On behalf of the Board, I present the Keppel Land Group report for the year ended 31 December 2001. Financial Performance 2001 was a difficult year for the Group, worsened by the September 11 attacks in the US. The rapid deterioration of the US economy quickly spiralled into a global downturn, tripping the fragile recovery of Asian economies. With most of its major markets affected, Singapore slipped into its worst recession in four decades.

Chairman Lim Chee Onn

Like many companies, Keppel Land was hit by the weaker economic prospects in Singapore and the region. With lower contribution from property trading due to fewer residential sales, revenue fell 40% to $300.5 million. Higher profit contribution from property investment from the mostly fully-occupied office buildings could not offset the shortfall from property trading.

Against a soft residential market in Singapore, the Company made provisions for a write-down of $455.1 million in respect of its landbank. As a result, the Group incurred a loss of $366.5 million after tax and minority interests. This is in contrast with a profit of $122.1 million in 2000. Had it not been for the provisions, the Group’s profit for 2001 would have been $88.6 million.

As capital values of Singapore office buildings fell, the Company wrote down the value of its investment buildings by $239 million, after taking into account minority interests’ share and a surplus of $51 million not taken up in 2000. This revaluation deficit was charged against the previous years’ surpluses of $898 million accumulated under capital reserves in the balance sheet.

With the provisions and revaluation adjustments made, shareholders’ funds declined from $2.24 billion to $1.62 billion at the end of 2001. Consequently, the Company’s net tangible asset per share fell to $2.28 from $3.16 a year ago. The Group’s debt-equity ratio including minority interests rose to 1.28 from 0.83 the year before.

The effective tax rate for the Group before provisions was 24.5% in 2001, unchanged from the previous year.

Proposed Dividend

The Board is recommending a final gross dividend of 6% or 3 cents per share less tax, amounting to $16.1 million for approval at the Annual General Meeting on 16 May 2002. If approved, this dividend will be paid on 6 June 2002.

Despite the difficult year, the dividend rate has been maintained at the same level as for the previous year.