Information Memorandum Tesco Lotus Retail Growth Freehold ... · Tesco Lotus provides a stable offering of essential goods, including a variety of fresh food, groceries, electronics,

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Information Memorandum

Tesco Lotus Retail Growth Freehold and Leasehold Property Fund (TLGF)

Office of the Management Company

Krung Thai Asset Management Public Company Limited (the "Management Company") No. 11 Q-House Sathorn Building, M, G, and 10th Floor South Sathorn Road, Thung Mahamek Sub-district Sathorn District, Bangkok 10120

Tel: (02) 670-4900 Fax: (02) 679-1824

Date of becoming listed securities

19 March 2012 (Trading started on 19 March 2012)

Type of listed securities

1,770,000,000 investment units, each at a par value of Baht 10.40, totalling Baht 18,408 million (the "Investment Units")

Brief history

The Management Company received approval from the SEC to establish Tesco Lotus Retail Growth Freehold and Leasehold Property Fund (the "Fund") on 21 February 2012 in accordance with the Letter No. SEC. JorTor. 208/2555. The initial public offering was from 24 February 2012 to 2 March 2012 for Retail Investors1, on 6, 8, 9 March 2012 for Institutional Investors2 and the Specific Investors3 and on 6, 8, 9, 12 March 2012 for the initial purchasersat Baht 10.40 per Investment Unit. And the Management Company registered the pool of assets of the Fund on 13 March 2012 pursuant to the Letter No. SEC JorTor. 57/2555.

Project type

Specific, closed-end property fund.

1 investors subscribing to Investment Units by means of a general process specified in the Prospectus, but shall not include: (1) Institutional Investors and their Related Persons; or (2) the Sponsors and their Related Persons. 2 the following investors subscribing to Investment Units:

(1) commercial banks; (2) securities companies which will invest for own assets; (3) insurance companies; (4) Government units and state enterprises under the law on budgetary procedures, or other legal entities established under a specific law; (5) the Government Pension Fund; (6) Provident Funds; (7) Social Security Funds; (8) mutual funds under the Securities Law; (9) the Thai Red Cross Society; (10) public benefit foundations; (11) savings and credit cooperatives; (12) international financial institutions in which Thailand is a member; (13) mutual funds under foreign laws which publicly offer investment units for sale to investors; (14) foreign investors which can be categorised as the type of investors under (1) to (7) above; and (15) other investors as may be approved by the SEC.

3 "Specific Investors" are (i) the Government Pension Fund, the Social Security Fund, the Provident Fund or a Retail Fund; (ii) a juristic person established under Thai law which is exempted from corporate income tax payment, such as the Government Savings Bank, the SET, foundations or temples; and (iii) any person granted relaxation by the SEC upon reasonable necessity.

2

Project life

Not specified

Investment objective

The Fund will mobilise funds from both local and foreign investors and will use the proceeds of such mobilisation for the investment in the Initial Properties4 and the Additional Properties5 (the "Properties"). The Fund will accept transfers of ownership in Freehold Properties or Mixed Properties and/or leasehold rights and/or sublease rights for Leasehold Properties or the Mixed Properties and seek benefits therefrom by way of letting out, subletting, transferring and/or disposal of the Properties invested in or possessed by the Fund, as well as improvement, modification and renovation of those Properties by accepting transfers of construction permits and/or applying for other permits and/or doing any other pertinent or necessary acts for the benefit of the Properties and with the view to generate income and yields for the Fund and the unitholders. The Fund will also invest in other assets and/or other securities and/or seek benefits by other means as prescribed by the securities law.

Investment policy

Overview

The Fund will be established with the objective of investing in a portfolio of income-producing freehold and leasehold rights to real property in Thailand primarily used for retail purposes with a view to providing unitholders with long-term and sustainable dividend income and dividend growth.

The Fund’s Initial Properties, which will be invested in using the proceeds of [the Combined Offering] will consist of 17 shopping malls, comprising:

(i) 10 freehold properties (i.e. Srinakarin, Krabi, Prachacheun, Rangsit Klong 7, Tung Song, Singburi, Pranburi, Mahachai, Maesai and Ranong) (the "Freehold Properties");

(ii) two mixed properties (i.e. Samui and Pitsanulok) (the "Mixed Properties");

(iii) four leasehold properties with freehold buildings (i.e. Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena; and

(iv) one leasehold property with leasehold land and buildings (i.e. Rama I) (together with (iii), the "Leasehold Properties").

Leasehold Properties are subject to leases with an average of approximately 26 years remaining on the lease.

The Initial Properties provide customers with a destination shopping experience combining the offering of Ek-Chai Distribution System Co., Ltd. ("Tesco Lotus", the "Sponsor" or the "Property Manager" as applicable) hypermarkets with other popular food, retail and entertainment establishments. The product offering caters to a broad base of customers across all demographics. Tesco Lotus provides a stable offering of essential goods, including a variety of fresh food, groceries, electronics, leisure and entertainment and houseware products, as well as good value for money apparel, while permanent tenants offer a variety of lifestyle goods and services which target many different consumer segments.

4 the Freehold Properties, the Leasehold Properties and the Mixed Properties which the Fund will acquire initially, details of which are set out in

Annex 1 "Description of the Properties".

5 additional Freehold Properties, Leasehold Properties or Mixed Properties to be acquired by the Fund after its acquisition of the Initial Properties as specified in the Fund scheme.

3

As of 30 November 2011, the Initial Properties had an aggregate Gross Floor Area6 of 427,001 sq. m. and an aggregate Total Lettable Area7 of 231,961 sq.m., including an aggregate of Lettable Area for Permanent Tenants8 of 92,824 sq.m. For the nine-month period ended 30 November 2011, the Average Occupancy Rate of the Initial Properties of the Lettable Area for Permanent Tenants9 and the Occupancy Rate and the Total Lettable Area10 were 96.9% and 98.8%, respectively. The Initial Properties enjoy a diverse Permanent Tenant11 base with 1,033 tenants as of 30 November 2011 from a wide range of business sectors.

The following diagram illustrates the structure of the Fund and indicates the relationships among the Fund, the Management Company, the Trustee, the Sponsors (as unitholders) and other unitholders, upon the registration of the establishment of the Fund and the completion under the SPAs.

6 "Gross Floor Area" means with respect to the shopping mall building, that area which includes hypermarket area, food court area, the indoor

rental area available for lease to with tenancies of one year or more (excluding Tesco Lotus) (the Indoor Lettable Area for Permanent Tenants), common area, service area and indoor car park area.

7 "Total Lettable Area" means hypermarket area, food court area and the indoor and outdoor areas leased out to tenants with tenancies of more than one year (excluding Tesco Lotus).

8 "Lettable Area for Permanent Tenants" means the indoor and outdoor areas leased out to tenants with tenancies of more than one year (excluding Tesco Lotus).

9 "Average Occupancy Rate" means the sum of the Occupancy Rates at the end of each month during the specified period for the relevant Property by the number of months in the period, and computed based on Total Lettable Area.

10 "Occupancy Rate" means the sum of the Occupancy Rates at the end of each month during the specified period for the relevant Property divided by the number of months in the period and computed based on Total Lettable Area.

11 "Permanent Tenant" means tenant with tenancy of more than one year (excluding Tesco Lotus).

1 Leasehold Property (leasehold land and

building): Rama I

Other Unitholders

The Fund

Krung Thai Asset Management Public Company Limited

(as Management Company)

Investment Committee

The Hongkong and Shanghai Banking

Corporation Limited, Bangkok Branch

(as Trustee)

Trustee Appointment Agreement

Fund Scheme and Prospectus

Dividends

75% Unitholding

25% Unitholding

Ek-Chai Distribution System Co., Ltd.

(as Sponsor)

10 Freehold Properties:

1. Srinakarin 2. Krabi

3. Prachacheun 4. Rangsit Klong 7

5. Tung Song 6. Singburi 7. Pranburi 8. Mahachai 9. Ranong 10. Maesai

2 Mixed Properties (freehold land (in part) and leasehold land (in part) and freehold

building): 1. Samui

2. Pitsanulok

4 Leasehold Properties

(leasehold land and freehold building):

1. Amatanakorn 2. Petchaboon

3. Lamlukka Klong 6 4. Sena

Investment

Property Management

Profit

4

Initial Investment

In relation to the investment in the Initial Properties, the Management Company will use the proceeds from the offering of the Investment Units in Thailand and outside of Thailand (the "Combined Offering") to purchase the Freehold Properties and, with respect to the Mixed Properties and Leasehold Properties, it will accept the assignment of rights and responsibilities under the land or building lease agreements from the Sponsor, including to purchase buildings and/or land from the Sponsor. In seeking the benefits of the investment in the Initial Properties, the Fund will enter into the Operating Lease Agreement12 and a service agreement with Tesco Lotus and individual lease and service agreements with other tenants, including accepting the assignment of rights and responsibilities under the lease and service agreements with tenants from Tesco Lotus.

After the Fund is registered as a property fund with the SEC, the Management Company will proceed to acquire the Initial Properties (excluding Rama I) within five Business Days, or 45 days for Rama I, unless extended at the discretion of the Management Company, which extension (in each case) shall not exceed three months, from the Fund is registered as a property fund with the SEC (the "Acquisition Period"). However, the Management Company reserves the right to take actions in relation to the investment in the Initial Properties in the following events as set out below:

(1) If the Management Company is able to raise sufficient amount of capital which meets the initial offering value.

The Management Company will complete the acquisition of all the Initial Properties within the Acquisition Period. However, if the Management Company fails to do so because: (i) the landlords in respect of the Leasehold Properties fail to satisfy their commitments to register the transfer of lease agreements to, and/or enter into new lease agreements with, the Fund (as applicable), (ii) certain Initial Properties do not meet the specified requirements in the SPAs; and/or (iii) there is any event, including an act of God, which adversely affects any or many of the Initial Properties, the Management Company reserves the right to proceed with any of the following actions, taking into account the benefits of the unitholders as a whole:

(a) If the Management Company is able to acquire the Initial Properties for equal to or more than 80% of the aggregate value of the purchase price all the Initial Properties, it will proceed to acquire all of those Initial Properties and reserves the right to negotiate with the Sponsors in relation to changes to conditions of payments of purchase price and/or other terms of the relevant agreements as it deems appropriate.

(b) If the Management Company is able to acquire the Initial Properties for less than 80% of the aggregate value of the purchase price all the Initial Properties, the Management Company shall proceed with any of the following actions, taking into account the benefits of the unitholders as a whole:

(i) acquire all the Initial Properties to such an extent that the Fund is able to. The Management Company reserves the right to negotiate with the Sponsors in relation to changes to conditions of payments of purchase price and/or other terms of the relevant agreements as it deems appropriate; or

(ii) dissolve the Fund. The Management Company will proceed with the process of dissolution and liquidation of the Fund in order to distribute the registered capital to the unitholders.

(2) If the Management Company is unable to raise sufficient amount of capital to meet the initial offering value, and the Management Company together with the Sponsor, the Sole Domestic Bookrunner and the Joint International Bookrunners have jointly decided to proceed to register the Fund as a property fund with the SEC.

The Management Company shall invest in certain Initial Properties of which an aggregate value of the purchase price is as close to the amount of the initial offering value received as possible. The Management Company will, select the properties to be acquired from all Initial Properties (the "Selected Initial Properties") and the Management Company will complete the acquisition of the Selected Initial Properties within the Acquisition Period.

12 a lease agreement to be entered into between the Fund as lessor and the Sponsor as lessee relating to each of the hypermarkets the Sponsor

currently operates together with the food court in each of the Initial Properties.

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However, if the Management Company is unable to acquire all the Selected Initial Properties within the Acquisition Period because: (i) the landlords in respect of the Leasehold Properties fail to satisfy their commitments to register the transfer of lease agreements to, and/or enter into new lease agreements with, the Fund (as applicable), (ii) certain Initial Properties do not meet the specified requirements in the SPAs; and/or (iii) there is any event, including an act of God, which adversely affects any or many of the Initial Properties, the Management Company reserves the right to proceed with any of the following actions, taking into account the benefits of the unitholders as a whole:

(a) If the Management Company is able to acquire the Initial Properties for equal to or more than 80% of the aggregate value of the purchase price of the Selected Initial Properties, it will proceed to acquire all the Selected Initial Properties and reserves the right to negotiate with the Sponsors in relation to changes to conditions of payments of purchase price and/or other terms of the relevant agreements as it deems appropriate.

(b) If the Management Company is able to acquire the Initial Properties for less than 80% of the aggregate value of the purchase price of the Selected Initial Properties, the Management Company shall proceed with any of the following actions, taking into account the benefits of the unitholders as a whole:

(i) acquire all the Selected Initial Properties to such an extent that the Fund is able to. The Management Company reserves the right to negotiate with the Sponsors in relation to changes to conditions of payments of purchase price and/or other terms of the relevant agreements as it deems appropriate; or

(ii) dissolve the Fund. The Management Company will proceed with the process of dissolution and liquidation of the Fund in order to distribute the registered capital to the unitholders.

Under all circumstances, if the Fund has a surplus liquidity after the acquisition of all or certain Initial Properties as mentioned above, the Management Company will take any of the following actions:

• decrease the registered capital of the Fund and distribute the decreased registered capital pro rata to the unitholders by means of funds transfer or by issuance of crossed cheques within 15 days from the end of the Acquisition Period; or

• acquire the Additional Properties within 3 months from the date on which the Fund is registered as a property fund by following the applicable rules of the SEC. If the additional investment is not carried out within the 3-month period, the Management Company will decrease the registered capital of the Fund and distribute the decreased registered capital pro rata to the unitholders by means of funds transfer or by issuance of crossed cheques within 15 days after the 3-month period ends.

If the Fund is dissolved pursuant to clause (1)(b)(ii) or clause (2)(b)(ii) above, the registered capital to be distributed to the unitholders will be an outstanding amount remaining after the liquidation of the Fund, after deducting related expenses. In this case, there is a risk that such amount unitholders will receive may be less than the par value per Investment Unit.

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The Initial Properties

The table below summarises certain data for the Initial Properties as of 30 November 2011.

Land Area (sq.m.) Appraised Values

(Baht Million) (3) (4)

Property

Name

Location Interest in

Land

Freehold Lease

hold

Total

No.

of

title

deed

Owner of the Initial

Properties

Expiration of

Lease for

Leased Land

Interest

in

Building

Year of

Completion

(for the

shopping

mall

building)

Lettable

Area for

Pemanent

Tenants(1)

(sq. m.)

Gross Floor

Area(2)

(sq. m.) CB

Richard

Ellis

(Thailand)

Co., Ltd.

15

Business

Advisory

Co., Ltd.

Purchase Price

(Million Baht)

Srinakarin Samuthprakarn Freehold 77,497 - 77,497 3 Ek-Chai Distribution

System Co., Ltd.

- Freehold 1999 18,897 29,474 3,040 2,930 3,011,369,500

Krabi Krabi Freehold 48,607 - 48,607 8 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2007 7,900 16,607 1,639 1,476 1,516,990,300

Prachacheun Bangkok Freehold 24,047 - 24,047 22 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2001 2,791 12,206 1,496 1,471 1,511,851,400

Rangsit

Klong 7

Patumthani Freehold 231,084 - 231,084 2 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2007 3,394 12,274 1,028 1,053 1,056,548,700

Tung Song Nakornsrithamarat Freehold 49,143 - 49,143 10 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2008 3,799 10,562 879 866 890,049,800

Singburi Singburi Freehold 39,236 - 39,236 6 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2008 2,473 11,170 714 729 733,828,600

Pranburi Prachubkireekan Freehold 36,634 - 36,634 6 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2008 2,590 8,442 700 714 719,439,800

Mahachai Samuthsakorn Freehold 33,484 - 33,484 1 Ek-Chai Distribution

System Co., Ltd.

- Freehold 1996 1,029 8,784 583 788 599,190,600

Maesai Chiengrai Freehold 52,400 - 52,400 3 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2008 1,332 7,695 613 564 579,662,900

Ranong Ranong Freehold 41,803 - 41,803 1 Ek-Chai Distribution

System Co., Ltd.

- Freehold 2008 1,802 7,553 544 567 559,107,500

Samui Suratthani Freehold

and

Leasehold

37,008 39,912 76,920 15 Ek-Chai Distribution

System Co., Ltd.

Mr. Karoon

2030 and

2035

Freehold 2002 11,664 20,574 1,180 1,318 1,212,770,000

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Property

Name


Land

Freehold Lease

hold

Total

No.

of

title

deed


Properties

Expiration of

Lease for

Leased Land

Interest

in

Building

Year of

Completion

(for the

shopping

mall

building)

Lettable

Area for

Pemanent

Tenants(1)

(sq. m.)

Gross Floor

Area(2)

(sq. m.) CB

Richard

Ellis

(Thailand)

Co., Ltd.

15

Business

Advisory

Co., Ltd.

Purchase Price

(Million Baht)

Baromtanarat

Mr. Kanit Baromtanarat

Ms. Duangrudee

Baromtanarat

Ms. Juree Baromtanarat

Ms. Metta

Baromtanarat

Mr. Watcharapong

Baromtanarat

Ms. Chorbjit

Sivadechathep

Mr. Chakkrit

Sivadechathep

Mr. Rittirong

Sivadechathep

Pitsanulok Pitsanulok Freehold

and

Leasehold

50,686 1,038 51,724 6 Ek-Chai Distribution

System Co., Ltd.

Mr. Supoj

Vichitviangrat

2035 Freehold 1996 7,140 16,768 1,099 1,077 1,106,909,500

8



Property

Name


Land

Freehold Lease

hold

Total

No.

of

title

deed


Properties

Expiration of

Lease for

Leased Land

Interest

in

Building

Year of

Completion

(for the

shopping

mall

building)

Lettable

Area for

Pemanent

Tenants(1)

(sq. m.)

Gross Floor

Area(2)

(sq. m.) CB

Richard

Ellis

(Thailand)

Co., Ltd.

15

Business

Advisory

Co., Ltd.

Purchase Price

(Million Baht)

Amatanakorn Chonburi Leasehold - 72,542 72,542 1 Amata Corporation

Public Company

Limited

Freehold 2009 13,604 23,355 1,620 1,475 1,515,962,400

Petchaboon Petchaboon Leasehold - 69,622 69,622 4 Ms. Patcharaporn

Petcharaburanin

Mr. Chaiyos

Petcharaburanin

2037 and

2038

Freehold 2008 6,498 13,686 860 682 700,939,900

Lamlukka

Klong 6

Pathumthani Leasehold - 53,200 53,200 1 Namchai Asset

Development Co., Ltd.

2037 Freehold 2006 2,177 10,975 500 516 513,885,600

Sena Ayudhaya Leasehold - 39,584 39,584 3 Mrs. Suwilai

Kittiruangthong

Mrs. Boonrod

Sanguansab

Ms. Boonruean

Sitthipoom

Ms. Juree Sitthipoom

Mr. Saroj Sitthipoom

Mr. Opath Sitthipoom

Mrs. Nopamart

Kumnerdkhun

Mr. Vipark Sitthipoom

2038 Freehold 2008 1,641 7,684 388 380 390,553,000

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Property

Name


Land

Freehold Lease

hold

Total

No.

of

title

deed


Properties

Expiration of

Lease for

Leased Land

Interest

in

Building

Year of

Completion

(for the

shopping

mall

building)

Lettable

Area for

Pemanent

Tenants(1)

(sq. m.)

Gross Floor

Area(2)

(sq. m.) CB

Richard

Ellis

(Thailand)

Co., Ltd.

15

Business

Advisory

Co., Ltd.

Purchase Price

(Million Baht)

Rama I Bangkok Leasehhold - 20,228 20,228 1 The Crown Property

Bureau

2034 Leasehold 2004 4,095 14,151 1,026 1,005 1,024,017,500

TOTAL 721,629 296,126 1,017,755 - - - 92,824 231,961 17,175(5)

17,643,077,000

Notes:

(1) "Lettable Area for Permanent Tenants" means the indoor and outdoor rental areas leased out to tenants with tenancies of one year or more (excluding Tesco Lotus).

(2) "Gross Floor Area" means hypermarket area, food court area and Lettable Area for Permanent Tenants.

(3) The appraisal reports of CB Richard Ellis (Thailand) Co., Ltd. and 15 Business Advisory Co., Ltd. were prepared in December 2011.

(4) With respect to the leasehold rights of the Leasehold Properties and Mixed Properties, i.e. Samui, Pitsanulok, Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena, the two appraisers conducted the appraisal of

such Properties based on the assumption that there is no expense incurred in relation to the demolition of the buildings and structures as such expense is equal to or less than the gain from the sale of the demolished

buildings and structures. In normal circumstances, the contractors will take such demolished buildings and structures (i.e. metal structure and congrete) as payment in kind which is considered the expense thereof.

The Management Company has approved the estimated expenses, will procure that there is such an assumption in the annual appraisal reports and will disclose the same in the annual report.

(5) Total of the lesser appraisal value of each Initial Property.

10

The map below shows the location of the Initial Properties in Thailand.

Structure of income and expenses of the Initial Properties

The Total Revenue of the Initial Properties for the years ended 28 February 2010 and 2011 amounted to Baht 805.4 million and Baht 926.6 million, respectively, representing a growth of 15.0%. For the period from 1 March 2011 to 27 November 2011, the Total Revenue of the Initial Properties amounted to Baht 749.2 million. The above Total Revenue did not include the following: (i) the rental and service income from leasing out hypermarket and food court areas to the Fund as, prior to the establishment of the Fund, Tesco Lotus was the owner of the shopping mall buildings; and (ii) the concession fee that the Sponsor received from VGI in relation to the exclusive concession granted to VGI to use the specified areas (the "Advertisement Space") to carry out the electronically-displayed advertising activities (the "EDA Activities") at the permitted locations and broadcast the audio programme in the stores. As of 30 November 2011, 53.8% of the Total Lettable Area was occupied by hypermarket, 6.2% was occupied by food court, 20.1% was occupied by permanent fixed rate tenants and 18.7% was occupied by permanent variable rate tenants and the remaining 1.2% was vacant space.

The following table shows the structure of income of the Initial Properties during the specified periods, excluding the rental income in relation to hypermarket and food court areas rented out to Tesco Lotus.

13

10

11

12

4

5

3

2

7

6

8

9

14

15

1

16

17

Srinakarin

Krabi

Prachacheun

Rangsit Klong 7

Tung Song

Singburi

Pranburi

Mahachai

Maesai

Ranong

Samui

Pitsanulok

Amatanakorn

Petchaboon

Lamlukka Klong 6

Sena

Rama I

11

For the year ended

28 February 2010

For the year ended

28 February 2011

For the period from

1 March 2011 to

27 November 2011

Income and Expense

Baht million Percentage of

Total Revenue


Total Revenue


Total Revenue

Rental and Service Income

Permanent Fixed Rate

Tenants(1)

435.2

54.0

503.0

54.3

401.8

53.6

Permanent Variable

Rate Tenants(1)

212.8 26.4 245.3 26.5 203.7 27.2

Temporary Users 142.7 17.7 164.8 17.8 133.0 17.8

Signage 7.3 0.9 8.6 0.9 6.6 0.9

Other Income(2) 7.5 0.9 4.8 0.5 4.1 0.5

Total Revenue 805.4 100.0 926.6 100.0 749.2 100.0

Notes:

(1) Permanent tenants means the tenants (other than Tesco Lotus) of indoor and outdoor areas with tenancies of one year or more.

(2) Excluding concession fee from VGI.

The growth rate of the rental and service income from permanent fixed rate tenants, permanent variable rate tenants and temporary users for the years ended 28 February 2010 and 2011 were 15.6%, 15.3% and 15.5%, respectively. Excluding the income from Amatanakorn which started its operation in the year ended 28 February 2010, the growth rates of the rental and service income from permanent fixed rate tenants, permanent variable rate tenants and temporary users for the years ended 28 February 2010 to 2011 were 7.3%, 7.8% and 10.6%, respectively.

For the period from 1 March 2011 to 27 November 2011, the growth rates of the rental and service income from permanent fixed rate tenants, permanent variable rate tenants and temporary users from the same period during the previous year were 10.5%, 12.3% and 8.3%, respectively.

The Property Operating Expenses13 historically recorded included expenses in relation to the hypermarket and food court areas. Property Operating Expenses relating to the Initial Properties for the years ended 28 February 2010 and 2011 amounted to Baht 517.8 million and Baht 533.4 million, respectively, representing an increase of 3.0%. For the period from 1 March 2011 to 27 November 2011, Property Operating Expenses relating to the Initial Properties amounted to Baht 401.0 million. The following table shows details of the Property Operating Expenses relating to the Initial Properties during the specified periods.

For the year ended

28 February 2010

For the year ended

28 February 2011

For the period from

1 March 2011 to

27 November 2011

Property Operating

Expenses


total expense

Baht million Percentage of total

expense

Baht million Percentage of total

expense

Cleaning 87.7 16.9 86.4 16.2 57.5 14.3

Security 50.1 9.7 49.5 9.3 35.8 8.9

Property Insurance 3.7 0.7 4.5 0.9 5.5 1.4

Sales Promotion 31.8 6.1 28.1 5.3 14.4 3.6

Maintenance or Repair 40.0 7.7 40.2 7.5 31.6 7.9

Consumable 10.6 2.1 12.8 2.4 8.7 2.2

Utilities 293.9 56.8 311.9 58.5 247.5 61.7

Total 517.8 100.0 533.4 100.0 401.0 100.0

13 "Property Operating Expense" includes commission fee, rental collection fee and property operating expenses, including cleaning, security,

property insurance, sale promotion, maintenance and repair, consumables, utilities, land lease and professional fees.

12

After the establishment of the Fund, Property Operating Expenses related to hypermarket and food court areas (the "Sponsor Area") of the Initial Properties will be paid by Tesco Lotus as stipulated in the Operating Lease Agreement while the Fund will be responsible for Property Operating Expenses related to the remaining part of the premises (the "Mall Area "). A new system of measuring and recording the operating expenses will be implemented after the establishment of the Fund to accurately segregate the operating expenses between the Sponsor Area and Mall Area. Such system will include the installation of additional electricity and water meters and conclusion of relevant service agreements with separation of the services provided to the Sponsor Area and the Mall Area. Tesco Lotus has installed electricity and water meters to segregate the operating expenses which will complete before the establishment of the Fund and is negotiating the separation of service agreements between the Mall Area and the Sponsor Area which the Fund will enter into promptly after the Fund is established with the SEC.

In the past, the Mall Area Property Operating Expenses were calculated based on the Sponsor’s management accounts and are subject to certain assumptions on the allocation of operating expenses between the Sponsor Area and Mall Area. The major assumptions are as follows:

• Cleaning – Prior to the establishment of the Fund, cleaning service for the Mall Area was provided for in a separate contract to the contract relating to cleaning service for the Sponsor Area. The allocation of cleaning expense to Mall Area is based on such historical breakdown.

• Security – The allocation of security service between Mall Area and Sponsor Area is based on the number of security personnel responsible for each area.

• Property Insurance – At the date of the transfers of the Initial Properties, the Management Company will obtain insurance coverage relating to the Initial Properties as part of the Sponsor’s insurance coverage. The insurance premium has been allocated to the Fund based on the cost of the Fund’s Properties relative to the Sponsor’s entire property portfolio which has been insured, including expenses incurred with respect to other insurance policies of the Fund.

• Maintenance or Repair – Maintenance or repair expense in relation to service contract for machines and equipment related to the Fund’s assets is allocated to the Fund. Moreover, based on historical information, maintenance or repair expense in relation to spare parts for Mall Area and machines and equipment are entirely borne by the Fund.

• Utilities – Utilities expense primarily relates to electricity expense for the purposes of cooling and air conditioning, lighting and miscellaneous uses. The assumed allocation of electricity expense between Mall Area and Sponsor Area is either based on the Sponsor’s historical monitoring of usage in each area or the design breakdown of area.

Sales Promotion and Consumables expenses in relation to the Mall Area are based on the actual expense incurred by Mall Area.

The Mall Area Property Operating Expense relating to the Initial Properties for the years ended 28 February 2010 and 2011 amounted to Baht 186.6 million and Baht 193.0 million, respectively, representing an increase of 3.4%. During the period from 1 March 2011 to 27 November 2011, Mall Area Property Operating Expense estimates relating to the Initial Properties amounted to Baht 136.5 million. The following table shows details of Mall Area Property Operating Expense relating to the Initial Properties during the specified periods.

For the year ended

28 February 2010

For the year ended

28 February 2011

For the period from

1 March 2011 to

27 November 2011

Mall Area

Property

Operating

Expenses Baht million Percentage of Mall

Area Property

Operating Expenses

Baht million Percentage of Mall

Area Property

Operating Expenses


Area Property

Operating Expenses

Cleaning 24.5 13.1 25.8 13.4 14.7 10.8

Security 24.5 13.1 25.2 13.0 18.3 13.4

Property Insurance 2.2 1.2 2.6 1.4 3.2 2.3

Sales Promotion 29.6 15.8 25.2 13.1 12.2 8.9

13

For the year ended

28 February 2010

For the year ended

28 February 2011

For the period from

1 March 2011 to

27 November 2011

Mall Area

Property

Operating

Expenses Baht million Percentage of Mall

Area Property

Operating Expenses


Area Property

Operating Expenses


Area Property

Operating Expenses

Maintenance or

Repair 19.4 10.4 19.7 10.2 15.0 11.0

Consumable 10.0 5.4 12.0 6.2 8.1 5.9

Utilities 76.5 41.0 82.4 42.7 65.1 47.7

Total 186.6 100.0 193.0 100.0 136.5 100.0

Note: Mall Area Operating Expense included here are exclusive of claimable VAT. After the Fund establishment, the Fund will not be eligible to claim back VAT as the Fund is not a VAT registrant under Thai tax regulations.

Impact of 2011 Thai Floods to the Initial Properties

From September to November 2011, severe floods affected the lower plains in central Thailand and the northern part of Bangkok, including many industrial estates in Ayudhaya, Pathumtani and suburban areas surrounding Bangkok, disrupting manufacturing, transportation, logistics and the country's economic output.

Several properties owned by the Sponsor were impacted by the flooding, including certain of the Initial Properties. Two properties in particular, Rangsit Klong 7 and Lamlukka Klong 6, sustained damage from the floods. The car park areas at these properties were damaged and exterior walls will require some paint and other cleanup but will not need to be fully replaced. These properties remained open during the floods. Approximately Baht 5 million has been budgeted by the Sponsor for repairs at each of Rangsit Klong 7 and Lamlukka Klong 6, all of which are expected to be covered by flood insurance payable to the Sponsor. The repairs to these areas have been completed. In December 2011, the majority of tenants at these properties returned and reopened their businesses, although certain tenants may delay in paying rent as a result of the floods. Both Appraisers have conducted reviews of all of the Initial Properties and have concluded there is no significant impact to property values as a result of the floods. In addition, despite the flooding lasting for the majority of the period from September to November 2011, the total revenues from the Initial Properties during that period were not materially impacted by the flood. The table below shows the total revenues of all Initial Properties, the total revenues of the 11 Initial Properties which have not been affected by the flood and the total revenues of the six flood-affected Properties during the specified period.

Amount for the Period 2Q09/10(1) 3Q09/10(2) 2Q10/11(3) 3Q10/11(4) 2Q11/12(5) 3Q11/12(6) Total Revenues of:

Baht Million

All Initial Properties 187.6 200.1 223.4 226.7 254.4 254.9

11 of the Initial Properties which have not been affected by the flood

135.8 148.8 168.2 171.7 193.4 144.8

The Six Flood-Affected Shopping Malls(7)

51.8 51.3 55.2 55.0 61.1 60.1

(1) 2Q09/10 represents the period from 31 May 2009 to 29 August 2009.

(2) 3Q09/10 represents the period from 30 August 2009 to 28 November 2009. Amatanakorn commenced operation in 3Q09/10.


(4) 3Q10/11 represents the period from 30 August 2010 to 28 November 2010.


(6) 3Q11/12 represents the period from 29 August 2011 to 27 November 2011 during which Thailand was undergoing the floods.

(7) Rangsit Klong 7, Lamlukka Klong 6, Pitsanulok, Singburi, Sena and Prachacheun

14

During the flood period 3Q11/12, the decrease in total revenues of the six flood-affected Properties was 1.6% as compared to 1Q11/12 which is in line with the decrease in the same period for the previous two years. On a year-on-year basis, the growth rate for total revenues of the six flood-affected Properties during the flood period 3Q11/12 was 9.2% which is higher than for the same period during the previous year.

Quarter-on-Quarter Growth for the Period Year-on-Year Growth for the Period

3Q09/10(1) 3Q10/11(2) 3Q11/12(3) 3Q10/11(2) 3Q11/12(3) Total Revenues of: Percentage Growth

All Initial Properties 6.7% 1.5% 0.2% 13.3% 12.4%

11 Initial Properties which have not been affected by the flood

9.6% 2.1% 0.7% 15.4% 13.4%

The Six Flood-Affected Shopping Malls(4)

(1.0%) (0.3%) (1.6%) 7.2% 9.2%

(1) 3Q09/10 represents the period from 30 August 2009 to 28 November 2009. Amatanakorn commenced operation in 3Q09/10.

(2) 3Q10/11 represents the period from 30 August 2010 to 28 November 2010

(3) 3Q11/12 represents the period from 29 August 2011 to 27 November 2011 during which Thailand was undergoing the floods.

(4) Rangsit Klong 7, Lamlukka Klong 6, Pitsanulok, Singburi, Sena and Prachacheun

Occupancy

The table below sets forth information on the Average Occupancy Rate of each of the Initial Properties for the period from 1 August 2008 to 28 February 2009, for the two years ended 28 February 2010 and 2011 and the nine months ended 30 November 2011:

Average Occupancy Rate(1) of the Lettable Area for

Permanent Tenants (%)(2)

Average Occupancy Rate(1) of the Total Lettable

Area(3) (%)

Property

For the

period

from 1

August

2008 to 28

February

2009(4)

For the

year

ended 28

February

2010

For the

year

ended

28

February

2011

For the

nine

months

ended 30

November

2011

For the period from 1 August 2008 to 28 February 2009(4)

For the year ended 28 February 2010

For the

year

ended 28

February

2011

For the

nine

months

ended 30

November

2011

Srinakarin 100.0 99.3 99.5 98.9 100.0 99.6 99.7 99.3

Krabi 98.3 97.4 98.4 99.7 99.2 98.8 99.3 99.9

Prachacheun 99.8 100.0 99.5 100.0 100.0 100.0 99.9 100.0

Rangsit Klong 7 99.0 93.8 92.7 93.7 99.7 98.3 98.0 98.3

Tung Song 99.9 97.5 93.7 99.5 100.0 99.1 97.8 99.8

Singburi 98.9 93.2 95.9 99.8 99.8 98.5 99.1 100.0

Pranburi 94.2 93.3 89.5 97.7 98.2 98.0 96.8 99.3

Mahachai 99.5 100.0 99.8 100.0 99.9 100.0 100.0 100.0

Maesai 100.0 99.7 99.5 100.0 100.0 100.0 99.9 100.0

Ranong 99.9 99.9 99.5 99.7 100.0 100.0 99.9 99.9

Samui 99.1 99.6 99.5 99.9 99.5 99.8 99.7 99.9

Pitsanulok 99.5 100.0 99.0 100.0 99.8 100.0 99.6 100.0

Amatanakorn 100.0 99.0 96.5 85.9 100.0 99.4 98.0 91.8

Petchaboon 99.9 100.0 99.7 98.9 99.9] 100.0 99.9 99.5

Lamlukka Klong 6 88.3 87.6 84.8 88.2 97.7 97.5 97.0 97.7

Sena 98.4 94.6 91.8 96.8 99.7 98.9 98.2 99.3

Rama I 97.6 99.5 99.4 99.8 99.3 99.9 99.8 99.9

Total average(3) 99.0 98.3 97.6 96.9 99.6 99.3 99.1 98.8

15

Notes:

(1) Average Occupancy Rate is derived by dividing the sum of the occupancy rates at the end of each month during the relevant period for the

relevant Initial Property by the number of months in the period.

(2) Lettable Area for Permanent Tenants means the indoor and outdoor rental areas leased out to tenants with tenancies of one year or more (excluding Tesco Lotus).

(3) Total Lettable Area means hypermarket area, food court area and Lettable Area for Permanent Tenants.

(4) Occupancy rate data is not available prior to 1 August 2008 because the area associated with vacant units was not recorded prior to that date.

(5) Calculated as a weighted average by Lettable Area for Permanent Tenants or Total Lettable Area of the above individual property's Average Occupancy Rates (as the case may be).

Tenant Profile

The Initial Properties include numerous well-known tenants. As of 30 November 2011, there were a total of 1,033 tenants. In addition to the Sponsor, other key permanent tenants at the Initial Properties include the operators in various trade sectors such as: (i) MK Restaurants, Fuji Restaurants, McDonald's and Mister Donut in the sector of food and beverages; (ii) Major Cineplex, Major Bowl, Tsutaya and Imagine in the sector of entertainment; (iii) Bangkok Bank, Kasikornbank, Krung Thai Bank and Siam Commercial Bank in the sector of services; (iv) Body Glove, Bossini, Bata and Top Charoen in the sector of fashion and accessories; (v) Boots, Watsons and Oriental Princess in the sector of health and beauty; and (vi) HomePro in the sector of other services, e.g. furniture and decorations.

The two largest permanent tenants (in terms of leased area) at the Initial Properties are Major Cineplex Group Public Company Limited and Home Products Center Public Company Limited. The leased area of the top ten permanent tenants as of 30 November 2011 was equal to 44.1% of the Lettable Area for Permanent Tenants at the Initial Properties. As of 30 November 2011, the top ten permanent tenants, except Major Cineplex, Major Bowl and HomePro, leased 21.0% of the Lettable Area for Permanent Tenants at the Initial Properties. The following table shows the information as of 30 November 2011 relating to the leased area and the percentage of leased area of the top ten permanent tenants at the Initial Properties.

Tenant Trade name Trade sector Leased area

(sq.m.)

Percentage of the Lettable Area for

Permanent Tenants (%)

Major Cineplex Group Public Company Limited

Major Cineplex Entertainment 17,452 18.8

Home Products Center Public Company Limited

HOME PRO Furniture and decorations

4,538 4.9

MK Restaurants Co., Ltd. MK Suki Food and beverages

3,703 4.0

Yum Restaurants International (Thailand) Co., Ltd.

KFC Food and beverages

3,422 3.7

Munkong Mungkung Panid Co., Ltd.

Out door mini plaza, Mobile Zone

Others 3,320 3.6

Major Bowls Group Co., Ltd. Major Bowl Hits Entertainment 2,589 2.8

Se-education Public Co., Ltd. Se-ed Book Center Others 2,105 2.3

Amorn Electronics Co., Ltd. Amorn Center of Electronic Parts

IT products and services

1,490 1.6

16

Tenant Trade name Trade sector Leased area

(sq.m.)

Percentage of the Lettable Area for

Permanent Tenants (%)

MC Property and Development Co., Ltd.

The Park Property development

1,230 1.3

B-Quik Co., Ltd. B-Quik Car Service and Maintenance

1,120 1.2

The following table shows the percentage of the leased area of the permanent tenants at the Initial Properties, which are categorised by trade sectors, against the Lettable Area for Permanent Tenants and against the Total Lettable Area as at 30 November 2011.

Trade sector

Percentage of leased area against Lettable Area for Permanent Tenants(1)

(% )

Percentage of leased area against Total Lettable Area(2)

(% )

Hypermarket - 53.8 Food and beverages 20.4 14.4 Entertainment 27.4 11.0 Services(3) 14.6 5.8

Fashion and accessories 16.4 6.5 Health and beauty 6.9 2.8 Others(4) 11.3 4.5

Vacant 3.0 1.2 Total 100.0 100.0

Notes:

(1) "Lettable Area for Permanent Tenants" means the indoor and outdoor rental areas leased out to tenants with tenancies of one year or more

(excluding Tesco Lotus).

(2) "Total Lettable Area" means hypermarket area, food court area and Lettable Area for Permanent Tenants.

(3) "Services" means financial services, car service and maintenance, education and others.

(4) "Others" means furniture and decorations, IT products and services and network services.

Apart from permanent tenants, the Sponsor also enters into short-term service agreements of less than one year with temporary users. For the nine-month period ended 30 November 2011, 8,193 sq.m. was used by temporary users.

Expiries

Generally, the permanent tenants enter into lease and service agreements with Tesco Lotus for a term of more than one year or more whereas the permanent tenants who are anchor tenants occupy an area of greater than 1,000 sq.m. As of 30 November 2011, 96.9% of the Lettable Area for Permanent Tenants of the Initial Properties was leased with the Average Occupancy Rate of 98.8% of the Total Lettable Area.

The following table sets forth details of expiries in respect of leases of permanent tenants and anchor tenants as of 30 November 2011 which are scheduled to take place during the periods indicated.

17

Period(1)

Total number of

expiring leases

Lettable Area for

Permanent Tenants of

expiring leases (sq. m.)

Expiring leases as a

percentage of Lettable Area

for Permanent Tenants (3) (%)

Expiring leases as a

percentage of Total

Lettable Area(4) (%)

Year ended 29 February 2012 130 7,658 8.3 3.3



Beyond 28 February 2014 337 50,852 54.8 21.9

Operating Lease Agreement

with Tesco Lotus(2)

17 139,137 - 60.0

Vacant space 46 2,790 3.0 1.2

Total 1,096 231,961 100.0 100.0

Notes:

(1) Date of expiring lease for permanent tenant or anchor tenant whose renewal of contract has been made prior to the expiration of existing

contracts is based on the expiring date of the contract after the renewal.

(2) Including hypermarket and food court areas. The Operating Lease Agreement has a term of 10 years which is renewable twice for a period of

10 years each. See "Certain Agreements Relating to the Fund and the Properties – Summary of Operating Lease Agreement" of the Fund

scheme for further details.




Insurance

Significant insurance policies carried by the Sponsor in relation to the Initial Properties include insurance for property all risk, third party liability, business interruption and terrorism. Under the property all risk insurance policy, the Sponsor is insured against losses and damages to certain significant properties. The third party liability policy covers the Sponsor's legal and contractual liabilities to other parties arising out of personal injury or death and property damage. There are no significant or unusual deductible amounts required under such insurance policies.

After the Fund has invested in the Properties, it has an obligation to procure that adequate and sufficient insurance policies are in place for its benefit in relation to the Properties.

Under the Property Management Agreement the Property Manager has an obligation to procure (at the cost of the Fund) that the insurance cover specified in the agreement is in place. To satisfy this obligation the Property manager shall procure (at the cost of the Fund) that the Fund is a beneficiary under the existing policies in order that it may benefit from levels of insurance coverage required by the Property Management Agreement in respect of all risks property (except Rama I where The Crown Property Bureau as a beneficiary will transfer any money received under the insurance policy to the Fund in the event that the Fund wishes to fix the damage), business interruption, public liability insurance, terrorism and leasehold insurance for Rama I.

Key Investment Highlights

1. High-quality portfolio of shopping malls in prime locations

The Fund’s Initial Properties will consist of high-quality shopping malls strategically located across Thailand, including many located in Greater Bangkok as well as in various tourist destinations and provincial regions. The Management Company believes that the Initial Properties are all located in prime locations which enhance the attractiveness of the shopping malls to existing and prospective tenants and help generate increased customer traffic. In addition to its prime location, each of the Initial Properties meets other key selection criteria including a large and densely populated catchment area, high visibility, accessibility to major roads and public transportation, availability of parking spaces and good infrastructure. With an average operating period of over seven years, the Initial Properties have proven performance and stable operating results catering to more than 2.3 million customers per month, boasting an Average Occupancy Rate of more than 99% during

18

the past three years. The Management Company believes that the land where the Initial Properties are located is scarce due to strict zoning regulations in Thailand, which offers the Fund a competitive advantage over other operators who cannot establish shopping malls in similar locations.

2. The Initial Properties are mostly freehold

When weighted by land area, 73% of the appraised value of the Initial Properties is attributable to freehold land held by the Fund and 27% is attributable to leasehold land. The leasehold land is subject to long-term leases with an average of approximately 26 years remaining on the lease. In addition, the Fund will invest in all shopping mall buildings on a freehold basis, except for Rama I which is owned by The Crown Property Bureau. As the Initial Properties are mostly freehold, the Fund will likely benefit more from the appreciation of the freehold properties as compared to funds that invest primarily in leasehold properties.

3. The Fund is in a position to capitalise on Thailand's economic growth

According to the Bank of Thailand and the Office of the National and Economic and Social Development Board, the real GDP growth rate in Thailand in 2010 was 7.8%. Although the estimated GDP growth rate in 2011 was reduced to 1.8% due to the impact of severe floods on the Thai economy, the Bank of Thailand estimated that the real GDP growth rate for 2012 will return to 4.8%. The Fund’s Initial Properties are strategically located across Thailand, including (1) six properties located in prime areas of Greater Bangkok which benefit from a well-established retail base of customers with higher purchasing power than in other areas in Thailand, (2) three properties located in the tourist destinations of Pranburi, Samui and Krabi, which benefit from Thailand's attractiveness as an international tourist destination, and (3) eight properties in prime areas of Thailand’s provinces, where the Fund may capitalise on the increasing disposable income of shoppers in these areas.

The Management Company believes that the geographical diversity of the Initial Properties will allow the Fund to benefit from several distinct regional markets across Thailand by being in a position to serve all categories of shoppers nationwide, thereby enhancing the stability of its future earnings in an environment of economic growth and increased consumer spending.

4. Strong growth prospects from an established acquisition pipeline

The Sponsor and the Fund will enter into a Mutual Undertaking Agreement and provide right of first refusal undertakings to each other such that each will have the right to purchase any land, buildings or leases of land that the other wishes to sell, thereby providing the Fund with an established acquisition pipeline for future growth. As of 30 November 2011, Tesco Lotus operated an extensive portfolio of 133 hypermarkets (including the Initial Properties) located in prime areas throughout Thailand. Subject to certain conditions under the Mutual Undertaking Agreement14, the Fund will have a right of first refusal in relation to any Tesco Lotus shopping mall having 3,000 sq.m. or more of hypermarket area (the "Right of First Refusal").

The Management Company intends to complement its acquisition growth strategy by exercising the Right of First Refusal granted by the Sponsor to the Fund where the acquisition meets the investment criteria of the Fund. For further details, please see "Strategy" .

5. Strong Tesco Lotus brand recognition and unique marketing position

Tesco Lotus is a pioneer and a leader of the modern retail sector and has established a strong presence in the retail market in Thailand. As of 30 November 2011, Tesco Lotus operated more than 900 stores of various formats catering to over 35 million customers each month, including over 7.5 million “ClubCard” members. Tesco Lotus shopping malls, including the Initial Properties, provide its customers with a destination shopping experience combining the offerings of Tesco Lotus hypermarket with other popular food, retail and entertainment establishments. The product and service offerings cater to a broad base of customers across all demographics.

14 a mutual undertaking agreement to be entered into between the Fund and the Sponsor relating to the right of first refusal, property non-compete,

property manager non-compete, unit lock-up and licence of trade marks, trade names and service names.

19

In addition, "Tesco Lotus" is one of the strongest and most recognised retail brands in Thailand. With Tesco Lotus as an anchor tenant, each of the Initial Properties will benefit from Tesco Lotus’ established brand name and long-standing reputation in the communities which they serve, thereby maintaining the Initial Properties' existing diverse tenant mix of local, national and international tenants, and attracting new tenants, which will in turn drive customer traffic and the performance of the Fund.

6. Optimum Balance between Stable Fixed Rent Security and Variable Rent Growth

The presence of Tesco Lotus, a leading local hypermarket and shopping mall operator in Thailand, as an anchor tenant across all the Initial Properties will enhance the Fund's income stability. Compared to other retail formats, the hypermarket format is more stable, due largely to the non-discretionary nature of the product offering, providing an avenue for consumers to make essential purchases for their households. This helps to draw consumers and boost shopper traffic to the shopping malls and provides resilience to the income stream across economic cycles.

The Initial Properties have a diverse mix of permanent tenants including well-recognised international and national chains as well as local entrepreneurs. These permanent tenants and anchor tenants operate in a variety of business sectors including (i) food and beverage such as MK Restaurants, Fuji Restaurant, McDonald's and Mister Donut, (ii) entertainment such as Major Cineplex, Major Bowling, Tsutaya and Imagine, (iii) financial service such as Bangkok Bank, Kasikornbank, Krung Thai Bank and Siam Commercial Bank, (iv) fashion and accessories such as Body Glove, Bossini, Bata and Top Charoen Optical, (v) health and beauty such as Boots, Watsons and Oriental Princess and (vi) furniture and decoration such as HomePro. In addition, temporary tenants, providing a constant variety of goods and/or services not generally provided by the permanent tenants, help keep the overall product offering of the shopping malls fresh.

The Average Occupancy Rates for Total Lettable Area of the Initial Properties for the period from 1 August 2008 to 28 February 2009 and for the two years ended 28 February 2010 and 2011 and for nine-month period ended 30 November 2011 were 99.6%, 99.3%, 99.1% and 98.8%, respectively. Such occupancy rates highlight the stability derived from having a diverse mix of tenants despite global economic downturns and local political events during the last three years. More recently, for the three-month period ended 30 November 2011, when Thailand was faced with its worst flooding in 50 years, the Average Occupancy Rates for Total Lettable Area remained at 95.8% which did not differ from typical historical occupancy rates.

7. Seasoned local property management team

The Fund will be able to leverage on the Property Manager's significant experience and strong track record of operating shopping malls in Thailand. The Property Manager will continuously monitor opportunities for enhancements to the Properties as well as changes to the tenant mix. The Property Manager's direct relationships with large tenants with stores at multiple shopping malls will enable it to increase the speed at which vacant space is leased out. Given the number of Tesco Lotus shopping malls and the Property Manager's established contacts with third-party service providers in such areas as cleaning and security, the Property Manager will be able to take advantage of economies of scale and obtain competitive pricing from such third-party service providers. In addition, the Property Manager's in-house renovation expertise will allow it to complete renovations to the Properties more efficiently than competitors without such expertise.

Provision for Benefit from the Property in which the Fund initially invests

Lease, Service and Ancillary Agreements

Currently, Tesco Lotus's arrangements relating to the Initial Properties are as follows:

Permanent tenants at each of the Initial Properties are requested to sign a lease agreement, a service agreement (providing for the provision of certain services including in relation to the common areas of the Property) and, in certain cases, a signage agreement (providing for the terms and conditions relating to advertisement of products and/or services of the tenants at the Property) prior to establishing their tenancy. Temporary users, who wish to be provided with services such as electricity, air-conditioning, cleaning service at the temporary users' specific areas, toilet and car parking, are requested to sign a service agreement for the use of space rather than a lease agreement due to the temporary nature of their use. Tenants and temporary users of the Properties are broadly categorised into two groups: (i) permanent tenants (including tenancies of one year or more and those with tenancies having an area of greater than

20

1,000 sq.m. are anchors) and (ii) temporary users (with service terms not more than six months). For permanent tenants, rent and service charges are based on (i) a fixed monthly amount; (ii) a variable amount based on the tenant's sales (either with or without a guaranteed minimum); or (iii) a combination of fixed and variable components. Service charges for temporary users are always based on a fixed amount. Certain lease agreements have renewal clauses, while others are for fixed terms and renewal is negotiated on a case-by-case basis. Agreements for use of the Properties are generally on standard terms and fall within the following categories (depending on the terms and conditions of the leases and/or the type of business of the tenants): lease and service agreements, pharmacy lease and service agreements, automatic teller machine lease agreement, play area service agreement, food court service agreement, signage agreement and space service agreement (temporary users). In addition to the standard term agreements, there is also an antenna service agreement.

At the time of entering into a lease agreement and/or service agreement, tenants and temporary users of the Properties are generally required to pay (i) a security deposit of an amount equivalent to, in the case of tenants, a certain number of months' rent, service fees, utilities and other fees and rates as required by the Government and (ii) monthly rent in advance. In the case of temporary users, three days prior to occupying the area, one month of the service charge and a one month security deposit are required to be paid in advance. Security deposits which will be refunded to the tenants and temporary users do not bear interest. Payments are made through a variety of means including cheque, bank wire and direct deposit.

Under the service agreements, tenants and temporary users are normally responsible for payment of outgoings such as utilities, service fees and other fees and rates as required by the Government to Tesco Lotus. Tenants and temporary users are generally also responsible for repairing, and paying all other expenses relating to, the interior of the premises, while the landlord is generally responsible for repairing the exterior and the main structure. Tenants and temporary users are generally not permitted to sublet the premises or assign their rights without the prior consent of the Fund.

Under the lease agreements, a tenant may terminate the lease prior to the scheduled expiration date by giving not less than 60 days' notice (in the case of lease agreements of three years or less) or 90 days' notice (in the case of lease agreements of more than three years). At least five business days' prior notice is required for termination of the temporary service agreements. The landlord has the right to terminate a lease upon the occurrence of certain events, such as non-payment of rent or breach of covenants by the tenants or temporary users. Tenants and temporary users are required under the lease and service agreements to use the premises only for the purpose allowed under the relevant agreement.

From the beginning of 2011, Tesco Lotus has implemented its policy of re-zoning the service area available to the temporary users within the shopping malls to temporary users' businesses and to decongest the common areas in the shopping malls in order to enhance customers' shopping experience. Tesco Lotus has adjusted service fees after the implementation of its policy to compensate for the decrease in service areas. The policy implementation was completed for all shopping malls of Tesco Lotus, including all Initial Properties, in October 2011.

The following diagram illustrates the structure of the Fund and indicates the relationships among the Fund, the Non-Tesco Lotus Affiliated Sponsors15 (as sellers and/or the lessors of the Initial Properties), the Sponsor (as an anchor tenant), the non-Sponsor tenants and the Property Manager upon the registration of the establishment of the Fund and the completion under the SPAs16.

15 non-Related Persons of Ek-Chai Distribution System Co., Ltd. who are also owners of the Freehold Properties or the Mixed Properties, lessors of the Leasehold Properties or the Mixed Properties, assignors of leasehold rights of the Leasehold Properties or grantors of rights in Properties to be transferred or leased to the Fund. 16 sale and purchase agreements relating to the Initial Properties which are the Freehold Properties, Leasehold Properties and Mixed Properties.

21

* Lease Transfer Agreements (and/or entering into new agreements) are (i) partial land lease agreements for Samui and Pitsanulok, (ii) land

lease agreements for Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena and (iii) land and building lease agreement for Rama I.

** SPAs are sale and purchase agreements for land and buildings owned by Tesco Lotus. With respect to Srinakarin, Krabi, Prachacheun,

Rangsit Klong 7, Tung Song, Singburi, Pranburi, Mahachai, Maesai and Ranong, the SPAs are for the sale and purchase of land and buildings

held on a freehold basis by Tesco Lotus. With respect to Samui and Pitsanulok, the SPAs are for the sale and purchase of partial land and

buildings held on a freehold basis by Tesco Lotus and the transfer of leasehold rights in relation to partial land leased by Tesco Lotus. With

respect to Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena, the SPAs are for the sale and purchase of buildings held on a freehold

basis by Tesco Lotus and the transfer of leasehold rights in relation to land leased by Tesco Lotus. With respect to Rama I, the Fund will

accept the transfer of leasehold rights of land and buildings.

*** The Mutual Undertaking Agreement includes the right of first refusal undertaking given to each party, subject to certain conditions, to

purchase any land, buildings or leases of land that the other wishes to sell or transfer.

**** The Property Management Agreement includes agreements relating to the Fund granting a utility concession to the Property Manager.

Utility Service Agreement (gas, water and electricity)

The Fund

Ek-Chai Distribution System Co., Ltd. (as anchor tenant)

Non-Sponsor permanent tenants and Temporary Users

Rental/ Service Income

Property Management

Agreement****

Lease and Service Agreement


(as Sponsor)


(as Property Manager)

SPAs**

Rental/ Service Income

Operating Lease Agreement and Service Agreement

Utility Service Income

Trade Mark Licence Agreement

Mutual Undertaking

Agreement***

Non-Tesco Lotus

Affiliated Sponsors

Advertising Concession and Revenue Sharing Agreement

Lease Transfer Agreement and/or New Agreement*

22

On completion of the purchase of the Initial Properties by the Fund:

• the Sponsor will enter into a separate Operating Lease Agreement with the Fund relating to each of the stores it currently operates together with the food court, warehouse and back office space in each Initial Property. The Sponsor will also enter into a separate service agreement with the Fund relating to services to be provided by the Fund in relation to the common areas in each of the Initial Properties. See "Certain Agreements Relating to the Fund and the Properties – Summary of Operating Lease Agreement" and "Certain Agreements Relating to the Fund and the Properties – Service Agreement" for further details;

• existing tenancies (except for pharmacy leases and service agreements in the hypermarket area and food court service agreements) will be transferred by operation of law such that the Fund will be the landlord under such agreements although tenants are being asked to acknowledge this as part of the novation agreement;

• service agreements (except for the provision of gas, water and electricity services to tenants and temporary users with separate meters) entered into between the Sponsor and existing tenants and temporary users will be transferred to the Fund by way of novation. Gas, water and electricity services will be provided by the Property Manager for its own account (see below); and

• existing tenants and temporary users will be requested to novate all other agreements to the Fund.

Existing tenants and temporary users will be requested to enter into a new utilities service agreement with the Property Manager whereby the Property Manager (who will be granted a utility concession from the Fund pursuant to the Property Management Agreement) will provide gas, water and electricity to the tenants and temporary users and will directly charge the tenants and temporary users for their usage.

To the extent that tenants or temporary users of the Initial Properties have not entered into new or novation agreements relating to existing lease and service agreements upon completion of the sale of the relevant Initial Property to the Fund, the Sponsor will provide undertakings in the sale and purchase agreements relating to the Initial Properties that after completion of the sale and purchase of the relevant Initial Properties, it will continue to facilitate the negotiation process so that the remaining tenants or temporary users will enter into new or novation agreements and the Sponsor will pay to the Fund an amount equal to any payments (excluding utilities charges) it receives from the existing tenants and temporary users. In addition, under the Property Management Agreement, following completion of purchase of the Properties by the Fund, the Property Manager will, among other things:

• manage the Properties including, but not limited to, managing the relationships with the tenants and temporary users of the Properties, collecting rent and service fees and ensuring compliance with the tenancy and other agreements by the tenants and temporary users of the Properties;

• provide the services to the tenants and temporary users on behalf of the Fund; and

• in its own name and for its own account provide gas, water and electricity to the tenants and temporary users of the Properties and charge them for their usage. The Property Manager will charge the Fund for gas, water and electricity usage at cost in the common areas and other areas of the Properties not occupied by a tenant or temporary user.

Media Income

The Sponsor has granted a concession in respect of advertising covering all its stores as follows:

Pursuant to a concession agreement between the Sponsor and VGI Advertising Media Company Limited ("VGI "), as amended and supplemented from time to time (the "Concession Agreement"), the Sponsor has granted VGI exclusive rights to manage, use and advertise in the Advertisement Space; conduct the EDA Activities at locations allowed for installation of fixtures or display screens (the "Display Screen Locations"); and broadcast an audio programme containing music, in-store announcements and commercial spots (known as "Tesco FM", the "Audio Programme") at VGI's cost. However, before conducting any advertising activity requested by an advertiser (who holds an advertising service contract in relation to the advertising on the Advertisement Space or the display screen on the Display Screen Locations, the "Advertiser"), VGI must give prior written notice on such advertising activity to the Sponsor unless the parties have agreed differently for a particular Initial Property.

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The Concession Agreement runs for a term of five years, expiring on 31 December 2014, which may be renewed (for a maximum of a further five years) by VGI's giving at least 12 months' prior written notice before the expiration date of the Concession Agreement.

VGI is responsible for three types of concession fee payable to Tesco Lotus, which are (i) the Advertisement Space concession fee, (ii) the EDA Activities concession fee and (iii) the Audio Programme concession fee. The Advertisement Space concession fee is calculated from the area of the Advertisement Space (and additional Advertisement Space, if any) and the concession fee rates (for exterior and interior) per square metre. VGI is required to make twice-yearly payments on 30 April and 30 September of each year. The EDA Activities concession fee and the Audio Programme concession fee are based on a revenue-sharing model and are payable monthly.

Upon completion of the purchase of the Initial Properties by the Fund, the Fund will enter into a revenue sharing agreement with the Sponsor pursuant to which the Fund grants the Sponsor a concession to advertise in those areas of the Initial Properties not leased by any party, including the Sponsor (i.e., the common areas of the Initial Properties). The Sponsor shall pay 90% of the revenue the Sponsor receives from VGI in relation to the lightbox advertising to the Fund within ten days of receipt of payment from VGI. The ratio of such revenue sharing is subject to change due to the change of the area under concession in the event that the Fund acquires any Additional Properties of Tesco Lotus or disposes of such Properties.

The Initial Properties are located in prime locations and can attract new anchor tenants

In order to benefit from its investment in the Initial Properties, the Fund will, pursuant to the Operating Lease Agreement, lease the hypermarket and food court areas in all of the Initial Properties to the Sponsor for a period of up to 30 years, consisting of an initial period of 10 years which is renewable two times for 10 years each. In the event of early termination of the Operating Lease Agreement or if an Operating Lease Agreement is not renewed, the Management Company believes that the quality and potential of the Initial Properties will permit it to procure new anchor tenants or replacement lessees in respect of each Initial Property without difficulty. The new or replacement tenants may be the retail operators in the same business same as Tesco Lotus or other unrelated businesses. In addition, the Fund is not required to lease the hypermarket area and/or food court area at each Initial Property to a sole operator, but may lease such area to numerous operators. See "Certain Agreements Relating to the Fund and the Properties – Summary of Operating Lease Agreement" for further details.

Certain important factors which will attract replacement anchor tenants in such situation include the following:

• The Initial Properties are strategically located in prime and/or commercial areas;

• Certain Initial Properties are in areas which are subject to stringent restrictions by city planning laws and regulations which limit the construction of large shopping malls or department stores. Therefore, it is unlikely that any such new stores will be constructed in the relevant areas in the future, thus limiting the availability of alternative locations for large retail tenants;

• As the hypermarket area to be leased by Tesco Lotus at each of the Initial Properties does not constitute a large rental area when compared to the area generally leased by anchor tenants, e.g. department stores or malls; and

• With an average operating period of over seven years, the Initial Properties have proven performance and stable operating results catering to more than 2.3 million customers per month, boasting an Average Occupancy Rate of more than 99% during the past three years. Although certain Initial Properties face direct or indirect competition, the Initial Properties benefit from having regular long-term customers which enables the Initial Properties to be consistently profitable with sustainable growth.

In the event of early termination of any of the Operating Lease Agreements by the Sponsor in breach of the relevant Operating Lease Agreement, the Fund would have the right to claim damages arising from such termination. Furthermore, the discount rate employed for the computation of net present value of future cash flows of each of the Initial Properties was determined based on the level of risk associated with owning such asset, including the risk of early termination of the Operating Lease Agreement.

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Strategy

The Management Company's principal investment strategy for the Fund is to own, and invest in, on a long-term basis, a diverse portfolio of income-producing freehold and leasehold rights to real property in Thailand which are used primarily for retail purposes. The Management Company's key objectives for the Fund are to deliver long-term and sustainable dividend income to unitholders and to achieve long-term growth in the NAV and dividend per Unit in order to provide unitholders with a competitive rate of return for their investment. The Management Company intends to achieve these objectives primarily through the following strategies:

• Active Asset Management and Enhancement Strategy – Enhance the competitive strengths of the property portfolio by leveraging on the brand name of the Sponsor and the experience and track record of the Property Manager and to maximise occupancy levels and optimise tenant mix, rentals and net lettable area, to increase operational efficiency and to reduce operating costs with the purpose of increasing property yields.

• Acquisition Growth Strategy – Identify and pursue attractive growth opportunities by acquiring income-producing properties used primarily for retail purposes and with competitive rates of return to enhance yields and returns to unitholders, subject to compliance with the securities law. To support this acquisition growth strategy, the Sponsor has granted the Fund a Right of First Refusal over all of the Sponsor’s existing and future shopping mall properties in Thailand. See "Certain Agreements Relating to the Fund and the Properties — Summary of Mutual Undertaking Agreement".

• Disciplined Capital and Risk Management Strategy – Employ an appropriate mix of debt and equity, subject to compliance with the Fund scheme and the securities law, in the financing of acquisitions and asset enhancements to optimise risk adjusted returns to unitholders.

Active Asset Management and Enhancement Strategy

Implementing proactive measures to enhance returns from properties in the portfolio

The Management Company, working closely with the Property Manager and leveraging on the Sponsor's brand name as well as the Property Manager's experience and track record, will implement proactive measures to enhance the returns from the existing and future properties in the Fund’s portfolio. Such measures may include:

• addition, alteration and renovation works including re-zoning, optimising the Total Lettable Area, enhancing the competitive strengths of the properties and reconfiguring certain retail units to achieve better efficiency and higher rental potential;

• targeting and marketing the shopping malls to appropriate tenants to achieve optimum tenant mix and maximise profits;

• improving ongoing marketing initiatives to attract higher shopper traffic, thereby achieving even greater tenancy demand;

• regularly reviewing the tenant mix to address ever-changing consumer preferences and market trends in the retail market;

• developing strong tenant relationships to maintain high tenant retention rate, minimise vacancies and expenses for sourcing new tenants;

• incorporating in leases appropriate step-up provisions in rental rates over the course of the lease terms; and

• optimising cost management of the Properties within budget.

Improving rental yields

The Management Company will leverage on the robust demand for retail space to continue to improve retail rental rates and maintain current occupancy rates. While the portfolio continues to enjoy high occupancy rates, the Management Company will actively manage lease renewals and new leases to minimise vacancy periods and improve rental income,

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through (i) advancing lease negotiations with tenants whose leases are about to expire, (ii) identifying and rectifying leases with below-market rents, (iii) active marketing to secure new tenants for impending vacant space and (iv) managing rental arrears to minimise bad debts.

Continuing to minimise Property expenses

The Management Company will work closely with the Property Manager to minimise property expenses without compromising the quality of services. By minimising operating expenses, the Management Company aims to further increase the Net Property Income.

Acquisition Growth Strategy

The Management Company intends to leverage on the Sponsor’s established network of relationships to pursue its acquisition growth strategy while seeking opportunities for property acquisitions that will provide attractive cash flows and yields for further income and capital growth.

The Fund will have a Right of First Refusal if the Sponsor wishes to sell, transfer or dispose of title to land or its interest in a lease of land in Thailand on which there is a shopping mall of greater than 3,000 sq.m. The Management Company will consider the qualifications of the properties to be invested in, such as yield thresholds, location, occupancy rates, rentals and leases, tenant profiles and mix, location, asset enhancement opportunities, land, building, engineering system, other facility and system specifications as well as expert assessments relating to potential capital expenditure requirements.

In evaluating acquisition opportunities, the Management Company will focus on the following investment criteria with respect to a property under consideration:

• Risk-adjusted return thresholds and maintaining or enhancing the Fund’s dividend yield to unitholders. The Management Company will seek to acquire properties with returns that are above the Fund’s risk-adjusted weighted average cost of capital and which are expected to maintain or enhance the Fund’s dividend yield to unitholders.

• Location. The Management Company will evaluate properties in terms of their micro-market locations, potential catchment areas, competition within the vicinity and accessibility to major roads and public transportation.

• Tenant mix and occupancy characteristics. The Management Company will seek to acquire properties with opportunities to increase rental and improve tenant retention rates vis-a-vis competing properties in the respective micro-property markets. The properties should have or have the potential to realise healthy occupancy rates with established tenants of good credit standing which minimises rental delinquency and tenant turnover.

• Value-adding opportunities and asset enhancement potential. The Management Company will seek to acquire properties with opportunities to increase occupancy rates and enhance value through proactive asset enhancement initiatives. The potential to add value through selective renovations or other enhancements will also be assessed.

• Building and facilities specifications. The Management Company will acquire buildings with good quality specifications which are in compliance with legal, building control and zoning regulations, with due consideration being given to the size and age of the buildings. The buildings will be assessed by independent experts relating to repairs, maintenance and capital expenditure requirements in the short and medium-term.

The Fund intends to hold the properties it acquires on a long-term basis. However, in the future where the Management Company considers that any property has reached a mature stage that offers limited scope for further growth and/or an opportunity arises which allows a property to be disposed of for the best benefit of the the Fund, the Fund may consider disposing the property and using the proceeds from such sale or disposal to invest in new properties with better potential for growth.

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The investment in Navanakorn and Salaya sites pursuant to the Right of First Refusal under the Mutual Undertaking Agreement is expected to occur within the financial year ending 28 February 2013. In relation to the investment in these two properties, the Management Company plans to borrow up to 10 per cent of the NAV and if the amount of the borrowing is insufficient for such investment, it will increase the capital of the Fund.

At present, the Navanakorn site is a Leasehold Property and Salaya is a Mixed Property whereby Tesco Lotus is negotiating an agreement to purchase such land from the owner to enable the Fund to take an assignment under such agreement to acquire the land in the future if it wishes to invest in such Additional Properties.

The investment in any Additional Properties will be in accordance with the above-mentioned criteria and the securities law.

Preliminary information about the real properties located at Navanakorn and Salaya (as of 31 August 2011, unless otherwise specified) is as follows:

Preliminary Information Navanakorn Salaya

Title to land Leasehold Leasehold and Freehold

Title to buildings Freehold Freehold

Land area 31-0-51 rai or 49,620 sq.m. 39-0-99 rai or 62,796 sq.m.

Age of building (approx.) 4 years 3 years

Lettable Area for Permanent Tenants(1)

9,910 sq.m. 8,399 sq.m.

Total Lettable Area(2) 19,711 sq.m. 17,231 sq.m.

Gross Floor Area(3) 40,011 sq.m. 25,765 sq.m.

Revenue(4) (Baht Million) 100.0 (for the financial year ended 28

February 2010) 103.6 (for the financial year ended 28 February 2011)

84.7 (for the financial year ended 28 February 2010)) 90.5 (for the financial year ended 28 February 2011)

Number of permanent tenancies 101 86

Notes:




(3) "Gross Floor Area" means with respect to the shopping mall building, that area which includes hypermarket area, food court area, Indoor

Lettable Area for Permanent Tenants, common area, service area and indoor car park area.

(4) Does not include (i) the rental and service fees derived from the lease of hypermarket area and food court area by the Sponsor because before

the Fund was established, the Sponsor was the owner of those areas and, therefore, did not need to pay the rental and service fees; and (ii) the

revenue from fees paid by VGI.

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Disciplined Capital and Risk Management Strategy The Fund aims to optimise its capital structure and minimise cost of capital within the borrowing limits permitted by the securities law and intends to use a combination of debt and equity to fund future acquisitions, asset enhancement initiatives and other developments. The Fund intends to maintain a strong balance sheet by adopting and maintaining an optimal gearing ratio subject to the securities law. The key aspects of the proposed capital and risk management strategy are as follows: To maintain an aggregate leverage within permitted limits The Fund will aim to maintain its aggregate leverage within borrowing limits allowable under the securities law. Furthermore, by achieving the right ratio of debt and equity, the Fund will be able to minimise its cost of capital and maximise returns to unitholders. To adopt a proactive interest rate management strategy The Management Company will adopt a proactive strategy to manage the risk associated with changes in interest rates on any future loan facilities while also seeking to ensure that the Fund’s ongoing cost of debt capital remains competitive.

The Fund will be subject to risks associated with debt financing, including the gearing limit as stipulated by the securities law and this may affect the Fund’s ability to fund capital expenditure requirements and acquisitions to expand its portfolio.

Summary of material details of the Agreements

Please see "Summary of certain agreements relating to the Fund and the Properties" for further detail.

Summary of the Property Management Agreement

The Fund will appoint the Sponsor as the Property Manager for all the Properties under the Property Management Agreement.

Appointment of Property Manager, Effective Date and Term

The Fund appoints the Property Manager and the Property Manager accepts the appointment by the Fund to be the manager of the Properties to the intent that the Property Manager shall be responsible for the management and control of the Properties and to perform or provide the services set out in the Property Management Agreement, and the administration of the leases, tenancies and service agreements in respect of the Properties or any part or parts thereof during the term of the Property Management Agreement upon the terms and conditions of the Property Management Agreement. The Property Manager is also appointed as the manager of any Additional Property for the remainder of the term of the Property Management Agreement.

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The Property Manager may enter into contracts with qualified third party service providers that are vetted and approved by the Fund for the provision of services.

The Property Management Agreement will be entered into by the Fund and the Property Manager but shall be conditional on completion of any of the sale and purchase agreements relating to any of the Properties pursuant to which the Fund purchases such Property. The Property Management Agreement shall continue for a period of 15 financial years and shall be automatically renewed for a further period of 15 financial years unless otherwise agreed by the parties or terminated sooner according to its terms.

Property Manager's Duties

During the term of the Property Management Agreement, the Property Manager shall:

(a) in its own name manage the Properties efficiently in accordance with the principles of good property management and administration of lease, tenancy and service agreements and adhere to the organisational chart and reporting lines agreed with the Fund and in accordance with such reasonable directions as may from time to time be given by the Fund; and

(b) comply with all applicable laws and advise the Fund regarding laws with which the Fund must comply in relation to the Property Management Agreement or the Properties.

Without limiting (a) and (b) above or the powers and duties imposed by law or by commercial usage on agents engaged for the purposes of administration of lease, tenancy and property management, the Property Manager shall have the following powers and duties: management of leases and service agreements, facilitating governmental authority assessments, budget forecasting and planning, premises hand over/taking over, Occupiers’ fitting out, Occupier relationship management, maintenance management, car park management, contract management, administrative management, building safety, financial and cost management, marketing services, preparation of the annual business plan and budget and rent and service fee collection, operation of bank accounts and other duties as may from time to time be reasonably required by the Fund.

Property Manager's Fees

The Property Manager shall be paid the following fees:

(a) Recurring Fees:

A. In respect of rental and service fees collection a cash monthly rental collection fee (the "Rental Collection Fee") equivalent to 2% of the monthly Net Property Revenue;

B. In respect of property, lease and service agreement management a fee (the "Property and Lease Management Fee") at a rate of 0.30% per annum of the Fund's Net Asset Value of the previous month payable in equal monthly instalments; and

C. In respect of the property, lease and service agreement management incentive a cash monthly fee (the "Property and Lease Management Incentive Fee") of 1.5% of the Net Property Income;

(b) The Rental Collection Fee, Property and Lease Management Fee and the Property and Lease Management Incentive Fee shall be payable in accordance with 'Payment of fees, costs and expenses' below, to the Property Manager within 30 days from the last day of each month provided that the Property Manager has duly invoiced the Fund for such amount.

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(c) Subject to such approval as is required under the other terms of the Property Management Agreement or any applicable regulations or legislation, the Rental Collection Fee, Property and Lease Management Fee and the Property and Lease Management Incentive Fee will be reviewed and mutually agreed by the Fund and the Property Manager prior to each renewal.

(d) In respect of overseeing works which would be considered capital expenses or demolition expenses (whether such demolition expenses are paid in cash or in kind) at the rate of 2.00% of the total Capital Expenses or Demolition Expenses (as applicable), excluding design fees, advisers fees and other professional fees.

(e) In respect of new lettings and service agreements in the Properties:

(i) a commission fee (the "Commission Fee") of:

(A) the equivalent of one and one half month's rent and service fees in respect of each and every rental and associated service agreement(s) for successive periods of 36 months or more in respect of new leases or tenancies;

(B) the equivalent of one month's rent and service fees in respect of each and every rental and associated service agreement(s) for successive periods of 12 months or more but less than 36 months in respect of new leases or tenancies;

(C) the equivalent of one half month's service fees divided by 12 and multiplied by the length of the service agreement in months in respect of each and every rental for successive periods of less than 12 months in respect of new leases or service agreements,

(D) Where the Property Manager employs a third party agent to procure an Occupier in respect of any Unit, the fees payable to such third party shall be borne by the Property Manager provided that this will not prejudice any rights of the Property Manager to receive any commission.

(f) In respect of renewals of lease or service agreements in the Properties a commission fee (the "Renewal Commission Fee") of the equivalent of half of one month's rent and/or associated service fee in respect of each and every renewal by an existing tenant. If the renewal is of a service agreement for a period of less than 12 months the Renewal Commission Fee shall be the equivalent of one half month's service fee divided by 12 and multiplied by the length of the service agreement in months.

(g) The Commission Fee and the Renewal Commission Fee shall be payable in accordance with 'Payment of fees, costs and expenses' below to the Property Manager within 30 days from the execution of the relevant lease agreement or service agreement or renewal of lease agreement or service agreement provided that the Property Manager has duly invoiced the Fund for such amount. If rental or service fees are variable the Commission Fee or Renewal Commission Fee shall be based on the average monthly rental and/or service fees of the first three months of the relevant lease and/or service agreement and shall be paid within thirty days of determination of the Commission Fee or Renewal Commission Fee.

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(h) In respect of acquisitions or disposals, an acquisition/disposal fee (the "Acquisition/Disposal Commission Fee") of:

(i) the equivalent of 1.5% of the acquisition value of such property; and

(ii) the equivalent of 0.75% of the disposal value of such Property;

(i) The Acquisition/Disposal Fee shall be payable in accordance with 'Payment of fees, costs and expenses' below to the Property Manager within 30 days from the completion of the relevant sale or purchase agreement provided that the Property Manager has duly invoiced the Fund for such amount.

(j) For the period expiring on 28 February 2014, the parties agree to waive the Commission Fee, the Renewal Commission Fee and any Rental Collection Fees relating to the rent and service fees paid by the Sponsor to the Fund in respect of areas leased by the Sponsor and the associated service agreements. Each fee referred to in the Property Management Agreement is exclusive of applicable tax (including VAT) and shall accordingly be construed as a reference to that amount plus any tax in respect of it.

Payment of fees, costs and expenses

Fees are payable by the Fund to the Property Manager provided always that the Fund shall also pay all costs and expenses of third parties, out of pocket expenses and professional fees incurred by the Property Manager.

Utilities

(a) In consideration of the Property Manager accepting full and sole responsibility for payment to the public utility companies for the supply of gas, water and electricity (the "Utilities ") to the Properties, the Fund grants the Property Manager a concession to provide the Utilities to the Occupiers with the following rights and obligations:

(i) the Property Manager shall be solely responsible in its own name for payment to the relevant public utility companies for all supplies of Utilities to the Properties;

(ii) the Property Manager shall charge in its own name and for its own account the Occupiers for Utilities supplied to them;

(iii) the Property Manager shall charge current Occupiers for Utilities at the rates that Occupiers are charged immediately prior to the date of the property management agreement;

(iv) the Property Manager shall charge the Fund for the supply of Utilities to the Common Areas and other parts of the Properties not occupied by an Occupier at the same rate that the Property Manager pays the relevant public utility company;

(v) the Property Manager shall be permitted to increase the rates charged to Occupiers in line with increases to the rates charged by the relevant public utility companies;

(vi) the Property Manager shall not charge new Occupiers for the Utilities at unreasonably high rates; and

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(b) Upon expiration or termination of the property management agreement the Property Manager shall use its reasonable endeavours to, as soon as reasonably practicable:

(i) transfer all meters connected with the supply of the Utilities to Occupiers to the Fund (or as the Fund directs); and

(ii) transfer the rights and obligations under all agreements with Occupiers for the supply of the Utilities to the Fund (or as the Fund directs).

Assignment and nomination of another entity to be Property Manager

Either the Fund or the Property Manager may assign any or all of its rights, benefits, interests and obligations hereunder with the prior written consent of the other party provided that no such consent shall be required if the Property Manager novates all its rights, benefits and obligations under the Property Management Agreement to any wholly owned, direct or indirect subsidiary of the Sponsor which is able to provide the services required of it according to the Property Management Agreement and which can meet all the requirements of the Property Management Agreement and all applicable regulations or legislation, especially those on the expertise, resources and experience of personnel of the Property Manager.

Events of Default and Termination

(a) Termination on Sale or Damage or Destruction of Properties

In the event of the sale of all the Properties, the Fund will be entitled to terminate the Property Management Agreement by not less than 30 days’ prior written notice to the Property Manager. Upon such termination and subject to the other provisions of the Property Management Agreement, the Property Manager shall not have any claims against the Fund in respect of such termination.

To the extent permissible by applicable laws and regulations, the Fund will notify the Property Manager as soon as is practicable when a binding agreement is signed for the sale of all the Properties including the sale date.

In event of the sale of any one of the Properties or the termination or expiration of the lease agreement relating to the land on which any one of the Properties is situated, the appointment of the Property Manager in respect of such Property under the Property Management Agreement shall terminate automatically upon the date of sale of such Property or expiration of termination of such lease agreement (as applicable) in respect of the relevant Property only.

To the extent permissible by applicable law, the Fund will notify the Property Manager as soon as is practicable when a binding agreement is signed for the sale of any one of the Properties including the sale date.

In the event that a Property is damaged or destroyed and cannot be repaired or rebuilt such that the lease with the anchor tenant of such Property is capable of being terminated, the appointment of the Property Manager under the Property Management Agreement in respect of such Property shall terminate automatically upon the termination of the lease agreement between the Fund and such anchor tenant.

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(b) Termination for Breach or Insolvency

The Property Management Agreement may be terminated by a party immediately by written notice to the other party (the "Defaulting Party") if the Defaulting Party:

(i) is in material or persistent breach of the Property Management Agreement and if the breach is capable of remedy, fails to cure the breach within 90 days’ of its receipt of a notice in writing from the other party to remedy such breach;

(ii) if:

(A) is the Property Manager and the Occupancy Rate of all Properties decreases to below 60%; and

(B) the Net Property Revenue Falls below 50% of the Annual budget and Business Plan,

for more than three consecutive months the Property Manager shall be deemed to be the Defaulting Party. For the purpose of the Property Management Agreement, the term "Occupancy Rate" shall mean the total leased area of all the Properties (excluding any area leased or occupied by the Property Manager) divided by the total net leasable area of all the Properties, excluding any areas which become non-leasable for a certain period for the reason of force majeure, repairs, refurbishment or decorative work therein. In the absence of manifest error, the monthly report on the Occupancy Rate prepared by the Property Manager shall be conclusive of the "Occupancy Rate";

(iii) lacks any qualification as prescribed by the SEC or the SEC and fails to rectify such event within 120 days’ of its receipt of a notice in writing from the other party to remedy such event provided that where the Defaulting Party is the Property Manager it shall be entitled to select any person fully qualified in accordance with the requirements of the SEC or the SEC to act as the property manager under the terms and conditions of the Property Management Agreement in its place. Such person shall be approved by a resolution of a meeting of the unitholders as soon as reasonably practicable following their selection by the Property Manager. For the avoidance of doubt, such meeting of unitholders and resolution approving such person selected by the Property Manager need not be obtained within 120 days of receipt of a notice in writing requiring compliance with the qualification prescribed by the SEC. In such event, the Property Management Agreement shall not be terminated; or

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(iv) is declared (not subject to appeal) bankrupt by a court of competent jurisdiction in Thailand.

(c) Termination on Mutual Agreement of the Parties

The Property Management Agreement may be terminated at any time by mutual agreement of the parties in writing.

(d) Conditions to Termination

Termination of the Property Management Agreement by the Fund pursuant to items (b)(i) and (b)(ii) under 'Termination for Breach or Insolvency' above is conditional upon the passing of a resolution of unitholders holding a majority of all the issued Investment Units. Where the Property Manager is the Defaulting Party and (i) is in material breach of the Property Management Agreement and fails to take the remedial action within the specified time period and such default significantly affects the administration of the Properties; or (ii) the Occupancy Rate and the Net Property Revenue fall below the specified thresholds for more than three consecutive months, and if the Property Manager is a unitholder, the Property Manager shall not be entitled to vote on the resolution to terminate the Property Management Agreement.

(e) Termination on Dissolution of the Fund

In the event that the Fund is dissolved in accordance with its fund scheme the Property Management Agreement may be terminated by the Property Manager immediately by written notice to the Fund. In the event that such dissolution is due to the fault of the Fund, the Property Manager reserves the right to claim the penalty referred to in (g) below.

(f) Termination for Change of Control of the Fund

If at any time after the date of the Property Management Agreement:

(i) a person or persons acting in concert together obtain ownership or control, directly or indirectly, of Investment Units carrying more than 30% of the voting rights attaching to the Investment Units of the Fund then the Property Manager shall have the right to terminate this Agreement upon six (6) months' notice in writing to the Fund; or

(ii) the Investment Units of the Fund cease to be listed on the SET then the Property Manager shall have the right to terminate the Property Management Agreement upon 30 days’ notice in writing to the Fund.

(g) Consequences of termination

Upon termination of the property management agreement by the Fund without breach or default by the Property Manager the Fund shall pay a penalty to the Property Manager of an amount equal to two years' fees payable to the Property Manager under the Property Management Agreement on the basis that the waiver referred to in (j) under Property Manager's Fees above did not apply.

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Governing Law and Arbitration

The Property Management Agreement is governed by the laws of Thailand and are subject to arbitration under the Arbitration Rules of the Thai Arbitration Institute. The seat of arbitration shall be Bangkok. There shall be three arbitrators. The language of the arbitration shall be Thai. The arbitration and any rulings or awards must be kept confidential expect as required by law, regulation, order of the tribunal or agreement of the parties or if the information is already in the public domain (other than as a result of breach of a party's confidentiality obligations).

Investment in the future

Regarding investment in the future, the Management Company may consider investing further and/or adjusting the portfolio by buying, selling, or renting the Properties for the Fund and seeking additional benefits from such Properties. There are guidelines for investment and the management which are under the boundaries and in the same direction as the purpose of the Fund scheme and the investment policy of the initial investment. However, the Management Company may refer this matter to the Investment Committee to consider and provide guidelines in relation to the investment.

Further, the Management Company shall give overriding importance to the overall profit of the Fund and the investment of the Fund shall be within the scope of as stipulated in the Fund scheme.

Please see "Strategy" for further details.

Transactions with Related Persons17 of the Fund

The investment of the Fund includes the acquisition of the Initial Properties which have been owned or leased by Ek-Chai Distribution System Co., Ltd. before the date of the investment by the Fund. Ek-Chai Distribution System Co., Ltd. will be appointed by the Fund to be the Property Manager under the Property Management Agreement upon completion of the acquisition of the Initial Properties by the Fund. Under the Property Management Agreement to be entered into between the Fund and Ek-Chai Distribution System Co., Ltd., reasonable fees as determined on an arm's length basis will be paid to the Property Manager for the services it renders.

Upon completion of the subscription of the Investment Units and the registration to establish the Fund with the SEC, the Sponsor will hold 25% of the total number of Investment Units offered for sale in the Combined Offering. After the Sponsor has transferred the Initial Properties to the Fund, Ek-Chai Distribution System Co., Ltd. will enter into the Operating Lease Agreement and Service Agreement with the Fund and become an anchor tenant with respect to the Initial Properties. Under such Operating Lease Agreement and Service Agreement, the rents and other service fees payable by Ek-Chai Distribution System Co., Ltd. will be determined on an arm's length basis.

After the Fund's investment in the Initial Properties and throughout the period whereby Ek-Chai Distribution System Co., Ltd. is the Property Manager and/or unitholder holding more than 10% of the total number of Investment Units sold, any transaction relating to investment in the Additional Properties or disposal of the Properties between the Fund and Ek-Chai Distribution System Co., Ltd. will have to be entered into on an arm's length basis and comply with the conditions and requirements prescribed under Sor Nor. 29/2549.

Dissolution of the Fund

The Fund shall be dissolved upon the occurrence of any of the following cases:

• when the number of unitholders is less than 35, the Fund shall be dissolved on the next business day from the date of acknowledgement of such event;

17 persons having a relationship with subscribers, unitholders, Sponsors, Institutional Investors or the Specific Investors, as the case may be, under

Sor Nor. 25/2552. Such persons include: (1) spouse and non sui juris children; (2) any juristic person, and its shareholder or partner, holding shares, or being a partner in the juristic person directly or indirectly, of more

than 50% of the total issued shares or partnership portion of such juristic person, as the case may be; and (3) any private fund of persons under (1) or (2) above.

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• when the registered capital is less than Baht 500 million, when calculated from the par value of Investment Units, the Fund shall be dissolved on the next business day, except if the Fund is invested only in Leasehold Properties;

• when the Management Company is unable to invest in the Properties according to the conditions specified in the Fund scheme, except in the case that the Management Company increases the registered capital in order to make investment in Additional Properties, but the value of the Investment Units sold is insufficient for the additional investment or the Management Company is unable to make such investment;

• upon obtaining a resolution passed by a majority vote of the unitholders, based on the total number of Investment Units sold;

• when the term of the Fund expires (if any); or

• in the event the Fund has been registered as a property fund with the SEC, when the SEC orders that the Management Company dissolves the Fund because (i) the Management Company made amendments to the Fund scheme, which are contrary to or inconsistent with the stipulations pursuant to notification of the SEC, without approval from the SEC, (ii) the Management Company has offered, disposed and allotted Investment Units by violating or failing to comply with the stipulations of the SEC in relation to initial public offering of Investment Units to Retail Investors, or Sponsors18, or Related Persons, or the allocation to the Foreign Investors or the stipulations of the SEC regarding offering of Investment Units for the purpose of increasing registered capital, (iii) it appears that the Management Company performs any act, or any person holding Investment Units by conspiring or agreeing with other persons, which is concealing or disguising the true nature of the holding of Investment Units of any person or Related Persons who wish to hold Investment Units in an amount exceeding one-third of the total number of Investment Units sold, (iv) there is a reason to suspect that the Fund may be established for seeking benefits from investment by any specific person or group of persons, or as a tool in managing the assets or businesses of any person or group of persons, about which the Management Company or connected persons cannot clarify, present reasons, facts or evidence, or which has been clarified, but cannot prove or make it believable that the establishment of the Fund is the establishment of a fund which actually offers Investment Units for sale to the public, or may not be able to make corrections or perform any act within the timeframe prescribed by the SEC in order that the Fund actually offers Investment Units to the public and (v) the Management Company acts or omits to act, in a way which causes damage to the Fund.

Additional Circumstances for Dissolution of the Fund

The Fund may be dissolved when the competent authority, such as the SEC or the competent court, orders the Management Company to dissolve the Fund or the Management Company has resigned and the Fund is unable to appoint a new Management Company within 180 days from the date of receipt of notice from the Management Company, or upon the occurrence of eventsas specified in the Fund scheme as well as the Management Company's inability to invest in Initial Properties.

Procedures of the Management Company upon Dissolution of the Fund and Liquidation Process

Where the Management Company considers it necessary and appropriate to dissolve the Fund, the Management Company shall dispose of the Properties of the Fund by an open procedure and in a manner that is in the best interest of the Fund.

Upon dissolution of the Fund, the Management Company shall procure a liquidator approved by the SEC to dispose of the assets of the Fund, pay the debts of the Fund, collect and distribute money or assets to unitholders as determined by the Management Company in proportion to their respective unitholding according to the register of unitholders, as well as to do any other necessary acts to complete the liquidation in accordance with the rules, conditions and procedures prescribed by the SEC. After completion of liquidation, the liquidator shall apply for registration of dissolution of the Fund with the SEC. The remaining assets, if any, shall be vested in the SEC.

18 Ek-Chai Distribution System Co., Ltd. and the Non-Tesco Lotus Affiliated Sponsors whose aggregate holdings of the Investment Units shall not

exceed 33% of the total number of Investment Units sold.

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In the liquidation process, the liquidator shall dispose of the properties of the Fund in order to collect cash, bank deposit or the promissory notes issued by the commercial banks or finance company. In this regard, the liquidator may assign the Management Company to proceed on its behalf.

In the case where necessity or appropriateness prevents the disposal of the properties of the Fund, the liquidator, the Management Company and the Trustee shall jointly consider the action to be taken in relation to such properties as appropriate, by taking into account the benefits to be received by the Fund as a priority.

Trustee

The Hongkong and Shanghai Banking Corporation Limited, Bangkok Branch HSBC Building, 968 Rama IV Road, Silom Sub-District, Bangrak District, Bangkok 10500 Tel: (02) 614 4000 Fax: (02) 632 4818

Registrar

Krung Thai Asset Management Public company Limited No. 11 Q-House Sathorn Building, M, G, and 10th Floor South Sathorn Road, Thung Mahamek Sub-district Sathorn District, Bangkok 10120

Tel: (02) 670-4900 Fax: (02) 679-1824

Auditor

Mrs. Unakorn Phruithithada, PricewaterhouseCoopers ABAS Ltd. 15th Floor Bangkok City Tower 179/74-80 South Sathorn Road Thung Mahamek Sub-district, Sathorn District Bangkok 10120 Tel: (02) 344-1000 Fax: (02) 286-5050

Accounting period

The end of an annual accounting period is the last day of February.

The initial accounting period ends on 28 February 2013.

Dividend Policy

The Fund scheme has a policy to pay dividends to unitholders no more than four times annually.

In order to comply with the Fund scheme and the securities law, if the Fund has a net profit in a given year, it shall pay not less than 90% (or any other percentage as may be permitted by the securities law from time to time) of the net profit for the year as dividends to unitholders. If the Fund has accumulated profits, it may pay dividends to unitholders out of such accumulated profits. Such net profit and accumulated profits shall not include profits arising from the Appraisal, or the Review of the Appraisal, of the Properties of the Fund in that given year. However, the payment of dividends from the aforementioned net profit in a given year can be made only when such payment does not increase the amount of accumulated losses of the Fund.

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The Fund shall pay such dividends to unitholders within 90 days from the end of the financial year of the Fund or, with respect to an interim dividend payment, from the day following the closing date of the register of unitholders for dividend payment (as the case may be), except where there is a necessary cause which prevents payment of interim dividends, in which case the Management Company shall notify the unitholders and the SEC in writing accordingly.

Additional Conditions:

If the value of interim dividends per Investment Unit to be paid is lower than or equal to Baht 0.10, the Fund reserves the right not to pay dividends at that time and to bring such dividends forward for payment together with the payment of annual dividend, proceeding in accordance with the dividend payment criteria as specified.

If the criteria for dividend payment are otherwise amended, supplemented, announced, prescribed, instructed, approved and/or relaxed by the SEC, and/or any other competent authority under Thai law, the Management Company shall proceed accordingly. In such event, it shall be deemed that approval has been obtained from unitholders.

Conditions and Methods for Payment of Dividends

The provisions below are subject to the Rules and Limitation on Holding of Investment Units.

(1) If it appears to the Management Company that any person or such person's Related Person holds more than one-third of the total Investment Units of the Fund sold;

The Management Company shall not pay the dividends to that person or its Related Person which represent the portion of the Investment Units in excess of one-third of the total number of the Investment Units sold.

In the consideration of the pay out of the dividends to any Related Person in the aforementioned scenario, the Management Company shall calculate the number of Investment Units entitled to dividends of the each Unit Holder within that group by using the method of taking the average of the proportion of the holding of Investment Units of each Unit holder (pro rata basis) as the group shall not exceed one-third of the total Investment Units of the Fund sold) unless the SEC or other relevant agencies orders or decides otherwise.

(2) In cases where any person or its Related Person holds more than one-third of the total Investment Units already sold is any Specific Investors (or their Related Persons);

The Management Company shall not pay the dividends to that person or its Related Person which represent the portion in excess of 50% of the total Investment Units sold.

In the consideration of the pay of the dividends to any Related Person in the aforementioned scenario, the Management Company shall calculate the number of Investment Units entitled to dividends of the each Unit holder with that group by using the method of taking the average of the proportion of the holding of Investment Unit of each Unit holder (pro rata basis) as the basis for the calculation (the total number of Investment Units entitled to dividends of person of the same group shall not exceed 50% of the total Investment Units of the Fund sold) unless the SEC or other relevant agencies orders or decides otherwise.

(3) In cases where a person or its Related Person holding more than one-third of the total Investment Units sold is the [underwriter or selling agents?] during the period of time in which the said person hold the Investment Units received in accordance with its commitment under an underwriting agreement, but not exceeding one year from the date of the receipt of the Investment Units.

The Management Company shall pay out the dividends to the said person in accordance with the proportion of the holding of Investment Units of that person.

(4) The Management Company will announce a dividend payment, book-closing date, and dividend ratio through:

(i) an announcement in at least one newspaper;

(ii) putting up a public notice at every office of the Management Company;

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(iii) sending letters to the unitholders in the list on the book-closing date, Trustees, and the SET.

(5) The Management Company will make dividend payments through bank transfer to bank accounts of the unitholders or crossed account-payee-only cheques, drafts or bill of exchange according to the names and addresses in the register book of the unitholders. The Management Company shall deduct any fees and expenses from such payment.

The Management Company shall withhold tax at the rate of 10% or at such other rate as prescribed by law for the dividends paid to individual unitholders who have expressed their intention to let the Management Company withhold tax, except where the individual unitholders have given written notification to the Management Company to do otherwise within five days from the closing date of the register of unitholders.

(6) In case the Unit holder does not invoke his right to certain dividend within the statute of limitation under the Civil and Commercial Code, the Management Company will not use such dividend in any way other than for the benefit of the Fund.

(7) In case the Fund cannot pay dividend due to the reasons in Conditions and Methods in Payment of Dividends and Rules and Limitation on Holding of Investment Units, the Fund will proceed to make that part of dividend that cannot be paid belong to the Government, and will deem that the unitholders are aware and consent to such actions.

During the time that the Management Company has not undertaken to send the unpaid dividend to the Government as mentioned in the first paragraph, the Management Company will separate the account of such dividend apart from other assets of the Fund and will not include it in the calculation of the net asset value of the Fund.

Increase of Capital of the Fund

1. The Fund management company may increase the registered capital of the Fund in order to make additional investment in property or leasehold or renovate the property acquired by the Fund into a good condition to be suitable to gain economic benefits.

2. In increasing the registered capital of the Fund, the Management Company shall:

(1) obtain approval from unitholders on the number of Investment Units and amount of registered capital to be increased, method of determining the price of Investment Units to be offered, method of offering Investment Units, amendment of the Fund scheme with respect to the total number of Investment Units and amount of registered capital of the Fund upon successful completion of the offering with the votes as follows:

(a) Circulated resolution : more than one half of total number of Investment Units represented by all eligible unitholders;

(b) Unitholders meeting : not less than three-fourth of the total number of Investment Units of unitholders who attend a meeting and have the right to vote. There will be not less than 25 unitholders or one half of the total number of unitholders. Such unitholders have Investment Units not less than one-third of the total number of Investment Units sold to form a quorum.

(2) request to increase registered capital in order to amend the Fund scheme to be consistent to the increase of the registered capital according to (1) with the votes of more than one half of total number of Investment Units.

3. In requesting to increase the registered capital as mentioned in 2 above, the Management Company shall also provide the information specified by the SEC in a notice of meeting or circulated notice letter in writing (as the case may be).

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4. According to 2 (1), the Management Company shall not count the votes of the following unitholders:

(1) Owners, lessors, assignors of lease or grantors of right over the property invested by the Fund in the case of increase of registered capital for purchase, lease or acquisition of additional properties.

(2) Building owner leased by the Fund or the grantor of right regarding properties to the Fund in the case of increase of registered capital for renovation of the properties to be in good condition to be suitable to gain economic benefits.

(3) Unitholders who are entitled to be allotted Investment Units in the case of allotment of Investment Units to Specific Investors.

(4) Unitholders who have conflicts of interests with the Fund in matters proposed for resolution.

(5) Any Related Person of the person as mentioned in (1)(2)(3) or (4) as the case maybe.

In case of increase of registered capital by specific offering of Investment Units to some of the existing investors, if there is an objection from more than 10% of the total number of Investment unitholders, the Management Company may not increase the registered capital.

5. Upon obtaining the approval of unitholders under 2, the Management Company shall:

(1) request permission from the SEC by providing the information under 3 together with a draft prospectus for offering of additional Investment Units to the SEC;

(2) upon obtaining the approval of the SEC under 5(1), the Management Company shall:

(a) deliver, distribute or make available the prospectus as prescribed by the SEC;

(b) register the increase of registered capital of the Fund in accordance with the SEC notification.

In case where the Management Company does not offer the Investment Units for sale within one year of the date of approval from the SEC, the approval for increase in capital registration will cease to be in effect.

6. In case of increase of registered capital in order to make additional investment, the Management Company shall refund a subscription amount at the end of the period for the initial offering, the total value of Investment Units sold is insufficient to acquire the property or leasehold of a property as specified under the Fund scheme. The Management Company shall inform the SEC within fifteen days from the end of the Initial offering and shall refund subscription amount and any interests arising from proceeds obtained in proportion to the subscription amount to subscribers within fourteen days from the end of the initial offering. Where the Management Company fails to refund the subscription and interests within the specified time due to its own fault, it shall pay out the interest to the subscribers at the rate of not less than 7.5% per annum from the due date until the date on which it pays the subscription amount in full.

7. In case of increase of registered capital in order to make additional investment, the Management Company shall refund a subscription amount in case that the Management Company is not able to invest in the aforementioned properties within six months from the increase of registered capital, the Management Company shall decrease the registered capital in accordance with the regulations of the SEC.

8. The value of each capital increase of the Fund and/or the number of Investment Units to be newly issued and offered each time must not be greater than the value of the capital increase of the Fund and the number of Investment Units to be newly issued and offered, per the resolution passed by unitholders’ meeting. The Management Company shall fix the price of the Investment Units to be issued and offered each time as the offering price which reflects a value of the Additional Property, based on various factors such as the trading price of the Investment Units on the SET during the time of the additional issuance and offering for sale of

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Investment Units, the value of the Additional Property appraised by the appraisal firm approved by the SEC, the overall market conditions, and the volume of investor interest, among other factors.


• As prescribed by the SEC, if there is a lack of liquidity, the Fund is prohibited to increase its registered capital. The Management Company reserves the right to purchase/distribute/dispose/transfer properties of the Fund wholly or partially as deems appropriate.

• For the conditions of increase registered capital, unless the SEC and/or other government agencies authorised by laws amend, announce, prescribe, order, approve and/or waive otherwise, the Management Company shall comply likewise.

Procedures for Capital Decrease

1. In the event of excess liquidity of the Fund due to one or several of the following cases, and the Management Company may wish to exercise judgment to pay out the excess liquidity to the unitholders, this may be done by reducing the registered capital of a Fund:

(1) the Fund acquires investment through a sale of the Properties (excluding gain from such sale);

(2) the depreciation of the Properties from the appraisal value or renew of the appraisal value of the Properties;

(3) the Fund has the deferred expenses which are amortised over a period to the profit and loss account.

2. In decreasing registered capital of the Fund, the Management Company shall decrease a par value of Investment Units and shall:

(1) close the register to suspend the transfer of Investment Units and calculate the NAV on the closing day;

(2) average the decreased capital of the Fund and distribute pro rata to unitholders whose names are listed on the register as of the day on which the register is closed in order to refund the investment fund in proportion to the unitholding of each unitholder, provided that the refund from the capital decrease shall not be deducted from the retained earnings of the Fund;

(3) submit an application to register the decrease of capital of the Fund with the SEC according to the electronic template provided by the SEC within five business days from the date of the distribution of money from the Fund to the unitholders; and

(4) post on the Management Company's website and specify in an annual report of the Fund the information relating to the decrease of registered capital as prescribed by the SEC for the verification by the unitholders.


For the conditions of the decrease of registered capital, unless the SEC, SEC Committee and/or other government agencies authorised by laws amend, announce, prescribe, order, approve and/or waive otherwise, the Management Company shall comply likewise.

Transfer Restrictions

Subject to the Rules and Limitation on Holding of Investment Units and the rules of the SET, there is no restriction on the transfer of Investment Units.

Rules and Limitation on Holding of Investment Units

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The rules and limitation on holding of Investment Units will be as prescribed by the SEC. In case the SEC and/or other agency with authority under the law has amended, modified, added, announced, orders, approved and/or indulged otherwise, the Management Company reserves its right to follow accordingly.

1. A person or Related Person cannot hold more than one-third of total Investment Units sold unless:

(1) It is a distribution of Investment Units, not more than 50% of total Investment Units sold, to one of the following persons:

(a) The Government Pension Fund, The Social Security Fund, The Thai Provident Fund, or mutual funds for general investors;

(b) Legal entities established under Thai law which are not subject to corporate income tax, e.g. Government Saving Bank, SET, charitable institution and temple;

(c) Other persons under necessary and appropriate circumstances as indulged by the SEC.

(2) It is a distribution of Investment Units to an underwriter or its Related Person who holds Investment Units in accordance with its commitment under an underwriting agreement. The underwriter will hold the Investment Units that are in excess of one-third of Investment Units sold for not more than 1 year after the date of the deposit.

2. An owner, lessor, assignor of lease and grantor of right over the property to be acquired by the fund or its Related Person will not collectively hold Investment Units of the Fund in excess of one-third of the amount of Investment Units sold.

3. In determining the meaning of the Related Person under items 1 and 2, it will be in accordance with the Notification of the SEC No. Sor. Nor. 25/2552.

4. Under items 5 and 6, in case it appears to the Management Company that a person or its Related Person holds Investment Units in the Fund in excess of one-third of the total Investment Units sold, the Management Company will act as follows:

(1) reporting to the SEC within 5 days of the date that the Management Company is or should be aware of the incident;

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(2) in requesting any resolution from the unitholders, the Management Company will not take into account the votes of the person or its Related Person on the part which exceeds one-third of the total Investment Units sold;

(3) ceasing to make dividend payment to the person or its Related Person on the part of the Investment Units which are in excess of one-third of the total Investment Units sold;

(4) giving notice to the person or its Related Person to sell the Investment Units which are in excess of one-third of the total Investment Units sold.

In case a person appears to knowingly hold Investment Units together with another person, or in case the Management Company appears to undertake any course of action, which conceals the actual character of the holding of Investment Units by a person or its Related Person who intends to hold more than one-third of the total Investment Units sold in the Fund, the SEC may withdraw the license to establish and manage the Fund.

5. In case a person or its Related Person who holds more than one-third of the Investment Units sold is a person under item 1 (1), the Management Company will act as follows:

(1) reporting to the SEC within 5 business days of the date that the Management Company is or should be aware of the incident;

(2) in requesting any resolution from the unitholders, the Management Company will not take into account the votes of the person or its Related Person on the part which exceeds 50% of the total Investment Units sold;

(3) ceasing to make dividend payment to the person or its Related Person on the part of the Investment Units which are in excess of 50% of the total Investment Units sold;

(4) giving notice to the person or its Related Person to sell the Investment Units which are in excess of 50% of the total Investment Units sold.

6. In case a person or its Related Person who holds more than one-third of the total Investment Units sold is an underwriter under item 1(2), the Management Company will act, during the period in which such person holds the Investments Units in accordance with its commitment under an underwriting agreement, but not exceeding one year after the date of the deposit, as follows:

(1) reporting to the SEC within 5 business days of the date that the Management Company is or should be aware of the incident;

(2) in requesting any resolution from the unitholders, the Management Company will take in to account the votes of such person only in the parts which do not exceed 50% of the total Investment Units sold;

(3) paying dividend according to the ratio of the Investment Units held by such person.

If it appears to the Management Company that after an expiry of such period of not more than one year, the underwriter or its Related Persons hold in excess of one-third of the total number of Investment Units sold, the Management Company will apply the proceedings used in case of discovery of violation of unitholding restrictions by any persons specified above, mutatis mutandis.

7. The Management Company will not distribute Investment Units to foreign investors in excess of 49% of total Investment Units sold if it is an offer to sell Investment Units in the Fund which invests in immovable properties in the following manners:

(1) there is an investment to obtain title to the land in accordance with the Land Code Act; or

(2) there is an investment to obtain ownership in a condominium when the total area of apartments that are to be invested in by the Fund and apartments already owned by the foreign investor is in excess of 49% of the total area of all apartments in the condominium.

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Therefore, for the subsequent transfer of Investment Units by the unitholders, the foreign investors may not, in aggregate, hold the Investment Units in excess of 49% of the total number of Investment Units sold.

8. If it appears to the Management Company that an ex-owner, an assignor of lease, a lessor, or a grantor of right over a property, and person of the same group, collectively hold more than one-third of the total Investment Units sold, the Management Company will act accordingly to Item 4, mutatis mutandis.

9. The Management Company will appoint the Registrar to perform the duties as prescribed in the Fund Scheme and in accordance with Sor Nor. 25/2552 in order to control the foreign holding of the Investment Units to be limited at any time to 49% of the total number of Investment Units sold. The Registrar will send a letter to all securities companies to inform them of the rules of the SEC regarding the foreign holding of the Investment Units and ask them to notify the Management Company and the Registrar in writing for information on the next business day each time that a purchase or sale of the Investment Units by a foreign investor is transacted on the SET. This is to keep the Management Company and the Registrar informed of a change in the foreign holding of the Investment Units on a daily basis. Furthermore, a transfer of the Investment Units by a Thai national to a foreign investor, or vice versa, or between foreign investors must be effected at the office of the Registrar, so that the foreign holding of the Investment Units will be acknowledged. The Registrar will not accept any transfer which may cause the foreign holding of the Investment Units to exceed the specified ratio. In that event, the granting of the right to the foreign investors to hold the Investment Units will be on a first come, first served basis.

10. For the dividend that cannot be paid out to the unitholders as per Items 4 (3), 5 (3), and 7 above, the Management Company will repatriate it to the government as government revenue, and will assume that all the unitholders have acknowledged and agreed to this arrangement. In the case that this is not done, the Management Company will separate the said dividend from other assets of the Fund and will not take that into the calculation of the net asset value of the Fund.

Issuance of Documents of Right in Investment Units and Delivery Period

1. Documents of Right in Investment Units Form: Scripless system. The unitholders may request the Registrar and/or the Management Company to issue Documents of Right in Investment Units.

2. Conditions of issuance and period of delivery of Documents of Right in Investment Units

(1) The Scripless system will be utilised. The Registrar shall record the name of each subscriber who has been allotted Investment Units as a unitholders as the details in "the application to open an account and/or unitholders account" and "subscription form" when subscribers pay subscription fee.

(2) The Registrar shall deposit the Investment Unit in the securities account of the subscriber or of the person whom the Management Company has appointed for the subscribers which has been opened with a member company of Thailand Securities Depository Co., Ltd. as notified by the subscriber in the subscription form.

(3) In case of the deposit of Investment Units in the securities account of a subscriber who has subscribed such Investment Units through a broker, or the deposit of Investment Units in the securities account of the subscribers, broker or such appointed person shall issue evidence of the right in the Investment Units to the unitholder according to its respective system.

(4) The Registrar and/or the Management Company will issue the Investment Unit certificates to unitholders only upon their request. The unitholders requesting the Investment Unit certificates shall proceed as follows:

(a) To fill up an application for issuance of the Investment Unit certificate which can be obtained at the Registrar.

(b) To submit the application for issuance of the Investment Unit certificate, together with a fee thereof to the Registrar as specified in "Key Fees and Expenses Collectible from the Subscribers or unitholders and the Fund".

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(c) The Registrar with due authorisation by the Management Company shall issue an Investment Unit certificate to the unitholder according to the number of Investment Units as specified in the application. In case that the number of Investment Unit which the unitholders specifies in the application is more than the number of Investment Units recorded by the Registrar, it will be deemed by the Registrar and/or the Management Company that the Unit holder wishes to have an Investment Unit certificate issued according to the number of Investment Units appearing in the record of the Registrar.

(d) An Investment Unit certificate issued to the Unite holder shall have the particulars as prescribed by the SEC. In order to be deemed correct and valid according to the law, each Investment Unit certificate shall bear the signatures of the authorised directors of the Management Company and its common seal, or the signatures of the authorised directors of the Registrar and/or the signatures which are stamped by machine or otherwise affixed as permitted by the securities law.

Calculation and announcement of net asset value of the Investment Units

The Management Company shall calculate and announce the asset value, NAV, and Value of Investment Units of the Fund as of the last day of June and December within 45 days from the last day of June and December, as the case may be. The Trustee must verify that such value has been calculated in accordance with the criteria prescribed by the SEC.

In making an announcement of the values obtained from the above calculation, the Management Company shall make such announcement in at least one daily newspaper and post it at an open place at all offices of the Management Company and the head office of the Trustee, including the disclosure of the name, type, and location of the Properties the Fund obtained from investment, or any other details as prescribed by the SEC.

In calculating and announcing the asset value, NAV and Value of Investment Units of the Fund as mentioned above, the Management Company will proceed as follows:

• calculating and announcing the NAV to a figure having two decimal places pursuant to the generally accepted decimal rounding method;

• calculating the Value of Investment Units to a figure having five decimal places pursuant to the generally accepted decimal rounding method, and announcing the Value of Investment Units to a figure having four decimal places by removing the fifth decimal place.

In the case that any benefit appears from the calculation in the above paragraph, the Management Company shall vest such benefit as assets of the Fund.

If any circumstance or change materially affecting the value of the Properties arises after the date of calculation, the Management Company shall also disclose such circumstance or change in the announcement, along with the disclosure of information under the preceding paragraph. If such circumstance or change arises after the date of announcement, the Management Company shall immediately make an additional announcement thereof.

In the calculation of the NAV, the Management Company shall calculate by using the following methods:

(1) For the Properties, the Management Company shall use the price obtained from the latest Appraisal Report or Review of the Appraisal, as the case may be (the Fund will not recognise depreciation and amortisation of such investment in the balance sheet and income statement of the Fund, which is in accordance with TFRS with respect to accounting for investment by entities engaging in investment businesses which require properties held by property funds to be carried at fair value), except for the first calculation of the NAV, for which the Management Company shall use the price of purchase or lease of such Properties.

(2) For other assets, the Management Company shall fix the value in accordance with the rules and procedures prescribed by the Association of Investment Management Companies with approval of the SEC.

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Additional conditions:

For the calculation method, schedule of calculation and announcement of the asset value, NAV and value of Investment Units of the Fund, the Management Company shall proceed in accordance with this paragraph, unless it is otherwise amended, supplemented, announced, prescribed, instructed, approved and/or relaxed by the SEC and/or any other competent authority under law.

Rules and procedure in case of incorrect unit price

The Management Company shall immediately reveal circumstance of changes.

Rights of unit holders

1. Right to Receive Dividends

2. Right to Pass a Resolution to Amend the Fund scheme or the Management Procedures

3. Right to Receive a Refund upon Dissolution of the Project

4. Right to Transfer Investment Units

5. Other Rights and Benefits

(1) Right to Pledge Investment Units

(2) Right to Pass a Resolution concerning the Management of the Fund

(3) Right to Receive a Refund upon Capital Decrease

Major risk factors

Risks Relating to the Fund's Organisation and Operations

The Fund will be a newly established entity and will not have an established operating history for investors to rely on in making an investment decision.

The Fund will be a newly established entity. Accordingly, the Fund will not have an operating history by which its past performance may be judged and investors may find it difficult to evaluate its performance and prospects. While the Initial Properties have been in operation for an average of seven years, there can be no assurance that the management of the Fund wil be sucessful as the property fund or as an entity having the Investment Units listed in the SET.

The Management Company may not be able to successfully implement the Fund's strategies.

The Management Company's ability to successfully implement the Fund's strategies will depend on, among other factors, its ability to identify suitable investment opportunities that meet the Fund's investment criteria and for the Fund to obtain financing on favourable terms. There can be no assurance that the Management Company will be able to successfully implement the Fund's strategies or that it will be able to do so in a timely and cost-effective manner. Moreover, decisions made by the Management Company may cause the Fund to incur losses or to be unable to successfully implement business opportunities.

The Management Company will undertake the day-to-day management or control of the business of the Fund which will be monitored by the Trustee. The unitholders may not have the opportunity to evaluate the Management Company's decisions regarding specific strategies used or the investments made by the Fund or the terms of any such investment. The failure of the Management Company to successfully implement the Fund's strategies could have a material adverse effect on the Fund's performance, financial condition, results of operations and ability to make dividend payments, and the price of the Investment Units could decrease.

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The Fund’s success depends on the ability of the Management Company to manage the Fund and the Property Manager to operate and manage the Properties and their failure to operate and manage the Fund and/or such Properties in an effective and efficient manner could have a material adverse effect on the value of such Properties and the Fund’s results of operations and ability to pay dividends.

The Fund will be managed by the Management Company. In turn, the Management Company will depend on the Property Manager in respect of management of the Properties. The Management Company will enter into the Property Management Agreement with the Property Manager to perform all day-to-day property management functions for the Management Company. Under the Property Management Agreement, the Property Manager will be responsible, with the oversight of the Management Company for, among other things, the following areas with respect to the Properties: lease management, property marketing, physical maintenance, security, building safety and financial management matters. The failure of the Property Manager to manage the Properties properly may adversely affect the underlying value of the Properties and/or their respective rental income, and, together with any failure by the Management Company to manage the Fund in an effective and efficient manner could in turn affect the Fund’s results of operations and ability to pay dividends to unitholders and pay amounts due on any indebtedness incurred. In addition, any adverse changes in the Management Company’s relationship with the Property Manager could hinder their respective abilities to manage the Fund’s operations and its Properties. In addition, if Ek-Chai Distribution System Co., Ltd. is unable to perform its duties as the Property Manager pursuant to the Property Management Agreement, the Fund may be unable to appoint another entity to manage the Properties as effectively as Ek-Chai Distribution System Co., Ltd. or at all, which could have an adverse effect on the Fund's performance, financial condition, results of operations and ability to make dividend payments.

The Fund's revenue is dependent on the economic viability of its tenants.

The Fund's financial condition will depend on continuously leasing the Properties to tenants on economically favourable terms. The Fund's Initial Properties will consist entirely of properties in the retail sector. Because the Fund's income will consist primarily of rental and service income from the Properties generated from businesses in the retail sector, it will be subject to the general risks associated with investments in this sector, including the risk of a downturn in rental rates and occupancy from retail businesses. The weakening of the financial condition of one or more significant tenants or a large number of small tenants at any one time could have a material adverse effect on the Fund's financial condition, results of operations and ability to make dividend payments.

In addition, a termination or non-renewal by one or more permanent tenants who are anchor tenants, including Tesco Lotus, Major Cineplex Group Public Company Limited, MK Restaurant Co., Ltd., Yum Restaurants International (Thailand) Co., Ltd., Bangkok Bank Public Company Limited ("Bangkok Bank") or KASIKORNBANK Public Company Limited, could negatively impact the attractiveness of the Properties to other tenants and customers.

The Fund will be dependent on the Sponsor for use of the "Tesco", "Lotus" and "Tesco Lotus" brand name and for future acquisitions pursuant to a right of first refusal.

The Fund intends to leverage on and benefit from the Sponsor's experience and established track record in property management and development and use the "Tesco", "Lotus" and "Tesco Lotus" brand name in attracting reputable tenants, maintaining tenant relationships and attracting customer traffic as well as maintaining and operating the Properties and exploring investment opportunities. The Fund may also choose to acquire Additional Properties directly from the Sponsor in the future pursuant to the right of first refusal granted by the Sponsor to the Fund ("Right of First Refusal"). Thus, the Fund is dependent on the continued right to use the "Tesco", "Lotus" and "Tesco Lotus" brand name for name recognition in the retail market as well as its relationship with the Sponsor. If the Fund is unable to use the "Tesco", "Lotus" and "Tesco Lotus" brand name or if the Sponsor is unable to provide the support required by the Fund when needed in the future, the Fund's operations and future growth may be materially and adversely affected.

The Fund may in the future require external financing which may not be available on acceptable terms or at all.

The Fund may need to expend capital periodically for refurbishment and/or renovation for improvements in order to remain competitive or for the Properties to be income-producing. In addition, the Fund may require a significant amount of capital in order to fund the acquisition of Additional Properties. In order to comply with the Fund scheme and the securities law, if the Fund has a net profit in a given year, it shall pay not less than 90% (or any other percentage as may be permitted by the securities law from time to time) of the net profit for the year as dividends to unitholders. If the Fund has accumulated profits, it may pay dividends to unitholders out of such accumulated profits. Such net profit and accumulated profits shall not include profits arising from the Appraisal, or the Review of the Appraisal, of the

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Properties of the Fund in that given year. However, the payment of dividends from the aforementioned net profit in a given year can be made only when such payment does not increase the amount of accumulated losses of the Fund. See "Dividend Policy" for further information. As a result of this dividend requirement and in light of the Fund’s stated policy of making dividend payments amounting to no less than 90% of its net profit, the Fund may not be able to fund future capital needs, including any necessary acquisition financing, from operating cash flow.

Additional debt or equity funding may not be available as and when required or on terms acceptable to the Fund. The amount of debt the Fund may incur is limited to 10% of its NAV pursuant to the Fund scheme and the securities law. If debt is incurred, the Fund will have a debt service obligation. This obligation may increase in the future due to rising interest rates. Any failure by the Fund to service its indebtedness, maintain any required security interests or otherwise perform its obligations under financing agreements could lead to a termination of one or more of its credit facilities, trigger cross default provisions, penalties or acceleration of amounts due under such facilities, any or all of which may adversely affect the Fund's performance, financial condition, results of operations and ability to make dividend payments to the unitholders.

Operating risks inherent in the retail property industry and increases in operating costs, capital expenditures and other expenses of the Properties would have an adverse effect on the Fund's financial condition and results of operations.

The Fund's ability to make dividend payments to the unitholders could be affected if its operating and other expenses increase without a corresponding increase in revenue or tenant reimbursements of operating and other costs. In addition to other factors mentioned herein, factors which could increase operating and other costs of the Properties include, but are not limited to, the following:

• changes in statutory laws, regulations or government policies which increase the cost of compliance with such laws, regulations or policies;

• withdrawal of exemptions from income tax in respect of income from the Properties;

• increase in property management fees payable to the Property Manager and management fees payable to the Management Company (which may not exceed 0.30% and 0.16% of the NAV per annum, respectively); and

• increase in demolition, repair and maintenance costs.

Additionally, capital expenditures and other expenses may be irregular since continuing repairs and maintenance involve significant and potentially unpredictable expenditures. Both the amount and timing of expenditures will have an impact on the cash flow of the Fund. If the Properties do not generate revenue sufficient to meet operating expenses, debt service and capital expenditures or the increase in operating and other costs cannot be reimbursed by the tenants of the Properties, the Fund's income and ability to make dividend payments will be materially and adversely affected.

Many of these factors may have an adverse effect on the value of the Properties and net rental and service income derived from the Properties. The valuation of the Properties will reflect such factors and, as a result, such valuation may decrease significantly.

Risks Relating to the Properties

The Fund and the tenants at a number of the Properties face competition from other shopping malls, hypermarkets and other retail outlets located within their catchment areas as well as other retail channels.

Shopping malls and hypermarkets compete aggressively to attract shoppers. Other types of retail centres also compete with the Fund's tenants for customers, affecting the cash flows of such tenants and thus affecting their ability to pay rent. The Fund may be materially and adversely affected if competing retail developments are substantially upgraded and refurbished or are more successful in attracting shoppers. In addition, the Fund's retail tenants face potentially changing consumer preferences and increasing competition from other forms of retailing, such as warehouse sales, internet shopping and telemarketing. In addition, some of the tenants' rent payments are based on the amount of sales revenue that they generate. If these tenants experience competition which leads to decreased sales revenue, the amount of their rent may decrease and the Fund's cash flow will decrease.

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Furthermore, the income from, and market price of, the Properties will be dependent on the ability of the Properties to compete against other properties for tenants.

The Properties are subject to the risk of non-renewal of expiring tenancies.

A number of the Properties may experience periods during which a significant number of tenancies may expire. A frequency of renewals and the manner of rent calculation make the Fund susceptible to rental market fluctuation which, in a declining market, may lead to higher vacancies and lower rental rates and lower rental income, which will in turn reduce the revenue of the Fund. The tenants may not renew their tenancies at all or, because of market conditions, may only be able to renew their tenancies on terms that are less favourable to the Fund than the terms of the current tenancies. If the rental rates upon renewal or reletting are significantly lower than expected rates, then the Fund's results of operations and financial condition will be adversely affected. Furthermore, if a tenancy is terminated or not renewed, there can be no assurance from the Management Company that the Fund will be able to relet the vacant units for the rent previously received.

The full impact of the flooding in Thailand in 2011 is uncertain and it, and any future widespread flooding, could adversely affect operations of the Properties and the Fund’s financial condition and results of operations.

Beginning in September 2011, widespread flooding affected much of Thailand, including areas where several of the Properties are located. The flooding caused widespread damage in Thailand, primarily in the northern and central regions of the country, including to a significant amount of the transportation infrastructure relied upon for supplying goods to tenants at the affected Properties. In addition, although Rangsit Klong 7 and Lamlukka Klong 6, two of the Initial Properties, remained fully open during the flooded period, they sustained damage to their respective car park areas and exterior paint as a result of the floods. The Management Company estimates that repair costs will amount to approximately Baht 5 million for each of these two properties, which are expected to be fully covered by insurance payable to the Sponsor. Repairs to these areas were completed. While damage from the 2011 floods to the Initial Properties has been minimal, there is no assurance that any future widespread flooding after the acquisition of the Initial Properties by the Fund will not result in a material adverse impact on the Fund's financial condition and results of operations.

Certain tenants of the affected Initial Properties may delay in paying rent as a result of the floods. In addition, several of the temporary users of such Initial Properties did not renew their tenancies in the aftermath of the floods. Any future inability on the part of tenants to pay their rent in a timely manner as a result of the 2011 floods or any future catastrophic event could have a material adverse effect on the Fund’s financial condition and results of operations.

In addition, several of the catchment areas surrounding the Properties, most notably Rangsit Klong 7, Lamlukka Klong 6, Pitsanulok, Singburi, Sena and Prachacheun were also inundated with floodwaters to varying degrees, and although the waters have now receded from these areas, repairs to homes, businesses and infrastructure are ongoing. Residents in the impacted catchment areas, many of whom are believed to be customers of the affected Properties, are expected to experience a decline in their spending ability as a result of the cost of repairs to homes and businesses and lost jobs during this period. Until the catchment areas surrounding the Properties are fully repaired and commerce returns to levels seen prior to the flooding, the Fund's results of operations may be adversely affected.

Damage to, or other potential losses involving the Properties, may not be covered by insurance.

The Fund intends to maintain comprehensive property and liability insurance policies with respect to the Properties with coverage features and insured limits that the Management Company believes are consistent with market practice in the real estate industry in Thailand and in accordance with the securities law. Market forces beyond the Fund's control may nonetheless limit the scope of insurance coverage that it can obtain or its ability to obtain such coverage at reasonable rates. Design, construction or other latent property or equipment defects or deficiencies in the Properties may require additional capital expenditure, special repair or maintenance expenses or the payment of damages or other obligations to third parties and may not be covered by insurance. In addition, the Fund is exposed to the risk of litigation or claims by shoppers, contractors or other visitors to the Properties, which may arise for a variety of reasons, including accidents or injuries that may be suffered while at the Properties, tenants' inability to enjoy the use of the Properties in accordance with the terms of their lease and the Fund's failure to perform any of its obligations under any lease, construction or other contract or agreement entered into with contractors, tenants or other third parties. Certain types of losses, generally of a catastrophic nature, such as natural disasters, terrorist acts, the outbreak of infectious diseases or any losses as a result therefrom, may be uninsurable or the required insurance premiums may be too expensive to justify obtaining insurance. As a result, the Fund may not be successful in obtaining insurance without increases in costs or

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decreases in coverage levels. In addition, in the event of a substantial loss, the insurance coverage the Fund carries may not be sufficient to pay the losses claimed or the full market value or replacement cost of its lost investment or that of its tenants. Moreover, certain losses may be totally uninsured. the Fund could lose some or all of the capital it has invested in a Property, as well as the anticipated future revenue from the Property, and it could remain obligated for guarantees, debt, or other financial obligations related to the Property.

Moreover, the Fund's insurance policies and terms of coverage will be subject to renewals and negotiations on a periodic basis in the future and there is no assurance as to the nature and extent of coverage that will be available on commercially reasonable terms in the future. Any material increase in insurance rates or decrease in available coverage in the future will adversely affect the Fund's performance, financial condition and ability to make dividend payments to unitholders.

The Fund’s insurance premiums for coverage of the Properties are likely to increase as a result of the flooding in Thailand.

The Management Company expects that, as a result of the flooding that occurred in Thailand from September to November 2011, insurance premiums for coverage of the Properties will increase. The Management Company cannot be certain as to when or by how much the insurance premiums will increase, and whether premiums will increase on all or only certain of the Initial Properties or on any properties in which the Fund plans to invest in the future. In addition, the Management Company cannot be certain that it will be able to pass on any part of these increased costs to tenants of the Properties. Any increase in the costs associated with insuring the Properties could have a material adverse effect on the Fund's financial condition, results of operations and its ability to make dividend payments to unitholders.

There can be no assurance that material defects, breaches of laws and regulations or other deficiencies relating to the Properties do not exist.

The Management Company is not aware of any material defects or deficiencies relating to the Properties requiring repair or maintenance (including design, construction or other latent property or equipment defects in the Properties which may require additional capital expenditure, special repair or maintenance expenses) other than those disclosed inthe Fund scheme. There can be no assurance, however, that breaches of laws and regulations or other deficiencies relating to the Properties do not exist. Such latent defects or deficiencies may require significant capital expenditures or obligations to third parties and involve significant and unpredictable patterns and levels of expenditure which may have a material adverse effect on the Fund's earnings and cash flows.

The experts' reports that the Management Company relies upon to assess the Properties, including the technical consultants' report and the appraisal reports, are limited in scope and may be subject to inaccuracies and deficiencies. This may be because certain building defects and deficiencies are difficult or impossible to ascertain due to limitations inherent in the scope of the inspections, the technologies or techniques used and other factors. Such building defects and deficiencies (if any) may require capital expenditures or impose obligations upon third parties or the Fund.

The representations, warranties and indemnities granted in favour of the Fund by the Sponsors are subject to limitations as to their scope and as to the amount and timing of claims which can be made. There is no assurance that the Fund would be entitled to be reimbursed under such representations, warranties and indemnities for any losses or liabilities suffered or incurred by it as a result of its acquisition of the Properties.

Construction associated with existing or planned transportation infrastructure and renovation projects near the Properties may disrupt access to the Properties or may not be completed.

The proximity of transportation infrastructure, such as BTS and MRT public transit stations, bus interchanges, expressways and access roads, to some of the Properties provides convenient access to those Properties. There is no assurance that such amenities and transportation infrastructure will not be closed, relocated or terminated or that any planned transportation infrastructure and renovation projects will not be delayed or will be completed, or that there will be no impediment to the traffic flow in the vicinity. Such closure, relocation, termination, delay, non-completion or impediment may adversely affect the accessibility of the Properties or result in the failure to realise improved accessibility. This may have an adverse effect on the customer foot traffic, the attractiveness and the marketability of the Properties to tenants and may adversely affect the financial condition and results of operations of the Fund, reducing the ability of the Fund to make dividend payments to unitholders.

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Furthermore, there can be no assurance that buildings neighbouring the Properties will not be demolished, redeveloped or renovated for alternative uses or that there will not be construction of new buildings or property development of land near the Properties, thus causing disruption to the Properties of the Fund from time to time. Any such redevelopment, renovation, construction or development (which may involve a temporary closure) could reduce the number of occupiers or tenants or visitors’ traffic in the vicinity of the Fund’s affected Properties and reduce the total rental income for affected Properties of the Fund. In any of these cases, such a redevelopment, renovation, construction or development could have a material adverse effect on the Fund’s financial condition and results of operations.

Risks relating to natural disasters and other acts of God, terrorist activity and war could adversely affect the Fund's revenues.

The Fund will be subject to risks such as natural disasters or other acts of God in locations where the Fund owns the Properties as well as areas from which it draws a large number of customers, which could cause a decline in the level of business and leisure travel and reduce demand for the Properties. For example, the flooding experienced in Thailand from September to November 2011 had an adverse impact on several of the Initial Properties and their catchment areas, including damage to buildings, supply disruptions and rental delinquencies. Actual or threatened war, terrorist activity, political unrest, civil strife and other geopolitical uncertainty may have a similar effect. Any one or more of these events may reduce the overall demand for, or the Fund's revenue from, the Properties, which could have a material adverse effect on its results of operations, financial condition and ability to make dividend payments.

Failure by a landlord to satisfy its obligation to register the transfer of lease agreement for a Leasehold Property or Mixed Properties (as the case may be), an objection to the registration of transfer of a building for the Initial Properties, or a delay of such registration, could result in the Fund being required to decrease the registered capital of, or dissolve, the Fund and distribute the funds to the unitholders.

There are a number of the Leasehold Properties and the Mixed Properties which are held under lease agreements between various landlords and the Sponsor. While the Sponsor has received consent under binding commitments from each of the landlords of the Leasehold Properties and the Mixed Properties to register the transfer of the applicable lease agreements to, and/or the applicable new lease agreements with, the Fund after the registration of the establishment of the Fund with the SEC, there can be no assurance that the landlords will satisfy their obligation to register the transfer of the lease agreements and/or the applicable new lease agreements. In addition, the rules issued by the Land Department of Thailand require that the proposed transfer of buildings be announced. The failure of one or more landlords of the relevant Leasehold Properties and the Mixed Properties to satisfy their obligations under such commitments to register the transfer of the lease agreements or objections to the transfer of buildings located on the Initial Properties levied by interested parties would result in the transfer of such lease agreements and/or buildings not being registerable in favour of the Fund.

The securities law requires the Management Company to acquire the Initial Properties with an aggregate value of not less than 75% of the NAV within six months from the date of the registration of the Fund with the SEC. If the Management Company fails to do so, the Management Company may consider decreasing the Fund's registered capital and/or dissolving and liquidating the Fund and returning funds to the unitholders. Such an event would have an adverse effect on the Fund's results of operations, financial condition and ability to make dividend payments.

Certain tenants at the Properties may not consent or may revoke their consent to a novation of their lease and service agreements in favour of the Fund.

The Sponsor is currently in the process of negotiating with the existing tenants to secure consents to the novations. The Sponsor will provide undertakings under the SPAs that after the completion of sale and purchase of the Initial Properties under the SPAs, it will continue to facilitate the process so that the remaining consents to the novations are received and will deliver the payments it has received from the existing tenants to the Fund. There can be no assurance, however, that the consent given by certain tenants will not be revoked or the remaining tenants will consent to a novation in favour of the Fund as the new lessor. If the consent is revoked or the novations are not received, such tenants will remain the counterparty of the Sponsor and the Fund's results of operations, financial condition and ability to make dividend payments may be adversely affected.

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The Properties may require major refurbishment and renovation, which could require certain areas of the shopping malls to be temporarily closed and have an adverse effect on its financial condition and results of operations.

The Properties may require major refurbishment and renovation to maintain modernity, reflect customers’ lifestyles and to attract customers to use the Properties regularly. Regular refurbishment or maintenance is not expected to affect the operating results of the Fund. However, major refurbishments or renovations, which may not have been anticipated, may be required to change the internal and external appearance of the Properties and change major systems. Such major refurbishments or renovations may require certain areas of the shopping malls to be temporarily closed. Such closures may result in a loss of rental payments from the tenants in the affected areas or cause such tenants to terminate or not renew their leases. Therefore, if such major refurbishments or renovations to the Properties are required, they could have an adverse effect on the Fund's financial condition and results of operations.

The values of the Properties, as determined by the Appraisal Firms, are not an indication of, and do not guarantee, a sale price at that value presently or in the future.

Property valuations generally include a subjective determination of certain factors relating to the relevant Properties, such as their relative market positions, their financial and competitive strengths and their physical conditions which are subject to change in the future upon the occurrence or non-occurrence of events which are inconsistent with one or more of the assumptions made in arriving at the property valuations. There can be no assurance from the Management Company that the assumptions relied on will turn out to be accurate. The price at which the Fund sells a Property may be lower than its value as determined by the Appraisal Firms or its purchase price at the time of acquisition by the Fund.

The reduction in fair value of the Properties will have a negative impact on the Fund's profit and loss account, NAV and its ability to make dividend payments.

Thai Financial Reporting Standards require that Freehold Properties, Leasehold Properties and Mixed Properties held by an entity engaged in investment businesses be carried at fair value. Changes in fair value will be recorded in the Fund's profit and loss account. Accordingly, lower fair values relating to the Properties will have a negative impact on the Fund's profit and loss account, NAV and its ability to make dividend payments.

The Fund may encounter conflicts with the Sponsor relating to the acquisition of properties and leasing.

The Sponsor, its subsidiaries and associates are engaged in the investment in, and the development, management and leasing of, retail properties in Thailand and elsewhere. As a result, there may be circumstances where conflicts arise between the Fund and the Sponsor (or its subsidiaries or associates) in relation to the acquisition of properties or leasing. Furthermore, although the Sponsor has agreed in the Mutual Undertaking Agreement not to compete with the Fund in connection with future shopping mall construction, the Sponsor may in the future invest in other property funds or other real estate investments which may result in conflicts between the Fund and the Sponsor. There can be no assurance that the interests of the Fund will not conflict with or be subordinated to those of the Sponsor in such circumstances.

The Fund's rights in relation to certain Leasehold Properties with multiple lease agreements and certain Mixed Properties with single or multiple lease agreements are uncertain.

There are a number of Leasehold Properties which are held under multiple lease agreements or Mixed Properties held under one or more lease agreements with different landlords. If the Fund's ability to use the Leasehold Properties or the Mixed Properties as contemplated under the lease agreements is denied due to the expiration or termination of one or more lease agreements relating to a Leasehold Property or a Mixed Property, its results of operations, financial condition and ability to make dividend payments may be adversely affected.

Risks Relating to Investing in Real Estate

There are general risks associated with investing in real estate.

Investments in real estate are subject to various risks, including but not limited to (i) adverse changes in political or economic conditions; (ii) adverse local market conditions; (iii) the financial condition of buyers and sellers of properties; (iv) changes in availability of debt or equity financing, which may result in an inability to finance property acquisitions on favourable terms or at all; (v) changes in interest rates and other operating expenses; (vi) changes in

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environmental laws and regulations, zoning laws and other governmental rules and fiscal policies; (vii) environmental claims arising in respect of real estate; (viii) changes in market rents; (ix) changes in energy prices; (x) changes in the relative popularity of property types and locations leading to an oversupply of space or a reduction in tenant demand for a particular type of property in a given market; (xi) competition among property owners for tenants which may lead to vacancies or an inability to rent space on favourable terms; (xii) acts of a tenant that may impact the business or reputation of the landlord; (xiii) inability to renew leases or relet space as existing leases expire; (xiv) inability to collect rents from tenants on a timely basis or at all due to bankruptcy or insolvency of tenants or otherwise; (xv) insufficiency of insurance coverage or increases in insurance premiums; (xvi) inability of the manager of a property to provide or procure the provision of adequate maintenance and other services; (xvii) defects affecting properties which need to be rectified, or other required repair and maintenance of properties, leading to unforeseen capital expenditure; (xviii) the relative illiquidity of real estate investments; (xix) considerable dependence on cash flow for the maintenance of, and improvements to, any portfolio property; (xx) increased operating costs, including taxes; (xxi) any interest or encumbrance that cannot be or has not been revealed by a land search conducted at any relevant public registry at the time of the search; (xxii) acts of God, uninsurable losses and other factors; and (xxiii) changes in tax and other laws and/or regulations.

Many of these factors may cause fluctuations in occupancy rates, rental rates or operating expenses, causing a negative effect on the value of real estate and income derived from real estate.

The annual valuation of the Properties of the Fund will reflect such factors and as a result may fluctuate upwards or downwards. The capital value of the Fund’s Properties may be significantly diminished in the event of a sudden downturn in real estate market prices or the economies in Bangkok and the other cities or provinces in Thailand where such portfolio of Properties of the Fund are or may, in the future, be located.

The Fund may be adversely affected by the illiquidity of real estate investments and the lack of alternative uses for its Properties.

The Fund will invest primarily in real estate and real estate-related assets. Real estate investments, particularly investments in high-value properties such as those in which the Fund intends to invest, are relatively illiquid. Such illiquidity may affect the Fund's ability to vary its investment portfolio or liquidate a portion of its assets in response to changes in economic, real estate market or other conditions. For instance, the Fund may be unable to sell its Properties on short notice or may be forced to give a substantial reduction in the price in order to ensure a quick sale. Moreover, the Fund may face difficulties in securing timely and commercially favourable financing in asset-based lending transactions secured by the Properties due to the illiquid nature of real estate assets. In addition, the Properties may not readily be converted to alternative uses if they were to become unprofitable due to competition, age, decreased demand or other factors. The conversion of a Property to alternative uses would also generally require substantial capital expenditures. These factors could have an adverse effect on the Fund's financial condition and results of operations, with a consequential adverse effect on the Fund's ability to make dividend payments to unitholders.

The Fund's strategy of investing in retail properties may entail a higher level of risk as compared to other types of mutual funds that have a more diverse range of investments.

The Fund's principal strategy of investing in retail properties will subject the Fund to risks inherent in concentrating in real estate. The level of risk could be higher as compared to other types of mutual funds that have a more diverse range of investments in other sectors.

A concentration of investments in retail properties exposes the Fund to the risk of a downturn in the retail market in Thailand. Such downturns may lead to a decline in occupancy for the Properties or real estate-related assets in the Fund's portfolio. This will affect the Fund's income from the Properties, and/or result in a decline in the NAV, which will have an adverse impact on dividends paid to the unitholders and/or on the results of operations and the financial condition of the Fund.

Real estate, including the Properties in which the Fund intends to invest, may be expropriated.

The Properties in which the Fund plans to invest may be exposed to expropriation risk under the Government's policy. Compensation to be received for the damage arising from such expropriation may be less than the NAV in accordance with the Fund's accounts. Therefore, any such expropriation could have an adverse effect on the Fund's financial condition and results of operations, with a consequential adverse effect on the Fund's ability to make dividend payments to unitholders.

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Risks Relating to an Investment in the Investment Units

There has been no prior market for the Investment Units.

The Management Company will apply to have the Investment Units approved for listing and trading on the SET after the registration of the pool of assets (the proceeds derived from the Combined Offering) to establish the Fund with the SEC. Registration to establish the Fund is expected to occur no later than five business days after the day the Trustee receives payment for the Investment Units from the Combined Offering. However, the Investment Units comprise a new issue of securities for which there is currently no public market. There can be no assurance from the Management Company as to the liquidity of any market that may develop for the Investment Units, the ability of holders to sell their Investment Units or the prices at which holders would be able to sell their Investment Units. The Investment Units could trade at prices that may be lower than the offering price depending on many factors, including prevailing economic and financial conditions in Thailand, the Fund's operating results and the market conditions for similar securities.

Furthermore, the market for property funds in Thailand is an emerging market, which could lead to a lack of liquidity for the Investment Units and a general lack of investor demand. In addition, the trading price of the Investment Units may not reflect the actual operating results of the Fund and it may not be possible to assess the Fund's performance against either domestic or international benchmarks. There can be no assurance from the Management Company that an active market for property funds will develop in Thailand.

The price of the Investment Units in the secondary market may fall below the Offering Price.

The Offering Price of the Investment Units is determined by agreement between the Management Company, the Sponsor, the Joint International Bookrunners and the Sole Domestic Bookrunner and may not be indicative of the market price for the Investment Units after the completion of the Combined Offering.

The price of the Investment Units after the Combined Offering may trade at prices significantly below the price at which new Investment Units may be issued pursuant to the Combined Offering.

The price of the Investment Units will depend on many factors, including:

• the perceived prospects of the Fund's performance and investments and the Thai real estate market;

• differences between the Fund's actual financial and operating results and those expected by investors and analysts;

• changes in analysts' recommendations or projections;

• changes in general economic or market conditions;

• the market value of the Fund's assets;

• the perceived attractiveness of the Investment Units against those of other equity securities, including those not in the real estate sector;

• the balance of buyers and sellers of the Investment Units;

• any sale or intended sale of a substantial amount of Investment Units by existing unitholders;

• the future size and liquidity of the Thai property fund market;

• any future changes to the regulatory system, including the tax system, both generally and specifically in relation to Thai property funds and investments in Thailand or overseas;

• any inability on the Fund's part to implement successfully its investment and growth strategies; and

• broad market fluctuations, including any weakness of the equity market and increases in interest rates.

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For these reasons, among others, the Investment Units may trade in the secondary market at prices that are higher or lower than the NAV per Investment Unit. To the extent that the Fund retains profits for additional investment purposes, working capital reserves or other purposes, these retained funds, while increasing the value of its underlying assets higher than the NAV in the event that the Fund does not retain profit, it may not correspondingly increase the market price of the Investment Units. Any failure on the Fund's part to meet market expectations with regard to future earnings and dividends may adversely affect the market price for the Investment Units.

In addition, the Investment Units are not capital-safe products and there is no guarantee that unitholders can regain the amount invested. If the Fund is dissolved or liquidated, it is possible that investors may lose all or a part of their investment in the Investment Units. In addition, investment in or trading of the Investment Units may be subject to tax if there is a change of taxation laws or other relevant laws.

There can be no assurance that the Fund will be able to make dividend payments on the Investment Units or maintain any given level of dividends.

The income earned from real estate investments depends on, among other factors, the amount of rental income received and the amount of operating and other expenses incurred. If the Properties and any other assets to be acquired or held by the Fund from time to time do not generate sufficient income and the Fund is unable to borrow funds from the market in a timely and cost-effective manner, the Fund's income, cash flow and ability to make dividends will be adversely affected.

No assurance can be given as to the Fund's ability to pay dividends or maintain dividend levels pursuant to its stated dividend policy. Nor is there any assurance that the level of dividends will increase over time, or that there will be increases in rent under the tenancies of the Properties, that vacated properties will be re-rented or that the receipt of rental revenue in connection with any expansion of the properties or future acquisitions of properties will increase the Fund's income available for dividend payments to unitholders.

Unitholders are unable to require the repurchase of their Investment Units.

As the Fund is a closed-end property fund, the unitholders are not able to require the Management Company to repurchase their Investment Units. Therefore, there can be no assurance that a unitholder will be able to dispose of its Investment Units at the price at which it purchased the Investment Units or any price, or at all. Accordingly, unitholders may only be able to liquidate or dispose of their Investment Units through a sale of such Investment Units to third parties on the SET.

The Value of Investment Units may decrease if the value of additional Investment Units offered for sale has a lower price than the Value of Investment Units before such offering.

After the initial public offering of the Investment Units, the Fund may issue additional Investment Units at an offer price lower than the Value of Investment Units before such offering. A lower offer price may cause the Value of Investment Units to decrease.

Future sales of Investment Units could adversely affect the market price of the Investment Units.

No prediction can be made as to the effect, if any, that future sales of Investment Units, or the availability of Investment Units for future sale, will have on the market price of the Investment Units. Upon completion of the Combined Offering, the Sponsor will hold 25% of the then outstanding Investment Units and, Capital Research and Management Company, the foreign institutional investor, (the "Cornerstone Investor"), who has agreed to subscribe for approximately 6.2% of the then outstanding Investment Units. Although the Purchase Agreement and Underwriting Agreement contain restrictions on the disposal of Investment Units held by the Sponsor, there can be no assurance that sales of substantial amounts of Investment Units by other parties will not occur or that the Sponsor (or its subsidiaries) will not dispose of Investment Units upon the lapse of such restrictions. The Cornerstone Investor is not subject to any restrictions on the disposal of the Investment Units after the completion of the Combined Offering.

Sales of substantial amounts of Investment Units following the Combined Offering by the Sponsor, the Cornerstone Investor or others, or the perception that such sales could occur, could adversely affect prevailing market prices for the Investment Units.

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The assumptions in "Profit Projections" are inherently uncertain and are subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those projected.

The projections set forth in "Profit Projections" include a forecast of the Fund's operating results and distributions for the Projection Year ended 28 February 2013. The financial projections are subject to a number of assumptions which are found in the section titled "Profit Projections". Although the projections have been prepared after due and careful deliberation by the Management Company, the assumptions underlying the projections are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks, uncertainties and contingencies, many of which are outside of the Fund's control. In addition, the Fund's revenue is dependent on a number of factors, including the rent from the Properties, which may decrease for a number of reasons including the lowering of occupancy and rental rates, insolvency or delay in rental payment by tenants. These factors may adversely affect the Fund's ability to achieve the projected operating results and distributions as some or all of the events and circumstances assumed may not occur as expected, or events and circumstances that are not currently anticipated may arise. There is no assurance from the Management Company that the assumptions will be realised or that actual dividends will be as projected. If the Fund does not achieve the projected operating results, the Fund may not be able to make the expected distributions, in which case the market price of the Units may decline materially.

Risks Relating to Thailand

The floods experienced in 2011 are likely to have a significant adverse impact on the Thai economy.

Beginning in September 2011, the floods are expected to have a significant adverse impact on the Thai economy as a whole. The full impact of the floods remains uncertain; however, in early December 2011, the Bank of Thailand reduced its GDP growth forecast for Thailand for 2011 from 4.1% projected prior to the floods to 1.8%. The impact of the floods on the growth of the Thai economy in 2012 and beyond depends on a number of factors, including the rate at which homes, businesses and infrastructure are repaired or replaced, industrial parks and factories are reopened and whether manufacturing levels return to levels experienced prior to the flooding. In addition, the rate at which tourism and other key sectors of the Thai economy return to levels experienced prior to the flooding will be key factors affecting the future growth of the Thai economy.

The Government may not take adequate measures to prevent future flooding.

The Government has stated its intention to improve flood protection infrastructure in an effort to prevent future flooding similar to that experienced in 2011. [Government officials have announced plans for the construction of floodways, the repair of sluice gates damaged during the recent flooding and the purchase of additional pumps to remove future floodwater. The Government has also announced that it is preparing a master flood management plan.] There can be no assurance, however, that these plans will be implemented before significant flooding occurs in Thailand again or at all. No assurance can be given that the Government's flood prevention measures will be adequate to protect low-lying areas and other parts of Thailand from flooding in the future.

If additional flood prevention measures are not implemented, or if those measures that are implemented are inadequate to prevent widespread flooding in the future, operations at the Properties could be disrupted to a degree similar to or worse than that experienced in 2011. If such disruptions do occur, the Fund's performance, financial condition, results of operations and ability to make dividend payments could be adversely affected.

All of the Fund's assets and operations are located in Thailand and the Fund is subject to economic, legal and regulatory uncertainties in Thailand as well as global economic conditions.

The Fund's assets and operations are located in Thailand. Consequently, the Fund is subject to economic, legal and regulatory conditions in Thailand that differ in certain significant respects from those prevailing in more developed economies. Prior governments have intervened in the Thai economy and occasionally made significant changes in policies including, among other things, foreign exchange control, wage and price controls, capital controls and limits on imports, at times partially reversing such policies soon after the new policies were announced.

Policy changes made by the Government and the Bank of Thailand have included the institution (and subsequent reversal in 2008) of a one-year 30% unremunerated reserve requirement on foreign exchange inflows, under which any foreigner buying securities (including Investment Units in a property fund) in Thailand had to put in place an extra non-interest-bearing deposit. The Fund cannot assure you that the Government will not in the future reimpose restrictive

56

foreign exchange controls that may affect the outward remittance of funds, including dividends to unitholders. The Fund's performance, financial condition, results of operations and prospects and the market price of the Investment Units may be adversely affected by future changes in Government policies.

[The Fund's performance and operations in Thailand are subject to the changing economic conditions prevailing from time to time in Thailand. According to Thailand's National Economic and Social Development Board, Thailand's gross domestic product ("GDP") grew by 4.8% and 2.5%, respectively, in 2007 and 2008, and contracted by 2.3% in 2009. GDP grew by 7.8% in 2010 and is expected to grow between 3.5% and 4.5% in 2011.]

Factors that may adversely affect the Thai economy include:

• political instability;

• exchange rate fluctuations;

• a prolonged period of inflation or increase in regional interest rates;

• changes in taxation;

• natural disasters, including tsunamis, earthquakes, fires, floods, drought and similar events;

• scarcity of credit or other financing, resulting in lower demand for products and services provided by companies in the region;

• increases in oil prices;

• other regulatory, political or economic developments in or affecting Thailand; and

• recent and threatened terrorist activities in Southeast Asia, including continued violence in the southern parts of Thailand.

Thailand's economy is also affected by global economic conditions. The global credit markets have experienced, and may continue to experience, volatility and liquidity disruptions, which have resulted in the consolidation, failure or near failure of a number of institutions in the banking and insurance industries. There remains a concern that the debt crisis in Europe, the Middle East unrest and the March 2011 earthquake in Japan will impinge upon the health of the global financial system. These or other such events could adversely affect the Fund insofar as they result in:

• a negative impact on the ability of the tenants to pay their rents in a timely manner or continuing their leases, thus reducing the Fund's cash flow;

• an increase in counterparty risk; and/or

• an increased likelihood that one or more of (i) the Fund's banking syndicates (if any), (ii) banks or insurers, as the case may be, providing bankers' guarantees or performance bonds for the rental deposits or other types of deposits relating to or in connection with the Properties or the Fund's operations or (iii) the Fund's insurers, may be unable to honour their commitments to the Fund.

Moreover, the Fund's performance and results of operations depend on the performance of the Thai retail market, which is impacted by Thai and global economic conditions. Historically, Thai real estate has been cyclical and Thai property values, rents and occupancy rates have been affected by, among other factors, supply of and demand for comparable properties, the rate of economic growth in Thailand, interest rates and inflation. A decline in Thailand's economy and/or business activities within the areas where the Properties are located could adversely affect the Fund's results of operations and future growth. The performance of the Fund may also be adversely affected by a number of local retail market conditions, such as the competitiveness of competing retail properties or an oversupply of or reduced demand for retail properties.

The Fund cannot assure you that the Thai economy will meet current projections or improve in the future, that Thailand's economy will not be adversely affected by global economic conditions or that Thai property values will not decline in the future. Any downturn in the Thai or global economy or any decline in Thai property values could have a

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material adverse effect on the Fund's performance, financial condition, results of operations and prospects and the Value of the Investment Units.

The impact of the recent political instability in Thailand is uncertain.

The Fund's performance, financial condition, results of operations and prospects may be influenced in part by the political situation in Thailand, which has been unstable from time to time. In 2006, there was a coup against the country's civilian political leadership. The coup leaders declared martial law and abrogated the 1997 Constitution. In 2007, a new constitution (the 18th constitution adopted since 1932) came into force after approval in a referendum, and a general election was subsequently held. Two new coalition Governments took office in February and September 2008, respectively. There was a series of anti-Government protests in 2008, including the occupation by protestors of the Government House and the seizure of Thailand's two key airports, Suvarnabhumi International Airport and Don Mueang International Airport.

In December 2008, the Thai Constitutional Court issued a verdict to disband certain political parties which dissolved the existing coalition Government and removed the Prime Minister from office. The leader of the Democrat-led coalition was elected by the Thai Parliament in December 2008 as the new Prime Minister. There was a series of protests and demonstrations, including an attack by the protesters which caused the cancellation of the Association of South East Asian Nations ("ASEAN") Summit in Pattaya and riots in Bangkok in April 2009, evidencing resistance to the coalition Government.

In March 2010, anti-Government protestors launched new protests aimed at removing the coalition Government and holding new elections. The protesters first occupied areas around Government House and moved to an encampment in Bangkok's city centre. Over the course of two months, the demonstrations turned violent, as a number of buildings, including a major shopping centre, Government buildings and the SET, were set on fire by demonstrators, and a number of people were also killed or injured. The Government declared a state of emergency in Bangkok and in 23 other provinces in central, northern and north-eastern Thailand. The Government also imposed curfews and restricted numbers at gatherings in an effort to clear the protest sites. The dispersal of the demonstrators and the prolonged imposition of a state of emergency in many provinces have led to a turbulent atmosphere in Thailand. As a result, a number of countries, including the United States, the United Kingdom, Australia and Canada issued travel advisories relating to travel to Thailand. There can be no assurance that protests or other violent demonstrations will not recur.

On 3 July 2011, the Pheu Thai Party won 265 seats in the 500-seat parliamentary election. As a result, Yingluck Shinawatra, leader of the Pheu Thai Party and sister of the ousted former Prime Minister Thaksin Shinawatra, became the 28th Prime Minister of Thailand. Yingluck formed a coalition Government and introduced reforms, including potential changes to the 2007 Constitution. There can be no assurance that any reforms introduced will promote growth and stability within Thailand. Moreover, Thaksin Shinawatra may now seek to return to Thailand, and it is unclear what effect such a return would have or whether further political instability might result. The Management Company cannot predict what effects these recent events will have on Thailand's political and economic conditions, or whether the new Government might seek changes to Thailand's legal and regulatory environment. No assurance can be made that these events will not lead to further political demonstrations or slower economic growth, which could materially and adversely affect the Fund's performance, financial condition, results of operations and prospects.

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Continued violence in southern Thailand, terrorist attacks and international and regional instability could adversely affect the Fund's performance, financial condition, results of operations and prospects.

In 2004, the Government declared martial law in certain southern provinces. The region recently has experienced increasingly serious and frequent incidents of violence, including bombings of power stations, which caused blackouts in the provinces. On 19 July 2005, the Government invoked an emergency decree to declare a state of emergency in the three southernmost provinces of Yala, Narathiwat and Pattani. The state of emergency replaces martial law in those provinces and allows the authorities to detain suspects without charge, ban public protests and censor the news media. Since January 2004, there have been a large number of casualties and injuries arising from violence in the region, including a series of explosions in southern Thailand, that included targets such as schools, restaurants and commercial banks. The violence could lead to widespread unrest in Thailand or a major terrorist incident in Thailand similar to those in other parts of Southeast Asia. If the security condition deteriorates and violence spreads to northern provinces of Thailand, the Fund's performance, financial condition, results of operations and prospects may be materially and adversely affected.

In addition, the military operations in Iraq and Afghanistan, as well as events occurring in response to or in connection with these operations, including future terrorist attacks against targets in the Middle East, Southeast Asia or other regions, rumours or threats of terrorist attacks or war, actual conflicts involving the Middle East and trade disruptions, may impact the Fund's tenants and adversely impact on its operations. Political or economic developments related to these crises could adversely affect the Thai economy and the global economy and could have a material adverse effect on the Fund's performance, financial condition, results of operations and prospects.

The laws, regulations and accounting standards in Thailand may change.

The Fund may be affected by the introduction of new or revised legislation, regulations or accounting standards. TFRS is subject to changes as accounting standards are further aligned with the International Financial Reporting Standards ("IFRS"). The financial statements of the Fund may be affected by the introduction of such revised accounting standards. The extent and timing of these changes in accounting standards are unknown and are subject to confirmation by the relevant authorities. There can be no assurance that these changes will not have a significant impact on the presentation of the Fund's financial statements or on the Fund's results of operations and financial position. Such changes may adversely affect the ability of the Fund to pay dividends to unitholders. In addition, the SEC is considering the draft regulations to establish real estate investment trusts ("REIT") in Thailand. Such regulations, if passed, may encourage property funds, including the Fund, to convert into a REIT. There can be no assurance whether the conditions upon which the conversion will be made will be favourable, the regulations applicable to the REITs will be less stringent, or whether benefits and privileges granted to a REIT will be more favourable than for a property fund. There can be no assurance that any such changes in laws, regulations and accounting standards will not have an adverse effect on the ability of the Management Company to carry out the Fund's investment strategy or on the operations and financial condition of the Fund.

If the Fund is converted into a REIT, it must seek consent from the landlords of the Leasehold Properties in order to transfer the leasehold right in the Leasehold Properties to the REIT. However, there can be no assurance that such landlords will give their consent. If such consent is not obtained, the leasehold rights in such Leasehold Properties will not be transferred to a REIT, which may adversely affect the operating results and financial condition of the Fund after its conversion into a REIT.

Public health epidemics may adversely affect Thailand's economy, and the Fund's performance, financial condition, results of operations and prospects.

The Fund's performance could be materially and adversely affected by the outbreak of public health epidemics in Thailand. In April 2009, an outbreak of the H1N1 virus, commonly referred to as "swine flu", occurred in Mexico and spread to other countries, including Thailand. If any future outbreak were to become widespread in Thailand or increase in severity, it could have an adverse effect on economic activity in Thailand, and could materially and adversely affect the Fund's performance, financial condition and results of operations. Any future public health epidemics in Thailand could materially and adversely affect the Fund's performance, financial condition, results of operations and prospects.

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Additional Risk Factors for International Investors

The Fund will be subject to reporting and corporate governance requirements that differ from those in other countries.

The Fund will be subject to reporting and corporate governance requirements in Thailand that differ, in significant respects, from those applicable to companies in certain other countries. The amount of information publicly available for property funds in Thailand is significantly less than that available for comparable property funds or real estate investment trusts in certain more developed countries, and certain statistical and financial information of a type typically published by entities in certain more developed countries may not be available. As a result, unitholders may not have access to the same level and type of disclosure as that available in other countries, and comparisons with other property funds or real estate investment trusts in other countries may not be possible in all respects. In addition, unitholder protection afforded by the securities law and other relevant Thai laws may not be as extensive as in other countries.

Non-enforceability of non-Thai judgments may limit an investor's ability to recover damages from the Fund or the Management Company.

The Fund will be established and regulated as an individual mutual fund under the laws of Thailand. The Management Company is incorporated in Thailand and is licensed by the Ministry of Finance of Thailand to undertake the securities business of mutual funds management in Thailand. All of the Properties and other assets to be acquired, or invested in, by the Fund are currently or will be located in Thailand. As a result, investors may not be able to effect service of process upon the Fund, the Management Company, the directors or officers of the Management Company or other entities involved in the management and operation of the Fund outside Thailand.

Under Thai law, judgments entered by a non-Thai court are not enforceable in Thailand. In order to pursue a claim against the Fund, the Management Company or the directors and officers of the Management Company or other entities involved in the management and operation of the Fund, an investor would have to bring a separate action or claim in Thailand. While a non-Thai judgment could be introduced as evidence in a court proceeding in Thailand, a Thai court would be free to examine any new issues arising in the case. Thus, to the extent investors succeed in bringing legal actions against the Fund, the Management Company or the directors and officers of the Management Company or other entities involved in the management and operation of the Fund, their available remedies and any recovery in any Thai proceeding may be limited.

Denomination of the Investment Units and associated payments in Thai Baht will expose investors to foreign exchange risk.

Trading of the Investment Units on the SET will be settled in Baht. Any dividends paid in respect of the Investment Units will be payable in Baht. Fluctuations in the exchange rate between Baht and other currencies will affect the equivalent in such other currencies of the Baht price of Investment Units on the SET and of the Baht amount of any dividends distributed by the Fund and of any gains or losses realised by investors on a sale of Investment Units. See "Exchange Rates".

The Thai securities market is relatively small and can be highly volatile.

The SET is relatively small and may be more volatile than stock exchanges in the United States and certain other countries. The performance of the SET is affected by external factors such as the performance of regional and international stock exchanges and the inflow and outflow of foreign funds. Sentiments may also be affected by other external factors such as Thai political conditions and overall market conditions as well as the growth potential of various sectors of the Thai economy. On 21 February 2012, 472 companies and 35 freehold/leasehold property funds were listed and quoted on the SET and the aggregate market capitalisation of the listed equity securities of these companies and freehold/leasehold property funds was approximately Baht 9,354.1 billion. The relatively small market capitalisation of, and trading volume on, the SET, compared to certain other global stock exchanges, may cause the market price of securities listed on the SET, including the Investment Units, to fluctuate more than those listed on larger global stock exchanges. The market price of the Investment Units may be adversely affected by the lack of liquidity on the SET. These market characteristics may limit your ability to sell the Investment Units and may also affect the market price of the Investment Units.

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The ability of unitholders to participate in future rights offerings may be limited.

The Fund is not required to offer pre-emptive rights to existing unitholders when new Investment Units are issued. The discretion to permit existing unitholders to participate in rights offerings to increase capital for the Fund is subject to the discretion of the Management Company in conjunction with a resolution by the existing unitholders. Compliance with securities laws or other regulatory provisions in some jurisdictions may prevent certain investors from participating in any future rights issuances and thereby result in a dilution of their existing holding of Investment Units. The Fund will have no obligation to register the Investment Units in any other jurisdiction in order to permit other foreign investors to participate in any future rights offerings the Fund may undertake.

Preparation of Report to the SEC and unitholders

Reports of the Fund

The Management Company shall, within four months from the last day of the financial year, prepare a report of the Fund at the end of every financial year, and send it to the unitholders, whose names are listed in the register of unitholders, as well as the SEC. Such report shall at least consist of the following particulars:

(1) a list of assets, in which the Fund invested or which the Fund possesses, categorised by type. In the case that they are of the same type, but are materially different financial tools, or have different instrument risks due to different products or variables, such assets shall be shown as separate particulars, such as Freehold Properties, Leasehold Properties, Mixed Properties, government bonds, debentures, notes, bills of exchange on which yield is paid or of which investment funds are returned in correlation with products or variables, deposits, general certificates of deposits, and certificates of deposits on which yield is paid or of which investment funds are returned in correlation with products or variables, etc., together with the NAV, the asset value in accordance with the market price or the fair price, together with the ratio of the NAV to the value of Investment Units as of the last business day of the accounting year;

(2) details concerning every Property of the Fund, specifying at least the name, location, condition, type of use, size of area, lease term, value obtained from the latest Appraisal Report, Review of the Appraisal, annual income and various encumbrances, etc.;

(3) details concerning the purchase or lease of the Properties, and/or leasehold right in each Property during the accounting year, specifying at least the significant information as follows:

• date, price, reason for the purchase or lease, and the seller of the Properties or lessor or transferor of Leasehold Properties or Mixed Properties or the grantor of rights in Properties;

• details concerning the Appraisals of both Appraisal Firms prior to the purchase or lease, such as the date of Appraisal, the price obtained from the Appraisal Report, and the method of Appraisal, and the name of the Appraisal Firm, etc.; and

• expenses concerning the purchase or lease;

(4) details concerning the disposal of Freehold Properties or Mixed Properties or transfer of Leasehold Properties or Mixed Properties during the accounting year, which shall at least specify the following significant information:

• date, price, reason for disposal of the Freehold Properties or Mixed Properties or transfer of the Leasehold Properties or Mixed Properties, and the purchaser of the Freehold Properties or buildings of the Mixed Properties or transferee of the Leasehold Properties or land of the Mixed Properties;

• details concerning the Appraisals of both Appraisal Firms prior to the disposal or transfer of Freehold Properties, Leasehold Properties or Mixed Properties, such as the date of Appraisal, prices obtained from the Appraisal Report, methods of Appraisal, and the name of the Appraisal Firm, etc;

• profit or loss from the disposal or transfer of the Freehold Properties, Leasehold Properties or Mixed Properties and related expenses; and

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• book value of the Freehold Properties, the Leasehold Properties or the Mixed Properties disposed or transferred;

(5) information relating to the borrowing by the Fund (if any) as of the end of the accounting, which shall at least specify the following significant information:

• term of the loan, the signing date and the termination date of the loan agreement;

• loan amount as of the signing date, an outstanding loan amount as of the end of the financial year, and the loan ratio of the Fund; and

• collateral provided for the loan (if any);

(6) a report of the Management Company, which shows the overview of the business of seeking profits from the Properties in which the Fund invested and the trends of such business;

(7) audited balance sheet and income statements with the opinion of the auditor;

(8) expenses that the Management Company collected from the subscribers or the unitholders or the Fund according to the electronic template provided by the SEC;

(9) opinions of the Trustee concerning the operation of the Fund during the preceding one-year period;

(10) information on transactions with related persons (if any);

(11) names and addresses of all advisers and the Property Manager (if any);

(12) the information relating the guarantee of revenue of the Fund (if any), including the name and address of a guarantor and a summary of key terms of the guarantee; and

(13) any other items as prescribed by the applicable law.

Reports of Investment in or Disposal of the Properties of the Fund

The Management Company shall deliver the summary of significant information concerning the investment in or disposal of the Properties of the Fund to the unitholders and the SEC within 15 days from the date of such investment or disposal of the Properties and display such significant information at an open place at all offices of the Management Company and the head office of the Trustee within 15 days from the date of investment in or disposal of the Properties for inspection of unitholders. Such summary of information must have significant particulars as prescribed by the SEC.

After the Investment Units of the Fund have been approved to be listed securities on the SET, the Management Company may deliver the summary of significant information under the preceding paragraph to the SET within the next business day from the date of the investment in or disposal of the Properties of the Fund or within such other periods as prescribed by the SET, rather than sending the same to the unitholders.

Report on the Construction Progress of the Properties Under Construction

If the Fund invests in an Additional Property which is under construction in accordance with the criteria prescribed by the SEC, the Management Company shall prepare a progress report on the construction every six-months from the date of investment until the completion of the construction. Such report shall also be sent to the SEC within 15 days from the expiration date of such six-month period. The progress shall also be disclosed on the website of the Management Company.

When the Investment Units have been approved to be listed securities on the SET, the Management Company shall notify the progress of construction to the SET.

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Key Fees and Expenses Collectible from Subscriber or unitholder and the Fund

Expenses in relation to sale of Investment Unit Ceiling Expenses

Expenses in relation to sale of Investment Unit N/A

Money transfer fee At a rate set by the commercial bank (if any)

Investment Unit transfer fee Not exceeding 0.5% of the value of the transferred Investment Units

Investment Unit Certificate Fee At a rate set by the Registrar. Currently, none. The unitholders will be informed not less than five business days when there is a rate set by the Registrar.

Fee and other expenses

1. Pledge of Investment Unit fee At a rate set by the Management Company/Register

2. Fee for special service to unitholder As actually paid

Fund's direct expenses Ceiling of Expenses

Fees and expenses Not exceeding 5.00% per annum of NAV***1

Management fee Not exceeding 0.16% per annum of NAV**

Trustee Fee Not exceeding 0.01% per annum of NAV

Not including out of pocket expenses incurred from the performance of duties by the Trustee such as (i) registration fee of the Properties per registration at Baht 3,000 in Bangkok and Baht 5,000 outside of Bangkok and (ii) other expenses, including but not limited to travelling expenses, gasoline, accommodation, value added tax which shall be as actually paid**

Registrar fee Not exceeding 0.02% per annum of NAV**

Fees of the Property Manager ***2

1. Fee for rental collection Payable monthly at the rate not exceeding 3.00% of the monthly Net Property Revenue

2. Fee for property and lease .management Payable monthly at the rate not exceeding 0.30% per annum of the NAV of the previous month

3. Property and lease management incentive fee Payable monthly at the rate not exceeding 2.35% of the monthly Net Property Income

4. Commission fee for new lettings or renewal of the existing leases

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Key Fees and Expenses Collectible from Subscriber or unitholder and the Fund

(a) In respect of renewals of existing leases of one or more than one year

Half month's rental or service fees pro rata with the lease term which is less than one year

(b) In respect of new leases or tenancies, the commission fee shall be divided into three rates depending on the term of the lease as follows;

- less than one year Not exceeding half month's service fees pro rata

- one or more than one year but less than three years

Not exceeding one month's rental and service fees

- three or more than three years

Not exceeding one and one half month's rental and service fees

5. Fees for acquisition or disposal Not exceeding 1.5% of the acquisition value of such Property and not exceeding 0.75% of the disposal value of such Property

Advisor fee

1. Advisor fee for annual fee Not exceeding 1.00% per annum of the NAV**

2. Additional advisor fee in case of each acquisition or disposal or transfer of the Property

Not exceeding 3.00% of the value of each Property acquired or disposed or transferred**

3. other advisor fee such as specific advisor fee, legal fee, lawyer fee or engineering fee

As actually paid

Financial advisor fee Not exceeding 3.00% per annum of the NAV

Underwriting fee At the initial public offering and any subsequent offering,

not exceeding 3.00% of underwritten value of the offering**

Meeting allowance fee for the Investment Committee Member

Not exceeding 20,000 Baht/each/person**

Agent fee Not exceeding 1.00% of the value of the offering**

Advertising, public relations and sales promotion expenses

1. At the initial public offering Not exceeding Baht 65 million**

2. At any subsequent offering (upon an increase of capital of the Fund)

Not exceeding 0.50% per annum of the NAV of the Fund as of the end of the previous financial year (not including value added tax or other similar tax)

Other expenses3 Not exceeding 3.00% of the NAV

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Note

1. As some expenses are not calculated based on the NAV of the Fund, the ceiling of the expenses is only an estimate for the purpose of the calculation of percentage of the NAV.

2. The fees received by the Property Manager is not specified by comparing with the general rate. The Management Company may consider the fee with the expenses the Property Manager has to be responsible for so as the Property Manager may receive enough remuneration in order to pay for the expenses and to maintain the standard in administering the Property. Moreover, the assessment of the fee by calculating in percentage of the revenue of the lease and service revenue and that of the net revenue is to create incentive and encourage the Property Manager to seek more revenue or reduce expenditure for the Fund. In this case the Fund will get more benefit than to compensate the Managers with a fixed rate.

3. Each expense shall not exceed 0.01% of the NAV of the Fund.

** Not including value added tax or Specific Business Tax or any other taxes of similar nature.

*** Not including expenses in relation to the issuance and offering of the Investment Units, brokerage fee and other fees incurred from the sale and purchase of securities.

Fund disclosure

1. The Management Company shall announce NAV and NAV per unit as of the end of month to SET within thirty days from the last day each month.

2. The Management Company shall submit financial statement and annual report as of the end of every accounting year (end of February) to SET within four months from the last day of the accounting year of the Fund. Such report shall have particulars as prescribed by the office of the SEC. The financial statement for the year ended 28 February 2013 would be the first financial statement submitted to SET.

3. The Management Company shall submit a summary of appraisal report or review of appraisal report to SET in accordance with the Net Asset value at the end of month.

No. of unitholders and distribution of Investment Units

As of 13 March 2012

No. of unitholders

No. of Investment

Units

% of outstanding Investment Units

Holding > 5/1,000 of total outstanding Investment Units

11 1,111,993,300 62.82

Holding ≤ 5/1,000 of total outstanding Investment Units

11,330 658,006,700 37.18

and not < Trading unit 0 0 0

Holding < Trading unit 11,341 1,770,000,000 100.00

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Major Unitholders

As of 13 March 2012

No. Name of Unitholders No. of Investment units held

% of total Investment Units outstanding

1. Ek-Chai Distribution System Co., Ltd. 442,500,000 25.00

2. Merrill Lynch Far East Limited 382,650,000 21.62

3. The Government Pension Fund 144,230,700 8.15

4. Social Security Fund 48,500,000 2.74

5. Ayudhya Allianz C.P. Life Public Company Limited

26,250,000 1.48

6. One Property Plus Fund 15,000,000 0.85

7. Registered Provident Fund of Krung Thai Public Company Limited

13,172,100 0.74

8. MFC Property Wealth Fund 11,975,200 0.68

9. Registered Provident Fund of the employee of TOT Public Company Limited

9,615,300 0.54

10. Registered Fund of Ek-Chai 9,100,000 0.51

Total 1,102,993,300 62.32

As of 13 March, 2012, the Fund has 35 foreign investors holding 386,333,900 Investment Units or 21.83 of the total outstanding Investment Units.

Note:

The Management Company, as the Management Company and Registrar of Investment Units of the Fund, shall comply with the requirements as prescribed in the Fund scheme and the requirements of the SEC No. Sor Nor. 25/2552 re: Rules, Conditions and Procedure of the Establishment and Management of Property Fund, in respect of the control of the foreign unitholders, provided that at any time the proportion of foreign unitholding shall not exceed 49% of total the Investment Units sold. Thus, the Registrar shall issue a letter to every securities company to inform them of the SEC's regulation on the holding of the Investment Units by foreign investors and the securities company has to inform the Management Company and the Registrar in writing when a foreign investor buys or sells units on the Stock Exchange on any given day within the following business day so that the Management Company and the Registrar shall have a daily record of changes to foreign investor holdings. If there is a transfer of Investment Units from a Thai unitholder to a foreign unitholder or a foreign unitholder to a Thai unitholder or between two foreign unitholders, the unit transfer transaction must take place at the Registrar so that the Registrar will have a record of foreign investor holdings. The Registrar will refuse any transfer of Investment Units which may contribute to the proportion of foreign unitholding exceeding the prescribed rate based on the respective unitholding of foreign unitholding.

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Statistical Summary

Date Net Asset Value Distribution of Net Asset Value (unit: Thousand Baht)

Per unit Total (unit:

Thousand Baht) Deposits Investment

securities Other

Liabilities

14/03/2012 10.4002 18,408,509.82 1,784,930.73 16,678,830.55 581,256.05

Remark : Data as of 14 March 2012. The NAV and the investment allocation of Net Asset Value does not include the investment in Rama I store which TLGF has invested in on 15 March 2012.

Prepared by : Krung Thai Asset Management PCL

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CERTAIN AGREEMENTS RELATING TO THE FUND AND THE PRO PERTIES

The Fund will enter into certain agreements the substantial terms of which are described below. This summary is based on the agreements and as such, the executed agreements, while on substantially the same terms as those described here, may contain details different from the agreements.

In these summaries:

"Common Areas" means the common areas or parts of the Initial Properties which are not designated and built for exclusive use and occupation and all ancillary facilities and spaces including any car park and all plant or equipment installed in or at the Initial Properties;

"Leased Property" means the store within each of the Initial Properties together with the food court, back office and warehouse in each of the Initial Properties to be leased by the Sponsor from the Fund; and

"Occupiers" means, as the context may require, any tenant, temporary user or other occupier of the Initial Properties or any part thereof (other than the Sponsor).

Summary of SPAs

Summary of Sale and Purchase Agreement relating to the Initial Properties which are Freehold Properties (i.e. Srinakarin, Krabi, Prachachuen, Rangsit Klong 7, Tung Song, Singburi, Pranburi, Mahachai, Maesai and Ranong)

The Sponsor will sell and the Fund will purchase the Freehold Properties. There will be one sale and purchase agreement covering all the Initial Properties which are Freehold Properties to be sold to the Fund.

Sale and Purchase The Sponsor will sell and the Fund will purchase the Initial Properties which are Freehold Properties.

Purchase Price The purchase price is set out in a schedule to the sale and purchase agreement and is apportioned between the land, the buildings and the tenancies subject to which the buildings are being transferred and the service agreements which are being novated.

Conditions Precedent The sale and purchase agreement is conditional upon (i) the Property Management Agreement having been entered into by the parties thereto; (ii) novation agreements and utilities service agreements having been entered into by Occupiers representing in aggregate 50% of the floor space leased of the relevant Initial Properties; and (iii) completion having occurred in relation to one or more Initial Properties that are Leasehold Properties, Mixed Properties or Rama I such that, when combined with the Freehold Properties at least 80% of the aggregate value of the Initial Properties shall be sold or transferred by the Sponsor to the Fund. Between the signing of the sale and purchase agreement and completion, the Sponsor is not permitted to sell, transfer, encumber or vary the rights attaching to any of the land, buildings or agreements with Occupiers.

Completion On completion of the sale and purchase of the Initial Properties which are Freehold Properties, the Fund will pay the purchase price to the Sponsor. Both the Fund and the Sponsor must attend the relevant land offices (either in person or through a duly authorised representative) and sign all documents necessary to register the transfer of the land and the buildings and the registration of the leases pursuant to which the Sponsor will lease the Leased Property from the Fund (see 'Summary of Operating Lease Agreement' below).

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On Completion of the sale and purchase of the Initial Properties which are Freehold Properties, the Fund and the Sponsor must enter into the Operating Lease Agreements in respect of Leased Property in the Initial Properties and service agreements in respect of the same. The Fund and the Sponsor must also enter into a utility services agreement in respect of the Common Areas and other unoccupied areas of each Initial Property (pursuant to which the Sponsor shall supply gas, water and electricity to those areas of the relevant Initial Properties). The Sponsor must further deliver all title documents in respect of the land and buildings to the Fund.

Warranties The Sponsor warrants at signing and completion that it owns the Initial Properties which are Freehold Properties, has the capacity, power and authority to enter into and perform the agreement and that it is not insolvent. The Sponsor gives further warranties including in relation to compliance with environmental laws, no litigation or defaults, no encumbrances and no outstanding breach of lease agreements with Occupiers. The warranties are subject to disclosure to the Fund by the Sponsor. There are certain limitations on the ability of the Fund to claim against the Sponsor for breach of warranty including financial limits on claims and that the Fund must give notice to the Sponsor of potential claims within one year of the date of the sale and purchase agreement.

The Fund warrants that it has the capacity, power and authority to enter into and perform the agreement, that it is not insolvent and has (and will have at completion) the requisite funds to complete the sale and purchase.

Post Completion Undertakings

Following completion the Sponsor undertakes to pay to the Fund any amounts received from Occupiers relating to the period after the completion date to the Fund (other than amounts received in respect of gas, water and electricity usage). The Fund undertakes to perform the obligations under any service agreements with Occupiers not transferred to the Fund pursuant to a novation agreement following the date of completion of the sale and purchase of the Initial Properties which are Freehold Properties. The Sponsor and the Fund acknowledge that on the expiry or termination of leases or the expiry or termination of service agreements with Occupiers that have not been transferred to the Fund, any new lease or service agreements in respect of areas of the Initial Properties that are available to be leased by the Fund will be entered into by the Fund.

The Fund undertakes to pay to the Sponsor any amount received from Occupiers of the relevant Properties relating to the period on or prior to the completion date. The Fund indemnifies the Sponsor for a period of two years against losses arising out of the lease agreements and service agreements with the tenants of the relevant Properties relating to the period or implementation thereof after the date of completion of the sale and purchase of the Initial Properties which are Freehold Properties.

Governing law and Dispute Resolution

The sale and purchase agreement is governed by the laws of Thailand. The dispute resolution process requires the parties to use their best efforts to resolve any dispute by mediation prior to commencing arbitration proceedings under the Arbitration Rules of the Thai Arbitration Institute. The seat of arbitration shall be Bangkok. There shall be three arbitrators. The language of the arbitration shall be Thai. The arbitration and any rulings or awards must be kept confidential except as required by law, regulation, order of the tribunal or agreement of the parties or if the information is already in the public domain (other than as a result of breach of a party's confidentiality obligations).

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Summary of Sale and Purchase Agreement relating to the Initial Properties which are Leasehold Properties (i.e. Samui and Pitsanulok)

The Sponsor will sell and the Fund will purchase the Leasehold Properties. There will be one sale and purchase agreement for each Initial Property which is a Leasehold Property of which the Sponsor is the registered tenant.

Sale and Purchase The Sponsor will sell and the Fund will purchase the relevant Initial Property which is a Leasehold Property.

Purchase Price The purchase price is set out in a schedule to the sale and purchase agreement and is apportioned between the head lease, the buildings and the tenancies subject to which the buildings are being transferred and the service agreements which are being novated.

Conditions Precedent The sale and purchase agreements are conditional upon (i) consent from the landlord of the lease pursuant to which the Sponsor is the registered tenant of the land to the transfer of the land and buildings, (ii) the Property Management Agreement having been entered into by the parties thereto; and (iii) novation agreements and utilities service agreements having been entered into by Occupiers representing 50% of the floor space leased of the relevant Initial Property. Between the signing of the sale and purchase agreement and completion, the Sponsor is not permitted to sell, transfer, encumber or vary the rights attaching to any of the head lease, buildings or agreements with Occupiers.

Simultaneous Completion Unless otherwise agreed in writing by the Sponsor and the Fund, the Sponsor and the Fund shall not proceed to completion in relation to any Initial Properties that are Leasehold Properties unless they are able to simultaneously proceed to completion in relation to one or more Initial Properties that are Leasehold Properties, Mixed Properties or Rama I such that when combined with the Freehold Properties at least 80% of the aggregate value of the Initial Properties to be sold or transferred by the Sponsor and purchased or accepted by the Fund shall be sold or transferred to the Fund.

Completion On completion of the sale and purchase of the relevant Initial Property, the Fund will pay the purchase price to the Sponsor. Both the Fund and the Sponsor must attend the relevant land offices (either in person or through a duly authorised representative) and sign all documents necessary to register the transfer of the head lease and the buildings and the registration of the Operating Lease Agreement (see 'Summary of Operating Lease Agreement' below).

On completion of the sale and purchase of the relevant Initial Property, the Fund and the Sponsor must enter into the Operating Lease Agreements in respect of the Leased Property in the relevant Initial Property and a service agreement in respect of the same. The Fund and the Sponsor must also enter into a utility services agreement in respect of the Common Areas and other unoccupied areas of each Initial Property (pursuant to which the Sponsor shall supply gas, water and electricity to those areas in the relevant Initial Property). The Sponsor must further deliver the head lease and all title documents relating to the buildings to the Fund.

Warranties The Sponsor warrants at signing and completion that it is the registered tenant of the land that comprises the relevant Initial Property which is Leasehold Property, is the owner of the buildings situated thereon, has the capacity, power and authority to enter into and perform the agreement and that it is not insolvent. The Sponsor gives further

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warranties including in relation to compliance with environmental laws, no litigation or defaults, no encumbrances and no outstanding breach of the head lease or any lease agreements with Occupiers. The warranties are subject to disclosure to the Fund by the Sponsor. There are certain limitations on the ability of the Fund to claim against the Sponsor for breach of warranty including financial limits on claims and that the Fund must give notice to the Sponsor of potential claims within one year of the date of the sale and purchase agreement.



Following completion the Sponsor undertakes to pay to the Fund any amounts received from Occupiers of the relevant Property relating to the period after the completion date to the Fund (other than amounts received in respect of gas, water and electricity usage). The Fund undertakes to perform the obligations under any service agreements with Occupiers of the relevant Property not transferred to the Fund pursuant to a novation agreement following the date of completion of the sale and purchase of the relevant Initial Property. The Sponsor and the Fund acknowledge that on the expiry or termination of leases or the expiry or termination of service agreements with Occupiers that have not been transferred to the Fund, any new lease or service agreements in respect of areas of the Initial Properties that are available to be leased by the Fund will be entered into by the Fund.

The Fund undertakes to pay to the Sponsor any amount received from Occupiers of the relevant Property relating to the period on or prior to the completion date. The Fund indemnifies the Sponsor for a period of two years against losses arising out of (i) head lease and (ii) the lease agreements and service agreements with the tenants of the relevant Property relating to the period or implementation thereof after the date of completion of the sale and purchase of the relevant Initial Property.



Summary of Sale and Purchase Agreement relating to the Initial Properties which are Mixed Properties (i.e. Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena)

The Sponsor will sell and the Fund will purchase the Mixed Properties. There will be one sale and purchase agreement for each Initial Property which is a Mixed Property of which the Sponsor is the registered tenant.

Sale and Purchase The Sponsor will sell and the Fund will purchase the relevant Initial Property which is a Mixed Property.

Purchase Price The purchase price is set out in a schedule to the sale and purchase agreement and is apportioned between the head lease, the land, the buildings and the tenancies subject to which the buildings are being transferred and the service agreements which are being novated.

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Conditions Precedent The sale and purchase agreements are conditional upon (i) consent from the landlord of the lease pursuant to which the Sponsor is the registered tenant of the land to the transfer of the land and buildings, (ii) the Property Management Agreement having been entered into by the parties thereto; and (iii) novation agreements and utilities service agreements having been entered into by Occupiers representing 50% of the floor space leased of the relevant Initial Property. Between the signing of the sale and purchase agreement and completion, the Sponsor is not permitted to sell, transfer, encumber or vary the rights attaching to any of the head lease, the land, buildings or agreements with Occupiers.

Simultaneous Completion Unless otherwise agreed in writing by the Sponsor and the Fund, the Sponsor and the Fund shall not proceed to completion in relation to any Initial Properties that are Mixed Properties unless they are able to simultaneously proceed to completion in relation to one or more Initial Properties that are Leasehold Properties, Mixed Properties or Rama I such that when combined with the Freehold Properties at least 80% of the aggregate value of the Initial Properties to be sold or transferred by the Sponsor and purchased or accepted by the Fund shall be sold or transferred to the Fund.

Completion On completion of the sale and purchase of the relevant Initial Property, the Fund will pay the purchase price to the Sponsor. Both the Fund and the Sponsor must attend the relevant land offices (either in person or through a duly authorised representative) and sign all documents necessary to register the transfer of the head lease, the land and the buildings and the registration of the Operating Lease Agreement (see 'Summary of Operating Lease Agreement' below).

On completion of the sale and purchase of the relevant Initial Property, the Fund and the Sponsor must enter into the Operating Lease Agreements in respect of the Leased Property in the relevant Initial Property and a service agreement in respect of the same. The Fund and the Sponsor must also enter into a utility services agreement in respect of the Common Areas and other unoccupied areas of each Initial Property (pursuant to which the Sponsor shall supply gas, water and electricity to the those areas of the relevant Initial Property). The Sponsor must further deliver the head lease and all title documents relating to the land and the buildings to the Fund.

Warranties The Sponsor warrants at signing and completion that it is the registered tenant of the leased land forming part of each Initial Property which is a Mixed Property, that it is the owner of the remainder of the land comprising the Initial Property that is a Mixed Property, that it is the owner of the buildings situated thereon, has the capacity, power and authority to enter into and perform the agreement and that it is not insolvent. The Sponsor gives further warranties including in relation to compliance with environmental laws, no litigation or defaults, no encumbrances and no outstanding breach of the head lease or any lease agreements with Occupiers. The warranties are subject to disclosure to the Fund by the Sponsor. There are certain limitations on the ability of the Fund to claim against the Sponsor for breach of warranty including financial limits on claims and that the Fund must give notice to the Sponsor of potential claims within one year of the date of the sale and purchase agreement.


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Following completion the Sponsor undertakes to pay to the Fund any amounts received from Occupiers of the relevant Property relating to the period after the completion date to the Fund (other than amounts received in respect of gas, water and electricity usage). The Fund undertakes to perform the obligations under any service agreements with Occupiers of the relevant Property not transferred to the Fund pursuant to a novation agreement following the date of completion of the sale and purchase of the relevant Initial Property. The Sponsor and the Fund acknowledge that on the expiry or termination of leases or the expiry or termination of service agreements with Occupiers that have not been transferred to the Fund, any new lease or service agreements in respect of areas of the Initial Properties that are available to be leased by the Fund will be entered into by the Fund.

The Fund undertakes to pay to the Sponsor any amount received from Occupiers of the relevant Property relating to the period on or prior to the completion date. The Fund indemnifies the Sponsor for a period of two years against losses arising out of (i) head lease and (ii) the lease agreements and service agreements with the tenants of the relevant Property relating to the period or implementation thereof after the date of completion of the sale and purchase of the relevant Initial Property.



Summary of arrangements relating to the acquisition of Rama I

Rama I is the only Initial Property of which the Sponsor leases the land and the buildings. Although a memorandum of understanding has been entered into, it is pending negotiations on definitive agreements relating to the transfer of the lease of this property until after the Fund has been established which may take approximately 45 days for the negotiation process. When signing the memorandum of understanding relating to Rama I, the owner of the land and buildings, Crown Property Bureau (the "CPB") indicated that the mechanism of transfer of the lease be contained in the definitive documentation. There are two possibilities, either a transfer of the lease from the Sponsor to the Fund or a termination of the lease between the CPB and the Sponsor and the entering into of a new lease between the CPB and the Fund. The Sponsor has agreed to guarantee the obligations of the Fund in respect of the lease agreement between the CPB and the Fund. The Fund and the Sponsor will, subject to successful negotiations with the CPB resulting in agreed terms acceptable to the Fund and the Sponsor for transfer of the lease from the Sponsor to the Fund or the granting of a new lease by the CPB to the Fund (as the case may be), enter into the following arrangements relating to Rama I:

In the case of a transfer of the lease from the Sponsor to the Fund, the Fund and the Sponsor shall enter into a sale and purchase agreement on the same terms as that for the Initial Properties that are Leasehold Properties, with the only changes being those necessary to reflect the fact that the Sponsor is the tenant of the land and buildings rather than the tenant of the land and the owner of the buildings.

In the case of a termination of the lease between the CPB and the Sponsor and the entry into of a new lease between the CPB and the Fund, the Sponsor and the Fund will enter into an agreement whereby the Sponsor agrees to the termination of its lease with the CPB and agrees to give the undertakings and warranties in consideration for payment of an amount equivalent to the purchase price for Rama I. The Sponsor and the Fund will each give the same undertakings and warranties as they would have given if there were to be a transfer of the lease from the Sponsor to the Fund (please see paragraph above regarding differences between the Leasehold Properties sale and purchase agreement and that for

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Rama I). The governing law and dispute resolution provisions will also be the same as if there were to be a transfer of the lease from the Sponsor to the Fund.

In both cases, the purchase price will be payable on completion of the transfer of the lease or on the termination of the existing lease and the granting of a new lease and shall be subject to adjustment as follows:

• the purchase price shall be increased by an amount equal to the sum of: (i) the amount of rent and service fee paid by the Sponsor to the CPB for the period beginning on the date on which the transfer of all other Initial Properties is completed and ending upon completion of the transfer of the lease of Rama I or the granting of a new lease by the CPB to the Fund; (ii) any costs attributable to managing Rama I that would be for the account of the Fund if Rama I were to have been transferred to the Fund at the date on which the transfer of all other Initial Properties is completed; and (iii) an amount equal to any additional fees the Sponsor would be entitled to receive under the Property Management Agreement if Rama I were to be transferred to the Fund on the date which the transfer of all other Initial Properties is completed; and

• the purchase price shall be reduced by an amount equal to the sum of: (i) an amount equal to the rent and service fees payable by sub lessees of the Sponsor at Rama I for the period beginning on the date on which the transfer of all other Initial Properties is completed and ending upon completion of the transfer of the lease of Rama I or the granting of a new lease by the CPB to the Fund; and (ii) an amount equal to the rent and service fees (at the rate initially payable by the Sponsor) that the Sponsor would have to pay to the Fund for the period beginning on the date on which the transfer of all other Initial Properties is completed and ending upon completion of the transfer of the lease of Rama I or the granting of a new lease by the CPB to the Fund if Rama I were to be transferred to the Fund on the date which the transfer of all other Initial Properties is completed.

Summary of Rights and Obligations under the Head Lease Agreements relating to the Initial Properties which are Leasehold Properties

The leasehold rights in real property in which the Fund will make its initial investment are leasehold rights in land in 6 locations, namely Samui, Pitsanulok, Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena. In addition to these leasehold rights in land, the Fund will also invest in leasehold rights in land and buildings in Rama I project. These leasehold rights can be divided into 3 groups according to the purpose and use of the lease and the nature of the lease as follows:

Group 1 Leasehold Rights

This group of leasehold rights consists of land lease agreements entered into between Tesco Lotus and the land owners with the objective of using the land as parking area whereby Tesco Lotus owns the constructions consisting of roof structures over the parking spaces located on the land subject to leases. This group of leasehold rights consists of leasehold rights in parts of the land in (1) Samui; and (2) Pitsanulok (not including other buildings and constructions used for the business operations which are located on other parts of the land on which Tesco Lotus owns both the land and constructions).

For the transfer of group 1 leasehold rights, the Fund and Tesco Lotus will enter into a sale and purchase agreement for the transfer of leasehold rights in land (on which the parking area is located) and freehold rights in the land owned by Tesco Lotus, buildings and constructions owed by Tesco Lotus located on the land leased to Tesco Lotus and on the land owed by Tesco Lotus. Following the completion of the registrations at the relevant land offices, the Fund will own the land (parts which are not subject to leases) and become a lessee under the existing land lease agreements with the land owners, and will also own the buildings and constructions located on the land in which the Fund will have freehold and leasehold rights.


This group of leasehold rights consists of land lease agreements entered into between Tesco Lotus and the land owners with the objective of using the land as the location for the shopping malls which are owned by Tesco Lotus. This group

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of leasehold rights consists of leasehold rights in the land located in (1) Amatanakorn; (2) Petchaboon; (3) Lamlukka Klong 6; and (4) Sena.

For the transfer of group 2 leasehold rights, the Fund and Tesco Lotus will enter into a sale and purchase agreement for the transfer of leasehold rights in land and freehold rights in buildings and constructions located on the land subject to leases. Following the completion of the registrations at the relevant land offices, the Fund will own the buildings and constructions and become a lessee under the existing land lease agreements with the land owners.


This group of leasehold rights consists of land and building lease agreement entered into between Tesco Lotus and the land owner to build a shopping mall whereby the title to the shopping mall building is vested in the land owner from the date on which the construction of the shopping mall is completed. The leasehold rights in this group are those in Rama I project.

For the transfer of group 3 leasehold rights, the Fund and Tesco Lotus have entered into a sale and purchase agreement for the transfer of leasehold rights in land, buildings and constructions. Following the completion of the registrations at the relevant land offices, the Fund will become a lessee in respect of the land, buildings and constructions under the land lease agreement.

Most of the terms and conditions contained in the lease agreements to be transferred are terms and conditions used by Tesco Lotus in the standard lease agreements between Tesco Lotus and almost all of the land owners (“Tesco Lotus Standard Lease Agreement”), except for the lease agreement with respect to Rama I project whose terms and conditions are not in line with Tesco Lotus Standard Lease Agreement. However, the lease agreements with respect to real property which will be transferred contain certain terms and conditions which are different from Tesco Lotus Standard Lease Agreements. The key terms and conditions of the lease agreements can be summarised as follows. A. Summary of the standard key provisions of the head lease agreement and the lease agreements with

respect to group 1 and group 2 leasehold rights to be transferred in 6 locations (Samui, Pitsanulok, Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena).

Lessee’s obligations Lessee shall be responsible for the land and building tax and municipal tax relating to the lease of land.

Lessee allows lessors or their representative to inspect the leased land and constructions thereon during lessee’s operating hours, provided that lessors give lessee at least 3 (three) days advance notice.

Lessors' obligations Lessors shall be responsible for income tax, property tax or any other tax (apart from the taxes for which lessee is responsible to pay under this agreement) arising from the lease of the leased land.

Lessors must deliver a whole piece of the leased land free of encumbrances.

Lessors shall not divide the title deed of the leased land.

Lessors shall not create any encumbrance including any mortgage on the leased land or any part thereof, unless lessee gives prior written consent. If lessee does not consent, it shall notify its reasonable reasons to lessors in writing.

Renewal of lease period Lessors agree that lessee shall have the right of first offer to lease the land upon termination of the lease term, provided that lessee shall notify lessors of the offer in writing at least 6 (six) months prior to the termination of the lease term. Lessors shall consider lessee’s offer within 3 (three) months from the date of receiving lessee’s offer. If lessors do not agree to lessee’s offer to renew the lease, lessors will not lease the land to any other person that offers less favourable terms than those of lessee.

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Right of first refusal If lessors wish to sell the leased land, they shall notify lessee of their intention to sell and the price at which they wish to sell the leased land in advance. Lessors agree to give lessee the right of first offer to purchase the leased land and shall consider lessee’s offer first.

Lessors agree to not sell the leased land to any other person at the price which is lower and under less favourable terms than those offered by lessee.

Buildings and constructions Lessee has the right to construct any buildings or constructions (“Constructions”) on the leased land or to decorate, add or repair the Constructions on the leased land from the date of registration of the lease.

Lessee has the right to lease out space in the Constructions without prior consent from the lessors.

The application for the project and/or construction, decoration, addition, modification or repair of the Constructions on the leased land to be developed and/or various public utilities in the land shall be done in lessee’s name and at lessee’s expense.

Lessors agree to give consent to and make any documents necessary for lessee’s application for the project and/or construction, decoration, addition, modification or repair of any Constructions on the leased land to be developed and/or various public utilities.

Lessors shall approve the plan for the renovation, repair or construction on the leased land to enable lessee to rapidly receive a permit from the relevant authorities.

All Constructions on the leased land constructed by lessee, including machinery, tools and equipment on the leased land are lessee’s property. Lessee has the right to mortgage, lease or otherwise encumber such property without lessors' consent. Lessors agree to cooperate with and facilitate lessee including to promptly prepare any document to effect such transaction upon lessee’s request at no consideration to be paid to lessors.

Upon expiration or termination of the agreement, lessee shall demolish all Constructions, machinery, tools and equipment located on the leased land and clean the leased land to restore it to the close approximation of its original state and handover the leased land to lessors within the period specified in the lease agreement.

Remarks

The provisions of each of the lease agreements to be transferred may differ in terms of the period within which the Constructions must be demolished and the leased land delivered back to lessors. The period may range from 120 days to 240 days (depending on the provisions of each of the lease agreements to be transferred).

In the event of expiration or early termination of the agreement, including the renewal period (if any), if lessee fails to demolish and restore the leased land with in the specified period, lessee must compensate lessors at the daily rate equal to the last daily rental rate before the expiration or termination of the agreement until the above obligation is completed.

Remarks

Certain lease agreements fix different rates of compensation or do no clearly specify the rates of compensation for failure to demolish and restore the leased land within the specified period, while some agreements do not clearly specify the rate. For example:

Petchaboon lease agreements fix the rate of compensation at twice the last daily rental rate before the expiration of the agreement.

Amatanakorn lease agreements fix the rate of compensation at three times the last daily rental rate before the expiration or termination of the agreement.

Samui agreements (lease agreement No. 6 which will be further explained in 3.6

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below) fix the rate of compensation at a fixed daily amount without any reference to the last daily rental rate.

Sena agreements (lease agreement No. 1 below) do not fix the rate of compensation in a fixed amount or by reference to the last daily rental rate, but only specify the damages and compensation including the loss of benefit from the date of expiration of the agreement.

Insurance Lessee has the right to take out insurance for the Constructions on the leased land and specify lessee as the beneficiary to insure against any loss or damage to the Constructions, machinery, tools and equipment and property of lessee.

Damage to leased property, termination events and consequences termination

Loss or damage to Constructions In the event of loss or damage to lessee’s Constructions whether in whole or in part due to fire or any force majeure event, such that lessee considers that it can no longer operate its business in accordance with the purpose of the lease agreement, lessee may elect to assign the lease to any person and/or juristic person to operate any business on the leased land without lessors' consent, or terminate the agreement by giving lessors at least 30 days’ advance notice. In each case, lessee shall no longer be obligated to pay the rental or any other obligations under the agreement and lessors shall not have the right to claim any compensation from lessee.

� If that lessee exercises its right to assign the lease, lessors shall enter into a new lease agreement with the assignee to replace this agreement, which shall be in accordance with the rights and obligations and the terms and conditions under this agreement. Lessors shall not demand any compensation from lessee or the assignee for the assignment.

� If lessee exercises its right to terminate, lessors agree to return the annual rental to lessee in the amount proportionate to the remaining period of the lease in that year within 15 (fifteen) days from the date on which lessee’s removal of property, cleaning and restoration of the leased land is completed.

Remarks

The terms relating to the return of annual rental in the event of loss or damage to the Constructions of lessee due to fire or force majeure event under some of the transferred lease agreements vary. For example:

� Both lease agreements in Petchaboon project and the lease agreement in Sena (No. 2 as will be further described below) do not stipulate that lessors must return the annual rental.

� Under the lease agreements in Pitsanulok project, lessors agree to return the advance payment to lessee (in addition to the annual rental which lessors agree to return to lessee as stipulated in Tesco Lotus Standard Lease Agreement).

� Amatanakorn lease agreements provide that if lessee assigns or terminates the agreement in the event of loss or damage to lessee’s Constructions due to fire or any force majeure event, lessors agree to return the rental in respect of the remaining years to lessee in a fixed amount per year.

� Sena lease agreements (No. 1 as will be further described below) expressly provide that the rental shall be returned in the amount proportionate to the remaining rental period for that year and that lessors are under no obligation to return the advance payment to lessee.

� In addition, in the event of loss or damage to lessee’s Constructions where:

(1) Lessee wishes to continue operating its business on the leased land, lessee must commence the repair work as soon as practicable to be able to continue operating its business as normal; or

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(2) The loss or damage to the Constructions does not affect lessee's business operation such that it can no longer operate its business in accordance with the purpose of the lease agreement, lessee shall not be entitled to terminate the lease agreement and must promptly repair the Constructions to be able to continue operating its business as normal.

If the event of (1) or (2) above, lessee and lessors agree that the agreement shall be extended for a period equal to the length of time used by lessee to complete the repair of the Constructions, provided that such period shall not exceed 12 months from the date of loss or damage. A new agreement is not required to be entered into and the rental for the extended period shall be equal to the rate for the 30th year of the rental period calculated on a monthly basis, unless lessee notifies lessors that it does not wish to extend the rental period. During the repair of the Constructions, lessee still has the obligation to pay the rental under this agreement.

Remarks

Sena lease agreements (No. 1 as will be further described below) provide that the repair of the Constructions shall be completed within 6 months from the date of loss or damage. Furthermore, the calculation of the rental for the extended rental period is not determined by the rental for the 30th year but is subject to an increase in accordance with the terms of the agreement (at the rate of 10 per cent of the rental rate at the time). Therefore, if the agreement is extended due to the reasons stated above, the rental rate for the extended rental period will increase at the rate of 10 per cent of the rental rate for the 30th year. Other provisions relating to the cases as described above are in line with Tesco Lotus Standard Lease Agreement.

Expropriation

If the leased land or any part thereof is expropriated by law and such expropriation affects the operation of lessee such that lessee can no longer operate its business on the land, lessee has the right to terminate the agreement and lessors shall have no right to demand any compensation from lessee.

In such case, lessors agree to return the advance payment in the amount proportionate to the remaining period of the lease and the annual rental in the amount proportionate to the remaining period of the lease in that year and lessee shall be entitled to compensation for all Constructions built by lessee on the leased property.

Remarks

Provisions relating to the return of advance payment and annual rental in certain lease agreements to be transferred vary in the event of expropriation of land. For example:

� Samui lease agreement (No. 6 as will be further described below) and Lamlukka Klong 6 lease agreements do not stipulate that lessor must return the advance payment.

� Sena lease agreement (No. 1 as will be further described below) provides that lessor shall return the annual rental and advance payment to lessee. However, the advance payment to be returned shall be calculated in a specified percentage from the rental which varies according to the period of the rental, and not proportionate to the remaining lease period (details appear in (b) Summary of the terms and conditions of the lease agreements to be transferred which differ from Tesco Lotus Standard Lease Agreements in respect of Sena (lease agreement No. 1 as will be further described below)).

� Sena lease agreement (No. 2 as will be further described below) provides that the advance payment shall be returned in an amount proportionate to the remaining lease period, but shall not exceed the amount of compensation that lessor received from government authority. There is no provision requiring lessor to return the annual rental.

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� Restriction on business operation

If a town planning law, environmental law or any other law, rule or regulation prohibits or restricts the use of land in the area or the operation of a business in the area in which lessee is operating, which affects the operation of lessee such that lessee can no longer operate its business on the leased land, lessee has the right to terminate the agreement and lessors shall not be entitled to claim any compensation from lessee.

In such case, lessors agree to return the annual rental to lessee in the amount proportionate to the remaining lease period in that year within 30 (thirty) days from the date on which lessee notifies to lessors of the termination.

Remarks

Provisions relating to the return of annual rental in certain lease agreements to be transferred vary in the event of the lessee’s inability to operate business due to legal restriction on business operation. For example:

� Pitsanulok lease agreements provide that lessors agree to return the advance payment to lessee as well (in addition to the annual rental that lessors agree to return to lessee as prescribed in Tesco Lotus Standard Lease Agreement).

� Amatanakorn lease agreements provide that lessors agree to return the advance payment and annual rental to lessee in a fixed amount per year.

� Sena lease agreement (No. 1 as will be further described below) expressly provides that lessors do not be obligated to return the advance payment to lessee.

� Sena lease agreement (No. 2 as will be further described below) does not provide that lessors must return the advance payment and annual rental.

Lessors’ breach

If lessors breach any provision or representation in the lease agreement and lessee has notified lessors in writing to remedy the breach within 60 (sixty) days but the breach still continues, lessee has the right to terminate the lease agreement and/or take legal proceedings to compel compliance with the agreement and/or claim compensation which arose due to the breach or termination of this agreement. The compensation shall include the value of the Constructions at the time, cost of demolition of Constructions, cost of removing machinery, tools and equipment of lessee, cleaning cost and land restoration cost.

In the above case, if lessee exercises the right to terminate the agreement, lessors agree to return the advance payment to lessee in the amount proportionate to the remaining period of the lease and the annual rental in the amount proportionate to the remaining lease period in that year within 15 (fifteen) days from the date on which lessee notifies lessors of the termination in writing.

Remarks

� Sena lease agreement (No. 1 as will be further described below) does not provide that lessors must return the advance payment and annual rental to lessee.

� Sena lease agreement (No. 2 as will be further described below) provides that lessors agree to return the advance payment to lessee in the amount proportionate to the remaining lease period but does not provide that lessors must return the annual rental to lessee.

Lessee’s breach

� If lessee has not paid rental for at least 3 months and lessee does not remedy the breach within 60 days from the date of receiving the notice from lessors, lessors shall be entitled to claim the outstanding rental plus interest thereon from lessee. Lessors shall not be entitled to claim any other compensation.

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Remarks

� The provisions in Sena lease agreement (No. 1 as will be further described below) relating to this matter differ from the standard provisions in Tesco Lotus Standard Lease Agreement (as detailed in (B) Summary of key terms under the head lease agreements (as different from the standard key provisions) in respect of Sena (No. 1 as will be further described below).

B. Summary of key terms under the head lease agreements of group 1 and group 2 leasehold rights

(as different from the standard key provisions) for Samui, Pitsanulok, Amatanakorn, Petchaboon, Lamlukka Klong 6 and Sena

1. Samui 1.1 Agreement 1

Lessor Mr. Karoon Boromthanarattana

Leased property Land under title deed no. 23103, land no. 10, with a total area of 2 ngan and 7.4 square wah, located at Bohphut Sub-district, Koh Samui District, Suratthani Province.

Material terms and conditions (as different from the standard key provisions)

Lease term

� 30 years from the date of registration of lease, i.e. until 29 August 2035

Assignment

� Lessee may assign the lease to any person without the lessor’s consent. Lessor agrees to cooperate with and facilitate such assignment including by promptly executing any documents to effect the assignment upon lessee’s request.

� Lessor warrants that lessor will not assign his rights under this lease agreement or title to the leased land, whether in whole or in part, to any person, without the lessee's written consent. If the lessee gives consent to the assignment, lessor shall procure the assignee’s consent to comply with the representations, rights and duties of lessor under this lease agreement in all respects.

Sublease

� Lessee may sub-lease the leased land without lessor’s consent.

Other key terms and conditions

� During the lease term, lessor agrees that lessee, lessee’s employees, customers and guests may use the private road to which the lessor has title and which is connected to the leased land at no charge, provided that lessee shall keep it in good condition and suitable for use for the duration of the lease at lessee’s own expense.

If the land on which the private road is located is leased out or transferred, lessor shall procure that the lessee or the transferee consent to comply with the above representation and obligation of lessor and lessor shall deliver evidence of such consent to lessee.

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1.2 Agreement 2

Lessors (1) Mr. Karoon Boromthanarattana

(2) Mrs. Juree Boromthanarattana

(3) Miss Duangrudee Boromthanarattana

Leased property Land under title deed no. 27509, land no. 33, with a total area of 3 Rai, 2 ngan and 13.6 square wah, located at Bohphut Sub-district, Koh Samui District, Suratthani Province.


Lease term

� Same as Agreement 1 above.

Assignment


Sublease




1.3 Agreement 3



(3) Miss Metta Boromthanarattana



Lease term


Assignment


Sublease




1.4 Agreement 4



(3) Mr. Vacharapong Boromthanarattana

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Lease term


Assignment


Sublease




1.5 Agreement 5



(3) Mr. Kanith Boromthanarattana



Lease term


Assignment


Sublease




1.6 Agreement 6

Lessors (1) Mrs. Chobjit Sivadejathep and Mr. Jakkrit Sivadejathep

(2) Mrs. Chobjit Sivadejathep and Mr. Rittirong Sivadejathep

Leased property Land under title deed no. 34113, land no. 53, with a total area of 5 Rai and 58.3 square wah, located at Bohphut Sub-district, Koh Samui District, Suratthani Province.


Lease term

� 25 years from the date of registration of lease, i.e. 29 August 2030.

Assignment

� Lessee shall not assign the lease to any person, except its affiliate as specified in the lease agreement, in which case lessors' consent is not required. However, if lessee wishes to assign the lease to any other person, lessors' prior consent

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shall be required.

� Lessors warrant that, except for the transfer of title to the leased land as inheritance to the lessors’ heir through succession, lessors shall not assign the rights under this lease agreement or title to the leased land to any person, unless lessee's written consent is obtained.

Sublease

� Lessee may sub-lease the land without lessors’ consent, provided that the duration of the sub-lease shall not exceed the lease term under this lease agreement and the lessee shall still be deemed the lessee under the lease by the lessor.


� If the main purpose of lessee's use of the leased land is unlawful or against public order or good morale of the people, lessors shall be entitled to terminate this agreement. In the event of termination, lessors are under no obligation to return the advance payment and the remaining rental (the rental is divided into 7 instalments and the last instalment covers the period until 2012) ("Remaining Rental"), which has already been paid by lessee.

� In the event of loss or damage to lessee's Constructions, whether in whole or in part, due to fire or any force majeure event which occurs during year 1 to year 7 of the lease (the lease is currently at year 6) and lessee exercises the right to terminate the agreement, lessee shall not be obligated to pay the Remaining Rental which has not been paid to lessors and lessors agree to return the Remaining Rental which has been paid in the amount proportionate to the remaining lease period in that year within 15 days from the date of lessee's complete removal of property and restoration of land.

� In the event of loss or damage to lessee's Constructions, whether in whole or in part, due to fire or any force majeure event and lessee wishes to continue business on the leased land, lessee shall promptly restore the Constructions within 180 days from the date of loss or damage to lessee's Constructions. If lessee does not complete the restoration within the specified period, lessors shall be entitled to terminate this agreement without returning the advance payment and Remaining Rental which has been paid to lessee.

� In the event of loss or damage to lessee's Constructions, whether in whole or in part, due to fire or any force majeure event and lessee proceeds to restore the Constructions, lessors agree that the lease period shall be extended for a period equal to the length of time used by lessee to complete the restoration of the Constructions without entering into a new agreement. Lessee shall pay the rental to lessors at a daily rate based on the rate specified in the lease agreement. Such rate shall be used throughout the extended lease period.

� In the event of expropriation of the leased land whether in whole or in part, the terms relating to the return of advance payment and Remaining Rental are similar to those contained in Tesco Lotus Standard Lease Agreement, except for the additional conditions that the amount of advance payment to be returned shall not exceed the amount of compensation that lessors received from a government authority and that if the expropriation of the leased land occurs during year 1 to year 7 of the lease (the lease is currently at year 6), lessee shall not be obligated to pay the Remaining Rental.

� If lessee exercises the right to terminate the land lease agreement whether in whole or in part (as specified in the lease agreement) during year 1 to year 7 of the lease (the lease is currently at year 6) due to the prohibition or restriction on the use of land or business operation in the area where the lessee conducts its business by town planning law, environmental law or any other laws and regulations, lessee shall not be obligated to pay the Remaining Rental in respect of the leased land. Lessee agrees to return the Remaining Rental that has been paid to lessors in the amount proportionate to the remaining lease period in that year within 30 days from the date on which lessee terminates this

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agreement. There is no provision that lessors must return the advance payment.

2. Pitsanulok

Lessor Mr. Supoth Vijitviengrattana

Leased property Land under title deed no. 140047, land no. 223, with a total area of 2 ngan and 59.5 square wah, located at Aranyik Sub-district, Muang Pitsanulok District, Pitsanulok Province.


Lease term

� 30 years from 30 December 2005 until 29 December 2035

Assignment

� Lessee may assign the lease to any person without the lessor’s consent. Lessor agrees to cooperate with and facilitate such assignment, including by promptly executing any documents to effect the assignment upon lessee’s request at no cost to lessee. The assignee shall not use the leased land for illegal purposes or in any manner conflicting with public order or good morale of the people and shall not cause damage to lessor’s business located on the land under title deed no. 56857, which is not part of the leased land.

� Lessor warrants that lessor shall not assign his rights under this lease or title to the leased land to any person. In the event of transfer of title to the leased land or if lessee gives consent to the transfer, lessor shall procure the assignee’s consent to comply with the representations, rights and duties of lessor under this lease agreement in all respects.

Sublease

� Lessee may sub-lease the leased land without lessor’s consent.


- None-

3. Amatanakorn

Lessor Amata Corporation Public Company Limited

Leased property Land under title deed no. 156531, land no. 1855, with a total area of 45 rai, 1 ngan and 35.6 square wah, located at Klongtumru Sub-district, Muang Chonburi District, Chonburi Province.


Lease term

� 30 years from 21 October 2009 until 20 October 2039

Assignment

� Lessee may assign the lease to any person without the lessor’s consent. Lessor agrees to cooperate with and facilitate such assignment, including by promptly executing any documents to effect the assignment upon lessee’s request at no cost to lessee.

� Lessor warrants that lessor shall not assign his rights under this lease or title to the leased land to any person except its affiliate unless lessee's prior consent is obtained. In the event of transfer of title to the leased land or if lessee gives consent to the transfer, lessor shall procure the assignee’s consent to comply with the representations, rights and duties of lessor under this lease agreement in all respects.

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Sublease

� Lessee may sub-lease not more than 10% of the leased land without lessor’s consent.


� The terms relating to the right of first refusal to purchase the leased land are in line with the standard provisions in Tesco Lotus Standard Lease Agreement except that this agreement does not contain the terms which provide that "lessors agree not to sell the leased land to any other person at a price which is lower and under less favourable terms to lessors than those offered by lessee".

� The terms relating to lessee's obligation to demolish Constructions is in line with the standard provisions in Tesco Lotus Standard Lease Agreement except for the terms relating to lessee's liability for the failure to complete the demolition on the Constructions within the specific period. In this agreement, lessee must compensate lessors at a rate equal to three times the daily rental rate based on the last daily rental rate.

� Lessee shall not construct any commercial building on the leased land.

� Lessee shall pay for all the service charges that Amatanakorn City Industrial Estate collects from business operators in Amatanakorn City Industrial Estate, as detailed in the schedule to the lease agreement.

� Lessor agrees and consents that lessee may build a road on the land under title deed number 31078 and/or 56383 as detailed in the map attached to the lease agreement, to connect the roads in Amatanakorn City Industrial Estate, which belong to lessor, with the road to be built by lessee, for no consideration to lessor. Lessee shall bear the costs of building the road. The construction of the road has been completed and lessor will register the encumbrance in real property in favour of the Fund on the date of registering the transfer of the lease.

4. Petchaboon 4.1 Agreement 1

Lessor 1. Ms. Patcharaporn Petcharaburanin

2. Mr. Chaiyos Petcharaburanin

Leased property Land under title deed no. 102347, land no. 711, with a total area of 30 rai, located at Sa Diang Sub-district, Muang Petchaboon District, Petchaboon Province


Lease term

� 30 years from 23 August 2007 until 22 August 2037. The lease shall be automatically renewed without the need to enter into a new lease agreement until 8 February 2538.

Assignment

� Lessee shall not assign the lease to any person, except its affiliate as specified in the lease agreement. Lessee's assignment of the lease to any other person requires prior consent from lessors.

� Lessors warrant that, except for the transfer of title to the leased land lessors shall not assign the rights under this lease or title to the leased land, whether in whole or in part, to any person, unless lessee's prior written consent is obtained. In the event of transfer of title to the leased land to lessors' heir through succession, or if lessee gives consent to the transfer in any other circumstance, lessors agree to procure the assignee’s consent to comply with

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the representations, rights and duties of lessors under this lease agreement in all respects.

Sublease

� Lessee may sub-lease not more than 30% of the leased land without lessors’ consent. The sub-lessee shall comply with the terms of the lease agreement.


� The right of first refusal to purchase the leased land is in line with the provisions in Tesco Lotus Standard Lease Agreement except that this agreement does not contain the terms which provide that "lessors agree not to sell the leased land to any other person at the price which is lower and under less favourable terms to lessors than those offered by lessee".

� The terms relating to lessee's obligation to demolish Constructions is in line with the standard provisions in Tesco Lotus Standard Lease Agreement except for the terms relating to lessee's liability for the failure to complete the demolition on the Constructions within the specific period. In this agreement, lessee must compensate lessors at the rate equal to twice the daily rental rate based on the last daily rental rate.

� There is no provision in this agreement which gives lessee the right to terminate the agreement if the leased property is damaged.

� The provisions relating to the consequences of default or termination event are in line with the standard provisions in Tesco Lotus Standard Lease Agreement except for the provision relating to advance payment which provides that lessors are under no obligation to return the advance payment to lessee.

� The provisions relating to lessors' breach of the lease agreement are in line with the standard provisions except for the provision relating to advance payment which provides that lessors are under no obligation to return the advance payment to lessee.

4.2 Agreement 2

Lessor 1. Ms. Patcharaporn Petcharaburanin

2. Mr. Chaiyos Petcharaburanin

Leased property (1) Land under title deed no. 2158, land no. 246, with a total area of 10 rai 14 ngan 50.40 square wah located at Sa Diang Sub-district, Muang Petchaboon District, Petchaboon Province;

(2) Land under title deed no. 4356, land no. 256 with a total area of 2 rai 2 ngan 30 square wah located at Sa Diang Sub-district, Muang Petchaboon District, Petchaboon Province;

(3) Land under title deed no. 14849, land no. 221 with a total area of 2 ngan, located at Sa Diang Sub-district, Muang Petchaboon District, Petchaboon Province


Lease term

� 30 years from 9 February 2008 until 8 February 2038

Assignment


Sublease


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� Same as Agreement 1 above; and

� If Agreement 1 or this agreement is terminated for whatever reason, lessors and lessee agree that this agreement or Agreement 1 shall be immediately terminated.

5. Lamlukka Klong 6

Lessor Namchai Asset Development Co., Ltd.

Leased property Land under title deed no. 128806 (certain part), land no. 2200, with a total area of 33 rai and 1 ngan, located at Bungkumproy Sub-district, Lamlukka District, Patumthani Province.


Lease term

� 30 years from 15 May 2007 until 14 May 2037

Assignment

� Lessee shall not assign the lease to any person, except its affiliate as specified in the lease agreement.

� Lessor warrants that, except for the transfer of title to the leased land to its affiliate as specified in the lease agreement or the transfer to the property funds for public offering set up by lessor, lessors shall not assign the rights under this lease or title to the leased land, whether in whole or in part, to any person, unless lessee's written consent is obtained.

Sublease

� Lessee may sub-lease not more than 20% of the leased land without lessor’s consent, provided that the sub-lessee shall not use the leased land contrary to the objective of the lease and lessee shall be responsible for the expenses for changing the registration of the lease.


� The right of first refusal to purchase the leased land is in line with the standard provisions in Tesco Lotus Standard Lease Agreement except that this agreement does not contain the terms which provide that "lessors agree not to sell the leased land to any other person at the price which is lower and under less favourable terms to lessors than those offered by lessee".

� Lessor shall not create any security over the leased land or part thereof whether by creating a mortgage or any other encumbrances (except for a mortgage not exceeding 50% (fifty percent) of the assessed value of the leased land as assessed by the financial institution taking the mortgage at the time of creating the mortgage) without lessee's prior written consent.

� Lessor agrees to build a road (“New Road”) to connect the leased land with Lamlukka Road in accordance with the plan attached to the lease agreement at lessor’s own expense. The New Road shall be used as entrance and exit for the leased land as provided in the lease agreement. The construction of the New Road has been completed and the New Road is being used as entrance and exit for the leased land but not as the main entrance and exit for Lamlukka Klong 6 project.

Lessor agrees to allow lessee and its customers to use the New Road to enter and exit the leased land to entitle lessee and its customers to use the New Road with other persons throughout the lease term.

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6. Sena 6.1 Agreement 1

Lessor Mrs. Suwilai Kittiruangthong

Leased property Land under title deeds no. 25177 and no. 590, land nos. 568 and 77/237, with a total area of 2 rai, 2 ngan and 55 square wah, located at Bangnomko Sub-district, Sena District, Ayudhya Province.


Lease term

� 30 years from 4 April 2008 until 3 April 2038.

Assignment

� Lessee shall not assign the lease to any person, except its affiliate as specified in the lease agreement. Lessee's assignment of the lease to any other person requires prior consent from lessors.

� Lessor warrants that lessor shall not assign the rights under this lease or title to the leased land, whether in whole or in part, to any person, unless lessee's prior written consent is obtained (except for the transfer of title to the leased land as inheritance to lessor's heir through succession, which does not require lessee's prior consent).

Sublease

� Lessee may sub-lease the leased land without lessors’ consent.


� The right of first refusal to purchase the leased land is in line with the standard provisions in Tesco Lotus Standard Lease Agreement except that this agreement does not contain the terms which provide that "lessors agree not to sell the leased land to any other person at the price which is lower and under less favourable terms to lessors than those offered by lessee".

� The terms relating to lessee's obligation to demolish Constructions is in line with the standard provisions in Tesco Lotus Standard Lease Agreement except for the following terms:

(1) in clearing the leased land to hand back to lessor, lessee shall not excavate any soil from the leased land; and

(2) relating to lessee's liability for the failure to complete the demolition on the Constructions within the specific period, in this agreement, lessee must pay compensation and damages for any loss of opportunity to lessor from the date of termination of this agreement until the demolition is completed. The amount of damages is not fixed nor referenced to the daily rental rate.

� The terms relating to expropriation of the leased land and lessee's termination of the agreement are in line with Tesco Lotus Standard Lease Agreement, except for the terms relating to advance payment. In Tesco Lotus Standard Lease Agreement, the advance payment must be paid in the amount proportionate to the remaining lease period. However, this lease agreement provides as follows:

(1) year 1 -5 of the lease : the advance payment must be returned in the amount proportionate to the remaining period of the lease

(2) year 6 – 15 of the lease : the advance payment must be returned at the rate of 80% of the remaining period of the lease

(3) year 16 – 25 of the lease: the advance payment must be returned at the rate of 60% of the remaining period of the lease

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(4) from year 26 onwards until expiration of the lease : lessor does not need to return the advance payment to lessee.

In addition, the following terms relating to expropriation of the leased land are not provided in Tesco Lotus Standard Lease Agreement. If one or more plots of the adjacent land is expropriated and the expropriation affects lessee’s operations such that lessee can no longer operate its business in accordance with the objective of this agreement, lessee shall be entitled to terminate the agreement.

� The terms relating to lessee’s breach are in line with Tesco Lotus Standard Lease Agreement, except for the additional terms that lessors shall be entitled to terminate the agreement and forfeit all amounts of the advance payment and annual rental that have been paid by lessee and shall be entitled to take legal action to claim the unpaid rental and any compensation from lessee.

6.2 Agreement 2

Lessor (1) Mrs. Boonrod Sa-nguansub

(2) Miss Boonruan Sittipoom

(3) Miss Juree Sittipoom

(4) Mr. Saroj Sittipoom

(5) Mr. Opas Sittipoom

(6) Mrs. Noppamas Kumnerdkoon

(7) Mr. Wipak Sittipoom

Leased property Land under title deed no. 591, land no. 81, with a total area of 6 rai, 3 ngan and 71 square wah, located at Bangnomko Sub-district, Sena District (Sena Klang), Ayudhya Province.


Lease term

� 30 years from 4 April 2008 until 3 April 2038.

Assignment


� Lessors warrant that lessors shall not assign the rights under this lease or title to the leased land, whether in whole or in part, to any person, unless lessee's prior written consent is obtained. If lessor gives consent to the transfer, lessor agrees to procure the assignee’s consent to comply with the representations, rights and duties of lessor under this lease agreement in all respects.

Sublease



� The terms relating to the right of first refusal to purchase the leased land are the same as those contained in Agreement 1 above.

� If one or more plots of the adjacent land is expropriated and the expropriation affects lessee’s operations such that lessee can no longer operate its business in accordance with the objective of this agreement, lessee shall be entitled to terminate the agreement.

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C. Summary of key terms under Rama I lease agreement

The assignment of Rama I lease agreement will be done either by transferring the lease from the Sponsor to the Fund or by terminating the existing lease agreement between Tesco Lotus and lessor and the Fund will enter into a new lease agreement with lessor. The Management Company expects that the lease agreement to be transferred to, or a new lease agreement to be entered into by, the Fund would substantially have the same terms as those of the existing lease agreement between Tesco Lotus and the lessor which are summarised as follows.

Lessor Crown Property Bureau

Leased property Land under title deed no. 2052 (certain part), land no. 543, with a total area of 12 rai, 2 ngan and 57.07 square wah, located at Wang Mai Sub-district, Pathumwan District, Bangkok

Remarks

The lease agreement dated 21 December 2001 provides that the leased land includes land under title deeds nos. 415, 416, 417, 418 and 419, as it is uncertain on the date of signing the agreement which plot of land will be leased out. At the moment, lessee has registered the leased only in respect of the land under title deed no. 2052 (certain part). Land under title deeds nos. 415, 416, 417, 418 and 419 is being used as a public road. Lessee still uses the land but the land no longer forms part of the leased land.

Lease term 30 years from 12 December 2004 until 11 December 2034.

Renewal of lease period � Lessor agrees that lessee shall have the right of first offer to lease the land upon termination of the lease term, provided that lessee shall notify lessor of the offer in writing at least 6 (six) months prior to the termination of the lease term. In that case, lessee and lessor shall re-negotiate the terms of the lease agreement.

� If lessor does not agree to lessee’s offer to renew the lease, lessor will not lease the land to any other person that offers less favourable terms than those of lessee.

Assignment � There is no provision on assignment in normal circumstances. Therefore, under the Civil and Commercial Code, lessee cannot assign the lease, unless otherwise agreed with lessor or lessor’s prior consent is obtained.

� However, the lease agreement provides that lessee may assign the lease in the event of loss or damage to the buildings and/or constructions on the leased land, provided lessor’s prior consent is obtained (as detailed under section “Damage to leased property, termination events and consequences termination” below).

Sublease � Lessee may sub-lease not more than 30% of the leased land under the terms and conditions of this agreement without lessor’s consent. However, the name of the sub-lessee must be notified and a copy of the sub-lease agreement provided to lessor within 15 days from the date of the sub-lease.

� In the event of loss due to fire or any force majeure event, lessee may sub-lease all of the leased land, provided lessor’s prior consent is obtained (as detailed under section “Damage to leased property, termination events and consequences termination” below).

Lessee’s obligations � Lessee shall be responsible for the land and building tax and municipal tax relating to the lease of land from the date of the lease throughout the period of the lease.

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� Lessee shall not encumber the lease with any person unless lessor’s prior consent is obtained (not to be unreasonably withheld).

� Lessee shall allow existing lessees who reside on the land adjacent to the north side of the leased land (with an area of approximately 60 square wah) and residents on the land opposite Nang Hong canal and their agents to use the entrance and exit on the leased land as the path to Bantadtong Road for no consideration.

Lessor’s obligation � Lessor shall procure that the leased land is free of encumbrances and trespasses (condition precedent for registration of the leased land).

� If any person takes legal action to claim any rights in the leased land or to disturb the occupation of the leased land, lessor shall promptly take action to eliminate such legal action at lessor’s own expense. If lessor does not take such action or is unable to take such action, it shall be deemed that lessor is in breach of this agreement.

� Throughout the lease term until the lease agreement terminates, if lessor is able to procure the relocation of existing lessees from the land adjacent to the leased land, lessor agrees to lease out such land to lessee or allow lessee to use such land as part of the leased land until the lease agreement terminates for no consideration.

Buildings and constructions � Upon completion of the construction, lessor agrees that all buildings and constructions on the leased land, including machinery, tools and equipment on the leased land are lessor’s property and lessor does not have to pay any consideration to lessee.

� If lessee wishes to amend the construction plan which make it different from what has been approved, lessee shall obtain lessor’s prior consent. Lessor shall not refuse to give consent and shall give consent promptly, provided that the amended construction plan is not contrary to law, regulations or bylaws.

� Upon termination of the lease agreement, lessee agrees that various systems including public utility system, machinery, tools and equipment specified in the annex to the lease agreement shall become lessor’s property and lessor does not have to pay any consideration to lessee.

� Lessee may lease out all or part of the spaces in the buildings.

Insurance � Throughout the lease term, lessee agrees to take out insurance for the buildings and constructions with the amount of coverage which is appropriate for the value of the insured property or the insured event. Lessee shall pay the insurance premium and lessor shall be the beneficiary. Lessor shall specify the insurance company except where the insurance company named by lessor proposed higher insurance premium than the insurance company proposed by lessee.

� In the event of loss and lessor has been compensated by the insurance company, if lessee wishes to conduct any repair or rebuild the buildings and constructions, lessor shall deliver the insurance money received from the insurance company to lessee in accordance with the instalments specified in the employment agreement between lessee and construction company within 7 days from the date on which lessor receives lessee’s notice.

� If lessee does not wish to continue business on the leased land after the loss occurred to the buildings and constructions, lessor agrees to deliver the insurance money received from the insurance company to lessee in the amount proportionate to the remaining lease period within 7 days from the date on which lessor receives written notice from lessee.

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Damage to leased property, termination events and consequences termination

� In the event of additional construction or modification to the buildings under this agreement, if any person and/or property suffers damage and/or any bylaw is breached, leading to a fine or order for demolition, lessee agrees to be solely responsible for the expenses and fine. If lessor has to pay the fine or incur any expenses in connection therewith, lessee agrees to reimburse the full amount to lessor.

� In the event of loss and lessee wishes to conduct any repair or rebuild the buildings, if lessee does not complete the repair or construction within reasonable period as mutually agreed between lessee and lessor, lessor shall be entitled to terminate this agreement regardless of the remaining period of the lease.

� In the event of loss or damage to buildings and/or constructions located on the leased land whether in whole or in part due to fire or any force majeure event, lessee shall notify lessor whether it wishes to continue its business.

If lessee wishes to continue its business, lessee shall promptly repair the buildings and constructions to enable it to resume business. The repair shall be completed within reasonable period. In such case, the lease period shall be extended for a period equal to the length of time used to repair the buildings and/or constructions but shall not exceed 12 months.

If lessee does not wish to continue its business due to the loss caused by fire or any force majeure event, lessee shall be entitled to the following:

(1) assign the lease to any person and/or juristic person or sublease the entire plot of land with lessor’s prior consent. Lessor shall not unreasonably withhold consent. In the event of assignment, lessor and the assignee shall enter into a new lease agreement to replace this lease agreement, which shall be in accordance with the rights, duties, terms and conditions under this agreement. There shall be no consideration for the assignment to be paid by lessee or the assignee; or

(2) terminate this agreement by giving lessor at least 30 days advance notice and lessee shall no longer be obligated to pay the rental. If lessee exercises the right to terminate the agreement under this clause, lessor agrees to return the annual rental paid by lessee in the amount proportionate to the remaining lease period in that year within 15 days from the date on which lessee hands back the leased land to lessor.

� If the leased land is expropriated, whether in whole or in part, and as a result of the expropriation lessee can no longer operate business, lessee shall be entitled to terminate the agreement. In such case, lessor shall pay compensation for the expropriation in accordance with the calculation method specified in this agreement and lessor agrees to return the annual rental that has been paid for the year in which the agreement is terminated in the amount proportionate to the remaining lease period in that year.

If part of the leased land is expropriated, which does not affect lessee’s operation such that lessee can no longer operate business, lessee shall not be entitled to terminate this agreement. This agreement shall continue to be enforceable only in respect of the land which is not expropriated. Lessor shall pay compensation for the expropriation in accordance with the calculation method specified in this agreement and lessor agrees to return the annual rental that has been paid for the year in which the agreement is terminated in the amount proportionate to the area of land which has been expropriated and the remaining lease period in that year. The rental rate shall be reduced to the amount proportionate to the area of land after expropriation.

Lessor shall pay compensation for the expropriation in respect of the buildings and constructions located on the leased land in the amount proportionate to the remaining lease period taking into account the compensation received from government authority.

� If town planning law, environmental law or any other laws, regulations or bylaws have been passed or will be passed to prohibit or restrict the use of land

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or business operation on the leased land, whether in whole or in part, and as a result lessee is unable to continue business, lessee shall be entitled to terminate this agreement.

However, if the restriction or prohibition on business operation applies to only part of the leased land and lessee still wishes to continue business on the land which is not affected by the restriction or prohibition, lessee shall be entitled to terminate the lease in respect of part of the leased land by notifying lessor. The rental rate after such terminate shall be reduced in the amount proportionate to the area of land in respect of which the lease has been terminated.

� Upon expiration or termination of this agreement for whatever reason, lessee shall remove the tools, equipment, machinery or any other items from the leased land and constructions thereon. Lessee shall deliver the leased land together with the buildings and constructions to lessor within 180 days from the date of expiration or termination of this agreement.

� In the event of lessor’s breach of any terms or representation in this agreement and lessee has notified lessor to remedy the breach, if lessor fails to remedy the breach within 60 days after the notice, lessee shall be entitled to terminate the agreement and/or take legal action to compel compliance with the agreement and/or claim compensation for any damage suffered as a result of the breach or termination as well as the current value of the constructions and cost of removing lessee’s machinery, tools, equipment and other items on the leased land. In addition, lessor agrees to return the advance payment in the amount proportionate to the remaining lease period and the annual rental in the amount proportionate to the remaining lease period in that year within 15 days from the date of lessee’s notice of termination.

� In the event of lessee’s breach of any terms or representation specified below, which shall be deemed essential terms of the agreement, and which may cause damage to lessor, if lessor fails to remedy the breach within 60 days after lessor has notified lessee, lessee shall be entitled to terminate the agreement and/or take legal action to claim compensation for any damage suffered from lessee’s breach of terms or representation.

(1) Lessee defaults on rental payment for at least 3 months.

(2) Lessee fails to pay tax or any other sum lessee is liable to pay to government authority.

(3) Lessee is insolvent or under absolute receivership and the court has granted an order to approve the debt composition or the court does not grant an order to absolve lessee from bankruptcy or revoke the absolute receivership order within 1 year.

(4) Lessee’s property or business on the leased land is subject to the court order for seizure or attachment and the order is not revoked within 1 year.

(5) Lessee modifies the buildings on the leased land without lessor’s consent, except where lessor unreasonably withholds consent.

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Summary of Operating Lease Agreement

The Fund will lease to the Sponsor the Leased Property. The provisions of each Operating Lease Agreement are the same (subject to any amendments to comply with the provisions of any lease of the land upon which the building the Leased Property is situated).

Term and Renewal The term of the Operating Lease Agreement is ten years (subject to renewal for two further ten year terms). The rent increases such that over the entire length of the Operating Lease Agreement the rent will increase by 10% every third year starting in the fourth year (and then in the seventh year, tenth year, third year of the first extended term, sixth year of the first extended term, etc). If either the Fund or the Sponsor believes (based on an independent valuation) that the rent is no longer substantially in line with the market it may give notice to the other not less than six months before the start of a renewal term. In such case the Fund and the Sponsor shall negotiate in good faith to agree the rent for the renewal term. If the Fund and the Sponsor have not agreed on the rent for a renewal term three months prior to the start of the renewal term they shall procure that a non-binding independent valuation be undertaken. The parties will thereafter negotiate in good faith to agree the rent, however, if the rent is not agreed before the commencement of a renewal term the lease will terminate at the end of then current term. The Fund and the Sponsor may at any time agree in writing the rent for a renewal term.

Rent The rent for each Initial Property is as set out in the schedule to the lease (subject to review on renewal described above).

In addition to the rent, the Sponsor must pay the House and Land Tax applicable to each Leased Property.

The Sponsor's Covenants The Sponsor (as tenant) undertakes to do and refrain from doing certain things in relation to the Leased Property. Such covenants include (among others) to pay all outgoings in respect of the Leased Property, keep the Leased Property in good repair, to redecorate the Leased Property (at such times as the Sponsor deems appropriate), not to make structural alterations to the Leased Property, only use the Leased Property for the permitted uses (including the business carried on by the Sponsor from time to time), keep the Leased Property open for business during the Sponsor's current trading hours, comply with all applicable laws and regulations, comply with the rules applicable to the relevant Shopping Mall, vacate the Leased Property at the end of the term and return the Property in the condition in which it was taken over.

The Fund 's Covenants The Fund also gives certain undertakings in relation to the Leased Properties including (among others) to register the Operating Lease Agreement, to enable the Sponsor to enjoy the Leased Property, to provide assistance (at the Sponsor's cost) with applications for licences and permits, to repair the structure of the Leased Property and/or relevant Initial Property, to provide car parking spaces, to provide trolley bays, to provide access to the Shopping Mall and the loading bay area, to ensure that the trading hours of the Shopping Mall are consistent with those of the Leased Property, not to alter the tenant mix of the Shopping Mall (without the consent of the Sponsor, such consent not to be unreasonably withheld or delayed) and not to allow solicitation of any business similar to that of the Sponsor in the Common Areas.

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Other Rights and Obligations of the Fund and the Sponsor

The Fund and the Sponsor have certain other rights and obligations as set out in the Operating Lease Agreement. Such rights include that the Sponsor shall be allowed to use the Common Areas to distribute leaflets and hold a set number of promotional activities per year and that the Fund must keep the exterior of the Shopping Mall and the Common Areas in good decorative order. The Fund must also use reasonable endeavours to ensure the supply of utilities to the Leased Property and permit the Sponsor to erect signage around the Shopping Mall.

Assignment The Sponsor is not permitted to assign or sublease any part of its interest in the Operating Lease Agreement to another party but may transfer or assign the whole of its interest to another group company of the Sponsor (or a third party with the prior written consent of the Fund, such consent not to be unreasonably withheld or delayed). The Sponsor is however permitted to sublease those parts of the Leased Property available for sublease prior to the date of the Operating Lease Agreement, those parts subleased to Tesco Card Services Limited, any part of the Leased Property capable of being occupied and used as a separate unit or otherwise with the prior written approval of the Fund. The Sponsor may also grant concessions within the Leased Property provided that no lease is created. The Sponsor must notify the Fund of every assignment or sublease of the Leased Property within ten days of such assignment or sublease.

Insurance and Repair or Reinstatement

The Fund is required to take out comprehensive all risks insurance and public liability insurance. If it fails to do so the Sponsor may procure the insurance and demand payment of the premiums from the Fund and if the Fund does not pay within 10 days the Sponsor may set off the amounts against rent due. The Fund is required to repair and/or reinstate any part of the Leased Property of the Shopping Mall damaged or destroyed. The rent shall be suspended or decreased in proportion to the extent by which the Leased Property cannot be used by the Sponsor until the repair and/or reinstatement is complete. If the Leased Property and/or Shopping Mall has not been repaired or reinstated within two years of the damage or destruction occurring, the Sponsor may terminate the Operating Lease Agreement. The Fund is not obliged to repair or reinstate the Leased Property or Shopping Mall if it is prevented from doing so by some defect in the site which would make cost of the reinstatement unacceptable to the Fund or if the Fund is unable to gain access to the site or repair or reinstatement is prevented by any cause beyond the control of the Fund. In addition, if the insurance proceeds received by the Fund (plus any deductable) are less than the cost of repair or reinstatement and the Fund is unable to fund such shortfall from internal cash, the Fund shall use its best efforts to secure additional financing to cover the shortfall (including trying to secure bank debt and/or calling a meeting of Unitholders to propose an increase in capital). If the Fund is unable to secure additional financing the Fund and the Sponsor shall negotiate in good faith to find a mutually acceptable solution provided that the Sponsor shall not be obligated to fund any shortfall. If the Fund and the Sponsor do not agree on a mutually acceptable solution the Sponsor shall have the right to terminate the lease and the Fund shall not be in breach of the lease provided it has complied with its obligations under the lease.

Expropriation If any part of the Leased Property or the Shopping Mall is expropriated and such expropriation adversely affects the Sponsor's business to such an extent that the Sponsor is unable to continue its operations at the Leased Property, the Sponsor may terminate the Operating Lease Agreement. If any part of the Leased Property or the Shopping Mall is expropriated and such expropriation does not adversely affect the Sponsor's business to such an extent that the Sponsor is unable to continue its

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operations at the Leased Property the Sponsor may not terminate the Operating Lease Agreement but the rent shall be reduced pro rata based on the expropriated area.

Events of Default and Termination

If an event of default occurs in relation to the Sponsor then the Fund may re-enter the Leased Property (or any part of it) or give notice to the Sponsor at which point the Operating Lease Agreement will terminate and the term will cease.

If an event of default occurs in relation to the Fund or the Sponsor has the right to terminate the Operating Lease Agreement following damage, destruction or expropriation of the Leased Property and/or Shopping Mall then the Sponsor may terminate the Operating Lease Agreement .

An event of default in relation to a party (the "Defaulting Party") means:

(a) any amount payable by the Defaulting Party under the Operating Lease Agreement is not paid when payable and remains unpaid for 25 Business Days after becoming payable (whether formally demanded or not); or

(b) a breach by the Defaulting Party of any of the covenants by or obligations of the Defaulting Party in the Operating Lease Agreement which if capable of remedy has not been remedied within a reasonable time as specified in a written notice from the other party specifying the breach and requiring its remedy; or

(c) the Defaulting Party being subject in Thailand to any form of bankruptcy, liquidation, receivership, business rehabilitation, administration, arrangement or scheme with creditors, moratorium, or interim or provisional supervision by the court or court appointee, whether in or out of court.

Termination of the Operating Lease Agreement by the Fund or the Sponsor is without prejudice to any rights or claims that may have accrued prior to termination.

Governing law and Arbitration The Operating Lease Agreement is governed by the laws of Thailand and is subject to arbitration under the Arbitration Rules of the Thai Arbitration Institute. The seat of arbitration shall be Bangkok. There shall be three arbitrators. The language of the arbitration shall be Thai. The arbitration and any rulings or awards must be kept confidential except as required by law, regulation, order of the tribunal or agreement of the parties or if the information is already in the public domain (other than as a result of breach of a party's confidentiality obligations).

Summary Of Services Agreement between the Sponsor and the Fund

The Fund will enter into a service agreement with the Sponsor in respect of each of the Properties. The key terms of each service agreement are as follows:

Parties The Fund (as service provider) and the Sponsor (as service recipient)

Term The term of the each service agreement is linked to and concurrent with the term of the lease under which the relevant Operating Lease Agreement.

Scope of Services The Fund shall provide common amenities and services including general administration and management services, common areas, ventilation and air conditioning, cleaning and general maintenance services.

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Service Fees and Maintenance Fees

The service fees are fixed and payable monthly. In addition to the service fees the Sponsor shall pay 70% of the maintenance costs of the following machinery and equipment: air chiller, generator, electrical transformer, MDB (electrical system), waste water treatment, all pumps (CDP, CHP, water booster pump) and Fm200/Vesda.

Governing law and Arbitration Each Service Agreement governed by the laws of Thailand and are subject to arbitration under the Arbitration Rules of the Thai Arbitration Institute. The seat of arbitration shall be Bangkok. There shall be three arbitrators. The language of the Arbitration shall be Thai. The arbitration and any rulings or awards must be kept confidential expect as required by law, regulation, order of the tribunal or agreement of the parties or if the information is already in the public domain (other than as a result of breach of a party's confidentiality obligations).

Summary of Mutual Undertaking Agreement between the Sponsor and the Fund

The Fund and the Sponsor will enter into a mutual undertaking agreement. The key terms of the mutual undertaking agreement are as follows:

Parties The Fund and the Sponsor

Term The term of the mutual undertaking agreement is from completion of the sale by the Sponsor to the Fund of any of the Initial Properties. The mutual undertaking agreement shall terminate immediately and without notice upon expiration or termination of the Property Management Agreement.

Definitions For the purposes of the mutual undertaking agreement:

• a 'shopping mall' is a hypermarket or other retail store or shopping mall having 3,000 sq. m. or more of sales floor area.

• a competing shopping mall is one that is within 500 metres of another shopping mall (if the shopping malls are within the Bangkok metropolitan area) or within two kilometres of another shopping mall (if the shopping mall is elsewhere in Thailand).

Undertakings – right of first refusal

If the Fund wishes to sell, transfer or dispose of any title to land, ownership of buildings or interest in any lease of land or grant a lease to an anchor tenant, it must give notice to the Sponsor of the terms on which the Fund is willing to do so and the Sponsor has the right to accept that offer. The Fund is not permitted to sell, transfer or dispose of the land, building or lease on terms any more favourable to the transferee than those offered to the Sponsor.

This is subject to the rules and regulations governing the Fund 's disposal of assets.

If the Sponsor wishes to sell, transfer or dispose of title to land, its interest in a lease of land (in each case on which there is a shopping mall of greater than 3,000 sq. m.) must give notice to the Fund of the terms on which the Sponsor is willing to do so and the Fund has the right to accept that offer. The Sponsor is not permitted to sell, transfer or dispose of the land, building or lease on terms any more favourable to the transferee than those offered to the Fund.

This is subject to the rules and regulations governing the Fund 's purchase of assets.

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Undertakings – property non-compete

The Sponsor shall not build a competing shopping mall without the prior written consent of the Fund (such consent not to be unreasonably withheld or delayed).

The Fund shall not invest in a shopping mall that competes with a shopping mall owned by the Sponsor or that is owned by the Fund and in respect of which the Sponsor is an anchor tenant without the prior written consent of the Sponsor (such consent not to be unreasonably withheld or delayed).

Undertakings – property manager non-compete

Until the expiration or termination of the Property Management Agreement, the Sponsor shall not and shall procure that its subsidiaries shall not, act as property manager for any property fund whose properties are anchored by shopping malls.

Undertakings – unit lock up The Sponsor shall not, for a period of 180 days from the beginning of the term of the agreement sell, transfer or dispose of all or any of the units in the Fund held by it provided that the Sponsor shall be permitted to sell, transfer or dispose of unit in the Fund (i) to a member of the Sponsor's group, or (iii) with the prior written consent of the Fund.

Undertakings – licence of trade marks, trade names and service names

The Sponsor agrees that it shall, subject to the terms of the licence agreement to be entered into between the Fund and the Sponsor, grant a non-exclusive licence and sub-licence of certain trade marks, trade names and service marks to enable the Fund to use the trade marks "Tesco" and "Lotus" and the two together for the business of the Fund in Thailand but shall not be permitted to use the trade marks to name any mall. Please see Summary of Trademark Licence Agreement between the Sponsor and the Fund for further details.

Governing law and Jurisdiction

The mutual undertaking agreement is governed by the laws of Thailand and the Fund and the Sponsor submit to the non-exclusive jurisdiction of the courts of Thailand.

Summary Of Trade Mark Licence Agreement Between The Sponsor and the Fund

The Sponsor will grant a licence and sub licence (as applicable) to the Fund to use certain trade marks, trade names and service names (namely 'Tesco' and 'Lotus' and the right to use the two together) for the purposes of the business of the Fund in Thailand. The key terms of the trademark licence agreement are as follows:

Parties The Sponsor (as licensor) and the Fund (licensee)

Trade marks, trade names and service marks

The words ''Tesco' and 'Lotus' and the right to use the two together.

Grant The Sponsor will grant a licence and sub licence (as applicable) to, and the Fund will accept the licence and sub licence (as applicable) of, certain trade marks, trade names and service marks (namely 'Tesco' and 'Lotus' and the right to use the two together) for the purposes of the business of the Fund in Thailand (being owning and managing (including leasing certain areas of) Shopping Malls or providing services in respect of Shopping Malls (including marketing the Shopping Malls) or any other business as may be engaged in as specified in the Licensee's fund scheme approved by the SEC) but excluding the right to use the trade marks, trade names or service marks to name any Shopping Mall or any other land or building owned, leased or occupied by the Fund.

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Termination The trade mark licence agreement terminates upon, among other things, the expiration or termination of the Property Management Agreement, in the event that the Sponsor no longer has the right to use the trade mark, trade name or service mark 'Tesco' and in the event that the Sponsor is no longer the anchor tenant in a majority of the shopping malls owned, leased or operated by the Fund.

Territory, non-exclusivity and royalties

The territory of the trade mark licence is limited to Thailand. The trade mark licence is non-exclusive. The licence is royalty free.

Governing law and Jurisdiction

The trade mark licence agreement is governed by the laws of Thailand and the Fund submits to the non-exclusive jurisdiction of the courts of Thailand.