Page 59 - TreasuryChinaTrust

Treasury China Trust Annual Report 2010 38

CORPORATE GOVERNANCE REPORT

REMUNERATION MATTERS

COCG Code Principle 7: Procedures for developing remuneration policies

TCT, constituted as a business trust, is externally managed by the Trustee-Manager and accordingly, it has no personnel of its own. All directors and employees of the Trustee-Manager are remunerated by the Trustee-Manager and not TCT. For this reason, a Remuneration Committee has not been established. The Board performs this function in accordance with the best practice recommended by the Code of Corporate Governance 2005.

The Board sought independent advice on market rates in respect of Directors’ fees for a Trustee-Manager of a Singapore Business Trust and, having considered the findings of this survey, are satisfied that the Board is remunerated to a level to attract, retain and motivate directors needed to ensure the success of TCT. The Directors’ remuneration and fees are borne by the Trustee-Manager and not TCT.

The Board has established a Unit Option Scheme Committee whose responsibility is to administer the TCT Unit Option Scheme in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Committee shall participate in any deliberation or decision in respect of TCT Options to be granted to him or held by him. The Unit Option Scheme Committee has the powers to determine, amongst other things, the following:

a) persons to be granted TCT Options; b) number of TCT Options to be offered; and

c) recommendations for modifications to the TCT Unit Option Scheme.

The Committee consists of Mr. Leckie, who acts as Chairman, Mr. Horney, Mr. Jen and Mr. Wong. All of the Committee members, with the exception of Mr. Horney, are considered independent for the purposes of the Code of Corporate Governance 2005.

The Trustee-Manager believes that the TCT Unit Option Scheme is important in that it helps to reward and retain quality staff in the competitive real estate market in China.

COCG Code Principle 8: Level and mix of remuneration

The remuneration of the Trustee-Manager is provided for in Clause 13 of the Trust Deed constituting TCT dated 19 May 2010.

COCG Code Principle 9: Disclosure on remuneration

The fee structure, which includes management fees, trustee fees, acquisition and divestment fees, is disclosed in Note 1 of the Financial Statements of TCT in the Annual Report.

ACCOUNTABILITY AND AUDIT COCG Code Principle 10: Accountability

The Board of the Trustee-Manager is responsible for providing a balanced assessment of TCT’s performance, position and prospects, including interim and other price sensitive public reports and reports to regulators, if required. Management provides the Board with quarterly reports on TCT’s performance, position and prospects. These reports consist of detailed management accounts, budgets, portfolio performance information and economic information relating to the Chinese economy. In addition to this, ad-hoc reports are provided to the Board by management from time to time on matters considered to be of importance, and management work with the Board to answer any queries or provide additional information as may be requested by the Board.

Financial reports and other financial and non-financial information are disseminated to Unitholders through announcements via SGX-ST, press releases, TCT’s website, media and briefings to analysts. The annual report for TCT will be sent to Unitholders no later than four months from the end of each financial year.

COCG Code Principle 11: Audit Committee

The Audit Committee is appointed by the Board of the Trustee-Manager and is composed of four non-executive members, three of whom (including the Chairman of the Audit Committee) are required to be directors independent from management and business relationships with the Trustee-Manager. The members of the Audit Committee are:

1. Mr. Jen Shek Voon (Chairman)

2. Mr. Stuart Leckie 3. Mr. Wong Fong Fui 4. Mr. Raymond Horney