About The Manager

Corporate Governance

Religare Health Trust and Religare Health Trust Trustee Manager Pte. Ltd. have since been renamed "RHT Health Trust" and "RHT Health Trust Manager Pte. Ltd." on 3 August 2016.

Religare Health Trust ("RHT" or the "Trust") is constituted as a business trust under the Singapore Business Trust and is externally managed by Religare Health Trust Trustee Manager Pte. Ltd. ("RHT TM" or the "Trustee-Manager"). The Trustee-Manager recognises the importance of upholding high corporate governance standards, which will serve to safeguard the interests of unitholders and contribute to the success of RHT. Under the Business Trusts Act, Chapter 31A of Singapore ("BTA"), the Trustee-Manager is also obliged to act in the best interests of the unitholders as a whole.

The Trustee-Manager has used the Code of Corporate Governance 2012 ("CG Code 2012") as its benchmark for best corporate governance practices and has set up policies and practices with the CG Code 2012 in mind. The Trustee Manager has also incorporated specific provisions under the Business Trust Regulations ("BTR") which may be required of the Trustee-Manager in its corporate governance framework.

The Trustee-Manager also proactively tracks the requirements under the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore ("CIS Code"), including the Property Funds Appendix in Appendix 6 of the CIS Code, as well as the various laws and regulations which are applicable to Capital Market Services Licence ("CMS Licence") holders. Wherever possible, the Trustee-Manager has voluntarily complied with the provisions under the CIS Code (including the Property Funds Appendix 6) and the laws and regulations applicable for CMS Licence holders.

In this report, we have described the main corporate governance policies and practices which the Trustee-Manager has put in place, with reference to the CG Code 2012. Any deviations from the CG Code 2012 are explained in the report.

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 of RHT TM (the "Board") provides the strategic direction for RHT, and guides management of RHT TM in achieving efficient management of the Trust. Along with monitoring the achievement of these goals, the Board is also responsible for ensuring that the management has a framework of internal and risk management controls in place, which help RHT to achieve its goals while taking into account the interest of its unitholders.

To assist the Board in the discharge of its duties, a total of 3 committees have been set up with their own terms of reference. These three committees are:

  1. the Audit & Risk Management Committee ("ARMC");
  2. the Nominating Committee ("NC"); and
  3. the Remuneration Committee ("RC");

The ARMC assists the Board in reviewing significant financial reporting issues and considering the report of the external auditor. The ARMC also oversees the risk management framework and policies of RHT and has oversight of the internal audit function. The NC supports the Board through evaluating and recommending the Board composition in terms of size, independence and skill requirements. The RC will in turn evaluate and recommend an appropriate remuneration framework to the Board. The terms of reference for each committee, as well as the members of each committee (together with their role in the committee and whether they are independent/executive) are as described in the Appendix to this Corporate Governance Report ("CG Report").

The Board of Directors meet at least 4 times a year to review and approve the financial results of RHT as well as receive key reports from both the external professionals such as the internal auditors, and senior management. The Board also review and approve, amongst others, the strategic direction of RHT, its annual budget, capital structuring, risk reports and key policies. As and when warranted by circumstances, Board meetings are also held outside of the quarterly meetings to discuss the strategies, policies or key activities of RHT such as acquisitions and disposals. Under the Articles of Association of the Trustee-Manager, board meetings are permitted to be held via way of conference by telephone or by means of similar communication equipment whereby all persons participating in the meeting are able to hear each other.

The current Directors and details of their membership on Board committees, number of Board and Committee meetings held for FY2016 between 1 April 2015 to 31 March 2016, as well as their attendance at these meetings are disclosed in the table below.

Name Board Audit and Risk Management Committee Nominating Committee Remuneration Committee
No. of meetings held No. of meetings attended No. of meetings held No. of meetings attended No. of meetings held No. of meetings attended No. of meetings held No. of meetings attended
Ravi Mehrotra 5 5 - - 1 1 - -
Gurpreet Singh Dhillon 5 5 - - - - - -
Pawanpreet Singh 5 5 - - - - - -
Dr Yogendra Nath Mathur 5 5 5 5 1 1 - -
Sydney Michael Hwang 5 5 - - 1 1 1 1
Peter Joseph Seymour Rowe 5 5 5 5 - - 1 1
Eng Meng Leong 5 5 5 5 - - 1 1

The Trustee-Manager has formalised the matters which are specifically reserved for decision and approval by the Board. These matters are in relation to:

(a) RHT's long term objectives, strategy and budget including internal limits on authority in relation to investments, acquisitions and disposals, capital expenditures.
(b) changes to RHT's structure and capital, including new unit issuances, new material debt facilities.
(c) financial reporting and internal risk controls, including significant changes in accounting policies, review of interested party transactions, conflicts of interests situations and corporate governance arrangements.
(d) communication to regulators or unitholders involving matters which has been deliberated or approved by the Board.

Outside of the matters reserved specifically for the Board's decision, the Board has delegated the management of the day to day operations to the Management of RHT TM. as well as the decision making over certain operational matters in order to facilitate operational efficiency.

Newly appointed directors to the Board of RHT TM are issued with an appointment letter that spells out his duties and obligations as a director. They will also be briefed by senior management to provide an overview of the business of RHT as well as the key policies and Board processes. Material documents pertaining to RHT are also made available to the new Directors. Where there are first time directors being appointed to the Board, they will be provided external training by professional providers, such as the Singapore Institute of Directors, on what they need to know as a director of a listed company in Singapore. The Independent Directors conduct a site visit to India every year where the assets of RHT are located. During the site visit, the Independent Directors will also meet with the India based senior management of RHT, external professionals such as internal auditors and external auditors.

The Trustee-Manager monitors new laws, regulations and rules that are implemented, for implications on RHT and RHT TM. Where relevant, Directors are updated about the changes to existing or new rules and regulations. There have been briefings conducted during board meetings whereby either the senior management or external professionals have briefed the Directors on new developments or where the Board deems that expert advice is required in order to formulate key decisions. In FY2016, management briefed the Board on the proposed changes to the regulatory regime governing reit estate investment trusts (REITS) and REIT managers. There was also a brief on the proposed Corporate Sustainability Report to be implemented by the Singapore Exchange Ltd. Our Directors also received copies of the recent guidebooks which were released in Singapore for the Risk Committee, NC and RC.

BOARD'S COMPOSITION AND GUIDANCE

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% shareholders. No individual or small group of individuals should be allowed to dominate the Board's decision making.

The Board of RHT TM is made up of 7 Directors, of which a majority or 4 of the Directors are independent and non-executive Directors.
The remaining 3 Directors, including the Chairman of the Board, are executive and non-independent Directors.

The Business Trust Regulations ("BTR") provides that:

  1. at least a majority of the directors shall be independent from management and business relationships1 with the Trustee-Manger;
  2. at least one-third of the directors shall be independent from management and business relationships with the trustee-manager and from every substantial shareholder of the trustee-manager; and
  3. at least a majority of the directors shall be independent from any single substantial shareholder2 of the trustee-manager

Once every year, and as and when the circumstances require, the NC will assess the independence of each Director. The Nominating Committee has carried out its assessment, and with the concurrence of the Board had considered and found Mr Sydney Michael Hwang, Mr Eng Meng Leong, Dr Yogendra Nath Mathur and Mr Peter Joseph Seymour Rowe to be independent from:

  1. the management and business relationships with the Trustee-Manager;
  2. the management and business relations with Stellant Capital Advisory Services Private Limited ("Stellant") (the substantial shareholder of the Trustee-Manager) and its related corporations; and
  3. Fortis Healthcare Limited (the substantial shareholder of RHT) and their related corporations.

Mr Ravi Mehrotra, our Executive Chairman, Mr Gurpreet Singh Dhillon our Chief Executive Officer ("CEO") and Mr Pawanpreet Singh, our Chief Financial Officer are not considered to be independent under the CG Code 2012 and /or the BTR Sections 3 and 4.

The current Board comprises of 7 Directors with extensive experience in various fields ranging from legal, investments, tax and accounting to healthcare. The NC has evaluated the size and composition of the Board and is of the view that the size of the Board is appropriate in relation to the scale of operations of RHT, and possesses the requisite experience for managing a healthcare infrastructure related trust such as RHT. The independent Directors have met at least once during FY2016 without management present.

1 Independent from management and business relationships with Trustee-Manager as defined under Section 3 of the BTR.
2 Independent from substantial shareholder of the Trustee-Manager as defined under Regulation 4 of the BTR.

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 concentration of power.

The positions of the Chairman of the Board and the CEO are held by two separate persons, so that there is an effective segregation of duties and accountability. The Board of RHT TM is led by our Executive Chairman, Mr Ravi Mehrotra and Mr Gurpreet Singh Dhillon is our CEO. Both Mr Ravi Mehrotra and Mr Gurpreet Singh Dhillon are not immediate family members. As Chairman of the Board, Mr Mehrotra sets the agenda for the Board meetings, engages the Directors in discussing and debating on issues while working towards important decisions. The Chairman also serves to encourage constructive relations within the Board and between the Board and management. As our non-executive Directors have diverse background and experience, the Board and management benefit from their views on matters being tabled before the Board.

As Executive Chairman of the Board, Mr Mehrotra plays a key role in guiding the strategy of RHT and monitoring the performance of the management. The CEO is responsible for managing the daily operations of the Trust and the Trustee-Manager in accordance with the business plans and strategies as set out by the Board.

There is clear segregation of roles within the Board and the ARMC, NC and RC each have their own terms of reference and responsibilities. The three Committees are each headed by a different independent Director, and there is no individual Director on the Board who has a considerable concentration of power.

We have appointed Dr Yogendra Nath Mathur as our lead independent Director, who serves as a conduit between unitholders and the Board, or between the independent directors and the Board, wherever there are concerns from from either party.

The independent directors have private sessions without the presence of management, and also have feedback sessions with the Chairman without management around.

BOARD MEMBERSHIP

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

The Board had approved the establishment of an NC comprising of a majority of independent directors, including the lead independent director. The role of the NC under its terms of reference as approved by the Board includes making recommendations on:

  1. the review of board succession plans for directors, in particular the Chairman and CEO;
  2. the development of a process for evaluation of the performance of the Board, its board committees and directors;
  3. the review of training and professional development programs for the Board; and
  4. the appointment and re-appointment of directors.

When conducting a search for a new director, the Board will shortlist suitable candidates based on criteria which will be drawn up taking into consideration the roles and expertise that is required of the new director and the needs of the Board. The potential candidates may originate from various sources such as recommendations from the management and Directors, the Singapore institute of Directors or utilising external search consultants. The shortlisted candidates will be put forth to the NC for consideration, with the final candidate as selected by the NC being put to the Board for approval.

Under the appointment letters signed with the Independent Directors that are appointed to the Board of RHT TM, the directors are required to put themselves up for re-nomination and re-election once every 3 years.

The NC is also tasked with ascertaining if each Director, having multiple directorships, is able and has been adequately carrying out his duties as a Director. This review is done by the NC once a year, and takes into consideration the director's number of listed company board representations and other principal commitments. The NC holds the view that the number of directorships held by a Director does not determine the performance of the Director. A Director's performance is assessed based on a number of factors including their time commitment towards Board meetings and discussions, their ability to draw on their experience to contribute to the strategy and decision makings required of the Board. As such, the NC proposed with the concurrence of the Board, to not fix a limit on the number of directorships which a Director may hold but rather to assess the performance of each Director as a whole.

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.

An annual formal assessment is conducted on the effectiveness of the Board, the Board Committees and on each Director. The assessment is conducted using an evaluation form which is constantly updated for relevance. The evaluation form seeks feedback from each Director on a confidential basis, on their views relating to:

  1. Board composition and size;
  2. Board and Committee process;
  3. Board's effectiveness and training;
  4. Board's Committees;
  5. Board Committee process;
  6. Provision of information to the Board;
  7. Standards of conduct;
  8. Assessment of the financial performance of RHT; and
  9. Board compensation.

For the annual assessment conducted in respect of the financial year ended 31 March 2016 ("FY2016"), the Company Secretary was responsible for sending and collating the information provided by each Director in response to evaluation form. The results of the evaluation survey were then presented to the NC for its assessment and recommendations. In formulating the feedback form, attention was given to ensuring feedback was sought from the Directors on the core areas, whilst also providing room for each Director to freely express their opinions on other matters in a confidential manner. The results of the evaluation, and the NC's recommendations, were put up to the Board for their concurrence.

ACCESS TO INFORMATION

Principle 6: In order to fulfil their responsibilities, directors should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis so as to enable them to make informal decisions to discharge their duties and responsibilities.

The calendar for Board and Committee meetings are scheduled one year in advance to allow for better planning. Management provides the Board with monthly reports and/or calls, in addition to board papers on matters which are being tabled during the Committee or Board meetings. Board papers are sent to the Board approximately five business days before the meeting takes place. Directors are also entitled to request for separate and independent access to the management, the company secretary or external professionals. The Chairman of the ARMC meets separately on a regular basis with each of the management, the internal auditor and external auditor. Such meetings take place on a quarterly basis with the management and internal auditors, and on a half yearly basis with the external auditor. As stipulated in the Director's appointment letter, they are also entitled to seek independent professional advice relating to their role and responsibility as a Director of RHT TM.

The management provides the Board with a call and/or a report each month on the operating environment and management financials of RHT. During the quarterly Board meetings, matters such as the financial results, the report from the independent auditors, management's internal risk assessment report, business and operational updates for the quarter are presented for the Board's review. Once a year, the strategy, forecast and annual budget is presented for the Board's review and approval. On an on-going basis, where there are material variances against the forecast and actual financial figures, explanations would be provided.

The Company Secretary attends all Board and Board Committee meetings and is responsible for keeping accurate minutes on the proceedings. Their advice on matters relating to corporate governance may also be sought during these meetings. The Head of Compliance in RHT TM works together with the Company Secretary to ensure good and timely information flow to the Board of Directors. Where there should be any proposed change to the Company Secretary, this would be put to the Board for approval.

REMUNERATION MATTERS

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

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 personnel, and performance.

The Board had approved the establishment of a RC with its own terms of reference. The RC comprises of wholly independent non-executive Directors, and they are responsible for reviewing the reviewing the remuneration policy and framework of the Directors and the key management.

In the RC meeting held in February 2016, the RC had reviewed the compensation structure for the Directors, as well as the compensation structure and package for the key management of RHT TM respectively. Under RHT TM's compensation structure for its Directors, Executive Directors are not be paid any Director's fee, while Non-Executive Directors are paid a base fee which is a fixed amount, with a variable fee for every additional role which each Director may take on. This serves to compensate the Directors according to the amount of responsibility, time and effort required of that role. In general, the Chairman of the Board Committees is paid higher variable fees compared to that of members of the Committees. The remuneration framework for the non-Executive Directors is as shown in the following table.

Fee Base Fee Variable Fee
Executive Director Nil Nil
Non-Executive Director Base Fee (BF) p.a. Chairman Member of Committee
50% of BF as Chairman of Board/ARMC 15% of Base Fee
25% of BF as Chairman of RC/NC

Non-Executive Directors' fees are benchmarked against the market and industry levels to ensure that the amounts are sufficient to motivate and attract Directors, without being too generous to pose a potential compromise of the independence of the Directors. The remuneration that is paid to the Directors of RHT TM are determined and paid from RHT TM (in its personal capacity) as approved by its shareholder Stellant, and not out of RHT Trust property. Directors' fees paid to each of the following non-Executive Directors for FY2016 did not exceed S$250,000:

Mr Eng Meng Leong;
Mr Sydney Michael Hwang;
Dr Yogendra Nath Mathur; and
Mr Peter Joseph Seymour Rowe.

Once a year, a review would be carried out of the remuneration framework and the amounts paid to key management of RHT and RHT TM. The Trustee-Manager has put in place a performance based remuneration framework for its key management. Currently, the key management of RHT TM, including the Chief Executive Officer ("CEO"), are paid a fixed yearly salary with a performance related bonus that is tied to the performance of RHT TM. The performance of RHT TM is in turn linked to the performance of RHT. The main regular source of revenue earned by RHT TM is from the fees paid from RHT to RHT TM. The fees payable by RHT to RHT TM are based on (i) the value of the assets under management at RHT and (ii) the amount of distributable income generated at RHT. The greater the growth of the value of RHT's assets and the amount of distributable income available for unitholders of RHT, will result in higher revenue for RHT TM. The Trustee-Manager has also elected for the variable bonus to make up a higher proportion of the total salary payable to key employees, in order to tighten the link between the performance of the individual and their remuneration.

To assist the RC in their assessment on the appropriate compensation level for key management, a report is commissioned yearly to provide information on the remuneration paid by comparable peers in the industry. Similar to the Directors, key management and employees of RHT TM are paid by the Trustee-Manager and not out of RHT Trust property. In FY2016, the management of RHT TM had disposed of their shares in the RHT TM which were granted pursuant to a Management Incentivisation Plan (the "MIP"). The disposal of the management's MIP shares took place alongside the sale of the remaining issued and paid up share capital of RHT TM from RGAM Investment Advisors Private Limited to Stellant Capital Advisory Services Private Limited ("Stellant") on 2 February 2016. The MIP was terminated post the sale of RHT TM to Stellant. Currently there is no other share incentive or employee share option scheme in place for the management.

No Director or employee of RHT TM is paid in the form of shares or interests in the Trustee Manager's controlling shareholder or its related entities.

The following table shows the remuneration in bands of S$250,000, of the CEO, CFO as well as the top two key executive officers of the Trustee-Manager. The key executives of the Trustee-Manager are based on the importance of their roles in Trustee-Manager. The Trustee-Manager is of the view that the disclosure of the specific remuneration of each of the management and key employee may lead to retention or recruitment difficulties in light of the relatively small number of trusts currently operating in Singapore. Futhermore, the remuneration paid to the management of RHT TM is from RHT TM, and not out RHT's Trust Property.

Executive Directors Remuneration Band Fixed Salary Bonus
Gurpreet Singh Dhillon S$ 751,000–1,000,000 66% 44%
Pawanpreet Singh S$ 500,001–750,000 53% 47%
Key Management Remuneration Band Fixed Salary Bonus
Tan Suan Hui S$ 251,000–500,000 53% 47%
Alex Lim Zhi Wei S$ 0–250,000 51% 49%

Dr Ramnik Ahuja who is employed as Vice President of Research and Strategy, is the spouse of Mr Pawanpreet Singh, the Chief Financial Officer and Executive Director of RHT TM. Her annual remuneration fell in the band of S$50,000–100,000 in FY2016.

Currently, none of the Directors or key management has a contract with RHT TM that contain provisions on termination benefits.

ACCOUNTABILITY AND AUDIT

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

The Board is committed to providing unitholders of RHT with a balanced and understandable assessment of RHT's performance, position and prospects. The financial results of RHT as well as any other material price sensitive information are disseminated out via the SGXNET as well as put up on the website of RHT, as well as via investors meetings and quarterly conference calls with investors.

As mentioned under Principle 6 on Access to Information, the Board is provided with a monthly report on RHT, which summarises the key financial performance of RHT against that forecasted, as well as the business environment and pertinent operations of RHT. Where there are material differences from month to month, explanations are provided to the Board. The Board has also approved an internal Compliance Manual which compiles the relevant rules and regulations applicable to both RHT and RHT TM. This Compliance Manual serves to assist management in meeting the regulatory requirements.

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 members of the Audit & Risk Management Committee ("ARMC") of RHT TM are appointed from among the Directors of the Board and comprise of 3 non-Executive independent Directors. They are:

  1. Mr Peter Joseph Seymour Rowe, Chairman
  2. Dr Yogendra Nath Mathur
  3. Mr Eng Meng Leong

Within the role and function of the ARMC, it is provided that the ARMC may investigate any matter within the ARMC's terms of reference, whenever it deems necessary, where it should have full access to and cooperation by the management and full discretion to invite any Director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly.

The ARMC met 5 times in FY2016. During the year, the ARMC reviewed the quarterly and full year results of FY2016, including the adequacy of disclosures as well as the key changes in accounting policies applied. Management is kept abreast of changes in the accounting standards by both the external auditors and other sources. Every year, management perform a diagnostic of the changes in the accounting standards applicable to RHT, and brief the ARMC and Board about such changes.

On a quarterly basis, the ARMC also reviews the reports from the internal auditors with respect to their findings as well as the internal risk committee of RHT TM on changes in key risks and policies affecting RHT. There are also quarterly reports provided by the management to the ARMC on the actions taken to resolve previous internal audit findings. In addition, management prepares a liquidity report on RHT for the ARMC's information and review. Key policies are reviewed by management on a regular basis to ensure that they are up to date and put up to the ARMC for approval to be put to the Board.

All interested party transactions ("IPT") are tabled to the ARMC, including the terms on which the IPT were conducted. This is in accordance with our IPT policy, which sets out the procedure whereby such transactions are identified, reported and recorded down in the IPT register. The terms of the transactions, including information to support that the transactions are conducted on normal commercial terms, are also recorded in the register.

Details of the Interested Person Transactions entered into between the RHT Group and with interested persons (including Fortis, Religare Enterprises Limited and their respective subsidiaries and associates) during the course of the current financial year ending 31 March 2016 which fall under the Listing Manual of the SGX-ST are set out below.

No. Interested Person Nature of Transaction Value of Transaction (S$)(1) Percentage of NTA (2)
1 Religare Invesco Mutual Fund Investment as a treasury transaction 3,809,270 0.55%
2 Religare Healthworld Ltd Revenue share from pharmaceutical operations 1,561,723 0.23%
3 Religare Infrafacilities Ltd Rental and administrative charges for RHT Corporate office in India 146,071 0.02%
4 SRL Ltd Revenue share from pathology operations 543,324 0.08%
5 Religare Health Insurance Company Ltd Medical and accident policy for RHT India staff 64,317 0.01%
6,124,705 0.88%

(1) Values are converted at the end of each month as per the prevailing exchange rate at that month end.
(2) Based on the latest audited net tangible assets of RHT as of 31 March 2016 of S$692,985,000

RHT's excess cash balances are invested with Religare Mutual Fund from which RHT receives interest income. The transactions with Religare Healthworld Ltd and SRL Ltd involve the leasing out of space at various RHT Clinical Establishments to companies owned by Religare Entreprises Ltd. RHT in turn has leased office space from Religare Enterprises Ltd to cater for the RHT personnel that are based in India. This office lease arrangement was terminated on 31 March 2016. The medical insurance plan for the staff in RHT India was purchased from Religare Health Insurance Company Ltd.

The ARMC also reviews the audit plans for both the internal and external auditor for the forthcoming year. In FY2016, both the external and internal auditors each met at least once during the year with the ARMC without management being present. In the same financial year, the Chairman of the ARMC also met separately with the internal auditors once every quarter and separately with the external auditor twice. It is also the practice of the Chairman of the ARMC to meet with the Chief Financial Officer of the Trustee-Manager prior to the quarterly ARMC meetings to review the financial reports.

One of the roles of the ARMC is to review the independence of the external auditors. For FY2016, the ARMC noted that S$346,000 was paid to the external auditor as audit fee and S$28,000 was paid for non-audit services. A discussion was held with the external auditor in relation to the type of non-audit services that were provided, and the ARMC was satisfied with the independence of the external auditor. No ARMC member is a former partner or director with the external audit firm.

The Trustee Manager has complied with Rule 712 and 715 of the SGX-ST listing manual. All of RHT's foreign incorporated subsidiaries are audited by Deloitte Haskins & Sells LLP ("DHS"). The ARMC has assessed the track record and capabilities of DHS and the partner in carrying out work for similar companies in India. They have also discussed with DHS, the manner in which audit work is proposed to be carried out by DHS. The ARMC is of the view that DHS is a suitable audit firm to meet the RHT Group's audit obligations.

RHT TM has established a whistle blowing policy to provide a channel for whistleblowers to report any actual or suspected wrongdoings, as well to provide assurance that the whistleblower will be protected from reprisals or victimization for whistle blowing. The whistleblowing policy and procedure is approved and overseen by the ARMC, and it provides for both the employees and the public to raise concerns to both the Head of Compliance of RHT TM and/or the Chairman of the ARMC. Investigations will commence upon receiving a whistleblowing report and follow up actions would be taken if required.

INTERNAL AUDIT

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

The Trustee-Manager is committed to having an internal audit function at all times. The current internal audit firm which has been appointed to perform the function for RHT is KPMG Services Pte Ltd. The selection and appointment of the internal audit firm for RHT was determined by the ARMC, and the internal audit plan for each financial year is approved by the ARMC. The scope of the internal audit is intended to cover key aspects of RHT and RHT TM's internal controls in the areas of finance, operations, compliance and information technology. During the course of their work, the internal auditors are given full access to any documents, records or personnel, and they report directly to the ARMC Chairman.

As mentioned under the section "Audit Committee", the Chairman of the ARMC meets the internal auditors every quarter. These meetings take place without the management being present, which allows the discussions to be as open and candid as possible. The ARMC has reviewed the internal audit plan for the FY2017, the resources allocated to carrying out the plan, as well as the work done by the internal auditors over FY2016, and they are satisfied with the adequacy and effectiveness of the current internal auditor.

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 shareholders' interests and 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.

Having an effective and sound system of risk management and internal controls system in place enables the Trustee-Manager to achieve its strategic objectives, whilst keeping the business and assets of RHT secure. An effective risk management system keeps both management and the Board up to date with the key risks and challenges that RHT faces, it also serves to guide the Trustee-Manager in its decision making and allocation of resources.

Keeping with the above goal of having a sound system of risk management and internal controls, the Trustee-Manager has established an internal risk committee ("IRC") comprising of senior management, to undertake the task of managing the risk management system and internal controls. Under the Trustee-Manager's risk management system, the IRC is responsible for the identification of risks. Key risks are rated and the controls for mitigating the risks are evaluated. A register is maintained which tracks the rating of each key risk post the controls that have been put in place. Each IRC member is responsible for risks in their respective areas such as finance, operations, compliance, investments, information technology.

The IRC meets on a quarterly basis, or where the situation requires, to evaluate how the risks facing RHT might have evolved following changes in both the operating environment and internal operations of RHT. Key risk indicators are used as a means for early identification of escalating risks or signals of changes in areas that affect RHT. The key risk indicators will be able to assist management and the Board in signaling issues that may be developing (whether internally or externally) which can potentially have an adverse impact on RHT. Key risk indicators can also provide information to the management and the Board to consider when executing strategies for RHT.

The IRC also debates on whether new processes or existing processes need to be implemented in order to manage any of the new risks. During some of the IRC meetings, relevant staff might be invited to join the meetings or discussions in order to brief the IRC in terms of changes that might have occurred in their respective areas, and to give their views on how new risks might have risen. The involvement of various staff within RHT in risk management discussions help to promote a culture where risk awareness and governance is integral to the daily operations of RHT.

The IRC also regularly meets with the internal auditors, in order to compare each's assessment of the key risks and the adequacy of the internal controls. This helps to ensure that there are all gaps are filled wherever possible and no key risk is inadvertently left out. The implementation of control self assessment ("CSA") exercise is also being rolled out within RHT. The aim of the CSA is to raise the awareness of staff within RHT in relation to key policies and processes, as well as allow themselves to undertake a check on whether they have been complying with these processes.

The discussions of the quarterly IRC are put up to the ARMC at each quarter's meeting, where the ARMC will assess the effectiveness and adequacy of the risk management and internal controls within RHT TM. This is complemented by a quarterly report provided by the internal auditor to the ARMC on their findings, together with a quarterly report from management on the actions taken to address issues which had been highlighted previously by the internal auditors. Apart from the quarterly reports by the internal auditor, the internal auditor also provides the ARMC with an annual review of the adequacy and effectiveness of the internal controls within RHT, including financial, operational compliance and information technology controls. Where there are areas for enhancements, the internal auditor will highlight it to the ARMC.

Both the ARMC and the Board also receives a quarterly letter of assurance from the CEO and CFO in relation to the quarter's and/or full year results (whichever is applicable). The letter provides assurance in terms of the proper maintenance of the financial records of RHT, and that the financial statements give a true and fair view of the RHT's operations and finances, and in relation to the effectiveness of RHT's risk management and internal control systems.

After assessing the internal risk management framework that is in place, as well as the quarterly reports from the IRC and internal auditor, coupled with the annual assessment undertaken by each of the internal auditor and external auditor, the ARMC and Board are in a position to comment on the adequacy of the internal controls of RHT.

For FY2016, based on ARMC's review of the internal risk management framework and internal controls which the management of RHT TM has put in place, the creation of an IRC to continuously monitor the risks affecting RHT and evaluate the efficacy of the internal processes, as well as the reports from the internal auditor and external auditor, the Board with the concurrence of the ARMC, is of the opinion, that RHT has in place reasonable, adequate and effective risk management and internal controls including financial, operational, compliance and information technology controls.

However, the Board notes that the risk management structure which the Trustee-Manager has been put in place cannot provide absolute assurance that RHT will not be affected by any event that may be foreseen as well as poor judgement and decision making, human error, fraud and other irregularities.

Material Contracts

There were material contracts subsisting at the end of FY2016, between RHT Group and Fortis. Most of these contracts were entered into at the time of the listing of RHT on the SGX-ST. These material contracts are summarised within the section "Exempted Agreements" in the RHT IPO prospectus which can be found on the RHT's website www.rhealthtrust.com. These exempted agreements were deemed to have been specifically approved by unitholders upon their subscription for the units of RHT at the time of the initial public offering of RHT. There was another Hospital and Medical Services Agreement entered into in FY2015, between RHT Group and Fortis, during the acquisition of the Mohali Clinical Establishment.

UNITHOLDERS RIGHTS AND RESPONSIBILITIES

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

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

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

The Trustee-Manager ensures that material information is disseminated to unitholders on an accurate and timely basis, with full and complete information to enable unitholders to make form their investment decisions. Our announcements are all disseminated via the SGXNET and the RHT website, www.religarehealthtrust.com. Where necessary, the announcements may also be placed in the local newspapers. There is no selective disclosure of information.

Every quarter, after the release of our financial results, or when there are announcements on material corporate actions, the Trustee-Manager will hold both analyst briefings as well as investor conference calls. The analyst briefings facilitate research coverage on RHT, to enable a more independent analysis from the analysts. The investor calls present great opportunity for investors to hear from the management, and to have their questions answered.

The management participates actively in investor conferences which are held in different locations throughout the year, and embark on dedicated non-deal roadshows. By reaching out to investors through such means enables the management to obtain direct feedback from investors or analysts. The Board is in turned briefed each quarter by management on the conferences and investors meetings which had been held, in order for them to understand the investors' views.

Whenever a unitholders' meeting is to be held, the notice will be disseminated to each unitholder together with the circular and/or report, as well as published in the local newspapers and via SGXNET. Should any unitholder not be able to attend the meeting, he is allowed to appoint up to two proxies to vote on his behalf at the meeting. Where there are separate issues to be put forth for unitholders' approval at the general meetings, such resolutions are separate and not bundled together, unless the resolutions are interdependent and form one significant proposal.

We had one annual general meeting in FY2016, at which the full Board of Directors was present. The external auditor was also present to address unitholders' queries regarding the conduct of audit, preparation and content of the auditors' report. Our company secretary had prepared the minutes of the annual general meeting, which included relevant comments or questions from unitholders, and the minutes is available for unitholders upon request. In the annual general meeting, the voting was conducted by way of a poll in order to promote greater transparency and allow exact and definitive results at the general meeting. The detailed results of the annual general meeting, which included the number of votes cast for and against each resolution, was disclosed via the SGXNET.

DEALING IN UNITS

It is RHT TM's internal policy that (i) an officer of the Trustee-Manager should not deal in RHT's units on short term considerations; (ii) the Trustee-Manager and its officers should not deal in RHT's units during the period commencing two weeks before the announcement of RHT's quarterly financial results, and one month commencing before the announcement of RHT's fourth quarter and full year results. Reminders are sent to the Board of Directors as well as the staff of RHT TM when such blackout periods for trading in RHT's units commence.

At any point in time, when any of the Directors or officers are in possession of confidential and price sensitive information, they are also reminded not to trade in the units of RHT, and to be mindful of the laws relating to insider trading at all times.

STATEMENT OF POLICIES AND PRACTICES

The Board of Directors of RHT TM and the RHT TM (in its capacity as trustee-manager of RHT) are responsible for safeguarding the interests of the unitholders of RHT as a whole and managing the business of RHT. RHT TM is also required to act in the best interests of the unitholders of RHT as a whole, and give priority to the interests of unitholders of RHT over its own interests in the event of a conflict between the interests of all unitholders as a whole and its own interests. The Trustee-Manager has put in place policies and practices in the management and governance of RHT, in order to ensure that RHT is managed in the interests of its unitholders. The policies and practices include ensuring that:

  1. The Trust Property is properly accounted for and such property is kept distinct from the property of the Trustee-Manager held in its own capacity.
    The Trustee-Manager has both separate bank accounts for RHT and RHT TM and also separate accounting teams to handle the accounts of RHT and RHT TM. The Trustee-Manager also prepares separate budgets for RHT and RHT TM which are approved by the Board. Any material deviances are explained to the Board. The financial accounts are audited by the external auditor and approved by the Board of RHT TM.
  2. Adherence to business scope.
    RHT's investment mandate is to invest in medical and healthcare assets and services in Asia, Australasia and emerging markets in the rest of the world. RHT may also develop medical and healthcare assets. It is expected that the medical services will be provided directly by RHT or in collaboration with third parties. The Head of Compliance within the Trustee-Manager checks that the business scope of RHT is consistent with the requirements of the Trust Deed. Should there be any intention to deviate, it will be brought to the attention of the Board of Directors. In addition, whilst the Trustee-Manager currently has no intention of owning and and fully operating and managing hospitals other than the operating hospitals of Rajajinagar and Nagarbhavi, if RHT should in the future wish to own and fully operate and manage hospitals other than Operating Hospitals, the approval of unitholders will be sought.
  3. Conflict of interests.
    The promoters of the controlling shareholder of RHT TM are the same as that of FHL, which is the Sponsor of RHT. As such, there may be potential conflict of interests between RHT TM, RHT and the Sponsor. Trustee-Manager has the following processes in place to mitigate such potential conflicts of interest:
    • The Board of RHT TM comprises of 7 Directors, 4 of whom are independent from management and business relationships with the Trustee-Manager and from the Sponsor. Where any Director has an interest in any transaction involving the Sponsor and/or its subsidiaries, that Director will abstain from voting on the transaction. The same resolution is also required to be approved by all the Independent Directors. In particular, the CEO and CFO, both of whom are executive directors on RHT TM, do not have any positions within the Sponsor or its related entities.
    • As mentioned in "Adherence to business scope", should the RHT contemplate entering into operation and management of hospitals, which is the core business of the Sponsor, the approval of unitholders will be sought.
    • Similarly, should any Director have interest in any transaction or entity with competing interests to RHT, they would also abstain from voting on such matters. The CEO and CFO are both dedicated to RHT TM on a full time basis and they do not have any positions in an entity with competing interests to RHT.
  4. Procedures for interested party transactions.
    The Trustee-Manager has instituted internal controls to ensure that interested party transactions which fall below the threshold that require unitholders approval as provided under the listing manual of the SGX-ST, are undertaken on normal commercial terms and are not prejudicial to the interests of the unitholders of RHT. It is also included in the scope of the work done by the internal auditor, to check on the adherence to such internal controls for interested party transactions. Further information on the processes which are in place for interested party transactions is included under the section on "Audit Committee".
  5. Expense and cost allocation to RHT.
    • Fees payable to RHT TM out of Trust property are provided in the Trust Deed constituting RHT (as amended, dated 25 September 2012), as well as disclosed in the RHT initial public offering ("IPO") prospectus issued on 15 October 2012, and approved by unitholders via subscription in the units of RHT at the time of the IPO. Should there be any change to the structure of the fees payable to the Trustee-Manager, this would need to be approved by the unitholders of RHT at a general meeting. The fees payable to RHT TM are put up to the Board for approval every half yearly. Where there issuance of units in RHT to be made as payment of fees, the timelines for the issuance of such units strictly the follow the internal timelines approved by the Board. The fees that have been paid to the Trustee-Manager out of Trust property in FY2016 is as follows:
      Amount S$('000)
      Management Fee 6,326
      Trustee Fee 266
      Acquisition Fee 163
      Total Fee 6,755
    • Fees and expenses charged to RHT are appropriate and in accordance with Trust Deed. The Trust Deed specifies what kind of expenses can be charged to RHT which RHT TM adheres to.
  6. Compliance with Business Trusts Act and listing rules.
    The Trustee-Manager has an internal compliance manual which serves to summarise all the applicable rules and regulations as well as key internal policies and processes which RHT and RHT TM need to comply with. The compliance manual is consistently updated whenever there are changes in the rules and regulations, and it helps management to check that applicable rules and regulations are being followed. The Trustee-Manager has also appointed an external legal firm on a retainer basis to advise on matters related to its compliance with the Business Trust Act and SGX listing rules.

FEES PAYABLE TO THE TRUSTEE-MANAGER

Under the revised Code of Collective Investment Scheme (the "CIS Code") issued by MAS which took effect on 1 January 2016, where fees are payable out of the deposited property of a property fund, the methodology and justifications for each type of fees payable should be disclosed. While RHT is constituted as a Business Trust, and is not required to comply with the CIS Code, management has elected to disclose the fee computation methodology in this report for greater transparency. All the fees below are payable to the Trustee-Manager in the form of cash and/or Units (as the Trustee-Manager may elect) at the prevailing market price.

Fee Payable by RHT Rationale for Fee
Management Fee
(1) Base Fee
The base fee ("Base Fee") is 0.4% per annum of the value of the Trust Property3 , and paid quarterly in arrears.
The Trustee-Manager receives a Management Fee (comprising of the Base Fee and Performance Fee) from RHT for managing all aspects of RHT, including but not limited to, managing and enhancing the assets, financing needs, investor relations and ensuring regulatory compliance.
The Base Fee increases in line with any increase in value of RHT's assets, reflecting the increase in work load and scope with a greater volume of assets being managed. In addition, it serves to incentivise the Trustee-Manager to increase the value of the assets through asset enhancement initiatives or other means.
Performance Fee
The performance fee ("Performance Fee") is 4.5% of the Distributable Income of RHT (as defined in the Trust Deed)4 , and paid quarterly in arrears.
The Base Fee and Performance Fee are payable to the Trustee-Manager in the form of cash and/or Units (as the Trustee-Manager may elect) at the prevailing market price.
The Performance Fee is pegged to the amount of Distributable Income generated at RHT for unitholders. The ability of RHT TM to generate higher revenue and manage expenses for RHT, the higher the Distributable Income available for unitholders of RHT. This has the effect of directly aligning the interests of the Trustee-Manager with that of the unitholders of RHT.
(2) Trustee Fee
The trustee fee is 0.03% per annum of the value of the Trust Property, subject to a minimum of S$15,000 per month, and paid quarterly in arrears.
As RHT TM performs the dual functions of both a manager and a trustee for RHT, it also charges a trustee fee. This trustee fee is pegged to the value of the assets to reflect the increase in volume and scope of work with an increase in asset value.
3 "Trust Property" has the meaning ascribed to it in the Business Trusts Act.
4 "Distributable Income" means the distributable amount determined by the Trustee-Manager in accordance with the terms of the Trust Deed to be distributable for the relevant distribution period (pro-rated if applicable based on the number of months the relevant financial quarter bears to such distribution period).

Any other substantial fee or charge (i.e. 0.1% or more of RHT's asset value)

Fee Payable by RHT Rationale for Fee
Acquisition Fee
(3) The acquisition fee ("Acquisition Fee") will be:
  • where the Sponsor Group or the Religare Group (as the case may be) has direct or indirect interests of more than 50.0% in any investment acquired directly or indirectly by RHT, 0.5% of the acquisition price of the investment (pro-rated if applicable to the proportion of RHT's interest in the investment acquired); and
  • in all other cases, 1.0% of the acquisition price of any investment acquired directly or indirectly by RHT (pro-rated if applicable to the proportion of RHT's interest in the investment acquired).
In connection with the Performance Fee, the Acquisition Fee serves to encourage the Trustee-Manager to look for yield accretive quality assets to add to the portfolio of RHT. When undertaking an acquisition, a fair amount of time and expenses are incurred due to the lengthy process involved when carrying out due diligence and the number of external professionals involved. The Acquisition Fee also serves to compensate the Trustee-Manager for the additional time and expenses outside of that incurred for day to day operating expenses. The lower divestment fees payable to investments acquired from the Sponsor Group or promoter linked companies reflect the reduced effort required in sourcing for the acquisition.

Notwithstanding the above, in the event that any investment is held by the Religare Group as a nominee or in a fiduciary capacity or otherwise pursuant to any contractual obligation entered into in its ordinary course of business, the Acquisition Fee payable on the acquisition of such investment by RHT (if applicable) shall be 1.0% of the acquisition price of any investment acquired directly or indirectly by RHT (pro-rated if applicable to the proportion of RHT's interest in the investment acquired).

No Acquisition Fee is payable to the Trustee-Manager in connection with the acquisition of the portfolio acquired at the time of the initial public offering (the "Initial Portfolio"), the acquisition of the Sponsor's 51.0% interest in FHTL pursuant to the FHTL Call Option5 and the CCPS Subscription.

Any payment to third party agents or brokers in connection with the acquisition of any asset of RHT shall be paid by the Trustee-Manager to such persons out of the Trust Property of RHT, and not out of the Acquisition Fee received or to be received by the Trustee-Manager.

Divestment Fee
(4) The divestment fee ("Divestment Fee") will be 0.5% of the sale price of any investment sold, transferred or otherwise disposed of by RHT, whether directly or indirectly (pro-rated if applicable to the proportion of RHT's interest in the investment sold, transferred or disposed).


Where it is deemed to be in the best interests of unitholders, RHT TM may recommend the divestment of certain assets in the portfolio in order to unlock value. The process of undertaking a divestment incurs time and expenses, including that of appointing external professionals, above that of normal day to day management of the trust. The Divestment Fee serves to compensate the Trustee-Manager for undertaking the divestment process. Management Fee arising from a smaller portfolio would serve to lower the possibility of indiscriminate selling by RHT TM.

No Divestment Fee is payable to the Trustee-Manager for the divestment by RHT to the Sponsor or its nominees of (i) the securities in FHTL pursuant to the FHTL Put Option6 and the put option in favour of Fortis Global Healthcare Infrastructure Pte. Ltd. ("FGHIPL") in the FHTL CCD Subscription Agreement, and (ii) the CCPS pursuant to the put option in favour of Kanishka Healthcare Limited ("KHL") in the CCPS Subscription.

Any payment to third party agents or brokers in connection with the divestment of any asset of RHT shall be paid by the Trustee-Manager to such persons out of the Trust Property of RHT, and not out of the Divestment Fee received or to be received by the Trustee-Manager.

5 To govern the relationship of the Sponsor and FHML as shareholders of FHTL, the Sponsor, FHML and FHTL had entered into a shareholders' agreement dated 17 September 2012 (the "FHTL Shareholders' Agreement"). Under the FHTL Shareholders' Agreement, FHML, a wholly owned subsidiary of RHT, has a call option on the remaining 51.0% of the issued equity shares in FHTL, which are held by the Sponsor ("FHTL Call Option"). The FHTL Call Option is exercisable if at any time the Sponsor becomes entitled to transfer such 51.0% shareholding interest after having obtained all necessary regulatory consents and approvals.
6 FHML, a wholly owned subsidiary of RHT, is entitled to exercise a put option granted to it under the FHTL Shareholders' Agreement, to require the Sponsor to purchase all its securities in FHTL including its 49.0% shareholding in FHTL (the "FHTL Put Option").
Fee Payable by RHT Rationale for Fee
Development Fee
(5) 2.0% of the total project costs7 for undertaking (directly or indirectly) a
Development Project on behalf of RHT incurred (pro-rated if applicable to the interest of RHT in the Development Project).

"Development Project" means a project involving the development or redevelopment of medical and healthcare assets which are acquired or held by RHT. For the avoidance of doubt, this includes any redevelopment undertaken on the Initial Portfolio.

A development project involves the construction of new assets which is frequently carried out over a few years. Developing a project requires a dedicated project team to be assigned to oversee the project and often includes the appointment of specialised external project managers as well. The development fee compensates the Trustee-Manager for maintaining a separate team of personnel and the expenses related to the project over the years.
Asset Management Fee
(6) 1.0% of the total Gross Revenue8 for asset management services provided in respect of assets in the Trust Property, and paid quarterly in arrears.

No Asset Management Fee will be payable in respect of assets operated by the Sponsor Group. For the avoidance of doubt, no Asset Management Fee is payable to the Trustee-Manager in respect of the Initial Portfolio and the CCPS in EHIRCL held pursuant to the CCPS Subscription.

In managing RHT's assets, RHT TM incurs expenses, including but not limited to, ensuring the smooth running of assets for the operators, compliance with regulations, negotiations with vendors. This asset management fee will reimburse the Trustee-Manager for such expenses incurred.

By linking the asset management fee of the Trustee-Manager to that of the gross revenue of the operator aligns the interests of the Trustee-Manager with that of the unitholders of RHT. As a portion of RHT's revenue is pegged to the gross revenue of the operator, a higher revenue generated by the operator results in higher revenue for RHT. The Trustee-Manager by being incentivised to manage the assets in such a way that generates more revenue g for the operator, in turn also benefits the unitholders of RHT.

7 "Project costs" refers to the costs incurred in connection with the Development Project, including payments of additional premiums or amounts to regulatory authorities in connection with the development of the land, but shall exclude the purchase price of the land and financing costs relating to the Development Project.
8 "Gross Revenue" means revenue attributable to the investments forming part of the Trust Property of RHT, whether directly held by the Trustee-Manager or indirectly held by the Trustee-Manager through a holding vehicle.
Fee Payable by RHT Rationale for Fee
Marketing Services Fee
(7) Where the Trustee-Manager secures a lease (outside India) and/or service contract with any person (other than a member of the Sponsor Group) for a particular medical and healthcare asset (or part thereof) on behalf of RHT, the Trustee-Manager will be entitled to a marketing services fee
("Marketing Services Fee ") of:
  • One month's gross rent and/or service fee (including service charges) for securing new leases and/or service contracts or renewal of leases and/or service contracts with a lease and/or contract term of less than five years.
  • Two months' gross rent and/or service fee (including service charges) for securing new leases and/or service contracts or renewal of leases and/or service contracts with a lease and/or contract term of five years or more.
The Marketing Services Fee is structured to incentive the Trustee-Manager to secure leases with for RHT's assets with longer lease terms and which command a higher revenue. There is also a higher Marketing Service Fee payable when it involves a new tenant due to the extra work involved in sourcing and attracting new operators for RHT's assets.
Marketing Services Fee
(7) If a third party agent secures a lease (outside India) and/or service contract with any person (other than a member of the Sponsor Group) for a particular medical and healthcare asset (or part thereof) on behalf of RHT, the Trustee-Manager will be responsible for all marketing services fee payable to such third party agent, and the Trustee-Manager will be entitled to a Marketing Services Fee of:

  • 1.2 months' gross rent and/or service fee (including service charges) for securing new leases and/or service contracts or renewal of leases and/or service contracts with a lease and/or contract term of less than five years; and
  • 2.4 months' gross rent and/or service fee (including service charges) for securing new leases and/or service contracts or renewal of leases and/or service contracts with a lease and/or contract term of five years or more.

For the avoidance of doubt, the Marketing Services Fee includes all commission and fees payable to third party agents.

The Marketing Services Fee may be adjusted accordingly at the time of securing or renewal of a lease and/or service contract by the Trustee-Manager or a third party agent, to be consistent with and no higher than the prevailing market rates of such marketing services fee in the country where the asset is located.

Board of Directors Appointed
Mr Ravi Mehrotra, Executive Chairman 7 September 20122
Mr Gurpreet Singh Dhillon, Executive Director & CEO 22 July 20111
Mr Pawanpreet Singh, Executive Director & CFO 1 January 2013
Mr Eng Meng Leong, Independent Director 1 July 2013
Mr Sydney Michael Hwang, Independent Director 7 September 20122
Dr Yogendra Nath Mathur, Lead Independent Director 7 September 20122
Mr Peter Joseph Seymour Rowe, Independent Director 7 September 20122
1reappointed on 28 July 2014
2reappointed on 6 August 2015
Board Committees & Members
Audit & Risk Management Committee Nominating Committee Remuneration Committee
1. Mr Peter Joseph Seymour Rowe, Chairman 1. Mr Sydney Michael Hwang, Chairman 1. Mr Eng Meng Leong, Chairman
2. Mr Eng Meng Leong 2. Mr Ravi Mehrotra 2. Mr Sydney Michael Hwang
3. Dr Yogendra Nath Mathur 3. Dr Yogendra Nath Mathur 3. Mr Peter Joseph Seymour Rowe

APPENDIX

TERMS OF REFERENCE OF THE AUDIT & RISK MANAGEMENT COMMITTEE

Objectives

The main objective of the ARMC shall be to assist the Board in fulfilling its responsibilities as the board of the trustee-manager of RHT.
In pursuance of this goal, the ARMC shall:

  1. monitor and evaluate the effectiveness of the Trustee-Manager's internal controls;
  2. review the quality and reliability of information prepared for inclusion in the financial reports of RHT;
  3. nominate external auditors and review the adequacy of external audits in respect of cost, scope and performance;
  4. in relation to risk management, ensure that the risk management framework is adequate in the identification, measurement, monitoring and control of the Trustee-Manager's principal risks;
  5. in relation to risk governance of the Trustee-Manager, determine the nature and extent of risks which the Trustee-Manager may undertake, and ensure that the management maintains a sound system of risk management and internal controls; and
  6. assess appropriate means to carry out its responsibility of overseeing the Trustee-Manager's risk management framework and policies.

Roles and Function

The duties and functions of the ARMC shall include the following:

Financial Reporting

  1. Reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of RHT and any announcements relating to the financial performance of RHT;
  2. Reviewing the balance sheet and profit and loss account of the Trustee-Manager of RHT and the balance sheet, profit and loss account and cash flow statement of RHT submitted to it by the Trustee-Manager, and thereafter to submit them to the Board of Directors;
  3. Reviewing, with the auditor of RHT:-
    1. the audit plan of RHT;
    2. the auditors' evaluation of the system of internal accounting controls of the Trustee-Manager of RHT;
    3. the auditors' audit report for RHT;
  4. Reviewing audit reports (whether external or internal) to ensure that where deficiencies in internal controls have been identified, appropriate and prompt remedial action is taken by the management; and
  5. Reviewing the financial statements and the internal audit report. The review of the internal audit report shall be carried out at least twice a year to ascertain that the guidelines and procedures established to monitor Interested Person Transactions have been complied with. The review shall include the examination of the nature of the transaction and its supporting documents or such other data that the ARMC deems necessary.

Risk Management and Internal Controls

  1. Monitoring the policies and practices put in place by the Trustee-Manager to ensure compliance with the applicable legislation, the Business Trusts Act, the Business Trusts Regulations, the Code of Corporate Governance, the Listing Manual, the trust deed of RHT and any applicable guidelines;
  2. Initiating audits of the internal controls of RHT Group as and when it deems fit to satisfy itself that the internal controls of RHT Group remain robust and effective;
  3. Reviewing and reporting to the Board at least annually, the adequacy and effectiveness of the risk management systems and internal controls of RHT, including financial, operational, compliance and information technology controls;
  4. Obtaining regular updates from the management and the Company Secretary regarding compliance matters; and
  5. Overseeing RHT's risk management framework and policies and assessing appropriate means to carry out its responsibility of doing so.

Internal & External Audit Processes

  1. Reviewing the scope and results of the internal audit procedures of the Trustee-Manager of RHT;
  2. Approving the hiring, removal, evaluation and compensation of the head of the internal audit function, or accounting/auditing firm or corporation if the internal audit function is outsourced;
  3. Ensuring that the internal audit function is adequately resourced and has appropriate standing within the company and at least annually, review the adequacy and effectiveness of the internal audit function;
  4. Making recommendations to the Board on the proposals to the unitholders of RHT on the appointment, re-appointment or removal of the external auditors and to approve the remuneration and terms of engagement of the external auditors;
  5. Reviewing the assistance given by the officers of the Trustee-Manager to the auditor of RHT;
  6. Reviewing the activities of the internal auditors on factors such as their independence, adequate resources and appropriate standing to perform an effective role;
  7. Nominating external auditors and reviewing the adequacy of external audits in respect of cost, scope and performance, and reviewing the independence and objectivity of the external auditors. Where external auditors also supply a substantial amount of non-audit services to RHT, the ARMC should keep the nature and extent of such services under review, seeking to maintain objectivity; and
  8. Meeting with external and internal auditors, without the presence of management, at least on an annual basis.

Interested Person Transactions and Conflicts of Interest

  1. Reviewing the procedures put in place by the Trustee-Manager of RHT for managing any conflict that may arise between the interests of the Unitholders and the interests of the Trustee-Manager, including Interested Person Transactions, the indemnification of expenses or liabilities incurred by the Trustee-Manager and the setting of fees or charges payable out of the trust property of RHT;
  2. Deliberating on conflicts of interest situations involving RHT;
  3. Monitoring the procedures established to regulate Interested Person Transactions, including ensuring compliance with the Trustee-Manager's internal control system and the relevant provisions of the Listing Manual; and
  4. Periodically reviewing the transactions constituting Interested Person Transactions to ensure compliance with the Trustee-Manager's internal control system and with the relevant rules of the Listing Manual. The review will include the examination of the nature of the transaction and its supporting documents or such other data deemed necessary to the ARMC.

Other areas of responsibility of the ARMC include:

  1. Investigating any matters within the ARMC's terms of reference, whenever it deems necessary, where it should have full access to and cooperation by the management and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly;
  2. Reviewing the policy and arrangements by which staff and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters, and ensure arrangements are in place for such concerns to be raised and independently investigated and for appropriate follow-up action to be taken;
  3. Reporting to the Board of Directors:
    1. any inadequacies, deficiencies or matters of concern of which the ARMC becomes aware or that it suspects arising from its review of the items referred to in paragraphs 3.1.1 to 3.1.4 above; and
    2. any breach of the Business Trusts Act or any breach of the provisions of the trust deed of RHT, of which the ARMC becomes aware or that it suspects;
  4. Reporting to the MAS if the ARMC is of the view that the Board of Directors has not taken, or does not propose to take, appropriate action to deal with a matter reported under Paragraph 3.1.5(iii); and
  5. In addition to the functions listed above, undertaking such other functions as may be agreed to by the ARMC and the Board of Directors.

The ARMC's roles and responsibilities will also include the following:

  1. monitoring changes to regulations and accounting standards, including accounting standards and issues which have a direct impact on financial statements;
  2. in connection with Interested Person Transactions:
    1. reviewing at regular intervals, transactions (either (1) individually or (2) as part of a series or (3) if aggregated with other transactions involving the same Interested Person during the same financial year) equal to or exceeding S$100,000 in value but below 3.0% of the value of RHT's net tangible assets based on the latest audited accounts;
    2. reviewing and approving transactions (either (1) individually or (2) as part of a series or (3) if aggregated with other transactions involving the same Interested Person during the same financial year) equal to or exceeding 3.0% but below 5.0% of the value of RHT's net tangible assets based on the latest audited accounts. Such transactions shall be reviewed and approved prior to such transactions being entered into, on the basis that the transactions are on commercial terms and are consistent with similar types of transactions made by the Trustee-Manager with third parties that are unrelated to the Trustee-Manager; and
    3. reviewing and approving transactions (either (1) individually or (2) as part of a series or (3) if aggregated with other transactions involving the same Interested Person during the same financial year) equal to or exceeding 5.0% of the value of RHT's net tangible assets based on the latest audited accounts. Such transactions will be reviewed and approved prior to such transactions being entered into, on the basis described in the preceding paragraph, by the ARMC which may, as it deems fit, request advice on the transaction from independent sources or advisers. Further, under the Listing Manual, such transactions would have to be approved by the Unitholders at a meeting of Unitholders duly convened and held in accordance with the provisions of the trust deed of RHT.

TERMS OF REFERENCE OF THE NOMINATING COMMITTEE

Objectives

The main objective of the NC shall be to make recommendations to the Board on all Board appointments. The NC shall decide how the Board's performance is to be evaluated and develop objective performance criteria which address how the Board has enhanced long-term Unitholders' value. It shall also implement a process for assessing the effectiveness of the Board as a whole and for assessing the contribution of each individual Director to the effectiveness of the Board. The Chairman will review the results of the performance evaluation of the Board, and where appropriate, propose new members to be appointed to the Board of Directors or seek the resignation of Directors, in consultation with the NC.

Roles and Function
The duties and functions of the NC shall include the following:

  1. Review the Board composition which includes the structure, size and mix annually and recommend to the Board any new Board appointments, whether of executive or non-executive Directors, including their membership and chairmanship of any Board committees.
  2. Review and assess candidates for directorships (including executive directorships) before making recommendations to the Board for the appointment of directors.
  3. Recommend to the Board the selection, appointment and re-nomination for re-election or re-appointment of Directors (including alternate directors, if applicable) in accordance with the Trustee-Manager's Articles of Association, having regard to the following factors which shall not be exhaustive in any respect:
    • the composition and progressive renewal of the Board;
    • the respective Director's contribution to the effectiveness of the Board as a whole;
    • the respective Director's competencies, commitment, contribution and performance (e.g. attendance, preparedness, participation and candour), including if applicable such contribution and performance as an independent Director;
    • the respective Director's appointment on Board committees (as a member or chairman);
    • the respective Director's age, date of first appointment to the Board, date of last re-election or re-appointment
    • the respective Director's unitholding in the RHT and its related corporations;
    • the respective Director's current directorships and past directorships held in the preceding three years in related corporations of RHT and in other listed companies and other major appointments and;
    • if the respective Director has multiple board representations, whether sufficient time and attention is given to the affairs of each each company.
  4. Recommend to the Board the responsibilities of non-executive Directors, including their membership and chairmanship of Board committees.
  5. Recommend the appointment of suitable persons for the senior key executive positions, including that of chief executive officer, chief operating officer, chief financial officer or other executive officers of equivalent rank.
  6. Determine annually, and as and when circumstances require, whether or not a Director is independent in the manner provided in the Business Trusts Regulations and bearing in mind the circumstances set forth in Guidelines 2.3 and 2.4 as set out in the Code of Corporate Governance 2012 (as may be amended, supplemented or replaced from time to time) ("CCG") and any other salient factors. If the NC considers that a director who has one or more of the relationships mentioned therein can be considered independent, it shall provide its views to the Board for the Board's consideration. Conversely, the NC has the discretion to consider that a director is not independent even if he does not fall under the circumstances set forth in CCG Guidelines 2.3 or 2.4, and should similarly provide its views to the Board for the Board's consideration.
  7. Decide whether or not a Director is able to and has been adequately carrying out his duties as a Director, taking into consideration the Director's number of listed company board representations and other principal commitments, and determine the maximum number of listed company board representations which any director may hold.
  8. Implement and carry out the process of assessing the effectiveness of the Board as a whole, and the contribution by each individual Director to the effectiveness of the Board. Individual evaluation should aim to assess whether each Director continues to contribute effectively and demonstrate commitment to the role (including commitment of time to the Board and Board committee meetings, and other duties).
  9. Decide on how the performance of the Board, the board committees and Directors may be evaluated and recommend to the Board for approval objective performance criteria for such purpose, which may be changed subsequently where circumstances deem it necessary. In addition to any relevant performance criteria which may be proposed, the performance evaluation should also consider RHT's unit price performance over a five-year period vis-à-vis the Singapore Straits Times Index and a benchmark index of its industry peers.
  10. Consider the various disclosure requirements relating to directors (in particular, those required by regulatory bodies such as the Singapore Exchange Securities Trading Limited) and ensure that the Trustee-Manager has provided adequate disclosure in the RHT's Annual Report on key information regarding its Directors and its process for assessment of the Board and the Directors.
  11. Review of training and professional development programs for the Board.
  12. Carry out such other duties and functions as may be agreed to by the NC and/or directed by the Board.

TERMS OF REFERENCE OF THE REMUNERATION COMMITTEE

Objectives

The primary objective of the RC is to recommend to the Board a framework and specific remuneration package for the Directors and the chief executive officer of RHT TM.

With regard to remuneration, the RC will review the framework of remuneration and the specific remuneration packages for the Directors and the key executive officers of the Trustee-Manager. The RC shall cover all aspects of remuneration, including but not limited to directors' fees, salaries, allowances, bonuses, options and benefits in kind.

Roles and Functions

  1. The duties and functions of the RC are as follows:
    1. Review, determine and recommend to the Board for endorsement the Trustee-Manager's compensation structure or framework for remuneration of its Directors and CEO to ensure that the framework is appropriate and sufficient to attract, retain and motivate the Directors and CEO of the required quality to run RHT successfully.
    2. Determine and recommend to the Board for endorsement the specific remuneration packages for each of the Directors and CEO of the Trustee-Manager upon recruitment, and thereafter on an annual basis to review such remuneration, determine and recommend to the Board for endorsement any appropriate adjustments, including any variable components in such remuneration, which may be performance-related or designed to align the interests of the Directors and CEO with those of the unitholders of RHT.
    3. Liaise with the Board, the Nominating Committee and Management, as appropriate, on the measurement and assessment of (a) the corporate performance of the Trustee-Manager and the Group and where appropriate, relative to other companies or its competitors, and (b) the performance and level of contribution of the individual Directors and the CEO, as a prelude to reviewing, determining and recommending (as appropriate) the remuneration for each Director and the CEO.
    4. Review and recommend to the Board other incentive schemes and compensation policies of the Trustee-Manager and the remuneration of senior management (CEO & direct reports to CEO).
    5. Review whether executive directors and key management personnel of the Trustee-Manager should be eligible for benefits under long-term incentive schemes and evaluate the costs and benefits of the long-term incentive schemes.
    6. Review the Trustee-Manager's obligations arising in the event of termination of the executive directors and key management personnel's contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous.
    7. Consider the various disclosure requirements for Directors' remuneration (in particular, those required by regulatory bodies such as the Singapore Exchange Securities Trading Limited) and ensure that the Trustee-Manager has provided adequate disclosure in RHT's Annual Report on the remuneration of its Directors and key executives in the manner prescribed by such disclosure requirements.
    8. Carry out such other duties and functions as may be agreed to by the RC and/or directed by the Board.
  2. The remuneration or remuneration packages referred to in this Terms of Reference shall cover all aspects of remuneration, including but not limited to directors' fees, salaries, allowances, bonuses, options, unit-based incentives and awards, and benefits-in-kind offered and/or to be offered by the Trustee-Manager for employment or directorship.
  3. The remuneration or remuneration packages of the non-executive Directors of the Trustee-Manager shall be subject to prior approval by the unitholders of the Trustee-Manager.
  4. In performing its duties and functions, the RC will take into account certain principles and issues on Board remuneration.
  5. The Independent Directors on the RC will annually review and approve the total remuneration of the Directors, Executive Officers and other employees who are related to the controlling shareholder of the Trustee-Manager or the Controlling Unitholder and/or the Directors.

TERMS OF REFERENCE OF EXECUTIVE COMMITTEE

Objectives

The main objective of the Executive Committee shall be to assist the Board in fulfilling certain of its responsibilities as the board of the trustee-manager of Religare Health Trust ("RHT"). The purpose of the Executive Committee is to execute the business plan and manage the day to day affairs of RHT and its subsidiaries, jointly-controlled entities and associated companies (collectively, the "RHT Group" and each a "RHT Group Entity").

Roles and Functions

  1. The principal responsibility of the Executive Committee is to manage the business of the RHT Group, including the following:
    1. To execute the corporate strategy, policies, directions and guidelines set by the Board for the RHT Group;
    2. To review and make recommendations to the Board on the annual operating and capital budgets;
    3. To consider and make recommendations to the Board on matters of significance to the RHT Group, as outlined in "Matters Reserved Specifically for Decision by the Board";
    4. To manage the RHT Group's operations, projects, budgets, compliance obligations and financials;
    5. To make recommendations to the Board as to the RHT Group's broad policies, strategies and financial objectives; and
    6. To carry out such other functions as may be delegated to it by the Board.

DIRECTORSHIPS

And other major appointments over the last 3 years

Name of Director Current Directorships and other major appointments Past appointments over the last 3 years
Ravi Mehrotra
  1. Dion Global Solutions Limited
  2. Fortis Global Healthcare Infrastructure Pte. Ltd.
  3. Fortis Healthcare Limited
  4. Landmark Partners LLC
  5. Northgate Capital LLC
  6. Religare Enterprises Limited
  7. Religare Global Asset Management Inc.
  8. Religare Health Insurance Company Limited
  9. Religare Healthtrust Services Pte. Ltd.
  • Religare Asset Management Company Limited
  • Religare Capital Markets Limited
  • AEGON Religare Life Insurance Company Limited
Gurpreet Singh Dhillon
  1. Fortis Global Healthcare Infrastructure Pte. Ltd.
  2. Religare Healthtrust Services Pte. Ltd.
  3. Treelife Holdings Pte. Limited
  4. BG Asset Management Pte. Ltd.
-
Pawanpreet Singh Nil
  • Fortis Health Management Limited
  • Fortis Health management (West) Limited
  • Fortis Healthstaff Limited
  • Hospitalia Eastern Private Limited
  • Kanishka Healthcare Limited
  • Reliant Healthcare Consultancy Private Limited
Eng Meng Leong
  1. ACTS College Limited (Non-Executive Director)
  2. Croesus Retail Asset Management Pte. Ltd. (Independent Director)
  • Kreuz Holdings Limited
  • Libra Group Limited (Independent Director)
  • 3Cnergy Limited
Sydney Michael Hwang
  1. Justinian Private Limited
  2. Michael Hwang Chambers LLc, Senior Counsel
  3. Linyi Investments Pte. Ltd.
  4. Memories of the East Pte. Ltd.
  5. Singapore Dance Theatre Limited
  6. YTL Starhill Global REIT Management Limited
  • IP Academy (Singapore)
  • Kang Ching Pte. Ltd.
  • The Law Society of Singapore
Dr Yogendra Nath Mathur
  1. Maharaj Jagat Singh Medical Relief Society
  2. RSSB Education & Environment Society
Nil
Peter Joseph Seymour Rowe
  1. AMP Capital Investors Limited *
  2. GFM Investment Holdings Pty Ltd
  3. GFM Investment Services Pty Ltd
  4. GFM Investment Management Ltd
  5. Herbert Smith Freehills (Consultant)
  6. Southern Highlands Botanic Gardens Limited
  7. UBS Grocon Real Estate Investment Management Pty Ltd

* Chairman of the Managed Investments Scheme Compliance Committees and AMP Capital China Growth Fund Advisory Committee.

  • XAS Pty Limited
  • Lend Lease Real Estate Investments Limited
  • Lend Lease Funds Management Limited
  • Estate of the late Helene Ann Finlay (Executor)
  • Securitisation Capital Solutions Pty Ltd
  • Tavaling Pty Ltd
  • Investa Listed Funds Management Limited
  • Mission Australia Housing Limited
  • Mission Australia Housing (Victoria) Limited