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Annual Report 2015
CORPORATE GOVERNANCE
HBT was activated on 31 December 2013. It acts as the master lessee of Jumeirah Dhevanafushi
as well as the Japan hotels which were acquired by H-REIT. In addition to its function as a
master lessee, HBT may also undertake certain hospitality and hospitality-related development
projects, acquisitions and investments which may not be suitable for H-REIT. On 1 October 2015,
HBT completed the acquisition of Hilton Cambridge City Centre (previously known as Cambridge
City Hotel), a purpose-built upper upscale hotel located in Cambridge, United Kingdom.
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 and works closely with the hotel managers where it is the
master lessee or owner of the properties.
Both H-REIT and HBT are externally managed by the H-REIT Manager and HBT Trustee-Manager
respectively. Accordingly, both H-REIT and HBT 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, HBT or CDLHT, remunerate all the 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 practice from the principles and guidelines under the 2012 Code, the Managers’
position in respect of the same is also explained 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, operational 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 including setting corporate
values and ethical standards, business operations and risk management, 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.
