CDL Hospitlity Trusts - Annual Report 2016

REPORTS

The HBT Trustee-Manager has in place an internal control system as well as policies and procedures to ensure that

all future interested person transactions will be undertaken on an arm’s length basis, on normal commercial terms,

will not be prejudicial to the interests of HBT and the minority HBT Unitholders, and will be in accordance with all

applicable requirements of the BTA, the Listing Manual and all applicable guidelines as may from time to time be

prescribed to apply to business trusts relating to the transaction in question.

Management identifies interested person transactions in relation to HBT. The HBT Trustee-Manager maintains a

incorporates into its plan a review of all interested person transactions entered into by HBT during the financial year.

The Audit and Risk Committee reviews at least quarterly in each financial year the interested person transactions

entered into during such quarterly period to ascertain that the guidelines and procedures established to monitor

interested person transactions have been complied with. The review includes the examination of the nature of

the transactions and their supporting documents or such other data that the Audit and Risk Committee deems

necessary. If a member of the Audit and Risk Committee has an interest in a transaction, he or she will abstain from

participating in the review and approval process in relation to that transaction.

In addition, all such interested person transactions conducted and any contracts entered into by the HBT Trustee-

Manager on behalf of HBT with an interested person of the HBT Trustee-Manager or HBT, shall comply with and be

in accordance with all applicable requirements of the Listing Manual and the BTA as well as such other guidelines as

may from time to time be prescribed to apply to business trusts.

In particular, when HBT acquires assets from the Sponsor or parties related to the Sponsor in future, the HBT Trustee-

Manager will obtain valuations from independent parties. In any event, interested person transactions entered into

by HBT, depending on the materiality of such transactions, may be publicly announced or, as the case may be,

approved by HBT Unitholders, and will, in addition, be:

• reviewed and recommended by the Audit and Risk Committee of the HBT Trustee-Manager, which comprises

only independent directors; and

• decided by the HBT Trustee-Manager Board, of which more than half of the directors are independent

directors.

FEES AND EXPENSES CHARGED TO HBT ARE APPROPRIATE AND IN ACCORDANCE WITH THE

HBT TRUST DEED

The HBT Trustee-Manager is entitled under the HBT Trust Deed to a management fee of 10.0% of HBT’s profit before

interest and tax in the relevant financial year (calculated before accounting for this management fee in that financial year).

For the purpose of calculating the management fee, if HBT holds only a partial interest in an investment from which such

profit is derived, such profit shall be pro-rated in proportion to the partial interest held.

The management fee is payable to the HBT Trustee-Manager in the form of cash and/or Stapled Securities or (as the

case may be) HBT Units as the HBT Trustee-Manager may elect, and in such proportion and for such period as may be

determined by the HBT Trustee-Manager.

Under the HBT Trust Deed, if the value of the HBT deposited property is at least S$50.0 million, a maximum of 0.1% per

annum of the value of the HBT’s deposited property (if any), subject to a minimum fee of S$10,000 per month, excluding

out-of-pocket expenses and goods and services tax, is payable to the HBT Trustee-Manager as trustee fee. For the

purpose of calculating the management fee, if HBT holds only a partial interest in any of HBT deposited property, such

HBT deposited property shall be pro-rated in proportion to the partial interest held.

The trustee fee is payable to the HBT Trustee-Manager in arrears on a monthly basis in the form of cash.

The HBT Trustee-Manager is also entitled to a maximum of 0.1% of the acquisition price of any authorised investment

acquired directly or indirectly by HBT (pro-rated if applicable to the proportion of HBT’s interest in the authorised

investment acquired).

STATEMENT OF POLICIES AND PRACTICES IN RELATION TO

THE MANAGEMENT AND GOVERNANCE OF CDL HOSPITALITY

BUSINESS TRUST