Corporate Governance

Role of the Board

The Board will have responsibility for planning and running the business affairs of CER for the benefit of CER Securityholders. The Board is accountable to CER Securityholders for the performance of CER.

The responsibilities and functions of the Board include:

Reviewing and approving corporate strategies, budgets, annual business plans and policies;
Evaluating the performance of CER against strategies and business plans;
Evaluating the performance of senior management and developing appropriate succession plans;
Monitoring CER's financial position and results and being conscious of CER's status at all times;
Considering management recommendations on major investments and strategic commitments;
Ensuring regulatory compliance and appropriate risk management processes are in place; and
Ensuring a high level of transparency reporting to CER Securityholders and compliance with the highest ethical standards and business practices.

The Board will meet at least on a monthly basis to discuss pertinent business developments and issues and review the operations and performance of CER. The Board will review their processes periodically to ensure that they are able to carry out their functions in the most effective manner.

Related party transactions and conflicts of interest

Centro Retail may make future acquisitions by co-investing with Centro or enter into other transactions with Centro. This means that Centro Retail will frequently transact with other members of the Centro group. Such dealings may include:

Redevelopment of the Properties;
Co-investments in additional properties;
Investing in Centro MCS direct property syndicates or funds;
Acquiring and disposing of interests in Centro MCS direct property syndicates or funds from or to other Centro entities;
Voting as an investor in investor meetings held by Centro MCS direct property syndicates or funds;
Borrowing from Centro and or entering in foreign exchange and interest rate swaps and hedges with Centro in accordance with CER's financial risk management policies as described in the PDS; and
Other transactions

In all cases where Centro Retail is transacting with another member of Centro, such as a Centro MCS direct property syndicate, Centro Property Trust (or one of its subsidiaries) or Centro Properties Limited (or one of its subsidiaries), it will either conduct the transaction on commercial terms and at arm's length, that is, on terms and conditions no less favourable to CER than would apply if the other party were not part of Centro, or CER will obtain the prior approval of CER Securityholders (excluding Centro and its associates).

In general terms, "arms length" terms and conditions will be determined in accordance with the following principles:

In the case of acquisitions of assets by or from Centro or Centro related parties, by reference to independent valuations;
In the case of co-investments with Centro, the terms will be by reference to the agreement reached with the unrelated third party vendor;
In the case of acquisitions at the time of issue of unlisted securities issued by Centro MCS syndicates or other Centro managed funds (e.g. under a product disclosure statement) by reference to the same terms and conditions as apply to public investors; and
In the case of later dealings in unlisted securities issued by Centro MCS syndicates or other Centro managed funds, by reference to "fair market value" normally assessed taking into account the latest published net asset backing of the relevant security plus any accrued distributions.

As noted above, Centro Retail may from time to time invest in Centro MCS direct property syndicates or other Centro managed funds. As an investor in those funds, Centro Retail may from time to time be required to cast its vote in actions and decisions relating to those investments. In these circumstances, Centro Retail's policy is generally to vote in accordance with the relevant responsible entity's recommendations.

Continuous Disclosure

Centro Retail has a policy that all CER Securityholders will have equal access to CER's information and will implement procedures to ensure that all price sensitive information is disclosed to the ASX in accordance with the continuous disclosure requirements of the Corporations Act and the ASX Listing Rules. The Responsible Entity will seek to ensure that all information provided to the ASX is promptly posted on CER's website.

A comprehensive process is in place to identify matters that may have a material effect on the price of CER Securities and to communicate such matters internally. The Company Secretary of the Responsible Entity and CER Limited is responsible for interpreting CER's Continuous Disclosure Policy and where necessary informing the Board and is also the person nominated under the ASX Listing Rules as CER's Communications Officer.

Stakeholder communication

Centro Retail aims to ensure that investors are fully and promptly informed about all major developments affecting CER's operations. Information will be communicated to investors through CER's Annual Report, half-year and full year results announcements, formal disclosures to the ASX (i.e. ASX announcements), CER's website and CER's Annual General Meeting (AGM). The AGM also provides an important opportunity for CER Securityholders to ask questions, express views and respond to Board proposals. It is proposed that CER's first AGM following the Capital Distribution will be in September 2006.

Centro Retail is conscious of the need to communicate effectively with its investors and endeavours, wherever practicable, to take advantage of new technologies that provide opportunities for enhanced communication with investors.

As part of its investor communication strategy, Centro Retail has developed a website which significantly enhances CER's ability to communicate with its investors.

CER Announcements

Centro Retail will endeavour to post all announcements made to the ASX on CER's website on the day the announcement is made. This will include all announcements made under CER's Continuous Disclosure Policy and all analyst presentations. Where Centro Retail is unable to place an announcement on its website on the same day that the announcement is made to the ASX (including, for example, where the announcement is made after the close of business on a particular day), Centro Retail will endeavour to post the announcement on its website as soon as is reasonably practicable thereafter.