Page 24 - TreasuryChinaTrust

The Trustee-Manager entered into a placement agreement dated 9 December 2010 with a placement agent to launch a private placement of 16,095,047 new units (“New Units”) at an issue price of $1.66 per new unit. The Trustee-Manager issued the New Units on 23 December 2010 and raised equity capital of $26.7 million from this private placement. Transaction costs of $1.1 million were incurred and capitalised as a deduction from the amount of units in issue. The New Units, ranking pari passu in all respects with the Units in issue immediately prior to the issue of the New Units, commenced trading on the mainboard of the SGX-ST on 23 December 2010. Unitholders of the New Units are entitled to receive any distributions which may be paid for the current distribution period as well as all distributions thereafter.

Each Unit in the Trust represents an undivided interest in the Trust. The rights and interests of Unitholders are contained in the Trust Deed and include the right to:

• receive income and other distributions attributable to the Units held;

• participate in the termination of the Trust by receiving a share of all net cash proceeds derived from the realisation of the assets of the Trust less any liabilities, in accordance with their proportionate interests in the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying assets of the Trust and is not entitled to the transfer to it of any assets (or part thereof) or of any estate or interest in any asset (or part thereof) of the Trust; and • attend all Unitholders’ meetings. The Trustee-Manager may (and the Trustee-Manager shall at the request in writing of not less than 50 Unitholders or one-tenth in number of the Unitholders, whichever is lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed.

• a Unitholder’s right is limited to the right to require due administration of the Trust in accordance with the provisions of the Trust Deed; and

• a Unitholder has no right to request the Trustee-Manager to redeem his Units while the Units are listed on SGX-ST.

A Unitholder’s liability is limited to the amount paid or payable for any Units in the Trust. The provisions of the Trust Deed provide that no Unitholders will be personally liable for indemnifying the Trustee-Manager or any creditor of the Trustee-Manager in the event that liabilities of the Trust (excluding net assets attributable to Unitholders) exceed its assets. Under the Trust Deed, every Unit carries the same voting rights.

Prior to the constitution of the Trust, certain directors of CREO and the employees of Treasury Holdings China Limited (“THCL”) and Treasury Holdings, were granted CREO Share Options in the implementation of the CREO Share Option Scheme as approved by the board of directors of CREO. In conjunction with the acquisition of CREO and the listing of the Trust on the mainboard of the SGX-ST, a TCT Substitution Option Scheme was introduced to replace the CREO Share Option Scheme on 21 June 2010. As such, the Trustee-Manager granted the TCT Substitution Options to the existing holders of the CREO Share Options, in consideration for any CREO Share Options which they surrender prior to, and conditional upon, the listing of the Units of the Trust on the mainboard of the SGX-ST. The terms of the TCT Substitution Option are equivalent to the terms of the CREO Share Options, so that the rights of the holders of the CREO Share Options will not be prejudiced. THCL and Treasury Holdings are related parties of the Trustee-Manager.

The fair value amount in respect of the outstanding options that had been charged through the income statement of CREO and the fair value amount of the relevant employee benefits that was required to be settled in equity of CREO prior to the acquisition of CREO made by the Trust, totalling GBP 7.5 million (equivalent to $15.7 million), were recognised in the Unitholders’ funds of the Trust, as contribution by Unitholders, in conjunction with the Trust’s issue of units to acquire CREO.