One - Lippo Malls Indonesia Retail Trust - Investor Relations

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46Lippo-Mapletree Indonesia Retail Trust Annual Report 2009Corporate Governance (Cont’d)RELATED PARTY TRANSACTIONSIn general, the Manager has established procedures to ensure that all Related Party Transactions will be undertaken on normal commercialterms and will not be prejudicial to the interests of LMIR Trust and the Unitholders. As a general rule, the Manager must demonstrate toits Audit Committee that such transactions satisfy the foregoing criteria, which may entail obtaining (where practicable) quotations fromparties unrelated to the Manager, or obtaining one or more valuations from independent professional valuers (in accordance with theProperty Funds Guidelines).In addition, the following procedures will be undertaken:• transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party duringthe same fi nancial year) equal to or exceeding S$100,000.00 in value but below 3.0% of the value of LMIR Trust’s net tangible assetswill be subject to review by the Audit Committee at regular intervals;• transactions (either individually or as part of a series or if aggregated with other transactions involving the same related partyduring the same fi nancial year) equal to or exceeding 3.0% but below 5% of the value of LMIR Trust’s net tangible assets will besubject to review and prior approval of the Audit Committee. Such approval shall only be given if the transactions are on normalcommercial terms and are consistent with similar types transactions made by the Trustee with third parties which are unrelatedto the Manager; and• transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party duringthe same fi nancial year) equal to or exceeding 5.0% of the value of LMIR Trust’s net tangible assets will be reviewed and approvedprior to such transactions being entered into, on the basis described in the preceding paragraph, by the Audit Committee whichmay, as it deems fi t, request advice on the transactions from independent sources or advisers, including obtaining valuations fromindependent professional valuers. Further, under the Listing Manual and the Property Funds Guidelines, such transactions wouldhave to be approved by the Unitholders at a meeting of Unitholders.In practice, the Audit Committee generally adopts a more stringent threshold when dealing with Related Party Transactions.Where matters concerning LMIR Trust relate to transactions entered into or to be entered into by the Trustee (as trustee of LMIR Trust) witha related party of the Manager or LMIR Trust, the Trustee is required to consider the terms of such transactions to satisfy itself that suchtransactions are conducted on arm’s length basis and on normal commercial terms, are not prejudicial to the interests of LMIR Trust andthe Unitholders, and are in accordance with all applicable requirements of the Property Funds Guidelines and/or the Listing Manual relatingto the transaction in question. Further, the Trustee (as trustee of LMIR Trust) has the ultimate discretion under the Trust Deed to decidewhether or not to enter into a transaction involving a related party of the Manager or LMIR Trust. If the Trustee (as trustee of LMIR Trust) isto sign any contract with a related party of the Manager or LMIR Trust, the Trustee will review the contract to ensure that it complies withthe requirements relating to interested party transactions in the Property Funds Guidelines (as may be amended from time to time) and theprovisions of the Listing Manual relating to interested person transactions (as may be amended from time to time) as well as such otherguidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to REITs.Role of the Audit Committee for Related Party TransactionsAll Related Party Transactions will be subjected to regular periodic reviews by the Audit Committee. The Manager’s internal controlprocedures are intended to ensure that Related Party Transactions are conducted on arm’s length basis and on normal commercial termsand are not prejudicial to the interest of Unitholders.The Manager will maintain a register to record all Related Party Transactions (and the bases, including any quotations from unrelated thirdparties and independent valuations obtained to support such bases, on which they are entered into) which are entered into by LMIR Trust.The Manager will incorporate into its internal audit plan a review of all Related Party Transactions entered into by LMIR Trust. The AuditCommittee shall review the internal audit reports to ascertain that the guidelines and procedures established to monitor Related PartyTransactions have been complied with. In addition, the Trustee will also have the right to review such audit reports to ascertain that theProperty Funds Guidelines have been complied with. The Audit Committee will periodically review all Related Party Transactions to ensurecompliance with the Manager’s internal control procedures and with the relevant provisions of the Property Funds Guidelines and/or theListing Manual. The review will include the examination of the nature of the transactions and its supporting documents or such other datadeemed necessary by the Audit Committee.
47Corporate Governance (Cont’d)If a member of the Audit Committee has an interest in a transaction, he is required to abstain from participating in the review and approvalprocess in relation to that transaction.The Manager discloses in LMIR Trust’s annual report the aggregate value of Related Party Transactions entered into during the relevantfi nancial year.COMMUNICATION WITH UNITHOLDERSThe Listing Manual of the SGX-ST requires that a listed entity disclose to the market matters that would be likely to have a material effecton the price of the entity’s securities. The Manager strives to uphold a strong culture of timely disclosure and transparent communicationwith LMIR Trust Unitholders and the investing community.The Manager’s disclosure policy requires timely and full disclosure of all material information relating to LMIR Trust by way of publicreleases or announcements through the SGX-ST via SGXNET at fi rst instance and then including the release on LMIR Trust’s website atwww.lmir-trust.comUnitholders are entitled to attend and vote at meetings of Unitholders and will be given the opportunity to raise questions and seek clarityon any resolutions.BOARD COMPOSITION AND AUDIT COMMITTEEThe Manager believes that contributions from each Director can be refl ected in ways other than the reporting of attendances at Board andAudit Committee meetings. A Director of the Manager would have been appointed on the principles outlined earlier in this statement, andhis ability to contribute to the proper guidance of the Manager in its management of LMIR Trust.The matrix of the Board members and Audit Committee members attendance at meetings held in the year 2009 is as follows:Name of Directors/Audit Committee MembersBoard MeetingsAttendance/No. of meetings heldAudit Committee MeetingsAttendance/No. of meetings heldMr Tan Bar Tien 8/8 4/4Mr Lim Ho Seng 8/8 4/4Mr Lok Vi Ming 6/8 4/4Ms Viven Gouw Sitiabudi 8/8 N.AMr Yeo Cheow Tong 6/8 N.AMr Tan Boon Leong 8/8 N.AMr Wong Mun Hoong 8/8 N.A
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