Corporate Governance

SF REIT is a collective investment scheme authorised by the SFC under section 104 of the SFO and regulated by the Code on Real Estate Investment Trusts (“REIT Code”). It was constituted by the Trust Deed entered into between the REIT Manager and the Trustee on 29 April 2021.

The REIT Manager is licensed by the SFC under section 116 of the SFO to conduct the regulated activity of asset management. The Trustee is a trust company registered under section 77 of the Trustee Ordinance (Chapter 29 of the Laws of Hong Kong) and is qualified to act as a trustee for collective investment schemes authorised under the SFO pursuant to the REIT Code.

The Trustee and the REIT Manager are independent of each other. The Trustee is responsible under the Trust Deed for the safe custody of the assets of SF REIT on behalf of the Unitholders and for overseeing the activities of the REIT Manager for compliance with the relevant constitutive documents of, and regulatory requirements applicable to, SF REIT. The REIT Manager is to manage SF REIT and its assets in accordance with the Trust Deed in the sole interest of the Unitholders and to fulfil the duties imposed on it under general law as the manager of SF REIT and, in particular, to ensure that the financial and economic aspects of SF REIT’s assets are professionally managed in the sole interest of the Unitholders.

The Board principally oversees the day-to-day management of the REIT Manager’s affairs and the conduct of its business, and is responsible for the overall corperate governance of SF REIT. The Board exercises its general powers within the limits defined by the articles of association of the REIT Manager, with a view to ensuring that the REIT Manager discharges its duties appropriately, and that sound internal control policies and risk management systems are maintained.

Currently, the Board has 8 Directors, including one Executive Director, three Non-executive Directors and four Independent Non-executive Directors. The names and biographies of the Directors are set out in the “Board of Directors” section.

Four out of 8 of the Directors (50%) are Independent Non-executive Directors. This strong independent representation ensures that the Board can effectively exercise independent judgement.

The Board’s composition reflects the necessary balance of skills and experience desirable for effective leadership and execution of the Board’s duties. The role of the Chairman is separate from that of the Chief Executive Officer to reinforce accountability and responsibility. The Chairman is responsible for the overall leadership of the Board. The Chief Executive Officer, being an Executive Director, is responsible for the day-to-day management, and supervises the management team to ensure that the REIT Manager and SF REIT are both operated in accordance with stated strategies, policies and regulations.

To enhance good corporate governance, the composition of the Board is underpinned by the following key principles:

• the Chairman of the Board should be a Non-executive Director;
• at least half of the members of the Board should be Independent Non-executive Directors, and at least one of whom must have appropriate professional qualifications or accounting or related financial management expertise;
• the re-election and further appointment of any Independent Non-executive Director serving on the Board for nine years shall be subject to a separate Unitholders’ resolution;
• any person appointed by the Board to be an Independent Non-executive Director either to fill a casual vacancy or as an additional Director shall hold office only until the next Unitholders’ meeting of SF REIT and shall then be subject to re-election by Unitholders by way of an ordinary resolution; and
• every Independent Non-executive Director shall be subject to retirement by rotation at least once every three years at the annual general meetings of SF REIT and shall then be subject to re-election by Unitholders by way of an ordinary resolution.

To ensure that the Board comprises Directors with a balance of skill, experience and diversity of perspectives appropriate for the requirements of SF REIT’s business, and any changes to its composition are be managed without undue disruption, a board diversity policy has been adopted with a view to achieving diversity at Board level and promoting the effectiveness of the Board as a whole.

The Board has established three Board Committees, namely, the Audit Committee, the Investment Committee and the Nomination and Remuneration Committee, to assist the Board in discharging certain aspects of its duties. Each of these Board Committees is governed by its own written terms of reference.

The Audit Committee is mainly responsible for establishing and maintaining effective internal financial reporting system and internal control and risk management systems; ensuring the quality and integrity of financial statements; nominating independent external auditor and reviewing the adequacy of external audit in respect of cost, scope and performance.

The Audit Committee comprises the following three members:

CHAN Ming Tak, Ricky^#(Chairman)
HO Lap Kee, MH, JP^#
KWOK Tun Ho, Chester^#

^#Independent Non-executive Director

At least one of the Audit Committee members possesses appropriate professional qualifications, accounting or related financial management expertise as required under Rule 3.21 of the Hong Kong Listing Rules (as if such rule were applicable to SF REIT).

Terms of Reference

The Investment Committee is mainly responsible for evaluating and making recommendations on proposed acquisitions and/or disposals of assets, reviewing and making recommendations on capital management strategies (such as hedging activities), financing and refinancing arrangements, and investment and financial risks; and reviewing and recommending changes to financial authorities and policies or procedures in relation to treasury management.

The Investment Committee comprises the following three members:

HO Chit^##(Chairman)
CHAN Ming Tak, Ricky^#
Michael Tjahja SUSANTO^#

^#Independent Non-executive Director
^##Non-executive Director

The Nomination and Remuneration Committee is mainly responsible for reviewing the structure, size and composition of the Board and Board Committees; making recommendations on changes in members of the Board and Board Committees; developing the criteria for identifying and evaluating candidates for directorship; assessing the independence of Independent Non-executive Directors; reviewing, implementing and monitoring the board diversity policy; reviewing, implementing and monitoring the nomination policy; overseeing and establishing the overall compensation strategy and policies, pay level and manpower succession plan; and making recommendations to the Board on the remuneration packages for Directors.

The Nomination and Remuneration Committee comprises the following three members:

HO Lap Kee, MH, JP^#(Chairman)
Ho Chit^##
KWOK Tun Ho, Chester^#

^#Independent Non-executive Director
^##Non-executive Director

Terms of Reference

The REIT Manager has adopted the following measures to deal with conflict of interests generally:

• the REIT Manager is a dedicated manager to SF REIT and does not manage any other REIT;
• the REIT Manager will ensure that it is able to function independently from its shareholder, and its management staff are employed on a full-time basis solely for the operations of the Group;
• the REIT Manager has established procedures to deal with conflict of interests in the compliance manual;
• the REIT Manager has established control procedures to monitor connected party transactions between SF REIT and its connected persons;
• conflict of interests involving a Director or a substantial holder of SF REIT or other connected persons will be managed by a convening physical Board meeting where all Independent Non-executive Directors having no material interest in the matter shall attend the meeting; and
• a Director who has a material interest in a matter shall abstain from voting on the resolution concerned and shall not be counted in quorum at the relevant Board meeting.

The REIT Manager has adopted its own “Code Governing Dealings in the Units by Directors” on terms no less exacting than the required standard as set out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3 to the Hong Kong Listing Rules to govern dealings in the units of SF REIT by the Directors. The “Code Governing Dealings in Units by Directors” is extended to apply to the REIT Manager and those employees of the REIT Manager who are likely to be in possession of unpublished inside information in relation to SF REIT.

In accordance with the REIT Code, the annual report and accounts of SF REIT will be published and sent to the Unitholders and filed with the SFC no later than four months following each financial year-end of SF REIT and the semi-annual report no later than three months following the end of each period it covers.

The REIT Manager shall ensure that a full valuation of each of the SF REIT’s properties shall be conducted by the principal valuer at least once a year, and the REIT Manager may require the principal valuer to carry out additional valuation or inspection at such other date as it may determine in its sole discretion.

The REIT Manager shall keep the Unitholders informed of any material information pertaining to SF REIT in a timely and transparent manner as required by the REIT Code. The provisions of Part XIVA of the SFO shall have effect on SF REIT, mutatis mutandis, as if SF REIT is a “listed corporation” and if the board of directors of the REIT Manager is the “board of directors of a listed corporation”.

The REIT Manager has adopted a Unitholders’ communication policy which aims to ensure an effective communication with Unitholders and the investment community and to allow them to engage actively with SF REIT Group. Announcements, circulars and other corporate communications covering financial and non-financial information of SF REIT are disseminated on a timely basis to keep Unitholders and the public informed of SF REIT’s latest developments. To ensure proper dissemination of information, the REIT Manager has also adopted a corporate communication policy to set the standard and guide staff to respond to external enquiries.

For more details, please access the below for the Unitholders’ Communication Policy.

Unitholders’ Communication Policy 

Pursuant to the Trust Deed, certain matters require specific prior approval of Unitholders by way of a special resolution and such matters include:

1. changes in REIT Manager’s investment policies or strategies for SF REIT;
2. disposal of any real estate forming part of the assets of SF REIT within two years from the date of acquisition;
3. any increase in the rate above the permitted limit or change in the structure of the REIT Manager’s fees;
4. any increase in the rate above the permitted limit or change in the structure of the Trustee’s fees;
5. any modification, alteration or addition to the Trust Deed, save for certain circumstances specified in the Trust Deed;
6. termination or merger of SF REIT;
7. removal of SF REIT’s auditor and appointment of other auditor; and
8. removal of the Trustee.

The REIT Manager is committed to maintaining high standards of business ethics and good corporate governance in conducting its business. The REIT Manager has established a whistleblowing policy which aims to provide a clear procedure and a trusted avenue for all employees and other stakeholders including suppliers, service providers or business partners of the REIT Manager and/or SF REIT and their respective subsidiaries to raise their concerns of any irregularities, suspected misconduct, malpractice or impropriety within the REIT Manager and/or SF REIT in confidence and without fear of reprisal or victimization.

All concerns will be treated in a sensitive manner and where possible in the strictest confidence, although in some cases the REIT Manager and/or SF REIT may be legally required to disclosure the information.

Any whistleblowers may raise concerns in writing via one of the following channels:

(1) To: Chief Executive Officer of the REIT Manager

By Email : sfreit_ceo@sf-express.com

By Post* : Attention: Chief Executive Officer
SF REIT Asset Management Limited
Room 2002, 20/F., Lee Garden Six, 111 Leighton Road,Causeway Bay, Hong Kong

(2) To: Chairman of the Audit Committee of the REIT Manager

By Email : sfreit.acchair@gmail.com

By Post* : Attention: Chairman of the Audit Committee
SF REIT Asset Management Limited
Room 2002, 20/F., Lee Garden Six, 111 Leighton Road,Causeway Bay, Hong Kong

*Mail should be clearly marked “Strictly Private and Confidential – To be Opened by Addressee”.

For more details, please access the below for the Whistleblowing Policy.

Whistleblowing Policy