EC World REIT - Annual Report 2016

EC World Real Estate Investment Trust ANNUAL REPORT 2016

NOTES TO THE

Financial Statements

For the Financial Year ended 31 December 2016

Significant accounting policies (continued)

2.15 Currency translation (continued)

The results and financial position of all the group entities (none of which has the currency of a

hyperinflationary economy) that have a functional currency different from the presentation currency are

translated into the presentation currency as follows:

(i)

Assets and liabilities are translated at the closing rates at the reporting date;

(ii)

Income and expenses are translated at average exchange rates (unless the average is not a reasonable

approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case

income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting currency translation differences are recognised in other comprehensive income and

accumulated in the currency translation reserve. These currency translation differences are reclassified

to the Statement of Total Return on disposal or partial disposal of the entity giving rise to such reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and

liabilities of the foreign operations and translated at the closing rates at the reporting date.

2.16 Units and unit issuance expenses

Proceeds from the issuance of Units in ECW are recognised as Unitholders’ funds. Incremental costs directly

attributable to the issuance of new Units are deducted directly from the net assets attributable to the Unitholders.

2.17 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Management

who is responsible for allocating resources and assessing performance of the operating segments.

2.18 Distribution policy

ECW’s distribution policy is to distribute, on a semi-annual basis, 100% of its distributable income for the period

from the Listing Date to 31 December 2017. Thereafter, at least 90% of its distributable income on semi-annual

basis. The actual level of distribution will be determined at the Manager’s discretion, having regard to ECW’s

funding requirements, other capital management considerations and the overall stability of distributions.