Corporate Governance
The Board and Management of
K-REIT Asia Management Limited, the
manager of K-REIT Asia (the Manager),
are fully committed to good corporate
governance as they firmly believe that it
is essential to protect the best interests
of the unitholders of K-REIT Asia
(Unitholders), as well as critical
to the performance and success
of the Manager.
The Manager uses the Code of
Corporate Governance 20051 (the
Code) as its benchmark. The following
describes the Manager’s main corporate
governance policies and practices with
specific reference to the Code.
The Manager of K-REIT Asia
The Manager has general powers
of management over the assets of
K-REIT Asia. The Manager’s main
responsibility is to manage the assets
and liabilities of K-REIT Asia for the
benefit of Unitholders. The Manager
manages the assets of K-REIT Asia
with a focus on generating rental
income and to enhance the returns
from the investments of K-REIT Asia
and ultimately the distributions and
total returns to Unitholders.
The primary role of the Manager
is to set the strategic direction of
K-REIT Asia and make recommendations
to RBC Dexia Trust Services Singapore
Limited as trustee of K-REIT Asia
(the Trustee) on the acquisition,
divestment or enhancement of the
assets of K-REIT Asia in accordance
with its stated investment strategy.
The research, analysis and evaluation
required to achieve this is carried out
by the Manager. The Manager is also
responsible for the risk management
of K-REIT Asia.
The Manager uses its best endeavours
to carry on and conduct its business
in a proper and efficient manner and to
ensure that K-REIT Asia is carried on
and conducted in a proper and efficient
manner and to conduct all transactions
with, or for K-REIT Asia, at arm’s length.
Other functions and responsibilities
of the Manager include:
- Developing a business plan
for K-REIT Asia with a view to
maximising the income of K-REIT Asia;
- Acquire, sell, lease, license or
otherwise deal with any real estate
in furtherance of the investment
policy and prevailing investment
strategy of K-REIT Asia;
- Supervise and oversee the
management of K-REIT Asia’s
properties (including lease audit,
systems control, data management
and business plan implementation);
- Undertake regular individual asset
performance analysis and market
research analysis;
- Manage the finances of
K-REIT Asia, including accounts
preparation, capital management,
co-ordination of the budget
process, forecast modelling,
performance analysis and reporting,
corporate treasury functions and
ongoing financial market analysis;
- Ensure compliance with the
applicable provisions of the
Companies Act, the Securities
and Futures Act of Singapore and
all other relevant legislation of
Singapore, the Listing Manual of
the Singapore Exchange Securities
Trading Limited (SGX), the Code
on Collective Investment Schemes
(including the Property Fund
Guidelines) issued by the Monetary
Authority of Singapore, and the
tax rulings issued by the Inland
Revenue Authority of Singapore
on taxation of K-REIT Asia and
its Unitholders;
- Manage communications with
Unitholders; and
- Supervising the property
managers which perform the
day-to-day property management
functions (including leasing,
accounting, budget, marketing,
promotion, property management,
maintenance and administration) for
K-REIT Asia’s properties, pursuant
to the property management
agreements signed for the
respective properties.
K-REIT Asia, constituted as a trust, is
externally managed by the Manager
and therefore has no personnel
of its own. The Manager appoints
experienced and well-qualified
management to run the day-to-day
operations of K-REIT Asia. All Directors
and employees of the Manager are
remunerated by the Manager, and not
by K-REIT Asia.
The Manager is appointed in
accordance with the terms of the
Trust Deed dated 28 November 2005
as amended by the Supplemental
Trust Deed dated 2 February 2006,
the Second Supplemental Trust
Deed dated 17 March 2006, the
Third Supplemental Deed dated 30
July 2007, the Fourth Supplemental
Deed dated 17 October 2007 and
the Fifth Supplemental Deed dated
19 January 2009 (collectively, the
Trust Deed). The Trust Deed outlines
certain circumstances under which
the Manager can be removed by
notice in writing given by the Trustee
in favour of a corporation appointed
by the Trustee, upon the occurrence
of certain events, including if the
Unitholders, by a resolution duly
proposed and passed by a simple
majority of Unitholders present and
voting at a meeting of Unitholders, with
no Unitholder (including the Manager)
being disenfranchised, vote to remove
the Manager.
1 The Code of Corporate Governance 2005 issued
by the Ministry of Finance on 14 July 2005.
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