Annual Report 2007 - The Link REIT

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72 The Link Real Estate Investment Trust Annual Report 2007 Connected Party Transactions Syndicated Loan – The Hongkong and Shanghai Banking Corporation Limited was one of the mandated lead arrangers and is one of the lenders of a HK$5 billion syndicated loan facility made available to The Link Finance Limited. The facility comprised both a term loan and a revolving credit line and was partially drawn down in October 2006. The outstanding balance due to The Hongkong and Shanghai Banking Corporation Limited in connection to this syndicated loan stood at HK$598,000,000 as at 31 March 2007. There was no transaction entered into between The Link REIT and Wing Hang Bank Limited or associates of its group which are also connected persons being members of the relevant banking group as defined in the Waivers granted. Name of Relationship with Nature of Date of Connected Person The Link REIT Transaction the Transaction Fee Charged HK$’M The Hongkong and Trustee’s associate Financial advisory 3-8/2006* Nil Shanghai Banking services Corporation Limited Lead manager 4/8/2006 3.3 and book-runner for issuance of guaranteed note Lead arranger 4/8/2006 Nil and lender of syndicated loan * A continuing transaction that started in March 2006 and lasted until the completion of the re-financing of the Bridging Loan in or about August 2006. Confirmation by the Manager and the Trustee in respect of Corporate Finance Transactions with HSBC Group Each of the Manager and the Trustee confirms in respect of corporate finance transactions disclosure above that (i) each transaction is carried out at arm’s length on normal commercial terms; (ii) the Trustee is not involved in the decision to enter into any such transaction (including the selection of thefinancial adviser or underwriter of the transaction), subject only to its duties of oversight under the REIT Code and the Trust Deed; and (iii) the general conditions applicable to the Waivers have been complied with. Agreed-upon Procedures Performed by the Auditors in Relation to Certain Connected Party Transactions Pursuant to the Waivers from strict compliance with the approval and disclosure requirements under Chapter 8 of the REIT Code, the Manager has engaged the auditors of The Link REIT to perform certain factfinding procedures in accordance with the Hong Kong Standard on Related Services 4400 "Engagements to Perform Agreed-Upon Procedures Regarding Financial Information" issued by the Hong Kong Institute of Certified Public Accountants in respect of the connected party transactions on the leasing of properties and corporatefinance transactions during the year under review. The auditors have performed these procedures and reported their factualfindings to the Audit Committee of the Manager.
Annual Report 2007 The Link Real Estate Investment Trust 73 Connected Party Transactions Confirmation by the Audit Committee The Audit Committee confirms that it has reviewed the terms of all relevant connected party transactions and that it is satisfied that such transactions have been entered into: (a) at arm’s length and on normal commercial terms; (b) in the ordinary and usual course of business of The Link REIT; (c) are fair and reasonable; and (d) in the interests of the unitholders as a whole. Confirmation by the Manager The Manager (including all Independent Non-Executive Directors) confirms that: (a) based on the information provided, and representations made, by the Trustee, it is satisfied with the internal controls and compliance procedures of the Trustee, which demonstrate that the Trustee’s operations are run independently of other banking andfinancial functions or operations of HSBC Group; (b) the basis of the cap amount in relation to the corporate finance advisory transactions set out in Waivers is fair and reasonable in light of The Link REIT’s operations and unit holding structure, including the objectives and strategies of The Link REIT, the size, geographical and tenancy mix of its property portfolio and its management structure; (c) the scope and terms of the Waivers applied for are fair and reasonable, and in the best interest of the unitholders; and (d) the Manager is not bound to enter into corporatefinance transactions with HSBC Group despite the Waivers granted. Continue with the Waivers Granted Without Unitholders’ Approval The Audit Committee has reviewed the terms of the Waivers and is satisfied that (on the basis of the terms of the Waivers and the internal controls and procedures in place) it is fair and reasonable that the Waivers be continued without unitholders’ approval. The full Board (including Independent Non-Executive Directors) also considers that it is fair and reasonable and in the best interest of the unitholders to continue with the Waivers granted without unitholders’ approval.
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Designed and produced by : Equity F
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Annual Report 2007 - The Link REIT

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