Report of Quality Houses Leasehold Property Fund For the Period during 1 January 2013 – 31 December 2013 Contents Page Message from the Management Company 1 Quality Houses Leasehold Property Fund 2 Assets Invested or Held by the Fund Classified4 by T ype Details of Properties Invested by the Fund 6 Details of Property Investment during the9 Accountin Period g Details of Property Sale or Transfer of Leasehold Right during the Accounting Period 9 Details of Borrowings as of 31 December 2013 9 Report on Transactions with Related Parties Market Overview of the Segment Related to the Property from which the Fund Generates Income and Its Outlook Expenses Chargeable to the Fund Soft Commission Names and Addresses of the Property Fund Managers Opinion of the Trustee Auditors’ Report and Financial Statements About the Management Company Report of Quality Houses Leasehold Property Fund For the Period From1 January 2013 – 31 December 2013 1 Message from the Management Company 1 April 2014 Dear Unitholders of Quality Houses Leasehold Property Fund, As the Management Company has accomplished the management of the Fund for another accounting period, we are pleased to submit for your consideration herewith the Repots of the Fund’s Auditors and Trustee for the period during 1 January – 31 December 2013, together with the summary report on the Fund’s investment portfolio as well as properties invested by the Fund. We would like to take this opportunity to extend our gratitude to our unitholders for entrusting us with the management of your investments over the years. Yours sincerely, (Ms. Chantana Kanchanagama) Managing Director Land and Houses Fund Management Company Limited Report of Quality Houses Leasehold Property Fund For the Period during 1 January 2013 – 31 December 2013 2 Quality Houses Leasehold Property Fund Abbreviated Name: “QHPF” Management Company Land and Houses Fund Management Company Limited Type of Fund Closed-ended property fund listed on the Stock Exchange of Thailand Fund Maturity Indefinite Objectives of the Project: To mobilize funds from the public and general investors, with the primary objective of utilizing the proceeds from such fund mobilization to invest in commercial properties, emphasizing property projects that generate consistent returns on investment over the long-term. The Fund shall use such funds to invest in office buildings, including using the funds for renovating, improving, building, and/or developing properties with construction permits, and/or to take proper and appropriate actions for the benefits arising from investments in such properties in order to enhance income and investment returns for the unitholders and the Fund. The Fund has an objective to generate consistent dividends to the unitholders and to enhance the net asset value of the Fund over the long-term in accordance with the rules and methods as prescribed by relevant securities laws. The Management Company aims to seeks benefits and generate income for the Fund by way of leasing, subleasing, transfer and/or disposal of the properties in which the Fund has invested and plans to invest in the future. Besides, the Fund may invest in other properties and/or other securities and/or deriving benefit by other means in compliance with the securities law and/or other relevant laws. Investment Policy To mobilize funds from the public and general investors thereby using the mobilized funds to purchase, lease and/or receive the transfer of lease or sublease of properties, and seeking benefits from such properties by way of letting, subletting, and/or other actions for the benefits of the properties invested or held by the Fund including renovating, improving, modifying, developing, and/or disposal of properties in order to generate income and the investment returns for the Fund and the unitholders as well as making investments in other properties and/or other securities and/or deriving benefit by other means as prescribed by securities law and/or other relevant laws. Report of Quality Houses Leasehold Property Fund For the Period during 1 January 2013 – 31 December 2013 3 Dividend Policy The Fund has a policy to pay dividends to the unitholders not more than four times per annum. However, the Management Company may consider payment of extraordinary dividends to the unitholders as deemed necessary and appropriate. (1) If the Fund has a net profit in any accounting year, the Management Company will pay the unitholders a dividend equal to not less than 90% of the annual net profit, excluding unrealized gain on revaluation or review of property value or leasehold rights to properties for that accounting period. (2) If the Fund has retained earnings during any accounting period, the Management Company may pay dividends to the unitholders from such retained earnings. In this respect, the rules and regulations for the payment of dividends shall be in accordance with the Notification of the Securities and Exchange Commission regarding R rules, Conditions and Procedures for Establishment and Management of Property and Loan Funds and the modifications thereof as well as other relevant notifications and shall be in line with the accounting standards under the Accounting Profession Act B.E. 2547. Trustee : Kasikornbank Public Company Limited Registrar : Siam Commercial Bank Public Company Limited Investment Capital : 7,863 million Baht Offer Price : 10 Baht per unit Minimum Purchase : 50,000 Baht Number of Investment Units : 797 million units Type of Investment Units : Name-registered Shareholders of the Management Company with Holding from 10 percent of the total shares sold (as of 31 December 2013) Land and Houses Bank Public Company Limited holds 99.99 percent of the total shares sold. Report of Quality Houses Leasehold Property Fund For the Period during 1 January 2013 – 31 December 2013 4 Assets Invested by or Held by the Fund Classified by Type of Asset 1. Investments in Properties as of 31 December 2013 Area Cost Prices Fair Value % of Project (rai-ngan- (Baht) (Baht) NAV sq. wah) Leasehold right of land, building including public utility systems together with component parts and equipment related thereto 1. Quality Houses Ploenchit Project Location: 1-1-63 819,000,000 No. 598 Ploenchit Road, Lumpini, Pathumwan, Bangkok; next to Ploenchit BTS Station; 18 stories with a total space of 22,520 sq. m. - Cost of right acquisition 8,965,000 Total 1-1-62 827,965,000 828,000,000 9.88 Purchase of building and public utility systems together with component parts and equipment related thereto; and acceptance of transfer of leasehold right of land. 1. Q. Houses Lumpini Project Location: 8-0-18.5 4,596,643,816 No. 1 South Sathon Road, Thungmahamek, Sathon; next to Lumpini MRT Subway Station; 38 stories with a total space of 134,123 sq. m., and a net rental space of 68,272 sq. m. - Additional investment 6,700,535 - Cost of right acquisition 14,219,523 Total 8-0-18.5 4,617,563,874 5,530,000,000 65.97 2. Wave Place Project Location: 2-3-99 1,772,000,000 No. 55 Witthayu Road, Lumpini, Pathumwan, Bangkok; next to Ploenchit BTS Station; 18 stories with a total space of 46,675 sq. m., and a net rental space of 24,886 sq. m. - Cost of right acquisition 3,460,869 Total 2-3-99 1,775,460,869 1,410,000,000 16.82 Total Investments in Properties 7,220,989,743 7,768,000,000 92.67 Report of Quality Houses Leasehold Property Fund For the Period during 1 January 2013 – 31 December 2013 5 2. Assets Other Than Investments in Properties as of 31 December 2013 Book Assets Value/Market % of NAV Value (Baht) 1. Cash and deposits at banks 42,956,332.57 0.50 2. Investment in Promissory Notes and Debt Instruments Bills of exchange/Promissory notes issued/accepted/ - - avaled by financial institutions Certificate of Deposits/Deposit Receipts 527,186,600.00 6.14 Government bonds 84,119,450.06 0.98 Treasury bills - - Total 654,262,382.63 7.62 3. Investments in Properties Investment in properties 7,768,000,000.00 90.42 Total 7,768,000,000.00 90.42 4. Other Assets Accrued interests 3,274,558.21 0.04 Guarantee money under land lease agreement 404,882,831.59 4.71 Accounts receivable from rental-net 21,575,845.59 0.25 Other assets 54,866,000.00 0.64 Total 484,599,234.01 5.64 Total Asset Value 8,906,861,617.44 103.68 5. Other Liabilities Accrued fees and expenses (63,426,775.48) -0.74 Security deposits (232,887,380.00) -2.71 Other liabilities (19,365,494.84) -0.23 Total Liabilities (315,679,647.32) -3.68 Net Asset Value (NAV) of the Fund 8,591,181,970.12 100.00 Number of Investment Units 797,000,000.00 units NAV per Unit 10.7794 Baht Report of Quality Houses Leasehold Property Fund For the Period during 1 January 2013 – 31 December 2013 6 Details of Properties in which the Fund Invested As of 31 December 2013 1. Q. Houses Ploenchit Project Location No. 598 Ploenchit Road, Lumpini, Pathumwan, Bangkok Type Leasehold right of land and a 18-storey office building Project Feature An 18-storey office building plus 3 stories underground with a total space of 22,520 sq. m. and a net rental space of 10,825 sq. m. The underground parking on Floors B1-B3 and outdoor parking on Floors 1-4 can accommodate approximately 171 cars. Title Deed Number 3541 Ownership in Land Quality Houses Public Company Limited Ownership in Building Quality Houses Public Company Limited Land Size 1 rai 1 ngan 63 square wah Appraised Value (2013) 828,000,000 Baht (by TAP Valuation Co Ltd.