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

Profit forecast and profit projectionrepayment of the shareholder’s loans by the Indonesian SPCs is made every quarter and this repaymentsum is equal to the lower of:• Depreciation expense for the period; and• Profit after taxes and before depreciation.(VIII)Interest on Shareholder’s LoanThe Manager has assumed that the interest rates on the shareholder’s loans extended by SingaporeSPCs to the Indonesian SPCs will be 14.0% per year. It is assumed the Indonesian SPCs will withhold10.0% tax on the interest expense and the interest earned by the Singapore SPCs will not be subject to tax.(IX)Distributable IncomeDistributable Income comprises:(a)Distribution from operationsDistribution from operations includes dividend income, after deduction of applicable expenses, receivedfrom the Target Singapore SPCs. The income of the Target Singapore SPCs is derived mainly frominterest income earned and dividends from the Indonesian SPCs. The Manager has assumed that LMIRTrust will receive the dividend income from the Target Singapore SPCs in the same distribution period towhich the underlying Indonesian profits out of which the dividends are paid relate.(b)Return on capitalReturn on capital comprises the amounts received by LMIR Trust from the redemption of its investment inthe redeemable preference shares in the Target Singapore SPCs.100.0% of the tax-exempt income (after deduction of applicable expenses) and capital receipts will bedistributed to Unitholders for Forecast Period 2007, Projection Year 2008 and Projection Year 2009, eitherin the form of distribution from operations or return on capital. Thereafter, the Manager will distribute atleast 90.0% of Distributable Income.(X)Capital ExpenditureAn allowance for expected capital expenditure on the Retail Malls has been included in Forecast Period2007, Projection Year 2008 and Projection Year 2009 and it is assumed that the capital expenditure will befunded from internal cash flows. Capital expenditure incurred are capitalised as part of the DepositedProperty and has no impact on distribution other than the Manager’s Base Fee and Trustee’s fee. TheManager has assumed that the following capital expenditure will be incurred:Forecast Period Projection Year Projection Year200720082009(S$’000) (S$’000) (S$’000)Capital Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 987 814The Manager has assumed that no capital expenditure will be incurred for the Retail Spaces for ForecastPeriod 2007, Projection Year 2008 and Projection Year 2009 (see “Certain Agreements Relating to LMIRTrust and the Properties—Description of the Master Lease Agreements”).(XI)Investment PropertiesThe Manager has assumed that the value of the Properties will only increase by the amount of forecastand projected capital expenditure described in “—Capital Expenditure” above for the Forecast Period2007, the Projection Year 2008 and the Projection Year 2009.106