:: Annual Report 2006/2007 ::

Contents Pages General Information Corporate Information General Information of the Companies that Have Shareholding up to 10% Summery of Financial Information of the Company Consolidated Financial Statement Financial Ratio of the Company and its Subsidiaries The Board of Directors没 Responsibility to Financial Report Business Types Business Operation Overview Revenue Structure Main Development of the Company Audit Committee Report Board of Directors, Executive Committee and Managements of Tanayong Risk Factors Shareholding Structure Shareholders Dividend Payment Policies Management Management Structure Procurement and Selection Method for Appointment of Directors and Managements Management Remunerations and Others Remunerations Corporate Governance Use of Inside Information Internal Control Related Company Transactions Inter-Related Transactions of Year 2006 Financial Status and Operational Results Explanation and Analysis Operational Overview in the Past3 Years Operational Results Overview Financial Status of the Company and Its Subsidiaries The Operational Results of the Company and Its Subsidiaries Financial Statement Report of Independent Auditor Consolidated and Separate Financial Statement Audit Remunerations Note to Consolidated Financial Statement References

99 100-114

115 116-121 122-123 124-130

131-132

133-185

186

General Information Company Information Tanayong Public Company Limited has operated Real Estate Development as the main business, which head office address is; 21 Soi Choei Phuang, Viphavadi-Rangsit Road, Jomphol, Jatujak, Bangkok. The public company registration number is 0107536000421. Telephone 0-2273-8511-15 Fax. 0-2273-8516 Homepage www.tanayong.co.th

General information of the companies that have shareholding up to 10% Company Names

Business Type

1. Dnal Company Limited

Office Building for rent

2. Tanayong Food and Beverage Company Limited.

Restaurant

3. Yongsu Company Limited.

Serviced Apartment for rent

4. Thana City Golf & Country Club Company Limited.

Sport and Recreation Operation and Management

5. Siam Paging and Communication Company Limited 6. Sampaopetch Company Limited

7. Tanayong Property Management Company Limited 8. Muengthong Apartment Company Limited 9. Tanayong International Company Limited 10. Golden Island (Thailand) Company Limited 11. Saraburi Property Company Limited 12. Changklan Way Company Limited

Head Office Address 21 Soi Choei Phuang, Viphavadi-Rungsit Road, Jomphol, Jatujak, Tel. 0-2273-8511-15 Fax. 0-2273-8516 100-100/1 Moo 4 Bangna-Trad Road Km.14 Bangchalong, Bangplee, Samuthprakarn Tel. 0-2336-1938 Fax. 0-2336-1985 21Soi Choei Phuang, Viphavadi-Rangsit Road, Jomphol, Jatujak, Tel. 0-2273-8511-15 Fax. 0-2273-8516

Km.14 Bangchalong, Bangplee, Samuthprakarn Tel. 0-2336-1938 Fax. 0-2336-1985 1091/290 New Petchburi 21 Soi Choei Phuang, Viphavadi-Rungsit Landlord Road, Jomphol, Jatujak, Tel. 0-2273 851115 Fax. 0-2273-8516 100-100/1 Moo 4 Bangna-Trad Road Real Estate Km.14 Bangchalong, Bangplee, Development Samuthprakarn Tel. 0-2336-1938 Fax. 0-2336-1985 Project Management 100-100/1 Moo 4 Bangna-Trad Road Km.14 Bangchalong, Bangplee, Samuthprakarn Tel. 0-2336-1938 Fax. 0-2336-1985 50/492 Moo 6 Baan Mai, Pak Kred, Hotel Nonthaburi Tel. 0-2503-2062 Fax. 0-2503-2061 Investor Company P.O. BOX 258, FIRST HOME TOWER BRISH-AMERICAN CENTER, CAYMAN ISLANDS. Restaurant 175 Basement/1 South Sathorn Road, Thoongmahamek, Sathorn Bangkok. Real Estate Development 100-100/1 Moo 4 Bangna-Trad Road Km.14 Bangchalong, Bangplee, Samuthprakarn Tel. 0-2336-1938 Fax. 0-2336-1985 Hotel 199/42 Chang Klan Road, Tambol Chang Klan, Amphur Mueng, Chiangmai Tel. 053-270240 Fax. 053-270-240

Paid-up Capital

% of Shareholding

50,000,000

100

1,000,000

100

234,000,000

100

10,000,000

100

5,000,000

100

1,000,000

100

1,000,000

100

433,500,000

100

25,000

100

130,000,000

100,000,000

250,000,000

15.15

SUMMARY OF FINANCIAL INFORMATION OF THE COMPANY (Unit : Million THB.) 2007

2006

2005

3,519

4,408

3,542

102

107

Net profits

26,215

(450)

(2,601)

Total assets

6,945

6,792

56,300

Total liabilities

5,001

35,458

80,973

Shareholder’s equity

1,944

(28,666)

(24,672)

Earnings per share (Baht per share)

9.22

(0.84)

(4.88)

Net book value (Baht per share)

0.68

(53.75)

(46.26)

744.96

(10.21)

(73.43)

1,348.51

1.57

10.54

377.47

(6.63)

(4.62)

2007

2006

2005

3,505

8,347

480

Net profits

26,215

(450)

(2,601)

Total assets

6,843

7,404

12,690

Total liabilities

4,900

36,070

40,771

Shareholders’ equity

1,944

(28,666)

(28,082)

Earnings per share (Baht per share)

9.22

(0.84)

(4.88)

Net book value (Baht per share)

0.68

(53.75)

(52.65)

747.93

(5.39)

(541.88)

1,348.51

1.57

9.26

383.09

(6.08)

(20.50)

Consolidated Financial Statement Total Revenues Gross Profit

Par value (Baht per share)

Ratio of net profit : Total revenues (%) Ratio of profit : Shareholders’ equity (%) Ratio of profit : Total assets (%)

Separate Financial Statement Total Revenues Gross profit

Par value (Baht per share)

Ratio of net profit : Total revenues (%) Ratio of profit : Shareholders’ equity (%) Ratio of profit : Total assets (%)

Page 98

The Board of Directors没 Responsibility to Financial Report The Board of Directors of Tanayong Public Company Limited is in charged of the Company and its subsidiaries financial reports and statements which have been prepared with appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimations including adequate information disclosed to obtain the reports that comply with Thailand Generally Accepted Accounting Principles. The Board of Directors also set up and maintained an effective internal audit system to ensure that the Company and its subsidiaries keep accounting records with reasonable accuracy, completeness and adequate to protect the assets and prevent them from being under substantial irregularities. The Audit Committee, consists of non-executive directors, appointed by The Board of Directors to regulate the financial statements and the internal audit system. The opinions of the Audit Committee have been stated herein this Annual Report. The Board of Directors is of the opinion that the Company没s internal audit system is generally satisfactory and should enhance the creditability of the consolidated financial statements of the Company and its subsidiaries as of March 31, 2007

Mr. Keeree Kanjanapas Chairman

Mr. Kavin Kanjanapas Managing Director

Business Type During the year of 2005, there had been the changes of structure for Bangkok Mass Transits System Public Company Limited, United Bangkok Development Company Limited, Hwa Kay Thai (Thailand) Company Limited, Theppratarn Property Company Limited, The Exchange Square Company Limited, and Time Station Company Limited under the business rehabilitation plan, the Company will have to transfer these ordinary shares to settle debt with secured creditors, and creditors receiving settlement in accordance with original contracts for debt repayment. This will reduce the Group没s shareholding in Bangkok Mass Transit System PCL. to 1.86 percent, while all shares held in the other companies will be transferred. The Company has therefore excluded the financial statements of these companies from the consolidated financial statements since 1 June 2005. Thus, the business operation of Company and its subsidiaries have been as follows :

1. Business Related to Real Estate A. Real Estate Development Business The Company has developed the project in various types by own itself and emphasized on expansion any projects to various locations both in Bangkok and nearby for coverage the marketing and potential customer as each area, which, now, for example; on Bangna-Trad Road, Ladprao Road and Rachadumri Road, etc. Project Name

Operator

1. Thana City Bangna - Trad Rd. Km. 14 2. Thana Place, Ladprao and Kingkaew

Tanayong PCL.

3. The Royal Place 1 and 2 4. The Grand

Tanayong PCL. Tanayong PCL.

Tanayong PCL.

Project Type Land, Condominium, Single-Detached House,Townhouse for Sales and Golf Club Condominium, Single-Detached House and Commercial Building for sales Residential Condominium for rent Residential Condominium for rent

B. Property Investment To invest the developed project, Company will gain revenue from building space for rent. Project Name 1. TST Tower

Operator Dnal Co.,Ltd.

Project Type Office Building for rent

The Company has been being the sales representation to sall land and building for creditors accoroling to the rehabilitation plan

100

C. Hotel and Serviced Apartment To develop project as Hotel and Serviced Apartment, The Company will gain revenue from rooms and service charges. Project Name 1. Eastin Lakeside 2. Yongsu Apartment

Operator OperatorMuengthong Apartment Co., Ltd. Yongsu Co., Ltd.

Project Type Hotel Serviced Apartment

The Company has been being the sales-representative to sell land and property of Yongsu Apartment for creditors according to the rehabilitation plan. D. Contractor for National Housing Authority (NHA) in Baan Aur - Arthorn Project The Company was selected by Natioanal Housing Authority to co-operate and construct Baan Aur-Arthorn Project, which has been 3-4 Storey residential condominium with fully standard facilities and infrastructures. Project Name 1. NHA - Chonburi 2. NHA - Prajuabkirikhan (Hua-Hin 3) 3. NHA - Samuthprakarn (Bang Bor) 4. NHA - Saraburi (Kok Yae)

Operator Tanayong PCL. Tanayong PCL. Tanayong PCL. Tanayong PCL.

Project Type 3-4 storey condo 4 storey condo 4 storey condo 3 storey condo

2. Other Businesses The Company has emphasized on business related to properties development, for value added up in property project operated by the Company. Project Name 1. Tanayong Property Management Co., Ltd. 2. Thana City Golf and Country Club Co., Ltd.

Project Type Management of T S T Tower Management of Sport Club and Entertainment

101

Properties businesses development of The company and its subsidiaries, which was closed sales and have been on process at the present, as follows:1) Project in the past which was already sold, as of March 31, 2007 Details Project Name Location Project Type Units Total Land Area Land Ownership Investment Costs (MB) Sales/Leasing Price per Unit(MB) Costs of Project Sales (MB) Sales Progress value (MB) Percentage (%) Unit Transferred Unit Value (MB) Recognized Cumulative Revenue Details Project Name Location Project Type Units Total Land Area Land Ownership Investment Costs (MB) Grand Open Sales Sales / Leasing Price per Unit Costs of Project Sales (MB) Sales Progress value (MB) Percentage (%) Unit Transferred Unit Value Percentage (%) Recognized Cumulative Revenue

Projects 1. Prestige House I 2. The Royal Place 1 Bangna-Trad KM. 14 Soi Mahadlek Luang 1 Single-detached house with land 30 - Storey Residential Condoapprox 400 sq.wah minium for leasing 395 74 3 - 1 - 27 Rai 100 - 0 - 0 Rai Office of the Privy Purse Tanayong PCL 1,083.5 53.4 2.1-29.8 6.4 -13.1 1,157.2 608.1 1,157.2 608.1 100 100 395 74 1,157.2 608.1 1,157.2 608.1 Projects 3. The Royal Place 2 4. The Grand Soi Mahadlek Luang 2 Soi Mahadlek Luang 2 26 - Story Residential Condo- 25 - Story Residential Condo for minium for Leasing Leasing 315 312 3 - 1 - 75 Rai 1 - 3 - 88 Rai Office of The Privy Purse Office of The Privy Purse 801.7 684 October 1993 November 1993 1.6 - 6.4 1.3 - 9.8 802.8 701.7 802.8 701.7 100 100 315 312 802.8 701.7 100 100 802.8 701.7

Remark : The Royal Place 2 and the The Grand had been closed sales since October 2006. Besides the left unit had been short - term rental (The Royal Place 2 : 56 Units and The Grand : 26 Units)

102

Details

Projects

5. Land Inside Thana City 6. Land out Thana City Project Name Bangna-Trad KM. 14 (According the remarks) Location Land Bank Land Bank Project Type 4 4 Units 12 - 2 - 40 Rai 470 - 0 - 1 Rai Total Land Area Tanayong PCL Tanayong PCL Land Ownership 70.0 534.1 Investment Costs 313.7 1,172.9 Costs of Sales (MB) 313.7 1,172.9 Sales Progress value (MB) 100 100 Percentage (%) 4 4 Units Transferred (Units) 313.7 1,172.9 Value 313.7 1,172.9 Recognized cumulative Revenue Remark : Land outside Thana City are 2 Units in Rachadeva District, Samutprakarn 1 unit and Jorakae Bua , Bangkapi 1 unit

Project has been on sales process at the present setle debt. Land Bank, Land and Housing, and Residential Condo minium Condominium minium,, for sales //setle as of March 31, 2007 Details Project Name Location Project Type Units Total Land Area Land Ownership Investment Costs (MB) Sales/Leasing Price per unit / (MB) Costs of Sales (MB) Sales Progress Value (MB) Percentage (%) Units Transferred Unit Value (MB) Recognized cumulative Revenue

Thana City Projects on Bangna trad Road Km. 14 1.Townhouse (Beside Lake and Garden) Bangna-Trad KM.14 Townhouse (8 meters width each) 72 12 - 0 - 0 Rai Tanayong PCL 118.7 1.1 - 6.2 188.1 134.4 71.5 54 134.4 134.4

2. Prestige Prime Land

3. Prestige Condominium

Bangna-Trad KM.14 Land around Golf Court

Bangna-Trad KM.14 16 - Storey Residential Condo

123 106 - 0 - 0 Rai Tanayong PCL 172.9 3.8 - 23.2

340 24 - 0 - 0 Rai Tanayong PCL 1,169.8 0.3 - 12.5

1,223.5 970.2 79.30 91 970.2 970.2

993.9 979.3 98.5 338 979.3 979.3

103

Details Project Name Location Project Type

Unit Total Land Area Land Ownership Investment Costs (MB) Progress of Construction Invetsed amount (MB) Percentage (%) Grand Sales Opening Sales/Leasing Price per unit / (MB) Costs of Sales / Repaying Debt Project Sales Progress / Repaying Debt Total Value (MB) Percentage (%) Units Transferred to Repay Debt Total Unit Value Costs (MB) Sole / Repay Debt Recognized Accumulated Revenue (MB)

104

Thana City Project Bangna-Trad Road KM.14 5. Thana Place King Kawe 4. Nouvelle Condominium Bangna-Trad KM.14 Bangna-Trad KM.14 6-7 Storey Residential 17 â&#x20AC;&#x201C; Storey Residentail Condominium, Single House on Condominium total land 50 - 60 Sq.wah each 763 905 10 8 -0 - 90 Rai 25 - 0 - 0 Rai Tanayong PCL. Tanayong PCL. 615.7 1,026.1 615.7 / 988.6 / 37.5 100 0.5 - 4.4 1,353.1 / 33.3

100 0.3 - 2.8 740.2 / -

893.8 / 33.3 66.1 / 100

366.5 / 49.5 / -

750 / 7 893.8 / 33.3 893.8 / -

422 / 366.5 / 366.5 / -

Details Project Name Location Project Type Units Total Land Area Land Ownership Development and Construction Period

Thana City Project Bangna-Trad Road KM.14 6. Prestige House II 8. Californian 7. Prestige House III Bangna-Trad KM.14 Bangna-Trad KM.14 Bangna-Trad KM.14 Single-detached House Single-detached House Land Bank With Land With Land 85 288 63 73 - 0 - 0 Rai 130 - 0 - 0 Rai 30 - 1 - 25 Rai Tanayong PCL. Tanayong PCL. Tanayong PCL. 36 months 24 months 36 months October, 1992 October, 1993 October, 1992 September, 1995 September, 1995 September, 1995 144.4 242.2 41.5 144.4 / 119.9 / 122.3 41.5 / -

Investment Costs (MB) Progress of Construction Invested amount (MB) 100 Percentage (%) April,1990 Grand Sales Opening 5.3 - 12.0 Sales/Leasing Price per unit / (MB) 662.2 / Costs of Sales / Repaying Debt (MB) Project Sales Progress / Repaying Debt 315.3 / Total Value (MB) 47.6 / Percentage (%) Units Transferred to Repay Debt Total Unit 42 / Value Costs (MB) Sole / Repay 315.3 / Debt 100 / Percentage (%) Recognized all Amount Evenue Revenue Recognition: Before when Making Sale Agreement April 1, 1994 Recognized Revenue by Initial Revenue Recognition: After Payment not less than 20% of April 1, 1994 Value of Sales, will be Recorded. Recognized Accumulated 315.3 Revenue (MB) Remarks : March 26, 1996 - Title Deeds Classified January, 1990 - Permission Delivered March 28, 1995 - Permission Received

100 January,1991 3.0 - 5.1

100 December, 1991 1.2 - 4.7

512.1 / 331.9

161.4 / -

269.6 / 331.9 52.65 / 100

75.5 / 46.8 / -

81 / 123 32 / 269.6 / 331.9 75.5 / 100 / 100 100 / Recognized all Amount Evenue Recognized all Amount Evenue When Making Sale Agreement when Making Sale Agreement Recognized Revenue by Initial Recognized Revenue by Initial Payment not less than 20% of Payment not less than 20% of Value of Sales, will be Recorded. Value of Sales, will be Recorded. 269.6

75.5

March 26, 1996 January, 1990 March 28, 1995

105

Details Project Name Location Project Type Unit Total Land Area Land Ownership Development and Construction Period

Thana City Project Bangna-Trad Road KM.14 10.Thana Place /Lardprao 71 9. Townhouse (Habitat) Soi Lardprao 71 Bangna-Trad KM.14 9 Story Condominium and 3.5 Storey Commercial Building Commercial Building in Project 781 20 23 - 1 - 88 Rai 2 - 3 - 20 Rai Tanayong PCL. Tanayong PCL. 24 months 24 months October, 1993-September, 1995 Augus, 1993 - July, 1995 482.5 15.2

Investment Costs (MB) Construction Progress / Invested Costs 431.1 / 51.4 15.2 / (MB) 100 100 Percentage (%) February,1992 February,1991 Grand Sales Opening 0.4 - 2.5 1.2 - 1.6 Sales/Leasing Price per Unit / (MB) 628.2 / 48.2 24.7 / Costs of Sales / Repaying Debt (MB) Project Sales Progress / Repaying Debt 625.2 / 48.2 5.5 / Total Value (MB) 99.5 / 100 22.3 / Percentage (%) Units Transferred to Repay Debt 703 / 77 4/Total Unit 626.2 / 48.2 5.5 / Value Costs (MB) Sole / Repay Debt 100 / 100 100 / Percentage (%) Percentage of Completion Recognized all Amount Revenue Revenue Recognition: Before April Measurement When Making Sales Agreement 1, 1994 Percentage of Completion Recognized Revenue by Initial Revenue Recognition: After April Payment not less than 20% of Value Measured by Initial Payment not 1, 1994 less than 20% Related to Project of Sales, will be Recorded. Cost not less than 10%, will be Recorded. Recognized Accumulated 626.2 5.5 Revenue (MB) Remarks : January 4, 1996 July 26, 1995 - Title Deed Classified August 24,1992 January, 1990 - Permission Delivered February 21,1996 March 28, 1995 - Permission Received

106

Details

Thana City Project Bangna-Trad Road KM.14 11. Land Inside Thana City 12. Land Outside Thana City Bangna-Trad KM.14 (R1emarks) Land bank Land bank 26 8 -2 - 70 Rai 28 -1 - 66 Rai Tanayong PCL. Tanayong PCL. 896.1 94.8 2,234.0 20.9

Project Name Location Project Type Total Land Area Land Ownership Investment Costs (MB) Costs of Project Sales (MB) Project Sales Progress / Repaying Debt Total Value (MB) Percentage (%) Units Transferred to Repay Debt/ Total Unit Total Value (MB) Recognized Accumulated Revenue (MB) Remark : Land outside Thana City are 2 Unit, Rachadeva District, Samutprakarn.

-/12.9 -/1 -/12.9 -

107

Details

Thana City Project Bangna-Trad Road KM.14 13. Sport & Country Club Member 14. Golf Member Bangna-Trad KM.14 Bangna-Trad KM. 14 Sport - Entertainment Sport 85 981 57 - 7 - 31 Rai 280 - 0 - 6 Rai Tanayong PCL. Tanayong PCL. 1994 -1995 1994 - 1995 471 819 9.2 44.7 461.8 774.3

Project Name Location Project Type Units Total Land Area Land Ownership Construction Period Investment Costs (MB) - Cost of Land - Construction Cost Construction Progress / 471 819 Invested Costs (MB) 100 100 Percentage (%) 1994 - 1995 1994 - 1995 Grand Sales Opening 0.02 and 0.15 0.1 â&#x20AC;&#x201C; 2.5 Price / Sq.w (Membership) (MB) 3.9 374 Costs of Project Sales (MB) Project Sales Progress 3.9 374 Total Value (MB) 100 100 Percentage (%) Units Transferred 85 981 Membership 3.9 374 Total Value (MB) 100 100 Percentage (%) Revenue recognized when making Revenue recognized when making Revenue Recognition: Before membership contract membership contract April 1, 1994 Revenue recognized when making Revenue Recognition: After membership contract April 1, 1994 3.9 374 Recognized Accumulated Revenue (MB)

108

Procurement and Contractor Project to Construction for National Housing Authority As of March 31, 2007 Detail Project Name Location Project Type Units Land Total Area Land Ownership Investment Costs(MB) Recognized Accumulated Revenue (MB)

Project 1. NHA Chonburi, Najomtien 2. NHA Prajuabkirikhan Hua-Hin 3 Sukhumvit Road, Najomtien Petchakasem Road, Prajuabkirikhan 3 storey Residential Condominium 4storey Residential Condominium 4,598 units 1,008 units 151 - 3 - 24.0 Rai 22 - 0 - 17.50 Rai NHA NHA 1,931.2 423.4 303.6

Detail Project Name Location Project Type Units Total Land Area Land Ownership Investment Costs (MB) Recognised Accumulated Revenue (MB)

65.0

Project 3. NHA Samutprakarn Bang Bor 2 4. NHA Saraburi ( Kok Yae ) Paholyothin km.91 Kok Yae Parnvithi Road,(Klong Dan-Bang Bor) 4 storey Residential Condominium 3 storey Residential Condominium 2,442 units 1,536 Units 72 - 1 - 98.2 Rai 41 - 2 - 83.0 Rai NHA NHA 1,025.6 645.1 133.4

109

Office Building for Rent, Serviced Apartment Hotel and Condominium for Rent Project As of March 31, 2007 Detail Project Name Location Project Type Units Total Land Area Land Ownership Investment Costs (MB) Grand Opening Rental Price / unit Occupancy Rate

Detail Project Name Location Project Type Units Land Total Area Land Ownership Investment Costs (MB) Grand Opening Rental Price / Unit Occupancy Rate

Project 1.TST Tower Viphavadi-Rangsit Rd. 24 storey office building, opposite Thai Airway bldg. 15,771 sq.m. Dnal 442 March 1990 284 Baht/ sq.m. 80%

Project 3. Yongsu Service Apartment Sukhumvit 39 16 storey residential, Fully furnished and facilities. 56 12,040 sq.m. Yongsu 249 Nov. 1992 Whole building 1,600,000 B./Month 100%

Detail Project Name Location Project Type Units Total Land Area Land Ownership Investment Costs (MB) Grand Opening Rental Price / Uit Occupancy Rate

110

2. Eastin Lakeside Hotel Chaengwattana Rd. 3 - stars hotel 7 km. from Don Mueng Airport 143 31,793 sq.m. Bangkok Bank 442 April 1992 3,676 Baht/night/Unit 45%

Project 4. The Royal Place II Mahadlekluang 2 26 storey condominium near BTS Rachadumri 56 4,675.85 sq.m. Office of Pricy Purse 272.28 October 2006 460 Baht/ Month / sq.m. 0.25 %

5. The Grand Mahadlekluang 2 26 storey condominium near BTS Rachadumri 26 1,616 sq.m. Office of Pricy Purse 99.53 October 2006 353 Baht/ Month / sq.m. 12.36 %

Revenue Structure Revenue structure of the Company and its subsidiaries in the past of 3 years For year ended of March 31, 2007, classified by business type. 2006 - 2007 MB %

Revenue classified by Business Types Real Estate Cost Revenue from the Land Procurement of Low - Cost Residential Housing Revenue from Rental and Services Revenue from Hotel Share of Profit from Associated Companies

Share of Income from Investment in Subsidiary Conyo-nies Auvaitiy Tronsfer under Rehabilitation Plan Gain on Debt Restructuring per Rehabilitation Plan Gain on Roreign Exchanged Gain on Foreign of Assets for Debt Settlement Gain on Sales of Invesment in Associated Company Interests Income Total

2005 - 2006 % MB

29.8

0.85

8.6

0.20

502.1 74.5 35.2 -

14.27 2.12 1.00 -

79.9 39.6 14.6

1.81 0.90 0.33

1,597.4 1,049.7 25.6 105.0 100.1

45.39 29.82 0.73 2.98 2.84 100

2004 - 2005 MB % 25.6

0.77

2,562.4 72.30 286.4 8.10 179.0 5.10 16.7 0.50 -

325.5 1,255.8 28.49 5.2 119.1 2.70 140.8 183.8 4.17 4,407.7 100 3,541.6

9.20 0.10 4.00 100

2,706.3 61.40

Revenue structure of the Company and its subsidiaries, classified by business type during the past of 3 years. For year ended of March 31, 2005 - 2007. Revenue Type

Operated By

%of Shareholding

2006 - 2007 MB %

2005 - 2006 MB %

2004 - 2005 MB %

Real Estate Cost

- Thana City Project Tanayong PCL. - Thana Place KingKaew Tanayong PCL. Project Total

Revenue Type

Operated By

Revenue from the Land Land Procurement for Low- Cost pesidential Housing projects - Najomtien Tanayong PCL. - Bangbor 2 Tanayong PCL. - Hua Hin 3 Tanayong PCL. Total

100 100

29.8 -

0.85 -

8.6 -

0.20 -

14.1 11.5

0.40 0.37

100

29.8

0.85

8.6

0.20

25.6

0.77

2006 - 2007 %of Shareholding MB %

100 100 100 100

303.6 8.63 133.5 3.79 65.0 1.85 502.1 14.27

2005 - 2006 MB %

2004 - 2005 MB %

111

Revenue Type Revenue from the BTS Fares

Revenue Type

Operated By Bangkok Mass Transit System Public Company Limited

Operated By

Revenue from Rental and Service - Dnal Co. Ltd - TST Tower - Yongsu - Yongsu Appartment Co., Ltd. - Sport and Recreation - Thana City Golf & Country Club Club Co.,Ltd - Tanayong - Project Management Property Co., Ltd. Management Co., Ltd. - Muengthong - Space Rental Apartment Co., Ltd. - Bangkok - BTS Skytrain Mass Transits System PCL. Total Muengthong Revenue from Hotel Apartment - Eastin Lakeside Co., Ltd. Hotel Total

112

%of Shareholding

1.86

2006 - 2007 MB %

%of 2006 - 2007 Shareholding MB %

2005 - 2006 MB %

2005 - 2006 % MB

2004 - 2005 % MB

2,562.4

72.3

2004 - 2005 MB %

100 100

48.6 13.1

1.38 0.37

44.0 21.8

1 0.49

36.3 22.5

1.0 0.6

100

2.9

0.08

3.4

0.08

4.1

0.2

100

5.3

0.15

4.7

0.10

4.8

0.1

100

4.6

0.14

6.0

0.14

3.9

0.1

33.38

74.5

2.12

79.9

1.81

214.8 286.4

6.1 8.1

100

35.2 35.2

1.00 1.00

39.6 39.6

0.90 0.90

49.0 179.0

1.4 5.1

Revenue Type

Operated By

%of Shareholding

Interest incomes - Deposit wite Bank and Financial Instruments - Loan to Subsidiaries awaiting Transfer as per Rehabilitation Plan - Loan to related companies - Loaning to Other Companies Total

Revenue Type

Operated By

Profits from Rate gain on foreign Exchanged Shar of Profits from Associated Corporation Shar of income from investment in Subsidiary Companies awaiting Transfer under Rehabilitation plan qain on Transfer of Profit Assets for debt aettbment qain on debt Restructuring per Rehabilitation Plan qain on debt of invesment in associated companies Other Income Total revenue

Rate of Increasing and Decreasing of Revenue from Sales (Percentage)

2006 - 2007 MB %

2005 - 2006 MB %

2004 - 2005 MB %

0.2

2.9

0.06

0.02 0.1

4.9

0.14

99.8

2.83

0.3

0.01

105.5

2.98

119.1 2.70

1.2 5.2

118.5 2.69

0.4

0.01

%of Shareholding -

2006 - 2007

2005 - 2006

2004 - 2005

MB -

MB 325.5

% 9.2

14.6

0.33

16.7

0.5

2,706.3 61.40

1,597.4

45.39 1,255.8 28.49

1,049.7 29.82

25.6 100.1 3591.4

0.73 2.84 100

246.5

183.8 4,407.7

4.17 100

(66.4)

140.8 4.0 3,541.6 100

101.57

113

The Main Development of the Company 18 August 2003

Yongsu Co., Ltd. the one of creditor, had submited the petition for the business rehabilitation to The Central Bankruptcy Court and the Company proposed itself to be the planner. 30 December 2003 The Central Bankruptcy Court had announced the business rehabilitation by appointing Tanayong Public Company Limited as the temporary management. 15 March 2004 The Central Bankruptcy Court had the order to appoint Tanayong Public Company Limited, to be the planner. 31 March 2005 The meeting of creditors had the resolution to accept rehabilitation plan. 30 May 2005 The Central Bankruptcy Court had agreed with the business rehabilitation plan and appoint Tanayong Public Company Limited 7 July 2005 To perfrom accordance the rehabilitation plan, The Central Bankruptcy Court has agreed with the company to reduce the capital by amendment of the prospectus memorandum as no.4, from capital of 4,684,557,000 Baht, reduce to 3,667,468,400 Baht and divided into 367,746,840 shares. 26 July 2005 By the order of The Central Bankruptcy Court, the Company, head office had been changed from 100-100/1 Moo 4 Bangna-Trad road Km14, Bangchalong, Bangplee, Samuthprakarn, to new address; 21 Soi Choei Phuang, ViphavadiRangsit Rd., Jomphol, Jatujak, Bangkok 9 August 2005 By the order of The Central Bankruptcy Court, the Company had reduced par value of shares from 10 Baht to 1 Baht 16 September 2005 By the order of The Central Bankruptcy Court, allowed to reduce the capital, the company had changed the paid up capital from 3,677,468,400 Baht to the capital of 533,333,333 Baht and paid up 533,333,333 Baht. 6 October 2005 By the order of The Central Bankruptcy Court allowed the company to increase the capital another 4,800,000,000 Baht, from the old capital of 533,333,333 Baht that divided into 533,333,333 shares, to the new capital of 5,333,333,333 Baht that divided into 5,333,333,333 shares with 1 Baht each. 28 February 2006 The meeting of creditors had had the resolution to accept the amendment of the rehabilitation plan. 24 April 2006 The Central Bankruptcy Court had agreed with the amendment of the rehabilitation plan. 14 November 2006 The Central Bankruptcy Court had ordered to terminate the company from the business rehabilitation plan. 28 December 2006 SET had allowed the aceurities of the company to be traded the securities of the company in the real estate business section.

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Audit Committee Report To The Board of Directors, Tanayong Public Company Limited The Audit Committee of Tanayong Public Company Limited comprises three independent directors; Lt.Gen. Phisal Thepsithar, Chairman of Audit Committee, Dr.Anat Arbhabhirama and Pol.Maj.Gen. Vara Ieammongkol, Audit Committee, and Mrs. Duangkamol Chaichanakajorn, as Secretary to Audit Committee. They has been appointed by the Board of Directors of the company on December 18, 2006 with their responsibilities as following; 1. The Audit Committee meeting has been held 3 times. 2. The Audit Committee has reviewed quarterly and annual financial statements of the company in both adequate disclosure of the information and the accuracy of the reports. The Audit Committee found no issues that may lead to the incompliance to the General Accepted Accounting Principles. 3. The Audit Committee had exchanged their opinions and observations in consolidated and separated financial statements, as well as, the sufficiency of internal controlling system with the auditor. 4. The Audit Committee has attended the corporate trainings and related fields by various institutions.

(Lt.Gen Phisal Thepsithar) Chairman of Audit Committee 11 June 2007

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116

Age (Years)

1. Mr. Keeree Karnjanapas/ 57 Chairman

Name-Surname Position -

Highest Education

Shareholding Family Working Experience During the Past of 5 Years in the Relationship Name of Company Position Period Company with Executives 68,819,410 Father of Tanayong PCL. 2006 - present Chairman Mr. kavin Tanayong PCL. Managing Director 1968 - 2007 Muengthong Apartment Co., Ltd. Kanjanapas 1988 - Present Director Hwa Kay Thai (Thailand) Co., Ltd. Managing Director 1989 - 2006 United Bangkok Develompent Co., Ltd. 1989 - Present Director Saraburi Property Co., Ltd. 1990 - Present Director Siampaging and Communication Director Co., Ltd. Tanayong Property Management Director Co., Ltd. Theppratarn Property Co., Ltd. 1991 - Present Director Dnal Co., Ltd. Director Thana City Golf And Country Club Co., Director Ltd. Tanayong Food and Beverage Co., Ltd. 1992 - Present Director The Exchange Square Co., Ltd. Director Bangkok Mass Transit System PCL. Director Muengthong Lakeside Restaurant 1993 - Present Director Co., Ltd. Sampaopetch Co., Ltd. 2001 - Present Director Time Regency Co., Ltd. Director

Details of Directors, Executive Committees, and Managements of Tanayong As of March 31, 2007

117

Age (Years)

2. Mr. Kavin Kanjanapas / 32 Managing Director 3. Mr. Sutham Siritipsakorn 51 / Deputy Managing Director

Name-Surname Position

B.Sci(Arch) (1st Honorary Degree) Chulalongkorn University

Highest Education

1985 - 1988 1979 - 1985

1988 - 1990

1980 - 1993

Senior Vice President Tanayong PCL. Hwa Kay Thai (Thailand) Co., Ltd. Executive Director Hwa Kay Thei Holding Hong Kong Co., Ltd. Executive Director Tao Ho Design Architect Co., Ltd. Hong Kong Director Architect 61 Singapore Architect

Family Shareholding Working Experience During the Past of 5 Years Relationship in the Position Name of Company Period Company with Executives Son of Mr. Keree 2006 - Present Executive Director VGI Global Media Co., Ltd. Kanjanapas Tanayong PCL. 1999 - Present Managing Director Tanayong PCL. 2006 - Present Deputy Managing Director VGI Global Media Co., Ltd. Project Director Present Sutham Architect and Associate Co., Ltd. Managing Director 1994 - 1999 Assistance Managing Singha Land PCL. Director Siam Board Casting and Communication Executive Director Co., Ltd. Bangkok Mass Transit System PCL. 1992 - 1993 Vice President

Details of Directors, Executive Committees, and Managements of Tanayong As of March 31, 2007

118

45 MBA, Thammasart University

68 MBA of Finance NIDA

5. Mr. Kom Panomreongsak/ Director

Age Highest (Years) Education

4. Mr. Rangsin Kritalug Deputy Managing Director

Name-Surname Position

Family Shareholding Working Experience During the Past of 5 Years Relationship in the Position Name of Company Period Company with Executives 2006 - Present Deputy Managing Tanayong PCL. Director 1997 - 2006 Tanayong PCL. Director 1997- Present Director Theppratarn Property Co., Ltd. The Exchange Square Co., Ltd. Director 1998 - Present Director Thana City Golf and Country Club Co., Ltd 2001 - Present Director United Bangkok Development Co., Ltd. Saraburi Property Co., Ltd. Director Tanayong Food and Beverage Co., Ltd. Director Sampaopetch Co., Ltd. Director Muengthong Lakeside Restaurant Director Co., Ltd. Time Station Co., Ltd. Director Tanayong Property Management Director Co., Ltd. Yongsu Co., Ltd. Director Dnal Co., Ltd. Director 2004 - 2006 Hwa Kay Thai (Thailand) Co., Ltd. Director 2001 - Present Director Tanayong PCL. Muengthong Apartment Co., Ltd. 2001 - 2006 Hwa Kay Thai (Thailand) Co., Ltd. Director

Details of Directors, Executive Committees, and Managements of Tanayong As of March 31, 2007

119

Name-Surname Position

Age (Years)

Highest Education

Family Shareholding Working Experience During the Past of 5 Years Relationship in the Period Position Name of Company Company with Executives Tanayong PCL. Director Present 6. Mr. Kong Chi Keung / 32 BA(Honorary VGI Global Media Co., Ltd. 1999 - Present Director Degree) University Director of Greenwich, UK Tanayong PCL. Director Present 7. Dr. Paul Y.L. Tong / 66 B.Sci Hip Hing Construction Co., Ltd. Managing Director M.Sci Director New World Service Management Director PhD.(Eng) Co., Ltd. Bangkok Mass Transit System PCL. Chairman Parsons Brinkerhoff Asia Pacific Chairman Chongbang Holdings Limited Director Tanayong PCL. Director Present 46 Master Gegree 8. Mr. Abdulhakeem Dubai Ventures 2000 â&#x20AC;&#x201C; Present CEO Urban&Regional Kamkar Abdulhussain Ali Planning, Graduate Director School of Public and International Affairs, From University of Pittsburgh,USA

Details of Directors, Executive Committees, and Managements of Tanayong As of March 31, 2007

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13. Pol.Maj.Gen Vara Ieammongkol Audit Committee & Independent Committee

Name-Surname Position

72 B.Sci Chulalongkorn Royal Military Academy

500,000

Tanayong PCL. 1998 – Present Audit Committee Independent Committee

Family Age Highest Education Shareholding Working Experience During the Past of 5 Years Relationship in the (Years) Position Period Company with Executives Name of Company BA (Econ) Tanayong PCL. Director Present 48 (Honorary Degree) 9. Mr. Dato’ Amin Rafie DIG Asia Sdn, Bhd. Managing Director MBA, City Othman / Director Mayban Invesment Sdn, Bhd. CEO University of PJB Capital Sdn Bhd. Managing Director London, UK Smith Zain Securities Executive Director Rashid Hussain Asset Management Director Mattra Berhad General Manager Tanayong PCL. Director Present 10. Mr. Cheung Che Kin / 39 Green Salt Group Limited President / CEO Director Oinghai Province Salt Industry Limited Chairman Tanayong PCL. 2000 – Present Chairman of Audit 11. Lt.Gen.Phisal Thepsitthar 75 MBA,Thammasart 500,000 Independent Committee University Chairman of Audit PhD.(Eng) Committee Bangkok Mass Transit System PCL 1992 – 1996 Managing Director 12. Dr.Anat Arbhabhirama 68 University of Bangkok Mass Transit System PCL 1996 – Present Advisor of Director Colorado Audit Committee & Tanayong PCL 1998 – Present Audit Committee Independent Committee Independent Committee

Details of Directors, Executive Committees, and Managements of Tanayong As of March 31, 2007

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41 MBA University of California

2. Ms. Anchana Rojviboonchai

Highest Education

47 MBA, Thammasart University

Age (Years)

1. Mrs. Duangkamol Chaichanakajorn

Name-Surname Position

Details of Executive Officers On Mar 31, 2007

1997 - 2004

2005

1994 - 1996 Present 2006

AVP Finance and Administration Finance Director Independent Financial Advisor Executive Vice President of Finance and Accounting Assistance Vice President, Finance

Bangkok Mass Transit System PCL.

Grand Asset Development PCL.

Laguna Resort and Hotel PCL. Tanayong PCL.

Family Shareholding Working Experience During the Past of 5 Years Relationship in the Position Name of Company Period Company with Executives Tanayong PCL. 2001 - Present Account Director Thai Wah PCL. 1996 - 2001 AVP Accounting

Risk Factor 1.1 Business Operational Risk After the Company entered business rehabilitation plan until now, it has been operated with three directions of business operation as following; 1.1.1 Develop both of low-rise and high-rise residential housing project for sale, long-term leasing and short-term leasing- After refinancing and debt pay-off according to business rehabilitation plan, the Company has utilized and developed all of its assets, land and projects which are not in liability. The development varies in different way to meet marketing demand. As all of the assets are free from liability, the Company consequently has low expenses and investment costs. Moreover, the development also help the Company gains more income and short-term profit. 1.1.2 Develop hospitality, recreation and other related projects - Since the end of fiscal year 2006, after the Company accomplished rehabilitation plan and finally terminate from business rehabilitation plan in November 2006, the Company has had new foreign joint ventures to help strengthen and expand its business in various fields. Furthermore, the Company has decided to keep developing its hospitality projects in order to gain more incomes in long term. 1.1.3 Project manegment - During the beginning of fiscal year 2006, The Company, during Comply with the rehabilitation plan approved by the creditors and the central Bankreeptcy Cradit has contracted with National Housing Authority (NHA) to operate low-cost residential housing project. This project has total value of 8,400 million Baht with 20,000 units and approximately 10,000 units, is on the process and the remaining 10,000 units were postponed and are all expected to start the process from 2008 onward.

1.2 Project Cost In the early stage of remaining asset development for sale or leasing, the Company has only renovated existing residential housing and building projects with no construction and investment in any huge project. Thus, the Company has no project cost investment risk factors despite the volatility of construction costs due to oil price. Furthermore, the price of low-cost residential housing project, which has been proceeded for a period of time, is clearly settled with realization of business factors and any effects which might occur. Therefore, it is expected that the Company will not much be affected by project cost risk.

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1.3 Financial, Interest Rate and Exchange Rate Risk After business rehabilitation completed, the Company has a few liabilities which mostly remains un-paid from rehabilitation plan and must be paid off within 4 years. However, the remaining liabilities are in Thai Baht which have exact amount with no interest during payment period. Therefore, the Company definitely has no risk of financial, and interest rate, and exchange rate

1.4 Credit Risk Since most projects of the Company has focused on middle to high level market which are reliable and have good debt payment status, it is expected that the Company will not be affected by credit risk.

1.5 Rehabilitation Risk After completed business rehabilitation plan approved by the Central Bankruptcy Court on April 24, 2006, the company has later terminated from rehabilitation plan on November 14, 2006 and changed its capital registered from 3,677,468,400 Baht (367,746,840 shares; 10 baht each) to 5,333,333,333 Baht (5,333,333,333 shares; 1 Baht each). The Company has almost paid off all debt, however, there have been still a few debt to be paid on due. The termination from rehabilitation plan without any objection from creditors to the Supreme Court consequently returns authorization to its old management. The creditors who have not submitted petition for debt payment according to rehabilitation process are considered to abandon their rights. Thus, the Company has no any risk of rehabilitation.

1.6 Risk of Being delisted from Stock Exchange of Thailand (SET) After the Company terminate itself from business rehabilitation plan on November 14, 2006, the Company has submitted letter to SET for returning to real estate business sector, after finished the investigation of the Companyâ&#x20AC;&#x2122;s information in accordance with SET regulations. The Company returned to stock market in December 2006. Therefore, the risk of being delisted from Stock Exchange of Thailand (since the Company has listed in Non-Performing Group on July 3, 2006) has ended.

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Shareholding Structure Shareholders Name Lists of the largest shareholders 10 persons, as of December 19, 2006 Names of Shareholders Number of Share % 1. THAILAND SECURITIES DEPOSITORY 2,190,577,729 41.07 COMPANY LIMITED FOR DEPOSITORS 2. K 2 J HOLDING COMPANY LIMITED 2,000,000,000 37.50 3. COMPANY LIMITED FOR DEPOSITORS 385,643,932 7.23 THAILAND SECURITIES DEPOSITORY 4. TANAYONG FOOD AND BEVERAGE CO.,LTD. 276,841,660 5.19 5. MR.CHENG YU TUNG 132,199,289 2.48 6. MR.KEEREE KANJANAPAS 68,819,410 1.29 7. AMSFIELD HOLDINGS PTE. LTD. 68,627,186 1.29 8. KIATNAKIN BANK PUBLIC COMPANY LIMITED 42,533,321 0.80 9. CROSSVENTURE HOLDINGS LIMITED 10.MUENG THONG APARTMENT CO.,LTD

35,390,867 23,557,292

0.66 0.44

Dividend Payment Policy Dividends policy for shareholder is at the rates of 50 percentages of the net profit after tax of each year and will be paid in the next fiscal year by consideration with cash flow from operation. History of Dividends payment compare with the profit net in the past 3 years from 2004/05 to 2005/06 and 2006/07 2006/07

2005/06

2004/05

Earnings per shares

9.22

(0.84)

(4.88)

Dividend per share

Par value per share

1.00

10.00

Rate of dividend (%)

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Asset Management (25)

Special Project Management (6)

Deputy Managing Director

Project Management (8)

The Office of the MD. LEGAL/HR/IT/ADM

Audit Committee

Project Development (6)

Deputy Managing Director

Managing Director

Executive Board

Board of Directors

Marketing (2)

Sales (8) Finance (3)

Accounting (8)

Executive Director Accounting & Finance

Management Structure As of March 31, 2007, the Companyûs management structure consists of 3 comittees namely; the Board of Directors, the Audit Committee and the Executive Committee as the following details:

Board of Directors consists of 13 directors, namely: 1. Mr. Keree Kanjanapas 2. Mr. Kavin Kanjanapas 3. Mr. Sutham Siritipsakorn 4. Mr. Rangsin Kritalug 5. Mr. Kom Panomreongsak 6. Mr. Kong Chi Keung 7. Mr. Abdulhakeem Kamkar 8. Datoû Amin Rafie Othman 9. Dr. Paul Tong 10. Mr. Cheung Che Kin 11. Lt. Gen. Phisal Thepsithar 12. Dr. Anat Arbhabhirama 13. Pol. Maj.Gen. Vara Ieammongkol

Chairman of the Board Managing Director Deputy Managing Director Deputy Managing Director Director Director Director Director Director Director Independent Director & Chairman of Audit Committee Independent Director& Audit Committee Independent Director & Audit Committee

Authorized Directors shall be 6 Persons as follows: A B 1. Mr. Keree Kanjanapas 4. Mr. Sutham Siritipsakorn 2. Mr. Kavin Kanjanapas 5. Mr. Kong Chi Keung 3. Mr. Rangsin Kritalug 6. Mr. Kom Panomreongsak çNames and numbers of the authorized directors are of director in group A jointly signs with one of directors in group B together with Companyûs seal affixed.é

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Scope of Authority and Responsibility of the Executive Committee The authority and responsibility of the Executive Committee are of company general anagement. Any matter beyond his/her own authority will be brought to the Executive Committee meeting for approval.

The Audit Committee As of March 31, 2007; consists of 3 persons as follows:1. Lt.Gen.. Phisal Thepsithar Chairman of Audit Committee 2. Dr.Anat Arbhabhirama Audit Committee 3. Pol.Maj.Gen. Vara Ieammongkol Audit Committee

Procurement and Selection Method for Appointment of Directors and Managements The method of procurement and selection for the Directors and the Managements will be determined in the meeting of Board of Director.

Management Remuneration And Other Remunerationd Directors Remuneration From April 1, 2006 to March 31, 2007, there was remuneration of 13 directors as follows;

Meeting Allowances 1. Mr.Keree Kanjanapas 2. Mr. Kavin Kanjanapas 3. Mr. Sutham Siritipsakorn 4. Mr. Rangsin Kritalug 5. Mr. Kom Panomreongsak 6. Mr. Kong Chi Keung 7. Mr. Abdulhakeem Kamkar 8. Dato没 Amin Rafie Othman 9. Dr. Paul Tong 10. Mr. Cheung Che Kin 11. Lt. Gen.Phisal Thepsithar 12. Pol. Maj.Gen Vara Ieammongkol 13. Dr. Anat Arbhabhirama

Year of 2006/07 515,000 80,000 80,000 490,000 490,000 80,000 80,000 80,000 80,000 80,000 490,000 490,000 490,000

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Scope of Authority and Responsibility of the Executive Committee The authority and responsibility of the Executive Committee are of company general management. Any matter beyond his/her own authority will be brought to Board of Directorsû meeting for approval.

The Audit Committee As of March 31, 2007, consists of 3 persons as following: 1. Lt.Gen. Phisal Thepsithar Chairman of Audit Committee 2. Dr. Anat Arbhabhirama Audit Committee 3. Pol.Maj.Gen. Vara Ieammongkol Audit Committee

Scope of Authority and Responsibilities of the Audit Committee 1. To review the Companyûs financial reports, internal controls and internal audit functions. 2. To review the Companyûs compliance with laws and regulations. 3. To consider, select and nominate the Companyûs external auditors and their remuneration. 4. To review the Companyûs disclosure in connected transactions, or any potential conflicts of interest. 5. To prepare the audit committee report. 6. To perform other duties as assigned by the Board.

Procurement and Selection Method for appointment of Directors and Managements The method of procurement and selection for the Directors and the Managements will be determined in the meeting of Board of Directors.

Management Remuneration And Other Remunerations Directors Remuneration From April 1, 2006 to March 31, 2007, there was remuneration of 13 directors as follows: Meeting Allowances 1. Mr. Keree Kanjanapas 2. Mr. Kavin Kanjanapas 3. Mr. Sutham Siritipsakorn 4. Mr. Rangsin Kritalug 5. Mr. Kom Panomreongsak 6. Mr. Kong Chi Keung 7. Mr. Abdulhakeem Kamkar 8. Datoû Amin Rafie Othman 9. Dr. Paul Tong 10. Mr. Cheung Che Kin 11. Lt.Gen. Phisal Thepsithar 12. Pol.Maj.Gen Vara Ieammongkol 13. Dr. Anat Arbhabhirama

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Year of 2006/07 515,000 80,000 80,000 490,000 490,000 80,000 80,000 80,000 80,000 80,000 490,000 490,000 490,000

Management Remuneration There has been a remuneration of 7 persons of the management i.e. Managing Director and the first four managements listed after the Managing Director, as details below: Year of 2006 (Apr 1, 2006 - Mar 31, 2007)

Number of Person Monthly Salary

Total Remuneration (MB) 14

Co rporate Governance Corporate Throughout the past years, the Company has operated its business with 15 rules of corporate governance as regulated by The Stock Exchange of Thailand.

Use of Inside Information The Company had informed the directiors and excutives to comply with the rules and regulations of Securities and Exchange Commission and the provisions of The Stock Exchange of Thailand as follows; 1. The management must report the change of securities holding to Thailand Securities and Exchange Commission, in accordance with section 59 of The Securities and Exchange Acts 1992, and send a copy of this report to the Company on the same day. 2. The management are not allowed to use company internal information for purpose of stock trading. In case the stock trading occurred, it must be informed to The Securities and Exchange Commission within 3 days and all important information must not be disclosed to the outsiders before reporting to The Stock Exchange of Thailand.

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Report on Internal Control System by the Auditor 30 May 2007 Subject : Report on Accounting Internal Control System. To : The Board of Directors, Tanayong Public Company Limited Regarding the audit of financial statements of Tanayong Public Company Limited for the year ended March 31, 2007 as reported dated on May 29, 2007. To obtain the opinion that such financial statement and the operational results are regulated in accordance with Generally Accepted Accounting Principles. The proper scope of review has been based on the assessment of Company没s internal control system which the Auditor didn没t find any material irregularities in such system that may effect the financial statements and reports of the Company. Any other immaterial suggestions to the opinion will be described in another letter later. Nevertheless, the review has been tested on a sampling basis and the assessment of Company没s internal controlling system is purposed for the audit only, thus may not represent the overview of defects that may exist in the controlling system of the Company.

Faithfully yours, - Supachai Panyawattano Certified Public Accountant No. 3930

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Related Company Transactions - Please see Notes to Consolidated Financial Statement No. 15, 25 and 26 The Financial Status and Operational Results Explanation and Analysis Operational Overview in The Past 3 Years Summary of Auditor Report For the year ended of March 31, 2007 The auditor had expressed the unqualified opinions on the Financial Statement report. For the year ended of March 31, 2006 The auditor was unable to express an opinion on the financial statements because of the significant uncertainties regrading the successful inplementation of the Company's rehabilitation plan and the going concern issues of the Company and its subsidiary companies. For the year ended of March 31, 2005 The auditor was unable to express an opinion on the financial statements beause of the significant uncertainties regarding the successful implementation of the company's rehabilitation plan, the going concern issues of the Company and its subsidiary companies, the uncertainties of debt restructuring of one subsidiary and the operation of one associated company which was not audited by its auditor.

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The Financial Status of the Company and its Subsidiaries As at March 31, 2007, total assets of the Company and its subsidiaries decreased from last year amounting Baht 153 milion on 2%. It was mainly due to the change the accounting policy regarding the method of valuing some categries of properties, plant and equipment, from cost to revalued amount totalling Baht 1,557 million net of the decrease in investment in subsidiary companies awaiting transfer under rehabilitation plan and the decrease of assets awaiting transfer under rehabilitation plan of Baht 1,203 and 293 million, consequently. Total liabilities of the Company and its subsidiaries decreased from last year amounting Baht 30,457 million on 86%, It was mainly due to debt settlement to the creditors rehabilitation plan Baht 30,397 million and repayment of advance received from transfer of subleasing agreement Baht 133 million. Shareholders' equity of the Company and its subsidiaries increased from last year amounting Baht 26,722 million. It was mainly due to net profit arising the compliance with the rehabilitation Baht 26,215 million.

The Operational Results of the Company and its Subsidiaries 1. The decrease of revenue of Baht 888 million mainly due to the decrease of share of income from investment accounted for under equity method-subsidiary companies awaiting transfer under rehabilitaiton plan of Baht 2,706 million net of the increase of 1.1 Revenue from land procurement of low-cost residential housing projects arising from land sold to NHA 3 projects; Najomtien, Hua Hin 3 and Bangbor 2 amounting Baht 502 million. 1.2 Reversal of liabilities in excess of amounts per Official Receiver's order amounting Baht 342 million. 1.3 Gain on transfer of assets for debt settlement amounting Baht 1,050 million. 2. The decrease of expenses of Baht 2,891 million mainly due to the decrease of doubtful debts of Baht 3,299 million and loss on exchange rate of Baht 441 million net of the increase of 2.1 Cost of land procurement of low-cost residential housing projects of Baht 449 million. 2.2 Loss on provision for impairment of assets of Baht 3,415 million.

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Report of Independent Auditor To the Shareholders of Tanayong Public Company Limited I have audited the accompanying consolidated balance sheet of Tanayong Public Company Limited and its subsidiary companies as at March 31, 2007, the related consolidated statements of income, changes in shareholders没 equity and cash flows for the year then ended, and the separate financial statements of Tanayong Public Company Limited for the same period. These financial statements are the responsibility of the management of the Company and its subsidiary companies as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tanayong Public Company Limited and its subsidiary companies and of Tanayong Public Company Limited as at March 31, 2007, the results of their operations, and cash flows for the year then ended in accordance with generally accepted accounting principles. Without qualifying my opinion on the financial statements, I draw attention to the aforementioned financial statements as follows: 1) The Company has uncertainties as to the Company没s compliance with the rehabilitation plan, as discussed in Note 6 to the financial statements. During the current year, the Company has followed most of the significant mandatory terms and conditions stipulated in the rehabilitation plan, as follows :

a) Capital restructuring The Company has allotted 4,800,000,000 additional ordinary shares with a Baht 1 par value,

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totaling Baht 4,800,000,000 of these 4,266,666,667 ordinary shares were allocated to the new investors at a price of Baht 0.50 each, or for a total of Baht 2,133,333,333.50, and 533,333,333 ordinary shares were allocated to creditors per the rehabilitation plan. A total of 276,841,660 of the ordinary shares are registered in the name of a subsidiary company, since some share certificates cannot be issued to the creditors as certain amounts of debts are not due, while some debts are pending final court judgement or the comptrollerûs orders. Consequently, the numbers of shares allocated to each creditor is still uncertain as the debt ratio might be altered to accord with final court judgement or comptrollerûs orders. Nevertheless, the Companyûs management believes that the effect of the above will not impact on the Companyûs compliance with the rehabilitation plan, since the above shares are deposited with the Central Bankruptcy Court as guarantees of debt settlement according to the rehabilitation plan and the creditors will still receive 533,333,333 ordinary shares as stipulated in the rehabilitation plan. Subsequently on 25 December 2006, the Company allotted 1,213,606 ordinary shares registered in the name of the subsidiary company to an associated company, as a creditor per rehabilitation plan, in settlement of due debt. Currently, 275,628,054 ordinary shares remain registered in the name of the subsidiary company. b) Debt restructuring The Company repaid most of its debts, amounting to Baht 4,355.8 million (Separate financial statements : Baht 4,445.1 million) by means of cash repayment, allocation of the Companyûs additionally issued shares to the creditors, and transfer of certain assets of the Company and other companies placed as collateral. In addition, the Company has deposited some of its assets and the shares of the Company in the name of a subsidiary company (as discussed in paragraph a)) with the Deposit of Property Central Office, the Legal Execution Department and the Central Bankruptcy Court as collateral for debt settlement. However, certain amounts of debt are pending the final court judgement or the comptrollerûs orders; the Company therefore deposited Baht 555.1 million of cash with the Central Bankruptcy Court as guarantees for debt settlement, of which Baht 512.6 million was provided as collateral for settlement of unsecured creditors. The cash deposits are Baht 95.6 million lower than the highest debt amounts per the proportions which the Company is obliged to pay in accordance with the rehabilitation plan. The remaining cash deposits of Baht 42.5 million are deposited as collateral for the settlement of secured creditors and unsecured creditors for which other partiesû assets are placed as security. Both are entitled to receive repayment in the form of ordinary shares of BTSC and some other assets of the Company and other parties, which the Company did not transfer to the creditors but instead provided cash as a guarantee. The remaining cash deposits are Baht 416.5 million lower than the highest debt amount per the proportion at which the Company is obliged to transfer assets to the creditors in accordance with the rehabilitation plan. Moreover, the Company is in the process of negotiating the transfer of such assets with the creditors to repay debts of Baht 3,089.2 million in accordance with the rehabilitation plan.

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The outstanding balances of the debts under the rehabilitation plan are Baht 4,767.5 million (Separate financial statements : Baht 4,768.6 million) and the Company没s management believes that the Company is capable of repaying the remainder within the due date stipulated in the rehabilitation plan and that no additional debt beyond those already recorded in the accounts would arise because the Company recorded the debts while pending final court judgements or the comptrollers orders, in accordance with the highest balance of debt payable at the proportion which the Company is obliged to settle by payment or by the transfer of assets. On 7 November 2006 and 2 February 2007, the Company filed a request for the return of cash deposited as collateral for debt settlement of the unsecured creditors with the Central Bankruptcy Court since the cash deposited with the Court by the Company was Baht 194.1 million in excess of the amount of debt to be settled. Subsequently on 12 January 2007 and 8 March 2007, the Company received the return of this cash from the Central Bankruptcy Court, leaving cash totaling Baht 318.5 million deposited as collateral for debt settlement of the unsecured creditors with the Court, which are still Baht 95.6 million lower than the highest debt amounts at the proportion which the Company is obliged to pay in accordance with the rehabilitation plan. Currently, the outstanding balance of cash deposited as collateral for debt settlement is Baht 361.0 million. The Company lodged a petition to terminate the rehabilitation plan with the Central Bankruptcy Court on 6 October 2006, the Central Bankruptcy Court consequently ordered the termination of the Company没s business rehabilitation on 14 November 2006. 2) During the current year, the Company changed its accounting policy regarding its method of valuing some categories of property, plant and equipment, from cost to revalued amount, as discussed in Note 5.7 and Note 21 to the financial statements. The values of such property, plant and equipment have not been restated since the values were appraised from current information and the Company does not have the information needed for a retrospective restatement. I have previously audited the consolidated financial statements of Tanayong Public Company Limited and its subsidiary companies for the year ended 31 March 2006, and the separate financial statements of Tanayong Public Company Limited in accordance with generally accepted auditing standards and reported under my report dated 26 June 2006 that I was unable to express an opinion on the financial statements referred to above, because of the significant uncertainties regarding the successful implementation of the Company没s rehabilitation plan and the going concern issues of the Company and its subsidiary companies.

Ernst & Young Office Limited Bangkok : 29 May 2007

135

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES BALANCE SHEETS AS AT 31 MARCH 2007 AND 2006 (Unit : Baht)

Note ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investment Accounts receivable - trade Short-term loans and advances to related parties - net Real estate development costs - net Low-cost residential housing project development costs - net Assets awaiting transfer under rehabilitation plan - net Investments in subsidiary companies awaiting transfer under rehabilitation plan - net Other current assets Advances for land procurement of low-cost residential housing projects Advance for purchase of land Other receivable - net Others TOTAL CURRENT ASSETS NON-CURRENT ASSETS Restricted deposits Cash deposited as collateral for debt settlement Loans to related parties - net Investments accounted for under equity method - subsidiary companies Investments accounted for under equity method - associated companies Other long-term investments - net Land held for future development - net Property, plant and equipment - net Leasehold rights - net Condominiums and fixtures for lease - net Non-current assets - others TOTAL NON-CURRENT ASSETS TOTAL ASSETS

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

136

Consolidated financial statements 2007 2006

Separate financial statements 2007 2006

7 8 9 10 11 12 17

117,305,298 47,134,349 13,835,659 1,078,518,025 169,673,608 1,310,070,156

99,169,774 14,489,964 1,313,467,554 7,245,679 1,602,954,892

80,189,543 1,078,518,025 169,673,608 1,154,904,775

33,015,265 1,313,467,554 7,245,679 1,424,265,033

224,342,586

1,427,433,984

195,874,939

891,256,352

13 14 9

1,000,000 65,000,000 34,871,519 27,528,538 3,089,279,738

121,000,000 37,220,831 9,865,537 4,632,848,215

1,000,000 65,000,000 23,821,519 21,955,427 2,790,937,836

121,000,000 27,170,831 4,844,944 3,822,265,658

3,134,519 361,040,688 292,206,294 111,789,194 600,851,686 2,270,701,917 11,637,897 204,002,151 324,156 3,855,688,502 6,944,968,240

6,047,423 408,939,829 248,865,486 4,901,587 635,311,000 849,036,563 5,600,000 400,537 2,159,102,425 6,791,950,640

1,488,294 361,040,688 347,246,264 185,770,072 111,789,194 571,108,686 2,255,600,877 11,637,897 204,002,151 2,815,100 4,052,499,223 6,843,437,059

4,457,517 789,568,174 1,185,065,972 248,865,486 4,901,587 605,568,000 734,787,917 5,600,000 2,687,517 3,581,502,170 7,403,767,828

16 15 18 18 19 20 21 22 23

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES BALANCE SHEETS (Continued) AS AT 31 MARCH 2007 AND 2006 (Unit : Baht)

Note LIABILITIES AND SHAREHOLDERSรป EQUITY CURRENT LIABILITIES Accounts payable - trade Short-term loans and advances from related parties Current portion of creditors per rehabilitation plan Other current liabilities Advance received from transfer of subleasing agreement Advance received from employer and deferred construction revenues Accrued expenses Other payable Current liabilities - others TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Creditors per rehabilitation plan - net of current portion Loans from directors Loans from related parties Others TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERSรป EQUITY Share capital Registered 5,333,333,333 ordinary shares of Baht 1 each Issued and fully paid 5,333,333,333 ordinary shares of Baht 1 each (2006: 533,333,333 ordinary shares of Baht 1 each) Paid-in capital Premium on ordinary shares Revaluation surplus Companyรปs shares held by subsidiary companies Capital reserve on consolidation Unrealised gain (loss) on changes in value of investment in equity securities available for sales Translation adjustment Retained earnings Appropriated - statutory reserve Deficit TOTAL SHAREHOLDERSรป EQUITY (Capital deficit) TOTAL LIABILITIES AND SHAREHOLDERSรป EQUITY

Consolidated financial statements 2007 2006

Separate financial statements 2006 2007

8,345,513 11,428,535 4,020,976,528

12,993,155 11,428,535 35,164,643,174

4,021,247,432

35,885,144,207

68,667,664 41,717,128 37,323,950 45,002,098 4,233,461,416

133,333,320 33,405,126 41,359,708 34,940,078 35,432,103,096

68,667,664 29,825,833 32,614,073 4,152,355,002

133,333,320 21,630,798 4,035,757 25,822,106 36,069,966,188

746,567,490 1,485,901 9,550,694 10,200,884 767,804,969 5,001,266,385

1,483,994 10,235,435 14,326,475 26,045,904 35,458,149,000

747,380,202 747,380,202 4,899,735,204

36,069,966,188

5,333,333,333

533,333,333

5,333,333,333

533,333,333

2,021,302,379 (15,888,956) 2,685,013

7,599,757,298 14,623,362

2,021,302,379 (15,888,956) 2,685,013

7,599,757,298 14,623,362

628,927 (134,158,140)

(211,640) (134,886,773)

628,927 (134,158,140)

(211,640) (134,886,773)

365,563,524 (5,264,200,701) (37,044,377,464) 1,943,701,855 (28,666,198,360) 6,944,968,240 6,791,950,640

(5,264,200,701) 1,943,701,855 6,843,437,059

365,563,524 (37,044,377,464) (28,666,198,360) 7,403,767,828

25 24

28 21,29 30

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

137

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES INCOME STATEMENTS AS AT 31 MARCH 2007 AND 2006 (Unit : Baht)

Note REVENUES Revenues from sales of real estate Revenues from land procurement of low-cost residential housing projects Rental and service income Hotel income Other income Share of income from investments accounted for under equity method - subsidiary companies Share of income from investments accounted for under equity method - associated companies Share of income from investments accounted for under equity method - subsidiary companies awaiting transfer under rehabilitation plan Reversal of liabilities in excess of amounts per comptroller没s order Gain on transfer of assets for debt settlement Gain on sales of investment in associated company Interest income Others TOTAL REVENUES EXPENSES Costs of sales of real estate Costs of land procurement of low-cost residential housing projects Costs of rental and services Costs of hotel operation Selling, servicing and administrative expenses Share of loss from investments accounted for under equity method - subsidiary companies Doubtful debts Loss on provision for impairment of low-cost residential housing projects Loss on provision for impairment of advance for purchase of land paid to prior shareholders before acquisition of subsidiary company Loss on provision for impairment of property, plant and equipment Loss on provision for impairment of assets Loss on adjustment of the value of loans according to related company没s rehabilitation plan Loss on provision for loss on diminution in value of investments Loss on exchange rate TOTAL EXPENSES INCOME (LOSS) BEFORE INTEREST EXPENSES AND CORPORATE INCOME TAX INTEREST EXPENSES CORPORATE INCOME TAX INCOME (LOSS) BEFORE EXTRAORDINARY ITEM EXTRAORDINARY ITEM Gain on debt restructuring NET INCOME (LOSS) FOR THE YEAR BASIC EARNINGS PER SHARE Income (loss) before extraordinary item Extraordinary item Net income (loss) Weighted average number of ordinary shares (Shares) The accompanying notes are an integral part of the financial statements.

138

Consolidated financial statements 2007 2006 29,838,731 502,113,063 74,543,826 35,200,317

24 24 18

12 21 21

8,626,280 79,851,141 39,590,710

14,606,107

Separate financial statements 2006 2007 29,838,731 502,113,063 -

8,626,280 -

4,007,772,227

14,606,107

1,597,404,205 1,049,648,320 25,567,257 105,038,759 100,101,198 3,519,455,676

2,706,264,796 1,255,805,856 119,066,103 183,848,867 4,407,659,860

1,597,404,205 1,049,648,320 25,567,257 207,651,092 92,701,170 3,504,923,838

2,706,264,796 1,278,381,981 263,409,054 68,302,658 8,347,363,103

11,741,605

4,099,043

11,741,605

4,099,043

448,981,003 56,950,058 21,647,444 300,354,519

50,825,973 22,053,990 261,121,111

448,981,003 242,610,220

203,928,480

115,571,935 92,582,721

3,414,914,355 -

648,449,584 196,982,161 92,582,721

7,613,110,265 -

100,000,000 464,632,485 73,154,442

42,111,789 17,480,016 1,745,208,017 1,774,247,659 (2,232,304) (38,794) 1,771,976,561

442,415,512 440,659,856 4,636,089,840 (228,429,980) (220,193,131) (1,187,224) (449,810,335)

42,111,789 17,480,016 22,047,411 2,360,773,437 1,144,150,401 (2,232,304) 1,141,918,097

314,072,595 440,659,856 8,575,870,239 (228,507,136) (221,303,199) (449,810,335)

24,442,879,380 26,214,855,941

(449,810,335)

25,072,937,844 26,214,855,941

(449,810,335)

0.62 8.60 9.22

(0.84) (0.84)

0.40 8.82 9.22

2,842,471,167

533,333,333

2,842,471,167

(0.84) (0.84) 533,333,333

Note

533,333,333 (266,666,666)

5,333,333,333

2,021,302,379

(5,199,757,298) 2,021,302,379 -

533,333,333 7,599,757,298 4,266,666,667 (2,133,333,334)

Premium (discount) on ordinary shares

14,623,362 -

1,900,000 (11,938,349) (15,888,956) 2,685,013

(17,788,956)

840,567 628,927

179,080 (211,640) -

(390,720) -

728,633 (134,158,140)

2,617,030 (134,886,773) -

(137,503,803) -

Minority interests equity attributable to minority Subordinated shareholders of subsidiary convertible companies debentures

Total

26,214,855,941 (5,264,200,701)

(365,563,524) 5,565,320,822 -

(2,483,920,370) (449,810,335) 365,563,524 (37,044,377,464) -

1,900,000 (11,938,349) 840,567 728,633 26,214,855,941 1,943,701,855

2,021,302,379 (17,788,956)

266,666,667

(2,483,920,370) 179,080 2,617,030 (449,810,335) (28,666,198,360) 2,133,333,333

365,563,524 (39,738,702,196) 2,483,920,370 925,422,797 (24,809,840,968) 3,144,135,067 (925,422,797) (925,422,797) -

Retained earnings Statutory reserve Deficit

Consolidated financial statements Unrealised gain (loss) on changes in value of Company没s shares investment in Revaluation held by subsidiary Capital reserve equity securities Translation on consolidation available for sales adjustment companies surplus

(Unit : Baht)

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES STATEMENTS OF CHANGES IN SHAREHOLDERS没 EQUITY FOR THE YEARS ENDED 31 MARCH 2007 AND 2006

3,677,468,400 7,599,757,298 (3,144,135,067) -

Issued and fully paid share capital

The accompanying notes are an integral part of financial statements.

Balance as at 31 March 2005 Decrease in share capital compensated to deficit Decrease in minority interests Adjust transactions of subsidiary companies excluded in the consolidated financial statements Unrealised gain on investments Translation adjustment Net loss for the year Balance as at 31 March 2006 28 Additional shares allocated to new investors Additional shares allocated to creditors per 28 rehabilitation plan Adjust premium on ordinary shares and statutory 28 reserve as stipulated in the rehabilitation plan 21,29 Revaluation surplus 30 Company没s shares held by subsidiary companies Disposal of Company没s shares held by 30 subsidiary company Adjust capital reserve on consolidation Unrealised gain on investments Translation adjustment Net income for the year Balance as at 31 March 2007

139

140

Note

5,333,333,333

2,021,302,379

(5,199,757,298) 2,021,302,379 -

533,333,333 (266,666,666) -

533,333,333 7,599,757,298 4,266,666,667 (2,133,333,334)

14,623,362 -

1,900,000 (11,938,349) (15,888,956) 2,685,013

(17,788,956)

Premium (discount) on ordinary shares

3,677,468,400 7,599,757,298 (3,144,135,067) -

The accompanying notes are an integral part of financial statements.

Balance as at 31 March 2005 Decrease in share capital compensated to deficit Decrease in minority interests Adjust transactions of subsidiary companies excluded in the consolidated financial statements Unrealised gain on investments Translation adjustment Net loss for the year Balance as at 31 March 2006 28 Additional shares allocated to new investors Additional shares allocated to creditors per 28 rehabilitation plan Adjust premium on ordinary shares and statutory reserve as stipulated in the rehabilitation plan 28 21,29 Revaluation surplus Company没s shares held by subsidiary companies 30 Disposal of Company没s shares held by 30 subsidiary company Adjust capital reserve on consolidation Unrealised gain on investments Translation adjustment Net income for the year Balance as at 31 March 2007

Issued and fully paid share capital

840,567 628,927

179,080 (211,640) -

(390,720) -

728,633 (134,158,140)

2,617,030 (134,886,773) -

(137,503,803) -

Total

2,021,302,379 (17,788,956)

266,666,667

1,900,000 (11,938,349) 840,567 728,633 26,214,855,941 26,214,855,941 (5,264,200,701) 1,943,701,855

(365,563,524) 5,565,320,822 -

(2,483,920,370) 179,080 2,617,030 (449,810,335) (449,810,335) 365,563,524 (37,044,377,464) (28,666,198,360) 2,133,333,333 -

365,563,524 (39,738,702,196) (24,809,840,968) 3,144,135,067 (925,422,797) -

Retained earnings Statutory reserve Deficit

Separate financial statements Unrealised gain (loss) on changes in value of Company没s shares investment in Revaluation held by subsidiary Capital reserve equity securities Translation on consolidation available for sales adjustment companies surplus

(Unit : Baht)

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES STATEMENTS OF CHANGES IN SHAREHOLDERS没 EQUITY FOR THE YEARS ENDED 31 MARCH 2007 AND 2006

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES CASH FLOWS STATEMENTS FOR THE YEARS ENDED 31 MARCH 2007 AND 2006 (Unit : Baht) Consolidated financial statements 2007 2006 Cash flows from operating activities Net income (loss) for the year Adjustments to reconcile net income (loss) to net cash provided by (paid from) operating activities :Unrealised loss on exchange rate Depreciation and amortisation Amortisation on project costs Share of loss (income) from investments accounted for under equity method - subsidiary companies Share of income from investments accounted for under equity method - associated companies Share of income from investments accounted for under equity method - subsidiary companies awaiting transfer under rehabilitation plan Reversal of liabilities in excess of amounts per comptroller没s order Gain on transfer of assets for debt settlement Gain on sales of investment in associated company Withholding tax written-off Doubtful debts Loss on provision for impairment of advance for purchase of land paid to prior shareholders before acquisition of subsidiary company Loss on provision for impairment of property, plant and equipment Loss on provision for impairment of assets (reversal) Loss on adjustment of the value of loans according to related company没s rehabilitation plan Loss on provision for loss on diminution in value of investments Bad debts and reversal of net income from sales Reversal of accrued expenses Reversal of interest payable Gain on sales of property, plant and equipment Decrease (increase) in operating assets :Accounts receivable - trade Short-term loans and advances to related parties Real estate development costs Low-cost residential housing project development costs Advances for land procurement of low-cost residential housing projects Advance for purchase of land Current assets - others Other receivable Non-current assets - others Increase (decrease) in operating liabilities :Accounts payable - trade Advances received from employer and deferred construction revenue Accrued expenses Interest payable Other payable Current liabilities - others Net cash before extraordinary item Extraordinary item: Gain on debt restructuring Net cash flows provided from (used in) operating activities

Separate financial statements 2006 2007

26,214,855,941

(449,810,335)

26,214,855,941

(449,810,335)

76,865,952 -

440,659,856 78,372,465 2,992,367

22,047,411 51,394,400 -

440,659,856 53,137,323 2,491,040

648,449,584

(4,007,772,227)

(14,606,107)

(1,597,404,205) (1,049,648,320) (25,567,257) 2,302,905 115,571,935

(2,706,264,796) (1,255,805,856) 1,508,848 3,414,914,355

(1,597,404,205) (1,049,648,320) (25,567,257) 1,960,232 196,982,161

(2,706,264,796) (1,278,381,981) 1,508,848 7,613,110,265

100,000,000 464,632,485 73,154,442

1,700,098

100,000,000 464,632,485 73,154,442

(142,794) -

42,111,789 17,480,016 (154,251) 24,434,201,432

442,415,512 64,101,325 (12,493,013) (70,793,737) (154,999) (63,264,017)

42,111,789 17,480,016 (154,251) 25,160,294,428

314,072,595 57,592,154 (154,999) 25,438,842

654,305 9,519,410 (42,427,929) (65,000,000) (19,965,906) (2,729,486) (1,315,366)

(10,755,025) 1,113,940 9,885,367 (7,245,679) (121,000,000) (2,078,989) 1,973,637 10,816,308

9,519,410 (42,427,929) (65,000,000) (19,070,716) (2,039,235) -

(378,926) 9,885,367 (7,245,679) (121,000,000) (603,342) 1,769,881 -

486,416 68,667,664 (36,656,240) 7,135,035 217,771,896 (424,575) (4,035,757) 2,207,956 6,779,783 2,830,995 25,119,822,683 (25,072,937,844) 2,830,995 46,884,839

(513,932) 218,519,121 3,637,604 7,563,427 137,072,363 137,072,363

(4,647,643) 68,667,664 7,252,002 (4,035,757) 5,924,245 24,386,096,971 (24,442,879,380) (56,782,409)

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

141

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES CASH FLOWS STATEMENTS (Continued) FOR THE YEARS ENDED 31 MARCH 2007 AND 2006 (Unit : Baht) Consolidated financial statements 2007 2006 Cash flows from investing activities Increase in short-term investments (46,228,663) Decrease (increase) in restricted deposits 2,912,904 Increase in loans to related parties (109,913,489) Proceed from sales of investment in associated company 150,000,000 Dividend received from subsidiary company Proceed from sales of property, plant and equipment 154,252 Cash paid for purchase of property, plant and equipment (8,451,798) Cash paid for purchase of leasehold rights (6,489,400) Cash paid for condominiums and fixtures for lease (5,542,345) Net cash flows used in investing activities (23,558,539) Cash flows from financing activities Increase (decrease) in loans from related parties (684,741) Decrease in loans from directors Cash paid for creditors per rehabilitation plan (1,542,426,745) Cash deposited as collateral for debt settlement (361,040,688) Increase (decrease) in advance received from transfer of subleasing agreement (133,333,320) Cash received from issuance of additional shares 2,133,333,333 Cash received from disposal of Company没s shares held by subsidiary company 1,900,000 Net cash flows provided from financing activities 97,747,839 Increase in translation adjustment 728,633 Net increase in cash and cash equivalents 18,135,524 Cash and cash equivalents at beginning of the year 99,169,774 Less : Cash and cash equivalents at beginning of the year of subsidiary companies excluded in the consolidated financial statements Cash and cash equivalents at end of the year (Note 7) 117,305,298 Supplemental cash flow information Cash paid during the years for :Corporate income tax and withholding tax deducted at source

2,948,765

Non-cash transactions :Adjust the Company没s liabilities to creditors per rehabilitation plan Adjust the Company没s assets to assets awaiting transfer under rehabilitation plan Transfer investments in subsidiary companies awaiting transfer under rehabilitation plan to settle debts 2,001,065,483 Transfer assets awaiting transfer under rehabilitation plan to settle debts 563,385,632 Record settlement of loans to related parties with assets and investments in subsidiary companies awaiting transfer under rehabilitation plan 74,044,000 Issue additional shares to creditors per rehabilitation plan 248,877,711 Transfer real estate development costs to condominiums and fixtures for lease 217,360,000 The accompanying notes are an integral part of the financial statements.

142

Separate financial statements 2006 2007

(803,125) (115,939,633) 155,000 (2,468,264) (119,056,022)

2,969,223 (202,720,793) 150,000,000 44,000,000 154,252 (7,044,079) (6,489,400) (5,542,345) (24,673,142)

786,784 (262,129,131) 155,000 (1,539,000) (262,726,347)

4,275,665 (52,563) 126,666,660 130,889,762 2,617,030 17,281,765 1,306,178,258

(1,613,996,744) (361,040,688) (133,333,320) 2,133,333,333 24,962,581 47,174,278 33,015,265

1,997,463 126,666,660 128,664,123 3,010,139 30,005,126

(1,224,290,249) 99,169,774

80,189,543

33,015,265

6,867,341

1,730,321

1,115,669

37,163,536,405 1,426,452,387

36,420,459,246 1,617,604,419 -

2,001,065,483 563,385,632

389,162,308 266,666,667 217,360,000

TANAYONG PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 MARCH 2007 AND 2006 1.

GENERAL INFORMATION 1.1 Corporate information Tanayong Public Company Limited (çThe Companyé) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in property development and its registered address is 21 Soi Choei Phuang, Viphavadi-Rangsit Road, Jomphol, Jatujak, Bangkok 1.2 Fundamental accounting assumptions a) On 9 July 2001, the Stock Exchange of Thailand (çSETé) announced the Companyûs classification as a company which may be delisted from the SET and instructed the Company to submit a business rehabilitation plan in accordance with SET criteria, to enable it to avoid being delisted. However, to meet the requirements stipulated by the SET, the Company appointed a financial advisor to report on the Companyûs future plans. The Company had been unable to take the steps required to avoid being delisted, and the SET therefore delisted the Companyûs stock from the trading board and classified it under the listed company, Non-Performing Group, effective on 3 July 2006. However, the Companyûs status is still that of a listed company. Thus, it had to comply with all SET regulations, prepared reports on the progress of its rehabilitation plan, and submited these together with its financial statements within the deadline for listed companies to submit their financial statements each quarter, until it eliminated the reasons for being delisted. Subsequently, on 15 December 2006, the Company requested that the SET consider whether the Company had resolved the causes of its possible delisting and permit the return of the Companyûs stock to be traded in its normal business sector. On 18 December 2006, the SET announced that the Company fully met the necessary criteria and that it was there fore appropriate to declare the Company to have resolved the causes of its possible delisting and to move the Companyûs stock from the Non-Performing Group to Property and Construction Group in the Property Development Sector, and to permit the trading of the Companyûs stock from 28 December 2006. b) As discussed in Note 6 to the financial statements, during the current year, the Company has followed most of the significant mandatory terms and conditions stipulated in the rehabilitation plan as follows:

143

1) Capital restructuring The Company has allotted 4,800,000,000 additional ordinary shares with a Baht 1 par value, totaling Baht 4,800,000,000. Of these 4,266,666,667 ordinary shares were allocated to the new investors at a price of Baht 0.50 each, or for a total of Baht 2,133,333,333.50, and 533,333,333 ordinary shares were allocated to creditors per the rehabilitation plan. A total of 276,841,660 of the ordinary shares are registered in the name of a subsidiary company, since some share certificates cannot be issued to the creditors as certain amounts of debts are not due, while some debts are pending final court judgement or the comptrollerûs orders. Consequently, the numbers of shares allocated to each creditor is still uncertain as the debt ratio might be altered to accord with final court judgement or comptrollerûs orders. Nevertheless, the Companyûs management believes that the effect of the above will not impact on the Companyûs compliance with the rehabilitation plan, since the above shares are deposited with the Central Bankruptcy Court as guarantees of debt settlement according to the rehabilitation plan and the creditors will still receive 533,333,333 ordinary shares as stipulated in the rehabilitation plan. Subsequently on 25 December 2006, the Company allotted 1,213,606 ordinary shares registered in the name of the subsidiary company to an associated company, as a creditor per rehabilitation plan, in settlement of due debt. Currently, 275,628,054 ordinary shares remain registered in the name of the subsidiary company. 2) Debt restructuring The Company repaid most of its debts, amounting to Baht 4,355.8 million (Separate financial statements : Baht 4,445.1 million) by means of cash repayment, allocation of the Companyûs additionally issued shares to the creditors, and transfer of certain assets of the Company and other companies placed as collateral. In addition, the Company has deposited some of its assets and the shares of the Company in the name of a subsidiary company with the Deposit of Property Central Office, the Legal Execution Department and the Central Bankruptcy Court as collateral for debt settlement. However, certain amounts of debt are pending the final court judgement or the comptrollerûs orders; the Company therefore deposited Baht 555.1 million of cash with the Central Bankruptcy Court as guarantees for debt settlement, of which Baht 512.6 million was provided as collateral for settlement of unsecured creditors. The cash deposits are Baht 95.6 million lower than the highest debt amounts per the proportions which the Company is obliged to pay in accordance with the rehabilitation plan. The remaining cash deposits of Baht 42.5 million are deposited as collateral for the settlement of secured creditors and unsecured creditors for which other partiesû assets are placed as security. Both are entitled to receive repayment in the form of ordinary shares of BTSC and some other assets of the Company and other parties, which the Company did not transfer to the creditors but instead provided cash as a guarantee. The

144

remaining cash deposits are Baht 416.5 million lower than the highest debt amount per the proportion at which the Company is obliged to transfer assets to the creditors in accordance with the rehabilitation plan. Moreover, the Company is in the process of negotiating the transfer of such assets with the creditors to repay debts of Baht 3,089.2 million in accordance with the rehabilitation plan. The outstanding balances of the debts under the rehabilitation plan are Baht 4,767.5 million (Separate financial statements : Baht 4,768.6 million) and the Company没s management believes that the Company is capable of repaying the remainder within the due date stipulated in the rehabilitation plan and that no additional debt beyond those already recorded in the accounts would arise because the Company recorded the debts while pending final court judgements or the comptroller没s orders, in accordance with the highest balance of debt payable at the proportion which the Company is obliged to settle by payment or by the transfer of assets. On 7 November 2006 and 2 February 2007, the Company filed a request for the return of cash deposited as collateral for debt settlement of the unsecured creditors with the Central Bankruptcy Court since the cash deposited with the Court by the Company was Baht 194.1 million in excess of the amount of debt to be settled. Subsequently on 12 January 2007 and 8 March 2007, the Company received the return of this cash from the Central Bankruptcy Court, leaving cash totaling Baht 318.5 million deposited as collateral for debt settlement of the unsecured creditors with the Court, which are still Baht 95.6 million lower than the highest debt amounts at the proportion which the Company is obliged to pay in accordance with the rehabilitation plan. Currently, the outstanding balance of cash deposited as collateral for debt settlement is Baht 361.0 million. The Company lodged a petition to terminate the rehabilitation plan with the Central Bankruptcy Court on 6 October 2006, the Central Bankruptcy Court consequently ordered the termination of the Company没s business rehabilitation on 14 November 2006.

2. BASIS OF PREPARATION The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

145

3. BASIS OF CONSOLIDATION 3.1 The consolidated financial statements include the financial statements of the Company and the following subsidiary companies:

Companyûs name

Dnal Co., Ltd. Luecha Land Development Co., Ltd. Muang Thong Apartment Co., Ltd. Muang Thong Lakeside Restaurant Co., Ltd. (Subsidiary company of çMuang Thong Apartment Co., Ltd.é) Yong Su Co., Ltd. Tanayong Food and Beverage Co., Ltd. Thana City Golf & Country Club Co., Ltd. Tanayong Planner Co., Ltd. Siam Paging and Communication Co., Ltd. Sampaopetch Co., Ltd. Tanayong Property Management Co., Ltd. Thana City Management Co., Ltd. Thana City Place Co., Ltd. Tac Architects Co., Ltd. Tanayong International Limited Treasure Pool Investments Limited (Subsidiary company of çTanayong International Limitedé) Rictor Assets Limited (Subsidiary company of çTanayong International Limitedé) Tanayong Treasury Services Limited (Subsidiary company of çTanayong International Limitedé)

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Nature of business

Office rental Apartment rental Hotel

Percentage of shareholding 2007 2006 Percent Percent 100 100 100 100 100 100

Country of incorporation

Assets as a percentage Revenues as a percentage the consolidated to the consolidated total total assets as at revenues for the years 31 March ended 31 March 2007 2006 2006 2007 Percent Percent Percent Percent 1.67 1.00 2.21 1.46 0.99 1.09 1.59 1.27

Restaurant Apartment rental Restaurant Club management and operation Financial advisor Land ownership Property development Project management Property development Property development Interior design and decoration Investment holding

51 100 100 100

Thailand Thailand Thailand Thailand

1.20 0.02

1.33 0.06

0.01 0.40 0.10

0.01 0.51 0.10

100 100 100 100 100 100 100

Thailand Thailand Thailand Thailand Thailand Thailand Thailand

0.04 0.18 0.64 0.10 -

0.04 0.18 0.64 0.12 -

0.47 -

0.18 -

100

3.23

7.74

0.19

1.89

Investment

100

Cayman Island British Virgin Islands

British Virgin Islands

Cayman Island

Investment

Financial service

100

3.2 The financial statements of overseas subsidiary companies are translated into Thai Baht at the closing exchange rate as to assets and liabilities, and at monthly average exchange rates as to revenues and expenses. The resultant differences have been shown under the caption of çTranslation adjustmenté in shareholdersû equity. 3.3 Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements. 3.4 Investments in the subsidiary companies as recorded in the Companyûs books of account are eliminated against the equity of the subsidiary companies. 3.5 During the year ended 31 March 2006, the Companyûs rehabilitation plan administrator has resolved to register the dissolution of Luecha Land Development Co., Ltd., Tanayong Planner Co., Ltd., Thana City Management Co., Ltd., Thana City Place Co., Ltd. and Tac Architects Co., Ltd.. These subsidiary companies are currently liquidating their accounts and the Company will not include the financial statements of such subsidiary companies in its consolidated financial statements following the completion of their liqui dation.

CHANGE IN ACCOUNTING POLICY/ADOPTION OF NEW ACCOUNTING STANDARD On 2 May 2007, the Federation of Accounting Professions issued Notification No.9/2550 regarding the following revised accounting standards: Accounting Standard No. 25 (Revised 2007) Segment Reporting Accounting Standard No. 33 (Revised 2007) Borrowing Costs Accounting Standard No. 44 (Revised 2007) Consolidated and Separate Financial Statements Accounting Standard No. 45 (Revised 2007) Investments in Associates Accounting Standard No. 46 (Revised 2007) Interests in Joint Ventures Accounting Standard No. 49 (Revised 2007) Construction Contracts Accounting Standards No. 44 (Revised 2007), No. 45 (Revised 2007) and No. 46 (Revised 2007) are to be adopted for the fiscal year beginning on or after 1 January 2007 (the Companyûs fiscal year begins on 1 April). As a result, the Company is to adopt the changes in recording investments in subsidiary and associated companies from equity method to cost method in the separate financial statements for the year ending 31 March 2008. Adoption of the changes will necessitate the restatement of the Companyûs separate financial statements for the year ended 31 March 2007 to be presented for comparative purposes along with the financial statements for the year ending 31 March 2008. Currently, the Company is in the process of assessing the impact to the financial statements. Accounting Standards No. 25 (Revised 2007), No. 33 (Revised 2007) and No. 49

147

(Revised 2007) are to be adopted for the fiscal year beginning on or after 1 January 2008.

SIGNIFICANT ACCOUNTING POLICIES 5.1 Revenue recognition a)Sales of land and completed buildings are recognised as revenue when contracts to purchase and to sell and completed buildings have been executed and initial payments have been received not less than 20 percent from the buyers. b)Sales of units in condominium projects are recognised as revenue when contracts to purchase and to sell condominium units have been executed and initial payments have been received not less than 20 percent from the buyers. Revenues on condominium projects are recognised on the percentage of completion method. The percentage of completion is measured by the relationship of actual development costs incurred up to the end of the period to the total anticipated development costs to be incurred to completion, but excluding the costs of land. c)Long-term lease of units in condominium projects situated on leased land which had transferred the risks and rewards of ownership of the units to the lessee is regarded as sales and recognised as revenue under the percentage of completion method under the same concept as b) above. d)Revenues from land procurement of low-cost residential housing projects are recognised when the agent, responsible for acquisition of the land, transfers ownership to the National Housing Authority. e)Revenues from construction services of low-cost residential housing projects are recognised when services have been rendered taking into the stage of completion. Stage of completion is measured by reference to total costs incurred as a percentage of total budgetary cost in relation to the projects. The excess of the value of contracts in progress over the amounts billed to the National Housing Authority is presented as çUnbilled receivablesé under current assets. The excess of the amounts billed to the National Housing Authority over the value of contracts in progress is presented as çAdvances received from employer and deferred construction revenuesé under current liabilities. f) Rental income in conjunction with apartment and condominium is recognised as revenue on an accrual basis. g)Revenues from hotel operations, mainly consisting of room and restaurant revenues, are recognised when services have been rendered and represent the invoiced value (excluding value added tax) of goods supplied and services rendered after deducting discounts and service charges.

148

h) Interest income is recognised on an accrual basis based on the effective interest rate. 5.2 Costs of sales Costs of sales of real estate, which are determined by attributing the total anticipated real estate development costs after recognition of the costs incurred to date to the units already sold on the basis of salable area are recognised as costs in the income statements. 5.3 Real estate development costs Real estate development costs are stated at cost less allowance for loss on diminution in value. Real estate development costs consist of the costs of land, land development, anagement fees, construction and related interest. 5.4 Cash and cash equivalents Cash and cash equivalents consist of cash in hand, cash at bank, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 5.5 Trade accounts receivable Trade 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 debtor aging. 5.6 Investments a) Investments in available for sale securities are stated at fair value. Changes in the carrying amounts of securities are recorded as separate items in shareholders没 equit until the securities are sold, when the changes are then included in determining income. The fair value of marketable securities is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange of Thailand. b) Investments in debt securities, both due within one year and expected to be held to maturity are recorded at amortised cost. The premium/discount on debt securities is amoritsed by effective rate method with the amortised amount presented as an adjust ment to the interest income. c) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on diminution in value (if any). d) Investments in subsidiary companies in the separate financial statements and nvestment in associated companies are accounted for under the equity method. 5.7 Property, plant and equipment and depreciation Before the year ended 31 March 2007, land was stated at cost, while buildings and equipment were stated at cost less accumulated depreciation and allowance for impairment (if any).

149

During the current year, the Company changed its values of some categories of property, plant and equipment from cost to the revalued amount. As from the year ended 31 March 2007, land is stated at cost/revalued amount and buildings and equipment are stated at cost/revalued amount less accumulated depreciation and allowance for loss on impairment of assets (if any). Land, buildings and improvements and golf course development costs are initially recorded at cost on the acquisition date, and subsequently revalued by an independent professional appraiser to their fair values. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at the balance sheet date. Differences arising from the revaluation are dealt with in the financial statements as follows: - When an assetûs carrying amount is increased as a result of a revaluation of the Companyûs assets, the increase is credited directly to equity under the heading of çRevaluation surplusé. However, a revaluation increase will be recognised as income to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense. - When an assetûs carrying amount is decreased as a result of a revaluation of the Companyûs assets, the decrease is recognised as an expense in the income statement. However, a revaluation decrease is to be charged directly against the related çRevaluation surplusé to the extent that the decrease does not exceed the amount held in the çRevaluation surplusé in respect of those same assets. Any excess amount is to be recognised as an expense in the income statement. Depreciation of plant and equipment is calculated by reference to their costs or the revalued amounts on the straight-line basis over the following estimated useful lives: Buildings and improvements 5 - 20 years Golf course development costs 5 - 30 years Furniture and office equipment 3 - 5 years Motor vehicles 5 years Depreciation is included in determining income. No depreciation is provided on land. 5.8 Leasehold rights and amortisation Leasehold rights are stated at cost less accumulated amortisation and allowance for loss on impairment of assets (if any). Amortisation of leasehold rights is calculated by reference to their cost on a straight-line basis over the leasehold period. Amortisation is included in determining income. 5.9 Condominiums and fixtures for lease Condominiums and fixtures for lease are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation is calculated by reference to

150

their costs on the straight-line basis over the following estimated useful lives : Condominiums for lease Period of lease Fixtures 5 years Depreciation is included in determining income. 5.10 Companyûs shares held by subsidiary companies Companyûs shares held by its subsidiary companies are stated at cost and presented as a deduction in shareholdersû equity. 5.11 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Companyûs operations. 5.12 Foreign currencies Foreign currency transactions are translated into Baht at the exchange rates ruling on the transaction dates. Assets and liabilities denominated in foreign currencies outstanding at the balance sheet date are translated into Baht at the exchange rates ruling on the balance sheet date. Gains and losses on exchange are included in determining income. 5.13 Impairment of assets The Company and its subsidiary companies assess at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the Company and its subsidiary companies make an estimate of the assetûs recoverable amount. Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement. An assetûs recoverable amount is the higher of fair value less costs to sell and value in use. 5.14 Gains from troubled debt restructurings The Company and its subsidiary companies adopt an accounting policy related to troubled debt restructuring whereby in case of a transfer of assets to settle debts which the excess of the debt extinguished by the creditors over the fair value of the assets transferred is recognised as an extraordinary gain in the income statements and the difference between the fair value and the net book value of the assets transferred is treated as a gain (loss) from transfer of assets. When the debt restructuring involves a waiver of debts, a portion of the waived debts

151

that exceeds the aggregate amount of interest expenses to be incurred over the term of the new agreement is recognised as an extraordinary gain in the income statements. 5.15 Employee benefits Salary, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. 5.16 Income tax Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax legislation. 5.17 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

REHABILITATION PLAN On 30 December 2003, the Central Bankruptcy Court issued an order approving the business rehabilitation of the Company, and appointed the Company as the planner. The Company subsequently proposed a business rehabilitation plan to a meeting of creditors, and a resolution accepting the plan was passed by a majority vote on 31 March 2005. On 30 May 2005, the Central Bankruptcy Court approved the Company没s rehabilitation plan. Indebtedness per repayment claims made under the Company没s rehabilitation plan are grouped as follows: (Unit : Million Baht) Indebtedness per repayment claims Principal Interests Total

1. Secured creditors/Unsecured creditors for which other parties没 assets are placed as security 4,717.7 2. Unsecured creditors 30,993.9 3. Creditors receiving settlement in accordance with original contracts 6,609.2 Total

152

231.9 20,052.3

4,949.6 51,046.2

287.3

6,896.5 62,892.3

Certain amounts of lodged indebtedness are duplicated and are not the Companyรปs obligations, and certain amounts exceed the balance per the Companyรปs book of account. The actual amount of indebtedness depends on the order of the comptroller or the court. However, the Company believes that there will be no material liabilities beyond the amount set aside. The significant details of the Companyรปs rehabilitation plan are as follows: Capital restructuring 1. Reduce registered capital by canceling the unpaid portion. 2. Reduce paid-in capital by reducing the par value of the shares from Baht 10 to Baht 1 per share, and reduce capital by cutting the number of shares in a ratio of 6.8953 original shares to 1 new share. Share capital remaining will equal Baht 533,333,333 (533,333,333 ordinary shares). 3. Increase registered capital by Baht 4,800,000,000 (4,800,000,000 ordinary shares of Baht 1 each) with the new capital to be allotted as follows: a) 800,000,000 ordinary shares to be allocated to creditors for conversion of debt to equity. b) 4,000,000,000 ordinary shares to be issued to new investors, with the cash capital thereby injected to be sufficient to make debt repayment as stipulated in the plan. Following the increase in share capital and debt to equity conversion, the Companyรปs registered and paid capital will be Baht 5,333,333,333 (5,333,333,333 ordinary shares of Baht 1 each). The new investors will become the major shareholders of the Company, with an aggregate holding of 75 percent, while the creditors will hold 15 percent and the existing shareholders hold another 10 percent of total restructured capital. The additional capital injection by new investors must be completed within 180 days of the later of the date the Court approves the plan or the date the final judgement is delivered on disputes or appeals, with the period able to be extended to another 180 days. If the Company is not able to comply, it must report to the creditor committee and the Comptroller so that a final decision can be made. Furthermore, existing share premium and statutory reserve are to be offset with the deficit as at the date of the capital increase. Debt restructuring Secured creditors/Unsecured creditors for which other partiesรป assets are placed as security 1) Transfer the collateral to the creditors for the settlement of debts in an amount equal to the assessed value of the assets, within 180 days of the later of the date the Court approves the plan or the date the final judgement is delivered on disputes or appeals. 2) After the transfer of the collateral to creditors as mentioned in 1), the creditors in this group shall be considered to have been fully settled. Unsecured creditors

153

1) The creditors没 debts are mainly to be repaid in cash at rates of 10.05-14.70 percent of the approved claims, although some creditors are to receive 100 percent of principal and some creditors没 debts to be repaid in full (principal plus interest). Some creditors will receive debt repayment within 180 days of the later of the date the Court approves the plan or the date the final judgement is delivered on disputes or appeals, while another group of creditors are to be paid in 8 annual installments, commencing within 18 months of the later of the date the Court approves the plan or the date the final judgement is delivered on disputes or appeals, and the remaining creditors are to receive payment according to other conditions stipulated in the plan. 2) For some groups of creditors, following payment of indebtedness according to 1), the remaining indebtedness per the rehabilitation plan is to be converted to equity. The 800 million ordinary shares are to be allocated to each creditor proportionately, based on the ratio of each creditor没s remaining debt to total remaining debts (the remaining subsequent to receiving cash repayment). 3) When the creditors没 debts have been paid at the proposed rates and/or the remaining indebtedness is converted to equity, the creditors in this group shall be considered to have been fully settled. Creditors receiving settlement in accordance with original contracts 1) These creditors are to receive settlement in accordance with the original contracts. 2) Upon completion of performance in accordance with the original contracts, the creditors in this group shall be considered to have been fully settled. On 2 December 2005, the Company filed a petition to amend the business rehabilitation plan with the Central Bankruptcy Court. The Company subsequently proposed amendments to the business rehabilitation plan in a meeting of the creditors, and a resolution approving the amended plan was passed by a majority vote on 28 February 2006. Subsequently on 24 April 2006, the Central Bankruptcy Court approved the amendments to the business rehabilitation plan. The significant details of the proposed amendments to the business rehabilitation plan are as follows: Capital restructuring To allocate new additional ordinary shares of 4,800,000,000 shares as follows: 1) 533,333,333 ordinary shares to be allocated to creditors for conversion of debt to equity. 2) 4,266,666,667 ordinary shares to be issued to new investors. The new investors will become the major shareholders of the Company, with an aggregate holding of 80 percent, while the creditors will hold 10 percent and the existing shareholders hold another 10 percent of total restructured capital. Debt restructuring

154

Secured creditors/Unsecured creditors for which other partiesû assets are placed as security 1) Transfer the collateral to the creditors for the settlement of debt in an amount equal to the assessed value of the assets, within 60 days after the date of the capital increase. 2) After the transfer of the collateral to creditors as mentioned in 1), the creditors in this group shall be considered to have been fully settled. Unsecured creditors 1) The creditorsû debts are mainly to be repaid in cash at rates of 10.05-14.70 percent of the approved claims, although some creditors are to receive 100 percent of principal, some creditorsû debts to be repaid in full (principal plus interest) and some creditorsû debts to be repaid as stipulated in the plan. Some creditors will receive debt repayment within 60 days after the date of the capital increase, while other groups of creditors are to be paid by 5 annual installments, commencing within 60 days after the date of the capital increase, and the remaining creditors are to receive payment according to other conditions stipulated in the plan. 2) For some groups of creditors, following payment of indebtedness according to 1), the remaining indebtedness per the rehabilitation plan is to be converted to equity. The 533,333,333 ordinary shares are to be allocated to each creditor proportionately, based on the ratio of each creditorûs remaining debt to total remaining debts (the remaining subse quent to receiving cash repayment). 3) When the creditorsû debts have been paid at the proposed rates and/or the remaining indebtedness is converted to equity, the creditors in this group shall be considered to have been fully settled. Creditors receiving settlement in accordance with original contracts 1) These creditors are to receive settlement in accordance with the original contracts within 60 days after the date of the capital increase. However, collateral is to be transferred to creditors to whom the Company mortgaged and pledged assets as collateral within 60 days after the date of the capital increase. 2) Upon completion of performance in accordance with the original contracts, the creditors in this group shall be considered to have been fully settled. During the current year, the Company has followed most of the significant mandatory terms and conditions stipulated in the rehabilitation plan and recorded gain on debt restructuring in accordance with the rehabilitation plan amounting to Baht 24,442.9 million (Separate financial statements: Baht 25,072.9 million), presented as an extraordinary item in the income statements for the current year. In addition, the Company lodged a petition to terminate the rehabilitation plan with the Central Bankruptcy Court on 6 October 2006, the Central Bankruptcy Court consequently ordered the

155

termination of the Company没s business rehabilitation on 14 November 2006.

7. CASH AND CASH EQUIVALENTS Accounts receivable - trade (Unit : Baht)

Cash Current deposits and saving deposits BOT bonds with maturity date due not more than 3 months Total

Consolidated financial statements 2007 2006 437,659 189,962 46,867,639 98,979,812 70,000,000 117,305,298

Separate financial statements 2550 2549 265,000 80,000 9,924,543 32,935,265 70,000,000 80,189,543

99,169,774

33,015,265

8. SHORT-TERM INVESTMENT (Unit : Baht)

Equity security available for sale Add : Unrealised gain Total

Separate financial statements 2006 2007 46,228,663 905,686 47,134,349 -

Separate financial statements 2550 2549 -

9. ACCOUNTS RECEIVABLE - TRADE / OTHER RECEIVABLE The relationship between the Group and these related companies is under common management. (Unit : Thousand Baht)

Total estimated project value for projects which are opened for sales Value of sale contracts which has been executed Less : Recognised as revenue Not yet recognised Amount recognised as revenue Less : Collected Not yet collected or due for collection

Consolidated and separate financial statements 2007 2006 14,912,763 14,109,017 9,971,957 10,001,871 (9,971,957) (10,001,871) -

10,001,871 (10,001,871) -

9,971,957 (9,971,957) -

The outstanding balances are accounts receivable of subsidiary companies with which collection problems are not expected since most are customers with good financial status and payment histories.

156

Other receivable (Unit : Thousand Baht) Separate financial statements 2007 2006 798.4 791.3 (763.5) (754.1) 34.9 37.2

Other receivable Less : Allowance for doubtful debts Other receivable - net

Consolidated financial statements 2007 2006 787.3 781.3 (763.5) (754.1) 23.8 27.2

The Company and its subsidiary companies believe that there will be no doubtful debt beyond the provision amount set aside.

10. SHORT-TERM LOANS AND ADVANCES TO RELATED PARTIES (Unit : Thousand Baht) Consolidated financial statements Separate financial statements 2006 2007 2007 2006 Interest policy Related companies Metro Department Store Co., Ltd. EGV Ltd. Others Less : Allowance for doubtful debts Net

4 10,252 218 10,474 (10,474) -

4 9,952 218 10,174 (10,174) -

10,252 218 10,470 (10,470) -

At cost of fund 9,952 At cost of fund 218 At cost of fund 10,170 (10,170) -

All of the balance of short-term loans and advances to related parties have been long outstanding. The Company and its subsidiary companies therefore set up provision in full amount.

11. REAL ESTATE DEVELOPMENT COSTS

157

: Thousand The Company and its subsidiary companies have mortgaged 261 rai of(Unit their projectBaht) land with

Freehold land Leasehold land Land development costs Project management fees Construction costs Others Less : Accumulated amounts transferred to costs of sales Less : Accumulated amounts transferred to costs of sales

Less : Amounts transferred to assets awaiting transfer under rehabilitation plan - net Amounts transferred to condominiums and fixtures for lease - net Real estate development costs - net

Consolidated financial statements 2006 2007 395,259 395,259 860,425 860,425 3,812,949 3,812,949 217,030 217,030 1,701,367 1,701,903 527,183 527,703 7,514,733 7,514,749 (4,825,243) (4,814,627) 2,689,490 2,700,122

Separate financial statements 2007 2006 395,259 395,259 860,425 860,425 3,812,949 3,812,949 217,030 217,030 1,701,367 1,701,903 427,937 427,417 7,414,967 7,414,983 (4,825,243) (4,814,627) 2,589,724 2,600,356

(455,842) 2,233,648

(448,884) 2,251,238

(356,076) 2,233,648

(349,118) 2,251,238

(937,770)

(217,360) 1,078,518

1,313,468

(217,360) 1,078,518

1,313,468

banks and financial institutions to secure against the secured bonds and other credit facilities granted to the Company and its subsidiary companies. The Companyûs lenders and some of the subsidiary companiesû lenders had submitted the claims according to the process of the business rehabilitation in which the part of land and construction are to be transferred to settle debts with creditors per rehabilitation plan. During the year ended 31 March 2006, the Company classified the real estate development costs transferred to settle debts as assets awaiting transfer, presented them as çAssets awaiting transfer under rehabilitation plané in the balance sheets, as discussed in Note 17 to the financial statements. During the current year, the Company sold land with costs totaling Baht 8.7 million to a company whose authorised director is the authorised director of the Companyûs new investor, K2J Holdings Company Limited, at a price of Baht 29.1 million. The selling price of the land approximates the latest appraisal value of such land. A meeting of the Board of Directors of the Company held on 14 November 2006 passed a resolution approving the transfer to condominiums for lease of all subleased condominium units in The Royal Place II, The Grand amounting to Baht 217.4 million, as discussed in Note 23 to the financial statements.

12. LOW-COST RESIDENTIAL HOUSING PROJECT DEVELOPMENT COSTS

158

The low-cost residential housing project joint venture agreement is detailed below. (Unit : Thousand Baht) Consolidated and separate financial statements 2007 2006 Land procurement costs Land costs Borrowing costs Others Less : Accumulated costs of sales - land procurement Costs of construction in progress Development costs Costs of fees Costs of consultation Others Less : Allowance for impairment Net

422,805 23,806 2,870 449,481 (448,981) 500

246,278 5,887 9,346 246 261,757 (92,583) 169,174 169,674

6,667 579 7,246 7,246

7,246

On 25 April 2006, the Company entered into the low-cost residential housing project joint venture agreement to develop 20,000 units at a price of Baht 420,000 each, or for a total of Baht 8,400 million. The Company is to procure the land and fund of construction, in accordance with the conditions stipulated by the National Housing Authority. On 18 April 2006, the agreement was approved by the Central Bankruptcy Court. Ownership of the land is to be transferred to the National Housing Authority directly by the agent, once the agent has acquired such land, with the Company to receive a land fee as stipulated under the conditions of the agreement. Subsequent to the transfer of the land to the National Housing Authority, should it be found that the land is not in the conditions stipulated in the agreement, the Company is responsible for any loss incurred by the National Housing Authority. Construction fees will be received in installment, as authorised by the National Housing Authority. During the year 2006, the Company, as plan administrator, approved payments totaling Baht

159

177.8 million for the cost of consultation, verification, land procurement and appraisal and construction of the low-cost residential housing projects, recording them as the part of cost of low-cost residential housing projects. Moreover, the Company没s Board of Directors ratified the above actions on 14 November 2006, the date on which the Central Bankruptcy Court ordered the termination of the Company没s business rehabilitation. However, the Company concluded that the economic benefit generated may not fully cover the project costs incurred because the uncertainties with regard to the current political situation may affect approval of the remaining units of low-cost residential housing projects by the National Housing Authority (Currently, the Company has received approval for 9,584 units of low-cost residential housing projects). Therefore, the Company has recorded provision for impairment amounting to Baht 92.6 million for part of the project costs, as presented under the caption of 莽Loss on provision for impairment of low-cost residential housing projects茅 in the income statements for the current year.

13. ADVANCES FOR LAND PROCUREMENT OF LOW-COST RESIDENTIAL The above balance represents advance paid to the owner of land to be developed into the low-

Balance at the beginning of year Increase during the year Transferred ownership to the National Housing Authority Balance at the end of year

(Unit : Thousand Baht) Consolidated and separate financial statements 2007 2006 121,000 121,000 302,805 (422,805) 121,000 1,000

cost residential housing projects. The Company has already signed an agreement to purchase and to sell the land. As at 31 March 2007, the Company has contractual obligations amounting to approximately Baht 144.3 million under an agreement to purchase and to sell the land.

14. ADVANCE FOR PURCHASE OF LAND The outstanding balance represents advance paid to the owner of land to be developed in the project of a company which is in the process of being established. The Company has already signed an agreement to purchase and to sell the land. As at 31 March 2007, the Company has contractual obligation amounting to approximately Baht 861.7 million.

15. LOANS TO RELATED PARTIES

160

The relationship between the Group and these related companies is under common management. (Unit : Thousand Baht) Consolidated financial statements 2006 2007 Subsidiary companies Thana City Golf & Country Club Co., Ltd. Luecha Land Development Co., Ltd. Dnal Co., Ltd. Thana City Place Co., Ltd. Sampaopetch Co., Ltd. Tanayong International Limited Tac Architects Co., Ltd. Treasure Pool Investments Limited Rictor Assets Limited Others Less : Allowance for doubtful debts Associated company Saraburi Property Co., Ltd. Less : Allowance for doubtful debt Related companies Chula Land Development Co., Ltd. Rachada Inter Development Co., Ltd. United Bangkok Development Co., Ltd. Bangkok Mass Transit System Plc. Time Station Co., Ltd. Hwa Kay Thai (Thailand) Co., Ltd. Others Less : Allowance for doubtful debts Net

----

Separate financial statements 2007 2006 35,397 40,814 20,473 559,653 2,205,153 196,887 146,295 971,130 133,023 24,877 4,333,702 (4,278,662) 55,040

37,421 40,814 20,473 559,653 2,135,965 228,204 146,295 1,207,198 183,291 23,452 4,582,766 (4,202,138) 380,628

Interest policy At cost of fund No interest charged No interest charged No interest charged At cost of fund At cost of fund At cost of fund At cost of fund No interest charged At cost of fund

408,618 489,162 408,618 489,162 No interest charged (404,047) (404,047) (404,047) (404,047) 78,615 4,571 4,571 78,615 1,200,490 1,200,490 813,207 813,207 2,682,302 2,596,674 687,708 670,978 291,382 291,382 35,366 34,876 1,981 2,560 5,712,436 5,610,167 (5,424,801) (5,279,842) 287,635 330,325 292,206 408,940

1,200,490 813,207 2,681,256 687,708 291,382 5,674,043 (5,386,408) 287,635 347,246

1,200,490 813,207 2,595,628 670,978 291,382 579 5,572,264 (5,241,939) 330,325 789,568

No interest charged No interest charged At cost of fund At cost of fund No interest charged At cost of fund At cost of fund

161

During the current year, the Company received land amounting to Baht 74.0 million from an associated company and investments amounting to Baht 315.2 million from subsidiary companies for debt settlement. The Company offset these amounts against the balance of loans to these companies and used the land and investments to settle indebtedness to creditors per rehabilitation plan. The Company and its subsidiary companies believe that there will be no doubtful debt beyond the amount set aside.

16. CASH DEPOSITED AS COLLATERAL FOR DEBT SETTLEMENT Since certain amounts of the Company没s debt are pending the final court judgement or the comptroller没s order, the Company deposited Baht 555.1 million of cash with the Central Bankruptcy Court as guarantees for debt settlements, of which Baht 512.6 million are provided as collateral for settlement of unsecured creditors. The cash deposits are Baht 95.6 million lower than the highest debt amounts per the proportions which the Company is obliged to pay in accordance with the rehabilitation plan. The remaining cash deposits of Baht 42.5 million are deposited as collateral for the settlement of secured creditors and unsecured creditors for which other parties没 assets are placed as security. Both are entitled to receive repayment in the form of ordinary shares of BTSC and some other assets of the Company and other parties, which the Company did not transfer to the creditors but instead provided cash as a guarantee. The remaining cash deposits are Baht 416.5 million lower than the highest debt amount per the proportion at which the Company is obliged to transfer assets to the creditors in accordance with the rehabilitation plan. On 7 November 2006 and 2 February 2007, the Company filed a request for the return of cash deposited as collateral for debt settlement of the unsecured creditors with the Central Bankruptcy Court since the cash deposited with the Court by the Company was Baht 194.1 million in excess of the amount of debt to be settled. Subsequently on 12 January 2007 and 8 March 2007, the Company received the return of this cash from the Central Bankruptcy Court, leaving cash totaling Baht 318.5 million deposited as collateral for debt settlement of the unsecured creditors with the Court, which are still Baht 95.6 million lower than the highest debt amounts at the proportion which the Company is obliged to pay in accordance with the rehabilitation plan. Currently, the outstanding balance of cash deposited as collateral for debt settlement is Baht 361.0 million.

17. ASSETS AWAITING TRANSFER UNDER REHABILITATION PLAN

162

As discussed in Note 6 to the financial statements, the Company没s lenders and some of its subsidiary companies没 lenders had currently submitted the claims according to the process of the business rehabilitation in which the part of assets of the Company and its subsidiary companies are to be transferred to settle debts with creditors per rehabilitation plan. The Company and its subsidiary companies consequently classified various assets (excluding invest ments in subsidiary companies) transferred to settle debts to assets awaiting transfer under rehabilitation plan. During the current year, the Company transferred certain assets of the Company and another company pledged as collateral to creditors per the rehabilitation plan and deposited certain assets with the Deposit of Property Central Office, Legal Execution Department as collateral for debt repayment. The Company adjusted the value of such assets in accordance with the values stipulated in the rehabilitation plan and therefore recorded gain on transfer of assets for debt settlement amounting to Baht 239.7 million. Assets awaiting transfer under rehabilitation plan are detailed below. (Unit : Thousand Baht) Consolidated financial statements 2007 2006 937,770 937,770 Real estate development costs - net 449,898 506,948 Land held for future development - net 188,990 215,287 Property, plant and equipment - net 1,633,708 1,602,955 Total 239,748 Add : Gain on transfer of assets for debt settlement (563,386) Less : Transferred assets to creditors perrehabilitation plan 1,602,955 1,602,955 Net

Separate financial statements 2007 2006 937,770 937,770 502,248 445,198 38,525 41,297 1,478,543 1,424,265 239,748 (563,386) 1,154,905 1,424,265

The Company is in the process of negotiating the transfer of certain assets with the creditors. In addition, certain assets are not transferred to the creditors since some of the Company没s debts are pending the final court judgement or the comptroller没s order.

18. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD/

163

INVESTMENTS IN SUBSIDIARY COMPANIES AWAITING TRANSFER UNDER REHABILITATION PLAN These represent investments in ordinary shares in the following subsidiary and associated companies. INVESTMENTS IN SUBSIDIARY COMPANIES (Separate financial statements) During the year ended 31 March 2006, the Companyûs rehabilitation plan administrator has (Unit : Thousand Baht) Companyûs name Dnal Co., Ltd. Luecha Land Development Co., Ltd. Muang Thong Apartment Co., Ltd. Yong Su Co., Ltd. Tanayong Food and Beverage Co., Ltd. Thana City Golf & Country Club Co., Ltd. Tanayong Planner Co., Ltd. Siam Paging and Communication Co., Ltd. Sampaopetch Co., Ltd. Tanayong Property Management Co., Ltd. Thana City Management Co., Ltd. Thana City Place Co., Ltd. Tac Architects Co., Ltd. Tanayong International Limited Total

Paid-up capital 2006 2007 50,000 10,000 433,500 234,000 1,000 10,000 2,500 1,250 1,000 250 100 30,000 1,000 25

50,000 10,000 433,500 234,000 1,000 10,000 2,500 1,250 1,000 250 100

Percentage owned by the Company 2007 2006 Percent Percent 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Cost method Cost 2007 2006

Equity method Net investment Dividend 2006 2007 2007

680,609 680,609 98,917 137,909 44,000 5,219 5,219 109,092 109,092 437,194 437,194 23,343 537,071 236,570 236,570 78,989 203,788 (308) (413) 1,000 1,000 10,000 10,000 32,436 35,202 2,984 2,984 2,500 2,500 (140) (130) 1,250 1,250 1,000 1,000 (78,777) (78,776) 1,788 12,416 250 250 (139) (69) 100 100 (168) (168) 30,000 30,000 (126) (126) 1,000 1,000 25 25 21,777 330,134 1,510,590 1,510,590 185,770 1,185,066 -

resolved to register the dissolution of Luecha Land Development Co., Ltd., Tanayong Planner Co., Ltd., Thana City Management Co., Ltd., Thana City Place Co., Ltd. and Tac Architects Co., Ltd.. These subsidiary companies are currently liquidating their accounts and the Company will not include the financial statements of such subsidiary companies in its consolidated financial statements following the completion of their liquidation. Under the rehabilitation plan, as discussed in Note 6 to the financial statements, the Company will have to transfer the ordinary shares of Bangkok Mass Transit System Plc. (çBTSCé), United Bangkok Development Co., Ltd., Hwa Kay Thai (Thailand) Co., Ltd., Theppratan Property Co., Ltd., The Exchange Square Co., Ltd. and Time Station Co., Ltd. to settle debts with secured creditors and creditors receiving settlement in accordance with original contracts for debt repayment. This will reduce the Groupûs shareholding in BTSC to 1.86 percent, while

164

all shares held in the other companies will be transferred. The Company has therefore classified its investments in these subsidiary companies as çInvestments in subsidiary companies awaiting transfer under rehabilitation plané and excluded the financial statements of these companies from the consolidated financial statements since 1 June 2005. Investments in subsidiary companies awaiting transfer under rehabilitation plan are detailed as follows: During the current year, the Company transferred the above companiesû shares to creditors per (Unit : Thousand Baht) Consolidated financial statements

Percentage owned Consolidated financial Separate financial 2007 statements statements Percent Percent 31.51 30.41 1,587,507 Bangkok Mass Transit System Plc. 92,427 100 100 United Bangkok Development Co., Ltd. (71,088) 100 100 Hwa Kay Thai (Thailand) Co., Ltd. 12,280 80 80 Theppratan Property Co., Ltd. 1,655 100 100 The Exchange Square Co., Ltd. 173,158 75 75 Time Station Co., Ltd. 1,795,939 (368,505) Less : Provision for loss on diminution in value of investments (11,938) Adjusted capital reserve on consolidation 1,415,496 Total Add : Received shares of other companies which is the Companyûs guarantors 809,912 Gain on transfer of assets for debt settlement (2,001,065) Less : Transferred assets to creditors per rehabilitation plan 224,343 Net

Separate financial statements

Companyûs name

2006

2007

2006

1,587,507 960,858 960,858 92,427 92,427 92,427 (71,088) (71,088) (71,088) 12,280 12,280 12,280 1,655 1,655 1,655 173,158 173,158 173,158 1,795,939 1,169,290 1,169,290 (368,505) (278,034) (278,034) - (11,938) 891,256 1,427,434 879,318 891,256 507,710 809,912 (2,001,065) 1,427,434 195,875

891,256

rehabilitation plan and deposited certain shares with the Deposit of Property Central Office, Legal Execution Department as collateral of debt repayment. The Company adjusted the value of such companiesû shares in accordance with the values stipulated in the rehabilitation plan and therefore recorded gain on transfer of assets for debt settlement amounting to Baht 809.9 million. The remaining BTSCûs 72,000,000 ordinary shares, equivalent to 5.92 percent owned by the Groupûs shareholding, were not transferred to the creditors since some of the Companyûs debts are pending the final court judgement.

165

INVESTMENTS IN ASSOCIATED COMPANIES (Consolidated and separate financial statements) (Unit : Thousand Baht)

Companyûs name

Saraburi Property Co., Ltd. Changklan Way Co., Ltd. Golden Island (Thailand) Co., Ltd. Total

Paid - up capital 2006 2007 25,000 185,000

25,000 330,000 185,000

Percentage owned by the Company 2007 2006 Percent Percent 30 30 30.30 35 35

Cost method Cost 2006 2007 7,500 7,500 234,750 69,200 69,200 76,700 311,450

Equity method Net investment Dividend 2007 2006 2007 -

248,865 248,865

On 31 March 2006, the Company entered into an agreement to purchase and to sell 2,000 ordinary shares of Changklan Way Co., Ltd. (hereinafter called çChangklané) for Baht 150,000 per share, a total of Baht 300 million, to individuals and a company. The Company received payment of Baht 1.1 million on the contract date. During the current year, the Company received Baht 150 million from the sales of 1,000 ordinary shares of Changklan at a price of Baht 150,000 per share, and transferred these ordinary shares to the individuals and company. As a result, the Companyûs percentage holding decreased to 15.15 percent and the Company has therefore classified its investment as çOther long-term investmentsé and not recorded share of income (loss) from the investment in the current year. The Company recorded gain of approximately Baht 25.6 million on the sales of this investment presented as a separate item under the caption of çGain on sales of investment in associated companyé in the income statements for the current year. Under the above agreement to purchase and to sell, the buyer was to pay the remaining Baht 149 million from the sale of Changklan in full within September 2006. However, the buyer was unable to comply with the agreement. Subsequently, the Company sent the buyer a letter dated 7 November 2006 requesting the buyer to take the shares and pay the remainder of the share price to the Company. To date, the Company has not yet received the remaining share price from the buyer.

166

19. OTHER LONG-TERM INVESTMENTS (Unit : Thousand Baht) 2007 2006 Consolidated Consolidated Separate Separate financial statements financial statements financial statements financial statements Percentage of Percentage of Percentage of Percentage of shareholding Company没s name Amount shareholding Amount shareholding Amount shareholding Amount Percent Percent Percent Percent 36,000 36,000 2.32 2.32 2.32 Siam Sat Network Co., Ltd. 36,000 2.32 36,000 2,000 2,000 0.17 0.17 0.17 Chanthaburi Country Club Co., Ltd. 2,000 0.17 2,000 3,000 15.00 3,000 15.00 Community and Estate Management Co., Ltd. 15.00 3,000 15.00 3,000 578 578 0.01 0.01 0.02 Bangkok Land Plc. 643 0.02 643 1.52 366,426 1.52 366,426 1.52 366,426 1.52 Time Regency Co., Ltd. 366,426 73,879 36,006 1.86 1.69 1.86 Bangkok Mass Transit System Plc. 73,879 1.69 36,006 15.15 124,433 15.15 124,433 Changklan Way Co., Ltd. 606,316 568,443 Total 481,948 444,075 Less : Provision for loss on diminution (494,527) (456,654) in value of investments (477,046) (439,173) 111,789 111,789 Net 4,902 4,902

20. LAND HELD FOR FUTURE DEVELOPMENT

Land held for future development Less : Assets transferred for debt repayment Less : Allowance for impairment Less : Assets transferred to assets awaiting transfer under rehabilitation plan - net Net

Consolidated financial statements 2007 2006 5,130.3 5,056.1 (2,005.2) (2,005.2) 3,125.1 3,050.9 (2,000.3) (1,965.7) 1,124.8 1,085.2 (523.9) 1,602,955 600.9

(449.9) 1,602,955 635.3

(Unit : Million Baht) Separate financial statements 2007 2006 3,099.3 3,025.2 (324.3) (324.3) 2,775.0 2,700.9 (1,684.7) (1,650.1) 1,090.3 1,050.8 (519.2) 1,154,905 571.1

(445.2) 1,424,265 605.6

The Company and its subsidiary companies have mortgaged their land and constructions thereon with banks and financial institutions to secure credit facilities granted to the Company and its subsidiary companies. The Company没s lenders and some of the subsidiary companies没 lenders had submitted the claims according to the process of the business rehabilitation in which the part of land are to be transferred to settle debts with creditors per rehabilitation plan.

167

During the year ended 31 March 2006, the Company and its subsidiary companies classified the land held for future development being transferred to settle debts as assets awaiting transfer, presented them as çAssets awaiting transfer under rehabilitation plané in the balance sheets, as discussed in Note 17 to the financial statements. Land of Baht 539.5 million of which the Companyûs ownership is 70 percent was seized by the Legal Execution Department for compulsory sale by auction, by court order as a result of the Company having sued the other owners. Currently, the Company successfully bid for the land at the open auction and is in the process of negotiating settlement with the Legal Execution Department.

21. PROPERTY, PLANT AND EQUIPMENT (Unit : Baht)

Land Cost /Revalued amount : 207,044,233 As at 31 March 2006 Additions Disposals 2,021,302,379 Revaluations 2,228,346,612 As at 31 March 2007 Accumulated depreciation As at 31 March 2006 Depreciation for the year Depreciation on disposals As at 31 March 2007 Allowance for impairment 1,420,000 As at 31 March 2006 Impairment of advance for purchase of land paid to prior shareholders before acquisition of subsidiary 100,000,000 company 29,138,612 Impairment from appraisal 130,558,612 As at 31 March 2007 Net book value : 205,624,233 As at 31 March 2006 2,097,788,000 As at 31 March 2007 Depreciation charges for the years as included selling, servicing and administrative expenses : 31 March 2006 31 March 2007

168

Consolidated financial statements Revaluation basisà Cost basis Furniture Buildings Golf course Motor and development and office equipment vehicles improvements costs

Total

638,883,618 549,693,165 213,759,061 82,743,085 31,692,123,162 7,762,798 689,000 8,451,798 (155,100) (155,100) 2,021,302,379 638,883,618 549,693,165 221,521,859 83,276,985 3,721,722,239 333,662,634 217,469,166 207,801,038 82,733,761 841,666,599 31,083,237 10,258,822 2,114,278 43,456,337 (155,099) (155,099) 364,745,871 227,727,988 209,915,316 82,578,662 884,967,837 -

149,377,540 286,116,333 149,377,540 286,116,333

1,420,000

100,000,000 464,632,485 566,052,485

305,220,984 332,223,999 5,958,023 124,760,207 35,848,844 11,606,543

9,324 849,036,563 698,323 2,270,701,917

77,972,465 43,456,337

(Unit : Baht) Revaluation basis

Land Cost /Revalued amount : 92,844,233 As at 31 March 2006 Additions Disposals 2,021,302,379 Revaluations 2,114,146,612 As at 31 March 2007 Accumulated depreciation : As at 31 March 2006 Depreciation for the year Depreciation on disposals As at 31 March 2007 Allowance for impairment : As at 31 March 2006 29,138,612 Impairment from appraisal 29,138,612 As at 31 March 2007 Net book value : 92,844,233 As at 31 March 2006 2,085,008,000 As at 31 March 2007 Depreciation charges for the years as included in selling, servicing and administrative expenses : 31 March 2006 31 March 2007

Buildings and improvements

Separate financial statements Cost basis Golf course development costs

Furniture and office equipment

Motor vehicles

Total

633,335,559 549,693,165 140,149,037 81,184,985 1,497,206,979 6,355,079 689,000 7,044,079 (155,100) (155,100) 2,021,302,379 633,335,559 549,693,165 146,504,116 81,718,885 3,525,398,337 326,423,014 217,469,166 137,351,217 81,175,665 762,419,062 31,083,237 10,258,822 1,515,254 43,699 42,901,012 (155,099) (155,099) 357,506,251 227,727,988 138,866,471 81,064,265 805,164,975 149,377,540 286,116,333 149,377,540 286,116,333

464,632,485 566,052,485

306,912,545 332,223,999 2,797,820 9,320 734,787,917 126,451,768 35,848,844 7,637,645 654,620 2,255,600,877

52,737,323 42,901,012

The Company arranged for an independent professional valuer to appraise the value of certain assets in 2007 on an asset-by-asset basis. The basis of the revaluation was as follows:- Land was revalued using the market approach. - Buildings and improvements were revalued using the depreciated replacement cost approach.

169

The Company recorded the increases and decreases of the revaluation of those assets as follows: (Unit : Baht)

Land Revaluation surplus : Adjustment the increase in value against revaluation surplus in shareholders没 equity Allowance for impairment : Diminution in value recorded as expenses in income statements Total

Consolidated and separate financial statements Golf course Buildings and development improvements costs

Total

2,021,302,379

(29,138,612) 1,992,163,767

(149,377,540) (149,377,540)

(286,116,333) (286,116,333)

(464,632,485) 1,556,669,894

As at 31 March 2007, certain plant and equipment items have been fully depreciated but are still in use. The original costs of those assets amounted to approximately Baht 584 million (2006: Baht 413 million) (Separate financial statements: Baht 321 million (2006: Baht 316 million). The Company has mortgaged land and construction thereon with net book value as at 31 March 2007 of Baht 2,228.7 million as collateral for guarantee facility granted by bank.

22. LEASEHOLD RIGHTS (Unit : Baht) Consolidated and separate financial statements Costs : As at 31 March 2006 Addition As at 31 March 2007 Accumulated amortisation : As at 31 March 2006 Amortisation for the year As at 31 March 2007 Net book value : As at 31 March 2006 As at 31 March 2007 Amortisation charges for the years as included in cost of sales and selling, servicing and administrative expenses 31 March 2006 31 March 2007

170

12,000,000 6,489,400 18,489,400 6,400,000 451,503 6,851,503 5,600,000 11,637,897

400,000 451,503

23. CONDOMINIUMS AND FIXTURES FOR LEASE (Unit : Baht) Consolidated and separate financial statements

Net book value as at 31 March 2006 -Amounts transferred from real estate development costs Acquisition of fixtures during the year - at cost Depreciation for the year Allowance for impairment Net book value as at 31 March 2007

217,360,000 5,542,345 (5,269,186) (13,631,008) 204,002,151

24. CREDITORS PER REHABILITATION PLAN Following the court order for the Company to enter into business rehabilitation, customers, creditors and lenders were invited to lodge claims for settlement of debts with the comptroller in Bankruptcy. The Company adjusted most of its liabilities in accordance with claims lodged by creditors or the comptrollerûs orders. The Company has therefore reclassified these liabilities and presented them as liabilities under the caption of çCreditors per rehabilitation plané in the balance sheets. During the current year, the Company adjusted certain liabilities which the Company had recorded in its books at a value higher than the balance per the comptrollerûs order, to leave amounts equal to the liability per the comptrollerûs order. The Company recorded the differences adjusted, amounting to Baht 1,597.4 million, as a separate item under the caption of çReversal of liabilities in excess of amounts per comptrollerûs orderé in the income statements of the current year. During the current year, the Company transferred certain assets of the Company and of other companies pledged as collateral to creditors per rehabilitation plan and deposited certain assets with the Deposit of Property Central Office, the Legal Execution Department and the Central Bankruptcy Court as collateral for debt settlement. The Company adjusted the value of such assets in accordance with the values stipulated in the rehabilitation plan. As discussed in Note 17 and 18 to the financial statements, the Company recorded gain on transfer of assets for debt settlement totaling Baht 1,049.6 million, presented as the separate item under the caption of çGain on transfer of assets for debt settlementé in the income statements for the current year.

171

As the Company repaid most of its debts by means of cash repayment, allocation of the Companyûs additional issued shares to the creditors, and transfers of certain assets of the Company and other companies placed as collateral, deposited some of its assets and the Companyûs shares in the name of a subsidiary company with the Deposit of Property Central Office, the Legal Execution Department and the Central Bankruptcy Court as collateral for debt settlement as stipulated in the rehabilitation plan, and on 14 November 2006 were ordered by the Central Bankruptcy Court to terminate the Companyûs business rehabilitation. The Company therefore recorded the reduction of its debts to be equivalent to undue debts, the highest debt amounts at the proportion which the Company is obliged to pay, and the debts of which the Company is an assets selling agent, totaling Baht 4,767.5 million (Separate financial statements : Baht 4,768.6 million). The Company recorded a gain on debt restructuring amounting to Baht 24,442.9 million (Separate financial statements: Baht 25,072.9 million) arising from the reduction of its debts as an extraordinary item in the caption of çGain on debt restructuringé in the income statements for the current year. Creditors per rehabilitation plan are detailed as follows: Consolidated financial statements 2007 2006 Secured creditors/Unsecured creditors for which other partiesû assets are placed as security Unsecured creditors Creditors receiving settlement in accordance with original contracts Less : Transferred assets for debt settlement Issued additional shares for debt settlement Cash paid for debt settlement Less : Gain on debt restructuring Total Less : Current portion Net

172

(Unit : Thousand Baht) Separate financial statements 2007 2006

3,872,954 22,797,820

4,325,413 23,942,765

3,872,954 23,518,321

4,325,413 24,663,266

6,895,405 33,566,179 (2,564,451) (248,878) (1,542,427) 29,210,423 (24,442,879) 4,767,544 (4,020,977) 746,567

6,896,465 35,164,643 35,164,643 35,164,643 (35,164,643) -

6,895,405 34,286,680 (2,564,451) (266,667) (1,613,997) 29,841,565 (25,072,938) 4,768,627 (4,021,247) 747,380

6,896,465 35,885,144 35,885,144 35,885,144 (35,885,144) -

The outstanding balances as at 31 March 2007 are detailed as follows: (Unit : Thousand Baht) Consolidated financial statements Debts of which the Debts pending Company is an for the final Total assets selling agent judgement Undue debts Secured creditors/Unsecured creditors for which other parties没 assets are placed as security Unsecured creditors Total Less : Current portion Net

3,089,205 3,089,205 (3,089,205) -

459,021 426,054 885,075 (806,620) 78,455

793,264 793,264 (125,152) 668,112

3,548,226 1,219,318 4,767,544 (4,020,977) 746,567

(Unit : Thousand Baht) Separate financial statements Debts of which the Debts pending for the final Company is an Total assets selling agent judgement Undue debts Secured creditors/Unsecured creditors for which other parties没 assets are placed as security Unsecured creditors Total Less : Current portion Net

3,089,205 3,089,205 (3,089,205) -

459,021 426,054 885,075 (806,620) 78,455

794,347 794,347 (125,422) 668,925

3,548,226 1,220,401 4,768,627 (4,021,247) 747,380

Under the rehabilitation plan, creditors of the Company have been grouped as follows: Secured creditors/Unsecured creditors secured for which other parties没 assets are placed as security - Group 1 Secured creditors comprising less than 15 percent of total indebtedness - Group 2 Unsecured creditors guaranteed by other individuals or juristic persons who agree to transfer collateral to the creditors Unsecured creditors - Group 3 - Financial institutions - Group 4 - Consulting fees - Group 5 - Creditors under guarantees provided by the Company for loans of the original borrowers - Group 6 - Non financial-institution creditors

173

Group 7 - Euro Convertible Bondholders Group 8 - Land sale creditors Group 9 - Creditors claiming compensation for physical injury Group 10 - Creditors under guarantees provided by the Company in accordance with concessions agreements - Group 11 - Swap transaction creditors - Group 12 - Administrative expenses and costs of services related to financial instruments - Group 13 - Dividend creditors - Group 14 - Creditors who are juristic condominiums - Group 15 - Creditors under agreements to purchase and to sell property or subleasing agreements - Group 16 - Creditors under court judgements - Group 17 - Trade creditors - Group 18 - Guarantors of the Company没s debts - Group 19 - Government agencies and state organisations - Group 20 - Subordinated creditors Creditors receiving settlement in accordance with original contracts - Group 21 Creditors who entered into agreements to purchase and to sell BTSC shares, creditors under agreements to provide financial support made with shareholders (Note 35.3), and creditors under guarantees provided for any damages incurred as a result of decoration and/or construction and/or rental

25. SHORT-TERM LOANS AND ADVANCES FROM RELATED PARTIES (Unit : Thousand Baht) Consolidated financial statements 2006 2007 Related companies Tin Tin Co., Ltd. Others Total

174

10,951 478 11,429

Separate financial statements 2007 2006 -

Interest policy No interest charged No interest charged

26. LOANS FROM RELATED PARTIES (Unit : Thousand Baht) Consolidated financial statements Separate financial statements 2006 2007 2007 2549 Associated company Changklan Way Co., Ltd.(1) Related companies Hwa Kay Thai (Thailand) Co., Ltd. Changklan Way Co., Ltd.(1) Others Total

Interest policy

3,324 3,324

No interest charged

6,483 2,324 744 9,551 9,551

6,501 410 6,911 10,235

No interest charged No interest charged No interest charged

(1)

Changed status from associated company to related company during the current year (Note 18 to the financial statements).

27. ADVANCE RECEIVED FROM TRANSFER OF SUBLEASING AGREEMENT On 17 March 2006, the Company entered into various agreements to sublease condominium units located on leasehold land, as detailed below. Condominium unit subleasing agreement The Company entered into contracts to sublease condominium units to a foreign company (Ratchadamri Road Limited hereinafter called Ă§RatchadamriĂŠ) whereby the Company is to sublease all 81 units and received advance payment for the sublease period of approximately Baht 133.3 million. Put and call option agreements The Company has a right to claim back subleased condominium units by making payment of the higher of Baht 133.3 million and USD 3.3 million at the exchange rate on the day before the option is exercised, plus additional payment at a rate of 15 percent per annum, and in any case not less than the higher of Baht 10 million and USD 0.25 million at the exchange rate on the day before the exercise date, which is considered to be compensation for contract cancellation. On contract date, the Company has to pay Baht 6.6 million for the option to claim back the subleased condominium units and if it does not exercise this call option within 13 September 2006, it has to pay the higher of Baht 6.6 million and USD 0.17 million at the exchange rate as at 12 September 2006.

175

Ratchadamri has an option to return the subleased condominium units at a price of the higher of Baht 133.3 million and USD 3.3 million at the exchange rate on the day before the option is exercised, plus additional payment at a rate of 15 percent per annum, and in any case not less than the higher of Baht 10 million and USD 0.25 million at the exchange rate on the day before the exercise date. The Company and Ratchadamri may exercise their options within 17 March 2007. Conditional assignment agreement The Company entered into a conditional assignment agreement with conditions relating to the transfer of rights and obligations to comply with a land rental contract with a government agency. If the Company is unable to claim the subleased condominium units back as per contract, the Company is to register the transfer of the leasehold rights to the land on which the condominium units are located to Ratchadamri so that Ratchadamri can manage the condo minium units. The Company has to conform with certain conditions stipulated in the agreements. Subsequently, on 25 September 2006, the Company entered into call notice and settlement agreement with Ratchadamri in order to amend the conditions of settlement of the subleasing fee together with additional payment and compensation, as detailed below. Term 1 2 3 4 5

Date 29 September 2006 31 December 2006 31 January 2007 28 February 2007 31 March 2007

Currently, the Company has complied with the agreement.

176

Baht 45,206,598 26,250,000 26,250,000 26,250,000 26,250,000 150,206,598

28. SHARE CAPITAL / PREMIUM ON ORDINARY SHARES / STATUTORY RESERVE On 6 October 2006, the Company registered changes in its share capital with the Ministry of Commerce, from an issued and paid share capital of Baht 533,333,333 (533,333,333 ordinary shares with a par value of Baht 1 each) to Baht 5,333,333,333 (5,333,333,333 ordinary shares with a par value of Baht 1 each). The Baht 4,800,000,000 increase in the Companyûs issued and paid share capital was the result of the acquisition of Baht 4,266,666,667 of new shares (4,266,666,667 ordinary shares with a par value of Baht 1 each) by the Companyûs new investors, as discussed in Note 6 to the financial statements and the conversion of debt of Baht 533,333,333 to equity (533,333,333 ordinary shares with a par value of Baht 1 each) in accordance with the rehabilitation plan. Ordinary shares amounting to Baht 275,628,054 (275,628,054 ordinary shares with a par value of Baht 1 each) were registered in the name of a subsidiary company, given that the share certificates cannot be issued to the creditors as certain amounts of debt are not due while some are pending for the final court judgement or the comptrollerûs order. Consequently, the numbers of shares allocated to each creditor are stilluncertain as the debt ratio might be altered according to the final court judgement. The Company recorded issuance of additional shares and conversion of debt to equity at a fair value of Baht 0.50 per share, resulting in discounts on ordinary share capital amounting to Baht 2,400,000,000. The discount on ordinary share capital was recorded as a deduction against the premium on ordinary shares, leaving premium on ordinary shares of Baht 5,199,757,298. In accordance with the rehabilitation plan, the remaining premium on ordinary shares and statutory reserve amounting to Baht 365,563,524 were offset with the deficit as at the date of the capital increase.

29. REVALUATION SURPLUS This represents surplus arising from revaluation of land as discussed in Note 21 to the financial statements. The revaluation surplus can neither be offset against deficit nor used for dividend payment.

30. COMPANYûS SHARES HELD BY SUBSIDIARY COMPANIES The Company allocated 35,577,912 ordinary shares at a price of Baht 0.50 each or for a total of Baht 17,788,956 to subsidiary companies as the Companyûs creditors, and recorded this amount under the heading of .Companyûs shares held by subsidiary companiesé, presented as a deduction from the shareholdersû equity in the balance sheets.

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Subsequently on 29 November 2006, a subsidiary company sold 3,800,000 shares in the Company to the Company没s directors, at a price of Baht 0.50 each, totaling Baht 1,900,000. As a result, 31,777,912 shares at a price of Baht 0.50 each, totaling Baht 15,888,956 of the Company没s shares are held by subsidiary companies.

31. RELATED PARTY TRANSACTIONS During the years, the Company and its subsidiary companies had significant business transactions with related parties, which have been concluded on commercial terms and bases agreed upon in the ordinary course of businesses between the Company and those companies. Below is a summary of those transactions. (Unit : Million Baht) For the years ended 31 March Pricing policy 2007 2006 Consolidated and separate financial statements Transaction with related companies Interest income Separate financial statements Transaction with subsidiary companies Interest income

100

119

At cost of fund

103

145

At cost of fund

The outstanding balances of the above transactions were shown as separate items in the balance sheets. Directors and management没s remuneration During the current year, meeting allowances and gratuities to their directors and management totaling Baht 15.1 million (2006 : Baht 11.3 million). 32.

CORPORATE INCOME TAX The Company is not liable to corporate income tax for the year due to tax loss brought forward.

33.

NUMBER OF EMPLOYEES AND RELATED COSTS Separate Consolidated financial statements financial statements Number of employees at end of the year (Persons) Employee costs during the year (Thousand Baht)

178

2007 225 53,811

2006 212 43,285

2007 83 30,242

2006 57 20,178

34. BASIC EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income (loss) for the year by the weighted average number of ordinary shares in issue during the year net of the number of the Company没s shares held by subsidiary companies. 35.

COMMITMENTS AND CONTINGENT LIABILITIES 35.1 Capital commitments - The Company had outstanding commitment of approximately Baht 1,802 million in respect of the construction contract of low-cost residential housing projects of which the Company had already entered into an agreement with contractors. - The Company had outstanding commitment of approximately Baht 20 million in respect of the consultation fees of low-cost residential housing projects. - The Company had outstanding commitment of approximately Baht 13 million in respect of the land improvement of low-cost residential housing projects. - The Company had outstanding commitment of approximately Baht 143 million in respect of the purchase of land for the low-cost residential housing project development. - The Company had outstanding commitment of approximately Baht 797 million in respect of the purchase of land of a company which is in the process of being established. 35.2 Operating lease commitment - The Company has entered into leasehold agreements for the period of 30 years, as from 1 July 1997 and 1 December 1997. A monthly rental charge is Baht 200,000 and Baht 500,000, respectively and will be increased by 5 percent each year of the lease period. 35.3 Other commitment - BTSC filed a claim with the Comptroller in Bankruptcy seeking settlement of liabilities of Baht 2,083,703,957 in respect of financial support provided by the principal shareholders under the Principal Shareholders Subordinated Debt Facilities Agreement. BTSC agreed to the termination of commitments under such agreement under a letter written as plan administrator dated 27 March 2006 since it believes the rights under such agreement give rise to the receipt of more liabilities than benefits from the Company. Currently, BTSC is under rehabilitation plan.

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35.4 Guarantees - As at 31 March 2007, there was outstanding bank guarantee of Baht 420 million issued by bank on behalf of the Company to the National Housing Authority for the low-cost residential housing projects. - The Company and its subsidiary companies have mortgaged 1,627 rai of their land and buildings amounting to approximately Baht 1,560 million (2006 : 1,627 rai amounting to approximately Baht 1,603 million) with banks and financial institutions to secure against the secured bonds and other credit facilities granted to the Company and its subsidiary companies. Under the rehabilitation plan, the Company and its subsidiary companies will have to transfer such land and buildings to settle debts with creditors per rehabilitation plan. During the current year, the Company transferred 57 Rai of land and buildings amounting to approximately Baht 250 million to some of creditors per rehabilitation plan. The Company is in the process of negotiating the transfer of the remaining assets with the creditors. In addition, certain assets are not transferred to the creditors since some of the Company没s debts are pending the final court judgement or the comptroller没s order. 35.5 Litigation - The Company has been sued by customers of land and condominium project calling to pay compensation amounting to approximately Baht 78.2 million for allegedly wrongful termination of the contracts to purchase and to sell. - The Company has been sued by a contractor and a creditor calling to pay compensation amounting to approximately Baht 60.6 million for allegedly wrongful termination of construction and advertising contracts. However, the Company believes that it will suffer no losses significantly as a result of this litigation. - A creditor has sued the Company for the refund cost of land, amounting to approximately Baht 237.5 million, plus interest at the rate of 7.5 percent per annum as from 7 October 1994. The land price was outstanding because the creditor had breached a condition of the contract to purchase and to sell the land. - The Company has been sued by a local financial institution, together with its directors, for repayment of a short-term loan and interest charges amounting to Baht 150.5 million. - The Company and its subsidiary company have been sued by account payable for land fee, together with their directors, for repayment of land of approximately Baht 436.8 million. The price of the land was outstanding because the creditor had breached a condition of the contract to purchase and to sell the land. However, the

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Company and its subsidiary company believe that they will suffer no losses signifi cantly as a result of this litigation. - The group of bondholders of the convertible bonds and secured bonds have brought litigation against the Company in overseas courts. The courts judged in favor of the bondholders and ordered the Company to repay all indebtedness to the convertible bondholders and transfer all secured assets of the Company and its subsidiary companies to the secured bondholders. Such assets have a net book value as at the balance sheet date of approximately Baht 1,231.5 million. Subsequently, the Company has been sued by a local bank, together with its two subsidiary companies, for payment of secured bonds, plus interest charged and other related expenses of approximately Baht 4,250.8 million. The case is in the process of the appeal of these subsidiary companies. Therefore, those subsidiary companies have set up no contingent liability in their accounts. On 9 October 2001, the representative of the group of bondholders of the convertible bonds lodged a bankruptcy suit against the Company with the Central Bankruptcy Court for debt totaling USD 130 million, seeking to have the Company settle all indebtedness. The plaintiff of various cases had submitted the claims to the comptroller according to the rehabilitation plan. On 14 November 2006, the Central Bankruptcy Court ordered the termination of the Company没s business rehabilitation; the cases filing prior to the order of rehabilitation from the Central Bankruptcy Court are consequently terminated. Currently, the Company is in the process of the remaining debt settlement in accordance with the terms stipulated in the rehabilitation plan. However, some debt balances are pending the final court judgement or the comptroller没s order. The litigations related to its subsidiary companies and its directors are going on.

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36. SEGMENT INFORMATION The Company and its subsidiary companies没 financial information of real estate business, rental and services business and hotel business in the consolidated financial statements for the years ended 31 March 2007 and 2006 are as follows: For the years ended 31 March Rental and services Real estate Hotel Other business business business revenues 2007 2006 2007 2006 2007 2006 2007 2006 609 77 77 82 35 39 24 88 (187) (131) (19) - (108) (10) 24 88

Revenues Segment operating income (loss) Share of income from investments accounted for under equity method - associated companies Share of income from investments accounted for under equity method - subsidiary companies awaiting transfer under rehabilitation plan Reversal of liabilities in excess of amounts per comptroller没s order Gain on transfer of assets for debt settlement Gain on sales of investment in associated company Interest income Doubtful debts Loss on provision for impairment of property, plant and equipment Loss on provision for impairment of assets Loss on adjustment of the value of loans according to the related company没s rehabilitation plan Loss on provision for loss on diminution in value of investments Loss on exchange rate Income (loss) before interest expenses and corporate income tax Interest expenses Corporate income tax Income (loss) before extraordinary item Extraordinary item Gain on debt restructuring Net income (loss) for the year

182

(Unit : Million Baht)

Total Elimination 2007 2006 2007 2006 (3) 26 742 312 (1) 26 (291) (27) -

- 2,706 1,597 1,256 1,050 26 105 119 (116) (3,415) (465) (73) (42) (17) 1,774 (2) 1,772

(442) (441) (229) (220) (1) (450)

24,443 26,215 (450)

The Company and its subsidiary companies没 assets of real estate business, rental and service business and hotel business in the consolidated financial statements as at 31 March 2007 and 2006 are as follows :-

Real estate development costs - net Land held for future development - net Property, plant and equipment - net Assets awaiting transfer under rehabilitation plan - net Investments in subsidiary companies awaiting transfer under rehabilitation plan - net Other assets Total assets

Real estate business 2007 2006 1,079 1,313 601 635 2,268 747

Rental and service business 2007 2006 2 1

(Unit : Million Baht) Hotel business 2007 2006 1 101

Total 2007 2006 1,079 1,313 601 635 2,271 849 1,310

1,603

224 1,460 6,945

1,427 965 6,792

37. FINANCIAL INSTRUMENTS 37.1 Financial risk management The Company and its subsidiary companies没 financial instruments, as defined under Thai Accounting Standard No. 48 莽Financial Instruments: Disclosure and Presentations茅, principally consist of the following. Financial assets Financial liabilities - Cash and cash equivalents - Accounts payable - trade - Short-term investment - Short-term loans and advances from - Accounts receivable - trade related parties - Advances for land procurement of low-cost - Creditors per rehabilitation plan residential housing projects - Advances received from employer and - Advances for purchase of land deferred construction revenue - Other receivable - net - Loans from related parties - Restricted deposits - Cash deposited as collateral for debt settlement - Loans to related parties - net

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The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiary companies are exposed to credit risk primarily with respect to trade accounts receivable and loans. The Company and its subsidiary companies manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect toincur material financial losses. In addition, the Company and its subsidiary companies do not havehigh concentration of credit risk since they have various and large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivable and loans as stated in the balance sheets. Interest rate risk Interest rate risk is the risk that future fluctuations in market interest rates will affect the operating results and cash flows of the Company and its subsidiary companies. The Company and its subsidiary companies consider themselves no interest rate risk because the Company and its subsidiary companies have most of financial assets carrying floating interest rate which will fluctuate in line with the market interest rates or fixed interest rates which approximate the current market interest rate and most of financial liabilities under the rehabilitation plan and no interest. Foreign currency risk Foreign currency risk is the risk that the value of financial instruments will fluctuat because of changes in foreign exchange rate. The Company and its subsidiary companies consider themselves no foreign currency risk because the Company and its subsidiary companies have most of financial assets in foreign currency, loans to related parties which were recorded allowance for doubtful debts in full amount. 37.2 Fair value of financial instruments Since the majority of the Company and its subsidiary companies没 financial assets and liabilities are short-term or have interest rates close to the market rates and under the rehabilitation plan. The fair values of these financial assets and liabilities are not expected to differ materially from the amounts presented in the balance sheets. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm没s length transaction. The fair value is

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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.

38. SUBSEQUENT EVENTS The extraordinary meeting of the Company没s shareholders No. 1/2007, held on 3 May 2007, passed the following significant resolutions :a) Approved an increase in share capital from Baht 5,333,333,333 (5,333,333,333 ordinary shares with a par value of Baht 1 each) to Baht 5,813,333,333 (5,813,333,333 ordinary shares with a par value of Baht 1 each) by issuing 480,000,000 ordinary shares with a par value of Baht 1 each in order to invest in a company which is in the process of being established. b) Approved allocation of additional shares a) by means of sales to investors selected by the Board of Directors at a price of Baht 1.28 per share. The Company registered the increase in its share capital with the Ministry of Commerce on 4 May 2007. Subsequently the Company received additional share capital of Baht 614.4 million (480,000,000 ordinary shares with a value of Baht 1.28 each) and registered the increase in its issued and paid share capital with the Ministry of Commerce on 9 May 2007 and 17 May 2007.

39. RECLASSIFICATION Certain amounts in the financial statements for the year ended 31 March 2006 have been reclassified to conform to the current year没s classification, with no effect on previously reported net loss.

40. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorised for issue by the Company没s Board of Directors on 29 May 2007.

Auditor Remuneration Audit Fee The Company and subsidiary companies paid an audit fee to Ernst & Young Office Limited, the office of the auditors for the year ended 31 March, 2007 at the amount of Bath 2,870,000

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References Share Registrar 2nd Capital Market Academy Bldg., 2/7 moo 4 (North Park) Vipavadi Road Thoong Song Hong, Laksri, Bangkok 10110 Tel. 0-2596-9000

Auditors Mr. Supachai Phanyawattano Certified Public Accountant (Thailand) No. 3930

Ernst & Young Office Limited 33rd Floor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road, Bangkok 10110 Tel. 0-2264-0777, Fax. 0-2264-0789-90

Financial Advisor Fn Asia Advisory Co., Ltd. 28th Thaniya PlaZa Bldg. 52 Silom rd., Suriyawong, Bangrak. Bangkok 10500 Tel. 0-2231-2044 Fax. 0-2231-2062

Legal Advisor White & Case (Thailand) Limited 22nd Floor, Mercury Tower 540 Ploenchit Road, Lumpini, Pathumwan, Bangkok Tel. 0 2264-8000 Fax. 0 2657-2222

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