Corporate Governance

REPORT FOR THE PERIOD FROM 1 JANUARY 2024 TO 31 DECEMBER 2024

Our Role

We, as the manager of CLAR (Manager), set the strategic direction of CLAR and its subsidiaries (CLAR Group) and make recommendations to HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of CLAR (Trustee), on any investment or divestment opportunities for CLAR and the enhancement of the assets of CLAR inaccordance with the stated investment strategy for CLAR. The research, evaluation and analysis required for this purposeare coordinated and carried out by us as the Manager.

As the Manager, we have general powers of management over the assets of CLAR. Our primary responsibility is to manage the assets and liabilities of CLAR for the benefit of the Unitholders. We do this with a focus on generating rental income and enhancing asset value over time to maximise returns from the investments, and ultimately the distributions and total returns, to the Unitholders.

Our other functions and responsibilities as the Manager include, but are not limited to:

(a) using our best endeavours to conduct CLAR’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, 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 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) (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, the tax rulings issued by the Inland Revenue Authority of Singapore and relevant tax authorities on the taxation of CLAR and where relevant, its Unitholders, and the United Kingdom’s Alternative Investment Fund Managers Regulations 2013 (as amended) (AIFMR) and the European Union’s Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD);

(d) attending to all regular communications with Unitholders; and

(e) supervising the property managers of CLAR which perform the day-to-day property management functions (including leasing, marketing, promotion, operations coordination and other property management activities) for CLAR’s properties.

The Manager also considers sustainability issues (including environmental and social factors) as part of its responsibilities and has included some insights in the Sustainability Management section on page 98 of this Annual Report (AR). More detailed information on the Board Statement, material ESG factors, sustainability frameworks, policies, practices and performances, climate-related disclosures, stakeholders’ rights, and performance enhancing mechanisms for employee participation are provided on CLAR’s website at www.capitaland-ascendasreit.com (Website) and in the Integrated Sustainability Report (ISR) 2024.

CLAR, 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. Manager was appointed in accordance with the terms of the trust deed constituting CLAR dated 9 October 2002 (as amended, varied or supplemented from time to time) (Trust Deed1). 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 CLI which holds a significant unitholding interest in CLAR. CLI is a leading global real estate investment manager, with a vested interest in the long-term performance of CLAR. CLI’s significant unitholding in CLAR demonstrates its commitment to CLAR and as a result, CLI’s interest is aligned with that of other Unitholders. The Manager’s association with CLI provides the following benefits, among other things, to CLAR:

(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.
 

OUR CORPORATE GOVERNANCE FRAMEWORK AND CULTURE

The Manager embraces the tenets of sound corporate governance, including accountability, transparency and sustainability. It is committed to enhancing long-term Unitholder value with appropriate people, processes and structure to manage the business of the Manager and deliver the CLAR Group’s long-term strategic objectives. The Board of Directors (Board) is responsible for setting the Manager’s corporate governance standards and policies which sets the tone at the top. This corporate governance report (Report) sets out the corporate governance practices for the financial year ended 31 December 2024 (FY 2024), benchmarked against the Code of Corporate Governance 2018 (Code). Throughout FY 2024, the Manager has complied with the principles of corporate governance laid down by the Code and also, substantially, with the provisions underlying the principles of the Code. Where there are deviations from the provisions of the Code, appropriate explanations are provided in this Report. This Report also sets out policies and practices adopted by the Manager which are not provided in the Code.

In 2024, CLAR was ranked third in the REITs and Business Trusts category of the Singapore Governance and Transparency Index (SGTI). CLAR also maintained its 4-star rating in the 2024 GRESB2 Real Estate Assessment and achieved an ‘A’ rating for GRESB Public Disclosure for the fifth consecutive year. CLAR is also included in theSGX Fast Track Programme which affirms listed issuers that have been publicly recognised for good corporate governance standards and compliance track record and accords prioritised clearance for selected corporate action submissions. Please refer to the ESG Highlights section on pages 6 and 7 of CLAR's FY 2024 Annual Report for more details.

BOARD MATTERS
Principle 1: The Board's Conduct of Affairs
Principle 2: Board Composition and Guidance
Princple 3: Chairman and Chief Executive Officer
Principle 4: Board Membership
Principle 5: Board performance
Principles 6,7 and 8: Procedures for Developing Remuneration Policies, Level and Mix Remuration and Disclosure on Remuneration

Read the full Corporate Governance segment from FY 2024 Annual Report