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ANNUALREPORT 2012

Over the years, Ascott Reit has strengthened its portfolio and achieved greater success through an excellent track record. Staying committed to our goals has propelled us to grow from strength to strength to become who we are today – a trusted company recognised for quality assets and sound management strategies, and an award winning Reit manager that delivers stable returns to Unitholders.

About Ascott Reit

Ascott Residence Trust (Ascott Reit) was established with the objective of investing primarily in real estate and real estate-related assets which are income-producing and which are used or predominantly used as serviced residences or rental housing properties and other hospitality assets.

Ascott Reit’s asset size has more than tripled to about S$2.8 billion as at 31 December 2012 since it was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) in March 2006. When the acquisition of the new Cairnhill serviced residence in Singapore is completed, Ascott Reit’s international portfolio will expand to S$3.2 billion comprising 68 properties with 7,427 units in 25 cities across 12 countries in Asia Pacific and Europe. Ascott Reit’s serviced residences are operated under the Ascott, Citadines and Somerset brands, and are mainly located in key gateway cities such as Singapore, Beijing, Shanghai, Guangzhou, Tokyo, London, Paris, Berlin, Brussels, Barcelona, Munich, Hanoi, Ho Chi Minh City, Jakarta, Manila and Perth.

Ascott Reit is managed by Ascott Residence Trust Management Limited (ARTML), a wholly owned subsidiary of The Ascott Limited (Ascott) and an indirect wholly owned subsidiary of CapitaLand Limited, one of Asia’s largest real estate companies.

Our Vision

We believe in being the premier serviced residence real estate investment trust with quality assets in key global cities.

Our Mission

We believe in delivering stable and sustainable returns to Unitholders.

FROM STRENGTH TO STRENGTHANNUAL REPORT 2012

CONTENTSGlobal Presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Letter to Unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Trust Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16The Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Value Creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

- Active Asset Management . . . . . . . . . . . . . . . . . . . . . 26 - Growth by Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . 28 - Capital and Risk Management . . . . . . . . . . . . . . . . . 30

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Our People and the Community . . . . . . . . . . . . . . . . . . . . 46

- Caring for Our Communities . . . . . . . . . . . . . . . . . . . 48 - Creating a Sustainable Environment . . . . . . . . . . . 50 - Nurturing Our Human Capital . . . . . . . . . . . . . . . . . . 52

Investor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Portfolio Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Operations Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Directory Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191Notice of Annual General Meeting . . . . . . . . . . . . . . . . . 194Proxy Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197Corporate Information

Ascott Reit Annual Report 2012 1FROM STRENGTH TO STRENGTH

Ascott Reit is defined by its vision in being the premier serviced residence real estate investment trust with quality assets in key global cities. Today, our aspirations are evidenced by an international presence of 68 properties across 25 cities in 12 countries.

GLOBAL PRESENCE

FROM ASPIRATION TO INSPIRATION

Ascott Reit Annual Report 20122 FROM STRENGTH TO STRENGTH

ASCOTT REIT’S SHAREOF ASSET VALUES

As at 31 December 2012

Ascott Reit enjoys balance in income stability and growth in view of our extended-stay business model and geographic spread.

25 cities 12 countries7,427 apartment unitsS$3.2 billion1 share of asset values

GLOBAL PRESENCE

1. Includes new Cairnhill serviced residence.

United Kingdom

London

Belgium

Brussels

ParisCannesGrenobleLilleLyonMarseilleMontpellier

France

Germany

BerlinMunichHamburg

Barcelona

Spain


25 cities 12 countries7,427 apartment unitsS$3.2 billion1 share of asset values

China

BeijingTianjinShanghaiGuangzhou

HanoiHo Chi Minh City

Vietnam

Jakarta

Indonesia

Perth

Australia

Singapore

Philippines

Manila

Japan

TokyoKyoto


MILESTONES

FROM THEN TO NOW

2007 Acquired Somerset Azabu East Tokyo S$79.8 million Acquired 60% stake in Somerset Roppongi Tokyo S$36.4 million

Acquired 40.2% stake in Somerset Chancellor Court Ho Chi Minh City S$27.9 million Acquired 18 Rental Housing Properties in Tokyo S$158.6 million

2006 Ascott Reit goes public with an initial portfolio of 12 properties in 5 countries. Acquired SomersetOlympic TowerProperty TianjinS$75.6 million Acquired 40% stake in SomersetRoppongi TokyoS$20.7 million

Acquired Ascott MakatiS$84.4 million

Acquired Somerset Gordon Heights Melbourne S$13.9 million Acquired 26.8% stake in Somerset Chancellor Court Ho Chi Minh City S$8 million

2008 Acquired Somerset St Georges Terrace Perth S$36.1 million Acquired 70% stake in Somerset West Lake Hanoi S$22.9 million

The Ascott Reit story began in 2006, when it became the world’s first Pan-Asian serviced residence real estate investment trust. While the initial asset size of S$856 million has grown to S$3.2 billion, our fundamentals for stability and diversity have remained unchanged. From then to now, they continue to underscore our objectives of steady growth and sustainable returns.


2012 Acquired 60% stake in Citadines Karasuma-Gojo Kyoto S$18.3 million Acquired Ascott Raffles Place SingaporeS$220 million

Acquired Ascott GuangzhouS$63.5 million

Acquired New Cairnhill Serviced Residence S$405 million

Acquired Madison Hamburg S$59.4 million Divested Somerset Gordon Heights Melbourne S$15.3 million Divested Somerset Grand Cairnhill Singapore S$359 million

2011 Acquired 60% stake in Citadines Shinjuku Tokyo S$45.7 million

2010Acquired 2 Asian and 26 European properties S$1.4 billion Divested Ascott Beijing S$301.8 million Divested Country Woods Jakarta S$33.9 million


LETTER TO UNITHOLDERS

FROM PROFIT TO RETURNSDear Unitholders,

Growing from Strength to Strength

FY 2012 ended on a high note for Ascott Reit. The Group’s total revenue for the year reached S$303.8 million while gross profit was S$159.1 million, representing a year-on-year growth of 5% and 1% respectively. Bolstered by a quality portfolio, proactive acquisition, asset management and enhancement strategies, the Group’s distribution to Unitholders for FY 2012 rose 4% to S$99.7 million over the previous year. Distribution Per Unit (DPU) grew by 3% from 8.53 cents to 8.76 cents. The portfolio’s average occupancy for FY 2012 was 80%, a slight increase of 1% over FY 2011, while Revenue Per Available Unit (RevPAU) also rose by 1% from S$143 to S$145. Ascott Reit’s unit price rose 37% in FY 2012 and closed at S$1.36 on 31 December 2012. The DPU for FY 2012 represents a 6.4% yield.

Striking a Balance Between Stability and Growth

With 27 properties in Europe and 41 properties in the Pan-Asian region, the Group’s geographical diversity has ensured greater stability across different economic cycles. All the 27 properties in Europe, and three properties in the Pan-Asian region are supported by master leases and serviced residence management contracts that provide a minimum guaranteed income, which contributed to 44% of the Group’s total gross profit. With their weighted average remaining tenure of about six years, Unitholders will continue to enjoy enhanced income stability over a longer period of time.

Capturing Market Opportunities for Better Returns

Our earnings base was also broadened through yield-accretive acquisitions and matured property divestments. During the year, Ascott Reit divested Somerset Grand Cairnhill Singapore for S$359 million at a 3.8% implied exit EBITDA yield to CapitaLand for redevelopment into a new serviced residence (new Cairnhill serviced residence) and residential development; recognizing a gross divestment gain of S$87.1 million. Proceeds from the divestment were

immediately reinvested in higher yielding properties, namely Ascott Raffles Place Singapore for S$220 million and Ascott Guangzhou for $63.5 million. We have also entered into a fixed price contract of S$405 million to acquire the new Cairnhill serviced residence with expected delivery in 2017. These transactions were recommended by the Audit Committee for Unitholders’ approval as the divestment and acquisitions constituted Interested Party Transactions. We are pleased that extremely strong support with almost unanimous approval from Unitholders was obtained at the Extraordinary General Meeting held on 27 July 2012.

The Group continued to seize market opportunities to optimise returns by pursuing acquisitions, not only from our Sponsor, but from third party owners as well. These included Citadines Karasuma-Gojo Kyoto and Madison Hamburg which were acquired for S$18.3 million and S$59.4 million respectively. In the latter case, we continued to allow the third party to manage our property. At the same time, we unlocked the underlying value of assets that have reached optimal growth as in the case of Somerset Gordon Heights Melbourne in Australia, which was divested at S$15.3 million for a gain of S$0.6 million.

Ascott Reit has come a long way since its initial public offering in 2006. From its initial asset size of S$856 million, the Group’s portfolio has more than tripled in value to S$3.2 billion today. In 2006, Ascott Reit’s initial portfolio comprised 2,068 apartment units, in 12 properties across 7 cities and 5 countries. As at 31 December 2012, Ascott Reit’s portfolio comprises 7,427 apartment units in 68 properties across 25 cities and 12 countries.

Practical Aspirations Leading to Inspiring Results

The Group strengthens Unitholders’ returns by focussing on active asset enhancements to maximise the financial performance of our property portfolio. To command better room rate premiums, we stay relevant to the increasingly sophisticated needs of modern travellers by updating the look and feel of our properties in order to improve overall customer experience.Citadines Prestige Trafalgar Square London, for example, recorded the strongest Average Daily Rates


LIM JIT POHChairman

Independent Non-Executive Director

TAY BOON HWEE, RONALDChief Executive Officer and

Executive Director


LETTER TO UNITHOLDERS

(ADR) since acquisition in 2010 upon completion of refurbishment works of the 187 apartment units in 2012. In Belgium, the 169-unit Citadines Sainte-Catherine Brussels reported higher ADR in Euro terms after the first phase of renovation in February. The second phase was completed in the fourth quarter of 2012. Separately, Somerset Olympic Tower Property Tianjin has been commanding higher rental rates following the completion of renovation of all the 185 apartment units at the end of 2011. In Vietnam, a lobby enhancement initiative in July 2012, following the renovation of all the 185 apartment units at Somerset Grand Hanoi, has improved guest arrival experiences. Overall, rental rates of the above properties have increased by as much as 50% post renovations.

In Indonesia, the refurbishment of the 198-unit Ascott Jakarta, which commenced in July 2012, is scheduled to complete by the fourth quarter of 2013. The renovation of the 154-unit Citadines Toison d’Or Brussels is due for completion in the first quarter of 2014.

To enhance overall brand value and asset yield across Europe, asset enhancements were also carried out by Ascott, our Sponsor cum master lessee in five of our properties across France. Citadines Suites Lourve Paris commenced renovation in July 2012 and will re-open in the first quarter of 2013. This was followed by the phase-two renovation of Citadines City Centre Grenoble, which was completed in the fourth quarter of 2012. Citadines Croisette Cannes underwent refurbishment in October 2012 and completion is expected in the first quarter of 2013. Similarly, the refurbishment of 49 units out of the 101-unit Citadines City Centre Lille in December will be completed in the first quarter of 2013. We also expect enhancement works at Citadines Place d’Italie Paris, which commenced in November 2012, to be completed by the first quarter of 2014.

Our award winning properties continue to enjoy worldwide recognition as preferred accommodation for business travellers. Some of the awards include “Best Serviced Residence in Asia-Pacific” for Ascott Raffles Place Singapore (Ranked 1st) and Ascott Jakarta (Ranked 2nd) by Business Traveller Asia-Pacific Awards 2012; “Best Serviced Apartment Company” for all Citadines branded properties in UK (Ranked 2nd); and TripAdvisor Certificate of Excellence for 18 of our properties in key gateway cities including London, Singapore, Paris and Berlin.

Exercising Prudent Capital Management

Our discipline in capital and risk management has supported our growth by ensuring a strong balance sheet and a financial flexibility to seize market opportunities. As a result, we are able to tap into financial markets and acquire yield-accretive properties when opportunities arise.

As at 31 December 2012, Ascott Reit’s gearing of 40.1% is well within the Monetary Authority of Singapore’s Property Fund Appendix’s gearing limit of 60%. Our interest cover ratio remains healthy at 3.9 times and average borrowing cost is 3.3% per annum with 62% of the debts secured at fixed interest rates. In October 2012, Ascott Reit redeemed in full S$50 million 4.11% Fixed Rate Notes under the S$1 billion Multicurrency Medium Term Note Programme.

On 29 January 2013, Ascott Reit successfully raised S$150 million through a private placement exercise of 114.9 million new units at S$1.305 per new unit. The equity placement will allow us to increase our financial capacity to fund potential future acquisitions. This will in return enable us to further grow and enhance Ascott Reit’s portfolio to boost Unitholders’ returns. We remain confident in the markets that we operate in as we continue to grow the business and enhance value for Unitholders.

Supporting Social Causes

Corporate social responsibility remains an integral part of our business. Over the years, the plight of underprivileged children has remained close to our hearts, and we continue to support them through their subsistence and educational needs. Across our properties, we encourage sustainable and environmentally friendly practices such as water and electricity conservation, waste reduction and recycling efforts by staff and guests alike.

From Then to Now, and Beyond

Global economic outlook is cautious in the year ahead and the European economic situation continues to be fragile. Ascott Reit will actively monitor cash flows generated from our European assets and manage currency risks. We will continue to adopt a natural

FROM PROFIT TO RETURNS


hedge strategy by borrowing in the same currency as the underlying asset. We also aim to maintain a strong balance sheet and financial flexibility. Apart from managing risks in uncertain times, we will continue to drive and optimise returns through yield-accretive acquisitions and asset enhancement initiatives to create greater value for Unitholders. The Group’s income stability remains supported by a strong stable of assets across 25 cities in 12 countries; while its extended-stay business model focussed on corporate travellers, properties on master leases, and serviced residence contracts with minimum guaranteed income, will continue to provide a strong foundation for stability and growth.

Acknowledgement and Board Appointments

With effect from 1 January 2013, Mr Liew Mun Leong resigned as Non-Independent Non-Executive Director, Deputy Chairman of the Board and Chairman of the Executive Committee of the Company following his retirement as President and Chief Executive Officer of CapitaLand Group. Mr Liew had been a Director and Deputy Chairman of the Board since inception. The Group has benefitted immensely from his extensive experience and expertise and would like to express our sincere thanks and appreciation for his significant contributions to Ascott Reit.

On the same day, Mr Lim Ming Yan assumed the position of Deputy Chairman of the Board and Chairman of Executive Committee of the Company upon his promotion to President and Chief Executive Officer of CapitaLand. We wish to congratulate Mr Lim on his new appointment.

Ascott Reit is also pleased to welcome the following two new appointments to the Board on 1 January 2013: Mr Zulkifli Bin Baharudin is appointed as an Independent Non-Executive Director of the Company. Mr Tay Boon Hwee, Ronald, is appointed as an Executive Director of the Company. He continues as its Chief Executive Officer.

With effect from 24 January 2013, Mr Wen Khai Meng has resigned as Non-Independent Non-Executive Director of the Company to focus on his other areas of responsibilities within the CapitaLand Group. We would like to express our thanks and appreciation to him for his valuable contributions to Ascott Reit.

To our serviced residence guests, Unitholders and business partners, we thank you for your continued support. To our staff and Board of Directors, our gratitude for yet another year of hard work, dedication and results.

Lim Jit PohChairman

Tay Boon Hwee, RonaldChief Executive Officer

26 February 2013


致单位持有人

尊敬的单位持有人,

发展不断壮大

2012 财年，雅诗阁公寓信托 (Ascott Reit) 取得骄人的业绩。集团总营业收入达 3 亿零 380 万新元，毛利润则达 1 亿 5910 万新元，分别实现 5% 和 1% 的年比增长。受益于高质量的资产组合，积极的收购、资产管理和物业提升策略，集团可派发分红较上一年增长了 4%，达 9970 万新元。每单位可派发红利从 8.53 分，上涨 3% 至 8.76 分。物业平均入住率达 80%，较前一年略微增长 1%。每间可供出租公寓单位收入也从 143 新元增长 1%，达 145 新元。雅诗阁公寓信托的单位价格全年增长了 37%，年尾闭市收于 1.36 新元，收益率为 6.4%。

在稳定和增长中取得平衡集团拥有 27 个欧洲物业和 41 个泛亚洲区域物业，多元化地区布局确保集团能稳定地渡过不同的经济周期。雅诗阁公寓信托在欧洲的 27 间物业和泛亚洲区的 3 间物业为主租约 (master lease) 出租或拥有最低收入保证的管理合约。2012 财年，这些合约收入占集团总毛利的 44%。这些物业的平均剩余租期约 6 年，单位持有人将在较长一段时间持续享有非常稳定的收入。

捕捉市场契机，争取更高回报通过收购能增进收益率的资产和脱售成熟资产，我们扩大了收入来源。在 2012 年，雅诗阁公寓信托以 3 亿 5900 万新元，相等于 3.8% 的收益率，向凯德集团出售了 Somerset Grand Cairnhill Singapore,实现了 8710 万新元的脱售收益。凯德集团计划将其建成一个全新的服务公寓 (new Cairnhill serviced residence) 及住宅项目。我们将脱售所得投资于更高收益的资产，分别以 2 亿 2000 万新元收购 Ascott Raffles Place Singapore, 以及以 6350 万元收购 Ascott Guangzhou。我们也以 4 亿零 500 万新元的固定价格收购预期在 2017 年建成的 new Cairnhill serviced residence。由于上述买卖交易属于利害关系人交易，因此需在审计委员会推荐下获单位持有人批准。我们很高兴于 2012 年 7 月 27 日召开的临时股东大会上，获得单位持有人的强力支持，取得几乎全体通过的结果。我们不仅向保荐机构雅诗阁有限公司 (The Ascott Limited) 购买资产，也继续把握市场契机从第三方业主收购资产，来优化收益，包括以 1830 万新元收购 Citadines Karasuma-Gojo Kyoto, 以及以 5940 万新元收购 Madison Hamburg。我们还允许第三方业主继续经营 Madison Hamburg。此外，我们也以 1530 万新元脱售 Somerset Gordon Heights Melbourne, 从中获益 60 万新元。

雅诗阁公寓信托自 2006 年上市以来取得长足的发展和进步。集团的资产从 8 亿 5600 万新元的初始规模，增长三倍多，达 32 亿新元。从 2006 年的 5 个国家，7 个城市，12 个物业，共 2068 间公寓单位，到 2012 年年底，雅诗阁公寓信托的足迹已扩展至12个国家的 25 个城市，拥有 68 个物业，共 7427 间公寓单位。

经营实际目标，收获骄人成绩

集团通过专注于积极的资产优化来最大限度地提高物业的业绩，以增加单位持有人的收益。为争取更高的日均房价，我们不断提升物业的外观和质感，改善客户体验，以满足现代旅客越来越多样化的需求。

Citadines Prestige Trafalgar Square London 为例，这家 187 间单位的物业在 2012 年完成翻新工程后，取得自收购以来最高的日均房价。在比利时，拥有 169 间单位的 Citadines Sainte-Catherine Brussels 于 2 月份完成第一期翻新工程后也取得更高的日均房价。其第二期翻新工程已在 2012 年第四季度完工。此外，拥有 185 间单位的 Somerset Olympic Tower Tianjin 在 2011 年底完成翻新工程后，也取得了更高房价。在越南, Somerset Grand Hanoi 的 185 间单位翻新工程和 2012 年 7 月进行的大堂翻新计划，大大提升了到访客人的入住体验。总而言之，以上翻新后的物业房价都取得极大增长，最高达 50%。

在印度尼西亚，拥有 198 间单位的 Ascott Jakarta 在 2012 年 7 月开始翻新工程，预计在 2013 年第四季度完工。拥有 154 间单位的 Citadines Toison d’Or Brussels 的翻新工程预计在2014年第一季度竣工。

为加强我们在欧洲的品牌价值和资产收益，身为我们的保荐机构和法国五个资产的主要承租人，雅诗阁有限公司也对资产进行了优化。Citadines Suites Louvre Paris 于 2012 年 7 月展开翻新工程，预计在2013年第一季度重新开业。Citadines City Centre Grenoble 的第二期翻新工程已在 2012 年第四季度完工。同时，在十月开始翻新的 Citadines Croisette Cannes 与十二月开始翻新的 Citadines City Centre Lille (101 间其中 49 间单位）预计于 2013 年第一季度完成。我们也预计于 2012 年 11 月启动翻新的 Citadines Place d’Italie Paris 将在 2014 年第一季度竣工。

我们的物业继续获全球认可，为商务旅客的住宿首选。我们获得的奖项包括 2012 年商旅亚太评选的“亚太区最佳服务公寓”(第一名: Ascott Raffles Place Singapore; 第二名: Ascott Jakarta), 以及“最佳服务公寓公司”（第二名：英国的所有馨乐庭物业）。全球最大旅游网站 TripAdvisor 也给我们位于主要枢纽城市，包括伦敦、新加坡、巴黎和柏林的 18 个物业颁发年度卓越奖 (Certificate of Excellence)。

从物业收益到投资回报


谨慎的资金管理谨慎的资金和风险管理支持了我们的增长，确保我们拥有强劲的资产负债表和灵活的融资能力以把握市场契机。正因为如此，我们才能把握机会，通过金融市场融资，收购能增加收益的物业。

截至 2012 年 12 月 31 日，雅诗阁公寓信托的负债与资产值比率为 40.1%, 低于新加坡金融管理局房地产基金指导原则下所规定的 60% 顶限。我们的利息覆盖率也保持在健康的 3.9 倍，平均贷款成本为 3.3% 年利率，其中有 62% 是固定利率贷款。2012 年 10 月，雅诗阁公寓信托完全兑现了 10 亿新元的多货币中期票据计划中的 5000 万新元的 4.11% 固定收益票据。

2013 年 1 月 29 日，雅诗阁公寓信托以每新单位 1.305 新元的价格发行了 1 亿 1490 万个新单位，成功筹集了 1 亿 5000 万新元。这项私募行动加强了我们的财务承受能力，以把握未来市场契机，购买有潜力的资产。这让我们能继续扩张和发展，从而增加单位持有人的收益。我们对目前的业务和市场深具信心，将继续稳健的发展，为单位持有人创造更大的价值。

取诸社会，用诸社会

企业社会责任一直是我们业务中的关键部分。多年来，我们关注弱势孩童的成长，并且将继续资助他们的生活和教育需要。此外，我们也鼓励旗下物业的员工和住户实践可持续发展及环保的生活方式，包括水电节能、减少浪费和再循环等。

从过去到现在，以至未来

未来一年，我们对全球经济展望持谨慎态度，欧洲经济形势仍然脆弱。雅诗阁公寓信托将积极监管欧洲资产的流动资金，以及管理货币风险。我们也将继续采取一个自然对冲政策，为关联资产进行同货币贷款。我们的目标是保持强劲的资产负债表和灵活的融资能力。除了在市场不稳定时期管理风险，我们也将继续通过增进收益率的收购和资产优化计划，增加和优化收益，为单位持有人创造更大价值。12 个国家 25 个城市的资产运营强有力的支持集团的收入稳定。而针对商务客的长住商业模式、以主租约的模式出租物业，以及拥有最低收入保证的服务公寓合约，这三个主轴将继续为集团的稳定和发展提供扎实的基础。

致谢与董事会任命

原凯德集团总裁兼首席执行官廖文良先生在荣休后，辞去了雅诗阁公寓信托的非独立非执行董事、董事局副主席和公司常务委员主席的职务，于 2013 年 1 月 1 日生效。廖文良先生自雅诗阁公寓信托创办以来担任董事兼董事局副主席的职务。他的丰富经验和专长让集团受益匪浅。在此我们献上最诚挚的谢意，感谢他对雅诗阁公寓信托所作出的显著贡献。

在同一天，林明彦先生接任凯德集团总裁兼首席执行官的职务，也接任雅诗阁公寓信托董事局的副主席和公司常务委员主席。我们在此祝贺林明彦先生的擢升。

2013 年 1 月 1 日，雅诗阁公寓信托欢迎两名新董事局成员的加入。Zulkifli Bin Baharudin 先生受委为公司独立非执行董事。我们的首席执行官郑文辉先生受委为公司执行董事。

2013 年 1 月 24 日，温启明先生辞去了公司非独立非执行董事的职务，以专注于凯德集团的其他职责上。我们感谢温先生对雅诗阁公寓信托所作出的贡献。

借此，我们由衷感谢我们的住户、单位持有人和商业伙伴对我们长久以来的支持，同时对各位员工和董事局成员的辛勤付出、贡献以及所取得的成绩，表达诚挚的谢意。

Lim Jit Poh林日波主席

Tay Boon Hwee, Ronald郑文辉总裁

2013 年 2 月 26 日


2008 2009 2010 2011 2012

Gross Revenue S$192.4m S$175.5m S$207.2m S$288.7m S$303.8m

Gross Profit S$95.5m S$84.6m S$101.3m S$157.5m S$159.1m

Unitholders’ Distribution S$53.7m S$45.2m S$57.7m S$96.2m S$99.7m

Distribution Per Unit (DPU) 8.78¢ 7.32¢ 7.54¢ 8.53¢ 8.76¢

Distribution Yield1 15.14% 6.10% 6.18% 8.62% 6.4%

Balance Sheet as at 31 December

Total Assets S$1,687.6m S$1,652.0m S$2,803.8m S$3,023.0m S$3,002.5m

Unitholders’ Funds S$899.0m S$825.1m S$1,417.5m S$1,537.0m S$1,547.4m

Total Borrowings S$624.4m S$651.1m S$1,099.5m S$1,204.6m S$1,170.8m

Financial Ratios as at 31 December

Net Asset Value (NAV) Per Unit S$1.47 S$1.34 S$1.28 S$1.36 S$1.35

Aggrerate Leverage 38.3% 41.2% 40.3% 40.8% 40.1%

Interest Cover Ratio2 4.5 times 3.5 times 3.7 times 3.8 times 3.9 times

Management Expense Ratio3 1.3% 1.3% 1.0% 1.3% 1.1%

Derivative Financial Liabilities as a Percentage of NAV4

1.7% 2.3% 0.8% 1.2% 1.3%

Others as at 31 December

Market Capitalisation1 S$354.3m S$740.7m S$1,351.6m S$1,118.6m S$1,554.2m

Number of Units in Issue 610.8m 617.2m 1,107.9m 1,129.9m 1,142.8m

1. Based on the closing unit price of S$0.58 on 31 December 2008, S$1.20 on 31 December 2009, S$1.22 on 31 December 2010, S$0.99 on 31 December 2011 and S$1.36 on 31 December 2012.

2. Refers to EBITDA (earnings before net interest expense, tax, depreciation and amortisation) before changes in fair value of financial derivatives and serviced residence properties, and unrealised foreign exchange differences over net interest expense.

3. Refers to the expenses of Ascott Residence Trust (excluding direct expenses, unrealised foreign exchange differences, net interest expense, change in fair value of financial derivatives and serviced residence properties, assets written off and income tax expense).

4. Derivative financial liabilities refer to the interest rate swaps and interest rate caps which the Group has entered into.

FINANCIAL HIGHLIGHTS


Distributions

Management Services

Management Fees

Net Profit Dividends

Ownership of Assets

Ownership of Shares

Holding of Units

Acts on behalf of Unitholders

Trustee’s Fees

Master LeaseMaster Lease

Serviced Residence

Management Fees

Serviced Residence Management Services

Serviced Residence Management Fees

Master Lease

Income

Master Lease Income

Serviced Residence Management Services

Unitholders

Ascott Residence

Trust

Manager (Ascott Residence Trust Management

Limited)

Trustee (DBS Trustee Limited

– for Unitholders)

Property Holding Companies/

Property Companies

Ascott Raffles Place

Singapore

Citadines Mount Sophia Property

Singapore&

Somerset Liang Court Property

Singapore

Master Lessees

Serviced Residence

Management Companies

Singapore Properties

TRUST STRUCTURE


BOARD OF DIRECTORS

LIM JIT POH, 73CHAIRMAN INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF SCIENCE IN PHYSICS (HONOURS), UNIVERSITY OF SINGAPORE

MASTER OF EDUCATION, UNIVERSITY OF OREGON, USA

Date of first appointment as a director and Chairman 20 January 2006Length of service as a director (as at 31 December 2012) 6 years 11 months

Board committee(s) served on• Corporate Disclosure Committee (Chairman)

Present Directorships in other listed companies • ComfortDelGro Corporation Limited (Chairman)

• SBS Transit Ltd (Chairman)

• VICOM Ltd (Chairman)

Present Principal Commitments (other than Directorships in listed companies)• ComfortDelGro Corporation Limited (Group Chairman)

• Maybank Kim Eng Holdings Limited (Director)

• Surbana Corporation Pte. Ltd. (Chairman)

Directorships in other listed companies held over the preceding three years• Eng Kong Holdings Limited

Background and Working Experience• Independent Non-Executive Director of The Ascott

Group Limited (1999 to 2008)

Award(s)• Distinguished Science Alumni Award 2006 from the

National University of Singapore• National Trades Union Congress - Distinguished Service Award in 2000 - Meritorious Service Award in 1990 - Friend of Labour Award in 1986• Government of Singapore - Public Administration

Medal in 1972

LIM MING YAN, 50DEPUTY CHAIRMAN NON-INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF SCIENCE (MECHANICAL ENGINEERING AND ECONOMICS) (FIRST CLASS HONOURS), UNIVERSITY OF BIRMINGHAM, UK

Date of first appointment as a director 23 July 2009Date of appointment as Deputy Chairman 1 January 2013Length of service as a director (as at 31 December 2012) 3 years 5 months

Board committee(s) served on• Executive Committee (Chairman)

Present Directorships in other listed companies • CapitaCommercial Trust Management Limited

(manager of CapitaCommercial Trust) (Deputy Chairman)

• CapitaLand Limited• CapitaMall Trust Management Limited

(manager of CapitaMall Trust) (Deputy Chairman)

• CapitaMalls Asia Limited• CapitaRetail China Trust Management Limited

(manager of CapitaRetail China Trust) (Deputy Chairman)

• Central China Real Estate Limited

Present Principal Commitments (other than Directorships in listed companies)• CapitaLand Limited (President & Group Chief Executive Officer)

• Business China (Director)

• CapitaLand China Holdings Pte Ltd (Chairman)

• CapitaLand Hope Foundation (Director)

• CapitaLand Malaysia Pte. Ltd. (Chairman)

• CapitaLand Singapore Limited (formerly known as CapitaLand Commercial Limited prior to 15 March 2013) (Chairman)

• CTM Property Trust, Steering Committee (Chairman)

• LFIE Holding Limited (Co-Chairman)

• Shanghai YiDian Holding (Group) Company (Director)

• The Ascott Limited (Chairman)


Directorships in other listed companies held over the preceding three years• Lai Fung Holdings Limited

Background and Working Experience• Chief Operating Officer of CapitaLand Limited

(May 2011 to December 2012)

• Chief Executive Officer of The Ascott Limited (July 2009 to February 2012)

• Chief Executive Officer of CapitaLand China Holdings Pte Ltd (July 2000 to June 2009)

Award(s)• Outstanding CEO (Overseas) in the Singapore Business

Awards 2006• Magnolia Award, Shanghai Municipal Government in

2003 and 2005

TAY BOON HWEE, RONALD, 44CHIEF EXECUTIVE OFFICEREXECUTIVE DIRECTOR

BACHELOR OF BUSINESS (HONOURS), NANYANG TECHNOLOGICAL UNIVERSITY

Date of first appointment as a director 1 January 2013

Board committee(s) served on• Corporate Disclosure Committee (Member)

• Executive Committee (Member)

Present Principal Commitments (other than Directorships in listed companies)• Ascott Residence Trust Management Limited

(manager of Ascott Residence Trust) (Chief Executive Officer)

Background and Working Experience• Chief Investment Officer and Managing Director of

India and GCC sector of The Ascott Limited (January 2007 to February 2012)

• Head of Business Development and Asset Management of Ascott Residence Trust Management Limited (manager of Ascott Residence Trust) (January 2007 to February 2012)

• Head and Senior Vice President, Investment of CapitaLand Residential Limited (July 2001 to December 2006)


BOARD OF DIRECTORS

KU MOON LUN, 62INDEPENDENT NON-EXECUTIVE DIRECTOR

GRADUATED FROM THE HONG KONG TECHNICAL COLLEGE (NOW KNOWN AS THE HONG KONG POLYTECHNIC UNIVERSITY)

REGISTERED PROFESSIONAL SURVEYOR

Date of first appointment as a director 20 January 2006Length of service as a director (as at 31 December 2012) 6 years 11 months

Board committee(s) served on• Audit Committee (Chairman)

Present Directorships in other listed companies• Kerry Properties Limited• Lai Fung Holdings Limited

Present Principal Commitments (other than Directorships in listed companies)• Hospital Governing Committee of Tuen Mun

Hospital, Hong Kong Hospital Authority (Member)

Background and Working Experience• Executive Director of Davis Langdon and Seah

International (1995 to 2005)

• Chairman of Davis Langdon and Seah Hong Kong Limited (1995 to 2004)

• Chairman of icFox International (2000 to 2003)

• Chairman of Premas Hong Kong Limited (2000 to 2002)

• Hong Kong Institute of Surveyors (Fellow Member)

S. CHANDRA DAS, 73INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF ARTS (HONOURS), UNIVERSITY OF SINGAPORE

Date of first appointment as a director 20 January 2006Length of service as a director (as at 31 December 2012) 6 years 11 months

Board committee(s) served on• Audit Committee (Member)

Present Directorships in other listed companies• Super Group Ltd• Yeo Hiap Seng Ltd (Deputy Chairman)

• Yeo Hiap Seng (Malaysia) Berhad

Present Principal Commitments (other than Directorships in listed companies)• NUR Investment & Trading Pte Ltd (Managing Director)

• Alliance Select Foods International Inc (Director)

• Goodhope Asia Holdings Ltd (Chariman)

• Nanyang Technological University (Pro-Chancellor)

• Non-Resident Ambassador to Turkey• Tamil Murasu Limited (Chairman)

• YHS (Singapore) Pte Ltd (Chairman)

Directorships in other listed companies held over the preceding three years• CapitaMall Trust Management Limited (manager of

CapitaMall Trust)• Nera Telecommunications Ltd• S i2i Limited• Sincere Watch Limited


Background and Working Experience• Independent Non-Executive Director of The Ascott

Group Limited (1999 to 2008)

• Chairman of NTUC Fairprice Co-operative Ltd (1993 to 2005)

Award(s)• Distinguished Service (Star) Award by National

Trades Union Congress in 2005• President’s Medal by the Singapore Australian

Business Council in 2000

GIAM CHIN TOON @ JEREMY GIAM, 70INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF LAW (HONOURS), UNIVERSITY OF SINGAPORE

MASTERS OF LAW, UNIVERSITY OF SINGAPORE

ADVOCATE & SOLICITOR

Date of first appointment as a director 23 March 2007Length of service as a director (as at 31 December 2012) 5 years 9 months

Board committee(s) served on• Audit Committee (Member)

Present Directorships in other listed companies• Mewah International Inc.

Present Principal Commitments (other than Directorships in listed companies)• Wee Swee Teow & Co (Senior Partner)

• Inland Revenue Authority of Singapore (Member)

• Non-Resident Ambassador to Peru • Non-Resident High Commissioner to Ghana • Singapore Mediation Centre (Director)

Directorships in other listed companies held over the preceding three years• Guthrie GTS Ltd

Background and Working Experience• Senior Counsel (1997)

• President of the Law Society of Singapore (1987 to 1989)

• Magistrate of the Subordinate Courts of Singapore (1967 to 1970)

Award(s)• PBM, Public Service Medal Award in 2012


BOARD OF DIRECTORS

ZULKIFLI BIN BAHARUDIN, 53INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF SCIENCE IN ESTATE MANAGEMENT, NATIONAL UNIVERSITY OF SINGAPORE

Date of first appointment as a director 1 January 2013


Present Directorships in other listed companies• Hup Soon Global Corporation Limited• Singapore Post Limited

Present Principal Commitments (other than Directorships in listed companies)• ITL Corporation (Chairman)

• Global Business Integrators Pte. Ltd. (Managing Director)

• Ang Mo Kio - Thye Hua Kwan Hospital Ltd. (Director)

• Civil Aviation Authority of Singapore (Authority Member)

• Mentor Media Ltd (Director)

• Non-Resident Ambassador to the People’s Democratic Republic of Algeria

• Non-Resident Ambassador to the Republic of Uzbekistan

• Singapore Management University (Director – Board of Trustees)

• Thye Hua Kwan Moral Charities Limited (Director)

Background and Working Experience• Nominated Member of Parliament

(October 1997 to September 2001)

Award(s)• BBM, Public Service Star Award in 2011• Public Service Award (Meritorious) in 2005

JENNIE CHUA, 68NON-INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF SCIENCE, CORNELL UNIVERSITY, NEW YORK, USA

Date of first appointment as a director 2 July 2007Length of service as a director (as at 31 December 2012) 5 years 6 months

Present Directorships in other listed companies• CapitaMalls Asia Limited• GuocoLeisure Limited

Present Principal Commitments (other than Directorships in listed companies)• Alexandra Health Pte Ltd (Chairperson)

• CapitaLand Hope Foundation (Director)

• Community Chest of Singapore (Chairperson)

• Governing Council of the Institute of Service Excellence (Co-Chairperson)

• ISS A/S & ISS World Services A/S (Director)

• MOH Holdings Pte Ltd (Director)

• Nanyang Technological University (Director/Trustee)

• Non-Resident Ambassador to The Slovak Republic• Prime Minister’s Office (Justice of Peace)

• Sentosa Cove Pte Ltd (Chairperson)

• Sentosa Development Corporation (Board Member)

• Singapore Film Commission (Chairperson)

• Singapore Government (Member of Pro-Enterprise Panel)

• Singapore International Chamber of Commerce (Board Member)

• Temasek Foundation CLG Limited (Deputy Chairperson)

• The Old Parliament House Limited (Chairperson)

• The Singapore Chinese Girls’ School (Board Member)


Background and Working Experience• Chief Corporate Officer of CapitaLand Limited

(July 2009 to July 2012)

• Chief Executive Officer of The Ascott Group Limited (August 2007 to June 2009)

• Chief Strategic Relations Officer of CapitaLand Limited (February 2007 to July 2007)

• President & Chief Executive Officer of Raffles Holdings Limited (April 2003 to January 2007)

• Chairman of Raffles International Ltd (October 2004 to September 2007)

• Chairman & Chief Executive Officer of Raffles International Ltd (April 2003 to September 2004)

• President & Chief Operating Officer of Raffles International Ltd (1999 to March 2003)

Award(s)• Three Singapore National Day Awards

(1984, 2004 & 2008)• Outstanding Contribution to Tourism Award 2006• Women’s World Excellence Awards 2006• Travel Personality of the Year Award 2005• National Trades Union Congress (NTUC) Medal of

Commendation 2005• Bloomberg Business Week Magazine 25 Stars of Asia

Award 2003• Person of the Year – Asia Pacific (Hotel) 2002• National Productivity Award 2002• Pacific Area Travel Writers Association Hall of Fame

2000• Hotelier of the Year 1999• Woman of the Year 1999• Champion of the Arts 1999• Independent Hotelier of the World 1997

CHONG KEE HIONG, 46NON-INDEPENDENT NON-EXECUTIVE DIRECTOR

BACHELOR OF ACCOUNTANCY, NATIONAL UNIVERSITY OF SINGAPORE

CERTIFIED PUBLIC ACCOUNTANT

Date of first appointment as a director 15 March 2010Length of service as a director (as at 31 December 2012) 2 years 9 months


• Executive Committee (Member)

Present Principal Commitments (other than Directorships in listed companies)• The Ascott Limited (Chief Executive Officer & Director)

• Ascott International Management (2001) Pte Ltd (Director)

• Ascott Serviced Residence (China) Fund (Chairman)

• The Ascott Capital Pte Ltd (Director)

Background and Working Experience• Chief Executive Officer of Ascott Residence Trust

Management Limited (manager of Ascott Residence Trust) (November 2005 to January 2012)

• Deputy Chief Executive Officer, Finance & Investment, The Ascott Limited (September 2004 to March 2010)

• Chief Financial Officer of Raffles Holdings Limited (May 2001 to August 2004)

• Member of Institute of Certified Public Accountants of Singapore

• Completed Harvard Business School’s Advanced Management Program in 2008


THE MANAGER

TAY BOON HWEE, RONALDChief Executive Officer and

Executive Director

KANG SIEW FONGVice President, Finance

Mr Tay Boon Hwee, Ronald is the Chief Executive Officer of ARTML. He is responsible for spearheading the overall strategic planning and leading the implementation of the business, investment and operational strategies for Ascott Reit.

Prior to this, Mr Tay was concurrently Chief Investment Officer of Ascott and Head of Business Development and Asset Management of ARTML until February 2012.

Mr Tay has been with the CapitaLand Group for more than 10 years. Prior to joining Ascott, Mr Tay was with CapitaLand Residential Singapore as Senior Vice President (Finance and Investment). Mr Tay began his career in the banking industry, where he spent nine years in various senior positions in corporate and investment banking.

Mr Tay holds a Bachelor of Business (Honours) from the NanyangTechnological University.

Ms Kang Siew Fong heads the finance team and is responsible for financial management and compliance matters for Ascott Reit. Ms Kang has more than 20 years’ experience in the finance profession.

Prior to joining ARTML, Ms Kang was with Ascott for more than 12 years, holding various positions including Vice President, Finance and Vice President, Business Development and Planning.

While at Ascott, Ms Kang was responsible for all aspects of Ascott’s financial management and accounting. She was involved in mergers and acquisitions activities at Ascott, and the formulation and implementation of its financial policies and practices, budgeting and internal controls. She was also a member of the team responsible for the listing of Ascott Reit.

Ms Kang graduated from the National University of Singapore with a Bachelor of Accountancy degree.


VINCENT WEEDeputy Chief Executive Officer

ELAINE SOHAssistant Vice President, Investor

Relations & Communications

Mr Vincent Wee assists the CEO, Mr Tay Boon Hwee, Ronald, in enhancing Ascott Reit’s portfolio performance, supporting business development activities and strategic capital and risk management for Ascott Reit. He is concurrently Ascott’s Managing Director, India & Gulf Cooperation Council (from 6 February 2012), where he has overall responsibility for the development and operations of Ascott’s business in the region.

Mr Wee has over 19 years of experience in the real estate industry and has been with CapitaLand since 1997. Prior to joining the ARTML in July 2011, he was with Australand Property Group (Australand), the Australian Stock Exchange listed subsidiary of CapitaLand Limited for 10 years where he held various senior executive positions.

Mr Wee holds an MBA from Cranfield School of Management, UK and a Bachelor of Economics from Monash University, Australia.

Ms Elaine Soh heads the Investor Relations function in ARTML and is responsible for conducting effective communication, as well as building and maintaining relations with Unitholders, potential investors and analysts.

Prior to joining ARTML, she was the head of Investor Relations for Indofood Agri Resources Limited. Ms Soh began her career in banking and finance and held various functions from trading to investment banking.

Ms Soh holds a Bachelor of Economics and Finance from Royal Melbourne Institute of Technology.


VALUE CREATION

FROM STRATEGY TO OPPORTUNITY


At Ascott Reit, value creation is the result of active asset management, sustainable growth and prudent capital and risk management strategies. Year after year, we continue to deliver consistent and positive financial results by leveraging the right strategies to seize market opportunities and to optimise the potential of our portfolio.


VALUE CREATION

Active Asset Management

Ascott Reit creates value for its stakeholders by maximising the financial yield of its property portfolio and by focussing on the operational performance of each property.

As part of our focussed and profit-oriented approach, we benchmark the operating results of each property against market performance and against its previous year’s results and planned budgets. We also conduct detailed reviews of properties that are not achieving their targets, and work closely with the Serviced Residence Management Companies (SRMCs) to develop action plans to improve the operating performance of each of these properties.

We have in place robust asset management programmes that enable us to actively manage each of our properties to generate organic growth and strengthen existing relationships with key customers. Through the SRMCs, we seek to optimise occupancy levels and average daily rates, and maximise RevPAU.

We closely monitor the growth potential of each property, and divest properties that have reached their maximum potential or whose growth prospects are limited by changes in the operating environment. The proceeds from our divestments are then redeployed into acquiring properties with potential for higher-yielding returns.

DEVELOP YIELD MANAGEMENT AND MARKETING STRATEGIES TO MAXIMISE REVPAU

The profitability of Ascott Reit’s portfolio depends primarily on the maximisation of RevPAU. Therefore, our yield management and marketing strategies are focussed on:

• assessing and adjusting apartment rental rates based on occupancy levels and demand; and

• determining the appropriate balance between higher yielding short-stay guests and stability of revenue from long-stay guests.

We work closely with the SRMCs to establish and develop relationships with global key accounts, and leverage on Ascott’s wider networks to improve Ascott Reit’s revenue and profitability.

Ascott enjoys strong brand equity through a series of marketing initiatives across different platforms. Following the enhancements to the Ascott, Citadines and Somerset brand portals, Ascott has introduced mobile versions of these websites with faster access and smarter navigation through touchscreen-friendly icons and webpages optimised for smaller screens.

Searching for information, viewing promotions, enquiries and making reservations for Ascott’s properties worldwide have never been easier. Guests simply log in to their profiles for quick access, while a GPS-enabled feature recommends the nearest Ascott serviced residence based on user locations. Interactive maps are now available on demand, displaying the attractions and amenities around each serviced residence.

Besides the mobile application, Ascott has launched an online chat facility to provide guests with real-time support. Guests can communicate with an Ascott representative in five languages – English, Mandarin Chinese, French, German and Spanish. These initiatives are part of Ascott’s ongoing efforts to enhance and enrich guests’ experience at different touch-points, including their interactions prior to their stay at Ascott.

The Facebook pages for Ascott The Residence, Citadines Apart’hotel and Somerset Serviced Residence have drawn over 60,000 fans. In addition to that, Ascott has garnered more than 125,000 fans on Weibo – a Chinese microblogging site. Guests can also connect with Ascott through Twitter, YouTube and Flickr to stay updated on the latest news, promotions and opening specials.

Ascott’s Global Distribution System (GDS) chain code “AZ” continues to help travel management companies and travel agents access rates and room availability more efficiently. As the first serviced residence company to offer a “Best Rate Guarantee”, Ascott assures its guests of the lowest publicly available online rate each time a guest makes a booking through Ascott’s website. If a cheaper online rate for the same apartment is found, Ascott will honour its promise and offer 50% off the cheaper rate for the first night of stay, while guests pay the cheaper rate for subsequent nights’ stay under the same booking.


Ascott also has global promotional partnerships with Citibank in the form of discounts and special benefits for cardholders. Separately, residents who are Asia Miles and Singapore Airlines’ KrisFlyer members can earn mileage for their stays at participating residences.

IMPROVE OPERATING EFFICIENCIES AND ECONOMIES OF SCALE

To minimise direct expenses and increase gross profit margin without compromising our quality of services, Ascott Reit, together with the SRMCs, have identified several areas for cost management. These include: direct marketing to tenants to reduce commission expenses; centralisation of key functions such as finance and procurement for properties located within the same city or region; and bulk purchases by leveraging on Ascott’s global portfolio to achieve economies of scale.

MAINTAIN QUALITY OF PORTFOLIO

We continuously strive to enhance our assets through planned periodic upgrading, refurbishment and reconfiguration in order to achieve a higher level of guest satisfaction, as well as to improve our properties’ performance and competitiveness.

Citadines Place d’Italie Paris


Growth by Acquisition

As part of its value creation strategy, Ascott Reit explores investment and acquisition opportunities globally to enhance the quality of its portfolio.

Our primary investment focus is on serviced residences, particularly in countries where we have an established presence. Rental housing is also an integral part of our extended stay accommodation market, particularly in more stable economies.

To expand our portfolio and maintain our geographical diversification across growth markets as well as stable economies, our acquisition strategies are as follows:

ACQUISITION OF ASSETS OWNED WHOLLY OR IN PART BY ASCOTT

Ascott Reit is granted the right of first refusal over the future sale of properties by any Ascott entity that are used or predominantly used as serviced residences or rental housing properties in the Pan-Asian region and Europe.

As our Sponsor, Ascott supports Ascott Reit’s acquisition strategy by acquiring, retaining and enhancing assets with good income and growth potential, with the view of subsequently divesting the assets to Ascott Reit at the appropriate time.

ACQUISITION OF ASCOTT’S PROPERTIES UNDER DEVELOPMENT

A number of Ascott properties are currently under development. Upon completion, they offer a pipeline of potential targets for acquisition by Ascott Reit as serviced residences or rental housing properties.

ACQUISITION OF ASSETS CURRENTLY MANAGED AND/OR LEASED BUT NOT OWNED BY ASCOTT

In addition to managing Ascott Reit’s portfolio, Ascott also operates and/or manages serviced residences and rental housing properties owned by third parties. These assets are complementary to Ascott Reit’s current portfolio. We will leverage on Ascott’s knowledge and relationships with the owners of these properties to acquire these assets should such opportunities become available.

ACQUISITION OF SUITABLE ASSETS FROM THIRD PARTY OWNERS

Ascott Reit also acquires quality, yield-accretive assets from third party owners. Such opportunities arise from:

• divestment of income producing assets by third party owners in need of capital for new business expansion or investments;

• divestment of assets by owners under financial stress; and

• acquisition of well-located but underperforming assets with the potential for rebranding or asset enhancements for higher returns.

Furthermore, we leverage on our strategic relationship with CapitaLand, one of Asia’s largest listed real estate companies, by tapping into their expertise, experience and knowledge in real estate investments to identify potential acquisitions for Ascott Reit.

ACQUISITION CRITERIA

In evaluating acquisition opportunities, Ascott Reit adopts the following criteria:

Yield thresholdsWe acquire properties or make investments with yields that are currently, or have the potential to be, above their cost of capital. Our acquisitions are expected to maintain or enhance returns to Unitholders.

LocationWe assess properties in terms of their micromarket locations as well as their accessibility to major roads, public transportation and proximity to amenities such as entertainment and food and beverage outlets.

Local market characteristicsWe acquire properties in markets with positive macro-economic indicators such as strong economic growth and expanding cross border business investments and trade. Key considerations are the levels of Foreign Direct Investment (FDI), business travel (including intracountry business travel), expatriate population and the resulting demand for serviced residences or rental housing properties.

VALUE CREATION


Value-creation opportunitiesWe acquire properties with potential for increase in occupancy rates and/or ADR. The potential for value creation through asset enhancement initiatives such as upgrading, refurbishment and reconfiguration is also assessed.

Building and facilities specifications including the operator of the serviced residencesWe acquire properties that comply with approved building specifications and legal and zoning regulations, with due consideration to the size and age of the buildings.

Before a serviced residence or rental housing property is considered for acquisition, the operator must possess a track record in delivering stable cash flow and operations, or demonstrate the potential for achieving stable cash flows.

Ascott Raffles Place Singapore


VALUE CREATION

Capital and Risk Management

Ascott Reit optimises its capital structure and cost of capital within the borrowing limits set out in the Property Fund Appendix. A combination of debt and equity is used to fund future acquisitions and asset enhancement projects.

Additionally, we optimise asset yields and provide stable and sustainable Unitholders’ returns while maintaining flexibility for future capital expenditure or yield-accretive acquisitions. Our objectives for capital and risk management are as follows:

MAINTAIN STRONG BALANCE SHEET BY ADOPTING AND MAINTAINING A TARGET GEARING RANGE

We maintain our gearing at a comfortable range, well within the borrowing limits allowed under the Property Fund Appendix. We balance our cost of capital and returns to Unitholders by achieving the right combination of debt and equity.

SECURE DIVERSIFIED FUNDING SOURCES FROM BOTH FINANCIAL INSTITUTIONS AND CAPITAL MARKETS TO SEIZE MARKET OPPORTUNITIES

To finance future acquisitions and refurbishment of properties, we tap into diversified funding sources. This includes bank borrowings and access to debt capital markets through the issuance of bonds and notes.

We also seize opportunities to raise additional equity capital through the issuance of units, if there is an appropriate use for such proceeds.

ADOPT PROACTIVE INTEREST RATE MANAGEMENT STRATEGY

We adopt a proactive interest rate management policy by maintaining a target percentage of fixed versus floating interest rates. We also manage risks associated with changes in interest rates on loan facilities while keeping Ascott Reit’s ongoing cost of debt competitive.

Our interest rate exposure is managed through the use of interest rate swaps, interest rate caps and fixed rate borrowings.

MANAGE EXPOSURE TO FOREIGN EXCHANGE

Due to the geographical diversity of our portfolio, cash flow generated by our assets as well as their capital values are subject to foreign exchange movements.

In managing the currency risks associated with cash flow generated by our assets, we actively monitor foreign exchange rates and enter into hedges, if appropriate.

In managing the currency risks associated with the capital values of the overseas assets, our borrowings are made in the same currency as the underlying asset as a natural hedging strategy, to the extent possible.

PERFORM RIGOROUS CREDIT RISK MANAGEMENT We establish credit limits for customers and monitor their balances on an ongoing basis. For bookings by individuals, payments are usually made upfront and arrears are checked against lease deposits to minimise losses. Corporate bookings are generally given more credit days and we adopt a strict policy of withdrawing credit terms when payments are outstanding to minimize bad debts.

ENSURE SUFFICIENT CASH FLOW TO MINIMISE LIQUIDITY RISK

Our approach to managing liquidity is to ensure, as far as possible, that we have sufficient liquidity to meet our liabilities when they mature, under both normal and stressed conditions.

In addition to credit facilities, we have a $1 billion MTN Programme, which was established in 2009. We have also established a US$2 billion Euro-Medium Term Note Programme in 2011.

PREPARE FOR MARKET UNCERTAINTIES

The objective of market risk management is to manage and control market risk exposures while optimising returns. Market risk is managed through established investment policies and guidelines. These policies and guidelines are reviewed regularly taking into consideration changes in the overall market environment.


Somerset Xu Hui Shanghai


CORPORATE GOVERNANCE

Our Role

Ascott Residence Trust (Ascott Reit) is externally managed by Ascott Residence Trust Management Limited (Manager), an indirect wholly-owned subsidiary of CapitaLand Limited (CL). The Manager is appointed in accordance with the terms of the trust deed entered into by and between DBS Trustee Limited, as trustee of Ascott Reit (the Trustee) and the Manager on 19 January 2006 (as amended) (Trust Deed). The Manager appoints experienced and well-qualified personnel to run its day-to-day operations.

Our primary role as the Manager is to set the strategic direction of Ascott Reit and give recommendations to the Trustee on acquisition, divestment or enhancement of the assets of Ascott Reit in accordance with its stated investment strategy.

As the Manager, we have general powers of management over the assets of Ascott Reit. Our main responsibility is to manage the assets and liabilities of Ascott Reit for the benefit of the Unitholders. We do this with a focus on generating income and, where appropriate, increasing Ascott Reit’s assets over time so as to enhance the returns from the investments, and ultimately the distributions and total return to the Unitholders.

Our other functions and responsibilities as the Manager include:

• Using our best endeavours to carry on and conduct business in a proper and efficient manner and to conduct all transactions with or for Ascott Reit at arm’s length.

• Preparing property plans on an annual basis for review by the Board of Directors of the Manager (Board), including proposals and forecasts on net income, capital expenditure, sales and valuations, explanation of major variances to previous forecasts, written commentary on key issues and relevant assumptions. These plans explain the performance of Ascott Reit’s assets.

• Preparing the accounts of Ascott Reit.• Ensuring compliance with relevant laws and regulations, including the applicable provisions of the Securities and

Futures Act (SFA), the Listing Manual (the Listing Manual) of Singapore Exchange Securities Trading Limited (SGX-ST), the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (MAS) (including Appendix 6 on property funds thereto (Property Fund Appendix)), and the Trust Deed.

• Attending to all regular communications with the Unitholders.

The Manager can be removed, under certain circumstances outlined in the Trust Deed, by notice in writing given by the Trustee, in favour of a corporation appointed by the Trustee upon the occurrence of certain events, including by a resolution passed by a simple majority of the Unitholders present and voting at a meeting of the Unitholders duly convened and held in accordance with the provision of the Trust Deed.

Our Corporate Governance Culture

We are committed to the highest standard of corporate governance and transparency in our management of Ascott Reit, and operate in keeping with the spirit of the Code of Corporate Governance in the discharge of our responsibilities as the Manager. We believe that strong and effective corporate governance is essential for the success of Ascott Reit and to protect the best interests of the Unitholders.

The current Code of Corporate Governance was revised by MAS in May 2012 and takes effect in respect of annual reports relating to financial years commencing 1 November 2012. Notwithstanding that the 2012 Code of Corporate Governance (2012 Code) is not yet applicable to us, we are taking the progressive step of voluntarily describing our corporate governance policies and practices in 2012, as the Manager, against the principles and guidelines of the 2012 Code, to the extent that we are able to do so.

We have in place clear internal control systems, reporting and responsibility lines, and procedures in line with the current Code of Corporate Governance. The following paragraphs describe our corporate governance policies and practices in 2012 as the Manager, with specific references to the 2012 Code to the extent the 2012 Code is relevant and applicable to real estate investment trusts (REIT).


(A) BOARD MATTERS

Principle 1: The Board’s Conduct of Affairs

The Board is responsible for the overall management, corporate governance and long-term success of the Manager and Ascott Reit. It provides leadership to the Manager, sets strategic directions and oversees competent management of Ascott Reit. The Board has established a framework for the management team of the Manager (Management), which includes a system of internal controls and a business risk management process. The Board also sets the disclosure and transparency standards for Ascott Reit and ensures that obligations to the Unitholders and other stakeholders are understood and met.

Each Director must act honestly, with due care and diligence, and in the best interests of Ascott Reit. This obligation ties in with the Manager’s prime responsibility in managing the assets and liabilities of Ascott Reit for the benefit of the Unitholders. Decisions are taken objectively in the interests of Ascott Reit. The Manager has adopted guidelines for related party transactions and dealing with conflicts of interests, details of which are set out on pages 43–45 of this Annual Report. The Board meets regularly and as and when warranted by particular circumstances as deemed appropriate by the relevant Directors. Board meetings may also be held by way of teleconference and video conference, in accordance with the Articles of Association of the Manager. Board meetings are scheduled in advance and are held at least on a quarterly basis, inter alia, to review and deliberate on strategic policies, significant acquisitions and disposals, financial performance and budget, and announcements of results. The Board also reviews the risks to the assets of Ascott Reit with a view to safeguarding Unitholders' interest, and acts upon recommendations from both the internal auditors (Internal Auditors) and the external auditing firm appointed for Ascott Reit (External Auditors). Six Board meetings were held in 2012. In addition to the foregoing, in its deliberations, the Board remains fully conscious of the views and concerns of all Ascott Reit's stakeholders, as well as Ascott Reit's wider corporate social and ethical responsibilities.

In the discharge of its functions, the Board is supported by special Board Committees that provide independent oversight of Management, and which also serve to ensure that there are appropriate checks and balances. These Board Committees are the Audit Committee, the Corporate Disclosure Committee and the Executive Committee. Each of these Board Committees operates under delegated authority from the Board, however, the Board retains overall responsibility for any decisions made by the Board Committees. Other Board Committees may be formed as dictated by business imperatives and/or to promote operational efficiency.

Information on the Audit Committee can be found in the section “Audit Committee” on pages 39 and 40 of this Annual Report.

The Corporate Disclosure Committee’s main role in relation to Ascott Reit is to review corporate disclosure issues and announcements made to the SGX-ST and the public, as well as to ensure good corporate governance and the adoption of best practices in providing transparency to the Unitholders, the investing community and other stakeholders of Ascott Reit. It also ensures that the Manager complies with all applicable legal and regulatory disclosure requirements in relation to Ascott Reit and releases information in a timely and appropriate manner.

The Executive Committee has adopted terms of reference to define its scope of authority and responsibilities in relation to Ascott Reit, which include (i) overseeing the day-to-day activities and affairs of the Manager and Ascott Reit for and on behalf of the Board (except in relation to such matters that specifically require action or decision by the Board pursuant to applicable law or regulations); (ii) reviewing, endorsing and recommending to the Board strategic directions and management policies of the Manager in respect of Ascott Reit; (iii) overseeing operational, investment and divestment matters within approved financial limits; and (iv) performing such other functions as authorised or delegated by the Board. Management seeks the guidance and views of the Executive Committee regularly both within and outside the formal environment of Executive Committee meetings. Decisions taken and resolutions passed are circulated to the Board for information. The Board has adopted a set of internal controls which specifies approval requirements for, inter alia, capital expenditure, new investments and divestments, and borrowings. Apart from matters that specifically require the Board’s approval, such as the issue of units in Ascott Reit (Units) and any distributions and other returns to the Unitholders, the Board has also set approval limits and thresholds for transactions, and has authorised the Executive Committee



to approve transactions which fall below the specified limits and thresholds; transactions in excess of said limits and thresholds remain subject to approval by the Board. Appropriate delegation of authority and approval sub-limits is also provided at the management level to facilitate operational efficiency.

Information on the meeting attendance are set out on page 37 of this Annual Report.

The Board takes the induction, orientation and training of new Directors seriously. Newly-appointed Directors are given management briefings on the business activities and strategic direction of Ascott Reit, the corporate governance policies and practices of the Manager, and are also provided with formal letters apprising them of their statutory and other duties and responsibilities as Directors. The new Directors are required to attend training conducted at the Singapore Institute of Directors on compliance, regulatory and corporate governance matters and a broad understanding of their roles and responsibilities under the Companies Act, the SFA, the Listing Manual and the Code of Corporate Governance.

The Board is also mindful of the need for all Directors to undergo continual relevant training as may be appropriate in the circumstances and to equip them to properly serve in their respective roles. To this end, the Directors are encouraged to participate in industry conferences, seminars or any training programme which may assist them in connection with their duties as Directors. Apart from external training, Directors are also provided with legal and regulatory updates from time to time (arranged by the company secretary of the Manager (Company Secretary)) to keep them apprised of relevant changes.

The induction, orientation and training of the Directors was arranged by the Company Secretary under the supervision of the Board, and fully funded by the Manager.

Principle 2: Board Composition and Guidance

As at 26 February 2013, the Board consists of nine Directors, eight of whom are non-executive Directors, and out of whom five, that is, more than half of the Board are independent Directors. A Director is considered independent if he has no relationship with the Manager, its related companies or its officers, any 10% Unitholder1 or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Director’s independent business judgement with a view to the best interests of Ascott Reit. Mr Lim Jit Poh, Mr Ku Moon Lun, Mr S. Chandra Das, Mr Giam Chin Toon @ Jeremy Giam and Mr Zulkifli Bin Baharudin (who was appointed as independent non-executive Director with effect from 1 January 2013) are considered to be independent Directors. The Board has reviewed each one of the independent Directors and found him to be independent both in character and judgement, and that there are no relationships or circumstances which are likely to affect, or could appear to affect, the director's independent business judgement.

The non-executive Directors actively participate in setting and developing strategies and goals for Management, and reviewing and assessing Management’s performance. This enables Management to benefit from the non-executive Directors' external and objective perspective on issues that are brought before the Board. This also enables the Board to interact and work with Management through a healthy exchange of ideas and views to help shape the strategy for Ascott Reit.

The Board is of the view that its current composition comprises persons who, as a group, provides the necessary core competencies, and demonstrates an appropriate balance and diversity of skills, experience, gender and knowledge.

The Board is also of the view that the current size of the Board is appropriate and effective, taking into consideration the nature and scope of Ascott Reit’s operations.

The profiles of the Directors are set out on pages 16–21 of this Annual Report.

1. The term "10% Unitholder" shall refer to a person who has an interest or interests in one or more voting units in Ascott Reit and the total votes attached to that unit, or those units, is not less than 10% of the total votes attached to all the voting units in Ascott Reit.


Principle 3: Chairman and Chief Executive Officer

The roles of the chairman of the Board (Chairman) and the Chief Executive Officer (CEO) of the Manager are separate and the positions are held by two individuals, to maintain effective oversight and to ensure a clear division of responsibilities and duties between them. This is also to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. The Chairman and the CEO are not related to each other.

The Chairman leads the Board to ensure its effectiveness on all aspects of its role and sets its agenda. He ensures that the Directors receive accurate, clear and timely information, ensures adequate discussion of all agenda items at Board meetings, facilitates the contribution of the non-executive Directors, encourages constructive relations between non-executive Directors and Management, ensures effective communication with the Unitholders and promotes a high standard of corporate governance. The Chairman is also responsible for promoting a culture of openness and debate at the Board and for upholding high corporate governance standards.

The Chairman also ensures that the Board works together with Management with integrity, competency and moral authority, and engages Management in constructive debate on strategy, business operations and enterprise risks.

On 27 February 2012, Mr Tay Boon Hwee, Ronald, was appointed to the position of CEO of the Manager, and was subsequently also appointed as an Executive Director of the Manager with effect from 1 January 2013. Mr Tay currently has full executive responsibilities over the business direction and operational and management decisions of Ascott Reit.

Principle 4: Board MembershipPrinciple 5: Board Performance

As the Manager is not itself a listed entity, the Manager does not consider it necessary for the Board to establish a nominating committee. The Board itself performs the functions that may have been delegated to such a committee, namely, it administers nominations to the Board, reviews the structure, size and composition of the Board, and reviews the independence of Directors. Directors are not subject to periodic retirement by rotation. However, Directors who are above the age of 70 are statutorily required to seek re-appointment at each annual general meeting of the Manager.

The composition of the Board is reviewed regularly to ensure that the Board has the appropriate size and mix of expertise and experience to properly discharge its duties, having a view to the need for succession planning and board refreshment. In particular, the Manager strives to ensure that the Board as a whole has the requisite blend of background, experience and knowledge in business, finance and management skills critical to Ascott Reit’s businesses, and that each non-executive Director brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made by the Board as a whole. The Board requires each Director to dedicate sufficient time and attention to the affairs of the Manager and Ascott Reit, and a Director with multiple board representations or other substantial commitments is held to the same expectation. The Board is of the view that the current commitments of each of its Directors are reasonable and each of the Directors is able to and has been adequately carrying out his duties.

The composition of the Board, including the selection of candidates for new appointments to the Board as part of the Board’s renewal process, is determined in line with, inter alia, the following principles:

• the Chairman should be an independent Director; • the Board should comprise Directors with a broad range of commercial experience, including expertise in funds

management, the property industry and in the legal field; and• independent Directors should constitute at least half of the Board.

The independence of each Director is reviewed by the Board upon appointment, and thereafter at least annually, by the Board.



The Manager believes that Board performance and that of each individual Director is reflected in, and evidenced by, its or his proper guidance, diligent oversight and able leadership, and the level of support it or he has lent to Management in steering Ascott Reit in the appropriate direction, as well as the long term performance of Ascott Reit through both favourable and challenging market conditions. This is ultimately reflected in safeguarding the interests of Ascott Reit and maximising Unitholders' value.

Contributions by an individual Director may also take other forms, including providing objective perspectives on issues, facilitating business opportunities and strategic relationships with external parties, and being accessible to Management outside of formal Board and/or Board Committee meetings. For example, the Directors make significant contributions to the management of Ascott Reit and give guidance to Management regularly via e-mail and telephone discussions outside of Board and Board Committee meetings.

The Board assesses its and each board committee’s effectiveness as a whole, as well as the contribution by each individual Director to the effectiveness of the Board and each board committee.

The matrix of the Directors’ appointment in the respective various Board Committees as at 26 February 2013 and their attendance at meetings of the Board and the Audit Committee during the financial year ended 31 December 2012 are set out below:

Board & Board Committees(as at 26 February 2013)

Board Members Audit CommitteeCorporate Disclosure Committee Executive Committee

Lim Jit Poh (Chairman) – Chairman –

Lim Ming Yan1 (Deputy Chairman) – – Chairman

Tay Boon Hwee, Ronald2 – Member Member

Ku Moon Lun Chairman – –

S. Chandra Das3 Member – –

Giam Chin Toon @ Jeremy Giam4 Member – –

Zulkifli Bin Baharudin5 – Member –

Jennie Chua6 – – –

Chong Kee Hiong7 – Member Member

Notes:1. Lim Ming Yan was appointed as Deputy Chairman of the Board and Chairman of Executive Committee on 1 January 2013. For FY2012, he was Member of

Corporate Disclosure Committee up to 5 February 2012.2. Tay Boon Hwee, Ronald, was appointed as Executive Director on 1 January 2013. He was also appointed as Member of Corporate Disclosure Committee and

Executive Committee on 24 January 2013.3. S. Chandra Das was Member of Corporate Disclosure Committee and Executive Committee up to 23 January 2013.4. Giam Chin Toon @ Jeremy Giam was Member of Executive Committee up to 23 January 2013.5. Zulkifli Bin Baharudin was appointed as Independent Non-Executive Director on 1 January 2013. He was also appointed as Member of Corporate Disclosure

Committee on 24 January 2013. 6. Jennie Chua was Member of Executive Committee up to 23 January 2013.7. Chong Kee Hiong stepped down as CEO of the Manager and became Non-Independent Non-Executive Director on 6 February 2012. He was appointed as

Member of Corporate Disclosure Committee on 6 February 2012.


Meeting Attendance

Board Members Board Audit Committee

Number of meetings held in FY2012 6 5

Lim Jit Poh 6 N.A.

Lim Ming Yan 6 N.A.

Ku Moon Lun 6 5

S. Chandra Das 6 5

Giam Chin Toon @ Jeremy Giam 5 3

Jennie Chua 4 N.A.

Chong Kee Hiong 6 N.A.

Liew Mun Leong1 4 N.A.

Wen Khai Meng2 6 N.A.

Notes: 1. Liew Mun Leong resigned as Non-Independent Non-Executive Director on 1 January 2013.2. Wen Khai Meng resigned as Non-Independent Non-Executive Director on 24 January 2013.

Principle 6: Access to InformationPrinciple 10: Accountability

Management provides the Board with complete, accurate and adequate information in a timely manner, so as to enable the Directors to make informed decisions to discharge their duties and responsibilities. This is done through regular updates on financial results, market trends and business developments, as well as at the request of the Directors. Changes to regulations, policies and accounting standards which are relevant to the Manager and Ascott Reit are also monitored closely by Management. To keep pace with regulatory changes, where these changes have an important and significant bearing on Ascott Reit and its disclosure and other obligations, the Directors are briefed by Management during Board meetings, at specially convened sessions or via circulation of Board papers, as may be appropriate. Information provided to the Board includes explanatory background relating to matters to be brought before the Board, as well as budgets, forecasts and management accounts. In relation to budgets, any material variance between projections and actual results are disclosed and explained to the Board. Management also provides the Directors with management accounts on a monthly basis and as the Board may require from time to time to enable the Directors to keep abreast of Ascott Reit’s financial performance, position and prospects. Additionally, reports by independent external analysts on Ascott Reit are forwarded to the Board from time to time to keep Directors apprised of analysts’ views on Ascott Reit’s performance.

All proposals tabled before the Board and/or Board Committees for decision or mandate are accompanied by board papers that provide an appropriate level of the relevant facts, analyses, resources needed, conclusions and recommendations of Management. Such board papers are distributed to Directors in advance of each meeting. Where appropriate, senior executives who are able to provide the Directors with additional insight into matters to be discussed are also requested to attend the meetings and address any questions the Directors may have. Board and Board Committee meetings generally include presentations by senior executives, external consultants and experts on strategic issues relating to specific business areas and proposals.

The Board has separate, unfettered and independent access to the Manager’s senior management and the Company Secretary, and vice versa. The Company Secretary renders assistance to the Board as may be necessary and helps ensure that Board procedures are followed and that applicable laws and regulations (including listing rules) are complied with. Under the direction of the Chairman, the Company Secretary's responsibilities include ensuring good



information flow between the Board and Board Committees and between senior management and non-executive Directors. The Company Secretary attends all Board and Board Committee meetings and is responsible for recording minutes of the meetings. The appointment and removal of the Company Secretary is a Board reserved matter.

Where necessary, Management will, upon the request of the Directors (whether as a group or individually), obtain independent professional advice, at the Manager’s expense, to enable the Directors to discharge their duties. The Company Secretary assists the Directors in obtaining such advice.

(B) REMUNERATION MATTERS

Principle 7: Procedures for Developing Remuneration PoliciesPrinciple 8: Level and Mix of RemunerationPrinciple 9: Disclosure on Remuneration

The remuneration of the Board and the employees of the Manager are paid by the Manager, and not Ascott Reit.

As a subsidiary of CL, the Manager takes its reference from the remuneration policies and practices of CL in determining the remuneration of its senior executives and directors. The Executive Resource and Compensation Committee of CL determines and recommends to the board of directors of CL, the proposed framework of remuneration, terms of engagement, compensation and benefits for directors and senior executives of the CL group, which includes the CEO and senior executives of the Manager. The board of directors of CL has endorsed a remuneration policy pursuant to which directors’ fees from financial year 2011 shall be paid in a mix of cash and equity in the proportion of 80% cash and 20% units (in the case of a REIT). The Manager has duly considered and adopted this remuneration policy as it is of the view that this policy is appropriate to attract, retain and motivate the Directors needed to run the business activities of the Manager successfully, and also aligns the interests of the Directors with the long-term interest of the Manager and Ascott Reit.

The remuneration of the Directors for the year ended 31 December 2012 is shown in the table on page 39 of this Annual Report.

Independent non-executive Directors have no service contracts with the Manager. They receive a basic fee, an additional fee for serving on any of the Board Committees and an attendance fee for participation in meetings of the Board/Board Committees and in project and verification meetings. In determining the quantum of such fees, factors such as frequency of meetings, time spent and responsibilities of Directors are taken into account. Fees payable to the chairman and members of the Audit Committee are higher compared to other Board Committees to take into account the nature of their responsibilities and the greater frequency of meetings. In line with the above-mentioned policy, (i) the independent non-executive Directors shall receive their directors’ fees in a mix of 80% cash and 20% Units; and (ii) senior executives of CL group appointed as non-independent non-executive Directors of the Manager shall receive the Unit component of directors' fees only, and as in previous years, they will not be receiving the cash component of the directors' fees for as long as they are in the employment of CL group. Mr Tay Boon Hwee, Ronald, who is the CEO and an Executive Director, does not receive any fees in his capacity as a Director.

The Board believes that this approach of payment of a portion of directors' fees in Units will serve to better align the interest of the Directors with that of Unitholders, and link rewards to corporate performance.

The Units to be granted to the Directors shall be existing Units held by the Manager and will not be new Units issued by Ascott Reit.


Directors' Fees1

Board MembersFY 2012

S$FY2011

S$

Lim Jit Poh 109,5002 108,5002

Lim Ming Yan 12,8573 13,4003

Ku Moon Lun 99,7502 96,7502

S. Chandra Das 93,5002 88,0002

Giam Chin Toon @ Jeremy Giam 82,0002 80,0002

Jennie Chua 31,7934 11,8003

Chong Kee Hiong5 12,7613 N.A.

Liew Mun Leong6 18,3003 17,5003

Wen Khai Meng7 10,7003 10,2003

Total 471,161 426,150

Notes:1. Inclusive of attendance fees of (a) S$1,500 (local director) and S$2,750 (foreign director) per meeting attendance in person (b) S$1,000 per meeting attendance

via tele-conference, and (c) S$1,000 (local director) and S$1,500 (foreign director) per meeting attendance in person at project and verification meetings. Directors’ fees are subject to the approval of the Manager’s shareholder.

2. Each of the amounts represents the Directors' fees (in both cash and Units) payable to the Independent Non-Executive Directors. 3. Each of the amounts represents the Directors’ fees (in Units) payable to the Non-Independent Non-Executive Directors who are employees of CL group.4. Jennie Chua retired from employment in CL on 1 August 2012. In addition to the Units component of her Director’s fees, she is also entitled to the cash

component of her Director’s fees for the period from 1 August 2012 to 31 December 2012.5. Chong Kee Hiong stepped down as CEO of the Manager and became a Non-Independent Non-Executive Director on 6 February 2012. He is entitled to the Unit

component of his Director’s fees for the period from 6 February 2012 to 31 December 2012.6. Liew Mun Leong resigned as Non-Independent Non-Executive Director on 1 January 2013.7. Wen Khai Meng resigned as Non-Independent Non-Executive Director on 24 January 2013.

(C) ACCOUNTABILITY AND AUDIT

Principle 12: Audit Committee

The Audit Committee comprises three independent non-executive Directors appointed by the Board, namely, Mr Ku Moon Lun, Mr S. Chandra Das and Mr Giam Chin Toon @ Jeremy Giam. The members of the Audit Committee, collectively, have expertise or experience in financial management and are qualified to discharge the Audit Committee’s responsibilities.

The Audit Committee has adopted a set of terms of reference to define its scope of authority and duties, which include:

• evaluating the effectiveness of the internal control systems (including financial control, operational, compliance and information technology controls and risk management systems), by reviewing written reports from the Internal Auditors and the External Auditors, and Management’s responses and actions to correct any identified deficiencies;

• monitoring the integrity of the financial information (including reviewing any significant financial reporting issues and judgements and announcements by the Manager relating to the financial performance and results of Ascott Reit) provided by the Manager, in particular, by reviewing the relevance and consistency of the accounting standards used for the financial reports of Ascott Reit (i.e. entity level), its group of entities (i.e. consolidation level) (Ascott Reit Group) and the Manager;

• reviewing the effectiveness of the Internal Audit function;• reviewing and monitoring the procedures established by the Manager to regulate interested person transactions

(as described in Chapter 9 of the Listing Manual) and interested party transactions (as described in the Property Fund Appendix) (Interested Party Transactions), including ensuring compliance with the provisions of the Listing Manual and the Property Fund Appendix relating to such transactions;



• assessing the suitability of the auditing firm appointed as the External Auditors and recommending to the Board their appointment or re-appointment as the External Auditors for the coming year at the level of compensation as negotiated by Management, as well as reviewing and recommending to the Board on their discharge;

• reviewing the adequacy of the External Auditors in terms of cost, scope and performance and also reviewing the cost effectiveness, independence and objectivity of the External Auditors annually; and

• reviewing the procedures in place to ensure compliance with applicable legislation (such as the SFA), the Listing Manual and the Code on Collective Investment Schemes.

Five Audit Committee meetings were held in 2012. The Audit Committee also meets the External Auditors and the Internal Auditors without the presence of Management at least annually.

The Audit Committee is fully authorised to investigate any matter within its terms of reference. The Audit Committee has full access to and co-operation of the Management and both the Internal Auditors and the External Auditors, and also has full discretion to invite any Director or officer to attend its meetings. Similarly, both the Internal Auditors and the External Auditors are given unrestricted access to the Audit Committee. Reasonable resources have been made available to the Audit Committee to enable it to properly discharge its duties. The Audit Committee takes reference from the principles and best practices recommended in the “Guidebook for Audit Committees in Singapore” issued by the Audit Committee Guidance Committee (jointly established by MAS, the Accounting and Corporate Regulatory Authority and Singapore Exchange Limited), and the “Guidance to Audit Committees on Evaluation of Quality of Work Performed by External Auditors” issued by the Accounting and Corporate Regulatory Authority and Singapore Exchange Limited.

In addition, the External Auditors updates the Audit Committee on changes to accounting standards and issues which have a direct impact on financial statements of the Manager. In conducting its review of the audited financial statements of Ascott Reit for the financial year ended 31 December 2012, the Audit Committee had discussed with Management and the External Auditors the accounting principles that were applied. Based on its review and discussions with Management and the External Auditors, the Audit Committee is of the view that the financial statements are fairly presented, and conform to generally accepted accounting principles in all material aspects.

The Audit Committee has also conducted a review of all non-audit services provided by the External Auditors during the financial year and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the External Auditors.

The Manager, on behalf of Ascott Reit, confirms that Ascott Reit has complied with Rule 712 and Rule 715 of the Listing Manual in relation to its auditing firms.

Principle 11: Risk Management and Internal ControlsPrinciple 13: Internal Audit

The Manager has an established risk identification and management framework for the Ascott Reit Group, which has been approved by the Board. The Manager proactively identifies and addresses risks in the Ascott Reit Group. The ownership of these risks lies with the CEO and the function heads of the Manager with stewardship residing with the Board.The Audit Committee assists the Board to oversee the Management in the formulation, updating and maintenance of an adequate and effective risk management framework and reviews the adequacy and effectiveness of the risk management and internal control systems. The Manager maintains a risk register which identifies the material risks facing the Ascott Reit Group and the internal controls in place to manage or mitigate those risks. The risk register is regularly reviewed by Management in the Ascott Reit Group and annually by the Audit Committee and the Board. Internal Auditors and External Auditors conduct audits that involve testing the effectiveness of the material internal control systems in the Ascott Reit Group. Any material non-compliance or lapses in internal controls together with corrective measures recommended by Internal Auditors and External Auditors are reported to the Audit Committee. The effectiveness of the measures taken by Management in response to the recommendations made by the Internal Auditors and External Auditors is also reviewed by the Audit Committee. The system of risk management and internal controls is continually being refined by Management, the Audit Committee and the Board.


The Board has received assurance from the CEO and Vice-President, Finance, of the Manager that:

(a) the financial records of the Ascott Reit Group have been properly maintained and the financial statements for the year ended 31 December 2012 give a true and fair view of the Ascott Reit Group’s operations and finances; and

(b) the system of risk management and internal controls in place within the Ascott Reit Group is adequate and effective in addressing the material risks in the Ascott Reit Group in its current business environment, including material, financial, operational, compliance and information technology risks.

Based on the framework established and reviews conducted by Management and Internal Auditors and External Auditors as well as the assurance from the CEO and the Vice-President, Finance, the Board opines, pursuant to Rule 1207(10) of the Listing Manual, with the concurrence of the Audit Committee, that the Ascott Reit Group's internal controls were adequate as at 31 December 2012 to address financial, operational and compliance risks which the Ascott Reit Group considers relevant and material to its operations.

The Board notes that the system of risk management and internal controls established by the Manager provides reasonable, but not absolute, assurance that the Ascott Reit Group will not be significantly affected by any event that can be reasonably foreseen as it strives to achieve its business objectives. However, the Board also notes that no system of risk management and internal controls can provide absolute assurance in this regard, or absolute assurance against poor judgement in decision making, human error, fraud, other irregularities and losses.

CL’s Internal Audit Department (CLIA) has been appointed to undertake the internal audit function of the Manager, under the direct supervision of the Board. To complement and supplement the functions of CLIA, suitably qualified external professionals may be engaged to conduct independent audits of some of the activities of Ascott Reit Group.

CLIA’s primary line of reporting is to the chairman of the Audit Committee. CLIA has unfettered access to the Audit Committee and all audit findings are communicated to the Audit Committee as well as Management.

CLIA subscribes to, and is guided by the Standards for the Professional Practice of Internal Auditing developed by The Institute of Internal Auditors (IIA) and has incorporated these standards into its audit practices and meets with the standards set by the IIA. A majority of the CLIA staff are members of the Singapore Branch of IIA, which has its headquarters in the USA.

The standards set by IIA cover requirements in respect of the following relating to an internal audit department:

• independence;• professional proficiency;• scope of work;• performance of audit work; and• management.

To ensure that internal audit is performed by competent professionals, CLIA employs suitably qualified staff. In order to ensure that their technical knowledge remains current and relevant, CLIA identifies and provides training and development opportunities to their staff.

CLIA is headed by a senior manager, who reports directly to the Audit Committee on all internal audit matters. The Audit Committee reviews the internal audit reports and activities on an on-going basis. The Audit Committee also reviews and approves the annual internal audit plan with respect to Ascott Reit. The Audit Committee has also reviewed and considers that CLIA is adequately resourced to perform its functions for Ascott Reit, and has appropriate standing within the Manager, and that it has maintained its independence from the activities that it audits.

(D) UNITHOLDER RIGHTS AND RESPONSIBILITIES

Principle 14: Unitholder RightsPrinciple 15: Communication with UnitholdersPrinciple 16: Conduct of Unitholder Meetings



The Manager is mindful of the concerns of the Unitholders and the paramount need to treat all Unitholders fairly and equitably, in particular, to avoid making any selective disclosure. In line with the disclosure obligations of Ascott Reit under the Listing Manual, it is the Board’s policy to inform the Unitholders of all major developments that impact Ascott Reit.

Ascott Reit believes that it should engage in regular, effective, fair, unbiased, timely and transparent communication with the Unitholders. Communication channels with the Unitholders include:

• media and analysts’ briefings;• local/overseas roadshows and conferences;• announcements and press releases on major developments and other material information relating to Ascott Reit,

as may be appropriate;• annual reports;• annual general meetings and extraordinary general meetings, for which notices of meeting and relevant

explanatory memoranda thereto shall be issued;• disclosures to the SGX-ST; and• Ascott Reit’s website at http://www.ascottreit.com

The Manager has implemented quarterly financial reporting for Ascott Reit since the establishment of Ascott Reit. Financial results and other price sensitive information in public announcements are presented in a balanced and understandable manner to facilitate the proper understanding and assessment of Ascott Reit’s performance, position and prospects.

In accordance with the Property Fund Appendix, Ascott Reit will be holding an annual general meeting of the Unitholders once every calendar year. Further, as and when extraordinary general meetings of the Unitholders are required to be held, each Unitholder shall be issued a copy of a circular or letter to the Unitholders which shall contain pertinent details of the matters to be proposed for the Unitholders’ consideration and approval. The notice of meeting, which shall set out all items of business to be transacted at the meeting of the Unitholders, will also be announced on SGXNet and advertised in the newspapers. Representatives of the Trustee, the Directors, the Manager’s senior management and the External Auditors will typically be in attendance at such general meetings, at which the Unitholders will be given the opportunity to air their views and ask questions regarding the matters tabled at the meetings. Resolutions put to the meetings relating to each distinct proposal shall be kept separate as appropriate unless they are interdependent and linked, and the reasons and material implications for the resolutions shall be explained to the Unitholders. Prior to exercising their votes at a general meeting, the Unitholders are duly apprised on the relevant voting procedure.

Ascott Reit’s distribution policy is to distribute at least 90% of its taxable income (other than gains on the sale of real properties or shares by Ascott Reit which are determined to be trading gains), with the actual level of distribution to be determined at the Manager’s discretion. Since listing, Ascott Reit has distributed 100% of its taxable income. Distributions, when paid, will be in Singapore dollars and will be made on a semi-annual basis, with the amount calculated as at 30 June and 31 December each year for the six-month period ending on each of the said dates. Under the Trust Deed, the Manager is required to pay distributions within 60 days of the end of each distribution period. In addition, in the event of an equity fund raising, the Manger will endeavour to pay distributions in advance for the period from the last date of distribution up to the day immediately preceding the date of issue of new Units, to ensure fairness to existing Unitholders.

With a view to encouraging greater Unitholder participation at Ascott Reit's general meetings, the Manager makes it a point to ensure that general meetings of Unitholders are always hosted at easily accessible, conveniently located venues within the central regions of Singapore. The chairman of the general meeting is also charged to ensure that Unitholders who are in attendance are given equal and adequate opportunity to voice their concerns and to pose any relevant questions they may have to the Directors at the general meeting. Unitholders also have the chance to approach Directors immediately after the close of the general meeting should they rather communicate their concerns to the Directors privately.


All the Directors are expected to attend every general meeting, and in particular, the chairmen of the Board and of the respective board committees make it a point to be present. A representative from the External Auditors will also be present at annual general meetings of Ascott Reit to address Unitholders' queries on the conduct of the audit or the preparation and content of the External Auditors' report, or to provide their input where required on any other financial information relevant to the agenda of the general meeting.

The chairman of the general meeting ensures that proper minutes of the meeting’s proceedings are kept, in which the relevant substantive questions, answers and discussions are summarised. Unitholders may request to inspect minutes at the Manager's premises with reasonable notice.

As a matter of practice, since 2011, Unitholders' votes on resolutions at general meetings have been conducted by poll, in order to provide better clarity and transparency on Unitholders' support of the resolutions. The Manager also promptly issues a detailed announcement of the poll results (both in absolute numbers and percentages of votes for and against) after the close of the general meeting. While the Manager has considered and will continue to consider employing electronic poll voting at each general meeting, the Manager has thus far been of the view that the relatively high costs of doing so have rendered it costs ineffective given Ascott Reit’s existing number of Unitholders and the present relative ease of undertaking a manual poll count for Ascott Reit.

(E) ADDITIONAL INFORMATION

Dealings with Related Parties

The Manager has established internal control procedures to ensure that all transactions involving any "interested party" (as defined in the Property Fund Appendix) and/or, as the case may be, any "interested person" (as defined in the Listing Manual) (Related Party) of the Manager and the Trustee in relation to Ascott Reit (Related Party Transactions) are undertaken on an arm’s length basis and on normal commercial terms, which are generally no more favourable than those extended to unrelated third parties, and will not be prejudicial to Ascott Reit and the Unitholders, in accordance with the applicable requirements of the Property Fund Appendix and/or the Listing Manual relating to the transaction in question. In respect of Related Party Transactions, the Manager would have to demonstrate to the Audit Committee that the transactions would be undertaken on normal commercial terms which may include obtaining (where practicable) quotations from parties unrelated to the Manager, or obtaining valuations from two independent valuers in accordance with the Property Fund Appendix.

In addition, Related Party Transactions (either individually or as part of a series or if aggregated with other transactions involving the same Related Party during the same financial year) which have value(s):

• equal to or exceeding S$100,000, but below 3% of Ascott Reit’s net tangible assets (3%: approximately S$46.4 million as at 31 December 2012), are subject to review by the Audit Committee at regular intervals;

• equal to or exceeding 3% but below 5% of Ascott Reit’s net tangible assets (5%: approximately S$77.4 million as at 31 December 2012), are subject to review by and prior approval of the Audit Committee; and

• equal to or exceeding 5% of Ascott Reit’s net tangible assets, are subject to review by and prior approval of the Audit Committee who may, if it deems appropriate, request for advice on the transaction from independent sources or advisers, including the obtaining of valuations from independent professional valuers. Further, under the Listing Manual and the Property Fund Appendix, such transactions also require the prior approval of the Unitholders at a meeting of the Unitholders.

If a member of the Audit Committee has an interest in a transaction, he shall abstain from participating in the review and approval process in relation to that transaction.

Further, the Trustee has the ultimate discretion under the Trust Deed to decide whether or not to enter into a Related Party Transaction. If the Trustee is to sign any contract with a Related Party, the Trustee will review the contract and the Related Party Transaction to ensure compliance with the relevant requirements of the Property Fund Appendix and the Listing Manual, as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to real estate investment trusts.

The Manager maintains a register to record all Related Party Transactions (equal to or exceeding S$100,000 in value) entered into, and the basis on which such transactions were entered into, including, inter alia, any quotations obtained to support such basis. The Manager also incorporates into its internal audit plan a review of all such Related Party



Transactions. The Audit Committee reviews the internal audit reports to ascertain that the guidelines and procedures established by the Manager to monitor and regulate Related Party Transactions have been duly complied with. Details of Related Party Transactions (equal to or exceeding S$100,000 each in value) entered during the financial year are disclosed on page 193 of this Annual Report.

Dealing with Conflict of Interest Issues

The Manager has instituted the following procedures to deal with conflicts of interests issues:

• It will not manage any other real estate investment trust which invests in the same type of properties as Ascott Reit.

• All resolutions in writing of the Directors in relation to matters concerning Ascott Reit must be approved by a majority of the Directors, including at least one independent non-executive Director.

• Independent Directors constitute at least half of the Board. The Audit Committee is comprised exclusively of independent non-executive Directors.

• In respect of matters in which CL and/or its subsidiaries have an interest, direct or indirect, any nominee Directors appointed by CL and/or its subsidiaries and representing its/their interests shall abstain from voting. In such matters, the quorum must comprise a majority of the independent non-executive Directors of the Manager and shall exclude such nominee Directors of CL and/or its subsidiaries.

• In respect of matters in which a Director or his associates have an interest, direct or indirect, such interested Director will abstain from voting. In such matters, the quorum must comprise a majority of the Directors and shall exclude such interested Director(s).

• The Manager and its associates are entitled to receive notice of, attend and vote or be counted in a quorum thereof at any meeting of the Unitholders convened to approve any matter in which the Manager or any of its associates has a material interest.

• If the Manager is required to decide whether or not to take any action against any person in relation to any breach of any agreement entered into by the Trustee for and on behalf of Ascott Reit with a related party of the Manager, it shall be obliged to consult with a reputable law firm (acceptable to the Trustee) which shall provide legal advice on the matter. If the said firm is of the opinion that the Trustee, on behalf of Ascott Reit, has a prima facie case against the party allegedly in breach under such agreement, the Manager shall be obliged to take appropriate action in relation to such agreement. The Directors (including the independent non-executive Directors) will have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the Trustee for and on behalf of Ascott Reit with a related party of the Manager and the Trustee may take such action as it deem necessary to protect the rights of the Unitholders and/or which is in the interests of the Unitholders. Any decision by the Manager not to take action against a related party of the Manager shall not constitute a waiver of the Trustee’s right to take such action as it deems fit against such related party.

Ascott Reit’s properties are located in Europe as well as in the Pan-Asian region and its strategy is to acquire serviced residences, rental housing properties and other hospitality assets located in any part of the world that are generating revenue and are yield accretive. The Ascott Limited (Ascott) owns and manages serviced residences and rental housing properties in Europe, the Pan-Asian region and the Gulf region. Potential conflicts of interests between Ascott and Ascott Reit may arise in respect of the serviced residence industry in Europe and the Pan-Asian region, where Ascott Reit’s properties are located and in any country where Ascott Reit’s investment strategy is to acquire serviced residences, rental housing properties and other hospitality assets located therein.

In order to mitigate conflict of interests between Ascott and Ascott Reit in Europe and the Pan-Asian region, the Trustee has been granted a right of first refusal by Ascott over the proposed disposal of (a) any properties that are used, or predominantly used, as serviced residences or rental housing properties in Europe and the Pan-Asian region (including those under the Ascott, Somerset and Citadines brands) and (b) any shares or equity interests in single- purpose corporations which hold such properties (each a Relevant Asset), by Ascott, its related fund or any of its wholly-owned subsidiaries (each an Ascott entity), for so long as Ascott Residence Trust Management Limited remains the manager of Ascott Reit and Ascott and/or any of its related corporations remain a shareholder of the Manager. Consequently, if an Ascott entity proposes to dispose of a Relevant Asset to an unrelated third party, or if a proposed offer of a Relevant Asset is made to an Ascott entity, Ascott is required to grant to the Trustee the first right to acquire the Relevant Asset for the benefit of Ascott Reit.


Furthermore, the interests of Ascott are aligned with that of Ascott Reit as it and its related corporations hold approximately 45% of the issued Units.

Risk Assessment and Management

Effective risk management is a fundamental part of Ascott Reit’s business strategy. Ascott Reit operates within the overall guidelines and specific parameters set by the Board. Each transaction is comprehensively analysed to understand the risk involved.

The Manager has determined that significant risk for Ascott Reit will most likely arise when making property investment decisions. Accordingly, the Manager has established procedures to be followed when making decisions. In accordance with this policy, the Board required comprehensive due diligence to be carried out in relation to the proposed investment, and a suitable determination is made as to whether the anticipated return on investment is appropriate, having regard to the level of risk.

In addition, the Board required that each major proposal submitted to the Board for decision is accompanied by a risk assessment and, where required, Management’s proposed mitigation strategies.

The Board will meet quarterly (or more often, if necessary) and will review the financial performance of the Manager and Ascott Reit against a previously approved budget. The Board will also review the business risks of Ascott Reit and will act upon any comments from the Auditors of Ascott Reit.

The Manager has appointed experienced and well-qualified management personnel to handle its day-to-day operations as well as those of Ascott Reit. In assessing business risks, the Board will consider the economic environment and risks relevant to the property industry. It reviews Management reports and feasibility studies on individual development projects prior to approving major transactions. The Management meets regularly to review the operations of Ascott Reit and discuss any disclosure issues.

Dealings in Securities

The Manager has voluntarily issued guidelines to its Directors and employees as well as certain relevant executives of Ascott which prohibit them from dealing in the Units (a) at all times while in possession of unpublished material price-sensitive information and (b) during the two weeks before and up to (and including) the time of the announcement of Ascott Reit’s results for the first three quarters and one month before and up to (and including) the time of the announcement of Ascott Reit’s full year results. Under these guidelines, Directors and employees as well as certain relevant executives of Ascott have also been directed to refrain from dealing in the Units on short-term considerations, and have also been apprised on and are aware of the prohibitions against insider trading at all times. All dealings in the Units by the Directors will be announced via SGXNet.

In addition, pursuant to the recent amendments to the SFA with effect from 19 November 2012, the Manager is also required to announce to the SGX-ST the particulars of its holdings in the Units and any changes thereto as soon as practicable and in any case no later than the end of the business day following the date on which it is aware of its acquisition or disposal of Units, as the case may be. The Manager will also not deal in the Units during the period one month before the public announcement of Ascott Reit’s annual and semi-annual results and, where applicable, property valuations. As for Ascott Reit’s first and third quarter results, the Manager will not deal in the Units during the two-week period before the public announcement of Ascott Reit’s first and third quarter results and, where applicable, property valuations. At all times, the Manager will not deal in the Units while in possession of unpublished material price-sensitive information.

Whistle-Blowing

The Audit Committee has reviewed the procedures in place to ensure that employees of the Manager and Ascott Reit are provided with well-defined and accessible channels to report on suspected improprieties in financial reporting, fraud, corruption, dishonest practices or other similar matters relating to Ascott Reit and the Manager, and the procedures for the independent investigation of any reports by employees and appropriate follow-up action. The aim of the whistle-blowing policy is to encourage the reporting of such matters in good faith, with the confidence that employees making such reports will be treated fairly and protected from reprisal to the fullest extent possible.


FROM GROWTH TO SUSTAINABILITYOUR PEOPLE AND THE COMMUNITY


As we pursue business goals, we are mindful of the need to give back to the community. Ascott Reit focuses on key corporate social responsibility efforts that aim to benefit the environment and communities we operate in. It resonates with our philosophy, which entails balancing business growth and commitment to our communities, the environment and our people.


OUR PEOPLE AND THE COMMUNITY

At Ascott Reit, corporate social responsibility and sustainability are integral to our business. We believe that this entails balancing financial priorities with doing what is right for our stakeholders, which include our communities, the environment and our people.

Caring for Our Communities

Ascott Reit champions various social causes aimed at providing brighter futures for underprivileged children in the communities where we operate. In particular, we are focussed on the areas of healthcare, education and shelter.

HEALTHCARE

In May, our properties in the Philippines partnered once again with Gawad Kalinga, a community development foundation, to provide 265 children from the impoverished village of Bagong Silang in Caloocan City with school supplies and hygiene kits. In addition to distributing these items, 25 staff also stepped forward as volunteers to teach the children how to do their part in conserving Planet Earth.

Together with Ascott and funding from the CapitaLand Hope Foundation, we also supported a Filipino pre-school operated by International Care Ministries (ICM), a Hong Kong-based non-profit organisation on Bohol Island. The school provides for the educational, nutritional and medical needs of 20 children from families with financial difficulties. As part of the holistic programme, ICM also provides training sessions covering issues on values, health and livelihood for parents. In September, nine of our staff travelled to Bohol to participate in an effort to construct new walls for the school. It was a gruelling but heart-warming day for our volunteers, who took the opportunity to interact with the kids.

Since 2007, our properties in Paris have been supporting Mécénat Chirurgie Cardiaque, a French association that has helped over 1,700 children from poor countries to receive treatment for congenital heart defects. Through generous contributions in logistics and financial support, the association seeks to alleviate suffering from a debilitating disease that is often fatal. In most of the cases, only surgical treatment can save these children. This year, we supported the operation of seven children. We also provided complimentary accommodation for 12 doctors and specialists who attended medical training programmes organised by the association. As an extension of our support, six corporate clients from key Ascott accounts, including the CEO of HUAWEI France, took part in a charitable car rally, Rallye du Coeur (Heart Rally), organised by the association in July.

EDUCATION

During Ramadan in August, management and staff from our properties in Indonesia joined 137 children from SOS Desa Taruna in Cibubur, an institution for orphans and children from financially destitute homes in Jakarta, for a break fast celebration. Bonding over prayers, music and traditional Indonesian dances performed by the children, our volunteers sought to spread happiness and festive cheer among the children.

Ascott staff building the walls of the pre-school in Bohol


Aside from the scrumptious dinner, the children were also delighted to receive stationeries, school supplies and gifts that we distributed at the event.

From May to September, Somerset Grand Fortune Garden Property Beijing and Somerset Olympic Tower Property Tianjin were engaged in “Building For Tomorrow, Building A Greener Future” – a charitable effort to donate books and school supplies to CapitaLand Xingfuzhilu Hope School located in the Inner Mongolia Autonomous Region. Through this initiative, we invited our residents to contribute inspirational books, as well as to write postcards with messages of hope and love using environmentally friendly materials to encourage the children from the school.

SHELTER

In Vietnam, staff at Somerset serviced residences in Ho Chi Minh City organised a charity trip to Thien Duyen Orphanage in the Cu Chi District in October. As part of the mission, Somerset’s staff and residents rallied together to raise funds and donate food items,

clothing, towels, toys and some 300 kilograms of rice to the young beneficiaries at the orphanage. This meaningful activity has brought immense happiness to 130 abandoned children who are mostly disabled.

In November, staff from Singapore took part in “Lift Your Hands to Lift a Smile” – an effort for children from lower income families supported by the Infant Jesus Homes and Children’s Centres (IJHCC).

Ascott staff with clients at charitable car rally

Ascott staff with Gawad Kalinga beneficiary

Ascott volunteers at IJHCC



A partner organisation of CapitaLand Hope Foundation, the IJHCC provides in-residence care, as well as before- and after-school care for children. It also endeavours to provide a nurturing and home-like environment to meet the emotional, social and educational needs of its charges. Through the effort, we aim to improve living environments by refurbishing the premises, and encouraging learning through the donation of books and educational items. Volunteers from our various properties in Singapore also came together to help out with post-refurbishment clean up, the moving in of furniture and books, and to organise art and craft sessions and outdoor activities for the children.

Creating a Sustainable Environment

At Ascott Reit, we strongly believe that there are infinite ways to go green and support sustainability efforts. Together with Ascott, the leading international serviced residence owner-operator, we are uniquely positioned to play active roles in transforming business practices and employee mindsets, and to bring about positive impact on the environment. We see it as our responsibility as an industry leader to set a good example, and to make Planet Earth a better home for all. Ultimately, our pledge towards a clean and green future resonates with our commitment to people – by showing care and respect for our shared environment.

Ascott Reit adopts environmentally friendly practices across its global properties by incorporating energy-efficient features and durable building materials in all refurbishment programmes. We establish procurement guidelines to help our serviced residences “reduce, reuse and recycle” by switching to energy-saving light bulbs, solar-powered water heaters, motion-detector lighting, biodegradable laundry bags and bathroom amenities with innovative and recyclable packaging to minimise wastage. Water and electricity conservation, waste reduction, and

recycling are part and parcel of the way our properties operate. In 2012, our reduction in energy and water consumption was on track to meet our target of 15% reduction by 2015 compared to the base year of 2008.

COMMEMORATING EARTH HOUR

On 31st March 2012, all Ascott Reit properties participated in Earth Hour, an annual global movement to fight global warming. The properties’ beacon and other non-essential lights were turned off from 8.30pm throughout the night for 10 hours. We took the opportunity to organise themed events, and to reach out to our residents with innovative green ideas.

In Hanoi, our Somerset serviced residences went “beyond the hour” by organising an excursion to the Ba Vi National Park to lend support to the dedicated arborists who labour tirelessly for our ecosystem by planting and caring for trees. During the outing, both staff and residents observed pruning demonstrations and other cultivation processes relevant to protecting trees. Other activities included a Cubbies Kids’ drawing contest to promote environmental awareness among the young, and a visit to historical sites.

In China, Somerset Xu Hui Shanghai celebrated the occasion with a “2012 Happy Earth Hour Night”. A variety

Gardening activity with underprivileged children at Jamiyah Children’s Home


of games were also organised to inculcate green habits among residents and staff.

ACTIVITIES WITH A CAUSE

As part of the Group’s commitment towards Go Green @ Ascott, all Ascott Reit properties are active supporters of Earth Day activities every first Friday of the month. On this day, we go the extra mile in our effort to promote green practices amongst staff and residents. In addition, all properties are encouraged to turn off selected lighting points that do not impact the safety and security of residents and employees.

In June, Somerset Chancellor Court and Somerset Ho Chi Minh City took part in the Ho Chi Minh City Youth Union’s “Green Sunday” programme to commemorate World Environment Day. Staff from the serviced residences joined members of the union, the local police department as well as local residents to plant more than 400 tree saplings along the canal in District 12 of Ho Chi Minh City.

In December, staff volunteers in Singapore participated in gardening activities with underprivileged children from Jamiyah Children’s Home (Darul Ma’wa), a Home that provides educational, moral and emotional support for underprivileged children. Through this volunteering activity and generous donation from Ascott to build a knowledge garden at Jamiyah Children’s Home, the children have a chance to cultivate a love for the environment and contribute to conservation efforts.

2012 Happy Earth Hour Night in Shanghai

Tree planting in Ho Chi Minh City

Ascott staff and residents at Ba Vi National Park



ENVIRONMENT, HEALTH AND SAFETY

Protecting the environment and ensuring occupational health and safety is of paramount importance to Ascott Reit. In line with CapitaLand’s policies, all Ascott Reit’s properties are certified to international standards for environment management (ISO 14001) and occupational health and safety management systems (OHSAS 18001). In the spirit of preserving earth’s limited resources and creating greater awareness of the environmental impact of operations performed within the workplace, the Group sets clear targets for energy, water and paper conservation. Safety risks involved in the performing of everyday activities are routinely highlighted, and various control measures are put in place to minimise such risks and to avoid the occurrence of workplace injuries. To reinforce this initiative, all Ascott properties renew their pledge towards zero incidents, injuries and fatalities annually.

As a Group, we will continue to support the Ascott’s environmental and social responsibility commitments. We will also continue to be active green advocates in the cities and countries where we are represented.

Nurturing Our Human Capital

Ascott Reit recognises the importance of nurturing its talents, and places strong emphases on the recruitment, development and engagement of its human capital. As we continue to expand our global network, it is ultimately people who deliver the results by driving business growth and maintaining our edge amidst the competitive operating environment.

To support our scale and build our leadership pipeline, we leverage on Ascott, our sponsor, to offer programmes tailored to individuals of varying work experiences. For

instance, we offer the Ascott Management Associates Programme for fresh graduates, as well as the Accelerated Residence Management Programme for experienced hires who wish to make a career switch to real estate and hospitality management. From the day that new hires join us, they are empowered and entrusted with responsibilities and challenges. This, together with comprehensive orientation and on-the-job coaching, serve as good foundation for successful careers with us.

Ascott Reit taps into developmental programmes offered by Ascott’s global training institute, Ascott Centre for Excellence (ACE), to sharpen both functional and management capabilities of its operations staff. Beyond classroom training, developmental opportunities are also extended to all employees, through staff transfers, overseas postings and cross-country exchange programmes such as The Ascott Global Exchange Programme.

We take pride that our human capital developmental programmes are customised specifically for our business in real estate and hospitality management. This is to ensure that our thought processes and service standards are aligned, wherever our colleagues may be posted to, across our global network of serviced residences.

Ascott Centre for Excellence, the first global training institute by a serviced residence company


ENGAGING OUR WORKFORCE

Tapping into our diverse background across 68 properties in 12 countries, we encourage the sharing of ideas and feedback through various informal and formal channels. This is so that we can constantly learn from one another and strive to make things better.

To foster a close-knit culture that encourages open sharing, the management communicates and engages regularly with staff via town hall sessions and informal gatherings, to keep everyone updated on business initiatives and corporate directions. We believe that engaged employees who enjoy a positive employee experience are best positioned to deliver their best performance.

Sharing by senior management

2012 Highlights

Committed 3% of payroll towards staff training and development

ACE has more than 50 full-time and part-time trainers

Almost 100% of the staff from Ascott Reit properties underwent staff development

Annual staff bowling competitionStaff interaction at Ascott Global Conference


Ascott Reit takes a proactive approach towards Investor Relations. As the Manager of Ascott Reit, ARTML actively engages with stakeholders ranging from Unitholders and prospective investors, to media and financial analysts, as well as private organisations and institutional investors to keep them well informed of all major developments which may have an impact on Ascott Reit in a timely manner. Ascott Reit is also committed to treating all Unitholders fairly and equitably, and strives to provide relevant and accurate information to them in order for them to exercise their rights in an informed manner.

Since the listing of Ascott Reit on the Singapore Exchange in March 2006, the provision of timely and accurate disclosures is of importance to the Board. ARTML ensures this through regular communications, face-to-face meetings, teleconferences, email updates, local and overseas investor road shows and conferences and updates on Ascott Reit’s website (www.ascottreit.com) where current and archived information can be found. We also organise familiarisation visits to Ascott Reit’s properties and serviced residences for financial analysts and institutional investors upon request.

In line with our commitment towards transparency, we ensure that only consistent, full and accurate disclosures, financial results, announcements, press releases and presentation slides are posted on SGXNet. These are also available to Unitholders, media, financial analysts and other members of the investing community via Ascott Reit’s website. Information on ARTML’s Board of Directors, Management, Ascott Reit’s property portfolio, and other material updates are also posted on the website.

In 2012, ARTML conducted two results briefing sessions for analysts and media – the first was in January for the announcement of full-year 2011 results, while the second was in July in conjunction with the half-year 2012 results. On top of results briefing sessions, ARTML also conducted Non-Deal road shows both locally and abroad. We used these opportunities to share our perspectives on the market outlook, and to field questions from analysts and media.

Over the year, we met with more than 100 fund managers and analysts through one-on-one appointments and at the following events:

INVESTOR RELATIONS

Event Location Date

CapitaLand Group Debt Investor Day Singapore 2 March 2012

Daiwa Investment Conference Tokyo 5 March 2012

UOB ASEAN Corporate Day Taiwan 6 March 2012

Macquarie Post 1Q 2012 Results Investors’ Luncheon Singapore 27 April 2012

Citi Property Conference Singapore 11 May 2012

Standard Chartered Non-Deal Road Show Hong Kong 17–18 May 2012

DBS Non-Deal Road Show Singapore & Hong Kong 10–18 July 2012

SIAS Investor Week Singapore 26 August 2012

CIMB Non-Deal Road Show Kuala Lumpur 3–4 September 2012

CLSA Post 3Q 2012 Results Investors’ Luncheon Singapore 24 October 2012

Morgan Stanley Asia Pacific Summit Singapore 9 November 2012

UBS Global Real Estate CEO Conference London 27–28 November 2012


Unit Price Performance

Closing Price 2012 2011

High S$1.365 (28 Dec) S$1.26 (6 Jan)

Low S$0.985 (5 Jan) S$0.93 (6 Oct)

Average S$1.15 S$1.12

Last Done S$1.36 (31 Dec) S$0.99 (30 Dec)

Trading Volume

Number of Units 2012 2011

Average daily trading volume 1,070,347 1,001,356

Total trading volume 269,175,000 250,339,000

Financial Calendar

Activity 2013 2012

Release of full year results 23 January 19 January

Payment of distribution to Unitholders 28 February 27 February

Annual General Meeting 23 April 23 April

Release of first quarter results April 25 April

Release of half year results July 27 July

Payment of distribution to Unitholders August 29 August

Release of third quarter results October 23 October

Accolades

In 2012, ARTML won the 2011 “Best Annual Report Award (Bronze)” in the “Reits and Business Trusts’’ category at the 2012 Singapore Corporate Awards, and was listed on the 2012 World Finance 100 for our commitment to business excellence.

We will continue to actively engage with Unitholders through regular communications programmes and good Investor Relations practices.


FROM EXPERIENCE TO EXPERTISEPORTFOLIO OVERVIEW


With every experience, Ascott Reit seeks to improve and set new benchmarks in operational performance. Our commitment towards excellence has allowed us to continuously harness our knowledge, leverage our strengths and refine our expertise – to become a premier serviced residence real estate investment trust recognised for quality assets and delivering optimal returns.


PORTFOLIO OVERVIEW

Competitive Strengths of Our Properties

LOCATION

Ascott Reit’s 48 serviced residences and 20 rental housing properties are located in key gateway cities across Singapore, Australia, Belgium, China, France, Germany, Indonesia, Japan, the Philippines, Spain, United Kingdom and Vietnam. The properties are well served by public transportation and within walking distance to amenities such as restaurants and supermarkets.

Four serviced residences are managed under the Ascott brand, 13 are managed under the Somerset brand while 29 are managed under the Citadines brand. The new Cairnhill serviced residence with a hotel license is under development (expected delivery in 2017), while a new property in Hamburg, Germany, is managed under the brand Madison Hamburg. 19 rental housing properties in Japan are managed under the following local brands: Asyl Court, Gala, Joy City and Zesty. The remaining rental housing property is managed under Salcedo Residences in Manila.

All serviced residences and rental housing properties are managed by SRMCs, except Madison Hamburg which is managed by a third-party operator.

SCALE

Ascott is the largest international serviced residence owner-operator. Its strong global brand and 28-year industry track record enable our properties to enjoy worldwide recognition as preferred accommodations for long-stay business travellers.

Through a combination of serviced residence and rental housing units, Ascott Reit’s portfolio of 7,427 apartment units cater to a wide range of customer needs. These include studio, one to three-bedroom, and penthouse apartment units.

We leverage on Ascott to achieve economies of scale, benefitting from its global recognition, international sales, wide distribution and marketing networks and centralisation of key functions such as finance and procurement.

AWARDS

In 2012, awards won by properties in Ascott Reit’s portfolio include:

• ‘Best Serviced Residence in Asia-Pacific’ (Business Traveller Asia-Pacific Awards 2012) Ascott Raffles Place Singapore (Ranked 1st) and Ascott Jakarta (Ranked 2nd)

• ‘Best Serviced Apartment Company’ (Business Traveller UK Awards 2012) for all Citadines branded properties in UK (Ranked 2nd)

In addition, 18 properties in gateway cities including London, Singapore, Paris and Berlin were awarded the TripAdvisor Certificate of Excellence 2012.

Our Extended-Stay Business Model

Our guest base comprises mainly corporate travelers and their families who relocate due to overseas postings. Corporate travel, which is driven by long-term macro-economic factors such as Gross Domestic Product (GDP) growth and FDI, is generally more stable than the seasonal nature of tourism travel.

Our flexible business model provides short to long-term accommodation. The average length of stay for properties on serviced residence management contracts is more than five months, while rental housing properties with leases of two years offer greater income stability to the portfolio. Conversely, shorter-term stays present opportunities for organic growth and higher operating margins.

For Ascott Reit, income stability is also supported by master leases and serviced residence management agreements with minimum guaranteed income.

Master Leases

22 of our properties, 17 in France, three in Germany and two in Singapore1, are on master leases. The master lessees, which are Ascott subsidiaries, pay fixed net rental per annum to Ascott Reit. The Europe master leases are generally subject to annual rental revisions pegged to indices representing construction cost, inflation or commercial rental prices. These master leases have an average weighted remaining tenure of about six years.



Serviced Residence Management Contracts with Minimum Income Guarantee

Seven of our properties across United Kingdom, Belgium and Spain are on serviced residence management contracts with minimum guaranteed income. In addition, one of our properties in Vietnam has entered into an agreement with Ascott under which Ascott provides yield protection for a minimum threshold EBITDA per annum for five years.

2012 Overview

In 2012, we acquired four quality assets: Citadines Karasuma-Gojo Kyoto in Japan, Ascott Raffles Place Singapore, Ascott Guangzhou in China, and Madison Hamburg in Germany. In addition, we divested Somerset Grand Cairnhill Singapore to CapitaLand for redevelopment into a new serviced residence (new Cairnhill serviced residence) and a residential development. As at 31 December 2012, Ascott Reit’s portfolio consists of 7,427 apartment units in 68 properties with an asset size of S$3.2 billion.

We also focus on asset enhancements to optimise yields. In Indonesia, the refurbishment of the 198-unit Ascott Jakarta, which commenced in July, is scheduled to be completed by the fourth quarter 2013. In Vietnam,

following the renovation of apartments in November 2011, we refurbished the lobby of the 185-unit Somerset Grand Hanoi in July to improve guest arrival experience. In Europe, renovation of the 169-unit Citadines Sainte-Catherine Brussels was completed in the fourth quarter 2012. We also commenced renovation at the 154-unit Citadines Toison d’Or Brussels, due for completion by the first quarter 2014.

Asset enhancements were also carried out by Ascott, the master lessee, for 385 apartment units in five of our properties in France. Citadines Louvre Paris commenced renovation in July and will re-open in first quarter 2013 as the first boutique serviced residence under the new label Citadines Suites Louvre Paris. This was followed by the phase-two renovation of 58 units of the 106-unit Citadines City Centre Grenoble, which was completed in the fourth quarter 2012. The 58-unit Citadines Croisette Cannes underwent refurbishment in October 2012 and completion is expected in the first quarter 2013. Similarly, the refurbishment of 49 units at the 101-unit Citadines City Centre Lille in December 2012 will be completed in the first quarter 2013. We also expect enhancement works at the 169-unit Citadines Place d’Italie Paris, which commenced in November 2012, to be completed by the first quarter 2014.


PORTFOLIO OVERVIEW

Key Statistics of Our Portfolio* (for the year ended 31 December 2012)

Serviced Residence

Rental Housing

Portfolio Occupancy Portfolio Average Daily Rates

Portfolio Revenue Per Available Unit

Number of Apartment Units

509 1,120

2011 2012

6,091

5096,854573

13%

2011 2012

S$143

S$145

1%

2011 2012

S$180S$182

1%

2011 2012

79%80%

1%

Top 10 Corporate Clients of Ascott Reit by Apartment Rental Income

Corporate Client Industry Percentage of Total Apartment Rental Income

Citadines SA Group1 Real Estate & Lodging 14.1%

Embassies of OECD Countries Government & NGOs 3.1%

Accenture Information & Communications Technology 1.3%

Toyota Group Consumers 0.8%

Standard Chartered Bank Financial Institution 0.8%

Samsung Group Consumers 0.8%

British Petroleum Energy & Utilities 0.6%

Amdocs Information & Communications Technology 0.6%

SAP AG Information & Communications Technology 0.5%

CapitaLand Group2 Real Estate & Lodging 0.4%

Total 23%

1. Citadines SA Group is the master lessee of the France and German properties. Citadines SA and its subsidiaries are wholly owned subsidiaries of The Ascott Limited.2. Ascott Reit and/or the Property Holding Companies may license apartment units to CapitaLand, its subsidiaries and associates (excluding Ascott, its subsidiaries and

associates) (the “CapitaLand Group”) for use as staff accommodation.

* Portfolio Occupancy, Portfolio Average Daily Rates and Portfolio Revenue Per Available Unit Information do not include statistics of the rental housing and properties on master leases.


PORTFOLIO OVERVIEW

FY 2012 Portfolio Information1

Portfolio Apartment Rental Income by Industry2

1. Portfolio information relates to properties on management contracts and rental housing only. Information for properties on master leases is not included.

2. Based on apartment rental income for corporate accounts only.

Industrial 18%Financial Institutions 14%Government & NGOs 14%Consumers 12%Energy & Utilities 7%Manufacturing 7%IT 7%Real Estate/Lodging 6%Media & Telecomms 3%Healthcare 3%Others 9%

Portfolio Apartment Rental Income by Length of Stay

1 week or less 37%Less than 1 month 16%1 to 6 months 20%6 to 12 months 11%More than 12 months 16%

Portfolio Apartment Rental Income by Market Segment – Asia Pacific Portfolio

Corporate Travel 82%Leisure 18%

Porfolio Apartment Rental Income by Market Segment – Europe Portfolio

Corporate Travel 45%Leisure 55%


Ascott Reit will own four leasehold serviced residences in Singapore upon completion of the acquisition of the new Cairnhill serviced residence to be expected in 2017. The 146-unit Ascott Raffles Place Singapore enjoys prime location in the city’s central business district, the 197-unit Somerset Liang Court Property Singapore is located in Clarke Quay, a dining and entertain ment hub, and the 154-unit Citadines Mount Sophia Property Singapore is located in the heart of Singapore’s arts, culture and learning district. The new Cairnhill serviced residence will be located in Singapore’s prime shopping and entertainment belt in Orchard Road.

The average length of stay in our Singapore properties is about four months.

SINGAPORE 4 Properties 868 Units¹

OPERATIONS REVIEW


S$47.4mTotal Revenue (2012)

S$26.4mTotal Gross Profit (2012)

S$561.3mAscott Reit’s share ofproperty values(including Fixed Assets)



2012 Review

Singapore’s growth was robust in 2011, even though uncertainties in global markets cast a lingering shadow on 2012. As a result, Singapore’s domestic economy managed an overall GDP growth of about 1.2% in 2012.While visitor arrivals into Singapore improved due to new attractions such as Gardens By The Bay and the International Cruise Terminal, this was not matched by corresponding growth in business and corporate arrivals. The prolonged slowdown in global economic conditions adversely affected corporate business travel particularly in the Meeting, Incentive, Conventions and Exhibitions (MICE) market. In spite of these challenges, Somerset Liang Court Property Singapore and Citadines Mount Sophia Property Singapore registered an increase in RevPAU. However, due to divestment of Somerset Grand Cairnhill Singapore, the overall RevPAU for Singapore decreased by 2% from S$243 in 2011 to S$238 in 2012.

Following Unitholders’ approval during the Extraordinary General Meeting in July, Somerset Grand Cairnhill

Singapore was divested in September with the last day of operations on 27 September 2012. The new Cairnhill serviced residence will be built together with high-end residential units for sale by CapitaLand, as part of the redevelopment of Somerset Grand Cairnhill Singapore. Ascott Raffles Place Singapore was acquired as part of the transactions and added to the portfolio in September.

2013 Outlook

The Economist Intelligence Unit (EIU) is projecting Singapore’s GDP growth to be 2.9% in 2013, an optimistic forecast despite prevailing challenges in the global economy and the likelihood of weaker exports due to recessionary pressures of a prolonged crisis.

The Singapore Tourism Board expects both leisure and business visitor arrivals to grow in 2013. Major events and new attractions such as the Marine Life Park and River Safari are expected to bolster Singapore’s position as a choice travel destination and will contribute to the arrival volume and MICE demand in Singapore. In addition, Singapore’s status as a key financial hub in the region is expected to sustain business travel arrivals.

1. The property was acquired on 28 September 2012, therefore FY 2012 performance relates to the period from 28 September to 31 December 2012.2. The property was divested on 28 September 2012, therefore FY 2012 performance relates to the period from 1 January to 27 September 2012.

Gross Rental Income (S$’000) FY 2012 FY 2011

Ascott Raffles Place Singapore1 2,328 –

Somerset Grand Cairnhill Singapore2 13,158 18,590

Somerset Liang Court Property Singapore 18,147 17,861

Citadines Mount Sophia Property Singapore 11,310 11,192

Revenue Per Available Unit (S$) FY 2012 FY 2011

Somerset Grand Cairnhill Singapore2 266 282

Somerset Liang Court Property Singapore 252 248

Citadines Mount Sophia Property Singapore 201 199

Citadines Mount Sophia Property Singapore Somerset Liang Court Property Singapore


OPERATIONS REVIEW

AUSTRALIA 1 Property 84 Units

Ascott Reit owns one freehold serviced residence in Perth. The 84-unit Somerset St Georges Terrace Perth is conveniently located in the central business district.

The average length of stay in the property is less than a month as it caters mostly to domestic business travel.




Somerset St Georges Terrace Perth


2012 Review

In 2012, Australia recorded a GDP growth of 3.5%, with mining and financial services sectors as the largest contributors.

The hospitality and tourism sectors saw modest recovery in both international and domestic arrivals. In Western Australia the hospitality industry was boosted by the mining and resources sector, with Perth recording the highest average daily rates and unprecedented demand for short-stay accommodation. This was reflected in our property’s performance with RevPAU growth of 6% at S$214 for 2012 compared to S$201 in 2011. Our property in Perth also enjoyed high ADR rates, with an average room rate growth of 11% per annum. In April, Ascott Reit divested Somerset Gordon Heights Melbourne. The property has the smallest number of apartment units with only 43 units in operation. Also, the development is 13 years old and has reached a stage that offers limited growth. The net gain from the divestment was approximately S$0.6 million.

2013 Outlook

According to EIU, Australia’s GDP is expected to continue on a growth path of 3.1% in 2013. This is supported by an export sector that will benefit from the trading opportunities created out of new bilateral free-trade deals and the country’s deepening ties with Asian economies such as China and India. However, consumer sentiment could remain volatile for some time, especially with fears of a slowdown in China and global economic uncertainty.

In Perth, the importance of long-term assignments to the serviced apartments industry is growing, despite the temporary slowdown in the resources sector. The need for more rooms has become a major focus of the government in opening up opportunities for domestic and global accommodation developers and/or operators to gain presence in Australia. Additional supply is set to ease the demand situation in Perth slightly, and the hospitality industry should continue to enjoy strong growth and healthy occupancy rates in the year ahead.


Somerset St Georges Terrace Perth 6,727 6,322

Somerset Gordon Heights Melbourne1 624 2,468


Somerset St Georges Terrace Perth 214 201

Somerset Gordon Heights Melbourne1 116 148

1. The property was divested on 26 April 2012, therefore FY 2012 performance relates to the period from 1 January to 25 April 2012.

Somerset St Georges Terrace Perth Somerset St Georges Terrace Perth


OPERATIONS REVIEW

BELGIUM 2 Properties 323 Units

Ascott Reit owns two freehold serviced residences in Brussels. The 154-unit Citadines Toison d’Or Brussels is located in the shopping district of Avenue Louise close to Royal Palace and Embassies. The 169-unit Citadines Sainte-Catherine Brussels is located in the heart of the historical city near the famous flower market and Grand-Place showcasing impressive Flemish baroque architecture.

The average length of stay in our Brussels properties is less than one month.




Citadines Toison d’Or Brussels



Citadines Sainte-Catherine Brussels 4,676 4,761

Citadines Toison d’Or Brussels 5,250 5,546


Citadines Sainte-Catherine Brussels 74 75

Citadines Toison d’Or Brussels 91 96

Citadines Sainte-Catherine Brussels Citadines Sainte-Catherine Brussels

2012 Review

Despite the lingering effects of the Euro crisis and a downgrade of the country’s credit ratings to AA by Standard & Poor’s, Belgium’s tourism industry remained resilient. In 2012, Brussels’ most important foreign source markets were France, UK, Spain and Germany, while the most significant growth in short stays came from Brazil, China, Russia and Poland.

The performance of our two properties in Belgium was stable. The overall RevPAU decreased by 4% from S$85 in 2011 to S$82 in 2012. This was mainly due to depreciation of Euro against the Singapore Dollar and ongoing renovation of Citadines Sainte-Catherine Brussels.

2013 Outlook

According to EIU, GDP growth is expected to be flat in 2013. The Belgian government is expected to implement austerity measures in 2013 in order to reduce public deficit. The country’s debt has to be diminished to 60% of GDP in order to comply with European Union (EU) rules.

Brussels has always attracted business visitors and delegates involved in EU summits and conferences. However, the city is appealing to leisure tourists by positioning itself as a cultural and high-end destination.

The extension of the Brussels Airport in 2016 is expected to bring additional flights and increase arrival numbers. Hotel performance is expected to remain stable in 2013, on the back of a strong corporate market and domestic leisure demand. Brussels is well known for its easy access to the heart of Europe and will therefore continue to be popular with event organisers.

In January 2013, Citadines Toison d’Or Brussels commenced renovation works with completion expected in the first quarter 2014.


OPERATIONS REVIEW

Ascott Reit owns four leasehold serviced residences across China in Beijing, Shanghai, Tianjin and Guangzhou. The 221-unit Somerset Grand Fortune Garden Property Beijing (of which Ascott Reit owns 81 units) is located in the Lufthansa Commercial Area. The 167-unit Somerset Xu Hui Shanghai is in the exclusive Xu Hui residential district. The 185-unit Somerset Olympic Tower Property Tianjin is located in the heart of the Heping District, the city’s prime commercial, entertainment and residential area. The 208-unit Ascott Guangzhou is located in the Tianhe central business district.

The average length of stay in our China properties is about nine months.

CHINA 4 Properties 641 Units

2012 Review

China’s economic expansion slowed to 7.8% Y-o-Y in 2012 amid external jitters and domestic woes. The growth rate, slowest since 1999, was down from 9.3% in 2011 and 10.4% in 2010. Nonetheless, China’s GDP growth rebounded in 4Q 2012 to 7.9% from 7.4% in 3Q. This is on the back of strong trade data as well as improving consumption and investment figures. In 2012, China became the world’s biggest recipient of FDI valued at US$112 billion while its tourism revenues reached RMB 2.6 trillion, up by 14% Y-o-Y. However, fewer tourists came to China, with about 133 million overseas tourists last year, down 1.5% Y-o-Y.

Ascott Reit’s Somerset Grand Fortune Garden Property Beijing recorded occupancy improvements and healthy ADR with RevPAU growth of 12% to S$173 as compared to S$154 in 2011. In Shanghai, Somerset Xu Hui’s occupancy and RevPAU improved as supply moderated from the overhang post 2010 Shanghai Expo. Somerset Olympic Tower Property Tianjin is poised to keep up with heightened market competition as RevPAU grew by 9% at S$111 compared to S$102 in 2011. Renovation works were completed in 2010 (phase one) and 2011 (phase two) respectively. Ascott Guangzhou was acquired in September from Ascott. The acquisition will strengthen our presence in another first-tier city in China.

Citadines Mount SophiaProperty Singapore




Ascott Guangzhou


2013 Outlook

According to EIU, China’s GDP is poised for an 8.5% growth in 2013. The development of the service industry is expected to bolster economic performance and promote business travel and lodging demand.

Beijing’s hospitality and serviced residence markets will see fairly stable demand, with the city continuing to attract MNCs to set up regional headquarters due to its educated workforce and well-established infrastructure. In addition, Beijing remains a key destination for both international and domestic travellers as the local government is committed to accelerating tourism development and expanding the MICE industry. Currently, 12 tourism-related projects are scheduled for development over the next few years.

Shanghai continues to be a hub for business activities and major events, and rental rates are expected to rebound as FDI inflow catches up with current serviced residence supply. The Shanghai government will likely provide more incentives to attract more MNCs to locate or upgrade their regional headquarters in the city. Shanghai is also encouraging foreign companies to set up research and development centres through policy enhancements and tax exemptions.

While Tianjin may experience temporary rate and occupancy pressures, the mid to longer-term outlook remains positive as the central government has earmarked the development of the Bohai region as one of its key economic priorities – a region likely to become China’s third economic powerhouse after the Pearl and Yangtze River Deltas. In addition, Tianjin government has decided to invest RMB 1.5 trillion over four years in 10 industrial sectors, ranging from petroleum and chemical to the aviation and aerospace sectors.

Guangzhou’s serviced residence market has become more competitive as the city develops and speeds up expansion of its international airport, harbours and rail hubs. Nonetheless, FDI outlook remains bright as Guangzhou develops into a regional financial hub. The government plans to roll out major state-funded projects, including key infrastructural developments and the Xincheng New City development.

China’s tourism market will continue to grow rapidly in the next few years despite the subdued global economic outlook. With its robust economic development and growing number of local and international visitors, China will remain an attractive market with strong growth potential.


Ascott Guangzhou1 2,271 –

Somerset Grand Fortune Garden Property Beijing 5,226 4,663

Somerset Xu Hui Shanghai 6,810 5,691

Somerset Olympic Tower Property Tianjin 8,463 7,694


Ascott Guangzhou1 119 –

Somerset Grand Fortune Garden Property Beijing 173 154

Somerset Xu Hui Shanghai 111 92

Somerset Olympic Tower Property Tianjin 111 102

1. The property was acquired on 28 September 2012, therefore FY 2012 performance relates to the period from 28 September to 31 December 2012.


OPERATIONS REVIEW

FRANCE 17 Properties 1,671 Units

Ascott Reit has 17 freehold serviced residences in France under the Citadines brand. Ten properties are located in the French capital, Paris, while seven are based in the regional cities of Marseille, Lyon, Lille, Grenoble, Montpellier and Cannes. The Paris properties are sited in prime areas near famous landmarks such as the Louvre, Eiffel Tower, Notre Dame and the Seine River. The remaining seven properties are conveniently located in the respective cities’ central districts. All 17 properties are on master lease arrangements with Citadines SA, a wholly owned subsidiary of Ascott, and their remaining terms vary between five to eight years.

The average length of stay in our French properties is less than one month.




Citadines Suites Louvre Paris


2012 Review

France faced a difficult economic and financial year with marginal GDP growth of 0.1% in 2012. Despite that, it remains the second largest European economy and the most visited country in the world with 81 million tourist arrivals in 2012. With major events including the Paris Motor Show and Paris Fashion Week, the hospitality market enjoyed increased demands from both corporate and leisure segments.

In order to enhance overall customer experience, brand value and yield across Europe, asset enhancements were also carried out by Ascott, the master lessee, for 385 apartment units in five of our properties in France. 51 units of Citadines Louvre Paris commenced renovation in July 2012 and will re-open in the first quarter 2013 as the first boutique serviced residence under the new label Citadines Suites Louvre Paris. This was followed by the phase-two renovation of 58 units of the 106-unit Citadines City Centre Grenoble, which was completed in the fourth quarter 2012. The 58-unit Citadines Croisette Cannes underwent refurbishment in October 2012 and completion is expected in the first quarter 2013. Similarly, the refurbishment of 49 units at the 101-unit Citadines City Centre Lille in December 2012 will be completed in the first quarter 2013. We also expect

enhancement works at Citadines Place d’Italie Paris which commenced in November 2012 to be completed by first quarter 2014.

For FY 2012, rental income is lower due to the depreciation of Euro against the Singapore Dollar.

2013 Outlook

According to the EIU, GDP growth in France is expected to remain at 0.1% in 2013. As a top destination world-wide, Paris will continue to draw long-haul visitors from emerging economies like China and increasingly, the Gulf region. Travel trends indicate that tourism in France will continue to grow, and in particular, the demand for French luxury goods.

Furthermore, major events such as the Paris Air Show, Roland Garros Tennis Open and the Paris Fashion Week are expected to boost visitor numbers in 2013. In Marseille, the city’s nomination as the 2013 European Capital of Culture should boost arrival numbers as well.

In 2013, Ascott, as master lessee, will re-open Citadines Suites Louvre Paris and embark on its refurbishment programmes at Citadines Presqu’île Lyon and Citadines Tour Eiffel Paris.


Citadines Antigone Montpellier 832 882

Citadines Austerlitz Paris 509 541

Citadines Castellane Marseille 567 602

Citadines City Centre Grenoble 1,469 1,537

Citadines City Centre Lille 1,548 1,620

Citadines Croisette Cannes 496 525

Citadines Prestige Les Halles Paris 5,298 5,622

Citadines Suites Louvre Paris 2,400 2,455

Citadines Montmartre Paris 2,958 3,096

Citadines Montparnasse Paris 1,502 1,595

Citadines Place d’Italie Paris 4,330 4,595

Citadines Porte de Versailles Paris 1,893 1,987

Citadines Prado Chanot Marseille 396 420

Citadines Presqu’île Lyon 1,264 1,341

Citadines République Paris 1,590 1,688

Citadines Tour Eiffel Paris 3,416 3,637

Citadines Trocadéro Paris 3,126 3,274


OPERATIONS REVIEW

GERMANY 3 Properties 430 Units

Ascott Reit owns three freehold serviced residences in Germany. The 118-unit Citadines Berlin Kurfürstendamm, the 146-unit Citadines Munich Arnulfpark and the 166-unit Madison Hamburg are conveniently located in the respective cities’ central districts.

The average length of stay in our German properties is less than one month.




Citadines Arnulfpark Munich


2012 Review

Despite the Eurozone debt crisis, Germany, being Europe’s largest economy, remains well supported by positive indicators including strong exports, stable GDP growth of 0.9%, low inflation and low unemployment rates in 2012.

The German hotel market recorded positive performance with a 2.8% increase in occupancy levels and a rise in average room rate by 3%. The hospitality market continued to be bolstered by large number of events and fairs in the main cities. Berlin remains an attractive destination for tourists and Munich has seen medical tourism growing due to its renowned medical infrastructure.

In November, we acquired Madison Hamburg, a quality freehold asset in a prime location in Hamburg. Hamburg is Germany’s second largest city and Europe’s third busiest port. The acquisition in this thriving commercial and transport hub is an opportunity to extend Ascott Reit’s footprint in a key city in Europe. The property is expected to deliver a stable EBITDA yield of 7%.

For FY 2012, rental income was lower due to depreciation of Euro against Singapore Dollar.

2013 Outlook

According to EIU, Germany’s GDP is expected to grow by 0.8% in 2013, while the forecast for inflation and unemployment are 1.8% and 6.8% respectively. With the protracted Eurozone crisis, it is likely that German policymakers will rollout stiffer domestic policies to mitigate any risks to political, economic and financial stability.

Berlin, being the capital of Germany, is an important leisure market for short trips and the domestic corporate market. Citadines Kurfürstendamm Berlin will likely benefit from its proximity to the Internationales Congress Centrum and fair grounds where MICE activities are located.

Munich is also likely to enjoy a high level of corporate demand as a key destination for international fairs and events such as Bauma, Oktoberfest and Expo Real in 2013. Additionally, Munich is a popular base for leisure travellers. Medical tourism has grown 20% Y-o-Y and is likely to remain an important economic contributor to the city.

Hamburg will continue to be a thriving manufacturing and transport hub. With an increase in 13.7 million passengers expected in 2013, Hamburg will remain one of Europe’s popular destination for leisure and business.


Citadines Kurfürstendamm Berlin 1,578 1,664

Citadines Arnulfpark Munich 2,017 2,164

Madison Hamburg1 570 –

1. The property was acquired on 15 November 2012, therefore FY 2012 performance relates to the period from 15 November to 31 December 2012.

Citadines Kurfürstendamm Berlin Madison Hamburg


OPERATIONS REVIEW

INDONESIA 2 Properties 401 Units

Ascott Reit owns two leasehold properties in Indonesia. The 198-unit Ascott Jakarta and the 203-unit Somerset Grand Citra Jakarta are located in Central Jakarta’s Golden Triangle business and shopping district.

The average length of stay in our Indonesian properties is more than five months.




Somerset Grand Citra Jakarta


2012 Review

Indonesia continued to experience steady economic growth, with GDP growth of 6.3% in 2012. With exports accounting for a small proportion of its GDP, Indonesia remained relatively insulated from the impact of the weakening global economy. Meanwhile, its robust economy was driven mainly by domestic consumption as a result of population growth and expanding income and expenditure among middle-income households.

At the capital city, Jakarta welcomed 30 million passengers in 2012. With plans by the government to expand and build airports to cope with the increase in demand the hospitality section is expected to benefit positively in the long term.

In tandem with Indonesia’s prosperity, Ascott Reit’s Indonesia portfolio performed well. Overall, ADR increased by 4%. The RevPAU for Ascott Jakarta decreased by 3% to S$109 in 2012 due to renovation which commenced in July 2012. The renovation is scheduled for completion in the fourth quarter 2013.

2013 Outlook

Supported by stronger domestic demand, urbanization and a working class population, Indonesia’s economy is expected to grow by 6.4% in 2013, while FDI inflows are expected to increase by 14%, according to EIU. Private consumption is also expected to expand in 2013. To strengthen GDP growth, the Indonesian government is increasing capital spending on infrastructure. With political stability, resilient industries and a diversified economy, the outlook for Indonesia is promising.

The uptrend in Jakarta’s hospitality market is likely to augur well for ADR. This has attracted an influx of mostly budget and mid-tier hotels, while several high-end hotels are starting operations. Furthermore, increased accessibility from low-cost carriers will likely improve market buoyancy for hospitality services.


Ascott Jakarta 7,915 8,107

Somerset Grand Citra Jakarta 6,443 5,938


Ascott Jakarta 109 112

Somerset Grand Citra Jakarta 90 84

Ascott Jakarta Ascott Jakarta


OPERATIONS REVIEW

JAPAN 22 Properties 936 Units

Ascott Reit’s portfolio in Japan comprises three freehold serviced residences and 19 freehold rental housing properties. The 79-unit Somerset Azabu East Tokyo and the 160-unit Citadines Shinjuku Tokyo command superb locations in the prime business and embassy districts in central Tokyo. The 124-unit Citadines Karasuma-Gojo Kyoto enjoys a premium address next to the Gojo subway station and is close to entertainment, retail and food and beverage outlets.

The 19 rental housing properties, which are targeted at the local population, are also centrally located in nine wards within Tokyo, namely, Minato, Bunkyo, Meguro, Nakano, Nerima, Setagaya, Shinjuku, Suginami and Taito. Their convenient locations offer residents easy access to public transportation, supermarkets and other lifestyle amenities.

The average length of stay of guests in our Japanese serviced residences is more than one month, whilst the typical average lease period of the rental housing properties is around two years.




Somerset Azabu East Tokyo


2012 Review

The Japanese economy grew at a healthy pace of 1.8% in 2012, spurred by massive reconstruction efforts following the 2011 earthquake and nuclear crisis. In the first half of 2012, a turnaround in foreign visitor arrivals led to optimism that Japan’s tourism market was gradually recovering to pre-earthquake levels. However, the continued global economic slowdown and intensified territorial dispute with China had an impact on both trade and tourism as well as the economy’s overall outlook.

Nonetheless, the commencement of operations of three international low cost carriers in 2012 has increased both domestic and inbound tourist flow. With the easing of nuclear radiation fears, business travel has recovered while FDI has reversed from 2011’s US$1.7 billion outflow to 2012’s US$0.6 billion inflow. Business travels to Tokyo grew compared to 2011 as business bookings increased by 5%.

Despite economic uncertainties, Ascott Reit's Japan serviced residences recorded improvements in performance. RevPAU increased by 17% to S$133 in 2012 and occupancies bounced back to pre-earthquake levels. Our 19 rental housing properties continued to achieve occupancies of more than 90%.

In March, we acquired a 60% stake in Citadines Karasuma-Gojo Kyoto. Kyoto is voted as the world’s best city in Asia to travel to. The city receives about 50 million travellers annually to experience its traditional culture, attend international conventions and visit various UNESCO Heritage sites. The property was acquired at an implied EBITDA yield of 5%.

2013 Outlook

Given Japan’s public finances and persistent deflationary pressures, the EIU expects the economy’s recovery to be protracted and GDP growth of 0.6% in 2013. Monetary policy will continue to ease under the new leadership which will result in Yen weakening that would subsequently help the export-oriented economy.

The inbound tourism market is likely to improve with corporate travel driving the recovery on the back of a 2013 FDI forecast of US$6.4 billion inflow. The Tourism Nation Promotion Basic Plan initiated by the government in 2012 aims to attract 18 million tourists by 2016. This plan includes airport projects around Japan such as the opening of Okinawa’s first budget airline terminal in October 2012. The rapid transformation of Japan’s aviation market with the expansion of open skies agreements and international low cost carrier operations is expected to further stimulate travel demand within and into Japan.

Citadines Shinjuku TokyoCitadines Karasuma-Gojo Kyoto


OPERATIONS REVIEW


Citadines Karasuma-Gojo Kyoto1 4,852 –

Citadines Shinjuku Tokyo 8,104 –

Somerset Azabu East Tokyo 3,570 3,498

Asyl Court Nakano Sakaue Tokyo 1,218 1,155

Gala Hachimanyama I Tokyo 1,247 1,286

Gala Hachimanyama II Tokyo 251 239

Joy City Koishikawa Shokubutsuen Tokyo 734 707

Joy City Kuramae Tokyo 1,157 1,186

Roppongi Residences2 985 2,785

Zesty Akebonobashi Tokyo 250 260

Zesty Gotokuji Tokyo 254 260

Zesty Higashi Shinjuku Tokyo 356 362

Zesty Kagurazaka I Tokyo 363 354

Zesty Kagurazaka II Tokyo 372 359

Zesty Kasugacho Tokyo 480 460

Zesty Koishikawa Tokyo 227 238

Zesty Komazawa Daigaku II Tokyo 645 623

Zesty Nishi Shinjuku III Tokyo 602 613

Zesty Sakura Shinmachi Tokyo 405 332

Zesty Shin Ekoda Tokyo 302 295

Zesty Shoin Jinja Tokyo 274 275

Zesty Shoin Jinja II Tokyo 340 321

1. The property was acquired on 29 March 2012, therefore FY 2012 performance relates to the period 29 March to 31 December 2012.2. The property was renamed from Somerset Roppongi Tokyo after conversion from a serviced residence to rental housing on 1 April 2012.


1. The property was acquired on 29 March 2012, therefore FY 2012 performance relates to the period 29 March to 31 December 2012.2. The property was renamed from Somerset Roppongi Tokyo after conversion from a serviced residence to rental housing on 1 April 2012, therefore FY 2012

performance relates to the period from 1 January 2012 to 31 March 2012.3. The property was renamed from Somerset Roppongi Tokyo after conversion from a serviced residence to rental housing on 1 April 2012, therefore FY 2012

performance relates to the period from 1 April 2012 to 31 December 2012.


Citadines Karasuma-Gojo Kyoto1 142 –

Citadines Shinjuku Tokyo 138 –

Somerset Azabu East Tokyo 123 121

Roppongi Residences2 40 105

Rental Per Square Metre (S$) FY 2012 FY 2011

Asyl Court Nakano Sakaue Tokyo 65 64

Gala Hachimanyama I Tokyo 55 56

Gala Hachimanyama II Tokyo 57 57

Joy City Koishikawa Shokubutsuen Tokyo 60 59

Joy City Kuramae Tokyo 58 59

Roppongi Residences3 51 –

Zesty Akebonobashi Tokyo 69 69

Zesty Gotokuji Tokyo 64 63

Zesty Higashi Shinjuku Tokyo 68 69

Zesty Kagurazaka I Tokyo 63 67

Zesty Kagurazaka II Tokyo 69 71

Zesty Kasugacho Tokyo 53 55

Zesty Koishikawa Tokyo 62 62

Zesty Komazawa Daigaku II Tokyo 60 59

Zesty Nishi Shinjuku III Tokyo 62 65

Zesty Sakura Shinmachi Tokyo 62 59

Zesty Shin Ekoda Tokyo 55 54

Zesty Shoin Jinja Tokyo 57 56

Zesty Shoin Jinja II Tokyo 56 56


OPERATIONS REVIEW

THE PHILIPPINES 3 Properties 524 Units

Ascott Reit has three serviced residences (two freehold and one leasehold) in the Philippines. All three properties, the 306-unit Ascott Makati, the 147-unit Somerset Millennium Makati and the 138-unit Salcedo Residences (of which 71 units are owned by Ascott Reit) are strategically located in Makati City’s central business district.

The average length of stay in our Philippines properties is more than two months.




Ascott Makati


2012 Review

Compared to 2011, the Philippines demonstrated resilience and positive GDP growth of 5.5% for 2012 amidst challenging global economic conditions. Government spendings sustained progress in the service sector, while an increase in overseas foreign workers remittances, which powers domestic consumption, fuelled local business growth. Concerted efforts towards strengthen ing the economy and a campaign to improve fiscal output has resulted in positive recognition and a Moody’s credit rating upgrade to one notch just below investment grade. This has broadened opportunities for business development and national growth.

Boosted by an aggressive tourism campaign “It’s More Fun in the Philippines”, international visitor arrivals in 2012 grew by 18%, with South Korea, United States, Japan, China and Australia among the top contributors.

June marked the expiration of Ascott’s master lease arrangement for Somerset Salcedo Makati. Consequently, the 71 units under Ascott Reit were duly converted to a management contract and rebranded Salcedo Residences. Despite the change and intensified industry competition brought about by new properties opened at year’s end, Ascott Makati and Somerset Millennium Makati maintained their market leadership with increased RevPAU by 8% to S$198 and by 7% to S$113 respectively. The positive results are attributed to strong contributions from the energy, business process outsourcing (BPO) and manufacturing industries.

2013 Outlook

For 2013, the EIU has forecasted GDP growth of 6.1% for the Philippines and a performance output buoyed by increased government expenditure on infrastructure projects, increased contributions from the food sector and strategic tourism campaigns. The favourable outlook is also backed by healthy projections for the BPO, electronics, construction, manufacturing, communication, and mining sectors. In particular, campaign-related spending for the scheduled 2013 national election is expected to generate growth for IT businesses.

The tourism outlook for 2013 is largely positive. The Philippines expects to welcome some 5.5 million visitors, representing a 22% increase from 2012’s 4.5 million, with inbound arrivals from key markets such as China and Taiwan. This is supported by aggressive tourism marketing, infrastructural enhancements and functional manpower training to spruce up the hospitality, tourism and service industries. New developments such as the proposed PAGCOR Entertainment City in Manila Bay have sparked additional investor interest in the Philippines. Besides the BPO, telecom and energy industries, the medical tourism market is also expected to flourish.

Meanwhile, competition is expected to intensify with the entry of new properties, such as hotels and casinos within Manila. We expect the increase in room inventory to be absorbed by business executives supporting a higher number of public-private partnerships and growing industries such as the manufacturing and mining sectors.


Ascott Makati 22,221 20,561

Somerset Millennium Makati 6,173 5,329

Salcedo Residences1 846 937


Ascott Makati 198 184

Somerset Millennium Makati 113 106

Salcedo Residences2 28 –

1. The property was renamed from Somerset Salcedo Property Makati after conversion from a master lease arrangement to a management contract on 1 July 2012.2. The property was renamed from Somerset Salcedo Property Makati after conversion from a master lease arrangement to a management contract on 1 July 2012,

therefore FY 2012 performance relates to the period from 1 July to 31 December 2012.


OPERATIONS REVIEW

SPAIN 1 Property 131 Units

Ascott Reit owns one freehold serviced residence in Barcelona under the Citadines brand. The 131-unit Citadines Ramblas Barcelona is located on the famous Las Ramblas boulevard, a top tourism and entertainment district in downtown Barcelona.

The average length of stay in the property is less than a month.




Citadines Ramblas Barcelona


2012 Review

Spain suffered from the financial crisis with a negative GDP growth of -1.5% in 2012. Even though Value Added Tax (VAT) has been raised in all sectors, tourism and hospitality remain high contributors to the economy. Compared to 2011, the number of visitors to Spain rose by 2.8% to reach 58 million in 2012.

Barcelona remains one of the top tourist destinations in Europe. In 2012, 25% of total arrivals in Spain visited its capital Barcelona, representing an increase of 9.8%. Barcelona-El Prat Airport registered over 35.14 million passengers which represents an increase of 2.2% as compared to 2011. Besides tourists from traditional markets like UK, France and Germany, Spain also recorded significant increases in visitor arrivals from emerging markets such as Russia and the Middle East.

The property’s performance remained stable. However in Singapore Dollars RevPAU decreased by 3% to S$119 in 2012, due to depreciation of Euro against Singapore Dollar.

2013 Outlook

The EIU expects Spanish GDP growth to decrease to -1.6%. While scaling back on spending in other sectors, Spain has invested in aggressive tourism campaigns

to promote its sunny beaches and cultural heritage, a trend supported by new hotels opening in 2013.

Barcelona was also chosen by GSM Association to be the Mobile World Capital from this year until 2018. As a result, Barcelona has become home to four major initiatives: Mobile World Congress (held every year in February), Mobile World Hub (a physical B2B centre featuring the capabilities and infrastructures associated with the development of Mobile World Capital Solutions), Mobile World Centre (a permanent exhibition facility) and the Mobile World Festival (promoting mobile usage and social media activities). Driven by heightened business activities, major Chinese corporations are expected to set up offices in Barcelona, while increased international collaboration is expected to have positive impact on business travel.

Renovation works for Citadines Ramblas Barcelona are planned for early 2013 in order to enhance the quality of the property in light of these developments. The renovated property is expected to be completed in the fourth quarter 2013.


Citadines Ramblas Barcelona 5,890 6,050


Citadines Ramblas Barcelona 119 123

Citadines Ramblas Barcelona Citadines Ramblas Barcelona


OPERATIONS REVIEW

UNITED KINGDOM 4 Properties 600 Units




Ascott Reit owns four freehold serviced residences in London under the Citadines brand. The 192-unit Citadines Prestige Holborn-Covent Garden London is located close to the financial district and West End, the 187-unit Citadines Prestige Trafalgar Square London is located near the River Thames, Trafalgar Square and Buckingham Palace, the 129-unit Citadines Barbican London is located in the Square Mile, and the 92-unit Citadines Prestige South Kensington London is located near embassies and popular tourist attractions in the fashionable residential area of Kensington.

The average length of stay in our London properties is less than one month.

Citadines Prestige Trafalgar Square London


2012 Review

The UK GDP growth was flat in 2012, due to the on-going Eurozone crisis. Due to the Diamond Jubilee celebrations in June and Olympics from July to August, most corporate travellers avoided travelling to London for business or meetings during these periods for fear of traffic congestions.

Nonetheless, ADR in our UK properties was considerably higher during the Olympics and consequently, RevPAU for the London properties was S$212, an increase of 9% as compared to 2011.

In 2012, Ascott Reit completed the renovation programme at Citadines Prestige Trafalgar Square London. Post-renovation, occupancy levels improved, while rental rates increased by as much as 50%.

2013 Outlook Based on EIU projections, the UK economy is expected to remain stable in 2013 with a forecasted GDP growth of 0.5% and inflation falling to 1.9%. On-going challenges surrounding the Eurozone debt crisis continues to weigh down on businesses. However, customer spending is likely to strengthen in 2013, helped by a slight decline in unemployment.

We expect the hospitality market to remain stable in 2013. Corporate and leisure travellers are expected to return to the capital as a business and leisure destination. This could help drive visitor numbers in 2013 and beyond.


Citadines Barbican London 7,947 8,081

Citadines Prestige South Kensington London 8,061 8,520

Citadines Prestige Trafalgar Square London 15,371 10,759

Citadines Prestige Holborn-Covent Garden London 16,564 16,565


Citadines Barbican London 165 169

Citadines Prestige South Kensington London 226 240

Citadines Prestige Trafalgar Square London 225 158

Citadines Prestige Holborn-Covent Garden London 225 225

Citadines Prestige South Kensington London Citadines Prestige Trafalgar Square London


OPERATIONS REVIEW

VIETNAM 5 Properties 818 Units




Ascott Reit owns five leasehold properties in Hanoi and Ho Chi Minh City in Vietnam. The 185-unit Somerset Grand Hanoi is located in the central business district. The 90-unit Somerset West Lake Hanoi is located in scenic West Lake, a 10-minute drive from the business district and the 206-unit Somerset Hoa Binh Hanoi is strategically located next to the business and financial districts as well as the flourishing Hoa Lac high technology development zone. The 172-unit Somerset Chancellor Court Ho Chi Minh City and the 165-unit Somerset Ho Chi Minh City are both strategically located in Ho Chi Minh’s District 1, a prime commercial, diplomatic and shopping district.

The average length of stay in our Vietnam properties is more than seven months.

Somerset Grand Hanoi


2012 Review

The Vietnamese economy stabilised further in 2012 with a relatively steady Dong and a more moderate inflation rate of 7.7%. GDP growth was 4.9% during the year in review. Japan and Korea remained the largest foreign investors in Vietnam, even though the level of newly licensed FDI has reduced to 75% of previous years’ investment with the majority focussed on the manufacturing and real estate sectors.

Demand for serviced apartment accommodation has been flat due to tighter corporate housing budgets and stiffer competition from “buy to let” units and units converted from condominium or office developments. The office rental market has also been affected with Grade A office market rents declining Y-o-Y by 19% in Hanoi and 11% in Ho Chi Minh City.

Following the completion of renovation works for Somerset Grand Hanoi’s apartment units in end 2011, RevPAU increased by 8% to S$109 in 2012. In July 2012, the completion of the renovation of its lobby improved overall guest arrival experience.

2013 Outlook

According to EIU, the GDP growth forecast for 2013 is 5.4%, supported by effective implementation of pro -economic government policies. Inflation is also expected to ease amidst a modest increase in global commodity prices. Vietnam continues to be attractive as an investment destination due to its political stability,

population demography and rich natural resources. Recent government announcements show the country’s determination in reviving the economy, including its real estate and financial sectors, which have been stagnant.

The inflow of foreign investment into Vietnam, coupled with the stable economic fundamentals is expected to drive the demand for serviced accommodation in Hanoi, Ho Chi Minh City, Danang and Hai Phong. Demand from the leisure sector is likely to strengthen, as the Vietnamese government further develops the tourism sector through marketing campaigns and increases tourism expenditure.


Somerset Grand Hanoi 13,446 13,008

Somerset West Lake Hanoi 2,750 2,607

Somerset Hoa Binh Hanoi 6,778 7,020

Somerset Chancellor Court Ho Chi Minh City 8,295 8,879

Somerset Ho Chi Minh City 6,057 6,464


Somerset Grand Hanoi 109 101

Somerset West Lake Hanoi 83 78

Somerset Hoa Binh Hanoi 80 83

Somerset Chancellor Court Ho Chi Minh City 105 113

Somerset Ho Chi Minh City 99 107


Operating Performance

REVENUE

Ascott Reit’s revenue for the financial year ended 31 December 2012 (“FY 2012”) of S$303.8 million comprised S$43.1 million (14% of total revenue) from serviced residences on Master Leases, S$70.5 million (23%) from serviced residences on management contracts with minimum guaranteed income and S$190.2 million (63%) from serviced residences on management contracts.

Revenue for FY 2012 increased by S$15.1 million or 5% as compared to the previous financial year ended 31 December 2011 (“FY 2011”). The increase in revenue was mainly due to the additional revenue of S$18.8 million from the newly acquired properties of Citadines Karasuma-Gojo Kyoto, Ascott Raffles Place Singapore, Ascott Guangzhou and Madison Hamburg (the “Acquisitions”), partially offset by the decrease in revenue of S$8.3 million from the divestment of Somerset Gordon Heights Melbourne and Somerset Grand Cairnhill Singapore (the “Divestments”). On a same store basis and excluding the business interruption claim of S$1.6 million in FY 2011, revenue increased by S$6.2 million due to stronger performance from the Group’s serviced residences in United Kingdom, China and The Philippines, partially offset by lower contribution from the serviced residences in France, Belgium and Spain due to depreciation of EUR against SGD.

Ascott Reit’s portfolio achieved higher occupancy of 80% in FY 2012, compared to 79% in the previous year. Revenue Per Available Unit (RevPAU) increased by S$2, or 1%, from S$143 in FY 2011 to S$145 in FY 2012.

GROSS PROFIT

Ascott Reit’s gross profit for FY 2012 of S$159.1 million comprised S$39.7 million (25% of total gross profit) from serviced residences on Master Leases, S$30.1 million (19%) from serviced residences on management contracts with minimum guaranteed income and S$89.3 million (56%) from serviced residences on management contracts.

In line with the increase in revenue, gross profit for FY 2012 increased by S$1.6 million or 1% as compared to FY 2011.

FY 2012 FY 2011

RevenueS$’M

Gross ProfitS$’M

RevenueS$’M

Gross ProfitS$’M

France 36.1 33.3 38.0 34.9

Germany 4.2 4.1 3.8 3.7

Philippines 0.5 0.4 0.9 0.8

Singapore 2.3 1.9 – –

Master leases 43.1 39.7 42.7 39.4

Belgium 10.7 2.6 11.3 2.8

Spain 6.8 3.2 7.1 3.4

United Kingdom 49.0 21.9 44.5 21.9

Vietnam 4.0 2.4 3.7 2.3

Management contracts with minimum guaranteed income 70.5 30.1 66.6 30.4

FINANCIAL REVIEW


FY 2012 FY 2011

RevenueS$’M

Gross ProfitS$’M

RevenueS$’M

Gross ProfitS$’M

Australia 7.5 3.2 9.0 3.3

China 23.2 8.7 18.6 6.6

Indonesia 15.4 5.3 17.5 6.4

Japan 29.6 14.7 15.8 9.1

Philippines 31.9 12.1 29.3 12.0

Singapore 45.1 24.5 51.1 27.5

Vietnam 37.5 20.8 38.1 22.8

Management contracts 190.2 89.3 179.4 87.7

Group 303.8 159.1 288.7 157.5

Distributions

Ascott Reit achieved Unitholders’ distributions of S$99.7 million for FY 2012, S$3.5 million or 4% higher as compared to FY 2011. DPU for FY 2012 is 8.76 cents, 3% higher than FY 2011. The increase was mainly attributed to the Acquisitions and costs incurred for the following one-off events in FY 2011:

(a) Established US$2 billion Euro-Medium Term Note (“MTN”) Programme at a cost of S$0.5 million. This is in line with Ascott Reit’s strategy of securing diversified funding sources and allows Ascott Reit to target an enlarged pool of investors;

(b) Issued S$250 million MTN. Higher loan related expenses and cash holding costs of S$0.8 million were incurred due to early refinancing in 2011 of the secured borrowings due in 2012. The issuance of the MTN reduced the debt refinancing exposure in 2012, extended the average loan tenure of the Group’s debt and increased the percentage of the Group’s unencumbered assets for more financial flexibility; and

(c) Provision of S$2.1 million for licensing related matters for a serviced residence in China.

Ascott Reit continued to pay out 100% of Unitholders’ distribution, demonstrating a firm commitment to deliver stable returns to Unitholders.

Breakdown of total Unitholders’ distribution for FY 2012 is as follows:

Distribution 1 January 2012 to 30 June 2012

1 July 2012 to 31 December 2012

1 January to 31 December 2012

Distribution rate 4.517 cents per unit 4.238 cents per unit 8.755 cents per unit

Payment Date 29 August 2012 28 February 2013

Ascott Reit will continue to make distributions to Unitholders on a semi-annual basis, with the amount calculated as at 30 June and 31 December each year for the six months period ending on each of the said dates.

Assets

The value of Ascott Reit’s total assets as at 31 December 2012 was S$3,002.5 million, compared with S$3,023.0 million as at 31 December 2011. The decrease of S$20.5 million was mainly due to the Divestments and lower cash balances arising from distribution paid to Unitholders and interest payments.


FINANCIAL REVIEW

Change in Value of Serviced Residence Properties

The net change in fair value of serviced residence properties has no impact on the Unitholder’s distribution.

In accordance with the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore, valuations of Ascott Reit’s serviced residence properties are to be conducted once every year. Any increase or decrease in fair value is credited or charged to the Statement of Total Return as net appreciation or depreciation on revaluation of serviced residence properties.

As at 31 December 2012, independent full valuations for the Group’s serviced residence properties were carried out by HVS. In determining the fair value, the Discounted Cash Flow approach was adopted as the method of valuation.

The Group’s property portfolio was revalued at S$2,785.1 million, resulting in a surplus of S$100.0 million which was recognised in the Consolidated Statement of Total Return in FY 2012. The surplus was mainly due to the gain of S$87.1 million recognised from the revaluation of Somerset Grand Cairnhill based on the sale consideration of S$359.0 million and higher valuation of the Group’s serviced residences in Japan and the United Kingdom, partially offset by lower valuation from the Group’s serviced residences, mainly in France. The net impact on the Consolidated Statement of Total Return was S$91.5 million (net of tax and non-controlling interests).

Funding and Borrowings

As at 31 December 2012, Ascott Reit’s outstanding borrowings was S$1,170.8 million (2011: S$1,204.6 million), with an interest rate averaging 3.3% per annum for FY 2012 (2011: 3.2%). The gearing of the Group as at 31 December 2012 was 40.1% (2011: 40.8%), well within the 60.0% gearing limit allowed by the Monetary Authority of Singapore for property trusts in Singapore with a credit rating. Ascott Reit has been assigned a Baa3 corporate family investment grade rating by Moody’s Investors Service.

Maturity S$'M %

2013 167.8 142014 317.0 272015 348.9 302016 212.3 182017 & after 124.8 11

TOTAL 1,170.81 100

Maturity S$'M %

2012 261.3 222013 126.9 102014 252.7 212015 225.1 192016 & after 338.6 28

TOTAL 1,204.61 100

Debt Maturity Profile

2012 2011

1. Net of unamortized fees and expenses incurred for debt raising exercises.


Out of the Group’s total borrowings, 14% falls due in 2013, 27% falls due in 2014, 30% falls due in 2015, and the balance falls due after 2015.

Fixed Rate Loans

This has taken into account the interest rate swaps entered into to convert floating rate loans to fixed rate loans. As at 31 December 2012, S$717.71 million or 61% of the Group’s borrowings are on fixed interest rates, including S$64.31 million due for refinancing in 2013, in line with the maturity dates of the underlying loans.

Floating Rate Loans

This has taken into account the interest rate caps entered into to manage the Group’s interest rate exposure.

Cash Flow

As at 31 December 2012, Ascott Reit’s cash and cash equivalents was S$125.2 million, a decrease of S$20.3 million over last year. The major cash flow movements are as follows:

S$’M

Proceeds from divestment of serviced residence properties 374.3

Cash generated from operations 145.8

Acquisitions of serviced residence properties / plant and equipment (350.4)

Distributions to Unitholders (97.2)

Payment of interest and income tax (64.2)

Capital expenditure on serviced residence properties (11.1)

Expenses incurred for divestment of serviced residence properties (7.7)

Net repayment of borrowings (3.2)

S$'M %

Fixed Rate 717.7 61

Floating Rate 453.1 39

TOTAL 1,170.81 100

S$'M %

Fixed Rate 770.0 64

Floating Rate 434.6 36

TOTAL 1,204.61 100

61%

39%

64%

36%

Fixed vs Floating Rate Profile

2012 2011

1. Net of unamortized fees and expenses incurred for debt raising exercises.


EuropeBelgium

Citadines Sainte-Catherine Brussels

51 Quai au Bois à Bruler, 1000 Brussels, Belgium

Tel : (32) 2 221 14 11 Fax : (32) 2 221 15 99 Email : [email protected]

Citadines Toison d’Or Brussels

61–63 Avenue de la Toison d’Or, 1060 Brussels, Belgium

Tel : (32) 2 543 53 53 Fax : (32) 2 543 53 00 Email : [email protected]

France

Citadines Austerlitz Paris 27 rue Esquirol, 75013 Paris, France

Tel : (33) 1 56 61 54 00 Fax : (33) 1 45 86 59 76 Email : [email protected]

Citadines Suites Louvre Paris

8 rue de Richelieu, 75001 Paris, France


Citadines Montmartre Paris

16 avenue Rachel, 75018 Paris, France


Citadines Montparnasse Paris

67 avenue du Maine, 75014 Paris, France


Citadines Place d’Italie Paris

18 place d’Italie, 75013 Paris, France


Citadines Porte de Versailles Paris

94 rue Didot, 75014 Paris, France


Citadines Prestige Les Halles Paris

4 rue des Innocents, 75001 Paris, France


Citadines République Paris 75 bis, avenue Parmentier, 75011 Paris, France


Citadines Tour Eiffel Paris 132 boulevard de Grenelle, 75015 Paris, France


Citadines Trocadéro Paris 29 bis, rue Saint-Didier, 75116 Paris, France


Citadines Croisette Cannes 1 rue le Poussin, 06400 Cannes, France


Citadines City Centre Grenoble

9–11 rue de Strasbourg, 38000 Grenoble, France


DIRECTORY LISTING


EuropeFrance

Citadines City Centre Lille Avenue Willy Brandt - Euralille, 59777 Lille, France


Citadines Presqu’île Lyon 2 rue Thomassin, 69002 Lyon, France


Citadines Castellane Marseille

60 rue du Rouet, 13006 Marseille, France


Citadines Prado Chanot Marseille

9–11 boulevard de Louvain, 13008 Marseille, France


Citadines Antigone Montpellier

588 boulevard d’Antigone, 34000 Montpellier, France


Germany

Citadines Arnulfpark Munich

Arnulfstrasse 51, 80636 München, Germany

Tel : (49) 89 94008 00 Fax : (49) 89 94008 777 Email : [email protected]

Citadines Kurfürstendamm Berlin

Olivaer Platz 1, 10707 Berlin-Wilmersdorf, Germany

Tel : (49) 3088 7760 Fax : (49) 3088 7761 199 Email : [email protected]

Madison Hamburg Schaarsteinweg 4, 20459 Hamburg, Germany


Spain

Citadines Ramblas Barcelona

Ramblas 122, 08002 Barcelona, Spain

Tel : (34) 932 701 111Fax : (34) 934 127 421 Email : [email protected]

United Kingdom

Citadines Barbican London 7–21 Goswell Road, London EC1M 7AH, United Kingdom


Citadines Prestige Holborn-Covent Garden London

94–99 High Holborn, London WC1V 6LF, United Kingdom


Citadines Prestige South Kensington London

25–35A Gloucester Road, London SW7 4PL, United Kingdom


Citadines Prestige Trafalgar Square London

18–21 Northumberland Avenue, London WC2N 5EA, United Kingdom



DIRECTORY LISTING

North Asia China

Ascott Guangzhou 73 Tianhedong Road, Tianhe District, Guangzhou 510630, China

Tel : (8620) 8513 0388 Fax : (8620) 8513 0366 Email : [email protected]

Somerset Grand Fortune Garden Property Beijing

46 Liangmaqiao Road, Chaoyang District, Beijing 100125, China


Somerset Olympic Tower Property Tianjin

126 Chengdu Dao, Heping District, Tianjin 300051, China


Somerset Xu Hui Shanghai

888 Shaanxi Nan Road, Xu Hui District, Shanghai 200031, China


Japan

Citadines Karasuma-Gojo Kyoto

432 Matsuya-cho Gojo-dori Karasuma-Higashiiru, Shimogoyo-ku, Kyoto 600-8105, Japan


Citadines Shinjuku Tokyo 1–28–13 Shinjuku, Shinjuku-ku, Tokyo 160-0022, Japan

Tel : (813) 5379 7208Fax : (813) 5379 7209Email : [email protected]

Somerset Azabu East Tokyo 1–9–11 Higashi Azabu, Minato-ku, Tokyo 106-0044, Japan


Asyl Court Nakano Sakaue Tokyo

1–14–12 Honcho, Nakano-ku, Tokyo, Japan


Gala Hachimanyama I Tokyo

2–1–18 Kamitakaido, Suginami-ku, Tokyo, Japan


Gala Hachimanyama II Tokyo

2–1–2 Kamitakaido, Suginami-ku, Tokyo, Japan


Joy City Koishikawa Shokubutsuen Tokyo

3–35–18 Otsuka, Bunkyo-ku, Tokyo, Japan


Joy City Kuramae Tokyo 2–24–1 Kuramae, Taito-ku, Tokyo, Japan


Roppongi Residences Tokyo 3–4–31 Roppongi, Minato-ku, Tokyo 106-0032, Japan



North Asia Japan

Zesty Akebonobashi Tokyo 1–17 Tomihisacho, Shinjuku-ku, Tokyo, Japan


Zesty Gotokuji Tokyo 6–42–5 Matsubara, Setagaya-ku, Tokyo, Japan


Zesty Higashi Shinjuku Tokyo 6–15–20 Shinjuku, Shinjuku-ku, Tokyo, Japan


Zesty Kagurazaka I Tokyo

2–13 Nishigokencho, Shinjuku-ku, Tokyo, Japan


Zesty Kagurazaka II Tokyo

123–3 Yaraicho, Shinjuku-ku, Tokyo, Japan


Zesty Kasugacho Tokyo 6–4–15 Kasugacho, Nerima-ku, Tokyo, Japan


Zesty Koishikawa Tokyo 5–41–7 Koishikawa, Bunkyo-ku, Tokyo, Japan


Zesty Komazawa Daigaku II Tokyo

2–12–21 Higashigaoka, Meguro-ku, Tokyo, Japan


Zesty Nishi Shinjuku III Tokyo

3–18–15 Nishishinjuku, Shinjuku-ku, Tokyo, Japan


Zesty Sakura Shinmachi Tokyo

3–11–3 Tsurumaki, Setagaya-ku, Tokyo, Japan


Zesty Shin Ekoda Tokyo 1–2–2 Toyotamakami, Nerima-ku, Tokyo, Japan


Zesty Shoin Jinja Tokyo 4–3–3 Setagaya, Setagaya-ku, Tokyo, Japan


Zesty Shoin Jinja II Tokyo 4–5–4 Setagaya, Setagaya-ku, Tokyo, Japan



DIRECTORY LISTING

Asia PacificAustralia

Somerset St Georges Terrace Perth

185 St Georges Terrace, Perth WA 6000, Australia


Indonesia

Ascott Jakarta 2 Jalan Kebon Kacang Raya, Jakarta 10230, Indonesia


Somerset Grand Citra Jakarta Jalan Prof Dr Satrio Kav. 1, Jakarta 12940, Indonesia


Philippines

Ascott Makati Glorietta 4, Ayala Centre, Makati City 1224, Philippines


Somerset Millennium Makati

104 Aguirre Street, Legaspi Village, Makati City 1229, Philippines


Salcedo Residences(formerly known as Somerset Salcedo

Property Makati)

HV Dela Costa Corner LP Leviste Street, Salcedo Village, Makati City 1227, Philippines


Singapore


2 Finlayson Green, Singapore 049247


Citadines Mount Sophia Property Singapore

8 Wilkie Road, #01–26 Wilkie Edge, Singapore 228095


Somerset Liang Court Property Singapore

177B River Valley Road, Singapore 179032


Vietnam

Somerset Grand Hanoi 49 Hai Ba Trung Street, Hanoi, Vietnam


Somerset Hoa Binh Hanoi 106 Hoang Quoc Viet Street, Hanoi, Vietnam


Somerset West Lake Hanoi 254D Thuy Khue Road, Hanoi, Vietnam


Somerset Chancellor Court Ho Chih Minh City

21–23 Nguyen Thi Minh Khai Street, District 1, Ho Chi Minh City, Vietnam


Somerset Ho Chi Minh City 8A Nguyen Binh Khiem Street, District 1, Ho Chi Minh City, Vietnam



Financial statementsReport of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Statement by the Manager . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Independent Auditors’ Report to the

Unitholders of Ascott Residence Trust . . . . . . . . . . . . 100

Statements of Financial Position . . . . . . . . . . . . . . . . . . . 101

Statements of Total Return. . . . . . . . . . . . . . . . . . . . . . . . . 102

Distribution Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Statements of Movements in

Unitholders’ Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Portfolio Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Consolidated Statement of Cash Flows . . . . . . . . . . . . 124

Notes to the Financial Statements . . . . . . . . . . . . . . . . . 126

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

Notice of Annual General Meeting . . . . . . . . . . . . . . . . . 194

Proxy Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

Corporate Information

RepoRT of The TRUsTee

DBS Trustee Limited (the “Trustee”) is under a duty to take into custody and hold the assets of Ascott Residence Trust (“Trust”) held by it or through its subsidiaries in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). In accordance with the Securities and Futures Act, Chapter 289 of Singapore, its subsidiary legislation and the Code on Collective Investment Schemes and the Listing Manual (collectively referred to as the “laws and regulations”), the Trustee shall monitor the activities of Ascott Residence Trust Management Limited (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set out in the trust deed dated 19 January 2006, as amended by the First Supplemental Deed dated 22 March 2007, Second Supplemental Deed dated 9 September 2009 and Third Supplemental Deed dated 16 September 2010 (collectively referred to as the “Trust Deed”) between the Manager and the Trustee in each annual accounting period and report thereon to Unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust and its subsidiaries (the “Group”) during the year covered by these financial statements, set out on pages 101 to 190 in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed.

For and on behalf of the Trustee,DBs Trustee Limited

Jane Lim puay YuenDirector

singapore26 February 2013

98 FRoM STReNGTh To STReNGThAscott Reit Annual Report 2012

sTATemenT BY The mAnAgeR

In the opinion of the directors of Ascott Residence Trust Management Limited, the accompanying financial statements set out on pages 101 to 190 comprising the Statements of Financial Position, Statements of Total Return, Distribution Statements, Statements of Movements in Unitholders’ Funds and Portfolio Statements of the Group and of the Trust, the Consolidated Statement of Cash Flows of the Group and Notes to the Financial Statements are drawn up so as to present fairly, in all material respects, the financial position of the Group and of the Trust as at 31 December 2012, and the total return, distributable income and movements in Unitholders’ funds of the Group and of the Trust and cash flows of the Group for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certified Public Accountants of Singapore and the provisions of the Trust Deed. At the date of this statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet their financial obligations as and when they materialise.

For and on behalf of the Manager,Ascott Residence Trust management Limited

Lim Jit pohChairman

singapore26 February 2013

99FRoM STReNGTh To STReNGTh Ascott Reit Annual Report 2012

Independent audItors’ report to tHeunItHolders of ascott resIdence trust(constituted under a trust deed in the republic of singapore)

We have audited the accompanying financial statements of Ascott Residence Trust (the “Trust”) and its subsidiaries (collectively, the “Group”), which comprise the Statements of Financial Position and Portfolio Statements of the Group and the Trust as at 31 December 2012, and the Statements of Total Return, Distribution Statements and Statements of Movements in Unitholders’ Funds of the Group and the Trust and the Consolidated Statement of Cash Flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 101 to 190.

Manager’s responsIbIlIty for tHe fInancIal stateMentsThe Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of the Certified Public Accountants of Singapore, and for such internal control as the Manager of the Trust determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

audItors’ responsIbIlItyOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trust’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opInIonIn our opinion, the consolidated financial statements of the Group and the Statement of Financial Position, Statement of Total Return, Distribution Statement, Statement of Movements in Unitholders’ Funds and Portfolio Statement of the Trust present fairly, in all material respects, the financial position of the Group and the Trust as at 31 December 2012 and the total return, distributable income and movements in Unitholders’ funds of the Group and of the Trust and cash flows of the Group for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certified Public Accountants of Singapore.

KpMg llppublic accountants andcertified public accountants

Singapore26 February 2013

100 FROM STRenGTh TO STRenGThAscott Reit Annual Report 2012

12_0636 Ascott Financials v13.indd 100 14/3/13 10:53 PM

sTATemenTs of fInAnCIAL posITIonAs at 31 December 2012

The accompanying notes form an integral part of these financial statements.

group Trust2012 2011 2012 2011

Note $’000 $’000 $’000 $’000

Non-current assetsServiced residence properties 4 2,785,147 2,786,143 551,222 602,732Plant and equipment 5 50,327 62,110 10,078 10,468Subsidiaries 6 – − 166,583 121,086Associate 7 2,932 3,114 3,417 3,623Financial derivative assets 8 4 108 – −Deferred tax assets 9 2,583 2,088 – −

2,840,993 2,853,563 731,300 737,909

Current assetsInventories 476 432 – −Trade and other receivables 10 35,858 23,560 1,492,076 1,410,289Financial derivative assets 8 – 6 – −Cash and cash equivalents 11 125,181 145,466 9,927 26,420

161,515 169,464 1,502,003 1,436,709

Total assets 3,002,508 3,023,027 2,233,303 2,174,618

Non-current liabilitiesFinancial liabilities 12 1,003,056 943,268 349,650 353,985Financial derivative liabilities 8 18,757 17,066 13,691 9,867Deferred tax liabilities 9 47,329 44,789 – −

1,069,142 1,005,123 363,341 363,852

Current liabilitiesTrade and other payables 13 110,727 117,237 335,022 389,533Financial liabilities 12 167,765 261,346 136,924 7,348Financial derivative liabilities 8 645 1,412 48 −Provision for taxation 13,259 9,879 180 157

292,396 389,874 472,174 397,038

Total liabilities 1,361,538 1,394,997 835,515 760,890

Net assets 1,640,970 1,628,030 1,397,788 1,413,728

Represented by:Unitholders’ funds 14 1,547,373 1,537,012 1,397,788 1,413,728Non-controlling interests 93,597 91,018 – −

1,640,970 1,628,030 1,397,788 1,413,728


sTATemenTs of ToTAL ReTURnYear ended 31 December 2012


group Trust2012 2011 2012 2011

Note $’000 $’000 $’000 $’000

Gross revenue 16 303,841 288,653 48,536 52,096Direct expenses 17 (144,694) (131,171) (20,999) (23,576)Gross profit 159,147 157,482 27,537 28,520

Finance income 18 2,038 1,558 75 41Dividend income – − 37,228 20,177other income 2,112 563 12,344 3,964Audit fees (1,757) (1,541) (196) (185)Finance costs 18 (42,343) (39,510) (24,636) (15,330)Manager’s management fees 19 (14,129) (13,741) (14,129) (13,741)Professional fees (1,912) (2,388) (322) (689)Trustee’s fees (311) (298) (311) (298)Foreign exchange gain/(loss) 3,827 (1,543) (40,361) (1,768)other operating expenses (1,149) (2,617) (2,737) (314)Net income/(loss) before share of results of associate 105,523 97,965 (5,508) 20,377Share of results of associate (net of tax) 24 (22) – −Net income/(loss) 20 105,547 97,943 (5,508) 20,377Net change in fair value of serviced

residence properties 100,030 130,177 86,806 60,043Net change in fair value of financial derivatives 4,677 (5) – −Net divestment expenses 21 (9,683) − (10,207) −Assets written off (621) (3,115) – −Total return for the year before income tax 199,950 225,000 71,091 80,420Income tax expense 22 (27,367) (31,222) (185) (166)Total return for the year 172,583 193,778 70,906 80,254

Total return attributable to:Unitholders of the Trust 162,354 180,277 70,906 80,254Non-controlling interests 10,229 13,501 – −

172,583 193,778 70,906 80,254

Earnings per unit (cents) 23Basic 14.30 16.06 6.25 7.15

Diluted 14.30 16.06 6.25 7.15



group Trust2012 2011 2012 2011

Note $’000 $’000 $’000 $’000

Amount available for distribution to Unitholders at beginning of the year 45,942 25,176 45,942 25,176

Total return for the year attributable to Unitholders 162,354 180,277 70,906 80,254Distribution adjustments A (62,656) (84,111) 28,792 15,912Income for the year available for

distribution to Unitholders B 99,698 96,166 99,698 96,166Amount available for distribution to Unitholders 145,640 121,342 145,640 121,342

Distributions to Unitholders during the year– Distribution of 2.27 cents per unit for the period

from 22 September 2010 to 31 December 2010 − 25,148 − 25,148

– Distribution of 4.47 cents per unit for the period from 1 January 2011 to 30 June 2011 − 50,252 − 50,252

– Distribution of 4.06 cents per unit for the periodfrom 1 July 2011 to 31 December 2011 45,907 − 45,907 −

– Distribution of 4.52 cents per unit for the periodfrom 1 January 2012 to 30 June 2012 51,258 − 51,258 −

97,165 75,400 97,165 75,400Amount available for distribution to

Unitholders at end of the year 48,475 45,942 48,475 45,942

DIsTRIBUTIon sTATemenTsYear ended 31 December 2012


noTe A – DIsTRIBUTIon ADJUsTmenTs

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Distribution adjustment items:− Net change in fair value of serviced residence properties (100,030) (130,177) (86,806) (60,043)− Net change in fair value of financial derivatives 6 5 – −− Net divestment expenses 9,683 − 10,207 −− Assets written off 621 3,115 − −− Depreciation 10,799 9,105 2,309 2,270− Manager’s fees paid in units 10,734 10,308 10,734 10,308− Trustee’s fees 60 64 60 64− Unrealised exchange (gain)/loss (1,807) 2,371 41,389 3,646− Tax expense 4,498 14,719 – –− Non-controlling interests’ share of adjustments 3,729 6,806 – –− other adjustments (949) (427) (811) 165− Impairment losses on non-trade amounts due from

subsidiaries reversed – – (8,597) –− Impairment of subsidiaries – – 2,379 –− Net overseas income* not distributed to the Trust – – 57,928 59,502Net effect of distribution adjustments (62,656) (84,111) 28,792 15,912

noTe B – InCome foR The YeAR AvAILABLe foR DIsTRIBUTIon To UnIThoLDeRs

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Comprises:− from operations 37,237 31,935 37,237 31,935− from Unitholders’ contributions 62,461 64,231 62,461 64,231Income for the year available

for distribution to Unitholders 99,698 96,166 99,698 96,166

* Net overseas income as defined in Summary of Significant Accounting Policies (Note 3.14).


DIsTRIBUTIon sTATemenTsYear ended 31 December 2012


group Trust2012 2011 2012 2011

Note $’000 $’000 $’000 $’000

OperationsAt 1 January 341,173 186,839 194,981 140,592Change in Unitholders’ funds resulting

from operations 162,354 180,277 70,906 80,254Distributions to Unitholders (40,052) (25,865) (40,052) (25,865)Transfer to capital reserve (116) (78) – −At 31 December 463,359 341,173 225,835 194,981

Unitholders’ contributionsAt 1 January 1,228,759 1,252,694 1,228,759 1,252,694Creation of Units:− Manager’s fees paid in Units 10,563 10,209 10,563 10,209− Acquisition fees paid in Units 3,020 14,055 3,020 14,055− Divestment fee paid in Units 1,795 1,389 1,795 1,389Distributions to Unitholders (57,113) (49,535) (57,113) (49,535)Issue expenses 24 − (53) − (53)At 31 December 1,187,024 1,228,759 1,187,024 1,228,759

Foreign currency translation reserveAt 1 January (28,269) (24,955) − −Movement for the year (62,151) (3,314) − −At 31 December (90,420) (28,269) − −

Capital reserveAt 1 January 1,637 1,559 – –Transfer from operations 116 78 – –At 31 December 1,753 1,637 – –

Hedging reserveAt 1 January (6,288) 1,330 (10,012) (50)effective portion of change in fair values

of cash flow hedges (3,372) (7,618) (5,059) (9,962)Net change in fair value of cash flow hedges

reclassified to total return (4,683) – – –At 31 December (14,343) (6,288) (15,071) (10,012)

Unitholders’ funds at 31 December 1,547,373 1,537,012 1,397,788 1,413,728

Units in issue (’000) 15 1,142,819 1,129,871 1,142,819 1,129,871

Net asset value per Unit attributable to Unitholders ($) 1.35 1.36 1.22 1.25


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groupNo secondary segment has been presented as the Group invests predominantly in serviced residence properties and rental housing properties.

on 31 December 2012, Somerset Liang Court Property, Citadines Mount Sophia Property, Ascott Raffles Place, Somerset St Georges Terrace, Somerset olympic Tower Property, Ascott Guangzhou, Somerset Azabu east, Roppongi Residences, Citadines Shinjuku, Citadines Karasuma-Gojo Kyoto, Zenith Residences, Somerset Grand hanoi, Somerset Chancellor Court, Somerset ho Chi Minh City, Citadines City Centre Lille, Citadines City Centre Grenoble, Citadines Louvre Paris, Citadines Trocadéro Paris, Citadines Montmartre Paris, Citadines Prestige South Kensington London, Citadines Toison d’or Brussels, Citadines Arnulfpark Munich and Citadines Ramblas Barcelona, were pledged as securities to banks for banking facilities granted to certain subsidiaries (Note 12).

on 31 December 2011, Somerset Grand Cairnhill, Somerset Liang Court Property, Citadines Mount Sophia Property, Somerset St Georges Terrace, Somerset olympic Tower Property, Somerset Azabu east, Roppongi Residences, Citadines Shinjuku, Zenith Residences, Somerset Grand hanoi, Somerset Chancellor Court, Somerset ho Chi Minh City, Citadines City Centre Lille, Citadines City Centre Grenoble, Citadines Louvre Paris, Citadines Trocadéro Paris, Citadines Presqu’île Lyon, Citadines Place d’ltalie Paris, Citadines Montmartre Paris, Citadines Tour eiffel Paris, Citadines Prestige Les halles Paris, Citadines Barbican London, Citadines Prestige Trafalgar Square London, Citadines Prestige South Kensington London, Citadines Prestige holborn-Covent Garden London, Citadines Sainte-Catherine Brussels, Citadines Toison d’or Brussels, Citadines Arnulfpark Munich, and Citadines Ramblas Barcelona, were pledged as securities to banks for banking facilities granted to certain subsidiaries (Note 12).



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on 31 December 2012, the Manager engaged professional valuers, hVS (2011: hVS, Savills Advisory Services Limited and Savills Japan Co., Ltd) to carry out valuations of the Group’s serviced residence properties and rental housing properties.

The Manager believes that the independent valuers have appropriate professional qualifications and recent experience in the location and category of the properties being valued. The valuations include plant and equipment located in the serviced residence properties and rental housing properties. The valuations adopted in the portfolio table above were adjusted for values ascribed to plant and equipment.



groupNote 2012 2011

$’000 $’000

Cash flows from operating activitiesTotal return for the year before income tax 199,950 225,000Adjustments for:Depreciation of plant and equipment 10,799 9,105Finance costs 42,343 39,510Finance income (2,038) (1,558)Foreign exchange (gain)/loss – unrealised (1,807) 2,371Gain on disposal of plant and equipment (400) (179)Manager’s management fees paid/payable in units 10,734 10,308Net change in fair value of financial derivatives (4,677) 5Net change in fair value of serviced residence properties (100,030) (130,177)Net divestment expenses 9,683 −Assets written off 621 3,115Impairment loss on trade and other receivables 4 10Share of (profit)/loss of associate (24) 22operating income before working capital changes 165,158 157,532Changes in working capital:Inventories (44) (75)Trade and other payables (7,034) (21,450)Trade and other receivables (12,298) 9,917Cash generated from operations 145,782 145,924Income tax paid (20,605) (13,928)Net cash from operating activities 125,177 131,996

Cash flows from investing activitiesAcquisition of serviced residence properties, net of cash movements 30 (342,673) (5,943)Capital expenditure on serviced residence properties (11,140) (8,775)expenses incurred for divestment of serviced residence properties (7,729) −Interest received 2,038 1,558Proceeds from divestment of serviced residence properties 374,335 −Proceeds from sale of plant and equipment 722 215Purchase of plant and equipment (7,728) (15,794)Net cash from/(used in) investing activities 7,825 (28,739)

Balance carried forward 133,002 103,257


ConsoLIDATeD sTATemenT of CAsh fLowsYear ended 31 December 2012


group2012 2011$’000 $’000

Balance brought forward 133,002 103,257

Cash flows from financing activitiesDistributions to Unitholders (97,165) (75,400)Dividends paid to non-controlling interests (2,893) (1,273)Interest paid (43,555) (40,071)Payment of finance lease (3,267) (3,385)Payment of issue expenses – (1,223)Proceeds from borrowings 283,034 591,059Proceeds from issue of medium term notes – 250,000Repayment of borrowings (232,957) (810,688)Repayment of medium term notes (50,000) −Net cash used in financing activities (146,803) (90,981)

Net (decrease)/increase in cash and cash equivalents (13,801) 12,276Cash and cash equivalents at 1 January 145,466 132,711Effect of foreign exchange rate changes on cash balances (6,484) 479Cash and cash equivalents at 31 December 125,181 145,466

sIgnIfICAnT non-CAsh TRAnsACTIonsThere were the following significant non-cash transactions:

(i) on 3 February 2012, 4 May 2012, 7 August 2012 and 31 october 2012, the Trust issued 2,631,595, 2,278,129, 2,238,127 and 2,084,099 Units at an issue price of $0.9900 per Unit, $1.1143 per Unit, $1.2127 per Unit and $1.2978 per Unit respectively as payment of the Manager’s fees for the period from 1 october 2011 to 30 September 2012.

(ii) on 11 December 2012, 2,330,360 Units and 1,384,924 Units were issued to the Manager at an issue price of $1.2961 per Unit as payment of acquisition fee in relation to the completion of two serviced residence properties and divestment fee in relation to the divestment of Somerset Grand Cairnhill Singapore, respectively.

(iii) on 11 February 2011, 6 May 2011, 2 August 2011 and 1 November 2011, the Trust issued 2,130,699, 2,029,969, 2,160,661 and 2,490,971 Units at an issue price of $1.1993 per Unit, $1.1912 per Unit, $1.2114 per Unit and $1.0510 per Unit respectively as payment of the Manager’s fees for the period from 1 october 2010 to 30 September 2011.

(iv) on 30 March 2011, 12,018,471 Units and 1,188,015 Units were issued to the Manager at an issue price of $1.1694 per Unit as payment of acquisition fee in relation to the completion of the acquisition of 28 serviced residence properties comprising one in Singapore, one in Vietnam, 17 in France, four in the United Kingdom, two in Belgium, two in Germany and one in Spain, and divestment fee in relation to the completion of the divestment of the Trust’s entire interest in Ascott Beijing, respectively.



noTes To The fInAnCIAL sTATemenTs

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Manager and the Trustee on 26 February 2013.

1 geneRALAscott Residence Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to the trust deed dated 19 January 2006, as amended by the First Supplemental Deed dated 22 March 2007, Second Supplemental Deed dated 9 September 2009 and Third Supplemental Deed dated 16 September 2010 (collectively referred to as the “Trust Deed”) between Ascott Residence Trust Management Limited (the “Manager”) and DBS Trustee Limited (the “Trustee”). The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee is under a duty to take into custody and hold the assets of the Trust held by it or through its subsidiaries (collectively, the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”).

The Trust was formally admitted to the official List of the Singapore exchange Securities Trading Limited (“SGX-ST”) on 31 March 2006 and was included under the Central Provident Fund (“CPF”) Investment Scheme on 31 March 2006.

The principal activities of the Trust and its subsidiaries are those relating to investment in real estate and real estate related assets which are income-producing and which are used or predominantly used, as serviced residences, rental housing properties and other hospitality assets in any country in the world.

The Group has entered into several service agreements in relation to management of the Trust and its property operations. The fee structures for these services are as follows:

(i) Trustee’s fees Pursuant to the Trust Deed, the Trustee’s fee is charged based on a scaled basis of up to 0.1% per annum of the value of the assets of the Group (“Deposited Property”), subject to a minimum of $10,000 per month, excluding out-of-pocket expenses and GST which is borne by the Trust. The Trustee is also entitled to reimbursement of expenses incurred in the performance of its duties under the Trust Deed. The Trustee’s fees are payable monthly in arrears.

(ii) manager’s fees management fees

The Manager is entitled under the Trust Deed to the following management fees:

(a) a base fee of 0.3% per annum of the property values; and

(b) an annual performance fee of:

• baseperformancefeeof4.0%perannumoftheGroup’sshareofgrossprofitforeachfinancial year; and

• intheeventthattheGroup’sshareofgrossprofitincreasesbymorethan6.0%annually,anoutperformance fee of 1.0% of the difference between the Group’s share of that financial year’s gross profit and 106% of the Group’s share of the preceding year’s gross profit.

Ascott Reit Annual Report 2012Ascott Reit Annual Report 2012126 FRoM STReNGTh To STReNGTh

1 geneRAL (Cont’d) (ii) manager’s fees (cont’d) management fees (cont’d)

The management fees payable in cash and in the form of Units shall be payable quarterly in arrears. When management fees are payable in Units, the issue prices will be determined based on the volume weighted average traded price per unit for all trades done on SGX-ST in the ordinary course of trading for 5 business days immediately preceding the respective date of issue of the new units, or where the Manager believes such market price is not a fair reflection of the market price of a Unit, such amount as determined by the Trustee at its discretion (after consultation with a stockbroker appointed by the Trustee) upon request by the Manager to review the market price of a Unit, as being the fair market price of a Unit.

Acquisition fee The Manager is entitled to receive the following acquisition fees:

(a) an acquisition fee of 1.0% of the enterprise Value of any real estate or real estate related asset acquired directly or indirectly by the Trust, prorated if applicable to the proportion of the Trust’s interest; and

(b) in the event that there is payment to third party agents or brokers in connection with the acquisition, such payment shall be paid out of the Deposited Property, provided that the Manager shall charge an acquisition fee of 0.5% instead of 1.0%.

Where assets acquired by the Trust are shares in a company whose primary purpose is to hold/own real estate (directly or indirectly), enterprise Value shall mean the sum of the equity value and the total debt attributable to the shares being acquired by the Trust and where the asset acquired by the Trust is a property, enterprise Value shall mean the value of the property.

The Manager may opt to receive such acquisition fee in the form of cash or Units or a combination of cash and Units as it may determine.

In the event that the Manager receives an acquisition fee in connection with a transaction with a related party, any such acquisition fee shall be paid in the form of Units to be issued by the Trust at the market price.

Divestment fee The Manager is entitled to receive a divestment fee of 0.5% of the enterprise Value of any real estate

or real estate related asset disposed directly or indirectly by the Trust, prorated if applicable to the proportion of the Trust’s interest.

The divestment fee is payable to the Manager in the form of cash. In the event that the Manager receives a divestment fee in connection with a transaction with a related party, any such divestment fee shall be paid in the form of Units to be issued by the Trust at the market price.

Ascott Reit Annual Report 2012Ascott Reit Annual Report 2012 127FRoM STReNGTh To STReNGTh


1 geneRAL (Cont’d) (iii) fees under serviced residence management agreements

The serviced residence management fee for each property is agreed between the Group and the relevant serviced residence management company as follows:

(a) each property (with the exception of properties located in Belgium, Spain and United Kingdom) is charged:

• basicmanagementfeesofbetween2.0%and3.0%perannumofthetotalrevenueofeach property; and

• incentivemanagement fees up to 10.0%per annumof gross operatingprofit of eachproperty; and

(b) each property located in Belgium, Spain and United Kingdom is charged:

• basicmanagement feesof3.0%and6.0%perannumof the total revenueandofnetoperating profit (“NoP”), respectively of each property; and

• incentivemanagementfeesof50%ofanyexcessNOPachievedabovetheNOPhurdleofeach property.

2 BAsIs of pRepARATIon 2.1 statement of compliance

The financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice (“RAP”) 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certified Public Accountants of Singapore, and the applicable requirements of the Code on Collective Investment Schemes (the “CIS Code”) issued by the Monetary Authority of Singapore (“MAS”) and the provisions of the Trust Deed. RAP 7 requires that accounting policies adopted should generally comply with the principles relating to recognition and measurement of the Singapore Financial Reporting Standards (“FRS”).

2.2 Basis of measurementThe financial statements have been prepared on the historical cost basis, except for serviced residence properties and certain financial assets and liabilities which are stated at fair value.

2.3 functional and presentation currencyThe financial statements are presented in Singapore dollars, which is the Trust’s functional currency. All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”).


2 BAsIs of pRepARATIon (Cont’d) 2.4 Use of estimates and judgements

The preparation of financial statements in conformity with RAP 7 requires the Manager to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following note:

• Note9–Utilisationoftaxlosses

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

• Note4–Valuationofservicedresidenceproperties

• Note29–Valuationoffinancialinstruments

2.5 Changes in accounting policyDuring the year, the Group applied the amendments to FRS 12 Income Tax- Deferred Tax: Recovery of Underlying Assets, which became effective as of 1 January 2012. The amendments apply to the measurement of deferred tax liabilities and assets arising from investment properties measured using the fair value model under FRS 40 Investment Property. For the purposes of measuring deferred tax, the amendments introduce a rebuttable presumption that the carrying amount of such investment property will be recovered entirely through sale. The adoption of amendments to FRS 12 does not have any significant impact on the financial position or performance of the Group.

3 sIgnIfICAnT ACCoUnTIng poLICIesThe accounting policies set out below have been applied consistently by the Group to all periods presented in these financial statements and have been applied consistently by the entities in the Group, except as explained in Note 2.5, which addresses changes in accounting policies.

3.1 Basis of consolidation (i) subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to non-controlling interests in a subsidiary are allocated to non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.



3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.1 Basis of consolidation (cont’d) (i) subsidiaries (cont’d)

The Group’s acquisition of subsidiaries are primarily accounted for as acquisitions of assets as the subsidiaries are special purpose vehicles established for the sole purpose of holding assets.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the statement of total return. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(ii) AssociatesAssociates are those entities in which the Group has significant influence, but not control, over their financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Associates are accounted for using the equity method and are recognised initially at cost.

The consolidated financial statements include the Group’s share of the income, expenses and equity movements of associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investments) is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

(iii) Acquisition of non-controlling interestsAcquisition of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustment to non-controlling interests arising from transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.

(iv) Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(v) Accounting for subsidiaries and associate by the TrustInvestments in subsidiaries and associate are stated in the Trust’s statement of financial position at cost less accumulated impairment losses.


3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.2 foreign currency (i) foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognised in the statement of total return, except for differences arising on the retranslation of financial liabilities designated as a hedge of the net investment in a foreign operation (see 3.2 (ii)) or qualifying cash flow hedges, which are recognised in Unitholders’ funds.

(ii) foreign operationsThe assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the dates of the transactions. Fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Foreign currency differences are recognised in Unitholders’ funds. however, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve is transferred to total return as part of the profit or loss on disposal.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in Unitholders’ funds, and are presented in the foreign currency translation reserve.

(iii) hedge of a net investment in foreign operationForeign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in Unitholders’ funds to the extent that the hedge is effective, and are presented within equity in the foreign currency translation reserve. To the extent that the hedge is ineffective, such differences are recognised in the statement of total return. When the hedged net investment is disposed of, the relevant amount in the foreign currency translation reserve is transferred to the statement of total return as part of the profit or loss on disposal.



3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.3 serviced residence properties

Serviced residence properties comprise serviced residences, rental housing properties and other hospitality assets. Serviced residence properties are accounted for as non-current assets and are stated at initial cost on acquisition and at fair value thereafter. The cost of a purchased property comprises its purchase price and any directly attributable expenditure. Transaction costs shall be included in the initial measurement. Fair value is determined in accordance with the Trust Deed, which requires the serviced residence properties to be valued by independent registered valuers in the following events:

• atleastonceineachperiodof12monthsfollowingtheacquisitionofeachparcelofrealestateproperty; and

• foracquisitionanddisposalofrealestatepropertyasrequiredbytheCISCodeissuedbyMAS.

Acquisition of serviced residence properties are accounted for by the Group and Trust as acquisition of assets.

Any increase or decrease on revaluation is credited or charged to the statement of total return as a net change in fair value of the serviced residence properties.

When a serviced residence property is disposed of, the resulting gain or loss recognised in the statement of total return is the difference between net disposal proceeds and the carrying amount of the property.

Serviced residence properties are not depreciated. The properties are subject to continual maintenance and regularly revalued on the basis set out above.

3.4 plant and equipment Recognition and measurement

Plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components) of plant and equipment.

Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of plant and equipment, and are recognised net within other income/other expenses in total return.

subsequent costsThe cost of replacing a component of an item of plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of plant and equipment are recognised in total return as incurred.


3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.4 plant and equipment (cont’d) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is recognised in the statement of total return on a straight-line basis over the estimated useful lives of each component of an item of plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives for the current and comparative periods are as follows:

Renovation – 8 to 12 yearsMotor vehicles – 5 yearsoffice equipment, computers and furniture – 3 to 8 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

3.5 financial instruments non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through total return) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: loans and receivables, and cash and cash equivalents.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Cash and cash equivalentsCash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the cash flow statement.



3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.5 financial instruments (cont’d) non-derivative financial liabilities

The Group initially recognises all other financial liabilities (including liabilities designated at fair value through the statement of total return) on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

The Group has the following non-derivative financial liabilities: loans and borrowings and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Derivative financial instruments, including hedge accountingThe Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through total return.

on initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80%-125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported total return.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the statement of total return as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

Cash flow hedgesWhen a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect total return, the effective portion of changes in the fair value of the derivative is recognised in the hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the statement of total return.


3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.5 financial instruments (cont’d) Derivative financial instruments, including hedge accounting (cont’d) Cash flow hedges (cont’d)

When the hedged item is a non-financial asset, the amount recognised in the hedging reserve is transferred to the carrying amount of the asset when the asset is recognised. In other cases, the amount recognised in the hedging reserve is transferred to total return in the same period that the hedged item affects total return. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance in the hedging reserve is recognised immediately in the statement of total return.

Fair value hedgesChanges in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the statement of total return. The hedged item also is stated at fair value in respect of the risk being hedged; the gain or loss attributable to the hedged risk is recognised in the statement of total return and the carrying amount of the hedged item is adjusted.

Other non-trading derivativesWhen a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognised immediately in total return.

Intra-group financial guaranteesFinancial guarantees are financial instruments issued by the Group that requires the issuer to make specified payments to reimburse the holder for the loss it incurs because a specified debtor fails to meet payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantees are recognised initially at fair value and are classified as financial liabilities. Subsequent to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantees is transferred to the statement of total return.

Unitholders’ fundsUnitholders’ funds represent the Unitholders’ residual interest in the Group’s net assets upon termination and is classified as equity.

Incremental costs directly attributable to the issue of units are recognised as a deduction from Unitholders’ funds.

3.6 Impairment non-derivative financial assets

A financial asset not carried at fair value through total return is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.



3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.6 Impairment (cont’d) non-derivative financial assets (cont’d)

objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for the Manager’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in the statement of total return and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the statement of total return.

non-financial assetsThe carrying amounts of the Group’s non-financial assets, other than serviced residence properties, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit, or CGU”).

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of total return.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.


3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.7 Inventories

Inventories comprise principally food and beverage and other serviced residence and rental property related consumable stocks. Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis.

3.8 employee benefits Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in the statement of total return in the periods during which services are rendered by employees.

short-term benefitsShort-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

3.9 provisionsA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

3.10 Leases when entities within the group are lessees of a finance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Lease payments are apportioned between finance expense and reduction of lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability.

when entities within the group are lessees of an operating leaseWhere the Group has the use of assets under operating leases, payments made under the leases are recognised in the statement of total return on a straight-line basis over the term of the lease. Lease incentives received are recognised in the statement of total return as an integral part of the total lease payments made. Contingent rentals are charged to the statement of total return in the accounting period in which they are incurred.

when entities within the group are lessors of an operating leaseAssets subject to operating leases are included in serviced residence properties (see Note 3.3).

3.11 Revenue recognition Rental income from operating leases

Rental income receivable under operating leases is recognised on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as an integral part of the total rental to be received.



3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.11 Revenue recognition (cont’d) hospitality income

hospitality income from serviced residence operations is recognised on an accrual basis, upon rendering of the relevant services. hospitality income includes fees from usage of the business centres and laundry facilities, recoveries from guests for utilities including telephone charges, income earned from the sales of food and beverages, recoveries of shortfall of net operating profit or earnings before net interest expenses, tax, depreciation and amortisation, service and maintenance fees, recoveries of property taxes and maintenance costs from tenants and fees for managing public areas as well as other miscellaneous income.

Car park incomeFor car parks which are leased to an external operator, car park income is recognised on a straight-line basis over the term of the lease.

For other car parks, car park income is recognised on an accrual basis.

Interest incomeInterest income is recognised as it accrues, using the effective interest method.

Dividend incomeDividend income is recognised in the statement of total return on the date that the Group’s or the Trust’s right to receive payment is established.

3.12 expenses Direct expenses

Direct expenses consist of serviced residence management fees, property taxes, staff costs and other property outgoings in relation to serviced residence properties where such expenses are the responsibility of the Group.

Trustee’s feesThe Trustee’s fees are recognised on an accrual basis using the applicable formula, stipulated in Note 1(i).

manager’s management feesManager’s management fees are recognised on an accrual basis using the applicable formula, stipulated in Note 1(ii).

serviced residence management feesThe serviced residence management fees are recognised on an accrual basis using the applicable formula, stipulated in Note 1(iii).

3.13 finance costsFinance costs comprise interest expense on loans and borrowings and amortisation of loans and borrowings related costs. Finance costs are recognised in the statement of total return using the effective interest method.


3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.14 Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in the statement of total return except to the extent that it relates to a business combination, or items recognised directly in Unitholders’ funds.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognised for:

• temporarydifferencesontheinitialrecognitionofassetsorliabilitiesinatransactionthatisnotabusiness combination and that affects neither accounting nor taxable profit;

• temporarydifferencesrelatedtoinvestmentsinsubsidiariestotheextentthattheGroupisabletocontrol the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future; and

• taxabletemporarydifferencesarisingontheinitialrecognitionofgoodwill.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Inland Revenue Authority of Singapore (the “IRAS”) has issued a tax ruling on the income tax treatment of the Trust. Subject to compliance with the terms and conditions of the tax ruling, the Trustee is not subject to tax on the taxable income of the Trust. Instead, the distributions made by the Trust out of such taxable income are distributed free of tax deducted at source to individual Unitholders and qualifying Unitholders. Qualifying Unitholders are companies incorporated and tax resident in Singapore, Singapore branches of foreign companies that have obtained waiver from the IRAS from tax deducted at source in respect of the distributions from the Trust, and bodies of persons registered or constituted in Singapore. This treatment is known as the tax transparency treatment.



3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.14 Income tax (cont’d)

The Trustee will deduct tax at the reduced rate of 10% from distributions made out of the Trust’s taxable income, that is not taxed at the Trust’s level to beneficial Unitholders who are qualifying foreign non-individual investors. A qualifying foreign non-individual investor is one who is not a resident of Singapore for income tax purposes, and does not have a permanent establishment in Singapore. Where the non-individual investor carries on any operation in Singapore through a permanent establishment in Singapore, the funds used by that person to acquire the Units cannot be obtained from that operation to qualify for the reduced tax rate.

For other types of Unitholders, the Trustee is required to withhold tax at the prevailing corporate tax rate on the distributions made by the Trust. Such Unitholders are subject to tax on the regrossed amounts of the distributions received but may claim a credit for the tax deducted at source by the Trustee.

Distribution policyThe Trust will distribute at least 90% of its taxable income, other than gains from the sale of real estate properties that are determined by the IRAS to be trading gains, and net overseas income.

Net overseas income refers to the net profits (excluding any gains from the sale of property or shares, as the case may be) after applicable taxes and adjustment for non-cash items such as depreciation, derived by the Trust from its properties located outside Singapore.

Distributions are made on a semi-annual basis, with the amount calculated as at 30 June and 31 December each year for the six-month period ending on each of the said dates. In accordance with the provisions of the Trust Deed, the Manager is required to pay distributions declared within 60 days of the end of each distribution period. Distributions, when paid, will be in Singapore dollars.

3.15 earnings per unitThe Group presents basic and diluted earnings per unit (ePU) data for its units. Basic ePU is calculated by dividing the total return attributable to Unitholders of the Group by the weighted average number of units outstanding during the period. Diluted ePU is determined by adjusting the total return attributable to Unitholders and the weighted average number of units outstanding for the effects of all dilutive potential units.

3.16 segment reportingAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Manager’s Chief executive officer to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise finance costs, trust expenses and income tax expense.

Segment capital expenditure is the total costs incurred on serviced residence properties and plant and equipment during the year.


3 sIgnIfICAnT ACCoUnTIng poLICIes (Cont’d) 3.17 new standards and interpretations not adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2012, and have not been applied in preparing these financial statements. None of these are expected to have a significant impact on the financial statements of the Group.

4 seRvICeD ResIDenCe pRopeRTIesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

At 1 January 2,786,143 2,577,620 602,732 542,681Acquisition of subsidiaries and serviced residence

properties (Note 30) 391,667 64,920 215,853 −Capital expenditure 14,160 8,775 2,276 8Divestment of serviced residence properties (370,518) − (356,445) −Net change in fair value of serviced residence

properties 100,030 130,177 86,806 60,043Assets written off (621) (3,115) − −Transfer from plant and equipment (Note 5) 11,362 − − −Translation difference (147,076) 7,766 − −At 31 December 2,785,147 2,786,143 551,222 602,732

Net change in fair value of serviced residence properties of the Group and Trust included a surplus of $87,466,000 recognised on the revaluation of Somerset Grand Cairnhill Singapore, based on its sale consideration of $359.0 million (Note 21).

Certain serviced residence properties of the Group with an aggregate carrying value of $1,635,821,000 (2011: $2,242,991,000) were pledged as securities to banks for banking facilities granted to certain subsidiaries (Note 12).

At 31 December 2012, the carrying value of leased serviced residence properties of the Group was $108,707,000 (2011: $121,029,000). The Group held interest in these seven serviced residence properties in France under finance lease arrangements. Under each of these finance lease arrangement, the Group may acquire legal title to the relevant property by exercising its option to purchase the property (a) prior to the expiry of the finance lease by, among others, providing six months’ notice to the finance company and making prepayment for the outstanding rentals due to the finance company, or (b) at the expiry of the finance lease by making a nominal payment of $1 to the finance company. Upon the exercise of the option by serving the six months’ notice, the legal title will, in accordance with the finance lease arrangements, be delivered to the Group. These leased serviced residence properties were acquired in 2010 for $112,967,000.

The serviced residence properties of the Trust with an aggregate carrying value of $551,222,000 (2011: $602,732,000) were pledged as securities to banks for banking facilities granted to the Trust (Note 12).

on 31 December 2012, the Manager engaged professional valuers, hVS (2011: hVS, Savills Advisory Services Limited and Savills Japan Co., Ltd), to carry out valuations of the serviced residence properties and rental housing properties.



4 seRvICeD ResIDenCe pRopeRTIes (Cont’d)The Manager believes that the independent valuers have appropriate professional qualifications and recent experience in the location and category of the properties being valued.

In determining the fair value, hVS used the discounted cash flow approach which involve certain estimates. The Manager has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of the current market conditions. The key assumptions used to determine the fair value of investment properties include market-corroborated capitalisation yields, terminal yields and discount rates.

5 pLAnT AnD eqUIpmenT

RenovationMotor

vehicles

Office equipment, computers

and furniture

Assets under

construction Total$’000 $’000 $’000 $’000 $’000

GroupCostAt 1 January 2011 9,981 611 47,553 − 58,145Acquisition of subsidiaries (Note 30) − − 10,743 − 10,743Additions 128 98 15,568 − 15,794Disposals − (283) (550) − (833)Translation difference 132 (16) (97) − 19At 31 December 2011 10,241 410 73,217 – 83,868

At 1 January 2012 10,241 410 73,217 – 83,868Acquisition of subsidiaries and serviced

residence properties (Note 30) – – 7,180 – 7,180Divestment of serviced

residence properties – – (6,360) – (6,360)Additions 351 61 7,114 202 7,728Disposals (163) (57) (3,505) – (3,725)Written off – – (5,497) – (5,497)Transfer to serviced residence properties

(Note 4) (872) – (10,490) – (11,362)Translation difference (607) (98) (2,814) – (3,519)At 31 December 2012 8,950 316 58,845 202 68,313


5 pLAnT AnD eqUIpmenT (Cont’d)

RenovationMotor

vehicles

Office equipment, computers

and furniture

Assets under

construction Total$’000 $’000 $’000 $’000 $’000

GroupAccumulated DepreciationAt 1 January 2011 3,878 296 9,019 − 13,193Charge for the year 849 158 8,098 − 9,105Disposals − (275) (522) − (797)Translation difference 91 (5) 171 − 257At 31 December 2011 4,818 174 16,766 − 21,758

At 1 January 2012 4,818 174 16,766 − 21,758Charge for the year 977 129 9,693 – 10,799Divestment of serviced residence properties – – (3,653) (3,653)Disposals (163) (52) (3,188) – (3,403)Written off – – (5,497) – (5,497)Translation difference (353) (85) (1,580) – (2,018)At 31 December 2012 5,279 166 12,541 – 17,986

Carrying amountAt 1 January 2011 6,103 315 38,534 – 44,952At 31 December 2011 5,423 236 56,451 − 62,110At 31 December 2012 3,671 150 46,304 202 50,327

Officeequipment,computers

and furniture Total$’000 $’000

TrustCostAt 1 January 2011 16,007 16,007Additions 439 439Disposals (68) (68)At 31 December 2011 16,378 16,378

At 1 January 2012 16,378 16,378Acquisition of serviced residence property 4,147 4,147Divestment of serviced residence property (5,393) (5,393)Additions 239 239Disposals (371) (371)At 31 December 2012 15,000 15,000



5 pLAnT AnD eqUIpmenT (Cont’d)Office

equipment,computers

and furniture Total$’000 $’000

TrustAccumulated depreciationAt 1 January 2011 3,688 3,688Charge for the year 2,270 2,270Disposals (48) (48)At 31 December 2011 5,910 5,910

At 1 January 2012 5,910 5,910Charge for the year 2,309 2,309Divestment of serviced residence property (2,959) (2,959)Disposals (338) (338)At 31 December 2012 4,922 4,922

Carrying amountAt 1 January 2011 12,319 12,319At 31 December 2011 10,468 10,468At 31 December 2012 10,078 10,078

6 sUBsIDIARIesTrust

2012 2011$’000 $’000

Unquoted equity shares, at cost 168,962 121,086Allowance for impairment loss (2,379) –

166,583 121,086


6 sUBsIDIARIes (Cont’d)Details of the subsidiaries are as follows:

Name of subsidiariesCountry of

incorporation

Effective equityinterest heldby the Group

2012 2011% %

Direct subsidiariesAscott ReIT (europe) Pte. Ltd. Singapore 100 100Ascott Manila Pte. Ltd. Singapore 100 100Ascott ReIT MTN Pte. Ltd. Singapore 100 100Ascott ReIT MTN (euro) Pte. Ltd. (3) Singapore 100 100Ascott Residence (Australia) holdings Pte. Ltd. Singapore 100 100Ascott Residences Pte Ltd Singapore 100 100Burton engineering Pte Ltd Singapore 100 100Citadines Kyoto Investment Pte. Ltd. (1) Singapore 100 –Citadines Shinjuku Tokyo (S) Pte. Ltd. (3) Singapore 100 100Citadines Shinjuku Tokyo Investments (S) Pte. Ltd. (3) Singapore 100 100east Australia Trading Company (S) Pte Ltd Singapore 100 100Glenwood Properties Pte Ltd Singapore 100 100Javana Pte Ltd Singapore 100 100Somerset Azabu east (S) Pte. Ltd. Singapore 100 100Somerset Azabu east Investment (S) Pte. Ltd. Singapore 100 100Somerset FG Pte. Ltd. Singapore 100 100Somerset Gordon heights (S) Pte. Ltd. Singapore 100 100Somerset Grand Citra (S) Pte. Ltd. Singapore 100 100Somerset hoa Binh (S) Pte. Ltd. Singapore 100 100Somerset Philippines (S) Pte. Ltd. Singapore 100 100Somerset Roppongi (Japan) Pte. Ltd. Singapore 100 100Somerset Roppongi (S) Pte. Ltd. Singapore 100 100The Ascott (Vietnam) Investments Pte Ltd Singapore 100 100Zenith Residences Tokyo (S) Pte. Ltd. Singapore 100 100Zenith Residences Tokyo Investment (S) Pte. Ltd. Singapore 100 100hong Kong Yong Zheng Group Company Limited (2), (a) hong Kong 100 –Smooth Runner Company Limited (a) hong Kong 100 100



6 sUBsIDIARIes (Cont’d)


incorporation


2012 2011% %

Indirect subsidiaries

Subsidiaries of Ascott REIT (Europe) Pte. Ltd.The Ascott (europe) NV (b) Netherlands 100 100Ascott ReIT (Jersey) Limited (b) Jersey 100 100

Subsidiary of Ascott REIT (Jersey) LimitedCitadines holborn Cl Limited (a) Jersey 100 100

Subsidiaries of The Ascott (Europe) NV (direct or indirect)FBM Belgique SPRL (a) Belgium 100 100Immobilière Toisor SA (a) Belgium 100 100eurorésidence 1 SARL (b) France 100 100oriville SAS (a) France 100 100Place de Metz-Grenoble SAS (a) France 100 100Reo Saint-Didier SARL (a) France 100 100Résidence des Deux Gares SAS (a) France 100 100oriville Investments SARL (b) France 100 100SCI Montpellier Antigone (a) France 100 100S.C.I. Austerlitz (a) France 100 100S.C.I. Cannes Carnot (a) France 100 100S.C.I. Citadines Paris Louvre (a) France 100 100S.C.I. Marseille (a) France 100 100S.C.I. Montparnasse (a) France 100 100S.C.I. République (a) France 100 100S.C.I. SoDI (a) France 100 100S.N.C. 14bis/16/18 Avenue Rachel – 75018 Paris (a) France 100 100Société Civile Immobilière Résidence Grenelle (a) France 100 100Société Civile Immobilière Résidence Italie (a) France 100 100Société Civile Immobilière Résidence Lyon (a) France 100 100Citadines Munich Arnulfpark Gmbh & Co. KG (a) Germany 99 99Citadines Munich Arnulfpark Verwaltungsgesellschaft mbh (a) Germany 100 100Citador olivaer Platz Gmbh & Co. KG (a) Germany 100 100Citador Verwaltungsgesellschaft mbh (b) Germany 100 100Citadines Arnulfpark Munich (Netherlands) BV (b) Netherlands 100 100Ascott Baumwall (hamburg) BV (1), (b) Netherlands 100 –eurimeg espana, S.A. (a) Spain 100 100Citagrep Limited (a) United Kingdom 100 100FBM London Limited (a) United Kingdom 100 100




incorporation


2012 2011% %


Subsidiary of Ascott Manila Pte. Ltd.Ascott Makati, Inc (a) Philippines 100 100

Subsidiaries of Ascott Residence (Australia) Holdings Pte. Ltd.Somerset St Georges Terrace (Perth) Pte Ltd Singapore 100 100Somerset St Georges Terrace (Perth) Pty Ltd (as trustee of Somerset

St Georges Terrace (Perth) Unit Trust) (a)

Australia 100 100

Somerset St Georges Terrace (Perth) Unit Trust (a) Australia 100 100

Subsidiaries of Ascott Residences Pte LtdPT Indonesia America housing (a) Indonesia 100 100Mekong-hacota Joint Venture Company Ltd (a) Vietnam 69 69

Subsidiary of Burton Engineering Pte Ltdhanoi Tower Center Company Ltd (a) Vietnam 76 76

Subsidiary of Citadines Kyoto Investment Pte. Ltd. (1)

Citadines Kyoto Investment Godo Kaisha (1), (a) Japan 100 –Citadines Kyoto Gojo Tokutei Mokuteki Kaisha (2), (a) Japan 60 –

Subsidiary of Citadines Shinjuku Tokyo Investments (S) Pte. Ltd. (3)

Citadines Shinjuku Tokyo Investments Godo Kaisha (3), (a) Japan 100 100

Subsidiary of Citadines Shinjuku Tokyo Investments Godo Kaisha (3)

Citadines Shinjuku Tokutei Mokuteki Kaisha (4), (a) Japan 60 60

Subsidiary of East Australia Trading Company (S) Pte LtdSaigon office and Serviced Apartment Co. Limited (a) Vietnam 67 67

Subsidiary of Glenwood Properties Pte LtdShanghai Xin Wei Property Development Co., Ltd (a) China 100 100

Subsidiary of Javana Pte LtdPT Bumi Perkasa Andhika (a) Indonesia 99 99





incorporation


2012 2011% %


Subsidiary of Somerset Azabu East (S) Pte. Ltd.Somerset Azabu east Tokutei Mokuteki Kaisha (a) Japan 100 100

Subsidiaries of Somerset Gordon Heights (S) Pte. Ltd.Somerset Gordon heights (Melbourne) Pty Ltd (as trustee of Somerset

Gordon heights (Melbourne) Unit Trust) (a)

Australia 100 100

Somerset Gordon heights (Melbourne) Unit Trust (a) Australia 100 100

Subsidiary of Somerset Grand Citra (S) Pte. Ltd.PT Ciputra Liang Court (a) Indonesia 57 57

Subsidiary of Somerset Hoa Binh (S) Pte. Ltd.Somerset hoa Binh Joint Venture Company Limited (a) Vietnam 90 90

Subsidiaries of Somerset Philippines (S) Pte. Ltd.Ascott hospitality holdings Philippines, Inc (a) Philippines 100 100SN Resources, Inc (a) Philippines 97 97SQ Resources, Inc (a) Philippines 63 63

Subsidiary of Somerset Roppongi (Japan) Pte. Ltd.Somerset Roppongi Tokutei Mokuteki Kaisha (a) Japan 100 100

Subsidiary of The Ascott (Vietnam) Investments Pte LtdWest Lake Development Company Limited (a) Vietnam 70 70

Subsidiary of Zenith Residences Tokyo (S) Pte. Ltd.Zenith Residences Tokyo Tokutei Mokuteki Kaisha (a) Japan 100 100

Subsidiary of Hong Kong Yong Zheng Group Company Limited (2)

Guangzhou hai Yi Property Development Company (a) China 100 –




incorporation


2012 2011% %


Subsidiary of Smooth Runner Company LimitedTianjin Consco Property Development Co., Ltd (a) China 100 100

All subsidiaries are audited by KPMG LLP Singapore except for the following:

(a) Audited by other member firms of KPMG International

(b) Audit not required in the country of incorporation

(1) on 21 February 2012, Citadines Kyoto Investment Pte. Ltd. (formerly known as Ascott Reit 2 Pte. Ltd.) was incorporated in Singapore to hold a newly acquired subsidiary.

on 8 March 2012, Citadines Kyoto Investment Godo Kaisha was incorporated in Japan to hold a newly acquired subsidiary.

on 12 September 2012, Ascott Baumwall (hamburg) BV was incorporated in The Netherlands for the acquisition of Madison hamburg.

(2) on 29 March 2012, the Group completed the acquisition of a 60% interest in Citadines Kyoto Gojo Tokutei Mokuteki Kaisha.

on 28 September 2012, the Group completed the acquisition of the entire share capital of hong Kong Yong Zheng Group Company Limited, which has a 100% interest in Guangzhou hai Yi Property Development Company (Note 30), from The Ascott holdings Limited and Tianhe east Investments (BVI) Limited, both related corporations of the Manager.

(3) on 13 September 2011, Citadines Shinjuku Tokyo (S) Pte. Ltd. (formerly known as Zillion Stars Pte. Ltd.) and Citadines Shinjuku Tokyo Investments (S) Pte. Ltd. (formerly known as Zillion Starlight Investments Pte. Ltd.) were incorporated in Singapore to hold newly acquired subsidiaries.

on 9 November 2011, Ascott ReIT MTN (euro) Pte. Ltd. (formerly known as Ascott ReIT 1 Pte. Ltd.) was incorporated in Singapore for the establishment of US$2,000,000,000 euro-Medium Term Note Programme.

on 25 November 2011, Citadines Shinjuku Tokyo Investments Godo Kaisha (formerly known as Zillion Starlight Investments Godo Kaisha) was incorporated in Japan to hold a newly acquired subsidiary.

(4) on 21 December 2011, the Group completed the acquisition of a 60% interest in Citadines Shinjuku Tokutei Mokuteki Kaisha.



7 AssoCIATegroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Interest in an associate 2,932 3,114 3,417 3,623

Details of the associate are as follows:

Company name Principal activity

Place of incorporationand business

Effective percentage held by the Group2012 2011

% %

Associate of Ascott Residence Trusteast Australia Trading Company (hK) Limited Investment holding hong Kong 40 40

A member firm of KPMG International is the auditor of the associate.

In 2012 and 2011, the Group did not receive dividends from the associate.

The summarised financial information relating to the associate, not adjusted for the percentage ownership held by the Group, is as follows:

2012 2011$’000 $’000

Total assets 12,030 12,695Total liabilities (13,713) (14,532)Revenue – −Profit/(Loss) after taxation 60 (56)


8 fInAnCIAL DeRIvATIvesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Financial derivative assets

Non-currentInterest rate caps 4 108 – −

CurrentInterest rate cap – 6 – −

Financial derivative liabilities

Non-currentInterest rate swaps (18,757) (17,066) (13,691) (9,867)

CurrentInterest rate swaps (645) (1,412) (48) −


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9 deferred tax (Cont’d)Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax liabilities and when the deferred taxes relate to the same tax authority. The amounts determined after appropriate offsetting are included in the statement of financial position as follows:

group trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Deferred tax assets 2,583 2,088 – –Deferred tax liabilities (47,329) (44,789) – –

Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom:

group trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Tax losses 25,647 21,552 – –Deductible temporary differences 2,022 1,364 – –

Tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries operate. The deductible temporary differences do not expire under the current tax legislation.

Unrecognised tax losses brought forward of the Group amounting to $7,153,000 (2011: $nil) expired during the year. In addition, $6,605,000 (2011: $577,000) of the losses brought forward was utilised to set off against current year’s taxable profit. The remaining balance of $7,794,000 (2011: $14,651,000), unrecognised tax losses arising during the year of $8,484,000 (2011: $6,901,000) and unrecognised tax losses of $9,369,000 (2011: $nil) arising from acquisition of subsidiaries have been carried forward and are subject to expiration as follows:

group trust2012 2011 2012 2011$’000 $’000 $’000 $’000

expiry dates– Within 1 to 5 years 11,536 3,384 – –– After 5 years 14,111 18,168 – –

25,647 21,552 – –

Ascott Reit Annual Report 2012Ascott Reit Annual Report 2012 153FROM STRenGTh TO STRenGTh

12_0636 Ascott Financials v13.indd 153 14/3/13 10:53 PM


10 TRADe AnD oTheR ReCeIvABLesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Trade receivables 12,034 12,732 1,527 2,178Impairment loss (94) (68) (4) −

11,940 12,664 1,523 2,178

Non-trade amounts due from subsidiaries – – 1,524,825 1,451,060Impairment loss – – (35,126) (43,723)

– – 1,489,699 1,407,337

Amounts due from related parties – trade 11,308 1,139 58 –– non-trade 1,490 2,027 521 555Deposits 1,096 1,329 44 45other receivables 8,732 5,192 157 107Loans and receivables 34,566 22,351 1,492,002 1,410,222Prepayments 1,292 1,209 74 67

35,858 23,560 1,492,076 1,410,289

Concentration of credit risk relating to trade receivables is limited due to the Group’s varied tenants. These tenants are from a wide range of nationalities and engaged in a wide spectrum of business activities. The Group’s historical experience in the collection of accounts receivables falls within the recorded allowances. Due to these factors, the Manager believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Group’s trade receivables.

20 serviced residence properties are leased to three master lessees, related corporations of the Manager, under master lease arrangements. The contribution to trade and other receivables from these master lessees as at 31 December 2012 is $10,108,000 (2011: $Nil), which was received after the reporting date.

Non-trade amounts due from subsidiaries and related parties are unsecured, interest-free and repayable on demand.


10 TRADe AnD oTheR ReCeIvABLes (Cont’d) Impairment losses

The aging of loans and receivables at the reporting date is as follows:

GrossImpairment

losses GrossImpairment

losses2012 2012 2011 2011$’000 $’000 $’000 $’000

GroupNot past due 28,666 – 16,287 –Past due 0 - 30 days 2,732 – 4,212 –Past due 30 - 60 days 1,714 – 1,132 –Past due more than 60 days 1,548 94 788 68

34,660 94 22,419 68

TrustNot past due 1,491,675 – 1,409,143 –Past due 0 - 30 days 258 – 878 –Past due 30 - 60 days 45 – 119 –Past due more than 60 days 35,154 35,130 43,805 43,723

1,527,132 35,130 1,453,945 43,723

The movement in impairment losses in respect of trade receivables during the year is as follows:

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

At 1 January 68 81 − 4Impairment losses recognised 4 10 4 −Utilised during the year – (19) – (4)Translation difference 22 (4) – −At 31 December 94 68 4 −

Based on historical default rates, the Group believes that, except for those recognised, no additional impairment is necessary in respect of trade receivables not past due. These receivables relate to customers that have a good credit record with the Group.

The movement in impairment losses in respect of non-trade amounts due from subsidiaries is as follows:

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

At 1 January – – 43,723 43,723Impairment losses reversed – – (8,597) –At 31 December – – 35,126 43,723



11 CAsh AnD CAsh eqUIvALenTsgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Cash at bank and in hand 80,473 87,107 6,197 4,738Fixed deposits with financial institutions 44,708 58,359 3,730 21,682

125,181 145,466 9,927 26,420

As at 31 December 2012, the interest rates per annum for cash and cash equivalents for the Group and the Trust ranged from 0% to 8.8% (2011: 0% to 13.7%) and 0% to 0.1% (2011: 0% to 0.6%) respectively.

12 fInAnCIAL LIABILITIesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Non-current liabilitiesSecured bank loans 737,366 672,444 349,650 353,985Medium term notes 249,583 249,479 – −Finance lease liabilities 16,107 21,345 − −

1,003,056 943,268 349,650 353,985

Current liabilitiesIntra-group financial guarantees – − 5,265 7,348Secured bank loans 119,799 207,879 87,064 −Unsecured bank loans 44,595 − 44,595 −Medium term notes – 49,942 – –Finance lease liabilities 3,371 3,525 − −

167,765 261,346 136,924 7,348

1,170,821 1,204,614 486,574 361,333

finance lease liabilitiesThe Group had obligations under finance leases that are payable as follows:

31 December 2012Principal Interest Payments

$’000 $’000 $’000

Repayable:Within 1 year 3,371 269 3,640After 1 year but within 5 years 12,663 576 13,239After 5 years 3,444 23 3,467

19,478 868 20,346


12 fInAnCIAL LIABILITIes (Cont’d) finance lease liabilities (cont’d)

31 December 2011Principal Interest Payments

$’000 $’000 $’000

Repayable:Within 1 year 3,525 644 4,169After 1 year but within 5 years 14,057 1,549 15,606After 5 years 7,288 191 7,479

24,870 2,384 27,254

(a) The Group’s secured bank loans are secured on the following:

– serviced residence properties with an aggregate carrying value of $1,635,821,000 (2011: $2,242,991,000);

– pledge of shares of certain subsidiaries; – assignment of rental proceeds from the properties; – assignment of insurance policies on the properties; and– corporate guarantee from the Trust.

The Trust’s secured bank loans are secured on the following:

– serviced residence properties with an aggregate carrying value of $551,222,000 (2011: $602,732,000);

– pledge of shares of certain subsidiaries;– assignment of rental proceeds from the properties; and– assignment of insurance policies on the properties.

(b) on 9 September 2009, a subsidiary, Ascott ReIT MTN Pte. Ltd., launched a $1.0 billion Multi-currency Medium Term Note Programme (“MTN Programme”). Under this MTN Programme, Ascott ReIT MTN Pte. Ltd. may, subject to compliance with all relevant laws, regulations and directives, from time to time issue fixed or floating interest rate notes (the “Notes”) with aggregate principal amounts of $1.0 billion.

In 2009, Notes amounting to $50.0 million with fixed interest rate of 4.11% per annum and maturing on 10 october 2012 were issued. These $50.0 million Notes were redeemed during the year.

In 2011, Notes amounting to $100.0 million and $150.0 million, with fixed interest rate of 4.30% and 3.80% per annum respectively, and maturing on 30 November 2018 and 16 December 2015 respectively were issued.

on 30 November 2011, a subsidiary, Ascott ReIT MTN (euro) Pte. Ltd., established a US$2.0 billion euro-Medium Term Note Programme. Under this programme, Ascott ReIT MTN (euro) Pte. Ltd. may, subject to any applicable legal or regulatory restrictions, from time to time issue fixed or floating interest rate notes in series or tranches in euro, Sterling, United States dollar, Singapore dollar, Renminbi or, any other currency agreed between Ascott ReIT MTN (euro) Pte. Ltd. and the relevant dealer of the programme.



12 fInAnCIAL LIABILITIes (Cont’d)(c) The weighted average effective interest rates per annum relating to bank loans at the reporting date for

the Group and Trust are 2.88% (2011: 3.38%) and 2.15% (2011: 3.03%) respectively.

Included in the Group’s and the Trust’s bank loans is an amount of $4,315,000 (2011: $5,180,000) and $1,578,000 (2011: $2,453,000) respectively, relating to unamortised transaction costs. Transaction costs amortised during the year by the Group and the Trust of $2,328,000 (2011: $2,853,000) and $1,205,000 (2011: $1,044,000) respectively, were recognised as finance costs.

Terms and debt repayment scheduleTerms and conditions of outstanding loans and borrowings are as follows:

CurrencyNominal

interest rateYear of

maturityFacevalue

Carryingamount

% $’000 $’000

Group2012Medium term notes SGD 3.80 – 4.30 2015 – 2018 250,000 249,583Secured fixed rate loan USD 3.75 2016 8,541 8,459Secured floating rate loans AUD 4.50 – 4.52 2014 3,175 3,164Secured floating rate loans eUR 1.13 – 5.45 2013 – 2016 350,751 349,193Secured floating rate loans GBP 1.52 – 5.95 2013 – 2015 50,031 49,795Secured floating rate loans JPY 1.18 – 2.59 2013 – 2015 351,457 349,868Secured floating rate loan RMB 6.35 2020 18,426 18,426Secured floating rate loans USD 1.31 – 4.30 2013 – 2016 78,665 78,260Unsecured floating rate loans eUR 1.85 – 2.05 2013 26,939 26,922Unsecured floating rate loan GBP 1.68 2013 17,673 17,673Finance leases eUR 1.53 2014 – 2019 19,478 19,478

1,175,136 1,170,821

2011Medium term notes SGD 3.80 – 4.30 2012 – 2018 300,000 299,421Secured floating rate loans AUD 5.55 – 5.90 2014 3,853 3,800Secured floating rate loans eUR 2.25 – 5.45 2013 – 2016 320,636 318,878Secured floating rate loans GBP 2.23 – 6.90 2012 – 2015 96,907 96,729Secured floating rate loans JPY 0.79 – 2.20 2012 – 2014 368,804 366,846Secured floating rate loans USD 1.19 – 4.95 2012 – 2016 94,724 94,070Finance leases eUR 2.79 2014 – 2019 24,870 24,870

1,209,794 1,204,614


12 fInAnCIAL LIABILITIes (Cont’d) Terms and debt repayment schedule (cont’d)

CurrencyNominal

interest rateYear of

maturityFacevalue

Carryingamount

% $’000 $’000

Trust2012Secured floating rate loans AUD 4.50 – 4.52 2014 3,175 3,164Secured floating rate loans eUR 1.13 – 1.85 2013 – 2016 252,048 250,925Secured floating rate loans GBP 1.52 – 2.32 2013 – 2014 35,379 35,263Secured floating rate loans JPY 1.18 – 2.19 2013 – 2014 119,950 119,713Secured floating rate loans USD 1.31 – 2.07 2013 – 2014 27,723 27,649Unsecured floating rate loans eUR 1.85 – 2.05 2013 26,939 26,922Unsecured floating rate loan GBP 1.68 2013 17,673 17,673

482,887 481,309

2011Secured floating rate loans AUD 5.55 – 5.90 2014 3,853 3,800Secured floating rate loans eUR 2.25 – 2.55 2014 – 2016 208,455 207,355Secured floating rate loans JPY 1.14 – 2.20 2013 – 2014 113,879 112,897Secured floating rate loans USD 1.42 – 2.37 2013 – 2014 30,251 29,933

356,438 353,985

Intra-group financial guaranteesIntra-group financial guarantees comprise guarantees given by the Trust to banks in respect of various banking facilities amounting to $5,265,000 (2011: $7,348,000) granted to subsidiaries which expire in 2013, 2015 and 2016.

At the reporting date, the Trust does not consider it probable that a claim will be made against the Trust under the guarantees. The amounts and periods in which the financial guarantees expire are as follows:

Trust2012 2011$’000 $’000

Less than 1 year 1,984 2,726Between 1 and 5 years 3,281 4,622

5,265 7,348



13 TRADe AnD oTheR pAYABLesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Trade payables and accrued operating expenses 47,088 47,687 13,635 15,893Amounts due to:– associate (non-trade) 1,768 1,816 – −– subsidiaries (non-trade) – − 311,978 363,076– related parties – trade 5,982 4,583 2,217 2,523 – non-trade 11,806 8,418 – 1– the Manager 4,150 4,236 4,150 3,626– the Trustee 79 102 79 102– non-controlling interest (non-trade) 1,602 1,802 – −Interest payable 3,193 4,485 1,259 1,172Rental deposits and advance rental 35,059 44,108 1,704 3,140

110,727 117,237 335,022 389,533

Non-trade amounts due to associate, subsidiaries and related parties are unsecured, interest-free and repayable on demand.

14 UnIThoLDeRs’ fUnDs foreign currency translation reserve

The foreign currency translation reserve comprises:

(a) foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Trust; and

(b) the foreign exchange differences on monetary items which form part of the Group’s net investment in foreign operations, provided certain conditions are met.

Capital reserveThe subsidiaries incorporated in China are required to transfer 10% of their profits after taxation, as determined under the accounting principles and relevant financial regulations of China, to a general reserve until the reserve balance reaches 50% of the subsidiary’s registered capital. The transfer to this reserve must be made before the distribution of dividends to shareholders.

The capital reserve of the subsidiary can be used to make good previous years’ losses, if any, and may be converted to paid-in capital of the subsidiary in proportion to the existing interests of equity owners, provided that the balance after such conversion is not less than 25% of the registered capital.


14 UnIThoLDeRs’ fUnDs (Cont’d) hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments relating to forecast hedged transactions.

Capital managementThe Manager reviews the Group’s and the Trust’s capital structure regularly, which the Group defines as total Unitholders’ funds (excluding non-controlling interests) and the level of distribution to Unitholders. The Group uses a combination of debt and equity to fund acquisition and asset enhancement projects.

The objectives of the Manager are to:

a. maintain a strong balance sheet by adopting and maintaining a target gearing range;

b. secure diversified funding sources from financial institutions and/or capital markets;

c. adopt a proactive interest rate management strategy to manage risks related to interest rate fluctuations; and

d. manage the foreign currency exposure through hedging, where appropriate.

The Manager seeks to maintain a combination of debt and equity in order to balance the cost of capital and the returns to Unitholders. The Manager also monitors the externally imposed capital requirements closely and ensures the capital structure adopted comply with the requirements.

The Group is subject to the Aggregate Leverage limit as defined in the Property Funds Appendix of the CIS Code. The CIS Code stipulates that the total borrowings (the “Aggregate Leverage”) of a property fund should not exceed 35.0% of the fund’s Deposited Property. The Aggregate Leverage of a property fund may exceed 35.0% of the fund’s Deposited Property (up to a maximum of 60.0%) only if a credit rating of the property fund from Fitch Inc., Moody’s or Standard and Poor’s is obtained and disclosed to the public. The property fund should continue to maintain and disclose a credit rating so long as its Aggregate Leverage exceeds 35.0% of the fund’s Deposited Property.

The Group has a credit rating of Baa3 from Moody’s. The Aggregate Leverage of the Group as at 31 December 2012 was 40.1% (2011: 40.8%) of the Group’s Deposited Property. This complied with the Aggregate Leverage limit.

There were no changes in the Group’s approach to capital management during the year.



15 UnITs In IssUegroup and Trust2012 2011

Numberof Units

Numberof Units

’000 ’000

At 1 January 1,129,871 1,107,853Issue of new Units:– As Manager’s fees paid in Units 9,233 8,812– As Manager’s acquisition fees paid in Units 2,330 12,018– As Manager’s divestment fee paid in Units 1,385 1,188At 31 December 1,142,819 1,129,871

During the financial year ended 31 December 2012, the Trust issued Units as follows:

(a) on 3 February 2012, 4 May 2012, 7 August 2012 and 31 october 2012, the Trust issued 2,631,595, 2,278,129, 2,238,127 and 2,084,099 Units at an issue price of $0.9900 per Unit, $1.1143 per Unit, $1.2127 per Unit and $1.2978 per Unit respectively in payment of the Manager’s fee for the periods from 1 october 2011 to 31 December 2011, 1 January 2012 to 31 March 2012, 1 April 2012 to 30 June 2012 and 1 July 2012 to 30 September 2012 respectively.

(b) on 11 December 2012, the Trust issued 2,330,360 Units at an issue price of $1.2961 per Unit as payment of the acquisition fee in relation to the completion of the acquisition (directly or indirectly through the acquisition of shareholding interests) of two serviced residence properties comprising one in Singapore and one in the People’s Republic of China.

(c) on 11 December 2012, the Trust issued 1,384,924 Units at an issue price of $1.2961 per Unit as payment of the divestment fee in relation to the completion of the divestment of the Trust’s entire interest in Somerset Grand Cairnhill Singapore.

During the financial year ended 31 December 2011, the Trust issued Units as follows:

(a) on 11 February 2011, 6 May 2011, 2 August 2011 and 1 November 2011, the Trust issued 2,130,699, 2,029,969, 2,160,661 and 2,490,971 Units at an issue price of $1.1993 per Unit, $1.1912 per Unit, $1.2114 per Unit and $1.0510 per Unit respectively in payment of the Manager’s fee for the periods from 1 october 2010 to 31 December 2010, 1 January 2011 to 31 March 2011, 1 April 2011 to 30 June 2011 and 1 July 2011 to 30 September 2011 respectively.

(b) on 30 March 2011, the Trust issued 12,018,471 Units at an issue price of $1.1694 per Unit as payment of the acquisition fee in relation to the completion of the acquisition (directly or indirectly through the acquisition of shareholding interests) of 28 serviced residence properties comprising one in Singapore, one in Vietnam, 17 in France, four in the United Kingdom, two in Belgium, two in Germany and one in Spain.

(c) on 30 March 2011, the Trust issued 1,188,015 Units at an issue price of $1.1694 per Unit as payment of the divestment fee in relation to the completion of the divestment of the Trust’s entire interest in Ascott Beijing.


15 UnITs In IssUe (Cont’d)each unit in the Trust represents an undivided interest in the Trust. The rights and interests of Unitholders are contained in the Trust Deed and include the right to:

• OnevoteperUnitatMeetingsoftheTrust;

• ReceiveincomeandotherdistributionsattributabletotheUnitsheld;

• ParticipateintheterminationoftheTrustbyreceivingashareofallnetcashproceedsderivedfromtherealisation of the assets of the Trust less any liabilities, in accordance with their proportionate interests in the Trust. however, a Unitholder has no equitable or proprietary interest in the underlying assets of the Trust and is not entitled to the transfer of any assets (or part thereof) or of any estate or interest in any asset (or part thereof) of the Trust; and

• AttendallUnitholders’meetings.TheTrusteeortheManagermay(andtheManagershallattherequestin writing of not less than 50 Unitholders or one-tenth in number of the Unitholders, whichever is lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed.

The restrictions of a Unitholder include the following:

• AUnitholder’srightislimitedtotherighttorequiredueadministrationofhteTrustinaccordancewith the provisions of the Trust Deed; and

• AUnitholderhasnorighttorequesttheManagertoredeemhisUnitswhiletheUnitsarelistedonSGX-ST.

A Unitholder’s liability is limited to the amount paid or payable for any Units in the Trust. The provisions of the Trust Deed provide that no Unitholders will be personally liable to indemnify the Trustee or any creditor of the Trustee in the event that liabilities of the Trust exceed its assets.

16 gRoss RevenUegroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Gross rental income 284,494 268,466 44,943 47,643hospitality income 16,130 16,256 2,045 1,537Carpark income 3,217 3,931 1,548 2,916

303,841 288,653 48,536 52,096



17 DIReCT expensesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

operations and maintenance expenses 33,105 28,866 4,806 4,805Staff costs 30,844 26,892 4,723 5,574Serviced residence management fees 21,005 21,104 3,971 4,576Property tax 11,573 10,161 2,494 2,347Depreciation of plant and equipment 10,799 9,105 2,309 2,270Marketing and selling expenses 7,409 5,876 707 537Administrative and general expenses 16,873 16,871 1,626 1,829operating lease expense 2,043 1,948 – –other direct expenses 11,043 10,348 363 1,638

144,694 131,171 20,999 23,576

Included in the Group’s and Trust’s staff costs are contributions to defined contribution plans of $2,922,000 (2011: $2,781,000) and $473,000 (2011: $590,000) respectively.

18 fInAnCe InCome AnD CosTsgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Finance incomeBank deposits 2,038 1,558 75 41

Finance costsAmortisation of transaction costs (2,328) (2,853) (1,205) (1,044)Interest on bank loans and interest rate swaps (39,713) (36,121) (11,446) (11,468)Loans from related parties (54) – (11,563) (2,673)others (248) (536) (422) (145)

(42,343) (39,510) (24,636) (15,330)

19 mAnAgeR’s mAnAgemenT feesManager’s management fees of the Group and the Trust include base management fees of $8,098,000 (2011: $7,665,000) and performance fees of $6,031,000 (2011: $6,076,000).

The total units issued/to be issued for manager’s management fees amounted to 8,636,640 (2011: 9,313,196) Units.


20 neT InCome/(Loss)The following items have been included in arriving at net income/(loss) for the year:

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Non-audit fees paid to:– auditors of the Trust* 101 98 78 7Gain/(loss) on disposal of plant and equipment 400 179 (22) (13)

* Total non-audit fees paid to auditors of the Trust amounted to $206,000 (2011: $98,000), of which $105,000 (2011: $Nil) has been capitalised as capital expenditure.

21 neT DIvesTmenT expensesgroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Gain on divestments 1,110 – 120 –Divestment expenses (10,793) – (10,327) –Net divestment expenses (9,683) – (10,207) –

The divestment expenses relate to the expenses incurred in connection with the sale of two serviced residence properties, namely Somerset Grand Cairnhill Singapore and Somerset Gordon heights Melbourne. These expenses mainly comprise divestment fee, professional and other fees and contracted compensation arising from early termination of property management contract.

During the year, a surplus on revaluation of $87,466,000 was recognised on the revaluation of Somerset Grand Cairnhill Singapore based on its sale consideration of $359.0 million (Note 4).



22 InCome TAx expensegroup Trust

2012 2011 2012 2011$’000 $’000 $’000 $’000

Current tax expenseCurrent year 19,135 12,249 187 166Under/(over) provided in prior years 433 (11) (2) −Withholding tax 3,301 3,269 – −

22,869 15,507 185 166

Deferred tax expenseorigination and reversal of temporary differences 3,671 15,235 − −Underprovided in prior years 827 480 − −

4,498 15,715 − −

Income tax expense 27,367 31,222 185 166

Reconciliation of effective tax rateTotal return before income tax 199,950 225,000 71,091 80,420

Income tax using the Singapore tax rate of 17% (2011: 17%) 33,991 38,250 12,085 13,671

effect of different tax rates in foreign jurisdictions 15,305 19,945 – –Tax rebate/relief/exemption (13) (698) (7,870) (4,107)Income not subject to tax (45,810) (40,733) (13,153) (10,207)Tax benefits not recognised 2,510 1,742 – –expenses not deductible for tax purposes 20,953 11,575 11,049 2,906Utilisation of previously unrecognised tax losses (2,206) (500) – –Tax transparency (1,924) (2,097) (1,924) (2,097)Under/(over) provision in prior years 1,260 469 (2) –Withholding tax 3,301 3,269 – –

27,367 31,222 185 166


23 eARnIngs peR UnITThe calculation of basic earnings per unit for the Group and Trust was based on the total return for the year attributable to Unitholders and a weighted average number of units outstanding:

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Total return for the year attributable to Unitholders 162,354 180,277 70,906 80,254

group and Trust2012 2011

Numberof Units

Numberof Units

’000 ’000

Issued units at beginning of the year 1,129,871 1,107,853effect of issue of new units:– As Manager’s fees paid in Units 5,153 4,542– As Manager’s acquisition fees paid in Units 134 9,121– As Manager’s divestment fee paid in Units 79 901Weighted average number of units outstanding during the year 1,135,237 1,122,417

Diluted earnings per unit is the same as the basic earnings per unit as there are no dilutive instruments in issue during the year.

24 IssUe expensesgroup and Trust2012 2011$’000 $’000

Professional fees − 53

The expenses are deducted directly against Unitholders’ funds.



25 fInAnCIAL RIsK mAnAgemenT overview

The Group has exposure to the following risks from its use of financial instruments:• creditrisk• liquidityrisk• marketrisk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these financial statements. There were no changes in the Group’s approach to financial risk management during the year.

Risk management frameworkThe Manager has overall responsibility for the establishment and oversight of the Group’s risk management framework.

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The Manager continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit riskCredit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group as and when they fall due.

The Manager has established credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed by the serviced residence management companies before lease agreements are entered into with customers. Cash and fixed deposits are placed with financial institutions which are regulated. Transactions involving derivative financial instruments are allowed only with counterparties that are of high quality.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main component of this allowance is a specific loss component that relates to individually significant exposures.


25 fInAnCIAL RIsK mAnAgemenT (Cont’d) Credit risk (cont’d)

The maximum exposure to credit risk for loans and receivables at the reporting date by geographic region was:

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Singapore 2,304 2,884 1,492,002 1,410,222Australia 219 256 – –China 1,789 1,963 – –europe (excluding United Kingdom) 16,260 3,703 – –Indonesia 3,171 2,465 – –Japan 3,050 1,379 – –Philippines 3,521 4,913 – –United Kingdom 2,047 2,002 – –Vietnam 2,205 2,786 – –

34,566 22,351 1,492,002 1,410,222

At 31 December 2012 and 31 December 2011, except as described in Note 10 to the financial statements, there was no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying value of each financial asset on the statement of financial position.

Liquidity riskLiquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Manager monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 90 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

As at 31 December 2012, the Group has unutilised credit facilities of approximately $70 million (2011: $202 million) expiring between February 2013 and February 2014 (2011: between March 2013 and February 2014), that can be drawn down to meet short-term financing needs.

In addition, the Group has put in place a $1.0 billion MTN Programme, of which $250 million has been issued as at 31 December 2012 (2011: $300 million). The Group has redeemed $50 million of the MTN previously issued during the year. In 2011, the Group established a US$2.0 billion euro-Medium Term Note Programme and at 31 December 2012, the Group has yet to issue any notes under this programme.



25 fInAnCIAL RIsK mAnAgemenT (Cont’d) Liquidity risk (cont’d)

The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact of netting agreements:

----------------------Cash flows-----------------------Carryingamount

Contractualcash flows

Within 1 year

Within 1 to 5 years

More than 5 years

$’000 $’000 $’000 $’000 $’000

Group2012Non-derivative financial liabilitiesFloating rate loans 893,301 (935,541) (180,217) (733,422) (21,902)Fixed rate loans 258,042 (301,880) (10,320) (187,625) (103,935)Finance lease liabilities 19,478 (20,346) (3,640) (13,239) (3,467)Trade and other payables 110,727 (110,727) (110,727) – –

1,281,548 (1,368,494) (304,904) (934,286) (129,304)

Derivative financial liabilitiesInterest rate swaps:– outflow 19,402 (18,924) (6,938) (11,986) –

1,300,950 (1,387,418) (311,842) (946,272) (129,304)

2011Non-derivative financial liabilitiesFloating rate loans 880,323 (946,200) (230,413) (715,787) –Fixed rate loans 299,421 (353,888) (61,576) (184,077) (108,235)Finance lease liabilities 24,870 (27,254) (4,169) (15,606) (7,479)Trade and other payables 117,237 (117,237) (117,237) – –

1,321,851 (1,444,579) (413,395) (915,470) (115,714)

Derivative financial liabilitiesInterest rate swaps:– outflow 18,478 (18,740) (6,962) (11,778) –

1,340,329 (1,463,319) (420,357) (927,248) (115,714)


25 fInAnCIAL RIsK mAnAgemenT (Cont’d) Liquidity risk (cont’d)

-------------Cash flows----------------Carryingamount

Contractualcash flows

Within1 year

Within 1 to 5 years

$’000 $’000 $’000 $’000

Trust2012Non-derivative financial liabilitiesFloating rate loans 481,309 (494,204) (137,529) (356,675)Intra-group financial guarantees 5,265 (5,265) (1,984) (3,281)Trade and other payables 335,022 (335,022) (335,022) −

821,596 (834,491) (474,535) (359,956)

Derivative financial liabilitiesInterest rate swaps:– outflow 13,739 (13,434) (4,508) (8,926)

835,335 (847,925) (479,043) (368,882)

2011Non-derivative financial liabilitiesFloating rate loans 353,985 (383,147) (8,330) (374,817)Intra-group financial guarantees 7,348 (7,348) (2,726) (4,622)Trade and other payables 389,533 (389,533) (389,533) −

750,866 (780,028) (400,589) (379,439)

Derivative financial liabilitiesInterest rate swaps:– outflow 9,867 (9,830) (2,525) (7,305)

760,733 (789,858) (403,114) (386,744)

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.



25 fInAnCIAL RIsK mAnAgemenT (Cont’d) market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income and its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. Market risk is managed through established investment policies and guidelines. These policies and guidelines are reviewed regularly taking into consideration changes in the overall market environment.

foreign currency riskThe Group has exposures to foreign currency risks as a result of its operations in several countries. The currencies giving rise to this risk are the Australian Dollar, Chinese Renminbi, euro Dollar, Great British Pound, hong Kong Dollar, Indonesia Rupiah, Japanese Yen, Philippines Peso, US Dollar and the Vietnamese Dong.

The Manager manages the foreign currency risks associated with the capital values of the overseas assets and will as far as possible adopt a natural hedge strategy by borrowing in the same currency as the underlying assets.


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25 fInAnCIAL RIsK mAnAgemenT (Cont’d) foreign currency risk (cont’d) sensitivity analysis

The following table indicates the approximate change in the Group’s statement of total return and Unitholders’ funds in response to a 10% increase in foreign exchange rates to which the Group has significant exposure at the reporting date as compared to the functional currencies of the respective entities. The sensitivity analysis includes balances in group companies where the denomination of the balances is in a currency other than the functional currencies of the lender or the borrower.

31 December 2012 31 December 2011Statement of

total returnUnitholders’

fundsStatement of

total returnUnitholders’

funds$’000 $’000 $’000 $’000

GroupSingapore Dollar (1) 183 – (38) –Australian Dollar (2) 358 – 160 –Chinese Renminbi (2) (1,220) – (1,328) –euro Dollar (2) (21,853) – (17,668) –Great British Pound (2) 50 – – –hong Kong Dollar (2) (1,209) – (1,287) –Indonesia Rupiah (3) (34) – (25) –Japanese Yen (4) (2,149) – (1,464) –Philippines Peso (2) 244 – 45 –US Dollar (5) (840) – 3,193 –Vietnamese Dong (6) – – 730 –

TrustAustralian Dollar (2) 1,977 – 3,576 –Chinese Renminbi (2) 879 – (1,052) –euro Dollar (2) 17,274 – 26,859 –Great British Pound (2) 31,348 – 30,012 –hong Kong Dollar (2) (6) – (6) –Japanese Yen (2) 5,347 – 6,219 –Philippines Peso (2) 333 – 330 –US Dollar (2) 5,141 – 6,677 –

Notes:(1) as compared to functional currencies of Australian Dollar, Chinese Renminbi and US Dollar. (2) as compared to functional currency of Singapore Dollar. (3) as compared to functional currencies of Singapore Dollar and US Dollar.(4) as compared to functional currencies of Singapore Dollar and Chinese Renminbi.(5) as compared to functional currencies of Singapore Dollar, Chinese Renminbi and Philippines Peso.(6) as compared to functional currency of US Dollar.

A decrease in foreign exchange rates to which the Group has significant exposure at the reporting date as compared to the functional currencies of the respective entities would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.



25 fInAnCIAL RIsK mAnAgemenT (Cont’d) Interest rate risk

The Group’s exposure to changes in interest rates relates primarily to interest-earning financial assets and interest-bearing financial liabilities. Interest rate risk is managed by the Manager on an ongoing basis with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates. Generally, the interest rate exposure is managed through the use of interest rate swaps, interest rate caps and/or fixed rate borrowings.

The Group classifies these interest rate swaps and interest rate caps as cash flow hedges.

The details of the interest rate swaps and interest rate caps are as follows:

Currency

Notionalcontractamount

Fixed rate

Floating rate

Year ofmaturity

Net asset/(liability)

$’000 % $’000

Interest Rate SwapsGroup2012USD 10,400 0.75 LIBoR 2013 (13)JPY 11,750,000 0.21–0.52 LIBoR 2013 – 2015 (168)GBP 7,496 5.10 LIBoR 2015 (1,570)eUR 154,305 2.60 – 4.10 eURIBoR 2013 - 2016 (17,651)

(19,402)

2011USD 10,400 0.75 LIBoR 2013 (5)JPY 7,150,000 0.52 – 1.38 LIBoR 2012 – 2013 (375)GBP 35,438 5.10 – 5.50 LIBoR 2012 – 2015 (3,158)eUR 155,786 2.60 – 4.10 eURIBoR 2013 – 2016 (14,940)

(18,478)

Trust2012USD 10,400 0.75 LIBoR 2013 (13)eUR 117,000 2.60 – 2.72 eURIBoR 2016 (13,691)JPY 2,100,000 0.52 LIBoR 2013 (35)

(13,739)

2011USD 10,400 0.75 LIBoR 2013 (5)eUR 117,000 2.60 – 2.72 eURIBoR 2016 (9,730)JPY 2,100,000 0.52 LIBoR 2013 (132)

(9,867)


25 fInAnCIAL RIsK mAnAgemenT (Cont’d) Interest rate risk (cont’d)

Currency

Notionalcontractamount

Cap/Strikerate

Year ofmaturity

Net asset/(liability)

$’000 % $’000

Interest Rate CapsGroup2012eUR 28,338 3.00 – 3.50 2014 4

2011USD 19,093 2.50 2012 6GBP 22,000 4.50 2012 −*eUR 104,196 3.00 – 4.50 2012 - 2014 108

114

* Denotes amounts less than $1,000

At the reporting date, the interest rate profile of the interest-bearing financial instruments was as follows:

group TrustCarrying amount Carrying amount

2012 2011 2012 2011$’000 $’000 $’000 $’000

Fixed rate instruments Financial liabilities (258,042) (299,421) – –

Variable rate instrumentsFinancial liabilities (912,779) (905,193) (481,309) (353,985)

Interest rate swaps (liabilities) (19,402) (18,478) (13,739) (9,867)Interest rate caps 4 114 – –

fair value sensitivity analysis for fixed rate instrumentsThe Group does not account for any fixed rate financial liabilities at fair value through profit or loss, and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect statement of total return.



25 fInAnCIAL RIsK mAnAgemenT (Cont’d) Interest rate risk (cont’d) Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis point in interest rate at the reporting date would increase/(decrease) Unitholders’ funds and statement of total return by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2011.

Statement of total return Unitholders’ funds100 bp

increase100 bp

decrease100 bp

increase100 bp

decrease$’000 $’000 $’000 $’000

Group31 December 2012Variable rate financial liabilities (9,166) 9,166 – –Interest rate swaps 4,465 (4,465) 1,099 (1,099)Cash flow sensitivity (net) (4,701) 4,701 1,099 (1,099)

31 December 2011Variable rate financial liabilities (9,098) 9,098 – –Interest rate swaps 4,745 (4,745) 1,186 (1,186)Cash flow sensitivity (net) (4,353) 4,353 1,186 (1,186)

Trust31 December 2012Variable rate financial liabilities (4,829) 4,829 – –Interest rate swaps 2,293 (2,293) 589 (589)Cash flow sensitivity (net) (2,536) 2,536 589 (589)

31 December 2011Variable rate financial liabilities (3,564) 3,564 – –Interest rate swaps 2,516 (2,516) 638 (638)Cash flow sensitivity (net) (1,048) 1,048 638 (638)

26 ReLATeD pARTIesFor the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa. Related parties may be individuals or other entities. The Manager is an indirect wholly-owned subsidiary of a substantial Unitholder of the Trust.

In the normal course of the operations of the Trust, the Manager’s management fees and the Trustee’s fees have been paid or are payable to the Manager and Trustee respectively.


26 ReLATeD pARTIes (Cont’d)During the financial year, other than those disclosed elsewhere in the financial statements, there were the following significant related party transactions, which were carried out in the normal course of business on arm’s length commercial terms:

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Acquisition fees paid/payable to the Manager 3,621 610 3,020 −Contractual compensation arising from

early termination of property management contract paid/payable to related corporations of the Manager 6,847 – 6,834 –

Divestment fee paid/payable to the Manager 1,871 − 1,795 −Rental income received/receivable from related

corporations of the Manager (99) (322) (99) (190)Rental income received/receivable under

master lease arrangements from related corporations of the Manager (38,890) (39,020) (2,328) −

Serviced residence properties management fees paid/payable to related corporations of the Manager 20,159 20,156 3,971 4,576

Yield protection income received/receivable from a related corporation of the Manager (1,107) (975) (1,107) (975)

27 fInAnCIAL RATIosgroup

2012 2011% %

Ratio of expenses to average net asset value (1)

– including performance component of Manager’s management fees 0.79 1.14– excluding performance component of Manager’s management fees 0.43 0.75Portfolio turnover rate (2) 21.26 −

(1) The annualised ratio is computed in accordance with guidelines of Investment Management Association of Singapore. The expenses used in the computation relate to expenses at the Group level, excluding property related expenses, borrowing costs and foreign exchange gains/(losses).

(2) The annualised ratio is computed based on the lesser of purchases or sales of underlying serviced residence properties of the Group expressed as a percentage of weighted average net asset value.



28 opeRATIng segmenTsSegment information is presented in respect of the Group’s geographical segments. The operations of each of the Group’s geographical segments are separately managed because of the different economic environments in which they operate in. For each of the reportable segments, the Ceo of the Manager reviews internal management reports on at least a monthly basis. This forms the basis of identifying the operating segments of the Group.

Performance measurement based on segment profit before income tax and non-financial assets as well as financial assets attributable to each segment is used as the Manager believes that such information is most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise finance costs, corporate assets and expenses, and income tax expense. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one year. Information regarding the Group’s reportable segments is presented in the tables on pages 181 to 184.


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293

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841

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ct e

xpen

ses

(14,

855)

(19,

890)

(3,5

51)

(27,

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(18,

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743)

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199,

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nue

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n am

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s76

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276

–1,

671

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649

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318

292,

890

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s24

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222

,484

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91,

361,

538

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479

279

3,46

51,

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2,42

644

240

1,18

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04,

860

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368

1,44

546

2,43

82,

826

7,12

310

,799


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225,

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193,

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ield

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1,67

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299

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450

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105


29 DeTeRmInATIon of fAIR vALUesA number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) financial derivatives The fair values of interest rate swaps and interest rate caps are based on broker quotes. These quotes are tested for reasonableness by discounting estimated future cash flows based on terms and maturity of each contract and using market interest rates for a similar financial instrument at the measurement date.

(ii) non-derivative financial liabilitiesFair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

(iii) Intra-group financial guaranteesThe value of financial guarantees provided by the Trust to its subsidiaries is determined by reference to the difference in the interest rates, by comparing the actual rates charged by the bank with these guarantees made available, with the estimated rates that the banks would have charged had these guarantees not been available.

(iv) other financial assets and liabilitiesThe notional amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values.

Interest rates used for determining fair valueThe interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread, and were as follows:

2012 2011% %

Loans and borrowings 3.72 – 4.30 1.92 – 4.10Financial derivatives 0.17 – 0.52 0.20 – 1.59



29 DeTeRmInATIon of fAIR vALUes (Cont’d) (iv) other financial assets and liabilities (cont’d) fair values versus carrying amounts

The carrying amounts of the Group’s and the Trust’s financial instruments carried at cost or amortised cost are not materially different from their fair values as at 31 December 2012 and 2011 except as follows:

2012 2011Carryingamount Fair value

Carryingamount Fair value

Note $’000 $’000 $’000 $’000

GroupFinancial liabilitiesSecured bank loans 12 857,165 857,165 880,323 880,323Unsecured bank loans 12 44,595 44,595 – –Medium term notes 12 249,583 249,914 299,421 301,449Finance lease liabilities 12 19,478 19,478 24,870 24,870

1,170,821 1,171,152 1,204,614 1,206,642

TrustFinancial liabilitiesSecured bank loans 12 436,714 436,714 353,985 353,985Unsecured bank loans 12 44,595 44,595 − −

481,309 481,309 353,985 353,985

fair value hierarchyThe table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level1: quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

• Level2: inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheasset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level3: inputs for the asset or liability that are not based on observable market data(unobservable inputs).


29 DeTeRmInATIon of fAIR vALUes (Cont’d) (iv) other financial assets and liabilities (cont’d) fair value hierarchy (cont’d)

Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000

Group31 December 2012Derivative financial assets – 4 – 4Derivative financial liabilities – (19,402) – (19,402)

– (19,398) – (19,398)

31 December 2011Derivative financial assets – 114 – 114Derivative financial liabilities – (18,478) – (18,478)

– (18,364) – (18,364)

Trust 31 December 2012Derivative financial liabilities – (13,739) – (13,739)

31 December 2011Derivative financial liabilities – (9,867) – (9,867)



30 ACqUIsITIon of seRvICeD ResIDenCe pRopeRTIes, neT of CAsh movemenTs Acquisition of serviced residence properties and subsidiaries

on 29 March 2012, the Group acquired an effective 60% interest in Citadines Kyoto Gojo Tokutei Mokuteki Kaisha, which owns the property Citadines Karasuma-Gojo Kyoto.

on 28 September 2012, the Group acquired the following:

– a serviced residence property, Ascott Raffles Place Singapore from Ascott Singapore Raffles Place Pte. Ltd., a wholly-owned indirect subsidiary of The Ascott Limited (“TAL”); and

– a 100% interest in hong Kong Yong Zheng Group Company Limited from The Ascott holdings Limited (“TAhL”), a wholly-owned subsidiary of TAL and Tianhe east Investments (BVI) Limited, a wholly-owned subsidiary of TAhL. hong Kong Yong Zheng Group Company Limited owns the property Ascott Guangzhou, through its wholly-owned subsidiary, Guangzhou hai Yi Property Development Company.

on 15 November 2012, the Group acquired the Madison hamburg property from a third party.

From the respective acquisition dates to 31 December 2012, the serviced residence properties and subsidiaries contributed profit after taxation of $10,973,000. If the acquisitions had occurred on 1 January 2012, the Manager estimates that the consolidated revenue would have been $322,701,000 and consolidated profit for the year would have been $171,110,000.

on 21 December 2011, the Group acquired an effective 60% interest in Citadines Shinjuku Tokutei Mokuteki Kaisha. From 21 December 2011 to 31 December 2011, the contribution from the acquisition was not significant. Accordingly, it was not included in the Group’s consolidated results for the year ended 31 December 2011. If the acquisition had occurred on 1 January 2011, the Manager estimates that consolidated revenue would have been $295,007,000 and consolidated profit for the year would have been $180,319,000.

The cash flows and net assets and liabilities of serviced residence properties and subsidiaries acquired are provided below:

Recognised values on

acquisition2012 2011$’000 $’000

Serviced residence properties 391,667 64,920Plant and equipment 7,180 10,743Inventories 21 –Trade and other receivables 987 1,830Cash and bank balances 7,851 4,037Trade and other payables (7,983) (2,081)Bank loans (46,601) (62,375)Provision for taxation (14) (16)Non-controlling interests (2,584) (7,078)Net identifiable assets and liabilities acquired 350,524 9,980

Total consideration 350,524 9,980Cash of subsidiaries acquired (7,851) (4,037)Cash outflow on acquisition of serviced residence properties 342,673 5,943


31 CommITmenTsAs at the reporting date, the Group and the Trust had the following commitments:

(a) Capital commitments

group Trust2012 2011 2012 2011$’000 $’000 $’000 $’000

Capital expenditure commitments:– contracted but not provided for 12,022 5,820 – –

(b) operating leases as lessor

Non-cancellable operating lease rentals are receivable as follows:

group2012 2011$’000 $’000

Within 1 year 47,216 38,634After 1 year but within 5 years 179,191 154,888After 5 years 54,854 75,377

281,261 268,899

The above operating lease receivables comprise amounts receivable under the master lease arrangements.

(c) operating leases as lessee

The Group leases the land on which one of the serviced residence properties is constructed. The lease has a tenure of 24 years, with an option to renew the lease after that date.

Future minimum lease payments for the Group on non-cancellable operating leases are as follows:

group2012 2011$’000 $’000

Within 1 year 950 943After 1 year but within 5 years 4,849 4,815After 5 years 3,212 3,190

9,011 8,948



31 CommITmenTs (Cont’d)(d) DBS Trustee Limited, as trustee of the Trust, had entered into a put & call option agreement for the

purchase of a new serviced residence, to be developed on the site on which Somerset Grand Cairnhill Singapore was previously located, for a consideration of $405.0 million. The put & call option agreement will lapse if neither the put option nor the call option is exercised by 31 December 2013.

32 sUBseqUenT evenTson 23 January 2013, the Manager declared a distribution of 4.238 cents per Unit amounting to $48,424,000 in respect of the period from 1 July 2012 to 31 December 2012.

on 6 February 2013, the Trust issued 2,036,285 Units at an issue price of $1.3588 per Unit to the Manager. These Units were issued to the Manager as payment of the Management Fees (as defined in the Trust Deed) for the period from 1 october 2012 to 31 December 2012. The balance of the Management Fees of $703,431 (excluding applicable goods and services tax) was paid in cash.

on 6 February 2013, the Trust issued 114,943,000 new Units at an issue price of $1.305 per Unit by way of a private placement to institutional and other investors.


sTATIsTICs of UnIThoLDIngs As AT 1 mARCh 2013

Issued and fully paid Units1,259,797,979 Units (Voting rights: 1 vote per Unit)Market capitalisation of S$1,700,727,271.65 based on market closing Unit price of S$1.35 on 1 March 2013

Distribution of Unitholdings

Size of Holdings Number of Unitholders % Number of Units %1 – 999 103 0.85 37,510 0.001,000 – 10,000 8,684 71.55 41,126,290 3.2610,001 – 1,000,000 3,321 27.36 160,564,357 12.751,000,001 and above 29 0.24 1,058,069,822 83.99

12,137 100.00 1,259,797,979 100.00

Location of Unitholders

Country Number of Unitholders % Number of Units %Singapore 11,827 97.45 1,250,993,602 99.30Malaysia 173 1.42 4,994,370 0.40others 137 1.13 3,810,007 0.30

12,137 100.00 1,259,797,979 100.00

TwenTY LARgesT UnIThoLDeRs

Name Number of Units %1 The ASCoTT LIMITeD 307,592,000 24.422 SoMeRSeT CAPITAL PTe LTD 202,931,000 16.113 CITIBANK NoMINeeS SINGAPoRe PTe LTD 137,014,715 10.884 hSBC (SINGAPoRe) NoMINeeS PTe LTD 102,685,184 8.155 DBS NoMINeeS PTe LTD 95,684,197 7.606 ASCoTT ReSIDeNCe TRUST MANAGeMeNT LIMITeD 55,665,819 4.427 DBSN SeRVICeS PTe LTD 47,542,114 3.778 RAFFLeS NoMINeeS (PTe) LTD 29,632,242 2.359 NTUC FAIRPRICe Co-oPeRATIVe LTD 11,500,000 0.9110 UNITeD oVeRSeAS BANK NoMINeeS (PTe) LTD 9,267,865 0.7411 DB NoMINeeS (SINGAPoRe) PTe LTD 8,968,787 0.7112 BANK oF SINGAPoRe NoMINeeS PTe LTD 7,494,000 0.5913 DBS VICKeRS SeCURITIeS (SINGAPoRe) PTe LTD 6,523,000 0.5214 UoB KAY hIAN PTe LTD 4,987,000 0.4015 RAFFLeS INVeSTMeNTS LIMITeD 4,975,000 0.3916 Goh FoUNDATIoN LIMITeD 3,152,000 0.2517 oCBC SeCURITIeS PRIVATe LTD 2,781,500 0.2218 BNP PARIBAS NoMINeeS SINGAPoRe PTe LTD 2,655,000 0.2119 MoRGAN STANLeY ASIA (SINGAPoRe) SeCURITIeS PTe LTD 2,397,607 0.1920 Ko WooN hoNG 2,139,000 0.17

1,045,588,030 83.00

ADDITIonAL InfoRmATIon


ADDITIonAL InfoRmATIon

LIsT of InTeResT of DIReCToRs As AT 21 JAnUARY 2013

Number of Units Held

Name of Director Direct

InterestDeemed Interest

Lim Jit Poh 19,750 –Lim Ming Yan 212,196 –Tay Boon hwee, Ronald – –Ku Moon Lun 17,611 –S. Chandra Das 516,018 –Giam Chin Toon @ Jeremy Giam 14,562 –Zulkifli Bin Baharudin – –Jennie Chua 120,739 –Chong Kee hiong 815,000 200,000Wen Khai Meng1 31,283 27,000

Note:1. Wen Khai Meng resigned as Non-Independent Non-executive Director on 24 January 2013.

LIsT of sUBsTAnTIAL UnIThoLDeRs As AT 1 mARCh 2013

Name of Substantial Unitholders

UnitholdingsIn Which

The Substantial Unitholders HaveA Direct Interest %

UnitholdingsIn Which

The Substantial Unitholders Are

Deemed To HaveAn Interest %

Temasek holdings (Private) Limited1 – – 594,513,168 47.19CapitaLand Limited – – 566,188,819 44.94The Ascott Limited2 307,592,000 24.41 258,596,819 20.53Somerset Capital Pte Ltd 202,931,000 16.11 – –AIA Group Limited – – 63,673,000 5.05AIA Company Limited3 1,650,000 0.13 62,023,000 4.92

Notes:1. By virtue of Section 7 of the Companies Act, Chapter 50 of Singapore (the Companies Act), Temasek holdings (Private) Limited (Temasek) is deemed to have an

interest in 594,513,168 units in Ascott Reit in which its associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance.

2. The Ascott Limited (Ascott) is a wholly owned subsidiary of CapitaLand Limited (CL). Somerset Capital Pte Ltd (SCPL) and the Manager are wholly owned subsidiaries of Ascott. Accordingly, CL is deemed through its interests in Ascott, SCPL and the Manager to have an interest in their aggregate holdings of 566,188,819 units of Ascott Reit by virtue of Section 7 of the Companies Act.

3. AIA Company Limited is a subsidiary of AIA Group Limited.

fRee fLoATBased on the information made available to the Manager, approximately 52% of the units in Ascott Reit were held in the hands of the public as at 1 March 2013. Accordingly, Rule 723 of the Listing Manual of the SGX-ST has been complied with.


InTeResTeD peRson (As DefIneD In The LIsTIng mAnUAL) AnD InTeResTeD pARTY (As DefIneD In The pRopeRTY fUnDs AppenDIx) TRAnsACTIons The transactions entered into during the financial year are as follow.

name of Interested person/Interested party

Aggregate value(excluding transactions

less than $100,000)

(1)

$’000Temasek Holdings (Private) Ltd & its subsidiariesDigital cable services 441

Capitaland Limited & its subsidiaresAsset management fees 1,533

The Ascott Limited & its subsidiariesAcquisition of interest in 3 serviced residence properties 710,700(2)

Divestment of 100% effective interest in Somerset Grand Cairnhill 359,000(2)

Master leases for Singapore properties 155,400 (2)

Manager’s management fees 14,121Serviced residence management fees 8,214Acquisition fees 3,924Divestment fees 1,795Project management fee 158Interest expense 152Rental income 109

DBS Trustee Limited (as trustee of Ascott Residence Trust)Trustee’s fee 311Total 1,255,858

(1) The aggregate value is for the contract period. (2) These transactions are approved by unitholders at extraordinary General Meeting held on 27 July 2012.


noTICe of AnnUAL geneRAL meeTIng

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of the unitholders (the “Unitholders”) of Ascott Residence Trust (“Ascott Reit”) will be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912 on Tuesday, 23 April 2013 at 10.30 a.m. to transact the following business:

(A) As oRDInARY BUsIness

1. To receive and adopt the Report of DBS Trustee Limited, as trustee of Ascott Reit (the “Trustee”), the Statement by Ascott Residence Trust Management Limited, as manager of Ascott Reit (the “Manager”) and the Audited Financial Statements of Ascott Reit for the year ended 31 December 2012 and the Auditors’ Report thereon.

(ordinary Resolution 1)

2. To re-appoint Messrs KPMG LLP as the Auditors of Ascott Reit and to hold office until the conclusion of the next AGM of Ascott Reit and to authorise the Manager to fix their remuneration.

(ordinary Resolution 2)

(B) As speCIAL BUsIness

To consider and, if thought fit, to pass with or without any modifications, the following resolution as an ordinary Resolution:

3. That authority be and is hereby given to the Manager to: (ordinary Resolution 3)

(a) (i) issue units in Ascott Reit (“Units”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Units to be issued, including but not limited to the creation and issue of (as well as adjustments to) securities, warrants, debentures or other instruments convertible into Units,

at any time and upon such terms and conditions and for such purposes and to such persons as the Manager may in its absolute discretion deem fit; and

(b) issue Units in pursuance of any Instrument made or granted by the Manager while this Resolution was in force (notwithstanding that the authority conferred by this Resolution may have ceased to be in force at the time such Units are issued),

provided that:

(1) the aggregate number of Units to be issued pursuant to this Resolution (including Units to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed fifty per cent. (50%) of the total number of issued Units (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Units to be issued other than on a pro rata basis to Unitholders (including Units to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed twenty per cent. (20%) of the total number of issued Units (as calculated in accordance with sub-paragraph (2) below);

(2) subject to such manner of calculation as may be prescribed by the Singapore exchange Securities Trading Limited (the “SGX-ST”) for the purpose of determin-ing the aggregate number of Units that may be issued under sub-paragraph (1) above, the total number of issued Units shall be based on the total number of issued Units at the time this Resolution is passed, after adjusting for:


(a) any new Units arising from the conversion or exercise of any Instruments which are outstanding at the time this Resolution is passed; and

(b) any subsequent bonus issue, consolidation or subdivision of Units;

(3) in exercising the authority conferred by this Resolution, the Manager shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the trust deed constituting Ascott Reit (as amended, varied or supplemented from time to time) (the “Trust Deed”) for the time being in force (unless other wise exempted or waived by the Monetary Authority of Singapore);

(4) (unless revoked or varied by the Unitholders in a general meeting) the authority conferred by this Resolution shall continue in force until (a) the conclusion of the next AGM of Ascott Reit or (b) the date by which the next AGM of Ascott Reit is required by applicable regulations to be held, whichever is the earlier;

(5) where the terms of the issue of the Instruments provide for adjustment to the number of Instruments or Units into which the Instruments may be converted, in the event of rights, bonus or other capitalisation issues or any other events, the Manager is authorised to issue additional Instruments or Units pursuant to such adjustment notwithstanding that the authority conferred by this Resolution may have ceased to be in force at the time the Instruments or Units are issued; and

(6) the Manager and the Trustee be and are hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Manager or, as the case may be, the Trustee may consider expedient or necessary or in the interest of Ascott Reit to give effect to the authority conferred by this Resolution.

(Please see Explanatory Notes)

(C) As oTheR BUsIness

4. To transact such other business as may be transacted at an AGM.

BY oRDeR of The BoARDAscott Residence Trust Management Limited (Company Registration No. 200516209Z)As manager of Ascott Residence Trust

Kang Siew FongCompany SecretarySingapore26 March 2013

Notes:1. A Unitholder entitled to attend and vote at the AGM is entitled to appoint not more than two proxies to attend and vote in his stead. Where a Unitholder appoints more

than one proxy, the appointments shall be invalid unless he specifies the proportion of his unitholding (expressed as a percentage of the whole) to be represented by each proxy. A proxy need not be a Unitholder.

2. The instrument appointing a proxy or proxies (the “proxy form”) must be deposited at the office of Ascott Reit’s Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not later than Sunday, 21 April 2013 at 10.30 a.m. being 48 hours before the time fixed for the AGM.


noTICe of AnnUAL geneRAL meeTIng (Cont’d)

expLAnAToRY noTes:

ordinary Resolution 3

ordinary Resolution 3 above, if passed, will empower the Manager from the date of the AGM until (a) the conclusion of the next AGM of Ascott Reit, (b) the date by which the next AGM of Ascott Reit is required by the applicable regulations to be held, or (c) the date such authority is revoked or varied by the Unitholders in a general meeting, whichever is the earliest, to issue Units, to make or grant Instruments and to issue Units pursuant to such Instruments, up to a number not exceeding 50% of the total number of issued Units of which up to 20% of the total number of issued Units may be issued other than on a pro rata basis to Unitholders.

For determining the aggregate number of Units that may be issued, the percentage of issued Units will be calculated based on the Units in issue at the time ordinary Resolution 3 above is passed, after adjusting for new Units arising from the conversion or exercise of any Instruments which are outstanding at the time ordinary Resolution 3 is passed and any subsequent bonus issue, consolidation or subdivision of Units.

Fund raising by issuance of new Units may be required in instances of property acquisitions or debt repayments. In any event, if the approval of Unitholders is required under the Listing Manual of the SGX-ST and the Trust Deed or any applicable laws and regulations in such instances, the Manager will then obtain the approval of Unitholders accordingly.


I/We, _________________________________________________________________________________________ (Name(s) and NRIC No.(s)/Passport

No.(s)/Company Registration No.) of _____________________________________________________________________________________ (Address)

being a unitholder/unitholders of Ascott Residence Trust (“Ascott Reit”), hereby appoint:

Name Address NRIC/Passport No. Proportion of Unitholdings

No. of Units %

and/or (delete as appropriate)

Name Address NRIC/Passport No. Proportion of Unitholdings

No. of Units %

or, both of whom failing, the Chairman of the Annual General Meeting (“AGM”) as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary, to demand a poll, at the AGM of Ascott Reit to be held at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912 on Tuesday, 23 April 2013 at 10.30 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the AGM as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the AGM.

No. Ordinary ResolutionsTo be used on

a show of handsTo be used in the

event of a poll

For* Against* No. of Votes For**

No. of Votes Against**

ORDINARY BUSINESS

1 To receive and adopt the Trustee’s Report, the Manager’s Statement, the Audited Financial Statements of Ascott Reit for the year ended 31 December 2012 and the Auditors’ Report thereon.

2 To re-appoint KPMG LLP as the Auditors of Ascott Reit and authorise the Manager to fix the Auditors’ remuneration.

SPECIAL BUSINESS

3 To authorise the Manager to issue Units and to make or grant convertible instruments.

OTHER BUSINESS

4 To transact such other business as may be transacted at an AGM.

* Please indicate your vote “For” or “Against” with a tick (✓) within the box provided. ** If you wish to exercise all your votes “For” or “Against”, please tick (✓) within the box provided. Alternatively, please indicate the number of

votes as appropriate.

Dated this ___________ day of ______________________ 2013

Signature(s) of Unitholder(s)/Common Seal

pRoxY foRm AnnUAL geneRAL meeTIng

ASCOTT RESIDENCE TRUST(Constituted in the Republic of Singapore pursuant to a trust deed dated 19 January 2006 (as amended, varied or supplemented from time to time))

Total No. of Units held

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IMPoRTANT

1. For investors who have used their CPF monies to buy units in Ascott Residence Trust, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FoR TheIR INFoRMATIoN oNLY.

2. This proxy form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Annual General Meeting as observers must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.

4. PLeASe ReAD The NoTeS To The PRoXY FoRM.

Affixpostagestamp

AsCoTT ResIDenCe TRUsTc/o Boardroom Corporate & Advisory services pte. Ltd.

50 Raffles Place #32-01 Singapore Land Tower

Singapore 048623

1st fold (This flap for sealing)

2nd fold here

IMPoRTANT: PLeASe ReAD The NoTeS To PRoXY FoRM BeLoW Notes to Proxy Form

1. A unitholder of Ascott Reit (“Unitholder”) entitled to attend and vote at the AGM is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a Unitholder.

2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.

3. Completion and return of this proxy form shall not preclude a Unitholder from attending and voting at the AGM. Any appointment of a proxy or proxies shall be deemed to be revoked if a Unitholder attends the AGM in person, and in such event, the Manager reserves the right to refuse to admit any person or persons appointed under the proxy form, to the AGM.

4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his name in the Depository Register maintained by The Central Depository (Pte) Limited (“CDP”), he should insert that number of Units. If the Unitholder has Units registered in his name in the Register of Unitholders of Ascott Reit, he should insert that number of Units. If the Unitholder has Units entered against his name in the said Depository Register and registered in his name in the Register of Unitholders, he should insert the aggregate number of Units. If no number is inserted, this proxy form will be deemed to relate to all the Units held by the Unitholder.

5. The proxy form must be deposited at the office of Ascott Reit’s Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, not later than Sunday, 21 April 2013 at 10.30 a.m. being 48 hours before the time fixed for the AGM.

6. The proxy form must be signed under the hand of the appointor or of his attorney duly authorised in writing. Where the proxy form is executed by a corporation, it must be executed under its common seal or under the hand of an officer or attorney so duly authorised.

7. Where a proxy form is signed on behalf of the appointor by an attorney or a duly authorised officer, the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority must (failing previous registration with the Manager) be lodged with the proxy form; failing which the proxy form may be treated as invalid.

8. The Manager shall be entitled to reject a proxy form which is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the proxy form. In addition, in the case of Units entered in the Depository Register, the Manager may reject a proxy form if the Unitholder, being the appointor, is not shown to have Units entered against his name in the Depository Register at least 48 hours before the time appointed for holding the AGM, as certified by CDP to the Manager.

9. All Unitholders will be bound by the outcome of the AGM regardless of whether they have attended or voted at the AGM.

10. At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by (a) the Chairman, (b) five or more Unitholders present in person or by proxy or (c) by one or more Unitholders present in person or by proxy holding or representing not less than one-tenth in value of the Units represented at the meeting. Unless a poll is so demanded, a declaration by the Chairman that such a resolution has been carried or carried unanimously or by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

11. on a show of hands, every Unitholder who (being an individual) is present in person or by proxy or (being a corporation) is present by one of its officers as its proxy shall have one vote. on a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he is the Unitholder. A person entitled to more than one vote need not use all his votes or cast them the same way.

3rd fold here

Ascott Residence Trust (Ascott Reit)

Website: www.ascottreit.comEmail: [email protected] Code: AscottREIT

Trustee

DBS Trustee Limited12 Marina Boulevard DBS Asia Central @ Marina Bay Financial Centre Tower 3 Singapore 018982Tel: (65) 6878 8888Fax: (65) 6878 3977

Auditors KPMG LLP16 Raffles Quay #22-00 Hong Leong BuildingSingapore 048581Tel: (65) 6213 3388Fax: (65) 6225 0984

Partner-in-charge: Mr Lee Jee Cheng Philip(Since financial year ended 31 December 2011)

Unit Registrar

Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place #32-01 Singapore Land Tower Singapore 048623Tel: (65) 6536 5355Fax: (65) 6536 1360

The Manager

Ascott Residence Trust Management Limited8 Shenton Way#13-01 AXA TowerSingapore 068811Tel: (65) 6389 9388Fax: (65) 6389 9399Company Registration No. 200516209Z

Board of Directors

Mr Lim Jit Poh (Chairman)Mr Lim Ming Yan (Deputy Chairman)Mr Tay Boon Hwee, RonaldMr Ku Moon LunMr S. Chandra DasMr Giam Chin Toon @ Jeremy GiamMr Zulkifli Bin BaharudinMs Jennie ChuaMr Chong Kee Hiong

Audit Committee

Mr Ku Moon Lun (Chairman) Mr S. Chandra Das Mr Giam Chin Toon @ Jeremy Giam

Corporate Disclosure Committee

Mr Lim Jit Poh (Chairman) Mr Tay Boon Hwee, RonaldMr Zulkifli Bin Baharudin Mr Chong Kee Hiong

Executive Committee

Mr Lim Ming Yan (Chairman) Mr Tay Boon Hwee, RonaldMr Chong Kee Hiong

Company Secretary

Ms Kang Siew Fong

CORPORATE INFORMATION

Ascott Residence Trust Management Limitedas Manager of Ascott Residence Trust Company Registration No. 200516209Z

8 Shenton Way #13-01 AXA Tower Singapore 068811Tel: (65) 6389 9388Fax: (65) 6389 9399Email: [email protected]

www.ascottreit.com

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