GEARING

There was an increase in the Group's net debt equity ratio from 0.77 in 1999 to 0.92 in 2000. The higher gearing was due to borrowings incurred for the purchases of residential land sites, new investments in Hong Kong, Japan and Singapore and the acquisition of Walker Corporation Limited.

INTEREST COVER("ICR") AND SERVICE RATIO ("ISR")

In 2000, the interest cover ratio and interest servicing ratio were 1.85 and 2.68, respectively. The lower ICR is due to the higher interest expensed to the profit and loss account for residential land sites, commercial investments and the full year consolidation of interest expenses from the Walker Corporation Limited and Somerset Group. The interest costs from the acquisitions have also impacted the ISR, which is lower than 1999. However, ISR which measures the Group's ability to pay interest costs from operating cashflow is relatively strong at 2.68.

FOREIGN EXCHANGE MANAGEMENT

CapitaLand Limited's earnings are largely insulated from the adverse impact arising from foreign exchange movement. The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property is located or by borrowing currencies that match the future revenue streams to be generated from the investments.