THE MANAGERCorporate Governance

BOARD MATTERS

REMUNERATION MATTERS

Principles 6, 7 and 8: Procedures for Developing Remuneration Policies, Level and Mix of Remuneration and Disclosure on Remuneration

All fees and remuneration payable to Directors, key management personnel (including the CEO) and staff of the Manager are paid by the Manager.

The Board, assisted by the NRC, has a formal and transparent procedure for developing policies on Director and executive remuneration, recommending the individual Directors’ remuneration packages to the Board for shareholders’ approval as well as determining the remuneration for key management personnel (KMP).

All NRC members are non-executive Directors, the majority of whom (including the NRC chairman) are IDs. Under the NRC’s terms of reference, its key responsibilities are:

1. To oversee the Manager’s leadership development and succession planning for the CEO. The NRC oversees the process for selection of the CEO and reviews annually the career development and succession matters for the CEO. The Manager is committed to developing a strong talent pipeline to sustain its business growth, leveraging on the Sponsor’s established talent identification and succession processes. The NRC decides on the appointment of the CEO; and
2. To review and recommend to the Board, remuneration frameworks for the Board and KMP; including reviewing the specific remuneration package for each Director as well as for the KMP; and the administration of the Manager’s Unit Plans. The Board sets the remuneration policies to support the CLCT Group’s business strategy and deliver sustainable returns to Unitholders. In its deliberations, the NRC also takes into consideration industry practices and norms in compensation to ensure market competitiveness.

The NRC considers all aspects of remuneration, including termination terms, to ensure they are fair, and has access to remuneration consultants for advice on remuneration matters as required. It approves the specific remuneration package for each KMP (including the CEO), and recommends to the Board for endorsement on the specific remuneration package for each Director.

While Provision 6.1 of the Code provides for the NRC to make recommendations to the Board on such matters, the Board is of the view that such matters are best reviewed and determined by the NRC as part of its focused scope and have delegated the decision-making on such matters to the NRC. The NRC reports any decisions made on such matters to the Board. This is accordingly consistent with the intent of Principle 6 of the Code.

In FY 2025, the NRC appointed an independent remuneration consultant, Willis Towers Watson (WTW), to provide professional advice on Board and executive remuneration. The appointed independent remuneration consultant advises the NRC on the compensation of the KMPs including, but not limited to, the reasonableness of compensation levels in relation to the performance achieved, the competitiveness of compensation levels against relevant industry peers, compensation trends and practices around the world. The consultant is not related to the Manager or any Directors, its controlling shareholder or its directors or CLI’s related corporations.

The Remuneration Policy has four key principles:

Business Alignment

1. Focuses on generating rental income and enhancing asset value over time so as to maximise returns from investments and ultimately the distributions and total returns to Unitholders
2. Provides sound and structured funding to ensure affordability and cost-effectiveness in line with performance goals
3. Enhances retention of key talents to build strong organisational capabilities.
4. Strengthens alignment to ESG practices.

Motivate Right Behaviour

1. Pay for performance – align, differentiate and balance rewards according to multiple dimensions of performance
2. Strengthens line-of-sight linking rewards and performance

Fair & Appropriate

1. Ensures competitive remuneration relative to the appropriate external talent markets
2. Manages internal equity such that remuneration is viewed as fair across the CLCT Group
3. Puts significant and appropriate portion of pay-at-risk, taking into account risk policies of the CLCT Group, symmetric with risk outcomes and sensitive to risk time horizon

Effective Implementation

1. Maintains rigorous corporate governance standards
2. Exercises appropriate flexibility to meet strategic business needs and practical implementation considerations
3. Facilitates employee understanding to maximise the value of the remuneration programmes

Under the Remuneration Framework, a significant proportion of the KMP’s, including the CEO’s, total remuneration is in the form of variable compensation, awarded in a combination of short-term, deferred and long-term incentives, to ensure alignment of the CEO’s and KMP’s interests with those of the Unitholders, with an emphasis on linking pay to performance. Performance targets are hence set at realistic yet stretched levels each year to motivate a high degree of business performance with emphasis on both shorter-term and longer-term quantifiable objectives. There are four key components of the remuneration for the CEO and KMP:

Remuneration Policy and Framework

The remuneration policy and framework, which take reference from the compensation framework of CLI, are designed to support the implementation of the CLCT Group’s business strategy and deliver sustainable returns to Unitholders.

The Manager is a subsidiary of CLI which also holds a significant stake in CLCT. This association facilitates the Manager in attracting and retaining better qualified management talent. It further provides an intangible benefit to the employees of the Manager by offering the depth and breadth of experience associated with an established corporate group and enhanced career development opportunities.

A. Salary:

Includes the base salary, fixed allowances and compulsory employer contribution to an employee’s Central Provident Fund (CPF). The base salary is remunerated based on an employee’s competencies, experience, responsibilities and performance. It is typically reviewed on an annual basis to ensure market competitiveness.

B. Performance Bonus:

Using the Balanced Scorecard (BSC) framework, the CLCT Group’s strategies and goals are translated to performance outcomes comprising both quantitative and qualitative targets in the dimensions of REIT Performance, Preparing for Future, Sustainability and Manager’s Financial Health.

These BSC targets are approved by the Board at the start of the year and cascaded down throughout the organisation, thereby creating alignment across the CLCT Group. The performance measures and their relative weights in each dimension are reviewed annually to reflect the CLCT Group’s business priorities and focus for the relevant year.

After the close of each financial year, the Board reviews the CLCT Group’s achievements against the BSC targets and determines the overall performance taking into consideration qualitative factors such as the quality of earnings, operating environment, regulatory landscape and industry trends. In determining the Performance Bonus payout quantum for each KMP, the NRC considers the overall business and individual performance as well as the affordability of the payout to the Manager.

The Performance Bonus is paid out in the form of a cash bonus and deferred Unit awards with senior management grade employees receiving a greater proportion of their payout in deferred Units. Deferred Unit awards are awarded pursuant to the CapitaLand China Trust Management Limited Restricted Unit Plan and vests in three equal annual tranches without further performance conditions. Recipients will receive fully paid Units, their equivalent cash value or combinations thereof. The Unit awards ensure ongoing alignment between remuneration and sustainable business performance.

C. Long-Term Incentives:

The Company has established the CapitaLand China Trust Management Limited Performance Unit Plan (PUP) and CapitaLand China Trust Management Limited Restricted Unit Plan (RUP), together the “Unit Plans”, to promote the alignment of Management’s interests with that of Unitholders and CLCT’s long-term growth and value. The obligation to deliver the Units is satisfied out of existing Units held by the Manager.

The NRC has approved ownership guidelines for senior management to instill stronger identification with the longterm performance and growth of the CLCT Group. Under these guidelines, senior management is required to retain a prescribed proportion of Units received under the Unit Plans worth up to at least one year of basic salary. Units vested pursuant to the Unit Plans may be clawed back in circumstances where the relevant participants are found to be involved in financial misstatement, misconduct, fraud or malfeasance to the detriment of the CLCT Group.

CapitaLand China Trust Management Limited Performance Unit Plan

Pursuant to the PUP, units are awarded to senior management which are conditional on the achievement of targets relating to the following key measurements of wealth creation for Unitholders and commitment of the CLCT Group towards sustainability:

1. Returns: Relative Total Unitholder Return (TUR) of CLCT which is based on the percentile ranking of the TUR of CLCT relative to the constituent REITs in the FTSE ST REIT Index;
2. Portfolio Growth: Net Asset Value per Unit; and
3. Sustainability: Performance outcomes such as green building certification.

The final number of PUP Units to be released will depend on the achievement of pre-determined targets over a threeyear qualifying performance period. This serves to align Management’s interests with that of Unitholders in the longer term and to deter short-term risk taking. No Units will be released if the threshold target is not met at the end of the qualifying performance period. If superior targets are met or exceeded, more Units than the baseline award can be delivered, up to a maximum of 200% of the baseline award. The NRC has the discretion to adjust the number of Units released taking into consideration other relevant quantitative and qualitative factors. Recipients will receive fully paid Units, their equivalent cash value or combinations thereof.

For FY 2025, the relevant award for assessment is the performance achieved by the CLCT Group for the award granted in FY 2023 where the qualifying performance period was FY 2023 to FY 2025. Based on the NRC’s assessment that the performance achieved by the CLCT Group has partially met the pre-determined performance targets for such performance period, the resulting number of Units for the finalised award has been adjusted accordingly to reflect the performance level.

In respect of the Unit awards granted pursuant to the PUP in FY 2024 and FY 2025, the qualifying performance period has not ended as of the date of this Annual Report.

In FY 2021, a one-time Special CLI Founders Performance Share Plan (Special PSP Award) was granted by the CLI Group to selected senior executives within the group (including the Manager) to commemorate its listing, foster a “founders’ mindset” in driving transformation, and retain talent. The grant has a five-year performance period with defined performance parameters which are linked to CLI. Subject to the performance achieved, the award may vest at the end of the third and/or fifth year.

Such compensation is in the long-term interests of CLCT as CLCT is a key part of CLl’s business and ecosystem (and it is also the largest Unitholder of CLCT), and Management’s actions to grow CLCT and drive CLCT’s performance will also have a positive impact on CLI, thus reinforcing the complementary nature of the linked performance between CLCT and CLI. The cost of this one-time award will be borne by the Manager and it will not form a significant part of KMP’s annual remuneration. In addition, a proportion of the Management’s remuneration is paid in the form of Units, which further incentivises the Management to take actions which are beneficial to the Unitholders. Accordingly, the Special PSP Award will not result in the Management prioritising the interest of CLI over that of CLCT given that the bulk of their remuneration is determined based on the evaluation of the performance of CLCT and a proportion of their remuneration comprises Units.

In addition, it should be further noted that under the SFA, the Manager and Directors of the Manager are required to act in the best interest of CLCT and give priority to the interest of CLCT over the interests of the shareholders of the Manager, and this would further mitigate any potential conflicts of interests. Save for the Special PSP Award, the NRC will continue to assess and reward KMP based on the performance of CLCT. Accordingly, the Manager is of the view that there would not be any conflicts of interest arising from the arrangement, nor would the arrangement result in any misalignment of interest with those of Unitholders.

In respect of the Special PSP Award granted in FY 2021, there was no vesting in FY 2025. The next and final vesting, subject to performance conditions being met, will take place at the end of the qualifying performance period in FY 2026. There was no new Special PSP Award in FY 2025.

CapitaLand China Trust Management Limited Restricted Unit Plan

Units awarded pursuant to the RUP may be conditional on pre-determined targets set for a one-year performance period. Prior to FY 2023, these pre-determined targets were based on: (i) NPI of the CLCT Group; and (ii) DPU of the CLCT Group. These performance measures were selected as they are the key drivers of business performance and are aligned to Unitholder value.

The final number of Units to be released will depend on the CLCT Group’s performance against the pre-determined targets at the end of the one-year qualifying performance period. The Units will be released in equal annual tranches over a vesting period of 3 years. No Units will be released if the threshold targets are not met at the end of the qualifying performance period. If superior targets are met or exceeded, more Units than the baseline award can be delivered up to a maximum of 150% of the baseline award. The NRC has the discretion to adjust the number of Units released taking into consideration other relevant quantitative and qualitative factors. Recipients will receive fully paid Units, their equivalent cash value or combinations thereof.

Time-vested awards may also be granted pursuant to the RUP in the form of:

1. deferred Units from the Performance Bonus and vest in three equal annual tranches without further performance conditions with the first tranche delivered in the same year as the year of award; or
2. time-vested restricted awards for the retention of critical talents, or recruitment of new senior executive hires to compensate for the share-based incentives that they may have had to forgo when they left their previous employer to join the Manager. Such awards can vest progressively over periods of up to three years, provided recipients of the awards remain under employment of the CLI Group.

As part of the FY 2025 Performance Bonus, deferred Units will be awarded in FY 2026 pursuant to the RUP, and vest in three equal annual tranches without further performance conditions, with the first tranche to be delivered in FY 2026. There were no performance-based and time-vested restricted awards granted pursuant to the RUP in FY 2025.

D. Employee Benefits:

The benefits provided are comparable with local market practices.

Remuneration of Key Management Personnel

Each year, the NRC evaluates the extent to which each KMP has delivered on the business and individual goals and objectives, and based on the outcome of the evaluation, approves the compensation for the KMP. In such evaluation, the NRC considers whether the level of remuneration is appropriate to attract, retain and motivate the KMP to successfully manage CLCT for the long term. The CEO does not attend discussions relating to his own performance and remuneration.

In determining the remuneration package for each KMP, the NRC takes into consideration appropriate compensation benchmarks within the industry, so as to ensure that the remuneration packages payable to KMP are competitive and in line with the objectives of the remuneration policies.

While the disclosure of, among others, the names, amounts and breakdown of remuneration of at least the top five KMP (who are not Directors or the CEO) in bands no wider than S$250,000 and the aggregate of the total remuneration paid to these KMP would be in full compliance with Provision 8.1 of the Code, the Board has considered carefully and decided that such disclosure would not be in the interests of the Manager or Unitholders due to:

1. the intense competition for talents in the REIT management industry, the Manager is of the view that it is in the interests of Unitholders not to make such disclosures so as to minimise potential staff movement and undue disruption to its key management team;
2. the need to balance the confidential and commercial sensitivities associated with remuneration matters, the Manager is of the view that such disclosures could be prejudicial to the interests of Unitholders;
3. the importance of retaining competent and experienced staff to ensure CLCT’s stability and continuity of business operations, the Manager is of the view that such disclosures may subject the Manager to undue risks, including unnecessary key management turnover; and
4. there being no misalignment between the remuneration of the KMP and the interest of Unitholders. Their remuneration is not borne by the REIT as they are paid out from the fees that the Manager receives (the quantum and basis of which has been disclosed to Unitholders in this Annual Report).

The Manager is of the view that disclosure of the total remuneration of the KMP for FY 2025 together with the breakdown of their remuneration in the manner set out on this page provides a more holistic view and is consistent with the intent of Principle 8 of the Code, and that these and other details in this Report provide sufficient information and transparency to Unitholders on CLCT's remuneration policies for KMP, including the level and mix of remuneration and the procedure for setting remuneration. These disclosures would enable Unitholders to understand the relationship between CLCT’s performance, value creation and the remuneration of KMP. The Manager is of the view that the interests of Unitholders are not prejudiced by the abovementioned deviation from Provision 8.1(b) of the Code, as the remuneration of KMP is aligned to safeguard these interests.

Apart from the KMP and other employees of the Manager, the Manager outsources various other services to a wholly owned subsidiary of CLI (CLI Subsidiary). The CLI Subsidiary provides these services through its employees and employees of CLI Group (together, the Outsourced Personnel). This arrangement is to provide flexibility and maximise efficiency in resource management to match the CLCT’s needs, and to leverage on economies of scale and tap on the management talent of an established corporate group which can offer enhanced depth and breadth of experience. Notwithstanding the outsourcing arrangement, the responsibility for due diligence, oversight and accountability continues to reside with the Board and Management. In this regard, the remuneration of such Outsourced Personnel, being employees of the CLI Subsidiary and CLI Group, is not included as part of the disclosure of remuneration of KMP of the Manager in this Report.

In FY 2025, there were no termination, retirement or post-employment benefits granted to Directors, the CEO and other KMP. There was also no special retirement plan, ‘golden parachute’ or special severance package for any KMP.

There were also no employees of the Manager who were substantial shareholders of the Manager, substantial Unitholders of CLCT or immediate family members of a Director, the CEO, any substantial shareholder of the Manager or any substantial Unitholder of CLCT whose remuneration exceeds S$100,000. “Immediate family member” refers to the spouse, child, adopted child, step-child, sibling or parent of the individual.

Remuneration for Non-Executive Directors

The non-executive Directors’ fees are paid by the Manager and the FY 2025 fees, together with a breakdown of the components, are set out in the Non-Executive Directors’ Remuneration Table on page 79 of this Annual Report.

The remuneration policy for non-executive Directors is based on a scale of fees divided into basic retainer fees for serving as Director and additional fees for serving on Board Committees. There were no attendance fees payable, save for in-person participation by Directors at Board and Board Committee meetings that require Directors to travel overseas. Directors’ fees are paid to non-executive Directors on a current year basis.

The CEO, who is an executive director, is remunerated as part of the Manager’s KMP and does not receive any Director’s fees. The non-executive Directors who are employees of the CLI Group also do not receive any Directors’ fees.

The non-executive Directors’ fee structure and Directors’ fees are reviewed and benchmarked against the REIT industry annually, taking into account the effort, time spent and responsibilities on the part of the non-executive Directors in light of the scale, complexity and geographic scope of the CLCT Group’s business. The remuneration of non-executive Directors is reviewed from time to time to ensure that it is appropriate to attract, retain and motivate the non-executive Directors to provide good stewardship of the Manager and CLCT. The non-executive Directors’ remuneration (including any Unit awards granted under the RUP in lieu of cash) does not include any performance-related elements. The framework for the non-executive Directors’ fees has remained unchanged from that of the previous financial year.

The non-executive Directors’ fees are paid in cash (about 80%) and in the form of Units (about 20%), save that a nonexecutive Director (not being an employee of the CLI Group) who steps down from the Board during a financial year will be paid fees fully in cash. The Manager believes that the payment of a portion of the non-executive Directors’ fees in Units will serve to align the interests of non-executive Directors with the interests of Unitholders and CLCT’s long-term growth and value. The payment of non-executive Directors’ fees in Units is satisfied from the Units held by the Manager. No individual Director is involved in any decision of the NRC relating to his/ her own remuneration.

In order to encourage the alignment of the interests of the non-executive Directors with the interests of Unitholders, a non-executive Director is required to hold a number of Units worth at least one year of the basic retainer fee or the total number of Units awarded, whichever is lower, at all times during his/her Board tenure.

ACCOUNTABILITY AND AUDIT

Principle 9: Risk Management and Internal Controls

The Manager maintains adequate and effective systems of risk management and internal controls (including financial, operational, compliance and information technology (IT) controls) to safeguard Unitholders’ interests and the CLCT Group’s assets.

The Board has overall responsibility for the governance of risk and oversees the Manager in the design, implementation and monitoring of the risk management and internal controls systems. The ARC assists the Board in carrying out the Board’s responsibility of overseeing CLCT’s risk management framework and policies for CLCT Group.

Under its terms of reference, the scope of the ARC’s duties and responsibilities includes:

1. making recommendations to the Board on the Risk Appetite Statement (RAS) for CLCT Group;
2. assessing the adequacy and effectiveness of the risk management and internal controls systems established by the Manager to manage risks;
3. overseeing the formulation, updating and maintenance of an adequate and effective risk management framework, policies and strategies for managing risks that are consistent with CLCT Group’s risk appetite and reports to the Board on its decisions on any material matters concerning the aforementioned;
4. making the necessary recommendations to the Board such that an opinion regarding the adequacy and effectiveness of the risk management and internal controls systems can be made by the Board in the annual report for CLCT in accordance with the Listing Manual and the Code; and
5. considering and advising on risk matters referred to it by the Board or Management, including reviewing and reporting to the Board on any material breaches of the RAS, any material non-compliance with the approved framework and policies and the adequacy of any proposed action.

The Manager adopts an Enterprise Risk Management (ERM) Framework which sets out the required environmental and organisational components for managing risks in an integrated, systematic and consistent manner. The ERM Framework and related policies are reviewed annually.

As part of the ERM Framework, the Manager undertakes and performs a Risk and Control Self-Assessment (RCSA) annually to identify material risks along with their mitigating measures. The adequacy and effectiveness of the systems of risk management and internal controls are reviewed at least annually, by Management, the ARC and the Board, taking into account the best practices and guidance in the Risk Governance Guidance for Listed Boards issued by the Corporate Governance Council and the Listing Manual.

The CLCT Group’s RAS, which incorporates the CLCT Group’s risk limits, addresses the management of material risks faced by the CLCT Group. Alignment of the CLCT Group’s risk profile to the RAS is achieved through various communication and monitoring mechanisms (including key risk indicators set for Management) put in place across the various functions within the Manager. More information on the Manager’s ERM Framework including the material risks identified can be found in the Risk Management section on pages 80 to 84 of this Annual Report.

The internal and external auditors conduct reviews of the adequacy and effectiveness of the material internal controls (including financial, operational, compliance and IT controls) and risk management systems. This includes testing, where practicable, material internal controls in areas managed by external service providers. Any material non-compliance or lapses in internal controls together with corrective measures recommended by the internal and external auditors are reported to and reviewed by the ARC. The ARC also reviews the adequacy and effectiveness of the measures taken by the Manager on the recommendations made by the internal and external auditors in this respect.

The Board has received assurance from the CEO, the Chief Financial Officer (CFO) and the CFO designate of the Manager that the financial records of the CLCT Group have been properly maintained and the financial statements for FY 2025 give a true and fair view of the CLCT Group’s operations and finances. It has also received assurance from the CEO, the CFO and the CFO designate and the relevant KMP who have responsibility regarding various aspects of risk management and internal controls that the systems of risk management and internal controls within the CLCT Group are adequate and effective to address the risks (including financial, operational, compliance and IT risks) which the Manager considers relevant and material to the current business environment. The CEO, the CFO and the relevant KMP of the Manager have obtained similar assurances from the respective risk and control owners. In addition, for FY 2025, the Board received half-yearly certification by Management on the integrity of financial reporting and the Board provided a negative assurance confirmation to Unitholders as required by the Listing Manual.

Based on the ERM Framework established and the reviews conducted by Management and both the internal and external auditors, as well as the assurance from the CEO, the CFO and the CFO designate, the Board is of the opinion that the systems of risk management and internal controls within CLCT Group are adequate and effective to address the risks (including financial, operational, compliance and IT risks) which CLCT Group considers relevant and material to the current business environment as at 31 December 2025. The ARC concurs with the Board in its opinion. No material weaknesses in the systems of risk management and internal controls were identified by the ARC and the Board in the review for FY 2025.

The Board notes that the systems of risk management and internal controls established by the Manager provide reasonable assurance that the CLCT Group, as it strives to achieve its business objectives, will not be significantly affected by any event that can be reasonably foreseen or anticipated. 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, losses, fraud or other irregularities.

Principle 10: Audit and Risk Committee

As at the date of this Annual Report, the ARC comprises five members, all of whom (including the ARC chairman) are IDs. They all bring recent and relevant managerial and professional expertise in accounting, auditing and related financial management domains. The majority of the ARC have a background in accounting or finance. The ARC does not comprise former partners of the external auditor, Deloitte & Touche (Deloitte), (a) within a period of 2 years commencing from the date of their ceasing to be partners of Deloitte; or (b) who have any financial interest in Deloitte.

The ARC has explicit authority to investigate matters within its terms of reference. Management gives the fullest cooperation in providing information and resources to the ARC, and carrying out its requests. The ARC has direct access to the internal and external auditors and full discretion to invite any Director or KMP to attend its meetings. Similarly, internal and external auditors have unrestricted access to the ARC.

Under its terms of reference, the ARC’s scope of duties and responsibilities includes:

1. reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of CLCT Group and any announcements relating to the CLCT Group’s financial performance;
2. reviewing and reporting to the Board at least annually the adequacy and effectiveness of the Manager’s internal controls and risk management systems;
3. reviewing the scope and results of the internal audit and external audit, and the adequacy, effectiveness, independence and objectivity of the Manager’s internal audit function and the external auditors respectively;
4. making recommendations to the Board on the proposals to Unitholders on the appointment, re-appointment and removal of the external auditors, and approving remuneration and terms of engagement of the external auditors;
5. reviewing and approving processes to regulate transactions between an interested person (as defined in Chapter 9 of the Listing Manual) and/or interested party (as defined in the Property Funds Appendix) (each, an Interested Person) and CLCT and/or its subsidiaries (Interested Person Transactions), to ensure compliance with the applicable regulations. The regulations include the requirements that Interested Person Transactions (IPTs) are on normal commercial terms and are not prejudicial to CLCT’s interests and its minority Unitholders. In respect of any property management agreement which is an IPT, the ARC also carries out reviews at appropriate intervals to satisfy itself that the Manager has reviewed the property manager’s compliance with the terms of the property management agreement and has taken remedial actions where necessary; and
6. reviewing the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, and independently investigated, for appropriate follow up action to be taken.

The ARC also reviews the assurance from the CEO, the CFO and the CFO designate on the financial records and financial statements.

While the external auditors had provided non-audit services in FY 2024, they did not provide any non-audit services in FY 2025. The ARC reviewed the independence of the external auditors, taking into consideration, among other factors, CLCT’s relationships with the external auditors in FY 2025, the non-audit services provided, as well as the processes and safeguards adopted by the Manager and the external auditors relating to audit independence. Based on the review, the ARC is satisfied that the external auditors are independent, and such independence is not affected by the provision of the non-audit services. The external auditors have also provided confirmation of their independence to the ARC. The audit and audit-related fees paid or payable to the external auditors for FY 2025 amounted to S$792,143. The non-audit fees paid to the external auditors in FY 2025 amounted to S$35,000 for the non-audit services which they had provided in FY 2024.

The ARC met five times in FY 2025. The ARC reviews CLCT’s half-yearly financial statements, including the relevance and consistency of accounting principles adopted and any significant financial reporting issues, and the quarterly business updates between such announcements, which are presented to the Board for approval.

Key Audit Matter

In FY 2025, the ARC also reviewed and assessed the adequacy and effectiveness of the internal controls and risk management systems established by the Manager to address the material risks faced by the CLCT Group, taking into consideration the outcome of reviews conducted by Management and both the internal and external auditors, as well as the assurances from the CEO, the CFO and the CFO designate. The ARC meets internal and external auditors, separately and without Management’s presence at least once a year. In FY 2025, the ARC discussed the financial reporting process, internal controls and risk management systems, and significant comments and recommendations by the auditors at the meetings.

In the review of the CLCT Group’s financial statements for FY 2025, the ARC discussed with Management the accounting principles applied and their judgement of items that might affect the integrity of the financial statements and also considered the clarity of key disclosures in the financial statements. The ARC reviewed, amongst other matters, the following key audit matter as reported by the external auditors for FY 2025.

The Manager confirms, on behalf of CLCT, that CLCT complies with Rules 712 and 715 of the Listing Manual in relation to the appointment of its external auditors.

Internal Audit (IA)

The Manager has an internal audit function supported by CLl’s Internal Audit Department (CLI IA). The head of CLI IA is Dr. Jenny Tan. CLI IA is independent of the activities it audits and has unfettered access to the CLCT Group’s documents, records, properties and employees, including access to the ARC, and has appropriate standing with respect to the Manager. CLI IA’s primary reporting line for CLCT Group is the ARC⁷.

The ARC monitors and assesses the role and effectiveness of the IA function through the review of IA’s processes from time to time. The ARC also reviews to ensure that the IA function is adequately resourced and skilled in line with the nature, size and complexity of the Manager and CLCT’s business.

In respect of FY 2025, the ARC reviewed the IA function and is satisfied that the internal audit function is adequately resourced, effective and independent. In addition, CLI IA has passed the quality assurance review conducted by an external independent auditor.

CLI IA formulates its internal audit plan in consultation with, but independently of, Management. Its plan is submitted to the ARC for approval prior to the beginning of each year. CLI IA also reviews compliance with the CLCT Group’s policies, procedures and regulatory responsibilities, performed in the context of financial and operational and information system reviews. CLI IA is guided by, the International Standards for the Professional Practice of Internal Auditing (Standards) developed by The Institute of Internal Auditors (IIA), and has incorporated these Standards into its audit practices.

During FY 2025, the ARC reviewed the results of audits performed by CLI IA based on the approved audit plan. All findings are reported to Management and the ARC, with emphasis on any significant findings. CLI IA also reviews the status of implementation of the audit recommendations, and reports the same to Management and the ARC. The ARC reviewed reports on whistleblower complaints reviewed by CLI IA to ensure independence in its thorough investigation and adequate follow up. The ARC also received reports on IPTs reviewed by CLI IA that they were on normal commercial terms and are not prejudicial to the interests of CLCT and its minority Unitholders.

CLI IA employs suitably qualified professional staff with the requisite skill sets and experience, including IT auditors with the relevant professional IT certifications who are also members of the ISACA Singapore Chapter, a professional body administering information systems audit and information security certifications that is headquartered in the United States of America. CLI IA provides training and development opportunities for its staff to ensure their technical knowledge and skill sets remain current and relevant.

UNITHOLDER RIGHTS AND ENGAGEMENT

Principles 11, 12 and 13: Shareholder Rights and Conduct of General Meetings, Engagement with Shareholders, Managing Stakeholder Relationships

The Manager is committed to treating all Unitholders fairly and equitably. All Unitholders enjoy specific rights under the Trust Deed and the relevant laws and regulations.

General Meetings

CLCT encourages Unitholder participation and voting at general meetings. Unitholders may download the Annual Report and notice of the general meeting from CLCT’s website at www.clct.com.sg (Website) and SGXNet. The notice of the general meeting, proxy form and request form for printed annual report/circular are mailed to Unitholders. More than the legally required notice period for general meetings is generally provided. To safeguard the Unitholders’ interests and rights, a separate resolution is proposed for each substantially separate matter to be approved at a general meeting, unless the issues are interdependent and linked to form one significant proposal. Where the resolutions are bundled, the reasons and material implications are explained in the notice of general meeting to enable Unitholders to make an informed decision.

In FY 2025, CLCT held an annual general meeting (AGM) on 21 April 2025, and an extraordinary general meeting (EGM) on 29 July 2025, by way of physical meetings (collectively, the 2025 General Meetings). Unitholders submitted questions to the chairman of the meeting in advance of the 2025 General Meetings, and substantial and relevant questions received from Unitholders were addressed before the 2025 General Meetings via publication on the Website and SGXNet, or at the meeting. Unitholders could vote at the 2025 General Meetings themselves or through duly appointed proxy(ies). All Directors attended the 2025 General Meetings. The upcoming AGM to be held on 21 April 2026 will be a physical meeting. Further information on the arrangements relating to 2026 AGM is provided in the notice of AGM.

Unitholders are entitled to attend, participate and vote at general meetings (including through the appointment of proxies or representatives) and communicate their views, ask questions and discuss with the Board and Management on matters affecting CLCT. Representatives of the Trustee, Directors (including the chairmen of the Board Committees), KMP and CLCT’s external auditors, attend to address any queries from Unitholders. Presentation materials for the general meetings are available on the Website and SGXNet.

To ensure transparency in the voting process and better reflect Unitholders’ interests, CLCT conducts electronic poll voting for all the resolutions proposed at general meetings. One Unit is entitled to one vote. Voting procedures and the rules governing general meetings are explained and votes cast on each resolution, and the respective percentages, are displayed live on-screen at the general meetings. An independent scrutineer is also appointed to validate the vote tabulation procedures. The results of the votes cast on the resolutions are also announced on SGXNet after the general meetings.

Provision 11.4 of the Code requires an issuer’s constitution to allow for absentia voting at general meetings. CLCT’s Trust Deed currently does not permit Unitholders to vote at general meetings in absentia (such as via mail or email). The Manager is of the view that although this may be considered a partial deviation from Provision 11.4 of the Code as Unitholders or their duly appointed proxy(ies) are still required to attend the general meeting virtually in order to avail themselves of real-time remote electronic voting, Unitholders nevertheless now have greater opportunities (in addition to the proxy regime) to communicate their views on matters affecting CLCT even when they are not physically in attendance at general meetings. The Manager will consider amendments to CLCT’s Trust Deed to permit absentia voting after it has carried out careful study and is satisfied that the integrity of information and the authentication of Unitholders’ identities will not be compromised, and after the implementation of legislative changes to recognise methods of voting without the need for Unitholders or their proxy(ies) to be present in-person or virtually.

Unitholders can access the minutes of the general meetings on the Website. Accordingly, the rights of the Unitholders are consistent with the intent of Principle 11 of the Code.

Distribution Policy

CLCT’s distribution policy is to distribute at least 90.0% of its taxable income (other than gains from the sale of real estate properties by CLCT which are determined to be trading gains), with the actual level of distribution to be determined at the Manager’s discretion. Distributions are generally paid within 35 market days after the relevant record date.

Timely Disclosure of Information

The Manager is committed to keeping all Unitholders and other stakeholders, including analysts and the media informed of CLCT’s performance and any changes in the CLCT Group or its business which is likely to materially affect the price or value of the Units, by posting announcements and news releases on SGXNet and the Website in compliance with regulatory reporting requirements, on a timely and consistent basis.

In FY 2025, the Manager provided Unitholders with half-year and full-year financial statements within the relevant periods under the Listing Manual. Such financial statements were reviewed and approved by the Board before being announced on SGXNet and accompanied by news releases. In presenting the financial statements to Unitholders, the Board sought to provide Unitholders with a balanced, clear and comprehensible assessment of CLCT and the CLCT Group’s performance, position and prospects.

The Manager provides Unitholders, on a voluntary basis, with quarterly business updates between the announcement of half-yearly and full-year financial statements, which contain, information on the CLCT Group’s key operating and financial metrics. In addition, the Manager also keeps CLCT’s Unitholders, stakeholders and analysts informed of the performance and changes in the CLCT Group or its business which would likely materially affect the price or value of the Units. The Manager also conducts analysts’ and media briefings, and uploads the briefing materials used on SGXNet.

The Manager has a formal policy on corporate disclosure controls and procedures to ensure that CLCT complies with its disclosure obligations under the Listing Manual. These controls and procedures incorporate the decision making process and an obligation on internal reporting of the decisions made.

Investor Relations

The Manager has an Investor Relations (IR) function, supported by CLI's Listed Funds IR department, which facilitates effective communication with Unitholders and analysts. The Manager also has a corporate communications function supported by CLl’s Group Communications department which works closely with the media and oversees CLCT’s media communications efforts. The Manager maintains the Website which contains information on CLCT including its Prospectus, announcements and news releases, financial statements and investor presentations.

The Manager actively engages with Unitholders to solicit and understand their views, and has a Unitholders’ Communication and Investor Relations Policy (IR Policy) to promote regular, effective and fair communications with Unitholders. The IR Policy, which sets out the mechanism through which Unitholders may contact the Manager with questions and through which the Manager may respond to such questions, is available on the Website.

Managing Stakeholder Relationships

The Board’s role includes considering sustainability as part of its strategy formulation. The Manager adopts an inclusive approach for CLCT by considering and balancing the needs and interests of material stakeholders. The Manager is committed to sustainability and incorporates the key principles of environmental and social responsibility, and corporate governance in CLCT’s business strategies and operations. The Manager has arrangements to identify, engage and manage relationships with material stakeholder groups from time to time, and gathers feedback on the sustainability issues most important to them. The Manager also updates the Website with current information on its sustainability approach and stakeholder engagements, to facilitate communication and engagement with CLCT’s stakeholders.

The rights of CLCT’s creditors, which comprise of lending banks, are protected with a well-spread debt maturity, healthy interest coverage ratio and gearing ratio below the regulated limit. Regular internal reviews are also conducted to ensure that various capital management metrics remain compliant with loan covenants.

ADDITIONAL INFORMATION

Executive Committee

The Board has also established an EC, which oversees the day-to-day activities of the Manager and CLCT. The EC is guided by its term of reference. In particular, the EC approves specific budgets for capital expenditure on development projects, acquisitions and enhancements/upgrading of properties within its approved financial limits. The EC also reviews management reports and operating budgets and awards contracts for development projects. The EC met once in FY 2025. The members of the EC also meet informally during the year.

Dealings with Interested Persons

Review Procedures for Interested Person Transactions

The Manager has internal control procedures to ensure that IPTs are in compliance with Chapter 9 of the Listing Manual and the Property Funds Appendix. The Manager would have to demonstrate to the ARC that such IPTs are undertaken at arm’s length, on normal commercial terms and are not prejudicial to CLCT and Unitholders’ interests, which may include obtaining (where practicable) third party quotations or valuations from independent valuers (in accordance with the Listing Manual and Property Funds Appendix).

A summary of all IPTs entered into within the financial year will be reviewed by the Trustee and the ARC on an annual basis. Guidelines and procedures established to monitor IPTs will be audited by CLI IA annually.

The Manager maintains a register to record all IPTs entered into by CLCT (and the basis on which they are entered into, including supporting documents obtained to support such basis). All IPTs of S$100,000 and above are subject to regular and periodic reviews by the ARC. The review includes an examination of the nature of the transaction and its supporting documents, or such other information deemed necessary by the ARC. ARC members with an interest in any IPT are required to abstain from the review and approval process in relation to that transaction. Details of all IPTs (except those under S$100,000) in FY 2025 are disclosed on page 170 of this Annual Report.

Dealing with Conflicts of Interest

The following principles and procedures have been established to deal with potential conflicts of interest which the Manager (including its Directors, KMP and employees) may encounter in managing CLCT:

1. the Manager is a dedicated manager to CLCT and will not manage any other REIT or be involved in any other real property business;
2. all resolutions at meetings of the Board in relation to matters concerning CLCT must be decided by a majority vote of the Directors, including at least one ID;
3. in respect of matters in which CLI and/or its subsidiaries have an interest, whether direct or indirect, any nominees appointed by CLI and/or its subsidiaries to the Board will abstain from voting. In such matters, the quorum must comprise a majority of IDs and shall exclude such nominee Directors of CLI and/or its subsidiaries;
4. in respect of matters in which a Director or his/her associates have an interest, whether 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);
5. 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 CLCT with an affiliate of the Manager, the Manager is obliged to consult with a reputable law firm (acceptable to the Trustee) which shall provide legal advice on the matter. If the said law firm is of the opinion that the Trustee, on behalf of CLCT, has a prima facie case against the party allegedly in breach under such agreement, the Manager is obliged to pursue the appropriate remedies under such agreement; and
6. at least one-third of the Board shall comprise IDs.

In respect of voting rights where the Manager would face a conflict between its own interests and that of Unitholders, the Manager shall exercise such voting rights according to the Trustee’s discretion.

Dealings in Securities

The Manager has a securities trading policy for the officers and employees which applies the best practice recommendations in the Listing Manual. Directors and employees of the Manager and certain relevant executives of the CLI Group, must refrain from dealing in CLCT’s securities (i) while in possession of material unpublished price sensitive information, and (ii) during the one-month period before the announcement of CLCT’s half-year and full-year financial statements. The Manager also does not deal in CLCT’s securities during the black-out period.

In addition, certain designated employees and “Key Insiders” are prohibited from dealing in CLCT’s securities, except during the open trading window (a period of 45 calendar days commencing from market open on trading day following CLCT's financial results announcements), provided that they are not in possession of undisclosed material or price-sensitive information. They must obtain approval for any trades outside the open trading window, from Compliance, in consultation with the CEO (in the case of an employee). They must also notify Compliance of any trade in CLCT’s securities during the open trading window within 5 business days. The policy also provides for the Manager to maintain a list(s) of persons who are privy to price-sensitive information relating to the CLCT Group where required under the Listing Manual. Directors and employees of the Manager are discouraged from trading on short term or speculative considerations, and are prohibited from using information obtained through their employment to trade in securities of other entities. They are also required to hold securities for a minimum period of 90 calendar days.

Directors must notify the Manager of their interest in CLCT’s securities within 2 business days after becoming a Director or acquiring such interest, and notify of any change in their interests within 2 business days. Dealings by the Directors are disclosed in accordance with the SFA and the Listing Manual. In FY 2025, based on the information available to the Manager, save as disclosed in accordance with such requirements and other than the Units awarded as part payment of Directors’ fees and CEO’s remuneration under the Unit Plans, there were no dealings by the Directors in CLCT’s securities.

Code of Business Conduct

The Manager is committed to conducting business with integrity and upholding the highest ethical standards. Our Ethics and Code of Business Conduct covers business ethics, confidentiality, conflict of interest, conduct and work discipline. The Manager maintains a zero-tolerance stance against fraud, bribery and corruption, which applies to all employees and extends to its business dealings with third parties.

The Manager adopts CLI Group’s Global Anti-Bribery & Corruption Policy and Global Fraud Policy supported by related internal policies and guidelines. These policies provide clear expectations for all employees to maintain the highest legal and ethical standards in their work and business dealings.

To detect and prevent fraud and misconduct, the Manager adopts fair and transparent practices, maintains documented policies and internal controls, and fosters a culture of integrity grounded in its core values. These expectations are regularly reinforced by Management during staff engagements.

Employees receive mandatory training on relevant policies, and must provide an annual declaration to uphold CLI Group’s values and refrain from any unethical or corrupt practices.

Whistleblowing Policy

The Manager has a whistleblowing policy, which provides the Manager’s employees and parties who have dealings with the Manager with well-defined, accessible and trusted procedures to report any suspected fraud, corruption, dishonest practices, misconduct, wrongdoing and/or other improprieties relating to the Manager and its officers, and provides for independent investigation of any reported incidents made in good faith and appropriate follow up actions. It ensures that employees or external parties making any reports in good faith will be treated fairly and the whistleblower’s identity will be kept confidential. The Manager is committed to ensuring protection of the whistleblower against detrimental or unfair treatment. The ARC is responsible for oversight and monitoring of whistleblowing, and reviews all whistleblowing complaints made in good faith at its scheduled meetings. Independent, thorough investigation and appropriate follow up actions are taken. The outcome of each investigation is reported to the ARC. The whistleblowing policy is publicly disclosed on the Website and made available to all employees.

Business Continuity Management

The Manager has established a Business Continuity Management System (BCMS) and is committed to maintaining resilience in our business operations and minimising the impact of potential disruptions on our employees, stakeholders and businesses. The BCMS aims to protect our key stakeholders, data, assets and business activities by embedding business continuity practices in our operations. It outlines clear governance structures, roles and responsibilities, and fostering a resilient culture through training and awareness programmes. Business continuity plans, such as Crisis Management Plan and IT Disaster Recovery Plan, are in place to respond and recover from crises. Regular exercises and continuous improvement reviews are carried out to maintain BCMS’ effectiveness and relevance.

Financial Crime and Third Party Risk Management

The Manager has established a robust and integrated framework to prevent and mitigate financial crime and integrity risks, underpinned by CLI Group’s Anti-Money Laundering and Countering the Financing of Terrorism Policy, Global Sanctions Compliance Policy, Global Anti-Bribery & Corruption Policy and Third Party Due Diligence Policy. Together, these policies set out CLCT Group’s risk-based approach to identifying, assessing and managing risks relating to money laundering, terrorist financing, sanctions, bribery and the use of third parties across its operations and investments. The framework applies on a group-wide basis and covers customer and third-party onboarding, screening, ongoing monitoring and escalation of red flags, with clearly defined roles and responsibilities under CLI Group’s governance and three lines of defence model. These policies are subject to periodic review and updates to remain aligned with evolving regulatory requirements and industry standards, and are supported by training and monitoring programmes to promote consistent implementation across CLCT Group.