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Managed by. ARA Asset Management (Fortune) Limited OVERSEAS REGULATORY ANNOUNCEMENT

The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing, The Stock Exchange of Hong Kong and Hong Kong Securities Clearing Company take no responsibility for the contents of
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The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing, The Stock Exchange of Hong Kong and Hong Kong Securities Clearing Company take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Fortune Real Estate Investment Trust (a Hong Kong collective investment scheme authorized under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) (Stock Code: 778) Managed by ARA Asset Management (Fortune) OVERSEAS REGULATORY ANNOUNCEMENT This overseas regulatory announcement is issued pursuant to paragraph 10.3 of the Code on Real Estate Investment Trusts published by the Securities and Futures Commission of Hong Kong. Please refer to the attached announcement on the next page issued on the Singapore Exchange Securities Trading by Fortune REIT on 25 January Hong Kong, 25 January 2011 By order of the board of directors of ARA Asset Management (Fortune) (in its capacity as manager of Fortune Real Estate Investment Trust) ANG Meng Huat, Anthony Executive Director and Chief Executive Officer The Directors of the Manager as at the date of this announcement are Mr. Chiu Kwok Hung, Justin (Chairman), Mr. Lim Hwee Chiang, Mr. Ip Tak Chuen, Edmond and Ms. Eirene Yeung as Non-executive Directors; Mr. Ang Meng Huat, Anthony and Ms. Chiu Yu, Justina as Executive Directors; Mr. Lim Lee Meng, Mrs. Sng Sow-Mei (alias Poon Sow Mei) and Mr. Lan Hong Tsung, David as Independent Non-executive Directors; and Mr. Ma Lai Chee, Gerald as Alternate Director to Mr. Ip Tak Chuen, Edmond. Fortune Real Estate Investment Trust Financial Statements For the financial year ended 31 December 2010 These figures have not been audited but have been reviewed by our auditors. Fortune Real Estate Investment Trust ( Fortune REIT ) is a real estate investment trust constituted by a Trust Deed entered into on 4 July 2003 (as amended) made between ARA Asset Management (Fortune), as the Manager of Fortune REIT, and HSBC Institutional Trust Services (Singapore), as the Trustee of Fortune REIT. Fortune REIT was listed on the Singapore Exchange Securities Trading and the The Stock Exchange of Hong Kong ( SEHK ) on 12 August 2003 and 20 April 2010 respectively. Fortune REIT holds a portfolio of fourteen retail properties in Hong Kong, spread across Kowloon and the New Territories, comprising approximately 2.0 million square feet of retail space and 1,660 car parking lots. The retail properties are City One Shatin Property, Ma On Shan Plaza, Metro Town, The Metropolis Mall, Waldorf Garden Property, Caribbean Bazaar, Smartland, Tsing Yi Square Property, Jubilee Court Shopping Centre, The Household Center, Centre de Laguna Property, Hampton Loft, Lido Garden Property and Rhine Garden Property. They house tenants from diverse trade sectors such as supermarkets, food and beverage outlets, banks, real estate agencies, and education providers. 1 1 (a) (i) Statement of comprehensive Income (for the Group) together with a comparative statement for the corresponding period of the immediately preceding financial year HK$ '000 % HK$ '000 % Actual Actual Increase/ Actual Actual Increase/ 1/10/10 to 1/10/09 to (Decrease) 1/1/10 to 1/1/09 to (Decrease) 31/12/10 (a) 31/12/09 (a) 31/12/10 (a) 31/12/09 (a) Revenue (b) 176, , % 676, , % Charge-out collections (c) 41,386 37, % 160, , % Total revenue 217, , % 837, , % Property management fees (5,024) (4,607) 9.1% (19,265) (16,190) 19.0% Other property operating expenses (d) (55,640) (53,081) 4.8% (202,716) (175,205) 15.7% Property operating expenses (60,664) (57,688) 5.2% (221,981) (191,395) 16.0% Net property income (before manager's 157, , % 615, , % performance fee) Manager s performance fee (4,712) (4,258) 10.7% (18,458) (15,299) 20.7% Net property income 152, , % 596, , % Change in fair value of properties (e) 848, , % 1,760, , % Change in fair value of financial instruments (f) 21,491 - NM (54,879) - NM Net property income before finance costs 1,021, , % 2,302,922 1,300, % Borrowing costs (26,379) (23,378) 12.8% (109,750) (88,159) 24.5% Profit before tax 995, , % 2,193,172 1,212, % Hong Kong taxation : Current taxation (16,466) (13,941) 18.1% (62,741) (50,528) 24.2% Deferred taxation (3,349) (4,735) (29.3%) (15,174) (15,551) (2.4%) Total Hong Kong taxation (19,815) (18,676) 6.1% (77,915) (66,079) 17.9% Net profit of property companies 975, , % 2,115,257 1,146, % Manager's base fee (10,057) (8,696) 15.7% (37,246) (28,446) 30.9% Foreign exchange gain/(loss) (g) 114 (44) (358.1%) % Non-tax deductible trust expenses (h) (6,159) 2,470 (349.3%) (56,230) (2,515) NM Tax deductible trust expenses (767) (668) 14.7% (3,439) (3,187) 7.9% Non tax-exempt income (i) NM % Singapore taxation (52) - NM (156) (122) 27.1% Total trust expenses (16,615) (6,938) 139.5% (95,958) (33,517) 186.3% Net profit of Group, before transactions with unitholders 959, , % 2,019,299 1,113, % Distributions to unitholders (j) Brought forward from previous quarters (79) - NM - - NM Current period (105,661) - NM (406,487) - NM Net profit of Group, after transactions with unitholders 853, , % 1,612,812 1,113, % Net profit of Group, before transactions with unitholders 959, , % 2,019,299 1,113, % Add/(Less): Manager's base fee 10,057 8, % 37,246 28, % Foreign exchange (gain)/loss (g) (114) 44 (358.1%) (190) (25) 657.1% Non-tax deductible trust expenses (h) 6,159 (2,470) (349.3%) 56,230 2,515 NM Change in fair value of financial instruments (f) (21,491) - NM 54,879 - NM Change in fair value of properties (e) (848,067) (525,001) 61.5% (1,760,977) (806,283) 118.4% Income available for distribution (k) 105,661 94, % 406, , % 2 Footnotes: (a) The Group s financial information incorporates the financial statements of the Trust and the 14 Property Companies. (b) Revenue includes rental income, car park income, license income, atrium income and others. (c) Charge-out collections consist of expenses related to the operation of the properties that are payable by tenants and licensees and these expenses include air conditioning charges, management fees, promotional charges, government rents, utility charges, cleaning charges and government rates. (d) Included in the other property operating expenses for the period 1 January 2010 to 31 December 2010 is an allowance for doubtful debts of HK$0.003 million (2009: HK$2.1 million). (e) On 31 December 2010, an independent valuation was undertaken by Savills Valuation and Professional Services. The firm is an independent valuer having appropriate professional qualifications and experiences in the location and category of the properties being valued. The valuations for the fourteen properties were based on a combination of the Investment Method and Direct Comparison Method. The valuations adopted amounted to HK$13,300 million (31 December 2009: HK$11,500 million). (f) The amount relates to the gain/loss arising from the re-measurement of the plain vanilla interest rate swaps which were not designated for hedge accounting as at 31 December (g) Foreign exchange gain/loss represents realised and unrealised foreign exchange differences. The unrealised exchange difference arose from translation of monetary assets and liabilities denominated in foreign currencies into Hong Kong dollars at rates of exchange ruling at the end of the reporting period. The realised exchange difference arose from the settlement of foreign currencies payables at the transaction dates. All exchange differences are included in the statement of comprehensive income. (h) Included in the non-tax deductible trust expenses for the period 1 January 2010 to 31 December 2010 is a provision of HK$30.0 million for the cost of the dual primary listing on The Stock Exchange of Hong Kong (2009: Nil) as well as the amortization of debt front end fee of HK$22.2 million (2009: HK$8.0 million). (i) Non tax-exempt income refers mainly to interest income from fixed deposits. (j) The amount of distribution to unitholders has been distributed and/or accrued as distribution payable in the Statement of Financial Position. Due to the dual primary listing in Hong Kong, the presentation of Statement of Comprehensive Income is revised to comply with the requirements of the Code on Real Estate Investment Trust ( REIT Code ) published by The Securities and Futures Commission in Hong Kong. (k) Fortune REIT s distribution policy is to distribute to Unitholders on a semi-annual basis, the higher of (i)100.0% of its tax-exempt income (except dividends paid out of interest income and gains, if any, which are distributable at the discretion of the Manager) after deduction of applicable expenses ( net Tax-Exempt Income ); and (ii) 90% of consolidated audited net profit after tax for the relevant financial year adjusted to eliminate the effects of certain adjustments in accordance with the REIT Code. (l) There is no investment income, write-off for stock obsolescence, impairment in the value of investments, profit on sale of investments, properties or plant and equipment, exceptional and extraordinary items during the financial period and the previous corresponding financial period. 3 1 (a) (ii) Statement of other comprehensive income (for the Group) together with a comparative statement for the corresponding period of the immediately preceding financial year HK$ '000 % HK$ '000 % Actual Actual Increase/ Actual Actual Increase/ 1/10/10 to 1/10/09 to (Decrease) 1/1/10 to 1/1/09 to (Decrease) 31/12/10 31/12/09 31/12/10 31/12/09 Net profit of Group 853, , % 1,612,812 1,113, % Other comprehensive income: Cash flow hedge (a) - 12,770 (100.0%) 27,097 37,407 (27.6%) Total comprehensive income 853, , % 1,639,909 1,150, % Footnote: (a) There is no tax effect relating to the component of the other comprehensive income. 4 1 (b)(i) Statement of financial position, together with a comparative statement as at the end of the immediately preceding financial year Trust Group (a) HK$ '000 HK$ '000 Actual Actual Actual Actual 31/12/10 31/12/09 31/12/10 31/12/09 Current assets Cash and bank balances 457, , , ,341 Trade and other receivables 58,419 85,721 63,241 47,619 Total current assets 516, , , ,960 Non-current assets Investment in property companies 5,470,134 5,470, Investment properties (b) ,300,000 11,500,000 Fixed assets Total non-current assets 5,470,134 5,470,134 13,300,000 11,500,044 Total assets 5,986,309 6,029,088 13,869,314 12,063,004 Current liabilities Trade and other payables 5,907 16, , ,474 Distribution payable (c) 201, ,995 - Borrowings ,000 2,786,286 Derivative liability (d) ,097 Provision for taxation 1,244 2,849 8,977 7,079 Total current liabilities 209,146 19, ,719 3,096,936 Non-current liabilities Borrowings - - 2,772,448 - Deferred tax liabilities , ,991 Derivative liability (d) , Total non-current liabilities - - 2,975, ,406 Total liabilities 209,146 19,795 3,535,626 3,230,342 Net assets attributable to unitholders 5,777,163 6,009,293 10,333,688 8,832,662 Unitholders fund Equity and reserves (1) - 6,009,293-8,832,662 Note: (1) Due to the dual primary listing in Hong Kong, the presentation of Statement of Financial Position is revised to comply with the requirements of the REIT Code. 5 Footnotes: (a) (b) The Group s financial information incorporates the financial statements of the Trust and the 14 Property Companies. Investment properties are stated at valuation based on an independent professional valuation carried out by Savills Valuation and Professional Services, the independent valuer on 31 December During the period, minor capital costs were incurred and included in the investment properties value. (c) Distribution payable is the amount of income available for distribution accrued from 1 July 2010 to 31 December This is to comply with the REIT Code after the dual primary listing in Hong Kong, and for Fortune REIT s distribution policy please refer to footnote (j) of section 1(a)(i). (d) The derivative liability relates to the fair value of the plain vanilla interest rate swaps transacted to hedge the interest rate risk on the term loan. 1 (b)(ii) Aggregate amount of borrowings As at 31/12/10 Secured (a) Unsecured HK$ '000 HK$ '000 Amount repayable in one year or less, or on demand 79,000 - Amount repayable after one year 2,772,448-2,851,448 - As at 31/12/09 Secured (a) Unsecured HK$ '000 HK$ '000 Amount repayable in one year or less, or on demand 2,786,286 - Amount repayable after one year - - 2,786,286 - Footnote: (a) Fortune REIT has in place a term loan and revolving credit facility of a total of HK$3,100.0 million. As at 31 December 2010, HK$2,907.7 million had been drawdown. Included in the amount repayable after one year is a debt front end fee of HK$56.3 million (31 December 2009: HK$78.4 million). The Facility is secured by, inter alia, a mortgage over City One Shatin Property, Ma On Shan Plaza, The Metropolis Mall, Smartland, Tsing Yi Square Property, The Household Center, Centre de Laguna Property, Lido Garden Property and Rhine Garden Property. 6 1 (c) Statement of cash flows Group Group HK$ '000 HK$ '000 HK$ '000 HK$ '000 Actual Actual Actual Actual 1/10/10 to 31/12/10 1/10/09 to 31/12/09 1/1/10 to 31/12/10 1/1/09 to 31/12/09 Operating Activities Profit before taxation 978, ,338 2,097,370 1,179,389 Adjustments for: Change in fair value of properties (848,067) (525,001) (1,760,977) (806,283) Change in fair value of derivative liabilities (21,491) - 54,879 - Amortisation of debt front end fee 5,037 5,205 22,162 8,223 Depreciation Allowance for doubtful debts ,138 Base fee paid in units 10,057 8,696 37,246 28,446 Interest income (306) - (923) (728) Borrowing costs 26,379 23, ,750 88,159 Operating profit before changes in working capital 150, , , ,418 (Increase)/decrease in trade and other receivables (3,841) (1,112) (15,625) 1,861 (Decrease)/Increase in trade and other payables (11,796) 36,192 (6,727) 47,221 Cash generated from operating activities 134, , , ,500 Income taxes paid (59,616) (66,286) (60,999) (66,286) Cash flows from operating activities 75, , , ,214 Investing Activities Upgrading of investment properties (15,247) (28,798) (39,023) (52,717) Interest received Increase in bank deposits - - (80,000) - Acquisition of property companies/properties, net of cash acquired - (2,002,743) - (2,002,743) Cash flow used in investing activities (14,941) (2,031,541) (118,100) (2,054,732) Financing Activities Proceeds from issue of new units (net of issue costs) - 1,810,867-1,810,867 Distribution paid - - (380,621) (313,610) Repayment of borrowings - - (51,000) - Drawdown of borrowings 79, ,000 94, ,000 Payment of debt front end fee - (80,600) - (80,600) Borrowing costs paid (26,379) (23,378) (109,750) (88,159) Cash flow used in financing activities 52,621 2,222,889 (447,371) 1,844,498 Net increase/(decrease) in cash and cash equivalents 113, ,777 (89,268) 271,980 Cash and cash equivalents at beginning of the period 313, , , ,361 Cash and cash equivalents at end of the period 426, , , ,341 Represented by: Cash at bank and in hand 307, , , ,341 Fixed deposits with maturity date less than 3 months 119, , , , , ,341 7 1 (d)(i) Statement of changes in net assets attributable to unitholders Statement for the fourth quarter FY2010 Group Actual Issued Units Unit issue costs Hedging reserve Accumulated profits Net HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Balance as at 1 October ,335,529 (271,593) (415) 3,406,733 9,470,254 Total comprehensive income , ,377 Creation of units -management fee paid/payable in units 10, ,057 Increase in net assets resulting from 10, ,057 Balance as at 31 December ,345,586 (271,593) (415) 4,260,110 10,333,688 Balance as at 1 October ,390,281 (173,097) (40,282) 2,209,765 6,386,667 Total comprehensive income , , ,432 Creation of units -proceeds from issuance of New Units 1,888, ,888,973 - unit issue costs - (98,496) - - (98,496) - acqusition fee paid in units 20, ,390 -management fee paid/payable in units 8, ,696 Increase in net assets resulting from 1,918,059 (98,496) - - 1,819,563 Balance as at 31 December ,308,340 (271,593) (27,512) 2,823,427 8,832,662 Statement for the YTD FY2010 Group Actual Unit issue Accumulated Issued Units costs Hedging reserve profits Net HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Balance as at 1 January ,308,340 (271,593) (27,512) 2,823,427 8,832,662 Total comprehensive income ,097 1,612,812 1,639,909 Creation of units -management fee paid/payable in units 37, ,246 Distribution paid to Unitholders (176,129) (176,129) Increase (Decrease) in net assets resulting from 37, (176,129) (138,883) Balance as at 31 December ,345,586 (271,593) (415) 4,260,110 10,333,688 Balance as at 1 January ,370,531 (173,097) (64,919) 2,023,849 6,156,364 Total comprehensive income ,407 1,113,188 1,150,595 Creation of units -proceeds from issuance of New Units 1,888, ,888,973 - unit issue costs - (98,496) - - (98,496) - acqusition fee paid in units 20, ,390 -management fee paid/payable in units 28, ,446 Distribution paid to Unitholders (313,610) (313,610) Increase (Decrease) in net assets resulting from 1,937,809 (98,496) - (313,610) 1,525,703 Balance as at 31 December ,308,340 (271,593) (27,512) 2,823,427 8,832,662 8 Actual Accumulated Statement for the fourth quarter FY2010 Issued Units Unit issue costs profits Net HK$'000 HK$'000 HK$'000 HK$'000 Trust Balance as at 1 October ,335,529 (271,593) (377,503) 5,686,433 Total comprehensive income ,673 80,673 Creation of units -management fee paid/payable in units 10, ,057 Increase in net assets resulting from 10, ,057 Balance as at 31 December ,345,586 (271,593) (296,830) 5,777,163 Balance as at 1 October ,390,281 (173,097) (175,886) 4,041,298 Total comprehensive income , ,432 Creation of units -proceeds from issuance of New Units 1,888, ,888,973 - unit issue costs - (98,496) - (98,496) - acqusition fee paid in units 20, ,390 -management fee paid/payable in units 8, ,696 Increase in net assets resulting from 1,918,059 (98,496) - 1,819,563 Balance as at 31 December ,308,340 (271,593) (27,454) 6,009,293 Actual Accumulated Statement for YTD FY2010 Issued Units Unit issue costs profits Net HK$'000 HK$'000 HK$'000 HK$'000 Trust Balance as at 1 January ,308,340 (271,593) (27,454) 6,009,293 Total comprehensive loss - - (93,247) (93,247) Creation of units -management fee paid/payable in units 37, ,246 Distribution paid to Unitholders - - (176,129) (176,129) Increase (Decrease) in net assets resulting from 37,246 - (176,129) (138,883) Balance as at 31 December ,345,586 (271,593) (296,830) 5,777,163 Balance as at 1 January ,370,531 (173,097) 1,224 4,198,658 Total comprehensive income , ,932 Creation of units -proceeds from issuance of New Units 1,888, ,888,973 - unit issue costs - (98,496) - (98,496) - acqusition fee paid in units 20, ,390 -management fee paid/payable in units 28, ,446 Distribution paid to Unitholders - - (313,610) (313,610) Increase (Decrease) in net assets resulting from 1,937,809 (98,496) (313,610) 1,525,703 Balance as at 31 December ,308,340 (271,593) (27,454) 6,009,293 9 1 (d)(ii) Details of any changes in the units since the end of the previous period reported on Date Units Issued Purpose As at 1 October ,666,597,743 Total units since the end of previous financial period 7 October ,434,504 As payment of management fee for the period from 1 July 2010 to 30 September 2010 As at 31 December ,669,032,247 5 January 2011 (a) 2,567,653 As payment of management fee for the period from 1 October 2010 to 31 December 2010 Deemed units as at 31 December ,671,599,900 Footnote: (a) On 5 January 2011, there was an additional 2,567,653 units issued to the Manager as payment of management fee for the period from 1 October 2010 to 31 December Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore St
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