PRIN: Annual Report 2007

Financial Summary

Financial Highlights (Unit : MB.)

2005

2006

2007

Financial Position

Total Assets

3,196.99

4,395.97

5,848.52

Total Liabilities

1,748.09

2,589.84

3,620.93

Total Equity

1,448.91

1,806.13

2,227.58

Operator Result

Total Revenue

2,325.34

2,960.52

2,611.24

Revenue

2,312.40

2,948.73

2,585.46

Cost of Good Sold

1,612.19

2,001.62

1,989.93

Gross Profit

700.21

947.10

595.53

Net Profit

304.75

447.80

77.98

Financial Ratios

Current Ratio (Times)

2.60

3.36

2.44

Gross Profit Margin (%)

30.28

32.12

23.03

Net Profit Margin (%)

13.11

15.13

2.99

Return on Equity (%)

27.23

27.51

3.87

Return on Assets (%)

11.45

11.80

1.52

Debt on Equity (Times)

1.21

1.43

1.63

Earning per Share (Baht)

0.56

0.67

0.09

Book Valuse per Share (Baht)

2.68

2.70

2.49

Devidend per Share (Baht)

0.18

0.27

* 0.03

Note : * is the dividend paid per share as approve by the Company’s Board of Directors on 20 February 2008.

The meeting considered to pay dividends for performance for the year 2007 and proposed this ratio for approval in the 2008 Annual Shareholders’ Meeting.

Annual Report 2007

Financial Summary Total Revenues

(Million Baht)

2005

Other Income 4.02% Construction materials 3.07% Townhouse / Commercial Building 18.05%

Single Detached House-Premium 18.42%

2006

Other Income 0.40% Construction materials 2.91% Condominium 10.76%

2007

Single Detached House-Premium 4.30%

Construction materials 2.36%

Townhouse / Commercial Building 41.39%

Townhouse / Commercial Building 30.08%

Single Detached House-Middle 50.62%

Single Detached House-Middle 51.55%

Single Detached House-Middle 56.44%

Gross Profit Margin (%)

2005

Annual Report 2007

Other Income 0.99% Single Detached House-Premium 4.64%

2006

2007

Financial Summary Net Profit (Million Baht)

2005

2006

2007

Total Assets, Total Liabilities, Total Equity (Million Bath)

2005

2006 Total Assets

Total Liabilities

2007 Total Equity

Annual Report 2007

Financial Summary Debt / Equity Ratio (Time)

2005

2006

2007

Return on Assets (%)

2005

Annual Report 2007

2006

2007

Financial Summary Return on Equity (%)

2005

2006

2007

Dividend Per Share (Baht)

2005

2006

2007

Annual Report 2007

Message from the Chairman of the Board

Message from the Chairman of the Board

Based on the corporate vision, the Company is committed to sustaining its growth, to introducing good corporate governance, and to succeeding in real estate. Products under PRINSIRI brand have been gradually accepted and recognized by consumers. It is a result of the company’s commitment to develop quality products to meet customer needs and to provide happiness to their family members and guests.

However, in the previous year, the effects of domestic political fluctuations and sub-prime mortgage crisis in the United States had some serious negative impact on the real estate. The domestic finance and consumption activities decelerated as the aftershocks of the crisis. This directly affected on real estate entrepreneurs and consumers. Therefore, being affected by the situation, the Company’s revenue in 2007 was Baht 2,611.24 million, a decrease of Baht 349.28 million, compared with the end of 2006.

Although the Company had difficult time in 2007, it still concentrated on accomplishment of the target and transparency of the performance. It conducted business affairs in compliance with principles of good governance as to be recognized as one of corporate governance and to succeed in real estate.

Finally, the Company Board of Directors would like to thank all concerned people including our shareholders, customers, business alliances, employees, financial institutes, media channels, and securities analysis, for their trust and continuous support. In return, the Company shall progressively dedicate to enhancing its capabilities while ensuring transparent business conduct, as one of the top leaders in the Thai real estate development industry, to render maximum return to our interested parties.

Mr. Mongkol Pao-in Miss Sirilak Kovitchindachai Chairman of the Board Chief Executive Officer, Managing Director

11 Annual Report 2007

Board of Directors and Management Team

Board of Directors and Management Team

Board of Directors

1.

Mr. Mokol Pao-in Chairman/ Independent Director

2.

Mr. Surabhon Kwunchaithunya Independent Director/Chairman of Audit Committee

3.

Lt. Sivaraks Phinicharomna Independent Director/Member of Audit Committee

4.

Ms. Siriluck Kovitchindachai Director

5.

Mr. Chaiwat Kovitchindachai Director

6.

Mr. Kwanchai Mongkolkittaveepol Director

7.

Mrs. Moogda Arriyavat Independent Director / Member of Audit Committee

8.

Mr. Namchai Vanapanubet Director

9.

Mr. Sakol Pao-in Director/Secretary of Board of Director

Management Team

1.

Ms. Siriluck Kovitchindachai Managing Director

2.

Mr. Chaiwat Kovitchindachai Assistant Managing Director

Acting Assistant Managing Director, Construction

Acting Assistant Managing Director, Sales and Marketing

3.

Mr. Kwanchai Mongkolkittaveepol Assistant Managing Director, Customer Relations

4.

Mr. Namchai Vanapanubet Assistant Managing Director, Finance

5.

Mr. Sakol Pao-in Assistant Managing Director, Administration

6.

Miss Nipha Aphirattanarungruang Assistant Managing Director, Business Development

15 Annual Report 2007

Report from the Chairman of the Audit Committee

Report from the Chairman of the Audit Committee

To The Shareholders of Prinsiri Public Company Limited

The Board of Directors’ Meeting held on March 26, 2004, resolved to appoint three independent audit committees as follows.

1. Mr. Surabhon Kwunchaithunya Chairman of Audit Committee

2. Lt. Sivarak Phinicharomna Director of the Audit Committee

3. Mr. Amnat Ngamsuriyarote Director of the Audit Committee

Mr. Sakol Pao-in, Assistant Managing Director, administration, was appointed as the secretary of the Audit Committee.

In addition, Mrs. Moogda Arriyawat has been appointed by the Board of Directors of the Company on July 12, 2007 in replacement of Mr. Amnat Ngamsuriyarote who resigned from the audit committee on June 30, 2007 because of much personal duties.

In 2007, the Audit Committee called for the meeting five times to consider and preceded the following major activities.

1. Reviewing the financial statements prior to submission to the Management: the quarterly and year end 2007 to be presented fairly financial data and adequacy disclosure of related transactions, connected transactions, and possible conflicts of interest to ensure its accuracy according to the accounting standards. The committee discussed with the auditors and agreed that the audit operation was performed independently. The audit report of the auditors was in compliance with the generally accepted accounting principles.

2. Reviewing the efficiency of the internal control system and monitoring corrective action for the system performed by the Internal Audit Section. It was found that the Management resolved the problem. Therefore, the Committee agreed that the Company had sufficient internal controls and supervision of internal audit according to the plan against the organization’s risks and monitored inspection and development of internal control system to be more effective and have more efficiency.

3. Reviewing the report of the Company’s risk management as was adequate and suitable. The Management appointed the Risk Management Committee which affirmed that the risk management process was sufficient and continuously undergoing improvements.

4. Reviewing compliance with guidelines for listed companies on the Securities Exchange of Thailand and relevant laws and regulations.

19 Annual Report 2007

Report from the Chairman of the Audit Committee

5. Reviewing and giving notes to connected transactions or possible conflicts of interest and considered adequate correct disclosure of such information.

6. Evaluating independency of auditor, selecting and proposing the auditor and the remuneration of auditor to the Board of Directors.

7. Assessing its performance for the year 2007. The satisfied result of evaluation was reported to the Board of Directors.

The Committee could request for sufficient information and consult with any particular management, internal auditing and control team, auditors and external consultants as needed. The Committee is of the view that the Company’s financial statement was correctly formulated according to the generally accepted accounting principles with adequate disclosure of information. The connected transactions were performed correctly and are complete. All transactions complied with laws and regulations. The internal control system for efficiency assessment was sufficient. Furthermore, there was continuous good development of corporate governance.

For 2007, the Audit Committee was satisfied with the result of the independent assessment of the auditor and suggested the Company’s Board of Directors to nominate Mrs. Suwimol Krittayakiern, Certified Public Account No. 2982, or Miss Somjintana Pholhirunrat, Certified Public Accountant No. 5599, in replacement of Mrs. Vilairat Rojnuckarin, Certified Public Accountant No. 3104, who retained the service of auditing the Company for five consecutive years, of Office of DIA International Auditing to become the auditor of the Company for the year 2008 in the Annual Shareholders’ Meeting.

(Mr. Suraphon Kwunchaithunya) Chairman of the Audit Committee February 15, 2008

Lt. Sivarak Phinicharomna Mrs. Moogda Arriyavat Director of the Audit Committee Director of the Audit Committee

Annual Report 2007

20

General Information

General Information

Company Information

Company Name : Issue Name : Type of Business : Head Office :

Registration No. : Home Page : Telephone : Fax : Listed Security :

Prinsiri Public Company Limited PRIN Real Estate Developer 123 Suntowers, 12th Fl., Bldg.A, Vibhavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok 10900 0107574700320 www. prinsiri.com 0-2617-6900 0-2617-6910-1 As of 31 December 2007 Registered Capital of Baht 1,340,000,000 comprising 1,340,00,000 common shares at a par value of Baht 1 Issued and paid-up share capital of Baht 1,005,000,000 which is a total of 1,005,000,000 common shares at par value of Baht 1

Information of Subsidiary Companies

Company Name : Type of Business : Head Office :

Registration No. : Telephone : Fax : Listed Security :

23 Annual Report 2007

Prinventure Company Limited Real Estate Developer 123 Sunflowers, 12th Fl., Bldg.A, Vibhavadi-Rangsit Road, Chomphon, Chatuchak, Bangkok 10900 0105548055398 0-2255-9401 0-2201-3370-1 As of 31 December 2007 Registered Capital of Baht 100,000,000 comprising 10,000,000 common shares at a par value of Baht 10 Issued and paid-up share capital of Baht 76,250,000, which is a total of 7,625,000 common shares at par value of Baht 10

General Information

Company Name : Type of Business : Head Office : Registration No. : Telephone : Fax : Listed Security :

Company Name : Type of Business :

Head Office :

Registration No. : Telephone : Fax : Listed Security :

Growed Yotha Company Limited Construction Contractor and Construction Materials Representative 609/ Nawamin 80,Klongkhum,Bungkhum,Bangkok 10230 0105545057390 0-2933-9822-5 0-2933-6768 As of 31 December 2007 Registered Capital of Baht 10,000,000 comprising 100,000 common shares at par value of Baht 100 Issued and paid-up share capital of 10,000,000, which is a total of 100,000 common shares at par value of Baht 100 CNSPR (Thailand) Company Limited Property Leasing / Buying and Selling Under Developing Property 123 Suntowers, 12th Fl., Bldg.A, Vibhavadi-Rangsit rd., Chomphon, Chutuchak, Bangkok 10900 0105550062410 02-617-6900 02-617-6910-11 As of 31 December 2007 Registered Capital of Baht 2,000,000 Comprising 20,000 common shares at a par value of Baht 100 Issued and paid-up share capital of Baht 2,000,000, which is a total of 20,000 common shares at a par value of Baht 100

Reference Information

Share Registrar : Head Office : Telephone : Fax : Auditor : Head Office :

Telephone : Fax :

The Thailand Securities Depository Co.,Ltd. 62 Ratchadapisek Road, Klongtoey, Bangkok 10110 0-2229-2800 0-2359-1262-3 Office of DIA International Auditing 316/32 Soi Sukhumvit 22, Khlong Toei, Khlong Toei Bangkok 10110 0-2259-5300 0-2260-1553

Annual Report 2007

24

Nature of Business

Nature of Business

Background

Prinsiri Public Company Limited was incorporated as the limited company on February 23rd, 2000 with the initial registered and total paid-in capital of five million Baht. The Company engages in real estate development business, for-sale housing estate, with expertise in detached houses, townhouses and condominium. In 2001 and 2004 the Company’s housing design won Awards of Merit from Pacific Coast Builders Conference (PCBC) held in USA. The Company also received highly commended for “the Best Energy-saving Home Awards in 2007” held by the Department of Alternative Energy Development and Efficiency formerly, Ministry of Energy. At present, the Company has paid up registered capital of Baht 1,005 million.

Significant Development

2006

2007

27 Annual Report 2007

• The Company developed and sold the first condominium project named the Pulse Condominium, located in Soi Ladprao 44.

• The Company and Uni Venture Public Company Limited increased investment in Prinventure Company Limited twice in order to expand business of Prinventure, which has paid up registered capital of Baht 76.25 million. The Company holds 51 percent of total shares.

• The Company provided a loan to Prinventure Company Limited, a subsidiary, according to proportion of holding shares, to operate the business. As of December 31st, 2006 the Company lent the total loan of Baht 248.28 million.

• The Company developed and sold condominiums under two new brands, namely, “the Complete” and “Smart Condo”.

• The Company developed and sold semi detached house and townhouse with 2-story under the two new brands, namely, “Prinyada Light” and “Prinyaluck Light” respectively.

• The Company offered additional 335 million ordinary shares to shareholders at ratio of two existing shares per one new share.

New shares had par value of Baht 1 and was sold at Baht 1.50.

The Company then has registered capital of Baht 1,340 million and paid up capital of Baht 1,005 million.

• The Company established CNSPR (Thailand) Company Limited to operate selling property business. The Company has proportion of share holding at 99.97 percent. The new company has paid up registered capital of Baht 2 million.

• The Company provided a loan to Prinventure Company Limited, a subsidiary, according to proportion of holding shares, to operate the business. As of December 31st, 2007 the Company lent the total loan of Baht 255.00 million.

Nature of Business

2007

• The Company provided a loan to CNSPR (Thailand) Company Limited, a subsidiary, to operate the business. As of December 31st, 2007 the Company lent the total loan of Baht 56.00 million.

• The Company received highly recommended for “the Best Energysaving Home Awards in 2007”, held by the Department of Alternative Energy Development and Efficiency formerly, Ministry of Energy.

Overview of Business of the Company and its Subsidiaries

Prinsiri Public Company Limited, the Company, and Prinventure, a subsidiary, engage in real estate development business offering for-sale housing estate with land and condominium. In the role of project developer and owner, the Company has emphasized on real estate development under the concept “Charms of the Home in Harmony with Nature”.

In 2007, the Company had proportion of selling real estate products at 96.65 percent of the total revenue. However, in 2007 the Company did not have revenue from selling condominium because the projects were under development.

At present, the Company is a real estate developer who receives good recognition and trust from many customers under the brand name of “Prinsiri”. It is well known for good location, good project, good quality, reasonable price and good after-sale services. In order to meet consumers’ needs with optimum purposes, the Company has continuously developed and improved its products such as project design, project plan, housing design, area utilities, location, selection of suitable construction and finishing materials for environment of each project. In addition the Company’s housing design won Awards of Merit in 2001 and 2004 from Pacific Coast Builders Conference (PCBC) held in USA and received highly commended for “the Best Energy-saving Home Awards in 2007” held by the Department of Alternative Energy Development and Efficiency formerly, Ministry of Energy.

Although the Company and Prinventure Limited, the subsidiary, develop same type of products, they separately operate their business. For the land to be developed as a for-sale project of the Company, it is provided and bought by the Company on its own decision. On the other hand, the developing land of Prinventure Limited is from Uni Venture Public Company Limited, the venture, who holds 49 percent of registered capital of Prinventure Limited. The venture shall supply and propose plots of land for making mutual decision to buy. The company will then become project developer, contractor and seller for Prinventure Limited and be paid for such operation. Furthermore, projects of the Company and Prinventure Limited use different project name for each product.

Growed Yotha Group Company Limited, a subsidiary, is a construction contractor and construction material distributor such as cement, paint colors, steel and wood. Its main customers are the Company and the Company’s contractors. In 2007 the proportion of revenues between construction and material distribution was about 81.11 percent and 18.57 percent respectively.

CNSPR (Thailand) Company Limited, a subsidiary, engages in selling and leasing real estate properties, which most of products are land. The company was established on June 15th, 2007. In 2007, it did not have any revenue from business operation.

Annual Report 2007

28

Nature of Business

Structure of Shareholding of Prinsiri Public Company Limited As of 31 December 2007

Prinsiri Public Company Limited Paid-in registered capital of 1,005.00 MB. “Real Estate Developer”

51.00 %

99.99 %

Prinvinture Company Limited Paid-in registered capital of 100.00 MB. “Real Estate Developer”

99.97 %

Growed Yotha Group Company Limited Paid-in registered capital of 10.00 MB. “Contractor and Material Distributor”

CNSPR (Thailand) Company Limited Paid-in registered capital of 2.00 MB. “Real Estate Selling and Leasing”

Revenue Structure of the Company

Revenue structure of the Company and subsidiaries 2005 Consolidated financial statement MB %

2006 Consolidated financial statement MB %

2007 Consolidated financial statement MB %

Revenue

Operator

Detached house – upper market

Prinsiri

428.38

18.42

127.36

4.30

121.22

4.64

Detached house – middle market/Semi detached house

Prinsiri / Prinventure

1,312.46

56.44

1,526.09

51.55

1,321.88

50.62

Townhouse/Home Office

Prinsiri / Prinventure

419.80

18.05

890.65

30.08

1,080.74

41.39

-

-

318.56

10.76

-

-

80.38

3.46

-

-

-

-

Prinsiri / Prinventure

2,241.02

96.37

2,862.66

96.69

2,523.84

96.65

Revenue from goods sales

Growed Yotha Group

71.39

3.07

86.07

2.91

61.62

2.36

Other revenues

Company / Subsidiaries

12.94

0.56

11.79

0.40

25.78

0.99

2,325.35

100.00

2,960.52

100.00

2,611.24

100.00

Condominium Land Total revenue from property sales

Total revenue

Prinsiri Prinsiri / CNSPR

Note: Detached house for upper market has price range at Baht 7 million and up.

Detached house for middle market has price range at Baht 1.7-3.0 million.

Major revenue of the Company is from selling property. In 2005, 2006, and 2007, the Company had proportion of revenue from selling property to the total revenue as 96.37 percent, 96.69 percent and 96.65 percent respectively. Most of revenue was from selling single detached house and semi detached house, representing 74.86 percent, 55.85 percent, and 55.26 percent of the total revenue respectively.

The revenue from selling townhouse and home office was 18.05 percent, 30.08 percent, and 41.39 percent of the total revenue respectively.

29 Annual Report 2007

Nature of Business

The Company received the first revenue from selling property of condominium in 2006. The first condominium project named the Pulse Condominium Ladprao 44, valued Baht 318.56 million.

The revenue from this project was 10.76 percent of the total revenue in 2006. In 2007, the Company did not have revenue from selling condominium because the new opened condominium projects have been under construction. Those four projects are the Complete Naratiwasrajchanakarin, the Complete Rajchaprarop, the Pulse Phaholyothin 37, and Smart Condo Rama II.

The Company has revenue from selling construction materials since 2005. The materials are cement, color paint, steel, wood and etc. In 2005, 2006, and 2007 the proportion of revenue from selling materials was 3.07 percent, 2.91 percent and 2.36 percent of the total revenue respectively.

Most of other revenues are from waived deposit, which incurred when the customers did not make buying contract at due time, left down payment, which some customers paid down installments and then stopped without notice or contacting, and penalty of late construction paid by the Company’s contractors.

Company’s Business Objectives

Focusing on being one of leading Thai real estate developers and receiving good recognition and trust from the customers under the brand name of “Prinsiri”, the Company concentrates on good location, good project, good quality, reasonable price and good after-sale services. Materials used in each project are selected and qualified. The Company set a future plan to expand for-sale housing estate with land and condominium projects to meet and cover all prospects. The Company has a target to buy plots of land for project development of 8-12 projects a year. In 2007, the Company bought plots of land for 10 projects.

Regarding marketing, the Company’s objective is to establish and promote brand awareness of the corporate brand “Prinsiri” and product brands, namely, “Siritawara”, “Prinyada”, “Prinyaluck”, “Prinyada Light”, Prinyaluck Light”, “the Pulse”, “the Complete”, and “Smart Condo”. The message presented to the prospects is that a Prinsiri house is true and real home, center of a family and warmness under the concept of “Charms of the Home in Harmony with Nature”. To promote and encourage the prospects to be interested in purchasing Prinsiri products, the company advertises its brand images via many media such as television, radio, magazines, cut out and leaflet.

Product Characteristic

Prinsiri Public Company Limited engages in real estate development business offering for-sale housing estate with land and condominium as project developer and owner. The majority of the Company’s projects is located in central Bangkok and Bangkok Metropolitan Region where is near communities with infrastructure and convenience including electricity, water supply, communication system and transportation. All projects developed with the “Prinsiri” brand are under the concept “Charms of the Home in Harmony with Nature”.

Annual Report 2007

30

Nature of Business

Logo of the Company’s Brand

The Company concentrates on product quality with delicate details. Each component is made from selected and qualified materials in order to make the best house. In addition, quality inspection is performed for each step. Also, the Company has progressive improvement on product development to meet customers’ needs.

At present, buying a product of the Company, customers shall pay booking deposit, down payment and deposit on signing contract at amount of 10-30 percent of the selling price. Duration of down payment is 3-8 installments, depending on construction period and agreement between a customer and the Company. Date of Delivery and ownership transfer of a house shall be specified on the signing contract day and written down on the agreement to sell. However, the date will depend on each customer readiness.

Details of product in each type are following:

1. For-sale housing estate with land

The Company’s projects of for-sale housing estate with land are horizontal development. Products in this type are house or building with height not more than 4 stories. Housing or building design and project design of individual project is different by location and customers’ needs. However, each project under the Company’s operation will have complete central infrastructure, facilities and safety such as a clubhouse, a swimming pool, a park and security system.

The Company’s for-sale housing estate with land projects can also classified by specific qualifications and target group under particular names as follow:

(1) Single Detached House

(1.1) Single Detached House for upper market

31 Annual Report 2007

Logo of the Project : Project Name : Price Range : Target Market :

Siritawara Baht 7.0 million and up High-income customers

Nature of Business

Sample of Single Detached House for upper market

(1.2) Single Detached House for middle market

Logo of the Project :

Project Name : Prinyada

Price Range : Baht 3.0-7.0 million

Target Market : Relatively high income customers

Sample of Single Detached House for middle market

Annual Report 2007

32

Nature of Business

(2) Semi Detached Home

Logo of the Project :

Project Name : Prinyada Light

Price Range : Baht 2.0-4.0 million

Target Market : Medium income customers

Sample of Semi Detached House

(3) Town House & Home Office

(3.1) 3-Story townhouse

Logo of the Project :

Project Name : Prinyaluck

Price Range : Baht 1.5-3.0 million

Target Market : Medium income customers

Sample of 3-Story Townhouse

33 Annual Report 2007

Nature of Business

(3.2)

2-Story townhouse Logo of the Project : Project Name : Price Range : Target Market :

Prinyaluck Light Baht 2.0-4.0 million Medium income customers

Sample of 2-Story Townhouse

(3.3) Home Office

Logo of the Project :

Project Name : Prinyaluck, Prinyaluck Light

Price Range : Baht 2.0- 4.0 million

Target Market : Medium income customers

Annual Report 2007

34

Nature of Business Sample of Home Office

2. Condominium

The Company’s projects of for-sale condominium are vertical development. Products in this type are condominiums with height at least 8 stories. Building design and project design of individual project is different by location and customers’ needs. However, each project under the Company’s operation will have complete central infrastructure, facilities and safety such as a swimming pool with beautiful garden, elevators, digital satellite television and security system.

The condominium development of the Company can also classified by specific qualifications of each project under particular names as follow:

(1) Low rise condominium, not higher than 8 stories

35 Annual Report 2007

Logo of the Project :

Project Name : The Pulse Price Range : Baht 1.29-3.60 million Target Market : Medium to relatively high income customers

Nature of Business Sample of the Pulse Condominium

Logo of the Project :

Project Name : Price Range : กลุ่มลูกค้า :

Smart Condo Baht 0.69-1.00 million Medium income customers

Sample of Smart Condo Condominium

Annual Report 2007

36

Nature of Business

(2) High rise condominium, higher than 8 stories

Logo of the Project :

Project Name : The Complete

Price Range : Baht 1.79-12.00 million

Target Market : Medium to relatively high income customers

Sample of the Complete Condominium

37 Annual Report 2007

Nature of Business Marketing

The company implements business strategies to differentiation-base focus and concentrate on developing trust of customers towards the Company and its products. Therefore, the Company’s marketing applies competitive strategies divided as follows:

(1) Product strategy

The Company set top priority for product strategies to promote differentiation-base focus under the slogan “Charms of the Home in Harmony with Nature” in order to meet different needs of customers such as project location, housing design and living area. Theme names are used to indicate particular products. The products are designed to meet customers’ requirement for accommodation and maximum satisfaction. From selecting of location, housing design, project and landscape design, quality material selection and construction, each step is under quality control. In addition, all products have been improved progressively. Therefore, the Company’s products are recognized and trusted for beautiful housing design, fit living area, project plan with green environment, dedication in construction and premium grade construction with standard materials.

(2) Pricing strategy

Regarding the selling price, the Company has a policy to maintain competitive price of products in the market, especially among those in the same or nearby location. In addition, product quality and project cost are taken into account such as land price, design cost, construction cost, marketing expenses and etc.

(3) Promotional strategy

Promotional strategy is one of important strategies used to compete in the market in order to promote brand awareness, to motivate need of products, to remind the products, to develop trust and good image for the Company. Promotional tools including advertisement, salesperson, promotion, direct marketing and indirect marketing are employed.

In the year 2007, the Company advertised through channels to reach target group as much as possible. Details of advertisement are following.

Above the line strategy - Broadcast radio advertisement with concept “Prinsiri Angel” to promote image of the Company and to communicate warmness of families living in each and every project.

- Broadcast television advertisement for “Smart Condo Rama II” to convey different views of the condominium developed by the Company.

- Advertise on magazines and newspapers.

- Send SMS with information and details of new projects including available promotion to prospects’ mobiles.

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38

Nature of Business

Below the line strategy - Put cut out on main streets around the Company’s projects to attract prospects to visit the projects.

- Advertise on the Company’s website: www.prinsiri.com.

- Arrange road show with mascot Teddy Bear Family specially designed for Prinsiri to introduce projects and provide information to customers.

- Arrange activities for the customers living in the Company’s projects and invite prospects to participate in order to promote customer relations and the Company’s image.

- Participate in booth sales in many places such as House and Condo Expo, department stores, and office buildings, in order to promote projects to the prospects.

In addition, in 2007, the Company developed new brands and promotes them for brand awareness. The new four brands include “the Complete” and “Smart Condo” for condominium products, “Prinyada Light” for semi detached house projects and “Prinyaluck Light” for 2-story townhouse projects.

(4) Product cost

The Company manages product cost by focusing on cost control in order to maintain appropriate budget, gross profit margin and competitive price. The control process begins from selecting land and buying at reasonable price. Research and improvement of construction materials and furniture are performed for best selection of good quality that is compliance with required standards within the preset cost. Construction techniques and technology are used for cost control and enhancement of efficiency and product standard.

(5) After-sale services

As to promote customers’ trust in the products of the Company and to be part of buying motivator, the Company provides after-sale services for customers as following.

- 1 Year guarantee for default of construction, materials and finishing since the date of ownership transfer

- Free one-year theft insurance

Products and services

Each project of the Company is developed and owned by the Company. All processes including land buying, housing and project design, applying for registration of land allocation, applying for construction permission, construction, quality control and inspection, and sales are operated by the Company.

Construction period of each project is different, depending on its properties such as product type, size and design. However, the average construction duration of each housing type is following:

39 Annual Report 2007

Nature of Business

- A single detached house – six to seven months

- One row of town house/home office – seven to eight months

- A condominium – eleven to twenty months

Production policy

Regarding production, the Company has its policy to increase or decrease the production capacity in compliance with housing needs of customers for each project. Since the Company employs contractors, if the customers of each project need more living units, the Company can increase production capacity by employing more contractors in order to meet the customers’ needs. Concentrating on the quality control of construction to be at the same standard, the Company has quality control policy to inspect the quality as follows.

(1) Set construction and material standard for contractors.

(2) Arrange meeting with contractors regarding construction plan before construction phase.

(3) Appoint project engineers and a project manager for each project to monitor construction plan and incoming inspection of contractors.

(4) Set up quality control team to inspect all construction to be compliance with specified standards.

Land buying

Land is a significant factor in project development and construction because it becomes 40-50 percent of total cost.

Therefore, the Company’s policy of buying land concentrates on potential land that can be developed instantly. Many consideration factors are also taken into account such as potential of location, land price, city plan, law enforcement, growth trend of living location, city development and expansion, and competitors. Channels for buying land are land agents, land owners and the Company’s employees.

For the maximum efficiency, before buying land, the Company conducts feasibility study and reports it to the management as a reference data for purchase approval.

Selecting and employing contractors

The Company employs contractors to construct housing units under the supervision of the Company’s project engineers and a project manager who are responsible to monitor and control the quality of construction to be in compliance with the construction plan and specified standards.

In recruiting a new contractor, the Company considers the contractor’s experience, portfolio, previous work quality, and financial position. The Company collects information of contractors used to work for the Company in the database. Such information includes work details, work performance and related data for future consideration of a new project’s contractor. At present the Company connects with 200 contractors. Then, the Company is confident that there are adequate contractors for more construction and future plan.

Annual Report 2007

40

Nature of Business Proportion of Construction Value of Major Contractors per Total Construction and Material Value

Item

2005

2006

2007

Proportion of construction value of major contractors (percent)

-

-

14.29

Number of major contractors

-

-

1

Note: Major contractor refers to a contractor whose proportion of construction value is more than 10 percent of total construction and material value.

In 2005 and 2006, none of contractors had proportion of construction value higher than 10 percent of the total construction and material value.

In 2007, there was one contractor having proportion of construction value higher than 10 percent of the total construction and material value. It was the contractor for the Complete Rajchaprarop, which has been opened and constructed in 2007. Since the value of this condominium project is high, then the proportion of construction value is higher than 10 percent of the total construction and material value.

Buying construction materials and furnishings

The Company set top priority of material quality. Therefore, befittingness, good quality and standard are major factors of purchasing of construction and finishing materials. Price will then later consider as reference contributor. Major construction materials include cement, steel, roof truss, roof-tile, ceramic tile, gypsum board, brick, floor panel and bored pile.

Purchasing of construction materials and furnishings can be divided into two major practices as following.

(1) Construction materials and finishing supplied by contractors

Since the Company employs the contractors for construction, some materials of each contract work will be provided and purchased by such contractors. Materials and their properties must be in good quality and standard as described in the contract.

(2) Construction materials and furnishings supplied by the Company

Most of construction materials and finishing provided by the Company are those being used in large quantity or required to be order with particular distributor that needs time for delivery. Such operation enables the Company to control cost in the budget and decrease contractors’ obligation to supply and purchase themselves. At present, the Company purchase construction materials and furnishings from 150 internal distributors.

Before ordering each material and furnishing, the Company estimates total quantity needed for that project and then purchase at the estimated amount. However, such product will be delivered and charged time by time at actual needed quantity.

In 2005-2007, none of purchase proportion of construction materials and furnishings of any main distributor was higher than 10 percent of total construction and material value.

41 Annual Report 2007

Risk Factors

Risk Factors

Prinsiri Public Company Limited values risk management in business operation. The Company established a risk management policy in each department. All directors, management teams and employees have to follow the policy. The Risk Management Committee is also appointed to monitor overall Company risks. An Internal Audit unit will inspect and assess internal controls on a quarterly. The result will be directly reported to the Audit Committee. This is undertaken to insure that the Company can achieve its goals efficiently.

Risk factors reported in the 2007 annual report are those evaluated from current situation. There may be unknown risks at present or factors that the Company considers as unrelated risks. Information involving economic conditions or government policies is obtained from government agencies and reliable sources. The Company did not inspect such data. Public investors should consider it carefully.

Risk factors of the Company are as follows.

Risk from Fluctuation of Construction Cost

Construction materials are major raw materials for project development. Such products are subjected to change according to increase of fuel. Not only cost of construction materials related to petroleum increases but others also do through transportation charges. Meanwhile selling price cannot be adjusted to reflect the actual construction cost. If the Company increases the product price, it may affect on sale volume of housing units. Therefore, volatility of construction materials’ price may impact on construction cost and result in profitability of the Company.

However, regarding materials provided by contractors, the lump sum contract includes cost of construction and such materials. For those materials supplied by the Company, since the Company has many projects in construction, then it maintains quite high advantage in negotiation with suppliers.

Hence, the Company can control cost of materials by planning construction and estimating quantity of each material for the whole project and order procurement according to the estimation through its subsidiaries.

Risk from Building Pre-built

The Company and subsidiaries have a policy to develop for-sale housing with land by building pre-built before offering to customers. The policy includes the development of condominium project which will be transferred ownership when the construction of the whole project is completed. As a result, customers do not require paying down payment which normally the Company can use that received payment as cash flow during construction. In addition, if there is a factor influencing buying decision of prospects, the pre-built then may not be sold or slowly sold out. Then the Company will have high inventory cost. That will also affect on liquidity and profitability of the Company.

However, the Company has policy to minimize impact from those related factors and to ensure that the products meet customers’ needs as much as possible. Then the Company conducts researches and

45 Annual Report 2007

Risk Factors

studies on consumer behavior before develops a project. Also, the construction plan is designed to correspond to the quantity of sale. The project is developed phase by phase. Each active project consists of pre-built and semi pre-built houses. In addition, sale promotion is used continuously. Then the Company ensures that such effect will decrease at some level.

Risk from land procurement for future project development

The Company has no policy to accumulate a large amount of land bank for it does not want to have financial cost burden. The Company would only purchase a piece of land after a careful study of the potential for project development. Therefore, the rapid growth of the real estate development industry may result in a risk due to the increasing in land price. The Company might not be able to buy a land in wanted location. That would result in higher total cost or unavailability of land for development.

However, the Company planned for land procurement in advance according to individual year of development projects. Then there was adequate time to search for new potential land for the future project development at reasonable price. Moreover, the Company has continuously had land brokers to search for land in appropriated location with reasonable price.

Risk from major shareholders of the Company that is more than 75 percent

As at 31 December 2007, the major shareholder of the Company, is the Kovitchindachai family, whose share holding is 754,551,871 or 75.08 percent of total registered capital. Holding more than 75 percent of total shares, the major shareholders control the majority vote of the shareholders’ meeting.

Therefore, public investors may confront the risk from the inability to monitor and to balance the major shareholder group on agendas that require the majority vote from the shareholders’ meeting. In addition, although other shareholders may see an opportunity to increase commercial value, the Company is unable to be taken over without agreement from these major shareholders.

However, the Company appointed five people from the third party to be independent directors.

An Audit Committee was also appointed to balance management control.

Annual Report 2007

46

Real Estate Market Conditions

Real Estate Market Conditions

Industrial Events

Throughout the year 2007, the fluctuations of politics, economic recession, petrol price and increase of interest rate affected real estate market. Overall property market was slow growth. However, there were new projects opening in 2007, totally of 83,828 units, worth 208,313 million Baht. Housing was major part of new project development of 81,364 units. The total value was Bath 186,250 million or 94 percent of the total new projects in the market. It valued 89 percent of the total amount in 2007.

Most of new real estate projects were housing because it was more demanded by the market than other kind of property products. In addition housing was the most important part of Thailand real estate.

Chart of housing registration increased in Bangkok Metropolitan Area and its peripheral provinces

(Unit)

(%)

housing registration Source: Bank of Thailand

49 Annual Report 2007

Real Estate Market Conditions

The number of housing registration in Bangkok Metropolitan Area and its peripheral provinces had increased throughout 2002-2006 from 34,035, 50,594, 62,796, 67,829, and 78,116 units respectively. The Compound Annual Growth Rate (CAGR) was 23.08 percent a year.

Although in 2007 property market, especially housing sector, was impacted by many factors including increase of petrol price, increase cost of construction materials related to petroleum and other materials affected from higher transportation cost, strong fluctuations of politics and unrest in the South as well as periodic increase of interest rate that directly affect housing buyers. In overall, the real estate market in 2007 did not expand but slightly decreased. Comparing 2006 and 2007, the number of housing registration in Bangkok and its peripheral provinces decreased only 1.40 percent. From 78,116 units in 2006, it was 77,019 units in 2007. The number of units decreased only 1,097.

Comparison of new housing development projects in Bangkok Metropolitan Area and its peripheral provinces

2006 2007

Total housing is 66,118 units Total housing is 81,364 units

Allocated Land 0%

Allocated Land 1% Single Detached House 20%

Condominium 45%

Single Detached House 14% Semi Detached House 7%

Semi Detached House 5%

Condominium 55%

Townhouse 27%

Commercial Building 2%

Source: Agency for Real Estate Affairs Company Limited (AREA)

Townhouse 22%

Commercial Building 2%

Annual Report 2007

50

Real Estate Market Conditions

According to survey report of Agency for Real Estate Affairs Company Limited (AREA), it was found that in 2006 the number of new housing units in Bangkok and its peripheral provinces was 66,118. A majority of those housing was condominium (45 percent), followed by townhouse (27 percent), single detached house (20 percent) semi detached house (5 percent) and commercial building and land (3 percent) respectively. The total worth was Baht 186,886 million. The average selling price per unit was Baht 2.827 million.

In 2007, the number of new housing units in Bangkok and its peripheral provinces was 81,364. The big portion was condominium (55 percent), followed by townhouse (22 percent), single detached house (14 percent), semi detached house (7 percent), and commercial building (2 percent) respectively. The total worth was Baht 186,250 million. The average selling price per unit was Baht 2.289 million.

New projects opening in BMA and its peripheral provinces in 2007, classified by price range (Unit: Unit) Price Range (Bath)

Single Detached House

Semi Detached House

Less Than 500,001

-

-

-

-

-

-

-

500,001 - 1,000,000

25

476

6,388

90

9,918

-

16,897

1,000,001 - 2,000,000

2,538

1,730

7,680

657

17,930

6

30,541

2,000,001 - 3,000,000

2,490

2,838

2,593

267

8,014

-

16,202

3,000,001 - 5,000,000

5,158

569

1,153

573

6,166

-

13,619

5,000,001 - 10,000,000

1,146

21

62

67

2,118

34

3,448

10,000,001 - 20,000,000

27

-

26

-

464

-

517

ÁÒ¡Çè20,000,000

-

-

-

-

140

-

140

Total

11,384

5,634

17,902

1,654

44,750

40

81,364

Allocated Townhouse commercial building condominium Land

Source: Agency for Real Estate Affairs Company Limited (AREA)

Total

According to housing price of new projects in Bangkok Metropolitan Area and its peripheral provinces in 2007, the selling price of single detached house, which was the majority, was Baht 3-5 million, representing 41.04 percent of new single detach house projects. The second runner was single detached house with worth of Baht 1-2 million, representing 22.29 of new single detached house projects.

51 Annual Report 2007

Real Estate Market Conditions

For the semi detached house, the majority of new opening projects valued Baht 2-3 million, representing 50.37 percent of the total new semi detached houses. The second runner was semi detached house costed Baht 1-2 million, representing 30.71 percent of total new semi detached house projects.

Among townhouses, the top opening project was those with price of Baht 1-2 million, representing 42.90 percent of the total new townhouses. It was followed by selling price of Baht 0.5-1 million, representing 35.68 percent of the whole new townhouse projects.

The top proportion of commercial building was projects with offered price of Baht 1-2 million, representing 39.72 percent of the total new commercial building projects. The second part was those with Baht 3-5 million, representing 34.64 percent of total new commercial building projects.

The majority of condominiums were new projects costed of Baht 1-2 million, representing 40.97 percent of the total new opening condominium projects. The second run was those of Baht 0.5-1 million, representing 22.16 percent of the total new opening condominiums.

Finally, allocating land was mostly offered for sales at the price of Baht 5-10 million, representing 85 percent of total allocating land projects. It followed by that of Baht 1-2 million, representing 15.00 percent of total allocating land projects.

Number of new opening housing projects sold in 2007 Bangkok Metropolitan Area and its peripheral provinces

Total number of housing units was 66,039.

Allocated Land 1% Single Detached House18%

Semi Detached House 3%

Condominium 60%

Townhouse 16%

Commercial Building 2% Source: Agency for Real Estate Affairs Company Limited (AREA)

Annual Report 2007

52

Real Estate Market Conditions

Regarding the demand of housing, the survey report of AREA found that in 2007 the number of housing sold in new opening projects in Bangkok and its peripheral provinces was 66,039 units, representing 81.16 percent of total housing in the area in the same year. The majority of sold property was condominium, representing 60 percent of the total. The second proportion was single detached house (18 percent), followed by townhouse (16 percent), semi detached house (3 percent), commercial building (2 percent) and allocating land (1 percent) respectively.

Competition

At present there is more competition in property market. One of evidence is more new opening projects in Bangkok Metropolitan Area and its peripheral provinces. Size and selling price of property products are changed to be suitable with the current economics.

According to survey report of AREA, it showed that in 2007 the number of new opening projects was totally 356 with selling units of 81,364. Units sold increased from the year 2006 at 23.06 percent approximately. The total value of opening projects was Baht 186,255 million, which decreased from the year 2006 at 0.34 percent approximately. Such higher number of unit and lower value of total projects indicated that trend of housing price decreased. Real estate developers constructed cheaper housing to meet customers’ affording capability. Average selling price per unit in 2007 was Baht 2.289 million, which was lower than that of the year 2006 at Baht 2.827 million.

List of the top ten companies opening new projects in 2007, by number of housing units

Company Name

Rank 1 2 3 4 5 6 7 8 9 10

Preuksa Real Estate Pcl. L.P.N. Development Pcl. Supalai Pcl. Prinsiri Pcl. Ananda Development Co., Ltd. Asian Property Development Pcl. Plus Property Partners Co., Ltd. Areeya Property Pcl. Property Perfect Pcl. Land and Houses Pcl.

Source: Agency for Real Estate Affairs Company Limited (AREA)

53 Annual Report 2007

No. of Project (Project) 26 5 13 8 8 11 10 4 6 6

No. of housing (Unit) 10,208 8,564 5,460 3,159 3,109 2,840 2,375 2,014 1,485 1,317

Real Estate Market Conditions

List of the top ten companies opening new projects in 2007, by project value

Rank

Company Name

1 2 3

Preuksa Real Estate Pcl. Supalai Pcl. L.P.N. Development Pcl.

4 5 6 7 8 9 10

Asian Property Development Pcl. Prinsiri Pcl. Raimon Land Pcl. Land and Houses Pcl. Property Perfect Pcl. Sansiri Pcl. Areeya Property Pcl.

No. of Project (Project) 26 13 5

No. of housing (Unit) 14,173 12,349 8,202

11 8 1 6 6 6 4

7,272 6,333 5,952 5,400 4,723 4,387 3,898

Source: Agency for Real Estate Affairs Company Limited (AREA)

Industry trend and future competition

Since national circumstances including politics, economics and society become less intense and the current government receives trust from other countries, it is expected that economics in 2008 will be better than the previous year. The real estate industry should benefit from this improvement and has good trend. However, many problems regarding politics, economics and society still exist. Therefore, if there are fluctuations of those factors, economic recess will occur and directly affect on growth of the industry and real estate market as well.

The industry trend and competition of real estate in 2008 can be summarized as followings.

(1) Investment of mega projects There is investment in many mega projects, namely, many routes of sky train. This is a positive factor in overall. It also promote expansion of city communities and housing area.

(2) Accumulated supply The number of accumulated housing supply has increased since the beginning of 2005. Real estate developers have to be cautious considering this fact. Location and price range of single detached houses and townhouses are of concern to all developers.

(3) Good trend of condominium demand Increase of petrol price encourages buyers to be interested in living in condominiums, especially those located in the city.

(4) High competition among developers Competition among real estate developers is higher. Increase of construction cost provides big companies some advantages because they can control the cost better than smaller developers do. Small and medium real estate developers may face more difficulties in market competition.

Annual Report 2007

54

Future Plan

Future Plan

As at 31 December 2007, the Company and subsidiaries had a total of 23 active projects on hand, totally valued Baht 15,031.27 million. The worth of total sold unites was Baht 10,386.24 million.

There were 13 projects in construction and expected to be open for sale in 2008, totally valued Baht 10,907.90 million.

Details of those projects are followings.

Prinsiri Projects Types of Project/ Area (Rai)

Location

Units

Total Value (THB in Million)

Expected Opening Date

Samakkee Rd.

119

580.45

Quarter 1

Samakkee Rd.

207

555.04

Quarter 1

207

1,124.26

Quarter 2

189

552.80

Quarter 2

193

532.18

Quarter 3

Prinyaluck Light (Phase B) 2 story Townhouse Soi Watcharaphon Watcharaphon 7-2-39.90

73

211.73

Quarter 3

Prinyaluck Light (Phase C) 2 story Townhouse Soi Watcharaphon Watcharaphon 11-2-21.50

116

308.80

Quarter 3

Prinyaluck Light (Phase D) 2 story Townhouse Soi Watcharaphon Watcharaphon 11-0-55.90

119

302.32

Quarter 3

Prinyaluck Light (Phase E) 2 story Townhouse Soi Watcharaphon Watcharaphon 18-3-37.80

206

531.38

Quarter 3

Prinyada Light Ratchapruek-Rattanathibet

Ratchapruek Rd.

300

776.41

Quarter 4

Prinyaluck Light 2 story Townhouse Ratchapruek Rd. Ratchapruek-Rattanathibet 45-0-0

500

932.53

Quarter 4

Baromratchonnee Rd. 2,259

4,400.00

Quarter 4

10,807.90

Projects Prinyada Samakkee Prinyaluck Light Samakkee

Single detached house 24-2-20 2 story Townhouse 17-2-52

Prinyada Light DH/SDH Kanchanapisek Rd. Outer-Ring-Bangbon 41-1-40.24ŕšˆ (Bangbon) Condominium Pattaya 2nd Rd. Condominium Pattaya 2nd Rd. (Chonburi) 2-1-2 Prinyaluck Light (Phase A) 2 story Townhouse Soi Watcharaphon Watcharaphon 18-2-9.10

Condominium Pinklaow

DH/SDH 45-0-0

Condominium 12-3-88.70 Total

57 Annual Report 2007

4,488

Future Plan

Prinventure Projects

Projects

Types of Project/ Area (Rai)

Location

Units

Total Value (THB in Million)

Expected Opening Date

Northern Prime Rangsit

2 story DH 10-0-18.60

Vibhavadi Rd.

20

100.00

Quarter 2

20

100.00

Total

Remark: The project belongs to Prinventure Company Limited, which the Company holds 51 percent of paid-up capital.

In addition, the Company and subsidiaries have plots of land under consideration for project development.

As at 31 December 2007, the Company has a plot of land stick to the road beach front in Pranburi District, Prachuap Khiri Khan. According to the book value, the land plot 18-3-3 rai is worth Baht 69.53 million. Its estimated price on 28 June 2006 is Baht 95.31 million. A subsidiary has a plot of land in Soi Pattaya-Na Kluea 12, Chonburi. The plot has book value of Baht 57 million. It has not been estimated for the market price.

The objective of the Company is to develop real estate projects for sale. In order to keep developing new projects continuously, it plans to buy 8-12 plots of land for project development a year.

The Company does not have a policy to maintain a land bank.

Annual Report 2007

58

Structure of Shareholders and Management

Structure of Shareholders and Management

Structure of Shareholders

As at 31 December 2007, the registered capital of the Company was Baht 1,340,000,000, consisting of 1,340,000,000 common stocks, with a par value of Baht 1.00 each. The paid-in capital of companies was Baht 1,005,000,000, consisting of 1,005,000,000 common stocks, with a par value of Baht 1 each.

Substantial Shareholders

According to information from the last closing date of the shareholders on 28 December 2007, ten largest shareholders were as listed below.

Shareholders Number of Shares Percent 1. Kovitchindachai family 754,551,871 75.08 249,943,823 24.87 2. The Thailand Securities Depository Co., Ltd. for Depositor 504,306 0.05 3. Other Shareholders Total 1,005,000,000 100.00 Note: Shareholders of Kovitchindachai family that are in the same group and vote on the same side are:

Name Number of Shares Percent 1.

Mr. Santi Kovitchindachai 2.

Mr. Prinya Kovitchindachai 3.

Ms. Siriluck Kovitchidachai 4.

Ms. Siriluck Kovitchidachai 5.

Mrs. Kimlang Kovitchindachai 6.

Mrs. Kimlang Kovitchindachai 7.

Mr. Chaiwat Kovitchindachai 8.

Mr. Wongwai Kovitchindachai 9.

Mr. Chavai Kovitchindachai 10.

Mr. Pisanu Kovitchindachai 11.

Ms. Sudarat Kovitchindachai 12.

Ms. Nipha Aphirattanarungruang 13.

Ms. Suparat Kovitchindachai 14.

Master Thanin Kovitchindachai 15.

Ms. Busayarat Kovitchindachai 16.

Ms. Worarat Kovitchindachai 17.

Mr. Chaiwut Kovitchindachai 18.

Ms. La-ongdao Songsat 19. Mr. Chaiyo Kovitchindachai 20. Mr. Kwanchai Mongkolkittaveepol

61 Annual Report 2007

142,621,922 140,000,000 233,592,196 120,102,669 9,075,000 7,900,000 7,836,744 7,806,668 7,806,668 7,800,000 7,800,000 7,800,000 7,800,000 7,800,000 7,806,668 300,000 7,806,668 7,800,000 7,800,000 7,030,000

14.19 13.93 23.24 11.95 0.90 0.81 0.79 0.78 0.78 0.78 0.78 0.78 0.78 0.78 0.78 0.03 0.78 0.78 0.78 0.70

Structure of Shareholders and Management

Dividend payment policy

The Company has a policy to pay dividends to its shareholders in the amount of not less than 40 percent of its net profit. The dividend payment ratio are taken into consideration, such as operating results, expansion plan, liquidity and other relevant management factors. Any dividend payment is also subjected to the approval of the board of directors as appropriate and concerns the maximization of shareholders’ wealth. The Company’s subsidiaries have the same dividend payment policy as the Company’s.

Annual Report 2007

62

63 Annual Report 2007

Finance Department

Accounting Department

Director of Accounting and Finance Mr. Namchai Wanaphanubet

Office of Secreatary

General Affair Department

Legal Department

Excutive Committee

Security Control Department

Project Develop Department

Product Develop Department

Quality Control Department

Project Coordination Department

Project Group Management Department

Budgeting Control Department

Marketing Department

Sale Department

Director of Construction Mr. Chaiwat Kovitchindachai

Internal Audit

Audit Committee

Customer Relation Department

Community Development Department

After - sale Service Department

Director of Sale and Marketing Mr. Chaiwat Kovitchindachai

Deputy Managing Director Mr. Chaiwat Kovitchindachai

Managing Director Ms. Siriluck Kovitchindachai

Director of Customer Relation Mr. Kwanchai Mongkolkittaveepol

Risk Manegement Committee

Director of Administration Mr. Sakol Pao-in

Structure of Management

The Company Management Organization Chart As of 31 December 2007

Board of Directors

Purchasing Department

Human Resources Management and Administration Department

Information Technology Department

Director of Organization Development Ms. Nipha Aphirattanarungruang

Structure of Shareholders and Management

Structure of Shareholders and Management

The Company has appointed the Board of Directors and two special committees to screen important issues, namely, the Audit Committee and the Risk Management Committee. The directors and executives of the Company are competent and have qualifications according to the Section 68 of the Public Limited Companies Act B.E. 2535 and the notification of the Securities and Exchange Commission on No. Kor Jor. 12/2543 re Application and Approval of Newly-issued Shares dated March 22, 2000.

The board and committees are followings:

Board of Directors

As at 31 December 2007, the Company’s Board of Directors consisted of 10 directors.

1.

Mr. Mongkhol Pao-in Chairman and Independent Director

2.

Mr. Surabhon Kwunchaithunya Independent Director/Chairman of Audit Committee

3.

Lt. Sivaraks Phinicharomna Independent Director/Audit Committee

4.

Mrs. Moogda Arriyavat Independent Director/Audit Committee

5.

Ms. Siriluck Kovitchindachai Director

6.

Mr. Chaiwat Kovitchindachai Director

7.

Mr. Kwanchai Mongkolkittaveepol Director

8.

Mr. Namchai Vanapanubet Director

9.

Mr. Sakol Pao-in Director/ Secretary of the Board of Directors Note: Mr. Amnat Ngamsuriyarote has resigned as the director on June 30, 2007.

Authorized Directors

Authorized directors who can sign to comply with the company are:

(1) Mr. Mongkhol Pao-in co-sign with Ms. Siriluck Kovitchindachai, totally two persons and affix the company seal or one of them co-sign with Mr. Kwanchai Mongkolkittaveepol or Mr. Chaiwat Kovitchindachai, totally two persons and affix the company seal; and

(2) Mr. Kwanchai Mongkolkittaveepol or Mr. Chaiwat Kovitchindachai or Mr. Namchai Vanapanubet or Mr. Sakol Pao-in, either two persons signing together with the company’s seal affixed on documents used for application of land allocation permission, land-sale permission, building and construction permission, request of inspection, consolidation or separation of land title deed, permission to separate co-ownership, mortgage registration, clearance to mortgage, redemption of land plot or building, request for house ID, application to use and transfer electricity and water supply, right lease, telephone line, general request of telephone, permission to connect with roads and drainage pipes, permission to cut a curb, request for inspection of land position and area, request for land plot measure and separation, condominium registration, juristic condominium, juristic person for immovable property, usage of building, commercial location, communication including submission and receipt of any document related the Revenue Department, prosecution, submission of pleading both civil suit and criminal case, grievance or report incrimination to a police or inquiry official instead of grievance, compromising, pleading, submission and retrieving any documents related to a sued case, application for permission from government agencies or state enterprises, and certifying true copy of documents.

Annual Report 2007

64

Structure of Shareholders and Management

Scope of Authority and Duty of the Board of Directors

1. Manage the Company in compliance with its objectives, regulations and resolutions of legitimate shareholders meetings with integrity and care to protect the interests of the Company;

2. Determine the objectives, guidelines, policies, work plans and budgets of the Company and monitor and administration and management of the Executive Board to ensure full compliance with the regulations of the Securities and Exchange Commission of Thailand; and

3. The Board of Directors has right to appoint a director and/or the management at their discretion to be the Executive Board with authorities and responsibilities to manage the Company’s business as assigned by the Board of Directors.

Except for the following tasks which can be implemented only under the resolutions from Shareholder Meeting and under the stipulation that any director or person who might be involved with either conflicts of interests or any other beneficial conflicts with the company or subsidiary company shall not be granted the right to vote in that matter.

• Matters stipulated by Laws that must be obtained the resolutions from Shareholder Meeting.

• Transactions that any directors are involved with either conflict of interest or any other beneficial conflicts particularly stated by Laws or Stock Exchange Specifications must be obtained the resolutions from Shareholder Meeting.

In the year 2007, the Company held 6 meetings for Board of Directors, in which attendance of each member is shown as follows :

No. Name-Surname 2006 2007 1 Mr. Mongkhol Pao-in 4/4 6/6 2 Mr. Surabhon Kwunchaithunya 4/4 6/6 3 Lt. Sivaraks Phinicharomna 4/4 6/6 4 Mr. Amnat Ngamsuriyarote* 3/4 4/6 5 Ms. Siriluck Kovitchindachai 4/4 5/6 6 Mr. Chaiwat Kovitchindachai 4/4 6/6 7 Mr. Kwanchai Mongkolkittaveepol 4/4 6/6 8 Mrs. Moogda Arriyavat 4/4 5/6 9 Mr. Namchai Vanapanubet 4/4 6/6 10 Mr. Sakol Pao-in 4/4 6/6 Note: Mr. Amnat Ngamsuriyarote has resigned as the director on June 30, 2007.

Audit Committee

As at 31 December 2007, the Company’s Audit Committee consists of three members as follows.

1.

Mr. Surabhon Kwunchaithunya Chairman of Audit Committee 2.

Lt. Sivaraks Phinicharomna Audit Committee 3.

Mrs. Moogda Arriyavat Audit Committee

Note: Mrs. Moogda Arriyavat was appointed from the board of directors as the audit committee, replacing Mr. Amnat Ngamsuriyarote who has resigend on June 30, 2007

65 Annual Report 2007

Structure of Shareholders and Management

Scope of Authority and Duty of Audit Committee

1. Review the Company’s financial statement to be accurate, reliable and having sufficient disclosure by coordinating with the external auditors and responsible management to prepare quarter and fiscal financial statement. The Audit Committee may recommend the external auditors to review or examine any items viewed as necessary and important during the auditing period.

2. Review the efficiency and effectiveness of the Company’s Internal Control and Internal Audit by coordinating with the External Auditor and Internal Auditor.

3. Advise and determine the parameter for inspection and the internal audit and the auditor’s plan to be congruent and supporting each other in terms of financial auditing.

4. Review the interim financial statements with the auditors and internal control prior to submitting to the regulators.

5. Review and propose the appointment and remuneration of the auditors to the Company’s Board of Directors to receive approval from the shareholders’ meeting, including the auditor’s fees

6. Review the Company’s practice to follow the rules and regulation of the Stock Exchange of Thailand and other related laws.

7. Consider the disclosing of the Company’s information to be reliable and sufficient in case of related transactions and conflict of interest.

8. Prepare internal control report of the audit committee signed by the chairman of Audit Committee and disclose the report in the Company’s annual report.

9. Review and propose the Company’s policy to be updated and appropriated to the situation to the Board of Directors.

10. Other duties and responsibilities that are approved by the Board of Directors and Audit Committee.

In the year 2007, the Company held 5 meetings for Audit Committee, in which attendance of each member is shown as follows :

No. Name-Surname 2006 2007 1 Mr. Surabhon Kwunchaithunya 4/4 5/5 2 Lt. Sivaraks Phinicharomna 4/4 5/5 3 Mr. Amnat Ngamsuriyarote 4/4 2/5 4 Mrs. Moogda Arriyavat - 3/5

Note: Mrs. Mukda Arriyavat has been appointed by the Board of Directors of the Company, in replacement of Mr. Amnat Ngamsuriyarote who resigned from the audit committee on June 30, 2007

Annual Report 2007

66

Structure of Shareholders and Management

Risk Management Committee

As at 31 December 2007, the Company’s Risk Management Committee consists of four members as follows.

1. Mr. Chaiwat Kovitchindachai Chairman of Risk Management Committee

2. Mr. Kwanchai Mongkolkittaveepol Risk Management Committee

3. Mr. Namchai Vanapanubet Risk Management Committee

4. Mr. Sakol Pao-in Risk Management Committee

Mr. Sakol Pao-in serves as a secretary of Risk Management Committee.

Scope of Authority and Duty of Risk Management Committee

1. Consider and approve policy and framework of risk management.

2. Monitor development of risk management framework.

3. Monitor process of risk indicator and assessment.

4. Assess and approve risk management plan.

5. Report risks and risk management to the Board of Directors.

6. Communicate important risks to Audit Committee

In the year 2007, the Company appointed the Risk Management Committee and held 4 meetings for the committee, in which each member attended every time.

Executive Committee

As at 31 December 2007, the Company’s Executive Committee consists of five directors as follows.

1. Ms. Siriluck Kovitchindachai President

2. Mr. Chaiwut Kovitchindachai Executive Director

3. Mr. Kwanchai Mongkolkittaveepol Executive Director

4. Mr. Namchai Vanapanubet Executive Director

5. Mr. Sakol Pao-in Executive Director

Scope of Authority and Duty of Executive Committee

1. Review the Company’s policies, directions, strategies, management structure and operating principles outlined to conform with economic conditions and market competition as proposed by its executives and to seek approval from the Board of Directors thereafter;

2. Propose the Company’s business plan, budgets and management level of authority to the Board of Directors for consideration and approval. This includes the authority to approve, change, and increase annual budget appropriation in any urgent cases and submit a report to the Board of Directors;

3. Monitor and ensure the Company’s policies and management guidelines are carried out efficiently to support the Company’s operation;

67 Annual Report 2007

Structure of Shareholders and Management

4. Monitor the Company’s performance and ensure full compliance with the business plan as approved by the Board of Directors;

5. Approve the Company’s investment projects according to the business plan;

6. Appoint and discharge the Company’s employees at position below Managing Director;

7. Undertake the Company’s financial activities with financial institutes in relation to account opening, loan acquisition, mortgage, guarantee and others including sales, purchase and ownership registration of land plots to facilitate the Company’s operation;

8. Consider schemes of incentives, bonus and remunerations for the Company’s staffs and employees as well as other parties carrying out any business activities for the Company;

9. Approve the purchase and sale of office supplies, land plots, buildings as well as construction and renovations of office building; and

10. Perform any other works as assigned by the Company’s Board of Directors.

The authorization of aforementioned Executive Committee executed by the Company’s Board of Directors, under its authority, does not include authorization or delegation which entitles the Executive Committee or their authorized attorney to approve any transactions in which they or other party who are in dispute or have interests or are in conflicts of interests (as promulgated by the Securities and Exchange Commission of Thailand) execute with the Company or its subsidiaries unless it is in compliance with the policies and criteria stipulated by the Company’s Board of Directors.

Management

As of 31 December 2007, the Company’s management comprises 7 persons as follows:

1. Ms. Siriluck Kovitchindachai Managing Director

2. Mr. Chaiwut Kovitchindachai Assistant Managing Director

Acting Assistant Managing Director of

Sales and Marketing

3. Mr. Kwanchai Mongkolkittaveepol Assistant Managing Director of Customer Relations

4. Mr. Namchai Vanapanubet Assistant Managing Director of Accounting and Finance

5. Mr. Sakol Pao-in Assistant Managing Director of Administration

6. Ms. Nipha Aphirattanarungruang Assistant Managing Director of Organization Development

Scope of Authority and Duty of the Managing Director

1. Operate and manage the administration of the Company;

2. Operate and manage the administration and the management to be in accordance with policies, plans and strategies approved by the Board of Executive Committee;

3. Provide an authority and/or to sub-authorize to other persons to carry out specific task. Such sub-authorization shall be under the scope of authorization as stated in the given power of attorney and/or shall be complying with the regulations, specifications or order stated by law and the company;

Annual Report 2007

68

Structure of Shareholders and Management

4. Implement other tasks as periodically instructed by the Board of Directors;

5. Process and authorize an approval of employment, contract, and commitment of the Company’s business with budget approved by the Board of Directors. The budget is subject to be changed appropriately under the consideration of the Board of Directors.

The authorization of aforementioned Managing Director has to be in compliance with the policies and criteria stipulated by the Company. It does not include authorization or delegation which entitles the Managing Director to approve any transactions in which any directors or other party who are in dispute or have interests or are in conflicts of interests. The Managing Director has to report that issue to the Company’s Board of Directors.

In addition, a transaction that relates or involves with obtaining or distributing of the Company’s or its subsidiaries’ asset, case by case, requires approval from the shareholder meeting and/or other implementation as stated under the stipulation of such issue in compliance with regulations of the Stock Exchange of Thailand for that transaction.

Selection of Board of Directors and Management

The Company does not have a nominating committee to select candidates and appoint as the Board. However, to the best interests of the Company in operating its business, the Company’s Board of Directors shall consider candidates with knowledge, competency, experiences and qualifications to meet the criteria as stipulated under section 68 of the Public Companies Act, and related announcements of the Securities and Exchange Commission of Thailand.

Selection of Board Members

The board members are nominated and elected by the shareholders at the Shareholders’ meeting using the following procedures and methods:

1. One share is entitled to one vote.

2. Each shareholder is to vote with all his/her entitlement according to 1. Election may be at individual or of groups, as the meeting of shareholders deems appropriate. No shareholder may divide his/ her votes among several individual or groups.

3. Board members are elected using majority of votes at the Shareholders’ meeting. Where the votes of candidates are tied, the Chairman has the casting vote.

The Company appoints at least five members of the Board with over half of total board members must have domicile in Thailand. The Board members must be qualified according to criteria stipulated in the Public Companies Act and Securities and Stock Exchange Act.

At each annual ordinary shareholders’ meeting, one third of the directors must resign from duties. If the number of directors to resign is not exactly one third, the closest number shall apply. As for directors who are to resign in the first and second years after registering the company, a draw will be held to select the person to resign. In each subsequent year, the longest serving directors shall resign.

The directors who resign after completing theirs terms may be elected to resume the position.

In case that a new director is sought to fill a vacant seat as a result of a cause other than the

69 Annual Report 2007

Structure of Shareholders and Management

expiration of term, the Board of Directors shall nominated the candidate who is eligible according to the Public Companies Act in the next Board of Directors’ meeting except the vacant term is less than 2 months. The nominated director shall be in duty for the remaining term of the director she/he is fulfilling.

The Board of Directors’ resolution to induct the said director requires a three quarter vote by the remaining Board of Directors.

The Shareholders’ meeting may vote any of the directors to resign prior to ending of their term with ¾ of total votes by shareholders attending the meeting and of which the total shares must not less than half of total shares held by the shareholders attending the meeting and eligible to vote.

Audit Committee

The Board of Directors appoints the Audit Committee by considering quality of a committee in compliance with criteria of the Securities and Exchange Commission of Thailand and nominating the committee for approval of the Shareholders’ meeting. Terms of holding office of the Audit Committee is three years. After completing, a committee may be elected to resume the position.

Risk Management Committee

The Company’s Board of Directors appoints the Risk Management Committee who is authorized and assigned to manage the Company’s risks.

Executive Directors

The Company’s Board of Directors appoints executive directors who are authorized and assigned to supervise and monitor company business activity.

Annual Report 2007

70

71 Annual Report 2007

Mr. Suraphon Kwunchaithunya 56 Chairman of Audit Committee / Independent Director

2.

78

Age

Mr. Mongkol Pao-in Chairman / Independent Director

Name / Title

1.

No.

Master of Business Administration (Finance) University of Washington, USA Bachelor of Science in Industrial Engineering University of Washington, USA Certificate of Directors Accreditation Program Class 14/2004 dated 17 May 2004 Certificate of Directors Certificate Program Class 44/2004 dated 18 July 2004

LL.B Thammasat University Barrister at law (Thai Bar)

Education

None

None

Share Holding (Share

None

Uncle of Mr. Sakol Pao-in

Relation with Management

2005 - Present

2004 - Present 2003 - Present 1997 - 2002 1995 - 1997 1993 - 1995

2004 - Present 1993 - 1997

1988 - 1992

1989 - 1990 1984 - 1987

Period Chairman Justice of the Constitutional Court

The Commission of Counter Corruption Chief Judge of the Supreme Court Chief Justice of Region 3 (Nakhonratchasirma)

Chairman of Audit Committee

Chairman of Audit Committee Chairman of Audit Committee Managing Director President President

Title

Compsny

Adkinson Securities Public Company Limited Prinsiri Public Company Limited Tycoons Worldwide Group (Thailand) PLC. Secondary Mortgage Corporation Vajir-dhanathun Finance Co., Ltd. Siam City Finance and Securities Co., Ltd.

Prinsiri Public Company Limited The Constitutional Court of the Kingdom of Thailand Institute of Police Administration Development Royal Thai Goverment Ministry of Justice Ministry of Justice

Experience

The Profile of Directors and Executive Boards as of December 31, 2007

Structure of Shareholders and Management

Ms. Siriluck Kovitchindachai 58 Director / Chairman of Executive Committee / Managing Director

Mr. Kwanchai 46 Mongkolkittaveepol Director / Executive Director / Assistant Managing Director of Customer Relations

4.

5.

Age

Mr. Sivaraks Phinicharomma 56 Audit Committee / Independent Director

Name / Title

3.

No. None

Experience in Real Estate business 23.24 for more than 15 years Certificate of Directors Accreditation Program Class 20/2004 dated 8 July 2004

Experience in Real Estate business 0.70 for more than 15 years Certificate of Directors Accreditation Program Class 20/2004 dated 8 July 2004

Certificate of Taxation UCLA, California, USA H&R BLOCK TAX SCHOOL Pasadena, California, USA Master of Arts in Public Administration, Minnesota State University Bachelor Degree in Political Science, Chiangmai University Certificate of Directors Accreditation Program Class 14/2004 dated 17 May 2004 Certificate of Directors Certificate Program Class 44/2004 dated 18 July 2004

Education

Share Holding (Share

Elder sister of Mr. Kwanchai Mongkolkitta-veepol / Aunt of Mr. Chaiwat Kovitchindachai

Younger brother of Ms. Siriluck Kovitchindachai / Uncle of Mr. Chaiwat Kovitchindachai

None

Relation with Management

2000 - Present

1995 - 2004

1993 - 2002

2005 - Present

2000 - 2005

1996 - 1999

1993 - 1995

2004 - Present 2004 - Present 2001 - 2004

2000 - 2001

1999 - 2000 1996 - 1998

1994 - 1996

1992 - 1996

Period Audit Committee Vice President, Internal Audit Assistant Vice President, Internal Audit Deputy Chief Financial Officer Assistant Vice President Manager of Internal Audit Office Manager of Accounting & Finance Director of Auditing & System Development Head of Accounting Office, Los Angeles

President & Managing Director

President & Managing Director

President & Managing Director

Assistant Managing Director of Customer Relation Assistant Managing Director of Marketing Assistant Managing Director of Marketing Vice President, Marketing

Title

Compsny

Prinsiri Public Company Limited

Prinsiri Public Company Limited

Chindapong Property Co., Ltd.

Thai Chinda Property Co., Ltd.

Prinsiri Public Company Limited

Chindapong Property Co., Ltd.

Thai Chinda Property Co., Ltd.

Prinsiri Public Company Limited Shin Satellite Plc Shin Satellite Plc

Digital Phone Co., Ltd.

Shin Satellite Plc Shinawatra International, Plc.

STA Group Plc.

Borg-Werner California, USA

Experience

Structure of Shareholders and Management

Annual Report 2007

72

73 Annual Report 2007

Mrs. Moogda Arriyavat Director / Independent Director

8.

54

Mr. Sakol Pao-in 44 Director / Excutive Director Assistant Managing Director of administration

7.

Age

Mr. Chaiwat Kovitchindachai 39 Director / Executive Director / Assistant Managing Director

Name / Title

6.

No.

Master degree from University of Illinois Bachelor degree from Chulalongkorn University Certificate of Directors Accreditation Program Class 12/ 2004 dated 7 April 2004 Audit Committee Program Class 1/ 2004 dated 9-10 August 2004

None

LL.B. 0.10 Thammasat University Barrister at Law Certificate of Directors Accreditation Program Class 20/2004 dated 8 July 2004

MBA, Ramkhamhaeng University BB (Computer Science), Ramkhamhaeng University Certificate of Directors Accreditation Program Class 20/2004 dated 8 July 2004

Education

Share Holding (Share 0.90

None

Nephew of Ms. Siriluck Kovitchindachai and Mr. Kwanchai Mongkolkitta-veepol / Husband of Ms. Nipha Aphirattanarungruang

Nephew of Mr. Mongkhol Pao-in

Relation with Management Assistant Managing Director Assistant Managing Director of Construction Assistant Managing Director of Construction Vice President, Construciton

Assistant Managing Director - Administration Managing Director Vice President Manager Deputy Manager Credit Control Division

Audit Committee Independent Director and Audit Committee Independent Director Independent Director and audit Committee Manager Managing Director

2003 - Present

1999 - Present 1995 - 1998 1992 - 1995 1989 - 1991 1985 - 1988

2007 - Present 2004 - Present

2003 - 2004

1997 - 2003 1995 - 1997

Title

2005 - Present 2000 - Present

1996 - 1999

1993 - 1995

Period

Compsny

Prinsiri Public Company Limited GM Multimedia Pcl.

Roynet Pcl. Dynasty Ceramic Pcl.

MCL Management Co., Ltd. Vachira Securities Co., Ltd.

Prinsiri Public Company Limited

Dherakupt Law Office Co., Ltd. Ekkapat Finance and Securities Pcl. Thana One Finance and Securities Pcl. Finance One Limited Phatratharakij Finance Securities

Prinsiri Public Company Limited Prinsiri Public Company Limited

Chindapong Property Co., Ltd.

Thai Chinda Property Co., Ltd.

Experience

Structure of Shareholders and Management

Ms. Nipha 39 Aphirattanarungruang Assistant Managing Director of Organization Development

10.

Age

Mr. Namchai Vanapanubet 50 Director / Executive Director / Assistant Managing Director of Accounting & Finance

Name / Title

9.

No.

MBA, NIDA BA (Accounting) Thammasat University Certificate of Directors Accreditation Program Class 45/2005 dated 27 September 2005

MBA 0.78 Kasetsart University B.S. (Chemistry) Ramkhamhaeng University

Education

Share Holding (Share None

Wife of Mr. Chaiwat Kovitchinda-chai

None

Relation with Management

2006 - Present

2004 - 2006

2002 - 2004 2001 - 2002

1996 - 2000

1993 - 1995

2005 - Present

1999 - Present 1999 - Present 1999 - Present

Period

Assistant Managing Director – Business Development Director – Human Resources & Administration Department Business Owner Director – Account & Finance Department Director – Account & Finance Department Director – Account & Finance Department

Assistant Managing Director - Finance Director Financial Consultant Deputy Managing Director

Title

Compsny

Prinsiri Public Company Limited

Prinsiri Public Company Limited

Business Owner Prinsiri Public Company Limited

Chindapong Property Co., Ltd.

Thai Chinda Property Co., Ltd.

Prinsiri Public Company Limited

C&M Engineering Co., Ltd. Ritthaweeland Co., Ltd. SME Trade Promotion Co., Ltd.

Experience

Structure of Shareholders and Management

Annual Report 2007

74

Structure of Shareholders and Management

Note: Authorized directors who can sign to comply with the company are those with no. 1, 5, 6, 7, 8 and 10 as follow.

(1) Mr. Mongkhol Pao-in co-sign with Ms. Siriluck Kovitchindachai, totally two persons and affix the company seal or one of them co-sign with Mr. Kwanchai Mongkolkittaveepol or Mr. Chaiwat Kovitchindachai, totally two persons and affix the company seal; and

(2) Mr. Kwanchai Mongkolkittaveepol or Mr. Chaiwat Kovitchindachai or Mr. Namchai Vanapanubet or Mr. Sakol Pao-in, either two persons signing together with the company’s seal affixed on documents used for application of land allocation permission, land-sale permission, building and construction permission, request of inspection, consolidation or separation of land title deed, permission to separate co-ownership, mortgage registration, clearance to mortgage, redemption of land plot or building, request for house ID, application to use and transfer electricity and water supply, right lease, telephone line, general request of telephone, permission to connect with roads and drainage pipes, permission to cut a curb, request for inspection of land position and area, request for land plot measure and separation, condominium registration, juristic condominium, juristic person for immovable property, usage of building, commercial location, communication including submission and receipt of any document related the Revenue Department, prosecution, submission of pleading both civil suit and criminal case, grievance or report incrimination to a police or inquiry official instead of grievance, compromising, pleading, submission and retrieving any documents related to a sued case, application for permission from government agencies or state enterprises, and certifying true copy of documents.

75 Annual Report 2007

/ , X , @ / , $ , @ / , $ , @ / , // , O / , // , O / , // , O / , // , O / , @ / , // , O O

Prinsiri Plc.

/

Growed Yotha Co., Ltd.

/

/

/

Prinventure Co., Ltd.

O

Shin Satellite PLC

/

Dherakupt Law Office Co., Ltd.

/

C&M Engineering Co., Ltd.

Related Companies

Note: / = Director X = Chairman // = Executive Director O = Executive $ = Audit Committee @ = Independent Director

Mr. Mongkhol Pao-in Mr. Suraphon Kwunchaithunya Mr. Sivaraks Phinicharomma Ms. Siriluck Kovitchindachai Mr. Kwanchai Mongkolkittaveepol Mr. Chaiwat Kovitchindachai Mr. Sakol Pao-in Mrs. Moogda Arriyavat Mr. Namchai Vanapanubet Ms. Nipha Aphirattanarungruang

Name

Subsidiaries

Active Position Holders of Director and Executive Boards of the Company as of December 31, 2007

O

SME Trade Promotion Co., Ltd.

Structure of Shareholders and Management

Annual Report 2007

76

Structure of Shareholders and Management

Directors and Executive Boards of the Company’s Subsidiaries As of December 31, 2007

Name

Mr. Chaiwat Kovitchindachai Mr. Namchai Vanapanubet Ms. Nipha Aphirattanarungruang Mrs. Oradee Na Ranong Mr. Thanapol Sirithanachai Mr. Chath Kovitchindachai Mrs. Pailin Wichetthawichai Ms. Siriluck Kovitchindachai

Growed Yotha Company Limited

Prinventure Company Limited

/ , //

/ /

/ , // / , // / / , // / , //

/ , //

Note: / = Director // = Executive Director

Remuneration of the Directors and Management

Cash remuneration

Remuneration for a directorship

The Company’s remuneration for a directorship consists of meeting allowance and annual bonus. In 2006 and 2007, these were amounted to Baht 2,080,000 and 1,847,500 respectively as shown in following table.

รายชื่อ

Meeting Allowances 100,000

1. Mr. Mongkhol Pao-in

2007

2006 200,000

Meeting Allowances 120,000

Bonus

Bonus 200,000

2. Mr. Suraphon Kwunchaithunya

200,000

200,000

245,000

200,000

3. Lt. Sivaraks Phinicharomna

200,000

125,000

245,000

125,000

4. Mr. Amnat Ngamsuriyarote

200,000

125,000

120,000

-

5. Ms. Siriluck Kovitchindachai

10,000

50,000

7,500

50,000

6. Mr. Chaiwat Kovitchindachai

10,000

50,000

10,000

50,000

7. Mr. Kwanchai Mongkolkittaveepol

10,000

50,000

10,000

50,000

100,000

100,000

170,000

125,000

9. Mr. Namchai Vanapanubet

10,000

50,000

10,000

50,000

10. Mr. Sakol Pao-in

10,000

50,000

10,000

50,000

850,000

1,000,000

947,500

900,000

8. Mrs. Moogda Arriyavat

Total

Note: Mr. Amnat Ngamsuriyarote has resigned as the director on June 30, 2007.

77 Annual Report 2007

Structure of Shareholders and Management

Remuneration for executive directors and management 2006

Remuneration

2007

Persons

Remuneration (Baht)

Persons

Remuneration (Baht)

Total salary

6

8,640,000

7

13,580,000

Total bonus

6

2,000,000

6

2,770,000

Grand total

6

10,640,000

7

16,350,000

Other remuneration

-None-

Human Resources

Number of employees

As of December 31, 2007, the Company has totally 316 employees excluding directors and management team. Number of employees can be classified by line as following

Line Number (Person) Administration Sales and Marketing Project Management Accounting and Finance Customer Relations Organization Development

15 88 141 21 26 25

Total 316

For three previous years, the company has had none of labor depute.

Remuneration for employees

Human Resources Development Policy

The total remuneration for employees are payment paid to all that were employed during the year. The remuneration includes salary, wages and bonus. In 2006 there were 240 employees with remuneration amounted to Baht 66.39 million. In 2007 the total of 421 employees are paid 102.94 million Baht.

The Company has a policy to support the development of human resources. This enables our employees to further develop their capabilities for their career advancement. The Company’s human resources department regularly organizes trainings for all levels of operational and project employees. Regarding result of training survey, some regular and special courses are arranged for general employees and executives.

Annual Report 2007

78

Corporate Governance

Corporate Governance

In order to develop sustainable competitive capability and growth as well as to add value to long-term shareholders and other stakeholders, the Company commits on the management under principles of good corporate governance in compliance with the laws concerning securities and stock exchange and regulations, announcement, order or specifications of the Stock Exchange of Thailand.

Good governance is a value driver, leading to enhance corporate credibility and wealth through the release of complete and reliable information to investors, business associates, and various stakeholder groups. The Company set up its good corporate governance policy and has implemented it since 3 April 2004. Practice manual for good corporate governance and code of conduct were prepared and distributed as guidelines for the Company’s staff.

The Company’s good corporate governance practices can be summarized as followings.

1. Objectives of Corporate Governance Policy

The Board of Directors concentrates on good corporate governance. Two particular committees are appointed to monitor important tasks under principles of good corporate governance. They are Audit Committee and Risk Management Committee. Members of the Committees meet the qualifications specified in Section 68 of the Public Limited Liability Company Act B.E. 2535 and announcement No. 12/2543 of the Office of Securities and Exchange Commission. The Committees are clearly assigned their responsibilities concerning good corporate governance. Their scope of work is followings.

1. Provide guidelines for good corporate governance to the Boards of Directors.

2. Provide comments and suggestions about good corporate governance to the Board of Directors.

3. Monitor operation of Committees and management to be in compliance with the Company’s good corporate governance.

4. Review the guidelines of the Company’s good corporate governance by comparing with international practice and report to the Board of Directors

The Board of Directors set the objectives of the Company’s good corporate governance: “The Company is committed to conducting its business in accordance with all applicable laws and regulations with transparency and fairness. Risk estimation, control system and sufficient information disclosure shall be adequately provided for business operations which shall be consistently followed up. This is to enhance the Company’s sustainable wealth and to render maximum benefit to shareholders and stakeholder groups under ethical and moral principles.”

In addition, the Company established a campaign to promote importance of strict practices under the principles of good corporate governance. Policies and information concerning the Company’s good corporate governance are distributed and promoted through the Corporate Governance Manual and Code of Conduct Manual. The Company also provides convenient data access to all employees, shareholders, investors, stake holders and related parties. Database of available references are published on the Intranet and Website both in Thai and English.

2. Rights and Equitable Treatment of Shareholders

The Company realizes and concerns the right and equitable treatment of shareholders by

81 Annual Report 2007

Corporate Governance operating and supporting the shareholders to utilize their rights. In addition the Company also supervises indiscriminate practice and protects equal basic right protection.

Ordinary shareholders meeting of the Company shall be held once a year within 4 months after the end of fiscal year. In case of emergency requiring resolution from the shareholders’ meeting, the Company will arrange extraordinary meeting at by case basis. Before the date of meeting, the Company will send meeting invitation to shareholders at least 14 days in advance and announce that invitation in daily newspapers at least 3 day prior the date of meeting. The invitation must be published in one Thai newspaper and one English newspaper at least 3 day consecutively. The announcement has to provide information of meeting invitation with details of meeting agenda and meeting documents in advance before the documents are sent to the shareholders. In order to provide time to study data adequately prior getting information in form of hard copy, the Company publishes such information on its Website under the section “Investor Relations” both in Thai and English at least 30 days before the meeting. In addition, the shareholders can propose agenda to the meeting via the Company’s Website. On the day of the meeting, the Company will provide convenience to all shareholders equally. Registration for the meeting will be arranged 2 hours before the meeting commences. Meeting venue and time is considered with the attendances’ convenience.

In shareholders meeting, the Company will pay attention and provide opportunity to each shareholder equally. Before the meeting commences, the Chairman of the meeting will clearly explain regulations used in the meeting and voting procedures. During the meeting, the Chairman will let participates to express opinions and suggestions and ask question for each agenda. He/she will supervise adequate and appropriate discussion. For explaining and answering questions, the Chairman and executives will pay attention to each issue by answering it clearly and straight forward. Counting of votes will be practiced with method of international guidelines and transparency. The auditor will be present as the witness of voting. Minutes of the meeting will be recorded accurately and completely in order to enable inspection by the shareholders. The minutes are organized for easy and convenient auditing.

In addition the Company has the Investor Relations to serve as information center. This unit will provide the Company’s information disclosure and its information technology to shareholders, investors, reporters and public who interested in the Company’s securities. Such information must be accurate, complete, consistent, in time, transparent and equal. This is to provide convenience for the Company’s data and information technology such as corporate information, financial statements, annual report, meeting invitation, information reported to the Office of Securities and Exchange Commission and activities related to securities. The Company also publishes those data on its Website under the section “Investor Relations” both in Thai and English. The shareholders and general interested persons can contact the Investor Relations directly at 0-2617-6900 or via the Website.

3. Rights and Equitable Treatment of Other Shareholders

The company is well aware of the Stakeholders’ right namely the employees and company’s executives or external stakeholders namely trade partners, competitors, creditors or any other institutions concerned. In order that the rights of all these stakeholders are well taken care of, the company set it

Annual Report 2007

82

Corporate Governance clearly as the policy for good corporate governance and code of conduct. Each stake holder has the right as following.

- Employees : The Company deals with employees without discrimination and

provides fair and appropriate remuneration.

- Trade partners and payables :

The Company deals with trade partners and payables with fairness

according to trading conditions and mutual agreement.

- Customers : The Company takes care and is responsible for customers by

producing quality standard products and meeting customers’ needs.

Quality products, services and reasonable price are considered as

important elements.

- Competitors : The Company competes in accordance with good competition

practice in order to keep up norm of competition.

- Community : The Company is committed to environment care by being responsible

and caring not to cause impacts on communities’ and society’s

environment.

4. Shareholders Meeting

In the year 2007, there was an Ordinary Shareholders Meeting no. 1/2550 on 26 March 2007.

For this meeting, the Company sent shareholders meeting invitation with details of agenda, comments of directors, minutes of previous meeting, annual report, meeting document, and power of attorney with description of such use. (These documents were published on the Company’s website 30 days before the meeting.) Those documents were sent more than 7 days prior the date of meeting. The Company provided the mentioned documents to every shareholder listed in the book of shareholders as at the date of closing.

The Company also announced the meeting invitation on daily newspaper at least 3 days in advance, one in Thai issue and one in English issue at least 3 consecutively. In addition, independent directors were appointed as proxy of shareholders who would like to assign those directors to attend the meeting on behalf of them. However, shareholders could give power of attorney to either any person or appointed independent directors.

For the shareholders meeting in 2008, the Company will distribute information of meeting invitation with details of meeting agenda and meeting documents to shareholders in advance before sending them documents and publish on its Website under the section of Investor Relation both in Thai and English at least 30 days prior the date of meeting. Shareholders can propose an agenda via the site.

In the shareholders meeting of previous year 2007, 10 members of Board of Directors attended the meeting. The Chairman of the Board acted as the chairman of the meeting. He explained description of meeting attendants, procedures, how to vote, vote counting and how to use a voting card. He declared the results of each agenda clearly and transparently. He also provided attendants opportunity to ask and comment at appropriate and adequate time. Directors and executives answered questions clearly. The meeting session processed completely and accurately as stated by laws. Regarding convenience provided

83 Annual Report 2007

Corporate Governance to shareholders, registration was provided 2 hours before the meeting commenced until it ended. Snacks were served to the participants. The meeting took 1.30 hours. Minutes of the meeting was recoded accurately and completely to enable inspection by shareholders. The minutes were organized for easy and convenient auditing.

After the meeting, shareholders can access the minutes of meeting via the Company’s website under the section “Investor Relations” within 14 days.

5. Leadership and Vision

The Board of Directors is composed of directors who are qualified, skilled and experienced in business activities under the framework of the law, objectives, Articles of Association, and resolutions passed at shareholder meetings. The discharge of these duties shall be executed responsibly, honestly, and prudently according to good practices.

The Board of Directors shall take part in establishing company’s objectives, strategies, goals and policy, and shall approve business plans and company’s budget, and shall then follow up the operation result to comply with the established objectives, policies and business plans for the maximum benefits of the organization and shareholders. In the previous year the Executive Committee proposed an annual business plan and fiscal budget to the Board of Directors. After being discussed and commented by the Board and Committee, those plan and budget were adjusted and approved.

6.Conflicts of Interest

The Company’s policy concerning conflict of interest is based on the principle that every employee must perform his responsibilities for the best interest of the Company. Employee actions and decisions shall not be influenced by personal gains or nepotism, and duties shall be executed in strict accordance with the Company’s code of conduct.

The Board of Directors supervises possible related transaction carefully and use of internal information as followings.

1. Possible related transaction

It is determined, as a measurement to prevent conflicts of interest which may arise from making connected transactions between the Company and other persons, that the executives and stakeholders shall not be able to make approvals on such transactions. The said transactions must be reported to the Audit Committee for comments and the Board of Directors after on. Those must be in compliance with the laws concerning securities and stock exchange and regulations, announcement, order or specifications of the Stock Exchange of Thailand.

2. Supervision of use of internal information

The Company’s policy prohibits directors and executives to use the Company’s information neither directly or indirectly for personal benefits according to description of article 9.5.

In every meeting of Board of Directors, the Chairman shall inform the meeting to follow the

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Corporate Governance policy concerning conflict of interest. A related or concerned director of possible conflict of interest has to report to the meeting in order not to vote or comment for that agenda.

The Audit Committee shall carefully consider appropriation and reason of related transaction, conflict of interest and accounting standards specified by the Stock Exchange of Thailand and the Securities and Exchange Commission of Thailand before propose to the Board of Directors for approval.

Those transactions must be recorded and disclosed in every quarter report, annual report and annual information form.

7. Business Ethics

Realizing importance of practice for ethics and morality, the Company developed its Code of Conduct and has implemented that code since 3 April 2004 as practice guidelines for directors, executives and employees to perform and deal with related group with fairness. This supports sustainable growth to the organization. All directors, executives and employees have to follow and perform in compliance with the code strictly. In addition, the Company commits to promote utilization of this code among raw material suppliers, contractors, consultants and partners.

The Company widely distributes code of conduct to directors, executives and employees through Intranet and website under the section “Investor Relations”.

8. Counterbalance of Non-executive Directors

The Company have counterbalance of non-executive directors by do not let a person or group to solely make a decision. In order to establish a counterbalance mechanism and effective administration, the Company appointed 9 directors as following.

- 5 executive directors

- 4 non-executive directors

Four independent directors are not executive directors, representing 50 percent of all directors.

The independent directors can serve as shareholders’’ representatives as a dependence. Therefore, there is appropriate counterbalance. From the beginning to the middle of the year, the Company had 5 nonexecutives. On 30 June 2007, one of non-executive directors resigned. Therefore at present the Company has 4 non-executive directors.

9. Merging and Splitting of Titles

The Company clearly separates the roles and authority of directors and management. In order to create a healthy balance between the supervision and management of the Company’s business, the Chairman of the Board of Directors is not the same person as the Managing Director.

10. Remuneration of Directors and Executives

The remuneration of directors and executives shall be set at an appropriate amount which is in the same level of the industry. There shall be no overpaid remuneration. The remuneration of the Directors shall be paid as meeting allowance according to the number of attendance which shall be approved by the Shareholders Meeting.

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Corporate Governance

For the Executives, the company shall provide remuneration according to the performance of each executive and the company operation result. The company is trust that the said remuneration is sufficient to motivate and maintain qualified personnel.

In 2007, the Company provided remuneration of the Board of Directors as approved by the shareholders’ meeting for allowance of meeting and bonus of totally not excess 2,480,000 Baht.

Executive directs entitled to receive remuneration in form of salary and bonus. For more information of remuneration of directors and management, please see article 9.3: Remuneration of Directors.

11. Directors Meeting

It is the company policy to hold a directors meeting at least once every three month and additional meeting may be held should the needs arise. In each meeting, the agenda must be stated clearly and appointment letters shall be distributed 7 days prior to the meeting so that there is sufficient time for the directors to study all information before attending the meeting. Except in case of emergency to reserve right or benefit of the Company, other method of making appointment shall be used and date of meeting is earlier.

The meeting takes at least two hours. In the meeting, all directors have chance to discuss and openly express comments. The Chairman of the Board of Directors shall be the person who processes conclusion from the meeting. Any directors who take part of related transaction of considered issue have to leave the meeting during that agenda. The record of meeting must be made in writing and the minutes of meeting that has been certified by the Board of Directors must be filed so that it can be examined by the Board of Directors and persons concerned at all times.

In 2007 the Board of Directors held 6 general meetings. Please see attendances by directors in article 9.1: Structure of Management.

12. Sub-committee

For the Company’s effective performance, the Board of Directors appoints special two committees to monitor important tasks. They are Audit Committee and Risk Management Committee. Description of authority and duties are in article 9.1.2: Audit Committee and article 9.1.3: Risk Management Committee.

The Board of Directors assigns the Audit Committee to supervise good corporate governance. The scope of authority is followings.

1. Provide guidelines for good corporate governance to the Boards of Directors.

2. Provide comments and suggestions about good corporate governance to the Board of Directors.

3. Monitor operation of Committees and management to be in compliance with the Company’s good corporate governance.

4. Review the guidelines of the Company’s good corporate governance by comparing with international practice for improvement and report to the Board of Directors.

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Corporate Governance

13. Internal Control, Internal Audit System and Risk Management

In order to achieve effective results both in executive and operation levels, the company has specified clear and appropriate criteria and procedures in Internal Control System. The duty and authority of operating staff and executives are stipulated clearly in written. The duties of operator staff, supervisor, controller and evaluator are separated to achieve proper counterbalance and counter investigation. Apart from this, there are effective internal control system and risk management covering all administration including management control, financial control and operational control. The said system is follow-up and assessed regularly by Audit Committee to ensure its efficiency.

The Company appoints the Risk Management Committee who is assign to oversee organizational risks in overall, evaluate risks and plan structure of risk management in order to manage risks at the acceptable level. Those risks include financial risks, operation risks, business risks and event risks. The Committee also has to analyze and assess possible risks and trends impacting the Company both internally and externally. The risk management report has to be submitted to the Boards of Directors.

The Board of Directors is highly concerned about the risk management. The Board has announced its determination and estimation of business risk together with any risk which might affect the company’s operation. The Risk Management Committee developed risk management manual for organizational risk management as guidelines to determine and manage risks. In 2007 the Company provided training on risk management to all staff

The Internal Audit Office is also set up from out source to assure that the main operation and financial activities of the company are effectively carried out in accordance with its policy, laws and related regulations. In order that the Internal Audit Office can work independently on investigation and counterbalance, the Board of Directors has specified that the Internal Audit Office report directly to the Audit Committee and be evaluated by the Audit Committee.

The Internal Audit Office and Office of DIA International Auditing audited financial statements of the fiscal year 2007. They commented that there was no significant detection regarding archive management and internal control at all.

14. Report of the Board of Directors

The Board of Directors shall be responsible for the company’s financial budget and financial information that appear in the annual report. The financial budget shall be prepared in accordance with the generally accepted accounting principles approved in Thailand. The financial budget shall be made regularly under appropriate policy with careful judgment and best forecast. Important information shall be revealed sufficiently in the financial report notes.

The Audit Committee has appointed by the Board of Directors to audit the Company’s financial statements to be correct and adequate. Internal control and inspection must be proper and efficient. The committee composed by non-executive directors is responsible for the quality of financial statements and internal control.

The Board has an opinion that the internal control of the Company is at the appreciated level in overall and can build trust reasonably for accountability of the Company’s financial statements.

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Corporate Governance

15. Relationship with Investors

Board of Directors realizes the Company’s information neither relevant nor irrelevant to financial position which might influence the decision making of investors and stake holders. Company then has policy to disclose information accurately, straight with the truth, trustful, consistent, in time and in compliance with laws, rules, regulations related information disclosure of the Securities and Exchange Commission of Thailand and the Stock Exchange of Thailand. The management values and follows this policy strictly.

In addition to disclose information according to the stipulation of the Stock Exchange of Thailand and the Office of Securities and Exchange Commission, the Company set up Investor Relations which is responsible for information disclosure of the Company to shareholders, investors, analysis, reporters and public who are interested in the Company’s securities.

In 2007 the Company arranged activities to provide information of the Company both directly and indirectly through 3 road shows in Thailand, 1 road show in overseas, 7 analysis meeting, 3 meetings with minority investors, 3 site visits, 4 participations in Opportunity Day and press release.

When the Company has important investment or activity, the information will publish via television programs from time to time. In addition, Investor Relations is keeping on providing information and answering questions inquired by investors and reporters via e-mail.

In addition, the Company also provides its information, performance report, financial statements, press release, securities information, securities activity, annual report, shareholders meeting invitation, minutes of meetings, and other information via its website: www.prinsiri.com, under section Investor Relations. The data on this channel is always updated.

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Supervision of the Use of Insider Information

Supervision of the Use of Insider Information

The Company has prohibited its executives and directors from the use of insider information which had not been made public for their own interests including trading of the Company’s shares. In doing so, the Company adopted the following policies and methods in monitoring the use of insider information by its executives and employees for their own interest:

1. Informing its executives of their duty to report their holdings of the Company’s shares and related penalties as stipulated under the sections 59 and 275 of the Securities and Stock Exchange of Thailand Act, B.E. 2535.

2. Sending a circular letter informing its executives that those who have learned of insider information of significance that will affect the stock prices must refrain from trading the shares for one month before the financial statement or the information is made public. The Company also informs parties related to the insider information that they must not disclose it to others until it is made public.

3. The Company implements prevention to use the Company’s information. Any unit getting insider information shall not disclose such data to any party or unconcerned person.

In order to monitor and inspect said operation, apart from requiring its directors and executives to report on the changes in their holdings of the Company’s shares to the Securities and Exchange Commission as stipulated under section 59 of Securities and Stock Exchange Act, B.E. 2535, the Company requires a copy of the report on the same day it is sent to the Securities and Exchange Commission of Thailand.

The Company has not set out any disciplinary punishment for its executives who fail to comply with the aforementioned measures. However, the Company had informed its executives of penalties stipulated under section 59 of the Securities and Stock Exchange Act, B.E. 2535 for breaching the aforementioned measures.

This supervision of the use of insider information is very important for the Company as it becomes part of code of conduct that directors, executives and employees should strictly follow.

91 Annual Report 2007

Internal Control

Internal Control

The Company is highly concerned about Internal Control. The Board of Directors assigns the Audit Committee to review assessment of internal control system by concentrating on its sufficiency and appropriate criteria for business operation. The system must obtain efficiency and effectiveness of procedures. It should promote resource utilization and asset maintenance while prevent error, mistakes, loss, waste and depravity. Accounting system and financial statements have to be accurate and reliable as well as in compliance with regulations related to the Company’s business.

In order that the Internal Audit Office can work independently on investigation and counterbalance, the Company employs out source auditor and has specified that the Internal Audit Office report directly to the Audit Committee.

In 2007 the Audit Committee reviewed assessment of internal control reported by the Internal Audit Office as following.

1. Organization and environment

Executives and employees possess positive attitude that is advantage for Internal Control. The management pays attention to morality, code of conduct and honesty. Assignment and authority given to staff is appropriate. Policy related to human resources is attractive and support employees. In overall, the Company’s organization and environment is suitable and promotes effectiveness and efficiency of the Internal Control.

2. Risk management

The Company set out a policy and guidelines of risk management in order to manage risks under international standard. Risk Management Committee oversees risks of the organization including those in management, finance, business run, operation, administrating and managing safety, health and environment, and other risks related to the Company’s business. The Risk Management Committee specifies organizational risks and covers all important activities. The plan to manage risks to be at acceptable level is set up and inspected quarterly by the Committee in order to monitor risk management and prevent possible damage or opportunity loss.

3. Operation control

The Company has sufficient systems that are adequate, effective and efficient. Practice regulations are written and operating at high risks is specified. Control mechanism is set up to control and eliminate mistakes. There is performance assessment performed by the management and KPI is adopted with all employees in the organization.

Internal control for important activities, such as administration, finance, accounting, purchase and human resources, are appropriate and adequate.

4. Information technology and communications

The Company has system of information technology and communications related its operation.

Financial and performance report, practice under policies and regulations and information technology obtained from external sources are communicated to the management and internal users in forms that support receivers of such data can perform their duties efficiently and effectively. The Company’s information technology and communication system is appropriate for its business.

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Internal Control

5. Follow-up mechanism

The Company has continuously followed up assessment of Internal Audit and evaluated its performance by requiring report of performance after audit plan from each line and regularly assessing its work as part of normal work procedure of the management, supervisors and related persons. In addition, there are quarter and annual performance assessments of Internal Audit Office. Moreover, suggestions from auditing of financial statements are provided by the Company’s auditor. The Board of Directors always reviews those reports of risk management. When any point needs to be improved, procedures and followup steps are set to insure that the qualifier from inspection will be corrected.

The Audit Committee reviewed the Internal control system evaluated by the Internal Audit and did not find any significant problem or default. This agrees with comment of the Company’s auditor. The Company’s internal control system is sufficient, effective and efficient.

At the Company’s Board of Directors meeting No. 1/2006, the Board evaluated the sufficiency of the Company’s internal control. The Board was in the opinion that the company had adequate internal control in terms of transactions with major shareholders, board members, executives and parties related to them. As for internal control system, the Board concluded that it was adequate and there was no significant error found.

Therefore, it can assure that the Company has effective internal control system and improvement as advised by the independent internal auditor for the maximum benefits of corporate management.

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96

Related Transactions

Related Transactions Value and outstanding of related transactions and persons that may have conflict of interest Related Person/ Juristic Person

1. Growed Yotha Co., Ltd.

contractor and materials distributor

99 Annual Report 2007

Relationship

- Subsidiary, holding 99.99 percent of registered capital

Transaction

Value of Related Transaction (Million Baht)

Outstanding (Million Baht) As of 31 December

Category

(1.1) The Company - purchase (construction materials) - purchase (construction) - Account payable - Retention - Deposit guarantee for bank overdraft

2006

2007

91.45

42.41 - - -

137.42

31.02 - - -

2006

2007

-

- 9.14 6.45 5.00

-

- 11.17 4.95 5.00

Reason of the Transaction

Prinsiri Public Company Limited holds shares of Growed Yotha Co., Ltd., as to have this subsidiary as its business unit in material cost control for the Company’s project development and for potential competition. The company purchases materials, such as cement, door panel, wooden strips, steel, floor panels and etc, and employs Growed Yotha Co., Ltd., as one of its contractors. Offered selling price and construction cost of Growed Yotha Co., Ltd. , is similar to that proposed to other contractors.

However, price of some category of materials sold to the Company is slightly lower than sold to other contractors. That is because Growed Yotha is the Company’s subsidiary. Future material purchase is expected.

The aforementioned account payable was incurred by those above purchase. Growed Yotha Co., Ltd., provided payment term of 3060 days as common payment manner in trading business.

Such retention is incurred from employing Growed Yotha Co., Ltd., for construction such as roofing work. The retention is received according to the contract of contractor at the normal rate like other contractors of the Company. Since Growed Yotha is the Company’s subsidiary, this transaction is expected to post.

The Audit Committee has examined that mentioned transactions of paid, account payable and retention and determined that they are reasonable for business of the Company and Growed Yotha Co., Ltd., is the Company’s subsidiary.

Deposit guarantee for bank overdraft is a transaction in the year 2006. The Company uses a land plot of 275 war squares in Soi Jamjan (the Company’s After-Sale Service Office) as deposit guarantee for bank overdraft for Growed Yotha Co., Ltd., in order to increase the subsidiary’s liquidity. Since the subsidiary does not have any asset worth for deposit guarantee for bank overdraft, the Company has to use that land to deposit for its subsidiary. This transaction will appear in the future because Growed Yotha is the Company’s subsidiary.

The Audit Committee has examined this transaction and determined that Deposit guarantee for bank overdraft for Growed Yotha Co., Ltd., provided liquidity to the Company’s Subsidiary than did not have any asset to do that itself. In addition, the Company holds 99.99 percent of this subsidiary’s shares.

Related Transactions

Related Person/ Juristic Person

2. Thai Chinda Curtain Company Litmited

Distributor of curtains, blinds, wallpapers and furniture

Relationship

Mr. Santi Kovitchindachai is the authorized director of this company. He is a brother of Ms. Siriluck Kovitchidachai. At present he holds the Company’s shares at 14.18 percent of registered capital.

Transaction

Value of Related Transaction (Million Baht)

Outstanding (Million Baht) As of 31 December

Category 2006

2007

(1.2) Prinventure Company Limited -purchase (construction materials) -purchase (construction) -Account payable -Retention

33.21

9.20 - -

(2.1) The Company - purchase (curtain) - Account payable - Retention

20.75 - -

Reason of the Transaction

2006

2007

35.50

22.69 - -

-

- 4.63 0.46

-

- 1.02 1.25

The reason in consideration of the Audit Committee is like above explanation (1.1) in terms of material purchase, contractor employment, account payable and retention because Growed Yotha Coompany Limited and Prinventure Company Limited are the Company’s subsidiaries. Future purchase of materials is expected to continue.

7.56 - -

- 2.09 -

- 1.19 0.14

The Company purchased curtain, blinds and wallpaper from Thai Chinda Curtain Company Limited. The sold price is similar to that offered by other suppliers. The Company has purchase with this company for years because of product’s quality, especially its curtain that is well known for the sewing quality. In addition product delivery is on time. Therefore, this transaction is expected to appear in the future.

Account payable was incurred by the above purchase. Thai Chinda Curtain Company Limited provides term of payment at 30 – 60 day, which is normal practice in trading business.

The retention from the employing Thai Chinda Curtain Company Limited to produce and install the curtain for the Company is common amount that the Company has to keep by the contract.

The percent of retention is the same as other contractors because the purchase price is similar to the market. The Company has purchased goods from this supplier for many years because its products are good quality and neat. The delivery is on time. Therefore future purchase of materials is expected to continue and transaction of retention will exist.

The Audit Committed has examined the transaction and determined it to be reasonable.

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100

Related Transactions

Related Person/

Relationship

Juristic Person

3. Prinventure Company Limited

Real Estate developer, housing with land and condominium

Subsidiary company of Prinsiri PCL, which holdings of 51 percent of registered capital

101 Annual Report 2007

Transaction

Value of Related Transaction (Million Baht)

Outstanding (Million Baht) As of 31 December

Category

(3.1) The Company - Short-term borrowing - Interest receivable - Interest earned - Management revenue - Other income - Loan guarantee

2006

2007

2006

208.38 - 14.08 10.47 - -

6.72 248.28 255.00 - 15.88 39.08 23.62 - - 26.41 - - 0.26 - - - 510.73 349.12

Reason of the Transaction

2007 Prinventure Co., Ltd. is a joint venture company between the Company and Univenture PCL. The Company held 51% of registered capital. The short-term loan is to increase liquidity of Prinventure according to the joint venture contract stated that Prinventure can borrow loan from shareholder at proportion of holdings but not excess of 500 million Baht with interest at MLR+2 per year. Since the borrowed amount is lower than the maximum loan, that borrowing amount is expected to continue.

Interest receivable and interest earned from the short-term loan is in compliance with the joint venture contract.

The Audit Committed has examined the transaction and determined it to be reasonable by percentage of holding and will increase liquidity of Prinventure. Moreover, the interest rate of the market rate, and maximizes benefit to the Company and subsidiary.

The Company’s management revenue is in compliance with the joint venture contract. The management charge is 350,000 Baht per month per project. The selling management is 2 percent of sales. Since Prinventure is the Company’s subsidiary, this transaction will appear in the future.

Other income of the Company is the charge from gardening service provided to Prinventure Company Limited. The charge fee is similar to other contractors. The Company has knowledge, skills and experience with gardening. Then it can provide good and elaborate garden as planned for each project. Since this is the subsidiary of the Company, this transaction is expected to continue.

The Audit Committed has examined the transaction and determined it to be reasonable.

The charge of management is in accordance with the joint venture contract. Other income is normal transaction because the service is similar to the market price. This transaction benefits to the Company and subsidiary.

Related Transactions

Related Person/

Transaction

Relationship

Juristic Person

Reason of the Transaction

Category 2006

4. Mr. Santi

Mr. Santi Kovitchindachai is Ms. Siriluck ‘s brother. He holds 14.18 percent of paid up capital.

(4.1) The Company - Short-term borrowing - Interest expense

Kovitchindachai

Outstanding (Million Baht) As of 31 December

Value of Related Transaction (Million Baht)

2007

20.00 0.70

- 0.28

2006

2007

20.00 -

Loan guarantee is the transaction since 2005 as deposit guarantee for bank overdraft, aval, longterm loan and letter of guarantee. It is guarantee by share proportion according to the joint venture contract. This guarantee is for project development of Prinventure Company Limited.

Since that company is the Company’s subsidiary, this transaction is expected to continue.

The Audit Committed has examined the transaction and determined it to be reasonable by percentage of holding and will increase liquidity of Prinventure for project development. This maximizes benefit to the Company and subsidiary.

The Company has borrow loan from Mr. Santi - Kovitchindachai in form of promissory note that - has to be paid when request. In 2006 and 2007 the loan interest was calculated at the rate of 5.00 per year. This amount of money is used in the Company’s cash flow and buying land. In the future, if the interest of Mr. Santi Kovitchindachai is not higher than other promissory note issued by other issuer of the Company, this transaction will continue.

Interest expense was incurred by above mentioned short-term loan of promissory note which offering lower rate when comparing with other issuers.

The Audit Committee has examined the transaction and determined that short-term borrowing and interest expense is reasonable. It is borrowing for the Company’s cash flow and land purchase. In addition, the interest rate is lower than other issuers. This benefits the Company.

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102

Related Transactions

Related Person/

Relationship

Juristic Person

Transaction

Reason of the Transaction

Category 2006

5. Ms. Siriluck Kovitchidachai

Director / Chairman of Executive Committee / Managing Director and Shareholder She holds 23.22 percent of paid up capital.

(5.1) The Company - Short-term borrowing - Interest expense

6. Mr. Sakol Pao-in

Director / Executive Director / Assistant Managing Director – Administration and Shareholder He holds 0.19 percent of paid up capital.

(6.1) The Company - sell (condominium)

103 Annual Report 2007

Outstanding (Million Baht) As of 31 December

Value of Related Transaction (Million Baht) 2007

2006

2007

- -

50.00 0.12

- -

The Company has borrow loan from Ms. Siriluck 50.00 Kovitchidachai in form of promissory note that has - to be paid when request. In 2007 the loan interest was calculated at the rate of 5.00 per year. This amount of money is used in the Company’s cash flow and buying land. In the future, if the interest of Mr. Santi Kovitchindachai is not higher than other promissory note issued by other issuer of the Company, this transaction will continue.

Interest expense was incurred by above mentioned short-term loan of promissory note which offering lower rate when comparing with other issuers.

The Audit Committee has examined the transaction and determined that short-term borrowing and interest expense is reasonable. It is borrowing for the Company’s cash flow and land purchase. In addition, the interest rate is lower than other issuers. This benefits the Company.

2.65

-

-

The Company sold two units of the Pulse, - Ladprao 44 to Mr. Sakol Pao-in. The selling price was under general conditions with the Company’s discount rate for VIP customers as offered to employees of commercial banks that provide loan to the Company or contact civil officers.

The Audit Committee has examined the sold transaction and determined that it is reasonable because the selling was performed with normal price and conditions. The discount rate is as same as that offered to other VIP customers.

Related Transactions

Related Person/ Juristic Person

Relationship

Transaction

Value of Related Transaction (Million Baht)

Category 2006

7. CNSPR (Thailand) Company Limited

The Company holds shares, representing 99.97 percent of the registered capital.

8. Ms. Nipha Assistant Managing Aphiratanarungrueang Director of Organization Development She holds shares, representing 0.78 percent of the registered capital.

Outstanding (Million Baht) As of 31 December

2007

(7.1) The Company - Short-Term Borrowing - Interest expense - Interest income

- - -

56.00 - 2.08

(5.1) The Company - Reimbursement - Advance payment

- -

18.76 18.76

2006

Reason of the Transaction

2007

- 56.00 Prinsiri Public Company Limited - 2.08 established CNSPR (Thailand) Company - - Limited in order to let this company be one of its business units to sell and lease real estate property. In addition, the new company will enhance the Company’s competitive ability. The short-term loan is to increase liquidity of CNSPR (Thailand) Company Limited and to buy properties.

The interest of loan is the rate of MLR per year. Since it is the Company’s subsidiary, this transaction is expected to continue.

Interest receivable and interest earned from the short-term loan is in compliance with the normal conditions of loan.

The Audit Committed has examined the transaction of short-term borrowing, interest expense and interest income and determined it to be reasonable. It is normal loan to increase liquidity of cash flow and to buy property. It is to conduct business of the subsidiary and to be in accordance with the objective of the unit establishment. In addition, the interest rate is same as that in the market. This transaction benefits to both the Company and subsidiary.

In 2007, the Company received and refund - - advance payment from and to Ms. Nipha - - Aphiratanarungrueang as down payment of land purchase of the Company that she paid in advance for the Company. That was because of case emergency. That advance payment was reimbursed to her by the Company in short time. In the future, this transaction may occur by case and emergency.

The Audit Committee has examined the transaction of advance payment and determined it is reasonable. There is no interest or commission and for liquidity of land purchase which benefits the Company.

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104

Related Transactions Measures / procedures of related transaction

The Board of Directors agreed that related transactions must be approved by the Audit Committee. However, such related transactions must be carried out to the best interests of the Company.

Prices for related transactions are made in line of prevailing market prices which can be compared to those offered by other suppliers. The terms of related transactions are to be consistent with normal trade practices. Other suppliers are also offered the same and equal opportunity to submit their prices.

The Company strictly complies with the Securities and Stock Exchange Act including regulations set by the Stock Exchange of Thailand regarding related transactions and trading of company assets. Those with potential conflicts of interests for connected transactions are not granted to vote in those transactions and are to report this information to the Board of Directors.

Policy or trend of related transactions

The Company has definitely set a related transaction approval procedure and a related person.

The audit committee will be the person who gives comment on the necessity, reason, and suitability of the transaction by stating the conditions to be in accordance with the standard price in the market which can be compared with others’. The company will have the audit committee or an independent expert to express the opinion in the transaction occurred in order to use for further consideration of the committee and shareholders.

For future related transactions, such as purchase of curtain, blinds and wallpaper with Thai Chinda Co., Ltd, depend on reason and necessity of the Company. Price offered and paid for these transactions must follow the market standard and is fair. The Audit Committee will be the person who comments on such posting and compares the price with other suppliers.

In case a related transaction occurs with an executive and a group of conflict of interest will benefit in some way shall not have a hand in approval any mentioned transaction. The audit committee will be the person who gives comment on the necessity, reason, and suitability of the transaction by stating the conditions to be in accordance with the standard price in the market which can be compared with others’.

Measures to protect public investors

In order to protect public investors, if in the future there is any related transaction that occur with conflict of interest, benefits or possible conflict of interest, the Company will arrange that transaction through the meeting in which the Audit Committee attend. This will let the Committee to oversee such transaction to be fair and reasonable. In case that the audit committee is not familiar with the transaction details, the company will instead have an independent expert or the Company’s accounting auditor to express the opinion in the transaction occurred in order to use for further consideration of the committee and shareholder. The Board of Directors will ensure the company abides by security law and SET regulation, announcement, and declaration as well as follow the obligation regarding the information disclosure of the connected transaction, the asset obtained or distributed according to the accounting standard set by the accountant association. However, this excludes related transactions that are common business transaction and their policy of price setting and conditions is the market price or does not differ from the third party.

The Company will disclose the related transaction in the remarks of the audited financial statements. Its policy is to post related transaction only when it involves with main business. At present the Company has the Audit Committee to monitor relate transactions and internal control system for corporate transparency and enhancement of investors’ trust.

Moreover, the Company adopts the principal of decreasing all business risks by having the Risk Management Committee oversees this in other way.

105 Annual Report 2007

Analysis of Financial Position and Operation Results

Analysis of Financial Position and Operation Results

Analysis of Operation Results

Overview picture of previous performance

During the year of 2007, there were dramatic changes in politics, economic recession, and increase of petrol price and loan interest influences. Therefore consumers had to be cautious with money spending and suspended expenses. Those mentioned factors affected on overall real estate market as well.

Competition in the housing development sector became more serious than the previous year. Many developers set their selling prices in 2007 lower than that in 2006. That was because purchasers had lower budget and the entrepreneurs want to encourage the target group to buy their products in recession period.

Under negative impact of many related factors and increase cost of construction materials in 2007, the Company, as one of real estate developers, could not avoid from such difficulties.

Major revenue of the Company or more than 95 percent of revenue comes from property sales.

In 2005-2006, the Company had revenue from selling property of Bath 2,241.01 million, and Bath 2,862.65 million respectively. The revenue in 2006 increased from that in 2005 27.74 percent. The gross profit ratio was 30.92 percent and 32.70 percent respectively. Being affected from related factors and strict inspection of product quality, in 2007 the Company had revenue from selling property of Baht 2,523.84 million, decreased from 2006 11.84 percent. The ratio of gross profit was 23.32 percent. In 2007, the Company did not have revenue from selling condominium because the new projects were opened and have been under construction. Those four projects are the Complete Naratiwasrajchanakarin, the Complete Rajchaprarop, the Pulse Phaholyothin 37, and Smart Condo Rama II. Regarding the net profit margin of the Company, in 2007 it was 2.99 percent which dropped from 15.13 percent in 2006.

The decrease of net profit margin was caused by many new projects opened in 2007. The total worth of those projects was Baht 12,350 million, increased 80 percent from 2006. Therefore, the Company had higher costs of sales and administration. According to the accounting standards, such expenses could not recognized along with the future realized revenue. Hence, the ratio of net profit margin dramatically dropped when comparing with that in 2006.

In 2007 the Company and subsidiaries opened 11 new projects. As of 31 December 2007, the Company had active 23 projects. Product sale value in 2007 was Baht 12,350.02 million. Total contract value in 2007 was Baht 6,671.97 million or 54.02 percent of available product sale value in active projects.

Revenue

Major revenue of the Company and subsidiaries are from revenue of real estate selling for allocating housing and condominium, representing around 96.00 – 98.00 percent of total revenue. In 2005, 2006 and 2007 the Company and subsidiaries had revenue property sale of Baht 2,241.01 million, Baht 2,862.65 million, and Baht 2,523.84 million respectively. It increased 27.74 percent and decreased 11.84 percent respectively. The revenue from selling in 2006 increased because housing

109 Annual Report 2007

Analysis of Financial Position and Operation Results

market grew although during the year there were many factors affecting real estate development industry.

This should be a result of customers’ need that was quite high and progressive. In addition, the Company and subsidiaries opened more projects and the products had higher value every year. The Company also has developed and controlled its project quality continuously in order to meet customers’ need. The customers recognize and trust in the Company’s products that provide utilization function, modern look, high quality and standard. The decrease of revenue in 2007 was caused by dramatic changes in politics, economic recession, and increase of petrol price and loan interest influences. Most of consumers became more cautious with money spending and suspended their payment. As a result, the oval real estate market had slow growth. In addition, the Company performed strict inspection of its product quality.

The Company and subsidiaries has policy to recognize revenue from real estate selling on product delivery (when ownership is transferred). Construction period of each project will be varying depending on type of project, size, design and etc. A single detached house may take 6-7 months. A row of townhouse and home office may need construction duration of 7-8 months. Construction of condominium may take 11-20 months. Therefore, quarterly revenue may shift at some level, depending on type of developing project.

In 2005-2007, most revenue from selling property was from single detached house, especially single detached house for medium market, which was the biggest revenue of that period. The revenues of each housing type are shown below.

Revenue

Developer

detached house for upper market Prinsiri detached house/ semi detached Prinsiri / Prinventure house for middle market Townhouse/Home office

Prinsiri / Prinventure

Condominium

Prinsiri

Land

Prinsiri / CNSPR

Total revenue from real estate Prinsiri / Prinventure

2005

2006

2007

MB

%

MB

%

MB

%

428.38

18.42

127.36

4.30

121.22

4.64

1,312.46

56.44

1,526.09

51.55

1,321.88

50.62

419.80

18.05

890.65

30.08

1,080.74

41.39

-

-

318.56

10.76

-

-

80.38

3.46

-

-

-

-

2,241.02

96.37

2,862.66

96.69

2,523.84

96.65

Revenue from selling goods

Growed Yotha Group

71.39

3.07

86.07

2.91

61.62

2.36

Other revenues

Company / Subsidiaries

12.94

0.56

11.79

0.40

25.78

0.99

Total revenues

2,325.35

100.00

2,960.52

100.00

2,611.24

100.00

The Company had revenue from selling property of single detached house for upper market of Baht 428.38 million Baht in 2005, Baht 127.36 million in 2006, and Baht 121.22 million respectively. It decreased 70.27 percent and 4.82 percent respectively. During that period, the Company had developed only one project of single detached house for upper market. It was Sirithawara Oriental project of two-story single detached house, located on Praditmanuntham Road (near Ramintra Express way). The project size is 30-2-44 rai with 59 units. The project values Baht 1,144.83 million. As of 31 December 2007 the Company transferred ownership of 38 units, valued Baht 671.16 million. Selling price of the project is Baht 13.00 – 40.00 million per unit.

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Analysis of Financial Position and Operation Results

The Company and subsidiaries had revenue from selling property of single detached house for middle market of Baht 1,312.46 million in 2005, Baht 1,526.09 million in 2006, and Baht 1,321.88 million respectively. It increased 16.28 percent and decreased 13.38 percent respectively. The increase of revenue from selling of single detached house/semi detached house for middle market in 2006 was a result of expansion in real estate industry, especially in housing sector. Products of single house/semi detached house for middle market grew in 2006. For the year of 2007, dramatic changes in politics, economic recession, and increase of petrol price and loan interest influence most of consumers to buy cheaper products. Therefore, townhouse/home office offering lower price than single house/semi detached house in the middle market, got more attention.

Revenue from selling property of townhouse/home office in 2005, 2006 and 2007 were Baht 419.80 million, Baht 890.65 million and Baht 1,080.74 million respectively. It increased 112.16 percent and 21.34 percent respectively. The revenue of selling townhouse/home office increased because the products were interesting for most of customers. The demand of these products has gradually increased.

The Company received the first revenue from selling property of condominium in 2006. Since the number of customers demanding housing in form of condominium has gradually increased, the Company has developed condominium projects to meet such demand. The first and only one condominium project in 2006 named the Pulse Condominium Ladprao 44, 8 stories of 202 units, located in 1-2-0 rai area in Ladprao 44. The project values Baht 325.25 million. This project was to finish construction before selling. Therefore in 2006 the Company sold the units and could transfer ownership as well as recognized revenue in the same year. In 2007, the Company did not have revenue from selling condominium because most of the Pulse Condominium Ladprao 44’s units were transferred and the revenue was recognized in 2006. In addition the new opened condominium projects have been under construction. Those four projects are the Complete Naratiwasrajchanakarin, the Complete Rajchaprarop, the Pulse Phaholyothin 37, and Smart Condo Rama II.

The Company had revenue from selling construction materials through Growed Yotha Group Company Limited, the Company’s subsidiary. Most of goods were sold to the Company and its contractors.

It was 3.00 percent of total revenue. In 2005, 2006, and 2007 the Company and subsidiaries had revenue from selling materials of Baht 71.39 million, Baht 86.07 million, and Baht 61.62 million respectively. It increased 20.56 percent and decreased 28.41 respectively. It increased in 2006 because the Company developed new projects and more value products. Therefore, the subsidiary could sell more construction materials to the Company’s contractors. It decreased in 2007 because of consolidated financial statements. In 2007, Growed Yotha Group Company Limited sold most of its goods to the Company and subsidiaries.

In addition to revenue from selling property and revenue from selling goods, the Company and subsidiaries have revenue from waived deposit, which incurred when the customers did not make buying contract at due time, left down payment, which some customers paid down installments and then stopped without notice or contacting, and penalty of late construction paid by the Company’s contractors.

However, this revenue was not major revenue of the Company and subsidiaries.

111 Annual Report 2007

Analysis of Financial Position and Operation Results

Cost of Sales

Cost of sales for real estate consists of land cost, developing cost, construction cost, related cost of project and paid interest. The Company and subsidiaries had cost of sales of Baht 1,548.09 million in 2005, Baht 1,926.62 million in 2006 and Baht 1,935.38 million in 2007, representing 69.08 percent, 67.30 percent and 76.68 percent of revenue from selling property respectively. The ratio between costs of sales to revenue from selling property has progressively decreased because of following reasons.

(1) Good land for project development with reasonable price

Since plot of land plays major role in project development and construction. It normally 40 – 50 percent of total product cost. The Company has policy to purchase only land with good potential that can be developed at once. Factors considered in buying consists of location, cost of land, city plan, stipulation of laws, trend of housing expansion, development plan, city expansion, competitors and etc.

The Company will conduct feasibility study every time before making decision in order to have sufficient information for consideration of good land and good price.

2) Effective management of construction cost control

The Company manages cost control through procedures such as developing construction technique and technology, having Growed Yotha Group Company Limited (the Company’s subsidiary) as a Company’s business unit to control construction material cost for the Company’s developing projects. The subsidiary also serves as contractor and construction material supplier for the Company and the Company’s contractors.

Although in 2007, the Company and subsidiaries could control land cost, developing cost, construction cost, related cost of project and paid interest to be similar to those in 2005 and 2006, the Company faced difficulties from slow growth of real estate market in 2007 affecting on severe competition in housing sector. Many developers set their product price in 2007 lower than that in 2006 because prospects had lower buying budget and they wanted to encourage customers to buy during the recession period. As a result, the Company and subsidiaries had to set the selling price in 2007 lower than that in 2006. Then the ratio of cost of sales to revenue from selling goods in 2007 increased as well.

The cost of sales incurred from Growed Yotha Group Company Limited, the Company’s subsidiary, was construction materials sold to all contractors of the Company. In 2005, 2006 and 2007, the company had cost of sales of Baht 64.10 million, Baht 75.00 million and Baht 54.55 million respectively, representing 89.78 percent, 87.14 percent and 88.52 percent of revenue from selling goods respectively. The ratio of cost of sales to revenue from selling goods slightly decreased in 2006 and increased in 2007 because the Company had number of ongoing projects and consecutive period.

Then the subsidiaries of the Company had quite high power in negotiation with building material suppliers.

Selling and administrative expenses

In 2005, 2006 and 2007 the Company and subsidiaries had cost of selling and administrative expenses of Baht 262.31 million, Baht 356.69 million, and Baht 461.36 million respectively. It increased 35.98 percent and 29.34 percent respectively. The cost of selling and administrative expenses increased each year because major expenses of employee’s salary and bonus increased. That was a result

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Analysis of Financial Position and Operation Results

from recruiting more employees to support expansion of the Company. Cost of after sale services increased because the Company and subsidiaries had more new projects. Cost of public advertisement and promotion increased. During previous years the Company opened more projects that needed to be more advertised to consumers and target groups. Although selling expenses became higher every year, when comparing with proportion of total selling and administrative expenses, it was shown that in 2005, 2006 and 2007 the proportion was 11.28 percent, 12.05 percent and 17.67 percent of total revenue. It indicated that in 2005-2006 the Company and subsidiaries had similar proportion of cost of selling and administrative expenses to total revenue. The proportion increased in 2007, representing 5.62 from 2006. That was because the Company and subsidiaries opened many new projects in 2007, worth Baht 12,350 million, which increased 80 percent from 2006. Therefore, the Company had more expenses in selling and administration. Regarding to the accounting standards, such expenses could not be recognized along with the future realized revenue.

Profit

In 2005, 2006 and 2007, the Company and subsidiaries had gross profit margin of 30.28 percent, 32.12 percent and 23.03 percent respectively. The Company and subsidiaries had better gross profit margin. That is a result from continuous decrease of cost of sales as explained in the subject B: Cost of Sales. In 2007, the Company and subsidiaries had less gross profit because the sale price in 2007 was lower than that in 2006 as explained in the subject B: Cost of Sales.

In 2005, 2006 and 2007, the Company and subsidiaries had profit margin from operating of 19.41 percent, 20.36 percent and 6.12 percent respectively. The profit margin increased and decreased because of operating as explained in the subject C: Cost of Selling and Administrative Expenses.

In 2005, 2006 and 2007, the Company and subsidiaries had net profit of Baht 304.75 million, Baht 447.80 million and Baht 77.98 million respectively. Proportion of net profit was 13.11 percent, 15.13 percent and 2.99 percent respectively. The increase and decrease of net profit came from the abovementioned in the subject A: Revenues, B: Cost of Sales and C: Cost of Selling and Administrative Expenses.

Return on equity

In 2005, 2006 and 2007, the Company and subsidiaries had return on equity of 27.23 percent, 27.51 percent and 3.87 percent. In 2005 and 2006 the Company and subsidiaries had progressive rate of return on equity because the Company had net profit every year. In 2007 the return on equity of the Company and subsidiaries dropped a lot because the revenues and profits decreased as explained in subject A: Revenues and D: Profit.

In addition in 2007 the Company issued 355 million ordinary shares offered for sale to the Company’s shareholders, at the ratio of two ordinary shares per one new share. A par value of Baht 1 per share was offered at the price of Baht 1.50. Therefore, the Company currently has its registered capital of Baht 1,005 million, from Baht 670 million.

113 Annual Report 2007

Analysis of Financial Position and Operation Results

Analysis of Financial Position

Assets

The Company and subsidiaries had total assets of Baht 3,196.99 million as of the end of 2005, Baht 4,395.97 million as of the end of 2006 and Baht 5,848.52 million as of the end of 2007. As of 31 December 2007, the total assets of the Company and subsidiaries consisted of current assets and noncurrent assets of Baht 5,577.31 million and Baht 271.21 million respectively, representing 95.36 and 4.64 percent of the total assets respectively. The core assets of the Company were inventory. As of 31 December 2007, the Company and subsidiaries had inventory of Baht 4,809.34 million or 82.23 percent of the total assets.

Temporary investment

All of temporary investment of the Company and subsidiaries was investment in open ended fund – debt securities because at that time the Company’s liquidity was too high. Then the Company invested excess cash for benefits. At the end of 2005, 2006, and 2007 the investment in open ended fund – debt securities was Baht 139.14 million, Baht 26.98 million, and Baht 43.06 million respectively. As of 31 December 2006 the investment amount was decreased from 2005 of 112.16 million Baht, representing decrease of 80.61 percent. That was because in 2006 the Company developed new project that needed capital for project developing. In addition the Company had to sell that investment in order to lend the subsidiaries loan for project development. In 2007, the whole temporary investment was the investment in open ended fund – debt securities of Growed Yotha Group Company Limited (the Company’s subsidiary).

Accounts receivable - net

As of the end of 2005 and 2006 the Company and subsidiaries had net accounts receivable of Baht 26.16 million and Baht 30.27 million respectively. Most of increase accounts receivable was accounts receivable during 181-360 days. Most were accounts receivable of Growed Yotha Group Company Limited, which sell construction materials to contractors of the Company and subsidiaries. As of 31 December 2007, the Company and subsidiaries had net accounts receivable of Baht 16.17 million.

Most of decrease accounts receivable were those during 1-90 days, decrease from the end of 2006 at 46.58 percent. Most were accounts receivable of Growed Yotha Group Company Limited. The amount dropped dramatically in 2007 because the Company improved its payment system for materials bought from Growed Yotha Group Company Limited. If the contractors buying such building materials were the Company’s contractors, the Company was be able to deduct amount from their construction payment to pay to Yotha Group Company Limited directly. Those contractors submitted the Company their consent for deduction of payment.

However, as of December 31, 2007, the Company and subsidiaries increase allowance for doubtful accounts. Therefore, the net of accounts receivables increased. Details of accounts receivable as of the end of 2005, 2006 and 2007 are shown below.

Annual Report 2007

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Analysis of Financial Position and Operation Results

(Unit: Baht) Accounts receivable Specified During 1 – 90 days During 91 – 180 days During 181 – 360 days More than 360 days Total Minus – Doubtful accounts Accounts receivable - net

As of 31 December 2005 7,325,404.90 15,506,931.13 2,976,951.13 612,629.15 2,571,065.57 28,992,981.88 2,836,097.26 26,156,884.62

As of 31 December 2006 8,279,672.96 9,369,217.56 3,859,471.33 8,762,210.80 3,332,119.87 33,602,692.52 3,332,119.87 30,270,572.65

As of 31 December 2007 1,689,212.32 3,040,645.17 5,652,479.51 6,697,043.82 7,030,590.20 24,109,971.02 7,935,593.11 16,174,377.91

The Company and subsidiaries had policy to reserve for doubtful accounts by evaluating from accounts receivable that the Company and subsidiaries may not be able to be collect and from the payment history. As at the end of 2005, 2006 and 2007, the Company and subsidiaries had doubtful accounts totally Baht 2.84 million, Baht 3.33 million and Baht 7.94 million respectively. The management paid attention on this increase amount. As a result, in 2007 the Company improved the payment process for building materials paid to Growed Yotha Group Company Limited, as explained above. In case it is possible that an account may be doubtful, the Company would set up reserve for that loss in order to report actual financial statements. However, amount of doubtful accounts is not much when comparing with total revenue of the Company. At the end of 2005, 2006 and 2007, the proportion was 0.12 percent, 0.11 percent and 0.30 percent respectively.

The Company and subsidiaries has accounts receivable more than 360 days at the end of 2005, 2006 and 2007 of Baht 2.57 million, Baht 3.33 million and Baht 7.03 million respectively. They are building material buyers of Growed Yotha Group Company Limited as abovementioned. At present the management concentrates on administration of accounts receivable by setting up clear policy on payment credit, aging and legal action for payment from those doubtful accounts. In addition, the Company improves the term of payment paid to the Company’s contractors. The company can deduct cost of materials, which the contractors bought from Growed Yotha Group Company Limited, from the due building payment paid to such contractors.

Payment of active projects

As of December 31, 2007, the Company had money paid on due of accumulated accounts receivable by installments of Baht 8,218.46 million, representing 62.52 percent of sold project. The amount was accumulated installment paid of Baht 8,215.86 million, representing 62.50 percent of due accumulative payment. Accrual accumulated amount was Baht 2.60 million, representing 0.02 percent of due accumulated amount. Remaining amount that is not on due is Baht 4,926.83 million, representing 37.48 percent of sold value. Details are below.

115 Annual Report 2007

Analysis of Financial Position and Operation Results

Table of payment of active projects as of December 31, 2007 (Unit : million Baht)

Accumulated payment on due Project Name

Sold Value Amount

Paid accumulated payment

Accrual accumulated payment

Balance waiting for on due

% of % of % of % of accumulated sold Amount accumulate Amount d payment payment Amount sold value value on due on due

Prinsiri Nawamin

697.32

697.32 100.00

697.32

100.00

-

-

-

-

Prinsiri Nawamin

398.09

398.09 100.00

398.09

100.00

-

-

-

-

Prinyada Chamchan

148.64

148.64 100.00

148.24

99.73

0.40

0.27

-

-

Sirithawara Oriental

687.16

676.16

98.40

678.16

98.69

-2.00

-0.29

11.00

1.60

Prinyada Theparak Phase 1

282.89

279.04

98.64

279.04

98.64

-

-

3.85

1.36

Prinyada Theparak Phase 2

301.44

301.44 100.00

301.44

100.00

-

-

-

-

1,035.48 1,035.48 100.00 1,035.48

100.00

-

-

-

-

Prinyaluck Rama 2

532.79

532.79 100.00

532.79

100.00

-

-

-

-

Prinyaluck Exclusive

210.44

210.44 100.00

210.44

100.00

-

-

-

-

Prinyada Rama 2

472.79

472.79 100.00

472.79

100.00

-

-

-

-

Prinyaluck Intharaluk

193.25

193.25 100.00

193.25

100.00

-

-

-

-

The Pulse condominium

320.85

318.58

99.29

318.58

99.29

-

-

2.27

0.71

Prinyada Kaset-Nawamin

737.20

667.60

90.56

667.17

90.50

0.43

0.06

69.60

9.44

Prinyaluck Wongwan Sathorn

402.44

402.44 100.00

402.44

100.00

-

-

-

-

Prinyaluck Petchkasem 69

428.41

264.57

61.76

264.46

61.73

0.11

0.03

163.84

38.24

Prinyada Kanchanapisek

207.74

175.58

84.52

175.58

84.52

-

-

32.16

15.48

Prinyaluck Eakachai - Bangbon

328.61

211.99

64.51

209.95

63.89

2.04

0.62

116.62

35.49

1,529.79

105.71

6.91

105.70

6.91

0.01

0.00 1,424.08

93.09

The Complete Naratiwasrajchanakarin

449.75

26.95

5.99

26.43

5.88

0.52

0.12

422.80

94.01

The Pulse Phaholyothin 37

600.67

41.47

6.90

41.30

6.88

0.17

0.03

559.20

93.10

Prinyaluck Light Wongwaen-Sathorn

220.74

23.82

10.79

23.81

10.79

0.01

0.00

196.92

89.21

Prinyaluck Light Rama V

400.80

10.11

2.52

9.78

2.44

0.33

0.08

390.69

97.48

Prinyada Light Rama V

266.52

7.61

2.86

7.23

2.71

0.38

0.14

258.91

97.14

Smart Condo Rama II

914.86

22.03

2.41

22.05

2.41

-0.02

0.00

892.83

97.59

Euro Prime

233.08

209.81

90.02

209.41

89.84

0.40

0.17

23.27

9.98

Euro Nova.

364.70

218.87

60.01

218.92

60.03

-0.05

-0.01

145.83

39.99

Northern Prime (Phase 1)

395.90

378.66

95.65

378.73

95.66

-0.07

-0.02

17.24

4.35

Northern Nova (Phase 2)

241.55

183.37

75.91

187.37

75.91

-

-

58.18

24.09

Northern Prime (Phase 3)

141.39

3.85

2.72

3.91

2.77

-0.06

-0.04

137.54

91.28

13,145.29

8,218.46

62.52

8,215.86

62.50

2.60

0.02

4,926.83

37.48

Prinyada Wongwan Sathorn

The Complete Rajchaprarop

Total

Annual Report 2007

116

Analysis of Financial Position and Operation Results

Table of accrual accumulated accounts receivable as of December 31, 2007

(Unit : million Baht) Accumulated Accrual Accrual Accrual Accrual accounts More than 90 1-30 days 31-60 days 61-90 days Project Name receivable days No. Amount No. Amount No. Amount No. Amount No. Amount 1 0.40 - - - - - - 1 0.40 Prinyada Chamchan Prinyada Kaset-Nawamin 2 0.43 1 0.21 1 0.22 - - - - Prinyaluck Petchkasem 69 2 0.11 1 0.03 1 0.07 - - - - Prinyaluck Eakachai - Bangbon 7 2.04 5 1.80 2 0.24 - - - - The Complete Rajchaprarop 1 0.01 1 0.01 - - - - - - The Complete 13 0.52 7 0.23 2 0.07 2 0.09 2 0.14 Naratiwasrajchanakarin The Pulse Phaholyothin 37 5 0.17 5 0.17 - - - - - - Prinyaluck Light Rama V 9 0.33 6 0.14 3 0.19 - - - - Prinyada Light Rama V 7 0.38 3 0.12 4 0.26 - - - - Euro Prime 1 0.04 - - - - - - 1 0.04 Total 48 4.79 29 2.71 13 1.05 2 0.09 4 0.94

Note Data was collected from installment on due. The Company did not transfer ownership to accounts receivable. Accrual amount above differed from accrual accounts receivable in notes to financial statements because it was recognized after the construction was completed and transferred ownership to the purchasers.

This collection will then higher than accrual accounts receivable in financial statements.

Inventory

At the end of 2005, 2006 and 2007, the Company and subsidiaries had inventory of Baht 2,617.64 million, Baht 3,873.10 million and Baht 4,809.34 million respectively. These figures showed an increase of 47.96 percent and 24.17 percent accordingly. The trend of quantity was to increase by more projects of the Company and subsidiaries and the policy to sell finished houses and revenue recognition when ownership transfers. As a result, the Company and subsidiary had higher number of inventory. Details of the inventory as of the end of 2005, 2006 and 2007 are shown in below table.

(Unit : Baht) Description Finished Goods - House for sale - Construction materials Land and land developing cost Ongoing construction Related expenses of project Accrued interest payable Total

117 Annual Report 2007

As of December 31, 2005

- 489,623.55 1,714,309,008.96 820,923,615.16 18,726,872.77 63,186,201.80 2,617,635,322.24

As of December 31, 2006

46,164,934.34 1,389,115.17 2,426,041,071.82 1,274,716,316.12 26,709,676.52 98,082,011.27 3,873,103,125.24

As of December 31, 2007

78,829,263.90 1,416,865.78 2,283,053,469.24 2,237,706,065.25 34,850,218.74 172,481,184.38 4,809,337,067.29

Analysis of Financial Position and Operation Results

Inventory of finished goods of the Company and subsidiaries can be divided to for sale house and construction materials. Regarding for sale house, the Company and subsidiaries stated to provide this finished housing since the end of 2006, valued of Baht 46.16 million. The inventory also came from the Company’s policy to finish construction before selling and at the end of that year, ownership could not be transferred or goods were not sold. Most of inventory was houses in long opening project such as Prinsiri Nuanchan, Prinsiri Nawamin, Prinyada Chamchan and Prinyada Theparak. The inventory as of the end of 2007 increased from that in 2006 at 70.76 percent. That was because the Company developed and opened many projects in 2007, totally of Bath 12,350 million, increased 80 percent from 2006.

Inventory of land and land developing cost was major part of total amount. That is because it is important factor in land and construction project development. Land and land developing cost is about 40 – 50 percent of total product cost. At the end of 2005, 2006 and 2007, the proportion was 65.49 percent, 62.64 percent and 47.47 percent of total inventory value. That proportion decreased because the Company has policy to buy only potential land that can be developed at once. Normally, the Company will develop a project after buying that land. The Company does not have policy to maintain land bank.

Therefore, the Company has more finished product and ongoing construction. In 2007, the Company opened new condominium projects. Those four projects are under construction, namely, the Complete Naratiwasrajchanakarin, the Complete Rajchaprarop, the Pulse Phaholyothin 37, and Smart Condo Rama II. As a result, the increase of ongoing construction decreases that proportion.

Inventory of ongoing construction at the end of 2005, 2006 and 2007 was Baht 820.92 million, Baht 1,274.71 million, and Baht 2,237.71 million respectively. It increased 55.28 percent and 75.55 percent respectively. Reason of increase is explain in topic of inventory of land and land developing cost.

The Company does not need to reserve debase of assets because the Company employs independent assessor, which is a company approved by the Securities and Exchange Commission and the Stock Exchange of Thailand, to assess land price and building for selling of the Company and subsidiaries.

The assessor suggested that assets have higher value than the previous cost. More information, please see article 5.1: Company’s Assets.

Land and equipment - net

As of the end of 2005, 2006 and 2007, the Company and subsidiaries had net land and equipment of Baht 29.94 million, Baht 36.43 million, and Baht 40.79 million respectively. It increased at 21.67 percent, and 11.98 percent respectively. However, increase of net land and equipment was required by operation and growth of the Company. The Company grew because expansion of new projects of the Company and subsidiaries. In 2006, there were 9 new projects and 11 projects in 2007. Therefore, as of December 31, 2007, the active projects were 23. In 2006, most of increase was in office equipment.

At the end of 2006, it increased from 2005 at 37.61 percent. In 2007, most of increase was in computers which used to be in the office equipment. At present, the number of computers is very high. In order to have clear account of computers, the Company re-categorized account of computers in 2007. The computers of Baht 14.75 million were transferred from the office equipment account to the one for computers only. New purchase during the fiscal year was Baht 8.05 million, representing 54.55 percent of computer transfer transactions.

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Analysis of Financial Position and Operation Results

(Unit : Baht) Description Land Building and construction Machinery and equipment Office furniture Office equipment Computers Vehicles Total Accumulated depreciation Land and equipment - net

As of December 31, As of December 31, As of December 31, 2005 2006 2007 3,279,342.43 3,279,342.43 2,196,710.00 3,346,838.00 4,015,004.24 2,370,059.66 6,628,121.05 8,062,698.78 8,062,698.78 21,478,707.06 29,556,573.49 19,121,782.14 22,801,301.59 22,236,410.81 25,669,335.81 27,779,622.81 53,690,076.92 70,582,954.75 85,611,517.41 23,749,101.32 34,154,300.36 44,818,402.31 29,940,975.60 36,428,654.39 40,793,115.10

In 2006 the Company had more land plot of 247 war-square, valued Baht 3.28 million, in Soi Chamchan. The land was near Prinyada Chamchan. It used to be the same land plot but was separated when the road crossed. At present it is used as After-Sale Office. Since the land is small, the Company does not have policy to develop it.

In 2007, the Company had more building and construction of Baht 2.20 million. They are the sale office and model home which most of their structure and components are removable and reassemble.

They are currently installed in Prinyada Light Rama V, where is that first project. Furthermore, the Company had more computers of Baht 22.80 million. This also is a result of re-categorization for computer account in 2007 as abovementioned.

Land held for development

As at the end of 2005, 2006 and 2007, the Company and subsidiaries had land held for development valued of Baht 70.24 million, Baht 69.53 million, and Baht 126.53 million respectively.

It decreased 1.01 percent and increased 81.98 percent respectively. It slightly decreased in 2006 because in financial record, a land plot in Chamchan was transferred from land held for development to land and equipment. In addition, a transferred land plot, which had area of 16-0-89 rai in Pranburi, Prachuapkhirikhan province, was improved for the future land development. In 2007, the land size dramatically increased because CNSPR (Thailand) Company Limited (a subsidiary) bought a land plot of 10-2-56.50 rai in Soi Pattaya-Naklua 12, Pattaya-Naklua Road, Nongprue, Banglamung,Chonburi. The plot is waiting for development.

Deposit at bank with commitment

The Company and subsidiaries had deposit at bank with commitment of Baht 88.37 million at

119 Annual Report 2007

Analysis of Financial Position and Operation Results

the end of year 2005, Baht 92.09 million at the end of year 2006 and Baht 91.64 million at the end of year 2007. The amount increased 4.21 percent and decreased 0.49 percent respectively. Slightly increase in 2006 was from transaction of customers’ housing allocation fund for central infrastructure collected from sold projects of the Company and subsidiaries. There was deposit at bank with commitment because the Company and subsidiaries submitted financial institutes some of their saving accounts and fixed accounts as guarantee of aval acceptance and letter of guarantee. For the year end 2006 the deposit at bank with commitment of the Company and subsidiaries included the money collected from customers for central infrastructure charge of the deposit at bank with commitment of the Company and subsidiaries included the money collected from customers for central infrastructure charge of Baht 55.82 million. It slightly decreased in 2007 because the Company withdrew deposit, which was not obliged with guarantee, to use in cash flow. At the end of 2007, the deposit at bank with commitment of the Company and subsidiaries included the money collected from customers for central infrastructure charge of Baht 74.53 million. The Company and subsidiaries have commitment to transfer the money to the Village Committee after it is set up.

Liquidity

Cash flow from operating activities

In 2005, the Company and subsidiaries had cash flow used in operating activities of Baht 10.65 million. The Company and subsidiaries gained that amount from net profit of Baht 304.75 million, depreciation of Baht 9.22 million, increase of trade accounts payable and promissory notes of Baht 101.12 million, non-revenue recognition installments paid of Baht 25.27 million, other current liabilities of Baht 37.45 million, and accrual income tax of Baht 28.49 million. However the cash flow from operating activities decreased since increase of inventory of Baht 409.96 million and other current assets of Baht 97.69 million, which most was deposit for land and accounts receivable and Note Receivable of Baht 3.86 million.

In 2006, the Company and subsidiaries had cash flow provided from operating activities of Baht 880.41 million. The Company and subsidiaries gained that cash flow form net profit of Baht 447.80 million, depreciation Baht 10.97 million, bad debt of Baht 2.00 million, decrease of other current assets of Baht 14.39 million, increase of accounts payable and promissory note of Baht 3.32 million, current liabilities of Baht 46.88 million, and accrual income tax of Baht 2.95 million. The cash flow from operating activities decreased because of increase of inventory of Baht 1,091.30 million, land payablepromissory note of Baht 257.50 million, non-revenue recognition installment of Baht 48.40 million, accounts receivable and note receivable of Baht 6.61 million and minority shareholders of Baht 4.89 million.

In 2007, the Company and subsidiaries had cash flow provided from operating activities of Baht 1,073.26 million. The Company and subsidiaries gained that cash flow form net profit of Baht 77.99 million, depreciation Baht 12.47 million, doubtful accounts receivable of Baht 6.97 million, bad debt of Baht 2.22 million, minority shareholders of Baht 9.94 million, decrease of accounts receivable and note

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Analysis of Financial Position and Operation Results

receivable of Baht 7.28 million, increase of accounts payable and promissory note of Baht 19.89 million, non-revenue recognition installments paid of Baht 186.69 million and current liabilities of Baht 78.15 million. The cash flow from operating activities decreased because of the reverse transaction of doubtful accounts receivable of Baht 2.37 million, other revenues of Baht 12.01 million, increase of inventory of Baht 884.55 million, other current assets of Bath 444.98 million, other non-current assets of Baht 6.38 million, land payable-promissory note of Baht 64.17 million, and accrual income tax of Baht 57.69 million.

Cash flow from investment

In 2005, the Company and subsidiaries had net cash flow used from investment of Baht 206.96 million. The Company invested this money by purchase open ended fund – debt securities of Baht 159.00 million. Since at that time the Company had much liquidity, excess was invested for benefits.

The company paid cash to buy subsidiary of Baht 22.52 million, which the Company invest in Growed Yotha Group Company Limited, operating contractor and selling construction materials. The Company holds 99.99 percent of registered capital. This subsidiary is used as one business unit of the Company to control construction material cost for the Company’s project development and enhancement of competitive potential. The Company bought office equipment and supplies of Baht 13.33 million for the Company’s business and its expansion. There was increase of fix deposit with commitment of Baht 33.88 million because it was used to guarantee land payable-promissory note.

In 2006, the Company and subsidiaries has net cash flow provided from investment of Baht 107.31 million. The Company sold open ended fund – debt securities of Baht 145.60 million because it needed capital for developing of many new projects, investing more in subsidiaries and lending subsidiaries loan for project development. There was decrease of fix deposit with commitment of Baht 11.70 million because the money collected for central infrastructure of customers was transferred to the Village Committee as it already set up.

In 2007, the Company and subsidiaries had net cash flow used from investment of Baht 63.04 million. The Company spent Baht 12.23 million to buy equipment and office equipment and Baht 57.00 million to purchase new land for development.

Cash flow from financing

In 2005, the Company and subsidiaries had more net cash flow from financing of Baht 265.56 million. That cash flow included from increase capital of Baht 424.71 million, overdraft and short-term loan from financial institute of Baht 219.27 million and short-term loan of Baht 44.10 million. At the meantime there was cash flow used in payment of dividend of Baht 72.10 million and paid back longterm loan of Baht 351.86 million.

In 2006, the Company and subsidiaries had more net cash flow from financing of Baht 805.42 million from long-term loan of Baht 635.41 million, short-term loan of Baht 194.45 million, overdraft and short-time loan from financial institutes of Baht 61.25 million and received cash from minority shareholders of Baht 34.91 million. At the same time there was cash flow used in dividend paid of Baht 120.60 million.

121 Annual Report 2007

Analysis of Financial Position and Operation Results

In 2007, the Company and subsidiaries had more net cash flow from financing of Baht 1,138.36 million from long-term loan of Baht 753.73 million, overdraft and short-time loan from financial institutes of Baht 105.97 million, received cash from additional ordinary shares of Baht 502.50 million, and received cash from minority shareholders of Baht 11.64 million. At the same time there was cash flow used in dividend paid of Baht 180.90 million.

Net cash flow

In summary, at the end of 2005, 2006 and 2007 the Company and subsidiaries had net cash flow of Baht 78.83 million, Baht 111.14 million, and Baht 113.20 million respectively. It increased 41.00 percent and 1.85 percent respectively.

Liquidity ratio

In 2005 the Company and subsidiaries had liquidity ratio and quick ratio of 2.60 times and 0.21 times respectively. In 2006 liquidity ratio and quick ratio were 3.36 times and 0.14 times respectively. In 2007 liquidity ratio and quick ratio were 2.44 times and 0.08 times respectively. The liquidity ratio was at normal level of business operation. However, quick ratio was quite low because most of current assets were inventory. Increase of inventory was from increase of sale value and the Company’s policy to build house before selling and to recognize revenue when ownership transfer. In addition, the development of condominium projects requires high investment. Revenue from these projects will not be recognized until ownership is transferred after the projects completes. For information about inventory, please see article 12.2.2: Analysis of Financial Position, Inventory.

Investment Expenses

In 2005 and 2006, the Company and subsidiaries invested Baht 173.69 million and Baht 63.32 million. In 2005, the Company also invested in Growed Yotha Group Company Limited, a company engaged trading of construction materials and also a construction contractor. Its business supported the Company’s business in terms of construction cost and quality for the project development and potential competition. Therefore, the Company invested Baht 32 million to held 99.99 percent of total paid-up share capital of Growed Yotha Group Company Limited. In addition, the Company invested in open ended fund – debt securities that had high liquidity at that period for the Company’s benefit.

During the year there was net buying and selling of Baht 139.14 million. The Company invested as joint venture with Univenture Public Company Limited to Prinventure Company Limited, real estate developer.

The Company holds 51.00 percent of registered capital. That year the Company totally invested of Baht 2.55 million in Prinventure Company Limited.

In 2006, the Company paid for registered capital of Prinventrue Company Limited for more Baht 36.34 million. The Company and subsidiaries invested in open ended fund -debt securities. Most of expenses were investment in Growed Yotha Group Company Limited. Net purchase and sale of investment in the open ended fund -debt securities during the year was Baht 26.98 million.

In 2007, the Company paid up for registered capital of Printventure Company Limited,

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Analysis of Financial Position and Operation Results

according to the proportion of share holding which equaled to Baht 12.11 million. Therefore, Printventure Company Limited has totally paid up registered capital of Baht 100.00 million. The Company has established CNSPR (Thailand) Company Limited to operate business of real estate selling and leasing. The Company holds proportion of 99.97 percent of shares. This new company has paid up registered capital of Baht 2 million. Regarding temporary investment, the Company and subsidiaries invested in open ended fund – debt securities of Growed Yotha Group Company Limited. Net purchase and sale of investment in the open ended fund -debt securities during the year was Baht 43.06 million.

According to notification of Federation of Accounting Profession relating to amendment of TAS 44 “Consolidated Financial Statements and Accounting for Investment in Subsidiaries” and TAS 45 “Accounting for Investment in Associates” which require the change from the equity method of accounting to cost method of accounting for investment in the subsidiaries and associates presented in the separate financial statements, the Company has adopted the cost method. Please read details in the Notes to Financial Statements: Change Method of Accounting for Investment in the Subsidiaries.

Fund Resources Liabilities

As at the end of 2005, 2006 and 2007, the Company and subsidiaries had liabilities of Baht 1,748.09 million, Baht 2,589.84 million, and Baht 3,620.93 million respectively. The amount increases 48.15 percent and 39.81 percent respectively.

Increase of total liabilities in 2005 was mostly from increase of current liabilities as following.

Bank overdraft and short-term loan from financial institutes increased from Baht 47.16 million to Baht 226.42 million. Short-term loan-promissory note rose from Baht 92.00 million to Baht 136.10 million.

Land payable-promissory note increased as new liability of Baht 257.50 million. Trade account payable and note payable increased from Baht 97.91 million to Baht 214.16 million. The Company increased abovementioned liabilities for land purchase and project development of the Company and subsidiaries for sale. However, in the same year the Company and subsidiaries paid back some of long-term loan. The loan amount decreased from Baht 904.45 million to Baht 522.59 million. The loan payment was perform as stipulated by the loan contract specified that the payment shall be done when house ownership was transfer to customers at 70-80 percent of selling price.

Increase of total liabilities in 2006 mainly incurred by increase of current and non-current liabilities as followings. Bank overdraft and short-term loan from financial institutes increased from previous year Baht 61.25 million. Short-term loan – promissory note rose from previous year Baht 194.45 million. Trade account payable and note payable increased from the previous year Baht 27.15 million. Land payable – long-term promissory note was added Baht 100 million. Long-term loan increased Baht 635.41 million. The Company increased abovementioned liabilities for land purchase and project development of the Company and subsidiaries for sale, which was like the reason of previous year.

However, in the same fiscal year, the Company and subsidiaries got paid installment that did not recognize revenue from the previous year of Baht 48.40 million because there were ownerships transfer at high amount. In addition, land payable– promissory note dropped from previous Baht 1,933.33 million because of reaching due payment.

123 Annual Report 2007

Analysis of Financial Position and Operation Results

Most of increase liabilities in 2007 were from the increase of current liabilities. They are bank overdraft and short-term loan from financial institutes, which increased from previous year, of Baht 105.97 million; trade account payable and note payable, increased from the previous year, of Baht 7.88 million; long term due within a year, which increased from the previous year, of Baht 764.20 million; unrecognized revenue, which increased from the previous year, of Baht 186.67 million; retention of contractors, which increased from the previous year, of Baht 30.08 million; and accrued expense of Bath 87.30 million. Similar to the previous year, the increase liabilities were expenses of the Company and subsidiaries for land purchasing and project developments for sale. However, in the same year, the Company and subsidiaries paid for short-term loan–promissory note of Baht 35.55 million, decreased from the previous year. The amount paid to land payable-promissory note decreased from the previous year Baht 12.48 million. The corporate tax was lower than the previous year Bath 57.69 million. The amount paid for other current liabilities dropped from the previous year Bath 39.17 million.

Shareholders’ Equity

The shareholders’ equity of the Company equaled to Baht 1,448.91 million in 2005, Baht 1,806.13 million in 2006 and Bath 2,227.58 million in 2007, representing an increase of 24.65 percent and 23.33 percent respectively.

In 2005, the Company offered the public 155 million increase common shares on 25-27 October 2005 at the price of par value Baht 2.80 per share, total amount of Baht 434 million. The selling of those shares provided the Company capital for cash flows and project development. The Company had paid-up registered capital of Baht 670 million. There was dividend paid in the same year as the Ordinary Shareholders’ Meeting held on April 26, 2005 approved payment of dividend for the performance of the year 2004 at Baht 0.14 per share, totally Baht 72.10 million. The dividend was paid to shareholders on May 25, 2005. The Company and subsidiaries gained additional Baht 304.75 million.

In 2006, the Company paid dividend as approved by the Ordinary Shareholders’ Meeting held on April 24, 2006. The resolution was to pay dividend for the performance of the year 2005 at Baht 0.18 per share, totally of Baht 120.60 million. The dividend was paid on May 24, 2006. The Company and subsidiaries gained additional Baht 447.80 million.

In 2007, the Company offered additional 335 million ordinary shares of par value Baht 1, at the ratio of two ordinary shares per one new share. The new shares were offered at the price of Baht 1.50 per share, totally of Bath 505.50 million. The proposal of selling shares to the shareholders was to invest more in cash flow and project development. Therefore, the Company currently has its registered capital of Baht 1,340 million and paid up capital of Baht 1,005 million. The dividend was paid in the same year under the resolution of the Ordinary General Meeting of Shareholders for the year 2007, held on March 26, 2007. The meeting approved payment of dividend for the performance of the year 2006 at Baht 0.27 per share, totally Baht 77.98 million. The dividend was paid on April 19, 2007. The Company and subsidiaries gained additional profit of Baht 77.98 million.

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124

Analysis of Financial Position and Operation Results

Optimal capital structure

As at the end of year 2005, 2006 and 2007, the Company and subsidiaries has debt to equity ratio equals to 1.21 times, 1.43 times and 1.63 times respectively. The ratio in 2006 increases from 2005 because there was borrowing loan for capital in project development of the Company and subsidiaries, especially projects of Prinventure Company Limited, the Company’s subsidiary. Most projects were under developing and did not be on selling. As a result, the total amount of loan for project development was still high. In addition the Company paid dividend to the shareholders.

In 2007, the debt to equity ratio increased from 2006 because there was borrowing loan for capital in project development of the Company and subsidiaries. In addition, the Company operated many active under construction and new projects in 2007. Four condominium projects, namely, the Complete Naratiwasrajchanakarin, the Complete Rajchaprarop, the Pulse Phaholyothin 37, and Smart Condo Rama II require high investment. Revenue from these projects will not be recognized until ownership is transferred after the projects completes.

Optimal average debt to equity ratio of companies in real estate industry is less than 1.00 time.

Hence, the Company’s dept to equity radio slightly excess the average. However, projects of the Company and subsidiaries are under developing. When they are opening for sale and transfer ownership to customers, the Company and subsidiaries will pay back the loan. Then the ratio will decrease.

Factors and Influence affecting future performance or financial position

Changes in customers’ needs of housing

Many events including political situation, economic recess, increase of petrol price and increase of interest rate, are major factors to customers’ housing need and buying decision. Therefore, occurrence of related factors impacting on customers may make customers their buying decision. The Company’s products may not be bought or slower sold. This situation will then make the Company have higher cost of inventory. As a result, it will affect on the Company’s liquidity and profitability.

However, concentrating on the excellence of products and services under slogan “Charms of the Home in Harmony with Nature”, the Company receives cognition and trust from customers for the brand “Prinsiri”. The Company decreases abovementioned impact by conducting research and studying customers’ behavior prior project development in order to assure that the Company’s products will meet customers’ needs as much as possible. In addition, construction plan is designed to go with expected selling quantity by separating project development into phrases. If the Company cannot sell its goods or takes more time to sell out, the Company is able to slow down or suspend construction work. Moreover, the Company has implemented promotion progressively in order to promote brand awareness, buying need and remind brand recognition. The promotion also develops trust in the Company’s products and good image for the Company.

Remunerations for auditors

The Company and subsidiaries paid Baht 1.00 million in audit fee to auditors for the fiscal year 2005, Baht 1.18 million for the fiscal year 2006 and Baht 1.35 million for the fiscal year 2007. There was no other remuneration paid to any person or business related to the auditors except fund auditing.

125 Annual Report 2007

PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES AUDITOR’S REPORT AND FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 AND 2006

Report of Independent Auditor

To The Shareholders of PRINSIRI PUBLIC COMPANY LIMITED

(1) I have audited the consolidated balance sheets of PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES and the separate balance sheets of PRINSIRI PUBLIC COMPANY LIMITED as at December 31, 2007 and 2006, the related consolidated statements of income and separate statements of income, consolidated statements of changes in shareholders’ equity and separate statements of changes in shareholders’ equity, and consolidated statements of cash flows and separate statements of cash flows for the years then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits.

(2) I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion.

(3) In my opinion, the consolidated financial statements and the separate financial statements referred to above present fairly, in all material respect, the consolidated financial position of PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES and the separate financial position of PRINSIRI PUBLIC COMPANY LIMITED as at December 31, 2007 and 2006, and the results of their and its operations and cash flows for the years then ended in conformity with generally accepted accounting principles.

(4) Without qualifying opinion, but I draw your attention to notes 33 to financial statements, as at January 1, 2007 the Company changed its accounting policy for investment in subsidiaries from equity method to cost method in the separate financial statements to be in compliance with the Notification of the Federation of Accounting Professions and retroactively restated the separate statements as at December 31, 2006 for the changes in such accounting policy. I also audited the adjustments that were applied to restate the separate financial statements for the year ended December 31, 2006. In my opinion, such adjustments are appropriate and have been properly applied.

Office of DIA International Auditing

(Mrs. Vilairat Rojnuckarin)

C.P.A. (Thailand)

Registration No. 3104

February 20, 2008

129 Annual Report 2007

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT DECEMBER 31, 2007 AND 2006

Assets

9 promissory notes 10 Inventories

Other current assets

Deposit for goods

Deposit for land

Other

Total current assets

Non-current assets 11 Investment in subsidiaries 12 Land and equipment - net 13 Land held for development 14 Deposit at bank with commitment

Other non-current assets

Deposit and retention

Withholding tax - prior year

Total non-current assets

Total assets

2007

Current assets 6 Cash and cash equivalents 7 Current investment 8 Accounts receivable - net

Loans to related companies -

Consolidated (Baht)

Note

Separated (Baht)

2006

2007

2006

(Restated)

113,204,772.53 111,144,891.32

84,966,180.35

93,431,155.45

43,058,418.70

26,984,289.43

0.00

428,455.12

16,174,377.91

30,270,572.65

3,686,008.00

1,277,310.84

0.00 311,000,000.00

248,283,300.00

0.00

4,809,337,067.29 3,873,103,125.24 3,933,359,016.83 2,680,016,781.10

95,929,802.79

53,054,195.59

93,126,064.47

49,923,683.25

61,811,088.75 462,553,650.27

61,811,088.75

35,692,363.70

45,655,976.49

474,153,650.27 25,455,590.88

53,648,035.12

5,577,313,680.37 4,192,060,526.68 4,942,338,955.04 3,180,827,751.00

0.00

0.00

85,000,000.00

70,887,500.00

40,793,115.10

36,428,654.39

38,290,256.92

33,975,654.66

126,533,625.00

69,533,625.00

69,533,625.00

69,533,625.00

91,635,965.90

92,091,339.56

80,614,048.44

85,854,654.10

8,459,559.42

5,860,147.09

7,488,329.42

5,328,947.09

3,783,425.38

0.00

0.00

0.00

271,205,690.80 203,913,766.04 280,926,259.78

265,580,380.85

5,848,519,371.17 4,395,974,292.72 5,223,265,214.82 3,446,408,131.85

Notes to financial statements are parts of these financial statements.

131 Annual Report 2007

Financial Statement

PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (Continued) AS AT DECEMBER 31, 2007 AND 2006

Liabilities and shareholders’ equity

Consolidated (Baht)

Current

liabilities

Overdrafts and short - term loans

2007

Note

Separated (Baht)

2006

2007

2006

(Restated)

from financial institutions

15

433,639,648.93

327,672,687.09

Short - term loans - promissory notes

16

295,000,000.00

330,546,700.00

50,000,000.00

92,000,000.00

Land payable - promissory notes

17

51,686,000.00

64,167,000.00

51,686,000.00

64,167,000.00

Accounts and notes payable

18

249,188,836.27

241,308,633.44

264,673,170.00

77,987,900.00

252,252,070.00

60,937,500.00

764,196,995.92

0.00

664,077,826.56

0.00

Unrealized installment income

Current portion of long - term liabilities 19

392,663,387.03 326,744,373.50

208,180,050.04 201,364,704.97

Other current liabilities

Accrued income tax

18,808,858.91

76,496,386.63

15,054,846.11

72,911,839.90

Contractor retention

110,646,681.26

80,566,316.23

88,704,623.41

68,870,934.00

Accrued expenses

87,297,374.69

39,931,852.14

46,800,178.30

22,577,916.18

Others

8,112,676.09

7,350,358.95

6,286,211.37

5,138,676.84

Total current liabilities

2,283,250,242.07 1,246,027,834.48

1,775,705,192.82 914,712,945.39

Non-current liabilities

Land payable - long-term

promissory notes - net

20

0.00

100,000,000.00

0.00

0.00

Liabilities under financial lease agreement 21

2,116,879.52

0.00

1,966,933.12

0.00

Long - term loans - net

22

Other payables

14

1,261,038,603.22 1,188,000,279.72 74,529,096.41

1,220,882,633.22 714,546,200.72

55,815,897.95

65,941,342.99

55,377,597.95

Total non-current liabilities

1,337,684,579.15 1,343,816,177.67

1,288,790,909.33 769,923,798.67

Total liabilities

3,620,934,821.22 2,589,844,012.15

3,064,496,102.15 1,684,636,744.06

Notes to financial statements are parts of these financial statements.

Annual Report 2007

132

Financial Statement

PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (Continued) AS AT DECEMBER 31, 2007 AND 2006

Liabilities and shareholders’ equity Shareholders’ equity

Consolidated (Baht) 2007

Note

Separated (Baht)

2006

2007

2006

Share capital

Authorized share capital

1,340,000,000 common shares

of Baht 1 each

670,000,000 common shares

of Baht 1 each

1,340,000,000.00

1,340,000,000.00

670,000,000.00

670,000,000.00

Issued and paid-up share capital

1,005,000,000 common shares

of Baht 1 each

1,005,000,000.00

1,005,000,000.00

670,000,000 common shares

of Baht 1 each

670,000,000.00

Premium on share capital

Unrealized gain on change in

investment valuation

295,423.25

0.00

0.00

0.00

Retained earnings

Appropriated

24

58,240,000.00 54,340,000.00 58,240,000.00 54,340,000.00

670,409,426.89 777,226,249.89 655,316,712.67 764,718,987.79

23

23

Legal reserve

Unappropriated

(Restated)

670,000,000.00

440,212,400.00 272,712,400.00 440,212,400.00 272,712,400.00

Total shareholders’ equity of the Company

2,174,157,250.14 1,774,278,649.89 2,158,769,112.67 1,761,771,387.79

Minority interest

53,427,299.81 31,851,630.68

0.00

0.00

Total shareholders’ equity

2,227,584,549.95 1,806,130,280.57 2,158,769,112.67 1,761,771,387.79

Total liabilities and shareholders’ equity

5,848,519,371.17 4,395,974,292.72 5,223,265,214.82 3,446,408,131.85

Notes to financial statements are parts of these financial statements.

133 Annual Report 2007

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Consolidated (Baht) Note

2007

Separated (Baht)

2006

2007

2006

Sales of real estate

2,523,843,310.00 2,862,654,200.00 1,583,605,246.00 2,821,106,200.00

Sales of goods

Fine from delayed construction income 30.4.3

Management income

Revenues

(Restated)

61,621,220.48

86,071,577.45

0.00

0.00

12,011,485.54

0.00

12,011,485.54

0.00

0.00

0.00

26,405,626.75 10,472,878.51

Interest income

3,447,516.20

1,080,717.72

26,606,654.77 14,586,262.65

Other income

10,317,642.25

10,708,622.66

21,028,729.91 10,456,244.72

Total revenues

2,611,241,174.47 2,960,515,117.83 1,669,657,742.97 2,856,621,585.88

1,935,379,992.84 1,926,620,854.04 1,144,183,412.15 1,918,414,518.25

Expenses

Cost of sales of real estate

Cost of sales of goods

54,548,294.34

75,003,399.83

Selling and administrative expenses

461,359,239.37

356,690,843.97

Directors’ remuneration

1,847,500.00

1,850,000.00

Total expenses

0.00

0.00

377,898,004.97 331,111,692.37 1,847,500.00

1,850,000.00

2,453,135,026.55 2,360,165,097.84 1,523,928,917.12 2,251,376,210.62

Profit before interest expenses and income tax

158,106,147.92

600,350,019.99

145,728,825.85 605,245,375.26

Interest expenses

6,693,928.24

6,408,405.09

22,721,125.23 17,341,578.00

Income tax

63,490,465.28

151,030,155.89

47,609,975.74 143,204,664.37

Profit before minority interest

87,921,754.40

442,911,459.01

75,397,724.88 444,699,132.89

(Gain) Loss of minority interest

(9,938,577.40)

4,887,990.24

Net profit

77,983,177.00

447,799,449.25

0.00

75,397,724.88 444,699,132.89

Basic earnings per share

0.09

0.67

0.08

0.66

Weighted average number of common share

895,780,822

670,000,000

895,780,822

670,000,000

Net profit

0.00

Notes to financial statements are parts of these financial statements.

Annual Report 2007

134

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Note

Consolidated (Baht) Issued and paid-up share capital

Premium on share capital

670,000,000.00 272,712,400.00

Balance as at January 1, 2006

Retained earnings (Deficit)

Unrealized gain on change in investment valuation

Appropriated during the period -

24

0.00

Dividend paid during the period

Appropriated Legal reserve

Unappropriated

Minority

Total

interest

0.00 31,940,000.00 472,426,800.64 1,827,120.92 1,448,906,321.56

0.00

0.00 22,400,000.00 (22,400,000.00)

0.00

0.00

0.00

0.00

0.00

0.00 (120,600,000.00)

0.00 (120,600,000.00)

Receive the payment of share capital from minority interest

0.00

0.00

0.00

0.00

Net profit

0.00

0.00

0.00

0.00 447,799,449.25

Increase (Decrease) in minority

0.00

0.00

0.00

0.00

Legal reserve

interest for the year

0.00 34,912,500.00 34,912,500.00 0.00 447,799,449.25

0.00 (4,887,990.24) (4,887,990.24)

Balance as at December 31, 2006 670,000,000.00 272,712,400.00

0.00 54,340,000.00 777,226,249.89 31,851,630.68 1,806,130,280.57

Increase share during the period

0.00

0.00

0.00

0.00

0.00

335,000,000.00 167,500,000.00

Appropriated during the period -

0.00 502,500,000.00

24

0.00

0.00

0.00

3,900,000.00 (3,900,000.00)

Dividend paid during the period

0.00

0.00

0.00

0.00 (180,900,000.00)

Dividend paid during the period from minority interest

0.00

0.00

0.00

0.00

0.00

Receive the payment of share capital from minority interest

0.00

0.00

0.00

0.00

0.00 11,637,500.00 11,637,500.00

Net profit

0.00

0.00

0.00

0.00 77,983,177.00

Unrealized gain on change in investment valuation

0.00

0.00

295,423.25

0.00

0.00

17.73

295,440.98

Increase (Decrease) in minority interest for the year

0.00

0.00

0.00

0.00

0.00 9,938,577.40

9,938,577.40

Legal reserve

Balance as at December 31, 2007 1,005,000,000.00 440,212,400.00

0.00 (180,900,000.00)

(426.00)

(426.00)

0.00 77,983,177.00

295,423.25 58,240,000.00 670,409,426.89 53,427,299.81 2,227,584,549.95

Notes to financial statements are parts of these financial statements.

135 Annual Report 2007

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Note

Separated (Baht) (Restated) Issued and paid-up share capital

Balance as at January 1, 2006

Retained earnings (Deficit)

Premium on share capital

Appropriated Legal reserve

670,000,000.00 272,712,400.00

Cumulative effect of change in accounting policy

33

Balance as at January 1, 2006 (after adjustment)

Appropriated during the period -

0.00

0.00

Total

UnappropriatedÂ

31,940,000.00 472,426,800.64 1,447,079,200.64

0.00 (9,406,945.74) (9,406,945.74)

670,000,000.00 272,712,400.00

31,940,000.00 463,019,854.90 1,437,672,254.90

Legal reserve 24 Dividend paid during the period

0.00

0.00

0.00

0.00

0.00 (120,600,000.00) (120,600,000.00)

Net profit for the year

0.00

0.00

0.00 444,699,132.89 444,699,132.89

670,000,000.00 272,712,400.00

54,340,000.00 764,718,987.79 1,761,771,387.79

Balance as at December 31, 2006

Balance as at December 31, 2006 Cumulative effect of change in accounting policy

33

Balance as at December 31, 2006 (after adjustment) Increase share during the period

0.00

0.00

22,400,000.00 (22,400,000.00)

0.00

54,340,000.00 777,226,249.89 1,774,278,649.89

0.00 (12,507,262.10) (12,507,262.10)

670,000,000.00 272,712,400.00

54,340,000.00 764,718,987.79 1,761,771,387.79

335,000,000.00 167,500,000.00

Appropriated during the period -

670,000,000.00 272,712,400.00

0.00

0.00 502,500,000.00

0.00

0.00

Dividend paid during the period

0.00

0.00

0.00 (180,900,000.00) (180,900,000.00)

Net profit for the year Balance as at December 31, 2007

0.00

0.00

0.00 75,397,724.88 75,397,724.88

1,005,000,000.00 440,212,400.00

58,240,000.00 655,316,712.67 2,158,769,112.67

Legal reserve

24

3,900,000.00 (3,900,000.00)

0.00

Notes to financial statements are parts of these financial statements.

Annual Report 2007

136

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Consolidated (Baht)

2007

Cash flows from operating activities Net profit

Separated (Baht)

2006

2007

2006

77,983,177.00 447,799,449.25 Adjustment net profit to cash receipt (disbursement)

from operating activities

Depreciation 12,472,473.93 10,974,487.53 Reversed doubtful accounts

(Restated)

75,397,724.88 444,699,132.89

11,811,993.51

10,672,396.22

(2,370,095.72)

0.00

0.00

0.00

6,973,568.96

496,022.61

0.00

0.00

2,215,042.71

2,003,020.61

0.00

0.00

(Gain) from sales of assets

(1,403,872.93)

(1,134.58)

(1,401,868.16)

(883.56)

Loss from disused of asset

100,567.61

233,776.64

100,567.61

230,781.56

(300,677.58)

(786,302.39)

(270,796.64)

(141,696.31)

0.00

(15,742.94)

0.00 (12,011,485.54)

0.00

Doubtful accounts Bad debts

(Gain) from sales of current investment (1,398,445.80) (Gain) from revaluation of current

0.00 investment Fine from delayed construction income (12,011,485.54) Minority interest 9,938,577.40

(4,887,990.24)

0.00

0.00

(Increase) Decrease in changes in part of operating assets

7,277,678.79

(6,612,731.25)

(2,408,697.16)

(902,810.84)

Accounts receivable

Inventories

(884,547,942.05) (1,091,300,803.00) (1,201,656,235.73) (255,212,691.47)

Other current assets

(444,981,395.90)

Other non-current assets

14,394,923.04 (451,937,001.37) (10,841,535.20)

(6,382,837.71)

(319,896.17)

(2,159,382.33)

(101,196.17)

Notes to financial statements are parts of these financial statements.

137 Annual Report 2007

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Consolidated (Baht)

2007

Separated (Baht)

2006

Increase (Decrease) in changes in part of operating liabilities

2007

2006

(Restated)

(64,167,000.00) (257,501,500.00) (64,167,000.00) (257,501,500.00)

Land payable- promissory notes

19,891,688.37

18,826,830.61

(15,402,691.47)

Unrealized installment income

186,685,270.00 (48,403,900.00) 191,314,570.00

(65,454,300.00)

Accrued income tax

(57,687,527.72)

Accounts and notes payable

3,323,850.24

2,949,469.41 (57,856,993.79)

78,154,204.72

Other current liabilities Net cash provided by (used in) operating activities

46,883,096.00

3,456,850.65

45,203,486.06

17,336,608.53

(1,073,258,353.88) (880,412,233.80) (1,451,729,793.80) (129,308,378.44)

Cash flows from investing activities Cash paid for purchase of current

investment-open ended fund-debt securities (550,659,500.00) Cash received from sale of current

investment-open ended fund-debt securities 536,279,257.51 (Increase) in loans to subsidiaries (Increase) Decrease in deposit with commitment Cash paid for increase capital in subsidiaries

(33,000,000.00) (403,359,500.00)

0.00

145,600,000.00 404,574,257.51

139,000,000.00

11,695,653.33

15,804,350.70

13,451,841.04

0.00 (14,112,500.00)

(36,337,500.00)

(12,229,406.08) (14,480,657.54) (11,945,527.86)

(12,006,194.48)

0.00

Land held for development Net cash provided by (used in) investing activities

0.00 (62,716,700.00) (202,383,300.00)

19,168,572.12

Cash received from sales of equipment and office supplies

0.00

Cash paid for purchase of equipment and office supplies

1,401,869.16

65,191.59

1,401,869.16

8,000.00

(57,000,000.00)

(2,568,000.00)

0.00

(2,568,000.00)

(63,039,207.29) 107,312,187.38 (70,353,750.49) (100,835,153.44)

Notes to financial statements are parts of these financial statements.

Annual Report 2007

138

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Consolidated (Baht)

2007

Cash flows from financing activities Cash paid for dividend

Separated (Baht)

2006

2007

2006

(ปรับปรุงใหม่)

(180,900,426.00) (120,600,000.00) (180,900,000.00) (120,600,000.00)

Increase (Decrease) in overdrafts and short-term loans from financial institution Increase (Decrease) in short-term loans Cash paid for liabilities under financial lease agreement

105,966,961.84

61,250,813.32

65,919,013.53 68,694,425.52

(35,546,700.00) 194,446,700.00 (42,000,000.00) (1,029,407.10)

0.00

0.00

(928,066.98)

0.00

Increase (Decrease) in long-term loans

735,729,513.64 635,407,973.22 1,169,027,622.64 317,477,094.22

Cash received from payment of increase share capital

502,500,000.00

Cash received from the payment of common shares from minorit interest

11,637,500.00

Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents

0.00 502,500,000.00 34,912,500.00

0.00

0.00

0.00

1,138,357,442.38 805,417,986.54 1,513,618,569.19 265,571,519.74

2,059,881.21

32,317,940.12

(8,464,975.10) 35,427,987.86

Cash and cash equivalents as at January 1

111,144,891.32

78,826,951.20

93,431,155.45 58,003,167.59

Cash and cash equivalents as at December 31

113,204,772.53 111,144,891.32

84,966,180.35 93,431,155.45

123,641,532.88

82,390,785.85

Additional disclosure of cash flows information 1. Cash paid during the period Interest expenses Income tax

96,255,184.99 60,862,235.08

131,824,826.81 151,864,111.86 105,466,969.53 139,747,813.72

Notes to financial statements are parts of these financial statements.

139 Annual Report 2007

Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

2. Non - cash transactions

2.1 In 2007 and 2006, the Company and subsidiaries have recorded deposit at bank with commitment and other payables at the same amount of Baht 18.71 million and Baht 15.41 million, respectively as stated in note 14 (the Company only, amount of Baht 14.72 million and Baht 14.97 million, respectively).

2.2 In 2007 and 2006, the Company and subsidiaries issued promissory notes for purchasing land in using of project development in the amount of Baht 51.69 million and Baht 164.17 million, respectively (the Company only, amount of Baht 51.69 million and Baht 64.17 million, respectively).

2.3 In 2007, the Company and subsidiary have purchased assets by entering into financial lease agreement of Baht 4.65 million (the Company only, amount of Baht 4.28 million).

2.4 In 2006, the Company has transferred land held for development to be land and equipment of Baht 3.28 million.

Notes to financial statements are parts of these financial statements.

Annual Report 2007

140

Notes to Financial Statement

Notes to Financial Statement PRINSIRI PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS AS AT DECEMBER 31, 2007 AND 2006

1. GENERAL INFORMATION

1.1 Prinsiri Public Company Limited was registered as a public company limited under the Thai law on March 30, 2004 with registration no. 0107547000320 which located at 123, Suntowers Building-A, 12th Floor, Viphavadi-Rangsit Road, Chomphol, Chatuchak, Bangkok 10900.

1.2 The Company engaged in business of real estate for sales.

1.3 The Company has staff information as follows :

Consolidated

Separated

Number of staff (Person) Staff expenses (Million Baht)

2007 308 126.34

2006 247 99.00

2007 288 120.85

2006 225 93.94

2. FINANCIAL STATEMENTS PRESENTATION BASIS

These financial statements have been presented under the Department of Business Development Notification dated September 14, 2001 regarding the abbreviate items which must be shown in the financial statements and prepared in conformity with the generally accepted accounting principles as prescribed by the Accounting Professions Act B.E. 2547.

The Company and subsidiaries’ financial statements have been prepared under the historical cost convention, except as transaction disclosed in related accounting policy.

According to the Notification of the Federation of Accounting Professions no. 26/2549 and no. 32/ 2549 dated October 11, 2006 and November 3, 2006, respectively requested to amend the Accounting Standards no. 44 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” and no. 45 “Accounting for Investments in Associates” required the Company who invested in subsidiaries, to change the accounting policy for investment in subsidiaries from equity method to cost method. Hence, in the first quarter of 2007, the Company has adjusted the beginning of 2007 retained earnings and retroactively restated the 2006 separate financial statements by using cumulative effect of change in accounting policy as stated in notes to financial statements no. 33.

3. CONSOLIDATED FINANCIAL STATEMENTS PREPARATION BASIS

3.1 These financial statements have been consolidated by including the financial statements of subsidiaries in which Prinsiri Public Company Limited has a power to control such companies under equity method. Balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements on the controllable date.

3.2 Investment between Prinsiri Public Company Limited and its subsidiaries have been eliminated under equity method as if the Company owns 100 per cent shareholding in those subsidiaries, and the interest of other shareholders is shown as “Minority Interest”.

143 Annual Report 2007

Notes to Financial Statement 3.3 The Company recognized the excess of subsidiaries’ net assets value over net purchasing price (negative goodwill) as revenue in total during the period which shown as “Other income” in statements of income.

3.4 These consolidated financial statements are prepared with the objective to show the consolidated financial position and the results of operation of Prinsiri Public Company Limited and its subsidiaries only.

The usefulness of these financial statements for other purposes may be limited due to the difference in types of business of those consolidated companies.

3.5 The consolidated financial statements consist of the financial statements of Prinsiri Public Company Limited, a parent company which has shareholding or has significant influence in subsidiaries as follows:

Percentage of

Relationship Type of business shareholding

2007 2006

Growed Yotha Group Co., Ltd. 99.99 99.99 Construction distributor and contractor Subsidiary 51.00 51.00 Real estate development for sales Subsidiary Prinventure Co., Ltd. Real estate for lease or sales of real Subsidiary CNSPR (Thailand) Co., Ltd. 99.97 0.00 estate held for developmen

4. NEW ACCOUNTING STANDARDS ISSUANCE

In accordance with the notification No. 9/2550, No.38/2550 and No.62/2550 issued by the Federation of Accounting Professions, pertaining to the Accounting Standards announced in the Government Gazette, intention to follow the revised 2007 Accounting Standards in stead of the old Accounting Standards which were cancelled as following: 4.1 The revised Accounting Standards became effective in the current year No. 44 “Consolidated Financial Statements and Separate Financial Statements” No. 45 “Investments in Associates” No. 46 “Interests in Joint Venture”

Those three Accounting Standards are required to adopt for the financial statements beginning in or after January 1, 2007 onwards. And on January 1, 2007 the Company had changed the accounting policy for investment in subsidiaries and associates in the separate financial statements in order to conform to the revised Accounting Standards No. 44 and No. 45 as stated in notes to financial statements no.33.

4.2 The revised Accounting Standards are not operative yet in the current year

No. 25 “Cash Flows Statements”

No. 29 “Leases” No. 31 “Inventories”

No. 33 “Borrowing Costs” No. 35 “Presentation of Financial Statements” No. 39 “Accounting Policies, Changes in Accounting Estimates and Fundamental Errors” No. 41 “Interim Financial Reporting” No. 43 “Business Combinations” No. 49 “Construction Contracts” No. 51 “Intangible assets”

Annual Report 2007

144

Notes to Financial Statement Those ten Accounting Standards are required to adopt for the financial statements beginning in or after January 1, 2008 onwards. The Company’s management deems that the adoption of those Accounting Standards are not materially affected to the financial statements in year starting.

5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 5.1 Revenues and Expense Recognition

5.1.1 Revenues from sales of real estate is recognized on the percentage of completion and the ownership have been transferred to the buyer.

5.1.2 Revenues from sales of goods are recognized as income when the significant risk and rewards of ownership have been transferred to the buyer.

5.1.3 Revenues from construction contract is recorded on the percentage of completion which is based on the proportion of actual costs to the estimated costs. Undue of realized income is shown as “Unbilled construction income”.

5.1.4 Other income and expenses are recognized on an accrual basis.

5.2 Current investments

Investment in opened end fund in the form of debt securities is stated at fair value. The difference from changes in valuation are recorded as unrealized gain (loss) on change in investment valuation under shareholders’ equity.

5.3 Allowance for doubtful accounts

The Company and subsidiaries provided the allowance for doubtful accounts from the estimated uncollectible receivable based on the past collection experience.

5.4 Inventories Valuation

Inventories are valued at the lower of cost or net realizable value. Cost of inventories - properties foreclosed consist of cost of land acquisition, land development, related expenses of project and interest on borrowing relating to land acquisition and construction are capitalized as cost of goods and stopped to recognize when the construction is completed which will be amortized as cost of sales in accordance with the size of land transferred.

Subsidiaries’ inventories - raw materials are valued at the lower of cost on the weighted average method or net realizable value.

5.5 Long-term investment

Investment in subsidiaries are stated at cost method less provision for impairment (if any).

5.6 Land and equipment

Assets are stated at cost less accumulated depreciation.

Equipment and supplies are depreciated on a straight-line basis over the estimated useful lifes of the assets for period of approximately 5 years.

5.7 Land held for development

Land held for development means land that the Company intends to hold for future benefit and recorded as non-currentassets which are stated at cost less provision for impairment. Cost consists of land cost and related expenses for land acquisition including cost of borrowing from development such land.

The Company will stop to calculate cost of borrowing when land development is completed.

145 Annual Report 2007

Notes to Financial Statement

5.8 Impairment of assets

The Company and subsidiaries have considered the impairment of land, building and equipment, investing capital, land and cost of undevelopment projects and intangible assets whenever events or changes indicate that the carrying amount of assets exceeds its recoverable value. The impairment loss will be recognized in statement of income. The Company will reverse the impairment loss whenever there is no longer impairment or reduction in impairment.

Recoverable value of asset is the net selling price or utilization value of that asset, whichever is higher. The impairment will be estimated from each item of asset or each asset unit generating cash flow, whichever is practical.

5.9 Income Tax

The Company and subsidiaries recorded corporate income tax as expense in the occurring period and calculated income tax as prescribed in the Revenue Code which required to recognize income on the installment due.

5.10 Cash and cash equivalents

Cash and cash equivalents mean cash on hand and all type of deposit excluding deposit which held to maturity.

5.11 Basic earnings per share

Earnings (Loss) per shareas presented in the statements of income is the basic earnings (loss) per share which is determined by dividing the net profit (loss) for the period by the weighted average number of common shares issued and paid-up during the year.

5.12 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles required the management to make several estimation and assumption which affected the amounts in the financial statements and disclosures in notes to financial statements. Consequent actual results may differ from these estimates.

5.13 Provision for liabilities

The Company and subsidiaries recognize a provision for liabilities when an entity has a present legal or constructive obligation as a result of a past event. It is probable that an outflow of economic benefits resources will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. If some or all the expenditure is required to settle a provision, is expected to be reimbursed when it is virtually certain that reimbursement will be received if the Company and subsidiaries settle the obligation. The amount recognized should not exceed the amount of the provision.

6. CASH AND CASH EQUIVALENTS Consolidated (Baht) Separated (Baht)

Cash on hand

2007 1,118,222.52

2006

2007

2006

823,736.72

918,154.52

745,789.72

Cheque in transit

45,471,594.00 50,388,450.00 44,531,594.00

46,438,250.00

Current accounts

Savings deposit

15,909,645.85 4,395,911.49 14,912,242.86 50,705,310.16 55,536,793.11 24,604,188.97 113,204,772.53 111,144,891.32 84,966,180.35

2,691,064.68 43,556,051.05 93,431,155.45

Total

Annual Report 2007

146

Notes to Financial Statement 7. CURRENT INVESTMENT

Open end fund - debt securities

Total

Consolidated (Baht)

Separated (Baht)

2007 2006 43,058,418.70 26,984,289.43 43,058,418.70 26,984,289.43

2007

2006 428,455.12 428,455.12

0.00 0.00

8. ACCOUNTS RECEIVABLE - NET

Note

Accounts receivable

- Related companies 28.1 - Others

Total

Less Allowance for doubtful accounts -

other receivables

Total

Consolidated (Baht) 2007

Separated (Baht)

2006

2007

2006

0.00 0.00 3,686,008.00 1,277,310.84 24,109,971.02 33,602,692.52 395,000.00 395,000.00 24,109,971.02 33,602,692.52 4,081,008.00 1,672,310.84

(7,935,593.11) (3,332,119.87) (395,000.00) (395,000.00) 16,174,377.91 30,270,572.65 3,686,008.00 1,277,310.84

The outstanding receivable are separated on aging as follows: Consolidated (Baht) Separated (Baht)

2007 2006 2007 2006 In due

1,689,212.32 8,279,672.96 3,686,008.00 1,277,310.84 From 1 – 90 days

3,040,645.17 9,369,217.56 0.00 0.00 From 91 – 180 days

5,652,479.51 3,859,471.33 0.00 0.00 From 181 – 360 days

6,697,043.82 8,762,210.80 0.00 0.00 7,030,590.20 3,332,119.87 395,000.00 395,000.00 Over 360 days

24,109,971.02 33,602,692.52 4,081,008.00 1,672,310.84

Total

9. LOANS TO SUBSIDIARIES COMPANIES - PROMISSORY NOTES As at December 31, 2007 and 2006, the Company has loans to two and one subsidiary companies, respectively by receiving promissory notes amount of Baht 311.00 million and Baht 248.28 million, respectively due at call at the interest rate of MLR, MLR + 2% per annum without collaterals.

The borrowing of a subsidiary company is based on the condition in agreement of shareholders.

147 Annual Report 2007

Notes to Financial Statement 10. INVENTORIES

Finished goods - House for sales - Construction supplies Land and land development Work in process Expenses relating to project Deferred interest

Total

Consolidated (Baht) 2007 2006

79,829,263.90 46,164,934.34 1,416,865.78 1,389,115.17 2,283,053,469.24 2,426,041,071.82 2,237,706,065.25 1,274,716,316.12 34,850,218.74 26,709,676.52 172,481,184.38 98,082,011.27 4,809,337,067.29 3,873,103,125.24

 Separated (Baht) 2007 2006

79,829,263.90 46,164,934.34

0.00 0.00 1,857,536,326.59 1,755,096,654.80 1,864,953,155.28 811,857,288.13 29,615,919.83 20,549,679.31 101,424,351.23 46,348,224.52 3,933,359,016.83 2,680,016,781.10

As at December 31, 2007 and 2006, most of land with its construction of each project of the Company and subsidiaries in the amount of Baht 4,668.72 million and Baht 3,589.95 million, respectively (Baht) 3,853.71 million and Baht 2,398.25 million, respectively for the Company only,) were mortgaged as collateral for overdrafts lines and short-term loans from financial institutions, aval promissory notes and long - term loans as mentioned in note 15, 17, 20 and 22, respectively.

As at December 31, 2007 and 2006, the Company and subsidiaries have recorded interest payment as cost of project of Baht 153.94 million and Baht 93.61 million, respectively (Baht 81.44 million and Baht 45.73 million, respectively for the Company only).

11. INVESTMENT IN SUBSIDIARIES

Consolidated (Baht)

Percentage

of shareholding Growed Yotha Group 99.99

Co., Ltd.

2007 Equity

Cost

Dividend

2006 Equity

Cost

Dividend

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Percentage 2007 2006 (Restated)

of shareholding Cost Equity Dividend Cost Equity Growed Yotha Group 99.99 32,000,000.00 0.00 7,099,574.00 32,000,000.00 0.00 Co., Ltd.

Dividend

Prinventure Co., Ltd. 51.00 CNSPR (Thailand) 99.97 Co., Ltd.

Total

Separated (Baht)

0.00

Prinventure Co., Ltd. 51.00

51,000,000.00

0.00

0.00 38,887,500.00

0.00

0.00

CNSPR (Thailand) Co., Ltd.

99.97

2,000,000.00

0.00

0.00

0.00

0.00

0.00

85,000,000.00

0.00 7,099,574.00 70,887,500.00

0.00

0.00

Total

2007 Annual Report

148

Notes to Financial Statement 12. LAND AND EQUIPMENT - NET 2006 Cost : Land Building and construction Machinery and equipment Computer Office furniture Office supplies Vehicles Total Accumulated depreciation :Building and construction Machinery and equipment Computer Office furniture Office supplies Vehicles Total Land and equipment – net

Increase

Consolidated (Baht) Decrease

Transfer in (Transfer out)

2007

3,279,342.43 0.00 0.00 2,196,710.00 4,015,004.24 45,655.42 0.00 8,048,186.82 8,062,698.78 0.00 29,556,573.49 4,549,659.24 25,669,335.81 2,110,287.00 70,582,954.75 16,950,498.48

0.00 0.00 3,279,342.43 0.00 0.00 2,196,710.00 (1,690,600.00) 0.00 2,370,059.66 0.00 14,753,114.77 22,801,301.59 0.00 0.00 8,062,698.78 (231,335.82) (14,753,114.77) 19,121,782.14 0.00 0.00 27,779,622.81 (1,921,935.82) 0.00 85,611,517.41

0.00 110,617.12 2,775,244.36 421,539.53 0.00 3,762,233.26 4,255,878.40 1,611,986.16 11,385,519.06 2,603,343.25 15,737,658.54 3,962,754.61 34,154,300.36 12,472,473.93 36,428,654.39

0.00 (1,690,599.00) 0.00 0.00 (117,772.98) 0.00 (1,808,371.98)

0.00 110,617.12 0.00 1,506,184.89 5,254,272.44 9,016,505.70 0.00 5,867,864.56 (5,254,272.44) 8,616,816.89 0.00 19,700,413.15 0.00 44,818,402.31 40,793,115.10

As at December 31, 2007 and 2006, the Company and subsidiaries have fixed assets at cost of Baht 10.99 million and Baht 7.11 million, respectively which were fully depreciated but are still being operated.

Depreciation for the year ended December 31, 2007 and 2006 amounted to Baht 12.47 million and Baht 10.97 million, respectively.

Separated (Baht) Transfer in (Transfer 2006 2007 Increase Decrease out) Cost : Land 3,279,342.43 0.00 0.00 0.00 3,279,342.43 Building and construction 0.00 2,196,710.00 0.00 0.00 2,196,710.00 Machinery and equipment 4,013,204.24 39,590.00 (1,690,600.00) 0.00 2,362,194.24 Computer 0.00 7,677,730.94 0.00 14,753,114.77 22,430,845.71 Office furniture 6,647,691.98 0.00 0.00 0.00 6,647,691.98 Office supplies 28,087,794.29 4,202,846.44 (186,335.82) (14,753,114.77) 17,351,190.14 25,640,831.14 2,110,287.00 0.00 0.00 27,751,118.14 Vehicles Total 67,668,864.08 16,227,164.38 (1,876,935.82) 0.00 82,019,092.64 Accumulated depreciation :Building and construction 0.00 110,617.12 0.00 0.00 110,617.12 Machinery and equipment 2,773,860.36 420,352.32 (1,690,599.00) 0.00 1,503,613.68 Computer 0.00 3,706,411.16 0.00 5,254,272.44 8,960,683.60 Office furniture 4,167,832.41 1,329,493.81 0.00 0.00 5,497,326.22 Office supplies 11,037,676.23 2,287,050.04 (85,768.21) (5,254,272.44) 7,984,685.62 15,713,840.42 3,958,069.06 0.00 0.00 19,671,909.48 Vehicles Total 33,693,209.42 11,811,993.51 (1,776,367.21) 0.00 43,728,835.72 33,975,654.66 38,290,256.92 Land and equipment – net

149 Annual Report 2007

Notes to Financial Statement

As at December 31, 2007 and 2006, the Company has fixed assets at cost of Baht 10.99 million and Baht 7.11 million which were fully depreciated but are still being operated.

Depreciation for the period ended December 31, 2007 and 2006 amounted to Baht 11.81 million and Baht 10.67 million, respectively.

As at December 31, 2007 and 2006, the Company’s land was mortgaged as collateral for overdraft lines with a commercial bank of subsidiary company as mentioned in note 15.

13. LAND HELD FOR DEVELOPMENT Consolidated (Baht) 2007 Land and cost of land development

Separated (Baht) 2006

2007

2006

126,533,625.00

69,533,625.00

69,533,625.00 69,533,625.00

126,533,625.00

69,533,625.00

69,533,625.00 69,533,625.00

As at December 31, 2007 and 2006, land held for development of the Company of Baht 69.53 million are mortgaged as collateral for the overdraft lines as mentioned in note 15.

14. DEPOSIT AT BANKS WITH COMMITMENT

As at December 31, 2007 and 2006, the Company and subsidiaries have savings deposit and fixed deposit amount of Baht 91.64 million and Baht 92.09 million, respectively (Baht 80.61 million and Baht 85.85 million, respectively for the Company only). Some savings deposit of Baht 74.53 million and Baht 55.82 million, respectively (Baht 65.94 million and Baht 55.38 million, respectively for the Company only) are deposits from collected the central utilities service expenses from clients. The Company has commitment to assign such collection to each village committee when they have been already appointed. The Company has recorded such liabilities as other payables in the financial statements. The remaining is used as guarantee for the aval of promissory notes with a commercial bank for the issuance of letter of guarantee as stated in note 17, 30.1 and 30.2.

15. BANK OVERDRAFTS AND SHORT - TERM LOANS FROM FINANCIAL INSTITUTIONS Consolidated (Baht)

Separated (Baht)

2007

2006

15,176,749.53

946,094.06

Bill of exchange – financial institutions

199,615,168.77

246,726,593.03

Promissory notes – commercial bank

180,000,000.00

80,000,000.00

180,000,000.00

80,000,000.00

Short-term loans – commercial bank

38,847,730.63

0.00

10,000.00

0.00

433,639,648.93

327,672,687.09

Bank overdrafts

Total

2007

2006

13,038,218.26

17,780.47

199,615,168.77 246,726,593.03

392,663,387.03 326,744,373.50

Annual Report 2007

150

Notes to Financial Statement Loans from financial institutions – bill of exchange Consolidated (Baht) 2007 Bill of exchange

Separated (Baht)

2006

2007

2006

200,000,000.00 250,000,000.00 200,000,000.00 250,000,000.00

Less Interest expense discount

(384,831.23)

Bill of exchange – net

(3,273,406.97)

(384,831.23)

(3,273,406.97)

199,615,168.77 246,726,593.03 199,615,168.77 246,726,593.03

As at December 31, 2007 and 2006, the Company and subsidiaries have bank overdrafts lines of Baht 100.00 million and Baht 80.00 million, respectively (Baht 80.00 million and Baht 60.00 million, respectively for the Company only) guaranteed by project’s land with its construction, land and equipment - net, land held for development and the Company’s guarantee as mentioned in note 10, 12, 13 and 30.3, respectively.

As at December 31, 2007 and 2006, the Company issued bill of exchange to financial institution for the amount of Baht 200.00 million and Baht 250.00 million, respectively are due in 2008 at the interest rate of 4.60 - 5.8% per annum.

As at December 31, 2007, the Company issued promissory notes to a commercial bank in the amount of Baht 180 million at the interest rate of 4.85 - 4.90% per annum, are due in 2008 without collaterals.

As at December 31, 2006, the Company issued promissory notes to a commercial bank of Baht 80.00 million at the interest rate of MLR - 1.25% per annum, guaranteed by project ‘s land and construction and by related persons’ land as mentioned in note 10 and 28.16, respectively. The repayment due to such promissory notes in whole amount was made by the Company in June 2007.

As at December 31, 2007, the Company has loans from commercial bank amount of Baht 10,000.00 at interest rate of MLR - 0.5% per annum, guaranteed by project’s land with its construction as mentioned in note 10.

As at December 31, 2007, a subsidiary has obtained loans from a commercial of Baht 38.85 million from credit line of Baht 170 million at the interest rate of MLR - 0.75% by making on monthly basis and the principal will be repaid base on the redemption of property foreclosed in the proportion at 70% of selling price. Such loans are guaranteed by mortgaging land with its construction of loaned project as stated in note 10 and by the Company’s guarantee in the amount of Baht 86.70 million in note 30.3.

16. SHORT - TERM LOANS - PROMISSORY NOTES Consolidated (Baht) Note Individuals

2007

Separated (Baht)

2006

2007

2006

0.00

72,000,000.00

0.00

72,000,000.00

Intimate persons

28.6.1

0.00

20,000,000.00

0.00

20,000,000.00

Related companies

28.6.2

245,000,000.00

238,546,700.00

0.00

0.00

Directors

28.6.3

50,000,000.00

0.00

50,000,000.00

0.00

295,000,000.00

330,546,700.00

50,000,000.00

92,000,000.00

Total

151 Annual Report 2007

Notes to Financial Statement

As at December 31, 2007 and 2006, the subsidiary issued promissory notes at the interest rate of MLR + 2% per annum which are due at call without collaterals. The borrowing is based on the condition in agreement of shareholders.

As at December 31, 2007, the Company issued promissory notes to a director in the amount of Baht 50.00 million at the interest rate of 5% which are due in June 2008 without collaterals.

As at December 31, 2006, the Company issued promissory notes to an individual and intimate person in the amount of Baht 92 million at the interest rate of 5% per annum which are due at call without collaterals. The repayment due to such promissory notes in whole amount was made by the Company in April 2007.

17. LAND PAYABLE - PROMISSORY NOTES

As at December 31, 2007 and 2006, the Company has land payable - promissory notes of Baht 51.69 million and Baht 64.17 million aval by commercial bank. Such aval are guaranteed by land with its construction and deposit at bank with commitment as mentioned in note 10 and 14, respectively.

18. ACCOUNTS AND NOTES PAYABLE Consolidated (Baht)

Separated (Baht)

Note

2007

28.7

1,186,744.63

0.00

- Others

224,944,928.63

235,803,139.15

Notes payable

23,057,163.01

5,505,494.29

249,188,836.27

241,308,633.44

2006

2007

2006

Accounts payable - Related companies

Total

12,361,305.08

11,230,614.03

172,973,428.55 188,452,536.55 22,845,316.41

1,681,554.39

208,180,050.04 201,364,704.97

19. CURRENT PORTION OF LONG-TERM LIABILITIES

Consolidated (Baht) 2007

Separated (Baht)

2006

2007

2006

Beginning balance

Note

0.00

0.00

0.00

0.00

Add Long-term land payable promissory notes

20

100,000,000.00

0.00

0.00

0.00

Add Liabilities under financial lease agreement

21

1,505,805.78

0.00

1,386,636.42

0.00

Add Long-term loans

22

662,691,190.14

0.00

662,691,190.14

0.00

764,196,995.92

0.00

664,077,826.56

0.00

Total

Annual Report 2007

152

Notes to Financial Statement 20. LAND PAYABLE - LONG - TERM PROMISSORY NOTES - NET Consolidated (Baht) Note Land payable - promissory notes

2007

Separated (Baht)

2006

2007

100,000,000.00 100,000,000.00

2006 0.00

0.00

0.00

0.00

0.00

0.00 100,000,000.00

0.00

0.00

Less Current portion of long term liabilities

19 Total

(100,000,000.00)

As at December 31, 2006, a subsidiary issued promissory notes for purchase of land in the amount of Baht 100.00 million aval by commercial bank. Such aval are guaranteed by land with its construction and by the Company’s guarantee as mentioned in note 10 and 30.3, respectively.

Such promissory notes are due in February 2008, therefore, was transferred to be current portion of long - term liabilities in whole amount. However, subsidiary could withdraw long - term loans from such avaled bank when such promissory notes are matured, under the condition of principal repayment based on the properties foreclosed redemption as stated in note 22.

21. LIABILITIES UNDER FINANCIAL LEASE AGREEMENT

Assets for lease under financial lease agreement are detailed as follows :

Computer Less Accumulated depreciation Net book value

Consolidated (Baht) 2007 2006 4,652,092.40 0.00 (580,008.53) 0.00 4,072,083.87 0.00

Separated (Baht) 2007 2006 4,281,636.52 0.00 (524,186.43) 0.00 3,757,450.09 0.00

The minimum amount to be paid under financial lease agreement are as follows :

Within 1 year Over 1 year, less than 3 years Less Future interest expenses of ffiinancial lease agreement Present value of liabilities under ffiinancial lease agreement

153 Annual Report 2007

Consolidated (Baht) 2550 2549 1,712,470.80 0.00 2,216,609.86 0.00 3,929,080.66 0.00

Separated (Baht) 2550 2549 1,578,690.84 0.00 2,060,981.57 0.00 3,639,672.41 0.00

(306,395.36)

0.00

(286,102.87)

0.00

3,622,685.30

0.00

3,353,569.54

0.00

Notes to Financial Statement

Liabilities under financial lease agreement excluding future interest expenses are as follows : Note Liabilities under financial lease agreement Less Liabilities under financial lease agreement due within 1 year

19

Liabilities under financial lease agreement - net

Consolidated (Baht) 2007 2006 3,622,685.30 0.00

Separated (Baht) 2007 2006 3,353,569.54 0.00

(1,505,805.78)

0.00

(1,386,636.42)

0.00

2,116,879.52

0.00

1,966,933.12

0.00

22. LONG - TERM LOANS - NET Consolidated (Baht) Note

2007

2006

Separated (Baht) 2007

2006

Long - term loans from - Commercial banks

1,923,729,793.36 1,188,000,279.72 1,883,573,823.36 714,546,200.72

1,923,729,793.36 1,188,000,279.72 1,883,573,823.36 714,546,200.72

Total

Less Current portion of long-term loans

Total

19

(662,691,190.14)

0.00 (662,691,190.14)

0.00

1,261,038,603.22 1,188,000,279.72 1,220,882,633.22 714,546,200.72

As at December 31, 2007 and 2006, the Company has loans from 5 local commercial banks and financial institutions for total credit lines of Baht 4,954.06 million and Baht 3,001.00 million, respectively at the interest rate of MLR -1.75% to MLR and MOR per annum by making monthly payment. The repayment of principal will be made on the redemption of mortgaging real estate foreclosed in the proportion of 70 - 80% of selling price.The Company has to complete the loan repayment in 2008 - 2010. Such loans are guaranteed by mortgaging land with construction of each loaned project as stated in note 10, guaranteed by related persons’ land as stated in note 28.16.

As at December 31, 2007 and 2006, a subsidiary has loans from a commercial bank for credit line of Baht 684.54 million and Baht 1,001.44 million, respectively at the interest rate of MLR - 0.5% to MLR per annum by making monthly payment. The repayment of principal will be made on the redemption of mortgaging real estate foreclosed in proportion of 70 - 75% of selling price. The Company has to complete the loan repayment in 2011. Such loans are guaranteed by mortgaging land and construction of each loaned project as stated in note 10 and guaranteed by the Company in the amount of Baht 349.12 million and Baht 510.73 million, respectively as stated in note 30.3.

Annual Report 2007

154

Notes to Financial Statement 23. SHARE CAPITAL

23.1 According to the minutes of shareholders’ extraordinary meeting no. 3/2007 and no. 4/ 2007 held on August 27, 2007 and September 14, 2007, respectively, a subsidiary passed the resolution to increase share capital from 0.01 million shares to 0.02 million shares of Baht 100.00 each, resulted the increase in the subsidiary’s share capital from Baht 1.00 million to Baht 2.00 million and all shares are common shares with the fully paid-up increase share capital of total amount of Baht 1.00 million. The subsidiary has registered the increase share capital with the Ministry of Commerce on september 19, 2007.

23.2 According to the minutes of the Company’s Board of directors and shareholders’ general meeting no.1/2007 held on February 23, 2007 and March 26, 2007, respectively, approved to increase share capital from 670 million shares to 1,340 millions at par value of Baht 1 each as follows:

- Capital increase of Baht 335 million by way of issuance 335 million common shares as a rights issue to current shareholders whose names appear in the shareholders’ register book on the closure of shareholders’ register book of 5 April 2007 at 12.00 p.m. (noon) under the subscription rate of 2 common shares per 1 new common share at the selling price of Baht 1.50.

Thus, shareholders may express their intention to over-subscribe the capital increase shares by filling in the Share Subscription Form. The remaining shares from un-exercise the right to purchase shares or subscription over time, or not fully exercise the right to purchase shares shall be allotted to shareholders who expressed their intention to over-subscribe shares in accordance with their shareholding rights prior the subscription of capital shares from the previous paragraph for the subscription rate of 2 common shares for 1 new common shares until the remaining capital increase shares are fully subscribed.

If there is a fraction of share remaining and not enough for subscription in accordance with the above subscription rate, Executive Directors shall consider the allocation of such fraction of shares where appropriate.

- Capital increase of Baht 335 million by way of issuance 335 million common shares offered to the public in accordance with the Securities and Exchange Commission’s Notification No. Gor. Jor. 12/ 2543 RE : Obtaining Approval and Approval for Issuance of Newly Issued Shares at the selling price of not under the par value of Baht 1 per share and not under 90 percent of market price. Such selling price will be confirmed by the Executive Directors as well as other conditions and details for the public offering in accordance with such notification specified above.

The Company has registered the paid-up of increase share capital with the Ministry of Commerce on April 30, 2007.

23.3 According to the minutes of shareholders’ extraordinary meeting no. 3/2006 and no. 4/ 2006 held on March 3, 2006 and March 20, 2006, respectively, a subsidiary passed the resolution to increase share capital from 0.50 million shares to 10 million shares of Baht10.00 each, resulted the increase in the subsidiary’s share capital from Baht 5.00 million to Baht 100.00 million and all shares are common shares with paid-up increase share capital of Baht 7.50 per share, total amount of Baht 71.25 million. The subsidiary has registered the increase share capital with the Ministry of Commerce on March 24, 2006.

155 Annual Report 2007

Notes to Financial Statement 24. LEGAL RESERVE

According to the Public Company Limited Act B.E. 2535, the Company is required to set aside a legal reserve at least 5% of annual net profit after deducting deficit brought forward (if any) until the reserve reaches an amount of 10% of the authorized share capital. Such legal reserve is not available for dividend distribution.

25. DIVIDEND PAID

According to the minutes of the Board of directors’ meeting no. 1/2007 and the minutes of shareholders’ annual general meeting for the year 2007 held on Febuary 23, 2007 and March 26, 2007, respectively, the Company passed the resolution to pay dividend for the results of its operation for the year 2006 at Baht 0.27 each, amounting to Baht 180.90 million which was paid to the shareholders on April 19, 2007.

According to the minutes of the Board of directors’ meeting no. 1/2006 and the minutes of shareholders’ annual general meeting for the year 2006 held on February 22, 2006 and April 24, 2006, respectively, the Company passed the resolution to pay dividend for the results of its operation for the year 2005 at Baht 0.18 each, amounting to Baht 120.60 million which was paid to the shareholders on May 24, 2006.

26. DIRECTORS’ REMUNERATION PAYMENT POLICY

According to the minutes of the shareholders’ general meeting no. 1/2007 held on March 26, 2007, required to pay directors’ remuneration including meeting allowance and gratuity for the year 2007 not exceed amount of Baht 2.48 million.

According to the minutes of the shareholders’ general meeting no. 1/2006 held on April 24, 2006 and additional approval of the shareholders’ extraordinary meeting no. 1/2005 held on September 22, 2005, required to pay annually remuneration for total amount not over than Baht 0.60 million to the executive director who is not the audit committee and may be received the additional remuneration in the form of gratuity. For the audit committee and independent directors will be received the annual remuneration for total amount not over than Baht 2.48 million and may be received the additional remuneration in the form of gratuity.

27. PROVIDENT FUND

The Company and empolyees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530 and the Provident Fund Act no. 2 (B.E. 2542) on June 25, 2004.

The fund is contributed both by the employees and the Company by deducting the employees’ salaries and the Company will pay a contribution. The contribution will be paid to the employees on their resignation in accordance with the fund regulation.

As at December 31, 2007 and 2006, the Company and subsidiaries paid the contribution to provident fund amount of Baht 2.56 million and Baht 1.83 million, respectively (Baht 2.43 million and Baht 1.74 million, respectively for the Company only).

Annual Report 2007

156

Notes to Financial Statement 28. TRANSACTION WITH RELATED PERSONS AND PARTIES No. 1

2

3

4

5

6

7

8

Persons or parties Mr. Santi Kovitchindachai

Growed Yotha Group Co., Ltd.

Prinventure Co., Ltd.

Uni Venture Plc.

Ms. Nipa Aphirathanarungruang

Thai Chinda Curtain Co., Ltd.

CNSPR (Thailand) Co., Ltd.

Ms. Siriluck Kovitchindachai

157 Annual Report 2007

Relationship

Shareholder

Subsidiary

Subsidiary

Shareholder of a subsidiary in 49% shareholding

Director of 2 subsidiaries and the Company’s management

Some directors are major shareholders of the Company

Subsidiary

The Company’s director

Type of relation

Loans to the Company

His land is used as guarantee the Company’s loans

Construction contract service and sales of goods

The Company used land to

guarantee overdrafts lines

Loans from the Company in the form of promissory notes

The Company guaranteed

all credit lines of project’s land with its construction Hire the Company to manage and administer the project Hire the Company to manage selling project

Hire the Company to oversee the garden and common facilities Hire the Company to set up

the garden

Loans to a subsidiary

Uni Venture Co., Ltd.

guaranteed all lines of project’s land with its construction of a subsidiary

Financial advisor of a subsidiary

Advance payment in using in the Company’s operation and repayment in short-term Sales and install the decoration materials to the Company

Loans to the Company in

form of promissory notes

Loans to the Company in

form of promissory notes

Pricing policy Loans are due at call at the agreed rate of 5.00% per annum by payment interest monthly

Price are close to market value

Loans are due at call at the agreed rate of MLR + 2% per annum by making interest together with principal Guarantee based on shareholding ratio

At the agreed service fee of Baht 0.35 million per month excluding VAT At the agreed service fee of 2% of total sales At the monthly agreed service fee of Baht 0.08 million At the agreed service fee

Loans are due at call at the agreed rate of MLR + 2% per annum by making interest together with principal Guarantee based on shareholding ratio

At the agreed service fee of Baht 0.09 million per month excluding VAT Non-inter interest bearing

Based on the normal course of business

Loans are due at call at the agreed rate of MLR per annum by paying with principal Loans are due in six months at the interest rate of 5% per annum by making monthly payment.

Notes to Financial Statement

Transactions and amounts of related persons and parties are as follows : 28.1 Accounts receivable

Uni Venture Plc. Deferred interest expenses

Separated (Baht)

Consolidated (Baht)

2007

Prinventure Co., Ltd. Accounts receivable - management

services 0.00 Accounts receivable - sales management services 0.00 Accounts receivable - others 0.00

Total 0.00

28.2 Inventory

2006

0.00

0.00 0.00 0.00

2007

2006

749,000.00

2,857,008.00 80,000.00 3,686,008.00

749,000.00

528,310.84 0.00 1,277,310.84

Separated (Baht)

Consolidated (Baht) 2007

2006

37,984,533.25

15,312,417.06

2007

2006

0.00

0.00

28.3 Short - term loans to related companies - promissory notes

Prinventure Co., Ltd. Beginning balance Loans received during the period Loans repaid during the period Ending balance CNSPR (Thailand) Co., Ltd. Beginning balance Loans received during the period Ending balance

Total

Consolidated (Baht) 2007

Separated (Baht)

2006

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

2007

2006

248,283,300.00 114,999,200.00 (108,282,500.00) 255,000,000.00

0.00 56,000,000.00 56,000,000.00 311,000,000.00

45,900,000.00 202,383,300.00

0.00 248,283,300.00

0.00

0.00

0.00 248,283,300.00

Annual Report 2007

158

Notes to Financial Statement

28.4 Advance from directors of subsidiaries and the Company’s management

Separated (Baht)

Consolidated (Baht)

Ms. Nipa Apirattanarungruang Beginning balance Received advance payment during the period Advance repayment Ending balance

2007

2006

0.00

18,757,500.00 (18,757,500.00) 0.00

2007

0.00

0.00 0.00 0.00

0.00

18,757,500.00 (18,757,500.00) 0.00

Consolidated (Baht) 2007

2006 0.00 0.00 0.00

Total

Separated (Baht) 2007 2006 0.00 39,079,685.44 15,881,907.55 0.00 2,084,082.19 0.00 0.00 41,163,767.63 15,881,907.55

28.6 Short - term loans - promissory notes

Consolidated (Baht) 2007 2006

28.6.1 Mr. Santi Kovitchindachai Beginning balance Loans received during the period Loans repaid during the period Ending balance

20,000,000.00 0.00 (20,000,000.00) 0.00

S eparated (Baht) 2007 2006

20,000,000.00 20,000,000.00 20,000,000.00

0.00 0.00 0.00

0.00 (20,000,000.00) 0.00 20,000,000.00 0.00 20,000,000.00

28.6.2 Uni Venture Plc. Beginning balance Loans received during the period Loans repaid during the period Ending balance

238,546,700.00 86,117,500.00 (79,664,200.00) 245,000,000.00

44,100,000.00 194,446,700.00 0.00 238,546,700.00

0.00 0.00 0.00 0.00

28.6.3 Ms. Siriluck Kovitchindachai 0.00 0.00 0.00 Beginning balance Loans received during the period 50,000,000.00 0.00 50,000,000.00 Loans repaid during the period 0.00 0.00 0.00 Ending balance 50,000,000.00 0.00 50,000,000.00

Total 295,000,000.00 258,546,700.00 50,000,000.00

159 Annual Report 2007

0.00

0.00 0.00 0.00

28.5 Accrued interest receivable - Short - term loans - promissory notes

Prinventure Co., Ltd. CNSPR (Thailand) Co., Ltd.

2006

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 20,000,000.00

Notes to Financial Statement

28.7 Accounts payable Consolidated (Baht)

2007 2006

Growed Yotha Group Co., Ltd.

Accounts payable - contractor, goods

0.00 0.00

Thai Chinda Curtain Co., Ltd. Accounts payable - decoration 1,186,744.63 2,086,584.83

Total 1,186,744.63 2,086,584.83

28.8 Retention

Separated (Baht)

2007

2006

11,174,560.45

1,186,744.63 12,361,305.08

9,144,029.20

2,086,584.83 11,230,614.03

Consolidated (Baht)

Growed Yotha Group Co., Ltd. Retention - construction cost Thai Chinda Curtain Co., Ltd. Retention - construction cost

Total

2007

0.00

138,399.00 138,399.00

Separated (Baht)

2006

2007

2006

4,948,858.33

138,399.00 5,087,257.33

0.00

0.00 0.00

6,445,816.70

0.00 6,445,816.70

28.9 Accrued interest payable - short - term loans - promissory notes

Consolidated (Baht)

Uni Venture Plc.

Prinventure Co., Ltd. CNSPR (Thailand) Co., Ltd.

2007

2006 0.00

0.00

Consolidated (Baht) Separated (Baht) For the year ended For the year ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 0.00 0.00 23,621,271.01 14,078,638.34 0.00 0.00 2,084,082.19 0.00 Total 0.00 25,705,353.20 14,078,638.34 0.00

28.11 Administrative income

Prinventure Co., Ltd.

Separated (Baht)

2007 2006 37,592,624.71 15,312,417.06

28.10 Interest receivable - short - term loans - promissory notes

Consolidated (Baht) Separated (Baht) For the year ended For the year ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 0.00 0.00 8,400,000.00 7,700,000.00

Annual Report 2007

160

Notes to Financial Statement 28.12 Sales management income

Prinventure Co., Ltd.

28.14 Cost of sales

Consolidated (Baht) Separated (Baht) For the year ended For the year ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 0.00 0.00 18,005,626.75 2,772,878.51

28.13 Other service income

Prinventure Co., Ltd.

Consolidated (Baht) Separated (Baht) For the year ended For the year ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 0.00 0.00 260,419.50 0.00

Consolidated (Baht)

For the year ended

December 31, 2007 December 31, 2006 Growed Yotha Group Co., Ltd.

- Contractual income 0.00 0.00 - Purchase of materials 0.00 0.00

0.00 0.00 Thai Chinda Curtain Co., Ltd.

- Decoration expenses 7,563,622.28 20,747,085.64

7,563,622.28 20,747,085.64

Total 7,563,622.28 20,747,085.64

28.15 Interest expenses

Consolidated (Baht)

For the year ended

December 31, 2007 December 31, 2006 Mr. Santi Kovitchindachai 276,712.34 775,616.43 Ms. Siriluck Kovitchindachai 123,287.67 0.00

Total 400,000.01 775,616.43

S eparated (Baht) For the year ended December 31, 2007 December 31, 2006

31,020,241.61 42,414,020.78 137,417,641.86 91,945,917.61 168,437,883.47 134,359,938.39

7,563,622.28 20,747,085.64 7,563,622.28 20,747,085.64 176,001,505.75 155,107,024.03

Separated (Baht) For the year ended December 31, 2007 December 31, 2006 276,712.34 775,616.43 123,287.67 0.00 400,000.01 775,616.43

28.16 Guarantee

As at December 31, 2007 and 2006, the Company has taken 1 plots of land for the area of 339.50 square wah of Mr. Santi Kovitchindachai to pledge as collateral for short - term loans promissory notes as stated in note15.

29. COMMITMENT

29.1 As at December 31, 2007 and 2006, the Company and subsidiaries had commitment to make payment for land under contract to buy and to sell for the amount of Baht 2,130.78 million and Baht 489.67 million, respectively (Baht 2,084.38 million and Baht 489.67 million, respectively for the Company only).

29.2 As at December 31, 2007 and 2006, the Company and subsidiaries had commitment on payment for rental from entering into long - term lease building agreement to be completed for the amount

161 Annual Report 2007

Notes to Financial Statement of Baht 4.31 million and Baht 9.34 million, respectively (Baht 2.21 million and Baht 6.64 million, respectively for the Company only).

29.3 As at December 31, 2007 and 2006, the Company and subsidiaries had commitment to make payment to the contractor for entering into hire of construction agreements of each project to be completed for the amount of Baht 1,080.16 million and Baht 1,068.57 million, respectively. (Baht 909.87 million and Baht 834.88 million, respectively for the Company only).

29.4 As at December 31, 2007 and 2006, the Company and subsidiaries had commitment to make payment for advertising signboard to be matured under rent agreement for the amount of Baht 9.32 million and Baht 7.33 million, respectively (Baht 7.67 million and Baht 6.58 million, respectively for the Company only).

29.5 Obligation and commitment to complete projects on hand

Consolidated Separated

2007 2006 2007 2006 Number of project on hand,

beginning of the period Number of closing project Number of new project Number of project on hand, ending of the period

Valuation of project on hand (million Baht) Contracted sales value (million Baht) Sales value of project on hand (%)

17 (5) 11

23

12,350.02 6,671.97 54.02

8 0 9

17

6,860.56 3,621.39 52.79

15 (5) 8

18

10,172.45 5,437.31 53.45

8 0 7

15

5,929.40 3,353.70 56.56

30. CONTINGENT LIABILITIES

30.1 As at December 31, 2007 and 2006, the Company and subsidiaries had contingent liabilities from letter of guarantee issued by bank for guarantee project development of Baht 237.29 million and Baht 192.75 million, respectively (Baht 182.79 million and Baht 168.29 million, respectively for the Company only).

30.2 As at December 31, 2007 and 2006, a subsidiary had contingent liabilities from letter of guarantee issued by bank for guatantee purchasing goods of Baht 2.00 million and Baht 5.00 million, respectively.

30.3 As at December 31, 2007 and 2006, the Company had contingent liabilities on guarantee for overdraft line, aval promissory notes, long - term loans and letter of guarantee credit line of subsidiary, Prinventure Co., Ltd. in the amount of Baht 443.47 million and Baht 544.12 million, respectively.

30.4 As at December 31, 2007 and 2006, the Company was sued in the 3 civil cases as follows :

30.4.1 The Company cancelled the contract to buy and to sell and confiscated the deposit from a customer in amount of Baht 800,000.00 for defaulting on debt payment of such customer. The Primary Court ordered the Company to pay Baht 296,000.00 including interest at the rate of 7.5% per annum of principal of Baht 148,000.00 counted from September 15, 2003 to October 14, 2003 and of principal of Baht 296,000.00 counted from October 15, 2003 onwards. At present, the case is still pending the Appeal Court’s consideration.

Annual Report 2007

162

Notes to Financial Statement

30.4.2 In 2005, the Company was sued in the alleged for mistake about hire of work, to make payment in the amount of Baht 6.50 million. The Primary Court has ordered to revoke the case on February 9, 2007.

30.4.3 In 2006, the Company was sued in breaching hire of construction contract and claimed for wages, compensation, benefits and refund in the amount of Baht 170.77 million. The Company has testified that the contractor is the breacher of agreement since the delay of construction.

However, the Company has recorded liabilities as accounts payable as at December 31, 2006 of Baht 52.15 million. Later, the contractor accepted to pay the fines from delay of construction, therefore, the Company and the contractor have made the compromising agreement and must comply with such agreement due to the Court’s ordering. On January 23, 2007, the Company has to pay the construction cost to the contractor after deducted fines from delay of construction of Baht 40.14 million which is less than liabilities recorded as accounts payable of Baht 12.01 million. The Company has fully make payment to the contractor due to the order of the Court on February 7, 2007 and the Company recorded the reduced liabilities which is not to be repaid as other income in statements of income amount of Baht 12.01 million.

30.5 In 2004, the Company and a director were sued in the criminal case for the alleged of account payable default about purchasing the land to develop the Company’s project. The seller entered into the sale and purchase agreement with another buyer. The litigant sued after the Company was transferred the right on title deed from the seller. On June 19, 2006, the Minburi Province Court has already revoked this case.

At present, the case is still pending the Appeal Court’s consideration.

31. SEGMENT INFORMATION

The Company and subsidiaries have operated in real estate business and sales of construction materials and have construction materials value in proportion not exceeding 10% of total sales volume which is immaterial to the presentation of segment information.

32. DISCLOSURE AND PRESENTATION OF FINANCIAL INSTRUMENTS

32.1 Accounting Policy

The significant accounting policies and method adopted the basis of recognition and measurement relating to each class of financial assets and liabilities have been disclosed in note 5.

32.2 Interest Rate Risk

Interest rate risk from changes in market interest rate will affect the results of the Company’s operation and its cash flows. The Company’s financial instruments are mostly indicated the market interest rate.

32.3 Credit risk

Credit risk derives from failure by counterparties to discharge their obligations resulting in financial loss to the Company and subsidiaries. The Company’s management has manage the business with the carefully and adopted the accounting policy of income recognition from transferring ownership to the customer whenever the fully receives of payment is met. Subsidiary who engaged in distribution of construction materials, the management has adopted the policy to deal with creditworthly counterparties by determining the amount of credit line providing and provided allowance for doubtful accounts derived from credit risk.

163 Annual Report 2007

Notes to Financial Statement

32.4 Fair Value of Financial Instruments

Financial assets shown in balance sheets consist of cash on hand and at banks, current investment, promissory notes, accounts and notes receivables. Financial liabilities shown in balance sheets consist of bank overdrafts, short - term loans from financial institutions, promissory notes, accounts payable, assets payable and long - term loans.

The book value of financial assets and liabilities are close to their estimated fair value.

33. CHANGE IN ACCOUNTING POLICY FOR INVESTMENT IN SUBSIDIARIES

As stated in notes 2 to financial statements, the Company has changed the accounting policy for investment in subsidiaries in the separate financial statements from equity method to cost method. The Company has adjusted the beginning retained earnings of the year 2007 and retroactively restated the 2006 separate financial statements by using cumulative effect of change in accounting policy. From this change, resulting to the decrease in beginning retained earnings and investment in subsidiaries in the separate financial statements as at December 31, 2007 by the same amount of Baht 12.51 million and the 2006 separate financial statements had changed as follows :

Separated balance sheets (Baht) as at December 31, 2006 Previous

Restated

Variance

83,394,762.10 70,887,500.00 12,507,262.10

Investment in subsidiaries 472,426,800.64 463,019,854.90 9,406,945.74 Unappropriated retained earnings - beginning 777,226,249.89 764,718,987.79 12,507,262.10 Unappropriated retained earnings - ending

Separated statements of income (Baht)

For the year ended December 31, 2006

Previous Restated Variance Gain on net operation of subsidiaries under

equity method

12,345,805.74 0.00 12,345,805.74 (Loss) on net operation of subsidiaries under equity method -9,245,489.38 0.00 -9,245,489.38

Total 3,100,316.36 0.00 3,100,316.36 Net profit

447,799,449.25 444,699,132.89 3,100,316.36

Basic earnings per share

Net profit

0.67 0.66 0.01 34. FINANCIAL STATEMENTS APPROVAL

These interim financial statements have been approved to be issued by the Company’s Board of directors on February 20, 2008.

Annual Report 2007

164