CGS : ANNUAL REPORT 2014 by Phantipa Kwanmuang

1. Policy and an overview of the business. Vision To be financial and investment service leader and to be known as professional and integrity business provider. Mission To achieve the Company’s vision, the Company aims to be a securities brokerage firm with the top five market share in Thailand and to become the best service provider. In addition, the Company intends to serve and offer innovative products and services to meet clients’ needs, and manage business in comply with good corporate governance in order to build confidence to clients and investors as well as support the development of employees’ potential for excellent service to clients. Goal in Business Operation To be a securities brokerage firm with the top five market share and maintain continuous growth in market share The Company plans to join financial exhibitions for trade show and hold a seminar to educate investors and interested people both in Bangkok and provincial areas, especially when the SET launches new products and services e.g. gold futures, derivative warrants, etc. to stimulate new comers to invest in the SET. This will not only expand the Company’s clients base, but also maintain its existing one. In addition, the Company plans to develop a structure of information technology to be more effective and better serve the clients. Also, the Company has policy to maintain human resource to work with the Company in the long run. To be a securities brokerage firm with fully integrated professional services The Company plans to develop the effectiveness and stability of securities and derivatives trading systems in order to support trading capacity, to offer more products and services to meet clients’ needs that enable them to choose appropriate alternatives for investment and manage portfolio efficiently, and to train employees to raise their potential of advising and serving clients with quality. Moreover, the Company plans to restructure the internal management with an aim for fast service and less Complicate procedures. To maintain revenue and profit levels continuously, and seek business opportunity amid market fluctuations The Company will manage efficient resources and utilize them in order to reduces operating costs while generates profit to shareholders. In addition, the Company will seek channels for business expansion and investment with acceptable risks and appropriate returns to reduce a reliance on revenue from securities brokerage business and maintain the company’s revenue base amid securities business affected by external factors such as politics, economy and natural disasters.

To operate business regarding stakeholders The Company will operate business based on virtues, morality and integrity. These principles will benefit all groups of stakeholders such as shareholders, clients, investors, employees and the capital market. In addition, the Company will give support to organizations, educational institutions, and public and private companies with the purpose of development of capital market in order to attract foreign investors.

1.2 History and Major Developments Year 1966 1974 1979 1991 1993 1994 1997 1999 2002

2003 2004 2006

2007

Major Developments Established "Adkinson to the Enterprise Company Limited" Assigned as “Broker No. 3” of the SET Change its name to "Adkinson Securities Company Limited" Received approval from the SET to list its common shares in the SET The common shares of the company were approved as listed securities in the SET Converted to a public company and raised its registered capital from Baht 200 million to Baht 600 million Changed its foreign holding ownership regulation from 25% to 49% of outstanding shares and continued increasing its market capitalization for business expansion purposes Increased the registered capital to Baht 1,785 million for the future conversion of its tranche 1 and tranche 2 warrants which expired on the 14 December 2001 and 2002 respectively Increased the registered capital to Baht 2,414.16 million for financing the purchase of Indosuez W.I. Carr Securities (Thailand) Limited of 99.99% which was purchased on 22 April 2002. Indosuez W.I. Carr Securities (Thailand) Limited was later called IB Securities and was known as Apex Securuties Increased the registered capital to Baht 4,916.51 million for the future expansion of warrant tranche 3 and tranche 4 which expired on 16 January 2004 and 2006 respectively The Board of director elected Mr.Udom Vichayabhai as chairman of the board and elected Mrs.Apar Kewkacha as Chief Executive Officer of the Company Increased paid up capital to Baht 3,223.10 million from the conversion of warrant tranche 3 - Increased paid up capital to Baht 4,195.89 million from the conversion of warrant tranche 4 Changed the board of director structure resulting with the appointment of Professor Prayoon Chindapradist as Chairman and Mr. Sadawut Taechaubol as Chief Executive Officer and President - Merged and closed the operations of 23 branches - Merged and closed the operations of 4 branches and one additional branch was opened. - Transferred its capital reserve of Baht 17,602 and premium on share capital of Baht 813.67 to compensate retained loss as at 31 December 2006 of Baht 901.67. The Company’s retained loss 10

Year

2008

2009

Major Developments was Baht 87.99 million after the compensation - Changed in par value from Baht 10 per share to Baht 1 per share - APEX Securities made a capital reduction from Baht 482.05 to Baht 120.51. This was conducted in preparation for the sales of the APEX license - Adkinson Securities sold and transferred all of its shares in Apex Securities to Merrill Lynch Holdings (Mauritius) - Granted a TFEX license to undertake the derivatives agent from the SEC - The Ministry of Finance had approved the securities business license type Kor No: Lor Kor -000201.This license permits the Company to engage in all categories of securities businesses - SEC approved the Company to conduct the securities underwriting - Due to further branch restructure, the Company merged and closed the operations to 4 branches in 2008 - Increased its investment proportion in MFC Asset Management Plc. to 22.5 percent of its registered capital, which MFC became the associated company - 16 new branches were opened and 3 branches were closed and merged - Decreased of the registered capital from Baht 4,916.51 million to Baht 4,195.89 million by canceling the 720.62 unissued ordinary shares - Decreased of the Company's registered and paid-up capital from Baht 4,195.89 million to Baht 4,038.14 million by decreasing the 157.75 million shares in order to compensate the Company's accumulated losses as at 30 September 2008 of Baht 157.75 million - Decrease of the Company's registered and paid-up capital from Baht 4,038.14 million to Baht 2,300.00 million by decreasing the 1,738.14 shares in order to refund Baht 1,738.14 million to the Company's shareholders - The Company changed its name from Adkinson Securities PLC to Country Group Securities PCL. - Decreased its registered and paid-up capital from Baht 2,300.00 million to Baht 1,866.37 million by decreasing the 433.63 million shares in order to compensate the Company's accumulated losses of Baht 433.63 million as at 30 June 2009 - Issued and offered new ordinary shares not exceeding 466.59 million shares, at a par value of Baht 1.00 per share to the existing shareholders in pro rata basis, by ratio of 4 existing ordinary shares to 1 new ordinary share at the price of Baht 1.30 per share - Issued and offered Warrants to purchase the Companyâ&#x20AC;&#x2122;s ordinary shares No.5 in the amount not exceeding than Baht 466.59 million units to the existing shareholders who subscribe for new ordinary shares and were allocated at the ratio of 1 new ordinary share per 1 unit of Warrant for free. 1 unit of Warrant was entitled to purchase 1 new ordinary share at the price of Baht 1.50 per 11

Year

2010

2011

2012

2013

Major Developments share - The Company issued and offered Warrants to purchase the Companyâ&#x20AC;&#x2122;s ordinary shares under ESOP Program No.1 in the amount not exceeding 350.00 million units to directors, management, employees, and/or advisors of the company for free. 1 unit of Warrant was entitled to purchase 1 new ordinary share at the price of Baht 1.50. - Increased of the registered capital of the company from Baht 1,866.37 to Baht 3,149.55 million by issuing of 1,283.18 million new ordinary shares at a par value of Baht 1 per share - Increased in paid-up capital from Baht 1,866.37 million to Baht 2,330.76 million on 25 January 2010 - Dr, Prasit Srisuwan was appointed as acting Chief Executive Officer, replacing Mr. Bee Taechaubol who resigned, effective 7 September 2010 onwards - Ms. Sudthida Chirapatsakul was appointed as director (authorize to manage), replacing Mr.Bee Taechaubol who resigned, effective September 29, 2010 onwards - Ms. Netchanok Anawan was appointed as acting head of accounting and finance division, and senior vice president of accounting and finance division, replacing Ms. Luxamee Kongvatanasest /senior executive vice president of accounting and finance division, effective1 November 2010 onwards - Appointed Dr, Prasit Srisuwan as Chief Executive Officer, effective 1 May 2011 onwards - Appointed Ms. Netchanok Anawan as head of accounting and finance division, effective 1 April 2011 onwards - Police Major General Werapong Chuenpagdee was appointed as Director (no management authority), replacing director who resigned, effective 23 November 2011 - Appointed Mr.Nipon Wisityuthasart as independent director replacing resigned director, effective 23 November 2011 - Appointed Mr. Tommy Taechaubol as Director (no management authority), replacing Mr. Totsachai Asvinvichit who resigned, and effective 29 May 2012 - Appointed Mr. Chanachai Joonjiraporn as Managing Director , effective 1 May 2012, and appointed as Executive director, effective 29 May 2012 - Increased paid up capital from Baht 2,330.76 million to Baht 2,330.81 million that fromexercising of warrant 5 which expired on 18 January 2013 - Opened 1 new branch , and closed and merged 1 branch - Decreased of the registered and paid-up capital from Baht 3,149.55 million to Baht 2,330.81 million by canceling the 818.74 unissued ordinary shares - Increased of registered capital from Baht 2,330.81 million to Baht 3,189.79 million by issuing of 12

Year

2014

Major Developments ordinary new shares at the amount of 858.98 million at a par value of Baht 1 per share. - Increased of paid up capital from Baht 2,330.81 million to Baht 2,589.74 million on 21 May 2013 - Appointed Ms. Sudthida Chirapatsakul and Mr. Chanachai Joonjiraporn as Chief Executive Officer , replacing Dr. Prasit Srisuwan, which effective on 1 November 2013 - Appointed Mr. Suwit Ratanayanont as President ,effective November 1,2013 - Appointed Mr. Supakrit Choksukthanapong as Managing Director of retail brokerage 4, replacing Mr. Suwit Ratanayanont, which effective on 1 November 2013 - Appointed Mr. Chanachai Joonjiraporn as Director (no management authority) , replacing Dr. Prasit Srisuwan who resigned , which effective on 4 November 2013 - Appointed Mr. Tommy Taechaubol as Director (Management Authority) , effective on 25 November 2013 - CGS was established Country Group Holdings Public Company Limited (“CGH”) to be a holding company of CGS, and CGH made a tender offer for all the securities of CGS

Relationship with the group's business of shareholders - None –

2. Nature of Business 2.1 Business Operations The Company has been approved by Ministry of Finance to operate the following eight businesses: 1. Securities brokerage 2. Securities trading 3. Securities underwriting 4. Investment advisory service 5. Mutual fund management 6. Private fund management 7. Securities borrowing and lending 8. Venture capital management Furthermore, the Company obtained a Derivatives Business license from Securities and Exchange Commission to engage in Derivatives Agent and was approved from Securities and Exchange Commission to act as Financial Advisory.

Securities trading The Company has policy to invest in both equity and debt with the purpose of short and long term trading. Investment committee was set up to determine criteria and regulations of each investment’s types. A strategic plan will be developed yearly for each types of investment. Presently, the Company mainly focuses on debenture trading of institution clients, and also looking for an opportunity to penetrate a retail’s debenture trading. Securities Brokerage The Company provides securities brokerage services to local and foreign individuals, corporate, financial institutions, funds and asset management companies locally and internationally. We provide our trading services through various platforms including trading through marketing staffs and/or Internet to serve our clients’ needs. Currently, we have 3 types of securities trading accounts, namely cash account, cash balance account, and credit balance account. At the end of 2013, there were 56,925 client accounts which 24,208 accounts were active; and at the end of 2014 , there were 57,313 accounts which 20,694 were active. The Company ’s market share and securities trading value in the past 3 years are presented in the table below. Unit : Million (Except specified)

Trading Value* SET mai Trading Value of CGS Market share (%)

2012 7,615,637.96 298,928.56 761,872.92

2013 11,777,210.10 553,458.69 1,070,610.18

2014 10,193,179.07 946,111.84 632,781.88

5.53

4.97

3.11

Policies on Accepting Clients and Approving Credit Line At Country Group securities, we understand that although emphasis is upon expanding our clientele base, proper evaluation of each client in accordance with the rules and regulations set by the SET and the SEC is essential. Additionally, we strictly adhere to money laundering rules and actively monitor suspicious behavior to prevent any illegal acts. As such, the Company has employed appropriate policies in accordance with KYC/CDD policies set by the SET regarding client’s credit approval process. This policy ensures that marketing representatives are required to be familiar with each client’s investment objectives, financial status, and investment limitations prior to making investment decisions.

Approval of credit lines are designated to each authorized officers as follows: Credit Line Authorized Officers Not exceeding Baht 2 million Managers – Securities Business Div./Branch Office Or of higher position Not exceeding Baht 20 million Head of Securities/ Derivatives Business Div./ Or of higher position Not exceeding Baht 30 million Managing Director of Business Div./ Or of higher Not exceeding Baht 50 million Credit Committee Or Higher Not exceeding Baht 150 million Executive Committee Or Higher The Credit Committee consists of the following members: 1. One executive director 2. Two heads of securities business 3. One Head of the derivatives business division 4. One Head of the risk management division A credit line is deemed “approved” when at least half of attending committee members give their approval Policy on Marginable Securities The Corporate has set the Risk management committee which has responsibility in carefully consider list of security and Initial margin rate. Clients will be able to buy securities with their margin loan in Credit Balance System. The IM Committee consists of one executive committee, two heads of securities business division, one head of risk management division, one head of securities operation, and one head of research division. The credit line is approved when three out of six committees agreed. The IM Committee consistently reviews the client’s initial marginal rate at least once a quarter; however, if there is an urgent case, the Committee will make immediate decision. The policy on initial margin is categorized based on a level of risk as following: Type IM (%) A 50 B 60 C 70 F 100 N 0 Notes - The securities type A, B, C and F are marginable securities and not restricted to trade. - The securities type N is non marginable securities and restricted to trade.

The Derivatives Agent Business The Company was granted a license to operate derivatives business from SEC in July 2008. The service started since 22 September 2008 onwards. As derivatives agent, we provide our services through various platforms including trading derivatives via marketing officer and Internet trading through our branches nationwide. The Company aims to expand general client base, group of institution clients as well as foreign clients. At the end of 2008 , the Company’s market share was 0.62 percent that increased to 1.26 percent at the end of 2014. In 2015, the Company has planned to increase its market share to 2 percent by expanding client’s base as well as increasing numbers of market officer to support the growth of TFEX in the future. The strategy is to focus on educating investors about products, and how to invest wisely. Currently, pricing competition creates obstacles in expanding marketing officers, clients, and trading volume. For example, institutional investors and big lot investors have price advantage over retail investors because they pay lower commission fee while the retail investor pay higher commission fee. Thus, most retail investors are not interested in TFEX.

Investment Advisory Service Advisory services in relations to clients’ equities is an ordinary conduct of the securities brokerage firm; however, advisory services performed for the public that is also accompanied with a service fee, is classified as Investment Advisory Service.

Financial Advisory Services Since 2006 the Company has set the policy to expand efficient financial services to clients, the Company has established an Investment Banking (IB) Division with the aim of providing financial advisory service to meets its customers’ needs. The IB department has been the member of the Investment Banking Club since January 23, 2007 and was approved to provide Financial Advisory services between March 21, 2007 and March 20, 2017. Presently, the Company has equipped with a professional and experienced investment banking team. The IB team offers services for all size of businesses. The Company will act as the financial advisor in the criteria specified by the SEC, consisting of the following services: - Acting as a financial advisor for SET listing. - Advising on financing or funding sources both equity and debt instruments. - Advising on business merger and acquisition. - Advising on estimating company‘s value and financial restructuring. - Advising on joint venture - Acting as an independent financial advisor 16

- Acting as a financial advisor for the related services such as debt restructuring. Securities Underwriting According to the Company’s policies, the Company plans to expand the range of financial products to become a complete financial services provider and better satisfy client’s needs. Consequently, the Company was permitted from SEC to operate the securities underwriting since 19 November 2008, onwards. This additional service fulfills the Company’s investment banking. With the Company’s vision to become one of leading brokers in Thailand and to enhance the variation of products and services to the clients, thus providing a financial advisory and securities underwriting service will increase the customer’s satisfaction as well as additional revenue to the Company. Securities Borrowing and Lending (SBL) Securities Exchange Commission had approved the Company to incorporate with Securities Borrowing and Lending since July 12, 2010. The Company has officially operated the Securities Borrowing and Lending business on fourth quarter of the year 2012. After SBL had been in the operation, its clients could be lender. They could lend their securities thru SBL system in order to do short selling from other investors. The lender must get borrowing fee instead. The clients who borrow securities in order to do short selling have to pay borrowing fee to the company who operates SBL business authorized by SEC. The Company would proceed as per follows: 1. The Company will lend targeted securities to customers who would like to do short selling the targeted securities which must be on SET100 and ETF list. However, those securities have to be allowed by the Company. 2. Currently, short selling business still operates thru only cash trading accounts. In the near future, it will be able to do short selling via Cash Balance Account s and Credit Balance Trading accounts. 3. The borrowers have to pay borrowing fee to the company. Also, the lenders will receive lending fee from the Company. 4. All right on targeted securities that the lender allow to be involved in SBL business still are protected to be the lender right under SBL regulation. The Company has supportive statement to the short selling customers in order to initiate more investment vehicles as well as Risk Management vehicles to the company customer especially high volatility situation. The Company has confident to SBL business thru its SBL system in order to create more revenue directly and indirectly in the future. However, the Companies has continuously developed more plans for expanding clients and develop SBL trading system for facilitate the customers. In the year 2014, the strategic plans to increase short selling clients will be as per following: 17

1. The SBL trading system will be developed to support Cash Balance Accounts and Credit balance trading accounts. It will add more alternatives in investment for companyâ&#x20AC;&#x2122;s clients. 2. Expanding the customer bases both of the institution and retail customers who has increasingly interested in lending and borrowing securities such as TSD. 3. Develop new products related with SBL for being investment alternatives to clients such as Derivative Warrants. Selling Agent The Company has offered Unit trust selling agent service providing investment unit and mutual funds of leading Asset Management Companies to answer the need of investor. We have a professional and experienced marketing officer to serve the clients. As CGS offers more than 200 funds, clients and investor could find any funds that match their investment objectives such as for saving, for tax deduction, or for future wealth. List of Asset Management Companies that CGS is the unit trust selling agent as following: 1. Krung Thai Asset Management PCL 2. SCB Asset Management Co., Ltd 3. One Asset Management Co., Ltd 4. Assets Plus Fund Management Co., Ltd 5. Phillip Asset Management Co., Ltd 6. ING Funds (Thailand) Co., Ltd 7. Aberdeen Asset Management Co., Ltd 8. MFC Asset Management PCL 9. Ayudhya Fund Management Co., Ltd 10. Solaris Asset Management Co., Ltd 11. Finansa Asset Management Co., Ltd 12. Land and House Fund Management Co., Ltd Besides existing Asset Management Companies, CGS is attempting to provide additional funds in order to increase variety of funds to clients.

Debenture Business In order to fulfill the need of investors, the Company offered more investment products and services. The boundary of debenture risk was set at medium level and up. Clients can choose to invest in the risk level that suit them with proper length of time, which lead to build client satisfaction Income Structure of the Company Income

Financial Statements in which Equity method is applied For the year ended December 31 2014

Million Baht

2013

Million Baht

2012 (restated)

Million Baht

78.60 Brokerage Fee 1.16 Fee and Service Income 5.01 Gain (loss) on investment 1.29 Gain (loss) on trading in derivatives 3.14 Share of gain from investment in which equity method is applied 68.29 4.27 90.96 4.40 85.10 5.27 Interest and dividend 45.07 2.81 56.61 2.74 74.11 4.59 Interest on margin loan 237.98 14.87 13.71 0.66 15.11 0.94 Other Income 1,600.37 100.00 2,068.84 100.00 1,615.28 100.00 Total Income Note: See more details of Investment policy under Asset for operation and Change of income structure under Analysis of operational results and financial position. 1,024.70 61.72 99.04 3.16 60.41

64.03 3.86 6.19 0.20 3.77

1,695.68 39.59 66.15 19.72 86.42

81.96 1.91 3.20 0.95 4.18

1,269.68 18.78 80.90 20.81 50.79

Ability to Maintain New Liquid Capital Ratio (NCR) According to SEC, Company is required to maintain minimum NCR of 7 percent of general indebtedness and margin requirement. The Companyâ&#x20AC;&#x2122;s subsidiary NCR was 88 percent as at 31 December 2014.

2.2 Market and Compeition Marketing Policy The Company has focused on providing the best service and offering full ranges of investment services. Also, the Company aims to maintain a steady growth of market share. The plans are as follows:  Develop trading system for equity and derivatives trading to be more effective and stable in order to support trading transactions.  Offer more products and services to satify clients need  Provide staff training in order to increase their potential in gving advice and service clients  Improve the Company’s internal structure for flexibility in management aiming to offer fast service  Organize booth display and seminar to investor in Bangkok and countryside areas. The booth and event will be hosted when SET launches new products such as gold futures , derivative warrants and etc, purposely to stimulate new investors to invest in SET which help expand the Company’s clients base and maintain the existing clients.  Develop information infrastructure system to be more sufficient , purposely to facilitate client for using service. Also, the Comapany will offer interesting package to employees order to keeo them working with the Company for a long time. Dependency on client/marketing officer Most of the Company’s clients are retail clients both local and foreign. Juristic person are few. Therefore, the Company is not depend on any group of clients and/or marketing officer in particular. The Company has planned to focus more on local and foreign institutional clients. Moreover the Company targets to increase 20 percent of institutional clients within 3 years to reduce dependency on revenue volatile from investment atmosphere. First step, the Company will open an account with a securities company in foreign country to provide an opportunity for Thai mutual funds to invest in foreign stock market i.e. Europe Stock Market. Futhermore, foreign mutual funds could invest in SET via the Company. The business investment is planned to invest after AEC in 2018.

Proportion of Domestic and Foreign Clients At the end of December 2014 , the Company’s proportions of domestic and foreign clients are as follows: Clients Proportion

The Company’s account Retail – Thai Retail – Foreign Juristic – Thai Juristic – Foreign Institution – Domestic Institution – Foreign

Total number of clients who opened account

Number of active clients (account)

Trading value of each account (Baht) Equity TFEX (MB) (Contract)

64,295

22,194

1,418

320

1.41

8,926,713,869.84

136

0.11

4,185,903,730.98

457

172

0.76

46,207,778,844.39

0.01

107,371,928.65

100.00 1,586,928,116,420.20

2,137,877

Total

66,393 22,736 *** Note: Combined number of clients who closed account during the year

0.10

158,557,877,722.00

80,800

97.62 1,368,942,470,324.34

2,057,077

Competitive Conditions Since the full liberalization of commission fee in 2012, the competition of securities business still tend to continuously increase, noticing from decrease in commission rate, transfer rate of marketing officer to other brokerage company, and increase in number of brokerage company. With higher competition level in the industry, the Company has to build new revenue base as well as expand to new related business . New revenue base could gain from service fee from Investment banking, asset management or profit from the Company investment.

Stock Market and Competition The SET Index closed at 1497.67 points at end-2014, up 15.32% YoY. SET Index high was 1,602.21 points. SET Index low was 1,205.447 points. SET’s average daily market turnover was Baht 41.60 billion.

SET Index

Jan-56 Feb-56 Mar-56 Apr-56 May-56 Jun-56 Jul-56 Aug-56 Sep-56 Oct-56 Nov-56 Dec-56 Jan-57 Feb-57 Mar-57 Apr-57 May-57 Jun-57 Jul-57 Aug-57 Sep-57 Oct-57 Nov-57 Dec-57

1,650 1,600 1,550 1,500 1,450 1,400 1,350 1,300 1,250 1,200 1,150 1,100

Securities business in 2014 In the first half of the year 2014, the stock market was slightly volatile due to the domestic political unrest continuing from the end of 2013. After the military coup and the National Council for Peace and Order (NCPO) seized power to control the situation since May 2014, the SET Index could go up and make a 1 year high of 16,602.21 points. Under the NCPO’s management, economic stimulus measures have been implemented through the government investment projects such as housing loans with low interest rates, a double-track rail and a Baht 3 trillion infrastructure. In addition, the government has approved a Baht 2.57 trillion fiscal budget for 2015, of which Baht 250 billion has been a budget deficit. With the government’s effort, we believed that the Thai economy has bottomed out and would pick up in the latter half of 2014. Furthermore, the SET gained from foreign fund inflows to the emerging markets (Thailand, Indonesia and The Philippines) through the euro carry trade so as to invest in high yield assets after the European Central Bank (ECB) lowered interest rates and implemented a billion 400 euro LTRO program to increase liquidity and stimulate the economy and its quantitativeeasing (QE) program. As a result, the baht appreciated and the euro depreciated against the U.S. dollar which supported the SET Index’s surge. In the latter half of 2014, the SET was hit by the both internal and external factors, but could rebound, i.e. concern over the global economic slowdown after the International Monetary Fund (IMF) cut its global growth forecast, the U.S. Federal Open Market Committee (FOMC) meeting ended the bond purchase program on 21 October 2014, but maintained a near zero interest rate policy until the economic data would show economic recovery as the FED targeted. In addition, the ECB cut interest rates at a record low.

New IPO stocks In 2014, there were 46 listed companies, compared with 38 companies in 2013

Yearly and monthly net buying (selling) value in 2014 classified by investor type unit: million Year

Institutional Investors

Proprietary Trading

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

20,238 6,236 (51,204) (12,757) 3,764 45,177 (2,303) (15,200) (29,149) (24,302) 108,163 71,424

(665) (3,146) (121) 1,084 (1,601) 924 1,388 (449) 1,307 7,256 (1,723) 3,582

Foreign Investors

(24,609) 5,612 118,542 83,446 55,018 (162,346) 38,231 81,724 (5,119) 76,388 (193,911) (36,584)

Local Investors

5,036 (8,702) (67,217) (71,772) (57,181) 116,246 (37,316) (66,075) 32,962 (59,342) 87,471 (38,421)

Month January February March April May June July August September October November December Total

Institutional Investors

Proprietar y Trading

3,475 14,148 (3,671) 3,130 18,012 6,823 (15,156) 10,096 (5,430) 12,346 3,600 24,052 71,424

(520) 1,016 2,635 (14) 1,643 2,917 1,457 1,366 (513) (3,893) 10,523 (13,035) 3,582

Foreign Investors

(13,665) (21,377) 14,254 15,872 (35,760) (357) 13,766 2,398 21,117 (16,139) 11,047 (27,739) (36,584)

Local Investors

10,710 6,213 (13,218) (18,988) 16,105 (9,383) (67) (13,860) (15,173) 7,687 (25,169) 16,722 (38,421)

As classified by investor type, in 2014, foreign investors and local investors showed a slight difference in net selling value, and both groups were net sellers throughout the year. Meanwhile, institutional investors and proprietary trading showed a net buying value. Securities Business Trend in 2015 In 2015, the SET will focus mainly on improving products and services with quality and international standards, growing liquidity and paving the way for a Digital Exchange to accommodate new business and meet future demands. In addition, the SET will continuously working closely with capital markets in Greater Mekong Subregion (GMS). This year, the SET aims to increase market capitalization from IPOs of Baht 250 billion and improve quality in all dimensions, further leading the Thai capital market towards sustainable growth.

Key Indicators 2009

2010

2011

-2.3% 5,873,101 4,338,479

7.8% 8,334,684 6,937,890

0.1% 8,407,696 7,040,457

6.5% 11,831,448 7,615,637

2.9% 11,496,765 11,777,210

1% (f) 13,856,283 10,193,179

17,854

28,669

28,854

31,084

48,070

41,604

751

1,049

1,144

1,397

1,643

1,600

411 25.56

685 15.35

855 12.07

1,036 18.25

1,275 14.60

1,224 17.81

Dividend Yield (%) 3.65 Source: SET and CGS Note: Estimated figures and data at end of period

2.92

3.72

2.98

3.24

2.94

GDP Growth (at 1988 constant price) Market Capitalization (Btm) Market Turnover(Btm) Average Daily Market Turnover (SET) SET Index (High) SET Index (Low) P/E (times)

2012

2.3 Acquisition of Products and Services Source of Funds The Company is mostly self-financed. Undeliver task - none â&#x20AC;&#x201C; Lending to Parties Related to the Management or Major Shareholder - None -

2013

2014

3. Risk Factors 1. Risk on Volatility of Trading Value Core revenue of securities brokerage companies comes from brokerage fees. In 2011-2013 revenue from brokerage fees were Baht 1,240.37 million, Baht 1,269.68 million, and Baht 1,695.68 million, equivalent to 80.17%, 78.60%, and 81.96% of total revenue ,respectively. For 2014, revenue from brokerage fees was Baht 1,204.70 million, equivalent to 66.54% of total revenue. The brokerage fees relate directly to economic conditions, money and capital markets’ movement, the SET’s trading volume and investor confidence; all of them uncontrollable. In 2010, 2011 and 2012, the SET’s average daily market turnover was Baht 28,669 million, Baht 28,854 million ,and Baht 31,084 million, respectively. Meanwhile, in 2013, the SET average daily market turnover amounted to Baht 48,070 million, a 48.81% increase from 2012. The SET fluctuated wildly in 2012 due to both internal and external factors. The SET index hit a 20- year record high of 1,643.43 points with the highest market turnover since the SET established. In 2014, the SET’s average daily market turnover was Baht 41,604.81 million, a decrease of 13.45% from in 2013, as the SET index dropped to 1,224.62 points in the first half of 2014, revenue from brokerage fees in 2014 decreased to Baht 1024.70 million compared to Baht 1,695.68 million in 2013. Fluctuations in the economy, money market and capital market may arise from several factors i.e. the effect of the U.S.’s monetary policy change, the economic recovery in the U.S., Japan and the Euro zone,violence in the three provinces in the South of Thailand and the economic crisis in American and European regions. These factors had negative impacts on Thai and foreign investors’ confidence, the SET’s tradingvolume, the fund raising of listed companies, and the listing of new securities on the SET, as well as on CGS’s businessoperations, financial position and operating results. However, amid the market fluctuations, CGS has expanded revenue base to other businesses such as i.e. financial advisory, securities underwriting, selling agent for unit trust and derivatives warrants, securities borrowing and lending (SBL), global trading, to avoid reliance on any single business.

2. Risk on Industry’s Competition The securities brokerage is the business with high competition particularly for securities trading which generates the Company’s main revenue, which depends on clients’ trading volume. During 2009 – 2012, the Stock Exchange of Thailand (SET) has agreed for the flexibility over the commission fees in accordance to the regulation and development plan of the Securities and Exchange Commission (SEC). In 2009, there is the first year the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) announced the use of securities trading fee as sliding scale since 1 January 2010. As a result of changing commission fee, the Company had to face with competition on various aspects such as increasing numbers of competitors’ branches, which had the potential to impact the Company’s market share. In order to mitigate this risk, the Company had to recruit capable and experienced staff to join the sales and marketing team. The 26

Company also invested significantly in information technology development and branch expansion. These strategies assisted to create greater market share and thus trading volume for the Company. In addition, the liberalization under the ASEAN Economic Community (AEC) leads to the capital market integration among 10 countries. Therefore, the foreign investment within AEC will be more convenient. In the first phase, Singapore Malaysia and Thailand will cooperate. As a result, it was expected that there will be a significant among of fund flow among these countries. The risk of the Company from the liberalization under the AEC includes the increased competition among securities firms as a result of the increase in trading volume from both domestic and foreign investors. With the heightened competition in the industry and the decline in commission fee from the use of sliding scale,CGS had a policy to increase the frequency of client’s trading by focusing on recruiting more experienced staff, developing information technology system so that it responds to the customers’requirements more quickly and efficiently), expanding the number of clients’ accounts, having higher number of branches nationwide, improvingresearch quality, educating marketing officer regularly, and controlling operating costs in order to correspond withrevenue earns under new commission structure. As such, the Company expects it can mitigate risks from full liberalization of commission fees.

3. Default Risks As of 31 December 2013 and 30 June 2014 the client accounts the Company ceased accruing income amounted to Baht 397.72 million and Baht 398.00 million ,respectively; of which the allowance for doubtful accounts was fully set up. The Company has clear and strict policies to reduce risks occurred from default of securities payment or default to deposit the clients’ guarantee, while focusing on the process to select the clients in order to obtain good credit clients and to determine the credit line for both securities trading and derivatives trading according to the financial status, solvency, financial liquidity and experience of clients’ investment. Furthermore, client status review, credit line monitoring and the supervision to the proportion of guarantee value are strictly controlled to ensure thecompliance with the rules determined by CGS. In case of client default, the Company will ban the client from trading the securities until the price of securities are fully paid. There were processes to follow up on clients’ price payment monitored by operation unit and marketing unit. If such price payment was not made within due date, and such follow up does not work out, the legal staff of the Company will be notified continue with legal procedures.

4. Risk on Loss of Clients and Client Base Expansion Most of the Company’s clients are retail investors, both local and foreign. As of 31 December 2013, the Company had 60,025 client accounts which include active clients of 25,027 account and as of 31 December 2014, the Company had 66,393 client 27

accounts which include active clients of 22,736 account . In the year 2013, the brokerage fee constitutes 66.54 percent of the Companyâ&#x20AC;&#x2122;s total revenue. In order to decrease the dependency of revenue on brokerage fee, the Company has expanded its revenue base to Investment banking business, has expanded clientele base by penetrating new market segments, has continuously improved research team and online publication, and has set up a regulartraining and seminar to clients. The Company also continuously improves an IT services by updating the modern and efficient systemsto serve business expansion, particularly for internet trading and overall operations. The Company improved quality of its Information system technology to have an effective system and friendly users for serving business expansion. In 2014, its internet client grew 0.4 percent from year 2013.

5. Personnel Risk In Securities businesses an experienced marketing staff is highly sought after. In 2014, there was an addition of four new brokerage firms to the industry. To prevent the loss of the Companyâ&#x20AC;&#x2122;s human resources, the Company provides continuous training tosupport personnel development and offer attractive compensation schemes and other incentive packages to its personnel in accordance with current market conditions.

6. Risk on the Companyâ&#x20AC;&#x2122;s securities investment In operating in securities investment business, there is a risk that the Company may not achieve the expected return from the investment.To minimize such risks, the Company appointed Investment committee to set up guidelines, rules and regulations on the investment in equities and derivatives by limiting the proportion of investment, assessing and controlling loss that can be caused by marketrisk, and specifying the risk limit such as stop loss limit, position limit. The investment policy also focus on a good fundamental and low risk securities; however, the policy may change upon market situation.

7. Risk on Underwriting In underwriting, there is a risk that the Company may not be able to distribute the guarantee units of securities to investors, which might due to the reluctance of investors from poor equity and financial market situation, or the unaccepted setting of the price and amount of underwriting securities. In such cases, the Company will have to take all the remaining units ofsecurities into its own account, and may realize loss later if the market price falls below the underwritten price. In avoid said risk, the Company set up Underwriting Committee to consider and approve the underwriting transaction.

8. Risk on Margin loan There is a risk involved when value of collateral is below existing debt and customers fail to put up collateral. Regarding such risk, the Company requires customers trading under credit balance account to maintain margin inproper ratio (Maintenance Margin). If the margin ratio fails below the required ratio, CGS will proceed with CallMargin, Intraday Force Margin, and Force Margin, respectively. However, securities price may fluctuate and cause Maintenance Margin to decline quickly. Therefore, the Company has risk management policy in carefully selecting securities and require initial margin of credit balance account taking into account the risks to the Company and the clients. The Company also set ceiling for margin loan for both individual securities and portfolio in order to mitigate said risk. The margin loan receivable highly fluctuated. The item amounted to Baht 514.59 million, Baht 1,271.64 million, Baht 597.71 million and Baht 633.56 million as of 31 December 2011,31 December 2012, 31 December 2013, and 31 December 2014 ,respectively.

9. Risk from issuing derivative warrants and being a derivative agent Risk from issuing Derivative Warrants is the risk that the change in underlying assets price will affect DW price to be in-themoney (ITM) warrants, However, the Company has the hedging strategies as follows; Before issuing Derivative Warrants, CGS will utilize lto simulation model in order to predict price pattern of underlying asset in the future. Simulating results will be used to configure exercise price, maturity date, and exercise ratio. Risk Management by Using Dynamic Delta Hedging Method After issuing DW, the Company normally use dynamic neutral delta hedging to make of issuing to be neutral. Therefore, risk of volatility will be decreased to zero. If underlying assets price move up or down, it will affect to DW price ether Call warrant or Put warrant to be in-the-money (ITM) warrants. CGS will do risk management by buying and selling the underlying assets. To buy or to sell is depended on the type of warrant. Therefore, delta neutral figure is ratio of suitability. The world class warrants issuers have used this delta neutral methodology for risk management. For example, the Company issues call warrant and underlying asset is increasing. the Company has confronted to its loss when investors exercise in the future. the Company has to buy underlying asset to protect the position risk by using neutral delta hedging methodology. If the underlying asset price is decreasing, the Company will sell the hedging position in order to maintain zero risk for portfolio.However, to minimize position risk, the Company has to manage position real time.

10. Risk from derivatives business In futures brokerage business, the Company faces a risk that the collateral placed by the customer will not be sufficient to repay debts with the Thailand Clearing House Company Limited from any losses in futures trading. In order to mitigate this risk, the Company selects customers who have knowledge and experience in future trading according to the Company ’s guidelines, limits the credit to a level suitable to the customer’s repayment ability, and requires the customer to deposit cash collateral before trading in futures. The Company also reviews credit limit continuously and monitors the customers’ trading closely as well as diligently ensures that these collateral meet the Company’s guidelines in order to control the risk of the customers’ trading activities and requires closing of positions if the customer is unable to comply with the guidelines.

11. Risk from disaster The Company is well aware of the importance of risk management and damage control that may occur in branch offices and affect clients by preparing the disaster prevention plan in accordance with safety standards and purchasing insurance covering damages arising from natural disasters with total sum insured of over Baht 352 million. During the massive flood in late 2011, some of the office branches located in the affected areas could not serve customers. At that time the Company followed the business continuity plan so that the Company could continue to carry out operations to serve customers despite the negative external factors that may cause the Company to suspend business operations.

4. Operating Assets 4.1 The Companyâ&#x20AC;&#x2122;s permanent asset As of 31 December 2014 the Company had operating asset of Baht 152,259,533 as follows: Type of Assets Property and Premises 154/14 - 16 Phangnga Rd., Talat Yai, Muang, Phuket 83000

ownership

Accounting value (Baht)

Obligation

own

11,700,492

- none -

500/1-3 Prasarnmaitee Raod Sop Tui, Muang, Lumpang 52100

own

9,620,827

- none -

228/28 - 30 Baromtrilokkanard Rd.,Nai Muang, Muang, Phitsanulok 65000

own

12,038,331

- none -

own

- none -

own

117,119,080

- none -

own

- none -

Premise 50/147-157 Hillside Plaza and Condotel 4th floor, Huay Kaew Road , Chang Phuek, Muang, Chiang Mai 50300 Leasehold improvement, Furniture and office equipment Vehicles Vehicle â&#x20AC;&#x201C; rental contract

occupant

1,434,629

Leasehold improvement

346,154

Period of installments 10 months - none -

Summary of office rental agreement As of 31 December 2014, the Company has rented the building for Head office and Branch offices with details as follows: Head and Branch offices 132 (Sindhorn Tower 1) level 2, 3 and 9 Wireless Road Lumpini, Pathumwan, Bangkok 10330

Remaining Rental period level 2 1 y 1 mth level 3 1 y 1 mth level 9 1 y 1 mth

Obligation - level 2 : if the contract is terminated before the end of contract , bail will be distrained for Baht 5,088,000 - level 3: if the contract is terminated before the end of contract , bail will be distrained for Baht 753,600

Head and Branch offices

1693 Central Plaza Building (Lardprao) 11th Floor, Paholyothin Rd., Ladyao, Chatuchak, Bangkok 10900

Remaining Rental period

1 y 9 mth

275 The Mall Building (Bangkae) 6th Floor, Petkasem Rd., North Bangkae, Bangkae, Bangkok 10160

2 mth

30/39-50 The Mall Building (Ngamwongwan) 12th Floor, Ngamwongwan Rd., Bangkhen, Muang, Nonthaburi 11000

4 mth

1293 Carrefour Building (Samrong) 2nd Floor, Moo 4 Sukhumvit Rd., Theparak, Muang, Samutprakarn 10270

1 y 10 mth

7/129-221 Room No. 2601, Central Pinklao Department Store, 6th Floor, Boromrajachonnanee Road, Arunamarin, Bangkoknoi, Bangkok 10700 408/59 Bann Paholyothin Plaza Room No 412/44-45 , 3th floor, Paholyothin Road, Samsennai, Phayatai, Bangkok 10400

2 y 3 mth Closed on 20 september 2014

191 Room C, Silom Complex Building 19th Floor, Silom Rd., Bangrak, Silom, Bangkok 10500

8 mth

191 Room A, Silom Complex Building 14th Floor, Silom Rd., Bangrak, Silom, Bangkok 10500

Closed on 23 February 2014

191 Room D, Silom Complex Building 12th Floor, Silom Rd., Bangrak, Silom, Bangkok 10500

Closed on 28 July 2014

999/9 The Offices at Central World 28th Floor, Room MH 2807, Rama 1 Rd., Pathumwan, Bangkok 10330

Closed on 15 May 2014

540 Mercury Tower 14th floor Ploenchit Rd., Lumpini, Pathumwan, Bangkok 10330

Closed on 6 August 2014

Obligation - level 9: if the contract is terminated before the end of contract , bail will be distrained for Baht 1,954,800 if the contract is terminated before the end of contract , bail will be distrained for Baht 184,963.68 if the contract is terminated before the end of contract , bail will be distrained for Baht 330,786 if the contract is terminated before the end of contract , bail will be distrained for Baht 335,540 if the contract is terminated before the end of contract , bail will be distrained for Baht 218,820 if the contract is terminated before the end of contract , bail will be distrained for Baht 155,294.10 if the contract is terminated before the end of contract , bail will be distrained for Baht 215,176.50 if the contract is terminated before the end of contract , the remaining rent must be paid. if the contract is terminated before the end of contract , the remaining rent must be paid. if the contract is terminated before the end of contract , the remaining rent must be paid. if the contract is terminated before the end of contract , bail will be distrained for Baht 464,846.40 if the contract is terminated before the end of contract , the remaining rent must be paid and bail will be distrained for

Head and Branch offices

Remaining Rental period

Obligation Baht 881,320.80

101/549 M.Chonlada Bangbuatong, Bangkrugtrinoi Rd., Sonloe, Bangkrugtrinoi, Nonthaburi 11110

Closed on 23 February 2014

1093/73 Central City Tower 14th floor, Bangna-Trad Rd., Bangna-Trad, Bangna, Bangkok 10260

9 mth

99, 99/9 Moo 2 Chaengwattana Rd., Bangtalard, Pakkred, Nonthaburi

11 mth

591/5-7 Phaholyothin Road, Wiang, Muang, Chiang Rai 57000 919/112 Moo10 Nakhonsawan Tok, Muang Nakhonsawan, Nakhonsawan 60000

1 y 7 mth

if the contract is terminated before the end of contract , bail will be distrained for Baht 45,600 if the contract is terminated before the end of contract , bail will be distrained for Baht 231,807.60 if the contract is terminated before the end of contract , bail will be distrained for Baht 197,867.85 if the contract is terminated before the end of contract , bail will be distrained for Baht 200,000

2 mth

- none -

5 mth

- none -

2/9-10 Nakornping Condominium 1st floor, Chang Phuek, Muang Chiang Mai, Chiang Mai 50300

8 mth

- none -

224/1, 1st and 2nd floor, Moo 2 , Maehae, Muang, Chiang Mai 50200

Closed on 28 July 2014

- none -

8 mth

- none -

2 y 3 mth

- none -

7 mth

- none -

3/5 Chaikaw Rd., Viang, Muang, Phayao 56000

12/5 Mukda Rd., Nai Muang, Muang, Lampoon 5100 200 Chuladis Hat Yai Plaza Shopping Complex, 4th Floor, Nipatuthit 3 Rd., Hat Yai, Songkhla 90110 62, 64, 66,68 Soi Wandeekositkhullaporn, Pattanakarnkukwang, Nai Muang, Muang, Nakhon Si Thammarat 80000 59/5-7 Huaiyod Rd., Tubtieng, Muang, Trang 92000 467 Saiburi Road, Bo Yang, Muang, Songkla 90000

2 y 4 mth 2 y 5 mth

The contract can be terminated till the end of contract. - none -

Head and Branch offices

29 Room 6 Lee Garden Plaza Hotel 6th floor, Prachatipat Rd., Hadyai, Hadyai, Songkhla 90110.

Remaining Rental period

Closed on 28 February 2014

Obligation if the contract is terminated before the end of contract , bail will be distrained for - Baht 675,000 - Baht 149,400 (Rental contract was cancelled on 28 February 2013)

1/9 Taweesinka Road, Tatapao, Muang, Chumporn 86000

10 mth

- none -

7/8 Sirirath road, Nai Muang, Muang, Surin 32000

7 mth

- none -

1036, 1036/1-4 Wanlooksue Road, Muangtai, Muang, Sisaket 33000

2 y 7 mth

if the contract is terminated before the end of contract , bail will be distrained for Baht 70,000

232/6 Udon Phone Tech Building 2nd Floor, Udondussadee Rd., Markhaeng, Muang, Udonthani 41000

11 mth

- none -

238/8 Ozone village Room 17-19, 2nd floor, Theparak Raod, Nai Muang, Muang, Khonkaen 4000

1 yt 2 mth

- none -

166/1-2 Chompol Rd., Nai Muang, Muang, Nakornratchasima 30000 1242/2 the Mall Nakornratchasima 6th floor Room A3 , Mitraparp Rd., Nai Muang, Muang, Nakornratchasima

1 y 4 mth Closed on 28 July 2014

if the contract is terminated before the end of contract , bail will be distrained for Baht 100,000 if the contract is terminated before the end of contract , bail will be distrained for Baht 414,982.80

512/8 Chayangkul Rd., Nai Muang, Muang, Ubon Ratchathani 34000

11 mth

- none -

8/47-48 Palad Muang Rd., Nai Muang, Muang, Buriram 31000

3 mth

- none -

555 Moo 1 Petkasem Rd., Raisom, Muang, Petchaburi 76000

2 y 6 mth

- none -

99 Pipitprasart Rd., Pra Pathom Jedi, Muang Nakhonpathom , Nakhonpathom 73000

Head and Branch offices 321 Sangchuto Rd., Bannua, Muang, Kanchanaburi 71000

Remaining Rental period Continue contract with period of 3 mth

Obligation - none -

591/19 Paholyothin Rd., Pakprew, Muang , Saraburi 18000

2 y 8 mth

- none -

115 Star Plaza Building, 1st Floor, Soi Soonkankasai 5, Sukhumvit Rd., Cheong-nern, Muang, Rayong 21000

2 y 5 mth

- none -

3/222 Moo 6, Chalermprakiat Rd., Nakuae, Banglamung, Chonburi 20150

2 y 11 mth

- none -

838/1A-838/1B Chaichana Rd., Bang Pla Soi, Muang, Chonburi 20000 (present address) (Move to new address on May 13,2013)

In any case of contract termination, if rental asset is in good condition, bail will be returned Baht 300,000

99/49-50 Songpol Rd., Banpong, Banpong, Ratchaburi 70110

3 mth

16 CIMB Bank 2nd floor 16, New Srisothorn Rd., Na Muang, Muang Chachoengsao 24000

8 mth

57 Park Ventures Building Ecoplex Room No 1607B â&#x20AC;&#x201C; 1608,16th Floor, Wireless Rd., Lumpini, Pathumwan, Bangkok 10330 195 Empire Tower Room 1406,14th tower 3 South Sathorn Rd., Yanawa, Sathorn, Bangkok 10210

2884 Manoopol Tower1,6th floor Phetchaburi Tat Mai Rd., Bang Kapi, Huai Khwang , Bangkok 10310

8 mth

10 mth

1 y 8 mth

Rental contract cannot be cancelled before March 31,2015 - noneâ&#x20AC;&#x201C; if the contract is terminated before the end of contract , bail will be distrained for Baht 715,875 if the contract is terminated before the end of contract , bail will be distrained for Baht 358,551.90 if the contract is terminated before the end of contract , bail will be distrained for Baht 154,200 (Open for business on 18 November 2013)

4.2 Intangible Assets As of 31 December 2014, CGS had total intangibles assets of Baht 98,225,958 as follow Type

Ownership

Accounting Value (Baht)

Using derivatives business fee

Computer Software

76,045,784

Securities license

2,657,500

Derivatives business membership

15,945,000

Computer Software in progress

3,577,670

Policy on ceasing revenue recognition The Company recognizes interest income from its securities business receivables on an accrual basis. The Company will cease recognition of interest income whenever uncertainty in the collection of principal and interest arises. Any of the following cases are considered as “uncertainty in the collection of principal and interest”. 1. Debtor whose collateral value is lower than the amount owed. 2. Debtor whose installment payment is scheduled at every 3 months, but has defaulted on principal and interest payment for more than 3 months. 3. Debtor whose installment payment is scheduled at a period longer than 3 months except when there is convincing evidence that repayment will be made to the Company. 4. Financial institution debtor whose operational status is in doubt. 5. Other debtor whose interest payment is 3 months overdue. Policy on provisions for doubtful accounts and bad debts The Company’s policy for provision of doubtful accounts is mainly done through the financial evaluation of each client. This includes risk appraisal and collateral valuation. The Company will make provisions for doubtful accounts whenever the value of the collateral is not enough to cover the amounts owed or when the debtor is determined unable to fully repay principal and interest. The Company has classified debts pursuant to the SEC’s announcement No. Gor.Thor. 33/2543, dated August 25, 2000, and Gor.Thor. 5/2544, dated February 15, 2001 regarding the accounting for troubled debtors of Companies as follows; 1. Bad debt refers to: 1.1. Debt accrued by debtor whom the Company had claimed but not been repaid and the Company had written off according to the Taxation Code. 36

1.2. Debt where the Company makes an agreement to revoke. 2. Doubtful debt refers to the amount owed exceeding the value of the collateral, which falls into the following categories: 2.1. Ordinary debtor, trouble financial institution debtor and other debtor, whose collateral is lower in value than the amount owed. 2.2. Debtor whose installment is scheduled at every 3 months but defaults on principal and interest payment for more than 3 months. 2.3. Debtor whose installment is scheduled at a period longer than 3 months except when there is convincing evidence that repayment will be made to the Company. 3. A substandard debt refers to the amount owed, which could be covered by the collateral mentioned in (2). The Company has the policy to write off bad debt whenever it is found and set the provision for the doubtful accounts at no less than 100% of doubtful debt and total substandard debts less collateral value. As of 31 December 2014, the Company recorded provisions for doubtful accounts of Baht 355.83 million. Policy on Provisioning for Investment in Securities Marketable equity securities held for trading are stated at fair value, with any resultant gain or loss arising from changes in value of securities recognized in the statements of income. Debt securities that the Company intends and are able to hold to maturity are stated at amortized cost less impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortized using the effective interest rate method over the period to maturity. Debt securities and marketable equity securities other than those securities held for trading or intended to be held to maturity, are classified as being available-for-sale and are stated at fair value, with any resultant gain or loss arising from changes in value of securities being recognized directly in equity. The exceptions are impairment losses, which are recognized in the statements of income. When these investments are derecognized, the cumulative gain or loss previously recognized directly in equity is recognized in the statements of income. Where these investments are interest-bearing, interest calculated using the effective interest method is recognized in the statements of income.

5. Future Projects - none â&#x20AC;&#x201C;

6. Legal Dispute As of 31 December 2014, The Company has no legal dispute that negatively affects the assets of the Company by more than 5% of shareholders equity and no legal dispute that significantly affects the Companyâ&#x20AC;&#x2122;s operating business.

7. Others important information Name Address (Headquarters)

Registration Number Licenses

Registered Capital Paid-up Capital Type of shares

: Country Group Securites Public Company Limited (CGS) : 132 Sindhorn Tower 1; 2nd Floor Wireless Road, Lumpini, Pathumwan Bangkok, Thailand 10330 Tel 0-2205-7000 Fax 0-2205-7171 www.cgsec.co.th : 0107537000572 : The Company obtained a Securities Business Type A license from the Ministry of Finance and Securities and Exchange Commission to engage in the securities business as follows: 1. Securities Brokerage 2. Securities Trading 3. Securities Underwriting 4. Investment Advisory Service 5. Mutual Fund Management 6. Private Fund Management 7. Securities Borrowing and Lending 8. Venture Capital Management - The Company obtained a Derivatives Business license from Securities and Exchange Commission to engage in Derivatives Agent. - The Company was approved from Securities and Exchange Commission to act as Financial Advisory. : Baht 2,589,743,484 : Baht 2,589,743,484 : 2,589,743,484 ordinary shares at par value of Baht 1 per share

Other References Share Registrar

Debt-holder Representative Auditor

: Thailand Securities Depository Company Limited 62 Stock Exchange of Thailand Building 4th, 7th floors Ratchadapisek Road, Kwaeng Klongtoey, Khet Klongtoey Bangkok 10110 Tel: 0-2229-2800 Fax : 0-2359-1259 : None

: Mr. Chavala Theinprasertkit , CPA Number 4301 Deloitte Touche Tohmstsu Jalyos Audit Co., Ltd. Ratjanakam Building, 25th Floor, 183 South Sathorn Road, Kwaeng Yannawa, Khet Sathorn Bangkok 10120 Telephone : 0-2676-5700 Fax : 0-2676-5757 Legal Advisors : Weerawong, Chinnavat & Peangpanor Ltd. 22nd Floor, Mercury Tower 540 Ploenchit Road Lumpini, Pathumwan Bangkok 10330 Thailand Tel : +66 (0)2 264-8000 Fax : +66 (0)2 657-2222 Financial Advisors : None Advisors of Management under Management Contracts : None

8. Shareholders Information As at December 2014, the Company had registered capital of Baht 2,589,743,484,which Baht 2,589,743,484 million was paid up.The paid up capital consists of 2,589,743,484 ordinary shares at a par value of Baht 1.

8.1 Shareholders The top 10 major shareholders as of 31 December 2014 were as follows: No. 1 2 3 4 5 6 7 8 9 10

Shareholder Country Group Holdings Public Company Limited Thai Fuji Securities Company limited Mr.Somchai Mimungkom Ms.Phenprapha Chaengthep Ms. Amphan Techaratanachai Mr. Pai, Wen-Cheng Mr. Worapong Jaimonkonprasert Ms.Puttha Panla Mr. Lin, Wen-Ye Thanathai Securities Company limited Total

After Tender offer / Restructuring No. of shares % Stake 2,566,219,121 99.092 3,988,351 0.154 1,580,087 0.061 1,015,178 0.039 903,980 0.035 837,790 0.032 642,553 0.025 642,553 0.025 494,271 0.019 437,171 0.017 2,576,618,502

99.493

8.2 Issuance of Securities for Capital increased Policy â&#x20AC;&#x201C; None â&#x20AC;&#x201C;

8.3 Dividend Policy Under normal business conditions, it is the policy of the Board to pay dividend of at least 60% of the net profit after tax. This dividend policy remains unchanged.

9. Management Structure Organization Chart as 31 December 2014

Remark : *After the ordinary shares of CGH has been listed under the Stock Exchange of Thailand, the Company will transfer the investment department to Holding Company except for the section where license is required will operating under the Company after the restructuring which expected to be execute in 2015. To avoid of doubt, there will be no transfer over the securities held under investment department of the company which has been held prior to the restructuring, the Company will proceed to sell the securities or hold its till mature.

9.1 Board of Directors and Subcommittees 1) Board of Directors As of 31 December 2014, the Company structure consisted of 15 directors as follows: Name Position 1 Mr. Prayoon Chindapradist, Prof Chairperson Mr. Dej Namsirikul Vice Chairperson and Independent Director Gen. Wattana Sanphanich Vice Chairperson and Independent Director Pol. Gen. Somchai Vanichsenee Independent Director Mr. Charn Tulyapisitchai2 Independent Director Mr. Sadawut Taechaubol1 Director Mr. Surabhon Kwunchaithunya1 Director Mr. Hong Chye Sim1,2 Director Mr. Litti Kewkacha1 Director Mr. Somkad Sueptrakul1 Director Ms. Sudthida Chirapatsakul Director Pol. Lt. Gen. Werapong Chuenpagdee Independent Director Mr. Nipon Wisityuthasart Independent Director Mr. Tommy Taechaubol1 Director Mr. Chanachai Joonjiraporn1 Director Remarks : 1. According to the resolution of meeting of the Parent companyâ&#x20AC;&#x2122;s board of directors 4/2014 held on 26 August 2014; directors who are directors of the Company , that are assigned from the Parent company to monitor the Company to follow the policy, rule and regulation of reporting after the restructure. The proportion of director who represented the Parent company in the Company are accounted for 100 percent of total number of directors of the Company ( exclude independent directors). The percentage is not less than percent of shareholding in the Company after the restructure. Anyhow, the share proportion of the Parent company representatives maybe change in the future but not less than percent of shareholding in the Company. 2. Directors who are trained for Director Accreditation Program (DAP) class 115/2557 on 29 December 2014.

Ms. Natnicha Kasemvudhi was corporate secretary of the Company.

Authorized Directors Either Prayoon Chindapradist, Pro., Chairperson or Mr. Sadawut Taechaubol, Executive Chairperson signs with the Company’s seal affixed or two of the following three directors: Mr. Surabhon Kwunchaithunya, Ms. Sudthida Chirapatsakul and Mr. Tommy Taechaubol cosign with the Company’s seal affixed. Board of Directors’ meeting In 2013 and 2014, the no. of meeting and attendance were summarized as follows: Attendance/No. of meeting Name 2013 2014 1 Mr. Prayoon Chindapradist, Prof 12/12 10/12 Mr. Dej Namsirikul 12/12 12/12 Gen. Wattana Sanphanich 12/12 11/12 Pol. Gen. Somchai Vanichsenee 12/12 12/12 Mr. Charn Tulyapisitchai 11/12 11/12 1 Mr. Sadawut Taechaubol 12/12 11/12 1 Mr. Surabhon Kwunchaithunya 12/12 12/12 2 Dr. Prasit Srisuwan 7/10 1 Mr. Hong Chye Sim 9/12 12/12 4 Mr. Litti Kewkacha 5/12 0/12 1 Mr. Somkad Sueptrakul 12/12 12/12 Ms. Sudthida Chirapatsakul1 11/12 12/12 Pol. Lt. Gen. Werapong Chuenpagdee 8/12 10/12 Mr. Nipon Wisityuthasart 11/12 12/12 Mr. Tommy Taechaubol1 11/12 10/12 Mr. Chanachai Joonjiraporn 1,3 2/2 11/12 Remarks : 1. According to the resolution of meeting of the Parent company’s board of directors 4/2014 held on 26 August 2014; directors who are directors of the Company , that are assigned from the Parent company’s to monitor the Company to follow the policy, rule and regulation of reporting after the restructure. The proportion of director who represented the Parent company’s in the Company are accounted for 100 percent of total number of directors of the Company ( exclude independent directors). The percentage is not less than percent of shareholding in the Company after the restructure. Anyhow, the share proportion of the Parent company’s representatives maybe change in the future but not less than percent of shareholding in the Company

2. Resigned from the Company, effective 1 November 2013 3. In the Board meeting No 9/2013 on 30 September 2013 appointed Mr. Chanachai to replace Dr.Prasir Srisuwan who resigned. 4. Resigned from the Securities company,effective 1 March 2013

2) Audit Committee As of 31 December 2014, Audit Committee consists of 3 directors as follows: Name Position Pol. Gen. Somchai Vanichsenee Chairperson of Audit Committee Mr. Dej Namsirikul Member of Audit Committee Mr. Charn Tulyapisitchai Member of Audit Committee Mr. Dej Namsirikul is specialized and experienced in accounting and finance. He is an independent director and audit committee director to the Company since 2006. Meeting of the Audit Committees In 2012 and 2013 , the number of audit committeesâ&#x20AC;&#x2122; meeting was 12 meetings and the detail as follows: No. of meeting Name 2013 2014 Pol. Gen. Somchai Vanichsenee 12/12 11/12 Mr. Dej Namsirikul 12/12 12/12 Mr. Charn Tulyapisitchai 12/12 12/12 3) Executive Directior As at 31 December 2014, executive committees consist of 4 directors as follows: Name Position Mr. Sadawut Taechaubol* Executive Chairperson Mr. Surabhon Kwunchaithunya* Vice Executive Chairperson Ms. Sudthida Chirapatsakul* Executive Director Mr. Chanachai Joonjiraporn * Executive Director Remarks : *According to the resolution of meeting of board of directors 4/2014 held on August 26, 2014;directors who are directors of the Securities company , that are assigned from the Company to monitor the Securities company to follow the policy, rule and regulation of reporting after the restructure. The proportion of director who represented the Company in the Securities company are directors). The percentage is not less than percent o shareholding in the Securities

Meeting of Executive Committees In 2013 and 2014, the number of attendance and meeting were as follows: No. of meeting Name 2013 2014 1 Mr. Sadawut Taechaubol 14/14 13/13 Mr. Surabhon Kwunchaithunya1 14/14 13/13 Dr. Prasit Srisuwan2 11/12 Ms. Sudthida Chirapatsakul1 4/4 13/13 Mr. Chanachai Joonjiraporn 1 14/14 11/13 Remarks : 1.According to the resolution of meeting of the Parent companyâ&#x20AC;&#x2122;s board of directors 4/2014 held on 26 August 2014; directors who are directors of the Company , that are assigned from the Parent company to monitor the Company to follow the policy, rule and regulation of reporting after the restructure. The proportion of director who represented the Parent company in the Company are accounted for 100 percent of total number of directors of the Company ( exclude independent directors). The percentage is not less than percent of shareholding in the Company after the restructure. Anyhow, the share proportion of the Parent companyâ&#x20AC;&#x2122;s representatives maybe change in the future but not less than percent of shareholding in the Company. 2. Resigned from director of the Company,effective 1 November 2013.

4) Nomination sub-committee As at 31 December 2014, Nomination sub-committee consist of 3 members as follows: Name Position 1. Mr. Charn Tulyapisitchai Chairperson 2. Pol. Gen. Somchai Vanichsenee Committee 3. Mr. Hong Chye Sim Committee Meeting of Nomination sub-committee In 2013 and 2014, the number of attendance and meeting are as follows: No. of meeting Name 2013 2014 1. Mr. Charn Tulyapisitchai 1/1 2/2 2. Pol. Gen. Somchai Vanichsenee 1/1 2/2 3. Mr. Hong Chye Sim 1/1 2/2

5) Compensation sub-committee As of 31 December 2014, Compensation sub-committee consists of 3 members as follows: Name Position 1. Mr. Charn Tulyapisitchai Chairperson 2. Pol. Gen. Somchai Vanichsenee Committee 3. Mr. Hong Chye Sim Committee Meeting of Compensation sub-committee In 2013 and 2014 , the number of attendance and meeting are as follows: No. of meeting Name 2013 2014 1. Mr. Charn Tulyapisitchai 1/1 2/2 2. Pol. Gen. Somchai Vanichsenee 1/1 2/2 3. Mr. Hong Chye Sim 1/1 2/2 6) Good governance sub-committee As of 31 December 2014, Good governance sub-committee consisit of 4 members as follows: Name Position Pol. Gen. Somchai Vanichsenee Chairperson Mr. Surabhon Kwunchaithunya Committee Mr. Priyong Teerasathian Committee Ms. Duangtida Pankasemsuk Committee

Meeting of Good governance sub - committee In 2013 and 2014 , the number of attendance and meeting are as follows: No. of meeting Name 2013 2014 Pol. Gen. Somchai Vanichsenee 1/1 1/1 Mr. Surabhon Kwunchaithunya 1/1 1/1 Mr. Priyong Teerasathian 1/1 1/1 Ms. Duangtida Pankasemsuk 1/1 1/1

7) Investment Committee As of 31 December 2014, Investment Committee consist of 5 members as follows: Name Position Mr. Somkad Sueptrakul Chairperson Mr. Surabhon Kwunchaithunya Vice Chairperson Ms. Duangtida Pankasemsuk* Committee Ms. Areeya Positwongsa Committee Ms. Nattcharinphon Jesadapisit Committee and Secretary Remark : * became Investment committee of the Company since 1 October 2013

Meeting of Investment Committee In 2013 and 2014 , the number of attendance and meeting are as follows: No. of meeting Name 2013 2014 Mr. Somkad Sueptrakul 12/12 6/6 Mr. Surabhon Kwunchaithunya 12/12 6/6 Ms. Duangtida Pankasemsuk 3/3 6/6 Ms. Areeya Positwongsa 12/12 6/6 Ms.Nattcharinphon Jesadapisit 12/12 6/6 Remark : * became Investment committee of the Company since 1 October 2013

The Company has set up the investment policy as follows: Investment Criterias 1. Allocation of Investment 1.1 To make an investment within approval budget depend on type of investments such as trading portfolio with the proportion of 40 percent to 60 percent and investment portfolio with the proportion of 40 percent to 60 percent. 1.2 To manage the short term and long term investment portfolio effectively , the Investment Committee will allocate each type of investment differently under the approval budget from the Board.

2. Investment in Securities are as follows: 2.1 Trading portfolio is to invest in equity with purpose of gaining from price changes. 2.2 Investment portfolio can be classified as follows:  Long term investment portfolio aims to receive dividend from business’s operation. Investment period is more than one year.  Short term investment portfolio aims to receive from price changes which depend on market situation. Investment period is not more one year. 2.3 General securities account is to invest in securities that is not buy and/or sell at Stock dealing center. After the Company was transferred the investment division to the Parent company, the Company wasn’t invest in any type of investment anymore except investments that needed securities license such as market maker, error portfolio, etc 3. Limitation of Loss Liquidity and loss limitation are managed at the same time by sell or decrease of investment in any invested securities when the price and/or liquidity of its decreased. If the price of that securities go down by 5 -30 percent of cost price (depend on type of investment) , the securities must be sold. If the securities is not sell, it must be quickly report to the Investment Committee for further decision. 4. Others 1.1 Securities in general account that are trade in Stock dealing center, the Securiteis will transfer to Securities for trade or Securties for investment by judement of the Investment Committee which follow the procedures of securities transfer or accounting standard. 1.2 The Investment Committee will consider to transfer Securities available for trade that remain in the shor term investment accout with the period of more than 1 year to Securitties available for investment by using fair value or follow accounting stardard. 1.3 Pursue and conduct based on the rights of Securities in the Securities company’s account 1.4 Hold a meeting to consider, to review and to follow investment at least once a month with meeting room.

9.2 Management As of 31 December 2014, Management of the Company consist of 7 members are as follows: Name Position Ms. Sudthida Chirapatsakul Chief Executive Officer Mr. Chanachai Joonjiraporn Chief Executive Officer Mr. Chupong Tanasettakorn Managing Director/ Investment Banking 1 Mrs. Punnee Thakerngkait Managing Director/Retail Brokerage 2 Mr. Supakrit Choksukthanapong Managing Director/Retail Brokerage Ms. Netchanok Anawan Vice Managing Director /Finance and Accounting 3 Mr. Pitsanu Vichicholchai Managing Director/Retail Brokerage Remarks : 1Resigned from the management of the Company, effectives 1 August 2014 2 Resigned from the management of the Company, effectives 1 October 2014 3 Appointed as the management of the Company, effectives 1 June 2014

9.3 Secretary of the Company According to the resolution of Boad of Director’s meeting 1/2014 held on 22 May 2014, the Board has appointed Ms. Natnicha Kasemvudhi to act as the Company Secretary. Duties and Responsibilities of the Company Secretary 1. Advise the board of directors on the Company’s laws, rules and regulations and ensure the directors will follow the company’s laws, rules and regulations. 2. Encourage the board of directors to have knowledge and understanding of corporate governance and follow practices. 3. Prepare agenda and notice of the shareholders and board of directors meetings. 4. Arrange the shareholders and board of directors meetings in compliance with the Company’s laws, rules and regulations and good practices. 5. Take minutes of the shareholders and board of directors meetings and ensure related parties will follow resolutions of the shareholders and board of directors meetings. 6. Prepare and maintain the board of directors’ registration, annual reports, notice of the shareholders and board of directors meetings, minutes of the shareholders and Board of Directors meetings. 7. Monitor the directors and management to make reports on their stakeholders including related persons’ stakeholders as specified by the law. 49

Maintain the stakeholder reports reported by the directors or management as specified by laws.

9.4 Directors and Management Remuneration 1) Director remuneration Remuneration (Million Baht) 2013 2014 1.60 1.60 1.04 1.04 0.80 0.80 1.04 1.015 0.87 0.925 0.56 0.56 0.56 0.56 0.35 0.56 0.62 0.60 0.49 0.96 0.955 0.56 0.56 0.49 0.56 0.56 0.56 0.56 0.56 0.07 0.56

Name Mr. Prayoon Chindapradist, Prof Mr. Dej Namsirikul Gen. Wattana Sanphanich Pol. Gen. Somchai Vanichsenee Mr. Charn Tulyaphisitchai Mr. Sadawut Taechaubol Mr. Surabhon Kwunchaithunya Dr. Prasit Srisuwan 1 Mr. Hong Chye Sim Mr. Litti Kewkacha Mr. Somkad Sueptrakul Ms. Sudthida Chirapatsakul Pol.Lt .Gen.Werapong Chuenpagdee Mr. Nipon Wisityuthasart Mr. Tommy Taechaubol Mr. Chanachai Joonjiraporn 2

Remarks : 1. Resigned from the management of the Securities company, effectives 1 August 2014 2. In the borad meeting no 9/2013 on 30 September 2013 , Mr.Chanachai was appointed as director replaced Dr.Prasit Srisuwan who resigned since 1 November 2013

2) Remuneration for Executive Directors and Management In 2014, the remuneration for 4 executive directors and 15 directors paid as salary, bonus and indemnity (excluding meeting allowance paid to the above-mentioned executive directors) amounted to Baht 112.29 million.

3) Other Remuneration 3.1)

Other Remuneration of Director

Prof. Prayoon Chindapradist, the Chairperson has been using his own car while the Company compensates all expenses such as petrol, maintenance, and wear and tear which have amounted to Baht 50,000 per month 3.2)

Other Remuneration of Executives The Company has set the provident fund. The Company has support 4 percents of Executives’ salary to the provident fund. In year 2014, the Company has contributed in the provident fund around Baht 0.81 million In the resolution of Board meeting No.18/2002 on 22 October 2002, a provident fund was agreed upon that was then registered according to the Provident Reserve Funds Act B.E. 2530 and the Amendment Act B.E. 2542. The Company’s provident fund was officially established on 25 December 2002. As of 1 November 2006, the Company changed the asset management company from Finansa Asset Management Company Limited to ING Fund (Thailand) Company Limited. On July 1, 2009, the Company changed the asset management company from ING Fund (Thailand) Company Limited to MFC Asset Management which managed and registered provident fund under name “MFC Master Fund”. This fund is categorized as Master Pooled Fund. According to the Fund’s regulations under the approval of Board’s resolution No 18/2002, the Company shall contribute to the Fund with the amount equivalent to its staff’s contributions, and each staff shall contribute to the Fund the amount calculated on the percentage of salary as follows: Working Period % of Salary Not over 3 years 3 Over 3 years but not over 5 years 4 Over 5 years up 5

9.5 Personnel 1) Personnel As of 31 December 2014 , the Company has 728 employees ; 358 were located at the head office and 370 were located at 41 branch offices. All employees were divided as below: No. of Employees Division 2013 2014 1. Securities division 614 363 2. Investment Banking division 17 16 3. Information Technology 22 23 4. Research division 10 9 5. Finance and account 11 11 6. Compliance 8 9 7. Management division and others 233 297 Total 915 728

2) Significant change in number of employees in the past 3 years The number of employees at the end of 31 December 2014 were decreased by 187 people from the previous year. Most of departed employees were in Dr.Prasit Srisuwan’s team (Dr.Prasit Srisuwan was director of the Securities company who resigned since 1 Novermber 2013). 3) Serious labor dispute in the past 3 years – none – 4) Total Employees’ compensations Type of compensations Salaries and Bonus Marketing’ remunerations and Executives’ Profit Sharing Others Total

Amount (Million Baht) 2013 2014 443.84 398.43 559.78 228.70 68.55 1,072.17

63.41 690.54

5) Training policy The Company sets a subcommittee for recruiting employees and provides training service both in house training and outside training. For training objectives is to increase employee skill and support them to perform duties with integrity. All employees must keep all information of the Company and client confidentially.

10. Corporate Governance 10.1 Policy on Corporate Governance The Board strongly believes in good corporate governance. As such, the Board gives full support and encouragement to good governance practices throughout the whole organization under the key principles of integrity, transparency, avoidance of conflict of interest, information disclosure and fair dealing. Our management team focuses on upholding the integrity of the industry, the investment profession, and in putting the interests of clients and shareholders above their own personal interests. The Policy on Corporate Governance is divided into five categories as follows: 1. Rights of Shareholders 1.1) The Board oversees and ensures that every shareholder has the following basic rights:  To receive or transfer shares unless the transfer causes the Company to exceed the number of NonThai shareholders quota of 49% of total number of shares outstanding. To obtain accurate, complete and timely information. To propose, appoint or demote directors and to approve the appointment of independent auditors. To make the decision on changes in the Company’s important policy. To obtain profits from operations. To attend the meeting and to vote in the shareholders’ meeting as follows - Nominate, appoint or removal directors - Appoint auditors - Appropriate dividend payment - Issue or amend regulations or articles of associations - Decrease or increase registered capital - Approve extraordinary agenda - Other matters that affect the Company in accordance with the law 1.2) Every shareholder shall receive a notice of the annual general meeting with adequate information specifying the date, time, place and agenda including concerned matters in advance. 1.3) The Company shall arrange the shareholders meeting at the appropriate time and place for shareholders to attend the meeting conveniently. 1.4) All directors are required to attend the shareholders meeting to clarify or answer questions to shareholders.     

1.5) The shareholders shall have an opportunity to propose additional matter in the agenda or ask questions, request for clarification and express opinions appropriately according to the meeting agenda, as a result, the Board should not add any agenda without noticing the shareholders in advance. 1.6) The shareholders shall acknowledge rules and regulations and voting procedures of the meeting. The Company shall post all agenda on its web site in advance prior to sending documents to the shareholders so that they have adequate time to prepare for the meeting. 1.7) The Board’s opinions shall be provided in each agenda and the minutes of the meeting is recorded correctly and completely so that the shareholders and concerned persons are able to verify such meeting. 1.8) All directors and senior executives of the Company are required to disclose their relationship – both direct and indirect ways – with the major shareholders or the third parties who have connected transactions with the Company. 2. Treatment of Shareholders 2.1) The Board oversees and ensures that every shareholder is treated equally as the follows: 1. The Company shall delivery a shareholder meeting invitation at lease 14 days in advance and provides the shareholder adequate information specifying the date, time, place and agenda including concerned matters. Thus, shareholder will have an opportunity to submit questions in advance. 2. The Board shall provide an opportunity for shareholders to submit question in 7 days in advance before the shareholder meeting. 3. Announcement of shareholder meeting will be posted on the newspaper for 3 consecutive days in order to inform the shareholders. 4. The Company will use computer in registration process to consume less time for shareholders. 5. The Company will hold the shareholder meeting on date, time and location that shareholder is able to attend the meeting; and will not sudden change the meeting’s location. 6. The Board shall provide an opportunity for shareholders using power of attorney for proxy forms to pre-indicate his/her voting direction and propose at least a name of Independent director for shareholders to grant their proxy. In the ordinary annual shareholder meeting 2013, shareholders granted their voting rights to Mr. Charn Tulyaphisitchai (Independent Director) to vote on their behalf. 7. The Chairperson of the Board of Directors shall inform rules and regulations of voting procedures, and number of shareholder attended the meeting to shareholders in the meeting. 8. Shareholders who is executive shall add no agenda without informing in advance.

9. Each share has equal rights. The shareholders have the rights to vote according to the number of shares hold. In addition, they shall have equal rights to obtain news and information about the Company. 10. The Chairperson of the Board of Directors shall begin the agenda in order as informed in the meeting invitation. 11. The Chairperson of the Board of Directors shall allow the shareholders to discuss and ask question. 12. The Board shall encourage the use of voting forms for important matters such as related transaction, acquisition, sale of assets, and election of the Board. 13. In the shareholders meeting, all shareholders who are executives, non-executives and foreign shareholders shall be treated equally and fairly. 14. All shareholders who attend the meeting shall have the right to vote as agree, disagree or abstention on each agenda. 15. The Board shall provide an opportunity for shareholders to elect director individually. In the ordinary annual shareholder’s meeting for 2013, there were 160 shareholders counting as 592,658,979 shares and were 1,280 people granted voting right from the shareholders counting as 1,271,436,709 shares. Therefore, total number of people attended was 1,440 people counting as 1,864,095,688 shares which accountable for 71.98 percent of issued shares which followed the Company’s regulation. 2.2) Supervision on Use of Inside Information The Company prohibits directors, executives, and all staffs to trade equity and derivatives by using inside information, and sets clear guidelines to prevent usage of inside information as follows:  The Company has set a code of conduct and has prohibited all executives and staffs to take advantage of the Company’s Watch List, Restricted List, and Research List for securities trading purpose.  The Company has issued regulations and guidance on measurement of confidentiality of client information and proper firewall to minimize information flow (Chinese wall).  The confidential information shall not be disclosed to the public.  The Company has issued regulations and business ethics for all members of management and employees in written and those who breach the regulations will be severely penalized.  The Company has designated the audit and compliance division to oversee that all members of management and employees from all division perform their duties in accordance with the relevant laws and regulations. 56

2.3) Policy on Supervision on Use of Position for Personal Benefits 1. In accordance with Section 59 of the Securities and Exchange Act. B.E. 2535, directors and executives are required to report a change of securities holdings to the Securities and Exchange Commission and the Stock Exchange of Thailand . 2. The Company’s directors, executives and staff who relate to internal information are not allowed to disclose such information to any outsiders or unrelated persons. 3. The Company’s directors, executives and staff who relate to the preparation of financial statements or related information are not allowed to trade the Company’s securities before earnings release. 2.4) Policy on Conflict of Interest The Company has not allowed the directors, executives and staff to operate a competing business and to make connected transactions which may lead to conflict of interest. In the event that connected transactions are required, the Board of Directors will oversee connected transactions made transparent and fair as if the Company deals with outsiders. The directors, executives or staffs who are stakeholders are not allowed to consider and approve these transactions. In case those transactions are considered as connected transactions under the notifications of the Securities and Exchange Commission or the Stock Exchange of Thailand, the directors will strictly oversee transactions made in accordance with regulations, methods and disclosures of information concerning connected transactions of listed companies. 2.5) Policy on connected transactions of the Company, subsidiaries, associated companies and corresponding subsidiaries, which are divided into two parts as follows: 1. Measure to control connected transactions The Company has issued measures to control making connected transactions of the Company, subsidiaries, associated companies and corresponding subsidiaries with individuals who may have conflicts of interest, personal interest or possible conflicts of interest as stipulated by the notifications of the Securities and Exchange Commission or the Stock Exchange of Thailand. The Company’s audit committee will give a view on a necessity to make connected transactions and appropriate prices which will depend on conditions in accordance with a guideline on normal trading and enable to compare the price with outsiders.

In the event that the audit committee is unable to consider connected transactions, the Company will seek an independent expert or the Companyâ&#x20AC;&#x2122;s auditor to act as a viewer of such connected transactions for further consideration of the Companyâ&#x20AC;&#x2122;s Board of Directors and/or audit committee and/or shareholders, as the case may be. Those who may have conflicts of interest or personal interest in connected transactions shall not be entitled to vote for the approval of connected transactions. In addition, the Company will disclose information of making connected transactions and vital asset acquisition or disposal of the Company and its subsidiaries in accordance with the notifications of the Securities and Exchange Commission or the Stock Exchange of Thailand and the accounting standard of the Institute of Certified Accountants and Auditors of Thailand. 2. Policy or Tendency on Possible Connected Transactions The Company, subsidiaries, associated companies and corresponding subsidiaries may make possible connected transactions with individuals who may have possible conflicts of interest. In the event of being normal business transactions and normal business supporting transactions with general trade conditions with individuals who may have conflicts of interest, especially subsidiaries of Country Group Securities Public Company Limited., the Company has set a policy on connected transactions by providing various conditions in accordance with the nature of normal business operations in the market which can compare the price with outsiders pursuant to a principle approved by the Companyâ&#x20AC;&#x2122;s Board of Directors under the Securities and Exchange Act. B.E. 2535. Related parties must strictly follow a joint agreement and set a clear and fair price and terms and not lead to transfer of benefits. Making new connected transactions or changing prices or conditions, the Internal Audit and Compliance Department must investigate information and prepare quarterly reports to the Audit Committee for consideration and recommendation on the appropriation of prices and reasons for making connected transactions. In case of other normal business, normal business supporting and connected transactions, the Company will follow the aforesaid measure to control connected transactions.

3. Role of Stakeholders The Board serves to assure equal treatment of stakeholders - clients, shareholders, investors, creditors, partners, management, employees, independent auditors, public sector, society and other concerned entities. As such, the company must comply the following: 3.1) Policy on Safety and sanitation The Company improved working environment by expanding work space to reduce congestion and for a better working quality. Therefore, the Companyâ&#x20AC;&#x2122;s employees can create an excellent working performance and improve their capability. Also, the Company provides health insurance for its employees. 3.2) Policy on Employee Compensation and Benefits The Company has set a policy on employee compensation and benefits to which the KPI method is applied for evaluating performance to pay compensation to staff equally and fairly. The Compensation Sub-committee is appointed by the Companyâ&#x20AC;&#x2122;s Board of Directors has overall responsibility for considering and determining appropriate payments. 3.3) Establishment of Employee Provident Fund Provident fund ("the fund") is a fund set up voluntarily between employers and employees. Asset of the fund consists of money contributed by both employers and employees. This means employees are not alone in saving the money, employer help them at the same time. The contribution to be made by employer will always equal or exceeding that contributed by employees. Therefore, set up of provident fund can be regarded as a kind of benefit that could motivate employees to work with employer. Provident fund not only provides a tool for employees to save consistently with the employer's assistance, asset of the fund is further managed by a professional called "Asset Management Company" The benefit derives from management is distributed to member of the fund proportionately. 3.4) Policy on Human resource development Employees have been trained to enhance personnel development and have been instilled to practice their job with honesty as well as keep clientsâ&#x20AC;&#x2122; information confidential.

3.5) Policy on Violation of Human Rights 

Support and respect the protection of human rights, prevent oversea the Company’s operations from human rights violations. For instance, the Company should seek to eliminate forced labor and child labor.



Treat all stakeholders fairly and respectfully without discrimination as to race or ethnic origin, gender, age, skin color, religious, body, status or family.

3.6) Policy on Client responsibilities The Company aims to offer a highest clients’ satisfaction therefore the Company must responsible to the client with clear and fair practice according to the rules and regulations in dealing with clients. The clients are also delivered accurate information with transparency. Furthermore, the Company has provided a communication channel where clients can leave their complaints, and has set guidance and procedures on dealing with the client’s complaints in a careful and fair manner. Furthermore, the Company has participated in the Dispute Settlement by Arbitration which facilitated by Securities and Exchange Commission (SEC). In the case that the client has any dispute or arbitration issues regarding the Company’s business conducts, the client could file for settlement by arbitration; however, the dispute must equip with the conditions indicated by SEC. 3.7) Policy on Competitor responsibilities The Company must conduct the business with clear and fair practice according to the rules and regulations particularly the rates of commission fee charged in both securities and derivatives trading. Also, marketing officers and head of marketing team are treated fairly with appropriate remuneration. 3.8) Policy on Suppliers The Company shall treat suppliers equally according to term and conditions specified in the contract without a violation of laws such as using copyright software. 3.9) Policy on Creditors The Company is promising to deal fairly with creditor in terms and conditions which indicated on the loan agreement, principal and interest‘s repayment, and the collateral agreement

3.10) Policy and practice on Intellectual property or copyright  The Company supports our employees to do their works without violating the law or intellectual property law such as trade mark , patent, copyright and other intellectual properties,  The Company‘s employees have right to create and invent their work independently under the law specified except the works that generate from work and use of the Company’s data are property of the Company. However, if the Company clearly permit that the invention is belong to its employees, the right of invention belong to them.  The Company supports its employees to realize an important of intellectual property right in workplace and daily life.  Before using any data or information, a person who uses the data or information must inspection the intellectual property right before use. 3.11) Policy and practice on corruption  Manage to have effective internal control and risk evaluation to prevent corruption, and improper behavior of employees and outside people who related to the Company.  Encourage honesty and responsibility as organization culture as well as increase awareness of corruption that is wrong behavior.  To have a transparency of financial report under universal accounting standard.  Provide channel for employees to report, suggest or complain regarding corruption.  Determine to have preventive measure for give and receive gifts, give dinner of welcome, or excess expense that over the Company limit or violate law of related countries.  Determine to have preventive measure for any bribery that directly or indirectly facilitate the relationship in doing business.  Specify a clear and fair procurement under proper procedures and rules.  Specify a transparent of any money donation.  Encourage employees to exchange and share proper guidelines among other companies in the same industry including all related stakeholders in order to join anticorruption activities hold by associations, chamber of commerce or others compliance units. 3.12) Policy and practice on Social CGS is always aware of our social responsibilities to the community that we are a part of. We dedicate to act in a socially responsible way in our interactions with all stakeholders. In each year, CGS allocates partial budget to 61

support corporate social responsibilities (CSR)’s activities by focusing on three areas such as education, religion, and social improvement. In 2014, there were 2 education projects, 6 religious projects, and 4 social projects. 3.13) Policy on Use of Resource  Maintain asset of the Company in good condition and prevent them from breakage and loss.  If any employee who responsible for particular asset and lose it, this person should co-responsible with the Company according to rules, regulations, or policy stated.  Well use the Company’s asset by concerning environment and energy.  The Company’s asset is not allowed to indirectly and directly use for employee own interest.  Employee must return all assets including data use for work when he or she is not the Company’s employee. The data is not allowed keep in any form such as duplicate. 3.14) Policy on Environment  Act according to law and requirement about the environment  Encourage employees to learn about the environment in order to instill responsibility toward the environment.  Encourage employees to exchange knowledge and experience about the environment among employees or departments within the Company.  Encourage and support employees to regularly improve their working condition to suit environment.  The Company has management policy that prevents impact of operation from environment. Additionally, the Company acknowledges the rights of shareholders according to the specified law and encourages cooperation between the Company and its stakeholders for sustainable business growth. All stakeholder groups are treated equally and fairly, and the information is disclosed fairly and timely to all related parties in accordance with the SET’s procedures.

4. Information Disclosure and Transparency 4.1) Information Disclose 1. Provide accurate information in both Thai and English with transparency and disclose consistently via the Company’s website . Also the information should be up to date. 2. Provide and disclose information to the Company’s Director and/or the Company’s executive upon request. 62

3. Assign specific persons or departments to disclose information to shareholders, investors, analysts, mass media or supervisory units. 4. Details of information which shall be disclosed consistently are:       

General information and type of business Financial statements and operating performances and researches List and shares proportion of major shareholders and executives Risk factors of business Policy on directors and senior executives’ remuneration Directors’ qualification information Connected transactions

 Code of ethics and practices 5. Prepare financial statements or financial information to show financial status and operating performance as required by law and disclose other information in a complete, accurate, sufficient and timely manner so that shareholders and stakeholders are informed accordingly. 6. Arrange to have financial statements audited by an independent external auditor. 7. Facilitate analysts, investment advisors, brokerage firms, credit rating institutions, mass media and external supervisory units, and etc. in the best interest of investors. 8. Disclose policies on corporate governance and operating performance in the annual report website, as well as announcing them at the head office and all branches. 9. Disclose roles and duties of all committees, the number of meetings and attendances, directors’ opinion including a policy on directors’ and senior executives’ remuneration in the annual report and the Company’ s website 10. In accordance with Section 59 of the Securities and Exchange Act BE 2535, the directors have a duty to report trading/holding of company’s securities to the Board every month. 4.2) Director’s Report The board of directors is responsible for the accuracy of the Company’s financial statements as well as those of its subsidiaries included in the Annual Report. Thus, reporting is prepared carefully after every meeting to specify the responsibility of the Board for the consolidated financial statements of the Company and its subsidiaries and other important matters according to the standard practices suggested by the SET along with the audit report, as shown in the annual report.

Under the structure of the Company’s Board, it has provided the adequate independent directors to balance the power as specified by the regulators’ rules. In turn, the Audit Committees consist of individuals who have adequate knowledge and experience to review the quality of financial reports including disclosure of important information in the notes to the financial statements and to discuss necessary issues with compliance and 2014, the Audit Committee has proposed and appointed Mr.Chavala Theinprasertkit and/or Mr.Permsak Wongpatpagorn and /or Mr.Niti Jungnitnirundr and/or Ms. Nisagorn Songmanee of Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. to act as the auditors of the Company for the year 2014. 4.3) Investor Relations The Board realizes the significance of accurate, complete, and transparent disclosure of the Company’s financial and non-financial information including those that may have impact on share price and investor sentiments. As such, information must be provided in a manner that is also timely and consistently to all investors and stakeholders for their decision making according to the rules and regulation of the SET. The Company shall disclose such information through various channels such as reports to the SET, Company website (www.cgsec.co.th). To disseminate accurate and reliable information as well as to eliminate rumours or misleading information, the Company has assigned the chief executive officer to be responsible for answering any questions and clarifying any information of the Company to investors and relevant parties. Investors can contact this person by telephone at number 0-2205-7000 ext. 1007, or at e-mail address: IRCGS@countrygroup.co.th. In addition, the Company has assigned the audit and compliance division to respond to clients’ complaints and can be contact by telephone at 0-2205-7000 ext. 1300-11.

5. Board Responsibilities The Board’s main objective is to instill leadership and to guide the Company in a direction that will bring success to its stakeholders. As such, the Board’s duties and responsibilities includes the following; to set and ensure that policies are adhered to, to approve the Company’s business strategy, objectives, corporate plan and budget, to oversee adequate risk management, and to oversee effective and transparent implementation by the management team. 5.1) Structure of the Boards 1. Balance of Power of Directors The Board consists of at least 5 directors but not more than 15 directors, who are skilled, experienced, dedicated, and equipped with knowledge and independent judgment to share in Board meetings. In

addition, each director must possess qualifications specified by law. Also, one third of the Board or at least 3 members constitution are independent directors. An appointment to the Board is subject to pre-set agenda with transparent and clear nomination of wellprofiled directors. The Company shall disclose the profile of all directors in detail, including any changes made to the public through the Company’s website, internal media , head office and also at every branch office. 2. Qualifications of Directors and/or Independent Directors A number of independent directors are not limited to a specific number. The Board elects a member of independent directors based on his/her knowledge and experience that best benefit the Company ;however, his/her qualifications should meet the requirement of SEC and the Act of Public Company Limited. Moreover, the independent director shall not take position over 9 years since the day he/she is appointed as independent directior for the first time. 5.2 Sub-Committees The Company consist of 7 committees which are the Board of directors, the Audit committee, the Executive committee, the Nomination sub-committee, the Compensation sub-committee, the Investment committee, and the Good governance committee. Seven committees are set up to monitor the Company in different areas.  Leadership, Vision, and Independent Decision The Boards main objective is to instill leadership and to guide the Company in a direction that will bring success to its stakeholders. As such, the Board’s duties and responsibilities includes the following; to set and ensure that policies are adhered to, to approve the Company’s business strategy, objectives, corporate plan and budget, to oversee adequate risk management, and to oversee effective and transparent implementation by the management team. In addition, the Board sees the importance of good corporate governance and emphasizes on good internal control and effective risk management which is regularly reviewed in board meetings. Thus, it is essential that the Board comprise of directors who have leadership and vision, as well as capability to make independent decisions for the highest benefits of the Company and the stakeholders.  Conflicts of Interest The Board has set clear guidelines to prevent conflicts of interest. These are listed below as follows:

 To have a well-structured organization chart, whereby each functional unit can be monitored for performance with relevant committees to oversee internal control for adherence with external regulatory bodies.  Encourage all employees to adhere to good corporate governance by promoting working principles of integrity, professional ethics, client confidentiality, and no usage of inside information for own interests.  For situations dealing with conflicting stakeholder interests, the Board and management shall consider the each carefully, honestly, reasonably, and independently for the best benefit of the Company, with the resulting decision disclosed to shareholders.  In cases of conflict of interest or related transactions, all related directors must disclose such information to the meeting immediately and shall not have the right to attend nor vote for that agenda.  Directors, executives and all staff should avoid any transactions that may lead to conflict of interest as a result of taking advantage of inside information.  Directors, executives and all staff should avoid holding shares in the business of its competitors that might affect their duties or responsibilities. In the case that such person holds shares before employment OR prior to the Company to operate the same business, the person must report to his/her relevant supervisors and send a copy of the report to the audit and compliance division.  Business Ethics The Company strongly upholds its business ethics to the utmost importance in achieving long term success, business targets and in maximizing shareholder’s wealth. The Board has set a code of conduct for employees to follow and use as a guideline to perform each dedicated task with honesty and integrity to the Company, and all stakeholders. In addition the Company has established a set of punitive courses for those in breach of the code of conduct which is regularly monitored by the audit and compliance division.  Internal Control and Audit and Financial Report The Company bestows serious attention on internal control system at both managerial and operational levels, focusing on adequacy and appropriateness for the prevention of damages that may occur to the

Company’s financial and business operations. The Company has set up internal control and audit policies as follows:  Management is assigned to prepare accurate, complete and timely financial reports both quarterly and yearly.  Efficient internal control and audit systems to ensure that the Company adheres to all relevant standards and laws which in turn is under the investigation of internal auditors and review of the audit committee.  The Company has clearly defined in writing the responsibilities and authorities of the management team.  Continuous monitoring and auditing of Company assets to avoid damages or exploitation.  Segregation of duties in order to have an appropriate system of check and balance.  The Board gives importance to advice or suggestions made by independent auditors and regulatory bodies in helping the Company to further improve its operational practices.  An audit and compliance division that reports directly to the audit committee to ensure independent judgment.  Policies to recruit reputable external auditors approved by the SEC in order to audit, advise and rectify any weaknesses or errors of the internal control system. 5.3) Meeting of the Board of Directors 1. The Board schedules normal meetings in every month so that directors can allocate their time accordingly. Additionally extra board meetings can be held if necessary. In every normal meeting the Board will follow up on the progress of issues from previous meetings and monitor all operating performances of the Company. 2. Each Board meeting must consist of at least half the members present. 3. The chairperson will approve the proposed agenda as advised by the executive chairperson and will consider other matters in the agenda proposed by any director in the meeting. Hence, each director is able to independently propose other matters in the agenda. 4. The chairperson shall give sufficient time for management to propose each matter or search for supporting documents in order to carry out a proper discussion. 5. The Board shall notify the Chief Executive Officer to invite senior executives to attend a Board meeting in order to directly provide additional information on specific issues.

6. The Board may ask for additional information from the Chief Executive Officer or other assigned executives or request for independent opinions from external consultants. 7. The management shall be responsible for giving proper information, advice and services to the Board in a timely manner. 8. The Board has a policy for non-executive directors to hold a meeting at least twice a year to discuss various problems without presence of management. The result of the meeting will be reported to the Chief Executive Officer. 9. The secretary of the Board shall send an invitation letter together with the agenda and supporting documents to every director in advance of no less than 7 days so that directors have adequate time to review the information. 10. In every Board meeting, the secretary shall keep record of the minutes of the meeting for future reference. 5.4) Evaluation of the Board of Directors The Board encourages regular self-evaluation by considering and analyzing results, problems and obstacles for future improvement. The Boardâ&#x20AC;&#x2122;s performance is evaluated on an overall or specific case basis, not focusing on any individual director. 5.5) Directors and Management Remuneration The Company has set directors remunerations clearly and transparently. Such remuneration is approved at the annual general shareholders meeting. In certain circumstances that a director is assigned to perform more roles with greater responsibilities such as being members of the sub-committee, they shall be rewarded accordingly. The Company has formed Compensation Subcommittee to consider remuneration for the management team with fairly rate. Furthermore, Compensation Subcommittee will consider the number of warrant assign to director, top management, or employees. Executive director or employee, who is assigned to receive securities more than 5% of allocated securities, must not a member of Compensation Subcommittee. Disclosure of all relevant remuneration is displayed in yearly annual reports and on the Companyâ&#x20AC;&#x2122;s website. 5.6) Development of Directors and Executives 1. Report and summarize all rule and regulations to the Board and Executives regularly. 2. Encourage the directors to learn and understand the roles and responsibilities practices in equity market. 68

3. A new director must be approved by the SEC and SET. 4. A first time director will acknowledge the company profile, rules and regulations and director handbook.

10.2 Corporate Governance on Management Authorities and Duties of the Board of Directors  Set the Company’s policy, mission and objectives in accordance with the Public Company Act, rules and regulations by the SEC, SET and external supervisory units, and the resolutions of the shareholders’ meeting.    

Approve the Company’s annual corporate plan and budgets. Appoint the executive board to manage the Company. Determine a list of authorized signatory directors. Appoint persons to replace directors resigning before the terms expired.

 Appoint, remove, and terminate the employment of the Executive Chairperson and President, as well as approve their salaries, remunerations or other benefits.  Approve the budget on employee’s salaries, bonuses, and other benefits.  Approve the Company’s financial and assets transactions.  Perform other duties in achieving the Company’s policy, mission and objectives.  Hold board meetings. Authorities and Duties of the Audit Committee  Review financial reports to ensure their accuracy and adequacy.  Review internal control systems and audit functions to ensure their appropriateness and effectiveness as well as independency of compliance division. Also appoint, remove, and transfer Vice President of Internal audit department or related department.  Review the Company’s operations and activities to ensure their compliance with Securities Company Act, SET regulations and other applicable laws.  Consider and propose auditors as well as their remunerations. Also attend auditor meeting with no management persons involved at least once a year.  Review information of related transactions or any transactions in conflicts of interest to ensure their accuracy and completeness.

 Prepare and disclose audit committee reports in the annual reports which must be signed by the chairperson of audit committee. The report must consist of the following: 1) Agreement on accuracy, adequacy and reliability of the Company financial statements 2) Agreement on adequacy of the Company’s internal control 3) Agreement on SEC and SET conducts or related business laws 4) Agreement on appropriateness of Auditor 5) Agreement on the Company’s related transaction 6) Attendance and number of Audit committee’s meeting 7) Agreement on duties of Audit committee comply to Charter 8) Other transactions that shareholders and investors should notice under duties and responsibilities delegated by Executive Board.  Perform any deeds assigned by the board, provided that the committee accepts such assignments.  Report any suspect transactions that may affect the Company’s financial and operational status to the Board of Directors for revision. 1) Conflict transaction 2) Corruption or fraud of internal control 3) Violation of securities law or business law In case that Board of directors or Executive board ignores to revise any irregular transactions within a certain period, any Audit committee shall report to SET or SEC. Authorities and Duties of the Executive Board  Manage and oversee the Company’s operation and administration in accordance with the Board’s resolution on policy, mission, objectives, and annual corporate plan and budget.  Recruit, appoint, remove, and transfer senior executive vice presidents and executive vice presidents as well as approving their salaries, remuneration or other benefits.  Appoint, remove individuals or juristic persons to be the advisor of the executive board. In addition to approve remuneration to such persons.  Execute assignments from the board.  Hold executive board meetings. Approval of executive board meeting is based on majority vote. One executive board is eligible for one vote except whose that related to topic in the meeting, he or she will

have no voting right. If the number of vote is equal, chairperson of executive board will have one more voting right. In the case of situations that require urgency, the Executive chairperson shall have the authority to consider with discretion in proceeding and approving matters within the authority of the executive board or the matters not specified herein; and shall report those actions to the executive board. Authorities and Duties of the investment committee To study and to consider on securities for the account of company to obtain maximum returns according to the policy and the frame determined by the Board of Directors of the company, while the Investment Committee is independent separately from marketing department and other work section. Authorities and Duties of the CEO and President  Manage and oversee operations in accordance to the Public Company Act, rules and regulations by the SEC, SET, external supervisory units, as well as resolutions by the board of directors and executive board in relations to policy, objectives, annual corporate plan and budget.  Indicate rules and regulations, and announcements; and control the operation of each department in accordance to the Company’s rules and regulation, which comply to SET regulation, securities law or related business law.  Approve matters that assigned by the Board of Director and Executive Board.  Promote and develop abilities and potentials of managements and staffs. Also build cohesiveness within organization.  Seek for business opportunities such as securities brokerage, investment banking, and related business in order to increase the Company’s revenue.  Approve credit for securities transaction including cash account, credit balance, short sell, change of buy and sell order, trading error, etc. The approval shall be under specific credit balance.  Approve an investment expense that is not indicate in annual budget and not exceed Baht 500,000 per transaction. This approval shall be report to the Executive Board.  Approve the Company’s general expenses which are not exceed Baht 200,000.  Propose bonus policy and co-approve bonus payment of all level of employees to the remuneration committee and the Board of Director for final approval. Bonus payment is considered based on the Company’s operating result and employee’s performance.

   

Co-approve compensation for marketing officer, head of marketing team, and head of marketing branch. Report to the Board of Director and Executive Board. Recruit, appoint, remove, transfer, and promote all levels of employees below managing director level. Adjust salary of all levels employees below managing director level.

 Punish employees who violate the employment agreement.  Manage other matters that assigned by the Board of Directors and Executive Board. Corporate governance of the Company’s operation The Board of the Company has set the policy to control and manage corporate governace of the Company and invested businesses in accordance with the corporate governance of the Company’s subsidiary and it associate, following SEC and SET announcement. The Company believes that good policy and criteria of corporate governance will promote efficiency and effectives that lead to increase shareholder’s trust toward the Company.The policy are classified into 2 areas: 1) Policy on Corporate Governance of management 1.1) The Parent company has set the guideline of voting in annual shareholder meeting of the Company’s subsidiary and its associate through the Parent company’s representative on the important agenda such as approval of the minutes of the statutory meeting, approval of financial statements, selecton of director, remuneration, selection of auditor and compensation, and profit allocation. 1.2) The Parent company has set up the policy on corporate governance of the Company and its asscociate as a single unit of the Parent company. In order to directly and indirectly control the Company and its asscociate as well as mornitor the Parent company’s benefits, the following matters must be approved by the Board of the Parent company and the shareholder meeting: 1.2.1) Topics that needed approval from the Board of the Parent company 1. Appoint or nominate a name of person to be director or executive in the Company and/or its associated company. Appointed Director and executive has power to decide in the matter of general management and operation (except mentioned in 1.2.2) in the Board meeting of the Company and its associate.Director or executive who name is nominated must show in the White List and his/her qualification must be reliable according to the Announcement of SEC. 2. Consider of dividend payment of the Company 3. Edit the regulation of the Company except the significant ly important matters in 6. 72

4. Approval of annual budget of the Company. The items 5 -13 is very important that any change will affect financial and operating status of the Company’s subsidiary, therefore the Board of the Parent company must approve first. The items that needed approval are as follows: 5. The Company agrees to do transaction with related party of the Company’s subsidiary , acquisition transaction or sale of asset of its subsidiary 6. Transfer or waiver of benefits including waiver of claims 7. Sell or transfer partly or all of its subsidiary’s business to other person 8. Purchase or transfer business of other company , and later belong to the Company. 9. Partly or majorly Edit or terminate a rental contract of the Company by allowing others to manage. 10. Rental or hire-purchase main business or asset of the Company 11. Loan, credit guarantee, any business transaction that increase financial burdle or financial support to other person that is not involve with business of the Company’s subsidiary 12. Termination of the the Company 13. Other transactions that are not general business transaction of the Company’s subsidiary. 1.2.2) Item that needed approval from the Shareholder meeting of the Parent company with no less than 3/4 of total vote of the shareholder who attend the meeting. 1. The Company agree to do transaction with related person of the Company ; or acquisition or sell of its asset . 2. Capital increase of the Company and registered capital decrease that share holding proportion is changed, resulting in voting right is less than 10 percent. Or the Company’s voting right is less than 50 percent in the shareholder meeting of the Company. 3. Any transaction that indirectly and directly affect percentage of voting right in the shareholding meeting of the Parent company by less than 10 percent. Or the Company’s voting right is less than 50 percent in the shareholder meeting of the Company for uncommon business transactions. 4. Termination of the Company. If the size of the Company and the Parent company is compared and the calculated size is needed to be approve from Shareholder meeting of the Parent company. 5. Other uncommon transactions of the Company and that significantly affect the Company. If the size of the Company and the Parent company is compared and the calculated size is needed to be approve from Shareholder meeting of the Parent company. 73

6. Edit regulations of the Company that significantly affect operating and financial status. 1.3) The Parent company’s board of directors will monitor the operation of the Company and its associate to make sure they follow the Parent company’s business and budget plan. Moreover, the Company shall disclose connected transactions or , acquisition or sell of its assets to the Company according to announcement of SEC. 1.4) The Parent company’s director must control the Company to have adequate and strict internal control to prevent corruption. The Company should have clear communication channel so the Parent company ‘s directors and executives can receive information and monitor its operation and financial transaction between the Company and , directors and executives. Furthermore, the Parent company ‘s internal audit and independent director can directly access information and audit report in order to make sure that the Company follows the established system. 1.5) Directors and executives of the Company must disclose personal information and related person to the Parent company’s board in order to prevent conflict of interest transaction. The Board of the Company have to inform the Parent company’s board within a certain period of time for making any decision or approval. The decision is truly based on benefits of the Company and the Parent company. Additonally, directors of the Company shall not approve any transaction that relate to his/her own interest or directly and indirectly conflict the interests. 1.5.1) Transactions between the Company and, executive director or related person that is not follow the rules and regulations of related transactions. 1.5.2) Use internal information of the Parent company and the Company except the information is published. 1.5.3) Utilize property or business opportunity of the Parent company and the Company and violate the criteria and general practice of the SEC announcement. 1.6) The Company has to report its business plan, business expansion, major investment project as well as join venture with others to the Parent company through monthly report. The Parent company has a right to ask the Company to submit any attachment , which its subsidiary must follow.

1.7) The Company must submit related information upon request. 1.8) If the Parent company finds any uncommon, the Company must clarify and/or provide the required document. 1.9) Director, executive, employee , or assigned person from the Company and its associate is prohibited to use internal information of the Parent company for their own interest. 1.10) Director, executive, or individual who involved with the Company is allowed to do transaction with the Company if the transaction is approved from the Parent company’s board. 2) Policy on financial control of the Company’s subsidiary and its associate 2.1) The Company and its associate have to submit monthly operating report and audited quarterly financial statements ; and also allow the Parent company to use the information in consolidated financial statements or the Parent company’s quarterly report. 2.2) The Company and its associate have duty to create operating budget , make operating comparison quarterly, and report to the Parent company. 2.3) The Company and its associate should report any significant problem to the Parent company or upon request.

10.3 Supervision on Use of Inside Information The Parent company sets clear guidelines to prevent usage of inside information as follows: 1) The Parent company’s board and executive including their spouse and immature children have to inform a shareholding status in accordance to rules and regulation of SET and SEC. 2) The Parent company prohibits directors, executives, employees and employees of its subsidiary to use inside information that is not published. 3) The confidential information shall not be disclosed to the public. Confidential information is classified based on important level such as public , disclosure, confidential , and most confidential. Use of information should be limited to specific task. The Parent company’s confidential information shall not be disclosed. 4) Disclose information must be approved from Chief Executive Officer/ Division/Assigned person only. 75

5) The Parent company has issued the rules and regulations of supervision on use of inside information in written and communicated to directors, executives and all employees.

10.4 Transaction approval

Auditor 's Remuneration 1. Audit Fee In 2014, the Company was approved from the general meeting of shareholders to pay Baht 2.45 million for audit fee. 2. Non Audit Fee - None -

11. Social Responsibilities CGS significantly aware of Corporate Social Responsibilities and we also strongly performs and believes in corporate governance that will lead us to sustainably growth. Moreover, our core corporate value and cultures consists of honesty, managementâ&#x20AC;&#x2122;s moral and social responsibilities. Furthermore, we have a policy of management with transparency which will be able to be audited to shareholders. The transparency policies deliver good benefits to all parties.

1. Fair Business Practices CGS strongly support and encourage a good business practice that strictly follow rules and regulations especially rules and regulation of commission rate and compensation to marketing officer. CGS do business with all partners comply with the conditions specify in contract. The content of conditions shall not violate any intellectual property such as computer programs. Furthermore, the company always do business with good governance and fair. CGS strongly perform and follow all contract conditions that make with creditors or suppliers including paying debts, principle and interest to all service providers and suppliers.

2. Anti- Corruption and Bribery CGS has had a policy against corruption, not receive / pay bribes. (Corrupt) to benefit business and report inappropriate actions by CGS and provide a practical guide for employees that are prepared to guide them in the act and behave as provided in good faith, not exploitation or call stipend is implied or intent to the malpractice, both directly and indirectly.

3. Human Right CGS support and respect the protection of human rights. For instance, the Company should seek to eliminate forced labor and child labor. Furthermore, the Company should treat all stakeholders fairly and respectfully without discrimination as to race or ethnic origin, gender, age, skin color, religious, body, status or family.

4. Respect to employees ď&#x201A;ˇ The Safety and Health of employees

CGS improved working environment by expanding working space for reducing congested area for better quality of life, more creativity of work and develop employees competency. Moreover, CGS also provides health insurance to all employees.  Human Resource Development CGS sets a subcommittee for recruiting employees and provides training service both in house training and outside training. For training objectives is to increase employee skill and support them to perform duties with integrity. All employees must keep all information of the Company and client confidentially.  Salary, Remuneration and Welfare Management for employee CGS uses KPI system to evaluate fairly employee performance which subcommittee will be consider compensation based on KPI.  Establishment of Employee Provident Fund Provident fund ("the fund") is a fund set up voluntarily between employers and employees. Asset of the fund consists of money contributed by both employers and employees. This means employees are not alone in saving the money, employer help them at the same time. The contribution to be made by employer will always equal or exceeding that contributed by employees. Therefore, set up of provident fund can be regarded as a kind of benefit that could motivate employees to work with employer. Provident fund not only provides a tool for employees to save consistently with the employer's assistance, asset of the fund is further managed by a professional called "Asset Management Company" The benefit derives from management is distributed to member of the fund proportionately. As of 31 December 2014, the Company has total employee of 728 members that consists of marketing officers 363 persons and operating officers 365 persons. On 1 March 2014, CGS has organized the big activity “Staff thank you party” in order to build good relationship among employee. The objective of this event is for sincerely thank you all employees for fully contribute to the Company all through the year 2013.

5. Client Responsibilities The Company aims to offer a highest clients’ satisfaction therefore the Company must responsible to the client with clear and fair practice according to the rules and regulations in dealing with clients. The clients are also delivered accurate information with transparency. Furthermore, the Company has 78

provided a communication channel where clients can leave their complaints, and has set guidance and procedures on dealing with the client’s complaints in a careful and fair manner. Furthermore, the Company has participated in the Dispute Settlement by Arbitration which facilitated by Securities and Exchange Commission (SEC). In the case that the client has any dispute or arbitration issues regarding the Company’s business conducts, the client could file for settlement by arbitration; however, the dispute must equip with the conditions indicated by SEC.

6. Environmental Conservation The Company has many policies about environmental conservation which also build employees awareness toward environment such as  Strictly follow and comply with environmental laws and regulation  Encourage employees to train about caring environment for creating environment responsibility  Support employees to share knowledge and experience about environment among employees  Inspire employees to care environment and continuously develop working process to match with environmental situation. The Company has management policy about caring environment. Environmental policy continuously reviews and evaluate with its performance.

7. Social Responsibility The Company is always aware of our social responsibilities to the community and dedicate to act in a socially responsible way in our interactions with all stakeholders every year. The Company allocates partial budget to support corporate social responsibilities (CSR)’s activities such as education, religion, and social improvement. In 2014, there were 2 education projects, 6 religious projects, and 4 social projects. The detail is as follows: Education 1. Supported activity of glorification to Her Royal Highness Princess Maha Chakri Sirindhornp to support and harmonize community.

2. Train and seminar to education institute about investment knowledge such as Rangsit university, Krirk university , Rajamangala University of Technology Phra Nakhon, Rajamangala University of Technology Thanyaburi , Rajamangala University of Technology Rattanakosin , Suranaree University of Technology , Nakhon Ratchasima Rajabhat University, Naresuan University , National Institute of Development Administration (NIDA) and student of New Investors Program for Society (NIP) as well as provide company visit. Religious 1. Co-Hosted in offering of robes at Wat Pak Muang, Khua Mung , Amphoe Saraphi District, Chiang Mai 2. Co-Hosted to make merit at Wat Pa Doi Saeg Tham, Wiang Kao ,Khon Kaen Province 3. Co-Hosted in offering of robes of October 14 foundation at Wat buddhapanya , Nonthaburi. 4. Co-Hosted Thot Kathin to support building sermon hall in a monastery at Wat Santitham Banpot 5. Co-Hosted Thot Kathin at Wat Pong Ko , Bang Saphan, Prachuap Khiri Khan Province 6. Co-Hosted Thot Kathin at Wat Ampawan Piyaram, Amphoe Mueang, Khlong Kra SaengPhetchaburi Province Social Development 1. Support projects to enhance and train women’s professional skills and knowledge, Association for the Promotion of the Status of Women under the Royal Patronage of HRH Princess Soamsawali 2. Support “Tawai Too Ya project” under the Royal Highness Prince Dipangkorn Rasmijoti 3. Donate cloths to The Mirror Foundation 4. Donate toy and stuffed doll to Children Hospital

12.

Internal Control and Risk Management

12.1 Opinion of the Board of Directors For the Company (CGS), the Audit Committee consists of three independent directors. Mr. Priyong Teerasathian acts as the secretary of the Audit Committee and makes a report on audit results and practices every month. In 2014, the Audit Committee held 12 meetings as shown in the Audit Committee report included in the 2014 annual report. In the Company Board meeting No.2/2015 on 27 February 2015 which the Audit Committee also attended, the Company Board evaluated the Company internal control by considering the information and reports and inquiring the management of the Company regarding the adequacy of its internal control system in five majors areas such as the organization and operating environment, risk management, management operational control, information and communication system, and monitoring system. After such evaluation, the Board of the Company 80

was of the opinion that the Company had in place an appropriate and sufficient internal control system in the areas concerned. For other areas of the internal control system, the Board was also of the opinion that the Company had sufficiency of the internal control system. In addition, the CGS’s current auditor on both quarterly and yearly basis reported that no important error was found regarding the internal control system. The Company has provided the audit and compliance division to audit and oversee the Company’s operations efficiently and as the center for supervising the Company’s operations in compliance with the laws, rules and regulations, notification, policy and regulations specified by the regulators. The audit and compliance division is required to make a report on audit results and practices to the Audit Committee every month before presenting to the Board of Directors of the Company, except that there is an urgent case to report the management and the Board to acknowledge it for immediate actions. The Company has appointed Mr. Priyong Teerasathian, Vice Managing Director of audit and compliance division, who is the head of audit and compliance division. Mr. Priyong Teerasathian has involved in audit and compliance functions in the securities business and financial institutions for more than 15 years and is a qualified person attending related training courses as specified by the SEC. According to the SEC to inspect CGS’s operation in 2014, overview, the Company has improved and revised the operation from the previous audit. Following the current inspection by the SEC using the risk-based approach (RBA), the result of CGS was moderate (Level 3) compared to the high result (Level 4) in the previous inspection. However, it was noticed that there were some issues concerning the operation which was, considering the guideline, insufficient. The internal audit division of the Company has been monitoring and preparing monthly audit result including additional issues noted further. The report has been sent to the Audit Committee to acknowledge the issues and progress of revision. This would ensure that the internal control of the Company comply with the guideline of the SEC. The issues that have been found and revision plan from the 2014 report of the internal audit division are as follows:

Issues* The review of customer’s credit facility was not careful enough to protect and manage risk in such matter effectively due to incomplete customer credit review in accordance with the guideline of the Association of Thai Securities Companies (ASCO)

CGS’s Action CGS has proceeded to review the customer’s credit facility completely and specified the strict rules. If the revision of customer’s credit facility is not to complete within one month from the specified date, the customer’s account will be locked.

Issues*

CGSâ&#x20AC;&#x2122;s Action In addition, the internal audit and compliance division has been monitoring in the above matter and presented to the audit report to the Audit Committee and the Board of Directors in the meeting already. The monitoring on accessing security trading data CGS has considered reducing the number of was not careful enough regarding the right of some employees who have access to the data appropriately employees to access this data in the system. and necessarily with the monitoring by the internal audit and compliance division. In addition, the internal audit and compliance division has been monitoring in the above matter and presented to the audit report to the Audit Committee and the Board of Directors in the meeting already. The monitoring on proprietary trading was not CGS has monitored its proprietary trading on a careful enough in certain cases which could be a monthly basis including the revision on proprietary risk for CGS not complying with the stated rules trading rules in accordance with the guideline of the Association of Thai Securities Companies (ASCO) In addition, the internal audit and compliance division has been monitoring in the above matter and presented to the audit report to the Audit Committee and the Board of Directors in the meeting already. The monitoring on the trading of employees and CGS has investigated whether or not the addresses of related people was not careful enough due to customers and employees match along with incomplete checking of the matching addresses of documenting the detail in case of there being the customers and employees. relationship between them in the system. In addition, the internal audit and compliance division has been monitoring in the above matter and presented to the audit report to the Audit Committee and the Board of Directors in the meeting already.

*Some issues might be considered a violation under the Securities Exchange Act of 2535. CGS has been fined in such cases where CGS has already revised and reported to the SEC.

According to the minutes of the Audit Committee meetings in the year 2014, the Audit Committee approved the report on the review of implementation of the issues/ observation above, proposed by the internal audit of the Company. The Audit Committee also instructed to monitor and review the practice of the employees continuously in order to comply with the rules and regulations of regulatory agencies and the Securities company’s regulations.

12.2 Head of audit and compliance division The internal audit and compliance division of CGS will audit and oversee various departments involved in the Company’s operations to comply with the laws and the Company’s policy. The audit and compliance division is required to make a report on audit results and practices to the Audit Committee and the Company’s executives. It is also an advisor of the Company regarding related rules and regulations. In the Audit Committee meeting No.12/2013 on 11 December 2013, the Audit Committee approved to appoint Mr. Priyong Teerasathian, the head of audit and compliance division with the opinion that he is qualified to perform such functions effectively. The appointment, removal and transfer the head of internal audit and compliance shall be approved by the Audit Committee, Currently, there are 8 people working under the Company’s internal audit and compliance division.

13. Related transactions

Remarks: - The value of related transaction excluded the value added tax. - * Trading of Derivatives under volumn colume is number of contracts which are not included in total.

Details of Related Transactions between the Company (CGS) and Connected Parties during 2014 Transaction Value (Baht) Connected Parties Mr. Ben Taechaubol Mr. Bee Taechaubol Mr. Sadawut Taechaubol Mrs. Louise Diskul Na Ayudhya Mr. Prasit Srisuwan Ms. Aumpan Pangkum Pol.Lt. Gen. Werapong Chuenpagdee Mr. Kacha Chuenpagdee M.L. Santidis Diskul Mr. Tommy Taechaubol Mrs. Charuwat Vanichsenee Country Group Development Public Company Limited

Nature of Transaction Deposit for customer’s account

Beginning Balance of 1 Jan13 544.71

Ending Balance as of 31 Dec13

Interest Paid

550.60

759,188.14 13,844.10 3,857,168.74 49,982.30 6,710.21 340.93

761,315.81 13,994.11 2,517.76 344.64

50,795.29 614.63 8,057.46 26,622.06

122.88 621.29 13,458.92 60.51 10,076,528.63

Necessity and Reasonableness of Transaction according to the Audit Committee’s opinion

6.93 The stated transaction is for securities business 6,638.52 which is the ordinary operation of CGS, and pricing is in 179.04 line with the market rate. Therefore, this transaction is 95,485.76 necessary and reasonable. 4.33 992.55 5.94 71,866.70 0.74 50,439.27

Transaction Value (Baht) Connected Parties Mutual fund managed by associate

Nature of Transaction Investment-net

Beginning Balance of 1 Jan13 556,063

Increment 99,845,902

Ending Balance as of 31 Dec13

Decrement -

100,401,965

Interest Paid

Necessity and Reasonableness of Transaction according to the Audit Committee’s opinion - Investment is one of the ordinary businesses for CGS.

Transaction Value (Baht) Connected Parties

Nature of Transaction

Country Group Development Public Company Limited

Beginning Balance of 1 Jan13 -

Ending Balance as of 31 Dec13

Interest Paid

76,395,664

Necessity and Reasonableness of Transaction according to the Audit Committee’s opinion

76,395,664

Transaction Value (THB) Connected Parties Mutual fund managed by associate Country Group Development Public Company Limited

Nature of Transaction Investment-net

Beginning Balance of 1 Jan13 100,401,965

Increment 1,001,334

Decrement -

Ending Balance as of 30 June14 101,403,299

76,395,664

2,641,234

79,036,898

Interest Paid -

Necessity and Reasonableness of Transaction according to the Audit Committee’s opinion Investment is one of the ordinary businesses for CGS.

Others Transaction Value (THB) Connected Parties Mr. Ben Taechaubol Mr. Bee Taechaubol Mrs. Louise Diskul Na Ayudhya Ms. Pimporn Vanichsenee

Nature of Transaction Brokerage fees from securities business Interest received Brokerage fees from securities

2013 12,479.59 174,944.02 1,343,181.95 261,934.31 8,124.57

2014

Necessity and Reasonableness of Transaction according to the Audit Committee’s opinion

218,066.51 The stated transaction is for securities 50.59 business which is the ordinary operation of 202,961.17 CGS, and pricing is in line with the market 431.55 rate. Therefore, this transaction is necessary and 670.28 reasonable.

Others Transaction Value (THB) Connected Parties

Nature of Transaction

2013

Mr. Prasit Srisuwan Ms. Benjamas Pangkum Ms. Aumpan Pangkum

Mr. Nikorn Pangkum Mr. Sawai Chuenpagdee Mr. Kacha Chuenpagdee Mr. Kanchit Joonjiraporn EDP Enterprise Company Limited

Sing Sian Yit Pao Company Limited

Brokerage fees from derivatives business Securities business receivables - net Interest received Brokerage fees from securities business

Premises and equipment expenses , THB 341/square meters/month with rental area of 302.66 square meters Other expenses THB 70,000/month for 4-color paper sized 8x2 inches

Necessity and Reasonableness of Transaction according to the Audit Committeeâ&#x20AC;&#x2122;s opinion

2014

392,551.46

83,733.36 2,653,907.27 18,530.00

4,464.06 5,001.12 -

3,163,657.86 555,297.41 16,419.10 1,688.59 9,083.82 1,379.23 1,210,337.34

1,043,250.00

Accrued expenses

48,150.00

7,505.41 48,518.90 284.87 619,242.36 Warehouse rental expense is for ordinary operation of CGS and pricing is in line with the market rate. Therefore, this transaction is necessary and reasonable. 540,350 Advertising expenses is for the ordinary operation of CGS and pricing is in line with the market rate. Therefore, this transaction is necessary and reasonable. 101,650 Accrued advertising expenses are for ordinary business of CGS and pricing is in line with the market rate. Therefore, this transaction is

Others Transaction Value (THB) Connected Parties

Nature of Transaction

2013

2014

Necessity and Reasonableness of Transaction according to the Audit Committeeâ&#x20AC;&#x2122;s opinion

necessary and reasonable. MFC Asset Management Public Brokerage fees from securities 70,976,457.06 14,946,972.47 The stated transaction is for securities Company Limited business business which is the ordinary operation of Brokerage fees from selling agent 343,334.42 138,460.67 CGS, and pricing is in line with the market rate. Therefore, this transaction is necessary and business reasonable. Fees and services income 284,916.54 114,595.94 Fees from the investment advisory services, the ordinary business of CGS, are in line with the market rate. Therefore, this transaction is necessary and reasonable. The audit committee has the opinion that all aforementioned transactions have pricing policies and conditions in line with the ordinary business, necessity, appropriate, and reasonable. Moreover, accuracy and completion of information disclosure related to these transactions is complied with the SETâ&#x20AC;&#x2122;s regulations

The Audit Committee Report The Audit Committee consists of three independent directors (1) Pol. Gen. Somchai Vanichsenee as the chairperson of the committee, (2) Mr. Dej Namsirikul, and (3) Mr. Charn Tulyaphistchai as an audit committee members. Mr. Dej Namsirikul and Mr. Charn Tulyaphistchai have adequate knowledge and experience to audit a reliability of Financial Statement and Mr. Priyong Teerasathian, Vice Managing Director of audit and compliance division, acts as the secretary of audit committee. In addition, the three audit committee members are not an advisor, executive committee or employees or staff of the Company and those have full qualifications as required by the SEC. The Audit Committee performed their duties independently as enacted by the Charter of Audit Committee and was coordinated by all related parties. The Audit Committee also gave the importance of internal control system, risk management and good corporate governance to ensure that the Company will provide good internal control and appropriate and acceptable risk management including accurate and reliable financial reports. In 2014, the Audit Committee held 12 meetings. The following are the scope of work of the Committee: 1) Reviewing the work performed by the audit and compliance division, approving the annual audit plan, audit reports, and follow-ups, as well as evaluating and making recommendations to improve the efficiency of the internal audit and compliance functions. 2) Reviewing the good corporate governance policy and encouraging the Company to have good corporate governance and management which can be audited, and disclosing adequate and transparent information to build confidence to investors, regulators and stakeholders, etc. The Audit Committee was of the opinion that the Company had adequate and appropriate good corporate governance and encouraged its stakeholders to join and achieve mutual benefits. 3) Jointly reviewing the appropriation of internal control system with the internal and external auditors and evaluating that the Companyâ&#x20AC;&#x2122;s internal control and risk management were appropriate and sufficient to the changing situation. 4) Reviewing the Companyâ&#x20AC;&#x2122;s operations to ensure compliance with the regulations of the SEC, SET, TFEX and other relevant laws of the Companyâ&#x20AC;&#x2122;s business. 5) Reviewing and approving the quarterly and annual financial statements with internal and external auditors before presenting to the Board of Directors. The Committee agreed with the external auditors that the financial statements of the year 2014 were prepared in accordance with the Generally Accepted Accounting Standards by making recommendations without conditions and accurately and completely disclosing significant transactions in the notes accompanying the financial statements. 6) Proposing to the Board of Directors to appoint Mr.Chavala Theinprasertkit and/or Mr.Permsak Wongpatpagorn and /or Mr.Niti Jungnitnirundr and/or Ms. Nisagorn Songnamee of Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. to act as the auditors of the Company for the year 2014. In addition, the

Committee had considered the remuneration for the auditing service to be approved in the Shareholdersâ&#x20AC;&#x2122; Meeting. 7) Attending meetings, discussing and exchanging opinions with the management of the Company and the external auditors to acknowledge remarks and exchange ideas. 8) Consider the disclosure of connected transactions and conflict of interest. In 2014, the Audit Committee was of the opinion that the directors and management of the Company strictly observed good corporate governance in carrying out their duties, and that the Company had adequate and appropriate internal control system and risk management covering the management and staff levels for business operation. The Committee was also of the opinion that the management was determined to administer the organization under the prescribed code of ethics, oversee operations in compliance with the laws and regulations consistently, present the audit report of the audit and compliance division to the Audit Committee directly, and monitor corrective actions periodically to ensure that they comply with recommendations. In addition, Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. The current auditor of the Company, reported that no important error was found. The operations were performed according to the specified procedures with the efficient internal control system. In the Board meeting No.1/2018 on 19 January 2015, the Board considered sufficiency of the internal control system approved by the Audit Committee based on the information, reports and explanations given by the management in five major areas, i.e., the organization and operating environment, risk management, management operational control, information and communication system and monitoring system. The Board was of the opinion that the Company had in place an appropriate and sufficient internal control system in the areas concerned.

(Pol. Gen. Somchai Vanichsenee) Chairperson of the Audit Committee 25 February 2015

14. Financial Status and Performance Financial Statement 14.1 Auditor 2014

Mr. Chavala Tienpasertkij, CPA Number 4301 Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd.

14.2 Summary of Auditor opinion in the past three years 2014 Unqualified opinion with an emphasis of matters 2013 Unqualified opinion with an emphasis of matters 2012 Unqualified opinion with an emphasis of matters

14.3 Auditor 's Remuneration 1. Audit Fee In 2014, the Company was approved from the general meeting of shareholders 2014 to pay Baht 2.45 million for audit fee. 2. Non Audit Fee - None -

The Companyâ&#x20AC;&#x2122;s financial statment

Key Financial Ratios Financial Statements in which Equity method is applied For the years ended December 31 2014

Profitability Ratio Gross profit (%) Net profit (loss) (%) Return on equity (%) Return on investment (%) Efficiency Ratio Return on asset (%) Asset Turnover (times) Financial Ratio Liquid assets to borrowing (times) Earning assets to borrowing (times) Liquid assets to total asset ratio (%) Earning assets to total asset ratio (%) (%) Debts to equity (times) Dividend payout (%) Other Ratios Securities investment to total assets (%) Net capital ratio (NCR) (%) Per Share Net Profit (loss) ** (Baht) Dividends (Baht) Book Value (Baht) Growth Rate Total assets (%) Total liabilities (%) Securities business income (%) Operating expense (%) Net profit (loss) (%)

2013

2012 (Restated)

90.24 24.05 11.21 14.33

89.32 16.67 10.69 23.73

89.37 16.12 8.53 19.44

7.33 0.30

6.75 0.41

5.55 0.34

* * 39.94 79.10 0.65 60.06

* * 37.70 67.55 0.41 82.62

4.31 11.12 26.73 68.97 0.78 107.13

29.43 88.00

17.34 242.05

12.38 106.20

0.149 0.092 1.35

0.138 0.11 1.30

0.112 0.1233333333 1.32

21.26 65.59 (33.87) (29.32) 11.64

(13.11) (42.66) 27.06 19.92 32.42

39.64 170.09 4.40 1.27 2.33***

STATEMENT OF FINANCIAL POSITION Unit: Baht As at December 31, 2012 Deferred tax assets Balance before change in accounting policy Increase of deferred tax assets Balance after change in accounting policy

141,456,906 141,456,906

Other component of ownersâ&#x20AC;&#x2122; equity Balance before change in accounting policy Decrease of deferred tax assets Balance after change in accounting policy

4,420,527 (708,036) 3,712,491

Retained earnings - Unappropriated Balance before change in accounting policy Increase of deferred tax assets Increase of deferred tax assets of associated company Balance after change in accounting policy

418,018,865 141,451,131 1,005,923 560,475,919

STATEMENT OF COMPREHENSIVE INCOME Unit: Baht

For the year ended December 31, 2012 Income tax Income tax before change in accounting policy Increase of income tax Income tax after change in accounting policy

15,003,795 52,322,707 67,326,502

Income tax relating to components of other comprehensive income (loss) Income tax relating to components of other comprehensive income (loss) before change in accounting policy Increase of income tax relating to components of other comprehensive income (loss) Income tax relating to components of other comprehensive income (loss) after change in accounting policy

3,230,654

Net income Net income before change in accounting policy Decrease of net income Net income after change in accounting policy

312,318,441 (51,929,865) 260,388,576

Basic Earnings Per Share (â&#x20AC;&#x153;EPSâ&#x20AC;?) Basic EPS before change in accounting policy Decrease of basic EPS Basic EPS after change in accounting policy

0.134 (0.022) 0.112

* Not applicable as there were no borrowings ** Weighted average method was utilized *** Net income for the year ended December 31, 2011 to calculate growth rate of net income for the year 2012 has not been restated to conform to the new accounting policy.

15. Management Discussion and Analysis Country Group Securities PCL. had the operating result in which the equity method is applied for the year ended December 31, 2014, which has net income of Baht 384.95 million, increased by Baht 40.14 million or 11.64% compared with a net income of Baht 344.81 million in the same period last year and recorded the retained earnings as at December 31, 2014 of Baht 764.74 million with the following details: Total revenues for the year ended December 31, 2014 of Baht 1,600.37 million, increased by Baht 468.47 million or 22.64 % compared with Baht 2,068.84 million in the same period last year, with the following details:

Securities Business Revenues Brokerage fees Fees and services income Gain on investments Gain on derivatives Interest and dividends Interest on margin loans Total Securities Business Revenues

For the years ended December 31, 2014

2013

2012

1,024,704,552

1,695,680,086

1,269,677,471

61,716,999

39,588,808

18,776,393

99,042,759

66,150,446

80,900,069

3,162,726

19,723,499

20,810,298

68,289,745

90,959,489

85,101,807

45,069,986

56,604,590

74,110,923

1,301,986,767

1,968,706,918

1,549,376,961

1.Total securities business revenue was Baht 1,301.99 million decreased by Baht 666.72 million or 33.87 % compared with Baht 1,968.71 million in the same period last year. The decrease mostly resulted from: 1.1 Brokerage fees of Baht 1,024.70 million, decreased by Baht 670.98 million or 39.57% compared with Baht 1,695.68 million in the same period last year, This resulted from a decrease in securities customerâ&#x20AC;&#x2122;s trading volume, in line with the decrease in SETâ&#x20AC;&#x2122;s trading volume and also the resignation of chief executive and marketing staff. 1.2 Fees and services income of Baht 61.72 million, increased by Baht 22.13 million or 55.90%

compared with Baht 39.59 million in the same period last year mainly due to an increase in income from underwriting fees of Baht 8.55 million and financial advisory fees and other fees of Baht 14.24 million. Meanwhile, investments advisory decreased by Baht 0.66 million. 1.3 Gain on investments and derivatives of Baht 102.20 million, increased by Baht 16.33 million or 19.02% compared with Baht 85.87 million in the same period last year. This was due to an increase in gain on sale of securities of Baht 22.43 million, an increase in gain on re-measuring

100

trading investments of Baht 10.46 million. Meanwhile, a gain from derivatives trading decreased by Baht 16.56 million. 1.4 Interest and dividends income of Baht 68.29 million, decreased by Baht 22.67 million or 24.92% compared with Baht 90.96 million in the same period last year. This mainly resulted from a decrease in interest income from money deposited in financial institutions of Baht 35.40 million due to lower average market interest rate. While dividends increased by Baht 10.15 million 1.5 Interest on margin loans of Baht 45.07 million, decreased by Baht 11.53 million or 20.37% compared with Baht 56.60 million in the same period last year following lower average margin loans. 2. Share of profit from investment for using equity method of Baht 60.41 million, decreased by Baht 26.01 million or 30.10% compared with Baht 86.42 million in the same period last year. 3. Other income of Baht 237.98 million, increased by Baht 224.27 million or 1,635.81 % compared with Baht 13.71 million in the same period last year mainly due to The company recorded a reversal of investment impairments in the associated company of Baht 205.59 million because the associated company’s fair value was higher than book value and the employer’s contribution and its benefit of provident fund members who were not entitled due to resignation of Chief Executive Officer and marketing staff. TOTAL EXPENSES for year ended 31 December 2014 , the Company had total expenses Baht 1,135.68 million, decreased by Baht 513.44 million or 31.13 % compared with Baht 1,649.12 million in the same period last year, which mainly resulted from 1. Finance costs of Baht 21.08 million, decreased by Baht 32.50 million or 60.66% compared with Baht 53.58 million in the same period last year due to a decrease in interest expenses for customer’s collateral following a lower average deposit interest rates and a drop in bill of exchange interest expenses and loans from financial institutions following lower debentures and other borrowing. 2. Fee and service expenses of Baht 105.94 million, decreased by Baht 50.67 million or 32.35% compared with Baht 156.61 million in the same period last year which varied in line with the decrease in securities and derivatives trading volume.

101

3. Operating expenses of Baht 1,005.79 million, decreased by Baht 417.20 million or 29.32 % compared with Baht 1,422.99 million in the same period last year due mainly to a decrease in personnel expenses which varied according to the decrease in securities and derivatives trading volume i.e. marketing incentives and profit sharing from branches/marketing team management, etc. Furthermore, the operating expenses decreased due to the decrease of branches and the resignation of chief executive and marketing staff which decrease the operating expenses i.e. salary, bonus and property, premises and equipment expenses etc. 4. Bad debt and doubtful accounts was Baht 2.87 million. Mainly due to the company’s existing debtors’ collateral value has decreased. SUMMARY OF NET PROFIT From the consolidated financial statement for year ended 31 December 2014, the Company had net profit of Baht 384.95 million (net profit Baht 0.149 per share) increased by Baht 40.14 million or 11.64 percent compare with the same period last year which was Baht 344.81 million (net profit Baht 0.138 per share). Furthermore, the Company s net profit ratio was 24.05 percent which improved from last year with net profit ratio of 16.67 percent. Total expenses for the year 2014 was decreased by Baht 513.44 million or 31.13 percent whereas total revenues was decreased by Baht 468.47 million or 22.64 percent. As the result of net profit increased, return on equity ratio was 11.21 percent compared with the previous year which was 10.69 percent.

15.1 Asset Management Asset As of 31 December 2014, total assets of the Company were Baht 5,757.79 million, increased by Baht 1,009.68 million or 21.26 percent from last year which was Baht 4,748.11 million. The Company’s total asset consist of cash and cash equivalents were 19.88 percent, Deposits at financial institutions was 4.68 percent, Net securities and derivatives business receivables were 40.02 percent, Net investment was 16.94 percent, Net investment in associated company was 9.49 percent, Net property, premises and equipment were 2.64 percent and the remaining of 6.35 percent were Receivables from Clearing House, net intangible assets, deferred tax assets, and other assets. The changes in assets can be summarized as follows: 1. Cash and cash equivalents and Deposits at financial institutions as of 31 December 2014 were Baht 1,413.95 million, decreased by Baht 228.45 million or 13.91 percent compared with Baht 1,642.40 million in the previous year. Most of Cash and cash equivalents and deposits at

102

financial institutions were in form of cash, short-term deposits, fixed deposit and certificate of deposit, which convenience to utilize as working capital for daily operations. 2. Receivables from Clearing House as of 31 December 2014 was Baht 32.19 million decreased by Baht 410.75 million or 92.73 percent compared with the previous year which was Baht 442.94 million. Receivables from Clearing House had direct relationship with trading value of clients and the Company’s account during the three last trading days before the end of year. 3. Net securities and derivatives business receivable as of 31 December 2014 were 2,304.22 million, increased by Baht 773.20 million or 50 percent compared with Baht 1,531.02 million last year. Net securities and derivatives business receivable were increased, mainly due to an increase in receivable of Customers’ cash accounts was Baht 739.89 million. Net securities and derivatives business receivable had direct relationship with trading value of the last 3 days before the end of year. In relation to the Company’s policy on allowance for doubtful accounts, the Company has provided an allowance based on a review of debtor’s repayment capability, taking into consideration risk in recovery and value of collateral. Additionally, the Company has conservatively set the allowance for doubtful accounts based on a high of degree of uncertainty that principal and interest will be received and the doubtful debts are not fully covered by collateral. The allowance for doubtful accounts is classified by SEC’s notifications No. Gor Thor.33/2543 and Kor Thor. 5/2544 dated August 25, 2000 and February 15, 2001, respectively. The details of the allowance for doubtful of the Company’s subsidiary as at 31 December 2014 are as follows: Period of overdue

Number

Debts Amount (Million Baht)

Collateral (Million Baht)

Net Debts (Million Baht)

Allowance for doubtful (Million Baht)

Result of collection

Cash accounts 1- 3 months > 3 < = 6 months > 6 < = 12 months > 12 < = 24 months More than 24 months

1 38

0.06 13.54

Sub-Total

13.60

103

under follow-up 26 accounts are under follow up and 12 accounts are under litigations process

Period of overdue Other receivables 1- 3 months > 3 < = 6 months > 6 < = 12 months > 12 < = 24 months More than 24 months Sub-Total Total

Number

2 9 11 50

Debts Amount (Million Baht)

Collateral (Million Baht)

Net Debts (Million Baht)

Allowance for doubtful (Million Baht)

0.73 383.65 384.38 397.98

42.15 42.15 42.15

0.73 341.50 342.23 355.83

Result of collection

under follow-up

under litigations process

4. Net investment as at 31 December 2014 was Baht 975.61 million, increased by Baht 738.16 million or 310.87 percent compared with Baht 237.45 last year. Net investment was increased because the Company invested more in deb instrument of Baht 683.15 million and available for sale listed securities of Baht 130.08 million. In contrast the Company invested less in bill of exchange of Baht 76.40 million which consisted of 70.64 percent of trading investments, 27.26 percent of available for sale investment, and 2.10 percent of general investment. Most of investments are in form of listed securities and unit trust that in need of the market. The Company has set up investment committee to monitor and establish guidelines for equity securities investment of the Company account. Also The Company has realized the allowance for diminution in value of investments and allowance for impairment according to accounting standard and announcement of SEC. 5. Net property, premise and equipment, and intangible asset amounted to Baht 250.49 million as at 31 December 2014, decreased by Baht 32.71 million or 11.55 percent compared with Baht 283.20 million in the previous year. Net property, premise and equipment, and intangible asset were decreased due to sale of many branches and branchesâ&#x20AC;&#x2122; assets to other securities firms. Liabilities As at 31 December 2014, the Company had total liabilities of Baht 2,269.39 million, increased by Baht 898.89 million or 65.59 percent compared with the previous which was Baht 1,370.50 million. Total liabilities were increased mainly due to an increase in securities business payable of Baht 716.51 million and increased in Payables to Clearing House of Baht 162.58 million as the result of securities trading value during the last 3 days before the end of year.

104

Owner’s equity As at 31 December 2014, the owner’s equity of Baht 3,488.39 million, increased by Baht 110.79 million or 3.28 percent compared with the previous year which was Baht 3,377.60 million, mainly due to dividend payment in form of cash, amounted of Baht 284.83 Million. Moreover, the Company had an increase in retained earnings of Baht 384.95 million as at 31 December 2014. Liquidity and Sources of Funds of the Company and its subsidiary Sources of funds of the Company and its subsidiary are mainly from self-financed and credit line with commercial bank to support working capital of the Company and its subsidiary. The Company’s net liquid capital ratio (NCR) was 88.00 percent as at 31 December 2014. This NCR is considered high compared to the minimum NCR required by the SEC at 7 percent. Net liquid capital ratios (NCR) of the Company can be summarized as follows: As at December 31 2014 2013 2012 Country Group Securities PCL - Net liquid capital (Million Baht) - Liabilities and collateral (Million Baht) - Net liquid capital ratio (NCR)

1,918.86 2,180.57 88.00%

2,970.28 1,227.14 242.05%

2,190.97 2,063.10 106.20%

Liquidity As of 31 December 2014, the Cash Flow Statement of the Company and its assocaited exhibited that net cash flow from operating activities was Baht 340.34 million as the result of an increase in receivables from and payable to Clearing house, amounted Baht 573.33 million, and increase in deposits at financial institutions, amounted Baht 300.00 million and a decrease in cash account paid for trading investments – net from cash received from the sale of trading investments, amounted baht 602.28 million. As of 31 December 2014, net cash flows used in investing activities was Baht 16.50 million, as a result of net cash received from investment and dividend from investment in securities, amounted Baht 37.85 million whereas the Company and its subsidiary had net cash paid for premise and equipment, and intangible asset, amounted Baht 21.34 million.

105

Net cash flows used in financing activities was Baht 285.31 million as of 31 December 31 2014. Main transaction in financing activities was cash paid for dividend payment 2013, amounted of Baht 284.83 million. Overall, the Company has a strong financial status and high liquidity with NCR at 88.00 percent (as of 31 December 2014) which was relatively high compare to 7 percent NCR requirement setting by the SEC. Furthermore, the Company had cash and cash equivalent equal to Baht 1,144.61 million (19.88 percent of total asset), a high liquid assets to total asset ratio equal to 39.94 percent, an income generating asset to total asset ratio equal to 79.10 and debts to equity ratio equal to 0.65. As of 31 December 2014, total shareholdersâ&#x20AC;&#x2122; equity was Baht 3,488.39 million and unallocated retained earnings were Baht 689.34 million. As a result, return on equity ratio increased from 10.69 percent in 2013 to 11.21 percent in 2014.

106

Details of the Board of Directors, Management, Internal Audit and Compliance , and Corporate Secretary 1.1 Details of the Board of Directors, Management, Internal Audit and Compliance and Corporate Secretary Name / Position Prof. Prayoon Chindapradist - Chairperson (Authorized Director)

Mr. Dej Namsirikul - Independent Director - Audit Committee Member - Vice Chairperson

Age (Year) 86

Education

- Higher Diploma in Accountancy (Equivalent to Master’s Degree), Thammasat University - Bachelor of Law/ Thammasat University Trainning - Director Accreditation Program - High School Diploma, Assumption Bangrak

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2006 - Present 2004 - Present 1993 – Present

2013 – present 2006 – present

2553 – present 2537 – present 1987 - 2001

107

Position Chairperson Chairperson of Audit Committee Chairperson of the University Activities Committee

Independent Director Good Governance committee Independent Director Audit Committee Member Vice Chairperson Chairperson Chairperson Advisor to the board

Company/Business Country Group Securities PCL. Asian Insulators Plc. Burapha University

Country Group Holdings PCL Country Group Securities PCL.

Union Pattaya Properties Co.,Ltd. Union Power Properties Co.,Ltd. Bangkok Bank Plc.

Name / Position General Wattana Sanphanich - Independent Director - Vice Chairperson

Age (Year) 77

Education

- Higher Diploma in Public Law and Management, King Prajadhipokâ&#x20AC;&#x2122;s institute - Master of Political Science, Ramkhamhaeng University - Bachelor of Law Ramkhamhaeng University - National Defense College - Bachelor of Social Science, Chulachomklao Royal Military Academy

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2006 - Present

2006 - Present 1991- 2006 2003 - 2005 2000 - 2006 2000 - 2006 2000 - 2006 1995 - 1999 1991 - 2000 1998 - 1999 1995 - 1999 1991 - 1993

Trainning - Director Accreditation Program

108

Position Independent Director and Vice Chairperson Vice Chairperson Independent Director Vice Chairperson Senator (Karnchanaburi Province) Vice Chairman of Military Committee Vice Chairman of Committee for Independent Organizations Senator and Committee of transportation Senator Judge/ Military Supreme Court Inspector General Deputy supreme commander

Company/Business Country Group Securities Plc. Phuket Fantasy Safari World Plc. Apex Securities Co., Ltd Parliament Parliament Parliament Parliament Parliament Royal Thai Army Ministry of Defense The supreme Command Headquarter

Name / Position Pol. Gen. Somchai Vanichsenee - Independent Director - Chairperson of the Audit Committee

Mr. Charn Tulyaphisitchai - Independent Director - Audit Committee Member

Age (Year) 72

Education

- Master of Public Administration, Chulalongkorn University - Bachelor of Public Administration, Police Cadet Academy Trainning - Director Accreditation Program - Director Certification Program - Audit Committee Program - Finance for Non â&#x20AC;&#x201C; Finance Director - High School Diploma, Assumption Sriracha and Saint Dominic School - Honorable Doctorate Degree, University of America

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2006 - present

2005 - 2006 2006 - present 2003 - 2005 2003 - 2003 2000 - 2002

2008 - present 2008 - 2008 2004 - present 1985 - 1988 1981 - 1985

109

Position Independent Director and Chairperson of Audit Committee Independent director and Audit Committee Independent Director and Audit Committee Director Director Deputy Commissioner-General

Company/Business Country Group Securities PCL.

Independent Director and Audit Committee Director Chairperson Manager Manager

Country Group Securities PCL

Phuket Fantasy Apex Securities Co., Ltd. Country Group Securities PCL. Royal Thai Police

CK Diamond Co., Ltd. Rajah Palace Hotel Sinchaloen Investment Co., Ltd

Name / Position Mr. Sadawut Taechaubol - Director - Executive Chairperson (Authorized Director)

Age (Year) 62

Education

- Honorable Degree (Business Administration), Kensington University, California, USA - Diploma (Commerce), Davis School, Brighton, UK - BA (Political Science), Ramkhamhaeng University

Stakes (%)

Family Relationship Father of Mr. Tommy Taechaubol

Trainning - Director Accreditation Program - Capital Market Academy Class 12

Work Experience in the past 5 years

2012 - present 2009 - present 1987 - present 2010 - present

Position Chairperson Executive Director Executive Chairperson Chief Executive Officer and President Chief Executive Officer and Acting President Director and Executive Chairperson Director and Executive Director Chairperson President

2010 - present 2010 – present 2006 – present 2006 – present 2005 - present 2004 - 2013 Past

Chairperson Vice Chairperson Director Director Director Director President

Period 2013 - present 2009 - present 2007 – present 2006 - 2007

Vice Chairperson Consultant to Minister of Commerce (Mr. Utai Pimjaichon) Consultant to Minister of Interior (General Chavalit Yongchaiyudh) Consultant to Minister of Finance (Mr.Chaiyos Sasomsub) Consultant to Minister of Interior (Mr. Kiatichai Chaichaowarat) Honorary Consultant to Minister of Prime Minister’s office (Mr. Swat Khumprakob) Committee

110

Company/Business Country Group Holdings PCL China Trade Promotion Association Country Group Securities PCL

MFC Asset Management PCL Country Group Co., Ltd Thai Chamber of Commerce and Industry Sing Sian Yit Pao., Ltd Country Group Development PCL Profit Venture Co., Ltd Taechaubol Farm Co., Ltd Bangkok Development Co., Ltd Landmark Group Co., Ltd Public Warehouse Organization/ Ministry of Commerce Thai Commerce Association Ministry of Commerce Ministry of Interior Ministry of Finance Ministry of Interior Prime Minister’s office AFET Committee

Name / Position Mr. Surabhon Kwunchaithunya - Director - Vice Executive Chairperson (Authorized Director)

Mr. Sim Hong Chye - Director

Age (Year) 63

Education

- MBA (Finance), University of Washington - BSIE, University of Washington, U.S.A., Scholarship Student - BSEE, University of Washington, U.S.A. Training - Director Accreditation Program - Director Certification Program - Capital Market Academy Class 11 - Securitization, Fannie Mae of U.S.A. - Finance and Banking, HSBC, Hong Kong - High School Diploma, St. Joseph Institution, Singapore

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2013 - present 2011 - present

2006 – present 2003 - present 2012 - present 2010 – 2012 2010 – 2012 2010 – 2012

111

Position Vice Chairperson Director, Executive Director, and Corporate governance committee Director and Vice Executive Chairperson Chairperson of Audit Committee Director

2010 - 2012 2004 - 2010 1997 - 2002

Director Discipline subcommittee Chairperson of Risk Management subcommittee Director Chairperson of Audit Committee Managing Director

2007- present 2000 - present 1999 - present

Director Chairman Chairman

Company/Business Country Group Holdings PCL MFC Asset Management PCL Country Group Securities PCL Tycoons Worldwide Group Plc. Thai Chamber of Commerce and Industry Stock Exchange of Thailand Stock Exchange of Thailand Stock Exchange of Thailand Thailand Futures Exchange PCL (TFEX) Prinsiri PCL Secondary Mortgage Corporation (Government owned corporation/ Ministry of F inance) Country Group Securities PCL Penrose International Co., Ltd. Thai Real-Venture Co., Ltd.

Name / Position Mr. Litti Kewkacha Director

Age (Year) 32

Education

- Master of Science in Management and Regulation of Risk, The London School of Economics and Political Science, London, UK - Bachelor of Engineering in Information Systems (Honors), Imperial College of Science, Technology and Medicine, London, UK

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2007 – present 2009 - present 2008 - present 2006 – present

Trainning - Director Accreditation Program - Director Certification Program - Audit Committee Program - Finance for Non – Finance Director - Director Diploma Examination, The Australian Institute of Directors Association, Australia

112

Position Director Vice MD/ Marketing Director Managing Director

Company/Business Country Group Securities PCL Safari World Co.,Ltd Phuket Fantasy Co., Ltd Kacha Brothers Co., Ltd

Name / Position Mr. Somkad Sueptrakul - Director

Age (Year) 62

Education

- MPA, Public Administration (Public Policy and Strategic Management), NIDA - Bachelor of Law, Ramkhamhaeng University - Advanced Certificate Course in Politics and Governance in Democratic Systems for Executives - Advanced Certificate Course in Administrative Justice for Executives , Administrative Court - Advanced Certificate Course in Urban management for Executives, Urban Green development Institute

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2013 – present

2008 – present 2009 - present 2010 - present

Director Chairperson of Investment Committee Vice Chairperson Chairperson of Audit Committee Director Chairperson of Investment Committee Director

2002 – present 2002 – 2003

Legal Consultant Consultant

2001 – 2001

Judicial Selection Commission of the Constitutional Court Consultant to the member of budget committee of senator Consultant to the Chairperson of the Executive Committee of Telephone Organization of Thailand Secretary of Bangkok Governor (Dr. Pichit Rattakul) Academician - Expertise and consultant to committee of justice and human rights

2013 – present

2000 – 2006 1998 – 1999

Training - Democratic Politics and Governance for High-Level Administrators, King Prajadhipok’s institute (Class 10) - Director Accreditation Program - Director Certification Program

1996 – 2000 1992 - 1996

113

Position

Company/Business Country Group Holdings PCL Electronics Industry PCL Country Group Securities PCL Thai Rubber Latex Corporation (Thailand) PCL Areeya Properties Plc. President of House of Representatives (General Manookrit Roopkachachorn) Parliament Parliament Telephone Organization of Thailand (Mr. Mechai Viravaidya) Bangkok Parliament

Name / Position Pol. Lt. Gen Werapong Chuenpagdee  Director

Age (Year) 56

Education

- GSPA, NIDA

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2013 – present 2013 - present 2011 – present 2010 - present

- Master of Public Administration, Chulalongkorn University - Bachelor of Public Administration, Royal Police Cadet Academy

2011 - present 2010 - present present present

Training - Director Accreditation Program - Director Certification Program - Audit Committee Program - Financial Statements for Directors - Role of the Compensation Committee

2006 – 2011 2009 – 2010 2008 – 2009 2008 - 2008 2007 - 2008

114

Position Independent Director Independent director Director Independent Director and Chairperson of the Audit Comittee Deputy Commissioner of Police Region1 Independent Director Director Director Consultant Deputy Commissioner/ Office of Budget and Finance Deputy Commissioner Commander/provincial police- Saraburi province Commander/provincial police, Nakhonnayok province

Company/Business Country Group Holdings PCL Country Group Securities PCL Sing Sian Yit Pao Co.,Ltd Royal Thai Police Country Group development PCL Thai Hua Co., Ltd Fusin Mining Industry (Thailand) Co., Ltd. Country Group Securities PCL Royal Thai Police Royal Thai Police Royal Thai Police Royal Thai Police

Name / Position

Age (Year)

Education

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period

Mr. Niphon Wisityuthasart  Director

- GSPA/NIDA - Bachelor of Law/ Thammasat University

2014 – Present

Position Independent Director

Company/Business Country Group Holdings PCL

Chairman of Audit Committee Member of the Nomination and Remuneration Committee

Training - Top Management Course/Capital Market Acade my Class 12 - Advanced Certificate Course in Public relation for Executives class 2 - Advanced Certificate Course in Urban development class for Executives class 3 - Certificate in Asian Disaster Preparedness Center (ADPC) - Director Accreditation Program

115

2011 – Present 2010 – Present

Director

Country Group Securities PCL

Independent Director, Audit Committee, and Chairman of Nomination and Remuneration Committee

Grand Canal Land PCL

1999 – Present

Independent Director and Chairman of Audit Committee

Vanachai Group PLC

Name / Position Ms. Sudthida Chirapatsakul - Director - Executive Director - CEO (Manager) (Authorized Director)

Mr.Tommy Taechaubol -Director (Authorized Director)

Age (Year) 61

Education

- Master degree, Krirk University - Bachelor degree, Kasetsart University

Stakes (%)

Family Relationship Period 2013- present

Training - Director Accreditation Program

- Master of Business Administration (Honor) Sasin Graduate Institute of Business Administration , Chulalongkorn University - Bachelor of Law, University of New South Wales - Bachelor of Commerce Finance Major (Honor)

Work Experience in the past 5 years

Son of Mr.Sadawut Taechaubol

2010 - present 2009 – 2013 2009 – 2013 2007 – 2009 2005 – 2007 2004 - 2005 2012 - present 2012 - present 2010 - present 2013 - present 2012 - 2013 2011 - 2012

Training - Director Accreditation Program - Real estate development Class 40

116

Position CEO (Manager) Executive Director Director President Managing Director Managing Director Managing Director President Director and CEO Director Executive Chairperson Advisor to the Executive Committee Senior Vice Managing Director /Business Development Vice Managing Director /Business Development

Company/Business Country Group Securities PCL

Fast East Securities Co., Ltd. United Securities PCL Apex Securities Co., Ltd Country Group Holdings PCL Country Group Securities PCL Sing Sian Yit Pao., Ltd MFC Asset Management PCL

Name / Position Mr. Chanachai Junjiraporn - Director - Executive Director - CEO (Manager)

Age (Year) 49

Mr. Chupong Tanasettakorn Managing Director IB Division

Mr.Pitsanu Vichicholchai Managing Director, Retail Brokerage Division

Education

- Master of Business Administration for Executives, Ramkhamhaeng University - Master of Political Science, Ramkhamhaeng University - Bachelor of Finance, Dhurakij Pundit University Trainning - Director Accreditation Program - Director Certification Program - MBA University of Detroit, USA - Bachelor of Science, Chulalongkorn University

- Bachelor of Economics, West Virginia University, U.S.A. - Master of Economics ,University of Central Missouri, U.S.A.

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2013 - present 2013 - present 2013 - 2013 2012 - present 2012 - present 2011 - 2012

Position Director CEO President Executive Director Managing Director/Retail Brokerage Vice Managing Director CEO Executive Director

Company/Business Country Group Securities PCL

Seamico Securities PLC Globlex Securities Co., Ltd Finansia Syrus Securities PCL

2007 – present 2007 – 2007 2006 – 2007 1999 - 2000

Managing Director Managing Director Deputy Managing Director Director

Country Group Securities PCL KTB Securities Co., Ltd. Seamico Securities Plc. Philip Securities (Thailand) Plc.

2014 – present 2014 – present Present 2009 - 2013

Director Assistant Manager /Retail brokerage 4 Director CEO

MFC Asset Management PCL Country Group Securities PCL Government Saving Bank Globlex Securities Co., Ltd

117

Name / Position Ms. Netchanok Anawan - Head and Vice Managing Director, Accounting and Finance Division

Natnicha Kasemvudhi Secretary of the Company

Age (Year) 44

Education

- M.S. in Accounting, Thammasat University - BA in Accounting, Thammasat University

Stakes (%)

Family Relationship

Work Experience in the past 5 years Period 2011 - present

2010 – 2011 2010 – 2010 2007 – 2010

- Bachelor of Law, Chulalongkorn University

2006 - 2007 2014 – present 2013 - present 2011 - 2013

Trainning -Fundamental Practice for Corporate Secretary ; FPCS class 30, Thai Listed Company Association, SET

118

Position Head and Vice Managing Director of Accounting and Finance Acting Head and Senior Vice President of Accounting and Finance Senior Vice President Vice President/ Account and Finance Assistant Vice President Vice President/ Strategy and Budget Secretary of the Company Assitant manager/Law department Legal Officer

Company/Business Country Group Securities PCL

Country Group Securities PCL Double A. (1991) Ltd.

1.2

Duties and Responsibilities of the Company’s Secretary 1. Advise the Board of directors on the Securities company’s laws, rules and regulations and ensure the directors will follow the company’s laws, rules and regulations. 2. Encourage the board of directors to have knowledge and understanding of corporate governance and follow practices. 3. Prepare agenda and notice of the shareholders and board of directors meetings. 4. Arrange the shareholders and board of directors meetings in compliance with the Securities company’s laws, rules and regulations and good practices. 5. Take minutes of the shareholders and board of directors meetings and ensure related parties will follow resolutions of the shareholders and board of directors meetings. 6. Prepare and maintain the board of directors’ registration, annual reports, notice of the shareholders and board of directors meetings, minutes of the shareholders and Board of Directors meetings. 7. Monitor the directors and management to make reports on their stakeholders including related person’s stakeholders as specified by the law. 8. Maintain the stakeholder reports reported by the directors or management as specified by laws. 9. Prepare the disclosure of related information and information reports to the regulations. 10. Coordinate with shareholders and the regulators. 11. Other duties assigned by the board of directors.

119

Details of the Board of Directors, Management and Internal Audit and Compliance of the Securities company The Securities company The Company Mr. Prayoon Chindapradist, Prof X Mr. Dej Namsirikul / / General Wattana Sanphanich / Pol. Gen. Somchai Vanichsenee / Mr. Charn Tulyaphisitchai / Mr. Sadawut Taechaubol // X Mr. Surabhon Kwunchaithunya // / Mr. Sim Hong Chye / Mr. Litti Kewkacha / Mr. Somkad Sueptrakul / / Pol.Lt.Gen.Werapong Chuenpagdee / / Mr. Nipon Wisityuthasart / / Ms. Sudthida Chirapatsakul // Mr. Tommy Taechaubol / // Mr. Chanachai Junjiraporn // Mr. Chupong Tanasettakorn /// Mr.Pitsanu Vichicholchai /// Ms. Netchanok Anawan /// /// Remarks : X = / = Chairperson Director Executive Chairperson // = /// = Executive 120

MFC // // -

Detail of Head of Internal Audit and Head of Compliance CGS Detail Name – Surname Mr. Priyong Teerasathian Position Deputy Managing Director, Audit and Compliance Age 46 Years Old Education 2007 : Bachelor of Law / Thammasat University 1993 : Bachelor of Accountancy / Ramkhamhaeng University Training 1. Internal Audit Program 2 by Federation of Accounting Professions Under The Royal Patronage of His Majesty The King 2. (Compliance Officer) Fundamental and technical supervision for compliance officer in securities 3. Monitoring of Financial Institutions 4. Practice guidelines related to derivatives (DRG) 5. The development of knowledge about the procedures for the business and report suspicious transactions with financial institutions. 6. Curriculum standards for compliance officer of the securities industry – intermediate 7. (ASCO Compliance Training Program) 18 hours (September 2013) Work Experience 2013 – Present : Deputy Managing Director / Country Group Securities PCL 2012 – 2013 : Vice President / Classic Gold Futures Co., Ltd. 2006 – 2012 : Senior Vice President / KTB Securities (Thailand) Co., Ltd. 2003 – 2006 : Manager / United Securities PCL Duration of Contract Indefinitely

121

Detail Responsibilities of Head of Responsibilities Compliance 1. Monitoring and supervision the operations of the Company and subsidiary according to the laws, rules and regulations that related. Develop the system to ensure the effectiveness of supervise and audit of company as requirements. 2. Training about regulations to Companyâ&#x20AC;&#x2122;s officer. 3. To advise, comment about rules and regulations to directors, management and other departments in the company 4. Preparation the annual audit plan. Evaluate the adequacy and effectiveness of internal control system of the company to Audit Committee and Board of Directors for approval. Perform the audit to achieve the audit plan. 5. Perform a secretary of Audit Committee. 6. Support and coordinate with other departments upon request. 7. Strengthen and develop the staff of Audit and Compliance to have the knowledge to perform adequately and efficiently. 8. Other duties as assigned

122

REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO THE SHAREHOLDERS AND BOARD OF DIRECTORS COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED We have audited the financial statements in which equity method is applied and the separate financial statements of Country Group Securities Public Company Limited, which comprise the statement of financial position in which equity method is applied and the separate statement of financial position as at December 31, 2014, and the related statements of comprehensive income, changes in owners’ equity and cash flows in which equity method is applied and the related separate statements of comprehensive income, changes in owners’ equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Thai Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

123

Opinion In our opinion, the aforementioned financial statements in which equity method is applied and the separate financial statements present fairly, in all material respects, the financial position of Country Group Securities Public Company Limited as at December 31, 2014, and financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards Emphasis of Matter Without modifying our opinion, as described in Note 1.2 and Note 38 to the financial statements, the Company has established Country Group Holding Public Company Limited in accordance with the business restructuring plan of the Company. Country Group Holding Public Company Limited had accomplished its tender offer to exchange the ordinary shares of the Company with the ordinary shares of Country Holding Public Company Limited on December 25, 2014, resulting to the Company became the subsidiary of Country Group Holding Public Company Limited. In addition, the Company has delisted its ordinary shares from being the securities listed on the Stock Exchange of Thailand on January 8, 2015.

BANGKOK February 23, 2015

Chavala Tienpasertkij Certified Public Accountant (Thailand) Registration No. 4301 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.

124

COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2014 BAHT Notes

FINANCIAL STATEMENTS

SEPARATE

IN WHICH

FINANCIAL STATEMENTS

EQUITY METHOD IS APPLIED As at

As at

December 31,

2014

2013

2014

2013

ASSETS Cash and cash equivalents

1,144,607,815

1,073,087,608

1,144,607,815

1,073,087,608

Deposits at financial institutions

269,310,000

569,310,000

269,310,000

569,310,000

Receivables from Clearing House

32,189,616

442,940,349

32,189,616

442,940,349

2,304,223,685

1,531,023,127

2,304,223,685

1,531,023,127

Investments - net

975,606,502

237,449,760

975,606,502

237,449,760

Investment in associated company - net

546,612,943

340,153,559

532,567,296

326,977,310

Property, premises and equipment - net

152,259,533

186,622,547

152,259,533

186,622,547

Intangible assets - net

98,225,958

96,575,450

98,225,958

96,575,450

Deferred tax assets

107,331,535

143,055,030

107,331,535

145,690,285

Other assets - net

127,419,856

127,887,922

127,419,856

127,887,922

5,757,787,443

4,748,105,352

5,743,741,796

4,737,564,358

Securities and derivatives business receivables - net

TOTAL ASSETS

Notes to the financial statements form an integral part of these financial statements

125

COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF FINANCIAL POSITION (CONTINUED) AS AT DECEMBER 31, 2014 BAHT

Notes

FINANCIAL STATEMENTS

SEPARATE

IN WHICH

FINANCIAL STATEMENTS

EQUITY METHOD IS APPLIED

LIABILITIES AND OWNERS’ EQUITY LIABILITIES Payables to Clearing House Securities business payables

As at

December 31,

2014

2013

2014

2013

187,679,778 1,846,213,834

25,096,463 1,129,699,869

187,679,778 1,846,213,834

25,096,463 1,129,699,869

Derivatives liabilities

57,273

Payables under finance leases Employee benefit obligations Other liabilities Total liabilities

17 18 19

3,110,971 44,045,050 188,342,967 2,269,392,600

3,428,712 46,864,861 165,355,749 1,370,502,927

OWNERS’ EQUITY Share capital Authorized share capital 2,589,743,484 ordinary shares of Baht 1.00

TOTAL LIABILITIES AND OWNERS’ EQUITY

57,273 3,428,712 46,864,861 165,355,749 1,370,502,927

2,589,743,484

3,189,785,935 ordinary shares of Baht 1.00 Issued and paid-up share capital 2,589,743,484 ordinary shares of Baht 1.00 Premium on share capital Other component of owners' equity Retained earnings Appropriated Statutory reserve Unappropriated Total owners' equity

3,110,971 44,045,050 188,342,967 2,269,392,600

2,589,743,484 3,189,785,935

21 10.3

3,189,785,935

2,589,743,484 139,078,735 (5,170,661)

2,589,743,484 139,078,735 (8,940,060)

2,589,743,484 139,078,735 (13,631,538)

2,589,743,484 139,078,735 (2,179,721)

75,408,087 689,335,198 3,488,394,843 5,757,787,443

55,574,679 602,145,587 3,377,602,425 4,748,105,352

75,408,087 683,750,428 3,474,349,196 5,743,741,796

55,574,679 584,844,254 3,367,061,431 4,737,564,358

Notes to the financial statements form an integral part of these financial statements

126

COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2014 BAHT Notes

REVENUES Brokerage fees Fees and services income Gain on investments Gain on derivatives Share of profit from investment for using equity method Interest and dividends Interest on margin loans Other income Total revenues EXPENSES Finance costs Fee and service expenses Operating expenses Personnel expenses Premises and equipment expenses Directorsâ&#x20AC;&#x2122; remuneration Other expenses Bad debt and doubtful accounts Total expenses INCOME BEFORE INCOME TAX INCOME TAX NET INCOME OTHER COMPREHENSIVE INCOME (LOSS) Gains (losses) on re-measuring available-for-sale investments Adjustment surplus on re-measuring available-for-sale investments disposed during the years Actuarial gains on defined post-employment benefit plans Income tax relating to components of other comprehensive income (loss) Total other comprehensive income (loss) - net TOTAL COMPREHENSIVE INCOME

26 27 10.4

10.5 28

30 31

BASIC EARNINGS PER SHARE WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED 2014 2013

SEPARATE FINANCIAL STATEMENTS 2014

2013

1,024,704,552 61,716,999 99,042,759 3,162,726

1,695,680,086 39,588,808 66,150,446 19,723,499

1,024,704,552 61,716,999 99,042,759 3,162,726

1,695,680,086 39,588,808 66,150,446 19,723,499

60,406,932 68,289,745 45,069,986 237,975,720 1,600,369,419

86,424,302 90,959,489 56,604,590 13,707,904 2,068,839,124

143,048,495 45,069,986 237,975,720 1,614,721,237

141,795,439 56,604,590 13,707,904 2,033,250,772

21,075,886 105,938,478

53,583,831 156,610,947

21,075,886 105,938,478

53,583,831 156,610,947

690,507,227 170,039,332 11,365,000 133,877,698 2,874,350 1,135,677,971 464,691,448 (79,739,855) 384,951,593

1,072,167,248 194,926,006 11,145,000 144,756,121 15,931,601 1,649,120,754 419,718,370 (74,904,818) 344,813,552

690,507,227 170,039,332 11,365,000 133,877,698 2,874,350 1,135,677,971 479,043,266 (82,375,110) 396,668,156

1,072,167,248 194,926,006 11,145,000 144,756,121 15,931,601 1,649,120,754 384,130,018 (69,710,333) 314,419,685

4,040,613

(15,815,602)

(14,985,908)

(3,795,778)

891,137

8,626,069

(2,887,565)

3,163,051

917,740

759,155

10,670,254

(12,652,551)

(4,550,962)

(3,036,623)

395,621,847

332,161,001

392,117,194

311,383,062

BAHT

0.149

0.138

0.153

0.126

2,589,743,484

2,491,133,102

2,589,743,484

2,491,133,102

Notes to the financial statements form an integral part of these financial statements

127

COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF CHANGES IN OWNERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2014 BAHT

Notes

Balance as at January 1, 2013 Change during the year Capital Acquisition Discount on capital stock Dividends paid Total comprehensive income (loss) Statutory reserve

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED

Issued and

Premium

paid-up share capital

on share capital

2,330,759,812

258,983,672 -

Other reserves

139,318,081 (239,346) -

Surplus (deficit) on re-measuring investments 3,712,491

Retained earnings Appropriated Statutory reserve

Total

Unappropriated

owners' equity

39,853,695

560,475,919

3,074,119,998

(12,652,551) -

15,720,984

(287,422,900) 344,813,552 (15,720,984)

258,983,672 (239,346) (287,422,900) 332,161,001 -

Balance as at December 31, 2013

2,589,743,484

139,078,735

(8,940,060)

55,574,679

602,145,587

3,377,602,425

Balance as at January 1, 2014 Change during the year Dividends paid Total comprehensive income (loss) Statutory reserve

2,589,743,484

139,078,735

(8,940,060)

55,574,679

602,145,587

3,377,602,425

3,769,399 -

19,833,408

(284,829,429) 391,852,448 (19,833,408)

(284,829,429) 395,621,847 -

139,078,735

(5,170,661)

75,408,087

689,335,198

3,488,394,843

Balance as at December 31, 2014

2,589,743,484

Notes to the financial statements form an integral part of these financial statements

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COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF CHANGES IN OWNERS' EQUITY (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2014 BAHT Notes Issued and paid-up share capital

2,330,759,812

Balance as at January 1, 2013

SEPARATE FINANCIAL STATEMENTS Other reserves Retained earnings Surplus (deficit) Appropriated Unappropriated on re-measuring Statutory reserve investments

Premium on share capital

139,318,081

856,902

Total owners' equity

573,568,453

3,084,356,943

(2,179,721)

15,720,984 55,574,679

(287,422,900) 314,419,685 (15,720,984) 584,844,254

258,983,672 (239,346) (287,422,900) 311,383,062 3,367,061,431

(2,179,721)

55,574,679

584,844,254

3,367,061,431

19,833,408 75,408,087

(284,829,429) 403,569,011 (19,833,408) 683,750,428

(284,829,429) 392,117,194 3,474,349,196

39,853,695 Change during the year Capital acquisition Discount on capital stock Dividends paid Total comprehensive income (loss) Statutory reserve Balance as at December 31, 2013 Balance as at January 1, 2014 Change during the year Dividends paid Total comprehensive income (loss) Statutory reserve Balance as at December 31, 2014

258,983,672 2,589,743,484

139,078,735

2,589,743,484

139,078,735

2,589,743,484

139,078,735

(239,346)

(3,036,623) -

(11,451,817) (13,631,538)

Notes to the financial statements form an integral part of these financial statements

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COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2014 BAHT FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED 2014

SEPARATE FINANCIAL STATEMENTS 2013

2014

2013

464,691,448

419,718,370

479,043,266

384,130,018

57,724,619 2,874,350

64,047,127 15,931,601

57,724,619 2,874,350

64,047,127 15,931,601

(10,542,265)

(78,923)

(10,542,265)

(78,923)

derivatives liabilities Gain from trading in trading investments

25 (75,206,834)

85,797 (66,072,048)

25 (75,206,834)

85,797 (66,072,048)

Loss (gain) from trading in available-for-sale investments Reverse impairment on investment

(13,293,660)

525

(13,293,660)

525

(205,589,985)

(3,220,940)

3,032,653

(3,220,940)

3,032,653

(60,406,932)

(86,424,302)

9,977,897

12,465,402

9,977,897

12,465,402

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments Depreciation and amortization Bad debt and doubtful accounts Unrealized gain on re-measuring trading investments Unrealized loss on re-measuring

in associated company Loss (gain) on disposal and written off premises, and equipment and intangible assets Share of profit from investment for using equity method Employee benefits expense Finance costs

21,075,886

53,583,831

21,075,886

53,583,831

(113,359,731)

(147,564,079)

(188,118,481)

(198,400,029)

99,583,043

135,939,639

99,583,043

135,939,639

(21,075,886)

(53,310,198)

(21,075,886)

(53,310,198)

(4,463,410)

(89,950,487)

(4,463,410)

(89,950,487)

Income from operating activities before changes in operating assets and liabilities

148,767,625

261,404,908

148,767,625

261,404,908

(Increase) decrease in operating assets Deposits at financial institutions Receivables from Clearing House

300,000,000 410,750,733

(462,929,545) (190,473,432)

300,000,000 410,750,733

(462,929,545) (190,473,432)

(776,074,908) (83,256,941,378) 82,654,660,573 (211,699) -

1,208,591,250 (64,394,949,930) 64,474,955,300 97,868,654 1,573,463

(776,074,908) (83,256,941,378) 82,654,660,573 (211,699) -

1,208,591,250 (64,394,949,930) 64,474,955,300 97,868,654 1,573,463

162,583,315 716,513,965 (57,298) (4,171,639)

(161,426,020) (494,444,085) (485,289) (5,264,630)

162,583,315 716,513,965 (57,298) (4,171,639)

(161,426,020) (494,444,085) (485,289) (5,264,630)

(15,483,885)

(104,562,933)

(15,483,885)

(104,562,933)

340,335,404

229,857,711

340,335,404

229,857,711

Interest and dividends income Cash received from interest Cash paid for interest Cash paid for income tax

Securities and derivatives business receivables Cash paid for purchases of trading investments Cash received from sales of trading investments Other assets - net Cash received from tax refundable Increase (decrease) in operating liabilities Payables to Clearing House Securities business payables Derivatives liabilities Employee benefit obligations Other liabilities Net cash flows provided by operating activities

130

COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2014 BAHT FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED 2014

SEPARATE FINANCIAL STATEMENTS

2013

2014

2013

CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchases of available-for-sale investments

(207,737,627)

(140,707,432)

(207,737,627)

(140,707,432)

80,423,862

1,018

80,423,862

1,018

Cash received from sales of available-for-sale investments Cash paid for purchases of bill of exchange

Cash received from bill of exchange

80,000,000

(150,965,817) 80,000,000

80,000,000

(150,965,817) 80,000,000

(9,850)

10,399,375

249,464

10,399,375

249,464

74,758,750

50,835,950

74,758,750

50,835,950

(38,601,308)

(60,307,202)

(38,601,308)

(60,307,202)

17,262,878

2,227,523

17,262,878

2,227,523

16,496,080

(218,666,496)

16,496,080

(218,666,496)

Cash paid for purchase of investment in securities Cash received from dividend of investments in securities Cash received from dividend of investment in associated company Cash paid for purchases of premises and equipment and intangible assets Cash received from sales of premises and equipment and intangible assets Net cash flows provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash received from debentures and -

364,550,018

Cash paid for debentures and other borrowing

other borrowing

(715,000,000)

Cash paid for payables under finance leases

(481,848)

Cash received from capital acquisition Cash paid for dividend

(2,180,166)

67,111

(481,848) -

364,550,018 (715,000,000) (2,180,166) 67,111

(284,829,429)

(28,745,686)

(284,829,429)

(28,745,686)

(285,311,277)

(381,308,723)

(285,311,277)

(381,308,723)

71,520,207

(370,117,508)

71,520,207

(370,117,508)

Cash and cash equivalents as at January 1,

1,073,087,608

1,443,205,116

1,073,087,608

1,443,205,116

Cash and cash equivalents as at December 31,

1,144,607,815

1,073,087,608

1,144,607,815

1,073,087,608

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

Notes to the financial statements form an integral part of these financial statements

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COUNTRY GROUP SECURITIES PUBLIC COMPANY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014 1.

GENERAL INFORMATION 1.1

The Company’s general information Country Group Securities Public Company Limited, (“the Company”), is incorporated in Thailand and was listed on the Stock Exchange of Thailand (the “Stock Exchange”) in 1993. On January 8, 2015, the Company delisted the Company’s ordinary shares from being the securities listed on the Stock Exchange (see Note 1.2). The Company converted the status to be a Public Limited Company in accordance with the Public Limited Companies Act on February 17, 1994. The head office is located at 132, Sindhorn Tower 1, 2nd Floor, Wireless Road, Lumpini, Pathumwan, Bangkok 10330. The parent company is Country Group Holdings Public Company Limited (“Country Group Holdings”), which is incorporated in Thailand, by holding 99.1% of the Company’s paid up share capital. (see Note 1.2) As at December 31, 2014 and 2013, the Company has 41 branches and 50 branches, respectively. On October 22, 2008, the Ministry of Finance had approved the securities business license type Kor No. Lor Kor-0002-01 and cancelled the old securities business licenses No. 51/2517 and No. 18/2547. The securities business license type Kor is the license that undertakes securities business in various categories consisting of 1. 2. 3. 4. 5. 6. 7. 8.

Securities Brokerage Securities Trading Securities Underwriting Investment Advisory Service Mutual Fund Management Private Fund Management Securities Borrowing and Lending Venture Capital Management.

The Office of the Securities and Exchange Commission has approved the Company to act as the financial advisory from March 21, 2012 to March 20, 2017.

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The Company was granted a license No. 0007/2551 on August 13, 2008 to undertake the derivatives agent from the Office of the Securities and Exchange Commission which has been effective since July 31, 2008. The Company was granted a license on July 12, 2010 to undertake the securities borrowing and lending business as the Principal from the Office of the Securities and Exchange Commission. The mutual fund management, the private fund management and the venture capital management shall be commenced only after the Company is granted the approval from the Office of the Securities and Exchange Commission. 1.2

Restructuring Plan On April 29, 2014, The Annual General Shareholdersâ&#x20AC;&#x2122; Meeting for the year 2014 of the Company passed a resolution to approve the business restructuring plan of the Company. According to such restructuring plan, the Company will establish the company under the name Country Group Holdings Public Company Limited in order to engage in the business of investment and to hold the shares of the Company. Country Group Holdings will make a tender offer for all the securities of the Company by exchanging them for the securities of the same type of Country Group Holdings, with the exchange rate of 1 per 1, namely one ordinary share of the Company per one ordinary share of Country Group Holdings. On December 25, 2014, Country Group Holdings reported that as a result of the tender offer, Country Group Holdings had acquired 99.1% of the total number of paid up shares. Since this was not less than the target 75% of the total number of paid up shares, the tender offer was accomplished and the Company is the subsidiary of Country Group Holdings. On January 8, 2015, the ordinary shares of the Company was delisted from the Stock Exchange, and the ordinary shares of Country Group Holdings were listed in place of the Company in accordance with the business restructuring plan.

BASIS FOR PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS 2.1

The Company maintains its accounting records in Thai Baht and prepares its statutory financial statements in Thai language in conformity with Thai Financial Reporting Standards and practices generally accepted in Thailand and in accordance with the Notifications of the Office of the Securities and Exchange Commission.

133

2.2

The presentation of the financial statements has been made in compliance with requirement of Thai Account Standard No. 1 (Revised 2012) “Presentation of Financial Statements”, and also the Notification of the Office of the Securities and Exchange Commission (“SEC”) No. SorTor/Kor/Nor. 53/2553, dated December 15, 2010, regarding “The Form of Financial Statements for Securities Companies”. Thai Financial Reporting Standards affecting the presentation and/or disclosure in the current year financial statements The Federation of Accounting Professions has issued the Notifications regarding Thai Financial Reporting Standards (TFRSs) which are effective for the financial statements for the period beginning on or after January 1, 2014 onwards, as follow: Thai Accounting Standards (“TAS”) TAS 1 (Revised 2012) Presentation of Financial Statements TAS 7 (Revised 2012) Statement of Cash Flows TAS 12 (Revised 2012) Income Taxes TAS 17 (Revised 2012) Leases TAS 18 (Revised 2012) Revenue TAS 19 (Revised 2012) Employee Benefits TAS 21 (Revised 2012) The Effects of Changes in Foreign Exchange Rates TAS 24 (Revised 2012) Related Party Disclosures TAS 28 (Revised 2012) Investments in Associates TAS 31 (Revised 2012) Interests in Joint Venture TAS 34 (Revised 2012) Interim Financial Reporting TAS 36 (Revised 2012) Impairment of Assets TAS 38 (Revised 2012) Intangible assets Thai Financial Reporting Standards (“TFRS”) TFRS 2 (Revised 2012) Share - Based Payments TFRS 3 (Revised 2012) Business Combinations TFRS 5 (Revised 2012) Non-current Assets Held for Sale and Discontinued Operations TFRS 8 (Revised 2012) Operating Segments Thai Accounting Standards Interpretations (“TSIC”) TSIC 15 Operating Leases - Incentives TSIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease TSIC 29 Disclosure - Service Concession Arrangements TSIC 32 Intangible Assets - Web Site Costs

134

Thai Financial Reporting Standard Interpretations (“TFRIC”) TFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRIC 4 Determining Whether an Arrangement Contains a Lease TFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds TFRIC 7 Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies TFRIC 10 Interim Financial Reporting and Impairment TFRIC 12 Service Concession Arrangements TFRIC 13 Customer Loyalty Programmes TFRIC 17 Distributions of Non-cash Assets to Owners TFRIC 18 Transfers of Assets Form Customers Above TFRSs have no material impact on these financial statements. In addition, the Federation of Accounting Professions issued the Notification regarding the Conceptual Framework for Financial Reporting (Revised 2014), which was announced in the Royal Gazette and effective from October 15, 2014 onwards to replace the Accounting Framework (Revised 2009). Such Conceptual Framework for Financial Reporting has no material impact on these financial statements. 2.3

Thai Financial Reporting Standards announced in the Royal Gazette but not yet effective The Federation of Accounting Professions has issued the Notifications regarding Thai Financial Reporting Standards (TFRSs), which are effective for the accounting period beginning on or after January 1, 2015 onwards as follows: Thai Accounting Standards (“TAS”) TAS 1 (Revised 2014) Presentation of Financial Statements TAS 2 (Revised 2014) Inventories TAS 7 (Revised 2014) Statement of Cash Flows TAS 8 (Revised 2014) Accounting Policies, Changes in Accounting Estimates and Errors TAS 10 (Revised 2014) Events after the Reporting Period TAS 11 (Revised 2014) Construction Contracts TAS 12 (Revised 2014) Income Taxes TAS 16 (Revised 2014) Property, Plant and Equipment TAS 17 (Revised 2014) Leases TAS 18 (Revised 2014) Revenue TAS 19 (Revised 2014) Employee Benefits

135

TAS 20 (Revised 2014) TAS 21 (Revised 2014) TAS 23 (Revised 2014) TAS 24 (Revised 2014) TAS 26 (Revised 2014) TAS 27 (Revised 2014) TAS 28 (Revised 2014) TAS 29 (Revised 2014) TAS 33 (Revised 2014) TAS 34 (Revised 2014) TAS 36 (Revised 2014) TAS 37 (Revised 2014) TAS 38 (Revised 2014) TAS 40 (Revised 2014)

Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rate Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Separate Financial Statements Investments in Associates and Joint Ventures Financial Reporting in Hyperinflationary Economies Earnings per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible assets Investment Property

Thai Financial Reporting Standards (“TFRS”) TFRS 2 (Revised 2014) Share - Based Payment TFRS 3 (Revised 2014) Business Combinations TFRS 5 (Revised 2014) Non-current Assets Held for Sale and Discontinued Operations TFRS 6 (Revised 2014) Exploration for and Evaluation of Mineral Assets TFRS 8 (Revised 2014) Operating Segments TFRS 10 Consolidated Financial Statements TFRS 11 Joint Arrangements TFRS 12 Disclosure of Interests in Other Entities TFRS 13 Fair Value Measurement Thai Accounting Standards Interpretations (“TSIC”) TSIC 10 (Revised 2014) Government Assistance - No Specific Relation to Operating Activities TSIC 15 (Revised 2014) Operating Leases - Incentives TSIC 25 (Revised 2014) Income Taxes - Change in the Tax Status of an Enterprise or its Shareholders TSIC 27 (Revised 2014) Evaluating the Substance of Transactions in the Legal Form of a Lease TSIC 29 (Revised 2014) Disclosure - Service Concession Arrangements TSIC 31 (Revised 2014) Revenue - Barter Transactions Involving Advertising Services TSIC 32 (Revised 2014) Intangible Assets - Web Site Costs Thai Financial Reporting Standard Interpretations (“TFRIC”) TFRIC 1 (Revised 2014) Changes in Existing Decommissioning, Restoration and Similar Liabilities

136

TFRIC 4 (Revised 2014) TFRIC 5 (Revised 2014) TFRIC 7 (Revised 2014) TFRIC 10 (Revised 2014) TFRIC 12 (Revised 2014) TFRIC 13 (Revised 2014) TFRIC 14 TFRIC 15 (Revised 2014) TFRIC 17 (Revised 2014) TFRIC 18 (Revised 2014) TFRIC 20

Determining whether an Arrangement contains a Lease Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies Interim Financial Reporting and Impairment Service Concession Arrangements Customer Loyalty Programmes TAS 19 (Revised 2014) - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Agreements for the Construction of Real Estate Distributions of Non-cash Assets to Owners Transfers of Assets from Customers Stripping Costs in the Production Phase of a Surface Mine

The Federation of Accounting Professions has issued the Notification regarding Thai Financial Reporting Standard (TFRS), which is effective for the accounting period beginning on or after January 1, 2016 onwards as follow: Thai Financial Reporting Standards (“TFRS”) TFRS 4 (Revised 2014) Insurance Contracts The Company’s management anticipates that the Company will adopt the above TFRSs relevant to the Company in the preparation of the Company’s financial statements when they become effective. The Company’s management anticipates that the adoption of the other TFRSs as above will have no material impact on the financial statements of the Company in the period of initial application. 2.4

The financial statements in which equity method is applied Share of profit from investment for using equity method expressed as a percentage of total revenues of the Company presented in the financial statements in which equity method is applied as follows: For the years ended December 31, 2014 2013 MFC Asset Management Public Company Limited (audited by other auditors) - Share of profit from investment for using equity method (Baht) - Percentage of total revenues of the Company

137

60,406,932 3.8

86,424,302 4.2

SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies. Significant accounting policies adopted by the Company are summarized below: 3.1

Revenue recognition Brokerage fees Brokerage fees from securities business and derivatives business are recognized as income on the transaction date. Fees and services income Fees income is recognized on an accrual basis and services income is recognized on the basis of percentage of completion, as specified in the service agreement. Gain (loss) on investments and derivatives Gain (loss) on investments and derivatives are recognized as income or expenses on trading date. Interest on margin loans Interest is recognized on an accrual basis, but where there is uncertainty as to the collectability of loans and interest, the Company stops using an accrual basis. In the following cases, collectability of loans and interest is held to be uncertain. 1) Loans which are not fully collateralized. 2) Installment loans with repayments scheduled less frequently than every 3 months and for which principal or interest is overdue by more than 3 months. 3) Installment loans with repayments scheduled over than every 3 months, unless there is clear evidence and a high degree of certainty that full repayment will be received. 4) Problem financial institution.

138

5) Other receivables from which interest payment is overdue for 3 months or more. These conditions are based on the guidelines stipulated by the Office of the Securities and Exchange Commission. Interest and dividend on investments Interest on investments is recognized as income on an accrual basis. Dividend on investments is recognized as income when the dividend is declared. 3.2

Expenses recognition Expenses are recognized on an accrual basis. Operating leases Lease in which substantially all the risks and rewards of ownership of assets remain with the lessor, payments made under operating leases are recognized in the statements of comprehensive income on a straight - line basis over the term of the lease. Lease incentives received are recognized in the statements of comprehensive income as an integral part of the total lease payments made. Contingent rentals are charged to the statements of comprehensive income in the accounting period in which they are incurred.

3.3

Recognition and amortization of customer deposits Money which customers have placed with the Company in cash accounts, cash balance and credit balance for securities trading and derivatives trading is recorded as the asset and liability of the Company. As at the statement of financial position date, the Company writes these amounts off from both assets and liabilities and presents only assets and liabilities which belong to the Company.

3.4

Cash and cash equivalents Cash and cash equivalents include cash on hand, current deposit accounts, saving deposit accounts, time deposit with maturities not later than 3 months from acquisition date, and without commitments, call notes receivables and term promissory notes with maturities within 3 months from acquisition date. This accords with the Notification issued by the Office of the Securities and Exchange Commission.

139

3.5

Deposits at financial institutions Deposits at financial institutions include fixed deposit accounts, promissory notes with maturities over 3 months from acquisition date, deposit used as collateral and certificate of deposit with maturities within 3 months from acquisition date which the Company intends to hold to roll over it.

3.6

Receivables and payables from/to Clearing House Net balances of receivable and payable incurred from settlement of securities and derivatives trading each day through Thailand Securities Depository Co., Ltd., and net balances of receivable and payable included from settlement of foreign securities trading each day through foreign securities companies, are presented as net balance receivables or payables from/to Clearing House in accordance with the Notification of the Office of the Securities and Exchange Commission No. SorTor/Kor/Nor. 53/2553 regarding â&#x20AC;&#x153;The Forms of Financial Statements for Securities Companiesâ&#x20AC;? dated December 15, 2010.

3.7

Securities and derivatives business receivables Securities and derivatives business receivables are the net balance after deducting allowance for doubtful accounts. Securities business receivables comprise 3 categories which are receivables from securities businesses of cash accounts, margin loans and other receivables. Receivables from securities businesses of cash accounts are the receivables that were derived from cash settlements within 3 working days for equity securities business receivables and agreed payment for debt securities business receivables, after the securities purchasing date. Margin loans are accounts that debtors are granted loans for securities purchasing with collaterals at the rate which is not lower than the rate required by the Stock Exchange of Thailand. Other receivables include overdue securities and derivatives receivables of cash accounts and securities and derivatives receivables which are the subject of legal proceedings, are undergoing restructuring or are settling in installments. The allowance for doubtful accounts is based on the assessment of the status of individual debtor and overall debtors as well as the requirements as stated in the Office of the Securities and Exchange Commissionâ&#x20AC;&#x2122;s Notifications No. KorThor. 33/2543 and KorThor. 5/2544 dated August 25, 2000 and February 15, 2001, respectively. Such assessment takes into consideration

140

various factors including the risks involved and the value of collateral. Allowance is made for the estimated losses that might be incurred where the debts are not fully secured and/or there exists a possibility that principal and interest cannot be recovered in full. Such debt classifications and provisions are in accordance with guidelines by the Office of the Securities and Exchange Commission as follows: a) Assets classified as bad debt are to satisfy the following criteria: 1) Loans balances which the Company has already made every effort to collect, but which remain unpaid and which the Company has already written off in accordance with tax law. 2) Loans balances which the Company has forgiven. b) Doubtful debt is defined as the uncollateralized portion of the value of a debt which meets the following criteria: 1) General loans, problem financial institution loans, and other loans for which the collateral value is less than the loan balance. 2) Installment loans with repayments scheduled less frequently than every 3 months and for which principal or interest is overdue by more than 3 months. 3) Installment loans with repayments scheduled over than every 3 months, unless there is clear evidence and a high degree of certainty that full repayment will be received. c) Sub-standard debt is defined as the collateralized portion of loans which meet the criteria in b). Loans classified as bad debt will be written off when identified. Provision will be set aside for loans classified as doubtful at not less than 100% of the doubtful debt balance. 3.8

Investments Investments in marketable securities held for trading are stated at fair value, with any resultant gain or loss on re-measuring investments recognized in the statements of comprehensive income.

141

Investments in debt securities that the Company intends and is able to hold to maturity are stated at amortized cost less impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortized using the effective interest rate method over the period to maturity. Investments in debt securities and marketable equity securities other than those securities held for trading or intended to be held to maturity, are classified as being available-for-sale investments and are stated at fair value, with any resultant gain or loss on re-measuring investments being recognized as other component of owners’ equity in owners’ equity. The exception is impairment losses, which is recognized in the statements of comprehensive income. When these investments are disposed, the cumulative gain or loss previously recognized directly in other component of owners’ equity in owners’ equity is recognized in the statements of comprehensive income. Where these investments are interest-bearing, interest calculated using the effective interest method is recognized in the statements of comprehensive income. Investments in equity securities which are not marketable are stated at cost, net allowance for impairment (if any). The fair value of marketable security is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange of Thailand. The fair value of unit trusts of closed - end fund is determined from their net asset value. The fair value of debentures is calculated by using the latest bid yield as quoted by the Thai Bond Market Association. The weighted average method is used for computation of the cost of investments in equity securities. The first in - first out method is used for computation of the cost of investments in derivatives. Impairment Loss on impairment (if any) of investments is recognized in the statements of comprehensive income when the carrying amount exceeds its recoverable value. 3.9

Investment in associated company Investment in associated company is accounted for in the financial statements in which equity method is applied using the equity method. Investment in associated company is accounted for in the separate financial statements using the cost method less allowance for impairment loss (if any).

142

Any excess of the cost of acquisition over the carrying amount of the identifiable assets, liabilities and contingent liabilities of an associated company recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Loss on impairment (if any) of investment in associated company is recognized in the statements of comprehensive income. 3.10

Property, premises and equipment Property is stated at cost. Premises and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any). Depreciation is charged to the statements of comprehensive income on a straight-line basis over the estimated useful lives of each part of an item from the date that premises and equipment are available to use. The estimated useful lives are as follows: Premises Premises/leasehold improvement Furniture and office equipment Vehicles

20 5 3-5 5

years years years years

Leased assets Leases in terms of which the Company assumes substantial the risk and rewards of ownership other than legal title are classified as finance leases. Leased asset acquired by way of finance leases is capitalized at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses (if any). Lease payments are apportioned between the finance charges and reduction of the lease liability. Finance charges are charged directly to the statements of comprehensive income. Impairment Premises and equipment are tested for impairment when indicators of impairment are identified.

143

Gain and loss on disposals are determined by comparing proceeds with carrying amount and are included in the statements of comprehensive income.

144

3.11

Intangible assets Intangible assets with definite useful life are stated at cost less accumulated amortization and allowance for impairment (if any). Amortization is charged to the statements of comprehensive income on a straight-line basis over the estimated useful lives of an item from the date that intangible assets with definite useful life are available for use. The estimated useful lives are as follows: Using derivatives business fee Computer software

1 - 5 years 5 years

Intangible assets with indefinite useful life are tested for impairment when indicators of impairment are identified, and allowance for impairment is recognized (if any). 3.12

Assets classified as held for sale Assets are classified as assets held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use, the Companyâ&#x20AC;&#x2122;s management anticipates the sale is highly probable and the assets are available for immediate sale in its present condition. Assets held for sale consist of immovable properties which is stated at the lower of cost amount or fair value after deducting costs of sales.

3.13

Leasehold right Leasehold right is stated at cost less accumulated amortization and allowance for impairment (if any). Amortization is charged to the statements of comprehensive income on a straight-line basis over the period of the lease term.

3.14

Investment property Investment property is stated at cost less accumulated depreciation and allowance for impairment (if any).

145

3.15

Securities business payables Securities business payables are the obligations of the Company in respect of its securities and derivatives businesses with outside parties.

3.16

Derivatives liabilities Derivative warrants are recorded as liabilities items and the changes in fair value are recorded in the statements of comprehensive income. The fair value of derivative warrants is based on the latest offer price of the last working day of the year as quoted on the Stock Exchange of Thailand.

3.17

Borrowings Borrowings are recognized initially at fair value of proceeds received. Borrowings are subsequently stated at amortized cost using the effective yield method; any difference between proceeds and the redemption value is recognized in the statements of comprehensive income over the period of borrowings.

3.18

Provision for liabilities The Company recognizes provision as liabilities in the financial statements when the amount of the liability can be reliably estimated and as commitments when it is likely that loss of resources which are of economic benefit to the Company will result from settlement of such commitments.

3.19

Financial instruments Financial instruments carried in the statement of financial position include cash and cash equivalents, deposits at financial institutions, receivables from Clearing House, securities and derivatives business receivables, investments, investment in associated company, payables to Clearing House, securities business payables, derivatives liabilities and payables under finance lease. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

146

3.20

Employee benefits 3.20.1

Provident fund The contribution for employee provident fund is recorded as expense when incurred.

3.20.2

Employee benefit obligations The Company calculated the post-employment benefits obligation under the Thai Labor Protection Act based on actuarial assumptions at the end of reporting period using Projected Unit Credit Method, which is estimated based on the present value of expected cash flows of benefits to be paid in the future taken into account the actuarial assumptions, including salaries, turnover rate, mortality rate, years of service and other factors. Discount rate which calculates the post-employment benefit obligation based on yield rate of government bond. The expenses for the defined post-employment benefits plan are recognized as personnel expenses in the statement of comprehensive income. Actuarial gains on defined post-employment benefits are recognized in other comprehensive income (loss).

3.21

Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Company recognizes deferred tax liabilities for all taxable temporary differences while they recognize deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilized.

147

At each reporting date, the Company reviews and reduces the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. The Company records deferred tax directly to owners' equity if the tax relates to items that are recorded directly to owners' equity. 3.22

Basic earnings per share Basic earnings per share is determined by dividing net income for the year by the weighted average number of ordinary shares held by outside parties outstanding during the year.

3.23

Foreign currency transactions Transactions during the year denominated in foreign currencies are translated into Baht at rates of exchange on transaction dates. Monetary assets and liabilities in foreign currencies at the date of the financial statements are converted at the reference exchange rates established by the Bank of Thailand at that date. Gains or losses on exchange arising on translation and settlement is recognized as income or expense in the statements of comprehensive income.

3.24

Use of accounting estimates The preparation of financial statements in conformity with generally accepted accounting principles also requires the Companyâ&#x20AC;&#x2122;s management to exercise judgments in order to determine the accounting policies, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Although these estimates are based on managementâ&#x20AC;&#x2122;s reasonable consideration of current events, actual results may differ from these estimates. Accounting estimates are as follows: Fair value of financial instrument The fair value of financial instrument disclosures, considerable judgment is necessarily required in estimation of fair value. Accordingly, the estimated fair value presented herein is not necessarily indicative of the amount that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

148

SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION Non-cash items are as follows: 4.1

Finance lease agreements for vehicles are as follows: BAHT FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPERATE FINANCIAL STATEMENTS As at December 31, 2014 2013 Finance lease payables brought forward (Less) Cash payments Add Interest expense Finance lease payables carried forward

3,428,712 (481,848) 164,107 3,110,971

4.2

During the years ended December 31, 2014 and 2013, the Company recognized gain (loss) on re-measuring available-for-sale investments and adjustment surplus on re-measuring availablefor-sale investments disposed during the years, which were presented as addition (deduction) from other component of ownersâ&#x20AC;&#x2122; in the financial statements in which equity method is applied amounting to approximately Baht 3.8 million and approximately Baht (12.7) million, respectively, and the separate financial statements amounting to approximately Baht (11.5) million and approximately Baht (3.0) million, respectively.

4.3

During the years ended December 31, 2014 the Company reverse allowance for impairment from investment in associated company approximately Baht 205.6 million. (2013: nil)

149

5,422,380 (2,180,166) 186,498 3,428,712

CASH AND CASH EQUIVALENTS FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPERATE FINANCIAL STATEMENTS As at December 31, 2014 2013 BAHT BAHT Cash, short-term deposits and promissory notes with maturities not later than 3 months from acquisition date (Less) Deposits for customers’ account* Total

1,631,237,837 (486,630,022) 1,144,607,815

1,747,942,993 (674,855,385) 1,073,087,608

(* Deposit accounts for the customers are not shown as assets and liabilities in the financial statements according to the Notification of the Office of the Securities and Exchange Commission.)

DEPOSITS AT FINANCIAL INSTITUTIONS 6.1 As at December 31, 2014 and 2013, the Company has deposits at financial institutions as follow: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 As at December 31, 2013 Not later Later than Total Not later Later than Total than 3 3 months but than 3 months but months not later than 3 months not later than 1 year 1 year Baht Baht Baht Baht Baht Baht Fixed deposits 950,001,006 600,000,000 1,550,001,006 1,350,000,000 300,000,000 1,650,000,000 Deposits with restriction 69,310,000 69,310,000 69,310,000 69,310,000 (Less) Deposits in customers’ account * (750,001,006) (600,000,000) (1,350,001,006) (850,000,000) (300,000,000) (1,150,000,000) Total 200,000,000 69,310,000 269,310,000 500,000,000 69,310,000 569,310,000 (* Deposit accounts for the customers are not shown as assets and liabilities in the financial statements according to the Notification of the Office of the Securities and Exchange Commission.)

150

6.2

As at December 31, 2014 and 2013, deposits at financial institutions of the Company have been pledged as collateral to banks as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 BAHT BAHT Bank guarantee in compliance with requirement of Apex Securities Co., Ltd.â&#x20AC;&#x2122;s share purchase/sale agreement (see Note 34.2) Pledged as collateral for over-draft credit limit and borrowing Others Total

15,070,000

54,000,000 240,000 69,310,000

RECEIVABLES FROM CLEARING HOUSE FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 BAHT BAHT Receivables from clearing house Receivables from foreign securities companies (Less) Receivables from Clearing House for the customers* Total

77,142,883 188,898,457 (233,851,724) 32,189,616

519,888,196 40,023,256 (116,971,103) 442,940,349

(* Receivables from Clearing House accounts for the customers are not shown as assets and liabilities in the financial statements according to the Notification of the Office of the Securities and Exchange Commission.)

151

SECURITIES AND DERIVATIVES BUSINESS RECEIVABLES - NET

Securities business receivables Customers’ cash accounts Margin loans Other receivables - Receivables under litigation - Past due and other receivables Total securities business receivables (Less) Allowance for doubtful accounts (see Note 9) Total Derivatives business receivables Other receivables - Past due and other receivables Total derivatives business receivables (Less) Allowance for doubtful accounts (see Note 9) Total

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 BAHT BAHT 1,628,510,098 633,556,638

888,615,382 597,706,948

396,739,119 513,182 2,659,319,037 (355,095,352) 2,304,223,685

396,739,119 912,648 1,883,974,097 (352,950,970) 1,531,023,127

729,968 729,968 (729,968)

1,531,023,127

2,304,223,685

Customers’ cash accounts are classified as normal receivables. As at December 31, 2014 and 2013, the Company has ceased to recognize the interest income from securities and derivatives business receivables amounting to approximately Baht 398.0 million and approximately Baht 397.7 million, respectively, for financial statements in which equity method is applied and the separate financial statements of which the allowance for doubtful accounts was fully set up for doubtful status in accordance with the Notification of the Office of the Securities and Exchange Commission No. Kor Thor. 33/2543, regarding “The accounting preparation for sub-standard receivables of securities companies” dated August 25, 2000, which is updated by the Notification No. Kor Thor. 5/2544 dated February 15, 2001.

152

The Company has classified securities and derivatives business receivables including related accrued interest receivables according with the Notification of the Office of the Securities and Exchange Commission regarding “The accounting preparation for sub-standard receivables of securities company”. Securities business receivables are classified as follows: Unit : Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 As at December 31, 2013 Securities Allowance Securities Securities Allowance Securities and derivatives for doubtful and derivatives and derivatives for doubtful and derivatives business accounts business business accounts business receivables and receivables - net receivables and receivables - net accrued interest accrued interest receivables receivables Normal debts 2,262.1 2,262.1 1,486.3 1,486.3 Substandard debts 42.1 42.1 44.7 44.7 Doubtful of loss debts 355.8 (355.8) 353.0 (353.0) Total 2,660.0 (355.8) 2,304.2 1,884.0 (353.0) 1,531.0

ALLOWANCE FOR DOUBTFUL ACCOUNTS FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 BAHT BAHT Balance at beginning of the years (Less) Allowance for doubtful accounts Balance at end of the years

10.

352,950,970 2,874,350 355,825,320

336,882,253 16,068,717 352,950,970

INVESTMENTS - NET 10.1 Cost and fair value FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 As at December 31, 2013 Cost/ Fair value Cost/ Fair value Amortized cost/ Amortized cost/ Carrying amount Carrying amount Baht Baht Baht Baht

Trading investments Equity securities: Listed securities (Less) Allowance for revaluation Total equity securities - net Debt instruments: Bond (Less) Allowance for revaluation Total debt instruments - net Total trading investments - net

153

6,107,667 (56,667) 6,051,000

6,051,000 6,051,000

1,173,880 (880) 1,173,000

1,173,000 1,173,000

672,553,850 10,598,053 683,151,903 689,202,903

683,151,903 683,151,903 689,202,903

1,173,000

Debt instruments with held-to-maturity Bill of exchange (Less) Unearned discount Allowance for loss on impairment Total debts instruments with held-to-maturity - net

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 As at December 31, 2013 Cost/ Fair value Cost/ Fair value Amortized cost/ Amortized cost/ Carrying amount Carrying amount Baht Baht Baht Baht 139,000,000 (139,000,000) -

219,000,000 (3,604,336) (139,000,000)

76,395,664 -

76,395,664

Available-for-sale investments Equity securities: Unit trusts Listed securities (Less) Allowance for revaluation Allowance for loss on impairment Total available-for-sale investments - net

101,500,000 180,819,549 (16,822,286) 265,497,263

97,304,323 168,192,940 265,497,263

1,000,000 46,420,754 (2,717,051) (5,713,322) 38,990,381

872,557 38,117,824 38,990,381

General investments Unit trusts Equity securities (Less) Allowance for revolution Allowance for loss on impairment Total general investments - net Total

624,873 47,328,364 (217,137) (26,829,764) 20,906,336 975,606,502

407,736 23,417,609 23,825,345 978,525,511

100,629,565 41,605,192 (227,600) (21,116,442) 120,890,715 237,449,760

100,401,965 21,570,036 121,972,001 238,531,046

The above investments excluded customerâ&#x20AC;&#x2122;s securities which are deposited with the Company for customersâ&#x20AC;&#x2122; securities brokerage purpose. 10.2

Investments in debt instruments by remaining period FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2013 Less than 1 year 1 - 5 years Over 5 years Total Baht Baht Baht Baht Debt instruments maturity Total

76,395,664 76,395,664

As at December 31, 2014 and 2013, the Company has investment in debt instrument amounting to Baht 139.0 million which the Company has fully provided allowance for loss on impairment.

154

76,395,664 76,395,664

10.3

Unrealized gain (loss) on re-measuring available-for-sale investments recognized in other component of owners’ equity in owners’ equity FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2014 2013 Baht Baht Balance at beginning of the year Change in the years - From re-measuring of investments - Adjustments relating to the disposal of surplus on re-measuring investments* - Income tax relating to components of other comprehensive income (loss) Balance at end of the years (*

10.4

As at December 31, 2014 2013 Baht Baht

(8,940,060)

3,712,491

(2,179,721)

856,902

4,040,613

(15,815,602)

(14,985,908)

(3,795,778)

891,137 (1,162,351) (5,170,661)

3,163,051 (8,940,060)

891,137 2,642,954 (13,631,538)

759,155 (2,179,721)

The above transactions were previously recognized gain from re-measuring of investments in other comprehensive income in the prior years. Such investments were sold and recognized as gain or loss on investments in the statements of comprehensive income for the year ended December 31, 2014 and 2013.)

Gain on investments

Unrealized gain on re-measuring trading investments Gain on sale of trading investments Gain (loss) on sale of available-for-sale investments Total

10.5

SEPARATE FINANCIAL STATEMENTS

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 BAHT BAHT 10,542,265 78,923 75,206,834 66,072,048 13,293,660 (525) 99,042,759 66,150,446

Interest and dividends FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED For the years ended December 31, 2014 2013 Baht Baht 57,890,370 90,710,025 10,399,375 249,464 68,289,745 90,959,489

Interest income Dividends Total

155

SEPARATE FINANCIAL STATEMENTS For the year ended December 31, 2014 2013 Baht Baht 57,890,370 90,710,025 85,158,125 51,085,414 143,048,495 141,795,439

10.6

As at December 31, 2014 and 2013, the Company has investments in companies that have financial position and performance problems as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 As at December 31, 2013 Cost/ Carrying Fair Value Allowance for loss Cost/ Carrying Fair Value Allowance for loss amount on impairment amount on impairment Baht Baht Baht Baht Baht Baht Ordinary shares

11.

26,829,764

21,116,442

INVESTMENT IN ASSOCIATED COMPANY - NET As at December 31, 2014 and 2013, the Company has investment in associated company as follows: Unit : Million Baht Companyâ&#x20AC;&#x2122;s name

Equity method As at

Cost method As at

Dividend For the years ended

December 31,

2014

2013

2014

2013

2014

Public Company Limited (Less) Allowance for impairment

546.6

340.2

532.6

(205.6)

Total

546.6

340.2

532.6

327.0

2013

MFC Asset Management 74.8

50.8

74.8

50.8

Details and summarized financial information of the associated company are as follows: Unit : Million Baht As at December 31, 2014 2013 MFC Asset Management Public Company Limited Nature of business: mutual fund Country of incorporation: Thailand Shareholding (percentage) Carrying amounts based on equity method Carrying amounts based on cost method - net Paid-up share capital Total assets Total liabilities

24.9 546.6 532.6 120.0 1,579.1 229.1

156

24.9 340.2 327.0 120.0 1,638.6 286.1

Unit : Million Baht For the years ended December 31, 2014 2013 Total revenues Net income Total comprehensive income

942.4 236.4 297.5

1,179.1 340.8 302.2

On March 3, 2014, the investment in associated company mentioned above, totaling 29,903,500 shares, are registered the pledge as collateral for borrowing from a financial institution. On February 16, 2015, the Company withdraws the above investment in associated company that are registered the pledge as collateral for borrowing from a financial institution. As at December 31, 2014, the facility is not currently being used. 12.

PROPERTY, PREMISES AND EQUIPMENT - NET FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS Balance Additions Decreases Transfer in/ Balance as at (Transfer out) as at December 31, December 31, 2013 2014 Baht Baht Baht Baht Baht

Cost : Property Premises Premises/leasehold improvement Furniture and office equipment Vehicles Leasehold improvement during construction Total cost Accumulated depreciation : Premises Premises/leasehold improvement Furniture and office equipment Vehicles Total accumulated depreciation Allowance for impairment Total

30,293,000 19,572,300 269,497,941 396,654,935 42,711,863

1,183,060 14,175,184 -

(27,169,255) (65,146,539) (6,250,000)

20,347,497 158,146 -

30,293,000 19,572,300 263,859,243 345,841,726 36,461,863

896,708 759,626,747

19,955,089 35,313,333

(98,565,794)

(20,505,643) -

346,154 696,374,286

(16,161,699) (172,956,141) (341,463,549) (40,472,858) (571,054,247) (1,949,953) 186,622,547

(343,948) (30,500,080) (25,578,779) (804,358) (57,227,165) -

19,552,515 60,298,399 6,249,999 86,100,913 15,699

157

(16,505,647) (183,903,706) (306,743,929) (35,027,217) (542,180,499) (1,934,254) 152,259,533

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS Balance Additions Decreases Transfer in/ Balance as at (Transfer out) as at December 31, December 31, 2012 2013 Baht Baht Baht Baht Baht Cost : Property Premises Premises/leasehold improvement Furniture and office equipment Vehicles Leasehold improvement during construction Total cost Accumulated depreciation : Premises Premises/leasehold improvement Furniture and office equipment Vehicles Total accumulated depreciation Allowance for impairment Total

30,293,000 19,572,300 253,829,655 387,760,357 49,518,697

5,009,890 23,150,392 -

(13,869,749) (14,255,814) (6,806,834)

24,528,145 -

30,293,000 19,572,300 269,497,941 396,654,935 42,711,863

1,720,560 742,694,569

23,704,293 51,864,575

(34,932,397)

(24,528,145) -

896,708 759,626,747

(15,501,327) (152,079,559) (325,203,031) (44,574,700) (537,358,617) (1,992,803) 203,343,149

(660,372) (30,201,380) (30,389,283) (2,073,966) (63,325,001) -

9,324,798 14,128,765 6,175,808 29,629,371 42,850

Depreciation for the years ended December 31, 2014 2013

(16,161,699) (172,956,141) (341,463,549) (40,472,858) (571,054,247) (1,949,953) 186,622,547

Baht

57,227,165

Baht

63,325,001

As at December 31, 2014 and 2013, certain premises and equipment items have been fully depreciated but are still in use. The original cost, before deducting accumulated depreciation, of those premises and equipment amounted to totaling approximately Baht 462.6 million and approximately Baht 356.0 million, respectively. As at December 31, 2014 and 2013, the Company had finance lease for vehicles with a local leasing company. As at December 31, 2014 and 2013, the carrying amount of leased vehicles is totaling approximately Baht 1.4 million and approximately Baht 2.2 million, respectively.

158

13.

INTANGIBLE ASSETS - NET FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS Remaining Balance as at Additions Decreases Transfer in/ Amortization Allowance for Balance as at useful lives December 31, (Transfer out) impairment December 31, 2013 2014 Baht Baht Baht Baht Baht Baht Baht

Using derivatives business fee - net Computer software - net Securities license Derivatives business membership Computer software in progress Total

0 - 1 years -

4 71,693,766 2,657,500 15,945,000 6,279,180 96,575,450

553,350 (1,592,756) 2,734,625 3,287,975 (1,592,756)

5,436,135 (5,436,135) -

(44,711) (44,711)

4 76,045,784 2,657,500 15,945,000 3,577,670 98,225,958

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS Remaining Balance Additions Decreases Transfer in/ Amortization Allowance for Balance useful lives as at (Transfer out) impairment as at December 31, December 31, 2012 2013 Baht Baht Baht Baht Baht Baht Baht Using derivatives business fee - net Computer software - net Securities license Derivatives business membership Computer software in progress Total

0 - 2 years -

76,869 68,064,929 2,657,500 15,945,000 1,657,908 88,402,206

2,838,630 5,603,997 8,442,627

Amortization for the years ended December 31, 2014 2013

982,725 (982,725) -

(76,865) (192,518) (269,383)

Baht

44,711

Baht

269,383

As at December 31, 2014 and 2013, certain intangible assets have been fully amortized but are still in use. The original cost, before deducting accumulated amortization, of those intangible assets amounted to totaling approximately Baht 11.3 million and Baht 10.5 million, respectively.

159

4 71,693,766 2,657,500 15,945,000 6,279,180 96,575,450

14.

DEFERRED TAX ASSETS Deferred tax assets as at December 31, 2014 and 2013 are as follows:

Deferred tax assets

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2014 2013 Baht Baht 107,331,535 143,055,030 107,331,535 143,055,030

SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 Baht 107,331,535 107,331,535

2013 Baht 145,690,285 145,690,285

FINANCIAL STATEMENT IN WHICH EQUITY METHOD IS APPLIED Balance at Items as Items as Balance at January 1, recognized recognized December 31, 2014 into into Other 2014 Income or Loss Comprehensive Income Baht Baht Baht Baht Temporary differences Allowance for doubtful accounts Allowance for impairment on investment in associated company Allowance for impairment on investments Assets under finance leases Employee benefit obligations Surplus on re-measuring investments Others Total

65,822,393

532,139

38,482,742 27,800,000 237,945 9,372,972 764,931 574,047 143,055,030

(38,482,742) 97,323 1,161,252 50,793 (36,641,235)

(1,725,214) 2,642,954 917,740

66,354,532 27,800,000 335,268 8,809,010 3,407,885 624,840 107,331,535

FINANCIAL STATEMENT IN WHICH EQUITY METHOD IS APPLIED Balance at Items as Items as Balance at January 1, recognized recognized December 31, 2013 into into Other 2013 Income or Loss Comprehensive Income Baht Baht Baht Baht Temporary differences Allowance for doubtful accounts Allowance for impairment on investment in associated company Allowance for impairment on investments Assets under finance leases Employee benefits obligation Surplus on re-measuring investments Others Total

160

62,702,132

3,120,261

43,677,228 27,800,000 475,807 6,459,672 5,775 336,292 141,456,906

(5,194,486) (237,862) 2,913,300 237,755 838,968

759,156 759,156

65,822,393 38,482,742 27,800,000 237,945 9,372,972 764,931 574,047 143,055,030

Balance at January 1, 2014

Baht Temporary differences Allowance for doubtful accounts Allowance for impairment on investment in associated company Allowance for impairment on investments Assets under finance leases Employee benefits obligation Surplus on re-measuring investments Others Total

65,822,393

532,139

41,117,997 27,800,000 237,945 9,372,972 764,931 574,047 145,690,285

(41,117,997) 97,323 1,161,252 50,793 (39,276,490)

Balance at January 1, 2013

SEPARATE FINANCIAL STATEMENTS Items as Items as Balance at recognized recognized December 31, into into Other 2014 Income or Loss Comprehensive Income Baht Baht Baht (1,725,214) 2,642,954 917,740

SEPARATE FINANCIAL STATEMENTS Items as Items as recognized recognized into into Other Income or Loss Comprehensive Income Baht Baht

62,702,132

3,120,261

41,117,997 27,800,000 475,807 6,459,672 5,775 336,292 138,897,675

(237,862) 2,913,300 237,755 6,033,454

759,156 759,156

66,354,532 27,800,000 335,268 8,809,010 3,407,885 624,840 107,331,535

Balance at December 31, 2013

Baht 65,822,393 41,117,997 27,800,000 237,945 9,372,972 764,931 574,047 145,690,285

The Company used a tax rate of 20% for calculation of deferred tax for the years ended December 31, 2014 and 2013.

161

15.

OTHER ASSETS - NET FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 Baht Baht 1,293,644 1,293,644 6,599,225 6,616,664 44,514,371 41,047,484 5,321,927 8,533,060 999,756 1,452,499 24,066,779 24,066,779 19,953,910 26,638,047 19,073,071 16,457,553 5,597,173 1,782,192 127,419,856 127,887,922

Withholding tax Prepaid expenses Clearing fund Advance receivables and loan to employees Leasehold right - net Investment property - net Deposits Accrued income Others Total

As at December 31, 2014 and 2013, such investment property - net is mortgaged as collateral for credit facility from a local financial institution. 16.

DERIVATIVES LIABILITIES As at December 31, 2014 and 2013, derivatives liabilities consists of: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 As at December 31, 2013 Fair Value Notional amount Fair Value Notional amount Baht Baht Baht Baht Trading derivatives Derivatives warrants

162

57,273

247,379

17.

PAYABLES UNDER FINANCE LEASES As at December 31, 2014 and 2013, the Company leases vehicle under the long-term finance leases. The aggregate minimum rental commitment under the finance leases, are as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS Minimum payments Present value of minimum payments As at December 31, As at December 31, 2014 2013 2014 2013 Baht Baht Baht Baht Not later than 1 year Later than 1 year but not later than 5 years

3,218,340 3,218,340 (107,369) 3,110,971

(Less) Deferred interest Total

163

481,848 3,218,340 3,700,188 (271,476) 3,428,712

3,110,971 3,110,971 3,110,971

317,741 3,110,971 3,428,712 3,428,712

18.

EMPLOYEE BENEFIT OBLIGATIONS The Company operates post-employment benefits plan under the Thai Labor Protection Act, which are considered as unfunded defined benefit plans. Amounts recognized in the statements of comprehensive income for post-employment benefits are as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Current service cost Interest cost Total

8,934,137 1,043,760 9,977,897

11,032,262 1,433,140 12,465,402

Movements in the present value of the post-employment benefits obligation are as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Beginning balance of employee benefits obligation Current service cost Interest cost Actuarial gains on defined post-employment benefits plan (Less) Employee benefits paid during the years Balance at end of the years

164

46,864,861 8,934,137 1,043,760 (8,626,069) (4,171,639) 44,045,050

39,664,089 11,032,262 1,433,140 (5,264,630) 46,864,861

The principle actuarial assumptions used to calculate the obligation under the defined benefits plan as at December 31, 2014 and 2013 are as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 (% p.a.) (% p.a.) Financial assumptions Discount rate Employee turnover

Expected rate of salary increase

19.

3.0 0 - 23.0 Subject to the range of age of employees 0 - 4.0

OTHER LIABILITIES

Accrued bonuses Accrued marketing incentive Accrued profit sharing from branches/ marketing teams management Withholding tax and specific business tax payable Value-added-tax payable Other payables Accrued corporate income tax Accrued other expenses Total

20.

3.6 0 - 22.0 Subject to the range of age of employees 0 - 4.0

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 Baht Baht 49,933,519 50,993,350 9,201,589 2,729,837 20,793,642 10,700,362 6,686,312 15,777,320 38,635,210 36,615,013 188,342,967

SHARE CAPITAL On January 19, 2010, the Company had allocated new ordinary shares and warrants to purchase the ordinary shares of the Company No. 5 approximately of 464,393,602 shares at the price of Baht 1.30 per share to the existing shareholders who subscribe for new ordinary shares and the warrants of 464,393,602 units are allocated at the ratio of 1 new ordinary share per 1 unit of warrant for free, by 1 unit of warrant will be entitled to purchase 1 new ordinary share at the price of Baht 1.50 per share. The Company received totaling Baht 603,711,683 from this new ordinary shares allocation. The tenor of warrants is 3 years from the issuance date of warrants. In this regard, the conditions of the exercise were as stipulated in the warrants.

165

29,951,252 8,831,718 3,935,444 16,229,712 52,684,436 165,355,749

Warrant holders can exercise the right to purchase ordinary shares of the Company after 6 months since the date of issue of the warrants and for the subsequent period, the warrant holders can exercise the rights to purchase ordinary shares of the Company every 3 months on the last business day of March, June, September and December of each year. The first exercise date is on September 30, 2010 and the last exercise date is on January 18, 2013, which is the third anniversary of the date of issue of warrants. On January 25, 2010, the Company registered the increase of the issued and paid-up share capital amounting Baht 464,393,602 at the Department of Business Development of the Ministry of Commerce. Subsequently, the Stock Exchange of Thailand acknowledged the increase of the issued and paid-up share capital and warrants to purchase the ordinary shares of the Company No. 5, and has allowed to be traded on the Stock Exchange of Thailand from February 3, 2010 onwards. On April 8, 2011, the Annual General Shareholders’ Meeting for the year 2011 passed a resolution to distribute the dividend to shareholders, which higher than the dividend payment ratio as stipulated in warrants covenants of rights and duties and holders of warrants to purchase new ordinary shares of the Company No. 5. Therefore, the Company has to adjust the exercise ratio and exercise price of warrant to comply with the terms and condition of warrant, by 1 unit of warrant will be entitled to purchase 1.0625 new ordinary share at the price of Baht 1.412 to be in effective on April 18, 2011 onwards. On January 18, 2013, warrants to purchase the ordinary shares of the Company No. 5 of 464,393,602 units were due to be last exercised. There were 44,738 warrants exercised for 47,529 ordinary shares at Baht 1.412 per share, amounting in total to Baht 67,110.95. As a result, the Company had the issued and paid-up share capital increasing from Baht 2,330,759,812 to Baht 2,330,807,341. The Company registered the increase in the issued and paid-up share capital with the Ministry of Commerce on January 25, 2013. Subsequently, the Stock Exchange of Thailand acknowledged such increase of the issued and paid-up share capital to be traded on the Stock Exchange of Thailand from January 30, 2013 onwards. On April 22, 2013, the Annual General Shareholders’ Meeting for the year 2013 passed a resolution to approve the decrease of the Company’s registered capital of 818,741,975 shares by eliminating unsubscribed shares and on May 3, 2013, the Company registered the decrease in the Company’s registered capital at the Department of Business Development of the Ministry of Commerce. The Company’s registered capital were 2,330,807,341 shares at the par value of Baht 1.00 per share, amounting in total to Baht 2,330,807,341. Moreover, the Annual General Shareholders’ Meeting for the year 2013 passed a resolution to increase the registered capital of the Company from Baht 2,330,807,341 to Baht 3,189,785,935 by issuing of 858,978,594 new ordinary shares at the par value of Baht 1.00 per share to reserve for stock dividend of 258,978,594 shares and the exercise of ESOP Warrants Program No. 2 amounting to 600,000,000 shares and on May 7, 2013, the Company registered the increase in registered capital at the Department of Business Development

166

of the Ministry of Commerce. The Company’s registered capital were 3,189,785,935 shares at the par value of Baht 1.00 per share, amounting in total to Baht 3,189,785,935. Also, the Annual General Shareholders’ Meeting for the year 2013 passed a resolution to allocate 858,978,594 new ordinary shares at a par value of Baht 1.00 per share from Baht 2,330,807,341 to Baht 3,189,785,935 by allocation of 258,978,594 new ordinary shares at a par value of Baht 1.00 to reserve for stock dividend and allocation of 600,000,000 new ordinary shares at a par value of Baht 1.00 to reserve for the exercise of warrant holders of the Company under the ESOP No. 2. On May 20, 2013, the Company paid the stock dividend at the ratio of 9 existing share to 1 stock dividend, totaling 258,936,143 shares. And on May 21, 2013, the Company registered the increase in issued and paid-up share capital of 258,936,143 shares with the Department of Business Development of the Ministry of Commerce. Subsequently, the Stock Exchange of Thailand acknowledged the increase of the issued and paid-up share capital and has allowed to be traded on the Stock Exchange of Thailand since May 23, 2013. On April 29, 2014, The Annual General Shareholders’ Meeting for the year 2014 passed a resolution to approve the business restructuring plan of the Company. According to such restructuring plan, the Company will establish the Holding Company under the name “Country Group Holdings Public Company Limited” which will be a public limited company, in order to engage in the business of investment and to hold the shares of the Company. Country Group Holdings will make a tender offer for all the securities of the Company by exchanging them for the securities of the same type of Country Group Holdings, with the exchange rate of 1 per 1, namely one ordinary share of the Company per one ordinary share of Country Group Holdings. After the tender offer is successful (holding more than or equal 75% of the sharers), Country Group Holdings will be the major shareholder of the Company and the ordinary shares of Country Group Holdings will be the securities listed on the Stock Exchange in place of the ordinary shares of the Company which will be simultaneously delisted from being the securities listed on the Stock Exchange. In order to persuade and return the favour to the shareholders of the Company in this business restructuring, after the Business Restructuring is complete and the ordinary shares of Country Group Holdings are listed as securities on the Stock Exchange in replace of the ordinary shares of the Company, Country Group Holdings will issued the warrant to buy ordinary shares of Country Group Holdings to the shareholders who have exchanged their shares in accordance with the business restructuring plan. The warrants will be issued pursuant to the proportion of the amount of shares held by each shareholder in Country Group Holdings after the business restructuring is completed, in a proportion of 3 swapped ordinary shares per 1 unit of warrants, free of charge, and fraction will be rounded down. In exercising the right of the warrants, 1 unit of warrant is eligible for buying 1 ordinary share of Country Group Holdings. Furthermore, the Annual General Shareholders’ Meeting for the year 2014 passed a resolution to approve the reduction in the registered capital of the Company from Baht 3,189,785,935 to Baht 2,589,743,484 by

167

writing off the unsold shares of the Company amounting to 600,042,451 shares, with the par value of Baht 1.00 per share remaining from the reserve for stock dividend 42,451 shares and the exercise of ESOP Warrants program No.2 in amount of 600,000,000 units. On May 12, 2014, the Company registered the decrease in the Companyâ&#x20AC;&#x2122;s registered capital at the department of Business Development of the Ministry of Commerce. The companyâ&#x20AC;&#x2122;s registered capital were 2,589,743,484 shares at the par value of Baht 1.00 per share, amounting in total to Baht 2,589,743,484. On October 17, 2014, the Office of The Securities and Exchange Commission allow Country Group Holdings to make a tender offer for all the securities of the Company. On December 25, 2014, the Company reported that as a result of the tender offer, Country Group Holdings had acquired 2,566,219,121 shares or 99.1% of the total number of paid up shares of the Company by exchanging them for the securities of the same type of Country Group Holdings. As a result, Country Group Holdings is the major shareholder of the Company. In addition, the ordinary shares of Country Group Holdings is the securities listed on the Stock Exchange in place of the ordinary shares of the Company which is simultaneously delisted from being the securities listed on the Stock Exchange on January 8, 2015.

168

As at December 31, 2014 and 2013, the weighted average number of ordinary shares are calculated as follows: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Shares Shares Number of ordinary shares outstanding as at January 1, Weighted average number of increased shares during the years Weighted average number of ordinary shares for the years ended December 31,

2,589,743,484 -

2,330,759,812 160,373,290

2,589,743,484

2,491,133,102

21.

PREMIUM ON SHARE CAPITAL The premium on share capital account is set up under the provisions of Section 51 of the Public Companies Act B.E. 2535, which requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“premium on share capital”). Premium on share capital is not available for dividend distribution.

22.

WARRANT GRANTED UNDER THE EMPLOYEE STOCK OWNERSHIP PROGRAM On April 22, 2013, the Annual General Shareholders’ Meeting for the year 2013 passed a resolution to approve the issuance and offering warrants to purchase the ordinary shares of the Company under the Employees Stock Ownership Program (“ESOP”) No. 2 in the amount not exceeding 600,000,000 units to directors, managements, employees and/or advisors of the Company for free. The tenors of warrants is not over 3 years from the issuance date of warrants. Also 1 unit of warrant will be entitled to purchase 1 new ordinary share at the price of Baht 1.30. The Company has not issued and offered the warrants to buy ordinary shares of the Company, in accordance with ESOP program No. 2. On April 29, 2014, the Annual General Shareholders’ Meeting for the year 2014 passed a resolution to approve the cancellation of the issuance and offering of the warrants to buy ordinary shares of the Company, to the directors, managements, employees and/or advisors of the Company in accordance with ESOP Program No. 2 in the amount not exceeding 600,000,000 units as mention above. As the result of the Company operated to do business restructuring plan, all stocks of the Company would be provoked from being listed company. This effected to the stocks owned by the directors, managements, employees and/or advisors of the Company which received from warrant had no market to purchase these stocks and did not serve the purpose of ESOP Program No. 2. Besides, Country Group Holdings was defined to comply with the Business Restructuring Plan for issuance and offering of the warrants to buy ordinary shares of Country Group Holdings, to the directors, managements, employees and/or advisors of Country Group Holdings. Moreover, the Company would do as condition of this project which was approved by the 2013 Annual General Meeting. Excepted that shareholder meeting of Country Group Holdings will resolve otherwise after succession of Business Restructuring Plan.

169

23.

CAPITAL MANAGEMENT The Company’s objectives in managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholder and benefits for other stakeholders and to maintain an optimal capital structure.

24.

DIVIDEND PAID On April 22, 2013, the Annual General Shareholders’ Meeting for the year 2013 passed a resolution to approve the profit allocation as the statutory reserve to the amount of Baht 39,853,695 and approve the stock and cash dividend payment as follow: -

The stock dividend at the ratio of 9 existing share to 1 stock dividend, totaling 258,978,594 shares with the par value of Baht 1, or equivalent to Baht 258,978,594 or Baht 0.111 per share. In case that any shareholders hold the indivisible share remaining after such allocation, the cash dividend will be paid at the rate of Baht 0.111 per share; and

The cash dividend at Baht 0.012 per share, totaling Baht 28,775,399 to reserve for withholding tax under the law rate.

On May 20, 2013, the Company paid the stock and cash dividend payment as follow: - The stock dividend, totaling 258,936,143 shares. - The cash dividend totaling Baht 28,745,686. On April 29, 2014, the Annual General Shareholders’ Meeting for the year 2014 passed a resolution to approve the profit allocation as the statutory reserve to the amount of Baht 55,574,679 and approve the dividend payment for the year 2013 at the rate of Baht 0.11 per share, totaling Baht 284,829,429. Such dividend was already paid on May 15, 2014. 25.

STATUTORY RESERVE The Company is required to set aside a statutory reserve at least 5% of its net income after deducting accumulated deficit brought forward (if any) until the reserve reaches 10% of the authorized share capital according to the Public Limited Companies Act B.E. 2535, section 116. The statutory reserve could not be used for dividend payment.

170

26.

BROKERAGE FEES FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Brokerage fees from securities business Brokerage fees from derivatives business Total

27.

985,503,909 39,200,643 1,024,704,552

1,617,009,051 78,671,035 1,695,680,086

FEES AND SERVICES INCOME FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Underwriting fee Financial advisory fee Investment advisory fee Others Total

28.

31,362,125 10,672,132 252,965 19,429,777 61,716,999

22,813,000 8,790,000 912,517 7,073,291 39,588,808

OTHER INCOME FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Reverse impairment from investment is associated company Gain on disposal assets Income from the overdue payment charge Others Total

205,589,985 3,653,830 216,592 28,515,313 237,975,720

171

1,596,470 1,086,486 11,024,948 13,707,904

29.

KEY MANAGEMENT BENEFIT EXPENSES

The Company records the expense of salaries, remunerations, other monetary benefits and postemployment benefits paid to the Companyâ&#x20AC;&#x2122;s management, in accordance with the Notification of the definitions of the Office of the Securities and Exchange Commission, management under such definition includes a chief executive officer, the next four executive levels immediately below the chief executive officer and all persons in positions comparable to these fourth executive levels as follow: FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Short term employee benefits Post-employment benefits Total

108,847,155 1,832,326 110,679,481

172

158,443,963 1,948,287 160,392,250

30.

DIRECTORS’ REMUNERATION Directors’ remuneration represents the benefits paid to the Company’s directors in accordance with Section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits payable to directors who hold executive position. Directors’ remuneration was approved by the ordinary shareholders’ meeting of the Company.

31.

OTHER EXPENSES FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2014 2013 Baht Baht Taxes and duties Professional and other fees Entertainment expenses Gasoline and travelling expenses Information and communication expenses Stationery and office supplies Advertising and promotion expenses Others Total

32.

3,663,461 27,615,725 22,371,514 13,270,364 33,301,280 5,063,649 11,152,102 17,439,603 133,877,698

5,207,999 26,292,891 24,033,413 14,186,304 37,305,654 5,828,561 6,462,680 25,438,619 144,756,121

PROVIDENT FUND On November 1, 2002, the Company set up a provident fund for those employees who elected to participate. The contributions from the employees are deducted from their monthly salaries, and the Company matches the individuals’ contributions. At the present, the provident fund is managed by MFC Asset Management Public Company Limited, authorized financial institution in accordance with the Provident Fund Act B.E. 2530 (1987). For the years ended December 31, 2014 and 2013, the Company has contributed approximately Baht 12.8 million and Baht 14.4 million, respectively, to the fund.

173

33.

INCOME TAX Income tax for the years ended December 31, 2014 and 2013, are as follows: Unit : Million Baht SEPARATE FINANCIAL STATEMENTS

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2014 2013 Baht Baht Current income tax for the years Deferred tax Total income tax expenses income

43,099 36,641 79,740

As at December 31, 2014 2013 Baht Baht

75,744 (839) 74,905

43,099 39,276 82,375

75,744 (6,034) 69,710

Reconciliation of effective tax rate

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED For the year ended December 31, 2014 2013 (Thousand Rate (Thousand Rate Baht) (%) Baht) (%) Income before income tax Income tax at the domestic tax rate Tax effect of income and expenses that are not taxable and not deductible for tax purpose Income tax as statements of comprehensive income

464,691

419,718

Unit : Million Baht SEPARATE FINANCIAL STATEMENTS For the year ended December 31, 2014 2013 (Thousand Rate (Thousand Rate Baht) (%) Baht) (%) 479,043

384,130

92,938

83,944

95,809

76,826

(13,198)

(9,039)

(13,434)

(7,116)

79,740

74,905

82,375

69,710

According to the Royal Decree No. 555 B.E. 2555 issued under the Revenue Code regarding the corporate income tax rate reduction effective on December 27, 2012, the corporate income tax rates were reduced from 30% to 23% of net income for an accounting period beginning on or after January 1, 2012 and 20% of net income for two consecutive accounting period beginning on or after January 1, 2013 and according to the Royal Decree No. 577 B.E. 2557 issued under the Revenue Code regarding the corporate income tax rate reduction effective on November 11, 2014, the corporate income tax rates were reduced from 30% to 20% of net income for an accounting period beginning on or after January 1, 2015, up to December 31, 2015. Therefore, the Company used tax rate of 20% for the corporate income tax calculation for the years ended December 31, 2014 and 2013, respectively.

174

Income tax recognized in component of other comprehensive income (loss) Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED For the years ended December 31, 2014 2013 Before-tax Tax (expense) Net-of-tax Before-tax Tax (expense) Net-of-tax Amount Benefit Amount Amount Benefit Amount Surplus on re-measuring investment Actuarial gains on defined post-employment benefit plans Total

4,931,750

(1,162,351)

3,769,399 15,815,602

(3,163,051)

12,652,551

8,626,069 13,557,819

(1,725,214) (2,887,565)

6,900,855 10,670,254 15,815,602

(3,163,051)

12,652,551

Baht SEPARATE FINANCIAL STATEMENTS For the years ended December 31,

Deficit on re-measuring investment Actuarial gains on defined post-employment benefit plans Total

34.

Before-tax Amount

2014 Tax (expense) Benefit

Net-of-tax Amount

Before-tax Amount

2013 Tax (expense) Benefit

(14,094,771)

2,642,954

(11,451,817)

(3,795,778)

759,155

(3,036,623)

8,626,069 (5,468,702)

(1,725,214) 917,740

6,900,855 (4,550,962)

(3,795,778)

759,155

(3,036,623)

Net-of-tax Amount

COMMITMENTS AND CONTINGENT LIABILITIES 34.1

As at December 31, 2014 and 2013, the Company had operating lease commitments for office building and vehicles as follows: Unit : Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 Not later than 1 year Later than 1 year but not later than 5 years Total

34.2

53.7 25.1 78.8

70.2 56.6 126.8

On November 25, 2014, the Company had entered into the agreement with a domestic bank to issue the bank guarantee amounting to approximately Baht 15.1 million in compliance with requirement of Apex Securities Co., Ltd.’s share purchase/sale agreement regarding Apex Securities Co., Ltd.’s contingent liability to make any payment pursuant to a court decision, and the long-term deposit was pledged. (see Note 6.2)

175

34.3

35.

As at December 31, 2014 and 2013, the Company has the outstanding commitment in respect of benefit paid to employees which the Company had already entered of Baht 26.7 million and Baht 0.3 million, respectively.

RELATED PARTY TRANSACTIONS Related parties are those parties linked to the Group and Company by common shareholders or directors. Transactions with related parties are conducted at the pricing policy based on the normal course of business conditions. The pricing policies for particular types of transactions are explained further below: Pricing policies Brokerage fees Fees and services income Expenses

At market price which is the same rate as general client At agreed price which approximates market value At market price

Significant balances with related parties as at December 31, 2014 and 2013 are as follows:

Relationship

Deposits for customersâ&#x20AC;&#x2122; account Related persons Country Group Development Public Company Limited Total Securities business receivables - net Related persons Investment - net Mutual fund managed by associate Country Group Development Public Company Limited Total

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED AND SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 2013 Baht Baht

Related persons Related company

75,475 10,076,529 10,152,004

4,747,247 26,622 4,773,869

Related persons

3,163,658

Associate Related company

407,736 407,736

Other asset - net Country Group Holdings Public Company Limited

Parent company

2,518,396

Accrued expenses Sing Sian Yer Pao Company Limited

Related company

256,800

48,150

176

100,401,965 76,395,664 176,797,629

Significant transactions with related parties for the years ended December 31, 2014 and 2013 are as follows: Relationship

Brokerage fees from securities business Related persons Mutual fund managed by associate Country Group Development Public Company Limited Total Brokerage fee from derivatives business Related person

Related persons Associate Related company

Related persons

FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED For the years ended December 31,

SEPARATE FINANCIAL STATEMENTS For the years ended December 31,

2014 Baht

2013 Baht

2014 Baht

2013 Baht

1,199,548 45,121,017 245,758 46,566,323

4,697,493 70,976,457 75,673,950

1,199,548 45,121,017 245,758 46,566,323

4,697,493 70,976,457 75,673,950

18,530

Ongoing fee MFC Asset Management Public Company Limited

Associate

426,128

343,334

426,128

343,334

Fee and services income MFC Asset Management Public Company Limited

Associate

252,965

284,917

252,965

284,917

Dividend income MFC Asset Management Public Company Limited

Associate

74,758,750

50,835,950

Interest income Related person Finance Costs Related person Country Group Development Public Company Limited Total Premises and equipment expenses EDP Enterprise Company Limited Other expenses - Advertising expenses Sing Sian Yer Pao Company Limited Dividend paid Related persons Related persons Mutual fund managed by associate Related company Total

Related persons

7,937

817,232

7,937

817,232

Related persons Related company

175,640 50,439 226,079

162,424 434 162,858

175,640 50,439 226,079

162,424 434 162,858

Related company

1,238,485

1,210,337

1,238,485

1,210,337

Related company

1,021,850

1,043,250

1,021,850

1,043,250

Directors Related persons Associate Related company

56,662,250 17,672,083 10,188,277 6,013,345 90,535,955

44,229,385 18,149,880 2,378,833 6,253,479 71,011,577

56,662,250 17,672,083 10,188,277 6,013,345 90,535,955

44,229,385 18,149,880 2,378,833 6,253,479 71,011,577

177

36.

OPERATING SEGMENT INFORMATION

The Company discloses operating segments information in accordance with the Thai Financial Reporting Standard No. 8 “Operating Segments” and under the same basis as internal management reports presented to the Company’s chief operating decision maker for resources allocation to and performance evaluation of various segments. The Company’s business operations involve 3 principal segments: securities and derivatives brokerage segment, investment banking segment and securities and derivatives trading segment. These operations are carried on in Thailand. Below is the operating segment of the Company information for the years ended December 31, 2014 and 2013. Unit : Thousand Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED For the years ended December 31, Securities and Securities and derivatives Investment banking derivatives brokerage segment segment trading segment Other segment Total 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 Revenues: Brokerage fees 1,024,705 1,695,680 Fees and services income 22,225 9,779 Gain on investments and derivatives (1,224) 1,267 Share of profit from investment for using the equity method Interest and dividends Interest on margin loans 45,070 56,605 Other income Total revenues 1,090,776 1,763,331 Expenses Income before income tax Income tax Net income for the years

39,492 -

29,810 -

103,429

84,607

39,492

29,810

14,809 118,238

249 84,856

178

60,406 86,424 53,481 90,710 237,976 13,708 351,863 190,842

1,024,705 61,717 102,205

1,695,680 39,589 85,874

60,406 86,424 68,290 90,959 45,070 56,605 237,976 13,708 1,600,369 2,068,839 (1,135,678) (1,649,121) 464,691 419,718 (79,740) (74,905) 384,951 344,813

Unit : Thousand Baht

Securities and derivatives brokerage segment 2014 2013 Revenues: Brokerage fees 1,024,705 1,695,680 Fees and services income 22,225 9,779 Gain on investments and derivatives (1,224) 1,267 Interest and dividends Interest on margin loans 45,070 56,605 Other income Total revenues 1,090,776 1,763,331 Expenses Income before income tax Income tax Net income for the years

SEPARATE FINANCIAL STATEMENT For the years ended December 31, Securities and Investment banking derivatives segment trading segment Other segment 2014 2013 2014 2013 2014 2013 39,492 39,492

29,810 29,810

103,429 14,809 118,238

84,607 249 128,239 141,546 237,976 13,708 84,856 366,215 155,254

Total 2014

2013

1,024,705 1,695,680 61,717 39,589 102,205 85,874 143,048 141,795 45,070 56,605 237,976 13,708 1,614,721 2,033,251 (1,135,678) (1,649,121) 479,043 384,130 (82,375) (69,710) 396,668 314,420

Assets classified by segment Unit: Baht

Assets by segment

Securities and derivatives brokerage segment

Investment banking segment

As at December 31, 2014 As at December 31, 2013

2,541,625,565 2,142,902,339

3,109,047 2,366,083

37.

Securities and derivatives trading segment 984,938,729 205,514,398

Total segments

Unallocated assets

3,529,673,341 2,350,782,820

2,228,114,102 2,397,322,532

RISK MANAGEMENT 37.1

Credit risk Credit risk is the risk that the party to a financial instrument will fail to fulfill an obligation causing the Company to incur a financial loss. The financial assets of the Company are not subject to significant concentration of credit risk. The maximum credit risk exposure is the carrying amount of the financial assets, less provision for losses, as stated in the statements of financial position.

179

Total 5,757,787,443 4,748,105,352

37.2

Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates and it will affect the operation results of the Company and its cash flows. Unit : Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2014 Outstanding balances of net financial instruments Repricing or maturity dates Floating Less than 1-5 Over NonNo Total Interest rate (%) rate 1 year years 5 years performing interest Floating Fixed receivables rate rate

Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing house Securities and derivatives business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Payables under finance leases

1,090.3 -

269.3 -

633.6 -

683.2 -

1,670.6 2,304.2 6.25 - 18.00 292.4 975.6 4.30 - 5.50 546.6 546.6 -

187.7 1,846.2 -

3.1

54.3 1,144.6 269.3 32.2 32.2

187.7 1,846.2 3.1

0.13 - 1.30 -

1.40 - 2.00 -

7.33

Unit : Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2013 Outstanding balances of net financial instruments Repricing or maturity dates Floating Less than 1-5 Over NonNo Total Interest rate (%) rate 1 year years 5 years performing interest Floating Fixed receivables rate rate Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing house Securities business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Derivatives liabilities Payables under finance leases

955.7 597.7 -

569.3 76.4 -

3.1

0.3

180

117.4 1,073.1 0.13 - 2.35 569.3 1.90 - 2.40 442.9 442.9 933.3 1,531.0 5.75 - 18.00 161.0 237.4 7.00 340.2 340.2 -

25.1 25.1 1,129.7 1,129.7 0.1 0.1 3.4

7.33

Unit : Million Baht SEPARATE FINANCIAL STATEMENT As at December 31, 2014 Outstanding balances of net financial instruments Repricing or maturity dates Floating Less than 1-5 Over NonNo Total Interest rate (%) rate 1 year years 5 years performing interest Floating Fixed receivables rate rate Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing house Securities and derivatives business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Payables under finance leases

1,090.3 -

269.3 -

54.3 32.2

633.6 -

683.2 -

1,670.6 292.4 532.6

2,304.2 6.25 - 18.00 975.6 4.30 - 5.50 532.6 -

187.7 1,846.2 -

187.7 1,846.2 3.1

3.1

1,144.6 0.13 - 1.30 269.3 32.2 -

1.40 - 2.00 -

7.33 Unit : Million Baht

SEPARATE FINANCIAL STATEMENT As at December 31, 2013 Outstanding balances of net financial instruments Repricing or maturity dates Floating Less than 1-5 Over NonNo Total Interest rate (%) rate 1 year years 5 years performing interest Floating Fixed receivables rate rate Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing house Securities business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Derivatives liabilities Payables under finance leases

955.7 597.7 -

569.3 76.4 -

0.3

117.4 442.9 933.3 161.0 327.0

3.1

25.1 1,129.7 0.1 -

1,073.1 0.13 - 2.35 569.3 1.90 - 2.40 442.9 1,531.0 5.75 - 18.00 237.4 7.00 327.0 -

25.1 1,129.7 0.1 3.4

The average yields on the average financial asset balances and the average cost of funds on average financial liabilities for interest bearing financial instruments are presented in the following table:

181

7.33

Unit : Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2014 Average Interest Average yield balance income/expenses (%) Financial assets Cash and cash equivalents Deposits at financial institutions Securities and derivatives business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables under finance leases

1,031.2 386.0

16.6 7.0

1.6 1.8

553.4 307.6 379.9

45.1 8.0 74.8

8.1 2.6 19.7

3.4

0.2

4.8

Unit : Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2013 Average Interest Average yield balance income/expenses (%) Financial assets Cash and cash equivalents Deposits at financial institutions Securities business receivables - net Investments - net Investment in associated company - net Financial liabilities Debentures and other borrowing Payables under finance lease

1,372.5 359.9 782.6 77.7 343.1

46.2 7.9 56.6 5.4 50.8

301.9 4.1

12.8 0.2

3.4 2.2 7.2 8.8 14.8

5.1 4.6 Unit : Million Baht

SEPARATE FINANCIAL STATEMENT As at December 31, 2014 Average Interest Average yield balance income/expenses (%) Financial assets Cash and cash equivalents Deposits at financial institutions Securities and derivatives business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables under finance leases

182

1,031.2 386.0

16.6 7.0

1.6 1.8

553.4 307.6 378.4

45.1 8.0 74.8

8.1 2.6 19.8

3.4

0.2

4.8

Unit : Million Baht SEPARATE FINANCIAL STATEMENT As at December 31, 2013 Average Interest Average yield balance income/expenses (%) Financial assets Cash and cash equivalents Deposits at financial institutions Securities business receivables - net Investments - net Investment in associated company - net Financial liabilities Debentures and other borrowing Payables under finance leases

37.3

1,372.5 359.9 782.6 77.7 327.0

46.2 7.9 56.6 5.4 50.8

3.4 2.2 7.2 8.8 15.5

301.9 4.1

12.8 0.2

5.1 4.6

Liquidity risk Liquidity risk is the risk that the Company will be unable to liquidate financial assets and/or procure sufficient funds to discharge obligations in a timely manner, resulting in a financial loss. Under the Notification of the Office of the Securities and Exchange Commission No. KorTor 18/2549 regarding “Net Capital Ratio - NCR”, the securities company has to maintain its net capital requirement at the end of the day not less than Baht 15.0 million and not less than 7% of general liabilities. The Company was granted securities business licenses of derivatives agent under the Derivative Act. The Company has to maintain its net liquid capital at the end of working day at least Baht 25.0 million and at least 7% of general liabilities and assets held as collateral except in case the Company discontinued its derivatives agent business and notified to the Office of the Securities and Exchange Commission, the Company has to maintain its net liquid capital as mentioned in the second paragraph. Additionally, in accordance with the regulation of Thailand Clearing House Co., Ltd. (“TCH”) chapter 300 “Members” regarding the “Qualification of an Associated Member”, the Associated Member is required to have total owners’ equity of not less than Baht 150.0 million and/or have a financial condition in accordance with the criteria prescribed by an agency in charge of overseeing the business operations of such juristic person under relevant law.

183

As at December 31, 2014 and 2013, the Company has net capital per requirement of approximately Baht 1,918.9 million and approximately Baht 2,970.3 million, respectively or 88.0% and 242.1%, of general liabilities and assets held as collateral, respectively. The periods of time from the statement of financial position date to the maturity dates of financial instruments as of December 31, 2014 and 2013 are as follows: Unit: Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2014 Outstanding balances of net financial instruments At call Within 1-5 Over No Non-performing Total 1 year years 5 years maturity receivables Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing House Securities and derivatives business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Payables under finance leases

200.0 -

32.2

1,144.6 69.3 -

1,144.6 269.3 32.2

633.6 -

1,628.5 689.2 -

286.4 -

42.1 546.6

2,304.2 975.6 546.6

187.7 1,846.2 3.1

Unit: Million Baht FINANCIAL STATEMENTS IN WHICH EQUITY METHOD IS APPLIED As at December 31, 2013 Outstanding balances of net financial instruments At call Within 1-5 Over No Non-performing Total 1 year years 5 years maturity receivables Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing House Securities business receivables - net Investments - net Investment in associated company - net

500.0 597.7 -

Financial liabilities Payables to Clearing House Securities business payables Derivatives liabilities Payables under finance leases

184

400.0 442.9 888.6 77.5 -

159.9 -

673.1 69.3 44.7 340.2

1,073.1 569.3 442.9 1,531.0 237.4 340.2

25.1 - 1,129.7 0.1 0.3

3.1

25.1 1,129.7 0.1 3.4

At call Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing House Securities and derivatives business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Payables under finance leases

200.0 -

32.2

633.6 -

At call Financial assets Cash and cash equivalents Deposits at financial institutions Receivables from Clearing House Securities business receivables - net Investments - net Investment in associated company - net Financial liabilities Payables to Clearing House Securities business payables Derivatives liabilities Payables under finance leases

37.4

Unit: Million Baht SEPARATE FINANCIAL STATEMENTS As at December 31, 2014 Outstanding balances of net financial instruments Within 1-5 Over No Non-performing Total 1 year years 5 years maturity receivables -

1,144.6 69.3 -

1,144.6 269.3 32.2

1,628.5 689.2 -

286.4 -

42.1 532.6

2,304.2 975.6 532.6

187.7 1,846.2 3.1

Unit: Million Baht SEPARATE FINANCIAL STATEMENTS As at December 31, 2013 Outstanding balances of net financial instruments Within 1-5 Over No Non-performing Total 1 year years 5 years maturity receivables

500.0 597.7 -

400.0 442.9 888.6 77.5 -

159.9 -

673.1 69.3 44.7 327.0

1,073.1 569.3 442.9 1,531.0 237.4 327.0

25.1 1,129.7 0.1 0.3

3.1

25.1 1,129.7 0.1 3.4

Market risk The Companyâ&#x20AC;&#x2122;s exposure to market risk is the risk that volatility on the stock price and derivatives price that will substantially reduce the value of the Companyâ&#x20AC;&#x2122;s investments. However, the Company manages such risk at acceptable levels through risk management policies, and establishment of proper risk limits and parameters, as well as a market risk monitoring function.

185

37.5

Foreign exchange risk As at December 31, 2014 and 2013, the Company does not have any material financial instruments in foreign currencies.

37.6

Fair value The estimated fair values of most financial assets and financial liabilities are based on the amounts recognized in statements of financial position as they are short-term and non-interest sensitive except for the estimated fair values of investments. For trading and available-for-sale investments, fair values are based on the latest bid price of the last working day as of the year as quoted on the Stock Exchange of Thailand. For the unit trusts of closed-end fund and general investments in non-listed equity securities, fair values are estimated from net asset value. For held-to-maturity debt securities, fair values are estimated by using discounted cash flows analyzes based on current interest rates and remaining years to maturity. The fair value of derivative warrants is based on the latest offer price of the last working day of the year as quoted on the Stock Exchange of Thailand.

38.

EVENTS AFTER THE REPORTING PERIOD On January 8, 2015, the Company delisted the Companyâ&#x20AC;&#x2122;s ordinary shares from being the securities listed on the Stock Exchange of Thailand.

39.

APPROVAL OF FINANCIAL STATEMENTS The financial statements for the year ended December 31, 2014 have been approved for issuing by the authorized directors of the Company on February 23, 2015.

186