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C o n t e n t s
1ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
3 Our Mission
6 Salient Features of the Fund
8 Property Portfolio
12 Chairman’s Statement
14 Structure of Atrium REIT
15 Board of Directors and Management/ Corporate Directory
16 ProfileofDirectors
17 ProfileofChiefExecutiveOfficer
18 Performance Data
20 StatementofCorporateGovernance
25 Financial Statements •Manager’sReport •StatementbyDirectorsoftheManager •StatutoryDeclaration •Trustee’sReport •IndependentAuditors’ReporttotheUnitholders •StatementofFinancialPosition •StatementofComprehensiveIncome •StatementofChangesinNetAssetValue •StatementofCashFlow •NotestotheFinancialStatements
69 AnalysisofUnitholdings
3ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Our Mission
Year on Year Comparison
Our Achievement in 2010
Distributions For 2010
To maximise profits in order to reward unitholders with a competitive rate of return for their investments through regular and stable distributions and achieving long-term growth in distributions and Net Asset Value per unit.
2010 2009 2008 20071
RM ‘000 RM ‘000 RM ‘000 RM ‘000
Net Income 11,912 8,599 17,112 7,961
Earnings Per Unit (Sen) - realised 8.63 7.06 8.47 6.54
- unrealised 1.15 - 5.58 -
Distribution to Unitholders 10,475 8,465 10,231 7,917
Distribution Per Unit (Sen) 8.60 6.95 8,40 6.50
Asset Under Management 163,000 161,600 161,600 154,800
Number of Properties 4 4 4 4
Occupancy Rate 100% 100% 100% 100%
Net Asset Value Per Unit (RM) 1.05 1.04 1.04 0.98
2010 2009 Variance RM ‘000 RM ‘000 %
Net Income 11,912 8,599 38.5
Earnings Per Unit (Sen) 9.78 7.06 38.5
Distribution to Unitholders 10,475 8,465 23.7
Distribution Per Unit (Sen) 8.60 6.95 23.7
Asset Under Management 163,000 161,600 0.9
Number of Properties 4 4 -
Occupancy Rate 100% 100% -
Net Asset Value Per Unit (RM) 1.05 1.04 1.0
1st Quarter 2.10 sen
2nd Quarter 2.15 sen
3rd Quarter 2.15 sen
4th Quarter2 2.20 sen
1. For the financial period from 2 April 2007 (date of commencement) to 31 December 2007.2. To be paid on 4 March 2011.
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6 ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT TRUST TRUST TRUST
Annual Report 2010Annual Report 2010Annual Report 2010
Salient Features Of The Fund
Nameoffund :
Fundcategory :
Fundtype :
Investmentobjectives :
Fundinvestmentstrategy :
TermoftheTrust :
ApprovedsizeofFund :
Authorisedinvestments :
Financialyearend :
Distributionpolicy :
Borrowinglimitations :
Revaluationpolicy :
Redemptionpolicy :
Minimuminitialinvestment :
Minimumadditionalinvestments :
Investorprofile :
Boardlot :
Quotation :
BursaMalaysiaStockNumber :
Atrium REIT
Real Estate
Growthandincome
Tomaximiseprofitsinordertorewardunitholderswithannualstabledistributionsof
incomeandtoacquirequalityassets to achieve long-termgrowth in theNetAsset
ValueperunitoftheFund
Aimtoachieve theprimaryobjectivesof theFundby implementing investmentand
growth strategies such as organic growth strategies, acquisition strategies and
financingstrategies.
AtriumREITwillcontinueitsoperationuntilsuchtimeasdeterminedbytheTrustee
andtheManagerasprovidedundertheprovisionofClause19oftheTrustDeeddated
20November2006.
121,801,000Units
- Atleast50%ofthetotalassetvalueofAtriumREITmustbeinvestedinrealestates
and/or single purpose companies at all times; and
- Investment in non-real estate related assets and/or cash, deposits and money
marketinstrumentsmustnotexceed25%ofAtriumREIT’stotalassetvalue.
31December
At least 90% of the distributable income ofAtriumREIT shall be distributed semi-
annually or at such other intervals as determined by theManagers in its absolute
discretion,inarrears
Upto50%ofthetotalassetvalueoftheFundatthetimetheborrowingisincurred.
Therealestatesshallberevaluedatleastonceevery(3)yearsfromthedateofthelast
valuation(orsuchothertimesasrequiredundertheSecuritiesCommissionGuidelines
onREITs),oratanytimewheretheTrustee,theManagerortheindependentAuditor
appointedbyAtriumREITreasonablybelievesthattherehasbeenasignificantchange
inthevalueofrealestates.
UnitholdershavenorighttorequesttheFundtorepurchasetheirunitswhiletheunits
arelisted.
Minimumof100units
Multiplesof100units
Suitableforinvestorswhounderstandtherisksrelatedtotherealestateindustryand
expecttobenefitfromtheperiodicdistributionofincomeandlongtermgrowthofthe
Fund.
100unitsperboardlot
Main Board of Bursa Malaysia Securities Bhd
ATRIUM5130
8 ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Property
Address
Title details
Property type
Description
Year of completion
Tenure
Existinguse
Parking spaces
Date of acquisition
Cost of acquisition
Tenant
Occupancy
Lease Period
Majorcapitalexpenditure
Encumbrances
Limitation in title/interest
Latestvaluation
Basisofvaluation
Dateoflastvaluation
Valuer
FairValueadjustment
Netbookvalue
Atrium Shah Alam 1
Property Portfolio
AtriumShahAlam1
Lot1-8,PersiaranJubliPerak,Seksyen22,40300ShahAlam,SelangorDarulEhsan,Malaysia
GRN177482(formerlyknownasH.S.(D)No.80053)forLotNo.38264(formerlyknownasLot
No.P.T.14366),PekanBaruHicom(formerlyknownasMukimofDamansara),DistrictofPetaling,
State of Selangor Darul Ehsan
Industrial
AsinglestoreywarehouseandafourstoreyofficebuildingwithatotalNetLettableAreameasuring
approximately311,736sq.ft.
2005
Freehold
Warehouseandoffice
191carbays,105motorcyclebays&30lorrybays
2April2007
RM57,200,000
ExelProperties(Malaysia)SdnBhd*
100%
5years,expiringon31December2010*
Nil
ThepropertyischargedtoafinancialinstitutiontosecureaShortTermRevolvingCreditfacility
ofRM45million
None
RM62,000,000
Income,costandcomparisonmethods
31December2010
FirstPacificValuersPropertyConsultantsSdnBhd
RM600,000
RM61,400,000
* The DHL Group via one of its subsidiaries, DHL
SupplyChain(Malaysia)SdnBhdhasconfirmedthat
itwillberenewingtherentalforAtriumShahAlam1
for a period of 3 years, commencing on 1 January
2011 and expiring on 31 December 2013. The
renewalisunderDHLSupplyChain(Malaysia)Sdn
BhdasExelGrouphasmergedwithDHLGroup.
9ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Atrium Shah Alam 2Property
Address
Title details
Property type
Description
Year of completion
Tenure
Existinguse
Parking spaces
Date of acquisition
Cost of acquisition
Tenant
Occupancy
Lease Period
Majorcapitalexpenditure
Encumbrances
Limitation in title/interest
Latestvaluation
Basisofvaluation
Dateoflastvaluation
Valuer
FairValueadjustment
Netbookvalue
Atrium Shah Alam 2
Lot7A,PersiaranJubliPerak,Seksyen22,40300ShahAlam,SelangorDarulEhsan,Malaysia
LotNo.P.T.90heldunderH.S.(D)No.188265,PekanBaruHicom(formerlyMukimofDamansara),
DistrictofPetaling,StateofSelangorDarulEhsan
Industrial
A single storeywarehouse and a double storey office buildingwith a total Net LettableArea
measuringapproximately258,702sq.ft.
2004
Freehold
Warehouseandoffice
125carbays,129motorcyclebays&20lorrybays
2April2007
RM49,100,000
CEVALogistics(Malaysia)SdnBhd
100%
3years,expiringon31May2012
Nil
None
None
RM54,500,000
Income,costandcomparisonmethods
31December2010
FirstPacificValuersPropertyConsultantsSdnBhd
RM800,000
RM53,700,000
Property Portfolio
10 ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Atrium Puchong
Property Portfolio
Property
Address
Title details
Property type
Description
Year of completion
Tenure
Existinguse
Parking spaces
Date of acquisition
Cost of acquisition
Tenant
Occupancy
Lease Period
Majorcapitalexpenditure
Encumbrances
Limitation in title/interest
Latestvaluation
Basisofvaluation
Dateoflastvaluation
Valuer
FairValueadjustment
Netbookvalue
Atrium Puchong
No.2 Jalan PPU 1, Taman Perindustrian PuchongUtama, Batu 12½ Jalan Puchong, 47100
Puchong,SelangorDarulEhsan,Malaysia
Lot No. 65108 held under Geran No. 44178, Pekan Puchong Perdana (formerly Mukim of
Petaling),DistrictofPetaling,StateofSelangorDarulEhsan
Industrial
AsinglestoreywarehouseandafourstoreyofficebuildingwithatotalNetLettableAreameasuring
approximately203,994sq.ft.
2002
Freehold
Warehouseandoffice
129carbays,110motorcyclebays&30lorrybays
2April2007
RM38,500,000
DHLSupplyChain(Malaysia)SdnBhd
100%
4years,expiringon18September2014
Nil
None
None
RM38,500,000
Income,costandcomparisonmethod
31December2010
FirstPacificValuersPropertyConsultantsSdnBhd
Nil
RM38,500,000
11ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Atrium RawangProperty
Address
Title details
Property type
Description
Year of completion
Tenure
Existinguse
Parking spaces
Date of acquisition
Cost of acquisition
Tenant
Occupancy
Lease Period
Majorcapitalexpenditure
Encumbrances
Limitation in title/interest
Latestvaluation
Basisofvaluation
Dateoflastvaluation
Valuer
FairValueadjustment
Netbookvalue
AtriumRawang
Lot23,Rawang Integrated IndustrialPark,JalanBatuArang,48000Rawang,SelangorDarul
Ehsan,Malaysia
Geran205542,Lot19007,Section20,TownofRawang(formerlyMukimofRawang),Districtof
Gombak,SelangorDarulEhsan
Industrial
AdoublestoreyofficeandfactorybuildingwithatotalNetLettableAreameasuringapproximately
35,236sq.ft.
2001
Freehold
Factoryandoffice
23carbays,15motorcyclebays&3lorrybays
2April2007
RM10,000,000
UnileverFoods(Malaysia)SdnBhd
100%
10years,expiringon31October2011
Nil
ThepropertyischargedtoafinancialinstitutiontosecureaShortTermRevolvingCreditfacility
ofRM45million
None
RM8,000,000
Income,costandcomparisonmethods
31December2010
FirstPacificValuersPropertyConsultantsSdnBhd
Nil
RM8,000,000
Property Portfolio
Dear UnitholderS
On behalf of the Board of Directors of Atrium REIT Managers Sdn Bhd (“Manager”), I have the pleasure of presenting to you the Annual Report of the Atrium Real Estate Investment Trust (“Atrium REIT” or “Trust”) for the financial year ended 31 December 2010 (“FY2010”).
Chairman’s Statement
12 ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT ATRIUM REAL ESTATE INVESTMENT TRUST TRUST TRUST
Annual Report 2010Annual Report 2010Annual Report 2010
Financial Performance
We are pleased to report that a solid performance wasachieved byAtriumREIT for FY2010. For FY2010,AtriumREIT recorded a 9.14% increase in gross revenues toRM14.170millionascomparedtoRM12.984millionfortheprevious corresponding financial yearended31December2009 (“FY2009”). Correspondingly, Net Income (realised)fortheyearrosetoRM10.512millioncomparedtoRM8.599millionforFY2009,representinganincreaseof22.25%.TheTrust’s financial performance was boosted by revaluationgainsofRM1.400million for itsportfolio,contributing toanincrease in Net Asset Value (“NAV”) from RM1.0378 perunitasat31December2009toRM1.0496perunitasat31December2010.
Distribution to Unitholders
Atrium REIT has consistently demonstrated its ability todeliversustainableandstabledistributableincomesinceitslisting in2007.Wearepleased to report that for thefirst3quartersofFY2010,AtriumREIThasdistributed6.40senperunit.For the4thquarterofFY2010, theBoardofDirectorsof theManager is pleased todeclarea final distributionof2.20senperunit,representingatotaldistributionperunitof
8.60senforFY2010,whichwillbepayableon4March2011.ThedistributableyieldofAtriumREITfor2010isacreditable8.11%basedontheclosingmarketpriceofRM1.06perunitforAtriumREITasat31December2010.
Operations Review
TheleasesforAtriumShahAlam1andAtriumPuchongwhichexpiredduringtheFY2010havebeenrenewed,pendingtheexecutionoftheagreements,forafurthertermof3yearsand4yearsrespectively.Currently,allofAtriumREIT’spropertiesaretenantedbysubsidiariesofMNCs,whomareestablishedmarket leaders in their respective industries, an indicationofthequalityofthetenantsandpropertiesownedbyAtriumREIT.
For FY2010, a revaluation exercise was carried out onAtriumShahAlam1,AtriumShahAlam2,AtriumPuchongand Atrium Rawang by an independent registered valuer,First Pacific Valuers Property Consultants Sdn Bhd (“FirstPacific”)pursuanttoFinancialReportingStandard140whichstatesthatInvestmentPropertieshavetobestated/disclosedatFairValueattheendofeachfinancialyear.FirstPacifichas adopted a combination of valuation methods in theirassessmentsandthevalueshavebeendulyreflectedinthefinancialstatements.
13ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
The proposed acquisition planned for FY2010 did notmaterialize because the valuation of the subject propertybased on the income method by the independent valuerscould not meet the offer price. Prices of industrial land inprimelocationshaveincreasedtremendouslyastheeconomybouncedbackandthestockexchangereachednewhighs,showing signs that the stimulus packages introduced aftertheglobal financial crisishaveworked themselves into thesystem.Consequently,pricesofindustrialpropertiesinprimelocationshavealsoincreasedsignificantlydespitetherentalsremainingstable,makingitdifficulttoacquireyieldaccretiveassets.
The Manager will continue to explore new acquisitionopportunities, with focus on industrial properties thatmeetour investment criteria i.e. located in prime locations withgood infrastructures and tenanted by leading businessesonlongtermleasestoenhancetheassetvalueandincomegrowthoftheTrust.
Economic Overview
Theglobaleconomymadearobustrecoveryinthe1stquarterof 2010 but softened in the subsequent quarters, giventheweakerglobal trade conditionsand the sovereigndebtproblemintheEurozone.However,resilientAsianeconomiescontinuetoprovidestrongsupportasAsiacontinuestoleadglobal growth through their resilient domestic demand asevidenced by the twin economic engines of Asia namelyChinaandIndia.TheIMF’sglobaleconomicgrowthforecastfor 2011 has been revised downward from 4.3% to 4.2%inOctober’sWorld EconomicOutlook (WEO), indicating amoderationingrowthformanycountriesinthenearterm.
InMalaysia,despiteasharprebound in2010following the1.7%contractionin2009,moderationineconomicactivitiesisexpectedtotakeplace,largelyattributedtotheweakeningoftheexternalsectorin1sthalfof2011,asdemandforthecountry’s major exports such as electrical and electronics(E&E)manufacturesbyadvancedeconomiessoften.
Howeverthisisexpectedtobeoffsetbycommoditieswhereprices of crude palm oil and crude oil are anticipated to remainrelativelyfirm.Thedomesticfrontwillcontinuetobesupported by private consumption which has largely beenresponsibleforthecountry’sgrowthsincetheAsianFinancialCrisisinthelate1990s.ThegrowthoftheMalaysianeconomywill be dependent on two major factors, namely the globaleconomicdevelopmentandthestrengthofprivateconsumptioninsupportingdomesticdemand.
Changes to the Board and Management
On behalf of the Board of Directors, I would like to welcomeMr.ChanKumChongandMsChuahKuiPekasthenewChiefExecutiveOfficer and Chief OperatingOfficer of theManagerrespectively.MrChanandMsChuahwerepreviouslytheActingChief Executive Officer and Head, Asset Management of theManagerrespectively,priortothenewappointments.
Appreciation
OnbehalfoftheBoardofDirectorsofAtriumREITManagersSdn Bhd, I would like to thankmy fellow Boardmembersfor their advice and contributions throughout the year, ourtenantsandbusinessassociates,theregulatoryauthorities,investors and unitholders, for their strong support. I wouldalso like to thank the management team for the concerted effortandcontributionin2010andIlookforwardtoanotherfruitful yearaheadwith thecontinuedsupport ofmy fellowBoardmembersandourvaluedstakeholders.
Dato’ Dr Ir Mohamad Khir Bin HarunChairmanAtrium REIT Managers Sdn Bhd21 Febuary 2011
Chairman’s Statement
14 ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
STRUCTURE of Atrium Reit
Management Services
Rental income
Propertymanagementservices
Distributionsin the form ofdividendsand other distributions
BHLB Trustee (the Trustee)
Subject Properties-AtriumShahAlam1-AtriumShahAlam2-AtriumPuchong-AtriumRawang
Atrium REIT Managers(the Manager)
Real estate assets
OtherAuthorisedInvestments
Azmi & Co Building Services(thePropertyManagementCompany)
Management fees
Ownershipofassets(VestedInTrustee)
Propertymanagement
fees
InvestmentinAtrium REIT
Trustee fees
Actsonbehalfof unitholders
Unitholders
The followingdiagram illustrates the structure ofAtriumREITand indicates the relationships betweenAtriumREIT, theManager,theTrustee,thePropertyManagementCompanyandtheunitholders:
14
BOARD OF DIRECTORS
Dato’ Dr Ir Mohamad Khir Bin HarunChairmanandNon-IndependentNon-ExecutiveDirector
Wong Sui EeExecutiveDirector
How Hu SonIndependentNon-ExecutiveDirector
Tor Peng SieIndependentNon-ExecutiveDirector
Soong Kwong HengIndependentNon-ExecutiveDirector
COMPANY SECRETARY
Ng Yen Hoong (Ls 008016) Lim Poh Yen (maicsa 7009745)
MANAGEMENT
Wong Sui EeExecutive Director
Chan Kum ChongChiefExecutiveOfficer
Chuah Kui PekChiefOperatingOfficer
Lee Hooi HoongChiefFinancialOfficer
Corporate Directory
MANAGERAtrium REIT Managers Sdn Bhd (710526-V)Principalplaceofbusiness:36-2,Jalan5/101C,OffJalanKaskasJalanCheras56100KualaLumpurTel:03-91322810 Fax:03-91329810Website:www.atriumreit.com.my
Registered office:Level18,TheGardensNorthTowerMidValleyCity,LingkaranSyedPutra59200KualaLumpurTel:03-22648888Fax:03-22822733,03-22648997
TRUSTEEBHLB Trustees Berhad (313031-A)Principalplaceofbusiness:Level7,WismaAmanahRayaBerhadJalanSemantanDamansaraHeights50490KualaLumpurTel:03-20848888Fax:03-20955473
AUDITORSBDO (AF 0206) Chartered Accountants
PROPERTY MANAGEMENT COMPANY Azmi & Co Building Services Sdn Bhd (475267-U)A9-1-1,JalanAmpangUtama2/2OneAmpangBusinessAvenue68000Ampang,SelangorTel:03-42566868Fax:03-42562266
PRINCIPAL BANKERMalayan Banking Berhad
REGISTRARTricor Investor Services Sdn Bhd (118401-V)Level17,TheGardensNorthTowerMidValleyCity,LingkaranSyedPutra59200KualaLumpurTel:03-22643883Fax:03-22821886
BURSA MALAYSIA STOCK NAME AND CODEATRIUM 5130
Board of Director and Management / Corporate directory
BOARD OF DIRECTORS AND MANAGEMENT OF THE MANAGER
15ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
16 ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Dato’ Dr Ir Mohamad Khir Bin Harun Chairman
Malaysian,aged60,wasappointedtotheBoardon5October2009.Dato’DrIrMohamadKhirobtainedhisBSc(Hons)inElectricalEngineeringfromBrightonPolytechnicin1973,MScinCommunicationsEngineeringfromBrunelUniversity,Londonin1978andPhDinElectricalEngineeringfromUniversityofManchester,UnitedKingdomin1982.Dato’Dr.Ir.MohamadKhirhasaccumulatedavastpoolofknowledgeonthecommunicationsandinformationindustry.Startinghiscareerasayoungengineerwaybackin1973,Dato’DrKhirhassuccessfullymadethetransitiontoabusiness-savvytechnocratwhentheTelecomDepartmentwascorporatisedin1987.Hehadrisenquicklyinhiscareer,takingonwide-rangingresponsibilitiesandwasholdingthepositionofChief,GroupBusinessRestructuring,thesecondhighestpositioninTelekomMalaysiaorTM,priortohisretirement.HewasPresidentoftheSeniorOfficerAssociationofTelekomMalaysiafrom1985to1996wherehehasinitiatedprogramsonexecutivedevelopmentandhealthawarenesswhichwerelateradoptedbyTM.Hewasactive insportshavingheldpositionsasViceandDeputyPresidentofTM’ssportsclub from1982to1995.HisotherexperiencesinTMincludes4yearsasSeniorVicePresidentofMarketingforMajorCorporation,GovernmentandBusinessCustomers,2yearsasSeniorGeneralManagerofTelcoBusinessStrategyDevelopment,over1yeardoingcorporatestrategyworksand5yearsinTelex,TelegraphyandDataServices.
Wong Sui EeExecutive Director
Malaysian,aged41,wasappointed to theBoardon22September2005.MsWonggraduatedwithaBachelorofArtsmajoring inAccountingandFinance fromMiddlesexUniversity, London, in 1991.She is anassociatemember of theInstituteofCharteredAccountants inEnglandandWales (ICAEW)since1994.MsWongbeganhercareer inKPMG,UnitedKingdomin1991asanAuditor.In1996,shejoinedPerdanaMerchantBankBerhadasAssistantVicePresidentfortwo(2)years.ShejoinedGloryBlitzIndustriesSdnBhd(“GBISB”)anditsrelatedcompaniesin1998.Duringher8-yeartenurewithGBISBanditsrelatedcompanies,sheformedtheteamtodevelopbuilt-to-suitindustrialpropertiesintheKlangValley for thegroup’smultinational clients includingCEVALogistics (formerlyknownasTNTLogistics),ExelLogistics(nowpartoftheDHLGroup),Danzasmal(nowpartoftheDHLGroup),UnileverMalaysia,SilverstoneTyresandothers.Currently,sheisalsoontheBoardofDirectorsinAlphaNetrise(M)SdnBhd,AmpleCosmosSdnBhdandKilatIdamSdnBhd.
How Hu SonIndependent Non-Executive Director
Malaysian,aged61,wasappointedtotheBoardon17November2006.MrHowgraduatedfromBrightonPolytechnic,UnitedKingdomwithaBachelorofScience(Hons)inCivilEngineeringin1975.In1976,heobtainedhisMasterofSciencefromImperialCollegeofScience&Technology,London.HeisamemberoftheInstitutionofEngineers,MalaysiaandisaregisteredprofessionalEngineerwiththeBoardofEngineers,Malaysia.Hebeganhiscareerin1977asaStructuralEngineerwithJabatanKerjaRayafortwo(2)years.Thereafter,hejoinedTahirWongSdnBhdasitsSeniorStructuralEngineerandwassubsequentlypromoted toSeniorAssociate. Duringhis14years inTahirWongSdnBhd,hewasinvolvedinprojectssuchasSubangParade,theRoyalMalaysianNavyBaseinSarawak,PuteriPanPacificHotel,JohorandtheSelangorTurfClub.Currently,heisaDirectorofPakatanCergasSdnBhd,aconsultancycompanyinvolvedincivilandstructuralengineering.SomeoftheprojectsthathewasinvolvedinaretheconstructionofBukitCeylonCondominium,CPTower,EastinHotelandPhileoDamansara.HeisalsotheDirectorofYongPengBatuBataBerhadandPCAssetsSdnBhd.
Profile Of Directors
17ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
Tor Peng SieIndependent Non-Executive Director
Malaysian, aged 52,was appointed to theBoard on 17November 2006. Mr Tor graduated with a Bachelor ofSciencefromCampbellUniversity,NorthCarolina,UnitedStatesofAmericain1982.HeisaholderoftheRealEstateAgentLicencefromtheBoardofValuers,AppraisersandEstate Agents Malaysia since 1993. Mr Tor has overtwenty (20)yearsexperience in the realestate industry,where he began his career in Rahim & Co. CharteredSurveyorSdnBhdin1984asaValuationExecutiveandwassubsequentlypromotedasaRealEstateNegotiator.In1988,heworkedwithTheGoldenTriangleRealEstateAgentsinitiallyasaRealEstateAgentandlaterbecameaDirectorforthesaidcompany.In1999,hejoinedPacificLandmarkRealEstateAgents.HeiscurrentlythePrincipalofPacificLandmarkRealEstateAgents.
Soong Kwong HengIndependent Non-Executive Director
Malaysian, aged 61,was appointed to theBoard on 17November2006.Mr.SoonggraduatedwithaBachelorofEconomicsfromUniversitiMalayain1972.Hehasmorethanthirty(30)yearsexperienceintaxrelatedissues.Afterhisgraduation,hebeganhiscareerintheDepartmentofInland Revenue Malaysia for three (3) years. In 1975,hejoinedChanKingSang&Co.asTaxManagerforten(10) years.Since1985,he servedasaTaxPrincipal inK.S.TaxationServicesSdnBhd.Currently,heisalsoontheBoardofDirectorsofGlobalGainSdnBhd,SegamatHoldingsSdnBhdandCompagnieDuMondeSdnBhd,companies that one involved in property and equityinvestments.
Chan Kum ChongChief Executive Officer
Malaysian,aged55,wasappointedasChiefExecutiveOfficeron1April2010.Mr.Changraduated fromPortsmouthPolytechnic (now known asUniversity of Portsmouth) in 1980with aBachelor of Science inQuantity Surveying.Mr.Chanbeganhis career as aGraduateQuantitySurveyorwith a consultant quantity surveying firm, JuruUkurBahanMalaysiaSdn.Bhd.assisting theseniorquantitysurveyor inpreandpostcontractadministration in thecompletionofMenaraMaybank,redevelopmentofSubangInternationalAirportandTelekomTrainingCentre.Mr.ChanthenjoinedTTDIDevelopmentSdn.Bhd.in1984andhassuccessfullymanagedandcompletedhousingschemesinTamanTunDr.Ismail,TamanTTDIJaya,DesaPandanandDesaBakti.InJune1995,hewasassignedtooverseetheoperationofthein-houseconstructioncompany,PanelexSdn.Bhd.asGeneralManager-Operation.Hethen joinedSyarikatT.D.Sdn.Bhd. in1999asaProjectDirectorlookingafterseveralbuildingandturnkeyprojects.Thereafter,hejoinedVistanet(M)Sdn.Bhd.in2002,anin-houseconstructioncompanyofMaylandPropertiesSdn.Bhd.,tomanagealltheirin-houseconstructionprojectswithGrossDevelopmentValuesinexcessofRM300million,comprisingofserviceapartments,shopofficesandashoppingcomplex. InOctober2003he joinedScoreOptionSdn.Bhd.asaProjectDirector,managinga200acresdevelopmentinPuchongcomprisingamixedresidentialandcommercialdevelopment,aJ.V.projectwithGlomacAllianceSdn.Bhd.,asubsidiaryofGlomacBerhad. In2005,he joinedECAlamjayaSdn.Bhd.as itsChiefExecutiveOfficer tooverseeashoppingcomplexandhoteldevelopmenttotallingRM100million.
Profile Of Directors
Profile Of Chief Executive Officer
17ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
18 ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
I) Portfolio Composition of the Trust 2010 2009 2008 20071
% % % % AtriumShahAlam1 34 34 34 33 AtriumShahAlam2 30 30 30 29 AtriumPuchong 21 21 22 22 AtriumRawang 4 4 4 6
89 89 90 90 Depositswithfinancialinstitutions 11 11 10 10
100 100 100 100
II) Asset Value, Unit And Market Price Information 2010 2009 2008 20071
Assetundermanagement(RM’000) 163,000 161,600 161,600 154,800 Totalassetvalue(RM’000) 183,904 182,350 182,123 173,397 Netassetvalue(RM’000) 127,847 126,410 126,277 119,396 Unitsincirculation(Noofunits’000) 121,801 121,801 121,801 121,801 Netassetvalue(“NAV”)perunit -Asat31December(RM) 1.05 1.04 1.04 0.98 -HighestNAVfortheyear(RM) 1.06 1.06 1.04 1.02 -LowestNAVfortheyear(RM) 1.04 1.04 0.98 0.98 Market price per unit -Asat31December(RM) 1.06 0.92 0.61 1.00 -Highesttradedfortheyear(RM) 1.10 0.93 1.00 1.13 -Lowesttradedfortheyear(RM) 0.88 0.61 0.60 0.91
PERFORMANCE DATA
Atrium Puchong 21%
Atrium Puchong 21%
Depositswithfinancialinstitutions10%
Depositswithfinancialinstitutions10%
institutionsinstitutions
Atrium Shah Alam 2 30%
Atrium Shah Alam 2 29%
Atrium Shah Alam 2 30%
Atrium Shah Alam 2 30%
AtriumShahAlam134%
AtriumShahAlam134%
Depositswithfinancialinstitutions11%
AtriumRawang4%
AtriumRawang4%
AtriumRawang4%
AtriumRawang6%
Atrium Puchong 22%
Atrium Puchong 22%
AtriumShahAlam134%
AtriumShahAlam133%
2010
20071
2009
2008
Depositswithfinancialinstitutions11%
19ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
PERFORMANCE DATA
III) Distributions since Commencement Net Asset Value Per Unit (RM)
Per Unit Before After (Sen) Date Distribution Distribution
20071 2ndQuarter 2.00 28Aug07 1.00 0.98 3rdQuarter 2.20 28Nov07 1.00 0.98 4thQuarter 2.30 29Feb08 1.00 0.98
2008 1stQuarter 2.05 30May08 1.00 0.98 2ndQuarter 2.10 29Aug08 1.00 0.98 3rdQuarter 2.10 28Nov08 1.00 0.98 4thQuarter 2.15 6Mar09 1.06 1.04
2009 1stQuarter 1.65 5Jun09 1.05 1.04 2ndQuarter 0.80 11Sep09 1.05 1.04 3rdQuarter 2.20 30Nov09 1.06 1.04 4thQuarter 2.30 25Feb10 1.06 1.04
2010 1stQuarter 2.10 27May10 1.06 1.04 2ndQuarter 2.15 27Aug10 1.06 1.04 3rdQuarter 2.15 30Nov10 1.06 1.04 4thQuarter 2.20 4Mar11 1.07 1.05
IV) Performance of the Trust 2010 2009 2008 20071 Totalreturn(%) 23.88 55.68 (28.76) 5.90 -Capitalgrowth(%)2 15.22 46.03 (39.00) (0.60) -Incomedistribution(%)3 8.66 9.65 10.24 6.50 Incomedistributionperunit(sen) -Gross 8.60 6.95 8.40 6.50 -Net 8.60 6.95 8.40 6.50 Managementexpenseratio(%) 0.94 0.72 0.89 0.53 Portfolioturnoverratio(times) - - - 1.27
V) Average Annual Return For Financial Year Ended 31 December 2010
Atrium REIT (%) KLCI (%)
Oneyear 23.88 19.06Sincecommencement(2April2007) 15.124 5.835
Pastperformanceisnotnecessarilyindicativeoffutureperformanceandthatunitpricesandinvestmentreturnsmayfluctuate.
Note:1 For the financial period from 2 April 2007 (date of commencement) to 31 December 20072 Based on the net change in the market price per unit of the Trust during the financial year/ period, over the market price per unit of the
Trust at the beginning of the financial year/period 3 Based on the actual income distribution for the year/period over the average market price per unit of the Trust. 4 Average Annual Return is computed based on the total return per unit for the period, averaged over the number of years for the
period.5 Average Annual Return is computed based on the net change in KLCI index for the period, averaged over the number of years for the
period.
Distribution
20 ATRIUM REAL ESTATE INVESTMENT TRUST
Annual Report 2010
AtriumREITManagersSdnBhd,theManagerofAtriumRealEstateInvestmentTrust(“AtriumREIT”or“Trust”)hasadoptedanoverallcorporategovernanceframeworkdesignedtomeetbestpracticeprinciples.TheManageralsorecognisesthataneffectivecorporategovernance culture is critical to its performanceand consequently, the successofAtriumREIT,which itmanages. In particular, theManagerhasanobligationtoacthonestly,withduecareanddiligence,andinthebestinterestoftheunitholdersofAtriumREIT.
Indevelopingthesystemofcorporategovernance,theManagerisguidedbythemeasuresrecommendedbytheSecuritiesCommissionGuidelinesonREITs,SecuritiesGuidelinesonUnitTrustFunds, theMainMarketListingRequirementsofBursaSecuritiesand theMalaysianCodeonCorporateGovernance.ThefollowingsegmentsdescribetheManager’smaincorporategovernancepoliciesandpractices.
ROLE OF MANAGER
Manager of Atrium REIT
TheManager has general powers of management over the assets ofAtrium REIT. TheManager’s primary objective is to provideunitholdersofAtriumREITwithacompetitiverateofreturnfortheirinvestmentbyensuringregularandstabledistributiontounitholdersandtoachievelongtermgrowthinthenetassetvalueofAtriumREIT.
TheprimaryroleoftheManageristosetthestrategicdirectionofAtriumREITandgiverecommendationstotheTrusteeontheacquisition,divestmentandenhancementofassetsofAtriumREITinaccordancewithitsstatedinvestmentstrategy.
Othergeneralfunctions,dutiesandresponsibilitiesoftheManagerincludethefollowing:
(a) tocarryouttheactivitiesinrelationtothemanagementofAtriumREITanditsportfolioofassetsinaccordancewiththeprovisionsoftheTrustDeeddated20November2006andamendedbytheSupplementaryDeeddated25November2008(collectivelyknownas“theDeed”);
(b) toissuetheannualreportofAtriumREITtounitholderswithintwo(2)monthsofitsfinancialyearend;(c) toattendtoallenqueriesfromunitholders,tenants,media,governmentbodies,etc;(d) tosupervisethePropertyManagementCompany;and(e) toensurethatAtriumREITismanagedwithintheambitoftheDeed,theSecuritiesCommissionActs,SecuritiesCommission(SC)
GuidelinesonRealEstateInvestmentTrusts(“REITGuidelines”),othersecurities laws, theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBhd,andotherapplicablelaws.
AtriumREITisexternallymanagedbytheManagerandaccordingly,AtriumREIThasnopersonnelofitsown.TheManagerappointsexperiencedandwell-qualifiedmanagementpersonneltohandletheday-to-dayoperations.AllDirectorsandemployeesoftheManagerareremuneratedbytheManagerandnotbyAtriumREIT.
AtriumREITManagersSdnBhdistheappointedManagerofAtriumREITinaccordancewiththetermsoftheDeedwhichoutlinesthecircumstancesunderwhichtheManagercanberetired.
DIRECTORS OF THE MANAGER
The Board
TheBoardisentrustedwiththeresponsibilityofoverallmanagementandcorporategovernanceoftheManagerincludingestablishinggoalsformanagementandmonitoringtheachievementofthesegoals.TheBoardisalsoresponsibleforchartingthestrategicdirection,developmentandcontroloftheManagerandhasadoptedtheprimaryresponsibilitiesaslistedintheREITGuidelinesaswellastherolesanddutiessetoutintheREITGuidelines,whichfacilitatethedischargeoftheDirectors’stewardshipresponsibilities.
Board Composition
TheBoardpresentlyconsistsoffive(5)memberscomprisingone(1)Non-independentNon-executivedirector,one(1)ExecutiveDirectorand three(3) IndependentNon-ExecutiveDirectors.Thediversebackgroundof thememberswhocome fromvariousfieldssuchasengineering,financial,realestateandmanagementprovidebroadspectrumofskills,experienceandinvaluableperspectivestooverseeingthemanagementoftheManager.TheprofilesofthemembersoftheBoardareprovidedinpages16to17oftheAnnualReport.
STATEMENT OF CORPORATE GOVERNANCE