Circular - Lippo Malls Indonesia Retail Trust - Investor Relations

LMIR Trust will in turn receive dividends or proceeds from the redemption (at cost) of preferenceshares or a combination of both from the relevant Singapore subsidiaries. Provided that theseSingapore subsidiaries are residents of Singapore for income tax purposes, the dividendsreceived by LMIR Trust will be one-tier (tax-exempt) dividends and hence exempt from Singaporeincome tax in the hands of LMIR Trust. The proceeds from redemption (at cost) of preferenceshares received by LMIR Trust are capital receipts and not subject to Singapore income tax.Distributions to UnitholdersDistributions made by LMIR Trust out of the income or cashflow generated from the ProposedProperties may comprise either or both of the following two components:(i)(ii)tax-exempt income component (“Tax-Exempt Income Distributions”); andcapital component (“Capital Distributions”).Tax-Exempt Income Distributions refer to distributions made by LMIR Trust out of its tax-exemptincome (which comprises mainly the one-tier (tax-exempt) dividends that it will receive from therelevant Singapore subsidiaries). Such distributions are exempt from Singapore income tax in thehands of Unitholders. No tax will be deducted at source or withheld on such distributions.For this purpose, the amount of Tax-Exempt Income Distributions that LMIR Trust can distributefor a distribution period will be to the extent of the amount of tax-exempt income that it hasreceived and is entitled to receive in that distribution period. Any distribution made for adistribution period out of profits or income which LMIR Trust is entitled to receive as its owntax-exempt income after the end of that distribution period will be treated as a capital distributionand the tax treatment described in the next paragraph on “Capital Distributions” will apply. Theamount of such tax-exempt income that is subsequently received may be used to frank tax-exemptincome distributions for subsequent distribution periods.Capital Distributions refer, inter alia, to distributions made by LMIR Trust out of proceeds receivedfrom the redemption of preference shares. Unitholders will not be subject to Singapore income taxon such distributions. These distributions are treated as returns of capital for Singapore incometax purposes and the amount of Capital Distributions will be applied to reduce the cost of Unitsheld by Unitholders. Accordingly, the reduced cost base will be used for the purpose of calculatingthe amount of taxable trading gains for those Unitholders who hold Units as trading or businessassets and are liable to Singapore income tax on gains arising from the disposal of Units. If theamount of Capital Distributions exceeds the cost or the reduced cost, as the case may be, ofUnits, the excess will be subject to tax as trading income of such Unitholders.C-2