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

Transcription

1 Corporate Environment and Social Responsibility (CESR) in Thailand MFC 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 2

4 The Effects of the Tsunami Social Economic Environmental Affected 2,293 Household Lost home Lost job Fishing Tourism/Hospitality Beaches Coral reef 3

5 Tsunami Recovery Fund Specifics Unit holders Fund capital Fund Life Investmnet Policy Management Fee : Stock Exchange of Thailand,Government Saving Bank and 12 of Commercial Banks : 3,000 million Baht : 10 years : Direct investment in equity or fixed income securities of the companies with emphasis on medium to large businesses : None 4

6 Company Selection Process Candidates Requesting Support Legal Criteria Business Criteria Social Criteria Selected Candidates 5

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 6

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 7

9 Social Criteria Once candidates have passed the legal and business criteria, they also will be evaluated on the following: Number of of employees and wages Environmental preservation such as as waste water management, beach preservation 8

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 is 2,700 Million Baht resorts in in Phang-nga Province 4 resorts and 1 cultural park in in Phuket 1 resort in in Krabi Province 9

11 Lists of companies in which the fund has invested 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 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 10

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 11

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 13

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 14

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 December 2006) 15

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 16

18 Fund Performance Fund Performance (After adjusting for dividends) 3 Months 6 Months 1 Year Since 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% As at May 26,

19 Fund Performance MIF SET INDEX MFC Islamic Index /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 As at May 26,

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

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

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 21

23 Fund Specifics Size of Fund Million Baht or Baht per unit (as at 16 th 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 22

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 24

26 Screening Policy Topic Investment 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 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 25

27 Fund Management Methodology Applies financial criteria then conducts social screening Social Screening Method would be Using 3 rd party standard: ISO Corporate Governance Standard according to SET If no 3 rd party standard, we use: Internal Screening Committee 26

28 Why ISO ISO is a series of environmental management standards The ISO standards provide a guideline or framework for organizations that need to systematize and improve their environmental management efforts. 27

29 Study in Thailand Preliminary study on ISO companies listed in SET Pulp and Paper 1.68% Food and Beverage 0.41% Transportation 6.09% Vehicles and Parts 0.52% Agriculture 1.38% Building and Furnishing Materials 25.15% Chemicals and Plastics 9.90% Energy & Utilities 47.74% Electronic Components 2.65% Companies Under Rehabilitaion 4.48% 28

30 Study in Thailand ISO14000 Companies return Set Index 80 0 Jan-03 May-03 Sep-03 Feb-04 Jun-04 Nov-04 Mar-05 Aug-05 Dec-05 Apr-06 29