Page 29 - TreasuryChinaTrust

Treasury China Trust Annual Report 2010 68

NOTES TO THE FINANCIAL STATEMENTS

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

7 Deferred tax (Continued)

Deferred tax assets have not been recognised in respect of the following item because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom:

2010 $’000

Tax losses 1,421

Tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which certain subsidiaries operate.

8 Available-for-sale financial assets

Group 2010 $’000

Unquoted equity security

LuxChina Property Development Co., Ltd 15,783

Available-for-sale financial assets comprise a 5% equity interest in LuxChina Property Development Co., Ltd, a property investment company located in the PRC. The value of the investment at 31 December 2010 is carried at cost which has been assessed to approximate the fair value of the investment.

9 Derivative financial assets and liabilities

Derivative financial assets and liabilities relate to the fair value of interest rate cap and floating to fixed interest rate swaps entered into to manage the interest rate risk on the US Dollar-denominated floating rate debts. The fair value of the interest rate cap is based on the valuation undertaken by an independent professional valuer of financial instruments. The notional amounts are disclosed in Note 26. During the period, the Group refinanced certain bank loans and unwound the interest rate swaps that are linked to the foregoing loans. The Group realised gains of $9.5 million on settlement of such interest rate swap instruments.

10 Trade and other receivables

Group Trust 2010 2010 $’000 $’000

Trade receivables 3,578 – Other receivables 3,082 – Loans and receivable 6,660 – Prepayments 1,486 139

8,146 139

Trade and other receivables are primarily denominated in Chinese Renminbi (“RMB”).

No significant trade receivables were past due at 31 December 2010. No impairment losses were recognised in the period ended 31 December 2010. Based on historical default rates, the Trust believes that no impairment allowance is necessary in respect of trade receivables.

There was no significant concentration of credit risk at the balance sheet date.