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TREASURY CHINA TRUST
RESULTS FOR THE PERIOD 1 JANUARY TO 31 MARCH 2012
Treasury China Trust (“TCT” or the “Trust”), is a Singapore listed Business Trust established under a
Trust Deed dated 19 May 2010, which commenced trading on the Singapore Stock Exchange (“SGX”)
on 21 June 2010. Established to acquire, develop and manage commercial real estate in China,
Treasury Holdings Real Estate Pte Ltd, as Trustee Manager of Treasury China Trust is pleased to
announce its results for the three months ended 31 March 2012.
Highlights as at 31 March 2012
Financial
• Gross revenue of S$25.972 million for the 1st quarter of 2012 representing a 33.5% increase
over Q1 2011
• Net Property Income (“NPI”) of S$15.985 million for the 1st quarter representing a 28.4%
increase over NPI for the three months ended 31 March 2011
• Basic Earnings per Unit (“EPU”) of S$3.0 cents for the 1st quarter ended 31 March 2012
• Net Asset Value (“NAV”) of S$4.41 per unit as at 31 March 2012 compared with the NAV as at
31 December 2011 of S$4.62 per unit. This decrease was predominantly due to the 3.5%
appreciation of the Singapore Dollar over the Chinese Renminbi (“RMB”) for the reporting period
(31/12/11 S$1 = RMB4.848; 31/03/12 S$1 = RMB5.017)
• As an owner of commercial real estate in China TCT’s revenues are predominantly in RMB and
in this context Gross Rental Income of RMB129.405 million and Net Property Income of
RMB79.685 million have out-performed Q1 2011 by 29.3% and 24.4% respectively
(RMB ‘000) 1st Qtr 2012 1st Qtr 2011
Actual Actual Change
Gross revenue(1) 129,472 100,130 29.3%
Business and property related tax (15,394) (12,558)
Property management fees (4,394)) (3,399)
Other property operating expenses(1) (29,935) (20,130)
Total Property Operating Expenses (49,787) (36,087) 37.9%
Net Property Income 79,685 64,043 24.4%
• As a Singapore listed entity TCT’s reporting currency is S$ and the operating performance
taking into the aforementioned appreciation of the S$ to the RMB is summarized as follows:
(S$ 000) 1st Qtr 2012 1st Qtr 2011
Actual Actual Change
Gross Revenue 25,972 19,454 33.5%
Net Property Income 15,985 12,454 28.4%
Total profit after tax 8,009 7,026 14.0%
Total Profit After Tax attributable to 7,710 7,026 9.7%
Trust Unitholders
Earnings per unit (EPU) (cents) 3.0 2.7 n.a
(1) Further details of Gross revenue and Other Property operating expenses are set out on page 22 of the 2012 First
Quarter Unaudited Financial Statements & Distribution Announcement.
In June 2010, J.P. Morgan (S.E.A.) Limited was the financial adviser and issue manager in relation to the
listing of the Units on the Main Board of the SGX-ST by way of an introduction. 1
Trust Deed Covenants
• Maximum debt to assets ratio of 45% - Actual 34.3% (31/12/11 – 33.5%)
• Maximum development assets to total assets of 30% - Actual 18.7% (31/12/11 – 17.2%)
• Minimum payout of Distributable Income of 80% - N.A (31/12/11 – Nil)
Operational
• Committed occupancy for the Shanghai portfolio of The HQ, Central Plaza and Treasury
Building (“Core Portfolio”) equated to 97.8% as at 31 March 2012, maintaining the strong
result recorded as at 31 December 2011 of 97.8%
• 28 leases were successfully negotiated and concluded in the Core Portfolio for the quarter
encompassing both new lettings and renewals producing an aggregated per square metre
rental which represents a very healthy 19.3% increase over the expiring leases. A selection
of leasing activity for the 1st quarter includes:
Tristate (Central Plaza) 4,302 sqm (Renewal and Expansion)
Adsame Group (The HQ) 2,678 sqm (New Lease)
Grohe (Central Plaza) 571 sqm (Renewal)
NatureLaw (Central Plaza) 517 sqm (Expansion)
Wako Logistics (Central Plaza) 517 sqm (Renewal)
Hummel (Central Plaza) 423 sqm (Renewal)
• The development of the HQ Extension in Shanghai and Beijing Logistics Park (“BLP”) continued
in accordance with the approved budget and timetable.
• “The HQ” achieved 27% leasing pre-commitment for the expanded retail mall following the
successful completion of 3 additional leasing transactions during the quarter including Hongqiao
Century Cinema at a rental representing a 175% increase to the rent currently payable for the
theatre operations.
• Beijing Logistics Park, a logistics facility that has achieved 100% lease pre-commitment and
scheduled for completion in April 2012 has been placed on the market for sale through
international real estate services provider CB Richard Ellis.
Capital Markets Activity
• During Q1 of 2012, TCT received approval from the Chinese government authorities to establish
an equity investment management business in Shanghai. This is a major and exciting milestone
in TCT’s growth as a significant entity in the Chinese business sector. This licence permits TCT,
through its wholly owned Shanghai based subsidiary to raise domestic Renminbi (“RMB”) capital
in a private equity format for re-investment. The wide scope of the business approval also permits
TCT to act as a General Partner within this structure and to proactively manage RMB invested
funds. TCT is in discussions with a number of domestic insurance companies and private banking
units with the intention of launching its first fund in 2012.
Market Conditions
March inflation at 3.6% took the market by surprise on the high side but these expectations were fed
by an equally surprising February number of 3.2%, which surprised many on the low side. In any
event year-to-date inflation remains well below the government’s stated 2012 target of 4.0%.
Much was also made of the largest trade deficit in a decade of USD31.4bn for February, but this was
shown to be an early year / Chinese New Year anomaly with March showing a trade surplus of
USD5.35bn.
2
A number of new initiatives have also been introduced on the home lending front with significant
relaxation for first home buyers. This is in keeping with expectations of the likely way forward for the
housing sector – first home buyers and social housing will be the first sectors to benefit. It is also
interesting to note that lending for March totaled in excess of RMB1.0trn, well in excess of market
estimates of RMB800bn. At least 2 more months of data will be required to identify a trend in regard
to the prospect of further loosening across 2012, but it is an encouraging sign.
With regard to the commercial real estate market, Shanghai Grade A office leasing market
maintained its consistent performance over the past 12 months with rents increasing and vacancy
rates falling across the city. Overall, average rents for Grade A office space rose to RMB
8.9/sqm/day, an increase of 1.2% q-o-q, while in Puxi (where all TCT’s Shanghai assets’ are located),
the rents remained neutral at RMB 9.1/sqm/day. The supply remained constrained with no new
projects completing in the CBD area, and overall vacancy thus fell to 4.9% in Puxi and 6.1% in
Pudong. Rental growth for full year is projected to be 7%-8% 1 .
The Shanghai retail leasing market continued its positive momentum as leasing transactions
remained active, driven by expansion demand from mid-range fashion retailers and continuing
growth in retail sales. Average ground floor rents in the prime market edged up 0.6% q-o-q to RMB
46.5/sqm/day with the vacancy rate falling by 0.7% to 2.4% in prime areas. Q1 of 2012 has
witnessed more retail projects in the city upgrading or repositioning their tenant mix to attract more
foot traffic by increasing F&B and fast fashion tenants.
Distributions
TCT declares its distributions as at each 30 June and 31 December and as such no distribution is
due for the quarter period ending 31 March 2012.
Richard Barrett, Chairman of TCT, commented:
"Despite the market uncertainty and ongoing volatility which has been a feature across most of the
globe including China for more than 12 months, TCT has continued to deliver a strong operational
performance, with all key financial and operational parameters significantly surpassing those for the
same period of 2011. Underpinned by the strong market fundamentals in China’s commercial real
estate sector, in particular the retail market, the next 12 to 24 months will witness the evolution of
TCT’s retail-led growth strategy. The completion of The HQ, TCT’s flagship development in Shanghai,
of which the retail component has reached 27% lease pre-commitment, and a number of other
important mandates including the anticipated launch of TCT’s first RMB Fund during 2012, will
enhance TCT’s leading position in China’s commercial real estate sector.”
BY ORDER OF THE BOARD
Treasury Holdings Real Estate Pte. Ltd.
(as Trustee-Manager of Treasury China Trust)
(Company registration no: 201003233M)
Richard David, Director
30 April 2012
IMPORTANT NOTICE
The value of units (“Units”) in Treasury China Trust (“TCT”) and the income derived from them may fall as well as rise. Units are not
obligations of, deposits in, or guaranteed by, TCT, the Trustee-Manager, or any of its affiliates. The past performance of TCT is not
indicative of the future performance of TCT. Certain statements in this announcement constitute “forward-looking statements”. Such
forward-looking statements and financial information are based on numerous assumptions regarding TCT’s present and future
business, and its strategies and the environment in which TCT will operate in the future. Such forward-looking statements and
financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of TCT, to be materially different from any future results, performance or achievements expressed or
1
Source: Jones Lang LaSalle
3
implied by such forward-looking statements and financial information. These forward-looking statements and financial information
speak only as at the date of this announcement. TCT expressly disclaims any obligation or undertaking to release publicly any
updates of or revisions to any forward-looking statement or financial information contained herein to reflect any change in TCT’s
expectations with regard thereto or any change in events, conditions or circumstances on which any such statement or information is
based, subject to compliance with all applicable laws and regulations and/or the rules of the SGX-ST and/or any other relevant
regulatory or supervisory body or agency.
Treasury China Trust
Richard Barrett, Chairman
Tel: + 65 6248 4634
Richard David, Chief Executive Officer
Tel: +65 6248 4634
Cindy Ma, TCT Investor Relations
Tel: +86 6282 5000
Citigate Dewe Rogerson (TCT PR)
Charlotte Bilney
Tel: +852 2533 4618
4
Chairman’s Statement
Introduction
I am pleased to present the results for Treasury China Trust (“TCT”) for the 3 months period ending
31 March 2012.
This operating period has delivered strong revenue growth in RMB terms representing a 29.4% over
Q1 of 2011, delivering Net Property Income of RMB 79.685 million, a 24.4% improvement over Q1 of
2011.
The S$ results, as detailed below, were positively impacted by the appreciation of the S$ relative to
the US$ and RMB during the quarter. This major Asian currency has appreciated 2.8 percent since
the end of 2011, the fourth-biggest gain against the U.S. dollar among the most-traded currencies
buoyed by strong economic rebound in Q1 2012. As a result, TCT’s gross revenue in S$ terms
recorded a robust growth of 33.5% y-o-y and the Net Property Income increased by 28.4% over Q1
of 2011.
TCT’s NAV per unit was recorded at S$4.41 as at 31 March 2012.
(S$'000) 1st Qtr 2012 1st Qtr 2011
Gross revenue 25,972 19,454
Business and property related taxes (3,088) (2,436)
Property management fees (881) (659)
Other property operating expenses (6,018) (3,905)
Total property operating expenses (9,987) (7,000)
Net property income 15,985 12,454
Trustee-Manager’s fees (4,059) (3,302)
Administrative expenses (2,368) (1,848)
Finance income 77 237
Finance costs (12,802) (7,337)
Net foreign exchange gain 15,253 9,356
Change in fair values of financial derivatives (1,295) (250)
Total profit before tax 10,791 9,310
Income tax expense - Current tax (392) (401)
- Deferred tax (2,390) (1,883)
Total profit after tax 8,009 7,026
Total profit attributable to:
Unitholders of the Trust 7,710 7,026
Non-controlling interests 299 -
Total profit after tax 8,009 7,026
5
Financial – Profit & Loss
The Trust has recorded an EPU of S$3.0 cents for the first quarter ended 31 March 2012 as outlined
below.
(S$'000) 1st Qtr 2012 1st Qtr 2011
Actual Actual Change
Gross revenue 25,972 19,454 33.5%
Net property income 15,985 12,454 28.4%
Total profit/(loss) after
tax attributable to 7,710 7,026 9.7%
Unitholders of the Trust
Basic earnings per unit (EPU) (cents) 3.0 2.7 11.1%
(RMB’000) 1st Qtr 2012 1st Qtr 2011
Actual Actual Change
Gross rental income 129,472 100,130 29.3%
Business and property related tax (15,394) (12,558)
Property management fees (4,392) (3,399)
Other property operating expenses (29,999) (20,130)
Total property operating
expenses (49,787) (36,087) 37.9%
Net property income 79,685 64,043 24.4%
Financial – Balance Sheet
TCT net asset value (“NAV”) as at 31 March 2012 was S$4.41 per unit representing a decrease of
S$21 cents to the NAV per unit of S$4.62 as at 31 March 2012. The decrease in NAV predominantly
attributable to the 3.5% appreciation of the Singapore Dollar over the Chinese RMB for the reporting
period.
As at 31 March 2012 the Trust had total cash holdings equating to S$42.17 million, of which 56.9%
was held onshore in RMB.
6
TCT’s debt portfolio as at 31 March 2012 is outlined below
Asset USD m RMB m Total RMB m Gearing
Equivalent 2 %
Stabilised Office / Retail Properties
The HQ – ICBC 296.6 405.1 2,273.5 37.7
Central Plaza – Citic International 110.0 64.0 756.9 42.4
Treasury Building – Citic International 37.8 45.5 283.6 40.3
Central Avenue Mall – Evergrowing Bank 0.0 280.0 280.0 42.7
Huai Hai Mall – Citic International 42.0 49.0 313.6 40.3
Total Stabilized Assets 486.4 843.5 3,907.6 39.2
Development Properties
The HQ Extension (ICBC RMB800.0m) 3 160.5 160.5
Beijing Logistics Park (ICBC RMB170.0m) 4 159.7 159.7
Total Development Assets
Land Bank Properties
Total Loan Portfolio 486.4 1,163.7 4,227.8
Debt Maturity Profile for Stabilized Assets
Portfolio
TCT’s committed occupancy continued demonstrating strength underpinned by the robust demand of
quality commercial real estate in China. This has been matched by an increase in average per
square metre rental rates for the office portfolio.
Office Assets Previous Current Previous Current
(RMB) Rent / Sqm ¹ Rent / Sqm² Occupancy ¹ Occupancy ²
The HQ 5.74 5.76 96.7% 99.1%
Central Plaza 6.62 6.90 100.0% 100.0%
Treasury Building 6.36 6.30 100.0% 100.0%
Notes
1. As at 31/12/11
2. As at 31/03/12
2
USD 1 = RMB6.2290. (as at 31/03/12)
3
Facility Limit
4
Facility Limit
7
Gross Rental Income
Committed Occupancy
99.7% 100.0%
100.0%
97.1% 97.8%
100% 97.0%
93.3%
95% 91.6%
90%
83.1%
85%
80%
73.1%
75%
70%
65%
60%
55%
n.a n.a
50%
The HQ Central Plaza Treasury Building Core Stablized Central Avenue Mall Huai Hai Mall
Portfolio (Existing Phase)
8
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
_______________________________________________________________________________
TABLE OF CONTENTS
Item Description Page
No. No.
- Table of Contents 1
- Summary of TCT Group Results 2
- Introduction 3
- Comparative Statements 3
1(a) Consolidated Income Statement (1st Qtr 2012 & YTD 2012) 4
1(b) Consolidated Income Statement (1st Qtr 2012 & 1st Qtr 2011) 5
1(c) Consolidated Statement of Comprehensive Income 6
2(a) Statements of Financial Position 7
2(b) Aggregate amount of borrowings and debt securities 11
2(c) Collaterals of Secured Borrowings 12
2(d) Convertible bonds 13
2(e) Actual gearing ratio compared to gearing cap 15
2(f) Actual development ratio compared to development cap 15
3(a) Consolidated Statement of Cash Flows (1st Qtr 2012 & YTD 2012) 15
3(b) Consolidated Statement of Cash Flows (1st Qtr 2012 & 1st Qtr 2011) 16
3(c) Consolidated Statement of movement in unitholders’ funds 17
3(d) Details of change in the total number of issued units 18
3(e) Earnings per Unit 18
3(f) Net Asset Value per Unit ( Basic and Diluted) 18
4&5 Audit Statement 19
6&7 Changes in Accounting Policies 19
8 Review of the performance against 1st Qtr 2011 20
9 Outlook and Prospects 23
10 Distribution 24
11 Interested Person Transactions Mandate 24
12 Confirmation Pursuant to Rule 705(5) of the Listing Manual 25
1
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
Summary of TCT Group Results
(S$'000) 1st Qtr 1st Qtr
2012 2011
Actual Actual Change
Gross revenue 25,972 19,454 6,518
Net property income 15,985 12,454 3,531
Total profit after tax
attributable to Trust
Unitholders 7,710 7,026 684
Basic earnings per unit
(EPU) (cents) 3.0 2.7 0.3
Footnotes:
1. The Actual figures are based on translating the monthly RMB Profit and Loss Accounts of
TCT’s operating subsidiaries at each month end during the reporting period.
2. RMB means Chinese Renminbi.
3. S$ means Singapore Dollar and cent means Singapore cent.
4. Total profit after tax attributable to Trust Unitholders is net of non-controlling interests.
Summary of Net Property Income in RMB
(RMB’000) 1st Qtr 1st Qtr
2012 2011
Actual Actual Change
Gross rental income 129,405 99,970 29,435
Other income 67 160 (93)
Business and property related tax (15,394) (12,558) 2,836
Property management fees (4,394) (3,399) 995
Other property operating expenses (29,999) (20,130) 9,869
Total property operating
expenses (49,787) (36,087) 13,700
Net property income 79,685 64,043 15,642
2
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
INTRODUCTION
Treasury China Trust (“TCT” or the “Trust”) is a Singapore registered business trust, constituted
pursuant to a Trust Deed dated 19 May 2010 (“Trust Deed”) and listed on the Singapore Exchange
Securities Trading Limited (“SGX-ST”) on 21 June 2010. Treasury Holdings Real Estate Pte Ltd,
a Singapore domiciled entity, is the Trustee-Manager of TCT.
TCT holds 100% interest in four income generating commercial properties and two development
properties. The four commercial office/retail properties, which are all located in prime locations in
Shanghai, are The HQ (formerly known as City Centre), Central Plaza, Treasury Building and
Huai Hai Mall. The development properties are The HQ Extension (formerly known as City
Centre Extension) in Shanghai, which is currently undergoing development into a Grade A
office/retail complex, and Beijing Logistics Park, which is being developed into a logistics
complex. TCT also holds a 55% interest in the Central Avenue Mall in Qingdao, China.
COMPARATIVE STATEMENTS
The actual results for the 1st Qtr ended 31 March 2012 are compared to the actual results of 1st Qtr
2011. The SGD comparative statements are presented in Section 8.
The functional currency of TCT is S$ while the functional currency of the Trust’s operating
subsidiaries in the People’s Republic of China (“PRC’) is RMB. As the operating companies
report their operating income and expense in RMB, an RMB comparative statement is also
presented in Footnote 1 of Section 8 showing the actual net property income of 1st Qtr 2012
against actual net property income of the 1st Qtr 2011. The Trustee-Manager believes that the
RMB comparison provides a more meaningful review of the performance of the Trust’s PRC
assets as it eliminates financial effects arising from fluctuations of the RMB/SGD exchange rates.
3
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
1(a) Consolidated Income Statement (1st Qtr 2012 & YTD 2012)
(S$'000) 1st Qtr 2012 YTD 2012
Gross rental income 25,959 25,959
Other income 13 13
Gross revenue 25,972 25,972
Business and property related taxes (3,088) (3,088)
2
Property management fees (881) (881)
3
Other property operating expenses (6,018) (6,018)
Total property operating expenses (9,987) (9,987)
Net property income 15,985 15,985
Trustee-Manager’s fees2 (4,059) (4,059)
Administrative expenses (2,368) (2,368)
Finance income 77 77
Finance costs (12,802) (12,802)
Net foreign exchange gain1 15,253 15,253
Change in fair values of financial derivatives (1,295) (1,295)
Total profit before tax 10,791 10,791
Income tax expense - Current tax (392) (392)
- Deferred tax (2,390) (2,390)
Total profit after tax 8,009 8,009
Total profit attributable to:
Unitholders of the Trust 7,710 7,710
Non-controlling interests 299 299
Total profit after tax 8,009 8,009
Footnotes:
1. Net foreign exchange gain was mainly due to the foreign currency gain arising from the
revaluation of the USD denominated loan as a result of the appreciation of the Singapore
dollar against the US dollar (from US$:S$ =1:1.2987 as at 31 December 2011 to US$:S$ =
1:1.2610 as at 31 March 2012).
2. Property management fees and Trustee-Manager’s fees are payable to subsidiaries of
Treasury Holdings China Limited, a wholly owned subsidiary of a company that is wholly
owned by significant unitholders of TCT.
3. The analysis of other property operating expenses is presented in Footnote 1 of Section 8.
4. A comparison between the 1st Qtr 2012 income statement and the 1st Qtr 2011 income
statement is presented in Section 8.
4
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
1(b) Consolidated Income Statement (1st Qtr 2012 & 1st Qtr 2011)
(S$'000) 1st Qtr 2012 1st Qtr 2011
Gross rental income 25,959 19,423
Other income 13 31
Gross revenue1 25,972 19,454
Business and property related taxes (3,088) (2,436)
Property management fees (881) (659)
Other property operating expenses (6,018) (3,905)
Total property operating expenses1 (9,987) (7,000)
Net property income 15,985 12,454
Trustee-Manager’s fees (4,059) (3,302)
Administrative expenses (2,368) (1,848)
Finance income 77 237
Finance costs2 (12,802) (7,337)
Net foreign exchange gain3 15,253 9,356
Change in fair values of financial derivatives (1,295) (250)
Total profit before tax 10,791 9,310
Income tax expense - Current tax (392) (401)
- Deferred tax (2,390) (1,883)
Total profit after tax 8,009 7,026
Total profit attributable to:
Unitholders of the Trust 7,710 7,026
Non-controlling interests 299 -
Total profit after tax 8,009 7,026
Footnotes:
1. The increases in gross revenue and total property operating expenses were attributable to the
assets acquired over the prior year. The Trust acquired Central Avenue Mall (55% equity
interest) and Huai Hai Mall (100% owned) in 2nd Qtr 2011. Footnote 1 of Section 8 presents
an analysis of net property income in RMB.
2. The increase in finance costs was mainly due to the drawdown of bank loans and issuance of
Trio convertible notes to fund the newly acquired assets.
3. Net foreign exchange gain in 1st Qtr 2012 was due mainly to the foreign currency gain
(unrealized) arising from the revaluation of the USD denominated loan as a result of the
appreciation of the Singapore dollar against the US dollar (from US$:S$ =1:1.2987 at 31
December 2011 to US$:S$ = 1:1.2610 at 31 March 2012), compared to that in 1st Qtr 2011 of
a smaller extent (from US$:S$ = 1:1.2853 at 31 December 2010 to US$:S$ = 1:1.2642 at 31
March 2011).
5
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
1(c) Consolidated Statement of Comprehensive Income
(S$'000) 1st Qtr 2012 1st Qtr 2011
Profit after tax 8,009 7,026
Other comprehensive expense:
Foreign currency translation
differences relating to foreign
operations1 (63,591) (17,312)
Other comprehensive expense
for the period, net of tax (63,591) (17,312)
Total comprehensive expense (55,582) (10,286)
Attributable to:
Unitholders of the Trust (51,658) (10,286)
Non-controlling interests (3,924) -
1. The foreign currency translation differences relating to foreign operations in 1st Qtr 2012 was
due to foreign exchange differences (unrealized) arising from the translation of RMB
financial statements of the PRC operating subsidiaries into SGD (from S$:RMB = 1:4.848 at
31 December 2011 to S$:RMB = 1:5.017 at 31 March 2012), compared to the foreign
exchange differences of a smaller extent in the 1st Qtr 2011 (from S$:RMB = 1:5.128 at 31
December 2010 to S$:RMB = 1. 5.188 at 31 March 2011).
6
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
2(a) Statements of Financial Position
(S$'000 except otherwise stated) Group Trust
As at As at As at As at
31 Mar 2012 31 Dec 2011 31 Mar 2012 31 Dec 2011
Non-current assets
Investment properties¹ 2,589,962 2,668,647 - -
Property, plant and equipment 1,594 1,763 - -
Subsidiaries - - 976,874 976,874
Total non-current assets 2,591,556 2,670,410 976,874 976,874
Current assets
Trade and other receivables2 26,802 43,709 59,676 81,459
Derivative financial asset3 4 4 - -
Cash and cash equivalents4 42,170 45,598 1,412 1,697
Total current assets 68,976 89,311 61,088 83,156
Total Assets 2,660,532 2,759,721 1,037,962 1,060,030
Non-current liabilities
Interest-bearing borrowings 775,169 773,604 - -
5
Convertible bonds 64,125 64,823 64,125 64,823
Derivative financial liabilities6 1,509 214 1,509 214
7
Trade and other payables 10,639 13,950 - -
8
Deferred tax liabilities 421,695 434,508 222 101
Total non-current liabilities 1,273,137 1,287,099 65,856 65,138
Current liabilities
Interest-bearing borrowings 56,784 69,367 - -
5
Convertible bonds 5,009 3,218 5,009 3,218
Trade and other payables9 79,242 98,237 8,903 22,721
Total current liabilities 141,035 170,822 13,912 25,939
Total Liabilities 1,414,172 1,457,921 79,768 91,077
Net assets 1,246,360 1,301,800 958,194 968,953
Represented by:
Unitholders’ funds10 1,118,972 1,170,488 958,194 968,953
Non-controlling interests 127,388 131,312 - -
1,246,360 1,301,800 958,194 968,953
Number of units issued 253,619,717 253,619,717 253,619,717 253,619,717
NAV attributable to unitholders per
unit (in S$) 4.41 4.62 - -
7
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
Footnotes:
1. Investment properties
1a. Movement in 1st Qtr 2012
(S$'000) 1st Qtr 2012
Total property value as at 1 January 2012 2,668,647
Capitalised development costs 12,599
Exchange adjustments (91,284)
Total property value as at 31 March 2012 2,589,962
The capitalised development costs in the 1st Qtr 2012 mainly arose from the construction of
Beijing Logistics Park and The HQ Extension.
1b. Carrying value
31 Mar 2012 31 Dec 2011
RMB'000 S$'000 RMB'000 S$'000
Beijing Logistics Park 295,287 58,762 265,002 54,662
Central Avenue Qingdao 1,965,900 391,214 1,965,900 405,507
Central Plaza 1,786,800 355,573 1,786,800 368,564
Huai Hai Mall 779,000 155,021 779,000 160,685
The HQ and HQ Extension 7,483,995 1,489,316 7,437,024 1,534,035
Treasury Building 703,900 140,076 703,900 145,194
13,014,882 2,589,962 12,937,626 2,668,647
The balances as at 31 March 2012 represented the valuations as at 31 December 2011 plus
costs incurred during 1st Qtr 2012. TCT undertakes independent valuations of its real estate
portfolio in June and December of each year.
1c. Development Costs (excluding land cost and capitalised interest)
(in millions) Approved Contract Expenditure to
Budget Committed 31 Mar 2012
RMB S$ RMB S$ RMB S$
The HQ Extension 883 176 340 68 183 36
(% of approved budget) 20.5%
Beijing Logistic Park 242 48 228 45 208 41
(% of approved budget) 85.4%
Total 1,125 224 568 113 391 77
34.4%
8
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
Footnotes (continued):
2. Trade and other receivables
The decrease in trade and other receivables was mainly due to the settlement of a receivable
of S$10,314,000 in the quarter, which was previously due from the immediate holding
company of the minority shareholder of Sanyang Property Development Co., Ltd (the “Trio
Holding Company”).
3. Derivative financial asset
Derivative financial asset relate to the fair value of an interest rate cap entered into to manage
the interest rate risk on a portion of the US$ denominated floating rate debt. This is based on
an independent professional valuation of financial instruments as at 31 March 2012.
4. Cash and cash equivalents
(S$'000) 31 Mar 2012 31 Dec 2011
Total cash and cash equivalents 42,170 45,598
Less: Restricted cash* (8,738) (5,818)
Cash and cash equivalents in the
consolidated statement of cash flows 33,432 39,780
* Restricted cash relates to cash deposited in interest reserve accounts to repay borrowings
as they become due.
Cash and cash equivalents as at 31 March 2012 have reduced from the prior period due to
development expenditure incurred exceeding funds generated from operations and financing
activities during the first quarter of 2012.
5. Convertible bonds
Convertible bonds are being accounted for in accordance with relevant Singapore Financial
Reporting Standards (“SFRS”). Details of which are presented in Section 2(d).
6. Derivative financial liabilities
Derivative financial liabilities as at the period end pertain to:
(i) The derivative component of RMB convertible bonds with the aggregate notional
amount of RMB36 million. TCT undertakes independent valuations of this derivative
component in June and December of each year. Its fair value was S$88,000 as at 31
December 2011 (Section 2(d)). No external valuation was performed for this derivative
component as at 31 March 2012 since the fair value change was assessed to be
insignificant during the period;
(ii) The floating to fixed interest rate swap with a notional amount of US$55 million. It was
entered into to manage the interest rate risk. TCT engaged an independent valuer J.C.
Rathbone Associates Limited (“JCRA”) to perform valuation of this derivative. Its fair
value was S$269,000 and S$126,000 as at 31 March 2012 and 31 December 2011
respectively and
(iii) The floating to fixed interest rate swap with a notional amount of US$135 million
became effective on 26 January 2012. JCRA performed valuation of this derivative. Its
fair value was S$1,152,000 as at 31 March 2012.
9
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
Footnotes (continued):
7. Trade and other payables (non-current)
Trade and other payables in the non-current liabilities have been accounted for in accordance
with the Sales & Purchase Agreement dated 25 November 2010 for Central Avenue Mall,
which pertains to amounts due to the previous owner as part of the consideration for the
acquisition of Central Avenue Mall and is payable in 2013.
8. Deferred tax liabilities
The deferred tax liabilities in respect of the change in fair value of investment properties
have been accounted for at the prevailing PRC corporate income tax rate of 25%. This is
based on the change in the carrying value of investment properties against their tax base,
including the change in fair value and depreciation charge made in accordance with the PRC
tax rules during the period.
Deferred Tax
As at Recognised As at
st
1 Qtr 2012 1 Jan in profit Exchange 31 Mar
(S$'000) 2012 and loss differences 2012
Group
Investment properties 434,407 2,269 (15,203) 421,473
Convertible bonds 101 121 - 222
434,508 2,390 (15,203) 421,695
Trust
Convertible bonds 101 121 - 222
9. Trade and other payables (current)
The decrease in trade and other payables in the current liabilities was mainly due to a
settlement of S$10,314,000 previously due to a related party of the Trio Holding Company.
10. Consolidated statement of movement in unitholders’ fund is presented in Section 3(c).
10
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
2(b) Aggregate Amount of Borrowings and Debt Securities
(S$'000) 31 Mar 2012 31 Dec 2011
Group Trust Group Trust
Unsecured borrowings
Convertible bonds
- Amount repayable within one year 5,009 5,009 3,218 3,218
- Amount repayable after one year 65,468 65,468 66,275 66,275
Total unsecured borrowings 70,477 70,477 69,493 69,493
Less: Unamortised transaction costs (1,343) (1,343) (1,452) (1,452)
Net balance 69,134 69,134 68,041 68,041
Secured borrowings
Loans
- Amount repayable within one year 56,784 - 69,367 -
- Amount repayable after one year 786,243 - 785,917 -
Total secured borrowings 843,027 - 855,284 -
Less: Unamortised transaction costs (11,074) - (12,313) -
Net balance 831,953 - 842,971 -
Total Borrowings 901,087 69,134 911,012 68,041
11
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
2(c) Collaterals of Secured Borrowings
Property Loan Outstanding Total (a)+(b)
(in millions) (a) (b) SG$
US$ RMB Equivalent
The HQ 297 405 452
Central Plaza 110 64 151
Treasury Building 38 46 57
The HQ Extension - 161 32
Beijing Logistics Park - 160 32
Huai Hai Mall 42 49 63
Central Avenue Mall - 280 56
Total loan balance 487 1,165 843
Unamortised transaction costs (11)
Total net loan balance 832
Footnotes:
1. As collateral for the secured borrowings, the bank loans are secured by legal mortgages
over each specific property, excluding the 3 development sites of Central Avenue Mall,
(collectively, the “Mortgaged Properties”) and pledge of the equity interests in the
property company of the HQ. The equity interests of each of the property companies of
Treasury Building, Central Plaza and Huai Hai Mall are also required to be pledged
using best efforts with the applicable authority. As at 31 March 2012, applications for
the equity interest pledge of each of Treasury Building, Central Plaza and Huai Hai Mall
are ongoing.
2. To minimize the Group’s exposure to adverse interest rate movements on its US$
denominated floating rate loans, the Group has entered into the following hedging
arrangements:
(i) Interest rate cap for US$37.8 million on the Treasury Building loan, effective from
10 December 2011, and
(ii) Interest rate swap for US$55 million on the Central Plaza loan, effective from 22
December 2011, and
(iii) Interest rate swap for US$135 million on the HQ loan, effective from 26 January
2012.
The fair values of the above derivative instruments are based on the valuation
undertaken by an independent professional valuer of financial instruments.
12
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
2(d) Convertible Bonds
Forum convertible bond
On 14 March 2011, TCT issued a convertible bond (“Forum CB”) with a notional amount of
S$59.7 million to finance the Trust’s acquisition of Huai Hai Mall and Central Avenue Mall.
The Forum CB is convertible by the bondholder into Units at a conversion price of S$2.10 at any
time on or after 40 days following 14 March 2011 up to seven business days prior to 17 September
2014 (subject to the satisfaction of certain conditions), or if the Forum CB has been called for
redemption before 17 September 2014, then up to seven business days prior to the date fixed for
redemption thereof. Based on the conversion price of S$2.10 and the issue value of S$59.7 million,
28,428,571 conversion units may be allotted and issued by the Trustee-Manager in the event of the
full conversion of the Forum CB.
Unless previously redeemed (following the exercise of a Delisting/Change of Control Put Right),
converted or purchased and cancelled, the Trustee-Manager will redeem the Forum CB on 17
September 2014.
The Forum CB bears cash interest on the outstanding principal amount of the bond at the rate of
6.0% per annum. The principal amount of a bond plus an additional amount necessary to result in
a yield of 16.75% per annum, compounded semi-annually (less all cash interest paid), shall be
payable upon redemption on 17 September 2014.
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TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
2(d) Convertible Bonds (continued)
Trio convertible notes
On 1 April 2011, TCT issued four tranches of convertible notes (“Trio CB”) with a notional
amount of RMB7.0 million each and a fifth tranche with a notional amount of RMB8.0 million to
finance the Trust’s acquisition of Central Avenue Mall. The aggregate notional amount of the Trio
CB is RMB36.0 million, equivalent to approximately S$6.9 million. The five tranches of
convertible notes have the same interest rate of 6% per annum. The maturity dates of the five
tranches are 1 April 2012, 1 April 2013, 1 April 2014, 1 April 2015 and 1 April 2016, respectively.
Based on the conversion price of S$2.80 and on the basis that the Singapore Dollar equivalent of
the convertible notes is S$6.93 million, 2,475,000 conversion units may be allotted and issued by
the Trustee-Manager in the event of the full conversion of the Trio CB. The convertible notes may
only be converted in the amount set forth once a year on the 30th business day after each
anniversary of 1 April 2011, according to their tranches set out above. In the event of
non-conversion, the Trustee-Manager will redeem each tranche in full on the same 30th business
day after each anniversary of 1 April 2011.
The convertible debt securities which remained outstanding as at 31 March 2012 are set out as
follows:
Finance costs
Aggregate Convertible Derivative amortised using
amount bond reserve financial Finance costs effective interest Conversion
outstanding (in equity) liability paid rates price
S$'000 S$'000 S$'000 S$'000 S$'000 S$
Forum CB 62,273 2,337 - 896 1,736 2.10
Trio CB 6,861 - 88 20 121 2.80
69,134 2,337 88 916 1,857
2(e) Actual Gearing Ratio Compared to Gearing Cap
With outstanding borrowings of S$901 million and consideration payables of S$11 million against
the Group’s total asset value of S$2,660 million, the gearing ratio is 34.3%, compared to the
maximum gearing cap of 45% as stipulated in the Trust Deed.
2(f) Actual Development Ratio Compared to Development Cap
Actual development ratio is 18.7%, compared to the development cap of 30% as stipulated in
Trust Deed.
14
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
3(a) Consolidated Statement of Cash Flows (1st Qtr 2012 & YTD 2012)
(S$'000) 1st Qtr YTD
2012 2012
Operating activities
Profit after tax 8,009 8,009
Equity-settled unit-based expenses 142 142
Depreciation of property, plant and equipment 174 174
Net finance costs 12,726 12,726
Change in fair values of financial derivatives 1,295 1,295
Net foreign exchange gain (15,253) (15,253)
Income tax expense 2,782 2,782
Operating profit before change in working capital 9,875 9,875
Change in working capital:
Change in trade and other receivables 16,907 16,907
Change in trade and other payables (22,306) (22,306)
Cash generated from operating activities 4,476 4,476
Income tax paid (732) (732)
Net cash generated from operating activities 3,744 3,744
Investing activities
Development cost paid on investment properties (11,720) (11,720)
Purchase of plant and equipment (61) (61)
Interest received 77 77
Cash outflows from investing activities (11,704) (11,704)
Financing activities
Proceeds from bank borrowings, net of transaction cost 16,668 16,668
Repayment of bank loan (632) (632)
Interest paid (10,600) (10,600)
Cash inflows from financing activities 5,436 5,436
Net decrease in cash and cash equivalents (2,524) (2,524)
Cash and cash equivalents at the beginning of the period 39,780 39,780
Transfer to restricted cash accounts (2,920) (2,920)
Effect of exchange rate fluctuations on cash held (904) (904)
Cash and cash equivalents as at period end 33,432 33,432
15
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
3(b) Consolidated Statement of Cash Flows (1st Qtr 2012 & 1st Qtr 2011)
(S$'000) 1st Qtr 1st Qtr
2012 2011
Operating activities
Profit after tax 8,009 7,026
Equity-settled unit-based expenses 142 148
Depreciation of property, plant and equipment 174 100
Net finance costs 12,726 7,100
Change in fair values of financial derivatives 1,295 250
Net foreign exchange loss / (gain) (15,253) (9,356)
Income tax expense 2,782 2,284
Operating profit before change in working capital 9,875 7,552
Change in working capital:
Change in trade and other receivables 16,907 (573)
Change in trade and other payables (22,306) (8,649)
Cash generated from operating activities 4,476 (1,670)
Income tax paid (732) (401)
Net cash generated from / (used in) operating activities 3,744 (2,071)
Investing activities
Acquisition of subsidiaries, net of cash acquired - (15,601)
Development cost paid on investment properties (11,720) (2,613)
Purchase of plant and equipment (61) -
Interest received 77 237
Cash outflows from investing activities (11,704) (17,977)
Financing activities
Proceeds from bank borrowings, net of transaction cost 16,668 20,073
Repayment of bank loan (632) -
Proceeds from convertible bonds issued, net of issue cost - 57,402
Distribution payment - (6,408)
Interest paid (10,600) (4,226)
Cash inflows from financing activities 5,436 66,841
Net (decrease) / increase in cash and cash equivalents (2,524) 46,793
Cash and cash equivalents at the beginning of the period 39,780 99,010
Transfer to restricted cash accounts (2,920) (310)
Effect of exchange rate fluctuations on cash held (904) (1,054)
Cash and cash equivalents as at period end 33,432 144,439
16
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
3(c) Consolidated Statement of Movement in Unitholders’ Funds
(S$'000) 1st Qtr 2012 YTD 2012
Non– Non–
Unitholders controlling Unitholders controlling
of the Trust interests Total of the Trust interests Total
Balance at beginning of period 1,170,488 131,312 1,301,800 1,170,488 131,312 1,301,800
Profit after tax 7,710 299 8,009 7,710 299 8,009
Foreign currency translation
differences (59,368) (4,223) (63,591) (59,368) (4,223) (63,591)
Total comprehensive expense (51,658) (3,924) (55,582) (51,658) (3,924) (55,582)
Contribution by and distribution to
owners
Equity-settled unit-based transaction 142 - 142 142 - 142
Transactions with owners in their
capacity as owners 142 - 142 142 - 142
Balance at period end 1,118,972 127,388 1,246,360 1,118,972 127,388 1,246,360
(S$'000) 1st Qtr 2012 1st Qtr 2011
Non– Non–
Unitholders controlling Unitholders controlling
of the Trust interests Total of the Trust interests Total
Balance at beginning of period 1,170,488 131,312 1,301,808 957,422 - 957,422
Profit after tax 7,710 299 8,009 7,026 - 7,026
Foreign currency translation
differences (59,368) (4,223) (63,591) (17,312) - (17,213)
Total comprehensive expense (51,658) (3,924) (55,582) (10,286) - (10,286)
Contribution by and distribution to
owners
Equity-settled unit-based transaction 142 - 142 148 - 148
Distribution to unitholders - - - (6,408) - (6,408)
Transactions with owners in their
capacity as owners 142 - 142 (6,260) - (6,260)
Balance at period end 1,118,972 127,388 1,246,360 940,876 - 940,876
17
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
3(c) Consolidated Statement of Movement in Unitholders’ Funds (continued)
Footnotes:
1. The net movement in the foreign currency translation reserve in 1st Qtr 2012 was due to
foreign exchange differences arising from the translation of RMB financial statements of the
PRC operating subsidiaries into SGD (from S$:RMB = 1:4.848 at 31 December 2011 to
S$:RMB = 1:5.017 at 31 March 2012), compared to the foreign exchange differences of a
smaller extent in 1st Qtr 2011 (from S$:RMB = 1:5.128 at 31 December 2010 to S$:RMB = 1.
5.188 at 31 March 2011).
2. Since the 2nd Qtr 2011, the Trust launched a unit buy-back program to acquire its own units
as part of its ongoing proactive management strategy to provide a strong platform for stable
growth to its unitholders. There were no units acquired and cancelled in the current period of
the unit buy-back program.
3(d) Details of Change in the Total Number of Issued Units
No change in the total number of units issued during the period.
3(e) Earnings per Unit (“EPU”)
1st Qtr 2012 1st Qtr 2011
Earnings per unit based on weighted average
number of units in issue
Weighted average number of units in issue 253,619,717 256,275,067
Basic earnings per unit (cents) 3.0 2.7
Earnings per unit on a fully diluted basis
Weighted average number of units in issue (diluted) 287,100,185 289,923,684
Earnings per unit on a fully diluted basis (cents) 3.0 2.5
3(f) Net Asset Value (“NAV”) per Unit (basic and diluted)
31 Mar 2012 31 Dec 2011
Number of units issued at period end 253,619,717 253,619,717
NAV (S$’000) 1,118,972 1,170,488
Basic NAV per unit (S$) 4.41 4.62
Diluted NAV per unit (S$) 4.14 4.31
18
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
4 Whether the figures have been audited, or reviewed and in accordance with which
standard (e.g. the Singapore Standard on Auditing 910 (Engagement to Review Financial
Statements), or an equivalent standard)
The figures have neither been audited nor reviewed by our auditors.
5 Where the figures have been audited or reviewed, the auditor’s report (including
any qualifications or emphasis of matter)
Not applicable.
6 Whether the same accounting policies and methods of computation as in the
issuer’s most recent audited annual financial statements have been complied with
The Group has applied the same accounting policies and methods of computation in the financial
statements for the current reporting period compared with the audited financial statements for the
year ended 31 December 2011, except for the adoption of accounting standards (including its
consequential amendments) applicable for the financial period beginning 1 January 2012. None of
these are expected to have a significant effect on the financial statements of the Group and the
Trust except for the amendment to FRS 107 Financial Instruments: Disclosures - Transfers to
Financial Assets which will become mandatory for the Group and the Trust’s financial statements
for 2012. The adoption of these amendments would only affect the disclosures made in the
financial statements and there will be no effect on the results and financial position of the Group
and the Trust.
7 If there are any changes in the accounting policies and methods of computation,
including any required by an accounting standard, what has changed, as well as the reasons,
and the effect of, the change
Please refer to Section 6 above.
19
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
8 Review of the performance against 1st Qtr 2011
Consolidated Income Statement
(S$'000) 1st Qtr 2012 1st Qtr 2011 Change (%)
Gross rental income 25,959 19,423
Other income 13 31
Gross revenue1 25,972 19,454 33.5
Business and property related taxes (3,088) (2,436)
Property management fees2 (881) (659)
Other property operating expenses (6,018) (3,905)
Total property operating expenses1 (9,987) (7,000) 42.7
Net property income1 15,985 12,454 28.4
Trustee-Manager’s fees2,3 (4,059) (3,302)
Administrative expenses4 (2,052) (1,600)
Finance income 77 237
Finance costs5 (9,835) (5,214)
Net profit before change in fair values of 116 2,575
investment properties and financial derivatives,
and net foreign exchange differences
Depreciation & amortisation charges (174) (100)
Unit option cost (142) (148)
Net foreign exchange gain6 15,253 9,356
Change in fair values of financial derivatives (1,295) (250)
Finance costs5 - Forum CB and Trio CB
amortized using effective interest rate (1,857) (154)
Finance costs - amortisation of transaction costs7 (1,110) (1,969)
Profit before tax 10,791 9,310
Income tax expense - Current tax (392) (401)
- Deferred tax (2,390) (1,883)
Total profit after tax 8,009 7,026
Total profit attributable to:
Unitholders of the Trust 7,710 7,026
Non-controlling interests 299 -
Total profit after tax 8,009 7,026
20
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
8 Review of the performance against 1st Qtr 2011 (Continued)
Footnotes:
1. Gross revenue, total property operating expenses and net property income
The increases in gross revenue and total property operating expenses were attributable to
the assets acquired over the prior year. The Trust acquired Central Avenue Mall (55%
equity interest) and Huai Hai Mall (100% owned) in 2nd Qtr 2011. The table below
presents the analysis of net property income in RMB.
(i) Net property income statement
(RMB’000) 1st Qtr 1st Qtr
2012 2011
Actual Actual Change (%)
Rental Income:
The HQ 72,761 70,558
Central Plaza 26,377 21,641
Treasury Building 9,298 7,771
Central Avenue Mall 14,510 -
Huai Hai Mall 6,459 -
Gross rental income 129,405 99,970 29.4
Other income 67 160 (58.1)
Property operating expenses:
Business and property related tax (15,394) (12,558)
Property management fees (4,394) (3,399)
Other property operating expenses (29,999) (20,130)
Total property operating
expenses (49,787) (36,087) 38.0
Net property income 79,685 64,043 24.4
The increase in property operating expenses between 1st Qtr 2012 and 1st Qtr 2011 was
mainly due to the impact of newly acquired assets.
(ii) Summary of Other property operating expenses
(RMB’000) 1st Qtr 1st Qtr
2012 2011
Actual Actual Change (%)
Utility expenses (12,701) (9,547)
Cleaning expenses (1,823) (504)
Property management services* (4,650) (2,495)
Repairs & maintenance (1,569) (89)
Leasing commission, marketing
and legal expenses (4,881) (4,593)
Other expenses (4,375) (2,902)
Total other property operating
expenses (29,999) (20,130) 49.0
* The property management services fees were related to expenses paid/payable to
non-related external service providers.
21
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
8 Review of the performance against 1st Qtr 2011 (Continued)
Footnotes (continued):
2. Property management fees and Trustee-Manager’s fees are payable to subsidiaries of
Treasury Holdings China Limited, a wholly owned subsidiary of a company that is
wholly owned by significant unitholders of TCT.
3. The increase in Trustee-Manager’s fees was in line with the increase in size of the
portfolio under management of the Trustee-Manager.
4. Administrative expenses
(S$’000) 1st Qtr 1st Qtr
2012 2011
Actual Actual Change (%)
Bank service charges (550) (474)
Property management service expenses* (626) (551)
Professional fees** (376) (236)
Others (500) (339)
Total administrative expenses (2,052) (1,600) 28.3
* Property management service expenses represented the actual costs incurred by the
property manager in rendering the property management services. The expenses
were reimbursed, at cost with no mark-up, to the property manager, a subsidiary of
Treasury Holdings China Limited, a wholly owned subsidiary of a company that is
wholly owned by significant unitholders of TCT.
** Professional fees mainly comprised expenses for legal, valuation and audit
services.
5. The increase in finance costs was mainly due to the drawdown of bank loans and
issuance of Trio convertible notes to fund the newly acquired assets.
6. Net foreign exchange gain in 1st Qtr 2012 was due mainly to the foreign currency gain
arising from the revaluation of the USD denominated loan as a result of the appreciation
of the Singapore dollar against the US dollar (from US$:S$ =1:1.2987 at 31 December
2011 to US$:S$ = 1:1.2610 at 31 March 2012), compared to the that in 1st Qtr 2011 of a
smaller extent (from US$:S$ = 1:1.2853 at 31 December 2010 to US$:S$ = 1:1.2642 at
31 March 2011).
7. The decrease in finance costs, comprising mainly amortisation of transaction costs, was
due to lesser amount of loan arrangement fees and other ancillary costs incurred on bank
loans secured in 2011 as compared to those incurred in 2010.
22
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
9 Commentary on the competitive conditions of industry in which the Trust and its
investees operate and any known factors or events that may affect the Trust and its investees
in the next reporting period and the next 12 months
China’s economy expanded 8.1% from a year earlier, the slowest pace in almost three years,
however, such growth was still above the 7.5% target set by the government and a bright spot in
world’s struggling economy. (Source: National Bureau of Statistics)
Consumption continues to play a significant role in China’s economy as shown by the breakdown
of Q1 2012 GDP growth, with domestic consumption contributing 76.5% to economic growth,
jumping sharply from 51.6% in 2011. The growth of total retail sales, one of the proxies for
consumption, increased 15.2% year-on-year (“YoY”) in March from 14.7% YoY in the first two
months. Meanwhile, household income still registered solid growth during the period to support
the strong performance of the retail sector. Urban disposable income per capita increased by
14.0% YoY and rural annual income per capita grew even faster by 17.0% YoY in Q1 2012.
(Source: National Bureau of Statistics)
China’s CPI inflation rose to 3.6% YoY in March, and whilst an increase over the February 2012
figure of 3.2% YoY still remains well under the government’s 2012 target of 4.0%. The reduction
in inflation from 2011 which recorded 5.4% for the year, is providing the government with the
flexibility to implement policy easing to support economic growth. This is evidenced by an
increase in lending for March 2012 which totalled RMB1.01 trillion, the highest level for 14
months and an indicator of a policy shift towards a moderate pro-growth stance. (Source: National
Bureau of Statistics and People’s Bank of China)
With regard to the commercial real estate market, Shanghai Grade A office market stabilized in the
first quarter though some tenants, especially MNCs, suspended their expansion or relocation plans
due to economic concerns. Overall average rents for Grade A office space rose to RMB
8.9/sqm/day, an increase of 1.2% q-o-q, while in Puxi (location of all TCT assets), the rents
remained flat at RMB 9.1/sqm/day owing to slower leasing demand. The supply was still tight as
no new projects were completed in the CBD area, and overall vacancy thus fell to 4.9% in Puxi
and 6.1% in Pudong respectively. Rental growth for full year is projected to be 7%-8%. (Source:
Jones Lang LaSalle)
The Shanghai retail market continued its positive momentum as leasing transactions remained
active, driven by expansion demand from mid-range fashion retailers and continuing growth in
retail sales. Average ground floor rents in the prime market edged up 0.6% q-o-q to RMB
46.5/sqm/day with the vacancy rate falling by 0.7% to 2.4% in prime areas. Q1 2012 has
witnessed more retail projects in the city upgrading or repositioning their tenant mix to attract
more foot traffic by increasing F&B and fast fashion tenants. For example, Brilliance Xuhui
Shopping Center, within close proximity to TCT’s Treasury Building re-opened with 100%
occupancy, under-pinned by the flagship stores established by Gap, H&M, C&A, and Ochirly. In
addition, current pre-leasing of K11 (formerly Hong Kong New World) is expected to push up the
rents along Huaihai Road where TCT’s Huai Hai Mall is located. (Source: Jones Lang LaSalle,
Savills)
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TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
10 Distribution
10(a) Current financial period:
Any distributions declared for the current financial period?
No.
10(b) Corresponding period of the preceding financial period:
Any distributions declared for the corresponding period of the immediate preceding
financial period?
No.
10(c) Date payable:
Not available.
10(d) Book closure date:
Not applicable.
10(e) If no distribution has been declared/recommended, a statement to that effect:
Not applicable.
11 If the Trust has obtained a general mandate from unitholders for IPTs, the
aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate
has been obtained, a statement to that effect
The Trust has not obtained a general mandate from unitholders for Interested Person Transactions.
24
TREASURY CHINA TRUST
2012 FIRST QUARTER UNAUDITED FINANCIAL STATEMENTS
& DISTRIBUTION ANNOUNCEMENT
12 Confirmation Pursuant to Rule 705(5) of the Listing Manual
To the best of our knowledge, nothing has come to the attention of the Board of Directors of the
Trustee-Manager of Treasury China Trust (the “Trustee-Manager”) which may render the financial
results of the Group and Trust (comprising the statements of financial position as at 31 March
2012 and the consolidated income statement, consolidated statement of cash flows and
consolidated statement of changes in Unitholders’ funds for the three months ended 31 March
2012, together with their accompanying notes), to be false or misleading in any material respect.
On behalf of the Board of the Trustee-Manager
Richard David
Chief Executive Officer/Director
BY ORDER OF THE BOARD
Treasury Holdings Real Estate Pte. Ltd
(as Trustee-Manager of Treasury China Trust)
(Company registration no. 201003233M)
Richard David
Director and CEO
30 April 2012
IMPORTANT NOTICE
The value of units (“Units”) in Treasury China Trust (“TCT”) and the income derived from them may fall as well as rise.
Units are not obligations of, deposits in, or guaranteed by, TCT, the Trustee-Manager, or any of its affiliates. The past
performance of TCT is not indicative of the future performance of TCT.
Certain statements in this announcement constitute “forward-looking statements”. Such forward-looking statements
and financial information are based on numerous assumptions regarding TCT’s present and future business, and its
strategies and the environment in which TCT will operate in the future. Such forward-looking statements and
financial information involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of TCT, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements and financial information. .
These forward-looking statements and financial information speak only as at the date of this announcement. TCT
expressly disclaims any obligation or undertaking to release publicly any updates of or revisions to any forward-looking
statement or financial information contained herein to reflect any change in TCT’s expectations with regard thereto or
any change in events, conditions or circumstances on which any such statement or information is based, subject to
compliance with all applicable laws and regulations and/or the rules of the SGX-ST and/or any other relevant
regulatory or supervisory body or agency.
25
