Our structure

On 30 November 2016 Vital became a registered managed investment scheme under the Financial Markets Conduct Act 2013. The Trust Deed was amended to bring it into compliance with the FMCA and the Financial Markets Conduct Regulations 2014 (FMC Regulations). You can view a consolidated copy of the Trust Deed here. A copy of the Trust Deed marked to show the amendments are available here

You can also view these at our registered office at Level 16, AIG Building, 41 Shortland Street, Auckland any time during normal business hours or on the Companies Office website at (https://disclose-register.companiesoffice.govt.nz/disclose ). 

The Manager’s responsibilities include the day-to-day management of Vital’s portfolio of properties and assets, negotiating the acquisition and disposal of assets, development and construction planning and management, treasury and funding management, ensuring Vital meets its financial, reporting and other statutory and regulatory obligations and communicating with unitholders and the market. 

Vital does not engage or employ any Directors or employees of its own. The Manager provides a highly experienced and diverse range of professionals with expertise across a range of areas.

Stipulated within the Trust Deed is the basis on which the Manager is entitled to receive management fees and incentive fees. 

Management fees are charged, in respect of each month, a base fee equal to 0.75% per annum of the monthly average of the Gross Value of the assets of Vital for the quarter ended on the last day of that month. The incentive fee is an amount equal to 10% per annum of the average annual increase in the Gross Value of Vital over the relevant financial year and two preceding financial years.

The Manager is required to apply the incentive fee in subscribing for new Units in Vital issued at the weighted average price. The remuneration of the Manager is subject to an overall limit of 1.75% per annum of the Gross Value of Vital and includes the remuneration of the CEO and management team. 

The Manager is each entitled to be reimbursed out of the Trust Fund for all expenses, costs or liabilities incurred by them respectively in acting as Manager or Trustee.

Introduction

Corporate governance is the systems under which an organisation is guided, managed and measured. Good corporate governance is important to promote market and investor confidence. Ultimate responsibility for corporate governance of Vital resides with the Board of Directors of the Manager. The Board acknowledges strong corporate governance and stewardship as fundamental to the strong performance of Vital and, accordingly, their commitment is to the highest standards of business behaviour and accountability. It is with these objectives in mind that the Board has adopted its current framework, which, in the Board’s opinion materially comply with the NZX Corporate Governance Best Practice Code (NZX Code) and the Financial Markets Authority corporate governance principles and guidelines, unless otherwise stated.

A strong, independent Board

The Manager is committed to having an effective Board providing a balance of independent skills, knowledge, experience and perspectives. The Constitution of the Manager provides for there to be not more than seven Directors, nor less than three Directors. All the members of the Board are Non-Executive Directors. All bring a significant breadth and depth of expertise and have the composite skills to optimise the financial and portfolio performance of Vital and returns to unitholders.

The Board does not impose a restriction on the tenure of any Director as it considers that such a restriction may lead to the loss of experience and expertise from the Board. Appointment Unitholders have the opportunity to nominate two of the Independent Directors of the Manager required by the NZX Listing Rule 3.3.1.(c). Unitholders are able to nominate and vote on one Independent Director of the Manager each year. The nominee receiving the most votes will be approved as a Director of the Manager by the Manager’s shareholders, and will hold the position for a two-year term.

Board committee structure operating under formal charters

Consistent with NZX guidelines, the Board uses a number of committees to assist in the delivery of its duties and responsibilities. Board committees assist with the execution of the Board’s responsibilities to unitholders. Each committee operates under a charter agreed by the Board, setting out its role, responsibilities, authority, relationship with the Board, reporting requirements, composition, structure and membership.

To view the Board Charter, click here.

Audit Committee

The Board has established an Audit Committee, which is responsible for overseeing the financial and accounting responsibilities of Vital. The minimum number of members on the Audit Committee is three. All members must be Directors, the majority must be Independent Directors and at least one member must have an accounting or financial background. The members of the Audit Committee are Claire Higgins (Chair), Andrew Evans and Bernard Crotty.

The Audit Committee assists the Board in fulfilling its corporate governance and disclosure responsibilities with particular reference to financial matters, and internal and external audit, and is specifically responsible for: 

• Recommending to the Board the appointment/removal of Vital’s external auditor
• Supervising and monitoring external audit requirements
• Reviewing annual and interim financial statements prior to submission for Board approvals
• Reviewing and approving quarterly distributions with recommendation of the same for Board approvals
• Reviewing the performance and independence of the external auditor
• Monitoring compliance with the Unit Trusts Act 1960, Financial Reporting Act 2013, Companies Act 1993 and the NZX Listing Rules

In addition to the formal charter under which it operates, the Audit Committee has also developed a Charter of Audit Independence, which sets out the procedures that need to be followed to ensure the independence of the Trust’s external auditor.

To view the Audit Committee Charter, click here.

Due Diligence Committee

From time to time the Board establishes Due Diligence Committees (DDC) to report on the due diligence process in relation to any potential transaction for Vital of material size or complexity. An example would be a material portfolio acquisition or equity capital raising. A DDC will normally include all Directors, relevant management staff and external consultants appropriate for the transaction.

Remuneration Committee

The NZX Code recommends that a Remuneration Committee be established to benchmark remuneration packages for Directors and senior employees and that the information be disclosed to investors. A key feature of the external management structure that Vital operates under is that all employment expenses are the responsibility of the Manager, not Vital. Consequently, a Remuneration Committee is not considered necessary by the Board at this time.