IREIT Global
annual report 2014
Corporate
Governance Report
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 (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 IREIT with a Related
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 the 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.
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 (which term includes an “Interested
Person Transaction” as defined under the Listing
Manual and an “Interested Party Transaction” as
defined under the Property Funds Appendix):
• will be undertaken on normal commercial terms;
and • will not be prejudicial to the interests of IREIT
and the Unitholders.
As a general rule, the Manager must demonstrate to
the ARC that such transactions satisfy the foregoing
criteria. This may entail:
• obtaining (where practicable) quotations from
parties unrelated to the Manager; or
• obtaining two or more valuations from
independent professional valuers (in compliance
with the Property Funds Appendix).
The Manager will maintain a register to record all
Related Party Transactions which are entered into
by IREIT and the basis, including any quotations from
unrelated parties and independent valuations, on
which they are entered into.
The Manager will also incorporate into its internal
audit plan a review of all Related Party Transactions
entered into by IREIT. The ARC shall review 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. The Trustee will also have the right
to review such audit reports to ascertain that the
Property Funds Appendix has been complied with.
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 IREIT’s
net tangible assets will be subject to review by
the ARC 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 IREIT’s
net tangible assets will be subject to the review
and prior approval of the ARC. Such approval
shall only be given if the transactions are on
normal commercial terms and not prejudicial to
the interests of IREIT and the Unitholders 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 IREIT’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 ARC which may, as
