MANAGEMENT DISCUSSION AND ANALYSIS OF THE OPERATING RESULTS

Operating Results

The financial information presented in this section is derived from the audit report prepared by Independent Auditors KPMG Cárdenas Dosal, S.C. for the Consolidated Financial Statements for the period ended December 31, 2015 and 2014, corresponding to the Trust No. F/1616 (Deutsche Bank México, S.A. Institución de Banca Múltiple, División Fiduciaria) and Subsidiary. Such statements and accompanying notes must be read in conjunction with this Management Discussion and Analysis of the Operating Results.

At the close of 2015, Fibra Inn had a total portfolio of 40 hotels in operation (11 limited service hotels, 17 select service hotels, 11 full service hotels and one extended-stay hotel), plus one hotel in negotiation under a binding agreement.

On December 31, 2015, Fibra Inn’s revenue reached Ps. 1,309.8 million, which represented an increase of 48.1% compared with the figure reported in the previous year. Fibra Inn’s revenue per hotel segment is as follows: Ps. 587.0 million, or 44.8%, corresponds to select service hotels; Ps. 532.5 million, or 40.7%, corresponds to full service hotels; Ps. 175.5 million, or 13.4%, corresponds to limited service hotels; and Ps. 14.7 million, or 1.1%, corresponds to extended-stay hotels.

REVENUE PER SEGMENT

( Figures in millions of pesos)

2015 % 2014 %
Limited Service 175.5 13.4% 92.0 10.4%
Select Service 587.0 44.8% 467.1 52.8%
Full Service 532.5 40.7% 325.2 36.8%
Extended Stay 14.7 1.1% - 0.0%
Total 1,309.8 100.0% 884.3 100.0%

59.7%
occupancy (1)

17.0%
INCREASE IN         
ROOM REVENUE (1)

13.0%
INCREASE IN
AVERAGE DAILY RATE(1)

36.9%
NOI Margin

ANNUAL SAME STORE SALES

(34 Hotels) 2015 2014 VARIATION
Room Revenue (PS. millons) 1,189.5 1.016.9 17%
Occupancy excluding the addition of rooms 59.7% 57.7 2.0pp
Occupancy 57.6% 57.7% -0.1pp
Average Daily Rate 1,092.1 966.4 13.0%
RevPaR excluding the addition of rooms 652.5 557.8 17.0%
RevPAR 628.8 557.8 12.7%

Total 2015 revenue was comprised as follows:

  • Ps. 1,228.4 million, or 93.8%, was revenue from lodging, which is derived from the 40 properties in the portfolio.
  • Ps. 81.4 million, or 6.2% of the total revenue was the result of lease of real estate for services other than lodging, such as the lease of meeting rooms, coffee breaks, banquet rooms and restaurants, as well as the rental of some commercial retail spaces.

Operating expenses totaled Ps. 827.0 million, or 63.1% of the total revenue, compared to Ps. 563.0 million or 63.6% of 2014. This improvement of 50 basis points, a decrease of Ps. 264.3 million in expenses is the net effect of lower operating expenses due to an increase in the efficiency in managing the hotel portfolio; that is:

  • A 120 basis point decrease in energy expenses, equivalent to 5.6% of total revenue, driven by: (i) savings in electric expenses from the installation of LED technology in hotels; (ii) a decrease in water and electric commercial rates; and (iii) a change in the gas supplier.
  • A 50 basis point decrease in maintenance expenses, equal to 4.5% of revenues, as a result of an adequate hotel management.
  • Lower lodging expenses, equal to 50 basis points, or 24.1% of total revenue, as a result of: (i) savings in breakfast meals served in hotels; and (ii) lower room-related payroll expenses.
  • A 40 basis point decrease in royalties, equal to 5.9% of total revenue, demonstrating the bene t from not paying royalties in domestic brand hotels Casa Grande and Arriva Express.
(1) Annual same store sales indicators of 34 comparable hotels

The aforementioned, offset by:

  • A 90 basis point increase in administrative expenses, equal to 16.2% of total revenue, as a result of: (i) an increase in the management team payroll; (ii) a Ps. 1.6 million adjustment in labor liabilities from 2014; (iii) administrative service expenses corresponding to the software platform and SAP servers; and (iv) renegotiation of quotes and syndicate subscriptions.
  • A 120 basis point increase in advertising and promotional expenses, equal to 5.8% of total revenue. This is the result of: (i) commercial office payroll; and (ii) higher commissions paid to travel agent operators driven by higher sales.

The NOI reached Ps. 482.8 million in 2015, representing an annual increase of 50.1%, compared to Ps. 321.6 million in 2014. NOI margin for 2015 was 36.9%. The margin reflected higher revenues from the hotels acquired, based on operating efficiency.

During 2015, expenses incurred for the acquisition of hotels reached at total of Ps. 59.9 million, which represented 4.6% of total revenue. This expense reflected the accounting treatment in accordance with the application of IFRS 3 Combination of Businesses accounting rule beginning in the fourth quarter of 2014.

In reference to the IFRS 3 Combination of Businesses standard, the acquisition of hotels qualifies as the acquisition of a business, since an operation is purchased. Therefore, costs related to the transaction are acknowledged in the Income Statement as they are incurred, these include: costs for notaries, legal and appraisals, among others. This applies to the acquisition of hotels realized in 2014 and 2015.

Excluding the expenses from the acquisition of the hotels incorporated during 2015, the administrative expenses totaled Ps. 77.6 million and represented 5.9% of total revenue. This represented a decline of indirect expenses as a percentage of the revenue for 7.3 percentage points compared to 2014.

Total expenses related to Fibra Inn’s administrative expenses were Ps. 137.5 million for 2015 and represented 10.5% of total revenue, which decreased by 270 basis points as a percentage of sales, when compared to 2014 when13.2% was registered equivalent to Ps. 117.0 million.

This variation was principally due to:

  • A 2.7 percentage point decrease in acquisition and corporate expenses, equal to 4.6% of total revenue and correspond to expenses incurred in the hotel acquisition during 2015.
  • A 70 basis point decrease in administrative corporate expenses.
  • A decrease of 20 basis points in other income (net), which includes the contribution of Wyndham Hotel Group for the rebranding of the hotels in Fibra Inn into that brand.
  • The aforementioned was offset by a 90 basis point increase in advisor fees that was the net effect of: (i) a greater number of hotels in the Fibra’s portfolio; and (ii) a change in the advisor commission to 0.75% over the gross value of real estate assets, adjusted to inflation that took place on October 17, 2014.

As a result of the increase in the aforementioned operating expenses EBITDA was Ps. 345.4 million in 2015, equivalent to a margin of 26.4% over the Fibra’s revenues.

30.9%
ADJUSTED EBITDA
margin

Excluding the expenses related to the acquisition of hotels in 2015, Adjusted EBITDA was Ps. 405.2 million, equivalent to a growth of 50.7%, compared to the Adjusted EBITDA for 2014. The adjusted EBITDA margin was 30.9%.

Executive compensation based on equity instruments was Ps. 18.5 million in 2015. This amount corresponded, as has been commented on a recurring basis, to the portion earned from the value of the 3 million CBFIs that was delivered to the Chief Executive Officer after the Initial Public Offering was carried out, at the end of a 3-year period, as has been discussed previously. This is a non-cash item, whose monetary effect will be a dilution of 0.7% beginning March 2016.

During 2015 depreciation expense was Ps. 157.7 million.

Therefore, Operating Income increased by 117.2% in 2015, with the recording of Ps. 169.1 million, or 12.9%, as a percentage of the total revenue, compared to Ps. 77.8 million or 8.8% for 2014.

Net interest expense in the amount of Ps. 10.3 million was recorded, mainly derived from bank loans and debt issuance being amortized during the period. A negative foreign exchange rate fluctuation was Ps. 1.0 million. The net financial result represented an expense of Ps. 11.3 million in 2015, compared to the net financial expense of Ps. 11.4 million in 2014.

As a result, the Net Profit for 2015 was Ps. 157.3 million or 12.0% of net margin. If the expenses from the acquisition of hotels acquired during 2015 were excluded, net income would have been Ps. 217.2 million, or 16.6% of the total revenue.

Cash flow from operations (“FFO”) was Ps. 393.9 million in 2015, which represented 30.1% of the total revenue, an increase of 53.0% compared to 2014, in which Ps. 257.5 million was recorded or 29.1% of FFO margin.

RECONCILIATION OF NET INCOME TO FFO, TO ADJUSTED FFO AND TO FFO PER CBFI

(unaudited, in millions of pesos, except the amount per CBFI)

2015 2014 variation %
Net Income 157.3 66.7 136.0%
(+) Acquisition & organization expenses 59.9 64.3
(+) Depreciation and amortization 157.7 108.3
(+) Executive compensation based in shares 18.5 18.5
(+) Deferred income taxes 0.5 -0.2
FFO 393.9 257.5 53.0%
Maintenance CAPEX 48.9 20.2
(-) Revenue for investment in hotel brand conversion 1 5.9
Adjusted FFO 339.0 237.3 42.9%
FFO per CBFI 0.9013 0.5892 53.0%
Adjusted FFO per CBFI 0.7758 0.5431 42.9%
(1) Income received by Wyndham Hotel Group as an incentive for rebranding hotels to Wyndham Garden (key money)

5.6%
DIVIDEND YIELD

With regards to distributions, Fibra Inn declared dividends in the amount of Ps. 339.0 million, corresponding to the four distributions during 2015, which represented an increase of 42.9% compared to the Ps. 273.3 million declared in 2014.

This represented Ps. 0.7758 cents per CBFI in 2015, which is equivalent to a 3.0% decrease compared to the Ps. 0.7996 cents per CBFI in 2014. The decrease is the result of the arithmetic effect of a larger number of outstanding CBFIs beginning the fourth quarter of 2014, equal to 437,019,542, after the subscription for the equity increase, and this was the amount utilized for the calculation of the fourth quarter 2014 distribution.

Finally, the annual dividend yield for 2015 was 5.6%, based on a closing price of Ps. 13.91 per CBFI, which compares favorably to the dividend yield rate of 3.3% for the previous year.

Distribution to CBFI Holders

(unaudited, in millions of pesos, except the amount per CBFI)

2015 2014 variation %
Net Income 157.3 66.7 136.0%
(+) Non-Cash Items 176.7 126.5
(+) Acquisition and Corporate Expenses 59.9 64.3
(-) Capex Reserve 48.9 20.2
(-) Revenue for investment in hotel brand conversion 1 5.9
Distribution to CBFI Holders 339.0 237.3 42.9%
CBFIs Outstanding 437,019,542 437,019,542
Distribution per CBFI 0.7758 0.5431 42.9%
CBFI price at the end of the year 13.91 16.40
Dividend Yield 5.6% 3.3%
(1) Income received by Wyndham Hotel Group as an incentive for rebranding hotels to Wyndham Garden (key money)

42.9%
increase
in Distribution

PS. 339.0
million in distribution

6.5x
debt service
coverage

On December 31, 2015, Fibra Inn had Ps. 796.8 million in cash position and Ps. 406.1 million in recoverable VAT, which is currently in process for reimbursement by the tax administrative office for large taxpayers. Accounts receivable and other receivables were equal to Ps. 164.0 million resulting from the normal business operations. Prepaid expenses equivalent to Ps. 30.7 million mainly correspond to insurance and prepaid construction-related expenses for development projects. Accounts payable was Ps. 131.7 million, and increases are the result of a larger number of hotels in the Fibra’s portfolio, as well as for constructions in progress.

At the close of December 31, 2015, the total of nominal bank obligations was equal to Ps. 100.0 million, corresponding to Ps. 69.4 million for expenses incurred when contracting the credit lines, to be amortized during the term. Also, liabilities corresponding to commissions for bank loans were equal to Ps. 8.7 million, which correspond to the portion of a total of Ps. 35.8 million, to be amortized up to March 8, 2019 as per IFRS standards. Such commissions correspond to:

  • Ps. 4.1 million, short term, for the 30% of the loan structuring commission due December 2015, which had not been paid as of December 31, 2015;
  • Ps. 4.6 million, long term, for the remaining 20% of the loan structuring commission due September 2016.

The bank loan was contracted at an interest rate of TIIE plus 2.5%. The financial covenants for the bank loans as of December 31, 2015 are shown below:

FINANCIAL COVENANTS – CREDIT LINE

As of December 31,
2015
Credit / Value 1 Equal or lower than 50% 2.7%
Debt Service Coverage 2 Equal or higher than 1.60 19.1
NOI/Debt 3 Equal or higher than 13% 305.3%
Minimum Coverage 4 Equal or higher than 1.20 19.1
Net Tangible Value5 Higher than 60% 78.4%
Total Leverage Value6 Lower or equal to 55% 21.6%
  • Outstanding Balance of the Credit in the total value of the hotels pledged in guarantee.
  • NOI of the hotels pledged in guarantee in the Servicing of the Debt, including the simulation of increased amortization for 15 years.
  • NOI of the hotels pledged in Guarantee in the Outstanding Balance of the Credit.
  • NOI of the hotels pledged in Guarantee of the debt plus Obligatory Distributions (Fiscal Results).
  • Total Value of the Assets minus the Outstanding Balance of the Credit in the Value of the Assets.
  • Outstanding Balance of the Credit in the Total Value of the Assets.

21.6%
loan to value

On October 2, 2015, Fibra Inn concluded a local debt offering in the form of Certificados Bursátiles Fiduciarios (“CBFs”) under the ticker symbol “FINN 15”. Fibra Inn issued a total of Ps. 1,875,350,000 as part of its local note program for up to Ps. 5 billion. This single-tranche issuance will pay interest every 28 days, at a variable rate equivalent to TIIE28 + 110 basis points, with a tenor of 6 years, with principal payable at maturity. The issuance obtained national ratings of AA-(mex) from Fitch Ratings and HR AA+ from HR Ratings.

The proceeds from the debt issuance will be used towards:

  • Pay down of the Company’s current bank loan for Ps. 600.0 million;
  • The acquisition of the Hampton Inn by Hilton Chihuahua, City Express Chihuahua and City Express Junior Chihuahua hotels for Ps. 444.3 million, plus Ps. 17.4 million in expenses, and
  • Investment in current hotels for Ps. 196.0 million.

At December 31, 2015 the remaining balance of this issuance was Ps. 590.2 million. Additionally, a bank credit line for Ps. 2,200.0 million continues to be available, and the Company is renegotiating the current conditions of such credit line in order to keep using it up until a new issuance is placed in the markets. With this debt issuance, the Company substituted financial liabilities under better conditions. The Company still has the possibility to take on additional debt for Ps. 1,700.0 million without surpassing the 33% loan-to-value threshold set forth by the Company’s Technical Committee.

The FINN15 debt issuance covenants at December 31, 2015 are as follows:

FINANCIAL COVENANTS – PUBLIC DEBT

As of December 31,
2015
Loan to Value Equal or lower than 50% 21.6%
Debt Service Coverage2 Equal or higher than 1.0 6.5
Debt Service Equal or higher than 1.5 5.6
Total Assets no taxable Equal or higher than 150% 291%
Debt to Total Assets Lower or equal to 40% 1.1%

On November 4, 2015, the Company negotiated an interest rate swap with Santander, maturing on September 27, 2019 at a rate of 5.18%. With this derivative instrument, the Company reached debt service coverage of 33%, as formerly established by the Financial Committee. As such, the weighted average debt cost is the following:

  • Swaps contracted with the banks prior to the debt issuance: Ps. 385 million, at a weighted average of 5.266%
  • Swaps contracted with Santander: Ps. 240 million, at a rate of 5.18%
  • Amount not covered by the issuance: Ps. 1,250.4 million at a variable rate of TIIE plus 110 basis points.

Fibra Inn has a total loan-to-value of 21.6% at December 31, 2015. This leverage level is in compliance with the dispositions of the Mexican Banking and Securities Commission (CNBV) to regulate the maximum leverage levels for the Fibras up to 50%. As of December 31, 2015, the debt service coverage ratio was 6.5 times. Both of these gures are calculated in accordance with the methodology in Appendix AA of the Circular Única de Emisoras applicable to CBFIs.

ANNUAL REPORT ON ACTIVITIES
TRUST F/1616 TECHNICAL COMMITTEE

The undersigned, Victor Zorrilla, Chairman of the Technical Committee of the Irrevocable Trust identified under the number F/1616 (the “Trust”), hereby reports to the Shareholders’ Meeting on the completion of the following activities during the scal year 2014:

  • Eight meetings were held, during the months of April, July, August, October, November and December 2015 as well as in February and April 2016.
  • The Consolidated Financial Statements were approved for March, June, September and December 2015, upon recommendation from the Audit Committee.
  • The March, June, September and December 2015 Holder Distributions were approved for a total of Ps. 338.1 million upon recommendation from the Audit Committee.
  • The 2015 budget for the Trust and its Subsidiary was approved.
  • The contract terms of KPMG as the Independent Auditor of the Trust for the year 2015 were approved, upon the recommendations by the Audit Committee.
  • The Audited Financial Statements for the year 2015 with the corresponding Opinion Report without exception by the Independent Auditor were approved, after hearing the opinion of the Auditing Committee.
  • Approval was given -after hearing the opinion of the Practices Committee- The acquisitions of the Hampton Inn & Suites by Hilton Chihuahua, City Express Chihuahua, City Express Junior Chihuahua and Courtyard by Marriott Chihuahua hotels, with a total investment value of Ps. 713.9 million, as well as the development of the JW Marriott Monterrey hotel with a total investment value of up to Ps. 343.4 million.
  • Approval was given –after hearing the opinion of the Practices Committee- to the contracting terms with Operadora México –a Related Party- of the hotels Holiday Inn Reynosa Industrial Poniente, Hampton Inn by Hilton Hermosillo, Arriva Express Guadalajara, Staybridge Suites Guadalajara Expo, Hampton Inn by Hilton Chihuahua, City Express Chihuahua, City Express Junior Chihuahua, Courtyard by Marriott Chihuahua, Courtyard by Marriott Saltillo, and Fairfield Inn & Suites by Marriott Coatzacoalcos.
  • Approval was given, following the opinion of the Practices and Investments Committee, for the annual and semi-annual review of the rental for the spaces utilized by Operadora México Servicios y Restaurantes S.A.P.I. de C.V. in the hotels where it was determined that an updating was required.
  • The integration and faculties of a Financial Committee were approved.
  • Approval was given –after hearing the opinion of the Practices Committee– the creation of Internal Unit for Market Studies.
  • Determined –prior authorization by the Practices Committee– the procedure for the replacement of real estate assets in the Trust’s hotels.
  • Approval –prior opinion of the Practices Committee– the nomination of Laura Nelly Lozano Romero and Lizeth Mariel Pedraza Nava as Secretary and Alternate, respectively, of the Technical Committee.
  • Approval of the hiring of advisors for the process prior to the Debt Issuance, and proposal at the Shareholders’ Meeting to the approval of said Debt Issuance for up to Ps. 2 billion, with a total 5-year program of up to Ps. 5 billion.
  • The designation of an Evaluation Committee was approved, which analyzed and authorized the contracting of Santander as a market maker for 2015.
  • Presented all of the real estate assets that comprise Equity and rati ed all of the processes necessary for their acquisition, prior to presenting these at the Shareholders’ Meeting.
  • Approval for the sale of a portion of the 286.7 m2 located in the front portion of the Hotel Holiday Inn Puebla La Noria lot to the government of Puebla, for the construction of the Nodo Alitxcáyotl.
  • Approval of a Level 1 American Depositary Receipt Program.
  • Ratification of Fibra Inn’s participation in the Mexican Association of Real Estate Fibras (Asociación Mexicana de Fibras Inmobiliarias).

San Pedro Garza García, April 29 2016.

Mr. Victor Zorrilla Vargas
Chairman of the Technical Committee
Trust F/1616

ANNUAL REPORT ON ACTIVITIES
TRUST F/1616 AUDIT COMMITTEE

The undersigned, Mr. Rafael Gomez Eng, President of the Audit Committee of the Irrevocable Trust identified under the number F/1616 (the “Trust”), hereby reports to the Shareholders’ Meeting that during fiscal year 2015 the following activities were completed carried:

  • Four meetings were held, taking place in the months of April, July, and October, as well as in February 2016.
  • The Consolidated Financial Statements corresponding to March, June, September and December of 2015 were analyzed and recommended to the Technical Committee.
  • The March, June, September and December 2015 Holder Distributions were evaluated and recommended to the Technical Committee for a total of Ps. 338.1 million.
  • Established the criteria for the accounting format for the repositioning of the real estate and equipment for the Hotels that comprise the Trust
  • The Trust for the year 2015 were defined and were recommended to the Technical Committee.
  • The work carried out by the Auditing firm was duly supervised.
  • The Certified Financial Statements for the year 2013, with the corresponding Opinion Report were analyzed and recommended to the Technical Committee, with no exception from the Independent Auditor.

San Pedro Garza García, April 29 2016.

Mr. Rafael Gómez Eng
PRESIDENT OF THE AUDIT COMMITTEE
Trust F/1616

AUDIT COMMITTEE

Rafael Gómez Eng President
Héctor Medina Aguiar
Everardo Elizondo Almaguer

ANNUAL REPORT ON ACTIVITIES
TRUST F/1616 PRACTICES COMMITTEE

The undersigned, Mr. Adrián Garza de la Garza, President of the Practices Committee of the Irrevocable Trust identified under the number F/1616 (the “Trust”), hereby reports to the Shareholders’ Meeting at the completion of the fiscal year 2015:

  • Six meetings were held during the months of February, May, July (2 sessions), October and November of 2015.
  • Evaluation and recommendation to the Technical Committee for the acquisition of the hotels: Hampton Inn by Hilton Chihuahua, City Express Chihuahua, City Express Junior Chihuahua, Courtyard by Marriott Chihuahua, with a total investment of Ps. 713.9 million, as well as the development of the JW Marriott Monterrey hotel, with a total investment of up to Ps. 343.4 million was evaluated and recommended to the Technical Committee.
  • Recommendation of the contractual terms set forth with Operadora México Servicios y Restaurantes S.A.P.I de C.V. –a Related Party- to the Technical Committee regarding the Holiday Inn Reynosa Industrial Poniente, Hampton Inn by Hilton Hermosillo, Arriva Express Guadalajara, Staybridge Suites Guadalajara Expo, Hampton Inn by Hilton Chihuahua, City Express Chihuahua, City Express Junior Chihuahua, Courtyard by Marriott Chihuahua, Courtyard by Marriott Saltillo, and Fairfield Inn & Suites by Marriott Coatzacoalcos hotels. In addition, analysis and recommendation to the Technical Committee for the semi-annual and annual review of the space rentals used by Operadora México Servicios y Restaurantes S.A.P.I de C.V., where an update was determined to be necessary.
  • Confirmation of meeting the Eligibility Criteria required to invest in the following hotels:
    Holiday Inn Reynosa Industrial Poniente, Hampton Inn by Hilton Hermosillo, Arriva Express Guadalajara, Staybridge Suites Guadalajara Expo, with a total investment of Ps. 775.0 million.
  • Study and approval of the proposal for the change in electric energy provider for the Trust’s Hotels.
  • Evaluation and proposal to the Technical Committee to substitute the Secretary of this Committee.
  • Analysis and approval to establish an Internal Work Management division.
  • Analysis and recommendation to the Technical Committee to create an Internal Work Management division.
  • Evaluation and recommendation to the Technical Committee regarding the furniture replacement procedure of the Trust’s Hotels.

San Pedro Garza García, April 29 2016.

Mr. Adrián Garza de la Garza
President of the PRACTICES Committee
Trust F/1616

PRACTICES COMMITTEE

Adrián Garza de la Garza President
Héctor Medina Aguiar
Rafael Gómez Eng

ANNUAL REPORT ON ACTIVITIES
TRUST F/1616 NOMINATIONS COMMITTEE

The undersigned, Mr. Marcelo Zambrano Lozano, President of the Nominations Committee of the Irrevocable Trust identified under the number F/1616 (the “Trust”), reports to the Shareholders’ Meeting that during the fiscal year 2015:

  • One meeting was held in the month of April 2015.
  • Approval of the change in the compensation amount for the Independent Board Members.
  • Designation of special delegates to implement the agreements.

San Pedro Garza García, April 29 2016.

Mr. Marcelo Zambrano Lozano
President of the Nominations CommitteE
Trust F/1616

NOMINATIONS COMMITTEE

Marcelo Zambrano Lozano President
Adrián Garza de la Garza
Héctor Medina Aguiar
Joel Zorrilla Vargas
Victor Zorrilla Vargas

ANNUAL REPORT ON ACTIVITIES
TRUST F/1616 CREDIT SURVEILLANCE COMMITTEE

The undersigned, Mr. Rafael Gómez Eng, President of the Credit Surveillance Committee of the Irrevocable Trust identified under the number F/1616 (the “Trust”), reports to the Shareholders’ Meeting that the following activities were carried out during the fiscal year 2015:

  • Four meetings were held during the months of April, July, and October, as well as in February 2016.
  • Analyze and approve the reports in accordance with the Requirements for Compliance with the Financial Guidelines of the Mexican Securities and Exchange Commission (CNBV) for Bank Loans and the Debt Issuance of FINN15, corresponding to March, June, September and December 2015.

San Pedro Garza García, April 29 2016.

Mr. Rafael Gómez Eng
President of the Credit Surveillance Committee
Trust F/1616

CREDIT SURVEILLANCE COMMITTEE

Rafael Gómez Eng President
Héctor Medina Aguiar
Everardo Elizondo Almaguer
Alejandro Javier Leal-Isla Garza
Oscar Eduardo Calvillo Amaya

ANNUAL REPORT ON ACTIVITIES
TRUST F/1616 FINANCIAL COMMITTEE

The undersigned, Mr. Héctor Medina Aguiar, President of the Financial Committee of the Irrevocable Trust identified under the number F/1616 (the “Trust”), reports to the Shareholders’ Meeting that the following activities were carried out during the fiscal year 2015:

  • Three meetings were held during the months of July, September and October 2015.
  • Analyze and approve the Terms and Conditions for the First Public Debt Issuance of the Trust (FINN 15), for Ps. 1,875.35 million.
  • Analyze and determine the strategy for the partial coverage of the Swaps for a total value of Ps. 625 million.
  • Approval to undergo negotiations with the Banks in order to improve the conditions of the Credit with Banorte, Actinver, Banamex, Scotiabank and Banregio.

San Pedro Garza García, April 29 2016.

Mr. Héctor Medina Aguiar
President of the Financial Committee
Trust F/1616

FINANCIAL COMMITTEE

Héctor Medina Aguiar President
Adrián Garza de la Garza
Everardo Elizondo
José Antonio Gómez Aguado de Alba
Oscar Eduardo Calvillo Amaya
Santiago Pinson Correa

ANNUAL REPORT FROM THE ADMINISTRATOR OF THE IRREVOCABLE TRUST IDENTIFIED UNDER THE NUMBER F/1616 (THE “TRUST”), SUBSCRIBED BY ASESOR DE ACTIVOS PRISMA, S.A.P.I. DE C.V., AS THE TRUSTOR; AND DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, FIDUCIARY DIVISION AS THE FIDUCIARY, AND CI BANCO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, AS THE AGENT ON THE COMPLIANCE WITH FISCAL OBLIGATIONS, IN TERMS OF ARTICLE 76 FRACTION XIX, OF THE INCOME.

San Pedro Garza García, Nuevo León, April 29, 2016.

Pursuant to the provisions established in Article 76, Fraction XIX, of the Income Tax Law, Administradora de Activos Fibra Inn, S.C., in its capacity as Administrator of the Trust, hereby presents the report that reflects the compliance with the fiscal obligations of the Trust for the period encompassed between January 1 and December 31, 2014 (the “Period of Review”), so that in due course the said report can be submitted to the consideration of the Annual General Shareholders’ Meeting of the of Real Estate Trust Certificates with the ticker symbol “FINN13” (“CBFIs”), which will be held on 29 of April 2016.

It is hereby represented that the fiscal status of the Fiduciary of the Trust was examined for the Period Review that covers the certified financial statements, and, regarding meeting its fiscal obligations as a direct tax payer, withholder and/or collector, whereby it is represented that none of the fiscal obligations of the Trust is outstanding or in default. It is hereby reported that the calculations were verified and found that the federal taxes accrued during the Period Reviewed as reported show that there are no rulings on outstanding balances or any payment that has been omitted.

Regarding the amount and payment of the Workers Profit Share, it is hereby reported that the Trust has no employees, and therefore, it was not subject to any labor related obligations during the Period Reviewed.

This report is issued solely and exclusively for the information for the CBFI Holders of the trust, and to be subjected for approval before the Anual General Shareholders’ meeting of the Trust, pursuant to the provisions established by the applicable laws, and shall not be used for any other purpose.


Administradora de Activos Fibra Inn, S.C.,
in its capacity as Administrator of the
Trust through its legal representative
Mr. Oscar Eduardo Calvillo Amaya