- Corporate Governance
- Board roles and responsibilities
- Board committees
- Constitutions and compliance plans
- Continuous disclosure and Investor communication policies
- Directors’ and employees’ securities trading policy
- Code of conduct
- Risk management policy
- Other committees recommended by the ASX Guidelines that are not appropriate for the Fund
The Board is responsible for the overall corporate governance of Centuria Property Funds Limited (CPFL) and the Fund, including implementing appropriate policies and procedures in order for CPFL to fulfil its functions effectively and responsibly. The Board recognises the role and importance of good corporate governance and is committed to high standards of compliance.
CPFL’s corporate governance framework is supported by the Board determining appropriate corporate governance arrangements for CPFL and the Fund and the ongoing monitoring of those arrangements. The Listing Rules require listed entities to disclose in their annual reports the extent of their compliance with the ASX Guidelines, released by the ASX Corporate Governance Council. They must also explain why they have not adopted a particular ASX Guideline, if they consider it to be inappropriate to do so in their particular circumstances. The ASX Guidelines encompass matters such as Board composition, committees and compliance procedures and are designed to maximise corporate performance and accountability in the interests of investors and the broader economy. The Fund will be required to report its compliance against the ASX Guidelines on an ongoing basis in its annual report. This section identifies those ASX Guidelines that are not appropriate for the Fund given its externally managed structure. Apart from those areas identified below, the Board does not anticipate that it will depart from the ASX Guidelines. However, it may do so in the future if it considers that such departure would be reasonable. The key elements of the Fund’s corporate governance framework are set out below.
Board roles and responsibilities
Under the CPFL Board charter, it is the function of the Board to oversee development of the long term growth and strategy of the entities managed by CPFL. In performing its functions in respect of the Fund, the Board will endeavour to ensure that the business of the Fund is effectively managed in accordance with high standards of corporate governance and applicable laws. Some of the key responsibilities of the Board are to:
- establish the strategic direction for the Fund;
- set objectives, goals and strategic direction;
- approve and monitor progress of major capital expenditure, capital management, acquisitions and divestments;
- monitor the implementation of the highest business standards and codes of ethical behaviour;
- oversee the effective management and control of CPFL;
- oversee the effectiveness of risk management and compliance within the Fund; and
- ensure adequate processes and controls are adopted to ensure the integrity of financial accounting, financial records and reporting.
The Board may establish formally constituted committees and may delegate any of its powers to a committee or committees. Audit, Risk Management and Compliance Committee The Board has established an Audit, Risk Management and Compliance Committee (“ARMCC”) to assist the Board in overseeing the integrity of the Fund’s financial reporting, internal financial controls, financial procedures and policies and the independence of external auditors. The ARMCC is also responsible for overseeing the Fund’s compliance and risk management frameworks and assessing risks arising from the Fund’s operations and considering the adequacy of measures taken to moderate those risks. The ARMCC reports to the Board on all matters relevant to the ARMCC’s role and responsibilities and ensures that the Board is aware of matters which may significantly impact the financial condition or affairs of the Fund. The key roles and responsibilities of the ARMCC include reviewing:
- the financial reporting processes;
- the system of internal financial controls;
- the audit process ensuring that systems and procedures are in place for the Fund’s compliance with relevant statutory and regulatory requirements; and
- assessing risks arising from the Fund’s operations and considering the adequacy of measures taken to moderate those risks.
The Charter of the ARMCC requires a minimum of three members of the ARMCC all of whom must be non-executive directors, with a majority being independent directors. The chairperson is an independent director appointed by the Board who is not the Chairman of the Board. The ARMCC will meet with external auditors where appropriate from time to time to review the existing external audit arrangements and the scope of the audit. Further information on the ARMCC is provided on the Fund’s website accessible at www.centuria.com.au.
Constitutions and compliance plans
The Fund comprises two registered managed investment schemes and the rights and obligations of CPFL as Responsible Entity of the Fund and Investors are governed by the Constitutions and the Corporations Act. As the Responsible Entity of the Fund, CPFL must comply with all obligations set out in the Constitutions and the Corporations Act. CPFL is also subject to duties including duties to act in the best interests of the Investors, act honestly, exercise care and diligence, and treat Investors of the same class equally. In order to facilitate compliance with the Constitutions and the Corporations Act, CPFL has adopted the compliance plans which set out the key processes CPFL will apply in operating the Fund. You can inspect a copy of the Constitutions and the Compliance Plans at the offices of Centuria at any time between 9.00am and 5.00pm (AEDT) on a business day in Sydney, New South Wales. Alternatively, a copy of the documents may be requested (to be provided free of charge), by contacting the Investor Relations Team by telephone on +61 2 8923 8923 or email to firstname.lastname@example.org.
Continuous disclosure and Investor communication policies
CPFL is committed to promptly communicating relevant material information about the Fund to Investors and complying with the Fund’s continuous disclosure obligations to the market pursuant to the Listing Rules and the Corporations Act. The Board has established a continuous disclosure policy to assist the Board in discharging the Fund’s continuous disclosure responsibilities in a timely and efficient manner. The continuous disclosure policy sets out guidance, procedures and key responsibilities for compliance with the continuous disclosure obligations. The company secretary has principal responsibility for managing CPFL’s continuous disclosure policy and communicating with the ASX. The Board has also established a Continuous Disclosure Committee to assist in and the company secretary with the discharge of CPFL’s continuous disclosure obligations. CPFL will also design a communications policy for promoting effective communication with Investors and encourage their participation at general meetings. CPFL will use the Fund’s website to assist it in keeping Investors fully informed on important matters concerning the Fund. A summary of both the continuous disclosure and Investor communications policies will be available on the Fund’s website accessible at www.centuria.com.au.
Directors’ and employees’ securities trading policy
The Board has a formal code to regulate dealings in Stapled Securities by the Board and senior executives and employees of Centuria and their associates that are responsible for managing the Fund. This policy is designed to ensure fair and transparent trading in accordance with both the law and best practice.
CPFL recognises its responsibilities in relation to conflicts of interest and related party transactions and has a conflicts of interest policy in place that governs the way in which CPFL manages such transactions or conflicts. Through the application of this policy, CPFL is committed to:
- identifying and monitoring all potential conflicts of interest;
- avoiding conflicts of interests wherever this is the only way to properly protect Investors’ interests;
- taking appropriate steps to ensure the fair treatment of the Fund and all Investors potentially impacted by the conflict; and
- dealing in an open manner and disclosing its conflicts of interest wherever this is likely to be relevant to Investors.
CPFL has engaged Centuria Property Services, a wholly owned subsidiary, to provide property management, development management and facilities management services in respect of various properties in the Fund. See sections 12.2, 13.1 and 13.2 for further information. Centuria Property Services was chosen by CPFL to provide these services due to its considerable experience as a specialist property consultancy and property manager. Centuria Property Services holds a real estate licence and supervises an extensive portfolio of commercial, industrial and retail properties. The appointment of Centuria Property Services is on commercial arms’ length terms and will be subject to regular review. CPFL considers that the level of expertise and experience brought by Centuria Property Services to the management of the relevant properties is an asset to the Fund.
Code of conduct
The Board has adopted the code of conduct of Centuria which applies to the directors and employees and sets out how CPFL expects directors and employees to conduct themselves. The code of conduct sets expectations for the maintenance of standards of honesty, integrity, care, diligence and fair dealing by directors and employees in the performance of their duties and responsibilities in relation to the Fund. A copy of the code of conduct is available on the Fund’s website accessible at www.centuria.com.au.
Risk management policy
CPFL has adopted a risk management policy and framework which assists CPFL to achieve the Fund’s objectives through thorough and competent strategic decision making. Through the risk management policy and framework, CPFL’s risk management internal control system incorporates the guidelines described in the Australian/New Zealand Standard on Risk Management (AS/NZS ISO 31000:2009). The Board has ultimate responsibility for overseeing the risk management framework and for approving and monitoring compliance with the framework. CPFL’s risk management process requires Centuria’s senior management team to regularly appraise the risks relating to the operation and activities of the Fund. In addition, CPFL’s risk management process also comprises a formal comprehensive risk review. Centuria’s senior management team will measure the risks which have been identified, rate and prioritise them in terms of their impact on the Fund. The implementation of mitigating controls for key risks will be a priority and risk management weaknesses will be remedied as soon as practical or possible. Results of the annual review will be provided to the Board and relevant sub-committees for review. Further information on CPFL’s risk management framework is available on the Fund’s website accessible at www.centuria.com.au.
Other committees recommended by the ASX Guidelines that are not appropriate for the Fund
The ASX Guidelines also require the establishment of a diversity committee. However, given CPFL and the Fund will have no executives and will be managed externally, CPFL does not intend to establish a diversity committee for the Fund. Accordingly, the ASX Guidelines relating to diversity are not relevant for the Fund.