ARA ASSET MANAGEMENT LIMITEDara.listedcompany.com/misc/ar/ar2010.pdf · the Bay Marina Square...

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 1 0

CONTENTS

03 Corporate Profi le

03 Our Core Values

06 Business Segments

07 Funds & Services

08 Real Estate Investment Trusts

18 Private Real Estate Funds

20 Real Estate Management Services

21 Corporate Finance Advisory Services

24 Letter to Shareholders

30 Highlights of the Year

32 Financial Highlights

34 Performance Review

40 Board of Directors

44 Management Team

50 Investor Relations and Awards

52 Corporate Information

54 Report on Corporate Governance

68 Financial Statements

123 Supplementary Information

124 Shareholders’ Information

126 Notice of Annual General Meeting

131 Notice of Books Closure

ANNUAL REPORT 2010 1

Kuala Lumpur

Hong Kong

Shanghai

Guangzhou

Nanjing

Beijing

DalianTianjin

Singapore

Malacca

ARA ASSET MANAGEMENT L IMITED2

Melbourne

CORPORATE PROFILE

OUR CORE VALUES

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 on 1 July

2002 and was admitted to the offi cial 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 diversifi ed portfolio spanning the offi ce, retail, industrial/offi ce and

logistics sectors; private real estate funds investing in Asia; and provides real

estate management services, including property management services and

convention & exhibition services; and corporate fi nance advisory services.

One of the largest real estate fund managers in the region, ARA’s assets

under management totaled S$16.9 billion (approximately US$13.1 billion) as

at 31 December 2010.

I N T E G R I T Y

E X C E L L E N C E

R E S P E C T

T E A M W O R K


OUR

B U S I N E S S

BUSINESS SEGMENTS

BusinessSegments

Revenue(PrimaryBasis)

Corporate Finance Advisory Services

Real Estate Management

Services

Private Real Estate FundsREITs

Base Fees(Gross Property Value)

Performance/ Variable Fees(Net Property Income)

Acquisition/Divestment Fees(Gross Property Value)

Portfolio Management Fees(Committed Capital / Gross Property Value)

Performance Fees(IRR above hurdle)

Return on Seed Capital

Property Management Fees(Property Gross Revenue)

Convention & Exhibition Service Fees(Gross Revenue)

Consultancy Fees(Project Value)

Advisory Fees(Purchase Value)

As a real estate fund manager, ARA is focused on the management of public-listed REITs and private real estate funds. These

investment vehicles allow ARA to invest across a broad spectrum of real estate investment classes. Supporting them are ARA’s

real estate management services and corporate fi nance advisory services divisions which provide in-house expertise in property

management, convention & exhibition services and capital markets. Together, ARA’s various business segments constitute an

Asia-focused real estate fund manager with extensive expertise and experience across a wide range of real estate asset classes

complemented by asset-specifi c skill sets. The revenues contributed by these business segments are summarized as follows:


FUNDS & SERVICES

Diversifi ed & complementary fund platforms and services

Notes:(1) ARA held a 14.1% interest in APN Property Group as at 31 December 2010

Listing Venue SGX-ST & SEHK SGX-ST SEHK Bursa SGX-ST

Focus Private housing estate retail properties in

Hong Kong

Prime offi ce & retail properties in

Singapore

Offi ce & industrial/ offi ce properties in

Hong Kong

Commercial properties in

Malaysia

Logistics properties in the Asia

Pacifi c region

Property Value as at 31 December 2010

HK$13,300m S$7,044m HK$5,934m RM1,013m S$744m

Description Property management services provider

Operations, sales and marketing services provider & consultant for convention, exhibition, meeting and event facilities

REITs

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 which owns the Suntec

Singapore International Convention & Exhibition Centre

Strategic alliance with Australian specialist real estate investment manager, APN Property Group(1)

for private funds investing primarily in Australian real estate

Fund Size US$1,133m (Committed Capital) S$288m (Gross Property Value) -

Private Real Estate Funds

Real Estate Management Services


Suntec REITFirst composite REIT in Singapore

REAL ESTATE INVESTMENT TRUSTS

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

Suntec REIT was the fi rst composite REIT in Singapore owning both offi ce and retail properties. Suntec REIT is

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

owns a portfolio of offi ce and retail properties with a total net lettable area of approximately 3.5 million square feet.

21

543

The REITs managed by ARA are regulated investment vehicles that are freely traded on stock exchanges in the region.

They typically have core strategies – focusing on properties within their respective sector or geographical focus that offer

stable rental income. Distinguishing features of these REITs include a requirement to pay out nearly all income to investors

through regular distributions and limits on debt and development or operating activities.

ARA currently manages fi ve REITs listed in Singapore, Hong Kong and Malaysia with a combined fl oor area of 12.9 million

square feet and an aggregate gross property value of S$11.4 billion (US$8.9 billion) as at 31 December 2010.



Orchard RoadShopping BeltDhobyGhaut

BrasBasah

Raffl es Hotel

Raffl es City

CityHall

Supreme Court

ClarkeQuay

Esplanade

ParliamentHouse

ConradCentennial

Millennia Walk

Esplanade -Theatres by the Bay

Marina Square

Mandarin Oriental

Ritz CarltonMillenia

Pan Pacifi cHotel

Marina Mandarin

Promenade

NicollHighway

Marina BayGolf Course

To Changi International Airport

MARINA BAYFullertonHotel

Marina BayFinancial Centre

Marina Bay SandsIntegrated Resort

Raffl esPlace

Bayfront*

Downtown*

Gardens by the Bay*

MarinaBarrage

Notes:* Under Construction

Brid

ge

Ea

st

Co

as

t P

ar k

wa

y E

xp

r es

sw

ay

2

3

1

4

5

Property Location Net Lettable Area (Square Feet)

Suntec City Marina Centre 2,123,083*

Park Mall Orchard 269,959**

CHIJMES City Hall 79,794

One Raffl es Quay Marina Bay 445,120 (one-third interest)

MBFC Properties*** Marina Bay 582,466 (one-third interest)

TOTAL 3,500,422

1

2

3

4

5

* Include Suntec REIT’s 20% interest in the retail net lettable area in the Suntec Singapore International Convention & Exhibition Centre.** Excludes the permissible gross lettable area of 65,454 square feet from the acquired land along Penang Road.*** Refers to the Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall.



Fortune REITAsia’s fi rst cross border REIT and only dual-listed REIT

Listed on 12 August 2003 on the SGX-ST and with a dual primary listing on The Stock Exchange of Hong Kong

Limited on 20 April 2010, Fortune REIT was Asia’s fi rst cross-border REIT and also the fi rst REIT to hold assets in

Hong Kong. Fortune REIT is managed by ARA Asset Management (Fortune) Limited, a wholly-owned subsidiary of

the Company, and currently owns a portfolio of 14 private housing estate retail properties in Hong Kong with a total

gross rentable area of approximately 2.0 million square feet.

1 2

3 4



NEW TERRITORIES

KOWLOON

HONG KONG ISLANDLANTAU ISLAND

1

9

10

8

7

14135

3

412

6

11

2

Property Location Gross Rentable Area (Square Feet)

City One Shatin Property Shatin 414,469

Ma On Shan Plaza Shatin 310,084

Metro Town Tseung Kwan O 180,822

The Metropolis Mall Hung Hom 332,168

Waldorf Garden Property Tuen Mun 80,842

Caribbean Bazaar Tung Chung 63,018

Smartland Tsuen Wan 123,544

Tsing Yi Square Property Tsing Yi 78,836

Jubilee Court Shopping Centre Shatin 170,616

The Household Center Kwai Chung 91,779

Centre de Laguna Property Kwun Tong 43,000

Hampton Loft West Kowloon 74,734

Lido Garden Property Tsuen Wan 9,836

Rhine Garden Property Tsuen Wan 14,604

TOTAL 1,988,352

1

2

3

4

5

6

7

8

9

10

11

12

13

14



Listed on 16 December 2005 on The Stock Exchange of Hong Kong Limited, Prosperity REIT was the fi rst 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 offi ce, industrial/offi ce, and

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

321

754

Prosperity REITFirst private sector REIT in Hong Kong



Property Location Gross Rentable Area (Square Feet)

The Metropolis Tower Hung Hom 271,418

Harbourfront Landmark (portion) Hung Hom 77,021

Prosperity Millennia Plaza North Point 217,955

Trendy Centre Cheung Sha Wan 173,764

Prosperity Place Kwun Tong 240,000

Prosperity Center (portion) Kwun Tong 149,253

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

TOTAL 1,215,579

1

2

3

4

5

6

7

KOWLOON

Mei Foo

BUSINESSDISTRICT

BUSINESSDISTRICT

CheungSha Wan

Austin

LaiChi Kok

MongKok

Tsim Sha Tsui

Wong Tai Sin

Diamond Hill

COREBUSINESSDISTRICT

Ngau Tau Kok

Kowloon Bay

HungHom

YauTong

Kwun Tong

VICTORIAHARBOUR

EasternHarbourTunnel

WesternHarbourTunnel Cross

HarbourTunnel

QuarryBay

Causeway BayWan Chai

Admiralty

Central

Sheung WanNorthPoint

Tai Koo

HONG KONG ISLAND

5

3

6

7

4

2

1



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.

321

654



4 1

3

6

25

SELANGORSTATE

SELANGORSTATE

NEGERISEMBILAN

STATE

STRAITS OF MALACCA

PAHANGSTATE

GOLDENTRIANGLE

Selayang

Gombak

Ampang

Kajang

Kuala Lumpur

Petaling Jaya

Klang

Property Location Net Lettable Area* (Square Feet)

Bangunan AmBank Group Kuala Lumpur Golden Triangle 360,166

Menara AmBank Kuala Lumpur Golden Triangle 458,522

AmBank Group Leadership Centre Kuala Lumpur Golden Triangle 57,801

Kelana Brem Towers Kelana Jaya 287,223

Menara Merais Petaling Jaya 159,001

The Summit Subang USJ Subang Jaya 944,471

TOTAL 2,267,184

1

2

3

4

5

6

* As at 31 December 2010.



Listed on 12 April 2010 on the SGX-ST, Cache Logistics Trust (“Cache”) has a mandate to invest in logistics properties

across the Asia Pacifi c region. Cache is managed by ARA-CWT Trust Management (Cache) Limited, a joint-venture

between ARA (60% interest) and CWT Limited, the largest listed logistics company in Southeast Asia (40% interest).

Cache currently owns six high quality logistics warehouse properties strategically located in Singapore’s established

logistics clusters near Changi Airport, PSA Terminals and Jurong Port with a total gross fl oor area of approximately

3.9 million square feet.

321

654

Cache Logistics TrustAsia-Pacifi c focused logistics REIT in Singapore



Penjuru/Pandan

Changi International LogisPark (South)

Airport LogisticsPark of Singapore

6

5

3

4

2

1

Property Location Gross Floor Area (Square Feet)

CWT Commodity Hub Penjuru/Pandan 2,295,994

CWT Cold Hub Penjuru/Pandan 341,944

Schenker Megahub Airport Logistics Park of Singapore 439,956

Hi-Speed Logistics Centre Airport Logistics Park of Singapore 308,626

C&P Changi Districentre Changi International LogisPark (South) 364,278

C&P Changi Districentre 2 Changi International LogisPark (South) 105,945

TOTAL 3,856,743

1

2

3

4

5

6


Established in September 2007, the

ARA Asia Dragon Fund (“ADF”) is the

Group’s fl agship 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 diversifi ed 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 offi ce sectors in

Singapore, Malaysia, Hong Kong and various

major cities of China – Shanghai, Nanjing,

Dalian and Tianjin.

PRIVATE REAL ESTATE FUNDS

The private real estate funds managed by ARA are generally unlisted closed-end investment vehicles with a specifi ed

lifespan. These funds seek to acquire strategic and opportunistic real estate within their investment mandate which offer

the potential for higher risk-adjusted total returns through development, major refurbishment or asset repositioning.

ARA currently manages private real estate funds investing in Asia with total assets under management of approximately

S$5.1 billion (US$4.0 billion) as at 31 December 2010.

ARA Asia Dragon FundFlagship private real estate fund investing in Asia

One Mont Kiara, Kuala Lumpur

International Capital Plaza, Shanghai 169 Electric Road, Hong Kong


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 fl oor 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. Major international events hosted by Suntec Singapore

included 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, the APEC Economic Leaders’ Meetings in 2009 and the

inaugural Singapore 2010 Youth Olympic Games.

Suntec Singapore is part of Suntec City, an iconic integrated commercial development comprising Suntec Singapore, fi ve Grade

A offi ce 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– the Esplanade and Promenade stations.

Founded in 1996, APN Property Group Limited (“APN”) is one of

Australia’s leading boutique real estate investment managers with

assets under management of A$2.3 billion as at 31 December 2010.

APN currently manages real estate securities funds, private equity

real estate funds, a listed REIT and unlisted property funds investing

primarily in Australian real estate. As a strategic shareholder, ARA

will seek to collaborate with APN on real estate fund opportunities

in Australia, which may include the provision of seed capital, capital

raising and/or joint management of such funds.

PRIVATE REAL ESTATE FUNDS

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

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

APN Property GroupStrategic alliance with leading boutique Australian real estate fund manager

Melbourne city skyline


REAL ESTATE MANAGEMENT SERVICES

ARA’s real estate management services business division complements and supports the growth of the Group’s core REITs

and private real estate funds business divisions through the provision of property management and other supporting

management services.

APM Property Management Pte. Ltd. (“APM”) is a wholly-owned subsidiary of ARA and the Group’s 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 The Management Corporation Strata Title Plan No. 2197, responsible for the management

and maintenance of the common property of Suntec City. APM has expanded its footprint into Malaysia with the

establishment of APM Malaysia in 2010.

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 has diverse 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.

APM Property ManagementARA’s property management arm

Suntec Singapore International Convention & Exhibition ServicesConvention & exhibition Services Provider


REAL ESTATE MANAGEMENT SERVICES

The SSICES team has been managing Suntec

Singapore since its inception in 1995 and over the

years, has accumulated extensive 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,

the APEC Economic Leaders’ Meetings 2009 and the

Singapore 2010 Youth Olympic Games.

As a venue, Suntec Singapore is the proud recipient of numerous awards including “Asia’s Leading Conference Centre” Award

at the World Travel Awards for fi ve years running from 2006 to 2010, “Best Convention & Exhibition Centre” Award at the

TTG Travel Awards for four consecutive years from 2007 to 2010 as well as “Best Business Venue Experience” at the Singapore

Experience Awards in 2009 and 2010. Suntec Singapore has also been conferred the prestigious Distinguished Patron of the

Arts Award from 2008 to 2010.

Suntec International

Suntec International Convention & Exhibition Services Pte. Ltd. (“Suntec International”), a wholly owned subsidiary of ARA,

is headquartered in Singapore. Launched in May 2010, Suntec International is positioned to offer a wide ranging portfolio of

services that include sales and marketing representation, venue management, franchising and brand transfer opportunities and

consultancy services specially designed for the Meetings, Incentives, Conventions and Exhibitions (“MICE”) and venue industry.

Suntec International offers custom-designed solutions for clients and draws on the experience, knowledge and skill of resident

experts at Suntec Singapore. Since its inception, Suntec International has secured two sales and marketing contracts representing

Vancouver Convention Centre and Adelaide Convention Centre, and is pursuing venue management opportunities in the

region. Suntec International has signed a venue management as well as a consulting contract with one of Malaysia’s top

developers, NAZA TTDI Sdn Bhd. Just recently, Suntec International has also reached an agreement with the Singapore Tourism

Board and Singapore’s MICE industry-trade association, the Singapore Association for Convention and Exhibition Organisers

and Suppliers to create a comprehensive database covering the MICE and events segments.

Suntec Singapore, Asia’s leading MICE venue

CORPORATE FINANCE ADVISORY SERVICES

ARA Financial Pte. Ltd. (“ARA Financial”) is the Group’s in-house corporate fi nance 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.


LETTER TO

S H A R E H O L D E R S

LETTER TO SHAREHOLDERS


Dividend

The Directors have proposed a fi nal dividend of 2.50 cents per share for FY2010. Together with the

interim dividend of 2.30 cents per share paid out on 9 September 2010, the total dividend for FY2010

amounts to 4.80 cents per share, unchanged from FY2009. With the one-for-fi ve bonus issue in May this

year, the proposed dividend payout in FY2010 represents an effective 20% increase from FY2009. The

proposed fi nal dividend is subject to shareholders’ approval at the Company’s Annual General Meeting

to be held on 28 April 2011.

A Watershed Year

2010 was a watershed year for ARA. Riding on the overall market recovery, ARA joined hands with the

leading listed logistics group, CWT Limited (“CWT”), to list Cache Logistics Trust (“Cache”) on the SGX-

ST. Existing business units continued to perform strongly with Suntec REIT and the ARA Asia Dragon Fund

(“ADF”) being particularly active on the acquisition front. The year also saw the successful integration of

the real estate management services business unit into the Group. For its stellar track record and excellent

growth prospects, ARA was recognized by Forbes Asia magazine in September 2010 as one of Asia’s

“200 Best under a Billion”. ARA was one of the only eight companies from Singapore included in this

distinguished list out of nearly 13,000 public-listed companies1 in the Asia Pacifi c region. In November

2010, ARA achieved yet another signifi cant milestone with its market capitalisation exceeding S$1 billion

for the fi rst time. We are extremely heartened by the recognition accorded to ARA as well as the strong

vote of confi dence from the market.

To this end, we are pleased to report another strong set of results for the Group for FY2010 with net

profi t jumping 32% to a record S$63.8 million. Total revenue breached the S$100 million mark for the

fi rst time in the Group’s history, soaring 30% to S$112.5 million primarily on the back of increased

recurrent management fees and REIT acquisition fees. Expenses remained under control with the Group

achieving a net margin of 57% for the year while total assets under management (“AUM”) reached

S$16.9 billion (approximately US$13.1 billion) as at year end.

REIT Management

ARA burnished its reputation as one of the leading REIT managers in Asia in FY2010 with several signifi cant

transactions – the listing of Cache, the dual primary listing of Fortune REIT on The Stock Exchange of

Hong Kong and the Marina Bay Financial Centre2 acquisition by Suntec REIT.

Listed on the SGX-ST on 12 April 2010, Cache was the fi rst REIT to be listed in Singapore since the global

fi nancial crisis. The initial portfolio of Cache comprises six high-quality logistics properties in Singapore


1 Companies with revenue of between US$5 million and US$1 billion.2 Marina Bay Financial Centre Towers 1 and 2, the Marina Bay Link Mall and 695 carpark lots.

For the fi nancial year ended 31 December 2010 (“FY2010”), the Group posted a record net profi t of S$63.8 million, a 32% jump from the S$48.3 million achieved in the previous year. Earnings per share were 9.1 cents (FY2009 – 8.3 cents).

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valued at approximately S$744 million as at 31 December 2010 and with a total gross fl oor area of 3.9

million square feet. With a mandate to invest across the Asia Pacifi c, Cache has a ready acquisition pipeline

through a right of fi rst refusal over logistics properties owned by CWT and its substantial shareholder, C&P

Holdings Pte. Ltd. in the region. Leveraging on ARA and CWT’s complementary networks and expertise,

we aim to grow Cache into a leading logistics REIT in the region.

The dual primary listing of Fortune REIT on The Stock Exchange of Hong Kong on 20 April 2010 was yet

another pioneering REIT transaction undertaken by ARA. Following closely on the heels of the exercise

by the REIT in October 2009 to acquire 3 retail properties in Hong Kong and concurrently refi nance its

loans due in June 2010 as well as increase its investor base via a rights issue, the dual listing marked the

culmination of a carefully planned and successfully executed strategy to boost the liquidity of Fortune

REIT and position it for future growth. Crucially, unitholders of Fortune REIT have been rewarded with a

gain, including distributions, of over 30%3 as at 31 December 2010.

To cap off an eventful year for the Group’s REIT management division, the acquisition by Suntec REIT

of a one-third interest in the Marina Bay Financial Centre for S$1.5 billion in December 2010 fi rmly

established Suntec REIT as one of the largest REITs in the S-REIT market with gross assets in excess of

S$7 billion as at 31 December 2010 and provided a material boost to ARA’s AUM and earnings.

Underpinned by the positive outlook for the offi ce and retail markets in our core REIT markets of Singapore

and Hong Kong, ARA will seek to continue to grow our REIT AUM via active asset management, value-

adding acquisitions and adding to our stable of listed REITs.

Private Real Estate Funds

The ADF, the Group’s fl agship private real estate fund, was extremely active on the investment front in

FY2010 with several acquisitions in key cities across Asia. These included a major retail mall in Dalian,

China, Grade A offi ce buildings in Hong Kong and Shanghai, China and retail malls in Kuala Lumpur and

Malacca, Malaysia. With these acquisitions, the ADF will be substantially invested, paving the way for the

offi cial launch of the ARA Asia Dragon Fund II (“ADF II”). A successful closing for ADF II, targeted for the

fi rst half of 2011, will cement the ADF franchise and provide the Group with fresh equity to continue our

AUM growth.

FY2010 also saw the Group secure a foothold in Australia via the acquisition of a strategic interest in ASX4

-listed APN Property Group Limited (“APN”). Going forward, ARA will seek to collaborate with APN on

real estate fund opportunities in Australia and grow our presence in this key market.


A recent addition, the real estate management services business division, is a crucial component of the

Group’s strategy to differentiate itself as a real estate fund manager by having in-house expertise to more

effectively manage the properties in our portfolio. With APM Property Management (“APM”) and the

3 Compared to the REIT’s last closing price prior to the commencement of the exercise.4 Australian Securities Exchange.



Suntec Singapore team under our fold, ARA’s suite of services now extends to property management and

convention and exhibition services, making us a truly integrated real estate fund management company.

Already, we are seeing the fi rst-fruits of this strategic thrust. There is closer collaboration and more

effective coordination in the management of properties while in-house expertise is leveraged to augment

the investment process of our private real estate funds. As it supports the growing regional footprint of

the Group and builds up its human capital, we are confi dent that APM will in time, be a premium brand

in property management.

Drawing on the strong MICE5 venue management expertise and established brand name of Suntec

Singapore, the Group offi cially launched Suntec International in May 2010. With a keen knowledge of

the MICE market and established networks, Suntec International seeks to tap into the growing market for

MICE venues in Asia and to date, has secured several consultancy and sales & marketing representation

contracts in Canada and Malaysia.

Prospects

Looking ahead, a number of risks loom on the horizon – European sovereign debt woes, potential fallout

from the recent earthquake and tsunami in Japan, unrest in the Middle East, as well as infl ationary concerns

and the risk of asset bubbles in Asia. Nevertheless, as a leading Asian real estate fund manager, ARA is

well-positioned to ride the continued emergence of the Asian economies to sustain its growth trajectory.

With a leading regional REIT management platform, complemented by a strong private real estate funds

unit and a growing real estate management services division, ARA is now one of the largest real estate

fund managers in Asia. Leveraging on our growing profi le and brand, ARA stands poised to embark on

the next phase of our growth to realize our ambition of becoming the leading real estate fund manager

in Asia.

Acknowledgement

ARA’s achievements and continued success would not have been possible without the guidance of the

Board and the contributions of our employees. We would like to take this opportunity to thank our fellow

Directors on the Board and express our sincere appreciation to all employees of the Group for their hard

work and dedication during the year.

CHIU KWOK HUNG JUSTIN LIM HWEE CHIANG JOHNChairman Group Chief Executive Offi cer

5 Meetings, incentives, conventions and exhibitions.


YEAR IN

R E V I E W

HIGHLIGHTS OF THE YEAR

JANUARY

• ADF acquires a major retail mall in Dalian, China

APRIL

• Successful listing of Cache Logistics Trust on the

SGX-ST in partnership with CWT Limited

• Dual primary listing of Fortune REIT on the Stock

Exchange of Hong Kong and Singapore

• ARA FY2009 Annual General Meeting

MAY

• 1-for-5 bonus issue of 116,411,997 new ordinary shares

of S$0.002 each

• Offi cial launch of Suntec International to provide MICE

venue consultancy services

• Payment of FY2009 fi nal dividend of S$0.025 per share

JUNE

• ADF acquires Manulife Tower in North Point, Hong Kong

JULY

• ARA secures strategic interest in ASX-listed APN Property

Group Limited

AUGUST

• Suntec Singapore plays host as a key venue of the

inaugural Singapore 2010 Youth Olympic Games

• Prosperity REIT refi nances existing loans due on 16

Dec 2010 via a HK$2.2 billion term loan cum revolving

credit facility

• APM Malaysia established to provide consultancy

services in Malaysia


HIGHLIGHTS OF THE YEAR

SEPTEMBER

• Payment of FY2010 interim dividend of S$0.023

per share

• ARA named one of Asia’s “200 Best Under a Billion” by

Forbes Asia Magazine

OCTOBER

• Suntec REIT secures a S$700 million term loan facility

to repay a S$575 million loan maturing in 2012 and to

refi nance part of the S$400 million club loan maturing

in 2011

NOVEMBER

• ARA’s market capitalization crosses S$1 billion for the

fi rst time

DECEMBER

• ADF acquires the International Capital Plaza in Shanghai

China and two malls in Malaysia – 1 Mont’ Kiara in Kuala

Lumpur and Aeon Bandaraya Melaka Mall in Malacca

• Suntec REIT completes the acquisition of a one-third

interest in Marina Bay Financial Centre Towers 1 and

2, the Marina Bay Link Mall and 695 car park lots for

S$1.5 billion

• Group CEO John Lim and Group Finance Director Cheryl

Seow ranked among top three in the CEO and CFO

category respectively for Property & REITS – Asia in

Thomson Reuters Extel Asia IR Survey 2010


FINANCIAL HIGHLIGHTS

1 Earnings per share. Based on 698,471,997 shares in issue as at 31 December 2010 and 582,060,000 shares in issue as at 31 December 2009

Total Assets Under Management2 31 December 2010

31 December2009

Change (%)

REITs - Real estate3 (S$ billion) 11.4 8.4 36%

Private real estate funds - Real estate4 (S$ billion) 4.8 3.3 47%

Private real estate funds - Capital5 (S$ billion) 0.4 1.0 (65%)

Real estate management services6 (S$ billion) 0.3 0.3 5%

Total AUM (S$ billion) 16.9 12.9 30%

2 Based on exchange rates as at 31 December 20103 Property value of REITs4 Gross value of real estate investments in private real estate funds5 Unutilised commitments in private real estate funds and net asset value of specialist equity funds6 Revenue base for real estate management services fees computation

• Total revenue rose 30% to S$112.5 million

• Net profi t increased 32% to S$63.8 million

• Proposed fi nal dividend of S$0.025 per share, total payout of S$0.048 per share for FY2010

• Total assets under management up 30% for the year to S$16.9 billion (approximately US$13.1 billion)

Key Financial Results FY2010 FY2009 Change (%)

Revenue

Management fees S$’000 84,630 67,102 26%

Acquisition and performance fees S$’000 17,499 7,494 134%

Other income S$’000 10,382 11,683 (11%)

Total revenue S$’000 112,511 86,279 30%

Net profi t S$’000 63,812 48,339 32%

EPS1 S$ cents 9.1 8.3 10%

Net margin (%) 57% 56% 1% pts

Dividend S$ cents 4.8 4.8 -


2005 2006 2007 2008 20092004 2010

FINANCIAL HIGHLIGHTS

2003

0.6

2004

3.5

2008

11.7

2010

16.9

5.7

0.8

13.4

27.631.3

13.5

34.0

62.1

70.0

86.3

36.7

48.3

112.5

63.8

120

110

100

90

80

70

60

50

40

30

20

10

18

16

14

12

10

8

6

4

2

Total Revenue & Net Profi t (S$ million)

As at 31 Dec

Total Assets Under Management (S$ billion)

Management fees

Acquisition and performance fees

Other income

Net profi t

REITs - Real estate

Private real estate funds - Real estate

Private real estate funds - Capital

Real estate management services2009

12.9

2007

9.6

2006

6.3

2005

5.4


PERFORMANCE REVIEW

Performance Overview

The Group achieved a record net profi t of S$63.8 million for the fi nancial year ended 31 December

2010 (“FY2010”), a 32% jump from S$48.3 million in FY2009. Total revenue soared 30% to S$112.5

million on the back of increased recurrent management fee income, in particular from the real estate

management services division established in late 2009, and REIT acquisition fees. During the year, the

Group completed a number of signifi cant transactions including the listing of Cache Logistics Trust on

the SGX-ST in partnership with CWT Limited and Suntec REIT’s acquisition of a one-third interest in the

Marina Bay Financial Centre (“MBFC”)1. These transactions not only contribute materially to the Group’s

recurrent income base but further established the Group as a leading Asian real estate fund manager.

Assets Under Management

The Group’s total assets under management as at 31 December 2010 stood at S$16.9 billion, an

increase of S$4.0 billion or 30% from S$12.9 billion at 31 December 2009. REIT real estate assets under

management climbed 36% to S$11.4 billion from S$8.4 billion as at 31 December 2009, primarily from

the acquisition by Suntec REIT, the listing of Cache Logistics Trust on the SGX-ST and revaluation gains for

existing properties. For the Group’s private real estate funds, the increase in assets under management

was primarily due to acquisitions by the ARA Asia Dragon Fund (“ADF”) and positive revaluation gains for

real estate assets under management.

Revenue

Total revenue breached the S$100 million mark for the fi rst time in the Group’s history, climbing 30%

to S$112.5 million in FY2010 from S$86.3 million in FY2009. During the year, recurrent management

fee income grew 26% to S$84.6 million from S$67.1 million in FY2009, primarily due to the full year

contribution of the real estate management services division established in late 2009, REIT management

fees from Cache Logistics Trust and the increase in the Group’s REIT real estate assets under management.

Acquisition and performance fees jumped 134% to S$17.5 million in FY2010 from S$7.5 million in

FY2009. The increase was primarily from Suntec REIT’s MBFC acquisition which was completed on 9

December 2010. In FY2009, the Group received acquisition and performance fees of S$7.5 million primarily

in relation to Fortune REIT’s acquisition of 3 retail properties in Hong Kong and the establishment of the

ARA Harmony Fund. Other income fell 11% to S$10.4 million in FY2010 from S$11.7 million in FY2009,

primarily due to the lower gains on sale of REIT units received as part payment of REIT management fees.

Earnings

The Group achieved a net margin of 57% in FY2010, a marginal improvement from the 56% achieved

in FY2009. Operating expenses increased by 21% to S$38.6 million in FY2010 from S$31.8 million in

FY2009, due primarily to the full year expenses of the real estate management services division and the

Group’s continuing business expansion.

1 Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall and 695 car park lots.


PERFORMANCE REVIEW

FY2010 (S$ million) FY2009 (S$ million)

Total: S$112.5m Total: S$86.3m

REIT management fees

Private fund management fees

Real estate management services

Acquisition and performance fees

Other income

Singapore

Hong Kong

China

Malaysia

Revenue By Segments

Real Estate Assets Under Management By Country

S$46.041%

S$40.446%

S$10.49%

S$11.714%

S$17.516%

S$7.59%

S$13.011%

S$1.21%

S$25.623%

S$25.530%

FY2010 (S$ billion)

Total: S$16.2b

S$4.125%

S$8.553%

S$2.918%

S$0.74%

FY2009 (S$ billion)

Total: S$11.7b

S$3.328%

S$5.951%

S$2.118%

S$0.43%


PERFORMANCE REVIEW

The Group’s fi nance expenses mainly relate to a loan of RM44.9 million (approximately S$18.9 million)

from AmInvestment Bank Berhad (“AIBB”) to part fi nance the Group’s acquisition of a 12.5% interest in

AmFIRST REIT. Finance expenses increased by S$156,000 in FY2010 primarily due to an increase in the

interest rates on the loan from AIBB as compared to FY2009.

The Group’s share of profi ts of associates totaled S$456,000 for FY2010, an 86% jump from FY2009.

Additional contributions for the year were primarily from the Group’s 40% interest in Cache Property

Management Pte. Ltd., a joint venture between ARA and CWT Limited as property manager of the

properties of Cache Logistics Trust. Income tax expense rose 59% to S$9.3 million in FY2010 from S$5.8

million in FY2009, in line with the increase in pre-tax profi t of the Group.

As a result of the above, net profi t attributable to equity holders of the Company for FY2010 was S$63.8

million, a 32% jump from S$48.3 million in FY2009. Despite the enlarged share base of the Company

following the 1-for-5 bonus issue in May 2010, FY2010 earnings per share was 9.1 Singapore cents, up

10% from 8.3 Singapore cents per share in FY2009.

Dividends

The Directors are pleased to propose a fi nal tax-exempt (one-tier) dividend of 2.5 Singapore cents

per share for FY2010. Inclusive of the interim dividend of 2.3 Singapore cents per share paid out in

September 2010, the total dividend per share for FY2010 would amount to Singapore 4.8 cents per

share, unchanged from FY2009. However, the total dividend paid for FY2010 would amount to S$33.5

million, a 20% increase from the S$27.9 million paid in FY2009, in line with the enlarged share base of

the Company following the bonus issue.

Assets

The Group has an asset-light but human capital-focused business model of generating fee-based income

from real estate fund management and related services. As at 31 December 2010, the Group’s total

assets was S$221.6 million, including S$42.3 million of cash and cash-equivalents as well as S$149.1

million of fi nancial assets. For the year, fi nancial assets, which include the Group’s strategic stakes in

AmFIRST REIT, Suntec REIT, Cache Logistics Trust and seed investments in private funds and associated

securities, increased by 45% to S$133.7 million as at 31 December 2010 from S$92.4 million as at 31

December 2009, primarily due to strategic investments in Cache Logistics Trust and APN Property Group

Limited, capital calls from the ADF and increases in the market price of quoted securities.

Borrowings

As at 31 December 2010, the Group’s borrowings amounted to RM44.9 million (approximately S$18.9

million), comprising a secured revolving credit facility from AIBB to partially fi nance the acquisition of our

12.5% interest in AmFIRST REIT. The loan, which matures in May 2011, is secured on the AmFIRST REIT

units owned by the Group and bears a fl oating interest rate of 1.0% p.a. above AIBB’s cost of funds. The

Group had no other borrowings and as at 31 December 2010, overall gearing for the Group was 11%.


PERFORMANCE REVIEW

Shareholders’ Equity

In May 2010, the Company undertook a bonus share issue of one (1) share credited as fully paid for every

five (5) existing shares held in the capital of the Company. This amounted to the issuance of 116,411,997

new ordinary shares, bringing the total number of shares outstanding to 698,471,997. There were no

outstanding options or convertible securities of the Company as at 31 December 2010.

The Group’s total reserves was S$171.5 million as at 31 December 2010 while total shareholders’ equity

stood at S$173.5 million. Net tangible assets per share on the Company’s enlarged share base as at 31

December 2010 was S$0.25, marginally higher than the S$0.222 as at 31 December 2009.

Cash Flows & Liquidity

The Group’s main sources of operating cashfl ows are fees from the management of REITs and private real

estate funds as well as the provision of real estate management services. The fees for the provision of

these services are generally received in cash, except for management fees in respect of certain REITs, which

are received in cash and/or REIT units. The Group’s practice for REIT units received as part payment of REIT

management fees is to realize them into cash as soon as practicable and outside of the corresponding

black-out periods for the respective REITs.

Additionally, the Group maintains the following facilities:

• an unutilized unsecured revolving credit facility of $0.8 million which bears interest at the prime

lending rate; and

• unutilized 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 FY2010 increased to S$56.1 million from S$48.0 million

in FY2009, primarily due to higher operating profi t and proceeds from sale of REIT units. Cash outfl ows

from investing activities amounted to S$28.3 million in FY2010, compared with S$16.4 million in FY2009.

The higher cash outfl ow for investing activities in FY2010 was primarily due to the purchase of strategic

stakes in Cache Logistics Trust and APN Property Group Limited and capital calls from the ADF. There was

a net cash outfl ow for fi nancing activities of S$31.2 million in FY2010 compared to S$27.2 million in

FY2009, mainly due to an increase in dividends paid. As a result of the above, the Group’s cash position

decreased by S$3.8 million for the year from S$46.1 million as at 31 December 2009 to S$42.3 million

as at 31 December 2010.

2 Based on 582,060,000 shares as at 31 December 2009


OUR

P E O P L E

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

and non-executive director 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 is listed on the Main Board of The Stock

Exchange of Hong Kong Limited (“SEHK”) and Singapore

Exchange Securities Trading Limited (“SGX-ST”) while Suntec

REIT is listed on the SGX-ST and Prosperity REIT is listed on

the Main Board of 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 in Hong Kong and various countries and is one

of the most respected professionals in the property industry

in Asia. Mr Chiu is an executive director of Cheung Kong

BOARD OF DIRECTORS

(Holdings) Limited (“Cheung Kong”), a company listed on

the main board of 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 1994 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. Both

Sino Land Company Limited and Hang Lung Group Limited

are listed on the Main Board of SEHK.

Mr Chiu holds Bachelor degrees in Sociology and Economics

from Trent University in Ontario, Canada.

LIM HWEE CHIANG JOHNGroup Chief Executive Offi cer and Executive Director

Mr Lim Hwee Chiang John is the Group Chief Executive

Officer and Executive Director of ARA Asset Management

Limited (“ARA”). He has been the Group Chief Executive

Offi cer and Executive Director of ARA since its establishment.

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

Limited, the manager of Fortune REIT dual-listed in Singapore

and Hong Kong, ARA Trust Management (Suntec) Limited,

the manager of Singapore-listed Suntec REIT, ARA Asset

CHIU KWOK HUNG JUSTIN LIM HWEE CHIANG JOHN IP TAK CHUEN EDMOND LEE YOCK SUAN


BOARD OF DIRECTORS

Management (Prosperity) Limited, the manager of Hong

Kong-listed Prosperity REIT, Am ARA REIT Managers Sdn.

Bhd., the manager of Malaysia-listed AmFIRST REIT, ARA-

CWT Trust Management (Cache) Limited, the manager of

Singapore-listed Cache Logistics Trust, and the chairman

of APM Property Management Pte. Ltd., Suntec Singapore

International Convention & Exhibition Services Pte. Ltd. and

the management council of The Management Corporation

Strata Title Plan No. 2197 (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 Association, the senior vice president of the Asian

Public Real Estate Association, a council member of the

Singapore Chinese Chamber of Commerce & Industry 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 fi rm 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 non-executive director of ARA Asset Management

(Fortune) Limited (the manager of Fortune REIT) and a director

of ARA Trust Management (Suntec) Limited (the manager

of Suntec REIT). Fortune REIT is listed on the Main Board of

The Stock Exchange of Hong Kong Limited (“SEHK”) and

Singapore Exchange Securities Trading Limited (“SGX-ST”)

while Suntec REIT is listed on SGX-ST.

Mr Ip has been an executive director of Cheung Kong

(Holdings) Limited (“Cheung Kong”) since 1993 and deputy

managing director since 2005, responsible for overseeing

all fi nancial and treasury functions of Cheung Kong and its

LIM HOW TECK CHENG MO CHI MOSES COLIN STEVENS RUSSEL


BOARD OF DIRECTORS

subsidiaries, particularly in the fi elds of corporate and project

fi nance. 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 offi cer of CK

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

2002. He oversees matters relating to corporate fi nance,

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”), Ruinian International Limited (“Ruinian”)

and Shougang Concord International Enterprises Company

Limited (“Shougang”). Cheung Kong, CK Infrastructure, CK

Life Sciences, TOM, AVIC, Ruinian and Shougang are listed

on the Main Board of SEHK. Excel is listed on the Growth

Enterprise Market (GEM) of SEHK. Prior to joining Cheung

Kong, Mr Ip held a number of senior fi nancial positions in

major fi nancial institutions and has extensive experience in

the Hong Kong fi nancial market covering diverse activities

such as banking, capital markets, corporate fi nance, securities

brokerage and portfolio investments.

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.

He is also the chairman of ARA-CWT Trust Management

(Cache) Limited and Certis CISCO Security Pte. Ltd.. Mr Lim

is also an independent non-executive director of IFS Capital

Limited, Swissco Holdings Ltd, Mewah International Inc. and

Rickmers Trust Management Pte Limited (trustee-manager

of Rickmers Maritime), all of them listed on the Singapore

Exchange. Mr Lim is also 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 fi nancial offi cer, group chief operating

offi cer and group deputy chief executive offi cer. 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

fi rm 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, Certifi ed Public Accountants


BOARD OF DIRECTORS

Australia, the Institute of Certifi ed 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. He is also an independent non-executive director

of a number of public-listed companies. That includes 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, all being public listed

companies in Hong Kong. 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-offi ce Employment for former Chief Executives and

Politically Appointed Offi cials, the chairman of the Advisory

Committee on Post-service Employment of Civil Servants,

and a member of the Financial Reporting Council of Hong

Kong. 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 fi rm 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 Certifi cate 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 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 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 Canadian 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 a development 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 a registered professional engineer

and qualifi ed commercial mediator.


MANAGEMENT TEAM

LIM HWEE CHIANG JOHNGroup Chief Executive Offi cer

Finance & ComplianceSEOW BEE LIAN CHERYL

Group Finance Director

Suntec REITYEO SEE KIAT

Chief Executive Offi cer

ARA Private Funds /ARA Asia Dragon Fund

NG BENG TIONGChief Executive Offi cer

Corporate Offi ceNG BENG TIONG

Director

Fortune REITANG MENG HUAT ANTHONY


ARA Asia Dragon Fund II*CHOW CHEE PENG

Fund Director

Corporate Business DevelopmentMOSES SONG

Director

Prosperity REITSTEPHEN CHU


ARA Harmony FundJUSTINE VICTORIA WINGROVE


China DeskMUN HON PHENG

Country Head

AmFIRST REITLIM YOON PENG


Australia DeskMOSES SONGCountry Head

Cache Logistics TrustDANIEL CERF


Group Risk Management & Internal AuditTANG BOON KANG

Manager

Corporate Development & Human Resources

PAULINE LIMManager

APM Property ManagementSUSAN SIM


ARA FinancialLOW POH CHOO

Director

Offi ce AdministrationSERENE YEO

Manager

Suntec SingaporePIETER IDENBURG


Business Units Corporate Divisions

REITs


Private Funds

Corporate Finance Advisory Services

* To be launched


engineering group and E3 Holdings Limited, both of which

are listed on the SGX-ST. Prior to his current appointment, Mr

Ang was the chief executive offi cer of ARA Managers (Asia

Dragon) Pte. Ltd., the manager of 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 organization, 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. Mr Ang is a fellow of

the Chartered Management Institute (United Kingdom) and

a council member of the Chartered Management Institute

Singapore. He is currently the Secretary of the EDB Society.

STEPHEN CHUChief Executive Offi cer

ARA Asset Management (Prosperity) Limited,

Manager of Prosperity REIT

Mr Stephen Chu is the chief executive offi cer of ARA Asset

Management (Prosperity) Limited, the manager of Hong

Kong-listed Prosperity REIT. Prior to this, he was the chief

executive offi cer of ARA Asset Management (Fortune)

Limited, the manager of Fortune REIT.

Mr Chu has more than 20 years of international property

experience in the fi elds of leasing, sales, facility and property

MANAGEMENT TEAM

YEO SEE KIATChief Executive Offi cer

ARA Trust Management (Suntec) Limited,

Manager of Suntec REIT

Mr Yeo See Kiat is the chief executive offi cer and an executive

director of ARA Trust Management (Suntec) Limited, the

manager of Singapore-listed Suntec REIT. He is also a director

of One Raffl es Quay Private Limited and BFC Development

Pte. Ltd..

Mr Yeo has more than 30 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 20 years.

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

Young) and was with the fi rm 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 Certifi ed Public Accountants

of Singapore.

ANG MENG HUAT ANTHONYChief Executive Offi cer

ARA Asset Management (Fortune) Limited,

Manager of Fortune REIT

Mr Ang Meng Huat, Anthony is the chief executive offi cer

of ARA Asset Management (Fortune) Limited, the manager

of Fortune REIT. He is a Board Member of ARA Asia Dragon

Limited (ARA Asia Dragon Fund), the fl agship US$1.13 billion

private equity fund of the ARA group. Mr Ang is also an

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

Managers Sdn. Bhd., the manager of AmFIRST REIT listed in

Bursa Malaysia, and an independent non-executive director

of Armstrong Industrial Corporation Limited, a precision


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 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 Chartered

Realty Inc.

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

Master of Business Administration degree.

LIM YOON PENGChief Executive Offi cer

Am ARA REIT Managers Sdn. Bhd.,

Manager of AmFIRST REIT

Mr Lim Yoon Peng is the chief executive offi cer of Am ARA

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

AmFIRST REIT.

Prior to joining the Group, Mr Lim was the chief fi nancial

offi cer of Axis REIT Managers Bhd, where he was involved

in the establishment of Axis REIT, the fi rst REIT to be listed

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

the fi nancial controller and company secretary of Victoria

Investments & Properties Pty Ltd, a real estate company

focusing on real estate in Melbourne, Australia. Mr Lim

started his career in 1980 as a credit and fi nance manager

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

international companies including Balfour, Williamson &

Co. Ltd of the United Kingdom and the Pacifi c Dunlop Group

of Australia.

Mr Lim is a fellow of The Chartered Association of Certifi ed

Accountants, United Kingdom, a member of the Malaysian

Institute of Accountants and a fellow of Certifi ed Public

Accountants Australia. He is currently the Vice Chairman of

the Malaysian REIT Managers Association.

DANIEL CERFChief Executive Offi cer

ARA-CWT Trust Management (Cache) Limited,

Manager of Cache Logistics Trust

Mr Daniel Cerf is the chief executive offi cer of ARA-CWT Trust

Management (Cache) Limited, the manager of Singapore-

listed Cache Logistics Trust.

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

in Asia, working on investment and development ventures

in Hong Kong, Philippines, Singapore, Indonesia, Thailand,

Vietnam and Malaysia. Prior to joining the Manager, Mr

Cerf was the deputy chief executive offi cer of K-REIT Asia

Management Limited, the manager of K-REIT Asia – a REIT

listed on the SGX-ST.

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 Offi cer

ARA Private Funds


ARA Managers (Asia Dragon) Pte. Ltd.,

Manager of the ARA Asia Dragon Fund

Director, Corporate Offi ce

ARA Asset Management Limited

Mr Ng Beng Tiong is the chief executive offi cer of ARA Private

Funds, comprising all the private funds in the ARA Group.

He is also the chief executive offi cer of ARA Managers (Asia

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

He holds the concurrent appointment of director, corporate

offi ce, of ARA Asset Management Limited, overseeing

corporate development, administration and training &

development for the Group.

MANAGEMENT TEAM


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

the fi nance 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.

CHOW CHEE PENGFund Director

ARA Managers (Asia Dragon II) Pte. Ltd.,

Manager of the ARA Asia Dragon Fund II

Mr Chow Chee Peng is the fund director of ARA Managers

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

Dragon Fund II.

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 ARA Group in 2009, Mr Chow

was running his own real estate advisory business. Prior to

that, he had held various senior positions with Pacifi c 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 Certifi ed

Public Accountant (CPA) of Singapore since 1994 and a

Chartered Financial Analyst (CFA) since 1999.

JUSTINE VICTORIA WINGROVEChief Executive Offi cer

ARA Managers (Harmony) Pte. Ltd.,

Manager of the ARA Harmony Fund

Ms Justine Victoria Wingrove is the chief executive offi cer of

ARA Managers (Harmony) Pte. Ltd., the manager of the ARA

Harmony Fund.

Ms Wingrove has over 15 years of experience in real estate.

Prior to joining the Group, Ms Wingrove was the chief

executive offi cer of the manager of Parkway Life REIT, the

largest healthcare REIT in Asia. Ms Wingrove has also held

various senior positions with Capital Services Group (providing

real estate acquisition and asset management services to

Lehman Brothers in Asia), Savills and Jones Lang La Salle in

Asia.

Ms Wingrove holds a Bachelor of Science degree with

Honours in Estate Management. She is also a member of the

Royal Institution of Chartered Surveyors.

SUSAN SIMChief Executive Offi cer

APM Property Management Pte. Ltd.

Ms Susan Sim is the chief executive offi cer of APM Property

Management Pte. Ltd., the property management arm of the

Group and currently the property manager and managing

agent of Suntec City mall and offi ces.

Ms Sim has 20 years of experience in property development

and management in Singapore, Malaysia, China, Indonesia

and Vietnam. Prior to joining the Group, Ms Sim was the co-

founder and chief executive offi cer 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

known as 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.

MANAGEMENT TEAM


PIETER IDENBURGChief Executive Offi cer

Suntec Singapore International Convention &

Exhibition Services Pte. Ltd.


Suntec International Convention & Exhibition

Services Pte. Ltd.

Mr Pieter Idenburg is the executive director & chief executive

officer of Suntec Singapore International Convention &

Exhibition Services Pte. Ltd., as well as chief executive offi cer

of Suntec International Convention & Exhibition Services

Pte. Ltd.

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 infl uential in implementing

large scale change initiatives to increase shareholders’ value.

At Suntec Singapore, Mr. Idenburg has been instrumental

in helming landmark projects such as the extensive building

enhancement programme; he led the teams that were

responsible for the complex Suntec Singapore venue

operations for the IMF-World Bank Annual Meetings (2006),

APEC Singapore (2009) and the Singapore 2010 Youth Olympic

Games. Within the organization, he has been infl uential 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 also

serves as a committee member of the Hospitality and Retail

Group of the Singapore International Chamber of Commerce.

LOW POH CHOODirector

ARA Financial Pte. Ltd.

Ms Low Poh Choo is the director of ARA Financial Pte. Ltd.,

the corporate fi nance advisory arm of the ARA Group.

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

global fi nancial 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 fi eld, 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 fi nance director of

ARA Asset Management Limited, responsible for the Group’s

fi nance function.

Prior to joining the Group, Ms Seow established and ran her

own boutique consultancy fi rm 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 fi nancial

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 Certifi ed Public

Accountant with the Institute of Certifi ed Public Accountants

of Singapore.

MANAGEMENT TEAM


MOSES SONGDirector

Corporate Business Development

Country Head, Australia

Mr Moses Song is the director, corporate business

development of ARA Asset Management Limited, responsible

for the establishment of new investment management

platforms and the Group’s business development initiatives.

In addition, he oversees the Australia operations of the

Group as the head of ARA’s Australia Desk. Mr Song is also

an alternate director to Mr Lim Hwee Chiang John on the

board of ARA-CWT Trust Management (Cache) Limited, the

manager of Cache Logistics Trust listed on the SGX-ST.

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

operating offi cer at Lubert-Adler Asia Advisors Pte. Ltd., the

Asia investment platform of United States-based real estate

private equity fi rm 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 fi nance and

investments in Asia. He was based in Hong Kong from 2004

to 2007 with Merrill Lynch (Asia Pacifi c) 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 fi nance 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 Doctor 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

(inactive status).

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 specializing 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 the 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 the Beijing, China as the bank’s representative and 3

years in Hong Kong heading up the bank’s China Group. He

was also an executive director of a Singapore-listed company

Aztech Systems Ltd, an IT company.

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 fellow of the Singapore Institute of Arbitrators.

MANAGEMENT TEAM



• Asia’s “200 Best Under a Billion”,

Forbes Asia 2010

• Thomson Reuters Extel Asia IR Survey 2010

– CEO (Property & REITs – Asia), Top

Three Ranking – John Lim, Group CEO

– CFO (Property & REITs – Asia), Top

Three Ranking – Cheryl Seow, Group

Finance Director

Suntec REIT

• “Runner Up (REITs Category) – Most

Transparent Company Award”, Securities

Investors Association of Singapore

Investors’ Choice Award 2010

• “Gold Award – Annual Report – REIT –

Industrial / Offi ce”, International GALAXY

2010 Awards Competition

INVESTOR RELATIONS AND AWARDS

ARA maintains timely and consistent communications with stakeholders including shareholders,

prospective investors, analysts and the media. ARA makes disclosures on an immediate basis as required

under the Listing Manual of the SGX-ST, or as soon as possible where immediate disclosure is not

practicable. In addition to face-to-face meetings and conference calls with analysts and investors, ARA

also participates in investment conferences and non-deal roadshows and where appropriate, conducts

interviews with the media.

Through a proactive investor relations and communications programme, ARA has been able to raise the

level of awareness and understanding of the Group’s business, strategy and fi nancial performance.

ARA is committed to maintaining effective engagement of stakeholders and will continue to strive

towards enhancing investor relations practices, corporate governance and transparency. To this end, the

Group’s emphasis on effective investor relations has been recognised by the investment community with

numerous awards including:


Fortune REIT

• “Gold Award – Printing and Production – Real Estate

Development/Services”, International Annual Report

Competition Awards 2010

• “Honours Award – Illustration – Real Estate Development/

Service: Retail/Shopping Center”, International Annual

Report Competition Awards 2010

• “Honours Award – Non Traditional Annual Report – Real

Estate Development/Service: Retail/Shopping Center”,

International Annual Report Competition Awards 2010

• “Bronze Award – Annual Report – REIT Retail / Shopping

Malls”, International GALAXY 2010 Awards Competition

• “Directors of the Year Awards 2010”, Hong Kong Institute

of Directors – Mr Chiu Kwok Hung Justin, Chairman

• “Platinum Award – Corporate & Employee Contribution

Programme”, The Committee Chest of Hong Kong

2010 / 2011

• “Bronze Award – Interim Report 2010”, Mercury Awards

2010 / 2011

Prosperity REIT

• “Bronze Award – Annual Report – REIT Industrial/Offi ce Property”, International GALAXY 2010

Awards Competition

• “Honors Award – Design of Annual Report – International – Traditional”, International GALAXY

2010 Awards Competition

• “Bronze Award – Annual Report of REIT – Overall Presentation”, Mercury Awards 2009/2010

Cache Logistics Trust

• “Most Transparent Company Award (Runner-Up) – New Issues Category”, Securities Investors

Association of Singapore Investors’ Choice Awards 2010

Suntec Singapore

• “Asia’s Leading Meetings and Conference Centre”, World Travel Awards 2010

• “Best Convention and Exhibition Centre”, TTG Travel Awards 2010

• “Silver Award – Best Overseas Conference Centre”, The Meetings and Incentive Travel Award 2010

• “Best Business Venue Experience”, Singapore Experience Awards 2010

• “Best Convention and Exhibition Centre”(Runner-Up), CEI Asia Industry Awards 2010

• “Best MICE Sales Team” (Runner-Up), CEI Asia Industry Awards 2010

INVESTOR RELATIONS AND AWARDS


CORPORATE INFORMATION

Board Of Directors

CHIU KWOK HUNG JUSTINChairman and Non-Executive Director

LIM HWEE CHIANG JOHNGroup Chief Executive Offi cer 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

BUSARAKHAM KOHSIKAPORNIRA STUART OUTERBRIDGE III

Registered Offi ce

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 Raffl es Place#32-01 Singapore Land TowerSingapore 048623

Auditors

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

Principal Bankers

DBS Bank Ltd6 Shenton WayDBS Building Tower OneSingapore 068809

Standard Chartered Bank8 Marina BoulevardTower 1, Level 25Marina Bay Financial CentreSingapore 018981

The Hongkong and ShanghaiBanking Corporation Limited21 Collyer QuayHSBC BuildingSingapore 049320


FINANCIAL STATEMENTS

54 Report on Corporate Governance

68 Directors’ Report

71 Statement by Directors

72 Independent Auditors’ Report

74 Statements of Financial Position

75 Consolidated Income Statement

76 Consolidated Statement of Comprehensive Income

77 Consolidated Statement of Changes in Equity

79 Consolidated Statement of Cash Flows

81 Notes to the Financial Statements

123 Supplementary Information

124 Shareholders’ Information

126 Notice of Annual General Meeting

131 Notice of Books Closure


REPORT ON CORPORATE GOVERNANCE

ARA is committed to ensuring that high standards of corporate governance are practiced throughout the Group 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, profi table 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 specifi c

business needs and the interests of all stakeholders.

This report describes the Group’s application of the corporate governance principles and guidelines of the Code which is

underpinned by a robust structure and system of internal controls and accountability to all stakeholders. This is a fundamental

part of our objectives to protect and enhance shareholder value and drive long term sustainable growth of the Group.

ARA is pleased to confi rm that the Group has adhered to the principles and guidelines of the Code as set out below.

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 framework of prudent and effective controls to assess and manage risks, 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 diversifi ed

experience, independent judgment 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 objectively at all times

the interests of the Group. Profi les of the Directors can be found in page 40 to 43 of this Report.

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

include signifi cant 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 fi nancial institutions as well as those involving a

confl ict 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.

The Board regularly reviews the business plans, the assessment of key risks by Management and assesses the adequacy of

internal controls and fi nancial performance of the Group. 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 requiring the Board’s attention. 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 66 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 to 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:

• the Chairman of the Board should be a Non-Executive Director;

• the Board should comprise Directors with a broad range of commercial experience including experience in fund

management, fi nance, law and real estate; and

• at least one-third of the Board should comprise Independent Non-Executive Directors.

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

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 industry expertise and experience in areas such as accounting,

fi nance, strategic planning and business management. This enables Management to benefi t from the external and expert

perspectives of the Directors who collectively possess the core competencies relevant to the direction and growth of the Group.

The Board reviews its size and 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 these committees.

The Board has delegated specifi c responsibilities to these Board committees and their composition and terms of reference are

described in this Report. The Board accepts that while these Board committees have the authority to examine particular issues

and will report back to the Board with their decisions and/or recommendations, the ultimate responsibility on all matters lies

with the entire Board.



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.

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) reviewing and recommending to the Board the structure, size and composition of the Board and Board Committees;

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

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

(iv) evaluating if a Director has multiple board representations and if he is able to and has been adequately carrying out his

duties as a Director; and

(v) 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 transparent and formal nominating process for identifying and evaluating candidates

for appointment of new Directors and the re-appointment of Directors. The Nominating Committee makes recommendation

to the Board on the suitability of candidates based on key attributes such as integrity, commitment, fi nancial literacy,

competencies and state of independence to contribute to the Board.



The Nominating Committee has reviewed 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.

Although the Non-Executive Directors and Independent Non-Executive Directors hold directorships in other companies, the

Nominating Committee is satisfi ed that suffi cient time and attention are being given by the Directors to the affairs of the Group

and is of the view that such multiple board representations do not hinder them from carrying out their duties as Directors of

the Company. The Board affi rms and supports this view.

Our Bye-Laws require that each Director shall retire 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 67 of this Report.

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

performance and contributions to the Board (including attendance and participation at meetings, time and effort accorded to

the Group’s business and affairs).

The Nominating Committee has recommended the nomination of Mr Chiu Kwok Hung Justin, Mr Lim How Teck, Dr Cheng Mo

Chi Moses and Mr Colin Stevens Russel for re-election at the forthcoming AGM. The Board has accepted this recommendation

and being eligible, Mr Chiu Kwok Hung Justin, Mr Lim How Teck, Dr Cheng Mo Chi Moses and Mr Colin Stevens Russel 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 refl ected 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 and Directors’ performance

and has adopted a formal system of evaluating their performance as a whole. The Nominating Committee determines the

performance criteria which include an evaluation of the size and composition of the Board, the Board’s access to information,

its accountability, Board processes, the Board’s and individual directors’ performance in relation to discharging their principal

responsibilities, communication with Management and establishing and upholding standards of conduct for the Directors.

This formal assessment is conducted by means of a questionnaire completed by each Director, which is then collated and the

fi ndings analysed and discussed with the Nominating Committee and the Board. Recommendations to further enhance the

effectiveness of the Board are implemented, as appropriate.



ACCESS TO INFORMATION

Principle 6 In order to fulfi ll 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 fi nancial performance of the Group to enable them to exercise effective oversight over the Group’s operational and

fi nancial 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 briefi ngs 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 Group’s senior management, Company Secretary, internal and external

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

prepares minutes of Board proceedings. She also 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.

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 fi xing 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 ensuring a formal and transparent procedure on:

(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 the 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. The Remuneration Committee also has

access to independent expert and professional advice on remuneration matters, if required.

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 signifi cant 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 indefi nite term and

is paid a base salary monthly in arrears for the continuation of his employment, unless terminated for cause by written notice

of 6 months between the parties. The Remuneration Committee reviews the terms and conditions of the service agreement as

well as the remuneration component of the Group CEO on an annual basis.

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.


REITs Private Real Estate FundsCorporate 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 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

Annually


(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 fi nancial 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 benefi t) for that

fi nancial year, save for entitlements under the private real estate fund management, 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 profi tability of our Group. The scheme allows the Group to attract potential employees with

relevant skills and to motivate existing employees to optimise their performance, effi ciency 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 profi tability. 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 profi tability.

The Remuneration Committee had also recommended to the Board an amount of S$280,000 as Directors’ fees for the fi nancial

year ending 31 December 2011, to be paid quarterly in arrears. This recommendation has been endorsed by the Board and

would be tabled at the forthcoming Annual General Meeting (“AGM”) for shareholders’ approval.

No Director is involved in deciding his own remuneration.

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 2010 in bands of S$250,000 is provided below:


Remuneration Bands in FY2010 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


A breakdown of the remuneration of the Directors for the year ended 31 December 2010 is set out below:

(1) Includes AWS and employer’s CPF.

(2) Mr Chiu Kwok Hung Justin and Mr Ip T ak Chuen Edmond are full time employees of Cheung Kong Investment Company Limited, a

substantial shareholder of the Company, and have offered to waive their directors’ fees for FY2010.

(3) Key person and strategic advisor y 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.

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 also not Directors of the Company. We believe that this

disclosure, which provides suffi cient overview of the remuneration of the Group while maintaining confi dentiality 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 benefi ts upon termination of appointment or employment. We

have also not set aside nor accrued any amounts to provide for pension, retirement or similar benefi ts 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.


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

Total Compensation Bands in FY2010 Number of Employees

S$500,000 to below S$750,000 5

S$250,000 to below S$500,000 10

Below S$250,000 5

Total 20


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

annual fi nancial 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 fi nancial year end. In presenting the fi nancial reports, we aim to provide a balanced and understandable

presentation of the Group’s fi nancial performance, position and prospects.

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

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

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 fi nancial and

legal domains. The Board is of the view that the members of the Audit Committee are appropriately qualifi ed to discharge their

responsibilities. 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 fi ndings and Management’s response,

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

(v) interested person transactions.

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 to discuss their fi ndings set out in their respective reports to the Audit Committee. 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 confl icting views are submitted to the

full Board for its fi nal decision. Any member who has an interest in any matter being reviewed or considered abstains from

voting on the matter.

The Audit Committee also reviews the quarterly and annual fi nancial statements and any formal announcements relating to

our fi nancial 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 auditor. The Audit Committee has also reviewed all non-audit services provided by the external auditors and is

satisfi ed that the provision of such services did not affect the independence of the external auditors.



The Audit Committee, with the concurrence of the Board, had recommended the re-appointment of KPMG LLP as the external

auditors at the forthcoming AGM.

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

possible improprieties in matters of accounting and fi nancial 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.

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.

The Board recognises the importance of sound internal controls and risk management practices to good corporate governance.

The Board ensures that Management maintains a sound system of internal controls and risk management designed to manage

the risks and provide reasonable assurance against misstatement of loss, safeguarding of assets, maintenance of reliable and

proper accounting records and compliance with relevant legislation.

Risk management is an integral part of the Group’s ongoing operations. Management has identifi ed 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 systems established by Management, with the assistance of the Internal Auditors.

The Internal Auditors perform detailed work to assist the Audit Committee in the evaluation of the Group’s fi nancial, operational

and compliance controls. Any material non-compliance or weakness in internal controls, including recommendations for

improvements, is reported to the Audit Committee. The Audit Committee also reviews the effectiveness of actions taken by

Management on the recommendations made by the Internal Auditors in this respect.

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

management systems and the Board is satisfi ed that the controls 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. to assist the Group Internal Audit Department

(together referred to as the “Internal Auditors”) to conduct a full review of the Group’s internal control and risk

management systems.



The Internal Auditors are independent of Management and the Head of Internal Audit has a direct and primary reporting line

to the Chairman of the Audit Committee, with administrative reporting to the Group CEO. 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.

During the year, the Internal Auditors conducted audit reviews based on the internal audit plan approved by the Audit

Committee. Upon completion of each audit assignment, the Internal Auditors reported their fi ndings and recommendations to

Management who would respond on the actions to be taken. The Internal Auditors submit quarterly internal audit reports to

the Audit Committee on the audit fi ndings and actions taken by Management on the fi ndings.

The Audit Committee is satisfi ed 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 briefi ngs are conducted for analysts and media, generally coinciding with the release of the Group’s quarterly and full

year fi nancial results. The materials used in these briefi ngs are also disseminated simultaneously via SGXNET in the interest of

transparency and is made publicly available on a timely and non-selective basis.

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.

If any shareholder is unable to attend the shareholders’ meeting, he is allowed to appoint up to 2 proxies to vote on his behalf

at the meeting through proxy forms which are sent together with the Annual Reports or Circulars (as the case may be). The duly

completed and signed proxy forms is required to be submitted 48 hours before the shareholders’ meeting at the Company’s

Singapore Share Transfer Agent’s offi ce. At each shareholders’ meeting, each distinct issue is proposed as a separate resolution.



The Chairpersons of the Audit, Nominating and Remuneration Committees attend the AGM of the Company to address any

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

about 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 as well as in the units of public-listed REITs managed by the Group, while in possession of unpublished

material or non-public price sensitive information in relation to such securities and during the “black-out period” in respective

jurisdictions. In the case of listed entities in Singapore, the “black-out” period is defi ned as one month before the date of

announcement of quarterly and full year results and (where applicable) any property valuations. In the case of a REIT that is

listed in Hong Kong, the “black-out” period is defi ned as 60 days and 30 days immediately preceding the publication date

of the full year results and quarterly results announcements respectively (or if shorter, the period from the end of the relevant

end of fi nancial year or quarter up to the publication date of the results). In the case of a REIT that is concurrently listed in

Singapore and Hong Kong, both preceding “black-out” periods shall be applied (and taking the view of the more restrictive or

stringent regulation should there be any confl ict between both periods). The Directors of the Company and executives of the

Group are also discouraged from dealing in the Company’s shares and units of public-listed REITs managed by the Group on

short-term considerations.

The Company has complied with Rule 1207(18) of the Listing Manual of the SGX-ST.

INTERESTED PERSON TRANSACTIONS

Disclosure of interested person transactions (“IPTs”) is set out in page 123 of this Report. All IPTs are subject to review by the

Audit Committee at its quarterly meetings to ensure that such transactions are conducted on an arm’s length basis and not

prejudicial to the interests of the shareholders. It was noted that the IPTs were within the threshold limits set out under Chapter

9 of the Listing Manual of SGX-ST and no announcement or shareholders’ approval was, therefore, required. The transactions

had been conducted on an arm’s length basis and the procedures described in the Company’s Letter to Shareholders and

Depositors dated 1 April 2010 had been complied with. In addition to the requirements set out in the Listing Manual, the Board

has also adopted a policy of requiring Directors to declare their confl icts of interest, if any and abstain from voting if they are

so confl icted.




Participation of Directors in Board and Board Committee Meetings

Board Meetings

AuditCommittee

NominatingCommittee

Remuneration Committee

Name of Director

Appointment Attendance/ Number of meetings

held


held


held


held

Mr Chiu KwokHungJustin

Chairmanand Non-ExecutiveDirector

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

Mr Lim HweeChiangJohn

Group CEO and ExecutiveDirector

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

Mr Ip Tak ChuenEdmond

Non-ExecutiveDirector

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

Mr Lee Yock Suan

IndependentNon-ExecutiveDirector

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

Mr Lim HowTeck


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

Dr Cheng MoChiMoses


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

Mr Colin StevensRussel


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



Dates of Initial Appointment of Directors and Directorships in Listed Companies

Name of Director Appointment Date 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


Cheung Kong (Holdings) Limited

Mr Lim Hwee Chiang John

Group CEO and Executive Director

23 July 2002/29 April 2009


Teckwah Industrial Corporation Limited

Mr Ip Tak Chuen Edmond

Non-Executive Director 17 September 2007/26 April 2010


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 Limited

Mr Lee Yock Suan Independent Non-Executive Director

17 September 2007/26 April 2010


Mr Lim How Teck Independent Non-Executive Director



IFS Capital Limited

Mewah International Inc

Swissco Holdings Limited (formerly known as C2O Holdings Limited)

Dr Cheng Mo Chi Moses

Independent Non-Executive Director



China COSCO Holdings Company Limited

China Mobile Limited

China Resources Enterprise Limited

City Telecom (H.K.) Limited

Guangdong Investment Limited

Hong Kong Exchanges and Clearing Limited

K.Wah International Holdings Limited

Kader Holdings Company Limited

Liu Chong Hing Investment Limited

Tian An China Investments Company Limited

Towngas China Company Limited

Mr Colin Stevens Russel

Independent Non-Executive Director



Cheung Kong Infrastructure Holdings Limited

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

Husky Energy Inc.


DIRECTORS’ REPORT

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

for the fi nancial year ended 31 December 2010.

DIRECTORS

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

Mr Chiu Kwok Hung Justin (Chairman)

Mr Lim Hwee Chiang John (Group CEO)

Mr Ip Tak Chuen Edmond

Mr Lee Yock Suan

Mr Lim How Teck

Mr Cheng Mo Chi Moses

Mr Colin Stevens Russel

DIRECTORS’ INTERESTS

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

at the end of the fi nancial 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:

Mr Lim Hwee Chiang John, who by virtue of his interest in the Company, is deemed to have interests in the subsidiaries of ARA

Asset Management Limited, at the beginning and at the end of the fi nancial year.

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial 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 fi nancial year.

There were no changes in any of the above mentioned interests in the Company between the end of the fi nancial year and 21

January 2011.

Name of director and corporation in which interests are held

Holdings registered in name of director or nominee

Holdings in which director is deemed to have an interest

At 1.1.2010 At 31.12.2010 At 1.1.2010 At 31.12.2010

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

Mr Lim Hwee Chiang John 1,378,000 1,653,600 212,142,000 255,570,400

Mr Lee Yock Suan 50,000 60,000 - -

Mr Lim How Teck 450,000 540,000 - -

Mr Colin Stevens Russel 15,000 18,000 - -


DIRECTORS’ REPORT

DIRECTORS’ INTERESTS (cont’d)

Neither at the end of nor at any time during the fi nancial 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 benefi ts 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 benefi ts that are disclosed in this report and in Note 27 to the fi nancial

statements, since the end of the last fi nancial year, no director has received or become entitled to receive, a benefi t by reason

of a contract made by the Company or a related corporation with the director, or with a fi rm of which he is a member, or with

a company in which he has a substantial fi nancial interest.

SHARE OPTIONS

During the fi nancial 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 fi nancial 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:

• Mr Lee Yock Suan (Chairman), Independent Non-Executive Director

• Mr Lim How Teck, Independent Non-Executive Director

• Dr Cheng Mo Chi Moses, Independent Non-Executive Director

• Mr Colin Stevens Russel, Independent Non-Executive Director

The Audit Committee performs the functions specifi ed in Section 201B of the Singapore Companies’ Act, Chapter 50, the SGX

Listing Manual and the Code of Corporate Governance.

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

with the Company’s external and internal auditors to review their audit plans, discuss the scope of their work, the results of their

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


AUDIT COMMITTEE (cont’d)

The Audit Committee also reviewed the following:

• assistance provided by the Company’s offi cers to the internal and external auditors;

• quarterly fi nancial information and annual fi nancial statements of the Group and the Company prior to their submission

to the directors of the Company for adoption; and

• interested person transactions (as defi ned in Chapter 9 of the SGX Listing Manual).

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 offi cer 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 satisfi ed 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 Annual

General Meeting of the Company.

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

On behalf of the Board of Directors

MR CHIU KWOK HUNG JUSTIN

Director

MR LIM HWEE CHIANG JOHN

Director

25 February 2011

DIRECTORS’ REPORT


STATEMENT BY DIRECTORS

In our opinion:

(a) the fi nancial statements set out on pages 74 to 122 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 2010 and of the results, changes in equity and cash fl ows 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 fi nancial statements for issue.

On behalf of the Board of Directors

MR CHIU KWOK HUNG JUSTIN

Director

MR LIM HWEE CHIANG JOHN

Director

25 February 2011


INDEPENDENT AUDITORS’ REPORTMembers of the CompanyARA Asset Management Limited

REPORT ON THE FINANCIAL STATEMENTS

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

(the “Group”), which comprise the statements of fi nancial position of the Group and the Company as at 31 December 2010,

the income statement and statement of comprehensive income, statement of changes in equity and statement of cash fl ows

of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory information, as

set out on pages 74 to 122.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these fi nancial statements that give a true and fair view in

accordance with Singapore Financial Reporting Standards, and for such internal control as management determines is necessary

to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

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

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

plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements.

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

the fi nancial 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 fi nancial statements that give a true and fair view 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

fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.


INDEPENDENT AUDITORS’ REPORT

OPINION

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

present fairly, in all material respects, the fi nancial position of the Group and of the Company as at 31 December 2010, and

its fi nancial performance, changes in equity and cash fl ows for the year then ended in accordance with Singapore Financial

Reporting Standards.

KPMG LLP

Public Accountants and

Certifi ed Public Accountants

Singapore

25 February 2011


STATEMENTS OF FINANCIAL POSITIONAs at 31 December 2010

Note

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Assets

Intangible asset 21 798 1,450 - -

Plant and equipment 4 1,498 1,095 - -

Tenancy deposits 7 495 625 - -

Subsidiaries 28 - - 95,284 64,928

Associates 5 1,060 551 - -

Financial assets 6 133,658 92,432 - -

Total non-current assets 137,509 96,153 95,284 64,928

Financial assets 6 15,418 4,321 - -

Trade and other receivables 7 26,372 22,451 3,369 7,060

Cash and cash equivalents 8 42,327 46,148 10,240 25,600

Total current assets 84,117 72,920 13,609 32,660

Total assets 221,626 169,073 108,893 97,588

Equity

Share capital 1,397 1,164 1,397 1,164

Reserves 88,978 77,553 75,152 75,413

Accumulated profi ts 82,505 49,310 29,569 17,647

Equity attributable to equity holders of the Company 172,880 128,027 106,118 94,224

Non-controlling interests 638 (371) - -

Total equity 9 173,518 127,656 106,118 94,224

Liabilities

Loan and borrowings 10 387 18,515 - -

Deferred tax liabilities 12 142 54 - -

Total non-current liabilities 529 18,569 - -

Trade and other payables 13 20,200 17,760 2,773 3,362

Loan and borrowings 10 18,971 38 - -

Current tax payable 8,408 5,050 2 2

Total current liabilities 47,579 22,848 2,775 3,364

Total liabilities 48,108 41,417 2,775 3,364

Total equity and liabilities 221,626 169,073 108,893 97,588

The accompanying notes form an integral part of these fi nancial statements.


CONSOLIDATED INCOME STATEMENTYear ended 31 December 2010


Group

2010 2009

Note $’000 $’000

Revenue 14 102,129 74,596

Finance income 16 10,230 11,293

Other income 152 390

112,511 86,279

Administrative expenses (30,819) (21,856)

Operating lease expenses (2,537) (2,258)

Other expenses (5,211) (7,656)

Results from operating activities 73,944 54,509

Finance cost 16 (871) (715)

73,073 53,794

Share of profi t of associates, net of tax 456 245

Profi t before income tax 73,529 54,039

Income tax expense 17 (9,319) (5,844)

Profi t for the year 15 64,210 48,195

Attributable to:

Equity holders of the Company 63,812 48,339

Non-controlling interests 398 (144)

Profi t for the year 64,210 48,195

Earnings per share

Basic earnings per share (cents) 18 9.14 6.92

Diluted earnings per share (cents) 18 9.14 6.92


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEYear ended 31 December 2010

Group

2010 2009

$’000 $’000


Other comprehensive income

Translation differences relating to fi nancial statements of foreign subsidiaries (2,649) (875)

Available-for-sale fi nancial assets, net movement in fair value reserve 14,363 30,602

Effective portion of changes in fair value of cash fl ow hedge (28) 533

Other comprehensive income for the year, net of income tax 11,686 30,260

Total comprehensive income for the year 75,896 78,455

Attributable to:

Owners of the Company 75,498 78,599

Non-controlling interests 398 (144)




Attributable to equity holders of the Company

Reserves

Sharecapital

Sharepremium

Foreign currency

translationreserve

Fairvalue

reserveHedgingreserve

Accumulatedprofi ts Total

Non-controlling interests

Totalequity

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

Contributionsby 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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYYear ended 31 December 2010



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont’d)Year ended 31 December 2010

Attributable to equity holders of the Company

Reserves

Sharecapital

Sharepremium

Foreign currency

translationreserve

Fair value

reserveHedgingreserve

Accumulatedprofi ts Total

Non-controlling interests

Totalequity

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

At 1 January 2010 1,164 75,413 (773) 2,766 147 49,310 128,027 (371) 127,656

Total comprehensive income for the year - - (2,649) 14,363 (28) 63,812 75,498 398 75,896

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Issue of bonus shares 9 233 (233) - - - - - - -

Expenses on issue of bonus shares 9 - (28) - - - - (28) - (28)

Changes in ownership interests in subsidiary that do not result in a loss of control

- Contribution from non-controlling interest - - - - - - - 400 400

Waiver of shareholders’ loan - - - - - - - 211 211

Dividends to equity holders 9 - - - - - (30,617) (30,617) - (30,617)

Total transactions with owners 233 (261) - - - (30,617) (30,645) 611 (30,034)

At 31 December 2010 1,397 75,152 (3,422) 17,129 119 82,505 172,880 638 173,518



CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 December 2010

Group

2010 2009

Note $’000 $’000

Cash fl ows from operating activities


Adjustments for:

Amortisation of intangible asset 21 652 -

Depreciation 466 395

Share of profi t of associates (456) (245)

Interest income (718) (215)

Finance expenses 871 715

Distribution income (7,599) (7,590)

Gain on disposal of subsidiary 22 (203) -

Gain on fair valuation of held-for-trading securities (1,710) (3,488)

(Gain)/Loss on disposal of plant and equipment (105) 4

Management fees received/receivable in units of real estate investment trusts (51,324) (36,234)

Income tax expense 9,319 5,844

13,403 7,381

Changes in trade and other receivables 26 (4,163)

Changes in trade and other payables 2,440 6,383

Cash generated from operating activities 15,869 9,601

Income tax paid (5,873) (3,252)

Proceeds from sale of units in real estate investment trusts 38,472 34,749

Distribution income received 7,599 7,590

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

Net cash from operating activities 56,067 47,956

Cash fl ows from investing activities

Dividends received from associate - 170

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

Interest received 718 215

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

Disposal of subsidiary, net of cash disposed 22 24 -

Purchase of plant and equipment (1,018) (647)

Proceeds from disposal of plant and equipment 246 -

Purchase of unquoted available-for-sale securities (12,343) (2,732)

Purchase of quoted available-for-sale securities (16,334) (4,275)

Contribution from non-controlling interest 400 -

Net cash used in investing activities (28,307) (16,384)



Group

2010 2009

Note $’000 $’000

Cash fl ows from fi nancing activities

Dividends paid (30,617) (26,425)

Interest paid (871) (715)

Net proceeds/(payment) of fi nance lease liabilities 319 (38)

Net cash used in fi nancing activities (31,169) (27,178)

Net (decrease)/increase in cash and cash equivalents (3,409) 4,394

Cash and cash equivalents at 1 January 46,148 41,879

Effect of exchange rate fl uctuations on cash held (412) (125)

Cash and cash equivalents at 31 December 8 42,327 46,148

CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d)Year ended 31 December 2010



NOTES TO THE FINANCIAL STATEMENTS

These notes form an integral part of the fi nancial statements.

The fi nancial statements were authorised for issue by the Board of Directors on 25 February 2011.

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 offi ce 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 offi cial 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 real estate fund management services,

including acting as the manager for public-listed real estate investment trusts and private real estate funds, as well as

the provision of real estate fund management services.

The consolidated fi nancial statements relate to the Company and its subsidiaries (together referred to as the “Group”)

and the Group’s interest in associates.

2. BASIS OF PREPARATION

(a) Statement of compliance

The fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

(b) Basis of measurement

The fi nancial statements have been prepared on the historical cost basis except as otherwise described below.

(c) Functional and presentation currency

These financial statements are presented in Singapore dollars, which is the Company’s functional currency. All fi nancial

information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.


2. BASIS OF PREPARATION (cont’d)

(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 signifi cant effect on the

amounts recognised in the fi nancial statements is included in Notes 6, 11 and 23 – valuation and measurement of

fi nancial assets.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these fi nancial

statements, and have been applied consistently by Group entities.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated

fi nancial statements from the date that control commences until the date that control ceases. Control is the power to

govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control,

the Group takes into consideration potential voting rights that are currently exercisable.

The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by

the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests

even if doing so causes the non-controlling interests to have a defi cit balance.

For acquisition of subsidiaries under common control, the identifi able 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 defi ciency 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 acquisition method, the cost of acquisition is measured at the

date which control is transferred to the Group. The consideration transferred does not include amounts related to the

settlement of pre-existing relationships. Such amounts are generally recognised in profi t or loss. Costs related to the

acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection

with a business combination are expensed as incurred.



3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(a) Basis of consolidation (cont’d)

(i) Subsidiaries (cont’d)

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration

is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes

to the fair value of the contingent consideration are recognised within profi t or loss.

(ii) Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests

and the other components of equity related to the subsidiary. Any surplus or defi cit arising on the loss of control is

recognised in profi t or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured

at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an

available-for-sale fi nancial asset depending on the level of infl uence retained.

(iii) Investments in associates (equity-accounted investees)

Associates are companies in which the Group has signifi cant infl uence, but not control, over their fi nancial and

operating policies. Signifi cant infl uence 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 (equity-accounted investees) and

are recognised initially at cost. The cost of the investments includes transaction costs.

The consolidated fi nancial statements include the Group’s share of the profi t or loss and other comprehensive

income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted

investees with those of the Group, from the date that signifi cant infl uence commences until the date the signifi cant

infl uence ceases.

When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that

interest, including any long-term investments, is reduced to zero, 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 investee.

(iv) 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 fi nancial statements. Unrealised gains arising from transactions with

associates are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses

are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(v) Accounting for subsidiaries and associates by the Company

Investments in subsidiaries and associates are stated in the Company’s statement of fi nancial position at cost less

accumulated impairment losses.




(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 end of

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 year, adjusted for effective interest and payments during the year, and the amortised cost in foreign

currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to

the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a

foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the

transaction. Foreign currency differences arising on retranslation are recognised in profi t or loss, except for differences

arising on the retranslation of available-for-sale equity instruments, a fi nancial liability designated as a hedge of the

net investment in a foreign operation that is effective (see Note 3(b)(ii)), or qualifying cash fl ow hedges, which are

recognised in other comprehensive income.

(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, and presented in the foreign currency

translation reserve (translation reserve) in equity. However, if the operation is a non wholly-owned subsidiary, then the

relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign

operation is disposed of, such that control or signifi cant infl uence is lost, the cumulative amount in the translation

reserve related to that foreign operation is reclassifi ed to profi t or loss as part of the gain or loss on disposal. When the

Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the

relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of

only part of its investment in an associate that includes a foreign operation while retaining signifi cant infl uence, the

relevant proportion of the cumulative amount is reclassifi ed to profi t or loss.

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. These are recognised in other comprehensive income, and are presented

in the translation reserve in equity.




(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, the cost of dismantling and removing the items and restoring the site on which they are

located and capitalised borrowing costs. Cost may also include transfers from equity of any gain or loss on qualifying

cash fl ow hedges of foreign currency purchases of plant 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.

The gain or loss on disposal of an item of plant and equipment is determined by comparing the proceeds from disposal

with the carrying amount of plant and equipment, and is recognised net within other income/other expenses in

profi t or loss. When revalued assets are sold, any related amount included in the revaluation reserve is 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 benefi ts embodied within the component will fl ow to the Group and its cost can

be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day

servicing of plant and equipment are recognised in profi t or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Signifi cant components of individual assets are

assessed and if a component has a useful life that is different from the remainder of that asset, that component is

calculated separately.

Depreciation is recognised in profi t or loss on a straight-line basis over the estimated useful lives of each component of

an item of plant and equipment. 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 offi ce equipment - 3 to 5 years

Motor vehicles - 5 years

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted

if appropriate.




(d) Intangible asset

Goodwill

Goodwill represents the excess of:

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree,

over the net recognised amount (generally fair value) of the identifi able assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profi t or loss.

Subsequent measurement

Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the

carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an

investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-

accounted investee.

Acquired contractual right

Intangible asset represents an acquired contractual right. Intangible asset is measured at cost less accumulated

amortisation and impairment losses. Intangible asset is amortised in profi t or loss on a straight-line basis over their

estimated useful lives from the date of acquisition over the period as stated in each contract.

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted

if appropriate.

(e) Financial instruments

(i) Non-derivative fi nancial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other fi nancial

assets (including assets designated at fair value through profi t 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 fi nancial asset when the contractual rights to the cash fl ows from the asset expire, or it

transfers the rights to receive the contractual cash fl ows on the fi nancial asset in a transaction in which substantially all

the risks and rewards of ownership of the fi nancial asset are transferred. Any interest in transferred fi nancial assets that

is created or retained by the Group is recognised as a separate asset or liability.




(e) Financial instruments (cont’d)

(i) Non-derivative fi nancial assets (cont’d)

Financial assets and liabilities are offset and the net amount presented in the statement of fi nancial 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 classifi es non-derivative fi nancial assets into the following categories: fi nancial assets at fair value through

profi t or loss, loans and receivables and available-for-sale fi nancial assets.

Financial assets at fair value through profi t or loss

A financial asset is classifi ed at fair value through profi t or loss if it is classifi ed as held-for-trading or is designated as

such upon initial recognition. Financial assets are designated at fair value through profi t 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. Attributable transaction costs are recognised in profi t or loss

as incurred. Financial assets at fair value through profi t or loss are measured at fair value, and changes therein are

recognised in profi t or loss.

Financial assets designated at fair value through profi t or loss comprise equity securities that otherwise would have been

classifi ed as available-for-sale.

Loans and receivables

Loans and receivables are fi nancial assets with fi xed 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 interest bearing loan to a private fund, trade and other receivables and cash and

cash equivalents.

Cash and cash equivalents comprise cash balances and bank deposits with original maturities of three months or less.

Available-for-sale fi nancial assets

Available-for-sale financial assets are non-derivative fi nancial assets that are designated as available-for-sale and that

are not classifi ed in any of the above categories of fi nancial 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 debt instruments (see Note 3(b)(i)), are recognised in other comprehensive income and presented in the

fair value reserve within equity. When an investment is derecognised, the cumulative gain or loss in other comprehensive

income is transferred to profi t or loss.

Available-for-sale fi nancial assets comprises equity securities.





(ii) Non-derivative fi nancial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All

other fi nancial liabilities (including liabilities designated at fair value through profi t 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 fi nancial liability when its contractual obligations are discharged, cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of fi nancial 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 classifi es non-derivative fi nancial liabilities into the other fi nancial liabilities category. Such fi nancial liabilities

are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition,

these fi nancial liabilities are measured at amortised cost using the effective interest method.

Other fi nancial liabilities comprise loans and borrowings and trade and other payables.

(iii) Share capital

Ordinary shares

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of ordinary shares are

recognised as a deduction from equity, net of any tax effects.

(iv) Derivative fi nancial instruments and hedging activities

The Group holds derivative fi nancial 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 defi nition of a derivative, and the combined instrument is not measured at fair

value through profi t or loss.

On initial designation of the derivative as the hedging instrument, the Group formally documents the relationship

between the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking

the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of

the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on

an ongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes

in the fair value or cash fl ows of the respective hedged items during the period for which the hedge is designated.

For a cash fl ow hedge of a forecast transaction, the transaction should be highly probable to occur and should present

an exposure to variations in cash fl ows that could ultimately affect reported profi t or loss.





(iv) Derivative fi nancial instruments and hedging activities (cont’d)

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profi t or loss when

incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted

for as described below.

Cash fl ow hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash fl ows attributable to a

particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect

profi t 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. Any ineffective portion of changes in the fair value of the

derivative is recognised immediately in profi t or loss.

When the hedged item is a non-fi nancial asset, the amount calculated in equity is included in the carrying amount of

the asset when the asset is recognised. In other cases, the amount accumulated in equity is reclassifi ed to profi t or loss

in the same period that the hedged item affects profi t or loss. If the hedging instrument no longer meets the criteria

for hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting

is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance in equity is

reclassifi ed in profi t or loss.

Other non-trading derivatives

When a derivative fi nancial instrument is not designated in a hedge relationship that qualifi es for hedge accounting, all

changes in its fair value are recognised immediately in profi t or loss.

(f) Impairment

(i) Non-derivative fi nancial assets

A financial asset not carried at fair value through profi t or loss is assessed at the end of each reporting period to

determine whether there is objective evidence that it is impaired. A fi nancial 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 has a negative

effect on the estimated future cash fl ows of that asset that can be estimated reliably.

Objective evidence that fi nancial 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, adverse changes in the payment status of borrowers or issuers in the

Group, and economic conditions that correlate with defaults or the disappearance of an active market for a security.

In addition, for an investment in an equity security, a signifi cant or prolonged decline in its fair value below its cost is

objective evidence of impairment.




(f) Impairment (cont’d)

(i) Non-derivative fi nancial assets (cont’d)


The Group considers evidence of impairment for loans and receivables at both a specifi c asset and collective level. All

individually signifi cant loans and receivables are assessed for specifi c impairment. All individually signifi cant receivables

found not to be specifi cally impaired are then collectively assessed for any impairment that has been incurred but not yet

identifi ed. Loans and receivables that are not individually signifi cant are collectively assessed for impairment by grouping

together loans and receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, the 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 fi nancial asset measured at amortised cost is calculated as the difference between its

carrying amount and the present value of the estimated future cash fl ows, discounted at the asset’s original effective

interest rate. Losses are recognised in profi t or loss and refl ected in an allowance account against loans and receivables.

Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor)

causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profi t or loss.


Impairment losses on available-for-sale fi nancial assets are recognised by reclassifying the losses accumulated in the

fair value reserve in equity to profi t or loss. The cumulative loss that is reclassifi ed from equity to profi t 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 recognised previously in profi t or loss. Changes in impairment provisions attributable to application

of the effective interest method are refl ected 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 profi t or loss, then the impairment

loss is reversed. The amount of the reversal is recognised in profi t 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-fi nancial assets

The carrying amounts of the Group’s non-fi nancial 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, then the assets’ recoverable

amount is estimated. For goodwill, the recoverable amount is estimated each year at the same time. An impairment loss

is recognised if the carrying amount of an asset exceeds its estimated recoverable amount.




(f) Impairment (cont’d)

(ii) Non-fi nancial assets (cont’d)

Impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has

decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to

determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount

does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no

impairment loss had been recognised.

(g) Leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as

fi nance 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 are not recognised in the Group’s statement of fi nancial position.

(h) Lease payments

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in profi t

or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profi t or loss as an

integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under fi nance leases are apportioned between the fi nance expense and the reduction

of the outstanding liability. The fi nance lease is allocated to each period during the lease term so as to produce a

constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the

lease when the lease adjustment is confi rmed.

(i) Employee benefi ts

(i) Defi ned contribution plans

A defined contribution plan is a post-employment benefi t plan under which an entity pays fi xed contributions into a

separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to

defi ned contribution pension plans are recognised as an employee benefi t expense in profi t or loss in the periods during

which services are rendered by employees.

(ii) Short-term benefi ts

Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed as the related service

is provided.




(i) Employee benefi ts (cont’d)

(ii) Short-term benefi ts (cont’d)

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”) management fees

REIT management fees, comprising 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 real estate funds

managed and also includes corporate fi nancial 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.

Performance fees relate to fees earned in relation to private real estate funds where the returns of the private real estate

funds exceed certain specifi ed hurdles. Corporate fi nance advisory fees are determined based on contracted terms and

are recognised when the services have been rendered.

(iii) Portfolio management fees

Portfolio management fees are derived from the management of private real estate 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 service fees

Real estate management service fees are derived from the provision of property management services and convention

and exhibition services rendered. These fees include marketing services fees, advertising fees and commissions and

promotion commissions, and are recognised on an accrual basis.

(k) Government grants – jobs credit scheme

Cash grants received from the government in relation to the Jobs Credit Scheme are recognised as other income

upon receipt. This scheme was discontinued with the fi nal payment on 30 June 2010.




(l) Finance income and fi nance cost

Finance income comprises interest income on funds invested (including available-for-sale fi nancial assets), distribution

income, gains on the disposal of available-for-sale fi nancial assets, fair value gains on fi nancial assets at fair value through

profi t or loss and gains on hedging instruments that are recognised in profi t or loss. Interest income is recognised as it

accrues in profi t or loss, using the effective interest method. Distribution income is recognised in profi t or loss when the

unitholder’s right to receive payment is established.

Finance costs comprise interest expense on fi nancial liabilities, fees incurred in connection with the arrangement of debt

facility, losses on disposal of available-for-sale fi nancial assets, fair value losses on fi nancial assets at fair value through

profi t or loss, impairment losses recognised on fi nancial assets (other than trade receivables), and losses on hedging

instruments that are recognised in profi t or loss.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are

recognised in profi t or loss using the effective interest method.

(m) Income tax expense

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profi t or

loss except to the extent that it relates to a business combination, or 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.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for

fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business

combination and that affects neither accounting nor taxable profi t or loss;

• temporary differences related to investments in subsidiaries and associates to the extent that it is probable that

they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,

based on the laws that have been enacted or substantively enacted by the reporting date.




(m) Income tax expense (cont’d)

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 profi ts 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 benefi t

will be realised.

(n) 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.

(o) 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 monthly by the Group’s CEO to make decisions

about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information

is available.

Segment results reported to the 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 offi ce expenses, fi nance lease liabilities, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire plant and equipment.

(p) Earnings per share

The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated

by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of

ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by

adjusting the profi t 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.





(q) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning

after 1 January 2010, and have not been applied in preparing these fi nancial statements. None of these are expected to

have a signifi cant effect on the fi nancial statements of the Group.

4. PLANT AND EQUIPMENT

Leased plant and machinery

As at 31 December 2010, plant and equipment with a carrying amount of $550,000 (2009: $178,000) were acquired

under fi nance lease agreements. The amount outstanding under the fi nance lease agreements is set out in Note 10 to

the fi nancial statements.

Fittings and offi ce equipment

Motorvehicles

Total

Group $’000 $’000 $’000

Cost

At 1 January 2009 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

Additions 445 573 1,018

Disposals (107) (452) (559)


At 31 December 2010 1,929 573 2,502

Accumulated depreciation

At 1 January 2009 435 177 612

Depreciation for the year 300 95 395

Disposals (4) - (4)


At 31 December 2009 724 267 991

Depreciation for the year 367 99 466

Disposals (91) (327) (418)


At 31 December 2010 981 23 1,004

Carrying amount

At 1 January 2009 554 295 849

At 31 December 2009 895 200 1,095

At 31 December 2010 948 550 1,498


5. ASSOCIA TES

Details of signifi cant associates are as follows:

(1) Audited by Ernst & Young, Malaysia.

(2) Audited by KPMG LLP, Singapore.

Summary fi nancial information relating to associates which is not adjusted for the percentage of ownership held by the

Group are as follows:

During the year, the Group, together with a public-listed company in the logistics industry, established Cache Property

Management Pte. Ltd. (“CPM”), the property manager of Cache Logistics Trust. The Group’s contribution to set up

the investment was $40,000 and resulted in the Group obtaining a 40% equity interest in CPM. This contribution

represented start-up costs and as a result, there is no goodwill included in the investment.

Group

2010 2009

$’000 $’000

Movements in carrying value:

At 1 January 551 468

Additions 40 -

Effect of movement in exchange rates 13 8

Share of profi t for the year, net of tax 456 245

Dividends - (170)

At 31 December 1,060 551

Country ofIncorporation

Ownership Interest

Name of associates 2010 2009

% %

Am ARA REIT Holdings Sdn. Bhd. (1) Malaysia 30 30

Am ARA REIT Managers Sdn. Bhd. (1) Malaysia 30 30

Cache Property Management Pte. Ltd. (2) Singapore 40 -

2010 2009

$’000 $’000

Assets and liabilities

Total assets 3,126 2,072

Total liabilities 592 333

Results

Revenue 3,029 2,086

Expenses (including taxation) (1,746) (1,282)

Profi t after taxation 1,283 804




6. FINANCIAL ASSETS

Quoted fi nancial assets relate to units held in listed REITs and a real estate fund manager. Certain quoted available-for-

sale securities with an aggregate amount of $26,575,000 (2009: $22,819,000) relate to units held in a listed REIT which

are pledged as security to obtain credit facilities.

Unquoted available-for-sale fi nancial assets with a carrying value of $25,705,000 (2009: $10,980,000) relate to seed

capital investment stated at fair value.

Unquoted available-for-sale fi nancial assets of $4,640,000 (2009: $4,607,000) relate to units held in an open-ended

specialist equity fund.

The notional principal amounts of the Group’s outstanding derivative fi nancial instruments (forward exchange contracts)

at the end of the year were $6,161,000 (2009: $10,115,000).

The interest bearing loan to a private fund, classifi ed as “loans and receivables” of $8,000,000 (2009: $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% (2009: 8.50%).

The Group’s exposure to credit, currency and interest rate risks related to fi nancial assets is disclosed in Note 11.

Sensitivity analysis — equity price risk

All of the Group’s quoted equity fi nancial assets are listed on the SGX-ST, the Stock Exchange of Hong Kong, ASX

Limited or the Bursa Malaysia Securities Berhad. For such investments classifi ed as available-for-sale or held-for-trading,

a 10% increase/(decrease) in the above stock prices at the reporting date would increase/(decrease) equity and profi t or

loss by the following amounts:

This analysis assumes that all other variables remain constant.

Equity Profi t or loss

2010 2009 2010 2009

$’000 $’000 $’000 $’000

SGX-ST 6,223 4,603 1,530 417

ASX Limited 651 - - -

Bursa Malaysia Securities Berhad 2,658 2,282 - -

Group

2010 2009

$’000 $’000

Non-current

Quoted available-for-sale fi nancial assets 95,313 68,845

Unquoted available-for-sale fi nancial assets 30,345 15,587

Interest bearing loan to a private fund 8,000 8,000

133,658 92,432

Current

Derivative assets – forward exchange contracts 119 147

Quoted fi nancial assets held-for-trading 15,299 4,174

15,418 4,321


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 $1,263,000 (2009: $606,000).

Accrued revenue relates to accrual of REIT management fees and portfolio management fees.

8. CASH AND CASH EQUIVALENTS

The weighted average effective interest rates per annum relating to fi xed deposits with banks as at 31 December 2010

for the Group is 0.12% (2009: 0.05%). Interest rates are repriced on a weekly basis.

The Group’s exposure to interest rate risk and a sensitivity analysis for fi nancial assets and liabilities are disclosed in

Note 11.

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Trade receivables 1,888 1,400 - -

Accrued revenue 17,189 15,487 - -

Deposits 610 726 - -

Other receivables 5,733 2,426 148 102

Amounts due from subsidiaries, non-trade - - 3,196 6,935

Loans and receivables 25,420 20,039 3,344 7,037

Prepayments 1,447 3,037 25 23

26,867 23,076 3,369 7,060

Non-current 495 625 - -

Current 26,372 22,451 3,369 7,060

26,867 23,076 3,369 7,060

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Cash at bank and in hand 37,337 43,304 10,240 25,600

Short-term fi xed deposits 4,990 2,844 - -

Cash and cash equivalents in the statement of cash fl ows

42,327 46,148 10,240 25,600




9. CAPITAL AND RESERVES

Share Capital

The bonus issue of up to 116,412,000 new ordinary shares of $0.002 each in the capital of the Company, on the

basis of one bonus share credited as fully paid for every fi ve existing shares held in the capital of the Company, was

approved by shareholders at the Company’s Annual General Meeting held on 26 April 2010. Pursuant to the bonus

issue, 116,411,997 bonus shares were issued on 10 May 2010 from the share premium account. The newly issued

shares rank pari passu in all respect with the existing ordinary shares.

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 fi nancial 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 fl ow hedging

instruments related to hedged transactions that have not yet occurred.

2010 2009

Number ofshares

Number ofshares

’000 ’000

Group and Company

At 1 January 582,060 582,060

Issue of bonus shares, par value of $0.002 each 116,412 -

At 31 December 698,472 582,060


9. CAPITAL AND RESERVES (cont’d)

Dividends

The following dividends were declared and paid by the Group and Company:

At the Annual General Meeting to be held on 28 April 2011, a fi nal exempt dividend of $0.0250 per share amounting

to a total of $17,462,000 will be recommended for shareholders’ approval. These fi nancial statements do not refl ect this

dividend, which will be accounted for in the shareholders’ equity as an appropriation of retained profi ts in the fi nancial

year ending 31 December 2011.

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.

For the year ended 31 December

Group and Company

2010 2009

$’000 $’000

Interim dividend of $0.0230 per ordinary share (2009: $0.0230) 16,065 13,387

Final dividend of $0.0250 per ordinary share, paid in respect of the previous fi nancial year (2009: $0.0224) 14,552 13,038

30,617 26,425

Group

2010 2009

$’000 $’000

Non-current liabilities

Secured bank loan - 18,365

Finance lease liabilities 387 150

387 18,515

Current liabilities

Secured bank loan 18,851 -

Finance lease liabilities 120 38

18,971 38

19,358 18,553




10. LOAN AND BORROWINGS (cont’d)

Terms and debt repayment schedule

Terms and conditions of outstanding loan and borrowings are as follows:

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 fi nance its acquisition of the units in AmFIRST REIT. The facility is secured

by the units held 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 fi nance leases that are payable as follows:

31 December 2010

CurrencyNominal

interest rateYear of

maturityFair

valueCarryingamount

Group $’000 $’000

Secured bank loan MYR 1.0% per annum above the bank’s cost of funds

2011 18,851 18,851

Finance lease liabilities HKD 2.50% per annum 2013 170 170

Finance lease liabilities SGD 2.68% per annum 2017 337 337

19,358 19,358

31 December 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

2010 2009

Principal Interest Payments Principal Interest Payments

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

Within 1 year 120 15 135 38 9 47

Between 1 to 5 years 294 46 340 150 36 186

More than 5 years 93 17 110 - - -

507 78 585 188 45 233


11. FINANCIAL INSTRUMENTS

Credit risk

The carrying amount of fi nancial 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 fi nancial liabilities which are measured at amortised cost including

estimated interest payments but excluding the impact of netting agreements:

Group Company

2010 2009 2010 2009

Note $’000 $’000 $’000 $’000


- Interest bearing loan to a private fund 6 8,000 8,000 - -

- Loan and other receivables 7 25,420 20,039 3,344 7,037

- Cash and cash equivalents 8 42,327 46,148 10,240 25,600


- Quoted fi nancial assets 6 95,313 68,845 - -

- Unquoted fi nancial assets 6 30,345 15,587 - -

Fair value through profi t or loss

- Quoted fi nancial assets held-for-trading 6 15,299 4,174 - -

- Derivative assets – forward exchange contracts 6 119 147 - -

216,823 162,940 13,584 32,637

Cash fl ows

Carryingamount

Contractualcash fl ows

Within1 year

Within1 to 5 years

More than5 years

Group $’000 $’000 $’000 $’000 $’000

2010

Non-derivative fi nancial liabilities

Floating interest rate loans 18,851 (19,285) (19,285) - -

Finance lease liabilities 507 (585) (135) (340) (110)

Trade and other payables 20,200 (20,200) (20,200) - -

39,558 (40,070) (39,620) (340) (110)

2009

Non-derivative fi nancial liabilities

Floating interest rate loans 18,365 (19,352) (698) (18,654) -

Finance lease liabilities 188 (233) (47) (186) -


36,313 (37,345) (18,505) (18,840) -




11. FINANCIAL INSTRUMENTS (cont’d)

Liquidity risk (cont’d)

It is not expected that the cash fl ows included in the maturity analysis could occur signifi cantly earlier, or at signifi cantly

different amounts.

The following table indicates the periods in which the cash fl ow associated with derivatives that are cash fl ow hedges

are expected to occur:

Currency risk

Exposure to currency risk

Exposure to foreign currency risk is monitored on an outgoing basis and the Company endeavours to keep the net

exposure to an acceptable level.

The Group’s and Company’s exposures to foreign currency was as follows based on notional amounts:

Cash fl ows

Carryingamount

Contractualcash fl ows

Within1 year

Within1 to 5 years

More than5 years

Company $’000 $’000 $’000 $’000 $’000

2010


2009


Cash fl ows

Carryingamount

Expectedcash fl ows

Within1 year

Within1 to 5 years

More than5 years

Group $’000 $’000 $’000 $’000 $’000

2010

Forward exchange contracts

- assets 119 119 119 - -

2009

Forward exchange contracts

- assets 147 147 147 - -

Group Company

Singapore dollar

United Statesdollar

Hong Kongdollar

United Statesdollar

$’000 $’000 $’000 $’000

2010

Trade and other receivables - - 2,225 -

Cash and cash equivalents 34 270 63 5

Trade and other payables (21) - (64) -

13 270 2,224 5



Currency risk (cont’d)

Sensitivity analysis

A 10% strengthening of the Singapore dollar against the following currencies at the reporting date would increase/

(decrease) profi t 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 2009, albeit

that the reasonably possible foreign exchange rate variances were different, as indicated below:

A 10% weakening of the 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.

Group Company

Singapore dollar

UnitedStatesdollar

HongKongdollar

Malaysiaringgit

UnitedStatesdollar

HongKongdollar

$’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)

Profi t or loss

Group Company

$’000 $’000

2010

United States dollar (27) (1)

Hong Kong dollar (222) -

(249) (1)

2009

United States dollar (347) (297)

Hong Kong dollar (206) -

(553) (297)





Interest rate risk

At the reporting date, the interest rate profi le of the interest-bearing fi nancial instruments was:

Cash fl ow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rate at the reporting date would have increase/(decrease) profi t 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 2009.

Fair value

Fair values versus carrying amounts

The carrying amounts of the Group and the Company’s fi nancial instruments carried at cost or amortised cost are not

materially different from their fair values as at 31 December 2010 and 2009.

Group

Carrying amount

2010 2009

$’000 $’000

Fixed rate instruments

Financial liabilities 507 188

Variable rate instruments

Financial liabilities 18,851 18,365

Profi t or loss

100 bp increase 100 bp decrease

$’000 $’000

Group

2010

Variable rate instruments (189) 189

Cash fl ow sensitivity (net) (189) 189

2009

Variable rate instruments (184) 184

Cash fl ow sensitivity (net) (184) 184



Fair value (cont’d)

Fair value hierarchy

The table below analyses fi nancial instruments carried at fair value, by valuation method. The different levels have been

defi ned as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market price data (unobservable inputs).

During the fi nancial year ended 31 December 2010, there were no transfers between Level 1 and Level 2 of the fair

value hierarchy.

The following table shows a reconciliation from the beginning balances to the ending balances for fair value

measurements in Level 3 of the fair value hierarchy:

Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

Group

2010

Available-for-sale fi nancial assets 95,313 4,640 25,705 125,658

Financial assets held-for-trading 15,299 - - 15,299

Derivative assets – forward exchange contracts

- 119 - 119

110,612 4,759 25,705 141,076

2009

Available-for-sale fi nancial assets 68,845 4,607 10,980 84,432

Financial assets held-for-trading 4,174 - - 4,174

Derivative assets – forward exchange contracts

- 147 - 147

73,019 4,754 10,980 88,753

Group

2010

$’000

Available-for-sale fi nancial asset – Level 3:

At 1 January 10,980

Capital contribution 11,999

Total gains and losses recognised in other comprehensive income 2,726

At 31 December 25,705





Fair value (cont’d)

The fair value of the Level 3 fi nancial instrument as at the reporting date was determined using a valuation technique

using the realisable net asset value approach, which takes into consideration the fair value of the underlying assets and

liabilities of the entity to which the fi nancial instrument relates. The assets held by the relevant entity comprise mainly

properties whose fair values were determined by an independent licensed appraiser. The fair values of the properties

were based on market values determined using the discounted cash fl ow and direct comparison methods.

An analysis of the effect of changing one or more inputs to reasonably possible alternative assumptions has not been

presented as such an effect would not have resulted in a signifi cant change to the fair value measurement of the

Group’s total equity.

12. DEFERRED TAX

Unrecognised deferred tax asset

Deferred tax assets have not been recognised in respect of the following items:

The tax losses were 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 did not expire under current tax

legislation. Deferred tax assets had not been recognised in respect of these items because it was not probable that

future taxable profi t would be available against which the Group could recognise the benefi ts.

Recognised deferred tax liabilities

Deferred tax liabilities of the Group and the Company are attributable to the following:

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Deductible temporary differences - 41 - -

Tax losses - 1,394 - -

- 1,435 - -

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Deferred tax liabilities

Plant and equipment 142 54 - -


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 non-controlling interest are unsecured.

14. REVENUE

15. PROFIT FOR THE YEAR

The following items have been included in arriving at the profi t for the year:

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Trade payables 2,704 1,073 26 17

Accrued expenses 16,158 13,754 1,825 2,262

Other payables 1,038 2,282 922 922

Amounts due to subsidiaries, non-trade - - - 161

Amounts due to a non-controlling interest, non-trade 300 651 - -

20,200 17,760 2,773 3,362

Group

2010 2009

$’000 $’000

REIT management fees 46,018 40,377

Portfolio management fees 25,561 25,528

Acquisition and performance fees 17,499 7,494

Real estate management service fees 13,051 1,197

102,129 74,596

Group

2010 2009

$’000 $’000

Other income

Gain on disposal of plant and equipment 105 -

Operating expenses

Non-audit fee paid to:

- Auditors of the Company 119 79

Amortisation of intangible asset 652 -

Depreciation of plant and equipment 466 395

Loss on disposal of plant and equipment - 4

Foreign exchange loss/(gain), net 651 (93)

Impairment loss on available-for-sale fi nancial assets - 2,768

Staff costs 24,508 15,242

Contribution to defi ned contribution plans, included in staff costs 964 601




16. FINANCE INCOME AND FINANCE COST

Recognised in profi t or loss:

17. INCOME TAX EXPENSE

Group

2010 2009

$’000 $’000

Finance income

Interest income on bank deposits 47 71

Interest income on interest-bearing loans to a private fund 671 144

Gain on disposal of subsidiary 203 -

Gain on fair valuation of held-for-trading securities 1,710 3,488

Distribution income 7,599 7,590

Total fi nance income 10,230 11,293

Finance cost

Interest expense:

- bank loans 784 692

- fi nance lease liabilities 46 9

- bank overdraft - 4

Others 41 10

Total fi nance cost 871 715

Group

2010 2009

$’000 $’000

Current tax expense

Current year 9,324 5,814

(Over)/under provision in prior years (93) 30

9,231 5,844

Deferred tax expense

Origination and reversal of temporary differences 88 -

Total income tax expense 9,319 5,844


17. INCOME TAX EXPENSE (cont’d)

Reconciliation of effective tax rate

* The profi ts of ARA Asset Management (Fortune) Limited and ARA Strategic Capital I Pte. Ltd. (divested in August 2010,

(Note 22)) 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.

18. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share at 31 December 2010 was based on the profi t attributable to

equity holders of $63,812,000 (2009: $48,339,000) and a weighted average number of ordinary shares outstanding of

698,471,997 (2009: 698,471,997) calculated as follows:


Group

2010 2009

$’000 $’000


Total income tax expense 9,319 5,844

Profi t excluding income tax 73,529 54,039

Income tax using the Singapore tax rate at 17% (2009: 17%) 12,500 9,187

Effects of concessionary tax rate* - (192)

Effects of different tax rates in foreign jurisdiction (3,050) (3,680)

Non-deductible expenses 399 574

Income not subject to tax (470) (123)

(Over)/under provision in prior years (93) 30

Deferred tax assets not recognised - 13

Others 33 35

9,319 5,844

Group

2010 2009

$’000 $’000

Profi t attributable to equity holders 63,812 48,339

Number of shares

Number of shares

’000 ’000

Issued ordinary shares at beginning of the year 582,060 582,060

Effect of bonus shares issued on 10 May 2010 116,412 116,412

Weighted average number of ordinary shares at the end of the year 698,472 698,472

Basic and diluted earnings per share (cents) 9.14 6.92



18. EARNINGS PER SHARE (cont’d)

The basic and diluted earnings per ordinary share for the years ended 31 December 2010 and 31 December 2009 are

calculated based on the number of ordinary shares after the issuance of the bonus shares on 10 May 2010.

19. OPERATING SEGMENTS

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. For each of the strategic

business units, the Group’s CEO reviews internal management reports on a monthly basis. The following summary

describes the operations in each of the Group’s reportable segments:

REITs : Provision of fund management services remove to real estate

investment trusts

Private real estate funds : Provision of fund management services to private real estate funds and

specialist equity funds

Real estate management services : Provision of property management services and convention and

exhibition services

Investment holdings : Investing in a portfolio of listed securities in REITs and a real estate fund

manager and unlisted equity investment in private real estate funds

Others comprise primarily corporate fi nance advisory services.

Information regarding the results of each reportable segment is included below. Performance is measured based on

segment profi t before income tax, as included in the internal management reports that are reviewed by the Group’s

CEO. Segment profi t 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.


19. OPERATING SEGMENTS (cont’d)

Information about reportable segments


REITs Private real estatefunds

Real estate management

services

Investment holdings

Others Total

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

External revenues

63,553 49,147 26,660 27,766 13,570 1,197 7,645 6,959 1,083 1,210 112,511 86,279

Inter-segment revenue

- - - - - - - - 6,887 5,663 6,887 5,663

63,553 49,147 26,660 27,766 13,570 1,197 7,645 6,959 7,970 6,873 119,398 91,942

Interest expense

(46) (13) - - - - (825) (702) - - (871) (715)

Depreciation (302) (284) (8) (13) (60) - - - (96) (98) (466) (395)

Reportable segment profi t before income tax

41,683 31,383 17,501 17,410 6,910 978 4,959 3,300 3,231 1,447 74,284 54,518

Share of profi t of associates, net of tax

170 245 - - 286 - - - - - 456 245

Reportable segment assets

45,300 23,529 9,345 11,764 14,488 11,654 148,254 119,944 3,179 1,631 220,566 168,522

Investment in associates

733 551 - - 327 - - - - - 1,060 551

Capital expenditure

717 146 6 11 293 204 - - 2 286 1,018 647

Reportable segment liabilities

5,718 2,835 3,518 5,299 6,556 5,386 21,721 21,663 1,677 942 39,190 36,125




Reconciliations of reportable segment revenues, profi t or loss, assets and liabilities and other material items

of the Group

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.

2010 2009

$’000 $’000

Revenue

Total revenue for reporting segments 111,428 85,069

Other revenue 7,970 6,873

119,398 91,942

Elimination of inter-segment revenue (6,887) (5,663)

Revenue 112,511 86,279

Profi t or loss

Total profi t for reportable segments 71,053 53,071

Other profi t or loss 3,231 1,447

74,284 54,518

Unallocated amounts:

- Other corporate expenses (1,211) (724)

Share of profi t of associates, net of tax 456 245

Profi t before income tax 73,529 54,039

Assets

Total assets for reportable segments 217,387 166,891

Other assets 3,179 1,631

220,566 168,522

Investments in associates 1,060 551

Total assets 221,626 169,073

Liabilities

Total liabilities for reportable segments 37,513 35,183

Other liabilities 1,677 942

39,190 36,125

Other unallocated liabilities 8,918 5,292

Total liabilities 48,108 41,417



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.) (“APM”) for $1,606,000 in cash. APM is the managing agent of The Management

Corporation Strata Title Plan No. 2197, 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:

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.

(a) Goodwill, including the comparative, has been reclassifi ed to intangible asset (Note 21) to refl ect the Group’s

contractual right to receive the expected future economic benefi t embodied in the managing agent agreement that

will fl ow to the Group.

Geographical information Revenue Segment assetsCapital

expenditure

$’000 $’000 $’000

2010

Singapore 79,847 143,393 789

Hong Kong 5,256 2,251 226

Malaysia 2,205 28,689 3

Others 25,203 46,233 -

112,511 220,566 1,018

2009

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

2010 2009

$’000 $’000

Cash and cash equivalents - 183

Prepayment - 5

Accruals - (11)

Goodwill (a) - 1,450

Provision for tax - (21)

Net identifi able assets and liabilities/consideration paid - 1,606

Consideration payable - (308)

Cash acquired - (183)

Net cash outfl ow - 1,115




21. INTANGIBLE ASSET

22. DISPOSAL OF SUBSIDIARY

In August 2010, the Group divested all of its interest in a subsidiary, ARA Strategic Capital I Pte. Ltd. to APN Funds

Management Limited, the Group’s strategic partner in Australia.

The disposal had the following effects on the fi nancial position of the Group:

Total

Group $’000

Cost

At 1 January 2009 -

Arising from acquisition of subsidiary (Note 20) 1,450

At 31 December 2010 and 2009 1,450

Accumulated amortisation and impairment

At 1 January 2009 -

Amortisation for the year -

At 31 December 2009 -

Amortisation for the year 652

At 31 December 2010 652

Carrying amount

At 31 December 2009 1,450

At 31 December 2010 798

2010 2009

$’000 $’000

Offi ce equipment 6 -

Cash and cash equivalents 398 -

Trade and other receivables 42 -

Trade and other payables (24) -

Net identifi able assets and liabilities 422 -

Gain on disposal of subsidiary 203 -

Total consideration, satisfi ed in cash 625 -

Consideration receivable in cash (203) -

Cash and cash equivalents disposed of (398) -

Net cash infl ow 24 -


23. DETERMINATION OF FAIR VALUES

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both fi nancial

and non-fi nancial 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 specifi c to that asset or liability.

(i) Investments in equity securities

The fair values of quoted and unquoted investments that are classifi ed as available-for-sale as well as quoted investments

held-for-trading are generally their quoted bid prices at the reporting date. The fair value of certain unquoted securities

classifi ed as available-for-sale is determined using a valuation technique (see Note 11).

(ii) Loans and receivables

The fair value of loans and receivables is estimated as the present value of future cash fl ows, 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 fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and

interest cash fl ows, discounted at the market rate of interest at the reporting date. For fi nance leases, the market rate

of interest is determined by reference to similar lease agreements.

24. FINANCIAL RISK MANAGEMENT

Overview

The Group has exposure to the following risks from its use of fi nancial instruments:

• credit risk

• liquidity risk

• market risk

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 fi nancial statements.




24. FINANCIAL RISK MANAGEMENT (cont’d)

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 refl ect 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 Risk Management and Internal Audit division. The

Group Risk Management and Internal Audit division undertakes both regular and adhoc reviews of risk management

controls and procedures, the results of which are reported to the Audit Committee.

Credit risk

Credit risk is the risk of fi nancial loss to the Group if a counterparty to a fi nancial 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 infl uenced 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 infl uence 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 real estate funds. 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 specifi c loss

component that relates to individually signifi cant exposures, and a collective loss component established for groups

of similar assets in respect of losses that have been incurred but not yet identifi ed. The collective loss allowance is

determined based on historical data of payment statistics for similar fi nancial assets.

Investments and other fi nancial assets

Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to discharge

their obligations in full or in a timely manner consist principally of cash and cash equivalents and other fi nancial assets.

The maximum exposure to credit risk is the carrying value of the fi nancial instruments at the end of the reporting period.

Credit risk on cash and cash equivalents and derivative fi nancial instruments is limited because these are placed with

regulated fi nancial institutions. Credit risk on other fi nancial assets is limited because the counter parties are entities

with high credit quality and/or acceptable credit ratings. These fi nancial assets are monitored on an ongoing basis

by management.



Liquidity risk

Liquidity risk is the risk that the Group will encounter diffi culty in meeting the obligations associated with its fi nancial

liabilities that are settled by delivering cash or another fi nancial asset. The Group’s approach to managing liquidity is to

ensure, as far as possible, that it will always have suffi cient 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 suffi cient cash on demand to meet expected operational expenses for a period

of 60 days, including the servicing of fi nancial 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:

• $6.0 million and HK$3.0 million (2009: $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.

• $0.8 million (2009: $1.1 million) revolving credit facility that can be drawn down to meet short-term fi nancing

needs. The facility has a 30-day maturity that renews automatically at the option of the Group. Interest would be

payable at the 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 fi nancial 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 risk using derivatives. 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 profi t or loss.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confi dence and

to sustain future development of the business. The Board of Directors monitors the return on capital, which the Group

defi nes as result from operating activities divided by total shareholders’ equity, excluding non-controlling interests.

The Board of Directors also monitors the level of dividends to ordinary shareholders. There were no changes in the

Group’s approach to capital management during the year.

In addition, certain subsidiaries of the Company are Capital Markets Services (“CMS”) License holders registered by

the Monetary Authority of Singapore to conduct the regulated activity of REIT management and are subject to the

requirements under the Securities and Futures Act and Securities and Futures (Licensing and Conduct of Business)

Regulations (collectively referred to as “CMS regulations”). As defi ned in the applicable legislation under the CMS

regulations, these subsidiaries are required to maintain the “Base Capital” of $1,000,000 and ensure that their

“Financial Resources” shall not fall below 120% of the “Total Risk Requirement”.




Capital management (cont’d)

Apart from the above, certain subsidiaries of the Company are licensed corporations registered under the Hong

Kong Securities and Futures Ordinance and are subject to the capital requirements of the Hong Kong Securities and

Futures (Financial Resources) Rules (“FRR”). The minimum paid-up share capital requirement of these subsidiaries is

HK$5,000,000 and the minimum liquid capital requirement is the higher of HK$3,000,000 and the variable required

liquid capital as defi ned in the FRR.

The Group monitors its compliance with the requirements of both the CMS and FRR regulations regularly.

25. 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 offi ces 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.

26. 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$5.6 million (equivalent

to $7.2 million) (2009: US$14.4 million (equivalent to $20.2 million)) at 31 December 2010.

27. RELATED PARTIES

Transactions with key management personnel

Key management personnel compensation

Compensation payable to key management personnel comprised:


Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Within 1 year 1,901 2,130 - -

Between 1 to 5 years 4,006 638 - -

5,907 2,768 - -

Group

2010 2009

$’000 $’000

Short-term employee benefi ts 10,019 7,866

Post-employment benefi ts 152 112

10,171 7,978


27. RELATED PARTIES (cont’d)

Other related party transactions

Other than disclosed elsewhere in the fi nancial statements, signifi cant 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.

28. SUBSIDIARIES

Details of signifi cant subsidiaries are as follows:

Company

2010 2009

$’000 $’000

Equity investments at cost 1,744 1,782

Shareholder loans to subsidiaries 95,023 63,146

Less: Impairment loss (1,483) -

95,284 64,928

Name of subsidiaryCountry of

incorporation

Ownership Interest

2010 2009

% %

ARA Asset Management (Fortune) Limited (formerly known as ARA Asset Management (Singapore) Limited) (1) (2)

Republic of Singapore

100 100

ARA Trust Management (Suntec) Limited (1) Republic of Singapore

100 100

ARA Strategic Capital (Holdings) Pte Ltd (1) / (4) Republic of Singapore

- 75

ARA Asset Management (Prosperity) Limited (2) Hong Kong 100 100


Transaction value

2010 2009

$’000 $’000

Entities subject to common signifi cant infl uence:

- Acquisition and performance fee - 3,703

- Advisory fee - 1,151

- REIT management fees received/receivable 9,733 8,158

- Distribution received 369 176

- Operating lease expenses paid/payable 722 1,028



28. SUBSIDIARIES (cont’d)

(1) Audited by KPMG LLP, Singapore.

(2) Audited by other member fi rms of KPMG International.

(3) Not required to be audited by law of country of incorporation.

(4) The subsidiary is in the process of strike off and the last set of accounts prepared was up to 30 November 2010.

Name of subsidiaryCountry of

incorporationOwnership interest

2010 2009

% %

ARA Management Pte Ltd (1) Republic of Singapore 100 100

ARA Fund Management (Asia Dragon) Limited (1) Bermuda 100 100

ARA Managers (Asia Dragon) Pte Ltd (1) Republic of Singapore 100 100

Jadeline Capital Sdn Bhd (2) Malaysia 100 100

ARA Real Estate Investors I Limited (3) British Virgin Islands 100 100

ARA Investors II Limited (3) British Virgin Islands 100 100

ARA Real Estate Investors III Limited (3) British Virgin Islands 100 100

ARA Real Estate Investors IV Limited (3) British Virgin Islands 100 100

ARA Real Estate Investors V Limited (3) British Virgin Islands 100 100

ARA Managers (Harmony) Pte Ltd (1) Republic of Singapore 100 100

Suntec Singapore International Convention & Exhibition Services Pte Ltd (1) Republic of Singapore 100 100

APM Property Management Pte Ltd (1) Republic of Singapore 100 100

ARA-CWT Trust Management (Cache) Limited (1) Republic of Singapore 60 -


28. SUBSIDIARIES (cont’d)

KPMG LLP is the auditor of all signifi cant Singapore-incorporated and Bermuda-incorporated subsidiaries. Other

member fi rms of KPMG International are auditors of signifi cant foreign-incorporated subsidiaries except for subsidiaries

incorporated in The British Virgin Islands (“BVI”) which are not required to be audited under BVI laws. For this purpose,

a subsidiary is considered signifi cant as defi ned under the Singapore Exchange Limited Listing Manual if its net tangible

assets represent 20% or more of the Group’s consolidated net tangible assets, or if its pre-tax profi ts account for 20%

or more of the Group’s consolidated pre-tax profi ts.

The shareholders’ loan to subsidiaries are unsecured and interest-free with no specifi ed 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.



1 INTERESTED PERSON TRANSACTIONS

The aggregate value of transactions entered into by the Group with interested persons and their affi liates, as defi ned in

the SGX Listing Manual, are as follows:

2 USE OF IPO PROCEEDS

As at 31 December, the Group has utilised the net IPO proceeds of $75.5 million as follows:

3 MATERIAL CONTRACTS

Save for 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 fi nancial year as required to be reported

under Rule 1207(8) of the Listing Manual.

SUPPLEMENTARY INFORMATION(SGX Listing Manual disclosure requirements)

Aggregate value of all transactions conducted under a shareholders’ mandate pursuant to Rule 920 of

the SGX Listing ManualAggregate value of

all other transactions

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Name of interested person

Fortune REIT

- REIT management fees 9,733 8,158 - -

- Acquisition and performance fee - 3,703 - -

- Advisory fee - 1,151 - -

Mr Chiu Kwok Hung Justin

- Key person and strategic advisory services to ARA Asia Dragon Fund

- - 408 436

The Center (55) Limited

- Provision of offi ce space 2,639 - - -

Cosmo Best Limited(1)

- Advisory services to ARA Trust Management (Suntec) Limited

10,000 - - -

Company

2010 2009

$’000 $’000

Seed capital investment in the ARA Asia Dragon Fund 23,100 11,101

Strategic stake in REIT 27,200 27,200

Investment in interest bearing loan to a private fund 8,000 8,000

58,300 46,301

(1) A wholly-owned subsidary of Cheung Kong (Holdings) Limited.

The supplementary information above does not form part of the fi nancial statements.


Issued and fully paid-up capital : S$1,396,944

No. of issued shares (excluding treasury shares) : 698,471,997

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

List Of Twenty Largest Shareholders

SHAREHOLDERS’ INFORMATION As at 16 March 2011

Size of shareholdings No. of shareholders % No. of shares %

1 - 999 151 4.66 61,832 0.01

1,000 - 10,000 2,277 70.20 9,087,233 1.30

10,001 - 1,000,000 797 24.58 44,595,373 6.38

1,000,001 and above 18 0.56 644,727,559 92.31

T otal 3,243 100.00 698,471,997 100.00

No. Name No. of Shares %

1. JL Investment Group Limited 254,570,400 36.45

2. Cheung Kong Investment Company Limited 109,101,600 15.62

3. Citibank Nominees Singapore Pte Ltd 76,113,674 10.90

4. DBS Nominees Pte Ltd 74,162,212 10.62

5. HSBC (Singapore) Nominees Pte Ltd 36,690,200 5.25

6. United Overseas Bank Nominees 22,307,920 3.19

7. Raffl es Nominees (Pte) Ltd 17,241,000 2.47

8. DBSN Services Pte Ltd 16,280,837 2.33

9. Morgan Stanley Asia (Singapore) Securities Pte Ltd 14,796,600 2.12

10. DBS Vickers Securities (S) Pte Ltd 8,859,200 1.27

11. Yim Chee Chong 3,225,000 0.46

12. UOB Kay Hian Pte Ltd 2,671,600 0.38

13. Royal Bank of Canada (Asia) Ltd 2,319,600 0.33

14. DB Nominees (S) Pte Ltd 1,914,316 0.27

15. Lin Chiu-Nan 1,200,000 0.17

16. Low Geok Lin Judith 1,100,000 0.16

17. Phillip Securities Pte Ltd 1,093,400 0.16

18. Tang Wee Loke 1,080,000 0.15

19. Kim Eng Securities Pte. Ltd. 734,200 0.11

20. Gautam Kapoor 720,600 0.10

Total 646,182,359 92.51


SUBSTANTIAL SHAREHOLDERS AS AT 16 MARCH 2011

(As recorded in the Register of Substantial Shareholders)

Notes:

(1) Mr Lim Hwee Chiang John has an indirect interest in the 254,570,400 shares of the Company held by JL Investment Group Limited, which is wholly-owned

by him.

He is also deemed interested in the 1,000,000 shares held by Citibank Nominees Singapore Pte Ltd (as nominee of JL Philanthropy Ltd). The benefi ciary

of JL Philanthropy Ltd is JL Charitable Settlement and Mr Lim is the settlor of JL Charitable Settlement.

(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 16 March 2011, approximately 39.3% 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.

Name of Substantial Shareholders Direct Interest % Deemed Interest %

JL Investment Group Limited 254,570,400 36.45 - -

Lim Hwee Chiang John (1) 1,653,600 0.24 255,570,400 36.59

Cheung Kong Investment Company Limited 109,101,600 15.62 - -

Cheung Kong (Holdings) Limited (2) - - 109,101,600 15.62

Matthews International Funds 43,711,000 6.26 - -

Matthews International Capital Management, LLC - - 57,073,000 8.17

SHAREHOLDERS’ INFORMATION As at 16 March 2011


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of ARA ASSET MANAGEMENT LIMITED (the “Company”) will be

held at Room 325 and 326, Level 3, Suntec Singapore International Convention and Exhibition Centre, 1 Raffl es Boulevard,

Suntec City, Singapore 039593 on Thursday, 28 April 2011 at 11.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the fi nancial year ended 31

December 2010 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a fi nal tax-exempt (one-tier) dividend of S$0.025 per share for the fi nancial year ended 31 December 2010

(2009: S$0.025 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) Chiu Kwok Hung Justin (Resolution 3)

(ii) Lim How Teck (Resolution 4)

(iii) Cheng Mo Chi Moses (Resolution 5)

(iv) Colin Stevens Russel (Resolution 6)

Mr Lim How Teck will, upon re-election as Director of the Company, remain as a member of the Audit and Remuneration

Committees and Chairman of the Nominating Committee and will be considered independent for the purposes of Rule

704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

Mr Cheng Mo Chi Moses will, upon re-election as Director of the Company, remain as a member of the Audit Committee

and Nominating Committee and Chairman of the Remuneration Committee and will be considered independent for the

purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

Mr Colin Stevens Russel will, upon re-election as Director of the Company, remain as a member of the Audit, Nominating

and Remuneration Committees and will be considered independent for the purposes of Rule 704(8) of the Listing

Manual of the Singapore Exchange Securities Trading Limited.

4. To approve the payment of Directors’ fees of S$280,000 for the fi nancial year ending 31 December 2011, to be paid

quarterly in arrears (2010: S$240,000). (Resolution 7)

5. To re-appoint KPMG LLP as the Company’s Auditors and to authorise the Directors to fi x their remuneration.

(Resolution 8)

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 fi t, to pass the following resolutions as Ordinary Resolutions, with or without any modifi cations:

7. Share Issue Mandate

That pursuant to Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“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 fi t; 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

fi fty 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) 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

(4) 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 9)

8. 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 12 April 2011 (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 fi t; 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 (ii)] (Resolution 10)

9. 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 defi ned in the Letter to Shareholders and Depositors dated 12 April 2011 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 (iii)] (Resolution 11)

By Order of the Board

Yvonne Choo

Company Secretary

Singapore, 12 April 2011

Explanatory Notes to Resolutions to be passed –

(i) Ordinary Resolution 9 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.

(ii) Ordinary Resolution 10 proposed in item 8 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 12 April 2011 (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.

(iii) The Ordinary Resolution 11 proposed in item 9 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

the Letter.


Notes:

1. A Shareholder being a Depositor whose name appears in the Depository Register (as defi ned 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 offi ce of the Singapore Share Transfer Agent, Boardroom Corporate & Advisory Services

Pte. Ltd. at 50 Raffl es 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 offi cer or attorney.



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 9 May 2011 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 Raffl es Place #32-01, Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 9 May 2011 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 9 May 2011 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 28 April 2011 will be made

on 23 May 2011.

NOTICE OF BOOKS CLOSURE


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www.ara-asia.com

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SHangHai

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guangzHou

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Dalian

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nanjing

50-A, Nanjing International Finance Center1 Hanzhong RoadBaixia DistrictNanjing 210029ChinaTel: 8625 8477 5566Fax: 8625 8477 5567

Tianjin

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