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Corporate Governance

ABOUT AGT AND TRUSTEE-MANAGER

Accordia Golf Trust ("AGT" or the "Trust") is a business trust constituted in Singapore by a trust deed dated 16 June 2014 as amended by the first amending and restating deed dated 21 July 2014 (the "Trust Deed"), made by Accordia Golf Trust Management Pte. Ltd., as trustee-manager of AGT (the "Trustee-Manager").

AGT is registered as a business trust under the Business Trusts Act, Chapter 31A of Singapore (the "BTA") and was listed on the Main Board of Singapore Exchange Securities Trading Limited (the "SGX-ST") on 1 August 2014 ("Listing Date"). Accordia Golf Co., Ltd is the sponsor of AGT (the "Sponsor").

The Trustee-Manager is committed to high standards of corporate governance, business integrity and professionalism in all its activities and has complied with the principles of the Code of Corporate Governance 2018 (the "2018 CG Code") and largely complied with the provisions of the 2018 CG Code. Where there are deviations from the provisions of the 2018 CG Code, appropriate explanations have been provided. The Trustee-Manager also ensures that all applicable laws, rules and regulations including the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), the listing manual of the SGX-ST (the "SGX-ST Listing Manual") and the BTA including the relevant regulations thereunder, are duly complied with.

BOARD MATTERS

THE BOARD'S CONDUCT OF ITS AFFAIRS

Principle 1

The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.

The Board is responsible for the overall corporate governance of the Trustee-Manager. The Board oversees the Trustee-Manager's affairs and is accountable to Unitholders for the management of the Trustee-Manager, including establishing goals for the Management, monitoring the performance of the Trustee-Manager and overseeing the Management in order to monitor the achievement of these goals. The Board is also responsible for the risk management of AGT.

The Board meets regularly to review AGT's business activities and strategies and to provide entrepreneurial guidance and strategic business direction. Such regular reviews are also aimed at ensuring adherence to the Trust Deed and compliance with any applicable laws, rules, regulations, guidelines and policies.

All Directors act honestly and exercise reasonable diligence in the discharge of the duties of his office and, in particular, will take all reasonable steps to ensure that the Trustee-Manager discharges its duties under the BTA, and gives priority to the interests of all Unitholders as a whole over the interests of the Trustee-Manager in the event of a conflict between the interests of all Unitholders as a whole and the interests of the Trustee-Manager.

All Directors are required to disclose their business interests and any potential or actual conflicts of interest that they are aware of, or as soon as such conflicts become apparent. In any situation that involves a conflict of interest with the Trust, Directors recuse themselves from participating in any discussion and decision on the matter.

All Board members participate in matters relating to corporate governance, business operations and risks, financial performance, and the nomination and review of directors of the Trustee-Manager ("Directors").

Board's Approval

The Board has established a framework for the management of the Trustee-Manager and AGT, including a system of internal controls and a business risk management process, which enables risks to be assessed and managed.

The key roles of the Board are to:

The Trustee-Manager has adopted a framework of delegated authorisations that has been approved by the Board. The framework sets out the level of authorisation and their respective approval limits for business activities, including but not limited to, investments and divestments, capital expenditures and bank borrowings as well as arrangements in relation to cheque signatories. In addition, sub-limits are also delegated to various management levels to facilitate operational efficiency. Activities and matters which are specifically reserved for the Board's approval, such as acquisition and disposal of assets, financial statements, annual budget, investment proposals and funding, opening and closing of bank accounts, are also clearly set out in the framework.

Board and Board Committees

The Board is supported by two committees namely (1) Audit and Risk Committee ("ARC") and (2) Remuneration Committee ("RC"). The ARC and RC function within clearly defined terms of reference. The nomination committee function is undertaken by the Board. The Board Committees report their activities regularly to the Board. The effectiveness of each Board Committee is also constantly monitored to ensure their continued relevance. Further information on the roles and responsibilities of the ARC and RC are provided in this Corporate Governance Report.

As at the date of this report, the composition of the Board and Board Committees is set out below:

Board and Board Committees

Board Meetings

The Board conducts regular scheduled meetings on a quarterly basis to review the business performance and outlook of AGT, as well as to deliberate on business strategy, including any significant acquisitions, disposals, fund raising and development projects of AGT. Such meetings are typically scheduled before the start of each year in consultation with the Directors. Ad-hoc meetings may also be convened as and when warranted by matters requiring the Board's attention. If necessary, Board meetings may be conducted by way of telephone or video conferencing as permitted under the Trustee-Manager's Constitution. Board meetings are also supplemented by resolutions circulated to Directors for decisions as and when necessary.

From time to time, the Trustee-Manager also organises site visits to certain golf courses in Japan for the Directors to better apprise them of the Trust's business. During the financial year, the Non-Executive Directors visited several Initial Portfolio golf courses. Such visits also provide the Non-Executive Directors with an opportunity to interact and engage with the key executives of the Trust Group and at the same time that the Non-Executive Directors can better understand the issues faced by the ground team.

The number of meetings of the Board, Board Committees and general meeting during the financial year ended 31 March 2020 as well as the attendance of the Directors, are as follows:

The number of meetings of the Board, Board Committees and general meeting during the financial year ended 31 March 2020
* By Invitation

Directors' Induction, Training and Development

A formal letter of appointment, which sets out the Director's duties and obligations, will be provided to each Director upon appointment. Orientation programmes such as briefings by the Trustee-Manager and site visits to golf courses will also be organised for newly appointed Directors. For newly appointed Directors who do not have prior experience as a director of a public listed company in Singapore, they will also have to attend the mandatory training courses organised by the Singapore Institute of Directors ("SID").

As part of continuous training, Directors will, from time to time, receive updates and briefings from professional advisors, auditors and Management on relevant practices, new rules and regulations, corporate governance, changes in accounting standards and risk management issues applicable or relevant to the performance of their duties and responsibilities as Directors. The Directors are encouraged to attend training courses from SID and any other relevant training programmes, so as to keep up-to-date with changes to financial, legal and regulatory requirements and the business environment. The Directors have attended the following courses during the financial year ended 31 March 2020:

During the financial year:

  1. The external auditors, PricewaterhouseCoopers LLP, regularly briefed the ARC members on changes in accounting standards that affect the Trust Group;
  2. The Chief Executive Officer regularly updated the Board on the business activities of the Trust Group during Board meetings. Such updates would also include any significant developments and matters relating to environmental, social or other sustainability issues and risks affecting the Trust Group; and
  3. The Board was updated on the revisions to the Code of Corporate Governance and the related changes to the SGX-ST Listing Rules as well as the changes to the Quarterly Reporting Framework and Enhancements to Continuous Disclosures introduced by SGX-ST.

The Directors may also attend other appropriate courses and seminars at the Trustee-Manager's expense.

Access to Information

Management has an on-going obligation to provide the Board with complete, adequate and timely information prior to Board meetings as and when the need arises, in order to allow the Board to make informed decisions to discharge its duties and responsibilities.

Board meetings for each quarter are scheduled in advance to facilitate Directors' individual administrative arrangements in respect of ongoing commitments. Whenever warranted, ad-hoc Board meetings are held. As a general rule, agenda for the meetings are circulated seven days in advance of each meeting. As a best practice, Management also tries to circulate other Board papers prior to the meeting, including background or explanatory information regarding the agenda items, so as to enable the Directors to make informed decisions. Such information includes minutes of the previous meetings as well as financial and operational matters requiring the Board's attention or approval.

Management provides complete, adequate and timely information to the Board on the affairs and issues of AGT that require the Board's decision as well as ongoing reports relating to the financial and operational performance of AGT. Management keeps Board members abreast of key developments affecting AGT as well as material transactions so that the Board is kept fully aware of the affairs of AGT.

All Directors have separate and independent access to Management, the Company Secretary, as well as the internal and external auditors at all times. The Company Secretary (and/or her authorised designates) attends Board meetings and ensures that established procedures and all relevant statutes and regulations that are applicable to the Trustee-Manager and AGT are complied with. The appointment and removal of the Company Secretary is subject to the Board's approval.

The Trustee-Manager has in place procedures to enable Directors, whether as a group or individually, to obtain independent professional advice, as and when necessary, in furtherance of their duties. The appointment of such independent professional advisers is subject to approval by the Board.

BOARD COMPOSITION AND GUIDANCE

Principle 2

The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.

The Board consists of five Directors, of whom three are independent and non-executive.

The Directors are as follows:

Independent Directors
Mr Khoo Kee Cheok (Chairman)
Mr Chong Teck Sin
Mr Hitoshi Kumagai

Executive Directors
Mr Yoshihiko Machida (Chief Executive Officer)
Mr Toyo Nakanishi

Further information on the Directors is provided in the Board of Directors of the Trustee-Manager section on pages 6 and 7 of the Annual Report.

Board Composition

The composition of the Board also complies with the BTA and the Business Trusts Regulations 2005 ("BTR") and consists of:

In addition to compliance with the BTA and BTR requirements, Board composition has been, and will continue to be, based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account the following principles:

Board Independence

The Board assessed the independence of each Board member on an annual basis and took into consideration the relevant provisions of the 2018 CG Code, BTR and the SGX-ST Listing Manual. The Board has conducted an annual review of the independence of the Independent Directors and has deemed them to be independent having regard to the independence criteria as set out in the 2018 CG Code, BTR and the SGX-ST Listing Manual. Each of Messrs. Khoo Kee Cheok, Chong Teck Sin and Hitoshi Kumagai is independent from Management and business relationships with the Trustee-Manager, and independent from every substantial shareholder of the Trustee-Manager. All the Independent Directors are able to exercise independent judgement on the business activities of AGT. They also enable the Board to interact and work with Management through a robust exchange of ideas and views to help shape the strategic process. None of the Independent Directors have served beyond nine years.

As Chief Executive Officer ("CEO") of the Trustee-Manager, Mr Yoshihiko Machida is considered non-independent by virtue of his employment with the Trustee-Manager.

Mr Toyo Nakanishi, Executive Director of the Trustee-Manager, is nominated by a shareholder of the Trustee-Manager and is therefore considered non-independent.

Each member of the Board has recused himself from the Board's deliberations respectively on his own independence.

Board Diversity

The Board has adopted a Board Diversity Policy which recognizes the benefits of a Board that possesses a balance of skills set, experience, expertise and diversity of perspectives appropriate for the strategies of the Trust. The Trustee-Manager believes that board diversity enhances decision-making capability and thus the overall effectiveness of the Board in achieving sustainable business operation and enhancing shareholder value. All Board appointments are made based on merit, in the context of the skills, industry and business experience, culture, nationalities which the Board as a whole requires to be effective. The Board will continue to review its composition and size periodically, taking into account the need for progressive renewal of the Board and ensuring that objectives as set out in the Board Diversity Policy are met. A review of the size and composition of the Board (and Board Committees) was also undertaken by the Trustee-Manager at year end to ensure alignment with the needs of the Group and the objectives set out in the Board Diversity Policy.

The Board is of the view that the present Board size of five members is appropriate to provide for effective decision-making, taking into account the nature and scope of AGT's operations. Given the diverse qualifications, background, experience and profile of the Directors, the Board collectively possesses core competencies in areas such as accounting and finance, regulatory matters, risk management, business and management experience and also industry specific knowledge. As such, the Board is of the opinion that the current Board appropriately balances and retains a diversity of the relevant skills, experience and expertise for effective management of the Trustee-Manager and AGT.

Board Guidance

The Independent Directors contribute to the board process by monitoring and reviewing Management's performance. For the financial year under review, the Independent Directors have constructively challenged Management's proposals and decisions and reviewed Management's performance. They have unrestricted access to Management for any information that they may require to discharge their oversight function effectively. As Independent Directors constitute a majority of the Board, objectivity on such deliberations is assured.

Meeting of Directors without Management

The Independent Directors would meet without the presence of Management or Executive Directors at least once a year or as and when warranted during the financial year. The Chairman of the Board, who is also an Independent Director, would provide feedback to the CEO on any concerns or feedback raised by the Independent Directors during such meetings.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Principle 3

There should be a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision making.

To maintain an appropriate balance of authority, increased accountability and to ensure efficient decision-making, the roles and responsibilities of the Chairman and CEO are held by separate individuals. The Board Chairman is Mr Khoo Kee Cheok, an Independent Non-Executive Director. The CEO is Mr Yoshihiko Machida, who is an Executive Director. The Chairman and the CEO are not immediate family members.

There is a clear division of responsibilities between the Chairman and the CEO. As the Chairman, Mr Khoo Kee Cheok is responsible for leading and overseeing the Board to ensure that it acts in the best interests of AGT and that the Board meetings are planned and conducted effectively. The Chairman is responsible for setting the agenda for each Board meeting in consultation with the CEO, taking into account where appropriate, matters proposed by the Directors, and ensuring that the Directors receive complete, adequate and timely information. The Chairman is also responsible for encouraging constructive debate between the Board and Management on strategy, business operations and other plans, as well as ensuring that they work together with integrity and competency. The Board, under the leadership of the Chairman, also ensures effective communication with Unitholders and promotes a high standard of corporate governance. The Chairman also ensures that Board meetings are held regularly and on an ad-hoc basis where required.

The CEO, Mr Yoshihiko Machida, is an Executive Director with full executive responsibilities over the business directions and operational decisions of AGT. As CEO, he leads the other members of Management in meeting the stated strategic and operational objectives of AGT and is responsible for planning the future strategic development and day-to-day operations of the Trustee-Manager and AGT, as well as analysing the performance of the golf courses held by AGT and developing the internal and external growth strategies. He also ensures the quality and timeliness of the flow of information between Management and the Board.

Given that the roles of the Chairman and CEO are separate and the Chairman is independent, no lead independent director is required to be appointed.

BOARD MEMBERSHIP

Principle 4

There should be a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.

Pursuant to paragraph 3.2 of Practice Note 4.2 of the SGX-ST Listing Manual, the corporate governance provision stipulated in Rule 210(5)(e) of the SGX-ST Listing Manual does not apply to the Trust.

No Nominating Committee has been established as the Trustee-Manager and not AGT appoints all the Directors. The Trustee-Manager has considered the merits of establishing a nomination committee but is of the view that it is in the best interests of the Trustee-Manager that the Board collectively reviews, determines and approves the structure, size, diversity profile and skill set of the Board as well as the appointment of any new Director, as and when appropriate. The Board administers nomination to the Board, reviews the structure, size, competence, experience and composition of the Board. The Board reviews the independence of the Directors annually. The Board also retains responsibility for identifying, reviewing and appointing suitable new candidates to join the Board as Directors. In addition, the Board as a whole is also responsible for reviewing the succession plan for Directors, including the Chairman of the Board and the CEO.

Nomination and Selection of Directors

From time to time, candidates may be identified to fill vacancies on the Board to complement and expand the skill set, experience and expertise of the Board taking into account the Board Diversity Policy and any other factors that the Board may consider relevant and applicable from time to time towards achieving a diverse Board. Renewals or replacement of Board members do not necessarily reflect their contributions to date but may be driven by the need to re-position and align the Board with the needs of the Trustee-Manager, AGT and its business. The search for candidates to be appointed as new Board members will be conducted through a broad network of recommendations and contacts. All candidates will be carefully evaluated by the Board to ensure that recommendations are well supported and objective.

Review of Directors' Independence

The Board conducts an annual review of each Director's independence and takes into consideration the independence criteria as set out in the 2018 CG Code, BTR and the SGX-ST Listing Manual. The Board has ascertained that, save for Mr Yoshihiko Machida and Mr Toyo Nakanishi, all Directors are considered independent according to these criteria. Directors must also immediately report any changes in their external appointments which may affect their independence.

Directors' Time Commitment

The Board has assessed that although some Directors have other board representations, they have devoted sufficient time and attention to their role as Directors and to the affairs of the Group. The Board believes that setting a maximum number of listed company board representations would not be meaningful as the contributions of the Directors should be best assessed through qualitative factors such as their attendance and time commitment to the affairs of the Company. The Board would continue to review from time to time the board representations and other principal commitments of each Director to ensure that the Directors continue to meet the demands of the Group and are able to discharge their duties adequately. The Board is satisfied that all Directors have discharged their duties adequately for the financial year ended 31 March 2020.

Key Information on Directors

Profiles and key information of individual Directors, including their directorships in other listed companies and principal commitments, both present and those held over the preceding five years, are disclosed under the "Board of Directors" section of the Annual Report.

All the Directors are up for re-nomination and re-election at every annual general meeting of the Trustee-Manager.

No alternate director is appointed to the Board.

BOARD PERFORMANCE

Principle 5

There should be a formal annual assessment of the effectiveness of the Board as a whole and that of each of its board committees and individual directors.

Board Evaluation

Pursuant to paragraph 3.2 of Practice Note 4.2 of the SGX-ST Listing Manual, provision 5.1 of the 2018 CG Code does not apply to the Trust.

The Board undertakes a process to assess the effectiveness of the Board as a whole and its Board Committees (namely ARC and RC). The Board members are provided with a set of questions, setting out the salient recommendations from the 2018 CG Code, which is designed to seek their views or feedback on the various aspects of the Board as well as the Board Committees. The Company Secretary compiles Directors' responses to the questionnaires into a consolidated report. The Board will discuss their views on the various aspects of the Board and improvements made to areas where the Board views to be necessary to enhance the overall effectiveness of the Board and/or Board Committees. The evaluation for the financial year ended 31 March 2020 confirmed that the Board and its Board Committees were generally functioning effectively during the year.

Board Performance Criteria

The Board had extracted salient recommendations from the 2018 CG Code and incorporated these recommendations into the Board and Board Committee Evaluation Questionnaires. The performance of the Board was reviewed as a whole, focusing on factors such as board composition, board conduct of affairs, internal controls and risk management, board accountability, communication with top management and standards of conduct. The Board also considered whether the Directors have reasonable understanding of the Trust Group's business and the industry as well as the Directors' working relationship with the other members of the Board. These performance criteria shall not change from year to year, and where circumstances deem it necessary for any of the criteria to be changed, the Board shall justify its decision for the change.

Individual Director Evaluation

While the 2018 CG Code recommends that the Directors be assessed individually, the Board felt that it is more appropriate and effective to assess the Board as a whole, bearing in mind that each Board member contributes in different ways to the success of the Trustee-Manager.

REMUNERATION MATTERS

Principle 6

The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.

Principle 7

The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company.

Principle 8

The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation.

Pursuant to paragraph 3.2 of Practice Note 4.2 of the SGX-ST Listing Manual, provision 6.1 of the 2018 CG Code does not apply to the Trust. Nevertheless, the Trustee-Manager has established a Remuneration Committee ("RC") to assist the Board with the remuneration matters of the Board and key management personnel.

The RC comprises Mr Hitoshi Kumagai as Chairman, Mr Khoo Kee Cheok and Mr Chong Teck Sin as members. All three members are Independent Directors.

The RC is guided by its terms of reference that has been approved by the Board.

The RC's responsibilities include, but are not limited to, the following:

  1. reviewing and recommending to the Board a general framework of remuneration for the Board and key management personnel, and specific remuneration packages for each Director and key management personnel, for endorsement by the Board;
  2. reviewing the obligations of the Trust Group arising in the event of the termination of the service contracts of Executive Directors and key management personnel, to ensure that such service contracts contain fair and reasonable termination clauses which are not overly generous; and

The RC, when required, has access to expert advice both within and outside the Company, on remuneration of directors. No remuneration consultant was engaged in FY19/20.

Non-Executive Directors' Remuneration

The Non-Executive Directors receive fixed Directors' fees payable quarterly in arrears for their Board and Board Committee membership. In determining the quantum of Directors' fees, factors such as their level of contribution, effort and time spent, responsibilities as Directors and the need to pay competitive fees to retain, attract and motivate the Directors, are taken into account. The Non-Executive Directors are not overcompensated to the extent that their independence is compromised. No Director is involved in deciding his own remuneration. The remuneration framework for the Non-Executive Directors remains unchanged from that of the previous financial year ended 31 March 2019. The Directors' fees are paid wholly in cash and are paid by the Trustee-Manager out of the management fees paid by AGT to the Trustee-Manager. The Directors' fees are subject to approval by the shareholders of the Trustee-Manager.

The following are the components of the fee structure for Non-Executive Directors:

  1. base fee for membership of the Board;
  2. fee for chairing the Board; and
  3. fee for chairing the respective Board Committees.

The following table shows the Directors' fees paid in the year ended 31 March 2020:

Directors' fees paid in the year ended 31 March 2020:

Executive Directors' and Key Management Personnel ("KMP") Remuneration

Both Mr Yoshihiko Machida (also CEO) and Mr Toyo Nakanishi, being Executive Directors, do not receive Directors' fees.

The remuneration policy adopted by the Trustee-Manager has regard to the objective of attracting, rewarding and retaining performing employees. The remuneration package for Executive Directors and KMP comprises a fixed component in the form of a basic salary and a variable component in the form of bonuses. Variable bonus is pegged to the performance of the individual and the performance of AGT. This clearly aligns staff remuneration with the long-term interests of the Unitholders. There are no contractual provisions within the remuneration policy which allow the reclamation of incentive components of remuneration from Executive Directors and KMP as such provisions may have a negative impact on attracting and retaining talent in the Group.

There are currently no option schemes or other long-term incentive schemes in place in relation to AGT and there are also no existing or proposed service agreements entered into by the Directors or KMP with the Trustee-Manager that provide for benefits upon termination or retirement, or post-employment. No compensation is payable to any Director or KMP in the form of option in units or pursuant to any bonus or profit-sharing plan or any other profit-linked agreement or arrangement under the service contracts. In addition, the RC was satisfied that the service contracts with the Executive Directors and KMP do not contain termination clauses that are overly generous.

The following table shows the remuneration of the Executive Directors and top two KMPs (who are not Directors or the CEO of the Company) paid in the year ended 31 March 2020:

remuneration of the Executive Directors and top two KMPs

In relation to the remuneration of the Executive Directors and the top two KMP, the Board is of the view that the disclosure of the remuneration in exact quantum would not be in the interest of the Trustee-Manager and AGT. The Trustee-Manager would like to elaborate on the reasons as follows:

  1. Due to the commercial sensitivity and confidential nature of staff remuneration matters, the Trustee-Manager is of the view that such disclosures could be prejudicial to the interests of unitholders of AGT;
  2. it is important for the Trustee-Manager to ensure stability and continuity of its business by retaining a competent and experienced management team and being able to attract talented staff and disclosure of the remuneration of the Executive Directors (including the CEO) and the KMP would make it difficult to retain and attract talented staff on a long term basis; and
  3. The remuneration of the Executive Directors (including the CEO) and KMP are not paid out of the Trust but instead remunerated directly by the Trustee-Manager.

The total remuneration paid to the KMP (who are not Directors or the CEO) for the financial year ended 31 March 2020 was approximately S$560,000.

No Director or KMP is involved in the deliberation and decision in respect of his own individual fee/remuneration.

There were no employees of the Trustee-Manager and its subsidiaries who are immediate family members of a Director, the CEO or a substantial shareholder and whose remuneration exceeded S$100,000 in FY19/20. "Immediate family member" refers to the spouse, child, adopted child, step-child, sibling or parent.

ACCOUNTABILITY AND AUDIT

RISK MANAGEMENT AND INTERNAL CONTROLS

Principle 9

The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders

Risk Management

The Board has overall responsibility for the governance of risk and exercises oversight of the risk management strategy and framework. The Audit and Risk Committee ("ARC") provides guidance and advice on the financial reporting risk and the adequacy and effectiveness of the Trustee-Manager's internal controls.

The Trustee-Manager adopts a set of Risk Management Rules which sets out the framework for managing risks in an integrated, systematic and consistent manner so as to achieve the business objectives of AGT as part of its risk management strategy.

As part of its overall risk management, Management, amongst other things, undertakes and performs risk and control assessment using a risk control matrix which also serves as a risk register which identifies the material risks it faces and the corresponding internal controls in place to manage or mitigate those risks. These include financial, operational, compliance and information technology risks, as well as sustainability risks. These risks are prioritised based on their relative importance or implications for AGT should such risks materialise. The material risks are analysed and discussed by the ARC and reported to the Board whereas other risks are managed at the Management level and reported to the Board only on an exceptional basis. The risk assessment is conducted quarterly. The risk register is presented to the ARC quarterly for review.

Apart from the risk management process, key business risks are thoroughly assessed by Management and each significant transaction is comprehensively analysed so that Management understands the risks involved before the transaction is embarked on. The Board, through the ARC, will continuously identify, review and monitor the key risks, control measures and management actions as part of the risk management process.

Internal Controls

The Internal Auditors conduct audits that involve testing the effectiveness of the material internal control systems of the Trustee-Manager and AGT and addressing financial, operational, compliance and information technology risks, including testing, where practical, material internal controls in areas managed by external service providers.

Any material non-compliance or lapses in internal controls together with corrective measures recommended by internal auditors are reported to and reviewed by the ARC. The adequacy and effectiveness of the measures taken by the Trustee-Manager in response to the recommendations made by the internal and external auditors are also monitored and reviewed by the ARC.

The Trustee-Manager has also instituted/established the following:

The Board has received assurances from (i) the CEO and Chief Financial Officer that the Group's financial records have been properly maintained and the financial statements give a true and fair view of AGT's operations and finances and (ii) the CEO and other relevant key management personnel that the risk management systems and internal controls (including financial, operational, compliance and information technology controls) within the Group are adequate and effective in addressing the material risks in the Group in its current business environment for the financial year ended 31 March 2020.

Based on the internal controls established and maintained by the Trustee-Manager, work performed by the internal and external auditors and reviews performed by Management, as well as the assurances set out above, the Board, with the concurrence of the ARC, is of the view that the Group's system of risk management and internal controls (including financial, operational, compliance and information technology controls) were adequate and effective as at 31 March 2020 to address risks which the Company considers relevant and material to its operations.

The Board believes that the existing risk management and internal controls framework provides reasonable, but not absolute, assurance that AGT and the Trustee-Manager will not be adversely affected by any event that could be reasonably foreseen as the Trustee-Manager works to achieve AGT's business objectives. All systems on risk management and internal controls contain inherent limitations and no system can provide absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error losses, fraud or other irregularities. The Board notes that the objective of an internal control system is to manage rather than eliminate the risk of failure.

AUDIT & RISK COMMITTEE

Principle 10

The Board has an Audit Committee which discharges its duties objectively.

The ARC comprises three members, all of whom are Independent Directors and appropriately qualified with the relevant business, accounting and financial management experience and skills to discharge their responsibilities. No ARC member is a former partner or director of the Trust's existing auditing firm, PricewaterhouseCoopers LLP (a) within a period of two years commencing on the date of his ceasing to be a partner or director and in any case (b) for as long as he has any financial interest in the auditing firm.

As at 31 March 2020, the members of the ARC are:

Mr Chong Teck Sin (Chairman)
Mr Khoo Kee Cheok
Mr Hitoshi Kumagai

The ARC functions independently of the Executive Officers and the other Directors who are not members of the ARC. Management is required to provide their fullest co-operation in providing information and resources, and in implementing or carrying out all requests made by the ARC. The ARC has direct access to the internal and external auditors and full discretion to invite any Director or Executive Officer to attend its meetings. Similarly, both the internal and external auditors are given unrestricted access to the ARC.

The ARC is regulated by a set of written rules known as the ARC Terms of Reference that has been endorsed by the Board. The principal responsibilities of the ARC include:

  1. to review with the internal and external auditors of AGT, the following:
    1. the internal and external audit plans of AGT;
    2. the auditors' evaluation of the system of internal accounting controls of the Trustee-Manager;
    3. the respective auditors' audit reports for AGT;
    4. the auditors' management letter and management's response; and
    5. ensure co-ordination where more than one audit firm is involved;
  2. to review
    1. the assistance given by the Management to the auditors of AGT;
    2. the scope and results of the internal audit procedures of the Trustee-Manager of AGT;
    3. the policies and practices put in place by the Trustee-Manager for AGT as a registered business trust to ensure compliance with the BTA and the Trust Deed;
    4. the procedures put in place by the Trustee-Manager 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;
    5. Interested Person Transactions for potential conflicts of interest; and
    6. risk management policies and guidelines and monitor compliance therewith;
  3. to review the statement of financial position, statement of profit or loss and cash flow statement of AGT and the statement of financial position, statement of profit or loss and cash flow statement of the Trustee-Manager submitted to it by the Trustee-Manager, and thereafter to submit them to the Board;
  4. to review the allocation of profits and losses of the Tokumei Kumiai ("TK") business; namely, the management and operation of the golf course business, pursuant to the TK agreement governing the TK relationship between the investor and the business operator;
  5. to review significant reporting issues and judgements to ensure the integrity of the financial statements and any formal announcements relating to financial performance;
  6. to discuss problems and concerns, if any, arising from the quarterly/interim and final audits, in consultation with the external auditors and the internal auditors where necessary;
  7. to report to the Board:
    1. any inadequacies, deficiencies or matters of concern of which the ARC becomes aware or that it suspects arising from its review of the items referred to in sub-paragraphs (a), (b) and (c) above; and
    2. any breach of the BTA or any breach of the provisions of the Trust Deed, of which the ARC becomes aware or that it suspects;
  8. to report to the MAS if the ARC is of the view that the Board has not taken, or does not propose to take, appropriate action to deal with a matter reported under sub-paragraph (g) above;
  9. to nominate a person or persons as auditor of AGT, notwithstanding anything contained in the Trust Deed;
  10. to review and approve all hedging policies and instruments to be implemented by AGT and the Golf Course Holding Company, if any;
  11. to monitor the implementation of outstanding internal control recommendations highlighted by the auditors in the course of their audit of the financial statements of AGT, the Trustee-Manager and their respective subsidiaries (if any) taken as a whole;
  12. to meet with external and internal auditors, without the presence of the Executive Officers, at least once annually to discuss any problems and concerns they may have;
  13. to review the internal audit program and the adequacy and effectiveness of the Trustee-Manager's internal audit function at least once annually, as well as to ensure co-ordination between the external auditors and in-house or outsourced internal auditors and Management;
  14. to review and advise the Board in formulating its risk policies to effectively identify and manage AGT and the Trustee-Manager's current (and future) risks in the areas of financial, operational, compliance and information technology;
  15. to review the design and implementation of the overall risk management systems and internal control systems (including financial, operational, compliance and information technology controls);
  16. to review the adequacy and effectiveness of AGT and the Trustee-Manager's risk management and internal control systems (including financial, operational, compliance and information technology controls) and to report to the Board annually;
  17. to review the scope and results of the internal audit procedures including the effectiveness of the internal audit function and ensure that the internal audit function is adequately resourced and has appropriate standing within the Trustee-Manager;
  18. to review and discuss with the external auditors, any suspected fraud or irregularity, or suspected infringement of any law, rules or regulations, which has or is likely to have a material impact on AGT's operating results or financial position, and Management's response;
  19. to investigate any matter within its terms of reference, with full access to and co-operation by 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;
  20. to review arrangements by which staff of the Trustee-Manager and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for such concerns to be raised and independently investigated and for appropriate follow up actions to be taken;
  21. to report to the Board its findings from time to time on matters arising and requiring the attention of the ARC;
  22. to approve the hiring, removal, evaluation and compensation of the head of the internal audit function, or the accounting firm/auditing firm or corporation to which the internal audit function is outsourced. To ensure that the internal audit function is staffed with persons with the relevant qualification and experience and that they carry out their functions according to the standards set by nationally or internationally recognised professional bodies, including the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors;
  23. to review the scope and results of the external audit, and the independence and objectivity of the external auditors, and to recommend to the Board the appointment, re-appointment and removal of the external auditors, and approve the remuneration and terms of engagement of the external auditors;
  24. to review the audit representation letters before consideration by the Board, giving particular consideration to matters that are related to non-standard issues;
  25. to undertake such other reviews and projects as may be requested by the Board; and
  26. to undertake such other functions and duties as may be required by statute or the SGX-ST Listing Manual, and by such amendments made thereto from time to time.

The ARC is briefed and updated by the external auditors on relevant changes to accounting standards and issues that have direct impact on financial statements during each of the meetings. During the financial year under review, the ARC also met with the external and internal auditors without the presence of Management.

In performing its function for the financial year ended 31 March 2020, the ARC:

  1. held four meetings in the period under review;
  2. reviewed and recommended to the Board, the quarterly and full year financial announcement;
  3. reviewed the Enterprise Risk Assessment Report;
  4. met with the external and internal auditors without the presence of Management, to review any matters that might be raised privately;
  5. reviewed the audit plans of external and internal auditors of AGT and their reports arising from the respective audits;
  6. reviewed the Key Audit Matters highlighted by the external auditors;
  7. reviewed the volume and nature of non-audit services provided by the external auditors and received the requisite information from external auditors supporting the latter's independence. Based on the information, the ARC is satisfied that the nature and the extent of such services would not affect the independence and objectivity of the external auditors. The external auditors have also confirmed their independence in this respect;
  8. reviewed the volume and nature of interested person transactions on a quarterly basis; and
  9. reviewed and pre-approved the derivatives transactions to ensure that the instruments, processes and practices are in accordance with the policy approved by the Board.

The ARC has undertaken a review of the nature and extent of all non-audit services provided by the external auditors during the financial year and is satisfied that such services have not, in the ARC's opinion, compromised the independence of the external auditors. The external auditors have also affirmed their independence in their report to the ARC. Accordingly, the ARC has recommended the re-appointment of the external auditors of the Trust at the AGM of the Unitholders.

The total audit fees paid to the external auditors are disclosed in the table below:

The total audit fees paid to the external auditors are disclosed in the table below:

AGT has complied with the requirement of Rules 712 and 715 of the SGX-ST Listing Manual in relation to the appointment of its external auditors.

Financial matters

In its review of the financial statements of the Group and AGT for the financial year ended 31 March 2020, the ARC had discussed with the Trustee-Manager regarding the identification of matters that could significantly affect the integrity of the financial statements ("significant financial reporting matters"). The discussion included assessment of the accounting principles and critical judgements applied by the Trustee-Manager and the clarity of the relevant disclosures in the financial statements. The significant financial reporting matters identified, which are consistent with the key audit matters identified by the external auditors, and the ARC's commentaries are set out as follows:

Financial matters

Following the review, the ARC recommended to the Board to approve the financial statements of the Group and AGT for the financial year ended 31 March 2020.

Whistle-Blowing Policy

The Trustee-Manager has put in place a whistle-blowing policy and has implemented relevant procedures, as approved by the ARC and adopted by the Board to provide an avenue through which employees and external parties alike may raise, in good faith and in confidence, any concerns about possible improprieties in matters of financial reporting or other matters to the ARC and that there will be independent investigation and appropriate follow-up actions taken.

Concerns about possible improprieties may be raised either in person or in writing by emailing their concerns to arc@agtrust.com.sg. Complaints may also be sent to the Trustee-Manager's registered address at 80 Robinson Road, #22-03A, Singapore 068898 and addressed to the Audit and Risk Committee c/o Accordia Golf Trust Management Pte. Ltd.

Internal Audit

The internal audit function is outsourced to BDO LLP (the "IA"). The IA adopts the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors.

The IA reports directly to the Chairman of the ARC and administratively to the CEO. The IA plans the internal audit schedules in consultation with, but independent of the Management.

The IA adopts a risk-based approach in formulating the annual audit plan which aligns its activities to the key risks across the Group's business. The reviews performed by the IA are aimed at assisting the Board in evaluating the adequacy and effectiveness of risk management, internal controls and governance processes.

During the year, the IA conducted its audit reviews based on the annual audit plan which was approved by the ARC. The annual audit plan also incorporates the audit of key risk areas identified under the Group Risk Management Framework. The IA would submit a report to the ARC on the key audit findings and actions to be taken by Management on such findings. Key findings are also highlighted at ARC meetings for discussion and follow-up actions. The ARC monitors the timely and proper implementation of the required corrective, preventive or improvement measures to be undertaken by Management.

The ARC is of the view that the internal audit function performed by the IA is effective and the IA have adequate resources to perform the functions and have, to the best of their ability, maintained their independence from the activities that they audit.

UNITHOLDER RIGHTS AND ENGAGEMENT

Principle 11

The company treats all unitholders fairly and equitably in order to enable them to exercise unitholders' rights and have the opportunity to communicate their views on matters affecting the company. The company gives unitholders a balanced and understandable assessment of its performance, position and prospects.

Principle 12

The company communicates regularly with its unitholders and facilitates the participation of unitholders during general meetings and other dialogues to allow unitholders to communicate their views on various matters affecting the company.

Principle 13

The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.

Disclosure of Information on a Timely Basis

The Trustee-Manager is committed to treating all Unitholders fairly and equitably and keeping all Unitholders and other stakeholders and analysts informed of the performance and changes in AGT or its business which would be likely to materially affect the price or value of its Units, on a timely and consistent basis, so as to assist Unitholders and investors in their investment decisions.

The Trustee-Manager provides accurate and timely disclosure of material and price sensitive information relating to AGT by way of public releases or announcements via SGXNET and subsequently on its corporate website www.agtrust.com.sg. Where immediate disclosure is not practicable, the relevant announcement is made as soon as possible to ensure that all stakeholders and the general public have equal access to the information.

The Trustee-Manager provides Unitholders with quarterly and annual financial statements within the timeframe set out in the SGX-ST Listing Manual. In doing so, the Board also aims to provide Unitholders with a balanced, clear and understandable assessment of AGT's performance, position and prospects. In order to achieve this, Management provides the Board with management accounts on a quarterly basis and such explanation and information as any Director may require, to enable the Directors to keep abreast, and make a balanced and informed assessment of AGT's performance, position and prospects.

Having considered the amendments to Rule 705(2) of the SGX-ST Listing Manual which took effect from 7 February 2020, the Trustee-Manager has on 25 June 2020 announced that it would not continue with quarterly reporting of AGT's financial results and would instead announce financial statements on a half-yearly basis with effect from the financial year beginning 1 April 2020. Accordingly, the next half-yearly financial statement announcement will be for the period 1 April 2020 to 30 September 2020. The Trustee-Manager will continue to comply with its continuing disclosure obligations to keep Unitholders updated as and when appropriate, should there be any material developments (financial or otherwise) relating to AGT.

Price-sensitive information and reports are further disseminated to Unitholders through announcements and press releases via SGXNET. The Annual Report to Unitholders is sent to all Unitholders and made available on SGXNET and AGT's corporate website.

The Trustee-Manager has received signed undertakings from all its Directors and executive officers pursuant to Rule 720(1) of the SGX-ST Listing Manual.

Conduct of General Meetings

The Trustee-Manager supports the principle of encouraging Unitholders' participation and voting at general meetings. General meetings will be convened at least once a year in accordance with applicable laws and regulations and all Unitholders will receive a copy of AGT's annual report with the notice of the annual general meeting ("AGM") prior to the AGM in compliance with the requisite notice period. For an extraordinary general meeting ("EGM") to be held, Unitholders will receive a copy of a circular with the notice of EGM which contains details of the matters to be proposed for Unitholders' consideration and approval. Notices for the general meetings setting out all items of business to be transacted at the general meetings will also be issued via SGXNET and advertised in a major newspaper in Singapore.

At general meetings, Unitholders are accorded the opportunity to raise relevant questions on AGT's business activities, financial performance and other business related matters and communicate their views on and discuss with the Board and the Trustee-Manager matters which they are concerned about regarding AGT. Representatives of the Trustee-Manager, Directors (including the Chairman of the Board and the chairman of the ARC), the Trustee-Manager's senior management and the external auditors of AGT, would usually be present at general meetings.

To safeguard Unitholders' interests and rights, a separate resolution is proposed for each substantially separate issue at general meetings. At the Unitholders' meeting, each resolution will be voted on by way of electronic poll voting for Unitholders/proxies present at the Unitholders' meeting. This allows all Unitholders present or represented at the meeting to vote on a one-Unit-one-vote basis. The detailed results showing the number of votes cast for and against each resolution and the respective percentages after each resolution has been put to vote are displayed real-time at the Unitholders' meeting. The outcome of each Unitholders' meeting will also be announced in a timely manner through SGXNET after the Unitholders' meeting.

Unitholders are encouraged to participate in the question and answer sessions, whereby minutes of the proceedings, including any substantial queries raised by Unitholders in relation to the agenda and the accompanying responses from the Board and Management, are subsequently prepared. Provision 11.5 of the 2018 CG Code states that the company should publish minutes of general meetings on its corporate website as soon as practicable. The Trustee-Manager is of the opinion that since only Unitholders are entitled to attend and vote at the general meetings, therefore, the content of such meetings should only be made available to Unitholders upon request and not to the general public by publishing it on the Trust's corporate website. Nonetheless, this is consistent with Principle 11 of the 2018 CG Code which requires the Trust to, inter alia, treat all Unitholders fairly and equitably. The Trustee-Manager will make the minutes of general meetings available to any Unitholder(s) upon request, so that all Unitholders will stand on equal footing, thereby satisfying the requirement for Unitholders to be treated "fairly and equitably" under Principle 11 of the 2018 CG Code. The Trustee-Manager believes that the same outcome of transparency for the benefit of Unitholders is achieved so long as the AGM minutes is made readily available upon request, even if the AGM minutes are not published on the Trust's website.

The Trust Deed does not allow a Unitholder to vote in absentia at general meetings but allows any Unitholder to appoint proxies during his/her absence to attend and vote on his/her behalf at the general meetings. This is consistent with Principle 11 of the 2018 CG Code as Unitholders are still given the opportunity to exercise their rights to attend and vote at general meetings through their proxies.

Stakeholders Engagement

The Trustee-Manager had a dedicated Investor Relations Manager (the "IR") to facilitate all communications. During the year, the CEO together with the IR engaged ten investors via conference calls and/or meetings in Singapore, Japan, Hong Kong and the United Kingdom.

In addition, the Trustee-Manager attends to queries or concerns from the investment community in a timely manner. Feedback and views received from them are also conveyed to Management by the IR. The corporate website also includes contact details for investor enquiries and feedback. Enquiries and feedback are attended to promptly.

Together with the Management, the IR communicated with Unitholders, its stakeholders as well as analysts and fund managers on a regular basis through investment conferences, non-deal roadshows, one-on-one meetings and group meetings to update AGT's strategy, performance and answers to queries. In addition, yearly site visits are conducted for analysts to have a deeper understanding of its business.

Apart from the SGXNet, the investment community can also access announcements, quarterly results, annual reports, investor presentations, production updates and other corporate information on the dedicated Investor Relations section of AGT's corporate website www.agtrust.com.sg.

More details on the investor relations activities can be found on pages 22 to 23 of the Annual Report.

STATEMENT OF POLICIES AND PROCEDURES

The Trustee-Manager has the dual responsibility of safeguarding the interests of Unitholders and managing the business conducted by AGT. The Trustee-Manager has general powers of management over the business and assets of AGT and its main responsibility is to manage AGT's assets and liabilities for the benefit of the Unitholders as a whole. The Trustee-Manager is not involved in any other business other than managing AGT.

The Trustee-Manager will set the strategic direction of AGT and decide on the acquisition, divestment or enhancement of assets of AGT in accordance with its stated investment strategy. Additionally, the Trustee-Manager will undertake active management of AGT's assets (being the TK Interests) to enhance the performance of the portfolio. It will also undertake capital and risk management strategies in order to maintain a strong balance sheet for AGT.

The Trustee-Manager is also obliged to exercise the degree of care and diligence required of a trustee-manager of a registered business trust to comply with the applicable provisions of all relevant legislation, as well as the SGX-ST Listing Manual, and is responsible for ensuring compliance with the Trust Deed and all relevant contracts entered into by the Trustee-Manager on behalf of AGT.

Furthermore, the Trustee-Manager will prepare business plans on a regular basis, which may contain proposals and forecasts on net income, capital expenditure, sales and valuations, explanations of major variances to previous forecasts, written commentaries on key issues and any relevant assumptions. The purpose of these plans is to explain the performance of AGT's investments.

The Trustee-Manager, in exercising its powers and carrying out its duties as Trustee-Manager, is required to:

  1. treat Unitholders who hold Units in the same class fairly and equally;
  2. ensure that all payments out of the Trust Property are made in accordance with the BTA and the Trust Deed;
  3. report to the Authority any contravention of the BTA or the Securities and Futures (Offers of Investments) (Business Trusts) (No. 2) Regulations 2005 ("SF BT Regulations") by any other person that:
    1. relates to AGT; and
    2. has had, has or is likely to have, a material adverse effect on the interests of all Unitholders, or any class of Unitholders, as a whole, as soon as practicable after the Trustee-Manager becomes aware of the contravention;
  4. ensure that the Trust Property is properly accounted for; and
  5. ensure that the Trust Property is kept distinct from the property held in its own capacity.

The Board meets regularly to review AGT's business activities and strategies pursuant to its then prevailing investment mandate. Such regular review is aimed at ensuring adherence to the Trust Deed and compliance with any applicable legislation, regulations and guidelines such that all projects are within the permitted business scope under the Trust Deed. Prior to the conduct of any significant business transaction, the Board, the ARC and/or Management will have careful regard to the provisions of the Trust Deed and when in doubt, seek advice from professional advisers.

The Trustee-Manager also has the following statutory duties under the BTA:

  1. at all times act honestly and exercise reasonable diligence in the discharge of its duties as AGT's trustee-manager in accordance with the BTA and the Trust Deed;
  2. act in the best interests of all Unitholders as a whole and give priority to the interests of all Unitholders as a whole over its own interests in the event of a conflict between the interests of all the Unitholders as a whole and its own interests;
  3. not make improper use of any information acquired by virtue of its position as Trustee-Manager to gain, directly or indirectly, an advantage for itself or for any other person to the detriment of the Unitholders; and
  4. hold the Trust Property on trust for all Unitholders as a whole in accordance with the terms of the Trust Deed.

Dealing in Units

The Trustee-Manager has adopted an internal compliance code of conduct to provide guidance to all officers of the Trustee-Manager with regard to dealings in securities of AGT (the "Code of Conduct") in compliance with Rule 1207(19) of the SGX-ST Listing Manual.

The Code of Conduct encourages Directors and employees of the Trustee-Manager to hold Units over the long term and not to deal in such Units on short term considerations. The Code of Conduct also prohibits the Trustee-Manager, its Directors and employees from dealing in such Units during the "closed" window period as follows:

For the financial year under review, the Trustee-Manager, its Directors and employees have complied with the closed window period.

With the cessation of the quarterly announcement of financial statements of AGT, the Trustee-Manager will be amending the "closed" window period to comply with Rule 1207 (19)(c) of the SGX-ST Listing Manual.

The Directors and employees of the Trustee-Manager are expected not to deal in the units of AGT on a short-term consideration and to observe insider-trading laws at all times even when dealing with units of AGT within the permitted trading period.

Each Director and the CEO are required to give notice in writing to the Trustee-Manager of, among others, particulars of his interest in Units or of changes in the number of Units which he has an interest, within two business days in Singapore after the date on which the Director or CEO becomes a director or CEO of the Trustee-Manager or the date on which he acquires an interest in the Units or he becomes aware of the occurrence of the event giving rise to changes in the number of Units which he has an interest.

The Trustee-Manager is required to announce to the SGX-ST the particulars of its holdings in the Units and any changes thereto as soon as practicable and in any case no later than the end of the business day following the day on which it acquires or, as the case may be, disposes of any Unit.

In response to specific enquiries made, all Directors and key officers have confirmed that they have complied with the relevant Code of Conduct in their securities transactions throughout the financial year.

Material Contracts

There are no material contracts entered into by AGT or any of its subsidiary that involve the interests of the CEO, any Director, any controlling Unitholder or any controlling shareholder of the Trustee-Manager, either still subsisting or entered into during FY19/20, other than, where applicable:

  1. as disclosed on page 332 to 353 of the Prospectus; and
  2. interested person transactions as listed in the Interested Person Transactions section of the Annual Report.

Conflicts of Interests

The Trustee-Manager has instituted the following procedures to deal with conflict of interest issues:

  1. All resolutions in writing of the Directors in relation to matters concerning AGT must be approved by a majority of the Directors, including at least one Independent Director.
  2. In respect of matters in which the Sponsor and/or its subsidiaries have an interest, direct or indirect, any nominee appointed by the Sponsor and/or its subsidiaries to the Board to represent its/their interests will abstain from voting. In such matters, the quorum must comprise a majority of the Independent Directors and must exclude nominee Directors of the Sponsor and/or its subsidiaries.
  3. Where matters concerning AGT relate to transactions entered into or to be entered into by the Trustee-Manager for and on behalf of AGT with an interested person, the Board is required to consider the terms of such transactions to satisfy itself that such transactions are conducted on normal commercial terms, are not prejudicial to the interests of AGT and its minority Unitholders, and in accordance with all applicable requirements of the SGX-ST Listing Manual and the BTA relating to the transaction in question. If the Trustee-Manager is to sign any contract with a related party of the Trustee-Manager or AGT, the Trustee-Manager (including the ARC) will review the contract to ensure that it complies with the provisions of the SGX-ST Listing Manual and the BTA relating to interested person transactions (as may be amended from time to time) as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to business trusts.
  4. It should be noted that the Trustee-Manager is prohibited from carrying on any business other than the management and operation of AGT as its Trustee-Manager.
  5. In order to manage any potential competition and conflict of interest that may arise between the Sponsor and the Trustee-Manager and/or the Golf Course Holding Company in relation to any asset that falls within the investment mandate of AGT or the holding of the Initial Portfolio golf courses for the purpose of managing and operating the golf course business (the "TK Business"), the Sponsor has granted (i) a right of first refusal to Golf Course Holding Company, (ii) a right of first refusal to the Trustee-Manager, and a call option to each of the Golf Course Holding Company and the Trustee-Manager, with effect from the Listing Date.
  6. For as long as Daiwa Securities Group Inc. and/or its associates is a controlling shareholder of the Trustee-Manager and should Daiwa Securities Group Inc. and/or its associates hold in aggregate 15% or more of the total voting rights of the Sponsor, Daiwa Securities Group Inc. and/or its associates shall abstain from voting on their Units in relation to transactions entered into between AGT or its subsidiary and the Sponsor group in accordance with the SGX-ST Listing Manual.

Interested Person Transactions

The Trustee-Manager has established an internal controls system to ensure that all interested person transactions:

  1. will be undertaken on normal commercial terms; and
  2. will not be prejudicial to the interests of AGT and its minority Unitholders.

As a general rule, the Trustee-Manager must demonstrate to its ARC that such transactions satisfy the foregoing criteria. This may entail obtaining (where practicable) a quotation from a party unrelated to the Trustee-Manager.

The Trustee-Manager maintains a register to record all interested person transactions which are entered into by AGT and the bases, including any quotation from unrelated parties obtained to support such bases, on which they are entered into.

The Trustee-Manager has also incorporated into its internal audit plan, a periodic review of all interested person transactions entered into by AGT during the period under review. Furthermore, the ARC will review at least quarterly in each financial year the interested person transactions entered into during such quarterly period to ascertain that the guidelines and procedures established to monitor interested person transactions have been complied with.

Where matters concerning AGT relate to transactions entered into or to be entered into by the Trustee-Manager for and on behalf of AGT with a related party of the Trustee-Manager (which would include relevant associates thereof) or AGT, the Trustee-Manager is required to consider the terms of such transactions to satisfy itself that such transactions are conducted:

  1. on normal commercial terms;
  2. are not prejudicial to the interests of AGT and its minority Unitholders; and
  3. in accordance with all applicable requirements of the SGX-ST Listing Manual and the BTA relating to the transaction in question.

If the Trustee-Manager is to sign any contract with a related party of the Trustee-Manager or AGT, the Trustee-Manager (including the ARC) will review the contract to ensure that it complies with the provisions of the SGX-ST Listing Manual and the BTA relating to interested person transactions (as may be amended from time to time) as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to business trusts.

The aggregate of transactions entered into with interested persons/parties during the financial year ended 31 March 2020 and pursuant to Rule 907 of the SGX-ST Listing Manual are as follows:

The aggregate of transactions entered into with interested persons during the financial year ended 31 March 2020

FEES PAYABLE TO THE TRUSTEE-MANAGER

The fees payable to the Trustee-Manager in respect of its services to AGT are calculated based on the following:

Management fees

The Trustee-Manager is entitled under the Trust Deed to receive the Trustee-Manager's fee calculated in the formula below:

Fees and expenses paid to the Trustee-Manager out of the Trust Property for FY19/20 are disclosed in pages 48 and 94 of the Annual Report.

Corporate Social Responsibility

The Trustee-Manager is committed to ensuring that its commercial activities are conducted in a manner that best serves the stakeholders' interests. The activities are conducted within the framework of applicable professional standards, laws and regulations.

Steps have been taken to integrate and manage the issues of sustainability and social responsibility within the operations of the Trustee-Manager in order to minimise the impact on the environment and to ensure that there are high standards in place to safeguard the safety and welfare of all employees. Open communication between employees and Management is encouraged to foster collaboration and teamwork.

The Group focuses on the long-term sustainability of the golf business and is aware of environmental issues which the industry is constantly facing. As such, it has adopted a proactive approach towards its environmental, social and governance responsibility and has introduced initiatives that benefit its stakeholders, employees and local community. Details of the Group's initiatives will be disclosed in its Sustainability Report to be published online during FY20/21.