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REPORTS
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the HBT Trustee-Manager, the H-REIT Manager and the H-REIT
Trustee on 10 March 2017.
1 GENERAL
CDL Hospitality Trusts is a stapled group comprising CDL Hospitality Real Estate Investment Trust ("
H-REIT
") and
its subsidiaries (the "
H-REIT Group
") and CDL Hospitality Business Trust ("
HBT
") and its subsidiaries (the "
HBT
Group
") (collectively, the "
Stapled Group
"). H-REIT is a Singapore-domiciled unit trust constituted pursuant to the
trust deed dated 8 June 2006 (as amended) (the "
H-REIT Trust Deed
") between M&C REIT Management Limited
(the "
H-REIT Manager
") and DBS Trustee Limited (the "
H-REIT Trustee
"). The H-REIT Trust Deed is governed by
the laws of the Republic of Singapore. The H-REIT Trustee is under a duty to take into custody and hold the assets
of H-REIT held by it or through its subsidiaries in trust for the holders of units in H-REIT. HBT is a business trust
constituted by a trust deed dated 12 June 2006 (as amended) the ("
HBT Trust Deed
") and is managed by M&C
Business Trust Management Limited (the "
HBT Trustee-Manager
"). The securities in each of H-REIT and HBT
are stapled together under the terms of a stapling deed dated 12 June 2006 entered into between the H-REIT
Manager, the H-REIT Trustee and the HBT Trustee-Manager (the "
Stapling Deed
") and cannot be traded separately.
Each stapled security in CDL Hospitality Trusts (the "
Stapled Security
") comprises a unit in H-REIT (the "
H-REIT
Unit
") and a unit in HBT (the "
HBT Unit
").
CDL Hospitality Trusts was formally admitted to the Official List of Singapore Exchange Securities Trading Limited
(“
SGX-ST
”) on 19 July 2006.
The principal activity of H-REIT and its subsidiaries is to invest in income producing real estate and real estate
related assets, which are used or substantially used for hospitality and hospitality related purposes, with the primary
objective of achieving an attractive level of return from rental income and for long-term capital growth.
HBT functions as a master lessee and may also undertake certain hospitality and hospitality-related development
projects, acquisition and investments which may not be suitable for H-REIT.
The consolidated financial statements of the H-REIT Group relate to H-REIT and its subsidiaries. The consolidated
financial statements of the HBT Group relate to HBT and its subsidiaries. The consolidated financial statements of
the Stapled Group relate to the HBT Group and the H-REIT Group.
Several service agreements are in place in relation to the management of HBT and H-REIT and its property operations.
The fee structures of these services are as follows:
(i)
HBT Trustee-Manager’s fees
Pursuant to Clauses 12.1 and 12.2 of the HBT Trust Deed, the HBT Trustee-Manager is entitled to the following:
• Trustee fee of not exceeding 0.1% per annum of the value of HBT’s Deposited Property (as defined in the HBT
Trust Deed), subject to a minimum fee of $10,000 per month, if the value of HBT’s Deposited Property is at
least $50.0 million. The trustee fee is payable in arrears on a monthly basis in the form of cash.
• Management fee of 10% of HBT’s profit before interest and tax in the relevant financial year (calculated
before accounting for the management fee in that financial year).
The management fee is payable in the form of cash or Stapled Securities as the HBT Trustee-
Manager may elect, and in such proportion and for such period as may be determined by the
HBT Trustee-Manager. For the year ended 31 December 2016, 80% of the HBT Trustee-Manager’s fees
was satisfied in the form of Stapled Securities and the remaining 20% was satisfied in cash. For the year-
ended 31 December 2015, the HBT Trustee-Manager’s fees were satisfied in cash.
Any increase in the maximum permitted rate or any change in the structure of the HBT Trustee-Manager’s
management fees must be approved by an extraordinary resolution at a meeting of the holders of the
HBT units duly convened and held in accordance with the provisions of the HBT Trust Deed.
Any portion of the management fee payable in the form of Stapled Securities is payable quarterly in
arrears and any portion of the management fee payable in cash is payable monthly in arrears.
NOTES TO THE FINANCIAL STATEMENTS
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