Operations&financial review

Cash Flows and Liquidity
Operating cashflow improved for the financial year ended 31 December 2005 by S$152.5 million. This is an increase of S$35.6 million over the operating cashflow of S$116.9 million in the preceding financial year. The increase was mainly due to the increased full-year contribution from Plaza Singapura.

Operating Activities
CMT and its associate demonstrated their strength in initiating pro-active asset management and leasing strategies, innovative asset enhancement initiatives and yield accretive acquisitions, which resulted in the remarkable improvement of 34.9 percent to the net property income for the financial year ended 31 December 2005.

Investing Activities
CMT and its associate continued with the acquisition strategy and increased the number of properties in the portfolio from five to nine with the acquisitions of Sembawang Shopping Centre, Hougang Plaza Units, Jurong Entertainment Centre and Bugis Junction. With the new acquisitions and asset enhancement initiatives, CMT and its associate were able to improve on their performance over 2004.

Financing Activities
CMT and its associate constantly monitor the cash position and level of borrowings with the view of enhancing value by locking-in sizable borrowings at fixed low interest rates with medium-term tenures.

With the acquisitions of the four new properties in the financial year ended 31 December 2005, borrowings of S$433 million were raised in October 2005 through Silver Maple to:

(1) Part-finance the acquisition of Bugis Junction and Jurong Entertainment Centre; and
(2) Part re-finance the short-term borrowing of S$129.8 million that was taken in the second quarter of 2005 in the acquisitions of Sembawang Shopping Centre and Hougang Plaza units.

In addition, there is sufficient short-term revolving credit facility available to meet any short-term liquid requirements.

Cash and Cash Equivalents
As at 31 December 2005, the value of cash and cash equivalents stood at S$39.1 million, compared with S$47.2 million as at 31 December 2004, mainly due to the change in the distribution policy to a quarterly basis in the financial year ended 31 December 2005 from a half-yearly basis in the financial year ended 31 December 2004.

ACCOUNTING POLICIES

The financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice (RAP) 7 ‘Reporting Framework for Unit Trusts’ issued by the Institute of Certified Public Accountants of Singapore, and the applicable requirements of the Code on Collective Investment Schemes (the CIS Code) issued by the Monetary Authority of Singapore (MAS) and the provisions of the Trust Deed.

In 2005, CMT adopted the revised RAP 7 ‘Reporting Framework for Unit Trusts’ issued in May 2005 and the effects of adopting this revised RAP in 2005 are:

The adoption of principles in FRS 28 (revised) ‘Investment in Associates’ resulted in the presentation of the financial position, results, movements in Unitholders’ funds and cash flows of CMT and its associate in the financial statements in addition to those of CMT.
The adoption of principles of FRS 39 ‘Financial Instruments: Recognition and Measurement’ resulted in CMT and its associate measuring our derivative financial instruments as assets or liabilities at fair values. Previously, derivative financial instruments were not recorded on the balance sheet. Where a derivative or non-derivative financial instrument is an effective hedge in a cash flow hedge relationship, the change in fair value of the hedging instrument relating to the effective portion is recorded in equity. The effect of the adoption of FRS 39 on the results of CMT and its associate for the financial year ended 31 December 2005 is not significant.


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INTRODUCTION MARKET OVERVIEW OPERATIONS & FINANCIAL REVIEW	FINANCIAL REVIEW
	DEPT CAPITAL INFORMATION AS AT 31 DEC 2005 S$MILLION Cash Management CMT and its associate take a proactive role in monitoring their cash and liquid reserves to ensure adequate funding is available for distribution to the Unitholders as well as to meet any short-term liabilities. Funding and Borrowings Under a facility agreement between Silver Maple and CMT, Silver Maple granted CMT a total facility of S$1,187.0 million in the financial year ended 31 December 2005, an increase of S$483.0 million over S$704.0 million granted for the financial year ended 31 December 2004. This comprises a term loan of S$1,065.0 million and a revolving credit facility of S$122.0 million. As at 31 December 2005, CMT has drawn down S$1,065.0 million of the term loan and S$28.0 million of the revolving credit facility. Total borrowings of CMT stood at S$1,093.0 million as at 31 December 2005, an increase of S$433.0 million compared to S$660.0 million as at 31 December 2004. The increased borrowings were mainly due to the debt financing taken to part-finance/re-finance the acquisitions of Bugis Junction, Hougang Plaza Units, Sembawang Shopping Centre and Jurong Entertainment Centre. Fees and costs of S$3.8 million incurred in the S$433.0 million borrowing was amortised over the tenor of the loan of seven years. As a result, the gearing of CMT and its associate increased to 31.6 percent at 31 December 2005 from 28.5 percent as at 31 December 2004. Average cost of borrowing for the financial year ended 31 December 2005 was 3.0 percent per annum.	Cash Flows and Liquidity Operating cashflow improved for the financial year ended 31 December 2005 by S$152.5 million. This is an increase of S$35.6 million over the operating cashflow of S$116.9 million in the preceding financial year. The increase was mainly due to the increased full-year contribution from Plaza Singapura. Operating Activities CMT and its associate demonstrated their strength in initiating pro-active asset management and leasing strategies, innovative asset enhancement initiatives and yield accretive acquisitions, which resulted in the remarkable improvement of 34.9 percent to the net property income for the financial year ended 31 December 2005. Investing Activities CMT and its associate continued with the acquisition strategy and increased the number of properties in the portfolio from five to nine with the acquisitions of Sembawang Shopping Centre, Hougang Plaza Units, Jurong Entertainment Centre and Bugis Junction. With the new acquisitions and asset enhancement initiatives, CMT and its associate were able to improve on their performance over 2004. Financing Activities CMT and its associate constantly monitor the cash position and level of borrowings with the view of enhancing value by locking-in sizable borrowings at fixed low interest rates with medium-term tenures. With the acquisitions of the four new properties in the financial year ended 31 December 2005, borrowings of S$433 million were raised in October 2005 through Silver Maple to: (1) Part-finance the acquisition of Bugis Junction and Jurong Entertainment Centre; and (2) Part re-finance the short-term borrowing of S$129.8 million that was taken in the second quarter of 2005 in the acquisitions of Sembawang Shopping Centre and Hougang Plaza units. In addition, there is sufficient short-term revolving credit facility available to meet any short-term liquid requirements. Cash and Cash Equivalents As at 31 December 2005, the value of cash and cash equivalents stood at S$39.1 million, compared with S$47.2 million as at 31 December 2004, mainly due to the change in the distribution policy to a quarterly basis in the financial year ended 31 December 2005 from a half-yearly basis in the financial year ended 31 December 2004. ACCOUNTING POLICIES The financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice (RAP) 7 ‘Reporting Framework for Unit Trusts’ issued by the Institute of Certified Public Accountants of Singapore, and the applicable requirements of the Code on Collective Investment Schemes (the CIS Code) issued by the Monetary Authority of Singapore (MAS) and the provisions of the Trust Deed. In 2005, CMT adopted the revised RAP 7 ‘Reporting Framework for Unit Trusts’ issued in May 2005 and the effects of adopting this revised RAP in 2005 are: The adoption of principles in FRS 28 (revised) ‘Investment in Associates’ resulted in the presentation of the financial position, results, movements in Unitholders’ funds and cash flows of CMT and its associate in the financial statements in addition to those of CMT. The adoption of principles of FRS 39 ‘Financial Instruments: Recognition and Measurement’ resulted in CMT and its associate measuring our derivative financial instruments as assets or liabilities at fair values. Previously, derivative financial instruments were not recorded on the balance sheet. Where a derivative or non-derivative financial instrument is an effective hedge in a cash flow hedge relationship, the change in fair value of the hedging instrument relating to the effective portion is recorded in equity. The effect of the adoption of FRS 39 on the results of CMT and its associate for the financial year ended 31 December 2005 is not significant.

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