CORPORATE GOVERNANCE REPORT
(CONT’D)
Subject to the Property Funds Guidelines, the Acquisition Fee shall be paid to the Manager in the form of cash and/or
Units (as the Manager may elect, such election to be irrevocable and made prior to the payment of the Acquisition Fee.
The Acquisition Fee is payable as soon as practicable after the completion of the acquisition. As required by the Property
Funds Guidelines, when paid in the form of Units, the Manager shall be entitled to receive such number of Units as may
be purchased for the relevant amount of the Acquisition Fee at the issue price of Units issued to finance or part finance
the acquisition in respect of which the Acquisition Fee is payable or, where Units are not issued to finance or part finance
the acquisition, the prevailing market price at the time of issue of such Units as determined under the Trust Deed, which
should not be sold for a period of one year from their date of issuance.
DIVESTMENT FEE
Pursuant to Clause 15.2.1 of the Trust Deed, the Manager is entitled to receive a Divestment Fee at the rate of 0.5% of
the sale price of any authorised investment sold or divested by LMIR Trust. The Divestment Fee is earned by the Manager
upon the successful completion of a divestment. This fee seeks to motivate and compensate the Manager for the time, cost
and effort spent in rebalancing and unlocking value of the existing portfolio. In undertaking a proposed divestment, the
Manager is expected to spend time and effort in negotiating with the prospective purchaser, structuring the divestment and
working with professional advisers and regulatory authorities to seek the necessary regulatory approvals and/or approval
from Unitholders (where required).
Subject to the Property Funds Guidelines, the Divestment Fee shall be paid to the Manager in the form of cash and/or
Units (as the Manager may elect, such election to be irrevocable and made prior to the payment of Divestment Fee). The
Divestment Fee is payable as soon as practicable after completion of the sale or disposal. As required by the Property
Funds Guidelines, when paid in the form of Units, the Manager shall be entitled to receive such number of Units as may be
purchased for the relevant amount of the Divestment Fee at the prevailing market price at the time of issue of such Units
as determined under Trust Deed, which should not be sold for a period of one year from their date of issuance.
The Acquisition Fee is higher than the Divestment Fee because there is additional work required to be undertaken in terms
of sourcing, evaluating and conducting due diligence for an acquisition, as compared to a divestment. The Manager provides
these services over and above the provision of ongoing management services with the aim of enhancing long-term returns,
income sustainability and achieving the investment objectives of LMIR Trust.
DEALING WITH CONFLICT OF INTEREST
The Manager has instituted the following procedures to deal with potential conflicts of interest issues, which the Manager
may encounter, in managing LMIR Trust:
•
The Manager will not manage any other real estate investment trust which invests in the same type of properties
as LMIR Trust;
•
All executive officers will be employed by the Manager;
•
All resolutions in writing of the directors in relation to matters concerning LMIR Trust 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; and
•
In respect of matters in which 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.
LIPPO MALLS INDONESIA RETAIL TRUST
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