INTRODUCTION | INGENIOUS VALUE CREATION & GROWTH STRATEGIES | IN CONVERSATION | INSIGHTS INTO GROWTH | INSPIRING LEADERSHIP

INTEGRATING PEOPLE & SOCIETY | INVESTOR RELATIONS | IN REVIEW | INCREASING DOMINANCE | IN DETAILS

INTRODUCTION

MARKET OVERVIEW

OPERATIONS & FINANCIAL REVIEW

Trade Sector Analysis
The Manager’s active leasing efforts and retail management consciously aim to maintain a well-balanced trade mix in CMT’s malls that is not overly reliant on any one particular segment of the trade sector. Food & Beverage (F&B) outlets/food courts continue to be the main contributor to gross rental income as well as the largest user of space. The fashion trade is the second largest contributor to the gross rental income at 20.8 percent, while occupying only 8.2 percent of the NLA.

This is very much in line with market forces in Singapore where F&B and fashion continue to drive retail sales.

Increased Shopper Traffic
Both Tampines Mall and Junction 8 recorded in excess of 20 million shoppers in 2005. This was a record-breaking achievement for CMT as none of our malls have previously reached these numbers. We will continue to improve the trade mix, organise interesting events and enhance the shopping ambience to further increase the shopper traffic to our malls.

Advertising and Promotions
Many of our activities are organised across a number of the malls so as to achieve both synergy and cost efficiency.

At key festive periods such as Lunar New Year and Christmas, the malls use a single theme, and share promotional mechanics and communications. During the June and December school holidays, we arranged for popular cartoon characters such as Power Rangers, Wallace & Gromit, Thomas the Tank and Baby Looney Tunes to appear at the different malls. Premiums bearing their pictures were also produced as gift-with-purchases for our shoppers to take home for their children. In addition, during the Mid-Autumn Festival, Mooncake Fairs were held in IMM, Junction 8 and Tampines Mall with participation from over 30 hotels, restaurants, cake houses and confectioneries.

Activities for other special common occasions are targeted at the shoppers in individual malls. In May 2005, for example, we hosted different competitions in commemoration of Mother’s Day: ‘Most Beautiful Mum’ at Junction 8, ‘Most Beautiful Mum-to-be’ at Plaza Singapura, ‘Classic Mum’ at IMM, and ‘Mother-&-Child Lookalike’ at Tampines Mall. These pageants and contests drew more than 1,000 entries.

Risk Management

Operational Risk
CMT and its associate have integrated risk management into the day-to-day activities in all functions. These include planning and control systems, operational guidelines, IT systems and operational, reporting and monitoring procedures involving the executive management committee and Board.

Investment Risk
One of the main sources of growth for CMT and its associate is the acquisition of properties. The risk involved in such investment activities is managed through a rigorous set of investment criteria which includes accretion yield, internal rate of return, growth potential and sustainability, location and specifications.

Interest Rate Risk
With the current global trend of rising interest rates, CMT and its associate proactively seek to minimise the level of interest rate risk by locking in most of our borrowings in fixed interest rates. As at 31 December 2005, CMT and its associate have locked in 97.4 percent of CMT’s borrowings at fixed rates and only the remaining 2.6 percent is at floating rates.

Foreign Exchange Risk
As the operations of CMT and its associate are currently based locally in Singapore, there is little or no foreign exchange exposure. CMT and its associate borrow in Singapore dollars from a special purpose vehicle, Silver Maple Investment Corporation Ltd (Silver Maple). Silver Maple issues foreign denominated notes and is able to obtain attractive spread by borrowing from the overseas markets.