Board of Directors of the Manager

The Board is responsible for the overall corporate governance of the Manager including establishing goals for management and monitoring the achievement of these goals. The Manager is also responsible for the strategic business direction and risk management of K-REIT Asia. All Board members participate in matters relating to corporate governance, business operations and risks, financial performance and the nomination and review of Directors. The Board has established a framework for the management of the Manager and K-REIT Asia, including a system of internal control and a business risk management process. The Board consists of six members, four of whom are Independent Directors. None of the Directors of the Manager has entered into any service contract directly with K-REIT Asia.

The composition of the Board has been determined using the following principles:

1. the Chairman of the Board should be a non-executive Director of the Manager;
2. the Board comprises Directors with range of commercial and financial experience including expertise in funds management and the property industry; and
3. at least one-third of the Board comprises Independent Directors.

The composition will be reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience.

The Board has established the Audit Committee to assist it in discharging its responsibilities.

Audit Committee

The Audit Committee is appointed by the Board from among the Directors of the Manager and comprises of three members who are Independent Directors. The members of the Audit Committee are Dr Chin Wei-Li, Audrey Marie, Professor Tsui Kai Chong and Mrs Lee Ai Ming. Dr Chin Wei-Li, Audrey Marie is the Chairperson of the Audit Committee. The role of the Audit Committee is to monitor and evaluate the effectiveness of the Manager's internal controls. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in financial reports. The Audit Committee is responsible for the nomination of external auditors and reviewing the adequacy of external audits in respect of cost, scope and performance.

The Audit Committee's responsibilities include:

1. review the audit plans and reports of the Manager's external auditors and internal auditors, and consider the effectiveness of actions or policies taken by management on the recommendations and observations;
2. perform independent review of the financial statements;
3. examine the effectiveness of financial, operating and compliance controls;
4. nominate external auditors;
5. review the independence and objectivity of the external auditors annually;
6. review the nature and extent of non-audit services performed by external auditors;
7. meet with external and internal auditors, without the presence of Management, at least annually;
8. ensure that the internal audit function is adequately resourced and has appropriate standing with the Company;
9. monitor the procedures in place to ensure compliance with applicable legislation, the Listing Manual and the Code on Collective Investment Schemes (including the Property Funds Guidelines);
10. monitor and review the procedures established to regulate interested party transactions, including ensuring compliance with the provisions of the Listing Manual relating to “interested person transaction” (as defined therein) and the provisions of the Property Funds Guidelines relating to “interested party transactions” (as defined therein) (both such type of transactions constituting interested party transactions);
11. investigate any matters within the Audit Committee’s terms of reference, whenever it deems necessary; and
12. report to the Board on material matters, findings and recommendations.

The Trust Deed requires each Director to give notice to the Manager of his acquisition of Units or of changes in the number of Units which he holds or in which he has an interest, within two (2) Business Days after such acquisition or the occurrence of the event giving rise to changes in the number of Units which he holds or in which has an interest.

Directors and employees of the Manager who hold Units are prohibited from dealing in those Units:

1. in the period commencing one month before the public announcement of K-REIT Asia's annual results and (where applicable) property valuations and two weeks before the public announcement of K-REIT Asia's quarterly results, and ending on the date of announcement of the relevant results or, as the case may be, property valuations; and

2. at any time while in possession of unpublished price-sensitive information.

Management of Business Risks

The Board will meet regularly to review the financial performance of the Manager and K-REIT Asia against a previously approved budget. The Board will also review the business risks of K-REIT Asia, examine liability management and will act upon any comments from the auditors of K-REIT Asia.

The Manager has appointed experienced and well-qualified management to handle the day-to-day operations of the Manager and K-REIT Asia. In assessing business risk, the Board will consider the economic environment and risks relevant to the property industry. It reviews management reports and feasibility studies on individual development projects prior to approving major transactions. The management meets regularly to review the operations of the Manager and K-REIT Asia and discuss any disclosure issues.

Conflicts of Interest

The Manager has instituted the following procedures to deal with conflict of interests issues:

1. The Manager will not manage any other real estate investment trust which invests in the same types of properties as K-REIT Asia.
2. All executive officers will be employed by the Manager.
3. All resolutions in writing of the Directors of the Manager in relation to matters concerning K-REIT Asia and its Interested Parties must be approved by a majority of the Directors, including at least one Independent Director and the nominees of the Interested Party on the Board shall abstain from voting.
4. At least one-third of the Board shall comprise Independent Directors.
5. All matters relating to interested party transactions will follow the procedures set out in the section “Interested Party Transactions”.
6. In respect of matters in which Keppel Land and/or KCL and/or its/their subsidiaries have an interest, direct or indirect, any nominees appointed by Keppel Land and/or KCL and/or its/their subsidiaries to the Board to represent its/their interests shall abstain from voting. In such matters, the quorum shall comprise a majority of the Independent Directors of the Manager and shall exclude such nominee directors of Keppel Land and/or KCL and/or its/their subsidiaries.

It is also provided in the Trust Deed that if the Manager is required to decide whether to or not to take any action against any person in relation to any breach of any agreement entered into by the Trustee for and on behalf of K-REIT Asia with a interested party of the Manager, the Manager shall be obliged to consult with a reputable law firm (acceptable to the Trustee) who shall provide legal advice on the matter. If the said law firm is of the opinion that the Trustee, on behalf of the K-REIT Asia, has a prima facie case against the party allegedly in breach under such agreement, the Manager shall be obliged to take appropriate action in relation to such agreement. The Directors of the Manager (including its Independent Directors) will have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the Trustee for and on behalf of the K-REIT Asia with a interested party of the Manager and the Trustee may take such action as it deems necessary to protect the rights of the Unitholders and/or which is in the interests of Unitholders. Any decision by the Manager not to take action against an interested party of the Manager shall not constitute a waiver of the Trustee’s right to take such action as it deems fit against such interested party.

The Board of the Manager comprises three Independent Directors, two of whom (that is, Professor Tsui Kai Chong and Mrs Lee Ai Ming) are also independent directors of Keppel Land. Where there is any matter to be considered and voted upon by the Directors of the Manager in relation to transactions between K-REIT Asia on the one hand and Keppel Land and its subsidiaries on the other, Professor Tsui Kai Chong and/or Mrs Lee Ai Ming shall abstain from voting in such situations where they find themselves in a position in which they are unable to exercise independent judgment in the best interests of K-REIT Asia.

Further, to address potential conflicts of interests in respect of overlapping investment objectives, Keppel Land will inform K-REIT Asia if any completed investment property used or predominantly used for commercial purposes and which is income-producing is identified by Keppel Land as being suitable for acquisition (other than co-investment with third parties), and being suitable for investment by K-REIT Asia.

Under the Trust Deed, the Manager and its Associates are prohibited from voting their Units at, or being part of a quorum for, any meeting of Unitholders convened to approve any matter in which the Manager or any of its Associates has a material interest in the business to be conducted.