AS : Annual Report 2010

Page 1

ANNU

AL R

2010 T R EPO

O N S A H S S E C C SU

Y R A D N U O B

1

9 UM Tower, Room 9/283-5, 28th Floor, Ramkhamhaeng Road, Suanluang, Bangkok 10250

Contents

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dit Committee u A e th f o rt o ep R of the Company n io at rm fo In al Gener rs Board of Directo ittee Executive Comm Responsibility Corporate Social Highlight Events ht Financial Highlig s Nature of Busines Risk Factors d Management an re u ct u tr S g Shareholdin ing ctions Financial Report e th r fo es Connected Transa ti ili b onsi s f Directors’ Resp o d ar o B Operating Result e d th an f o s n t io en it d m n te o C ta S cial Analysis of Finan d an n io ss cu is D Management ent Financial Statem

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4 6 9 17 21 24 28 29 43 46 64 73 74 81

! ! ! ! ! !!! !!

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Asiasoft Corporation Public Company Limited

! " # ! $! % & % ' % #! $ of the vigorous growth in export and tourism, as well as the improvement in global trade. Despite many negative factors, # # $ # !' % # # ( # ' " $ ( # ' ( # ' # affected many provinces throughout the nation, Asiasoft still fostered our position in Thailand as an esteemed business leader # # ' # % $! )&* &+ %

2009. One of the successful factors that helped boost our constant growth was the launch of our new games comprising 12 46! ' 7 & * # ' 4 % # !

#! % # # :* " #!

# ' %# ; organizational restructuring, and effective management in selling and administrative expenses. In 2011, our marketing strategies will change at all, from local content to regional content, aiming to link together all the markets of Asiasoft in Southeast Asia. Additionally, we have worked on a plan for continuous investment in promising 6 * " ! ' ## %

< ' %

# 6 % % # ) ## % %# * As the world’s fourth most populous nation, Indonesia has more than 150 million active mobile users, and approximately 35 million Facebook subscribers, ranking the second largest number of Facebook users after the United States. Nowadays, social network is an outstanding phenomenon in Indonesia. Thus, it can actually be a useful business tool for promoting our online enterprise. With such critical factors as practical strategies, competent professionals, more than 10 years of hands-on % ' # = ! ' ## #! $

# ! for Asiasoft as it hopes to boost more growth and generate more surplus. Moreover, we are committed to building up the # 6 # " # ' # ! ' ' # and environmental awareness, all of which play a key role in our mission to promote the nation’s constant, sustainable growth # % * " #' $# ; %% ! program, the social and environmental program, and the program to enhance government activities. The next few years shall see momentous changes in the online entertainment industry. We are positive that Asiasoft, thanks to the full support of our customers, business alliances, and the government sector, plus the wide vision of Asiasoft Board of Directors, and the strong determination of our executives and employees, will be able to continue to position ourselves as a leader in new business segments, and play a key role in driving the nation’s economy to sustainable growth.

Tan T Tgow T Lim Li Chairman

>

4 ; % Chief Executive Officer 3

Report of the Audit Committee The Audit Committee of Asiasoft Corporation Public Company Limited consists solely of three independent directors ? # $! 4 @ * * * # % J 6 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 2010, the Audit Committee met totally 6 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: " ? #! ! #! % !V #

#

$! ? '

#

% !V # reports. " X

% # % ! $ prepared in accordance with generally accepted accounting standards and were presented accurately and fairly with adequate information disclosure. ! "

"

. 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 Outsourcing Internal Audit. The Audit Committee is of the opinion that the company has appropriate and adequate internal control and audit systems. # " "

$ % &

$

' " ! The Audit Committee is of the opinion that the company has complied with relevant rules and regulations that concerning company business. ( % % ! )

To propose the company’s Board of Directors to recommend at the shareholders’ meeting the appointment of #

" " J ! X *' Y * % ! 4 $ V

" # # ! $ ! %

!' ' % $ # $! 4 @ % % #

@ " YY> X

4 $ ! 4 % # ! % % #

@ " X

4 $ ! # ! # ! $ ! 6 # ability and expert in the Company and its Subsidiaries business. )

* " " + " legislations and regulations. To review process, practice, regulations and articles of association of the Company in order that the approved

# %#! #

4

6 " # 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: 6.1 Reviewing the information disclosed to the Stock Exchange of Thailand and the Securities and Exchange commission, as disclosed in the company’s annual report year 2010 (Form 56-2) and in the annual information disclosure form as at December 31, 2010 (Form 56-1). 6.2 Reporting the Audit Committee’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. =*) "

X

$ \ ## ]

List of Audit Committee * * # % J 6 2. Mrs. Tanyaporn Manmee 3. Mrs. Monluedee Sookpantarat

Number of Attendance / Total Meeting (Times)

Year 2010 =^= 6/6 6/6

On behalf of the Audit Committee

_ * # % J 6 ` Chairman of the Audit Committee ) j $ !

5

General Information (As of 31 December 2010) 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

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No. 9, UM Tower, Room 9 / 283 – 5, 28th Floor Ramkhamhaeng Road, Suanluang, Bangkok,10250 0107550000050 66 2769 8888 == } } ) ~ 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. )' '&&&

)' '&&& ! % # *

Registered Number Telephone Facsimile Website Registered Capital Paid-up Capital

" ! 5; (As of 31 December 2010) > !> $ ! ? Company Name Type of Business <

& &

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 == } } ) ~ 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. ::*::+ % #*

Company Name

Asiasoft International Company Limited

Type of Business <

Investment Arm (Holding Company) No. 9, UM Tower, Room 9 / 283 – 5, 28th Floor Ramkhamhaeng Road, Suanluang, Bangkok, 10250 66 2769 8888 == } } ) ~ 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. ::*::+ % #*

Telephone Facsimile Website Registered Capital

Telephone Facsimile Registered Capital & &

6

Company Name

PlayPal Company Limited

Type of Business

Development of PC Games and Online Games which received < Investment No. 9, UM Tower, Room 9 / 173, 17th Floor Ramkhamhaeng Road, Suanluang, Bangkok, 10250 66 2769 8888 == } } ) ~ 25,000,000 Baht divided into 250,000 ordinary shares with a par value of Baht 100 each. All shares have been issued and fully paid up. : * :&+ % #* The Company is in process of liquidation.

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Telephone Facsimile Registered Capital

& & Noted

Company Name

A Capital Company Limited

Type of Business

Investment Arm (Holding Company) < No. 9, UM Tower, Room 9 / 283 – 5, 28th Floor Ramkhamhaeng Road, Suanluang, Bangkok, 10250 Telephone 66 2769 8888 Facsimile == } } ) ~ Registered Capital 2,000,000 Baht divided into 20,000 ordinary shares with a par value of Baht 100 each. The Paid-up Capital is 500,000 Baht. & & ::*::+ % #*

Company Name

Funbox Company Limited

Type of Business <

Providing Online Games No. 1168/15, 17, Lumpini " ' 7 ) 7 '

Tungmahamek, Sathorn, Bangkok, 10120 Telephone == ) Facsimile 66 2679 8772 Registered Capital ) ' '

) ' ! a par value of Baht 100 each. All shares have been issued and fully paid up. & & ::*::+ % # held by A Capital Company Limited.

Company Name

Asiasoft Online PTE LTD.

Type of Business

Providing Online Games and distributing PC Games. No. 5 Tampines Central € ) " % ># \ ' 4 % ~ :~) Telephone +65 6825 8506 Facsimile ƒ=~ =}& })= Registered Capital 2,000,000 Singapore Dollar, all shares have been issued and fully paid up. & & + % # # by Asiasoft International Company Limited.

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H& &J@ K<J

Type of Business

Providing Online Games and distributing PC Games. Suite 21.01, Level 21, Menara IGB, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia +603 2287 1503 +603 2287 1500 )' ' 7 *' ## been issued and fully paid up. + % # # by Asiasoft International Company Limited.

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Telephone Facsimile Registered Capital & &

7

Reference Persons Registrar

Telephone j #

Thailand Securities Depository Company Limited The Capital Market Academy Building, 2nd j#

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) _† > 6 > ; `' ‡ $ 7 Road, Thungsonghong, Laksi District, Bangkok 10210 0 2596 9000 & )::) ˆ =

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Telephone Facsimile

* > 6 #' >X Y † * )= #

" " J ! X % ! Y 7 ; 6 # * ~th Floor, 183 South Sathorn Road, Yanawa, Sathorn, Bangkok 10120 0 2676 5700 0 2676 5757

Financial Advisor DBS Vickers Securities (Thailand) Company Limited 989 Siam Tower, 9th' )th – 15th Floor, Rama 1 Road, Pathumwan, Bangkok 10330 Telephone 0 2657 7902, 0 2658 1251 Facsimile 0 2657 7908

8

F O S R D O R T A C BO DIRE ASIASOFT

COR

COMPANY C I L B U P PORATION

LIMITED

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Mr. Tan Tgow Lim Chairman K $ Business Administration, Cambridge GCE Ordinary Level Presbyterian Boys School in Singapore

Q $ - 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 -

10

Mr. Pramoth Sudjitporn Vice Chairman K $ Bachelor of Business Administration, Bangkok University

Q $  ‡ ' 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 -

11

Mr.Lertchai Kanpai Director K $ Bachelor of Laws, Ramkhamhaeng University

Q $ 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 -

12

Mr. Surasak Khaoroptham Director K $  X' X ' ; j ' University of Pennsylvania – the Wharton School.  4 _ `' 4 < # @ % ' ; % 7 ' Š ! Michigan Ann Arbor. - Bachelor Degree, Electrical Engineering, King Mongkut Institute of Technology – Ladkrabang.

Q $ - 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)

X > _ X> :^ )`

Illegal Record in past 10 years - none -

13

Mr. Chalermphong Jitkuntivong Independent Director and Chairman of the Audit Committee

K $ - Master of Laws, Cornell University, USA - Barrister at laws (Thai Bar) - Bachelor of Laws (Hons.), Chulalongkorn University  Y ' " Š !

Q $ - Director, Independent Director and Chairman of the Audit Committee Asiasoft Corporation Public Company Limited  X

! 4 @

Y 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)

& S " Law

Illegal Record in past 10 years - none -

K U " ! – none -

)

Mrs. Tanyaporn Manmee Independent Director and Audit Committee Member

K $ Bachelor of Business Administrative (Accounting), Ramkhamhaeng University

Q $ - Director, Independent Director and Audit Committee Member Asiasoft Corporation Public Company Limited Â

‹ @ % ! Y  X J

! _" # ` % ! Limited

Training Program organized by Thai Institute of Directors Association (IOD) - Director Accreditation Program (DAP 53/2006) Â

> _ > =^ &`

& S " Accounting

Illegal Record in past 10 years - none -

K U " ! - none -

15

Mrs. Monluedee Sookpantarat Independent Director and Audit Committee Member

K $ - B.B.A. in Accounting (Horn.), Thammasat University - Bachelor of Science in Accounting, Thammasat University  > $# X ' " # Y † *)

Q $ - Director, Independent Director and Audit Committee Member Asiasoft Corporation Public Company Limited - Director, Authorized Director, Investment Committee Member, 7 6

$ j # Wave Entertainment Public Company Limited

Training Program organized by Thai Institute of Directors Association (IOD) Â

> _ > ^ ` - Director Diploma Award (Fellow Member) Class 11/2003 Â

X > _ X> )^ ~` - Audit Committee Program (ACP 23/2008)

& S " Accounting, Reviewing Accounting and Internal Audit

V & U " Â :&}Â ::= X

@ % ! Y * Â ::}Â %

j # Group of Wave Entertainment Public Company Limited

Illegal Record in past 10 years - none -

K U " ! – none -

16

e e t t i m m o C e v i t u Exec ASIASOFT

COR

COMPANY C I L B U P PORATION

LIMITED

17

n

narna r o p a n a an Patirt ector w a d d a Miss Ly Managing D Deput

aroon a s k c u r P ittiponagging Director Mr. K ty Man Depu

K $ BBA, Assumption University Q $ - 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 & S " Business Management Illegal Record in past 10 years - none -

K $ - MBA, Assumption University - Bachelor of Accounting, Thammasat University Q $ - Deputy Managing Director Asiasoft Corporation Public Company Limited  X

#

" " J ! X ! Co.,Ltd. Training Program organized by Thai Institute of Directors Association (IOD) - none & S " - Accounting and Finance Illegal Record in past 10 years - none -

18

porn it h c g n a nee T n a w irector u D S t . n s e r m M ss Develop Busine

lawatDhiraector u s o K g System dthapon

Mr. Aement Information Manag

K $ - Master of Business Administration, Mahidol University - Bachelor Degree - Computer, Khon Kaen University Q $ - 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 & S " Information Technology Management Illegal Record in past 10 years - none -

K $ - MBA. (Marketing) , National Institute of Development Administration (NIDA) - Ms. Science (Medical Technology), Chulalongkorn University Q $ - Business Development Director Asiasoft Corporation Public Company Limited - E-Business Director Asiasoft Corporation Public Company Limited - E-Business Director Playpark Company Limited   J4 < % ! Y Training Program organized by Thai Institute of Directors Association (IOD) - none & S " E-Business Illegal Record in past 10 years - none -

19

e

taw n o o P e unoer r A s is Mance Direct Fin

ee paersks Development H g n a S Mr. ational Busin Intern or Direct

K $ Bachelor of Arts in Economics, Kyonggi University, South Korea Q $ - International 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 -

K $ - Master of Accounting, Thammasat University - Bachelor of Accounting (2nd Hons), Thammasat University Q $ - Finance Director Asiasoft Corporation Public Company Limited  j # ## > 6 @ % ! Limited - Finance and Accounting Advisor One Stop Service Company Limited  X j ; %# ÂŒ % > $# 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 & S " – Finance and Accounting Illegal Record in past 10 years - none -

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& U ! Introduction X'

! $ " experience.� Such is the key notion of Corporate Social Responsibility of Asiasoft Corporation Plc . As the pioneer of online entertainment in Southeast Asia, we bear a wide range of experience and expertise in information technology to develop Thailand with new “Digital Life� !* 4 6 # % # % %

$ # % # 6 # for the community at large, in terms of offering advanced technology education, training effective time management, and raising social and # ! * " ! # %# ! 6 ! # $ ;

%% V constant, sustainable growth and development. Working towards this goal, we have established three main approaches which consist of the education and youth program, the social and environmental program, and the program to enhance government activities.

Education and Youth Program Education development and learning capability enhancement are essential contributions to a better quality of life for our children. With this notion in mind, Asiasoft has supported many activities that help enhance skills, knowledge and educational opportunities for children. We hope this will be the beginning of knowledge that leads to sustainable social development.

1. Gamers Love Dad Campaign The Gamers Love Dad campaign acts as a platform for

#

# ! # ! %

‹ ; ! � and express love and appreciation towards their dads. This campaign has been held annually since 2006 until the present time.

& X % >#

Gamers Love Dad event, which this year featured the theme “Together More Power�, with an aim to offer great opportunities for online gamers

# ! # ! %

‹ ; ! � % occasion of His Birthday Celebration on 5th December. Carrying out the concept “Together More Power�, the 5th Gamers Love Dad campaign was one of our annual Corporate Social 7 % $ # ! % ; * < %# #

# ! # ! %

‹ ; ! � % # appreciation towards their dads. This year, the Gamers Love Dad campaign collected more than 7,000,000 million baht in sponsorship. All of the money raised went

‹ ; ! � V ‹ ; !V Principal Private Secretary for supporting some prestigious foundations under the Royal Patronage, including the Chaipattana Foundation, the X # j ' 7 ; % ; j ' > 21

Dabos Foundation, The Distance Learning Via Satellite Foundation, " J ! # % > ; * ‘ # nations for those reputable foundations that work for children, such as the Foundation for Children and Youth, the Foundation for the Better Life of Children, the Thairath Foundation, the Bangkok Post j ' " 4

6 ; j 4  6 ‹ 6

# Foundation for promoting youth education and development.

2. 4th Pun Nam Jai Hai Nong Project " > † J ‹ † % ; _� Children in Need) is an annual event that Asiasoft has organized since 2007 until now. It aims to let Asiasoft Board of Directors, executives, employees and customers be part of social activities and volunteer work, such as repainting old school buildings, organizing school lunch feeding, conducting recreational activities, donating sports and school supplies, and granting scholarships. This year, we went to Baan Non Sao Ae School and Nikhom Songkroh School in Sa Kraw on 18 September.

3. Asiasoft Opens House Project Asiasoft always opens house to welcome those interested, be it teenagers, students and teachers, or government

# ' # $ % # and website business. This knowledge center serves as a special platform for taking a look at ground breaking trends and visions, as well as in exchange of online business information and knowledge.

( & \< > ]

" 4  ‹ % % ;

increase educational opportunities for children in remote areas to gain basic knowledge in information technology.

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& > 1. Flood Victim Aid Project " % ;

#% the f lood victims, including our @CafĂŠ e outlets, throughout Thailand. At f irst, we donated 900,000 baht and 200 dozens of drinking water through the Friends in Need (of “Paâ€?) Volunteers Foundation, the NEWS Family for Help Flood Victims 53, and the MCOT in Help of Flood Victims . We also visited and aided our 500 @CafeĂŠ outlets in Kamphaengphet, Chiangmai, Trat, Nakhonsawan, Phichit, Phetchabun, Singburi, and Uthaithani, by extending their @CafĂŠe membership for 6 months without paying any fees.

$ _ H > ]

X % % # % ;

#% earthquake victims in Haiti with a contribution of 100,000 bath through Channel 3 at Maleenon Tower on 22 J !*

3. Gamers Can Do Project " Œ % ; ' # “Pub Kha Pa Ta Lui� (Roll up Your Pant Legs, and Go out "

‹ #%`' ; ## X executives, employees, and customers to take part in volunteer work for helping the students and schools that $! ( #

* ‘ ## = ' bath through @Cash Payment Channel, together with all the necessities such as food, school supplies, clothes and blankets, and donated to the students and schools affected by flf looding in Nakhonratchasima, Nakhonsawan and Ayudhya.

23

Highlight Events in Year 2010 Thailand  J " # ÂŒ 4 _J ! `  X % ># ; > > *' Y * > % *' Y *  $ ! j ># *'

; # < % $! # 4 ; > † ;

# _J ! ` - Launch of @Global Games, international game server portal (February 2010)  Y � < 4 ! % " # (March 2010)  Y “� ! # " # _ ! ` - PlayPark.com received the Number 1 Most Visited Website award in the game category for four consecutive years, and the Number 10 Most Visited ‘ $ " * ‘ $ X : _J ` - Launch of Rohan (August 2010) - Hosted Asiasoft Grand Sales (September 2010) - Asiasoft All Star Battle 2010 Brought to You by Sony (September 2010) - Launch of Dragon Oath (September 2010)  X % ># ; X % ! *' Y *

launch cash card (October 2010) - Hosted PlayPark FanFest 2010 (October 2010) - Launch of live chat service (October 2010) - Launch of 12 Sky2 (November 2010) Â J 7 < ! }th celebration of ragnarok in Thailand (November 2010) - Hosted Asiasoft Thanks Press Party (December 2010)

Malaysia - Asiasoft Online to Launch AIKASEA in 2011!! in December 2010 - Hosted the Win with @Global Games in December 2010 - Hosted Asiasoft Amazing Race 2010 - Hosted ASGH 2010

& - Asiasoft Online to Launch AIKASEA in 2011! in December 2010 - Win with @Global Games! in December 2010 - Asiasoft Amazing Race 2010 - ASGF 2010

)

Vietnam  Y $ • @ ‹ – j $ !  # $ •‡ Y — – )'~ ' ' ‡† in March 2010 - Launch of FOH online in April 2010

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ED H C N U A L D N MES A A G L I E A IN H L T ON IN

2010

&$!

Rohan ` "

O ASIASOFT C

MITED OMPANY LI C C I L B U P RPORATION

26

ASIASOFT

CORP

COMPANY C I L B U P ORATION

LIMITED

T R O P E R L 0 A 1 U 0 N 2 AN

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Financial Highlight k & qK w Revenue from Sales and service income-net Π>

Net income before interest expenses and corporate income tax † >

2010 1,512 718 367 =)

2009 ')): 626 276 178

2008 1,587 662 =) 185

K & qK w Assets Liabilities Shareholders’ Equity

2010 1,770 ):} 1,273

2009 1,700 )= ' )

2008 1,713 )~} 1,261

&

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

2010 ) 1 0.87 *&)

2009 308 1 0.60 0.58

2008 300 1 0.69 0.63

2010 }*):+ ~* )+ * ~+ 0.39

2009 * + *)=+ )* }+ 0.37

2008 *~ + )*) + * + 0.36

S ! U † > _+` 7 X _+` 7 ? ! _+` Debt Equity Ratio

28

Nature of Business History and Major Developments Asiasoft Corporation Public Company Limited (the “Companyâ€? or “ASâ€?) 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 as a distributor of PC games. The  % !' * >

4 ; % ' * " " Y * Y � % ' # % 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 serve Thai gamers. This game was an immense success, > 6 Š '= * " ; % ' % ! #! 6

# # %

" # * < ) ~' % ! # Œ % % ; #

# ! Œ %V % ' ! Œ %V management. At present, the Asiasoft Group (the “Group�) comprises 8 companies, as follows.

U ${ a "

:*&+ # $! % % # % * #!' ># !> # # ? % *

' | ) % " Company 1. Asiasoft Corporation Plc (“AS�) 2. Asiasoft International Co., Ltd. (“ASI�) 3. PlayPark Co., Ltd. (“PlayPark�) )* X % # *' Y ** _•X % #–` 5. FunBox Co.,LTd. (“Fun Box�) 6. PlayPal Co., Ltd. (“PlayPal�) 7. Asiasoft Online PTE LTD. (“ASO�) 8. AS Online SDN. BHD. (“ASM�)

Country Thailand Thailand Thailand

Main business Online game services business and distribution of games in Thailand Investment arm of the Company 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 # % > # < Investment Singapore Online game services and providing support to ASM in its online game service as well as its distribution of prepaid cards in Singapore Malaysia Online game services and providing support to ASO in its online game service as well as its distribution of prepaid cards in Malaysia

29

For the online game service in Vietnam, the Company has sub-licensed the right to operate online game business to CONG TY "†‹‹ ‹XŠ X _• " –`' ‡  % ! ;

'

% # ‡ 6 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 6 * ‹ ' % % ‡ 6

J ! &' % ! %#

6 a direct investment in the online game business in Vietnam and currently in process of setting up a new company and consider appropriate time to enter into Vietnam market.

30

" | ) K @ | ) K

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. 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 center to answer technical questions and questions relating to playing ##  # ) ! well as through the Counter Service “@Club�.

The Group is a Southeast Asia’s leading provider of online entertainment service relating to online games, with the largest market share based on service income from online games in Thailand and Singapore and the third largest market share in Malaysia and the fourth largest market share in Vietnam in 2010 (Source: Internal Research). The Group launched its online game " # } •7 6 line�, which was an immense success, with the highest number of Peak Concurrent Users of over 110,600. As of 31st December '

# : # # $# ) ] Thailand (20 games), Singapore (10 games), Malaysia (10 games) As of 31st J 5 5% | " and Vietnam (11 games). During the past 3 years, the provision of online game services generated the Group’s main income, the rights to service online games totalling 29 online game

( % " & + Π%V

# * The provision of online game services in all of the above countries except Vietnam is operated 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 %

!

#! modate a large number of gamers using the services simultaneously. In 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 ‡ 6

J ! &' Π% 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 virtual money to buy in-game items. There are 2 types of prepaid @Cash cards. " !% %# ' # $! $

' < cafes and convenient stores. The second type is the electronic cards, which are sold electronically via various systems such as

Online game

Type of game a

Type of revenue model b

1. Ragnarok Online 2. Maple Story 3. Yulgang )* Π% 5. The Legend of 3 Kingdoms 6. CABAL 7. Ghost Online 8. Huang Yi Online 9. Dekaron 10. WFFM 11. Rappelz 12. 12 Sky 2 13. Atlantica )* j

MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG MMORPG

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

31

Online game 15. 3 Kingdoms Warriors 16. Rohan 17. 8inw 18. Might and Hero 19. Chosen 20. Audition 21. GetAmped 22. Grand Chase 23. Freestyle Street Basketball )* 4 # 25. Richman Online 26. GetAmped 2 27. Sudden Attack 28. Filed of Honor 29. Vanilla Cat

Type of Type of revenue game a model b MMORPG Hybrid Sale MMORPG Item Sale MMORPG Item Sale MMORPG Item Sale MMORPG Item Sale Casual Item Sale Casual Item Sale Casual Item Sale Casual Item Sale Casual Item Sale Casual Item Sale Casual Item Sale FPS Item Sale FPS Item Sale Web Game Item Sale

U $ {

Type of Revenue 1.Revenue from online game service

2008 Baht ; Million 1,166 72

2009 Baht ; Million 1,195 81

2010 Baht Million 1,360

; 88

2.Revenue from distribution business

358

22

217

15

)

8

3.Other income

88

6

60

)

56

)

Total Revenues

%}

100

%(~#

100

%*(5

100

' | ) !

! " Type of Revenue by geographical areas 1. Revenue from operation in Thailand

2008 Baht ; Million 1,027 =)

2009 Baht ; Million 1,000 68

2010 Baht ; Million 1,083 70

2. Revenue from operation abroad

585

36

)}

32

)~}

30

Total

1,612

100

')}

100

'~)

100

a

MMORPG is a game which can serve 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 and hybrid sale is a combination of above revenue models.

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 in the shops. Moreover, the Group also operates related businesses such as the advertising in online game website and website game portals www.playpark.com

& | ) k The Group’s main income by type of business can be divided into 3 main types, as follows.

> & 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 detail as follows: Online Game Operator Online game is computer game which is served 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.

32

The online game business is the main source of the Π%V ' & + Π%V total income in the past 3 years. The Group operates its business

% $

$# % # game services to gamers in each country, from acquiring game licenses, marketing and publicity, establishing game information center 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 (in 2009, ASM install its own server system to provide online game services to gamers in Malaysia and commercial within 2009). As of 31st December 2010, the Group provides online game services in

# : ) ' ## * & countries Thailand

Number (games)

Singapore

10

Malaysia

10

Vietnam

11

21

" provided as of 31st December 2010 Ragnarok, Maple Story, Yulgang, Audition, Granado Espada, Huang Yi online Grand Chase, Cabal, Ghost Online, Sudden Attack, FreeStyle Street Basketball, The Legend of 3 Kingdoms, Richman, WFFM, Rappelz, 12 Sky 2, Atlantica, Monster Master Online, Vanilla Cat, Rohan and 8 inw Maple Story, Yulgang, Audition, Getamped, Cabal, Monster Forest, Ray City, Sudden Attack, Warrior of the 3 Kingdoms and Battle of Immortal Maple Story, Yulgang, Audition, Getamped, Cabal, Monster Forest, Ray City, Sudden Attack, Warrior of the 3 Kingdoms and Battle of Immortal Ragnarok, Getamped, The Legend of 3 Kingdoms, Huang Yi Online, Richman, 12 Sky 2, Monster Forest, GetAmped 2, Might and Hero, Filed of Honor and Chosen

In 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. In order to support the online gamers, the Group has established game information center to answer technical questions %# ! ##  # ) hours a day as well as through the Counter Service “@Club� for customers who wish to contact in person. This service allows

; ! %# ! % #! #!* The close contact between the Group and gamers through such information center 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. In the year 2010, the company set goals and plan to increase latency of @Club. The Group plans to open @Club at the Esplanade Ratchada, which is expected to be open within the year 2011. The Group also 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 allow to connect 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 technology and lifestyle products 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

%

' %

# : ) as of 31st $ * " $

) types, as follows: The types of online games which the Company operated as of 31st December 2010 are as follows:

33

Type of games

Online Game

Revenue Model

U $ { Air Time Sale is a revenue model charging of game services

Ragnarok Online Maple Story Yulgang Granado Espada

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.

CABAL Ghost Online Huang Yi Online Dekaron WFFM Rappelz 12Sky2 Atlantica Monster Forest Warrior of the 3 Kingdoms Rohan 8inw Might and Hero Chosen

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

Type of games

Online Game

Revenue Model

2. Casual Game

Audition GetAmped Grand Chase Freestyle Street Basketball Summoner Master Online Richman Online GetAmped 2

Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale Item Sale

Type of games

Online Game

Revenue Model

3. First Person Shooting (FPS)

Sudden Attack

Item Sale

Filed of Honor

Item Sale

Type of games

Online Game

Revenue Model

)* ‘ $ $ Game

Vanilla Cat

Item Sale

1. MMORPG

The Legend of 3 Kingdoms

a.1 Massively Multiplayer Online Role Playing Game (“MMO RPG�) MMORPG is an online game which can serve 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 be friend with 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: ˜ Œ %# ! simultaneously, using the Multi Character Control System: MCC). Each character has a continuous role and different strengths and weaknesses. ™ ˜ Œ # # ## 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. ˜ " # ## $ $

occur in real life such as weddings, accepting other characters as %# ' %

%% * ˜ " #

$ ## continue its story endlessly. ˜ # ! #

' % #!

the game which requires a considerable amount of time to move to the next level in the game. a.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 ##! % ' making the game suitable for relaxation online Game Service Fee. At present, the Group charges fee for the online game services through the following 2 methods: # H ' & Gamers pay fee for the online game service according to playing time in the game, mainly used for MMORPG. Currently, )

only Rangnarok Online game is under this model which contributes *=+

# *

Internet cafÊes to create understanding among distributors and Internet cafes about online games, services and pricing strategies of the Group. In 2010, the Group set goal and plan to increase latency of @Club. The Group plans to open the @Club at Esplanade Ratchada, which is expected to open within the year 2011, which is greater than customer’s service. New @Club has more space to support marketing activities, launch of new products and new games including being a training center for playing online game. In addition, it can be arranged for marketing activities with business partners such as Coca-Cola, Nokia and 3BB.

( k & This method usually 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 B. Distribution In providing online game services, the Group distributes 2 the world are changing from Air Time sale to Item Sale due to the $ # ##

%# ! ## types of goods: 1) @Cash prepaid cards for the payment of online game attract both existing and new gamers to try and play the games, and thus will increase the opportunity of the Group for higher service fee and 2) Client programmes, which gamers have to install on income through the sale of in-game items

% $ %# ! * " ÂŒ % $ # effective distribution provides an important channel to access the Distribution and distribution channels Group’s target customers. H $ The Group has been operating under the trade name b.1 Distribution of @Cash prepaid cards “Asiasoftâ€? from the beginning of its operation in 2001. The name The Group distributes @Cash prepaid cards which are has become widely known among gamers throughout the region as used for paying the online game service fees. When gamers buy a leader in the online game market both in terms of the selection of card, they will receive a serial number and password for registration leading games, the marketing activities for maintaining its customer for air time, exchange for points or to be used as virtual money to base as well as the reliability of its server system in providing buy in-game items in every game of each country. Each card will services. have a maximum lifetime. Moreover, the virtual money in the card Marketing activities are an important strategy for effective can also be used to play and buy items from other game publishers communication with customers regarding the services and online that are the Group’s alliance. The distribution of @Cash is operated games offered by the Group. Moreover, they provide a means for through 2 channels as follows: causing awareness among the customers regarding the availability of online games as an inexpensive and convenient option for their (1) Through the distributors Most prepaid plastic @Cash cards are distributed through daily entertainment. In addition to the launch of new games, the Group’s marketing activities also include activities aimed at the distributors. strengthening the Group’s market status, organisational image and ™ ˜ }Â

] " # #! social responsibility. Furthermore, the Group regularly conducts a to customers at the 7-11 stores located throughout the country. market survey in order to understand the needs and behaviour ™ ˜ % % ] % of gamers, which are the basis for effective marketing strategies network of shops to sell game products, game products wholesalers leading to highest customer satisfaction. In addition, the Group and computer product wholesalers. Such distributors may sell @Cash 6 ; $

35

cards directly to gamers through their own network of shops or resell to retailers who then sell the cards to gamers. ˜ < ] ##

% 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 in the past 2-3 years. Electronic @Cash cards can be purchased by cash, money transfer or credit cards through the electronic system, as described below. Thailand: ™ ˜ ‘ $ ] # Œ %V $ “4 % “ Online (for @Cafe members only). ™ ˜ $ # % ] “ $ # # # @Cash cards via mobile phones and gamers pay by sending an SMS through AIS network for prepaid system ˜ “  > !] " # % ! ! * Gamers make payment through the terminal and receive vouchers for using in the online registration to pay online game service fee. ™ ˜ Y  > ] " # % ! ! # % $! Malaysian Company. Gamers make payment through MOL e-points for using in the online registration to pay online game service fee. " %

J #! * ™ ˜   ## ] " $ #

% ! ; X<4' # $ # % %

* Gamers can buy 1-2-Call prepaid card which “@� symbol at the Conner. The card can be used the same as @ Cash card. The group started this service in September 2010. & ! { ™˜ # ] " # # “ through www.passport.asiasoft.net where payment is made through credit cards. ˜ Y  > ] % ! ! # ! ' can purchase electronic @Cash prepaid cards through MOL e-Points at the authorized shops. ˜ 4*X* * � 6  > ] " % ! ! 4 % ' which gamers can purchase electronic @Cash prepaid cards through the automatic S.A.M. machines.

˜ X Œ# $ # Œ % ] “Œ# $ # Œ ## ># ! # in South East Asia to play in the same server, encourages inter-countries friendships and competition in online gaming, by holding SEA Online Games Tournaments and Players are also able to purchase @Cash in South East Asia with Asiasoft’s wide range of payment top up systems.

J " € 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.

J " \ \ Card prepaid cards In 2010, the company added a new channel of payment through 1-2 call cash card, which allows gamers to pay for online game service as shown in the diagram below.

36

Competition strategies J

" " potential X % ' Π% # $ ) 4 X ' #! " # ' 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

% ; ? # # ' 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.

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. c.3 Increasing the number of and expanding the distribution channels The Group plans to increase the number of distributors of @Cash prepaid cards and online products, such as guide book and item package, to cover more wide-ranging distribution channels. In 2010, the company also added new distribution channel as mentioned above and this would increase the Group’s advantages over its competitors in maintaining the Group’s existing customer base and increasing new customer base. In addition, the Group also improved the electronic distribution channels in order to reduce the b. Increasing the number of online games and updating Group’s operating cost in the future. Moreover, the expanded existing games As of 31st December 2010, the Group provides online distribution network can promote marketing activities including

# : ) ' " Œ % distribution of posters and advertisement for penetrating to end cooperated with game developers and game publishers in improving customers. the features and contents of the Group’s online games to make them $

\ always updated. In addition, the Group plans to provide services for Most of online games service operated by the Group new games in each country to satisfy customers’ needs in terms of through the sale of in-game items, the Group focuses on direct design, graphics, and technology. marketing activities with gamers to encourage them to purchase in-game items regularly such as selling in-game item package in & $ The Group uses 3 main strategies to strengthen its market each month, establishing Item Shop and Item Mall on web sites and position, differentiate it from competitors and maintain its market sending newsletter and SMS to gamers etc. leadership in the region. c.1 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. c.2 Direct marketing activities with target customers By using registered user base, 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

Online game information center provides an important service which enables gamers to play games smoothly and continuously, resulting in game loyalty and increased playing time and opportunity to buy item sales. Currently, the Group provides game information through its call center, e-mail and Live Chat

) ## 4 “ # $ 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 which expect to increase in the future. The group obtained ISO9001: 2008 for service.

37

f. 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. Therfore, 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 ? % 6 ' # ' consequently reduces the chance of service disruption. In addition, the Group has constantly improved the information security system to prevent gamers’ information and secrets from being stolen. The group obtained ISO/IEC 27001:2005 (Information Security Management System: ISMS). <4 ^< } ] ~ $! # $# # <4 _" < # \ Standardization) and IEC (The International Electrotechnical Commission), which defined as the management security to intelligence that organizations be provided with customers inside and outside the organization. ' k&  k ~55 { 55*{ ˜

! %

$ # ! # $# '

* ˜

% % ! $ #! $

$ business partners. g. Appropriate and competitive online game service fee < Π%V % # !

# %% %

!* j 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.

38

ASIASOFT

CORP

COMPANY C I L B U P ORATION

LIMITED

s s y e l r s g u o o Pr Continu

39

Industry Trends and Competition

‚ ? " ! The piracy problem of music, PC games, computer pro | $

% ;

# " & H | problem for operators in this region and has so much impact $

on their operations that some operators have been driven out of The Southeast Asian region is the target market for the business. On the other hand, there is less piracy problem online entertainment services of the Group, which consist of 6 for online game operators because the main components of online countries: Thailand, Singapore, Malaysia, Vietnam, Philippines and games programme are contained in the servers of the operators, Indonesia. Niko Partners, a leading research house specializing in which gamers cannot access. Moreover, the client programme, online game in China and South East Asia estimated that the CAGR which is a programme for installing on the gamers’ computers before

6 # ) ! ## $ :*}+ % !

%# ! ' % * " ' % ! % $# the region’s total market value of Baht 12,577 million in 2010 and of online game is not as severe as in the case of other copyrighted ) 6 # ~'&)~ ## *

# work in the form of CDs, DVDs or cartridges, which can be easily network fever such as Facebook, Twitter push number of internet copied and distributed. user to grow rapidly in this year. However, number of internet users ‚ k > " $ and number of gamers support the online game market in Southeast Currently, the PC price is not high and a lot of people can Asian which has huge potential growth. afford to buy it and higher Internet and broadband penetration rates %

# ! ; ! $ continued to expand the pool of gamers in the region. Thailand also advantages over operators in other online entertainment industries moves toward this trend, in addition the Internet service providers such as PC games, arcade games, movies, music and karaoke, as compete on internet speed which results in decreasing Internet cost follows. when the speed increases. ‚ ! Online games can be played anywhere that has " ! ' %

< * " ; ! %# ! & % ! _ online games in Internet cafes, as it is inexpensive, convenient and " Œ % % # ) ] is a meeting place for gamers. However, in Singapore, most Thailand, Singapore, Malaysia and Vietnam. The online game induspeople play online games from their own computer due to the adtry in these countries is growing rapidly. In the past, most online vanced Internet network in Singapore. In comparison to other online game operators were small operators which offered a limited number entertainment services, the cost of playing online games is still low. of online games, mostly MMORPG games, and charged for their ‚ ' ] ! services through air time sale. Currently, the competition in the continuous basis industry is growing rapidly due to the entrance of large operators Due to the nature of online game playing, which promotes and the continuous launch of new online games. Furthermore, the group relationships through competition or contact with other gamers change in the revenue model from air time sale to free playing but who are in different places at the same time, especially MMORPG paid for in-game items, has contributed to the greater intensity of games, in which each game plays a different role in a team and helps competition in the online game market.

%# ' # The online game licensing fees are an important operating games more entertaining and interesting. Moreover, gamers have to cost for operators in this business. At present, most game operators take time to develop skills in the games in order to be the winner, in the above countries normally acquire licenses of online games that thereby increasing gamers’ relationship to the games. 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. The industry trends and competition in the online game markets in Thailand, Singapore, Malaysia, Vietnam and Indonesia can be summarised as follows.

a. Industry trends and competition in the online game $ ' The online game market value was 3 billion baht in 2010 (source: from Kasikorn Research). In 2010, the competition was high $ % $# ~ :

) 2010 when the number of games increased from 86 games in 2009 to 111 games in 2010. MMORPG still maintain its popularity among )&*}+ ## j>4 % % # !

}*:+

# * # $ }*=+ ~*&+ % #!* X Thailand including Funbox is a market leader with market share of %% #! ) +

# # 6 * ]

" business in Thailand ‚ | " k 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 6.0 Mbits/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 ; ! $# ' # $ # ! $ $ < the interest in online game playing as well as the accessibility of online games to new customers. ‚ _ ! In the recent period, online game operators have launched new online games which have variety of both features and contents. " ! ; ! # %# ! ' ing gamers’ choices and attracting an increasing number of targeted customers to try online games.

‚

]

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

% ) ## services, regular content updates, other social events, as well as promotional campaigns through the various media to meet gamer expectations. ¡ ‚ & & H

$

In the past, playing games on computers are often viewed negatively or thought of causing problems for teenagers. Currently, sports categories, called Electronic Sports or E-Sports, according to the opinion of the International Olympic Committee (IOC) with the idea that playing computer games about sports is helping to develop an athlete. It encourage for the arrangement of the competition among gamers both in Thailand and international. This originated the ideas in the formation of the Association of sports games in Thailand. To effectively manage Control and supervision, as well as to promote and encourage athletic games in Thailand as it occurred in South Korea. It will eventually stimulate the online game market in Thailand to further expand. Especially when youth or others who are interested in playing game like to develop their skills to enter into game competitions. It will eventually expand the game players base in Thailand.

b. Industry trends and competition in the online game $ & ! In 2010, online game markets in Singapore and Malaysia were so competitive which caused small-size companies 6 $! * X ; %# ! # lot of new games in the market and the number of online game # !

)} * Gamers in Singapore and Malaysia still prefer MMORPG =)*~+' # j>4 ? # 6 =+ *~+ ‘ $ $ game.

)

]

" & ! ¡ ‚ " launches. With the free-to-play model being dominant in the market, it will be more challenging for game publishers to retain current gamers. Game publishers will need to constantly upgrade existing games or offer new virtual items for sale to attract gamers to return to the game. ‚ " $ 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 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.

industry in Indonesia is not so competitive as there are currently 16 publishers, operated 39 games. In comparison to Thailand, Singapore and Malaysia, the number of games are relatively low. The j>4 6 ; ! 6 ==*:+ # 7>Π# Π* + *:+ respectively.

]

" business in Indonesia ˜ < # V % % # !

# % % # ) ## $ < million, or ranked the 5th in Asia. The Internet players against the % % # * +' ## # % other countries in SE Asia. ˜ #!' < V % %# # network. It is visible from a number of the facebook users increased to 35.2 million in February 2011 or only second to America which has facebook users of 152.2 million. It grew rapidly from early 2010

%% #! ~ ## * j ' < c. Industry trends and competition in the online game social network country which will support the online games industry. As one of the key factor in playing online game, where gamers have $ _ In 2010, MMORPG games are more popular in Vietnam an opportunity to chat or meet in the online world. Considering all = * +

#' ## $! # =*&+ these factors, the online game market will grow rapidly in Indonesia. which increased its popularity among gamers, FPS games and Web- ˜ " # 6 < ## #! as a number of publishers and a number of games are still small $ * + * + % #!* when compared to other countries in SE Asia and competitors in ]

" the market. There are no particular strong competitors as Lyto who was the pioneer and number one in this market before. After the business in Vietnam launching Point Blank in the year 2009, PT Kreon became no.1 in ‚ | " The government promote the usage of internet, therefore, this market. If a game publisher obtains a successful game, then It Internet adoption in Vietnam is growing at a robust pace. The is not hard to be a leader in the Indonesian market. broadband connections with higher transfer speeds and stable quality have become increasingly widespread to cover most area in Vietnam with lower cost of internet. In the past 2-3 years, the number of internet users for both working and entertaining increased rapidly, which will continue to expand the online gaming market in Vietnam. In 2011, the company plan to expand business into a new market in Indonesia, currently the online games

)

U $ V

U $

U $ "

! Currently, online game business in Thailand is regulated by the Ministry of Culture, Department of Intellectual Property, the Ministry of Information and Communication Technology, and the Ministry of Commerce. The Ministry of Culture governs on the game operating license and examines the game content before the launch of the game into the market. Department of Intellectual Property, the Ministry of Commerce also governs an issuance of copyright code (DIP code) to copyright owner for game disc production. Ministry of Information and Communication Technology released Computer Related Crime Act. B.E. 2550 (2007) for the regulation and computer related crime protection. The Ministry of Culture is working on the game credit rating for the appropriateness of the game. Last year, “the white % ; – %

# # ! " !*

' # relating to online game industry in Singapore is not as strictly as or regulated as much as in Thailand. The online game market in Malaysia is relatively new; therefore, government regulation affecting online game industry and internet cafes is not clearly stated to regulate the internet cafe for internet using or providing online game service. However, changes in government regulation relating to online game industries

%# ! # # Π%V $ ' # # of operations in the future. In Vietnam, government still control over the media sector and the law strictly governs the online game business, especially for the restriction for foreign investment in Vietnam. Currently, the company is in the process of setting up a company in Vietnam and considers on the appropriate time to enter into the Vietnamese market.

U $ "

At present, the competitiveness of the online game market in Thailand, Singapore, Malaysia, and Vietnam is increasing as a lot of new comers enter into the markets and introduce a wide range of online games to customers. The trend of increasing in number

% $#

% $ # ! # !*

K $ U $

$ " " ! ! company group For the publishing of the online game, the initial investment is substantially high, the investment includes license fee, servers and related computer equipments, as well as the marketing expenses. If the revenues generated from operating of the online games do not cover

% ' ## %

% # % Π% future. Consequently, the Group may consider to write-off its deferred licensed fee of any particular game in full amount if tendency of the #! # ' ## #! Π%V # % % 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

# : #

# ) ' # " # ' # 4 % ' # # ! # ‡ and continuously launch new online games in the future.

)

U $ \ and various web sites including @Shop and @Cash online. In 2010, the company cooperate with Advanced Info Service Public Company items In the past, the Group’s revenues were mainly derived from the air time sale of its online games. However, its revenue at present mostly comes from the sales of in-game virtual items and increasing revenue from this will continue in the future. This was partly due to the gamers in online game market changing their behaviours towards free-to-play online games and purchases 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 declining service revenue generating from selling in-game items 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  #!' ÂŒ %V $ ' # 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.

Limited, a large mobile phone operator introduced 1-2 call cash card for playing games as another channel to penetrate to the area where the other channel cannot reach and also reduce the dependency on

; $

*

( U $

! " Â 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 specific 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 improve % ' % # ' # $ * " Œ % 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, ! Œ %V $ ' # # # U $ | ) of operations in the future. In order to reduce such risks, the Group has a policy of distributor The Group currently distributes the @Cash prepaid cards procuring copyrights from various developers or distributors of online through convenience stores (CP7-11) of C.P. All Public Company games, whose reputation is widely recognized. The agreement with Limited (“CPALL�) via outright sale with credit terms. If CPALL the copyright owners will specify a renewed term and conditions as discontinues its business or stops ordering @Cash prepaid cards, the

$ # Œ %V $ ' # # % ! are still popular, in which MMORPG games and Casual Games have the useful economic life of 2-3 years. 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 * U $ ! At present, some operators illegally import online game the Group and CPALL have always maintained a good business relationship. Moreover, the demands for @Cash prepaid cards remain programmes whose copyrights have been granted to the Group, high throughout the country, which generate steady income for the install them in their servers and provide services of such games distributor. The Group also has another distribution channels to sell through their own network at a lower fee service rate. This may its @Cash prepaid card through other outlets including other conve- result in the loss of some of revenue. However, the services pronience stores and retail outlets. In addition, the Group also sells the vided through the piracy servers are normally poor in quality both in cards electronically through e-pay, mobile phones (@Cash on mobile) 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 viola ##

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investigate and proceed legal action against copyright violators.

# U $ ] ! ) + ! management of the Group After this offer of newly issued ordinary shares to the public, the shareholding proportion of Mr. Pramoth Soodchitporn’s group, the Œ %V ; ! # ' $ ~ * +

# % Â % % #' $#

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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 % $ #

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are outsiders to scrutinise the management of the executives and to look after the interest of the minority shareholders.

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!) & As of 31 December 2010, the Company’s registered capital was Baht 316,000,000, divided into 316,000,000 ordinary shares with % # * ' )' '&&& %  % % #'

)' '&&& ! % # Baht 1.00 each. The remaining registered capital of Baht 1,689,112, which is divided into 1,689,112 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.

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! 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 of issue and offer of Warrants 12 months 18 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 % % ! *= % * " % & + % * " $ 4 > # ##

% # of the warrants to purchase ordinary shares to directors and employees of the Company (ESOP) No.1/2008. Therefore, the Company has to ; % 4 > ‘ # =* _ `' 4 > # ##

$ their rights as follows:

& > @ Â 55` Exercise price (Baht per share) Exercise ratio (warrant: ordinary shares) Number of shares to be allotted (shares)

Before adjustment 1.000 1 : 1.000 15,278,000

After adjustment q `5;

w 1.000 1 : 1.019 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 % ! † * ^ & X% # &' & # =* _ `

% # % !V ! _% # Baht1 per share) for new exercise price and due to some employees who have been allocated a number of warrants has resigned, so the # $# ~' }&' ! 4 > ; 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. " ; % $ ## $ ! — % X% # )' : *

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The Board of Directors’ Meeting, No. 6/2008, held on November 13, 2008 has solved the approval of the share repurchase % # % % ' \ $ % !V # ? ! ? ! (ROE) and earnings per share (EPS), as summarized as follows: 1. The maximum amount for the share repurchase is 85 million baht. * † $

$ % &'~ ' _ % # * $ ` ? #

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# paid-up capital. 3. The repurchase period will be started from December 1, 2008 to May 31, 2009. )* > # $ ' :

! ' As of 22nd ! :' % ! % &'~ ' ~:'= ' } *) in total.

!) & H

$ % * 5 % ' ' !) " " { @ & 1. * >

4 ; % a 2. Asia Investment Partners Limited b 3. Mr. Tan Tgow Limc )* 4 # 6 J a 5. Mr. Lertchai Kanpai 6. 4 J ‹ ' J c 7. Asiasoft Corporation Public Co., Ltd. 8. Mr. Suthee Prasertsritong 9. Mr. Nives Hemwachirakarn * * ! J %

@ & ' ') 30,000,000 29,523,990 27,000,000 15,509,500 15,000,000 8,500,000 2,550,000 2,000,000 2,000,000

; < ) *} } :*~)~ 9.393 8.590 )*: ) )*}} *} ) 0.811 0.636 0.636

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Moreover, Asia Investment Partners Limited is the company for investment which was hold the whole shares by Lombard Asia III j ' ‹ � ' Y $ X <<< j % \

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4 X 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. Y ; # '

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

Board of Directors H # J 5 5% !) K J

~ % "

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) % " { Name 1. Mr. Tan Tgow Lim * * >

4 ; % 3. Mr. Lertchai Kunpai )* * 4 6 Â? %

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

At the meeting during 2010 )^) )^) ^) )^)

Independent Director and Chairman of the Audit Committee

)^)

6. Mrs. Tanyaporn Munmee*

Independent Director and the Audit Committee Member

)^)

7. Mrs. Monluedee Sookpantarat

Independent Director and the Audit Committee Member

)^)

~* * # % J 6

* # 4

6% X

$ ? % %

$ # ! financial reports. Miss Nuntaporn Sangduen is the Secretary to the Board.

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*Mrs. Tanyaporn Munmee resigned from the position of the Company’s Director with effective since 1 March 2011 and the Board of Directors † * ^ # ) j $ ! #

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%# Mrs. Tanyaporn Munmee with effective since 1 March 2011.

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4 ; %

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1) Overseeing, monitoring and managing the Company’s operations to ensure that they are carried out pursuant to the law, the % !V $; % ! # # % # $

% governance principles, and ensuring that action taken is in line with the rules and regulations prescribed by the SET and the SEC. 2) Determining or revising the list of authorized directors to bind the Company. 3) Setting policies, strategies and direction for the Company’s operations and supervising the management to ensure effective and %# % #

$

# % !V development. )` 6 %

$ %# ' $ ' ; % ; ' ! any other matters prescribed by law. 5) Appointing any sub-committee(s) or individual(s) e.g. Executive Committee, Audit Committee and Managing Director, to help in

' ## Â % % % !V

$ # V ; * This includes evaluation of performance and determination of remuneration for the members of those sub-committee(s) or individual(s), or # ! ! % * 4 ! !' ' $ ' 6 ' $! the Board. =` " 6

! %# # #^ # 6 management and monitoring and following up those issues on a regular basis. }` > % V X # 7 % _ ` 6 % % # #

# % !V # % % ! * 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 #' % % $# # ( ! 6 * < ' % ! ?

6 prior approval from the Company’s shareholders regarding the Company’s entering into a connected party transaction and acquisition or % # # 4 " %%# $# # * < !

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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 % !V % # $ % ! # # ' # #' # #! * 4 # ! !

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# # *

):

Audit Committee

H # J 5 5% H

# " { Name * * # % J 6 2. Mrs. Tanyaporn Munmee* 3. Mrs. Monluedee Sookpantarat

Position < %

@ Chairman of the Audit Committee Independent Director and the Audit Committee Member Independent Director and the Audit Committee Member

At the meeting during 2010 6/6 6/6 6/6

Mr. Chalermchai Duphatsakul is Secretary to the Audit Committee. *Mrs.Tanyaporn Munmee resigned from the position of the Audit committee Member with effective since 1 March 2011 and the Board of

† * ^ # ) j $ ! #

%% *" Y

$ X

$ to replace Mrs.Tanyaporn Munmee with effective since 1 March 2011.

' " % H

_ `

% !V # % %

? œ _ `

% !V # # ! # !

! $# ' 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; _)`

' # % %

$ % !V

'

% % % V remuneration, as well as to attend a non-management meeting with an auditor at least once a year; _~`

" ' ! #

#( '

! %# # V # ' $# $ % !œ (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: _ ` % !' %# $ # ! % !V # % ' (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 regulations, or the laws relating to the Company’s business, (d) an opinion on the suitability of an auditor, _ ` % ! #

( # ' (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

' $;

% % $ # $! % !V $

œ (7) to perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee. 50

Executive Committee H # J 5 5%

# " { Name * * >

4 ; % 2. Mr. Lertchai Kanpai 3. Miss Arunee Poontawee

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

At the meeting during 2010 5/5 5/5 5/5

' " %

1) Planning and determining policies, direction and strategies for the Company’s operations to keep them in line with the targets set by the Board for further submission to the Board for approval. 2) 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 $ %% $! ' $;

# ' ! ' # # # % !V Charter. 3) 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 employees at executive levels. )` " 6 ! # % !V $ %

# % % ## $

) ## % * ~` Š 6 # $ 6 ^ # %

% ' # $ ' procurement of credit lines, pledges, mortgages, provision of collateral/security including the purchase/sale and registration of title over land in

# % ' %% % '

) ## * =` % !V % #

# # $ declared. 7) Delegating authority to one or several individuals to act on its behalf on any matter, as considered appropriate, under the %

% * 4 ! !' ' $ ' 6 ' or revised by the Executive Committee. 8) 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 # ( ! 6 * ‹ ' # ! $ #

V # $ # % !V $ % %

V % ^ # # ' $;

' % % !V # %%# $# # of the SEC.

51

Moreover, the Board may revise, where necessary or appropriate, any of the Executive Committee’s duties and responsibilities.

Management _

4 4 "`

H # J 5 5% !) ` " { Name * * >

4 ; % 2. Mr. Lertchai Kanpai 3. Mr. Kittipong Prucksa-aroon )* Y >

% 5. Mr. Park Sung Hee 6. Miss Arunee Poontawe 7. Mr. Adthapong Kosulawatha 8. Mrs. Suwannee Tangchitporn

Position ' X 6

@  # Œ > ;

Managing Director and acting for the Sales Director. Deputy Managing Director Deputy Managing Director International Business Development Director Finance Director Management Information System Director E-Business Director

' " % 1) Supervising, monitoring and approving transactions/matters pertaining to the normal course of the Company’s business 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 benefit of the Company and its subsidiaries. )` # !

' %# ! # # # # % ! $

6 ! %% % $ # _ `' % _ as purchases, employment, payment) under the CEO’s supervision and within the timeframe the CEO sets. Such delegation of authority may $ ' 6 ' $! * ~` " 6 $ # % % ! $

%

# $ #

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.

52

Moreover, the CEO will have no authority to take any action or be involved in any transaction or matter between the Company or ! $ ^ % % $# ( # ! 6 * ‹ ' # 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 % !V $ % ^ % ^ # # $! $;

' % under the Company’s articles of association and the applicable rules of the SEC.

' " % J

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 #

6 ! # % !V # % * 2) Undertaking action and managing operations/activities involving the general administration of the Company’s affairs. 3) Employing, appointing, re-locating, dismissing and terminating Company employees below the executive level as well as ; $ '

%% #_ `

% %# ! % !V Provident Funds Committee. )` X # % !V % %

# ' in properties which does not exceed Baht 10 million per each contract, and delegating the authority for payments to Company’s executives to % ' # ^ %# ! % % ! $ % !* 5) Delegating authority to employees at the executive level or to one or several individuals to take any action considered appropriate on $ #

% $ # _ % ' %# ! ' % ! ` his or her supervision and within the timeframe that he or she sets. Such delegation of authority may be terminated, revoked, revised or $!

* 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. }` " 6 $ # % % !

%

# $ #

% !* 8) Carrying out any other duties which may be assigned from time to time by the CEO. "

## V ; ## % #!

* "

## in accordance with guidelines and policies set by the CEO. Moreover, the Managing Director will have no authority to take any action in or relating to transactions or matters between the Company or any of its subsidiaries and the Managing Director or their authorised representative % $# ( # ! 6 * ‹ ' # ! $ # 6 V # $ # % !V $ % % ^ # # $! ' $;

' % % !V # %%# $# # SEC.

! & ! 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.

53

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 $ % * " ! # $ ? # > $# Y % X ' * * ~ ~' †

4

# # *

# ## $ $! ; !

# ## % ] (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.

## $ ! * X X # Œ # 4 # '  ##

$ # * X

! $ Â %%

*

Executive Remuneration (1) Monetary Remuneration

q w J

) U 2010 Director (Unit : Baht) 1. Mr.Tan Tgow Lim * * >

4 ; % 3. Mr. Lertchai Kanpai )* * # % J 6 5. Mrs. Tanyaporn Manmee 6. Mrs. Monluedee Sookpantarat 7. Mr. Surasak Khaoroptham

Remuneration 360,000.00 ) ' * ) ' * ) ' * ) ' * ) ' * 360,000.00

H " 180,000.00 120,000.00 120,000.00 -

(b) Remuneration of Executive Committee and Management 2010 Unit : Baht Executive Committee Member Executives b

Persons 3 10

Remuneration a 175,000.00 17,801,696.82

U $ : a

% # ' $ ' $

4 # 4 ! j > j ' % ! ' # $ ## * X $! 4 4 "' # * >

4 ; % ' * Y Â? %

*

b

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(2) 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 Company’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 * ‘ ## $ ##

## ]

Name

Position

Allocated Warrants (Unit)

1. Mr. Tan Tgow Lim * * >

4 ; % 3. Mr. Lertchai Kanpai )* X >

~* * # % J 6 6. Miss Tanyaporn Manmee 7. Mrs. Monluedee Sookpantarat 8. Mr. Park Sung Hee :* * 4 7 ;% Total

@

@

@

@ Director Director Director Executive Executive

700,000 600,000 500,000 ) ' 300,000 300,000 300,000 260,000 ) ' #% (5%555

;

Q q;w )*) 3.8 3.1 1.5 1.9 1.9 1.9 1.6 0.3 20.4

55

Human Resources The number of employees and remuneration for the Group of Company (excluding directors and executives) as of the end

! 5 5% "{

As of 31 December 2010 Number of Employees # Π> ;

Business Development IT X @ j Sales Marketing Corporate Service < # # Publishing Others Total ! ) U qK w Salaries Bonus Others b Total

Company ) ) 72 25 27 77 173 1 3 10 435

& a 66 6 26 9 10 32 33 10 ) 196 2010 ::*&) 18.37 30.79

Total 109 10 98 ) 37 109 206 11 3 10 ) 631

249.00

U $ {

a b

Including ASO, ASI, PlayPal and PlayPark, ASM, Funbox. 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 # % * " ## #% %# ! V 6 # <"' %

* %# ! # #   ; $ is the Company’s policy to transfer knowledge and skills among its employees while they work.

56

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. J }'

† * ^ } #

% # % % ' will be used as guidelines. They can be divided into 5 sections, as follows: w ' U & The rights of shareholders covers a variety of rights such as the right to purchase, sell or transfer shares, the right to share in

% !V % '

# '

% %

% % 6 % % !* 4 # #

' %% # ; %

# % 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: ˜ $ # % !V $ $ % % ' # $ on the rights of shareholders in attending the meeting and voting. ™ ˜ ‘ #

% ' %% !

%% %

! 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. ™ ˜ # ' # %% !

% ' ? $! Â #

< 7 # 4 !* ™ ˜ " % ! ## %% %  #

#

6 ? 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 % '

%

! ? $ ( #

* ™ ˜ X##

##

# ! 6 # ! # * w ' & 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: ™ ˜ 4 # ## $ ? # %% # * † ## $ 6 ## # ' # * ™ ˜ "

## $ $! $ # $! #

* ™ ˜ < %

6 ! # ! 6 ' %# to them. These independent directors will give appropriate consideration to each issue. For example, in the case of complaints, they will $# $# !* < %

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. ™ ˜ 4 # ## $

* j %# ' ! # ## $ %% !

57

agenda items before the scheduled meeting date or to nominate directors. The agenda, however, may not be expanded without prior notice to shareholders. ˜ " 6 $! # % #

' ' %# ! %# ! Œ % # _ # %  ; # # `* #w U

" $ 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. † ‚ & { 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. † ‚ ' !) K J

{ The Board is aware of the rights of all stakeholders and the action to be taken to treat all fairly and equitably. ¡ ‚ ! 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-Ă a-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  ## ' % !^ ! ! * † ‚

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.

$ 6 % ##!

%# * ˜ & 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. ¡ ‚

The Company functions within a framework of fair competition and has always avoided dishonest measures that try to eliminate competitors.

58

% & !

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 on-line 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. 4

%# !

% %% % #!

%# ! % % #!* " % !

 # %

" #

%  # 4 V  # % # !* < 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 addi ' # # % $! Œ % $

# % " # V 7 @ * 4) Disclosure and Transparency 6 %# #! # # #

% $# # compliance with the law, the Company shall also make the following disclosures to show the transparency of its operations: ˜ # % $! $Â

? ! * ™ ˜ # # #

' # # # # V % * ™ ˜ # % #

 # # ## ' received by each member of the various sub-committees. ™ ˜ # % # %

%% !' # %# * ™ ˜ 7 % % # % %# * ™ ˜ %% ! % $#

! ^? ! < 7 # * *w U K % \

' K ) & 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 eff icient 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 6 # ' % !V $; ## # % # ' 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 % > ' # $ ' ' 6 ' # '

# $ #

% !V 6* 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

%# ># $ % ! maximum stability for the shareholders. Action has also been taken to ensure that there is a process for regular evaluation of the adequacy

# #' # ' 6 ' # % ## Â % % *

59

#!' % !V

% } $ ' ) Â * " members of the Board are independent directors which, therefore, exceeds one-third of the Board thereby giving an appropriate balance vis-aĂ -vis executive directors. The Board has set up 2 sub-committees to help supervise operations of the Group, i.e. the Executive Committee X

%

%

! * " % $ #

$ % #! % # * 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

$ #

# % $ % ! % # # * ‹ ' $

## $ % ; ! # % ' #$ groups, which together constitute the Company’s founders. 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: ˜ X%% % % $ #

* ™ ˜ X # # % $#

? # !

$# $ # ! 6 # * ˜ # ' % #! % $# * ™ ˜ % $#

# !_ `* 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

; % $# ! $ $

$! # * X

' 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 $! % ! ## $ $# $! # * Report from the Board of Directors " ## $ % $# % % % !V # # # j # 4

% ! $ j # <

$ % X # 7 % * " # ## $ 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 Financial Statements disclose adequate vital information.

60

& \ ! K Â

" ! % $!

' $! % !

$ of each Committee evaluate their own overall performance so that they can together appraise and look at their performance and problems. j ## # ' ## #! % ## %

V !* Development of Directors and Executives " % ! ## %%

## $ $ #

performance and will enable them to exchange opinions, on a regular basis, with Board members and senior executives of other organisations. 4 # $! % !V %# ! ' 4 V ; % 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.

> _ >`'

X > _ X>` X

> _X >` 6 # 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 # % ' % #

# ## ! % % 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: _ `

' ' %# ! 6 Π% 6 % % !

#* _$`

' ' %# ! %# ! Π% !

# ! #

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. (c) Directors, executives, employees and workers within the Group may not buy or sell, transfer or accept the transfer of the % !V # $ Π%' 6 !

# 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 $ ! ## % !V $ # #

% $# * " % # % Â ; #

' %# ! 6 ÂŒ %* < offence to breach this provision. (d) Directors and executives are required to report to the SEC any change in their holding of securities or that of their spouse and non  ; # *

61

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 # $! %  ; # '

% ! #

4 4 " pursuant to section 59 and the penalty prescribed by section 275 of the Securities and Exchange Act, B.E. 2535. $; % %%

# ' % ! % $ %

% # 6 ' ? # ! X $ %

%! \ *

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 " % ! #! % \ ! # # ! $

% # 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

% !V # # !

% !V ; # % % # # !

6 % !V %# # # # (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. 1/2010 held on 25 February 2010 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, _)` ' _~` ##  % ' X

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 % !V #

V % # * " % ! # # # 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. 1) Organization and Environment " % ! % # ! 6 ' % ' \ ' % # departments based on the good corporate governance principles and policies. 62

w U $

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. #w & 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. 4) 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. *w V "\ H

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.

2. Internal Audit " < # X $ $#

$ # X

V %

! # % ' ? ! # ' % ! ' # # 6 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. 1) Medium term plan " % % $# ' # # % \ % ! 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 2) Quality assurance The Company has principles and guidelines for preparing itself for internal assessment and external

! # % ## $; 3) Development of IT audit "

# ! $ % !' % ! % % ! % ! $! # % $ %%# “ � !

$ < Cafe 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.

Dividend Payment Policy < #' X Π% ? # $ % ( # ' X Π% % # !

% !

# % ! $ # * + % % ! _

% !V # ` % ' # #

! reserves. Nevertheless, this dividend payment rate may be changed depending on the necessity and appropriateness, given that this change % $

# * X # % !V

% ! 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. 63

Connected Transactions > H ' ! & " % ! % % # 4

# " 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

% $;

' % ! % % % the Company’s auditor on the transaction to support the decision of the Company’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

" ? % # ; % ! $ ' # % $ $! 4 4 "' # % $ $! < X X

Thailand.

=)

65

' ' " ! & U k Parties in 2010 and 2009 (Unit: Baht Million)

66

67

68

69

70

71

72

U $ {

Asiasoft Group has a regional purchasing policy. The Company is responsible for purchasing all properties, including online game licenses enabling the Company to purchase at better prices and on better condition than separate purchases by each company.

& K J

) Responsibilities for the Financial Reporting The Board of Directors of Asiasoft Corporation Public Company Limited has managed to prepare consolidated and separate #

% # % % # % ! $ ' ## # information contained in the Company’s Annual Report of 2010, 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 % !V # % % #!' !' %# #!' % ! ! % !V 6 % # * " ## # $ #

# ' %# % % ! % # ' ## $# % ; ##! % * < # %

$ ' % !V

% X Committee, with three independent directors who do not hold any positions on the Executive Board, responsible for supervising

? # ! # % # # ! * " % %# # # ! duty of the Outsourcing Internal Audit that elected by the Audit Committee which report directly to the Audit Committee whose opinions on the aforementioned matters are detailed in the Company’s Annual Report. " % !V

V % ' # # % ž # of Asiasoft Corporation Public Company Limited and its subsidiaries of Asiasoft Corporation Public Company Limited, which

X

; #! % !V #

' #

" " J ! X Company Limited, present fairly in all material respects and operational results in accordance with generally accepted accounting ' % % ! % # ' ž # %# # # # # ' # % *ž

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

73

Management Discussion and Analysis of Financial Conditions and Operating Results " The Group is a leading online entertainment service provider relating to online games in Southeast Asia. As at 31st December '

# : # # ) ] " # _ `' 4 % _ `' # ! _ ` ‡ _ `* < ! ' $ " # } + +

# % #!* " ; # &&+ $ &+

)+ of total revenue in the year 2010. < ' % =)*)} ## $ %

% ! }&*): ## $ ' )&* &+* " % !V % % * + :

}* &+ ' # $

% * " % )}*~ ## $ %

% ! &*& ## $ * +

$

# ' ! #* X # ' % !V % *&:+ :

*&=+ * < ' % % ' ## * X # ' % Â &*~ + :

*} + year.

Past operating results of the Group (year 2008 – 2010) Revenues U 55` \ 5 5% | )

# " {

})

Revenue from online game services

'

" %*(5 *; ! " { * "

# # &&+

# ! ' )+ ' :~ ## $ ! $

= ## $ * " $

* ~+ & ## $ the previous year to 920 million baht in 2010, which resulted from the success of both old and new game. In 2010, the company launched ) 46! st quarter, Rohan and 8inw in 3rd ? # ) ? ' # $! j $ * # + :} ## $ % !

) : ## $ ' was mainly due to the success of the old game * 7 $ % &+

# ' % # # ( # % ' $ % Â? $ % V * " ) + } ## $ % !

) ## $ * " $

' #!

% ! # game contract from Blizzard. * )+

# $Â #

‡ ' * 7 }+ = ## $ # !

~= ## $ * " ; stop recognizing revenue from sub-license partner in Vietnam from long outstanding account receivable for royalty.

'

U $ " ! |

75

> % # } + +

# % #!' %

# ! =&+ % #! + % #!* &+ ' ## $ :

' & ## $ ' # # * " + )} ## $ :

)~} ## $ * " % !

$ #( product of a Blizzard game, however, the revenue from online game continues to grow, as mentioned above

| >

Π% % ~+ =~ ## $ :

})= ## $ $

% * " % ) + :

)&+ * Π% )+ ~)} ## $ # !

= ## $ ' #! # ! #* " % ~ + :

~=+ ! * " % }+ ## $ :

= ## $

# %# ! % ' % +

+ in 2010.

† % % ):+ }& ## $ :

=~ ## $ $

% * " % + :

}+ * " % + : ## $ # !

)& ## $ ' #! $ % + :

+ * < ' # ) ## $ # !

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)+ ! * 76

V & Total Asset and Total Liabilities for 2008 – 2010 Assets Assets of the group consisted of:

'

H " %~~5 ‰ * ? # ' # &&} ## $ ~ +

#

<> ) ## $ % ~)} ## $ * < ' % ! % ## $ # % ! ~ ## $ # % ! :* 2. Net trade receivables of 281 million baht decreased from last year, mainly from settings a provision for the receivable in Vietnam in total of 17 million baht. 3. The decrease in Intangible assets (net) and prepaid license fees of 338 million baht was mainly from the amortization of license fees. )* ~} ## $

! ~ ## '

~: ## $ *

non-current assets of 26 million baht, a deposit at bank of 10 million baht and deferred tax assets of 57 million baht.

77

Liabilities | ) {

Total liabilities 497 million consisting of: * ## #

# : ## $ % )&+

# # $ # 2. Accrued income tax was 55 million baht, during the year the company paid the annual tax for 2009 of 55 million baht and a # ! ) ## $ * 3. Other liabilities of 90 million consisted of withholding tax payable 9 million baht and others liabilities of 81 million baht, which increased from 2009 due to estimated accrued bonus payable at the end of the year, which will be paid next year. The 2009 bonus is paid within a year whereas this year bonus is paid in the following year.

78

& ) !

"

# 4 # V ? ! ' } ## $ ## $ + % ! #! % * < ' %

# ~*:& ## $ ' % # # * ## $ # # : )*}} ## $ * ! ' % !V %# ! =')~}' & %# ! 4

6 % ># ' # ##! % % % # ## $

)* ## $ *

79

ASIASOFT

CORP

COMPANY C I L B U P ORATION

LIMITED

y t i l i b a t S s i p e Our St

80

Vk@H@ kH? &'H' @'& H@J H Jk' U)& U > U' H&kH& V' U> UH'k @ > K?k >H@ ?k k' J H@J k'& & K&kJkHUk & V U '< HU& @J J J K U # % 5 5 H@J 55

81

U > U' V '< k@J > @J @' U'kVk J >ŠK?k H Š@'H@'& ' '< &<HU < ?J U& H@J '< K HUJ V JkU ' U& H&kH& V' U> UH'k @ >ŠK?k >H@‹ ?k k' J We have audited the consolidated balance sheet of Asiasoft Corporation Public Company Limited and its subsidiaries and separate balance sheet of Asiasoft Corporation Public Company Limited as at December 31, 2010, and the related consolidated % ' # V ? ! ( # ! * " # are the responsibility of the Company’s management as to their correctness and completeness of the presentation. Our responsibility

% % # $ * " # % # ! $ ' :' % % ' $ $!

% ? # opinion on the audit report dated February 25, 2010. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan # ' $ ' %% # # * X # # % %# $! ' ## # ## # statement presentation. We believe that our audit provides a reasonable basis for our opinion. < % ' # % #

% % % #!' ## # % ' # % $ ' ' # % ( # ! of Asiasoft Corporation Public Company Limited and its subsidiaries and of Asiasoft Corporation Public Company Limited in conformity with generally accepted accounting principles.

K $ $ j $ ! )'

Montree Panichakul > $# X _" # ` 7 † * )= J ? k'' ' Š < ' < H'&Š �Hk‹ & HŠJk' % ?'J

82

83

&)

85

86

87

88

89

H&kH& V' U> UH'k @ >ŠK?k >H@‹ ?k k' J H@J &ŠK&kJkHUk & @ ' & ' Vk@H@ kH? &'H' @'& V U '< ‹ HU& @J J J K U # % 5 5 H@J 55Œ 1. GENERAL INFORMATION Asiasoft Corporation Public Company Limited (“the Company�) was incorporated as a limited company under the Civil and Commercial Code of Thailand on September 20, 2001 and the Company was transformed to be Public Company Limited on May 17, 2007. The Company’s registered address is at 9/283-5, 28th ( #

' Š " # ' 7 6 7 ' 4 # ' 6 6* " % % # $ % ! $ $

% $

# ( #( in Thailand, Singapore, Malaysia and Vietnam.

KH&k& V U >U >HUH'k @ H@J >U & @'H'k @ V '< Vk@H@ kH? &'H' @'& H@J KH&k& V U >U >HUH'k @ V @& ?kJH' J Vk@H@ kH? &'H' @'&

K

" % !V

! # $ % % # " 4

6 " # J ! ' ' $ ' % % % $ # % # % # % # % * * ~))' % %# and practices generally accepted in Thailand. " % ! " % %

! # " # conformity with accounting standards and practices generally accepted in Thailand. " > # # % †

% # % J ! ' : •" > # j # 4 * * ~~ –* " #

! $ ' & % $ # #!* " j X > †

" X 4 (TAS), Thai Financial Reporting Standards (TFRS) and Thai Financial Reporting Interpretation (TFRI), which are not yet effective for the current period as follows: w 'H&% 'VU& 'VUk " Â? ! % 5 {

'H& TAS 1 (Revised 2009) TAS 2 (Revised 2009) TAS 7 (Revised 2009) TAS 8 (Revised 2009) TAS 10 (Revised 2009) TAS 11 (Revised 2009) TAS 16 (Revised 2009)

Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Property, Plant and Equipment

90

TAS 17 (Revised 2009) TAS 18 (Revised 2009) "X4 : TAS 23 (Revised 2009) "X4 ) _7 :` "X4 = TAS 27 (Revised 2009) TAS 28 (Revised 2009) "X4 : "X4 _7 :` TAS 33 (Revised 2009) "X4 ) _7 :` TAS 36 (Revised 2009) TAS 37 (Revised 2009) TAS 38 (Revised 2009) "X4 ) _7 :`

Leases Revenue %# ! Borrowing Costs 7 # > ! # X 7 % $! 7 ># Consolidated and Separate Financial Statements Investments in Associates j # 7 % ‹!% ( ! < J ‡ Earnings Per Share < j # 7 % Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets < > % !

'VU& TFRS 2 TFRS 3 (Revised 2009) TFRS 5 (Revised 2009) TFRS 6

Share-based Payment Business Combinations Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources

TFRI TFRI 15

Agreements for the Construction of Real Estate

The Company’s management will adopt the above TAS, TFRS and TFRI relevant to the Company in the preparation of Company’s # ! $ * " % !V $ #

! ##

! % # % ! ##! %%# w 'H& " Â? ! % 5 #{

'H& TAS 12 TAS 20 TAS 21 (Revised 2009)

Income Taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates

91

The Company’s management anticipates that the Company will adopt the above TAS relevant to the Company in the preparation

% !V # ! $ * " % !V % %

# % ! ##! %%# * < ' j X > †

j X > † * ):^ ~~ † $ )' $ 7 ! # Œ \

$ ~' ' $ "X4* " $ "X4

# %#! †

* " # $ % %

# % # % # * j ' # # $ # " # * 4 # $ % % % % % *

K

" # # ! $ ' : # X % > $# % ! Y $ $! # $ # $ % * Subsidiaries are those companies which Asiasoft Corporation Public Company Limited holds, directly or indirectly, more than 50 % % #' % # % % # ## $! X % > $# Company Limited.

' " {

92

# &k|@kVk H@' H Š@'k@| > ?k k & ' & ƒ " { 3.1 Cash and Cash Equivalents ? # ' % # #! # ?  !

œ # % # ## #* 3.2 Temporary Investments Temporary investments consist of time deposit maturity with term over 3 months up to 12 months, open-ended fund, treasury bill, bills of exchange, bonds and debentures. " % ! # $ # # * " # open-ended fund is calculated by net asset value of the fund as at the balance sheet date. Realized gains and losses from the sales of trading securities and unrealized gain and loss on the changes in fair values are recognized in statements of income. 3.3 Trade Receivables Trade receivables are stated at cost net of allowance for doubtful accounts. Allowance for doubtful accounts is provided at the estimated collection losses on receivables. Such estimate based on the Company’s collection experiences and a review of the current status of each receivable. 3.4 Inventories <

# # \ $# # *  '  _j<j ` * † realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. A provision is made, where necessary, for obsolete, slow-moving, or defective inventories.

# * k & < $ % $! % # ' ; % '

if any. In the case where impairment of investment is occurred, the impairment loss of investment will be charged to statements of income. 3.6 Other Long–term Investments # ˆ % $! # % # ' ; impairment, if any. In the case where impairment of other long-term investments is occurred, the impairment loss of other long-term investments will be charged to statements of income. 3.7 Equipment 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

$ # % % # !* " $ ! % $! ; %

93

# J ! ' :* " % ! : $! ~*}~ ## _4Π) ')~&`* In the case where impairment of equipment is occurred, the impairment loss will be charged to statements of income. 3.8 Lease Operating lease Y

% 6 %

# # operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to statements of income on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period expired, any payment required to be made to the lessor by way of penalty is recognized as an expense in the period in which termination takes place. Finance lease Leases in which substantially all the risks and rewards of ownership other than legal title are transferred to the Company are # # * " % ! % # \ ? % # % # #! # payments or at the fair value of the equipment at the contractual date. The leased assets are depreciated using the straight-line method over

# # * < # \ $! * <

# % \ % * 3.9 Intangible assets Intangible assets consist of deferred license fees for game, deferred license fees for a program, developed games and goodwill. Deferred license fees for games and deferred license fees for a program are stated at cost less accumulated amortization. X \ # # $! Â # % % $ * " % ! ## $

6 # ! ; % ' !* Developed games consist 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 %# Â ~ ! * " % ! ## $

6 # ! ; % ' !* Œ

## % ? # % !V $# ? * Œ

## % ; % ' !*

# 5 ' !

$

Treasury stock is stated at cost and presented as a reduction from shareholders’ 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. 3.11 Foreign currency transactions Transactions in foreign currencies occurring during the year are converted into Baht at the rates of exchange prevailing on the transaction dates. Monetary assets and liabilities in foreign currencies outstanding at the end of the year are converted into Baht at the exchange rates prevailing on that date as determined by the Bank of Thailand. Gains or losses on conversion are included in statements of income.

:)

" # #

% % % % # #

determined by using the following rates: a. Assets and liabilities are converted at the closing rate at the balance sheet date. b. Shareholders’ equity is converted at the rates prevailing on the transaction dates. c. Revenues and expenses are converted at the average rate during the period. Œ _# ` # # # V ? !* Intercompany transactions are converted at the rates prevailing on the dates of transactions and, upon elimination, at the rates prevailing on the consolidation date. 3.12 Revenues and Expenses Recognition Revenues and expenses are recognized on an accrual basis. Revenues from online game services are recognized when gamers use services. Sales are recognized upon the delivery of goods to the customers and after deduction of discounts. Revenues from publishing distribution are recognized at invoice value once delivered, after deduction of goods returned and discounts. Revenues from licensing game services to game shops are recognized by the straight-line method over the license period of 1 year. Revenues from advertisements on subsidiary’s website are recognized by the period of agreements with the advertisers. 3.13 Taxation Income tax expenses represent the sum of the tax currently payable and deferred tax. 3.13.1 Current tax " #! % ! $# $ $# % ! * " $# % % % of income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. 3.13.2 Deferred tax \ % ! $ ! # $ # # % $ % $# % _ $ `* # $ # ##! recognized for all taxable temporary differences, and deferred tax assets are generally recognized for temporary differences to the extent that % $ $# $# % ## $ # $# % ! $ # \ *

95

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no # % $ $# $# % ## $ # $#

## ## %

$ * X ! ## $

$ % $ $# $# % ## $ # $# * Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and the Company intends to settle on a net basis or to realize the asset and settle the liability simultaneously. # ( K & J &

% # # $! % ! $! $

shares during the year, treasury shares number of common shares increased from exercise warrants.

# % # # $! % ! $! $

including the effect of increased shares from warrants exercised 3.15 Use of Management Judgement " % % # ##! % % %# ? % !V

;

% # ' % % # $ # ' # # $ # # % amounts of revenues and expenses during the reporting period. Although, these estimates are based on management’s reasonable consideration of current events, actual results may differ from these estimates.

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$ Proceeds received when employee stock options are exercised and recorded as additions to issued and paid-up share capital.

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96

4.2 Non-cash transactions consist of:

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For the years ended December 31, 2010 and 2009, costs of inventories which are recorded as expenses included reversal in % $ #

# # *}) ## * = ## ' % #!' % # ' # % $ #

* } ## and Baht 1.92 million, respectively.

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10. Long-term investment to others

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11. EQUIPMENT - NET \ J # % {

100

101

102

103

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)

105

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# J V UU J 'HÂ’ H&& '& H@J ?kHKk?k'k & J J # % {

Corporate income tax " % ! # # ! $ ' : ~+* The subsidiary in Singapore calculates the income tax for the years ended December 31, 2010 and 2009 at the }+* The subsidiary in Malaysia calculates the income tax for the years ended December 31, 2010 and 2009 at the ~+* A subsidiary in Thailand calculates the income tax for the years ended December 31, 2010 and 2009 at the % ~+

~+* Three subsidiaries in Thailand calculates the income tax for the years ended December 31, 2010 and 2009 at the +*

107

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* 'UH@&H 'k @& Qk'< U ?H' J >H@k & " # # # % * " % # # ^

%* " # ( # $ determined by the companies concerned. & " ! J # % 5 5 55Π" {

The Company has the above transactions with related parties using cost plus pro t as agreed between the parties concerned.

109

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110

} >? ‹ &' S >'k @& The resolutions of the Extraordinary Meeting of Shareholders No.1/2007 held on May 3, 2007, approved to offer warrant to its directors and employees of the Company and subsidiaries as remuneration of not more than 16 million units at Baht 0 per unit. A warrant is eligible to exercise for buying one common share at par value of Baht 1 per share. The term for warrant exercise will not exceed 3 years from the issued and offered date. The exercise date is the last working day of May and November through the age of warrant, except the last exercise date on May 15, 2011. H J # % 5 5% !) ! (%5((% 55 " "

(%# 5%``` ] ! &

$ " > qX & >”w " {

As at December 31, 2010, the remaining unexercised warrants are 1,953,900 warrants. Some employees, who have been allocated a number of warrants, have resigned and returned 1,031,800 warrants to the % !' ! * The Company does not need to allot the additional ordinary shares. The resolution of the ESOP Warrant Holders Meeting No. 1/2010 held on April 9, 2010, approved the amendment of the regulation regarding rights and duties of the issuer and the holders of warrant to comply with the Company practices. The ESOP Warrant ‹ # % #

%% # • ; ## $ 6 % ! % ! & + % # #

% !–

• % ! % ! + % # #

% !–* " ; % ## $ #! # have no rights to receive dividends (XD sign posting).

111

~ ? |H? U & U_ Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a legal reserve of # ~ % # $ _ !` # % registered share capital and this reserve is not available for distribution as dividends. The Company is already set aside a legal reserve in full amount according to legal requirements.

` 'U H&ŠU‹ &<HU & H@J U & U_ V U 'U H&ŠU‹ &<HU & At the resolutions of the Board of Director’s Meeting No. 6/2008 held on November 13, 2008, the Company’s directors resolved

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&~ ## * " $ !

$ % &*~ ## _% # % `œ ? #

*& +

# $ % Â % % # % !* " Company shall repurchase its ordinary shares through the main board of the Stock Exchange of Thailand during the period from December 1, 2008 to May 31, 2009. The Board of Directors has considered the share resale procedures by reselling its ordinary shares through the main board of the Stock Exchange of Thailand or by public offering depending on the prevailing situation at the time of shares are sold. The period for the resale of share is from December 1, 2009 to May 31, 2012 (after 6 months and no later than 3 years from the completion date of share repurchasement).

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As at December 31, 2010 and 2009, the Company has the reserve for treasury shares which appropriates from its retained earnings Baht 59.62 million.

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V # #! %% Â # % % ! % ~* ) ## *) % '

## %% #! * ## ' % 4 % $ 9, 2010. On April 23, 2010, the Company’s Ordinary Shareholders’ Meeting held unanimously approved a second-half period of dividend % ! : % ::* ~ ## * ~ % '

## %% #! )*}} ## ' % on May 17, 2010. X ' :'

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## %% #! =}*}: ## ' % 4 % $ 9, 2009. 112

On April 23, 2009, the Company’s Ordinary Shareholders’ Meeting held unanimously approved a second-half period of dividend % ! & % : * : ## * % '

## %% #! : *)} ## ' % on May 12, 2009. The subsidiaries paid no dividends during 2010. On March 27, 2009 Asiasoft International Co., Ltd’s Board of Directors’ Meeting held unanimously approved of dividend payment for the quarter ended March 31, 2009 for 1,000,000 shares at Baht 13.83 per share, totalling approximately Baht 13.83 million. )' :' ># !% 6 *' Y V ! 4 # V # #! %% % ! = & % ~ ' :~ % '

## %% #! )*}~ ## *

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Jk& ? &ŠU V Vk@H@ kH? k@&'UŠ @'&

" % ! % # # # ## ] 21.1 Accounting Policies # % # # †

# * 21.2 Financial risk management 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 and subsidiaries manage the risks as follows: 21.2.1 Interest rate risk " % % $ # $ # % and cash equivalents and temporary investments. The Company manages the interest rate risk by depositing and investing with # $# # !

% !V # %# * 21.2.2 Foreign currency risk Foreign currency risk occurs from license fee payment to foreign companies by mainly using US dollar currency. ‹ ' # 6 6 % ! $ # ##

$ !

# * H J # % 5 5 55Œ% ! ! " {

21.3 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 it will have no damages as a result of debt collection. *) # # # $ # # % # ' % ! $# Â * # # $ # % ! $# '

% ! $# % * " ! # # # $ #

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)

Vk@H@ kH? k@V U H'k @ K‹ & | @' " % % ! $ # $ # # ( have geographic segments in Thailand and oversea geographic areas. The segment information of the Company and subsidiaries for the years ended December 31, 2010 and 2009, are as follows:

115

# &k|@kVk H@' ’> @& & K‹ @H'ŠU

& ! " " {

( k' @' H@J @'k@| @' ?kHKk?k'k &

)* $ % The Company entered into the software license agreement and distribution agreements to provide online game services and to $ ( # # # % ! # % * X $ ' ' % !

% ! # # )*= ## ' $ =* ## ! # ! $ revenue as stated in the agreements. )* Y " % !

% # % ' ' # # \ period of 1 - 3 years which are renewable upon mutual agreements. As at December 31, 2010 and 2009, the Company is committed to pay monthly operating leases and service fees of Baht 2.9 million. )* 4 The Company entered into server service agreements including facilities for a period of 1 year and the agreements are renewable upon mutual agreements. As at December 31, 2010 and 2009, the Company is committed to pay monthly operating leases and service fees of Baht 1.3 million. )*) % $ 6 ## # #

X $ ' ' % !

% $ 6 }* ##

%# as collateral to the appeal. As at December 31, 2010 and 2009, the Company has commitments with local banks for the letters of guarantee issued by banks

## *) ## *)= ## ' % #!*

116

25. LITIGATION A subsidiary has a litigation case regarding the copyright with total claims of Baht 15.37 million. The Company’s lawyer believes

% ! ## # # * > #!' ##

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% ! % $# # # * An oversea subsidiary received notice from a previous distributor for breach of contract totalling amount SGD 1.78 million (Baht ) *=) ## `* > #!' # ! $ ! #

j $ ! '

# $ # \ $ ! # $ # ! * In September 2010, the Company received the value-added tax (VAT) assessment notice from the Revenue Department for the % ! ‡X" ! ~  * "

# % ! ‡X" # %% #! * ) ## % ! %% # 7 % *

$ ! # \ ' % !V % $ # ! $!

% ! % # V

#( $ ! $

* " ' % !

% # $ ' * In October 2010, the Company paid the under payments of VAT in amount of Baht 5.91 million to cease the surcharges. < † $ ' % !

7 % }* : ## $ 7 %

!

% ! $ !

‡X" * < ' % ! % $ 6 }* ##

%# # ## # to the appeal.

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# # % # ! $ ' as follows:

117

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V † * ^ ' # j $ ! )' ' %%

% ! % ! *&) % * ' % ! # ! % *) % share, totalling Baht 131.21 million (Note 19). Therefore, there are the remaining dividends to be paid for the 305.81 million shares at

*) % '

## =* ## * " %% # % ! ## $ % % X # Shareholders’ Meeting for the year 2011 for the consideration and approval.

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118

ASIASOFT

CORP

COMPANY C I L B U P ORATION

LIMITED

p e t S t x e N Our

As Southeast Asia’s online entertainment leader providing a reliable and vibrant online gaming community, Asiasoft is striving

$ ; # % * ‘

to continuously developing the new online services that will completely satisfy the demands of our customers in the digital age. With visionary management and dedicated professionals, we aim to become number one in the region. We, at Asiasoft, are moving forwards in our quest for leadership in Asia.

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