Page 2 of 3 Strengthening the Balance Sheet   In 2003, we refinanced 6 Battery Road, Robinson Point and 268 Orchard Road at lower interest rates. The refinancing of the S$795.0 million loan resulted in interest savings of S$14.1 million. Taking advantage of the low interest environment, the Group effectively raised fixed rate loans from 42% in 2000 to 66% in 2003. As at the end of December 2003, our net debt-to-equity ratio stood at a comfortable 0.75. Over the last three years, the Group has monetised a total of S$3.0 billion in assets and reduced debt by S$2.1 billion. We have pared our interest costs progressively from S$422.9 million in 2000 to S$240.8 million in 2003. We continued to monetise to lighten our asset base. Our hotel arm, Raffles Holdings, divested Raffles Brown's Hotel in London. The gain for CapitaLand from this divestment was S$27.9 million. Our serviced residence arm, The Ascott Group, divested two serviced residences in the UK, while continuing to manage the properties. Growing Higher Value Added Management Services CapitaLand has stepped up its real estate financial services activities. The combination of real estate domain knowledge and financial skills has enabled the Group to develop real estate financial products. Examples include REITs and property funds, as well as services such as structured financing, property fund management and advisory services. CapitaMall Trust (CMT), the first listed REIT in Singapore, has given investors total returns of over 55% since its initial public offering in July 2002. The Group continued to expand its property funds business with the launch of three private property funds in 2003: the S$500 million CapitaRetail Singapore Fund, the US$100 million CapitaLand China Residential Fund and the US$100-US$200 million CapitaRetail Japan Fund. In addition, the Group has completed several real estate financial advisory and structuring deals in Singapore and Malaysia. The Group also continued to grow its fee-based income through new management contracts. On the retail front, CapitaLand clinched a contract to manage The HarbourFront Mall, located on prime waterfront land opposite Singapore's Sentosa island. When completed in 2006, it will be the single largest retail and entertainment complex in Singapore. In November, we also acquired La Park Mizue, a suburban retail mall in Tokyo, Japan. With over 30 retail malls in Singapore, China, Japan, Malaysia and Indonesia, the CapitaLand Group is a leading manager of malls in the region. CapitaLand's hospitality arms have been actively securing more management contracts. In 2003, Raffles Holdings clinched four management contracts, in Osaka (Japan), Bangkok and Phuket (Thailand), and Canouan Island (The Grenadines in the Caribbean). This has added more than 1,000 rooms to its hotel portfolio. It has also purchased the balance of the stake it did not already own in its flagship property, Raffles Hotel. During the year, The Ascott Group secured six new management contracts in Australia, China, Thailand, Malaysia, and the Gulf region. It will manage two prime serviced residences in Dubai in the United Arab Emirates. Talent Management & Employee Development     The Group places strong emphasis on the development of human capital. Senior management is committed to the identification of talent through close monitoring of job performance and regular contact. This includes small group and one-on-one sessions between the CEO and senior management and the identified talents. Such sessions are held not only in Singapore but also overseas to include overseas staff. In 2003, a new talent development initiative was the CapitaLand Management Programme (CMP), conducted by senior management. CMP's two-day programme focuses on the Group's values and incorporates "hands on" management lessons for young managers and executives. Other initiatives included new development programmes like the Essentials of Business Management Programme and the Strategic Business Leadership Programme. These have been launched to inculcate key leadership competencies at various levels. Promising CapitaLand executives are also sent for programmes in graduate business schools such as Harvard, INSEAD, IMD, Stanford and Wharton. Corporate Governance   At CapitaLand, we firmly believe that integrity, excellence, professionalism and commitment form the bedrock for a sound system of policies, practices and internal controls. CapitaLand came out tops in corporate governance polls by regional financial magazines, FinanceAsia and Asiamoney, and a study of 180 listed-property companies in Asia-Pacific by the National University of Singapore. CapitaLand also clinched the Most Transparent Company Award in the Property category from the Securities Investors Association (Singapore) for the third consecutive year.