CORPORATE GOVERNANCE REPORT
(CONT’D)
The Manager’s compensation framework for all employees (including key management) comprises fixed salary, performance
bonuses and benefits which mainly consist of employer’s contribution to the Central Provident Fund. The Manager does not
have any employee shares or units scheme. The performance bonus and increment are based on an annual appraisal of
each individual employee of the Manager. In particular, the performance bonus is linked to the contributions to stability and
performance of the net property income, distributable amount and distribution per unit of LMIR Trust over the preceding
year and as such it is in alignment with the performance of LMIR Trust and the interests of Unitholders. A breakdown in
percentage of the aggregate remuneration of executive officers is set below:
Remuneration of Key Management Personnel for FY 2015
Salary
Bonus
Allowance
Total
Between S$250,000 to S$500,000
Mr Lo Shye Ru
76%
20%
4%
100%
Below S$250,000
Mr Wong Han Siang
67%
26%
7%
100%
Mr Teo Kah Ming
68%
23%
9%
100%
Mr Cesar Agor
76%
24%
0%
100%
The Code also encourages the Manager to disclose the remuneration of the Manager’s top five key management personnel
(who are not directors or the CEO) on a named basis in bands of S$250,000; as well as the aggregate remuneration paid
to the said Key Management Personnel. The Board has identified only four Key Management Personnel because these
four executives have the authority and responsibility to assist the CEO in planning, directing and controlling the activities
of the Manager. Due to the wage disparities in the highly competitive REIT management industry and the likely competitive
pressures, the Board has decided against the disclosure of the aggregate remuneration paid to the key management
personnel. The Board is of the view that the disadvantage of such disclosure in term of risk of potential staff movement
and loss of key personnel will outweigh the benefits to Unitholders.
There were no employees of the Manager and its subsidiaries who were immediate family members of a Director or the
CEO in FY 2015. “Immediate family member’ refers to the spouse, child, adopted child, step-child, sibling or parent.
INTERNAL AUDIT AND MANAGEMENT OF BUSINESS RISKS
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 the company’s assets,
and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its
strategic objectives.”
Principle 13: “The Company should establish an effective internal audit function that is adequately resourced and
independent of the activities it audits.”
INTERNAL CONTROLS AND MANAGEMENT OF BUSINESS RISK
Effective risk management is a fundamental part of LMIR Trust’s business strategy. Recognising andmanaging risk is central to
the business and to protecting the Unitholders’ interests and value. LMIR Trust operates within overall guidelines and specific
parameters set by the Board. Each transaction is comprehensively analysed to understand the risks involved. Responsibility
for managing risk lies initially with the business units concerned, working within the overall strategy outlined by the Board.
ANNUAL REPORT 2015
51
