3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
3A. Related Parties (continued):
The parent company of the Manager is PT Lippo Karawaci Tbk., incorporated in Indonesia.
The manager held 32,955,777 (2013: 27,241,365) units in the Trust at the end of the reporting year.
The lessees of the Indonesia properties are subsidiaries of PT Lippo Karawaci Tbk. The lessees have provided bank
guarantees of S$44,205,000 (2013: S$43,380,000) in lieu of the security deposits for rental income from the properties.
These guarantees which expired in May, November and December 2014 have been renewed up to May, November and
December 2015 as appropriate.
Acquisition fees payable to the Manager are disclosed in Note 18.
The Group and the Trust have no employees. All the required services are provided by the Manager and others.
The Trust has entered into several service agreements in relation to the management of the Trust. The fee structures
of these services are as follows:
(A) Trustee Fees
Under the Trust Deed, the Trustee is entitled to a fee not exceeding 0.1% (2013: 0.1%) per annum of the value of
the Deposited Property (as defined in the Trust Deed).
The actual fee payable will be determined between the Manager and the Trustee from time to time. The Trustee’s
fee is subject to review every three years.
(B) Manager’s Fees
Under the Trust Deed, the Manager is entitled to management fees comprising the base fee and performance fee
as follows:
(i)
A base fee of 0.4% (2013: 0.4%) per annum of the value of the Deposited Property. Any increase in the rate
of the base fee above the permitted limit or any change in the structure of the base fee shall be approved
by an extraordinary resolution of a meeting of unitholders. The Manager may opt to receive the base fee in
the form of units and/or cash.
(ii) A performance fee fixed at 5.0% (2013: 5.0%) per annum of the Group’s Net Property Income (“NPI”) or
the NPI of the relevant Special Purpose Companies (“SPCs”) for each year. NPI in relation to a real estate
in the form of land, whether directly held by the Trustee or indirectly held by the Trustee through a SPC,
and in relation to any year or part thereof, means its property income less property operating expenses for
such real estate for that year or part thereof. The Manager may opt to receive the performance fee in the
form of units and/or cash.
(iii)
Manager’s acquisition fee determined at 1.0% (2013: 1.0%) of the value or consideration as defined in the
Trust Deed for any real estate or other investments (subject to there being no double-counting).
(iv)
A divestment fee at 0.5% (2013: 0.5%) of the value or consideration as defined in the Trust Deed for any
real estate or other investments (subject to there being no double-counting).
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2014
63
FIRST REIT
ANNUAL REPORT 2014
