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ANNUAL REPORT 2014
CORPORATE GOVERNANCE
The HBT Trustee-Manager has the dual responsibility of safeguarding the interests of the HBT
Unitholders, and managing the business conducted by HBT. The HBT Trustee-Manager has
general powers of management over the assets of HBT and its main responsibility is to manage
HBT’s assets and liabilities for the benefit of the HBT Unitholders. The HBT Trustee-Manager
also sets the strategic direction of HBT.
Both H-REIT and HBT are externally managed by the H-REITManager and HBT Trustee-Manager
respectively. Accordingly, both entities do not have personnel of their own. Experienced and
well-qualified management staff are employed to run the day-to-day operations. The H-REIT
Manager and HBT Trustee-Manager, not H-REIT or HBT or CDL Hospitality Trusts (“CDLHT”),
remunerate all Directors and employees of the H-REIT Manager and HBT Trustee-Manager
respectively.
This report sets out the corporate governance practices of both the Managers as they have
adopted a similar set of corporate governance practices, with specific reference to the principles
and guidelines of the Code of Corporate Governance 2012 (“2012 Code”). Where there are
differences in practices from the recommendations under the 2012 Code, the Managers’
position in respect of the same is also set out in this report.
The Managers are committed to maintaining good corporate governance and business integrity
in all of CDLHT’s business activities.
BOARD MATTERS
Principle 1: The Board’s conduct of affairs
Primary Functions of the H-REIT Manager Board and the HBT Trustee-Manager Board
Both the H-REIT Manager Board and the HBT Trustee-Manager Board are responsible for the
overall corporate governance of the Managers respectively, including establishing goals for
management and monitoring the achievement of these goals. The Manager Boards are also
responsible for the strategic business direction and risk management of H-REIT and HBT, and to
ensure that necessary financial and human resources are in place for the Managers to meet their
objectives. All H-REIT Manager Board members and HBT Trustee-Manager Board members
participate in matters relating to corporate governance, business operations and risks, financial
performance and the nomination and review of performance of Directors and key personnel.
The H-REIT Manager Board and the HBT Trustee-Manager Board have established a framework
for the management of the Managers, H-REIT and HBT, including a system of internal controls
and a business risk management process. The H-REIT Manager Board and the HBT Trustee-
Manager Board meet quarterly or more often if necessary and review the financial performance
of H-REIT and HBT respectively against a previously approved budget. The H-REIT Manager
Board and the HBT Trustee-Manager Board also review the business risks of H-REIT and HBT
respectively, examine liability management and act upon any comments from both the internal
and external auditors of H-REIT and HBT respectively. In assessing business risks, the H-REIT
Manager Board and the HBT Trustee-Manager Board also consider the economic environment
and risks relevant to the property industry. They also review management reports and feasibility
studies on individual projects prior to approving major transactions.
(b) In what respect do
these alternative corporate
governance practices
achieve the objectives of
the principles and conform
to the guidelines in the
Code?
The reasons for the
differences in practices
are also set out within
the report.
