Chairman’s Statement
On behalf of the Board of Directors, I am pleased to report a profitable year for the City Developments Group. The Group has posted a sterling performance with strong earnings powered by property development and hotels, and pre-tax profits crossing the $1 billion mark for the second consecutive year.

Group Performance
In spite of an uncertain global economy and overall market sentiments dampened by the deterioration of the Eurozone crisis in the second half of 2011, the Group is pleased to deliver a sterling set of results posting a profit after tax and non-controlling interests of $798.6 million for the year ended 31 December 2011 (Restated 2010: $784.0 million), without property fair value gains. Notably, this is the Group’s second consecutive year to surpass $1 billion in its pre-tax profits.

The credible results were primarily due to better performance from the Group’s property development business segment and increased contribution from its hotel operations. At the pre-tax profit level, property development business segment remains the biggest contributor. Hotel operations also reported a 37.8% increase in pre-tax profit contribution as compared to FY 2010. This was due to gain recognised from the sale and leaseback of Studio M Hotel to CDL Hospitality Trusts (CDLHT) coupled with the improved performance of hotels located in the Group’s main gateway cities.

The basic earnings per share stood at 86.4 cents (Restated 2010: 84.8 cents).

For the fourth quarter ended 31 December 2011 (Q4 2011), the Group’s attributable profit after tax and non-controlling interests was $163.2 million (Restated Q4 2010: $241.0 million). This was primarily due to lower profits recorded in the rental properties segment as compared to Q4 2010 which had included the gain recognised in Q4 2010 from the sale of the Group’s strata units in Chinatown Point. Notwithstanding this, it should be noted that the pre-tax contribution of $143.3 million from the property development segment for Q4 2011 is five times that of the corresponding period last year (Restated Q4 2010: $28.8 million).

As at 31 December 2011, the Group’s net gearing ratio improved to 21% (2010: 29%). Had the Group factored in the fair value gains on investment properties, the net gearing ratio would be driven down further to 15.0%. The interest cover of the Group had remained relatively constant at 21.8 times (Restated 2010: 21.3 times).

As a result of the solid performance achieved for 2011, the Board is pleased to recommend the payment of an additional special ordinary dividend of 5.0 cents per share, on top of its ordinary dividend of 8.0 cents per share. Together with the special interim ordinary dividend of 5.0 cents per share paid on 28 September 2011, the total dividend proposed and paid/payable by the Group to its ordinary shareholders for the year under review amounts to 18.0 cents per share.

The Singapore economy grew 3.6% on a year-on-year basis in Q4 2011 as compared to 6.0% growth in Q3 2011. On a seasonally-adjusted quarter-on-quarter annualised basis, the economy contracted by 2.5% in Q4 2011, compared to the 2.0% gain in the previous quarter. For the whole of 2011, the economy expanded by 4.9%, as compared to the expansion of 14.8% in 2010.

The Singapore Government announced further measures on 7 December 2011 with the introduction of an Additional Buyer’s Stamp Duty (ABSD) ranging from 3% to 10% on certain categories of residential property purchases made by different classification of buyers. The ABSD is imposed over and above the current Buyer’s Stamp Duty, and will apply to the purchase price or market value of the property (whichever is higher). The measures are to pre-empt any possible escalation of property prices which may lead to a property bubble forming, so as to maintain a stable and sustainable property market. Following the introduction of ABSD, for residential sites purchased with effect from 8 December 2011, developers will need to satisfy certain conditions for the remission of ABSD, including the development and sale of all the units in the new project within 5 years, otherwise the ABSD becomes payable.

Demand for new homes moderated to 3,603 units in Q4 2011 compared to the 4,262 units sold in the previous quarter. In December, sales volume was the lowest as buying activity slowed in the run up to the festive season and in the wake of the new property cooling measures introduced.

Overall, for the year 2011, the Singapore residential market proved to be resilient due to several factors such as high Singapore dollar liquidity, a low interest rate environment, no shortage of housing loans, lack of more stabilised investment products in the market and property investment remaining a good hedge against inflation. Developers sold a total of 15,904 uncompleted and completed units, compared with an all-time high of 16,292 units in 2010.

Urban Redevelopment Authority (URA) data indicated that the Residential Property Price Index (PPI) of 206.2 continued to surpass the previous record of 205.7 set in the preceding quarter. Overall prices of private residential properties increased by 0.2% quarter-on-quarter in Q4 2011, compared with a 1.3% quarter-on-quarter increase in the previous quarter. This was the 9th consecutive quarter in which the rate of increase in private housing prices had moderated.

Numerous new private residential property launches in 2011 witnessed healthy take-up. During the year, the Group successfully launched five residential projects.

H2O Residences, a 521-unit riverfront development nestled in the heart of Sengkang New Town, sold 85% of the 300 units launched during its preview in March 2011. To date, the whole project is about 73% sold.

In April 2011, Hedges Park, a joint venture 501-unit condominium located in the tranquil estate at Flora Drive, off Changi/Pasir Ris, received strong demand with over 130 units out of 200 units released sold during its weekend launch. To date, 343 units have been sold.

Situated in the heart of the prestigious District 11, Buckley Classique, the Group’s exclusive 64-unit freehold development, with a uniquely conserved colonial bungalow as its clubhouse, was launched in June 2011. It is now over 90% sold.

Response to Blossom Residences – a 602-unit Executive Condominium (EC) located along Segar Road, just next to Segar LRT station which the Group launched in July 2011 has been good. To date, about 82% the project has been sold.

Similarly, The Palette, a joint venture 892-unit condominium, located in a residential enclave at Pasir Ris Grove and within walking distance of Pasir Ris MRT station and White Sands Shopping Mall, met with enthusiastic response with 80% of the 450 units released snapped up during its launch in November 2011. 530 units out of 600 units released have been sold to date.

Other ongoing projects continued to sell well. The 642-unit joint venture development – NV Residences in Pasir Ris is now 98% sold.

For the year 2011, the Group, along with its joint venture associates, sold a total of 1,818 units with sales value of $1.755 billion.

During the period under review, profits were booked in from several projects such as Hundred Trees, Volari and 368 Thomson. Profits were also booked in from joint venture projects such as NV Residences, Tree House and The Gale.

However, no profit was booked for The Glyndebourne, H2O Residences, Buckley Classique, Blossom Residences and Hedges Park, even though these developments have been substantially sold as the construction of these projects are still in early stages.

The Group was recently successful in another two Government Land Sales (GLS) tenders. In December 2011, a joint venture comprising CDL, Hong Leong Holdings Limited and Hong Realty (Private) Limited, was successful in its bid of $396 million for a prime 99-year leasehold high-rise residential site located along Alexandra Road, near the Redhill MRT station.

In January 2012, a joint venture between CDL, Hong Leong Holdings Limited and TID Pte. Ltd., successfully bid $388 million for a 99-year leasehold high-rise residential site located along Mount Vernon Road, off Bartley Road. The consortium is familiar with this locale, having won an earlier tender site in March 2011, which is just diagonally across. This earlier site, located along Bartley Road and Lorong How Sun is adjoining the Bartley MRT station and will be developed into a 702-unit condominium known as Bartley Residences.

Overall, the Group was successful in a total of six public land tenders launched for sale through the 2011 GLS programme. It has since launched The Rainforest EC site at Choa Chu Kang Drive and Bartley Residences in January and February 2012 respectively. For 1H 2012, the Group is planning to launch the mixed hotel and residential development at Robertson Quay and a landed housing site at Serangoon Garden Way in the popular Serangoon Garden estate area. The Alexandra Road and Mount Vernon Road sites will be considered for launch later.

The Singapore office market continued to expand going into 2011, riding on the momentum from 2010. However, the office demand started moderating in 2H 2011 due to the economic and financial uncertainties in the global economy. URA statistics showed that the rental index for office space in Central Area increased by 0.5% quarteron-quarter in Q4 2011, compared to 0.8% increase in Q3 2011. The islandwide price index for office space increased by 1.0% in Q4 2011, lower than the 3.7% increase in the previous quarter. Total available office space as at Q4 2011 remained stable at 7.23 million sq m.

The Group’s office portfolio continues to enjoy healthy occupancy of 93.5% as compared to national average of 88.7%.

Millennium & Copthorne Hotels plc (M&C), which the Group has a 55% interest, hit a record in terms of revenues and profits in 2011 largely due to a strong hotel operating performance and significant gains from asset management activities. M&C’s net profit after tax and non-controlling interests was £40.4 million in Q4 2011 (Q4 2010: £31.5 million), an increase of 28.3% quarter-on-quarter, and £160.9 million (2010: £96.2 million) for FY 2011, a year-on-year increase of 67.3%. Basic earnings per share increased by 65.0% to 51.0p (2010: 30.9p).

M&C’s global RevPAR (in constant currency terms) grew by 5.8% to £64.81, approximately S$130.31 (2010: £61.28, approximately S$123.22), driven primarily by an increase in room rate. On a like-for-like basis, RevPAR increased by 5.5% as hotels in gateway cities performed very well, 8.8% increase in London, 6.1% in Singapore (excluding Copthorne Orchid for the full year and Studio M for the first half of the year) and 6.1% in New York. With the exception of the UK hotels outside of London, RevPAR increased in every region. The Rugby World Cup in New Zealand also helped Australasia increase RevPAR by 5.3%, excluding the impact of three hotel closures in Christchurch due to earthquake damage in February 2011.

During the year, M&C’s key asset management initiatives included the completion of the sale of Studio M in Singapore to CDLHT in May 2011 as well as the completed sale of land adjacent to the Grand Millennium Kuala Lumpur in August 2011, which contributed to a pre-tax profit of £17.4 million and £34.0 million respectively.

Additional considerations that affected year-on-year comparisons include the closures of Copthorne Orchid on 1 April 2011 for The Glyndebourne project and three Christchurch hotels following the New Zealand earthquake, consolidation of the results of the Grand Millennium Beijing since November 2010 (when M&C’s stake increased from 30% to 70%), the opening of Studio M towards the end of the Q1 2010 and its subsequent sale and leaseback to the REIT in May 2011 as well as expiry of the lease in Stuttgart in August 2011 (which included a £10.1 million year-on-year impact of the release of a dilapidation provision).

M&C’s financial position strengthened during the year with net debt falling to £100.2 million (2010: £165.7 million) while gearing reduced to 4.8% (2010: 8.5%). As at 31 December 2011, M&C had cash reserves of £332.2 million (2010: £251.9 million) and total undrawn committed bank facilities of £184.3 million (2010: £152.4 million). Most of the facilities are unsecured with unencumbered assets representing 87.3% of M&C’s fixed assets and investment properties.

One of M&C’s highlights of the year was its ability to seize a rare opportunity to secure a prime-location land in the Ginza district of Tokyo, Japan. The total cost for land site and development of this property is about ¥14.56 billion (approximately S$250.2 million based on S$1 = ¥58.2 as at 27 September 2011). There are plans to construct a 325-room deluxe hotel to be completed by 2014. An agreement has also been entered into with Mitsui Fudosan Co., Ltd (MFC) – Japan’s largest real estate group in terms of revenue, setting out the indicative principal terms by which MFC is granted a fixedterm master lease of the hotel. Apart from M&C, the Group also took a minority stake in this prime project, through its wholly-owned subsidiary, Citydev Venture Holdings Limited. CDL’s effective interest in the property is 29.99% (excluding the interest held through the M&C group), whilst M&C’s effective interest in this property is 70.01%. The aggregate investment for CDL is about ¥1.12 billion (approximately S$19.2 million).

The development of The Glyndebourne (former Copthorne Orchid Hotel) started in Q2 2011. 144 of the 150 units released have been sold as at 20 February 2012 with a sales value of $522.5 million, representing a price of over $2,000 per square foot. Sales proceeds collected to date total $138.2 million, representing approximately 27% of the sales value.

As part of M&C’s efforts to enhance its key assets for organic growth, it completed a number of hotel refurbishments in 2011. In Q2, the first phase renovation of 249 rooms at Millennium Seoul Hilton was completed, which resulted in its quarterly RevPAR increasing by 8.4% to £113.10 (approximately S$227.41) in the last three months of the year. The refurbishment of all 331 guestrooms at Orchard Hotel Singapore’s Claymore Wing was also completed at the end of Q3. The renovation of the ballroom at Grand Hyatt Taipei has also been completed. It is now undergoing re-cladding of its facade and will commence renovation of the guest rooms in Q3 2012. M&C is also planning to reposition some of its key hotels. It is close to awarding construction contracts for the 153-room west wing refurbishment at the Millennium UN Plaza, with completion expected by September 2012. Plans to give Millennium Mayfair a complete makeover with major refurbishment and reconfiguration, leaving just the structural facade, are currently being developed, to establish this key asset as M&C’s global flagship hotel.

As reported previously, the collective sales agreement with other unit-holders in the Tanglin Shopping Centre, Singapore expired on 26 September 2011 without any acceptable offer to the sales committee. Together with other unit-holders, M&C will re-consider its position at a later date.

In November 2011, First Sponsor Capital Limited (FSCL), in which M&C has a 39.3% effective interest, successfully tendered for two parcels of land (about 270,500 sq m) in Chengdu at an all in net cost of approximately US$130 million, which it plans to develop into a residential and commercial development, including a hotel and convention centre.

FSCL’s City Spring project – its first development in Chengdu is almost sold out. As at 12 February 2012, 711 out of 726 residential units have been sold either under sale and purchase or option agreements. 98.6% of the sales proceeds have been collected for those residential units sold under sale and purchase agreements. In addition, 527 of the 709 commercial units launched for sale in July 2011 have been sold either under sale and purchase or option agreements with 65.1% of the sales proceeds having been collected. Revenue and profit recognition requirement for the residential units is expected to be taken into account in 2012. Proceeds from the residential and commercial sales will finance the development of a 195-room hotel.

In 3 May 2011, M&C completed the sale and leaseback of the Studio M Hotel to the REIT associate, CDLHT, in which it has 35.2% interest, for a cash consideration of $154.0 million. This gave rise to a total realised pre-tax profit from the disposal of $35.4 million. CDLHT is continuing its strategy to opportunistically pursue acquisitions while maintaining a disciplined approach to investment activities.

M&C opened two hotels in the Middle East – Millennium Plaza Hotel Dubai and Millennium Resort Mussanah, both under management contracts. Globally, M&C has in pipeline 30 hotels offering 6,607 rooms, which are mainly management contracts.

The Government anticipates that the Singapore economy will grow by between 1.0% and 3.0% in 2012. Challenging and volatile macroeconomic conditions stemming from the European debt crisis, partisan politics in the lead-up to the US presidential elections and fiscal austerity are likely to impact external demand.

In January 2012, the Group unveiled The Rainforest – the first EC launch of the New Year. This joint venture 466-unit premier development is ideally located along Choa Chu Kang Avenue 3, just 5 minutes’ walk to Choa Chu Kang MRT station and amenities such as Lot One Shoppers’ Mall. It provides an alluring option for homebuyers in search of quality affordable housing, near an MRT station. The launch was well received with over 75% of the project sold in about a month.

On 21 February 2012, the Group’s joint venture development, the 702-unit Bartley Residences, was launched. Located next to Bartley MRT station, the project was well received with 170 units out of 240 units launched sold to-date.

The Group is planning to launch another two projects in the 1H 2012. The first is a mixed development at the trendy Robertson Quay along Singapore River. The project will accommodate a 300-room hotel and 70 exciting lifestyle apartments and loft units. The second project is a 96-unit terrace housing development at Serangoon Garden Way, located within a well-established mature landed estate with excellent amenities and services. Given the limited supply of landed homes in Singapore, we expect this development to be well received.

To continue to ensure that there is adequate supply of land for the private housing to meet demand from homebuyers, the Government had announced in December 2011 that the 1H 2012 GLS Programme will comprise 14 Confirmed List sites, which can yield about 7,000 residential units. This is slightly less than the 8,100 units in the 2H 2011 Confirmed List. Following two years of strong sales take-up and expectations of a slowing economy, developers will likely remain selective on land bids with keen interest in sites located at areas earmarked as future growth districts as well as those near existing or future MRT stations and other amenities which are expected to continue to attract buyers. More recently, residential properties within mixed-used developments which offer both transport convenience as well as a shopping centre at its doorsteps have gained popularity, commanding premium prices.

The South Beach development is making good progress and construction of the diaphragm wall and piling is now 90% completed. Sited on a prime location right next to Esplanade MRT station and close to City Hall MRT station, this iconic development designed by world-renowned firm Foster + Partners will feature two 45-storey and 34-storey towers plus four conserved blocks comprising hotel, residential, office and retail space. This mega mixed-use project will offer some 49,000 sq m of lettable office space, 7,900 sq m of retail/F&B area which will be integrated with the conserved buildings, a 2,700 sq m City Club at the former NCO club building, about 651 hotel rooms and 189 premier residential apartments.

Awarded the land tender in 2007 in part due to its revolutionary modern and environmentally sustainable architectural design, this has been further articulated in the extensive incorporation of eco-features including solar panels, a unique canopy design for microclimate control and rainwater harvester for irrigation. This exceptional green development has just received two Green Mark Platinum Awards by the Building and Construction Authority (BCA) for both its commercial and residential components. This project is on track to be completed in 2015.

The 240-room W Singapore Sentosa Cove – Singapore’s only marina hotel with berths at its doorstep, catering to guests with luxury crafts, is expected to open for business in 2H 2012. The debut of the renowned W hotel brand will complement the Cove’s positioning as one of the most affluent lifestyle precincts. This new hotel concept is well positioned to tap into a growing market of well-heeled tourists and ‘staycationers’ in search of a unique hospitality experience. Sentosa – with its key attractions such as Resorts World Universal Studios theme park and upcoming developments like Marine Life Park (one of the world’s largest oceanarium) have made the island an increasingly popular destination for tourists and locals. The new hotel will provide additional hospitality and F&B facilities on the island, to cater to the growing demand.

The Group had stopped marketing The Residences at W Singapore Sentosa Cove due to the subdued market sentiments for high-end developments. This is the only residences in the Cove that will have an adjoining retail element that will comprise of an exciting array of specialty shops and trendy F&B outlets. With no more residential land for sale or tender within the Cove and no more sites for hotels to be built on Sentosa, the Group is confident that its integrated Quayside Isle project (comprising the residences, the hotel and retail promenade), is a prized jewel in Sentosa Cove. It expects that once the hotel is operational and with the upcoming major developments in Sentosa completed, Sentosa and the Cove will be completely transformed with increased buzz and vibrancy, and the full potential of this integrated development with value appreciation will be realised.

Besides the Group’s diversification through the ownership and management of its over 100 hotel portfolio, the Group continues with its expansion strategy in select markets globally where it views with good potential.

In January 2012, the Group acquired indirect interests in a retail and hotel development located in the commercial area of Patong, Phuket Island in Thailand, known as the Jungceylon Shopping Mall and Millennium Resort Patong, and the other, a retail development at Sukhumvit, Bangkok, Thailand with an estimated net lettable area of about 3,000 sq m (approximately 32,292 sq ft), known as Millennium Mall, which is currently under construction and expected to complete within the 1H 2012. The 4-storey Jungceylon Shopping Mall, with an estimated net lettable area of 63,000 sq m (approximately 678,000 sq ft), is the largest shopping complex on Phuket Island, within walking distance to Patong Beach and in the vicinity of other 4-star/5-star hotels in the Patong Beach area. Millennium Resort Patong Phuket comprises 418 rooms with complete facilities to support both corporate travellers and holidaymakers and is currently operated and managed by the Group’s hotel arm, M&C. The retail is also enjoying good yields. With this acquisition, combined with the Group’s Singapore retail assets, it has now amassed about 1.26 million sq ft of lettable retail space.

CDL China Limited, a wholly-owned subsidiary of the Group, is developing an iconic design for its 43,000 sq m (approximately 463,000 sq ft) luxury residential development at Eling Hill in Chongqing, western China. It is currently engaged in feedback sessions with the Chongqing planning authorities to further fine-tune the design, ensuring a world class project that will blend in with the historic and delicate surroundings of Eling Park. Construction of the planned luxury units is expected to commence in the later part of this year.

Following CDL China’s successful land acquisition in July 2011 of a prime site in Suzhou with permissible GFA of 295,455 sq m (approximately 3.2 million sq ft), it has built up a strong team in Suzhou and is close to completing the land title transfer from the government. It will shortly be selecting an appropriate architect for this prized land parcel which will comprise about 750 high-end residential apartments, an office tower, SOHO units, a retail mall and a luxury hotel. Genway Housing Development Group Co., Ltd, an experienced China state-owned enterprise that has developed over 7 million sq m of projects in Suzhou, has since taken a 30% stake in this project and will play a valuable supporting role to CDL China’s development efforts in Suzhou.

In early January 2012, CDL China successfully acquired a prime site with GFA of 108,686 sq m (approximately 1.2 million sq ft) in the heart of Yuzhong District, the central district of Chongqing municipality. The site, located in a prominent area known as Huang Huayuan, is zoned 80% residential and 20% commercial and was acquired for RMB540 million (S$112 million). It boasts unobstructed views of the scenic Jialing River and is right next to a major light rail station, which is only one stop away from the epicentre of Chongqing’s Central Business District, Jiefangbei. Directly across the site is the top secondary school in Chongqing – Bashu Middle School. The initial plan is to build around 900 residential apartments and a commercial complex. This marks the third acquisition for CDL China in 13 months.

Urbanisation remains an important pillar of China’s economy, especially in second-tier cities, and it is estimated by research analysts that this will generate several billion sq m of incremental demand over the next decade as over a 100 million people migrate to urban locations.

The property cooling measures in China have enabled the Group to find opportunities to enter the market by successfully tendering for prime land at reasonable prices. The Group believes that the cooling measures are temporary, aimed at helping to stabilise the property market.

The Group will continue to build its land bank in good locations as it is confident of the medium to long-term growth prospects in China. The Board has approved additional funds of $500 million (on top of the initial seed funding of $300 million allocated in August 2010) for CDL China to capitalise on further acquisition opportunities that may arise.

With a 49-year track record for being one of Singapore’s premier developers, the Group intends to draw upon its expertise towards developing a premium and sustainable brand in China.

M&C’s 2011 performance clearly shows the success of the owner/operator strategy that has been its hallmark since 1996. M&C will continue to deploy this strategy in the current year, exploiting asset management opportunities and managing the operation of its hotels in a disciplined, analytical, entrepreneurial and profitable manner thereby optimising total short, medium to longterm returns for shareholders.

Improving customer service and driving sales through enhanced yield management and cross-regional collaboration will be the key focus in 2012. M&C is implementing plans to improve trading performance in hotels that are currently generating weaker returns, especially its hotels in the US that are not located in gateway cities.

Refurbishment of well located properties such as Millennium Seoul Hilton, which has already yielded trading benefits post its refurbishment work, will continue over the next two years, as M&C will enhance the yields of these hotels for organic growth. These and other asset management initiatives will help M&C sustain and build financial performance. M&C’s strong balance sheet places it in an enviable position that will allow it to seize opportunities quickly.

Although there are signs that the US market is improving slowly, Europe still faces a difficult period ahead. However, M&C does not anticipate significant declines in trading. On a like-for-like basis, M&C’s RevPAR in the first six weeks of this year increased by 3.4% with London increasing by 10.6%, Singapore (like-for-like excluding Copthorne Orchid) increasing by 8.9% and New York decreasing by 1.6%, although the performance in the first six weeks is not indicative for the year.

Group Prospects
2012 is expected to be another challenging year for many businesses in light of a slowing economy and global economic uncertainties.

For property development, while the sales volume for new property launches is still relatively strong, the Group is cognizant that market conditions could be affected by the global economic conditions in the months ahead. With about 90% home ownership rate in Singapore, the real estate sector is an important fabric of the society and a pillar for the economy. The Group is confident that the Government will review its various property cooling measures when needed, with the aim of striking the necessary balance of achieving a sustainable property market, with a medium to long-term view.

The Group has always adopted a strategic land acquisition policy. Its healthy balance sheet and landbank provide the Group with greater flexibility in determining its project launches and pricing strategy. It will also carefully select the appropriate type of developments to launch in a timely manner, mindful of buyers’ appetite and demand.

For the hotel operations, the Group will focus on generating income from its diversified portfolio of hotels. While some regions may face challenges due to austerity drives, hotels particularly in cities with key events such as London which is the host city of the upcoming Olympics, the Queen’s Diamond Jubilee and Farnborough International Airshow, and M&C’s Asia operations are expected to continue to perform well.

The office sector is expected to remain steady as Singapore continues to be a hub for this emerging region. Notwithstanding possible changes in the market conditions, the Group’s rental properties are expected to remain stable, as it has a diversified portfolio of investment properties in various locations, catering to different price points. Overall, the yields for the Group’s properties have been high, given its relatively low book cost.

In the current year, the Group’s results are expected to remain profitable in view of its balanced portfolio of assets, strong balance sheet and prudent management.

On behalf of the Board of Directors, I would like to express our heartfelt appreciation to our stakeholders, including our shareholders, customers and business associates, for their continued support of the Group. I also take this opportunity to extend a warm welcome to Mr Tan Poay Seng who joined the Board on 2 February 2012 and to thank Mr Chee Keng Soon who agreed to take on the role of Lead Independent Director with effect from 28 February 2012. I also wish to formally place on record our sincere appreciation to Mr Han Vo-Ta, who will be retiring from the Board at the forthcoming Annual General Meeting, for his valuable contribution to the Group for more than 20 years. My appreciation also goes to my fellow Directors for their invaluable advice and guidance during the year and to the Management and staff for their unwavering dedication and commitment in the past year.


Executive Chairman

29 February 2012