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 2017 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 2017, the related statements of income for the three-month and nine-month periods ended 30 September 2017, and the related statements of 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: 9 November 2017
TICON Freehold and Leasehold Real Estate Investment Trust Balance sheet As at 30 September 2017 (Unit: Thousand Baht) Note 30 September 2017 31 December 2016 (Unaudited (Audited) but reviewed) Assets Investments Investments in properties at fair value (at cost 30 September 2017: Baht 7,387 million and 31 December 2016: Baht 7,387 million) 5 7,302,159 7,351,650 Investments in securities at fair value (at cost 30 September 2017: Baht 232 million and 31 December 2016: Baht 271 million) 231,652 270,555 Cash and cash at banks 6 50,686 41,049 Accounts receivable From rental and service 7, 15 63,912 43,647 From interest 527 468 Other 3,804 7,527 Deferred expenses 8 40,680 51,974 Other assets 15 7,121 4,406 Total assets 7,700,541 7,771,276 Liabilities Accrued expenses 15 25,918 42,789 Accrued interest 32,190 - Withholding taxes payable 6,408 6,171 Deposits from rental and service 156,971 151,850 Long-term loans 9, 15 - 1,819,000 Debentures 10, 15 1,800,000 - Other liabilities 2,644 4,597 Total liabilities 2,024,131 2,024,407 Net assets 5,676,410 5,746,869
Net assets: Trust registered and capital from the unitholders 5,542,063 5,542,063 Retained earnings 11 134,347 204,806 Net assets 5,676,410 5,746,869 - - Net asset value per unit (Baht) 10.0148 10.1391
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
1 TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments
As at 30 September 2017
Details of investments classified by asset type
30 September 2017 31 December 2016
(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 DG1/1 112,150 1.49 111,590 1.46
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 59,790 0.79 60,050 0.79
Bangsamak Sub-district, Bang Pakong District M2/2
Chachoengsao Province M2/3 23,540 0.31 22,330 0.29
M2/4 57,960 0.77 57,520 0.75
M2/5
M2/6 29,000 0.38 29,360 0.39
Leasehold (portion) on land and warehouses
23638, 23793 3-0-17.5 TICON Logistics Park Bangplee 1 W5 24,970 0.33 24,640 0.32
Bang Sao Thong Sub-district, Bangplee District
Samutprakan Province
Leasehold on land and warehouses 2806, 18808, 98-3-7.6 TICON Logistics Park Bangplee 1 W1/1 254,220 3.37 244,620 3.21 18811, 18812 Srisa Chorakhe Yai Sub-district, W1/2 131,270 1.74 124,230 1.63
23638, 23793 Bang Sao Thong District, W1/3 161,480 2.14 160,120 2.10
Samutprakan Province
2806 W2 42,990 0.57 42,840 0.56
2805, 23638, 23793, 60713, 60714 W3 169,580 2.25 159,960 2.10
18789, 18790, 18791, 18792, 2806 W4 438,950 5.83 387,520 5.08
2806, 23638, 23793, 60713 DG1/1 50,630 0.67 46,450 0.61
DG1/2
DG1/3
86159, 86160, 35-0-71.1 TICON Logistics Park Bangplee 3 W4/1 544,780 7.23 516,680 6.78
86161,105253, Bangpla Sub-district, Bangplee District W4/2
105254, 105255, Samutprakan 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 W5/1 212,230 2.82 188,580 2.47
86156, 86157, Bangpla Sub-district, Bangplee District W5/2
86158, 86162, Samutprakan Province W5/3 133,980 1.78 118,440 1.55
86163, 86164, W5/4
105259, 118032 W5/5 88,090 1.17 79,400 1.04
W5/6
Freehold on land and warehouses
195065 6-1-71.4 TICON Logistics Park Eastern Seaboard 2 W2/1 113,383 1.50 120,860 1.59
Bo Win Sub-district, Si Racha District, W2/2
Chonburi Province
195062 9-2-77 TICON Logistics Park Eastern Seaboard 2 W5/1 190,168 2.52 201,140 2.64
Bo Win Sub-district, Si Racha District, W5/2
Chonburi Province
The accompanying notes are integral part of the financial statements.
2 TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2017
Details of investments classified by asset type
30 September 2017 31 December 2016
(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 W5/1 411,971 5.47 422,960 5.55
Surasak Sub-district, Si Racha District, W5/2
Chonburi Province W5/3
173839, 11303 8-1-22 TICON Logistics Park Sriracha W16 79,826 1.06 84,030 1.10
Surasak Sub-district, Si Racha District,
Chonburi Province
194794 24-0-37.9 TICON Logistics Park Sriracha W20 334,560 4.44 347,130 4.55
Surasak Sub-district, Si Racha District,
Chonburi Province
178448 7-0-21.4 TICON Logistics Park Laemchabang 2 W2 119,531 1.59 123,440 1.62
Nong Kham Sub-district, Si Racha District,
Chonburi Province
177198 6-2-4.8 TICON Logistics Park Laemchabang 2 FZ4 77,497 1.03 92,520 1.21
Nong Kham Sub-district, Si Racha District,
Chonburi Province
47950 13-0-8 Rojana Industrial Park (Prachinburi) W1 171,210 2.27 180,570 2.37
Huawa Sub-district, Si Maha Phot District,
Prachinburi Province
44200 11-3-59 TICON Logistics Park Wangnoi 2 W11/1 188,436 2.50 203,930 2.68
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) W2/1 218,981 2.91 232,400 3.05
Pluakdaeng Sub-district, Pluakdaeng District, W2/2
Rayong Province W2/3
W2/4
177199 13-1-54.1 TICON Logistics Park Laemchabang 2 W1/1 49,791 0.66 50,490 0.66
Nong Kham Sub-district, Si Racha District, W1/2 48,684 0.65 51,560 0.68
Chonburi Province W1/3 111,934 1.49 106,430 1.40
W1/4
173846 16-2-35.9 TICON Logistics Park Laemchabang 2 FZ1/1 179,341 2.38 207,600 2.72
Nong Kham Sub-district, Si Racha District, FZ1/2
Chonburi Province FZ1/3
FZ1/4 48,684 0.65 56,440 0.74
FZ1/5 50,184 0.67 56,540 0.74
177200 11-2-37 TICON Logistics Park Laemchabang 2 FZ3/1 147,623 1.96 161,320 2.11
Nong Kham Sub-district, Si Racha District, FZ3/2
Chonburi Province FZ3/3
FZ3/4 50,302 0.67 51,810 0.68
45789 13-2-11 TICON Logistics Park Panthong 1 W2/1 203,614 2.70 222,330 2.92
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.
3 TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2017
Details of investments classified by asset type
30 September 2017 31 December 2016
(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 80,235 1.06 81,180 1.07
Mabyangporn Sub-district,
Pluak Daeng District, Rayong Province
31698 6-0-87.9 Amata City Industrial Estate SF.M3.3 A220/1 91,697 1.22 93,480 1.23
Mabyangporn Sub-district,
Pluak Daeng District, Rayong Province
7435 4-0-18 Pinthong Industrial Estate SF.A1.8/1 L_42 58,665 0.78 60,190 0.79
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, 58,056 0.77 62,840 0.82
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 56,977 0.76 59,340 0.78
Bo Win Sub-district, Si Racha District,
Chonburi Province
185321, 185322 11-1-29.4 Pinthong Industrial Estate SF.A3 G_025/3 89,000 1.18 92,160 1.21
Bo Win Sub-district, Si Racha District, SF.A2.2 G_025/2 68,656 0.91 69,500 0.91
Chonburi Province
167088 20-3-60 Pinthong Industrial Estate SF.L3.2 G_032/1 98,071 1.30 98,250 1.29
Bueng Sub-district, Si Racha District, SF.A2.7/3 G_032/2 80,433 1.07 84,670 1.11
Chonburi Province SF.A2.7/2 G_032/3 80,433 1.07 84,680 1.11
SF.A2.7/1 G_032/4 80,433 1.07 84,680 1.11
G_033/1
167086 21-3-97.6 Pinthong Industrial Estate SF.B3.5 G_033/2 103,226 1.37 109,130 1.43
Bueng Sub-district, Si Racha District, SF.L4.4 G_033 128,693 1.71 136,050 1.79
Chonburi Province
20170 5-2-1 Ban Wah Industrial Estate (Hi-Tech) SF.A1.3 G1/4-4 39,383 0.52 40,690 0.53
Ban Len Sub-district, Bang Pa-in District, SF.A1.5/3 G_1/4_5 42,410 0.56 37,760 0.50
Phra Nakhon Si Ayutthaya Province
59721 3-3-15 Ban Wah Industrial Estate (Hi-Tech) SF.C2.2 F_7/12 66,919 0.89 64,590 0.85
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 62,010 0.82 59,790 0.78
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 38,634 0.51 40,490 0.53
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 49,560 0.66 50,150 0.66
Bo Win Sub-district, Si Racha District,
Chonburi Province
52781 3-1-84 Hemaraj Chonburi Industrial Estate SF.M1.5/1 D_2 49,001 0.65 50,300 0.66
Bo Win Sub-district, Si Racha District,
Chonburi Province
31576 2-1-28 Rojana Industrial Park SF.S1/2-42.2 27,388 0.36 29,600 0.39
Ban Chang Sub-district, Uthai District,
Phra Nakorn Si Ayutthaya Province
The accompanying notes are integral part of the financial statements.
4 TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2017
Details of investments classified by asset type
30 September 2017 31 December 2016
(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 96,337 1.28 90,090 1.18
Bo Win Sub-district, Si Racha District,
Chonburi Province
38800 4-0-13.5 Amata City Industrial Estate SF.A2_A220/6 59,202 0.79 58,530 0.77
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 73,100 0.97 73,890 0.97
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_G856/4 103,460 1.37 103,480 1.36
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 118,120 1.57 117,870 1.55
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 70,730 0.94 70,440 0.92
Panthong and Nong Kakha Sub-district,
Panthong District, Don Hua Lo Sub-district,
Muang District, Chonburi Province
Total investments in properties 7,302,159 96.92 7,351,650 96.44
The accompanying notes are integral part of the financial statements.
5 TICON Freehold and Leasehold Real Estate Investment Trust
Details of investments (continued)
As at 30 September 2017
Details of investments classified by asset type
30 September 2017 31 December 2016
(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 2017 1.25 101,369 101,369 1.35 - - -
CIMB Thai Bank Public Company Limited 25 October 2017 1.25 40,283 40,283 0.53 - - -
CIMB Thai Bank Public Company Limited 27 November 2017 1.25 50,000 50,000 0.66 - - -
CIMB Thai Bank Public Company Limited 31 December 2017 1.25 40,000 40,000 0.54 - - -
CIMB Thai Bank Public Company Limited 20 Janaury 2017 1.30 - - - 100,328 100,328 1.32
CIMB Thai Bank Public Company Limited 10 February 2017 1.30 - - - 40,000 40,000 0.53
CIMB Thai Bank Public Company Limited 23 February 2017 1.35 - - - 30,000 30,000 0.39
CIMB Thai Bank Public Company Limited 28 February 2017 1.35 - - - 40,130 40,130 0.53
CIMB Thai Bank Public Company Limited 13 March 2017 1.45 - - - 30,000 30,000 0.39
CIMB Thai Bank Public Company Limited 20 March 2017 1.45 - - - 30,097 30,097 0.40
Total fixed deposits 231,652 231,652 3.08 270,555 270,555 3.56
Total investments in securities 231,652 231,652 3.08 270,555 270,555 3.56
Total investments 7,533,811 100.00 7,622,205 100.00
- -
The accompanying notes are integral part of the financial statements.
6 (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of income
For the three-month period ended 30 September 2017
(Unit: Thousand Baht)
Note 2017 2016
Investment income
Rental and service income 134,289 133,463
Interest income 15 900 903
Income from rental and service guarantees 14, 15 - 15,956
Income from forfeiture of rental and service deposits - 22,860
Total income 135,189 173,182
Expenses
Trust management fee 13, 15 12,638 14,718
Trustee fee 13, 15 1,469 1,491
Registrar fee 13 549 663
Professional fees 178 146
Operating expenses 13, 15 13,502 47,344
Amortisation of deferred expenses 3,806 3,806
Interest expenses 15 16,545 18,340
Total expenses 48,687 86,508
Net investment income 86,502 86,674
Unrealised gains (losses) on investments
Net unrealised gains (losses) on investments - -
Total unrealised gains (losses) on investments - -
Net increase in net assets resulting from operations 86,502 86,674
The accompanying notes are an integral part of the financial statements.
7 (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of income
For the nine-month period ended 30 September 2017
(Unit: Thousand Baht)
Note 2017 2016
Investment income
Rental and service income 396,818 430,162
Interest income 15 2,917 2,939
Income from rental and service guarantees 14, 15 515 50,999
Income from forfeiture of rental and service deposits 3,598 22,860
Other income 9 -
Total income 403,857 506,960
Expenses
Trust management fee 13, 15 37,633 46,543
Trustee fee 13, 15 4,391 4,410
Registrar fee 13 1,712 1,779
Professional fees 532 443
Operating expenses 13, 15 45,306 88,864
Amortisation of deferred expenses 8 11,294 11,379
Interest expenses 15 51,893 55,816
Total expenses 152,761 209,234
Net investment income 251,096 297,726
Unrealised gains (losses) on investments
Net unrealised gains (losses) on investments 5 (49,491) 90,890
Total unrealised gains (losses) on investments (49,491) 90,890
Net increase in net assets resulting from operations 201,605 388,616
The accompanying notes are an integral part of the financial statements.
8 (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 2017
(Unit: Thousand Baht)
Note 2017 2016
Increase in net assets resulting from operations
during the period
Net investment income 251,096 297,726
Net unrealised gains (losses) on investments 5 (49,491) 90,890
Increase in net assets resulting from operations 201,605 388,616
Distributions to unitholders 12 (272,064) (251,772)
Increase (decrease) in net assets during the period (70,459) 136,844
Net assets at the beginning of period 5,746,869 5,601,315
Net assets at the end of period 5,676,410 5,738,159
The accompanying notes are an integral part of the financial statements.
9 (Unaudited but reviewed)
TICON Freehold and Leasehold Real Estate Investment Trust
Statement of cash flows
For the nine-month period ended 30 September 2017
(Unit: Thousand Baht)
2017 2016
Cash flows from operating activities
Increase in net assets resulting from operations 201,605 388,616
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 (965,038) (921,537)
Sales of investments in securities 1,003,941 961,282
Net purchases and sales of investments in securities 38,903 39,745
Amortisation of deferred expenses 11,294 11,379
Increase in accounts receivable from rental and service (20,150) (45,895)
Increase in accounts receivable from interest (59) (519)
Decrease (increase) in other receivables 3,723 (630)
Increase in deferred expenses - (5,399)
Increase in other assets (2,715) (5,455)
Increase (decrease) in accrued expenses (16,566) 2,660
Increase (decrease) in withholding tax payables 237 (46,755)
Increase (decrease) in deposits from rental and service 5,121 (13,817)
Decrease in other liabilities (1,953) (1,545)
Doubtful debts (reversal) (115) 34,347
Interest expenses 51,893 55,816
Net unrealised losses (gains) on investments 49,491 (90,890)
Net cash flows from operating activities 320,709 321,658
Cash flows from financing activities
Repayments of long-term loans (1,819,000) -
Cash received from issuance of debentures 1,800,000 -
Cash paid for interest expenses (20,008) (55,929)
Distributions to unitholders (272,064) (251,772)
Net cash flows used in financing activities (311,072) (307,701)
Net increase in cash and cash at banks 9,637 13,957
Cash and cash at banks at beginning of period 41,049 3,296
Cash and cash at banks at end of period (Note 6) 50,686 17,253
The accompanying notes are an integral part of the financial statements.
10 TICON Freehold and Leasehold Real Estate Investment Trust
Significant financial information
For the nine-month period ended 30 September 2017
(Unit: Thousand Baht)
2017 2016 2015
Operating performance (per unit)
Net asset value - beginning of period 10.1391 9.8823 10.0232
Income from investment operations
Net investment income 0.4430 0.5253 0.6000
Net realised gains on investments - - 0.0006
Net unrealised gains (losses) on investments (0.0873) 0.1603 (0.3693)
Total net income from investment operations 0.3557 0.6856 0.2313
Less: Distributions to unitholders (0.4800) (0.4442) (0.2175)
Less: Decrease in capital from unitholders - - (0.1934)
Increase (decrease) in net assets value during the period (0.1243) 0.2414 (0.1796)
Net asset value - end of period 10.0148 10.1237 9.8436
Ratio of increase in net assets resulting from
operations to average net assets during the period (%) 3.53 6.77 2.31
Significant financial ratios and additional information
Net assets - end of period (Thousand Baht) 5,676,410 5,738,159 3,371,440
Ratio of total expenses to average net assets
during the period (%) 2.67 3.65 2.85
Ratio of investment income to average net assets
during the period (%) 7.06 8.84 8.85
Weighted average investment turnover to average net asset ratio (%)* - - -
Average net assets during the period (Thousand Baht) 5,719,036 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.
11 (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 2017
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 24.03% and 15.44%, of the trust units, according to the latest registry of unitholders on 29 September 2017 (30 December 2016: 12.68% and 12.08% of the trust units).
12 (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 2016) 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 financial reporting standards and interpretations (revised 2016) and new accounting treatment guidance which are effective for fiscal years beginning on or after 1 January 2017. 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 2016.
13 (Unaudited but reviewed)
5. Investments in properties
(Unit: Thousand Baht)
30 September 31 December 2017 2016 Investments in properties - at cost Investments in properties - beginning of period/year 7,387,260 7,387,260 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 (35,610) (126,500) Add: Net unrealised gains (losses) from the revaluation of investments during the period/year (49,491) 90,890 Net unrealised losses on investments - end of period/year (85,101) (35,610) Investments in properties - end of period/year 7,302,159 7,351,650
On 18 May 2017, the Trust hired an independent appraiser to revalue its investments in 98 units using the income approach. It subsequently adjusted the value of these properties to their fair value of Baht 7,302 million, with a net unrealised loss from the revaluation of Baht 49 million.
The terms of leasehold on land and warehouses are between 27 years and 30 years and the Trust has obligations to demolish buildings and any construction on the land under the leasehold rights in order to handover the land back to lessor at the end of the lease term on the year 2043 and year 2045.
14 (Unaudited but reviewed)
6. Cash and cash at banks
As at 30 September 2017 and 31 December 2016, 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 2017 2016 2017 2016
Cash 20 5 - - Bank deposits Saving accounts Bangkok Bank Public Company Limited 49,624 40,558 0.375 - 0.750 0.375 - 0.750 Current accounts Bangkok Bank Public Company Limited 1,042 486 - -
Total bank deposits 50,666 41,044
Total 50,686 41,049
7. Accounts receivable from rental and service
The balances of accounts receivable from rental and service as at 30 September 2017 and 31 December 2016, aged on the basis of due dates are summarised below. (Unit: Thousand Baht) 30 September 31 December 2017 2016 Age of receivables Not yet due 197 763 Past due Not over 3 months 10,080 2,811 3 - 6 months - 128 6 - 12 months - 19,553 Over 12 months 28,341 8,775 Total 38,618 32,030 Unbilled operating leases receivables 57,026 43,464 Less: Allowance for doubtful debts (31,732) (31,847) Accounts receivable from rental and service, net 63,912 43,647
15 (Unaudited but reviewed)
8. Deferred expenses (Unit: Thousand Baht) 30 September 31 December 2017 2016 Deferred expenses - beginning of the period/year 51,974 61,759 Add: Increase during the period/year - 5,399 Less: Amortised during the period/year (11,294) (15,184) Deferred expenses - end of the period/year 40,680 51,974
9. Long-term loans (Unit: Thousand Baht) Interest rate 30 September 31 December Loan (% per annum) Repayment schedule 2017 2016
1 MLR less a rate Payment of principal by semi-annual which - 860,000 specified in the 1st principal payment on December 2021 agreement with the last payment within June 2024 2 MLR less a rate Payment of principal by semi-annual which - 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
The Trust drawn long-term loans from Bangkok Bank Public Company Limited for its investments in properties.
The long-term loans were unsecured and the loan agreements contained 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.
During the current period, the Trust made full repayment of long-term loan before the maturity dates.
10. Debentures
Number of debenture (Unit) Amount (Thousand Baht) Type of 30 September 31 December 30 September 31 December debenture Interest rate Age Maturity date 2017 2016 2017 2016 Unsubordinated and unsecured debentures - No.1/2017 - Tranche I Fixed rate of 2.98% p.a 3 years 5 April 2020 800,000 - 800,000 - - No. 1/2017 - Tranche II Fixed rate of 4.18% p.a 7 years 5 April 2024 1,000,000 - 1,000,000 - Total debentures - at face value 1,800,000 - 1,800,000 -
Interest on debentures is due for repayment on a semi-annually basis on 5 April and 5 October of every years.
16 (Unaudited but reviewed)
The debentures contained certain restriction, such as the limitation of debt-to-total assets ratio of not exceed 60% at the year end throughout the age of debentures, the resistance of additional borrowing, or obligation except those incurred under normal business or operations.
11. Retained earnings
(Unit: Thousand Baht) 30 September 31 December 2017 2016 Net accumulated income from investments 691,649 294,525 Net accumulated realised gains on investments 211 211 Net accumulated unrealised losses on investments (35,610) (126,500) Accumulated distributions to unitholders (451,444) (108,984) Retained earnings - beginning of period/year 204,806 59,252 Add: Increase in net assets resulting from operations during the period/year 201,605 488,014 Less: Distributions to unitholders during the period/year (272,064) (342,460) Retained earnings - end of period/year 134,347 204,806
12. Distributions to unitholders
During the periods, the Trust paid distributions to its unitholders as follows.
Declared date For the operations as from Per unit Total (Baht) (Thousand Baht) 23 February 2017 1 October 2016 - 31 December 2016 and retained earnings 0.1600 90,688 12 May 2017 1 January 2017 - 31 March 2017 and retained earnings 0.1600 90,688 8 August 2017 1 April 2017 - 30 June 2017 and retained earnings 0.1600 90,688 Total distributions for the period 2017 0.4800 272,064
17 (Unaudited but reviewed)
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
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 2.00 % per annum of net income from rental and service agreement on warehouse buildings 4.00 % 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 3.00 % 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.
18 (Unaudited but reviewed)
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 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
Relationships with related parties are as follows.
Company’s Name Relationship Details of Business Transactions TICON Industrial - The Trust’s major unitholder - Entered into the lease agreements on Connection Public - Property Manager land and factories as the lessor or Company Limited sub lessor - Entered into the selling agreements on land and factories as the seller - Entered into Property Management Agreement, as the property manager TICON Logistics Park - Property Manager - Entered into the lease agreements on Company Limited land and warehouses as the lessor or sub lessor - Entered into the selling agreements on warehouses as the seller - Entered into Property Management Agreement, as the property manager TICON Management - The Trust Manager - Receive base fee for managing the Company Limited Trust - Receive performance fee for managing main Trust’s properties - Receive incentive fee and commission from the Trust BBL Asset Management - Trustee - Receive Trustee fee Company Limited
19 (Unaudited but reviewed)
Company’s Name Relationship Details of Business Transactions Bangkok Bank Public - A director is as the same - Receive deposit and provide loan to Company Limited family member of the the Trust major shareholder of the Trust’s major unitholder Mitsui & Co. (Asia Pacific) - The major shareholder of - The Trust’s unitholder Pte. Ltd. the Trust manager TICON Demco Power 6 - Joint venture of the Trust’s - Receive rental and service income Co., Ltd. major unitholder TICON Demco Power 11 - Joint venture of the Trust’s - Receive rental and service income Co., Ltd. major unitholder
During the periods, 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 are summarised as follows:
(Unit: Thousand Baht)
For the three-month For the nine-month
periods ended periods ended
30 September 30 September
2017 2016 2017 2016 Pricing policy
TICON Logistics Park Company Limited
Income from rental and service - 15,951 515 50,994 As specified in property management
guarantees agreement (Note 14)
Rental expenses 2,040 1,786 6,053 5,610 Contract price
Common area service fee 3,558 4,858 10,894 10,541 Contract price
Repair and maintenance expenses 395 206 839 634 Actual charge
Utility expenses 8 25 112 73 Actual charge
TICON Industrial Connection Public Company Limited
Common area service fee 33 44 118 44 Contract price
Repair and maintenance expenses - 26 14 111 Actual charge
Distributions paid 10,951 11,456 32,852 33,660 As declared
TICON Management Company Limited
REIT Management fee 12,638 14,718 37,633 46,543 As detailed in Note 13
BBL Asset Management Company Limited
Trustee fee 1,469 1,491 4,391 4,410 As detailed in Note 13
Bangkok Bank Public Company Limited
Interest income 37 58 154 55 Market rate
Financial advisor fee - - 2,160 - Contract amount
Interest expense 4,347 18,340 28,160 55,816 As detailed in Note 9 and Note 10
Mitsui & Co. (Asia Pacific) Pte. Ltd.
Distributions paid 5,600 5,573 16,800 14,867 As declared
20 (Unaudited but reviewed)
(Unit: Thousand Baht)
For the three-month For the nine-month
periods ended periods ended
30 September 30 September
2017 2016 2017 2016 Pricing policy
TICON Demco Power 6 Co., Ltd.
Rental and service income 41 41 123 123 Contract price
TICON Demco Power 11 Co., Ltd.
Rental and service income 19 19 57 57 Contract price
The balances of the accounts as at 30 September 2017 and 31 December 2016 between the Trust and those related companies are as follows:
(Unit: Thousand Baht) 30 September 31 December 2017 2016 BBL Asset Management Company Limited Accrued trustee fee 493 515 TICON Management Company Limited Accrued trust management fee 4,275 4,773 TICON Industrial Connection Public Company Limited Interest payable 11 - TICON Logistics Park Company Limited Accounts receivable from rental and service - 3 Other receivables 310 2,581 Prepaid rental expenses 2,040 - Accrued expenses 1,547 1,255 Bangkok Bank Public Company Limited Interest receivables 42 6 Long-term loans - 1,819,000 Debentures 470,000 - Interest payable 8,458 305 TICON Demco Power 6 Co., Ltd. Accounts receivable from rental and service 14 14 Deposit payables 54 54 TICON Demco Power 11 Co., Ltd. Accounts receivable from rental and service 6 6 Deposit payables 25 25
21 (Unaudited but reviewed)
Long-term loans from related party
The outstanding balances and the movements of the borrowings between the Trust and its related party as at 30 September 2017 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 2016 period period 2017 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.
16.2 As at 30 September 2017 and 31 December 2016, the Trust has future minimum lease payments required under non-cancellable operating leases contracts in respect of sub-leases and common service as follows.
(Unit: Million Baht) 30 September 31 December 2017 2016 Payable: In up to 1 year 20.6 20.3 In over 1 and up to 5 years 39.0 47.2 In over 5 years 249.8 259.1
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.
22 (Unaudited but reviewed)
18. Events after the reporting period
18.1 On 19 October 2017, the Extraordinary General Meeting of Unitholders of the Trust No. 1/2017 passed in the following resolutions:
a) Approved the conversion of TICON Property Fund, TPARK Logistics Property Fund and TICON Industrial Growth Leasehold Property Fund (“the Funds”), the Conversion Plan (including the conversion of the Funds into the Trust), whereby the Management Company of the Funds are to transfer assets and obligations of the Fund to the Trust in exchange for trust units of the Trust and cash, the swap ratio as addressed in the notification letter dated 12 September 2017 with respect to the record date determine the name of the trust unitholders who are entitled to attend the trust unitholders’ meeting to consider the support of the conversion of the property funds into the trust, are as follow:
1) At the rate of 1 investment unit of TICON Property Fund to 0.9874 trust unit of the Trust with Baht 1.6977 cash per unit. 2) At the rate of 1 investment unit of TPARK Logistics Property Fund to 1.0129 trust units of the Trust with Baht 1.7415 cash per unit. 3) At the rate of 1 investment unit of TICON Industrial Growth Leasehold Property Fund to 0.8673 trust unit of the Trust with Baht 1.4911 cash per unit and cash not exceeding Baht 294 million for the repayment of the existing loan of TICON Industrial Growth Leasehold Property Fund.
b) Approved the decrease of paid-up capital of the Trust if the additional investment in assets after the conversion of the Funds (which include assets under right to invest in the assets of TICON Industrial Connection Plc. and/or its subsidiaries) and the additional investment plan after the conversion of the Funds cannot be proceed totally or partially within 31 December 2018, whereby such capital decrease shall not exceed Baht 3,500 million in total.
c) Approved the borrowing of loan not exceeding Baht 3,794 million and the provision of collateral in related to the Trust’s loan for investment in the assets of the Funds from the conversion and another loan of not exceeding Baht 3,500 million for investment in the additional assets after the conversion or for the payment of the dividend and/or the return from the capital decrease.
d) Approved the amendment of the Trust’s trust deed to support the conversion of the Funds into the Trust and the amendment of the trustee’s compensation.
23 (Unaudited but reviewed)
e) Approved the amendment of the trust manager’s fee in relation to performance fee and incentive fee as specified under the trust manager appointment agreement to be as follows:
Expenses Percentage - Performance fee 3.00% per annum of net income - Incentive fee 5.00% per annum of net profit
18.2 On 9 November 2017, a meeting of the Trust Manager’s Board of Directors approved the payment of a distribution to the unitholders of Baht 0.1547 per unit from the operating results for the period as from 1 July 2017 to 30 September 2017 and retained earnings, and Baht 0.0481 per unit from the operating results for the period as from 1 October 2017 to 31 October 2017 and retained earnings, or a total amount of Baht 114.95 million, which is to be paid on 7 December 2017.
19. Approval of interim financial statements
These interim financial statements were authorised for issue by the authorised director of the Trust Manager on 9 November 2017.
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