ARA US Hospitality Trust - Annual Report 2021

58 CORPORATE GOVERNANCE REPORT INTRODUCTION ARA US Hospitality Trust (“ ARA H-Trust ”) is a stapled group comprising ARA US Hospitality Property Trust (“ ARA H-REIT ”) and ARA US Hospitality Management Trust (“ ARA H-BT ”). The units in ARA H-REIT (each, a “ ARA H-REIT Unit ”) and the units in ARA H-BT (each, a “ ARA H-BT Unit ”) are stapled together under the terms of a stapling deed dated 17 April 2019 (the “ Stapling Deed ”) entered into between ARA Trust Management (USH) Pte. Ltd., as manager of ARA H-REIT (the “ ARA H-REIT Manager ”), DBS Trustee Limited, as trustee of ARA H-REIT (the “ ARA H-REIT Trustee ”) and ARA Business Trust Management (USH) Pte. Ltd., as trustee-manager of ARA H-BT (the “ ARA H-BT Trustee Manager ”, and together with the ARA H-REIT Manager, the “ Managers ”), to form stapled securities in ARA H-Trust (“ Stapled Securities ”, and each a “ Stapled Security ”). Each Stapled Security consists of one ARA H-REIT Unit and one ARA H-BT Unit and is treated as a single instrument. The Stapled Securities were listed on the Mainboard of Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) on 9 May 2019. ARA H-REIT is a real estate investment trust (“ REIT ”) constituted in Singapore by a trust deed dated 24 September 2018 (as amended) (the “ ARA H-REIT Trust Deed ”). ARA H-REIT is an authorised collective investment scheme under the Securities and Futures Act 2001 of Singapore (the “ SFA ”). ARA H-BT is a business trust constituted in Singapore by a trust deed dated 29 October 2018 (as amended) (the “ ARA H-BT Trust Deed ”, together with the ARA H-REIT Trust Deed and the Stapling Deed, the “ Trust Deeds ”). ARA H-BT is registered as a business trust under the Business Trusts Act 2004 of Singapore (the “ BTA ”). This Corporate Governance Report (“ Report ”) describes the Managers’ corporate governance framework and practices. The Managers are committed to sound corporate governance policies and practices and observe high standards of conduct in line with the recommendations of the Code of Corporate Governance 2018 (the “ 2018 CG Code ”) and the Listing Manual of the SGX-ST (the “ Listing Manual ”) as well as other applicable rules and regulations. The following segments describe the Managers’ main corporate governance policies and practices. They encompass proactive measures for avoiding situations of conflict or potential conflicts of interest, prioritising the interests of the stapled securityholders of ARA H-Trust (the “ Stapled Securityholders ”), complying with applicable laws and regulations, and ensuring that the Managers’ obligations under the Trust Deeds are properly and efficiently carried out. The Managers are committed to complying with the principles and provisions of the 2018 CG Code, and to the extent that there are any deviations from the 2018 CG Code, such as in respect of the establishment of a nominating committee and a remuneration committee, the disclosure of remuneration, and the implementation of absentia voting at general meetings of ARA H-Trust Stapled Securityholders, the Managers will provide explanations for such deviations and details of the alternative practices adopted by the Managers which are consistent with the intent of the relevant principles of the 2018 CG Code. Due to the different legislative and regulatory requirements in relation to a REIT as compared to a business trust, the corporate governance procedures and disclosure requirements in relation to the ARA H-REIT Manager are different from those in relation to the ARA H-BT Trustee Manager, and where appropriate, these have been highlighted below. The Managers The Managers are wholly-owned subsidiaries of ARA Asset Management Limited (“ ARA ”). Each of the ARA H-REIT Manager and the ARA H-BT Trustee Manager has general powers of management over the business and assets of ARA H-REIT and ARA H-BT, respectively. The ARA H-REIT Manager holds a Capital Markets Services (“ CMS ”) Licence issued by the Monetary Authority of Singapore (the “ MAS ”) to carry out REIT management activities. In addition, employees of the ARA H-REIT Manager who carry out regulated activities are qualified appointed CMS representatives. The ARA H-REIT Manager’s main responsibility is to manage ARA H-REIT’s assets and liabilities in the best interests of unitholders of ARA H-REIT. The primary role of the ARA H-REIT Manager is to set the strategic direction of ARA H-REIT and make recommendations to the ARA H-REIT Trustee on, amongst others, acquisitions, divestments, development and/or enhancement of the assets of ARA H-REIT in accordance with its stated investment strategy. The ARA H-BT Trustee Manager performs similar functions for ARA H-BT. It has the dual responsibilities of holding the trust property of ARA H-BT on trust for the unitholders of ARA H-BT, and managing the business conducted by ARA H-BT. Collectively, the Managers have the duty of safeguarding the interests of the Stapled Securityholders.