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Treasury China Trust Annual Report 2010 56

NOTES TO THE FINANCIAL STATEMENTS

Period from 19 May 2010 (date of constitution) to 31 December 2010

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors of the Trustee-Manager on 25 February 2011.

1 Domicile and activity

Treasury China Trust (the “Trust”) is a Singapore-domiciled business trust established pursuant to the Trust Deed dated 19 May 2010 made by Treasury Holdings Real Estate Pte. Ltd (the “Trustee-Manager”). The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee-Manager is under a duty to take into custody and hold the assets of the Trust held by it or through its subsidiaries (collectively, the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”).

The Trust was formally admitted to the Official List of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 21 June 2010.

The principal activities of the Trust is investment holding. The principal activities of the subsidiaries are those relating to investment in, either directly or indirectly, real estate or real estate-related assets in the People’s Republic of China (the “PRC”).

The Group has entered into service agreements with the Trustee-Manager in relation to management of the Trust and its property operations. The fee structures for these services are as follows:

Trustee’s fee

Pursuant to the Trust Deed, the Trustee’s fees are based on 0.02% per annum of the value of the assets of the Group (“Trust Property”). The Trustee’s fees are payable quarterly in arrears in the form of cash to the Trustee-Manager.

Manager’s fee

Management fees

The Trustee-Manager is entitled under the Trust Deed to the following management fees:

(a) a base fee of 0.5% per annum of the value of the Trust Property of the Trust; and

(b) a performance fee of 4.0% per annum of the Net Property Income of the real estate held by the Trust, whether directly or indirectly, in the relevant financial period (calculated based on the currency in which the property income of such real estate is received and before accounting for the performance fee in that financial period/year).

The base fee and performance fee are payable quarterly in arrears to the Trustee-Manager in the form of cash and/or Units (as the Trustee-Manager may elect). The Trustee-Manager has elected to receive the base fee and performance fee in cash for the period from 19 May 2010 (date of constitution) to 31 December 2010.

When management fees are payable in Units, the issue prices will be determined based on the volume weighted average traded price per unit for all trades done on the SGX-ST in the ordinary course of trading for 10 business days immediately preceding the respective date of issue of the new units, or where the independent directors of the Trustee-Manager believe such market price is not a fair reflection of the market price of a Unit, such amount as determined by the independent directors of the Trustee-Manager at its discretion (after consultation with a stockbroker), as being the fair market price of a Unit, provided that such issue price shall be not less than the higher of the (i) market price (i.e. volume weighted average trade price for a Unit for the last 10 business days) and (ii) current unit value on the last day of the relevant period in which the relevant component of the management fees accrues.