PF: Annual Report 2014 by propertyperfect shareinvestor

CONTENT Message from the Board of Directors Financial Information Company and Subsidiaries Information Nature of Business Management Structure Organization Chart Boards of Directors Business Policy and Overview Project’s Information Map Products and Service Competition Securities and Shareholder Management Details of Position Remuneration Governance Connected Transactions Risk Factors Internal Control Corporate Social Responsibility Management Dicussion and Analysis Report of Independent Auditor Statement of Financial Position

02 04 05 11 26 40 42 44 46 55 56 73 77 87 97 98 100 107 134 141 145 160 205 206

Note to consolidated The Board of Directors' Responsibilities Audit Committee Report Audit Fee Accuracy

216 267 268 270

Nature of Business

44 Business Policy and Overview

46 Project Information

Competition

Investors can obtain additional information on securities issuers in the Company’s Form 56-1 onwww.sec.or.th or the Company’s website.

ANNUAL REPORT 2014

MESSAGE FROM THE BOARD OF DIRECTORS

DR.TAWATCHAI NAKHATA CHAIRMAN

Throughout 2014, Thailand’s economy had been affected by political instability erupting in the fourth quarter of 2013. Though the instability eased, uncertainties remained. Lowincome earners’ purchasing power was weak, driven by high household debt and falling farmers’ low income, while the upper middle-income were cautious of spending. This resulted in lower-than-expected growth rate in the real estate market, but it is recovering slowly. Developers gradually launched projects in areas which would benefit from Bangkok’s urbanization but delayed projects in provinces pending for clarity of government projects. Residential demand expanded more slowly than expected as most buyers awaited clarity in economic recovery in 2015. Financial institutions maintained the strict lending policy, leading to an increase in the rejection rate from 15-20% to 30-40%. In the year, the Company’s total sales rose 13% to Bt11,982 million. Sales of single houses and townhouses contributed 57%, while that of condominium 43%. Sale revenue from single houses, townhouses and condominium expanded 12% on year to Bt10,011 million. The growth rate of the condominium segment alone was 40%, thanks to the realization of revenue from 9 projects against 5 projects in the 2013. The Company also earned Bt1,629 million from land sale and Bt845 million from the hotel business. This pushed total revenue to Bt12,416 million, or an increase of 27% from 2013. The sale of the Company’s stake in Krungthep Land Public Company Limited worth Bt720 million generated a gain of Bt77 million. As profitability rose on an increase in revenue, the net profit margin rose to 3.2% from 0.4% in 2013

and tended to rise further. The Board of Directors’ policy was to further strengthen the Company in terms of revenue and financial strengths. The debt to equity ratio was lowered to cut interest expenses. The land bank was turned into revenue more quickly, as some land plots were developed and others not included in the development plan were sold. The ISO 9001 standards were adopted to improve product quality, with the focus on design and construction management, to satisfy customers’ demand. A major milestone was when shareholders at the 2013 annual meeting approved the acquisition of Thai Property Public Company Limited (TPROP) and Grand Asset Public Company Limited (GRAND). Once the acquisition is complete, the Company’s financial condition would be strengthened. It is estimated that the Company’s assets and shareholders’ equity would rise to Bt43,400 million and Bt16,400 million, respectively. The Company would also earn more revenue from office for rent and hotel business and enjoy lower dependence on a particular business. The assets and revenue structure would be more diversified – to cover low-rise development, condominium projects, city condominiums, office for rents and hotel business. In 2015, the Board of Directors maintains the policy to further grow revenue and profitability and strengthen the Company’s business base. The project launch will be quickened to extend the revenue realization period and selling period. The focus is placed on high-end products under “Perfect Masterpiece” brand, to limit negative impacts from

MR.CHAINID ADHYANASAKUL CHIEF EXECUTIVE OFFICER

low purchasing power amid high household debt. Six projects are planned with combined value of Bt9,000 million. The construction cost will be lowered through the central procurement unit, to increase the bargaining power. The corporate image will be refreshed to mark the 30th anniversary, under the “New Era of Happy Living” concept. The “Eco Cool” housing concept, a modern, comfortable, energy-saving and environmental-friendly innovation, will be launched. This will be achieved through solar-powered cooling and heat-releasing technology and energy-saving and green materials. Vertical trees and lath will be used to shield the houses from heat. The houses will be equipped with the home monitoring system, with high-speed-internet-controlled CCTV for greater protection. The “Green@Heart” concept will highlight the Company’s long-standing focus, to extend green areas. New functions will be added in clubs, like a sky pool, green bike lane, solar-powered park and free Wi-Fi service. In 2015, the Company targets to achieve sale revenue of Bt17,600 million: Bt10,000 from low-rise projects and Bt5,500 million from condominium projects. A total of 24 projects will be launched with combined value of Bt29,500 million: consisting of 20 single house and townhouse projects worth Bt25,000 million, 3 condominium projects worth Bt3,000 million, and a project in Khao Yai worth Bt1,500 million.

Once the acquisition of TPROP is complete potentially in June 2015 with the success of buying at least 75% of the company’s outstanding shares, the Board of Directors and the management are set to further enhance business potential. In the next two years, the Company plans to develop and sell TPROP and GRAND’s current projects and use the proceeds to develop new projects. A real estate investment trust will be established for Metro West Town and Metro East Town, the two shopping malls which are valued at Bt1,800 million. A fund will also be established for the hotel business, to include Kiroro Resort in Japan, Sheraton Hua Hin Resort and Spa, and Sheraton Hua Hin Pranburi worth Bt3,700 million. The Board of Directors wishes to thank shareholders, valued customers, investors, business partners, alliances and financial institutions for their long-standing supports to the Company., as well as the management and all employees for their patient and dedicated performance in the past year.

Dr.Tawatchai Nakhata

CHAIRMAN

Mr.Chainid Adhyanasakul

CHIEF EXECUTIVE OFFICER

ANNUAL REPORT 2014

FINANCIAL INFORMATION Property Perfect Public company Limited. (Unit : Million Baht) Financial Position Total Assets Project Development Cost and Land for Development Inventories Total Liabilities Shareholdersâ&#x20AC;&#x2122; Equity Operation Results Sales Total Revenue Gross Margin Net Income Financial Ratio Net Profit (%) Return on Equity (%) Return on Total Asset (%) (%) Debt to Equity Ratio Current Ratio Per Share Data Net Income per Share Dividend Book value Note: The company split par from Bt6 to Bt1 on 6 May 2011.

2012

2013

2014

26,176 13,353 32 17,545 8,631

30,668 16,927 34 22,022 8,646

31,305 17,525 35 22,295 9,010

9,094 9,270 3,273 203

11,011 11,229 3,646 41

12,416 12,785 4,301 402

2.19 2.48 0.85 2.03 1.99

0.37 0.48 0.15 2.55 2.11

3.15 4.56 1.30 2.47 1.55

0.06 0.03 1.53

(0.02) 1.50

0.06 0.044 1.55

COMPANY AND SUBSIDIARIES INFORMATION

Company Information

Name Type of Business Head Office Business Registration Number Home Page Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital

: Property Perfect Public Company Limited

: : : : : : : : :

Real Estate Development 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0107536001231 www.pf.co.th 0-2245-6640-8, 0-2247-7500-4 0-2247-3328 5,782,930,655 Shares (31 December 2014) Baht 1 Baht 5,782,951,655

ANNUAL REPORT 2014

Legal Entity, The company hold 10% up The Company and Subsidiaries , Directly Owned Name : Estate Perfect Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : :

Name

: Bright Development Bangkok Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Name

: Residence Number Nine Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Real Estate Development 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 120,000,000 Shares Baht 10 Baht 1,200,000,000 : 100 % Real Estate Development 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 10,000,000 Shares Baht 100 Baht 1,000,000,000 100 % Real Estate Development 7th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 10,000,000 Shares Baht 100 Baht 1,000,000,000 100 %

Name

Chiangmai Development Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Real Estate Development 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 2,000,000 Shares Baht 100 Baht 200,000,000 100 %

Name

: We Retail Public Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Name

: Property Perfect International Pte. Ltd.

Type of Business Address No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : :

Name

: Perfect Sport Club Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Real Estate Development â&#x20AC;&#x201C; Shopping Center and Commercial Area 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2645-0024 1,267,535,714 Shares Baht 1.05 Baht 1,330,912,499.70 93.31 % Investment and Oversea Real Estate Development 1 Raffles Place, #28-02 One Raffles Place, Singapore 048616 1 Share 1 SGD$ 1 SGD$ 100 % Clubhouse Management 19th Flr., Vongvanich B Bldg.,100/52 Rama IX Road, Huaykwang, Bangkok 10310. 0-2645-1406-8 0-2645-1409 250,000 Shares Baht 100 Baht 25,000,000 100 %

ANNUAL REPORT 2014

Name

: U & I Construction Bangkok Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Name

: Uniloft Service (Thailand) Co., Ltd.

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Name

: Perfect Prefab Company Limited

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Name

: Ramintra Mall Company Limited (Formerly Known as Marirya Stuff Company Limited )

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Construction 27th Flr., Vongvanich B Bldg., 100/89 Rama IX Road, Huaykwang, Bangkok 10310. 0-2246-2093-6 0-2246-2020 1,000,000 Shares Baht 100 Baht 100,000,000 100 % Service Apartment 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 13,250 Shares Baht 100 Baht 1,325,000 (1,000 shares or Bt 100 par value and 49,000 shares or Bt 25 par value) 100 % Manufacturer and Install Prefab Structures 10th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 250,000 Shares Baht 10 Baht 2,500,000 51% (49% held by Center of Standard Precast Company Limited) Real Estate Development â&#x20AC;&#x201C; Shopping Center and Commercial Area 17th Flr., Vorasombat Bldg., 100/1 Rama IX Road, Huaykwang, Bangkok 10310. 0-2245-6640-8, 0-2247-7500-4 0-2246-0733 3,500,000 Shares Baht 100 Baht 350,000,000 100 %

Subsidiaries, Indirectly Owned Name : Centrepoint Shopping Mall Co., Ltd.* (Subsidiary of We Retail Plc.)

Type of Business Address Telephone Number Fax No. of Paid-up Share Par Value Paid-up Capital Percentage of Investment

: : : : : : : :

Name

: Kiroro Resort Holdings Co., Ltd (Formerly Known as Share Group Co.,Ltd.) (Subsidiary of Property Perfect International Pte.Ltd.)

Type of Business Address No. of Paid-up Share Paid-up Capital Percentage of Investment

: : : : :

Name

: Kabushiki Kaisha Kiroro Associates Co.,Ltd. (Subsidiary of Share Group Co.,Ltd.)

Type of Business Address No. of Paid-up Share Paid-up Capital Percentage of Investment

: : : : :

Real Estate Development and Hotel Business in Japan 30-3, Sarugaku-cho, Shibuya-ku, Tokyo, Japan 116,520 Shares JPY 752,173,640 95.61% Hotel Management 128-1 Tokiwa, Akaigawa-mura, Yoichigun,Hokkaido, Japan 610 Shares JPY 60,000,000 95.61%

ANNUAL REPORT 2014

Reference

Auditors

Financial Institute

Share Registrar

Property Valuation

Mr.Supachai Phanyawattano) EY Office Limited (Formerly known as Ernst & Young Office Limited) 33rdFloor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road, Bangkok 10110 Tel. 0-2264-0777, 0-2661-6190 Fax. 0-2264-0790, 0-2661-9192 Krung Thai Bank Public Company Limited 35 Sukhumvit Road, Klong Toey Nua, Wattana,Bangkok 10110 Bank of Ayudhya Public Company limited 1222 Rama III Road, Bangphongphang, Yan Nawa, Bangkok 10120 CIMB Thai Public Bank Company limited 44 North Sathorn Road, Lumpini, Prathumwan , Bangkok 10330 Thanachart Bank Company limited 1101 New Phetchaburi Rd. Makkasan, Rajthewi, Bangkok 10400 Thailand Securities Depository Co., Ltd. 4th , 6th -7th Flr. ,The Stock Exchange of Thailand Bldg., 62 Ratchadaphisek Road, Klongtoey ,Bangkok 10110 Tel. 0-2359-1200 -1 Fax. 0-2359-1259 Agency for real estate affairs Co., Ltd . 10 Nonsi Rd., Nonsi, Yannawa, Bangkok 10120 Tel.0-2295-3905 Fax. 0-2295-1154 Brooke Real Estate Limited 20th Floor., Unit 2005-6, The Millennia Tower, 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel. 0-2652-6300 Fax.0-2652-639 Thai Property Appraisal Lynn Phillips Co., Ltd. 11th Floor, RS Tower Building, 121/47-48 Rachadaphisek Rd., Dindaeng, Bangkok 10320 Tel : 0-2641-2128-32 Fax : 0-2641-2134 S.L. Standard Appraisal Co.,Ltd 114 Rattana Uthit Road, Soi 19,Tambon Hadyai, Amphoe Hadyai, Songkhla 90110 Tel: 0-7435-9130 Fax: 0-7435-9130 Wealth Appraisal Co., Ltd. 11/277 Thanthawat Village 5 Soi Watcharapol 1/9, Tha Raeng ,Bang Khen , Bangkok 10220 Tel : 0-2948-0928-9, 0-2948-2258 Fax : 0-2948-2259 Knight Frank Charter (Thailand) Co., ltd. 65/192 23rd Floor Chamnan Phenjati Business Center Rama 9 Road Huaykwang District, Bangkok 10320 Tel : 0-2643-8223 Fax : 0-2643-8224

NATURE OF BUSINESS

Background and Major Milestones Property Perfect Public Company Limited was established on 14 August 1985 by the group of Maneeya Estate’’s operators, with initial registered capital of Bt300,000. On 19 October 1993, the company was registered as a public company and on 1 June in the same year, it was listed on the Stock Exchange of Thailand in the Property Sector. The Company witnessed severe impacts from the financial crisis and baht devaluation in 1997. Due to liquidity problem, the Company’s share trading was moved to REHABCO Sector. On 22 January 2001, 3 creditors filed the rehabilitation petition to the Central Bankruptcy Court. The Court approved the petition on 19 February 2001 and appointed Asian International Planners Co Ltd as the rehabilitation planner. The Court approved the rehabilitation plan on 2 October 2001, allowing the Company to move its share trading to REHAB Sector on 22 November 2001 and returned to PROPERTY Sector on 19 June 2002. Successfully completing conditions specified in the rehabilitation plan and debt restructuring, the Company filed a petition to exit the rehabilitation process. The Court approved the exit on 12 April 2004, returning the administrative power to original executives. Loans were gradually repaid to creditors in the rehabilitation plan, until they were fully repaid in 2011. The Company has continually expanded business, going through several capital increases and reduction. The registered capital now stands at Bt10,737,610,610, consisting of 10,737,610,610 common shares at Bt1 par value. The paid-up capital is Bt15,782,951,655, consisting of 5,782,951,655 common shares at Bt1 par value.

ANNUAL REPORT 2014

Major events in the past 3 years 2011 : w Invest Bt500 million in new shares of Bright Development Bangkok Company Limited (100%-owned subsidiary), which increased capital to Bt1,000 million. w (VWDEOLVK 8 , &RQVWUXFWLRQ %DQJNRN &RPSDQ\ /LPLWHG WR SURYLGH FRQVWUXFWLRQ VHUYLFHV ZLWK UHJLVWHUHG FDSLWDO RI Bt100 million , Bt50 million paid-up (100%-owned subsidiary). w 6SOLW SDU IURP %W WR %W w 3HUIHFW 3UHIDE &R /WG ZDV HVWDEOLVKHG DV D MRLQW YHQWXUH ZLWK &HQWHU RI 6WDQGDUG 3UHFDVW &R /WG ZLWK UHJLVWHUHG capital of Bt10 million. The capital worth Bt2.5 million is paid-up. w (VWDEOLVK 8QLORIW 6HUYLFH 7KDLODQG &RPSDQ\ /LPLWHG DV D VXEVLGLDU\ ZLWK UHJLVWHUHG FDSLWDO RI %W RZQHG subsidiary.). w ,QFUHDVH 3HUIHFW 6SRUW &OXE &RPSDQ\ /LPLWHGtV UHJLVWHUHG FDSLWDO E\ %W PLOOLRQ WR %W PLOOLRQ WR ILQDQFH WKH LQYHVWPHQW in True Coffee shops inside the projectsâ&#x20AC;&#x2122; clubs. w $FTXLUH FDSLWDO LQFUHDVH VKDUHV RI 'DLGRPRQ *URXS 3XEOLF &RPSDQ\ /LPLWHG RIIHUHG WKURXJK D SULYDWH SODFHPHQW DQG tender for the remaining shares through a mandatory tender offer. w 'LVSRVH DOO VKDUHV KHOG LQ &HQWUHSRLQW 6KRSSLQJ 0DOO &RPSDQ\ /LPLWHG WR 'DLGRPRQ *URXS 3XEOLF &RPSDQ\ /LPLWHG DW WKH price of Bt400.2 million. We Retail paid for the shares through its capital-increase shares.(Renamed to We Retail Plc.) 2012 : w Invest in Japan through subsidiary Property Perfect International Pte Ltd (PPI), which bought 69.01% shares in Share Group Co.,Ltd. (SG) (Renamed to Kiroro Resort Holdings.) and its assets, Kiroro Resort on Hokkaido Island. The assets cover a 292-rai land plot, 2 hotel buildings with 422 rooms, hotel fixtures, and ski equipment. w 3D\ DQ DGGLWLRQDO VXP IRU 8 , &RQVWUXFWLRQ %DQJNRN &R /WG ZRUWK %W D VKDUH IRU QHZ VKDUHV ZKLFK UDLVHG WKH ZKROO\ owned subsidiaryâ&#x20AC;&#x2122;s capital to Bt100 million. w $SSURYH WKH SXUFKDVH VKDUHV RI :H 5HWDLO 3XEOLF &RPSDQ\ /LPLWHG D VXEVLGLDU\ RIIHUHG DW %W DSLHFH RU a total of Bt400,303,226.40. The new shares boosted the Companyâ&#x20AC;&#x2122;s stake in We Retail to 727,824,048 shares or 91.05%.

2013 : w 7KH %RDUG RI 'LUHFWRUV UHVROYHG WR UHSXUFKDVH DOO KRXVHV VROG WR 3URSHUW\ 3HUIHFW )XQG DW WKH SULFH RI %W PLOOLRQ 3URSHUW\ Perfect Fund was dissolved in March. w (VWDEOLVK D ZKROO\ RZQHG VXEVLGLDU\ &KLDQJPDL 'HYHORSPHQW &RPSDQ\ /LPLWHG ZLWK WKH UHJLVWHUHG DQG SDLG FDSLWDO RI %W million, consisting of 2 million shares at Bt100 par value.,the company holds 100%. w 6XEVFULEH WR :H 5HWDLO 3XEOLF &RPSDQ\ /LPLWHGtV FDSLWDO LQFUHDVH VKDUHV WR PDLQWDLQ WKH VKDUHKROGLQJ UDWLR ([LVWLQJ VKDUHKROGHUV were offered 5 new shares for every 8 existing shares, at Bt1.10 apiece, or a total of Bt500.4 million. The companyâ&#x20AC;&#x2122;s shareholding ratio is 93.31% w ,QFUHDVH WKH UHJLVWHUHG FDSLWDO RI 8QLORIW 6HUYLFH &R /WG D VXEVLGLDU\ E\ %W PLOOLRQ IURP %W SDLG XS 7ZHQW\ five per cent of new capital is paid up, or Bt1.225 million. The current paid-up capital is Bt1.325 million. w %X\ DOO VKDUHV RI 0DUL\D 6WXII &RPSDQ\ /LPLWHG ZKLFK RZQV WKH OHDVLQJ ULJKW RQ D ODQG LQ %DQJ .DSL DW %W PLOOLRQ This turns Mariya which was later renamed to Ramintra Mall Co.,Ltd. into a subsidiary. w (VWDEOLVK DQG FR LQYHVW LQ 8QLORIW 3URSHUW\ )XQG ZKLFK ZDV WUDQVIHUUHG D GRUPLWRU\ EXLOGLQJ QHDU 0DKLGRO 8QLYHUVLW\ Salaya Campus. The fund was registered with Bt515 million in capital, consisting 51.5 million shares at Bt10 par value. 2014 : w :H 5HWDLO &R /WG UHGXFHG WKH FDSLWDO IURP %W FRPPRQ VKDUHV DW %W SDU YDOXH WR Bt1,330,912,499.70, by lowering the par value from Bt5 to Bt1.05. Through the reduced capital worth Bt5,006,766,070.30, We Retailâ&#x20AC;&#x2122;s share loss and accumulated losses were cleared. Then, the capital was raised from Bt1,330,912,499.70 to Bt4,761,824,999.40 (4,535,071,428 shares at Bt1.05 par value). w 3URSHUW\ 3HUIHFW ,QWHUQDWLRQDO FRQYHUWHG ORDQ WR 6KDUH *URXS WR HTXLW\ E\ VXEVFULELQJ WR QHZ VKDUHV DW 5,000,000 1py a share or a total of 500 million yen. Share Group then used the proceeds to repay a loan to Property Perfect International. Property Perfect International now owns 95.61% in Share Group, which was renamed to Kiroro Resort Holdings in November 2014. w 6KDUHKROGHUV DW WKH H[WUDRUGLQDU\ PHHWLQJ RQ -XO\ DSSURYHG WKH WKH SODQ WR WDNH RYHU 7KDL 3URSHUW\ and Grand Asset. The shareholders also approved related activities like the issuance and allocation of new shares to Thai Property and Grand Assetâ&#x20AC;&#x2122;s shareholders who agree to the acquisition plan. w 5DLVH WKH UHJLVWHUHG FDSLWDO LQ 3HUIHFW 6SRUW &OXE &R /WG E\ %W PLOOLRQ WR %W PLOOLRQ +DOI RI LW LV SDLG XS w 2Q 1RYHPEHU WKH %RDUG RI 'LUHFWRUV DSSURYHG WKH GLYHVWPHQW RI DOO VKDUHV LQ .UXQJWKHS /DQG WR *ROGHQ /DQG Property Development Public Company Limited. The decision is pending for the approval of Golden Landâ&#x20AC;&#x2122;s shareholders who convened on 9 December 2014.

ANNUAL REPORT 2014

Shareholding structure

The Company and subsidiaries operate property development business, with a focus on housing estates and condominium development primarily in Bangkok and peripheral provinces. The subsidiaries and associated companies operate in four businesses: property development, construction, retail and services. The structure as of 31 December 2014 is as follows:

Real Estate Development Units

Construction Business Units

Retail Business Unit

Services-Oriented units

Property Perfect Public Company Limited

100.00% U&I Construction Bangkok Co., Ltd.

93.31% We Retail Plc.

100.00% Perfect Sport Club Co., Ltd.*

100.00% Estate Perfect Co., Ltd.

51.00% Perfect Prefab Co., Ltd.

100.00% Centrepoint Shopping Mall Co., Ltd.

100.00% Uniloft Service (Thailand) Co., Ltd.

100.00%

100.00% Bright Development Co., Ltd.

Ramintral Mall Co., Ltd. Formaly Named Mariya Stuff

100.00% Residence Number Nine Co., Ltd. 100.00% Chiang Mai Development Co., Ltd. 100.00% Property Perfect International

95.60% Kiroro Resort Holding

(Formerly known as Share Group)

100.00% Kabushiki Kaisha Kiroro Associates Co., Ltd.

19.52% Uniloft Property Fund **

Note: * Previously called Perfect Satellite Services ** Shareholding ratio as of 4 November 2014

The companyâ&#x20AC;&#x2122;s investment in subsidiaries and affiliates can be put into 4 main categories as Real Estate Development , Construction Business Units and Services ,Retail Business Unit and Service-Oriented Units.

Property Development Units

The company and subsidiaries are mainly involved with the property development for sale. The projects involve the development of single detached houses, townhouses, and condominiums. Details are as follows; Property Perfect Public Company Limited (“The Company”) Developing housing estates, town house and condominiums. As of 31 December 2014, a total of 48 projects are under development with outstanding value of Bt32,091 million. (Additional information on the projects of the Company and subsidiaries are in Graphic: Projects by Type) Estate Perfect Co., Ltd. (Subsidiary) Estate Perfect Company Limited, (“Estate”) is located at 100/1 Varasombat Bldg., Floor 17th, Rama IX Road, Huay Khwang, Bangkok. It was established in 1994, to develop single houses,duplex house and townhouses, with focus on potential locations. Estate is now capitalized at Bt1,200 million, following the Board of Directors’ resolution in January 2010 to raise the capital from Bt1,000 million to Bt1,200 million, the company then issued 20,000,000 new shares at Bt10 par while the paid-up capital totaled Bt1,200 million. The company now owns 100% of Estate. As of 31 December 2014, Sale of Estate’s 7 projects is underway, and the remaining value of the unsold units is Bt5,257 million. ((Additional information on the projects of the Company and subsidiaries are in Graphic: Projects by Type) As of 31 January 2015 Estate’s 4 directors are: Name 1.Mr.Wicharn Siriwetwarawut 2.Miss Sirirat Wongwattana 3.Mr.Wason Srirattanapong 4. Mr.Krittapas Pongpakawat

Position Director Director Director Director

Bright Development Bangkok Co., Ltd. (Subsidiary) Bright Development Bangkok Co.,Ltd. (“Bright”) is Located at 100/1 Vorasombat Building (17th flr), Rama IX Road, Huay Kwang, Bangkok, Bright Development was established on 2007 for condominium development. Bright Development is capitalized at Bt1 million . In December 2009, Bright raised the registered capital to Bt500 million. The Company subscribed to all new shares to maintain the 100% ownership. In February 2011, Bright resolved to raise the capital from Bt500 million to Bt1,000 million, all paid up. The company holds 100% in Bright.

ANNUAL REPORT 2014

Aside from its focus to develop condominiums under “iCONDO” brand, Bright embarked on the project to develop premium dormitories, specifically for students, under “Uniloft” brand. The project to create “extraordinary campus living” experience focuses on famous universities. At present, it is developing two Uniloft projects which are valued at Bt1,000 million – Uniloft near Chiangmai University in Chiang Mai and Uniloft near Mahidol University in Salaya, Nakhon Pathom. In 2013, the company sold the Uniloft Salaya project to a property fund and plans to sell the Uniloft Chiang Mai project to a property fund in the future. On 31 December 2014, Bright planned 10 condominium projects and,the remaining value of unsold units is Bt4,884million. (Additional information on the projects of the Company and subsidiaries are in Graphic: Projects by Type) Researches showed a significant growth in residential demand near educational campuses. Bright plans to launch 2 condominium projects, iCondo Bangna and iCondo Salaya, with combined value of Bt2,310 million. As of 31 January 2015,Bright’s 4 directors are; Name 1.Mr.Pornswat 2.Miss Sirirat 3.Mr.Sumeth 4.Mr.Nantachart

Katechulasriroj Wongwattana Suwajanakorn Kliebphipat

Position Director Director Director Director

Residence Number Nine Company Limited (Subsidiary) Residence Number Nine Company Limited (“Residence”) is located at 100/1 Vorasombat Building (17th flr), Rama IX Road, Huay Kwang, Bangkok, is capitalized at Bt1,000 million with 10 million shares at Bt100 par value. Owned 100% by the company, The subsidiary is tasked to develop low-rise small-scale housing projects in potential locations. Its target groups are new families, looking for single houses and townhouses valued between Bt1.7-Bt3 million. Established in 2008 and In January 2010, Residence becomes a subsidiary as the company. It is capitalized at Bt1,000 million or 100% from old shareholders at Bt507 million. Residence’s original shareholders had no connection with the company or the transaction. Residence was taken over as the company planned to develop single houses and townhouses on a 170-rai plot in Bang Buathong, Nonthaburi, which is the only piece of asset of Residence. As of 31 December 2014, Residence’s 4 projects are now marketed, The remaining value of unsold units is Bt2,727 million. (Additional information on the projects of the Company and subsidiaries are in Graphic: Projects by Type) In 2014, Residence expands its business to Chiang Mai province, lured by its potential and increasing residential demand. The project, under the “Perfect Place” brand, is valued at Bt950 million. As of 31 January 2015, Residence’s 4 directors are: Name 1.Mr.Wicharn 2.Miss Sirirat 3.Mr.Sanpetch 4.Mr.Pornchai

Siriwetwarawut Wongwattana Sukkasem Ketlek

Position Director Director Director Director

Chiangmai Development Company Limited (Subsidiary) Chiangmai Development Company Limited (“Chiangmai”) is located at 100/1 Vorasombat Building (17th fl.), Rama IX Road, Huay Kwang, Bangkok. It is registered with Bt200 million ,capital 2 million shares at Bt100 par value. The company holds 100% in the subsidiary. Established on 21 February 2013 with fully paid-up capital of Bt200 million, the subsidiary is tasked to expand the company’s residential development business. Its focus is on low-rise development in Chiang Mai province. The subsidiary has not yet launched any project. As of 31 January 2015, Chiangmai’s 3 directors are: Name 1.Mr.Wongsakorn Prasitvipat 2.Miss Sirirat Wongwattana 3.Mr.Wasan Srirattanapong

Position Director Director Director

Property Perfect International Pte.Ltd. (Subsidiary) Property Perfect International Pte.Ltd. (PPI), located at 1 Raffles Place, #28-02 One Raffles Place, Singapore 048616, established on 12 July 2012, has paid-up capital of 1 Singapore dollar. Owned 100% by the Company, PPI will invest in overseas property development business. At the 4/2012 meeting on 27 August 2012, the Board of Directors approved PPI’s investment in Kiroro Resort Holdings‘s common shares. Established in Japan, Kiroro Resort Holdings operates a property development and hotel businesses in Japan. The 8,200 capital-increase shares were bought at 9,033 yen apiece or a total of 74.1 million yen , approximately Bt30 million (at the exchange rate of 100 yen for Bt40.50). PPI also bought 3,200 shares from Kiroro Resort Holdings‘s existing shareholders at the same price for a total of 28.9 million yen, approximately Bt11.7 million. The 11,400 shares cost totally Bt41.7 million. In March 2014, Kiroro Resort Holdings raised capital by another 500 million yen. The 100,000 new shares at par value of 5,000 yen apiece were offered to PPI. PPT’s total shareholding Kiroro Resort Holdings has risen to 95.61%. PPI’s 4 directors are: Name 1.Mr.Bhichai 2.Dr.Tawatchai 3. Mr.Chainid 4.Miss. Chong

Rattakul Nakata Adhyanasakul Weiyi

Position Chairman Director Director Director

ANNUAL REPORT 2014

Kiroro Resort Holdings Company Limited (Renamed from Share Group Company Limited) is a subsidiary of Property Perfect International Pte. Ltd.) Kiroro Resort Holdings (Renamed from Share Group Since November 2014), located at 30-3, Sarugaku-cho, Shibuya-ku, Tokyo, Japan, is incorporated under the Japanese law for the investment in property development and hotel business. At the 4/2012 meeting on 27 August 2012, the Board of Directors approved Kiroro Resort Holdings ‘s investment in all shares of and loan claims against Kabushiki Kaisha Kiroro Associates Company Limited, from Mitsui Fudosan Resort Company Limited. The 100% shares were bought at the cost of 1 yen, or approximately Bt0.4050 (at the exchange rate of 100 yen for Bt40.50) . Kiroro Resort Holdings will also take over the claim on a loan to Kabushiki Kaisha Kiroro Associates from Mitsui Fudosan Company Limited. The loan is valued at 1300.6 million yen: it is worth Bt526.7 million yen. The claim is valued at 160,000,000 yen or Bt64.8million,The Board also approved Kiroro Resort Holdings’ purchase of Kiroro Resort from Mitsui Fudosan Resort for about 1,039.99 million yen or Bt425.2 million,tolal Bt1,200 million or 4 Bt 490 million. Kiroro Resort is a ski resort on Hokkaido, Japan, owning a 292-rai land plot, 2 hotels- 422-room (with average 60% occupancy rate), and ski equipment. Plus transfer taxes of about 700 million yen or Bt280 million, the purchase cost a total of approximately 1,900 million yen or Bt770 million. In March 2014, the Board of Directors acknowledged Kiroro Resort Holdings’ capital increase by 500 million yen (100,000 shares at 5,000 yen apiece). The new shares were offered to Property Perfect International to settle a loan from Property Perfect International. Property Perfect International’s shareholding Kiroro Resort Holdings thus increased to 95.61%. Kiroro Resort Holdings’ paid-up capital stands at 752,173,640 yen, consisting of 116,520 common shares.

Kiroro Resort Holdingsâ&#x20AC;&#x2122; 8 directors are: Name 1.Mr.Bhichai 2. Dr.Tawatchai 3. Mr.Chainid 4.Mr.Jesd 5.Mr.Hajime 6.Mr.Seiichi 7.Mr.Yochiro 8.Mr. Aso

Rattakul Nakata Adhyanasakul Jesdpiyawong Mori Mizuno Itto Morito

Position Chairman Director Director Director Director Director Director Director

Kabushiki Kaisha Kiroro Associates Company Limited (KA), subsidiary of Kiroro Resort Holdings Kabushiki Kaisha Kiroro Associates Company Limited (KA) is located at 128-1, Tokiwa, Akaigawa-mura, Yoichigun, Hokkaido, Japan, is incorporated under the Japanese law for the investment in hotel management. Its registered capital is 60 million yen or 610 common shares. After reorganized investment by Share Group Company Limited (SG) (Detail of Share Group as above), its ownership rises to . 100%. Kabushiki Kaisha Kiroro Associatesâ&#x20AC;&#x2122; 4 directors are: Name 1.Mr.Chainid 2. Dr.Tawatchai 3.Mr. Hajime 4.Mr.Methee

Adhyanasakul Nakata Mori Tanmanatrakul

Position Director Director Director Director

Uniloft Property Fund In October 2013, Bright Development Bangkok Company Limited, a wholly-owned subsidiary of the Company, sold Uniloft Salaya, located in Tambon Salaya, Buddhamondhol district, Nakhon Pathom, to Uniloft Proprty Fund for Bt514 million. The property fund was managed by One Asset Management Company Limited. Detail of the sold asset is as follows: (1) Title deed No. 15781 (2) Uniloft Salaya building (3) Infrastructure, engineering system, furniture, and relevant materials necessary for the project Uniloft Property Fund is an non-redeemable, open-ended fund. Registered with Bt515 million in capital, with 51,500,000 shares at Bt10 apiece, the fund was listed on the Stock Exchange of Thailand on 14 November 2013. The Company invested in 10,051,200 units of the fund at Bt10 par value for the total value of Bt100,512,000 or 19.52% of all shares. (Data as of 4 November 2014)

ANNUAL REPORT 2014

Construction Business Unit U & I Construction Bangkok Company Limited U & I Construction Bangkok Company Limited (“U & I”), is located at 100/89 Vongvanich Building Floor 27th , Rama IX Road, Huay Kwang, Bankgok. Established in April 2011, it has Bt100 million in registered capital, consisting 1 million shares or Bt100 par value. Owning 100%, the Company initially paid 50% of the capital and paid the remaining half in November 2012. Paid-up capital is now Bt100 million. U & I’s main objective is to offer services to construct single houses, duplex houses, townhouses and condominiums for the company and subsidiaries. As it will be securing direct contracts from the group, this will promise construction flexibility for the group and allow the company a better management on supply chain. The company also selected subcontractors to control the construction cost and construction period, as well as ensure effective control on the construction volume and quality. As of 31 December 2014, WU & I’s 3 directors are; Name 1. Mr. Manit 2. Mr. Sombat 3. Mr. Krittapas

Yukkasemwong Bovornsombat Pongpakawat

Position Director Director Director

Perfect Prefab Company Limited Perfect Prefab Company Limited (“Perfect Prefab”) is located at 100/1 Vorasombat Building Floor 10th, Rama IX Road, Huay Kwang, Bangkok. Established in June 2011, it has Bt10 million in registered capital, with Bt2.5 million paid-up. The company owns 51% in Perfect Prefab, and the rest is held by Center of Standard Precast Company Limited – which has experience in this business and has supplied prefab materials to the group for over 5 years owns 49% in the company. The partner has no connection whatsoever with the company. The company established to manufacturer and install prefab structures, which are parts of single houses, townhouses and project fences, as well as condominiums. The automated production system is to ensure no effect from labor shortage. The company expects to benefit from the joint venture’s prefab technology. It now manufactures prefab materials for the Company’s projects, with the capacity to supply materials for the construction of 500 housing units per year. As of 31 January 2015, Perfect Prefab’s 5 directors are; Name 1.Mr.Wicharn 2.Dr. Vorasak 3.Mr. Vichaya 4.Mr. Phuwit 5.Mr. Kongsak

Position Siriwetwarawut Director Chakrapiyanant Director Watananukit Director Phaengsuk Director Kaewsuriyathamrong Director

As of 11 March 2015, the company add 2 new directors ,Mr. Prakit krissadapong and Mr.rungroj Singhthabadkij,director are; Name 1.Mr.Wicharn Siriwetwarawut 2.Dr. Vorasak Chakrapiyanant

Position Director Director

3.Mr.Prakit 4. Mr.Rungroj 5.Mr. Vichaya 6.Mr. Phuwit 7.Mr. Kongsak

Krissadapong Singhthabadkij Watananukit Phaengsuk Kaewsuriyathamrong

Director Director Director Director Director

Retail Business unit We Retail Public Company Limited (Subsidiary) We Retail Public Company Limited (“We Retail”) is located at 100/1 Vorasombat Building Floor 17th , Rama IX Road, Huay Kwang, Bangkok. Formerly named Daidomon Group Public Company Limited (“Daidomon “) , It was incorporated accordingly to the Civil and Commercial Code on 9 October 1990 and was registered as a public company on 27 April 2001. On 18 October 2011, shareholders at the 1/2011 extraordinary meeting approved the liquidation of the restaurant business, the primary business, and the “Daidomon” trademark to Hot Pot Public Company Limited. On 15 December 2011, the subsidiary completed the liquidation. On 16 December 2011, We Retail acquired the 99.99% stake of Centrepoint Shopping Mall Company Limited (“Centrepoint”), which develops shopping malls, office buildings and commercial space, from the company. It was renamed to We Retail Public Company Limited on 29 November 2011 The company owns 93.31% of total issued shares. With registered capital of Bt4,761.8 million Baht with 1,330.9 million Baht paid up, consisting 1,267,535,714 shares or Bt 1.05 par value. We Retail is carrying out the development of two community malls in the West and East of Bangkok. The malls, namely Metro West Town and Metro East Town, are expected to commence operations late 2014 and early 2015, respectively. We Retail’s 7 directors are; Name 1. Dr.Tawatchai 2.Mr.Chainid 3.Mr.Pramote 4 Mr.Kampol 5. Mr.Cherdsak 6.Mr.Chaiyakorn 7.Mr.Boonliam

Position Nakhata Chairman Adhyanasakul Director, Deputy Chairman and Act for Chief Execetive Offiec Rermyindee Director Tatiyakawee Director Kookiatnunt Independent Director, Chairman of Audit Committee Boonlop Independent Director, Audit Committee Luangnakthongdee Independent Director, Audit Committee

Centrepoint Shopping Mall Company Limited (Subsidiary of We Retail Plc.) Centrepoint Shopping Mall Co.,Ltd.is located at 100/1 Vorasombat Building 17th fl., Rama IX Road, Huay Kwang, Bangkok. Established in December 2007 . Centrepoint focuses on commercial development like shopping malls and rental office building. In September 2011, the Board approved the sell-out of all 5 million shares in Centrepoint Shopping Mall Co.,Ltd.to Daidomon Group Public Company Limited worth Bt400.20 million on 16 December 2011, turning Centrepoint Shopping Mall Co.,Ltd.into a subsidiary of Daidomon Group. In return, Daidomon Group issued shares accounting for 88.06% to the Company. (Centrepoint Shopping Mall Co.,Ltd. was renamed to We Retail Public Company Limited on 24 November 2011). Centrepoint Shopping

ANNUAL REPORT 2014

Mall Co.,Ltd. owns the leasing rights of a some of a land plot on the east side of Ratchadapisek Road, planned for the development of a closed shopping mall and an office building. In August 2012, it won the leasing right for an opposite land plot on the west side of Ratchadapisek Road, which is planned for the development of a closed shopping mall.Centrepoint Shopping Mall Co.,Ltd. is now developing “Bangkok Midtown” (Phase 1), a closed shopping mall Centrepoint Shopping Mall Co.,Ltd. is now developing “Bangkok Midtown” (Phase 1), a closed shopping mall on the west side of Ratchadapisek Road. The mall is built on a land plot sub-leased earlier. The closed 8-floor community mall has 150,000 sqm in space. The mall houses various fashion, cloth, and lifestyle products shops, restaurants, bank offices and etc. It is expected to open its doors within 2016. As of 31 December 2014,Centrepoint Shopping Mall Co.,Ltd.’s 5 directors are: Name Position 1. Mr.Chainid Adhyanasakul Director 2. Mr.Pramote Remyindee Director 3.Mr.Wongsakorn Prasitvipat Director 4. Mr.Pornswat Katechulasriroj Director 5. Ms.Wilawan Luangnakthongdee Director Note : Ms.Wilawan Luangnakthongdee replacing Ms.Supee Reodecha who resigned on 31 Jan 2015. Ram Intra Mall Company Limited (Formery Known as Mariya Stuff Company Limited )(Subsidiary) Ram Intra Mall was established in 2004 as Mariya Stuff. In August 2013, the Company bought all 100% shares of Mariya Stuff from its shareholders for Bt350 million. Mariya Stuff’s old shareholders had no connection with the Company. Through the purchase, the Company took control of the lease rights over a 34-rai land plot in Tambon Bueng Kum, Bang Kapi district, Bangkok. The 30-year lease period started from 9 April 2013 to 31 March 2043. The land is planned to house a shopping mall, which is being studied. In August 2014, Mariya Stuff extended the lease by another 3 years (1 April 2043 through 31 March 2046). It was renamed to Ram Intra Mall in September. Ram Intra Mall is located at 100/1 Vorasombat Building (17th fl.), Rama IX Road, Huay Kwang, Bangkok. It is registered with Bt350 million capital (3,500,000 shares at Bt100 par value). The company holds 100% in the subsidiary. Ram Intra Mall Co., Ltd.’s 2 directors are: Name 1. Mr.Chainid 2. Mr.Pramote

Adhyanasakul Remyindee

Position Director Director

Services-oriented units Perfect Sport Club Company Limited (subsidiary) Perfect Sport Club Company Limited (“Perfect sport Club”) is located at 100/52 Vongvanich B Building (19th fl.), Rama IX Road, Huay Kwang, Bangkok, was established in February 2003. it was capitalized at Bt1 million. In September 2011, The Company resolved to raise the registered capital by Bt4,000,000 to Bt5,000,000, through the issuance of 40,000 new shares at Bt100 par value. The capital is fully paid-up and 100% owned by the Company. It later raised capital by Bt45 million to Bt50 million, with Bt20 million paid-up. As of 15 September 2014, the paid-up capital is Bt25 million. The Company owns 100%. Formerly called Perfect Satellite Services Company Limited, Perfect Sport Club operates fitness clubs and sport clubs of the group. At present, 16 sport clubs exist. Perfect Sport Club ’s 5 directors are: Name 1.Mr. Phairat Senachak 2.Mr. Nantachart Kiebpipat 3.Mr. Krittapas Pongpakawat 4.Mr.Wasan Srirattanapong 5.Mr. Saranyu Adhyanasakul

Position Director Director Director Director Director

Uniloft Service (Thailand) Company Limited (Subsidiary) Uniloft Service (Thailand) Company Limited (“Uniloft Service”) is located at 100/1 Vorasombat Building Floor 17th , Rama IX Road, Huay Kwang, Bangkok. Established in July 2011, it has Bt100,000 in registered capital. It is 100% owned by the company. In August 2013, the registered capital was raised to Bt5,000,000 and 25% of the capital increase or Bt1,225,000, has paid-up capital of Bt.1,325,000 . Uniloft Service Co., Ltd. operates a serviced apartment and management services for the group’s real estate projects. Uniloft’s 5 Directors are: Name 1.Mr.Saranyu Adhyanasakul 2.Mr. Cherdsak Kukiatnunt 3.Mr.Prathompob Intr-Bumrong 4.Mr.Natthaphon Sueb-Am 5.Mr.James Stevenson Worboys

Position Director Director Director Director Director

ANNUAL REPORT 2014

Group structure after the acquisitions of Thai Property and Grand Asset On 29 July 2014, the Companyâ&#x20AC;&#x2122;s shareholders at the 1/2014 extraordinary meeting approved the tender offer for all shares in Thai Property and the tender offer for all shares in Grand Asset under the Chain Principle. The tender offer is conditional: when the tender period ends, shareholders of Thai Property must offer to sell at least 75% of outstanding shares. If the condition is met, the Company will pay for the shares with capital-increase shares at the ratio of 1 share of Thai Property for 0.5 share or with cash worth Bt0.57 per share. For the shares offered by Grand Asset shareholders, the Company will offer 1.149123 share for every share of Grand Asset or cash worth Bt1.31 per share. At the meeting, the shareholders approved the Companyâ&#x20AC;&#x2122;s plan to raise the registered capital from Bt5,960,980,722 (5,960,980,722 shares at Bt1 par value) to Bt10,737,610,610, by issuing 4,776,629,888 new shares at Bt1 par value. The new shares will be issued to complete the acquisitions.

Post-acquisition business structure Thai Property ’s Sharesholders

The company’s Shareholders

Grand Asset’s Shareholders

Company 75% Real Estate Development Units

Thai Property Plc. 99.99% Metro1/

99.99% PED2/

Retail Business Unit

ServicesOriented units

Construction Business Units

99.99% Scenery Peak3/

40.62%* 4%

Grand Asset Plc

Note : The Company will hold 40.62% in Grand Asset: 7.5% direct shareholding through Thai Property and 33.12%% indirectly through Metro.

1/ Metro Premier Holding Public Company Limited 2/ Pacific Asset Estate Development Company Limited 3/ Scenery Peak Company Limited

Post-acquisition operations After the acquisitions are complete, the Company plans to reorganize the group business structure. While the Company will be the core in the low-rise and high-rise property development business, We Retail will lead the retail and rental office development business. Grand Asset will lead in the hotel development and management business, to take care of existing projects and future projects. The clear business segmentation will streamline the operations of the group and build capacity of the management and staff through knowledge transfer. The business groups are the areas that the group has been proficient in. Under the new structure, all business units will be allowed to demonstrate their positive potential, to create maximum interests to the organization which is the main purpose of the acquisitions. the acquisitions.

ANNUAL REPORT 2014

MANAGEMENT STRUCTURE

The company’s management structure contains one board of directors and four subcommittees. They are directors, Audit Committee, Nomination Committee and Remuneration Committee, Risk Management Committee and Executive Board. Details are as follows:

1. The Board of Directors As of 31 December 2014, the board consists of 12 directors as follow:

No. Name

1 2 3 4 5 6 7

Dr.Tawatchai Nakhata Mr.Virayuk Puntupetch Mr.Chainid Adhyanasakul Mr.Phairat Senachack Mr.Vidhya Nativivat Ms.Sirirat Wongwattana Mr.Ooi Boon Aun

Title

Meeting Meeting allowances of of the the of the company’s company’s board board

Chairman Deputy Chairman and Independent Director Director and Chief Executive Officer Director Director Director Director Director / Independent Director and Audit 8 Dr.Somsak Toruksa Committee Director / Independent Director and Audit 9 Dr. Thamnoon Ananthothai Committee 10 Mrs.Nuanual Swasdikula-Na-Ayudhaya Director / Independent Director 11 Mr.Krish Follett Director / Independent Director and 12 Prof.Dr.Suchatvee Suwansawat Director / Independent Director With Mr. Pramote Rermyindee as secretary of the board

7 7 7 7 7 7 7

7 7 7 7 7 7 6

7 7 7 7 7

4 7 7 2 7

Note: * Prof.Dr. Mr.Suchatvee Suwansawat Appointed in accordance with a resolution of the company’s Board of Directors 4/2014 on 16 June 2014 replace Mr.Anuwat Maytheewibulwut who resigned as director and independent director on 15 February 2014, citing other binding duties that prohibited the service.

Authorised directors Authorized signatory directors are1) Dr.Tawatchai Nakhata and Mr. Chainid Adhyanasakul are duly authorized to sign documents and affix the company’s seal.2) Any one of the following directors - Dr.Tawatchai Nakhata or Mr. Chainid Adhyanasakul - is authorized to co-sign documents with one the these directors - Mr. Phairat Senachack or Miss Sirirat Wongwattana – and affix the company’s seal. 3) Dr. Tawatchai Nakhata or Mr. Chainid Adhyanasakul or Mr. Phairat Senachack or Ms. Sirirat Wongwattana can sign and affix the company’s seal on the matters involving; (1) (2) (3) (4) (5) (6) (7)

Commerce Ministry and related units Revenue Department and related units Lands Department and related units Department of Public Works and Town & Country Planning and related units Bangkok Metropolitan Administration, Pattaya City and related units Municipality, provincial administrative organizations and tambon administration organizations Government agencies, or state enterprises or private organizations involved in the provision of water,electricity, telephone, postal and internet services, which are to approve service transfers, down payments settlement, down payment return, and down payment transfers.

The shareholders meeting or the Board can identify the directors with the authority to sign and affix the company’s seal. Board of Directors’ authority and scope of responsibility The Board of Directors is authorized to make decisions and ensure that the company’s operations follow the objectives, regulations, shareholders’ resolutions and legal conditions. Its authority does not cover the decisions which must be approved by shareholders as prescribed by the Securities and Exchange Commission and the Stock Exchange of Thailand. Under the company’s regulations, the Board of Directors is authorized to appoint the executive board which will monitor the daily operations of the company under the guidelines and budget approved by the Board of Directors and handle other tasks bestowed by the Board of Directors. The executive board can approve the decisions within its power granted by the Board of Directors or have to propose the issues beyond its power for the Board of Directors’ consideration. The regulations also empower the Board of Directors to appoint other officers or other working committees to assist the executive board.

ANNUAL REPORT 2014

2. Audit Committee

As of 31 December 2014, the Audit Committee consists of 3 independent directors. No. Name

1 Mr.Krish 2 Dr.Somsak 3 Dr.Thamnoon

Title

Follett Toruksa Ananthothai*

Chairman of the Audit Committee Auditing Committee Auditing Committee

With Ms.Doungporn Rermyindee as the secretary. Note: * Possessing expertise in accounting (See biography of directors, executives and authorized individuals)

Audit Committee’s authority and scope of responsibility 1. Supervise the company’s operations to ensure honesty, transparency, and responsibility to shareholders. 2. Ensure that the executive board and executives handle their responsibilities in an accurate, complete and standard manner. 3. Ensure the accuracy, sufficiency, and credibility of the financial results, as well ensure the accurate and sufficient disclosure through coordination with external auditors and executives who take responsible for preparing quarterly and yearly financial statements as requested by the company’s board of directors and/or the executive board. 4. Ensure appropriate and effective internal control, through the coordination with the internal auditors and auditors. 5. Appoint the auditor and set the auditor fee, which must be approved by the shareholders and based on reliability and adequacy of human resources, audit job volume made by the audit firm and experience of staffs who are in charge of the company’s accounting audit. 6. Make sure that the company follows the legal conditions set by the Securities and Exchange Commission, the Stock Exchange of Thailand and other related agencies. 7. Prevent conflicts of interest through the inspection of the transactions of the company with connected parties and through coordination with the auditor as well as consider disclosing accurate and adequate information for connected transactions and any transactions that might cause conflicts of interest. 8. Prepare the audit committee’s report and disclose the report in the annual report, which includes at least following issues. - Opinion related to prepare the company’s financial reports and accurate and reliable information disclosure. - Opinion concerning to sufficiency of the company’s internal control system. - Reasons that the company’s auditor is appropriate for another term appointment. - Opinion to comply with the Securities and Exchange Act, the Stock Exchange of Thailand’s rules and laws relevant to the company’s business. - Other reports that should be acknowledged by shareholders and investors under scope of duty and responsibility assigned by the company’s directors. 9. Review the internal control’s reports. 10. Review the internal control’s findings. If finding or suspecting of any misconduct, or the insufficiency of the internal control, they must ask for the Board of Directors’ judgment.

11. Review the internal control’s inspection and the auditor’s recommendations, and follow through the improvements. 12. Authorize to examine, audit, call executive directors, executives, advisors, and accounting auditors to attend meeting to acknowledge information and seek independent opinions from other professional advisors if necessary to achieve in tasks under responsibility. 13. Perform other tasks assigned by the company’s board such as review of financial and risk management policy, and business ethics conducted by executives. The audit committee has a three-year term and it will be elected by the company’s board when their terms are ended by rotation.

3.The Nomination and Remuneration Committee The Board of Directors at the 4/2014 meeting on 16 June 2014 approved the consolidation of the Nomination Committee and Remuneration Committeem, to create a single Nomination and Remuneration Committee, effective from 17 June 2014 onwards. ) The Nomination and Remuneration Committee consisted of 3 persons as of 31 December 2014. No

Name

1 Mr.Virayuk Puntupetch 2 Mr. Vidhya Nativivat 3 Mr.Ooi Boon Aun

Title

Chairman of the Nomination and Remuneration Committee Nomination Committee Nomination Committee

With Mr. Pramote Rermyindee as secretary Nomination Committee’s scope of authority and responsibility 1. Review the individuals who are fit to be the company’s directors and nominate the list to the board of directors and/or present the list to shareholders for official appointment. 2. In reviewing the individuals’ qualifications, the committee must consider their expertise, knowledge, ability and relevant experiences to ensure that the individuals’ qualifications would be useful for the company’s operations. Besides, the committee must consider that the nominations follow the legal framework particularly when it involves the nominations for independent directors and the audit committee members. 3. In selecting independent directors and the audit committee members, the committee must take into account; (A) The nominated individuals must hold no more than 1% of the paid-up capital of the company, affiliates or subsidiaries. The percentage is inclusive of the shareholding of related individuals - their spouses and underage children. (B) The nominated persons must not be related to the company’s executives or major shareholders. (C)The appointed persons must not have conflicts of interest, directly or indirectly, in terms of finances or management of the company and affiliates. They must not be the company’s major shareholders.

ANNUAL REPORT 2014

(D) The nominated persons must have no any relationship with the company and associates in ways of vested interest, or financial or management benefit at present and over the past two years before appointed as independent directors. Such relations include - Being directors who take part in the companyâ&#x20AC;&#x2122;s management, employees, staff members, advisers who receives a regular salary, or control authorities. - Being professional service providers such as auditors, legal Consultants, financial advisors or price appraisers. - Having business relationship such as buy/sell goods, provide asset buy or sell service, give or receive financial assistance etc. (E) In case that the nominated persons serve as independent directors of other companies in the group, they must disclose such information and remuneration received from those companies. (F) The nominated persons must not seat as any director in other listed companies in the group. 4. The appointed persons must be able to work and present their views with independence, free from the control from executives or major shareholders as well as their relatives. Director Selection Committeeâ&#x20AC;&#x2122;s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commissionâ&#x20AC;&#x2122;s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope. To present the selected persons to the board of directors, the Selection Committee must nominate only those who will fill the available director seats. Except when the committee members could not reach an agreement, they are allowed to present all the nominated names to the board for their consideration.

4. Risk Management Committee Risk Management Committee consisted of 4 persons as of 31 December 2014. No. Name

1 2 3 4

Title

Mrs.Nuanual Swasdikula-Na-Ayudhaya Mr.Boonliam Luangnakthongdee Dr.Thamnoon Ananthothai Mr.Chirdsak Kukiattinun

Chairman of Risk Management Committee Risk Management Committee Risk Management Committee Risk Management Committee

With Dr.Theerathorn Tharachai as Secretary Risk Management Committee’s scope of authority and responsibility. 1. Review and present risk management policy and acceptable risk to the company’s board for approval. 2. Supervise development and practice throughout organization to comply with risk management framework. 3. Review risk management reports to monitor important risks and proceed to ensure that the organization has sufficient and appropriate risk management. 4. Present risk of the company in overall picture, and sufficiency of internal control system to manage risk in all important aspects to the company’s board. 5. Provide suggestion about risk management to the company and revise any information concerning risk management system development. 6. Authorizes to appoint the company’s risk evaluation and monitoring working group. 7. Perform other tasks about risk management assigned by the company’s board.

5. Executive Board Executive Board contains 8 individuals, as of 31 December 2014. No. Name

1 2 3 4 5 6 7 8

Dr.Tawatchai Nakhata Mr.Chainid Adhyanasakul Mr.Phairat Senachack Ms.Supee Reodecha Mr.Wicharn Siriwetwarawut Mr.Pornswat Katechulasriroj Mr.Wongsakorn Prasitvipat Ms.Sirirat Wongwattana

Title

Chief Executive Director (Authorized Signatory Director) Deputy Chief Executive Director (Authorized Signatory Director) Executive Director (Authorized Signatory Directors) Executive Director Executive Director Executive Director Executive Director Executive Director and Secretary (Authorized Signatory Directors)

ANNUAL REPORT 2014

Executive Committee’s authority and scope of responsibility* 1. Run the company’s daily operations under the guidelines set by the Board of Directors and within the scope of rules and regulations, as well as the company’s objectives and regulations. They are barred from transactions related to project opening and investment, not related to the company’s core business. 2. Appoint high-ranking executives to manage the company. 3. Set the annual budget for the Board of Directors’ approval. 4. Consider investment projects for the Board of Directors’ approval. 5. Review and approve land acquisition worth over Bt200 million but not more than Bt800 million. The amount must not exceed the sum approved by the Board. Any approved land purchase must be attached with the preliminary development plan and project feasibility, for the Board’s consideration. 6. Review and approve the transactions apart from budget plan no more than Bt 100 million. 7. Consider and approve borrowings and the financing of normal transactions. - Project financing – approved the project financing worth not over Bt1,000 million per project, excluding infrastructure guarantee - Working Captital - approved the borrowing of no more than Bt800 million for the working captital. 8. Prepare, recommend and set business strategies for the Board of Directors. 9 Consider and approve the corporate marketing and public relations plans. 10. Evaluate the company’s performance in terms of asset management and financial management to ensure efficiency and effectiveness. 11. Conduct other tasks assigned by the Board of Directors. Notably, the executive board has no authority in handing its power to any member or others to approve a connected transaction (as prescribed by the Securities and Exchange Commission) or a transaction which could pose conflicts of interest with the company or subsidiaries with exception of approval for normal course of business transactions as policy and criteria resolved by the board of directors under the Securities and Exchange Act, and the Stock Exchange of Thailand’s regulations, announcements and instructions or rules. Note: * Revised by Board’s resolutions at the 6/2014 meeting on 6 November 2014

Chief Executive Officer* Chief Executive Officer is the highest authority in the company’s management. perform duties and report operating performance to the Executive Committee, Board of Directors and shareholders as follows : 1. Set policies, direction, and strategies for the company’s business operation. 2. Set business planning, budget and authority of the company’s internal units which up to management department to seek the board’s approval. 3. Manage normal course of business activities under policies set by the company’s board, laws, conditions, regulations, memorandum of association, and the company’s rules. 4. Appointed Management Board, advisor and other directors to give advices concerning the company’s management. 5.Review and approve land acquisition worth no more than Bt500 million. The purchase must be notified to the Executive Committee, held as the Board of Directors’ resolution which would be used in the registration of rights and transactions at relevant land offices. 6. Review and approve the Transations apart from budget plan no more than Bt50 million. 7. Perform other tasks assigned by the company’s board. Chief Executive Officer authority, duty and responsibility could not be transferred to others in a way that those who are authorized by Chief Executive Officer can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or the subsidiaries and affiliates, or he/ she has vested interest with exception that those transactions are regarded as normal course of business as policies and principles set by the company’s board. in compliance with laws governing securities and stock exchange, regulations, announcements, instructions or rules of the Stock Exchange of Thailand. Note: * Revised by Board’s resolutions at the 6/2014 meeting on 6 November 2014.

Executives The company’s executive team consisted of 8 members as of 31 December 2014, as defined in the Securities and Exchange Commission’s announcement No. Name

1 2 3 4 5 6 7 8

Mr. Chainid Adhyansakul Mr. Pramote Rermyindee Mr.Wicharn Siriwetwarawut Mr.Pornswat Katechulasriroj Mr.Wongsakorn Prasitvipat Miss Sirirat Wongwatana Mr.Surasak Vacharapongpreecha Miss Supee Reodecha*

Title

Chief Executive Officer Company Secretary Chief Operating Officer 1 Chief Operating Officer 2 Chief Business Development Officer Chief Financial Officer Deputy Chief Financial Officer Deputy Chief Financial Officer

Note: *Miss Supee Reodecha resigned from company executive on 31 January 2015.

ANNUAL REPORT 2014

Company Secretary In compliance with the Securities and Exchange Act BE2551’s Section 89/15, the Board of Directors must appoint the Company Secretary who will act on behalf of the company and the Board of Directors. The Board of Directors at the meeting on 11 August 2008 resolved to appoint Mr.Pramote Rermyindee as the Company Secretary. Company Secretary’s scope of authority and responsibility 1) Preparing and keeping the following documents (A) Directors’ Register (B) Invitations to Board of Directors meetings, meeting minutes, and the Annual Reports (C) Invitations to shareholders’ meetings and minutes of the meetings 2) Keeping the connected transactions reported by directors or executives and submitting photocopies of the reports to the chairman and chairman of the Audit Committee within 7 days of receipt 3) Setting the documenting system for the following information and ensuring the complete storage of such document which must date back at least 5 years and could be retrieved for post-audit. The storing of such document covers the electronic system and others which allow the retrieval of original document. (1) Information presented at shareholders’ meetings (2) Financial statements or reports on the company’s finances and operating results or other reports which must be disclosed under the Securities and Exchange Act’s Articles 56, 57, 58 or 199. (3) The company’s opinion on shareholders’ tender offer for the company’s shares (4) Information or other reports on the company, to be released to shareholders or the general public as required by the Capital Market Supervisory Board 4) Complying with other duties to be specified by the Capital Market Supervisory Board 5) Company Secretary must carry out duties with responsibility, caution, and integrity; must comply with laws, the company’s objectives and regulations, the Board of Directors resolutions and shareholders’ resolutions; and must not act in the way that causes significant conflict of interest. 6) Carrying out duties with responsibility and caution as men with integrity would do when falling under the same situation. (1) Making decisions with full conviction and good reasons that they are for the company’s maximum benefits. (2) Acting on information honestly believed to be sufficient, and (3) Making decisions that do not create any direct or indirect conflict of interest. When the Company Secretary cannot further perform his job, the Board of Directors is required to appoint the replacement within 90 days. Ms. Sirirat Wongwattana was accordingly appointed to carry the tasks.

Meeting allowances of the company’s board and 4 units of subcommittees in 2014. Name

Board of Directors

Dr.Tawatchai Nakhata Mr.Virayuk Puntupetch * Mr. Chainid Attayarnsakul Dr.Somsak Toruksa* Dr.Thamnoon Ananthothai * Mr.Phairat Senachak Mr.Vidhya Nativivat Ms.Sirirat Wongwattana Mr.Ooi Boon Aun Mrs.Nuanual Swasdikula-Na-Ayudhaya * Mr.Krish Follett * Mr.Anuwat Maytheewibulwut * ,** Mr.Boonliam Luangnakthongdee Mr.Chirdsak Kukiattinun

7 7 7 6 4 7 7 7 6 7 7

Total

Audit Committee

Remuneration Nominating Risk Committee Committee Management Committee

1 8 6

2 8 1

2 8

1 8 8

Note: * Independent Directors ** Mr Anuwat Maytheewibulwut resigned as director and independent director on 15 February 2014, citing other binding duties that prohibited the service.

Nomination and Appointment of Directors and Top Executives (1) Independent directors Independent directors’ qualifications must meet the Securities and Exchange Commission’s regulations No. Tor Jor 28/2008 on the filing and approval of new share offerings and the Stock Exchange of Thailand’s regulations on the qualification of independent directors. (2) Nomination Directors and Top Executives The nomination committee exists to nominate individuals as the company’s directors. The Selection Committee will shortlist qualified persons and submit the nominations to the Board of Directors or the shareholders meeting for the appointment. The nomination committee places the knowledge, ability and experiences on top priority in completing the nomination, as the qualifications must support the company’s operations. (As specified by the scope of authority and responsibility of the Selection Committee, in nominating company directors).

ANNUAL REPORT 2014

Components and appointment of directors The companyâ&#x20AC;&#x2122;s Board of Directors contains at least 5 members and at least a half of the board members must reside in the Kingdom. In voting for directors at the shareholders meeting, one share is equivalent to one vote. Each shareholder is obliged to cast all votes for one or more persons, but they cannot ration votes for particular persons. Majority votes count in the voting. In case of equal votes, it is to be decided by chairman of the meeting. At annual shareholder meeting, one third of directors must end their term. If the number of directors cannot be divided into three portions, the number of resigned directors must be as close as the one-third ratio. Directors are barred from operating a similar business which competes against the companyâ&#x20AC;&#x2122;s business, or being a partner of a partnership, a partner without limit in a limited partnership, or a director of any juristic body that operates in competition against the company, unless shareholders are notified of the fact before the appointment. Directors must immediately notify the company if taking any part in contracts with the company or when the holding of shares or debentures issued by the company or subsidiaries increases or decreases

Human Resources 1. Number of Employee At the end of 2014, the company and subsidiaries employed 890 employees. The following is the number of employees of each unit. Division

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Office of the Chief Executive Officer Project Planning and Housing Marketing Division Condominium Project Development Division Condominium Marketing Division Sales Management Division Design Division Construction Management Division - Operating Group 1 Construction Management Division - Operating Group 2 Advertising Division Public Relations and Corporate Communication Division Accounting Division Internal Audit Legal Procedure & Ownership Transfer Division Financial & Treasury Division Budgeting Division Information System Division Fund Administration & Corporate Bond Division Investor Relations and Research Development Division Human Resources Division General Administration Division Project Management Division - Zone 1 - 8 Construction Company (U & I) Clubhouse Management Company (PSC) Total

Employee (Persons) 31-DEC-14

22 17 22 23 81 15 20 32 14 10 26 3 68 22 6 9 29 5 9 22 385 50 6 890

In the past 3 years, the company has witnessed no lawsuits regarding labor disputes.

ANNUAL REPORT 2014

2. Employees’ remuneration The company has in place the remuneration committee, authorised and responsible for considering the remuneration policy and payout criteria for the chief executive officer, directors and consultants. It is also setting the annual benefits, annual salary adjustment, extra salary adjustment, and other benefits for employees at all levels. The committee also considers the employment rules and work code and ensures that disciplinary actions are appropriate and fair to employees. The employee remuneration (excluding that of executives) covers salary, bonus, welfare benefits, overtime, allowances and contribution to the provident fund. It amounted to Bt586.08 million in 2014. 3. HR Development Policy The company realizes the importance of all employees and is committed to consistent supports for the enhancement of their knowledge and skills to match their job descriptions. This is to ensure quality products to customers and standardized marketing and service quality. The human resource development policy is thus designed accordingly to the areas of work. Training is planned in line with the company’s business direction and employees’ job descriptions. The competency system has been introduced, so that employees are equipped with all knowledge and skills required for their jobs. The HR development plan has been shaped under the policy. Training courses for employees are clearly defined. There is an analysis on training specification, to promote employees’ job competency accordingly to their job descriptions. The urgency of training in different work periods is also taken into account. The development scheme planned for employees at all levels is diverse, covering internal training, external training, and coaching. The training program is designed in accordance with the company’s annual targets. The methods are designed to match the courses, requiring employees to take classes, practice and actually work in the respective fields under the supervisors’ guidance. On top of this is the sharing and exchanging of experiences, skills and knowledge of employees in different units. The company regularly hosts a forum where they can share experiences and notify obstacles, to define solutions as well as outline the standardized work procedure and services. These are to put in place the learning culture in the organization. In 2014, some of the enhancement programs are as follows: 1. Administrative skill enhancement The company has placed emphasis on preparing employees for the supervisory and administrative levels. Such enhancement programs are organized every year. 2. Teamwork enhancement The company sees the value of creative teamwork, within business units or across units, as this ensures efficiency of the overall operations. The Perfect Team curriculum was initiated, bringing employees from different units. Together, they got to know each other and participated in group activities, allowing the closer cross-unit relationship and harmony.

3. Preparation for ISO 9001:2008 Certificate Customersâ&#x20AC;&#x2122; benefits have been the priority. Under the commitment to deliver quality products and services, the company is adopting international standards for the entire production process. The ISO 9001 standards will ensure that products meet customersâ&#x20AC;&#x2122; demands and comply with relevant laws and regulations. Employees at all business units were trained about the standards. Staff of all relevant units received training on the quality system and operating process, in line with the goal to deliver quality products to customers. Outstanding staff is selected for additional training to undertake internal audit, tasked primarily to monitor and ensure that all units meet the specified goal. 4. Marketing skill enhancement The company plans to grow business with new projects every year. All sale employees, who directly feed information to and serve customers, are thus required to attend the training program. This is to ensure standardized and impressive services to customers. The Service Signature project, to create a unique service standard, was initiated in 2013 and will continue in 2014. Employee Training and Competency Enhancement The company puts emphasis on training and perfectly readying all employees for their job descriptions. The activities have been rolled out consistently. They start with the orientation of the new recruits. Then, there is on-the-job training as well as training on new tools that can support their work. Employeesâ&#x20AC;&#x2122; competency is also enhanced, to ready them for promotion and ensure that they will be able to perform the new jobs efficiently and effectively. The courses designed for all employees can be categorized as follows: 1. Standard Course 2. Management Course 3. Team Work Course 4. Course on construction 5. Course on design 6. Course on sale 7. Course on quality 8. Course on after sales service In 2014, 52 in-house and public training courses were organized, involving 519 attendees.

ANNUAL REPORT 2014

ORGANIZATION CHART Property Perfect Public Company Limited and Subsidiaries Chief Advisor to the Board of Directors

Board Of Directors

Risk management Committee Executive Committee Audit Committee Chief Executive Officer(CEO)

Internal Audit Chief Advisor to the Board of Directors

Operating Group 2 (COO 2)

Business Development Group (CBO)

Chief Operating Officer

Chief Business Development Officer

Deputy Chief Operating Officer

Deputy Chief Operating Officer2

Deputy Chief Business Development Officer

Assistant Chief Operating Officer

Assistant Chief Operating Officer 2

Assistant Chief Business Development Officer

Construction Management Division â&#x20AC;&#x201C; Operating Group1

Construction Management Divisionâ&#x20AC;&#x201C; Operating Group 2

Project Planning and Housing Marketing Division

Legal Procedure & Ownership Transfer Division

Project Management Division Zone VI

Condominium Project Development Division

Project Management Division Zone I

Project Management Division Zone VII

Condominium Marketing Division

Project Management Division Zone II

U&I construction Bangkok Co., Ltd .

Design Division

Operating Group 1 (COO 1 ) Chief Operating Officer

Project Management Division Zone III

Advertising Division

Project Management Division Zone IV

Public Relations and Corporate Communication Division

Project Management Division Zone V

Sales Management Division

Project Management Division Zone VIII

Perfect Prefab Co., Ltd.

Nomination and Remuneration committee

Company Secretary

Legal

Office of the Chief Executive Officer

Financial Group (CFO)

Support Officer (CSO)

Chief Financial Officer

Chief Support Officer

Deputy Chief Financial Officer

Deputy Chief Support Officer

Assistant Chief Financial Officer

Assistant Chief Support Officer

Finance & Treasury Division

Information System Division

Accounting Division

Fund Administration & Corporate Bond Division

Budgeting Division

Investor Relations & Research Development Division Human Resources Division General Administration Division Uniloft Service (Thailand) Co., Ltd.

ANNUAL REPORT 2014

BOARD OF DIRECTORS OF THE COMPANY

1. Dr.Tawatchai Nakhata Chairman Chief Executive Director

2. Mr.Chainid Adhyanasakul Chief Executive Officer Deputy Chief Executive Director Director

3. Mr.Virayuk Puntupetch

Deputy Chairman Independent Director Chairman of Nomination and Remuneration Committee

4. Dr.Somsak Toruksa Director Independent Director Audit Committee

5. Mr.Vidhya Nativivat

Director Nomination and Remuneration Committee

6. Dr.Thamnoon Ananthothai Director Independent Director Audit Committee Risk Management Committee

10 1

7. Mrs.Nuanual SwasdikulaNa-Ayudhaya 9

Director Independent Director Chairman of Risk Management Committee

8. Mr.Phairat Senachack

Director Executive Director Consultant of Chief Executive Officer

9. Mr.Krish Follett

Director Independent Director Chairman of Audit Committee

10. Mr.Ooi Boon Aun

Director Nomination and Remuneration Committee

11. Ms.Sirirat Wongwattana Director Executive Director Chief Financial Officer

12. Prof. Dr.Suchatvee Suwansawat Director Independent Director

13. Mr.Pramote Rermyinde Company Secretary

ANNUAL REPORT 2014

BUSINESS POLICY AND OVERVIEW

Vision, Objectives, Goals and Strategies of The Company/Group Vision The company sets sight to be a leading property developer that constantly satisfies customers of all ages, communities, partners, shareholders and employees, and commitment to environmental conservation and the quality of life. Mission 1. Create and develop modern products and services at potential locations and timely and constantly respond to new living concepts 2. Create and solidify the financial stability in response to sustainable development of the organization and stakeholdersâ&#x20AC;&#x2122; 3. Create and improve operational excellence through a professional team and the consistent and standardized operating system 4. Create and enhance satisfaction in products and services with the better environment and quality of life and responses to the need of clients of all ages 5. Create and grow reputation and pride through responsible and ethical operations, in recognition of the benefits and impacts on the relevant parties

The Company is primarily involved in developing properties for sale. The range of products cover single houses, townhouses and condominiums. The policy is in place in the administration and contractor assignments for the construction of designed products. To control the quality of construction works, The Company’s engineers and architects are dispatched to monitor the entire process. A subsidiary was established to provide construction services primarily to The Company and the group. This is on top of the assignments awarded to external construction companies, to help reduce the construction cost. More subsidiaries were also established to support the development of shopping malls, office buildings, commercial areas, investment-purpose retail business, and overseas property development. The Company’s main business goal is to deliver customers “Happy Living” home, through ethical and responsible operations which highlight responsibility to the environment, society and shareholders. The Company’s strategies are exercised to create added value, aiming to satisfy dwellers in all elements from locations, project design, home designs, standardized construction quality, sports clubs, the environment to the natural ambience. Activities are hosted at the projects for all family members, to strengthen their bonds and nurture Thai culture as reflected in activities to commemorate various festivals. Safety standards are assured, to ensure the “Happy Living” environment at all projects. The Company puts emphasis on the quality of project development; functional home designs despite sizes for maximum customer satisfaction; the creation of lake, the vast greenness with trees and naturally-designed gardens; and the clubhouses as well as other services. A team is tasked to host activities during holidays and festivals, to ensure desirable relationship among customers. The closed circuit TV covers major areas of the projects, which from the entrance are guarded 24 hours a day to assure all of the safety. All these have resulted in positive responses to The Company’s products. The Company will further its commitment towards quality projects. On offer is the accommodation at various locations that promises quality of life to all groups of customers. The Company’s products - condominium, townhouses,duplex houses and single houses - are available at the prices of Bt1 million to Bt40 million. They are located in a diverse range of areas, to reach as many as customers as possible.They are assured of satisfaction when living in any project by Property Perfect. The Company and subsidiaries are convinced that the commitment will produce the desirable quality of life and environment, which will yield good society and encourage people to do good deeds to society.

ANNUAL REPORT 2014

PROJECT’S INFORMATION Project of Property Perfect Plc. and Subsidiaries’ on 31 December 2014.

“Perfect Masterpiece” Brand 1. Perfect Masterpiece Rattanathibet

Location Developed by Time to Develop Product Total Project Value

Thambon Saima, Muang District , Nonthaburi Province. Property Perfect Plc. 2007-2019 SDH 4,879 MB.

2. Perfect Masterpiece Rangsit

Location Developed by Time to Develop Product Total Project Value

Meuang District ,Prathum Thani Province. Property Perfect Plc. 2011-2015 SDH 676 MB.

3. Perfect Masterpiece Ramkhamheang

Location Developed by Time to Develop Product Total Project Value

Kwang Minburi,Khet Minburi, Bangkok Property Perfect Plc. 2011-2015 SDH 1,214 MB.

4. Perfect Masterpiece Phase 1-3 Sukhumvit 77

Location Developed by Time to Develop Product Total Project Value

Sukhumvit Rd.,SamutPrakarn Province. Estate Perfect Co., Ltd.. 2012-2015 SDH 1,494 MB.

“Perfect Place”Brand 5. Perfect Place Ramkhamhaeng-Suvarnabhumi 2

Location Developed by Time to Develop Product Total Project Value

Kwang Minburi.,Khet Minburi, Bangkok Property Perfect Plc. 2011-2015 SDH 1,555 MB.

6. Perfect Place Ramkhamhaeng-Suvarnabhumi 2 (Private Zone) (Repurchase)

Location Developed by Time to Develop Product Total Project Value

Kwang Minburi,Khet Minburi, Bangkok Property Perfect Plc SDH 112MB.

7. Perfect Place Ramkhamhaeng-Suvarnabhumi (Colonial Zone) (Repurchase)

Location Developed by Time to Develop Product Total Project Value

Kwang Minburi.,Khet Minburi, Bangkok Property Perfect Plc SDH 195MB.

8. Perfect Place Rattanathibet

Location

Developed by Time to Develop Product Total Project Value

Thambon Saima, Muang District , Nonthaburi Province. Property Perfect Plc. 2005-2015 SDH 4,717 MB.

9. Perfect Place Ratchapruek Phase 1-2

Location

Developed by Time to Develop Product Total Project Value

Tambon BangrakNoi.,Muang District, Nonthaburi Province. Property Perfect Plc. 2013-2015 SDH 2,567 MB.

10. Perfect Place Ratchapruek Phase 3

Location

Developed by Time to Develop Product Total Project Value

TambonBangrakNoi,Muang District, Nonthaburi Province. Property Perfect Plc. 2014-2015 SDH 602 MB.

ANNUAL REPORT 2014

11. Perfect Place Rangsit

Location Developed by Time to Develop Product Total Project Value

Meuang District, PrathumThani Province. Property Perfect Plc. 2011-2015 SDH 684 MB.

12. Perfect Place Chaengwattana

Location

Developed by Time to Develop Product Total Project Value

Cheangwattana Rd.,PakkredDistrict, Nonthaburi Province. Property Perfect Plc. 2013-2016 SDH 1,296 MB.

13.Perfect Place Pattanakarn-Srinakarin

Location Developed by Time to Develop Product Total Project Value

Pattanakarn Rd.,Khet Pravet, Bangkok Property Perfect Plc. 2013-2015 SDH 1,109 MB.

14.Perfect Place Exclusive Zone Ratchapruek

Location

Developed by Time to Develop Product Total Project Value

Tambon BangrakNoi,Muang District, Nonthaburi Province. Property Perfect Plc. 2014-2015 SDH 81 MB.

15.Perfect Place Sukhumvit77-Suvarnabhumi

Location

Developed by Time to Develop Product Total Project Value

Khlong Rachathewa, Bang Phli District, SamutPrakarnProvince. Estate Perfect Co., Ltd. 2007-2015 SDH 6,354 MB.

16. Perfect Place Chiang Mai

Location

Developed by Time to Develop Product Total Project Value

Tambon San Phi Sue, Muang District, Chiang Mai Province. Residence Number Nine Co., Ltd. 2014-2017 SDH 950 MB.

“Maneerin”/“Perfect Park”Brand 17.Perfect Park RamaV-Bangyai

Location

Developed by Time to Develop Product Total Project Value 18.Perfect Park Rangsit

Location Developed by Time to Develop Product Total Project Value

Tambon Bang Maenang, BangYai District, Nonthaburi Province. Property Perfect Plc. 2006-2017 SDH,DH 6,154 MB. Muang District ,PrathumThani Province. Property Perfect Plc. 2010-2015 SDH,DH 684 MB.

19.Perfect Park Suvarnabhumi Phase 1-2

Location Developed by Time to Develop Product Total Project Value

Kwang Minburi,Khet Minburi, Bangkok Estate Perfect Co., Ltd. 2007-2015 SDH, DH 2,314 MB.

20. Perfect Park Bangbuatong

Location

Developed by Time to Develop Product Total Project Value

TambonBangbuathong, Nonthaburi Province. Residence Number Nine Co., ltd. 2010-2016 SDH 1,553 MB

21.Maneerin Lake&Park Ratchapruek-Tiwanon

Location

Developed by Time to Develop Product Total Project Value

Tambon Bangkoowat.,Muang District, Nonthaburi Province. Property Perfect Plc. 2003-2014 SDH,DH 3,093 MB.

ANNUAL REPORT 2014

“The Villa” /”Modi Villa”/”The Metro” Brand 22. The Villa Rattanathibet.

Location

Developed by Time to Develop Product Total Project Value

Tamboon Ta-It, Pakkred District, Nonthaburi Province. Property Perfect Plc. 2006-2015 TH,DH 3,648 MB.

23. Modi Villa Pinklao - Outer Ring

Location

Developed by Time to Develop Product Total Project Value

Tambon Salaklang, Bangkruai District Nontaburi Province. Estate Perfect Co., Ltd.. 2012-2016 TH,SDH,DH 1,291 MB.

24. Modi Villa Townhome Ladkrabang

Location

Developed by Time to Develop Product Total Project Value

Tambon Klongluangpang,Muang District Chachoengsao Province. Residence Number Nine Co., Ltd.. 2012-2016 TH 941 MB.

25. Modi Villa Townhome Bangna

Location

Developed by Time to Develop Product Total Project Value 26. Modi Villa Bangna

Location

Developed by Time to Develop Product Total Project Value

Bangsaothong District , SamutPrakarn Province. Estate Perfect Co., Ltd.. 2013-2017 TH 1,017 MB. Bangsaothong District, SamutPrakarn Province. Estate Perfect Co., Ltd.. 2013-2016 SDH,DH 569 MB.

27.Modi Villa Ladkrabang-Suvarnbhumi

Location

Developed by Time to Develop Product Total Project Value

Tambon Klongluangpang, Muang District, Chachoengsao Province. Residence Number Nine Co., Ltd. 2012-2016 SDH,DH 614 MB.

28. Modi Villa Bangbuathong

Location

Developed by Time to Develop Product Total Project Value

Tambon Bangbuathong, Nonthaburi Province. Residence Number Nine Co., Ltd. 2013-2016 TH,SDH,DH 1,339 MB.

29.The Metro Ramkhamheang-Outer Ring

Location Developed by Time to Develop Product Total Project Value

Khet Sapansung, Bangkok. Property Perfect Plc. 2013-2015 TH 52 MB.

30. The Metro Pattanakarn-Srinakarin

Location Developed by Time to Develop Product Total Project Value

Pattanakarn Rd., Khet Pravet, Bangkok. Property Perfect Plc. 2013-2015 TH 670 MB.

“Metro Park”/ “Metro Sky” / “The Sky” Brand 31. Metro Park Sathorn Phase 1-3

Location

Developed by Time to Develop Product Total Project Value

Kwang Bangbua, Khet PhasiChareon Bangkok. Property Perfect Plc. 2005-2014 CD 8,000 MB.

32. The Sky Sukhumvit

Location Developed by Time to Develop Product Total Project Value 33. Metro Sky PrachaChuen

Location Developed by Time to Develop Product Total Project Value

Sukhumvit Rd.,Khet Bangna, Bangkok Property Perfect Plc. 2012-2015 CD 3,800 MB. PrachaChuen Rd.,Khet Bang Sue, Bangkok Property Perfect Plc. 2014-2017 CD 3,500 MB.

ANNUAL REPORT 2014

“Metro Luxe”/ “Bella Costa” Brand

34. Metro Luxe Phaholyothin (Metro Sky Phaholyothin)

Location Developed by Time to Develop Product Total Project Value

Suthisanwinitchai Rd., Bangkok Property Perfect Plc. 2014-2015 CD 810 MB.

35.Metro Luxe Riverfront (Metro Riverfront)

Location

Developed by Time to Develop Product Total Project Value 36. Metro Luxe Rama IV

Location Developed by Time to Develop Product Total Project Value

Rattanathibet Rd.,Muang District , Nonthaburi Province. Property Perfect Plc. 2014-2016 CD 1,717 MB. Rama IV Rd.,Khet KhlongToei, Bangkok Property Perfect Plc. 2014-2016 CD 1,700 MB.

37. Metro Luxe Ratchada (Metro Sky Ratchada)

Location Developed by Time to Develop Product Total Project Value

Ratchadapisek Rd., Bangkok. Bright Development Bangkok Co., Ltd. 2014-2016 CD 1,855 MB.

38. Metro Luxe Kaset (Metro Sky Kaset)

Location Developed by Time to Develop Product Total Project Value

39. Bella Costa

Location

Developed by Time to Develop Product Total Project Value

Praditmanutham Rd., Bangkok. Bright Development Bangkok Co., Ltd. 2014-2016 CD 1,600 MB. Thambon PaknamPran, Pranburi District , Prachuabkirikhan Province. Property Perfect Plc. 2014-2015 CD 1,639 MB.

“iCondo” Brand

40. iCondo Ngamwongwan1

Location Developed by Time to Develop Product Total Project Value

DuangManee Rd.,Nonthaburi Province. Bright Development Bangkok Co., Ltd. 2011-2014 CD 525 MB.

41. iCondo Ngamwongwan2

Location Developed by Time to Develop Product Total Project Value

DuangManee Rd.,Nonthaburi Province. Bright Development Bangkok Co., Ltd. 2012-2015 CD 663 MB.

42. iCondo Sukhaphiban 2

Location Developed by Time to Develop Product Total Project Value

Seri Thai Rd., Khet BuengKum, Bangkok Bright Development Bangkok Co., Ltd. 2011-2015 CD 1,011 MB.

43. iCondo Sukhumvit 105

Location Developed by Time to Develop Product Total Project Value

Sukhumvit 105 Rd.(Soi Lasal) ,Bangkok Bright Development Bangkok Co., Ltd. 2011-2015 CD 2,212 MB.

44. iCondo Sukhumvit103

Location Developed by Time to Develop Product Total Project Value

Sukhumvit 103 Rd.(Soi Udomsuk),Bangkok Bright Development Bangkok Co., Ltd. 2011-2015 CD 1,537 MB.

45. iCondoSalaya

Location Developed by Time to Develop Product Total Project Value

Salaya-NakornChaisri Rd.,Thambon Salaya, Phutthamonthon District ,NakornPrathom Bright Development Bangkok Co., Ltd. 2012-2015 CD 980 MB.

ANNUAL REPORT 2014

46. iCondo PhetKasem39

Location Developed by Time to Develop Product Total Project Value

Petkasem Rd., Bangkok Bright Development Bangkok Co., Ltd. 2012-2015 CD 581 MB.

47. iCondo Kaset

Location Developed by Time to Develop Product Total Project Value SDH DH TH CD

Prasert Manunkit Rd., Bangkok Bright Development Bangkok Co., Ltd. 2012-2015 CD 295 MB.

= Single Detached House = Duplex House = Townhouse = Condominium

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1. Perfect Masterpiece Rattanathibet 2. Perfect Masterpiece Rangsit 3. Perfect Masterpiece Ramkhamhaeng 4. Perfect Masterpiece Sukhumvit77 5. Perfect Place Ramkhamhaeng-Suvarnabhumi 2 6. Perfect Place Rattanathibet 7. Perfect Place Ratchapruek 8. Perfect Place Rangsit 9. Perfect Place Chaeng Wattana 10. Perfect Place Pattanakarn-Srinakarin 11. Perfect Place Sukhumvit77-Suvarnabhumi 12. Perfect Park Rama V-Bangyai 13. Perfect Park Rangsit 14. Perfect Park Suvarnabhumi 15. Perfect Park Bangbuatong 16. Maneerin Lake&Park Ratchapruek-Tiwanon 17. The Villa Rattanathibet 18. Modi Villa Townhome Ladkrabang 19. Modi Villa Townhome Bangna 20. Modi Villa Bangna

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21. Modi Villa Pinklao-Outer Ring 22. Modi Villa Bangbuatong 23. Modi Villa Ladkrabang 24. The Metro Ramkhamhaeng 25. The Metro Pattanakarn-Srinakarin 26. Metro Park Sathorn 27. The Sky Sukhumvit 28. Metro Sky Pracha Chuen 29. Metro Luxe Paholyothin-Sutthisan 30. Metro Luxe Riverfront 31. Metro Luxe Rama 4 32. Metro Luxe Rachada 33. Metro Luxe Kaset 34. iCondo Ngamwongwan 35. iCondo Ngamwongwan 2 36. iCondo Sukaphiban 2 37. iCondo Sukhumvit 105 38. iCondo Sukhumvit 103 39. iCondo Kaset 40. iCondo Petchkasem 39 41. iCondo Salaya

ANNUAL REPORT 2014

Products and Services

The company and subsidiaries are developing property projects under a variety of brands, to satisfy various needs of different target groups and to offer products at a wide price range. The projects are primarily in prime locations in Bangkok and peripheral provinces, located along mass transit routes and community areas near universities.There are also projects in high-potential provinces like Prachuab Khiri Khan (Hua Hin) and Chiang Maim The products are classified into two categories. Single detached houses, duplex houses and townhouses The company and subsidiariesâ&#x20AC;&#x2122; projects cater for customer demands which vary from location to location. They are priced from Btt1.7-Bt40 million under the following brands Single detached house and duplex house

Project : Perfect Masterpiece Price range: 9.0 - 40.0 MB.

Project : Perfect Place Price range: 4.0 - 9.0 MB.

Project : Perfect Park (formerly named Maneerin / The Villa) Price range: 2.8 - 5.0 MB

Existing projects: Perfect Masterpiece Rattanathibet Perfect Masterpiece Rangsit Perfect Masterpiece Ramkhamhaeng Perfect Masterpiece Ratchaphruek Perfect Masterpiece Sukhumvit 77

Perfect Place Rattanathibet Perfect Place Ratchaphruek Perfect Place Rangsit Perfect Place Ramkhamhaeng-Suvarnabhumi 2 Perfect Place Sukhumvit 77-Suvarnabhumi Perfect Place Chaeng Wattana Perfect Place Pattanakarn-Srinakarin Perfect Place Chiangmai

Maneerin Lake & Park Ratchaphruek-Tiwamon Perfect Park Bangbuathong Perfect Park Rama V- Bang Yai Perfect Park Rangsit Perfect Park Suvarnabhumi The Villa Rattanathibet

Modi Villa Pinklao- Outer Ring Modi Villa Lat Krabang-Suvarnabhumi Modi Villa Bangna Modi Villa Bangbuathong Project : Modi Villa Price range: 2.5 - 5.0 MB.

Townhouses

Existing projects The Metro Ramkhamhaeng-Outer Ring The Metro Pattanakarn-Srinakarin

Project : The Metro Price range: 3.5 - 5.0 MB

Modi Villa (Townhome) Lad krabang Modi Villa (Townhome) Bangna Project : Modi villa (Townhome) Price range: 1.7 - 3.5 MB.

The Villa Ramkhamhaeng The Villa Ramintra The Villa Bangbuathong Project : The Villa Price range: 1.7 - 3.0 MB

In 2015, the company and subsidiaries plan to launch new projects and expand existing ones. This will cover a total of 21 single detached house total value of Bt26,500 million. They will cover new locations like Ratchapruek, Rattanathibet, Cheangwattana, Rangsit, Ramkhamhaeng, Onnuch, Pattanakarn, Romklao, Bangna, Phetkasem and New Chaiyapruek roads. Expansion into provinces will continue, including through a villa project in Nakhon Ratchsima province

ANNUAL REPORT 2014

2. Condominium

The company and subsidiaries have launched condominium projects under various brands. They are both low-rise (with no more than 8 floors) or high-rise (with over 8 floors), in response to target groupsâ&#x20AC;&#x2122; new generation. The prices range from Bt1-Bt11 million. The projects are primarily in prime locations in Bangkok and peripheral provinces, located along mass transit routes and community areas near universities. Details are as follows;

Condominium

Existing projects:: The Sky Sukhumvit

Project : The Sky Price range: 2.8 - 11.0 MB.

Metro Sky Prachachuen

Project : Metro Sky Price range: 1.9 - 5.0 MB

Project : Metro Luxe Price range: 1.6 - 5.4 MB.

Metro Luxe Riverfront Metro Luxe Rama IV Metro Luxe Phaholyouthin (Metro Sky Phaholyothin) Metro Luxe Kaset (Metro Sky Kaset) Metro Luxe Ratchada (The Sky Ratchada)

The Lake Sathorn

Project : The Lake Price range: 1.39 MB. (Start)

Project : iCondo Price range: 1.0 - 2.0 MB

iCondo Ngamwongwan1 iCondo Ngamwongwan 2 iCondo Sukhapibarn 2 iCondo Sukhumvit 103 iCondo Sukhumvit 105 iCondo Kaset iCondo Petchakasem 39 iCondo Salaya Bella Costa Hua Hin

Project : Bella Costa Price range: 2.95 MB. (Start)

Uniloft Chiang Mai Uniloft Salaya (Transfer property right to Uniloft Property Fund) Project : Uniloft Monthly rent: 8,900 Bt/Month Monthly rent: 7,500 Bt/Month In 2015, the company and subsidiaries plan to launch 3 condominium projects worth totally Bt3,142 million on potential locations in the Greater Bangkok and provinces, such as Ngamwongwan, Bangna and Salaya area. The company and subsidiaries base the investment decision on customer preferences survey in each location, to finalize target groups, development types and an appropriate price range. All projects are thoroughly reviewed by relevant business units, also through feasibility studies on the projects which scatter on various potential locations in the Greater Bangkok. The focus is to create quality, well-designed and environmental-friendly projects, aside from favorable pre- and after-sale services. After the transfer, the company and subsidiaries assure customers with a 1-year house warranty starting from the transfer date. The Perfect Service unit is established to take care of customers who have been delivered their completed units, within the warranty and off-warranty period. This is to ensure speedy services and guarantee customer satisfaction. Manning the unit are loyal employees, equipped with service mind and knowledge through training

ANNUAL REPORT 2014

Moreover, the company and subsidiaries put in place community management practices, to cover the provision of recreation areas, utilities and infrastructure inside the projects until the construction works are finished and transferred to the estate committee or the juristic body.

3. Land Bank

The Company has the policy to buy land plots for the development of projects by the Company and those in the group, without any intention to speculate on the prices in the short or long term. However, the Company will consider selling land plots that demonstrate no potential for future development. The Company will also consider selling the plots near existing projects, which do not support the future development policies of the entire group of business or do not offer commercial values to outsiders. In selling the plots, aside from the prices which must be reasonable, the Company will also ensure that the buyers would not turn the plots into property projects which would pose direct competition against the Company’s projects in the particular areas. Or, the plots should be developed into properties which will boost the value of the group’s projects located nearby.

4. Rental Dormmitory Business

The Company and subsidiaries develop dormitories having the students, lecturers and staff of key universities across the country as main target. The business offers a great potential due to the increasing size of the target group. Dormitories under “Uniloft” brand are launched. Differentiating them from other dormitories are the separate zones for male and female tenants, the entry cards for particular zones, common areas, as well as a complete range of facilities and services

5. Retail Business

The Company and subsidiaries draw up a plan to develop shopping malls, office buildings and commercial areas. In the first phase (1-2 years), a community mall will be developed. This will be followed by a closed shopping mall and office for rent. The subsidiaries are now developing 3 shopping malls including the community malls on Kalapaphruek Road and one in Soi Sukhumvit 77. The project on Kalapaphruek Road is expected to complete partially in the fourth quarter of 2014 and completely in the second quarter of 2015, respectively. The project in Soi Sukhumvit 77 is expected to be completed in the fourth quarter of 2015. The third project is on Ratchadapisek Road which is expected to start commercial operations within 2016.

6. Hotel and Resort Business

The Company operates a hotel and resort business abroad, owning Kiroro Resort in Akaigawa-mura, Hokkaido, Japan. The ski resort is located on a 292-rai plot, where two four-star hotel buildings are located. There are 422 hotel rooms, from 22sqm standard rooms to 149sqm suites. The resort’s average occupancy rate in 2013 was 57.4% while the average in the first nine months of 2014 was 65.2%. Considered one of the best ski resorts in Japan, it boasts the scenery that supports travel at all seasons. Akaigawa-mura is also well-known as the second most beautiful village in Japan. The resort offers a complete range of facilities such as function rooms, restaurants and a bar, hot spring, a swimming pool, souvenir shops and recreational areas. The Company is now reviewing business plans for the resort.

Total revenue structure from sales by product type The company and subsidiaries main sizeable revenue from property development for sale. The products are both low-rise and high-rise, ranging from single houses, duplex houses, townhouses to low rise and high rise condominiums. The revenue structure in 2014 and the 3 preceding years are as follows: Consolidated financial statements 2012 (Revised) 2013 2014 Million Million Million % % % Baht Baht Baht

Revenue from sales of land and houses 7,489.5 80.8 6,836.5 60.9 6,275.6 49.1 Revenue from sales of residential 1,180.6 12.7 2,626.4 23.4 3,667.1 28.7 condominium Revenue from sale of land for development 147.9 1.6 529.5 4.7 1,628.7 12.7 Revenue from hotel operations 275.7 3.0 1,018.4 9.1 844.7 6.6 Other income 11.2 0.1 19.2 0.2 26.7 0.2 Interest income Revenue from forfeiture of down payment 8.9 0.1 7.0 0.1 13.5 0.1 Income from investment in associate 77.3 0.6 Gain a bargain purchase 37.0 0.4 Others 118.9 1.3 191.7 1.7 251.8 2.0 Total revenue 9,269.7 100.0 11,228.7 100.0 12,785.4 100.0 The financial statements showed that land and house sale generated 80.0%, 60.9% and 49.1% of total revenue in 2012, 2013 and 2014. Condominium business generated 12.7%, 23.4% and 28.7% of revenue, respectively. Proceeds from the sale of vacant land plots accounted for 1.6%, 4.7% and 12.7%. The hotel business generated Bt275.7 million, Bt1,018.4 million and Bt844.7 million, or 3.0%, 6.5% and 6.6%, respectively. The statements also showed earnings from investment in associated companies booked before Item: Profit before financial expense and tax, worth Bt27.8 million, Bt59.8 million and Bt60 million in the years.

ANNUAL REPORT 2014

Land and Houses Sale Revenue Structure by Product Type House and condominium sale revenue from various projects are as follows; 2012 Project

Brand “Perfect Masterpiece” Maneeya Masterpiece Exclusive Zone Perfect Masterpiece Ekamai - RamIntra Perfect Masterpiece Rattanathibet Perfect Masterpiece Rama IX Perfect Masterpiece Rachapruek Perfect Masterpiece Ramkhamhaeng Perfect Masterpiece Rangsit Perfect Masterpiece Sukhumvit 77 - Suvarnabhumi** Maneerin Masterpiece Rangsit Brand “Perfect Place” Perfect Place Rattanathibet Phase 1 Perfect Place Rattanathibet Phase 2 Perfect Place Ramkhamhaeng - Suvarnabhumi (Private Zone) Perfect Place Ramkhamhaeng - Suvarnabhumi (Colonial) Perfect Place Ramkhamhaeng - Suvarnabhumi (Exclusive Zone) Perfect Place Ramkhamhaeng - Suvarnabhumi (Lake Zone) Perfect Place Ramkhamhaeng - Suvarnabhumi (2) Perfect Place Ramkhamhaeng - Suvarnabhumi Phase 2-3 Perfect Place Lakeside Home Ramkhamhaeng Perfect Place Ratchapruek Phase 1 Perfect Place Ratchapruek Phase 2 Perfect Place Ratchapruek Phase 3 Perfect Place Ratchapruek (Exclusive Zone) Perfect Place Rangsit Perfect Place Chaengwattana Perfect Place Sukhumvit 77 - Suvarnabhumi** Perfect Place Pattanakarn - Srinakarin Perfect Place Chiang Mai*** Maneerin Lake&Park Ratchapruek - Tiwanon Maneerin Park2 Rangsit Maneerin Rattanathibet Perfect Park Ramkhamhaeng - Suvarnabhumi

2013 %

2014 %

6.0 285.4 1,125.1 249.2 452.8 186.8 186.5 15.0

0.1 3.8 15.0 3.3 6.0 2.5 2.5 0.2

8.0 197.2 378.5 253.2 243.7 267.0 131.3 495.6 -

0.1 2.9 5.5 3.7 3.6 3.9 1.9 7.2 -

40.5 282.9 16.4 173.4 338.4 333.5 -

0.6 4.5 0.3 2.8 5.4 5.3 -

12.9 532.7

0.2 7.1

6.7 575.3

0.1 8.4

452.5

7.2

51.1 30.9 280.3 30.4 619.7 150.0 505.1 -

0.7 0.4 3.7 0.4 8.3 2.0 6.7 -

93.1 75.0 6.7 278.2 96.4 232.5 126.5 76.1 432.0 -

1.4 1.1 0.1 4.1 1.4 3.4 1.9 1.1 6.3 -

92.3 4.3

1.2 0.1

105.1 -

1.5 -

12.4 67.1 79.6 226.7 9.6 224.7 82.2 52.3 112.1 288.5 345.7 297.6 17.5 33.9 4.2 -

0.2 1.1 1.3 3.6 0.2 3.9 1.3 0.8 1.8 4.6 5.5 4.7 0.3 0.5 0.1 -

2012 Project

2013 %

Perfect Park Rama V - Bangyai Phase 1-5 538.7 7.2 Perfect Park Rangsit 102.0 1.4 Perfect Park Suvarnabhumi Phase 1-2** 373.1 5.0 Perfect Park Bangbuathong *** 204.7 2.7 Brand “The Villa” / “The Metro” The Villa Rattanathibet 321.7 4.3 The Metro Rama IX 364.0 4.9 The Metro Sathorn 57.7 0.8 The Metro Ramkhamhaeng - Outer Ring The Metro Pattanakarn - Srinakarin The Villa Ramkhamhaeng - Suvarnabhumi** 56.7 0.8 The Villa RamIntra - Outer Ring** 281.1 3.8 The Villa Bangbuathong*** 213.5 2.9 The Villa (Townhome) Ladkrabang - Suvarnabhumi** 23.7 0.3 Modi Villa Ladkrabang - Suvarnabhumi*** 26.3 0.4 Modi Villa Pinklao - Outer Ring** 101.9 1.4 Modi Villa Bangna** Modi Villa (Townhome) Bangna** Modi Villa Bangbuathong*** Other Maneeya 4 Nantana Garden 1 Nantana Garden Teparak Maneerin Rattanthibet Bright Shop House Ramkhamhaeng**** 8.0 0.1 Villa Shop House Ramkhamhaeng 174** Total Revenue from the Sale of land houses 7,489.6 100.0 Remark : ** Developed by 100%-owned subsidiary Estate Perfect Co., Ltd . *** Developed by 100%-owned subsidies Residence Number Nine Co., Ltd. **** Developed by 100%-owned subsidies Bright Development Bangkok Co., Ltd.

2014 %

514.2 166.0 447.0 281.9

7.5 2.4 6.5 4.1

403.8 179.9 286.3 183.3

6.4 2.9 4.6 2.9

358.5 60.7 95.3 4.7 36.8 140.7 86.5 83.8 214.1 7.2 193.1

5.2 0.9 1.4 0.1 0.5 2.1 1.3 1.2 3.1 0.1 2.8

381.9 5.4 128.5 253.3 4.0 3.4 4.7 84.6 91.1 273.5 58.0 88.0 334.3

6.1 0.1 2.0 4.0 0.1 0.1 0.1 1.3 1.5 4.4 0.9 1.4 5.3

26.8 41.2 6,836.5

4.2 0.1 0.4 0.6 100.0 6,275.6 100.00

As shown in the balance sheet, sales revenue of Property Perfect in 2012 - 2014 are Bt5,509.0 million, Bt4,345.2 million and Bt4,167.8 million, respectively. In the same period, subsidiaries’ revenue are Bt1,980.6 million, Bt2,491.4 million and Bt2,107.8million, respectively.

ANNUAL REPORT 2014

Sale of Condominium Units Revenue Structure by Product Type Project

2012 MB

2013 MB

Brand “Metro Park / Metro Sky” Metro Park Sathorn 574.3 48.6 334.7 Metro Sky Ratchada**** 606.3 51.4 3.7 Brand “iCondo” iCondo Ngamwongwan 1**** - 431.4 iCondo Sukhumvit 105**** - 446.1 iCondo Sukhapiban 2 **** - 396.1 iCondo Sukhumvit 103**** - 500.4 iCondo Kaset**** iCondo Ngamwongwan 2**** iCondo Petchkasem 39**** iCondo Salaya**** Brand “Uniloft” Uniloft Salaya 5 rai - 514.0 Total Revenue from the Sale off Codominium Units 1,180.6 100.0 2,626.4 Note: **** Developed by Bright Development Bangkok Co. ,Ltd, 100% owned by the Company.

2014 MB

12.7 0.1

369.4 -

10.1 -

16.4 17.0 15.1 19.1 -

79.9 625.3 514.8 869.7 290.5 234.2 435.0 284.4

2.2 17.1 14.0 23.7 7.9 6.4 11.9 6.8

19.6 100.0 3,667.1

100.0

Revenue from sales of condominium units presented in the consolidated financial statements came from total revenue from projects developed by Property Perfect Public Company Limited in 2012 - 2014 are Bt574.3million, Bt.334.7million and Bt369.4 million, respectively. In the same period, subsidiaries’ revenue are Bt606.3million, Bt2,291.7million and Bt3,297.7million, respectively.

Marketing and Competition Marketing Product Strategies Design

w /RZ 5LVH 5HVLGHQWLDO 8QLWV The Company and subsidiaries’ property development business takes into consideration the consumer demand and satisfaction survey as well as market competition, to respond each customer group’s preferences and improve the Company’s competitiveness. The Company and subsidiaries have developed a variety of products – single detached houses, duplex houses and townhouses – which come up with stunning designs and functions that fit Thais’ lifestyles and Thailand’s climate. The Company’s architectural team is highly experiences in this task and has been working closely with leading architectural firms to launch new innovation. In the past year, the Company and subsidiaries re-launched the well-received Urbanista Collection. The more modern look allows fresh benefits for the marketing team. Meanwhile, despite the minor change, the collection maintains the functional designs and usable space, which has made it popular. The collection comes with two series. w City Life Series to lure target groups of Perfect Park brand w Smart Life Series to lure target groups of Perfect Place brand The Urbanista Collection is designed to satisfy the new generation’s lifestyle. The natural modern style comes with functional designs, allowing the flexibility to suit different lifestyles under the “flexible space” concept. Sky Terrace : The new personal rest area, extended from the bedroom, to enjoy the spacious verandah and the natural breeze. It can be turned into a coffee corner in the morning or the open reading room. Dining Room : Designed to face the garden and prevent the spread of food smell to the living room. Connecting the pantry, it offers convenience in food preparation for small parties. Window Corner : A bedroom corner facing the open space outside. The spacious verandah extends in two sides, for perfect recreation. Walk-in Closet : The special corner inside the bedroom, which can be converted for other activities like reading or TV watching.

ANNUAL REPORT 2014

w &RQGRPLQLXP The company and subsidiaries’ condominiums are both low-rise (with no more than 8 floors) and high-rise (with over 8 floors), offered under various brands in line with the project type and target groups. The Company has put emphasis on project layouts, with focus on the usable space of the overall area that encompasses the central area and room space. The projects must portray a modern and stylish look, reflecting the urban lifestyle. Quality The Company and subsidiaries construct houses and townhouses through experienced contractors who have worked with the Company or shown credible track records. The contractors are demanded to follow the Company’s designs, constructing the units with quality materials. The construction is closely monitored to ensure timely delivery. Contractors are also allowed to propose and comment on construction methods. For example, they can choose whether to use the conventional method or the prefabricated or precast system, in delivering quality products with the specified budgets. However, several construction-related obstacles are foreseeable, such as labor shortage, the increase in construction material prices and shorter delivery period. The Company and subsidiaries have expanded the number of prefab houses. The Tunnel Formwork1 system was adopted to tackle the obstacles. At present, in the projects that adopt the system, the Company ably reduces the construction period from 6-8 months to 4-5 months. The Company also puts emphasis on the quality of construction materials. SCG Building Materials Company Limited is now the major supplier of such materials, to assure buyers of the durability and quality designs. The Company and subsidiaries manage the cost of materials through bulk orders. This increases the Company’s bargaining power and allows the Company to determine the development cost more precisely. The Company and subsidiaries also partner with SCG Building Materials in the construction of houses with the Modular2 system. “SCG HEIM Innovative House” offers beautiful look, safety and value. High technology is involved in all construction stages, aside from high-quality materials and precise quality control. The innovative product is an option to consumers who are interested in innovation. It is now available at premium projects.

Note 1 2

Tunnel Formwork system allows the casting of tunnel moulds. On the moulds, concrete walls and floors can be built in one operation. Modular is an innovative precast construction system. The steel structure and materials are designed by a computer programme, to ensure that the houses can withstand earthquakes, floods and other disasters.

The Company and subsidiaries mainly build and offer complete houses to customers. The houses must be completed before putting on the market, which allows customers to view the completed units and immediately move in. The houses can be transferred within a month after the purchase.

Regarding condominium development, the Company and subsidiaries plan to launch more projects. More focus will be placed on every stage of construction, from the selecting of only established and experienced contractors. The Company and subsidiaries have a special team to closely work with the contractors. Consultants with experience in high-rise development are also hired to oversee the construction management, to ensure that the construction works meet engineering standards and requirements on quality and safety. The consultants will also ensure the construction is completed on schedule. In the past few years, the Company and subsidiaries have awarded most construction contracts to Italian-Thai Development Public Company Limited and Saeng Fa Construction Company Limited which are established and able to deliver standardized services. The construction works will be monitored by the Company’s engineering and construction management teams, to ensure that standards are maintained. There is a central team to monitor construction standards plus engineering advisors for all projects. There are training courses and field trips for the engineering and construction management teams, as well as training for contractors. Construction manuals that contain quality check stage by stage are handed out to the Company’s teams and contractors. Environment Impact Assessment Aside from enticing designs, functions and reasonable prices, the Company pays attention to the project planning, environmental management, infrastructure system, security system and after-sale services for customers’ maximum benefits. The Company has also hosted activities for major festivals, where its customers can meet neighbors and nurture their good relationship. With the focus, the company won EIA Monitoring Award from the Natural Resources and Environment Ministry for three consecutive years. The three projects received the awards, - In 2005 - 2007,Perfect Place Rattanathibet, Perfect Place Ramkhamhaeng phase1 - In 2006 - 2008, Perfect Place Ramkhamhaeng phase 2 and 3 - In 2008, the company won the “Outstanding Energy-Saving Estate” award from the Energy Ministry’s Department of Alternative Energy and Efficiency, from a list of home and project designs that boasted energysaving features like designs, fixtures, space planning and management. The company’s products won the following 10 awards; w 3 in the category of small detached houses with below 200 sqm of usable space, for Perfect Place Rattanathibet and Perfect Place Sukhumvit 77-Suvarnabhumi projects w 2 in the category of medium-sized detached houses with 200-300 sqm of usable space for Perfect Masterpiece Rattanathibet w 1 in the category of townhouses with below 120sqm in usable space for The Villa Rattathibet project w 1 in the category of townhouses with over 120sqm in usable space for The Metro Rama IX w Award in the category of a small development project with no more than 99 development lots for Maneerin Park 2 Rangsit project. w Award in the category of a medium development project with 100-299 development lots for Perfect Masterpiece Ekamai-Ramintra project. w Award in the category of a large development project with 300 development lots or over for Perfect Place Sukhumvit 77-Suvarnabhumi project.

ANNUAL REPORT 2014

In 2012, Perfect Masterpiece Rattanathibet was named the â&#x20AC;&#x153;Best Housing Developmentâ&#x20AC;? in Thailand Property Awards 2012, recognized as an excellent housing estate, while Perfect Place Rangsit was awarded a plaque honoring it as an outstanding private housing project. In 2014, Perfect Place Chaeng Wattana and Perfect Masterpiece Rangsit were named outstanding energy-saving projects. In addition, the company provides public gardens, lakes, large and perfect club houses . The company has teamed up with business partners to open their shops in the club house areas such as restaurant , Fitness Center, 7-11 Convenience stores and True coffee - Coffee Shop. These facilities differentiate the companyâ&#x20AC;&#x2122;s projects from othersâ&#x20AC;&#x2122;, creating the friendly ambience to residents who have warmly welcomed the concept. Pricing The company and subsidiaries has policy to set prices based on the economic condition, market demand and competition in all of products such as Single Detached house, Duplex house, Townhouse and condominium . These factors are jointly considered with costs, locations, project types and market conditions when compared with competitors. There are several guidelines for price setting such as setting higher price than rivals but better designs, and environmental and convenient facilities. The company and subsidiaries have offered various project types and prices to serve different demand as follows : Products in the VLQJOH GHWDFKHG KRXVHV GXSOH[ KRXVHV DQG WRZQKRXVHV category are priced from Bt1.7 million to Bt40 million, to meet the purchasing power of various target groups. Products in the condominium category are priced from Bt1 million to Bt11 million.

The table described residence prices by brand Type

1.0 – 2.0

Pricing (Unit: Million Baht) 3.0 – 4.0 4.0 – 5.0 5.0 – 9.0

2.0 – 3.0

9.0 up

Bt9.0 - 40 Million Bt4.0 - 9.0 Million Bt3.0 - 5.0 Million Single Detached House and Duplex House

Bt2.5 - 5.0 Million

Bt3.5 - 5.0 Million Townhouse

Bt1.7 - 3.5 Million

Bt1.3 - 3.0 Million Bt1.6 - 5.4 Million Bt1.9 - 5.0 Million Condomimium

Bt1.0 - 2.0 Million Bt2.8 - 11 Million Bt1.0 - 1.2 Million

Bt3.0 - 8.0 Million

ANNUAL REPORT 2014

Place

³ÜÐÎáÖÜÛ The projects of the company and subsidiaries are mostly located in high-potential locations, set along the electric train routes or new roads as. - In the North and West of Bangkok, The projects will be located on main roads along the Purple Line route (Bang Sue-Bang Yai) which will be operated in 2015, Red Line (Bang Sue-Rangsit) and Pink Line (Khaerai-Min Buri), which include Ratchaphruek, Chaiyaphruek, Rattanathibet, Kanchanapisek, Nonthaburi Bridge -Bang Buathong road and Rangsit-Pathum Thani roads. These encompass roads linking to important area as Rama 4 Bridge (crossing the Chao Phraya River) and roads that link Ratchaphruek and Kanchanapisek roads which link area from Chaengwattana road to Kanchanapisek road and Western Motorway road that link Bangyai-Ban Pong-Karnchanaburi . Ratchaphruek Road is being expanded from 6 lanes to 10. With proximity to the second-stage expressway and the new express way -Sri Rath -Outer Ring which aside from shopping centers like Central West Gate Bang Yai, Central Chaengwattana, Central Rattanathibet, Future Park Rangsit and The Crystal shopping center. -

In the East, New projects will be located on main roads along the Airport Rail Link, the Pink Line (Khaerai-Min Buri) which will be operated in 2017, and Orange Line (Talingchan-Min Buri). Near Suvarnabhumi Airport, the main roads include Ramkhamhaeng road, Sukhumvit 77 road and Romklao road, promising linkages to the Motor Way towards Chon Buri and Pattaya in the East and the Eastern outer ring road towards North and South of Bangkok. Urban City projects are in business areas like near Motor way, Airport Rail Link, BTS and MRT subway as well as the routes which running and to be opened soon. They are mostly up-scale housing units (Perfect Masterpiece), 3-storey townhouses (The Metro) and condominium (Metro Park, Metro Sky, iCondo) Provinces The Company and subsidiaries first ventured into provincial markets for the first time in this year, focusing on the provinces that offer high growth potential for residential development. Perfect Place Chiang Mai was launched in the province, to offer single houses near the city area. A beachfront condominium project, Bella Costa Huahin, was launched near the scenic Khao Tao mountain.

Promotion Advertising & PR The Single Detached House, Townhouse and condominium projects of the company and subsidiaries have applied the integrated communications as newspaper, TV Scoop, radio spot, Billboard, Direct mail etc, in selling the products. Mass media is exploited for the one-time advertisement to advertise a number of projects to target customers in lower advertising cost. Complimenting the strategy is the direct marketing, whereby a specific media is chosen for a particular target group and achieve the objective of Public relation, marketing events and customer relationship management (CRM) to take care of existing customers. The Perfect Friend Club is launched to thank existing customers who introduce the projects to their friends, as a means to effectively reach out to target customers at a low cost. The ratio of units sold under the scheme has been significantly rising, thanks to clientsâ&#x20AC;&#x2122; recommendations to their friends and relatives. The company and subsidiaries launched an offensive strategy to market products through online marketing channels, thanks to the growing usage of technology among todayâ&#x20AC;&#x2122;s customers. The budget for online advertising has been on the rise. Aside from websites, it is spent on the search engine and web banners to create awareness. Aside, there is the E-Direct Mail service to reach a particular group of customers. Social network channels are introduced, covering Facebook, Twitter and Instagram, to promote the organizational image and enhance confidence in the organization. The mobile media and applications have been adopted, to facilitate access to the companyâ&#x20AC;&#x2122;s information. The company and subsidiaries also host special marketing activities for customers who accessed information through the websites. These customers are asked to register online for site visits and registered customers are awarded a special privilege. This is to promote the interactive communication channel and it has been warmly welcomed. This also allows effective data collection and follow-ups. The company and subsidiaries have devised unique promotions for particular groups of target customers with realization of their different preferences, to speed up their buying decision process. The strategies take into account economic environment at a certain period. For example, for customers seeking a complete house, with help from leading financial institutions, they are offered with low-interest loans, an extended borrowing period, and the step installment program. Through cooperation with leading furniture makers, the company offers customers a chance to buy a house with furniture at special prices, to help them save shopping time and reduce the need for an interior design. Special furniture prices also save their money, as loans for furniture purchase often carry higher interest rate than mortgage loans.

ANNUAL REPORT 2014

Brand Building Strategies The brand building of the companyâ&#x20AC;&#x2122; and subsidiaries has been differentiated from competitorsâ&#x20AC;&#x2122;. The Brand DNA is created under the â&#x20AC;&#x153;Happy Livingâ&#x20AC;? concept, to underline the companyâ&#x20AC;&#x2122;s focus in creating the new living standards for all residing in the Property Perfect projects. w House (Happy with Perfect Quality) Residing in high-quality houses, which are well-designed for

maximized functions and pleasant look as well as for energy saving and environmental friendly purposes. Focus is also on standard materials and the thorough quality control of the construction process. The construction works are closely and thoroughly monitored and applied modern technology like the prefabrication which ensures short construction period but standard quarter. A final check before transfers is required.

w In 2013, the company and subsidiaries also adopted the ISO9001: 2008 standards, dealing with quality management. The quality management system will be adopted for the low-rise development projects of the company and subsidiaries, to warrant customer satisfaction. w Security (Happy with Peace of Mind) Deriving from maximum security. Through cooperation with Thai Secom Pitakkij Co., Ltd. (SECOM), a leader security system provider in Japan, the trustworthy Home Security system is designed for all projects to cover from the entrance, guard booths and the overall projectsâ&#x20AC;&#x2122; space to customersâ&#x20AC;&#x2122; home. w Living in the environment and society that supports oneâ&#x20AC;&#x2122;s lifestyle is true happiness. The Company promotes activities in housing and condominium projects. The central areas are spacious and fully equipped with facilities. For example, large fitness clubs are available at housing estates, where dwellers can enjoy a swimming pool, aerobic classes, shops and other services. The central areas are also designed for recreational family activities, reducing the need to venture outside the projects. w *UHHQ (QYLURQPHQW +DSS\ ZLWK )ULHQGO\ (QYLURQPHQW Near-nature environment is provided, with the larger central space which offers floral trees and large lakes for cool living amid fresh air. Focus is also on energysaving and environmental-friendly materials, reflective green glass and heat-insulating gypsum boards. Artificial materials have also been introduced to help save the environment, including the laminate floor that looks like real wood and is equally durable; and aluminum window sills which are both durable and beautiful. w 7KH FRPSDQ\ DQG VXEVLGLDULHV EHOLHYH WKDW D VXFFHVVIXO EUDQG LV EXLOW XSRQ FXVWRPHUVt JRRG H[SHULHQFHV which will lead to the companyâ&#x20AC;&#x2122; and subsidiaries have sustainable image. The construction works, design and project planning are thus properly designed, along with emphasis on environment management, infrastructure and security inside the projects. Activities are also hosted for better relationships among residents, to create a warm community and happy environment to all residents. Favorable communities spark words of mouths among residents of the company â&#x20AC;&#x2122;s projects, which is a sustainable way to build brand.

Competition Like in 2014, developers in 2015 generally tend to direct their energy towards addressing the demand that rises in line with large infrastructure projects like mass transit routes, expressways and the future regional transport networks. In their attention are also the urbanization of suburbs and expansion in downtown areas, as the Asean Economic Community will start. However, political and economic factors still pressure consumer confidence and the residential market. This would somewhat influences land developersâ&#x20AC;&#x2122; business strategies. Most developers are cautious in launching new projects. Their attention is tilted towards locations that clearly offer growth potential, the release of inventory and the delivery of as many units as targeted. Financial liquidity will be maintained to cushion against marketing and revenue shocks, which may arise amid the murky economic condition. On the product strategy, developers focus on residential development in high-growth locations and locations along major transport routes. As the purchasing power declines due to the economic instability and higher household debt, most developers focus more on more affordable products like townhouses and cheap condominiums. Or, they will compete in the upscale segment, where competition is low and the target group is the least affected. Low-rise development is expected to least witness negative impacts, as the buyers purchase the units for living. Low-rise projects also benefit from the expansion of suburban areas, thanks to better transport networks. Meanwhile, the condominium segment may show a stable growth or even slightly contract after a sharp growth rate in the past two years as well as the huge number of sold units which will be gradually transferred. On the marketing front, most developers have delayed spending plans, which cover advertising spending, on the belief that such would not yield reasonable impacts in this circumstance. The marketing activities are now geared towards all target groups and adjusted to better cope with the current situation, to maintain or raise their market shares. Online marketing activities have been enhanced in line with the changing consumer lifestyle. The developers have been avoiding a price war, to maintain the profit margin against the advance in production cost. Property prices tend to rise in line with the production cost, once the market recovers. Developers have adjusted unit size, improved the functions, and cut unnecessary details, to offer the best value for money. This will help boost the purchasing power of customers for units in their desirable locations. Meanwhile, the adoption of more prefabricated technology has cut the construction cost and offered development speed, which will improve their ability to address the changes in market condition. It will also help reduce cost volatility and circumstantial risks, and ultimately strengthen their competitive edge. Real Estate Industry Overview and Outlook The Thai economy expanded 0.7% in 2014, when household consumption increased by 0.3% and private investment declined 2.8%. Export revenue contracted by 0.3% while inflation was at 1.9%. The economic condition weakened due to internal and external factors as well as political factors. This pressured consumption and public spending as well as private consumption and investment. In 2015, the Office of National Economic and Social Development Board forecasts 3.5-4.5% economic growth. Public spending and investment in mega projects are expected to be the main engine, supported by low inflation. However, the global condition tends to remain volatile, which will affect exports and tourism while private sector confidence remains fragile in light of high household debt ratio.

ANNUAL REPORT 2014

The residential market in 2014 showed slight contraction from 2013, mostly due to a decline in new condominium units. Higher land prices and political instability also discouraged the launch of new projects in 2014. Developers also needed to complete under-construction projects. As such, the number of registered residential units and transfers declined. Developersâ&#x20AC;&#x2122; decision to delay new projects and speed up transfers should bring back a balance to the condominium market. If consumer confidence and purchasing power pick up, the condominium market should enjoy brisk sales. This is supported by the expansion of the electric train networks as well as the density of downtown areas, ahead of the start of the AEC. Meanwhile, the low-rise market should gradually recover, allowing developers to release their stocks and launch new projects. The development will mostly take place along transport networks particularly new electric train routes and the extension parts, as well as expressways and the new Chao Phraya River bridge. These allow the urbanization in suburban areas, where ones can find jobs and shopping malls which have become the major reasons in boosting residential demand in the particular areas. However, a sharp increase in land prices will remain a key challenge for future development, aside from consumer confidence and purchasing power. High household debt would further dent the purchasing power, while income may be affected by economic difficulties. This will affect demand and purchasing power. However, the residential market is expected to show growth soon if the economy expands as expected and developers come up with strategies that address the issue of purchasing power. The number of transferred units in Bangkok and peripheral provinces in 2014 contracted 7% from 2013, while the value dropped by 4%. The number of complete units in the area fell by 1%. The number of low-rise units introduced in the year increased by 3% from 2013, while condominium units dropped by 22%. The number of all residential units launched in the year dropped by 13% on average, while the value declined by 11%. This reflects contraction in the market. The number of transferred residential units in Bangkok and peripheral provinces stood at 170,135 units in 2014, down by 7% from 2013. The value of transferred units totaled Bt417,412 million, down by 4%. (Source: Government Housing Bankâ&#x20AC;&#x2122;s Real Estate Information Center) Of total, low-rise units accounted for 103,447 units, down by 3% from the previous year. Their combined value of Bt266,369 million also dropped by 3%. Meanwhile, condominium units accounted for 36% and 34% of the overall transferred residential units and the combined value. In the year, 66,688 condominium units were transferred, down by 11%. Their combined value was Bt151,043 million, down by 6% The number of registered residential units in Bangkok and peripheral provinces stood at 131,374 units in 2014, down by 1% from 2013. Of total, low-rise units accounted for 58,453 units, down by 1% on year, while condominium units accounted for 72,921 or 56% of total. The number slightly fell by 2% on year. (Source: Government Housing Bankâ&#x20AC;&#x2122;s Real Estate Information Center) This showed continued deterioration in the residential market from 2013.

No. of newly-registered units in Greater Bangkok (1996-2014) (By category) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Single house

2012 2013 2014

44,877 41,305 23,985 17,469 23,128 24,041 24,973 34,592 44,248 46,643 42,764 38,705 34,618 28,998 31,687 31,813 31,745 31,465 34,452

Duplex house 791 1,009 196 178 539 227 80 1,144 945 678 965 1,556 2,296 1,138 1,520 1,462 1,173 2,601 2,862 7RZQKRXVHV and shophouse 60,373 43,480 11,895 2,319 2,728 5,062 7,011 12,950 15,418 13,858 17,421 17,837 14,616 11,116 13,767 13,847 13,693 26,792 21,139 Condominium 70,575 62,837 30,978 9,063 6,679 4,650 5,118 7,399 8,439 10,534 18,607 17,432 34,049 53,725 59,919 34,734 78,391 71,440 72,921 Total

176,616 148,631 67,054 29,029 33,074 33,980 37,182 56,085 69,050 71,713 79,757 75,530 85,579 94,977 106,893 81,856 125,002 132,302 131,374

Source: Real Estate Information Center, Government Housing Bank

132,302 2013

137,031

125,002 2012

81,856

106,893

94,977

75,530 2007

85,579

79,757 2006

37,182 2002

71,713

33,980 2001

2005

33,074 2000

69,050

29,029

50,000

1999

67,054

100,000

2004

150,000

56,085

148,631

200,000

176,616

Graphic 1: No. of registered units in Greater Bangkok during 1996-2014 (by category)

Condominium

»ÜäÛÕÜâàÒ ÎÛÑ ºÕÜÝ ¯ÜâàÒ

«âÝÙÒå ¯ÜâàÒ

2014

2011

2010

2009

2008

2003

1998

1997

1996

0 ºÖÛÔÙÒ «ÒáÎÐÕÒÑ ÕÜâàÒ

Source: Real Estate Information Center, Government Housing Bank On the supply side, developers still launched more condominium projects, with focus on the areas where the new mass transit routes and extended sections will pass. The number of townhouses and twin houses under development also rose, as it became more difficult to find cheap single houses. Cheap townhouses were introduced to attract buyers who are looking for single houses. In 2014, 114,046 units were launched, down by 13% from the previous year. Their combined vale also showed an 11% drop. (Source: Agency for Real Estate Affairs) The number of newly launched units declined mainly because only 65,298 condominium units were launched, which represented a 22% drop from the previous year. Condominium units accounted for 57% of all residential units launched in the year. Meanwhile, 13,830 single houses were launched, up slightly by 8%. A number of 29,815 townhouses and shophouses were launched, showing a 1% decrease.

ANNUAL REPORT 2014

Newly-launched units in 2013 and 2014 Single detached house Duplex house Townhouse and Shophouse Condominium Total Source: Agency for Real Estate Affairs

2013

2014

Change %

12,789 4,437 30,074 84,250 131,550

13,830 5,103 29,815 65,298 114,046

8% 15% -1% -22% -13%

*UDSKLF &RPSDUDWLYH QXPEHU RI QHZO\ ODXQFKHG XQLWV GXULQJ E\ FDWHJRU\

+35%

84,250

+23% 62,548

+1%

2013 2014

+86% 30,074 24,390 12,720

12,789 2,380

Single Detached House

Duplex House

4,437

Town House and shophouse

Condominium

Source: Agency for Real Estate Affairs

The residential demand in 2015 tends to be influenced by real demand, aside from the stimulation from urbanization and transport network expansion. Political instability and unclear economic direction - which dampens consumer Meanwhile, the purchasing power could also be weakened by the more stringent lending criteria, an increase in household debt, and an increase in asking prices in line with the construction cost. confidence - are the key factors to influence sale and revenue. Should the political situation be more stable and the economic recovery gains momentum, consumers should regain confidence. Low-rise development tends to grow on real housing demand, while high-rise development may show a slower growth rate thanks to the sharp expansion in the past two years. The segment maintains a bright growth prospect, though.

SECURITIES AND SHAREHOLDERS 1. Common shares Accounting year

Registered capital - Value (Bt) - No. of shares Registered capital - Value (Bt) - No. of shares - Par value (Bt. /Shares)

31 Dec. 2012

31 Dec. 2013

31 Dec. 2014

5,961,161,256 5,961,161,256

10,737,610,610 10,737,610,610

5,641,047,963 5,641,047,963 1.00

5,782,930,655 5,782,930,655 1.00

5,782,951,655 5,782,951,655 1.00

As of 31 December 2012, the Company’s registered and paid-up capital rose to Bt5,641,047,963 ( 5,641,047,963 shares at Bt1 par value). This follows the capital increase of Bt787,730,720 (through the issuance of 787,730,720 at Bt1 par value) as well as the exercise of warrants (PF-W2) in June and November 2012 worth Bt52,928,322 (for 52,928,322 shares at Bt1 par value) and the exercise of warrants PF-W3) in September 2012 worth Bt73,932,601 (for 73,932,601 shares at Bt1 par value).The new shares were registered with the Ministry of Commerce on 29 June 2012, 6 July 2012 and 12 October 2012, respectively. As of 31 December 2013, the company’s registered capital totaled Bt5,961,161,256 (5,961,161,256 shares at Bt1 par value) while the paid-up capital totaled Bt5,782,930,655 (5,782,930,655 shares at Bt1 par value).The amount increased due to the exercise of warrants (PF-W3) into common shares worth Bt141,882,692 (141,882,692 shares at Bt1 par value). The new shares were registered with the Commerce Minister on 3 April 2013 and 9 July 2013. On 29 July 2014, shareholders at the 1/2014 extraordinary meeting reached the following resolutions: 1. Reduce the Company’s registered capital from Bt5,961,161,256 (5,961,161,256 shares at Bt1 par value) to Bt5,960,980,722 (5,960,980,722 shares at Bt1 par value), by cancelling 180,534 shares (worth Bt180,543 at Bt1 par value) reserved for the exercise of expired warrants (PF-W2) issued to creditors in the rehabilitation plan. 2. Increase the registered capital from Bt5,960,980,722 (5,960,980,722 shares at Bt1 par value) to Bt10,737,610,610 (10,737,610,610 shares at Bt1 par value), by issuing 4,776,629,888 shares at Bt1 par value to the shareholders of Thai Property Plc. and shareholder of Grand Asset Plc. who agree to the Company’s tender offers for their shares. Some shares are also reserved for the exercise of the Company’s warrants issued in 1/2012 (PF-W3). Details are as follows:

ANNUAL REPORT 2014

2.1 Reserve 1,596,592,736 shares at Bt1 par value for the tender offers for Thai Property Plc. as payment to the company’s shares sold to the Company. 2.2 Reserve 3,161,773,631 shares at Bt1 par value for the tender offer for Grand Asset Plc., as payment to the company’s shares sold to the Company. 2.3 Reserve 18,263,521 shares at Bt1 par value for the adjustment of 1/2012 warrants (PF-W3) accordingly to the condition binding the issuers The new shares were registed with the commerce Ministry on 31 July 2014 As of 31 December 2015, the Company’s registered capital stood at Bt10,737,610,610 (10,737,610,610 shares at Bt1 par value), with Bt5,782,951,655 (5,782,951,655 at Bt1 par value) being paid-up.

2. Shareholder Major Shareholder As of 31 December 2014, the company’s registered capital totaled Bt10,737,610,610 (10,737,610,610 at Bt1 par value) while the paid-up capital totaled Bt5,782,951,655 (5,782,951,655 shares at Bt1 par value) The first 10 largest shareholders are; Rank The first 10 largest shareholders

1 ANDAMAN LONGBEACH RESORT COMPANY LIMITED /1 2 SOMERS (U.K.) LIMITED/2 3 JAPAN ASIA GROUP LIMITED /3 4 Natee International Law Office /4 5 Mrs.Sumalee Ongjarit 6 Miss Sajee Lipisuntorn 7 BUALUANG LONG TERM EQUITY FUND 8 Provident fund of Employee of Electricity Generating Authority of Thailand. 9 BUALUANG LONG TERM EQUITY FUND 75/25 10 Pacific Phuket Co., Ltd. /5 Data from Thailand Securities Depository Co., Ltd.

No. of shares

564,426,331 410,000,000 381,050,475 291,494,374 214,981,874 158,400,000 132,967,400 120,275,000 119,895,600 117,628,000

9.76 7.09 6.59 5.04 3.71 2.74 2.30 2.08 2.07 2.03

Note 1/

ANDAMAN LONGBEACH RESORT COMPANY LIMITED is 100% owned by Resort Holding Company Limited, There were 3 major shareholders are; 1) Wahkit Finance Limited own 45% registered in aboard. Property Perfect Public Company Limited was informed by Andaman Long beach Resort (Andaman)’s management that its indirect major shareholder, Wahkit Finance Limited, has no connection with Japan Asia Group Limited and/or MJL Intertrade Company Limited and/or Natee International Law Office Limited. 2) Other shareholders of Resort Holding are Mr. Methee Tanmanatrakul (45%) and 3) Mr. Chaiwat Aswintrangkul (10%). Mr Methee and Mr. Chaiwat are authorized to sign obligations involving Andaman Long beach resort and Resort Holding co.,Ltd. There is no connection between Andaman and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship. The Company’s directors or executives have no relationship – as directors, executives, shareholders or controlling entities - with Wahkit Finance Limited, Resort Holding Company Limited and Andaman Long Beach Resort Company Limited.

Hong Kong and Shanghai Banking Corporation Limited, Fund Services Department is the juristic entity owns a similar number of shares in the Company that Somers (UK) Limited once owned. The Company assumes that Hong Kong and Shanghai Banking, Fund Services Department and Somers (UK) should be an identical shareholder. The Company was informed by Hong Kong and Shanghai Banking Corporation (Thailand) that Hong Kong and Shanghai Banking, Fund Services Department, Fund Services Department is incorporated in the United Kingdom to provide a custodian service. The Company’s executives and/or individuals related to the Company and/or subsidiaries do not have any relationship with this shareholder. The shareholder did not own shares in the Company’s subsidiaries or have any relationship with them.

JAPAN ASIA GROUP COMPANY LIMITED emerges as a shareholder, as the creditor in the Rehabilitation Plan converted debts to equity in line with the Rehabilitation Plan. Japan Asia Group Limited is registered in the British Virgin Islands, a sovereign territory of the United Kingdom, operating financial services and investment. Under the British Virgin laws, the information of shareholders, registered capital and operating results of companies incorporated there is available only to authorized director, which in the case of Japan Asia Group Limited is Star Mark Enterprises Limited. In quest for the information on its shareholders, the company learns that Japan Asia Group Company Limited’s ultimate shareholder is Mrs. Wai Ching Chung, a resident of Hong Kong, the People’s Republic of China. There is no connection between Japan Asia Group Limited and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship.

ANNUAL REPORT 2014

Natee International Law Office Company Limited emerged as a shareholder, as a lawful representative of a creditor in the Rehabilitation Plan. Before the plan was terminated (the plan exit), the company was required to issue common shares to creditors entitled to debt to equity conversion as debt repayment. Then, Lowe’s Partner Investment Company Limited and Glorybye Associates Company Limited filed petitions to the Central Bankruptcy Court, saying that they own debt claims of a creditor which was entitled for the issued shares and asking for the court’s judgment. The company thus assigned Natee International Law Office to represent the creditor. The law office was instructed to place the allocated shares at the Court. The shares would be given to the ultimate representative upon the Court’s decision on the case. Natee International Law Office provides legal and accounting services. On 25 October 2005, the Central Bankruptcy Court resolved that Glorybye Associates Company Limited was the lawful representative and entitled to the shares. The case is under an appeal process and is not yet through. Glorybye Associates Company Limited as such does not appear as a shareholder of the company as it has not yet received the shares from the Court. Glorybye Associates Company Limited is registered in Samoa as an investment company, having United Continental Investors Limited as a director and executive. There is no connection between Glorybye Associates Company Limited and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship.

Pacific Phuket Company Limited is 100% owned by Andaman Villa Company Limited. Andaman Villa’s major shareholders are 1) Mrs Ruedee Noranitipadungkan, 40%, 2) Mrs Napaporn Buraprateep, 40%, and 3) Mr Vichai Jitseree, 20%. Andaman Villa and Pacific Phuket have Mr Vichai Jitseree and Mrs Ruedee Noranitipadungkan as directors. The Company and the two companies do not have the same major shareholders, share any director or executive, or are related through a nominee account. The Company’s directors and executives are not the directors or executives of Andaman Villa or Pacific Phuket or have the controlling power over the two companies.

3. Other Securities 3.1 Warrants A) Free warrants to right offering subscribers: Shareholders at the annual meeting on 29 April 2011 approved the issuance of free warrants to existing shareholders who subscribe for capital-increase shares at the ratio of one warrant to every 2 new shares subscribed. (Detail is in No.7.1 Common Shares). Detail is as follow; No. of warrants 393,865,360 units Maturity 3 years from issue date Exercise date Last working day of each quarter Exercise price 1 baht Exercise ratio 1 : 1 (Warrants per Shares) Warrants (PF-W3) A number of 393,865,295 warrants are allocated to right-offering subscribers. The warrants were listed on the Stock Exchange of Thailand on 18 July 2012 and started trading on 1 August 2012. The warrants were issued on 18 July 2012 and will expire on 18 July 2015.

In March 2013, the company received advance payment worth Bt41,750,492 for the exercise of 41,750,492 warrants (for 41,750,492 shares at Bt1 par value). The new shares worth Bt41,750,492 were registered with the Commerce Ministry on 3 April 2013. In June 2013, the company received advance payment worth Bt100,132,200 for the exercise of 100,132,200 warrants (for 100,132,200 shares at Bt1 par value). The new shares worth Bt100,132,200 were registered with the Commerce Ministry on 9 July 2013. as of 30 June 2013, outstanding warrants totaled 178,050,002 units. In September 2013, no warrant was exercised, leaving the outstanding number at 178,050,002 units. In December 2013, no warrant was exercised, leaving the outstanding number at 178,050,002 units. In March 2014, no warrant was exercise, leaving the outstanding number at 178,050,002 units. In June 2014, no warrant was exercise, leaving the outstanding number at 178,050,002 units. In September 2014, the Company received advance payment for the exercise of 21,000 warrants (for 21,000 shares at Bt1 par value) worth a total of Bt21,000. The outstanding number of warrants stood at 178,029,002 units. In December 2014, no warrant was exercise, leaving the outstanding number at 178,029,002 units. Period

September 2012 December 2012 March 2013 June 2013 September 2013 December 2013 March 2014 June 2014 September 2014 December 2014

Warrant exercise (Unit)

Outstanding (Unit)

73,932,601 41,750,492 100,132,200 21,000 -

319,932,694 319,932,694 278,182,202 178,050,002 178,050,002 178,050,002 178,050,002 178,050,002 178,029,002 178,029,002

ANNUAL REPORT 2014

3.2 Debentures Details of outstanding debentures as of 31 December 2014 are as follows; (A) Partially-collateralized debentures # 1/2012, (2) Specific name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment Early redemption Other significant condition Credit rating Trustee Registrar Secondary Market

: Partially-collateralized debentures of Property Perfect Public Company Limited #1/2012 (2), maturing in 2015 : Unsecured holder-bearing debentures with trustee : 2,000,000 units : 1,000 Baht : Bt 2,000 million : Public offering to the general public and institutional investors : 15 March 2012 : 3 years from issue date : 15 March 2015 : 5.35% per annum in 1st-2nd years and 6.25% per annum in 3nd year (Average 5.65 % per annum ) : 15 March, 15 June, 15 September and 15 December of every year throughout the debentures’ life. : Principal payment maturity date, 15 March 2015 : None : Debt to equity ratio must be maintained at no more than 2:1 : “BBB Stable” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited : Thanachart Bank Public Company Limited : Thai Bond Market Association

(B) Partially-collateralized debentures # 2/2012 Specific name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment Early redemption Other significant condition Credit rating Trustee Registrar Secondary Market

: Partially-collateralized debentures of Property Perfect Public Company Limited #2/2012, maturing in 2015 : Partially-collateralized debentures, holder-bearing debentures with trustee : 3,000,000 units : 1,000 Baht : Bt 3,000 million : Public offering to the general public and institutional investors : 9 November 2012 : 3 years from issue date : 9 November 2015 : Fixed 5.45% per annum : 9 February, 9 May, 9 August and 9 November of every year throughout the debentures’ life. : Principal payment maturity date, 9 November2015 : None : Debt to equity ratio must be maintained at no more than 2:1 : “BBB Stable” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited : Bank of Ayudhya Public Company Limited : Thai Bond Market Association

(C) Unsecured Debentures # 1/2013 Specific name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date

: Unsecured debentures of Property Perfect Public Company Limited #1/2013, maturing in 2015 : Holder-bearing, unsubordinated, unsecured debentures with trustee : 2,000,000 units : 1,000 Baht : Bt.2,000 million : Public offering to the general public investors : 28 June 2013 : 2 years from issue date : 28 June 2015

ANNUAL REPORT 2014

Interest rate Interest paym ent schedule Principal payment Early redemption Other significant condition Credit rating Trustee Registrar Secondary Market

: Fixed 6.05% per annum : 28 March, 28 June, 28 September and 28 December of every year throughout the debentures’ life. : Principal payment maturity date, 28 June 2015. : None : Debt to equity ratio must be maintained at no more than 2:1 : “BB+/Negative” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited : Bank of Ayudhya Public Company Limited : Thai Bond Market Association

(D) Short-term debentures # 1/2014 Specific name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Interest payment schedule Principal payment Early redemption Other significant condition Registrar

: Short-term debentures of Property Perfect Public Company Limited #1/2014(4), maturing on 14 September 2015 : Short-term unsecured unsubordinated holder-bearing debentures, without trustee : 2,000,000 units : 1,000 Baht : Bt 2,000 million : Offered to institutional investors and/or big-time investors : 18 December 2014 : 270 Days from issue date : 14 September 2015 : Fixed 4.95% per annum : Principal payment maturity date, 14 September 2015 : None : Debt to equity ratio must be maintained at no more than 2:1 : “BBB- Stable” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited

(E) Unsecured Debentures # 1/2014 Specific name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Principal payment Early redemption Other significant condition Credit rating Trustee Registrar

: Unsecured debentures of Property Perfect Public Company Limited #1/2014, maturing in 2016 : Holder-bearing, unsubordinated, unsecured debentures with trustee : 2,200,000 units : 1,000 Baht : Bt.2,200 million : Offered to institutional investors and/or big-time investors : 1 August 2014 : 1 year a half from issue date : 1 February 2016 : Fixed 5.80% per annum : Principal payment maturity date : None : Debt to equity ratio must be maintained at no more than 2:1 : â&#x20AC;&#x153;BB+â&#x20AC;? by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited : Bank of Ayudhya Public Company Limited

(F) Unsecured Debentures # 2/2014 Specific name Type No. of debentures Face value Issue size Offering method Issue date Maturity Maturity date Interest rate Principal payment Early redemption Other significant condition

: Unsecured debentures of Property Perfect Public Company Limited #2/2014, maturing in 2016 : Holder-bearing, unsubordinated, unsecured debentures with trustee : 2,400,000 units : 1,000 Baht : Bt.2,400 million : Offered to institutional investors and/or big-time investors : 1 October 2014 : 2 years from issue date : 1 October 2016 : Fixed 5.90% per annum : Principal payment maturity date : None : Debt to equity ratio must be maintained at no more than 2:1

ANNUAL REPORT 2014

Credit rating Trustee

: “BB+” by Tris Rating Co., Ltd. : Bank of Ayudhya Public Company Limited

Registrar

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The combined value of remaining debentures on 31 December 2014 is Bt13,600 million. 3.3 Bills (bill of exchange and promissory notes) As of 31 December 2014, the Company and subsidiaries own a total to Bt636.2 million through the issuance of bills of exchange which offer the interest rate of 4.70-4.80% per annum. They will come due within June 2015. As of 31 December 2014, the Company and subsidiaries own a total to Bt724.4 million through the issuance of promissory notes which carry the interest rate of 6.50-7.38% per annum or equivalent to the minimum overdraft rate (MOR). They will come due between March-June 2015. The promissory notes are backed by the pledging of land and buildings of the Company and subsidiaries. Aside, the Company also guaranteed the promissory notes of subsidiaries.

4. Dividend policy of the company and subsidiaries

The Board of Directors approved at the 5/2007 meeting a change in the dividend policy, which earlier set the dividend payout ratio at 50% of after-tax profits as approved by the shareholders meeting. The change followed the alteration in the accounting measure, which is based on the cost method rather than the equity method. The Company’s dividend payment ratio was changed to 50% of the non-consolidated net profits after legal reserves. The ratio is also set in accordance with the Company’s financial status, liquidity, investment plans and other factors related to the operations. The company’s subsidiaries have dividend payout policy of at least 50% of unconsolidated net profit after deducting legal reserve. Besides, financial position, liquidity, business expansion and other factors related to the company’s management are also taken into dividend payment consideration.

MANAGEMENT AND AUTHORIZED PERSON OF THE COMPANY Date 31 December 2014

Dr.Tawatchai Nakhata

Age 67

Chairman / Chief Executive Director / Authorized Signatory Directors Academic Qualifications

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Timing

Designation

1992 - Present 2008 - Present 2010 - Present

Chairman Property Perfect Public Company Limited Chief Executive Director Property Perfect Public Company Limited Independent Director Managing Director Khonburi Sugar Public Company Limited

2011 - Present

Chairman

Mr.Chainid Adhyanasakul

Company / Business Type

Property Perfect Public Company Limited Age 60

Chief Executive Officer/ Deputy Chief Executive Director/ Authorized Signatory Directors Academic Qualifications

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Designation

Company / Business Type

1985- Present

Chief Executive Officer/ Deputy Executive Director Director Director Director Director Director

Property Perfect Public Company Limited

2007 - Present 2007 - Present 2002 - Present 1999 - Present 1995 - Oct. 2010

Bright Development Bangkok Co., Ltd. / Property Development Centrepoint Shopping Mall Co., Ltd. / Property Development Krungthep Land Public Company Limited / Property Development Estate Perfect Company Limited / Property Development Thai Property Public Company Limited / Property Development (Formerly known as “Rattana Real Estate Public Company Limited”)

ANNUAL REPORT 2014

Mr.Virayuk Puntupetch

Age 68

Deputy Chairman / Independent Director / Chairman of Nominating and Remuneration Committee Academic Qualifications

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Equity Holding 0.000% Career experience within the past 5 years Timing

2014 - Present

Designation

Chairman of Nominating Remuneration and Committee2/ May 2010 - Present Deputy Chairman May 2010 - June 2014 Chairman of Remuneration Committee2/ 2007 - April 2010 Chairman of Audit Committe 2007 - Present Director / Independent Director 2006 Retired Government officer 2005 - 2006 Advisor to the Prime Minister of Government Officials in Charge of International Trade Affairs and Chief of Thai Trade Representative. 2004 Advisor to the Prime Minister of Government Officials 2000 - 2004 Inspectors-General 2000 - 2004 Director 1998 - 2000 Deputy Director 2000 Director 1996 - 2000 1994 - 1998 1994 1989 1986 1979 - 1980

Company / Business Type

Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited The Secretariat of the Prime Minister Office The Secretariat of the Prime Minister Office

The Secretariat of the Prime Minister Office

Ministry of Finance Vayupak Fund Fiscal Policy Office Office of General Administration for 33rd Annual Meeting of the Board of Governors of Asian Development Bank Deputy Director Office of the Neighboring Countries Economic Development Cooperation Fund Specialist Expert for Debt Management Fiscal Policy Office Director Saving & Investment Policy Division, Fiscal Policy Office Director Capital Market Development Policy Division, Fiscal Policy Office Director Financial and Financial Institution Policy Division, Fiscal Policy Office Assistant to Country Executive World Bank - Washington DC, USA Director of SEA Group

Dr.Somsak Toruksa

Age 63

Director / Independent Director / Audit Committee Academic Qualifications

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1998 - Present 1993 - Present 2010 - June 2014

Designation

Company / Business Type

Director / Independent Director / Audit Committee Managing Director Chairman of Nominating Committee2/

Mr.Vidhya Nativivat

Property Perfect Public Company Limited Somsak Toruksa Law Office Co., Ltd. / Law Property Perfect Public Company Limited

Age 60

Non Executive Director / Nominating and Remuneration Committee Academic Qualifications

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Equity Holding 1.397% Career experience within the past 5 years Timing

June2014 - Present 2004 - Present 1986 -.Present 2004 - June 2014

Designation

Company / Business Type 2/

Nominating and Remuneration Committee Non-Executive Managing Director Nominating Committee / Remuneration Committee2/

Property Perfect Public Company Limited Property Perfect Public Company Limited Bunchong and Vidhya Law Office Ltd. / Law Property Perfect Public Company Limited

ANNUAL REPORT 2014

Dr.Thamnoon Ananthothai Age 57

Director / Independent Director / Audit Committee /Risk Management Committee Academic Qualifications

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2010 - Present 2005 - Present 2008 - Present 2007 - Present 2007 - Present 2004 - Present 2001 - Present 2001 - Present 1997 - Present 2006 - 2013 2005 - 2011 2002 - 2003 1998 - 2002

Designation

Risk Management Committee Director / Independent Director / Audit Committee Director / Audit Committee Vice Chairman/Chairman of Audit Committee Deputy Vice Chairman / Chairman of the Audit Committee Executive Director Executive Board Member / Sub-Committee Director of The Investment Management Sub-Committee Director of Economic Sector Sub-Committee Director / Chairman of the Audit Committee Director / Audit Committee Dean of College of Business Administration Managing Director/ President & CEO

Mr.Phairat Senachack

Company / Business Type

Property Perfect Public Company Limited Property Perfect Public Company Limited Bangkok University / University Better World Green Public Company Limited IFS-Capital (Thailand) Public Company Limited Merchant Partners Securities Limited Clearing House of The Agricultural Futures Exchange of Thailand The National Social Security Fund. The Federation of Thai Industries. Eastern Printing Public Company Limited Ua Withaya Public Company Limited Dhurakij Pundit University / University DBS Thai Danu Securities Limited / Securities

Age 65

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Designation

Company / Business Type

2011 - Present

Director /Executive Director / Consultant of Chief Executive Officer Director / Executive Director / Deputy Chief Operating Officer

Property Perfect Public Company Limited

1996 - 2010

Property Perfect Public Company Limited

Mr.Ooi Boon Aun Age 56 Non-Executive Director / Nominating and Remuneration Committee Academic Qualifications

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Designation

Company / Business Type

June2014 - Present 2008 - Present 2007 - Present 2010 - Present 2004 - 2006 1996 - 2006

Nominating and Remuneration Committee Non-Executive Director Financial & Management Consultancy Managing Director Managing Director Honorary Counsel

2003 - 2004 1998 - 2003

Executive Director Group Vice Chairman and President

Mrs.Nuanual Swasdikula-Na-Ayudhaya

Property Perfect Public Company Limited Property Perfect Public Company Limited East Asset Alliance Limited.(â&#x20AC;&#x153;EAALâ&#x20AC;?) QIAN Investment Holding Pte. Depfa Investment Bank Ltd, Hong Kong. Republic of Cyprus in Special Administrative Regions, Hong Kong, China. The Group Subsidiary of Standard Bank Asia Ltd. TCC. Business Group (Thai Beverage Group and Companies)

Age 65

Director / Independent Director / Chairman of Risk Management Committee Academic Qualifications

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Designation

Company / Business Type

2009 - Present

Director / Independent Director / Chairman of Risk Management Committee Nominating Committee2/ Executive Vice President Senior Manager for Commercial Finance and Construction Finance Commercial Finance Manager Industrial and Commercial Finance Manager Business Development Manager

Property Perfect Public Company Limited

2010 - June 2014 1996 - 2008 1994 - 1996 1992 - 1994 1991 - 1992 1990 - 1991

Property Perfect Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited

ANNUAL REPORT 2014

Mr.Krish Follett

Age 65

Director / Independent Director / Chairman of Audit Committee Academic Qualifications

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Equity Holding 0.000% Career experience within the past 5 years Timing

Designation

Company / Business Type

2010 - Present

Director/ Independent Director / Chairman of Audit Committee Remuneration Committee2/ Independent Director / Chairman of Audit Committee / Chairman of Risk Management Committee Director/ Independent Director/ Audit Committee Director/ Independent Director/ Audit Committee Director/ Independent Director/ Chairman of Risk Management Committee Director/ Independent Director/ Chairman of Audit Committee Assistant Governor, Operation Division Senior Director of Internal Audit Department Senior Director of Audit 1 Dept. for Finance Control 1 Division Director of Reorganization Department Director of Operation Division, Northeastern Region Office Assistant Director of Electronics Financial Transactions Center Assistant Director of Northern Region Office Establish Unit Director of Capital Market Audit Division Chief of Special Department in Financial Institution Supervision in Practice

Property Perfect Public Company Limited

2010 - June 2014 2012 - Present 2012- Present 2011- Present 2011 - Present 2010-2012 2008 -2009 2004 - 2008 2002 - 2004 2000 - 2002 1998 - 2000 1996 - 1998 1995 - 1996 1992- 1995 1991- 1992

Property Perfect Public Company Limited Thoresen Thai Agencies Public Company Limited Sahaphatthana Inter Holding Public Company Limited Thanulux Public Company Limited Thai Wacoal Public Company Limited. Amanah Leasing Public Company Limited Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Security and Exchange Commission Bank of Thailand

Ms.Sirirat Wongwattana

Age 53

Director / Executive Director / Act for Chief Supporting Officer / Deputy Chief Supporting Officer / Authorized signatory directors Academic Qualifications

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Equity Holding 0.000% Career experience within the past 5 years Timing

Designation

Company / Business Type

2014 - Present

Property Perfect Public Company Limited

2000 - 2003 1999 - 2000

Director/ Executive Director& Secretary of Executive / Chief Financial Officer / Act for Chief Supporting Officer Director/ Executive Director& Secretary of Executive / Act for Chief Supporting Officer / Deputy Chief Supporting Officer Director/ Executive Director& Secretary of Executive / Assistant Chief Business Development Officer Director of Investor Relation & Information System Division Head of Research Sub- Marketing Director

1998-1999

Asst. Director of Provident Fund Dept.

2011 - 2014 2008 - 2010 2003 - 2007

Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited BFIT Securities Limited / Securities BOA Asset Management company limited / Securities Bank of Asia Public Company Limited / Securities

Mr.Pramote Rermyindee Age 61

Company Secretary Academic Qualifications

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Designation

Company / Business Type

1998 - Present 1992 - Present 1994 - 1997 1993

Company Secretary Partner Manager Executive Director Executive Director

Property Perfect Public Company Limited Ordinary Partnership, Thammathit Law Office / Law Sapthamrong Securities Limited / Financial Institution Sri Nakorn Credit Foncier Limited / Financial Institution

ANNUAL REPORT 2014

Ms.Supee Reodacha

Age 55

Executive Director / Act for Chief Financial Officer / Deputy Chief Financial Officer Academic Qualifications

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Designation

2011 - 2015

Executive Director / Act for Chief Financial Officer/ Property Perfect Public Company Limited Deputy Chief Financial Officer Asst. Chief Financial Officer Property Perfect Public Company Limited Executive Director / Finance & Treasury Director Property Perfect Public Company Limited

2008 - 2010 2002 - 2008

Mr.Wicharn Siriwetwarawut

Company / Business Type

Age 54

Executive Director / Act for Chief Operating Officer 1 / Deputy Chief Operating Officer 1 Academic Qualifications

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Designation

Company / Business Type

2014 - Present

Executive Director / Chief Operating Officer 1 Asst. Chief Operating Officer Executive Director / Act for Chief Operating Officer 1 / Deputy Chief Operating Officer 1 Asst. Chief Operating Officer Managing Director Managing Director Managing Director Managing Director

Property Perfect Public Company Limited

2011 - 2014 2003 - 2010 1995 - 2003 2014 - Present 2014 - Present 2014 - Present

Property Perfect Public Company Limited Property Perfect Public Company Limited Baanpan Engineering & Holding Co., Ltd. Estate Perfect Co., Ltd. Residence Number Nine Co., Ltd. Perfect Prefab Co., Ltd.

Mr.Pornswat Katechulasriroj

Age 48

Executive Director / Act for Chief Operating Officer 2 / Deputy Chief Operating Officer 2 Academic Qualifications

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Designation

Company / Business Type

2014 - Present 2010 - 2014

Executive Director / Chief Operating Officer 2 Executive Director / Act for Chief Operating Officer 2/ Deputy Chief Operating Officer 2 Managing Director/ Chief Operating Officer 2 Director / Act for Chief Operating Officer 2 Deputy Chief Business Development Officer2 Director / Act for Chief Operating Officer 2/ Deputy Chief Operating Officer 2 Director / Asst. Chief Operating Officer 2 Director of Research and Business Development Supervision

Property Perfect Public Company Limited Property Perfect Public Company Limited

2014 - Present 2010 - 2014 2011 - Present 2009 -2010 2008 - 2009 2014 - Present

Mr.Wongsakorn Prasitvipat

Bright Development Co., Ltd. Bright Development Co., Ltd. Estate Perfect Co., Ltd. Estate Perfect Co., Ltd. Property Perfect Public Company Limited U&I Construction Bangkok Co., Ltd.

Age 54

Executive Director / Act for Chief Business Development Officer / Deputy Chief Business Development Officer Academic Qualifications

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Designation

2014 - Present 2011- Present

Executive Director / Chief Business Development Officer Property Perfect Public Company Limited Executive Director / Act for Chief Business Development Property Perfect Public Company Limited Officer / Deputy Chief Business Development Officer Asst. Chief Operating Officer Property Perfect Public Company Limited Director of Design & Project Development Division Property Perfect Public Company Limited Managing Director Chiang Mai Development Co., Ltd.

2008 - 2010 1993 - 2007 2014 - Present

Company / Business Type

ANNUAL REPORT 2014

Mr.Surasak Vacharapongpreecha

Age 51

Asst. Chief Financial Officer Academic Qualifications

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Timing

Designation

Company / Business Type

2014 - Present 2010 - 2014 2013- 2014 2005 - 2009

Deputy Chief Financial Officer Asst. Chief Financial Officer Company Director Accounting Division Deputy Director

Property Perfect Public Company Limited Property Perfect Public Company Limited Bright Development Co., Ltd. Property Perfect Public Company Limited

Prof.Dr.Suchatvee Suwansawat 1/ Age 42 Director / Executive Director Academic Qualifications

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Equity Holding 0.082% Career experience within the past 5 years Timing

Designation

Company / Business Type

Present Present Present

Director / Executive Director Dean of College of Engineering President of the Association of Engineering Institute of Thailand (EIT) Director of Board of Investment of Thailand President of National Housing Authority Director Chairman of the Airport Rail Link monitoring committee

Property Perfect Public Company Limited King Mongkutâ&#x20AC;&#x2122;s Institute of Technology Ladkrabang The Association of Engineering Institute of Thailand (EIT) Board of Investment of Thailand National Housing Authority SRT Electrified Train Co., Ltd. (Airport Rail Link)

2011- Present 2012 - 2013 2010 - 2011 2009 - 2010

Note : 1/ The Board of Directors at the 4/2014 meeting on 16 June 2014 appointed Prof. Dr. Suchatvee Suwansawat as an independent director, replacing Mr. Anuwat Maytheewibulwut. Mr. Anuwat submitted his resignation on 15 February 2014. 2/ The Board of Directors at the 4/2014 meeting on 16 June 2014 approved the consolidation of the Nomination Committee and the Remuneration Committee into a one committee, the Nomination and Remuneration Committee, effective on 17 June 2014.

DETAILS OF POSITIONS Details of directors, executive directors and directors of Property Perfect Plc., subsidiary company and affiliates as of 31 December 2014. Company ‘s name Name

Associated Company

Subsidiary Company

Company

Center EP BD R9 CD WR Point RM P-PREFAB PSC PPI KRH KA KLAND1/

1. Dr.Tawatchai Nakhata X, XXX 2. Mr.Virayuk Puntupetch *, XX 3. Mr.Chainid Adhyanasakul /, //, /// 4. Mr.Phairat Senachack /, //, /// 5.Dr.Somsak Torukraksa *, / 6.Dr.Thamnoon Ananthothai *, / 7. Mr.Vidhya Nativivat / 8. Ms.Sirirat Wongwattana /, //, /// 9. Mr.Ooi Boon Aun *, / 10. Mrs.Nuanual Swasdikula-Na-Ayudhaya *, / 11. Mr.Krish Follett *, / 12. Mr.Pramote Rermyindee @ 13. Ms.Supee Reodecha //, /// 14. Mr.Wicharn Siriwetwarawut //, /// 15. Mr.Pornswat Katechulasriroj //, /// 16. Mr.Wongsakorn Prasitvipat //, /// 17. Mr.Surasak Vacharapongpreecha /// 2/ 18. Prof.Dr.Suchatvee Suwansawat *, / Note :

/ / /

/ /

/ / /

The Board of Directors at the meeting on 6 November 2014 resolved to sell all shares in Krungthep Land to Golden Land Property Development. The decision requires the approval of Golden Land’s shareholders at the meeting on 9 December 2014.

The Board of Directors at the 4/2014 meeting on 16 June 2014 appointed Prof.Dr.Suchatvee Suwansawat as a director and independent director, replacing Mr. Anuwat Maytheewibulwut who resigned on 15 February 2014. PF = Property Perfect Public Company Limited BD = Bright Development Bangkok Company Limited CD = Chiang Mail Development Co., Ltd. Center Point = Centre point Shopping Mall Company Limited P-PREFAB = Perfect Prefab Co., Ltd. PPI = Property Perfect International Pte.Ltd. KA = Kabushiki Kaisha Kiroro Associates Co., Ltd.

EP R9 WR RM PSC KRH

= Estate Perfect Company Limited. = Residence Number Nine Co., Ltd. = We Retail Public Company Limited. = Ramintra Mall Co., Ltd = Perfect Sport Club Co., Ltd. = Kiroro Resort Holding Co., Ltd.

x xxx / ///

xx * // @

= Deputy Chairman = Independent Director = Executive Director = Company Secretary

= Chairman = Chief Executive Director = Director = Executive

ANNUAL REPORT 2014

EXECUTIVES’ REMUNERATION 1. Financial Benefits The company has in place a committee to consider remunerations. The committee is responsible for drafting the policy and criteria for the remuneration of chief executive officer, directors, and the company’s advisors. It also takes charge in setting the annual pay increase and interim salary adjustment, as well as other benefits to reward the contribution from executives and employees. Under its responsibility is also the regulations on employment, code of conduct and appropriate and fair punishment clauses. A.) Director remuneration Meeting allowances and director fees paid out by the company in 2014 as follows:

Dr.Tawatchai Nakata Mr.Virayuk Puntupetch *

Chairman / Chief Executive Director Deputy Chairman / Chairman of Nomination and Remuneration Committee Mr.Chainid Adhyanasakul Director / Deputy Chief Executive Director and Chief Executive Officer Dr.Somsak Toruksa * Director / Audit Committee Dr.Thamnoon Ananthothai * Director / Audit Committee / Risk Management Committee Mr.Phairat Senachak Director / Executive Director Mr.Vidhya Nativivat Director / Nomination and Remuneration Committee Ms.Sirirat Wongwattana Director / Executive Director Mr.Ooi Boon Aun Director / Nomination and Remuneration Committee Mrs.Nuanual Swasdikula-Na Director/ Chairman of -Ayudhaya * Risk Management Committee

0.35

0.30 0.20

0.24 0.18

0.10 -

0.24

0.35 0.35

0.03

0.06

0.35 0.30

0.35

0.06

0.40

Risk Management Director

0.05

Nomination and Remuneration director1/

Nomination Director1/

0.70 0.49

Remuneration director1/

Position

Audit director

Name

Director

Executives’ remuneration (Million Baht) Meeting allowances in 2014

Remuneration director1/

Nomination Director1/

0.40 0.82

0.03 0.11

0.22

Position

Risk Management Director

Audit director

Mr.Krish Follett * Director/ Chairman of Audit Committee 0.35 2/ 0.10 Prof.Dr.Suchatvee Suwansawat * Director Mr.Boonliam Luangnakthongdee Risk Management Committee Mr.Chirdsak Kukiattinun Risk Management Committee Total 4.19

Name

Nomination and Remuneration director1/

Director

Executives’ remuneration (Million Baht) Meeting allowances in 2014

0.24 0.24 1.12

Note ( Some directors, aside from meeting allowance, are receiving salaries as executives and members of the Executive Board) * Director 1/

The Board of Directors at the 4/2014 meeting on 16 June 2014 approved the consolidation of the Nomination Committee and the Remuneration Committee into a one committee, the Nomination and Remuneration Committee, effective on 17 June 2014.

The Board of Directors at the 4/2014 meeting on 16 June 2014 appointed Prof. Dr. Suchatvee Suwansawat as an independent director, replacing Mr. Anuwat Maytheewibulwut. Mr. Anuwat submitted his resignation on 15 February 2014 due to other obligations that prevented him from maintaining the directorship.

B.) Directors and Executives’ Remuneration in 2014 In 2014, the company’s remuneration for 10 Executive Directors and executives, consisting of salary and bonus, totaled Bt47.22million and Bt.9.20 million, respectively. Note: *To conform with the past disclosure of financial remuneration of executives, the word “executives” include accounting or finance managers.

2. Other payments to directors

-NoneOther payments to executives Consisting of welfare, social security fund, and contribution to the provident fund paid by the company and employees at the rate of 3-10% of salary. In 2014, The remunerations for 10 Executive Directors and executives paid by the company total Bt. 0.14 million and Bt.4.42 million, respectively.

ANNUAL REPORT 2014

CORPORATE GOVERNANCE Corporate Governance Policy

The Board of Directors recognized the value of good corporate governance, in enhancing transparency, the company’s competitiveness, trust from shareholders, investors and other stakeholders, and the long-term business merits. Stakeholders and society’s benefits were taken into account. The company has applied the governance guidelines of the Securities and Exchange Commission and the Stock Exchange of Thailand, which are in line with the OECD Principles of Corporate Governance, in the following elements.

Section 1: Shareholders’ rights

The Board of Directors emphasized shareholders’ rights and ensured equitable treatment to all, as prescribed in the company’s rules and regulations and relevant laws. Shareholders hold the rights to attend annual meetings, the rights to appoint their proxy to vote at the meetings, the rights to vote on the appointment or removal of individual directors, the rights to cast votes in significant matters, the rights to dividend, the rights to raise opinions and questions at the meetings, and the rights to sufficient and timely information. The Board sets the annual shareholder meeting (AGM) once a year, within 4 months after the end of each accounting year. If necessary, an extraordinary shareholder meeting will be called where shareholders can vote on issues which could affect their interests, or legal issues which need shareholders’ approval. In organizing the AGM, the Board puts forward the shareholders’ rights. Invitation containing agenda in details and the Board’s opinions was dispatched at least 15 days prior to the meeting date, with the proxy form, the list of independent directors and proxy advice. With timely information, shareholders can make decisions prior to the meeting date or could appoint independent directors as their proxy. The AGM was published in daily newspapers for at least 3 consecutive days and at least 3 days ahead of the meeting. The meeting details and agenda were also posted on the company’s website 30 days before the meeting, so that shareholders or investors can submit their questions in advance. During the meeting, the Board facilitates shareholders’ attendance and voting, and refrains from any actions which will limit their attendance. All shareholders are given full freedom to raise their questions and opinions.

100

Section 2: Equitable Treatment to Shareholders

The company values equitable shareholder treatment. Shareholdersâ&#x20AC;&#x2122; rights are covered in the corporate governance policy and all are treated in a fair manner through these measures: w 7KH SURFHVV WR RUJDQL]H $*0 LV WUDQVSDUHQW DQG HIILFLHQW LQ OLQH ZLWK WKH FRPSDQ\tV UXOHV DQG UHJXODWLRQV DQG relevant laws. Shareholders are given fair chance to raise opinions and questions, with sufficient time allocation. w 6KDUHKROGHUV DUH DVNHG WR UHYLHZ DQG YRWH RQ GLUHFWRUV RQ WKH LQGLYLGXDO EDVLV DQG WR DSSURYH WKH GLUHFWRUVt UHPXQHUDWLRQ auditorâ&#x20AC;&#x2122;s appointment, auditor fee and other agenda as described in the meeting invitation. w %DOORWV DUH LVVXHG IRU DOO DJHQGD w 6KDUHKROGHUV FXP H[HFXWLYHV DUH EDUUHG IURP SURSRVLQJ H[WUD DJHQGD ZLWKRXW QRWLI\LQJ RWKHUV LQ DGYDQFH VR WKDW DOO shareholders have sufficient time in reviewing details of each agenda. w 6KDUHKROGHUV ZKR FDQQRW DWWHQG WKH PHHWLQJ FDQ DSSRLQW LQGHSHQGHQW GLUHFWRUV RU RWKHU SHUVRQV DV WKHLU SUR[\ who will cast votes on behalf of them. The companyâ&#x20AC;&#x2122;s proxy form is designed to allow shareholders to state their voting opinions. w 7KH PHHWLQJ LV WKRURXJKO\ UHFRUGHG 7KH PHHWLQJ PLQXWHV FRQWDLQ DOO VLJQLILFDQW LQIRUPDWLRQ OLNH WKH UHVROXWLRQV DQG votes, questions, explanations and opinions raised. w 0HDVXUHV DJDLQVW LQVLGHU WUDGLQJ DPRQJ GLUHFWRUV DQG H[HFXWLYHV DUH LQ SODFH $OO PXVW UHSRUW WKHLU VKDUHKROGLQJ DV well as the holdings of spouses and under-aged children. They must report on any change in the shareholdings, after acquisition, disposal or transfer, to the Securities and Exchange Commission under the Securities and Exchange Act BE2535â&#x20AC;&#x2122;s Article 59, within 3 days after the acquisition, disposal or transfer. w ,Q SODFH DUH WKH PHDVXUHV DQG SURFHGXUH LQ DSSURYLQJ WUDQVDFWLRQV ZLWK SRVVLEOH FRQIOLFW RI LQWHUHVW RU FRQQHFWHG transactions, with full compliance with the Stock Exchange of Thailandâ&#x20AC;&#x2122;s regulations on connected transactions, for the equitable benefits of shareholders. Moreover, the Audit Committee also thoroughly screened connected transactions and transactions with possible conflict of interest, before submission to the Board, as required by the SET.

101

ANNUAL REPORT 2014

Section 3: Stakeholders’ rights

The company realizes the significance of all stakeholders - shareholders, employees, customers, competitors, creditors (suppliers and contractors), relevant government agencies, society and environment. The policies are geared towards fairness to all groups of stakeholders as follow: Shareholders The company is concerned about transparency in important information disclosure to all shareholders accurately, completely and timely through channels including the SET’s electronic media, the company’s website, announcement in newspapers, press releases and written notices. Employees The company, through the Remuneration Committee, provides the appropriate pay structure for employees, as well as the systematic promotion process for fairness to all. A manual is issued to all employees, notifying them all of eligible welfares. The provident fund is in place for all employees. Customers The company has determined to not only quality construction but also code of conducts by taking care and responsible for customers, offering quality and standard services, and solving customer complaints or providing advices as the earliest. Competitors The company has adhered to good competition rules and avoided dishonest practices to destroy competitors. Creditors Product distributors The company has a clear period for placing invoice and check payment after handing over/inspecting works, informs contractors before they are hired and proceed payment to be in line with regulations strictly to ensure confidence of creditors. Contractors The company has a criteria for contractor selection to have efficient contractors and offer them equal opportunity. The company has set fair price as the reference. Even though prices of some items are greater than agreed prices, the company can maintain the average price on par with the market price. Occasionally, the company has taken degree of difficulty of working condition into account for pricing and authorised each hiring sub-committee to consider the matter properly based on objectives and success in transparent procurement. To ensure contractors’ confidence and let them growth along with the company, the company has stated the clear construction progress and fair construction payment installment, inspection, and invoice placing in agreements with contractors for equal treatment, and set payment period in compliance with the company’s regulations.

102

Section 4: Information Disclosure and Transparency The Board puts emphasis on information disclosure and transparency, with sufficient information released to all stakeholders and measures to ensure the disclosure of accurate, complete and credible information in a timely manner for equal access. Key financial information is sufficiently disclosed in the financial statements, in line with the regulations. They are disclosed via the SET system and the company’s website. The financial statements are reviewed/audited, with unconditional opinions from the auditor and the Board’s approval before the release to shareholders. The Board also expresses its responsibility for the financial statements in the annual report. The company discloses significant financial and non-financial information through the SET system and the company’s website, for accurate, complete, equitable, fair, transparent and timely dissemination to the general public. The Investors Relations and Information Technology Unit is in charge of the dissemination and communicate with local and foreign shareholders, investors, stock analysts accurately, equitably and timely. Investors can contact the Investor Relations Unit for the company’s information at Tel: 0-2247-7500, Fax: 0-2247-7399, e-mail: santirak@pf.co.th, or www.pf.co.th/ir. The Board discloses its role and scope of responsibility as well as those of sub-committees, as well as the number of meetings each director attended under item “Management”. Remuneration of the directors and top executives are shown in item “Directors’ Remuneration”. The company has pursued the Stock Exchange of Thailand’s rules and regulations governing connected transactions or acquisition and disposal of assets of listed companies, whichever is the case. Besides the company has set policies and guidelines to prohibit executives and related persons from using inside information for their own interests. The company has regarded an importance of efficient internal control system for both executives and operational levels. Practices of operational staff and executives are determined and clearly written. The company has set up an internal audit office to exclusively take responsible for efficient operational examination. The internal audit reports the result directly to the Audit Committee.

103

ANNUAL REPORT 2014

5. Board of Director’s Responsibility Board of directors’ structure The company requires independent directors account for at least one third of all directors, or at least 3. At present, the company’s board of directors consists of 12 experienced, knowledgeable and capable directors as follows: -

Executive Director

4 persons

Non-executive director

1 persons

Independent Director

7 persons

The chairman does not serve as the CEO, to segregate their supervisory and executive roles. All directors possess full independence in giving opinions. Much emphasis is placed on the opinions of the independent directors. In any issue that draws any suggestions or disagreement from independent directors will be reviewed for transparency. The Board abides by the minimum requirements of the SEC and SET in formulating independent directors criteria. 1. They must hold no more than 1% of all voting shares in the company, subsidiaries, affiliates, or in the companies which are major shareholders or have controlling power over the company. The shareholding includes that of those related to the particular independent director. 2. They must not have been or are not involved in the management, or employees, wage earners, or advisors on the payroll, or controlling persons of the company, its subsidiaries, affiliates, or equivalent companies, or juristic persons now and at least 2 years before their appointment as independent directors. Former civil servants for advisors of government agencies which are major shareholders or controlling persons are not included. 3. They are not related by blood or registration as parents, spouses, siblings, or children, spouses of any of the children to members of the management, major shareholders, those exercising control, or those about to be nominated as members of the management or controlling entities over the company or subsidiaries. 4. Have absolutely no vested interests in the company, its subsidiaries, affiliates, or major shareholders or controlling entities of the company, which could obstruct their independent judgment. They are not either a significant shareholder or a controlling shareholder who has business relationship with the company, subsidiaries, affiliates now and at least 2 years before their appointment. 5. They do not serve as the auditor of the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant shareholder (with over 10 per cent of voting shares including connected persons’) of the company, controlling entities, or a partner of the audit firm of which auditors perform their jobs on the company, subsidiaries, affiliates, the parent companies or controlling entities at least 2 years before their appointment

104

6. They do not serve as a professional service provider, including legal or financial services of which fees more than Baht2 million per year are levied on the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant, controlling shareholder or a partner of the professional service provider at least 2 years before their appointment. 7. They are not appointed to represent the directors of the company, major shareholders, or shareholders who are related to major shareholders. 8. They do not operate a company with the similar nature to and significant competition with the company, subsidiaries or affiliates, or hold a significant ownership in a partnership or act as a director with management power, employees, wage earners and advisor on payroll, or hold over 1% of voting shares of other companies which operate in the same industry or present significant competition against the company or subsidiaries. 9. Have no other characteristics that could bar the expression of their free views on the company’s operations. The company’s management structure consists of the Board of Directors, four sub-committees reporting to the Board of Directors - the Audit Committee, the Nomination Committee, and the Remuneration Committee, the Risk Management Committee and the executive committee. (Details of the Board of Directors and the sub-committees, concerning names and responsibilities, are shown in “Management Structure”) Responsibilities of the Board of Directors The Board consists of knowledgeable, capable, skilled and experienced persons who realize their roles and responsibilities, which resulted in efficient operations. The Board takes part in formulating the vision, mission, strategies, goals, business plans and resource allocation, to ensure the management’s efficient and effective implementation. The Board values good corporate governance, to enhance transparency and the company’s competitiveness. To instill trust among shareholders, investors and all stakeholders, there is the written corporate governance policy which is reviewed once a year to fit the environment, business direction and international standards. The Code of Conduct is in place so that employees perform in accordance with the corporate governance policy. To prevent conflicts of interest or connected transactions, the Board assigned sub-committees with clear segregation of roles. There are policies, code of practices and the procedure to approve transactions which might carry conflict of interest, as guidelines to executives, employees and relevant parties. Such cover the criteria in endorsing connected transactions, the use of inside information and information disclosure. The Board also demands the management to regularly assess business risks and formulate risk preventing and mitigation measures, and report them to the Board. These include the risks that may affect the company’s performance, as specified in item “Risk Factors”.

105

ANNUAL REPORT 2014

Board Meetings The Board holds quarterly meetings, aside from extra meetings as necessary, with clear and prepared agenda, to review the quarterly results as well as monitor progress. The chairman and CEO will jointly review the issues, before brining them up to the Board’s meetings. Each director is allowed to propose their own agenda. In each meeting, the chairman allocates sufficient and ample time for discussion. Meeting minutes are written and the minutes, approved by the Board, are stored for inspection by the Board and relevant parties. The minutes of the board of directors and sub-committees in 2009 are in “Management” Section. Board of Directors’ self assessment Executive directors conduct a quarterly evaluation to assess performance in part of their responsibility and the performance evaluation is presented to the company’s Board of Directors to compare with performance in the past. Remuneration The company has appointed the Remuneration and Human Resource Committee to consider remuneration principles and policies for Chief Executive Officer, directors and advisors and determine bonus, salary adjustment annually and during the year, and other benefits to staff in each level. Remuneration determination is based on experience, duty and scope of responsibility, and compare with other companies in the same industry (see details in heading remuneration of directors and management). Directors and Management improvement The company is concerned about the importance of Directors and Management improvement for management succession in the future.The company is aware of the importance of human resources in management level by organizing training “Real Estate Business Management”, contents of which include real estate knowledge, law, finance, accounting and good corporate governance to prepare the company’s high-level executives for being directors in the future. For the company’s directors, they participated in trainings held by Thai Institute of Directors and aimed to develop and support directors to take practices of good corporate governance in organization.

106

107

Note: *Sale Road space in the Company’s projects.

- The company’s employees (Mr.Wason Srirattanapong and Mr.Kritpas Pongpakawat) are directors.

Subsidiary Estate Perfect Company Limited (EP) Relationship : - The company holds 100%. - The company’s executives (Mr.Wicharn Siriwetwarawut, Ms.Sirirat Wongwattana) are directors.

Legal Entity / Relationship

Interest

Loans

Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Extra (repayment) 31 Dec Revenue from Land Sale Cost of Land

»ßÎÛàÎÐáÖÜÛ/

1.Transactions of the company with subsidiarie

CONNECTED TRANSACTIONS

1,101.58 235.00 (926.31) 410.27 15.58 29.43 (43.69) 1.32 -

410.27 155.00 (319.07) 246.20 1.32 12.57 (10.94) 2.95 0.11* 0.02

The Company loaned to EP, wholly-owned subsidiary, for land purchase, project development and working capital, charging the interest of 25-1.50 basis points above the Company’s average financial cost. Audit Committee’s comment Necessary financial assistance to a subsidiary. The interest charge, 25-150 basis points per annum above the Company’s average financial cost, is reasonable.

Pricing policy

45.49 65.69 (95.60) 15.58 - The Company sold land on which roads inside its development projects are located to EP. Transferring the ownership to EP, the Company, as - the project developer, needs not transfer the land for public use. Such transfer is a normal practice among property developers. Audit Committee’s comment 1) The transaction benefits the Company’s operations, deemed normal among property developers. 2) The Company and the subsidiary jointly agreed on the price.

945.98 630.00 (474.40) 1,101.58

Amount (Million Baht) 2014 2013 2012

108

Bright Development Bangkok Company Limited (BD) Relationship : - The company holds 100%. - The company’s executives (Mr.Pornswat Katechalasrirot and Ms.Sirirat Wongwattana) are directors - The company’s employees (Mr.Nantachart Kliebphipat) is a director.

Estate Perfect Company Limited (EP) (Continued)

Legal Entity / Relationship

Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Extra (repayment) 31 Dec

Amount

Guarantee

Loans

Other income

Installing curtains

»ßÎÛàÎÐáÖÜÛ/

1,206.71 1,090.00 (584.10) 1,712.61 19.79 81.13 (95.89) 5.03

5.03 91.67 (90.95) 5.75

3,944.64

1,712.61 270.00 (299.05) 1,683.56

3,178.20

0.13

Pricing policy

The Company loaned to wholly-owned BD, for land purchase, project development and working capital, charging the interest of 25-1.50 basis points above the Company’s average financial cost Audit Committee’s Comment Necessary financial assistance to a subsidiary. The interest charge, 25-150 basis points per annum above the Company’s average financial cost, is 28.80 reasonable. 57.76 (66.77) 19.79 855.15 785.00 (433.44) 1,206.71

2,102.64 The Company guaranteed a loan from financial institutions to a subsidiary, without charging any fee. Audit Committee’s Comment Reasonable transaction, to support the operations of a subsidiary which must comply with the financial institutions’ lending criteria.

- The Company hired a contractor for curtain installation in EP’s show houses, and charged EP at cost. Audit Committee’s Comment Normal business transaction, completed at cost

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

109

Bright Development Bangkok Company Limited (BD) (Continued)

Legal Entity / Relationship

0.19 1.50

Other income Debtor

Creditors

Amount

Electrical and water bill

Advance payment for land purchase

Advance payment on operating expense

Guarantee

4,170.76

1.52 0.93

Land leasing Revenue from leasing debtor

»ßÎÛàÎÐáÖÜÛ/

5,819.74

0.95

1.50

0.02

0.12 0.14

Pricing policy

- The Company leased BD space in the dormintory which serves as BD’s office for projects located nearby (Salaya), as BD sold the dormitory - sale building to Uniloft Property Fund and the Company leased the project from the fund. Audit Committee’s Comment 1) Normal business transaction to support the subsidiary’s operations 2) The jointly-agreed fee is comparative to market rate. - The Company charged BD for the utilities service fees at cost. Audit Committee’s Comment Normal business transaction, settled at cost 1.50 The Company transferred advanced payment for land plot to BD, which developed the land plot, to meet the project financier’s criteria at the time. The amount was transferred at cost. Audit Committee’s Comment 1) The transaction was to support the subsidiary’s operations and in line with the lending institutions’ criteria. 2) Transaction at cost - BD made advance payment on marketing promotion expenses to the Company. Audit Committee’s Comment 1) Actual transaction. 2) The fee was at cost. 5,018.58 The Company guaranteed a loan from financial insitutions to a subsidiary without charging fee. Audit Committee’s Comment Reasonable transaction, to support the operations of a subsidiary which must comply with the financial institutions’ lending criteria.

Amount (Million Baht) 2014 2013 2012

110

Residence Number Nine Company Limited (R9) Relationship : - The company holds 100%. - The company’s executives (Mr.Wicharn Siriwetwarawut and Ms.Sirirat Wongwattana) are directors - The company’s employees (Mr.Pornchai Ketlek and Mr.Sanpetch Sukkasem) are directors.

Legal Entity / Relationship

Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Extra (repayment) 31 Dec Loan Loan 1 Jan Extra (repayment) 31 Dec Interest Payable 1 Jan Extra (repayment) 31 Dec Land Sale Revenue from land sale Cost of land

Loan

»ßÎÛàÎÐáÖÜÛ/

144.42 191.10 (330.35) 5.17 4.98 4.68 (9.65) 0.01 28.10 14.39

5.17 (5.17) 0.01 0.05 (0.06) 175.00 175.00 5.37 5.37 -

Pricing policy

The Company loaned to wholly-owned R9 for land purchase, project development and working capital, charging the interest of 25-1.50 basis points above the Company’s average financial cost. Audit Committee’s Comment Necessary financial assistance to a subsidiary. The interest charge, 25-150 basis points per annum above the Company’s average financial cost, is - reasonable. 7.40 (2.42) 4.98 The Company extended a working capital loan to wholly-owned R9, - charging the interest of 25 basis points above R9’s average financial - cost. - Audit Committee’s Comment - Necessary financial assistance to a subsidiary. The interest charge, 25150 basis points per annum above the Company’s average financial cost, - is reasonable. - The Company sold a land plot to wholly-owned R9, for a land development - purpose. Audit Committee’s Comment The transaction is to support the subsidiary’s operations, completed at a jointly-agreed price. 192.00 (47.58) 144.42

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

111

Chiangmai Development Company Limited (CD) Relationship : - The company holds 100%. - The company’s executives (Mr.Wongsakorn Prasitvipat , and Ms.Sirirat Wongwattana) are directors - The company’s employees (Mr.Wason Srirattanapong) is a director.

Loan

Interest Received 1 Jan Extra (repayment) 31 Dec

1 Jan Extra (repayment) 31 Dec

Amount

Guarantee

Land Purchase

»ßÎÛàÎÐáÖÜÛ/

Residence Number Nine Company Limited Purchase land for (R9)(Continued) Development

Legal Entity / Relationship

0.29 0.29

17.33 17.33

1,739.28

1.42 (1.42) -

37.70 (37.70) -

2,026.78

Pricing policy

8.50 The Company bought a vacant land plot from wholly-owned R9, for a land development purpose. Audit Committee’s Comment The transaction is to support the Company’s operations, completed at a jointly-agreed price. 1,053.50 The Company guaranteed a loan from financial insitutions to a subsidiary without charging fee. Audit Committee’s Comment The transaction was to support the subsidiary’s operations and in line with the lending institution’s criteria. The Company loaned to CD, wholly-owned subsidiary, for land - purchase, project development and working capital, charging the - interest of 25-1.50 basis points above the Company’s average financial - cost. - Audit Committee’s Comment Necessary financial assistance to a subsidiary. The interest charge, 25-150 basis points per annum above the Company’s average financial cost, is reasonable.

Amount (Million Baht) 2014 2013 2012

112

Chiangmai Development Company Limited (CD)(Continued)

Legal Entity / Relationship

Loan 1 Jan Extra (repayment) 31 Dec Interest Payable 1 Jan Extra (repayment) 31 Dec Amount

Loan

Guarantee

Transaction

- The Company guaranteed a loan from financial insitutions to a subsidiary without charging fee. Audit Committee’s Comment The transaction was reasonable, aimed to support the subsidiary’s operations given the necessity in meeting the lending institution’s criteria for the business loan.

75.00 75.00 0.35 0.35 119.60

0.35 3.62 (3.97) 119.60

The Company borrowed a working capital loan from wholly-owned CD, paying interest at 25 basis points above CD’s average financial cost. Audit Committee’s Comment The transaction served as a financial support among the Company and subsidiaries. The levied interest at 0.25% above CD’s average financal cost is reasonable.

Pricing policy

75.00 (75.00) -

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

113

Note: * Risk Management committee * Appraised by Brook Hillier Parker on 8 February 2013

Guarantee

Amount

WR made Administrative Cost an advance payment cost

Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Extra (repayment) 31 Dec Land Sale Revenue from land sale Cost of land

We Retail Public Company Limited (WR) Relationship : - The company holds 93.31% - Chairman of the company (Dr.Tawatchai Nakhata) is a director. - Chief Executive Director of the company (Mr.Chainid Adhayanasakul) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director - Consultant and Sub-Committee* of the company (Mr.Boonliam Luangnakthongdee) is a director. - Sub-Committee* of the company (Mr.Cherdsak Kookiatnunt) is a director

Loans

Transaction

Legal Entity / Relationship

223.00

0.12 13.32 (10.20) 3.24 41.96** 27.67

3.24 29.43 32.67 -

30.00 411.00 (29.91) 411.09

411.09 363.90 774.99

Pricing policy

The Company loaned to wholly-owned WR for land purchase, project development and working capital, charging the interest of 25-1.50 basis points above the Company’s average financial cost. Audit Committee’s Comment Necessary financial assistance to a subsidiary. The interest charge, 25-150 basis points per annum above the Company’s average financial - cost, is reasonable. 0.12 0.12 - The Company sold a land plot to WR, for the development into a - shopping mall. Audit Committee’s Comment The transaction was to support the subsidiary’s operations and the price was based on independent appraser’s reference price. 0.07 WR made advance payment for the distribution of the Company’s shareholders’ meeting document. Audit Committee’s Comment 1) Actual transaction 2) WR collected the payment at cost. - The Company guaranteed a loan from financial insitutions to a subsidiary without charging fee. Audit Committee’s Comment The transaction was reasonable, aimed to support the subsidiary’s operations given the necessity in meeting the lending institution’s criteria for the business loan. 30.00 30.00

Amount (Million Baht) 2014 2013 2012

114

Loan

Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Extra (repayment) 31 Dec Revenue from land sale Cost of Land

Transaction

Note: * Land on which project entrance is located

Perfect Sport Club Company Limited (PSC) Land Sale Relationship : - The company holds 100%. - The company’s director (Mr.Phairat Senachack) is a director . - The company’s employees (Mr.Wason Srirattanapong , Mr.Nantachart Kliebphipat , Mr. Kritpas Pongpakawat and Mr.Saranyu Adhayanasakul ) are directors. Clubhouse Administrative Cost Trade Creditors

Property Perfect International Pte.Ltd (PPI) Relationship : - The company holds 100%. - Chairman of the company (Dr.Tawatchai Nakhata) is a director. - Chief Executive Officer of the company (Mr.Chainid Adhayanasakul) is a director

Legal Entity / Relationship

737.66 119.50 857.16 1.73 37.90 (27.09) 12.54 0.60* 0.20

15.62 2.77

857.16 340.80 (184.80) 1,013.16 12.54 35.87 48.41 -

3.88 -

The Company extended a loan to wholly-owned PPI, to finance the latter’s investment in SG (Kiroro Resort in Japan), as well as a working capital loan. The loans were subjected the step interest rates. - In 2012, 1% per annum - From 2013, 0.25-1.50% above the Company’s average financial cost The interest in the first year was low and raised later because the hotel and ski resort, undergoing asset restructuring, would show losses in the initial stage. It should generate additional rents in the later years. Audit Committee’s Comment The transaction was a financial assistance as agreed by both parties. The

Pricing policy

14.78 The Company hired PSC to manage sports clubs of the Company’s 2.55 projects. Audit Committee’s Comment 1) The transaction was to support the Company’s operations, being normal business transaction. 2) The service fee is jointly specified, based on the management cost and profit.

1.73 1.73 - The Company sold land on which roads inside its development projects are - located to PSC. Transferring the ownership to PSC, the Company, as the project developer, needs not transfer the land for public use. Such transfer is a normal practice among property developers. Audit Committee’s Comment 1) The transaction benefits the Company’s operations, deemed normal among property developers. 2) The Company and the subsidiary jointly agreed on the price.

764.79 (27.13) 737.66

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

115

U&I construction Bangkok Co., ltd. (U&I) Relationship : - The company holds 100%. - The company’s employees (Mr. Kritpas Pongpakawat) is a director.

Legal Entity / Relationship

Electrical and water bill

Contracted U&I for the construction of houses

Loan

2.08 2.08 5.91 5.71 0.03

Other Income

100.00 100.00

Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Extra (repayment) 31 Dec Value of Contract Construction Cost Advance Payment Contractor Trade Creditor

Transaction

Pricing policy

The Company extended a working capital loan to wholly-owned subsidiary U&I , charging the interest of 25-1.50 basis points above the Company’s average financial cost. Audit Committee’s Comment Necessary financial assistance to a subsidiary. The interest charge, 25-150 basis points per annum above the Company’s average financial cost, is - reasonable - The Company hired U&I to construct houses and condominiums developed - by the Company and subsidiaries. - Audit Committee’s Comment 1) The transaction was to support the Company’s operations, being normal - business transaction. 2) The service fee is jointly specified, based on the management cost and profit. - The Company charged U&I for the utilities service fees at cost. Audit Committee’s Comment Normal business transaction, settled at cost. -

Amount (Million Baht) 2014 2013 2012

116

Perfect Prefab Company Limited (P-PREFAB) Relationship : - The company holds 51% - The company’s executive (Mr.Wicharn Siriwetwarawut) is a director - The company’s employee (Dr. Vorasak Chakrapiyanant) is a director.

Legal Entity / Relationship

Contracted P-PREFAB companies for the production and installation of prefab materials

Loan

Interest Received 1 Jan Extra (repayment) 31 Dec Value of Contract Construction Cost Advance Payment for Contractor Trade Creditor

Loan 1 Jan Extra (repayment) 31 Dec

Transaction

3.53 3.08 6.61 3.17 15.34 0.06

60.00 60.00 0.70 2.83 3.53 83.40 67.74 0.01 22.27

40.00 20.00 60.00 0.70 0.70 -

40.00 40.00

Amount (Million Baht) 2014 2013 2012

The Company hired P-PREFAB to produce, assemble and install prefabricated construction materials for the Company’s development projects. Audit Committee’s Comment 1) Normal business transaction, completed at the mutually-agreed price and under written contract. 2) The transaction price and condition was reasonable and comparative to market price.

The Company extended a loan to P-PREFAB, a 51%-owned subsdiary, to help expand the latter’s business and working capital, charging 25-150 basis points per annum above the Company’s average financial cost. Audit Committee’s Comment The transaction served as an agreed financial support among the Company and subsidiaries. The levied interest at 0.25% above CD’s average financal cost is reasonable.

Pricing policy

ANNUAL REPORT 2014

117

Transaction

Kabushiki Kaisha Kiroro Associates Co.,Ltd (KA) advance Payment Relationship: on Operating Expense - KRH holds 100 - PPI holds KRH 95.61% - PF holds PPI 100% - Chairman of the company (Dr.Tawatchai Nakata) is a director. - Chief Executive Officer of the company (Mr.Chainid Adhayanasakul) is a director.

Note * Renamed from Share Group Co., Ltd. ** Resigned on Februay 2015

Kiroro Resort Holdings Co., Ltd.* (KRH) advance Payment Relationship: on Operating Expense - PPI holds 95.61% - The company holds in PPI 100% - Chairman of the company (Dr.Tawatchai Nakata) is a director - Chief Executive Officer of the company (Mr.Chainid Adhayanasakul) is a director - The company’s Consultant (Bhichai Rattakul) is a director. - WR’s Consultant (Mr.Jesd Jesdpiyawong**) is a director.

Subsidiaries, indirectly owned

Legal Entity / Relationship

Debtor

4.17

9.16

0.24

10.67

7.88

Amount (Million Baht) 2014 2013 2012

The Company made advance payment for KA, an indirect subsidiary through the 95.61% holding in PPI and KRH, on several items like - travel expenses and PR activities, as the activities took place in Thailand. Audit Committee’s Comment 1) The transaction was actual and meant to support the subsidiary’s operations. 2) KA was charged at cost.

The Company made advance payment for KRH, an indirect subsidiary through the 95.61% holding in PPI, on several items like - travel expenses and PR activities, as the activities took place in Thailand. Audit Committee’s Comment 1) The transaction was actual and meant to support the subsidiary’s operations. 2) KRH was charged at cost.

Pricing policy

118

* Resiged on January 2015

Ms.Supee Reodecha * (Ms.Supee) Relationship: The company’s executive

Buy a unit of condominium

Sale Cost Deposit , Down Payment and transfee cost

Sale Cost Deposit and Down Payment

1 Jan. Advance payment for Interval imbursement Land purchase. (interval payment) 31 Dec.

Transaction

Mr.Wicharn Siriwetwarawut) (Mr.Wicharn) Buy a unit of condominium Relationship: The company’s executive

Mr.Pramote Rermyindee (Mr.Pramote) Relationship: The company’s executive

Related Person

Legal Entity / Relationship

3.67 0.14

2.62 (2.60) 0.01

1.48 1.48

9.83 (9.83) -

Amount (Million Baht) 2014 2013 2012 Pricing policy

The Company made an advance payment to Mr. Pramote, for the accumulation of land on Ratchaphruek Road purchased for future development. Audit Committee’s Comment The transaction was to support Company’s operations and approved by CEO. Reservation of 1 unit in The Sky Sukhumvit condominium project Audit Committee’s Comment Normal business transaction, under the welfare condition to award a discount to staff. The Company has the policy to support staff in having their own accommodation. Reservation of 1 unit in Metro Park Sathorn Phase III condominium project Audit Committee’s Comment Normal business transaction, under the welfare condition to award a discount to staff. The Company has the policy to support staff in having their own accommodation.

2. Transactions between the company and connected individuals, entities

ANNUAL REPORT 2014

119

Transaction

0.06

2.57

Financial Administrative Cost Finnative Co., Ltd (Finnative) consultant cost Relationship: - Legal Entity which Mr.Jesd Jesdpiyawong, Diroctor of KRH, is a director and major shareholder.

0.22 14.39 0.95

2014

Banchong and Vidhya Law Office Co., Ltd. Law consultant Administrative Cost cost (Banchong Law Office) Relationship: - Legal Entity which Mr.Vidhya Nativivat, the company’s director, is a director and major shareholder.

Related other Legal Entity Center of Standard Precast Co., Ltd. (CSP) Contracted Value of Contract Relationship: P-PREFAB Construction Cost - CSP holds P-PREFAB 49% companies for the Advance Payment - PF holds P-PREFAB 51% production and Trade Creditor - No individual with conflict of interest holds installation of shares or sits in the board of directors. prefab materials

Legal Entity / Relationship

2.11

0.08 1.26 14.47 2.12

2013

CSP was contracted to produce, assemble and install construction materials for the Company’s housing projects Audit Committee’s Comment 1) Normal business transaction, completed at the mutually-agreed price and under written contract. 2) The transaction price and condition was reasonable and comparative to market price.

Pricing policy

- Specialized legal advisor hired to screen company document, registered or involving the Company’s operations. The fee offered to the law firm is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth the Company’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates. - Specialized financial advisor to advise the Company, negotiate with foreign investors, and coordinate the Company’s overseas investment. The service fee is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth the Company’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates.

13.91 38.50 14.54 3.60

2012

Amount (Million Baht)

120

Estate Perfect Company Limited (EP) Relationship: - PF holds 100% - The company’s executives (Mr.Wicharn Siriwetwarawut and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr.Wason Srirattanapong and Mr. Kritpas Pongpakawat) are directors.

Transaction

Note: * Risk Management committee

EP contracted Administrative Cost PSC for the Trade management of EP projects’ Creditors clubhouse.

We Retail Public Company Limited (WR) Advance EP give Relationship: land leasing Received - The company holds 93.31% rights to WR Revenue from - Chairman of the company Leasing (Dr.Tawatchai Nakhata) is a director. Debtor - Chief Executive Director of the company (Mr.Chainid Adhayanasakul) is a director. - The company’s executive (Mr.Pramote Rermyindee) is a director - Consultant and Sub-Committee* of the company (Mr.Boonliam Luangnakthongdee) is a director. - Sub-Committee* of the company (Mr.Cherdsak Kookiatnunt) is a director.

Connected transactions of subsidiaries

Legal Entity / Relationship

3. Connected transactions of subsidiaries.

0.25

2.87

5.24

2.26

4.00

6.79

0.72

58.87

51.72

Pricing policy

1.66 EP hired PSC to manage the sports club at EP’s projects. 0.15 Audit Committee’s Comment 1) The transaction was to support EP’s operations and in line with normal business practices. 2) The service fee was jointly determined, considering cost and profit.

- EP leased a land plot to WR, covering 16 rai and 229 square wa, on Sukhumvit Road for a - 30-year period, for the development into a shopping mall. - Audit Committee’s Comment 1) The transaction was to support WR’s operations and in line with normal business practices. 2) The leasing fee and condition is reasonable.

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

121

Bright Development Bangkok U&I construction Bangkok Co., ltd. (U&I) Company Limited (BD) Relationship : Relationship : - The company holds 100%. - The company holds 100%. - The company’s employees - The company’s executives (Mr. Kritpas Pongpakawat) is a director. (Mr.Pornswat Katechalasrirof and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr.Nantachart Kliebphipat) is a director.

Perfect Prefab Company Limited (P-PREFAB) Relationship : - The company holds 51% - The company’s executive (Mr.Wicharn Siriwetwarawut) is a director . - The company’s employee (Dr. Vorasak Chakrapiyanant) is a director.

Estate Perfect Company U&I construction Bangkok Co., ltd. (U&I) Limited (EP) Relationship : (Continued) - The company holds 100%. - The company’s employees (Mr.Kritpas Pongpakawat) is a director.

Legal Entity / Relationship

7.02

2.48

37.40

805.18 132.57 9.45

16.46 31.94 0.80

30.86 19.40 0.48

EP Value of Contract 21.42 contracted Construction 16.98 P-PREFAB Cost 0.03 companies Advance for the Payment 3.27 production Contractor and Trade Creditor installation of prefab materials BD Value of Contract 426.99 contracted Construction 119.07 U&I for the Cost 184.66 construction Advance of Payment 77.36 Contractor Trade Creditor

EP Value of Contract contracted Construction Cost U&I for the Advance construction Payment of houses Contractor

Transaction

Pricing policy

895.86 BD hired U&I, established as a contractor for the 695.84 Company and subsidiaries, to construct houses for 38.82 BD. Audit Committee’s Comment 42.00 1) The transaction was to support BD’s operations, being normal business transaction. 2) The service fee is jointly specified, based on the cost and profit.

- EP hired P-PREFAB to produce, assemble and - install construction materials for EP’s housing - projects. Audit Committee’s Comment - 1) Normal business transaction, completed at the mutually-agreed price and under written contract. 2)The transaction price and condition was reasonable and comparative to market price.

35.14 EP hired U&I, established as a contractor for the 15.17 Company and subsidiaries, to construct houses 3.89 for EP. Audit Committee’s Comment 0.20 1)The transaction was to support EP’s operations and in line with normal business practices. 2)The service fee was jointly determined, considering cost and profit.

Amount (Million Baht) 2014 2013 2012

122

Residence Number Nine Company Limited (R9) Relationship : - The company holds 100%. - The company’s executives (Mr.Wicharn Siriwetwarawut and Ms.Sirirat Wongwattana) - The company’s employees (Mr.Pornchai Ketlek and Mr. Sanpetch Sukkasem) are directors.

0.30 -

6.55 4.63 3.75

Administrative Cost

Value of Contract Construction Cost Advance Payment Contractor Trade Creditor

Perfect Prefab Company Limited R9 contracted Value of Contract (P-PREFAB) P-PREFAB Construction Cost Relationship : companies for - The company holds 51% the production - The company’s executive (Mr.Wicharn and installation Siriwetwarawut) is a director. of prefab - The company’s employee (Dr.Vorasak materials Chakrapiyanant) is a director.

Transaction

Perfect Sport Club Company Limited R9 contracted (PSC) PSC for the Relationship : management of - The company holds 100%. R9 projects’ - The company’s director clubhouse (Mr.Phairat Senachack) is a director. - The company’s employees (Mr.Wasan Srirattanapong , Mr.Nantachart Kliebphipat, Mr.Kritpas Pongpakawat and Mr.Saranyu Adhayanasakul ) are directors. U&I construction Bangkok Co., ltd. (U&I) R9 contracted Relationship : U&I for the - The company holds 100%. construction of - The company’s employees (Mr. Kritpas houses Pongpakawat) is a director.

Legal Entity / Relationship

10.67 10.67

15.70 17.02 -

0.90 0.11

Pricing policy

R9 hired U&I, established as a contractor for the Company and subsidiaries, to construct houses for R9. Audit Committee’s Comment 1)The transaction was to support R9’s operations and in line with normal business practice. 2)The service fee is jointly specified, based on the cost and profit. - R9 hired P-PREFAB to produce, assemble - and install construction materials for R9’s housing projects. Audit Committee’s Comment 1) Normal business transaction, completed at the mutually-agreed price and under written contract 2) The transaction price and condition was reasonable and comparative to market rates.

3.88 0.80 0.02 -

- R9 hired PSCto manage the sports club - in R9’s projects. Audit Committee’s Comment 1)The transaction was to support R9’s operations, in line with normal business practice. 2)The service fee is jointly specified, based on the management cost and profit.

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

123

Note: * Risk Management committee

We Retail Public Company Limited (WR) Relationship : - The company holds 93.31% - Chairman of the company (Dr.Tawatchai Nakata) is a director. - Chief Executive Director of the company (Mr.Chainid Adhayanasakul) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director. - Consultant and Sub-Committee* of the company (Mr.Boonliam Luangnakthongdee ) is a director. - Sub-Committee * of the company (Mr.Cherdsak Kookiatnunt) is a director.

Transaction

Loan Centrepoint Shopping Mall Company WR loans to Centrepoint Limited (Center Point) 1 Jan Relationship: Extra - WR hold’s 100%. (repayment) - The company holds WR 93.31% 31 Dec - Chief Executive Director of the company Interest Received (Mr.Chainid Adhayanasakul) is a director. 1 Jan - The company’s executives (Mr.Pramote Interval interest Rermyindee, Mr.Wongsakorn Prasitvipat receivables , and Mr.Pornswat Katechulasriroj) are (interval payment) directors. 31 Dec -The company’s consultant ( Ms.Wilanwan Luangnakthongdee ) is a director.

Legal Entity / Relationship

250.00 615.29 865.29 4.49 29.08 33.57

865.29 183.08 (99.88) 948.49 33.57 44.31 77.88

4.49

250.00 250.00

Amount (Million Baht) 2014 2013 2012

WR loaned to wholly-owned Centre Point, helping the latter pay for the land leasing fee, expand its business working capital, charging the interest equivalent to the average financial cost of WR. Audit Committee’s Comment Necessary financial assistance among subsdiaries. The interest charge reflects the lender’s average financial cost.

Pricing policy

124 Loan 1 Jan Extra (repayment) 31 Dec Interest Received 1 Jan Interval interest receivables (interval payment) 31 Dec

Transaction

Kiroro Resort Holdings PPI loans to Co., Ltd. ** (KRH) KRH Relationship: - PPI holds 95.61% - The company holds in PPI 100% - Chairman of the company (Dr.Tawatchai Nakata) is a director . Chief Executive Officer of the company (Mr.Chainid Adhayanasakul) is a director. -The company’s Consultant ( Bhichai Rattakul) is a director. - WR’s Consultant (Mr.Jesd Jesdpiyawong) is a director.

Note Note ** Formaly named Share Group * including conversion of Y500 million Co.,Ltd. loan (approx. Bt154.8 million) from

Property Perfect International Pte.Ltd (PPI) Relationship : - The company holds 100%. - Chairman of the company (Dr.Tawatchai Nakata) is a director. - Chief Executive Officer of the company (Mr.Chainid Adhayanasakul) is a director.

Legal Entity / Relationship

1.57 37.90 (27.06) 12.41

12.41 35.87 48.28

794.42 694.42 186.00 100.00 (184.80)* 795.62 794.42

PPI extended a loan to KRH, for the investment in Kiroro Resort and as working capital loan. The loan was subjected the step interest rates. - In 2012, 1% per annum - From 2013, 0.25-1.50% above PPI’s average financial cost

Pricing policy

Audit Committee’s Comment 1.57 The transaction is financial assistance for hotel business acquisition overseas. The step interest rates - are reasonable and supportive to the subsidiary’s 1.57 operations. On 27 February 2014, the Board of Directors at the 1/2014 meeting acknowledged the conversion of this loan into KRH’s equity. KRH raised the capital by 500 million yen (100,000 shares at 5,000 apiece). The shares were sold to PPI and with the proceeds, KRH repaid its loan to PPI. 1) The loan to equity conversion price and conditions reached by the Company and other shareholders of KRH indicated a fair negotiation, without influence from a conflicting individual. (At Arm’s length basis) 2) The loan to equity conversion price represented a discount from the Company’s average investment cost and was below KRH’s paid-up capital prior to the transaction.

694.42 694.42

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

125

Note: *Formerly named Share Group Co., Ltd. **Loan increased during the year but the booked figure decreased due to the conversion of yendenominated loans to Thai baht

Kiroro Resort Holdings Co., Ltd.* (KRH) Relationship: - PPI holds 95.61% - The company holds in PPI 100% - Chairman of the company (Dr.Tawatchai Nakata) is a director . Chief Executive Officer of the company (Mr.Chainid Adhayanasakul) is a director. -The company’s Consultant (Bhichai Rattakul) is a director. - WR’s Consultant (Mr.Jesd Jesdpiyawong) is a director.

Transaction

40.89 0.16 0.72

53.91

Debtor

Creditors

KRH made an advance payment to KA KA made an advance payment to KRH

3.29

1.89

19.55 0.44

19.72

5.91

Administrative Cost Creditors

113.60

110.73

0.54 KRH used KA’s hotel services. - Audit Committee’s Comment Normal transaction, under similar service charges and condition levied on outsiders. - KRH advanced the operating expenses for KA. Audit Committee’s Comment 1) The transaction was actual, 2) KA was charged at cost. - KA advanced the operating expenses for KRH. Audit Committee’s Comment 1) The transaction was actual, 2) KRH was charged at cost.

34.11 KRH leased assets to KA to operate the hotel business. Audit Committee’s Comment 10.64 1) The transaction was to support KA’s operations. 2)The leasing fee was jointly determined and reasonable.

96.73** 108.13 KRH extended a working capital loan to KA, charging 8.94 2.70 2% per annum. 11.02 2.70 Audit Committee’s Comment 1) Necessary financial assistance to KA. 2)The interest charge is reasonable, taking into account KA’s performance.

Pricing policy

253.30 10.54 19.02

Service charge

KRH loans to Loan Kabushiki Kaisha Kiroro KA Associates Co., Ltd. (KA) Interest Received Relationship: Interest - KRH holds 100 Receivables - PPI holds KRH 95.61% - PF holds PPI 100% - Chairman of the company (Dr. Tawatchai Nakata) is a director. KRH made an Revenue from - Chief Executive Officer of the advance Leasing c o m p a n y ( M r . C h a i n i d payment to Debtor Adhayanasakul) is a director. KA

Legal Entity / Relationship

Amount (Million Baht) 2014 2013 2012

126

Mr.Pornswat Katechulasriroj(Mr.Pornswat ) Relationship: - The company’s executive

Related Person

Transaction

Advance payment for Land purchase

1 Jan Interest receivables Interest received 31 Dec

Sale Cost Bright Development Bangkok Company Buy unit of condominium Deposit , Down Limited (BD) Of BD Relationship : Payment and - The company holds 100%. transfee cost - The company’s executives (Mr. Pornswat Katechalasrirof and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr. Sale Cost Nantachart Kliebphipat) is a director. Deposit , Down Payment and transfee cost

Legal Entity / Relationship

0.03

1.83

1.74

Pricing policy

- Reservation of 1 unit of iCondo Sukhapiban 2 - condominium project. Audit Committee’s Comment Normal business transaction, under the welfare condition to award a discount to staff. The Company has the policy to support staff in having their own accommodation. 1.91 Reservation of 1 unit in icondo Phetkasem 39 0.05 condominium Audit Committee’s Comment Normal business transaction, under the welfare condition to award a discount to staff. The Company has the policy to support staff in having their own accommodation. - BD made an advance payment to Mr. Pornswat, 26.00 for the purchase of land on Sukhaphiban Road and Bang Khae purchased for future development. Audit Committee’s Comment (26.00) The transaction was to support BD’s operations - and approved by CEO.

Amount (Million Baht) 2014 2013 2012

4. Transactions between subsidiaries and connected individuals/entities

ANNUAL REPORT 2014

127

Consultant income

Transaction

We Retail Public Company Limited (WR) Financial Consultant Relationship : - The company holds 93.31% - Chairman of the company (Dr.Tawatchai Nakata) is a director. - Chief Executive Director of the company (Mr.Chainid Adhayanasakul) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director. - Consultant and Sub-Committee* of the company (Mr.Boonliam Luangnakthongdee) is a director. - Sub-Committee** of the company (Mr.Cherdsak Kookiatnunt) is a director.

Note: Note: *Resigned on February 2015 **Risk Management committee

(Mr.Jesd Jesdpiyawong * (Mr.Jesd) Relationship: Director of KRH

Legal Entity / Relationship

1.20

1.00

Pricing policy

- WR hired a specialized financial advisor for advice and coordination with foreign investors. The fee is not above market rate. Audit Committee’s Comment 1) The transaction was to support Company’s operations and in line with normal businss practices. 2) The price and condition was reasonable and not above market rate.

Amount (Million Baht) 2014 2013 2012

128

Buy unit of Bright Development Bangkok Company Limited (BD) condominium Relationship : Of BD - The company holds 100%. - The company’s executives (Mr.Pornswat Katechalasrirof and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr.Nantachart Area Leasing Kliebphipat) is a director.

Bright Development Bangkok Company Buy unit of condominium Limited (BD) Of BD Relationship : -The company holds 100%. -The company’s executives (Mr.Pornswat Katechalasrirof and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr.Nantachart Kliebphipat) is a director.

Ms.Pornchan Katechulasriroj (Ms.Pornchan ) Relationship: Mr.Pornswat Katechulasriroj’s sister,The company’s executive

2.76

0.27

Sale Cost Deposit , Down Payment and transfee cost

Revenue from Leasing

Sale Cost Deposit, Down Payment and transfee cost

Transaction

Dr.Bunthiwa Ngowsirimanee (Dr.Bunthiwa) Relationship: Dr.Tawatchai Nakata’s sister, Chairman of the company and The company’s employees

Legal Entity / Relationship

1.13

0.07

Pricing policy

- Reservation of 1 unit of icondo Ngamwongwan - condominium project. Audit Committee’s Comment 1) The transaction is in line with normal business practices. 2) The price and condition is the same as those offered to outsiders.

- Reservation of 2 units of icondo Sukhapiban - 2 condominium project. Audit Committee’s Comment Normal business transaction, under the welfare condition to award a discount to staff. The Company has the policy to support staff in having their own accommodation. - Dr. Bunthiwa leased her condominium in iCondo Sukhaphiban 2 project to BD, serving as its sale office. Audit Committee’s Comment 1) The transaction is in line with normal business practices. BD and Dr. Bunthiwa jointly set the price and entered into a written agreement. 2) The rent and condition is reasonable and comparative to market rate.

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

129

Estate Perfect Company Limited (EP) Relationship: - PF holds 100% - The company’s executives (Mr.Wicharn Siriwetwarawut and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr.Wasan Srirattanapong and Mr. Kritpas Pongpakawat) are directors.

Related Legal Entity

Transaction

Center of Standard Precast Co., Ltd. (CSP) EP contracted Value of Contract CSP for the Relationship: production and Construction Cost - CSP holds P-PREFAB 49% installation of Advance Payment - PF holds P-PREFAB 51% - No individual with conflict of interest holds prefab materials Contractor shares or sits in the board of directors. Trade Creditor

Legal Entity / Relationship

0.70

3.53

0.04

0.40 0.01

6.13 0.02

0.44

11.11

Pricing policy

- Specialized legal advisor hired to review registration document and document involving the EP’s operations. The fee offered to the law firm is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth the EP’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates.

19.53 EP hired P-PREFAB to produce, assemble and install construction materials for EP’s housing 29.77 projects. - Audit Committee’s Comment 1) Normal business transaction, completed at the mutually-agreed price and under written 1.65 contract 2) The transaction price and condition was reasonable and comparative to market price.

Amount (Million Baht) 2014 2013 2012

130

Bright Development Bangkok Company Limited (BD) Relationship : - The company holds 100%. - The company’s executives (Mr.Pornswat Katechalasrirof and Ms.Sirirat Wongwattana) are directors. - The company’s employees (Mr.Nantachart Kliebphipat) is a director.

Transaction

Legal Entity / Relationship

0.06

Pricing policy

- Specialized legal advisor hired for legal advice and the review of registration document and document involving the BD’s operations. The fee offered to the law firm is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth BD’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates.

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

131

Transaction

Banchong and Vidhya Law Office Co., Ltd. Law consultant Administrative Cost (Banchong Law Office) cost Relationship: - Legal Entity which Mr.Vidhya Nativivat, the company’s director, is a director and major shareholder.

Center of Standard Precast Co., Ltd. (CSP) R9 contracted Value of Contract CSP for the Construction Cost Relationship: production Advance Payment - CSP holds P-PREFAB 49% - PF holds P-PREFAB 51% Contractor - No individual with conflict of interest holds Trade Creditor shares or sits in the board of directors.

Legal Entity / Relationship

0.03

0.32 -

Pricing policy

- Specialized legal advisor hired for legal advice, review the registration document and document related to R9’s operations. The fee offered to the law firm is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth R9’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates.

6.28 R9 hired CSP to produce, assemble and install 10.32 construction materials for R9’s housing projects. 0.01 Audit Committee’s Comment 1) Normal business transaction, completed at 0.48 the mutually-agreed price and under written contract. 2) The transaction price and condition was reasonable and comparative to market price.

Amount (Million Baht) 2014 2013 2012

132

Perfect Sport Club Company Limited (PSC) Relationship : -The company holds 100%. -The company’s director (Mr. Phairat Senachack) is a director . -The company’s employees (Mr.Wasan Srirattanapong, Mr.Nantachart Kliebphipat, Mr. Kritpas Pongpakawat and Mr.Saranyu Adhayanasakul) are directors. U&I Construction Bangkok Co., Ltd. (U&I) Relationship : - The company holds 100%. - The company’s employees (Mr. Kritpas Pongpakawat) is a director.

Transaction

Fee in obtaining Smart Think Co., Ltd. work permits for (Smart Think) foreign workers Relationship : - Legal Entity , Mrs.Orasa Siriwetwarawut, Mr.Wicharn Siriwetwarawut’s wife the company’s director, is an owner.

Miscellaneous expenses

Legal Entity / Relationship

0.06

0.01

Pricing policy

- U&I hired Smart Think, a labor consultant, to apply for official work permits for its foreign workers. Audit Committee’s Comment 1) The transaction was in line with normal business pratcies. 2) The fee and condition was reasonable and not above market rates.

- Specialized legal advisor hired for legal advice, a review of the registration document and document related to PSC’s operations. The fee offered to the law firm is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth PSC’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates.

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

133

Banchong and Vidhya Law Office Co., Ltd. Law Administrative Cost consultant (Banchong Law Office) cost Relationship: - Legal Entity which Mr.Vidhya Nativivat, the company’s director, is a director and major Shareholder.

Transaction

0.07

- Specialized legal advisor hired for legal advice, a review of the registration document and document related to Uniloft’s operations. The fee offered to the law firm is not above market rates. Audit Committee’s Comment 1) The transaction was to smooth PSC’s operations and in line with normal business practice. 2) The fee and condition was reasonable and not above market rates.

Pricing policy

The Affiliates Real Service Co., Ltd. (RS)

* Formerly named Mariya Stuff Co., Ltd, acquired in August 2013

The subsidiaries Ramintral Mall Co., Ltd.

Legal Entity

None

- PF holds 100% - Chief Executive Director of the company (Mr.Chainid Adhayanasakul) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director. - PF holds 19% - The company’s employees (Mr. Sanphet Sukkasem and Mr.Chainarng Ngernsopa) are directors

None

Transaction

Relationship

Company and subsidiaries during 2012 -2014

5. Information on other subsidiaries and joint ventures which made no connected transactions with the

Note * Risk Management Committee

Uniloft Service (Thailand) Co., Ltd. (UNILOFT) Relationship : - The company holds 100% - The company’s employees (Mr.Saranyu Adhayanasakul, Mr.Natthaphon Sueb-Am and Mr.James Stevenson Worboys) are directors. - Sub-Committee* of the company (Mr.Cherdsak Kookiatnunt) is a director. - Estate’s employees (Mr.Prathompob Intr- Bumrong) is a director.

Legal Entity / Relationship

Amount (Million Baht) 2014 2013 2012

ANNUAL REPORT 2014

RISK FACTORS 1. Business risks Risks from fiercer competition in residential market The residential market has remained under the influence of large-sized developers, who have been able to adjust themselves to high market volatility. Large-sized developers also own greater potential in the business, with access to various sources of fund thanks to confidence from investors and financial institutions. With the realisation in this risk, the Company has put its focus on research and development to enhance the competitiveness. Detailed study of target customers is emphaised, as well as surveys of market demands. The Company places emphasis on locations, project layout, architectural designs, usable space, value for money and clear categorization of target customers. The Company also works out with financial institutions to increase consumers’ purchasing power and reduce their financial burden. This has been the Company’s leverage in competing against other major developers. Risk from construction cost and project financing The Company and subsidies’ main business is to develop residential units for sale. In 2014, land and house sale accounted fro 49.1% of total revenue, while revenue from condominium units stood at 28.7%. As the ratio of house sale is huge and it is the Company’s policy to sell only complete houses, no payments are received prior to the sale and advance funding for the construction grows accordingly. There are also uncertainties that may affect target customers’ purchasing power and decision. For example, (1) the employment rate and household income which changes accordingly to the macroeconomic outlook of Thailand and the world, (2) mortgage rates and commercial banks’ lending policy, (3) government supports, and etc. This produces a risk that the Company may be unable to sell houses. Inventory would also rise, which will affect the Company’s liquidity and profitability. The Company has defined the following measures to cope with the risk. 1. Consumer behavior survey: All visitors at project sites are asked about their spending budget, preferable designs, land area, and etc. Combined with historical data, the Company can analyze consumer demands. As a large-sized developer which has stayed in the business for nearly 30 years, the Company has an advantage in terms of market data, experience and understanding of target customers’ preferences. 2. The Company carries out the construction of single houses and townhouses in each project phase by phase. Contractors are hired accordingly to the construction plan. The construction work depends largely on the orders, to keep inventory low. The average inventory is maintained accordingly to the grand plan, to balance the number of complete and underconstruction houses. When sale activities do not meet targets, the Company can speedily adjust the construction work. Or when customers’ preferences significantly change, the Company can adjust the size accordingly. On a change in purchasing power, the Company can adjust the property size so that the unit price is lowered to meet their purchasing power. 3. On condominium development, though the Company can partly finance the construction with down payments, the Company still requires a huge sum of money. This requires attention in cost management. The Company’s condominium projects are put into two categories: low-rise which is no higher than 8 storeys and high-rise of which height. The construction period of the two types is 12-14 months for low-rises and 18-24 months for highrises. Low-rise and high-rise development ratio is maintained at an appropriate level, to facilitate construction

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management and respond to sale activities, revenue realization and financial supports from financial institutions. 4. The Company has clear financing plans for each project. Positive sale activities of the old projects have allowed the Company and subsidiaries to win long-term loans from financial institutions, which were confident in the projects’ potential. Meanwhile, though demand for working capital increases in line with the launch of new projects, the Company has shown no difficulty in financing the debt as revenue from other projects can also be used as working capital. (More in Item: Risk from access to funding, ability to pay) Risk from political and economic uncertainties In the second half of 2013 through the first half of 2014, political instability put a brake or stalled public projects. Plus lower purchasing power and more stringent lending policy at commercial banks, this affected residential property demand. All developers witnessed direct impacts on sale activities and property transfers. The Company adjusted business strategies in line with the political and economic situation. For instance, attention was placed on the launch of new projects, the purchase of new land plots, construction and cash flow management. Project development was adjusted accordingly. The construction volume was in line with sale revenue, to limit inventory. New project launch and land purchases were put off, to achieve effective cash flow management and lower risks from political and economic uncertainties. Risk from deterioration or outdated designs of houses, townhouses and condominium in stock The Company and subsidiaries pre-determined sell prices and selling period of each project, in line with construction plans. If the Company cannot meet sale target, the Company and subsidiaries would end up with some left-over single houses, townhouses and condominium units. The deterioration and outdated designs of the property could pose a risk, as it demands expenses for the maintenance. The units could also end up being sold at the below-cost prices. Nevertheless, the Company is confident that the Company and subsidiaries’ single house, townhouse and condominium projects will win positive response thanks to attractive selling points and the marketing plans tailored for each target group. The projects are located in potential areas and priced appropriately. Our business group’s sale target and revenue has been close to targets. When the Company has a plan to boost sales at a particular project, PR strategies would be adjusted while new marketing promotion would be introduced. For example, discount for the last unit, promotion through sale officers, or other offers.

2. Construction-related risks Risk from construction cost volatility Construction materials are main raw materials of property development. A significant increase in construction materials prices could raise the construction cost. The Commerce Ministry’s date showed that the average price of construction materials edged up by 0.7% in 2014, compared to the 2013 level, due to the overall contraction in construction works. In the first half of 2014, public construction projects suffered from several problems like political uncertainties and economic slowdown. The value of public and private projects contracted, while steel and oil prices declined. These factors should further keep the increase in construction materials prices at a low pace in 2015. As such, risk from the volatility on the Company’s development cost would be limited.

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However, the Company has continuously emphasized on the management of the increasing development cost of lowrise projects. Concerning single house and townhouse projects, the Company controls the construction materials prices risk by sourcing the materials directly from manufacturers. Manufacturers are invited to a bid, allowing the Company to compare and test the quality of the materials. While the materials are sourced at a right price, the delivery period can be pre-determined to reduce the risk of a possible price increase. Economy of scale is achieved. The same method is applied with the procurement of several items for condominium development, such as tiles, sanitary ware and air-conditioners. This effectively increase the Company’s bargaining power in setting the prices. Moreover, a business unit is directly in charge of monitoring price movement, to effectively keep updated on the prices and control the construction cost. Risk from contractor and labor shortage Focus is placed on contractors. Contractors with good track records will be put in the Company’s database, ready for the selection to handle the construction of the Company’s and subsidiaries’ projects. The Company adheres to a transparent policy in awarding construction volume to each contractor. Payments are completed on time and contractors are also entitled to other kinds of assistance. The Company also opens the door for new contractors, who will be selected based on their capacity and credentials, in preparation for future expansion. The Company and subsidiaries have awarded contracts to over 100 medium and small-sized contractors. Their qualification and construction cost will be determined before the contracts are signed. The delivery date is also clearly defined in the contracts. This allows the Company not to depend on a particular contractor. The Company has maintained good relationship with contractors through the supply chain management, which helps procure construction materials for the contractors. Training is on offer, while contractors are categorized accordingly to the quality of their work. Construction cost is fairly adjusted accordingly to market conditions and the prices of construction materials, which have risen on an increase in minimum wage. All contractors are subjected to similar requirements. In the past few years, Italian-Thai Development Public Company Limited and Saeng Fa Construction Co Ltd have been the primary construction firms for condominium projects of the Company and subsidiaries, thanks to their best offers compared to those offered by other companies joining the bids. However, the Company and subsidiaries do not strike any monopolistic or long-term contract with the two companies. The door is open for other qualified companies that may offer the best offers in future bids.

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To cope with the Asean Economic Community that may lead to labor shortage, the Company has introduced the prefabrication or precast construction technology, which allows the installation of finished walls and other items. The ratio of precast houses has been raised to reduce the construction period and allows the Company to reduce its dependence on skilled labor. The Company established Perfect Prefab Co Ltd in 2011, to manufacture finished construction parts for single houses and townhouse, wall panels of projects’ fences, as well as parts for condominium projects. The subsidiary is able to supply materials for 500 houses per annum. The Company also established U & I Construction Bangkok Co Ltd as a wholly-owned subsidiary. It involves in the construction business, able to handle the construction of single houses, twin houses, townhouses and low-rise condominium buildings for the group. Flexibility in construction management increases as the Company focuses on the supply chain management and the selection of qualified contractors. This also allows the Company to control the construction cost and construction period. The construction volume and quality can be maintained, while risk of qualified contractor shortage is reduced. The construction of high-rise condominium projects are carried out under Turnkey Construction Contracts with large-sized contractors, allowing the Company to effectively control the construction cost, quality, and duration.

3. Administrative and management risks Risk from guarantee to subsidiaries The Company’s outstanding loan guarantee to subsidiaries stood at Bt9,430.8 million, as of 31 December 2014. The guarantee could pose a risk if the subsidiaries cannot repay the principal and interest to their creditors. However, these subsidiaries borrowed the sum to finance development projects, which are their main business purpose. The Company has a policy in place to closely monitor the subsidiaries’ operations, which should guarantee that they can meet debt obligations with their own profits and cash flow. The risk from the loan guarantee to subsidiaries thus remains low.

4. Financial risks Risk from access to funding and debt repayment ability The property development business requires huge capital. The company’s policy to boost liquidity is through establishing relationship with several commercial banks. All the projects under development have won supports from financial institutions. Their offers will be considered so that the company wins the most appropriate cost of fund. The company has also issued unsubordinated and unsecured debentures, with short and long-term maturity depending on requirements, to finance the property development and grow business. (Details in “Securities and Holders”) The debentures have been warmly welcomed by investors, thanks to the company’s reputation and business track record. As of 31 December 2014, the Company’s current liabilities stood at Bt13,941.21 million. Key items are debentures with less than 1 year in maturity, worth totally Bt8,978.72 million; long-term loans due within 1 year worth Bt747.14 million; bill of exchange and promissory notes worth Bt1,360.63 million; and trade and other credits worth Bt2,411.47 million.

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ANNUAL REPORT 2014

The Company repays term loans from financial institutions accordingly to the transfer of properties. As of 31 December 2014, the combined value of the Company and subsidiariesâ&#x20AC;&#x2122; under-development projects was Bt32,091.33 million. On the date, the Company and subsidiaries had access to outstanding overdraft credit worth Bt9,988.16 million, which could support the operations. The Company has so far redeemed debentures and repaid short-term loans with working capital as well as the introduction of new bonds. The Company has so far repaid loans to all creditors on schedule and been able to maintain key financial ratios as specified in the debenture prospectus and short-term loan contracts. Risk from obligation to maintain the debt to equity ratio at 2:1 The Company is obligated to maintain the debt to equity ratio at the end of each quarter at 2:1. As of 31 December 2014, the ratio was 1.83:1. If the Company cannot maintain the ratio as agreed, a default is possible. However, a default would take place only when the ratio is above and is not brought back to the specified level at the end of the next quarter. This clause gives time to the Company to fix the financing structure. The ratio has risen to an abnormally high level in the past 2-3 years due to the investment in several new projects by the Company and subsidiaries as well as the investment in condominium projects of which development duration is longer than low-rise projects. In the long term, the Company is convinced that the ratio would be lower when the investment pace returns to normal. * Total net liabilities are total liabilities audited and shown in the consolidated account. The liabilities carry interest burden or discounting, including financial obligations and future debt possibly arising from loan guarantees or similar obligations extended to individuals or juristic entities which are not the Companyâ&#x20AC;&#x2122;s subsidiaries.

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Risk from UNIPF’s lease of Uniloft Salaya project The Company is the operator and leaser of Uniloft Salaya from Uniloft Property Fund. The project is leased with fixed rent at Bt43.50 million per annum in the first three years (November 2013 to November 2016). The fund owns the right to extend the lease contract by another one year. This could pose a risk if the revenue is below the specified rent. The Company’s management has estimated the loss amount and set aside provisions worth Bt45.30 million in 2013. The provisions are appropriate and approved by the auditor. However, during January to December 2014, the project’s occupancy rate was 33%. With the average rentals of Bt7,347 per month, the project generated Bt14.99 million in revenue. The figures differ from the estimated occupancy rate of 49.83%, rentals at Bt7,500 a month, and total revenue of Bt21.50 million. This required the company to set aside additional provisions worth Bt24.03 million in 2014. The Company may have to set aside more provisions in the future if the revenue falls below the estimates applied for the current provisioning base. However, the Company is confident in its management ability and is convinced that it would achieve the revenue target, which should limit the risk for additional provisions. Risk from delay in realizing profits from a true sale contract On 28 February 2008, the Company struck a contract to sell 64 houses in Perfect Masterpiece Ekamai-Ramintra and Perfect Place Ramkhamhaeng-Suvarnabhumi projects worth Bt510 million to Property Perfect Fund. Profit was booked and the value of the property was cut from the Company’s account in the accounting year. The Company’s 5-year guarantee of minimum revenue, at Bt55 million per annum, also ended on 31 December 2012. However, though there was no condition on asset repurchase, the Board of Directors at the 1/2013 meeting on 14 January 2013 agreed to buy back the assets from the fund which decided to end its existence and put the property on sale as rentals from foreign tenants did not meet targets. The houses were bought back for Bt505 million, the lowest prices suggested by two independent appraisers. The decision was based on the fact that the Company was the original owner of the houses and they are located in the projects which are under development. They should not be sold to other developers. The Company does not have the policy to repurchase the property or intention to strike a repurchase contract from any property fund, investment trust or individual in the future. The Company has no power to influence a property fund or investment trust’s decision to sell assets or end its existence. Such decision depends on circumstances and should generate the best interests to all investors. This is beyond the Company’s expectation. Normally, a fund or a trust needs to win investors’ consent for asset sale and follow the asset sale procedures. For example, the asset must be sold in an open bid. The fund or trust also controls the right to abort the asset sale if offered prices are unreasonable.

139

ANNUAL REPORT 2014

Risk from the pending takeover of Thai Property and Grand Asset Under the plan to take over Thai Property, the Company agrees to tender for all remaining shares of Thai Property and all shares in Grand Asset to be in line witht eh Chain Principle. The tender offer is conditional: the Company will cancel the transaction if the combined number of Thai Property shares offered when the tender offer period ends is lower than 75% of all issued shares. It remains uncertain if the number of shares offered would reach the threshold. It also remains if Thai Property and Grand Asset shareholders would welcome the tender offer.

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INTERNAL CONTROL AND RISK MANAGEMENT The Board of Directors reviewed the company’s internal control system at the 1/2015 meeting on 26 February 2015, basing the review on the Securities and Exchange Commission’s revised rules on sufficiency (revision under the COSO Internal Control - Integrated Framework 2013). The rules cover 5 areas of internal control - internal control, risk management, operational control, information and communication system and the monitoring system. The Board of Directors resolved that the company’s internal control is sufficient and appropriate. The responsible workforce is sufficient and the monitoring system of the operational system of the company and subsidiaries is efficient and able to prevent fraudulent uses of resources. Detail of the view is as follows;

1. Control Environment 1) Integrity and Morality The Board of Directors and the management prescribe the direction and practices based on integrity and ethics, encompassing daily operations, decision-making guidelines and treatment guidelines for trade partners, customers and others. In the Code of Conduct, executives and staff are prohibited from taking actions which may be conducive to conflict of interest. Staff is barred from asking for gifts or other benefits from trade partners, contractors and other related parties. They must not use the Company’s assets or company name, abuse power for their personal benefits, or commit any corrupt practices. Violators are subjected to disciplinary actions. Executives and staff at all levels are notified of the guidelines and penalties. 2) Board of Directors retains independence from the management and have oversight on the operations, human resource development and internal control. The Board of Directors ensures the Company has clear, measurable and practical business goals and determines the roles and responsibilities of the executive board and executives in accordance with laws and the Company’s charter. This encompasses the roles of the Audit Committee, the auditor, internal control officers and the persons responsible for financial reports. The Board of Directors consists of a sufficient number of independent directors who possess knowledge, ability, credibility and independence. The Board of Directors also ensures the appropriateness of human resource development and internal control system. 3) The management outlines a compact organizational structure and appropriately deterrmines the authorization and responsibility under the Board of Directors’ oversight, to allow strategic achievements. The organizational structure is designed accordingly to the Company’s business goals and an effective internal control is put in place. This covers the division of key tasks to allow check and balance. The internal control unit reports directly to the Audit Committee and clearly direct report. High-level executives devise the line of command, considering the authorization, responsibility and intercommunications. The roles and responsibilities of the Board of Directors, the executive board, executives and staff are clearly specified.

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4) Commitment to attract, develop and retain talents is asserted. The Company has outlined the policy and practices in attracting, developing and retaining talents. There is an assessment process and incentive for staff with good performance, which must be made known to executives and staff. The Company ensures appropriate and sufficient training and puts in place the process to deal with talent shortage or prepared for the situation. 5) All staff is held responsible for assisting the internal control, for the organization to reach the business goals. The Board of Directors and the management has compulsory schemes to bind all staff to the internal control. Some practices may be adjusted if necessary. The performance assessment is defined in accordance with the Code of Ethics and the Companyâ&#x20AC;&#x2122;s goals. Incentives are provided for those successfully honor their parts in following internal control rules.

2. Risk Assessment 1) Business goals are clearly and sufficiently defined, to assist the identification and assessment of risks related to the goals. The Company complies with the generally-accepted accounting standards and information is disclosed fully and accurately. The Risk Management Committee has informed the management and staff of risk management policies and required their compliance. 2) Risks which may derail business goals are thoroughly identified and evaluated. The Company identifies overall risks which may affect the operations of the organization, business units and departments. Risks stemming from internal and external factors - including strategic and operational risks, compliance, and ICT-related risks - are evaluated, taking into the likelihood and possible impacts. 3) Corruption-related risks are taken into account in assessing each departmentâ&#x20AC;&#x2122;s risks in achieving the organizationâ&#x20AC;&#x2122;s goals. The Company assesses the possibility of corrupt practices and ensures operational goals are achievable, Staff incentives are maintained at the reasonable levels, to discourage staff from commit corrupt practices. The Audit Committee seeks consultation with the management over the likelihood and preventive and corrective measures. 4) Ability to identify and evaluate risks which may affect the internal control The Company assesses external factors and a change in business trends which may affect the operations, internal control and financial reports. Sufficient measures are in place to tackle the situation.

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3. Control Activities 1) Control measures to keep risks to business goals at acceptable level. The Company’s controlling measures are appropriate to the organizational risks. Written internal control measures appropriately cover business activities such as the policies and guidelines on financial transactions, procurements, and general administrative issues. The roles, responsibilities and line of command of executives in each level are clearly specified, to prevent corruption. The authority on approval, accounting and asset management is separated, to put in place check and balance. 2) Technology is adopted to enhance internal control. The Company defines the interconnection in technology adoption in the work process and IT system control. Control measures for infrastructure and IT system are appropriately specified while the IT system is properly maintained. 3) Control policies, including expectation and work process, are specified to ensure practicality of such policies. The Company has policies in place to monitor transactions of major shareholders, directors and executives or individuals related to them. Such transactions must fall through the specified approval process and must be approved by those without conflict of interest. In this regard, the Company’s interests come first. The transactions must be handled on the “at arm’s length basis”. There is a process to monitor the operations of subsidiaries and associated companies.

4. Information & Communication 1) Sufficient and quality information to support internal control goals The Company ensures the Board of Directors is equipped with sufficient information for their decision making and directors receive meeting invitation and related document ahead of the meeting dates, at least within the statutory period. The meeting minutes contain sufficient details, to allow retrospective investigation into individual directors’ performance. Important document is fully stored. 2) Internal information, including internal control goals and responsibility, is shared to ensure supports to the task. The Company has put in place an effective process and channels to disseminate internal information. The Board of Director is regularly fed with significant information. The directors can access the information necessary for their work or review any issues. A secret and sound channel is open to receive complaints or reports on fraudulent practices from those working in the organization.

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3) External communication on issues that may affect internal control The Company has established effective communication channel with outside stakeholders. Investor Relations are in place to provide information to investors.

5. Monitoring Activities 1) Internal control monitoring and assessment to ensure sufficiency and suitability The Company has the process to monitor compliance to the Code of Ethics. Executives and staff are prohibited from any actions conducive to the conflict of interest, being monitored by supervisors of each department and internal control unit which reports directly to the Audit Committee. Internal control officers are encouraged to comply with the International Standard for The Professional Practice of Internal Auditing (IIA). 2) Prompt evaluation and report on internal control discrepancies to responsible persons, high-level executives and the Board of Directors The Company has closely monitored and promptly tackled internal control discrepancies. In the likelihood of serious fraudulent practices, law violation or other irregular activities, the management will immediately inform the Board of Directors. Reports on key discrepancies and solutions are also submitted to the Board of Directors and the Audit Committee in a timely manner. The Audit Committee views that the Company’s internal control is in line with the Board of Directors’ policy. The auditor, Mr. Supachai Panyawatano of EY Co.,Ltd, did not identify significant discrepancies in the internal control, which may cause damage to the Company. However, during the year, the auditor submitted some remarks on the internal control to the Board of Directors, so that the measures can be improved for greater efficiency. Key issues concern long-standing advance payments for land purchases and a significant discrepancy in a subsidiary’s construction cost estimate and actual cost. The internal control unit, supervised by Ms. Duangporn Rermyindee, internal audit director, reports directly to the Audit Committee. The committee views that she is knowledgeable and capable to lead the unit efficiently and effectively, (Her education credential and experience is in Attachment 3) The Audit Committee’s approval is necessary to appoint, dismiss or transfer the unit’s chief.

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CORPORATE SOCIAL RESPONSIBILITY (CSR) Overall Policy Policy and Good Governance Property Perfect Public Company Limited operates the property development business, focusing on properties for sale and rent. The emphasis is placed on good governance practices, which take into account stakeholders ranging from consumers, shareholders, employees and suppliers to communities, society and the environment. To ensure that its businesses properly follow the standard of practices and to avoid the impact on community and environment, the Company has strictly adhered to the 3 business principles which include: 1. Integrity and Accountability based on professionalism of its employees at every level 2. Transparency in business operation and Good Internal Control System 3. Creation of long-term value to all stakeholders and Fiduciary Duties towards Stakeholders The Roles of the Board of Directors Every member of the Board of Directors must have strong leadership skills and be able to control the management team effectively, ensuring that they can deliver the fair return to the shareholders and all stakeholders. The Board of Directors will work with the management team to define the Company’s vision, mission, and corporate value for everyone to follow. The Board of Directors has the responsibilities to comply by the Company’s ethics and laws as well as the stakeholders; and they should perform their duties with integrity and express their opinions freely. Their roles also include the improvement of the Company’s business guidelines making sure they are in line the new Code of Conduct principles as defined by the Stock Exchange of Thailand for the listed companies in the Real Estate and Construction sector, taking into account to incorporate CSR Best Practices in the implementation of Social and Environmental Responsibility of the Company. Business Vision The Company’s business vision is to be a leading real estate development company with continuous and steady growth plus a strong financial background. It places emphasis on development of property on high potential locations, delivery of good quality and value-for-money products and services, caring for environment and quality of life that can bring happiness and satisfaction to customers at every stage of life, based on the Corporate Governance principles. Meanwhile, the good relationships with the community, society, business partners, employees and shareholders are also firmly placed in the Company’s vision. Missions to Take Action 1. Develop the property projects at high potential locations, responding to the needs of consumers, with the products and services that are of good quality and value for money. 2. Create opportunities for business growth, expansion and gain competitive advantages by focusing on core businesses and expansion through Merger and Acquisition. 3. Seek business partners who can exchange and share technology, knowledge and expertise in various fields as to maximize the potentiality in doing businesses.

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4. Develop new business plans and look for innovations to increase efficiency in doing businesses, enabling the Company to achieve business goals quickly and sustainably. 5. Develop itself to be a business organization which talented people wish to work for, as well as being able to keep valuable personnel within the organization by motivating employees with clear career path, providing job security and keep on promoting employeesâ&#x20AC;&#x2122; personal development continuously. 6. Doing businesses in accordance with the Corporate Governance principles and Social Responsibility taking into account of all the stakeholders: consumers, shareholders, employees, business partners, as well as communities and environment that are associated with Corporate Governance principles. The disclosure of information with transparency and the CSR-in-process and CSR-after-process are also strongly emphasized.

The Roles of Stakeholders

In doing the property development business, the projects would affect several stakeholders especially the surrounding communities. In this regard, the Company would conduct studies and analysis, as well as prepare the Environmental Impact Report for the projects that are likely to affect the community, with regards to the environmental quality, natural resources and health hazards as required by the Ministry of Environment and Natural Resources. The Company recognizes the importance of all stakeholder groups whether they are internal stakeholders such as shareholders and employees; or external stakeholders such as customers, competitors, creditors (financial institutes, bond holders), business partners (suppliers, contractors and business partners), the government and other relevant agencies including those involved with communities, society and and environment. The Company has tried to pursue the fair policies that are appropriate to each of the stakeholder groups as follow: Shareholders The Company is committed to delivering reasonable and fair compensation to the shareholders, while also focusing on the improvement and development of the business operations to achieve sustainable growth. The Company recognizes the importance of transparency in the disclosure of information to shareholders, keeping in mind that it must always be accurate, complete and timely and can be available through various channels including through electronic media of the Stock Exchange of Thailand, the Companyâ&#x20AC;&#x2122;s website, the announcement on the newspaper, press releases and in written newsletters. Employees The Company realizes the importance of employees, which is the major driving force of a business organization. Therefore, the Company is committed to strengthening the relationships between the Company and the employees as to create unity among each other. This is achieved through various activities such as developing human resources training policy and ensuring that employees get fair compensation and welfare concretely and continuously. Orientation for new employees are organized on a monthly basis as to equip them with the proper knowledge, skills, and understandings about the corporate culture so that they are able to adjust themselves to the working environment quickly. The new employees will be provided with the clear job description, on-the-job training (OJT) and the opportunity to attend the workshops of both within and outside the business units which are the platform for them to share and exchange knowledge, experience, and other information such as economic and social issues or other and relevant innovation.

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The Company focuses on fostering relationships among employees through the team building activities so that they get to know colleagues from other departments and be able to work together smoothly and efficiently. The activities will be held every year and there are also other events such as New Year Staff Party to establish good relationships between the management and employees. The compensation plan is justified by the Remuneration Committee in order to provide fair compensation for the employees. They also have the duty to consider appropriate staff promotion considering the ability of each individual, making sure that it is in accordance with the career path. Employees’ welfare and rights are clearly emphasized to keep employees happy, both physically and mentally, so that they feel motivated to work at full capacity. Welfare include the public holidays, insurance, compensation fund, the right for annual leave, sick leave, vacation leave, maternity leave, ordination leave, leave for sterilization, military training leave, leave for training, health and life insurance, health insurance for OPD, provident fund, and scholarships. For employees who want to buy a residential house or unit managed by the Company, they will also get special discount as an employee. They are also allowed to use the Sport Club of each project for exercise to keep their health fit and strong. The Company provides the opportunity to both executives and employees to share their opinion through various internal communication channels such as the Intranet and newsletter to create a better understanding among every employee. There are also workshops where staff can offer and exchange ideas directly with management on organizational development issues. The workshop is quite an effective two-way communication which has received satisfactory response from the employees. During the workshops, the primary information will be communicated directly and accurately to create better understandings among employees. In the near future, the Company plans to provide more communication channels for employees to share their ideas and opinion, especially those who are working at the project sites who may not easily access to the existing channels. The attempt is to keep them informed of the changing business situation amidst the high competition. For instance: -

People media: Those who are involved with the business plans will be required to visit sites on a monthly basis as to get comments and opinion and also to update the information for staff in each project such as updates on the Company’s new rules, news updates, updates on economic, social or legal trends so that they are able to keep abreast of the changing situation.

Create communication channel via Social Network through which Human Resources Department will have to propose the Company’s year-plan activities and then communicate to employees via these channels.

Communicate through social activities. In the future, the Company has set the plans to encourage employees to do more social activities. It will be a good opportunity for employees to meet and share ideas or information for future development of the organization.

Provide educational opportunities for employees to study further in the field related the Company’s business, so that they can apply new knowledge, experience and skills for future use in the business development.

Provide more learning tools for human resources development, apart from classroom or in-house training within the organization. Open opportunities for employees to further studies as to acquire new experience, learn of new technology, innovation, or new techniques and integrate them in the jobs under their responsibility.

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Keep on improving the compensation management plans in accordance with the changing economic situation, cost of living and the inflation rates so that employees have sufficient income for living.

- Keep on improving the welfare scheme in accordance with the changing economic and social situation to ensure of the work-life balance of the employees. Customers The Company focuses on producing quality products and services with the standards that meet customer satisfaction. We also place an emphasis on ethics in practice by servicing customers with good care, great responsibility, quality standard of services as well as providing solutions, and handling customer complaints or suggestions as quickly as possible. Products and services information will be accurately provided to customers. Customers will be well informed about the contact information in case of they want to file a complaint or contact the Company about the quality of the product. Customers Visiting at Site The Company put emphasis on the customers visiting the project by providing up-to-date information about the project’s progress, innovation, or new movement about the project for customers. We also follow up with customers, providing them with updated information, inviting them to revisit the sites any time when the Company organize any activities or launching new products. We keep in touch with customers using communication channels that does not interfere with customers such as SMS or E-mail and so on. Customers who are residents of the project. The Company places emphasis on customer care. For those who buy residential units in any of the Company’s projects, they will get consultation in every process starting from the process of buying to getting bank loans, and product delivery processes. The Company will keep customers informed of the project’s progress as well as provide consultation on the ownership transfer for a house / a condominium / or a property. In case, the Company cannot meet the agreement, the customers will be informed and get an offer to change to other property with the similar prices. In case customers have any particular needs that would benefit to the general public, the Company will provide the solutions that meet the utmost satisfaction of customers and the public. The Company also takes into account the customer’s care in every project and tries to build good relationships between each other. Therefore, the Company has come up with idea to create the quality society under the ‘Happy Living’ concept through which the Company will organize activities continuously throughout the year. This is to emphasize the creation of livable communities, for the better quality of living. The priority is to provide useful information for customers. We have the well-trained staff team who would collaborate with other property projects to get useful information regarding the living and services that would benefit residential members. Activities are considered an essential part which provide the opportunities for the project owner and customers to interact with each other and join to create good activities together. The Company considers it essential to provide complete and accurate information to customers so that they can get updated of any movement. We also have the policy to provide the channel through which customers can express and share their opinion or tell about their needs so we can develop the management system according to their preferences. This is to create the better understandings among each other and develop the services further for sustainable growth in the future.

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Competitors The Company strictly complies by the rules and regulations of the business competition, by adhering to the fairness and transparency in doing business, supporting the ideas of free and fair competition, avoid entering into any contract agreement that would lead to unfair competition or trade monopoly, base the business on the reaping mutual benefits of both parties, avoid searching for or interfering into the trade secrets of the competitors and will not destroy reputation by using any form of accusations towards business competitors. Creditors The Company would strictly follows the conditions and contract agreements made with the creditors and bond holders. The financial report of the Company will be updated to creditors accurately and timely with transparency, without concealing any information that will cause any damages to the creditors. The Company has issued the bond according to the requirements of the Securities and Exchange Commission and strictly complied with the policies and resolutions of the shareholdersâ&#x20AC;&#x2122; meetings. If the Company cannot fulfill its obligations in the contract, it will immediately inform or disclose the information to seek out solutions and measures to prevent any damages that may occur. Partners The Company would inquire about the product information and prices from the partners prior to making any purchasing or hiring orders, and will always join them in doing activities. At present, the business relationships has been smooth and we will continue using their products and services in the future. Contract Partners The Company would follow up the projectsâ&#x20AC;&#x2122; progress, site development as well as inquire about the problems and obstacles every time after issuing the hiring contract and after receiving complaints from customers. At present, the business relationships has been smooth and we will continue using their products and services in the future. Distributors In sourcing suppliers, the Company will inform the rules, opportunity, timing, information and accurate and complete data to all the suppliers entering the bidding process fairly and equally. This is to ensure that the sourcing process will be treated with transparency, fairness and honesty without any intervention from any influential body. Meanwhile, information obtained from bidding suppliers will be kept confidential without disclosing any figures or technical information of one supplier to another for any short-term benefits. Careful action will be placed on anyone who act as a broker for information or sourcing suppliers. The operations of this process complies with the ISO 9001: 2008 as follows. w Vendor Selection Process : The Company has appointed a working group to consider the procurement and suppliers sourcing processes. The working group also holds responsibility in gathering of information for further consideration such as the legal entity registration documents, the certificate of product quality, the certificate of product standards, products details, and the payment conditions and so on. w Price Checking System : The procurement working group would ask to check the items being purchased. The purchased items must already be listed in the suppliersâ&#x20AC;&#x2122; pricing system. In case, the items are not listed in the system to make the price comparison, the procurement will examine the materials, ensuring that they conform to the guidelines of material standards. The pricing comparison will be made among at least three vendors.

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w Special Method : The procurement working committee will examine the completeness and accuracy of the documents or inform to the vendors to get requirements and conditions for bidding proposal. After the vendors has proposed the price, the procurement working committee will then bargain or consider the proposed prices with the budget. After the consideration process is finalized, then comes the process to ask for hiring approval and purchasing orders approval according to the process set forth by the Company. w 9HQGRU $VVHVVPHQW The Company will have the construction administration and controllers to monitor and assess the suppliers. The evaluation process will be conducted after the project delivery and the assessment will be made once every six months. Aside from that, the Company also hold the meetings or make phone discussion with the suppliers every 3 months on matters related to construction, such as new technology, new materials, or new techniques and also problems in the workplace and solutions to solve the problems. Contractors The Company will consider selecting suppliers which has proven track records that meet the Company’s standard and whose performance is generally accepted. Suppliers are also required to have strong financial status. The procurement process will be operated with transparency, fairness and honesty, without any intervention from any influential body. Every contractor must be approved by the Company’s Board of Directors. The Company will hire the contractors at the fair price under the requirements as specified by the ISO 9001: 2008 as follows: w 6XEFRQWUDFWRU 6HOHFWLRQ 3URFHVV The Company has a working group for sourcing out contractors and gather information for consideration such as registered capital or loans given from the banks, the number of personnel, 2-year performance, financial limitation and capacity in handling the project. The profile will then be kept in the database of the Company. w %LGGLQJ 3URFHVV The working group will send the invitation letters or make announcement inviting contractors to enter the bidding process. In the selection process, there must be three contractors join in the bidding. In case of the contractor has proposed the prices but not wanting to join the bidding process which resulted in less than three contractors, the next step of decision whether to call for more contractors to join the bidding process or to continue the selection process will be upto the Company’s consideration. w 6HWWLQJ RI 6WDQGDUG 3ULFHV The working group would calculate the overall value of construction work by multiplying the unit price of the materials and labor. After the standard price is set and approved by the procurement subcommittee, the approved standard prices will be reviewed twice a year. w &RQWUDFWRUV (YDOXDWLRQ The Company has a working group to evaluate the contractor’s performance. The evaluation would be conducted after the project delivery and would be summarized once every 6 month. Aside from that, the Company also has a meeting or make phone calls for discussions with the contractors every 3 months on matters related to construction such as new technology, new materials, migrant workers, techniques or working procedures, problems and solutions during the construction work and so on.

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CSR in Process

The Company has set a clear vision and mission, taking into account the Corporate Social Responsibility in the process of doing business (CSR in Process). CSR concepts will be applied in the overall business processes. All stakeholders are also engaged in the Company’s activities in various business aspects. Fair Business Practices w )DLU &RPSHWLWLRQ The Company strictly follows the rules and regulations of business competition, based on fairness and transparency under legal frameworks. This include the support of free trade, avoid entering in the contracts that would lead to unfair competition or trade monopoly but would base on the mutual benefits of both parties, avoid searching for or interfering with trade secrets of business competitors by any tactical methods, and will not engage in any activities that would destroy the reputation of the competitors. The Company’s business practices are based on the following principles: 1. Avoid any engagement into activities that are likely to cause business conflicts. If there are any conflicts happen, there will be the process to resolve the problems based on fairness, transparency and accuracy in information disclosure. 2. Support the fair and free trade and avoid the any behaviors that lead to conspiracy. 3. Do not support any activities that would violate the intellectual property rights. 4. Do not make any propaganda or release out false information that would lead to misunderstandings and cause damages to consumers. w &65 SURPRWLRQ LQ WKH VXSSO\ FKDLQ The Company realizes the importance of all stakeholders – internal ones like shareholders and employees and external ones like customers, competitors, creditors (suppliers and contractors), the government sector and other relevant agencies, as well as society and environment. The Company has attempted to be fair and reasonable to all stakeholders. Anti-Corruption w $QWL FRUUXSWLRQ SROLF\ The Company has policies to run business with transparency, morality, business ethics, under law enforcement, and with anti-corruption measures as following (1) The Company has clear practices indicating that all staff should treat all subcontractors equally. The practices care for balanced benefits of both based on contract. Act or omit to act which benefits subcontractor is considered a severe offense and severe punishment is expected. (2) The Company communicates throughout directors, executives, and operation staff levels and requires them to work with honesty, under Company’s ethics and law enforcement. (3) Human Resources Division, the office of the Secretary, and Internal Audit are assigned to provide staff consultancy to avoid unintentional offense. (4) The Company provides channels to report about behavior which may relate to internal corruption. Moreover, the Company’s internal audit body takes full responsibility to monitor operation, purchase, bidding and price checking process. A subcommittee is assigned to look after purchase and hiring.

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w 3UDFWLFHV DFFRUGLQJ WR WKH &RPSDQ\tV SROLF\ The Company has set standard practices for all executive which are written clearly. w $QQRXQFHPHQW DERXW SHUIRUPDQFH DQG ZRUN SURJUHVV The Company puts high importance on disclosing information to all staff concerned. Information disclosed is accurate, trustable, complete and timely. All people concerned can access to the information equally. Defence of Human Rights w 3ROLF\ DQG SUDFWLFHV The Companyâ&#x20AC;&#x2122;s operation depends on human resources from various areas namely 1. Companyâ&#x20AC;&#x2122;s staff namely permanent staff, probationary employees, contract employees and full-time workers. 2. Subcontractors 3. Business partners/builders as well as business partners/buildersâ&#x20AC;&#x2122; employees The Company realizes importance of all people concerned. Business is based on human right defence and humanity. Companyâ&#x20AC;&#x2122;s employees, subcontractors and business partners are well treated respectably, equally, fairly, and with humanity without discrimination on sex, religion, race, culture, disability. The Company respects uniqueness, rights and duty, different opinion regarding politic, society, belief, religion and tradition of each people, The Company does not support Human rights violation, child labour, illegal labour, human trafficking, illegal alien labour, in all methods. The Company strictly considers law restriction as its standard practices. Nevertheless, staff in all departments lends their hands in monitoring human rights violation. This practices get very good support recently. In the near future, Asean Economic Community will cause flow of foreign labour into Thailand, particularly real estate business. For better understanding and appropriate practices, the Company is preparing for the change and educates its employees and all people related about regulation, proper practices and law enforcement and amendments such as - Act/ Ministerial regulations/ all regulations related to alien labour - Act/ Ministerial regulations/ all regulations about job descriptions and career reserved for Thai nationalities. - Carrier allowances for all Asean nationalities. w ,PSRUWDQFH PHDVXUHV DERXW ODERXUtV ULJKWV The Company provide safe workplace for all employee and encourage workable, hygienic environ for workers remains healthy, safe and work happily. The policy is as following. w 6HW DFFXUDWH ZRUNLQJ KRXUV DFFRUGLQJ WR /DERXU /DZ w 6HW DSSURSULDWH 2YHUWLPH VKLIW SXEOLF KROLGD\ VKLIW ZRUN DQG ZDJH DFFRUGLQJ WR /DERXU /DZ w (PSOR\HH KDV ULJKW WR WDNH OHDYH DFFRUGLQJ WR /DERXU /DZ w 6HW D ZHOIDUH FRPPLWWHH WR VLW DV DV RUJDQL]DWLRQ DPRQJ WULSOH HQWHQWH WR VHW SROLF\ JXLGHOLQH DQG PHDVXUHV about labour welfare w 3URYLGH VDIHW\ HTXLSPHQWV DQG WRROV IRU FRQVWUXFWLRQ ZRUNHUV VXFK DV VDIHW\ VKRHV KHOPHW DW ZRUN w 3URYLGH VDIHW\ FRXUVH DW ZRUNSODFH WR HGXFDWH ZRUNHUV DQG UDLVH WKHLU VDIHW\ VNLOO

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Fair labor treatment w (PSOR\PHQW DQG ODERU UHODWLRQV The Company has policy on fair employment, by determining wage structure in accordance with positions/ work types/ responsibilities, as well as each employee’s professional background. In addition, the Company has designated the remuneration committee to identify appropriate payment which should be paid to employees and set out criteria for promotion decision on the fair basis for all. In terms of labor relations, the Company has designated the business welfare committee to take part in setting out policies, guidance, and measures regarding labor welfare. In this regard, appropriate welfares for all employees have been clearly set out, such as traditional holidays/social security/ compensation fund/ sick leave - errand leave - maternity leave - ordination leave – sterilization leave – military leave – training leave/ health insurance / medical fees for OPD patient / provident fund. When a newly recruited employee commences his/her employment, orientation will be arranged to create correct understanding on rights and welfares which he/she will receive, as well as to introduce information for a new employee to adapt him/herself to the organization as fast as possible. For employees working in each sector, the Company always provides training to enhance their knowledge, skills, and experiences based on their work and duty requirements so they can perform their work with efficiency and effectiveness to achieve the desired goals. In addition, during business performance, the Company also communicates information, news, and activities within the organization through intranet and open opportunities to hear from employees. The Company opens to employees’ suggestion in order to improve wage payment, welfare, and working conditions to enhance employees’ quality of life. Responsibility to Consumers w The Company attempts to develop real estates to meet quality standard by focusing on standardization of design and construction monitoring to meet with customers’ satisfaction. This is considered as guidance for determining ISO 9001:2008 standard which covers business performance of real estate development typed land and household construction, emphasizing on the housing and condominium development in Bangkok Metropolis and its suburb areas, including from construction design, construction monitoring, contractor monitoring, machineries, sales processes, procurement, quality control, to products delivery to customers and after-sales services. This is to ensure the customers with quality standard products and services. The Company’s works under the set policy determine responsibilities for each department under the ISO 9001:2008 standard as follows: -

Human Resource Division: To provide training to employees subject to the determined annual work plan.

Construction Management Division: To enhance the efficiency of procurement and contractor/ hired people hiring, as well as to control costs and time of construction.

Sales Management Division: To enhance works related to sales.

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Design Division: To enhance efficiency in controlling and allocating construction layout, and to reduce errors of layout.

Construction Management Division: To deliver house within the timeline, to reduce errors of construction and to maximize customers’ satisfaction.

Site Office Department: To provide infrastructures and public assistance on site.

PF Service Department: To provide repairing services and to deliver repaired works with quality to customers.

The Company received ISO 9001:2008 for horizontal housing development project on 9 Dec 2013, for the period of 3 years, which requires surveillance audit annually. In the future, there is a plan to expand ISO 9001:2008 to other sectors of the Company. In this connection, the Company also focuses on the continuous development of products and services, including the selection of standard materials and the development of construction technologies. This is to provide our customers with higher quality products and services. From such guidelines, Perfect Masterpiece Rattanathibet Project received Thailand Property Awards 2012 for Excellent Housing Developer, and Perfect Place Rangsit Project received a honorable trophy of “2012 Best Public Real Estates: Detached House”. In addition, the Company recognized the importance in choosing construction materials and in using construction innovations to enhance the quality of life and household, by integrating technologies to all processes of construction, including partnering with SCG by using quality and environmental-friendly materials for construction, and bringing construction innovation of Modular system called “SCG HEIM innovative House” for internally developing the Company’s projects. During the big flood in 2011, Construction Management Division: assisted employees and residents encountering flood by providing temporary accommodations, assisting in properties relocation, supporting utilities and foods required for survival during the flooding crisis, as well as fixing the conditions of houses in the project affected by flood with full efforts. In 2014, Construction Management Division: had a plan to organize an event by inviting suppliers who are trading partners of the Company to educate residents of Property Perfect PLC.’s projects on products and to sell products at the lower prices than market prices. This could help reduce residents’ expenses during the high-cost of living period. There was also the demonstration on D.I.Y. house repair for all residents to further apply it themselves. In addition, the Company recognizes the importance on the Code of Conduct, by providing care and responsibility to all residents through quality and standard after-sales services to satisfy the residents. The Company also opens channels for residents to share their comments, thoughts, and to report their wishes and problems of the project for better management. This is also to create good understanding and to develop the organization further.

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Environmental Conservation Extreme concerns are placed for the environment, reflected the environment management inside development projects and surrounding communities. This results in the quality of life of the projects’ dwellers and those living in surrounding communities as well as the general public. Environmental Impact Assessment is conducted for the projects which may cause impacts on community, aside from studies and researches on environmental and health impacts, as required by the Natural Resources and Environment Ministry. The Company also focuses on energy conservation, as reflecting through the designing process, the use of appropriate and environmental-friendly construction materials. Aside from enhancing the quality of life, this will also reduce energy consumption. Aside from energy-saving home designs, the Company also partners with SCG introducing some of energy-saving materials in development projects such as cooling roof tiles. Following this road, the Company’s projects won the Natural Resources and Environment Ministry’s EIA Monitoring Awards for three consecutive years, recognized for the outstanding environmental management. Some housing estates also won the outstanding energy-saving awards from the Energy Ministry’s Department of Alternative Energy Development and Efficiency. The following are the award-winning projects: -

2005 - 2007: Award u7KH %HVW (QYLURQPHQWDO 0DQDJHPHQW 3URMHFWv for Perfect Place Rattanathibet and Perfect Place Ramkhamhaeng Phase 1

2006 - 2008: Award u7KH %HVW (QYLURQPHQWDO 0DQDJHPHQW 3URMHFWv for Perfect Place Ramkhamhaeng Phase 2 and Phase 3

2008: Award u7KH %HVW (QHUJ\ &RQVHUYDWLYH +RXVLQJ 'HYHORSPHQW 3URMHFWv from house layout and house development project with care for energy conservation in terms of design, materials selection, layout, and good administration. The Company received up to 10 awards in several sectors, including $ZDUGV IRU 6PDOO 'HWDFKHG +RXVH with utility space up to 200 square meters, $ZDUGV IRU 0HGLXP 'HWDFKHG +RXVH with utility space from 200 to 300 square meters, $ZDUG IRU 7RZQ +RXVH with utility space up to 120 square meters, $ZDUG IRU 7RZQ +RXVH with utility space over 120 square meters, $ZDUG IRU 6PDOO +RXVLQJ 'HYHORSPHQW 3URMHFW with up to 99 parcels, Award for Medium Housing Development Project with 100 - 299 parcels, and $ZDUG IRU /DUJH +RXVLQJ 'HYHORSPHQW 3URMHFW with over 300 parcels.

2014: The Company received 2 awards of u7KH %HVW (QHUJ\ &RQVHUYDWLYH +RXVLQJ 'HYHORSPHQW 3URMHFWv, including $ZDUG IRU 6PDOO +RXVLQJ 'HYHORSPHQW 3URMHFW with up to 99 parcels from Perfect Place Masterpiece Rangsit, and $ZDUG IRU 0HGLXP +RXVLQJ 'HYHORSPHQW 3URMHFW with 100 - 299 parcels from Perfect Place Chaeng Wattana as house development projects with care for energy conservation in terms of design, project layout, and project management including for electricity, lightings, water management, sanitation system, waste management, as well as alternative or renewable energy, and project environmental management.

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Community and Social Development The Company has a policy on continuous social contribution, in particular the Companyâ&#x20AC;&#x2122;s recognition on the quality of life improvement of nearby communities on regular and continuous basis. In 2014, the Company performed activities regarding environmental conservation, landscape improvement of nearby areas, infrastructure repair, as well as sanitation works for several projects, such as

(QYLURQPHQWDO &RQVHUYDWLRQ w ,QVSHFWLRQ RI ZDWHU WUHDWPHQW SRQG RQ PRQWKO\ EDVLV DQG RXWVRXUFH D &RPSDQ\ IRU LQVSHFWLQJ ZDWHU TXDOLW\ HYHU\ months whether it is polluted, before draining out. w 'UHGJLQJ RI %DQJ 3UD 6X &DQDO LQ %DQJ 0DH 1DQJ 6XE GLVWULFW ORFDWHG DURXQG 3UHIHFW 3ODFH 5DPD 9 x %DQJ Yai Project to drain water without obstacles and to prevent wetlands in the surrounding areas. w &XWWLQJ JUDVVHV DORQJ 3UDFKD 8WKLW 5RDG LQ IURQW RI 3UHIHFW 3ODFH 5DPD 9 x %DQJ <DL 3URMHFW DQG LQVWDOO PHWDO sheet fence at the bridge to prevent travelling vehicles from falling into the canal. w 'LVSRVLQJ ZHHGV LQ WKH SXEOLF FDQDO QHDUE\ SURMHFWV ORFDWHG LQ 5DWWDQDWKLEHW ]RQH WR DYRLG ZHDOGV ZKHUH SRLVRQRXV animals will live in. w &XWWLQJ SODQWV LPSHGLQJ ZDWHU IORZ LQ 5DQJ %XD FDQDO ZKLFK LV D SXEOLF FDQDO DURXQG WKH RXWHU VLGH RI 1DQWDQD Garden Park Place Project in order to facilitate the nearby communities. w &XW JUDVVHV DORQJ WKH ZDON ZD\ XVHG E\ WKH FRPPXQLWLHV OLYLQJ QH[W WR WKH IHQFH RI 0DQHHULQ /DNH 3DUN 3URMHFW

&RQVWUXFWLRQ DQG 5HSDLU RI ,QIUDVWUXFWXUHV w %XLOG D ZDONZD\ E\ IORRULQJ ZLWK VKHHW IORRULQJ RXWVLGH WKH HQWLUH IHQFH RI 3UHIHFW 3ODFH 5DPD 9 x %DQJ <DL Project for people living in nearby communities. w )L[ URRI DQG SDLQW SDVVHQJHU JD]HER DW WKH MXQFWLRQ EHIRUH DSSURDFKLQJ 3UHIHFW 3ODFH 5DPD 9 x %DQJ <DL 3URMHFW w ,PSURYH URDG VXUIDFH RI .RN :XD x 5RQJ )RDP 5RDG WR IDFLOLWDWH SURMHFW UHVLGHQWV DQG SHRSOH OLYLQJ LQ WKH QHDUE\ areas of Prefect Place Rama V â&#x20AC;&#x201C; Bang Yai Project. w ,QVWDOO ZDUQLQJ OLJKW DORQJ 3UDFKD 8WKLW 5RDG LQ IURQW RI 3UHIHFW 3ODFH 5DPD 9 x %DQJ <DL 3URMHFW w ,QVWDOO FRQYH[ PLUURU RQ WKH 6XE GLVWULFW $GPLQLVWUDWLYH $XWKRULW\tV URDG DQG WKH HQWUDQFH H[LW RI 0DQHHULQ /DNH 3DUN Project which is communityâ&#x20AC;&#x2122;s traveling way, in order to reduce accidents Community Sanitation w &RRUGLQDWH ZLWK 5DFKD 7KHZD 6XE GLVWULFW $GPLQLVWUDWLYH $XWKRULW\ WR VSUD\ PRVTXLWR HOLPLQDWRU IRU PHPEHUV RI 3HUIHFW Place Sukhumvit 77 â&#x20AC;&#x201C; Suvarnabhumi Project in September 2014. w &RRUGLQDWH ZLWK 3UDZHW 'LVWULFW 2IILFHtV RIILFHUV WR JHW DOO KRPHOHVV GRJV OLYLQJ DURXQG WKH HQWUDQFH RI RI 3HUIHFW Place Sukhumvit 77 â&#x20AC;&#x201C; Suvarnabhumi Project and send them to Dog Care Center in Uthai Thani Province. w &RRSHUDWH ZLWK 6DLPD 0XQLFLSDOLW\ WR VSUD\ PRVTXLWR HOLPLQDWRU IRU SURMHFWV LQ 5DWWDQDWKLEHW =RQH WR SUHYHQW contagious disease and for good health of the residence.

156

'LVWULEXWLRQ RI &65 ,QQRYDWLRQV The Company has applied CSR concept in the process and experiences gianed in the process have been improved and turned into innovations which could benefit both the operations and society as a whole. Such innovations include the project planning, development and management which takes into consideration social and environmental impacts. Business innovations cultivated through experience and technology are also applied to mitigate and cope with possible problems. The innovations to benefit society and environment are as following examples. w ,QQRYDWLRQ IRU SUHYHQWLQJ IORRG RI KRXVLQJ GHYHORSPHQW SURMHFWV DQG SUHSDUDWLRQ RI PDQXDOV IRU SURFHVVHV DQG approaches used to take care and recover housing conditions after flood during the end of flood in 2011. w 6WDUW WR XVH DOWHUQDWLYH HQHUJ\ LQQRYDWLRQ VXFK DV VRODU HQHUJ\ IURP VRODU FHOOV WR UHGXFW HQHUJ\ FRQVXPSWLRQ in central area and sales office, by having Perfect Place Chaeng Wattana as a pilot project whereas alternative energy will be applied to other projects later. w (QHUJ\ FRQVHUYDWLRQ XQGHU *UHHQ (QYLURQPHQW +DSS\ ZLWK )ULHQGO\ (QYLURQPHQW FRQFHSW ZKLFK LV KDSSLQHVV from living in a house close to nature, surrounded by good environment, with more central spaces, including resting park and wide lake providing chilling breeze and fresh air, covering the selection of energy-saving and environmentalfriendly materials, such as cool innovation roof by SCG, CPAC Monier tiles with air ventilation system under roof, heat-reduction eaves, light-filtered green mirror, gypsum sheets with anti-heating foil, and the use of alternative materials to help maintain good environment, such as Laminate wood floor which is strength but beautiful like real wood, and aluminum frames which are endure and neat.

CSR after Process The Company well recognizes our social duties and responsibilities relating to core processes of our business, in particular supporting social projects and activities on continuous basis with an aim to contribute or development and payback to the society with social activities. These works have been performed continuously throughout the entire year. Regarding works done in 2014, the Company had social activities, including â&#x20AC;&#x153;*LYLQJ )RRG WR WKH PRQNV 5HFHLYLQJ JRRGQHVVv which has been organized on continuous basis at its 5th anniversary which was previously organized at Perfect Park Bangbuathong Project to raise fund and to donate for Wat Prabat Namphoo in Lopburi Province, as well as to allow members of such project to cooperatively donate things, foods, clothes, medicines, and medical equipment to Wat Prabat Namphoo. The Company also participated in u%ORRG 'RQDWLRQ (YHQW WR 3D\ /R\DOW\ WR +LV 0DMDHVW\ WKH .LQJv in order to take a part in highly realizing the greatest kindness of His Majesty the King and to do good things for His Majesty the Kingâ&#x20AC;&#x2122;s happiness, in cooperation with the National Blood Center of the Thai Red Cross Society continuously for the 3rd year at Perfect Place Rattanathibet and The Lake@Metro Park Sathon. During fundraising process for research and development of Amyotrophic Lateral Sclerosis or ALS treatment through an activity called Ice Bucket Challenge, Khun Chainid Adhyanasakul, Chief Executive Officer, also joined the activity and donated 500,000 Baht of donation to the Redemptorist Foundation to be a part in constructing the Youth Training Center of the local tribes in Ban Pa Fang in Chiang Mai Province. The Company gave scholarships worth 200,000 Baht for medical students under 'RFWRU 3URGXFWLRQ IRU 5XUDO 3HRSOH SURMHFW of Mahidol University on the occasion of the merit making event for people donating their death body for education in 2014, as well as gave 100,000 Baht for +RXVHKROG &RQVWUXFWLRQ IRU 8QGHUSULYLOHJHG People in cooperation with Bangkok Pattana International School.

157

ANNUAL REPORT 2014

Under the concept of u3HUIHFW +DSS\ *LYLQJg 1HYHU HQGLQJ +DSSLQHVV IURP *LYLQJv, the Company collaborated with the Mirror Foundation to organizes u3D\ ,W )RUZDUGv project, inviting members from several projects and the Company’s employees to share second-hand clothes and accessories in good conditions. Part of the donation made was sent to people living in 13 Homes for Homeless around Thailand. The other part was sold for fundraising which revenue gained will be used to support the Mirror Foundation’s initiatives. This activity has been continuously organized throughout the year. In addition, the Company urged all residents to work out with biking through a campaign u+DSS\ /LYLQJ 'D\v, and organized an activity called u6SLQ %LNH %LNH IRU 0LOHVv for the donation to the Redemptorist Foundation for people with disabilities.

Corruption Prevention Measures The Company set out policy to work with transparency, morality, under laws and the Company’s code of conduct. As for the Company’s set business ethics, all employees are prohibited from asking for any property or benefit from trading partners, contractors, or any relevant person, and are prohibited from using the Company’s properties or name or position for personal benefits. All executives and employees should avoid receiving gifts from trading partners or contractors unless such gift is given in accordance with tradition and with reasonable value which should not higher than normal. The Company concerns probability of corruption and put this issue into risk assessment for the achievement of the organization objectives. The Company assessed probability of corruption and reviewed its implementation targets thoroughly to know whether compensation made to all employees is reasonable and the rate will not foster employees to conduct any wrongdoing. The audit committee also inquired executives regarding corruption probability and measures used to prevent and handle such matter. The organization is also required to identify and assess changes which may affect its internal control based on its external factors and the change of business patterns which may affect the business, internal control, and financial statements. Then, the Company can set out sufficient measures for handling this matter. Practices under the Policy on the Prevention of Corruption Involvement The Company set out practices for all employees to comply with against all contractors on the basis of fairness, based on mutual and fair interests of both sides, under trading agreement made. In addition, the Company does not allow any action or inaction which can provide benefits to the contractor. In case of breaching, the Company will consider as serious commit which will result in high level of punishment. There are activities conducted to prevent corruption involvement as follows:

158

The Company communicates policies throughout the Company, including directors, executives, and employees, requesting operations with honesty, strictly under laws, and following the Company’s ethics.

The Company provides reporting channels regarding the suspected occurrence of corruption matters within the Company.

Assign HR Department, the Company’s Secretariat, and Internal Audit Department to provide consultation for employees to prevent unintentional wrongdoings.

The Company provides reporting channels regarding the suspected occurrence of corruption matters within the Company.

Provision of cooperation to internal auditors and third party auditors: Personnel at all levels is required to provide fully support and complete information to Audit Department and the Company’s auditor in charge of auditing and assessing processes, procedures, and system of internal control whether they are sufficient, effective, and able to completely satisfy the desired targets, as well as suggesting points needing improvement as appropriate.

Follow up and Evaluation of the Policy on the Prevention of Corruption Involvement The Company follows and assesses the Policy on the Prevention of Corruption Involvement whereas there are several units providing business monitoring on regular basis, including the auditing committee, Internal Audit Department, HR Department, and the Companyâ&#x20AC;&#x2122;s Secretariat. The Company expects everyone to report faithfully on any performance which breaches or may breach the desired principles, directly to the supervisor. In case that it is impossible to report to the supervisor, you may receive advice from the Companyâ&#x20AC;&#x2122;s Secretariat, Internal Audit Department, or HR Department. All information reported will be treated confidentially. The supervisor also has a duty to monitor and provide suggestions to his/her subordinates on the basis of hierarchy to comply with the Companyâ&#x20AC;&#x2122;s policy and code of conduct within the desired principles on regular basis. There is an independent committee separate from the Management to oversee and to develop internal audit works. The Company board is to monitor the Company to set a clear target for business performance which must be concretely evaluated and practical, as well as to monitor the Company to determine responsibilities for all directors and executives in accordance with laws and instruments, covering key roles for the board of directors, account auditor, internal auditor, and a person responsible for financial statements. The Companyâ&#x20AC;&#x2122;s Board of Directors consists of independent directors with reliable knowledge and abilities who can perform work with independency indeed at an appropriate and sufficient number. The Companyâ&#x20AC;&#x2122;s Board of Directors oversees development and performance regarding internal control by using the following approaches to follow up and evaluate the business performance. w 7KH RUJDQL]DWLRQ IROORZV DQG HYDOXDWHV LQWHUQDO FRQWURO UHVXOWV WR HQVXUH WKDW WKH LQWHUQDO FRQWURO KDV EHHQ SHUIRUPHG completely and appropriately: Company has approaches to follow up the compliance to the business code of conducts and prohibitions for all executives and employees to act in any way which may create conflict of interest. The supervisor of each section and Internal Audit Department will follow up and evaluate the internal audit system and directly report to the auditing committee which will help foster internal auditors to comply with the International Standard for The Professional Practice of Internal Auditing (IIA). w 7KH RUJDQL]DWLRQ HYDOXDWHV DQG FRPPXQLFDWHV SUREOHPV RI LQWHUQDO FRQWURO RQ WLPHO\ EDVLV WR SHUVRQ LQ FKDUJH LQFOXGLQJ KLJK OHYHO H[HFXWLYHV DQG WKH %RDUG RI 'LUHFWRUV DV DSSURSULDWH Company will evaluate and communicate problems of internal control which will be resolved promptly. The Management will report to the Board of Directors and the internal auditing committee, including significant problems and solutions during the reasonable period of time, such as in case of the occurrence or the suspected occurrence of serious corruption. In this regard, the committee verified this paper and agreed that the Companyâ&#x20AC;&#x2122;s internal control system is consistent with the Companyâ&#x20AC;&#x2122;s Board of Directorsâ&#x20AC;&#x2122; opinions. In addition, the opinions on financial statements from the Companyâ&#x20AC;&#x2122;s accounting auditor do not represent any significant problem of internal control system which may damage the Companyâ&#x20AC;&#x2122;s performance.

159

ANNUAL REPORT 2014

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) Overall group business The Group of Companiesâ&#x20AC;&#x2122; business and revenue is grouped in 3 main categories as follows: (1) Property development business Property development is the primary business of the Group of Companies. A variety of projects are developed under various brands. By type, they can be categorized into 3 groups. w 6LQJOH KRXVH WZLQ KRXVH DQG WRZQKRXVH ORZ ULVH WKH *URXS KDV GHYHORSHG VLQJOH KRXVH DQG WRZQKRXVH SURMHFWV under various brands like Perfect Place Masterpiece, Perfect Place, Perfect Park, Modi Villa, The Metro, Modi 9LOOD 7RZQKRPH DQG 7KH 9LOOD w &RQGRPLQLXP KLJK ULVH WKH *URXS KDV GHYHORSHG ORZ ULVH FRQGRPLQLXPV ZLWK KHLJKW QR PRUH WKDQ IORRUV DQG KLJK ULVH FRQGRPLQLXPV ZLWK IRFXV RQ KLJK SRWHQWLDO ORFDWLRQV QHDU HOHFWULF WUDLQ URXWHV FRPPXQLWLHV DQG WUDQVSRUW QHWZRUNV 7KH EUDQGV LQFOXGH 7KH 6N\ 0HWUR 6N\ 0HWUR /X[H 7KH /DNH 0HWUR 3DUN L&RQGR %HOOD Costa and Uniloft. w /DQG EDQN WKH FRPSDQ\tV SROLF\ LV WR EX\ ODQG IRU SURMHFW GHYHORSPHQW QRW IRU UH VHOOLQJ SURILWV LQ WKH VKRUW RU long term. However, the Company may consider selling some land plots that show no development potential or ODQG SORWV QHDU H[LVWLQJ SURMHFWV ZKLFK GR QRW PDWFK WKH JURXStV IXWXUH GHYHORSPHQW SODQV FRQWDLQV LQDSSURSULDWH shapes or shows no commercial value. (2) Hotel and resort business ,Q WKH IRXUWK TXDUWHU RI WKH *URXS DFTXLUHG .LURUR 5HVRUW D VNL UHVRUW LQ $NDLJDZD 9LOODJH +RNNDLGR -DSDQ 6QRZ DW this location is one of the best in Japan. The resort is located in a beautiful scenery, making it perfect for tourism in all seasons. Akaigawa Village is renowned as the second most beautiful village in Japan. (3) Retail business The Group is developing several shopping malls, office buildings and commercial properties.

160

Analysis of consolidated performance and financial position Analysis of consolidated performance Overall performance In the past 3 years, the Company and subsidiaries continuously launched development projects in line with growing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in the fourth quarter. Other revenue was Bt176.07 million. The consolidated property development cost in the year totaled %W PLOOLRQ ZKLOH WKH KRWHO EXVLQHVV UHTXLUHG WKH RSHUDWLQJ FRVW RI %W PLOOLRQ 7KLV WUDQVODWHG LQWR WKH JURVV SURILW PDUJLQ RI DQG UHVSHFWLYHO\ 7KH FRQVROLGDWHG VDOH DQG DGPLQLVWUDWLYH H[SHQVHV WRWDOHG %W PLOOLRQ ZKLOH ILQDQFLDO H[SHQVHV UHDFKHG %W PLOOLRQ ,Q WKH \HDU WKH FRQVROLGDWHG QHW SURILW UHDFKHG %W PLOOLRQ or 2.19% of total revenue. ,Q WKH FRQVROLGDWHG UHYHQXH VWRRG DW %W PLOOLRQ RU DQ LQFUHDVH RI IURP 2I WRWDO SURSHUW\ GHYHORSPHQW EXVLQHVV JHQHUDWHG %W PLOOLRQ 7KRXJK WKH &RPSDQ\ DQG VXEVLGLDULHV ODXQFKHG QHZ SKDVHV LQ H[LVWLQJ SURMHFWV DQG ODXQFKHG QHZ ORZ ULVH SURMHFWV KRXVH VDOHV JHQHUDWHG RQO\ %W PLOOLRQ RU DQ LQFUHDVH RI IURP 2012. Though the revenue in the first nine months of the year rose by Bt72.01 million from the previous year, political demonstration hampered the business in the fourth quarter. The Company had to delay construction works and transfers of ILQLVKHG KRXVHV FDXVLQJ WKH UHYHQXH LQ WKH IRXUWK TXDUWHU WR IDOO EHORZ WKH VDPH SHULRG ODVW \HDU E\ %W PLOOLRQ 'XULQJ the year, subsidiariesâ&#x20AC;&#x2122; condominium projects started to transfer complete units, allowing the realization of revenue from 4 more condominium projects. In the year, the Company reaped revenue from altogether 6 condominium projects. The sale RI 8QLORIW 6DOD\D WR 8QLORIW 3URSHUW\ )XQG UDLVHG UHYHQXH IURP KLJK ULVH GHYHORSPHQW EXVLQHVV WR %W PLOOLRQ 3URFHHGV from land plot sale also helped push property development business revenue Bt1,174.42 million above the 2012 level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net profit in 2013 was Bt41.42 million, representing the net profit margin of 0.37%. ,Q WKH FRQVROLGDWHG UHYHQXH VWRRG DW %W PLOOLRQ FRQVLVWLQJ RI %W PLOOLRQ IURP SURSHUW\ development business. Though the property market witnessed an impact from political uncertainties in the first half of 2014, the Group managed to generate more revenue from the business than in 2013. The consolidated revenue from house sale GHFUHDVHG E\ %W PLOOLRQ IURP EXW WKH FRQVROLGDWHG UHYHQXH IURP FRQGRPLQLXP SURMHFWV DQG WKH VDOH RI ODQG SORWV LQFUHDVHG E\ %W PLOOLRQ DQG %W PLOOLRQ 7KLV KHOSHG LQFUHDVH WKH WRWDO UHYHQXH IURP SURSHUW\ GHYHORSPHQW

161

ANNUAL REPORT 2014

EXVLQHVV E\ %W PLOOLRQ IURP 7KH &RPSDQ\ DOVR JHQHUDWHG %W PLOOLRQ IURP KRWHO EXVLQHVV DQG %W PLOOLRQ IURP RWKHU DFWLYLWLHV 7KH FRQVROLGDWHG SURSHUW\ GHYHORSPHQW FRVW VWRRG DW %W PLOOLRQ ZKLOH WKH KRWHO RSHUDWLQJ FRVW ZDV DW %W PLOOLRQ UHSUHVHQWLQJ JURVV SURILW PDUJLQ RI DQG UHVSHFWLYHO\ 7KH FRQVROLGDWHG VDOH DQG DGPLQLVWUDWLYH H[SHQVHV WRWDOHG %W PLOOLRQ ZKLOH ILQDQFLDO H[SHQVHV VWRRG DW %W PLOOLRQ 7KH QHW SURILW ZDV %W PLOOLRQ SXVKLQJ WKH QHW SURILW PDUJLQ WR Property sale to property funds ,Q WKH IRXUWK TXDUWHU RI %ULJKW 'HYHORSPHQW %DQJNRN &RPSDQ\ /LPLWHG VROG 8QLORIW 6DOD\D ORFDWHG LQ 7DPERQ 6DOD\D %XGGKDPRQGKRO GLVWULFW 1DNKRQ 3DWKRP WR 8QLORIW 3URSHUW\ )XQG IRU %W PLOOLRQ %ULJKW WUDQVIHUUHG WKH RZQHUVKLS of the property to the fund and the Company/subsidiary has no policy or the right to buy back the property. The Company thus fully booked the revenue and development cost in the statement of comprehensive income, as revenue and cost of FRQGRPLQLXP VDOH +RZHYHU WKH &RPSDQ\ HQWHUHG LQWR D \HDU OHDVLQJ FRQWUDFW ZLWK WKH IXQG SURPLVLQJ WR SD\ WKH IL[HG UHQW RI %W PLOOLRQ SHU DQQXP DQG WR DOORZ WKH IXQGtV OHDVLQJ FRQWUDFW H[WHQVLRQ E\ DQRWKHU \HDU 7KH &RPSDQ\ FRQVHTXHQWO\ VHW DVLGH %W PLOOLRQ DV SURYLVLRQV DJDLQVW SRVVLEOH ORVV IURP WKH JXDUDQWHHG UHQWV LQ $GGLWLRQDO provisions of Bt24.03 million were set aside in 2014. Revenue 'XULQJ DQG WKH &RPSDQ\ DQG VXEVLGLDULHV HDUQHG UHYHQXH SULPDULO\ IURP WKH SURSHUW\ GHYHORSPHQW EXVLQHVV which covered the sale of housing units, condominium units and proceeds from land bank sale. However, the Company and subsidiaries started to generate revenue from hotel business through the investment in Kiroro Resort in the fourth quarter of 2012. The consolidated revenue also included other revenue like interest receivables, confiscation of down payments, profits on price bargain, revenue from utilities services, revenue from infrastructure and others.

2012 Million Baht

Consolidated financial statements 2013 2014 Million Million % % Baht Baht

Revenue from sales of land and houses Revenue from sales of condominium units 12.74 2,626.44 23.39 Revenue from sale of land for development 1.60 4.72 Revenue from hotel operations 2.97 9.07 Other income* 176.07 1.90 217.92 1.94 Total revenue 9,269.72 100.00 11,228.77 100.00

3,667.12 12,785.35

12.74 6.61 100.00

* Other revenue includes interest receivables, confiscation of down payments, profits on price bargain, revenue from utilities services, revenue from infrastructure and others.

162

Revenue from property sales The Company and subsidiaries book revenue from the sales of land and houses and condominium units in the statement of comprehensive income after unit transfers to buyers.

w 5HYHQXH IURP ODQG DQG KRXVH VDOHV ,Q WKH FRQVROLGDWHG UHYHQXH IURP ODQG DQG KRXVH VDOHV WRWDOHG %W PLOOLRQ WKDQNV WR WKH GHIHUUDO RI purchases from the fourth quarter of 2011 following the great floods. Residential demand started to pick up in the second quarter of 2012. The Company also launched new projects like Perfect Masterpiece Ramkhamhaeng/ 5DQJVLW 0RGL 9LOOD /DGNUDEDQJ DQG 3LQNODR 5LQJURDG

,Q WKRXJK WKH &RPSDQ\ DQG VXEVLGLDULHV GHYHORSHG WKH QHZ SKDVHV RI H[LVWLQJ SURMHFWV DQG ODXQFKHG VHYHUDO QHZ SURMHFWV OLNH 3HUIHFW 3ODFH 5DWFKDSKUXHN &KDHQJZDWWDQD 0HWUR 5DPNKDPKDHQJ 5LQJURDG 3DWWDQDNDUQ 6ULQDNDULQ WKH UHYHQXH IURP ODQG DQG KRXVH VDOHV ZDV RQO\ %W PLOOLRQ D GHFUHDVH E\ %W PLOOLRQ RU IURP 7KRXJK WKH UHYHQXH LQ WKH ILUVW QLQH PRQWKV RI WKH \HDU URVH E\ %W PLOOLRQ IURP WKH previous year, political demonstration hampered the business in the fourth quarter. The Company had to delay construction works and transfers of finished houses, causing the revenue in the fourth quarter to fall below the VDPH SHULRG ODVW \HDU E\ %W PLOOLRQ

,Q WKH FRQVROLGDWHG UHYHQXH IURP ODQG DQG KRXVH VDOHV WRWDOHG %W PLOOLRQ RU RI WRWDO UHYHQXH The lingering impact from political instability during the fourth quarter of 2013 to the second quarter of 2014 as well as greater emphasis on condominium development reduced the land and house sale revenue in 2014 by %W PLOOLRQ RU IURP

w 5HYHQXH IURP FRQGRPLQLXP VDOHV ,Q WKH FRQVROLGDWHG UHYHQXH IURP FRQGRPLQLXP VDOH LQ SURMHFWV x 0HWUR 3DUN 6DWKRUQ DQG 0HWUR 6N\ 5DWFKDGD WRWDOHG %W PLOOLRQ ,Q WKH FRQVROLGDWHG UHYHQXH URVH W PLOOLRQ RU RQ \HDU WR %W WKDQNV WR L&RQGR SURMHFWV DV ZHOO DV WKH VDOH RI 8QLORIW 6DOD\D WR 8QLORIW 3URSHUW\ )XQG The Group realized revenue from 6 condominium projects in 2013 and 1 Uniloft project in 2013, against only 2 condominium projects in 2012. ,Q WKH FRQVROLGDWHG UHYHQXH IURP FRQGRPLQLXP VDOHV WRWDOHG %W PLOOLRQ XS E\ %W PLOOLRQ or 39.62% from 2013, as the number of iCondo projects that generated revenue increased from 4 in 2013 to 7 in 2014. In 2014, 9 condominium projects generated revenue, against 7 in 2013.

w 5HYHQXH IURP ODQG VDOHV ,Q WKH &RPSDQ\ HDUQHG %W PLOOLRQ IURP ODQG VDOH LQFOXGLQJ WKH VDOH RI D ODQG SORW ZRUWK %W million to a university.

,Q UHYHQXH IURP ODQG VDOHV UHDFKHG %W PLOOLRQ DQ LQFUHDVH E\ %W PLOOLRQ RU IURP ,Q WKH FRQVROLGDWHG UHYHQXH IURP ODQG VDOHV WRWDOHG %W PLOOLRQ DQ LQFUHDVH E\ %W PLOOLRQ RU IURP ,Q WKH \HDU D ODQG SORW LQ 6XNKXPYLW 6RL ZDV VROG WR D GHYHORSHU IRU WKH GHYHORSPHQW of a shopping mall.

163

ANNUAL REPORT 2014

Revenue from hotel business In the fourth quarter of 2012, a subsidiary invested in a company registered in Japan, to start a property development and hotel EXVLQHVV LQ -DSDQ 7KH FRPSDQ\tV EDODQFH VKHHW ZDV WKXV FRQVROLGDWHG DV RI 'HFHPEHU DQG WKH LQYHVWPHQW ZDV ERRNHG LQ WKH VWDWHPHQW RI FRPSUHKHQVLYH LQFRPH VLQFH WKH WUDQVDFWLRQ GDWH 2FWREHU XQWLO 'HFHPEHU 7KH UHYHQXH ZRUWK %W PLOOLRQ IURP WKH KRWHO EXVLQHVV ZDV ERRNHG LQ WKH IRXUWK TXDUWHU RI DQG %W PLOOLRQ LQ IXOO \HDU ,Q WKH FRQVROLGDWHG UHYHQXH IURP WKH KRWHO EXVLQHVV WRWDOHG %W PLOOLRQ D GHFUHDVH E\ %W PLOOLRQ RU DV WKH VXEVLGLDU\ FORVHG SDUWV RI D EXLOGLQJ IRU UHQRYDWLRQ GXULQJ 0D\ DQG 'HFHPEHU ZKLFK ZDV WKH ORZ VHDVRQ

Cost, expenses and profit

Sale cost (property development business) The sale cost of house and condominium units, which is the primary cost of the Company and subsidiaries, derives IURP WKH UDWLRQLQJ RI HVWLPDWHG GHYHORSPHQW FRVW DOVR WDNLQJ LQWR DFFRXQW DFWXDO FRVW WR WKH VROG XQLWV 7KH FRVW RI WKH units will be booked in the statement of comprehensive income once revenue from the sales is realized. 'XULQJ WKH FRQVROLGDWHG FRVW IURP WKH SURSHUW\ GHYHORSPHQW EXVLQHVV WRWDOHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 2012

Cost of land and house sales Cost of condominium sales Cost of land sale Total

164

Consolidated financial statements 2013

2014

Million Baht

102.92 5,629.02

100.00

6,728.99

67.72 100.00

7,833.77

100.00

w &RVW RI ODQG DQG KRXVH VDOHV The cost of land and house sales reflects the net cost, after provisions against the falling project value. It consists of the value of land; the cost for land development, design, infrastructure and construction; borrowing cost; and others. ,Q WKH FRVW RI ODQG DQG KRXVH VDOHV WRWDOHG %W PLOOLRQ RU RI VDOH UHYHQXH ,Q WKH FRVW RI ODQG DQG KRXVH VDOHV WRWDOHG %W PLOOLRQ GRZQ E\ %W PLOOLRQ IURP LQ OLQH with the lower revenue from land and house sales. The amount accounted for 66.66% of sale revenue, up slightly from 2012. ,Q WKH FRQVROLGDWHG FRVW RI ODQG DQG KRXVH VDOHV WRWDOHG %W PLOOLRQ GRZQ E\ %W PLOOLRQ RU IURP LQ OLQH ZLWK WKH ORZHU UHYHQXH IURP ODQG DQG KRXVH VDOHV 7KH DPRXQW DFFRXQWHG IRU of sale revenue, a slight decrease from 2013.

Comparative revenue and cost from land and house sales during 2012-2014

2012

0LOOLRQ %DKW

2013

Revenue from land and house sales Cost of land and house sales

2014

w &RVW RI FRQGRPLQLXP VDOHV ,Q WKH FRQVROLGDWHG FRVW RI FRQGRPLQLXP VDOHV WRWDOHG %W PLOOLRQ RU RI WRWDO VDOH FRVW DFFRXQWLQJ IRU RI WRWDO UHYHQXH

,Q WKH &RPSDQ\tV FRQGRPLQLXP VDOH FRVW WRWDOHG %W PLOOLRQ DQ LQFUHDVH RI %W PLOOLRQ RU IURP DFFRXQWLQJ IRU RI WRWDO VDOH FRVW 7KH VDOH FRVW WR UHYHQXH UDWLR URVH WR DV iCondo, which generated revenue in the second quarter of 2013, witnessed an increase in development cost due to the higher construction materials prices and wage. The development cost was comparatively higher than that RI 0HWUR 3DUN 6DWKRUQ DQG 0HWUR 6N\ 5DWFKDGD WKH WZR FRQGRPLQLXPV ZKLFK ZHUH FRQVWUXFWHG GXULQJ

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w &RVW RI ODQG VDOH Comparative revenue and cost from condominium sales during 2012-2014 7.12 3,66

.44

6 2,62

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Revenue from Condominium sales Cost of Condominium sales

2012

2013

2014

165

ANNUAL REPORT 2014

In 2012, the cost of land sale totaled Bt102.92 million.

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Comparative revenue and cost from land sales during 2012-2014

102.

2012

Revenue from land sale Cost of land sales

2013

2014

Gross profit and gross profit margin of property development business Single Detached houses+Townhouses

3URILW 0LOOLRQ %DKW

*URVV SURILW PDUJLQ

2012

2013

2014

2,741.41 36.60

2,279.32 33.34

34.90

The consolidated gross profit margin from land and house sale in 2012 was nearly unchanged, at 36.60%, respectively. ,Q WKH ILJXUH GURSSHG WR GXH WR WKH ORZHU UHYHQXH UHDOL]DWLRQ IURP KLJK PDUJLQ SURMHFWV DIWHU WKHLU FRPSOHWLRQ 0HDQZKLOH WKH KRXVHV ERXJKW EDFN IURP 3URSHUW\ 3HUIHFW )XQG VKRZHG ORZHU JURVV SURILW PDUJLQ WKDQ QHZ SURMHFWV EHLQJ GHYHORSHG E\ WKH &RPSDQ\ DQG VXEVLGLDULHV 7KLV ORZHUHG WKH RYHUDOO SURILW PDUJLQ RI ORZ ULVH GHYHORSPHQW In 2014, the consolidated gross profit margin from land and house sale was at 34.90%, slightly increase from 2013. However, the continued increase in the development cost since 2013 remained a challenge, requiring the Company and subsidiaries WR ODXQFK PDUNHWLQJ DFWLYLWLHV WR PDLQWDLQ WKH JURVV SURILW PDUJLQ LQ WKH ORQJ WHUP 'ULYLQJ XS WKH &RPSDQ\ DQG VXEVLGLDULHVt property development cost is mainly land prices, wage, construction material prices and an increase in energy prices.

166

Condominium

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1R RI UHYHQXH JHQHUDWLQJ SURMHFWV

2012

2013

2014

402.62 34.10 2 projects

711.17 7 projects

1,007.22 27.47 9 projects

In 2012, the margin rose to 34.10% as the prices were raised in line with the increasing demand in condominium units following the massive floods. As the cost of condominium development tended to rise, due to higher construction materials prices and higher wage, the average gross profit margin of new projects declined. ,Q WKH PDUJLQ IURP WKH FRQGRPLQLXP SURMHFWV GURSSHG IURP WR DV SURMHFWV WKDW VWDUWHG JHQHUDWLQJ revenue in the second quarter offered a lower margin than those generating revenue in 2012. In 2014, the Company and subsidiariesâ&#x20AC;&#x2122; margin was 27.47%, slightly increasing from 2013. However, competition in WKH PDUNHW IROORZLQJ WKH ODXQFK RI PDQ\ QHZ KLJK ULVH SURMHFWV E\ ODUJH GHYHORSHUV DQG D FRQWLQXHG LQFUHDVH LQ GHYHORSPHQW FRVW ZHUH PDMRU FKDOOHQJHV IRU WKH &RPSDQ\ DQG VXEVLGLDULHV UHTXLULQJ PDUNHWLQJ VWUDWHJLHV IRU WKH VHJPHQW 1HZ WHFKQRORJ\ was introduced to increase the efficiency and reduce the construction cost, to allow the Company and subsidiaries to maintain the margin at the competitive level in the long term. Land bank

2012

2013

2014

3URILW 0LOOLRQ %DKW

*URVV SURILW PDUJLQ

44.94 30.39

272.94

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167

ANNUAL REPORT 2014

,Q WKH FRQVROLGDWHG VHOOLQJ H[SHQVHV WRWDOHG %W PLOOLRQ DQ LQFUHDVH RI %W PLOOLRQ IURP PRVWO\ because of the Bt76.12 million increase in transfer fee in line with rising revenue. In the year, the advertising, PR and PDUNHWLQJ H[SHQVHV GURSSHG E\ %W PLOOLRQ ZKLOH WKH VHOOLQJ H[SHQVHV RI WKH KRWHO EXVLQHVV GHFOLQHG E\ %W PLOOLRQ 7KH VHOOLQJ H[SHQVHV LQ WKH \HDU DFFRXQWHG IRU RI UHYHQXH IURP SURSHUW\ GHYHORSPHQW DQG KRWHO EXVLQHVVHV DJDLQVW LQ Administrative expenses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t DGPLQLVWUDWLYH H[SHQVHV WRWDOHG %W PLOOLRQ 7RWDO DGPLQLVWUDWLYH H[SHQVHV DFFRXQWHG IRU RI WRWDO UHYHQXH IURP SURSHUW\ GHYHORSPHQW DQG KRWHO businesses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revenue from property development and hotel businesses. ,Q WKH FRQVROLGDWHG DGPLQLVWUDWLYH H[SHQVHV WRWDOHG % PLOOLRQ D GHFUHDVH RI %W PLOOLRQ IURP The amount accounted for 14.92% of total revenue from property development and hotel businesses. The administrative H[SHQVHV RI WKH SURSHUW\ GHYHORSPHQW EXVLQHVV URVH E\ %W PLOOLRQ IURP %W PLOOLRQ LQ WR %W PLOOLRQ in 2014. However, the administrative cost of the hotel business dropped by Bt73.66 million as a part of the hotel was closed IRU UHQRYDWLRQ GXULQJ 0D\ DQG 'HFHPEHU

168

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2Q 2FWREHU %ULJKW 'HYHORSPHQW %DQJNRN &R /WG VROG D GRUPLWRU\ EXLOGLQJ WR WKH 8QLORIW 3URSHUW\ )XQG WKH )XQG IRU %W PLOOLRQ DV DSSURYHG E\ WKH %RDUG RI 'LUHFWRUV ZKR FRQYHQHG RQ $XJXVW 7KH FRPSDQ\ LQYHVWHG %W PLOOLRQ LQ WKH )XQG DFFRXQWLQJ IRU RI WKH IXQGtV YDOXH DQG VWUXFN D \HDU OHDVLQJ FRQWUDFW ZLWK WKH )XQG ZKLFK UHTXLUHV WKH IL[HG DQQXDO UHQWDO IHH RI %W PLOOLRQ 7KH )XQG FDQ H[WHQG WKH OHDVLQJ SHULRG E\ DQRWKHU \HDU XQGHU WKH VDPH FRQGLWLRQ VSHFLILHG LQ WKH RULJLQDO \HDU FRQWUDFW 7KH FRPSDQ\ and the subsidiary have no plan or right to buy back the property. Thus, the revenue and cost of the transaction ZDV ERRNHG LQ VWDWHPHQW RI FRPSUHKHQVLYH LQFRPH LQ +RZHYHU DV WKH \HDU FRQWUDFW LV WDQWDPRXQW WR WKH FRPSDQ\tV EXUGHQ WR JXDUDQWHH WKH )XQG WKH UHQWV WKH PDQDJHPHQW DSSOLHG D GLIIHUHQW DSSURDFK WR GHWHUPLQH WKH FXUUHQW YDOXH RI WKH H[SHQVHV FRPSDUHG WR WKH DSSURDFK DSSOLHG WR LQGLYLGXDO WHQDQWV 7KH \HDU OHDVLQJ IHH DV DJUHHG ZLWK WKH )XQG ZDV EDVHG RQ WKH FXUUHQW FLUFXPVWDQFHV DQG WKH GRUPLWRU\tV FXUUHQW RSHUDWLQJ FRQGLWLRQ 7KH FRPSDQ\ WKXV VHW DVLGH D SURYLVLRQ RQ SRVVLEOH ORVV IURP WKH JXDUDQWHH DW %W PLOOLRQ 7KH SURYLVLRQ LV ERRNHG LQ ,WHP u/RVV IURP UHQW JXDUDQWHHv LQ WKH VWDWHPHQW RI FRPSUHKHQVLYH LQFRPH LQ

w )LQDQFLDO H[SHQVHV 'XULQJ WKH FRQVROLGDWHG ILQDQFLDO H[SHQVHV WRWDOHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ ,W FRPSULVHV LQWHUHVW H[SHQVHV DQG ILQDQFLDO FKDUJHV ,QWHUHVW H[SHQVHV GXULQJ WR DPRXQWHG WR %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 7KH LQWHUHVW H[SHQVHV LQ GXH WR WKH DFTXLVLWLRQ RI QHZ ODQG SORWV IRU IXWXUH ORZ ULVH DQG KLJK rise development as well as the investment in the overseas hotel mentioned above. In 2013, such increased due WR WKH LQYHVWPHQW LQ ODQG DQG ODQG OHDVLQJ ULJKWV DFTXLUHG IRU IXWXUH ORZ ULVH DQG KLJK ULVH GHYHORSPHQW 7KLV UDLVHG WKH &RPSDQ\ DQG VXEVLGLDULHVt ERUURZLQJ OHDGLQJ WR DQ LQFUHDVH LQ LQWHUHVW H[SHQVHV ,Q WKH LQWHUHVW H[SHQVHV URVH DV WKH &RPSDQ\ DQG VXEVLGLDULHV ERUURZHG PRUH WR ILQDQFH EXVLQHVV H[SDQVLRQ )LQDQFLDO IHHV GXULQJ VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ )LQDQFLDO IHHV LQ GHULYHG IURP WKH GHEHQWXUH LVVXDQFH HDUO\ 0DUFK WKH VHHNLQJ RI D VKRUW WHUP ORDQ LQ WKH VHFRQG TXDUWHU DQG WKH GHEHQWXUH LVVXDQFH LQ $XJXVW DQG 1RYHPEHU ,Q WKH \HDU WKH ILQDQFLDO IHHV increased in line with the fund mobilization size. In 2013, the Company issued four series of debentures; in $SULO 0D\ -XQH DQG 1RYHPEHU 5HOHYDQW ILQDQFLDO IHHV DFFRUGLQJO\ LQFUHDVHG E\ %W PLOOLRQ IURP WR %W PLOOLRQ ,Q WKH &RPSDQ\ LVVXHG WKUHH VHULHV RI GHEHQWXUHV LQ -XO\ 6HSWHPEHU DQG 'HFHPEHU 7KH ILQDQFLDO IHHV LQ GURSSHG E\ %W PLOOLRQ IURP

169

ANNUAL REPORT 2014

w ,QFRPH WD[ &RUSRUDWH LQFRPH WD[ FRQVLVWV RI WD[ RQ SURILWV DQG DGMXVWPHQWV IRU H[DPSOH DGMXVWPHQWV LQ WD[ H[SHQVHV LQ WKH SUHYLRXV \HDU DQG VRPH H[SHQVHV ZKLFK DUH QRQ GHGXFWLEOH 7KH QHW DPRXQW LV VKRZQ DV LQFRPH WD[ LQ the statement of comprehensive income in the particular year. ,QFRPH WD[ GXULQJ ZDV %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\

Hotel business In the fourth quarter of 2012, the Company invested in a hotel business in Japan, holding 69.01% in the business. The YHQWXUH JHQHUDWHG %W PLOOLRQ UHYHQXH DQG %W PLOOLRQ DV RWKHU YHQXH 7KH JURVV SURILW PDUJLQ KLW %W PLOOLRQ DJDLQVW RSHUDWLQJ H[SHQVH RI %W PLOOLRQ DQG IRUHLJQ H[FKDQJH ORVV RI %W PLOOLRQ 7KLV UHVXOWHG LQ D ORVV RI %W PLOOLRQ %W PLOOLRQ IRRWHG E\ WKH FRPSDQ\ +RZHYHU IRUHLJQ H[FKDQJH ORVVHV GHULYHG IURP WKH \HQ GHQRPLQDWHG investment in a hotel in Japan, as the Japanese yen weakened significantly in the fourth quarter of 2012. The involved subsidiary bought a hedging contract with a commercial bank late 2012, to cushion the risk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tV VKDUHKROGLQJ ZDV UDLVHG IURP WR LQ 0DUFK 2014. Earning before expenses, tax, depreciation and amortization (DUQLQJ EHIRUH H[SHQVHV WD[ GHSUHFLDWLRQ DQG DPRUWL]DWLRQ (%,7'$ LV FDOFXODWHG IURP WKH HDUQLQJV EHIRUH H[SHQVHV WD[ GHSUHFLDWLRQ DQG DPRUWL]DWLRQ 'XULQJ (%,7'$ RI WKH &RPSDQ\ DQG VXEVLGLDULHV WRWDOHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ UHSUHVHQWLQJ WKH SURILW PDUJLQ RI DQG UHVSHFWLYHO\

170

Net profits (of both businesses) 7KH FRQVROLGDWHG QHW SURILWV GXULQJ DUH DV IROORZV Unit: Million Baht

1HW SURILW 6KDUHKROGHUVt HTXLW\ 6XEVLGLDULHVt QRQ FRQWUROOLQJ VKDUHKROGHUVt HTXLW\ *URVV SURILW PDUJLQ

2012

2013

2014

202.72

2.19

41.42

0.37

402.26 3.46

7KH FRQVROLGDWHG QHW SURILW WRWDOHG %W PLOOLRQ LQFOXVLYH RI WKH %W PLOOLRQ SURILW IRU WKH &RPSDQ\tV VKDUHKROGHUV DQG %W PLOOLRQ ORVV RI VXEVLGLDULHVt QRQ FRQWUROOLQJ VKDUHKROGHUV ,Q WKH FRQVROLGDWHG QHW SURILW ZDV DW %W PLOOLRQ GRZQ E\ %W PLOOLRQ RU IURP WKH SUHYLRXV \HDU Though the profit margin of the property development business increased by Bt74.46 million thanks to an increase in FRQVROLGDWHG UHYHQXH WKH JURVV SURILW PDUJLQ GHFUHDVHG 7KH VDOH DQG DGPLQLVWUDWLYH H[SHQVHV DOVR LQFUHDVHG E\ %W PLOOLRQ 3OXV %W PLOOLRQ ORVV IURP UHQW JXDUDQWHH DQG WKH %W PLOOLRQ LQFUHDVH LQ ILQDQFLDO H[SHQVHV DQG %W PLOOLRQ ORVV IURP WKH RYHUVHDV KRWHO EXVLQHVV WKH &RPSDQ\ VKRZHG D QHW ORVV RI %W PLOOLRQ LQ DQ LQFUHDVH E\ %W PLOOLRQ IURP ,Q WKH FRQVROLGDWHG HDUQLQJ EHIRUH ILQDQFLDO H[SHQVHV DQG WD[ WRWDOHG %W PLOOLRQ ZKLOH QHW SURILW VWRRG DW %W PLOOLRQ ZKLFK URVH E\ %W PLOOLRQ RU IURP Return on earnings ,Q DQG WKH &RPSDQ\ DQG VXEVLGLDULHVt UHWXUQ RQ HDUQLQJV 52( VWRRG DW DQG UHVSHFWLYHO\ 52( PRYHV LQ OLQH ZLWK QHW SURILWV LQ WKH \HDUV DV ZHOO DV WKH QXPEHU RI SDLG XS VKDUHV IROORZLQJ WKH H[HUFLVH RI ZDUUDQWV DQG WKH &RPSDQ\tV FDSLWDO LQFUHDVH GXULQJ WKH \HDU SHULRG Consolidated financial statements (Unit: Million Baht)

1HW 3URILW 3DLG XS FDSLWDO 6KDUHKROGHUVt HTXLW\ 52(

2012

2013

2014

202.72

41.42

402.26 9,010.33

171

ANNUAL REPORT 2014

Analysis on consolidated financial position Table presented consolidated financial status (Unit :Million Baht)

$V RI 'HFHPEHU 5HYLVHG

$V RI 'HFHPEHU $V RI 'HFHPEHU

Assets Liabilities Shareholdersâ&#x20AC;&#x2122; equity

22,021.72

9,010.33

Assets 7KH FRQVROLGDWHG DVVHWV GXULQJ DQG VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 'XULQJ DVVHWV LQFUHDVHG %W PLOOLRQ VKRZLQJ DQ LQFUHDVH RI $VVHWV DOVR URVH E\ %W PLOOLRQ GXULQJ RU 7KH DVVHW VL]H H[SDQGHG LQ WKH SDVW WKUHH \HDUV EHFDXVH RI WKH ODXQFK RI QXPHURXV SURMHFWV x FRYHULQJ VLQJOH KRXVH WRZQKRXVH DQG FRQGRPLQLXP SURMHFWV 0HDQZKLOH WKH ODQG EDQN ZDV H[SDQGHG WR VXSSRUW IXWXUH H[SDQVLRQ SDUWLFXODUO\ LQ WKH FRQGRPLQLXP DQG WRZQKRXVH VHJPHQWV 7KH &RPSDQ\ DQG VXEVLGLDULHV DOVR GHYHORSHG UHQWDO DSDUWPHQW EXLOGLQJV XQGHU u8QLORIWv EUDQG DQG VWUXFN D ODQG OHDVH FRQWUDFW IRU WKH GHYHORSPHQW RI D shopping mall and commercial space for rent. The Group also invested in a hotel business in Japan in the fourth quarter of 2012. $V RI 'HFHPEHU WKH FRQVROLGDWHG DVVHWV WRWDOHG %W PLOOLRQ DQ LQFUHDVH E\ %W PLOOLRQ RU compared to the end of 2013. The amount rose mainly due to the increase in cash and cash equivalents, receivables on ODQG VDOH DQG WKH SURSHUW\ GHYHORSPHQW FRVW %\ YDOXH DV RI 'HFHPEHU WKH SURSHUW\ GHYHORSPHQW FRVW DPRXQWHG WR %W PLOOLRQ RU RI WRWDO ZKLOH ODQG EDQN %W PLOOLRQ DQG DGYDQFH SD\PHQW IRU ODQG SXUFKDVHV %W PLOOLRQ FRQVWLWXWHG RI WRWDO &DVK DQG FDVK HTXLYDOHQWV WRWDOHG %W PLOOLRQ RU SURSHUW\ IRU LQYHVWPHQW SXUSRVH %W PLOOLRQ RU OHDVH ULJKW %W PLOOLRQ ODQG EXLOGLQJ DQG HTXLSPHQW %W PLOOLRQ RU ODQG UHFHLYDEOHV SURPLVVRU\ QRWHV ODQG %W PLOOLRQ DQG DGYDQFH SD\PHQWV WR XQUHODWHG FRQWUDFWRUV %W PLOOLRQ

172

Consolidated financial statements As of 31 December As of 31 December As of 31 December 2012 (Revised) 2013 2014 Million Million Million % % % Baht Baht Baht

$VVHWV &XUUHQW DVVHWV Cash and cash equivalents Trade and other receivables /DQG UHFHLYDEOHV SURPLVVRU\ QRWHV ODQG Inventories Project development costs $GYDQFHV WR FRQWUDFWRU UHODWHG SDUW\ $GYDQFHV WR FRQWUDFWRUV XQUHODWHG SDUWLHV Other current assets 7RWDO FXUUHQW DVVHWV 1RQ FXUUHQW DVVHWV Restricted deposits Retention per agreement Investment in associate 2WKHU ORQJ WHUP LQYHVWPHQWV /DQG KHOG IRU GHYHORSPHQW Advances for purchases of land Investment properties Property, plant and equipment /HDVHKROG ULJKWV 'HIHUUHG WD[ DVVHWV 2WKHU QRQ FXUUHQW DVVHWV 7RWDO QRQ FXUUHQW DVVHWV 7RWDO DVVHWV

960.26 14,722.36 66.40 100.00 1,131.61 317.40 11,453.26 26,175.62

3.67 0.06 200.66 0.12 34.32 0.06 14.47 0.23 93.67 56.24 19,007.10 2.00 0.21 4.32 1.70 1.21 43.76 100.00

100.00 110.92 6,062.24 660.13 967.14 332.13 11,661.00 30,668.10

4.03 191.43 0.11 14.40 0.99 0.31 61.98 21,650.98 1.01 0.33 1.90 0.36 19.77 3.42 4.20 0.64 38.02 100.00

100.00 444.64 963.20 1,313.11 9,654.14 31,305.12

7.96 0.61 0.11 0.33 69.16 0.92 0.32 0.34 14.22 1.42 4.92 4.19 0.96 0.46 30.84 100.00

173

ANNUAL REPORT 2014

Project development cost The property development cost is booked as the development cost in the financial statements. It will be realized as the selling cost in the statement of comprehensive income once the sold units are transferred. 7KH FRQVROLGDWHG SURSHUW\ GHYHORSPHQW FRVW LQ VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 7KH FRVW LQ URVH E\ %W PLOOLRQ IURP ZKLOH WKH FRVW LQ LQFUHDVHG E\ %W PLOOLRQ RQ \HDU 7KH GHYHORSPHQW FRVW DFFRXQWHG IRU RI WRWDO DVVHWV LQ LQ DQG LQ 7KH LQFUHDVHV particularly in 2013 were due to the launch of new projects, to meet the higher sale and revenue targets. Details of projects are available in the part on assets for business operations: Item Assets for sale (See details of the projects in â&#x20AC;&#x153;assets for saleâ&#x20AC;?) Net land bank The net land for development consists of the cost of land, the land development cost, the construction cost, and the interest minus the cost which are booked as selling cost, land transferred for debt restructuring purpose and debt repayment as stated in the rehabilitation plan, and provisions against possible decreases in land value. 7KH FRPSDQ\tV DQG VXEVLGLDULHVt QHW ODQG KHOG IRU GHYHORSPHQW DW WKH HQG RI KDG YDOXH RI %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ ,Q WKH YDOXH GURSSHG E\ %W PLOOLRQ RQ \HDU DQG LQ LW GHFUHDVHG E\ %W PLOOLRQ 7KH YDOXH DFFRXQWHG IRU DQG RI WRWDO DVVHWV GXULQJ UHVSHFWLYHO\ 7KH QHW YDOXH RI ODQG EDQN GURSSHG PDLQO\ EHFDXVH WKH &RPSDQ\ DQG VXEVLGLDULHV VROG D ODQG SORW ZRUWK %W PLOOLRQ LQ DQG VRPH ODQG SORWV ZRUWK %W PLOOLRQ ZHUH WUDQVIHUUHG IRU SURMHFW GHYHORSPHQW and booked as development cost. In 2014, the Company and subsidiaries sold land plots worth Bt1,700 million. The Company and subsidiaries will consider book land reserved for development as after development starts, like the start of land clearing RU SURMHFW OD\RXW 6LQFH WKH &RPSDQ\ DQG VXEVLGLDULHV KDYH DFTXLUHG ODQG SORWV WR DFFRPPRGDWH SURSHUW\ GHYHORSPHQW H[SDQVLRQ LQ ERWK ORZ ULVH DQG KLJK ULVH VHJPHQWV 2Q 0D\ WKH &RPSDQ\ DQG D VXEVLGLDU\ VLJQHG DQ DJUHHPHQW WR VHOO D ODQG SORW ZLWK WKH DFFRXQWLQJ YDOXH RI %W PLOOLRQ WR DQ XQUHODWHG FRPSDQ\ IRU %W PLOOLRQ 2Q 6HSWHPEHU WKH ODQG ZDV WUDQVIHUUHG DQG the buyer paid Bt700.00 million in cash and agreed to the remaining Bt1,000.00 million through two promissory notes valued DW %W PLOOLRQ HDFK 7KH SURPLVVRU\ QRWHV DUH JXDUDQWHHG E\ D EDQN DQG ZLOO FRPH GXH LQ 'HFHPEHU 7KH WUDQVDFWLRQ LV ERRNHG DV SDUW RI WKH QRQ FXUUHQW DVVHWV SURPLVVRU\ QRWHV ODQG LQ WKH ILQDQFLDO VWDWHPHQWV 7KH SURPLVVRU\ notes are used to back a bank guarantee for the Companyâ&#x20AC;&#x2122;s debentures. Details on land for development are included in the assets for business operations (land for development).

174

Advance payment for land purchase Advance payment for land purchase is the deposit given to landlords or agents commissioned to accumulate land for the company. Once the land purchase was completed the deposit will be booked as the project development cost or in land bank category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nvestment properties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developed and Bt1,327.99 million under development. Details of the investment properties are included in Item: Investment Properties Leasing rights 7KH FRQVROLGDWHG OHDVLQJ ULJKWV ZHUH YDOXHG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ DW WKH HQG RI DQG UHVSHFWLYHO\ 7KH OHDVLQJ ULJKWV YDOXH LQ URVH E\ %W PLOOLRQ IURP ZKLOH WKH DPRXQW LQFUHDVHG E\ %W PLOOLRQ RQ \HDU 7KH YDOXHV LQ WKH WKUHH \HDU SHULRG DFFRXQWHG IRU DQG of total assets, respectively. The value showed an increase in the three years because subsidiaries entered into several leasing rights contracts, prepared for the development of shopping malls and commercial properties. Details of the leasing rights are included in Item: Leasing Rights

175

ANNUAL REPORT 2014

Net land, building and equipment 1HW ODQG EXLOGLQJ DQG HTXLSPHQW VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ DW WKH HQG RI DQG UHVSHFWLYHO\ 7KH YDOXH GHFUHDVHG E\ %W PLOOLRQ IURP ZKLOH WKH DPRXQW GURSSHG E\ %W PLOOLRQ 7KH YDOXH DFFRXQWHG IRU DQG RI WRWDO DVVHWV LQ UHVSHFWLYHO\ Details of net land, building and equipment are included in Item: Net land, building and equipment Cash and cash equivalents &DVK DQG FDVK HTXLYDOHQWV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ DW WKH HQG RI DQG UHVSHFWLYHO\ 7KH DPRXQW URVH E\ %W PLOOLRQ IURP ZKLOH LQ LW LQFUHDVHG E\ %W million from 2013 due to an increase in cash flow from investment activities in the year. The cash and cash equivalents to DVVHWV UDWLR ZDV DQG UHVSHFWLYHO\ GXULQJ Details of cash and cash equivalents are included in Item 16.2.4: Analysis on consolidated cash flow Investments in associated companies 7KH FRQVROLGDWHG LQYHVWPHQW LQ DVVRFLDWHG FRPSDQLHV ZDV WKH LQYHVWPHQW LQ .UXQJWKHS /DQG D SURSHUW\ GHYHORSPHQW FRPSDQ\ ZKLFK ZDV RZQHG E\ WKH &RPSDQ\ 7KH &RPSDQ\tV %RDUG RI 'LUHFWRUV RQ 1RYHPEHU UHVROYHG WR GLYHVW DOO VKDUHV LQ .UXQJWKHS /DQG WR *ROGHQ /DQG 3URSHUW\ 'HYHORSPHQW 3XEOLF &RPSDQ\ /LPLWHG 2Q 'HFHPEHU WKH &RPSDQ\ VROG WKH VKDUHV WR *ROGHQ /DQG ZLWK D FDSLWDO JDLQ RI %W PLOOLRQ $W WKH HQG RI DQG LQYHVWPHQW LQ DVVRFLDWHG FRPSDQLHV XQGHU WKH HTXLW\ PHWKRG ZDV YDOXHG DW %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ ,Q WKH LQYHVWPHQW LQFUHDVHG E\ %W PLOOLRQ IURP 7KH LQYHVWPHQW DFFRXQWHG IRU DQG RI WRWDO DVVHWV LQ DQG 2013, respectively. Trade and other receivables w 3URSHUW\ GHYHORSPHQW EXVLQHVV The Company and subsidiaries realized the revenue from the sales of land and houses, condominium units and ODQG DIWHU WUDQVIHUV WR EX\HUV 'RZQ SD\PHQWV RU DGYDQFH LQVWDOOPHQWV DUH ERRNHG DV OLDELOLWLHV &XVWRPHUV KDYLQJ been transferred the properties but having yet paid in full would be booked as trade receivables. 7KH &RPSDQ\ DQG VXEVLGLDULHVt SURSHUW\ UHODWHG WUDGH UHFHLYDEOHV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG Bt6.77 million at the end of 2012, 2013 and 2014, respectively. The receivables in 2013 showed a Bt10.46 million GHFUHDVH IURP ZKLOH WKH DPRXQW GURSSHG E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU 7KH DPRXQWV DFFRXQWHG IRU DQG RI WRWDO DVVHWV LQ

176

$V RI 'HFHPEHU DIWHU WKH FRQVROLGDWHG SURYLVLRQV RI %W PLOOLRQ DJDLQVW SRVVLEOH ORDQ ORVV SURSHUW\ UHODWHG WUDGH UHFHLYDEOHV VWRRG DW %W PLOOLRQ 2I WRWDO %W PLOOLRQ ZHUH RYHUGXH E\ PRUH WKDQ PRQWKV DQG %W PLOOLRQ RYHUGXH E\ IHZHU WKDQ PRQWKV 5HFHLYDEOHV ZRUWK %W PLOOLRQ ZHUH QRW GXH \HW )RU UHFHLYDEOHV RYHUGXH IRU RYHU PRQWKV WKH &RPSDQ\ DQG VXEVLGLDULHV FRQWLQXRXVO\ SUHVVHG IRU UHSD\PHQWV 6RPH cases went to court. The Company and subsidiaries are convinced that the provisions are sufficient under the current circumstances.

w +RWHO EXVLQHVV 7UDGH UHFHLYDEOHV LQ WKH KRWHO EXVLQHVV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ DW WKH HQG RI DQG UHVSHFWLYHO\ 7KH DPRXQW VKRZHG DQ LQFUHDVH RI %W PLOOLRQ IURP DQG WKH OHYHO VKRZHG D GHFUHDVH RI %W PLOOLRQ RQ \HDU 7KH DPRXQWV DFFRXQWHG IRU DQG of total assets at the end of the three years. $V RI 'HFHPEHU FRQVROLGDWHG WUDGH UHFHLYDEOHV LQ WKH EXVLQHVV RYHUGXH IRU RYHU WKUHH PRQWKV WRWDOHG Bt0.63 million. The rest was less than 3 months overdue.

w 2WKHU GHEWRUV 2WKHU GHEWRUV RI WKH &RPSDQ\ DQG VXEVLGLDULHV DW WKH HQG RI RZHG %W PLOOLRQ %W PLOOLRQ DQG %W million, respectively. The 2013 level showed an increase of Bt60.47 million from 2012 and the 2014 level rose by Bt1.94 million on year. The amounts accounted for 0.02%, 0.21% and 0.21% of total assets at the end of the years, respectively.

Land receivables (promissory notes â&#x20AC;&#x201C; land) 5HFHLYDEOHV IRU ODQG RI WKH &RPSDQ\ DQG VXEVLGLDULHV DW WKH HQG RI RZHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 7KH OHYHO VKRZHG DQ LQFUHDVH RI %W PLOOLRQ IURP DQG WKH OHYHO URVH E\ %W PLOOLRQ RQ \HDU 7KH DPRXQWV DFFRXQWHG IRU DQG RI WRWDO DVVHWV DW WKH HQG RI WKH \HDUV respectively. The increases resulted from the sale of some land plots in the period.

$V RI 'HFHPEHU WKH &RPSDQ\ DQG VXEVLGLDULHVt ODQG UHFHLYDEOHV DUH DV IROORZV

3URPLVVRU\ QRWHV x ODQG ZRUWK %W PLOOLRQ ,Q WKH &RPSDQ\ ZDV SDLG %W PLOOLRQ IURP D EX\HU ,Q )HEUXDU\ WKH EX\HU IXOO\ SDLG WKH UHVW

3URPLVVRU\ QRWHV x ODQG ZRUWK %W PLOOLRQ 2Q WKH ERRN WKH SURPLVVRU\ QRWHV ZHUH YDOXHG DW %W million, after discount by the average borrowing rate of the Company and subsidiaries and the debtor, to reflect future interest income.

177

ANNUAL REPORT 2014

Liabilities 7KH FRQVROLGDWHG OLDELOLWLHV DW WKH HQG RI VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 7KH OHYHO VKRZHG DQ LQFUHDVH RI %W PLOOLRQ IURP RU ZKLOH WKH OHYHO URVH %W PLOOLRQ RQ \HDU RU 7KH OLDELOLWLHV WR DVVHWV UDWLR DW WKH HQG RI ZDV DQG UHVSHFWLYHO\ 'XULQJ WKH OLDELOLWLHV VKRZHG WKH IROORZLQJ VLJQLILFDQW FKDQJHV ,QFUHDVH RQ WKH LVVXDQFH RI GHEHQWXUHV ZRUWK %W PLOOLRQ ELOOV RI H[FKDQJH ZURWK %W PLOOLRQ DQG SURPLVVRU\ notes worth Bt211.91 million. 'HFUHDVH GXH WR D WHUP ORDQ ZRUWK %W PLOOLRQ OHDVLQJ ULJKWV ZRUWK %W PLOOLRQ WUDGH SD\DEOHV DQG RWKHUV ZRUWK %W PLOOLRQ DQG GHSRVLWV DGYDQFH SD\PHQWV IURP FXVWRPHUV ZRUWK %W PLOOLRQ 7KH FRQVROLGDWHG OLDELOLWLHV DV RI 'HFHPEHU FRQVLVWHG RI GHEHQWXUHV RI WRWDO WHUP ORDQV WUDGH SD\DEOHV DQG RWKHUV %W ELOO RI H[FKDQJH SURPLVVRU\ QRWHV FXVWRPHUVt GHSRVLWV DQG DGYDQFH SD\PHQW OHDVLQJ ULJKWV RWKHU FXUUHQW OLDELOLWLHV DQG RWKHU QRQ FXUUHQW OLDELOLWLHV 'HWDLOV DUH as follows;

Unit: Million Baht

'HEHQWXUHV /RQJ WHUP ORDQV Trade and other payables 1RWHV SD\DEOH %LOOV RI H[FKDQJH SD\DEOH 'HSRVLWV DQG FDVK UHFHLYHG LQ advance /HDVHKROG ULJKWV SD\DEOH Other current liabilities 2WKHU QRQ FXUUHQW OLDELOLWLHV 7RWDO OLDELOLWLHV

As of 31 December 2012

Consolidated financial statements Total As of 31 Total As of 31 liabilities December liabilities December % 2013 % 2014

Total liabilities %

29.39 2,664.60 3.13

30.02 4,293.61 12.10 2,411.47 2.33 724.40 636.24

60.91 19.26

40.00 129.43 17,544.98

1.74 340.96 0.23 0.72 0.74 100.00 22,021.72

217.01 1.30 20.00 216.23 197.12 100.00 22,294.80

0.97 0.09 0.97 100.00

Debentures $W WKH HQG RI WKH &RPSDQ\ DQG VXEVLGLDULHVt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debts.

178

'HWDLOV RI H[LVWLQJ GHEHQWXUHV DV RI 6HSWHPEHU Value (Million Baht) Issue Date

6HFXUHG GHEHQWXUHV 1,999.24 (2).%W PLOOLRQ LQWHUHVW SHU DQQXP LQ ILUVW WZR \HDUV DQG LQ WKH third year, payable every 3 months 6HFXUHG GHEHQWXUHV 2,979.47 %W PLOOLRQ LQWHUHVW per annum, payable every 3 months 8QVHFXUHG VKRUW WHUP ERQGV 2,000.00 %W PLOOLRQ LQWHUHVW per annum, payable on redemption. 8QVHFXUHG GHEHQWXUHV 2,000.00 %W PLOOLRQ LQWHUHVW per annum, payable every 3 months 8QVHFXUHG GHEHQWXUHV 2,200.00 %W PLOOLRQ LQWHUHVW per annum, payable every 3 months 8QVHFXUHG GHEHQWXUHV 2,400.00 %W PLOOLRQ LQWHUHVW per annum, payable every 3 months Total 13,578.72

0DUFK 2012

Maturity Date

Condition

0DUFK The ratio of total loans1 to shareholdersâ&#x20AC;&#x2122; equity must not H[FHHG

1RYHPEHU 1RYHPEHU The ratio of total loans1 to 2012 shareholdersâ&#x20AC;&#x2122; equity must not H[FHHG 'HFHPEHU 6HSWHPEHU The ratio of total loans1 to 2014 shareholdersâ&#x20AC;&#x2122; equity must not H[FHHG -XQH -XQH The ratio of total loans1 to shareholdersâ&#x20AC;&#x2122; equity must not H[FHHG 1 August 2014 )HEUXDU\ The ratio of total loans1 to 2016 shareholdersâ&#x20AC;&#x2122; equity must not H[FHHG 1 October 1 October The ratio of total loans1 to 2014 2016 shareholdersâ&#x20AC;&#x2122; equity must not H[FHHG

Note: â&#x20AC;&#x153; 1 u7RWDO ORDQVv UHIHU WR DOO LQWHUHVW EHDULQJ RU GLVFRXQWHG OLDELOLWLHV DSSHDULQJ LQ WKH FRQVROLGDWHG VWDWHPHQW 7KLV LQFOXGH ILQDQFLDO REOLJDWLRQV to be incurred by the issuerâ&#x20AC;&#x2122;s guarantee and similar obligations to individuals or juristic entities which do not appear in the consolidated ILQDQFLDO VWDWHPHQWV EXW DSSHDU LQ WKH 1RWH 7KLV H[FOXGHV REOLJDWLRQV UHODWHG WR WKH REWDLQLQJ RI ILQDQFLDO LQVWLWXWLRQVt OHWWHU RI JXDUDQWHH IRU ODQG RU LQIUDVWUXFWXUH GHYHORSPHQW RU UHODWHG DFWLYLWLHV u7RWDO ORDQVv DUH PLQXV FDVK DQG HTXLYDOHQWV DV VKRZQ LQ WKH FRQVROLGDWHG ILQDQFLDO VWDWHPHQWV LQFOXGLQJ GHSRVLWV SODFHG DV FROODWHUDOV ZLWK DQ\ SDUW\ )RU FODULW\ RQ WKLV WKH uWRWDO ORDQVv H[FOXGH WUDGH UHFHLYDEOHV DGYDQFH income or loans which bear no interest cost.

179

ANNUAL REPORT 2014

Long-term loans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

Unit (Million Baht)

/RQJ WHUP ORDQV Minus â&#x20AC;&#x201C; amount due within 1 year /RQJ WHUP ORDQV 1HW

Consolidated financial statements 31 December 31 December 31 December 2012 2013 2014

4,293.61

Trade payables and others 7KH &RPSDQ\ DQG VXEVLGLDULHVt WUDGH SD\DEOHV DQG RWKHUV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W million at the end of 2012, 2013 and 2014, respectively. The 2013 amount showed an increase of Bt1,127.63 million from ZKLOH WKH OHYHO GHFUHDVHG E\ %W PLOOLRQ RQ \HDU 7UDGH SD\DEOHV DQG RWKHUV DFFRXQWHG IRU DQG RI WRWDO OLDELOLWLHV DW WKH HQG RI WKH \HDUV Promissory notes $W WKH HQG RI WKH &RPSDQ\ DQG VXEVLGLDULHVt H[LVWLQJ SURPLVVRU\ QRWHV ZHUH YDOXHG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ ,Q WKH DPRXQW GURSSHG E\ %W PLOOLRQ IURP ZKLOH WKH DPRXQW URVH E\ %W PLOOLRQ RQ \HDUV 7KH SURPLVVRU\ QRWHV DFFRXQWHG IRU DQG RI WRWDO OLDELOLWLHV LQ WKH \HDUV UHVSHFWLYHO\ 7KH SURPLVVRU\ QRWHV DUH GXH GXULQJ 0DUFK DQG -XQH Bills of exchange 7KH &RPSDQ\ DQG VXEVLGLDULHV GLG QRW KDYH DQ\ ELOO RI H[FKDQJH DW WKH HQG RI DQG $W WKH HQG RI WKH H[LVWLQJ ELOOV RI H[FKDQJH ZHUH ZRUWK %W PLOOLRQ HQWLUHO\ LVVXHG E\ WKH &RPSDQ\ 7KH ELOOV GXH LQ -XQH DFFRXQWHG IRU RI total liabilities. Leasing rights 7KH &RPSDQ\ DQG VXEVLGLDULHV VKRXOGHUHG D EXUGHQ RI %W PLOOLRQ LQ OHDVLQJ ULJKWV LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH EXUGHQ LQ URVH E\ %W PLOOLRQ IURP ZKLOH WKH DPRXQW GURSSHG E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU 'XULQJ WKH \HDUV D VXEVLGLDU\ VWUXFN D GHDO IRU DGGLWLRQDO OHDVLQJ ULJKWV LVVXLQJ EDQN JXDUDQWHHG SURPLVVRU\ QRWHV ZRUWK %W PLOOLRQ 7KH QRWHV GXH LQ -XO\ ZHUH XVHG WR SD\ IRU WKH WUDQVIHU RI WKH OHDVLQJ ULJKWV The leasing rights accounted for 0.23%, 1.30% and 0.09% of total liabilities in the years, respectively.

180

Shareholdersâ&#x20AC;&#x2122; equity 7KH FRQVROLGDWHG VKDUHKROGHUVt HTXLW\ DW WKH HQG RI VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 7KH VKDUHKROGHUVt HTXLW\ LQ URVH E\ %W PLOOLRQ IURP RU ZKLOH LQ LW LQFUHDVHG E\ %W PLOOLRQ RU RQ \HDU 7KH VKDUHKROGHUVt HTXLW\ WR DVVHW UDWLR LQ WKH \HDUV ZDV DQG respectively.

The following is details of the annual changes in the shareholdersâ&#x20AC;&#x2122; equity. $V RI 'HFHPEHU DGMXVWHG

7KH FRQVROLGDWHG VKDUHKROGHUVt HTXLW\ DV RI 'HFHPEHU WRWDOHG %W PLOOLRQ 7KLV UHVXOWHG PDLQO\ IURP WKH FDSLWDO LQFUHDVH E\ %W PLOOLRQ WKH H[HUFLVH RI ZDUUDQWV 3) : IRU PLOOLRQ VKDUHV DW WKH SULFH RI %W DSLHFH RU D WRWDO RI %W PLOOLRQ WKH H[HUFLVH RI ZDUUDQWV 3) : IRU PLOOLRQ VKDUHV DW WKH SULFH RI Bt1 apiece of a total of Bt73.93 million; the 2012 net profit of Bt202.72 million; the difference of financial adjustment ZRUWK %W PLOOLRQ WKH LQFUHDVH LQ LQYHVWPHQW E\ QRQ FRQWUROOLQJ LQWHUHVWV LQ VXEVLGLDULHV ZRUWK %W PLOOLRQ DQG DQ LQFUHDVH RI %W PLOOLRQ RI WKH HTXLW\ RI VXEVLGLDULHVt QRQ FRQWUROOLQJ LQWHUHVWV PLQXV %W PLOOLRQ GLYLGHQG payment.

$V RI 'HFHPEHU 7KH FRQVROLGDWHG VKDUHKROGHUVt HTXLW\ DV RI 'HFHPEHU WRWDOHG %W PLOOLRQ DQ LQFUHDVH RI %W PLOOLRQ IURP WKH DGMXVWHG VWDWHPHQW DV RI 'HFHPEHU RU D LQFUHDVH 7KLV UHVXOWHG PDLQO\ IURP WKH FRQYHUVLRQ RI ZDUUDQWV 3) : IRU PLOOLRQ VKDUHV DW WKH SULFH RI %W DSLHFH RI D WRWDO RI %W PLOOLRQ WKH QHW SURILW RI %W PLOOLRQ DQG DGGLWLRQDO LQYHVWPHQW RI %W PLOOLRQ LQ VXEVLGLDULHV E\ QRQ FRQWUROOLQJ LQWHUHVWV PLQXV WKH GLYLGHQG SD\PHQW ZRUWK %W PLOOLRQ

$V RI 'HFHPEHU 7KH VKDUHKROGHUVt HTXLW\ DV RI 'HFHPEHU VWRRG DW %W PLOOLRQ ULVLQJ IURP %W PLOOLRQ RU IURP HQG WKDQNV PDLQO\ WR WKH QHW SURILW RI %W PLOOLRQ LQ WKH \HDU PLQXV QHW FRPSUHKHQVLYH ORVVHV ZRUWK %W million.

6KDUHKROGHUVt HTXLW\ VWUXFWXUH Unit: Million Baht

3DLG XS FDSLWDO 6KDUH ORVV Retained earnings appropriated as legal reserve Unappropriated retained earnings 5HYDOXDWLRQ VXUSOXV GHILFLW IURP LQYHVWPHQWV 'LIIHUHQWLDO RQ VXEVLGLDULHV VKDUH VZDS 6KDUH ORVV IURP DGMXVWPHQW LQ VXEVLGLDULHV LQYHVWPHQW Currency conversion differential 6KDUHKROGHUV HTXLW\ RI QRQ FRQWUROOLQJ LQWHUHVWV LQ VXEVLGLDULHV &RQVROLGDWHG VKDUHKROGHUV HTXLW\

2012

2013

2014

241.60

17.31 8,630.64

241.60

17.29 8,646.39

260.60

9,010.33

181

ANNUAL REPORT 2014

:DUUDQWV 3) :

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6HSWHPEHU 'HFHPEHU March 2013 June 2013 6HSWHPEHU 'HFHPEHU March 2014 June 2014 6HSWHPEHU 'HFHPEHU

Exercised units

Outstanding units

73,932,601 100,132,200 21,000

319,932,694 319,932,694

Appropriateness of capital structure 'HEW WR HTXLW\ UDWLR The consolidated debt to equity ratio was on the rise in the past three years. At the end of 2012, the ratio was 2.03:1, EHIRUH ULVLQJ WR LQ DQG LQ 7KH LQFUHDVH VWHPPHG IURP WKH UHTXLUHPHQW IRU QHZ IXQGV VXFK DV ORQJ WHUP ORDQV DQG GHEHQWXUHV WR ILQDQFH ODQG SXUFKDVHV REWDLQ OHDVLQJ ULJKWV DQG GHYHORS SURMHFWV 5HTXLULQJ IXQGV ZDV DOVR WKH KRWHO EXVLQHVV DFTXLUHG LQ WKH IRXUWK TXDUWHU RI DQG VKRSSLQJ PDOO GHYHORSPHQW LQ 7KH UDWLR ZDV adjusted after the adoption of the 12th accounting standard since 1 January 2013, leading to retroactive adjustments for a FRPSDULVRQ SXUSRVH +RZHYHU LQ WKH &RPSDQ\ DQG VXEVLGLDULHV UHSDLG SDUWLDO ORQJ WHUP ORDQV ZKLOH WKH HTXLW\ increased thanks to the annual net profits. The debt to equity ratio thus improved.

182

Analysis of liquidity and sufficiency of consolidated capital

Property development requires a huge investment in the initial stage. Raising funds has been the Company and subsidiariesâ&#x20AC;&#x2122; main focus in maintain and growing the Groupâ&#x20AC;&#x2122;s business. Meanwhile, maintaining liquidity has been crucial in maintaining normal business operations. The overall analysis of cash flow on funding and investing activities as well as WKH DQDO\VLV RI NH\ OLTXLGLW\ UDWLRV OLNH FXUUHQW UDWLR TXLFN UDWLR DQG GHEW PDWXULW\ ZLOO UHIOHFW IXQG UDLVLQJ DQG OLTXLGLW\ PDQDJHPHQW RI WKH &RPSDQ\ DQG VXEVLGLDULHV ,W ZLOO DOVR H[SODLQ WKH &RPSDQ\ DQG VXEVLGLDULHVt DELOLW\ WR SD\ DQG REOLJDWLRQV more clearly.

Analysis on fund-raising and investing activities 1) Financing activities 7KH &RPSDQ\ DQG VXEVLGLDULHV UDLVHG SURMHFW GHYHORSPHQW IXQGV WKURXJK $ SURMHFW ILQDQFLQJ IURP ILQDQFLDO LQVWLWXWLRQV % UDLVLQJ IXQGV IURP WKH SXEOLF WKURXJK GHEHQWXUHV 'XULQJ WKH *URXS KDG H[WHQVLYHO\ H[SDQGHG EXVLQHVV DQG consequently required a large sum of funds. In the period, focus was also placed on condominium development, of which construction period was longer than the development of single houses and townhouses. The Company thus had to issue debentures, aside from project financing. Project financing from financial institutions for property development normally carries a long term maturity and the borrowers are required to repay the loans accordingly to revenue realization or cash flow received from the projects. The Companyâ&#x20AC;&#x2122;s debentures offered to the public are rated by rating agencies and financial advisors are appointed to provide advice on the types DQG FRQGLWLRQV DV ZHOO DV SUHSDUH WKH LQIRUPDWLRQ RI WKH GHEHQWXUHV ZKLFK ZLOO EH ILOHG IRU WKH DSSURYDO IURP WKH 6HFXULWLHV DQG ([FKDQJH &RPPLVVLRQ 7KH XQGHUZULWHUV DUH DSSRLQWHG WR VHOO WKH GHEHQWXUHV WR WKH SXEOLF &DVK UHYHQXH IURP GHYHORSPHQW projects would be used to redeem the debentures according to their maturities. 2) Investing activities The Company and subsidiaries have required an investment for property project development. This includes the investment on land plots and the construction of each project which will be booked in the financial statements as the development cost. As the construction works continue, the Company and subsidiaries will book the construction cost as WUDGH SD\DEOHV /RDQV IURP ILQDQFLDO LQVWLWXWLRQV ZLOO EH GUDZQ WR FRYHU WKH FRQVWUXFWLRQ FRVW $IWHU WKH FRPSOHWLRQ WKH Company and subsidiaries will realize revenue and receive cash only after the complete units are transferred as well as UHDOL]H WKH VHOOLQJ H[SHQVHV LQ WKH VWDWHPHQW RI FRPSUHKHQVLYH LQFRPH 7KH UHFHLYHG FDVK IURP KRXVH DQG FRQGRPLQLXP sales will then be used to repay the project financing loans and some are reserved to redeem mature debentures.

183

ANNUAL REPORT 2014

7KH IROORZLQJ LV WKH GHWDLO RI WKH IXQG UDLVLQJ DQG LQYHVWLQJ DFWLYLWLHV Fund-raising

Investing

1. Working capital like construction payments, w 1RUPDO OLTXLGLW\ PDQDJHPHQW E\ WKH &RPSDQ\ DQG deposits and advance payments from subsidiaries 6HH GHWDLOV LQ &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV

customers 6HH GHWDLOV LQ &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV

2. Operating profit/received cash from property w 5HSD\PHQW RI SULQFLSDO DQG LQWHUHVW projects 6HH GHWDLOV RI FDVK IRU ORQJ WHUP ORDQ UHSD\PHQW DQG 6HH GHWDLOV LQ &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV

debenture redemption in Cash flow from financing DFWLYLWLHV

3.1 Proceeds from debenture isssuance 6HH GHWDLOV LQ &DVK IORZ IURP ILQDQFLQJ DFWLYLWLHV

w /DQG DFTXLVLWLRQ IRU SURSHUW\ GHYHORSPHQW 6HH GHWDLOV RI FDVK SD\PHQW IRU WKH ODQG EDQN advance payment for the land and leasing rights in &DVK IORZ IURP LQYHVWLQJ DFWLYLWLHV

w /LTXLGLW\ PDQDJHPHQW LQ WKH SHULRG RI H[WHQVLYH investment by the Company and subsidiaries 6HH GHWDLOV LQ &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV

3.2 Project finance from financial institutions w &RQVWUXFWLRQ FRVW DQG RWKHU H[SHQVHV RQ SURMHFW 6HH GHWDLOV LQ &DVK IORZ IURP ILQDQFLQJ DFWLYLWLHV

development 6HH GHWDLOV LQ &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV The development cost is booked in the statement of FRPSUHKHQVLYH LQFRPH RQFH VDOH UHYHQXH LV UHDOL]HG

184

Liquidity analysis 7KH FRQVROLGDWHG FXUUHQW UDWLR DW WKH HQG RI VWRRG DW DQG UHVSHFWLYHO\ 7KH UDWLR GHFOLQHG LQ DV WKH DPRXQW RI GHEHQWXUHV PDWXULQJ ZLWKLQ D \HDU SHULRG LQFUHDVHG 7KH TXLFN UDWLR DW WKH HQG RI WKH \HDUV URVH IURP 0.16:1 in 2012 to 0.19:1 in 2013 and 0.21:1 in 2014, indicating the improvement in the Company and subsidiariesâ&#x20AC;&#x2122; liquidity. However, the quick ratio below 1:1 reflected normal liquidity shortage witnessed by all property developments. Moreover, the ORDQ UHSD\PHQW SHULRG RI WKH &RPSDQ\ DQG VXEVLGLDULHV LPSURYHG LQ WKH SDVW WKUHH \HDUV IURP GD\V DW WKH HQG RI WR GD\V LQ DQG GD\V LQ 7KH OHQJWKHQHG SHULRG VKRZHG WKH JUHDWHU IOH[LELOLW\ WKH *URXS ZLWQHVVHG LQ repaying debts to trade creditors. ,Q WKH SDVW IHZ \HDUV WKH &RPSDQ\ DQG VXEVLGLDULHV H[SHULHQFHG IDVW H[SDQVLRQ GXH WR WKH LQYHVWPHQW LQ VHYHUDO QHZ projects, as well as a greater focus in condominium development which requires a longer construction period. On concerns that the Group may suffer from liquidity shortage, there is a need to find new sources of working capital. To cope with the situation, the Group offered debentures with short and long maturities, sold assets to property funds and sold some land plots in the land bank. However, in the long run, once the development pace returns to normal, the Group plans to keep the project financing and debenture issuance in the appropriate ratio, taking into account relevant factors like the financial cost of each tool, market condition, DQG WKH IXQG UDLVLQJ SHULRG Key current ratios are as follows; Key current ratios

Unit

Current ratio Quick ratio Repayment period

[ [ days

Accounting year as of 31 December 31 December 31 December 2012 2013 2014

1.99 0.16

2.11 0.19 102.34

0.21

Ability to repay loans To finance project development, the Group seeks project financing from financial institutions and issue bonds with the ULJKW UHSD\PHQW SHULRGV $V RI 'HFHPEHU WKH FRQVROLGDWHG OLDELOLWLHV VWRRG DW %W PLOOLRQ 2I WRWDO SURPLVVRU\ QRWHV ZHUH YDOXHG %W PLOOLRQ ELOO RI H[FKDQJH %W PLOOLRQ GHEHQWXUHV WR FRPH GXH ZLWKLQ D \HDU %W PLOOLRQ ORQJ WHUP ORDQV WR PDWXUH ZLWKLQ D \HDU %W PLOOLRQ UHPDLQLQJ ERQGV %W PLOOLRQ DQG UHPDLQLQJ ORQJ WHUP ORDQV %W PLOOLRQ 7KH *URXStV LQWHUHVW FRYHUDJH UDWLR GXULQJ VWRRG DW [ [ DQG [ UHVSHFWLYHO\ 7KH UDWLR HDVHG LQ DQG GXH WR WKH *URXStV ZHDNHU FDVK IORZ IURP RSHUDWLQJ DFWLYLWLHV DQG KLJKHU LQWHUHVW H[SHQVHV 7KH *URXStV FDVK EDVLV UDWLR VWRRG DW [ [ DQG [ LQ DQG UHVSHFWLYHO\ 7KH LQFUHDVH LQ UHIOHFWHG WKH increase in the net profit.

185

ANNUAL REPORT 2014

Credit rating by TRIS Rating 75,6 5DWLQJ &RPSDQ\ /LPLWHG 75,6 5DWLQJ DVVLJQHG WKH FRPSDQ\ UDWLQJ RI u%% v RQ 'HFHPEHU UHIOHFWLQJ the Companyâ&#x20AC;&#x2122;s higher financial leverage as well as rising operating costs in the property development and hotel businesses. The rating also took into account the cyclical and competitive nature of the property development industry, plus concerns over rising operating costs and the widespread labor shortage among contractors. +RZHYHU WKH KLJK OHYHUDJH ZDV LQ OLQH ZLWK WKH *URXStV H[WHQVLYH EXVLQHVV H[SDQVLRQ LQ WKH SDVW IHZ \HDUV 2QFH WKH SURMHFWV VWDUW WR JHQHUDWH UHYHQXH ORQJ WHUP ORDQV ZLOO EH UHSDLG DQG GHEHQWXUHV ZLOO EH UHGHHPHG 0RUH UHYHQXH ZLOO EH booked and the shareholdersâ&#x20AC;&#x2122; equity would rise, which will eventually bring down the leverage. 75,6 5DWLQJ DOVR SODFHG WKH FRPSDQ\ DQG LVVXH UDWLQJ RI WKH &RPSDQ\ RQ &UHGLW$OHUW ZLWK D uGHYHORSLQJv LPSOLFDWLRQ on 19 June 2014. The rating action followed the Companyâ&#x20AC;&#x2122;s announcement on 16 June 2014 that it plans to acquire Thai 3URSHUW\ 73523 75,6 5DWLQJ YLHZHG WKDW VXFK DFTXLVLWLRQ ZRXOG FKDQJH WKH &RPSDQ\tV FDSLWDO VWUXFWXUH 7KH SRVW acquisition structure would depend on the type of funding used to finance the acquisition. It also viewed that other benefits from the acquisition are still uncertain and remain to be seen.

Analysis of consolidated cash flow

6WDWHPHQWV RI FDVK IORZ EHWZHHQ DQG ZHUH DV IROORZV Consolidated financial statements (Unit: Million Baht)

Cash flow from operating activities Cash flow from investment activities Cash flow from financing activities /RZHU GLIIHUHQFH RQ ILQDQFLDO VWDWHPHQW WUDQVODWLRQ 1HW FDVK IORZ LQFUHDVH GHFUHDVH

186

2012

2013

2014

7.70 (174.54)

274.96

1,117.12 1,255.31

w &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV ,Q WKH FDVK IORZ SRVLWLRQ UHWXUQHG SRVLWLYH DW %W PLOOLRQ SDUWO\ GXH WR WKH SRVW IORRG UHFRYHU\ :KLOH revenue increased, labor shortage resulted in a delay in construction which lowered cash payments as well as inventory. ,Q WKH FRQVROLGDWHG FDVK IORZ IURP RSHUDWLQJ DFWLYLWLHV ZHUH LQ WKH QHJDWLYH WHUULWRU\ DW %W PLOOLRQ GXH WR WKH ODXQFK RI PRUH GHYHORSPHQW SURMHFWV DV ZHOO DV WKH FRQVWUXFWLRQ RI PRUH FRQGRPLQLXP SURMHFWV DV well as the development of a shopping mall. Moreover, the company also purchased 64 houses from Property 3HUIHFW )XQG ZRUWK %W PLOOLRQ LQ WKH ILUVW TXDUWHU RI 7KH KRXVHV ZLOO EH VROG ODWHU In 2014, the consolidated cash flow from operating activities was minus Bt427.16 million. The main item was the SURPLVVRU\ QRWHV IRU WKH SXUFKDVH RI ODQG IURP WKH *URXS LQFUHDVHG E\ %W PLOOLRQ ZKLOH LQWHUHVW H[SHQVHV WRSSHG %W PLOOLRQ DQG SD\PHQWV WR WUDGH FUHGLWRUV UHDFKHG %W PLOOLRQ

w &DVK IORZ IURP LQYHVWLQJ DFWLYLWLHV 'XULQJ WKH *URXStV FDVK IORZ IURP LQYHVWLQJ DFWLYLWLHV ZDV PLQXV %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ DV WKH FRPSDQ\ DFTXLUHG PRUH ODQG SORWV IRU IXWXUH H[SDQVLRQ RI WKH &RPSDQ\ DQG VXEVLGLDULHV as well as the overseas investment. Here is the summary of the activities. In 2012, investing activities covered the advance payments for new land as well as leasing rights worth totally %W PLOOLRQ QHW FDVK SD\PHQWV RQ RYHUVHDV LQYHVWPHQW ZRUWK %W PLOOLRQ DQG SD\PHQWV IRU EXLOGLQJ DQG HTXLSPHQW ZRUWK %W PLOOLRQ

,Q DGYDQFH SD\PHQW ZDV PDGH IRU ODQG SORWV DV ZHOO DV OHDVH ULJKWV ZRUWK WRWDOO\ %W PLOOLRQ 7KH FRPSDQ\ DOVR SDLG %W PLOOLRQ LQ QHW FDVK IRU WKH LQYHVWPHQW LQ D VXEVLGLDU\ WKH VWDNH LQ 0DUHH\D 6WXII 3XEOLF &RPSDQ\ /LPLWHG ZKLFK KROGV WKH \HDU OHDVH ULJKW IRU D ODQG SORW LQ 6RL 5DPLQWUD %DQJNRN *XDUDQWHH OLQNHG GHSRVLWV URVH E\ %W PLOOLRQ DV ZHOO DV EXLOGLQJV DQG HTXLSPHQW URVH E\ %W PLOOLRQ In 2014, the consolidated cash flow from investment activities returned to the positive territory, at Bt1,117.12 million, as the Company received Bt720.00 million from the sale of its investment in an associated company, .UXQJWKHS /DQG DQG HDUQHG %W PLOOLRQ IURP WKH VDOH RI VRPH ODQG SORWV

w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

,Q FDVK IORZ IURP ILQDQFLQJ DFWLYLWLHV WRWDOHG %W PLOOLRQ %W PLOOLRQ IURP WKH LVVXDQFH RI QHZ VKDUHV IRU WKH FRQYHUVLRQ RI ZDUUDQWV 3) : %W PLOOLRQ LQYHVWPHQW LQ VXEVLGLDULHV E\ QRQ FRQWUROOLQJ LQWHUHVWV %W PLOOLRQ QHW LQFUHDVH LQ ERUURZLQJ %W PLOOLRQ LQ QHW LQFUHDVH LQ GHEHQWXUHV %W PLOOLRQ QHW GHFUHDVH LQ SURPLVVRU\ QRWHV DQG %W PLOOLRQ LQ GLYLGHQG SD\PHQW

,Q WKH FRQVROLGDWHG FDVK IORZ IURP ILQDQFLQJ DFWLYLWLHV ZDV %W PLOOLRQ ,Q WKH \HDU ORQJ WHUP ORDQV ZRUWK %W PLOOLRQ ZHUH UHSDLG ZKLOH LW UHFHLYHG QHW SURFHHGV RI %W PLOOLRQ IURP WKH LVVXDQFH RI GHEHQWXUHV 7KH QHW FDVK IORZ IURP SURPLVVRU\ QRWHV DQG ELOO RI H[FKDQJH DOVR LQFUHDVHG E\ %W PLOOLRQ

187

ANNUAL REPORT 2014

Dividend payments since 2009 Accounting year

2009 2010 2011 2012 2013 20141/

Dividend per share (Baht)

0.33 0.04 0.033

Total (Million Baht)

196.90 Omission

0.044

Payment date

27 May 2010 27 May 2011 0D\ 23 May 2013 0D\

Note: %RDUG RI 'LUHFWRUVt UHVROXWLRQ RQ )HEUXDU\

Obligations and contingent liabilities $V RI 'HFHPEHU WKH *URXStV IXWXUH REOLJDWLRQV DQG OLDELOLWLHV DUH DV IROORZV w 2EOLJDWLRQV RQ FDSLWDO H[SHQGLWXUH $ 7KH *URXS LV ERXQG E\ WKH REOLJDWLRQ UHODWHG WR WKH DZDUGHG FRQVWUXFWLRQ FRQWUDFWV IRU KRXVLQJ DQG FRQGRPLQLXP projects worth Bt3,126.33 million. % 7KH *URXS LV FRPPLWWHG WR EX\ ODQG ZRUWK DERXW %W PLOOLRQ & $ VXEVLGLDU\ LV FRPPLWWHG WR D ODQG OHDVH IRU SURSHUW\ GHYHORSPHQW ZRUWK DSSUR[LPDWHO\ %W PLOOLRQ ' $ VXEVLGLDU\ LV FRPPLWWHG WR DQ DUFKLWHFWXUDO GHVLJQ FRQWUDFW IRU D VKRSSLQJ PDOO RIILFH KRWHO SURMHFW DQG D SURMHFW DGYLVRU\ IHH ZRUWK DERXW %W PLOOLRQ DQG %W PLOOLRQ \HQ

w 2EOLJDWLRQV RQ RSHUDWLQJ DQG VHUYLFH OHDVH DJUHHPHQWV The Group has entered into operating and service lease agreements, relating the lease of condominium land, vehicles, DGYHUWLVLQJ ELOOERDUGV RIILFH DQG VHUYLFHV 7KH DJUHHPHQWV ODVW IURP WR \HDUV 7KH DJUHHPHQWV DUH LUUHYRFDEOH and require minimum payments in the future.

188

Payments due within

31 December 2014

31 December 2013

1 year \HDUV

%W PLOOLRQ DQG PLOOLRQ \HQ %W PLOOLRQ DQG PLOOLRQ \HQ

%W PLOOLRQ %W PLOOLRQ

'XULQJ WKH *URXStV REOLJDWLRQV IRU WKH OHDVH DJUHHPHQWV DV VKRZQ LQ WKH ILQDQFLDO VWDWHPHQWV ZHUH YDOXHG at Bt417.20 million.

w 2EOLJDWLRQV RQ VHUYLFH DJUHHPHQWV $ $ VXEVLGLDU\ VWUXFN DQ DGYLVRU\ FRQWUDFW ZLWK D FRPSDQ\ IRU LWV SURSHUW\ SURMHFW 7KH FRQWUDFW SHULRG UXQV IURP 2FWREHU WKURXJK 'HFHPEHU ,W UHTXLUHV WKH VXEVLGLDU\ WR PDNH PRQWKO\ SD\V DV VSHFLILHG LQ WKH FRQWUDFW ,Q WKH SD\PHQW ZDV %W PLOOLRQ % 7KH &RPSDQ\ DQG D VXEVLGLDU\ VWUXFN ILQDQFLDO DGYLVRU\ VHUYLFH FRQWUDFWV ZLWK WZR FRPSDQLHV ZKLFK DUH UHODWHG GDWHG 0DUFK DQG -DQXDU\ 8QGHU WKH FRQWUDFWV WKH &RPSDQ\ DQG WKH VXEVLGLDU\ must pay monthly fees as specified. In 2014, the payments were valued at Bt3.60 million. & 7KH &RPSDQ\ KLUHG D ILQDQFLDO DGYLVRU IRU WKH DFTXLVLWLRQ RI 7KDL 3URSHUW\ DQG *UDQG $VVHW 8QGHU WKH FRQWUDFW VLJQHG RQ $SULO WKH &RPSDQ\ PXVW SD\ WKH VHUYLFH IHH RQFH WKH 6HFXULWLHV DQG ([FKDQJH Commission approved the Companyâ&#x20AC;&#x2122;s plan to issue and offer new shares.

w 2WKHU ORDQ JXDUDQWHHV $ 7KH &RPSDQ\tV FRPELQHG ORDQ JXDUDQWHH WR VXEVLGLDULHV ZDV YDOXHG DW %W PLOOLRQ 7KH VXEVLGLDULHV DUH (VWDWH 3HUIHFW %W PLOOLRQ %ULJKW 'HYHORSPHQW %DQJNRN %W PLOOLRQ 5HVLGHQFH 1XPEHU 1LQH %W PLOOLRQ &KLDQJ 0DL 'HYHORSPHQW %W PLOOLRQ DQG :H 5HWDLO %W PLOOLRQ 7KH &RPSDQ\ is not required to take responsibility as the subsidiaries have not defaulted on loan repayments. % %DQN JXDUDQWHH LVVXHG RQ EHKDOI RI WKH &RPSDQ\ DQG VXEVLGLDULHV IRU QRUPDO EXVLQHVV RSHUDWLRQV LV ZRUWK Bt3,610.49 million. Of total, Bt610.49 million is used to guarantee infrastructure development and Bt3,000 million to back debentures.

w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x UHQWV RFFXSDQF\ UDWH DQG GLVFRXQW UDWH XVHG WR FDOFXODWH WKH OLDELOLW\ ZHUH DGMXVWHG 7KH PDQDJHPHQW EHOLHYHG WKDW WKH QHZ assumptions are in line with the current situation. Additional liability of Bt24.03 million was booked as â&#x20AC;&#x153;loss from UHQW JXDUDQWHHv LQ +RZHYHU LI 8QLORIW 6DOD\DtV DFWXDO UHYHQXH LQ WKH IXWXUH GLIIHUV VLJQLILFDQWO\ IURP WKH estimate, the Company may need to set aside additional provisions.

189

ANNUAL REPORT 2014

Analysis of performance and financial status Analysis of performance Overall performance 7KH &RPSDQ\ UHJLVWHUHG %W PLOOLRQ LQ WRWDO UHYHQXH LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 2014. The 2013 revenue declined from the previous year partly due to the policy to have subsidiaries handle business projects. )RU H[DPSOH %ULJKW 'HYHORSPHQW %DQJNRN D ZKROO\ RZQHG VXEVLGLDU\ LV DVVLJQHG WR GHYHORS DOO L&RQGR SURMHFWV (VWDWH 3HUIHFW DQG 5HVLGHQFH 1XPEHU 1LQH DOVR ZKROO\ RZQHG VXEVLGLDULHV DUH DVVLJQHG WR GHYHORS VLQJOH KRXVH DQG WRZQKRXVH SURMHFWV launched in 2013. 7KH &RPSDQ\tV JURVV SURILW PDUJLQ IURP SURSHUW\ GHYHORSPHQW EXVLQHVV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ LQ DQG UHVSHFWLYHO\ RU DQG UHVSHFWLYHO\ 7KH QHW SURILW ORVV LQ WKH \HDUV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ LQGLFDWLQJ WKH QHW SURILW ORVV PDUJLQ RI DQG UHVSHFWLYHO\ 7KH QHW ORVV LQ ZDV LQ OLQH ZLWK D GHFOLQH LQ UHYHQXH LQ WKH \HDU GXH WR WKH EXVLQHVV H[SDQVLRQ WKURXJK VXEVLGLDULHV Revenue 'XULQJ WKH &RPSDQ\tV UHYHQXH FDPH PDLQO\ IURP WKH SURSHUW\ GHYHORSPHQW EXVLQHVV ZKLFK LQYROYHG WKH sale of land and houses, condominium units and vacant land plots. 2012 Million Baht

Revenue from sales of land and houses Revenue from sales of residential condominium Revenue from sale of land for development Revenue from hotel operations 2WKHU LQFRPH

190

Company financial statements 2013 2014 Million Million % % Baht Baht

4,167.77 60.76 334.66 6.24 369.41 2.29 23.74 694.07 10.12 6,455.90 100.00 5,366.49 100.00 6,859.46 100.00

Revenue from property sales ,Q WKH &RPSDQ\ UHDSHG %W PLOOLRQ IURP WKH VDOHV RI ODQG DQG KRXVHV %W PLOOLRQ IURP WKH VDOHV RI FRQGRPLQLXP XQLWV DQG %W PLOOLRQ IURP WKH VDOHV RI YDFDQW ODQG SORWV 'XH WR WKH SROLF\ WR KDYH ZKROO\ RZQHG VXEVLGLDULHV KDQGOH QHZ GHYHORSPHQW SURMHFWV DV ZHOO DV SROLWLFDO LQVWDELOLW\ LQ WKH IRXUWK TXDUWHU RI WKH &RPSDQ\tV VDOH UHYHQXH IURP ODQG DQG KRXVHV LQ WKH \HDU GURSSHG E\ %W PLOOLRQ IURP WR %W PLOOLRQ ZKLOH FRQGRPLQLXP VDOH UHYHQXH DOVR GHFUHDVHG E\ %W PLOOLRQ WR %W PLOOLRQ +RZHYHU WKH &RPSDQ\ HDUQHG %W PLOOLRQ IURP VHOOLQJ YDFDQW ODQG SORWV ZKLFK URVH E\ %W PLOOLRQ IURP RU In 2014, land and house sales generated Bt4,167.77 million in revenue, while the Company reaped Bt369.41 million IURP FRQGRPLQLXP VDOH DQG %W PLOOLRQ IURP ODQG VDOH 7KH DPRXQWV DFFRXQWHG IRU DQG RI WRWDO UHYHQXH UHVSHFWLYHO\ 7KH &RPSDQ\tV UHYHQXH IURP SURSHUW\ VDOH LQ URVH E\ %W PLOOLRQ IURP ZKLOH UHYHQXH IURP ODQG DQG KRXVHV GURSSHG E\ %W PLOOLRQ FRQGRPLQLXP UHYHQXH URVH E\ %W PLOOLRQ DQG ODQG VDOH rose by Bt1,303.34 million. Other revenue of the Company covered interest receivables and confiscated down payments. In the three years, the revenue WRWDOHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ Development cost The Companyâ&#x20AC;&#x2122;s development cost for property development business covers the selling cost of land and houses, condominiums and vacant land plots. The cost of houses and condominiums is booked accordingly to the average development FRVW SHU XQLW EDVHG RQ WKH HVWLPDWHG GHYHORSPHQW FRVW DQG DFWXDO FRVW 7KH GHYHORSPHQW FRVW LQ WRWDOHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\ 2012 Million Baht

'HYHORSPHQW FRVW RI ODQG DQG KRXVHV 'HYHORSPHQW FRVW RI FRQGRPLQLXP XQLWV Cost of land 102.92 Total 3,829.79

2.69 100.00

Non-consolidated 2013 Million % Baht

212.99 142.06 3,251.76

2014 Million Baht

2,710.76 4.37 100.00 4,058.07

100.00

,Q WKH &RPSDQ\ UHJLVWHUHG %W PLOOLRQ LQ WKH GHYHORSPHQW FRVW RI ODQG DQG KRXVHV %W PLOOLRQ IRU FRQGRPLQLXP DQG %W PLOOLRQ IRU YDFDQW ODQG RU

191

ANNUAL REPORT 2014

,Q OLQH ZLWK GHFOLQLQJ UHYHQXH LQ WKH GHYHORSPHQW FRVW RI ODQG DQG KRXVHV DOVR GURSSHG E\ %W PLOOLRQ IURP WR %W PLOOLRQ 7KH FRVW RI FRQGRPLQLXP GURSSHG E\ %W PLOOLRQ RQ \HDU WR %W PLOOLRQ 7KH FRVW RI ODQG KRZHYHU LQFUHDVHG E\ %W PLOOLRQ WR %W PLOOLRQ 7KH VHOOLQJ FRVW UDWLR ZDV ,Q WKH GHYHORSPHQW FRVW WRWDOHG %W PLOOLRQ 7KDW IRU ODQG DQG KRXVHV UHDFKHG %W PLOOLRQ RU FRQGRPLQLXP %W PLOOLRQ RU DQG ODQG %W PLOOLRQ RU 7KH &RPSDQ\tV GHYHORSPHQW FRVW DOVR URVH LQ OLQH ZLWK UHYHQXH ULVLQJ E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU 7KH FRVW IRU ODQG DQG KRXVHV GURSSHG by Bt204.09 million, that for condominium went up by Bt46.04 million, and that for land rose by Bt946.22 million. Gross profit and gross profit margin 7KH &RPSDQ\tV JURVV LQFRPH VWRRG DW %W PLOOLRQ LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ JHQHUDWLQJ JURVV SURILW PDUJLQ RI DQG UHVSHFWLYHO\ $ GURS LQ JURVV SURILW DQG JURVV SURILW PDUJLQ LQ DQG ZDV LQ OLQH ZLWK WKH LQFUHDVH LQ VHOOLQJ H[SHQVHV 2012 Million Baht

Profit from land and house sale Profit from condominium sale Profit from land sale Total

222.74 44.94 2,401.45

30.39 38.54

Non-consolidated 2013 Million % Baht

1,815.15

2014 Million Baht

36.36 110.39 35.82 2,107.32

34.96 33.16 34.18

Sale and administrative expenses 7KH &RPSDQ\tV VHOOLQJ H[SHQVHV VWRRG DW %W PLOOLRQ LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ accounting for 10.76%, 11.74% and 9.60% of total revenue, respectively. 7KH DGPLQLVWUDWLYH H[SHQVHV LQ WKH \HDUV WRWDOHG %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ RU DQG RI WRWDO UHYHQXH UHVSHFWLYHO\ 7KH LQFUHDVH LQ ZDV DWWULEXWDEOH WR DQ LQFUHDVH LQ VDODU\ ZDJH DQG RWKHU EHQHILWV RI HPSOR\HHV XQGHU WKH SODQ WR VWUHQJWKHQ KXPDQ UHVRXUFHV IRU IXWXUH H[SDQVLRQ 2012 Million % of Baht revenue

6DOH H[SHQVHV $GPLQLVWUDWLYH H[SHQVHV 6DOH DQG DGPLQLVWUDWLYH H[SHQVHV

192

694.77 1,643.54

10.76 14.70 25.46

Non-consolidated 2013 Million % of Baht revenue

630.00 1,608.87

11.74 29.98

2014 Million % of Baht revenue

1,010.47 1,668.83

9.60 14.73 24.33

Other expenses w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guarantee. In 2014, the Company reviewed the liability from the rent guarantee, based on the revised assumptions of monthly rents, occupancy rate and discounted rate. Additional provisions of Bt24.03 million were set aside.

w )LQDQFLDO H[SHQVHV 7KH &RPSDQ\tV ILQDQFLDO H[SHQVHV WRWDOHG %W PLOOLRQ LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH H[SHQVHV LQFUHDVHG DV WKH FRPSDQ\ REWDLQHG DGGLWLRQDO ORDQV WR VXSSRUW QHZ SURMHFW GHYHORSPHQW

Earnings before interest, tax, depreciation, amortization (EBITDA) and net profit 7KH &RPSDQ\tV HDUQLQJV EHIRUH LQWHUHVW WD[ GHSUHFLDWLRQ DPRUWL]DWLRQ (%,7'$ DQG WRWDOHG %W PLOOLRQ LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ JHQHUDWLQJ (%,7'$ PDUJLQ RI DQG respectively. ,Q WKH \HDUV WKH QHW SURILW ORVV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W PLOOLRQ JHQHUDWLQJ WKH QHW SURILW PDUJLQ RI DQG UHVSHFWLYHO\ 7KH QHW ORVV LQ UHVXOWHG IURP D GHFUHDVH LQ JURVV SURILW PDUJLQ IURP QHZ SURMHFWV DV ZHOO DV DQ LQFUHDVH WKH DGPLQLVWUDWLYH DQG ILQDQFLDO H[SHQVHV

193

ANNUAL REPORT 2014

Analysis of financial position Financial position (Unit: Million Baht)

$V RI 'HFHPEHU 5HYLVHG $V RI 'HFHPEHU $V RI 'HFHPEHU

Assets Liabilities Shareholdersâ&#x20AC;&#x2122; equity

21,733.93 13,692.19 24,496.16 27,190.29

Assets 7KH &RPSDQ\tV WRWDO DVVHWV DW WKH HQG RI VWRRG DW %W PLOOLRQ %W PLOOLRQ DW HQG DQG %W PLOOLRQ DW HQG 7RWDO DVVHWV LQ LQFUHDVHG E\ %W PLOOLRQ IURP RU GXH WR WKH ODXQFK RI QHZ SURMHFWV LQ OLQH ZLWK ULVLQJ GHPDQG IRU ORZ ULVH DQG KLJK ULVH SURMHFWV DQ LQFUHDVH LQ LQYHVWPHQW LQ VXEVLGLDULHV OLNH :H 5HWDLO 8 , &RQVWUXFWLRQ %DQJNRN &KLDQJ 0DL 'HYHORSPHQW DQG 8QLORIW 6HUYLFH 7KDLODQG WKH LQYHVWPHQW LQ D KRWHO in Japan; as well as lending to connected entities. $V RI 'HFHPEHU WKH WRWDO DVVHWV VWRRG DW %W PLOOLRQ VKRZLQJ DQ LQFUHDVH E\ %W PLOOLRQ RU IURP HQG 7KH LQFUHDVH ZDV DWWULEXWDEOH WR KLJKHU FDVK DQG FDVK HTXLYDOHQWV KLJKHU GHYHORSPHQW FRVW DQG SURPLVVRU\ QRWHV LVVXHG E\ D ODQG EX\HU %\ YDOXH DW HQG WKH DVVHWV FRQVLVWHG RI GHYHORSPHQW FRVW %W PLOOLRQ RU LQYHVWPHQW LQ VXEVLGLDULHV %W PLOOLRQ RU OHQGLQJ WR FRQQHFWHG SDUWLHV %W PLOOLRQ 14.33%; land bank, Bt3,444.79 million, and advance payment for land purchases, Bt370.06 million, which together constituted FDVK DQG FDVK HTXLYDOHQWV %W PLOOLRQ DQG UHFHLYDEOHV RQ ODQG VDOH SURPLVVRU\ QRWHV x ODQG %W PLOOLRQ RU Property development cost The development cost of ongoing projects is booked as the development cost in the financial statements. It will be UHDOL]HG DV WKH VHOOLQJ H[SHQVHV LQ WKH VWDWHPHQW RI FRPSUHKHQVLYH LQFRPH DIWHU SURSHUW\ WUDQVIHUV WR EX\HUV 7KH &RPSDQ\tV GHYHORSPHQW FRVW LQ VWRRG DW %W PLOOLRQ LQ %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH FRVW LQ URVH E\ %W PLOOLRQ IURP ZKLOH LQ LW LQFUHDVHG E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU 7KH GHYHORSPHQW FRVW WR DVVHWV UDWLR LQ WKH \HDUV ZDV DQG UHVSHFWLYHO\ Details of projects are included in assets for business operation:, assets for sale.

194

Land for development /DQG UHVHUYHG IRU SURSHUW\ GHYHORSPHQW FRQVLVWHG RI WKH FRVW RI ODQG WKH GHYHORSPHQW FRVW RI ODQG WKH FRQVWUXFWLRQ cost, and interest minus land transferred for debt restructuring or debt repayment under the debt rehabilitation plan as well as the provisions on possible depreciation. 7KH FRPSDQ\tV ODQG IRU GHYHORSPHQW ZDV YDOXHG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH YDOXH GHFUHDVHG RQ \HDU E\ %W PLOOLRQ ZKLOH LQ WKH YDOXH IXUWKHU GHFUHDVHG E\ %W PLOOLRQ 7KH YDOXH DFFRXQWHG IRU DQG RI WRWDO DVVHWV UHVSHFWLYHO\ 7KH YDOXH IHOO LQ PDLQO\ EHFDXVH WKH &RPSDQ\ WUDQVIHUUHG WKH ERRNLQJ RI ODQG ZRUWK %W PLOOLRQ WR WKH GHYHORSPHQW cost. The Company considers booking land as the development cost when the development process on the land starts, such as through land clearing or project layout. $V RI 'HFHPEHU WKH QHW ODQG IRU GHYHORSPHQW YDOXH GHFUHDVHG E\ %W PLOOLRQ IURP HQG EHFDXVH VRPH ODQG SORWV ZHUH VROG RQ 6HSWHPEHU 7KH RZQHUVKLS ZDV WUDQVIHUUHG DQG WKH &RPSDQ\ UHFHLYHG WKH SD\PHQW ZRUWK %W PLOOLRQ RQ WRS RI SURPLVVRU\ QRWHV ZRUWK %W PLOOLRQ 7KH SURPLVVRU\ QRWHV ZRUWK %W PLOOLRQ HDFK DUH JXDUDQWHHG E\ D FRPPHUFLDO EDQN 7KH\ ZLOO FRPH GXH LQ 'HFHPEHU 7KH DPRXQW UHFHLYHG ZDV ERRNHG DV SDUW RI QRQ FXUUHQW OLDELOLWLHV SURPLVVRU\ QRWHV GHEWRUV x ODQG 7KH SURPLVVRU\ QRWHV EDFN D EDQN JXDUDQWHH LVVXHG WR JXDUDQWHH the Companyâ&#x20AC;&#x2122;s debentures. Details of land for development is included in assets for business operationsL land for development. Advance payment for land Advance payment for land covers the deposits the Company paid to land owners or agents responsible in accumulating land. Once the land ownership is transferred, the payment will be booked as the development cost or the land for development. 7KH DGYDQFH SD\PHQW VWRRG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH DPRXQW VKRZHG DQ LQFUHDVH E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU ZKLOH LQ LW GURSSHG E\ %W PLOOLRQ on year. The advance payment accounted for 1.20%, 1.99% and 1.36% of total revenue in the years, respectively. $GYDQFH SD\PHQW DV RI 'HFHPEHU LV DV IROORZV $GYDQFH SD\PHQWV WR VHYHUDO ODQG RZQHUV XQGHU WKH VHOO SXUFKDVH DJUHHPHQWV VWUXFN E\ WKH &RPSDQ\ RU ODQG accumulating agents, worth Bt260.72 million. $GYDQFH SD\PHQW WR ODQG DFFXPXODWLQJ DJHQWV EHIRUH WKH VHOO SXUFKDVH DJUHHPHQWV DUH VLJQHG ZLWK ODQG RZQHUV worth Bt109.34 million.

195

ANNUAL REPORT 2014

Investment in subsidiaries 7KH &RPSDQ\tV LQYHVWPHQW LQ VXEVLGLDULHV WRWDO %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ ,Q LW LQFUHDVHG E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU DQG LQ LW URVH E\ %W PLOOLRQ RQ \HDU 7KH DPRXQWV DFFRXQWHG IRU DQG RI WRWDO DVVHWV LQ WKH \HDUV UHVSHFWLYHO\ 7KH LQYHVWPHQW LQFUHDVHG LQ GXH WR WKH &RPSDQ\tV SXUFKDVH RI FRPPRQ VKDUHV DQG FDSLWDO LQFUHDVH VKDUHV RI :H 5HWDLO ZRUWK %W PLOOLRQ DQG WKH LQFUHDVH LQ 8 , &RQVWUXFWLRQ %DQJNRNtV SDLG XS FDSLWDO E\ %W PLOOLRQ ,Q WKH &RPSDQ\ HVWDEOLVKHG &KLDQJ 0DL &RQVWUXFWLRQ UHJLVWHUHG ZLWK SDLG XS FDSLWDO RI %W PLOOLRQ DQG LQYHVWHG %W PLOOLRQ LQ 0DUL\D 6WXII ODWHU UHQDPHG WR 5DP ,QWUD 0DOO 7KH &RPSDQ\ DOVR LQYHVWHG DGGLWLRQDO %W PLOOLRQ LQ FDSLWDO LQFUHDVH VKDUHV RI :H 5HWDLO DQG %W PLOOLRQ LQ 8QLORIWtV FDSLWDO LQFUHDVH VKDUHV ,Q WKH &RPSDQ\ LQYHVWHG %W PLOOLRQ LQ FDSLWDO LQFUHDVH VKDUHV RI 3HUIHFW 6SRUW &OXE Loans to connected entities /RDQV WR FRQQHFWHG HQWLWLHV ZHUH YDOXHG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ ,Q WKH DPRXQW LQFUHDVHG E\ %W PLOOLRQ IURP ZKLOH WKH DPRXQW URVH E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU 7KH DPRXQWV DFFRXQWHG IRU DQG RI WRWDO DVVHWV LQ WKH \HDUV UHVSHFWLYHO\ The following is outstanding loans to connected entities. Outstanding loans (Unit: Million Baht)

Estate Perfect %ULJKW 'HYHORSPHQW %DQJNRN 5HVLGHQFH 1XPEHU 1LQH U&I Construction Bangkok Perfect Prefab We Retail Property Perfect International &KLDQJ 0DL 'HYHORSPHQW Total

196

As of 31 As of 31 As of 31 December 2012 December 2013 December 2014

1,206.71 144.42 40.00 30.00 737.67 3,260.37

410.26 1,712.61 60.00 411.09 3,456.30

246.20 100.00 60.00 774.99 1,013.17 17.33 3,895.25

Land debtor (promissory notes â&#x20AC;&#x201C; land) $W WKH HQG RI WKH XQSDLG YDOXH RI ODQG VROG WR RWKHU SDUWLHV VWRRG DW %W PLOOLRQ EHIRUH ULVLQJ WR %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH DPRXQW LQ URVH E\ %W PLOOLRQ IURP ZKLOH WKH DPRXQW VKRZHG DQ LQFUHDVH E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU 7KH ODQG GHEW WR DVVHW UDWLR GXULQJ WKH \HDUV VWRRG DW DQG UHVSHFWLYHO\ 7KH DPRXQW URVH DV WKH &RPSDQ\ DQG VXEVLGLDULHV VROG ODQG SORWV $V RI 'HFHPEHU ODQG GHEW LV DV IROORZV 3URPLVVRU\ QRWH x ODQG ZRUWK %W PLOOLRQ 'XULQJ WKH &RPSDQ\ VROG ODQG WR D SDUW\ DQG ZDV SDLG %W PLOOLRQ ,Q )HEUXDU\ WKH UHPDLQLQJ DPRXQW ZDV IXOO\ SDLG 3URPLVVRU\ QRWH x ODQG ZRUWK %W PLOOLRQ 7KH QRWHV DUH YDOXHG DW %W PLOOLRQ RQ WKH ERRN GXH WR D GLVFRXQW EDVHG RQ WKH DYHUDJH ERUURZLQJ FRVW RI WKH &RPSDQ\ VXEVLGLDULHV DQG WKH GHEWRU WR UHIOHFW WKH H[SHFWHG value upon the unrealized interest income. Investment in associated companies ,QYHVWPHQW LQ DVVRFLDWHG FRPSDQLHV E\ WKH &RPSDQ\ DQG VXEVLGLDULHV ZDV WKH KROGLQJ LQ .UXQJWKHS /DQG D SURSHUW\ GHYHORSPHQW FRPSDQ\ 7KH %RDUG RI 'LUHFWRUV DW WKH 1RYHPEHU PHHWLQJ UHVROYHG WR VHOO WKH VWDNH WR *ROGHQ /DQG 3URSHUW\ 'HYHORSPHQW 7KH VWDNH ZDV VROG WR *ROGHQ /DQG RQ 'HFHPEHU 7KH FDSLWDO JDLQ ZRUWK %W PLOOLRQ was booked. At the end of 2012 and 2013, the value of investment in associated companies under the equity method was valued at Bt360.00 million, which accounted for 1.66% and 1.47% of total assets in the years, respectively. Cash and cash equivalents &DVK DQG FDVK HTXLYDOHQWV VWRRG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ &DVK DQG FDVK HTXLYDOHQWV LQ URVH E\ %W PLOOLRQ IURP ,Q LW URVH E\ %W PLOOLRQ IURP WKH SUHYLRXV \HDU WKDQNV WR FDVK IORZ IURP LQYHVWLQJ DFWLYLWLHV &DVK DQG FDVK HTXLYDOHQWV LQ WKH \HDUV DFFRXQWHG IRU 3.27% and 7.64% of total assets, respectively. Details of changes in cash and cash equivalents are in Item 16.3.4: Analysis of the Companyâ&#x20AC;&#x2122;s cash flow.

197

ANNUAL REPORT 2014

Land, building and equipment /DQG EXLOGLQJ DQG HTXLSPHQW RI WKH &RPSDQ\ ZDV YDOXHG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH YDOXH LQ GURSSHG E\ %W PLOOLRQ IURP ,Q LW GURSSHG E\ Bt26.12 million from the previous year. The value accounted for 1.14%, 0.91% and 0.72% of total assets in the years, respectively. Trade receivables and other debtors w 3URSHUW\ GHYHORSPHQW The Company realizes the revenue from the sale of houses, condominium units and land after property transfers to EX\HUV 7KH GRZQ SD\PHQW RU LQVWDOPHQWV DUH ERRNHG DV OLDELOLWLHV GRZQ SD\PHQWV DQG DGYDQFH SD\PHQWV &XVWRPHUV who have been transferred the property but have not yet paid in full would be booked in the trade receivables item. At the end of 2012, trade receivables in property development business stood at Bt22.31 million, before falling to %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 3URYLVLRQV ZHUH VHW DVLGH EDVHG RQ WKH DELOLW\ WR SD\ RI LQGLYLGXDO FXVWRPHUV 7KH &RPSDQ\ DQG VXEVLGLDULHV KDYH PDGH FRQWLQXHG HIIRUWV LQ UHWULHYLQJ WKH SD\PHQWV 6RPH FDVHV DUH in court. The Company and subsidiaries believed the provisions are sufficient for the current situation.

w 2WKHU GHEWRUV 2WKHU GHEWRUV DW WKH HQG RI ZHUH YDOXHG DW %W PLOOLRQ EHIRUH ULVLQJ WR %W PLOOLRQ LQ DQG %W million in 2014.

Liabilities 7KH &RPSDQ\t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other creditors worth Bt116.36 million. 'HFUHDVH GXH WR D ORQJ WHUP ORDQ ZRUWK %W PLOOLRQ

198

Non-consolidated % of % of 2012 liabilities 2013 liabilities

Unit: Million Baht

'HEHQWXUHV /RQJ WHUP ORDQV 2,713.99 Trade payables and other creditors 746.63 Promissory notes 333.42 %LOO RI H[FKDQJH 'HSRVLW DQG DGYDQFH SD\PHQWV IURP customers Other current liabilities 2WKHU QRQ FXUUHQW OLDELOLWLHV 7RWDO OLDELOLWLHV 13,692.19

% of 2014 liabilities

2.44

22.47 1.13 636.24

13.34 6.60 2.00

0.36 0.61 100.00 16,653.68

0.76 302.31 0.76 100.00 18,984.29

100.00

Debentures 7KH &RPSDQ\tV GHEHQWXUHV ZHUH YDOXHG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ ,Q WKH YDOXH LQFUHDVHG E\ %W PLOOLRQ IURP ,Q WKH YDOXH LQFUHDVHG E\ %W PLOOLRQ IURP 'HEHQWXUHV DFFRXQWHG IRU DQG RI WRWDO OLDELOLWLHV LQ WKH \HDUV respectively. Details of debentures are in Item 16.2.2: Analysis of consolidated financial position (Debentures). Long-term loans 7KH &RPSDQ\tV ORQJ WHUP ORDQV VWRRG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH YDOXH LQ LQFUHDVHG E\ %W PLOOLRQ IURP ZKLOH LQ WKH YDOXH GHFUHDVHG E\ %W PLOOLRQ IURP 7KH ORQJ WHUP ORDQV WR OLDELOLWLHV UDWLR LQ WKH WKUHH \HDUV ZDV DQG UHVSHFWLYHO\ Most of the loans were used to finance property development.

Unit: Million Baht

/RQJ WHUP ORDQV Minus loans with maturity of less than 1 year 1HW ORQJ WHUP ORDQV

Non-consolidated 31 31 31 December % of December % of December 2012 liabilities 2013 liabilities 2014

% of liabilities

2,713.99

12.49

9.32

2,345.87

10.79

3,411.25

13.93 2,151.49

1.40 7.91

199

ANNUAL REPORT 2014

Trade payables and other creditors 7KH &RPSDQ\tV WUDGH SD\DEOHV DQG RWKHU FUHGLWRUV VWRRG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH YDOXH LQ LQFUHDVHG E\ %W PLOOLRQ IURP DQG LQ WKH YDOXH LQFUHDVHG E\ %W PLOOLRQ IURP 7KH YDOXH RI WUDGH SD\DEOHV DQG RWKHU GHEWRUV DFFRXQWHG IRU DQG RI OLDELOLWLHV GXULQJ UHVSHFWLYHO\ Promissory notes 7KH &RPSDQ\tV SURPLVVRU\ QRWHV ZHUH YDOXHG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ 7KH SURPLVVRU\ QRWHV LQ WKH \HDUV DFFRXQWHG IRU DQG RI WRWDO OLDELOLWLHV respectively. Bills of exchange 7KH &RPSDQ\ GLG QRW KDYH DQ\ ELOO RI H[FKDQJH GXULQJ 7KH ELOO RI H[FKDQJH ZDV YDOXHG DW %W PLOOLRQ DW WKH HQG RI RU RI OLDELOLWLHV Shareholdersâ&#x20AC;&#x2122; equity 7KH VKDUHKROGHUVt HTXLW\ VWRRG DW %W PLOOLRQ DW WKH HQG RI %W PLOOLRQ LQ DQG %W PLOOLRQ LQ ,Q WKH HTXLW\ GURSSHG E\ %W PLOOLRQ RU ,Q WKH HTXLW\ LQFUHDVHG E\ %W PLOOLRQ RU 7KH HTXLW\ WR OLDELOLWLHV UDWLR GXULQJ WKH \HDUV VWRRG DW DQG UHVSHFWLYHO\ Changes in the shareholdersâ&#x20AC;&#x2122; equity in the years are as follows; As of 31 December 2012 (revised) 7KH VKDUHKROGHUVt HTXLW\ DV RI 'HFHPEHU VWRRG DW %W PLOOLRQ FKDQJLQJ PDLQO\ E\ WKH %W PLOOLRQ FDSLWDO LQFUHDVH WKH H[HUFLVH RI ZDUUDQWV 3) : LQWR PLOOLRQ VKDUHV DW %W DSLHFH RU D WRWDO RI %W PLOOLRQ WKH H[HUFLVH RI ZDUUDQWV 3) : LQWR PLOOLRQ VKDUHV DW %W DSLHFH RI D WRWDO RI %W PLOOLRQ DQG WKH QHW SURILW RI %W PLOOLRQ PLQXV GLYLGHQG SD\PHQW RI %W PLOOLRQ As of 31 December 2013 7KH VKDUHKROGHUVt HTXLW\ DV RI 'HFHPEHU VWRRG DW %W PLOOLRQ GURSSLQJ E\ %W PLOOLRQ RU IURP WKH UHYLVHG ILJXUHV LQ 7KH DPRXQW GHFUHDVHG PDLQO\ GXH WR WKH H[HUFLVH RI ZDUUDQWV 3) : WR PLOOLRQ VKDUHV DW %W DSLHFH RU D WRWDO RI %W PLOOLRQ WKH QHW ORVV RI %W PLOOLRQ PLQXV GLYLGHQG SD\PHQW ZRUWK %W million. As of 31 December 2014 7KH VKDUHKROGHUVt HTXLW\ DV RI 'HFHPEHU VWRRG DW %W PLOOLRQ DQ LQFUHDVH E\ %W PLOOLRQ RU IURP HQG 7KH LQFUHDVH ZDV GXH PDLQO\ WR WKH QHW SURILW RI %W PLOOLRQ

200

Shareholdersâ&#x20AC;&#x2122; equity structure Unit: Million Baht

3DLG XS FDSLWDO 6KDUH ORVV /HJDO UHVHUYHV RI UHWDLQHG HDUQLQJV Unappropriated retained earnings Other elements 6KDUHKROGHUVt HTXLW\ W3)

2012

2013

2014

241.60

8,041.74

241.60

7,842.48

260.60 2,241.93

8,206.00

Details of warrants are included in Item 16.2.2: Analysis of consolidated financial position: warrants (PF-W2) and (PF-

Analysis of liquidity and capital sufficiency 'XH WR WKH FDSLWDO LQWHQVLYH QDWXUH RI WKH SURSHUW\ GHYHORSPHQW EXVLQHVV WKH &RPSDQ\ KDV ILUPO\ IRFXVHG RQ OLTXLGLW\ management, through cash inflow and outflow forecasts. The forecasts allow the Company to appropriately outline the ILQDQFLDO DQG IXQG UDLVLQJ SODQV )RU H[DPSOH ZH FDQ VHHN SURMHFW ILQDQFH RU LVVXH ERQGV WR PDWFK WKH LQYHVWPHQW SODQV DW a certain period of time. Moreover, the Company stays prepared on working capital, to ensure sufficient liquidity. See additional details in Item 16.2.3.1: Analysis on fund-raising and investment, which is part of the analysis of the consolidated performance and financial position.

201

ANNUAL REPORT 2014

Analysis of liquidity ratio

7KH &RPSDQ\tV OLTXLGLW\ UDWLR DW WKH HQG RI VWRRG DW [ [ DQG [ UHVSHFWLYHO\ 7KH UDWLR GURSSHG in 2014 as the amount of debentures maturing within one year increased. However, the quick ratio and repayment period WHQGHG WR LPSURYHG 7KH TXLFN UDWLR LPSURYHG IURP [ LQ WR [ LQ DQG [ LQ 7KH UHSD\PHQW SHULRG DOVR LQFUHDVHG IURP GD\V WR GD\V DQG GD\V UHVSHFWLYHO\ Key liquidity ratio is as follows; Key liquidity ratio

Accounting year Unit 31 December 2012 31 December 2013 31 December 2014

/LTXLGLW\ UDWLR Quick ratio Repayment period

[ [ days

1.30 0.10 62.79

1.64 0.14

1.19 0.19

Ability to repay and contingency liabilities $V RI 'HFHPEHU WKH &RPSDQ\tV OLDELOLWLHV VWRRG DW %W PLOOLRQ FRQVLVWLQJ RI SURPLVVRU\ QRWHV %W PLOOLRQ ELOO RI H[FKDQJH %W PLOOLRQ GHEHQWXUHV WR PDWXUH ZLWKLQ D \HDU %W PLOOLRQ ORQJ WHUP ORDQV WR PDWXUH ZLWKLQ D \HDU %W PLOOLRQ UHPDLQLQJ GHEHQWXUHV %W PLOOLRQ DQG UHPDLQLQJ ORQJ WHUP ORDQV %W PLOOLRQ 7KH &RPSDQ\tV LQWHUHVW FRYHUDJH UDWLR GXULQJ VWRRG DW [ [ DQG [ UHVSHFWLYHO\ 7KH OHYHUDJH UDWLR LQ WKH \HDUV ZDV [ [ DQG [ UHVSHFWLYHO\ See more details in Item 16.2.3.3: Ability to repay, part of the analysis on consolidated performance and financial position

Analysis on cash flow &DVK IORZ GXULQJ

Non-consolidated (Unit: Million Baht)

Cash flow from operating activities Cash flow from investment activities Cash flow from financing activities 'LIIHUHQWLDO IURP GRZQZDUG UHYLVLRQ LQ ILQDQFLDO VWDWHPHQWV 1HW LQFUHDVH GHFUHDVH LQ FDVK IORZ

202

2012

2013

2014

1,093.19 2,412.23 (304.08) 254.13 1,276.75

w &DVK IORZ IURP RSHUDWLQJ DFWLYLWLHV 'XULQJ WKH &RPSDQ\ ODXQFKHG VHYHUDO VLQJOH KRXVH SURMHFWV ,Q WKH FDVK IORZ IURP RSHUDWLQJ DFWLYLWLHV LQFUHDVHG WR %W PLOOLRQ GXH WR WKH PDUNHW UHFRYHU\ IURP WKH VOXPS IROORZLQJ WKH JUHDW IORRGV LQ 0HDQZKLOH labor shortage hurt the construction works, pressuring the cash flow from operating activities and inventory. In 2013, WKH &RPSDQ\ UHJLVWHUHG QHJDWLYH FDVK IORZ IURP RSHUDWLQJ DFWLYLWLHV ZRUWK %W PLOOLRQ GXH WR WKH UHSXUFKDVH RI KRXVHV IRU UH VDOH SXUSRVH IURP 3URSHUW\ 3HUIHFW )XQG ZRUWK %W PLOOLRQ LQ WKH ILUVW TXDUWHU 3ROLWLFDO LQVWDELOLW\ in the fourth quarter also delayed ownership transfers. In 2014, the Company also registered negative cash flow from operating activities of Bt1,911.23 million, as SURPLVVRU\ QRWH LVVXHUV VHWWOHG ODQG GHEW ZRUWK %W PLOOLRQ DQG WKH LQWHUHVW H[SHQVH RI %W PLOOLRQ ZHUH paid.

w &DVK IORZ IURP LQYHVWLQJ DFWLYLWLHV 'XULQJ FDVK IORZ IURP LQYHVWLQJ DFWLYLWLHV VWRRG DW %W PLOOLRQ %W PLOOLRQ DQG %W million, respectively.

,Q WKH &RPSDQ\ PDGH DGYDQFH SD\PHQW IRU ODQG DQG SXUFKDVHG ODQG IRU SURSHUW\ GHYHORSPHQW ZRUWK %W PLOOLRQ ORDQHG %W PLOOLRQ WR FRQQHFWHG HQWLWLHV DQG QHW FDVK SD\PHQW RI %W PLOOLRQ IRU WKH SXUFKDVH RI shares in subsidiaries. In 2013, the activities involved the advance payment for land and land purchases worth totally Bt232.34 million, net FDVK SD\PHQW IRU WKH LQYHVWPHQW LQ VXEVLGLDULHV ZRUWK %W PLOOLRQ ORQJ WHUP LQYHVWPHQW ZRUWK %W PLOOLRQ DQG ORDQ WR FRQQHFWHG HQWLWLHV ZRUWK %W PLOOLRQ In 2014, the activities returned to positive area worth Bt1,093.19 million, thanks to the sale of investment in an DVVRFLDWHG FRPSDQ\ .UXQJWKHS /DQG ZRUWK %W PLOOLRQ DV ZHOO DV FDVK SD\PHQW IURP WKH VDOH RI YDFDQW ODQG SORWV ZRUWK %W PLOOLRQ

w &DVK IORZ IURP ILQDQFLQJ DFWLYLWLHV &DVK IORZ IURP ILQDQFLQJ DFWLYLWLHV LQ ,Q FDVK IORZ IURP ILQDQFLQJ DFWLYLWLHV WRWDOHG %W PLOOLRQ FRYHULQJ WKH QHW LQFUHDVH LQ GHEHQWXUHV E\ %W PLOOLRQ QHW ORDQ LQFUHDVH E\ %W PLOOLRQ 7KH QHW YDOXH RI % (V DQG 3 1V GURSSHG E\ %W PLOOLRQ DQG %W PLOOLRQ FDSLWDO LQFUHDVH DQG FDVK SD\PHQW IRU WKH H[HUFLVH RI ZDUUDQWV ZURWK %W PLOOLRQ DQG GLYLGHQG SD\PHQW WRWDOLQJ %W PLOOLRQ In 2013, the cash flow from financing activities worth Bt2,412.23 million, the activities involved the net increase in ERUURZLQJ E\ %W PLOOLRQ WKH QHW LQFUHDVH LQ GHEHQWXUHV ZRUWK %W PLOOLRQ 7KH QHW YDOXH RI SURPLVVRU\ QRWHV GURSSHG E\ %W PLOOLRQ ZKLOH ZDUUDQWV ZHUH H[HUFLVHG IRU %W PLOOLRQ DQG GLYLGHQG SD\PHQW ZDV YDOXHG DW %W PLOOLRQ

,Q WKH FDVK IORZ IURP ILQDQFLQJ DFWLYLWLHV ZRUWK %W PLOOLRQ WKH DFWLYLWLHV FRYHUHG WKH QHW LQFUHDVH LQ GHEHQWXUHV E\ %W PLOOLRQ WKH QHW GHFUHDVH LQ ORQJ WHUP ORDQV E\ %W PLOOLRQ DQG WKH QHW LQFUHDVHV LQ SURPLVVRU\ QRWHV DQG ELOO RI H[FKDQJH ZRUWK %W PLOOLRQ DQG %W PLOOLRQ UHVSHFWLYHO\

203

ANNUAL REPORT 2014

Factors of incidents which may pose significant impacts on financial status or operations The economic volatility driven by global economic conditions as well as political instability at home are main factors which can significantly affect the operations and financial status. The two factors influence consumer confidence and KRPHEX\HUVt GHFLVLRQ PDNLQJ SURFHVV +RZHYHU LI WKH JOREDO HFRQRP\ VKRZV D PRUH VROLG VLJQ RI UHFRYHU\ WKLV VKRXOG buoy the domestic economy. Meanwhile, if the political turbulence eases, consumer confidence should be restored. 2Q GHPDQG QHZ WUDQVSRUW LQYHVWPHQW SURMHFWV FRYHULQJ PDVV WUDQVLW URXWHV URDGV H[SUHVVZD\V DQG ULYHU FURVVLQJ EULGJHV DV ZHOO DV SUHSDUDWLRQ IRU WKH $VHDQ (FRQRPLF &RPPXQLW\ VKRXOG KHOS ERRVW SURSHUW\ GHPDQG LQ QHDUE\ EXVLQHVV and residential areas. The transport linkage with neighboring countries will also give a boost to provincial demand. On supply, the downward interest trend should benefit customers waiting for financial institutionsâ&#x20AC;&#x2122; approval on mortgage applications as well as property developers who will enjoy a lower cost of fund. However, commercial banks have tightened WKH OHQGLQJ FULWHULD LQ OLJKW RI KLJK KRXVHKROG GHEW WR NHHS D OLG RQ QRQ SHUIRUPLQJ ORDQV IURP SURSHUW\ UHODWHG ORDQV )DFWRUV ZKLFK FRXOG LQIOXHQFH KRXVLQJ SULFHV UDQJH IURP WKH VSHHG\ ULVH LQ ODQG SULFHV FRQVWUXFWLRQ PDWHULDOV DQG minimum wage as well as labor shortage. In the short term, these may delay the construction works and delivery, which would hurt property developers. Meanwhile, these may encourage buyers to wait and hurt the affordability of a certain group of buyers. This will also slow down new project launches and reduce competition in the industry, which will in turn encourage VRPH EX\HUV x FRQYLQFHG RI IXUWKHU KLNHV LQ SULFHV WR DFW The company has consistently researched and analyzed the condition of factors which could affect the operations and financial status. The company is also prepared to thoroughly and appropriately cope with the challenges related to consumer demand and purchasing power, as well as competition in the industry. The operating process has been improved, to achieve KLJKHU HIILFLHQF\ DQG UHGXFH ULVNV LQ YDULRXV DUHDV )RU H[DPSOH WKHUH LV D V\VWHP WR PRQLWRU VDOH DFWLYLWLHV DQG FRQVWUXFWLRQ ZRUNV WR PDLQWDLQ WKH YROXPH RI FRPSOHWHO\ EXLOW XQLWV RU LQYHQWRU\ DW WKH OHYHO WKDW ZLOO FRPIRUWDEO\ IDFLOLWDWH WKH PDUNHWLQJ strategies. Regarding the production cost, under consistent improvement the company has increased the volume of precast construction works and managed the supply chain to reduce the construction period. Main construction materials like steel and cement are supplied directly by manufacturers, which helps reduce price volatility.

204

INDEPENDENT AUDITOR’S REPORT To the Shareholders of Property Perfect Public Company Limited I have audited the accompanying consolidated financial statements of Property Perfect Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2014, and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Property Perfect Public Company Limited for the same period. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Property Perfect Public Company Limited and its subsidiaries and of Property Perfect Public Company Limited as at 31 December 2014, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.

Supachai Phanyawattano Certified Public Accountant (Thailand) No.3930 EY Office Limited Bangkok: 26 February 2015

205

STATEMENT OF FINANCIAL POSITION Property Perfect Public Company Limited and its subsidiaries As at 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements Note 2014 2013 2014 2013

Assets Current assets Cash and cash equivalents Trade and other receivables Notes receivable - land Inventories Project development costs Advances to contractor - related party Advances to contractors Other current assets Total current assets Non-current assets Restricted deposits Loans to related parties Retention per agreement Investments in subsidiaries Investment in associate Other long-term investments Land held for development Advances for purchases of land Investment properties Property, plant and equipment Leasehold rights Deferred tax assets Other non-current assets Total non-current assets Total assets

7 8 9 10 11

2,490,533,916 1,235,219,985 2,078,520,940 801,773,577 191,431,070 199,083,480 146,490,646 99,941,730 955,740,220 200,664,000 955,740,220 27,550,000 35,079,151 34,316,076 17,524,605,564 16,926,782,478 10,806,817,419 9,015,072,707

14,397,249 14,464,179 14,389,949 14,459,179 336,545,595 302,899,961 298,739,541 143,673,371 102,650,547 93,669,983 30,234,128 22,725,252 21,650,983,312 19,007,100,142 14,330,932,843 10,125,195,816

6 12 13 14 15 16 17 18 19 32

288,247,275 100,000,000 106,496,676 4,453,051,267 444,637,314 1,540,394,214 963,199,365 1,313,107,573 299,881,272 145,125,902 9,654,140,858 31,305,124,170

311,251,845 100,000,000 582,717,823 110,921,940 6,062,239,040 660,127,348 967,144,633 1,048,494,432 1,289,401,269 332,132,912 196,570,784 11,661,002,026 30,668,102,168

The accompanying notes are an integral part of the financial statements.

206

250,696,630 3,895,248,025 100,000,000 4,224,045,726 106,496,676 3,444,793,098 370,057,389 195,800,087 36,817,582 180,412,792 54,989,162 12,859,357,167 27,190,290,010

25,486,760 3,456,304,620 100,000,000 4,204,045,726 359,999,240 110,921,940 5,058,189,792 486,916,375 221,924,422 40,028,676 196,370,828 110,779,469 14,370,967,848 24,496,163,664

STATEMENT OF FINANCIAL POSITION (CONTINUED) Property Perfect Public Company Limited and its subsidiaries As at 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements Note 2014 2013 2014 2013

Liabilities and shareholdersâ&#x20AC;&#x2122; equity Current liabilities Trade and other payables Current portion of notes payable leasehold rights Notes payable Bills of exchange payable Short-term loans from related parties Current portion of debentures Current portion of long-term loans Deposits and cash received in advance Income tax payable Short-term provisions Other current liabilities Total current liabilities Non-current liabilities Notes payable - leasehold rights, net of current portion Debentures, net of current portion Long-term loans, net of current portion Provision for long-term employee benefits Long-term provision Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities

2,411,469,089 2,664,597,383 1,253,177,716 1,136,815,745

21 22 23 6 24 25

10,000,000 265,368,000 724,401,242 512,490,000 380,547,608 187,800,000 636,237,037 - 636,237,037 - 175,000,000 75,000,000 8,978,715,230 4,299,226,296 8,978,715,230 4,299,226,296 747,144,814 747,169,126 381,763,635 331,229,073 217,013,978 340,958,913 152,514,825 85,568,239 55,096,234 11,819,643 30,722,232 21,109,521 18,457,232 21,109,521 18,457,232 140,023,764 152,459,037 75,473,999 32,532,065 13,941,210,909 9,012,545,630 12,085,261,803 6,166,628,650

21 24 25 26 27 32

10,000,000 4,600,000,000 3,546,469,166 121,443,067 18,354,384 17,470,077 39,848,075 8,353,584,769 22,294,795,678

20,000,000 6,948,846,146 5,864,709,746 93,677,838 23,708,647 58,229,039 13,009,171,416 22,021,717,046

4,600,000,000 2,151,494,094 89,456,239 18,354,384 39,724,812 6,899,029,529 18,984,291,332

6,948,846,146 3,411,254,733 60,512,643 23,708,647 42,733,460 10,487,055,629 16,653,684,279

The accompanying notes are an integral part of the financial statements.

207

STATEMENT OF FINANCIAL POSITION (CONTINUED) Property Perfect Public Company Limited and its subsidiaries As at 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements Note 2014 2013 2014 2013

Shareholdersâ&#x20AC;&#x2122; equity Share capital 28 Registered 10,737,610,610 ordinary shares of Baht 1 each (2013: 5,961,161,256 ordinary shares of Baht 1 each) Issued and fully paid 5,782,951,655 ordinary shares of Baht 1 each (2013: 5,782,930,655 ordinary shares of Baht 1 each) Share discount Retained earnings Appropriated - statutory reserve 30 Unappropriated Other components of shareholders' equity Equity attributable to owners of the Company Non-controlling interests of the subsidiaries Total shareholders' equity Total liabilities and shareholders' equity

10,737,610,610 5,961,161,256 10,737,610,610 5,961,161,256

5,782,951,655 5,782,930,655 5,782,951,655 5,782,930,655 (73,524,495) (73,524,495) (73,524,495) (73,524,495) 260,600,000 241,600,000 260,600,000 241,600,000 3,101,543,321 2,721,746,279 2,241,929,809 1,893,969,209 (119,177,152) (43,656,136) (5,958,291) (2,495,984) 8,952,393,329 8,629,096,303 8,205,998,678 7,842,479,385 57,935,163 17,288,819 9,010,328,492 8,646,385,122 8,205,998,678 7,842,479,385 31,305,124,170 30,668,102,168 27,190,290,010 24,496,163,664

The accompanying notes are an integral part of the financial statements.

208

STATEMENT OF COMPREHENSIVE INCOME Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements Note 2014 2013 2014 2013

Revenues Revenues from sales of land and houses Revenues from sales of residential condominium units Revenues from sales of land Revenues from hotel operations Other income Interest income Revenues from forfeiture of down payments Gain on sales of investment in associate 13 Others Total revenues Expenses Cost of sales of land and houses Cost of sales of residential condominium units Cost of sale of land Cost of hotel operations Selling expenses Administrative expenses Loss arising from rental guarantee 27 Total expenses Profit before share of income from investment in associate, finance cost and income tax Share of income from investment in associate 13 Profit before finance cost and income tax Finance cost

6,275,563,226 6,836,468,926 4,167,770,745 4,407,380,650 3,667,121,096 2,626,443,167 369,413,331 1,628,706,329 529,504,438 1,628,206,329 844,709,904 1,018,433,241 26,735,156

19,162,542

196,787,513

334,661,989 324,867,671 183,945,031

13,450,779 7,058,193 3,221,600 3,372,007 77,303,334 - 360,000,040 251,761,669 191,702,755 134,061,789 112,259,923 12,785,351,493 11,228,773,262 6,859,461,347 5,366,487,271 4,085,591,485 4,575,293,544 2,710,763,068 2,914,854,790 2,659,897,379 1,088,280,532 650,593,209 1,216,588,170 1,852,635,009 24,031,269 11,577,617,053

1,915,269,133 259,025,168 212,986,471 256,568,115 1,088,280,532 142,064,886 636,213,112 1,183,593,853 658,353,767 630,001,007 1,870,973,675 1,010,472,579 960,721,685 45,305,879 24,031,269 45,305,879 10,483,217,311 5,750,926,383 4,905,934,718

1,207,734,440

745,555,951 1,108,534,964

460,552,553

59,978,121 1,267,712,561 (611,251,240)

59,785,935 805,341,886 1,108,534,964 (706,363,234) (629,420,641)

460,552,553 (645,888,290)

The accompanying notes are an integral part of the financial statements.

209

STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements Note 2014 2013 2014 2013

Profit (loss) before income tax Income tax 32 Profit (loss) for the year Other comprehensive income: Exchange differences on translation of financial statements in foreign currency Loss on changes in value of available-forsale investments - net of income tax expenses Other comprehensive income for the year Total comprehensive income for the year Profit (loss) attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries

Earnings per share 33 Basic earnings per share Profit (loss) attributable to equity holders of the Company Diluted earnings per share Profit attributable to equity holders of the Company

656,461,321 (254,200,442) 402,260,879

98,978,652 (57,557,972) 41,420,680

479,114,323 (112,153,723) 366,960,600

(185,335,737) 31,991,998 (153,343,739)

(34,876,202)

5,594,001

(3,462,307) (38,338,509) 363,922,370

(277,592) 5,316,409 46,737,089

(3,462,307) (3,462,307) 363,498,293

(277,592) (277,592) (153,621,331)

398,797,042 3,463,837 402,260,879

82,929,049 (41,508,369) 41,420,680

366,960,600

(153,343,739)

362,158,255 1,764,115 363,922,370

81,147,996 (34,410,907) 46,737,089

363,498,293

(153,621,331)

0.06896

0.01449

0.06346

(0.02679)

0.06849

0.01427

0.06303

The accompanying notes are an integral part of the financial statements.

210

CASH FLOW STATEMENT Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements

Cash flows from operating activities Profit (loss) before tax Adjustments to reconcile profit (loss) before tax to net cash provided by (paid from) operating activities: Share of income from investment in associate Depreciation and amortisation Allowance for doubtful accounts Amortisation of prepaid expenses Amortisation of deferred debenture issuing costs Unrealised loss on exchange Rental received in advance recognition Allowance for impairment loss on investment (reversal) Reduce cost to net realisable value (reversal) Reversal of allowance for impairment of land held for development Provision for loss arising from rental guarantee Gain on sales of investment in associate Loss (gain) on sales of property, plant and equipment Dividend income Provision for long-term employee benefits Change in fair value of forward exchange contracts Interest income Interest expenses Profit from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Trade and other receivables Notes receivable - land Inventories Project development costs Advances to contractors Other current assets Other non-current assets

2014

2013

2014

2013

656,461,321

98,978,652

479,114,323 (185,335,737)

(59,978,122) 143,626,809 1,952,600 45,290,061 30,642,787 39,148,520 (4,194,963) (95,688) (4,843,403) (21,551,132) 24,031,269 (77,303,335) 1,486,714 (6,599,618) 32,216,372 (30,160,058) (26,735,156) 545,968,296

(59,785,935) 151,313,954 51,902,440 47,217,111 79,602,112 (4,202,331) 107,604 18,144,265 45,305,879 (1,143,352) (843,730) 30,726,922 (10,718,235) (19,162,542) 637,600,226

39,747,446 49,015,063 1,952,600 26,290,070 28,763,826 30,642,787 47,217,111 (4,194,963) (4,202,331) (95,688) 107,604 (4,843,403) 18,144,265 (21,551,132) 24,031,269 45,305,879 (360,000,040) (739,036) (1,146,504) (6,599,618) (843,730) 28,943,596 22,805,639 (196,787,513) (183,945,031) 564,137,697 578,672,092

1,289,363,274 1,065,043,040

600,048,395

414,558,146

58,505,244 (39,754,055) (755,076,220) (185,185,062) (763,075) (2,734,328) 745,374,854 (1,541,140,201) (33,578,704) (243,822,752) (54,174,936) (18,021,224) 719,960 12,310,192

38,848,641 (928,190,220) (733,284,187) (154,996,940) (33,703,258) 1,191,771

(42,574,997) (12,071,062) (569,185,488) (99,031,127) (7,969,390) (14,652,085)

The accompanying notes are an integral part of the financial statements.

211

CASH FLOW STATEMENT (CONTINUED) Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements

2014 Increase (decrease) in operating liabilities Trade and other payables Deposits and cash received in advance Other current liabilities Other non-current liabilities Net cash from (used in) operating activities Cash paid for interest expenses Cash paid for corporate income tax Cash received from interest income Cash received from return of withholding tax Net cash used in operating activities Cash flows from investing activities Decrease (increase) in restricted deposits Increase in loans to related companies Decrease in loans to related companies Cash received from interest income Cash received from dividend income Net cash paid for purchases of investments in subsidiaries Cash received from sale of investment in associate Increase in other long-term investments Cash received from sales of other long-term investments Decrease (increase) in land held for development Increase in investment properties Increase in advances for purchases of land Increase in leasehold rights Increase in property, plant and equipment Cash received from sales of property, plant and equipment Net cash from (used in) investing activities Cash flows from financing activities Cash paid for notes payble - leasehold rights Cash received from notes payable Cash paid for notes payable Cash received from bills of exchange payable Cash paid for bills of exchange payable

2014

2013

(278,669,922) 1,070,221,439 148,629,166 333,836,764 (123,944,935) 35,841,813 66,946,586 36,648,161 (12,435,387) (27,298,205) 42,941,935 (7,626,558) (20,737,298) (5,210,053) 1,283,694 1,326,322 814,582,855 120,250,604 (950,284,417) 33,258,686 (1,150,146,612) (1,021,882,124) (958,427,612) (777,779,584) (161,697,050) (173,194,134) (64,292,287) (79,316,352) 15,814,706 15,757,681 7,494,298 13,221,157 54,282,946 26,914,531 54,282,946 (427,163,155) (1,032,153,442) (1,911,227,072) (810,616,093) 23,004,570 (244,856,188) (225,209,870) 500,809 - (1,236,738,465) (2,049,601,500) - 808,085,933 1,870,668,658 - 101,943,058 187,944,516 6,599,618 843,730 6,599,618 843,730 - (349,726,302) (20,000,000) (1,051,603,533) 719,999,280 - 719,999,280 - (100,515,821) - (100,515,821) 44,804,369 - 44,804,369 1,035,355,977 (161,581,634) 1,055,202,158 37,199,890 (407,256,676) (134,688,226) (299,260,143) (107,013,864) (269,539,475) (6,194,128) (339,267,486) (122,360,701) (131,027,260) (10,437,329) (20,159,846) 2,656,127 2,008,301 764,348 1,973,738 1,117,115,841 (1,578,578,434) 1,093,194,867 (1,347,484,465) (265,368,000) (10,000,000) 2,634,218,262 1,447,456,000 1,186,150,000 921,716,000 (2,422,307,020) (1,484,026,000) (993,402,392) (1,067,336,000) 1,166,237,037 - 1,166,237,037 (530,000,000) - (530,000,000) -

The accompanying notes are an integral part of the financial statements.

212

2013

CASH FLOW STATEMENT (CONTINUED) Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

(Unit: Baht)

Consolidated financial statements Separate financial statements

Cash received from long-term loans Cash paid for long-term loans Cash received from debentures Cash paid for debentures Cash received from short-term loans from related parties Cash received from non-controlling interests for issuance of ordinary shares of subsidiary Cash received from exercised warrants Dividend paid Net cash from financing activities Increase in translation adjustment Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental cash flow information Non-cash transactions Transfer advances for purchases of land to project development costs, land held for development and leashold rights Transfer land held for development to project development costs Transfer property, plant and equipment to project development costs Amortise leasehold rights as cost of investment properties Increase in investment properties as a result of accrued land rental expenses Increase in notes payable - leasehold rights Settle advances for purchases of land against loan from related company and interest payable Transfer advances for purchases of land to other receivable Transfer project development costs and land held for development to investment properties

2014

2013

2,258,347,307 (4,576,612,199) 8,518,500,000 (6,218,500,000) -

5,939,992,164 (4,485,141,245) 7,000,000,000 (5,500,000,000) -

2014

2013

1,240,490,423 2,917,396,940 (2,449,716,500) (1,888,906,438) 8,518,500,000 7,000,000,000 (6,218,500,000) (5,500,000,000) 175,000,000 75,000,000

14,652,121 21,000 141,882,692 21,000 141,882,692 - (187,522,527) - (187,522,527) 564,536,387 2,877,293,205 2,094,779,568 2,412,230,667 824,858 8,396,613 1,255,313,931 274,957,942 1,276,747,363 254,130,109 1,235,219,985 960,262,043 801,773,577 547,643,468 2,490,533,916 1,235,219,985 2,078,520,940 801,773,577 -

338,453,334 93,202,116 698,277,554 2,149,660,318 2,893,805 1,466,456 27,609,011 19,429,756 61,488,336 29,523,284 - 255,368,000

134,611,600 26,132,116 593,379,044 1,359,215,503 -

11,724,926

89,261,250 -

17,000,000 -

967,144,633

The accompanying notes are an integral part of the financial statements.

213

214 Unappropriated

19,000,000 (19,000,000)

(73,524,495) 260,600,000 3,101,543,321

- (187,522,527) (73,524,495) 241,600,000 2,721,746,279 (73,524,495) 241,600,000 2,721,746,279 - 398,797,042 - 398,797,042

(73,524,495) 241,600,000 2,826,339,757 - 82,929,049 - 82,929,049

Share discount Statutory reserve

The accompanying notes are an integral part of the financial statements.

Balance as at 1 January 2013 5,641,047,963 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Increase in ordinary shares as a result of warrant exercised 141,882,692 Effect of change in ownership interests in subsidiary (Note 12) Dividend paid (Note 36) Balance as at 31 December 2013 5,782,930,655 Balance as at 1 January 2014 5,782,930,655 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve Increase in ordinary shares as a result of warrant exercised (Note 28) 21,000 Effect of change in ownership interests in subsidiary (Note 12) Balance as at 31 December 2014 5,782,951,655

Issued and fully paid share capital

Retained earnings

Other components of equity

17,308,425 (46,091,945) (1,503,461) (1,503,461) -

Total equity attributable to owners of the Company

- 141,882,692

21,000

- (38,882,229) (38,882,229) (38,882,229) (5,958,291) (17,371,516) (46,091,945) (49,755,400) (119,177,152) 8,952,393,329

Equity attributable to noncontrolling interests of the subsidiaries

Total shareholders’ equity

(Unit: Baht)

21,000

38,882,229 57,935,163 9,010,328,492

16,748,210 14,652,121 - (187,522,527) 17,288,819 8,646,385,122 17,288,819 8,646,385,122 3,463,837 402,260,879 (1,699,722) (38,338,509) 1,764,115 363,922,370

- 141,882,692

(8,777,082) (39,778,994) 8,595,684,231 34,951,516 8,630,635,747 - 82,929,049 (41,508,369) 41,420,680 - (1,781,053) (1,781,053) 7,097,462 5,316,409 - (1,781,053) 81,147,996 (34,410,907) 46,737,089

Total other components of shareholders’ equity

- (2,096,089) (2,096,089) (2,096,089) - (187,522,527) (2,495,984) 15,804,964 (46,091,945) (10,873,171) (43,656,136) 8,629,096,303 (2,495,984) 15,804,964 (46,091,945) (10,873,171) (43,656,136) 8,629,096,303 - 398,797,042 (3,462,307) (33,176,480) - (36,638,787) (36,638,787) (3,462,307) (33,176,480) - (36,638,787) 362,158,255

(2,218,392) (277,592) (277,592)

Deficit on Exchange Difference changes differences on resulting in value of translation of from share swap available-for sale financial statements between the investments in foreign currency subsidiaries

Other comprehensive income Deficit from the changes in the ownership interests in subsidiaries

Consolidated financial statements Equity attributable to owners of the Company

Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

215

The accompanying notes are an integral part of the financial statements.

Balance as at 1 January 2013 5,641,047,963 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Increase in ordinary shares as a result of warrant exercised 141,882,692 Dividend paid (Note 36) Balance as at 31 December 2013 5,782,930,655 Balance as at 1 January 2014 5,782,930,655 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve Increase in ordinary shares as a result of warrant exercised (Note 28) 21,000 Balance as at 31 December 2014 5,782,951,655

Issued and fully paid share capital

Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

(73,524,495) (73,524,495) (73,524,495) (73,524,495)

241,600,000 241,600,000 241,600,000 19,000,000 260,600,000

Share discount Statutory reserve

2,234,835,475 (153,343,739) (153,343,739) (187,522,527) 1,893,969,209 1,893,969,209 366,960,600 366,960,600 (19,000,000) 2,241,929,809

(2,218,392) (277,592) (277,592) (2,495,984) (2,495,984) (3,462,307) (3,462,307) (5,958,291)

Deficit on changes in value of available-for-sale Unappropriated investments

Retained earnings

(2,218,392) (277,592) (277,592) (2,495,984) (2,495,984) (3,462,307) (3,462,307) (5,958,291)

Total other components of shareholders’ equity

Other components of equity Other comprehensive income

Separate financial statements

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED)

8,041,740,551 (153,343,739) (277,592) (153,621,331) 141,882,692 (187,522,527) 7,842,479,385 7,842,479,385 366,960,600 (3,462,307) 363,498,293 21,000 8,205,998,678

Total shareholders’ equity

(Unit: Baht)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2014

1. General information

Property Perfect Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the property development. The registered office of the Company is at 100/1 Vorasombat Building, 17th Floor, Rama 9 Road, Huaykwang, Bangkok.

2. Basis of preparation 2.1 The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of the Company (“the Company”) and the following subsidiary companies (“the subsidiaries”): Company’s name

Nature of business

Country of incorporation

Subsidiaries directly owned by the Company Estate Perfect Company Limited Property development Thailand Perfect Sport Club Company Limited Clubhouse management Thailand Bright Development Bangkok Company Limited Property development Thailand Residence Number Nine Limited Property development Thailand U&I Construction Bangkok Company Limited Construction service Thailand Perfect Prefab Company Limited Producing and assembling Thailand prefabricated building system Uniloft Service (Thailand) Company Limited Apartment service Thailand We Retail Public Company Limited Property development, shopping Thailand mall and commercial areas Property Perfect International Pte. Ltd. Investment in overseas projects Singapore

216

Percentage of shareholding

2014

2013

100.00 100.00 100.00 100.00 100.00 51.00

100.00 100.00 93.31 93.31 100.00 100.00

Company’s name

Nature of business

Country of incorporation

Percentage of shareholding

2014

Subsidiaries directly owned by the Company (continued) Chiangmai Development Company Limited Property development Ramintra Mall Company Limited (Formerly Property development known as “Mariya Stuff Company Limited”) Subsidiary which the Company owns through We Retail Public Company Limited Centrepoint Shopping Mall Company Limited Property development, shopping mall and commercial areas Subsidiaries which the Company owns through Property Perfect International Pte. Ltd. Kiroro Resort Holdings Company Limited Hotel operations (Formerly known as “Share Group Company Limited”) Kabushiki Kaisha Kiroro Associates Co., Ltd. Hotel management

2013

Thailand 100.00 100.00 Thailand 100.00 100.00

Thailand

93.31

Japan

95.61

69.01

Japan

95.61

69.01

b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company. d) The assets and liabilities in the financial statements of overseas subsidiary companies are translated to Baht using the exchange rate prevailing on the end of reporting period, and revenues and expenses translated using monthly average exchange rates. The resulting differences are shown under the caption of “Exchange differences on translation of financial statements in foreign currency” in the statements of changes in shareholders’ equity. e) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements. f) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. 2.3 The separate financial statements, which present investments in subsidiaries and associate under the cost method, have been prepared solely for the benefit of the public.

3. New financial reporting standards

Below is a summary of financial reporting standards that became effective in the current accounting year and those that will become effective in the future.

217

(a) Financial reporting standards that became effective in the current accounting year Conceptual Framework for Financial Reporting (revised 2014) Accounting Standards: TAS 1 (revised 2012) Presentation of Financial Statements TAS 7 (revised 2012) Statement of Cash Flows TAS 12 (revised 2012) Income Taxes TAS 17 (revised 2012) Leases TAS 18 (revised 2012) Revenue TAS 19 (revised 2012) Employee Benefits TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rates TAS 24 (revised 2012) Related Party Disclosures TAS 28 (revised 2012) Investments in Associates TAS 31 (revised 2012) Interests in Joint Ventures TAS 34 (revised 2012) Interim Financial Reporting TAS 36 (revised 2012) Impairment of Assets TAS 38 (revised 2012) Intangible Assets Financial Reporting Standards: TFRS 2 (revised 2012) Share-based Payment TFRS 3 (revised 2012) Business Combinations TFRS 5 (revised 2012) Non-current Assets Held for Sale and Discontinued Operations TFRS 8 (revised 2012) Operating Segments Accounting Standard Interpretations : TSIC 15 Operating Leases - Incentives TSIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease TSIC 29 Service Concession Arrangements: Disclosures TSIC 32 Intangible Assets - Web Site Costs Financial Reporting Standard Interpretations: TFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRIC 4 Determining whether an Arrangement contains a Lease TFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds TFRIC 7 Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies TFRIC 10 Interim Financial Reporting and Impairment TFRIC 12 Service Concession Arrangements

218

TFRIC 13 Customer Loyalty Programmes TFRIC 17 Distributions of Non-cash Assets to Owners TFRIC 18 Transfers of Assets from Customers Accounting Treatment Guidance for Stock Dividend These financial reporting standards were amended primarily to align their content with the corresponding International Financial Reporting Standards. Most of the changes were directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of the accounting standards. These financial reporting standards do not have any significant impact on the financial statements. (b) Financial reporting standards that will become effective in the future The Federation of Accounting Professions has issued a number of revised and new financial reporting standards that become effective for fiscal years beginning on or after 1 January 2015. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of accounting standards. The management of the Company and its subsidiaries believes they will not have any significant impact on the financial statements in the year in which they are adopted. However, some of these financial reporting standards involve changes to key principles, as discussed below: Accounting Standards: TAS 19 (revised 2014) Financial Reporting Standards: TFRS 10 TFRS 11 TFRS 12 TFRS 13

Employee Benefits Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement

Based on the preliminary analysis performed, the management of the Company and its subsidiaries believes that these financial reporting standards will not have any significant impact on the financial statements of the Company and its subsidiaries, except as follows: TAS 19 (revised 2014) Employee Benefits This revised standard requires that the entity recognise actuarial gains and losses immediately in other comprehensive income while the existing standard allows the entity to recognise such gains and losses immediately in profit or loss, or in other comprehensive income, or to recognise them gradually in profit or loss. At present, the Company and its subsidiaries gradually recognise actuarial gains and losses in profit or loss. The assessment of the management of the Company and its subsidiaries is that when the revised standard is applied in 2015 and there is a change to immediately recognise those gains and losses in other comprehensive income, the Company and its subsidiaries will have to increase provision for long-term employee benefit liabilities of Baht 38.7 million (Separate financial statements: Baht 36.1 million) (net of related tax of Baht 9.7 million (Separate financial statements: Baht 9.0 million)) and decrease retained earnings of Baht 38.7 million (Separate financial statements: Baht 36.1 million).

219

4. Significant accounting policies 4.1 Revenue recognition Revenues from sales of land and houses/residential condominium units/land Revenues from sales of land and houses/residential condominium units/land are recognised as revenues when significant risks and rewards are transferred to the buyer. Revenue from hotel operations Revenue from hotel operations mainly comprises room sales, food and beverage sales and revenue from auxiliary activities. Sales are the invoiced value, excluding value added tax, of goods supplied and services rendered after deducting discounts. Interest income Interest income is recognised on an accrual basis based on the effective interest rate. Dividends Dividends are recognised when the right to receive the dividends is established. 4.2 Cost of sales of land and houses/residential condominium units In determining the cost of sales of land and houses/residential condominium units, the anticipated total development costs (after recognising the costs incurred to date) are attributed to units already sold on the basis of the salable area and then recognised as costs in profit or loss. 4.3 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 4.4 Accounts receivable Accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging. 4.5 Inventories Inventories are valued at the lower of cost (first-in, first-out method) and net realisable value. 4.6 Project development costs Project development costs are valued at the lower of cost and net realisable value. Project development costs consist of the costs of land, land development, construction, land lease and related interest. 4.7 Borrowing costs Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

220

4.8 Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). No depreciation is provided on investment properties in progress. 4.9 Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the estimated useful lives: Office buildings and clubhouses 5 to 20 years Hotel buildings 5 to 41 years Hotel building improvements 2 to 30 years Office and hotel furniture and fixtures 2 to 18 years Tools and equipment 2 and 5 years Motor vehicles 2 to 17 years Others 2 to 18 years Depreciation is included in profit or loss. No depreciation has been provided on land and construction in progress. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 4.10 Leasehold rights and amortisation Leasehold right is stated at cost less accumulated amortization and allowance for loss on impairment of assets (if any). Amortisation of leasehold right is calculated by reference to its cost on a straight-line basis over the leasehold period. Amortisation is included in profit or loss and is capitalised as part of project costs for projects under development. 4.11 Investments a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss. b) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in comprehensive income, and will be recorded in profit or loss when the securities are sold. c)

Investments in non-marketable equity securities, which the Company classified as other investments, are stated at cost net of allowance for loss on impairment (if any).

d) Investment in associate is accounted for in the consolidated financial statements using the equity method.

221

e) Investments in subsidiaries and associate are accounted for in the separate financial statements using the cost method net of allowance for loss on impairment (if any). The fair value of marketable securities (investments in securities held for trading and available-for-sale securities) is based on the latest bid price of the last working day of the year. The fair value of unit trusts is determined from their net asset value. The weighted average method is used for computation of the cost of investments. In the event the Company and its subsidiaries reclassified investments from one type to another, such investments will be readjusted to their fair value as at the reclassification date. The difference between the carrying amount of the investments and the fair value on the date of reclassification is recorded in profit or loss or recorded as other components of shareholdersâ&#x20AC;&#x2122; equity, depending on the type of investment that is reclassified. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss. 4.12 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company and its subsidiaries, whether directly or indirectly, or which are under common control with the Company and its subsidiaries. They also include associate and individuals which directly or indirectly own a voting interest in the Company and its subsidiaries that gives them significant influence over the Company and its subsidiaries, key management personnel, directors and officers with authority in the planning and direction of the operations of Company and its subsidiaries. 4.13 Long-term leases Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The assets acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease period. Leases of property, plant or equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 4.14 Foreign currencies The consolidated and separate financial statements are presented in Baht, which is also the Companyâ&#x20AC;&#x2122;s functional currency. Items of each entity included in the consolidated financial statements are measured using the functional currency of that entity. Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in profit or loss.

222

Exchange differences arising on a monetary item that forms part of the Companyâ&#x20AC;&#x2122;s net investment in a foreign operation will be recognised initially in other comprehensive income in the consolidated financial statements and reclassified from equity to profit or loss on disposal of the net investment.

4.15 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assetâ&#x20AC;&#x2122;s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, such reversal is recognised in profit or loss. 4.16 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The fundâ&#x20AC;&#x2122;s assets are held in a separate trust fund and the contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiaries have obligations in respect of the severance payments they must make to employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary and an overseas subsidiaryâ&#x20AC;&#x2122;s management based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised as income or expenses when the net cumulative unrecognised actuarial gains and losses at the end of the previous reporting period exceed 10% of the defined benefit obligation at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plan. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company and its subsidiaries elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy as an expense on a straight-line basis over up to five years from the date of adoption. 4.17 Provisions Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, they are probable that outflow of resources embodying economic benefits will be required to settle the obligation, and reliable estimate can be made of the amount of the obligation. 4.18 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation.

223

Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Company and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised. At each reporting date, the Company and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. The Company and its subsidiaries record deferred tax directly to shareholdersâ&#x20AC;&#x2122; equity if the tax relates to items that are recorded directly to shareholdersâ&#x20AC;&#x2122; equity. 4.19 Derivatives Forward exchange contracts Forward exchange contracts are presented in the financial statements at fair value. Unrealised gain or loss from the forward contracts is recorded in profit or loss.

5. Significant accounting judgments and estimates

The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longerterm volatility of financial instruments.

224

Impairment of investments The Company and its subsidiaries treat available-for-sale investments and other investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgement of the management. Property plant and equipment/Investment properties/Depreciation In determining depreciation of plant and equipment and investment properties, the management is required to make estimates of the useful lives and residual values of the plant and equipment and investment properties and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment and investment properties for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Project development costs estimation In recognising revenue from real estate sales, the Company and its subsidiaries need to estimate all project development costs, including land costs, land improvement costs, design costs, construction costs, and borrowing costs for construction. The management estimates these costs based on their business experience and revisit the estimation on a periodical basis or when the actual costs incurred significantly vary from the estimation. Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the temporary differences and losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimate future taxable profits. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Provision for loss arising from rental guarantee In recording provision for loss arising from rental guarantee, the management estimates the cost of the expenses expected to be incurred as a result of providing rental guarantee based on the present value of the difference between the projected dormitory rental income from individuals and rental expense the Company has contracted to pay to the Fund, based on various assumptions, including rental rate, occupancy rate and discount rate. The estimate is reviewed whenever circumstances change. Litigations The Company and its subsidiaries have contingent liabilities as a result of litigations. The management has used judgement to assess the results of the litigations and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period.

225

6. Related party transactions

During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company, its subsidiaries and those related parties. (Unit: Million Baht) Consolidated Separate financial statements financial statements 2014 2013 2014 2013 Transfer Pricing policy

Transactions with subsidiaries (Eliminated from the consolidated financial statements)

Sales of land 71 By agreement Interest income 175 171 5.02% - 7.38% per annum Interest expenses 9 - 7.38% per annum Clubhouse management expenses 4 16 By agreement Cost of construction of houses 21 67 By agreement Transactions with related individual and companies Cost of construction of houses 6 2 1 By agreement Consultation fee 4 3 2 2 By agreement As at 31 December 2014 and 2013, the balances of the accounts between the Company, its subsidiaries and those related companies were as follows: (Unit: Million Baht) Consolidated financial statements 2014

Other receivables - related parties (Note 8) Subsidiaries Total other receivables - related parties Advances to contractor - related party Related company (a subsidiaryâ&#x20AC;&#x2122;s shareholder) Total advances to contractor - related party Trade and other payables - related parties (Note 20) Subsidiaries Related companies (a subsidiaryâ&#x20AC;&#x2122;s shareholder) Total trade and other payables - related parties

226

Separate financial statements 2013 2014

2013

114,531 114,531

38,096 38,096

14,397 14,397

14,464 14,464

14,390 14,390

14,459 14,459

4,474 4,474

2,879 2,879

5,424 948 6,372

26,338 2,118 28,456

Loans to and loans from related parties As at 31 December 2014 and 2013, the balance of loans between the Company and its subsidiaries and the movements were as follows:

(Unit: Thousand Baht)

Separate financial statements

Long-term loans to subsidiaries

Estate Perfect Co., Ltd. Bright Development Bangkok Co., Ltd. Residence Number Nine Co., Ltd. U&I Construction Bangkok Co., Ltd. Perfect Prefab Co., Ltd. We Retail Plc. Property Perfect International Pte. Ltd. Chiangmai Development Co., Ltd. Total

Increase Decrease Balance as at during during Balance as at 31 December 2013 the year the year 31 December 2014

410,264 155,000 1,712,611 270,000 5,171 - 100,000 60,000 411,094 363,900 857,165 340,799 17,330 3,456,305 1,247,029

(319,065) (299,051) (5,171) (184,799) (808,086)

246,199 1,683,560 100,000 60,000 774,994 1,013,165 17,330 3,895,248 (Unit: Thousand Baht)

Separate financial statements

Short-term loans to subsidiaries

Chiangmai Development Co., Ltd. Residence Number Nine Co., Ltd. Total Directorsâ&#x20AC;&#x2122; and managementâ&#x20AC;&#x2122;s benefits

Balance as at 31 December 2013

75,000 75,000

Increase Decrease during during the year the year

175,000 175,000

Balance as at 31 December 2014

(75,000) (75,000)

175,000 175,000

During the years ended 31 December 2014 and 2013, the Company and its subsidiaries had employee benefit expenses payable to their directors and management as below. (Unit: Million Baht)

Consolidated financial statements 2014 2013

Separate financial statements 2014 2013

Short-term employee benefits 66.5 77.2 44.5 Post-employment benefits 8.8 7.1 6.7 Total 75.3 84.3 51.2 Guarantee obligations with related parties The Company has outstanding guarantee obligations with its subsidiaries, as described in Note 37.4 a) to the financial statements.

57.2 5.0 62.2

227

7. Cash and cash equivalents (Unit: Thousand Baht)

Cash Bank deposits Total

Consolidated financial statements 2014 2013

Separate financial statements 2014 2013

4,737 2,485,797 2,490,534

1,615 2,076,906 2,078,521

5,378 1,229,842 1,235,220

2,195 799,579 801,774

As at 31 December 2014, bank deposits in saving accounts and fixed deposits carried interests between 0.02% and 1.10% per annum (2013: between 0.02% and 1.75% per annum).

8. Trade and other receivables

As at 31 December 2014 and 2013, trade and other receivables were classified by aging as follows.

(Unit: Thousand Baht)

Consolidated financial statements 2014 2013

Trade receivables - real estate business Aged on the basis of due dates Not yet due Past due Up to 3 months 6 - 12 months Over 12 months Total Less: Allowance for doubtful debts Trade receivable - real estate business, net Trade receivables - hotel business Aged on the basis of due dates Past due Up to 3 months 3 - 6 months 6 - 12 months Trade receivable - hotel business Trade receivable, net

228

Separate financial statements 2014 2013

968

1,663 4,142 6,773 (2,183) 4,590

1,960 250 9,836 12,046 (200) 11,846

4,113 4,113 (2,153) 1,960

1,960 250 9,836 12,046 (200) 11,846

119,462 109 519 120,090 124,680

121,831 6 593 122,430 134,276

1,960

11,846

(Unit: Thousand Baht) Consolidated financial statements 2014 2013

Other receivables Advances - related parties Interest receivables - related parties Other receivables - related party Interest receivables Accounts receivable - forward contacts Other receivables Total other receivables Trade and other receivables, net

26,851 39,900 66,751 191,431

3,337 10,632 50,838 64,807 199,083

Separate financial statements 2014 2013

14,829 98,772 930 30,000 144,531 146,491

12,416 25,680 50,000 88,096 99,942

9. Notes receivable - land

As at 31 December 2014, notes receivable - land consisted of the following: The Company a) A note receivable of the Company amounting to Baht 15.0 million (2013: Baht 27.6 million). During the year 2014, the Company received payment of Baht 12.6 million from the debtor and subsequently, in February 2015, the Company received the remaining payment of Baht 15.0 million. b) Notes receivable of the Company totaling Baht 1,000.0 million (2013: Nil), as discussed in Note 15 to the financial statements. The Company recorded the promissory notes by discounting a weighted average cost of fund of the Company and its subsidiaries. The notes receivable are stated at all future receipts, net of deferred interest income. The details are as follows: (Unit: Thousand Baht) Consolidated and separate financial statements 2014 2013

Notes receivable - land Less: Deferred interest income Notes receivable - land, net

1,000,000 (59,260) 940,740

The Company recorded interest income from the above transaction amounting to Baht 14.3 million in the profit or loss for the year 2014. A subsidiary During the year 2014, the subsidiary received all payment of Baht 173.1 million from the debtor.

229

10. Inventories

(Unit: Thousand Baht) Consolidated financial statements Cost 2014

Food and beverage Other goods and supplies Total

50,269 76,252 126,521

2013

70,626 118,918 189,544

Reduce cost to net realisable value 2014 2013

Inventories - net 2014 2013

(42,733) (48,709) (91,442)

7,536 27,543 35,079

(62,472) (92,756) (155,228)

8,154 26,162 34,316

11. Project development costs (Unit: Thousand Baht) Consolidated financial statements 2014 2013

Land and construction developed Land and construction under development Total Less: Reduce cost to net realisable value Net Borrowing costs Interest rate (%) Mortgaged as collateral for credit facilities, guarantees and debentures

4,148,850 13,427,925 17,576,775 (52,169) 17,524,606 464,353 4.70 - 7.38 13,937,281

4,695,946 12,307,225 17,003,171 (76,389) 16,926,782 438,555 6.38 - 7.38 14,061,835

Separate financial statements 2014 2013

1,754,228 9,104,233 10,858,461 (51,644) 10,806,817 339,260 4.70 - 7.38 8,075,306

2,569,743 6,521,140 9,090,883 (75,810) 9,015,073 252,318 6.38 - 7.38 6,894,736

During the year 2014, the Company and its subsidiaries reversed Baht 19.4 million (Separate financial statements: Baht 19.3 million) of the write-down of project development costs in accordance with their sale transactions (2013: Baht 3.1 million (Separate financial statements: Baht 3.0 million)), and recorded the amount as a deduction from project development costs recognised as cost of sales of land and houses during the year. In addition, during the year 2014, the Company reduced project development costs by Baht 9.4 million (2013: Baht 18.1 million) to reflect the net realisable values per appraisal reports prepared by independent valuers, and reversed Baht 14.2 million (2013: Nil) of the write-down of project development costs based on appraisal reports prepared by independent valuers. The Company presented the net amount of these transactions under â&#x20AC;&#x153;Cost of sales of land and housesâ&#x20AC;? in profit or loss.

230

12. Investments in subsidiaries

Details of investments in subsidiaries as presented in separate financial statements are as follows: (Unit: Thousand Baht) Company’s name

Estate Perfect Company Limited Perfect Sport Club Company Limited Bright Development Bangkok Company Limited Residence Number Nine Company Limited U&I Construction Bangkok Company Limited Perfect Prefab Company Limited Uniloft Service (Thailand) Company Limited We Retail Public Company Limited Property Prefect International Pte. Ltd. Chiangmai Development Company Limited Ramintra Mall Company Limited (Formerly known as “Mariya Stuff Company Limited”) Total

Paid-up capital 2014 2013

1,200,000 25,000 1,000,000 1,000,000 100,000 2,500 1,325 1,330,912 200,000 350,000

Cost 2014

2013

1,200,000 738,459 738,459 5,000 25,000 5,000 1,000,000 999,999 999,999 1,000,000 507,000 507,000 100,000 100,000 100,000 2,500 1,275 1,275 1,325 1,325 1,325 6,337,678 1,300,988 1,300,988 200,000 200,000 200,000 350,000

350,000 350,000 4,224,046 4,204,046

Subsidiaries directly owned by the Company We Retail Public Company Limited (“We Retail”) In July 2013, the Company invested Baht 500.4 million in the increase of ordinary shares of We Retail, in proportion to its existing shareholding. However, some of non-controlling interests had not invested in the increased shares in proportion to their existing shareholdings. As a result, the Company’s shareholding in We Retail increased from 91.05% to 93.31%. The Company recorded effect of the change in its shareholding in We Retail in other components of equity, under shareholders’ equity. The change in the ownership interests in We Retail was detailed below. Non-controlling interests investing in additional ordinary shares of We Retail Less Non-controlling interests of We Retail adjusted Deficit from the change in the ownership interests in We Retail

(Unit: Thousand Baht)

14,652 (16,748) (2,096)

We Retail reduced its registered, issued and paid-up share capital from Baht 6,337,678,570 (1,267,535,714 ordinary shares with a par value of Baht 5 each) to Baht 1,330,912,500 (1,267,535,714 ordinary shares with a par value of Baht 1.05 each) by changing the par value of ordinary shares from Baht 5 to Baht 1.05 per share, with the capital reduction of Baht 5,006,766,070 to be used to offset share discount and deficit, respectively. In addition, We Retail increased its registered share capital from Baht 1,330,912,500 (1,267,535,714 ordinary shares with a par value of Baht 1.05 each) to Baht 4,761,825,000 (4,535,071,428 ordinary shares with a par value of Baht 1.05 each). We Retail registered the decrease and increase in its registered, issued and paid-up share capital with the Ministry of Commerce on 5 and 6 March 2014, respectively. Currently, We Retail is in the process of allocating the additional ordinary shares to its existing shareholders (via a rights offering) and by private placement, in accordance with a resolution of the Extraordinary 231 General Meeting of shareholders of We Retail.

Perfect Sport Club Company Limited (“Perfect Sport Club”) On 15 September 2014, the Extraordinary General Meeting of shareholders of Perfect Sport Club passed a resolution to approve an increase of Baht 45 million in its registered capital, from Baht 5 million to Baht 50 million, by issuing 450,000 ordinary shares with a par value of Baht 100 per share that are 44.44% paid-up, or a total of Baht 20 million. The Company acquired all additional ordinary shares, meaning its shareholding in Perfect Sport Club is unchanged at 100%. Ramintra Mall Company Limited (“Ramintra Mall”) (Formerly known as “Mariya Stuff Company Limited”) On 8 August 2013, a meeting of the Company’s Board of Directors passed a resolution to acquire 3.5 million ordinary shares with a value of Baht 100 each in Ramintra Mall, for a total of Baht 350 million. Ramintra Mall is engaged in the property development business and has a share capital of Baht 350 million (3.5 million ordinary shares with a par value of Baht 100 each). Fair value of the identifiable assets and liabilities as at the acquisition date of investment in Ramintra Mall can be summarised below. (Unit: Thousand Baht)

Cash and cash equivalents Advance for purchase of land Leasehold rights Other current liabilities Total net assets Cash payment for purchase of investment in Ramintra Mall Less: Cash and cash equivalents of Ramintra Mall Net cash payment for purchase of investment in Ramintra Mall

274 74,254 275,481 (9) 350,000 350,000 (274) 349,726

Subsidiary owned by the Company through We Retail Centrepoint Shopping Mall Company Limited (“Centrepoint”) Centrepoint received the remaining value of the ordinary shares, amounting to Baht 99.8 million (4,990,000 ordinary shares at a value of Baht 20 each) from We Retail. Subsidiaries owned by the Company through Property Perfect International Pte. Ltd. (“PPI”) Kiroro Resort Holdings Co., Ltd. (“KRH”) [Formerly known as “Share Group Co., Ltd.”] In March 2014, PPI invested JPY 500 million in KRH’s additional ordinary shares (100,000 ordinary shares with a value of JPY 5,000 each) and the share price was settled against loans from PPI to KRH. As a result, PPI’s shareholding in KRH increased from 69.01% to 95.61%. The Company recorded effect of the change in its interest in KRH, amounting to JPY 126.4 million (Baht 38.9 million) in other components of equity under shareholders’ equity in the consolidated statement of financial position. Kabushiki Kaisha Kiroro Associates Co., Ltd. (“KA”) On June 2014, KA reduced its issued and fully paid share capital and share premium from JPY 750 million to JPY 60 million, with the capital and share premium reduction of JPY 690 million to be used to offset the deficit.

232

Acquisitions of the businesses of Thai Property Public Company Limited (“TPROP”) and Grande Asset Hotels and Property Public Company Limited (“GRAND”) On 29 July 2014, the Extraordinary General Meeting of the Company’s shareholders passed the following significant resolutions: a) To approve the Company’s acquisition of the business of TPROP through a tender offer for all shares of TPROP, whereby the Company is to settle the consideration due to those shareholders of TPROP who accept the tender offer with additionally issued ordinary shares of the Company, at a swap ratio of 2 shares of TPROP for 1 share of the Company (or equivalent to 1 share of TPROP to 0.5 share of the Company), with any fractions of shares of TPROP after the swap calculation settled in cash at a price of Baht 0.57 per share. However, the above is subject to the condition that when the said tender offer period ends, the total number of shareholders of TPROP who accept the tender offer represent not less than 75% of the total number of issued and paid-up shares of TPROP. b) To approve the Company’s purchase of the shares of GRAND (in the event that the acquisition of TPROP is accomplished, resulting in the Company gaining significant control over GRAND) by means of a tender offer for all shares of GRAND, whereby the Company will settle the consideration due to those shareholders of GRAND who accept the tender offer with additionally issued ordinary shares of the Company at a swap ratio of 114 shares of GRAND to 131 shares of the Company (or equivalent to 1 share of GRAND to 1.149123 shares of the Company), with any fractions of shares of GRAND after the swap calculation to be paid in cash at a price of Baht 1.31 per share. c) To approve the reduction of the registered capital of the Company, from the existing amount of Baht 5,961,161,256 (5,961,161,256 ordinary shares with a par value of Baht 1 each) to Baht 5,960,980,722 (5,960,980,722 ordinary shares with a par value of Baht 1 each) by canceling the 180,534 registered ordinary shares which were reserved to accommodate the exercise of expired warrants (PF-W2), with a par value of Baht 1 each, totaling Baht 180,534. d) To approve the increase of the registered capital of the Company from Baht 5,960,980,722 (5,960,980,722 ordinary shares with a par value of Baht 1 each) to Baht 10,737,610,610 (10,737,610,610 ordinary shares with a par value of Baht 1 each) by issuing 4,776,629,888 new ordinary shares, with a par value of Baht 1 each, in order to comply with the conditions of the tender offers for all shares of TPROP and GRAND, as detailed above, and also because the said tender offer may result in the Company having to adjust the exercise rights of the holders of warrants (PF-W3). e) To approve the allotment of 4,776,629,888 newly issued ordinary shares of the Company with a par value of Baht 1 as detailed below. 1) 1,596,592,736 new ordinary shares with a par value of Baht 1 each to accommodate the tender offer for all shares of TPROP. 2) 3,161,773,631 new ordinary shares with a par value of Baht 1 each to accommodate the tender offer for all shares of GRAND. 3) 18,263,521 new ordinary shares with a par value of Baht 1 each to accommodate the adjustment of the exercise rights of the warrants (PF-W3). On 4 August 2014, the Company submitted the filing information for the issue and offering of the above additional ordinary shares to the Securities and Exchange Commission. However, on 26 February 2015, a meeting of the Company’s Board of Directors passed a resolution to approve the withdrawal of the filing and a change in the method by which the consideration for the tender offers for shares of TPROP and GRAND would be settled, from payment in the form of additional ordinary shares to payment in cash from operation and loans for the tender offers for shares of TPROP at a price of Baht 0.57 per share and payment in cash from additional ordinary shares and loans from financial institutions for the tender offers for shares of GRAND at a price of Baht 1.35 per share (or Baht 1.29 per share after GRAND pays a stock dividend).

233

13. Investment in associate

On 21 August 2014, the Company and an unrelated company entered into an agreement granting rights to purchase and to sell shares. This gave that unrelated company a call option for 359,999,640 shares of Krungthep Land Public Company Limited (“Krungthep Land”), representing the 20.22% of the issued shares of Krungthep Land that were held by the Company. In addition, it gave the Company a put option to sell the shares to that company. The call option could be exercised from 15 November 2014 to 31 December 2014 while the Company can exercise its put option from 1 January 2015 to 31 December 2015. The agreed price was Baht 2 per share, or a total of approximately Baht 720 million. Subsequently, on 12 December 2014, the Company sold the Krungthep Land shares to that company and recorded a gain of Baht 77.3 million (Separate financial statements: Baht 360.0 million), which is separately presented as “Gain on sale of investment in associate” in profit or loss for the year 2014. The Company had share of income from investment in associate for the year 2014 (from 1 January 2014 to 12 December 2014) amounting to Baht 60.0 million (2013: Baht 59.8 million).

14. Other long-term investments (Unit: Thousand Baht) Consolidated and separate financial statements 2014 2013

Available-for-sale securities Domestic marketable equity securities Less: Allowance for revaluation Other investment Domestic non-marketable equity security Other long-term investments, net

109,670 (7,448) 102,222

109,767 (3,120) 106,647

4,275 106,497

4,275 110,922

15. Land held for development

(Unit: Thousand Baht) Consolidated financial statements 2014 2013

Land held for development Less: Allowance for impairment Land held for development, net Mortgaged as collateral for credit facilities, guarantees and debentures

234

Separate financial statements 2014 2013

4,525,184 (72,133) 4,453,051

6,156,027 (93,788) 6,062,239

3,512,596 (67,803) 3,444,793

5,147,753 (89,563) 5,058,190

2,179,154

3,448,314

1,377,359

2,827,089

On 8 May 2014, the Company and its subsidiary entered into an agreement to purchase and to sell land with a net book value of Baht 1,087.4 million with an unrelated company, at a price of Baht 1,700.0 million. This sale was in accordance with a resolution of the meeting of the Companyâ&#x20AC;&#x2122;s Board of Directors held on 22 April 2014. Subsequently, on 29 September 2014, the Company and its subsidiary registered the transfer of ownership of the land and received Baht 700.0 million and promissory notes amounting to Baht 1,000.0 million for which the Company received 2 promissory notes of Baht 500.0 million each, both avaled by a bank and maturing in December 2015. The promissory notes have been used to secure letters of guarantee issued by a bank as security for debentures of the Company. During the year 2014, the Company recorded allowance for impairment of land held for development based on appraisal reports prepared by independent valuers by Baht 0.9 million (2013: Nil), and recorded reversal of allowance for impairment of land held for development based on appraisal reports prepared by independent valuers by Baht 22.5 million (2013: Nil). The Company presented the net amount of these transactions under â&#x20AC;&#x153;Other incomeâ&#x20AC;? in the profit or loss.

16. Advances for purchases of land

Advances paid to landowners under agreements to purchase and to sell land (1) Advances paid to agents in acquiring land(2) Total (1) Values of agreements to purchase and to sell land (2)

(Unit: Thousand Baht) Consolidated financial statements 2014 2013

Separate financial statements 2014 2013

335,302 109,335 444,637 2,851,014

260,722 109,335 370,057 2,415,259

351,852 308,275 660,127 1,272,805

253,095 233,821 486,916 871,351

As at 31 December 2014, advances paid to agent who is employee of the Company amounting to Baht 4.3 million (2013: employees of the Company amounting to Baht 20.7 million, management of the subsidiaries amounting to Baht 105.0 million and the existing shareholder of a subsidiary amounting to Baht 74.5 million)

17. Investment properties

The investment properties of its subsidiaries are shopping malls and commercial area for rent. The net book value of investment properties as at 31 December 2014 and 2013 is presented below. (Unit: Thousand Baht) Consolidated financial statements Project under Project developed development

31 December 2014 Cost Less Accumulated depreciation Net book value 31 December 2013 Cost Book value

Total

212,658 (249) 212,409

1,327,985 1,327,985

1,540,643 (249) 1,540,394

967,145 967,145

235

A reconciliation of the net book value of investment properties for the years 2014 and 2013 is presented below. (Unit: Thousand Baht) Consolidated financial statements 2014 2013

Net book value at beginning of year Acquisition of assets Amortisation of leasehold rights to investment properties Transfers Capitalised interest(1) Increase from accrued land rental expenses Depreciation charged Net book value at end of year (1)

967,145 407,257 27,609 77,144 61,488 (249) 1,540,394

967,145 967,145

Interest is charged at the rates 4.77% - 10.48% per annum

The fair value of the above investment properties for project development, including leasehold rights, amounted to Baht 659.7 million (the net book value of the investment properties was Baht 461.3 million and that of leasehold rights was Baht 111.4 million, for a total of Baht 572.7 million). The fair value above has been determined based on valuation performed by an accredited independent valuer. The fair value of the land of the project has been determined based on market prices, while that of the shopping mall and commercial areas for rent have been determined using the income approach. Key assumptions used in the valuation include yield rate, inflation rate, long-term vacancy rate and long-term growth in real rental rates. The shopping mall and commercial areas for rent are under development, and the subsidiary expects to be able to reliably measure the fair value of these properties when construction is complete. The subsidiary has pledged investment properties amounting to approximately Baht 459.0 million (2013: Baht 459.0 million) as collateral against credit facilities received from a financial institution.

236

237

Cost 1 January 2013 Additions Disposals/written-off Transfer in (out) Translation adjustment 31 December 2013 Additions Disposals/written-off Transfer in (out) Translation adjustment 31 December 2014 Accumulated depreciation 1 January 2013 Depreciation for the year Depreciation on disposals Transfer to project development costs Translation adjustment 292,929 89 1,084 294,102 294,102 173,807 26,941 -

148,544 (6,180) 142,364 (5,838) 136,526

Land

Office buildings and clubhouses

18. Property, plant and equipment

4,153 14,949 (575)

391,422 11,759 590 (45,808) 357,963 1,633 (44,825) 314,771 4,098 14,725 (605)

162,903 1,811 (590) (19,065) 145,059 17,774 (322) (18,129) 144,382 358,366 44,376 (26,110) (23,586)

549,661 52,453 (27,460) 656 (34,636) 540,674 51,549 (9,215) 907 (34,397) 549,518 17,134 22,898 (6) 1,467 -

105,431 38,296 (35) 29,328 173,020 1,164 (6,720) 167,464

Consolidated financial statements Office and hotel Hotel Hotel building furniture and Tools and buildings improvements fixtures ÒÞâÖÝÚÒÛáĢ

60,368 3,208 (6,647) (2,226)

71,286 1,684 (6,684) (2,958) 63,328 2,192 (6,499) (2,579) 56,442

30,555 23,221 (31,068) 22,708 30,092 (907) (2,778) 49,115

Motor Construction Vehicles in progress

30,202 2,175 (894) (38)

36,107 1,714 (909) (356) 36,556 17,957 (411) 54,102

Others

648,128 129,272 (33,657) 1,467 (27,030)

1,788,838 131,027 (35,088) (109,003) 1,775,774 122,361 (22,756) (108,957) 1,766,422

Total

(Unit: Thousand Baht)

238

31 December 2013 200,748 18,527 18,218 353,046 Depreciation for the year 19,124 14,773 14,797 46,704 Depreciation on disposals (8,671) Transfer to project development costs 6 Translation adjustment (3,960) (3,905) (23,501) 31 December 2014 219,872 29,340 29,110 367,584 Allowance for impairment 1 January 2013 5,396 3,704 31 December 2013 5,396 3,704 31 December 2014 5,396 3,704 Net book value 31 December 2013 136,968 89,650 339,436 126,841 187,628 31 December 2014 131,130 70,526 285,431 115,272 181,934 Depreciation for the years 2013 (Baht 43.4 million included in cost of hotel operations and the balance included in administrative expenses) 2014 (Baht 45.9 million included in cost of hotel operations and the balance included in administrative expenses)

Land

Office buildings and clubhouses

54,703 3,072 (6,460) (2,450) 48,865 8,625 7,577

2,888 65,580 131,527 101,884

22,708 49,115

Motor Construction Vehicles in progress

41,493 24,681 (3,482)

Consolidated financial statements Office and hotel Hotel Hotel building furniture and Tools and buildings improvements fixtures ÒÞâÖÝÚÒÛáĢ Total

9,100 9,100 9,100

129,272 125,770

5,111 1,048,494 20,330 963,199

2,894 (292) (34,108) 33,772 794,123

31,445 718,180 2,619 125,770 - (18,613)

Others

(Unit: Thousand Baht)

239

Cost 1 January 2013 Additions Disposals Transfer in (out) 31 December 2013 Additions Disposals Transfer in (out) 31 December 2014 Accumulated depreciation 1 January 2013 Depreciation for the year Depreciation on disposals 31 December 2013 Depreciation for the year Depreciation on disposals 31 December 2014 250,131 1,084 251,215 251,215 152,004 23,079 175,083 15,173 190,256

Office buildings and clubhouses

95,738 95,738 95,738

Land

133,364 21,394 (26,047) 128,711 19,856 (75) 148,492

192,029 16,835 (26,976) 656 182,544 9,318 (99) 907 192,670 32,665 1,038 (6,647) 27,056 1,245 (4,424) 23,877

36,215 1,545 (6,647) 31,113 602 (4,425) 27,290

Separate financial statements Furniture Motor and fixtures vehicles

1,084 1,046 (1,740) 390 517 (907) -

Construction in progress

19,867 191 (895) 19,163 262 19,425

20,198 733 (894) 20,037 20,037

Others

337,900 45,702 (33,589) 350,013 36,536 (4,499) 382,050

595,395 20,159 (34,517) 581,037 10,437 (4,524) 586,950

Total

(Unit: Thousand Baht)

240 53,833 44,178

3,704 3,704 3,704 72,428 57,255

4,057 3,413

390 -

Construction in progress

874 612

Others

45,702 36,536

221,924 195,800

9,100 9,100 9,100

Total

On 27 March 2014, a subsidiary in Japan entered into an agreement for the purchase and sale of a 61 timeshare condominium units of a hotel, including land in proportion to the number of rooms owned and various related assets, at a price of JPY 1,829 million. The agreement states that the subsidiary is required to renovate the rooms and related assets, in accordance with the details in the agreement, before the closing date, which is to be within 1 August 2015. Currently, the subsidiary has now revised the renovation plans, resulting in cancellation of the agreement for the purchase and sale of condominium units of a hotel, and paid a cancellation fee of JPY 91.5 million (equivalent to Baht 28.1 million), which is presented under administrative expenses in profit or loss for the year 2014.

As at 31 December 2014, certain plant and equipment items had been fully depreciated but were still in use. The gross carrying amount (before deducting accumulated depreciation and allowance for impairment loss) of those assets amounted to approximately Baht 419.2 million (2013: Baht 209.5 million) (Separate financial statements: Baht 211.3 million (2013: Baht 181.1 million)).

Allowance for impairment 1 January 2013 5,396 31 December 2013 5,396 31 December 2014 5,396 Net book value 31 December 2013 90,342 31 December 2014 90,342 Depreciation for the years as included in administrative expenses 2013 2014

Land

Office buildings and clubhouses

Separate financial statements Furniture Motor and fixtures vehicles

(Unit: Thousand Baht)

19. Leasehold rights

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements

Cost 1 January 2013 Additions Increase from acquisition of subsidiary 31 December 2013 Additions Transfer from advances for purchases of land 31 December 2014 Accumulated amortisation 1 January 2013 Amortisation for the year 31 December 2013 Amortisation for the year 31 December 2014 Allowance for impairment 31 December 2013 31 December 2014 Net book value 31 December 2013 31 December 2014 Amortisation for the years 2013 (Consolidated financial statements: Baht 19.4 million included in investment properties and the balance included in administrative expenses and separate financial statements: included in administrative expenses) 2014 (Consolidated financial statements: Baht 27.6 million included in investment properties and the balance included in administrative expenses and separate financial statements: included in administrative expenses)

699,208 594,635 275,481 1,569,324 6,194 62,730 1,638,248

92,000 92,000 92,000

63,730 26,349 90,079 45,217 135,296

48,760 3,211 51,971 3,211 55,182

189,844 189,844

1,289,401 1,313,108

40,029 36,818

26,349

3,211

45,217

3,211

241

242

Counterparty

Crown Property Bureau Individual

Counterparty

30 years 30 years

Lease term

30 years

Lease term

1 April 2015 to 31 March 2045 1 June 2013 to 31 May 2043

Lease period

1 August 1996 to 1 August 2026

Lease period

113.7 23.8

(Million Baht)

27.5 9.5

Rental throughout the contract period

Upfront fee

36.0

(Million Baht)

27.0

Rental throughout the contract period

Upfront fee

Counterparty

Lease term

Lease period

Individual Individual

9 April 2013 and 26 August 2014 (extended period) 24 September 2014

33 years 33 years

Lease term

9 April 2013 to 31 March 2046 1 February 2017 to 31 January 2047

Lease period

302.4 172.1

(Million Baht)

141.2 33.3

529.4 205.1

(Million Baht)

Total

378.6 2,525.5

(Million Baht)

Total

(Million Baht)

c) According to the land lease agreement, no rental will be collected during the construction period, from 24 September 2014 to 31 January 2017.

Total

63.0

(Million Baht)

Rental throughout the contract period

227.0 33.0

Total (Million Baht)

Upfront fee

249.6 1,785.0

(Million Baht)

129.0 740.5

Rental throughout the contract period Upfront fee

b) According to the land lease agreement, no rental will be collected during the construction period of 2 years, from 9 April 2013 to 31 March 2015.

Counterparty

Agreement date

26 years 8 April 2010 Individual 8 months 8 April 2010 to 31 December 2036 23 August 2012 A company 30 years 1 January 2015 to 31 December 2044 Ramintra Mall Company Limited (Formerly known as â&#x20AC;&#x153;Mariya Stuff Company Limitedâ&#x20AC;?

Agreement date

a) According to the land lease agreement, no rental will be collected during the construction period of 2 years, from 1 April 2013 to 31 March 2015. Centrepoint Shopping Mall Company Limited

22 May 2013 30 May 2013

Agreement date

23 July 1997 Individual We Retail Public Company Limited

Agreement date

Leasehold rights is detailed below. The Company

b) c)

Remark

20.Trade and other payables

Trade accounts payable - related companies Trade accounts payable Amounts due to related companies Creditors per rehabilitation plan Retention payable Accrued interest expenses - related companies Accrued interest expenses Accrued expenses Other payables Total trade and other payables

(Unit: Thousand Baht) Consolidated financial statements 2014 2013

Separate financial statements 2014 2013

4,474 1,518,060 10,479 96,636 63,073 639,829 78,918 2,411,469

1,006 898,051 36,386 5,366 59,089 246,079 7,200 1,253,177

2,879 1,869,183 9,996 99,059 139,235 540,285 3,960 2,664,597

21. Notes payable - leasehold rights

25,337 767,361 2,770 35,961 349 136,286 168,752 1,136,816

(Unit: Thousand Baht) Consolidated financial statements 2014 2013

Notes payable - leasehold rights Less: Current portion Notes payable - leasehold rights, net of current portion

20,000 (10,000) 10,000

285,368 (265,368) 20,000

The promissory notes are avaled by a financial institution, and an aval is secured by fixed deposits.

22. Notes payable The details of the notes payable are as follows: Consolidated financial statements 2014 2013 Maturity date

Property Perfect Plc. Estate Perfect Co., Ltd. Bright Development Bangkok Co., Ltd. Residence Number Nine Co., Ltd. Chiangmai Development Co., Ltd. Total

(Million Baht) 380.5 187.8 55.9 81.1 117.8 87.3 87.3 119.6 119.6 724.4 512.5

May 2015 March 2015 May 2015 June 2015 May 2015

243

Separate financial statements 2014 2013 Maturity date

Property Perfect Plc. Total

(Million Baht) 380.5 187.8 380.5 187.8

May 2015

The promissory notes are subject to interest at rates of 6.50% - 7.38% per annum and interest at a rate tied to the minimum overdraft rate (MOR) and secured by the mortgage of parts of the project land of the Company and its subsidiaries. In addition, the Company has provided guarantees for its subsidiariesâ&#x20AC;&#x2122; promissory notes.

23. Bills of exchange payable The details of the bills of exchange payable are as follows: Consolidated and separate financial statements 2014 2013 Maturity date

Property Perfect Plc. Total

(Million Baht) 636.2 636.2

June 2015

The bills of exchange payable are subject to interest at rates of 4.70% - 4.80% per annum and not collateralised.

24. Debentures

(Unit: Thousand Baht) Consolidated and separate financial statements 2014 2013

Secured debentures No. 1/2012#1 Secured debentures No. 1/2012#2 Secured debentures No. 2/2012 Short-term unsecured debentures No. 2/2013#1 Short-term unsecured debentures No. 2/2013#2 Short-term unsecured debentures No. 3/2013#1 Short-term unsecured debentures No. 1/2014 Unsecured debentures No. 1/2013 Unsecured debentures No. 1/2014 Unsecured debentures No. 2/2014 Total debentures - net of issuing costs Less: Current portion Debentures - net of current portion

244

1,999,243 2,979,472 2,000,000 2,000,000 2,200,000 2,400,000 13,578,715 (8,978,715) 4,600,000

499,226 1,992,050 2,956,796 800,000 1,000,000 2,000,000 2,000,000 11,248,072 (4,299,226) 6,948,846

245

500,000 2,000,000 3,000,000 800,000 1,000,000 2,000,000 2,000,000 2,000,000 2,200,000 2,400,000

Unit

1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Issue date

2 years 3 years 3 years 270 days 270 days 270 days 270 days 2 years 1.5 years 2 years

Term

Repayment in 2014 15 March 2015 9 November 2015 Repayment in 2014 Repayment in 2014 Repayment in 2014 14 September 2015 28 June 2015 1 February 2016 1 October 2016

Maturity date

5.35 5.35, 6.25 5.45 4.60 4.60 4.70 4.95 6.05 5.80 5.90

a) b)

Coupon rate (% per annum) Remark

The debenture agreements contain several covenants which, among other things, require the Company to maintain debt-to-equity ratio at the rate prescribed in the agreements.

500,000 15 March 2012 2,000,000 15 March 2012 3,000,000 9 November 2012 800,000 19 April 2013 1,000,000 8 May 2013 2,000,000 8 November 2013 2,000,000 18 December 2014 2,000,000 28 June 2013 2,200,000 1 August 2014 2,400,000 1 October 2014

Total value Unit par (Thousand (Baht) Baht)

a) Secured by letter of guarantee provided by a financial institution of Baht 1,200 million b) Secured by letter of guarantee provided by a financial institution of Baht 1,800 million

Debentures

The debentures are detailed below.

25. Long-term loans

Long-term loans Less: Current portion Long-term loans - net of current portion The outstanding long-term loans are detailed as follows:

(Unit: Thousand Baht) Consolidated financial statements 2014 2013

Separate financial statements 2014 2013

4,293,614 (747,145) 3,546,469

2,533,258 (381,764) 2,151,494

6,611,879 (747,169) 5,864,710

3,742,484 (331,229) 3,411,255

The Company Long-term loans consist of loans granted by three financial institutions. The details are as follows: Balance 2014

246

End of contract date 2013

(Million Baht) 1) A facility of Baht 650.0 million 29.2 Repayment in 2014 2) A facility of Baht 679.0 million 279.1 126.0 May 2016 3) A facility of Baht 198.0 million 176.0 176.0 June 2016 4) A facility of Baht 835.1 million 226.4 Repayment in 2014 5) A facility of Baht 933.0 million 146.0 278.0 October 2016 6) A facility of Baht 450.0 million 150.7 450.0 October 2015 7) A facility of Baht 450.0 million 94.7 210.7 February 2015 8) A facility of Baht 900.0 million 30.3 275.0 April 2016 9) A facility of Baht 900.0 million 268.4 319.3 January 2018 10) A facility of Baht 1,701.4 million 217.0 217.0 January 2018 11) A facility of Baht 370.0 million 136.4 179.0 October 2015 12) A facility of Baht 1,250.0 million 427.2 601.7 February 2017 13) A facility of Baht 1,861.0 million 282.9 282.9 March 2018 14) A facility of Baht 380.0 million 63.8 131.3 May 2016 15) A facility of Baht 650.0 million 102.1 240.0 February 2017 16) A facility of Baht 483.7 million 158.7 - June 2019 Total 2,533.3 3,742.5 Less: Current portion (381.8) (331.2) Long-term loans - net of current portion 2,151.5 3,411.3 The loans are subject to interest at a rate tied to the minimum loan rate (MLR) and are to be repaid at rates of not less than 60% - 80% of the selling price each time that a plot of land or condominium unit is redeemed from mortgage. They are secured by the mortgage of parts of the Companyâ&#x20AC;&#x2122;s project land and construction.

The subsidiaries Long-term loans consist of loans granted by five financial institutions. The details are as follows: Balance 2014

1) A facility of Baht 385.0 million 2) A facility of Baht 278.8 million 3) A facility of Baht 343.0 million 4) A facility of Baht 650.0 million 5) A facility of Baht 652.0 million 6) A facility of Baht 215.6 million 7) A facility of Baht 333.0 million 8) A facility of Baht 480.0 million 9) A facility of Baht 1,632.0 million 10) A facility of Baht 440.3 million 11) A facility of Baht 401.2 million 12) A facility of Baht 515.4 million 13) A facility of Baht 194.2 million 14) A facility of Baht 218.0 million 15) A facility of Baht 108.9 million 16) A facility of Baht 772.0 million 17) A facility of Baht 370.3 million 18) A facility of Baht 305.0 million 19) A facility of Baht 198.6 million 20) A facility of Baht 646.0 million 21) A facility of Baht 228.5 million 22) A facility of Baht 425.0 million 23) A facility of Baht 391.0 million 24) A facility of Baht 35.0 million Total Less: Current portion Long-term loans - net of current portion

End of contract date 2013

(Million Baht) 30.9 102.2 110.0 110.0 236.4 220.0 248.8 222.3 128.6 161.1 117.8 159.0 259.1 259.1 262.3 86.8 119.1 103.3 103.7 60.6 160.0 160.0 80.8 97.8 39.7 29.6 169.6 184.7 11.2 85.5 17.2 10.2 154.9 153.1 104.3 35.0 35.0 1,760.3 2,869.4 (365.3) (416.0) 1,395.0 2,453.4

Repayment in 2014 Repayment in 2014 November 2015 September 2017 April 2017 June 2018 January 2019 Repayment in 2014 May 2017 Repayment in 2014 Repayment in 2014 Repayment in 2014 Repayment in 2014 Repayment in 2014 Repayment in 2014 August 2015 June 2024 January 2016 December 2022 October 2015 Repayment in 2014 February 2017 October 2018 December 2018

The loans are subject to interest at a rate tied to the minimum loan rate (MLR) and are to be repaid at rates of not less than 50% - 70% of the selling price each time that a plot of land or condominium unit is redeemed from mortgage or in monthly installments as stipulated in the agreements. They are secured by the guarantee provided by the Company as discussed in Note 37.4 a) to the financial statements, and the mortgage of parts of the subsidiariesâ&#x20AC;&#x2122; project land and construction.

247

The loan agreements contain several covenants which, among other things, require the Company and its subsidiaries to maintain debt-to-equity ratio at the rate prescribed in the agreements. As at 31 December 2014, the long-term credit facilities of the Company and its subsidiaries which have not been drawn down amounted to Baht 9,856.1 million (2013: Baht 11,528.0 million).

26. Provision for long-term employee benefits

Provision for long-term employee benefits, which represents compensation payable to employees after they retire from the company, was as follows: (Unit: Thousand Baht) Consolidated financial statements 2014 2013

Defined benefit obligation at beginning of year Current service cost Interest cost Benefits paid during the year Increase due to effect from transfers Translation adjustments Actuarial loss Defined benefit obligation at end of year Unrecognised actuarial loss Unrecognised transitional provisions Provisions for long-term employee benefits at end of year

140,732 11,095 4,913 (2,943) 895 (1,509) 31,397 184,580 (48,415) (14,722) 121,443

128,120 11,253 4,042 (989) (1,694) 140,732 (17,611) (29,443) 93,678

Separate financial statements 2014 2013

98,154 7,929 3,185 5,995 30,582 145,845 (45,101) (11,288) 89,456

87,342 7,796 3,016 98,154 (15,066) (22,575) 60,513

Long-term employee benefit expenses included in the profit or loss under selling and administrative expenses were as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2014 2013 2014 2013

Current service cost Interest cost Increase due to effect from transfers Actuarial loss recognised during the year Transitional liability recognised during the year Total expense recognised in profit or loss

248

11,095 4,913 895 592 14,721 32,216

11,253 4,042 784 14,648 30,727

7,929 3,185 5,995 547 11,287 28,943

7,796 3,016 706 11,288 22,806

Principal actuarial assumptions at the valuation date were as follows: Consolidated Separate financial statements financial statements (% per annum) (% per annum)

Discount rate Future salary increase rate Staff turnover rate

2.0, 3.0, 3.5 5.0 - 7.0 0.0 - 22.9

3.0, 3.5 5.0 - 7.0 0.0 - 22.9

Amounts of defined benefit obligation and experience adjustments on the obligation for the current and previous four periods were as follows: (Unit: Thousand Baht) Defined benefit obligation Experience adjustments on the obligation Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements

Year 2014 Year 2013 Year 2012 Year 2011 Year 2010

184,580 140,732 128,120 102,404 73,484

145,845 98,154 87,342 80,514 56,439

21,543 4,638 -

22,393 4,051 -

27. Provisions (Unit: Thousand Baht) Consolidated and separate financial statements 2014 2013

Balance as at beginning of year Provision for loss arising from rental guarantee Payment for rental guarantee Revision of provision Balance as at end of year Current Non-current

42,166 (26,733) 24,031 39,464 21,110 18,354

45,306 (3,140) 42,166 18,457 23,709

249

Rental guarantee for the Fund On 30 October 2013, a subsidiary sold its dormitories to Uniloft Property Fund (“the Fund”), for a total consideration of Baht 514 million. In accordance with a resolution of a meeting of Board of Directors of the Company on 8 August 2013, the Company invested Baht 100.5 million in the Fund, giving it a 19.52% interest. The Company also entered into an operating lease agreement with the Fund in order to rent the properties for 3 years with rental rate set at Baht 43.5 million per annum, and the Fund having the right to extend the lease for a further year, with the same rental rate and conditions as for the first 3 years. The Company and its subsidiaries have no agreements or contracts, and commitments or options to buy back these properties in the future. Therefore, the sale and the cost of the sale of the properties were recognised in the consolidated profit or loss for the year 2013. However, the management’s assessment was that, in substance, the operating lease agreement was a guarantee of rental for the Fund over the period of 4 years, and was thus an onerous contract. Therefore, the management estimated the cost of the expenses expected to be incurred as a result of providing this rental guarantee, based on the present value of the difference between the projected dormitory rental income from individuals and the rental expense the Company has contracted to pay to the Fund over the period of 4 years, calculated on the basis of assumptions that were appropriate to the operating results and circumstances of the dormitories at that time. The Company thus recognised provision for the loss from the rental guarantee of Baht 45.3 million and recorded it as a separate item under the heading of “Loss arising from rental guarantee” in the profit or loss for the year 2013. As at 31 December 2014, the Company revisited the provision for loss arising from rental guarantees, based on certain changes in the assumptions such as rental rate, occupancy rate and discount rate. The Company’s management believes that the underlying assumptions are appropriate in the current circumstances. The Company therefore recorded additional provision of Baht 24.0 million and presented it as a separate item under the heading of “Loss arising from rental guarantee” in profit or loss for the year 2014. As at 31 December 2014, future minimum sublease payments expected to be received under non-cancellable subleases of the dormitories totaled approximately Baht 5.9 million (2013: Baht 8.7 million). During the year 2014, the Company recognised subleasing revenue of Baht 16.8 million (2013: Baht 4.1 million).

28. Share capital/Share discount

On 29 July 2014, the Extraordinary General Meeting of the Company’s shareholders passed the following significant resolutions: a) To approve the reduction of the registered capital of the Company, from the existing amount of Baht 5,961,161,256 (5,961,161,256 ordinary shares with a par value of Baht 1 each) to Baht 5,960,980,722 (5,960,980,722 ordinary shares with a par value of Baht 1 each) by canceling the 180,534 registered ordinary shares which were reserved to accommodate the exercise of expired warrants (PF-W2), with a par value of Baht 1 each, totaling Baht 180,534. b) To approve the increase of the registered capital of the Company from Baht 5,960,980,722 (5,960,980,722 ordinary shares with a par value of Baht 1 each) to Baht 10,737,610,610 (10,737,610,610 ordinary shares with a par value of Baht 1 each) by issuing 4,776,629,888 new ordinary shares, with a par value of Baht 1 each, in order to comply with the conditions of the tender offers for all shares of TPROP and GRAND and also because the said tender offer may result in the Company having to adjust the exercise rights of the holders of warrants (PF-W3), as discussed in Note 12 to the financial statements.

250

The Company registered the decrease and increase in its registered share capital with the Ministry of Commerce on 31 July 2014. As at 31 December 2014, the Company’s issued and paid up share capital was increased to Baht 5,782,951,655 (5,782,951,655 ordinary shares with a par value of Baht 1 each), as a result of Baht 21,000 of ordinary shares with a par value of Baht 1 each issued for the exercise of warrants (PF-W3) as discussed in Note 29 to the financial statements. The Company registered the increase in its capital with the Ministry of Commerce on 9 October 2014.

29. Warrants

The Annual General Meeting of the Company’s shareholders held on 27 April 2012 passed a resolution to approve the issue of the warrants to the Company’s existing shareholders (PF-W3) in a ratio of 1 warrant for every 2 new ordinary shares to be offered to the Company’s existing shareholders, without specifying the offer price. Details are as follows: Issue date No. of warrants granted (Units) Life of warrants Exercisable Exercise price per 1 ordinary share (Baht) Exercise ratio (warrant to ordinary share)

18 July 2012 393,865,295 3 years from the issue date Last business day of each quarter from the issue date 1.00 1:1

The balances of warrants (PF-W3) are detailed as follows: Balance as at beginning of year Exercise during the year Balance as at end of year

2014

2013

178,050,002 (21,000) 178,029,002

319,932,694 (141,882,692) 178,050,002

30. Statutory reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10% of the registered capital. The statutory reserve is not available for dividend distribution.

251

31. Expenses by nature

Significant expenses classified by nature are as follows: (Unit: Thousand Baht) Consolidated financial statements 2014 2013

Salaries, wages and other employee benefits Depreciation and amortization Rental and service expenses from operating lease and service agreements Specific business tax and transfer fees Marketing expenses Project management expenses Loss arising from rental guarantee Loss on exchange Cancellation fee of the agreement for the purchase and sale of condominium units of a hotel Real estate development during the year Changes in real estate projects Finance cost

Separate financial statements 2014 2013

1,138,576 143,627

1,184,510 151,314

490,804 39,747

468,459 49,015

426,449 467,936 648,245 276,906 24,031 -

425,805 391,819 677,089 293,563 45,306 13,487

247,475 250,996 381,745 197,172 24,031 -

208,534 195,867 409,259 214,260 45,306 -

28,129 6,358,052 1,011,364 1,075,605

8,627,254 (2,318,678) 1,144,918

3,897,157 (178,348) 968,681

3,809,880 (792,292) 898,206

32. Income tax

Income tax for the years ended 31 December 2014 and 2013 are made up as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2014 2013 2014 2013

Current income tax: Current income tax charge Adjustment in respect of income tax of previous year Deferred tax: Relating to origination and reversal of temporary differences Income tax expenses (benefits) reported in the statement of comprehensive income

252

201,100 316

72,857 (1,731)

52,784 (13,568) 254,200

95,014 316

1,550 (1,731)

16,824 (31,811)

57,558 112,154 (31,992)

The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2014 and 2013 are as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2014 2013 2014 2013

Deferred tax relating to loss on change in value of available-for-sale investments

866 866

70 70

866 866

70 70

Reconciliation between income tax expenses (benefits) and the product of accounting profit (loss) multiplied by the applicable tax rates for the years ended 31 December 2014 and 2013. (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2014

Accounting profit (loss) before tax Income tax at Thai corporate income tax rate of 20% Adjustment in respect of current income tax of previous year Tax effect of temporary differences Tax effect of non-deductible expenses Tax effect of non-taxable income Tax effect of loss for the year at corporate income tax rate of subsidiaries Difference of tax rates in group companies Others Income tax expenses (benefits) reported in the statement of comprehensive income

2013

2014

2013

656,461 98,979 479,114 (185,336) 131,292 19,796 95,823 (37,067) 316 (1,731) 316 (1,731) 20,626 (5,555) 3,507 83,009 14,989 13,828 6,975 (13,436) (12,171) (1,320) (169) 61,855 59,253 (29,462) (20,032) 3,009 254,200

57,558 112,154 (31,992)

The tax rate enacted at the end of the reporting period of the Company and its subsidiaries is between 0% and 43.48% (2013: 0% and 43.48%).

253

The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Thousand Baht) Statement of financial position Consolidated Separate financial statements financial statement 2014 2013 2014 2013

Deferred tax assets Reduce cost of project development costs to net realisable value and allowance for asset impairment Provision for long-term employee benefits Provision for loss arising from rental guarantee Provision for juridical fund Deposits and cash received in advance and installments due per agreements Unused tax loss Difference of tax and accounting of borrowing costs Difference of tax and accounting of cost of clubhouses Deferred income Deferred tax relating to related partiesâ&#x20AC;&#x2122; transactions Others Total Deferred tax liabilities Revaluation surplus of assets at business combination date Difference of tax and accounting of hotel buildings and hotel building improvements Others Total Deferred tax assets - net Presented as Deferred tax assets - net Deferred tax liabilities - net Net

31,210 25,916 7,893 21,360

42,969 20,777 8,433 18,257

24,968 17,891 7,893 15,899

34,154 12,103 8,433 13,768

31,561 132,686 57,395 46,994 16,800 21,164 1,533 394,512

106,182 119,126 65,668 42,061 16,810 1,280 441,563

57,395 40,625 14,209 1,533 180,413

24,004 65,668 36,961 1,280 196,371

(88,536) (107,751) (21,635) -

(1,930) (1,679) (112,101) (109,430) 282,411 332,133

180,413

196,371

180,413 180,413

196,371 196,371

299,881 (17,470) 282,411

332,133 332,133

As at 31 December 2014, the Company and its subsidiaries in Thailand had deductible temporary differences and unused tax losses totaling Baht 105.5 million (2013: Baht 85.3 million) (Separate financial statements: Baht 49.2 million (2013: Baht 24.7 million)) and its subsidiaries in Japan, where the tax bases differ from the tax bases in Thailand, had unused tax losses totaling JPY 3,713.8 million (2013: JPY 2,910.0 million). Deferred tax assets were not recognised as the Company and its subsidiaries believe future taxable profits may not be sufficient to allow utilisation of the temporary differences and unused tax losses.

254

33. Earnings per share Basic earnings per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued. The following table sets forth the computation of basic and diluted earnings per share: Consolidated financial statements Weighted average Earnings Profit number of ordinary shares pershare 2014 2013 2014 2013 2014 2013 Thousand Thousand Baht Baht

Basic earnings per share Profit attributable to equity holders of the Company 398,797 82,929 Effect of dilutive potential ordinary shares Warrants PF-W3 Diluted earnings per share Profit of ordinary shareholders assuming the conversion of dilutive potential ordinary shares 398,797 82,929

Thousand shares

5,782,936 39,388

5,822,324

Thousand shares

Thousand Baht

Thousand shares

Basic earnings per share Profit (loss) attributable to equity holders of the Company 366,961 (153,344) 5,782,936 Effect of dilutive potential ordinary shares Warrants PF-W3 39,388 Diluted earnings per share Profit of ordinary shareholders assuming the conversion of dilutive potential ordinary shares 366,961 5,822,324

Baht

5,724,148 0.06896 0.01449 85,986

5,810,134 0.06849 0.01427

Separate financial statements Weighted average Profit (loss) number of ordinary shares 2014 2013 2014 2013 Thousand Baht

Baht

Earnings pershare 2014 2013

Thousand shares

Baht

5,724,148

0.06346

(0.02679)

0.06303

255

Since the warrants (PF-W3) would decrease loss per share in the separate financial statements for the year ended 31 December 2013, the Company had not assumed conversion of the warrants in calculation of diluted earnings per share in the separate financial statements for the year ended 31 December 2013.

34. Financial information by segment

Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance. The chief operating decision maker has been identified as Chief Executive Officer. For management purposes, the Company and its subsidiaries are organised into business units based on their products and services and have four reportable segments as follows: w 7KH SURSHUW\ GHYHORSPHQW VHJPHQW LQYROYLQJ GHYHORSPHQW RI VLQJOH GHWDFKHG KRXVHV WRZQKRXVHV DQG FRQGRPLQLXPV w 7KH FRQVWUXFWLRQ VHJPHQW LQYROYLQJ VHUYLFH WR FRQVWUXFW VLQJOH GHWDFKHG KRXVHV WRZQKRXVHV DQG FRQGRPLQLXPV of the Group w 7KH VHUYLFH VHJPHQW LQYROYLQJ RSHUDWLQJ FOXE KRXVHV RI WKH *URXS w 7KH KRWHO VHJPHQW LQYROYLQJ KRWHO RSHUDWLRQ LQ -DSDQ The basis of accounting for any transactions between reportable segments is consistent with that for third party transactions. The following tables present revenue, profit and loss and total assets information regarding the Company and its subsidiariesâ&#x20AC;&#x2122; operating segments for the years ended 31 December 2014 and 2013, respectively. (Unit: Thousand Baht) Year ended 31 December 2014

Revenue from external customers Inter-segment revenues Total revenues Segment profit (loss)

Property development Construction

11,584,341 11,584,341 3,751,850

167,360 167,360 (31,813)

Service

500 7,614 8,114 (254)

Hotel

Total Adjustments reportable and segments eliminations Consolidated

844,710 12,429,551 174,974 844,710 12,604,525 194,116 3,934,271

(174,974) (174,974) (19,142)

12,429,551 12,429,551 3,894,757

(Unit: Thousand Baht) Year ended 31 December 2013

Revenue from external customers Inter-segment revenues Total revenues Segment profit (loss)

256

Property development Construction

9,999,475 9,999,475 3,269,181

705,037 705,037 (84,091)

Service

Hotel

Total Adjustments reportable and segments eliminations Consolidated

- 1,018,433 11,017,908 20,185 725,222 20,185 1,018,433 11,743,130 (680) 382,220 3,584,774

(725,222) (725,222) 67,934

11,017,908 11,017,908 3,634,564

Geographic information Revenues from external customers are based on locations of the customers. (Unit: Thousand Baht)

Revenues from external customers Thailand Japan Total Non-current assets (other than financial instruments and deferred tax assets) Thailand Japan Total

2014

2013

11,584,841 844,710 12,429,551

9,999,475 1,018,433 11,017,908

7,795,541 619,337 8,414,878

8,920,745 643,105 9,563,850

35. Provident fund

The Company, its subsidiaries and their employees have jointly established provident funds in accordance with the Provident Fund Act B.E. 2530. The Company, its subsidiaries and their employees contributed to the fund monthly at the rate of 3% - 10% of basic salary. The fund, which is managed by Kasikorn Asset Management will be paid to employees upon termination in accordance with the fund rules. During the year 2014, the Company and its subsidiaries contributed Baht 31.3 million (2013: Baht 28.8 million) (Separate financial statements: Baht 24.1 million (2013: Baht 22.7 million)) to the fund.

36. Dividends Final dividend for 2012

Approved by

Total dividends

Dividend per share

Annual General Meeting of the shareholders on 25 April 2013

Baht 187.5 Million

Baht 0.033

37. Commitments and contingent liabilities

As at 31 December 2014, the Company and its subsidiaries had commitments as follows:

37.1 Capital commitments a) The Company and its subsidiaries had outstanding commitments of approximately Baht 3,126.3 million (2013: Baht 4,382.3 million) in respect of construction contracts of land and house projects and residential condominium units of which the Company and its subsidiaries had already entered into contracts with subcontractors. b) The Company and its subsidiaries had outstanding capital commitments of approximately Baht 2,515.7 million (2013: Baht 925.6 million) in respect of purchases of land. c) A subsidiary had outstanding capital commitments of approximately Baht 12.8 million (2013: Baht 12.8 million) in respect of land lease for real estate development. d) The subsidiaries had outstanding capital commitment of approximately Baht 245.1 million and JPY 7.4 million (2013: Baht 583.9 million) in respect of construction, a design contract for shopping center, office project, hotel and consulting contract.

257

37.2 Operating lease and service commitments The Company and its subsidiaries have entered into several lease and service agreements in respect of the lease of land, condominium, vehicles, advertising board, office space and various services. The terms of the agreements are generally between 1 and 5 years. Operating lease and service agreements are non-cancellable. Future minimum lease payments required under these non-cancellable operating lease and service contracts were as follows. Payable within: Less than 1 year 2 to 5 years

2014

2013

Baht 89.4 million and JPY 3.2 million Baht 42.5 million and JPY 7.2 million

Baht 101.7 million Baht 65.0 million

During the year 2014, the Company and its subsidiaries recognised rental and service expenses of Baht 417.2 million (2013: Baht 425.8 million) (Separate financial statements: Baht 247.5 million (2013: Baht 208.5 million)). 37.3 Service lease commitment a) A subsidiary had a consultation agreement in respect of the real estate project with a company, effective from October 2013 to December 2016. Under the conditions of the agreements, the subsidiary is to pay a monthly service fee as stipulated in agreement. During the year 2014, the subsidiary recognised fee expenses of Baht 7.5 million (2013: Baht 1.9 million). b) The Company and its subsidiary had financial consultation agreements with related individual and company dated 18 March 2013 and 2 January 2014. Under the conditions of the agreements, the Company and its subsidiary are to pay a monthly service fee as stipulated in agreements. During the year 2014, the Company and its subsidiary recognised fee expenses of Baht 3.6 million (2013: Baht 2.5 million) (Separate financial statements: Baht 2.4 million (2013: Baht 2.0 million)). c) The Company had a financial consultation agreement with a company dated 1 April 2014 in respect of acquisitions of the businesses of TPROP and GRAND. Under the conditions of the agreement, the Company is to pay a success fee as stipulated in agreement when the Securities and Exchange Commission approves the issue and offering of the additional ordinary shares as discussed in Note 12 to the financial statements. 37.4 Guarantees a) The Company has guaranteed bank credit facilities of its subsidiaries amounting to Baht 9,430.8 million (2013: Baht 12,133.8 million). b) There were outstanding bank guarantees of approximately Baht 3,610.5 million (2013: Baht 4,120.8 million) issued by the banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of business. These included letters of guarantee amounting to Baht 610.5 million (2013: Baht 820.8 million) to guarantee the public utilities and Baht 3,000.0 million (2013: Baht 3,300.0 million) to guarantee the debentures.

258

37.5 Litigations Outstanding litigation as at 31 December 2014 is detailed below. a) The Company was sued by 88 residents of a project with claims totaling Baht 111.0 million, for damages as a result of breach of contract, accusing the Company of fraud, and claiming depreciation of the land and houses. The Court of First Instance ordered the Company to pay the plaintiffs Baht 7.2 million (including interest at a rate of 7.5% per annum). The Company has appealed to the Court. The cases are currently being considered by the Court of Appeal. However, the management of the Company believes that the Company will not incur significant losses as a result of these cases. Therefore, the Company has not set aside provision for losses resulting from this litigation. b) The Company was sued by a housing juristic person and buyers of a project with claims for damages totaling Baht 14.0 million, who charged the Company with selling common area land of this project. The case is currently being considered by the Court of First Instance. The management of the Company believes that the Company will not incur significant losses as a result of the case. Therefore, the Company has not set aside provision for losses resulting from the litigation since the plaintiffs do not understand the facts of the case, which are that the Companyâ&#x20AC;&#x2122;s actions were legal. c) The Company was sued by a buyer of a project with claims totaling Baht 6.2 million for damage suffered as a result of the Company consenting to a house extension carried out by another buyer (joint defendant). The Court of First Instance ordered the Company to pay the plaintiff Baht 0.2 million together with interest at a rate of 7.5% per annum. The Company is in the process of appealing the case. However, the management of the Company believes that the Company will not incur significant losses as a result of the case, and the Company has therefore not set aside provision for losses resulting from the litigation. d) The Company was sued by a buyer of a project with claims for damages totaling Baht 5.9 million on the grounds that the buyerâ&#x20AC;&#x2122;s house in the project had been burgled of a substantial amount of assets. The Court of Appeal ordered the Company and joint defendant to pay the plaintiff Baht 3.2 million, together with interest at a rate of 7.5% per annum. The Company has appealed to the Supreme Court, which is currently considering the case. However, the management of the Company believes that the Company will not incur significant losses as a result of the case. Therefore, the Company has not set aside provision for losses since the assets are private assets of the plaintiff of which the Company is unable to prove certain amounts. The Company needs the Supreme Court to consider it. e) A subsidiary, Estate Perfect Company Limited, has been sued by a contractor with a claim for payment of construction costs amounting to Baht 7.5 million. However, the subsidiary countersued the contractor for the return of moneys amounting to Baht 8.4 million, since the subsidiary paid for more construction than was delivered to the subsidiary by the contractor. The court dismissed the case and ordered the plaintiff to pay Baht 0.1 million to the subsidiary, but the plaintiff appealed and the Appeals Court reversed the decision of the Court of First Instance and ordered the subsidiary to pay the plaintiff Baht 6.7 million plus interest at a rate of 7.5% per annum from 30 August 2006 until settlement is made, but with interest calculated up to the date of the lawsuit not to exceed Baht 0.8 million. The subsidiary has appealed to the Supreme Court, which is currently considering the case. Nevertheless, the subsidiary has not set aside provision for losses resulting from this event, since the decision of the Appeals Court differed substantially from that of the Court of First Instance, and it can be seen as a decision made on a different factual basis from that of the Court of First Instance, which is the court that examined the evidence. The subsidiary therefore takes the view that it would be appropriate to hear the opinion of the Supreme Court, which will finalise the case. However, the management of the subsidiary believes that the subsidiary will suffer no significant loss as a result of this litigation.

259

38. Financial instruments 38.1 Financial risk management The financial instruments, as defined under Thai Accounting Standard No.107 â&#x20AC;&#x153;Financial Instruments: Disclosure and Presentationsâ&#x20AC;?, principally consist of the following. Financial assets

Cash and cash equivalents Trade and other receivables Notes receivable - land Advances to contractors Restricted deposits Loans to related companies Retention per agreement Other long-term investments Advances for purchases of land

Financial liabilities

Trade and other payables Notes payable - leasehold rights Notes payable Bills of exchange payable Short-term loans from related parties Deposits and cash received in advance Debentures Long-term loans Deposits and cash received in advance for sublease agreement

The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade and other receivables, notes receivable - land and loans. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade and other receivables, notes receivable - land and loans as stated in the statement of financial position. Interest rate risk The Company and its subsidiaries are exposed to interest rate risk relating primarily to their cash at banks, notes receivable - land, loans, notes payable - leasehold rights, notes payable, bills of exchange payable, debentures and loans. However, since most of the financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal. Significant financial assets and liabilities classified by type of interest rates are summarised in the table below on the maturity date or, the repricing date if this occurs before the maturity date.

260

(Unit: Million Baht) As at 31 December 2014 Consolidated financial statements Fixed interest rates Floating Within 1 - 5 Over interest Non-interest 1 year years 5 years rate bearing Total Interest rate

(% p.a.) Financial assets Cash and cash equivalents Trade and other receivables Notes receivable - land Advances to contractors Restricted deposits Retention per agreement Other long-term investments Advances for purchases of land

1.1 940.7 264.9 1,206.7

Financial liabilities Trade and other payables Notes payable - leasehold rights Notes payable 100.0 Bills of exchange payable Deposits and cash received in advance Debentures 8,978.7 4,600.0 Long-term loans Deposits and cash received in advance for sublease agreement 9,078.7 4,600.0

2,480.5 23.3 2,503.8

8.9 2,490.5 0.00 - 1.10 191.4 191.4 15.0 955.7 6.12 350.9 350.9 - 288.2 0.13 - 2.85 100.0 100.0 106.5 106.5 444.6 444.6 1,217.3 4,927.8

624.4 636.2 4,293.6

2,411.5 2,411.5 20.0 20.0 - 724.4 6.50 and MOR - 636.2 4.70 - 4.80 217.0 217.0 - 13,578.7 4.60 - 6.25 - 4,293.6 MLR

5,554.2

39.7 39.7 2,688.2 21,921.1

261

(Unit: Million Baht) As at 31 December 2013 Consolidated financial statements Fixed interest rates Floating NonWithin 1 - 5 Over interest interest 1 year years 5 years rate bearing Total

Interest rate

309.4 309.4

Financial liabilities Trade and other payables Notes payable - leasehold rights Notes payable Deposits and cash received in advance Debentures 4,299.2 6,948.9 Long-term loans Deposits and cash received in advance for sublease agreement 4,299.2 6,948.9

262

1,228.9 1.9 1,230.8

6.3 199.1 200.7 317.4 100.0 110.9 660.1 1,594.5

1,235.2 199.1 200.7 317.4 311.3 100.0 110.9 660.1 3,134.7

0.00 - 1.75 1.75 - 2.50 -

512.5 6,611.9

2,716.5 2,716.5 285.4 285.4 512.5 341.0 341.0 - 11,248.1 - 6,611.9

MOR 4.60 - 6.25 MLR

7,124.4

42.7 42.7 3,385.6 21,758.1

(Unit: Million Baht) As at 31 December 2014 Separate financial statements Fixed interest rates Floating NonWithin 1 - 5 Over interest interest 1 year years 5 years rate bearing Total

Interest rate

(% p.a.) Financial assets Cash and cash equivalents Trade and other receivables Notes receivable - land Advances to contractors Restricted deposits Loans to related companies Retention per agreement Other long-term investments Advances for purchases of land

1.1 940.7 250.0 1,191.8

Financial liabilities Trade and other payables Notes payable 100.0 Bills of exchange payable Short-term loan from related party Deposits and cash received in advance Debentures 8,978.7 4,600.0 Long-term loans Deposits and cash received in advance for sublease agreement 9,078.7 4,600.0

2,065.8 0.7 3,895.2 5,961.7

11.6 146.5 15.0 313.1 100.0 106.5 370.1 1,062.8

2,078.5 146.5 955.7 313.1 250.7 3,895.2 100.0 106.5 370.1 8,216.3

0.13 - 1.10 6.12 0.13 - 2.85 5.02 - 5.24 -

280.5 636.2 175.0 2,533.3

1,253.2 1,253.2 380.5 6.50 and MOR 636.2 4.70 - 4.80 175.0 7.38 152.5 152.5 - 13,578.7 4.60 - 6.25 - 2,533.3 MLR

3,625.0

39.7 39.7 1,445.4 18,749.1

263

(Unit: Million Baht) As at 31 December 2013 Separate financial statements Fixed interest rates Floating NonWithin 1 - 5 Over interest interest 1 year years 5 years rate bearing

Total Interest rate

23.8 23.8

Financial liabilities Trade and other payables Notes payable Short-term loan from related party Deposits and cash received in advance Debentures 4,299.2 6,948.9 Long-term loans Deposits and cash received in advance for sublease agreement 4,299.2 6,948.9

264

799.6 1.7 3,456.3 4,257.6

2.2 99.9 27.5 158.1 100.0 110.9 486.9 985.5

801.8 0.13 - 1.75 99.9 27.5 158.1 25.5 1.75 3,456.3 5.10 - 5.42 100.0 110.9 486.9 5,266.9

187.8 75.0 3,742.5

1,136.8 1,136.8 187.8 MOR 75.0 7.38 85.6 85.6 - 11,248.1 4.60 - 6.25 - 3,742.5 MLR

4,005.3

42.7 42.7 1,265.1 16,518.5

Foreign currency risk The Company’s exposure to foreign currency risk arises from investments in overseas subsidiaries which were unhedged. In addition, a subsidiary has entered into forward exchange contracts for the purpose of speculation. The forward contracts mature within one year. Details are as follows: Foreign currency

Bought amount

Baht

(Million) 722

Foreign currency

Baht

Bought amount

(Million) 579

As at 31 December 2014 Contractual exchange rate Bought

(JPY per 1 Baht) 3.3380 - 3.5850 As at 31 December 2013 Contractual exchange rate Bought

(JPY per 1 Baht) 3.0900 - 3.1440

Contractual maturity date

30 September and 28 December 2015

Contractual maturity date

30 September and 26 December 2014

38.2 Fair value of financial instruments Since the majority of the financial assets and liabilities are short-term or have interest rates close to the market rates, the fair values of these financial assets and liabilities are not expected to differ materially from the amounts presented in the statement of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using and appropriate valuation technique, depending on the nature of the instrument.

39. Capital management

The primary objective of the Company’s capital management is to ensure that it has appropriate capital structure in order to support its business and maximise shareholder value. As at 31 December 2014, the Group’s debt-to-equity ratio was 2.47:1 (2013: 2.55:1) and the Company’s was 2.31:1 (2013: 2.12:1).

265

40. Events after the reporting period 40.1 On 25 February 2015, a meeting of Board of Directors of We Retail Public Company Limited (“We Retail”) passed the following significant resolutions: a) Approved the allocation of 1,267,535,714 ordinary shares with a par value of Baht 1.05 to be sold to its existing shareholders (rights offering) in a ratio of 1 new share for every 1 existing share, at a price of Baht 1.10 each. b) Approved the allocation of 2,000,000,000 ordinary shares with a par value of Baht 1.05 each, and the remainder of the ordinary shares discussed in a), to be sold by private placement to unrelated parties in a single or multiple tranches, at prices which is not less than 90% of the market price. 40.2 On 26 February 2015, a meeting of the Company’s Board of Directors passed the following significant resolutions: c) Approved a decrease in the registered share capital from Baht 10,737,610,610 to Baht 5,960,980,722 by canceling 4,776,629,888 unissued ordinary shares with a par value of Baht 1 each to reserve for the tender offers for all shares of TPROP and GRAND and the adjustment of the exercise rights of the holders of warrants (PF-W3). d) Approved a Baht 1,939,019,278 increase in the registered share capital, from Baht 5,960,980,722 to Baht 7,900,000,000, through the issue of 1,939,019,278 ordinary shares with a par value of Baht 1 each. e) Approved the allocation of up to 1,927,650,552 ordinary shares with a par value of Baht 1, with these shares to be allocated to the existing shareholders (rights offering) in a ratio of 1 new share for every 3 existing shares at a price of Baht 1 each, to be reserved for the tender offer for all shares of GRAND, and with up to 11,368,726 ordinary shares with a par value of Baht 1 to be reserved for the adjustment of the exercise rights of the holders of warrants (PF-W3). Fractional shares will be ignored. f) Approved bank loan facilities of Baht 2,000 million, to accommodate the acquisition of the business of GRAND. g) Approved the issue and offer of up to Baht 12,000 million of debentures with tenors of not more than 5 years. h) Approved the proposal of a dividend payment of Baht 0.044 per share, totaling Baht 254.4 million, in respect of the year 2014 operating results

41. Approval of financial statements

These financial statements were authorised for issue by the Company’s Board of Directors on 26 February 2015.

266

THE BOARD OF DIRECTORS’ RESPONSIBILITIES FOR FINANCIAL REPORTS Property Perfect Public Company Limited’s and subsidiaries’ financial statements are prepared in compliance with accounting standard stipulated in the Accounting Professions Act B.E.2547, presented in accordance with the requirements in the Department of Business Development’s announcement on 14 September 2001 regarding in the Accounting ACT.B.E.2543, and adjusts accounting practices to be in line with the Federation of Accounting Professions Notification 9/2007, 38/2007 and 62/2007 concerning the accounting standard. The Board of Directors has appointed the Audit Committee comprising non-executive directors to take responsible for financial reports to follow the account standard and related regulators, disclose adequate and on-time information, and have internal control system to supervise internal control activities and the Audit Committee’s Opinions in the Audit Committee’s reports shown in the annual report The Board of Directors takes responsible for Property Perfect’s and its subsidiaries’ financial reports prepared to ensure that financial position, revenue, expense and cash flow are presented accurately and reasonably. The Board of Directors prepares accurate and complete accounting records to maintain assets, and internal control system to prevent fraudulent irregularities activities. The Board of Directors has selected the appropriated and constantly practical accounting policy in preparing the financial reports to reflect the company’s actual performance in compliance with the Generally Accepted Accounting principles and adequate information disclosure in notes to financial statements. Auditor expresses opinions on Property Perfect’s and subsidiaries’ financial statements in auditors’ report.

Dr.Tawatchai Nakata Chairman

Chainid Adhyanasakul Chief Executive Officer

267

AUDIT COMMITTEE REPORT 2014 Dear valued shareholders Property Perfect Public Company Limited’s Audit Committee comprises three independent directors – having Mr.Krish Follett as Chairman, and Dr. Somsak Toruksa and Dr. Thamnoon Ananthothai as directors. Miss Duangporn Roemyindi, director of the internal audit office, was appointed the committee’s secretary. In 2014, the Audit Committee followed through the Audit Committee Charter, which was endorsed by the Board. It organized 8 meetings to review financial information, connected transactions between the Company and subsidiaries affiliates and related companies and the performance of the internal audit office. It had 1 meeting to discussions with the auditor for the exchange of views on the Company’s internal control and accounting. The Audit Committee’s major activities can be summarized as below: 1. To review quarterly and yearly financial statements, and yearly consolidated financial statements for the year 2014. The Audit Committee reviewed the financial statements, every time with the presence of executives for explanatory purposes. It also had 1 meeting with the auditor, for an updated opinion on the Company’s internal control and accounting, to ensure that the financial statements were prepared appropriately, and in compliance with the Generally Accepted Accounting Principles and other related regulations. The committee also has duty to assure accounting system’s accuracy and reliability and sufficient and on-time information disclosure in financial statements to benefit investors and financial statements users in making investment decision. All paper document involved in the reviews of financial statements and the internal control was completely stored, for examination of all involved. 2. To review connected transactions The Audit Committee reviewed the connected transactions of the Company, subsidiaries, joint ventures and related companies, to ensure that the Company took into account the necessity and appropriateness of such connected transactions and put the Company’s interests as the top priority. It ensures that the transactions comply with the specified criteria and are properly and sufficiently disclosed. 3. To review risk management The Audit Committee comprehensively reviewed the enterprise risk management efficiency, taking into account reports and explanation from the Risk Management Committee through regular opinion exchange with the Risk Management Committee. The Audit Committee suggested the Company put emphasis on key possible risks such as a decline in domestic consumption, an increase in interest rates, and the downturn of global economy that might affect the Company’s hotel investment overseas. This was to ensure that the Company maintains risks at acceptable levels and achieves business goals. The Audit Committee also advised the internal control unit on the upgrade of its plan in line with the Company’s risk management, to ensure that the internal control covers enterprise risks - a key element to pave way for the Company’s achievements. 4. To review good governance issues Audit Committee ensured that the Company’s information disclosure is in line with the Securities and Exchange Act 2008 . and other laws related to the Company’s business operations, for the confidence among shareholders and investors. 5. To review evaluation of internal control system Audit Committee reviews in the way of COSO as to whether the Company’s internal control system is appropriate, to achieves its objectives in using resources efficiently and effectively, and has a preventive system to reduce mistakes, damages and deplete the Company’s resources as well as whether the financial statements is reliable. The committee also reviews the auditor’s comments on the internal control: the CEO and relevant executives were summoned for more information and suggested solutions. The committee monitors progress in the Company’s reactions to the auditor’s suggestions. During the year, the committee advised the Company to undertake land transactions in writing.

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6. To review internal audit The Audit Committee endorsed the internal control unit’s annual risk-based plan; recommended additional system analysis techniques to ensure added value of annual audits; acknowledged the annual 2014 internal audit assessment report; produced extra remarks on internal control improvement; and ensured the efficient and effective internal audit for acceptable risks and changing environment. Audit Committee ensured that the Company improved its operations in line with suggestions on significant issues stated in the internal audit assessment report. Audit Committee also devised plans for the transformation from operational audit approach to risk-based audit approach, to come up with efficient and effective advice for the management. It also evaluates the performance of the Internal Control Office director, to ensure his independence and compliance to the plan and professional requirements. 7. To review the Company’s monitoring and operating performance evaluation system Audit Committee reviews the Company’s performance to ensure that the Company follows the targets and adjusts operation to be accordance with the changed situation. The committee supports the Company to determine clearer performance evaluation and indicators and enhance the internal control become a part of normal practice of management. 8. To conduct self-assessment Audit Committee carried out self-assessment in many aspects including the number of meetings, scope of power, internal control, financial reporting, compliance to rules and regulations, coordination with the auditor, the supervision and improvement of internal control, in order to improve its operations and reporting to the Board. 9. To screen auditor Audit Committee selected the auditor upon on the auditor’s independence and defined the appropriate fee. The decision was forwarded to the Board and later submitted to the shareholder meeting for approval. E.Y. Office Limited was appointed as the auditor for year 2015 10. To advise and give recommendations to the executive committee Audit Committee examined and gave advice to the executive committee on finance, accounting and legal, to assure that the Company achieves the designated business goals. The Company was also advised to come up with a succession plan. Audit Committee constantly reports resolutions of all meetings to the Board of Directors, independently practices assigned tasks on behalf of the Audit Committee with knowledge and competence, and gives suggestions straightly and appropriately for interests of the Company, shareholders and other stakeholders.

(Mr. Krish Follett) Chairman of the Audit Committee 26 February 2015

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AUDITOR FEE ACCURACY SANCTIFICATION FORM The fiscal year end on 31 December 2014 Item

Payer

Auditor

Fee (Baht)

Audit Fee

1 2 3 4 5 6 7 8 9 10 11 12

Property Perfect Public Company Limited Estate Perfect Co.,Ltd. Perfect Sport Club Co.,Ltd. Bright Development Bangkok Co.,Ltd. Centre Point Shopping Mall Co.,Ltd. Residence Number Nine Co.,Ltd. U & I Construction Bangkok Co.,Ltd. Perfect Prefab Co.,Ltd. Uniloft Service (Thailand) Co.,Ltd. We Retail Public Company Limited Chiang Mai Development Co., Ltd. Mariya Stuff Co., Ltd. Total fee

EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited EY Office Limited

2,000,000 600,000 100,000 400,000 120,000 220,000 250,000 120,000 80,000 880,000 100,000 80,000 4,950,000

The above information is Accurate. I certify there is no other service I know of that the company and subsidiaries awarded to me, my auditing firm, and individuals or companies connected to me. Inaccurate. Note: ……………………………………………………………………………………………….……………… ……………………………………………………………………………………………………………………………… To improve the above information (if any), I affirm the accuracy of all information in this form that shows the audit fee and other service fee that the company and subsidiaries pay to me, my auditing firm, and individuals or companies connected to me

(Supachai Phanyawattano) EY Office Limited (Formerly known as Ernst & Young Office Limited) Auditor of Property Perfect Public Company Limited

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