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TMB Asset Management Co., Ltd. 32nd Fl. Abdulrahim Place 990 Rama lv Rd., Silom, Bangrak Bangkok 10500, Thailand Tel +66 (0) 2636-1800 Fax +66 (0) 2636-1820

TMB Asset Management co., Ltd.

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Luxury Real Estate Investment Fund Annual Report 2012

From July 1, 2011 to June 30, 2012


Contents Luxury Real Estate Investment Fund Letter to Unitholders .................................................................................................................1 Analysis of TMB Asset Management Co., Ltd. ................................................................... 3 Property Details of Luxury Real Estate Investment Fund ................................................ 6 Details of additional Investment from July 1st, 2011 to June 30th 2012 .......................... 9 Report on tourism industry in 2011 and the fund没s performance.................................. 9 Details of Investment ...............................................................................................................16 Expenses Collected from the Fund ...................................................................................... 17 Mutual Fund Supervisor Opinion ........................................................................................ 18 Audit Report of Certified Public Accountant .................................................................... 19 Connected Persons Report......................................................................................................42 Soft Commission Report .........................................................................................................42


21st September 2012 Dear All Unitholders TMB Asset Management Co., Ltd., (çTMBAMé) on behalf of The Management Company of Luxury Real Estate Investment Fund (çthe Fundé) wishes to submit the 2012 Annual Report of the Fund to unitholders, for the Fundûs operations during the period July 1st, 2011 to June 30th , 2012. Since 2011 onwards through the beginning of 2012, the Thai tourism industry still had a tendency to continue growing, taking into account the increasing number of tourists coming to Thailand. This is partly because of marketing activities continuously conducted by relevant authorities, focusing on marketing promotion in the countries which are the primary target groups of Thailand tourism, and also because of the increase in the number of tourists from China, India, Russia and Oceania which are expected to play more important roles towards the tourism industry of Thailand in the future. In this regard, Phuket tourism market is still one of top travel destinations for both Thai and foreign tourists. In the previous financial year, there were several important events that happened and affected the management of the Fund including the conclusion of the lawsuit between the Fund and E.H.Y. Co., Ltd. (çEHYé) and Pakoh Hotel Co., Ltd (çPakohé), which had been brought since the beginning of 2011. The Fund, with the resolution of the unitholdersû meeting no. 1/2012, held on February 15th, 2012, approved the Fund to make a compromise over the aforesaid lawsuit whereby the Fund would reduce the lease term and the minimum revenue guarantee period of EHY and Pakoh from 5 years to 4 years, i.e., the expiration date would be June 30th, 2012. In this connection, the unitholders shall receive compensation in accordance with the minimum revenue guarantee provided by Pakoh for a period of 4 years. In this regard, in order to relieve the burden of the Fund and the unitholders, the Management Company shall grant management fee exemption for the 4th financial year (commencing from July 1st, 2011 - June 30th , 2012) and for the 5th financial year (commencing from July 1st, 2012 - June 30th, 2013). Due to the expiration of the Lease Agreement made with EHY, the Management Company held biddings to seek for purchasers and/or lessee of the properties to replace the existing


lessee, and held the unitholdersû meeting no. 2/2012 on June 22nd, 2012. At the meeting, it was resolved by the unitholders that Sustainable Luxury Hospitality (Thailand) Co., Ltd. (çSLHé) be the bidding winner for a lease of the properties and that the Fund enter into the Lease Agreement including other agreements (if any) with SLH. Important points and substantial of the offers and conditions for the lease of properties between the Fund and SLH have been summarized as shown in the Invitation Letter. As of the date of this Annual Report, the Management Company and SLH are still negotiating on the Agreement and making agreements upon certain conditions and details in the Lease Agreement. With respect to the Fundûs performance for the past financial year, the rental income of the hotel did not correspond to that estimated, and moreover, E.H.Y. Co., Ltd. as the lessee, was unable to pay rental to the Fund within the period of time specified but the Fund was able to pay dividends to the unitholders in accordance with the estimated minimum rental income specified in the prospectus as the Fund received the money required to be paid by Pakoh Hotel Co., Ltd. to the Fund under the Compromise Agreement as mentioned above. As of June 30th, 2012, the net asset value of the Fund was Baht 2,036,589,806.00, equivalent to a net asset value per unit of Baht 10.3643. During the 4th year of this scheme, period commencing from July 1st, 2011 to June 30th, 2012, the Fund had total revenue of Baht 147,096,799.69 and total expenses of Baht 9,173,449.69. In this regard, the Fund earned net income from investment amounting to Baht 137,923,350.00 and was able to pay dividends from the operations in the 4th year at the rate of Baht 0.7019 per unit, equivalent to 7.02% of the par value of the investment units of Baht 10 each. (Remarks: In relation to the 8th dividend payment from the operations for the 2nd half of the 4th financial year, period commencing from January 1st, 2012 to June 30th, 2012, the Fund has already made dividend payment in the amount of Baht 0.3490 per unit, totaling Baht 68,578,500.00 since September 2012.) As the Management Company, TMBAM remains resolute in upholding the Fund and the unitholdersû best interest. We are grateful of the trust that the unitholders have placed with the Luxury Real Estate Investment Fund. The Fund Managers TMB Asset Management Co., Ltd. 2

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


Analysis report by TMB Asset Management Co., Ltd., as the Management Company of the Luxury Real Estate Investment Fund In 2011, the economic growth rate of Thailand was only 0.1% on average. This was because Thailand suffered negative impacts from severe floods during the 4th quarter of 2011, thereby resulting in Thailand没s economic decline by 8.9%1 in that quarter, in conjunction with the world economic slowdown as a result of the natural disaster in Japan, and European public debt crisis. In addition, such severe floods also created impacts towards the overall economy of Thailand in 2012, especially manufacturing industry. However, Thailand没s tourism industry has not much suffered impacts from the world economic slowdown and Thailand is still one of top and internationally-renowned travel destinations. In 2011, the number of tourist arrivals to Thailand was approximately 19.2 million people, increased from 15.9 million people in 2010 by 20.7%. In 2011, the number of tourist arrivals from China, Russia, India and Oceania to Thailand increased because the economy of these countries still showed health expansion, tourists from these countries had higher purchasing power and they began playing more important roles towards the tourism industry in Thailand. In 2011, the number of tourist arrivals from these countries amounted to approximately 4.62 million people, increased from 3.32 million people in 2010 by 39.4% and accounted for 24.0% of the total number of tourist arrivals to Thailand in 2011. In 2010, the ratio of the tourists from these countries to the total number of tourists was only 20.8%. The increase in number of tourists created positive impacts on hotel business and directly related industries. In 2011, the tourism industry in Thailand generated income approximately Baht 80 billion, increased from Baht 64 billion in 2010 by 26.0% due to the increase in the number of tourists and higher average expenses of a tourist per day as a result of hotel rates gradually increased by the operators after using price strategies to stimulate the tourism industry impacted by the political unrest in the country during the past few years. 1

Source: Bank of Thailand

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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International Tourist Arrivals to Thailand 1997-2012 (Estimated) Million 25.00 20.00 15.00 10.00 5.00 0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P

Source: Department of Tourism 2012 figured forecasted by Department of Tourism

In 2012, the Department of Tourism expected that the number of tourist arrivals to Thailand would be approximately 20.5 - 20.8 million people or increase from 2011 by 6.8 - 8.3%. This is a result of strong tourism infrastructure of Thailand and greater dispersal of tourists from various countries. However, one of the reasons why the expansion rate in 2012 was expected to be lower than those of 2010 and 2011 is because of the economic problems in Europe. Overall Phuket tourism market in 2011 still continued to expand with the total number of tourist arrivals passing through Phuket immigration checkpoints of approximately 2.51 million people, increased from 1.94 million people in 2010 by 29.4%. However, in the 1st quarter of 2012, the number of tourist arrivals through Phuket immigration checkpoints was 791,091 people, decreased by 4.4% from the same quarter of 2010. This was partly because the economic crisis in Europe which is one of the main target group of Phuket没s tourism market. However, it is expected that the number of tourist arrivals to Phuket will be higher in next quarters as a result of promotional road-shows conducted by both the government and private sectors in Asian countries. The number of tourists staying in Phuket没s hotels in 2011 was totally 8,271,7222 people increased from 4,642,862 people in 2010 by 78.2%. The growth rate of 78.2% in 2011 was higher than 70.6% in 2009. Main factors included the increase in the number of 2

4

Source: The Department of Tourism, The Ministry of Tourism and Sports Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


tourists from China, Malaysia, Korea and Russia which increased from 2010 by 81.5%. The increase in the number of tourists staying in hotels as aforesaid directly created positive impacts on hotel businesses located near tourist spots along the Andaman coast as can be seen from the average hotel occupancy rate in Phuket and Krabi in 2011, i.e., 66.1%3 , which increased from the average hotel occupancy rate of 61.4% in 2010. This is a recovery sign for hotel businesses and tourism industries along the Andaman coast. The fund没s operating results for the period July 1st, 2011 to June 30th, 2012 showed a total revenue of Baht 147,096,799.69 which comprises Rental income of Baht 65,683,215.34; Rental compensation income of Baht 59,341,950.40; Compensation Income of Baht 20,488,066.28; Interest income of Baht 122,123.63 and Other income (Compensation from insurance) Baht 1,461,444.04. Total expenses were Baht 9,173,449.69 comprising management fees of Baht 2,179,864.31; trustee fees of Baht 650,903.12; registrar fees of Baht 2,169,677.03 ; professional fees of Baht 203,500.00; accrued expenses of Baht 1,359,283.65 and other expenses of Baht 2,610,221.58 The fund had a net profit of Baht 137,923,350.00 As of June 30th, 2012, The fund没s net asset value was Baht 2,036,589,806.00 or a net asset value per unit of Baht 10.3643. For the operating results of the 4th year from July 1st, 2011 to June 30th, 2012, the fund made two dividend payments on September 27th, 2011 and March 19th, 2012 for a combined dividend of Baht 0.7000 per unit, or a total sum of Baht 137,550,000.

(Note: For the eight dividend payment corresponding to the operating results for the second half of the forth year, for the period from January 1st, 2012 to June 30th, 2012, the fund already paid a dividend of Baht 0.3490 per unit for a total sum of Baht 68,578,500.00 in September 2012.)

3

Source: Report on Economic and Finance Data for the Southern Part of Thailand by Bank of Thailand

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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Property Details of Luxury Real Estate Investment Fund Luxury Real Estate Investment Fund (LUXF) invested in land, buildings and movable properties including furniture, tools and equipments and facilities of Six Senses Yaonoi. The details on buildings, ownerships rights, investment costs, valuation price can be summarized as follows: Name of Property Six Senses Yaonoi Location 55 Moo 5, Tambon Koh Yao Noi, Amphur Koh Yao, Phang Nha Type of Property Resort Hotel Type of Ownership Freehold with title deeds and Nor Sor 3 Kor 1.1 Building and Area details A. Land area of Six Senses Yaonoi Project including infrastructure i.e. water pipe lines, waste water pipe lines. The ownership rights of subject land and property include title deed and Nor Sor 3 Kor as follows: Title Deed Lot No. Survey Tambon Amphur Province Area No./Nor No. (Rai-Ngan-Sq. Sor 3 Kor No. Wah) 2881 2 1726 Koh Yaonoi Koh Yao Phung Nga 60-0-32.6 3120 11 1784 Koh Yaonoi Koh Yao Phung Nga 18-3-42.9 1133 20 4725 III 85 Koh Yaonoi Koh Yao Phung Nga 00-3-85 Total 79-3-60.5

B. All buildings and constructions on the subjected land in A. including infrastructure, facilities and engineering systems and all attachments i.e. air conditioners, water treatment system. Buildings and constructions of Six Senses Yaonoi Project are as follows: (1) Villa with private swimming pool 56 units including Pool Villas, Deluxe Pool Villas, Pool Villa Suites, The Retreat, Hill Top Reserve with typical usable areas ranging from 161 - 1,402 Sq.m., total area 13,060 Sq.m. (2) 10 Staff-house buildings, administration building, office and engineering office buildings, laundry building, total area 4,100 Sq.m.

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Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


(3) Supporting facilities building and common facilities including Restaurant, Spa, Sauna, Gym room, Tennis court, library and entertainments, total area 4,130 Sq.m. All areas include walkway, corridor and swimming pool 1.2 Movable property LUXF purchased and received the transferred of the movable properties for operating the subjected project including furniture, tools and equipments, facilities for accommodations i.e. beds, wardrobes, cabinets, sanitary wares, TV, DVD & stereo system, wine cellars and etc. Also, furniture and facilities for common areas and services for hospitality operation in Six Senses Yaonoi project include ovens, kitchenware, electronic equipments, golf carts and etc. 2.

Date and value of investment LUXF invested in land, buildings and constructions, furniture, tool and equipments, facilities equipments and all movable assets of Six Senses Yaonoi on 26th May 2008 with total investment value of 1,958,000,000 Baht (One thousand nine hundreds and fifty eight million Baht only) Details Land and buildings, Transfer expenses Moveable properties VAT on movable properties Total investment Fund Set Up expenses Grand total

Value (Baht) 1,812,603,173.73 135,884,884.36 9,511,941.91 1,958,000,000.00 7,000,000.00 1,965,000,000.00

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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3. Valuation review The annual asset valuation review by discounted cash-flow method is described as following: Appraisal Firm

Valuation approach Cashflow Projection Period Date of Valuation Open Market Value

Brooke Real Estate Co.Ltd 20th Floor, Unit No. 2005-6, The Millenia Tower, No. 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Discounted Cash-flow 10 Years 24th February 2012 1,961,000,000 Baht (One thousand Nine hundred and sixty one million Baht)

Note: The value of the property by The Depreciated Replacement Cost was appraised by appraiser at 1,338,000,000 (One thousand three hundred and thirty eight million Baht)

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Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


Details of additional Investment from 1st July 2011 to 30th June 2012 The fund did not invest in any additional property apart from the subjected property within this period. Report on tourism industry in Fiscal Year 2011 and the fund没s performance Review of the Tourism Industry in Fiscal Year 2011 In 2011, the economic growth rate of Thailand was only 0.1% on average. This was because Thailand suffered negative impacts from severe floods during the 4th quarter of 2011, thereby resulting in Thailand没s economic decline by 8.9%1 in that quarter, in conjunction with the world economic slowdown as a result of the natural disaster in Japan, and European public debt crisis. In addition, such severe floods also created impacts towards the overall economy of Thailand in 2012, especially manufacturing industry. However, Thailand没s tourism industry has not much suffered impacts from the world economic slowdown and Thailand is still one of top and internationally-renowned travel destinations. In 2011, the number of tourist arrivals to Thailand was approximately 19.2 million people, increased from 15.9 million people in 2010 by 20.7%. In 2012, the Department of Tourism expected that the number of tourist arrivals to Thailand would be approximately 20.5 - 20.8 million people or increase from 2011 by 6.8 - 8.3%. However, one of the reasons why the expansion rate in 2012 was expected to be lower than those of 2010 and 2011 is because of the economic problems in Europe. Overall Phuket tourism market in 2011 still continued to expand. The number of tourists staying in Phuket没s hotels in 2011 was totally 8,271,7222 people, increased from 2010 approximately 78.2%. Main factors included the increase in the number of tourists from China, Malaysia, Korea and Russia which increased from 2010 by 81.5%. 1 2

Source: Bank of Thailand Source: The Department of Tourism, the Ministry of Tourism and Sports Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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The increase in the number of tourists staying in hotels as aforesaid directly created positive impacts on hotel businesses located near tourist spots along the Andaman coast as can be seen from the average hotel occupancy rate in Phuket and Krabi in 2011, i.e., 66.1%3, which increased from the average hotel occupancy rate of 61.4% in 2010, approximately 7.6% Performance of Luxury Real Estate Investment Fund The fundûs operating results for the period July 1st, 2011 to June 30th, 2012 showed a total revenue of Baht 147,096,799.69 which comprises Rental income of Baht 65,683,215.34; Rental compensation income of Baht 59,341,950.40; Compensation Income of Baht 20,488,066.28; Interest income of Baht 122,123.63 and Other income (Compensation from insurance) Baht 1,461,444.04. Total expenses were Baht 9,173,449.69 comprising management fees of Baht 2,179,864.31; trustee fees of Baht 650,903.12; registrar fees of Baht 2,169,677.03; professional fees of Baht 203,500.00; accrued expenses of Baht 1,359,283.65 and other expenses of Baht 2,610,221.58 The fund had a net profit of Baht 137,923,350.00 In the previous financial year, there were several important events that happened and affected the management of the Fund including the conclusion of the lawsuit between the Fund and E.H.Y. Co., Ltd. (çEHYé) and Pakoh Hotel Co., Ltd (çPakohé), which had been brought since the beginning of 2011. The Fund, with the resolution of the unitholdersû meeting no. 1/2012, held on February 15th, 2012, approved the Fund to make a compromise over the aforesaid lawsuit whereby the Fund would reduce the lease term and the minimum revenue guarantee period of EHY and Pakoh from 5 years to 4 years, i.e., the expiration date would be June 30th, 2012. In this connection, the unitholders shall receive compensation in accordance with the minimum revenue guarantee provided by Pakoh for a period of 4 years. In this regard, in order to relieve the burden of the Fund and the unitholders, the Management Company shall grant management fee exemption for the 4th financial year (commencing from July 1st, 2011 - June 30th, 2012) and for the 5th financial year (commencing from July 1st, 2012 - June 30th, 2013). 3

10

Source: Report on Economic and Financial Data for the Southern Part of Thailand by Bank of Thailand Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


Due to the expiration of the Lease Agreement made with EHY, the Management Company held biddings to seek for purchasers and/or lessee of the properties to replace the existing lessee, and held the unitholdersû meeting no. 2/2012 on June 22nd, 2012. At the meeting, it was resolved by the unitholders that Sustainable Luxury Hospitality (Thailand) Co., Ltd. (çSLHé) be the bidding winner for a lease of the properties and that the Fund enter into the Lease Agreement including other agreements (if any) with SLH. Important points and substantial of the offers and conditions for the lease of properties between the Fund and SLH have been summarized as shown in the Invitation Letter. As of the date of this Annual Report, the Management Company and SLH are still negotiating on the Agreement and making agreements upon certain conditions and details in the Lease Agreement. With respect to the Fundûs performance for the past financial year, the rental income of the hotel did not correspond to that estimated, and moreover, E.H.Y. Co., Ltd. as the lessee, was unable to pay rental to the Fund within the period of time specified but the Fund was able to pay dividends to the unitholders in accordance with the estimated minimum rental income specified in the prospectus as the Fund received the money required to be paid by Pakoh Hotel Co., Ltd. to the Fund under the Compromise Agreement as mentioned above. As of June 30th, 2012, The fundûs net asset value was Baht 2,036,589,806.00 or a net asset value per unit of Baht 10.3643. For the operating results of the 4th year from July 1st, 2011 to June 30th, 2012, the fund made two dividend payments on September 27th, 2011 and March 19th, 2012 for a combined dividend of Baht 0.7000 per unit, or a total sum of Baht 137,550,000.

(Note: For the eight dividend payment corresponding to the operating results for the second half of the forth year, for the period from January 1st, 2012 to June 30th, 2012, the fund already paid a dividend of Baht 0.3490 per unit for a total sum of Baht 68,578,500.00 in September 2012.)

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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Details of the guarantorûs performance to comply with its obligation to provide a revenue guarantee 1. Guarantor performance to comply with its obligation to provide a revenue guarantee Pakoh Hotel Company Limited (çPakohé) is required to provide a revenue guarantee to the Fund for a period of five years according to the Undertaking Agreement dated May 21st, 2008, in which the minimum rental revenue compensation to the Fund can be concluded as follows: Year

1 2 3 4 5

Period of guarantee

Estimated Equal to minimum rental revenue dividend rate expected (Baht) to pay Percentage 6 Beginning of initial investment - June 30th, 2009 136,324,950 July 1st, 2009 - June 30th, 2010 135,693,415 6.5 145,549,315 7 July 1st, 2010 - June 30th, 2011 July 1st, 2011 - June 30th, 2012 145,581,142 7 July 1st, 2012 - June 30th, 2013* 145,613,924* 7*

* Remarks: The lease and the guarantee period for the 5th year have been revoked according to the Compromise Agreement, dated February 1st, 2012.

Pakoh paid cash in the amount of Baht 150 million to the Fund in order to guarantee the rental revenue as mentioned above, and the interest income that may occur from the guarantee amount will be paid back by the Fund to Pakoh. In case of reduction in the guarantee amount, Pakoh has responsibility to add cash or financial institution guarantee or money market unit trusts pledge to the Fund for the guarantee amount equal to Baht 150 million. The movement of cash in the security account at bank for each of the years ended June 30th, 2012 and 2011 is as follows:

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Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


The movement of cash in the security account at bank of the Luxury Real Estate Investment Fund (the çSecurityé) for each of the years ended June 30th, 2012 and 2011 Beginning balance Less - Payment for compensation income - Payment for auction sale expenses Add - Deposit to security account from Pakoh - Proceeds from auction sale of pledged investment units - Interest Income Ending Balance

Baht 2012 2011 25,187,686.88 148,052,024.28 (97,016,160.47) (147,733,144.55) (327,324.40) (0.00) 4,859,400.00 24,499,214.48 67,180,100.00 116,297.99 (0.00)

(0.00) 369,592.67 25,187,686.88

However, from October 2010, Pakoh was unable to deposit cash into the security account for the Fund as required. As a result, the Fund enforced pledges of investment units and received the proceeds therefrom (after deduction of expenses), totaling Baht 67,180,100. After that, Pakoh and EHY entered into the Compromise Agreement between the Fund and Pakoh Hotel Co., Ltd. and E.H.Y. Co., Ltd., dated February 1st, 2012 (the çCompromise Agreementé) as previously summarized and reported to the unitholders. At present, the Fund has totally withdrawn money from the said security account and added such amount of money with the money repaid by Pakoh under the Compromise Agreement and used it as part of the dividend payment no. 1/2012 on March 19th, 2012. 2.

Other Security: investment units of LUXF pledged by Pakoh Hotel Co., Ltd. As of January 18th, 2010, Pakoh pledged 20 million investment units of the Fund held by the Company as security according to the duty to fill up the value of security and pledged the additional amount of 10 million investment units of the Fund held by the Company on December 22nd, 2010. Besides, the Fund withheld the investment units of Pakoh in the approximate amount of 9.3 million units as additional security. Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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Later, on July 28th, 2011, the Fund Manager sold by auction the investment units pledged by Pakoh in the amount of 16 million units so the remaining amount of investment units pledged as security was 14 million units and the remaining amount of investment units withheld was 9.3 million units. Subsequently, under the terms of the Compromise Agreement, Pakoh agreed to pledge 9.3 million investment units withheld by the Fund and also pledged the additional amount of 3.7 million investment units so the total amount of investment units pledged under the Compromise Agreement was 27 million units. As of the date of issuance of this Annual Report, the Fund has returned such pledged investment units to Pakoh because Pakoh has already complied with all of the conditions for returning security under the Compromise Agreement. Situation update after ending of financial year ended June 30, 2012 Pakoh performed the duties under the Compromise Agreement and paid the minimum rental revenue compensation to the Fund to enable the Fund to make dividend payment for the Fund没s operation during the period from January 1st, 2012 to June 30th, 2012 at the rate guaranteed by Pakoh in the amount of Baht 68,578,500, consisting of cash payment in the amount of Baht 59,155,500 and payment from dividends received by Pakoh from 27,000,000 investment units pledged in the amount of Baht 9,423,000. The Fund has already paid the dividends at the rate of Baht 0.3490 per unit since September 21st, 2012. 3. Litigation As of February 23rd, 2012, Bangkok South Civil Court passed judgment in accordance with the Compromise Agreement made between the Fund and Pakoh Hotel Co., Ltd. and E.H.Y. Co., Ltd. and as of the date of issuance of this Annual Report, there is no pending litigation between the Fund and Pakoh and EHY.

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Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


4.

Comparison of actual revenue from the Fund没s operations and guaranteed revenue stated in the Undertaking Agreement for the financial year 2011 (ended June 30th, 2012)

Rental income (under the Lease Agreement) Rental compensation income (under the Undertaking Agreement) Compensation income (under the Undertaking Agreement) Interest income Other income (compensation from insurance) Total

Baht 2012 65,683,215.34

2011 49,303,731.20

59,341,950.40

65,636,608.40

20,488,066.28 122,123.63 1,461,444.04 147,096,799.69

34,884,213.17 55,266.83 0 149,879,819.60

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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Details of Investments Luxury Real Estate Investment Fund As at June 30, 2012 Type of Investment Investment in property Land, property and other asset in çSix Senses Yao Noi ProjectÊ 55 and 56 Moo 5 Koh Yao Noi Subdistrict, Kho Yao District, Phang Nga Province, Thailand Total investments in property Investment in security Cash at banks Interest receivable Rental receivable Compensation receivable Other receivable Deferred expenses Prepaid expenses Total Assets Liabilities Accrued expenses Other liabilities Total Liabilities Net Assets Total outstanding investment units (units) Net assets per unit

16

Villa Units

Areas

Cost (Baht)

Fair Value (Baht)

56 villas 79 Rai, 3 Ngan 60.5 Square Wah 1,958,000,000.00 1,961,000,000.00 1,958,000,000.00 1,961,000,000.00 10.00 1,947,192.19 296.20 65,683,215.34 7,736,622.96 0.00 1,199,586.47 0.00 2,037,566,923.16

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

329,982.81 647,134.35 977,117.16 2,036,589,806.00 196,500,000 10.3643

% of NAV

96.29 0.00 0.10 0.00 3.22 0.38 0.00 0.06 0.00 100.05 0.02 0.03 0.05 100.00


Table: Fees and Expenses Collected from the Fund Luxury Real Estate Investment Fund For the period July 1, 2011 through June 30, 2012 Fees collected from the Fund Management fee Trustee fee Registrar fee Advisory fee Property Management Fee Professional fee Amortisation of deferred expenses Other operating expenses Total Expenses

Amount Unit: Thousand Baht 2,179.86 650.90 2,169.68 0.00 0.00 203.50 1,359.28 2,610.22 9,173.44

% of NAV1 0.11 0.03 0.11 0.00 0.00 0.01 0.07 0.13 0.46

Note 1. Daily average net asset value (NAV) calcuated from July 1, 2011 to June 30, 2012 equals 2,030,617,405.16 bahts

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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Dear The Unitholders of the Luxury Real Estate Investment Fund Mutual Fund Supervisor Opinion We, The Kasikornbank Public Company Limited, as the Mutual Fund Supervisor of the Luxury Real Estate Investment Fund by the TMB Asset Management Company Limited from July 1, 2011 until June 30, 2012 would like to inform you that the TMB Asset Management Company Limited has well performed and fully completed its duties pursuant to its project and Securities and Exchange Act B.E. 2535.

Mutual Fund Supervisor

July 2, 2012

18

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


AUDIT REPORT OF CERTIFIED PUBLIC ACCOUNTANT To the Unitholders of Luxury Real Estate Investment Fund: I have audited the balance sheets and the schedules of investments of Luxury Real Estate Investment Fund, as at June 30, 2012 and 2011 and the related statements of income, changes in net assets and cash flows for the years then ended, and significant financial information for the years ended June 30, 2009 to 2012. The Fund没s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Fund没s management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Luxury Real Estate Investment Fund as at June 30, 2012 and 2011, and the results of its operations, changes in its net assets and cash flows for the years then ended and significant financial information for the years ended June 30, 2009 to 2012, in accordance with generally accepted accounting principles. Without qualifying my opinion, I draw attention to Note 9 to the financial statements, on June 22, 2012, the resolution of unitholders没 meeting of the Fund was passed to approve the Fund to enter into the property lease agreement and other relevant agreements (if any) with a new lessee. Currently, the Fund is in the process of entering into the property lease agreement with such new lessee.

Prawit Viwanthananut Certified Public Accountant Registration Number 4917 ANS Audit Co., Ltd. Bangkok, August 28, 2012 Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

19


BALANCE SHEETS LUXURY REAL ESTATE INVESTMENT FUND AS AT JUNE 30, 2012 AND 2011

Note Assets Investment in property at fair value (at cost Baht 1,958 million) Investment in security Cash at banks Restricted deposits at bank Interest receivable Rental receivable Compensation receivable Other receivable Deferred expenses Prepaid expenses Total Assets Liabilities Accrued expenses Guarantee payable for compensation Other liabilities Total Liabilities Net Assets Net Assets: Capital received from unitholders Retained earnings Net Assets

4 8, 9 6 9 9 9 9

9 9 9

5

Net assets per unit Total outstanding investment units at the end of year (units)

Baht 2012

1,961,000,000.00 1,960,000,000.00 10.00 10.00 1,947,192.19 8,490,193.73 25,187,686.88 296.20 1,992.23 65,683,215.34 49,303,731.20 7,736,622.96 15,640,411.57 59,758.40 1,199,586.47 2,558,870.21 39,399.36 2,037,566,923.16 2,061,282,053.58 329,982.81 680,289.85 25,187,686.88 647,134.35 197,620.85 977,117.16 26,065,597.58 2,036,589,806.00 2,035,216,456.00 1,965,000,000.00 1,965,000,000.00 71,589,806.00 70,216,456.00 2,036,589,806.00 2,035,216,456.00 10.3643

10.3573

196,500,000.0000

196,500,000.0000

The accompanying notes are an integral part of these financial statements.

20

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

2011


SCHEDULES OF INVESTMENTS LUXURY REAL ESTATE INVESTMENT FUND AS AT JUNE 30, 2012 AND 2011 Villa Units

Type of Investments Balance as at June 30, 2012 Investments in property Land, property and other asset in çSix Senses Yao Noi Projecté 55 and 56 Moo 5 Koh Yao Noi Subdistrict, Koh Yao District, Phang Nga Province, Thailand.

56 villas

Villa Units

Type of Investments Balance as at June 30, 2011 Investments in property Land, property and other asset in çSix Senses Yao Noi Projecté 55 and 56 Moo 5 Koh Yao Noi Subdistrict, Koh Yao District, Phang Nga Province, Thailand.

56 villas

Baht Areas

Cost

Fair Value

79 Rai, 3 Ngan, 60.5 Square Wah 1,958,000,000.00 1,961,000,000.00

Baht Areas

Cost

Fair Value

79 Rai, 3 Ngan, 73.6 Square Wah 1,958,000,000.00 1,960,000,000.00

The accompanying notes are an integral part of these financial statements.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

21


STATEMENTS OF INCOME LUXURY REAL ESTATE INVESTMENT FUND FOR THE YEARS ENDED JUNE 30, 2012 AND 2011

Note Investment Income Rental income Rental compensation income Compensation income Interest income Other income Total Income Expenses Management fee Trustee fee Registrar fee Professional fee Amortization of deferred expenses Other operating expenses Total Expenses Net income from investments

3 9 9 9

3 7, 9 7 7, 9

Net gain (loss) from investments Net unrealized gain (loss) on investments Total net unrealized gain (loss) on investments Increase in net assets resulting from operations

Baht 2012 65,683,215.34 59,341,950.40 20,488,066.28 122,123.63 1,461,444.04 147,096,799.69

49,303,731.20 65,636,608.40 34,884,213.17 55,266.83 149,879,819.60

2,179,864.31 650,903.12 2,169,677.03 203,500.00 1,359,283.65 2,610,221.58 9,173,449.69 137,923,350.00

4,316,130.25 647,419.57 2,158,065.13 194,670.00 1,355,569.85 3,659,041.80 12,330,896.60 137,548,923.00

1,000,000.00 1,000,000.00 138,923,350.00

(8,000,000.00) (8,000,000.00) 129,548,923.00

The accompanying notes are an integral part of these financial statements.

22

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

2011


STATEMENTS OF CHANGES IN NET ASSETS LUXURY REAL ESTATE INVESTMENT FUND FOR THE YEARS ENDED JUNE 30, 2012 AND 2011

Baht 2012 Increase in net assets from operations during the year Net income from investments Net unrealized gain (loss) on investments Increase in net assets resulting from operations Distribution to unitholders (Note 12) Increase (decrease) in net assets during the year Net assets at the beginning of the year Net assets at the end of the year

2011

137,923,350.00 137,548,923.00 1,000,000.00 (8,000,000.00) 138,923,350.00 129,548,923.00 (137,550,000.00) (132,676,800.00) 1,373,350.00 (3,127,877.00) 2,035,216,456.00 2,038,344,333.00 2,036,589,806.00 2,035,216,456.00

Units Changes in number of investment units (Baht 10 per unit) Investment units at the beginning of the year Investment units at the end of the year

196,500,000.0000 196,500,000.0000

196,500,000.0000 196,500,000.0000

The accompanying notes are an integral part of these financial statements.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

23


STATEMENTS OF CASH FLOWS LUXURY REAL ESTATE INVESTMENT FUND FOR THE YEARS ENDED JUNE 30, 2012 AND 2011

Baht 2012 Cash flows from operating activities Increase in net assets from operations 138,923,350.00 Adjustments to reconcile the increase in net assets from operations to net cash provided by (used in) operating activities Amortization of deferred expenses 1,359,283.74 Decrease in restricted deposits at bank 25,187,686.88 (Increase) decrease in interest receivable 1,696.03 Increase in rental receivables (16,379,484.14) (Increase) decrease in compensation receivable 7,903,788.61 (Increase) decrease in other receivable 59,758.40 Decrease in prepaid expenses 39,399.36 Increase (decrease) in accrued expenses (350,307.04) Decrease in guarantee payable for compensation (25,187,686.88) Increase in other liabilities 449,513.50 Net unrealized (gain) loss on investments (1,000,000.00) Net cash provided by operating activities 131,006,998.46 Cash flows from financing activities Distribution to unitholders (137,550,000.00) Net cash used in financing activities (137,550,000.00) Net increase (decrease) in cash at banks (6,543,001.54) Cash at banks at the beginning of year 8,490,193.73 Cash at banks at the end of year 1,947,192.19

The accompanying notes are an integral part of these financial statements.

24

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

2011 129,548,923.00

1,355,569.85 122,864,337.40 (1,601.96) (585,763.37) (1,505,644.85) (59,758.40) 28,407.52 2,654.85 (122,864,337.40) 176,513.18 8,000,000.00 136,959,299.82 (132,676,800.00) (132,676,800.00) 4,282,499.82 4,207,693.91 8,490,193.73


SIGNIFICANT FINANCIAL INFORMATION LUXURY REAL ESTATE INVESTMENT FUND FOR THE YEARS ENDED JUNE 30, 2010 TO 2012 AND FOR THE PERIOD MAY 20, 2008 (DATE OF INCEPTION) THROUGH JUNE 30, 2009

Baht 2012

2011

2010

2009 **

Operating Information (Per Unit) Investment units initially offered Net asset value at the beginning of the year Income from investing activities Net investment income Net unrealized gain (loss) on investments Total income from investing activities Less Distribution to unitholders Net asset value at the end of the year

10.3573

10.3732

10.7674

10.0000 -

0.7019 0.0051 0.7070 (0.7000) 10.3643

0.7000 (0.0407) 0.6593 (0.6752) 10.3573

0.6500 (0.4173) 0.2327 (0.6269) 10.3732

0.6592 0.4682 1.1274 (0.3600) 10.7674

Ratio of net profit to average net asset value during the year (%)

6.84

6.39

2.20

Significant financial ratio and additional information Net asset value at end of the year (Thousands Baht) 2,036,590 2,035,216 Ratio of total expenses to average net asset value during the year (%) 0.45 0.61 Ratio of investment income to average net asset value during the year (%) 7.24 7.39 Ratio of portfolio turnover to average net asset value during the year (%) * -

10.89

2,038,344 2,115,800 0.45

0.50

6.59

6.87

-

173.97

Supplementary information * This is not included cash at banks, investment in promissory notes, certificates of deposit and trading investments should be the independent trading transactions which are not included repurchase agreements or resale agreements. ** Significant financial information for the period 2009 are not comparable with other year due to the accounting period was longer than twelve months.

The accompanying notes are an integral part of these financial statements.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

25


NOTES TO FINANCIAL STATEMENTS LUXURY REAL ESTATE INVESTMENT FUND FOR THE YEARS ENDED JUNE 30, 2012 AND 2011

1.

NATURE OF LUXURY REAL ESTATE INVESTMENT FUND Luxury Real Estate Investment Fund (çthe Fundé) is a close-ended property fund with no maturity date. The registered value of investment units is Baht 1,965 million (196.5 million units, Baht 10 per unit). The Fund was approved by the Office of the Securities and Exchange Commission (SEC) on May 20, 2008 with the key objective to use the proceeds from the sale of the investment units to invest and earn all benefits in property. TMB Asset Management Company Limited (çthe Management Companyé) serves as the Fundûs manager and Fundûs registrar. Kasikornbank Public Company Limited serves as the trustee of the Fundûs assets and bank account. The Management Company has a policy to allocate dividends to the unitholders not more than twice a year under the following criteria; (1) If the Fund has net income for any period, the Management Company may consider to pay dividends to the unitholders in the amount of not less than 90 percent of the net income excluding unrealized gains from valuation or review the valuation of property or leasehold property for that period. (2) If the Fund has retained earnings for any period, the Management Company may consider to pay dividends to the unitholders from such retained earnings. Payment of dividend as (1) shall not cause the Fundûs deficit increased in the period in which the dividends are paid.

2.

BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (çTFRSé) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (çFAPé) in conformity with generally accepted accounting principles in Thailand. The financial statements of the Fund have been prepared in Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purpose. For the convenience of the readers not conversant with the Thai language, an English version of financial statements has been translated from the Thai version of financial statements.

26

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


The preparation of the financial statements in conformity with Thai Financial Reporting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Subsequent actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, and in the period of the revision and future periods, if the revision affects both current and future periods. Adoption of New Thai Financial Reporting Standards During the year 2010 to 2012, FAP has issued Notifications, mandating the use of new and revised Thai Accounting Standards (TAS), TFRS, Thai Interpretations (TI), Thai Financial Reporting Interpretation (TFRI) and Guidelines as follows: TAS, TFRS, TI, TFRI and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2011 of totaling 33 standards. TAS 1 (revised 2009) Presentation of Financial Statements TAS 2 (revised 2009) Inventories TAS 7 (revised 2009) Statement of Cash Flows TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors TAS 10 (revised 2009) Events After the Reporting Period TAS 11 (revised 2009) Construction Contracts TAS 16 (revised 2009) Property, Plant and Equipment TAS 17 (revised 2009) Leases TAS 18 (revised 2009) Revenue TAS 19 Employee Benefits TAS 23 (revised 2009) Borrowing Costs TAS 24 (revised 2009) Related Party Disclosures TAS 26 Accounting and Reporting by Retirement Benefit Plans Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

27


TAS 27 (revised 2009) TAS 28 (revised 2009) TAS 29

Consolidated and Separate Financial Statements Investments in Associates Financial Reporting in Hyperinflationary Economies TAS 31 (revised 2009) Interests in Joint Ventures TAS 33 (revised 2009) Earnings per Share TAS 34 (revised 2009) Interim Financial Reporting TAS 36 (revised 2009) Impairment of Assets TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets TAS 38 (revised 2009) Intangible Assets TAS 40 (revised 2009) Investment Property TFRS 2 Share - Based Payments TFRS 3 (revised 2009) Business Combinations TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued Operations TFRS 6 Exploration for and Evaluation of Mineral Resources TFRI 15 Agreements for the Construction of Real Estate TI 31 Revenue - Barter Transactions Involving Advertising Services FAP没s Announcements No. 16/2554 Disclosure Guidance on Related Party Transactions with Government FAP���s Announcements No. 17/2554 Transitional Procedures for Other Long-term Employee Benefits FAP没s Announcements No. 18/2554 Accounting Guidance on Revaluation of Assets FAP没s Announcements No. 19/2554 Accounting Guidance for Condominiums TAS and TI which are effective for the financial statements for the period beginning on or after January 1, 2013 are as follows: TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosures of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rate

28

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


TFRS 8 TI 10 TI 21 TI 25

Operating Segments Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued NonDepreciable Assets Income Taxes - Changes in the Tax Status of an Enterprise or its Shareholders

The management of the Fund has assessed the effects of these TAS, TFRS, TI, TFRI and FAP没s announcements and believes that they will not have any significant impact on the financial statements for the year in which they are initially applied. 3.

SIGNIFICANT ACCOUNTING POLICIES Distributions of Income Decreases in retained earnings are recognized at the time the dividend is announced. Investment Measurement Investment in property is stated at the fair value based upon valuation of an independent appraiser every 2 years and the valuation will be reviewed within one year after the last valuation date. Investment in debt instruments are presented at fair value, using the price or the yield rate from the Thai Bond Market Association on the date of investment measurement. Investment in unlisted equity securities are valued at fair value as determined by the fund manager, based on financial status of the financial instruments没 issuer. Net unrealized gain or loss arising from their revaluation of investment to be fair value is reflected in the statement of income on the measurement date. The weighted average method is used to determine the cost of each security at the time of sales. Revenues and Expenses Recognition Fixed rental income is recognized in the statements of income on a straight-line basis. Variable rental income, compensation income and expenses are recognized on an accrual basis.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

29


The premium (discount) on debt instruments is amortized by the effective rate method. The amortized amount is presented as an adjustment of the interest income. Interest income is recognized on a time basis. Gain (loss) on trading of securities is recorded as revenues or expenses on trading date. Deferred Expenses Deferred expenses represent expenses from the initial investment units offering are amortized on the straight-line basis over the period of 5 years. 4.

INVESTMENT IN PROPERTY The Fund purchased land, property and other assets from Pakoh Hotel Company Limited in the amount of Baht 1,958 million which have detail as follows: The Land is located on çSix Senses Yao Noi Projecté Koh Yao Noi Subdistrict, Koh Yao District, Phang Nga Province. The area of land is 79 rai, 3 ngan, 60.5 square wah classified by deeds as follows: Area Issues rai - ngan - square wah Land title deed 2 78 - 3 - 75.5 Nor Sor 3 Kor 1 0 - 3 - 85 Total 3 79 - 3 - 60.5

-

30

Pakoh Hotel Company Limited submitted a petition to the Land Department requesting to change Nor Sor 3 Kor to a land title deed, currently the process is still under the approval of the government concerned. Property and other assets included systems, fixtures, utilities and control parts that are located on çSix Senses Yao Noi Projecté No. 55 - 56, Moo 5, Koh Yao Noi Subdistrict, Koh Yao District, Phang Nga Province comprises of: 1. 56 villas with private pools (Pool Villa) which are further segmented as Pool Villas, Deluxe Pool Villas, Pool Villas Suites, The Retreat and Hill Top Reserve. Area of each villa is about 161 to 1,402 square meters, totaling area 13,090 square meters, approximately. 2. 10 staff housing units, executive offices, administrative offices, and engineering and support building, totaling area 4,100 square meters, approximately.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


3.

-

Supporting and common area facilities include restaurant, spa, sauna, fitness area, tennis courts, library and multimedia libraries, totaling area 4,130 square meters, approximately. Furniture, equipment and facilities related to the villas, furniture and facilities for use in common area of Six Senses Yao Noi Project.

During the year 2012, the Fund provided the independent appraisal company, Brooke Real Estate Company Limited, appraised the value of investment in property. According to the appraisal report dated February 27, 2012, stated that the method used for appraise the property was Discounted Cash Flows Approach, the fair value of the property as at February 24, 2012 was Baht 1,961 million. During the year 2011, the Fund provided the independent appraisal company, Brooke Real Estate Company Limited, appraised the value of investment in property. According to the appraisal report dated February 25, 2011, stated that the method used for appraise the property was Discounted Cash Flows Approach, the fair value of the property as at February 24, 2011 was Baht 1,960 million. On November 16, 2010, the SEC approved for changing the name of the property invested from Six Senses Hideaway Yao Noi to the Six Senses Yao Noi. 5.

RETAINED EARNINGS AT THE BEGINNING OF THE YEAR Baht 2012 Accumulated net income from investments (accumulated since May 20, 2008) 394,819,106.00 Accumulated net unrealized gain on investments (accumulated since May 20, 2008) 2,000,000.00 Accumulated distribution to the unitholders (accumulated since May 20, 2008) (326,602,650.00) Retained earnings at the beginning of the year 70,216,456.00

2011 257,270,183.00 10,000,000.00 (193,925,850.00) 73,344,333.00

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

31


6.

CASH AT BANKS As at June 30, 2012 and 2011 cash at banks consisted of: Bank 2012 2011 Interest Rate Interest Rate Principal per annum Principal per annum (Baht) (%) (Baht) (%) Saving accounts Kasikornbank Public Company Limited 1,947,192.19 0.62-1.95 8,490,142.82 0.70-2.25 Credit Agricole Corporate and Investment Bank 50.91 0.25 Total 1,947,192.19 8,490,193.73

7.

MANAGEMENT FEE, TRUSTEE FEE AND REGISTRAR FEE Management fee, trustee fee and registrar fee are as follows: Management fee is charged at the rate of not exceeding 1 percent per annum of the Fund没s net assets. Trustee fee is charged at the rate of not exceeding 0.05 percent per annum of the Fund没s net assets. Registrar fee is charged at the rate of not exceeding 0.20 percent per annum of the Fund没s net assets. These fees are computed on monthly basis (excluding value added tax). The Management Company waives the entire management fee for the period January 1, 2012 through June 30, 2012 according to the compromise agreement between E.H.Y. Company Limited, Pakoh Hotel Company Limited and the Fund (see Note 10).

32

8.

INVESTMENTS IN SECURITY The Fund invested in ordinary share of E.H.Y. Company Limited, 1 share, at the par value of Baht 10 per share, totaling in the amount of Baht 10.

9.

RELATED PARTY TRANSACTIONS During the year, the Fund had significant business transactions with the Management Company and other enterprises, which have the same shareholders and/or directors as the Management Company and the Fund. Such transactions for the years ended June 30, 2012 and 2011 are summarized as follows:

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


Baht Related Companies 2012 TMB Asset Management Company Limited Management fee 2,179,864.31 Registrar fee

2,169,677.03

2011 4,316,130.25 2,158,065.13

Pricing Policy The basis stated in the prosectus. The basis stated in the prosectus.

Pakoh Hotel Company Limited Rental compensation income 59,341,950.40 65,636,608.40 As specified in the agreement Compensation income 20,488,066.28 34,884,213.17 As specified in the agreement E.H.Y. Company Limited Rental income 65,683,215.34 49,303,731.20 As specified in the agreement

As at June 30, 2012 and 2011 the Fund had significant outstanding related companies as follows: Baht 2012 TMB Asset Management Company Limited Accrued management fee Accrued registrar fee 178,448.31 Pakoh Hotel Company Limited Compensation receivable 7,736,622.96 Guarantee payable for compensation Other receivable Other liability 631,196.59 E.H.Y. Company Limited Rental receivable 65,683,215.34 Invesments in security 10.00 TMB Bank Public Company Limited Restricted deposits at bank Nature of relationship Name TMB Asset Management Company Limited Pakoh Hotel Company Limited E.H.Y. Company Limited TMB Bank Public Company Limited

balances with

2011 355,327.18 177,663.59 15,640,411.57 25,187,686.88 59,758.40 49,303,731.20 10.00 25,187,686.88

Country Relation Type of Relation Thailand Related Company Management Company Thailand Related Company Unitholder Thailand Related Company Subsidiary Company of Pakoh Hotel Company Limited Thailand Related Company Parent Company of TMB Asset Management Company Limited Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

33


Rental Income On May 20, 2008, the Fund entered into land including construction and movable property lease agreement with E.H.Y. Company Limited (çlesseeÊ) in order to lease the assets to operate the Six Senses Yao Noi project and other business relating to this project for the period of 3 years commencing from May 26, 2008 to May 25, 2011, except for the Fund agrees to renew for the period of agreement for 2 years forward. Afterwards lessee can be renewed the agreement every 3 years, totaling 5 times. Lessee and the Fund will negotiate about rate of rental, the regulations and conditions of the renewed rental agreement. After the renewed agreement is ended, lessee and the Fund may agree to renew the agreement for the period not over 10 years under the regulations and conditions mutually agreed by lessee and the Fund. In addition to the regulations and conditions of the rental income which E.H.Y. Company Limited shall pay rental income (after discount if any) for the period May 26, 2008 through June 30, 2013 to the Fund which is the first three years and two years of renewable the agreement (if the Fund agrees to renewable the agreement) in three portions: fixed rentals, variable rentals and special variable rentals determined according to formulas mutually agreed upon under contract as follows: Rental income formulas by fixed rentals 1. The fixed rate of rental payment for each month will be in the amount of Baht 8 million (except for the first period, May 2008 the rental will be calculated by the portion of rental days starting from the effective date of the rental agreement through May 31, 2008). In the case of the release of the accrued rental from the period of time according to the undertaking agreement, the lessee has to provide Pakoh Hotel Company Limited to pay such accrued rental fee. 2. Rental income formulas by variable rentals The variable rate of rental payment is calculated from the percentage of the operating income of the month before deducting operating expenses and hotel management expenses of Six Senses Yao Noi project as follows: Periods The date of invextment - June 30, 2009 July 1, 2009 - June 30, 2010 July 1, 2010 - June 30, 2013

34

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

% monthly operating income of the project 0 5 10


3.

Rental income formulas by special variable rentals The special variable rental payment will be paid when the Fund views it to be proper in the minimum of 80 percentage rate of the previous net income of the leasehold except the start of operating date through June 30, 2009.

Compensation Income Compensation income represents the guarantee of minimum rental income from Pakoh Hotel Company Limited for the period of five years ending June 2013 according to the undertaking agreement dated May 20, 2008 which concluded as follows: Year 1 2 3 4 5

June 30, 2009

Estimate revenue (Baht) 136,324,950

Equal to minimum dividend rate expect to pay Percentage 6

June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013

135,693,415 145,549,315 145,581,142 145,613,924

6.5 7 7 7

Period of guarantee Beginning of initial investment July 1, 2009 July 1, 2010 July 1, 2011 July 1, 2012 -

Pakoh Hotel Company Limited paid cash in the amount of Baht 150 million to the Fund in order to guarantee the compensation income as above, and the interest that may occur from the guarantee amount will be paid back to Pakoh Hotel Company Limited. In case of restricted cash reduce Pakoh Hotel Company Limited has responsibility to add cash or financial institution guarantee or money market unit trusts pledge to the Fund for the guarantee amount equal to Baht 150 million. The movement of restricted deposits at bank for the years ended June 30, 2012 and 2011 as follows:

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

35


Beginning balance Less Payment for compensation income Payment for expenses in enforecement and auction Add Deposit to security account from Pakoh Hotel Company Limited Money earned from sold by auction of collateral investment units (After payment defaault interest) Interest income Ending balance Additional collateral (Obtained from the payment of default interest) Total

Baht 2012 2011 25,187,686.88 148,052,024.28 (97,016,160.47) (147,733,144.55) (327,324.40)

-

4,859,400.00

24,499,214.48

59,068,100.00 116,297.99 (8,112,000.00)

369,592.67 25,187,686.88

8,112,000.00 -

25,187,686.88

Year 2011, Pakoh Hotel Company Limited can not provide collateral to the Fund as prescribed, which caused the Fund claimed for the payment of default interest. The collateral investment units were sold by auction in order to get the money to pay for default interest in the amount of Baht 8.11 million. The money was considered as additional cash collateral, which is calculated based on the terms and conditions of the undertaking agreement. Besides this, Pakoh Hotel Company Limited and related person as shareholders of E.H.Y. Company Limited had pledged their investment in share certificates of E.H.Y. Company Limited, as collateral for the conditions and policies of the rental agreement according to the share certificate pledge agreement dated May 26, 2008. On January 18, 2010 and December 22, 2010 Pakoh Hotel Company Limited pledged its investment in unit trusts of the Fund in the amount of 30 million units to the Fund, as collateral to fulfill its responsibility as mentioned above. As at July 28, 2011, the Management Company has succeeded the auction 16 million investment units which Pakoh Hotel Company Limited pledged as collateral and has revenue from the auction before deducted expenses in the amount of Baht 67.18 million. Rental income for the years ended June 30, 2012 and 2011 were as follows: Baht 2012 2011 Rental income under agreement 125,025,165.74 114,940,339.60 Less rental compensation income (59,341,950.40) (65,636,608.40) Rental income 65,683,215.34 49,303,731.20 36

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


The Fund received compensation guarantee under the undertaking agreement related to minimum compensation guarantee to unitholders for the years ended June 30, 2012 and 2011 were as follows: Baht 2012 2011 Rental compensation income 108,645,681.60 114,354,576.23 Compensation income 28,391,854.89 33,378,568.32 Total 137,037,536.49 147,733,144.55 Pakoh Hotel Company Limited default the conditions in the undertaking agreement due to the default of obligations in restoring the balance of the security account and filed a legal case against the Fund. The Management Company as the Fund manager has already submitted the counter-claims from the Fund against the same legal case. As at February 23, 2012, the Southern Bangkok Civil Court rendered the judgment in accordance with the compromise agreement between the Fund, E.H.Y. Company Limited and Pakoh Hotel Company Limited (see Note 10). On June 22, 2012, the resolution of unitholders没 of the Fund was passed to approve the Fund to enter into the property lease agreement and other relevant agreements (if any) with a new lessee. The details and conditions of the lease are as follows : Fixed Rentals The fixed rate of rental payment will be in the amount of Baht 70 million per year throughout the first 3 years of the lease term, after that the fixed rate of rental shall be increased at the rate of 3 percent per year until the expiration of the lease agreement and the renewal period. Variable Rentals The variable rate of rental payment shall be calculated in 2 cases as follows: Case 1: If the residue amount is higher than the split start amount, the Fund shall receive 2 parts of variable rent calculated in accordance with the following formula: 1st part of variable rent = 100 percent of split start amount less fixed lease fee 2nd part of variable rent = 80 percent of residue amount less split start amount Case 2: If the residue amount is lower than the split start amount but higher than the fixed lease fee, the Fund shall receive variable rent calculated in accordance with the following formula only: Variable rental = residue amount less fixed lease fee Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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The Rental Guarantee The lessee shall deposit cash into the cash guarantee account so that the balance of the account is not lower than Baht 70 million and shall maintain cash balance of the cash guarantee account to be not lower than Baht 35 million. In this regards, the Management Company may allow the lessee to replace the cash warranty with the bank guarantee or the high quality securities acceptable by the Management Company such as government bond. 10.

LITIGATION On April 11, 2011 the Fund received the notice from Civil Court, which E.H.Y. Company Limited and Pakoh Hotel Company Limited (Plaintiffs) filed the Fund (Defendant). On May 4, 2011, the Fund accused of the counterclaim E.H.Y Company Limited and Pakoh Hotel Company Limited which Pakoh Hotel Company Limited was to pay money in the amount of Baht 125.11 million including interest to the Fund for deposit money into the collateral account according to the undertaking agreement. On February 23, 2012, the Southern Bangkok Civil Court rendered the judgment in accordance with the compromise agreement between the Fund, E.H.Y Company Limited and Pakoh Hotel Company Limited which the terms and conditions could be summarized as follows: 1. Reduce the lease term of E.H.Y. Company Limited to be ended on June 30, 2012, termination will be taken effect prior to the former expiry date and the Management Company shall find out a new lessee. 2. Cancel the structure of the rental fee whereby the E.H.Y. Company Limited as the lessee and Pakoh Hotel Company Limited as the guarantor, who guarantees the Fund没s minimum revenue, agreed to pay compensation enabling the Fund to pay dividend at 7 percent in the 4th operational year as the last year of the lease and the lease agreement shall be terminated on June 30, 2012 reflecting the guarantee minimum revenue of the 5th operational year has been cancelled. 3. The Management Company to waive the management fee for the period January 1, 2012 through June 30, 2012. 4. E.H.Y. Company Limited shall hand over the properties to the Fund at the date of handover on July 1, 2012 as per the following details: Transfer the right and/or other benefits in accordance with the current Company没s insurance policies in relation with the management of hotel (except the policy of Business Interrupt Insurance) to the Fund and/or its designated person within July 31, 2012.

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Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


-

-

11.

Submit a request to transfer hotel license of Six Senses Yao Noi and other related licenses of hotel business operation of the Company and/or Pakoh Hotel Company Limited as well as transferring and/or changing the name of public utilities user to the Fund and/or its designated person in accordance with the stipulated terms and conditions. Pakoh Hotel Company Limited entered into the additional pledged its investment units trust of the Fund in the amount of 13 million units, totaling in the amount of 27 million units, which the Fund shall release the pledge of the Fund没 s investment units provided in the conditions.

OTHER INFORMATION The initial agreement about the project development phase 2; The Fund was acknowledged that Pakoh Hotel Company Limited had the purpose and plan to develop the project phase 2. At the beginning, the Fund and Pakoh Hotel Company Limited agreed about the project as follow: Pakoh Hotel Company Limited agree to pay the compensation for using of passage-way and the common area facilitations of the Six Senses Yao Noi project for the resident in the project phase 2 to the Fund in the total amount to be equal to 2 percentage of the sale price in the project, less any marketing expenses, such as the commission fee, public relations fee and operator没s sign up fee. The partner of contract to be unanimous which any operating in the project must not bring about to conflict of interest or may be impact for business income of the Six Senses Yao Noi project, that the Fund jointly own business. In the case of Pakoh Hotel Company Limited has the purpose to dispose, transfer, leasing out all-out or a partially of assets which built on the project phase 2, Pakoh Hotel Company Limited agree to and would like to operate the Fund afford the right of first refusal to buy and/or alien and/or possessors right and/or lease of these assets. In the regard, the Fund and Pakoh Hotel Company Limited will agree to deal about covenant, conditions which concern with the project phase 2 in ahead details. However, the above agreement was base on the undertaking agreement between the Fund and Pakoh Hotel Company Limited dated May 21, 2008, which will be ended when Pakoh Hotel Company Limited complete the conditions under the compromise agreement. Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

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12.

DIVIDEND PAYMENT On February 21, 2012, the Fund declared dividend from its operation since July 1, 2011 to December 31, 2011 at the rate of Baht 0.3529 per unit totaling in the amount of Baht 69.34 million. On September 2, 2011, the Fund declared dividend from its operation since January 1, 2011 to June 30, 2011 at the rate of Baht 0.3471 per unit totaling in the amount of Baht 68.21 million. On January 28, 2011, the Fund declared dividend from its operation since July 1, 2010 to December 31, 2010 at the rate of Baht 0.3529 per unit totaling in the amount of Baht 69.34 million. On September 6, 2010, the Fund paid dividend from its operation since January 1, 2010 to June 30, 2010 at the rate of Baht 0.3223 per unit totaling in the amount of Baht 63.33 million.

13.

COMMITMENTS As at June 30, 2012, the Fund has obligations as follows: 13.1 From payment under consulting with other company for processing the sale or lease land including construction and movable property for operating the Six Senses Yao Noi project, upon the completion, which summarized as follows: 1. Transaction 1: to divest the Fund没s asset with the rate of service fee not over 1.5 percent on the amount of the sale. or 2. Transaction 2: to arrange an operating lease agreement for the Fund没s asset with the rate of service fee in the amount of Baht 5 million. 13.2

14.

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Payment under other service agreements to totaling in the amount of Baht 3.25 million.

DISCLOSURE OF FINANCIAL INSTRUMENTS The Fund does not speculate or engage in the trading of any derivative financial instruments. Fair Value As the majority of financial assets and liabilities are short-term, the Fund believes that their carrying value does not materially differ from their fair value.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.


Interest Rate Risk Interest rate risk is the risk from future movements in market interest rates. As at June 30, 2012, the Fund没s exposure to interest rate risk relates to deposits at banks amounting to Baht 1.95 million and with a floating interest rate. Credit Risk The Fund is exposed to the risk of a breach of the financial instruments obligations by counterparties since the Fund has accounts receivables, which have compensation guarantee (see Note 9). Foreign Currency Risk The Fund has no financial assets and liabilities in foreign currency, so there is no foreign currency risk. Market Risk The Fund is exposed to risks from rental income from only one lessee company. The returns on investment fluctuate depending on domestic and overseas factors including the economic and political situations, and the status of the financial market. However the Fund will receive minimum compensation income for 5 years (see Note 9) 15.

EVENT AFTER BALANCE SHEET DATE On August 22, 2012, the Fund declared dividend from its operation since January 1, 2012 to June 30, 2012 at the rate of Baht 0.349 per unit.

16.

APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved for issue by the authorized persons of the Fund on August 28, 2012.

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

41


Connected Persons Report of 2012 For the period July 1, 2011 through June 30, 2012 Fund Name

Connected Person

Luxury Real Estate Investment Fund

Unitholders who hold investment exceed 10% of total outstanding investment units

Investors can verify connected persons transactions of the Fund either directly at TMB Asset Management, on company没s website (http://www.tmbam.com/v2/th/ corporateGovernance.php), or on the SEC没s website (http://www.sec.or.th/th/ infocenter/stat/asset/mutual/connected/connected.shtml).

Soft Commission Report of Luxury Real Estate Investment Fund Company name -

42

Received Benefits -

Annual Report 2012 For the period July 1, 2011 - June 30, 2012 Luxury Real Estate Investment Fund TMB Asset Management Co., Ltd.

Reasons -


TMB Asset Management Co., Ltd. 32nd Fl. Abdulrahim Place 990 Rama lv Rd., Silom, Bangrak Bangkok 10500, Thailand Tel +66 (0) 2636-1800 Fax +66 (0) 2636-1820

TMB Asset Management co., Ltd.

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Luxury Real Estate Investment Fund Annual Report 2012

From July 1, 2011 to June 30, 2012


Luxf 12