Annual Report
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Annual Report As at 28 February 2013 Tesco Lotus Retail Growth Freehold and Leasehold Property Fund Krung Thai Asset Management Public Company Limited To The Unitholders, Tesco Lotus Retail Growth Freehold and Leasehold Property Fund The Company hereby submits the Annual Report of 2012"2013, during 13 March 2012 (registration date) and 28 February 2013, of Tesco Lotus Retail Growth Freehold and Leasehold Property Fund in order to inform the Unitholders of the results of operation of the Fund. The Company would like to thank all Unitholders for entrusting the Company to manage your investment at all times. Yours sincerely, Krung Thai Asset Management Public Company Limited Tesco Lotus Retail Growth Freehold and Leasehold Property Fund Abbreviation : TLGF Management Company : Krung Thai Asset Management Public Company Limited 11 Q House Sathorn Building, M, G and 10th Floor, South Sathorn Road, Kwaeng Tungmahamek, Khet Sathorn, Bangkok 10120 Tel. 02-670-4900 Fax. 02-679-1820 Type of Project : Freehold and leasehold property fund in category of non-redemption of investment units. The management company has submitted the application for the listing of the investment units to the Stock Exchange within 30 days from the registration date of the Fund, and will submit the application for the listing of the investment units offered for sale in connection with the 1st capital increase to the Stock Exchange within 7 days from the date of registration of the 1st capital increase. Term of Project : No specific term of the Project Type of Project : Specified Characteristics of Project : Not exceeding 25,889,280,000 Baht (Twenty Five Thousand Eight Hundred and Eighty Nine Million Two Hundred and Eighty Thousand Baht) (1) Amount of investment of the Project in the first offer for sale of investment units : 18,408,000,000 Baht (2) Amount of investment of the Project in the 1st capital increase : Not exceeding 7,545,000,000 Baht Offer Price of Investment Units : The offer for sale of investment units for the 1st capital increase: (1) Amount of investment offered for sale : Not exceeding 7,545,000,000 Baht (2) Amount of investment units offered for sale : Not exceeding 650,000,000 Units (3) Subscription price of investment units : 13.30 Baht First offer for sale of investment units: (1) Amount of investment offered for sale : 18,408,000,000 Baht (2) Amount of investment units offered for sale : 1,770,000,000 Units (3) Offer price of investment units : 10.40 Baht Amount of Investment Units : Not exceeding 2,420,000,000 Units (1) Amount of investment units before the 1st capital increase : 1,770,000,000 Units (2) Amount of additional investment units offered for sale for the 1st capital increase : Not exceeding 650,000,000 Units Type of Investment Units : Unitholders specified Custodian : The Hongkong and Shanghai Banking Corporation Limited, Bangkok Branch Registrar : Krung Thai Asset Management Public Company Limited 11 Q House Sathorn Building, M, G and 10 th Floor, South Sathorn Road, Kwaeng Tungmahamek, Khet Sathorn, Bangkok 10120 Tel. 02-670-4900 Fax. 02-679-1820 Legal Advisor : Allen & Overy (Thailand) Co., Ltd. 130"132 Sindhorn Tower III, 22 nd Floor, Wireless Road, Kwaeng Lumpini, Khet Pathumwan, Bangkok 10330 Tel. 02-236-7600 Fax. 02-263-7699 Property Administrator: Ek"Chai Distribution System Co., Ltd. Objective of the Project: To mobilize funds from the general investors within and outside the country and utilize the proceeds obtained to invest in immovable properties, leasehold rights of immovable properties, including sublease rights of immovable properties, and procure benefits from such immovable properties and/or leasehold rights of immovable properties by leasing out, leasing out on sublease, transfering and/or disposing of, and making improvements, modifications, development of the immovable properties and/or leasehold rights of immovable properties by accepting transfer of construction permits and/or submitting applications for such other permits and/or taking any other action for the benefit of the properties invested by the Fund with an emphasis on seeking of income and returns for the Fund and the Unitholders, as well as investing in other properties or other securities, and/or seeking other benefits by any other means as prescribed by the law on securities. Investment Policy : The Fund will utilize the proceeds obtained from the first offer for sale of investment units in immovable properties and leasehold rights in immovable properties which consist of 17 Tesco Lotus shopping malls. The immovable properties and leasehold rights of immovable properties to be invested by the Fund in the first time shall be (a) 10 properties in which the Fund has ownership in the land and buildings, namely, Srinakarin, Krabi, Prachachuen, Rangsit Klong 7, Tungsong, Singburi, Pranburi, Mahachai, Mae Sai, and Ranong Projects, (b) 2 properties in which the Fund has ownership in certain land and buildings and has leasehold rights in certain land, namely, Samui and Phitsanulok Projects, (c) 4 properties in which the Fund has leasehold rights in the land and has ownership in the buildings, namely, Amata Nakorn, Petchaboon, Lumlookka Klong 6 and Sena Projects, and (d) 1 property in which the Fund has leasehold rights in the land and building, namely, Rama I Project. The leasehold rights in the land invested by the Fund are the leasehold rights under long-term lease agreements, with an average remaining lease term of 26 years approximately. The Fund will also use the proceeds obtained from the offer for sale of additional investment units and the monies that the Fund may borrow from financial institutions at a rate not exceeding 10 per cent of the net asset value of the Fund for investment in additional immovable properties and leasehold rights in immovable properties, which consist of 5 shopping malls, namely, (a) Phuket, Salaya and Nakorn Si Thammarat, and (b) 2 properties that the Fund will have leasehold rights in the land and ownership in the buildings, namely, Rangsit"Nakornnayok and Bangpu Project. The leasehold rights in the land in respect of the new immovable property projects to be invested by the Fund are the rights under long-term lease agreements with an average remaining lease term of 24 years approximately. Dividend Payment Policy : The Project has the policy to pay dividends to the Unitholders no more than 4 times per annum, which shall be payable on a quarterly basis as prescribed in the fund management project and the relevant rules and regulations as follows: (1) In the event that the Fund incurs any net profits during any accounting year, the management company will pay dividends to the Unitholders not lesser than 90 per cent (or at any percentage permitted by the law on securities and exchange from time to time) of the net profits during that accounting year. (2) In the event that the Fund incurs retained earnings during any accounting year, the management company may also pay dividends to the Unitholders out of such retained earnings. The net profits and retained earnings in (1) and (2) will not include profits which have not incurred from the appraisal or the review of appraisal of immovable properties or leasehold rights of that accounting year. Such dividend payment must not cause the Fund to incur any accumulated deficit during that accounting year in which the dividends are paid. In paying the dividends, the management company shall proceed to pay such dividends to the Unitholders within 90 days from the end of accounting year, or, in case of interim dividend payment, within 90 days from the date of closure of the register of the Unitholders for the purpose of dividend payment. In the event that the management company is unable to pay dividends during such period, the management company shall notify the Unitholders and the Office of SEC of the same in writing. Additional Conditions: In making consideration for the dividend payment, if the value of the dividends to be declared per unit during an accounting year is lower than or equal to 0.10 Baht, the management company reserves the right to refrain from paying dividends at such time and carry them on to be payable together at the end of accounting year in accordance with the procedures and rules prescribed. As for the criteria of the dividend payment, the management company shall take steps in accordance with the stipulated procedures, unless otherwise amended, changed, added, announced, prescribed, ordered, approved and/or given relaxation by the SEC, the Capital Market Supervisory Board, the Office of SEC and/or any other entity authorized by law in which case the management company shall proceed accordingly. Once the management company has proceeded as such, it shall be deemed that the Unitholders shall have given their consents thereto. The management company has prepare d and compiled various information of the Fund such as the prospectus, general information of the Fund, properties invested by the Fund, information about the results of operation, various news, historical data of dividend payment etc. for information of the investors. The investors may obtain the same at www.ktam.co.th The expenses for the preparation and dissemination of such information shall be collected from the Fund. Tesco Lotus Retail Growth Freehold and Leasehold Property Fund Description of Property As At 28 February 2013 Date of Investment: 14-15 March 2012 No. Branch Name Locatio n of Nature of Investment in the Land of Description of Seller /Lessor / Area Investment Evaluated Property the Fund Property* Transferor of Leased Out Price Price**/Appraiser Leasehold by the (Million (Million Baht) Right Fund Baht) (Square Meters) Ownership Leasehold Total CB Richard 15 (Rai) Right (Rai) Ellis Business (Rai) (Thailand) Advisory Co., Ltd. Limited As At 7 Dec 12 1 Srinakarin No.