

Group

2009

CurrencyNominal

interest rateyear of

maturityFair

valueCarryingamount

$’000 $’000

Secured bank loan MYR 0.25% per annum above the bank’s cost of funds to May 2009; 1.0% per annum thereafter

2011 18,365 18,365

Finance lease liabilities SGD 3.5% per annum 2014 188 188

18,553 18,553


The secured bank loan relates to a RM44.9 million secured variable rate revolving credit facility provided to a

subsidiary, Jadeline Capital Sdn. Bhd. (“Jadeline”) to partly finance its acquisition of units in AmFIRST REIT. The

facility is secured by the units in AmFIRST REIT (the “Pledged Units”) and is repayable in full at maturity in May 2011,

although Jadeline has the option to make prepayments.

Finance lease liabilities

At 31 December, the Group has obligations under finance leases that are payable as follows:

2008

CurrencyNominal

interest rateyear of

maturityFair

valueCarryingamount

$’000 $’000

Secured bank loan MYR 0.25% per annum above the bank’s cost of funds to May 2009; 1.0% per annum thereafter

2011 18,644 18,644

Finance lease liabilities SGD 3.5% per annum 2008 - 2014 226 226

18,870 18,870

2009 2008

Principal Interest Payments Principal Interest Payments

Group $’000 $’000 $’000 $’000 $’000 $’000

Within one year 38 9 47 38 9 47

Between one and five years

150 36 186 150 36 186

More than five years

- - - 38 9 47

188 45 233 226 54 280

10. Loan and Borrowings (cont’d)

A N N U A L R E P O R T 2 0 0 9 99

11. FINANCIAl INSTRuMENTS

Credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

liquidity risk

The following are the contractual maturities of financial liabilities which are measured at amortised cost, including estimated interest payments but excluding the impact of netting agreements:


Carrying amount Cash flows

Contractualcash flows

Within1 year

Within 1 to 5 years

More than5 years

Group $’000 $’000 $’000 $’000 $’000

2009Non-derivative financial liabilitiesFloating interest rate loans 18,365 (19,352) (698) (18,654) -Finance lease liabilities 188 (233) (47) (186) -Trade and other payables 17,760 (17,760) (17,760) - -

36,313 (37,345) (18,505) (18,840) -2008Non-derivative financial liabilitiesFloating interest rate loans 18,644 (21,362) (797) (20,565) -Finance lease liabilities 226 (280) (47) (186) (47)Trade and other payables 11,058 (11,058) (11,058) - -

29,928 (32,700) (11,902) (20,751) (47)Company2009Trade and other payables 3,362 (3,362) (3,362) - -2008Trade and other payables 3,872 (3,872) (3,872) - -

Group Company

2009 2008 2009 2008

Group Note $’000 $’000 $’000 $’000

loans and receivables

- Interest bearing loan to a private fund 6 8,000 - - -

- Loan and receivables 7 20,039 15,941 7,037 8,870

- Cash and cash equivalents 8 46,148 41,879 25,600 35,948

Available-for-sale

- Quoted financial assets 6 68,845 36,653 - -

- Unquoted financial assets 6 15,587 12,217 - -

Fair value through profit or loss

- Quoted financial assets held for trading 6 4,174 - - -

- Derivative assets – forward exchange contracts 6 147 - - -

162,940 106,690 32,637 44,818


It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

The following table indicates the periods in which the cash flow associated with derivatives that are cash flow hedges are expected to occur:

Currency risk

Exposure to currency risk

The Group’s and Company’s exposures to foreign currency was as follows based on notional amounts:

Carrying amount Cash flows

Expectedcash flows

Within1 year

Within 1 to 5 years

More than5 years

Group $’000 $’000 $’000 $’000 $’000

2009

Forward exchange contracts - assets 147 147 147 - -2008

Forward exchange contracts - liabilities (386) (386) (386) - -

Group Company

Singapore dollar

uSdollar

Hong Kongdollar

Malaysia ringgit

uSdollar

Hong Kongdollar

$’000 $’000 $’000 $’000 $’000 $’000

2009

Trade and other receivables - 286 2,404 - 15 -

Cash and cash equivalents 412 3,183 16 - 2,957 -Trade and other payables - - (356) (3) - (2)

412 3,469 2,064 (3) 2,972 (2)

2008

Trade and other receivables - 72 1,485 - 16 -

Cash and cash equivalents 373 3,641 811 - 3,583 -Trade and other payables (1,987) - (142) - - (2)

(1,614) 3,713 2,154 - 3,599 (2)

11. Financial Instruments (cont’d)

A N N U A L R E P O R T 2 0 0 9 101

Sensitivity analysis

A 10% strengthening of Singapore dollar against the following currencies at the reporting date would increase

(decrease) profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate

variances that the Group considered to be reasonably possible at the end of the reporting period. This analysis

assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same

basis for 2008, albeit that the reasonably possible foreign exchange rate variances were different, as indicated below:

A 10% weakening of Singapore dollar against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Interest rate risk

Profile

At the reporting date, the interest rate profile of the interest-bearing financial instruments was:

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis point in interest rate at the reporting date would have increase (decrease) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2008.


Profit or loss

Group Company

$’000 $’000

2009US dollar (347) (297)Hong Kong dollar (206) -

(553) (297)2008US dollar (371) (360)Hong Kong dollar (215) -

(586) (360)

Group Carrying amount

2009 2008

$’000 $’000

Fixed rate instrumentsFinancial liabilities 188 226variable rate instruments Financial liabilities 18,365 18,644

Profit or loss

100 bp increase 100 bp decrease

Group $’000 $’000

2009

Variable rate instruments (184) 184

Cash flow sensitivity (net) (184) 184



Fair value

Fair values versus carrying amounts

The carrying amounts of the Group and the Company’s financial instruments carried at cost or amortised cost are

not materially different from their fair values as at 31 December 2009 and 2008.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have

been defined as follows:

• Level1:quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities

• Level2:inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,

either directly (i.e., as prices) or indirectly (i.e., derived from prices)

• Level3:inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs)

Profit or loss

100 bp increase 100 bp decrease

Group $’000 $’000

2008

Variable rate instruments (186) 186

Cash flow sensitivity (net) (186) 186

level 1 level 2 Total

Group $’000 $’000 $’000

2009

Available-for-sale financial assets 68,845 4,607 73,452

Held-for-trading financial assets 4,174 - 4,174

Derivative assets – forward exchange contracts - 147 147

73,019 4,754 77,773

2008

Available-for-sale financial assets 36,653 3,553 40,206

Derivative liabilities – forward exchange contracts - (386) (386)

36,653 3,167 39,820


A N N U A L R E P O R T 2 0 0 9 103


12. DEFERRED TAX

unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective

countries in which certain subsidiaries operate. The deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can recognise the benefits.

Recognised deferred tax liabilities

Deferred tax liabilities of the Group and the Company are attributable to the following:

13. TRADE AND oTHER PAyABlES

The Group and the Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 11.

Outstanding balances with subsidiaries and a minority shareholder are unsecured.

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Deductible temporary differences 41 41 - -

Tax losses 1,394 1,317 - -

1,435 1,358 - -

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Deferred tax liabilities

Plant and equipment 54 54 - -

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Trade payables 1,073 436 17 -

Accrued expenses 13,754 9,450 2,262 2,264

Other payables 2,282 922 922 922

Amounts due to subsidiaries, non-trade - - 161 686

Amounts due to a minority shareholder, non-trade 651 250 - -

17,760 11,058 3,362 3,872


14. REvENuE

15. PRoFIT FoR THE yEAR

The following items have been included in arriving at profit for the year:

16. FINANCE EXPENSES

Group

2009 2008

$’000 $’000

REITs base and performance fees 40,377 40,512 Portfolio management fees 25,528 23,972 Acquisition and performance fees 7,494 1,148 Real estate management services fees 1,197 -

74,596 65,632

Group

2009 2008

$’000 $’000

Interest expense:

- bank loans 692 801

- finance lease liabilities 9 12

- bank overdraft 4 -

Others 10 -

715 813

Group

2009 2008

$’000 $’000

other incomeInterest income on bank deposits 71 345 Interest income on interest bearing loan to a private fund 144 -Gain on disposal of held-for-trading securities 3,488 -Distribution income 7,590 4,062

operating expensesNon-audit fee paid to:- Auditors of the Company 79 47 Loss on disposal of held-for-trading securities - 3,055 Depreciation of plant and equipment 395 270 Gain on disposal of plant and equipment - (46)Exchange (gain)/loss (net) (93) 64 Impairment loss on available-for-sale financial assets 2,768 -Staff costs 15,242 12,563 Contribution to defined contribution plans, included in staff costs 601 520

A N N U A L R E P O R T 2 0 0 9 105

17. INCoME TAX EXPENSE

Reconciliation of effective tax rate

* The profits of ARA Asset Management (Fortune) Limited and ARA Strategic Capital I Pte. Ltd. derived from certain

Financial Sector Incentive activities were subject to income tax at a concessionary tax rate of 10% for a 5-year period

under Section 43Q of the Income Tax Act with effect from 1 July 2004 and 17 November 2006, respectively. The

concessionary tax rate for ARA Asset Management (Fortune) Limited ceased from 1 July 2009.

Group

2009 2008

$’000 $’000


Total income tax expense 5,844 3,096

Profit excluding income tax 54,039 39,668

Income tax using Singapore tax rate at 17% (2008: 18%) 9,187 7,140

Effects of concessionary tax rate* (192) (253)

Effects of different tax rates in foreign jurisdiction (3,680) (3,764)

Expenses not deductible for tax purposes 574 170

Income not subject to tax (123) (283)

Underprovision in prior year 30 -

Deferred tax assets not recognised 13 111

Others 35 (25)

5,844 3,096


Group

2009 2008

$’000 $’000

Current tax expense

Current year 5,814 3,080

Underprovision in prior year 30 -

5,844 3,080

Deferred tax expense

Origination and reversal of temporary differences - 16

Total income tax expense 5,844 3,096


18. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share at 31 December 2009 was based on the profit attributable

to ordinary shareholders of $48,339,000 (2008: $36,729,000) and a weighted average number of ordinary shares

outstanding of 582,060,000 (2008: 582,060,000) calculated as follows:

19. oPERATING SEGMENT

The Group has four reportable segments, as described below, which are the Group’s strategic business units. The

strategic business units offer different products and services, and are managed separately because they require

different technology and marketing strategies. For each of the strategic business units, the Group CEO reviews

internal management reports on at least a quarterly basis. The following summary describes the operations in each

of the Group’s reportable segments:

Others include corporate finance advisory services.

Information regarding the results of each reportable segment is included below. Performance is measured based

on segment profit before income tax, as included in the internal management reports that are reviewed by the

Group CEO. Segment profit is used to measure performance as management believes that such information is

the most relevant in evaluating the results of certain segments relative to other entities that operate within these

industries. Inter-segment pricing is determined on an arm’s length basis.

Group

2009 2008

$’000 $’000

Net profit attributable to ordinary shareholders 48,339 36,729

Number of shares

2009 2008

’000 ’000

Weighted average number of ordinary shares at the end of the year 582,060 582,060

Basic and diluted earnings per share (cents) 8.30 6.31

REITs : Provision of asset and property fund management and acquisition services and to act as the asset manager for public-listed real estate investment trusts

Private funds :Provision of fund management services to private real estate funds and specialist equity funds


: Provision of property management services and convention & exhibition services

Investment holding

:Investing in a portfolio of listed and unlisted equity securities in asset-intensive growth sectors in the Asia-Pacific region

A N N U A L R E P O R T 2 0 0 9 107

REITs Privatefunds

Real estate management

services

Investmentholding

others Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

External revenues 49,147 42,897 27,766 23,996 1,197 - 6,959 3,103 1,210 43 86,279 70,039

Inter-segment revenue - - - - - - - - 5,663 4,606 5,663 4,606

49,147 42,897 27,766 23,996 1,197 - 6,959 3,103 6,873 4,649 91,942 74,645

Interest expense (13) (23) - - - - (702) (790) - - (715) (813)

Depreciation (284) (255) (13) (12) - - - - (98) (3) (395) (270)

Reportable segment profit/(loss) before income tax 31,383 24,684 17,410 14,167 978 - 3,300 2,066 1,447 (740) 54,518 40,177

Share of profit of associates, net of tax 245 155 - - - - - - - - 245 155

Reportable segment assets 23,529 13,423 11,764 7,915 11,654 - 119,944 85,480 1,631 1,145 168,522 107,963

Investment in associates 551 468 - - - - - - - - 551 468

Capital expenditure 146 594 11 21 204 - - - 286 - 647 615

Reportable segment liabilities 2,835 3,032 5,299 4,749 5,386 - 21,663 21,909 942 398 36,125 30,088

Information about reportable segments


19. Operating Segment (cont’d)


Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items

2009 2008

$’000 $’000

Revenue

Total revenue for reporting segments 85,069 69,996

Other revenue 6,873 4,649

91,942 74,645

Elimination of inter-segment revenue (5,663) (4,606)

Consolidated revenue 86,279 70,039

Profit or loss

Total profit for reportable segments 53,071 40,917

Other profit or loss 1,447 (740)

54,518 40,177

Unallocated amounts:

- Other corporate expenses (724) (664)

Share of profit of associates, net of tax 245 155

Consolidated profit before income tax 54,039 39,668

Assets

Total assets for reportable segments 166,891 106,818

Other assets 1,631 1,145

168,522 107,963

Investments in associates 551 468

Consolidated assets 169,073 108,431

liabilities

Total liabilities for reportable segments 35,183 29,690

Other liabilities 942 398

36,125 30,088

Other unallocated liabilities 5,292 2,717

Consolidated liabilities 41,417 32,805


A N N U A L R E P O R T 2 0 0 9 109

Geographical segments

The Group’s business is managed in four principal geographical areas, namely, Singapore, Hong Kong, Malaysia

and Others.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical

location of counterparties. Segment assets are based on the geographical location of the assets.

20. ACQuISITIoN oF SuBSIDIARy

Business combination

On 9 December 2009, the Group acquired all of the shares in APM Property Management Pte. Ltd. (formerly known as Suntec City Management Pte. Ltd.) for $1,606,000 in cash. APM Property Management Pte. Ltd. is the managing agent of the Management Corporation Strata Title Plan No. 2179, responsible for the management and maintenance of the common property of the Suntec City Complex.

The acquisition had the following effect on the Group’s assets and liabilities on acquisition date:


Geographical informationRevenue Segment

assetsCapital

expenditure

31 December 2009 $’000 $’000 $’000

Singapore 53,044 115,829 627 Hong Kong 5,420 1,707 20 Malaysia 2,116 23,740 -Others 25,699 27,246 -

86,279 168,522 647

31 December 2008Singapore 38,126 67,457 459 Hong Kong 5,337 2,865 134 Malaysia 2,953 19,003 -Others 23,623 18,638 22

70,039 107,963 615

2009

$’000

Cash and cash equivalents 183

Prepayment 5

Accruals (11)

Provision for tax (21)

Net identifiable assets and liabilities 156

Goodwill on acquisition 1,450

Consideration paid 1,606

Consideration payable (308)

Cash acquired (183)

Net cash outflow 1,115



Pre-acquisition carrying amounts were determined based on applicable FRS immediately before the acquisition.

The values of assets, liabilities and contingent liabilities recognised on acquisition are their estimated fair values.

The goodwill recognised on the acquisition is attributable mainly to the acquired business and the synergies

expected to be achieved from integrating the company in the Group’s existing business.

21. DETERMINATIoN oF FAIR vAluES

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both

financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or

disclosure purposes based on the following methods. When applicable, further information about the assumptions

made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Investments in equity securities

The fair values of quoted and unquoted investments that are classified as available for sale as well as quoted

investments held for trading are generally their quoted bid prices at the reporting date. The fair values of certain

unquoted securities classified as available for sale have not been determined as the fair value cannot be determined

reliably because of restrictions in the ability to transfer these shares. In addition, the variability in the range of

recoverable fair value estimates derived from valuation techniques is expected to be significant.

(ii) loans and receivables

The fair value of loans and receivables is estimated as the present value of future cash flows, discounted at the

market rate of interest at the reporting date. This fair value is determined for disclosure purposes.

(iii) Derivatives

The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market

price is not available, then fair value is estimated by discounting the difference between the contractual forward

price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on

government bonds).

(iv) Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal

and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the

market rate of interest is determined by reference to similar lease agreements.

20. Acquisition of Subsidiary (cont’d)

A N N U A L R E P O R T 2 0 0 9 111


22. FINANCIAl RISK MANAGEMENT

overview

The Group has exposure to the following risks from its use of financial instruments:

• creditrisk

• liquidityrisk

• marketrisk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies

and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative

disclosures are included throughout these financial statements.

Risk management framework

The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring

and the cost of managing the risks. The management continually monitors the Group’s risk management process

to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems

are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies

and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the

Group. The Audit Committee is assisted in its oversight role by the Group’s Risk Management and Internal Audit

division. The Group Risk Management and Internal Audit Division undertakes both regular and ad hoc reviews of

risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk

Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its

contractual obligations, and arises principally from the Group’s receivables from counterparties.

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty.

However, management also considers the demographics of the Group’s counterparty base, including the default

risk of the industry and country in which counterparties operate, as these factors may have an influence on credit

risk. However, geographically, there is no concentration of credit risk.

The Group’s exposure to credit risk arises mainly through its trade and accrued fees receivables from REITs, real

estate management and private funds and cash and cash equivalents which are placed with regulated financial

institutions. Exposure to credit risk is monitored on an ongoing basis.


Where necessary, the Group establishes an allowance for impairment that represents its estimate of incurred losses

in respect of trade and other receivables and investments. The main components of this allowance are a specific

loss component that relates to individually significant exposures, and a collective loss component established for

groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss

allowance is determined based on historical data of payment statistics for similar financial assets.

liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial

liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity

is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under

both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s

reputation.

Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a

period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme

circumstances that cannot reasonably be predicted, such as natural disasters.

In addition, the Group maintains the following lines of credit:

• S$6.0 million and HK$3.0 million overdraft facility that is unsecured. Interest would be payable at the

Singapore and Hong Kong prime lending rate.

• S$1.1millionrevolvercreditfacilitythatcanbedrawndowntomeetshort-termfinancingneeds.Thefacility

has a 30-day maturity that renews automatically at the option of the Group. Interest would be payable at

Singapore prime lending rate.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity

prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market

risk management is to manage and control market risk exposures within acceptable parameters, while optimising

the return.

The Group manages its market risks using derivaties. All such transactions are carried out within the guidelines set

by Board of Directors. Generally, the Group seeks to apply hedge accounting in order to manage volatility in profit

or loss.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence

and to sustain future development of the business. The Board of Directors monitors the return on capital, which the

Group defines as result from operating activities divided by total shareholders’ equity, excluding minority interests.

The Board of Directors also monitors the level of dividends to ordinary shareholders.

22. Credit Risk (cont’d)

A N N U A L R E P O R T 2 0 0 9 113

23. oPERATING lEASES

At 31 December, the Group and the Company has commitments for future minimum lease payments under non-

cancellable operating leases as follows:

The Group leases a number of offices under operating leases. The leases typically run for an initial period of 2 to 3

years, with an option to renew the lease after that date.

24. CAPITAl CoMMITMENTS

The Group has a commitment to invest an amount of up to 2.0% of ARA Asia Dragon Fund’s aggregate committed

capital as seed capital in the fund. The Group’s undrawn commitment in the fund amounted to US$14.4 million

(equivalent to S$20.2 million) (2008: US$16.2 million (equivalent to S$23.1 million)) at 31 December 2009.

25. RElATED PARTIES

Transactions with key management personnel

Key management personnel compensation

Compensation payable to key management personnel comprised:


Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Within one year 2,130 2,199 - -

Between one and five years 638 2,528 - -

More than five years - 45 - -

2,768 4,772 - -

Group

2009 2008

$’000 $’000

Short-term employee benefits 7,866 6,795

Post-employment benefits 112 122

7,978 6,917


Name of subsidiaryCountry of

incorporation

ownership interest

2009 2008

% %

@ ARA Asset Management (Singapore) Limited (to be renamed ARA Asset Management (Fortune) Limited)

Republic of Singapore 100 100

@ ARA Trust Management (Suntec) Limited Republic of Singapore 100 100

@ ARA Strategic Capital (Holdings) Pte Ltd Republic of Singapore 75 75

^ ARA Asset Management (Prosperity) Limited Hong Kong 100 100

@ ARA Management Pte Ltd Republic of Singapore 100 100

@ ARA Fund Management (Asia Dragon) Limited Bermuda 100 100

other related party transactions

Other than disclosed elsewhere in the financial statements, significant transactions with related parties at terms

agreed between the parties are as follows:

All outstanding balances with these related parties are priced on an arm’s length basis. None of the balances

are secured.

26. SuBSIDIARIES

Details of significant subsidiaries are as follows:

Transaction value

2009 2008

$’000 $’000

Entities subject to common significant influence:

Acquisition and performance fees 3,703 -

Advisory fees 1,151 -

Base and performance fees received/receivable 8,158 7,701

Portfolio management fees received/receivable - 11

Distribution received 176 182

Operating lease expenses paid/payable 1,028 549

Company

2009 2008

$’000 $’000

Equity investments at cost 1,782 1,782

Shareholder loans to subsidiaries 63,146 47,698

64,928 49,480

25. Related Parties (cont’d)

A N N U A L R E P O R T 2 0 0 9 115


KPMG LLP is the auditor of all significant Singapore-incorporated and Bermuda-incorporated subsidiaries. Other

member firms of KPMG International are auditors of significant foreign-incorporated subsidiaries except for ARA

Investors II Limited which is not required to be audited by law of country of incorporation. For this purpose, a

subsidiary is considered significant as defined under the Listing Manual if its net tangible assets represent 20% or

more of the Group’s consolidated net tangible assets, or if its pre-tax profits account for 20% or more of the Group’s

consolidated pre-tax profits.

The shareholder loans to subsidiaries are unsecured and interest-free with no specified repayment date.

The settlement of the amount is neither planned nor likely to occur in the foreseeable future. As the amount is,

in substance, a part of the Company’s net investment in the subsidiaries, it is stated at cost.

Name of subsidiaryCountry of

incorporation

ownership interest

2009 2008

% %

@ ARA Managers (Asia Dragon) Pte Ltd Republic of Singapore 100 100

^ Jadeline Capital Sdn Bhd Malaysia 100 100

ARA Investors II Limited British Virgin Islands 100 100

@ ARA Managers (Harmony) Pte Ltd Republic of Singapore 100 -

@ Suntec Singapore International Convention & Exhibition Services Pte Ltd

Republic of Singapore 100 -

@ Audited by KPMG LLP Singapore.

^ Audited by other member firms of KPMG International.

Not required to be audited by law of country of incorporation.


s U p p L e m e n tA R y I n f o R m A t I o n

(Listing Manual disclosure requirements)

1 INTERESTED PERSoN TRANSACTIoNS

The aggregate value of transactions entered into by the Group with interested persons and their affiliates, as

defined in the Listing Manual, are as follows:

2 uSE oF IPo PRoCEEDS

As at 31 December, the Group had utilised the net IPO proceeds of S$75.5 million as follows:

3 MATERIAl CoNTRACTS

Save for the service agreement entered into with Mr Lim Hwee Chiang John and the interested person

transactions disclosed in this Annual Report, there are no material contracts involving the interests of any

Directors or controlling shareholders still subsisting during the financial year as required to be reported under

Rule 1207(8) of the Listing Manual.

2009 2008

$’000 $’000

Seed capital investment in the ARA Asia Dragon Fund 11,101 8,664

Strategic stake in REIT 27,200 27,200

Investment in interest bearing loan to a private fund 8,000 -

46,301 35,864

Aggregate value of all transactions conducted under

a shareholders’ mandate pursuant to Rule 920 of the

SGX listing Manual

Aggregate value of all other transactions

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Name of interested person

Fortune REIT- Manager’s fees and distribution income 8,334 7,883 - -- Acquisition and performance fee 3,703 - - -- Advisory fee 1,151 - - -

Al Islami Far Eastern Real Estate Fund Limited - Manager’s fees - 11 - -

The Centre (55) Limited- Provision of office space - 2,756 - -

Mr Chiu Kwok Hung Justin- Key person and strategic advisory services to

ARA Asia Dragon Fund - - 436 431

A N N U A L R E P O R T 2 0 0 9 117

s h A R e h o L d e R s ’ I n f o R m A t I o n

As at 12 March 2010

Issued and fully paid-up capital : S$1,164,120

No. of issued shares (excluding treasury shares) : 582,060,000

Class of shares : Ordinary

Voting rights : One vote per share

DISTRIBuTIoN oF SHAREHolDINGS

Treasury Shares

Number of treasury shares held : NIL

Percentage of treasury shares held against total

number of issued shares (excluding treasury shares) : NIL

Size of shareholdings No. of shareholders %No. of shares %

1 - 999 5 0.12 921 0.00

1,000 - 10,000 3,317 81.18 13,828,479 2.38

10,001 - 1,000,000 747 18.28 51,157,012 8.79

1,000,001 - and above 17 0.42 517,073,588 88.83

Total 4,086 100.00 582,060,000 100.00

No. Name No. of Shares %

1 JL Investment Group Limited 212,142,000 36.45

2 Cheung Kong Investment Company Limited 90,918,000 15.62

3 Citibank Nominees Singapore Pte Ltd 48,565,319 8.34

4 DBS Nominees Pte Ltd 44,582,514 7.66

5 HSBC (Singapore) Nominees Pte Ltd 31,181,000 5.36

6 Raffles Nominees (Pte) Ltd 28,265,500 4.86

7 Morgan Stanley Asia (Singapore) Securities Pte Ltd 18,683,000 3.21

8 DBS Vickers Securities (S) Pte Ltd 11,503,000 1.98

9 United Overseas Bank Nominees Pte Ltd 8,829,100 1.52

10 Low Geok Lin Judith 7,000,000 1.20

11 DBSN Services Pte Ltd 3,601,155 0.62

12 Phillip Securities Pte Ltd 3,567,000 0.61

13 Yim Chee Chong 3,100,000 0.53

14 BNP Paribas Securities Services Singapore 1,477,000 0.25

15 Royal Bank of Canada (Asia) Ltd 1,423,000 0.24

16 DB Nominees (S) Pte Ltd 1,136,000 0.20

17 Choy Sai Chak 1,100,000 0.19

18 OCBC Securities Private Ltd 992,000 0.17

19 Peh Thiam Chye 950,000 0.16

20 Kim Eng Securities Pte. Ltd. 927,000 0.16

Total 519,942,588 89.33

list of Twenty largest Shareholders


SuBSTANTIAl SHAREHolDERS AS AT 12 MARCH 2010

(As recorded in the Register of Substantial Shareholders)

Direct Interest % Deemed Interest %

JL Investment Group Limited 212,142,000 36.45 - -

Lim Hwee Chiang John(1) 1,378,000 0.24 212,142,000 36.45

Cheung Kong Investment Company Limited 90,918,000 15.62 - -

Cheung Kong (Holdings) Limited(2) - - 90,918,000 15.62

Prudential Asset Management (Singapore) Limited - - 34,706,000 5.96

Notes:

(1) Mr Lim Hwee Chiang John has an indirect interest in the shares of the Company held by JL Investment Group Limited, which is wholly owned by him.

(2) Cheung Kong (Holdings) Limited has an indirect interest in the shares of the Company held through its wholly-owned subsidiary, Cheung Kong Investment Company Limited.

PuBlIC SHAREHolDERS

As at 12 March 2010, approximately 41.65% of the Company’s issued ordinary shares (excluding Treasury Shares) are held

by the public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited has accordingly been

complied with.

A N N U A L R E P O R T 2 0 0 9 119

n o t I c e o f A n n U A L g e n e R A L m e e t I n g

NOTICE IS HEREBY GIVEN that the Annual General Meeting of ARA ASSET MANAGEMENT LIMITED (the “Company”)

will be held at Room 325, Level 3, Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard,

Suntec City, Singapore 039593 on Monday, 26 April 2010 at 2.30 pm for the following purposes:

AS oRDINARy BuSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the financial year ended

31 December 2009 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a final tax-exempt (one-tier) dividend of S$0.0250 per share for the financial year ended 31 December

2009 (2008: S$0.0224 per share). (Resolution 2)

3. To re-elect the following Directors, retiring pursuant to Bye law 86(1) of the Company’s Bye-laws.

(i) Ip Tak Chuen Edmond (Resolution 3)

(ii) Lee Yock Suan (Resolution 4)

Mr Lee Yock Suan will, upon re-election as Director of the Company, remain as Chairman of the Audit Committee

and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange

Securities Trading Limited (“SGx-ST”).

4. To approve the payment of Directors’ fees of S$240,000 for the financial year ending 31 December 2010, to be paid

quarterly in arrears (2009: S$240,000). (Resolution 5)

5. To re-appoint KPMG LLP as the Company’s Auditors and to authorise the Directors to fix their remuneration.

(Resolution 6)

6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAl BuSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any

modifications:

7. Share Issue Mandate

That pursuant to Rule 806 of the Listing Manual of the SGx-ST, the Directors of the Company be empowered to:


(a) (i) issue shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise;

and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require

Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to)

options, warrants, debentures or other instruments convertible into Shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors

of the Company may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in

pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was

in force,

provided that:

(1) the aggregate number of Shares (including Shares to be issued in pursuance of the Instruments, made or

granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed

fifty per cent. (50%) of the issued share capital (excluding treasury shares) of the Company (as calculated in

accordance with sub-paragraph (2) below), of which the aggregate number of Shares to be issued other

than on a pro rata basis to existing Shareholders of the Company shall not exceed twenty per cent. (20%) of

the issued share capital (excluding treasury shares) of the Company (as calculated in accordance with sub-

paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the SGx-ST) for the purpose of determining the

aggregate number of Shares that may be issued under sub-paragraph (1) above, the percentage of issued

share capital shall be based on the issued share capital (excluding treasury shares) of the Company at the

time of the passing of this Resolution, after adjusting for:

(a) new Shares arising from the conversion or exercise of convertible securities;

(b) new Shares arising from the exercise of any share options or vesting of any share awards which are

outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of Shares;

(3) the fifty per cent. (50%) limit in sub-paragraph (1) above may be increased to one hundred per cent. (100%)

for issue of Shares and/or Instruments by way of a renounceable rights issue where Shareholders of the

Company are entitled to participate in the same on a pro-rata basis.

(4) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the

Listing Manual of the SGx-ST for the time being in force (unless such compliance has been waived by the

SGx-ST) and the Bye-laws of the Company; and

A N N U A L R E P O R T 2 0 0 9 121

(5) unless revoked or varied by the Company in a general meeting, such authority shall continue in force until

the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual

General Meeting of the Company is required to be held, whichever is earlier.

[See Explanatory Note (i)] (Resolution 7)

8. Discount for Non Pro-rata Share Issue

(a) That subject to and conditional upon the passing of Ordinary Resolution 7 above, approval be and is hereby

given to the directors of the Company at any time to issue, other than on a pro-rata basis to shareholders

of the Company, Shares (excluding convertible securities), at an issue price for each Share which shall be

determined by the directors of the Company in their absolute discretion provided that such price shall not

represent a discount of more than twenty per cent. (20%) to the weighted average price of a Share for trades

done on the SGx-ST (as determined in accordance with the requirements of SGx-ST); and

(b) That (unless revoked or varied by the Company in general meeting) the authority conferred by this

Resolution shall continue in force until the conclusion of the next annual general meeting of the Company

or the date by which the next annual general meeting of the Company is required by law to be held,

whichever is the earlier.

[See Explanatory Note (ii)] (Resolution 8)

9. Renewal of Shareholders’ Mandate for Interested Person Transactions

That for the purposes of Chapter 9 of the Listing Manual of the SGx-ST:

(a) approval be given for the renewal of the mandate for the Company, its subsidiaries and associated

companies that are entities at risk (as that term is used in Chapter 9) or any of them to enter into any of the

transactions falling within the types of Mandated Transactions as described in Appendix A to the Company’s

Letter to Shareholders and Depositors dated 1 April 2010 (the “Letter”), with any party who is of the class

of Mandated Interested Persons described in Appendix A to the Letter, provided that such transactions

are made on normal commercial terms and will not be prejudicial to the interests of the Company and its

minority shareholders and in accordance with the guidelines and review procedures set out in Appendix A

to the Letter;

(b) authority be given to the Directors of the Company and/or any of them to complete and do all such acts

and things (including executing all such documents as may be required) as they and/or he may consider

necessary, desirable or expedient to give effect to this Resolution as they and/or he may think fit; and

(c) such approval shall, unless revoked or varied by the Company in a general meeting, continue in force until

the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual

General Meeting of the Company is required to be held, whichever is earlier.

[See Explanatory Note (iii)] (Resolution 9)



10. Renewal of Share Purchase Mandate

That for the purposes of the Companies Act of Bermuda and otherwise in accordance with the rules and regulations

of the SGx-ST, the Directors of the Company be and are hereby authorised:

(a) to make purchases or otherwise acquire issued shares in the capital of the Company from time to time

(whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per

cent. (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company

(as ascertained as at the date of this Annual General Meeting of the Company) at the price of up to but not

exceeding the Maximum Price as defined in the Letter to Shareholders and Depositors dated 1 April 2010

and that this mandate shall, unless revoked or varied by the Company in general meeting, continue in force

until the conclusion of the next Annual General Meeting of the Company or the date by which the next

Annual General Meeting of the Company is required by law to be held, whichever is earlier; and

(b) to complete and do all such acts and things (including executing such documents as may be required) as they

may consider expedient or necessary to give effect to the transactions contemplated by this Resolution.

[See Explanatory Note (iv)] (Resolution 10)

By Order of the Board

Yvonne Choo/Sharon Lim

Company Secretaries

Singapore, 1 April 2010

Explanatory Notes to Resolutions to be passed –

(i) Ordinary Resolution 7 in item 7 above, if passed, will empower the Directors of the Company from the date of this

Annual General Meeting until the date of the next Annual General Meeting of the Company, or the date by which

the next Annual General Meeting of the Company is required to be held or such authority is varied or revoked by

the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible

into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the

total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be

issued other than on a pro-rata basis to existing shareholders of the Company.

For the purposes of determining the aggregate number of shares that may be issued, the percentage of issued

share capital will be calculated based on the issued share capital (excluding treasury shares) of the Company at the

time this Ordinary Resolution is passed, after adjusting for new shares arising from the conversion or exercise of any

convertible securities, the exercise of any share options or the vesting of any share awards which are outstanding or

subsisting at the time when this Ordinary Resolution is passed, and any subsequent bonus issue or consolidation or

subdivision of shares.

A N N U A L R E P O R T 2 0 0 9 123

The increased limit of up to 100% [referred to in sub-paragraph (3)] for renounceable pro-rata rights issue will be

effective up to 31 December 2010 pursuant to SGx-ST’s news release of 19 February 2009. The increased limit is

subject to the condition that the issuer makes periodic announcements on the use of the proceeds as and when the

funds are materially disbursed and, provides a status report on the use of proceeds in the annual report.

(ii) Ordinary Resolution 8 proposed in item 8 above, if passed, will enable Directors of the Company to issue new

Shares on a non pro-rata basis, at a discount of not more than 20% to the weighted average market price of the

Company’s shares, determined in accordance with the requirements of SGx-ST. The discount in issue price of non

pro-rata new Share issue is one of the interim measures announced by the SGx-ST to accelerate and facilitate listed

issuer’s fund-raising efforts in a volatile and difficult market condition. This interim measure will also be effective up

to 31 December 2010 pursuant to SGx-ST’s news release of 19 February 2009.

(iii) Ordinary Resolution 9 proposed in item 9 above, if passed, will renew the mandate to allow the Company, its

subsidiaries and associated companies that are entities at risk or any of them to enter into the Mandated Transactions

described in Appendix A to the Letter to Shareholders and Depositors dated 1 April 2010 (the “Letter”) with any

party who is of the class of Mandated Interested Persons described in Appendix A to the Letter, and will empower

the Directors of the Company to do all acts necessary to give effect to the mandate. This authority will, unless

revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual

General Meeting of the Company or the date by which the next Annual General Meeting of the Company is

required to be held, whichever is the earlier. Please refer to the Letter for more details.

(iv) The Ordinary Resolution 10 proposed in item 10 above, if passed, will empower the Directors from the date of this

Annual General Meeting until the next Annual General Meeting to repurchase ordinary shares of the Company

by way of market purchases or off-market purchases of up to 10% of the total number of issued shares (excluding

treasury shares) in the capital of the Company at the Maximum Price. Information relating to this proposed Resolution

are set out in Letter.

Notes:

1. A Shareholder being a Depositor whose name appears in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. If a Depositor wishes to appoint a proxy/proxies to attend the Meeting, then he/she must complete and deposit the Depositor Proxy Form at the office of the Singapore Share Transfer Agent, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623, at least forty-eight (48) hours before the time of the Meeting.

3. If the Depositor is a corporation, the instrument appointing a proxy must be executed under seal or the hand of its duly authorised officer or attorney.



n o t I c e o f B o o K s c Lo s U R e

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of ARA Asset Management Limited

(the “Company”) will be closed at 5.00 p.m. on 3 May 2010 for the preparation of dividend warrants.

Duly completed registrable transfers received by the Company’s Share Transfer Agent, Boardroom Corporate & Advisory

Services Pte. Ltd. at 50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 3 May 2010

will be registered to determine shareholders’ entitlements to the said dividend. Members whose Securities Accounts

with The Central Depository (Pte) Limited are credited with shares at 5.00 p.m. on 3 May 2010 will be entitled to the

proposed dividend.

Payment of the dividend, if approved by the members at the Annual General Meeting to be held on 26 April 2010 will be

made on 18 May 2010.

A N N U A L R E P O R T 2 0 0 9 125

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Singapore6 Temasek Boulevard#16-02, Suntec Tower Four Singapore 038986Tel: 65 6835 9232Fax: 65 6835 9672

Malaysia 16th Floor, Bangunan AmBank GroupNo 55, Jalan Raja Chulan50200 Kuala LumpurMalaysiaTel: 603 2026 9102/3Fax: 603 2732 0644

Hong Kong Unit 5508 - 10, 55th Floor, The Center99 Queen’s Road CentralHong KongTel: 852 2169 0928Fax: 852 2169 0968

www.ara-asia.com

ARA ASSET MANAGEMENT LIMITED

BeijingUnit 1901, L19, Tower E2The Towers, Oriental PlazaNo 1, East Chang An AvenueDong Cheng DistrictBeijing 100738ChinaTel: 8610 8520 0187Fax: 8610 8520 0177

Guangzhou161 Linhexi Road Block B46/F Tianhe DistrictGuangzhou 510620China Tel: 8620 3831 0876Fax: 8620 3825 1658

DalianNo. 139-1Xi’an RoadShahekou DistrictDalian 116021ChinaTel: 86411 8389 8255

Nanjing50-A, Nanjing International Finance Center1 Hanzhong RoadBaixia DistrictNanjing 210029ChinaTel: 8625 8477 5566Fax: 8625 8477 5567

TianjinUnit 201, Block 8ChaoYang LiHou Pu ChunDa Huang Pu XiangTianjinChina

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