OUR ROLE We, as the manager of CLCT (Manager), set the strategic direction of CLCT and its subsidiaries (CLCT Group) and make recommendations to HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of CLCT (Trustee), on any investment or divestment opportunities for CLCT and the enhancement of the assets of CLCT in accordance with the stated investment strategy for CLCT. The research, evaluation and analysis required for this purpose are coordinated and carried out by us as the Manager. As the Manager, we have general powers of management over the assets of CLCT. Our primary responsibility is to manage the assets and liabilities of CLCT for the benefit of the Unitholders of CLCT (Unitholders). We do this with a focus on generating rental income and enhancing asset value over time so as to maximise returns from the investments, and ultimately the distributions and total returns to Unitholders. Our other functions and responsibilities as the Manager include: (a) using our best endeavours to conduct CLCT’s business in a proper and efficient manner; (b) preparing annual business plans for review by the directors of the Manager (Directors), including forecasts on revenue, net income and capital expenditure, explanations on major variances to previous years’ financial results, written commentaries on key issues and underlying assumptions on rental rates, operating expenses and any other relevant assumptions; (c) ensuring compliance with relevant laws and regulations, including the Listing Manual of 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) (including Appendix 6 of the CIS Code (Property Funds Appendix)), the Securities and Futures Act 2001 (SFA), written directions, notices, codes and other guidelines that MAS may issue from time to time and the tax rulings issued by the Inland Revenue Authority of Singapore on the taxation of CLCT and Unitholders; (d) attending to all regular communications with Unitholders; and (e) supervising the property managers which perform the day-to-day property management functions (including leasing, marketing, promotion, operations coordination and other property management activities) for CLCT’s properties. CLCT, constituted as a trust, is externally managed by the Manager. The Manager appoints experienced and well qualified personnel to run its day-to-day operations. The Manager was appointed in accordance with the terms of the trust deed constituting CLCT dated 23 October 2006 (as amended, varied or supplemented from time to time) (Trust Deed). The Trust Deed 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 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. The Manager is a wholly owned subsidiary of CapitaLand Investment Limited (CLI) which holds a significant unitholding interest in CLCT. CLI is a leading global real estate investment manager, with a vested interest in the long-term performance of CLCT. CLI’s significant unitholding in CLCT demonstrates its commitment to CLCT and CLI’s interest as a Unitholder is aligned with that of other Unitholders. The Manager’s association with CLI provides the following benefits, among other things, to CLCT: (a) strategic pipelines of property assets through, amongst others, CLI’s access to the development capabilities of and pipeline investment opportunities from CapitaLand Group’s development arm; (b) wider and better access to banking and capital markets on favourable terms; (c) fund raising and treasury support; and (d) access to a bench of experienced management talent. CORPORATE GOVERNANCE 110 CAPITALAND CHINA TRUST
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