Page 24 - Report_to_Unitholders_2012

Corporate
Governance
OUR ROLE
Our primary role as the manager of CRCT (Manager) is to set
the strategic direction of CRCT andmake recommendations
to HSBC Institutional Trust Services (Singapore) Limited, in
its capacity as trustee of CRCT (Trustee), on the acquisition,
divestmentorenhancementof theassetsofCRCT inaccordance
with its stated investment strategy. The research, evaluation
and analysis required for this purpose is coordinated and
carried out by us as theManager. We are also responsible for
the systemof riskmanagement and internal controls of CRCT.
As the Manager, we have general powers of management
over the assets of CRCT. Our primary responsibility is to
manage the assets and liabilities of CRCT for the beneft
of the unitholders of CRCT (Unitholders). We do this with a
focus on generating rental income and, where appropriate,
increasing CRCT’s assets over time so as to enhance the
returns from the investments, and ultimately the distributions
and total returns to Unitholders.
Our other functions and responsibilities as the Manager
include:
• using our best endeavours to conduct CRCT’s
businesses in a proper and effcient manner and to
conduct all transactions with, or on behalf of, CRCT
at arm’s length;
• preparing annual property plans for review by our
Directors, including proposals and forecasts on net
income, capital expenditure, sales and valuations,
explanations on major variances to previous forecasts,
written commentaries on key issues and underlying
assumptions on rental rates, occupancy costs and
any other relevant assumptions. These plans explain
the performance of CRCT’s assets;
• ensuring compliance with relevant laws and regulations,
including the Listing Manual of the Singapore Exchange
Securities Trading Limited (SGX-ST) (Listing Manual),
the Code on Collective Investment Schemes (CIS
Code) issued by the Monetary Authority of Singapore
(MAS) and the tax rulings issued by the Inland Revenue
Authority of Singapore on the taxation of CRCT and
its Unitholders;
• at tending to al l regular communicat ions wi th
Unitholders; and
• supervising the property manager, CapitaLand Retail
(Shanghai) Management & Consulting Co., Ltd.
(Property Manager), which performs the day-to-day
property management functions (including leasing,
accounting, marketing, promotion, coordination and
property management) for the CRCT malls namely,
CapitaMall Wangjing, CapitaMall Qibao, CapitaMall
Wuhu, CapitaMall Saihan, CapitaMall Anzhen, CapitaMall
Shuangjing, CapitaMall Erqi, CapitaMall Xizhimen and
CapitaMall Minzhongleyuan, pursuant to the property
management agreements signed for each mall.
CRCT, constituted as a trust, is externally managed by
the Manager and therefore has no personnel of its own.
The Manager appoints experienced and well-qualified
management to run its day-to-day operations. All Directors
and employees of the Manager are remunerated by the
Manager and not CRCT.
The Manager was appointed in accordance with the terms
of the trust deed dated 23 October 2006, as amended or
supplemented (Trust Deed). The Trust Deed also outlines
certain circumstances under which the Manager can be
removed, including by notice in writing given by the Trustee
upon the occurrence of certain events, or by a resolution
passed by a simple majority of Unitholders present and
voting at a meeting of Unitholders duly convened and held
in accordance with the provisions of the Trust Deed.
OURCORPORATEGOVERNANCECULTURE
Strong corporate governance has always been our priority
as the Manager. We recognise that an effective corporate
governance culture is critical to our performance and,
consequently, to the success of CRCT.
We are committed to high standards of corporate governance
and transparency in our management of CRCT and operate
in the spirit of the Code of Corporate Governance (Code)
in the discharge of our responsibilities as the Manager in
our dealings with Unitholders and the other stakeholders.
The Code was revised by MAS in May 2012 and takes
effect in respect of annual reports relating to fnancial years
commencing from 1 November 2012. Nonetheless and in
the spirit of our commitment to high standards of corporate
governance, we have, as far as possible, endeavoured to
comply with the revised Code in FY 2012. The following
paragraphs describe our corporate governance policies
and practices in 2012 as the Manager, with specific
references to the Code. They encompass proactive
measures adopted by us for avoiding situations of confict
and potential conficts of interest, including prioritising the
interests of Unitholders over the Manager’s and ensuring
that applicable laws and regulations are complied with,
so that Unitholders’ interests are best served at all times.
For ease of reference, the relevant provisions of the Code
under discussion are identifed in italics.
(A) BOARD MATTERS
Board’s Conduct of Affairs
Principle 1:
Every company should be headed by an effective Board
to lead and control the company. The Board is collectively
responsible for the long-termsuccess of the company. The
Board works with Management to achieve this objective
and the Management remains accountable to the Board.
Strengthening Fundamentals, Building a Sustainable Future 22