PRIN: Annual Report 2008 by Prinsiri Public Company Limited

Annual Report 2008 1

Annual Report 2008

Message from the Chairman of the Board Audit Committee Annual Report Report of the Board of Directorsâ&#x20AC;&#x2122; Responsibilities Nature of Business Products Future Projects Capital Structure Dividend Payment Policy Structure of Management Related Transactions Risk Factors Financial Position and Operation Results Summary of Financial Position of the year 2008 Auditor Report Financial Statement Note to Financial Statement

8 10 15 16 22 25 27 29 46 58 61 63 75 76 86

Annual Report 2008 3

Annual Report 2008

Annual Report 2008 5

Annual Report 2008

Message from the Chairman of the Board Dear Shareholders In 2008, the overall economics in Thailand and real estate sector was affected by many factors including sub-prime crisis, dramatically increase of petrol price, progressive increase of construction materials, especially steel, fluctuations of interest rate and exchange rate and unstable domestic politics. Compared to the previous year, the economics and real estate development slowly grew. However, there was serious competition among big developers. Each developer had to adjust themselves to maintain their market margin. Despite of many tough situations, the Company had intended to operate its business to achieve the set objectives with transparency and fairness under the good corporate governance. The Company has committed to become one of good corporate governance and successful real estate developer. The business operation is then conducted carefully. The Company has always improved products to well respond to changed requirement of consumers and adjust its marketing strategies to increase competition capability. In 2009, the Company will launch new projects with consideration, dedication, and cautiousness. The operation system will be improved for higher effectiveness by adopting information technology and promoting staffâ&#x20AC;&#x2122;s knowledge and abilities. All employees are encouraged to realize the corporate values. They are well prepared to handle work against fluctuation of present market and high competition. In addition, the Company focuses on product development to respond the needs of consumers and quality improvement in order to maintain its market margin and growth rate. 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 analysts, 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 all parties.

Mr. Mongkol Pao-in Chairman of the Board

Miss Siriluck Kovitchindachai Chief Executive Officer

Mr. Veera Srichanachaichok Managing Director Annual Report 2008 7

Audit Committee Annual Report To The Shareholders The Board of Audit Committee comprises of three independent directors: 1. Mr. Surabhon Kwunchaithunya Chairman of Audit Committee 2. Lt. Sivaraks Phinicharomna Director of the Audit Committee 3. Mrs. Moogda Arriyawat Director of the Audit Committee None of these directors are employees of Prinsiri Public Company Litmited. In 2008 , the Audit Committee called for the meeting five times to consider and precede the following major activities. • Reviewing the financial report and adequacy disclosure of data. The Committee coordinate with auditor and responsible management who make quarter and annual financial reports. The Committee may suggest the auditor, review or inspect any transaction or important issue as needed during the audit process. • Reviewing the efficiency of the internal control and internal audit by co-reviewing with the auditor and internal auditors. • Discussing and considering scope of inspection and inspection plan of the internal auditors and auditor to relate and support each other for financial auditing. • Reviewing the finanaical statements during the year with the internal auditors and auditor prior to submission to the regulators. • Proposing the Board of Directors to appoint the auditor of the Company for the year 2009 by nominating Mrs. Suwimon Kotthayakiat and/or Miss Somjintana Polhirunrat, of DIA International Auditing and also considering the auditing remuneration for the approval from the Board. • Reviewing compliance with guidelines for listed companies on the Securities Exchange of Thailand and relevant laws and regulations. • Reviwing and giving recommendations for revision of interal audit charter to the Board of Directors to be up-to-date and respond to the Company’s environment and business operation. • Other business as assigned by the Board of Directors and the Committee agreed to do so. The Committee is of the view that the Company’s financial statements for the fiscal year 2008 are correctly formulated according to the generally accepted accounting principles with adequate disclosure of information. The internal control system for efficiency assessment is sufficient. All transactions comply with laws and regulations. The management has committed to run the Company’s business within good moral framework. The Internal Audit team reports its inspection directly to the Audit Committee and monitors recommended corrective action progressively and regularly. (Mr. Surabhon Kwunchaithunya) Chairman of the Audit Committee February 23, 2009 8

Annual Report 2008

Annual Report 2008 9

Report of the Board of Directorsâ&#x20AC;&#x2122; Responsibilities

for Financial Statemetus

The Company Board of Directors is responsible for finanacial statements of Prinsiri Public Company Limited including information in the annual report. The financial statements are prepared according to the generally accepted accounting principles. Appropriate accounting policy is carefully set and always has been implemented. The Board does their best to condider consciously and prepare the most accurate report. Regarding transparent benefits of the shareholders and general investers, the Board intends to disclose sufficient significant data on the notes to financial statements. The Board employs risk management to maintain appropriate and efficient internal control. This is to ensure that the accounting data is reasonable correct, complete and sufficient for assets maintenance and that there is significant prevention for any corruption or unusual action. The Audit Committee reviewed the accounting policy and qualiy of the financial statements, internal control and internal inspection, and risk management. The comments of the Committee is presented on the Audit Committee Annual Report, which is part of the Companyâ&#x20AC;&#x2122;s annual report. The Companyâ&#x20AC;&#x2122;s financial statements were reviewed by the auditor, DIA International Auditing. For the purpose of transparently auditing, the Board supported all related information and documents. Therefore, the auditor could investigate and comment completely according to the accounting standards. On the statement from the auditor in the annual report, it is presented that the auditor had unqualified audit opinion. The Board agrees that the overall internal control is satisfying and can assure that the financial statements of Prinsiri Public Company Limited for the year ended 31 December 2008 are reasonable as well as in compliance with generally accepted accounting principles and regulations related to the business. (Mr. Mongkol Pao-in) (Miss Siriluck Kovitchindachai) Chairman of the Board Chief Executive Officer

Annual Report 2008

Directors and Executive Boards of the Companyâ&#x20AC;&#x2122;s Subsidiaries As of December 31, 2008 Grow Yotha Company Limited

Prin Venture Company Limited

CN SPR (Thailand) Co., Ltd.

Mr. Chaiwat Kovitchindachai

/, //

Mr. Namchai Vanapanubet

/, //

Mrs. Oradee Na Ranong

/, //

Mr. Thanapol Sirithanachai

/, //

Mrs. Pailin Wichetthawichai

Mr. Chairat Kovitchindachai

Ms. Siriluck Kovitchindachai

/, //

Mr. Kwanchai Mongkolkittaveepol

/, //

Name

Ms. Nipha Aphirattanarungruang

Mr. Sakol Pao-in Note : / = Director // = Executive Director

Annual Report 2008 11

Annual Report 2008

Part 2 1. ISSUER Company name : Sector : Head office : Registration no. : Website : Telephone : Fax :

PRINSIRI PUBLIC COMPANY LIMITED Property Development Sun towers, Floor 12, Building A, 123 Viphavadee-rangsit Road, Chomphon, Chatuchak, Bangkok 10900 0107574700320 www.prinsiri.com 0-2617-6900 0-2617-6910-1

Annual Report 2008 13

Annual Report 2008

2. Nature of Business 2.1 Background and Significant Development Prinsiri Public Company Limited was incorporated as the limited company on February 23rd, 2000 with the initial registered 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 and good practice for “the Best Energy-saving Home Awards in 2007 and 2008” respectively, which held by the Department of Alternative Energy Development and Efficiency formerly, Ministry of Energy. As at 31 December 2008, the Company has registered capital of Baht 1,340 million and paid up registered capital of Baht 1,005 million. 2.2 Overview of Business of the Company and its Subsidiaries Prinsiri Public Company Limited, the Company, and Prin Venture, 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 Living House in Harmony with Nature”. 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 need 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.

Structure of Shareholding of Prinsiri Public Company Limited As at 31 December 2008 Prinsiri Public Company Limited Registered capital of 1,340 MB, Paid-in registered capital of 1005.00 MB. “Real Estate Developer” 51.00%

99.99%

Prin Venture Company Limited Grow Yotha Group Company Limited CN SPR (Thailand) Company Limited Paid-in registered capital of 100.00 MB. Paid-in registered capital of 32.00 MB. Paid-in registered capital of 2.00 MB. “Real Estate Developer” “Real Estate Selling and Leasing” “Contractor and Material Distributor”

Annual Report 2008 15

2.3 Revenue Structure of the Company Revenue structure of the Company and subsidiaries Revenue

Operator

Detached house – upper market Detached house – middle market/ Semi detached house Townhouse/Home Office Condominium Land Total revenue from property sales Revenue from goods sales Other revenues

Prinsiri

2007 2008 Consolidated Consolidated financial statement financial statement MB % MB %

121.22

Prinsiri/Prin Venture 1,321.88

4.64

123.50

2.83

50.62 1,238.29

28.34

41.39 2,107.52 48.24 Prinsiri/Prin Venture 1,080.74 - - 2.29 0.05 Prinsiri Prinsiri/CN SPR - - 827 18.93 96.65 4,298.60 98.39 Prinsiri/Prin Venture 2,523.84 2.36 26.14 0.59 Grow Yotha Group 61.62 Company/ 25.78 0.99 44.42 1.02 Subsidiaries Total revenue 2,611.24 100.00 4,369.16 100.00 Note : Selling price of detached house for upper market starts from Baht 7 million. Selling price of detached house for middle market is Baht 3-7 million. Major revenue of the Company is from selling property. In 2007 and 2008 the Company and subsidiaries had proportion of revenue from selling property to the total revenue as 96.65 percent and 98.39 percent respectively. In 2007, most of revenue was from selling single detached house and semi detached house, representing 52.01 percent and 50.62 percent. For the year 2008, most of revenue was from selling townhouse and home office, which was 48.24 percent of the total revenue. In 2008, the Company started selling the units of five new condominium projects. Those under construction projects include the Complete Naratiwas, the Complete Rajchaprarop, the Pulse Phaholyothin 37, the Smart Condo Rama II and the Pride Condominium (Pattaya). 3.1 Type of Products Prinsiri Public Company Limited The Company engages in real estate development business by providing ready built housing estates and condominiums as a 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 Living House in Harmony with Nature”.

3. Products

Annual Report 2008

3.1.1 Housing Estate 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. House or building style and project design of individual project is unique by location and customers’ needs. However, each project under the Company’s operation will have complete infrastructure, facilities and safety such as a clubhouse, a swimming pool, a village park and security system. The Company’s housing estate projects can also be classified by product identity and target group and developed under following project names. (1) Single Detached House (1.1) Single detached house for upper market Logo of the Project : Project Name : Siritawara Price Range : Baht 7.0 million and up Target Market : High income customers (1.2) Single detached house for middle market Project : Project Name : Prinyada Price Range : Baht 3.0-7.0 million Target Market : Relatively high income customers (1.3) Single detached house for middle market and up Project : Project Name : Baan Prinsiri Price Range : Baht 5.0-10.0 million Target Market : Medium to relatively high income customers (2) Semi Detached House Logo of the Project : Project Name : Prinyada Light Price Range : Baht 2.0-4.0 million Target Market : Medium income customers Annual Report 2008 17

(3) Town House & Home Office (3.1) 3-Story townhouse Logo of the Project : Project Name : Prinyaluck Price Range : Baht 2.0-3.0 million Target Market : Medium income customers (3.2) 2-Story townhouse Logo of the Project : Project Name : Prinyaluck Light and Baan Prin Price Range : Baht 1.5-4.8 million Target Market : Medium income customers (3.3) Home Office Logo of the Project : Project Name : Prinyaluck and Prinyaluck Light Price Range : Baht 2.0- 4.0 million Target Market : Medium income customers 3.1.2 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 unique 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. Condominium products are developed under three remarkable brands, which divided by market position and outstanding characteristics. The PULSE and SMART condominium projects represent low rise living condominiums (maximum height of 8-story) while the COMPLETE is for the high rise living condominiums (more than 8 - story)

Annual Report 2008

(1) Low rise condominium

Logo of the Project : Project Name : The Pulse Price Range : Baht 1.29 million and up Target Market : Medium to relatively high income customers Logo of the Project : Project Name : Smart Condo Price Range : Baht 0.69-1.00 million Target Market : Medium income customers Logo of the Project : Project Name : The Pride, Pattaya Price Range : Baht 2.00-5.00 million Target Market : Medium to high income customers (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 As at 31 December 2008, the Company and Prin Venture had details of some developing projects in 2008 as follow. (1) The Northern Prime, Rangsit Logo of the Project : Project Name : The Northern Prime, Rangsit Price Range : Baht 3.00-7.00 million Target Market : Medium to high income customers (2) The Northern Nova, Rangsit Logo of the Project : Project Name : The Northern Nova Price Range : Baht 1.50-3.00 million Medium income customers : Target Market Annual Report 2008 19

(3) The Euro Prime, Onnut-Suvarnabhumi

Logo of the Project : Project Name : The Euro Prime Price Range : Baht 3.00-7.00 million Target Market : Medium to high income customers (4) The Euro Nova, Onnut-Suvarnabhumi Logo of the Project : Project Name : The Euro Nova Price Range : Baht 1.00-3.00 million Target Market : Medium income customers 3.2 Industrial Events and Competition 3.2.1 Industrial Events Throughout the year 2008, the fluctuations of politics, temporary closing of Suvarnabhumi Airport, global economic recession, remarkable changes of petrol price and increase of inflation rate affected real estate market. Overall property market was slow growth. However, there were new projects opening in 2008, totally of 69,757 units, worth Baht 199,885 million. Housing was major part of new project development of 67,791 units. The total value was Bath 184,245 million or 97 percent of the total new projects in the market. It valued 92 percent of the total amount in 2008. 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 Comparison of new housing development projects in Bangkok Metropolitan Area and its peripheral provinces 2007 2008 Total number of housing units was 81,364. Total number of housing units was 67,791 Townhouse 22% Townhouse 30% condo 46% condo 55% Shophouse 2% Duplex 7% Shophouse 2% Duplex 5% SDH 14% SDH 17% Source : Agency for Real Estate Affairs Company Limited (AREA) 20

Annual Report 2008

In 2008, the number of new housing units in Bangkok and its peripheral provinces was 67,791. The big portion was condominium (46 percent), followed by townhouse (30 percent), single detached house (17 percent), semi detached house (5 percent), and commercial building (2 percent) respectively. The total worth was Baht 184,245 million. The average selling price per unit was Baht 2.72 million. New projects opening in BMA and its peripheral provinces in 2008, Classified by price range Price range SDH Duplex Townhouse Shophouse Condo Land Total % 500,000< - - - - 80 - 80 0.12% 500,001 - 1,000,000 - 96 5,125 - 4,014 - 9,235 12.00% - 2,000,000 1,000,001 449 1,027 9,240 - 11,562 6 22,284 32.87% 2,000,001 3,000,000 3,860 1,388 2,684 333 7,478 - 15,743 23.22% 3,000,001 4,028 843 3,003 472 5,243 - 13,589 20.05% - 5,000,000 5,000,001 - 10,000,000 2,965 - 138 301 2,374 - 5,778 8.52% 10,000,001 - 20,000,000 405 - 29 - 520 51 1,005 1.48% >20,000,000 - - 24 - 51 2 77 0.11% Total 11,707 3,354 20,243 Source : Agency for Real Estate Affairs Company Limited (AREA)

1,106

31,322

67,791

100%

According to housing price of new projects in Bangkok Metropolitan Area and its peripheral provinces in 2008, the selling price of single-family detached house, which was the majority, was Baht 3-5 million, representing 34.41 percent of new detached house projects. The second runner was detached house with worth of Baht 1-2 million, representing 32.97 of new detached house projects. For the semi detached house, the majority of new opening projects valued Baht 2-3 million, representing 41.38 percent of the total new semi detached houses. The second runner was semi detached house costing Baht 1-2 million, representing 30.62 percent of total new semi detached house projects. Among townhouses, the top opening project was those with price of Baht 1-2 million, representing 45.65 percent of the total new townhouses. It was followed by selling price of Baht 0.5-1 million, representing 25.32 percent of the whole new townhouse projects. The top proportion of commercial building was projects with offered price of Baht 3-5 million, representing 42.68 percent of the total new commercial building projects. The second part was those with Baht 2-3 million, representing 30.11 percent of total new commercial building projects. The majority of condominiums were new projects with worth of Baht 1-2 million, representing 36.91 percent of the total new opening condominium projects. The second run was those of Baht 2-3 million, representing 16.74 percent of the total new opening condominiums. Finally, allocating land was mostly offered for sales at the price of Baht 10-20 million, representing 86.44 percent of total allocating land projects. It followed by that of Baht 1-2 million, representing 10.17 percent of total allocating land projects. Annual Report 2008 21

3.2.2 Industry Trend and future competition The world recession crisis has been affected on Thai economics and real estate business since the end of 2008. It is predicted to continue to the year of 2009. Housing market in 2009 will then reflect the physical demand of consumers. Therefore, the Company takes all related factors into account and adjusts its business strategies to respond following factors. (1) Economic stimulus package The economic stimulus package will benefit real estate development because this sector significantly depends on economic state. â&#x20AC;˘ Extend the end of reduction in taxes and fees for one more year, from 28 March 2009 to 28 March 2010. Specific business tax for selling properties and condominium units reduce from 3 percent to 0.01 percent. Transfer fee for property transactions decreases from 2 percent to 0.01 percent. Registration fee for immovable property is reduced from 1 percent to 0.01 percent as well. â&#x20AC;˘ Increase the maximum of loan interest used to reduce personal income tax from Baht 100,000 to Baht 200,000. Package of property loan will also be offered to low income housing buyers. (2) Investment of mega projects There is investment in many mega projects, namely, many routes of sky train. This is a positive factor in overall and also promotes expansion of city communities and housing area. (3) Interest rate The interest rate possibly becomes lower in response to the world financial policies. It is positive factor for those who want to buy accommodation. Meanwhile, developers may have lower production costs because of decreased inflation rate affected by reduction of petrol prices and construction material costs. (4) Condominium location Interesting location of condominiums has been inner area of Metropolitan Bangkok and along the rotes of sky train.

4. Future Projects As at 31 December 2008, the Company and subsidiaries had a total of 25 active projects on hand, totally valued Baht 16,459.17 million. The worth of total sold unites was Baht 10,994.96 million. There were 6 projects in construction and expected to be opened for sale in 2009 and 2010, totally valued Baht 1,883.68 million. Details of those projects are followings.Â

Annual Report 2008

4.1 Prinsiri Projects Projects Condominium Pattaya, Sai Song, A Building Prinyaluck Light (Phase A) Watcharaphon Prinyaluck Light (Phase B) Watcharaphon Prinyaluck Light (Phase C) Watcharaphon Prinyaluck Light (Phase E) Watcharaphon

Types of Project/ Area (Rai)

Location

Condominium 1-0-31

Pattaya, Sai Song (Chonburi)

299.59

Quarter 1, 2010

2-story Townhouse Soi Watcharaphon 18-2-9.10

193

532.18

Quarter 1, 2010

2-story Townhouse Soi Watcharaphon 7-2-39.90

211.73

Quarter 1, 2010

2-story Townhouse Soi Watcharaphon 11-2-21.50

116

308.80

Quarter 3, 2009

2-story Townhouse Soi Watcharaphon 18-3-37.80

206

531.38

Quarter1, 2010

667

1,883.68

Total

4.2 Prin Venture Projects Projects Northern Exclusive Rangsit

Total Value Expected Opening Units (THB in Million) Date

Types of Project/ Area (Rai)

Location

2-story DH 10-0-18.60 Total

Vibhavadee Rd.

Total Value Units (THB in Million) 20

100.00

Expected Opening Date Quarter 3, 2009

Remark : The project belongs to Prin Venture 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 2008, 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 March 2008 is Baht 172 million. A subsidiary has a plot of land in Soi Pattaya-Na Kluea 12, Chonburi. The plot of 10-3-24.60 rai 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 2-4 plots of land for project development a year. The Company does not have a policy to maintain a land bank. Annual Report 2008 23

Annual Report 2008

5. Capital Structure

5.1 Securities holding in the Company As at 31 December 2008, 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. In the meeting of Ordinary General Meeting of Shareholders No. 1/2007, held on 26 March 2007, the meeting approved the issuing of 355,000,000 (Three Hundred Thirty Five Million) ordinary shares and offering to the existing shareholders based on proportion of their share holding. The meeting also approved the issuing of 355,000,000 (Three Hundred Thirty Five Million) ordinary shares and offering to the public as well. However, according to the resolution of the Ordinary General Meeting of Shareholders No. 1/2008, held on 22 April 2008, the meeting agreed to cancel the increase in registered capital by offering the new shares to the public. The company issued 335,000,000 warrants and free allocated to the existing shareholders instead. 5.2 The Companyâ&#x20AC;&#x2122;s Shareholders According to information from the last closing date of the shareholders on 31 December 2008, ten largest shareholders were as listed below. No. Name Number of Shares Percent 1. Kovitchindachai family 714,097,071 71.67 2 Mr. Somphong Chonkhadeedamrongkul 111,746,400 11.12 3 Morgan Stanley & Co. International PLC 30,000,000 2.99 4 Thai NDVR Co., Ltd. 18,384,500 1.83 5 Ms. Phoranee Phruksala-nun 17,829,550 1.77 6 UOB Kay Hian (Hong Kong) Limited-Client Account 9,455,000 0.94 7 Muang Thai Insurance PCL 5,085,000 0.51 8 Mr. Kachain Benchakul 4,998,650 0.51 9 Mrs. Warunee Chonkhadeedamrongkul 3,195,000 0.32 10 Other Shareholders 90,208,829 8.34 Total 1,005,000,000 100.00 Note

No. 1. 2 3 4 5 6 7 8 9 10

: Top ten shareholders of Kovitchindachai family are:

Name Ms. Siriluck Kovitchidachai Mrs. Kimlang Kovitchindachai Mr. Prinya Kovitchindachai Ms. Patcharee Kovitchindachai Mr. Chaiyo Kovitchindachai Mr. Chaiwut Kovitchindachai Mr. Chairat Kovitchindachai Mr. Chaiwat Kovitchindachai Mr. Wongwai Kovitchindachai Mr. Chavai Kovitchindachai

Number of Shares 233,592,196 120,102,669 101,000,000 84,866,368 49,378,168 21,915,068 12,800,000 9,075,000 8,100,000 7,950,144

Percent 23.24 11.95 10.05 8.44 4.91 2.78 1.27 0.90 0.81 0.79

Annual Report 2008 25

Annual Report 2008

6. 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 after payment of corporate income tax. 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 shareholdersâ&#x20AC;&#x2122; wealth. The Companyâ&#x20AC;&#x2122;s subsidiaries have the same dividend payment policy as the Companyâ&#x20AC;&#x2122;s and under the consideration of their particular executive board.

Annual Report 2008 27

Annual Report 2008

7. Structure of Management The Company Management Organization Chart As at 31 December 2008 Board Of Director Risk Manaement Committee

Audit Committee Executive Committee Chief Executive Officer Managing Director

Corporate Service Division

Finance & Account Division

Sales & Marketing Division

Business Development Division

Inter Audit

MD Office Operation Support Division

Operation Division

Homan Resource Department

Finance Department

Sales Department

Project Development Department

Construction Management & Control Department

Project Management Department

Office of Companyâ&#x20AC;&#x2122;s secretary and Legal Department

Accounting Department

Marketing Department

Product Development Department

Procurement & Supply Department

After Sales Service Department

Information Technology Department

PR and Research Department

Special business/Government Affairs

Contractor Management Department

Adminisration Department

Project Budgeting Department Quality Control Department

29 Annual Report 2008

7.1 Structure of Directors 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. 7.1.1 Board of Directors As at 31 December 2008, the Companyâ&#x20AC;&#x2122;s Board of Directors consisted of 9 directors. 1. Mr. Mongkol 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. Veera Srichanachaichok Director 7. Mr. Chaiwat Kovitchindachai Director 8. Mr. Kwanchai Mongkolkittaveepol Director 9. Mr. Sakol Pao-in Director/ Secretary of Board of Director Authorized Directors Authorized directors who can sign to comply with the company are: (1) Mr. Mongkol Pao-in or Ms. Siriluck Kovitchindachai or Mr. Veera Srichanachaichok, either two persons signing together 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. Veera Srichanachaichok, or Mr. Kwanchai Mongkolkittaveepol, or Mr. Chaiwat Kovitchindachai or Mr. Sakol Pao-in, either two persons signing together with the companyâ&#x20AC;&#x2122;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, 30

Annual Report 2008

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.

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 Companyâ&#x20AC;&#x2122;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. â&#x20AC;˘ Matters stipulated by Laws that must be obtained the resolutions from Shareholder Meeting. â&#x20AC;˘ 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 and 2008, the Company held 6 meetings and 4 meetings respectively, for Board of Directors, in which attendance of each member is shown as follows: No. Name-Surname 2007 2008 1 6/6 3/4 Mr. Mongkol Pao-in 2 6/6 4/4 Mr. Surabhon Kwunchaithunya 3 6/6 4/4 Lt. Sivaraks Phinicharomna 4 5/6 4/4 Mrs. Moogda Arriyavat 5 5/6 4/4 Ms. Siriluck Kovitchindachai 6 6/6 4/4 Mr. Chaiwat Kovitchindachai 7 6/6 4/4 Mr. Kwanchai Mongkolkittaveepol 8 6/6 3/4 Mr. Namchai Vanapanubet 9 6/6 4/4 Mr. Sakol Pao-in 10 Mr. Veera Srichanachaichok - 1/4 Note

: Mr. Namchai Vanapanubet resigned as the director on August 22, 2008. Mr. Veera Srichanachaichok was appointed as the director on September 1, 2008.

Annual Report 2008 31

as follows.

7.1.2 Audit Committee As at 31 December 2008, the Company’s Audit Committee consisted of three members 1. Mr. Surabhon Kwunchaithunya Chairman of Audit Committee 2. Lt. Sivaraks Phinicharomna Audit Committee 3. Mrs. Moogda Arriyavat Audit Committee

Mr. Sakol Pao-in is also a secretary of Audit Committee. 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.

Annual Report 2008

In the year 2007 and 2008, the Company held 5 meetings and 5 meetings respectively for Audit Committee, in which attendance of each member is shown as follows: No. 1 2 3

Name Mr. Surabhon Kwunchaithunya Lt. Sivaraks Phinicharomna Mrs. Moogda Arriyavat

2007 5/5 5/5 3/4

2008 5/5 5/5 5/5

7.1.3 Risk Management Committee As at 31 December 2008, the Company’s Risk Management Committee consisted of three members as follows. 1. Mr. Chaiwat Kovitchindachai Chairman of Risk Management Committee 2. Mr. Kwanchai Mongkolkittaveepol Risk Management Committee 3. Mr. Sakol Pao-in Risk Management Committee Mr. Sakol Pao-in serves as a secretary of Audit 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. In the year 2007 and 2008, the Company appointed the Risk Management Committee and held 4 meetings and 4 meetings respectively for the committee, in which each member attended every time. 7.1.4 Executive Committee As at 31 December 2008, the Company’s Executive Committee consisted of five directors as follows. 1. Ms. Siriluck Kovitchindachai President 2. Mr. Veera Srichanachaichok Executive Director 3. Mr. Chaiwat Kovitchindachai Executive Director 4. Mr. Kwanchai Mongkolkittaveepol 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; Annual Report 2008 33

3. Monitor and ensure the Company’s policies and management guidelines are carried out efficiently to support the Company’s operation; 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 with the budget not more than of Baht 750 million or equivalent or assigned by the Board of Directors; and 10. Perform any other works as assigned by the Company’s Board of Directors. 7.1.5 Management As of 31 December 2008, the Company’s management comprised 5 persons as follows: 1. Ms. Siriluck Kovitchindachai Chief Executive Officer 2. Mr. Veera Srichanachaichok Managing Director Acting Senior Vice President of Accounting and Finance Acting Senior Vice President of Sales and Marketing Acting Senior Vice President of Operation Support 3. Mr. Chaiwat Kovitchindachai Senior Vice President of Business Development 4. Mr. Kwanchai Mongkolkittaveepol Senior Vice President of Operation 5. Mr. Sakol Pao-in Senior Vice President of Administration 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; 4. Implement other tasks as periodically instructed by the Board of Directors; and 34

Annual Report 2008

5. Process and authorize an approval of employment, contract, and commitment of the Company’s business with budget approved by the Board of Directors or the Board of Executive Committee. The budget is subject to be changed appropriately under the consideration of the Board of Executive Committee. The authorization of abovemention 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 Executive Committee. 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. 7.2 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 B.E. 2535, and related announcements of the Securities and Exchange Commission of Thailand. 7.2.1 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. Each shareholder is to vote with all his/her entitlement. 2. 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 expiration of term, the Board of Directors shall nominated the candidate who is eligible Annual Report 2008 35

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. 7.2.2 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. 7.2.3 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. 7.2.4 Executive Directors The Company’s Board of Directors appoints executive directors who are authorized and assigned to supervise and monitor company business activity. 7.3 Remuneration of the Directors and Management 7.3.1 Cash remuneration 7.3.1.1 Remuneration for directors The Company’s remuneration for a directorship consists of meeting allowance and annual bonus. In 2007 and 2008, these were amounted to Baht 1,847,500 and 1,550,000 respectively as shown in following table. (Unit: Baht) 2007 2008 Name Meeting Meeting Bonus Bonus Allowances Allowances 1. Mr. Mongkol Pao-in 120,000 200,000 85,000 200,000 2. Mr. Surabhon Kwunchaithunya 245,000 200,000 200,000 200,000 3. Lt. Sivaraks Phinicharomna 245,000 125,000 210,000 125,000 4. Ms. Siriluck Kovitchindachai 7,500 50,000 10,000 - 5. Mr. Chaiwat Kovitchindachai 10,000 50,000 7,500 50,000 6. Mr. Kwanchai Mongkolkittaveepol 10,000 50,000 10,000 50,000 7. Mrs. Moogda Ariyawat 170,000 125,000 210,000 125,000 8. Mr. Namchai Vanapanubet* 10,000 50,000 7,500 - 9. Mr. Sakol Pao-in 10,000 50,000 10,000 50,000 Total 947,500 900,000 750,000 800,000 Note

: Mr. Namchai Vanapanubet resigned as the director on August 22, 2008.

Annual Report 2008

7.3.1.2 Remuneration for the management Remuneration

2007 Remuneration Persons (Baht) 7 13,580,000 6 2,770,000 7 16,350,000

(Unit: Baht)

2008 Remuneration Persons (Baht) 8 14,890,000 6 2,665,000 8 17,350,000

Total salary Total bonus Grand total 7.3.2 Other remuneration -None- 7.4 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 Companyâ&#x20AC;&#x2122;s staff. The good corporate governance policy covers these 5 issues: 1. Rights of shareholders 2. Equitable treatment of shareholders 3. Roles of stakeholders 4. Information disclosure and transparency 5. Responsibilities of the directors The Companyâ&#x20AC;&#x2122;s good corporate governance practices can be summarized as followings. 7.4.1 Objectives of Corporate Governance Policy The Board of Directors concentrates on good corporate governance. Two ad hoc 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.

Annual Report 2008 37

1. Provide guidelines for good corporate governance to the Boards of Directors. 2. Provide advice 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.” 7.4.2 Rights of Shareholders The Company realizes and concerns the right and equitable treatment of shareholders by 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 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 can also contact the Investor Relations directly or via the Website. 38 Annual Report 2008

7.4.3 Rights of Stakeholders The company is well aware and respects the rights of related stakeholders such as customers, employees, trade partners, competitors, creditors and communities. In order that the rights of all these stakeholders are well taken care of, the company set it clearly as the policy for good corporate governance and code of conduct. 7.4.4 Shareholders Meeting In the year 2008, there was an Ordinary Shareholders Meeting no. 1/2551 on 22 April 2008. 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 2009, 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 2008, 9 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 to shareholders, registration was provided 2 hours before the meeting commenced until it ended. Snakes 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. 7.4.5 Leadership and Vision The Board of Directors takes part in establishing company’s visions and mission and considering the Company’s operation, policies, strategies, and goals as framework for the management in preparing annual business plans and company’s budget. The board shall then monitor the operation Annual Report 2008 39

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. 7.4.6 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 policy concerning conflict of interest. 7.4.7 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. 7.4.8 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. 40

Annual Report 2008

- 5 executive directors - 4 non-executive directors Four independent directors are not executive directors, representing more than one of third of the total directors. The independent directors can serve as shareholders’’ representatives as a dependence. Therefore, there is appropriate counterbalance. 7.4.9 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. 7.4.10 Remuneration of Directors and Executives The remuneration of directors and executives shall be transparently and clearly set at an appropriate amount which is in the same level of the industry. The remuneration must be sufficient amount to motivate and maintain qualified personnel and approved by the shareholders’ meeting. In 2008, 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 directors were entitled to receive remuneration in form of salary and bonus. For more information of remuneration of directors and management, please see article 7.3: Remuneration of the Directors and Management. 7.4.11 Directors Meeting It is the company policy to hold a directors meeting at least once every three- month. Each meeting must always consists of clear agendas and regularly monitoring corporate performance. 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. In 2007 and 2008, the Board of Directors held 4 general meetings in each year. Please see attendances by directors in article 7: Structure of Management. 7.4.12 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 7.2.2: Audit Committee and article 7.2.3: Risk Management Committee. The Board of Directors assigns the Audit Committee to supervise good corporate governance. The scope of authority is followings.

Annual Report 2008 41

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. 7.4.13 Internal Control and Internal Audit System 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 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 2008. They commented that there was no significant detection regarding archive management and internal control at all. 7.4.14 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.

Annual Report 2008

7.4.15 Relationship with Investors Board of Directors realizes that the Company’s information both relevant and irrelevant to financial position might influence the decision making of investors and stakeholders. 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, 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, analysts, reporters and the public who are interested in the Company’s securities. In 2008 the Company arranged activities to provide information of the Company both directly and indirectly through 3 analysts meetings, 1 participation in Opportunity Day and press release. In addition, Investor Relations is keeping on providing information and answering questions inquired by investors and reporters via e-mail. Furthermore, 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. 7.5 Supervision of the Use of Insider Information and Internal Control 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 and management of their duty to report their holdings of the Company’s shares 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. According to the Board of Directors Meeting No. 1/2551, the Board assessed the sufficiency of internal control system (details in Enclosure No.3) and agreed that the Company had sufficient internal control. At present, the Company’s internal control has concise and effective procedure to monitor transactions of major shareholders, directors, executives and their related people. Annual Report 2008 43

None of significant default regarding internal control was found. Therefore, this ensures that the Company had effective internal control and improved its practice as recommended by the independent internal auditor for the benefits of corporate management. 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. 7.6 Human Resources 7.6.1 Number of employees As at December 31, 2008, the Company has totally 264 employees excluding directors and management team. Number of employees can be classified by line as following. Line Nunber (person) Accounting and Finance 28 Business Development 26 Administration 24 Managing Director Office 2 Operation 90 Sales and Marketing 64 30 Operation Support Total 264

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

7.6.2 Remuneration for employees The Company provides remuneration in forms of salary, wages and bonus. In 2007 there were 421 employees with remuneration amounted to Baht 102.94 million. In 2008, the total of 295 employees was paid Baht 107.75 million. Such remuneration includes payment to those employees who worked and left the Company during the year. 7.6.3 Human Resources Development Policy The Company has a policy to support the development of human resources. This enables our employees to further develop their capabilities for their long term career advancement. The Companyâ&#x20AC;&#x2122;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 2008

Annual Report 2008 45

8. Related Transactions 8.1

Value and outstanding of related transactions and persons that may have conflict of interest In 2008 and the first quarter of 2009, the Company had following transactions between the persons that might have conflict of interest.

Value of Related Related Person/ Transaction Transaction Relationship Juristic Person Category (Million Baht) 2007 2008 1. Grow Yotha Co., - Subsidiary, holding (1.1) The Company 137.42 254.71 Ltd. 99.99 percent of - purchase registered capital (construction contractor and materials) 31.02 25.95 materials distributor - purchase (construction) - - - Account payable - - - Retention - - - Deposit guarantee for bank overdraft

46 Annual Report 2008

Outstanding (Million Baht) As of 31 December 2007 2008 - - - - 11.17 48.98 4.95 4.59 5.00 -

Reason of the Transaction

Prinsiri Public Company Limited holds shares of Grow Yotha Co., Ltd., as to have this subsidiary as its business unit in material cost control for the Companyâ&#x20AC;&#x2122;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 Grow Yotha Co., Ltd., as one of its contractors. Offered selling price and construction cost of Grow 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 Grow Yotha is the Companyâ&#x20AC;&#x2122;s subsidiary. Future material purchase is expected. The aforementioned account payable was incurred by those above purchase. Grow Yotha Co., Ltd., provided payment term of 30-60 days as common payment manner in trading business.

Related Person/ Juristic Person

47 Annual Report 2008

Transaction Category

Relationship

Value of Outstanding Related (Million Baht) Transaction As of 31 Reason of the Transaction (Million Baht) December 2007 2008 2007 2008 Such retention is incurred from employing Grow 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 Grow Yotha is the Company’s subsidiary, this transaction is expected to post. The Audit Committee examined that mentioned transactions of paid, account payable and retention and determined that they are reasonable for business of the Company and Grow 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 247 war squares in Soi Jamjan (the Company’s After-Sale Service Office) as deposit guarantee for bank overdraft for Grow 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 Grow Yotha is the Company’s subsidiary.

Related Person/ Juristic Person

48 Annual Report 2008

Relationship

Transaction Category (1.2) Prin Venture Company Limited - purchase (construction materials) - purchase (construction) - Account payable - Retention

Value of Related Transaction (Million Baht) 2007 2008 35.50 29.75 22.69 8.30 - - - -

Outstanding (Million Baht) As of 31 December 2007 2008 - - - - 1.02 0.39 1.25 1.25

Reason of the Transaction

The Audit Committee has examined this transaction and determined that Deposit guarantee for bank overdraft for Grow 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. 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 Grow Yotha Company Limited and Prin Venture Company Limited are the Company’s subsidiaries. Future purchase of materials is expected to continue.

Related Person/ Juristic Person 2. Thai Chinda Curtain Company Litmited Distributor of curtains, blinds, wallpapers and furniture

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.

49 Annual Report 2008

Transaction Category

Relationship

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

Value of Related Transaction (Million Baht) 2007 2008

Outstanding (Million Baht) As of 31 December 2007 2008

7.56 - -

- 0.14 1.19

0.59 - -

- - 1.25

Reason of the Transaction

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.

Value of Outstanding Related (Million Baht) Related Person/ Transaction Transaction As of 31 Relationship Juristic Person Category (Million Baht) December 2007 2008 2007 2008 3. Prin Venture Subsidiary company (3.1) The Company 6.72 - 255.00 155.25 Company Limited of Prinsiri PCL, - Short-term which holdings of borrowing - 39.08 - Real Estate 51 percent of - Interest receivable - - Interest earned 23.62 18.90 - - developer, housing registered capital - Management 26.41 13.69 - - with land and revenue condominium - Other income 0.26 - - - - Loan guarantee - 443.47 -

50 Annual Report 2008

Reason of the Transaction

Prin Venture 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 Baht 500 million 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 examined the transaction and determined it to be reasonable by percentage of holding and will increase liquidity of Prin Venture. Moreover, the interest rate of the market rate, and maximizes benefit to the Company and subsidiary. The Companyâ&#x20AC;&#x2122;s management revenue is in compliance with the joint venture contract. The management charge is Baht 350,000 per month per project. The selling management is 2 percent of sales. Since Prin Venture is the Companyâ&#x20AC;&#x2122;s subsidiary, this transaction will appear in the future.

Related Person/ Juristic Person

51 Annual Report 2008

Transaction Category

Relationship

Value of Related Transaction (Million Baht) 2007 2008

Outstanding (Million Baht) As of 31 Reason of the Transaction December 2007 2008 Other income of the Company is the charge from gardening service provided to Prin Venture 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. Loan guarantee is the transaction since 2005 as deposit guarantee for bank overdraft, aval, long-term 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 Companyâ&#x20AC;&#x2122;s subsidiary, this transaction is expected to continue.

Related Person/ Juristic Person

Transaction Category

Relationship

Value of Related Transaction (Million Baht) 2007 2008

4. Mr. Santi Kovitchindachai

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

(4.1) The Company - Short-term 20.00 borrowing - Interest expense 0.25 - Loan guarantee -

52 Annual Report 2008

- - -

Outstanding (Million Baht) As of 31 Reason of the Transaction December 2007 2008 The Audit Committed 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 borrowed 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 0 0 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 shortterm loan of promissory note which offering lower rate when comparing with other issuers. The Audit Committee 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.

Related Person/ Juristic Person 5. Ms. Siriluck Kovitchidachai

53 Annual Report 2008

Value of Outstanding Related (Million Baht) Transaction Transaction As of 31 Relationship Category (Million Baht) December 2007 2008 2007 2008 Director / President (5.1) The Company of Executive - Short-term 50.00 50.00 50.00 100.00 Committee / Chief borrowing Executive Director - Interest expense 0.12 0.93 - - and Shareholder She holds 23.24 percent of paid up capital.

Reason of the Transaction

The Company has borrowed loan from Ms. Siriluck Kovitchidachai in form of promissory note that has to be paid in June 2008. In 2007 and the first quarter of 2008, the loan interest was calculated at the rate of 5.00 per year. This amount of money is used in the Companyâ&#x20AC;&#x2122;s cash flow and buying land. In the future, if the interest of Ms. Siriluck Kovitchidachai 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 examined the transaction and determined that short-term borrowing and interest expense is reasonable. It is borrowing for the Companyâ&#x20AC;&#x2122;s cash flow and land purchase. In addition, the interest rate is lower than other issuers. This benefits the Company.

Value of Outstanding Related (Million Baht) Related Person/ Transaction Transaction As of 31 Relationship Juristic Person Category (Million Baht) December 2007 2008 2007 2008 6. CN SPR The Company holds (6.1) The Company (Thailand) Company shares, representing - Short-Term 56.00 - 56.00 56.00 Limited 99.97 percent of the Borrowing - - 2.08 3.04 registered capital. - Interest expense - Interest income 2.08 0.96 - -

54 Annual Report 2008

Reason of the Transaction

Prinsiri Public Company Limited established CN SPR (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 Companyâ&#x20AC;&#x2122;s competitive ability. The short-term loan is to increase liquidity of CN SPR (Thailand) Company Limited and to buy properties. The interest of loan is the rate of MLR per year. Since it is the Companyâ&#x20AC;&#x2122;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 examined the transaction of shortterm 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.

Related Person/ Juristic Person

Relationship

7. Ms. Nipha Vice President of Aphirattanarungruang Human Resource Department She holds shares, representing 0.78 percent of the registered capital.

55 Annual Report 2008

Value of Related Transaction Transaction Category (Million Baht) 2007 2008 (7.1) The Company - Reimbursement 18.76 - - Advance payment 18.76 -

Outstanding (Million Baht) As of 31 December 2007 2008 - - - -

Reason of the Transaction

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

8.2 Measures/procedures of related transaction The Board of Directors agreed that related transactions shall be approved by the Audit Committee. 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. 8.3 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 othersâ&#x20AC;&#x2122;. 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. The Company does not have any policy to provide financial support to related companies except for loan which is based on share holding proportion. The Company does not have any policy regarding loan from directors, loan with guarantee by a director and advance payment for the Company. The existing loan from directors and loan with guarantee by a director shall not increase in the future. However, if an emergency case arises, these transactions must be approved by the Board of Directors on case by case basis. 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 othersâ&#x20AC;&#x2122;. 8.4 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 Companyâ&#x20AC;&#x2122;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. Moreover, the Company adopts the principal of decreasing all business risks by having the Risk Management Committee oversees this in other way. 56

Annual Report 2008

Annual Report 2008 57

9. Risk Factors

9.1 Risks related to the Company and its Business 9.1.1 Risk from Fluctuation of Construction Cost Construction materials are major raw materials for project development. In previous year, many construction materials were subjected to change their prices and directly affected on the construction cost. Therefore, volatility of construction materialsâ&#x20AC;&#x2122; 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. 9.1.2 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 customersâ&#x20AC;&#x2122; needs as much as possible. Then the Company conducts researches and 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. 9.1.3 Risk from land procurement for future project development Avoiding financial cost burden, the Company has no policy to accumulate a large amount of land bank. 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. 58

Annual Report 2008

9.1.4 Risk from Credit Policy of Financial Institutions In overall, financial institutions are strict on loan approval. It reflects the carefulness in business operation among risk factors from present economics, which are effected by sub-prime crisis. Concerns of credit quality and higher cost of loans decreases loan approval rate. Then, some of the Company’s customers may not receive approval of housing loan from financial institutions to pay the remaining buying balance on the day of property transfer. This will affect on the total number of transfer and the Company’s profitability. Therefore, the Company pays attention to economics condition and credit policy of financial institutions that will effect the Company’s operation. The Company also adapts its business strategies to respond such changes. In addition, for fast credit approval, the Company performs preliminary check with its customers’ information before submitting their credit application to a bank. 9.1.5 Risk from high Competition Compared to the year of 2007, Thai economics in 2008 was slow down. That was a result from the world financial crisis, politics problem, temporary closing of Suvarnabhumi Airport, violence in the 3 southernmost provinces, inflation rate, interest rate and fluctuation changes of petrol price during the year. Such factors affects on consumers’ confidence. Buying force decreased because people became very careful on spending money. Real estate business was then also slow down. Potential customers took longer time to make decision about buying permanent accommodation. Therefore, house and condominium markets became more competitive. Other real estate developers invested more to increase their market shares. Although the economic growth decreased from 2007, many factors were positive for real estate sector. Loan interest rate has decreased. Reduction of transfer fee for property transactions is extended one more year. It will end on March 28, 2010. 9.2 Other risks 9.2.1 Risk from major shareholders of the Company that is more than 50 percent As at 31 December 2008, the major shareholder of the Company, was the Kovitchindachai family, whose share holding is 714,097,071 or 71.67 percent of total registered capital. The major shareholders can 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 four people from the third party to be independent directors. An Audit Committee was also appointed to balance management control.

Annual Report 2008 59

Annual Report 2008

10. Financial Position and Operation Results 10.1 Financial Statements 10.1.1 Summary of Report of Independent Auditor (1) Report of Independent Auditor for the fiscal year 2007 and 2008 Mrs. Suwimon Krittiyakien, Certified Public Accountant No. 2982, of DIA International Auditing, considered that the Companyâ&#x20AC;&#x2122;s financial statements as at 31 December 2007 and 2008 and operation results of the Company and subsidiaries were correct in accordance with generality accepted auditing standards. (2) Report Independent Auditor for the fiscal year 2006 and 2007 Mrs. Vilairat Rojchanakarin, Certified Public Accountant No. 3104, of Office of DIA International Auditing, considered that the Companyâ&#x20AC;&#x2122;s financial statements as at 31 December 2006 and 2007 and operation results of the Company and subsidiaries were correct in accordance with generality accepted auditing standards. 10.1.2 Summary of Financial Position and Operation Results Summary of balance sheets, profit and loss, cash flows and financial ratios was shown in following tables.

Annual Report 2008 61

Annual Report 2008

Balance Sheets Consolidated financial statements As at 31 As at 31 As at 31 December 2006 December 2007 December 2008 MB % MB % MB % Assets Current assets Cash and cash equivalents 111.14 2.53 113.20 1.94 66.16 0.93 Current investment 26.98 0.61 43.06 0.74 15.46 0.22 Accounts receivable - net 30.27 0.69 16.17 0.28 2.40 0.03 Inventories 3,873.10 88.11 4,809.34 82.23 6,472.13 90.59 Inventories 150.56 3.42 595.54 10.18 316.99 4.42 Total current assets 4,192.06 95.36 5,577.31 95.36 6,873.15 96.21 Non-current assets Land and equipment - net 36.43 0.83 40.79 0.70 38.94 0.55 Land held for development 69.53 1.58 126.53 2.16 126.53 1.77 Deposit at bank with commitment 92.09 2.09 91.64 1.57 85.49 1.20 Other non-current assets 5.86 0.13 12.24 0.21 19.99 0.28 Total non-current assets 203.91 4.64 271.21 4.64 274.95 3.79 Total assets 4,395.97 100.00 5,848.52 100.00 7,144.110 100.00 Liabilities and shareholdersâ&#x20AC;&#x2122; equity Current liabilities Bank overdrafts and short-term loans from financial institutions 327.67 7.45 433.64 7.41 738.58 10.34 Short-term loans - promissory notes 330.55 7.52 295.00 5.04 249.16 3.49 Land payable - promissory notes 64.17 1.46 51.69 0.88 - - Accounts and notes payable 241.31 5.49 249.19 4.26 202.59 2.84 Current portion of long-term liabilities - - 764.20 13.07 1,346.74 18.85 Unrealized installment income 77.99 1.77 264.67 4.53 387.91 5.43 Other current liabilities 204.34 4.65 224.87 3.84 301.18 4.21 Total current liabilities 1,246.03 8.34 2,283.25 39.04 3,226.16 45.16 Non-current liabilities Land payable - long-term promissory notes 100.00 2.27 - - - - Liabilities in finance leases - - 2.12 0.04 4.70 0.07 Long-term loans 1,188.00 27.02 1,261.04 21.56 1,306.28 18.28 Other payables 55.82 1.27 74.53 0.01 78.77 1.10 Total non-current liabilities 1,343.82 30.57 1,337.68 0.23 1,389.74 19.45 Total liabilities 2,589.84 58.91 3,620.93 0.62 4,615.91 64.61 Annual Report 2008 63

Shareholders’ equity Registered capital - 670,000,000 common shares, Baht 1 each Registered capital - 1,340,000,000 common shares, Baht 1 each Registered and paid capital - 670,000,000 common shares, Baht 1 each - 1,005,000,000 common shares, Baht 1 each Premium on share capital Retained earnings Appropriated legal reserve Unappropriated Unrealized profit from exchange rate Minority interest Total shareholders’ equity Total liabilities and shareholders’equity

Annual Report 2008

Consolidated financial statements As at 31 As at 31 As at 31 December 2006 December 2007 December 2008 MB % MB % MB % 670.00

670.00 272.71 54.34 777.23 - 31.85 1,806.13 4,395.97

15.24 6.20 1.24 17.68 - 0.72 41.09 100.00

1,340.00 1,005.00 440.21 58.24 670.41 0.30 53.43 2,227.58 5,848.52

1,340.00 17.18 1,005.00 7.53 440.21 1.00 73.84 11.46 940.22 0.01 0.18 0.91 68.90 38.09 2,528.19 100.00 7,144.11

14.07 6.16 1.03 13.16 0.00 0.96 35.39 100.00

Annual Report 2008 65

Profit and Loss Revenue Sales of real estate Sales of land Sales of goods Other income Total revenues Expenses Cost of sales of real estate Cost of sales of land Cost of sales of goods Selling and administrative expenses Directorsâ&#x20AC;&#x2122; remuneration Total expenses Profit before interest expenses and income tax Interest expenses Income tax Profit before minority interest Minority interest Net profit Basic earnings per share net profit Weighted average number of common shares

Annual Report 2008

Consolidated financial statements Fiscal Year 2006 Fiscal Year 2007 Fiscal Year 2008 MB % MB % MB % 2,862.65 96.69 2,523.84 96.65 3,471.67 79.39 - - - - 827.00 18.91 86.07 2.91 61.62 2.36 30.26 0.69 11.79 0.40 25.78 0.99 43.95 1.00 2,960.52 100 2,611.24 100.00 4,372.88 100.00 1,926.62 65.08 1,935.38 74.12 2,641.04 60.40 - - - - 739.03 16.90 75.00 2.53 54.55 2.09 27.71 0.63 356.69 12.05 461.36 17.67 431.87 9.88 1.85 0.06 1.85 0.07 1.55 0.04 2,360.17 79.72 2,453.14 93.95 3,841.20 87.84 600.35 6.41 151.03 442.91 4.89 447.8

20.28 0.22 5.10 14.96 0.17 15.13 0.67 670,000,000

158.11 6.69 63.49 87.92 (9.9) 77.98

6.05 0.26 2.43 3.37 (0.3) 2.99 0.09 895,780,822

531.68 63.17 137.48 331.03 (15.47) 315.56

12.16 1.44 3.14 7.57 (0.35) 7.22 0.33 1,005,000,000

Statements of Cash Flows Cash flows from operating activities Profit (loss) before income tax Adjustment net profit to cash receipt (disbursement) from operating activities Revenue from liquidated damaged Profit from temporary investment Profit from selling assets Depreciation Reversal of allowance for doubtful accounts Doubtful accounts Bad debt Loss from disused of assets Loss from revision of condominium design Loss from impairment of assets Interest expense Profit (loss) from operating activities before changes of operating assets and liabilities (Increase) Decrease in changes in part of operation assets Accounts receivable Inventories Other current assets Other non-current assets (Increase) Decrease in changes in part of operation assets Increase (Decrease) in changes in part of operating liabilities Land payable - notes payable Accounts and notes payable Unrealized installment income Other current liabilities Increase (Decrease) in changes in part of operating liabilities

Consolidated financial statements 2008 2007 468,514,596.09 151,412,219.68 0.00 (12,011,485.54) (1,375,341.94) (1,398,445.80) (26,998.00) (1,403,872.93) 14,210,316.82 12,472,473.93 (3,729,915.54) (2,370,095.72) 5,511,436.86 6,973,568.96 3,621,820.82 2,215,042.71 99,369.67 100,567.61 42,733,050.10 0.00 7,000,000.00 0.00 63,169,787.76 6,693,928.24 599,728,122.64 162,683,901.14 8,372,893.05 7,277,678.79 (1,533,743,955.42) (730,606,156.62) 260,896,004.68 (444,981,395.90) 2,903,650.20 (6,382,837.71) (1,261,571,407.49) (51,686,000.00) (46,598,400.26) 123,239,056.85 84,386,483.34 109,341,139.93

(1,174,692,711.44) (64,167,000.00) 19,891,688.37 186,685,270.00 41,160,023.93 183,569,982.30

Annual Report 2008 67

STATEMENTS OF CASH FLOWS Net cash provided by (used in) operating activities Cash paid for interest Cash paid for income tax Net cash provided by (used in) operating activities Cash flows from investing activities Cash paid for purchase of current investment Cash received from sales of current investment Loans to subsidiaries (additional) (Increase) Decrease in deposit with commitment Cash paid for purchase subsidiary from cash received Cash paid for purchase of land held for development Cash received from sales of assets Cash paid for purchase of office equipment and supplies Net cash provided by (used in) investing activities Cash flows from financing activities Increase (Decrease) in bank overdrafts and short-term loans from financial institutions Increase (Decrease) in short-term loans Increase (Decrease) liabilities in finance leases Increase (Decrease) in long-term loans Cash received from increase common shares Cash received from the payment of common shares from minority interest Dividend paid to minority interest Dividend paid Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents as at January 1 Cash and cash equivalents as at December 31 68

Annual Report 2008

Consolidated financial statements 2008 2007 (552,502,144.92) (828,438,828.00) (288,028,287.62) (123,641,532.88) (92,474,545.95) (121,177,993.00) (933,004,978.49) (1,073,258,353.88) (545,872,747.32) 574,572,645.00 0.00 10,382,393.07 0.00 0.00 27,000.00 (4,265,167.38) 34,844,123.37 304,938,372.09 (45,834,200.00) (2,970,078.48) 625,136,688.64 0.00

(550,659,500.00) 536,279,257.51 0.00 19,168,572.12 0.00 (57,000,000.00) 1,401,869.16 (12,229,406.08) (63,039,207.29) 105,966,961.84 (35,546,700.00) (1,029,407.10) 735,729,513.64 502,500,000.00

0.00 (720.00) (30,150,000.00) 851,120,062.25 (47,040,792.87) 113,204,772.53 66,163,979.66

11,637,500.00 (426.00) (180,900,000.00) 1,138,357,442.38 2,059,881.21 111,144,891.32 113,204,772.53

Annual Report 2008 69

FINANCIAL RATIOS Particular LIQUIDITY RATIO Liquidity ratio (Times) Quick ratio (Times) Cash ratio (Times) Receivable turnover ratio - real estate (Times) Collection days - real estate (Days) Inventory turnover (Times) Average number of days sales (Days) Account payable turnover (Times) Payment days (Days) Cash Cycle (Days) PROFITABILITY RATIO Gross profit margin - real estate (%) Gross profit margin - construction materials (%) Operating profit margin (%) Quality of earnings (%) Net profit margin (%) Return on equity (%) EFFICIENCY RATIO Return on total assets (%) Return on fixed asset (%) Asset turnover (Times) FINANCIAL POLICY RATIO Debt to Equity ratio (Times) Interest payment ratio (Times) Cash coverage (Times) Dividend Payment (%)

Annual Report 2008

Consolidated financial statements 2006 2007 2008 3.36 0.14 (0.73) 91.46 3.94 0.62 583.69 4.96 72.61 515.02 32.70 12.86 20.36 (146.65) 15.13 27.51 11.80 230.53 0.78 1.43 (112.82) 1.25 40.40

2.44 0.08 (0.61) 87.46 4.12 0.46 785.37 6.38 56.39 733.10 23.32 11.48 6.12 (678.82) 2.99 3.87 1.52 38.08 0.51 1.63 (149.85) 2.04 38.66

2.13 0.03 (0.34) 287.99 1.25 0.47 760.91 10.49 34.31 727.84 23.93 8.44 15.18 (175.48) 7.22 13.27 4.86 116.41 0.67 1.83 (11.59) 1.69 9.55

10.2 Summary of Financial Position of the year 2008 In 2008, the Company had revenue property sale of Baht 3,471 million. It increased 37.55 percent from the year 2007. This was because the Company completed the construction work as planned. The governmentâ&#x20AC;&#x2122;s economic stimulus package that has reduced taxes and transfer fee since 31 March 2008 also encouraged potential customers to buy and took that provided benefits. Most revenue from selling property was from selling home office units, which was 44 percent of total income. In 2008, the Company had revenue from selling land of Baht 827.00 Baht. This sold land did not have development plan in near future. 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 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 11-24 months. Therefore, quarterly revenue may shift at some level, depending on type of developing project. Cost of sales in 2008 decreased 49 percent. That was because the Company increased the selling prices, controlled costs and well managed to minimize risks during the year of fluctuation economics. Main cost of sales of the Company and subsidiaries consisted of land, construction cost, project expenses and interest. Cost of sales ratio became higher because most of prices of construction materials increased and the real estate development business was slow down by the economics condition. In 2008, the Company had net profit of Baht 331 million. It increased 27.6 percent from 2007. Since the revenue increased while the Company performed better cost control than that in 2007, the ratio of return on equity increase to Baht 0.31. In 2006, the ratio was only Bath 0.09. Debt/Equity ratio in 2008 increased to 1.83. The Company expected that the ratio would decrease because there was much unrealized revenue, which would be recorded in the future, especially from condominium projects that the construction would be completed by the end of 2008.

Annual Report 2008 71

Net Income Million Baht 5,000 4,372 4,000 2,960

3,000 2,325

2,611

2,000 1,000 0

2005

2006

2007

2008

Net Profit Million Baht 500 450 400 350 304 300 250 200 150 100 50 0 2005 72

Annual Report 2008

447 331

77 2006

2007

2008

Return On Equity (ROE)

30 25 20 15 10 5 0

% 27.23

27.51

13.27

2005

2006

3.87 2007

2008

Return On Asset (ROA) 14 % 12 10 8 6 4 2 0

11.45

11.8

4.86 2005

2006

1.52 2007

2008

Annual Report 2008 73

Annual Report 2008

AUDITOR’S REPORT 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, 2008, 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 year 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. The financial statements for the year ended December 31, 2007, were audited by the other auditor in the same office whose report dated February 20, 2008, expressed an unqualified opinion on those statements. (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, 2008, and the results of their and its operations and cash flows for the year then ended in conformity with generally accepted accounting principles. Office of D I A International Auditing (Mrs. Suvimol Krittayakiern) C.P.A. (Thailand) Registration No. 2982 February 23 , 2009 Annual Report 2008 75

Balance Sheets Prinsiri Public Company Limited And Subsidiaries As At December 31, 2008 And 2007

Note Assets Current assets Cash and cash equivalents 6 Current investment 7 Accounts receivable - net 8 Loans to related companies - promissory notes 9 Inventories 10 Other current assets Deposit for goods Deposit for land Advance payment for land Others Total current assets Non-current assets Investment in subsidiaries 11 Land and equipment - net 12 Land held for development 13 Deposits at bank with commitment 14 Other non-current assets Deposits and retentions Withholding tax - prior year Total non-current assets Total assets

Consolidated (Baht) 2008 2007 66,163,979.66 113,204,772.53 15,457,345.70 43,058,418.70 2,398,142.72 16,174,377.91 0.00 0.00 6,472,135,013.93 4,809,337,067.29 143,949,041.24 95,929,802.79 101,800,000.00 474,153,650.27 45,293,212.62 0.00 25,953,951.59 25,455,590.88 6,873,150,687.46 5,577,313,680.37 0.00 0.00 38,943,674.69 40,793,115.10 126,533,625.00 126,533,625.00 85,492,653.67 91,635,965.90 9,339,297.41 8,459,559.42 10,646,871.00 3,783,425.38 270,956,121.77 271,205,690.80 7,144,106,809.23 5,848,519,371.17

Note to financial statements are parts of these financial statments.

Annual Report 2008

Separated (Baht) 2008 2007 28,825,683.24 84,966,180.35 0.00 0.00 1,579,360.00 3,686,008.00 211,254,200.00 311,000,000.00 6,056,881,969.20 3,933,359,016.83 140,333,695.70 93,126,064.47 90,200,000.00 462,553,650.27 45,293,212.62 0.00 31,025,092.10 53,648,035.12 6,605,393,212.86 4,942,338,955.04 85,000,000.00 85,000,000.00 37,069,473.79 38,290,256.92 69,533,625.00 69,533,625.00 67,976,363.07 80,614,048.44 8,939,127.41 7,488,329.42 0.00 0.00 268,518,589.27 280,926,259.78 6,873,911,802.13 5,223,265,214.82

Balance Sheets (Continued) Prinsiri Public Company Limited And Subsidiaries As At December 31, 2008 And 2007 Note Liabilities and shareholdersâ&#x20AC;&#x2122; equity Current liabilities Overdrafts and short - term loans from financial institutions 15 Short - term loans - promissory notes 16 Land payable - promissory notes 17 Accounts and notes payable 18 Unrealized installment income Current portion of long - term liabilities 19 Other current liabilities Accrued income tax Contractor retention Accrued expenses Others Total current liabilities Non-current liabilities Land payable - long-term promissory notes - net 20 Liabilities under financial lease agreement 21 Long - term loans - net 22 Other payables 14 Total non-current liabilities Total liabilities

Consolidated (Baht) 2008 2007 738,578,021.02 433,639,648.93 249,165,800.00 295,000,000.00 0.00 51,686,000.00 202,590,436.01 249,188,836.27 387,912,226.85 264,673,170.00 1,346,738,106.44 764,196,995.92 63,812,347.71 18,808,858.91 147,189,824.48 110,646,681.26 78,869,204.23 87,297,374.69 11,312,728.13 8,112,676.09 3,226,168,694.87 2,283,250,242.07 0.00 0.00 4,698,763.08 2,116,879.52 1,306,277,300.00 1,261,038,603.22 78,768,177.25 74,529,096.41 1,389,744,240.33 1,337,684,579.15 4,615,912,935.20 3,620,934,821.22

Separated (Baht) 2008 2007 738,160,305.56 392,663,387.03 100,000,000.00 50,000,000.00 0.00 51,686,000.00 217,772,042.56 208,180,050.04 386,318,626.85 252,252,070.00 1,346,609,945.94 664,077,826.56 58,395,456.43 15,054,846.11 126,074,005.51 88,704,623.41 75,806,099.49 46,800,178.30 9,603,076.20 6,286,211.37 3,058,739,558.54 1,775,705,192.82 0.00 0.00 4,676,977.18 1,966,933.12 1,306,277,300.00 1,220,882,633.22 63,673,003.98 65,941,342.99 1,374,627,281.16 1,288,790,909.33 4,433,366,839.70 3,064,496,102.15

Note to financial statements are parts of these financial statments.

Annual Report 2008 77

Balance Sheets (Continued) Prinsiri Public Company Limited And Subsidiaries As At December 31, 2008 And 2007 Note Liabilities and shareholders’ equity (Continued) Shareholders’ equity Share capital Authorized share capital 1,340,000,000 common shares of Baht 1 each 23 Issued and paid-up share capital 1,005,000,000 common shares of Baht 1 each 23 Premium on share capital Unrealized gain on change in investment valuation Retained earnings Appropriated Legal reserve 24 Unappropriated Total shareholders’ equity of the Company Minority interest Total shareholders’ equity Total liabilities and shareholders’ equity

Consolidated (Baht) 2008 2007 1,340,000,000.00 1,005,000,000.00 440,212,400.00 18,922.57 73,840,000.00 940,223,335.23 2,459,294,657.80 68,899,216.23 2,528,193,874.03 7,144,106,809.23

Note to financial statements are parts of these financial statments.

Annual Report 2008

1,340,000,000.00 1,005,000,000.00 440,212,400.00 295,423.25 58,240,000.00 670,409,426.89 2,174,157,250.14 53,427,299.81 2,227,584,549.95 5,848,519,371.17

Separated (Baht) 2008 2007 1,340,000,000.00 1,340,000,000.00 1,005,000,000.00 1,005,000,000.00 440,212,400.00 440,212,400.00 0.00 0.00 73,840,000.00 58,240,000.00 921,492,562.43 655,316,712.67 2,440,544,962.43 2,158,769,112.67 0.00 0.00 2,440,544,962.43 2,158,769,112.67 6,873,911,802.13 5,223,265,214.82

Statements of Income Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007 Consolidated (Baht) Separated (Baht) Note 2008 2007 2008 2007 Revenues Sales of real estate 3,471,668,685.00 2,523,843,310.00 2,631,539,325.00 1,583,605,246.00 Sales of land 826,999,362.50 0.00 826,999,362.50 0.00 Sales of goods 30,265,029.42 61,621,220.48 0.00 0.00 Total revenues 4,328,933,076.92 2,585,464,530.48 3,458,538,687.50 1,583,605,246.00 Cost of sales Cost of sales of real estate 2,641,037,092.87 1,935,379,992.84 1,949,559,145.90 1,144,183,412.15 Cost of sales of land 739,029,551.78 0.00 739,029,551.78 0.00 Cost of sales of goods 27,711,265.99 54,548,294.34 0.00 0.00 Total cost of sales 3,407,777,910.64 1,989,928,287.18 2,688,588,697.68 1,144,183,412.15 Gross profit 921,155,166.28 595,536,243.30 769,949,989.82 439,421,833.85 Other income Fine from delayed construction income 32.4 0.00 12,011,485.54 0.00 12,011,485.54 Management income 0.00 0.00 22,087,368.11 26,405,626.75 Interest income 517,998.58 3,447,516.20 23,147,684.31 26,606,654.77 Remuneration income on transferred right 25 22,429,906.54 0.00 22,429,906.54 0.00 Other income 20,998,482.55 10,317,642.25 31,140,631.83 21,028,729.91 Total other income 43,946,387.67 25,776,643.99 98,805,590.79 86,052,496.97 Note to financial statements are parts of these financial statments.

Annual Report 2008 79

Statements of Income (Continued) Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007

Note Selling expenses Administrative expenses Directorsâ&#x20AC;&#x2122; remuneration Reversed doubtful accounts Doubtful accounts Bad debts Loss on disused of assets, disposal of assets Loss on impairment of assets Loss on correct of condominium plan 10 Total other expenses Total expenses Finance costs - interest expenses Profit (loss) before income tax Income tax Profit (loss) for the year Attributable to : Equity holders of the parent Minority interest Basic earnings per share Profit (Loss) per share - Equity holders of the parent Weighted average number of common share (shares)

Consolidated (Baht) 2008 2007 (127,868,879.55) (149,619,125.49) (248,762,527.64) (304,821,030.32) (1,550,000.00) (1,847,500.00) 3,729,915.54 2,370,095.72 (5,511,436.86) (6,973,568.96) (3,621,820.82) (2,215,042.71) (99,370.67) (100,567.61) (7,000,000.00) 0.00 (42,733,050.10) 0.00 (55,235,762.91) (6,919,083.56) (433,417,170.10) (463,206,739.37) (63,169,787.76) (6,693,928.24) 468,514,596.09 151,412,219.68 (137,478,034.75) (63,490,465.28) 331,036,561.34 87,921,754.40 315,563,908.34 77,983,177.00 15,472,653.00 9,938,577.40 331,036,561.34 87,921,754.40 0.31 0.09 1,005,000,000 895,780,822

Note to financial statements are parts of these financial statments.

Annual Report 2008

Separated (Baht) 2008 2007 (111,613,524.91) (123,651,201.14) (225,685,603.64) (254,146,236.22) (1,550,000.00) (1,847,500.00) 50,000.00 0.00 0.00 0.00 0.00 0.00 (99,370.67) (100,567.61) (7,000,000.00) 0.00 (42,733,050.10) 0.00 (49,782,420.77) (100,567.61) (388,631,549.32) (379,745,504.97) (47,851,555.78) (22,721,125.23) 432,272,475.51 123,007,700.62 (120,346,625.75) (47,609,975.74) 311,925,849.76 75,397,724.88 311,925,849.76 75,397,724.88 0.00 0.00 311,925,849.76 75,397,724.88 0.31 0.08 1,005,000,000 895,780,822

Statements of Changes in Shareholdersâ&#x20AC;&#x2122; Equity Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007

Note Balance as at January 1, 2007 Increase share capital during the period Appropriated during the period - legal reserve 24 Dividend paid 26 Dividend paid - minority interest 26 Receive the payment of share capital from minority interest Profit for the year Unrealized gain on change in investment valuation Increase (Decrease) in minority interest for the year Balance as at December 31, 2007 Appropriated during the period - legal reserve Dividend paid 26 Dividend paid - minority interest 26 Profit for the year Unrealized gain on change in investment valuation Increase (Decrease) in minority interest for the year Balance as at December 31, 2008

Issued and paid-up share capital 670,000,000.00 335,000,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,005,000,000.00 0.00 0.00 0.00 0.00 0.00 0.00 1,005,000,000.00

Consolidated (Baht) Premium on Unrealized gain Retained earnings (Deficit) share capital on change in Appropriated Unappropriated investment Legal reserve valuation 272,712,400.00 0.00 54,340,000.00 777,226,249.89 167,500,000.00 0.00 0.00 0.00 0.00 0.00 3,900,000.00 (3,900,000.00) 0.00 0.00 0.00 (180,900,000.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 77,983,177.00 0.00 295,423.25 0.00 0.00 0.00 0.00 0.00 0.00 440,212,400.00 295,423.25 58,240,000.00 670,409,426.89 0.00 0.00 15,600,000.00 (15,600,000.00) 0.00 0.00 0.00 (30,150,000.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 315,563,908.34 0.00 (276,500.68) 0.00 0.00 0.00 0.00 0.00 0.00 440,212,400.00 18,922.57 73,840,000.00 940,223,335.23

Minority interest

Total

31,851,630.68 0.00 0.00 0.00 (426.00) 11,637,500.00 0.00 17.73 9,938,577.40 53,427,299.81 0.00 0.00 (720.00) 0.00 (16.58) 15,472,653.00 68,899,216.23

1,806,130,280.57 502,500,000.00 0.00 (180,900,000.00) (426.00) 11,637,500.00 77,983,177.00 295,440.98 9,938,577.40 2,227,584,549.95 0.00 (30,150,000.00) (720.00) 315,563,908.34 (276,517.26) 15,472,653.00 2,528,193,874.03

Note to financial statements are parts of these financial statments.

Annual Report 2008 81

Statements of Changes in Shareholdersâ&#x20AC;&#x2122; Equity (Continued)

Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007

Separated (Baht) Issued and Premium on Retained earnings (Deficit) paid-up share capital Appropriated Unappropriated Note share capital Legal reserve

Balance as at January 1, 2007 670,000,000.00 272,712,400.00 Cumulative effect of change in accounting policy 35 0.00 0.00 Balance as at January 1, 2007 (after restatement) 670,000,000.00 272,712,400.00 Increase during the period 335,000,000.00 167,500,000.00 Appropriated during the period - legal reserve 24 0.00 0.00 Dividend paid 26 0.00 0.00 Profit for the year 0.00 0.00 Balance as at December 31, 2007 1,005,000,000.00 440,212,400.00 Appropriated during the period - legal reserve 24 0.00 0.00 Dividend paid 26 0.00 0.00 Profit for the year 0.00 0.00 Balance as at December 31, 2008 1,005,000,000.00 440,212,400.00

Note to financial statements are parts of these financial statments.

Annual Report 2008

54,340,000.00 0.00 54,340,000.00 0.00 3,900,000.00 0.00 0.00 58,240,000.00 15,600,000.00 0.00 0.00 73,840,000.00

777,226,249.89 (12,507,262.10) 764,718,987.79 0.00 (3,900,000.00) (180,900,000.00) 75,397,724.88 655,316,712.67 (15,600,000.00) (30,150,000.00) 311,925,849.76 921,492,562.43

Total 1,774,278,649.89 (12,507,262.10) 1,761,771,387.79 502,500,000.00 0.00 (180,900,000.00) 75,397,724.88 2,158,769,112.67 0.00 (30,150,000.00) 311,925,849.76 2,440,544,962.43

Statements of Cash Flows Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007 Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Cash flows from operating activities Profit (loss) before income tax 468,514,596.09 151,412,219.68 432,272,475.51 123,007,700.62 Adjustment net profit to cash receipt (disbursement) from operating activities Fine from delayed construction income 0.00 (12,011,485.54) 0.00 (12,011,485.54) Gain on sales of current investment (1,375,341.94) (1,398,445.80) 112,547.32 (786,302.39) Gain on sales of asset (26,998.00) (1,403,872.93) (26,998.00) (1,401,868.16) Depreciation assets 14,210,316.82 12,472,473.93 13,524,388.52 11,811,993.51 Reversed doubtful accounts (3,729,915.54) (2,370,095.72) (50,000.00) 0.00 Doubtful accounts 5,511,436.86 6,973,568.96 0.00 0.00 Bad debts 3,621,820.82 2,215,042.71 0.00 0.00 Loss on disused of asset,disposal of assets 99,369.67 100,567.61 99,369.67 100,567.61 Loss on correct of condominium plan 42,733,050.10 0.00 42,733,050.10 0.00 Loss on impairment of assets 7,000,000.00 0.00 7,000,000.00 0.00 Interest expenses 63,169,787.76 6,693,928.24 47,851,555.78 22,721,125.23 Profit (loss) from operation before changes in operating assets and liabilities 599,728,122.64 162,683,901.14 543,516,388.90 143,441,730.88 (Increase) Decrease in part of operating assets Accounts receivable 8,372,893.05 7,277,678.79 2,156,648.00 (2,408,697.16) Inventories (1,533,743,955.42) (730,606,156.62) (2,000,202,755.92) (1,120,211,811.40) Other current assets 260,896,004.68 (444,981,395.90) 295,475,749.44 (451,937,001.37) Other non-current assets 2,903,650.20 (6,382,837.71) (1,450,797.99) (2,159,382.33) (Increase) Decrease in assets from operation (1,261,571,407.49) (1,174,692,711.44) (1,704,021,156.47) (1,576,716,892.26) Increase (Decrease) in part of operating liabilities Land payable - promissory notes (51,686,000.00) (64,167,000.00) (51,686,000.00) (64,167,000.00) Accounts and notes payable (46,598,400.26) 19,891,688.37 9,591,992.52 18,826,830.61 Unrealized installment income 123,239,056.85 186,685,270.00 134,066,556.85 191,314,570.00 Other current liabilities 84,386,483.34 41,160,023.93 49,916,810.11 37,282,121.49 Increase (Decrease) from liabilities operation 109,341,139.93 183,569,982.30 141,889,359.48 183,256,522.10

Note to financial statements are parts of these financial statments. Annual Report 2008 83

Statements of Cash Flows (Continued) Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007 Cash generated (paid) from operation Interest paid Corporate income tax paid Net cash provided by (used in) operating activities Cash flows from investing activities Payments for purchase of current investment-open ended fund-debt securities Proceeds from sale of current investment-open ended fund-debt securities (Increase) in loans to subsidiaries (Increase) Decrease in deposits with commitment Payments for increase capital in subsidiaries Payments for land held for development Proceeds from sales of assets Payments for purchase of equipment and office supplies Net cash provided by (used in) investing activities Cash flows from financing activities Increase (Decrease) in overdrafts and short-term loans from financial institution Increase (Decrease) in short-term loans

Consolidated (Baht) 2008 2007

(552,502,144.92) (288,028,287.62) (92,474,545.95) (933,004,978.49) (545,872,747.32) 574,572,645.00 0.00 10,382,393.07 0.00 0.00 27,000.00 (4,265,167.38) 34,844,123.37 304,938,372.09 (45,834,200.00)

Note to financial statements are parts of these financial statments. 84

Annual Report 2008

(828,438,828.00) (123,641,532.88) (121,177,993.00) (1,073,258,353.88) (550,659,500.00) 536,279,257.51 0.00 19,168,572.12 0.00 (57,000,000.00) 1,401,869.16 (12,229,406.08) (63,039,207.29) 105,966,961.84 (35,546,700.00)

Separated (Baht) 2008 2007

(1,018,615,408.09) (194,129,444.32) (77,006,015.43) (1,289,750,867.84) (241,372,747.32) 241,260,200.00 99,745,800.00 10,369,346.36 0.00 0.00 27,000.00 (4,207,896.36) 105,821,702.68 345,496,918.53 50,000,000.00

(1,250,018,639.28) (96,244,184.99) (105,466,969.53) (1,451,729,793.80) (403,359,500.00) 404,574,257.51 (62,716,700.00) 15,804,350.70 (14,112,500.00) 0.00 1,401,869.16 (11,945,527.86) (70,353,750.49) 65,919,013.53 (42,000,000.00)

Statements of Cash Flows (Continued) Prinsiri Public Company Limited And Subsidiaries For the Years Ended December 31, 2008 And 2007 Increase (Decrease) in liabilities under financial lease agreement Increase (Decrease) in long-term loans Proceeds from increase common shares Proceeds from the payment of common shares from minority interest Dividend paid to minority interest Dividend paid Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents as at January 1 Cash and cash equivalents as at December 31

Consolidated (Baht) 2008 2007

(2,970,078.48) 625,136,688.64 0.00 0.00 (720.00) (30,150,000.00) 851,120,062.25 (47,040,792.87) 113,204,772.53 66,163,979.66

(1,029,407.10) 735,729,513.64 502,500,000.00 11,637,500.00 (426.00) (180,900,000.00) 1,138,357,442.38 2,059,881.21 111,144,891.32 113,204,772.53

Separated (Baht) 2008 2007

(2,850,909.12) 765,292,658.64 0.00 0.00 0.00 (30,150,000.00) 1,127,788,668.05 (56,140,497.11) 84,966,180.35 28,825,683.24

(928,066.98) 1,169,027,622.64 502,500,000.00 0.00 0.00 (180,900,000.00) 1,513,618,569.19 (8,464,975.10) 93,431,155.45 84,966,180.35

Supplemental disclosures of cash flows information are detailed in note 31. Note to financial statements are parts of these financial statments.

Annual Report 2008 85

Notes to Financial Statements Prinsiri Public Company Limited And Subsidiaries As At December 31, 2008 And 2007 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 BuildingA, 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 2008 2007 2008 2007 Staff expenses (Million Baht) 146.60 126.34 141.17 120.85 2. FINANCIAL STATEMENTS PRESENTATION BASIS 2.1 The financial statements have been prepared in accordance with the generally accepted accounting principles enunciated under the Accounting Act B.E. 2543 including the Accounting Standards issued under the Accounting Professions Act B.E. 2547 and presented in accordance with the regulations of the Securities and Exchange Commission regarding the preparation of financial statements under the Securities and Exchange Act B.E. 2535. Formerly, the condensed form of financial statements have been prepared under the notification of the Department of Business Development dated September 14, 2001 regarding the condensed form which must be shown in the financial statements. However, the Company has changed the format of financial statements presentation for the year ended December 31, 2008 to be in compliance with the Accounting Standards No. 25 “(Revised 2007) Cash Flows Statements” and No. 35 “(Revised 2007) Presentation of Financial Statements” which is effective on or after January 1, 2008 onwards, by reclassifying the financial statements for the year ended December 31, 2007 to be appropriated. 2.2 The Company and subsidiaries’ financial statements have been prepared under the historical cost convention, except as transaction disclosed in related accounting policy. 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. 86

Annual Report 2008

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”. 3.3 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. 3.4 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 Type of business Relationship shareholding 2008 2007 Growed Yotha Group Co., Ltd. 99.99 99.99 Construction distributor and contractor Subsidiary Prin Venture Co., Ltd. 51.00 51.00 Real estate development for sales Subsidiary CN SPR (Thailand) Co., Ltd. 99.97 99.97 Real estate for lease or sales of real Subsidiary estate held for development 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 instead of the old Accounting Standards which were cancelled as following : 4.1 The revised Accounting Standards became effective in the year 2007 No. 44 (Revised 2007) “Consolidated Financial Statements and Separate Financial Statements” No. 45 (Revised 2007) “Investments in Associates” No. 46 (Revised 2007) “Interests in Joint Venture” Those three Accounting Standards are required to adopt for the financial statements beginning on or after January 1, 2007 onwards. And on January 1, 2007 the Company had changed the accounting policy for investment in subsidiaries in the separate financial statements in order to conform to the revised Accounting Standards No. 44 as stated in notes to financial statements no.36. The Accounting Standards No. 45 and No. 46 are not relevant to the Company. 4.2 The revised Accounting Standards are operative in the year 2008 No. 25 (Revised 2007) “Cash Flows Statements” No. 29 (Revised 2007) “Leases” No. 31 (Revised 2007) “Inventories” Annual Report 2008 87

No. 33 (Revised 2007) “Borrowing Costs” No. 35 (Revised 2007) “Presentation of Financial Statements” No. 39 (Revised 2007) “Accounting Policies, Changes in Accounting Estimates and Errors” No. 41 (Revised 2007) “Interim Financial Reporting” No. 43 (Revised 2007) “Business Combinations” No. 49 (Revised 2007) “Construction Contracts” No. 51 “Intangible assets” Those ten Accounting Standards are required to adopt for the financial statements beginning on or after January 1, 2008 onwards. The Company’s management deems that the Accounting Standards No 43, No. 49 and No. 51 are not relevant to the Company’s busniess. The Company has adopted all of the other related Accounting Standards which had no material impact to financial statements of the Company. 4.3 The Accounting Standards which is effective in 2009 No. 36 (Revised 2007) “Impairment of Assets” No. 54 (Revised 2007) “Non-current Assets Held for Sale and Discontinued Operations” The adoption of aforementioned Accounting Standards is required for the financial statements for the accounting period beginning on or after January 1, 2009 onwards. The Company’s management deems that the adoption of those Accounting Standards had no material impacts on the financial statements. 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. 88

Annual Report 2008

5.4 Inventories Valuation Inventories - properties foreclosed 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. Subsidiariesâ&#x20AC;&#x2122; 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-current assets 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. 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 Assets under hire purchase agreement The Company records assets under hire purchase agreement as assets and liabilities in an amount equal to the fair value of the hire purchase assets at the inception of the agreement. Interest expenses are recorded to each period over the term of agreement based on the outstanding balance of the liabilities under hire purchase agreement during each period.

Annual Report 2008 89

5.10 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. 5.11 Cash and cash equivalents Cash and cash equivalents mean cash on hand and all type of deposit excluding deposit which held to maturity. 5.12 Basic earnings per share Earnings (Loss) per share as 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. 5.13 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 notes related thereto. Consequent actual results may differ from these estimates. 5.14 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. 5.15 Employees benefit 5.15.1 Provident fund The Company has established provident fund under the defined contribution plan. The fundâ&#x20AC;&#x2122;s assets are separated entities which are administered by the outsider fund manager. The Company and employees made contribution into such provident fund. The Companyâ&#x20AC;&#x2122;s contribution payments to the provident fund were recorded as expenses in statements of income in the period in which they are incurred. 5.15.2 Retirement benefit This obligation is to provide retirement benefit to retired employees under the defined retirement plan, determined by the labour law. The Company will record the retirement cost in the period in which the employees retired.

Annual Report 2008

6. CASH AND CASH EQUIVALENTS Cash on hand Cheque in transit Current accounts Savings deposit Total

Consolidated (Baht) 2008 2007 1,032,701.82 1,118,222.52 5,822,500.00 45,471,594.00 13,833,483.44 15,909,645.85 45,475,294.40 50,705,310.16 66,163,979.66 113,204,772.53

Separated (Baht) 2008 2007 817,319.91 918,154.52 2,372,500.00 44,531,594.00 13,286,099.85 14,912,242.86 12,349,763.48 24,604,188.97 28,825,683.24 84,966,180.35

7. CURRENT INVESTMENT Open end fund - debt securities Total

Consolidated (Baht) 2008 2007 15,457,345.70 43,058,418.70 15,457,345.70 43,058,418.70

Separated (Baht) 2008 2007 0.00 0.00 0.00 0.00

8. ACCOUNTS RECEIVABLE - NET Consolidated (Baht) Note 2008 2007 Accounts receivable - Related companies 29.1 0.00 0.00 - Others 12,115,257.15 24,109,971.02 Total 12,115,257.15 24,109,971.02 Less Allowance for doubtful accounts - other receivables (9,717,114.43) (7,935,593.11) Total 2,398,142.72 16,174,377.91

Separated (Baht) 2008 2007 1,579,360.00 3,686,008.00 345,000.00 395,000.00 1,924,360.00 4,081,008.00 (345,000.00) (395,000.00) 1,579,360.00 3,686,008.00

The outstanding receivable are separated on aging as follows: In due From 1 – 90 days From 91 – 180 days From 181 – 360 days Over 360 days Total

Consolidated (Baht) 2008 2007 788,971.22 1,689,212.32 1,476,537.83 3,040,645.17 0.00 5,652,479.51 496,190.69 6,697,043.82 9,353,557.41 7,030,590.20 12,115,257.15 24,109,971.02

Separated (Baht) 2008 2007 1,579,360.00 3,686,008.00 0.00 0.00 0.00 0.00 0.00 0.00 345,000.00 395,000.00 1,924,360.00 4,081,008.00 Annual Report 2008 91

9. LOANS TO SUBSIDIARIES COMPANIES - PROMISSORY NOTES As at December 31, 2008 and 2007, the Company has loans to two subsidiary companies by

receiving promissory notes amount of Baht 211.25 million and Baht 311.00 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. 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) Separated (Baht) 2008 2007 2008 2007 48,879,537.38 79,829,263.90 48,879,537.38 79,829,263.90 894,735.68 1,416,865.78 0.00 0.00 3,521,223,940.64 2,283,053,469.24 3,303,746,469.20 1,857,536,326.59 2,631,142,869.39 2,237,706,065.25 2,470,462,253.44 1,864,953,155.28 42,256,503.91 34,850,218.74 40,071,994.57 29,615,919.83 227,737,426.93 172,481,184.38 193,721,714.61 101,424,351.23 6,472,135,013.93 4,809,337,067.29 6,056,881,969.20 3,933,359,016.83

As at December 31, 2008, part of properties foreclosed amount of Baht 296.20 million which is a project designed for 2 condominium buildings was ordered by the Public Works Department, Chatuchak District Office, Bangkok to correct the unpermit building modification and construction. Therefore, the Company stopped the construction of such condominiums until the approval of the Public Works Department, Chatuchak District Office, Bangkok is met. On March 12, 2008, the Company submitted the request for building modification and construction and was permitted from the Public Works Department on December 15, 2008. As at December 31, 2008, the Company estimated the contingent loss if the Public Works Department ordered the Company to change such condomimium building plan, the Company, thus, has to amortize properties foreclosed for changed building plan as expenses in the amount of Baht 25.45 million, the compensation including interest from cancellation of contract to be paid to any customers amounted to Baht 6.38 million, correct the design of building operating expense amount of Baht 5.90 million and other expenses amount of Baht 5.00 million, totally Baht 42.73 million which is presented as loss on correct of plan in statements of income under the caption of other expenses. As at December 31, 2008 and 2007, most of land with its construction of each project of the Company and subsidiaries in the amount of Baht 5,720.32 million and Baht 4,668.72 million, respectively (Baht 5,546.12 million and Baht 3,853.71 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. 92

Annual Report 2008

As at December 31, 2008 and 2007, the Company and subsidiaries have recorded interest payment as cost of project of Baht 154.50 million and Baht 153.94 million, respectively (Baht 148.77 million and Baht 81.44 million, respectively for the Company only). 11. INVESTMENT IN SUBSIDIARIES

Percentage of shareholding

Cost

Growed Yotha Group Co., Ltd. Prin Venture Co., Ltd. CN SPR (Thailand) Co., Ltd. Total

99.99 51.00 99.97

32,000,000.00 51,000,000.00 2,000,000.00 85,000,000.00

Separated (Baht) 2008 Dividend received 11,999,280.00 0.00 0.00 11,999,280.00

2007 Cost 32,000,000.00 51,000,000.00 2,000,000.00 85,000,000.00

Dividend received 7,099,574.00 0.00 0.00 7,099,574.00

12. LAND AND EQUIPMENT - NET

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 â&#x20AC;&#x201C; net

Consolidated (Baht) December 31, 2007 Increase Decrease 3,279,342.43 0.00 0.00 2,196,710.00 0.00 0.00 2,370,059.66 127,466.97 (7,490.00) 22,801,301.59 7,524,375.15 (73,937.00) 8,062,698.78 0.00 0.00 19,121,782.14 888,325.96 (80,172.00) 27,779,622.81 3,920,080.00 (45,500.00) 85,611,517.41 12,460,248.08 (207,099.00) 110,617.12 440,063.76 0.00 1,506,184.89 253,806.63 (2,202.75) 9,016,505.70 5,052,124.89 (526.11) 5,867,864.56 1,290,133.52 0.00 8,616,816.89 3,410,876.76 (59,499.47) 19,700,413.15 3,763,311.26 (45,499.00) 44,818,402.31 14,210,316.82 (107,727.33) 40,793,115.10

December 31, 2008 3,279,342.43 2,196,710.00 2,490,036.63 30,251,739.74 8,062,698.78 19,929,936.10 31,654,202.81 97,864,666.49 550,680.88 1,757,788.77 14,068,104.48 7,157,998.08 11,968,194.18 23,418,225.41 58,920,991.80 38,943,674.69

Annual Report 2008 93

As at December 31, 2008 and 2007, the Company and subsidiaries have fixed assets at cost of Baht 31.18 million and Baht 11.19 million, respectively which were fully depreciated but are still being

operated. Depreciation for the years ended December 31, 2008 and 2007 amounted to Baht 14.21 million and Baht 12.47 million, respectively.

Separated (Baht) December 31, 2007 Increase Decrease December 31, 2008 3,279,342.43 0.00 0.00 3,279,342.43 2,196,710.00 0.00 0.00 2,196,710.00 2,362,194.24 127,466.97 (7,490.00) 2,482,171.21 22,430,845.71 7,524,375.15 0.00 29,955,220.86 6,647,691.98 0.00 (73,937.00) 6,573,754.98 17,351,190.14 831,054.94 (80,172.00) 18,102,073.08 27,751,118.14 3,920,080.00 (45,500.00) 31,625,698.14 82,019,092.64 12,402,977.06 (207,099.00) 94,214,970.70 110,617.12 440,063.76 0.00 550,680.88 1,503,613.68 252,538.53 (2,202.75) 1,753,949.46 8,960,683.60 4,977,627.71 (526.11) 13,937,785.20 5,497,326.22 1,008,068.74 0.00 6,505,394.96 7,984,685.62 3,082,778.52 (59,499.47) 11,007,964.67 19,671,909.48 3,763,311.26 (45,499.00) 23,389,721.74 43,728,835.72 13,524,388.52 (107,727.33) 57,145,496.91 38,290,256.92 37,069,473.79

As at December 31, 2008 and 2007, the Company has fixed assets at cost of Baht 30.98 million and Baht 10.99 million which were fully depreciated but are still being operated. Depreciation for the years ended December 31, 2008 and 2007 amounted to Baht 13.52 million and Baht 11.81 million, respectively. As at December 31, 2008 and 2007, the Companyâ&#x20AC;&#x2122;s land was mortgaged as collateral for overdraft lines with a commercial bank of subsidiary company as mentioned in note 15.

Annual Report 2008

13. LAND HELD FOR DEVELOPMENT Land and cost of land development

Consolidated (Baht) 2008 2007 126,533,625.00 126,533,625.00 126,533,625.00 126,533,625.00

Separated (Baht) 2008 2007 69,533,625.00 69,533,625.00 69,533,625.00 69,533,625.00

As at December 31, 2007 and 2008, land held for development of the Company and subsidiaries of Baht 126.53 million and Baht 69.53 million is mortgaged as collateral for the promissory notes and overdrafts line, respectively as mentioned in note 15. 14. DEPOSIT AT BANKS WITH COMMITMENT As at December 31, 2008 and 2007, the Company and subsidiaries have savings deposit and fixed deposit amount of Baht 85.49 million and Baht 91.64 million, respectively (Baht 67.98 million and Baht 80.61 million, respectively for the Company only). Some savings deposit of Baht 78.77 million and Baht 74.53 million, respectively (Baht 63.67 million and Baht 65.94 million, respectively for the Company only) are deposits from collected the central utilities service expenses from clients. The Company and subsidiaries have commitment to assign such collection to each village committee when they have been already appointed. The Company and subsidiaries have recorded such liabilities as other payables in the financial statements. The remaining is used as guarantee with a commercial bank for the issuance of letter of guarantee as stated in note 32.2 and 32.3. 15. BANK OVERDRAFTS AND SHORT - TERM LOANS FROM FINANCIAL INSTITUTIONS Bank overdrafts Bill of exchange – financial institutions Promissory notes – commercial bank Short - term loans – commercial bank Total

Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 8,201,871.02 15,176,749.53 7,784,155.56 13,038,218.26 0.00 199,615,168.77 0.00 199,615,168.77 730,376,150.00 180,000,000.00 730,376,150.00 180,000,000.00 0.00 38,847,730.63 0.00 10,000.00 738,578,021.02 433,639,648.93 738,160,305.56 392,663,387.03

Loans from financial institutions – bill of exchange Bill of exchange Less Interest expense discount Bill of exchange – net

Consolidated (Baht) 2008 2007 0.00 200,000,000.00 0.00 (384,831.23) 0.00 199,615,168.77

Separated (Baht) 2008 2007 0.00 200,000,000.00 0.00 (384,831.23) 0.00 199,615,168.77 Annual Report 2008 95

As at December 31, 2008 and 2007, the Company and subsidiaries have bank overdrafts lines of Baht 110.40 million and Baht 100.00 million (Baht 95.40 million and Baht 80.00 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 and 13, respectively. As at December 31, 2008, the Company issued promissory notes to four commercial banks in the amount of Baht 350.38 million at the interest rate of MLR - 0.5% per annum, guaranteed by project ‘s land with its construction, land held for development and guarantee by securities of the director’s intimate person as mentioned in note 10 and 13, respectively. As at December 31, 2008 and 2007, the Company issued promissory notes to a commercial bank in the amount of Baht 380.00 million and Baht 180.00 million, respectively at the interest rate of 4.50 5.25% per annum, are due in 2008 guaranteed by project’s land and construction in note 10. As at December 31, 2007, the Company issued bill of exchange to financial institution for the amount of Baht 200.00 million are due in 2008 at the interest rate of 4.60 - 5.8% per annum. The repayment due to such promissory notes in whole amount was made by the Company in January 2008. As at December 31, 2007, a subsidiary has obtained short - term 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 33.3. In February 2008, the subsidiary repaid such short - term loans in full amount. 16. SHORT - TERM LOANS - PROMISSORY NOTES Related companies Directors Total

Consolidated (Baht) Note 2008 2007 29.6.2,29.6.4 149,165,800.00 245,000,000.00 29.6.3 100,000,000.00 50,000,000.00 249,165,800.00 295,000,000.00

Separated (Baht) 2008 2007 0.00 0.00 100,000,000.00 50,000,000.00 100,000,000.00 50,000,000.00

As at December 31, 2008 and 2007, a subsidiary (shareholder) issued promissory notes in the amount of Baht 149.17 million and Baht 245.00 million, respectively at the interest rate of MLR - 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, 2008 and 2007, the Company issued promissory notes to a director’s in the total amount of Baht 100.00 million and Baht 50.00 million, respectively which are due at call at the interest rate of 5.00% per annum without collaterals.

Annual Report 2008

17. LAND PAYABLE - PROMISSORY NOTES As at December 31, 2007, the Company has land payable - promissory notes of Baht 51.69 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. 18. ACCOUNTS AND NOTES PAYABLE Consolidated (Baht) Separated (Baht) Note 2008 2007 2008 2007 Accounts payable - Related companies 29.7 773,673.13 1,186,744.63 49,676,069.81 12,361,305.08 - Others 145,133,956.11 224,944,928.63 127,625,130.04 172,973,428.55 Notes payable 56,682,806.77 23,057,163.01 40,470,842.71 22,845,316.41 Total 202,590,436.01 249,188,836.27 217,772,042.56 208,180,050.04 19. CURRENT PORTION OF LONG-TERM LIABILITIES Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Note Land payable - promissory notes 20 0.00 100,000,000.00 0.00 0.00 Liabilities under financial lease agreement 21 4,148,924.44 1,505,805.78 4,020,763.94 1,386,636.42 Long-term loans 22 1,342,589,182.00 662,691,190.14 1,342,589,182.00 662,691,190.14 Total 1,346,738,106.44 764,196,995.92 1,346,609,945.94 664,077,826.56 A subsidiary has land payable - promissory notes which due in February 2008 was transferred to be long - term loan with the avaled commercial bank. The repayment of principal will be made on the redemption of mortgaging real estate foreclosed as mentioned in note 22. 20. LAND PAYABLE - LONG - TERM PROMISSORY NOTES - NET Consolidated (Baht) Note 2008 2007 Land payable - promissory notes 0.00 100,000,000.00 Less Current portion of long - term liabilities 19 0.00 (100,000,000.00) Total 0.00 0.00

Separated (Baht) 2008 2007 0.00 0.00 0.00 0.00 0.00 0.00

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 lines are guaranteed by land with its construction and by the Companyâ&#x20AC;&#x2122;s guarantee as mentioned in note 10 and 32.3, respectively. Annual Report 2008 97

Such promissory notes are due in February 2008, therefore, was transferred to be current portion of long - term liabilities in whole amount. However, the subsidiary could withdraw long - term loans facility 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 Vehicles Less Accumulated depreciation Net book value

Separated (Baht) 2008 2007 10,033,967.18 4,281,636.52 3,257,000.00 0.00 (2,510,176.81) (524,186.43) 10,780,790.37 3,757,450.09

The minimum amount to be paid under financial lease agreement are as follows : Within 1 year Over 1 year, less than 3 years Over 3 years, less than 5 years Less Future interest expenses of financial lease agreement Present value of liabilities under financial lease agreement

Consolidated (Baht) 2008 2007 4,629,835.68 1,712,470.80 4,312,447.64 2,216,609.86 741,054.00 0.00 9,683,337.32 3,929,080.66 (835,649.80) (306,395.36) 8,847,687.52 3,622,685.30

Separated (Baht) 2008 2007 4,496,055.72 1,578,690.84 4,290,599.31 2,060,981.57 741,054.00 0.00 9,527,709.03 3,639,672.41 (829,967.91) (286,102.87) 8,697,741.12 3,353,569.54

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

Consolidated (Baht) 2008 2007 10,404,423.06 4,652,092.40 3,257,000.00 0.00 (2,640,496.09) (580,008.53) 11,020,926.97 4,072,083.87

Annual Report 2008

Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 8,847,687.52 3,622,685.30 8,697,741.12 3,353,569.54 (4,148,924.44) (1,505,805.78) (4,020,763.94) (1,386,636.42) 4,698,763.08 2,116,879.52 4,676,977.18 1,966,933.12

22. LONG - TERM LOANS - NET Long - term loans from - Commercial banks Total Less Current portion of long-term loans Net

Note 19

Consolidated (Baht) 2008 2007 2,648,866,482.00 1,923,729,793.36 2,648,866,482.00 1,923,729,793.36 (1,342,589,182.00) (662,691,190.14) 1,306,277,300.00 1,261,038,603.22

Separated (Baht) 2008 2007 2,648,866,482.00 1,883,573,823.36 2,648,866,482.00 1,883,573,823.36 (1,342,589,182.00) (662,691,190.14) 1,306,277,300.00 1,220,882,633.22

As at December 31, 2008 and 2007, the Company has loans from 6 local commercial banks and financial institutions for total credit lines of Baht 6,248.17 million and Baht 4,954.06 million, respectively at the interest rate of MLR - 1.50% to MLR 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 2009 - 2013. Such loans are guaranteed by mortgaging land with construction of each loaned project guaranteed by directors and related persons’ land as stated in note 10 and 29.16. As at December 31, 2007, a subsidiary has loans from 2 local commercial banks for credit line of Baht 684.54 million, at the interest rate of MLR - 0.75% 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 and guaranteed by the Company in the amount Baht 349.12 million as stated in note 10 and note 33.3, respectively. In June 2008, subsidiary has made repayment for such loans in fully. As at December 31, 2008 and 2007, the Company and subsidiaries have unused facilities amount Baht 2,759.11 million and Baht 2,366.13 million, respectively (Baht 2,759.11 million and Baht 2,070.15 million, respectively for the Company only). 23. SHARE CAPITAL 23.1 According to the minutes of Board of director’s meeting and General Shareholders’ meeting no. 1/2008 held on February 20, 2008 and April 22, 2008, respectively the Company passed the resolution to cancel the newly issued ordinary share and approve the issuance 335,000,000 units of warrants offered to the existing shareholders without remuneration at the ratio of 3 shares to 1 unit of warrant. The term of warrant is valid for 2 years from the issued date. The exercise price is Baht 4.00 per share and the exercise date is elapsed every six months on the last business day of June and December of each year during the term of warrants. All unexercised warrants shall be automatically terminated. Annual Report 2008 99

23.2 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. 23.3 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 million shares at par value of Baht 1 each as follows : 23.3.1 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 April 5, 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. 23.3.2 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. 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. 100 Annual Report 2008

25. REMUNERATION INCOME ON TRANSFERRED RIGHT IN CONTRACT TO BUY AND TO

SELL OF LAND In the second quarter of 2008, the Company has received the remuneration income on transferred right in contract to buy and to sell of land from a company of Baht 22.43 million which derived from the Company entered into contract to buy and to sell with the land owner, the Company, thus, recorded such transaction as remuneration income on transferred right in whole amount in statements of income under the caption of other income for the year ended December 31, 2008. 26. DIVIDEND PAID According to the minutes of the Board of directors’ meeting no. 1/2008 and the minutes of shareholders’ annual general meeting for the year 2008 held on February 20, 2008 and April 22, 2008, respectively, the Company passed the resolution to pay dividend for the results of its operation for the year 2007 at Baht 0.03 each, amounting to Baht 30.15 million which was paid to the shareholders on May 22, 2008. 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 February 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. 27. DIRECTORS’ REMUNERATION PAYMENT POLICY According to the minutes of the shareholders’ general meeting no. 1/2008 and no. 1/2007 held on April 22, 2008 and March 26, 2007, required to pay directors’ remuneration including meeting allowance and gratuity for the year 2008 and 2007 not exceed amount of Baht 2.48 million. 28. PROVIDENT FUND The Company and employees 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 employees are entitled the benefits on their resignation in accordance with the fund regulation. As at December 31, 2008 and 2007, the Company and subsidiaries paid the contribution to provident fund amount of Baht 3.34 million and Baht 2.56 million, respectively (Baht 3.19 million and Baht 2.43 million, respectively for the Company only).

Annual Report 2008 101

29. TRANSACTION WITH RELATED PERSONS AND PARTIES No. Persons or parties Relationship 1. Mr. Santi Shareholder Kovitchindachai

2. Growed Yotha Group Subsidiary Co., Ltd.

3. Prin Venture Co., Ltd. Subsidiary

4. Uni Venture Plc.

102 Annual Report 2008

Shareholder of a subsidiary in 49% shareholding

Type of relation Loans to the Company Use land to guarantee credit line for the Company Construction contract service and sales of goods Loans to the Company The Company used land to guarantee overdrafts lines Use credit line for purchasing goods of Baht 30 million from June - August 2008 Loans from the Company in the form of promissory notes The Company guaranteed all credit lines of projectâ&#x20AC;&#x2122;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 Loans to a subsidiary in form of promissory notes

Pricing policy Loans are due at call at the agreed rate of 5.00-6.50% per annum withmonthly interest payment No remuneration Price are close to market value Loans are due at call at the agreed rate of 5% per annum with monthly interest payment No remuneration No remuneration

Loans are due at call at the agreed rate of MLR + 2% per annum, and changed to MLR per annum since July 1, 2008. Interest is payable including 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 sales volumn At the monthly agreed service fee of Baht 0.10 million Loans are due at call at the agreed rate of MLR + 2% per annum and changed to MLR per annum since July 1, 2008. Interest is payable including principal.

No. Persons or parties Relationship

Pricing policy Guarantee based on shareholding ratio At the agreed service fee of Baht 0.09 million per month excluding VAT Advance payment in using in Non-inter interest bearing 5. Ms. Nipa Director of 2 Aphirathanarungruang subsidiaries and the the Company’s operation and Company’s repayment in short-term management 6. Thai Chinda Curtain Some directors are Sales and install the Based on the normal course Co., Ltd. major shareholders decoration materials to the of business of the Company Company Loans are due at call at the 7. CN SPR (Thailand) Subsidiary Loans to the Company in agreed rate of MLR per Co., Ltd. form of promissory notes annum by paying with principal Use land held for No remuneration development to guarantee loans from bank of the Company 8. Ms. Siriluck The Company’s Loans to the Company in Loans are due at call at the Kovitchindachai director form of promissory notes interest rate of 5% per annum by making monthly payment. Guarantee loans from bank for No remuneration Baht 48.00 million

Type of relation Uni Venture Co., Ltd. guaranteed all lines of project’s land with its construction of a subsidiary Financial advisor of a subsidiary

Transactions and amounts of related persons and parties are as follows : 29.1 Accounts receivable Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Prin Venture Co., Ltd. Accounts receivable - management services 0.00 0.00 749,000.00 749,000.00 Accounts receivable - sales management services 0.00 0.00 730,360.00 2,857,008.00 Accounts receivable - others 0.00 0.00 100,000.00 80,000.00 Total 0.00 0.00 1,579,360.00 3,686,008.00 Annual Report 2008 103

29.2 Inventory Uni Venture Plc. Deferred interest expenses

Consolidated (Baht) 2008 2007 40,932,794.07 37,984,533.25

Separated (Baht) 2008 2007 0.00 0.00

29.3 Short - term loans to related companies - promissory notes Prin Venture Co., Ltd. Beginning balance Loans received during the period Loans repaid during the period Ending balance CN SPR (Thailand) Co., Ltd. Beginning balance Loans received during the period Ending balance Total

Consolidated (Baht) 2008 2007 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

Separated (Baht) 2008 2007 255,000,000.00 248,283,300.00 0.00 114,999,200.00 (99,745,800.00) (108,282,500.00) 155,254,200.00 255,000,000.00 56,000,000.00 0.00 0.00 56,000,000.00 56,000,000.00 56,000,000.00 211,254,200.00 311,000,000.00

29.4 Advance from directors of subsidiaries and the Companyâ&#x20AC;&#x2122;s management Ms. Nipa Apirattanarungruang Beginning balance Received advance payment during the period Advance repayment Ending balance

Consolidated (Baht) 2008 2007 0.00 0.00 0.00 18,757,500.00 0.00 (18,757,500.00) 0.00 0.00

Separated (Baht) 2008 2007 0.00 0.00 0.00 18,757,500.00 0.00 (18,757,500.00) 0.00 0.00

29.5 Accrued interest receivable - short - term loans - promissory notes Prin Venture Co., Ltd. CN SPR (Thailand) Co., Ltd. Total

104 Annual Report 2008

Consolidated (Baht) 2008 2007 0.00 0.00 0.00 0.00 0.00 0.00

Separated (Baht) 2008 2007 0.00 39,079,685.44 6,047,616.44 2,084,082.19 6,047,616.44 41,163,767.63

29.6 Short - term loans - promissory notes

Consolidated (Baht) 2008 2007 29.6.1 Mr. Santi Kovitchindachai Beginning balance 0.00 20,000,000.00 Loans received during the period 15,000,000.00 0.00 Loans repaid during the period (15,000,000.00) (20,000,000.00) Ending balance 0.00 0.00 29.6.2 Uni Venture Plc. Beginning balance 245,000,000.00 238,546,700.00 Loans received during the period 0.00 86,117,500.00 Loans repaid during the period (95,834,200.00) (79,664,200.00) Ending balance 149,165,800.00 245,000,000.00 29.6.3 Ms. Siriluck Kovitchindachai Beginning balance 50,000,000.00 0.00 Loans received during the period 50,000,000.00 50,000,000.00 Loans repaid during the period 0.00 0.00 Ending balance 100,000,000.00 50,000,000.00 29.6.4 Growed Yotha Group Co., Ltd. Beginning balance 0.00 0.00 Loans received during the period 0.00 0.00 Loans repaid during the period 0.00 0.00 Ending balance 0.00 0.00 Total 249,165,800.00 295,000,000.00 29.7 Accounts payable

Separated (Baht) 2008 2007 0.00 20,000,000.00 15,000,000.00 0.00 (15,000,000.00) (20,000,000.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 50,000,000.00 0.00 50,000,000.00 50,000,000.00 0.00 0.00 100,000,000.00 50,000,000.00 0.00 0.00 40,000,000.00 0.00 (40,000,000.00) 0.00 0.00 0.00 100,000,000.00 50,000,000.00

Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 0.00 0.00 48,983,149.58 11,174,560.45 773,673.13 1,186,744.63 692,920.23 1,186,744.63 773,673.13 1,186,744.63 49,676,069.81 12,361,305.08

Growed Yotha Group Co., Ltd. Accounts payable - contractor, goods Thai Chinda Curtain Co., Ltd. Accounts payable - decoration Total

Annual Report 2008 105

29.8 Retention

Consolidated (Baht) 2008 2007 0.00 0.00 0.00 138,399.00 0.00 138,399.00

Growed Yotha Group Co., Ltd. Retention - construction cost Thai Chinda Curtain Co., Ltd. Retention - decoration Total

29.9 Accrued interest payable - short - term loans - promissory notes

Consolidated (Baht) 2008 2007 0.00 37,592,624.71

Uni Venture Plc.

Consolidated (Baht)

Prin Venture Co., Ltd. CN SPR (Thailand) Co., Ltd. Total

Separated (Baht)

For the year ended For the year ended December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

0.00 0.00 0.00

18,899,057.47 3,963,534.25 22,862,591.72

23,621,271.01 2,084,082.19 25,705,353.20

29.11 Administrative income Prin Venture Co., Ltd.

Separated (Baht) 2008 2007 0.00 0.00

29.10 Interest receivable - short - term loans - promissory notes

Separated (Baht) 2008 2007 4,586,864.55 4,948,858.33 0.00 138,399.00 4,586,864.55 5,087,257.33

Consolidated (Baht)

Separated (Baht)

For the year ended For the year ended December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

0.00

8,400,000.00

29.12 Sales management income

Prin Venture Co., Ltd.

106 Annual Report 2008

Consolidated (Baht)

Separated (Baht)

For the year ended For the year ended December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

0.00

13,687,368.13

18,005,626.75

29.13 Other service income Prin Venture Co., Ltd.

Separated (Baht)

For the year ended For the year ended December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

0.00

1,200,000.00

260,419.50

29.14 Cost of sales Growed Yotha Group Co., Ltd. - Contractual income - Purchase of materials Thai Chinda Curtain Co., Ltd. - Decoration expenses Total

Consolidated (Baht)

Separated (Baht)

For the year ended For the year ended December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

0.00 0.00 0.00 1,385,494.37 1,385,494.37 1,385,494.37

0.00 0.00 0.00 7,563,622.28 7,563,622.28 7,563,622.28

25,951,380.75 254,705,200.59 280,656,581.34 1,385,494.37 1,385,494.37 282,042,075.71

31,020,241.61 137,417,641.86 168,437,883.47 7,563,622.28 7,563,622.28 176,001,505.75

29.15 Interest expenses Mr. Santi Kovitchindachai Ms. Siriluck Kovitchindachai Growed Yotha Group Co., Ltd. Total

Consolidated (Baht)

Separated (Baht)

For the year ended For the year ended December 31, 2008 December 31, 2007 December 31, 2008 December 31, 2007

232,397.26 4,697,945.22 0.00 4,930,342.48

276,712.34 123,287.67 0.00 400,000.01

232,397.26 4,697,945.22 421,917.81 5,352,260.29

276,712.34 123,287.67 0.00 400,000.01

29.16 Guarantee As at December 31, 2008, a director of the Company get into guarantee loans facility from bank amount of Baht 48.00 million as stated in note 22. As at December 31, 2007, 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 note 15.

Annual Report 2008 107

30. SUPPLEMENT DISCLOSURE OF CASH FLOWS INFORMATION 30.1 Cash and cash equivalents Cash and cash equivalents consist of cash on hand and remainning deposit at bank in the balance sheets as follows : Cash and deposits at bank

Consolidated (Baht) 2008 2007 66,163,979.66 113,204,772.53

Separated (Baht) 2008 2007 28,825,683.24 84,966,180.35

30.2 Non - cash transactions 30.2.1 In 2008 and 2007, the Company and subsidiaries have recorded restricted fixed deposit amount of Baht 24.97 million and Baht 15.10 million, respectively, and other payable by the same amount as stated in note 14 (in 2008 and 2007 amount of Baht 18.47 million and Baht 10.01 million, respectively for the Company only). 30.2.2 In 2008, the Company has transferred the restricted fixed deposit amount of Baht 20.73 million to the village committee and decrease in other payable by the same amount. 30.2.3 In 2008 and 2007, the Company and subsidiaries purchased assets by entering into financial lease amount of Baht 9.01 million and Baht 4.65 million, respectively (in 2008 and 2007 amount of Baht 9.01 million and Baht 4.28 million, respectively for the Company only). 30.2.4 In 2007, the Company has recorded the additional investment in a subsidiary from increase in its share capital amount of Baht 1 million and also recorded as accrued share subscription payable in other current liabilities by the same amount. 31. COMMITMENT 31.1 As at December 31, 2008 and 2007, the Company and subsidiaries had commitment to make payment for land under contract to buy and to sell for the amount of Baht 346.64 million and Baht 2,130.78 million, respectively (Baht 300.24 million and Baht 2,084.38 million, respectively for the Company only). 31.2 As at December 31, 2008 and 2007, the Company and subsidiaries had commitment on payment for rental from entering into long - term lease building agreement to be completed for the amount of Baht 15.22 million and Baht 4.31 million, respectively (Baht 13.72 million and Baht 2.21 million, respectively for the Company only). 31.3 As at December 31, 2008 and 2007, 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 1,234.67 million and Baht 1,080.16 million, respectively. (Baht 1,156.95 million and Baht 909.87 million, respectively for the Company only).

108 Annual Report 2008

31.4 As at December 31, 2008 and 2007, the Company and subsidiaries had commitment to make payment for advertising signboard to be matured under rent agreement for the amount of Baht 4.76 million and Baht 9.32 million, respectively (Baht 4.28 million and Baht 7.67 million, respectively for the Company only). 31.5 As at December 31, 2008, the Company is liable to pay rental from entering into rent of car agreement to be matured under agreement amount of Baht 3.38 million. 31.6 Obligation and commitment to complete projects on hand 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 (%)

Consolidated (Baht) 2008 2007 23 17 (2) (5) 6 11 27 23 18,538.27 17,781.85 12,771.51 12,103.80 68.89 68.07

Separated (Baht) 2008 2007 18 15 (2) (5) 6 8 22 18 16,284.13 15,562.73 10,949.60 10,827.59 67.24 69.57

32. CONTINGENT LIABILITIES 32.1 As at December 31, 2008 and 2007, the Company and subsidiaries had contingent liabilities from letter of guarantee issued by bank for guarantee project development of Baht 194.89 million and Baht 237.29 million, respectively (Baht 157.50 million and Baht 182.79 million, respectively for the Company only). 32.2 As at December 31, 2008 and 2007, a subsidiary had contingent liabilities from letter of guarantee issued by bank for guatantee purchasing goods of Baht 2 million. 32.3 As at December 31, 2008 and 2007, the Company had contingent liabilities on guarantee for overdraft line, short - term loan line, aval promissory notes, long - term loans and letter of guarantee credit line for a subsidiary, Prin Venture Co., Ltd. in the amount of Baht 24.17 million and Baht 443.47 million, respectively. 32.4 As at December 31, 2008 and 2007, the Company was sued in the 2 civil cases as follows : 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 Annual Report 2008 109

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. 32.5 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. 33. 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. 34. DISCLOSURE AND PRESENTATION OF FINANCIAL INSTRUMENTS 34.1 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. 34.2 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. 34.3 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.

110 Annual Report 2008

34.4 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. 35. CHANGE IN ACCOUNTING POLICY FOR INVESTMENT IN SUBSIDIARIES As stated in notes 4 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. 36. FINANCIAL STATEMENTS APPROVAL These financial statements have been approved to be issued by the Companyâ&#x20AC;&#x2122;s Board of directors on February 23, 2009.

Annual Report 2008 111

112