LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Risk factorsprofit, LMIR Trust’s income, cash flow and ability to make distributions will be adversely affected. Inaddition, if the Singapore SPCs have insufficient cash flows or distributable profits or surplus, or theSingapore SPCs do not make the expected level of distributions in any financial year, LMIR Trust’s income,cash flow and ability to pay or maintain distributions to Unitholders, may be adversely affected.No assurance can be given as to LMIR Trust’s ability to pay or maintain distributions. Nor is there anyassurance that the level of distributions will increase over time, that there will be contractual increases inrent under the leases of the Properties or that the receipt of rental income in connection with expansion ofthe properties or future acquisitions of properties will increase LMIR Trust’s cash flow available fordistribution to Unitholders.Market and economic conditions may affect the market price and demand for the Units.Movements in domestic and international securities markets, economic conditions, foreign exchangerates and interest rates may affect the market price of, and demand for, the Units. In particular, an increasein market interest rates may have an adverse impact on the market price of the Units if the annual yield onthe price paid for the Units gives investors a lower return compared to other investments.The NAV per Unit may be diluted if further issues are priced below the then NAV per Unit.The Trust Deed contemplates issues of new units, the Offering Price for which may be above, at or belowthe then NAV per Unit. Where new units, including units which may be issued to the Manager in payment ofthe Manager’s management fees, are issued at less than the current NAV per Unit, the NAV of eachexisting Unit may be diluted.The laws, regulations and accounting standards in Indonesia, Singapore or countries in whichfuture acquisitions may be situated, may change.LMIR Trust may be affected by the introduction of new or revised legislation, regulations or accountingstandards. Accounting standards in Indonesia and Singapore are subject to changes as accountingstandards in both countries become more aligned with international accounting standards. The financialstatements of LMIR Trust and the Singapore SPCs may be affected by the introduction of such revisedaccounting standards. The extent and timing of these changes in accounting standards are unknown andare subject to confirmation by the relevant authorities. The Manager has not quantified the effects of theseproposed changes and there can be no assurance that these changes will not have a significant impact onthe presentation of LMIR Trust’s financial statements or on LMIR Trust’s results of operations. Suchchanges may adversely affect the ability of LMIR Trust to make distributions to Unitholders. There can beno assurance that any such changes in laws, regulations and accounting standards will not have anadverse effect on the ability of the Manager to carry out LMIR Trust’s investment strategy or on theoperations and financial condition of LMIR Trust.LMIR Trust may be unable to comply with the conditions for the tax exemption and tax ruling,or the tax exemption or tax ruling may no longer apply.LMIR Trust has obtained an approval from the Inland Revenue Authority of Singapore (“IRAS”) to exemptfrom Singapore income tax any interest received by the Singapore SPCs from the Indonesian SPCs that ispaid out of the underlying rental income derived from the Properties. This tax exemption is given underSection 13(12) of the Income Tax Act.LMIR Trust has also received an advance ruling from IRAS issued under Section 108 of the Income Tax Actwhich confirms that a return of capital by LMIR Trust is not a taxable distribution to Unitholders.The approval for the tax exemption under Section 13(12) of the Income Tax Act and the advance rulingfrom the IRAS issued under Section 108 of the Income Tax Act are subject to LMIR Trust satisfying thestipulated conditions. Where these conditions are not satisfied, or are no longer satisfied by LMIR Trust,the tax exemption and ruling may no longer apply.The approval and tax ruling are also granted based on the facts presented to IRAS, as well as the IRAS’scurrent interpretation of the existing tax laws. Where the facts turn out to be different from thoserepresented to IRAS, or where there is a subsequent change in the tax laws, or a change in the84