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Corporate Environment and Social Corporate Environment and Social Responsibility (CESR) in ThailandResponsibility (CESR) in Thailand
MFC Asset Management plc.MFC Asset Management plc.20 June 200620 June 2006
Tsunami Recovery Fund
3
The Effects of the TsunamiThe Effects of the Tsunami
Ranong Phang-nga Phuket Krabi Trang SatunTotal of 53,203
peopleor 12,293 households
4
The Effects of the TsunamiThe Effects of the Tsunami
Economic Environmental
Social
Fishing
Tourism/Hospitality
Affected 2,293 Household
Lost home
Lost job
Beaches
Coral reef
5
Tsunami Recovery Fund Tsunami Recovery Fund SpecificsSpecifics
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
SupportLegal Criteria
Business CriteriaSocial
CriteriaSelected
Candidates
7
Legal CriteriaLegal 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 CriteriaBusiness 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 CriteriaSocial 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
Number of employees and wages
Environmental preservation such as waste water management, beach preservation
10
The Fund’s Progress
Total investment is 2,700 Million BahtTotal investment is 2,700 Million Baht
14 resorts in Phang-nga Province 14 resorts in Phang-nga Province
4 resorts and 1 cultural park in Phuket
4 resorts and 1 cultural park in Phuket
1 resort inKrabi Province
1 resort inKrabi Province
As of May 2006 , we have invested in 20 companies with the majority situated in
Khao Lak , Phang-nga and Phuket Provinces
11
Lists of companies in which the fund has invested
11 Palm Andaman Resort
12 Bundrika Resort
13 Khao Lak Bayfront Resort
14 Khao Lak Laguna Resort
15 Khao Lak Bundari Resort
16 Taranta Resort
17 Khao Lak Wanaburi Resort
18 Treesala Resort
19 Pavillion Resort
20 Phuket Fantasea
1 Rayawadee Resort
2 Mookdara Beach Resort
3 Sudalha Raman Resort
4 Khao Lak Palm Beach Resort
5 Baan Khao Lak Resort
6 Haad Son Resort
7 Pakarang Resort
8 Takolaburi Resort
9 Best Western Palm Galleria Resort
10 Southsea Pakarang Resort
12
Reconstruction Progress
7 Resorts and 1 Cultural Park have finished construction/renovation and are currently open for business
8 Resorts are expected to be completed and open for business for the 2006 high season
4 Resorts are expected to be completed and open for business for the 2007 high season
Create long-term employments for more than 3,000 households
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
1.Companies that do not engage in prohibited businesses
2.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
(After adjusting for dividends)
3 Months 6 Months 1 YearSince
Inception
MIF 0.70% 7.11% 17.66% 11.93%
SET Index -3.28% 7.11% 8.14% 6.85%
MFC Islamic Index -1.18% 8.09% 20.61% 16.28%
Fund Performance
As at May 26, 2006
19
Fund Performance
As at May 26, 2006
90
95
100
105
110
115
120
125
130
21/12/47 21/02/48 21/04/48 21/06/48 21/08/48 21/10/48 21/12/48 21/02/49 21/04/49
MIF
SET INDEX
MFC Islamic Index
20
Sector AllocationSector Allocation
As at May 26, 2006
Energy 23%Electronics 4%
Communication 12%
Property Development 16%
Petrochemical 9%
Construction Materials 13%Health Care 15%
Packaging 3%
Transportation 3%Automotive
2%
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Top 10 Holding
As at May 26, 2006
PSL 3%PTL 3%HANA 5%
DCC 5%
SCCC 8%
PTTCH 8%
ADVANC 12%BH 15%
PTTEP 25%
AMATA 16%
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 90 scholarships 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 34342. Million Baht 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
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
Topic Investment Policy
Alcohol :No Investment
Tobacco :No Investment
Gambling :No Investment
Defense/Weapon :No Investment
Animal Testing :No Investment
Pornographic Related :No Investment
Topic Investment 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
0
80
160
240
320
400
Jan-03 May-03 Sep-03 Feb-04 Jun-04 Nov-04 Mar-05 Aug-05 Dec-05 Apr-06
ISO14000Compani
es return
Set Index