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Tsunami Recovery Fund

Corporate Environment and Social Responsibility (CESR) in Thailand MFC Asset Management plc. 20 June 2006. Tsunami Recovery Fund. The Effects of the Tsunami. Ranong Phang-nga Phuket Krabi Trang Satun Total of 53,203 people or 12,293 households. The Effects of the Tsunami. Social.

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Tsunami Recovery Fund

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  1. Corporate Environment and Social Responsibility (CESR) in ThailandMFC Asset Management plc.20 June 2006

  2. Tsunami Recovery Fund

  3. The Effects of the Tsunami • Ranong • Phang-nga • Phuket • Krabi • Trang • Satun Total of 53,203 people or 12,293 households

  4. The Effects of the Tsunami Social Economic Environmental Affected 2,293 Household Fishing Beaches Lost home Tourism/Hospitality Coral reef Lost job

  5. Tsunami Recovery Fund Specifics • Unit holders : Stock Exchange of Thailand ,Government Saving Bank and 12 of Commercial Banks • Fund capital : 3,000 million Baht • Fund Life: 10 years • Investmnet Policy :Direct investment in equity or fixed income securities of the companies with emphasis on medium to large businesses • Management Fee:None

  6. Company Selection Process Candidates Requesting Support Legal Criteria Business Criteria Social Criteria Selected Candidates

  7. Legal Criteria • Complies with SEC regulations,the Securities and Exchange Act and Thai Commerce Law • Situated in the 6 provinces affected by the Tsunami and engaged in tourism industry • The Fund will invest no more than 25% of NAV in any one company

  8. Business Criteria Companies will be evaluated in the following categories: • Product Characteristics • Market Structure • Supplier Relationship • Shareholders/Management Team and track records • Good Governance • Financial Strength and Valuation

  9. Social Criteria Once candidates have passed the legal and business criteria, they also will be evaluated on the following: • Number of employees and wages • Environmental preservation such as waste water management, beach preservation

  10. The Fund’s Progress As of May 2006 , we have invested in 20 companies with the majority situated in Khao Lak , Phang-nga and Phuket Provinces Total investment is 2,700 Million Baht 14 resorts in Phang-nga Province 4 resorts and 1 cultural park in Phuket 1 resort in Krabi Province

  11. Lists of companies in which the fund has invested

  12. Reconstruction Progress • 7 Resorts and 1 Cultural Park have finished construction/renovationand are currently open for business • 8 Resorts are expected to be completed and open for businessfor the 2006 high season • 4 Resorts are expected to be completed and open for business for the 2007 high season • Create long-term employmentsfor more than 3,000 households

  13. MFC Islamic Fund

  14. Investment Policy • Invest in listed stocks and also non-listed stocks with growth potential which comply with Islamic principles and are in the MFC Islamic Index • Religions Advisory Board determines stock selection in compliance with Islamic principles • Cash deposit with the Islamic Bank of Thailand

  15. Screening Criteria • Companies that do not engage in prohibited businesses • Companies’ financial ratios • The total debt of the investee company is  33% • The sum of cash or interest bearing securities of the investee is  33% • The accounts receivable is  45 % of the total assets of the company 3. Use SET Index as the benchmark

  16. Dividend Policy • Pay dividends at least once a year at a rate of no less than 50% of realized/unrealized profit. • The first dividend payment was paid on 25 January 2006 for 0.50 baht per unit or 5%(for the investment period during 21 December 2004 – 30 December 2006)

  17. Religious Advisory Board (Shariah Committee) The Religious Advisory Board (Shariah Committee) is comprised of distinguished members of the Thai Muslim community who are knowledgeable about Islamic law and principles. The Shariah Committee advises on the criteria in stock selection and on the donations to charity. 1. Mr.Aroon Boonchom 4. Mr.Thongkam Mahamad 2. Dr.Isma-ae Alee 5. Mr.Banchong Binkason 3. Mr.Sorakit Hasan 6. Mr.Noppadol Tehman

  18. Fund Performance As at May 26, 2006

  19. Fund Performance As at May 26, 2006

  20. Transportation 3% Packaging 3% Automotive 2% Electronics 4% Energy 23% Petrochemical 9% Communication 12% Property Development 16% Construction Materials 13% Health Care 15% Sector Allocation As at May 26, 2006

  21. PTL 3% PSL 3% HANA 5% PTTEP 25% DCC 5% SCCC 8% PTTCH 8% AMATA 16% ADVANC 12% BH 15% Top 10 Holding As at May 26, 2006

  22. Donation of part of Management Fee to Charity (sagad) MFC has a policy to donate part of the management fee equal to 0.25% of net asset value to various charities. In 2005, MFC donated a total of 85,000 Baht as follows: 1. April : Donated 50,000 Baht to “Charity for Orphans of the Tsunami” 2. July : Donated 35,000 Baht to “Khun Poomi Foundation” to help orphans and schools affected by the natural disaster in the South In 2006, MFC has plans to donate a total of 620,000 Baht as follows: 1. To donate 570,000 Baht in scholarships to students in the three southern provinces of Yala, Naratiwas and Pattani.A total of 90scholarships will be awarded. 2. To donate 50,000 Baht to renovate mosques that were damaged by terrorist acts in the South

  23. Fund Specifics • Size of Fund 343.42 MillionBaht or 10.2025 Baht per unit (as at 16th June 2006) • Open for subscription every business day and redemption every Monday • The Fund has received support from the following institutions: • Islamic Bank of Thailand • Government Savings Bank • The Stock Exchange of Thailand • Social Security Fund

  24. MFC Environmental and Socially Responsible Investment Fund

  25. Type of Fund • Open-end Fund : the Unit holders can invest once a month • Investment Policy : Flexible Fund can invest in equity, fixed-income and other instruments • Invest in the securities that are considered as “Socially Responsible” • Benchmark: SET 50

  26. Screening Policy TopicInvestment Policy Alcohol :No Investment Tobacco :No Investment Gambling :No Investment Defense/Weapon :No Investment Animal Testing :No Investment Pornographic Related :No Investment TopicInvestment Policy Environment :Invest Positively Beneficial products and services :Invest Positively Labor Relations :Invest Positively Human Rights :Invest Positively Employment/Equality :Invest Positively Community Investment :Invest Positively

  27. Fund Management Methodology • “Applies financial criteria then conducts social screening” • Social Screening Method would be • Using 3rd party standard: • ISO 14000 • Corporate Governance Standard according to SET • If no 3rd party standard, we use: • Internal Screening Committee

  28. Why ISO 14000 • ISO 14000 is a series of environmental management standards • The ISO 14000 standards provide a guideline or framework for organizations that need to systematize and improve their environmental management efforts.

  29. Study in Thailand • Preliminary study on ISO 14000 companies listed in SET

  30. Study in Thailand Set Index ISO14000 Companies return

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