S T R E N G T H E N I N G F U N D A M E N T A L S

ANNUAL REPORT 2014/2015

Accessibility and Feedback As part of our efforts in environmental conservation, we have printed limited copies of this report. A PDF version is available for download from our website: www.ascendas.com We value feedback from our stakeholders as it allows us to continually improve our sustainability practices. Please share your views, suggestions or feedback to: Ascendas Pte Ltd 61 Science Park Road #04-01 The Galen, Singapore Science Park II Singapore 117525 Email: [email protected]

A N N U A L R

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2 0 1 4 / 2 0 1 5

CREATING VALUE

DELIVERING GROWTH

SHAPING FUTURES

Group Overview 4 Corporate Profile 6 Our Presence 7 Key Figures 8 Highlights for FY14/15 11 Awards and Accolades

Group Highlights 38 5-Year Financial Highlights 41 FY14/15 Financial Review 44 Treasury Highlights 47 Business Review 48 Country Review • Singapore • China • India • Korea • Southeast Asia 54 Listed Trusts 57 Portfolio Details

Sustainability Review 62 Scope of the Report 64 Corporate Governance and Compliance 64 Tenant Satisfaction 65 Supply Chain Responsibility 66 Health, Safety And Security 69 Talent Development 72 Environmental Sustainability 76 Community Support

AIMING HIGHER Building on Strong Fundamentals 14 Message from President & Group CEO Governance and Transparency 18 Board of Directors 25 Senior Management 26 Corporate Information 27 Corporate Governance 34 Enterprise Risk Management

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GRI Content Index for ‘In Accordance’– Core Option

ASCENDAS ANNUAL REPORT 2014/2015

Galaxis, Singapore

C R E A T I N G V A L U E Ascendas provides end-to-end real estate solutions, supporting companies across the entire real estate chain. Our wide portfolio of business spaces and comprehensive services and solutions enable companies to focus on growing and succeeding in their business.

Signature Towers, Seoul, Korea

ASCENDAS ANNUAL REPORT 2014/2015

CORPORATE PROFILE

Ascendas was formed in 2001 as a whollyowned subsidiary of JTC Corporation (JTC), the Singapore Government Agency responsible for the development of industrial infrastructure. Since then, Ascendas has become a leading provider of business space solutions in Asia with Assets Under Management of S$16.8 billion (exceeding US$12 billion). From its base in Singapore, Ascendas has developed a strong regional footprint, serving a global clientele of over 2,400 customers in 25 cities across 10 countries including Singapore, China, India, South Korea, Malaysia and Vietnam. Ascendas provides end-to-end real estate solutions, supporting companies across the entire real estate chain. We specialise in masterplanning, developing, managing and marketing IT Parks, industrial and logistics parks, business parks, science parks, hi-specs facilities, office and retail spaces. Our wide portfolio of business spaces and comprehensive services and solutions enable companies to focus on growing and succeeding in their business.

Leveraging on our track record and experience, Ascendas has introduced concepts, such as integrated communities, and solutions which seamlessly combine high-quality business, lifestyle, retail and hospitality spaces to create conducive human-centric work-live-play-learn environments. Our flagship projects include the Singapore Science Park and Changi City at Changi Business Park in Singapore, International Tech Park Bangalore in India and AscendasXinsu in Suzhou Industrial Park, China. Beyond business space solutions, Ascendas has deep capabilities in real estate fund management with three successfully listed trusts, namely the Ascendas Real Estate Investment Trust (A-REIT), Ascendas India Trust (a-iTrust) and Ascendas Hospitality Trust (A-HTRUST). It also manages a series of private real estate funds investing in a diverse range

PLAN DEVELOP MANAGE FINANCE Site Selection Feasibility Study Design Development

Development & Project Management Connected Real Estate

Property & Facility Management Retrofitting & Expansion

Land & Building Ownership Real Estate Financing

THE COMPLETE CUSTOMER EXPERIENCE

of industrial and commercial real estate assets across Asia. These include:

• Ascendas ASEAN Business Space Fund • Ascendas China Business Parks Fund 2 • Ascendas China Business Parks Fund 4 • Ascendas China Commercial Fund • Ascendas China Commercial Fund 2 • Ascendas China Industrial and Business Parks Fund

• Ascendas Korea Office Fund • Ascendas Korea Office Fund 2 • Ascendas Korea Office Private Real Estate Investment Trust 1

• Ascendas Korea Office Private Real Estate Investment Trust 2

• Ascendas India Development Trust • Ascendas India Growth Programme In 2012, Ascendas set up its philanthropic arm, the Ascendas GIVES Foundation, as part of its Corporate Social Responsibility efforts to support the communities in which the Group operates. The Foundation manifests the spirit of caring and sharing within the communities through programmes that support the Arts, Community and the Environment. In February 2015, JTC and Temasek announced an agreement to merge Ascendas, Singbridge Group, Surbana International Consultants and JURONG International Holdings (JIH) into an integrated platform for sustainable urban development. Ascendas and Singbridge will merge to form the asset investment and holding arm. The merger was completed in June 2015 with Ascendas and Singbridge coming together to form the Ascendas-Singbridge Group. The merged entity will be able to capitalise on the global urbanisation megatrend by offering integrated urban and business space solutions across multiple industries and geographies. Plaza 8@CBP, Singapore

ASCENDAS ANNUAL REPORT 2014/2015

OUR PRESENCE

Total Asset Under Management (AUM)

S$16.8 billion

(increased 12% against last financial year) Total Space Managed

58.9 million sq ft

• • • • KOR EA • •••

Beijing

Tianjin



Xian

• I NDIA • • •••

Suzhou Hangzhou

CHINA

Gurgaon

• VIETNAM •

Shanghai

Osaka

JAPAN



Tokyo

Guangzhou

Pune

Chennai



Ho Chi Minh City

Hyderabad

Bangalore Coimbatore

Dalian Seoul

Manila

PHIL IPPINES

MAL AY SIA

•• SINGAPOR EINDONESIA •

Johor

Jakarta

• • AUSTR AL IA • •

Cairns Brisbane Sydney

Melbourne

Singapore Total AUM: S$9.9 billion Total GFA: 35.6 million sq ft

India Total AUM: S$1.9 billion Total GFA: 9.4 million sq ft

China Total AUM: S$2.5 billion Total GFA: 11.5 million sq ft

Korea Total AUM: S$1.3 billion Total GFA: 2.4 million sq ft

Southeast Asia Total AUM: S$204 million Australia Total AUM: S$644 million Japan Total AUM: S$306 million

Gross floor area (GFA) excludes vacant land held by the Group in Singapore, China, India, Malaysia and Vietnam and hotel properties held under A-HTRUST’s portfolio. As at 31 March 2015, A-HTRUST’s portfolio comprises 12 quality hotels, providing more than 4,500 rooms across key cities in Australia, China, Japan and Singapore.

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KEY FIGURES

Total Revenue Under Management at 31 March 2015

S$1.6 billion Profit After Tax

S$400 million Profit After Tax On Fair Value Basis*

S$474 million Return on Capital Employed

9.7%

Return On Capital Employed On Fair Value Basis*

8.7%

Return on Equity

16.0%

Return On Equity On Fair Value Basis*

12.5%

* Based on unaudited pro-forma financial statements

Ascendas Lotus Business Park, Shanghai, China

ASCENDAS ANNUAL REPORT 2014/2015

2014

HIGHLIGHTS FOR FY14/15

MAY Ascendas acquires Ascendas Lotus Business Park in Zhangjiang, Shanghai The 70,000 sqm business park project is located in the prime region of the Zhangjiang middle zone, where the Pudong government has plans to develop a professional sub-city.

Groundbreaking of the Nusajaya Tech Park, Iskandar Malaysia Singapore’s Minister for Trade and Industry, Mr Lim Hng Kiang, and Malaysia’s Minister of International Trade and Industry, Y.B. Dato’ Sri Mustapa Mohamed, graced the groundbreaking of the integrated tech park located within Iskandar Malaysia.

Ascendas divests Changi City Point Changi City Point, the retail component of the Changi City integrated development, was successfully divested to Frasers Commercial Trust.

JUNE A-REIT to join the benchmark Straits Times Index Ascendas Real Estate Investment Trust (A-REIT) was selected to become one of the 30 FTSE Straits Times Index (FTSE STI) constituents on 4 June 2014. The FTSE STI is regarded as the benchmark index for the Singapore stock market and tracks the performance of the top 30 companies listed on the Singapore Exchange.

A-REIT acquires Hyflux Innovation Centre A-Reit announced the acquisition of Hyflux Innovation Centre for a total purchase consideration of S$191.2 million.

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AUGUST A-REIT acquires Aperia A-REIT completed the acquisition of Aperia, a newly-completed integrated mixed-use development in Kallang iPark, for a total transaction value of S$458 million.

  SEPTEMBER JTC & Temasek in talks to merge four real estate companies JTC Corporation and Temasek announced plans to explore merger of four subsidiaries – Ascendas, Jurong International, Surbana and Singbridge. Ascendas and Saigon Bund Capital Partners to develop OneHub Saigon business park In Vietnam Ascendas teamed up with Saigon Bund Capital Partners to develop OneHub Saigon, a new integrated business park in Saigon Hi-Tech Park in Ho Chi Minh City, Vietnam. Emeritus Senior Minister, Mr Goh Chok Tong, and Chairman of the Ho Chi Minh City People’s Committee, Mr Le Hoang Quan, graced the Investment Certificate Presentation Ceremony.

NOVEMBER Launch of Healthy Workplace Ecosystems in seven business clusters In collaboration with Health Promotion Board (HPB), Ascendas launched Healthy Workplace Ecosystems in seven business clusters in Singapore. Ascendas is also the first developer to participate in the second season of the Million kg Challenge by partnering HPB to organise inter-cluster challenges. DECEMBER Ascendas secures its second acquisition in Zhangjiang, Shanghai Following the successful acquisition of Ascendas Lotus Business Park in May 2014, Ascendas secured a new 32,000 sqm research and development park in its vicinity.

Ascendas India Trust to acquire BlueRidge Phase II in Pune Ascendas India Trust (a-iTrust) entered into a conditional share purchase agreement to acquire BlueRidge Phase II, a 1.5 million sq ft IT property in Pune.

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ASCENDAS ANNUAL REPORT 2014/2015

2015

HIGHLIGHTS FOR FY14/15

Ascendas divests Capri by Fraser Ascendas completed the divestment of Capri by Fraser, the 313-room hotel component of the Changi City integrated development.

FEBRUARY Ascendas divests CyberVale to a-iTrust Cybervale, an IT Special Economic Zone with approximately 0.6 million sq ft of super builtup area, was divested to a-iTrust for INR 1.62 billion (S$ 35.2 million1). MARCH A-REIT acquires The Kendall for S$112 million A-REIT completed the acquisition of The Kendall, a 5-year old building catering to Research & Development and related companies in Singapore Science Park.

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Converted into SGD using spot exchange rate at the time of acquisition.

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AWARDS AND ACCOLADES

CORPORATE GOVERNANCE AND TRANSPARENCY 2014 Securities Investors Association of Singapore (SIAS) Investors’ Choice Awards: • A-REIT: Winner of the Most Transparent Company Award (REITs & Business Trusts Category) BUSINESS EXCELLENCE Asia Responsible Corporate Awards 2014 Ascendas received the Apex Leadership Award at the BEI Asia Awards 2014 event, which recognises outstanding enterprises with excellent business initiatives with groundbreaking achievements and results. Top 100 Singapore Brands 2014 A-REIT named one of the “Top 100 Singapore Brands 2014”, ranked 54 by Brand Finance. 2014 Distinguished Corporate Partner Service Provider Ascendas China was named the Distinguished Corporate Partner Service Provider at the CoreNet Global China Conference on 5 September 2014. ENVIRONMENT BCA Green Mark Awards Ascendas received the following awards from the Building & Construction Authority (BCA) • Aperia awarded Green Mark (Platinum) Certification • Galaxis awarded Green Mark (Platinum) Certification • DSO National Laboratories (Phase II) awarded Green Mark (GoldPLUS) Certification • Standard Chartered @ Changi 2 (Phase II) awarded Green Mark (Gold) Certification • DBS Asia Hub at Changi Business Park awarded Green Mark (Platinum) Certification USGBC LEED Certification Ascendas received the Leadership in Energy & Environmental Design (LEED) Platinum certification for Zenith building at International

Tech Park Chennai from the US Green Building Council (USGBC). IGBC LEED Certification Ascendas received the following Leadership in Energy & Environmental Design (LEED) certifications from the India Green Building Council (IGBC). • Aviator building at International Tech Park Bangalore Special Economic Zone (ITPB SEZ) - IGBC LEED Platinum (Core and Shell) • Cedar building at International Tech Park Pune – IGBC LEED Gold (Core and Shell) • Phase 1 of Ascendas OneHub Gurgaon – IGBC LEED Gold (Core and Shell) Best Commercial Project Awards International Tech Park Pune (ITPP) won the Best Commercial Project, Pune at the CNBC AWAAZ Real Estate Awards 2014. The park also won the Commercial Property of the Year at the at the Realty Plus Excellence Award (West) in August 2014. Best Ornamental Garden Award 2014 International Tech Park Bangalore won the award for the third time at the Mysore Horticultural Society’s Horticultural Show 2014. It has previously won the same award in 2008 and 2009. 2014 Golden Layout Design Award Central Park, a residential development within the Ascendas OneHub GKC project in Guangzhou, China, won the 2014 Golden Layout Design Award. The accolade was awarded based on commuters’ votes on notable residential projects along metro lines conducted by the Guangzhou Metro Daily newspaper. CORPORATE SOCIAL RESPONSIBILITY Patron of the Arts Awards 2014 Ascendas received the Friend of the Arts Award from the Singapore National Arts Council.

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ASCENDAS ANNUAL REPORT 2014/2015

Siemens, Singapore

A I M I N G H I G H E R The good results will strengthen the foundation we have built over the years and position us to compete better, particularly as we embark on our next phase of growth when we merge with Singbridge.

Ascendas iHub Suzhou, China International Tech Park Chennai, India

ASCENDAS ANNUAL REPORT 2014/2015

MESSAGE FROM PRESIDENT & GROUP CEO

IN FY14/15, WE BUILT ON OUR STRENGTHS AND CAPABILITIES IN REAL ESTATE AND FUND MANAGEMENT. THE EFFORTS HAVE PAID OFF. NOT ONLY DID WE ACHIEVE OPERATIONAL SUCCESS ON VARIOUS FRONTS, WE ALSO DELIVERED A RECORD PERFORMANCE FOR THE YEAR. THE GOOD RESULTS WILL STRENGTHEN THE FOUNDATION WE HAVE BUILT OVER THE YEARS AND POSITION US TO COMPETE BETTER, PARTICULARLY AS WE EMBARK ON OUR NEXT PHASE OF GROWTH WHEN WE MERGE WITH SINGBRIDGE. ANOTHER GOOD YEAR Let me highlight some of Ascendas’ financial achievements for FY14/15: • After-tax earnings came in at S$400 million, a historic high for the Group. This level of performance, an approximately 13% increase from last year, drove Return on Capital Employed (ROCE) for the year to 9.7%, and lifted the 5-Year ROCE to 9.8%. • Measured on a fair value basis, the results are equally encouraging, with the Group’s Profit After Tax and Return On Equity coming in at S$474 million and 12.5% respectively. • Our shareholder’s equity reached S$2.5 billion, as compared to S$0.9 billion in 2001 when Ascendas was formed. This is equivalent to a compound annual growth rate of 8%. • On a fair value basis, our Shareholder’s Equity increased 11% year-on-year to S$3.8 billion. • Our 5-year rolling average Return On Invested Capital (ROIC) came in at 9.9%, a level that is well above our Weighted Average Cost of Capital (WACC) and reflects our underlying competitiveness.

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• At the close of our financial year on 31 March 2015, Ascendas’ total Assets Under Management amounted to S$16.8 billion, registering a growth of approximately 12% from a year ago. This growth was driven by acquisitions of the funds and listed entities and to some extent, reflected the appreciation of Renminbi and Indian Rupee. OPERATIONAL ACCOMPLISHMENTS Financial achievements aside, Ascendas’ pursuit of operational excellence through focused delivery of projects was showcased in a few key developments. In Singapore, we completed the construction for Galaxis, an integrated development located at one-north, in December 2014. Galaxis comprises a 17-storey Grade A business park tower, a retail podium and 34 work lofts. We have received 70% pre-commitment for its space as at 31 March 2015, welcoming leading companies such as Canon, Oracle and Electrolux as tenants. The redevelopment of Singapore Science Park is well underway, with the construction for DSO National Laboratories’ Phase 2 facility and the new Ascent building in Science Park I on schedule. In China, we completed the development for Phase 1C of Ascendas iHub Suzhou, which was launched for sale in October 2014 as well as the amenity space in Dalian Ascendas IT Park. We have also commenced construction for several projects including a third multi-tenanted building within Dalian Ascendas IT Park, Ascendas Innovation Towers in Xi’an and Phase 1B and 1D in Ascendas OneHub GKC in Guangzhou.

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Mr Manohar Khiatani President & Group CEO

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ASCENDAS ANNUAL REPORT 2014/2015

MESSAGE FROM PRESIDENT & GROUP CEO In India, we have begun construction for Phase 2 of International Tech Park Pune after we have achieved full occupancy for Phase 1. Our development of OneHub Chennai, an integrated industrial township, has seen good progress. Infrastructure works have been completed for Phase 1, which comprises 322 acres of industrial land. Hitachi Automotive Systems have commenced trial production within the township, while Ajinomoto, Takasago and Liwayway have commenced construction for their facilities. Our India team has also begun planning and procuring the necessary approvals for Phase 2 and Phase 3 development. In June 2014, we broke ground for Nusajaya Tech Park, an integrated development in Iskandar Malaysia. As at 31 March 2015, we have achieved 65% pre-commitment for the ReadyBuilt Facilities under Phase 1 of the development. A delay in the availability of permanent power supply pushed back the completion of Phase 1 to the third quarter of FY15/16. In September 2014, we partnered Saigon Bund Capital Partners to develop an integrated business park, OneHub Saigon in Vietnam. We have received the official approval from Ho Chi Minh People’s Committee and were presented the Investment Certificate at an official ceremony graced by Singapore’s Emeritus Senior Minister Goh Chok Tong. A KEEN FOCUS ON GROWING OUR PORTFOLIO As we progressed on our development projects, we also kept a keen focus on balancing the organic growth of our portfolio with inorganic growth, through strategic acquisitions and divestments of income-producing assets.

Our listed trust, Ascendas Real Estate Investment Trust (A-REIT) successfully acquired Hyflux Innovation Centre, Aperia and Kendall in Singapore during the year. With these latest additions, A-REIT owns a portfolio of 105 properties in Singapore and two business parks in China as of 31 March 2015. Our Indian property trust, Ascendas India Trust (a-iTrust) also announced the acquisition of BlueRidge Phase 2, a development currently under construction. Located in Pune, this development comprises three buildings with an approximate gross leasable area of 1.5 million sq ft when completed. In China, we completed the acquisition of Ascendas Lotus Business Park and a research and development park in Shanghai. Located within Zhangjiang Hi-Tech Park, both developments are well-connected via road and rail networks, enabling easy access from the city as well as Shanghai Pudong International Airport. Providing a total gross floor area of 70,000 sqm, Ascendas Lotus Business Park forms part of the asset portfolio of our S$333 million private real estate fund, Ascendas China Business Park Fund 4. In keeping with our strategic focus on business park space, we divested the retail and hotel components of our joint venture project, Changi City in Singapore, to Frasers Centrepoint Limited. The divestment enabled us to realise healthy profits from the venture, and our business park asset, ONE@Changi City, continues to enjoy over 95% occupancy. In India, we have also successfully divested our matured asset, CyberVale in Chennai, to our listed trust, a-iTrust. GREATER SYNERGY FOR GROWTH In February 2015, our parent company, JTC Corporation (JTC), and Temasek Holdings (Temasek), announced the planned merger of four of their operating subsidiaries, Ascendas, Singbridge Group (Singbridge), JURONG International Holdings (JIH), and Surbana

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The Kendall, Singapore

International Consultants Holdings (Surbana), into an integrated platform for sustainable urban development. Ascendas and Singbridge, the asset investment & holding arm, will originate, aggregate and provide urban solutions. Surbana and JIH will form the building & engineering specialist services unit, providing sustainable solutions through technology. In June 2015, the merger was completed with Ascendas and Singbridge coming together to form the Ascendas-Singbridge Group, which will be jointly owned by JTC and Temasek through a 49:51 partnership. This merger represents a significant step forward for Ascendas, as it further elevates our position in developing end-to-end integrated solutions for sustainable developments in the region. It will enable Ascendas and Singbridge to leverage on our respective capabilities to strengthen our value proposition in originating, aggregating and providing innovative urban solutions across living and business spaces. FY15/16 will be a transitional year for the new entity as preparations for integration gets underway. Together with the Singbridge team, we look forward to more growth and development opportunities that the merger will bring. SPECIAL THANKS TO THE BOARD The completion of the merger would mean that a new Board would be appointed and tasked to steer the direction of the merged entity. Hence, the current Ascendas Board will step down and hand over the Group to a Board comprising members of the Management team.

AS WE PROGRESSED ON OUR DEVELOPMENT PROJECTS, WE ALSO KEPT A KEEN FOCUS ON BALANCING THE ORGANIC GROWTH OF OUR PORTFOLIO WITH INORGANIC GROWTH, THROUGH STRATEGIC ACQUISITIONS AND DIVESTMENTS OF INCOME-PRODUCING ASSETS.

On behalf of the Ascendas Management team, I would like to express our deep appreciation and gratitude to the outgoing Board for providing valuable guidance to the Group over the years. The Board members have offered insightful advice, and on occasion, presented challenges, that sharpened our decision making process and raised the quality of our discussions. Their contribution and presence will be missed. CONCLUSION I would also like to thank our customers, partners and employees. We thank our customers for believing in Ascendas and for giving us an opportunity to serve them. We appreciate our partners for their continued support in our ventures to seek mutually beneficial solutions. Finally, we are grateful to our employees, whose hard work and dedication has resulted in the achievements we have today. With passion, conviction and commitment as a team, we are confident that we will continue to grow and tap on more exciting opportunities following the merger.

Manohar Khiatani President & Group CEO

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ASCENDAS ANNUAL REPORT 2014/2015

BOARD OF DIRECTORS

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Dr Teh joined the Board on 1 October 2012 and assumed Chairmanship on 1 April 2013. He is also Chairman of the Executive Committee, the Management Development and Compensation Committee and the Nominating Committee. Dr Teh was President of Government of Singapore Investment Corporation (GIC) Special Investments from April 1999 to June 2011, following which he stayed on as Adviser to GIC for two years. Prior to this, he was concurrently Deputy Managing Director of the Monetary Authority of Singapore (MAS) and Deputy Managing Director of GIC.

Dr Teh Kok Peng Chairman

Dr Teh is a Board member of China International Capital Corporation, Overseas Chinese Banking Corporation, Sembcorp Industries and the S Rajaratnam Endowment. He is a member of the National University of Singapore (NUS) Board of Trustees. He also serves as Chairman of the Advisory Board of the Asia Private Equity Institute at the Singapore Management University. He holds a First Class Honours in Economics from La Trobe University, Melbourne, and a Doctorate in Economics from Nuffield College, Oxford University, England. He attended the Advanced Management Program at the Harvard Business School.

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Mr Khiatani was appointed the President & Group CEO of Ascendas on 1 May 2013. He was previously the CEO of JTC Corporation (JTC), where he spearheaded the development of specialised and innovative infrastructure solutions for various industrial sectors. He joined the Ascendas Board on 1 October 2009 and continues on the Board as an Executive Director. Mr Khiatani is also a member of the Executive Committee. Prior to JTC, Mr Khiatani was the Deputy Managing Director at the Singapore Economic Development Board (EDB), where he played an instrumental role in the development and transformation of important sectors of Singapore’s economy. He was also in charge of EDB’s operations in the Americas and Europe. Between 1994 and 1999, Mr Khiatani worked in the private sector as the Managing Director of Preussag SEA, a German conglomerate. Mr Khiatani is a member of the Boards of the fund managers of Ascendas’ listed funds and also sits on the Board of SIA Engineering Company Ltd. Mr Khiatani holds a Master’s degree in Naval Architecture from the University of Hamburg, Germany. He also attended the Advanced Management Program at the Harvard Business School.

Mr Manohar Khiatani Director President & Group CEO

ASCENDAS ANNUAL REPORT 2014/2015

BOARD OF DIRECTORS

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Mr Png joined the Board on 20 May 2013, following his appointment as the CEO of JTC on 1 May 2013. He is also a member of the Executive Committee, the Audit Committee, the Management Development and Compensation Committee and the Nominating Committee. Prior to his appointment as JTC’s CEO, Mr Png was the Chief Executive of SPRING Singapore, where he spearheaded the agency’s efforts in developing a competitive small and medium-sized enterprises (SME) sector and nurturing innovative Singapore enterprises. Mr Png also spent 10 years with EDB in various capacities. His last appointment was as Regional Director for Central United States based in Chicago.

Mr Png Cheong Boon Director

He also serves as a member of the Institute for Engineering Leadership Management Board and the Asia Pacific Breweries Foundation Advisory Committee. Mr Png holds a Bachelor of Science degree in Electrical Engineering from Cornell University. He also holds a Master of Science in Management degree under the Sloan Fellows Program at Stanford University.

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Mr Nisbet joined the Board on 1 November 2011 and is the Chairman of the Audit Committee. He is also a member of the Management Development and Compensation Committee. Mr Nisbet is currently a Director of KrisEnergy Limited and a Board member of Accounting and Corporate Regulatory Authority (ACRA). He was previously employed by Deloitte in Australia, the US and Asia Pacific, in a career which spanned 38 years. He was Head of Audit & Assurance Services for Deloitte Southeast Asia, covering audit & assurance operations, business development and quality of the Deloitte Audit & Assurance practice in Southeast Asia. He also established the Deloitte Enterprise Risk Service (EFR) function in Singapore and led that practice division for four years.

Mr Alan Rupert Nisbet Director

Following his retirement from Deloitte in May 2011, Mr Nisbet established Kanni Advisory, a consultancy specialising in financial and business advisory services. Mr Nisbet holds a Diploma in Business Studies, Accounting from Caulfield Institute of Technology, Melbourne. He is a member of the Institute of Singapore Chartered Accountants (ISCA) and a Practising Associate of the Institute of Chartered Accountants in Australia (ICAA).

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Mr Shee was appointed to the Board on 18 April 2008. He is also a member of the Executive Committee and the Management Development and Compensation Committee. He also chairs the Ascendas GIVES Foundation. Mr Shee is Chairman, Asia of CBRE Pte Ltd. He holds several other appointments with the World Presidents’ Organisation, Supreme Court Inquiry Panel, Real Estate Developers’ Association of Singapore and the Lions Club of Singapore, Jurong. He is also a Director of NTUC Fairprice Co-operative Ltd, Bund Center Investment Ltd, Sunway REIT Management Sdn Bhd and SLF Properties Pte Ltd, among others. A Colombo Plan Scholar, Mr Shee graduated in 1970 from the University of Auckland, New Zealand, with a Diploma in Urban Valuation. Mr Willy Shee Ping Yah Director

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Mr Tan joined the Board on 18 April 2008 and was a member of the Nominating Committee. He retired from the Board on 30 September 2014, after six years of service. Mr Tan is the Chairman of the Public Utilities Board and Jurong International Holdings Pte Ltd. He also sits on the Board of Singapore Millennium Foundation. He holds a Bachelor of Engineering (Civil) degree (First Class Honours) from the University of Malaya and a Master of Science degree in Systems Engineering from the University of Singapore. He was conferred an Honorary Degree of Doctor of Science from the University of Westminster, UK, and an Honorary Doctorate in Engineering from Sheffield University, UK.

Mr Tan Gee Paw Director (18 April 2008 – 30 September 2014)

ASCENDAS ANNUAL REPORT 2014/2015

BOARD OF DIRECTORS

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Mr Chee was appointed a Director on 1 April 2009 and was a member of the Audit Committee. He resigned from the Board on 30 November 2014, after five years of service, following his new appointment as Second Permanent Secretary (Trade & Industry) from 1 December 2014. Mr Chee is currently the Second Permanent Secretary of the Ministry of Trade & Industry. Prior to that, he was the Chief Executive of the Energy Market Authority (EMA). He had also served as the Principal Private Secretary to Minister Mentor Lee Kuan Yew from 2008 to 2011.

Mr Chee Hong Tat Director (1 April 2009 – 30 November 2014)

Mr Chee studied at the University of California at Berkeley on an Overseas Merit Scholarship and graduated with a Bachelor of Science (Highest Honours) in Electrical Engineering & Computer Sciences and a Bachelor of Arts (Highest Honours) in Economics. He holds a Master of Business Administration degree from Adelaide University.

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Mr Chen was appointed to the Board on 1 September 2009 and he is also a member of the Nominating Committee. Mr Chen currently holds the position of Chairman of the Eyon Holding Group and Titan Technology Capital Investment Corporation. He also serves as the Chapter Chairman of Society Entrepreneur Ecology (SEE)’s Taipei Chapter. Mr Chan is also the Vice-Chairman of Taiwan Air Cargo Terminal Corporation and Taiwan Insurance Co., Ltd. He is a Board member of China Airlines, Wan Hai Line Singapore and holds many other local and foreign directorships. Mr Chen holds a Bachelor of Economics degree from Fu-Jen Catholic University in Taiwan and a Master of Business Administration degree from New York University.

Mr Charles CY Chen Director

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Mr Lee Eng Beng was appointed a Director on 1 September 2009 and he is also a member of the Audit Committee. Mr Lee graduated with First Class Honours in Law from the National University of Singapore (NUS). Upon graduation, he served as a Senior Tutor with the Faculty of Law in NUS and a Justices’ Law Clerk in the Supreme Court of Singapore. He then obtained a Bachelor of Civil Law postgraduate degree with First Class Honours from Oxford University. From 1994 to 1998, Mr Lee was a lecturer at the Faculty of Law in NUS. Mr Lee joined Rajah and Tann LLP as a Partner in 2008 and was appointed Managing Partner of the firm in October 2010. From 2003 to 2009, he headed the firm’s Business Finance and Insolvency Practice Group, with a strong focus on banking, insolvency and commercial litigation. He continues to be active as counsel and advisor for banks and financial institutions, insolvency practitioners, distressed companies, as well as in the areas of commercial litigation and arbitration. Mr Lee was appointed Senior Counsel in 2008.

Mr Lee Eng Beng Director

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Mr Doraisamy joined the Board on 1 September 2011 and was a member of the Audit Committee. He retired from the Board on 30 September 2014 after three years of service. Mr Doraisamy has 30 years of Information Technology experience spanning the global market, including 25 years with Hewlett-Packard (HP). Mr Doraisamy served three years as Managing Director of HP in Asia Pacific and Japan, and nine years as Country Managing Director for HP/Compaq in India. Mr Doraisamy holds a postgraduate degree in Computer Science and a Master’s degree in Mathematics. He currently also serves as a Board member of MphasiS (a HP Company) and TVS Electronics (India).

Mr Balu Doraisamy Director (1 September 2011 – 30 September 2014)

ASCENDAS ANNUAL REPORT 2014/2015

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BOARD OF DIRECTORS

Mr Jen was appointed to the Board on 1 November 2011.

He was Managing Director of Micron Semiconductor Asia. He joined Micron in October 1998 with the acquisition of Texas Instruments’ memory business. He started his career with Texas Instruments Singapore in 1979 as an Engineer and held a series of increasingly responsible positions, including Engineering Manager, Quality Manager and Operations Manager, before assuming the role of General Manager in 1996. He was appointed Managing Director in October 1999. He is currently a Director of IM Flash Singapore, LLP. Mr Jen holds a Bachelor of Science degree from Imperial College, London.

Mr Jen Kwong Hwa Director

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Mr Kee joined the Board on 1 April 2013 and was a member of the Executive Committee. He resigned from the Board on 15 March 2015. Mr Kee is currently the Non-Executive Chairman of Changi Airports International Pte Ltd and Alexandra Health Fund Limited. He is also the Corporate Advisor of Temasek International Advisors Pte Ltd, and holds Directorship positions in Raffles Medical Group Ltd, NTUC Enterprise Cooperative Limited, NTUC Income Co-operative Ltd, CapitaLand Limited and Wildlife Reserves Singapore Pte Ltd. Prior to Mr Kee’s retirement as Chief Investment Officer of CapitaLand Limited on 1 July 2009, he held several senior appointments within the CapitaLand Group. Mr Kee holds a Master of Arts degree in Engineering Science from Oxford University, United Kingdom.

Mr Kee Teck Koon Director (1 April 2013 – 15 March 2015)

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SENIOR MANAGEMENT

KEY EXECUTIVES Mr Manohar Khiatani President & Group CEO (please see Board of Directors pg 19) Mr Chia Nam Toon Group CFO Assistant Group CEO, Corporate Services Mr Jonathan Yap Assistant Group CEO, Overseas Funds and Real Estate Funds CEO, Ascendas India Mr Tan Ser Ping Assistant Group CEO, Singapore Funds CEO, Ascendas Funds Management (Singapore) Ltd FUND MANAGEMENT Mr Tan Juay Hiang CEO, Ascendas Hospitality Fund Management Pte Ltd & Ascendas Hospitality Trust Management Pte Ltd Mr Sanjeev Dasgupta CEO, Ascendas Property Fund Trustee Pte Ltd COUNTRY OPERATIONS Mr Tan Yew Chin CEO, Ascendas Land (Singapore) Mr Jeffrey Chua CEO, Ascendas Services (Singapore) Mr Wong Wing Kien CEO, Ascendas China Mr Lee Fu Nyap CEO, India Operations

Mr Lee Ho-Gil CEO, Ascendas Korea Mr William Tay CEO, Ascendas Southeast Asia CENTRES OF EXCELLENCE Mr Thomas Teo Chief Real Estate Development Officer Mr Arthur Aw Deputy Chief Real Estate Development Officer Chief Development Planning Officer Mr Aylwin Tan Chief Customer Solutions Officer Ms Serena Teo Head, Group Strategy Management Mrs Lorraine Ng Head, Group Human Resources and Administration Ms Mary de Souza Head, Group Legal and Corporate Secretariat Ms Koon Guat Ngor Deputy Group CFO Ms Crystal Seah Head, Group Communications Ms Irene Lye Head, Enterprise Risk Management Mr Alvin Tan Head, Group Information Management & Technology

25

ASCENDAS ANNUAL REPORT 2014/2015

CORPORATE INFORMATION

EXECUTIVE COMMITTEE

AUDIT PARTNER

Dr Teh Kok Peng (Chairman) Mr Png Cheong Boon Mr Manohar Khiatani Mr Willy Shee Mr Kee Teck Koon

Mr Nelson Chen (Appointed in FY10/11)

AUDIT COMMITTEE Mr Alan Rupert Nisbet (Chairman) Mr Png Cheong Boon Mr Chee Hong Tat Mr Lee Eng Beng Mr Balu Doraisamy MANAGEMENT DEVELOPMENT ANDCOMPENSATION COMMITTEE Dr Teh Kok Peng (Chairman) Mr Png Cheong Boon Mr Willy Shee Mr Alan Rupert Nisbet NOMINATING COMMITTEE Dr Teh Kok Peng (Chairman) Mr Png Cheong Boon Mr Tan Gee Paw Mr Charles Chen INDEPENDENT AUDITOR Ernst & Young LLP One Raffles Quay North Tower, Level 18 Singapore 048583

JOINT COMPANY SECRETARIES Ms Mary J. de Souza Mr Edwin Kung REGISTERED OFFICE 61 Science Park Road #04-01 The Galen Singapore Science Park II Singapore 117525 Tel: (65) 6774 1033 Fax: (65) 6774 9852 Website: www.ascendas.com Co.Reg.No. 200010635

26

CORPORATE GOVERNANCE

Ascendas adheres strictly to the principles and guidelines of the Code of Corporate Governance 2012 (the “Code”). As such, Ascendas adopts standards of corporate governance and transparency akin to listed companies, as described below. THE BOARD’S CONDUCT OF AFFAIRS The Board is responsible for providing strategic direction to the Management and the Group. Matters requiring the Board’s approval include: 1. Major funding proposals, investments, acquisitions and divestments; 2. Annual budgets and financial plans of the Group; 3. Annual and quarterly financial reports; 4. Internal controls and risk management strategies and execution; 5. Appointment of directors and key management staff, including review of performance and remuneration packages. The Group has in place, Financial Regulations, which define levels of authority for approvals on matters such as operating and capital expenditure, credit lines and acquisition and disposal of assets and investments. To ensure in-depth and timely review of specific issues, the Board has delegated certain functions to various Board Committees i.e. the Executive Committee (EXCO), the Audit Committee (AC), the Nominating Committee (NC) and the Management Development and Compensation Committee (MDCC). Each of these Board Committees has its own terms of reference.

The EXCO comprises four members, namely Dr Teh Kok Peng (EXCO Chairman), Mr Png Cheong Boon, Mr Manohar Khiatani and Mr Willy Shee. Mr Kee Teck Koon was also a member of the EXCO until his retirement from the Board on 15 March 2015. The EXCO’s principal responsibilities include: 1. To review and advise Management on the Ascendas Group’s overall business and commercial strategy, annual operating budget and financial plans necessary to achieve its objectives, prior to submission to the Board for approval; 2. To evaluate and approve investments to be made by the Ascendas Group (including the injection of additional capital into subsidiary companies, equity participation and/or extension of contingent liabilities in joint venture companies by the Company and/or its subsidiary companies) within the prescribed limits; 3. To evaluate and approve divestments and the sale of properties within the prescribed limits. Details of the other Board Committees are provided below. BOARD ATTENDANCE The Board meets every two months and more often, when necessary. Five Board meetings were held in the financial year ended 31 March 2015 (FY14/15). The attendance of the Directors at meetings of the Board and Board Committees, and the frequency of such meetings, is disclosed below. A Director who fails to attend three Board meetings consecutively, without good reason, will not be considered for reappointment by the Nominating Committee (NC) in its annual review of Directorships.

27

ASCENDAS ANNUAL REPORT 2014/2015

CORPORATE GOVERNANCE

Board

Audit Committee

Executive Committee

Management Development and Compensation Committee

Nominating Committee

No. of meetings held: 5

No. of meetings held: 4

No. of meetings held: 5

No. of meetings held: 3

No. of meetings held: 0

Dr Teh Kok Peng

5



5

3

0

Mr Manohar Khiatani

5

4(i)

5

3(i)



Mr Alan Rupert Nisbet

5

3



3



Mr Png Cheong Boon

5

3

5

3

0

Mr Willy Shee

4



4

2

Mr Tan Gee Paw(ii)

3







0

Mr Lee Eng Beng

4

3







Mr Charles Chen

3







0

Mr Balu Doraisamy(ii)

2

1







Mr Jen Kwong Hua

5









Mr Chee Hong Tat(iii)

0

0







Mr Kee Teck Koon

4



5





Board Members

(i) (ii) (iii) (iv)

(iv)

Mr Khiatani attended the AC and MDCC meetings in his capacity as President and Group CEO Mr Tan and Mr Doraisamy retired from the Board on 30 September 2014 Mr Chee resigned from the Board on 30 November 2014 Mr Kee resigned from the Board on 15 March 2015

DIRECTORS’ TRAINING Upon appointment, a Director is provided with a formal letter setting out the key Directorship responsibilities. A comprehensive orientation and induction programme, including site visits to the Group’s properties, is organised to familiarise new Directors with the Group’s business, operations, organisation structure and corporate policies. New Directors are briefed on the Company’s corporate governance practices, regulatory regime and their duties as Directors. Directors are updated regularly on changes in relevant laws and regulations, industry developments, business initiatives and challenges. Directors are informed and encouraged to attend relevant training programmes conducted by the Singapore Institute of Directors, the Singapore

Exchange Limited, and business and financial institutions and consultants. Management also organises presentations by subject-matter experts on relevant topics. For FY14/15, Directors were provided with training on the Personal Data Protection Act, the implications of revisions to the REIT Regulations proposed by the Monetary Authority of Singapore, as well as updates on internal controls and regulatory requirements. Directors may, at any time, request for further explanations, briefings or informal discussions on any aspect of the Group’s operations or business issues from Management. Ascendas funds the training and development programmes that it arranges for its Directors.

28

BOARD COMPOSITION AND GUIDANCE The Board currently comprises eight Directors. The following Directors have retired since the commencement of FY14/15: Retirement Date Mr Tan Gee Paw

30 September 2014

Mr Balu Doraisamy

30 September 2014

Mr Chee Hong Tat

30 November 2014

Mr Kee Teck Koon

15 March 2015

All the Directors, except the Chief Executive Officer (CEO), are non-executive Directors. Each Director has been appointed on the strength of his/her calibre and experience. As a group, the Directors possess core competencies in relevant areas such as real estate, finance, engineering, economics, legal, information technology and local country experience, particularly in China and India. Six of the eight Directors currently on the Board, including the Chairman, are independent Directors. The independence of each Director is assessed by the NC in accordance with Guideline 2.3 of the Code. Key information regarding the Directors, including directorship and chairmanship both present and those held over the preceding three years in other listed companies, and other principal commitments, are set out in the Board of Directors’ section at pages 18 to 24. The Board and Management are given opportunities to engage in open and constructive debate for the furtherance of strategic objectives. All Board members are supplied with relevant, complete and accurate information on a timely basis and Directors may challenge Management’s assumptions and also extend guidance to Management, in the best interest of the Group. CHAIRMAN AND CHIEF EXECUTIVE OFFICER The Chairman and the President & Group CEO of the Company are separate persons and are not related. The Chairman is a non-executive and independent Director. He approves the agenda for Board meetings and ensures that adequate time is available for discussion of all agenda items. He encourages constructive relations within the Board and between

the Board and Management, facilitates the effective contribution of non-executive Directors and ensures effective communication with shareholders. The CEO bears executive responsibility for the Group’s business and implements the Board’s decisions. BOARD MEMBERSHIP The Nominating Committee (NC) reviews the composition of the Board and Board Committees periodically, taking into account the need for progressive renewal of the Board and each Director’s competencies, commitment, contribution and performance. The NC is chaired by Dr Teh Kok Peng, the other members being Mr Png Cheong Boon and Mr Charles Chen. The NC meets at least once a year to review the balance and mix of expertise, skills and attributes of the Directors in order to meet the business and governance needs of the Group, shortlists candidates with the appropriate profile for Board succession planning and recommends them to the shareholder for approval. The NC has adopted internal guidelines addressing competing time commitments that arise when Directors serve on multiple boards and have other principal commitments. As a guide, Directors should not have more than six listed company board representations and other principal commitments. The NC monitors and determines annually whether Directors who have multiple board representations and other principal commitments, are able to give sufficient time and attention to the affairs of the Company and adequately carry out the duties of a Director of the Company. The NC was satisfied that in FY14/15, where a Director had other listed company board representations and/or other principal commitments, the Director was able to carry out and had been adequately carrying out, his duties as a Director of the Company. The NC reviews annually whether a Director or potential candidate for the Board is considered an independent director, bearing in mind the Code’s definition of an “independent director” and guidance as to the relationships, the existence of which would deem a Director not to be independent.

29

ASCENDAS ANNUAL REPORT 2014/2015

CORPORATE GOVERNANCE

BOARD PERFORMANCE The NC reviews the Board’s performance annually. There is in place a process for assessing the effectiveness of the Board as a whole and its Board Committees as well as for assessing the contribution by Directors to the effectiveness of the Board. This process includes having Directors complete a Questionnaire seeking their views on various aspects of Board performance, such as Board composition, information, process and accountability. The Company Secretary compiles Directors’ responses to the Questionnaire into a consolidated report. The report is discussed at the NC meeting and also shared with the entire Board. For FY14/15, the Questionnaire on the performance of the Board and Board Committees was reviewed in accordance with best practices on board evaluation. The Questionnaire was completed by Directors, and reviewed by the NC and then the Board. The NC assessed the performance of the Board as a whole, taking into account the Board’s composition and size, the Board’s access to information, Board processes, Board accountability, standard of conduct and performance of the Board’s principal functions and fiduciary duties, and guidance to and communication with the Management. The Chairman of the Board also assessed the performance of individual Directors based on factors such as the Director’s attendance, preparedness, candour, participation and contribution at Board meetings and industry and business knowledge. ACCESS TO INFORMATION The Board is provided with quarterly financial accounts, other financial statements and progress reports of the Group’s business operations, as well as analysts’ reports on the Company. The quarterly financial results and annual budget are presented to the Board for approval. The financial results are also compared against the budgets, together with explanations given for significant variances for the reporting period. As a general rule, board papers are sent to Directors at least one week in advance in order for Directors to be adequately prepared for the meeting. Senior Management attends Board meetings to answer any query from the Directors.

The Directors also have unrestricted access to the Company Secretary and Management at all times. The Company Secretary works closely with the Chairman in setting the agenda for Board meetings. The Company Secretary attends all Board meetings and ensures that Board procedures are followed and that applicable rules and regulations are complied with. REMUNERATION MATTERS The Management Development and Compensation Committee (MDCC) is chaired by Dr Teh Kok Peng, the other members being Mr Png Cheong Boon, Mr Willy Shee and Mr Alan Nisbet. The MDCC sets the remuneration guidelines of the Group for each annual period, including the structuring of long-term incentive plans, annual salary increases and variable and other bonuses for distribution to employees. The MDCC also reviews the remuneration framework (covering all aspects of remuneration including but not limited to Directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind) and specific remuneration packages of key management. The directorship fee structure for Non-Executive Directors comprises a base fee for serving as a director and additional fees for serving on Board committees. It takes into account the following: • Financial performance of the Company; • Directors’ responsibilities and contributions; and • Industry practices and norms on remuneration, including the guidelines set out in the Statement of Good Practice issued by the Singapore Institute of Directors. Directors’ fees paid to all Non-Executive Directors for FY14/15 did not exceed S$250,000. The Company advocates a performance-based remuneration system for key executives of the Company. The system is responsive to the market and based on individual employee’s performance. The remuneration structure is designed as such to retain, reward and motivate the individual to stay competitive and relevant. The total remuneration mix of key executives comprises a fixed annual salary and annual performance bonus. The fixed

30

annual salary component includes the annual basic salary plus fixed allowances. The annual performance bonus is tied to the individual employee’s performance and the performance of the Company, so as to align employee performance to the goals of the Company. No compensation is payable to any director, senior management or staff of the Company in the form of options in units or pursuant to any bonus or profit-sharing plan or any other profitlinked agreement or arrangement under the service contracts. ACCOUNTABILITY AND AUDIT The Board is responsible for providing a balanced and comprehensive assessment of the performance, position and prospects of the Company and the Group. Financial reports and other relevant information are promptly disseminated to the shareholder and are accessible on the Company’s website. The Board has unrestricted access to information from Management and Management regularly provides the Board with reports on the performance, position and prospects of the Company and the Group. Such reports include the Consolidated Income Statement, the Statement of Financial Position, a comparison of actuals against budgets and explanatory notes for significant variances for the month and year-to-date performance. RISK MANAGEMENT AND INTERNAL CONTROLS The Audit Committee (AC) assists the Board in overseeing the risk governance in the Group to ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholder interests and the Group’s assets. It also assesses the nature and extent of risks which the Board is willing to take in achieving the Group’s strategic objectives.

In the area of risk management, the AC carries out the following: a. Oversees and advises the Board on the Group’s risk exposure, risk appetite and risk strategy; b. Reviews and guides Management in the formulation of the Group’s risk policies and in the execution of risk assessment processes and mitigation strategies; and c. Reviews annually the adequacy and effectiveness of the Group’s risk management and internal control systems, including financial, operational, compliance and information technology controls. The Enterprise Risk Management Department of the Group implements the Group’s risk management policies and processes, and develops the framework to assist the operating units in identifying, monitoring and managing the risks within the Group. The Risk Management Report is found on page 34. The Internal Audit Division of the Company (IAD) has an annual audit plan, which complements that of the external auditors. IAD’s plan focuses on material internal control systems including financial, operational, IT and compliance controls, and risk management. Any material non-compliance or lapses in internal controls together with corrective measures are reported to the AC. Based on the audit reports and management controls in place, the AC is satisfied that the internal control systems provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial statements are reliable. In the course of their statutory audit, the Company’s external auditors will highlight any material internal control weaknesses which have come to their attention in carrying out their normal audit, which is designed primarily to enable them to express their opinion on the financial statements. Such material internal control weaknesses noted during their audit, and recommendations, if any, by the external auditors are reported to the AC.

31

ASCENDAS ANNUAL REPORT 2014/2015

CORPORATE GOVERNANCE

The President & CEO and the Chief Financial Officer at the financial year-end have provided a letter of assurance on the integrity of the financial records/statements, as well the effectiveness of the Company‘s risk management and internal control systems. The Board recognises the importance of sound internal controls and risk management practices to good corporate governance. The Board affirms its overall responsibility for systems of internal controls and risk management within Ascendas, and for reviewing the adequacy and integrity of those systems on an annual basis. The internal control and risk management functions are performed by key executives, and are reported to the AC for review. The internal control systems include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulations and best practices, and the identification and containment of business risk. Such systems are designed to manage rather than to eliminate the risk of failure to achieve business objectives. For this reason, they provide only reasonable, and not absolute, assurance against material misstatement of loss. The Board also notes that all internal control systems contain inherent limitations and no system of internal controls can provide absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error losses, fraud or other irregularities. Based on the system of risk management and internal controls established and maintained within Ascendas, work performed by the internal and external auditors, reviews performed by Management, various Board Committees and the Board, and the assurance from the Chief Executive Officer and Chief Financial Officer of the respective entities within Ascendas, the Board with the concurrence of the AC is of the opinion that the internal controls addressing material financial, operational, compliance and information technology risks of the Group were effective and adequate as at 31 March 2015 in addressing material risks. AUDIT COMMITTEE The AC currently comprises five members, all of whom are independent non-executive Directors. The Chairman of the AC is Mr Alan Nisbet and its existing members are Mr Png Cheong Boon and Mr Lee Eng

Beng. Mr Balu Doraisamy was a member of the AC prior to his retirement on 1 September 2014 and Mr Chee Hong Tat was also a member of the AC prior to his retirement from the Board on 30 November 2014. The NC is of the view that the existing members of the AC have sufficient financial management expertise and experience to discharge the AC’s functions given their experience as directors and/or senior management in accounting, financial and legal fields. The AC performs the functions as set out in the Code including the following: a. Reviewing the annual audit plans and audit reports of external and internal auditors; b. Reviewing the balance sheet and profit and loss account of the Company and the consolidated balance sheet and profit and loss accounts of the Group before they are submitted to the Board for approval; c. Reviewing significant financial reporting issues and judgments so as to ensure the integrity of the financial statements of the Company and any announcements relating to the Company’s financial performance; d. Reviewing the auditors’ evaluation of the system of internal accounting controls; e. Reviewing and reporting to the Board on the adequacy and effectiveness of the Company’s internal controls, including financial, operational, compliance and information technology controls, risk management policies and systems of the Company and the Group; f. Reviewing the scope, results and effectiveness of the internal audit function; g. Reviewing the scope, results and effectiveness of the external audit, and the independence and objectivity of the external auditors annually, and the nature and extent of non-audit services supplied by the external auditors so as to maintain objectivity; h. Making recommendations to the Board on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors; i. Reviewing the Company’s whistle-blowing policy, and to ensure that arrangements are in place for concerns about possible improprieties in matters of financial reporting or other matters to be raised and independently investigated, and for appropriate follow-up action to be taken; j. Overseeing any internal investigation into cases of fraud and irregularities;

32

k. Reviewing any interested person transaction; l. Approving the hiring, removal, evaluation and compensation of the head of the internal audit function; and m. Ensuring that the internal audit function is adequately resourced and has appropriate standing within the Company. The AC has the authority to investigate any matter within its terms of reference. It also has full access to and co-operation by management as well as full discretion to invite any Director or executive officer to attend its meetings. The AC has conducted an annual review of the performance of the external auditor and the volume of non-audit services to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors, before confirming their re-nomination. The AC meets with the external and internal auditors, in each case, without the presence of Management, at least once a year. The audit partner of the external auditors is rotated every five years, in accordance with the requirements of the Singapore Exchange (SGX) Listing Manual. Quarterly financial statements are reviewed by the AC before presentation to the Board for approval, to ensure the integrity of information. The AC takes measures to keep abreast of the changes to accounting standards and issues which have a direct impact on financial statements, with training conducted by professionals or external consultants. The Company confirms that the appointment of the external auditors is in accordance with Rules 712 and 715 of the SGX Listing Manual. CODE OF BUSINESS ETHICS AND EMPLOYEE CONDUCT POLICY The Group has a Code of Ethics which is posted on the Company’s intranet website, to regulate the ethical conduct of its employees. The Group also has a Whistleblowing Policy & Procedure which is posted on the Company’s corporate website, to allow staff and external parties such as suppliers, customers, contractors and other stakeholders, to raise concerns or observations in confidence to the Company, about

possible irregularities for independent investigation and appropriate follow up action to be taken. INTERNAL AUDIT The internal auditors assist the AC in ensuring that Management maintains a sound system of internal controls by regular monitoring of key controls and procedures and ensuring their continued effectiveness. In the financial year under review, the internal audit function of Ascendas was carried out by KPMG. Staffed by qualified executives, KPMG has unrestricted access to the AC. KPMG reports to the Chairman of the AC and is guided by the Standards for the Professional Practice of Internal Auditing. During the year, KPMG adopted a risk-based auditing approach covering financial, operational and compliance controls. Internal audits were carried out on Group entities. Internal audit reports were submitted to the AC for review and the summary of findings and recommendations were discussed at the AC meetings. The AC has reviewed the internal audit function in the financial year under review and is satisfied of its adequacy and independence from the activities it audits. The Company also has an Internal Audit Department (IAD) headed by a qualified accountant and professional auditor. The Head of Internal Audit reports directly to the Chairman of the AC on audit matters and to the CEO on administrative matters. IAD has adopted the Standards for Professional Practice of Internal Auditing set by IIA. The AC approves the hiring, removal, evaluation and compensation of the Head of Internal Audit function. COMMUNICATION WITH SHAREHOLDERS Although Ascendas Pte Ltd is not a listed entity, the Group upholds a strong culture of continuous disclosure and transparent communication. Our disclosure policy requires timely and full disclosure of all material information relating to the Group through press releases and the Group’s website www.ascendas.com.

33

ASCENDAS ANNUAL REPORT 2014/2015

ENTERPRISE RISK MANAGEMENT

Risk management is an integral part of our planning and decision-making process. Ascendas has a rigorous process of risk identification, management, monitoring and reporting that provides assurance to the Board and our stakeholders. We have designated personnel who are involved in the on-going assessment and improvement of risk management and controls. Risk management policies and processes are regularly reviewed and improved where necessary. Independent reviews are also conducted by third party consultants to ensure that our risk management framework is appropriate and adequate. The Audit Committee supports the Board by reviewing the management of risks and assessing the effectiveness of risk mitigation strategies. IMPROVING OUR ERM FRAMEWORK During the year, Ascendas performed a risk rationalisation exercise to streamline our risks and their associated controls. We also reviewed and updated our risk appetite statement, reaffirming our risk tolerance. RISK FACTORS Ascendas’ performance is influenced by a wide range of risk factors. Some of these risks could be beyond the organisation’s ability to control, assessed to be non-material or are presently unknown. The systems we have in place are intended to provide reasonable but not absolute assurance. We recognise that risks cannot be completely eliminated, especially under an evolving landscape of uncertainties and vulnerabilities. We constantly seek to minimise risks to a reasonable level, where the costs do not outweigh the potential benefits.

Our principal risk types are: Strategic Risks Strategic Risks relate to the Group’s business plans and strategies, which are affected by the economic conditions and degree of political stability in the countries where we operate and/or have large investments. The uncertainties arise from changes in laws and regulations, evolving competitive landscape, changes in customers’ needs, product offering and economic cycle, as well as the ability to acquire quality assets at reasonable prices. Ascendas’ strategic direction, business strategies, plans and performance targets are reviewed and approved by senior management and the Board. We periodically review the macroeconomic environment through monitoring economic and market indicators, which provide us with better insights to future developments. We also review market trends and demands to identify shifts in our customers’ location strategy. As we expand our geographical presence, we subject investment and divestment decisions to rigorous scrutiny to ensure alignment with our strategic business focus and to meet the required rates of return on investments. During the risk evaluation stage, a multi-disciplinary Group advisory team provides an independent review of the relevant risk factors, such as market, financial and operational risks. The proposal is brought to the Management Investment Meeting, where it is reviewed and escalated to the Executive Committee for scrutiny, depending on the agreed thresholds.

34

Project Management Risks We have clearly defined procedures for monitoring, managing and controlling major projects. The project management teams under the various business units are responsible for ensuring that all projects are managed effectively, and regular reports about the progress and significant activities are submitted to the management. Key project risk indicators are also established and regularly monitored, and remedial actions implemented when the project is delayed. Human Resource Risks Ascendas adopts competitive and attractive human resource practices in the areas of staff recruitment, talent development and compensation. We have in place comprehensive human resource policies on these areas. External consultants, where needed, are engaged to conduct market surveys to provide guidance on remunerations policies. We acknowledge that succession planning is critical to our organisation and we have implemented programmes to build a talent pool, ensuring the availability of experienced and capable employees to fill key business leadership positions in the organisation. Exposure to Financial Market Risks We operate internationally and are exposed to a variety of financial risks, largely arising from foreign exchange fluctuations and interest rate movements. We have strict financial regulations in place and business units are only allowed to engage

in standard forward transactions for the purpose of hedging foreign exchange and interest rate risks. All financial transactions with the banks are governed by banking facilities, duly accepted with resolutions of the relevant Boards. Banking mandates defining the permitted financial instruments and facility limits are also approved by the relevant Boards. Catastrophic Risks Some of the countries in which we operate are subject to major natural catastrophes including earthquakes, floods or man-made ones like acts of terrorism. Such losses or damage may significantly affect our operations and impact our ability to provide service to Ascendas’ customers. Besides holding insurance policies, Ascendas has a defined crisis management and escalation process involving senior management to respond to emergencies and/or catastrophic events, to ensure business and service continuity without compromising our value promise to our customers or our commitment to our stakeholders.

35

ASCENDAS ANNUAL REPORT 2014/2015

D E L I V E R I N G G R O W T H ONE@Changi City, Singapore

Ascendas Lotus Business Park, Shanghai, China

For the last three consecutive years, we were able to sustain the Group’s consolidated Profit After Tax (PAT) consistently above the S$300 million mark. Over the last five years, the share of earnings from our investments in associates and joint ventures, including our three listed entities, grew at a CAGR of more than 40%.

ASCENDAS ANNUAL REPORT 2014/2015

5 -Y E A R F I N A N C I A L H I G H L I G H T S

Selected Income Statement Items (For the year ended 31 March) (S$ m)

FY10/11

FY11/12

FY12/13 Restated

FY13/14 Restated

FY14/15

463.6 190.5

559.8 259.1

846.1 363.4

1,075.0 354.2

988.0 399.9

FY10/11

FY11/12

FY12/13 Restated

FY13/14 Restated

FY14/15

Assets Investment properties Properties, plant and equipment Development properties for sale Investment in associates & joint ventures Cash and bank balances Others Total Assets

1,148.5 19.3 9.7 971.8 435.6 460.0 3,044.9

1,510.3 19.9 52.4 988.5 664.8 403.3 3,639.2

2,146.6 785.5 78.2 940.0 858.4 425.2 5,233.9

2,951.5 714.3 28.3 912.3 855.1 498.6 5,960.1

2,588.4 650.4 4.9 1,084.1 1,124.1 884.0 6,335.9

Liabilities Borrowings / medium term notes Others Total Liabilities

715.4 457.7 1,173.1

1,087.4 567.2 1,654.6

1,582.3 749.4 2,331.7

1,963.1 776.1 2,739.2

1,875.7 905.4 2,781.1

Net Assets

1,871.8

1,984.6

2,902.2

3,220.9

3,554.8

Equity Shareholder’s funds Perpetual capital securities Non-controlling interests Total Equity

1,730.3 – 141.5 1,871.8

1,857.0 – 127.6 1,984.6

2,011.9 296.0 594.3 2,902.2

2,243.6 296.0 681.3 3,220.9

2,524.4 296.0 734.4 3,554.8

Financial Ratios Return on Capital Employed (%) Return on equity (%) Gross debt equity ratio (%) Interest cover ratio (X) AUM

8.8 11.2 38 9.4 11,074

10.2 13.8 55 10.4 12,926

11.0 17.2 55 9.7 14,214

9.1 15.0 61 9.4 15,069

9.7 16.0 582 9.4 16,821

Total income Net Profit Selected Balance Sheet Items (As at 31 March) (S$ m)

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS). Investment properties are measured using the cost model under FRS 40 – Investment Property. Comparatives for FY12/13 and FY13/14 have been restated to take into account the retrospective adjustments relating to FRS 110 – Consolidated Financial Statements. 2

Gross debt equity ratio for FY14/15 includes the borrowings amounting to S$170.8 million relating to disposal group classified as held for sale.

38

A CONSISTENT FINANCIAL PERFORMANCE For the last three consecutive years, we were able to sustain the Group’s consolidated Profit After Tax (PAT) consistently above the S$300 million mark. The 5-year rolling average Return On Capital Employed (ROCE) remained respectable at between 8.4% and 9.8%. Compared to FY13/14, the Group’s net profit of S$400 million was higher by S$46 million or about 13%. The better performance was primarily due to higher disposal gains realised and higher share of profits from associates and joint ventures. Profit After Tax (S$’m) 363

354

400

39

STRONG AND STEADY INCOME STREAMS The Group’s main sources of income are proceeds from sale of development properties, disposal gains, rental income and contribution from our investments in Associates and Joint Ventures. In the last five years, our Total Income rose steadily from S$464 million in FY10/11 to S$988 million in FY14/15, with the peak observed in FY13/14. The high revenue realised from the sale of development properties in FY13/14, which amounted to S$360 million, was made possible when we successfully delivered the completion of two strata-sale development projects in Singapore, AZ@Paya Lebar and 8B@ Admiralty. Total Income Distribution (S$’m)

259 5%

191

20% 12%

FY10/11

FY11/12

FY12/13*

FY13/14*

FY14/15 9% 9% 9%

5-Year Rolling Average ROCE (%)

24%

9.2

9.3



9.0 8.4



*

FY10/11

FY11/12

FY12/13*

FY13/14*

FY14/15

24%

13%

29%

28%

24%

18%

FY10/11

FY11/12

FY12/13*

n n n n n n n

16% 34%

17% 24%

21%

9.8

9% 9% 5%

18%

10%

16%



8%

12%

3% 14% 19%

4% 15%

FY13/14*

22%

FY14/15

Rental revenue Disposal gain Fee income Sale of properties Contribution from associates & JV Hotel Income Others

Comparatives for FY12/13 and FY13/14 have been restated to take into account the retrospective adjustments relating to FRS110 - Consolidated Financial Statements.

ASCENDAS ANNUAL REPORT 2014/2015

5 -Y E A R F I N A N C I A L H I G H L I G H T S

Divestment gains, which tend to vary from year to year depending on the availability of sufficiently matured properties ripe for divestment, have contributed an average of 20% to the Group’s total income over the last five years and provided the necessary recycling of capital into new investments. Rental income from our investment properties, a stable and important recurring source of income for the Group, grew at a compound annual growth rate (CAGR) of approximately 15% from FY10/11 to FY14/15. Another recurring earnings stream is our fee-based income. Comprising of fund and property management fees, these recurring incomes contributed an average of about 18% to the Group’s total income over the last five years. Over the last five years, the share of earnings from our investments in associates and joint ventures, including our three listed entities, grew at a CAGR of more than 40%. Particularly in the last three years, this earnings stream has contributed more than S$100 million to the Group’s bottom line each year, as we successfully exited from earlier investments through the various funds and joint ventures, and brought to fruition the returns.

SUSTAINING A RETURN ON INVESTED CAPITAL ABOVE THE WEIGHTED AVERAGE COST OF CAPITAL In Ascendas, we use Return On Invested Capital (ROIC) as a metric to assess our efficiency at allocating capital to profitable investments. To account for the volatility inherent in real estate market cycles, we employ a five-year moving average ROIC to even out the fluctuations. Our five-year rolling average ROIC continued to be sustained at 9.9% which is higher than the Group’s weighted average cost of capital (WACC), which ranged from 6.7% to 8.1% in the last 5 years. This is a reflection of our underlying competitive advantage, as the higher ROIC compared to the Group’s WACC translated into a positive economic profit. Economic profit (EP) measures performance by comparing net operating profit to the total cost of capital, which is derived from multiplying the underlying capital investment with the Group’s WACC. A positive EP implies that the net operating profit achieved is able to finance the implied cost of capital and hence contributes favourably to shareholder value. Our total EP accumulated in the last five years totalled above S$380 million.

40

41

FY14/15 FINANCIAL REVIEW

The Group achieved S$400 million in consolidated Profit After Tax (PAT) for FY14/15, as compared to S$354 million recorded for FY13/14. Total income came in lower at S$988 million, vis-à-vis S$1,075 million in FY13/14. A major contributing factor for the lower total income recorded in FY14/15 was the lower sale of completed stratasale units due to the lower inventory available. In FY13/14, when we completed the construction of two development properties AZ@Paya Lebar and 8B@Admiralty, S$360 million of sale was recorded for 341 units sold upon the issuance of Notice of Vacant Possession. In FY14/15, the balance inventory available for sale was significantly lower at 25 units, and sale of S$31 million was achieved for 19 units. Rental income from investment properties for FY14/15, which contributed approximately 22% of the total income for the year, grew by about 34% year-on-year. The increase is attributable to the full year impact of four new properties, namely Ascendas Plaza in Shanghai, DNV GL Technology Centre and DSO Building at Science Park I, and Cedar Building at International Tech Park Pune, which were acquired or completed during the previous financial year.

Ascendas Plaza, Shanghai, China

Recurring fee-based income, which comprised fund and property management fees, amounted to S$139 million in FY14/15. This is approximately 12% higher than the S$124 million achieved in FY13/14. This achievement was possible due to a carry fee of S$12 million earned from Ascendas China Commercial Fund (ACCF). Following the earlier divestment of ACCF’s portfolio in FY13/14, we successfully settled all tax-related matters for the Fund in FY14/15. With the settlement, we were able to distribute the remaining cash to the Fund’s investors and achieved a better than expected internal rate of return. Earnings from our investments in associates and joint ventures, including our listed entities, continued to remain strong and steady. At S$159 million, the year-on-year growth in this earnings stream was about 47%. Particularly, at our partnership with Frasers CentrePoint Limited in Changi Business Park, the divestments of the retail and hotel components of this joint development provided a significant lift to the Group’s PAT.

Ascendas Innovation Towers, Xi-an, China

DNV GL Technology Centre, Singapore

ASCENDAS ANNUAL REPORT 2014/2015

FY14/15 FINANCIAL REVIEW

U N A U D I T E D P R O - F O R M A F I N A N C I A L R E V I E W (FAIR VALUE METHOD) Proforma Income Statement (For the year ended 31 March) (S$ m)

Revenue

FY10/11

316.0

FY11/12

329.8

FY12/13

FY13/14

Restated

Restated

456.3

891.1

FY14/15

609.4

Profit before other gains, finance expense, share of profits from associates & joint ventures, tax and non-controlling interest

138.2

128.1

71.4

337.4

173.8

Other gains/(losses) – net

245.6

275.8

250.6

243.3

166.1

Finance expense

(30.9)

(32.9)

(44.6)

(48.5)

(54.3)

Share of profits from associates & joint ventures

157.0

181.0

116.8

95.0

222.0

Profit before income tax from continuing operations

509.9

552.0

394.2

627.2

507.6

Income tax expense

(67.0)

(66.0)

(24.3)

(88.0)

(39.6)

Profit from operations related to disposal group classified as held for sale, net of tax

3.6

0.1

11.2

13.3

6.2

Non-controlling interests

(16.2)

(31.9)

(24.2)

(47.5)

(12.1)

Profit after tax and non-controlling interests

430.3

454.2

356.9

505.0

462.1

42

43

Proforma Balance Sheet (As at 31 March) (S$ m)

FY10/11

FY11/12

FY12/13

FY13/14

Restated

Restated

FY14/15

2,139.9

2,821.0

3,852.4

3,476.2

Assets Investment properties

1,826.9

Properties, plant and equipment

19.3

19.9

797.1

743.4

716.6

Development properties for sale

9.7

52.4

78.2

28.3

4.9

1,397.0

1,558.3

1,455.7

1,372.0

1,617.9

Cash and bank balances

Investment in associates & joint ventures

435.6

664.8

858.4

855.1

1,124.1

Others

460.0

403.3

422.7

475.0

870.2

4,148.5

4,838.6

6,433.1

7,326.2

7,809.9

715.4

1,087.4

1,582.3

1,963.1

1,875.7

Total Assets Liabilities Borrowings / medium term notes

589.3

691.6

884.6

883.5

1,014.7

Total Liabilities

Others

1,304.7

1,779.0

2,466.9

2,846.6

2,890.4

Net Assets

2,843.8

3,059.6

3,966.2

4,479.6

4,919.5

2,660.8

2,867.3

3,012.0

3,404.0

3,778.5





296.0

296.0

296.0

Equity Shareholder’s funds Perpetual capital securities Non-controlling interests Total Equity

183.0

192.3

658.2

779.6

845.0

2,843.8

3,059.6

3,966.2

4,479.6

4,919.5

16.8

16.4

11.9

15.3

12.5

25

36

40

44

Financial Ratios Return on equity (%) Gross debt equity ratio (%)

423

The unaudited financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS). Investment properties are measured using the fair value model under FRS 40 – Investment Property. Comparatives for FY12/13 and FY13/14 have been restated to take into account the retrospective adjustments relating to FRS 110 – Consolidated Financial Statements.

3



Gross debt equity ratio for FY14/15 includes the borrowings amounting to S$170.8 million relating to disposal group classified as held for sale.

ASCENDAS ANNUAL REPORT 2014/2015

TREASURY HIGHLIGHTS

MARKET LIQUIDITY AND FUNDING ACTIVITIES DURING THE YEAR During FY14/15, liquidity remained ample despite the United States Federal Reserve ending its QE stimulus programme. Financial markets had expected interest rates to subsequently rise. However, this did not materialise as global inflation remained subdued because of slow global economic growth and the sharp decline in oil prices. Thus, outside the US, central banks, the most significant of which were the European Central Bank and the Bank of Japan, continued to ease monetary policy. The resulting substantial build-up of liquidity in the global markets had a positive spill-over effect on liquidity in Singapore. This in turn facilitated the Group’s fund-raising activities.

GROUP’S LOAN PROFILE

Capitalising on the favourable market environment, the Group secured total bank facilities of S$336 million in FY14/15 at competitive interest rates. We also mitigated refinancing risk by taking on longer tenor (more than 5 years) borrowings to extend the maturity profile of our borrowings.

CNY 14% (S$276m)

FUNDING CAPACITY As at 31 March 2015, the Group’s total available funding capacity was S$1,775 million, comprising cash reserves and credit facilities as shown below. Total Funding Capacity

(i)

Breakdown by funding currency

JPY 6% (S$125m) KRW 11% (S$225m)

AUD 12% (S$244m)

INR 2% (S$46m)

USD 0.01% (S$10m) SGD 55% (S$1,126m)

With operations spanning across Asia, our funding needs are primarily met by local borrowing, which also provides a natural hedge against foreign currency risks. Singapore, being our home market, makes up our largest business segment and hence, our largest source of borrowing. In managing the Group’s borrowings portfolio, we diversify the concentration risk in loan maturity by spreading out the loans’ tenors, as well as taking into account the investment holding period. We regularly review our loan portfolio, planning ahead for refinancing of large loans. The resulting average debt maturity was 3.23 years as at 31 March 2015, compared to 3.56 years in FY13/14.

Committed facilities 22%

Cash 62% Uncommitted facilities 16%

In addition to the above, the Group has an available S$2-billion multicurrency Medium Term Note (MTN) programme. This enables the Group to fund its planned growth and to capitalise on any attractive investment opportunity that may arise.

44

(ii)

45

INTEREST COVER RATIO The interest cover ratio was maintained at 9.42 times in FY14/15, indicating the healthy credit profile of the Group.

Loan Maturity Profile (in calendar year) (in S$’million)

Interest Cover Ratio (times) 145 10 52 22 4 4

85

125

14 6 54

159 24

10.38

9.36

9.66

9.38

9.42

FY12/13*

FY13/14*

FY14/15

14

171

80

221

235

192

223

175

24

14



FY10/11

FY11/12

2015 2016 2017 2018 2019 2020 2021 2024 n SGD n AUD

n INR n KRW

n JPY n USD

n CNY

INTEREST RATES MANAGEMENT As part of our liability management strategies, we manage our interest rate risks through an appropriate mix of fixed and floating rate borrowings, taking into account the market outlook. As at 31 March 2015, the ratio of fixed to floating rate borrowing was 74% to 26%.

DEBT TO EQUITY RATIO The Group’s debt-to-equity ratios as at 31 March 2015 were 0.58x (gross) and 0.27x (net of cash). These relatively low debt-to-equity ratios give Ascendas the headroom to fund its business needs adequately and pursue opportunistic investments. Debt / Equity Ratio 0.61x 0.55x

0.58x

0.55x

Breakdown of Fixed-rate and Floating-rate Borrowings 0.38x 24%

33%

21%

23%

0.37x 0.28x

26%

0.27x

0.21x 0.15x

76%

67%

79%

77%

74%



FY10/11

FY11/12

FY12/13*

n Gross debt / Equity



FY10/11

FY11/12

FY12/13*

n Fixed rate

*

FY13/14*

FY13/14*

FY14/15

n Net debt / Equity

FY14/15

n Floating rate

Comparatives for FY12/13 and FY13/14 have been restated to take into account the retrospective adjustments relating to FRS 110 - Consolidated Financial Statements.

ASCENDAS ANNUAL REPORT 2014/2015

FY14/15 FINANCIAL REVIEW

SUMMARY (S$ m)

FY10/11

FY11/12

FY12/13

FY13/14

Restated

Restated

FY14/15

Funding Capacity Available and unutilised

476

245

138

265

671

Cash and cash equivalents (excluding cash pledged)

410

617

790

788

1,104

Unutilised facilities and funds available for use

886

862

928

1,053

1,775

1,000

1,000

1,000

1,000

1,000

50

50

50

50



299

365

477

556

609

Debt Security Capacity Debt securities capacity Debt securities issued Interest Cover Ratio Earnings before net interest, tax, depreciation and amortisation Finance cost

32

35

49

59

65

Interest cover ratio (x)

9.4

10.4

9.7

9.4

9.4

440

723

729

919

1,018

Secured Debt Ratio Unsecured debt Secured debt % of debt secured

222

342

810

1,000

1,034

31%

31%

51%

51%

50%

Debt Equity Ratio Gross debt Equity Gross debt equity ratio (%)

712

1,115

1,589

1,969

2,052

1,872

1,985

2,902

3,221

3,555

38%

55%

55%

61%

58%

Comparatives for FY12/13 and FY13/14 have been restated to take into account the retrospective adjustments relating to FRS 110 - Consolidated Financial Statements.

46

47

BUSINESS REVIEW

ASSETS UNDER MANAGEMENT Our Assets Under Management (AUM) grew from just above S$11 billion at the end of FY10/11 to S$16.8 billion at the end of FY14/15. This equates to a compound annual growth rate (CAGR) of 11% achieved over the last five years. In line with our business model to grow via third party funds, we continue to maintain an 80:20% split between the assets held via funds and the assets held on our own balance sheet.

Going forward, we will continue to push for growth in our core markets to deepen our presence. We will also broaden our existing competencies to increase our exposure to Central Business District and suburban offices, so as to be able to offer a complementary and complete suite of business space solutions to our customers in our key locations.

In terms of the AUM distribution by location, 60% is held in our home base, Singapore, which continues to be a key market. Our other core markets are India and China, each with more than 10% of AUM allocated. In terms of the AUM distribution by segment, our mainstay is in business parks and industrial space, where our core strengths and competitive advantage reside. AUM by Country (S$ bil)

AUM by Asset Class (S$ bil)

Australia 0.64, 4% Korea 1.34, 8%

China 2.54, 15%

India 1.88, 11%

Japan 0.31, 2%

Malaysia 0.11, 1%

Logistics 1.50, 9%

Vietnam 0.09, 0%

S$16.8 bil

Hospitality 1.38, 8%

Singapore 9.91, 59%

Hi-Spec Industrial 2.41, 14%

Light Industrial 2.15, 13%

Retail 0.03, 0%

S$16.8 bil

Business Park 7.63, 46%

Office 1.73, 10%

ASCENDAS ANNUAL REPORT 2014/2015

COUNTRY REVIEW

SINGAPORE We continued our strong performance in Singapore, growing our AUM to S$9.9 billion as at 31 March 2015. ONE@Changi City, the business park component of Changi City in Changi Business Park, hit a high occupancy rate of 97% with the expansion of existing key tenant, JP Morgan. Other Grade-A tenants located in ONE@Changi City include Credit Suisse, EMC and Bank of Tokyo Mitsubishi. Reflecting the focus on our core business in business park space, we divested the retail component, Changi City Point, to Frasers Commercial Trust in June 2014. The divestment of the hotel component, Capri by Fraser, was also completed in March 2015. In line with our strategy to unlock asset value, we also carried out the divestment of some assets during the year. Standard Chartered @ Changi 2 (Phase II) building in Changi Business Park, a Built-To-Suit (BTS) facility providing a gross floor area (GFA) of 18,850 sqm, was divested to our customer, Standard Chartered Bank. Avanstrate building, a special-built singlelease facility located in Tuas, was sold to JTC following Avanstrate’s exit from Singapore. We also divested Kendall, a 6-storey research and development building in Science Park II with a GFA of approximately 20,000 sqm, to A-REIT. Through these divestments, we achieved S$155 million in divestment gains, which boosted the profitability of the Group. Ascendas continued to be a partner of choice for customers who require additional space to meet their business growth. Following the successful completion of a BTS facility for DSO National Laboratories (DSO) in Phase 1, Ascendas has commenced the construction of the DSO Phase 2 facility. Located next to DSO Phase 1, the development comprises an 8-storey block with a multi-storey carpark. DSO Phase 2 will provide a total GFA of approximately 46,000 sqm when completed in the third quarter of 2015.

Nucleos, Ascendas’ new facility specially built for biomedical companies in one-north, achieved an occupancy rate of over 50% after securing an anchor tenant who took up 30% of the space. Other well-established companies located in the building include Takeda Pharmaceutical and Ingredion. As part of the rejuvenation of Singapore Science Park, Ascendas is redeveloping two plots of land at the entrance of Science Park I. The new development, named Ascent, has a total GFA of approximately 51,600 sqm. Ascent comprises a 7-storey business park building with a single storey retail block. The development received the Building and Construction Authority (BCA) Green Mark Platinum award, and is scheduled for completion in the first quarter of 2016. As part of the rejuvenation project, Singapore Science Park will also launch a new branding that reflects the vibrancy of the park. We sought innovative solutions to curb rising operating expenses and improve productivity. A key initiative we embarked on was the Integrated Real Estate Management Services (iREMS). iREMS is an enterprise system that will integrate our core business functions such as leasing, facilities management and development management across Ascendas’ operations, enabling higher efficiency, centralised data collation and provide an improved customer experience. We expect the project to be progressively rolled out from the fourth quarter of 2015. We are also exploring setting up an Operations Command Centre to integrate the Building Management System (BMS) of each building. With centralised, real-time monitoring, it will enable our employees to provide proactive facilities management services, and enhance our customers’ experience with Ascendas. Another initiative we took was to call for bulk tenders in procuring services such as cleaning, electricity supply and lift modernisation. Through the exercise, we achieved a total saving of approximately S$24 million. We have also achieved significant property tax savings amounting to approximately S$1.1 million from rent-free period vacancy claims, through

48

diligently keeping ourselves abreast with latest Government policy changes.

building at Science Park I, will be the first property to adopt the BIPV technology.

Ascendas actively pursued green initiatives to efficiently manage our energy consumption, which is in line with our approach to environment sustainability. One of the highlights was our collaboration with BOSCH to explore the use of renewable energy. In this project, Ascendas studied the viability of cladding our developments with Building-Integrated Photovoltaics (BIPV) material, which can enhance a building’s energy efficiency and reduce its carbon emission. Ascent, our new

More than just a landlord, we differentiate ourselves through cultivating deep relationships with our tenants, providing solutions that cater to their employees’ needs. In October 2014, we partnered the Health Promotion Board to organise the Healthy Lifestyle Month for our tenants and their employees. The month-long campaign saw over 950 participants in a series of health and fitness activities carried out at Ascendas’ various business parks, culminating in a finale at SCAPE Orchard on 8 November 2014.

Galaxis, Singapore

49

Nucleos, Singapore

Ascent, Singapore (Artist Impression)

ASCENDAS ANNUAL REPORT 2014/2015

COUNTRY REVIEW

CHINA In China, we grew our AUM to S$2.5 billion and achieved a total GFA of 1.2 million sqm. The completion of projects under development will provide another 1 million sqm of space. In Suzhou, we completed the final phase development of Ascendas iHub Suzhou in June 2014. The park offers our customers a choice of 20 standalone office villas as well as approximately 120,000 sqm of business space within four office towers. At Ascendas-Xinsu in Suzhou Industrial Park, our project to convert part of the industrial space within Xinsu Square to business and office uses is on schedule to complete in FY15/16. The upgrading will enhance the park’s asset value and enable companies to locate their production operations as well as corporate offices within our park. Ascendas OneHub GKC, an integrated development located in Guangzhou Knowledge City comprising residential apartments, business space and lifestyle amenities, is developing on schedule. During the year, we also completed the development of the amenities and sporting facilities at Dalian Ascendas IT Park. Employees at the park enjoyed the vibrancy created through the activities and events held at the brand new facilities, which in turn boosted awareness about the park and attracted quality tenants into it. Ascendas Lotus Business Park, Shanghai, China

In Hangzhou, Phase 1 of Ascendas’ SingaporeHangzhou Science & Technology Park was fully completed, providing a total GFA of over 132,000 sqm, and leasing of the space has gained traction. We commenced development for Phase 2, which will provide the scale needed to deepen our presence in Hangzhou. In Xi’an, Ascendas Innovation Hub performed above expectations, maintaining full occupancy since FY11/12. Encouraged by the steady demand and good performance, we deepened our presence in the city and commenced development of Ascendas Innovation Towers, a green field site that was acquired in June 2014. When completed, Ascendas Innovation Towers will provide 94,756 sqm of business space with 500 underground carpark lots to meet the growing demand from our existing and new customers. Shanghai was another city where we deepened our presence during the year. We acquired Ascendas Lotus Business Park and a research and development park project, growing our presence in the city by 102,000 sqm. The two parks are located in Zhangjiang, a district that was re-designated by the government as a Free Trade Zone in March 2015. We have also completed the S$13-million asset enhancement initiative for Ascendas Plaza. The upgrading includes the building’s façade, office as well as retail space to meet rising market demands for a contemporary urban family-lifestyle mall.

Ascendas iHub, Suzhou, China

50

INDIA As at 31 March 2015, Ascendas’ AUM in India amounted to S$1.9 billion, which comprises 0.87 million sqm of completed business space, as well as land under or awaiting development. We invest in India directly through the Group as well as through funds managed by us. Ascendas manages three India-specific funds, namely Ascendas India Trust (a-iTrust), and two private funds, Ascendas India Development Trust and the Ascendas India Growth Programme. Our developments in Pune, Chennai and Gurgaon are progressing on schedule. In addition to those reported under a-iTrust, below are the highlights of our India operations for FY14/15.

51

Hitachi Automotive Systems commenced trial production within the township in August 2014, while Ajinomoto India and Takasago are scheduled to commence operations by mid2015 and mid-2016 respectively. Liwayway, a Philippine snack manufacturer which will be occupying three hectares of land, plans to commence operations by end-2016. In Gurgaon, Phase 1 of Ascendas OneHub Gurgaon has been completed. In December 2014, we secured the first tenant who will be taking up 3,982 sqm of space within the building. Also in Gurgaon, we are in the process of obtaining agreement to divest the Special Economic Zone 1 in International Tech Park Gurgaon to Ascendas India Growth Programme, one of Ascendas’ India-specific private funds. We have also divested CyberVale to a-iTrust for INR 1.62 billion (S$35.2 million4).

In Pune, Cedar building is fully committed to a leading IT solutions company, which has occupied 55% of the space and is paying holding charges for the balance. The 61,428 sqm building makes up Phase 1 of International Tech Park Pune (ITPP). We have also commenced construction for Phase 2, Juniper building, which will provide a GFA of 57,165 sqm when completed in 2016. In Chennai, Phase 1 of the 585-hectare OneHub Chennai industrial township was completed, offering 130 hectares of industrial land.

Ascendas iHub, Suzhou

4



Converted into SGD using spot exchange rate at the time of acquisition.

Cedar, International Tech Park Pune, India

ASCENDAS ANNUAL REPORT 2014/2015

COUNTRY REVIEW

KOREA Our Korean portfolio comprises four office buildings with a total AUM of S$1.3 billion and a total GFA of 226,922 sqm. These assets are held and managed through four independent single asset funds: Ascendas Korea Office Fund (AKOF), Ascendas Korea Office Fund 2 (AKOF2), Ascendas Korea Office Private Real Estate Trust (AKO-PREIT) and Ascendas Korea Office Private Real Estate Trust 2 (AKO-PREIT2). Since the last financial year, Korea’s slow economic growth and challenging leasing market conditions continued to weigh on our growth. We maintained a cautious approach to our expansion in Korea and focused on improving the quality of returns in our existing portfolio.

SOUTHEAST ASIA As at 31 March 2015, Ascendas’ Southeast Asia portfolio comprises projects in Malaysia and Vietnam. We have grown our portfolio in these markets to a total AUM of S$204 million. MALAYSIA In FY14/15, we made good progress at the 210-hectare Nusajaya Tech Park, our flagship development in Iskandar Malaysia. The integrated tech park is a 60:40 joint venture between Ascendas and Malaysia’s UEM Sunrise. On 12 June 2014, we celebrated the groundbreaking of Nusajaya Tech Park in an official ceremony graced by Singapore’s Minister for Trade & Industry, Mr Lim Hng Kiang, and Malaysia’s Minister of International Trade and

We successfully retained major tenants in our assets, such as Kyobo Life and Samsung F&M, which attributed to our strong portfolio occupancy rate of 98% as at 31 March 2015. We have also managed to achieve a Net Property Income yield of 5.8%, higher than Seoul’s average market yield of 5.5%. With AKOF2 approaching maturity on 26 May 2015, lenders and investors have extended the fund life by one year, which will enable us to source for better divestment opportunities. If the sale is successful, we will be able to realise the capital gains in FY15/16. Concurrently, we are studying other real estate sectors in Korea, particularly the more lucrative sectors such as hospitality and a niche sector, to diversify the existing portfolio. We are also planning to draw on Ascendas’ real estate capabilities for investment and development in Korea.

Industry, Dato’ Sri Mustapa Mohamed. The start-up phase spanning 28 hectares of ReadyBuilt Facilities and land plots for Build-to-Suit developments will be completed by 2016. As at 31 March 2015, we have received 65% precommitment for the Ready-Built Facilities in the start-up phase. VIETNAM In September 2014, Ascendas partnered Saigon Bund Capital Partners on a new 12-hectare development in Ho Chi Minh City, deepening our presence in Vietnam. Named OneHub Saigon, the integrated business park is located at the main entrance of Saigon Hi-Tech Park and will be directly connected to a future metro station. Comprising quality business space, lifestyle amenities, educational facilities and home offices, OneHub Saigon provides a seamless and vibrant work-live-play-learn environment for its tenants and the surrounding community.

52

In Binh Duong, the park community at our 500-hectare Ascendas-Protrade Singapore Tech Park (APSTP) is steadily growing. As at 31 March 2015, 27 companies have invested in the park, of which 15 have commenced operations. The remaining companies will begin operations by early 2016 and beyond. To provide betterintegrated customer solutions to our tenants, we set up a branch office at the Binh Duong Industrial Zone Authority within APSTP, as well as an accredited office to assist tenants in import and export custom related matters.

53

THE PHILIPPINES In July 2014, we divested the 26-storey ACCRALAW Tower in Bonifacio Global City. We continued to provide property and lease management services after the sale, supporting the customers in the office building. We are also providing such services to 23 units of the Ready-Built Facilities in Carmelray Industrial Park II in Laguna. During the year, we secured project management contracts to fit-out multiple expansion offices for a global business process outsourcing company in Bonifacio Global City and a global technology company in Angeles City, Central Luzon.

Nusajaya Tech Park, Iskandar Malaysia (Artist Impression)

OneHub Saigon, Ho Chi Minh City, Vietnam (Artist Impression)

ASCENDAS ANNUAL REPORT 2014/2015

LISTED TRUSTS

ASCENDAS REAL ESTATE INVESTMENT TRUST (A-REIT) A-REIT is Singapore’s largest business space and industrial real estate investment trust and is one of the 30 constituents of the FTSE Straits Times Index. As of 31 March 2015, A-REIT owns a diverse portfolio of 105 properties in Singapore and two in China, comprising over 32.2 million sq ft (GFA) of space. As at end-March 2015, A-REIT’s total AUM stood at S$8.2 billion. A-REIT achieved a full-year distribution per Unit (DPU) of 14.60 cents, an increase of 2.5% over FY13/14 DPU of 14.24 cents. This was underpinned by positive rental reversions of 8.3% over preceding contracted rental rates and contributions from new properties. Net asset value (NAV) per Unit increased from S$2.02 per Unit to S$2.08 as at 31 March 2015. Some key highlights in FY14/15 include: • Accretive and high-quality acquisitions During the financial year, A-REIT enhanced its Singapore portfolio with the acquisition of three high quality industrial properties for a combined value of S$770.6 million. In June 2014, A-REIT acquired Hyflux Innovation Centre, a prime high-specifications industrial property, through a sale-and-leaseback arrangement. Subsequently, Aperia, a newly-completed integrated mixed-use property, was acquired in August 2014.

Aperia, Singapore

Aperia achieved the Green Mark (Platinum) Award, and is 80% leased to renowned and global companies for their headquarters in Singapore. The third acquisition, The Kendall, is the 19th property from the Ascendas Group since A-REIT’s IPO with 8 properties in 2002.

• Prudent capital management Aggregate leverage remains healthy at 33.5%, with no more than 20% of total debt due for refinancing in any one year. As at 31 March 2015, 68.2% of A-REIT’s debt is fixed and 86.1% of its assets are unencumbered. With its strong A3 credit rating from Moody’s, A-REIT refinanced its S$395 million Commercial Mortgage Backed Securities and further diversified its source of funds at competitive rates during the financial year.

• Recognition by investment community A-REIT’s commitment to maintain high standards of disclosures and transparency continues to be recognised by the investment community. For the tenth time, A-REIT was honoured at the Securities Investors Association (Singapore) Investors’ Choice Awards 2014 for the “Most Transparent Company Award” in the REIT category.

54

ASCENDAS INDIA TRUST (A-ITRUST) a-iTrust, a business trust listed in Singapore, manages about 8.1 million sq ft of business space in India. The Trust owns six completed IT parks spread across three cities, namely International Tech Park Bangalore (ITPB) and International Tech Park Chennai (ITPC) and CyberVale in Chennai, as well as The V, CyberPearl and aVance Business Hub (aVance) in Hyderabad. a-iTrust’s portfolio, which serves over 320 customers and their 85,000 skilled employees, achieved a committed occupancy rate of 97% as at 31 March 2015. a-iTrust achieved 6% revenue growth in Indian Rupee terms in FY14/15. Its topline growth was supported by income from Aviator building in Bangalore and positive rental reversions in Chennai. Since listing in 2007, a-iTrust has grown its portfolio’s leasable area, Indian Rupee revenue and net property income at a compound annual growth rate of 11%, 12% and 12% respectively. The Trust will grow by progressively developing vacant land with 2.9 million sq ft of potential leasable area in ITPB. In line with this strategy, a-iTrust is currently constructing Victor, a new 620,000 sq ft IT building in Bangalore. In addition, it will also be developing a new

408,000 sq ft IT building and a multi-level car park with 660 car park lots at The V in Hyderabad. Besides organic growth, a-iTrust is expanding through the purchase of stabilised properties from third parties and its sponsor, Ascendas Group. In December 2014, a-iTrust announced the acquisition of Blueridge Phase Two (BR), a 1.5 million sq ft IT Special Economic Zone (SEZ) at an estimated consideration of up to S$133.0 million5 (₹INR 6,406.6 million). BR marks a-iTrust’s entry into Pune, an important market for both existing and potential clients. In March 2015, a-iTrust acquired CyberVale, a 0.6 million sq ft IT SEZ in Chennai, from Ascendas Group for INR 1.62 billion (S$35.2 million5). a-iTrust consistently applies green technology and sustainable practices to its existing portfolio and new developments. In FY14/15, the Zenith building in ITPC was awarded the LEED Platinum certification, bringing the number of LEED certified buildings in a-iTrust’s portfolio to five in total.

5



Converted into SGD using spot exchange rate at the time of acquisition/ investment.

CyberVale, Chennai, India

55

ASCENDAS ANNUAL REPORT 2014/2015

LISTED TRUSTS

ASCENDAS HOSPITALITY TRUST (A-HTRUST) A-HTRUST, one of the first Pan-Asian hospitality trusts, is a stapled group comprising Ascendas Hospitality Real Estate Investment Trust (A-HREIT) and Ascendas Hospitality Business Trust (A-HBT). As at 31 March 2015, A-HTRUST owns 12 quality hotels with over 4,500 rooms across eight key cities in Australia, China, Japan and Singapore, diversified by hotel classes and hotel operators. These hotels are located close to central business districts, transportation nodes as well as iconic tourist landmarks. A-HTRUST’s seven hotels in Australia are Pullman Sydney Hyde Park, Novotel Sydney Central, Novotel Sydney Parramatta, Courtyard by Marriott Sydney–North Ryde, Pullman and Mercure Melbourne Albert Park, Pullman and Mercure Brisbane King George Square, and Pullman Cairns International6. It also has two hotels in China, namely Novotel Beijing Sanyuan and Ibis Beijing Sanyuan. In Japan, it has Hotel Sunroute Ariake and Oakwood Apartments Ariake Tokyo as well as Osaka Namba Washington Hotel Plaza, which was acquired in April 2014. A-HTRUST’s hotel in Singapore is the award-winning Park Hotel Clarke Quay.

The acquisition of Osaka Namba Washington Hotel Plaza in April 2014 allows A-HTRUST to achieve further geographical diversification and also enhanced cash flow stability through master lease arrangement. In December 2014, the refurbishment of the conferencing facilities in Novotel Sydney Parramatta was completed, and this will help position it to benefit from the growing segment of conferencing events and meetings in Parramatta. A-HTRUST will continue to drive organic growth through active asset management strategies and seek value-accretive acquisitions across Asia, Australia and New Zealand. In FY14/15, A-HTRUST’s revenue and net property income and distributable income grew by 6.0%, 11.8% and 3.0%, respectively from a year ago. The growth was mainly due to contributions from Osaka Namba Washington Hotel Plaza and Park Hotel Clarke Quay (acquired in June 2013) as well as the overall improvement in portfolio performance. On average, its hotels under management contracts in Australia, China and Japan posted growth in revenue per available room of 5.1%, 2.2% and 57.7%, respectively, over the same period last year. 6





Park Hotel Clarke Quay, Singapore

A-HTRUST owns 50% of Pullman Cairns International

56

57

PORTFOLIO DETAILS

Portfolio as at 31 March 2015 Name

Product Type

Effective stake

Total Net Lettable Area (sqm)

SINGAPORE Fleming & Faraday

Business Park

100%

10,657

Chadwick/Curie/Cavendish

Business Park

100%

20,670

The Franklin

Business Park

100%

7,285

The Aquarius

Business Park

100%

3,052

Teletech Park

Business Park

100%

16,056

Science Park I Land Leases

Business Park

100%



Science Park II Land Leases

Business Park

100%



Ang Mo Kio Land Lease

Business Park

100%



Admirax

Light Industrial

100%

43,585

AZ@Paya Lebar

Light Industrial

100%



Built–To–Suit (BTS) for Pratt & Whitney at Seletar Aerospace Park

Light Industrial

100%

14,948

ICON@IBP

Business Park

100%

33,105

Infinite Studios

Business Park

70%

19,005

Nucleos

Business Park

100%

36,593

Galaxis

Business Park

75%

58,554

BTS for Det Norske Veritas at 16 Science Park Drive

Business Park

100%

9,855

Business Park

100%

23,391

Business Park

100%

45,625

Business Park

100%

51,564

Business Park

50%

61,278

BTS for DSO National Laboratories (DSO) at 14 Science Park Drive (Phase 1) BTS for DSO (Phase 2)

1

Redevelopment of No.2 and 10 Science Park Drive ONE@Changi City Changi City Point The Kendall

Retail

3

Capri by Fraser, Changi City

2

4

5

Standard Chartered@Changi 26

Hospitality Business Park Business Park

ASCENDAS ANNUAL REPORT 2014/2015

PORTFOLIO DETAILS

Name

City

Product Type

Effective Stake

Total Net Lettable Area (sqm)

Beijing BDA

Beijing

Light Industrial & Logistics

90%

26,345

Dalian Ascendas IT Park

Dalian

Business Park

50%

146,644

Ascendas OneHub GKC

Guangzhou

Business Park

52%



& Technology Park

Hangzhou

Business Park

80%

95,576

Ascendas Plaza

Shanghai

Office

93%

39,227

Ascendas-Xinsu

Suzhou

Light Industrial

40%

280,684

CHINA

Singapore-Hangzhou Science

Ascendas iHub Suzhou 1A

Suzhou

Business Park

40%

38,699

Ascendas iHub Suzhou 1B

Suzhou

Business Park

40%



Ascendas iHub Suzhou 1C

Suzhou

Business Park

40%



Foseco

Tianjin

Light Industrial

100%

8,136

Ascendas Innovation Hub

Xi’an

Business Park

80%

34,907

Ascendas Innovation Towers

Xi’an

Business Park

40%



Ascendas Lotus Business Park

Shanghai

Business Park

40%

32,753

Chennai

Light Industrial

10%



INDIA OneHub Chennai Ascendas OneHub Coimbatore

Coimbatore

Business Park

13%



Ascendas OneHub Gurgaon

Gurgaon

Business Park

13%

54,627

International Tech Park Gurgaon

Gurgaon

Business Park

13%



International Tech Park Pune

Pune

Business Park

74%

61,428

CyberVale

Chennai

Business Park

Citibank Center

Seoul

Office

6%

19,752

Anam Tower

Seoul

Office

66%

15,001

Signature Towers Seoul

Seoul

Office

30%

99,997

West Finance Center

Seoul

Office

57%

92,173

7

KOREA

58

Name

City

Product Type

Effective Stake

Johor

Light Industrial

60%

59

Total Net Lettable Area (sqm)

MAL AYSIA Nusajaya Tech Park



VIETNAM Ascendas-Protrade Singapore Tech Park

Binh Duong

Light Industrial

14%



OneHub Saigon

Ho Chi Minh

Business park

60%



Taguig

Office

THE PHILIPPINES ACCRALAW Tower8

Name

Effective stake

LISTED ENTITIES A-REIT Portfolio9

17% 23%

a-iTrust Portfolio10 A-HTRUST Portfolio

11

27%

Notes: 1. Estimated date of obtaining Temporary Occupation Permit (TOP) is September 2015. Estimated gross floor area. 2. Estimated date of obtaining TOP is February 2016. Estimated gross floor area. 3. Changi City Point was divested on 16 June 2014. 4. Capri by Fraser, Changi City was divested on 31 March 2015. 5. The Kendall was divested to A-REIT on 30 March 2015. 6. Standard Chartered@Changi 2 was divested in October 2014. 7. Cybervale was divested to a-iTrust on 31 March 2015. 8. ACCRALAW Tower was divested on 24 July 2014. 9. As at 31 March 2015, A-REIT owns a diversified portfolio of 105 properties in Business and Science Parks, High-Specs Industrial, Light Industrial/Flatted Factories, Logistics & Distribution Centres and Warehouse Retail Facilities in Singapore and two business park properties in China, with a total net lettable area of approximately 2.5 million sqm. 10. a-iTrust has a portfolio comprising six IT parks in India, namely International Tech Park Bangalore (ITPB), International Tech Park Chennai (ITPC), CyberVale in Chennai as well as CyberPearl, The V and aVance in Hyderabad. 11. As at 31 March 2015, A-HTRUST’s portfolio comprises 12 hotels with over 4,500 rooms across key cities in Singapore, China, Australia and Japan.

ASCENDAS ANNUAL REPORT 2014/2015

The Galen, Singapore

S H A P I N G F U T U R E We believe that environmental and socially sound practices will add to our competitive edge by driving us to be operationally efficient and economically sustainable. As our regional footprint continues to grow, Ascendas remains committed to building strong partnership within the communities we operate in.

Changi City, Singapore

ASCENDAS ANNUAL REPORT 2014/2015

SCOPE OF THE REPORT

At Ascendas, we look beyond profits to accounting for the wider environmental and social impacts of our business. We believe that environmental and socially sound practices will add to our competitive edge by driving us to be operationally efficient and economically sustainable. Our third annual sustainability report continues to demonstrate our commitment to sustained value creation. This report focuses on our principal activity as a business space solutions provider. It covers the operations of our properties7 in Singapore, China, India and Korea from 1 April 2014 to 31 March 2015. Excluded from the scope of our report are our power plant in International Tech Park Bangalore (ITPB) and our hotel properties under the Ascendas Hospitality Trust (A-HTRUST) portfolio. The power plant has been excluded as our main focus is on the operations of our properties, while A-HTRUST has not been included as its hotels are entirely managed by the various hotel operators. Also excluded from our current year reporting are our operations in Malaysia and Vietnam, as the projects are presently under an early stage of

development. We will include the sustainability performance of these operations when their data systems become better integrated. Our Philippines property was divested on 24 July 2014, hence any performance beyond that date has likewise been excluded from the scope of our current year report. REPORTING STANDARD We have prepared this report in consonance with the Global Reporting Initiative (GRI) G4 Guidelines – “core option” and the GRI Construction and Real Estate Sector Supplement (CRESS). External assurance has not been sought for this reporting period. ENGAGING OUR STAKEHOLDERS We understand our operations may impact and are impacted by others. Recognising this interdependency has driven us to engage proactively with our key stakeholders, so that their feedback can be incorporated to improve the business. Table 1 summarises our approach towards stakeholder engagement, which shows our focus on communications about issues material to our business.

Table 1: Stakeholder Engagement Goals and Methods Stakeholders

Purpose and Goals

Methods of Engagement

Frequency of Engagement

Employees

We value our people, and are committed to fulfilling their career aspirations while providing a business environment that inspires our people to excel.

Company-wide Employee Survey “Our Voice@ascendas”

One-off Initiative

Induction programmes

Upon joining the Group

Management Committee meetings

Monthly

Employee Forums

Biennial

Wellness, sports and social activities

Throughout the year

Internal communication through the Intranet Portal

As and when there are updates

We aim to provide our investors a pride of ownership and maximum shareholder value.

Investment Committee Meetings

As and when required

Investor delight survey

Yearly

Regular updates on Ascendas developments

As and when there are updates

We aspire to provide our customers with a delightful experience.

Regular networking events

Throughout the year

Regular tenant engagement activities

Throughout the year

Tenant Satisfaction Survey

Yearly

Regular updates on Ascendas developments

As and when there are updates

Social and Community activities through Ascendas GIVES Foundation

Throughout the year

Investors

Tenants

Local Communities

7



We advocate the spirit of caring and sharing within our communities.

For a full list of Ascendas’ portfolio and operations, please refer to page 57 - 59 of the annual report.

62

MATERIALITY ASSESSMENT In late FY13/14, we conducted a reassessment of our material issues through a survey with our tenants. The review confirmed the top six important issues that were previously identified from the results of our formal AA1000-guided materiality assessment workshop, held in FY12/13. Figure 1 reflects the Materiality Matrix for the issues identified while Table 2 maps out the list of material issues for reporting against the GRI G4 aspects. We expect the results of the materiality review to remain valid until the completion of the merger between Ascendas and Singbridge Group in June 2015. We also aim to address, in this report, sustainability issues in areas relating to environmental stewardship, health and safety, supply chain screening, talent development and community support. Figure 1: Ascendas Group Materiality Matrix

Important to External Stakeholders

Q R

V T

A

P

C

B D

E

F

S U W

H

G

I L

K

J M O

Important to Internal Stakeholders

N

Issues Determined to be Material from First Formal Assessment in FY12/13 A Tenant Satisfaction B Compliance to mandatory building regulations C Security of Properties D Compliance to code of corporate governance E Corruption and Bribery F Security of information G Health and Safety Protection of general public and adjacent communities H New developments in need of remediation before intended use I Use of materials that are environmentally-friendly J Compliance to voluntary standards relating to building regulations K Contractor health and safety protection L Staff well-being M Business continuity N Succession planning O Non-discrimination against race and gender P Energy Conservation Q Water Conservation R Greenhouse gas (GHG) emissions S Implementation of environmental impact assessments for new developments T Fair labour relations with contractors U Supplier Screening V Fair Competition and Interested Party Transactions W Tenant Screening Top 6 Issues Surfacing from Subsequent Materiality Review in FY14/15 1 Security of properties 2 Security of information 3 Compliance to mandatory building regulations 4 Compliance to Code of Corporate Governance 5 Tenant Satisfaction 6 Corruption and bribery

Table 2: Mapping Material Sustainability Issues to GRI Aspects for Reporting Material sustainability issues Security of properties Security of information Compliance to mandatory building regulations Compliance to Code of Corporate Governance Tenant Satisfaction Corruption and bribery

Corresponding GRI aspects Customer health and safety Customer privacy Compliance Compliance Product and service labelling Anti-corruption

63

ASCENDAS ANNUAL REPORT 2014/2015

CORPORATE GOVERNANCE AND COMPLIANCE

TENANT SATISFACTION

We hold ourselves accountable to our corporate governance framework as set out in pages 27-33 of the annual report. All employees abide by the professional standards underlined in our policies, which cover areas such as corruption and bribery, and whistle-blowing. These policies are readily accessible on the company intranet for easy reference. Every year, our employees sit through an e-learning programme on these policies, where they are subject to passing an assessment. Our management and operational staff also attend training on anti-money laundering annually. In FY14/15, there were no conclusive cases of corruption and no reported cases of non-compliance with laws and regulations.

Maintaining a healthy portfolio of long-term tenants is the lifeblood of our business. Our new tenant management programmes launched in FY14/15 reflect our ongoing commitment to foster positive, attentive relationships with our tenants. We regularly assess tenant satisfaction to understand their needs and the level of performance, to improve our service delivery and enhance tenant retention. We also conduct a regional customer survey annually to obtain their feedback. Table 3: Targets and Results for Tenant Satisfaction Targets

Performance

Customer eQ™ index at or above the industry norm



Achieved for Ascendas overall and Singapore, on track for the other countries

Figure 2: Customer eQTM Index Score 76



77

77

75

77 77

FY12/13 FY13/14 FY14/15 n Industry Norm

n

Ascendas

64

65

S U P P LY C H A I N RESPONSIBILITY

In FY14/15, the annual eQ™ Benchmarking External Customer Delight survey gathered feedback from a total of 1,382 tenants. The results of the survey scored Ascendas at an overall eQ index of 77, which is on par with the industry average and an improvement from last year’s rating. We have performed well in all our countries, particularly in Singapore and China, where the respective eQ index improved by 2 to 4 index points. As part of our commitment in delivering exceptional service to our tenants, we are in the process of designing and implementing the following programmes: • Integrated Real Estate Management Services (iREMS) This 3-year project would streamline our back-office systems and processes across our countries and functions, for increased efficiency and productivity. One prominent feature of the iREMS solution is the use of a mobile-aided application, which is expected to significantly increase the responsiveness of our team in marketing activities and on-site inspections.   • Service Culture Building Project We redesign our tenant experience by addressing their needs through an outside-in perspective. Through setting new service standards, crafting guides on positive or recommended behaviours, building up employee capacity for understanding and responding to tenant needs, we hope to embed a service culture and mindset, in order to bring our performance up to the next level. • Integrated Customers Solutions Beyond offering Built-To-Suit business-space solutions to meet our tenant needs, we will look towards delivering holistic value to our customers through developing a further range of services which would include the development of industry clusters, assistance in recruiting workforce, and business matchmaking for our tenants.

We engage 1,441 active suppliers to provide us with services in construction, maintenance, cleaning, and security, among others. Almost all our suppliers are based close to the location of our operations across Singapore, China, India and Korea. We encourage our suppliers to adopt sustainable procurement practices, wherever possible and applicable. In FY14/15, all 276 new suppliers across our operations were screened through our high standards for pre-qualification, which include, but are not limited to, their project profiles, financial situation, litigation history, track record in health and safety, and preferred ISO or equivalent certifications. Supplier compliance is essential to ensure their practices continue to align with regulatory standards. We mandate all our suppliers to comply with the Ascendas Workplace Safety and Health Management System, as well as relevant government regulations such as the Enhanced Clean Mark Accreditation Scheme (EAS) in Singapore. Supplier performance is regularly evaluated through monthly or quarterly site inspections and annual ISO 14001 and OHSAS 18001 audits. The results are tracked in our internal information management system. Where incidences of nonconformance are found, warning letters are issued to the suppliers and penalties imposed according to the terms of the contracts. In FY14/15, there were no confirmed cases of negative labour impacts in the supply chain. Beyond regulatory compliance, we support the WorkRight initiative in Singapore to raise awareness among low-wage workers of their basic employment rights and benefits. In FY15/16, we will pilot the Mobile Inspection System under our property management arm, which will allow on-site monitoring of supplier performance for timely action.

ASCENDAS ANNUAL REPORT 2014/2015

H E A LT H , S A F E T Y A N D S E C U R I T Y



Zero cases of work-related back injuries and strains caused by lifting operations for employees in Singapore

Achieved

3 incidents, resulting in a total of 76 lost days, for reasons explained on Page 67

Driving our safety efforts is the Workplace Safety and Health (WSH) committee, which spearheads and implements our various policies and initiatives. A life cycle approach from project development through property management to enhancement underpins our safety activities. It includes mandatory risk assessments, regular safety trainings for employees and contractors, frequent site inspections, timely incident investigations, and periodic internal and external audits. A target of achieving zero reportable workplace-related incidents has been set in our Singapore operations. Monthly meetings are held to discuss progress on performance, safety gaps and improvement plans across all operations. We have standard operating procedures in place in case of emergency contingencies such as fire, gas leakages and collapse of structure. Yearly preparedness exercises and biannual fire drills are conducted to familiarise our employees

Figure 3: Number of incident/accidents in Ascendas properties

15

11 10

6 5

3

3

1 0

Employees

Zero reportable workplacerelated incidents for employees in Singapore

SAFETY PERFORMANCE

Contractors

Performance

Vistors

Targets

Employees

Table 4: Workplace Safety Key Performance Indicators

In compliance with the relevant laws, we have mandated our contractors to provide workmen’s accident compensation insurance for their employees. While not required by law, we have also taken public liability insurance in case of mishap to provide adequate compensation to staff and visitors impacted by our operations.

Contractors

WORKPLACE AND TENANT SAFETY

and tenants with emergency response procedures. Following amendments to the Singapore Fire Safety Act in 2014, we have formed Company Emergency Response Teams (CERT) in each building and have developed a comprehensive emergency response plan in accordance with the act. Our CERT members have attended relevant training to prepare them for their new roles.

Vistors

We place great emphasis on our responsibility as a developer and a landlord to minimise risks, protect the safety, and safeguard the health of all those who work with us or visit our properties. Our Workplace Safety and Health Management System (WSHMS) operates in compliance with the internationally recognised OHSAS 18001 standards, locally recognised Singapore bizSAFE STAR, and other local government safety standards. These policies and procedures extend beyond our employees to our contractors and vendors, including tenants and members of the public.

1

FY13/14 FY14/15 n Singapore

n

China

n

India

66

67

FY14/15 saw an overall improvement in our safety performance, with the total number of reported incidents across our employees, contractors, tenants and visitors falling from 18 in FY13/14 to 7 in FY14/15. The common cause of accidents was determined to be slip and fall from obstruction and wet surfaces. We have implemented measures to address this by working with the contractors to demarcate work areas through erecting proper signage and barricades. Moving forward, we intend to step up our safety awareness campaigns to further inculcate the importance of workplace safety to our employees. EMPLOYEE AND TENANT HEALTH AND WELL-BEING We have adopted standard operating procedures to keep public health situations such as dengue fever, haze, and flu pandemics under control. These include structural improvements to eradicate stagnant water collection on top of regular fogging in order to prevent mosquito breeding, more frequent cleaning of air filters during the haze season, and flu pandemic preparedness exercises. We follow the instructions from local authorities in cases where the public situation escalates into a crisis. In addition to occupational health and safety, we actively engage our tenants and employees in health and fitness programmes. We believe that focusing on the benefits of a healthy lifestyle keeps our employees motivated and productive, while creating value for our tenants through meeting their expectations for a conducive work environment. In FY14/15, we launched the Healthy Lifestyle Month, where free mass runs, lunchtime workshops and inter-company sporting competitions were organised for close to 1,000 participants from Ascendas and tenant companies. We have also gone beyond organised activities to introduce the Healthy Workplace Ecosystem to seven business clusters this year. In collaboration with the Health Promotion Board (HPB), this initiative will integrate fitness amenities, activities and healthier dining options into our work environments. Employees sharing a common sporting interest are encouraged to form their own groups, so that they can motivate one another in keeping fit. The workspace of the future will integrate recreation and lifestyle facilities to provide a healthy work-life balance for both tenants’ and our employees. In FY15/16, we are proud to launch the OASIS Club Membership, an exclusive complimentary membership programme for tenants. The

Presentation of token of appreciation to Guest-of-Honour Mr Zee Yoong Kang, CEO of Health Promotion Board, at the Healthy Lifestyle Month

membership allows complimentary use of selected facilities such as the fitness club at the OASIS Clubhouse, located in Singapore Science Park I. SECURITY OF PHYSICAL PROPERTIES Well-secured properties attract tenants by providing them with a peace of mind. Our properties are fitted with a combination of security features as detailed in Figure 4: Figure 4: 3 Levels of Property Security

3 2 1

Level 3 Security of tenant premises Individual tenants install their own security access systems at their units to detect breaches Level 2 Security of common areas within buildings CCTVs, Security Access System and frequent guard patrolling are in place within the buildings Level 2 Security of compound / external areas CCTVs and frequent guard patrolling ensure the space is secured

ASCENDAS ANNUAL REPORT 2014/2015

H E A LT H , S A F E T Y A N D S E C U R I T Y

Our security officers come from certified vendors who conduct regular licensed training for their personnel. Standard operating procedures are also in place to ensure maximum preparedness during threat and contingency situations. We are keenly aware of the different security situations in the countries where we have a presence, and have reinforced security measures in selected operations. For instance, in India, all employees and staff vehicles are issued with a hologram identification sticker. We also installed vehicle arrestors at the main entrances, and power fencing lining the boundary walls of our business park. Apart from deploying armed guards at all gates, our surveillance guards also perform regular random checks. Furthermore, we work closely with and receive intelligence inputs from the local police, the State intelligence Bureau and the Centre for Counter Terrorism. This added precaution enables us to better deal with threats from terrorism that may compromise the security of our properties in India. To-date, there have been no reports of terrorism threats, trespassing violations and incidences of theft. SECURITY OF DATA FOR CUSTOMER PRIVACY We safeguard the responsible use and privacy of our tenants’ data through a robust and comprehensive information

security programme. Our policies and procedures are constantly reviewed and revised to adapt to evolving threats and comply with prevailing regulations. In FY14/15, we appointed a Data Protection Officer, who implemented the Do Not Call (DNC) Registry Checking system in response to the new Personal Data Protection Act (PDPA) in Singapore. Under the new legislation, all telephone numbers will have to be checked against the DNC Registry before any marketing communications may be made. During the year, we also launched the Ascendas Integrated Technology Risk Framework (ITRF) as well as the Bring Your Own Device (BYOD) Directive. The ITRF facilitates the conduct of technology risk assessments in a structured and consistent manner, encompassing areas such as network and application security, change management, and system resiliency. The BYOD Directive lays down the rules for usage of employees’ smartphones, tablets and portable storage drives to access corporate resources. This includes registering such devices with our IT team prior to connecting to the corporate network, and authorising full remote-wipe on devices in case of loss or theft. Figure 5 summarises the information security programme encompassing system, policies and procedures that are currently in place.

Figure 5: Overview of Information Security System, Policies and Procedures Policies 1. Ascendas Information Security Policy 2. Ascendas Integrated Technology Risk Framework 3. Bring Your Own Device Directive Systems 1. Microsoft Active Directory – Provides strong authentication and security functionalities 2. Websense Data Loss Prevention – Secures personal data and protects intellectual property 3. Citrix Mobile Device Management – Secures and support mobile devices use 4. PDPA system of DNC Registry Check 5. Regular system maintenance 6. Incident Response Plan

Specific Actions 1. Regular communication to employees on the corporate standard use of encryption and PDPA 2. Information Security e-learning programme for new employees 3. Monthly Information security awareness newsletter covering topics such as malware, phishing etc. 4. Regular Information Security reports and meetings to track and raise any security related issues

Owing to these measures, there have been no confirmed cases of security breaches regarding customer privacy during the year.

68

69

TALENT DEVELOPMENT

At Ascendas, we understand that the future and success of our organisation depends on the quality of our human capital. Therefore it is our objective to build and develop a strong talent pipeline of leaders and employees. In today’s fast-paced environment, our team must constantly explore new ideas and new ways of working to remain a formidable force in our competitive arena. We are hence committed to create a culture that promotes meritocracy, learning and growth. Profile of our Workforce In FY14/15, our staff strength stood at 1,127 employees, 95% of whom were permanent staff, with almost 100% working full-time with us. Among our workforce, more than half was based in our Singapore operations, while the gender ratio was generally balanced. Please refer to Figures 6 – 7 for further details. Figure 6: Total Workforce by Employment Category



10%

10%

10%

40%

38%

36%

46%

49%

51%

4%

3%

3%

FY12/13 FY13/14 FY14/15

n Non-Executive n Middle Management



n Executive n Senior Management

Figure 7: Total Workforce by Geography and Gender

49%

48%

49%

49%

47%

48%

51%

52%

51%

51%

53%

52%

FY12/13 n Overseas n Female

FY13/14 FY14/15 n Singapore n Male

In FY14/15, we welcomed 211 new hires with the continued expansion of our business. Our annual turnover rate companywide was 11.6%. In Singapore, our turnover rate was at 14.3%, which falls below the range of 16-20% that has been experienced by our Singapore operations for the past three years. This was lower than the national industry average of 20.4%8. Our China and India operations fared better with respective turnover rates of 6.2% and 7.7%, which were lower than the respective national industry averages of 19% and 13%. The turnover rate in other countries was higher due to the divestment of our Philippines property as well as voluntary resignations at our Malaysia and Vietnam office, largely for pursuing higher studies, or alternative career options. A further breakdown of our recruitment and turnover may be found in Figures 8 – 10. We understand that the loss and replacement of employees may lead to disruptions in productivity and efficiency, besides added training costs of new recruits. We therefore strive to continue enhancing our employee retention strategies to engage our employees and provide them with meaningful learning and career opportunities.

8



The 2014 national industry turnover rate is obtained from the Ministry of Manpower and annualised for a like-for-like comparison.

ASCENDAS ANNUAL REPORT 2014/2015

TALENT DEVELOPMENT

Figure 8: Annual Recruitment & Turnover rate by Geography (%) 26.9 22.9

20.9 17.7 14.3 9.7

7.7

6.2

Singapore China n Recruitment Rate

India Others n Turnover Rate

Figure 9: Breakdown of Total Recruitment & Turnover by Gender (%)

COMMITMENT TO LEARNING AND DEVELOPMENT Our annual key learning focus areas address specific staff development needs for each year. Training programmes are then drawn up and dedicated to these areas under a learning plan. We consciously strengthen our talent pipeline at different stages of their careers through a series of mainstay talent development initiatives as detailed in Figure 11. An annual Education Assistance budget is also set aside to sponsor our employees who wish to advance their educational qualifications. Our Ascendas Qualification Award recognises staff members who have successfully completed their parttime degrees. Figure 11: Mainstay Talent Development Initiatives

53.6

53.1

46.9

46.4

Career Development Planning Short and Long term career planning and development opportunities

17.7

Leadership Development Improve leadership effectiveness through approaches such as participation in Executive Education Programmes

Male Female n Recruitment Rate

n Turnover Rate

Figure 10: Breakdown of Total Recruitment & Turnover by Age (%) 75.2 65.4

30.3 17.6 4.3

Under 30

30-49

n Recruitment Rate

7.2

50 and Above

n Turnover Rate

Talent Development Program 18-Month Ascendas Management Associate Program for young university graduates to develop leadership potential

70

We continue to foster employee skill development as we pursue business growth, through tracking and monitoring the amount of learning undertaken by our employees during the year. We maintain a minimum target for training participation across all country operations, as detailed in Table 5. In FY14/15, our employees achieved an average of 30.3 hours of training. Figures 12 - 13 show the breakdown of training hours in gender and employee category.

Figure 12: Annual Average Training hours per employee by employment category (No. of hours) 51

33

Performance

Singapore: 2 courses per employee

Achieved 3.0 courses per manager and 2.5 per staff

China: 2 courses per employee

Achieved 3.1 courses per manager and 2.8 per staff

India: 2 courses per employee

Achieved 2.2 courses per manager and 2.3 per staff

Others: 2 courses per employee

Achieved 2.9 courses per manager and 2.5 per staff

32

27

26

27

23

16

Table 5: Targets and Results for Average Training Courses per Employee by Country Targets

71

32 32 18

13

FY12/13

FY13/14

n Senior Management n Executive

FY14/15

n Middle Management n Non-executive

Figure 13: Annual Average Training hours by gender (No. of hours) 40 30

31

34 29

26

31

22

20 10 0

FY12/13

FY13/14 FY14/15

n Male

n Female

As compared to FY13/14, our middle management, executives and non-executives had attended, on average, more hours of training in FY14/15. This was largely due to an increase in training related to business finance, business negotiations, business communications and customer service across Singapore, China and India. This reflects our management’s recognition of the increasing importance of staff development in a highly competitive landscape. There was a spike in training hours for our senior management in FY12/13, due to a singular case of a part-time course attended by one management staff. The training hours for the senior management have normalised in FY14/15.

ASCENDAS ANNUAL REPORT 2014/2015

ENVIRONMENTAL SUSTAINABILIT Y

Table 6: Targets and Results in Environmental Performance Targets

proper development and management of our business. Life cycle analysis conducted from the design stage enables us to seek innovative ideas in designing sustainable and valueadding buildings. Since 2012, we have gone the extra mile of achieving a minimum BCA Green Mark9 GoldPLUS Standard for all new developments in Singapore and the US Green Building Council Leadership in Energy & Environmental Design (USGBC LEED) Silver or equivalent for our overseas properties. This is two levels above the requirement of Green Mark Certification set by Singapore’s Building and Construction Authority (BCA).

Performance

Reduction in electrical energy intensity of 5% in Singapore

Achieved

Minimum BCA Green Mark GoldPLUS for new properties in Singapore

Achieved

Reduction in electrical energy intensity of 5% in India

Achieved

Reduction in electricity energy intensity of 5% in China

Achieved

Implement at least one sustainable initiative in Korea

Achieved

At the operational stage, we continuously adopt measures to achieve an optimisation of resources that translates to tangible cost-savings. This is achieved by a dedicated team who monitors our energy and water consumption to identify key areas for improvements.

We believe green spaces built to high standards of quality and sustainability can be of social, economic and environmental value to our tenants. Hence, we minimise the environmental impact of our business activities, through

Figure 14 provides an overview of the green building certifications we have attained.

Figure 14: Summary of Green Building Certifications by Country

9



9

6

10

2

2

9 BCA Green Mark Platinum Buildings in Singapore

BCA Green Mark GoldPLUS Buildings in Singapore

BCA Green Mark Gold Buildings in Singapore

BCA Green Mark Certified Buildings in Singapore

BCA Green Mark Gold Offices in Singapore

1

2

1

1

1

IGBC Leed Platinum (Core and Shell) in India

IGBC Leed Gold (Core and Shell) in India

IGBC Leed Silver (Core and Shell) in India

USGBC Leed Platinum (O&M) in India

USGBC Leed Gold (O&M) in India

1

1

3

1

USGBC Leed Gold (Core & Shell) in India

USGBC Leed Silver (O&M) in India

USGBC Leed Gold (Core & Shell) in China

Korea Green Building Certification (Platinum)

This link to BCA provides details of the various BCA building certifications: http://www.greenmark.sg/

72

73

We report our environmental performance based on properties that are under our operational control. This excludes single-tenanted properties, as the tenant typically assumes full operational and building management of the building. For multi-tenanted arrangements, our environmental performance reports the landlord’s consumption, which includes Ascendas’ offices, centralised building facilities and common areas.

intensity of our Singapore portfolio, in support of the national target to achieve a 35% improvement in energy intensity levels by 2030. We abide by the 2013 Energy Conservation Act, which mandates energy efficiency requirements and management practices to promote energy conservation and reduce environmental impact. In managing our energy usage, we have complied with the respective regulations in each country of our operations.

ENERGY CONSUMPTION Our Singapore operations represent the most significant user of energy. In FY14/15, more than 50% of our energy consumption was from Singapore, a direct consequence of the size of our local portfolio. In consideration of this, we have set internal targets of a 5% reduction in energy

We constantly look into energy saving initiatives to lower our energy consumption across our operations. The key highlights of our current year initiatives, summarised in Table 7, yielded a total of 7.9 million Kilowatt hour (kWh) savings, which is equivalent to the household consumption of 1,725 four-room apartments in Singapore annually10.

Table 7: FY14/15 Key Highlights of Energy Efficiency Initiatives and Their Savings Country of Operations

Initiatives

Performance Savings

Singapore

• Upgrading of chiller plant

• 2,300,000 kWh

Korea India China

• • • •

• 197,453 kWh • 3,535,000 kWh • 1,886,323 kWh

10

Optimisation of elevator operating system and air-conditioning Installation of LED energy-saving light fittings and sensors for light and water Installation of sensors for light Turning down surplus transformer

According to Singapore Power Ltd, the national average consumption is 4,590 KWh per 4-room household yearly consumption for 2014.

ASCENDAS ANNUAL REPORT 2014/2015

ENVIRONMENTAL SUSTAINABILIT Y

Our operations are mainly powered using grid electricity, while a small amount of diesel, liquefied natural gas and steam is used to run part of our operations in China and Korea. Figures 15 - 16 detail our respective aggregated indirect (attributed to electricity) and direct (attributed to fuel sources) energy consumption. Figure 15: Indirect Energy Consumption and Intensity

223

221

200

54.0 52.0

50.6

150 100

48.0

46.4

50

46.0 44.0

0

FY12/13 FY13/14 FY14/15

n Philippines n China



n Korea n Singapore

42.0

Figure 17: Indirect Carbon Emissions13 and Intensity

n India Intensity

150,000

Figure 16: Direct Energy Consumption11 and Intensity12

50

50 Energy Consumption (TJ)

14.0

55

41

40

10.5

10.1

30

12.0

12.6

10.0 8.0

20

6.0

10 0 n Korea

FY12/13 FY13/14 FY14/15

n China

Energy Intensity (TJ/m2)

60

CARBON EMISSIONS Our consumption of electrical energy is the main contributor to our carbon emissions. Through improving the energy efficiency of our buildings, we continue to focus on reducing our carbon footprint across our operations. In FY14/15, we experienced a decrease in our indirect and direct carbon emissions intensity, which is consistent with the fall in our energy intensity.

144,434

139,732

134,618

130,000

0.10 0.08

110,000 0.06

90,000 70,000

0.04 0.03

0.03

0.04

50,000 0.02

30,000

10,000

FY12/13 FY13/14 FY14/15

n Philippines n China



n Korea n Singapore

Carbon Emissions Intensity (Tones CO2 /m2)

220

In FY14/15, our direct energy consumption has decreased slightly to 50 terajoules (TJ), mainly due to optimisation of the air-conditioning system in Korea.

Carbon Emissions (Tonnes CO2)

250

56.0

54.0

Energy Intensity (kWh/m2)

Energy Consumption (million kWh)

300

Over the past three years, we had maintained our total indirect energy consumption at about 221 million kWh, in spite of the increase in our asset portfolio every year. Moreover, we have successfully achieved a reduction of 8.4% in our indirect energy intensity in FY14/15, as a result of our energy efficiency initiatives. Our continuous improvement in our indirect energy intensity over the years demonstrates our staunch commitment in reducing our environmental impact.

0.00

n India Intensity

4.0

Intensity

We applied the default net calorific values from the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. A restatement was made on the direct energy and emission intensity for FY12/13 and FY13/14 to include the gross floor area of the entire asset portfolio. In previous years, the intensity was computed on the gross floor area of the corresponding countries of use. 13 Emission factors used are the national averages for CO2 Emissions per kWh from the “International Energy Agency: CO2 Emissions from Fuel Combustion Highlights: 2013”. 11 12

74

Energy Consumption (TJ)

3,500 3,000

1.1

2,900

1.0 0.9

2,500

0.9

2,000 1,500

0.7

0.7

1,000

0

n Korea

0.8 0.7

3,000,000

0.6

500

1.2

FY12/13 FY13/14 FY14/15

n China

0.5

Intensity

WATER CONSUMPTION The drought experienced by Singapore in FY14/15 has brought to the fore the importance of water conservation. Through closely monitoring our water usage, we strive to reduce our water consumption especially for our operations in water-scarce and water-stressed areas. The main source of our water is derived from municipal supplies. In FY14/15, our total consumption was 2.864 million cubic metres (m3), a 6.2% increase as compared to FY13/14. This is attributable to the continuous expansion of our asset portfolio over the same period of time. Nonetheless, our water intensity has remained fairly stable at around 0.60 m3 per m2, owing to our conscientious efforts in improving water efficiency. This included the adjustment of water flow rates in certain properties in Singapore. In India, our premises share a sewage water treatment facility from which the treated water is subsequently used in our toilets, cooling towers, and for irrigation.

2,500,000 Water Consumption (m3)

3,539

Carbon Intensity (Kg CO2/ m2)

3,793

4,000

Figure 19: Water Consumption and Intensity

2,506,933

2,697,098

2,864,202

0.7

0.65

2,000,000 1,500,000 1,000,000

0.62

0.61

0.60

0.6

500,000



0

0.55 FY12/13 FY13/14 FY14/15

n Philippines n China



n Korea n Singapore

n India Intensity

Water Intensity (m3/m2)

Figure 18: Direct Carbon Emissions12,13 and Intensity

75

ASCENDAS ANNUAL REPORT 2014/2015

COMMUNITY SUPPORT

PARTNERING THE COMMUNITY FOR POSITIVE CHANGE As our regional footprint continues to grow, Ascendas remains committed to building strong partnerships within the communities we operate in. Our philanthropic efforts are achieved through the Ascendas GIVES Foundation (AGF), the vehicle through which we aim to drive positive change in communities and promote the spirit of caring and sharing. In FY14/15, Ascendas donated S$635,000 through the AGF and our country operations to support initiatives that resonated with the three pillars of the AGF – the arts, local communities and the environment. We believe in giving individuals and organisations the space to grow and excel through dedicated programmes that enable these communities to flourish.

76

GROOMING ARTISTIC TALENTS

NURTURING COMMUNITIES

• $120,000 donated to the arts in FY14/15 • Featured sponsor for Singapore International Festival of the Arts and exclusive sponsor for closing performance titled “Festival Heart: Into the Wild” in September 2014. – Performance by 36 youths from Association for Persons with Special Needs (APSN) Centre for Adults, Down Syndrome Association and YSTAR • Donated to I Theatre and Toy Factory to sponsor tickets for secondary school students to attend featured plays and musicals. • Raising awareness of arts through interactive workshops and fringe programmes for young children aged two to eighteen. • $100,000 sponsorship for Suzhou leg of the Singapore Chinese Orchestra’s China tour in May 2014. • $20,000 sponsorship to set up Youth Brass Band in Korea, enabling students from less privileged backgrounds to hone their musical talents.

• $165,000 donation to fund Melrose Home’s renovation work. – Ascendas staff assisted in renovation works by helping to source for contractors, leading negotiations and managing entire renovation process • Raised $20,000 for Arts @Metta through activities to engage staff and customers during “AGF Week” • Partnership with Shanghai Silent Angel Kindergarten to run a special program for 325 children with autism. – More than $20,000 sponsorship to invite Taiwanese experts to conduct the program – Ascendas Volunteers helped to conduct interactive outdoor activities • Education Sponsorship for two local secondary school students from Binh Duong province in South Vietnam • Ascendas staff helped to build a home for a primary school student and his family • Sponsorship of $17,000 for HealthHub in India to provide free health screening and basic medicine for 7,000 people for one year.

CO

GIVES

FOUNDATION

EN

VI

NITY

ASCENDAS

MU

AR

T

M

S

RONMENT

ENVIRONMENT • Partnership with Waterways Watch Society to allow Ascendas volunteers to learn about Singapore’s waterways and clean up the river. • Participated in National Parks Board’s Plant-a-Tree programme where 44 Ascendas volunteers planted 50 mangrove saplings at Sungei Buloh Wetland Reserve. • $10,000 donation to Garden City Fund • Partnership with willing customers to clean up Qing Lin Mountain in Xi’an • Organized Eco-awareness activities in Ascendas India properties.

77

ASCENDAS ANNUAL REPORT 2014/2015

GRI CONTENT INDEX FOR ‘IN ACCORDANCE’ – CORE OPTION GENERAL STANDARD DISCLOSURES General standard disclosures

Section

Strategy and analysis G4-1

Provide a statement from the most senior decision-maker of the organisation (such as CEO, chair, or equivalent senior position) about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability.

Shaping Future (page 60)

Organisational profile G4-3

Report the name of the organisation.

Corporate Profile (page 4)

G4-4

Report the primary brands, products, and services.

Corporate Profile (page 4)

G4-5

Report the location of the organisation’s headquarters.

Corporate Profile (page 4)

G4-6

Report the number of countries where the organisation operates, and names of countries where either the organisation has significant operations or that are specifically relevant to the sustainability topics covered in the report.

Our Presence (page 6) Scope of the Report (page 62)

G4-7

Report the nature of ownership and legal form.

Corporate Profile (page 4)

G4-8

Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries).

Portfolio Details (pages 57-59)

G4-9

Report the scale of the organisation, including: • Total number of employees • Total number of operations • Net sales (for private sector organisations) or net revenues (for public sector organisations) • Total capitalisation broken down in terms of debt and equity (for private sector organisations) • Quantity of products or services provided

Our Presence (page 6) Key Figures (page 7) Profile of Our Workforce (page 69), Figure 6

G4-10

Profile of Our Workforce a. Report the total number of employees by employment contract and (page 69), Figures 6-7 gender. b. Report the total number of permanent employees by employment type and gender. c. Report the total workforce by employees and supervised workers and by gender. d. Report the total workforce by region and gender. e. Report whether a substantial portion of the organisation’s work is performed by workers who are legally recognised as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors. f. Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries).

78

79

General standard disclosures

Key Figures (page 7)

G4-11

Report the percentage of total employees covered by collective bargaining agreements.

None of our employees are covered by collective bargaining agreements.

G4-12

Describe the organisation’s supply chain.

Supply Chain Responsibility (page 65)

G4-13

Report any significant changes during the reporting period regarding the organisation’s size, structure, ownership, or its supply chain, including:

Scope of the Report (page 62)

• Changes in the location of, or changes in, operations, including facility openings, closings, and expansions • Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organisations) • Changes in the location of suppliers, the structure of the supply chain, or in relationships with suppliers, including selection and termination

In June 2015 (after reporting year end), the merger was completed with Ascendas and Singbridge coming together to form the Ascendas-Singbridge Group, which will be jointly owned by JTC and Temasek through a 49:51 partnership.

G4-14

Report whether and how the precautionary approach or principle is addressed by the organisation.

Risk Management and Internal Controls (pages 31-32) Risk Factors (pages 34-35)

G4-15

List externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or which it endorses.

Tripartite Alliance for Fair and Progressive Employment Practices

G4-16

List memberships of associations (such as industry associations) and national or international advocacy organisations in which the organisation: • Holds a position on the governance body • Participates in projects or committees • Provides substantive funding beyond routine membership dues • Views membership as strategic

Agri-Food & Veterinary Authority, ASEAN Infrastructure Fund Limited, Association of Small and Medium Enterprises, Council for Private Education, Institution of Engineers Singapore, Pro-Enterprise Panel, SGX Catalist Advisory Panel, Singapore Cooperation Enterprise, Singapore Green Building Council, The REIT Association of Singapore

ASCENDAS ANNUAL REPORT 2014/2015

GRI CONTENT INDEX FOR ‘IN ACCORDANCE’ – CORE OPTION General standard disclosures

Section

Identified material aspects and boundaries G4-17

a. List all entities included in the organisation’s consolidated financial statements or equivalent documents. b. Report whether any entity included in the organisation’s consolidated financial statements or equivalent documents is not covered by the report.

Scope of the Report (page 62)

G4-18

a. Explain the process for defining the report content and the Aspect Boundaries. b. Explain how the organisation has implemented the Reporting Principles for Defining Report Content.

Materiality Assessment (page 63)

G4-19

List all the material Aspects identified in the process for defining report content.

Materiality Assessment (page 63)

G4-20

For each material Aspect, report the Aspect Boundary within the organisation, as follows:

Materiality Assessment (page 63)

• Report whether the Aspect is material within the organisation • If the Aspect is not material for all entities within the organisation (as described in G4-17), select one of the following two approaches and report either: – The list of entities or groups of entities included in G4-17 for which the Aspect is not material or – The list of entities or groups of entities included in G4-17 for which the Aspects is material • Report any specific limitation regarding the Aspect Boundary within the organisation G4-21

For each material Aspect, report the Aspect Boundary outside the We did not identify any Aspect organisation, as follows: which was material outside of the organisation. • Report whether the Aspect is material outside of the organisation • If the Aspect is material outside of the organisation, identify the entities, groups of entities or elements for which the Aspect is material. In addition, describe the geographical location where the Aspect is material for the entities identified • Report any specific limitation regarding the Aspect Boundary outside the organisation

G4-22

Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.

Energy Consumption (page 74), Footnote 12

G4-23

Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.

Scope of the Report (page 62)

80

General standard disclosures

81

Section

Stakeholder engagement G4-24

Provide a list of stakeholder groups engaged by the organisation.

Engaging Our Stakeholders (page 62), Table 1

G4-25

Report the basis for identification and selection of stakeholders with whom to engage.

Engaging Our Stakeholders (page 62), Table 1

G4-26

Report the organisation’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

Engaging Our Stakeholders (page 62), Table 1

G4-27

Report key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

Commitment to Learning and Development (pages 70-71)

Report profile G4-28

Reporting period (such as fiscal or calendar year) for information provided.

Scope of the Report (page 62)

G4-29

Date of most recent previous report (if any).

Annual Report 13/14

G4-30

Reporting cycle (such as annual, biennial).

Scope of the Report (page 62)

G4-31

Provide the contact point for questions regarding the report or its contents.

Accessibility and Feedback (Back cover of report)

G4-32

a. Report the ‘in accordance’ option the organisation has chosen. b. Report the GRI Content Index for the chosen option c. Report the reference to the External Assurance Report, if the report has been externally assured.

Reporting Standard (page 62) GRI Content Index (pages 78-83) No external assurance has been sought.

G4-33

a. Report the organisation’s policy and current practice with regard to Reporting Standard (page 62) seeking external assurance for the report. b. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided. c. Report the relationship between the organisation and the assurance providers. d. Report whether the highest governance body or senior executives are involved in seeking assurance for the organisation’s sustainability report.

Governance G4-34

Report the governance structure of the organisation, including committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts.

Corporate Governance (pages 27-33)

Ethics and integrity G4-56

Describe the organisation’s values, principles, standards and norms of behaviour such as codes of conduct and codes of ethics.

Code of Business Ethics and Employee Conduct Policy (page 33) Corporate Governance and Compliance (page 64)

ASCENDAS ANNUAL REPORT 2014/2015

GRI CONTENT INDEX FOR ‘IN ACCORDANCE’ – CORE OPTION SPECIFIC STANDARD DISCLOSURES Indicators

Section

Category: Economic EC1

Direct economic value generated and distributed

5-Year Financial Highlights (pages 38-40) FY14/15 Financial Review (pages 41-43)

EC9

Proportion of spending on local suppliers at significant locations of operation

Supply Chain Responsibility (page 65)

Category: Environmental DMA

Disclosure of management approach

Environmental Sustainability (pages 72-75), Table 6

EN3

Energy consumption within the organisation

Energy Consumption (page 74), Figures 15-16

EN5/ CRE1

Energy intensity

Energy Consumption (page 74), Figures 15-16

EN6

Reduction of energy consumption

Energy Consumption (pages 73-74), Table 7

EN7

Reductions in energy requirements of products and services

Energy Consumption (pages 73-74), Table 7

EN8

Total water withdrawal by source

Water Consumption (page 75), Figure 19

CRE2

Water Intensity

Water Consumption (page 75), Figure 19

EN15

Direct greenhouse gas (GHG) emissions (Scope 1)

Carbon Emissions (pages 74-75), Figure 18

EN16

Indirect greenhouse gas (GHG) emissions (Scope 2)

Carbon Emissions (pages 74-75), Figure 17

EN18/ CRE3

Greenhouse Gas (GHG) emissions intensity

Carbon Emissions (pages 74-75), Figures 17-18

EN29

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

There were no significant fines during the year.

Category: Social Sub-category: Labour practices and decent work DMA

Disclosure of management approach

Talent Development (pages 69-71), Table 5

LA1

Total number and rates of new employee hires and employee turnover by age group, gender and region

Profile of Our Workforce (pages 69-70), Figures 8-10

82

LA6

Type of injury and rates of injury, occupational diseases, lost days and absenteeism, and total number of work-related fatalities, by region and by gender

Safety Performance (page 66), Figure 3

Indicators

Section

LA9

Average hours of training per year per employee by gender and by employee category

Commitment to Learning and Development (page 71), Figures 12-13

CRE6

Percentage of the organisation operating in verified compliance with an internationally recognised health and safety management system

Health, Safety and Security (page 66)

LA14

Percentage of new suppliers that were screened using labour practices criteria

Supply Chain Responsibility (page 65)

Sub-category: Society DMA

Disclosure of management approach

Corporate Governance (pages 27-33) Corporate Governance and Compliance (page 64) Tenant Satisfaction (pages 64-65), Table 3 Community Support (pages 76-77)

SO1

Percentage of operations with implemented local community engagement, impact assessments and development programmes

Employee and Tenant Health and Well-being (page 67) Community Support (pages 76-77)

SO3

Total numbers and percentage of operations assessed for risks related to corruption and the significant risks identified

Risk Management and Internal Controls (pages 31-32) Risk Factors (pages 34-35)

SO4

Communication and training on anti-corruption policies and procedures

Corporate Governance and Compliance (page 64)

SO5

Confirmed incidents of corruption and actions taken

Corporate Governance and Compliance (page 64)

SO8

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations

There were no significant fines during the year.

Sub-category: Product responsibility DMA

Disclosure of management approach

Health, Safety and Security (pages 66-68), Table 4

PR1

Percentage of significant product and service categories for which health and safety impacts are assessed for improvement

Health, Safety and Security (pages 66-68)

PR5

Results of surveys measuring customer satisfaction

Tenant Satisfaction (page 64), Figure 2

PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

Security of Data for Customer Privacy (page 68)

PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

There were no significant fines during the year.

CRE8

Type and number of sustainability certification, rating and labelling schemes for new construction, management, occupation and redevelopment

Environmental Sustainability (page 72), Figure 14

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Dalian Ascendas IT Park, China

Dalian Ascendas IT Park, China

Accessibility and Feedback As part of our efforts in environmental conservation, we have printed limited copies of this report. A PDF version is available for download from our website: www.ascendas.com We value feedback from our stakeholders as it allows us to continually improve our sustainability practices. Please share your views, suggestions or feedback to: Ascendas Pte Ltd 61 Science Park Road #04-01 The Galen, Singapore Science Park II Singapore 117525 Email: [email protected]

S T R E N G T H E N I N G F U N D A M E N T A L S

ANNUAL REPORT 2014/2015

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