ATRIUM REAL ESTATE INVESTMENT - malaysiastock.biz 10 ATRIUM REAL ESTATE INVESTMENT TRUST Annual Report 2010 Atrium Puchong Property Portfolio Property Address Title details Property

1

C o n t e n t s

1ATRIUM REAL ESTATE INVESTMENT TRUST

Annual Report 2010

3 Our Mission

6 Salient Features of the Fund

8 Property Portfolio

12 Chairman’s Statement

14 Structure of Atrium REIT

15 Board of Directors and Management/ Corporate Directory

16 ProfileofDirectors

17 ProfileofChiefExecutiveOfficer

18 Performance Data

20 StatementofCorporateGovernance

25 Financial Statements •Manager’sReport •StatementbyDirectorsoftheManager •StatutoryDeclaration •Trustee’sReport •IndependentAuditors’ReporttotheUnitholders •StatementofFinancialPosition •StatementofComprehensiveIncome •StatementofChangesinNetAssetValue •StatementofCashFlow •NotestotheFinancialStatements

69 AnalysisofUnitholdings


Annual Report 2010

Our Mission

Year on Year Comparison

Our Achievement in 2010

Distributions For 2010

To maximise profits in order to reward unitholders with a competitive rate of return for their investments through regular and stable distributions and achieving long-term growth in distributions and Net Asset Value per unit.

2010 2009 2008 20071

RM ‘000 RM ‘000 RM ‘000 RM ‘000

Net Income 11,912 8,599 17,112 7,961

Earnings Per Unit (Sen) - realised 8.63 7.06 8.47 6.54

- unrealised 1.15 - 5.58 -

Distribution to Unitholders 10,475 8,465 10,231 7,917

Distribution Per Unit (Sen) 8.60 6.95 8,40 6.50

Asset Under Management 163,000 161,600 161,600 154,800

Number of Properties 4 4 4 4

Occupancy Rate 100% 100% 100% 100%

Net Asset Value Per Unit (RM) 1.05 1.04 1.04 0.98

2010 2009 Variance RM ‘000 RM ‘000 %

Net Income 11,912 8,599 38.5

Earnings Per Unit (Sen) 9.78 7.06 38.5

Distribution to Unitholders 10,475 8,465 23.7

Distribution Per Unit (Sen) 8.60 6.95 23.7

Asset Under Management 163,000 161,600 0.9

Number of Properties 4 4 -

Occupancy Rate 100% 100% -

Net Asset Value Per Unit (RM) 1.05 1.04 1.0

1st Quarter 2.10 sen

2nd Quarter 2.15 sen

3rd Quarter 2.15 sen

4th Quarter2 2.20 sen

1. For the financial period from 2 April 2007 (date of commencement) to 31 December 2007.2. To be paid on 4 March 2011.

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6 ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT TRUST TRUST TRUST

Annual Report 2010Annual Report 2010Annual Report 2010

Salient Features Of The Fund

Nameoffund :

Fundcategory :

Fundtype :

Investmentobjectives :

Fundinvestmentstrategy :

TermoftheTrust :

ApprovedsizeofFund :

Authorisedinvestments :

Financialyearend :

Distributionpolicy :

Borrowinglimitations :

Revaluationpolicy :

Redemptionpolicy :

Minimuminitialinvestment :

Minimumadditionalinvestments :

Investorprofile :

Boardlot :

Quotation :

BursaMalaysiaStockNumber :

Atrium REIT

Real Estate

Growthandincome

Tomaximiseprofitsinordertorewardunitholderswithannualstabledistributionsof

incomeandtoacquirequalityassets to achieve long-termgrowth in theNetAsset

ValueperunitoftheFund

Aimtoachieve theprimaryobjectivesof theFundby implementing investmentand

growth strategies such as organic growth strategies, acquisition strategies and

financingstrategies.

AtriumREITwillcontinueitsoperationuntilsuchtimeasdeterminedbytheTrustee

andtheManagerasprovidedundertheprovisionofClause19oftheTrustDeeddated

20November2006.

121,801,000Units

- Atleast50%ofthetotalassetvalueofAtriumREITmustbeinvestedinrealestates

and/or single purpose companies at all times; and

- Investment in non-real estate related assets and/or cash, deposits and money

marketinstrumentsmustnotexceed25%ofAtriumREIT’stotalassetvalue.

31December

At least 90% of the distributable income ofAtriumREIT shall be distributed semi-

annually or at such other intervals as determined by theManagers in its absolute

discretion,inarrears

Upto50%ofthetotalassetvalueoftheFundatthetimetheborrowingisincurred.

Therealestatesshallberevaluedatleastonceevery(3)yearsfromthedateofthelast

valuation(orsuchothertimesasrequiredundertheSecuritiesCommissionGuidelines

onREITs),oratanytimewheretheTrustee,theManagerortheindependentAuditor

appointedbyAtriumREITreasonablybelievesthattherehasbeenasignificantchange

inthevalueofrealestates.

UnitholdershavenorighttorequesttheFundtorepurchasetheirunitswhiletheunits

arelisted.

Minimumof100units

Multiplesof100units

Suitableforinvestorswhounderstandtherisksrelatedtotherealestateindustryand

expecttobenefitfromtheperiodicdistributionofincomeandlongtermgrowthofthe

Fund.

100unitsperboardlot

Main Board of Bursa Malaysia Securities Bhd

ATRIUM5130

8 ATRIUM REAL ESTATE INVESTMENT TRUST

Annual Report 2010

Property

Address

Title details

Property type

Description

Year of completion

Tenure

Existinguse

Parking spaces

Date of acquisition

Cost of acquisition

Tenant

Occupancy

Lease Period

Majorcapitalexpenditure

Encumbrances

Limitation in title/interest

Latestvaluation

Basisofvaluation

Dateoflastvaluation

Valuer

FairValueadjustment

Netbookvalue

Atrium Shah Alam 1

Property Portfolio

AtriumShahAlam1

Lot1-8,PersiaranJubliPerak,Seksyen22,40300ShahAlam,SelangorDarulEhsan,Malaysia

GRN177482(formerlyknownasH.S.(D)No.80053)forLotNo.38264(formerlyknownasLot

No.P.T.14366),PekanBaruHicom(formerlyknownasMukimofDamansara),DistrictofPetaling,

State of Selangor Darul Ehsan

Industrial

AsinglestoreywarehouseandafourstoreyofficebuildingwithatotalNetLettableAreameasuring

approximately311,736sq.ft.

2005

Freehold

Warehouseandoffice

191carbays,105motorcyclebays&30lorrybays

2April2007

RM57,200,000

ExelProperties(Malaysia)SdnBhd*

100%

5years,expiringon31December2010*

Nil

ThepropertyischargedtoafinancialinstitutiontosecureaShortTermRevolvingCreditfacility

ofRM45million

None

RM62,000,000

Income,costandcomparisonmethods

31December2010

FirstPacificValuersPropertyConsultantsSdnBhd

RM600,000

RM61,400,000

* The DHL Group via one of its subsidiaries, DHL

SupplyChain(Malaysia)SdnBhdhasconfirmedthat

itwillberenewingtherentalforAtriumShahAlam1

for a period of 3 years, commencing on 1 January

2011 and expiring on 31 December 2013. The

renewalisunderDHLSupplyChain(Malaysia)Sdn

BhdasExelGrouphasmergedwithDHLGroup.


Annual Report 2010

Atrium Shah Alam 2Property

Address

Title details

Property type

Description

Year of completion

Tenure

Existinguse

Parking spaces

Date of acquisition

Cost of acquisition

Tenant

Occupancy

Lease Period


Encumbrances


Latestvaluation

Basisofvaluation

Dateoflastvaluation

Valuer

FairValueadjustment

Netbookvalue

Atrium Shah Alam 2

Lot7A,PersiaranJubliPerak,Seksyen22,40300ShahAlam,SelangorDarulEhsan,Malaysia

LotNo.P.T.90heldunderH.S.(D)No.188265,PekanBaruHicom(formerlyMukimofDamansara),

DistrictofPetaling,StateofSelangorDarulEhsan

Industrial

A single storeywarehouse and a double storey office buildingwith a total Net LettableArea

measuringapproximately258,702sq.ft.

2004

Freehold

Warehouseandoffice


2April2007

RM49,100,000

CEVALogistics(Malaysia)SdnBhd

100%

3years,expiringon31May2012

Nil

None

None

RM54,500,000


31December2010


RM800,000

RM53,700,000

Property Portfolio


Annual Report 2010

Atrium Puchong

Property Portfolio

Property

Address

Title details

Property type

Description

Year of completion

Tenure

Existinguse

Parking spaces

Date of acquisition

Cost of acquisition

Tenant

Occupancy

Lease Period


Encumbrances


Latestvaluation

Basisofvaluation

Dateoflastvaluation

Valuer

FairValueadjustment

Netbookvalue

Atrium Puchong

No.2 Jalan PPU 1, Taman Perindustrian PuchongUtama, Batu 12½ Jalan Puchong, 47100

Puchong,SelangorDarulEhsan,Malaysia

Lot No. 65108 held under Geran No. 44178, Pekan Puchong Perdana (formerly Mukim of

Petaling),DistrictofPetaling,StateofSelangorDarulEhsan

Industrial

AsinglestoreywarehouseandafourstoreyofficebuildingwithatotalNetLettableAreameasuring

approximately203,994sq.ft.

2002

Freehold

Warehouseandoffice


2April2007

RM38,500,000

DHLSupplyChain(Malaysia)SdnBhd

100%

4years,expiringon18September2014

Nil

None

None

RM38,500,000

Income,costandcomparisonmethod

31December2010


Nil

RM38,500,000


Annual Report 2010

Atrium RawangProperty

Address

Title details

Property type

Description

Year of completion

Tenure

Existinguse

Parking spaces

Date of acquisition

Cost of acquisition

Tenant

Occupancy

Lease Period


Encumbrances


Latestvaluation

Basisofvaluation

Dateoflastvaluation

Valuer

FairValueadjustment

Netbookvalue

AtriumRawang

Lot23,Rawang Integrated IndustrialPark,JalanBatuArang,48000Rawang,SelangorDarul

Ehsan,Malaysia

Geran205542,Lot19007,Section20,TownofRawang(formerlyMukimofRawang),Districtof

Gombak,SelangorDarulEhsan

Industrial

AdoublestoreyofficeandfactorybuildingwithatotalNetLettableAreameasuringapproximately

35,236sq.ft.

2001

Freehold

Factoryandoffice


2April2007

RM10,000,000

UnileverFoods(Malaysia)SdnBhd

100%

10years,expiringon31October2011

Nil

ThepropertyischargedtoafinancialinstitutiontosecureaShortTermRevolvingCreditfacility

ofRM45million

None

RM8,000,000


31December2010


Nil

RM8,000,000

Property Portfolio

Dear UnitholderS

On behalf of the Board of Directors of Atrium REIT Managers Sdn Bhd (“Manager”), I have the pleasure of presenting to you the Annual Report of the Atrium Real Estate Investment Trust (“Atrium REIT” or “Trust”) for the financial year ended 31 December 2010 (“FY2010”).

Chairman’s Statement

12 ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT TRUST TRUST TRUST

Annual Report 2010Annual Report 2010Annual Report 2010

Financial Performance

We are pleased to report that a solid performance wasachieved byAtriumREIT for FY2010. For FY2010,AtriumREIT recorded a 9.14% increase in gross revenues toRM14.170millionascomparedtoRM12.984millionfortheprevious corresponding financial yearended31December2009 (“FY2009”). Correspondingly, Net Income (realised)fortheyearrosetoRM10.512millioncomparedtoRM8.599millionforFY2009,representinganincreaseof22.25%.TheTrust’s financial performance was boosted by revaluationgainsofRM1.400million for itsportfolio,contributing toanincrease in Net Asset Value (“NAV”) from RM1.0378 perunitasat31December2009toRM1.0496perunitasat31December2010.

Distribution to Unitholders

Atrium REIT has consistently demonstrated its ability todeliversustainableandstabledistributableincomesinceitslisting in2007.Wearepleased to report that for thefirst3quartersofFY2010,AtriumREIThasdistributed6.40senperunit.For the4thquarterofFY2010, theBoardofDirectorsof theManager is pleased todeclarea final distributionof2.20senperunit,representingatotaldistributionperunitof

8.60senforFY2010,whichwillbepayableon4March2011.ThedistributableyieldofAtriumREITfor2010isacreditable8.11%basedontheclosingmarketpriceofRM1.06perunitforAtriumREITasat31December2010.

Operations Review

TheleasesforAtriumShahAlam1andAtriumPuchongwhichexpiredduringtheFY2010havebeenrenewed,pendingtheexecutionoftheagreements,forafurthertermof3yearsand4yearsrespectively.Currently,allofAtriumREIT’spropertiesaretenantedbysubsidiariesofMNCs,whomareestablishedmarket leaders in their respective industries, an indicationofthequalityofthetenantsandpropertiesownedbyAtriumREIT.

For FY2010, a revaluation exercise was carried out onAtriumShahAlam1,AtriumShahAlam2,AtriumPuchongand Atrium Rawang by an independent registered valuer,First Pacific Valuers Property Consultants Sdn Bhd (“FirstPacific”)pursuanttoFinancialReportingStandard140whichstatesthatInvestmentPropertieshavetobestated/disclosedatFairValueattheendofeachfinancialyear.FirstPacifichas adopted a combination of valuation methods in theirassessmentsandthevalueshavebeendulyreflectedinthefinancialstatements.


Annual Report 2010

The proposed acquisition planned for FY2010 did notmaterialize because the valuation of the subject propertybased on the income method by the independent valuerscould not meet the offer price. Prices of industrial land inprimelocationshaveincreasedtremendouslyastheeconomybouncedbackandthestockexchangereachednewhighs,showing signs that the stimulus packages introduced aftertheglobal financial crisishaveworked themselves into thesystem.Consequently,pricesofindustrialpropertiesinprimelocationshavealsoincreasedsignificantlydespitetherentalsremainingstable,makingitdifficulttoacquireyieldaccretiveassets.

The Manager will continue to explore new acquisitionopportunities, with focus on industrial properties thatmeetour investment criteria i.e. located in prime locations withgood infrastructures and tenanted by leading businessesonlongtermleasestoenhancetheassetvalueandincomegrowthoftheTrust.

Economic Overview

Theglobaleconomymadearobustrecoveryinthe1stquarterof 2010 but softened in the subsequent quarters, giventheweakerglobal trade conditionsand the sovereigndebtproblemintheEurozone.However,resilientAsianeconomiescontinuetoprovidestrongsupportasAsiacontinuestoleadglobal growth through their resilient domestic demand asevidenced by the twin economic engines of Asia namelyChinaandIndia.TheIMF’sglobaleconomicgrowthforecastfor 2011 has been revised downward from 4.3% to 4.2%inOctober’sWorld EconomicOutlook (WEO), indicating amoderationingrowthformanycountriesinthenearterm.

InMalaysia,despiteasharprebound in2010following the1.7%contractionin2009,moderationineconomicactivitiesisexpectedtotakeplace,largelyattributedtotheweakeningoftheexternalsectorin1sthalfof2011,asdemandforthecountry’s major exports such as electrical and electronics(E&E)manufacturesbyadvancedeconomiessoften.

Howeverthisisexpectedtobeoffsetbycommoditieswhereprices of crude palm oil and crude oil are anticipated to remainrelativelyfirm.Thedomesticfrontwillcontinuetobesupported by private consumption which has largely beenresponsibleforthecountry’sgrowthsincetheAsianFinancialCrisisinthelate1990s.ThegrowthoftheMalaysianeconomywill be dependent on two major factors, namely the globaleconomicdevelopmentandthestrengthofprivateconsumptioninsupportingdomesticdemand.

Changes to the Board and Management

On behalf of the Board of Directors, I would like to welcomeMr.ChanKumChongandMsChuahKuiPekasthenewChiefExecutiveOfficer and Chief OperatingOfficer of theManagerrespectively.MrChanandMsChuahwerepreviouslytheActingChief Executive Officer and Head, Asset Management of theManagerrespectively,priortothenewappointments.

Appreciation

OnbehalfoftheBoardofDirectorsofAtriumREITManagersSdn Bhd, I would like to thankmy fellow Boardmembersfor their advice and contributions throughout the year, ourtenantsandbusinessassociates,theregulatoryauthorities,investors and unitholders, for their strong support. I wouldalso like to thank the management team for the concerted effortandcontributionin2010andIlookforwardtoanotherfruitful yearaheadwith thecontinuedsupport ofmy fellowBoardmembersandourvaluedstakeholders.

Dato’ Dr Ir Mohamad Khir Bin HarunChairmanAtrium REIT Managers Sdn Bhd21 Febuary 2011

Chairman’s Statement


Annual Report 2010

STRUCTURE of Atrium Reit

Management Services

Rental income

Propertymanagementservices

Distributionsin the form ofdividendsand other distributions

BHLB Trustee (the Trustee)

Subject Properties-AtriumShahAlam1-AtriumShahAlam2-AtriumPuchong-AtriumRawang

Atrium REIT Managers(the Manager)

Real estate assets

OtherAuthorisedInvestments

Azmi & Co Building Services(thePropertyManagementCompany)

Management fees

Ownershipofassets(VestedInTrustee)

Propertymanagement

fees

InvestmentinAtrium REIT

Trustee fees

Actsonbehalfof unitholders

Unitholders

The followingdiagram illustrates the structure ofAtriumREITand indicates the relationships betweenAtriumREIT, theManager,theTrustee,thePropertyManagementCompanyandtheunitholders:

14

BOARD OF DIRECTORS

Dato’ Dr Ir Mohamad Khir Bin HarunChairmanandNon-IndependentNon-ExecutiveDirector

Wong Sui EeExecutiveDirector

How Hu SonIndependentNon-ExecutiveDirector

Tor Peng SieIndependentNon-ExecutiveDirector

Soong Kwong HengIndependentNon-ExecutiveDirector

COMPANY SECRETARY

Ng Yen Hoong (Ls 008016) Lim Poh Yen (maicsa 7009745)

MANAGEMENT

Wong Sui EeExecutive Director

Chan Kum ChongChiefExecutiveOfficer

Chuah Kui PekChiefOperatingOfficer

Lee Hooi HoongChiefFinancialOfficer

Corporate Directory

MANAGERAtrium REIT Managers Sdn Bhd (710526-V)Principalplaceofbusiness:36-2,Jalan5/101C,OffJalanKaskasJalanCheras56100KualaLumpurTel:03-91322810 Fax:03-91329810Website:www.atriumreit.com.my

Registered office:Level18,TheGardensNorthTowerMidValleyCity,LingkaranSyedPutra59200KualaLumpurTel:03-22648888Fax:03-22822733,03-22648997

TRUSTEEBHLB Trustees Berhad (313031-A)Principalplaceofbusiness:Level7,WismaAmanahRayaBerhadJalanSemantanDamansaraHeights50490KualaLumpurTel:03-20848888Fax:03-20955473

AUDITORSBDO (AF 0206) Chartered Accountants

PROPERTY MANAGEMENT COMPANY Azmi & Co Building Services Sdn Bhd (475267-U)A9-1-1,JalanAmpangUtama2/2OneAmpangBusinessAvenue68000Ampang,SelangorTel:03-42566868Fax:03-42562266

PRINCIPAL BANKERMalayan Banking Berhad

REGISTRARTricor Investor Services Sdn Bhd (118401-V)Level17,TheGardensNorthTowerMidValleyCity,LingkaranSyedPutra59200KualaLumpurTel:03-22643883Fax:03-22821886

BURSA MALAYSIA STOCK NAME AND CODEATRIUM 5130

Board of Director and Management / Corporate directory

BOARD OF DIRECTORS AND MANAGEMENT OF THE MANAGER


Annual Report 2010


Annual Report 2010

Dato’ Dr Ir Mohamad Khir Bin Harun Chairman

Malaysian,aged60,wasappointedtotheBoardon5October2009.Dato’DrIrMohamadKhirobtainedhisBSc(Hons)inElectricalEngineeringfromBrightonPolytechnicin1973,MScinCommunicationsEngineeringfromBrunelUniversity,Londonin1978andPhDinElectricalEngineeringfromUniversityofManchester,UnitedKingdomin1982.Dato’Dr.Ir.MohamadKhirhasaccumulatedavastpoolofknowledgeonthecommunicationsandinformationindustry.Startinghiscareerasayoungengineerwaybackin1973,Dato’DrKhirhassuccessfullymadethetransitiontoabusiness-savvytechnocratwhentheTelecomDepartmentwascorporatisedin1987.Hehadrisenquicklyinhiscareer,takingonwide-rangingresponsibilitiesandwasholdingthepositionofChief,GroupBusinessRestructuring,thesecondhighestpositioninTelekomMalaysiaorTM,priortohisretirement.HewasPresidentoftheSeniorOfficerAssociationofTelekomMalaysiafrom1985to1996wherehehasinitiatedprogramsonexecutivedevelopmentandhealthawarenesswhichwerelateradoptedbyTM.Hewasactive insportshavingheldpositionsasViceandDeputyPresidentofTM’ssportsclub from1982to1995.HisotherexperiencesinTMincludes4yearsasSeniorVicePresidentofMarketingforMajorCorporation,GovernmentandBusinessCustomers,2yearsasSeniorGeneralManagerofTelcoBusinessStrategyDevelopment,over1yeardoingcorporatestrategyworksand5yearsinTelex,TelegraphyandDataServices.

Wong Sui EeExecutive Director

Malaysian,aged41,wasappointed to theBoardon22September2005.MsWonggraduatedwithaBachelorofArtsmajoring inAccountingandFinance fromMiddlesexUniversity, London, in 1991.She is anassociatemember of theInstituteofCharteredAccountants inEnglandandWales (ICAEW)since1994.MsWongbeganhercareer inKPMG,UnitedKingdomin1991asanAuditor.In1996,shejoinedPerdanaMerchantBankBerhadasAssistantVicePresidentfortwo(2)years.ShejoinedGloryBlitzIndustriesSdnBhd(“GBISB”)anditsrelatedcompaniesin1998.Duringher8-yeartenurewithGBISBanditsrelatedcompanies,sheformedtheteamtodevelopbuilt-to-suitindustrialpropertiesintheKlangValley for thegroup’smultinational clients includingCEVALogistics (formerlyknownasTNTLogistics),ExelLogistics(nowpartoftheDHLGroup),Danzasmal(nowpartoftheDHLGroup),UnileverMalaysia,SilverstoneTyresandothers.Currently,sheisalsoontheBoardofDirectorsinAlphaNetrise(M)SdnBhd,AmpleCosmosSdnBhdandKilatIdamSdnBhd.

How Hu SonIndependent Non-Executive Director

Malaysian,aged61,wasappointedtotheBoardon17November2006.MrHowgraduatedfromBrightonPolytechnic,UnitedKingdomwithaBachelorofScience(Hons)inCivilEngineeringin1975.In1976,heobtainedhisMasterofSciencefromImperialCollegeofScience&Technology,London.HeisamemberoftheInstitutionofEngineers,MalaysiaandisaregisteredprofessionalEngineerwiththeBoardofEngineers,Malaysia.Hebeganhiscareerin1977asaStructuralEngineerwithJabatanKerjaRayafortwo(2)years.Thereafter,hejoinedTahirWongSdnBhdasitsSeniorStructuralEngineerandwassubsequentlypromoted toSeniorAssociate. Duringhis14years inTahirWongSdnBhd,hewasinvolvedinprojectssuchasSubangParade,theRoyalMalaysianNavyBaseinSarawak,PuteriPanPacificHotel,JohorandtheSelangorTurfClub.Currently,heisaDirectorofPakatanCergasSdnBhd,aconsultancycompanyinvolvedincivilandstructuralengineering.SomeoftheprojectsthathewasinvolvedinaretheconstructionofBukitCeylonCondominium,CPTower,EastinHotelandPhileoDamansara.HeisalsotheDirectorofYongPengBatuBataBerhadandPCAssetsSdnBhd.

Profile Of Directors


Annual Report 2010

Tor Peng SieIndependent Non-Executive Director

Malaysian, aged 52,was appointed to theBoard on 17November 2006. Mr Tor graduated with a Bachelor ofSciencefromCampbellUniversity,NorthCarolina,UnitedStatesofAmericain1982.HeisaholderoftheRealEstateAgentLicencefromtheBoardofValuers,AppraisersandEstate Agents Malaysia since 1993. Mr Tor has overtwenty (20)yearsexperience in the realestate industry,where he began his career in Rahim & Co. CharteredSurveyorSdnBhdin1984asaValuationExecutiveandwassubsequentlypromotedasaRealEstateNegotiator.In1988,heworkedwithTheGoldenTriangleRealEstateAgentsinitiallyasaRealEstateAgentandlaterbecameaDirectorforthesaidcompany.In1999,hejoinedPacificLandmarkRealEstateAgents.HeiscurrentlythePrincipalofPacificLandmarkRealEstateAgents.

Soong Kwong HengIndependent Non-Executive Director

Malaysian, aged 61,was appointed to theBoard on 17November2006.Mr.SoonggraduatedwithaBachelorofEconomicsfromUniversitiMalayain1972.Hehasmorethanthirty(30)yearsexperienceintaxrelatedissues.Afterhisgraduation,hebeganhiscareerintheDepartmentofInland Revenue Malaysia for three (3) years. In 1975,hejoinedChanKingSang&Co.asTaxManagerforten(10) years.Since1985,he servedasaTaxPrincipal inK.S.TaxationServicesSdnBhd.Currently,heisalsoontheBoardofDirectorsofGlobalGainSdnBhd,SegamatHoldingsSdnBhdandCompagnieDuMondeSdnBhd,companies that one involved in property and equityinvestments.

Chan Kum ChongChief Executive Officer

Malaysian,aged55,wasappointedasChiefExecutiveOfficeron1April2010.Mr.Changraduated fromPortsmouthPolytechnic (now known asUniversity of Portsmouth) in 1980with aBachelor of Science inQuantity Surveying.Mr.Chanbeganhis career as aGraduateQuantitySurveyorwith a consultant quantity surveying firm, JuruUkurBahanMalaysiaSdn.Bhd.assisting theseniorquantitysurveyor inpreandpostcontractadministration in thecompletionofMenaraMaybank,redevelopmentofSubangInternationalAirportandTelekomTrainingCentre.Mr.ChanthenjoinedTTDIDevelopmentSdn.Bhd.in1984andhassuccessfullymanagedandcompletedhousingschemesinTamanTunDr.Ismail,TamanTTDIJaya,DesaPandanandDesaBakti.InJune1995,hewasassignedtooverseetheoperationofthein-houseconstructioncompany,PanelexSdn.Bhd.asGeneralManager-Operation.Hethen joinedSyarikatT.D.Sdn.Bhd. in1999asaProjectDirectorlookingafterseveralbuildingandturnkeyprojects.Thereafter,hejoinedVistanet(M)Sdn.Bhd.in2002,anin-houseconstructioncompanyofMaylandPropertiesSdn.Bhd.,tomanagealltheirin-houseconstructionprojectswithGrossDevelopmentValuesinexcessofRM300million,comprisingofserviceapartments,shopofficesandashoppingcomplex. InOctober2003he joinedScoreOptionSdn.Bhd.asaProjectDirector,managinga200acresdevelopmentinPuchongcomprisingamixedresidentialandcommercialdevelopment,aJ.V.projectwithGlomacAllianceSdn.Bhd.,asubsidiaryofGlomacBerhad. In2005,he joinedECAlamjayaSdn.Bhd.as itsChiefExecutiveOfficer tooverseeashoppingcomplexandhoteldevelopmenttotallingRM100million.

Profile Of Directors

Profile Of Chief Executive Officer


Annual Report 2010


Annual Report 2010

I) Portfolio Composition of the Trust 2010 2009 2008 20071

% % % % AtriumShahAlam1 34 34 34 33 AtriumShahAlam2 30 30 30 29 AtriumPuchong 21 21 22 22 AtriumRawang 4 4 4 6

89 89 90 90 Depositswithfinancialinstitutions 11 11 10 10

100 100 100 100

II) Asset Value, Unit And Market Price Information 2010 2009 2008 20071

Assetundermanagement(RM’000) 163,000 161,600 161,600 154,800 Totalassetvalue(RM’000) 183,904 182,350 182,123 173,397 Netassetvalue(RM’000) 127,847 126,410 126,277 119,396 Unitsincirculation(Noofunits’000) 121,801 121,801 121,801 121,801 Netassetvalue(“NAV”)perunit -Asat31December(RM) 1.05 1.04 1.04 0.98 -HighestNAVfortheyear(RM) 1.06 1.06 1.04 1.02 -LowestNAVfortheyear(RM) 1.04 1.04 0.98 0.98 Market price per unit -Asat31December(RM) 1.06 0.92 0.61 1.00 -Highesttradedfortheyear(RM) 1.10 0.93 1.00 1.13 -Lowesttradedfortheyear(RM) 0.88 0.61 0.60 0.91

PERFORMANCE DATA

Atrium Puchong 21%

Atrium Puchong 21%

Depositswithfinancialinstitutions10%


institutionsinstitutions

Atrium Shah Alam 2 30%




AtriumShahAlam134%

AtriumShahAlam134%


AtriumRawang4%

AtriumRawang4%

AtriumRawang4%

AtriumRawang6%

Atrium Puchong 22%

Atrium Puchong 22%

AtriumShahAlam134%

AtriumShahAlam133%

2010

20071

2009

2008



Annual Report 2010

PERFORMANCE DATA

III) Distributions since Commencement Net Asset Value Per Unit (RM)

Per Unit Before After (Sen) Date Distribution Distribution

20071 2ndQuarter 2.00 28Aug07 1.00 0.98 3rdQuarter 2.20 28Nov07 1.00 0.98 4thQuarter 2.30 29Feb08 1.00 0.98

2008 1stQuarter 2.05 30May08 1.00 0.98 2ndQuarter 2.10 29Aug08 1.00 0.98 3rdQuarter 2.10 28Nov08 1.00 0.98 4thQuarter 2.15 6Mar09 1.06 1.04

2009 1stQuarter 1.65 5Jun09 1.05 1.04 2ndQuarter 0.80 11Sep09 1.05 1.04 3rdQuarter 2.20 30Nov09 1.06 1.04 4thQuarter 2.30 25Feb10 1.06 1.04

2010 1stQuarter 2.10 27May10 1.06 1.04 2ndQuarter 2.15 27Aug10 1.06 1.04 3rdQuarter 2.15 30Nov10 1.06 1.04 4thQuarter 2.20 4Mar11 1.07 1.05

IV) Performance of the Trust 2010 2009 2008 20071 Totalreturn(%) 23.88 55.68 (28.76) 5.90 -Capitalgrowth(%)2 15.22 46.03 (39.00) (0.60) -Incomedistribution(%)3 8.66 9.65 10.24 6.50 Incomedistributionperunit(sen) -Gross 8.60 6.95 8.40 6.50 -Net 8.60 6.95 8.40 6.50 Managementexpenseratio(%) 0.94 0.72 0.89 0.53 Portfolioturnoverratio(times) - - - 1.27

V) Average Annual Return For Financial Year Ended 31 December 2010

Atrium REIT (%) KLCI (%)

Oneyear 23.88 19.06Sincecommencement(2April2007) 15.124 5.835

Pastperformanceisnotnecessarilyindicativeoffutureperformanceandthatunitpricesandinvestmentreturnsmayfluctuate.

Note:1 For the financial period from 2 April 2007 (date of commencement) to 31 December 20072 Based on the net change in the market price per unit of the Trust during the financial year/ period, over the market price per unit of the

Trust at the beginning of the financial year/period 3 Based on the actual income distribution for the year/period over the average market price per unit of the Trust. 4 Average Annual Return is computed based on the total return per unit for the period, averaged over the number of years for the

period.5 Average Annual Return is computed based on the net change in KLCI index for the period, averaged over the number of years for the

period.

Distribution


Annual Report 2010

AtriumREITManagersSdnBhd,theManagerofAtriumRealEstateInvestmentTrust(“AtriumREIT”or“Trust”)hasadoptedanoverallcorporategovernanceframeworkdesignedtomeetbestpracticeprinciples.TheManageralsorecognisesthataneffectivecorporategovernance culture is critical to its performanceand consequently, the successofAtriumREIT,which itmanages. In particular, theManagerhasanobligationtoacthonestly,withduecareanddiligence,andinthebestinterestoftheunitholdersofAtriumREIT.

Indevelopingthesystemofcorporategovernance,theManagerisguidedbythemeasuresrecommendedbytheSecuritiesCommissionGuidelinesonREITs,SecuritiesGuidelinesonUnitTrustFunds, theMainMarketListingRequirementsofBursaSecuritiesand theMalaysianCodeonCorporateGovernance.ThefollowingsegmentsdescribetheManager’smaincorporategovernancepoliciesandpractices.

ROLE OF MANAGER

Manager of Atrium REIT

TheManager has general powers of management over the assets ofAtrium REIT. TheManager’s primary objective is to provideunitholdersofAtriumREITwithacompetitiverateofreturnfortheirinvestmentbyensuringregularandstabledistributiontounitholdersandtoachievelongtermgrowthinthenetassetvalueofAtriumREIT.

TheprimaryroleoftheManageristosetthestrategicdirectionofAtriumREITandgiverecommendationstotheTrusteeontheacquisition,divestmentandenhancementofassetsofAtriumREITinaccordancewithitsstatedinvestmentstrategy.

Othergeneralfunctions,dutiesandresponsibilitiesoftheManagerincludethefollowing:

(a) tocarryouttheactivitiesinrelationtothemanagementofAtriumREITanditsportfolioofassetsinaccordancewiththeprovisionsoftheTrustDeeddated20November2006andamendedbytheSupplementaryDeeddated25November2008(collectivelyknownas“theDeed”);

(b) toissuetheannualreportofAtriumREITtounitholderswithintwo(2)monthsofitsfinancialyearend;(c) toattendtoallenqueriesfromunitholders,tenants,media,governmentbodies,etc;(d) tosupervisethePropertyManagementCompany;and(e) toensurethatAtriumREITismanagedwithintheambitoftheDeed,theSecuritiesCommissionActs,SecuritiesCommission(SC)

GuidelinesonRealEstateInvestmentTrusts(“REITGuidelines”),othersecurities laws, theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBhd,andotherapplicablelaws.

AtriumREITisexternallymanagedbytheManagerandaccordingly,AtriumREIThasnopersonnelofitsown.TheManagerappointsexperiencedandwell-qualifiedmanagementpersonneltohandletheday-to-dayoperations.AllDirectorsandemployeesoftheManagerareremuneratedbytheManagerandnotbyAtriumREIT.

AtriumREITManagersSdnBhdistheappointedManagerofAtriumREITinaccordancewiththetermsoftheDeedwhichoutlinesthecircumstancesunderwhichtheManagercanberetired.

DIRECTORS OF THE MANAGER

The Board

TheBoardisentrustedwiththeresponsibilityofoverallmanagementandcorporategovernanceoftheManagerincludingestablishinggoalsformanagementandmonitoringtheachievementofthesegoals.TheBoardisalsoresponsibleforchartingthestrategicdirection,developmentandcontroloftheManagerandhasadoptedtheprimaryresponsibilitiesaslistedintheREITGuidelinesaswellastherolesanddutiessetoutintheREITGuidelines,whichfacilitatethedischargeoftheDirectors’stewardshipresponsibilities.

Board Composition

TheBoardpresentlyconsistsoffive(5)memberscomprisingone(1)Non-independentNon-executivedirector,one(1)ExecutiveDirectorand three(3) IndependentNon-ExecutiveDirectors.Thediversebackgroundof thememberswhocome fromvariousfieldssuchasengineering,financial,realestateandmanagementprovidebroadspectrumofskills,experienceandinvaluableperspectivestooverseeingthemanagementoftheManager.TheprofilesofthemembersoftheBoardareprovidedinpages16to17oftheAnnualReport.

STATEMENT OF CORPORATE GOVERNANCE

Documents

ATRIUM REAL ESTATE INVESTMENT - malaysiastock.biz 10 ATRIUM REAL ESTATE INVESTMENT TRUST Annual Report 2010 Atrium Puchong Property Portfolio Property Address Title details Property