Asiasoft: Annual Report 2009 ENG by shareinvestor shareinvestor

ANNUAL REPORT 2009 Asiasoft Corporation Public Company Limited 9 U.M. Tower, Room 9/283-5, 28th Floor, Ramkhamhaeng Road, Suanluang, Bangkok 10250

ASIASOFT

Contents A. General Information Visionary Message from the Chairman of Board of Directors and Chief Executive Offfiificer Report of the Audit Committee General Information of the Company Board of Directors Management Corporate Social Responsibility Highlight Events

3 4 6 10 18 21 24

B. Annual Report Financial Highlight Nature of Business Risk Factors Shareholding Structure and Management Connected Transactions Statement of the Board of Directorsâ&#x20AC;&#x2122; Responsibilities for the Financial Reporting Management Discussion and analysis of Financial Conditions and Operating Results Financial Statement

26 27 51 55 75 84 85 91

Message from

The Chairman and The Chief Executive Offififfiicer The year 2009 was considered an important and challenging year with the business operation in the midst of global economic recession resulting in businesses in all sectors both domestic and overseas greatly impacted while having to go through domestic political problems. However, as a leader in online entertainment in Thailand, we still remained strong and persisted with the growing results of operations. In Thailand, the operating results grew 45% as compared with the proffiifits gained in 2008 based on the success factors of effififi cient management of capital and sales expenditures as well as mixed marketing which can accommodate more to the customer needs. In addition, it was a result of the management of Fun Box company which is a company under Asiasoft. As for overseas operations in Singapore and Malaysia, the overall proffiifit had decreased from the past years due to the result of existing game services which were not as anticipated and to the economic conditions which had not yet improved. However for the year 2010, the company plans to adjust the management structure to increase the effiffiiciency and focus on expanding new target groups to correspond to the consumer behaviors. Moreover, it also plans to expand the business continuously both domestic and overseas. In terms of overseas, after recovering from economic impact, the company will focus on the strategy of accelerating the market including the launching of average 3-4 new games per year to expand the target group to offer more ample coverage by forge marketing and investment in Vietnam as it has positives to facilitate many marketing aspects including the overall market value of THB 3,500 million. As for Thailand market this year, the company expands its collaboration with business alliances to expand the business with the concept of “Game Changer” which is a signififfiicant change to new form of company business in the future. Therefore, it is believed with high conffiifidence that in the year 2010, the total result of the company’s operation would reach its maximum growth since the company inception. In this opportunity, the company would like to thank all shareholders, customers, business allies and other concerning government agencies for the continue support and confiffiidence in the company potential. Apart from our fiffiirm steps in online game business, the company is also determined to become a leader in new businesses in the market that is ready grow effififi ciently with the bright vision of all management and cooperation from all employees. “Asiasoft” is ready to create a new phenomenon to reach the stable future “Game Changer”

Tan Lgow Lim Chairman

Pramoth Sudjitporn Chief Executive Offififfiicer

Report of the Audit Committee The Audit Committee of Asiasoft Corporation Public Company Limited consists solely of three independent directors with the qualifications set forth by the Securities & Exchange Commission i.e. Mr. Chalermphong Jitkuntivong as Chairman of the Audit Committee, Mrs. Tanyaporn Manmee and Mrs. Monluedee Sookpantarat, as Audit Committee Member. The Audit Committee has always performed its work in accordance with duties and responsibilities that assigned by the Board of Director and under the charter of Audit Committee that comply with the best practice guidelines for audit committee, relative Rules and Regulations of the Stock Exchange of Thailand. During the year 2009, the Audit Committee met totally 8 times together with the Management, the Account and Finance Department, Outsourcing Internal Audit and the external auditors every quarter depending on the relevant agenda which can be concluded as follows: 1. Ensure accurate and adequate fiffiinancial reports. To review the quarterly and yearly company’s fiffiinancial statements together with the external auditors and the Management by questioning, discussing and advising on certain issues and matters relating to the company’s fi ffiinancial reports. The Audit Committee is of the opinion that the fiffiinancial statements of the company and its subsidiaries were prepared in accordance with generally accepted accounting standards and were presented accurately and fairly with adequate information disclosure. 2. Ensure suitable and efffiicient internal control and internal audit systems as well as to review the

independence of internal audit offififfiice.

To review internal audit systems, approve the structure of the internal audit plans, acknowledge the result of auditing including the evaluation of the adequacy of the company’s internal control system together with Internal Audit Department and Outsourcing Internal Audit. The Audit Committee is of the opinion that the company has appropriate and adequate internal control and audit systems.

3. Ensure compliance with laws pertaining to securities and the stock exchange, regulations of the Stock Exchange of Thailand and laws concerning company business.

The Audit Committee is of the opinion that the company has complied with relevant rules and regulations that concerning company business.

4. Consider, elect, nominate the company and its subsidiaries’ auditors and recommend fees.

To propose the company’s Board of Directors to recommend at the shareholders’ meeting the appointment of Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. as the Company and its Subsidiaries’ auditors in Thailand for ffiifiscal year 2010 because they are independent auditors with the authority, duties, and responsibilities set forth by the

Securities & Exchange Commission and propose Deloitte & Touche LLP as the Auditor of Subsidiary in Singapore for fiffiiscal year 2010 and propose Deloitte & Touche as the Auditor of Subsidiary in Malaysia for ffiifiscal year 2010 because they have knowledge ability and expert in the Company and its Subsidiaries business.

To review process, practice, regulations and articles of association of the Company in order that the approved transactions and disclosure comply with the rules or notiffiification of the Stock Exchange of Thailand as accurate and complete. The Audit Committee is of the opinion that the transactions to be in order and are in the best interest of the company with adequate information disclosure.

6. Others:

5. Consider the transactions with related parties and transactions with conffllflict of interest in line with relevant legislations and regulations.

6.1 Reviewing the information disclosed to the Stock Exchange of Thailand and the Securities and Exchange commission, as disclosed in the Companyâ&#x20AC;&#x2122;s annual report year 2009 (Form 56-2) and in the annual information disclosure form as at December 31, 2009 (Form 56-1). 6.2 Reporting the Audit Committeeâ&#x20AC;&#x2122;s activities to the Board of Directors periodically. 6.3 Reviewing the Charter of Audit Committee for ensuring the Charter of Audit Committee is update and suitable for the Organization Environment. 6.4 The record of attendance of the Audit Committee members is summarized as follows: List of Audit Committee

Number of Attendance / Total Meeting (Times) Year 2009

1. Mr. Chalermphong Jitkuntivong 2. Mrs. Tanyaporn Manmee

8/8

3. Mrs. Monluedee Sookpantarat

8/8

On behalf of the Audit Committee

(Mr. Chalermphong Jitkuntivong) Chairman of the Audit Committee

General Information

(As of 31 December 2009)

Company Name Type of Business

Asiasoft Corporation Public Company Limited Providing online entertainment services with service emphasizing as an online game operator in Thailand, Singapore, Malaysia, and Vietnam

Head Offfiice Registered Number Telephone Facsimile Website Registered Capital Paid-up Capital

No. 9, UM Tower, Room 9 / 283 – 5, 28th Floor Ramkhamhaeng Road, Suanluang, Bangkok,10250 0107550000050 66 2769 8888 66 2717 4251 www.asiasoft.co.th and www.asiasoft.net 316,000,000 Baht divided into 316,000,000 ordinary shares with a par value of Baht 1 each. 307,853,608 Baht divided into 307,853,608 ordinary shares with a par value of Baht 1 each.

Companies in which the Company hold 10% or more of shares

(As of 31 December 2009) Company Name

PlayPark Company Limited

Type of Business Head Offfiice Telephone Facsimile Website Registered Capital Shareholding Status

Web portals for online games and web advertisement services No. 9, UM Tower, Room 9 / 286 – 7, 28th Floor Ramkhamhaeng Road, Suanluang, Bangkok, 10250 66 2769 8888 66 2717 4251 www.playpark.com 5,000,000 Baht divided into 50,000 ordinary shares with a par value of Baht 100 each. All shares have been issued and fully paid up. 99.99% of registered capital.

Company Name

Asiasoft International Company Limited

Type of Business Head Offfiice Telephone Facsimile Registered Capital Shareholding Status

Investment Arm No. 9, UM Tower, Room 9 / 283 – 5, 28th Floor Ramkhamhaeng Road, Suanluang, Bangkok, 10250 66 2769 8888 66 2717 4251 100,000,000 Baht divided into 1,000,000 ordinary shares with a par value of Baht 100 each. All shares have been issued and fully paid up. 99.99% of registered capital.

Facsimile 66 2679 8772 40,000,000 Baht divided into Type of Business Development of PC Games and Registered Capital Online Games which received 400,000 ordinary shares with a par value of Baht 100 each. BOI Certififfiificate from Board of All shares have been issued and fully paid up. Shareholding Status 99.99% of registered capital held Investment by A Capital Company Limited. Head Offfiice No. 9, UM Tower, Room 9 / 173, 17th Floor Ramkhamhaeng Road, Suanluang, Company Name Asiasoft Online PTE LTD. Bangkok, 10250 Type of Business Providing Online Games and Telephone 66 2769 8888 distributing PC Games Facsimile 66 2717 4251 Head Offfiice No. 5 Tampines Central 1 Registered Capital 25,000,000 Baht divided into #04-01 Tampines Plaza, 250,000 ordinary shares with a par value of Baht 100 each. Singapore 529541 All shares have been issued and fully paid up. Telephone +65 6825 8500 Shareholding Status 90.198% of registered capital. Facsimile +65 6781 3532 Registered Capital 2,000,000 Singapore Dollar, all Company Name A Capital Company Limited shares have been issued and fully paid up. Shareholding Status 100% of registered capital held Type of Business Investment Arm by Asiasoft International Com pany Head Offfiice No. 9, UM Tower, Room 9 / Limited. 283 â&#x20AC;&#x201C; 5, 28th Floor Ramkham haeng Road, Suanluang, Bangkok, 10250 Company Name AS Online SDN. BHD. Telephone 66 2769 8888 Type of Business Providing Online Games and Facsimile 66 2717 4251 distributing PC Games Registered Capital 2,000,000 Baht divided into Head Offfiice Suite 16.02, 16th Floor, the 20,000 ordinary shares with a par value of Baht 100 each. Gardens, South Tower, No.1, The Paid-up Capital is 500,000 Baht. Mid Valley City, Lingkaran Syed Shareholding Status 99.99% of registered capital. Putra, 59200 Kuala Lumpur, Malaysia Company Name Funbox Company Limited Telephone +603 2287 1503 Type of Business Providing Online Games Facsimile +603 2287 1500 Head Offfiice No. 1168/15, 17, Lumpini Registered Capital 4,000,000 RM., all shares have Tower, Rama 4 Road, been issued and fully paid up. Tungmahamek, Sathorn, Shareholding Status 100% of registered capital held Bangkok, 10120 by Asiasoft International Telephone 66 2343 1000 Company Limited.

Company Name

PlayPal Company Limited

Reference Persons Registrar

Thailand Securities Depository Company Limited

Telephone Facsimile

The Capital Market Academy Building, 2nd Floor, 2/7 Moo 4 (North Park Project), Vibhavadi Rangsit Road, Thungsonghong, Laksi District, Bangkok 10210 0 2596 9000 0 2832 4994 – 6

Auditors

Mr. Vichai Ruchitanont, CPA License No. 4054 ANS Audit Company Limited

Telephone Facsimile Telephone Facsimile

100/72 22nd Floor, 100/2 Vongvanij Building B., Rama 9 Road, Huaykwang, Bangkok 10320 0 2645 0101 0 2645 0110

RSM Chio Lim 18 Cross Street, #08-01, Marsh & McLennan Centre,Singapore 048423 (65) 6533 7600 (65) 6531 1811

RSM Robert Teo, Kuan & Co.

Telephone Facsimile

2nd Floor, Wisma RKT No.2, Jalan Raja Abdullah, Off Jalan Sultan Ismail, 50300 Kuala Lumpur, Malaysia 603 – 2697 2888 603 – 2698 6600

Financial Advisor

DBS Vickers Securities (Thailand) Company Limited

Telephone Facsimile

989 Siam Tower, 9th , 14th – 15th Floor, Rama 1 Road, Pathumwan, Bangkok 10330 0 2657 7902 , 0 2658 1251 0 2657 7908

Board of Directors ASIASOFT

Mr. Tan Tgow Lim Chairman

Educational Background Business Administration, Cambridge GCE Ordinary Level Presbyterian Boys School in Singapore Work Experiences - Chairman Asiasoft Corporation Public Company Limited - Director Asiasoft Online Pte. Ltd. - Director Asiasoft International Company Limited - Director AS Online Sdn. Bhd. Training Program organized by Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP 50/2006) Illegal Record in past 10 years - none -

Mr. Pramoth Sudjitporn Chief Executive Office

Educational Background Bachelor of Business Administration, Bangkok University Work Experiences - Director, Chief Executive Offfiicer and Chairman of Executive Committee Asiasoft Corporation Public Company Limited - Director Asiasoft Online Pte. Ltd. - Director A Capital Company Limited Training Program organized by Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP 50/2006) Illegal Record in past 10 years - none -

Mr. Lertchai Kanpai Director

Educational Background Bachelor of Laws, Ramkhamhaeng University Work Experiences - Director and Managing Director Asiasoft Corporation Public Company Limited - Director Asiasoft International Company Limited - Director PlayPal Company Limited - Director PlayPark Company Limited - Director A Capital Company Limited - Director Funbox Company Limited Training Program organized by Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP 51/2006) Illegal Record in past 10 years - none

Mr. Surasak Khaoroptham Director

Educational Background - MBA, Business Administration, Major in Finance, University of Pennsylvania - the Wharton School. - MSC (Engineering), Science in Industrial & Operations Engineering, - Major in Operations Research, University of Michigan-Ann Arbor. - Bachelor Degree, Electrical Engineering, King Mongkut Institute of Technology - Ladkrabang. Work Experiences - Director Asiasoft Corporation Public Company Limited - Director SNC Former Public Company Limited - Director Easy Buy Public Company Limited - Director Mermaid Maritime Public Company Limited

- Chairman Asia Books Company Limited - Director and Compensation Committee Member Somboon Advance Technology Public Company Limited - Managing Director Altus Advisory Company Limited Training Program organized by Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP 9/2004) Illegal Record in past 10 years - none -

Mr. Chalermphong Jitkuntivong

Independent Director and Chairman of the Audit Committee

Educational Background Master of Laws, Cornell University, USA Barrister at laws (Thai Bar) Bachelor of Laws (Hons.), Chulalongkorn University Certificate for Business Laws, Thammasat University Work Experiences - Director, Independent Director and Chairman of the Audit Committee Asiasoft Corporation Public Company Limited - Attorney Domnern Somgiat & Boonma Law Offififi cfi e Limited

Training Program organized by Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP 53/2006) Understanding the Fundamental of Financial Statements (UFS 9/2007) Specifififfiic Knowledge or Expertise - Law Illegal Record in past 10 years -noneBusiness Relationship with the Company -none-

Mrs. Tanyaporn Manmee

Independent Director and Audit Committee Member

Educational Background Bachelor of Business Administrative (Accounting), Ramkhamhaeng University Work Experiences - Director, Independent Director and Audit Committee Member Asiasoft Corporation Public Company Limited - Director Harvard & Davidson Company Limited - Accountant Johnson Matthey (Thailand) Company Limited

Training Program organized by Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP 53/2006) Director Certififfiication Program (DCP 106/2008) Specififfiic Knowledge or Expertise - Accounting Illegal Record in past 10 years -noneBusiness Relationship with the Company -none-

Mrs. Monluedee Sookpantarat

Independent Director and Audit Committee Member Educational Background B.B.A. in Accounting (Horn.), Thammasat University Bachelor of Science in Accounting, Thammasat University Certififfiied Public Accountant, Thailand License No.4020 Work Experiences - Director, Independent Director and Audit Committee Member Asiasoft Corporation Public Company Limited - Director, Authorized Director, Investment Committee Member, Risk Management Committee Member and Chief Financial Offfiificer Wave Entertainment Public Company Limited

Training Program organized by Thai Institute of Directors Association (IOD) Director Certiffiification Program (DCP 31/2003) Director Diploma Award (Fellow Member) Class 11/2003 Director Accreditation Program (DAP 34/2005) Audit Committee Program (ACP 23/2008) Specififfiic Knowledge or Expertise Accounting, Reviewing Accounting and Internal Audit Financial Statements Review Experiences 1987-1996 as the Auditor of Ernt&Young Company Limited. 1997- present as the Director and Chief Financial Offififfiicer of the Group of Wave Entertainment Public Company Limited Illegal Record in past 10 years - none Business Relationship with the Company - none -

Management ASIASOFT

Mr. Kittipong Prucksa-aroon

Mr. Sunt Rojpornwatana

Deputy Managing Director

IT Infrastructure Director

Educational Background BBA, Assumption University Work Experiences - Deputy Managing Director Asiasoft Corporation Public Company Limited - Assistant Vice President / Director MFEC Public Company Limited - Executive Director Advance Intelligence Modernity Company Limited - Deputy Managing Director Asys Computer Company Limited - General Manager Advanced Research Group Company Limited Training Program organized by Thai Institute of Directors Association (IOD) - none Illegal Record in past 10 years - none -

Educational Background B.Sc. Computer Science, Chulalongkorn University M.Sc. Computer Engineering, Chulalongkorn University Work Experiences - IT Infrastructure Director Asiasoft Corporation Public Company Limited - General Manager - IT Infrastructure Charoen Pokphand Group Company Limited - IT Infrastructure Manager Hutchison CAT Wireless Multimedia Limited Training Program organized by Thai Institute of Directors Association (IOD) - none Illegal Record in past 10 years - none -

Mr. Adthapong Kosulawatha

Mrs. Suwannee Tangchitporn

Management Information System Director

E-Business Director

Educational Background Master of Business Administration, Mahidol University Bachelor Degree - Computer, Khon Kaen University Work Experiences - Management Information System Director Asiasoft Corporation Public Company Limited - General Manager - IT Infrastructure Probiz Solution Company Limited - IT Infrastructure Manager GlaxoSmithKline Company Limited Training Program organized by Thai Institute of Directors Association (IOD) - none Illegal Record in past 10 years - none -

Educational Background MBA. (Marketing) , National Institute of Development Administration (NIDA) Ms. Science (Medical Technology), Chulalongkorn University Work Experiences - E-Business Director Asiasoft Corporation Public Company Limited - E-Business Director Playpark Company Limited - Chief of E-Commerce JS Internet Company Limited Training Program organized by Thai Institute of Directors Association (IOD) - none Illegal Record in past 10 years - none -

Mr. Sang Hee park

Mrs. Arunee Poontawe

Business Development Director

Finance Director

Educational Background Bachelor of Arts in Economics, Kyonggi University, South Korea Work Experiences - Business Development Director Asiasoft Corporation Public Company Limited - Director Big Sales Media Corporation Company Limited - Sale Manager Parks Toy Company Limited Training Program organized by Thai Institute of Directors Association (IOD) - none Illegal Record in past 10 years - none -

Educational Background Master of Accounting, Thammasat University Bachelor of Accounting (2nd Hons), Thammasat University Work Experiences - Finance Director Asiasoft Corporation Public Company Limited - Financial Controller Pacific Marketing & Entertainment Company Limited - Finance and Accounting Advisor One Stop Service Company Limited - Accounting and Finance Manager Major Cineplex Group Public Company Limited - Senior Vice President of Finance and Accounting Department EGV Entertainment Public Company Limited Training Program organized by Thai Institute of Directors Association (IOD) - none Illegal Record in past 10 years - none -

Corporate Social Responsibility 1. Introduction “There is nothing else better than using our own experiences and knowledge to create things return back to the society.” is Asiasoft’s CSR (Corporate Social Responsibility) concept. The company is recognized as a pioneer of the online entertainment business in Southeast Asia. We are ready to bring our experience and expertise in information technology to develop Thai community in the Digital Life era to be a society of unlimited knowledge pool including technology, education, and kid’s development in terms of time management, spare time utilization, as well as the attitude cultivation towards social and environment responsibility. Mission of Asiasoft people contributed to the sustainable development of Thai society is divided into 3 aspects of activities which are (1) Project for education and youths, (2) Project for society and environment, and (3) Project supporting government’s activities

2. Project for education and youths

Development in education and learning skill is a fundamental contribution to the growth of children. Asiasoft is encouraging activities that support the development of learning skill, knowledge, and education opportunities as a foundation to the sustainable social development.

2.1 Gamer Loves Dad Project Gamer Loves Dad is a project initiated by Asiasoft to be a channel for gamers to show respect to the king and to present the love they have for their fathers. The project has been holding every year until now, since 2006. Project Results Asiasoft Corporation Public Company Limited has arranged the 4th Gamer Loves Dad Project under a concept of “following dad’s footprint, creating good people”. There are over 100,000 gamers participating in the project resulting in 6,072,196 Baht of donation. All the revenue, without any deduction, from Item Love Dad and, shirts with the campaign’s logo; partial revenue from M-pay refiffiifill system and A-Cash online, will be given to king’s projects, education- and youthrelated organizations as a merit to the occasion of celebrating the 82nd birthday ceremony of the king in the year 2009.

2.2 Charity for Kids Project, Year 3 Asiasoft’s executives and staff are participating in societycontribution activities such as provide lunch, recreation activity, sport gears, stationeries, scholarships to students. This 3rd year, we went to Baan Nohn Sao Ae school in Sakaew during February 28, 2009.

2.3 Asiasoft Delivers The Happiness To Children The event was held on the National Kid’s Day. The management and staff were participating in giving the happiness to children in foundations, communities, and hospitals in Bangkok area.

2.4 Asiasoft Open House Project As a knowledge center, Asiasoft accommodated children, schools, and government offififfiifices to experience the company’s operations relating to online-game services, and websites in order to share the technology experiences and visions.

3. Project for society and environment

Asiasoft focuses on the value and attitude cultivation to kids in relation to the sustainable environment preservation, encourages them to make a good use of their spare time for themselves and society through environmental activities.

3.1 Playpark Calls For Green Power Playpark.com invited online gamers to participate in coral rehabilitation activity by growing coral reefs digitally in Playpark.com website. It also brought the gamers to coral reef rehabilitation areas in Kham Island, Sattahip.

3.2 Do Good Now Project Asiasoft arranged H1N1 2009 Flu Prevention campaign in internet cafes by having its crew made a trip to over 100 internet cafes in Bangkok to promote the campaign in order to encourage entrepreneurs to realize the necessity of the H1N1 209 Flu prevention. Do Good Now Gallery

4. Asiasoftâ&#x20AC;&#x2122;s Government Activity Support Asiasoft is willing to share experiences and power from its online entertainment business in Southeast Asia to support activities and projects organized by government sector. It is our pleasure to be part of the social force that drives the society into a better quality level.

4.1 Drug Washed Away Project in Cooperation with ONCB Asiasoft supports the Drug Washed Away Project initiated by the Offififfiice of the Narcotics Control Board (ONCB) by organizing various activities such as Flash Game Design Competition, Anti-drug Motto Contest, Anti-drug Exhibition, in order to reinforce the perception of drug threats among kids.

Highlight Events in Year 2009 Thailand

Asiasoft All Star Battle 2009 BY KUNG THAI BANK เดือน พฤศจิกายน 2552

• The launch of Millionaire Online Game, March 2009 • Marketing Seminar: DigiMarketing starting with a DOWNTURN! , July 2009 • The announcement of the cooperation between Krung Thai Bank and Playpark Co., Ltd, June 2009 Asiasoft All Star Battle 2009 BY Krung Thai Bank, November 2009 • One-2-Call! unlock your way to Atlantica, October 2009 • Awards winning: BEST MMORPG OF THE YEAR 2009, and BEST ONLINE GAME OF THE YEAR 2009 by Bangkok International Game Festival 2009, October 2009 • The public announcement of the cooperation between Asiasoft Corporation Public Company Limited and Kellogg (Thailand) Co., Ltd in a campaign called Imm Chao Sanook Kum (Full breakfast in the morning, full enjoyment in the evening), November 2009 • The public announcement of the cooperation between Asiasoft Corporation Public Company Limited and Advance mPAY Co., Ltd, March 2009 • Playpark Carnival, November 2009 • The launch of Twelve Sky 2 game, November 2009 • 6th year anniversary of Ragnarok game in Thailand

Malaysia • • • • •

Cyber Fusion Sudden Attack Tournament in April 2552 Asiasoft Game Fest 2009 in June 2552 (insert image) Sudden Attack Grand Championship Grand Finale in December 2552 No Sweat Audition Dance Challenge 2009 in August 2552 Sudden Attack Girl Search Finals in September 2552

Singapore • • • •

Sudden Attack Launch in March 2552 Asiasoft GameFest 2009 in May 2552 (insert image) Asiasoft Triple Ace Event July 2552 An Asiasoft Christmas event in December 2552

ASIASOFT

Annual Report 2009

Financial Highlight Income Statement (Baht Million) Revenue from Sales and service income - net Gross Proffiifit Net income before interest expenses and corporate income tax Net Proffiifit

2552 1,496 634 276 178

2551 1,587 662 264 185

2550 1,547 651 338 254

Balance Sheet (Baht Million) Assets Liabilities Shareholdersâ&#x20AC;&#x2122; Equity

2552 1,700 460 1,240

2551 1,713 457 1,261

2550 856 459 398

Stock Paid-up Capital (Million Shares) Par Value (Baht) Earning per share (Baht) Dividend per share (Baht)

2552 308 1 0.60 0.58

2551 300 1 0.69 0.63

2550 225 1 1.13 1.18

2552 11.70% 10.50% 14.30% 0.37%

2551 11.50% 14.40% 22.30% 0.36

2550 16.30% 33.80% 70.10% 1.15

Key Ratios Net Proffiifit Margin (%) Return on Assets (%) Return on Equity (%) Debt Equity Ratio

Nature of Business History and Major Developments Asiasoft Corporation Public Company Limited (the “Company” or “AS”) was formerly called B.M. Media (Thailand) Co., Ltd. The Company was incorporated on 20 September 2001, with the registered capital of Baht 5.0 million to operate in the distribution business of PC games. The co-founders of the Company, Mr. Pramoth Sudjitporn, Mr. Tan Tgow Lim and Mr. Lertchai Kanpai, have long experience in the entertainment software business. In 2003, the Company began its online game service business in Thailand with the launch of the game “Ragnarok Online” licensed from Gravity Corporation of South Korea. The Thai version was then developed to provide services for Thai gamers. This game was an immense success, with the highest Peak Concurrent Users of over 110,600. This was a major step forward, which made the Company widely known as one of the leading online game operators in Thailand. In 2004-2005, the shareholding of companies within the Group was restructured through the Company’s purchase of shares from its major shareholders to clarify the Group’s operating structure, save costs and enhance the efffiificiency of the Group’s management. At present, the Asiasoft Group (the “Group”) comprises 8 companies, as follows.

Asiasoft Corporation Plc (Paid-up baht 308 million) a

PlayPark Co.,Ltd. (Paid-up baht 5 million)

Asiasoft International Co.,Ltd. (Paid-up baht 100 million)

Asiasoft Online PTE LTD (Paid-up S GD 2 million)

AS Online SDN.BHD (Paid-up MYR 4 million)

A Capital Co.,Ltd. PlayPal Co.,Ltd. (Paid-up baht 0.5 million) (Paid-up baht 25 million)

Fun Box Co.,Ltd. (Paid-up Baht 40.0 million)

Remark : a The other 9.80% of shares are held by third parties with expertise in software development.

The Group’s main business is in online entertainment, as detailed below. Company

1. Asiasoft Corporation Plc (“AS”) 2. Asiasoft International Co., Ltd. (“ASI”) 3. PlayPark Co., Ltd. (“PlayPark”) 4. A Capital Co., Ltd.. (“A Capital”) 5. FunBox Co.,LTd. (“Fun Box”) 6. PlayPal Co., Ltd. (“PlayPal”) 7. Asiasoft Online PTE LTD. (“ASO”)

8. AS Online SDN. BHD. (“ASM”)

Country

Main business

Thailand Online game services business and distribution of games in Thailand Thailand Investment arm of the Company Thailand Web portals for online games and web advertisement services through its web site “www.playpark.com” Thailand Investment arm of the Company Thailand Online game services business Thailand Development of PC and online games which receives BOI Certififfiicate from Board of Investment Singapore Operate online game service and distribute PC games in Singapore and Malaysia Malaysia Online game services and providing support to ASO in its online game service as well as its distribution of prepaid cards in Malaysia

For the online game service in Vietnam, the Company has sub-licensed the right to operate online game business to CONG TY TNHH CHAU A MEM (“CTCM”), a Vietnamese third-party joint investor, to provide online game services in the Vietnamese market under the trade name “AsiaSoft”, as the Company was unable to directly invest in Vietnam due to restrictions on foreign investment. Moreover, the Company lacked expertise in the online gaming business in Vietnam. The sub-license thus provides a means of testing the Vietnamese online gaming market. However, after the opening up of the Vietnamese market to free trade on 11 January 2008, the Company plans to undertake a direct investment in the online game business in Vietnam, which is expected be completed by 2010.

Overview of the Group’s Business Nature of the Group’s Business The Group is Southeast Asia’s leading provider of online entertainment services relating to online games, with the largest market share based on service income from online games in Thailand and Singapore and the second largest market share in Malaysia and Vietnam in 2007 (Source: IDC). The Group launched its online game services for the fiffiirst time in Thailand in 2007 with “Ragnarok Online”, which was an immense success, with the highest number of Peak Concurrent Users of over 110,600. As of 31st December 2009 there were a total of 23 online games available in 4 countries: Thailand (19 games), Singapore (7 games), Malaysia (7 games) and Vietnam (8 games). During the past 3 years, the provision of online game services generated the Group’s main income, accounting for 75% of the Group’s total income. The provision of online game services in all of the above countries except Vietnam is done through the company incorporated in that particular country. In Singapore and Malaysia, the services are provided through the Company’s subsidiaries, ASO and ASM. Each of these companies has their own servers to provide services to users in each country and to efffiificiently accommodate a large number of gamers using the services simultaneously (Currently, ASO’s servers handle the provision of services in both countries and ASM is in the process of preparing its own servers to provide services to gamers in Malaysia). As of 31st December 2009, the server system in Thailand (the Company) and Singapore and Malaysia (ASO) has the capacity to handle up to 249,000 and 86,7 00 Peak Concurrent Users, respectively. In the case of Vietnam, the Group has sub-licensed the provision of online game services to CTCM while the Group provides advice relating to the system and marketing and receives remuneration from CTCM in the form of revenue sharing. However, after the opening up of the Vietnamese market to free trade on 11 January 2008, the Group plans to undertake a direct investment in the online game business in Vietnam to increase growth opportunity of the Group in the future. The Group generates income from the online game business from the sales of @Cash prepaid cards to gamers who use the cards to add air time, to exchange for points or as virtual money to buy in-game items. There are 2 types of prepaid @Cash cards. The fiffiifirst type is the plastic cards, which are sold by distributors, Internet cafes and convenient stores in more than 17,645 locations in Thailand, 1,303 locations in Singapore and 2,260 locations in Malaysia. The second type is the electronic cards, which are sold electronically via various systems such as e-pay, terminals, mobile phones and the Group’s online payment systems @Easy and @Shop. Payments may be made by cash, money transfer or credit cards (as the case may be). The @Cash prepaid cards can be used in all online games of each company within the Group in each country. Moreover, the prepaid @Cash cards can also be used in all online games of other companies that are the Group’s business alliances. In addition, in order to provide support to the online game services, the Group has established game information centers to answer technical questions and questions relating to playing instructions through its call centers and via email 24 hours a day as well as through the Counter Service “@Club”.

As of 31st December 2009, the Group was granted the rights to service online games totalling 23 online game tittles in 4 countries, as follows. Online game

Type of game a

Type of revenue model b

1. Ragnarok Online 2. Maple Story 3. Yulgang 4. Granado Espada 5. Legend of 3 Kingdom 6. CABAL 7. Ghost Online 8. Huang Yi Online 9. Dekaron 10. WFFM 11. Rappelz 12. 12 Sky 13. Atlantica 14. Monster Forest 15. Warrior of the 3 Kingdoms 16. Audition 17. GetAmped 18. Grand Chase 19. Freestyle Street Basketball 20. Sudden Attack 21. Summoner Master Online 22. Richman Online 23. Vanilla Cat

MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG Casual Casual Casual Casual Casual Casual Casual Casual

Hybrid Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale

Remarks : a MMORPG is a game which can handle a large number of gamers playing simultaneously. These gamers can have spontaneous interaction with

each other through the server system/Casual Game is a game with cute, colorful characters, which gamers do not have to spend a lot of time and develop skills to play the games. b Air Time Sale is a revenue model charging of game services according to playing time, Item Sale is a revenue model charging of game services through the sale of in-game items, Hybrid Sale is a combination of above revenue models.

Apart from the online game business shown above, the Group also distributes online and PC games of the leading domestic and foreign. The Group’s income also comes from @Cafe membership fees collected from Internet cafes in Thailand for the right to provide the Group’s online and PC game services to their customers within each shop. Moreover, the Group also operates related businesses such as the advertising in online game website and website game portals www.playpark.com.

Structure of the Group’s Income

The Group’s main income by type of business can be divided into 3 main types, as follows. Type of Revenue 2550 base on the Baht % consolidated Million fiffiinancial statements (million baht)

2551

2552

Baht % Million

1. Revenue from online game service

1,167

1,166

1,199

2. Revenue from distribution business

335

358

251

3. Other income

Total Revenues

1,559

100.0

1,612 100.0 1,520

100.0

The Group’s revenues can be classifififfiied by geographical area into 2 types as follows.

Type of Revenue 2550 by geographical Baht % areas based on the Million consolidated fiffiinancial statements (million baht)

2551

2552

Baht % Million

Baht Million

1.Revenue from 930 operation in Thailand

1,027

1,048

2. Revenue from operation abroad

629

585

471

Total

1,559 100 1,612

Products and Services

100 1,519

100

The Group engages in the business relating to online entertainment services. The Group’s business is divided into 2 main types, namely the provision of online game services and game distribution which have details as follows: Online Game Operator Online game is computer game which is played on the Internet and gamers can compete and chat with other gamers in the game spontaneously through the server system on which the main game programme and gamers’ information are stored. Online game operators shall provide services to gamers whose computers have the client programme installed and are connected to the Internet and the gamers register to play games through the online games’ web site. However, Online games do not include games which operate on LAN system only. The online game business is the source of the Group’s main income, accounting for an average of 75% of the Group’s total income in the past 3 years. The Group operates its business on a comprehensive basis to enable the efffiificient provision of online game services to gamers in each country, from acquiring game licenses, marketing and publicity, establishing game information centers and payment channels. Another important task is to prepare the computer system for the provision of services, including

the server system, computer equipment and software, client programmes as well as creating web sites for online games. Each company in each country has its own separate server system, except Malaysia, which uses the server system in Singapore (by 2009, however, ASM install its own server system to provide online game services to gamers in Malaysia and commercial within 2009). As of 31st December 2009, the Group provides online game services in total of 23 games in 4 countries, as follows. Service Number countries (games) Thailand

Singapore

Malaysia

Vietnam

Online games for which services are provided as of 31st December 2009 Cabal, Yulgang, Maple Story, Ragnarok, Granado Espada, Ghost Online, Sudden Attack, Summoner Master Online, Audition, FreeStyle Street Basketball, Richman, Dekron, WFFM, Atlantica, Vanila Cat, Legend of 3 Kingdom, HY Online, Rappelz และ Grand Chase Cabal, Yulgang, Maple Story, Sudden Attack, Audition, Getamped และ Worrior of the 3 Kingdoms Cabal, Yulgang, Maple Story, Sudden Attack, Audition, Getamped และ Worrior of the 3 Kingdoms Cabal, Ragnarok, Getamped, Legend of 3 Kingdom, HY Online, Richman, 12 Sky, และ Monster Forest

In the case of Vietnam, the Group has sub-licensed the right to provide online game services to CTCM while the Group provides advice relating to the system and marketing and receives remuneration from CTCM in the form of revenue sharing. However, after the opening up of the Vietnamese market to free trade on 11th January 2008, the Group plans to undertake a direct investment in the online game business in Vietnam, as the Group

sees the growth potential of the Vietnamese market. The Group is currently conducting a study on investment possibilities in such market, which is expected to be completed by 2009. In order to provide support to the online game services, the Group has established game information centers to answer technical questions and questions relating to playing instructions through its call centers and via email 24 hours a day as well as through the Counter Service “@Club” for customers who wish to contact in person. This service allows gamers to enjoy playing games uninterruptedly and continuously. Moreover, the close contact between the Group and gamers through such information centers allows the Group to follow the gamers’ playing behaviour on a continuous basis, thereby enabling the Group to understand and provide services to target customers to promptly satisfy their individual needs. Furthermore, the Group operates related businesses to support the online game services. For example, www.playpark. com, a game portal web site which is a game center and connecting point to other games, including online and PC games. Moreover, it is a venue for downloading games and a center for the web community to exchange data, pictures and opinions. It is also a source of information relating to information technology and lifestyle goods as well as a platform for the launch of new games. The Group’s other businesses include online advertisement in online game website and www.playpark.com

Details of Online Games Currently Available 1. Types of Online Games The Group is Southeast Asia’s leading online game operator, providing services of a total of 23 games in 4 countries as of 31st December 2009. The games can be divided into 2 main types, as follows: The types of online games which the Company operated st as of 31 December 2009 are as follows:

Type of Games

Online Games

1. MMORPG Ragnarok Online Maple Story Yulgang Granado Espada Legend of 3 Kingdom CABAL Ghost Online Huang Yi Online Dekaron WFFM Rappelz 12 Sky Atlantica Monster Forest Warrior of the 3 Kingdoms 2. Casual Game Audition GetAmped Grand Chase Freestyle Street Basketball Sudden Attack Summoner Master Online Richman Online Vanilla Cat

Revenue Model

Hybrid Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale ltem Sale ltem Sale ltem Sale ltem Sale ltem Sale ltem Sale ltem Sale ltem Sale

Remarks : *Air Time Sale is a revenue model charging of game services according to playing time, Item Sale is a revenue model charging of game services through the sale of in-game items, Hybrid Sale is a combination of above revenue models.

1.1 Massively Multiplayer Online Role Playing Game (“MMORPG”) MMORPG is an online game which can handle a large number of gamers simultaneously and every gamer can have interaction with each other in real time (Real Time Interaction), which enables the gamers to compete or befriend others as in real life. The story of the games is mostly about action adventures to defend oneself or war adventure, with the following general characteristics: • Gamers play one or more of the characters in the game simultaneously, using the Multi Character Control System: MCC). Each character has a continuous role and different strengths and weaknesses. • Gamers can increase the level and collect various items such as weapons or points to increase the strength of the character and differentiate itself from other characters and can also exchange and trade in-game items. • The life of the characters will be based on events or stories that occur in real life such as weddings, accepting other characters as disciples or masters, forming a group to ffiifight against opponents etc. • There is no winning or losing in the game but the game will continue its story endlessly. • Most gamers are loyal to the game, partly due to the nature of the game which requires a considerable amount of time to move to the next level in the game. In the 2009, income from MMORPG game services accounted for 61.7% of the total income from online game services, or 43.8% of the total income. 1.2 Casual Game Casual Game is an online game with cute, colourful cartoon characters. A Casual Game is normally relatively easy to play. Gamers do not need a large amount of time or skills to play and can usually fiffiinish the game in a short period of time, thus making the game suitable for relaxation. In the 2009, the Group’s income

from Casual Game services accounted for 38.3% of the total income from online game services, or 27.1% of the total income. 2. Online Game Service Fee At present, the Group charges fee for the online game services through the following 2 methods: 2.1 Air Time Sale Gamers pay fee for the online game service according to the time spent playing the game. This method is mostly used for MMORPG games, with the rate per hour and the rate per day from Baht 3.98-5.60/hour and Baht 9.87 - 12.60 per day, depending on the type of game and the amount of air time purchased. In the 2009 the company has only Rangnarok Online game which contribute revenue 1% of the total revenue in the 2009 2.2 Item Sale This method is usually used for casual games where the online game operator allows gamers to play the game for free of charge in order to sell in-game items such as weapons, clothes and accessories to gamers who will decide whether or not to buy the items. The sold items are considered the Group’s income. However, their price will vary depending on the country in which services are provided, marketing policies in the relevant period and the number of offered items. Items offered in packets will be at a lower price. At present, revenue model of online game services around the world are changing from Air Time sale to Item Sale due to the belief that allowing gamers to play games for free fiffiirst will attract both existing and new groups of gamers to try and play the games, and thus will increase the opportunity of the Group for higher income through the sale of in-game items.

Distribution In providing online game services, the Group distributes 2 types of goods: 1) @Cash prepaid cards for the payment of online game service fee and 2) client programmes, which gamers have to install on their computers before their fiffiirst time plays. The Group believes that effective distribution provides an important channel to access the Group’s target customers. 2.1 Distribution of @Cash prepaid cards The Group distributes @Cash prepaid cards which are used for paying the online game service fees. When gamers buy a card, they will receive a serial number and password to be used in the online registration to increase air time, exchange for points or to be used as virtual money to buy in-game items in every game of each country. Each card will have a maximum lifetime of 90 days (for Thailand) and 365 days (for Singapore and Malaysia) from the date of registration. Moreover, the virtual money in the card can be used to pay for online game service fees and SMS services provided by companies that are the Group’s alliance. In this regard, each company within the Group has a separate @Cash payment system and distributes the cards at different prices, as follows. The Group’s selling prices of @Cash prepaid cards in each country as of 31st December 2009. Country Thailand Singapore b Malaysia c

@Cash cards selling price (approximately) a Baht 28 - 888 SGD 5.35 - 32.10 (approximately Baht 125 - 748) MYR 12 - 72 (approximately Baht 121 - 727)

Remarks : a. selling tax included b . calculated at the exchange rate of Baht 23.2882/ SGD 1 c. calculated at the exchange rate of Baht 10.1001/ MYR 1

@Cash prepaid cards are distributed in two ways, as follows. (1.) Through the distributors Most sold @Cash prepaid cards are plastic @Cash cards distributed through the distributors, which account for more than 44.5% of the total sales of @Cash cards in the recent period. • 7-11 convenient stores: The cards are sold directly to customers at the 7-11 stores located throughout the country. • Computer and game shops: such as companies that have a network of shops selling game products, game products wholesalers and computer product wholesalers. Such distributors may sell @Cash cards directly to gamers through their own network of shops or resell to retailers who then sell the cards to gamers. • Internet cafes: Internet Cafes allow customers to rent their computers and provide Internet connection service. The @ Cash cards are sold to gamers to play games in the Internet cafes. (2.) Through electronic means The Group began selling electronic @Cash cards a few years ago. The sales of electronic @Cash cards account for less than 55.5% of the total sales of all @Cash cards. Electronic @ Cash cards can be purchased by cash, money transfer or credit cards (as the case may be) through the electronic system, as described below. Thailand : • Web sites: including the Group’s web sites @Shop and @Cash Online (for @Cafe members only). • Mobile phones: @Cash on Mobile is the sale of electronic @ Cash cards via mobile phones and gamers pay by sending an SMS through their AIS network for prepaid system • @Cash on E-Pay: This is an electronic payment system. Gamers make payment through the terminal and receive vouchers for using in the online registration to pay online game service fee.

Singapore and Malaysia : • Online Credit Card: This is the sale of electronic @Cash cards through www.passport.asiasoft.net where payment is made by credit cards. • MOL e-Pin: this is a payment system in Malaysia, which gamers can purchase electronic @Cash prepaid cards through MOL e-Points at the authorized shops. • S.A.M Kiosk e-Pin: This is a payment system in Singapore, which gamers can purchase electronic @Cash prepaid cards through the automatic S.A.M. machines. Diagram showing the distribution of @Cash prepaid cards Gamers can pay for the online game service fees by purchasing @Cash prepaid cards either in a form of plastic cards from the distributors or in electronic form from the various electronic systems as shown in the diagram below.

Distribution of client programmes The Group distributes client programmes, which are programmes that gamers have to install on their computers before their ffiifirst time plays, through the same distribution channels of @ Cash prepaid cards such as in a form of a CD sold together with an @Cash card or downloaded from the web site.

Competition strategies 1. Diversification of investment to countries with high growth potential At present, the Group diversifies its investment in the online game business in 4 Southeast Asian countries, namely Thailand, Singapore, Malaysia and Vietnam, in order to reduce risks associated with investing in Thailand or one particular country. The Group deploys regional management strategies which help to reduce operating costs from joint acquisition of licenses of online games, computers and related equipment, as well as sharing human resources, knowledge technology and expertise transfer. All of which could increase the chance of success of the Group’s business. 2. Increasing the number of online games and updating existing games As of 31st December 2009, the Group provides online game services in total of 23 games in 4 countries, making the Group number 1 online game operator in the Southeast Asian region based on the number of available online games. During the recent period, the Group has cooperated with game developers and game publishers in improving the features and contents of the Group’s online games to make them always updated. In addition, the Group plans to provide services for new games in each country to satisfy customers’ needs in terms of design, graphics, and technology. 3. Strengthening its market position The Group uses 3 main strategies to strengthen its market position, differentiate it from competitors and maintain its market leadership in the region. • Offering top online games which are well-known and popular in foreign markets

The Group believes that online games that are well-known and popular in foreign markets have outstanding features both in terms of design and contents, which would increase the chance for the Group’s success in marketing such games to customers in each target country. • Direct marketing activities with target customers With the Registered User base of the Group over 21.0 million in Thailand, Singapore and Malaysia, the Group has a strong starting point for its direct marking activities to continuously maintain and expand the Group’s customer base. Such direct marketing activities include the launch and introduction of new games, the promotion of online game playing through various in-game activities such as in-game competition and special seasonal activities as well as out-of-game activities such as meetings and parties among gamers, letters introducing new games and the Group’s support of social activities etc. • I ncreasing the number of and expanding the distribution channels The Group plans to increase the number of distributors of @Cash prepaid cards from currently which have the number of distributors more than 17,000 distributors in Thailand, 1,300 distributors in Singapore and 2,200 distributors in Malaysia by expanding the distribution network to cover more wide-ranging distribution channels such as bookstores, post offfiifices, pharmacies and mobile phone shops. This would increase the Group’s advantages over its competitors in maintaining the Group’s existing customer base and increasing new customer base. Moreover, the expanded distribution network would also be a good marketing channel through which marketing activities such as distribution of posters and advertisement can be directed at customers. In addition, the Group has improved the distribution channels for the sale of electronic prepaid cards in order to reduce the Group’s operating cost.

4. Marketing activities to stimulate the sale of in-game items As the majority of services of online games operated by the Group are charged through the sale of in-game items, the Group focuses on direct marketing activities with gamers to encourage them to purchase in-game items regularly such as selling in-game item package in each month, establishing Item Shop and Item Mall on web sites and sending newsletter and SMS to gamers etc. 5. Effififfiificient online game information centers Online game information centers provide an important service which enables gamers to play games smoothly and continuously, resulting in game loyalty and increased playing time. Currently, the Group provides game information through its call centers and e-mail throughout 24 hours as well as through the Counter Service @Club for customers who contact the information center in person. The Group aims to improve the quality of the information service and obtain adequate personnel and equipment to meet the needs of customers, whose number is expected to increase in the future. 6. Development of the server system for the online game service The Group believes that a good server system enables gamers to interact with one another smoothly, continuously and rapidly, which is the important part of online game playing. Therefore, the Group has continuously improved the server system’s capability and increased the size of its communication circuit to accommodate the increasing number of gamers. As a result, the Group is able to provide efffiificient services in terms of consistent and adequate speed of the network connection, with fewer errors and information losses, which consequently reduces the chance of

service disruption. In addition, the Group has constantly improved the information security system to prevent gamersâ&#x20AC;&#x2122; information and secrets from being stolen. 7. Appropriate and competitive online game service fee It is the Groupâ&#x20AC;&#x2122;s policy to fiffiix the online game service fees at the rates that appropriate for customers in each country. For most of its services, the Group allows customers to play games for free and charges for its service through the sale of in-game items to increase the competitiveness of the Group with other operators both in the same industry and in different entertainment industries. At the same time, such rates must produce a good return for the Group. However, the Group does not have a price war policy.

Online Games Launched In Thailand

2003 : Ragnarok Online

ASIASOFT

2005 : Maple Story

2006 : Yulgang Online

ASIASOFT

2006 : Audition

2007 : Cabal

ASIASOFT

2007 : Granado Espada

2008 : Sudden Attack

ASIASOFT

2008 : Free Style Ghost Online

2009 : Dekaron Atlantica

ASIASOFT

2009 :

WFFM

Vanilla Cat

Richman

ASIASOFT

Progress Continuously

Industry Trends and Competition Online Games Market 1. Global Online Game Market Overview Online games are an important part of the online entertainment market, which consists of 3 main industries, namely music, online games and videos. At present, the value of the global online game market is approximately USD 8,847 million or Baht 300,798 million, which is expected to grow continuously in the next 4 years at the Compound Annual Growth Rate (CAGR) of 25.2% per year. The total market value in 2011 is expected to be Baht 399,636 million. The expansion of broadband internet is the main propeller of the growth of this industry. Total value of the global online games industry Global Online Games Revenue (Unit: Baht Million) 2549

2550

2551

2552

2553

CAGR (%)

2554

129,982 175,202 235,144 300,798 359,176 399,636 25.2

Source : Strategy Analytics , calculated at the exchange rate of Baht 34 per USD

2. Overview of Southeast Asia Online Games Market The Southeast Asian region is the target market for the online entertainment services of the Group, which consist of 6 countries: Thailand, Singapore, Malaysia, Vietnam, Philippines and Indonesia. IDC estimated that the CAGR of the market value in the next 5 years will be 16.3% per year with the region’s total market value of Baht 5,883 million in 2008 and estimated in 2013 market value of Baht 12,501 million. For the estimated in 2009 market value of Baht 7,226 Million. Therefore, the Group has ample opportunities to expand the market in the future.

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

Moreover, operators in the online games industry enjoy a number of advantages over operators in other online entertainment industries such as PC games, arcade games, movies, music and karaoke, as follows. • Online games are cheaper and easily accessible Online games can be played anywhere that has the Internet connection. The majority of gamers in this region play online games in Internet cafes, as it is inexpensive, convenient and is a meeting place for gamers. There are more than 24,000 Internet cafes in Thailand, 1,200 in Malaysia and 20,000 in Vietnam. However, in Singapore, most people play online games from their own computer due to the advanced Internet network in Singapore. In comparison to other online entertainment services, the cost of playing online games is still lower. • The majority of online gamers use the services on a continuous basis. Due to the nature of online game playing, which promotes group relationships through competition or contact with other

gamers who are in different places at the same time, especially MMORPG games, in which each game plays a different role in a team and helps each other complete the mission in the game, gamers find online games more entertaining and interesting. Moreover, gamers have to take time to develop skills in the games in order to be the winner, thereby increasing gamers’ relationship to the games. • Low level of piracy problem The piracy problem of music, PC games, computer programmes and other entertainment products is a major and unsettled problem for operators in this region and has so much impact on their operations that some operators have been driven out of business. On the other hand, there is less piracy problem for online game operators because the main components of online games programme are contained in the servers of the operators, which gamers cannot access. Moreover, the client programme, which is a programme for installing on the gamers’ computers before their ffiifirst time plays, is inexpensive. Therefore, the piracy problem of online game is not as severe as in the case of other copyrighted work in the form of CDs, DVDs or cartridges, which can be easily copied and distributed. • Higher Internet and PC penetration rates Higher Internet and broadband penetration rates continued to expand the pool of gamers in the region. Similarly, higher PC penetration rates due to lower PC prices and better PC specifications also boosted the market. 3. Overview of online game industry in Thailand, Singapore, Malaysia and Vietnam The Group provides online game services in 4 countries: Thailand, Singapore, Malaysia and Vietnam. The online game industry in these countries is growing at a high rate. In the past, most online game operators were small operators which offered a limited number of online games, mostly MMORPG games, and

charged for their services through air time sale. However, today the competition in the industry is growing rapidly due to the entrance of large operators and the continuous launch of new online games. Furthermore, the change in the revenue model from air time sale to free playing but paid for in-game items, has contributed to the greater intensity of competition in the online game market. The online game licensing fees are an important operating cost for operators in this business. At present, most game operators in the above countries normally acquire licenses of online games that are popular and/or successful in other countries from Game Developers or game Publishers in foreign countries rather than developing the games themselves. However, online game operators began to develop their own games in order to reduce the increasing cost of licensing. Based on IDC’s data, the ratio of online gamers to internet users in 2009 of Thailand, Malaysia, Singapore and Vietnam is still quite low comparing to other countries where the online game market is more developed. This is partly due to the fact that the groups of online gamers are unvaried and mostly consist of young people whereas gamers in developed markets are adults who can generate income such as casual gamers, females, working people and families. Therefore, the online game markets in this region still have a huge capacity to grow. The industry trends and competition in the online game markets in Thailand, Singapore, Malaysia and Vietnam can be summarised as follows. Industry trends and competition in the online game market of Thailand From IDC’s data, the Thai online game industry started in 2003. Before that there were a few online game operators who mostly did not charge for their services. Later in 2003, there were more game operators, including the Company, which launched “Ragnarok Online” and “Dragon Raja”. Subsequently, the online game industry has grown continuously and received a wide interest from gamers. The increasing number of online game operators also began to commercially launch their services. IDC estimated that the

value of the online game market from 2008-2013 based on the income from the online game service will grow at the CAGR of 12.2% is as follows The value of the online game market and number of online gamers in Thailand for 2007 - 2013

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

There are currently around 8 large online game operators in Thailand, each providing services for several games. The Company is the market leader, having approximately 51.0% of market share based on income from online game services in 2008. Market share of online game operators in Thailand in the 2008 Online Game Operators Asiasoft True Digital Entertainment Ini3 Xinxere Goldensoft NC True Others Total

Market Share (%) 51.0 22.0 9.4 3.3 3.3 3.0 7.9 100.0

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

Major contributing factors to the growth of the online game business in Thailand • Growth of broadband Internet service In the past 2-3 years, the broadband Internet service business has been growing rapidly due to intense competition among the service providers both in terms of the services and price. Currently, the service fee for the 3.0-4.0 mb/second speed is around Baht 600 per month, which is quite low. Therefore, the broadband Internet service has become very popular. As online game playing requires speed for downloading data and to make the game more enjoyable, the availability of broadband Internet service has increased the interest in online game playing as well as the accessibility of online games to new customers. • Variety of available online games In the recent period, online game operators have launched new online games which have variety of both features and contents. This variety enhances the enjoyment of online game playing, increasing gamers’ choices and attracting an increasing number of targeted customers to try online games. • More VASs. As competition becomes more intense over the next few years, support services will become a key factor in retaining gamers and reducing subscriber migration. SPs are looking to enhance the customer experience through 24-hour call center services, regular content updates, road shows and other social events, as well as promotional campaigns through the various media channels. Online gaming SPs are expected to offer more of such VASs to meet gamer expectations.

Industry trends and competition in the online game market of Singapore According to IDC’s data, the online game industry in Singapore is smaller than the online game industry in Thailand. In 2009, the size of Singapore’s online game market based on income from online game services is around Baht 657 million, IDC estimated that the value of the online game market from 20082013 based on the income from the online game service will grow at the CAGR of 8.7% as follows. The value of the online game market and number of online gamers in Singapore for 2007 - 2013

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

Market share of online game operators in Singapore based on income from online game services in the 2008 Online Game Operators AsiaSoft Soft-World Sing Gium Others Total

Market Share (%) 71.6 11.2 8.5 8.7 100.0

Major contributing factors to the growth of the online game business in Singapore • More frequent updates of existing games or new game launches. With the free-to-play model being dominant in the market, it will be more challenging for SPs to retain current gamers. SPs will need to constantly upgrade existing games or offer new virtual items for sale to attract gamers to return to the game. • Government’s policy in making Singapore the center of digital exchange The Singaporean government has a policy of making Singapore the center of digital exchange. Online games are indeed a kind of digital communication. Such policy is well received by both the public and private sectors, which has attracted a number of game developers from abroad to invest in Singapore. It is expected that the domestic online game market will be developed, and expanded to the neighbouring countries. • Cheaper, more advanced communication network The internet and wireless communication network in Singapore is highly advanced, which contributes to the growth of online gaming business and caters for future development of both online games and games on mobile phones. Furthermore, the service fee of broadband internet in Singapore continues to decrease, which has resulted in higher usage of broadband internet by both new and existing internet users. The rate of broadband internet usage in Singapore is therefore continuously increasing.

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

Industry trends and competition in the online game market of Malaysia

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

According to IDC’s data, the online game industry in Malaysia is also smaller than the online game industry in Thailand. In 2009, the size of Malaysia’s online game market is around Baht 1,124 million, IDC estimated that the value of the online game market from 2008-2013 based on the income from the online game service will grow at the CAGR of 14.6% as follows.

Major contributing factors to the growth of the online game business in Malaysia

The value of the online game market and number of online gamers in Malaysia for 2007 - 2013

Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, calculated at exch. rate of Baht 33.16/USD

Market share of online game operators in Malaysia based on income from online game services in the 2008 Online Game Operators Asiasoft Cubinet Run Up MyCNX CibNet Others Total

Market Share (%) 15.7 15.0 11.5 11.1 10.8 36.0 100.0

• Casual games spur interests. Many casual games were introduced in 2008, as SPs were aiming to pull in non–hardcore gamers. Although MMORPGs remained the revenue mainstream, the growing numbers of casual games available in the market helped to spur interests from both hardcore gamers and nongamers. The lack of “grinding” in casual games will give this genre the edge in terms of having a more relaxed gaming experience • Low barriers to entry. The Malaysia online gaming market has successfully made the transition from the subscription model to the virtual item model. A vast majority of online games now require no subscription fees; gamers have to simply download the games to play. This arrangement means that the ball is at the gamers’ court, as they are allowed to decide if they want to invest in the game. This model has directly impacted the industry in a major way, as more new gamers are entering to test games. This has also increased the competitiveness of SPs, as the barriers of entry have been dramatically reduced Industry trends and competition in the online game market of Vietnam According to IDC’s data, the online game industry in Vietnam only started in 2005 but has a high growth rate. The estimated value of Vietnam’s online game market in 2009 is Baht 2,109 million, IDC estimated that the value of the online game market from 2008-2013 based on the income from the online game service will grow at the CAGR of 23.3% as follows.

PC game market The piracy problem of PC game remains a major problem for operators in the industry today. Even though governments in various countries have tried to tackle the piracy problem in goods, there are still many cases of violation of PC game copyrights. The reason is that PC games can be easily copied and distributed and can generate high profit for the violators, as the violators do not pay the license fees, the major cost for this business, to copyright owners. As a result, the number of copyright violators is constantly increasing. Although PC games that are legally produced and distributed are of better quality, the majority of gamers still buy illegal PC games, as they are cheaper and more widely available. Due to the above reasons, operators that have purchased copyrights experience lower profit or incur losses. Moreover, carrying out Source : IDC, ASEAN Online Gaming 2009 - 2013 Forecast and Analysis, marketing activities and distribution strategies to compete with the calculated at exch. rate of Baht 33.16/USD illegal products is not an easy matter. Market share of online game operators in Malaysia based on income from online game services in the 2008 The value of the online game market and number of online gamers in Vietnam for 2007 - 2013

Online Game Operators VinaGame VTC Game FPT Online Others Total

Market Share (%) 58.0 25.3 8.4 8.3 100.0

Major contributing factors to the growth of the online game business in Vietnam â&#x20AC;˘ Internet penetration and broadband access. Internet adoption in Vietnam is growing at a robust pace. Dial-up connections are no longer popular and are used mostly in the underdeveloped regions of Vietnam. Instead, broadband connections with higher transfer speeds and stable quality have become increasingly widespread. Greater Internet penetration and faster connections will continue to expand the online gaming market in Vietnam.

Game Distributor Nature of business

The Groupâ&#x20AC;&#x2122;s business as a game distributor is divided into 2 types: distributor of online games and distributor of computer software, as detailed below. 1. Online game distributor The Group is an online game distributor by importing online game products, including prepaid cards and client programmes from abroad for sale to domestic customers in each country. At present, the Group is a distributor of only one game, World of WarCraft. Moreover, the Group is also a distributor of online games of other companies that have formed a business alliance with the Group through the @Cash prepaid system. However, the Group operate only as a distributor in this business. The Game operators will operate the server system for the online game services themselves.

PC Games

Distribution and distribution channels The Group shall almost distribute Online games and PC games through computer and game shops. As regards to the distributors for Online games of alliance company, the Group shall distribute of the @Cash prepaid cards as described in clause Distribution of @Cash prepaid cards.

Characteristics of customers and target customers The Group’s target customers may be divided into 2 main groups, as follows. • Gamers The Group’s target customers are the same as the Group’s online game customers, which generally consist of children, teenagers, school and university students. However, PC gamers are gamers who like to play individually or within a limited number of gamers, which vary according to types of games. For example, fiffiighting games are played by the Hard Core gamers, strategy games are played by educated gamers, adventure games and virtual world games are played by general gamers, and academic games are played by school and university students etc.

Competition strategies 1. Online game distributor The Group focuses on the development and the promotion of the @Cash payment system to the general community of gamers by increasing the number of and expanding the distribution channels to cover extensive areas. The Group believes that the ability of gamers to use the @Cash cards with both the games of the Group and those of other companies which are the Group’s business allies helps to increase the popularity of the @Cash system, as it offers convenience to gamers in paying for the online game service fee. Moreover, the distributors do not need to store a large number of prepaid cards for each game. 2. PC game distributor Although the Group has reduced the sale of PC games due to the piracy problem, the Group will continue to distribute PC games, as it is a related business which can share the resources used in the provision of online game services. The Group shall select only well-known and popular PC games for distribution. Its main strategies are: • Increasing the number of Internet cafes that are members of @Cafe; • Producing and distributing PC game programme packages which are of high quality and are different from piracy programme; • After-sale services by customer service division responsible for answering any queries from gamers over the phone • Instituting legal proceedings against copyright violators

2. PC Game distributor

These games require installation of game programmes on the gamers’ personal computer. Most of these games can only be played by one person at a time or within a limited number of persons. PC game programmes are sold in a form of a diskette or DVD. However, certain types of PC games may have a network system which allows several gamers to play simultaneously, for example, using LAN (Local Area Network) or the server system of the game operator. However, players’ information is not stored on such system. At present, the Group is a PC game distributor in Thailand, Singapore and Malaysia.

• Internet cafes The Group grants the right to Internet cafes that are members of @Cafe to install game programmes on their computers to provide services to their customers. The membership fee is fiffiixed at a speciffiified rate.

Risk Factors Before making a decision to invest in the Companyâ&#x20AC;&#x2122;s shares, investors should consider carefully the risk factors set forth in this part as well as other information that appears in this prospectus. Moreover, the following risk factors described herein do not cover all risks that exist and could have a material adverse effect on the market price of the Companyâ&#x20AC;&#x2122;s ordinary shares. Therefore, other risk factors of which the Company is not aware or which the Company considers to be immaterial at this time may become material risk and the results of operations of the Group may be adversely affected in the future.

1. Risks from external factors 1.1 Risks from changes in the laws and regulatory requirements regarding State control Currently, online game business in Thailand is regulated by the Ministry of Culture in governing game operating license and censoring game content before launching game as well. Department of Intellectual Property, the Ministry of Commerce also governs an issuance of copyright code (DIP code) to copyright owner for game disc production. Additionally, the Ministry of Culture is also being prepared for game rating system to identify appropriate game content. On the other hand, regulation relating to online game industry in Singapore, Malaysia and Vietnam is not as strict as in Thailand. Furthermore, the online game market in Malaysia and Vietnam is relatively new; therefore, government regulation affecting online game industry and internet cafes is unclear. However, additional change in government regulation relating to online game industries or more restriction concerning game playing could have a material and adverse affect on the Groupâ&#x20AC;&#x2122;s business, fiffiinancial condition and results of operations in the future 1.2 Risks from strong competition and increase of new online game operators At present, the online game market in Thailand, Singapore, Malaysia, and Vietnam is increasingly competitive as more companies enter into the online game markets and continuously introduce a wider range of online games to customers. As online game market is growing, the number of online game operators in each country is also increasing: Country

Major Online game operators in each country

Thailand

Asiasoft, True Digital Entertainment, Ini3, Xinxere, Goldensoft, Other

Singapore Malaysia Vietnam

Asiasoft, Soft-World, Sing Gium, Other Asiasoft, Cubinet, Run Up, MyCNX, CibNet, Other Vina Game, VTC Game, FPT Online , CTCM, Other

Estimated online game market in 2009 (Baht Million) 2,368 657 1,124 2,109

Source : IDC, ASEAN Online Gaming 2009-2013 Forecast and Analysis Notes : Using exchange rate 1 US$ : THB 33.16

However, the Group believes that they are able to retain its market share leader position in the future as the Group has strength in procuring game licensing and marketing in regional scale providing a lower cost of license fee. The Group also has the large existence online gamer base community which will highly attract MMORPG gamers, has an efficient @Cash prepaid card distribution network to reach target gamers, and has a strong expertise in selecting games and efficient customer service. As of 31st December, 2009, the Group offered a total 23 online games tittles servicing in 4 countries including Thailand (19 games), Singapore (7 games), Malaysia (7 games) and Vietnam (8 games), respectively.

2. Business risks 2.1 Risks from unsuccessful operating of the Group’s licensed online games Operating licensed online game of the Group is required substantial initial investment, including licensing fee, cost of the server system and related computer equipments, as well as marketing expenses. If revenues generating from licensed online games do not cover those costs or are not over projected, results of operations and proffiifit margin of the Group may be adversely affected in the future. Consequently, the Group may consider to write-off its deferred licensed fee of any particular game in full amount if tendency of the revenue generating from that game is continuously declined, which will directly affected the Group’s results of operations and proffiifit in such accounting period. In order to increase its opportunity for operational success, the Group will use its experience as well as carefully study game content and do market analysis of target gamers before making a decision to invest in new online games. In addition, the Group has a clear policy to diversify its source of revenue into various licensed online games by launching more online games in each country. Currently, the Group has offered a total 23 online game tittles in 4 countries and has been continuing to launch new online games in the future. 2.2 Risks from unsuccessful selling in-game virtual items In the past, the Group’s main revenues was derived from the air time sale of its online games. However, its main revenue at present mostly comes from the sales of in-game virtual items. This was partly due to the gamers in online game market have changed their behaviours towards free-to-play online games and will purchase the in-game items whenever desire. Moreover, the online game operators believe that charging service only through selling in-game items would attract more gamers. Consequently, the Group may have risk of service revenue generating from selling in-game items decline due to the intensive competition in free-to-play online game business model. In addition, if a large number of gamers playing online game but do not buy in-game items continuously, the Group’s business, fiffiinancialcondition and results of operations may be adversely affected in the future. However, various characters and features in online games will encourage gamers to buy in-game items in order to differentiate playing feature, appearance and competition from other gamers. Thus, the Group believes that the offensive marketing and direct activities to target gamers group will stimulate and attract online gamers to buy in-game items continuously.

2.3 Risks from dependence on the Group’s main distributor The Group currently distributes the @Cash prepaid cards through more than 5,000 convenience stores (CP7-11) of C.P. All Public Company Limited (“CPALL”) via outright sale with credit terms. The sale of prepaid cards represented more than 70% of the Group’s total revenues from online game service. If CPALL discontinues its business or stops ordering @Cash prepaid cards, the Group’s business, fiffiinancial condition and results of operations may be adversely affected in the future. However, the Group believes that the likelihood of the main distributor’s stopping order the @Cash prepaid card is minimal since the Group and CPALL have always maintained a good business relationship. Moreover, the demands for @Cash prepaid cards remain high throughout the country, which generate steady income for the distributor. The Group also has another distribution channels to sell its @Cash prepaid card through more than 11,000 outlets including convenience stores (excluding CP7-11) and retail outlets In addition, the Group also sells the cards electronically through e-pay, mobile phones (@Cash on mobile) and various web sites including @Shop, @Easy and @Cash online. 2.4 Risks from dependence on a few of internet service providers The Group currently provides online game services by renting the Internet Data Center (IDC)for the installation of its server system, and bandwidth from a few Internet Service Providers (ISPs). For the services in Thailand, the Group rents IDC from True Internet Data Center Co., Ltd. , CAT Telecom Public Company Limited and TT&T Subscriber Services Co.,Ltd. and rents bandwidth from True Internet Data Center Co., Ltd. For the services in Singapore rents the server from Equinix Singapore Pte. Ltd and StarHub Ltd and rents bandwidth from StarHub Ltd and Singtel. For the services in Malaysia rents the server from Extreme Broadband Sdn Bhd and rents bandwidth from Global transit communication. If such ser-

vice providers are unable to provide good quality internet services or discontinue their operations, the Group’s online game services would be adversely affected. Moreover, the system failure may decrease the gamers’ enjoyment and satisfaction in playing the online games and thereby affecting the Group’s reputation and results of operations in the future. The ISPs referred to above are among the biggest providers in their respective country, with the backup and security systems, which meet international standards. 2.5 Risks from not being a copyright owner and/or developer of online games In providing online game services, the Group buys copyrights of games from the copyright owners who are developers or distributors of online games in foreign countries to provide online game services in a specififfiic territory for approximately 2-3 years from the commencement of its commercial launch at the fee rate agreed upon with the copyright owners. The copyright owners provide support in various aspects of the game services such as improvement of program, creating patch ffiifile, solving bugs etc. The Group may face risks if any licensed games that the Group operates are terminated or not renewed at the acceptable price and under acceptable conditions. There is also a risk of the copyright owners being unable to provide assistance or technical support to the Group to enable the Group to provide good quality services to gamers, which may affect the Group’s business, fi condition and results of operations in the future. In order to reduce such risks, the Group has a policy of procuring copyrights from various developers or distributors of online games, whose reputation is widely recognized. The agreement with the copyright owners will specify a renew term and conditions as the same in order to retain beneffiifit from such right while the games are still popular, in which MMORPG games and Casual Games have the useful economic life of 2-3 years.

2.6 Risks from online games copyright violations At present, some operators illegally import online game programmes whose copyrights have been granted to the Group, install them in their servers and provide services of such games through their own network at a lower fee service rate. This may result in the loss of part of the Group’s income. However, the services provided through the piracy servers are normally of poor quality both in terms of speed and ability to accommodate a large number of players simultaneously. Moreover, players can only play the games on the network of servers in which the games have been illegally installed and cannot play them on the Group’s network. Therefore, there are only a limited number of players in the community on such illegal network. Furthermore, operators violating copyright cannot solve the bugs in the game programs or technical problems that arise and therefore their services are not popular amongst game players. Therefore, the Group believes that the loss of part of income from such copyright violations will not materially affect the Group’s fiffiinancial condition. Moreover, in order to reduce the impact of such problems, the Group has build a team to proceed legal action against copyright violators.

counterbalance to the majority shareholders. Moreover, the majority shareholders have the power to manage the Group, with 4 of them being directors out of a total of 7 directors. All executive directors are also from the group of the majority shareholders. However, to counterbalance the management of the majority shareholders, the Company has appointed 3 independent directors who are outsiders to scrutinise the management of the executives and to look after the interest of the minority shareholders.

3. Risks from the majority shareholders’ inffllfluence in the policy and management of the Group After this offer of newly issued ordinary shares to the public, the shareholding proportion of Mr. Pramoth Sudjitporn’s group, the Group’s majority shareholder, will be 51.28% of the total paid-up capital, which will enable them to control the votes in the passing of all resolutions in the meeting of shareholders, except special resolutions which, according to the law, require a vote of three fourths in value of shares held by those present and eligible to vote. Therefore, other shareholders may not be able to gather votes to provide a

Shareholding Structure and Management Company’s Securities

As of 31 December 2009, the Company’s registered capital was Baht 316,000,000, divided into 316,000,000 ordinary shares with a par value of Baht 1.00 each, of which Baht 307,853,608 is paid-up capital, divided into 307,853,608 ordinary shares with a par value of Baht 1.00 each. The remaining registered capital of Baht 8,146,392, which is divided into 8,146,392 ordinary shares with a par value of Baht 1.00 each, will be reserved for exercises of warrants that the Company has issued and allocated to its directors and employees as detailed below.

Securities Offering to Directors and Employees On 3 May 2007, the Company’s Extraordinary General Meeting of Shareholders No. 1/2007 passed a resolution approving the Company’s issue and offering of warrants (“Warrants”) to directors and employees of the Company and subsidiaries as a reward for their work and as further motivation to work for Asiasoft Group in the long term. Up to 16 million units of the Warrants will be offered at the price of Baht 0 per unit with an exercise ratio of 1 warrant: 1 ordinary share. The exercise price will be at par value of Baht 1 per share. The Warrants’ term is up to 3 years commencing from the date of issue and offering (on 16th May 2008) and the exercise period is 3 years as detailed below. Exercisable Warrants / Total Number of Allocated Warrants

Exercise period from the date ofif issue and offer of Warrants

30% 30% 40%

12 months 18 months 24 months

The directors and employees of the Company and subsidiaries may exercise their rights under the Warrants on the last business day of May and November throughout the term of the Warrants except the last exercise which will be on 15th May 2011. These Warrants will not be listed on the Stock Exchange of Thailand. According to the Annual General Meeting of Shareholders for 2009 of Asiasoft Corporation Public Company Limited (the “Company”) held on April 23, 2009 passed a resolution to approve the dividend payment. The dividend shall be paid from the retained earnings and net profit of the company at the rate of Baht 0.63 per share. The dividend expenses are more than 80% of the net proffiifit after income tax. This has affected on the benefiffiit of ESOP warrant holders who has allocate according to the program regarding the issuance and offering for sale of the warrants to purchase ordinary shares to directors and employees of the Company (ESOP) No.1/2008. Therefore, the Company has to adjust exercise price and exercise ratio of ESOP Warrants as stated in Clause 6.2 (v), so the ESOP warrant holders shall not be decreased their rights as follows: ESOP No.1/2008 Before adjustment After adjustment (excess of 80% of the net profiffiifit) Exercise price (Baht per share) Exercise ratio (warrant : ordinary shares) Number of shares to be allotted (shares)

1.000

1:1.000

1:1.019

15,278,000

15,568,282

Moreover, the new exercise price above is Baht 0.98 that is lower than par value of the Company’s ordinary shares and in

accordance with the regulation of the rights and duties of the issuer and the holders of warrants to purchase new ordinary shares of the Company No.1/2008 dated April 28, 2008 Clause 6.2 (viii) deffiifined to use the par value of the Company’s ordinary shares (par value is Baht1 per share) for new exercise price and due to some employees who have been allocated a number of warrants has resigned, so the remaining of the available warrants are 15,278,000 units and the ordinary shares for reserving the exercise ratio of ESOP after adjustment are 15,568,282 shares. The Company has allotted the ordinary shares to reserve for the exercise ratio of ESOP are 16,000,000 shares, so the Company needs not to allot the additional ordinary shares. The adjustment of exercise price and exercise ratio of the case above shall be effective on the fiffiirst day of XD sign posting or on April 24, 2009 onwards.

Share Repurchase for Fififinancial Management The Board of Directors’ Meeting, No. 6/2008, held on November 13, 2008 has solved the approval of the share repurchase program for fiffiinancial management purposes, manage and maximize the beneffiifits of Company’s excess liquidity and increase return on equity (ROE) and earnings per share (EPS), as summarized as follows: 1. The maximum amount for the share repurchase is 85 million baht. 2. Number of shares to be repurchased 8,500,000 shares (at par value of 1.00 baht each) or equal to 2.83% of the total of paid-up capital. 3. The repurchase period will be started from December 1, 2008 to May 31, 2009. 4. Period for the resale of share is from December 1, 2009 to May 31, 2012

As of 22nd May 2009, the Company repurchased the share in the amount of 8,500,000 shares which was 59,632,271.42 Baht in total. Company’s Shareholders As of the latest book closing date, 30 December 2009, Top Twelve Company’s shareholders were as follows: Names of Shareholders

1. 2. 3. 4. 5. 6.

Mr. Pramoth Sudjitporn a Asia Investment Partners Limited b Mr. Tan Tgow Limc Miss Saowalak Jitsamrita Mr. Lertchai Kanpai Miss Seet Jing Huan, Jenniferc

7. Asiasoft Corporation Public Co., Ltd.

8. Thai NVDR Co., Ltd.d 9. Mr. Suriya Suriyachat 10. Mr. Pichai Vijakkapan 11. Mr. Chaiyan Jitpuentham 12. Mr. BoonKiet Auesudkij

No. of Shares % Holding 130,876,840 30,000,000 29,523,990 27,000,000 15,305,700 15,000,000 8,500,000 3,782,100 2,561,909 2,000,000 2,000,000 1,540,000

42.51 9.75 9.59 8.77 4.97 4.87 2.76 1.23 0.83 0.65 0.65 0.5

Remarks : a Mr. Pramoth Sudjitporn is a spouse with Miss Saowalak Jitsarit. b Being company for investment in Lombard Asia III Fund, which support and manage by Lombard Investment, Inc., head offififfiifice at San Francisco, USA. c Mr. Tan Tgow Lim is a spouse with Miss Seet Jing Huan, Jennifer. d Being subsidiary of the Stock Exchange of Thailand (the Stock Exchange of Thailand holds 99.99% of registered capital). Thai NVDR Co., Ltd. is responsible for issuing and selling Non-Voting Depository Receipts (NVDRs) to investors.

Moreover, Asia Investment Partners Limited is the company for investment which was hold the whole shares by Lombard Asia III Fund, having head offfiifice at Hong Kong, Lombard Asia III Fund has emphasize to invest in Thailand and other countries

in Southeast Asia and has policy to invest in long-term shares in potential competitive company. Unit holders of such fund are famous institution investor such as the California Public Employees’ Retirement System (CalPERS), Asian Development Bank, International Finance Corporation of the World Bank Group, and Fund of Funds which established by CDC Group PLC. List of major shareholders who, according to their conducts, were able to assert their inflffllfluences towards the management policy and operation procedure of the company with ulterior motives (Shareholding groups or shareholders who owned over 10% and holding position as the company’s director or sending representative as the company’s director), are Mr. Pramoth Sudjitporn’s Group and Mr. Tan Tgow Lim’s Group.

Management Structure The Company’s management consists of the Board of Directors, the Executive Committee, the Audit Committee and Management as detailed below:

Board of Directors

As of 31 December 2009, the Company’s Board of Directors had 7 members, all of whom have attended the Thai Institute of Directors’ training programmes, as follows :

1. 2. 3. 4.

Name Mr. Tan Tgow Lim Mr. Pramoth Sudjitporn Mr. Lertchai Kunpai Mr. Surasak Khaoroptham

Position Chairman of the Board Vice Chairman of the Board Director Director

at the meeting during 2009 5/5 5/5 4/5 5/5

5. Mr. Chalermphong Jitkuntivong

Independent Director and Chairman of the Audit Committee

5/5

6. Mrs. Tanyaporn Munmee

Independent Director and the Audit Committee Member

5/5

7. Mrs. Monluedee Sookpantarat

Independent Director and the Audit Committee Member

5/5

Mrs. Monluedee Sookpantarat the Audit Committee Member has adequate expertise and experience to review creditability of the ffiinancial reports. Miss Nantaporn Sangduen is the Secretary to the Board.

Authorized Directors to bind the Company pursuant to its Certificate of Incorporation: Mr. Pramoth Sudjitporn signs signature together with Mr. Lertchai Kunpai or Mr. Tan Tgow Lim and afffiifix the company seal. The principal power, duties and responsibilities of the Board of Directors 1) 2) 3) 4) 5) 6) 7)

Overseeing, monitoring and managing the Company’s operations to ensure that they are carried out pursuant to the law, the Company’s objectives and the Company Charter and are in line with resolutions adopted at shareholder meetings on the basis of good corporate governance principles, and ensuring that action taken is in line with the rules and regulations prescribed by the SET and the SEC. Determining or revising the list of authorized directors to bind the Company. Setting policies, strategies and direction for the Company’s operations and supervising the management to ensure effective and effififi cient implementation of the designated policies to create highest economic benefififi ts to its shareholders and for the Company’s sustained development. Making decisions on important matters such as business plans, budgets, major investment projects, management authority and any other matters prescribed by law. Appointing any sub-committee(s) or individual(s) e.g. Executive Committee, Audit Committee and Managing Director, to help in the monitoring, follow-up and supervision of the Company’s management on matters which are substantial within the Board’s jurisdiction. This includes evaluation of performance and determination of remuneration for the members of those sub-committee(s) or individual(s), or delegation of authority of any duration as is deemed expedient. Such authority may, however, be terminated, revoked, modiffiified or revised by the Board. Taking action to ensure that there is an effiffiicient and effective system in place for internal control/internal audit and risk management and monitoring and following up those issues on a regular basis. Preparing the Board’s Annual Report(s) and taking charge of preparing and disclosing fiffiinancial statements to give its shareholders information on the Company’s ffiinancial status and its performance in the preceding year.

However, delegation of authority to the above sub-committee(s) or individual(s) shall not include any delegation of authority which will empower any of them to authorise a transaction between the Company or any of its subsidiaries and the above sub-committee(s) or individual, or their authorised representative with a possible conflffllict of interest of any kind. In addition, the Company is required to ask for prior approval from the Company’s shareholders regarding the Company’s entering into a connected party transaction and acquisition or disposal of its material assets in accordance with the SET applicable regulations. If any director or individual may have a conflffllict of interest (as stipulated in Notification(s) of the SEC and/or the SET), that director(s) or individual(s) shall not have a right to vote or be authorized to approve that transaction in any way.

Moreover, the Board has delegated authority to any of the above sub-committee(s) or individual(s) to execute transactions concerning the Company’s operations and investment in its normal course of businesses in which the scope of authority and ffiinancial limits, at each level, are clearly defiffiined. Such delegation of authority may not be made without setting a ffiinancial limit.

Audit Committee

As of 31 December 2009, the Audit Committee had 3 members as follows: Name 1. Mr. Chalermphong Jitkuntivong 2. Mrs. Tanyaporn Munmee 3. Mrs. Monluedee Sookpantarat

Position Independent Director & Chairman of the Audit Committee Independent Director and the Audit Committee Member Independent Director and the Audit Committee Member

at the meeting during 2009 8/8 8/8 8/8

Mr. Chalermchai Duphatsakul is Secretary to the Audit Committee.

The principal power, duties and responsibilities of the Audit Committee 1) to review the Company’s fiffiinancial reporting process to ensure that it is accurate and adequate; 2) to review the Company’s internal control system and internal audit system to ensure that they are suitable and efffiificient, to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit; 3) to review the Company’s compliance with the law on securities and exchange, the Exchange’s regulations, and the laws relating to the Company’s business; 4) to consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year; 5) to review the Connected Transactions, or the transactions that may lead to conffllflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefiffiits of the Company; 6) to prepare, and to disclose in the Company’s annual report, an audit committee’s report which must be signed by the audit committee’s chairman and consist of at least the following information: (a) an opinion on the accuracy, completeness and creditability of the Company’s fiffiinancial report, (b) an opinion on the adequacy of the Company’s internal control system, (c) an opinion on the compliance with the law on securities and exchange, the Exchange’s regultions,or the laws relating to the Company’s business,

(d) an opinion on the suitability of an auditor, (e) an opinion on the transactions that may lead to conflffllicts of interests, (f) the number of the audit committee meetings, and the attendance of such meetings by each committee member, (g) an opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter, and (h) other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors; to perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee.

Executive Committee

As of 31 December 2009, the Executive Committee had 3 members as follows: The principal power, duties and responsibilities of the Executive Committee 1) Planning and determining policies, direction and strategies for the Company’s operations to keep them in line with the Name 1. Mr. Pramoth Sudjitporn 2. Mr. Lertchai Kunpai 3. Miss Arunee Poontawee 2) 3) 4) 5)

Position Chairman of the Executive Committee Executive Committee Member Executive Committee Member

at the meeting during 2009 8/8 8/8 8/8

targets set by the Board for further submission to the Board for approval. Determining business plans, budgets and principles governing the operations to keep them in line with the targets set by the Board. It is also authorised to supervise and monitor the Company’s operations to ensure that they are in line with the policies, business plans and business strategies approved by the Board, subject to the laws, any conditions, the relevant rules and regulations and the Company’s Charter. Determining the Company’s organizational structure, management authority, remuneration policy and salary structure, as well as appointing, employing, re-locating, terminating, and determining salaries, remuneration and bonus for em ployees at executive levels. Taking any action in the normal course of the Company’s business such as the purchase of goods or licenses or investment in properties which exceed Baht 20 million but not exceeding Baht 40 million per each contract. Undertaking fiffiinancial transactions with banks/fififfiinancial institutions pertaining to the opening of accounts, lending and borrowing, procurement of credit lines, pledges, mortgages, provision of collateral/security including the purchase/sale and registration of title over land in the normal course of its operations, as considered appropriate, which does not exceeding Baht 40 million.

6) 7) 8)

Considering the Company’s proffiifits and loss so as to recommend to the Board whether an interim or annual dividend should be declared. Delegating authority to one or several individuals to act on its behalf on any matter, as considered appropriate, under the supervision of the Executive Committee and for such period as it deems ffiifit. Such authority may, however, be terminated, revoked, modified or revised by the Executive Committee. Carrying out other duties as may be assigned from time to time by the Board.

In no circumstance will the above authorisation empower the Executive Committee or its authorised representative to authorise any transaction between the Company or any of its subsidiaries and the Executive Committee or their authorised representative with a possible conflffllict of interest of any kind. However, this rule may be waived if the authorisation involves a transaction which is entered into on an arms' length basis in the normal course of the Company's business and is within the specified scope of the Executive Committee's power and/or its authorised ffiinancial limit, subject to the criteria, terms and procedure under the Company’s articles of association and the applicable rules of the SEC. Moreover, the Board may revise, where necessary or appropriate, any of the Executive Committee’s duties and responsibilities.

Management (according to the definition of the SEC and the SET) As of 2 March 2010, the Company’s Management consisted of 8 executives as follows: Name 1. Mr. Pramoth Sudjitporn 2. 3. 4. 5. 6. 7. 8.

Mr. Lertchai Kunpai Mr. Kittipong Prucksa-aroon Mr. Park Sung Hee Mr. Sunt Rojpornwatana Miss Arunee Poontawe Mr. Adthapong Kosulawatha Mrs. Suwannee Tangchitporn

Position Chief Executive Offfiicer, Acting Marketing Director &On-line Games Project Director Managing Director and acting for the Sales Director. Deputy Managing Director Business Development Director IT Infrastructure Director Finance Director Management Information System Director E-Business Director

The principal power, duties and responsibilities of Chief Executive Offfiificer 1) Supervising, monitoring and approving transactions/matters pertaining to the normal course of the Company’s busi ness and that of its subsidiaries to ensure that they remain in line with the Board’s policies and decisions. It is also authorised to delegate authority, as considered appropriate, to the Managing Director, executives or one or several individuals in the Company and its subsidiaries to take any action relating to the Company’s regular and daily operations and those of its subsidiaries. 2) Taking action and managing operations/activities involving the administration of the Company and its subsidiaries. 3) Taking any action in the normal course of the Company’s business or that of its subsidiaries such as the purchase of goods and licenses, and investment in properties which does not exceed Baht 20 million per each contract, and delegating authority for payments to personnel at executive levels in the Company and its subsidiaries to purchases, contractual hire/employment for properties and services for the beneffiifit of the Company and its subsidiaries. 4) Delegating authority to the Managing Director, employees at the executive level or one or several individuals in the Company and its subsidiaries to take any action considered appropriate on behalf of the Chief Executive Offfiificer (the CEO), discharging specififfiic duties (such as purchases, employment, payment) under the CEO’s supervision and within the timeframe the CEO sets. Such delegation of authority may be terminated, revoked, revised or modified by the CEO. 5) Taking action on behalf of and representing the Company and its subsidiaries to third parties in matters relating and beneffiificial to the Company and its subsidiaries. 6) Appointing advisors in various areas necessary for the operations of the Company and its subsidiaries within the budgetary framework authorised each year by the Board. 7) Carrying out any other duties which may be assigned to them from time to time by the Board or the Executive Committee. The CEO will report directly to the Executive Committee. He or she must act in accordance with the guidelines and policies set by the Executive Committee. Moreover, the CEO will have no authority to take any action or be involved in any transaction or matter between the Company or any of its subsidiaries and the CEO or his/her authorised representative with a possible conflffllict of interest of any kind. However, this rule may be waived if the authorisation involves a transaction which is to be undertaken on an arms’ length basis in the normal course of the Company’s business within the scope of his/her powers and/or fiffiinancial limit set by the Board subject to the criteria, terms and procedure under the Company’s articles of association and the applicable rules of the SEC.

The principal power, duties and responsibilities of the Managing Director 1) Supervising, monitoring and authorising matters pertaining to the normal course of the Company’s operations to ensure they remain in line with the policies set by the CEO. The Managing Director is also authorised to delegate authority to executives or one or several individuals to take any action involving the Company’s regular operations as he or she sees fiffiit.

6) Issuing orders, rules, announcements and memoranda to ensure that work is carried out pursuant to the Company’s policies and in its interests and for the sake of maintaining order within the organisation. 7) Taking action on behalf of and representing the Company to third parties in matters relating and beneficial to the Company.

8) Carrying out any other duties which may be assigned from time to time by the CEO. 2) Undertaking action and managing operations / activities involving the general administration of the Company’s affairs. The Managing Director will come under the CEO’s jurisdiction and will report directly to him or her. The Managing Director 3) Employing, appointing, re-locating, dismissing and will act in accordance with guidelines and policies set by the CEO. terminating Company employees below the executive level as well as Moreover, the Managing Director will have no authority to take any determining and adjusting their remuneration and bonuses, together action in or relating to transactions or matters between the Comwith appointing individual(s) to represent the Employer on the Com- pany or any of its subsidiaries and the Managing Director or their pany’s Provident Funds Committee. authorised representative with a possible conflffllict of interest of any kind. However, this rule may be waived if the authorisation involves 4) Authorising action in the normal course of the Company’s a transaction which is undertaken on an arms’ length basis in the operations such as the purchase of goods and licenses, and invest- normal course of the Company’s business and is within the scope ment in properties which does not exceed Baht 10 million per each of its powers and/or the ffiinancial limit set by the CEO, subject to contract, and delegating the authority for payments to Company’s the criteria, terms and procedure under the Company’s articles of executives to purchases, contractual hire/employment for property association and the applicable rules of the SEC. and services for the benefit of the Company. 5) Delegating authority to employees at the executive level or to one or several individuals to take any action considered appropriate on behalf of the Managing Director in order to discharge specific duties on his or her behalf (such as purchases, employment, payment) under his or her supervision and within the timeframe that he or she sets. Such delegation of authority may be terminated, revoked, revised or modififfiied by the Managing Director.

Company Secretary

The Board of Directors’ Meeting No. 5/2008 held on 13th August 2008 has the resolution to appoint Mr. Chalermchai Duphatsakul as the Company Secretary with effective on 13th August 2008 and has the rights, duties and responsibilities in accordance with the laws. Mr.Chalermchai Duphatsakul passed Training Program organized by Thai Institute of Directors Association (IOD) i.e. Company Secretary Program (CSP27/2008) and Effective Minute Taking Program (EMT11/2008).

Recruitment of Directors and Executives Currently, the Company has no Nominating Committee for selecting directors. This matter is therefore left to the Board, which will select individuals and propose them to the shareholders based on a variety of factors such as their educational background, competencies and business experience. They must also be qualiffiified under the Public Limited Companies Act, B.E. 2535, Notififfiication of the SEC and other relevant laws. Director selection will be made by majority vote at shareholder meetings in accordance with the following criteria and procedure: (a) A shareholder will be entitled to one vote for each share. (b) The vote to select directors will be done on an individual basis. (c) The person with the most votes will be selected as a director. If there is more than one vacancy, the persons with the most votes in descending order will be selected as directors. Where there is a tie, the Chair of the shareholder meeting has a casting vote. Directors will be in offfiifice for a term of 3 years. At each Annual General Shareholders Meeting, one-third of the Board will retire with those who have been longest in offfiice retiring ffiifirst. A retiring director may be re-appointed for another term.

Executive Remuneration

(1) Monetary Remuneration

(a) Directorsâ&#x20AC;&#x2122; Remuneration Director (Unit : Baht)

1. 2. 3. 4. 5. 6. 7.

Mr.Tan Tgow Lim Mr. Pramoth Sudjitporn Mr. Lertchai Kunpai Mr. Chalermphong Jitkhuntivong Mrs. Tanyaporn Munmee Mrs. Monluedee Sookpantarat Mr. Surasak Khaoroptham

2009 Remuneration 360,000.00 240,000.00 240,000.00 240,000.00 240,000.00 240,000.00 360,000.00

Meeting Allowance 240,000.00 160,000.00 160,000.00 -

(b) Remuneration of Executive Committee and Management

2009

Unit : Baht

Persons 3 8

Executive Committee Member Executives b

Remuneration a 280,000.00 16,416,002.66

Remarks: a b

Comprising salaries, bonus, contributions to Social Security Funds and Provident Funds, overtime payments, welfare beneffiifits and Meeting Allowance. As defififfiined by the SEC and the SET, and includes Mr. Pramoth Sudjitporn, as the CEO and Mr. Lertchai Kunpai as the Managing Director.

Other Remuneration As compensation for their work and incentive for them to work with due diligence in the Company in the long-term, a resolution was adopted at the Extraordinary Meeting of Shareholders No. 1/2550 on 3 May 2007 to issue and allocate warrants on the Companyâ&#x20AC;&#x2122;s ordinary shares to its directors and employees and those of its subsidiaries. Warrants to be issued and offered for sale will be valid for up to 3 years from the date of issue. Up to 16 million units will be offered at the exercise ratio of 1 warrant to 1 ordinary share at the exercise price of Baht 1 each. Warrant Certificates will be allocated to directors and executives as follows:

Name

Position

1. Mr. Tan Tgow Lim 2. Mr. Pramoth Sudjitporn 3. Mr. Lertchai Kunpai 4. Miss Arunee Poontawe 5. Mr. Chalermphong Jitkuntivong 6. Miss Tanyaporn Munmee 7. Mrs. Monluedee Sookpantarat 8. Mr. Park Sung Hee 9. Mr. Sunt Rojpornwatana Total

Director & Executive Director & Executive Director & Executive Director & Executive Director Director Director Executive Executive

Allocated Warrants (Unit) 700,000 600,000 500,000 240,000 300,000 300,000 300,000 260,000 40,000 3,240,000

% to total Warrants (%) 4.4 3.8 3.1 1.5 1.9 1.9 1.9 1.6 0.3 20.4

Human Resources

The number of employees and remuneration for the Group of Company (excluding directors and executives), is detailed below: Number of Employees Online Games Project Business Development IT Accounts & Finance Sales Marketing Corporate Service Executive Offiffiice Internal Control Offfiifice Publishing Others

As of 31 December 2009 Company 145 4 51 25 22 57 69 1 2 -

Salaries Bonus Others b

15 299 2009 226.51 28.81 33.43

Total

288.76

Total Employees’ Remuneration (Baht Million)

376

Subsidiaries a 83 5 63 12 11 50 43 9 8

Total 228 9 114 37 33 107 112 10 2 8 15 675

Remarks: a Including ASO, ASI, PlayPal and PlayPark, ASM, Funbox. b Comprises of contributions to the social security funds and provident funds, social welfare, overtime, commissions and allowances.

Since it commenced operations, there has been no labour dispute within the Group.

Policy on Human Resources Development The Company places great importance on personnel development with a view to equipping its employees with the right knowledge, skills and competencies to carry out their duties and strengthen the Company for further prosperity. It is the Company’s policy to arrange training for employees by providing both in-house and external training courses, particularly with its suppliers, who are online game developers. This will help enhance employees’ knowledge of IT, computer games and others. Employees also learn on-the-job as it is the Company’s policy to transfer knowledge and skills among its employees while they work.

Corporate Governance The Board is aware of its role, duties and responsibilities towards the Company and its shareholders and has already approved written policies pertaining to supervision and monitoring of its operations. Criteria and operating guidelines have been set, in line with Principles of Good Corporate Governance of the SET to support the Good Corporate Governance in practice. Moreover, the Company must comply with the various rules and regulations prescribed by the SEC and the SET in every respect and review its governance policies and evaluate the result pursuant to those policies at least once a year. On 20 June 2007, the Board of Directors Meeting No.1/2007 resolved to create policies on the supervision of its operations, which will be used as guidelines. They can be divided into 5 sections, as follows:

1) The Rights of Shareholders The rights of shareholders covers a variety of rights such as the right to purchase, sell or transfer shares, the right to share in the Company’s profiffiits, the right to attend shareholder meetings, and the right to express an opinion and to participate in making important decisions in the Company. Such decisions include the selection of directors, approval of major transactions with a potential impact on the Company’s direction, and revisions of the Company’s Memorandum and Articles of Association. It is the Company’s policy to promote and facilitate the shareholders’ exercise of their various rights, by such means as the following: • Distribute information concerning shareholder meetings on the Company’s website before sending out paper documents, and elaborating on the rights of shareholders in attending the meeting and voting.

• Where a shareholder cannot attend the meeting in person, he or she is given the opportunity to appoint an independent director or any individual as his or her proxy at the meeting by using any of the forms of proxy sent by the Company together with the convening notice for the meeting. • Before a scheduled meeting date, shareholders are given the opportunity to send their opinions, recommendations and questions by e-mail to the Investment Relations Offfiificer or the Board Secretary. • The Company will arrange an appropriate time-slot for shareholders to make their comments and recommendation or raise questions freely on any agenda item before a resolution is adopted on that item. Adequate information has already been provided to shareholders for these meetings and the Company will arrange to have available staff who are well informed in each area under question, under the Board’s supervision, to respond to any questions or doubts raised from the ffllfloor. • All directors will attend the meeting so that shareholders may ask for further details or information on any relevant issues.

2) Equitable Treatment of Shareholders It is the Company’s policy to treat all shareholders equally and protect their rights in the interest of strengthening equitable treatment particularly for minority shareholders. For instance: · • Shareholders will be given equal opportunities and facilities. No action will be taken that will limit, violate or diminish their rights. · • The right to vote at meetings will be determined by the number of shares held by each shareholder at the rate of one vote for one share. · • Independent directors are assigned to take care of minority shareholders who may make recommendations, comments or complaints to them. These independent directors will give appropriate consideration to each issue. For example, in the case

of complaints, they will establish the facts and decide a suitable remedy. In the case that the independent directors consider that the recommendation has signiffiificant impact on those with vested interests or on the Company’s operations in general, that issue will then be submitted to the shareholder meeting for the shareholders’ consideration. · • Shareholders will be encouraged to exercise their rights. For example, minority shareholders will be given the opportunity to add agenda items before the scheduled meeting date or to nominate directors. The agenda, however, may not be expanded without prior notice to shareholders. · • The Board has taken measures against insider trading by relevant parties including directors, executives, employees and employees of the Group involved with that information (including the spouses and non sui-juris children of those individuals).

3) Role towards stakeholders The Company takes seriously the rights of all stakeholders such as customers, suppliers, employees or shareholders as well as the public and society overall. They will be treated by the Board in accordance with their rights, conditions, legal requirements and various related rules and regulations. Action will also be taken for co-operation between these various stakeholders according to their roles and duties to ensure smooth operations with stability and equitable returns for all parties. To ensure that stakeholdes receive their due, the Company has established an operating guideline in its Code of Conduct for Employees. The Code of Conduct has been distributed on the Company’s website and internal communications media such as the Intranet and the PR Board. The directors, executives and employees at every level must adhere closely to the Code of Conduct in their work. In addition, channels have been opened for stakeholders to communicate with, and comment or provide information to the

Board through independent directors. · • Shareholders : In its determination to achieve good performance, stable growth and competitiveness for the Company in the face of current and future risks, and to create added value for its shareholders in the long-term, it is the Company’s duty to disclose information for the sake of equity and transparency such that it will endeavour to protect the Company’s property and to preserve its good reputation to the best of its ability. · • The Company’s Board of Directors : The Board is aware of the rights of all stakeholders and the action to be taken to treat all fairly and equitably. · • Employees Employees are a valuable asset of the Company. Therefore the Company recruits people with the relevant skills and experience to ensure the Company’s growth and satisfy its requirements. Human resource development is ongoing to ensure that staff competencies are maintained at a high level and that staff are appropriately and competitively compensated vis-aà-vis leading companies. Moreover, the Company is focused on building up and reinforcing a good working culture and environment and treating its employees fairly on an equal basis. The Company looks after employees’ security and welfare through its Provident Funds and its provision of loans to employees, arrangements for fire-drills, provision of safety/security systems etc. · • Customers The Company focuses on customer satisfaction with its workforce of quality staff and excellent service together with its readiness to meet their demands. Customers are treated respectfully and responsibly and care is taken to keep information from them confidential. Customer feedback is encouraged with staff speciffiifically assigned to receive complaints.

• Suppliers The Company takes care to treat its suppliers in line with commercial terms and contractual obligations. Action is taken within a framework of fair competition avoiding cheating behavior. · • Competitors The Company functions within a framework of fair competition and has always avoided dishonest measures that try to eliminate competitors. Commitment to Communities, Society and the Environment Fully cognizant of its role as a part of society with a commitment for its wellbeing, public activities are supported in the interest of developing communities and the Environment. Its online games services are provided with a serious commitment to Society as it is the Company’s policy to provide games with suitable content without violence and with appropriate warnings in its games and advertisements. Seminars are arranged to encourage players to spend their time appropriately and to play their games properly. The Company is the ffiifirst on-line games operators in Thailand to provide an age-classiffiification for each game in accordance with the State’s age-classififfiication policy. It also makes a Game Master available for each game in order to check and monitor gamers’ various activities in the games and to ensure that no violence, gambling or other inappropriate activity is involved. Moreover, its on-line games services help to build gamers’ computer skills and expand the internet usage and internet network infrastructure, enabling the public to easily access data and various information. In addition, online games developed by the Group have contributed to the development of Thailand’s R & D in software and animation.

Disclosure and Transparency

Beside making complete and timely ffiinancial disclosure or disclosure of other information to the public via various channels in strict compliance with the law, the Company shall also make the following disclosures to show the transparency of its operations: · • Disclosure of information concerning performance by various sub-committees such as the frequency of their meetings. · • Disclosure of guildlines in recruiting directors, relevant evaluation guidelines and evaluation of the Board’s performance. · • Disclosure of remuneration policies for directors and high-level executives as well as the form, manner and amount of remuneration received by each member of the various sub-committees. · • Disclosure of policies created for protection of the environment and in support of society, and the results of their implementation. · • Report on policies of corporate governance and their implementation. · • Opportunity for the public to raise any concern/query via the Investment Relations Offiffiicer.

5) Responsibilities of the Board, its structure and various sub-committees The Board’s Structure The vision outlined by the Group is that: “We are determined to maintain our leadership in Online Entertainment Services involving online games in the South East Asian Region, with a focus on providing efffiificient services, developing our personnel to support the services and expanding investment to other high potential countries in the Region, under a transparent and accountable management pursuant to the principles of Good Corporate Governance”.

To realize this vision, the Board strives to maintain the highest ethical standards within the framework of the law, the Company’s objectives and its Charter as well as resolutions adopted at shareholder meetings with commitment, honesty, integrity and prudence in line with good operating practice so as to deliver highest economic value to the Company and maximum stability to shareholders. The Company’s Board of Directors comprises of people who have knowledge, skills and experience drawn from a variety of professions in the areas of PC games, online business, fiffiinance, marketing, law, management and other fiffiields beneffiicial to the Company’s work. The Board is free to decide in the best interests of the Company and its shareholders overall. This Board has played a part in determining (or approving) the Company’s Vision, Mission, Strategies, Targets, Business Plans and Budgets as well as supervising the performance of its management to ensure effective implementation of the Business Plans and Budgets for the greatest economic benefit for the Company and maximum stability for the shareholders. Action has also been taken to ensure that there is a process for regular evaluation of the adequacy of internal control, internal audit, risk management, ffiinancial reporting and follow-up of performance.

The Company has clearly separated the duties and responsibilities of its Board and senior executives. While the Board’s duty is to establish policies and supervise performance of high level executives pursuant to those policies, it is the duty of high-level executives to administer the Company’s affairs in various areas to ensure that these policies are implemented appropriately. The Chairman of the Board and the Chief Executive Offiffiicer must be two different individuals to ensure that there is a clear separation between the determining of supervisory policies and the administration of regular affairs. However, both of them will be representatives of majority shareholder groups, albeit different groups, which together constitute the Company’s founders.

Currently, the Company’s Board of Directors comprises of 7 members, 3 of whom are executive and 4 are non-executive. Three members of the Board are independent directors which, therefore, exceeds one-third of the Board thereby giving an appropriate balance vis-àa-vis executive directors. The Board has set up 2 sub-committees to help supervise operations of the Group, i.e. the Executive Committee and the Audit Committee which consists of 3 independent directors with a term of offiffiice of up to 3 years. The duties and responsibilities of those Committees have been expressly defined at previous shareholder meetings.

· · ·

Remuneration for Directors and Executives The Company has a policy of determining remuneration for its directors, both in monetary and non-monetary terms, openly and transparently. The remuneration shall be submitted for approval to the annual general meeting of shareholders. Criteria governing remuneration of directors are as follows: ·

• Appropriate and commensurate with the duties and responsibilities of each director. • At a level capable of attracting and retaining quality directors with suitable ability and knowledge. • Clear, transparent and easily comprehensible. • Comparable to the remuneration of directors in the same or similar industry(ies).

The remuneration for executives will be determined by the Board, both in monetary and non-monetary terms, in line with the Company’s performance and each executive’s performance. They will be set at such rates as are adequately attractive to retain quality senior executives and shall be comparable to rates of other companies in the same grade or operating in the same line of business.

Board Meetings Board meetings will be convened and conducted pursuant to the Company’s Charter, the laws governing public companies and the rules and regulations of the SET with special meetings to be convened, where necessary. The Chairman of the Board, as chairman of the meeting, will support the exercise of prudent discretion and will allow enough time for the meeting to ensure that major problems may be submitted and discussed by management with due diligence. An invitation to the meeting, together with the agenda items and supporting documents, will be sent to the Board at least 7 days before the meeting. All directors will be required to attend every Board meeting except in the case of an emergency. Minutes of the meeting will be properly and correctly recorded by the Company and will be accessible by shareholders for verififfiication. Report from the Board of Directors The Board will be responsible for preparing the Company’s ffiinancial statements including the Consolidated Fififinancial Statements for the Company and its subsidiaries and the Fififinancial Information to be presented in the Annual Report. Those ffiinancial statements will be prepared pursuant to the accounting standard generally accepted in Thailand based on appropriate, acceptable and consistence accounting policies. Discretion and care will be exercised to ensure that the Notes to the Fififinancial Statements disclose adequate vital information. Self-Evaluation by the Board/Committee Members To enhance the effiffiiciency of performance by its various Committees, arrangements are made by the Company to have members of each Committee evaluate their own overall performance so that they can together appraise and look at their performance and problems. Following this evaluation, the Board will analyse their performance and determine measures which will improve the Committees’ effiffiicacy.

Development of Directors and Executives The Company will support the attendance of its Board and senior executives at training courses which will be benefiffiicial to their performance and will enable them to exchange opinions, on a regular basis, with Board members and senior executives of other organisations. Such courses include those arranged by the Company’s employee training unit, units under the State’s jurisdiction and independent entities such as Thai Institution of Directors. It is an SEC requirement that directors of listed companies attend at least one of these courses, e.g. Director Certififfiication Programme (DCP), Director Accreditation Programme (DAP) and Audit Committee Programme (ACP) so that knowledge and experience gained can be used for the Company’s further development. Investor Relations The Board takes care that adequate information is disclosed to its shareholders, investors and other relevant parties. That disclosure must be correct, complete, transparent, comprehensive and on-time pursuant to Good Corporate Governance principles. It must include fiffiinancial reports, operating results and other related information as well as information which may have an impact on the pricing of its securities. Information and various newsletters will be distributed, through channels set up by the SET and the SEC including the Company’s own website (www.asiasoft.co.th or www. asiasoft.net) and will help ensure that investors, shareholders and related parties can use the information in their investment decisions. The Company plans to set up an Investor Relations Unit to monitor and provide information and newsletters, and to answer queries raised by shareholders, investors, analysts and the public in general.

Monitoring the Use of Inside Information (Inside Trading) The Company has introduced a policy and measures to

prevent the use of inside information which has not yet been disclosed to the public, for personal gain and securities trading: • Directors, executives, employees and workers within the Group must keep Company information and other inside information confiffiidential. • Directors, executives, employees and employees within the Group may not disclose any conffiifidential information or other inside information about the Group, or use it for their own gains or those of others, whether directly or indirectly, and whether or not it is for compensation. • Directors, executives, employees and workers within the Group may not buy or sell, transfer or accept the transfer of the Company’s securities through the use of confiffiidential or inside information about the Group, or take any other action using that confiffiidential or inside information which would cause the Group to suffer a loss, whether directly or indirectly. • Directors, executives, employees and workers of the Group who work in a unit which has acquired inside information should avoid buying or selling the Company’s securities for 1 month before disclosure of its ffiinancial statements to the public. This provision includes the spouses and non sui-juris children of directors, employees and workers of the Group. It is a serious offence to breach this provision. • Directors and executives are required to report to the SEC any change in their holding of securities or that of their spouse and non sui-juris children.

The Company will take disciplinary action against any of its directors, executives, employees and workers who breaches or fails to comply with the Company policy. The disciplinary action begins with a written notice and is followed by salary cut(s), unpaid temporary suspension from work and dismissal from employment, depending on the severity of the offence and the provisions in the Company’s Charter informing all directors, executives, employees and workers of the disciplinary action. Moreover, each director and executive has acknowledged in writing his or her duty to report his or her holding of the Company’s securities and those held by his or her spouses and non sui-juris children, and to report any change in such holdings to the SEC and the SET pursuant to section 59 and the penalty prescribed by section 275 of the Securities and Exchange Act, B.E. 2535. On the subject of providing supporting data to its afffiiliates, the Company has prescribed procedures to prevent information leaking, such as requesting a signed Confiffiidentiality Agreement and a ban against photocopying of documents without authorization.

Internal Control and internal Audit The Company’s Board of Directors and Audit Committee assessed the Company’s internal control systems by following the internal control system adequacy assessment form. They concluded that the Company’s internal control system is adequate and proper for the Company’s business, free from any material defect and can prevent the Company’s or subsidiaries’ properties from misuse or unauthorized use of the management. The Board of Directors and the Audit Committee also emphasized the Company’s enhancement of its corporate governance in accordance with the SET’s 2006 good corporate governance principles for listed companies.

1. Internal Control The Company has strongly emphasized the efffiiciency of its internal control systems at both the management and the operational levels with the aim to prevent or reduce possible risks. In this regard, the Company prepared a compliance manual to specify the duties, responsibilities and powers of staff and management, and to clearly separate the duties of operators, controllers and assessors from one another so as to create a proper system of checks and balances. Additionally, the Company hire Outsourcing Internal Audit to audit and assess the Company’s internal control systems and to ensure that the Company’s major activities and signififfiicant fiffiinancial activities are performed in accordance with the stipulated rules with maximum efffiiciency and to check the Company’s compliance with related laws and regulations (Compliance Control). To ensure that the Outsourcing Internal Audit are independent and able to perform its supervisory duty, the Board of Directors requires that the Outsourcing Internal Audit report the audit results directly to the Audit Committee and that the Outsourcing Internal Audit must be assessed its performance by the Audit Committee. In the Meeting of the Company’s Board of Directors No. 1/2009 held on 27 February 2009 and attended by all members of the Audit Committee, the Board considered and prepared the Company’s internal control system adequacy assessment form. After assessing the Company’s internal control system in 5 areas, namely (1) organization and environment, (2) risk management, (3) management supervision, (4) information and communication, and (5) follow-up and assessment, the Board was informed that the Audit Committee was of the same opinion as the extenal auditor and the auditor. Both parties have opinion that the Company’s internal control systems are adequate and proper for its business. So far, neither the Company nor the auditor has found any crucial defects in the internal control systems which could materially affect the Company’s ffiinancial condition or the auditor’s opinion of the

ffiinancial statements. The Company has also designed its internal control systems to conform with those suggested by the SET and with the international internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission or COSO. Summarized details of the Company’s internal control system are set out below. • Organization and Environment The Company has set up control systems for the work of the ffiinance and accounts, operations, organization, and personnel departments based on the good corporate governance principles and policies. • Risk Management The Company always takes into consideration the risk factors that are now encountered or expected to be encountered for analyzing and estimating impacts and chances of those risks as well as formulating countermeasures to prevent and manage those risks. The Company then prepares risk management reports to its management and follows up regularly. • Management Supervision The Company provides supervisory tools to its management through its development of various systems, including an application of ISO 9001:2000 quality management system for online game service provider to the Company’s quality management system, customer service and other activities. This supervisory tools emphasis on information’s reliability, the protection of Company’s properties and compliance with internal and external rules and regulations as well as information security. • Information and Communication The Company emphasizes on information systems and communication channels both inside and outside the Company by providing an intranet system and a website to serve all-level communication.

• Follow-up and Assessment The Company assesses staff performance twice a year. It also informs its operating results on a quarterly basis at an executive meeting and staff meeting.

system to store database of Internet Cafeé members of the Company including membership renewal and agreement issuance to its members. This tool was created for preventive audit system to reduce unintentional errors.

2. Internal Audit

Since the third quarter of 2006, the Company hired and appointed Associates Company Limited (DIA) to be the internal auditor of the Company. Cooperating with the internal audit offiffiice, DIA has audited each department and give opinions to the appropriateness of the internal control system as well as present suggestions in governing the Company to the Audit Committee in accordance with related regulations. DIA has continually assessed the internal control of the Company and report the assessment result of the overall internal control, internal control in corporate level and activity level.

The Outsourcing Internal Audit have been established to bolster the Audit Committee’s confiffiidence in the supervision and review of the accuracy of the fiffiinancial reports, the adequacy of information disclosure, the transparency of information, internal control and risk management. It focuses on having a preventive and creative audit policy and adheres to audit guidelines of international standard and good corporate governance principles. The audit system is developed in consistence with the fast pace environment of the Company’s business in order for the Company to have a transparent, auditable and reliable image. • Medium term plan To set up an acceptable audit standard, the internal control offfiifice emphasizes effective and preventive systems by utilizing advance tools and technology, preparing manual and develop audit standard for each system, utilizing computer system to support the audit process as well as setting up principles and alarm for the audit process • Quality assurance The Company has principles and guidelines for preparing itself for internal assessment and external assessment to ensure the effectiveness and efffiiciency in real practice and meet all objectives • Development of IT audit To create good control and audit system which benefififi t the Company, the Company has improved preventive efffiiciency of its computer system by developing web application such as @Cafée which is a

Dividend Payment Policy

In general, if Asiasoft Group has no funding requirement for additional investment or business expansion and has sufffiicient cash flffllow, Asiasoft Group has a policy to pay dividend to shareholders of the Company and its subsidiaries of at least 30.0% of net proffiifit of each company (according to each company’s ffiinancial statements) after deducting corporate income tax, legal reserves and other necessary reserves. Nevertheless, this dividend payment rate may be changed depending on the necessity and appropriateness, given that this change must provide the highest beneffiifit to the shareholders. A resolution of the Company’s Board of Directors regarding the dividend payment must be proposed to the Shareholder Meeting for approval, except for an interim dividend payment, which the Board of Directors may approve and then report to the next Shareholder Meeting.

Connected Transactions Procedure for Approval of Connected Transactions of the Company and Subsidiaries The Company has set up a procedure in accordance with the relevant SEC notififfiications to control the Connected Transactions between the Company or its subsidiaries and interested person in the present or in the future. The procedure requires the Audit Committee to comment on the necessity of the transaction and the appropriateness of the transaction price, taking into account that all the conditions must be considered in the ordinary course of business and comparing the price with that offered by third parties. However, if the Audit Committee does not have expertise in the subject matter of the transaction, the Company must provide a comment of independent expert or the Companyâ&#x20AC;&#x2122;s auditor on the transaction to support the decision of the Companyâ&#x20AC;&#x2122;s Board of Directors, Audit Committee or shareholders, as the case may be. The interested person shall have no right to vote on the transaction. Additionally, the Company shall disclose information on the Connected Transactions and the acquisition or disposal of major assets of the Company and its subsidiaries, in accordance with the rules prescribed by the SEC and SET, including the accounting standard prescribed by the Institute of Certififfiied Accountants and Auditors of Thailand.

Asiasoft International Co., Ltd. (ASI) (Holding Company)

Company or Individual / Type of Business

• A subsidiary in which 99.99% of the shares are held by the Company and has common directors.

Nature of Relationship

• Interest income

• Loan to related parties The Company has provided loan to ASI for investing in Malaysia

• Dividend income

Transaction Description

0.21

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 29 13.58

• ASI paid to ASC

Rationale for Transaction

The Connected Transactions between the Company or its Subsidiaries or Related Companies and Interested Parties in 2009 and 2008 (Unit: Baht Million)

Nature of Relationship

• A subsidiary in which 99.99% of the shares are held by the Company through ASI and has common directors.

Company or Individual / Type of Business

Asiasoft Online PTE LTD. (ASO) Online game service provider in Singapore and Malaysia

34.80

0.50

0.16

0.20 0.003

• Interest income

• Other receivables from related parties • Accrued interest • Accounts Payable

0.37

• Loan to a related company The Company has provided Long term loan to ASO for operation

• Accounts receivables The Company sold other products to ASO.

• Sales

Transaction Description

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 0.42 0.009 • The Company sold the products to ASO for use in its business at the price and on the conditions used in the Company’s ordinary course of business

Rationale for Transaction

AS Online SDN. BHD. (ASM) Distributor in Malaysia

Company or Individual / Type of Business

• A subsidiary in which 99.99% of the shares are held by the Company through ASI and has common directors.

Nature of Relationship

• Other receivables from related parties

• Interest income

• Loan to a related company The Company has provided Long term loan to ASM for operation

• Account receivable The Company sold other products to ASM.

• Sales

Transaction Description

0.38

0.06

10.82

18.92

0.06

14.35

0.03

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 0.03 0.43 • The Company sold the products to ASM for operate business at the price and on the conditions used in the Company’s ordinary course of business.

Rationale for Transaction

CONG TY TNHH CHAU A MEM (CTCM) • Online game service provider in Vietnam who sub-licensed game from Asiasoft Group only.

Company or Individual / Type of Business Transaction Description

• Other receivables from related parties

• Accounts receivables The Company and ASI collected the license fee for online games from CTCM under a sub-license agreement.

• A sub-licensee of online • License and services fee games from Asiasoft Group for online game service in Vietnam.

Nature of Relationship

0.45

13.41

3.65

6.60

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 20.40 22.74

• The Company sub-licensed online games to CTCM for online game service in Vietnam

Rationale for Transaction

PlayPal Co., Ltd. • PC and online game developer.

Company or Individual / Type of Business Transaction Description

• Accounts payable

0.05

0.73

• Interest income • Accrued Interest

11.70

0.19

• Long-term loan to a related company ; The Company has provided a loan to PlayPal for operations.

• License and services fee • A subsidiary in which 90.198% of the shares are • License and services fee held by the Company and has common directors.

Nature of Relationship

0.12

0.64

0.10

4.84

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 Rationale for Transaction

Nature of Relationship

• A subsidiary in which 99.99% of the shares are held by the Company and has common directors.

Company or Individual / Type of Business

PlayPark Co., Ltd. • Web portals for online games and web advertisement services.

0.24

0.31

• Accounts receivables

• Other payable from related parties

• Interest income

• Long-term loan to a related company ; The Company has provided a loan to PlayPark for operations.

• Dividend income

6.22

• Sales of Product

• License and services fee

Transaction Description

0.07

5.00

0.84

3.57

0.66

0.32

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 2.27 4.28 • Revenue sharing of advertising revenue

Rationale for Transaction

Nature of Relationship

• A subsidiary in which 80% of the shares are held by the Company and has common directors.

• A subsidiary in which 99.99% of the shares are held by the Company and has common directors.

Company or Individual / Type of Business

ASK Software PTE LTD. (ASK) • To distribute Online Softwares

ACapital • Holding Company

• Other receivables from related parties ; The Company reserved the expenditure for ACapital.

• Other payable from related parties ; The Company outstanding payment the shares.

Transaction Description

0.01

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 0.01

• The Company reserved the expenditure for ACapital

• The Company has outstanding payment the share.

Rationale for Transaction

Funbox • Online game service provider

Company or Individual / Type of Business

• A subsidiary in which 99.99% of the shares are held by the Company through A Capital and has common directors.

Nature of Relationship

• Long-term loan to a related company ; The Company has provided a loan to Funbox for operations.

• Interest income

• Other receivables from related parties

• Account payable from related parties The Company : Funbox charged service fee of online game from ASC

• Online game service

Transaction Description

2.57

40.00

0.24

8.02

Transaction Value according to Consolidated Final Statement 31 Dec 2008 31 Dec 2009 10.77 49.81

• The Company reserved for the Rappelz licence Fee

• The Outstanding ,balance of Jun-2009

• Service fee of online game that ASC pay to Funbox

Rationale for Transaction

Statement of the Board of Directors’ Responsibilities for the Fififinancial Reporting The Board of Directors of Asiasoft Corporation Public Company Limited has managed to prepare consolidated and separate fiffiifinancial statements to present the fiffiinancial positions and operating results of the Company and its subsidiaries, as well as fiffiifinancial information contained in the Company’s Annual Report of 2009, which are true and reasonable in accordance with all relevant regulations and legislations. Directors have their accountability and responsibility on behalf of directors of listed companies for governance and ensuring that the Company’s ffiinancial reporting present fairly, accuracy, completely, transparency and suffiffiiciency for maintaining the Company’s assets and for determining the weak points and material issues. There will also be suffiffiificient disclosures of significant information in notes to fi ffiinancial statements, complied with proper and consistency accounting policies, as well as reasonable and prudent judgment and estimation in accordance with generally accepted accounting standards. In order for the governance of fi fiffiifinancial reporting to be efffifiicient, the Company’s Board of Directors have set up the Audit Committee, with three independent directors who do not hold any positions on the Executive Board, responsible for supervising the quality of ffiinancial reporting and the internal control systems. The supervision of compliance with the internal control system is the duty of the Outsourcing Internal Audit that elected by the Audit Committee which report directly to the Audit Committee whose opinions on the afore-mentioned matters are detailed in the Company’s Annual Report. The Company’s Board of Directors’ opinion, the consolidated fiffiinancial statements and the separate fiffiinancial statements of Asiasoft Corporation Public Company Limited and its subsidiaries of Asiasoft Corporation Public Company Limited, which the Audit Committee has reviewed jointly with the Company’s executives and external auditors, ANS Audit Company Limited, present fairly in all material respects and operational results in accordance with generally accepted accounting standards, proper and consistency accounting policies, sufffifiificient information disclosures and compliance with relevant legislations and regulations, along with prudent and cautious considerations.

Mr. Tan Tgow Lim Chairman On behalf of the Board of Directors

Management Discussion and Analysis of Fifinancial Conditions and Operating Results Overview of past operating results

The Group is the leading online entertainment service provider relating to online games in Southeast Asia. As at 31st December 2009, there were a total of 23 online game tittles offered in 4 countries: Thailand (19 games), Singapore (7 games), Malaysia (7 games) and Vietnam (8 games). In the year 2009, the revenue was contribute from Thailand 69% and contributed from overseas 31%. The major revenue is online game revenue which contribute 79% of the total revenue in the 2009. The company had net profit margin 11.7% of the year 2009 while as in the 2008 11.5%. The main reason was from the proffiifit of THB 219 million in Thailand, for a growth of 45%, as compared with the proffiifit gained in the year 2008 of THB 151 million based on the success factors of the effiffiicient management of capital expenditure and sales expenditures, especially effiffiicient management of marketing expenses which decreased 46% from the year 2008. In addition, this was partly due to success management of Asiasoft in Fun box Ltd., which is the subsidiary company, in its ffiifirst year after Asiasoft had acquired the business and generated the proffiifit growth of up to 689% or THB 1.58 million, when compared with those in the year 2008. From the overseas operations in Singapore and Malaysia where the overall proffiifit had decreased from the past years due to the result of existing game and new game services, which were not as anticipated and to the overall economic conditions which had not yet improved, including increase from employee expenses and network expenses for expand the online business in Malaysia.

Past operating results of the Group (year 2007 â&#x20AC;&#x201C; 2009) 1. Revenues Revenue base on the consolidated fiffiinancial statements for 2007 - 2009, the Groupâ&#x20AC;&#x2122;s revenues can be classififfiified into 3 groups as follows: Type of Revenue

2007 Baht Million

2008 Baht Million

2009 Baht Million

1. Revenue from online game service

1,167

1,166

1,199

2. Revenue from distribution business

335

358

251

3. Other income

1,559

100

1,612

100

1,520

100

Total

Revenue from online game services Revenue from online game service by geographical areas for 2007 - 2009 2007 Revenue by geographical

2008

2009

Baht Million

Thailand

621

679

802

Singapore and Malaysia

546

487

397

1,167

100

1,166

100.0

1,199

100

Total

Revenue from online game services increased from the year 2008. In Thailand revenue had continue growth from the past 3 year and 18% increased in the year 2009, the main revenue contributed from the existing game 91% of online game service. In oversea the online game service decreased from the last year, the main reason from both of the existing games and new games service , which did not perform as we expected. Revenue from distribution business decreased 30% from the year 2008, because online game distribution, PC game distribution and subscription fee from internet cafeĂŠ decrease which effected from the economic conditions. Moreover, other income including the online advertising in online game website and www.playpark.com , CTCMâ&#x20AC;&#x2122;s sub-licence fee to provide online game service in Vietnam and other income, in the year 2009 decreased from last year. The main reason was from the decrease of advertising from the economic conditions, which effected the most company decrease advertising expenses.

2. Gross Profiffiit Margin 2007 Gross profiffiit by geographical

2008

2009

Baht Million

Thailand

408

485

547

Singapore and Malaysia

254

202

110

Total

662

687

657

Gross proffiifit in Thailand increase from the year 2008 the success factors of the effiffiicient management of cost of services including decrease amortized licenses of Ragnarok, Maple Story , Granado Espada and Cabal which complete amortized the year 2009. For overseas Gross proffiifit decrease from the revenue from existing game and new game services, which were not as anticipated and the cost of employee and network increase from the year 2008 for expand the online business in Malaysia.

3. Net fiprofiffiit 2007 Net proffiit by geographical Thailand Singapore and Malaysia Total

2008

2009

Baht Million 130

% 14

Baht Million 151

% 15

Baht Million 219

% 21

123

(40)

(9)

254

185

178

In the year 2009, the company had Net proffiifit margin 12% increasing from 2008. The main reason from gained the profiffiit of THB 219 million in Thailand, for a growth of 45%, as compared with the proffiifit gained in Thailand in 2008, with the gross profififfiit of THB 151 million based on the success factors of the effififfiicient management cost of services as the above mention and the effiffiicient management selling and administrative expenses, especially efffiificient management of marketing expenses which decrease more than 40% from the year 2008. Net proffiifit of overseas decrease from the existing game and new game services, which were not as anticipated and the cost of employee and network increase from the year 2008 for expand the online business in Malaysia.

Total Asset and Total Liabilities for 2007 – 2009 1. Assets (Unit: Baht Million / % of Total Assets)

2007

2008

2009

Baht Million 180

% of Total Assets 21

Baht Million 205

% of Total Assets 12

Baht Million 470

% of Total Assets 28

Short-term investment

118

705

342

Trade receivables – net

235

291

Intangible assets-net and prepaid licenses fees-net Equipment – Net

137 119

16 14

280 131

16 8

355 128

21 8

Other

162

114

863

100

1,718

100

1,700

100

Cash and cash equivalents

Total

In the year 2009, the company had total assets Baht 1,700 Million, decrease Baht 18 Million or 1% from the year 2008. The main reason from decrease of Cash and cash equivalents and short – term investment from IPO in order to invest in license fee for new game the result effected the intangible assets and prepaid licence fee increase from Baht 280 Million to Baht 355 Million or 27% from the year 2008.

Liabilities for 2007 - 2009 2007 (Unit: Baht Million / % of Total Liabilities) Deferred revenue airtime card and license fee Accrued income tax Accrued license fee Other current assets Trade payable Short - term loans from fiffiinancial institutions Other Total

Baht Million 206 73 47 40 65 34 465

2008

% of Total Liabilities 44 16 10 9 14 7 100

Baht Million 201 49 43 43 50 40 31 457

% of Total Liabilities 44 11 9 9 11 9 7 100

2009 Baht Million 240 58 52 48 39 23 460

% of Total Liabilities 52 13 11 10 9 5 100

In the year 2009, the company had total Liabilities Baht 460 Million increase Baht 3 million or 0.7% from the year 2008. The main reason from Deferred revenue airtime card and license fee. In the year 2009 the company had loan to subsidiary for pay short term loans from ffiinancial institutions.

Shareholders’ Equity for 2007 – 2009 (Unit : Baht Million) Share capital Issue and fully paid up Premium on share capital Translation adjustments Retained earnings-Legal reserve Retained earnings- Unappropriated Treasury share Total

2007 316 225 (4) 25 152 398

2008 316 300 797 (3) 44 135 (12) 1,261

2009 316 308 797 (2) 91 106 (60) 1,240

In the year 2009, the company had total Shareholdersâ&#x20AC;&#x2122; Equity Baht 1,240 Million decrease Baht 21 Million or 2%. The main reason from decrease retained earning for paid dividend totalling Baht 161 million for an interim dividend from the fiffiirst half of operations 2009 totalling Baht 68 million and the second half of operations 2008 totalling Baht 93 million. Moreover, the company had the share repurchase program for ffiinancial management purpose. The number of ordinary shares to be repurchased is 8.5 million shares (par value of Baht 1 per share), the Company appropriated Baht 48 million in the year 2009 and Baht 12 million in the year 2008 from its retained earnings as a reserve for treasury shares. During the years 2009, the Companyâ&#x20AC;&#x2122;s employees exercised 7,853,608 shares of warrants under the Employee Stock Ownership Plan, which effected to the Issue and fully paid up share capital increased from Baht 300 Million to Baht 307.8 Million.

ASIASOFT

Our Step is Stability

FINANCIAL STATEMENTS AND AUDITOR’S REPORT ASIASOFT CORPORATION PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

Auditor’s Report To the Shareholders and the Board of Directors of Asiasoft Corporation Public Company Limited and its subsidiaries I have audited the consolidated balance sheets of Asiasoft Corporation Public Company Limited and its subsidiaries as at December 31, 2009 and 2008, the related consolidated statements of income, changes in shareholders’ equity and cash ffllows for the years then ended. I have also audited the separate balance sheets of Asiasoft Corporation Public Company Limited as at December 31, 2009 and 2008, and the related separate statements of income, changes in shareholders’ equity and cash ffllows for the years then ended. The Company’s management is responsible for the correctness and completeness of information presented in these ffiinancial statements. My responsibility is to express an opinion on these fiffiinancial statements based on my audits. The fiffiinancial statements for the years ended December 31, 2009 and 2008, of overseas subsidiaries were audited by other auditors, whose reports have been furnished to me. My opinion on the Company’s consolidated and separate fiffiinancial statements for the years ended December 31, 2009 and 2008, insofar as they relate to the amounts included for these subsidiaries, is based solely on the reports of these other auditors. These fiffiinancial statements reffllflect total assets as at December 31, 2009 and 2008, of approximately Baht 162.77 million and 245.27 million, respectively, total revenues for the years then ended of approximately Baht 466.32 million and 584.45 million, respectively, and net loss for the year ended December 31, 2009, of approximately Baht 40.32 million and net proffiifit for the year ended December 31, 2008, of approximately Baht 34.58 million. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the fiffiinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fiffiinancial statements. An audit also includes assessing the accounting principles used and signifififfiicant estimates made by management, as well as evaluating the overall fiffiinancial statement presentation. I believe that my audits and the reports of the other auditors referred to in the preceding paragraph provide a reasonable basis for my opinion. In my opinion, based on my audits and the reports of the other auditors, the fiffiinancial statements referred to above present fairly, in all material respects, the consolidated ffiinancial positions of Asiasoft Corporation Public Company Limited and its subsidiaries as at December 31, 2009 and 2008, and the consolidated results of their operations and their cash flffllows for the years then ended, and the separate ffiinancial positions of Asiasoft Corporation Public Company Limited as at December 31, 2009 and 2008, and the results of its operations and its cash ffllows for the years then ended, in conformity with generally accepted accounting principles. ( Vichai Ruchitanont ) Certififfiied Public Accountant Registration Number 4054

ANS Audit Co., Ltd. Bangkok, February 25, 2010

ASIASOFT CORPORATION PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED AS AT DECEMBER 31, 2009 AND 2008 1. General Information Asiasoft Corporation Public Co., Ltd was registered under the Civil and Commercial Code on September 20, 2001 and become a public company limited on May 17, 2007 with registration Number 0107550000050. The Company is located at 9/283-5, 28th fflflloor, UM Tower Building, Ramkhamhaeng Road, Suanluang, Bangkok. The Company and subsidiaries’ principal business is being the distributor and providing game services both for online and oflffflfline games in Thailand, Singapore, Malaysia and Vietnam.

2. Basis for Presentation of the Fififinancial Statements and Consolidated Fififinancial Statements The fiffiifinancial statements are prepared in accordance with Thai Accounting Standards (“TAS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) and with generally accepted accounting principles in Thailand. The presentation of the fiffiinancial statements has been made in compliance with the stipulations of the Notififfiication of the Department of Business Development dated January 30, 2009, issued under the Accounting Act B.E. 2543. They are prepared on the historical cost basis, except as disclosed in respective accounting policies. As required by Thai law and regulatory requirements, the Company’s fiffiinancial statements have been prepared in the Thai language. They have been translated into English for the convenience of the reader. The preparation of ffiinancial statements in conformity with TAS 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. Therefore, actual result 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, or in the period of the revision and future periods, if the revision affects both current and future periods. The consolidated fiffiinancial statements consist of accounting transactions of the Company and its subsidiaries after eliminating signififfiicant intercompany transactions and balances. The Company’s shareholding in subsidiaries as at December 31, 2009 and 2008, are as follows:

100

The fiffiifinancial statements of the subsidiary companies incorporated overseas are translated into Thai Baht at the closing average exchange rate for assets and liabilities and at the monthly average exchange rate applying during the period for revenues and expenses. The differences have been shown under the caption of “Translation adjustment” in shareholders’ equity. Adoption of new accounting standards On May 15, 2009, the Federation of Accounting Professions (FAP) has made the announcement No. 12/2009 to renumber Thai Accounting Standards (TAS) to be the same as International Accounting Standards (IAS). The Federation of Accounting Professions has issued Notififfiication No. 86/2008 and 16/2009, announcing the use of new accounting standards, ffiinancial reporting standard and accounting treatment guidance as follows. a) Accounting standards, fiffiinancial reporting standard and accounting treatment guidance which are effective for the current year Framework for Preparation and Presentation of Fififinancial Statements (revised 2007) TAS 36 Impairment of Assets (revised 2007) TFRS 5 Non-current Assets Held for Sale and Discontinued Operations (revised 2007) Accounting Treatment Guidance for Leasehold Right Accounting Treatment Guidance for Business Combination under Common Control These accounting standards, fiffiinancial reporting standard and accounting treatment guidance became effective for the ffiinancial statements for fiffiiscal years beginning on or after January 1, 2009. The management has assessed the effect of these standards and Guidance does not have any signififfiicant impact on the ffiinancial statements for the current period.

101

b) Accounting standards which are not effective for the current year TAS 20 Accounting for Government Grants and Disclosure of Government Assistance TAS 24 Related Party Disclosures (revised 2007) TAS 40 Investment Properties The management of the Company is still evaluating the effect of these three accounting standards.

Effective date January 1, 2012 January 1, 2011 January 1, 2011

3.Signiffiificant Accounting Policies Revenues and Expenses Recognition Revenues and expenses are recognized on an accrual basis. Revenues from online games service are recognized when gamers used service. Sales are recognized upon the delivery of goods to the customer and after deduction of discounts. Revenue from publishing distribution is recognized at invoice value once delivered, after deduction of goods returned and discounts. Revenues from licensing games services to game shops are recognized by the straight-line method over the license period of 1 year. Revenues from advertisement on subsidiaryâ&#x20AC;&#x2122;s website are recognized by the period of agreement with the advertiser. Cash and Cash Equivalents Cash and cash equivalents consisted of cash on hand and deposits in ffiinancial institutions and highly liquid short-term investment with an original maturity of three months or less and are not subject to restrictions. Short-term Investments Short-term investments consisted of time deposit, treasury bill with a maturity period over 3 months not over than 12 months, openended fund, bond and debentures. Investments are investments in treasury bill and Open-ended Fund, which are classififfiied in the balance sheets as trading securities, are carried at their fair values. The fair value of open-ended fund is calculated by net asset value of the fund as at the balance sheet date. Gain or loss on valuation is realized in the statement of income. Trade Receivables Trade receivables are stated at cost net of allowance for doubtful accounts. Allowance for doubtful accounts is an estimate of those amounts which may prove to be uncollectible based on a review of the current status of the existing receivables.

102

Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the ffiifirst-in, ffiifirst-out (FIFO) method. Net realizable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses. A provision is made, where necessary, for obsolete, slow-moving, and defective inventories. Investments in Subsidiaries The Company recorded the investment in the subsidiary companies in the separate fiffiinancial statements using the cost method, and adjusted impairment, if any. Other Long–term Investments Other long–term investments are stated at cost net allowance for impairment in value. Equipment and Depreciations Equipment is stated at cost less accumulated depreciation. Depreciation is calculated by the straight-line method over their estimated useful lives of 3 to 5 years. In the fourth quarter of year 2009, an oversea subsidiary changed the useful life of its server from 3 years to 5 years in order to be in line with the group accounting policy. The subsidiary adopted the change in accounting estimate by adjustment in the operating result effective from January 1, 2009. The change in estimates reduced the depreciation charge for the year 2009 by Baht 5.75 million (SGD 243,458). Depreciations for Computing the Company’s Corporate Income Tax Computer and offiffiice equipment accessories, the Company acquired before year 2005, were depreciated at the acquisition date of 40% of the cost value and the remaining balance was depreciated by the straight-line method over the estimated useful life of the assets of 3 years. Computer and accessories acquired since 2005 are depreciated by the straight-line method over their estimated useful lives of 3 to 5 years. Deferred License Fees Deferred license fees are stated at cost less accumulated amortization. Amortization is calculated by the straight-line method over the period expecting beneffiifit from the agreement. The Company will revise the book value each year and adjusted impairment, if any. Games under Development Games under development consisted of the salary of technical staff relating to developing games and direct cost under the developing process. The Company has the policy to amortize by the straight-line method over their estimated useful period when the developing process was completed of 2 - 5 years. The Company will revise the book value each year and adjusted impairment, if any. Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of the company’s share of the identiffiifiable net assets acquired. Goodwill was presented at cost and adjusted impairment, if any. Deferred Income Tax The Company adopted the deferred income tax method of accounting under which corporate income tax include the tax effects of all revenues and expenses into determination of net income for the year, regardless of when they are recognized for tax purposes. The tax effects of timing differences are reported as deferred income tax (assets or liabilities) shown in the balance sheet.

103

Treasury stock Treasury stock is stated at cost and presented as a reduction from shareholdersâ&#x20AC;&#x2122; equity. Gains on disposal of treasury stock are determined by reference to its carrying amount and are taken to premium on treasury stock, losses on disposal of treasury stock are determined by reference to its carrying amount and are taken to premium on treasury stock and retained earnings, consecutively. Transactions in Foreign Currencies Foreign currency transactions are translated into Baht at the exchange rates ruling on the transaction dates. Monetary assets and liabilities denominated in foreign currencies outstanding at the balance sheet dates are translated into Baht at the exchange rates ruling on the balance sheet dates. Gain or losses on exchange rates are recognized as income or expenses for the year. Basic Earnings per Share and Diluted Earnings per Share Basic earnings per share are computed by dividing the net profiffiit for the year by the weighted average number of issued common shares during the year, treasury stock and number of common shares increased from exercise warrants. Diluted earnings per share are calculated by dividing the net profiffiit for the year by the weighted average number of ordinary shares including the effect of increased shares from exercise warrants for the years ended December 31, 2009 and 2008 of 11.81 million shares and 8.41 million shares, respectively.

4. Related Parties Transactions The Company had signififfiicant business transactions with the related parties, which are related through shareholdings or by certain common shareholders or directors. The ffiinancial statements reflffllect the effect of these transactions on the basis determined by the Company and the parties concerned. The related partiesâ&#x20AC;&#x2122; signififfiicant transactions for the years ended December 31, 2009 and 2008 can be summarized as follows:

The Company had the above transactions with related parties using cost plus proffiifit as agreed between the parties concerned.

104

Outstanding balance as at December 31, 2009 and 2008 can be summarized as follows:

105

During the year 2009, a subsidiary entered into a loan contract at the amount of Baht 40 million with the Company. The loan bears interest rate at 2.25% per annum with no collateral security which will be due on September 24, 2010. During the year 2009, a subsidiary entered into a loan contract at the amount of Baht 5 million with the Company. The loan bears interest rate at 2% per annum with no collateral security which will be due at call. During the year 2009, an overseas subsidiary entered into a loan contract at the amount of Baht 15.80 million with the Company. The loan bears interest rate at 2% per annum with no collateral security which will be due within 1 year after receiving the loan. An overseas subsidiary entered into a loan contract at the amount of 664,000 Singapore dollars. The loan bears interest rate at 4.75% per annum with no collateral security which will be due on October 24, 2010. During the year 2009, an overseas subsidiary entered into two loan contracts at the amount of Baht 24 million each. The loan bears interest rate at 2% per annum and 3% per annum with no collateral security which will be due within 1 year after receiving the loan and due on April 15, 2010, respectively.

106

During the years, the Company had movements on the accounting balances with related parties as follows:-

107

108

On November 12, 2009, the Board of Directorâ&#x20AC;&#x2122;s meeting of Playpal Co., Ltd., a subsidiary company, passed a resolution to increase the Companyâ&#x20AC;&#x2122;s authorized share capital from Baht 10 million to Baht 25 million by issuing 150,000 new ordinary shares with a par value of Baht 100 per share. The subsidiary registered the increased share capital on December 14, 2009. On October 28, 2009, an extraordinary meeting of the shareholders of ASK SOFTWARE PTE. LTD., a subsidiary company, passed a resolution to liquidate the company. The subsidiary company had dissolved by registration on October 30, 2009. On June 29, 2009, an extraordinary meeting of the shareholders of A Game Co., Ltd., a subsidiary company, passed a resolution to liquidate the company. The subsidiary company registered the liquidation on December 29, 2009. In September 2008, the Company invested in the additional common shares in Asiasoft International Co., Ltd. in the amount of Baht 20 million (200,000 shares at Baht 100 per share) for the 99.99% interest in the registered capital. In March 2008, the Company invested in the additional common shares in Asiasoft International Co., Ltd. in the amount of Baht 30 million (300,000 shares at Baht 100 per share) for the 99.99% interest in the registered capital. In October 2008, the Company invested in the additional common shares in Playpal Co., Ltd. in the amount of Baht 5 million (50,000 shares at Baht 100 per share) resulting in the Company holding 75.50% interest. In February 2008, the Company invested in the ordinary shares of A GAME CO., LTD, which was incorporated with the Ministry of Commerce on February 8, 2008, totaling 10,000 shares at Baht 100 par value, resulting in the Company holding 99.99 % interest. In June 2008, the Company invested in the additional common shares in A GAME CO., LTD, in the amount of Baht 4 million (40,000 shares at Baht 100 per share) for the 99.99% interest in the registered capital. In August 2008, the Company invested in the ordinary shares of A CAPITAL CO., LTD, which was incorporated with the Ministry of Commerce on August 13, 2008, totaling 20,000 shares at Baht 100 par value (25% paid-up), for a total amount of Baht 0.50 million, resulting in the Company holding 99.99 % interest. In January 2008, the Company invested in the ordinary shares (80%) of ASK SOFTWARE PTE. LTD., incorporated and operated in Singapore, for 800 shares, at a price of SGD 1 per share (equivalent to Baht 0.02 million). In August 2008, Asiasoft International Co., Ltd., a subsidiary company, invested in the increased shares (100%) of Asiasoft Online Sdn Bhd, by issuing new common shares of 2,000,000 shares, respectively, at MYR 1 par value. Total investment is MYR 4 million (equivalent to Baht 40.24 million). In August 2008, A Capital Co.,Ltd., a subsidiary company, acquired all ordinary shares of Funbox Co.,Ltd., in the amount of Baht 400,000 equal to 399,998 shares at Baht 1 per share (Par value of Baht 100 per share). This incurred the excess of cost over the book value as at August 31, 2008 of the subsidiary company according to the unaudited but reviewed fiffiinancial statements of Baht 2.49 million.

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5. Cash and Cash Equivalents Cash and cash equivalents as at December 31, consisted of:-

6. Short - term Investments Short - term investments as at December 31, consisted of:-

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7. Trade Receivables - net Trade receivables as at December 31, consisted of:-

8. Inventories - net Inventories as at December 31, consisted of:-

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9. Prepaid License Fees â&#x20AC;&#x201C; net Prepaid license fees as at December 31, consisted of:-

10. Deferred Income Tax Assets and Deferred Income Tax Liabilities Deferred income tax assets as at December 31, consisted of:-

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Corporate income tax The Company calculated the income tax for the years ended December 31, 2009 and 2008 at the rate of 25% (30% on net profiffiit exceeding Baht 300 million) and 30%, respectively. The subsidiary in Singapore calculated the income tax for the years ended December 31, 2009 and 2008 at the rate of 17% and 18%, respectively. The subsidiary in Malaysia calculated the income tax for the years ended December 31, 2009 and 2008 at the rate of 25% and 26%, respectively. A subsidiary in Thailand calculated the income tax for the years ended December 31, 2009 and 2008 at the progressive rates of 15% to 30%.

11. Long - term Investment - net Long-term investment as at December 31, 2009 and 2008 consisted of:-

In January 2007, the Company acquired ordinary shares of N - LOG SOFT INC CO., LTD. which registered and operated in Korea for 24,570 shares of USD 5.43 par value per share (calculated by USD 1: Won 920) at the price of USD 20.35 per share for a total acquisition cost of USD 500,000 (equivalent to Baht 18.04 million), resulting in the Company holding 7.50 % interest of the registered capital.

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12. Equipment - net Equipment as at December 31, 2009 consisted of:-

Depreciation for the years ended December 31, 2009 and 2008 in the consolidated fiffiinancial statements of Baht 64.47 million and Baht 68.64 million, respectively, are included in the statements of income. As at December 31, 2009 and 2008, the Company and subsidiariesâ&#x20AC;&#x2122; equipment amounting to Baht 115.41 million and Baht 65.76 million, respectively, were fully depreciated but are still in use.

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Depreciation for the years ended December 31, 2009 and 2008 in the separate fiffiinancial statements of Baht 36.22 million and Baht 34.27 million, respectively, are included in the statements of income. As at December 31, 2009 and 2008, the Companyâ&#x20AC;&#x2122;s equipment amounting to Baht 87.70 million and Baht 50.99 million, respectively, were fully depreciated but are still in use.

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13. Intangible Asset - net Intangible asset as at December 31, 2009 consisted of:

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14. Liabilities under Fififinancial Lease Agreements - net Liabilities under ffiinancial lease agreements as at December 31, consisted of:-

As at December 31, 2009 and 2008, the Company and subsidiaries have ffiinancial lease agreements for the terms of 18 months to 60 months at the effective interest rate of 3.5% to 7.75% per annum and their payments are monthly due.

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15. Share Capital On May 20, 2008, the Company initially offered to the public of 75 million shares of Baht 12 per shares and recorded expenses related to this offering totaling of Baht 28.17 million by deduction to premium on share capital. The Company registered the above changes with the Ministry of Commerce on May 26, 2008. During the years ended December 31, 2009, the Company’s employees exercised 7,853,608 shares of warrants under the Employee Stock Ownership Plan. In this regard, the Company recorded the increases in share capital during the years ended December 31, 2009 as follows:

The exercise date is the last working day of May and November through the age of warrant, except the latest exercise date on May 15, 2011. However, some employees who have been allocated a number of warrants has resigned, so the remaining of the available warrants are 15,278,000 units and the ordinary shares for reserving the exercise ratio of ESOP after adjustment are 15,568,282 shares. The Company has allotted the ordinary shares to reserve for the ESOP of 16,000,000 shares, so the Company does not need to allotted the additional ordinary share.

16. Legal Reserve The Company is required to set aside a legal reserve of at least 5% of its net proffiifit until the reserve reaches 10 percent of the registered share capital in accordance with the Public Limited Companies Act B.E. 2535. The reserve cannot be used for dividend payment.

17. Treasury Shares and Reserve for Treasury Shares At the resolutions of the Board of Director’s meeting No. 6/2008 held on November 13, 2008, the Company’s directors resolved to approve the share repurchase program for ffiinancial management purpose in accordance with the Section 66/1(2) of the Limited Public Company Act (No. 2) B.E. 2544 in the amount not exceeding Baht 85 million. The number of ordinary shares to be repurchased is 8.5 million shares (par value of Baht 1 per share); equal to 2.83% of the total number of paid-up share capital of the Company. The Company shall repurchase its ordinary shares through the main board of the Stock Exchange of Thailand during the period from December 1,

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2008 to May 31, 2009. The Boards of Directors have considerations the share resale procedures by resale its ordinary shares through the main board of the Stock Exchange of Thailand or by public offering depending on the prevailing situation at that time of shares sold. Period for the resale of share is from December 1, 2009 to May 31, 2012 (after 6 months from the completion date of share repurchase and not later than 3 years from the completion date of share repurchase). As at December 31, 2009 and 2008, the Company repurchased a total of 8.50 million share and 1.692 million shares respectively (equal to 2.83% and 0.564%, respectively of the total number of paid-up share capital of the Company) for a total consideration of Baht 59.62 million and Baht 12.48 million, respectively. As at December 31, 2009 and 2008, the Company appropriated Baht 59.62 million and Baht 12.48 million respectively from its retained earnings as a reserve for treasury shares.

18. Dividend Payments The resolutions of the Board of Director’s meeting No. 4/2009, held on August 13, 2009, approved to pay an interim dividend from its operations since January 1, 2009 until June 30, 2009 for the 294.74 million shares at the rate of Baht 0.23 per share, totaling Baht 67.79 million. The dividend was paid on September 9, 2009. At the annual general meeting of the shareholders of the Company held on April 23, 2009, the Company’s shareholders approved to pay a dividend from its operations for the year 2008 for the 292.09 million shares at the rate of Baht 0.32 per share, totaling Baht 93.47 million. The dividend was paid on May 12, 2009. The resolutions of the Board of Director’s meeting No. 5/2008, held on August 13, 2008, approved to pay an interim dividend from its operations for the year 2008 for the 300 million shares at the rate of Baht 0.31 per share, totaling Baht 93 million. The dividend was paid on September 5, 2008. The resolutions of the Board of Director’s meeting No. 1/2008, held on February 20, 2008, approved to pay an interim dividend from its operations for the year 2007 for the 225 million shares at the rate of Baht 0.3972 per share, totaling Baht 89.37 million. The dividend was paid on March 10, 2008.

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19. Basic and Diluted Earnings per Share Basic and diluted earnings per share are calculated as follows:

20. Disclosure of Fififinancial Instruments Fififinancial risk management and policies The Company and subsidiaries are exposed to risks from changes in market interest rates and in currency exchange rates, and from nonperformance of contractual obligations by counterparties. The Company manages the risks as follows: Interest rate risk The groups of Company have no signififfiicant interest bearing assets and liabilities except the interest income from cash and cash equivalents and short-term investments. The Company manages the interest rate risk by depositing and investing with reliable fiffiinancial institutions having a different maturity dates and interest rates pursuant to the Companyâ&#x20AC;&#x2122;s fiffiinancial plan. Foreign currency risk Foreign currency risk occurs from license fee payment to foreign companies by mainly using US dollar currency. However, the licensor takes the risk and the Company believed that there will not be any signififfiicant effect to the fiffiinancial statements.

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As at December 31, 2009 and 2008, the Company has account receivables in a foreign currency of USD 198,734 and USD 386,434, respectively, prepaid license fees of USD 2,121,341 and USD 915,784, respectively, and license fees payable of USD 854,757 and USD 698,983, respectively. As at December 31, 2009, the Company has cash deposit at bank in a foreign currency of SGD 204,671 and USD 382,106 and other receivable of USD 200,000. Credit risk relating to trade accounts receivable The Company has a policy to manage the credit risk from trade accounts receivable by having prudent credit policies and debt collection procedures. The company expects that its will have no damages as a result of debt collection. Fair Value Most of the fiffiinancial assets are cash deposits at fiffiinancial institutions, short-term investment and trade accounts receivable which are short-term assets. Most fiffiinancial liabilities are trade accounts payable and other payables. The carrying amount of the fiffiinancial assets and fiffiinancial liabilities are, therefore, not signiffiicantly different from their fair value.

21. Fififinancial Information by Segment The Company and its subsidiariesâ&#x20AC;&#x2122; operations are involved in two business segments in online games and offline games and have geographic segments in Thailand and oversea geographic areas. The segment information of the Company and subsidiaries for the years ended December 31, 2009 and 2008 were as follows:

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22. Signififfiicant expenses by nature Signifififfiicant expenses by nature for the years ended December 31, 2009 and 2008 were as follows:

23. Commitment and Contingent Liabilities Distribution agreements The Company entered into distribution agreements to provide online games services and to distribute offflline games with a local company and several oversea companies. As at December 31, 2009, the Company has commitments to pay initial license fees of Baht 114.33 million, minimums guarantee royalty fees of Baht 122.88 million and royalty fees as stated in the agreements. Lease agreements The Company entered into operating lease agreements for its offflifice space, warehouse, facilities and services for a period of 1 3 years which are renewable upon mutual agreement. As at December 31, 2009 and 2008, the Company is committed to pay monthly operating lease of Baht 2.9 million. Server service agreement The Company entered into server service agreements for a period of 1 year and the agreement is renewable upon mutual agreement. As at December 31, 2009 and 2008, the Company is committed to pay monthly operating lease and services fee of Baht 1.3 million. Letter of guarantee As at December 31, 2009 and 2008, the Company and subsidiaries had a commitment with local bank for the letters of guarantee issued by banks totaling Baht 2.46 million.

24. Litigation The Company has a litigation case regarding the copyright with total claims of Baht 17.46 million. The Companyâ&#x20AC;&#x2122;s lawyer believes that the Company will have no damage from the ultimate outcome of the litigation. Presently, the court of the ffiifirst instance dismissed all the Companyâ&#x20AC;&#x2122;s cases. Therefore, the Company did not provide for any possible loss in the fiffiinancial statements. An oversea subsidiary received notice from a previous distributor for breach of contract totaling amount SGD 1.78 million (Baht 42.64 million). Presently, the lawyer of the subsidiary had a conffiifirmation letter conffiifirmed that the litigation case had been fiffiinalized and the subsidiary has no contingent liability from the case. Therefore, no provision has been made in the fiffiinancial statements.

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25. Reclassififfiication The Company has reclassiffiified certain accounts in the ffiinancial statements for the year ended December 31, 2008 to conform to the presentation of the fiffiinancial statements for the year ended December 31, 2009 which consisted as follows:

26. Subsequent Events On February 9, 2010, the Board of Director’s meeting of Playpal Co., Ltd., a subsidiary company, passed a resolution to liquidate the company. The liquidation is in progress. The resolutions of the Board of Director’s meeting No. 1/2010, held on February 25, 2010, approved to pay a dividend from its operations for the year 2009 at Baht 0.58 per share. During 2009, the Company already paid the interim dividends at Baht 0.23 per share, totaling Baht 67.79 million (Note 18). Therefore, there are the remaining dividends to be paid for the 299.35 million shares at the rate of Baht 0.35 per share, totaling Baht 104.77 million. The approval for dividend payment will be further proposed at the Annual Shareholders’ Meeting for the year 2010 for the consideration and approval.

27. Approval of Fififinancial Statements

These ffiinancial statements have been approved for issue by the authorized directors on February 25, 2010

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ASIASOFT

Next Step of Asiasoft

Game Changer Besides stable step on Online Game Business, we also determine to step onward to the related business. With positive and widespread vision from the executives, and be united from all staffs of â&#x20AC;&#x153;Asiasoftâ&#x20AC;?, We are ready to be a leader to create new phenomenon and let the follower behind.