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annual report 2012
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The H-REIT Manager is committed to maintaining good corporate governance and has adopted a set of
internal guidelines on corporate governance (“Internal CG Guidelines”) based on the provisions of the Code
of Corporate Governance 2005 (“2005 Code”). Whilst the revised Code of Corporate Governance 2012 (“2012
Code”) will only be applicable to the H-REIT Manager in respect of its fnancial year commencing 1 January
2013, the H-REIT Manager has commenced compliance with a number of the key revised guidelines under
the 2012 Code and will further review its corporate governance practices to bring the same in line with the
recommendations under the 2012 Code.
This report thus sets out the H-REIT Manager’s main corporate governance practices with reference to the
2005 Code and additionally, where applicable, the 2012 Code.
BOARD MATTERS
Principle 1: The Board’s conduct of afairs
Primary Functions of the H-REIT Manager Board
The H-REIT Manager Board is responsible for the overall corporate governance of the H-REIT Manager,
including establishing goals for management and monitoring the achievement of these goals. The H-REIT
Manager is also responsible for the strategic business direction and risk management of H-REIT. All H-REIT
Manager Board members participate in matters relating to corporate governance, business operations and
risks, fnancial performance and the nomination and review of performance of Directors.
The H-REIT Manager Board has established a framework for the management of the H-REIT Manager and
H-REIT, including a system of internal controls and a business risk management process. The H-REIT Manager
Board meets quarterly or more often if necessary and reviews the fnancial performance of H-REIT against a
previously approved budget. The H-REIT Manager Board also reviews the business risks of H-REIT, examines
liability management and acts upon any comments from both the internal and external auditors of H-REIT. In
assessing business risks, the H-REIT Manager Board will consider the economic environment and risks relevant
to the property industry. It will review management reports and feasibility studies on individual projects prior
to approving major transactions.
Independent Judgement
All the Directors of the H-REIT Manager are required to exercise objective decision-making in the interests of
H-REIT. The H-REIT Manager Directors who are in any way, directly or indirectly, interested in a transaction
or proposed transaction will declare the nature of their interests in accordance with the provisions of the
Companies Act, Chapter 50, and also voluntarily abstain from deliberation on the same.
Delegation by the H-REIT Manager Board
The primary functions of the H-REIT Manager Board are either carried out directly by the H-REIT Manager
Board or through committees established by the H-REIT Manager Board, namely, the Audit Committee (“AC”)
and the Risk Management Committee (“RMC”), all collectively referred to hereafter as the “Committees”. Clear
written terms of reference for each of the Committees set out the authority and duties of the Committees. All
terms of reference for the Committees are approved by the H-REIT Manager Board and reviewed periodically
to ensure their continued relevance. The composition of each Committee can be found under the corporate
directory section in this annual report (the “Annual Report”).
The delegation of authority by the H-REIT Manager Board to the Committees enables the H-REIT Manager
Board to achieve operational efciency by empowering these Committees to decide on matters within their
respective written terms of reference and/or limits of delegated authority and yet without abdicating its
responsibility. Please refer to the section on Principle 11 in this report for further information on the activities
of the AC and RMC.
Corporate Governance