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EC World Real Estate Investment Trust ANNUAL REPORT 2016
NOTES TO THE
Financial Statements
For the Financial Year ended 31 December 2016
1.
General information (continued)
(e) Fees under the Property Management Agreement (continued)
(iii) Project management fee
The Property Manager is entitled to a project management fee based on the following development
or redevelopment (if not prohibited by the Property Funds Appendix or if otherwise permitted by MAS),
refurbishment, retrofitting, addition and alteration or renovation works to the relevant property:
•
a fee of 3.25% of the construction costs, where the construction costs are RMB10.0 million;
•
a fee of 3.0% of the construction costs, where the construction costs exceed RMB10.0 million
but do not exceed RMB100.0 million;
•
a fee of 2.75% of the construction costs, where the construction costs exceed RMB100.0 million
but do not exceed RMB250.0 million; and
•
a fee to be mutually agreed by the Manager, the Trustee and the Property Manager, where the
construction costs exceed RMB250.0 million.
The project management fees will be paid in the form of cash or/and Units (as the Manager may in its
sole discretion to determine).
2.
Significant accounting policies
2.1 Basis of preparation
The financial statements have been prepared for the financial year ended 31 December 2016, with comparative
period from 5 August 2015 (date of constitution) to 31 December 2015.
The financial statements have been prepared in accordance with the recommendations of the Statement of
Recommended Accounting Practice 7 (“RAP 7”) “Reporting Framework for Unit Trusts” issued by the Institute of
Singapore Chartered Accountants (“ISCA”), the applicable requirements of the Code on Collective Investment
Schemes (“CIS”) issued by Monetary Authority of Singapore (“MAS”) and the provisions of the Trust Deed. RAP
7 requires that accounting policies adopted should generally comply with the recognition and measurement
principles of Singapore Financial Reporting Standards (“FRS”).
The financial statements are expressed in Singapore Dollars (“S$ and SGD”) and has been rounded to the nearest
thousand, unless otherwise stated.
The financial statements are prepared on the historical cost basis, except as disclosed in the accounting policies
below.
The preparation of these financial statements in conformity with RAP 7 requires Management to exercise its
judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical
accounting estimates and assumptions. Information about an area involving a higher degree of judgment, where
assumptions and estimates are significant to the financial statements, is disclosed in Note 14 – Investment
properties. The assumptions and estimates were used by the independent valuers in arriving at their valuations.