TICON Freehold and Leasehold Real Estate Investment Trust Review report and interim financial statements For the three-month and nine-month periods ended 30 September 2016 Independent Auditor’s Report on Review of Interim Financial Information To the Unitholders of TICON Freehold and Leasehold Real Estate Investment Trust
I have reviewed the accompanying balance sheet, including the details of investments of TICON Freehold and Leasehold Real Estate Investment Trust as at 30 September 2016, the related statements of income for the three-month and nine-month periods ended 30 September 2016, changes in net assets, cash flows and significant financial information for the nine-month period then ended, as well as the condensed notes to the financial statements. The Trust Manager is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34 Interim Financial Reporting. My responsibility is to express a conclusion on this interim financial information based on my review.
Scope of Review
I conducted my review in accordance with Thai Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion.
Conclusion
Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34 Interim Financial Reporting.
Chayapol Suppasedtanon Certified Public Accountant (Thailand) No. 3972
EY Office Limited Bangkok: 8 November 2016
TICON Freehold and Leasehold Real Estate Investment Trust Balance sheet As at 30 September 2016 (Unit: Thousand Baht)
Note 30 September 2016 31 December 2015 (Unaudited (Audited) but reviewed)
Assets Investments Investments in properties at fair value (at cost 30 September 2016: Baht 7,387.3 million and 31 December 2015: Baht 7,387.3 million) 6 7,351,650 7,260,760 Investments in securities at fair value (at cost 30 September 2016: Baht 270.5 million and 31 December 2015: Baht 310.3 million) 270,526 310,271 Cash and cash at banks 7 17,253 3,296
Accounts receivable
From rental and service 8, 15 57,108 45,560
From interest 15 887 368
Other 3,613 2,983
Deferred expenses 9 55,779 61,759
Other assets 15 7,895 2,440
Total assets 7,764,711 7,687,437 Liabilities Accrued expenses 15 42,422 39,875
Withholding taxes payable 6,488 53,243
Deposits from rental and service 155,881 169,698
Long-term loans 10, 15 1,819,000 1,819,000
Other liabilities 2,761 4,306
Total liabilities 2,026,552 2,086,122 Net assets 5,738,159 5,601,315
Net assets: Trust registered and capital from the unitholders 5,542,063 5,542,063 Retained earnings 11 196,096 59,252
Net assets 5,738,159 5,601,315 - - Net asset value per unit (Baht) 10.1237 9.8823
Number of units issued - end of period (Thousand units) 566,800 566,800
The accompanying notes are an integral part of the financial statements.
(Mr.Peerapat Srisukont) Managing Director TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments
As at 30 September 2016
Details of investments classified by asset type
30 September 2016 31 December 2015
(Unaudited but reviewed) (Audited)
Type of investments/ Factory / warehouse Percentage Percentage
Land title deed Area Locations building no. Fair value of investments Fair value of investments
(Rai-Ngan-Sq. Wah) (Thousand Baht) (%) (Thousand Baht) (%)
Investments in properties
Leasehold on land and freehold on warehouses
29466 7-0-46 TICON Logistics Park Bangna DG1/1 111,590 1.46 109,290 1.44
Bang Wua Sub-district, Bang Pakong District, DG1/2
Chachoengsao Province DG1/3
DG1/4
28339 12-0-68 TICON Logistics Park Bangna M2/1 60,050 0.79 59,359 0.78
Bangsamak Sub-district, Bang Pakong District M2/2
Chachoengsao Province M2/3 22,330 0.29 23,764 0.31
M2/4 29,120 0.38 28,745 0.38
M2/5 28,400 0.37 28,123 0.37
M2/6 29,360 0.39 28,849 0.38
Leasehold (portion) on land and warehouses
23638, 23793 3-0-17.5 TICON Logistics Park Bangplee 1 W5 24,640 0.32 28,918 0.38
Bang Sao Thong Sub-district, Bangplee District
Samutprokan Province
Leasehold on land and warehouses 2806, 18808, 98-3-7.6 TICON Logistics Park Bangplee 1 W1/1 244,620 3.21 253,830 3.35 18811, 18812 Srisa Chorakhe Yai Sub-district, W1/2 124,230 1.63 122,180 1.61
23638, 23793 Bang Sao Thong District, W1/3 160,120 2.10 162,280 2.15
Samutprakan Province
2806 W2 42,840 0.56 44,770 0.59
2805, 23638, 23793, 60713, 60714 W3 159,960 2.10 171,200 2.26
18789, 18790, 18791, 18792, 2806 W4 387,520 5.08 399,400 5.28
2806, 23638, 23793, 60713 DG1/1 46,450 0.61 50,950 0.67
DG1/2
DG1/3
86159, 86160, 35-0-71.1 TICON Logistics Park Bangplee 3 W4/1 516,680 6.78 518,239 6.85
86161,105253, Bangpla Sub-district, Bangplee District W4/2
105254, 105255, Samutprokan Province W4/3
105256, 105257, 105258, W4/4
105259, 105260, 118032 W4/5
W4/6
W4/7
8486, 86155, 27-0-87.3 TICON Logistics Park Bangplee 3 W5/1 188,580 2.47 283,211 3.74
86156, 86157, Bangpla Sub-district, Bangplee District W5/2
86158, 86162, Samutprokan Province W5/3 79,990 1.05
86163, 86164, W5/4 38,450 0.50 125,356 1.66
105259, 118032 W5/5 79,400 1.04
W5/6
Freehold on land and warehouses
195065 6-1-71.4 TICON Logistics Park Eastern Seaboard 2 W2/1 120,860 1.59 112,200 1.48
Bo Win Sub-district, Si Racha District, W2/2
Chonburi Province
195062 9-2-77 TICON Logistics Park Eastern Seaboard 2 W5/1 201,140 2.64 173,320 2.29
Bo Win Sub-district, Si Racha District, W5/2
Chonburi Province
The accompanying notes are integral part of the financial statements. TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2016
Details of investments classified by asset type
30 September 2016 31 December 2015
(Unaudited but reviewed) (Audited)
Type of investments/ Factory / warehouse Percentage Percentage
Land title deed Area Locations building no. Fair value of investments Fair value of investments
(Rai-Ngan-Sq. Wah) (Thousand Baht) (%) (Thousand Baht) (%)
177126 24-0-56 TICON Logistics Park Sriracha W5/1 422,960 5.55 389,920 5.15
Surasak Sub-district, Si Racha District, W5/2
Chonburi Province W5/3
173839, 11303 8-1-22 TICON Logistics Park Sriracha W16 84,030 1.10 83,040 1.10
Surasak Sub-district, Si Racha District,
Chonburi Province
194794 24-0-37.9 TICON Logistics Park Sriracha W20 347,130 4.55 310,960 4.11
Surasak Sub-district, Si Racha District,
Chonburi Province
178448 7-0-21.4 TICON Logistics Park Laemchabang 2 W2 123,440 1.62 115,050 1.52
Nong Kham Sub-district, Si Racha District,
Chonburi Province
177198 6-2-4.8 TICON Logistics Park Laemchabang 2 FZ4 92,520 1.21 88,010 1.16
Nong Kham Sub-district, Si Racha District,
Chonburi Province
47950 13-0-8 Rojana Industrial Park (Prachinburi) W1 180,570 2.37 174,210 2.30
Huawa Sub-district, Si Maha Phot District,
Prachinburi Province
44200 11-3-59 TICON Logistics Park Wangnoi 2 W11/1 203,930 2.68 188,580 2.49
Payom Sug-district, Wang Noi District, W11/2
Phra Nakhon Si Ayutthaya Province W11/3
W11/4
38797 12-3-64.5 TICON Logistics Park Eastern Seaboard 1(B) W2/1 81,480 1.07 82,023 1.08
Pluakdaeng Sub-district, Pluakdaeng District, W2/2 48,870 0.64 49,317 0.65
Rayong Province W2/3 102,050 1.34 49,214 0.65
W2/4 49,626 0.66
177199 13-1-54.1 TICON Logistics Park Laemchabang 2 W1/1 50,490 0.66 54,520 0.72
Nong Kham Sub-district, Si Racha District, W1/2 51,560 0.68 54,404 0.72
Chonburi Province W1/3 106,430 1.40 124,816 1.65
W1/4
173846 16-2-35.9 TICON Logistics Park Laemchabang 2 FZ1/1 207,600 2.72 217,500 2.87
Nong Kham Sub-district, Si Racha District, FZ1/2
Chonburi Province FZ1/3
FZ1/4 56,440 0.74 59,508 0.79
FZ1/5 56,540 0.74 59,740 0.79
177200 11-2-37 TICON Logistics Park Laemchabang 2 FZ3/1 104,650 1.37 118,088 1.56
Nong Kham Sub-district, Si Racha District, FZ3/2
Chonburi Province FZ3/3 56,670 0.74 59,508 0.79
FZ3/4 51,810 0.68 59,044 0.78
45789 13-2-11 TICON Logistics Park Panthong 1 W2/1 222,330 2.92 241,280 3.19
Panthong Sub-district, Panthong District, W2/2
Chonburi Province W2/3
W2/4
W2/5
The accompanying notes are integral part of the financial statements. TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2016
Details of investments classified by asset type
30 September 2016 31 December 2015
(Unaudited but reviewed) (Audited)
Type of investments/ Factory / warehouse Percentage Percentage
Land title deed Area Locations building no. Fair value of investments Fair value of investments
(Rai-Ngan-Sq. Wah) (Thousand Baht) (%) (Thousand Baht) (%)
Freehold on land and factories
9994, 14727 5-1-39.7 Amata City Industrial Estate SF.B1.9 A32,39 81,180 1.07 83,000 1.10
Mabyangporn Sub-district,
Pluak Daeng District, Rayong Province
31698 6-0-87.9 Amata City Industrial Estate SF.M3.3 A220/1 93,480 1.23 93,160 1.23
Mabyangporn Sub-district,
Pluak Daeng District, Rayong Province
7435 4-0-18 Pinthong Industrial Estate SF.A1.8/1 L_42 60,190 0.79 55,810 0.74
Nong Kham Sub-district,
Si Racha District, Chonburi Province
181769, 181770 4-0-11.4 Pinthong Industrial Estate SF.A1.8/2 L_42/2, 62,840 0.83 54,530 0.72
Nong Kham Sub-district, L_43/2
Si Racha District, Chonburi Province
183315 4-0-29.2 Pinthong Industrial Estate SF.M1.8 G_007 59,340 0.78 53,350 0.70
Bo Win Sub-district, Si Racha District,
Chonburi Province
185321, 185322 11-1-29.4 Pinthong Industrial Estate SF.A3 G_025/3 92,160 1.21 83,780 1.11
Bo Win Sub-district, Si Racha District, SF.A2.2 G_025/2 69,500 0.91 62,820 0.83
Chonburi Province
167088 20-3-60 Pinthong Industrial Estate SF.L3.2 G_032/1 98,250 1.29 89,980 1.19
Bueng Sub-district, Si Racha District, SF.A2.7/3 G_032/2 84,670 1.11 75,420 1.00
Chonburi Province SF.A2.7/2 G_032/3 84,680 1.11 75,420 1.00
SF.A2.7/1 G_032/4, 84,680 1.11 75,420 0.99
G_033/1
167086 21-3-97.6 Pinthong Industrial Estate SF.B3.5 G_033/2 109,130 1.43 97,070 1.28
Bueng Sub-district, Si Racha District, SF.L4.4 G_033 136,050 1.79 121,030 1.60
Chonburi Province
20170 5-2-1 Ban Wah Industrial Estate (Hi-Tech) SF.A1.3 G1/4-4 40,690 0.53 35,880 0.47
Ban Len Sub-district, Bang Pa-in District, SF.A1.5/3 G_1/4_5 37,760 0.50 38,370 0.51
Phra Nakhon Si Ayutthaya Province
59721 3-3-15 Ban Wah Industrial Estate (Hi-Tech) SF.C2.2 F_7/12 64,590 0.85 60,640 0.80
Ban Len Sub-district, Bang Pa-in District,
Phra Nakhon Si Ayutthaya Province
55952 4-1-42 Ban Wah Industrial Estate (Hi-Tech) SF.M2.2 F_7/13 59,790 0.78 56,080 0.74
Ban Len Sub-district, Bang Pa-in District,
Phra Nakhon Si Ayutthaya Province
30621 2-2-72 Rojana Industrial Park SF.A1.3/1 28_1 40,490 0.53 37,700 0.50
Ban Chang Sub-district, Uthai District,
Phra Nakorn Si Ayutthaya Province
52780 3-3-5 Hemaraj Chonburi Industrial Estate SF.M1.5/2 D_1 50,150 0.66 45,760 0.60
Bo Win Sub-district, Si Racha District,
Chonburi Province
52781 3-1-84 Hemaraj Chonburi Industrial Estate SF.M1.5/1 D_2 50,300 0.66 45,670 0.60
Bo Win Sub-district, Si Racha District,
Chonburi Province
31576 2-1-28 Rojana Industrial Park SF.S1/2-42.2 29,600 0.39 26,565 0.35
Ban Chang Sub-district, Uthai District,
Phra Nakorn Si Ayutthaya Province
The accompanying notes are integral part of the financial statements. TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2016
Details of investments classified by asset type
30 September 2016 31 December 2015
(Unaudited but reviewed) (Audited)
Type of investments/ Factory / warehouse Percentage Percentage
Land title deed Area Locations building no. Fair value of investments Fair value of investments
(Rai-Ngan-Sq. Wah) (Thousand Baht) (%) (Thousand Baht) (%)
52785 8-0-33 Hemaraj Chonburi Industrial Estate SF.L3.2-D6 90,090 1.18 88,305 1.16
Bo Win Sub-district, Si Racha District,
Chonburi Province
38800 4-0-13.5 Amata City Industrial Estate SF.A2_A220/6 58,530 0.77 64,264 0.85
Mabyangporn Sub-district, Pluak Daeng District,
Rayong Province
Leasehold on land and factories
26247 6-1-48 Amata Nakorn Industrial Estate SF.M2.7_G802/6 73,890 0.97 72,015 0.95
Panthong and Nong Kakha Sub-district,
Panthong District, Don Hua Lo Sub-district,
Muang District, Chonburi Province
37961 6-1-66 Amata Nakorn Industrial Estate SF.B3.8_G856/4 103,480 1.36 111,542 1.47
Panthong and Nong Kakha Sub-district,
Panthong District, Don Hua Lo Sub-district,
Muang District, Chonburi Province
170335 7-2-24 Amata Nakorn Industrial Estate SF.L4_G625 117,870 1.55 127,722 1.69
Panthong and Nong Kakha Sub-district,
Panthong District, Don Hua Lo Sub-district,
Muang District, Chonburi Province
36404 4-1-9 Amata Nakorn Industrial Estate SF.M2.5/2_G906/2 70,440 0.92 77,115 1.02
Panthong and Nong Kakha Sub-district,
Panthong District, Don Hua Lo Sub-district,
Muang District, Chonburi Province
Total investments in properties 7,351,650 96.45 7,260,760 95.90
The accompanying notes are integral part of the financial statements. TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2016
Details of investments classified by asset type
30 September 2016 31 December 2015
(Unaudited but reviewed) (Audited)
Type of investments/ Percentage of Percentage of
Issuer Maturity date Interest rate Cost Fair value investment Cost Fair value investment
(Percent) (Thousand Baht) (Thousand Baht) (Percent) (Thousand Baht) (Thousand Baht) (Percent)
Investments in securities
Fixed deposits
CIMB Thai Bank Public Company Limited 20 October 2016 1.30 100,000 100,000 1.31
United Overseas Bank (Thai) Public 31 October 2016 1.55 30,123 30,123 0.40 - - -
Company Limited
United Overseas Bank (Thai) Public 31 October 2016 1.55 20,184 20,184 0.26 - - -
Company Limited
United Overseas Bank (Thai) Public 3 November 2016 1.45 20,219 20,219 0.27 - - -
Company Limited
CIMB Thai Bank Public Company Limited 8 November 2016 1.30 30,000 30,000 0.39 - - -
CIMB Thai Bank Public Company Limited 30 November 2016 1.30 40,000 40,000 0.53 - - -
CIMB Thai Bank Public Company Limited 20 December 2016 1.30 30,000 30,000 0.39 - - -
CIMB Thai Bank Public Company Limited At call 1.40 - - - 100,000 100,000 1.32
CIMB Thai Bank Public Company Limited At call 1.40 - - - 90,000 90,000 1.19
CIMB Thai Bank Public Company Limited At call 1.40 - - - 70,271 70,271 0.93
United Overseas Bank (Thai) Public 29 January 2016 2.00 - - - 20,000 20,000 0.26
Company Limited
United Overseas Bank (Thai) Public 1 February 2016 2.00 - - - 20,000 20,000 0.26
Company Limited
United Overseas Bank (Thai) Public 25 March 2016 2.00 - - - 10,000 10,000 0.14
Company Limited
Total fixed deposits 270,526 270,526 3.55 310,271 310,271 4.10
Total investments in securities 270,526 270,526 3.55 310,271 310,271 4.10
Total investments 7,622,176 100.00 7,571,031 100.00
- -
The accompanying notes are integral part of the financial statements. (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of income
For the three-month period ended 30 September 2016
(Unit: Thousand Baht)
Note 2016 2015
Investment income
Rental and service income 133,463 88,121
Interest income 15 903 425
Income from rental and service guarantees 14, 15 15,956 9,568
Income from forfeiture of rental and service deposits 22,860 -
Other income - 1,164
Total income 173,182 99,278
Expenses
Trust management fee 13, 15 14,718 10,442
Trustee fee 13, 15 1,491 878
Registrar fee 13 663 338
Professional fees 146 104
Operating expenses 15 47,344 8,625
Amortisation of deferred expenses 3,806 3,094
Interest expenses 15 18,340 9,212
Total expenses 86,508 32,693
Net investment income 86,674 66,585
Realised gains on investments
Net realised gains on investments - 211
Total realised gains on investments - 211
Net increase in net assets resulting from operations 86,674 66,796
The accompanying notes are an integral part of the financial statements. (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of income
For the nine-month period ended 30 September 2016
(Unit: Thousand Baht)
Note 2016 2015
Investment income
Rental and service income 430,162 266,838
Interest income 15 2,939 1,724
Income from rental and service guarantees 14, 15 50,999 30,492
Income from forfeiture of rental and service deposits 22,860 2,736
Other income - 1,164
Total income 506,960 302,954
Expenses
Trust management fee 13, 15 46,543 31,978
Trustee fee 13, 15 4,410 2,629
Registrar fee 13 1,779 1,014
Professional fees 443 367
Operating expenses 15 88,864 23,219
Amortisation of deferred expenses 9 11,379 10,275
Interest expenses 15 55,816 27,982
Total expenses 209,234 97,464
Net investment income 297,726 205,490
Realised and unrealised gains (losses) on investments
Net realised gains on investments - 211
Net unrealised gains (losses) on investments 6 90,890 (126,500)
Total realised and unrealised gains (losses) on investments 90,890 (126,289)
Net increase in net assets resulting from operations 388,616 79,201
The accompanying notes are an integral part of the financial statements. (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of changes in net assets
For the nine-month period ended 30 September 2016
(Unit: Thousand Baht)
Note 2016 2015
Increase in net assets resulting from operations
during the period
Net investment income 297,726 205,490
Net realised gains on investments - 211
Net unrealised gains (losses) on investments 6 90,890 (126,500)
Increase in net assets resulting from operations 388,616 79,201
Distributions to unitholders 12, 15 (251,772) (74,494)
Decrease in capital from unitholders
Decrease in trust units value from capital reduction
342,500,000 units of Baht 0.1934 each - (66,240)
Net decrease in capital from unitholders - (66,240)
Increase (decrease) in net assets during the period 136,844 (61,533)
Net assets at the beginning of period 5,601,315 3,432,973
Net assets at the end of period 5,738,159 3,371,440
The accompanying notes are an integral part of the financial statements. (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of cash flows
For the nine-month period ended 30 September 2016
(Unit: Thousand Baht)
2016 2015
Cash flows from operating activities
Increase in net assets resulting from operations 388,616 79,201
Adjustments to reconcile the increase in net assets resulting from
operations to net cash provided by (paid from) operating activities:
Purchases of investments in securities (921,537) (455,008)
Sales of investment in securities 961,282 304,361
Net purchases and sales of investment in securities 39,745 (150,647)
Amortisation of deferred expenses 11,379 10,275
Increase in accounts receivable from rental and service (45,895) (27,132)
Decrease (increase) in accounts receivable from interest (519) 183
Decrease (increase) in other receivable (630) 7,550
Increase in deferred expenses (5,399) -
Increase in other assets (5,455) (2,315)
Increase (decrease) in accrued expenses 2,660 (35,340)
Decrease in withholding tax payables (46,755) (61,578)
Decrease in deposits from rental and service (13,817) (2,109)
Decrease in other liabilities (1,545) (2,308)
Increase in allowance for doubtful debts 34,347 740
Interest expenses 55,816 27,982
Net realised gains on investments - (211)
Net unrealised losses (gains) on investments (90,890) 126,500
Net cash flows from (used in) operating activities 321,658 (29,209)
Cash flows from financing activities
Interest paid (55,929) (28,094)
Decrease in value of trust units from capital reduction - (66,240)
Distributions to unitholders (251,772) (74,494)
Net cash flows used in financing activities (307,701) (168,828)
Net increase (decrease) in cash and cash at banks 13,957 (198,037)
Cash and cash at banks at beginning of period 3,296 223,744
Cash and cash at banks at end of period (Note 7) 17,253 25,707
-
The accompanying notes are an integral part of the financial statements. TICON Freehold and Leasehold Real Estate Investment Trust
Significant financial information
For the nine-month period ended 30 September 2016
(Unit: Baht)
2016 2015
Operating performance (per unit)
Net asset value - beginning of period 9.8823 10.0232
Income from investment operations
Net investment income 0.5253 0.6000
Net realised gains on investments - 0.0006
Net unrealised gains (losses) on investments 0.1603 (0.3693)
Total net income from investment operations 0.6856 0.2313
Less: Distributions to unitholders (0.4442) (0.2175)
Less: Decrease in capital from unitholders - (0.1934)
Increase (decrease) in net assets value during the period 0.2414 (0.1796)
Net asset value - end of period 10.1237 9.8436
Ratio of increase in net assets resulting from
operations to average net assets during the period (%) 6.77 2.31
Significant financial ratios and additional information
Net assets - end of period (Thousand Baht) 5,738,159 3,371,440
Ratio of total expenses to average net assets
during the period (%) 3.65 2.85
Ratio of investment income to average net assets
during the period (%) 8.84 8.85
Weighted average investment turnover to average net asset ratio (%)* - -
Average net assets during the period (Thousand Baht) 5,737,970 3,423,717
* Investment trading transactions exclude cash at banks and investment in promissory notes, and must be real
purchases or sales of investments which exclude purchases of investments under resale agreements or sales
under repurchase agreements.
The accompanying notes are an integral part of the financial statements. (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust Notes to interim financial statements For the three-month and nine-month periods ended 30 September 2016
1. Information of TICON Freehold and Leasehold Real Estate Investment Trust
TICON Freehold and Leasehold Real Estate Investment Trust (“the Trust”) is a closed-end trust with specific the purpose. The Trust was established as a trust on 12 December 2014, with no project life stipulated, with the current capital of Baht 5,542 million.
The Trust’s objectives are to raise funds from general investors and to use the proceeds from such fund raising to acquire, lease and/or sub-lease of immovable properties. The Trust will take the transfer of the ownership and/or leasehold rights and/or sub-leasehold rights therein and seek benefits from those properties by way of lease, sub-lease, transferring and/or disposing of immovable properties the Trust invests in or acquires. The Trust will also improve, modify, construct and/or develop immovable properties by taking the transfer of a construction permit and/or applying for other permits and/or executing any transactions necessary and advisable for immovable properties, with the aim of generating income and returns for the Trust and its unitholders. This includes investment in other properties and/or securities and/or seeks interest by any other means as prescribed by securities laws and/or other relevant law.
The Stock Exchange of Thailand approved the listing of the Trust’s units and permitted their trading from 9 January 2015 onwards.
TICON Management Company Limited acts as the Trust Manager, BBL Asset Management Company Limited acts as the Trustee, TICON Logistics Park Company Limited and TICON Industrial Connection Public Company Limited are engaged as the Property Management Managers and Thailand Securities Depository Company Limited acts as the Trust Registrar.
The Trust’s major unitholders are Social Security Office and TICON Industrial Connection Public Company Limited, which holds 12.60% and 11.88%, of the trust units, according to the latest registry of unitholders on 23 August 2016 (31 December 2015: 12.45% and 19.60% of the trust units).
1 (Unaudited but reviewed)
2. Basis of preparation of interim financial statements
These interim financial statements are prepared in accordance with Thai Accounting Standard No. 34 (revised 2015) Interim Financial Reporting, with the Trust choosing to present condensed interim financial statements. However, the Trust has presented the balance sheet, the details of investments, the statements of income, changes in net assets, cash flows and significant financial information in the same format as that used for the annual financial statements.
The interim financial statements are intended to provide information additional to that included in the latest annual financial statements. Accordingly, they focus on new activities, events and circumstances so as not to duplicate information previously reported. These interim financial statements should therefore be read in conjunction with the latest annual financial statements.
The interim financial statements in Thai language are the official statutory financial statements of the Trust. The interim financial statements in English language have been translated from the Thai language financial statements.
3. New financial reporting standards
During the period, the Trust has adopted the revised and new financial reporting standards and accounting treatment guidance issued by the Federation of Accounting Professions which become effective for fiscal years beginning on or after 1 January 2016. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Trust’s financial statements.
4. Significant accounting policies
The interim financial statements are prepared using the same accounting policies and methods of computation as were used for the financial statements for the year ended 31 December 2015.
2 (Unaudited but reviewed)
5. Change in accounting estimates
In September 2015, the Trust changed its accounting estimate of the period for the amortisation of deferred expenses incurred in connection with an initial public offering of the Trust’s units, such as underwriting fees, Trust setup costs and other direct expenses, on a straight-line basis from 3 years to 5 years, effective from 1 September 2015. The management of the Trust believed that the new amortisation period for deferred expenses was appropriate since it was in line with the expected benefit to the Trust.
The Trust applied the changes in estimates prospectively.
6. Investments in properties
(Unit: Thousand Baht)
30 September 31 December 2016 2015 Investments in properties - at cost Investments in properties - beginning of period/year 7,387,260 4,228,000 Add: Purchase during the period/year - 3,159,260 Investments in properties - end of period/year 7,387,260 7,387,260 Net unrealised losses on investments in properties Net unrealised losses on investments - beginning of period/year (126,500) - Add: Net unrealised gains (losses) from the revaluation of investments during the period/year 90,890 (126,500) Net unrealised losses on investments - end of period/year (35,610) (126,500) Investments in properties - end of period/year 7,351,650 7,260,760
On 1 April 2016, the Trust hired an independent appraiser to revalue its investments in 98 units of properties using the income approach. It subsequently adjusted the value of these properties to their fair value of Baht 7,352 million, with a net unrealised gain from the revaluation of Baht 91 million.
3 (Unaudited but reviewed)
7. Cash and cash at banks
As at 30 September 2016 and 31 December 2015, the Trust has the details of cash and cash at banks as follows.
Bank Principal (Thousand Baht) Interest rate per annum (%)
30 September 31 December 30 September 31 December
2016 2015 2016 2015
Cash 5 5 - - Bank deposits Saving accounts Bangkok Bank Public Company Limited 16,285 2,252 0.375 - 1.250 0.380 - 0.500 Current accounts
Bangkok Bank Public Company Limited 963 1,039 - -
Total bank deposits 17,248 3,291
Total 17,253 3,296
8. Accounts receivable from rental and service
The balances of accounts receivable from rental and service as at 30 September 2016 and 31 December 2015, aged on the basis of due dates are summarised below. (Unit: Thousand Baht) 30 September 31 December 2016 2015 Age of receivables Not yet due 407 260 Past due Not over 3 months 17,245 21,740 3 - 6 months 15,598 5,304 6 - 12 months 19,056 - Over 12 months 132 - Total 52,438 27,304 Unbilled operating leases receivables 40,020 19,259 Less: Allowance for doubtful debts (35,350) (1,003) Accounts receivable from rental and service, net 57,108 45,560
4 (Unaudited but reviewed)
9. Deferred expenses (Unit: Thousand Baht) 30 September 31 December 2016 2015 Deferred expenses - beginning of the period/year 61,759 42,687 Add: Increase during the period/year 5,399 31,551 Less: Amortised during the period/year (11,379) (12,479) Deferred expenses - end of the period/year 55,779 61,759
10. Long-term loans (Unit: Thousand Baht) Interest rate 30 September 31 December
Loan (% per annum) Repayment schedule 2016 2015 1 MLR less a number Payment of principal by semi-annual which 860,000 860,000 specified in the 1st principal payment on December 2021 agreement with the last payment within June 2024 2 MLR less a number Payment of principal by semi-annual which 959,000 959,000 specified in the 1st principal payment on December 2022 agreement with the last payment within June 2025
Total long-term loans 1,819,000 1,819,000
As at 30 September 2016, the Trust has unused long-term loan facilities under the loan agreements amounting to Baht 46 million (31 December 2015: Baht 46 million).
The long-term loans are unsecured and the loan agreements contain general conditions, such as limitation of debt-to-assets ratio, resistance of additional borrowing, indebtedness or obligation, sale or transfer of properties and leasehold rights.
5 (Unaudited but reviewed)
11. Retained earnings
(Unit: Thousand Baht) 30 September 31 December 2016 2015 Net accumulated income from investments 294,525 7,973 Net accumulated realised gains on investments 211 - Net accumulated unrealised losses on investments (126,500) - Accumulated distributions to unitholders (108,984) - Retained earnings - beginning of period/year 59,252 7,973 Add: Increase in net assets resulting from operations during the period/year 388,616 160,263 Less: Distributions to unitholders during the period/year (251,772) (108,984) Retained earnings - end of period/year 196,096 59,252
12. Distributions to unitholders
During the period, the Trust paid distributions to its unitholders as follows.
Declared date For the operations as from Per unit Total (Baht) (Thousand Baht) 23 February 2016 1 November 2015 - 31 December 2015 and retained earnings 0.0940 53,279 9 May 2016 1 January 2016 - 31 March 2016 and retained earnings 0.1800 102,024 8 August 2016 1 April 2016 - 30 June 2016 and retained earnings 0.1702 96,469 Total distributions for the period 2016 0.4442 251,772 14 May 2015 1 January 2015 - 31 March 2015 and retained earnings 0.2175 74,494 Total distributions for the period 2015 0.2175 74,494
6 (Unaudited but reviewed)
13. Expenses
Details of the trust management fee, trustee fee and registrar fee are summarised below.
Expenses Percentage 1. Trust management fee - Base fee 0.25 % per annum of the Trust’s total assets - Performance fee 2.0 % per annum of net income from rental and service agreement on warehouse buildings 4.0 % per annum of net income from rental and service agreement on factory buildings - Incentive fee 0.00 - 10.50 % per annum of net operating income of warehouse buildings of the Trust 0.00 - 19.50 % per annum of net operating income of factory buildings of the Trust - Commission fee for In proportion to rental and service periods but not over acquiring a new 3 months based on the latest rental and service lessee rate of new lessee - Commission fee for 3.0 % of the value of buying/selling/transferring buying/selling/ leasehold/receiving leasehold transferring leasehold/receiving leasehold 2. Trustee fee 0.09875 % per annum of the Trust’s net assets 3. Registrar fee Actual paid but not over 0.05% per annum of the Trust's net asset value
The above fees are calculated and charged to the Trust’s account on a monthly basis.
Operating expenses include expenses incurred specifically for the Trust such as the Trust’s setting up expenses, utilities, insurance premium, bank charge, postage and various expenses which are incurred legally and in accordance with regulations.
14. Income from rental and service guarantees
TICON Logistics Park Company Limited and TICON Industrial Connection Public Company Limited, hired by the Trust Manager to be as the Property Management Managers, have agreed to guarantee the occupancy for only properties that have been vacant after the registration of the transfer of ownership or leasehold rights of properties was completed or the tenants exercise their right to move out from the rental properties by compensating the Trust at the same rate of rental and service
7 (Unaudited but reviewed)
fee that the latest tenant had paid until the Property Management Manager is able to find a new tenant and the new tenant pays the rental and service fee to the Trust or until after 12 months from date that the Trust first invested in the properties.
15. Related party transactions
During the period, the Trust had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Trust and those related parties.
(Unit: Thousand Baht)
For the three-month For the nine-month
periods ended periods ended
30 September 30 September
2016 2015 2016 2015 Pricing policy
TICON Logistics Park Company Limited
Income from rental and service guarantees 15,951 8,143 50,994 25,533 As specified in property management
agreement (Note 14)
Rental expenses 1,786 1,856 5,610 5,567 Contract price
Common area service fee 4,858 1,815 10,541 4,551 Contract price
Repair and maintenance expenses 206 409 634 918 Actual charge
Utility expenses 25 - 73 - Actual charge
Distributions paid - - - 9,299 As declared
Decrease in trust units value from capital - 8,269 - 8,269 As declared
reduction
TICON Industrial Connection Public Company Limited
Income from rental and service guarantees - 1,425 - 4,959 As specified in property management
agreement (Note 14)
Common area service fee 44 39 44 68 Contract price
Repair and maintenance expenses 26 293 111 522 Actual charge
Distributions paid 11,456 - 33,660 - As declared
TICON Management Company Limited
REIT Management fee 14,718 10,442 46,543 31,978 As detailed in Note 13
BBL Asset Management Company Limited
Trustee fee 1,491 878 4,410 2,629 As detailed in Note 13
Bangkok Bank Public Company Limited
Interest income 58 27 55 185 Market rate
Interest expense 18,340 9,212 55,816 27,982 As detailed in Note 10
8 (Unaudited but reviewed)
The balances of the accounts as at 30 September 2016 and 31 December 2015 between the Trust and those related companies are as follows:
(Unit: Thousand Baht) 30 September 31 December 2016 2015 BBL Asset Management Company Limited Accrued trustee fee 497 503 TICON Management Company Limited Accrued trust management fee 4,167 4,904 TICON Industrial Connection Public Company Limited Accrued expenses 54 275 TICON Logistics Park Company Limited Accounts receivable from rental and service - 1,792 Prepaid rental expenses 1,785 - Accrued expenses 9,636 2,921 Bangkok Bank Public Company Limited Interest receivables 61 109 Long-term loans 1,819,000 1,819,000 Accrued underwriting fee - 17,747 Accrued financial advisor fee - 5,350 Interest payable 199 312
Long-term loans from related party
The outstanding balances as at 30 September 2016 and the movements of the borrowings between the Trust and its related party are as follows. (Unit: Thousand Baht) Balance as at Increase Decrease Balance as at 31 December during the during the 30 September Long-term loans 2015 period period 2016 Bangkok Bank Public Company Limited 1,819,000 - - 1,819,000
16. Commitments
16.1 The Trust is committed to pay the trust management fee, trustee fee and registrar fee under the terms and conditions specified in Note 13.
9 (Unaudited but reviewed)
16.2 As at 30 September 2016 and 31 December 2015, the Trust has future minimum lease payments required under non-cancellable operating leases contracts in respect of space leases and sub-leases as follows.
(Unit: Million Baht) 30 September 31 December 2016 2015 Payable: In up to 1 year 20.3 8.0 In over 1 and up to 5 years 50.3 34.2 In over 5 years 259.1 268.0
17. Segment information
The Trust is principally engaged in the rental of immovable properties. Its operation is carried on only in Thailand. Segment performance is measured based on operating profit or loss, on a basis consistent with that used to measure operating profit or loss in the financial statements. As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned reportable operating segment and geographical area.
18. Event after the reporting period
On 8 November 2016, a meeting of the Trust Manager’s Board of Directors approved the payment of a distribution of Baht 0.16 per unit to the unitholders from the operating results for the period as from 1 July 2016 to 30 September 2016 and retained earnings, or a total of Baht 90.69 million, which is to be paid on 6 December 2016.
19. Approval of interim financial statements
These interim financial statements were authorised for issue by the authorised director of the Trust Manager on 8 November 2016.
10