Home > Investor Relations > Corporate Governance

Corporate Governance

Parkway Trust Management Limited, in its capacity as the Manager of PLife REIT recognises that an effective corporate governance culture is critical to the performance of the Manager and consequently, the success of PLife REIT. The Manager is firmly committed to good corporate governance and has adopted a comprehensive corporate governance framework that meets best practice principles. In particular, the Manager has an obligation to act honestly, with due care and diligence, and in the best interests of Unitholders.

The following sections describe the Manager's main corporate governance policies and practices. They encompass proactive measures for avoiding situations of conflict and potential conflicts of interest, including prioritising the interests of Unitholders over the Manager's. They also ensure that applicable laws and regulations within the Listing Manual of the Singapore Exchange Securities Trading Limited ("SGX-ST") (the "Listing Manual"), the Code of Collective Investment Schemes issued by the Monetary Authority of Singapore ("MAS") (the "CIS Code") including the Property Funds Appendix in Appendix 6 of the CIS Code (the "Property Funds Appendix") and the Securities and Futures Act, Chapter 289 of Singapore ("SFA"), are complied with, and that the Manager's obligations under PLife REIT's Trust Deed (defined below) are properly and efficiently carried out.

THE MANAGER OF PARKWAY LIFE REIT

The Manager has general powers of management over the assets of PLife REIT. The Manager's main responsibility is to manage PLife REIT's assets and liabilities for the benefit of Unitholders.

The Manager will set the strategic direction of PLife REIT and make recommendations to the Trustee on the acquisition, divestment and enhancement of assets of PLife REIT in accordance with its stated investment strategy.

Other main functions and responsibilities of the Manager are as follows:

Using its best endeavours to carry on and conduct its business in a proper and efficient manner, to ensure that the business of PLife REIT is carried on and conducted in a proper and efficient manner and to conduct all transactions with or on behalf of PLife REIT at arm's length and on normal commercial terms;
Preparing property plans on an annual basis for review by the directors of the Manager, which may contain proposals and forecasts on net income, capital expenditure, sales and valuations, explanations of major variances to previous forecasts, written commentary on key issues and underlying assumptions on inflation, annual turnover, rental rates, occupancy costs and any other relevant assumptions. The purpose of these plans is to explain the performance of PLife REIT's assets;
Ensuring compliance with the applicable provisions of the SFA and all other relevant laws and regulation, the Listing Manual, the CIS Code (including the Property Funds Appendix), the Trust Deed, the tax ruling issued by the Inland Revenue Authority of Singapore on the taxation of PLife REIT and its Unitholders and all relevant contracts;
Attending to all regular communications with Unitholders; and
Provision of project management services including co-ordination of pre-qualification and tender exercises as well as project meetings, recommendation of project budget and appointment of project consultants as well as monitoring and supervising any third parties engaged to provide such services.

PLife REIT, constituted as a trust, is externally managed by the Manager and accordingly, it has no personnel of its own. The Manager appoints experienced and well-qualified management to handle its day-to-day operations. All directors and employees of the Manager are remunerated by the Manager, and not PLife REIT.

Parkway Trust Management Limited is appointed as manager of PLife REIT in accordance with the terms of the Trust Deed dated 12 July 2007 (as amended, the "Trust Deed"). The Trust Deed outlines certain circumstances under which the Manager can be retired in favour of a corporation approved by the Trustee or be removed by notice given in writing from the Trustee upon the occurrence of certain events.

On 1 August 2008, a new licensing regime for managers of real estate investment trusts ("REITs") was implemented under the SFA. A person conducting REIT management activities is required to hold a capital markets services ("CMS") licence pursuant to the SFA. On 11 August 2009, the Manager obtained a CMS licence from MAS to conduct REIT management. As a holder of a CMS licence, the Manager is required to comply with various laws and regulations applicable to CMS licence holders which include, among others, the SFA, the Securities and Futures (Licensing and Conduct of Business) Regulations and the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations.

BOARD OF DIRECTORS

The board of directors of the Manager (the "Board'') is responsible for the overall management and corporate governance of the Manager including establishing goals for management and monitoring the achievement of these goals. 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 including a system of internal controls and a business risk management process.

The Board meets regularly, at least once every quarter, to deliberate the strategic policies of PLife REIT, including acquisitions and disposals, approval of the annual budget and review of the financial performance of PLife REIT against a previously approved budget, and to approve the release of the quarterly and full year results. The Board also reviews the risks to the assets of PLife REIT, examines liability management, and acts upon any comments from the auditors of PLife REIT. Where necessary, additional Board meetings are held to address significant transactions or issues.

The Board has adopted a set of internal controls which it believes is adequate and appropriate delegations of authority have been provided to management to facilitate operational efficiency.

Changes to regulations and accounting standards are monitored closely. To keep pace with regulatory changes where these changes have an important bearing on the Manager's or directors' disclosure obligations, the directors will be briefed either during Board meetings or at specially-convened sessions involving the relevant professionals. The Board may also participate in seminars and/or discussion group to keep abreast of the latest developments which are relevant to the Manager and PLife REIT. The management also provides the Board with complete and adequate information in a timely manner through regular updates on financial results, market trends and business developments.

The Board has separate and independent access to senior management and the company secretary at all times. The company secretary attends to corporate secretarial administration and attends all Board meetings. The appointment and removal of the company secretary is a Board reserved matter. The Board also has access to independent professional advice where appropriate.

Board Composition

The Board presently consists of eight members, seven of whom are non-executive directors (including three independent directors). The Chairman of the Board is Mr. Lim Kok Hoong. None of the directors has entered into any service contract directly with PLife REIT.

The composition of the Board is determined using the following principles:

the Chairman of the Board should be a non-executive Director of the Manager;
the Board should comprise Directors with a broad range of commercial experience, including expertise in funds management and the property industry; and
at least one-third of the Board should comprise independent Directors.

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

The majority of the directors are non-executive and/or independent of the management. This enables the management to benefit from their external, diverse and objective perspective on issues that are brought before the Board. It would also enable the Board to interact and work with the management through a robust exchange of ideas and views to help shape the strategic process. This, together with a clear separation of roles of the Chairman and Chief Executive Officer described below, provides a healthy professional relationship between the Board and the management, with clarity of roles and robust oversight as they deliberate the business activities of the Manager.

The latest profiles of the directors are set out on pages 12 to 15 of this Annual Report and additional information on the directors is as follows:

Name of director	Date of first appointment as a Director	Function(s)	Academic and professional qualifications	Directorships or chairmanships both present and those held over the preceding three years in other listed companies and other major appointments.
Lim Kok Hoong Age: 64	5/7/2007	Non-executive/ Independent Director, Chairman of Board and Member of Audit Committee	Bachelor of Commerce, Chartered Accountant, Australia, CPA Singapore	Singapore Tourism Board, Hoe Leong Corporation Ltd, Genting Singapore PLC, Global Logistics Properties Ltd
Puah Tuan Soon Benson Age: 54	5/7/2007	Non-executive/ Independent Director, Chairman of Remuneration Committee and Member of Audit Committee	B. Sc (Hons) - Hotel, Catering & Tourism Administration	The Esplanade Co Ltd SISTIC.com Pte Ltd Singapore Tourism Board
Tan Bong Lin Age: 55	5/7/2007	Non-executive/ Independent Director, Chairman of Audit Committee and Member of Remuneration Committee	Bachelor of Accountancy	-
Dr. Lim Cheok Peng Age: 65	23/4/2007	Non-executive Director	MBBS, M. Med. Int. Med., MRCP, FRCP (Edin), FRCP (Glasg), FAMS (Cardiology)	Parkway Holdings Limited
Dr Tan See Leng Age: 47	21/6/2011	Non-executive Director	MBBS, MMed, FCFPS, MBA (ChicagoBooth)	Parkway Holdings Limited, Managing Director of Parkway Pantai Limited, Trustee and Director of CFPS Holdings Pte Ltd, Vice President of College of Family Physicians Singapore
Ahmad Shahizam Bin Mohd Shariff Age: 41	21/6/2011	Non-executive Director	LL.B (Hons), Master in Public Administration	Parkway Pantai Limited, Parkway Holdings Limited, Pantai Holdings Berhad
Tan See Haw Age: 55	9/1/2009	Non-executive Director and Member of Remuneration Committee	Bachelor of Accountancy, Fellow Certified Public Accountant	-
Yong Yean Chau Age: 45	29/1/2009	Executive Director/ Chief Executive Officer	B.ACC (Hons), Fellow Certified Public Accountant	Hiap Tong Corporation Ltd

Meeting Attendance

The Manager held 4 Board meetings during the financial year. The attendance at the Board meetings is set out below.

Name of director	Board meetings attended
Lim Kok Hoong (Chairman)	4
Dr. Lim Cheok Peng	4
Puah Tuan Soon Benson	4
Tan Bong Lin	4
Tan See Haw	4
Yong Yean Chau	4
Dr Tan See Leng*	2
Ahmad Shahizam Bin Mohd Shariff*	2

* Appointed on 21 June 2011

Chairman and Chief Executive Officer

The positions of Chairman and Chief Executive Officer are separately held by two persons in order to maintain an effective check and balance. The Chairman of the Board, Mr. Lim Kok Hoong is an independent director. The Chief Executive Officer is Mr. Yong Yean Chau who is also an executive director of the Manager.

The Chairman is responsible for the overall management of the Board as well as ensuring that the directors and the management work together with integrity and competency and that the Board engages the management in constructive debate on strategy, business operations, enterprise risk and other plans.

The Chief Executive Officer has full executive responsibilities over the business directions and operational decisions in the day to day management of PLife REIT.

Independent Directors

The Board has three independent directors, namely Mr. Puah Tuan Soon Benson, Mr. Tan Bong Lin and Mr. Lim Kok Hoong. The criterion of independence is based on the definition given in the Code of Corporate Governance 2005. The Board considers an "independent" director as one who has no relationship with the Manager and PLife REIT, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director's independent business judgment with a view to the best interest of the Manager and PLife REIT.

Non-executive Directors

Non-executive directors exercise no management functions in the Manager or PLife REIT or any of its subsidiaries. Although all the directors have equal responsibility for the performance of the Manager and PLife REIT, the role of the non-executive directors is particularly important in ensuring that the performance of management in meeting agreed goals and objectives is reviewed and the reporting of performance is monitored; and the strategies proposed by the management are fully discussed and rigorously examined, taking into account the long-term interests of the PLife REIT's assets and the Unitholders.

Remuneration Committee

Directors' fees are paid by the Manager in its own capacity using its own funds and not from the funds of PLife REIT. The Manager has on 7 May 2009 set up a Remuneration Committee comprising Mr. Puah Tuan Soon Benson as Chairman and Mr. Tan Bong Lin and Mr. Tan See Haw as members. All these directors are non-executive and/or independent.

The Remuneration Committee is responsible for:

recommending to the Board a framework of remuneration for key executives, and to determine specific remuneration packages for each executive director and the Chief Executive Officer covering all aspects of remuneration including but not limited to director's fees, salaries, allowances, bonuses, options, and benefits in kind;
reviewing the appropriateness of remuneration awarded to attract, retain and motivate the senior executives and executive directors (the "Executives") needed to run the Manager and PLife REIT successfully;
reviewing the pay and employment conditions within the industry and those of the peer companies to ensure that the Executives are adequately remunerated;
reviewing the adequacy and form of the remuneration to the Executives to ensure that the remuneration realistically commensurate with the responsibilities and risks involved in being an effective member;
considering the eligibility of the Executives for benefits under long-term incentive schemes and the administration thereof; and
reviewing the use of long-term incentives, including share schemes, for the Executives.

The members of the Remuneration Committee do not participate in any decisions concerning their own remuneration.

The Remuneration Committee shall ensure that non-executive directors should not be over-compensated to the extent that their independence may be compromised. Further, the Remuneration Committee shall have the authority to consult experts (inside and/or outside the Manager) on the remuneration of all directors, if considered necessary.

The Manager held one Remuneration Committee meeting during the financial year. The attendance at the Remuneration Committee meeting is set out below.

Name of director	Remuneration Committee meetings attended
Puah Tuan Soon Benson (Chairman)	1
Tan Bong Lin	1
Tan See Haw	1

Audit Committee

The Audit Committee is appointed by the Board from among the directors of the Manager and is composed of three members, all of whom (including the Chairman of the Audit Committee) are independent non-executive directors. The members of the Audit Committee are Mr. Lim Kok Hoong, Mr. Puah Tuan Soon Benson and Mr. Tan Bong Lin. Mr. Tan Bong Lin has been appointed as the Chairman of the Audit Committee.

The role of the Audit Committee is to monitor and evaluate the adequacy of the Manager's internal controls and the effectiveness of the Manager's internal audit function. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in financial reports and is responsible for the nomination of external auditors and reviewing the adequacy of external audits in respect of cost, scope and performance.

In appointing the audit firms for the Group, the Audit Committee is satisfied that PLife REIT has complied with the Listing Rules 712 and 715 of the Listing Manual.

The Audit Committee's responsibilities also include:

monitoring the procedures established to regulate related party transactions, including ensuring compliance with the provisions of the Listing Manual relating to "interested person transactions" and the provisions of the Property Funds Appendix relating to "interested party transactions";
reviewing arrangements by which employees of the Manager may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and ensuring that arrangements are in place for the independent investigation of such matters and for appropriate follow-up action;
reviewing external and internal audit reports to ensure that where deficiencies in internal controls have been identified, appropriate and prompt remedial action is taken by the management;
reviewing internal audit reports at least twice a year to ascertain that the guidelines and procedures established to monitor related party transactions have been complied with;
ensuring that the internal audit function is adequately resourced and has appropriate standing within the Manager;
monitoring the procedures in place to ensure compliance with applicable legislation, the Listing Manual and the CIS Code including the Property Funds Appendix;
reviewing the nature and extent of non-audit services performed by external auditors;
reviewing, on an annual basis, the independence and objectivity of the external auditors;
meeting with external and internal auditors, without the presence of the executive officers at least annually;
examining the effectiveness of financial, operating and compliance controls at least annually;
reviewing the financial statements and the internal audit report;
reviewing the significant financial reporting issues and judgments so as to ensure the integrity of the financial statements of PLife REIT and any formal announcements relating to PLife REIT's financial performance;
investigating any matters within the Audit Committee's terms of reference, whenever it deems necessary; and
reporting to the Board on material matters, findings and recommendations.

The Audit Committee has conducted a review of all non-audit services provided by the external auditors and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

Audit Committee meetings are generally held after the end of every quarter of every financial year. The attendance at the Audit Committee meetings is set out below.

Name of director	Audit Committee meetings attended
Tan Bong Lin (Chairman)	4
Lim Kok Hoong	4
Puah Tuan Soon Benson	4

The Audit Committee meets with the external auditors, without the presence of management, at least once a year.

Internal Audit

The Manager has put in place a system of internal controls of procedures, including financial, operational and compliance controls, and risk management systems to safeguard PLife REIT's assets, Unitholders' interests as well as to manage risk.

The internal audit function of the Manager is out-sourced to an independent assurance service provider. The Audit Committee is satisfied that the internal auditor has met the standards established by internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The internal auditor reports directly to the Audit Committee on audit matters. The Audit Committee also reviews and approves the annual internal audit plan and reviews the internal audit reports and activities. The Audit Committee is of the view that the internal auditor has adequate resources to perform its functions and has to the best of its ability, maintained its independence from the activities that it audits.

Internal Controls

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. Nonetheless, the Audit Committee will:

satisfy itself, by such means as it shall consider appropriate, that adequate counter measures (i.e. mechanisms and processes, such as sound internal control systems) are in place to identify and mitigate any material business risks associated with the Manager and PLife REIT;
ensure that a review of the effectiveness and adequacy of the Manager's internal controls, including financial, operational and compliance controls, and risk management policies and systems, is conducted at least annually. Such review can be carried out by internal and/or external auditors;
ensure that the internal control recommendations made by internal and external auditors have been implemented by the Manager; and
ensure that the Board is in a position to comment on the adequacy of the internal controls of the Manager.

Based on the Audit Committee's review, the Board with the concurrence of the Audit Committee is of the opinion that there are adequate internal controls including financial, operational, compliance controls and risk management systems in the Manager.

DEALINGS IN PARKWAY LIFE REIT'S UNITS

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 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 he has an interest.

All dealings in units by the Board will be announced via SGXNET, with the announcement to be posted on the SGX-ST website at http://www.sgx.com.

The directors and employees of the Manager are encouraged, as a matter of internal policy, to hold units but are prohibited from dealing in the units:

in the period commencing one month before the public announcement of PLife REIT's annual results and (where applicable) property valuations and two weeks before the public announcement of PLife REIT's quarterly results, and ending on the date of announcement of the relevant results, or as the case may be, property valuations; and
at any time while in possession of price sensitive information.

The directors and employees of the Manager have been directed to refrain from dealing in units on a short term basis.

In addition, the Manager has given an undertaking to the MAS that it will announce via SGXNET the particulars of its holdings in the units and any changes thereto within two business days after the date on which it acquires or disposes of any units, as the case may be. The Manager has also undertaken that it will not deal in the units in the period commencing one month before the public announcement of PLife REIT's annual results and (where applicable) property valuations and two weeks before the public announcement of PLife REIT's quarterly results, and ending on the date of announcement of the relevant results or, as the case may be, property valuations.

RISK ASSESSMENT AND MANAGEMENT OF BUSINESS RISK

Effective risk management is a fundamental part of PLife REIT's business operations. Recognising and managing risk is central to the business and to protecting Unitholders' interests and value. PLife REIT operates within overall guidelines and specific parameters set by the Board. Each transaction is comprehensively analysed to understand the risk involved. Responsibility for managing risk lies initially with the business unit concerned, working within the overall strategy outlined by the Board.

The Board meets quarterly (or more often, if necessary) and will review the financial performance of the Manager and PLife REIT against a previously approved budget. The Board will also review the business risks of PLife REIT, examine liability management and will act upon any comments from the auditors of PLife REIT.

As a result of the new licensing regime, the Manager, as a holder of a CMS licence, has established internal procedures to ensure compliance with the relevant laws, regulations and guidelines relating to anti-money laundering and countering the financing of terrorism and has also adopted procedures to ensure that all material outsourcing comply with the MAS' Guidelines on Outsourcing issued in October 2004 and last updated on 1 July 2005.

The Manager has appointed experienced and well-qualified management personnel to handle the day-to-day operations of the Manager and PLife REIT. In assessing business risks, the Board will consider the economic environment and risks relevant to the property and healthcare industry. It reviews management reports and feasibility studies on investment risks prior to approving all investment decisions. The management meets regularly to review the operations of the Manager and discuss any disclosure issues.

WHISTLE-BLOWER PROTECTION POLICY

The Manager has established a whistle-blower policy which reflects the Manager's commitment to conduct its business within a framework that fosters the highest ethical and legal standards. In line with this commitment and PLife REIT's commitment to open communications, the whistle-blower policy aims to provide an avenue for employees to raise concerns and reassurance that they will be protected from reprisals or victimisation for whistle-blowing in good faith. The Audit Committee reviewed the whistle-blower policy which provides for mechanisms by which employees may, in confidence, raise their concerns about possible improprieties in financial reporting or other matters and was satisfied that arrangements are in place for the independent investigation of such matters and for appropriate follow-up action. The Chairman of the Audit Committee is the first contact for issues raised under this policy.

DEALINGS WITH CONFLICTS OF INTEREST

The Manager has instituted the following procedures to deal with potential conflicts of interest issues:

The Manager will be a dedicated manager to PLife REIT and will not manage any other REIT which invests in the same type of properties as PLife REIT.
All resolutions in writing of the Board in relation to matters concerning PLife REIT must be approved by a majority of the directors, including at least one independent director.
At least one-third of the Board shall comprise independent directors.
All related party transactions must be reviewed by the Audit Committee and approved by a majority of the Audit Committee. If a member of the Audit Committee has an interest in a transaction, he or she will abstain from voting.
In respect of matters in which Parkway Holdings Limited, the sponsor of PLife REIT (the "Sponsor") and/or its subsidiaries have an interest, direct or indirect, any nominees appointed by the Sponsor and/or its subsidiaries to the Board to represent its/their interest will abstain from voting. In such matters, the quorum must comprise a majority of the independent directors and must exclude the nominee directors of the Sponsor and/or its subsidiaries.
In respect of matters in which a director or his associates have an interest, direct or indirect, such interested director will abstain from voting. In such matters, the quorum must comprise a majority of the Board and must exclude such interested director.
Under the Trust Deed, the Manager and its associates are prohibited from being counted in a quorum for or voting at any meeting of Unitholders convened to approve any matter in which the Manager or any of its associates has a material interest. For so long as Parkway Trust Management Limited is the manager of PLife REIT, the controlling shareholders (as defined in the Listing Manual) of the Manager and their respective associates are prohibited from being counted in the quorum for or voting at any meeting of Unitholders convened to consider a matter in respect of which the relevant controlling shareholders of Parkway Trust Management Limited and/or their associates have a material interest.
It is also provided in the Trust Deed that if the Manager is required to decide whether 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 PLife REIT with a related party of the Manager, the Manager shall be obliged to consult a reputable law firm (acceptable to the Trustee) which shall provide legal advice on the matter. If the said law firm is of the opinion that the Trustee, on behalf of PLife REIT, 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 Board (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 PLife REIT with a related party of the Manager and the Trustee may take such action as it deems necessary to protect the rights of Unitholders and/or which is in the interests of Unitholders. Any decision by the Manager not to take action against a related party of the Manager shall not constitute a waiver of the Trustee's right to take such action as it deems fit against such related party.

PLife REIT's properties are located in Singapore and Japan and its strategy is to invest primarily in income-producing real estate and/or real estate-related assets in the Asia-Pacific region (including Singapore) that are used primarily for healthcare and/or healthcare-related purposes (including, but not limited to, hospitals, healthcare facilities and real estate and/or real estate assets used in connection with healthcare research, education, and the manufacture or storage of drugs, medicine and other healthcare goods and devices), whether wholly or partially owned, and whether directly or indirectly held through the ownership of special purpose vehicles whose primary purpose is to own such real estate. The Sponsor has interests in several healthcare and/or healthcare-related properties in the Asia-Pacific such as those located in Malaysia. Potential conflicts of interest between the Sponsor and PLife REIT may arise in respect of acquisition and ownership of healthcare and/ or healthcare-related assets in the Asia-Pacific region, including Singapore where PLife REIT's initial properties are located, and where PLife REIT's investment strategy is to invest in healthcare and/or healthcare-related properties located therein.

In order to mitigate any conflict of interest between the Sponsor and PLife REIT in the Asia-Pacific region, PLife REIT has been granted by the Sponsor a right of first refusal, subject to certain conditions, over sales of healthcare or healthcare-related assets in the Asia-Pacific region (including Singapore) and if applicable, the interests in special purpose vehicles which hold such assets directly or indirectly (together, the "Relevant Assets"). Where the Sponsor or any of its subsidiaries (a "Parkway Entity") proposes to sell or transfer a Relevant Asset to an unrelated third party; or a proposed offer for sale or transfer of a Relevant Asset is made to a Parkway Entity, the Sponsor shall, grant to the Trustee the first right to purchase the Relevant Asset for the benefit of PLife REIT.

RELATED PARTY TRANSACTIONS

The Manager's Internal Control System

The Manager has established an internal control system to ensure that all future related party transactions will be undertaken on normal commercial terms and will not be prejudicial to the interests of PLife REIT or the Unitholders. As a general rule, the Manager must demonstrate to the Audit Committee that such transactions satisfy the foregoing criteria, which may entail obtaining (where practicable) quotations from parties unrelated to the Manager, or obtaining one or more valuations from independent professionals valuers (in accordance with the Property Funds Appendix).

The Manager maintains a register to record all related party transactions which are entered into by PLife REIT and the bases, including any quotations from unrelated parties and independent valuations obtained to support such bases, on which they are entered. The Manager also incorporates into its internal audit plan a review of all related party transactions entered into by PLife REIT. The Audit Committee reviews the internal audit reports at least twice a year to ascertain that the guidelines and procedures established to monitor related party transactions have been complied with. In addition, the Trustee will also have the right to review such audit report to ascertain that the Property Funds Appendix have been complied with.

Further, 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 during the same financial year) equal to or exceeding S$100,000 in value but below 3.0% of the value of PLife REIT's net tangible assets will 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 party during the same financial year) equal to or exceeding 3.0% but below 5.0% of the value of PLife REIT's net tangible assets will be subject to the review and prior approval of the Audit Committee. Such approval shall only be given if the transactions are on normal commercial terms and are consistent with similar types of transactions made by the Trustee with third parties which are unrelated to the Manager; and
transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding 5.0% of the value of PLife REIT's net tangible assets will be reviewed and approved prior to such transactions being entered into, on the basis described in the preceding paragraph, by the Audit Committee which may, as it deems fit, request advice on the transaction from independent sources or advisers, including the obtaining of valuations from independent professional valuers. Further, under the Listing Manual and the Property Funds Appendix, such transactions would have to be approved by the Unitholders at a meeting of Unitholders.

Where matters concerning PLife REIT relate to transactions entered into or to be entered into by the Trustee for and on behalf of PLife REIT with a related party of the Manager or PLife REIT, the Trustee is required to consider the terms of such transactions to satisfy itself that such transactions are conducted on an arm's length basis and on normal commercial terms, are not prejudicial to the interests of PLife REIT or the Unitholders, and in accordance with all applicable requirements under the Property Funds Appendix and/or the Listing Manual relating to the transaction in question. Further, the Trustee has the ultimate discretion under the Trust Deed to decide whether or not to enter into a transaction involving a related party of the Manager or PLife REIT. If the Trustee is to sign any contract with a related party of the Manager or PLife REIT, the Trustee will review the contract to ensure that it complies with the requirements relating to interested party transactions in the Property Funds Appendix (as may be amended from time to time) and the provisions of the Listing Manual 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 REITs.

PLife REIT will, in compliance with Rule 905 of the Listing Manual, announce any interested person transaction if such transaction, by itself or when aggregated with other interested person transactions entered into with the same interested person during the same financial year, is 3.0% or more of PLife REIT's latest audited net tangible assets.

Role of the Audit Committee for Related Party Transactions

All related party transactions must be reviewed by the Audit Committee and approved by a majority of the Audit Committee to ensure compliance with the Manager's internal control system and with the relevant provisions of the Listing Manual as well as the Property Funds Appendix. The review will include the examination of the nature of the transactions and its supporting documents or such other data deemed necessary to the Audit Committee.

If a member of the Audit Committee has an interest in a transaction, he or she is to abstain from participating in the review and approval process in relation to that transaction.

COMMUNICATION WITH UNITHOLDERS

The Listing Manual of the SGX-ST requires that a listed entity discloses to the market matters that would likely have a material effect on the price of the entity's securities. The Manager upholds a strong culture of continuous disclosure and transparent communication with Unitholders and the investing community. The Manager's disclosure policy requires timely and full disclosure of all material information relating to PLife REIT by way of public releases or announcements through the SGX-ST via SGXNET at first instance and then including the release on PLife REIT's website at www.plifereit.com.

The Manager also conducts regular briefings for analysts and media representatives. During these briefings, the Manager will review PLife REIT's most recent performance as well as discuss the business outlook for PLife REIT. In line with the Manager's objective of transparent communication, briefing materials are released to the SGX-ST and also made available on PLife REIT's website.

It is the aim of the Board to provide the Unitholders with a balanced and comprehensive assessment of PLife REIT's performance, position and prospects. The Unitholders are encouraged to attend annual general meeting ("AGM") of PLife REIT to ensure a high level of accountability and to stay informed of the strategies and goals of PLife REIT. The chairpersons of the Audit Committee and/or the Remuneration Committee and external auditors should, where possible, also be present to assist the directors in addressing any relevant queries by Unitholders.

The notice of AGM is dispatched to the Unitholders in the manner set out in the Listing Manual. The Board welcomes questions from the Unitholders who have an opportunity to raise issues either informally or formally before or at the AGM.

Each item of special business included in the notice of AGM is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are prepared for substantially separate issue at the AGM. The resolutions approved in the AGM will be announced on or after the day AGM is held.

Sitemap

Valid XHTML Valid CSS