ARENA REIT. — Governance Information 2014

Aug 24, 2014

Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity

Name of entity	Name of entity
Arena REIT
ARSN		Financialyear ended
106 891 641 / 101 067 878		30 June 2014

Our corporate governance statement[2] for the above period above can be found at:[3]

 these pages of our annual report: _________  this URL on our website: www.arenainvest.com.au/about/governance-policies

The Corporate Governance Statement is accurate and up to date as at 30 June 2014 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date here: 25 August 2014 Sign here: company secretary Print name: Peter Hulbert

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s corporate governance statement can be found.

1

ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	PRINCIPLE 1– LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
	1.1	A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and information about the respective roles and responsibilities of our board and management (including those matters expressly reserved to the board and those delegated to management):  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
	1.2	A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
	1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable

2

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
1.4	The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
1.5	A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.	… the fact that we have a diversity policy that complies with paragraph (a):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and a copy of our diversity policy or a summary of it:  at this location: ______ _Insert location here … the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with our diversity policy and our progress towards achieving them:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and the information referred to in paragraphs (c)(1) or (2):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable

3

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
1.6	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	… the evaluation process referred to in paragraph (a):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and the information referred to in paragraph (b):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
1.7	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	… the evaluation process referred to in paragraph (a):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and the information referred to in paragraph (b):  in our Corporate Governance StatementOR  at this location: ______ Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable

4

	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	PRINCIPLE 2- STRUCTURE THE BOARD TO ADD VALUE
	2.1	The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings;OR (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.	[If the entity complies with paragraph (a):] … the fact that we have a nomination committee that complies with paragraphs (1) and (2):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and a copy of the charter of the committee:  at this location: ______ _Insert location here … and the information referred to in paragraphs (4) and (5):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here [If the entity complies with paragraph (b):] … the fact that we do not have a nomination committee and the processes we employ to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable

5

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
2.2	A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.	… our board skills matrix:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
2.3	A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director.	… the names of the directors considered by the board to be independent directors:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … where applicable, the information referred to in paragraph (b):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … the length of service of each director:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
2.4	A majority of the board of a listed entity should be independent directors.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable

6

	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	2.5	The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
	2.6	A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
	PRINCIPLE 3– ACT ETHICALLY AND RESPONSIBLY
	3.1	A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.	… our code of conduct or a summary of it:  in our Corporate Governance StatementOR  at this location: www.arenainvest.com.au/about/governance-policies Insert location here	 an explanation why that is so in our Corporate Governance Statement
	PRINCIPLE 4– SAFEGUARD INTEGRITY IN CORPORATE REPORTING
	4.1	The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the	[If the entity complies with paragraph (a):] … the fact that we have an audit committee that complies with paragraphs (1) and (2):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and a copy of the charter of the committee:  at this location: www.arenainvest.com.au/about/governance-policies Insert location here	 an explanation why that is so in our Corporate Governance Statement

7

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	number of times the committee met throughout the period and the individual attendances of the members at those meetings;OR (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	… and the information referred to in paragraph (4):  in our Corporate Governance StatementOR  at this location: www.arenainvest.com.au/about/board Insert location here … and the information referred to in paragraph (5):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here [If the entity complies with paragraph (b):] … the fact that we do not have an audit committee and the processes we employ that independently verify and safeguard the integrity of our corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here

8

	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	4.2	The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
	4.3	A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity that does not hold an annual general meeting and this recommendation is therefore not applicable
	PRINCIPLE 5– MAKE TIMELY AND BALANCED DISCLOSURE
	5.1	A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.	… our continuous disclosure compliance policy or a summary of it:  in our Corporate Governance StatementOR  at this location: www.arenainvest.com.au/about/governance-policies Insert location here	 an explanation why that is so in our Corporate Governance Statement
	PRINCIPLE 6– RESPECT THE RIGHTS OF SECURITY HOLDERS
	6.1	A listed entity should provide information about itself and its governance to investors via its website.	… information about us and our governance on our website:  at this location: http://www.arenainvest.com.au/about Insert location here	 an explanation why that is so in our Corporate Governance Statement

9

	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	6.2	A listed entity should design and implement an investor relations program to facilitate effective two- way communication with investors.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
	6.3	A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.	… our policies and processes for facilitating and encouraging participation at meetings of security holders:  in our Corporate Governance StatementOR  at this location: _________ Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity that does not hold periodic meetings of security holders and this recommendation is therefore not applicable
	6.4	A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
	PRINCIPLE 7– RECOGNISE AND MANAGE RISK
	7.1	The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those	[If the entity complies with paragraph (a):] … the fact that we have a committee or committees to oversee risk that comply with paragraphs (1) and (2):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and a copy of the charter of the committee:  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement

10

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	meetings;OR (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.	… and the information referred to in paragraphs (4) and (5):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here [If the entity complies with paragraph (b):] … the fact that we do not have a risk committee or committees that satisfy (a) and the processes we employ for overseeing our risk management framework:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here
7.2	The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	… the fact that we follow this recommendation:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
7.3	A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; OR (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.	[If the entity complies with paragraph (a):] … how our internal audit function is structured and what role it performs:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here [If the entity complies with paragraph (b):] … the fact that we do not have an internal audit function and the processes we employ for evaluating and continuallyimprovingthe effectiveness of our risk	 an explanation why that is so in our Corporate Governance Statement

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	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
			management and internal control processes:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here
	7.4	A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	… whether we have any material exposure to economic, environmental and social sustainability risks and, if we do, how we manage or intend to manage those risks:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
	PRINCIPLE 8– REMUNERATE FAIRLY AND RESPONSIBLY
	8.1	The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings;OR (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.	[If the entity complies with paragraph (a):] … the fact that we have a remuneration committee that complies with paragraphs (1) and (2):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here … and a copy of the charter of the committee:  at this location: ______ _Insert location here … and the information referred to in paragraphs (4) and (5):  in our Corporate Governance StatementOR  at this location: _______	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable

12

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
		Insert location here [If the entity complies with paragraph (b):] … the fact that we do not have a remuneration committee and the processes we employ for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here
8.2	A listed entity should separately disclose its policies and practices regarding the remuneration of non- executive directors and the remuneration of executive directors and other senior executives.	… separately our remuneration policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we are an externally managed entity and this recommendation is therefore not applicable
8.3	A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it.	… our policy on this issue or a summary of it:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance StatementOR  we do not have an equity-based remuneration scheme and this recommendation is therefore not applicableOR  we are an externally managed entity and this recommendation is therefore not applicable

13

	Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We haveNOTfollowed the recommendation in full for the whole of the period above. We have disclosed …
	ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES
	-	Alternative to Recommendation 1.1 for externally managed listed entities: The responsible entity of an externally managed listed entity should disclose: (a) the arrangements between the responsible entity and the listed entity for managing the affairs of the listed entity; (b) the role and responsibility of the board of the responsible entity for overseeing those arrangements.	… the information referred to in paragraphs (a) and (b):  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement
	-	Alternative to Recommendations 8.1, 8.2 and 8.3 for externally managed listed entities: An externally managed listed entity should clearly disclose the terms governing the remuneration of the manager.	… the terms governing our remuneration as manager of the entity:  in our Corporate Governance StatementOR  at this location: ______ _Insert location here	 an explanation why that is so in our Corporate Governance Statement

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FY14 Corporate Governance Statement

This is the corporate governance statement for Arena REIT for the financial year ended 30 June 2014 ( Reporting Period ). This statement sets out the extent to which Arena REIT followed the recommendations set by the ASX Corporate Governance Council ( Recommendations ) during the Reporting Period. Arena REIT has adopted the recently issued 3[rd] edition of the Recommendations in respect of the Reporting Period. This statement is current as at 30 June 2014.

This statement has been approved by the board of directors ( Board ) of Arena Investment Management Limited ( Arena ), the responsible entity of Arena REIT.

Because Arena REIT is externally managed, some of the Recommendations are not applicable to it. These are noted below, together with alternative information relating to the Recommendations that are relevant to the governance of Arena REIT.

• 1 Lay solid foundations for management and oversight

Recommendations 1.1 to 1.7 are not applicable to Arena REIT. Arena provides the following alternative information in relation to these Recommendations.

Arena is a separate legal entity to Arena REIT, appointed to operate it subject to (among others) the Corporations Act 2001 (Cth), the ASX Listing Rules, Arena’s Australian financial services licence and the constitutions of Arena REIT No. 1 and Arena REIT No. 2 which were lodged with ASX on 10 December 2013 ( Constitutions ). Arena has sophisticated and tailored compliance arrangements in place to ensure that it complies with all of its obligations as responsible entity, including those described in this statement.

Arena is a wholly-owned subsidiary of Citrus Investment Services Pty Ltd ( Citrus ). The senior executives and other staff that operate Arena’s business on a day-to-day basis are employed by Citrus. They are made available to Arena under a resourcing deed that requires Citrus to provide all of the resources and services required or reasonably requested by Arena, such as those necessary to operate Arena REIT.

The Board has adopted a Board Charter which provides the framework for the operation of the Board and sets out the functions and responsibilities of the Board. The Charter also reserves specific matters for the Board. The Arena Board Charter is available at arenainvest.com.au/about/governance-policies.

The Board has delegated certain audit responsibilities to the Audit Committee and the scope of those responsibilities is specified in the Audit Committee Charter (refer to section 4 below).

The Arena Board has delegated day-to-day management of Arena REIT to management through the Joint Managing Directors, subject to the agreed authority limits applicable to these roles. These responsibilities and authority limits are

Arena Investment Management Limited ACN 077 235 879 AFSL No. 233190 Responsible entity of Arena REIT (ASX:ARF) Comprising Arena REIT No. 1 (ARSN 106 891 641) and Arena REIT No. 2 (ARSN 101 067 878)

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Locked Bag 32002 Collins Street East T +61 3 9093 9000 Melbourne VIC 8003 Freecall 1800 008 494 info@arenainvest.com.au F +61 3 9093 9093

71 Flinders Lane Melbourne VIC 3000 www.arenainvest.com.au

reviewed from time to time to ensure they remain appropriate to the needs of Arena REIT.

The performance of the Board, the Audit Committee and senior management is reviewed annually and were reviewed during the Reporting Period.

• 2 Structure the board to add value

Other than Recommendation 2.3, Recommendation 2 is not applicable to Arena REIT.

Recommendation 2.3

The Board considers that David Ross (Chairman), Dennis Wildenburg and Simon Parsons were independent directors throughout the Reporting Period. They do not have an interest, position, association or relationship of the type described in Box 2.3 of the Recommendations.

David Ross has been a director for 1 year and nine months. Dennis Wildenburg has been a director for 2 years and 7 months. Simon Parsons has been a director for 2 years and 3 months.

Additional information

Throughout the Reporting Period the majority of the Board were independent directors, including the Chairman. The Chairman is not the CEO or Managing Director.

Details of the directors, including a brief description of their qualifications is available at arenainvest.com.au/about/board. All directors are required to act in the best interests of the unitholders of Arena REIT.

• 3 Act ethically and responsibly

Recommendation 3.1

Arena had a code of conduct for its directors, senior executives and employees throughout the reporting period. The Code of Conduct is made available to all those expected to adhere to it at the time they join the Arena group and is permanently available on Arena’s website at arenainvest.com.au/about/governance-policies.

• 4 Safeguard integrity in financial reporting

Recommendation 4.1

Throughout the Reporting Period the Board had an Audit Committee, comprising the three independent directors. The chair of the Audit Committee is Dennis Wildenburg, who is not the chair of the Board.

The Audit Committee Charter is available at arenainvest.com.au/about/governance-policies.

The relevant qualifications and experience of the members of the Audit Committee are described on Arena’s website, at arenainvest.com.au/about/board.

During the Reporting Period the Audit Committee met 7 times. Each member of the Committee attended all meetings.

Recommendation 4.2

Before approving the Arena REIT financial statements for the half year ended 31 December 2013 and the year ended 30 June 2014, the Board received from the Chief Financial Officer and the Joint Managing Directors a declaration that, in their opinions, the financial records of Arena REIT were properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and

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performance of Arena REIT and those opinions were formed on the basis of a sound system of risk management and internal control which operates effectively.

Recommendation 4.3 is not applicable to Arena REIT because it does not hold an AGM.

• Make timely and balanced disclosure

Recommendation 5.1

The Board has adopted a formal policy for complying with Arena’s obligations under the Listing Rules, which applied throughout the Reporting Period. The Arena REIT Continuous Disclosure Policy is available at arenainvest.com.au/about/governance-policies.

• 6 Respect the rights of shareholders

Recommendation 6.1

Arena has established a website which includes detailed information in relation to Arena REIT and Arena’s governance arrangements. The website included the relevant information throughout the Reporting Period.

Information about Arena REIT can be found at arenainvest.com.au/funds/arena-reit. Information about Arena’s governance arrangements including the Board and senior management can be found at arenainvest.com.au/about/governance-policies.

Recommendation 6.2

Arena has designed and implemented an investor relations program that facilitates effective two-way communication with investors. The program includes the following:

• Quarterly letters sent to investors providing a summary of Arena’s REIT’s activities and performance.

• Half-yearly webinars to which all investors are invited, and are able to participate by submitting questions to management. The webinars remain accessible on Arena’s website after they are held.

• Publication of release of ASX announcements directly to subscribing investors and advisers via email.

• Release of relevant information including ASX announcements to investors and the community via twitter (@arenainvest).

• Detailed information provided on Arena’s website, including the security price, trust overview, portfolio summary, investment objectives, ASX announcements, key dates calendar and contact form for questions, feedback or complaints.

• Investor Centre on Arena’s website, including a secure area for investor’s holding information, price and NTA history, reports, forms, Frequently Asked Questions.

• The Board has adopted a formal communications policy. Arena is committed to providing all stakeholders with accessible, accurate, clear and timely information on all matters that are relevant or material to the financial performance and activities of Arena REIT. The Communications Policy can be found at arenainvest.com.au/about/governance-policies.

Recommendation 6.3

Recommendation 6.3 is not applicable to Arena REIT because it does not hold an AGM. Instead, Arena conducts half-yearly webinars to which all investors are invited, and are able to participate by submitting questions to management. The webinars remain accessible on Arena’s website after they are held.

Recommendation 6.4

Arena REIT has given all investors the option to receive communications from, and send communications to, Arena and the registry electronically. Arena has established an online portal called InvestorServe for investors to manage all aspects of their investment online. Investors can register for InvestorServe by calling 1800 008 494 to request a password.

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• 7 Recognise and manage risk

• Recommendation 7.1

Because of the small size of the Arena Board, Arena does not have a dedicated risk management committee. The Board has ultimate responsibility for overseeing the Risk Management Framework and Policy and for approving and monitoring compliance with the framework.

Risk management has been integrated into Arena’s business processes through implementation of the framework, which incorporates the guidelines described in the Australian/New Zealand Standard on Risk Management (AS/NZS ISO 31000:2009).

The Board receives a quarterly risk report on all critical and high assessed risks. The Joint Managing Directors have responsibility for day-to-day management of the risks facing Arena REIT, and are supported by management.

A summary of the Risk Management Policy and Framework is available on Arena’s website at arenainvest.com.au/about/governance-policies.

Recommendation 7.2

Arena’s Risk Management Policy and Framework was adopted less than two years ago, and for that reason was not formally reviewed as a whole by the Board during the Reporting Period. The Risk Management Policy and Framework will be reviewed as and when the Board considers it necessary.

Recommendation 7.3

Arena has established a dedicated internal compliance audit function that is segregated within the Legal and Compliance team, and which conducts a risk-based program of planned and ad-hoc compliance audits on aspects of Arena’s business and the operations of Arena REIT.

The internal compliance audit function reports to the Board through the Head of Legal and Compliance on a quarterly basis and makes recommendations to the Board for changes to Arena’s processes and systems to ensure compliance with legal and regulatory requirements.

Recommendation 7.4

Arena REIT does not have any material exposure to economic, environmental and social sustainability risks.

• 8 Remunerate fairly and responsibly

Recommendations 8.1 to 8.3 are not applicable to Arena REIT. Arena provides the following alternative information in relation to these Recommendations.

Arena is remunerated for fulfilling its role as responsible entity of Arena REIT in accordance with the remuneration provisions set out in the Arena REIT No. 1 and Arena REIT No. 2 constitutions (which are identical).

Arena is entitled to the fees (all exclusive of GST) set out in the table below. This does not include expense recoveries where Arena pays amounts on behalf of Arena REIT and subsequently recovers them.

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Fee	How and when paid
Ongoing management fee  0.80% of gross value of Arena REIT’s assets up to $400m, plus  0.70% of gross value of Arena REIT’s assets greater than $400m and up to $950m  0.60% of gross value of Arena REIT’s assets greater than $950m	Accrues on a daily basis and is calculated and paid monthly in arrears out of Arena REIT’s assets. Refer to clause 16.3 of the Constitutions.
Acquisition fee 1.0% of the value of each real property asset acquired by Arena REIT	Paid on completion of the acquisition of the real property asset, or on the merger, stapling or amalgamation of either Arena REIT No. 1 or Arena REIT No. 2 with another managed investment scheme. Refer to clause 16.1 of the Constitutions.
Disposal fee 1.0% of the gross sale price of each real property asset, provided the gross sale price exceeds the purchase price of that asset.	Paid on completion of the sale of the real property asset, or on the merger, stapling or amalgamation of the Arena REIT stapled group with another managed investment scheme. Refer to clause 16.2 of the Constitutions.
Performance fee An additional 1.0% of gross sale price in the event the gross sale price of the real property asset exceeds the purchase price of that asset by more than 20%	Paid on completion of the sale of the real property asset, or on the merger, stapling or amalgamation of the Arena REIT stapled group with another managed investment scheme. Refer to clause 16.2 of the Constitutions.

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Contact

Arena Investment Management Limited ACN 077 235 879 AFSL No. 233190 71 Flinders Lane Melbourne Victoria 3000

Any questions may be directed to: Free call: 1800 008 494 Fax: 03 9093 9093 Postal address: Locked Bag 32002 Collins Street East Melbourne Victoria 8003

www.arenainvest.com.au

Arena Investment Management Limited ACN 077 235 879 AFSL No. 233190 Arena REIT Corporate Governance Statement as at 30 June 2014

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