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CORPORATE GOVERNANCE
Corporate governance ismore than just forms of standard best practices and structures, internal checks and balances, transparency
and compliance. It must be anchored in the heart and soul of the leadership team. Good corporate governance must be ingrained
and become an integral part of a corporate’s culture.
Ascendas Funds Management (S) Limited, in its capacity as the Manager of A-REIT, believes that an effective corporate governance
culture is critical to the performance of the Manager and consequently, the success of A-REIT, which it manages. As a result,
the Manager has adopted a comprehensive corporate governance framework which conforms to the prevailing 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.
On 17 December 2008, the Manager obtained from the Monetary Authority of Singapore, (the “MAS”) a Capital Market Services
Licence (“CMS Licence”) to conduct REIT management activities.
The following sections describe the Manager’s corporate governance policies and practices. They encompass proactive measures
for avoiding situations of confict and potential conficts of interest among Unitholders, related parties and the Manager. The
interests of Unitholders are always above the Manager’s. The Manager also ensures that applicable requirements, laws and
regulations, such as those contained in the Listing Rules of Singapore Exchange Securities Trading Limited (“SGX-ST”), the
Code on Collective Investment Schemes (“CIS”) (containing the Property Funds Appendix) issued by the MAS, the CMS Licence
for REIT Management issued by the MAS and the Securities and Futures Act (“SFA”), are complied with, and that the Manager’s
obligations under A-REIT’s trust deed dated 9 October 2002 (as amended) (the”Trust Deed”) are properly carried out.
THE BOARD’S CONDUCT OF AFFAIRS
Ascendas Funds Management (S) Limited was appointed as manager of A-REIT in accordance with the terms of the Trust Deed.
The Trust Deed outlines certain circumstances under which the Manager can be retired in favour of another corporation approved
by the Trustee or be removed by notice given in writing from the Trustee upon the occurrence of certain events, including by
a resolution proposed and passed by a majority being greater than 50.0% of the total number of votes cast at a meeting of
Unitholders duly convened in accordance with the provisions of the Trust Deed (with no Unitholder being disenfranchised).
The Manager has general power of management over the assets of A-REIT. The Manager’s main responsibility is to manage
A-REIT’s assets and liabilities for the beneft of Unitholders.
The primary role of the Manager is to set the strategic business direction of A-REIT and make recommendations to the Trustee
on acquisitions, divestments and enhancement of the assets of A-REIT in accordance with its business strategy. The Manager is
also responsible for the capital and risk management of A-REIT. Other main functions and responsibilities of the Manager are as
follows:
1. Using its best endeavours to carry on and conduct all transactions on behalf of A-REIT at arm’s length.
2. Approve A-REIT’s business plan and budget containing proposals and forecasts on net income, capital expenditure, sales and
valuations, explanations of variances to previous forecasts, written commentary on key issues and underlying assumptions on
rental rates, occupancy, costs and any other relevant assumptions. The purpose of these plans is to manage the performance
of A-REIT’s assets.
3. Ensuring compliance with the applicable provisions of the SFA and all other relevant legislation, such as the Listing Rules
of the SGX-ST and the Property Funds Appendix under CIS, the Trust Deed, the tax rulings issued by the Inland Revenue
Authority of Singapore and all relevant contracts.
ASCENDAS REAL ESTATE INVESTMENT TRUST
ANNUAL REPORT FY11/12
102