| Temasek Review 2011

We strive to deliver sustainable long term value for our stakeholders on a risk-adjusted basis.

We have a balanced exposure between mature economies and growth regions. Our exposure to the mature economies of Singapore, Japan & Korea, Australia & New Zealand, and North America & Europe was 55%.

The rest of Asia and other growth regions remain a key focus for us. Excluding Singapore and Japan & Korea, Asia constituted 42% of our portfolio exposure by underlying assets, while Latin America, Africa, Central Asia & the Middle East grew from 2% to 3% of our portfolio.

Four themes guide our investment activities:

• Transforming Economies
• Growing Middle Income Populations
• Deepening Comparative Advantages
• Emerging Champions

These themes remain relevant as economies continue to globalise and rebalance despite medium term challenges in the mature economies and transformation risks in the growth regions.

Investments made since 2002, when we stepped up our exposure in Asia, delivered annualised returns of almost 21% to Temasek.

Portfolio ValueNine-Year Annualised Returns to Temasek

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Investing for Value

We continue to build our portfolio for tomorrow with the aim of delivering sustainable long term returns on a risk-adjusted basis. We seek to invest directionally into longer term trends.

As an active investor, we have the flexibility of taking concentrated positions, investing with a long or short horizon, or remaining in cash when it makes sense. Our decisions to invest, divest or hold are based on our value tests and market opportunities.

As an active shareholder, we identify sustainable value creation opportunities to uplift our portfolio over the long term. We engage our portfolio companies to share strategic perspectives, foster robust governance and encourage a strong culture of co-ownership, excellence and integrity. The boards and management of our portfolio companies are responsible for their strategies as well as day-to-day operations and commercial decisions.

In line with our risk-return stance, we review and rebalance our portfolio regularly. We have the flexibility to shift the weight of our portfolio at any time, and act on opportunities as and when they arise.

Where relevant, we partner with like-minded co-investors to broaden perspectives, share expertise and enhance opportunities for value creation.