CORPORATE GOVERNANCE REPORT
(CONT’D)
AUTHORISED INVESTMENT MANAGEMENT FEE
In relation to the authorised investments not in the nature of real estate whether held by LMIR Trust, or indirectly through
one or more special purpose vehicles of LMIR Trust, the Manager shall be entitled to receive for its own account out of the
Deposited Property (excluding those authorised investments in the nature of real estate, whether directly held by LMIR Trust
or indirectly through one or more special purpose vehicles) the Authorised Investment Management Fee, being a fee equal
to a rate of 0.5% per annum (or such lower percentage as may be determined by the Manager in its absolute discretion)
of the investment value of such authorised investment (Clause 15.1.5 of the Trust Deed).
The Authorised Investment Management Fee serves the same function as the Base Fee to compensate the Manager should
LMIR Trust invest in any authorised investments which are not in the nature of real estate. LMIR Trust does not currently
hold any such authorised investments and no Authorised Investment Management Fee was payable for FY 2015.
FORM AND TIME OF PAYMENT OF MANAGEMENT FEE
Pursuant to Clause 15.1.7 of the Trust Deed, the management fees will be paid in the form of cash and/or Units (as the
Manager may elect). The management fees payable in Units will be issued at the volume weighted average price for a Unit
for all trades on the SGX-ST in the ordinary course of trading on the SGX-ST for (a) (in the case of the Base Fee and the
Authorised Investment Management Fee) the last 10 Business Days (as defined in the Trust Deed) of the relevant period in
which such fee accrues and (b) (in the case of the Performance Fee) the last 10 Business Days of the relevant financial year.
For FY 2015, the management fees are payable quarterly in arrears and the breakdown of the management fees was as
follows:
Group and LMIR Trust
2015
2014
$’000
$’000
Base fees
4,823
4,368
Performance fees
6,343
5,040
11,166
9,408
With effect from 1 January 2016, under Appendix 6 of the CIS Code (the “Property Funds Guidelines”), crystallisation of the
annual performance fee has been revised to be no more frequent than once a year. Accordingly, from FY 2016 onwards,
the Manager’s Performance Fee will be payable once a year after completion of the audited financial statements for the
relevant financial year in arrears.
ACQUISITION FEE
Pursuant to Clause 15.2.1 of the Trust Deed, the Manager is entitled to receive an Acquisition Fee at the rate of 1.0% of the
purchase price paid for any authorised investment acquired by LMIR Trust. The Acquisition Fee is earned by the Manager
upon the completion of an acquisition. This fee seeks to motivate and compensate the Manager for its efforts expended
to continually seek out and acquire DPU accretive assets to increase longer term returns for Unitholders. In addition, the
Acquisition Fee allows the Manager to recover the additional costs and resources incurred by the Manager in the course
of seeking out new acquisition opportunities, including but not limited to, due diligence efforts and man-hours spent in
evaluating and structuring the transaction, negotiating transaction terms and documentation with the vendor and working
with professional advisers and regulatory authorities to seek the necessary regulatory approvals and/or approval from
Unitholders (where required).
ANNUAL REPORT 2015
55
