Manulife US REIT - Annual Report 2021

MANULIFE US REIT 76 Key Risks Details Key Mitigation Actions Economic Risk • MUSTmay be adversely affected by economic and real estate market conditions in the U.S. These conditions may have a negative impact on the ability of tenants to pay their rents in a timely manner or to continue their leases. This in effect may reduce MUST’s cash flow, which may cause a decline in rents and market value of the properties. • TheManager manages this by adopting a disciplined approach towards financial management and monitors economic developments closely. Regulatory and Compliance Risks • MUST is required to comply with applicable and relevant legislations and regulations that include SGX-ST Listing Rules, International Financial Reporting Standards, SFA, Code of Collective Investment Scheme, U.S., Barbados and Singapore tax laws, regulations and rulings. • Changes in legislations and regulations includingamendments to laws and regulations, legal judgements and their interpretation may impact MUST’s distributable income. • TheManager has establisheda compliancemonitoring programme to assist in ensuring compliance with regulatory requirements, company policies and procedures. • The Manager actively monitors regulatory changes and its impact to the REIT, and implements appropriate strategies to mitigate the impact. Fraud and Bribery Risks • The risk of loss as a result of a knowing misrepresentation or concealment of a material fact or a wilful or deliberate act or failure to act with the intention of obtaining unauthorised benefits. • Fraud and bribery may result in reduced profitability and adversely affect reputation. • The Manager is committed to the highest standards of integrity and has no tolerance for any fraud and bribery in its business conduct. • The Manager has a Code of Business Conduct and Ethics in place that affirms its commitment to ethical conduct and its practice of complying with all the applicable laws, so as to avoid actual or potential conflicts of interest. • In addition, it has a whistle-blowing policy that serves to encourage its employees and any other individuals to raise concerns about possible improprieties in matters of financial reporting and other malpractices in confidence via various channels. Liquidity and Funding Risks • Risk associated with liquidity and cash flow management which may affect the ability to meet payment obligations. • Poor visibility of cash flows may lead to poor planning and decision making on actual funding needs and may lead to unnecessary increase to financing costs. • The Manager closely monitors and actively manages the REIT’s debt maturity profile, operating cash flow and the availability of funding. • To manage liquidity risk, the Manager establishes various banking facilities to ensure that sufficient funds are available to meet its capital, refinancing and operating needs. Enterprise Risk Management