Corporate Governance

CIT, constituted as a trust, is externally managed by CITM. CIT has no personnel of its own. CITM appoints qualified and experienced executives to manage its operations.

The Manager is committed to maintaining high standards of corporate governance in line with the Singapore Code of Corporate Governance. The Board and Management believe that sound corporate governance policies and practices are essential to protect the assets of CIT and interests of its Unitholders and to enhance the value of Unitholders' investment in CIT.

The Manager has general powers of management over the real estate and real estate related assets of CIT. The Manager's main responsibility is to manage CIT's assets and liabilities for the benefit of the Unitholders. It sets the strategic direction of CIT and gives recommendations to the Trustee on the acquisition, property development, divestment and/or enhancement of assets of CIT in accordance with its stated investment strategy. The Manager is also responsible for the capital and risk management of CIT. In executing its strategy, the Manager is responsible for ensuring compliance with the applicable provisions of the SFA and all other relevant legislation, including the Rules of the SGX-ST Listing Manual ("Listing Manual"), the Code on Collective Investment Schemes (including its property funds appendix ("Property Funds Appendix") and the Trust Deed.

The Manager also supervises the performance of the Property Manager to ensure that it meets its objectives pursuant to the property management agreement.

The Manager holds a Capital Markets Services Licence ("CMS Licence") issued by the Monetary Authority of Singapore ("MAS") to carry out REIT management under the SFA. Under its CMS Licence, the Manager appoints certain of its officers and staff as its representatives to conduct REIT management activities on its behalf.

This report provides an insight on the Manager's corporate governance framework and practices in compliance with the Code of Corporate Governance 2005 and the revised Code issued by the MAS in 2012 ("the Code"). Any deviations from the Code are explained.

Significant Management Changes During Reporting Period

  • Mr David Mason, resigned as COO and CFO on 15 January 2016.
  • Mr Shane Hagan, was appointed as COO and CFO on 28 January 2016.

Accessibility of Annual Report

Limited copies of the annual report were printed, however a PDF version is available for download from the corporate website:

Principles and Guidelines of the Code of Corporate Governance 2012 Code
Board Matters
Principle 1: The Board's Conduct of Affairs
Principle 2: Board Composition and Guidance
Principle 3: Chairman and Chief Executive Officer
Principle 4: Board Membership
Principle 5: Board Performance
Principle 6: Access to Information
Remuneration Matters
Principle 7: Procedures for Developing Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure of Remuneration
Accountability and Audit
Principle 10: Accountability
Principle 11: Risk Management and Internal Controls
Principle 12: Audit Committee
Principle 13: Internal Audit
Unitholder Rights and Responsibilities
Principle 14: Unitholder Rights
Principle 15: Communication with Unitholders
Principle 16: Conduct of Unitholder Meetings


The 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-term success of the company. The Board works with Management to achieve this objective and Management remains accountable to the Board.

The Board is elected by the Manager's shareholders to lead and to supervise the management of the business and affairs of the Manager and the Trust. The prime stewardship responsibility of the Board is to ensure that the Trust is managed in the best interest of all stakeholders, which includes protecting CIT's assets and Unitholders' interests and enhancing the value of Unitholders' investment in CIT.

The functions of the Board are defined broadly as follows:

  • To provide entrepreneurial leadership, set strategic and financial objectives, major corporate policies, annual budgets, and ensure that the necessary financial and human resources are in place for the Manager to meet its objectives;
  • To establish a framework of prudent and effective controls which enables risk to be assessed and managed;
  • To review senior management performance; and
  • To set the Manager's values and standards and ensure that obligations to shareholders and others are understood and met.

The Board oversees a system of internal controls and business risk management processes that set the guidelines which govern matters reserved for the Board's decision and approval. This includes approval limits for investments and divestments, bank borrowings, capital expenditure and cheque signatories. Appropriate delegation of authority for approval of capital and operating expenditure and specified financial transactions are also provided at Management level to facilitate operational efficiency.

Various Board Committees, namely the ARCC, Nomination and Remuneration Committee ("NRC"), Budget and Finance Committee ("BFC") and Investment Committee ("IC") have been constituted with clear written terms of reference to assist the Board in the discharge of its functions. Each of these Board Committees operates under delegated authority from the Board. The Board may form other Board Committees as dictated by business imperatives. Membership of the various Board Committees is managed to ensure an equitable distribution of responsibilities among Board members, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are considered in the composition of the respective Board Committees.

The Board meets at least once every quarter, and on such other occasions that necessitate its involvement. Members of the Board also meet periodically without the presence of Management to discuss and review Management performance. Where exigencies prevent a Director attending a Board meeting in person the Manager's Articles of Association permit Board meetings to be held by way of telephone conference or by means of similar communication equipment by which all persons participating in the meeting are able to hear and be heard by all other participants. The Board and Board Committees may also make decisions by way of resolutions in writing.

A total of four Board meetings were held in FY2015. A separate annual offsite meeting was held with senior management to strategise and plan CIT's longer term strategy. A table showing the attendance record of Directors at Board and Board Committees meetings during FY2015 is set out as follows:

Board members Board Meetings1 ARCC NRC
Held Attended Held Attended Held Attended
Dr Chua Yong Hai 4 4 N.A. N.A. 8 8
Mr Ooi Eng Peng 4 4 4 4 8 8
Mr Tan Guong Ching 4 4 4 4 8 8
Mr Michael Patrick Dwyer 4 4 4 4 N.A. N.A.
Mr Victor Ong Wei Tak2
(alternate to Michael Patrick Dwyer)
4 - N.A. N.A. N.A. N.A.
Mr Akihiro Noguchi 4 4 N.A. N.A. N.A. N.A.
Mr Ian Andrew Smith 4 4 N.A. N.A. N.A. N.A.
Mr David Ian MacGregor 4 4 N.A. N.A. 8 8
Mr Philip Henry Lewis Levinson3 4 4 4 4 N.A. N.A.

Composition of the Board

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management and 10% shareholders4 . No individual or small group of individuals should be allowed to dominate the Board's decision making.

The Board is represented by members with a breadth of expertise in banking, finance, accounting, real estate, law and management. It comprises eight members, of whom three are Independent Non-Executive Directors. The CEO is the only Executive Director on the Board.

The Board members as at 31 December 2015 are as follows:

Name of Directors Board ARCC NRC BFC IC
Dr Chua Yong Hai Chairman
Independent, Non-Executive Director
- Member - Chairman
Mr Ooi Eng Peng Independent, Non-Executive Director Chairman Member Chairman Member
Mr Tan Guong Ching Independent, Non-Executive Director Member Chairman Member -
Mr Michael Patrick Dwyer
Non-Executive Director Member - Member -
Mr Ian Andrew Smith Non-Executive Director - - Member Member
Mr David Ian MacGregor Non-Executive Director - Member - -
Mr Akihiro Noguchi Non-Executive Director - - - Member
Mr Philip Henry Lewis Levinson CEO and Executive Director - - - -
  1. Not including other meetings attended by Directors with Management.
  2. Mr Victor Ong Wei Tak resigned as alternate Director to Mr Michael Patrick Dwyer with effect from 12 November 2015.
  3. Mr Philip Henry Lewis Levinson, being also the CEO attends all ARCC meetings although he is not a member of the ARCC.
  4. The term "10% shareholder" shall refer to a person who has an interest or interests in one or more voting shares in the company and the total votes attached to that share, or those shares, is less than 10% of the total votes attached to all the voting shares in the company. "Voting shares" exclude treasury shares.

The Board believes that the current board size, composition and balance between Executive, Non-Executive and Independent Directors is appropriate and provides sufficient diversity without interfering with efficient and effective decision-making. It allows for a balanced exchange of views, robust deliberations and debates among members and effective oversight over Management, ensuring no individual or small group dominates the Board's decisions or its process.

With the background of skills, experience and core competencies of its members, the Board is of the view that it has the appropriate mix of expertise, experience and skills needed in the strategic direction and planning of the business of CIT.

The composition of the Board is reviewed periodically to ensure that the board size is appropriate and comprises Directors with an appropriate mix of expertise, skills and experience to discharge their duties and responsibilities.

The Board also reviews periodically and at least annually the independence of its Directors based on guidelines set out under the Code. An independent Director is one who has no relationship with the Company, its related corporations, its shareholders who hold 10% or more of the voting shares of the Company or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of his independent business judgement. In respect of financial year ended 31 December 2015, Dr Chua Yong Hai, Mr Ooi Eng Peng, and Mr Tan Guong Ching are considered independent.

To enable the Board of Directors to be able to properly discharge their duties and responsibilities as Board or Board Committee members, the Board is provided with routine updates on developments and changes in the operating environment, including revisions to accounting standards, and laws and regulations affecting CIT and/or the Manager. Directors are also encouraged to participate in industry conferences, seminars and training programmes in connection with their duties. During the year, the Board was briefed by the Management, WongPartnership LLP as well as auditors on regulatory updates such as changes in the REIT regulations, SGX-ST Main Board Listing Rules, Companies Act amendment, brief introduction on the Guidebook for Audit Committees in Singapore and MAS Notice on Prevention of Money Laundering and Countering The Financing of Terrorism.

Newly appointed Directors are given induction trainings on joining the Board together with an induction pack which includes constitutional documents of CIT and the Manager, contact information of each Board member, Management staff and Company Secretary. The training covers business activities of CIT, its strategic directions and policies, the regulatory environment in which CIT and the Manager operate, and the Manager's corporate governance practices, statutory and other duties and responsibilities as Directors. Where a Director has no prior experience as a director of a listed company, further training in areas such as accounting, legal and industry-specific knowledge is provided.

As a principle of good corporate governance, all Directors are appointed for 3 years, subject to extension for a further 3 years at the Board's and shareholders' discretion. Letters of appointment are issued to Directors upon their appointment, which sets out their duties and responsibilities to the Manager and CIT. This includes seeking the Chairman's prior approval before accepting additional commitments which may affect time allocated to their role as a Director of the Manager.

None of the Directors of the Manager has entered into any service contract directly with CIT.

Chairman and Chief Executive Officer

Principle 3: There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company's business. No one individual should represent a considerable concentration of power.

The roles of the Chairman and the CEO are separate. The Chairman and the CEO are not related to each other, nor is there any business relationship between them. This is consistent with the principle of instituting an appropriate balance of power and authority.

The Chairman of the Board is an Independent Director. He leads the Board, ensures its effectiveness on all aspects of its role; sets its meeting agenda and ensures that adequate time is available for discussion for all agenda items; promotes a culture of openness and debate at the Board; arranges for Directors to receive accurate, timely and clear information; monitors the CEO's effective communication with Unitholders and other stakeholders; encourages constructive relations within the Board and between the Board and Management; facilitates the effective contribution of non-executive directors and promotes high standards of corporate governance in general.

The CEO has full executive responsibilities over the business direction and operational decisions in managing CIT and is responsible for implementing the CIT's strategies and policies. He ensures the quality and timeliness of the flow of information between Management and the Board, Unitholders and other stakeholders.

Board membership

Principle 4: There should be a formal and transparent process for the appointment and re-appointment of Directors to the Board.

Nominating and Remuneration Committee

The Manager has established a NRC to make recommendations to the Board on all Director appointments and related matters including the following:

  • The review of structure, size and composition of the Board and Board Committees;
  • The review of succession plans for the Directors, CEO and key management staff;
  • The appointment and re-appointment of all Directors (including any Alternate Director);

The NRC comprises of four Directors, the majority of whom, including the Chairman of the NRC, are independent; namely:

  1. Mr Tan Guong Ching
  2. Dr Chua Yong Hai
  3. Mr Ooi Eng Peng
  4. Mr David Ian MacGregor

Process and Criteria for Appointment of Directors

The NRC shall make recommendations to the Board on all Board appointments, re-appointments and composition of the Board, taking into account the balance between Executive and Non-executive Directors, Independent and Non-independent Directors, the scope and nature of the operations of CIT and the requirements of the business.

In addition, the NRC takes into account that the Board composition should reflect balance in matters such as skill representation, tenure, experience, age spread and diversity. The NRC identifies suitable candidates with skills and experience that will complement the existing Board and ensure that the candidate has sufficient time available to commit to his responsibilities as a Director for appointment to the Board. During the search process, the NRC may also tap on the personal contacts of current Directors and senior management for recommendations of prospective candidates. The NRC will also consider professional networking sessions, inputs from the Manager's shareholders, and the use of third party executive/board search firms at the company's expense. Nominations of incoming Directors may be made by any of the Manager's shareholders and are openly discussed and objectively evaluated by the NRC before any appointment and/or reappointment is made. Appointment of Directors is also subject to MAS approval.

Annual Review of Directors' Time Commitments

The Code requires listed companies to fix the maximum number of Board representations on other listed companies that their Directors may hold and to disclose this in their annual report.

Although no maximum limit has been formally set by the Board on the number of listed company board representations a Director with multiple board representations may hold, the NRC is of the view that the duties of all Directors have been fully discharged based on the time and attention devoted by each Director, their individual abilities and their respective individual contribution of skills, knowledge and experience and their commitment to the affairs of CIT. The Board is of the view that such appointments do not hinder the Directors from carrying out their duties as Directors of the Manager and therefore believes that it would not be necessary to prescribe a maximum number of listed company board representations a Director may hold.

Key Information Regarding Directors

The following key information regarding Directors are set out in the following page of this Annual Report.

Pages 66 to 70: Academic and professional qualifications, board committees served on (as a member or chairman), date of first appointment as a Director, date of last reappointment as a Director, directorships or chairmanships both present and those held over the preceding three years in other listed companies, and other principal commitments.

Board Performance

Principle 5: There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each Director to the effectiveness of the Board.

The Board has in place a formal process to annually assess the effectiveness of the Board and the ARCC through feedback from individual Directors on areas relating to the Board's and ARCC's competencies and effectiveness.

All Directors are requested to complete a Board Evaluation Questionnaire designed to seek their view on the various aspects of the Board and the ARCC performance so as to assess the overall effectiveness of the Board and the ARCC. The results of the evaluation will be reviewed by the Board. Action plans will be implemented for areas which the Board are of the view that improvements are required to enhance the overall effectiveness of the Board and the ARCC.

Individual Director's performance is evaluated annually and informally on a continual basis by the Board. The criteria taken into consideration include the value of contribution to the development of strategy, attendance at Board and ARCC meetings, the degree of preparedness, industry and business knowledge and experience each Director possesses which are crucial to the business of CIT and the Manager.

In summary in FY2015, the Board was generally satisfied with its achievements. A need to appoint more Independent Directors to meet with the new regulatory requirement was noted.

Access to Information

Principle 5: In order to fulfil their responsibilities, Directors should be provided with complete, adequate and timely information prior to board meetings and on an ongoing basis so as to enable them to make informed decisions to discharge their duties and responsibilities.

All Directors have unrestricted access to CIT's and the Manager's records and information. A Deed of Access, which sets out their rights to access or inspect the records and information, is issued to Directors upon their appointment.

The Board is provided with timely and complete information both prior to board meetings and on an ongoing basis so as to allow the Board to make informed decisions to discharge its duties and responsibilities. Generally, board papers are distributed at least one week prior to Board meetings to ensure that Directors have sufficient time to review the information provided. However, sensitive matters may be tabled at the meeting itself, or discussed without papers being distributed.

The information provided to the Board includes financial results, market and business developments, and business and operational information. Such reports keep the Board informed, on a balanced and understandable basis, of CIT's performance, financial position and prospects. The financial results are also compared against the budgets, together with explanations given for significant variances for the reporting period.

A one day off-site board strategy meeting is organized annually for in-depth discussion by the Board and the Management on strategic issues and directions pertaining to CIT and the Manager.

In addition to and independent of the information provided above, Management remains available at all times to answer any query raised by any Director. Frequent dialogue and interaction take place between Management and the Directors. The Directors are thus able to access the Manager's operations and information at a deeper level, allowing them to better strategise and guide CIT in their role as Directors. Furthermore, the Board Papers Portal allows Board members to securely access and read Board/Board Committee papers and materials electronically at any place and any time, using the Directors' tablet devices.

Board members have separate and independent access to Management as well as to the Company Secretary. The Company Secretary attends all Board meetings and ensures that board procedures and applicable rules and regulations are complied with. The appointment and the removal of the Company Secretary is subject to Board's approval. The Company Secretary, together with the CEO ensures good information flows between Management and the Directors.

The Board takes independent professional advice as and when necessary, with approval from the Chairman, to enable it to discharge its responsibilities effectively. Individual Directors can seek independent professional advice with the consent of the Chairman or ARCC Chairman. For complex matters, the Board may from time to time appoint a sub-committee to assist the Board in its deliberations and to provide recommendations.


Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration.

Level and Mix of Remuneration

Principle 8: The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.

Disclosure on Remuneration

Principle 9: Every company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration, in the company's Annual Report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to Directors and key management personnel, and performance.

Procedures for Developing Remuneration Policies

CIT, constituted as a trust, is externally managed by the Manager and accordingly, it has no personnel of its own.

Through the NRC, the Board has instituted a formal and transparent procedure in developing remuneration policies and framework relating to the CEO and Non-executive Directors. Directors' fees and the CEO's remuneration, including all employees of the Manager are paid by the Manager and not the Trust. There are no directors' fees paid to the CEO and Non-Independent Non-Executive Directors.

Guided by the Remuneration Framework, NRC with the endorsement of the Board, reviews on periodic basis:

  • the directors' fees and allowances provided to the Independent Directors
  • remuneration components of the CEO, as well as the Key Management Personnel. Directors do not decide on their own fees.

Directors' Fees

All Independent Directors are appointed for a period of 3 years and is subject to extension for a further 3 years at the discretion of the Board and the shareholders. Accordingly, the Independent Directors' fees are established once every 3 years. The fees are dependent on the level of responsibilities at the Board level, and where applicable, additional responsibilities given in other committees set up by the Board. The Independent Directors are paid a basic fee and where applicable, additional fees are paid for additional responsibilities. The Chairman of the Board and ARCC is paid a higher fee compared with members of the Board and ARCC in view of greater responsibilities carried by that office. Most recently in 2015, the NRC, IC and BFC were established. No additional fees were paid to members of these committees for this period.

CEO and Key Management Personnel's ("KMP") Remuneration

The NRC reviews the remuneration of the CEO and the KMP of the Manager annually or as and when there is a significant change to the structure of the Manager. The remuneration components include fixed pay, fixed allowances, short-term incentive bonus (also known as annual performance bonus) and long-term incentive bonus.

The Manager's Remuneration and Benefits Policy are aligned to performance management in view that an equitable and fair reward system drives organisational performance. It is also designed to attract, motivate and retain high-performing staff. On a periodic basis, the Manager conducts an independent remuneration study to align internal remuneration to market and industry practices taking into consideration the size of the REIT as well as the employees' responsibilities, work experience and educational qualifications. The Manager carries out a formal bi-annual performance review process to reenforce strengths, identify improvements and plan for the progressive development of the employees.

The Key Performance Indicators ("KPI") set for the CEO are linked to the performance of the Trust in terms of growth and risk management. The long-term incentives ("LTIs") are determined by the Board on a non-discretionary basis.

To date, only the CEO and a few selected Heads of the Departments are on the LTI programme, as they have direct influence in driving the performance of the Trust. The CEO's LTIs are cascaded to the KMP, and adjusted to their own areas of expertise. The LTI is distributed annually in five tranches for the CEO and in three years for the KMP, allowing continuity of commitment to the Unitholders.

LTIs for 2015 were stretched targets set for management, which covered:

  1. growth in Assets under Management;
  2. increase in unit price;
  3. growth in total unit holders returns; and
  4. sustainability of CIT profit

During 2015, none of these targets were met as the market proved to be a relatively tough market, in terms of acquisitions and growth in NPIs as explained elsewhere in the Annual Report.

All employees of the Manager undergo the bi-annual review process where the individual's performance forms 50% of the assessment; the other 50% is based on the company's performance relative to the Trust's performance. The KPIs of each staff are apportioned from their respective heads of departments and closely monitored during informal discussions between the managers and the staff. At yearend, performance assessments are conducted with ratings for each employee within each department. Additional weightage is given to staff who are on roles that are directly impacting the performance of the Trust.

The Company conducted a remuneration review through an indipendent advisor McLagan/AEO Hewitt in late 2014 to assess the competitiveness of the staff remuneration compared to the market. The results have led to the first company-wide salary adjustment in FY2015. Each staff was also evaluated to ensure that they are in the most appropriate role and their remuneration was adjusted according to the market standards.

To further align the interests of the CEO and the Manager's employees with that of the Unitholders, both CEO and staff are rewarded, subject to the Board's discretion, CIT Units owned by the Manager through the Employee Shares Incentive Program.

To date, no employee share option schemes have been implemented by CIT.

For the FY2015, there were no employees who were immediate family members of a Director or the CEO or any of the existing staff.

The Directors' fees paid to the Independent Directors for FY2015 were as follows:

Name of Director Base / Fixed Salary (In % or dollar term) Variable or Performancerelated income / Bonuses (In % or dollar term) Benefitsin-kind (In % or dollar term) Sharebased incentives and awards (In % or dollar term) Stock options granted (In % or dollar term) Other long-term incentives (In % or dollar term) Directors' Fee (In % or dollar term) Total (to the nearest $000')
Executive Director/CEO
Mr Philip Henry Lewis Levinson 89 9.7 0.6 0.7 - - 100 630
Executive Director/CEO
Dr Chua Yong Hai - - - - - - 100 130
Mr Ooi Eng Peng - - - - - - 100 88
Mr Tan Guong Ching
- - - - - - 100 82

Remuneration of the top five key management personnel (who are not Directors or the CEO) in bands of $250,000 were as follows:

Name of top 5 key management personnel Base / Fixed Salary (In %) Variable or Performancerelated income / Bonuses (In %) Benefitsin-kind (In %) Share-based incentives and awards (In %) Stock options granted (In %) Long-term incentives (In %) Total (In %)
Above $250,000 to $500,000
Mr David Mason 61.7 10.4 1 9.2 - 17.6 100
Ms Nancy Tan 54.4 19.6 0.8 9.9 - 15.2 100
Below $250,000
Ms Elena Arabadjieva 87.2 12.3 0.5 - - - 100
Ms Loy York Ying 67.6 31.7 - 0.6 - - 100
Ms Frecy Bastian
59.2 28.1 1.2 11.5 - - 100

The aggregate remuneration paid to the top five key management personnel (excluding CEO) was $1.4 million in FY2015.



Principle 10: The Board should present a balanced and understandable assessment of the company's performance, position and prospects.

The Board is responsible for providing a balanced and understandable assessment of CIT's performance, position and prospects, which extends to interim and other price sensitive public reports, and reports to regulators (where required). Management provides the Board with relevant information on the performance of CIT and the Manager on a timely basis and as the Board may require from time to time, in order for the Board to effectively discharge its duties. Quarterly and annual financial reports and other material information are disseminated to the Unitholders through announcements via SGXNET, CIT's corporate website, and where applicable, media releases and analyst briefings.

The Board meets regularly to review the financial performance of CIT and the Manager against the yearly approved budget, taking note of any significant variances for quarter-on-quarter and year-to-date performance. In assessing business risks, the Board takes into account the economic environment and risks associated with the property industry.

The Board also reviews the risks to the assets of CIT, examines the management of liabilities, and will act upon any comments from internal and external auditors of CIT.

Given the importance of compliance and risk management, the ARCC has been tasked to oversee this aspect of the Manager and CIT's operations. The ARCC reviews and assesses the adequacy of the Manager's financial, operational, compliance, information technology controls, risk management policies and systems established by the Management. The ARCC also oversees the establishment and operation of the risk management system, including reviewing the adequacy of risk management practices for material risks, such as commercial and legal, financial and economical, operational and technology risks, on a regular basis; and reviews major policies for effective risk management.


Risk Management and Internal Controls

Principle 11: The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard unitholders' interests and the company's assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.

The Manager has put in place a system of internal controls to safeguard CIT's assets, Unitholders' interests and to manage risk in general. The Manager's approach to risk management and internal control and the management of key business risks is set out in the "Risk Management" section on pages 20 to 23 of the Annual Report.

CIT's and the Manager's ERM framework have been implemented to further enhance risk management capabilities. Key risks, control measures and management actions are continually identified, reviewed and monitored as part of the ERM process. The monitoring of the risks identified is via a "traffic light alert system". The risk appetite threshold of each risk is based on the colours of a traffic light – Red, Amber and Green. Green is within the acceptable risk appetite, Amber signals increasing risk which needs to be monitored and reduced as necessary and Red means it is outside the risk appetite that both CIT and the Manager is willing to undertake and thus measures and steps need to be put in place to reduce the risk level to within the acceptable range. The ERM Risk Appetite Statement is monitored on a quarterly basis to ensure that all risks are appropriately managed. The Statement is reviewed and tabled to both the ARCC and the Board on a quarterly basis for their notation. The metrics adopted for each measure will be reviewed at least annually or more frequently if the business environment warrants.

In addition, a Risk Matrix is produced covering CIT's and the Manager's relevant material operational risks by subcategory (Commercial & Legal; Economical/Financial; Operational; and Technology), the likelihood of the risk occurring, the consequence should it occur and the controls put in place to mitigate or manage these risks. Risks are analysed by combining estimates of likelihood and consequences, adequacy of existing controls/treatments or actions to determine whether a level of risk is to be accepted, or requires specific management responsibility or escalation to the ARCC. Identified risks are reviewed quarterly or whenever the business environment changes substantially to ensure that changes in circumstances have not altered risk priorities. Identified controls/treatments or actions are reviewed quarterly to ensure that changes in circumstances have not affected their adequacy and effectiveness.

During the year, PricewaterhouseCoopers LLP (the Manager's Internal Auditors) conducted a risk workshop for the ARCC and the Manager's management team to collectively refresh the enterprise-wide risks and to align and quantify the key risks across CIT and the Manager. The workshop forms part of CIT's continuous risk assessment process and the output is used as input for ongoing management and monitoring of risks across CIT.

In addition to the Risk Matrix, reports on the internal controls are also provided to the ARCC on a periodic basis to assess the adequacy of the existing internal controls and risk framework.

The ARCC, through the assistance of internal and external auditors, reviews and reports to the Board on the effectiveness and adequacy of CIT's risk management and internal control system, including financial, operational, compliance and information technology controls, taking into consideration the reports and assurance provided by Management, recommendations of both internal and external auditors and the timely and proper implementation of all required corrective, preventive or improvement measures.

In line with the strategic objectives to provide Unitholders with a stable and secure income stream and to achieve long term growth in NAV per unit, the Manager critically analyses each transaction before proceeding. To arrive at an investment decision, the Manager identifies the risk exposures and determines how to mitigate, transfer, manage and/or reduce those risks, where possible, to a level which is appropriate for the corresponding expected return on that investment. Extensive procedures, including due diligence, are carried out at various stages of the investment process. The Board reviews management reports and feasibility studies on proposed acquisitions, as prepared by experienced staff of the Manager, and approves accordingly if the Board believes it is in the best interests of the Trust and its Unitholders.

The Manager is committed to conduct its business within a framework that fosters the highest ethical and legal standards. The Manager has a whistle-blowing policy that is made available on CIT's website. The policy provides a channel for external parties, in addition to employees, to raise concerns and continues to provide employees reassurance that they will be protected from reprisals or victimisation for whistle-blowing in good faith.

The Board has received confirmation from the CEO and the COO and CFO of the Manager that they are not aware of any events that have arisen which would have a material effect on the financial results of CIT and its subsidiaries, except as disclosed in the financial results, and nothing has come to their attention which may render the financial results false or misleading.

Based on the risk management and internal controls system established and maintained by the Manager, audits conducted by the internal and external auditors and their recommendations, and together with the CEO's and COO and CFO's quarterly and annual undertaking confirming their responsibilities for, and adequacy and effectiveness of the internal controls; pursuant to Rule 1207(10) of the Listing Manual, the Board with the concurrence of the ARCC is satisfied that the Manager's system of internal controls addressing financial, operational, compliance and information technology risks was adequate for the year ended 31 December 2015, to provide reasonable assurance that assets are safeguarded and that proper accounting records are maintained and financial statements are reliable.

Dealing in CIT Units

The Trust Deed requires each Director of the Manager to give notice to the Manager of their acquisition of units or of any changes in the number of units which they hold, or in which they have an interest, within two business days after such acquisition, or the occurrence of the event giving rise to changes in the number of units which they hold, or in which they have an interest. The SFA also requires Directors and CEO of the Manager to give such notice. All dealings in units by the Directors and CEO of the Manager are to be announced through SGXNET.

In general, the Directors and employees of the Manager are encouraged to hold the units and not to deal on short-term considerations.

The Manager has adopted an internal policy which provides guidelines for dealing in units, under which Directors, CEO and employees are prohibited from dealing in units in the period commencing:

  1. One month before the public announcement of CIT's annual results and, where applicable, CIT's property valuations, ending on the date of announcement of the relevant results;
  2. Two weeks before the announcement of CIT's quarterly results, ending on the date of announcement of the relevant results; and
  3. At any time whilst in possession of undisclosed material information.

In addition, while in possession of undisclosed material information, Directors and employees of the Manager are not to advise others to trade in CIT units or communicate such information to another person.

Prior to the commencement of the prohibition period, Directors and employees are reminded not to trade during this period or whenever they are in possession of undisclosed material information.

In addition, the Manager has given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its holdings in the units and any changes thereto within two business days after the date on which it acquires or disposes of any units. The Manager has also undertaken that it will not deal in CIT units during the period commencing two weeks before the public announcement of CIT's quarterly results or one month before the annual and semi-annual results, and if applicable, property valuation, and ending on the date of announcement of the relevant results.

Review Procedures for Interested Party Transactions ("IPT")

The Manager has established an internal control system to ensure that all future transactions involving the Trustee and any related party of the Manager or CIT are undertaken on normal commercial terms and will not be prejudicial to the interests of CIT and the Unitholders. Generally, the Manager will demonstrate to the ARCC that such transactions satisfy the foregoing criteria, which may entail obtaining quotations from parties unrelated to the Manager, or obtaining one or more valuations from independent valuers, in accordance with the Property Funds Appendix.

In addition:

  • transactions equal to or exceeding $100,000 in value but below 3% of the value of CIT's net tangible assets are subject to review by the ARCC at regular intervals;
  • transactions equal to or exceeding 3%, but below 5% of the value of CIT's latest audited net tangible assets, are subject to the review and prior approval of the ARCC. Such approval will only be given if the transactions are on normal commercial terms and consistent with similar types of transactions made by Trustee with third parties which are unrelated to the Manager; and
  • transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding 5% of the value of CIT's latest audited net tangible assets, are reviewed and approved by the ARCC who may, as it deems fit, request advice on the transaction from independent sources or advisers, including the obtaining of valuations from independent valuers. Further, under the Listing Manual and the Property Funds Appendix, such transactions would have to be approved by the Unitholders at a meeting of Unitholders.

Where matters concerning CIT relate to transactions entered into, or to be entered into, by the Trustee for and on behalf of CIT with a related party of the Manager or CIT, the Trustee is also required to ensure that such transactions are conducted on normal commercial terms and are not prejudicial to the interests of CIT and the Unitholders.

Further, the Trustee has the ultimate discretion under the Trust Deed to decide whether or not to enter into a transaction involving a related party of the Manager or CIT. If the Trustee is to sign any contract with a related party of the Manager or CIT, the Trustee will review the contract to ensure that it complies with the requirements relating to interested party transactions in the Property Funds Appendix and the provisions of the Listing Manual relating to interested person transactions, as well as such other guidelines issued by MAS and the SGX-ST that apply to REITs. All IPTs (and the basis, quotation obtained to support its basis) entered into are maintained in records by the Manager and reviewed by the ARCC.

CIT will, in compliance with Rule 905 of the Listing Manual, announce any interested person transaction if such transaction, either by itself or when aggregated with other interested person transactions entered into with the same interested person during the same financial year, is 3% or more of CIT's latest audited net tangible assets.

Dealings with Conflicts of Interest

The following key protocols have been established to deal with conflict of interest issues:

  • all executive officers are employed by the Manager;
  • all resolutions in writing of the Directors of the Manager in relation to matters concerning CIT must be approved by a majority of the Directors, including at least one Independent Director;
  • at least one third of the Board is comprised of Independent Directors;
  • in respect of the matters in which a Director or his associates have an interest, direct or indirect, such interested Director will notify his interest and, where appropriate, abstain from voting. In such matters, the Board may also seek external professional advice to assist in their deliberations;
  • all IPT must be reviewed by the ARCC and approved by a majority of the ARCC. If a member of the ARCC has an interest in a transaction, he or she will, where appropriate, abstain from voting;
  • Directors receive training about their duties including the importance of not being influenced by directives from the shareholders which may conflict with the obligations of the Manager owed to clients, Unitholders or third parties who may, in turn, owe obligations to CIT, or with their broader duties as Directors;
  • notwithstanding any request from its shareholders, decisions regarding service providers retained by the Manager go through a due diligence process conducted by the Manager to ensure that appropriate services are acquired in the circumstances;
  • to prevent misuse of confidential information, employees must not disclose, or use for their own purposes, or cause any unauthorised disclosure of, any information of a confidential nature relating to the business of the Manager or its affiliates or its agents or customers;
  • under the Trust Deed, other than a meeting convened for the removal of the Manager, the Manager and its associates are prohibited from being counted in a quorum for or voting at any meeting of Unitholders convened to approve any matter in which the Manager or any of its associates has a material interest. For so long as CITM is the manager, the controlling shareholders (as defined in the Listing Manual) of CITM and their respective associates are prohibited from being counted in the quorum for or voting at any meeting of Unitholders convened to consider a matter in respect of which the relevant controlling shareholder and/or their associates have a material interest; and
  • 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 CIT with an affiliate of the Manager, the Manager shall be obliged to consult with a reputable law firm (acceptable to the Trustee) for legal advice on the matter. If that law firm is of the opinion that the Trustee, on behalf of CIT, has a prima facie case against the party allegedly in breach under such agreement, the Manager is obliged to take appropriate action in relation to such agreement. The Directors of the Manager will have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of a breach of any agreement entered into by the Trustee for and on behalf of CIT with an affiliate of the Manager and the Trustee may take such action as it deems necessary to protect the rights of Unitholders and in the interest of Unitholders. Any decision by the Manager not to take action against an affiliate of the Manager shall not constitute a waiver of the Trustee's rights to take such action as it deems fit against such affiliate.

Audit Committee

Principle 12: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.

The ARCC was established to assist the Board in its oversight of CIT and the Manager's governance in relation to financial, risk, audit, information technology and compliance matters. The ARCC scope of authority and responsibilities are defined in its term of reference and in compliance with the revised 2nd edition of the Audit Committee ("AC") Guidelines announced in August 2014.

In line with the revised 2nd Edition of the AC Guidelines, the ARCC must comprise of at least three Directors, majority of whom must be independent.

As at 31 December 2015, the ARCC comprises the following Directors, of which two out of three are Independent, Non-executive Directors (including the Chairman):-

  1. Mr Ooi Eng Peng
    Chairman (Independant, Non-Executive Director)
  2. Mr Tan Guong Ching
    Member (Independant, Non-Executive Director)
  3. Mr Michael Patrick Dwyer
    Member (Non-Executive Director)

The separation of the roles of the Chairman of the Board and the Chairman of the ARCC ensures greater independence of the ARCC in the discharge of its duties.

Members of the ARCC bring with them invaluable experience and professional expertise in the accounting, finance, legal and business domains.

The ARCC has explicit authority to investigate any matter within its terms of reference. It has full access to, and the co-operation of the Management and full discretion to invite any Director or staff to attend its meetings. The ARCC has adequate resources, including access to external consultants and auditors, to enable it to discharge its responsibilities properly.

The ARCC functions are broadly defined as assisting the Board in fulfilling its oversight responsibilities by:

  • reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial information provided by the Manager to any governmental authority or the public and any announcements relating to the company's financial performance;
  • reviewing and monitoring the effectiveness and adequacy of the systems of internal controls, including financial, operational, compliance, information technology and risk management controls and procedures that Management and the Board have established;
  • ensuring that procedures are in place for compliance with all applicable laws, regulations, rules, codes of conduct and standards of good practices;
  • reviewing the comprehensiveness of the audit and business processes to manage risks and safeguard both CIT's and the Manager's assets and enhance Unitholders' and shareholders' value;
  • reviewing the effectiveness of the company's internal audit function; including its audit plans and the scope and effectiveness of the internal audit procedures;
  • reviewing the adequacy, independence, effectiveness, objectivity and fees of the external auditors and recommending to the Board on any proposals to the Unitholders on any replacement, appointment or reappointment of the auditors; and approving the remuneration and terms of their engagement; and
  • reviewing related party transactions to ascertain compliance with internal procedures and provisions of applicable laws and regulations.

The ARCC's activities for FY2015, included the following:

(a) Financial Reporting

The ARCC reviewed the interim and annual financial statements and financial announcements required by the SGX-ST, for recommendation to the Board for approval.

(b) External Audit

The ARCC reviewed and approved the audit plan and scope with the external auditors and critically reviewed the report on the audit of the year-end financial statements.

The ARCC also reviewed and considered the reappointment of the external auditors and is satisfied with the suitability, independence and objectivity of the external auditors and has recommended to the Board its re-appointment.

The review took into consideration (i) adequacy of the resources and experience of the auditing firm and the audit partner, (ii) the terms of the engagement, (iii) size and complexity of CIT and its subsidiary, (iv) the number and experience of supervisory and professional staff assigned to each audit, (v) the fees paid for audit and non-audit services performed, and (vi) suitability, objectivity and independence from Management and the Manager based on their performance to date.

The aggregate amount of the audit fees paid/payable by CIT and its subsidiary to the external auditors for FY2015 was $298,000, of which audit and non-audit fees amounted to $180,000 and $118,000 respectively. The ARCC has undertaken a review of all non-audit services provided by the auditors and they would not, in the ARCC’s opinion, affect the independence of the auditors.

Accordingly, the Manager confirms that CIT complies with Rule 712 and 715 of the Listing Manual with respect to the suitability of the audit firm for CIT and its subsidiary.

(c) Internal Audit

The 3-year Internal Audit Rotational Plan for Year 2015 to 2017 was approved by the ARCC in 2014.

The ARCC reviewed the scope of internal audit work and its audit program; it reviewed the findings during the year and Management’s responses thereto; and it satisfied itself as to the adequacy of the internal audit function.

An annual assessment was performed on PwC LLP to evaluate the effectiveness of the internal auditors.

(d) IPT

The ARCC reviewed IPT to ensure compliance with internal procedures, provisions of the Listing Manual and the Property Funds Appendix.

(e) Whistle Blowing

The ARCC ensures that the Whistle-Blowing Policy put in place provides an avenue through which staff and external parties may raise, in good faith and in confidence, any concerns about possible improprieties in matters of financial reporting or other matters to the Chairman of the ARCC and that there will be independent investigation and appropriate follow-up action taken.

External parties can raise their concerns by submitting the prescribed form found on, to

The ARCC meets at least four times a year. It has full access to the external and internal auditors and meets with the auditors, without the presence of Management, on a quarterly basis.

The number of ARCC meetings held and corresponding attendances for FY2015 are set out on page 79.

Internal Audit

Principle 13 : The Company should establish an internal audit function that is adequately resourced and independent of the activities it audits.

Given the Manager's size and scale of operations, the Manager outsources the internal audit function. PricewaterhouseCoopers LLP (PwC) has been appointed as the internal auditor for another 3-year period from 2015 to 2017. PwC adopts the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors.

The internal auditor primary reporting line is to the Chairman of ARCC and administratively to the CEO. The ARCC reviews and approves the annual internal audit plan, and ensures that the internal auditor has adequate resources to perform its functions. The ARCC also reviews the results of internal audits and Management's actions in resolving any audit issues reported.

The ARCC is satisfied with the suitability of the internal auditors and is of the view that the internal audit function is adequately resourced to perform its functions, and has appropriate standing within the Manager.


Unitholders' Rights

Principle 14: Companies should treat all unitholders fairly and equitably, and should recognise, protect and facilitate the exercise of unitholders' rights, and continually review and update such governance arrangements.

Communication with Unitholders

Principle 15: Companies should actively engage their unitholders and put in place an investor relations policy to promote regular, effective and fair communication with unitholders.

Conduct of Unitholder Meetings

Principle 16: Companies should encourage greater unitholders participation at general meetings of unitholders, and allow unitholders the opportunity to communicate their views on various matters affecting the company.

The Manager upholds a strong culture of continuous disclosure and transparent communication with Unitholders, the investing community and other stakeholders. The Manager has developed a disclosure policy, which requires timely and full disclosure of financial reports and all material information relating to CIT by way of public releases or announcements through the SGX-ST via SGXNET. This will be subsequently followed up with the release on CIT's website at

Our Policies and Practices

The Code encourages listed companies to have a policy on the payment of dividends. The Manager's policy is to distribute 100 percent of CIT's taxable income, comprising substantially its income from the letting of its properties after deduction of allowable expenses. The actual level of distribution will be determined at the Manager's discretion taking into account the needs of the Trust for capital expenditure, working capital requirements and the liquidity position of CIT. Since the listing in 2006, CIT has distributed 100 percent of its taxable income to its Unitholders.

The Manager has a dedicated investor relations and corporate communications team which handles communications with investors, the investment community, analysts and the media.

One of the key roles of the CEO, together with the Head of Investor Relations and Corporate Communications, is to keep the market and investors apprised of CIT's financial performance and corporate developments. The Manager believes in regular, effective, unbiased and transparent communication and conducts regular briefings for analysts and media representatives, which generally coincide with the release of CIT's results. During these briefings, the Manager will review CIT's most recent performance, as well as discuss the business outlook for CIT. In accordance with the Manager's objective of transparent communication, briefing materials are released to the SGX-ST and made available on CIT's website.

For the year, the Management met with institutional investors in Singapore, Hong Kong, Malaysia, Australia, China, Japan and Europe through one-on-one or group meetings as well as teleconferences. The retail investors were also engaged directly with the Manager as well as the Board of Directors through the AGM.

In compliance with the Property Funds Appendix, an AGM of Unitholders will be held after the close of the financial year allowing the Manager to interact with investors. A copy of CIT's Annual Report will also be sent to Unitholders no later than four months from the end of each financial year. Notice of the AGM will be published on SGXNET, newspapers and CIT's website.

At the AGM, each distinct matter will be proposed as a separate resolution. Unitholders will be invited to raise questions they may have relating to the resolution to be passed before voting on each of the resolutions by poll, using an electronic voting system. This will allow all Unitholders present, or represented at the meeting to vote on a one unit, one vote basis. The voting results will be screened at the meeting and announced via SGXNET after the meeting.

As and when an EGM is to be convened, a circular containing details of the matters proposed for the Unitholder's consideration and approval will also be sent to Unitholders; together with the notice of the EGM. Such notice will also be published on SGXNET, newspapers and CIT's website.

Board members, Management and the external auditors will be present at the AGM and EGM.

As part of the Manager's efforts to encourage greater Unitholders' participation at the AGM, a Question and Answer session is held at the end of the AGM to allow Unitholders the opportunity to put forth any questions and clarify any issues they may have with the Board members, Management or external auditors regarding the affairs of the Manager and CIT.

CIT's website also provides visitors with the option to sign up for a free email alert service when there is any newly posted information on the website or provide any feedback via the electronic feedback form on the website.


Additional Committees

Apart from the ARCC and NRC, the Manager also set up the IC and BFC. The chairman of both committees are Independent Non-executive Directors.

The IC is guided by its terms of reference, in particular, the IC:

  • reviews the investment, divestments, capital works and major leasing activities of CIT and its subsidiaries to ensure they are consistent with the goals and objectives of CIT set by the Board;
  • determines that investment constraints are consistently followed and that procedures are in place to ensure that the investment portfolio is managed in compliance with the investment policy and applicable investment constraints;
  • reviews the performance of the investment portfolios of CIT and its subsidiaries; and
  • considers and makes recommendations regarding any issues and policies with significant investment impact, upon requested by the Board of Directors.

The BFC is guided by its terms of reference, in particular, the BFC:

  • reviews the annual budgets of CIT and the Manager for recommendation to the Board;
  • reviews and monitors periodic reports on budget variances;
  • recommends the annual budgets to the Board of Directors and updates the budget variance status to the Board on a periodic basis;
  • reviews, recommends and monitors capital structure and corporate finance strategy of the Trust including the issuance of equity and debt securities, financing and refinancing plans, and financial risk management; and
  • makes recommendations to the Board on policies relating to budget and finance.